[Senate Hearing 107-814]
[From the U.S. Government Publishing Office]
S. Hrg. 107-814
FOREIGN OPERATIONS, EXPORT FINANCING, AND RELATED PROGRAMS
APPROPRIATIONS FOR FISCAL YEAR 2003
=======================================================================
HEARINGS
before a
SUBCOMMITTEE OF THE
COMMITTEE ON APPROPRIATIONS UNITED STATES SENATE
ONE HUNDRED SEVENTH CONGRESS
SECOND SESSION
on
H.R. 5410/S. 2779
AN ACT MAKING APPROPRIATIONS FOR FOREIGN OPERATIONS, EXPORT FINANCING,
AND RELATED PROGRAMS FOR THE FISCAL YEAR ENDING SEPTEMBER 30, 2003, AND
FOR OTHER PURPOSES
__________
Agency for International Development
Department of State
Department of the Treasury
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
78-474 WASHINGTON : 2003
____________________________________________________________________________
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
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
Terrence E. Sauvain, Staff Director
Charles Kieffer, Deputy Staff Director
Steven J. Cortese, Minority Staff Director
Lisa Sutherland, Minority Deputy Staff Director
------
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
Elnora Harvey
C O N T E N T S
----------
Tuesday, February 26, 2002
Page
Agency for International Development............................. 1
Wednesday, March 6, 2002
Agency for International Development............................. 61
Department of State.............................................. 72
Tuesday, March 19, 2002
Department of the Treasury: Office of the Secretary.............. 97
Wednesday, April 24, 2002
Department of State: Office of the Secretary..................... 127
Nondepartmental witnesses........................................ 195
FOREIGN OPERATIONS, EXPORT FINANCING, AND RELATED PROGRAMS
APPROPRIATIONS FOR FISCAL YEAR 2003
----------
TUESDAY, FEBRUARY 26, 2002
U.S. Senate,
Subcommittee of the Committee on Appropriations,
Washington, DC.
The subcommittee met at 10:20 a.m., in room SD-192, Dirksen
Senate Office Building, Hon. Patrick J. Leahy (chairman)
presiding.
Present: Senators Leahy, Durbin, Landrieu, and Bond.
AGENCY FOR INTERNATIONAL DEVELOPMENT
STATEMENT OF ANDREW S. NATSIOS, ADMINISTRATOR
opening statement of senator patrick j. leahy
Senator Leahy. Good morning. I apologize for the delay, but
we have been voting, and Senator McConnell is also tied up on
the floor because of the next piece of legislation coming
before the Senate. Obviously, I will keep the record open for
any questions that Senator McConnell has, or any statement he
wishes to make.
I do want to welcome USAID Administrator Natsios, who has
the distinction of being our first witness at the first hearing
of this subcommittee this year.
Mr. Natsios, who is here to testify about the
administration's fiscal year 2003 budget request for USAID's
programs, came to USAID after a successful career both inside
and outside of Government. In a relatively short time, he has
brought a very needed burst of energy and enthusiasm to the
Agency. Mr. Natsios, I commend you for boosting morale the way
you have. I am also pleased that you have given greater
autonomy to USAID's field missions, which are among the
Agency's greatest strengths.
But you also have to deal with some extremely difficult
problems that have plagued USAID for decades. I know you are
willing to tackle these problems that include a cumbersome,
overburdened procurement system and dysfunctional personnel and
financial management systems. Fixing these problems is not
going to be easy, but we will help you.
Now, there are other serious challenges. One we often hear
about is that proposals brought to USAID from private
organizations, universities, and others from outside the
Agency, including Members of Congress, too often receive only
superficial consideration. People seeking funding for projects
are often sent back and forth between Washington headquarters
and field missions, only to be told that a final decision has
to be made at the other location. It's sort of like Major-Major
in Catch-22. The major is out whenever he is in, and he is in
whenever he is out.
I have often said that USAID's greatest asset is its
employees, who are dedicated, hardworking professionals. But,
no one has a monopoly on good ideas, and contracts should be
awarded to those with the best projects, not just those who
work the system the best.
I am also concerned the administration has decided to let
go some of its most capable people in USAID's Legislative and
Public Affairs Bureau. While they are political appointees, I
would feel the same, regardless of who appointed them, because
they have consistently acted in a professional and nonpartisan
manner. They built solid relationships with both Republicans
and Democrats and were outstanding advocates for USAID on
Capitol Hill. By dismissing these experienced public servants,
I think that the administration has probably hurt its ability
to get what it wants from Congress.
I have read your statement, and I agree with a good deal of
it. The whole statement, of course, will be put in the record,
as I know you will want to summarize it.
While you make a convincing case for more funding for
foreign assistance, the budget request itself falls far, far
short. The $7.3 billion you request for USAID's programs from
the Foreign Ops Subcommittee represents only a modest increase
over the fiscal year 2002 level. It is actually a decrease from
last year if you factor in emergency spending.
This budget appears to reduce funding for programs to
protect child and maternal health, combat infectious diseases
like TB and malaria, and assist vulnerable children. That is
not a budget worthy of a great Nation. I will give you one
specific example. In your statement, you discuss USAID's Africa
initiatives, but for education programs in sub-Saharan Africa,
a continent of a billion people, many of whom are illiterate,
you propose just $22 million. That is only a few times more
than we spend on education for Vermont's 100,000 students.
I have no doubt that you probably asked OMB for additional
resources, and that USAID could put more resources to good use.
I know there are tough choices that have to be made, but if the
terrorist attacks of September 11 taught us anything, they
taught us about our mistaken sense of invulnerability.
We should have learned that what happens in far-off places
can have very terrible consequences for Americans here at home.
Whether it is a terrorist attack on an American city, the
proliferation of weapons of mass destruction, or the ravages of
AIDS, our security is directly and indirectly linked to events
and conditions around the globe. With the exception of the cost
of deploying our Armed Forces, the international affairs budget
is what we spend on programs to protect our national security
outside our border.
Some may have asked a year or so ago whether illiteracy in
Indonesia, Pakistan, or Afghanistan affects us here in the
United States. Today, you don't hear that question being asked.
People who are educated can earn money to feed their families
and participate meaningfully in the political life of their
country. In short, these people are often among the greatest
assets to efforts to promote peace and prosperity around the
world.
Some of the organizations working on the front lines in
these countries, as well as Senator McConnell and myself and
others in Congress, have appealed for a lot more spending on
foreign assistance to combat poverty and all the interrelated
causes which include unchecked population growth, political and
economic instability, corruption, destruction of the
environment, drug trafficking, and terrorism. Year after year,
regardless of which party is in the White House or whoever is
in control of Congress, we do not provide the amounts of
foreign aid that we should.
The President's budget provides only $165 million for
education for the world's 2 billion poorest children. The
President's budget provides $1.3 billion for health care for
the world's poorest 3 billion people. That is barely half the
amount we spend on health care for Vermont's 600,000 residents.
This is not acceptable.
Year after year, this committee struggles to find a few
more dollars to alleviate the suffering in refugee camps, which
can be fertile grounds for recruiting terrorists. We argue
about $5 or $10 million for micro credit to help the world's
poorest families start businesses. We rob Peter to pay Paul to
get a few more millions to vaccinate against measles, which
needlessly kills 900,000 children each year. If anyone in this
room is told that they could prevent a child from dying from
measles by giving 20 cents or 30 cents, of course you would dig
in your pockets and do it. That is, essentially, what we are
asking for.
We debate about funding for family planning and
reproductive health care every year, which in this year's
budget request is less than we spent 6 years ago.
Despite this sorry situation, there is a ray of hope. Since
September 11 a number of people, private citizens and a
bipartisan cross-section of Members of Congress, have called
for a new Marshall Plan to combat world poverty. I am pleased
that 41 Senators, Republicans and Democrats, almost half the
Senate, are now on record calling for an increase in foreign
assistance funding.
We cannot pretend that spending one-half of 1 percent of
our Federal budget to improve the lives of 3 billion of the
world's poor is a serious response. It is beneath a great
country like ours. It demeans us both in our own eyes and in
the eyes of the rest of the world.
Political violence and terrorism do not occur in a vacuum.
They are increasingly the result of religious and ethnic
fanaticism that flourishes in countries plagued by misery and
injustice. We are the richest, most powerful Nation on earth.
We can make a number of different arguments for increasing
foreign assistance.
We can say, it is for our national security. And, it is.
The more that you improve democracy and economic well-being in
nations around the world, the less chance we have of being
involved in conflicts against these nations.
We can also say that it is a matter of protecting the
public health of the United States, because every plague and
virus is only an airplane trip away. So we can say increasing
foreign aid is part of our health security.
But I think it is a lot more than that. How can we morally,
as a Nation, stand up here and, year after year, provide such a
piddling amount? I hear all these speeches. We pound our chest
and say how wonderful we are, and by golly, we have got some
good rhetoric on this issue. But one-half of 1 percent to help
the poorest of the world, when we are blessed with the
wealthiest Nation that history has ever known, is simply
inadequate.
If President Bush today were to ask Congress and every
American to support a tripling of our international affairs
budget and explain why it is important to our national security
and to combat international terrorism, there is no doubt in my
mind that Congress would respond and give it to him, and the
public would be supportive. The public understands this better,
I think, than the administration and the Congress do.
We have got to work together. We have got to do far better.
I mean, how can you have children who year after year are
condemned to blindness or to disease. Many of us in this room
have children. We, as a simple matter of course, bring them to
the doctor to get their shots for measles and various other
things. But millions of children in the developing world never
have that chance, and millions of children die as a result.
prepared statements
We have received statements from Senator Mitch McConnell
and Senator Tim Johnson that will be inserted in the record at
this time.
[The statements follow:]
Prepared Statement of Senator Patrick J. Leahy
Good morning. I want to welcome USAID Administrator Andrew Natsios,
who has the distinction of being our first witness at the first hearing
of this subcommittee this year.
Mr. Natsios, who is here to testify about the Administration's
fiscal year 2003 budget request for USAID's programs, came to USAID
after a successful career both inside and outside of government.
In a relatively short time, he has brought a much needed burst of
energy and enthusiasm to the Agency, and boosted morale. He has given
greater autonomy to USAID's field missions, which are widely recognized
as its greatest strength.
He also has begun to tackle some of the most difficult problems
that have plagued USAID for decades--like a cumbersome, overburdened
procurement system, and disfunctional personnel and financial
management systems.
Fixing these problems will not be easy, and the jury is still out
on your efforts. But you have our strong support.
There are other serious challenges. One we often hear about is that
proposals are brought to USAID from private organizations,
universities, individuals or others outside the Agency, including
members of Congress, which too often receive only superficial
consideration.
People seeking funding for projects are often sent back and forth
between the Washington headquarters and the field mission, only to be
told that a final decision must be made at the other location.
I have long said that USAID's greatest asset is its employees. They
are dedicated, hard working professionals. But no one has a monopoly on
good ideas, and contracts should be awarded to those with the best
projects--not those who are most adept at working the USAID system.
I am also concerned that the Administration has decided to let go
some of its most capable people in USAID's Legislative and Public
Affairs Bureau. While these were political appointees, I would feel the
same way regardless of who appointed them.
These individuals consistently acted in a non-partisan manner,
built solid relationships with both Republicans and Democrats, and were
outstanding advocates for USAID on Capitol Hill. I am sorry to say that
losing these experienced public servants may damage USAID's ability to
get what it wants from Congress.
Turning to the fiscal year 2003 budget, I have read your statement
and there is a great deal in it that I agree with. However, while you
make a convincing case for substantially greater funding for foreign
assistance, the budget request itself falls far, far short.
The $7.3 billion you request for AID's programs from the Foreign
Operations Subcommittee represents only a modest increase over the
fiscal year 2002 level. It is actually a decrease from last year if you
factor in emergency spending. This budget would appear to reduce
funding to protect child and maternal health, to combat infectious
diseases like TB and malaria, and to assist vulnerable children. That
we cannot accept.
Let me give you just one specific example. In your statement--and I
recognize I am jumping the gun a bit here before you actually testify--
you discuss your ``Africa Initiatives.'' But for education in sub-
Saharan Africa, a continent of a billion people many of whom are
illiterate, you propose $22 million. That is only 10 times the amount
we spend on education for Vermont's 100,000 students.
I have no doubt that Mr. Natsios asked OMB for additional
resources, and that USAID could put more resources to good use. I also
know there are tough choices that every Administration must make when
putting together its budget, and this year is no exception.
However, the terrorist attacks of September 11 taught us many
things. They taught about our mistaken sense of invulnerability, and
that what happens in far off places can have terrible consequences for
Americans here at home. Whether a terrorist attack in an American city,
the proliferation of weapons of mass destruction, or the ravages of
AIDS--our security is directly and indirectly linked to events and
conditions around the globe.
With the exception of the cost of deploying our Armed Forces, the
International Affairs budget is what we spend to protect our national
security outside our borders. A year ago, some might have asked what
illiteracy and unemployment in Pakistan or Afghanistan or Indonesia
have to do with America's security. Today it should be obvious. People
who are educated, who can earn money to feed their families, and
participate meaningfully in the political process, are not likely to be
training to be terrorists.
For years, organizations working on the front lines in these and
other impoverished countries, as well as Senator McConnell and myself
and a few others in Congress, have appealed for significantly more
funding to combat poverty and its many inter-related causes and
effects. This includes unchecked population growth, political and
economic instability, corruption, destruction of the environment, drug
trafficking, and terrorism. Year after year, the Congress and the
Administration failed to deliver.
The President's budget provides only $165 million for education for
the world's 2 billion poorest children. The President's budget provides
$1.3 billion for health care for the world's poorest three billion
people, barely half the amount we spend on health care for Vermont's
600,000 residents. This is simply not a credible response.
We struggle to find a few more millions to alleviate the suffering
in refugee camps, which are fertile grounds for terrorist recruits. We
argue about $5 or $10 million for micro loans to help the world's
poorest families start businesses. We rob Peter to pay Paul for a few
more millions to vaccinate against measles, which needlessly kills
900,000 children each year. Year after year, we debate about funding
for family planning and reproductive health care, which in the
Administration's budget request is less that we spent six years ago.
Despite this sorry situation, there is a ray of hope. Since
September 11, many distinguished former national security officials,
private citizens, and a broad, bipartisan cross-section of Members of
Congress, have called for a new ``Marshall Plan'' to combat world
poverty. I am very pleased that 41 Senators--Republicans and
Democrats--are on now record calling for an increase in foreign
assistance funding.
We can no longer pretend that spending one-half of 1 percent of our
$2 trillion Federal budget to improve the lives of 3 billion of the
world's poor is a serious response. Political violence and terrorism do
not occur in a vacuum. They are increasingly the result of religious
and ethnic fanaticism that flourishes in countries plagued by misery
and injustice.
Have we so soon forgotten the lessons of September 11? We are the
richest, most powerful nation in history, yet we act as though the rest
of the world barely matters to us.
We cannot put those lessons into effect without Presidential
leadership. If President Bush, today, were to ask every American to
support a tripling of our International Affairs budget, and he
explained why it is important to our national security and to combating
international terrorism, does anyone think Congress would not respond
or that the public would object? The polls show unequivocally that the
public understands these issues.
And I know that you, Mr. Natsios, understand these issues better
than just about anyone. The Congress and the Administration must work
together to dramatically increase funding for these programs--whether
through the regular budget process or supplemental appropriations. Not
next year, or the year after, but today.
We can do more. We must do more.
______
Prepared Statement of Senator Mitch McConnell
It is a pleasure to welcome you before the Foreign Operations
Subcommittee this morning, Andy. When you testified last year, you were
new to the job--but ready and willing to renew the focus and energy of
the U.S. Agency for International Development (USAID). Events of
September 11 have made this task even more imperative, and let me say
from the outset of this hearing that you continue to have my full
confidence and support.
The war on terrorism that is being waged under the leadership of
President Bush underscores the importance of programs and activities
implemented by USAID. Targeted and effective foreign assistance
programs can help undermine corruption, poverty, and ignorance--the
very elements that breed terrorism. I am pleased that the fiscal year
2003 budget request for your Agency includes increased funding for
governance, economic development, health, and education programs.
I want to make a few general comments on the $8.4 billion request
for USAID, and will do so under the program pillars that the
Administration established last year.
The request includes $1.1 billion for activities conducted by the
Bureau of Economic Growth, Agriculture, and Trade. This reflects an
overall increase of $166 million over last year's level, and includes a
$15 million increase for basic education programs. $316 million is
slated for trade and investment programs. To further President Bush's
call to volunteerism, USAID may want to consider a funding emphasis on
those organizations that successfully utilize American volunteers in
their programs, such as the International Executive Service Corps.
The budget proposes $1.4 billion for programs administered by the
Bureau of Global Health. I am pleased $500 million is included for HIV/
AIDS bilateral programs, but suspect that Congress may want to increase
this amount as we go through our deliberative process. Child survival
and maternal health programs are to receive $282 million, and I hope
that you will explain more clearly the $37 million reduction over last
year's funding level for these activities.
The request for the Bureau of Democracy, Conflict and Humanitarian
Assistance is $224 million. While I support the focus on combating
terrorism in Central and South Asia, I also strongly encourage the
Administration to continue to support long term democracy building
efforts in Southeast Asia and the Western Hemisphere. Indonesia and
Colombia, in particular, pose unique challenges that USAID must
aggressively address today. We can pay for these programs now, or we
can really pay for them later.
I want to make a few, brief comments on the struggle for democracy
in Burma. I fully concur with President Bush who stated on December 6,
2001 that Aung San Suu Kyu is ``a tireless champion for democracy and
human rights in Burma . . . [who] inspires countless people around the
world who strive peace, justice, and freedom . . . [and who] has never
wavered in her commitment to peaceful change and a process of national
reconciliation in Burma.''
It is imperative that the Administration not allow the aspirations
of the people of Burma, as expressed through the NLD's victory at the
polls in 1990, to fall by the wayside as the war on terrorism
continues. Any and all assistance--including programs that may help
stem the rapid HIV/AIDS infection rate in Burma--must be coordinated
with Suu Kyi and the NLD. We should judge progress on the dialogue
between Suu Kyi and the SPDC on concrete actions taken in the direction
of reconciliation and peace.
Let me close by expressing my appreciation and that of my staff to
the outreach efforts of USAID. Ed Fox is doing a terrific job heading
up the legislative office, and while there are many new faces, folks
like Dottie Rayburn deserve praise for keeping in close and constant
contact with the Senate.
______
Prepared Statement of Senator Tim Johnson
Mr. Chairman, I would like to thank you and Ranking Member
McConnell for organizing today's hearing with Andrew Natsios,
Administrator of the U.S. Agency for International Development. I look
forward to working with both Chairman Leahy and Senator McConnell as we
move forward with the fiscal year 2003 Foreign Operations
Appropriations Bill.
Foreign assistance is one of the most cost-effective, but least
understood, parts of the federal budget. For an investment of less that
one half of one percent of total federal spending, USAID operates field
missions in 72 countries and has programs in over 100 countries. USAID
programs promote economic development and humanitarian assistance to
some of the most desperate nations in the world, often coming to
assistance during times of national emergency or natural disaster.
Americans should be proud of the way foreign assistance dollars are
spent.
I think too often, as elected representatives, we do not do a good
enough job explaining to our constituents the importance of foreign
assistance to our own national security. While its easy to see the
benefits of having the best-trained and best-equipped military in the
world, foreign assistance also plays an important role in keeping the
American people safe.
One of USAID's primary missions is to assist developing nations by
encouraging economic development, promoting democracy, combating global
health threats, and providing necessary humanitarian assistance. While
the connection between this mission and U.S. national security is not
obvious, one need look no further than Afghanistan to see the
consequences to our security of a failed nation. By working to prevent
conflict within and between nations before they begin, we lessen the
chance we will be forced to send our sons and daughters who serve in
the military in harms way.
Beyond preventing nations from failing, our foreign assistance
budget is designed to improve the lives of people in developing nations
by helping them to create free-market democracies. Programs to enhance
access to schooling, develop agriculture, or create civil institutions
ultimately have benefits around the globe. As these nations rise out of
subsistence poverty, they create new markets for global products. For
my state of South Dakota this means new consumers for the grains and
meat produced by family farms and ranches.
I think all of us in Congress need to do a better job of telling
the successes of foreign assistance funding and explaining the benefits
of this small investment to the American people.
Mr. Chairman, I would like to take this opportunity to discuss a
couple of projects of importance to South Dakota. The fiscal year 2002
Foreign Operations Appropriations Bill included a provision giving
USAID 60 days after enactment of the bill to report back to the
Committee on the status of ceratin University Programs. As the Chairman
is aware, the deadline for this report is rapidly approaching and I
wanted to highlight for Administrator Natsios two of these important
programs.
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 the United States, 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 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 most already 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.
Both of these projects were included in the Senate Report for the
fiscal year 2002 Foreign Operations Appropriations Bill, and I look
forward to receiving the status report from USAID.
USAID plays a critical role in protecting our country's national
security while also highlighting our commitment to providing
humanitarian assistance to developing nations. I would like to thank
Administrator Natsios for his service to our country and for his long-
standing commitment to these important foreign assistance programs.
Once again, Mr. Chairman, thank you for organizing this hearing and
I look forward to working with you in the coming year.
Senator Leahy. I do not know if the Senator from Louisiana
has anything she wanted to add to this. I would recognize her.
OPENING STATEMENT OF SENATOR MARY L. LANDRIEU
Senator Landrieu. Thank you, Mr. Chairman. I really
appreciate your remarks, Mr. Chairman, and your great
leadership in this area over many, many years, and your
knowledge and passion that you bring to this subject, and I
would like to associate myself with the remarks you have made
and welcome our Administrator to work with us to try to find a
solution to this dilemma, because it truly is beneath a great
Nation, as the chairman has said, for us to allocate so little
of our resources.
Perhaps, though, there was some question before 9/11, or
some reason that reasonable people could argue about that, but
after 9/11 it occurs to me that it is really nonarguable, or
nonnegotiable, or it should be so transparent and clear, the
danger that the United States continues to put itself in if we
do not strengthen our security by not only strengthening our
military but investing in the development of nations around
this world, if not because it is the right and just and moral
thing to do, as the chairman has so eloquently pointed out, but
it is truly in our self-interest and self-preservation, and in
our short, medium and long-term security interests to do so, so
I am going to prepare and have prepared for the record more
extensive remarks along this line, but just to join with the
chairman to urge you, as the Administrator, to urge the
President to take a fresh look at the fact that our investments
to secure America's future are not just--and I support his
calls for additional military spending, but that can just be
one pillar of what we need to build in terms of a great
foundation of security for this Nation, and investing up-front
in developing nations so they can be more secure and people can
have hope in development is our best security from future wars
and times of conflict.
Let me just also add briefly that, Mr. Chairman, one way,
of course, is to try to dig a little deeper, which I agree that
we can do, and provide some hard dollars to supplement this
budget, and other ways to think more creatively about the way
we spend these dollars to leverage and to better coordinate the
tremendous generosity that is out there in the world from the
private sector, faith-based organizations, private donations.
And I would like to say to you, Mr. Administrator, after
spending some years working specifically in the area of the
institutionalization of children internationally, and adoption
and other child-specific issues, that I see a real opportunity,
Mr. Chairman, for us, as the Scripture says, to take the loaves
and fishes and to take what investments the United States
makes, instead of thinking our mission is just to give out that
money efficiently, or to think about using those few but
precious billion dollars to leverage the money that is out
there so that it can be used more effectively in the
development in the underdeveloped world, and I am going to have
some questions along that line.
But Mr. Chairman, I thank you for being able to make these
opening remarks.
Senator Leahy. Thank you very much, Senator, and I
appreciate your remarks.
Mr. Natsios, please go ahead, and we will put your full
statement in the record, but please feel free to summarize it
for us.
SUMMARY STATEMENT OF HON. ANDREW S. NATSIOS
Mr. Natsios. I certainly will do that, Mr. Chairman. Thank
you for the opportunity to testify before the committee. It is
an honor for me to be here today to talk about the President's
budget for USAID for fiscal year 2003.
Just to make a couple of initial comments, the first is,
not to quibble, but I think there is a misreading of what we
have proposed in terms of the Africa budget. We do not propose
$22 million. That is for one program within the Africa budget
on education, the EDI program, as it is called, which was
initiated by the last administration. It is a nice program. It
is not where the big focus will be, which I want to put in,
which should be in systemic reform. Our proposal for Africa for
education is $95 million.
Senator Leahy. Let me just make sure I understand. It is
$95 million. What is the population we are talking about?
Mr. Natsios. 600 million people, but many of those
countries we do not have USAID missions. Some of them are oil-
rich and actually do not need a USAID mission, so we have to be
careful which countries we are talking about.
Senator Leahy. Of the countries we are talking about, how
many people are we talking about?
Mr. Natsios. We are probably talking about 400 million.
Senator Leahy. So $95 million. I just want to make sure I
have the numbers right. $95 million for those 400 million. In
my little State, which is not a wealthy State by any means, we
spend $2.2 billion for 100,000 students. Okay, I understand
your answer.
Mr. Natsios. Let me just sort of--Zimbabwe has a 92-percent
literacy rate. The USAID program in Zimbabwe, even if there was
no political instability, would not include an education
component because they have a very functional education system
there already. Botswana has over 90-percent literacy, and a
very good educational system, and so I think there are issues
in education in some countries. Mozambique has a very low
literacy rate. We have done work in that country on education.
The perception that all countries are the same I know you
know, Senator, is not true. Some countries are very advanced in
some areas.
Senator Leahy. Angola is oil-rich, but it is one of the
poorest nations on Earth.
Mr. Natsios. It is, because it has not used its oil wealth
for whatever, because of their security problems.
Senator Leahy. And there are some countries, especially
during the cold war, that we supported with large amounts of
foreign aid even as they stole money from their people and
deposited it into Swiss bank accounts.
Mr. Natsios. Let me just sort of correct that one point,
but in terms of the point that Senator Landrieu just made with
respect to private funding, I would like to begin with that,
because one of the four pillars of USAID work, and I use that
because we actually have four pillars of USAID's work since I
became administrator under the President's and the Secretary's
leadership, and one of them, the first pillar is called the
Global Development Alliance, and it is an attempt to harness in
partnerships with the private sector this enormous shift in
resources to the developing world.
In 1970, 70 percent of all the capital flows to the
developing world came from official development assistance, in
other words, from foreign aid from northern countries, 70
percent. 30 percent came from private sources. Last year, 80
percent of the capital flows, which are also much higher in
terms of total volume, 80 percent came from the private sector
and 20 percent came from the public sector.
Now, where does that 80 percent come from? It comes from
$30 billion in remittances. We're finding people do not just
send remittances back to their relatives in the developing
countries just for television sets and houses. They build
schools, and we are having discussions now with some very
interesting diaspora groupings within the United States about
the possibility of linking up with some of these groups to see
if we could not add some of our money in with the remittances
they are sending back to their village to do some of the
development work. It is in the inception stage, but we are
talking about it.
Bill Gates spends as much on international health in the
developing world from his Gates Foundation than any northern
country in the world. It is a huge amount of money. His Gates
Foundation has a $23 billion endowment.
Universities spend private money, not public money, and
NGO's, the NGO I worked for has private income of $1 billion a
year now from all of its northern fundraising offices, $1
billion in private money now, and we have not adequately in
USAID yet done a good job in linking up private foundation
money, university private money, NGO private money, capital
money from the capital markets, and USAID funding, and one of
our efforts now is to do that. It is called the Global
Development Alliance, and Secretary Powell mentioned this in
his testimony a year ago.
We now have over 60 proposals before us, very, very
interesting and innovative proposals to try to do what you have
suggested, Senator, which I have to say we think alike, because
that is something that we need to focus our attention on. It is
one of the four pillars.
Our budget proposal calls for us to manage $8.47 billion in
fiscal 2003. This includes $2.4 billion for development
assistance, including child survival and health program, $235
million for international disaster assistance, $55 million for
transition initiatives, $586 million for operating expenses,
and $95 million for the capital investment fund.
It also calls for $2.29 billion in ESF funding, the
economic support fund, $495 million for assistance for Eastern
Europe and the Baltics, and $755 million for assistance to the
Independent States of the former Soviet Union, which are
programs we co-manage with the State Department.
We have proposed a very large increase, even though it is
not before this committee, in the title II Public Law 480 Food
for Peace program. It is a $335 million increase for a total of
$1.185 billion in title II for the next fiscal year.
All told, in the resources we are managing we have an 8-
percent increase in our spending. Now, that is not enormous,
but it is much more than most Federal departments are getting,
and it is actually very healthy compared to what these accounts
have shown in the last 12 years. The Africa budget has actually
been either level-funded, or there has actually been cuts in
the Africa budget.
I am an Africanist, and the Secretary has a very deep
interest in Africa, as does the President, and we made the
decision to increase over a 2-year period spending in Africa by
22 percent, and so the budget for the first time in history
will exceed $1 billion in 2003 for Africa, so there is a
renewed commitment to do work in Africa. Half of that is for
the HIV/AIDS pandemic, but the other half is in trade capacity-
building and an anticorruption program that we are going to be
running with African countries, and most importantly in
education and in agriculture, which is one of our major new
focuses.
Secretary Powell earlier this month----
Senator Leahy. If I could interrupt there, because I notice
some of your figures, I just want to make sure I understand the
money for AIDS last year. The administration requested $369
million for the HIV/AIDS program. The Congress, let me repeat
that. The Congress increased it to $475 million. I mention that
because I have heard comments from various people in the
administration implying that the administration was the driving
force behind reaching the amount of $475 million. I am
delighted we provided $475 million, but we had to bring some in
the administration kicking and screaming to it. In fact, the
administration worked against funding for HIV/AIDS by drumming
up support for an amendment that could have taken HIV/AIDS
funding and transferred in to our program for interdiction in
Colombia.
And the administration also had a global fund request of
$200 million, and we increased that to $250 million. I point
this out because we had to really push and fight, and really
had to fight against the administration's lobbyists to increase
funding by $156 million for the various AIDS programs. I am
pleased that the administration now thinks that was a good
idea, and I mentioned it because I want you to know we will
continue to work to make sure that these levels are further
increased next year.
Mr. Natsios. Well, Senator, I might add----
Senator Leahy. I know I am preaching to the converted with
you, Mr. Natsios, and I do not mean this in any way a criticism
of you. We all know that you have to deal with OMB, but I just
want you to know that we are here to help.
Mr. Natsios. I appreciate that, but let me make some
comments about HIV/AIDS, because I think there has been a lot
of public discussion, some of which is not complete in terms of
understanding what we have been doing. The amount the
administration asked for for fiscal 2003 is $155 million more
than what Congress gave us in 2002, so we have asked for a
substantial increase over what was given to us by the Congress,
so we were not dragged kicking and screaming. We did this
because we believe it is one of the most serious challenges in
Africa.
It is the reason that the Secretary's first trip abroad--I
am sorry, one of his early trips abroad was to Africa. I went
with him on that trip, and it was to highlight the issue of
spending on HIV/AIDS.
Senator Leahy. We understand, but didn't we end up cutting
other international health programs like malaria and TB and
those to pay for this?
Mr. Natsios. There were several cuts in other accounts.
Senator Leahy. Well, seriously, what does that do for us? I
mean, we don't make much progress if we cut critical programs
to combat malaria, TB, and other infectious diseases because we
have to do more for HIV/AIDS. Why don't we do both? We do not
say we can only send one B-52 over Afghanistan to bomb Torah
Bora if we really need two, three, or four to do the job. I
mean just like military operations, global health is a critical
national security issue.
Mr. Natsios. The international AIDS account, Senator, the
whole health account is up over what you gave us for this year.
It is up $60 million.
Senator Leahy. Does it cut malaria?
Mr. Natsios. We have shifted money from some of those
accounts into the AIDS account, but I might add these accounts
are not run separately in the field. Our health programs are
integrated programs in the field. The trust fund that is being
managed internationally is a trust fund for HIV/AIDS, malaria,
and TB, so it really is not quite accurate to say we have cut
those accounts in terms of the actual spending in the field,
because the trust fund is for all three diseases, not just for
one.
We made a decision we wanted to put more money into the
trust fund. We shifted money out of the malaria account and the
TB account and the HIV account and put it into the trust fund,
but the aggregate amount we are putting into health is up $60
million in 2003 from what you gave us in 2002.
Senator Leahy. And if we had kept the money, the amounts
that were there for TB, malaria, and so on----
Mr. Natsios. It is being kept, Senator. It is being put in
an international fund for the same purpose.
Senator Leahy. Then why is it that the global fund for
example is $250 million in fiscal year 2002, but it is $200
million in your request in fiscal year 2003?
Mr. Natsios. The total amount for the trust fund, as I
understand it, is $500 million. It is $500 million between the
2 years into the trust fund, and so we have proposed what we
did this year, plus what we did----
Senator Leahy. But it was $250 million last year, $200
million this year, no?
Mr. Natsios. No, it is $500 million total.
Senator Leahy. Is that actual money, or just authority?
Mr. Natsios. No, it is actual money. It is cash.
Senator Leahy. So you are saying the $250 million that we
gave last year would be at least $250 million, your request is
$250 million again this year?
Mr. Natsios. The amount last year----
Senator Leahy. You have people shaking their head no behind
you.
Mr. Natsios. It is $50 million--I am sorry, $50 million of
the money we shifted this year is from 2001, $200 million is
from this year's appropriation, and then there is $250 million
for next year.
Now, it is not all from USAID. $100 million is in the HHS
account, but is still going to the trust fund, so I am not
suggesting we are putting all the money in. Part of the money
is in the HHS budget. That is going to be transferred to us,
then we will send one check for the U.S. Government's
contribution to the global trust fund. All of the account money
for that trust fund does not come out of USAID's budget, it
comes out of two budgets, HHS and ours. That is perhaps the
source of the confusion.
Since I have just discussed HIV/AIDS, let me go on to the
total amount--let me go back to this now. The total amount we
are spending in 2003 between CDC, HHS, the global trust fund,
NIH research for third world HIV/AIDS issues, and our spending,
total amount spending for third world HIV/AIDS is $1.185
billion, almost $1.2 billion in the 2003 budget. It is an
enormous commitment, larger than any country in the world, and
I might add----
Senator Leahy. Could you please break that figure down. I
want to be sure I fully understand it. Remember, I am just a
lawyer from a small town in Vermont, so I do not understand the
way you guys work with these numbers all the time.
Mr. Natsios. Well, I am a former legislator from a small
town in Massachusetts.
Senator Leahy. Well, we like you people from the southern
States.
Let me ask you, so where does that $1.1 billion come from?
Mr. Natsios. It is $1.187 billion. It comes from
fundamentally two sources. It is our budget and the HHS budget.
The HHS budget is broken down between the National Institute of
Health and CDC. CDC has programs in the field. We have worked
with them in many, many countries in the developing world, on
the HIV/AIDS pandemic.
Senator Leahy. And HHS is on a program designed for the
developing world?
Mr. Natsios. Yes. This is only money for the developing
world. This is not for domestic AIDS work, and it is a sizeable
commitment, and there is an issue when we scale up in any major
crises or focus of the capacity to spend this money. We think
we can spend this money, or we would not be proposing it.
Senator Leahy. I grant you that. There were a lot of the
mistakes in past years in the way in which we managed foreign
aid. We threw good money after bad, especially to dictators who
did little more than declare that they were anti-communist.
But the magnitude of the HIV/AIDS problem is so large that
while we cannot do it all ourselves we have to do a great deal
more. You have nations that could disappear, literally
disappear in Africa, in large part due to HIV/AIDS. And, that
is precisely why funding for HIV/AIDS programs is so important.
But go ahead.
Mr. Natsios. In fact, there are 10 African countries that
within 5 years will have either negative population growth
rates or no population growth, and it is because such a large
portion of the population has the disease, the infection. It is
horrendous in a number of countries in Africa.
And the two fastest-growing countries where the infection
is growing even though the base is smaller is Russia and India.
Russia is primarily among intravenous drug-users, and we are
finding it in the populations of India in the urban areas. It
is very disturbing, and we are seeing big rates of increase, we
think, we do not know for sure, in Burma.
Senator Leahy. China, also.
Mr. Natsios. Yes.
The second area of focus in this budget for us is in trade
and investment. AGOA is a joint party--I think conservatives,
liberals support it, the administration has been a strong
supporter of AGOA too, which is a trade and investment act that
reduces trade barriers in African countries. The Secretary is
very strong in this, the President is, Bob Zoellick and I have
had extensive conversations how we can work together.
While it is not my job to negotiate tariff agreements or
general trade agreements, it is our job to do the work to
prepare countries in the developing world to take advantages of
the improved trading climate when there have been, particularly
in Latin America and Africa, these trade initiatives.
We spend actually I think 60 percent of the total amount
spent by the U.S. Government in trade capacity-building. What
does that mean? The phytosanitary code of the northern
countries can be an impediment to the export of agricultural
produce. If they do not understand these regulations, even
though there are no trade barriers at all, they cannot export
to the northern countries.
If they are producing the wrong kinds of foods, for
example, that is their primary export, they do not have
markets, and so we do a lot of work to show them what the
markets are where they have a particular value added. We do a
lot of training of trade ministries, finance ministries, we
work with them on things such as regional trade barriers that
may impede trade among countries in a particular region.
And so we have asked for an increase in that, particularly
in Africa, for that trade capacity-building.
The third area that we are focusing on is the area of
education. The education budget when I started was $102
million. We proposed $165 million for fiscal 2003. Now, the two
areas that USAID suffered the most in the 1990's was both in
education and agriculture. In education, we only have five
education officers left in USAID. The rest were laid off in the
mid-nineties, in the RIF's that took place, and there have been
no substitute officers, in other words, officers hired to take
their place.
We had in 1986, 1987, 248 agricultural scientists, or
agricultural economists, in USAID. When I started 8 months ago
we had 42 left, massive reduction in our competence in
agriculture. We hired six since. We propose some increases in
the agriculture budget, which is probably my first priority,
because as you can see, if you look at the studies, the best
way of reducing poverty in the developing world is through
agriculture, so education and agriculture are two of our major
initiatives in this budget.
We also have a new initiative in terms of conflict
prevention and conflict mitigation. We put $50 million in this
budget that will be used in countries that our assessments show
could be in conflicts at some point in the near future. We did
a study when I first arrived at USAID of how many countries
that have USAID missions, and there are formal missions in 75
countries, another 15 countries we have a presence in but not a
full mission, and two-thirds of those countries have had
conflicts at some point, either full-scale civil wars or
regionalized conflicts within the last 5 years.
I have had some people say, well, why are you worrying
about that? You cannot run a long-term development program in
the middle of a civil war unless you factor in the civil war
and how it affects your development program, and so we have a
whole new initiative on that. We developed a really very useful
and very interesting analytical tool for use in countries to
determine if the mission director and the ambassador think
things are deteriorating, whether there is a likelihood of a
major conflict taking place, and it is almost complete. We will
be training our staffs in the field, and it will be used to
produce the kinds of assessments we use now in health to tell
us whether an epidemic is taking place, or in food security to
see if there is a hunger problem.
In terms of regional initiatives, we are focusing on the
stabilization of the front-line States in Central and South
Asia. I have been to Afghanistan now twice. We have reopened
our mission there after being gone for 23 years. We have opened
a new mission, USAID mission in Pakistan after being gone for
almost a decade.
The second regional focus is in Africa, as I mentioned
earlier. We are facing several major challenges there. The
first is in agriculture. About 73 percent of the world's
malnourished people will be in Africa by the year 2015 if
present trends continue. The two areas where we are failing in
the hunger battle are in South Asia and Africa, and the only
way to deal with this--not the only way, the most important way
to deal with this is through agriculture.
Why is that? 75 percent of the poor people in the world
live in rural areas, and they are either farmers, or they are
herders, or they are in a supplemental trade that is dependent
on farming, and unless we focus on agriculture in the rural
areas, we will fail.
Now, there is a lot of interest groups in the city that are
focused sectorally and we do not have, until recently, a
coalition behind more spending in agriculture. We did put more,
$30 million more into the budget for the current fiscal year.
We put another $60 million in for the next fiscal year for a
total of $90 million over 2 years. That is not enough in my
view, but it is a beginning, and we have revived the
agriculture sector.
PREPARED STATEMENT
Emmy Simmons will have her hearing before the Senate
Foreign Relations Committee--she is a career Foreign Service
Officer--to be the new Assistant Administrator, should the
Senate confirm her, of the new Bureau of Economic Growth,
Agriculture, and Trade. She is an agricultural economist, and
in fact our senior agricultural economist at USAID.
[The statement follows:]
Prepared Statement of Hon. Andrew S. Natsios
Chairman Leahy, Senator McConnell, members of the subcommittee: It
is an honor to be here today to discuss the President's budget for the
U.S. Agency for International Development for fiscal year 2003.
Our budget proposal calls for us to manage $8.47 billion in fiscal
year 2003. This includes $2.74 billion for Development Assistance,
including child survival and health programs; $235 million in
International Disaster Assistance; $55 million for Transition
Initiatives; $586 million in Operating Expenses; and $95 million in the
Capital Investment Fund.
The budget also calls for $2.29 billion in Economic Support Funds;
$495 million for Assistance for Eastern Europe and the Baltics; and
$755 million for Assistance for the Independent States of the Former
Soviet Union. We co-manage these funds with the State Department.
In addition, the budget calls for USAID to manage $1.185 billion in
PL 480 Title II Funds.
In a speech at the World Bank last July, President Bush cited three
great goals necessary to build a better world:
--First, ``America and her friends and allies must pursue policies to
keep the peace and promote prosperity.''
--Second, we must ``ignite a new era of global economic growth
through a world trading system that is dramatically more open
and more free.''
--And third we need ``to work in true partnership with developing
countries to remove huge obstacles to development; to help them
fight illiteracy, disease, unsustainable debt.''
The tragic events of September 11 and the ensuing war on terrorism
have obviously had an impact on our plans and budget. This is only
natural. We have fully supported the President's efforts in Afghanistan
and the surrounding region. For example, we have led the international
community by providing considerably more emergency food supplies to the
Afghan people than any other nation. And now that the worst of the
fighting has ended, we are starting to help the country rebuild its
agriculture, schools, communities and institutions.
Despite these events, our basic mission has not changed, and we
continue to look to the President's three goals for guidance.
If anything, the events since September 11 have reinforced the need
for a vigorous, innovative, cost-effective approach to foreign
assistance and international development. This is the best way that
USAID can serve our nation's interests, fight the foes of freedom, and
address the many problems of poverty, disease, corruption, and weak or
dictatorial government.
As Secretary Powell said earlier this month, ``over the past year .
. . the broader tapestry of our foreign policy has become clear: to
encourage the spread of democracy and market economies and to bring
more nations to the understanding that the power of the individual is
the power that counts.''
Even before September 11, the forces of globalism and its many
manifestations, both good and bad, had caused USAID to refocus its
programs and priorities. As a result, we are reforming our management
practices and putting new emphasis on encouraging trade and free
markets, improving agricultural practices, managing conflict, fighting
corruption and illiteracy, promoting education, and stemming the spread
of HIV/AIDS and other infectious diseases.
At the same time, we continue to maintain a strong focus on:
--Fighting hunger and poverty through agricultural development;
--Promoting democracy, good governance, and the rule of law;
--Improving health, particularly for women and children;
--Responding quickly to international disasters and delivering
humanitarian assistance; and
--Promoting sustainable management of the world's natural resources.
We are also encouraging market-oriented policies in Eastern Europe,
helping African nations join the World Trade Organization, financing
job creation in rural Central America to help stem illegal immigration
to the United States, and funding research that will increase food
production in Africa.
To build a strong foundation for sustained economic growth,
developing countries need peace and security, good governance, and
educated, healthy workers. Where these conditions exist, countries like
Thailand and many in Latin America and Central and Eastern Europe have
made substantial progress, and we are proud of having helped them.
Other countries--from Jordan and Morocco to Mozambique and the
countries of Central America and the Caribbean--are emerging from the
problems of their past. While each case is different, we intend to
provide sustained support for countries where progress is possible,
nurturing our relationships and monitoring our programs for
effectiveness.
Unfortunately, there is a third category of countries, where there
is little we can do until their governments change their policies and
practices. Until then, our programs with them will be limited to
emergency humanitarian or transition assistance.
Our budget request for fiscal year 2003 addresses each of these
fundamental issues of development in considerable detail. For the
purposes of this discussion, let me highlight a few of our most
important priorities.
Fighting HIV/AIDS.--The HIV/AIDS pandemic is devastating much of
Africa, particularly in the south. In some countries, more than 30
percent of the population is infected. As the disease affects young
adults in particular, countries are losing their most educated and
skilled workers. Business, government, and agriculture have all been
hurt. Millions of children have lost their parents, and millions more
will probably do so, if present trends continue. As the pandemic grows
and spreads, the economic, social and political consequences are almost
beyond reckoning.
HIV/AIDS is already escalating dramatically elsewhere, particularly
among prostitutes and intravenous drug users. Russia and India, to name
to of the more worrisome cases, have both seen alarming increases in
prevalence in just the past two years.
In response to these challenges, USAID's budget for bilateral HIV/
AIDS has increased dramatically since fiscal year 1999. We hope to
build on this, increasing our funding from $435 million in fiscal year
2002 to $540 million in fiscal year 2003. With these resources, we are
now able to increase the number of our HIV/AIDS priority countries from
17 to 23, expand our regional programs to focus on ``hot spots,''
improve our monitoring and reporting system, create a central Condom
Fund and allocate more program money directly to the field, where it
matters most. Overall, USAID will work in approximately 50 countries.
USAID is the lead agency in the U.S. Government's international
fight against HIV/AIDS. When our resources are combined with the
international health programs supported by the National Institutes of
Health and the Centers for Disease Control and Prevention, our overall
government funding for HIV/AIDS will be over $1.1 billion for fiscal
year 2003.
Promoting Trade and Investment.--The growth of international trade
and investment has produced great gains in income and employment over
the past generation. Many developing countries, however, have not
capitalized on this, and few have seen tangible benefits from the era
of global commerce. Capital flows freely in this global era, but it
will only do so when the proper business environment is present. For
this reason, USAID is increasingly focussing on improving countries'
ability to participate in the international trading system and helping
them reform their commercial laws and practices so that they can
attract domestic and international investment.
For fiscal year 2003, we intend to build on these programs, improve
local business environments, train farmers, government and business
leaders, and continue our highly successful microenterprise programs.
Supporting Education and Attacking Illiteracy.--Basic education
provides children and young adults the skills they need to help
themselves, their families and their communities. Despite the clear
importance of education to development, over 110 million primary-
school-age children in developing countries remain out of school. More
than 60 percent of them are girls.
Our budget request includes a substantial increase in funding for
basic education programs, from $102 million in Development Assistance
in fiscal year 2001 to $165 million in fiscal year 2003. This reflects
our commitment to education and builds on the significant increase in
international education funding that Congress voted for fiscal year
2002. The new request will help fund our new Centers for Excellence
teacher training programs in the Caribbean, launch an important new
multi-year basic education program in Pakistan, and start rebuilding
Afghanistan's shattered school system, among many other things.
Incidentally, school starts in Afghanistan next month, schools
where the Taliban had prevented girls from attending and women from
teaching. That has changed, and I am proud that one of USAID's quick
impact programs is supplying almost 10 million textbooks--a country-
wide curriculum for grades 1-12--to help the country's schools get
started.
Mitigating Conflict.--Corruption, religious and ethnic extremism
and irresponsible governments have combined to make the past decade one
of the bloodiest in memory. Clearly, it is in no nation's interest to
see this trend continue.
Wherever the United States has been involved militarily in recent
years, USAID has played a major role in the rebuilding and
reconciliation process. This is never an easy task. Infrastructure can
be rebuilt, but people are another matter. It takes time for the wounds
of war to heal. Some institutions need to be rebuilt; others must be
started up from scratch. There are immense issues of justice that must
eventually be faced, but in the meantime, people must eat and work and
learn to live with one another.
We have learned some important lessons in this field. One of them
is the need to coordinate our humanitarian programs more closely with
military programs, so that when the fighting ends, we can move more
effectively from humanitarian relief to rule of law, democracy, and
economic growth projects. Under our new conflict management initiative,
approximately $50 million in fiscal year 2003 funds will be devoted to
putting this new strategy into effect and fulfilling our other conflict
management initiatives. Ultimately, we want to focus our assistance to
problem countries more effectively so that their capacity for self-
government and peaceful conflict resolution are strengthened.
regional initiatives
Stabilizing Front Line States of Central and South Asia.--Even
before September 11th, a broad consensus had emerged that U.S. re-
engagement in South Asia was necessary to improve the region's social
and economic conditions, and reduce the risk of regional and global
instability. This process is now well under way.
Last month, I visited Afghanistan again, where I was proud to
announce that USAID is reopening the mission we were forced to close in
1979. This follows directly on Secretary Powell's announcement that we
are reopening our mission in Pakistan, which had been closed for nearly
a decade.
These two missions will play a major role in our efforts to the
respond to pressing needs of the Afghan and Pakistani people. As
elsewhere in South Asia, our focus will be on basic education, health,
agriculture, rural development, and good governance programs. And we
will continue to give special emphasis to improving the status of
women.
We have been present in the Central Asian Republics since shortly
after the collapse of the Soviet Union. But clearly, the events of the
past few months suggest that our relations with those nations are in
the process of changing. USAID's budget request reflects this, and we
are asking, therefore, for increased funding for our infectious
disease, conflict mitigation, economic reform, and democracy programs.
African Initiatives.--USAID is requesting increases in funding to
pursue four African initiatives in fiscal year 2003. Each will expand
upon programs managed by our field missions.
--The first is in agriculture. A large percentage of Africa's
population depends on agriculture and livestock for their
livelihood. And yet one-third of the people go to bed hungry.
Given the impact of HIV/AIDS on agriculture in certain regions,
the situation may well get worse. Indeed, it is estimated that
by 2015, Africa will account for 73 percent of the world's
undernourished, if present trends continue.
But there is hope. Research suggests that investments in
agriculture have a stronger impact on poverty than in any other sector.
Consequently, we are asking for an additional $27 million this coming
fiscal year, of which $20 million will be devoted to cutting hunger in
half by the year 2015. This will be done in conjunction with the
Partnership to Cut Hunger and Poverty in Africa. This initiative will
target seven to nine countries where we can have the most impact and
concentrate our initial efforts on training and new technology.
--Our second African initiative is in trade, where we are asking for
$15 million in the coming fiscal year to help African countries
take full advantage of the African Growth and Opportunity Act
(AGOA). This means helping businesses export and understand the
global trading system and encouraging governments to revise
their commercial laws and policies.
--Our third African initiative is in education, where we are asking
for $22 million for fiscal year 2003. This initiative has four
components: providing scholarships so that children, especially
girls, can attend school; helping schools use information and
communications technology; training new teachers, in part to
compensate for those who have contracted HIV/AIDS; and helping
communities establish and maintain their own schools, when the
government is no position to help. This latter policy, by the
way, has proven highly successful in countries like Mali.
--And fourth is our African anti-corruption initiative for which we
are asking $7.5 million in the coming fiscal year. Our
objective here is to improve transparency and accountability
and thereby help overcome the endemic corruption that
contributes to instability and holds back economic progress in
the region.
Central America.--Given the importance of Mexico and Central
America to our economy and the well-being of our hemisphere, we are
planning a new initiative for Mexico and Central America in fiscal year
2003 that we call the Partnership for Prosperity. This is a new kind of
initiative, one that seeks to create alliances between our own border
states and the countries of the region and that works in conjunction
with the American Hispanic community, businesses, international
financial institutions and foundations.
This initiative will serve several purposes, in addition to
building an alliance whose resources and capabilities go far beyond any
single organization. One of the most important is to build upon the
excellent relations between Presidents Bush and Fox and engage the
Mexican government on trade, environment, health, safety and
immigration issues. The initiative also seeks to further the Summit of
the Americas' goals in democracy, development, and trade. Among the
issues this $30 million initiative will focus on directly are illegal
immigration, the severe decline in coffee prices, the drought that is
affecting many parts of the region, and the growing incidence of
malnutrition there.
Andean Regional Initiative.--Now in its second year, the Andean
Regional Initiative (ARI) is a 7-country regional initiative that is,
in some ways, the successor of Plan Colombia. While Colombia remains
the most important aspect of the ARI, the country's direct neighbors--
Bolivia, Brazil, Ecuador, Panama, Peru and Venezuela--are included in
it, too. For fiscal year 2003, the USAID-administered portion of the
ARI request from all accounts will total $428 million, $151 million of
which is destined for Colombia.
While the fight against narcotics trafficking is the central focus
of the ARI, each country has different needs and thus a different
program mix. In Colombia, for example, our economic growth and
infrastructure projects are designed to encourage people to stop
growing drugs and find decent alternatives. We are also devoting
considerable resources to rule of law and human rights programs as well
supporting many who have been displaced by the fighting and
instability.
changing to meet the challenge--management and organization
Helping people amidst the considerable complexity of the developing
world requires a transparent, agile, and skillful organization, and one
that has adequate safeguards for employees, many of whom work in
difficult if not dangerous circumstances.
But we are also focused on performance and we are working to
improve in every aspect of our work. To this purpose, I have made
performance-based management a fundamental priority of our agency, for
we recognize our obligations to the Administration, the Congress and
the taxpayers to spend our money wisely.
Reforming USAID's business systems is one of the most important
keys to improving our performance. For that reason, we have established
a Business Transformation Executive Committee (BTEC), based on best
commercial management practices, to oversee our management initiatives
and investments. The BTEC is chaired by USAID's Deputy Administrator
and comprised of senior executives from each of our bureaus. Its goal
is to set an aggressive pace in developing plans to overhaul and
modernize the agency's core business systems.
In the area of Financial Management, USAID plans to enhance the
core accounting system, installed last year in Washington, to provide
more accurate and timely financial information, and improve
accountability and regulatory compliance. In fiscal year 2001, we were
able for the first time in five years to produce an audited financial
statement. Our work in fiscal year 2003 will build on this and support
expansion of our accounting system overseas.
In Human Resources Management, we will expand the agency's talent
pool by increasing the recruitment of junior-level Foreign Service
professionals and focusing on key skill areas in the Civil Service,
such as procurement and information technology. We will also use
recruitment and retention incentives to increase and stabilize on-board
staff levels.
In Information Technology, we will improve our systems security in
order to reduce the likelihood of unauthorized access. Upgrades in IT
software and hardware will support the expansion of the Phoenix
Accounting System overseas and ensure that the benefits of e-government
reach all parts of the agency.
In procurement, in addition to the new, automated contract writing
system we implemented last year, we are preparing a competition plan to
facilitate outsourcing of selected functions currently carried out by
USAID staff. Procurement training for both USAID employees and partner
organizations will be expanded to improve the quality and consistency
of our procurements.
In Strategic Budgeting, we have consolidated the budgeting function
into the Policy and Program Coordination Bureau to link resources more
closely with policy priorities.
In the area of performance measurement and reporting, we are
streamlining, simplifying, and improving our annual reporting process
beginning with our field missions and operating units through to our
Agency-level reporting. The result will be an improved ability to
collect and report on performance and relate it to budget requests and
future allocations.
Agency Reorganization.--As part of the management reforms that I
discussed at length with this Subcommittee last May, we have
reorganized our internal structure, creating three technical pillar
bureaus. These are:
--The Bureau for Economic Growth, Agriculture and Trade allows us to
concentrate our programs on the economic issues of
globalization, trade capacity building, and agriculture. The
bureau also has central responsibility for our environmental
protection, women in development, and education programs.
--The Bureau for Global Health gives greater focus to evolving health
issues, especially HIV/AIDS and other infectious diseases. This
bureau will be our technical leader for all of our traditional
health, nutrition and family planning programs including those
that address maternal and child health and infectious diseases.
--The Bureau for Democracy, Conflict and Humanitarian Assistance
allows us to maintain our focus on democracy, while tightening
the links between these related issues, as the number of
collapsed states, violent internal conflicts and complex
humanitarian emergencies grows. Our current conflict prevention
task force, which leads the conflict prevention, management and
resolution initiative announced last year, will be folded into
this bureau later this year.
At the same time, we have also initiated a new business model,
called the Global Development Alliance (GDA). When USAID was founded 40
years ago, Official Development Assistance (ODA) comprised 70 percent
of all U.S. financial flows (foundation grants, university programs,
diaspora remittances, and private capital) to developing countries.
Today, they comprise 20 percent. This means that we have had to change,
as well. With the formation of the GDA last year, we have now begun
that process.
The GDA should improve our effectiveness, through better and
increased collaboration with private sector, government, and non-
governmental organization (NGO) partners. It signals a new era of
cooperation where we work together to get projects accomplished on a
larger scale than USAID could do with only its own resources.
You will note that this budget requests a streamlining and
simplification of the rather complex 150 account. This merges
Development Assistance with Child Survival and Health into one unified
account. Let me emphasize that this does not imply any decrease in
interest or funding for our global health programs. Indeed, we will
continue to report on our Child Survival and Health programs as part of
our Global Health pillar.
In conclusion, Mr. Chairman, I would like to assure the Congress
that USAID's budget request for fiscal year 2003 rests on a solid
foundation of professional analysis and a strong commitment to
performance and management reform. We know it is impossible to satisfy
everyone who looks to us or to address every problem that arises. We
have spent many hours trying to determine the best use for our
resources and have had to make many painful choices. I hope my remarks
today have been helpful in explaining our priorities.
Thank you.
Senator Leahy. Well, let me ask you this, and then we will
go to the other Senators for their questions. It is interesting
how life has changed around here since September 11. It used to
be a time, I know when I first came to the Senate the big thing
was to go home and go to the Rotary Club and the Chamber of
Commerce and all and say, I am not going to send any of your
tax dollars overseas because, after all, what do those people
do for us. Now there is far more of a realization that it is an
interdependent world, and we have to be involved. We have to be
involved in foreign aid doing something more than just selling
our products abroad through export assistance.
I have a letter where 30 Senators, Republicans and
Democrats, called on the chairman of the Budget Committee to
increase spending on foreign affairs programs. I will put that
letter in the record.
[The letter follows:]
U.S. Senate,
Washington, DC, February 14, 2002.
Hon. Kent Conrad,
Chairman, Senate Budget Committee,
Washington, DC.
Dear Mr. Chairman: As you begin work on the Fiscal Year 2003
Budget, we urge you to support significantly increased foreign affairs
funding as a necessary and effective tool to promote U.S. national
security interests around the globe. Given the new realities of the
post-September 11 world, we strongly believe that combating poverty and
promoting democratic government are both vital strategic objectives and
moral imperatives for the United States.
For decades, foreign affairs programs have advanced U.S. national
security interests by strengthening democratic institutions and market
economies. Nevertheless, at a time when those interests are most
threatened, our foreign affairs budget is barely 0.1 percent of GDP and
less than one percent of the overall budget--with development
assistance less than half of that. These percentages place the United
States last among G-7 countries.
Today, a third of the world's people barely survive on $2 per day.
Just as we must have adequate resources to preempt and respond to
terrorist attacks, so too must we address the conditions that foster
terrorism: widespread illiteracy, hunger and disease, and the lack of
access to democratic institutions. An increase in the foreign affairs
budget, with a focus on programs to combat poverty and strengthen
democracy, will help save lives and provide economic opportunities
through improvements in education, health, shelter and food security.
It will also provide the United States with reliable partners committed
to combating international terrorism, narcotics trafficking, and the
spread of weapons of mass destruction.
In the wake of the September 11 attacks, we have a unique
opportunity to rededicate ourselves to the cause of promoting peace and
stability abroad, building respect for America and our values, and
protecting vital U.S. national security interests. We must not let our
foreign affairs budget continue to fall short of what is needed.
Moreover, we believe that there are sufficient resources within the
$2.13 trillion budget submitted by the President to support
significantly increased amounts for foreign affairs funding.
We appreciate your attention to this request and we look forward to
working with you.
Very respectfully yours,
Dianne Feinstein; Mike DeWine; Patrick J. Leahy;
Lincoln D. Chafee; Christopher J. Dodd;
Daniel K. Inouye; Mary L. Landrieu; Arlen
Specter; Jeff Bingaman; Bob Graham; Richard
G. Lugar; Joseph I. Lieberman; Gordon
Smith; John F. Kerry; Robert G. Torricelli;
Paul Wellstone; Daniel K. Akaka; Barbara
Boxer; Russell D. Feingold; James M.
Jeffords; Herb Kohl; Richard J. Durbin;
Maria Cantwell; Debbie Stabenow; Harry
Reid; Jon S. Corzine; Patty Murray, Barbara
A. Mikulski; Edward M. Kennedy; and Susan
M. Collins.
Senator Leahy. Britain and key United States allies have
been pushing the industrialized nations to increase spending on
foreign aid. In testimony before the Senate Budget Committee,
Secretary Powell stated the idea of tripling foreign aid is not
a bad idea. I agree. I cosponsored a resolution by Senators
Feinstein and Gordon Smith, and others, to triple it. Given the
Secretary's comments and the support in Congress why doesn't
the administration do that? Does the administration have any
plan to request additional foreign aid funding in a
supplemental this year? Could USAID spend more? Could you
effectively spend it?
Secretary Powell seems to think that the State Department
could. If the administration asked for more money, could you
handle it?
Mr. Natsios. Yes. Is that a clear answer, Senator?
Senator Leahy. It is. Is the administration going to ask
for more money?
Mr. Natsios. Senator, I am very optimistic about that, but
it is not my job to announce supplemental budgets, and so I
just want to say I am optimistic, I am smiling now, I am in a
good mood, especially after what has happened in the last 2
weeks, but it is not my job to be announcing anything. I
suggest we wait to see what OMB and the President proposed, and
what the Congress disposes to do, and then I will spend the
money that I get, happily.
And let me just add one thing, Senator, the accounts that
the money goes into has a profound effect on what we do or do
not do. There is not a huge--and I want to keep saying this,
but the problem is, we do not always get the money in the
accounts that the mission directors and the countries tell us
they need the money in. If you ask most leaders, prime
ministers, presidents, finance ministers, trade ministers,
forget the agriculture ministers, in Africa, and you ask them
what they want more money in, more than anything else, they
will say, agriculture. Almost everyone, to a person, will tell
you that privately, they will say it publicly.
If you ask the Afghans--I asked Chairman Karzai--he has
become a friend of mine. I spent a number of hours with him in
Kabul. I traveled back on his plane to the United States, when
he appeared before you for the State of the Union, and he said,
this is an agricultural economy. Eighty percent of the people
live in rural areas. Sevent-five percent of the people are
farmers.
Senator Leahy. In fact, I had a chance to chat with him in
your office.
Mr. Natsios. That is right. You came to that, Senator.
Thank you for doing that. But it is very important the accounts
into which this money goes, because sometimes countries will
say, we do not need more spending in this area, we need it in
this area instead, and the way in which Washington works is not
always what is reflected in the reality in the field. I just
want to add that. I am sorry, Senator, for interrupting.
Senator Bond. Thank you, Mr. Chairman. This is exactly
where I wanted to come in with my comments. I know Ambassador
Zoellick was in Africa recently in a broad range of discussions
about strengthening our alliance. We know, and you have stated
very clearly the problem of feeding the hungry people in
Africa.
I have visited Asian countries like Indonesia and found out
how much they need our agriculture, specifically biotechnology,
genetic engineering. I have been visited by officials from
Nigeria, South Africa, Zimbabwe, all talking about the need for
GMO technology. One of the most articulate and impressive, Dr.
Florence Wombugu of Kenya said, in Europe or the United States,
GM food sounds like a luxury, but for people in poor countries
it is the difference between a square meal and starvation. She
is the daughter of a subsistence farmer, went into agricultural
research, and she said a hungry person is not a myth, it is a
person I know.
She was asked: ``why not the green revolution,'' and she
said: ``Well, GM is better for Africa, the green revolution did
not really work in Africa, because it was alien. It came from
the West. We had to educate farmers in the use of fertilizers.
But transgenic crops can get around this because the technology
to control insects, for instance, is packaged in the seed.'' I
think one of the most telling statements she made is that in
Africa GM food can literally weed out poverty.
In Europe, some people oppose crops with herbicide genes.
Now, in Africa, most weeding is done by women, 50 percent of
women's labor in Africa is tied up with weeding. Reducing that
would have a major impact in developing countries. Food is
getting cheaper because they use more and more technology, but
in tropical Africa it is getting more expensive, because it is
all manually produced. People with a small salary spend most of
it on food. If we can increase food productivity in rural areas
it will bring the price of food down, generate more money for
investments to turn the wider economy around.
And as far as why Africans do not want to get fertilizers
and irrigation, she said: ``I think that is like saying
Africans do not need aircraft, we should go by road--we do not
have either one--or that we should be denied computers until
everybody has bought a typewriter and mastered it. Africa wants
to be part of the global community. They want to be able to use
the new technologies.''
Do you disagree with what I have just said?
Mr. Natsios. Senator, I agree with every single word you
just said, and in fact it sounds like you just read our
agriculture strategy paper.
Senator Bond. Well, I just read your testimony. I will be
darned if I can find a single word in there about biotechnology
and the importance of using GM to deal with the viruses in the
sweet potatoes and the tubers.
Mr. Natsios. I did not put all our strategy papers in here,
because it is a limited document. I would be happy to send you
a copy of our strategy paper. The essence of it, Senator, is
that we can use science to end hunger in Africa.
Senator Bond. I agree 100 percent. This subcommittee has
provided you money for putting biotechnology to work in the
developing world. How is it going? Are you getting it out
there? For a while there it was not going out, and you and I
had a discussion about the problems. Are you getting it out
now?
Mr. Natsios. We are getting it out, not as fast as you
would like or I would like, but there are capacity problems in
some countries to accept this.
There are six elements to our strategy. One of the elements
is GMO science being used in the field, another is to train a
new generation of agricultural scientists in Africa and South
Asia in order to administer this. It is not a function simply
of getting the seed out or the tubers. We have to get
scientists to understand how to use this effectively over a
longer period of time.
Senator Bond. That is the other element. One of the most
important things they are doing at the Danforth Plant Science
Center in St. Louis is reaching out to train the best and the
brightest from all these countries so that the specific
applications of biotechnology can be adapted to their
countries. We want them to have the trained scientists so they
can judge the safety of all GMO products for themselves, so
they do not have to say, well, the USEPA or the USFDA or the
USDA judged it to be safe. They can say, we here in this
country, your countrymen, have the science. We know. We can
assure you it is safe.
To me, education, sharing technology, training people in
these countries, not just to use the genetically modified
products, but how to improve them, to adapt them, and to judge
them is the most important thing we can do, and I appreciate
very much--I was a little concerned when I did not hear
anything and when I did not read anything, but if you could
give me a list, a description of the new projects funded, and a
sense of what the unmet needs are, we will do everything we can
to help you.
I hope to be able to visit some of those countries.
Mr. Natsios. We can give you a list, Senator. I just opened
a biotechnology research center in Cairo. We have a very large
program there. The minister of agriculture is a visionary
figure in this whole science area. He and I opened it together
about a month and a half ago, and they are doing some very
exciting research that is improving Egyptian agricultural
production.
Let me just tell you one great story on this whole issue of
improved varieties in Uganda, a thing called the cassava
mosaic. It is sort of like a parasite that attacks the cassava
crop, which is, of course, a root crop, that in many areas of
Africa is the primary source of starch. Uganda produced about
$250 million a year of cassava. They went down in 18 months to
$3 million a year, because of the cassava mosaic attacking the
crop.
We introduced through USAID, I believe it was a genetically
modified, but I am not certain--it was either improved
variety--I think it was genetically modified, and within 18
months we had production back up, working with the minister of
agriculture, to $300 million a year, which was bigger than any
time in the past in terms of production.
We introduced the same technology as my first act in May of
last year, because these same mosaic was attacking crops in
what is now the Democratic Republic of the Congo--it used to be
Zaire--and in Burundi, and in Rwanda, and it is devastating
whole areas of those countries, so we have now introduced that
genetic variety of cassava that is resistant to the mosaic, in
the Congo, and production is beginning to slowly recover from
the damage done.
If we did not have this kind of research and science,
Senator, we would not be able to save these people, because
they are very good farmers, but they do not have the benefit of
these research centers that we do here.
Senator Bond. Well, Mr. Administrator, we would like to
invite you to come out to the Danforth Plant Science Center,
because we are doing those things. We could tell you the
stories about the cotton farmers in China, where all of a
sudden cotton production has become profitable again, because
of BT cotton. South Sulawesi in Indonesia has come back, and
the cotton farmers are now making enough money to feed
themselves, their families, and strengthen the community. We
can do the same thing around the world.
One of the stories--and I will not impose any more on my
colleagues' time. One of the stories that is fascinating is the
prospect that we can genetically modify a banana, for example,
to carry the vaccines that are needed to prevent some of the
most devastating illnesses that affect the smallest children in
many developing countries.
When I told a good friend of mine who is a high official in
the government of Singapore, he said, oh, I believe in genetic
engineering, but do not tell me a fantasy story like that,
because it will not be believed. Well, it should be believed,
and we will be able to do it. We look forward to working with
you.
Mr. Natsios. If I can just add one more story on that
subject, Senator, which is one of the most exciting areas, we
know that vitamin A has a profound effect on blindness----
Senator Bond. The beta-carotene-enriched, and we gave you
$5 million to put into that.
Mr. Natsios. We have put the money into it, and we are very
excited about the prospectives, because it combines child
survival and child health with agricultural production.
Senator Bond. We are going to be coming to you with, we
could add vitamin A to soy oil for Nigeria.
Mr. Natsios. And India.
Senator Bond. I would yield to my colleagues on the other
side.
Senator Landrieu. I thank the Senator for those remarks,
because there are so many promising technologies in that area,
and we should be certainly open to research and development,
because it can help skip many generations of farming practices
with what we know.
I am going to be very brief. I have just got three
questions, and I would like to submit some more in writing, but
in the President's State of the Union I was so pleased that he
recognized the ministry of women in Afghanistan. Could you
comment for the record, because I was not able to see from the
documents provided any funding that will be going directly to
the ministry for women in Afghanistan.
Mr. Natsios. Dr. Zamar, who was the lady you are speaking
about, she is the vice chairman of the interim Government. She
is a medical doctor. She headed an Afghan women's NGO that, I
might add, even when nobody knew about it, the USAID was
supporting in the late nineties, and so we provided assistance
to her NGO. In fact, I think we are one of the few donor
countries that did that, but she remembers.
She came and visited me. We had a very good discussion, and
I am pleased to announce that we are providing a $60,000 grant
through IOM to reconstruct the women's ministry, which is her
ministry in Kabul. The ministry right now is sort of basically
blown up a long time ago, in the mid-nineties. She has no
building to house her staff, and we are going in now to
reconstruct it, so that is the first thing, because she said,
if I do not have offices, we cannot run programs.
Senator Landrieu. What are the commitments, besides the
rebuilding of the building, that have been made to her and to
the women's ministry?
Mr. Natsios. She has requested we provide grants to a
number of women's, Afghan women's NGO's. They are indigenous
NGO's. They are not hers, they are other women's NGO's, and I
think three grants were made in the last 3 weeks to these
NGO's. I can get you a list and tell you what--they are in
capacity-building, in training. One of them is a grant to
produce a newspaper that will have a focus on women's issues
that will be available in the large cities.
Senator Landrieu. Let me ask the question this way. Could
you give us a general idea of the amount of money that is going
to be going to aid to Afghanistan, and what percentage will be
given through the women's ministry, approximately, just if you
can round it off?
Mr. Natsios. I can tell you how much we are going to spend,
and how we are going to spend it. We do not break down our
budgets based on how much money goes through the ministries per
se, and the reason that that is the case is, many of the
ministries do not have budgeting systems yet in order to
actually spend money. There are no bank accounts. There are no
banks in order to actually move the money around.
Kabul is still recovering from 10 years, 20 years of war.
They have not recovered, and so the ministries, what we are
doing is, we are using international organizations, and NGO's
that are already there that have an infrastructure and a track
record that the ministries are comfortable working with. If
they are not comfortable working with them, we are not going to
give the grants.
So we will work with the ministries to decide how the money
is programmed, and our mission director, Jim Kunder, who I was
just with 6 weeks ago, is spending a lot of time working with
the ministers in the interim Government on this.
Now, the second thing is, the money will not necessarily go
through, let us say, the women's ministry, even though it will
affect women profoundly, and I will give you one example. We
decided one way we could contribute to the reintroduction of
women in a very visible way into Afghan society was through the
schools. Why is that? Two-thirds of the teachers in Afghanistan
who are trained as teachers are women, and schools and
education is an obsession with Afghan families. They want their
kids in school. Even the kids want to be in school, which is
something I would like to bring them over and teach our kids
about.
Senator Landrieu. They could spend some time with my
children.
Mr. Natsios. I know the problem.
So we asked women, what is the best way to do this
systematically, not in a few grants, but how could we bring
thousands of women in a visible way back into Afghan society?
It is through the schools, and I visited in my last trip 6
weeks ago the schools of Kabul, and most of the teachers were
women, and what we are doing is two things.
We have made a $6.5 million grant to the University of
Nebraska to print 10 million textbooks in Dhari and Pushtun,
the two major languages, of 127 different texts. Half are in
Dhari, half are in Pushtun. They are being printed literally as
we speak right now, in printing presses on the Afghan border
with Pakistan in Peshawara, and they will be distributed--
school starts March 22. They will be distributed, 4 million of
them we hope will be distributed before school starts in a
month.
The second thing we are doing with respect to this grant is
teacher training. Many of the women said, look, we have been
not allowed in the classroom for 8 years, we need to be
trained--and many of them were trained in the old Soviet system
of education--we need, would like western training in how you
teach in the West, not just rote teaching, and so there are 20
teams of five professors going out to do teacher training in
the local languages, and they will teach trained master
teachers in the schools to then retrain the teachers in each of
the local schools, and that is being organized.
Senator Landrieu. I thank you for that testimony.
Mr. Chairman, I was pursuing a line of questioning,
remembering that the President was good enough to acknowledge
the head of the Afghan women at the State of the Union speech,
Dr. Zamar, and I am going to be very interested to see that
commitment to recognize her is also followed up with
commitments of resources to strengthen the women's ministry to
give them financial resources so that ministry can be seen as a
very powerful tool for reform, and that it will give them some
flexibility as to how to invest those dollars for the
strengthening of women, because our entrance into Afghanistan
was for many reasons, but I think in the minds of the American
public, the oppression of women there was one of the reasons
that this country--not the only, but one of the reasons this
country felt so strongly about its efforts.
Let me go on to my next two questions, very briefly.
Mr. Natsios. If I could make one comment, the best way to
judge how we do this is to call Dr. Zamar in 6 months and see
what she says we are doing for her.
Senator Landrieu. I will follow up on that. The next
question is about the institutionalization of children
worldwide, and I just would urge you, I am going to send some
information to USAID, because I think you all can be very, very
helpful in this regard.
The United States just passed the Hague Treaty, one of the
first international treaties on adoption that recognizes
children have a right to be with the families to which they are
born, but if war, famine, disease, or alcoholism or other
things separate them from that family, the our goal now, the
worldwide community, is to try to place those children with
another family, because children cannot raise themselves. They
do not do a very good job on the streets or in institutions.
And so I would urge USAID, and I am going to send some
information about progress that is being made in terms of using
our resources to facilitate the strengthening of families,
connecting children with families, kinship adoption being our
choice, and if not, then adoption with some other--some
societies and cultures have a very effective and informal way,
and others have a long way to go, and I think with USAID, one
of the best things we could do is to connect each needy child
with a family, and then, of course, support that family unit
for economic development, so I am going to send some
information on that.
Mr. Natsios. You have just described, Senator, our policy,
which is longstanding. We try to avoid institutionalization of
children in the developing world. It does not work very well.
In many cases it is a disaster. In most traditional societies
adoption is the preferred system. In fact, it was in the United
States, too, I might add. In my home town of Hollister, that is
how we handled problems with families 100 years ago is, they
were adopted informally, without going to court, frequently,
and many kids I went to high school with went through that
system, and they were very well brought up. I think we should
go back to a system like that.
That is a domestic issue in Africa. There is a long tribal
tradition of bringing children in whose parents have died. We
do have a big problem. Our biggest challenge right now is AIDS
orphans. We are facing massive destruction of families, where a
grandmother is handling or bringing up 20 or 30 grandchildren.
Senator Landrieu. I would like to help with that.
I see my time is up. Thank you.
Senator Leahy. Senator Durbin.
Senator Durbin. Thank you very much, Mr. Chairman.
Mr. Natsios, thanks for joining us. I have listened to your
statements about the AIDS epidemic facing our world, and I
think we share the same view. The statistics I have heard, and
I hope that they are accurate and I would like to put them in
the record, is that we currently have about 37 million HIV-
positive people in the world, and about, roughly 15 million
USAIDS orphans in Africa. By the year 2005, there will be 36
million HIV-positive cases in India alone. You have mentioned
Russia as another country.
Mr. Natsios. Do you mean 36 million?
Senator Durbin. 36 million. That is the number I have been
given. I will certainly look into it to make certain that is
accurate before I leave it in the record, but regardless of the
exact numbers, I think we share the view that this is a global
emergency. Do you agree with that?
Mr. Natsios. Absolutely.
Senator Durbin. You have said here today you are willing to
spend the money we send you, and I am more than happy to help
in that regard, but the tougher question I have to ask you and
Secretary of State Powell and the President is whether you are
willing to stick your neck out and designate as an emergency
your request for funds to fight AIDS. That is what this is all
about, particularly when it comes to the global fund.
Your funding is good in terms of bilateral aid and such.
When it comes to the contribution to the global fund, an effort
inspired by Kofi Anan and others to bring civilized countries
around the world to address this epidemic, your request is
woefully inadequate, not even close to the billion dollars that
many of us think would be a bare minimum what the United States
should put on the table. The only way we can reach the $1
billion figure is if you are willing to stick your neck out and
say, AIDS is not only a global emergency, it is a budgetary
emergency. Will you do that?
Mr. Natsios. Well, let me first say that I think if we put
all of our humanitarian eggs in one basket, we may kill a lot
of people. The global fund is one of several mechanisms through
which we need to work. It is untested. I believe it is going to
succeed. In fact, USAID is providing the primary staffing right
now for the global fund administrative staff. They are from
USAID. We seconded them there. Sixty percent of their
administrative budget to get this thing running is from USAID's
budget. We gave them the money, so we take it very seriously.
We support it. It is yet untested. Some international trust
funds have had very great success, others have been a disaster,
and I could go through and give you specific examples, but this
is the point, and let me just say----
Senator Durbin. If your answers are too long I will only
get two questions. If you could come to the point.
Mr. Natsios. The point is, we cannot put all of our
financial resources in the trust fund. I think it would be a
disaster to do that.
Senator Durbin. Let me just ask you this. Have we learned
anything in Africa over the last 12 years about effective ways
to fight AIDS?
Mr. Natsios. Yes.
Senator Durbin. Sure we have, and Uganda is a good example,
and you are suggesting now that the idea of an international
trust fund to fight AIDS is going to embark in uncharted and
uncertain territory.
Mr. Natsios. It is an administrative matter, not in terms
of the program in the field. We know it works. The question is,
how fast they can move the money.
Senator Durbin. So it is a question of getting the
bureaucratic side of it working?
Mr. Natsios. When you are dealing with 40 countries putting
money into a fund, you know what we have to do, we have to set
up separate accounts for every country in this fund, because
they all have different legal restrictions on how that money
can be spent. It is much more complicated and managerial than
we thought it would be.
But let me just say, we are asking for a lot more money for
our bilateral program. Our bilateral program is already in
place, it is already working, and if you ask African leaders
who is providing at the forefront, who are the storm troopers
against HIV/AIDS outside of their country, they are not going
to tell you about any trust funds. They are going to say the
USAID program.
Senator Durbin. I have been there, I have spoken to them,
but you and I would readily concede that if this is a global
emergency that threatens in terms of lawless nations breeding
violence and terrorism, in terms of starvation and deprivation,
that our bilateral aid commitment is hardly adequate to the
need, and to suggest that we are going to hold back on this
global fund until some group----
Mr. Natsios. We are not holding back, Senator. We are not
holding back. I am simply saying that what I thought you were--
or maybe I misunderstood what you said--is, you seem to say you
want to put all of our funding into the trust fund.
Senator Durbin. No. I am asking whether you are willing to
increase your, what is it, $100-million commitment to the
global fund.
Mr. Natsios. The fund, over 2 years the commitment is $500
million.
Senator Durbin. I would just suggest----
Mr. Natsios. I am suggesting, if there is going to be an
increase beyond that, it should be in the bilateral program. I
would disagree with you if you are suggesting----
Senator Durbin. In other words, you are opposing the
request by Kofi Anan to create this global fund?
Mr. Natsios. Absolutely not. As I just mentioned to you,
Senator, we are leading the charge to help them succeed, but
there are other mechanisms to fight the disease. We have been
fighting this disease for 15 years, long before any global fund
was created. We have the programs in place right now where,
because you gave us more money this fiscal year, we are able to
scale up to major national programs in 22 countries now, and I
appreciate your giving us the support and the resources to do
that.
Senator Durbin. Let me just suggest to you that I think we
have done a great deal, but you have to concede that the scope
of the challenge is growing geometrically, while our commitment
is growing arithmetically.
Mr. Natsios. Our commitment is growing geometrically. There
has been a 500-percent increase in funding for HIV/AIDS by the
U.S. Government since 1998. 500 percent is not an arithmetic
increase.
Senator Leahy. But with the most significant increases
being pushed through by the Congress.
Mr. Natsios. But, Senator, we proposed a large increase
ourselves. I think it is a little unfair to argue that all of
this increase is because of the Congress. We proposed the
increase before the Congress mentioned the issue last year.
Senator Leahy. Not really. I can show you an awful lot----
Mr. Natsios. I have to disagree with you.
Senator Leahy. I can show you an awful lot of speeches by
Members of Congress proposing it, and we had to fight the
administration's lobbyists to get to the level of money that
was appropriated last year.
Mr. Natsios. Senator, we asked for a large increase. We are
spending almost $1.2 billion on this. That is not a small
commitment. That is a huge commitment. I might add, a third of
all----
Senator Leahy. It is almost 1/1,000ths of our budget.
Mr. Natsios. The money we need to spend on this, the
principal donor is the U.S. Government, a third of all the
money spent.
Senator Leahy. What is the wealthiest Nation on earth?
Mr. Natsios. Senator, a third of all the money spent
worldwide, including health budgets in the third world, a third
of it comes from the U.S. Government.
Senator Durbin. If I could reclaim my time.
Mr. Natsios. This is a little unfair in terms of the facts.
Senator Durbin. Let me suggest to you our heart is in the
right place, but our pocket book is not.
Mr. Natsios. That is not true.
Senator Durbin. Excuse me, sir, I would like to have an
opportunity to speak. I am glad you are here, but if we are
going to make a commitment, please concede that when you come
before us with great pride in the American commitment to
foreign assistance, when it is less than one-half of 1 percent
of our budget, when we are dealing with a global AIDS epidemic
which is probably as great a threat to the security of this
world as terrorism, that clearly there is more we can do, and
when the Secretary-General of the United Nations tries to rally
the United States to please lead in creating a global fund, and
we have managerial administrative problems in dealing with
this, I sit here and wonder how many more people will die while
the bean-counters push them across the table.
Mr. Natsios. Senator, to be fair to you, we have staff in
the field that work round the clock on this now. Now, the
reason I am a little angry is, it looks like you are
criticizing our program.
Senator Durbin. I am.
Mr. Natsios. Because the program is being successful.
Senator Durbin. I am criticizing it not because of what we
are doing, but the scope of our commitment.
Mr. Natsios. The scope of the commitment is massive. I
might add, the problem is----
Senator Durbin. In comparison to the problem, is our scope
massive?
Mr. Natsios. Kofi Anan has said the amount of money needed
is between $7 and $10 billion. We do not know precisely how
much. We are $1.2 billion of that $7 to $10 billion. This is of
all donor Governments in the world, and all third world
Governments in the world.
Senator Durbin. We are going to leave this subject, because
you and I--excuse me. We are not going to come to an agreement
on this. I do not question what we are doing is good and
important. I have seen it, I have been there, you have, too,
but I hope that in your heart of hearts, tonight before you
turn out the light and go to sleep, you will at least concede
that this problem is growing much more quickly and rapidly than
our response is.
Mr. Natsios. USAID in the last administration--I would like
to take credit for it, but it was Brian Atwood who did this.
When the scale-up began, we went through all of the Federal
procurement statutes to see if there was a provision that
allowed us to waive all those statutes in order to procure
without going through the long process we normally do. He
established the process for doing that, and we have permanently
on record now a waiving, because it is an international
emergency.
As far as I am concerned, the AIDS pandemic is like a
famine. Every month that goes by, more people get infected and
will die from it, and so we have moved very rapidly in order to
address this. One of the issues is, in many of these countries,
is the health care system in many countries is very weak.
Senator Durbin. I am going to interrupt you, because I
would like to ask another question, and we can spend time and
have a long conversation about this, but let me ask you
directly about the food aid. There are two parts of the food
aid request that you bring to us that trouble me. The first is
the elimination of surplus commodities in food aid.
Understanding, as you do, and we do, that the use of surplus
commodities is primarily a budget tool, a way to put money into
food assistance so that we can account for it here on Capitol
Hill without deepening what we are now facing in deficit.
You have made, the administration has made a policy
decision to walk away from surplus commodities. The question I
have to ask you is, what is the net impact on food assistance?
Will we have more or less because of that decision?
A second question, Senator Leahy and I share a conviction
and a feeling that our former colleagues, Senator Leahy and
people who served here in the Senate, Senators McGovern and
Dole, had an extraordinarily good idea in this global food for
eduction initiative. There was a commitment of some $300
million by the Clinton administration, there were moneys to be
spent this year, and you have eliminated funding for it in your
budget.
This money, which would try to provide in third world
countries one nutritious meal a day at schools, I think is
absolutely essential for many of the reasons you testified to.
We know providing a meal at school will attract more students,
and particularly more young girls, and I hope you will concede
that if you want to measure the potential of a country to deal
with social problems, look at the role of the women.
If women are treated like chattel slaves and property, the
worst is yet to come. By educating women we know that we give
them a chance to have not only good self-esteem and more
skills, but smaller families and smaller problems in the
future. As you walk away from this commitment to this global
feeding program for schools, I am afraid we are going to
aggravate the problems that we all agree are part of what we
face in this world, and I would like you to respond.
Mr. Natsios. Well, the first is that the surplus food, the
416(b) account, which I think, Senator, is what you are
speaking to, which is an Agriculture Department account, not a
USAID account, was established many years ago, but was unused
for much of the 1990's. In other words, that account was zero
for, I think, the mid-1990's.
I think it was in 1998 or 1999 that because of the collapse
of the Asia economy, and our exports were diminished, we had
large surpluses. They decided to announce a huge--I think it
was 3 or 4 million tons of surplus. I do not remember the exact
amount, but it was a very large amount. Those stocks have been
drawn down now, and it did have an effect. I have to say we may
have sent too much food into some countries, because there are
limits as to what you can do before you adversely affect the
agricultural economy, and we had many complaints that too much
had gone into some African countries, and farmers were telling
me, you guys are hurting our markets here.
What has been done in this budget is actually a good thing
from my perspective, and I have a little parochial interest in
this, but I am very big on food aid, because I managed the food
aid budget in the first Bush administration 10 years ago, so I
am a very strong advocate of food aid. This is the largest
increase in title II I think we have ever had. The account this
year is, I think, $816 million, $820 million for title II. We
propose in the 2003 budget for title II--it is not before you,
it is before a different committee--$1.15 billion. It is a
$335-million increase in title II, which is I think about a 60-
percent increase in the budget.
Senator Durbin. So the net food aid commitment of this
budget is greater?
Mr. Natsios. Of title II. The title 416, which is the
surplus food, has gone down. That is going down.
Senator Durbin. But the net food aid commitment in this
administration's budget will be larger or smaller than the
current?
Mr. Natsios. It will be smaller, because the surpluses have
been brought down, but the agreement we made----
Senator Durbin. So the food requirements of the world have
diminished since this fiscal year?
Mr. Natsios. The food aid requirements were not what drove
the 416(b) account. Surpluses in the United States drove it.
The amount we requested that OMB gave what we asked for, I said
we cannot survive in 2003 by eliminating 416(b) and not putting
anything in place, so the agreement was, as the surpluses draw
down, we need some of that--we need to keep some of it in title
II for the Afghanistans of the world, when they take place. I
mean, there is a drought, 4 years of drought.
Senator Durbin. You do not quarrel with the conclusion?
Mr. Natsios. There is no quarrel with the conclusion.
Senator Durbin. The net food aid in your budget request
will be less than what we are currently sending out into the
world today?
Mr. Natsios. That is correct, but I might add, we did not
need all of that food in my view, and I think it was
destructive to have so much of it in the developing world, and
I think there is widespread agreement on that, I might add, in
the community.
Senator Durbin. What about the food for education?
Mr. Natsios. The food for education is not a USAID fund. We
run food programs in our school programs in many countries
right now, and so we can tell you from 40 years of experience
that it is a good idea to combine primary education in poor
areas with a school lunch program, because it increased
particularly girl-child participation rates.
If the parents know their kids will eat, they tend to send
particularly the girls, and keep them in school. Many of them
will drop out after 1 or 2 years, so it makes great sense, and
we have case studies to show that, and our staff has been
running those programs long before the program was created.
Let me add, however, in some areas there are no roads to
move surplus food to. I mean, we run school programs in areas
there is no way to get surplus food to, so one of the things we
sometimes do is, we multiply the number of kids in school and
then say, well, that is how many tons of food we need. Some
areas, there are no roads to move surplus food to. Forty
percent of the cost of our food programs are transportation.
Senator Durbin. But all PVA food aid under this budget is
going to go through your program?
Mr. Natsios. No. I'm not an expert in the Agriculture
Department budget, which they run and not me, but I think food
for progress has $100 million in it for next year. That is a
standing account.
Senator Durbin. I have gone way too far on my time, I
apologize to the chairman, but I sincerely hope that when we
sit down and deliberate this budget, Mr. Chairman, that the
premise that we need less food aid in the world is at least
explored, if not challenged, and I sincerely hope that this
school feeding program, which I believe you share the same
feeling I do on----
Senator Leahy. That is Senator Dole's and Senator
McGovern's initiative.
Senator Durbin. It should not be zeroed out. I hope we can
find a way to cure that.
Thank you, Mr. Chairman.
Senator Leahy. I appreciate it. I think both Senator Dole
and Senator McGovern, two men greatly respected by their
colleagues up here, demonstrate this is not a political or a
partisan issue.
Mr. Natsios. It is not, Senator.
Senator Leahy. Liberal, conservative, Democratic,
Republican, they are both Senators who have great respect in
this area. We could argue about who gets credit for what, but I
am still more interested in what the bottom line is.
I would point out that last year the administration
originally did not request funding for AID's global fund. I
recall going down to meet with the President. Senator Frist
came with me. We met with the President, Kofi Anan, Secretary
Powell, Secretary Thompson, and President Obasanjo of Nigeria.
Only then, did the administration submit a budget amendment,
and it was in response to a great deal of congressional and
public pressure. While I applauded the President in making that
request, we then had to fight with the administration to make
sure there was actually new money, and did not take money out
of the same programs that you and I and Senator Durbin and
Senator Landrieu and Senator McConnell and others support.
So let me ask you this. The budget request leaves the
amount of assistance for Afghanistan to be determined. Does
that mean you are going to find the necessary funds within your
2003 budget request?
Mr. Natsios. We--and I am quoting my boss now, the
Secretary of State. We expect to spend the next fiscal year--
not this fiscal year, the next fiscal year--$300 million in
Afghanistan, and we have identified $100 million within
existing accounts. We have not listed it per se. Some of it is
title II, some of it is FDA, some of it is OTI, some of it is
child survival money, up to $100 million.
The others will come, and it is not my job to announce it,
but I am happy with the way that is moving.
Senator Leahy. Well, let me ask you this----
Mr. Natsios. Can I just add this, Senator, just so it is
clear, and I do not want to confuse people, the $296 million we
pledged in Tokyo, that Secretary Powell pledged, is for this
fiscal year only. We only made a pledge for this fiscal year,
because we did not know what was going to happen next year.
Senator Leahy. And where does that come from?
Mr. Natsios. It comes from partially food, partially money
that was not spent by the PRM program. You remember, the $40
million?
Senator Leahy. He has identified the $296 million?
Mr. Natsios. Yes. It was identified before we announced it.
Senator Leahy. How many USAID staff are in Afghanistan now,
approximately?
Mr. Natsios. Approximately 10, but I just want to say we
have to live on the embassy compound. There are security
problems.
Senator Leahy. I understand that.
Mr. Natsios. We have to be very careful with that. We have
had incidents, as you know. We do not want to have any more.
Senator Leahy. I am concerned about the safety of our
people working in Afghanistan. What size mission do you assume
there will eventually be?
Mr. Natsios. We are expecting, in terms of Foreign Service
Officers, perhaps eight Foreign Service Officers. There are a
number, believe it or not, of Afghans who served as Foreign
Service nationals on the USAID staff 25 years ago. They must
have been very young when they left. They have come back, and
reapplied. There are a number of Afghan doctors, an agronomist,
who want to work for us, and we are taking applications now for
that, and we will send in some personal service contractors.
Senator Leahy. Some of us have aged over the last 25 years.
We have $296 million this year, $300 million next year. How
long do you expect we are going to be putting aid into
Afghanistan?
Mr. Natsios. The United States or the world community?
Senator Leahy. The United States.
Mr. Natsios. Well, I do not presume to predict what
Congress and the administration will do over long periods of
time, but I can tell you it will take at least 5 years to make
a serious dent in the reconstruction of the country, and over
the long term 10 years to bring Afghanistan back to a robust
economy and a functioning state.
Senator Leahy. I tend to agree with you. I look at some of
the immediate needs--again, I was talking with Mr. Karzai in
your office. There are some very immediate needs, such as
paying government workers to open up the buildings. There are
also critical security needs, including those involving the
international peacekeeping force also known as ISAF.
There is a story in today's Washington Post about the need
to expand this peacekeeping force. I believe that we are going
to have to expand ISAF considerably, so that USAID and the
State Department can carry out the kinds of humanitarian and
reconstruction activities that are essential to rebuilding
Afghanistan.
You talk about the people of Afghanistan wanting their
children to go to school. But you have got to have security in
order to have successful USAID basic education programs that
allow teachers to teach and all children--boys and girls--to go
to school. Given that security is so important to successfully
implement many of the USAID programs that you have talked about
today, I would assume that you anticipate that there is going
to be a significant peacekeeping force there for sometime to
come.
Mr. Natsios. This is somewhat out of my charge. However,
let me make a stab at what you have asked, Senator, because I
think it is a very good question.
There is clearly security issues in Afghanistan. They are
very severe in some areas, and not so severe in other areas. It
depends upon the area you are in. For example, right now, the
northeast region is relatively stable. The Kandahar area in the
south is very unstable. That, of course, was the center of
Taliban control where the subclan of the Pushtuns who dominated
the Taliban come from. That is a very insecure area.
There are a couple of NGO's that have gone back into
Kandahar, but there is some risk in it right now, so it depends
upon the area you are in, and what we are trying to do is take
advantage of the most stable areas to ratchet up our efforts to
a high level.
I have said repeatedly on Voice of America and BBC and
Pakistani radio that just as a warning, that if you want
assistance in reconstructing your region, you, the local people
and the military, the militias and that sort of thing, have got
to provide the environment for us. Now, some people will listen
to us, other people will not, which means some kind of force is
necessary.
The discussion so far has been that the United States will
help in training a military. As I understand it, some European
countries have agreed to do the training for the police force.
Senator Leahy. I think we all worry about repeating the
mistake that was made when the United States and most of the
international community walked away after the Soviets withdrew
from Afghanistan. We all saw what happened.
Mr. Natsios. A terrible mistake.
Senator Leahy. We must remain engaged in Afghanistan, and I
expect that USAID will be there for years to come. I just want
to make sure that they are able to safely and effectively
operate throughout Afghanistan.
Now, turning to the bordering country of Pakistan, we
provided $600 million to a government that has not always
followed the clear accounting methods of, say, a corporation
like Enron.
Again, I am just a lawyer from a small town in Vermont, so
I may not understand all of these sophisticated budget
procedures used by USAID and the State Department. How do we
keep track of the $600 million that we provided to a
notoriously corrupt government?
Mr. Natsios. Well, the $600 million, Senator, that was
approved for Pakistan is in budget support. We are not managing
it as a USAID mission. In other words, it is not our job to
manage project ties or establish a program for it.
What we did do in order to ensure that at least there are
the standards of accountability that the Congress would like in
terms of budget support is to arrange to have their debt
payments made with this money so that the money actually never
went to Pakistan per se, it went to the institutions to which
it owed this money, and then money was freed up within the
budgets and different accounts to be spent. We are monitoring--
it is part of the agreement we have reached to monitor the
spending of that money in the different accounts with the
Government ministries, and we will do that.
Senator Leahy. But you share my concern that it has to be
watched very carefully?
Mr. Natsios. I certainly do, Senator, and that is no
secret, that there have been issues in Pakistan and other
countries before, and I am very big on accountability, because
the one thing--I support foreign aid, or I would not be here
doing this job enthusiastically, but the one thing that always
undercuts us is accountability issues, and so we have an
obsession with focusing on that issue to the extent we can.
Senator Leahy. And understand, Mr. Natsios, I do not expect
every single program that USAID implements to be a 100-percent
success. If every single one is an absolute success, then that
tells me that we are not taking even measured risks to be
innovative and, ultimately, more effective with our scares
foreign aid dollars. Obviously in some of these programs, you
try some things, and find they are not going to work. You learn
from that, and you do not make the same mistake twice. I think
it is a very difficult job to be innovative but at the same
time manage the risks to U.S. taypayer's money.
I am concerned, again, as I stated before, that sometimes
the United States tends not to do as much as we are capable of
doing. Aside from foreign assistance, there are other areas
where, even though we are the most powerful Nation on earth, we
are not doing enough to lead. For example, on the issue of land
mines, we have told countries they had better do something to
ban land mines. All these nations signed the land mine treaty.
All of our NATO allies, every single NATO country has except
one, the most powerful one, us.
We take justifiable pride in the fact that we spend a great
deal of money in removing land mines throughout the world, but
I can tell you right now, the Congress pushed that program
through.
Mr. Natsios. I recall the legislation you pushed through 10
years ago for a ban on land mines, which has been very
effective.
Senator Leahy. We have had to constantly push
administrations, both Republican and Democrat in order to make
progress on the landmine issue.
Well, I will submit my other questions for the record and
allow others to do that.
I appreciate you being here.
Mr. Natsios. Thank you, Senator.
ADDITIONAL COMMITTEE QUESTIONS
Senator Leahy. 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
usaid compliance with section 636(i) of the foreign assistance act
Question. Mr. Natsios, I am aware of the longstanding interest that
Senator Levin has in USAID's vehicle acquisition procedures, and am
asking these questions at his request.
I am informed that section 636(i) of the Foreign Assistance Act of
1961 requires USAID to ensure that ``none of the funds made available
to carry out this Act shall be used to finance the purchase, sale,
long-term lease, exchange, or guaranty of a sale of motor vehicles
unless such motor vehicles are manufactured in the United States.'' The
Act also gives the President the authority to waive the provisions of
this section.
Is USAID in compliance with this statute?
Answer. Yes, USAID is in compliance with section 636(i) of the
Foreign Assistance Act.
Question. What mechanisms are in place to ensure that purchases
made by USAID, its contractors, or its grantees comply with this
statute?
Answer. The general USAID policy on motor vehicles is set forth in
our Automated Directives System section 312.5.3(b). This section states
that motor vehicles are restricted commodities, and that only U.S.
manufactured vehicles are eligible for USAID financing unless an
exception is authorized. Those exceptions are also set forth in that
section. One of these is the need for a type of vehicle that is not
manufactured in the United States, such as some types of right-hand
drive vehicles. Another is the lack of parts and repair support in that
particular country. Waivers can also be allowed for emergency
requirements when non-U.S. funds are not available, and the requirement
can only be met in time by purchasing foreign produced vehicles.
USAID's contracts and assistance awards include this requirement. Every
motor vehicle purchased with program funds, whether U.S. manufactured
or foreign manufactured, must be approved by USAID. This gives us an
extra opportunity to make sure that, if a foreign vehicle is being
purchased, there is an appropriate waiver in place. Finally, most
exceptions to the requirement to purchase U.S. vehicles are approved at
the USAID overseas missions, where it is easier to assure that the
criteria set forth for exceptions to the policy are met in that
particular country.
Question. During fiscal years 1997-2001 did the President ever use
his waiver authority to allow USAID to make vehicle purchases which
were not in compliance with section 636(i). If so, what reasons did the
President give to justify the use of his authority?
Answer. The Act permits waivers. Therefore, USAID considers
judicious use of waivers to be in compliance with section 636(i). The
President has delegated his authority to approve these waivers to the
Secretary of State. In turn, this authority has been re-delegated to
the Administrator, and then to the Assistant Administrators and Mission
Directors. The reasons given to justify use of this authority are the
same ones that are set forth in the Automated Directives System as
acceptable reasons for waivers, i.e. types of vehicles not produced in
the United States, lack of parts and service for U.S. vehicles, and
emergency requirements.
Question. Has the Administration put forth a set of criteria under
which the purchase of a foreign-made vehicle is justified?
Answer. USAID's policy includes a long established set of criteria
for justifying the purchase of foreign-made vehicles. As mentioned
previously, the criteria are set forth in the Automated Directives
System. The Administration has not issued any new criteria.
Question. Have these standards been imposed consistently over the
past decade?
Answer. Yes, they have. All waiver requests go through a clearance
process to be certain that the justification is sufficient and meets
the criteria set forth in the ADS section. All waivers require the
clearance of a legal advisor, among others.
successes and failures
Question. Like any CEO, I am sure you have had your share of ups
and downs as USAID's Administrator--even after being in that job for
only a little more than a year. What do you consider your biggest
successes so far--it seems to me that one example is USAID's efforts to
prevent massive starvation in Afghanistan, but what are some others?
What are your biggest failures?
Answer. I believe that USAID has served American interests superbly
in our fast and targeted response to Afghanistan and the frontline
states. Because of USAID actions, we were able to avoid a famine in
Afghanistan. We are now having printed and expect to deliver over nine
million textbooks to get Afghan schools open next month. This is
helping to bring peace to the Afghan people. We have initiated programs
in Pakistan to assist the Government's plan to re-establish public
schools and in Central Asia to work with the NGOs and local
communities. We are also targeting unemployment and underdevelopment
issues in Mindanao in the Philippines.
HIV/AIDS is another area where USAID is having success. USAID has
become the world leader in addressing the issues of HIV/AIDS. The
strategy we have developed and begun to implement can make a difference
in reducing the spread of this disease.
In all of these programs, we have been given the resources to do
the job and make a difference. In the areas of agriculture and trade,
USAID has led the way in developing interagency strategies to address
these critical issues in the developing world. Yet, I fear that we have
not yet been successful in securing the resources needed to implement
successful strategies in these areas.
successes and failures
Question. Let me mention a couple of examples of where you have
real work to do. One is in the democracy, rule of law, and governance
area. I think USAID has a role to play here, as does the State
Department. But so far USAID's track record is far from adequate. I
think our staffs should work together to figure what USAID should be
doing to promote democracy and the rule of law, how, and where. As you
know, Senator McConnell and I plan a hearing on these issues for next
Wednesday.
Answer. I agree that there is still room for improvement in our
democracy and governance programs, including those designed to
strengthen the rule of law. I welcome the offer to have your staff work
even more closely with USAID on our programming of democracy and
governance assistance. I believe, however, that USAID has made
considerable progress, during the relatively short time it has been
providing democracy and governance assistance, in ensuring that our
programs are effective assistance instruments for promoting democracy,
the rule of law and good governance. Democracy promotion is difficult,
and even the best program may fail because the enemies of democracy may
be too strong. Given the difficulties, I am proud of the historical
role that USAID has played in taking the lead on the promotion of
democracy around the world. For example, over the past ten years the
Agency has directly contributed to irreversible democratic progress in
countries as diverse as Bolivia, Bulgaria, and South Africa. At the end
of last year, I created the new Bureau for Democracy, Conflict and
Humanitarian Assistance and centralized most Washington-based USAID
democracy staff within it. This will help us see that these programs
get the support they need to succeed.
We have been learning lessons as we have been doing our democracy
and governance support work. For example, we now do a much better job
of assessing the true political dynamics that influence a country's
commitment to democratic reform, or the lack thereof. The Democracy,
Conflict and Humanitarian Assistance Bureau (DCHA) has developed a
comprehensive framework to both assess the true state of reform in a
country and to design a democracy strategy that will most effectively
overcome barriers to reform. When this process works, it is the
antithesis of a cookie-cutter approach. Over the last five years, USAID
has applied this framework in 26 countries--over a third of all those
where the Agency has democracy programs. The next hurdle we are trying
to cross is to make a more direct link between the findings of these
democracy assessments and the actual programs. We believe we will be
able to make considerable headway in this area under the new DCHA
Bureau.
In addition, the DCHA Bureau has begun a comprehensive study that
will evaluate all of our democracy promotion efforts to date. At the
end of this exercise, USAID will be able to definitively answer what
democracy programs work, what types don't, and what factors and context
explain our success or failure. No one else--donor or think tank--has
ever attempted such a large effort.
usaid contracting practices
Question. Another area is your contracting practices. USAID has
become enamored with ``indefinite quantity contracts'' which transfer
control over the management of projects to large contractors, often
based in Washington, whose record of performance range from excellent
to terrible. Can you comment on this?
Answer. It is true that USAID uses contractors and grantees to
implement far more of its programs than it used to. It is also true
that USAID uses indefinite quantity contracts to supply many
contractors. But it is important to keep this in perspective. All
federal agencies are using indefinite quantity contracts more. They are
far more efficient when you are trying to respond to changing
circumstances around the world than individual contracts, each of which
requires its own full and open competition. In addition, the fact is
that USAID is not using contracts nearly as often as it uses grants and
cooperative agreements now. About two-thirds of the total procurement
pie is for ``assistance''--grants and cooperative agreements, usually
with nonprofit organizations--and only one-third is for ``acquisition''
or contracts.
development assistance
Question. The budget request appears to contain a modest increase
for the Development Assistance account. How much of this increase is
simply due to the transfers of program responsibilities from the
Economic Support Fund (ESF), and not an actual increase above the
amount spent on these types of activities in fiscal year 2002?
Answer. First, the Administration's fiscal year 2003 request for
Development Assistance (DA) represents a 10 percent increase over the
fiscal year 2002 level for DA and Child Survival provided by Congress,
which is more than a modest increase, especially when considered in the
context of overall Federal budget constraints. Second, while there were
some reallocations of ESF from fiscal year 2002 to 2003, overall the
Administration's request for the ESF account increases by some $66
million from fiscal year 2002 to 2003 and, if the continuing planned
reductions in Israel and Egypt are taken into account, the amount
available for other countries increases by $226 million. Third, while
the ESF increase is focused mainly on a few countries affected by the
War on Terrorism, with some selected reductions elsewhere, those
reductions are more than offset by DA increases in the aggregate. In
Africa, for example, a $23 million ESF reduction was significantly more
than offset by a $113 million increase in DA.
Question. Development Assistance is your key account for combating
world poverty over the long term. Other programs provide emergency
humanitarian relief, but they are a stop gap. There are an estimated 2-
3 billion people in the world living on less than $2 per day. That
means that your budget request of $2.7 billion in Development
Assistance would provide about $1 per person living in poverty. I don't
want to minimize the impact you can have with that money, but isn't $1
per person far less than the wealthiest nation in the world should be
providing for these anti-poverty programs?
Answer. Our assistance is targeted on far fewer than the 2-3
billion people in your illustration since we do not provide assistance
to various countries where assistance is legislatively prohibited, the
largest of which is China. Also, while assistance from the United
States remains an important element of international efforts to support
development, total donor flows now exceed $50 billion; due partly to
USG efforts, our international partners are becoming more aware of the
need for collaborative efforts among all donors that help bring
developing countries into the global economy. Both multilateral and
other bilateral donors increasingly recognize that to do this requires
helping developing countries achieve poverty reduction, good governance
and national strategies that deal with improving health, education and
economic prosperity. Finally, it is increasingly important to consider
not just official development assistance but total resource flows to
the developing world, from expanding investment, which now exceeds $25
billion from the United States and $130 billion from all sources. It is
for that reason that USAID is increasing still further our
collaboration with private sector, government, and non-governmental
organization partners by establishing alliances that pool our resources
with those from the private sector to tackle important development
challenges.
basic education
Question. I mentioned children's education in my opening statement.
You have requested a total of $165 million for the world, which is a
slight increase above the current level. We spend six times that amount
on education in Vermont. How much would it cost to mount a serious
campaign to provide basic education to the world's children? How much
in Afghanistan, Pakistan, Uzbekistan, and the other Central Asian
countries?
Answer. The global Education for All Initiative (EFA), of which
USAID is a member of the High Level Policy Group and the Technical
Working Group, works at the policy, resource mobilization and country
levels. A March 2002 World Bank (WB) draft paper on accelerating EFA
has estimated external basic education funding at $2.5 billion
annually. This figure is contingent on improvements in education system
efficiency and developing countries putting appropriate levels of
domestic resources into education. An international technical meeting
is set for April 10-11 in Amsterdam where EFA donors, developing
countries and PVO/NGOs will review the World Bank's paper, country data
tables and cost estimates. The Amsterdam meeting will provide the
latest education cost estimates on Afghanistan, Pakistan, Uzbekistan,
and the other Central Asian countries. USAID's preliminary assessment
of the WB paper is that the annual global figure is understated because
of the non-linear and cumulative impacts of HIV/AIDS on economies,
institutions and the education sector. Finally, UNESCO and the World
Bank are leading the preparation of the first EFA Annual Monitoring
Report, which will be available later this year and will provide a
detailed snapshot of every EFA country, including education policy,
human capacity and resource gaps.
global health programs
Question. Just as we need to know how much it would cost to mount a
serious campaign to provide basic education to the world's children,
what can we say about the cost of improving global health? Could we
produce dramatic improvements in life expectancy for the world's poor
by increasing spending by $5 per capita?
Answer.
--Nearly 650 million people live in the world's least developed
countries, where life expectancy at birth is 51 years and 1 of
every 10 infants dies before the age of one. These countries
spend an average of $13 per person on health each year; $7 of
this comes from government.
--The December 2001 World Health Organization (WHO) Commission on
Macroeconomics and Health estimates that a set of essential
health interventions costing $34 per person ($21 more than what
is now spent) could produce dramatic improvements in life
expectancy. This spending would tackle malaria, TB, maternal
and child health and nutrition, additional vaccine-preventable
diseases, tobacco-related diseases and HIV/AIDS.
--About one-fourth of this increased spending, or $5 per person,
would make a major difference in the fight against HIV/AIDS.
Since the poorest countries would be expected to raise $13 more per
person from domestic resources, the donor share of this essential set
of services would cost $8 more per person.
central asia: assistance
Question. Since September 11th, Central Asia has become an
important region for U.S. assistance programs. When I looked at the
request for non-military aid to these countries, I saw that funding for
some countries in the region has been increased; for others it has been
decreased; and for still others it has been flat lined.
What mechanisms are in place in these countries, which are ruled by
backward, authoritarian governments, to ensure that our assistance gets
to those who need it most and is used, among other things, to
strengthen democracy and civil society, and protect human rights?
Answer. Our assistance is implemented through grants and contracts
to U.S. based, international non-government organizations and/or U.S.
contractors. None of our funding is provided directly to the
governments for implementation of activities. We have a strong in-field
presence, with a USAID regional office in Almaty, Kazakhstan and USAID
country program offices in the capitals of the other four countries,
which we are reinforcing with additional specialized staff. This
management approach assures that funding is well controlled and that
goods and service are delivered to those most in need. USAID's program
is designed to strengthen civil society and small businesses. Our
assistance helps them advocate for a more democratic system and fight
corruption and human rights abuses. We believe that engaged, vocal
citizens are essential for sustainable progress in these areas.
central asia: regional stategy
Question. While I have heard some good ideas of programs for the
Central Asia countries, I don't get the sense that we have anything
resembling a regional strategy. Am I wrong?
Answer. In Central Asia under the Soviet Union, Communist officials
chosen by Moscow practically eliminated opportunities for the
development of civil society and the private sector. Citizens of the
newly independent republics are challenged with the need to fight
lingering tendencies toward authoritarianism in the face of a
deteriorating socioeconomic situation. USAID developed its five-year
(2000-2005) strategy for Central Asia to address these issues.
In view of the potential for instability, conflict, and state
failure in the region, USAID is helping to mitigate the potential for
conflict by encouraging active dialogue with civil society, promoting
employment and income growth, and helping to improve health, education,
and environmental conditions. The goal of the strategy is to expand
opportunities for the citizens of the five nations to participate in
improving their governance, their livelihoods, and their quality of
life.
To achieve this goal, USAID has set four primary objectives for
each country. First, we seek the growth of small-scale enterprise and
trade, through support for activities in finance, regulations, and
education. Second, we are promoting a more open, democratic culture,
through the strengthening of non-governmental organizations, electronic
media, and parliamentarians. Third, we are encouraging better
management of environmental resources, through support for activities
in regional water management and energy regulation and efficiency.
Fourth, we are promoting improved primary healthcare through activities
encouraging community and family practices, fighting infectious
diseases, and promoting social marketing. These are region-wide
objectives. They are tailored in different ways to the unique situation
in each of the five countries.
These objectives are supplemented by several initiatives cutting
across the entire strategy. USAID is fighting corruption and minimizing
gender biases and increasing opportunity for alienated youth.
Recognizing the importance of education to preventing and
mitigating conflict in these Muslim countries bordering China,
Afghanistan and Iran, USAID is assessing the state of primary and
secondary education systems throughout the region to more appropriately
target and expand its assistance.
In response to the cooperation of Central Asian countries in the
war against terrorism, we allocated funds from the Emergency Recovery
Fund and are requesting increased funding for Uzbekistan and Tajikistan
in fiscal year 2003. The Administration also may request additional
funds for Central Asian countries in fiscal year 2002. While budget
levels reflect the political importance of the recipients to the United
States, they also reflect USAID's assessment of the best opportunities
for impact. For example, through fiscal year 2002, the largest
percentage of funding has been directed to Kazakhstan and Kyrgyzstan,
where there has been the most progress in economic reform.
Turkmenistan, the country most resistant to reform, has received the
smallest percentage of funding.
Question. The Administration has requested $368.5 million for
family planning programs for the Development Assistance account. How
much do you plan to budget for family planning from the Eastern Europe,
former Soviet Union, and ESF accounts, especially proposing sharp cuts
in the first 2 of those accounts?
Answer. The Administration requested a total of $425 million of
which $368.5 million is in Development Assistance [DA] funds and the
balance of the $56.5 million is projected from the Economic Support
Fund, the Eastern Europe and Baltic States assistance account, and from
assistance to the Independent States of the Former Soviet Union,
jointly managed with the Department of State.
family planning
Question. Given the unmet need in family planning services, and the
pressure of population growth on urban areas and the environment,
shouldn't we be doing more in this area? Your fiscal year 2003 budget
request for family planning is less than we were spending on these
activities in 1995. How does that make any sense?
Answer. In January 2001, the President stated his commitment to
maintaining the $425 million funding level provided for in the fiscal
year 2001 appropriation. His commitment to population is reflected in
the Administration's fiscal year 2002 and fiscal year 2003 request
levels of $425 million. Although the Administration's fiscal year 2003
request level for population is less than the fiscal year 1995 level,
it is higher than the annual levels of funding appropriated for
population in each of the years over the period fiscal year 1996-fiscal
year 2000.
disaster assistance
Question. Even before the crisis in Afghanistan and the volcanic
eruption in the Congo, the Office of Foreign Disaster Assistance was
being called on to respond to disasters in virtually every part of the
world. Last year, Congress increased funding for this account by 18
percent over the Administration's Fiscal year 2002 budget request--
which still fell far short of what is needed.
The fiscal year 2003 request for disaster assistance has been flat
lined at $235.5 million, even though the latest report published by
OFDA states that: ``the requirements for humanitarian assistance . . .
are on the increase. The humanitarian community has an obligation to
recognize this and respond in as creative and proactive manner as
possible.''
As the former head of OFDA, would I be wrong to assume that you
agree that the fiscal year 2003 budget request for disaster assistance
is inadequate?
Answer. The fiscal year 2003 request for disaster assistance of
$235.5 million in fact represents an increase of $25 million for
USAID's Office of U.S. Foreign Disaster Assistance (OFDA) because the
fiscal year 2002 appropriation of $235.5 million included $25 million
for El Salvador earthquake reconstruction, which is being managed by
USAID's Bureau for Latin America and the Caribbean. I believe our
fiscal year 2003 request for OFDA is appropriate.
Question. Have you asked OMB or others within the Administration
for supplemental funding to help address these shortfalls?
Answer. As I said, I do not believe the fiscal year 2003 disaster
assistance request represents a shortfall.
budget request format
Question. Last year, the Administration made separate requests for
both the Child Survival and Development Assistance accounts. While
there are pros and cons of separate accounts, after some disagreements
we finally reached a point where everyone--House, Senate and the
Administration--were on the same page, which helped with budgetary
comparisons, transparency, and oversight.
No one in the Administration even mentioned this to us last year.
Why has the Administration decided to make a single request, and by
dong so add to the already confusing format of the AID budget request?
Answer. The Administration determined that a single account would
afford greater programming flexibility and that USAID's financial
management and accounting could be greatly simplified by combining
these two accounts. In implementing development and health programs in
the field, USAID routinely integrates activities funded from the
separate DA and Child Survival accounts. Having to maintain separate
account records complicates accounting and reporting on the use of
funds in the two accounts. Nevertheless, we have clarified in our
Congressional Budget Justification, the amounts we plan to budget for
child survival and health programs if the funds are appropriated as
requested.
tropical forest debt relief
Question. In 1998, Congress overwhelmingly passed the Tropical
Forest Conservation Act to protect tropical forests in developing
countries through debt reduction.
Last year, Congress appropriated $5 million and authorized up to
$20 million in unobligated balances to help implement this program.
Despite campaign promises by President Bush, the budget request
contains only $40 millon in transfer authority from Development
Assistance to pay for tropical forest debt relief.
Do you know now much USAID actually plans to transfer from
Development Assistance to these debt relief programs, if any?
Answer. USAID will meet the President's budget request of $50
million from Development Assistance (DA) for activities to carry out
tropical forest conservation activities authorized by the Foreign
Assistance Act through a combination of ongoing and new activities. To
support this, the President has requested $25 million of new and
additional DA funds for USAID. USAID will support the President's
forestry initiative of a $50 million increase over USAID's current
forestry activities using the $25 million of new and additional DA,
plus $5 million out of our non-forestry DA base level, plus $20 million
out of our combined non-forestry Economic Support Fund, Freedom Support
Act and Support for Eastern European Democracy levels.
USAID is not able to say at this time how much, if any, of the $30
million in new forestry activities might be transferred to Treasury for
use through the Tropical Forest Conservation Act mechanism. Should the
Agency receive its requested DA levels, we intend to review tropical
forest conservation needs in USAID-assisted countries and make case-by-
case determinations on which mechanism available to us would be most
effective. In some countries this could be transferring money to
Treasury for TFCA while in others it could be through USAID's usual
mechanisms of direct grants, direct funding of endowments, commercial
debt swaps under the Foreign Assistance Act Title I, Chapter 7
authority, partnership arrangements with the private sector, or other
arrangements.
We note that some countries that are potentially eligible under
TFCA are not USAID-assisted countries. We would not expect to consider
transferring USAID appropriations to Treasury for TFCA deals in such
countries.
great lakes and justice initiative
Question. Central Africa has been plagued by some of the worst
violence, population displacement, and genocide that the world has ever
seen. A critical part of bringing long-term peace and prosperity to
this region will include strengthening civil society and the rule of
law, encouraging reconciliation, and punishing the guilty. The Great
Lakes Justice Initiative is designed to help accomplish these goals,
but the budget documents sent to Congress show that no money will be
allocated in fiscal year 2002 for this program despite the fact that
the Administration requested $10 million last year, and no money is
even requested in fiscal year 2003. With the tremendous needs in these
countries for this type of program, why are you not funding this
Initiative?
Answer. The U.S. Government recognizes the importance of supporting
ESF-funded activities initiated under the Great Lakes Justice
Initiative (GLJI). These activities have been effective in promoting
stability, democracy and good governance in Democratic Republic of the
Congo, Rwanda and Burundi for the past several years. There is not a
specific line item in the fiscal year 2002 and fiscal year 2003 ESF
budget request for the Great Lakes Justice Initiative. However, the
State Department is currently evaluating recommendations to continue
these critical activities with ESF funding in all three countries.
university programs
Question. Last year the Subcommittee changed the way that
university proposals are to be handled. In our report, we instructed
USAID to identify an office where universities, Members of Congress,
and others can go with inquiries about these types of requests. We also
directed USAID to report twice on the status of the specific proposals
listed in the Committee report. Have you identified or established an
office within USAID to handle proposals? What other steps have you
taken to be sure that proposals submitted by universities are handled
appropriately?
Answer. USAID has identified the Office for Human Capacity
Development of the Bureau for Economic Growth, Agriculture and Trade to
handle university proposals. To ensure that proposals submitted are
handled appropriately, USAID is implementing a system to centralize the
submission point and tracking of proposals. Proposals for internal
review will be processed under a stricter time schedule, with the
understanding that both USAID and U.S. Higher Education Community
prefer that vetting take place through a university peer-review process
to assure technical quality. USAID is also developing a brochure for
the U.S. Higher Education Community to publicize the process, and soon
will have a website on-line to improve communications.
west bank and gaza
Question. We are all very concerned by the collapse of the peace
process in the Middle East. But there are some positive things
happening there, and I want to commend the outstanding work of the
USAID mission in the West Bank and Gaza. It manages critically
important programs under extremely difficult working conditions.
None of these funds go the PLO or the Palestinian Authority. The
funds go through non-governmental organizations for things like potable
water, sewage treatment, and job creation. So when we talk of cutting
off assistance to the West Bank and Gaza, we are talking about ending
programs that help people in need and build goodwill towards the United
States.
Shouldn't we be taking immediate measures to create jobs, along the
lines of our own Civilian Conservation Corps during the New Deal?
Answer. The new $30 million JOBS project will represent a quantum
increase in job creation. Persons employed under this project will
perform basic social and community services, which have effectively
collapsed because of the intifada, and the Palestinian Authority's
inability to pay for these services due to a sharp drop in revenues.
Question. Given that unemployment is upwards of 35 percent in Gaza
and is especially acute among younger adults, what is USAID doing to
help create new jobs for people who lost their jobs due to the border
closings and other security measures?
Answer. USAID/WBG has an on-going $12.3 million Emergency
Employment project, implemented by UNDP, Save the Children Foundation,
Cooperative Housing Foundation, and Catholic Relief Services, which is
providing jobs for thousands of unemployed Palestinians. Also, the
Mission is obligating a further $2.3 million this year for additional
emergency employment activities to be implemented by International
Orthodox Christian Charities and others. Finally, USAID/WBG is
implementing a new $30 million Job Opportunities through Basic Services
(JOBS) project through U.S. non-governmental organizations.
alternative development programs in colombia
Question. It is now apparent to everyone, including the GAO and
USAID, that the Alternative Development Program in coca growing areas
of Colombia, where there is virtually no security, was poorly designed
and is not going to produce the desired results. We have already lost
valuable time and money. I have my own serious doubts about the coca
eradication program, as do many others here and even in the
Administration. But that is run by the State Department. One thing that
seems crystal clear to me though, is that USAID's Alternative
Development Program and the State Department's coca eradication program
should not necessarily be linked. USAID should do what it does best--
long term economic development in areas where there are local
communities it can work with and the security exists to implement
sustainable programs. Do you agree?
Answer. I agree that linking alternative development and coca
eradication programs can be difficult and creates some special
challenges. However, I would like to clarify that the USAID Alternative
Development Program in Colombia was designed to provide a flexible and
adaptive mechanism to support US counter-narcotics objectives over a
multi-year period. USAID never suggested that results could be achieved
quickly, certainly not in less than one year. Our field-based
monitoring systems, which are based on reports from contractors,
grantees, and counterparts, identified problems early on and enabled
the Mission to make early adjustments when constraints were observed
that limited AD progress. We feel this is an example of proactive
program management under difficult conditions.
The efficacy of aerial eradication can be reduced when planes must
avoid areas benefiting from Alternative Development Programs. At the
same time, limiting Alternative Development Programs to areas of
intensive coca cultivation can raise the costs and risks of development
efforts. There are several reasons for this. For example:
--Coca is typically grown in remote areas where there is no
government presence and little infrastructure. Organizing
development activities and creating new jobs under these
conditions takes more time and money than is the case in areas
with better infrastructure and services. At the same time,
because of higher production and transport costs, goods
produced in remote areas are less competitive in regional
markets.
--Drug crops are often produced in environmentally fragile areas that
are not viable for commercial agriculture.
--Drugs crops attract armed groups whose presence will often hinder
market-based commercial activity as well as broader community
mobilization in support of development activities.
--Areas conducive to drug production are not necessarily competitive
for production of other agricultural products aimed at regional
or international markets.
For these reasons, we have undertaken to diversify the areas where
we conduct Alternative Development Programs. Currently we are working
in nine different departments in Southern and Northern Colombia. We
will continue to expand to areas we believe provide better chances of
success at reasonable cost. These areas may not always be where drug
crops are concentrated. In areas where opportunity for impact is more
limited, we are restricting activities to those with less risk, such as
smaller scale community infrastructure. Finally, we are promoting
voluntary manual eradication of drug crops in the communities we work
with, because many people who are opposed to aerial spraying are
willing to eradicate manually in exchange for alternative development
assistance.
In sum, we agree that it does not always make sense to directly
link development and aerial eradication efforts in a given target area.
We will make sure that development programs generate the greatest
possible impact in creating new employment and improved social
conditions. We believe this is important to the long-term success of
overall USG Colombia policy.
biodiversity
Question. We recommended that USAID spend $100 million for
biodiversity activities in fiscal year 2002. Can I assume you will
spend that amount for programs that conservation organizations will
regard as directly protecting biodiversity in areas where it is
seriously threatened?
Answer. Yes, USAID will spend $100 million for biodiversity
activities that conservation organizations regard as directly
protecting biodiversity in areas where it is seriously threatened.
USAID defines biodiversity activities as those whose primary purpose is
to conserve biological diversity in natural and managed ecosystems.
Activities may include the following approaches: protected area
management, community-based natural resource management, ecoregional/
landscape conservation, sustainable use of natural resources, and
enterprise-based.
russia: usaid assistance
Question. Can you tell me how much USAID has spent in Russia since
it began implementing programs there after the collapse of communism?
How would you evaluate the impact of our assistance programs there--in
other words, what return have we and the Russian people got for that
money?
Answer. Since 1992, $2.6 billion in FREEDOM Support Act funds has
been obligated for U.S. Government assistance programs in Russia.
(Note: This figure does not include funds for non-proliferation and
security programs). Of this amount, USAID has managed approximately
$2.1 billion, and $550 million has been transferred for programs
managed by other U.S. Government agencies.
The primary areas in which USAID has provided assistance to Russia
include economic reform, support for small and medium sized
enterprises, environmental management; promoting civil society, rule of
law, and an independent media; and health care reform. During the past
five years, the focus of our assistance has shifted away from the
central government to an emphasis on working with regions and
municipalities to support reform at the grassroots level through
partnership relationships with Russian organizations. USAID currently
has activities in virtually every region of the Russian Federation and
has actively supported the four U.S. Government Regional Initiative
sites: the Russian Far East, Samara, Tomsk and Novgorod.
Assistance dollars in Russia have provided important support to
forces of reform, and have resulted in widespread economic reforms,
positive trends in civil society and the rule of law, and models of
health improvements in selected locations. The benefit to the U.S. of
this assistance is in helping promote an evolving market democracy in
Russia, contributing to a more stable and positive Russia in today's
world. Although a lot has been accomplished in the past decade, there
is a lot of work still to do in implementing economic reforms in the
regions, and in the health and civil society areas.
The main USAID achievements in Russia over the past ten years have
been the following:
--Establishing core institutions and systems for a market economy,
including development of capital markets institutions, such as
the Federal Commission on the Securities Market and the Russian
Trading System, and support for creation of Russian think tanks
which provide policy analysis to drive forward economic reform.
--Formulating a new tax regime that supports economic growth and
fiscal federalism. USAID-supported think tanks helped draft key
tax reform legislation which was passed in 2000-2001, setting a
flat 13 percent income tax rate and the lowest corporate
profits tax rate (24 percent) in Europe. Recent passage of the
new land code is attributable to USAID activities begun in 1994
with regional governors.
--Helping the small and medium-size business sector and the Russian
middle class grow rapidly. USAID assistance has introduced a
successful non-bank' credit model for small and medium
enterprises, a large proportion of which are women owned, and
our business management programs have helped train over 500,000
entrepreneurs in vital business skills.
Recent legislation passed by the Duma and drafted by a USAID-
supported think tank dramatically reduces licensing,
registration requirements, and state inspections that constrain
the growth of small and medium enterprises.
In addition, USAID support for The U.S.-Russia Investment Fund
(TUSRIF) has mobilized private capital for investment and
helped strengthen indigenous financial institutions.
--Developing and disseminating improved environmental policies and
practices through Russian institutions.--USAID assistance built
a vibrant network of regional organizations and institutes
which is disseminating improved environmental practices and
methodologies in such areas as forest management and pest
control.
--Making the judiciary more independent and fair.--USAID training and
exchange programs have exposed Russian judicial reformers to
American models, which had significant effect on legislation
such as the Civil and Criminal Procedure Codes, which requires
adoption of jury trials nationwide.
--Building civil society and independent media in the regions as a
democratizing and countervailing force.--USAID has helped
develop a network of over 70,000 civil society institutions and
NGOs throughout the Russian Federation. USAID has also
supported the existence of over 500 independent television
stations in the regions to provide an alternative to state-run
media.
--Creating the legal basis for a private land, real estate and a
housing market.--USAID technical assistance has resulted in
major reform legislation in urban planning, land ownership and
use, and local self-governance, which has resulted in $150
billion of Russian housing being privatized.
In addition, in 1994 USAID assisted with the Russian Officer
Resettlement Program, which contributed to a major U.S. foreign
policy goal-the withdrawal of all Russian troops from the
Baltic states.
Reorienting health services toward quality primary health care,
maternal and child health, and a focus on the HIV and tuberculosis
epidemics.--Through USAID technical assistance, Russian health
institutions are becoming more evidence-based and cost-effective.
USAID's introduction of modern family planning services has helped
reduce abortion rates; our work on preventing and treating tuberculosis
is leading to results that exceed World Health Organization standards
for success; and our work on HIV/AIDS prevention has provided critical
information to youth and assisted in joint efforts against the
epidemic.
______
Questions Submitted by Senator Tom Harkin
labor
Question. It remains the law of the land that USAID is not to use
any of its appropriated funds in support of any project, program, or
activity in any foreign country that does not enforce its legal
obligations under national and international law to not use child labor
or otherwise contributes to the violation of the other fundamental
worker rights and core labor standards.
Is USAID now fully in compliance with this law and what specific
procedures does USAID have in operation to enable you to know this
reliably, given that your agency supports thousands of projects,
programs, and activities in scores of foreign countries in all regions
of the world?
Answer. USAID takes seriously its responsibility to ensure that no
funds are used to undermine either U.S. jobs or internationally
recognized worker rights. To that end, USAID issued a policy
determination in January 1994 (USAID Policy Determination-20, U.S.
Programs and U.S. Jobs) that clearly and unequivocally forbids the use
of its funds, whether appropriated funds or local currency funds, in
projects or activities that: (1) could reasonably be foreseen to
involve the relocation of any U.S. business that would result in a
reduction of the number of employees of the business in the United
States; (2) establishing or developing export processing zones in which
the tax, tariff, labor, environment, and safety laws of a country do
not apply; or, (3) would contribute to violations of workers' rights.
This policy determination not only sets out the policy context and
general principles but also offers specific guidance on implementing
the policies. Among the implementation steps is a requirement that each
grant or contract include a clause stating that no funds may be used
for any purpose in violation of these policies. Should a grantee or
contractor be found in violation of this provision, sanctions and
penalties can be imposed. While we can not say with certainty that
there has never been an instance in which this policy has been
violated, we are certain that every effort has been made to assure
compliance.
In addition to prohibiting funds from being used for these
prohibited activities, USAID has a long history of supporting
compliance with international standards on workers' rights. USAID has
long viewed compliance with the rights of workers to organize and
collectively bargain as an essential element in both human rights and
democratic governance.
The American Center for International Labor Solidarity (ACILS or
Solidarity Center) and its predecessor regional institutes, have been
significant partners in implementing USAID's labor programs for over
four decades. USAID's labor program, among other objectives, seeks to
facilitate and encourage compliance with the ILO's Universal
Declaration of the Fundamental Principles of Rights at Work of 1998.
The Declaration's five core labor standards are:
--freedom from child labor;
--freedom from forced and indentured workforce, prison labor;
--freedom of collective bargaining;
--freedom of association;
--equal treatment for workers, without discrimination.
The Office of Democracy and Governance (DG) office supports
strengthening trade unions that in work developing countries to support
free, democratic trade unions. Labor unions are mass-based, often
represent the most disenfranchised citizens, bring them into the
political and development process, and give a voice to women and
children.
In February 2002, the DG Office awarded a five-year grant to the
Solidarity Center to be funded at $9 million annually assuming funds
are available. The Solidarity Center is an effective advocate for
democratic reforms and sustainable development. The Solidarity Center
programs often include collaborations with governments, other global
international institutions, employers, and workers themselves.
The Office of Democracy and Governance also manages The Partnership
to Eliminate Sweatshops grants funded by the Department of State. The
Partnership to Eliminate Sweatshops grew out of concern on the part of
the American public that the global economy had created a climate
conducive to abusive treatment of workers and unsafe working
conditions. There is broad public concern that goods sold in the U.S.
market not be produced under sweatshop conditions. Through the
Partnership to Eliminate Sweatshops, the U.S. Department of State and
USAID are collaborating to support programs conducted by concerned non-
governmental organizations to address these problems. These programs
include the establishment of business codes of conduct, workplace
monitoring systems, research and education initiatives, and worker
empowerment.
The objective of the program is to facilitate partnerships among
non-governmental organizations (NGOs), universities, organized labor,
corporate alliances, international organizations, and others to test a
variety of approaches intended to eliminate unacceptable working
conditions around the world. USAID is managing the programs of the Fair
Labor Association (FLA), the International Labor Rights Fund, the
Solidarity Center, and the Consortium of Pact and AED.
The FLA addresses violations of internationally recognized labor
rights in the apparel and footwear industries. It does this by
accrediting and overseeing monitoring organizations, and by working
with participating multinational companies, universities, and NGOs to
assure compliance with minimum labor standards.
The ILRF helps build capacity to among NGOs working on labor
standards in the apparel industry. The focus of the ILRF grant is to
develop the capacity of indigenous civil society organizations, broadly
defined and inclusive of trade unions, to carry out these program
objectives.
The Solidarity Center anti-sweatshop program builds on its capacity
to help local trade unions to empower workers. The Solidarity Center
seeks to work with its local partners educate, organize, and give
workers the legal tools to defend their rights under national and
international law. The Solidarity Center also seeks to ensure that
national labor laws are effectively enforced and mobilize international
consumer markets to support enforcement of core labor standards.
The Academy for Educational Development and Pact's anti-sweatshop
program also supports local organizations, including trade unions,
enterprises, independent media, and government bodies, to address
abusive labor conditions in overseas factories.
USAID has always endeavored to use appropriated funds in support of
projects in foreign countries that respect fundamental worker rights
and core labor standards, and address the problems encountered by
workers in the ``export processing zones'' or EPZs.
child labor
Question. For years, I have championed the need for a global
crackdown on abusive child labor and the importance of providing
positive alternatives for the children removed from abusive child labor
and their families. It has been proven repeatedly that one of the most
effective means of eliminating the worst forms of child labor is to
afford universal access to basic education. What more can USAID do to
help an estimated 250 million child laborers around the world to gain
access to basic education?
Answer. Children continue to be the most vulnerable in our world's
society and abusive child labor remains an impediment to meeting
Education for All goals of universal primary education and gender
equity. USAID is helping to build child labor strategies into field
mission initiatives in economic growth, agriculture, trade, education,
training, democracy and governance, environment and health, women in
development, and information technology. To mainstream USAID's focus on
child labor, the Economic Growth Bureau's Education and Training Office
has done the following:
--USAID's new flagship education support instrument will include a
significant focus on programming for out-of-school children and
youth, in particular, child laborers, including children and
youth subjected to the worst forms of child labor (e.g., as
prostitutes, soldiers). We anticipate that support for use of
this instrument by the field will increase in the future.
--Hired a full-time Child Labor expert in December 2001
--Expanded outreach, information sharing and program planning with
the Department of Labor, UNESCO and International Labor
Organization/International Program on the Elimination of Child
Labor (ILO/IPEC), including having ILO make a child labor
presentation at USAID's worldwide Human Capacity Development
Conference held at National Institute of Health (NIH) last
summer
--Has prepared 84 country profiles on child labor to help field
missions understand the dimensions and issues and facilitate
integrated program development
trafficking and slavery
Question. Since enactment of the Victims of Trafficking and
Violence Protection Act of 2000, the U.S. State Department and USAID
have brought new clarity of purpose to coordinating and strengthening
the interagency capacity of the U.S. Government to crack down on human
trafficking of women and children for illicit activities around the
world. The Task Force established for this purpose has proven useful as
has the new reporting capacity that has brought greater attention and
focus to this egregious human rights problem.
Mr. Administrator, there are now at least 27 million slaves
scattered in many industries in many parts of the world and our country
has aid, trade and investment relationships with governments in those
countries which do nothing about slavery in their midst. Do you agree
that this grim reality needs to be immediately redressed and will you
support legislation to establish an interagency process, including
USAID, that would make ending slavery worldwide a principal objective
of U.S. foreign policy as a matter of high priority and urgency?
Answer. I agree that the problem of trafficking in persons, a
modern form of slavery, needs immediate redress. To this end, the
Administration has intensified cooperation on this issue across the
board. The interagency mechanisms to address the problem are now in
place. On February 13, 2002, the President signed an Executive Order
establishing the President's Interagency Task Force to Monitor and
Combat Trafficking in Persons. The President's Task Force has
established a Senior Policy Advisory Group, which will have policy
oversight and conduct programmatic reviews related to trafficking in
persons. The United States continues to press for progress on
trafficking in persons, slavery and other human rights issues in
bilateral and multilateral fora as well as through the interagency
process.
university programs
Question. What process and implementing procedures have USAID
established to enable interested colleges and universities in Iowa and
across the nation with expertise to submit proposals for fair and
transparent, meritorious peer review and receive USAID funding to help
deliver programs and services to advance the core objectives of U.S.
foreign assistance?
Answer. USAID has identified the Office for Human Capacity
Development of the Bureau for Economic Growth, Agriculture and Trade to
answer inquiries and to receive and track proposals from colleges and
universities. To better communicate how proposals are processed and
reviewed, USAID is developing a brochure that explains a variety of
ways in which colleges and universities can become engaged in
delivering programs and services to advance U.S. foreign assistance,
including a stricter time schedule. Both USAID and the higher education
community prefer that vetting take place through a university peer-
review process to assure technical quality. USAID will also start a
website on-line that will provide even more information.
new freedom initiative
Question. In his first year in office, President Bush announced his
New Freedom Initiative to expand the rights of Americans with
disabilities. I applauded that initiative and I intend to support the
President in realizing its goals.
At the same time, I'd like to enlist your support to extend the
principles of the New Freedom Initiative beyond the borders of U.S.
domestic policy and into our nation's foreign policy objectives and
development assistance programs. Currently, the United States sets the
standard on disability policy for the rest of world in many respects,
but eleven years after the enactment of the Americans with Disabilities
Act (ADA), USAID has seemingly done very little globally to promote
respect for the rights of disabled persons and access. This is
especially disturbing because 80 percent of persons with disabilities
in this world live in developing countries.
For example, USAID in 2000 reported in its Second Annual Report on
the Implementation of USAID Disability Policy that efforts to promote
USAID Disability Policy have been ``disjointed and minimally
effective'' and that specific programming has only taken hold in
response to congressional mandate.
I am wondering what you have done so far to change this dismal
picture. More specifically, what policies have you invoked within USAID
to help ensure that all of the programs, projects and activities with
USAID's internal operations provide equal opportunity for people with
disabilities and facilitate their maximum contribution to your agency's
performance? Does USAID now play any coordinating role to make certain
that the rights of persons with disabilities and their particular needs
are being met government-wide by all U.S. government agencies that
provide technical assistance and operate programs overseas. (For
example, as new U.S. embassies are under construction in several
countries and many more are being overhauled for security reasons by
the U.S. State Department, what is USAID doing now to make certain that
access for disabled persons is guaranteed in the construction or
remodeling of these U.S. embassies and related facilities. More
broadly, what actions has USAID implemented since you have been
Administrator to help ensure that all projects, programs, and
activities supported by USAID in developing countries promote greater
respect for the basic human rights of persons with disabilities and
afford them greater access to live full and productive lives within
their own societies? Finally, what is USAID doing now to empower
persons with disabilities to advocate on their own behalf and
participate more fully in the formulation of public policies and laws
in all countries with a USAID presence?
Answer. As regards human rights USAID follows State Department
policy and determinations. The issue of how the rights of the disabled
fit under our government's definition of human rights is best addressed
by the Department of State as well.
Similarly in terms of USAID official facilities overseas we work
closely and under Embassy regulations and guidelines. However in
addition to the general under-investment for years in overseas facility
infrastructure, USAID's unique mission often requires us to acquire,
facilities in difficult circumstances and short time. Such realities
often make it a Herculean task to meet even minimal security
requirements and compromise on standards is inevitable.
As regards USAID coordination of other Agencies disability actions
overseas, USAID has neither the mandate nor expertise to fulfill this
role.
It is USAID's policy to integrate and incorporate disability
concerns into our basic mission and resources. This we believe is in
harmony with the Americans with Disability Act, which includes
reasonableness as a criterion for implementation. We have clear
examples where disability concerns have been successfully incorporated
into our programs and continue to look for other ``case specific''
opportunities. For example, in Vietnam where massive disability is an
acknowledged national concern, USAID, under the Leahy Fund, provides
both direct prosthetic assistance and institutional strengthening
assistance, such as the development of disability friendly construction
codes. In Africa, democracy assistance has included assuring access to
the voting process by disabled voters. In Latin America, to give voice
to the disabled, we have sponsored participation in regional forums on
disability policy. In Philippines we insisted on including elevator
service in a USAID funded two-story university lab building because
there was identified student need. The situations we face are so varied
that blanket solutions or approaches are not feasible.
Finally, as we engage in new situations such as Afghanistan, where
disability is a pervasive social tragedy, we will be involving new and
more extensive situationally appropriate responses. I would note that
since I became Administrator we have sponsored a workshop with the
disability community and State, with World Bank participation,
precisely to investigate ways we can do better in implementing our
policy of integration of the disabled into our activities.
basic education
Question. How much of the fiscal year 2002 USAID budget was spent
for projects and programs in developing countries to enable
impoverished children in developing countries to gain access to basic
education? How much has USAID requested for that fundamental purpose in
fiscal year 2003 and how does that compare to other USAID priorities?
Answer. Basic education is an increasingly important component of
the overall USAID program. Fiscal year 2002 funding for USAID basic
education programs from USAID's Development Assistance (DA) account is
$150 million; in fiscal year 2003, the request for basic education in
the DA account increases by 10 percent--to $165 million. This request
represents a 65 percent increase over the fiscal year 2001 level of
$102 million, even though the overall total for DA and Child Survival
increases by about 25 percent from fiscal year 2001 to fiscal year
2003. In addition, there is $15 projected for basic education in the
ESF, SEED and FREEDOM Support Act accounts jointly managed with the
State Department and that levels goes up as well, to about $32 million,
in the fiscal year 2003 request.
operation day's work
Question. How much funding have you requested in fiscal year 2003
for the Operation Day's Work program, which enables American youth to
develop projects and programs in their home communities to study the
growing interdependence between the United States and the development
needs of many foreign countries, perform community service, and
contribute to projects to help their peers in developing countries?
Answer. USAID is dedicated to the continued development of
Operation Day's Work, our youth leadership and global awareness
program. We are currently in the process of planning new initiatives to
better promote Operation Day's Work to U.S. students, and are proud to
lead this program which combines international outreach and community
service to allow U.S. teenagers to help their peers in developing
countries. USAID's Operation Day's Work project is funded internally
through the Bureau for Legislative and Public Affairs' budget. The
Operation Day's Work budget for fiscal year 2002 is $102,084.00, and we
are currently finalizing all internal funding levels for fiscal year
2003. We anticipate Operation Day's Work funding for fiscal year 2003
to be similar to current levels; however, we have begun an intensive
review of the efforts to integrate Operation Day's Work's goals,
objectives, and teaching materials into other curriculum networks
throughout the United States. This integration will be achieved in part
through greater engagement with outstanding existing education and
student leadership networks, programs, and organizations. This year the
Operation Day's Work students in participating schools have selected
Ethiopia as the developing project country.
______
Questions Submitted by Senator Tim Johnson
afghanistan reconstruction
Question. Administrator Natsios, I was pleased to see USAID
recently announced $15 million in quick impact programs for
Afghanistan. This funding, which is a part of USAID's $167 million for
Afghanistan reconstruction, will be used mainly for education, health,
and agriculture programs. Given the fact that the long-term success of
our operation in Afghanistan will be judged in large part by the
ability of the Afghan people to build a functioning civil society,
could you outline in more detail USAID's plans for Afghanistan's
reconstruction?
Answer.
--USAID's approach to reconstruction includes the following
components:
--revitalizing agriculture and other livelihood options;
--enhancing educational opportunities;
--improving health;
--strengthening Afghan institutions to ensure stability;
--A key component to strengthening Afghan institutions is building
upon the strong tradition of civil society in Afghanistan.
--USAID is implementing an $8 million program of community
development initiatives that work with local organizations to
respond to immediate needs, such as schools and health clinics
using local labor.
--USAID also strongly encourages its international implementing
organizations to partner with local Afghan organizations to
build their capacity and ensure sustainability of projects.
USAID will continue to pursue opportunities to engage and build the
capacity of Afghan civil society.
pakistan
Question. I know the USAID maintains a field mission in Pakistan.
Given President Pervez Musharraf's assistance, and the assistance of
the Pakistani people, during our operations in Afghanistan, could you
comment on ways in which USAID is helping Pakistan cope with issues
such as refugees, education, and economic development?
Answer. USAID is in the process of setting up a field mission in
Pakistan. We anticipate opening this in June or July of this year.
The USAID program focuses on three areas: education, health and
democracy.
The education program will support the Government of Pakistan's
Education Reform Strategy, and focus specifically on improving the
quality and delivery of primary education and expanding the literacy of
women and out-of-school youth in the provinces of Baluchistan and
Sindh.
The health program will help improve the health of the Pakistani
people, especially children and women in rural areas. The program will
provide a basic package of health services that can be sustained over
the long-term through partnerships between the public and private
sectors. The program will reduce morbidity and mortality in young
children and women through child survival and maternal health services.
A central feature of this effort will be to support reform nation-wide,
with the aim of improving the coverage, quality, and efficiency of
health services.
The democracy program is working in two areas: (1) strengthening
the capacity of local civil society organizations to engage the
government in dialog on key development issues; and (2) assess whether
opportunities exist to assist the political parties become more issue
focused, develop internal democratic operation principals, and build
the capacity of the emerging new leaders.
usaid hiv/aids strategy
Question. You have expressed a particularly strong commitment to
addressing global health issues, specifically HIV/AIDS. I share your
concern for this issue. Nothing can overwhelm a developing country like
the consequences of a health crisis like HIV. Many sub-Saharan Africa
countries face nearly unimaginable long-term consequences as an entire
generation is decimated by AIDS. Could you further outline your
strategy for dealing with the problem?
Answer. As you mentioned, HIV/AIDS is one of the top priorities for
the U.S. Agency for International Development. There are six parts to
our HIV/AIDS strategy: prevention, care, treatment and support, working
with children affected by AIDS, surveillance, encouraging other donors,
and engaging national leaders.
Prevention has been the cornerstone of our policy for the past 15
years. The single most important aspect of our prevention strategy is
reaching young people and changing their behavior. Young people are
often difficult to reach, but we have had some notable success working
with local organizations to craft a message that they can embrace. In
Zambia, for example, our work with 15-19 year-olds in Lusaka and other
cities has helped delay the age of sexual debut by approximately two
years. As a result, HIV/AIDS prevalence rates have dropped by nearly 50
percent in this group.
The second part of our strategy is the care, treatment, and support
of those infected by the virus. While there obviously is no cure yet,
we can help people survive longer by treating opportunistic infections
such as tuberculosis and continuing to help countries build up their
health care systems and infrastructure. Although prevention remains our
primary focus, we have been providing funding for the care and
treatment of people living with HIV/AIDS since 1987. Currently, we have
25 such projects in 14 countries. We will also announce soon,
antiretroviral treatment sites in three countries in Africa. In all
three countries, we plan to create models for provision of
antiretrovirals that governments and the private sector can expand to
the national level.
The third part of our strategy involves attending to the millions
of children who have lost parents to HIV/AIDS or are at risk of doing
so. I have been to Africa many times, and I have seen the faces of
these children. The fact is we cannot give them what they need the
most--their parents alive and well. However, we can do our best to help
them, and we are. We now have 60 projects in 22 countries that provide
these children food, shelter, clothing, school fees, counseling,
psychological support and community care.
The fourth part of our strategy is surveillance. The nature of the
HIV/AIDS pandemic is that we are always learning new things about it.
The fifth component is our ongoing effort to encourage other
governments and multi-lateral institutions to increase their financial
commitments to the fight against the pandemic. The United States
provides one-third of the world's resources to fight HIV/AIDS, four
times what the next largest donor gives. Finally, there is simply no
substitute for leadership. Whether the issue is HIV/AIDS, democracy, or
building free markets and institutions, the single most important
factor in a country's development is the quality of its leaders and
their commitment to their people's well being.
Since becoming USAID Administrator, I have streamlined our
procedures so that more of our HIV/AIDS program money goes directly to
the field and it gets there faster. We have increased the number of
priority countries we focus our resources on, strengthened our regional
programs and are taking steps to improve our accountability.
______
Questions Submitted by Senator Mitch McConnell
west bank/gaza
Question. The strategic objectives of USAID's West Bank and Gaza
assistance programs include promoting private sector economic
opportunities, access to water resources, more accountable and
responsive governance, and improved healthcare and community services.
Since 1995, there has been a ban on providing direct support to the
Palestinian Authority.
How does USAID ensure that none of the funds in the fiscal year
2003 budget--or any funds provided in prior years--benefit, directly or
indirectly, Palestinian extremists?
Anwer. Many Palestinian NGOs help implement USAID/WBG's programs
through sub-grant mechanisms with American contractors and NGO
grantees, after full and open competition. The USAID Mission, as part
of its due diligence process prior to approving sub-grants to
Palestinian organizations, requests background checks on these
organizations and their key personnel. These checks are conducted by
members of the Consulate-General and Embassy Country Teams. Only those
organizations which pass this background check process are subsequently
cleared to be awarded sub-grants.
Question. How does USAID ensure that none of the Palestinian
recipients of U.S. taxpayer funds are involved in acts of terrorism
against Israel?
Answer. Many Palestinian NGOs help implement USAID/WBG's programs
through sub-grant mechanisms with American contractors and NGO
grantees, after full and open competition. The USAID Mission, as part
of its due diligence process prior to approving sub-grants to
Palestinian organizations, requests background checks on these
organizations and their key personnel. These checks are conducted by
members of the Consulate-General and Embassy Country Teams. Only those
organizations which pass this background check process are subsequently
cleared to be awarded sub-grants.
Sixteen Palestinian non-government organizations are helping the
Mission in carrying out its health sector activities, focused mainly on
improving maternal and child health. Fifty-nine Palestinian NGOs help
implement USAID's Community Services project, upgrading, repairing or
constructing social infrastructure (schools, clinics, recreation and
community centers, playgrounds, etc.). Two Palestinian NGOs are working
to implement elements of the Mission's private sector support program
in trade promotion and micro-credit. Finally, 53 Palestinian civil
society NGOs receive sub-grants from the U.S. contractor for activities
which range from technical/vocational training and socio-economic
research to advocacy for the disabled and the promotion of citizen
awareness, participation and good governance, under the Mission's
Democracy and Governance program. All of these organizations have been
vetted through the background check process and none have been known to
carry out acts of terrorism.
Question. What programs can USAID support to encourage a viable
alternative (or the political space which may allow the emergence of a
viable alternative) to PLO Chairman Yasser Arafat?
Anwer. USAID is helping to develop the legal framework necessary to
balance the power among the Palestinian branches of government. Civil
society's role in public decision making and government oversight needs
to be increased. USAID projects fund eight organizations active in the
democratic process ($27 million, 5-year program) to help develop an
effective civil society. These advocacy groups focus on education,
citizens' interests and opinions, policy analysis, women's issues and
young leadership training. A second 5-year program will assist a wider
variety of non-governmental organizations advocating on issues such as
health, environment, and women's rights. USAID is helping to strengthen
the elected Palestinian Council to fulfill its legislative, oversight
and constituency responsibilities. USAID is assisting with the review
of key laws, including income tax ($9 million).
In addition, USAID supports more than 70 local civil society
organizations with capacity-building, training in policy analysis,
communication and leadership skills, strategic planning, management and
conflict resolution, as well as with upgrading their internal financial
systems and governance structures.
Question. What programs can USAID support to educate Palestinians
on the absolute futility of the use of violence as a means of achieving
peaceful coexistence with Israel?
Answer. When unemployment is up to 40 percent and half of the
population is currently living under the poverty rate of $2 per person
per day, it is difficult for the Palestinian people to overcome their
feelings of desperation and loss of faith in the promise of peace.
The USAID program in the West Bank and Gaza is intended to improve
the conditions under which the Palestinian people live and to provide
better social, educational and economic opportunities to help them
realize that it is better to resolve differences peacefully and without
resorting to violence.
USAID funds three separate emergency job creation programs totaling
$45 million. In addition, USAID is developing infrastructure for four
industrial parks. When fully operational they will have the capacity to
employ about 80,000 Palestinians. Employed people are less likely to
participate in street violence than do the unemployed.
USAID programs in democracy/governance are a means of promoting an
understanding of open and transparent government and the rule of law.
USAID funded programs which bring the Palestinians and Israelis
together, such as USAID water activities, the Middle East Regional
Cooperation program, and people-to-people programs, may be some of the
best ways to stop the violence on both sides.
Question. Given that by some estimates over 100,000 Palestinians
lost their jobs in Israel as a result of the intifada, how effective
are USAID micro-credit and private sector development programs in a
depressed Palestinian economy?
Anwer. The strong performance of Palestinian information technology
companies at a recent exhibition to Dubai led to an invitation to the
Palestinian Information Technology Association to open a representative
office at Dubai Internet City--the Middle Eastern hub of information
technology. This is evidence of resilience of the Palestinian private
sector, even under severely stressed conditions, and its receptivity to
USAID assistance.
USAID will continue to pioneer support for the Palestinian private
sector, while delivering much needed financial assistance to the poorer
segments of society through micro-credit operations. For example, USAID
helped to establish the Palestine Credit and Development organization
(FATEN), a non-profit, micro-finance institution, which has thus far
provided 18,800 micro-loans totaling $5.7 million to over 5,000 women.
The repayment rate has been near 99 percent, which is outstanding,
given the current economically stressed circumstances.
Other USAID-supported private sector activities include the
development of employment-generating opportunities for Palestinians by
helping establish industrial estates. USAID funded physical
infrastructure for the Gaza Industrial Estate. Phase one opened in 1998
and houses 22 businesses with 1,200 employees. USAID is also developing
infrastructure for the first Palestinian high-tech park as well as
carrying out feasibility studies for two other industrial estates. When
fully operational, the four estates will have a capacity to employ
about 80,000 people.
Finally, and with immediate relevance to the estimated over 100,000
Palestinians who have lost their jobs in Israel, USAID has an on-going
$12.3 million Emergency Employment project, with a planned further
obligation of $2.7 million in April. Further, the Mission is currently
receiving applications from American companies and non-governmental
organizations interested in implementing its new $30 million Job
Opportunities through Basic Services project, with final awards planned
for May or June.
egypt
Question. The bulk of USAID's programs in Egypt are targeted toward
trade and economic development, health care/family planning, and
education.
USAID has invested a total of $925 million in democracy and
governance programs in Egypt, and intends to obligate $8 million in
fiscal year 2002 funds for these activities.
Since 1993, Freedom House has consistently ranked Egypt ``Not
Free'' in terms of political rights and civil liberties. What concrete
results can USAID identify for the $925 million investment America has
already made in democracy and governance programs in Egypt?
Answer. The bulk of the $925 million was expended between 1983-1999
for local development and decentralization activities. These programs
achieved many useful results at the local level, in areas such as water
treatment, fire services, road construction, and community development.
However, they did not produce systemic decentralization. Since 2000,
democracy and governance programs have been reduced in scope and now
focus on commercial court improvement, NGO strengthening, and local
participation.
Some accomplishments of current activities are:
--The Administration of Justice Support Program;
--The institutionalization of computerized case initiation and
registration network in two pilot commercial courts, resulting
in strong customer satisfaction and implementation of related
training;
--32 percent of court administrators and judicial trainers who have
directly benefited from the training opportunities are women;
--The provision of commercial law training programs for 3,000 judges;
and
--Assistance resulted in a 50 percent reduction in case processing
time in the two commercial courts.
The NGO Service Center:
--$2 million has been awarded to 36 NGOs in support of civic
participation in the areas of environment, women and children's
rights, education, consumer protection, and health;
--Conducted 1,073 training opportunities for NGO representatives.
Training covered internal governance, management, advocacy, and
general topics related to civil society and development;
--In collaboration with the Mission's training program, the Center
trained an additional 175 NGO representatives;
--The Center produced resource materials for NGOs and published a
comprehensive directory of donors and assistance providers for
Egyptian NGOs.
The Collaboration for Community-Level Services Project:
--Implementation of this pilot $5M project began in February 2001.
Implements local initiatives to improve the delivery of
services through enhanced citizen participation. In one
community, the project funded a summer education program for
140 students, aged 6-14.
Question. How much of the proposed fiscal year 2003 allocation does
USAID intend to use for the promotion of democracy and governance in
Egypt, and will any funds be used to promote a more professional and
responsible press?
Answer. In fiscal year 2003, we propose to obligate $13.27 million
for democracy/governance activities. We are exploring the option of
working with Embassy/Public Affairs to develop a program to make the
Egyptian press better informed and more professional. No specific
amount of funding has been determined.
Question. Why does USAID only work with non-governmental
organizations (NGOs) that have been approved by the Egyptian
government--which gives the government de facto control over civil
society?
Answer. Under Egyptian law, USAID can only work with NGOs
registered with the Government of Egypt (GOE). In addition, the
Ministry of Social Affairs provides a security check for NGOs who have
applied for grants. USAID's grantee, Save the Children, selects and
awards the grants. The GOE does not control the type of grants, or the
training and technical assistance given to NGOs.
american university of armenia
Question. The American University of Armenia (AUA) offers unique
educational opportunities for the people of Armenia, and in the past
received an endowment from USAID. How can USAID encourage more
effective use of AUA on a regional basis, offering educational
opportunities to graduate students from Russia or other former-Soviet
Republics?
Answer. The American University is indeed a valuable resource for
the people of Armenia, and received an endowment from USAID in the
amount of $9,576,000 in 1999. AUA has found a unique niche as a
graduate institution in Armenia, supplementing the undergraduate
education provided by local universities. It offers English-language
education in business administration, political science and public
policy, international and comparative law, public health, earthquake
and industrial engineering, and English language teaching. AUA's
attention to these professional fields has strengthened and expanded
local understanding of the international environment, market economics,
public policy, and, ultimately, democratic values.
Greater awareness of AUA programs will be instrumental to its
becoming a regional educational institution. USAID will encourage the
use of AUA by students from Russia and the other former-Soviet
Republics by supporting the broader dissemination about AUA's programs
among its regional missions and their implementing agencies and
partners. In addition, USAID has strongly encouraged AUA to work
towards completing the requirements for accreditation. AUA has been
consulting with the Western Association of Schools and Colleges, which
will visit Armenia in June 2002, to further the discussion. USAID hopes
that AUA will complete the necessary requirements for accreditation by
that body, which will make the degree more attractive outside of
Armenia.
Finally, in an effort to direct the institution toward financial
sustainability, USAID has discussed marketing of AUA's services to
other USAID sponsored programs and international donors. This has
resulted in the renting of conference facilities and office space of
the University's new Business Center as well as use of local expertise
from AUA's newly established Policy Unit to produce social and economic
studies and analyses. USAID has provided recommendations on how to
strengthen the Policy Unit to expand this type of service.
nagorno-karabakh: rate of implementation
Question. The situation in Nagorno-Karabakh continues to be dire,
with assistance needed on all fronts--from education to healthcare and
infrastructure development. Are USAID's programs in Nagorno-Karabakh
running at full capacity?
Answer. While the needs of the people in Nagorno-Karabakh are
great, USAID is currently managing an appropriate, targeted
humanitarian assistance program to Nagorno-Karabakh. Since 1998 $15.8
million has been obligated for this program and USAID plans to obligate
a total of $20 million for humanitarian assistance by the end of this
year. USAID will continue to do work beyond the $20 million goal in
program areas to be identified in the future.
The current program includes activities to foster the self-reliance
and dignity of the vulnerable in Nagorno-Karabakh by providing
community access to potable water, rehabilitating selected shelters and
schools, strengthening the health care system and addressing economic
challenges by providing employment and income generation opportunities.
There is also a project in place aimed at raising the standard of
living for women and their families by providing financial services to
urban and rural women. Significant resources devoted to shelter, water,
and school infrastructure rehabilitation involved strong community
participation and some opportunities for local employment. Finally,
USAID is supporting a manual de-mining activity that will train and
equip two manual mine clearance teams to operate across Nagorno-
Karabakh and destroy unexploded ordnance there. USAID will soon solicit
interest from NGOs and PVOs to implement additional programs in the
areas of shelter rehabilitation and health as well as extend the
present manual de-mining activity and provide final funding for the
current women's microcredit activity. USAID believes that its
humanitarian assistance programs in Nagorno-Karabakh are running at
full capacity; on a per-capita basis, they are well above those in the
rest of Azerbaijan.
nagorno-karabakh: utilization of humanitarian organizations like crs
Question. Could more assistance be provided to humanitarian
organizations in Stepanakert, such as Catholic Relief Services (CRS)?
Answer. All assistance to Nagorno-Karabakh has been obligated to
humanitarian organizations. In general, humanitarian assistance has
focused on aiding people living beyond the vicinity of Stepanakert as
their needs have been recognized as greatest. However within
Stepanakert, USAID assistance has resulted in the establishment of a
central family care facility for mothers and children, the completion
of a training room in the Stepanakert Pediatric Hospital, and training
of health-care professionals. Implementing organizations of the nearly
$12 million of assistance already expended include Catholic Relief
Services, Family Care, Save the Children, United Methodist Committee on
Relief (UMCOR), International Committee of the Red Cross (ICRC), and
HALO Trust. In July 2001, USAID granted Catholic Relief Services an
additional $3 million to begin implementing a humanitarian activity
aimed at improving community access to potable water, strengthening the
health care system and addressing the economic challenges by providing
employment and income generating opportunities. This summer, USAID
plans to solicit interest from NGOs and PVOs to implement additional
programs in the areas of shelter rehabilitation and health. Incremental
funding will also be used to extend the present manual de-mining
activity by HALO Trust and provide final funding for the current
women's micro-credit activity. USAID believes that currently planned
funding levels are adequate to address the needs of this program.
nagorno-karabakh: activities that foster regional stability
Question. Given the current stalemate in peace talks over Nagorno-
Karabakh, has USAID considered implementing regional development/
training programs to bring together Armenians, Georgians, and Azeris?
(for example, training journalists from the region in Georgia)
Answer. USAID has implemented a number of programs responsive to,
and encouraged by, language on ``confidence-building measures''
included in the Foreign Operations Appropriations legislation.
In 2000, USAID supported a series of workshops for women from all
three Caucasus countries. The purpose of this activity was to increase
the role of women in economic, political, and social life; and to
promote and reinforce cooperation among women from all three countries.
Also, beginning in 2001, USAID supported production of a series of
24 interactive video links between influential individuals in
Azerbaijan and Armenia to increase mutual understanding and tolerance.
The television talk shows, entitled ``Front Line'', covered a broad
range of social, political and cultural issues. This 24-part series
included topics such as refugees' issues, the peace process, children
and war, environment, transportation, trade and conflict, joining the
Council of Europe and others. The potential audience was over five
million viewers in Armenia and Azerbaijan.
Internews/Armenia, in cooperation with the Internews programs in
Georgia and Azerbaijan, produces and distributes weekly trans-Caucasus
news exchange programs. The themes include employment, national dance
and song, volunteerism, odd professions, political parties,
transportation and roads, industry and other. Seventeen regional
television stations in Armenia broadcast the program.
In 2001, USAID funded the ``Momentum'' program for fifty
participants from local government, mass media and NGOs. The goal of
the program was to support the preparation of young decision-makers in
Armenia to participate in policy development and self-governance as
well as to develop conflict resolution and leadership skills. The
program is carried out by the Conflict Management Group which aims at
creating a regional network of new leadership capable of building
democratic infrastructure and proposing realistic alternatives to
democratic and cross border conflicts in Armenia and the Caucasus
region. In 2002, USAID plans to sponsor two more training programs on
conflict management.
USAID/Armenia also plans to support a youth exchange activity
within its civic education program implemented by Junior Achievement.
The students from Georgia, and particularly from Abkhazia, along with
students from Armenia, will participate in week-long summer camp
programs in Armenia. USAID also participates in regional workshops
focused on Local Economic Development that involves participants from
all three countries who work in this area.
In addition to the above, USAID is implementing a Regional Water
Activity which brings together middle-level civil servants to dialogue
on technical issues concerning the Kura and Aras river basins and ways
to preserve them through rational water management systems.
In the course of developing its new country development strategy
for Armenia for fiscal years 2004-2008 USAID plans to undertake
analysis in the area of conflict prevention. USAID Georgia conducted a
conflict vulnerability assessment in 2001 and has an extensive
community development program aimed at reducing tensions in Georgia.
south asia/afghanistan
Question. Has the Administration firmly determined $148 million to
be the fiscal year 2003 budget request for Afghanistan?
Answer. No. The Administration is reviewing the needs of
Afghanistan and has not yet determined total fiscal year 2003
requirements.
Question. What programs and activities, both short and long-term,
are USAID considering for Afghanistan?
Answer. We understand the importance of having a strategy that both
makes an impact in the short run and lays the foundation for
Afghanistan's long-term recovery. Our immediate high-impact activities
include the following:
--USAID is rehabilitating the Women's Ministry for its opening
ceremony on International Women's Day, March 8.
--We are printing and distributing secular textbooks--9.7 million
books, for the 1.5 million children expected to return to
school on March 23.
--We are continuing our deliveries of food aid and seeds. The first
seed deliveries began on March 14, and are marked with the
American flag and ``gift of the American people'' in Dari and
Pashto.
--We are negotiating with WFP to provide food salary supplements to
270,000 civil servants for 6 months.
--We will support the vaccination of 2.2 million children through the
UNICEF measles vaccination campaign in April.
--USAID has responded to the Interim Authority's request to support
the establishmet of a Central Bank by providing technical
assistance.
Long-term rehabilitation efforts will be guided by a strategy that
has been vetted through the interagency process. The USG effort will
focus on four areas:
--First, repatriating and resettling refugees and internally
displaced persons.
--Second, reestablishing food security. This will be done by
restoring livelihoods to create economic capacity to purchase
food and other basic needs; improving basic health; and
introducing alternative crops.
--Third, Creating conditions for stability. We must provide
alternatives to those who now benefit from conflict, terrorism,
and drug trafficking. This will be done through rehabilitating
the agriculture sector, with a focus on crop substitution, and
through developing the country's seed systems. Water
availability is critical, as are the access to credit,
livestock rehabilitation, improvement of horticulture, and mine
awareness. We will mobilize primary education and invest in
community health as well.
--Finally, we will work to rebuild Afghanistan as a nation state,
through developing governance and rule of law institutions, and
reestablishing functioning markets and improving the investment
climate, particularly for agriculture.
establishment of a free and independent media
Question. Do you agree that the establishment of a free and
independent media is critical to the long-term development of
Afghanistan and Pakistan?
Answer. Yes. Free and independent media is essential to
facilitating political participation, providing an outlet for dissident
voices, and providing civil society with an independent check on
government, all necessary for long-term peace and stability in both
Pakistan and Afghanistan. In Afghanistan, President Karzai has recently
signed a new media law providing for a free print and broadcast media
sector. USAID believes this is a first and very important step in
creating a society in Afghanistan that can resort to dialogue and
debate before conflict and fighting.
USAID has distributed 30,000 radios, provided support to VOA for 8-
9 stringers, funded production of daily Human. Info Bulletin; Radio
Kabul; media advisor for Chairman Karzai. We have committed funds to
rebuild a school to train reporters.
Question. What programs is USAID currently sponsoring that promote
responsible media in those countries?
Answer. USAID has provided Internews with a $1 million grant to
accomplish three objectives in Afghanistan in the next 8 months: (1)
training Afghan journalists to provide balanced and fair reporting; (2)
ensuring coverage and reporting on political, economic, and social
issues during the reconstruction and transitional period; and (3)
advising and and guiding the development of a media regulatory
framework that creates an environment in which independent media can
thrive.
At this time there are no USAID programs working with the media in
Pakistan.
cambodia
Question. The February 3 commune elections in Cambodia were neither
free nor fair, and over 20 opposition candidates and activists were
murdered in the run up to the polls. Despite these major challenges,
the democratic opposition led by Member of Parliament Sam Rainsy gained
seats and popular support throughout the countryside.
With parliamentary elections scheduled in Cambodia for next year,
how does USAID intend to support the democratic opposition to compete
in--and win--these polls?
Answer. USAID/Cambodia has just submitted its 3-year interim
country strategy to USAID/Washington for approval. Subject to Agency
approval, the Mission intends to provide support to all significant
political parties that forswear violence and accept competition in
democratic elections. Rationales for, and examples of, the kinds of
assistance USAID may provide include:
--If Cambodia is to deal with pressing development issues in the next
five years, the 2003 election will need to include debates over
fundamental economic growth, health, education and natural
resources management issues. USAID technical assistance could
help stimulate debate within and between parties on how to
address these key development issues and articulate a choice on
these issues for the voters so that the new government has a
popular mandate for difficult changes.
--Cambodia's political parties need to be nurtured as institutions.
USAID technical assistance could help political parties develop
forums for broader and more inclusive discussions and debates
on critical political issues over time, and to develop party
platforms.
--USAID technical assistance could help political parties (at the
national and grassroots levels) develop more effective and
internally democratic procedures and to improve their
organizational capabilities, leadership skills and message
development. This assistance could include expanding, improving
and maintaining organizational structures, increasing internal
party communications, and planning and executing party
activities (such as membership recruitment and fund raising).
USAID technical assistance could encourage and aid the
participation of women in political life. This assistance could include
working with women candidates seeking public office from all parties,
in multiparty or separate single-party programs. Assistance targeted to
female party members can help to foster their interest in issues of
special importance to women. USAID technical assistance could also
support the development of caucuses of elected women officials.
Question. The fiscal year 2003 budget request includes $17 million
for Cambodia, of which an undetermined amount of funds will be used to
``strengthen the National Assembly.'' What programs is USAID
considering for the National Assembly?
Answer. A recently completed assessment of democracy and governance
assistance options for Cambodia concluded that assistance to the
National Assembly would not yield sufficient democratic returns.
Therefore, assistance to the National Assembly is not foreseen at this
time.
Question. Does USAID believe the Assembly to be anything more than
a rubberstamp institution dominated by the ruling Cambodian People's
Party?
Answer. Yes, executive interference and the influence of patronage
politics do limit the Assembly's ability to review and monitor the
implementation of enacted laws and policies, including use of
government funds by the executive branch. But we have seen progress.
The National Assembly is more independent and assertive than it was
prior to 1998.
Question. USAID recently completed an assessment in Cambodia. What
are the findings of that assessment regarding the status of the rule of
law in Cambodia, and does USAID consider the Cambodian legal system to
be impartial and credible?
Answer. The rule of law is severely lacking in most areas. Wealth
and political power rather than justice serve as the basis on which
disputes are resolved. Human rights abuses are common. Notorious
offenses, including trafficking of women and children, undermine
fundamental rights. The structural base for rule of law is incomplete
and the laws that exist are only rarely enforced. USAID does not
consider the Cambodian legal system to be impartial and credible at
this time.
burma
Question. The primary responsibility for Burma's many ills--from
illicit drug cultivation to an explosive HIV/AIDS infection rate--is
the oppressive and illegitimate rule of the State Peace and Develoment
Council (SPDC), and the inability by the regime to evidence good
governance. Do you believe that the NLD is the legitimate government in
Burma?
Answer. The United States has full diplomatic relations with the
Government of Burma. The State Department advises that we have
downgraded our representational status in Rangoon from Ambassador to
Charge d'Affaires because of the regime's repressive policies and human
rights abuses. We strongly support the NLD and have called on the
Government to implement the results of the 1990 elections.
Question. In order to maintain accountability and transparency--and
to ensure deliverability of assistance in a lawless environment--do you
agree that international nongovernmental organizations (INGOs)
operating in Burma should regularly consult with donor countries,
including the United States?
Answer. There are a small number of INGOs operating inside Burma
with U.S. Government funding. We and they agree that regular
consultations with the U.S. Embassy in Rangoon--as well as the
Department of State in Washington, the USAID office in Bangkok that
monitors USAID-managed programs in Burma, and USAID/Washington--are
essential to maintaining adequate program oversight, monitoring
conditions in Burma that effect foreign assistance efforts, and
coordinating with other assistance programs.
Question. Will exclusion of the NLD from the consultation process
on programs conducted by INGOs in Burma marginalize the NLD?
Answer. The position of the NLD within Burma and internationally is
no way dependent on either foreign assistance provided by international
donors or on programs conducted by INGOs in Burma.
colombia/andean regional initiative
Question. Last week, President Pastrana ordered the Colombian
military to enter FARC's safe haven, bringing to an end the efforts of
his government to achieve a political solution to the country's 38-year
civil war.
FARC guerillas have repeatedly undermined the peace process. During
the past 30 days alone, FARC staged 170-armed attacks and hijacked an
aircraft carrying the president of Colombian Senate's peace commission.
--How will the collapse of the peace talks impact the ability of
USAID to carryout its alternative development and democracy
building activities in Colombia?
--Should it prove impossible to effectively and efficiently conduct
these activities in Colombia, will USAID seek to reallocate to
Colombia's neighbors, particularly Bolivia, to bolster their
alternative development activities?
Answer.
--At this point in time, the collapse of the peace talks has not
affected our ability to implement USAID programs in Colombia.
--Resumption of government control in the former ``despeje'' zone
controlled by the FARC has led to requests for us to expand
some of our democracy and human rights activities there. We are
helping the Colombian Human Rights Ombudsman's office to
establish a presence in the zone. This includes putting in
place an early warning system designed to prevent massacres and
forced displacements. We are also responding to a request from
one of the municipalities in the zone to put in place dispute
resolution services in the area through our ``casas de
justicia'' program. Both of these programs have previously been
implemented elsewhere in Colombia and have shown positive
results.
--The FARC is reported to have withdrawn at least part of its forces
from the safe haven prior to President Pastrana's announcement
and there have been clashes between FARC and AUC forces in
Putumayo. These factors have temporarily slowed implementation
of USAID's alternative development and local governance
activities in the area. As the USAID internal program
evaluation and the GAO correctly pointed out, violent conflict
and the lack of central government authority hinder the
successful implementation of Alternative Development programs
in Colombia. However, these characteristics of Putumayo have
not markedly changed since the end of the safe haven.
We expect violence will remain higher than usual in the weeks
approaching the presidential elections and change of administration in
August. We do not expect that the continuing violence will seriously
hamper our Alternative Development activities, because our field based
monitoring systems allow us to detect problems before they become
serious and take corrective action. If the situation were to
deteriorate dramatically, we would clearly adjust our program in order
to mitigate any regional instability.
usaid office of transition initiatives
Question. OTI has a proven track record of responding effectively
to global crises, be in East Timor or Afghanistan. The fiscal year 2003
request includes a $5 million increase in OTI funding (to a level of
$55 million). Is this increase sufficient, given OTI's proven ability
to get on the ground and operational in an effective and efficient
manner?
Answer. I believe that Office of Transition Initiative's (OTI)
funding level for fiscal year 2003 will be enough to allow the Office
to respond to the high priority needs for transition assistance during
the year. OTI has done an excellent job of using its resources
efficiently and concentrating them on those transition countries where
the assistance can be most effective. The Office must continue to
husband its resources carefully, even with the five million-dollar
increase in fiscal year 2003, because the need for transition
assistance is pressing in the aftermath of the September 11 tragedy.
SUBCOMMITTEE RECESS
Senator Leahy. Thank you very much, that concludes the
hearing. The subcommittee will stand in recess until 10 a.m.,
Wednesday, March 6, when we will meet in room SD-124 to hear
from Roger P. Winter, Assistant Administrator for Democracy,
Conflict and Humanitarian Assistance, Agency for International
Development.
[Whereupon, at 11:50 a.m., Tuesday, Februrary 26, the
subcommittee was recessed, to reconvene at 10 a.m., Wednesday
March 6.]
FOREIGN OPERATIONS, EXPORT FINANCING, AND RELATED PROGRAMS
APPROPRIATIONS FOR FISCAL YEAR 2003
----------
WEDNESDAY, MARCH 6, 2002
U.S. Senate,
Subcommittee of the Committee on Appropriations,
Washington, DC.
The subcommittee met at 10:07 a.m., in room SD-124, Dirksen
Senate Office Building, Hon. Patrick J. Leahy (chairman)
presiding.
Present: Senators Leahy and McConnell.
AGENCY FOR INTERNATIONAL DEVELOPMENT
STATEMENT OF ROGER P. WINTER, ASSISTANT ADMINISTRATOR
FOR DEMOCRACY, CONFLICT AND HUMANITARIAN
ASSISTANCE
OPENING STATEMENT OF SENATOR PATRICK J. LEAHY
Senator Leahy. Good morning. I am pleased that the
subcommittee is holding this hearing on State Department and
USAID democracy and human rights programs.
I especially want to thank Senator McConnell. He has been a
strong supporter of these programs, often in countries that are
not on the front pages of the papers, although the issues are
just as important, obviously, to the people who are there. It
was Senator McConnell's idea to hold today's hearing.
I have to go to an antitrust hearing in Judiciary. This
sort of thing happens when you have too many things going on at
once, but Senator McConnell will chair this hearing after I
leave.
I see Lorne Craner, the Assistant Secretary of State for
Democracy, Human Rights, and Labor. He has a lot of experience
with these issues. I think the administration made a superb
choice in putting him in this position.
We were just talking about Roger Winter's involvement with
refugee resettlement in Vermont. He is the Assistant
Administrator of USAID for Democracy, Conflict and Humanitarian
Assistance. He spent 20 years as the Executive Director of the
U.S. Committee for Refugees.
Now, USAID has requested $991 million for these activities
in fiscal year 2003. I want to make darned sure, when you are
talking nearly $1 billion, just exactly what is the definition
of democracy and human rights.
For example, the State Department was unable to tell us how
much it is requesting for fiscal year 2003 and how much it
expects to spend in fiscal year 2002 because the funding is
spread among so many different bureaus. Mr. Craner, I know you
are going to want to find this out as much as everybody else.
This subcommittee has a strong interest in supporting both
of you. I believe it is impossible for a country to prosper
economically without transparent representative government
accountable to its people, respecting the rights of freedom of
expression and association. I have discussed this with the
President and with Secretary Powell. I said we are signing
checks all over the world, or at least promissory notes, in our
fight against terrorism. I want to make sure just where it is
going, where the money is coming from, and for what purposes.
We see what happens when human rights and opportunities for
open political participation are subverted. Zimbabwe, Serbia,
Indonesia, and Haiti are some recent examples. We have been
wanting to be helpful in each of those areas, but we have seen
what happens when human rights are crushed and political
dissent is subverted, corruption flourishes, and it becomes a
thin line between where government ignores violation of human
rights and where government is involved actively in those
violations of human rights.
We have learned about how to promote democracy and human
rights partly from our own mistakes, but I am convinced we can
do better.
Now, I know these are not top priorities for either the
State Department or USAID. Congress established the State
Department's Human Rights Bureau almost 25 years ago. It has
been consistently underfunded and marginalized within the
Department. That has happened no matter which party has had the
White House.
USAID's democracy and human rights programs have to compete
with a whole lot of other priorities like disaster and food
assistance. I want to make sure, Mr. Winter, that you can
support democracy and human rights and not get distracted by
humanitarian emergencies, although sometimes I recognize they
overlap.
The State Department and USAID have different approaches to
democracy programs. In many countries there is a lack of
coordination. USAID usually takes a longer-term approach which
involves strengthening civil society and many of the same kinds
of activities as traditional development work. The State
Department sometimes is skeptical of these long-term programs.
I think of such things as just working to get both boys and
girls into schools. In the first year, it is not going to make
an awful lot of difference. In the second year, it will not.
But eventually it does. Eventually it will make a big
difference to that society. And USAID needs to recognize that
strengthening democracy is inherently political.
I am concerned that at the State Department each regional
bureau has its own funds for democracy and human rights
activities in addition to the programs Mr. Craner oversees. It
makes it hard for one bureau to determine what the other is
doing and where we are going.
prepared statement
I will put my whole statement in the record. Mr. Craner, I
want you to know that I am concerned about the certification on
human rights in Colombia. I know this is expected soon. Many
people would say expected too soon. The Colombian military has
improved its rhetoric. They have taken a few positive steps.
Some aspects of the situation are not better; it is even worse.
And I do not think any objective person could find that our
law, if you follow the letter and the spirit of the law--which
requires the Colombian military to take effective measures--has
been met.
And with that, I turn this over to Senator McConnell.
[The statement follows:]
Prepared Statement of Senator Patrick J. Leahy
Good morning. I am pleased that the Subcommittee is holding this
hearing on State Department and USAID democracy and human rights
programs, and want to especially thank Senator McConnell. He has been a
strong supporter of these programs--often in countries that are not on
the front pages of the newspapers, and it was his idea to hold today's
hearing.
I would like to welcome our two witnesses. Lorne Craner, Assistant
Secretary of State for Democracy, Human Rights, and Labor has a great
deal of experience with these issues. He is a superb choice for the
important position he holds.
Also with us is Roger Winter, Assistant Administrator of USAID for
Democracy, Conflict and Humanitarian Assistance, who came to USAID last
year after twenty years as the Executive Director of the U.S. Committee
for Refugees.
USAID has requested $991 million for these activities in fiscal
year 2003. That is a lot of money, and I am interested in knowing what
you mean by ``democracy'' and ``human rights''. I have a feeling we may
be talking about some different things.
Unfortunately, the State Department was unable to tell us how much
it is requesting for fiscal year 2003 or how much it expects to spend
in fiscal year 2002, apparently because this funding is spread among so
many different bureaus. Mr. Craner, I suspect you would like to know
this as much as we would, to find out what everyone at the State
Department is doing in your area.
This Subcommittee has a strong interest in supporting both of you.
I believe it is impossible, over the long term, for a country to
prosper economically without transparent, representative government
that is accountable to its people and respects the rights of freedom of
expression and association. We have seen what happens when human rights
and opportunities for political participation are suppressed or
subverted. Zimbabwe, Serbia, Indonesia, and Haiti are some recent
examples, where corruption flourishes and governments have ignored or
even perpetrated human rights abuses.
We have learned a lot about how to promote democracy and human
rights, partly from our mistakes. But I am convinced that we can do
better. It is no secret that these are not top priorities for either
the State Department or USAID. Congress established the State
Department's human rights bureau almost 25 years ago. To this day, this
bureau is consistently underfunded and marginalized within the
Department, regardless of which party occupies the White House.
At the same time, USAID's democracy and human rights programs are
embedded in a bureau where they must compete with a range of other
priorities, like disaster and food assistance. Mr. Winter, since those
areas are your expertise, I wonder if you are going to be dealing with
humanitarian emergencies, instead of democracy and human rights.
We are told that the State Department and USAID have different
approaches to democracy programs, and that in many countries there is a
lack of coordination. USAID usually takes a longer-term approach, which
involves strengthening civil society and many of the same kinds of
activities as traditional development work, while the State Department
is more focused on political parties and elections, and has often been
skeptical of longer-term, less-direct approaches.
There have been times where these two approaches have been
successfully integrated, but we hear that your efforts have often
ignored each other or acted at cross-purposes.
USAID needs to recognize that strengthening democracy is inherently
political, and that it often involves actively supporting key
opposition figures who are committed to--and often risk their lives
for--democratic reform and human rights. It is also important for the
State Department to understand that it can be a mistake to put too much
emphasis on individuals, rather than on building democratic
institutions.
I am also concerned that at the State Department each regional
bureau has its own funds for democracy and human rights activities--in
addition to the programs that Mr. Craner oversees. This makes it hard
for one bureau to determine what others are doing, and it makes
budgeting and oversight difficult for the Congress. As I mentioned, the
State Department can't even tell us how much it is spending.
I unfortunately have two other hearings, including one in the
Judiciary Committee, that I am also supposed to be at so I cannot stay
here long. But I do have several questions that I will submit in
writing, and I will review the transcript of the hearing.
My hope is that today's discussion will shed light on what works,
what does not work, and, if you had additional resources, how you would
use them. Senator McConnell and I strongly support these programs and
want to be sure that you are getting the help you need.
One final word: Mr. Craner, I want you to know that I am very
concerned about the certification on human rights in Colombia. I know
this is expected soon--too soon in my opinion. The Colombian military
has improved its rhetoric, and they have taken a few positive steps.
But overall, the situation has not improved, and in some aspects it is
worse. I do not believe that any objective person could find that our
law, which requires the Colombian military to take ``effective''
measures, has been met. I hope you will use your position to ensure
that the law is implemented as we intended.
OPENING STATEMENT OF SENATOR MITCH MC CONNELL
Senator McConnell. I thank my friend, the chairman. He is
my second favorite person who has ever chaired this
subcommittee.
A good and dear friend, and I thank him today for allowing
us to have this hearing. Thank you very much, Pat.
Let me begin my remarks with a quote from a man who brought
down the Iron Curtain and consigned communism to the ash heap
of history. Ronald Reagan, who embraced the power of ideas and
freedom, said in his 1981 Inaugural Address that ``no weapon in
the arsenals of the world is so formidable as the will and
moral courage of free men and women. Let that be understood by
those who practice terrorism and prey upon their neighbors.''
As the Soviet Union and now the Taliban and al-Qaeda
network in Afghanistan found out, no truer words have ever been
spoken. Where America's crusade for freedom empowered the
oppressed to discard the decaying Soviet system in the 1980's,
no less an effort must be waged to undermine and eliminate the
breeding grounds for today's evil empire, which are terrorists
and their violent cells.
While bombs and bullets are already slaying the foot
soldiers of extremism, the global advancement of democracy and
the rule of law will help guarantee that no port is safe for
terrorists.
The attacks of 9/11 make this morning's hearing on
democracy and human rights programs even more imperative and
timely. These activities are not relics of the cold war, as
some have asserted, but sound investments against new threats
and conflicts.
The debate is no longer whether America should sponsor
democracy and human rights programs, but where these activities
are most urgently needed, how they are most effectively
conducted, and just how much more we should spend on the
promotion of democracy and human rights abroad.
While the Muslim world may be the most obvious target for
these programs, we should not discount those countries that are
either closed or in transition. Ongoing democracy and human
rights activities should be increased throughout Asia,
including in Cambodia and Indonesia, and renewed commitments
should be made to the champions of democracy in Burma ably led
by Aung San Suu Kyi and the National League for Democracy. In
the Caucuses, special emphasis should be placed on immediately
instituting programs that will blunt the sharp sting of
political succession in Georgia and Azerbaijan. In the former
Soviet Union, political and legal reforms in Russia and Ukraine
must remain a priority for the United States. And in Africa,
human rights and political reform activities should be
bolstered in Nigeria and Zimbabwe, two countries that are again
at the brink of failed-state status.
The conduct of these programs is decentralized and diffuse.
Within the State Department, the Bureau for Democracy, Human
Rights, and Labor, DRL, operates with a $13 million budget that
is supplemented by activities funded by various regional
bureaus and USAID. It is unclear to me who has day-to-day
responsibility for the democracy and human rights portfolio or
how consistency in programming is maintained. I would offer
that centralizing the authority and oversight of activities
would increase the efficiency of these programs, thus
maximizing the effectiveness of every human rights and
democracy dollar we spend.
With the exception of the annual request for DRL's Human
rights and Democracy Fund, the total amount America spends on
democracy and human rights programs in a single fiscal year
remains somewhat elusive. For example, I have seen estimates
that place the fiscal year 2001 expenditures on democracy
programs anywhere from $390 million to $500 million. USAID's
fiscal year 2003 request of $960 million for democracy and
governance programs is an improvement, but in 1 year alone,
Americans will spend twice as much on chewing gum than we do on
advancing democracy abroad.
Let me close by commending President Bush for his steadfast
leadership during these uncertain times. He is right to affirm,
as he so strongly did during the State of the Union address,
that ``America will always stand firm for non-negotiable
demands for human dignity, the rule of law, limits on the power
of the state, respect for women, private property, free speech,
equal justice and religious tolerance. America will take the
side of brave men and women who advocate these values around
the world.''
I want to thank you very much, gentlemen, for being here.
What I would like to do is ask Mr. Winter and Mr. Craner to
summarize their remarks, I guess Mr. Winter going first. And we
will put your full statements in the record.
SUMMARY STATEMENT OF HON. ROGER P. WINTER
Mr. Winter. Thank you, Mr. Chairman.
The Bureau for Democracy, Conflict, and Humanitarian
Assistance is a new pillar bureau within USAID. The Office of
Democracy and Governance has been moved into the former Bureau
for Humanitarian Response.
With respect to our budget request for the coming fiscal
year, we have requested an increase of $100 million for
democracy programs alone. That is an indication, along with the
fact that the Bureau's name starts with the word ``democracy'',
of the priority that we attach to this. I have been in the
humanitarian assistance field for a long time. I see what the
lack of democracy does to actual people on the ground all over
the world.
USAID's democracy programs operate within a framework which
is developed by the Department of State in consultation with us
and with others. USAID is the primary implementer of that
policy, but the way the program operates, it is in fact a
partnership.
In the interest of time, as suggested by your staff, I
would like to focus on what we are looking to do differently
after September 11.
First of all, we do realize the need for new approaches.
Within the mix of things, Afghanistan of course is unique and
we have, as you understand, a huge commitment on the
humanitarian and rehabilitation side.
But on the democracy and governance side, we are currently
supporting a good chunk of the civil service sector within the
transitional government to assure that governance actually
delivers the basics to the Afghan people. We are committed to
strengthening the institutions created by the Bonn Accords and
are doing so, for example, with the Commission on Justice and
Human Rights that the new government has set up. We are
prepared to assist in a whole variety of ways with respect to
the upcoming Loya Jirga to assure that it establishes
government institutions that are legitimate, inclusive, and
effective.
We are, within the region, shifting our resources to assist
states on the front line in the war on terrorism. We are
opening missions in Pakistan and Afghanistan. We are beginning
large democracy programs in both of those countries. We are
investing more for democracy in the Central Asian republics. We
are initiating a new democracy program in India. We are adding
in a substantial amount of additional resources for a democracy
program in the Philippines. And these are only the beginning.
Within the administration there are not finalized
commitments yet for funding needs for these kinds of programs.
This is, in some senses of the word, a work in progress.
Besides increasing resources, we are also changing, to some
degree, our program emphasis, particularly in the Central Asian
republics. We are more overtly addressing assistance to human
rights activists. Our programs in Pakistan and the Philippines
will focus heavily on building state capacity so that these
partner governments in the war on terrorism can deliver to
their civilians.
In Central Asia specifically, as soon as the war on
terrorism began, some thought our continued commitment to
democracy there would be compromised in exchange for support in
the terrorism war. The answer from the highest levels of this
administration was, no, it will not be compromised, and
increasingly our dollars are focused on independent media and
human rights activists. Our resorces are not focused on
propping up government ministry programs.
We are cutting back in some places too. We are cutting back
in Kazakhstan and Kyrgyzstan because we have been supporting
programs that have proven to be unproductive, but we are
continuing and expanding our programs with human rights
activists and independent media.
In Uzbekistan, we are expanding, by several million
dollars, our overt support for legitimate political dissent.
In Pakistan, we are very focused on taking steps to ensure
that the parliamentary elections in the fall are well
implemented. We are assisting universities and think tanks to
provide quality public policy guidance to the Pakistan
Government in the areas of fighting corruption and devolving
the over-centralized government to lower levels. We are seeking
an additional $8 million to implement the democracy and
governance program through the new USAID mission that we are
setting up in Pakistan.
And there will be more. It is a very clear priority for us.
It is a very clear priority for me personally.
It will be very difficult. As you may be familiar, a couple
of weeks ago, there was a Gallup Poll released. It was taken
regarding 12 largely Muslim countries.
Senator McConnell. Yes. What did you make of that? Could it
be that bad?
Mr. Winter. Well, I do not know how to argue statistically
with Gallup.
Senator McConnell. Are these people living in a totally
different world?
Mr. Winter. To some degree, it appears they do. It can be
for a whole variety of reasons.
Senator McConnell. Is it largely because every one of them
has a state-owned media that has portrayed an entirely
different picture of reality?
Mr. Winter. I think the issue of independent media is a big
piece of it. It is why it is a priority for us.
The figures were shocking. In terms of favorable view of
the Unite States, 53 percent of the population said they did
not have a favorable view of the United States. The lowest of
those was Pakistan. Only 5 percent of those interviewed said
that they had a positive view of the United States. In terms of
whether our military action in Afghanistan was justified, 77
percent of those polled said no, only 9 percent yes.
prepared statement
We have a big task before us. We have started to change
course in terms of increasing resources to the States that we
are concerned with here in terms of shifting the emphasis of
what we do, but frankly, this is a work in progress. While it
is a priority for us, there is a lot more in this story that
needs to unfold over the next few months.
Thank you.
[The statement follows:]
Prepared Statement of Roger Winter
Mr. Chairman, members of the Subcommittee, thank you for inviting
me here today to discuss the U.S. Agency for International
Development's democracy programs budget for fiscal year 2003. While I
have appeared before the Senate on a number of occasions, this is my
first opportunity to do so since becoming USAID's Assistant
Administrator early last month.
While new to USAID, I have worked in international humanitarian
assistance for several decades, particularly in Africa. I have seen
first-hand what happens when democracy is absent and have devoted
considerable time to considering how USAID's democracy efforts can
contribute to our national interests and to those of the developing
countries we seek to benefit.
The Bush Administration has a clear commitment to democracy. It is
the one political system which, when effectively instituted, best
fosters healthy political and economic competition and inhibits
destructive conflict. Peace is the condition that makes economic and
social progress possible, and democracy is the system that best assures
that peace.
As you are aware, our Administrator, Andrew Natsios, has
reorganized portions of USAID. One aspect of this has been the creation
of the Bureau of Democracy, Conflict and Humanitarian Assistance, a
process that is now well under way. That democracy is the first
functional area in this new ``pillar'' bureau's name demonstrates the
priority we ascribe to our democracy efforts. I am very grateful to
President Bush, Administrator Natsios, and the Senate for giving me the
opportunity to head this bureau and serve my country.
Helping other countries move toward democracy adds directly to our
national security and contributes substantially to international
stability. As we know, democracies seldom threaten their neighbors or
turn their armies against their own citizens. They serve their people,
not render them subservient. They seek trade, not territory; talent,
not privilege; freedom, not tyranny.
But even in this country, it has taken generations--and plenty of
rough and tumble--to refine our institutions and expand our democratic
practices to where they are today. We should not be surprised,
therefore, that other nations less blessed than ours have struggled
along the way. Indeed, many have yet to taste the benefits of
democratic government, while others have just begun to do so.
It is natural that the United States is the most important nation
in the world when it comes to promoting democracy, the country others
look to for ideas, leadership and guidance. USAID was one of the first
international development agencies to bring democracy programs to the
field, and we continue our pioneering work today throughout the
developing world. We should have no illusions, though, that there are
easy answers to the challenges we face. Encouraging democracy and good
governance is slow, difficult work, even under the best of
circumstances.
As the President said during his State of the Union address this
January: ``America will lead by defending liberty and justice, because
they are right and true and unchanging for all people everywhere. No
nation owns these aspirations, and no nation is exempt from them. We
have no intention of imposing our culture, but America will always
stand firm for the non-negotiable demands of human dignity.''
This is what Secretary Powell had in mind when he appeared before
the Senate Budget Committee last month and said: ``Over the past year,
I believe the broader tapestry of our foreign policy has become clear--
to encourage the spread of democracy and market economies and to bring
more nations to the understanding that the power of the individual is
the power that counts.''
The demands of human dignity and the need to encourage the spread
of democracy that the President and the Secretary of State refer to is
what motivates our agency, informs our programs, and guides our
policies.
The need to do this more effectively was the reason that USAID
Administrator Andrew Natsios created the Bureau of Democracy, Conflict,
and Humanitarian Assistance (DCHA). As he told this Subcommittee last
May: ``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
violent internal conflicts that lead to destabilizing and costly
refugee flows, anarchy and failed states, and the spread of disease.''
Our democracy and governance (DG) budget for fiscal year 2003 is
directed at doing precisely that. In doing so, we coordinate our budget
plans closely with the State Department. For this fiscal year, USAID is
asking for $963.6 million for our DG programs. This includes $199.9
million in Development Assistance funds; $251.1 million in Economic
Support Funds; $276.7 million for Eastern Europe and the Baltics; and
$235.9 million in FREEDOM Support Act funds for the republics of the
former Soviet Union.
Using these ESF and DA accounts, we plan to devote $125.5 million
on democracy and governance programs for Africa; $178.6 million for
Asia and the Near East; and $117.2 for Latin America and the Caribbean
in fiscal year 2003. Another $34.7 million for democracy programs will
come from our Andean Regional Initiative funds.
Approximately $240 million of these funds will be passed through to
other U.S. Government agencies, such as the Departments of State,
Treasury, and Justice for their democracy assistance programs.
We are also asking for $27.8 million for our human rights programs
for the coming fiscal year. The promotion and protection of human
rights are essential to our democracy-promotion efforts, just as
democracy is essential to the realization of fundamental human rights.
Of course, our democracy and governance programs contain many human
rights elements within them, and we work closely with our colleagues in
the State Department to ensure they are well-conceived and coordinated
through the ESF process.
Our human rights program consists of three separate elements, each
of which helps people with genuine and compelling needs: the Victims of
Torture Fund, the Leahy War Victims Fund, and the Trafficking in Women
and Children program. As you will recall, Mr. Chairman, we were pleased
to announce a one million dollar contribution to the Afghan fund that
bears your name when you visited our agency along with the First Lady
and Chairman Karzai this January. For fiscal year 2003, we are asking
for $10 million for this War Victims Fund.
In the coming fiscal year, we plan to expand our recent DG efforts
in three specific areas: strengthening democratic political parties;
fighting corruption, and developing independent media. As scholars like
Tom Carrothers have pointed out, there is a lot more to democracy than
just holding elections. Indeed, elections are often used to hide other,
deep-seated problems in a country's political system.
Currently, we devote only about three percent of our DG budget to
political party building. This needs to change. In the coming fiscal
year, we expect to put significantly more emphasis on helping political
parties become more democratic--and less dependent on individual
personalities--as well as broaden their political platforms and forge
stronger links between local and national levels. To help us do this,
we have awarded a major, multi-year grant to the Consortium for
Elections and Political Processes, which includes the International
Republican Institute (IRI), the National Democratic Institute (NDI),
and the International Foundation for Electoral Systems (IFES).
Nothing undermines a nation's natural vitality and limits its
development the way corruption does. Fighting corruption, therefore,
has become one of USAID's top priorities, one that we are giving
increasing attention to throughout the Agency. As our part of that,
DCHA will strengthen its anti-corruption programs in fiscal year 2003,
furthering our efforts in public awareness and institutional
transparency. One of our key partners in this effort is Transparency
International.
A third area where we intend to increase our support is for
independent media. For years we have provided technical assistance to
national legislatures and media associations to help them craft better
enabling regulations for the media. We also fund a number of training
programs for journalists in emerging or partially democratic countries.
Some of these have had excellent results, such as the one at Western
Kentucky University which recently completed training a group of
Indonesian radio journalists.
Democracy is an old form of government, dating from Periclean
Athens, but managing democracy-promotion programs is something rather
new. For all that scholars and political scientists have spent
considerable time defining democracy and detailing its various aspects
and paradigms, they have provided little insight into how countries
like ours can actually assist non-democratic societies to change their
way of governing. There is no single answer, of course, no policy or
approach that works with every nation. Indeed, each case is different;
each country has it own particularities.
But we have learned some important lessons over time. One is the
need to evaluate programs very carefully, to analyze what works and
what does not, and to determine the particular conditions that
influence a country's behavior. USAID is pioneering this approach in
the field of democracy promotion. Beginning in 1997, we developed a
strategic assessment methodology that helps our field missions
determine the constraints to a country's democracy efforts and the best
approach to overcoming them. Thus far, we have completed assessments in
26 countries, about a third of the countries in which we have democracy
and governance programs.
We have also begun a series of in-depth studies to determine what
effect our rule of law, governance, and civil society programs have had
on countries in various stages of transition. The first, now completed,
looked at three countries where democracy has begun to take root in
recent years: Bolivia, South Africa and Bulgaria. What we found in
these countries, not surprisingly, was that the political will to make
positive change was of critical importance. When that was present, our
most effective programs were those that helped governments draft laws
and regulations and reform legal and electoral institutions.
In fiscal year 2002, we are continuing these studies in Ghana,
Guatemala, and Croatia, and in fiscal year 2003 we will examine our
programs' impact in three other states with less democratic
governments.
There are always more countries that need help than we have staff
and resources to help them with. So we must make difficult choices with
our democracy and governance programs, as with every portfolio that
USAID handles. However much the needs of other countries press upon us,
our highest priority is--and must always be--to serve the U.S. national
interest. This means, in the first instance, harmonizing our programs
and priorities with those of the President and Secretary of State.
Beyond that, we look to countries that need our assistance the most,
and to those where positive change seems most possible.
The events since September 11 have naturally given new emphasis to
our relations with Central and South Asia. In response to these events,
we have begun to shift resources toward the region, increasing our
funding for democracy and governance programs in Pakistan, India, the
Philippines and Uzbekistan. While the specifics are yet to be worked
out, we expect our DG programs in the ``Front Line'' states will
intensify in the coming year.
As Andrew Natsios noted when he met with the Subcommittee last
week, our mission in Afghanistan is back in business for the first time
since 1979. Already, DCHA has been providing assistance to the Interim
Government, supplying badly needed textbooks and supporting the Women's
Ministry. We have also set aside $5 million to help implement the Bonn
Accords, and we stand ready to help the Karzai government as the
country prepares for the Loya Jirga later this year.
In Pakistan, where Secretary Powell recently announced the
reopening of the USAID mission, we are supporting the national
legislative elections scheduled for the fall.
In the past year and half, USAID's democracy and governance
programs have proven their effectiveness in several countries. In
Serbia, for example, our USAID grantees worked with the opposition
parties, playing a critical role in bringing them together so that they
could combine their efforts and work together to defeat Slobodan
Milosevic.
When scandal forced Peruvian President Fujimori to leave office, we
mobilized a team within two weeks that helped pave the way for the
honest and transparent elections that put Alberto Toledo in office last
spring.
But not every country we work in affords us such opportunities.
In Cambodia, for example, we are just finalizing the strategic
assessment of our DG programs. Obviously, as last month's elections
demonstrate, the Cambodian government still has a long way to go before
it can be considered genuinely democratic.
We are also looking very closely at this weekend's presidential
elections in Zimbabwe. We have had democracy programs there for quite
some time, supported through the ESF account we manage with the State
Department. Some of our funds have supported the Southern Africa
Development Community-Parliamentary Forum, which has some 40 monitors
on the ground there now. As you may know, the government of Zimbabwe
did not accredit the election observers USAID intended to finance.
Given the climate in the country, we remain very concerned about how
free and fair this election will be.
We are also concerned about the situation in Madagascar, where we
are prepared to help make a second round of voting credible--if we have
the opportunity. Another country where we have democratic concerns is
Venezuela, and we expect to send a DG assessment team from our Offices
of Transition Initiatives and Democracy and Governance there later this
month to see what might be done.
I have just returned from Burundi, Mr. Chairman, and would like to
make a few comments on it. I have been involved in Africa's Great Lakes
region for more than 20 years. When I visited Burundi last August, I
was somewhat skeptical that the peace process could be implemented
according to the Arusha Accords, which were signed in August 2000. Now,
however, I believe there is a real opportunity that needs to be seized.
While the transition process is quite complicated, it does provide a
great deal of attention to strengthening the non-executive functions of
government, including the creation of a senate, which is just in its
infancy. Having seen the progress made over the last few months, I am
convinced this is a process we should serious assist.
On November 1, Burundi began its 36-month transition. For the first
half of that period, the administration is being led by incumbent
President Pierre Buyoya and a new Vice President, Dometian Ndayizeye,
who recently returned from exile. For the second 18-month period
President Buyoya and Vice President Ndayizeye will switch positions and
the country will prepare for provincial and national elections.
In my view, Buyoya and Ndayizeye--and many others who have returned
from exile--are risking their lives to help Burundi move forward toward
more democratic, accountable governance.
We at USAID are committed to helping them succeed. DCHA's Office of
Transition Initiatives has already begun a series of new initiatives,
our Office of Democracy and Governance is soon to deploy, and our
Offices of Foreign Disaster Assistance and Food for Peace continue to
make huge contributions to national stability and family survival. At
the same time, our Office of Private Voluntary Cooperation is
determining how best it can help Burundian NGOs. Also USAID's Africa
Bureau and regional support office in Nairobi are working to help
Burundi on a number of fronts, including HIV/AIDS.
Together, all these initiatives can have a positive impact on
Burundi. They are surely needed. The suffering and poverty of the
people of that country are excruciating. For everyone's sake, that
needs to change. Last year, for example, the United States spent $106
million in humanitarian assistance to support the victims of Burundi's
past failures. While such expenditures are an expression of our
country's deep humanitarian values, it must be our goal to help the
people of Burundi move away from that and toward more lasting solutions
to their problems. Only internal peace can do that, and only a genuine
transition to democracy can consolidate that peace.
In conclusion, Mr. Chairman, I would like to express my
appreciation for the support you and the Subcommittee have shown our
democracy programs and assure you of my willingness to work with you
and your staff on any issues that may concern you.
Thank you.
DEPARTMENT OF STATE
STATEMENT OF HON. LORNE W. CRANER, ASSISTANT SECRETARY,
BUREAU FOR DEMOCRACY, HUMAN RIGHTS AND
LABOR
Mr. Craner. Mr. Chairman, Senator McConnell, thank you for
the opportunity to testify before you today. Your interest in
this topic is welcome, but it comes to me as no surprise. You
have both had a longstanding and intense interest in human
rights and democracy issues.
Senator Leahy, I have to tell you that I run across the
Leahy law regularly, and it is an effective instrument for
human rights.
Senator Leahy. We just want to make sure it is being
enforced, and if I am not here to ask questions, I have sent a
number of letters to our embassy in Israel asking if it is
being properly applied in our aid there. I keep getting a
``we'll get back to you.'' I realize with anthrax, sometimes
our mail has been delayed, but now we have a fax machine in the
office. So, if you might look into that. We will give you more
details on it.
Mr. Craner. Why do I not get copies and take them back and
make sure you get a reply?
Senator Leahy. Thank you.
Also, of course, my concern on Colombia.
Mr. Craner. Yes.
Senator Leahy. Notwithstanding my very strong support of
President Pastrana, who I think has taken heroic measures, and
my concern about the outrageous conduct of FARC and the
killings that they have been involved in.
But thank you. I do appreciate your comment. I only mention
that because I know I am going to have to go back to Judiciary,
and I just wanted you to have it in the back of your mind. But
we will give you those letters.
Mr. Craner. Okay. I will also tell you on Colombia, there
is a great understanding within the administration, not just in
my office, that the certification has to be credible or it will
not go anywhere.
And, Senator McConnell, I have to tell you you can hardly
go to Ukraine or parts of Asia without hearing your name
regularly, but I also want to remind you of something you may
have forgotten. About 5 or 6 years ago----
Senator McConnell. That is in vain or?
Mr. Craner. No, always good.
About 5 or 6 years ago, you went to the Senate floor to
argue that we ought to be engaged inside of China in trying to
move forward reforms there, and it was not a message that went
over well at the time. I think in retrospect, a couple of us
were way ahead of our time. But that is something that is now
regarded as mainstream and something that should be carried
forth, and you deserve a lot of credit for bringing up the idea
first here in the Senate. So, I want to thank you both.
Roger has already outlined, and I think very truthfully,
how this administration regards democracy and human rights in
the context of the fight against terrorism. That commitment to
it is a bipartisan commitment I think that goes back many, many
years.
As we have been engaged in this process, I think we have
learned a number of lessons about how to help these
transitions, and we in the administration believe it is time to
examine the lessons and find out if we can do it better than we
are doing it. Along with the NSC and OMB, my office DRL is
currently conducting a top-to-bottom review of all democracy
programs to ensure that they advance, in the most useful and
cost effective manner, national interests and subsequent policy
decisions.
We are looking through two prisms to do this. One is that
it is no longer the case, the concern whether human rights and
democracy is an American issue or a British issue or an
Australian issue. When you have Mongolia and Mali and Mexico
becoming democratic, it is increasingly, number one, an
international norm, but number two, an international
expectation. It is no longer the case that we go into foreign
governments alone. We have a great deal of support when we do
it, and we think we need to take that into consideration.
The second issue we want to take into consideration is the
goals and methods that we have been using or that we ought to
use in the future. I would characterize those broadly as
electoral processes, political party assistance. But I think a
bigger issue is how to help nations consolidate their
democratic gains and how to integrate the economic support that
we give to these countries with the reforms that we expect from
them, beginning with rule of law issues, and we are going to be
trying to get at that better than we have.
While the interagency review is going on, my office, as
Senator Leahy noted, has been using this $13 million pot of
funding we have. We changed the priorities. We are trying to
focus on countries of great national interest to the United
States, and obviously at the moment that is enlarged to include
many more countries in the Muslim world. I will not go through
some of the projects we have been working on, but we are trying
to be innovative and cutting edge in terms of what we are doing
to fund things that others might not have funded in the past
for various reasons.
prepared statement
I just want to conclude, as I did in my swearing in, by
noting that support for democracy building and human rights is
a very unpartisan issue in these United States. It makes my job
much easier, much more enjoyable. We are at our best when we
are united. Often the best example, when I was working at IRI,
in a foreign country was for us to walk in with NDI, and it
would stun people that the Democrats and Republicans could work
together, but we said in our country politics is not a winner-
take-all system, that the losing party still survives when they
lose power.
I do look forward to working with both of you and your
staffs in this review and in the future. Thank you.
[The statement follows:]
Prepared Statement of Hon. Lorne W. Craner
Mr. Chairman, Senator McConnell, thank you for the opportunity to
testify before you today on the U.S. Government's efforts to assist the
development of democracy abroad. Your interest in the topic is welcome,
but comes as no surprise; many Members of this Subcommittee have a
long-standing and intense interest in democracy building overseas. For
that, many in the United States and in other countries are grateful.
For the United States, indeed for the whole world, 2001 was a year
in which the importance of universal human rights was brought sharply
into focus by global terrorism. On September 11, 2001 the world
changed. As President Bush declared in his State of the Union Address,
``In a single instant, we realized that this will be a decisive decade
in the history of liberty, that we've been called to a unique role in
human events. Rarely has the world faced a choice more clear or
consequential. . . . We choose freedom and the dignity of every life.''
This choice reflects both U.S. values and the universality of human
rights that have steadily gained international acceptance over the past
fifty years.
As the United States and our international partners commit
resources to the fight against terrorism, we do so for all those who
respect and yearn for human rights and democracy. Our fight against
terrorism is part of a larger fight for democracy. In the words of
President Bush, ``America will lead by defending liberty and justice
because they are right and true and unchanging for all people
everywhere. No nation owns these aspirations, and no nation is exempt
from them. We have no intention of imposing our culture. But America
will always stand firm for the non-negotiable demands of human dignity:
the rule of law, limits on the power of the state, respect for women,
private property, free speech, equal justice and religious tolerance.''
This world of democracy, opportunity, and stability is a world in which
terrorism cannot thrive.
This commitment to human rights and democracy around the globe
continues a bipartisan tradition that goes back to our nation's
founding, but which was considerably invigorated in the last quarter
century. Added weight to the moral dimension of American foreign policy
was given first in the 1970s by President Carter on human rights, and
then in the 1980s by President Reagan on democracy building.
In the intervening years, we have witnessed great international
changes, mainly through the transition of states to more democratic
systems. Even in the late 1980s, few among us could have imagined the
collapse of the Soviet Union and East Bloc, the end of apartheid in
South Africa, a string of increasingly democratic nations throughout
East Asia, and the fact that our own hemisphere would, almost without
exception, contain only democratically elected leaders. Moreover, a
year ago no one could have foreseen the dramatic changes in
Afghanistan, a country that suffered under one of the most oppressive
regimes in the world, the Taliban. While early signs are encouraging--
women choosing whether to wear the traditional burqa when in public,
young girls returning to school for the first time in years--the Afghan
people have taken only a few steps of a long, painful journey that will
take a very long time. They will need considerable help along the way.
Fortunately, after almost two decades, we have learned much about
how to assist such transitions. The Administration believes it is time
to examine those lessons, and if needed, update, refine and institute
policies on democracy building. Along with the National Security
Council and the Office of Management and Budget, my office is currently
carrying out a top-to-bottom review of our democracy programs to ensure
that they advance, in the most useful and cost effective manner, our
national interests and subsequent policy decisions. I would like to
share with you some of the areas we are examining, and I would like to
work with members of Congress to get input.
In undertaking the review, two prisms were taken into account. The
first deals with the increasingly international nature of democracy
building. The second concerns our goals in pursuing such work.
First, democracy is now accepted as an international norm; it is no
longer the case that the United States acts alone, or with one or two
other countries, in assisting democratic transitions in other nations.
Since the 1990s, other established democracies have joined with us in
pursuing, through policy and assistance, the advancement of democratic
processes abroad. Over the past few years, nations that understood the
costs of dictatorship best--nations such as South Africa, South Korea,
Poland, and Chile, to name a few--began offering their experiences to
those struggling for democracy and liberty. Indeed, in some regions, it
is a dictatorship's neighbors, more than the United States, that will
determine the outcome of a particular nation's transition to democracy.
Additional evidence of the beginning of a set of international
norms on democracy comes from efforts such as Romania's United Nations
General Assembly resolution on promoting and consolidating democracy,
which further describes the elements of democratic governance including
civilian control of the military, independence of the judiciary and the
right to due process. Further evidence of the beginning of a set of
international norms on democracy also comes from the Community of
Democracies enterprise. We are working to strengthen these efforts,
which illustrate that, in every region of the globe, democracy is now
considered to be a desirable norm and not an American or ``Western''
import. Our review is looking at ways to encourage these developments,
while keeping in mind their diverse nature.
A second, broader issue in our review concerns America's goals and
methods in pursuing democracy programs.
Electoral processes are an important component of democratic
transitions. Indeed, in the early days of democracy assistance, they
were regarded as the key indicator of a nation's political transition.
Unfortunately, experience shows many authoritarian rulers believe that
a poor electoral environment for political participation can be
overcome in the eyes of some observers by a well-run election day. This
is what some fear this weekend in Zimbabwe. In reality, an open
electoral environment and willingness to hand over power in an orderly
and prompt manner can go far to ameliorate what may be a less than
perfect election day. South Africa in 1993 is a good example. We need
to look at these experiences and our programs to determine when, and
how best, to assist elections as a milestone in transitions to
democracy.
We are also examining our approach to political party assistance.
Political parties can be a prime intermediary between the governed and
the government; lessening the potential for conflict in a country. To
do that, they need to sink roots within the population. An elected,
democratically-oriented party also has the potential, more than most
other institutions, to hasten a country's transition. Our assistance to
such parties is therefore invaluable, but our policies regarding such
aid have undergone wide swings in the past ten years. In the early
1990s, for example, we provided material assistance to particular
parties in targeted countries, but in the mid-1990s, U.S. non-
governmental organizations were being asked by some in government to
aid communist and ultra-nationalist parties in former Soviet bloc
nations. Somewhere in between lies a policy that adheres to legislative
restrictions and assists those who want to advance democracy in their
countries.
We also need to determine how best to help nations trying to
consolidate democratic gains achieved through the ballot box. As we are
learning around the world, political freedom alone is often not enough.
In an era of globalization, we are examining our programs to determine
how to ensure a good marriage between efforts to enhance political
freedom and efforts--bilateral and otherwise--to encourage economic
liberalization. In some nations, winners in the democratic competition
are many of the same forces that long resisted political and economic
liberalization. In others, genuine political reformers don't have the
strength or tools to stand up to entrenched economic elites. In such
cases, the expected economic benefits of democratization do not
materialize in an equitable manner. As a result, citizens become
disenchanted with so-called ``democracy'' and yearn for days of
economic stability, even if those days were far from ideal. In some
cases, they are often willing to give up a large measure of political
freedom to stabilize their economic situation.
The challenge of the first quarter century of democracy building
was elections. While expanding our knowledge and honing our tools to
assist electoral processes, we must, in the second quarter century,
emphasize the challenge of good governance, including transparency,
individual liberty, freedom from corruption, and management of
transition economies--through the rule of law, a free media,
accountable political leadership, labor rights, and a vibrant civil
society. As Secretary Powell said, ``the answer to the problems of
democracy is more democracy.'' When democratic electoral processes are
buttressed by a culture of democracy and a functioning economy, we can
consider our job in transitional countries done.
We are also examining whether and how nations that are just
beginning to open up economically or politically can be assisted. In
most cases that means working through the existing system, trying to
catalyze a dynamic that has been instituted by the present rulers. A
good example currently exists in the Persian Gulf, where a number of
nations with undemocratic political systems have embarked on efforts to
expand legislative and electoral authority. Such efforts may, in the
end, be unsuccessful, but supporting them for relatively low amounts
could pay big dividends in the long run.
Keeping in mind our desire to extend democracy in a universal
manner, but not having unlimited funds available to us, we also need to
have a solid framework for focusing our resources. One obvious criteria
must be the importance of the country to America's national interests,
but we also need to be realistic about the conditions required to have
a desired effect. Key to such considerations will be the understanding
of the reality that our assistance is unlikely, in and of itself, to
create the changes we seek. In countries where the local dynamic is
already moving towards democracy our assistance can help leverage the
cause in the right direction. The will for change at a national level
is therefore pivital. It makes little sense, for example, to spend
millions to train judges in a country where the ruler will not tolerate
an increasingly independent judiciary, or fund programs in countries
with ample private resources but without the will to pursue democratic
goals.
hrdf
While this interagency review is ongoing, we in DRL have tried to
take these issues into account to make our Human Rights and Democracy
Fund (HRDF) more responsive to the needs of developing democracies and
a more effective agent of change. Created by Congress, HRDF grants are
provided by DRL to support democracy and human rights projects
throughout the world.
In the past few months, we have reoriented the criteria used to
make HRDF grants. It doesn't make sense to sprinkle these grants among
80-plus countries of the world. Rather, our approach is to focus on
countries of U.S. national interest and identify the most pressing
human rights and/or democracy issues in those countries, taking into
account such sources as the annual Country Reports on Human Rights
Practices, the annual Report on International Religious Freedom, input
from the desks, our embassies, experts in the area, NGOs, visits in-
country by DRL staff, and so forth. We then formulate innovative,
cutting-edge projects that address these issues.
We seek programs or ideas that often have not been tried before in
that country or region, or ones that have had merit but may have been
deemed too risky by other USG entities. We then coordinate these ideas
closely with USAID, the regional bureaus, and posts to increase their
effectiveness. HRDF projects must not, for example, duplicate or simply
add to efforts by USAID or other offices. In order to maintain a
continuous flow of fresh ideas and innovative approaches, we won't use
HRDF to fund programs for longer than 2-3 years. At that point, if they
are successful, we will spin off responsibility to other entities.
In the short months since I have been on board, we have gotten a
number of cutting-edge projects approved. One is to establish an
independent printing press in Kyrgyzstan, an idea that had bounced
around in one form or another for 3-4 years but could never get any
funding because it was deemed too risky and not ``commercially
viable.'' This will be an extremely difficult program to implement,
given resistance from the Kyrgyz government, logistics, and the
daunting challenge of setting up a completely new organization with a
sound board and management team. However, this is exactly the kind of
idea DRL wants to support, since independent media in Kyrgyzstan has
been under enormous pressure in recent years, yet there still exists a
degree of latitude in Kyrgyzstan that does not exist in, for example,
Uzbekistan.
We have also developed a project to shed new light on the human
rights conditions in North Korea. We are funding a program to support
South Korean NGOs in their efforts to improve reporting on the human
rights situation in North Korea. While the famine justifiably receives
much attention, the repressive conditions under which the North Korean
people live receives much less. This groundbreaking project will fill
an important information gap in the United States and internationally.
It will provide NGOs with the means to research and publish accurate,
credible reporting on the human rights conditions in North Korea.
In Colombia, the foundation of its long-standing and deeply rooted
democracy has been shaken by 38 years of internal conflict.
Paramilitary and guerrilla violence continues unabated and these groups
are increasingly targeting judicial sector personnel. Although
protection programs have been established to provide assistance to many
vulnerable populations in Colombia, the immediate needs of justice
sector personnel have not been addressed. In response, we are creating
a temporary relocation program for threatened judicial personnel, which
will provide specialized training to enhance their ability to perform
their jobs when they return to Colombia. This program not only serves
the immediate need for judicial protection, it also serves the long-
term goal of fortifying rule of law, thereby strengthening Colombian
democracy.
These are just a few examples of how we are making democracy and
human rights programming much more dynamic.
As I said at the beginning, we will be looking to Congress for
ideas and thoughts as we undertake this review of democracy programs
and continue to provide grants through HRDF. Many of you were here when
such programs began in the 1980s, you have traveled to many of these
countries, and have much experience and institutional knowledge from
which we would benefit.
I want to conclude by noting, as I did at my swearing in ceremony
last June, that democracy building has historically been a bipartisan
issue. During my days at the International Republican Institute, I
worked closely with my counterpart at the National Democratic
Institute. Americans are best when we are united; often, the best
example we can offer overseas is that politics is not a winner-take-all
sport. I look forward to working with Members and their staffs from
both sides of the aisle in promoting democracy overseas, for there is
much to do.
Thank you. I look forward to answering your questions.
Senator Leahy. I am going to submit my questions for the
record. Mr. Craner, I know you have bureaucratic battles but
protecting human rights is an important goal, and we will
continue to support you.
You are fortunate to have the support of Senator McConnell,
who is one of the most effective Members of the Senate, and has
given this a lot more than lip service. He has given a lot of
strong support to these human rights efforts.
It is all yours, Mitch.
Senator McConnell [presiding]. Thank you, Mr. Chairman.
I want to go back to the poll a minute. Have you all had
any contact with Gallup, or are you just like all the rest of
us? You read the results.
Mr. Winter. I just read it.
Senator McConnell. Somebody ought to--maybe I will--suggest
that Gallup take surveys in other parts of the world where
there are emerging democracies with at least a somewhat free
press. I gather that would certainly apply in a place like
Mexico and Mongolia. Do they have a relatively free press
there, Lorne?
Mr. Craner. A relatively free press and a relatively
positive attitude towards the United States.
Senator McConnell. I would be interested in seeing whether
everybody hates us and everybody is deluded into the notion
that somehow 9/11--did not one of the questions suggest that
even they thought this was some kind of Jewish conspiracy or
something?
Mr. Craner. Well, again, that is partly a lack of free
media.
Senator McConnell. Well, that is my point. It would be
interesting if Gallup would survey kind of emerging parts of
the world where there is at least some democracy, some evolving
democracy, and a relatively free press and compare the results.
Then I think it would be easier to attribute this to what we
think is the problem, which is not the fact that it is Muslim
countries, but the fact that these are undemocratic regimes
with state-controlled press that have pandered to the worst
elements. We think that is the reason these results came out
the way they did, but it seems to me we could use some
comparative data to more safely reach that conclusion, and I
would think Gallup would be interested in doing something like
that.
I would suggest to the staff sitting behind me that we
ought to suggest that to them to maybe try to narrow down how
this could possibly be. And if it is more a result of
undemocratic regimes and state-controlled press, then I think I
would feel a little bit better about it, but I do not think we
really know.
I believe in surveys. People who are in our line of work
take surveys a lot. We plan campaigns by them. They have an
enormous impact on public policy debate around here, and my
assumption is that these polls were accurate. I have no reason
to question the accuracy of it, but I would sure like to know
more, if there is some correlation between inability to choose
your own leaders and inability to have varying points of view
expressed in the media and these results.
So, I am going to suggest that my staff and you all
conspire as to how we might encourage Gallup or other reputable
polling organizations to give us another look at the under-
developed world or at least the emerging democratic world and
see if there might not be a better result. Maybe there is not.
I do not know, but it sure would be interesting to find out, do
you not think?
Mr. Craner. I think I would be interested. I think also the
Secretary and Charlotte Beers would be very interested and very
helpful on this.
Senator McConnell. Yes. Let us come up with an effort to
encourage somebody independent of our Government. I am not
talking about some kind of Government activity here. We need an
independent, reputable--Gallup would be fine as far as I am
concerned. We need to test public opinion and get some
comparisons here.
Mr. Winter. I would not be surprised if the professional
polling firms are not looking to do this because the numbers
were so shocking.
Senator McConnell. Well, I do not think we ought to kid
ourselves. I would like to find out how they feel.
Mr. Winter. Absolutely.
Senator McConnell. Do not delude yourself. I think we ought
to find out if it is that bad elsewhere. I hope it is not, and
it certainly does not change your view of American policy. I
think we ought to continue to do what we are doing regardless
of what the polls are. I do not think it ought to determine our
policy, but it sure would be nice to know what kind of an
audience we have got out there.
Mr. Craner. And how to address it.
Senator McConnell. And how to address it.
Mr. Winter. Yes, and what do we do about it.
Senator McConnell. Yes. Any other thoughts on that subject
from either of you?
Mr. Craner. No. I think that is a good topic. My assumption
is that it is a lack of a free media and all, but I think there
is a sense in some countries that we could do better in terms
of supporting democratic alternatives and I think we ought to
be doing that. But I think this will be useful proof of that.
Senator McConnell. Mr. Winter, you mentioned USAID's
emphasis on supporting human rights activists and independent
media. Is political party development part of your strategy?
Mr. Winter. Yes.
Senator McConnell. What are you doing in that area?
Mr. Winter. It has not been as big a part of our strategy
as I think it needs to be, but our long-term aim is to ensure
that political parties effectively aggregate the interests of
their voters and then effectively present them into the public
governance marketplace.
When we do do this, we coordinate our efforts with the
State Department because it is very political in character, and
we want to make sure our efforts are not a surprise to anybody.
We are also careful to do this kind of activity within
legislative parameters and we have constructed a policy for our
field staff as to precisely how we ought to engage the
political parties. Our preference, when we can do it, is to do
it with democratically oriented parties of a variety of
perspectives so we are not just linking ourselves to a single
party, but sometimes there is only a single democratically
oriented party for us to work with.
My personal view--and in conversations with the staff who
administer this activity through our Office of Democracy and
Governance--is that we need to expand our engagement with
political parties and be more direct about it.
Senator Leahy. Do you have any observations on that point?
Mr. Craner. I would very much support that. I saw a figure
somewhere between 3 and 7 percent of AID's democracy spending
is for party assistance, and this was at the beginning of last
year. The spending on civil society I think was close to half.
As somebody who has done this for a while, I think civil
society is very, very important both in the lead up to a
transition and cementing a transition. But if one is hoping for
a transition in a country, depending on civil society, it will
take a long time, whereas a democratic political party can come
into office and begin to change the political landscape
immediately. So, I think it is worth investing in both in a
balanced way.
Senator McConnell. Mr. Craner, you mentioned that State and
NSC are conducting a review of these programs. Can a part of
the review include consultations with us?
Mr. Craner. Yes. I think it is important again because as
Senator Leahy noted, the concern with human rights and
democracy really arose from Congress, and it is important we
all be working together on that. Absolutely.
Senator McConnell. What programs can the United States
support to encourage a viable alternative, or the political
space which may allow the emergence of a viable alternative, to
PLO Chairman Arafat?
Mr. Craner. I think you would not know it looking at
television, but there is in my experience a broad swath of
people in the West Bank and Gaza who, like people everywhere
else, would like to be left alone, would like to be able to
make enough money to feed their kids, would like not to be
living in a corrupt environment. And I think those people, up
till now, have been quiet for one reason or another, but I
think we can encourage them. Over the years, when I worked at
IRI, we were working with some of those people who would like
to be living in a much better economic and political
environment, and they do not think they are getting it right
now.
Mr. Winter. For your information, Mr. Chairman, our
commitments to West Bank and Gaza are amongst our largest
commitments. I do not have the breakdown with me of precisely
how those funds are used programmatically and what the split
is. I will be happy to provide it for you, but it is a
significant commitment for us.
Senator McConnell. It just popped into my head. I should
have mentioned it earlier. Was Turkey one of the countries in
the Gallup poll? I do not think it was, was it?
Voice. Yes, sir, it was.
Senator McConnell. It was? Did they have a breakdown of
Turkey only?
Mr. Craner. They did and I believe it was the most
positively inclined towards the United States of all the
countries.
Senator McConnell. A country with political parties and at
least some modicum of a free press could have an impact on
attitude.
Mr. Craner. And in the last couple of years, partly because
they want to get into the EU, is at least passing laws that I
think ultimately will pay off in terms of increased democracy
and human rights.
Senator McConnell. Is it U.S. policy to consult on a
continuous basis with Suu Kyi and the NLD prior to the
provision of any assistance inside Burma?
Mr. Craner. We have insisted on that, that we go and talk
to her about particular program ideas.
Senator McConnell. Does this policy extend to any
international non-governmental organizations operating inside
Burma?
Mr. Craner. I do not know the answer to that.
Senator McConnell. Speaking of Burma, has anything good
happened there? Any ray of hope anywhere?
Mr. Craner. I think we all had a lot more hope a few months
or a year ago than we do today. There have been far fewer
political prisoners released than we would have hoped. There is
a lot less freedom than I think many people had hoped in terms
of political activity, and so I do not see that it is getting
near to where a lot of us had hoped it would be by now.
Senator McConnell. Given the importance of China, in terms
of U.S. national security and trade interests, should
additional resources be provided to activities to promote
political reforms and the rule of law in China? And if so, what
additional programs can be conducted?
Mr. Craner. There was this year a congressional earmark on
this topic, of which my office I think will be receiving $5
million.
Senator McConnell. That was my earmark, I am reminded.
One of those dreadful earmarks that all administrations
hate.
Mr. Craner. Of course.
There is a capacity within China to be able to absorb
advice from the outside. In the supplemental request that has
been submitted, my office was put down for $4 million, of which
I would use at least $1 million of those $4 million to put into
China. I think there is that much capacity.
In all countries you have an issue of absorptive capacity,
how much more could you use, but over time, I expect the
absorptive capacity in China to rise greatly, especially with
WTO reform. And when I talk about rule of law in China, to me
that does not just mean commercial law reform. It means changes
in the political or human rights side of things that often are
necessitated by economic reform, but they are much more
directly relevant to everyday life for somebody in China.
Senator McConnell. What democracy and human rights programs
is the administration considering for Pakistan, and do
assistance programs include political party programs?
Mr. Winter. Well, as I mentioned earlier, in Pakistan we
are opening a mission for the first time in a while. We are
focused very heavily on the parliamentary elections that are
scheduled for the fall. We have made grants directly to a
number of think tanks and universities for the purposes of
being able to supply the leaders of that government more
comprehensive and useful guidance with respect to fighting
corruption and devolving government power to a decentralized
sort of framework rather than the over-centralized framework
that it has now.
Specifically, we have asked for $8 million. Keep in mind we
did not have a mission in Pakistan, and so largely we have not
been actively engaged in Pakistan. What we are doing now is we
are building up a new capacity and a substantial program.
Senator McConnell. I am just going to warn you I may have
to take a brief recess here to do one matter before we wrap up.
I apologize for that if I end up having to do it.
There are going to be a number of questions that I would
like to submit for the record to get your response to.
I think what I want to say here is that the brevity of this
hearing should not be construed to mean a lack of interest in
the subject. I am deeply interested in what you are up to. This
just happened to have come on a bad day for Senator Leahy and
myself. He is deeply interested in it as well I know. I can
speak for him on that.
I think we are probably not spending nearly as much as we
should in this area if we are going to help bring about real
change for the better. It is not just a question of evolving
capitalism. That is certainly important too because you cannot
have one without the other, but the democracy side has got to
evolve as well.
I think of Jordan as an example where there seems to be an
incipient democracy. And then what is the little country on the
Arabian peninsula that seems to be in the process of opening
up?
Mr. Craner. Bahrain.
Senator McConnell. Maybe those will be countries to monitor
very closely to see if our surmise here, that the evolution of
democracy and capitalism changes attitudes not only about us
but just about things in general. It cannot just be an Islamic
problem. It cannot be. People are people. I do not care where
they live. Maybe those would be two good countries to see if
opening up produces a change in view.
Mr. Craner. I am hoping to get out there in April to
Bahrain, Qatar, and Oman, and possibly Yemen, all of which are
certainly by no means perfect democracies, but all of which are
making the effort.
Senator McConnell. Right. Well, you never have a perfect
democracy to begin with. These things always evolve.
Any final thoughts from either one of you?
Mr. Craner. No. I think Roger and I have spent a good bit
of time together, as I have with Andrew, and I think we are
both committed to working more closely and coordinating more
closely than has been the case in the past.
Senator McConnell. Well, I know Pat and I are both
intensely interested in what you are doing and want to be
supportive. If you will answer the rest of the questions that
he has and I have for the record, we would appreciate it.
We will be particularly be discussing with you further an
effort to try to get some other polling data out there that
might provide an interesting correlation to what we just were
shocked to learn about the attitudes toward America in the
Islamic world.
Thank you both very much.
Mr. Winter. Thank you.
Mr. Craner. Thank you.
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 Agency for International Development for
response subsequent to the hearing:]
Questions Submitted by Senator Patrick J. Leahy
state--usaid coordination
Question. Mr. Winter, some experts on U.S. democracy programs feel
that there is a lack of coordination between USAID and the State
Department in many countries. Let me read to you a quote from an
article in [the] Foreign Service Journal:
``More often than not, the two agencies do not work so well
together. USAID frequently ends up working by itself on democracy aid
programs with State officials paying little attention to activities
they regard as marginal. Or the two organizations work at cross-
purposes, sending conflicting signals in the host country.''
Do you agree with this statement? What steps are the State
Department and USAID taking to improve coordination on democracy
programs?
Answer. Senator Leahy, as you noted in your opening statement, in
some circumstances USAID and the State Department have differing
approaches to democracy assistance. However, I don't believe that this
problem is widespread. When it exists, we are addressing it. We work
very closely with our colleagues at the State Department to coordinate
democracy programs. We do this to make sure that U.S. democracy
assistance goes to countries that are of high foreign policy
importance, where assistance is needed, and where it can make a real
difference. We also work closely with our State Department colleagues
in Washington and in U.S. embassies overseas to ensure that democracy
programs are focused on overcoming the biggest constraints to
democratic reform or consolidation.
This cooperation takes many forms. First, we work in partnership
with the State Department's Bureau for Democracy, Human Rights, and
Labor (DRL) and the regional bureaus at the State Department regarding
the allocation and implementation of democracy programs funded by
Economic Support Funds (ESF). There are two ways that ESF is allocated
for democracy assistance programs. USAID and State closely coordinate
in both instances.
First, some ESF is directly allocated to USAID missions as part of
the normal congressional budget presentation. ESF, even when allocated
directly to a mission, is provided to USAID for a specific purpose, so
it is never simply added to other sources of mission funding. Upon
approval from Congress, this money is programmed by the mission.
However, the State Department is very closely involved with the
decision-making process about which countries should receive this ESF,
what amount they should receive, and for what purpose. This model--ESF
allocated directly to missions--is most common in the Latin America and
the Caribbean and Asia and Near East regions. For example, directly
allocated ESF funds democracy programs in Mexico, Indonesia, West Bank
and Gaza, and Egypt.
Second, there are also ``pots'' of democracy ESF that are allocated
out of Washington and are either implemented by USAID missions, the
Democracy and Governance Office when the money is used in a country
without a USAID mission (non-presence countries), or directly by the
State Department. Examples of these ESF pots include the Middle East
Democracy Fund, the Africa Regional Democracy Fund and DRL's Human
Rights and Democracy Fund. The allocation process for these funds is
slightly more complicated. The relevant State Department bureau drafts
an allocation memo to the Deputy Secretary requesting his approval for
specific democracy projects to be funded out of these pots. These
allocation memos are cleared by the USAID Democracy and Governance (DG)
Office and the relevant USAID regional bureau (as well as many offices
within State). When USAID will implement the program to be funded by
ESF, USAID and State coordinate prior to the drafting of each
allocation memo to ensure that there is consensus about which countries
will be awarded ESF and for what purpose.
Additional facts about USAID's role in implementing ESF-funded
democracy programs:
--USAID implements about 90 percent of these programs. If the program
is in a non-presence country, the DG office in the Bureau for
Democracy, Conflict, and Humanitarian Assistance (DCHA) will
often manage it. However, most ESF-funded democracy programs
are managed by USAID missions. Programs not implemented by
USAID are managed directly by the relevant State Department
bureau, sent to Public Diplomacy, or transferred to other
organizations such as the National Endowment for Democracy.
--For fiscal year 2003, the request for the ESF democracy pots is as
follows:
[In millions of dollars]
DRL............................................................... 12
Africa............................................................ 32
East Asia......................................................... 5
Near East......................................................... 5
South Asia........................................................ 2
State and USAID also coordinate in formal and informal interagency
bodies. Coordination takes place at two levels: (1) at the field level,
and (2) in Washington, as part of an inter-agency process.
--At the field level, there is generally good coordination between
embassies and USAID missions on democracy programs and
objectives.
--The embassy comments on and ultimately clears the USAID strategy.
--Ambassadors often pay close personal attention to the portions
related to democracy programs.
--USAID provides input to the Mission Performance Plans (MPPs)
submitted by embassies to the State Department.
--The USAID strategies and the MPPs will reflect the common
democracy-related objectives.
--Many embassies also have interagency committees that meet on
democracy sector programs and issues, or specific
subsectors, such as security and rule of law. USAID sits on
these committees, often times as the chair.
--Additionally, there is usually frequent coordination on specific
items, such as the drafting of the country human rights
report or elections monitoring.
--USAID democracy officers generally have on-going close informal
relationships with the political office and often with the
ambassador.
--In Washington, USAID and State participate in Policy Coordination
Committees (PCC) that are established under the direction of
the National Security Council staff. These PCCs cover key
regions and high-profile countries, as well as topics of
concern that cut across several agencies.
--The Policy Coordination Committee on Democracy is chaired by the
NSC and includes representatives from various federal
agencies, including several offices from State and USAID.
Their work thus far has focused on the future direction of
the Community of Democracies initiative, an international
body made up of governmental officials that is aimed at
providing mutual support and policy coordination among the
world's democratic nations.
--Also of interest to the committee is the work of the Policy
Coordination Committee on Anti-Corruption, Transparency and
Accountability that coordinates our diplomatic, assistance,
and law enforcement agencies working on these topics.
--For particular regions or countries, the State Department's DRL
Bureau and DCHA work with our respective USAID and State
Department regional bureaus to make sure that key democracy
concerns are raised in the PCCs and other inter-agency
venues.
--USAID and State's Bureau for International Narcotics and Legal
Affairs (INL) coordinate very closely on programs and
policies related to police and the rule of law.
definition of democracy programs
Question. Mr. Winter, I am concerned that some in the
Administration take an overly broad view of what is considered a
``democracy and governance'' or ``human rights'' activity. I am aware
of instances where funds intended for democracy and governance programs
have ended up supporting activities that most of us would consider
development assistance or other types of programs. One example of this
is the Great Lakes Justice Initiative where funds intended to for
activities such as support of court systems, training of judicial
personnel, and promoting public awareness of laws, were put towards
building schools and wells.
While there may be a good reason to build schools and wells in this
part of the world, do you regard these types of activities as democracy
and governance programs? What measures are in place to ensure that
these funds are used for their intended purpose and are not redirected
into other types of programs under a broad definition of democracy and
governance program?
Answer. Senator Leahy, I would certainly agree that programs
dealing with schools and wells should not be categorized as democracy
programs. Democracy and governance programs should support the Agency
goal of ``strengthened democracy and good governance.'' Within that
goal, there are four separate objectives.
These objectives are:
1. Strengthened Rule of Law and Respect for Human Rights. Programs
under this objective include activities that support legal and judicial
institutions, administration of justice, and judicial independence. In
addition, programs that strengthen the awareness of, and adherence to,
internationally recognized human rights fall under this objective.
2. More Genuine and Competitive Political Processes. Programs under
this objective include political party support such as activities that
strengthen the organizational capacity and professionalism of political
parties so they can better represent their constituencies. In addition,
support to electoral administration bodies, voter education, and
election monitoring fall under this objective.
3. Increased Development of Politically Active Civil Society.
Activities under this objective aim to build the capacity of civic
groups, professional associations and other non-governmental advocacy
groups that build public demand for democracy and good governance.
Assistance to independent media and trade unions also falls under this
objective.
4. More Transparent and Accountable Government Institutions.
Programs under this objective include USAID's anti-corruption efforts,
assistance to local government and decentralization, legislative
strengthening, civil-military relations, and assisting governments
implement policy reforms.
Finally, USAID recognizes that the unique context of each country
means that an indirect approach is sometimes needed to promote
democracy. So, support of service delivery non-governmental
organizations (NGOs), for example, may in fact be an optimal way to
support democracies in some societies. For example, while Nigeria was
still governed by a military dictatorship, our small democracy program
focused on supporting women's health organizations. These groups, among
other activities, were trying to hold the government accountable for
actually delivering services (in this case healthcare) rather than
diverting public resources to corruption or waste.
In Rwanda, as part of the Great Lakes Justice Initiative, democracy
and governance funds were used to build schools and wells, as you
pointed out. Through local community development committees, citizens
were allowed to determine their own priority needs for the use of
government resources, a first step in institutionalizing democracy in
Rwanda. This type of community development activity is generally
limited to post-conflict or failed state environments.
Question. Mr. Winter, in your prepared statement, you mention the
Leahy War Victims Fund, and funding for Victims of Torture, as examples
of USAID's human rights programs. These strike me as humanitarian
programs, not programs that promote respect for human rights, which is
what we are talking about here. Do you disagree?
Answer. As part of USAID's fiscal year 2002 budget, it was
determined that we should combine the Leahy War Victims Fund and the
Victims of Torture program under a single budgetary category, ``Human
Rights.'' Certainly there is an important humanitarian objective to
these programs. It seems to me that they also highlight why respect for
human rights is so important. The nature of these two programs has not
changed, nor has our commitment to them. Likewise, we remain committed
to human rights in the stricter sense of the term. Therefore, in
addition to these two projects, USAID also implements programs in all
parts of the world that promote and enforce respect for human rights.
These programs fall under our democracy and governance portfolio, and
we will consider your concern about the future categorization of these
funds.
usaid management of democracy programs
Question. Mr. Winter, the nature of democracy programs is unlike
many other USAID activities--such as health care, agriculture, and
education--as they often need increased flexibility to be effective and
do not fit standard USAID evaluation mechanisms. For years, democracy
programs were forced into the same bureaucratic management structures
as traditional forms of U.S. assistance. While the creation of the
Office of Transition Initiatives was a step in the right direction, I
am told that USAID's bureaucratic structure still presents obstacles
for effectively running these programs.
Am I wrong? Has this Administration taken any steps to reform
procedures that would allow for more rapid, flexible management of
democracy programs?
Answer. Administrator Andrew Natsios recognized the importance of
radically reforming USAID's management and operating procedures. He has
given these reforms top priority, assigning some of USAID's most senior
managers to the effort. In fact, we are all committed to addressing
these shortcomings. We are working on seven key management reforms,
three of which will allow for more rapid and flexible management of our
democracy programs. These three reforms are:
--Human Resources.--USAID is expanding the number of direct-hire
democracy officers at an accelerated rate. This will mean that
career foreign service officers will directly manage a higher
proportion of our mission-based democracy objectives. This will
allow USAID to better maintain our institutional capacity to
design and implement successful democracy programs.
--Procurement.--The backlog in our procurement system is the single
largest obstacle to more rapid and flexible democracy programs.
Too often we miss windows of opportunity while we are waiting
for grants or contracts to be processed. USAID is taking steps
to automate parts of our procurement system as well as to
outsource selected functions currently carried out by USAID
staff. In addition, our Democracy and Governance Office has
innovative cooperative agreements for rule of law, elections
and political processes, and civil society that allow USAID
missions to get programs on the ground much more rapidly than
had previously been the case.
--Strategic Budgeting.--USAID also needs to ensure that we are able
to more flexibly allocate money to address targets of
opportunity. It does no good to have highly trained staff or an
efficient procurement system if there is no money to implement
badly needed democracy programs. By merging the strategy and
budget functions, USAID will now be better able to shift
resources to high priority countries that are in need of
additional democracy funds.
usaid funding breakdown
Question. Mr. Winter, USAID has requested $991 million for
democracy, governance, and human rights programs, which is a
substantial amount of money. How much of this funding falls into the
very narrow category of strengthening and reforming judicial and
legislative branches of government? How much funding does USAID provide
to groups that are dedicated to promoting respect for human rights or
prosecuting those responsible for human rights violations?
Answer. Senator Leahy, unfortunately USAID does not track its
budget requests in this manner. However, it is possible to answer this
question by looking at budgets from prior years. For example, in fiscal
year 2000 USAID obligated approximately $17 million for human rights
programs, $75.5 million for strengthening and reforming judicial
systems and $15 million for legislative strengthening. These figures do
not include programs funded out of the ESF regional democracy pots, so
the total of each of these categories is actually somewhat higher. To
give you a broader sense of the breakdown of democracy spending, in
fiscal year 2001 22 percent of democracy assistance went toward rule of
law programs, 7 percent for elections and political parties, 47 percent
for civil society, and 24 percent for good governance. Support for
human rights organizations is captured in both our rule of law and
civil society programs. Likewise, legislative programs fall under both
elections and political processes and good governance.
zimbabwe
Question. Mr. Winter, in Zimbabwe, President Mugabe has done
virtually everything in his power to prevent the opposition party--the
Movement for Democratic Change--from participating in free and fair
elections. I want to commend our USAID mission in Zimbabwe, whose
efforts have been smart, aggressive, and well targeted. However, this
is an instance where democracy-building activities require more than
well-run USAID programs on the ground.
While the Administration has taken strong action, it is clear that
the United States and the EU need to press President Mbeki of South
Africa and the 14-country Southern African Development Community to
take strong action concerning Zimbabwe.
Has USAID urged the State Department or others in the
Administration to put pressure on the South African community to act on
the crisis in Zimbabwe? Does USAID consider it part of its
responsibilities to ask the Administration to press for high-level
diplomacy, when it furthers important program goals in the field of
democracy and human rights?
Answer. Senator Leahy, let me start by providing some details of
how USAID and the State Department have played a very constructive role
in supporting the Southern Africa community's ability to act on the
crisis in Zimbabwe. State Department and USAID collaborated to provide
funding to a South Africa Development Community Parliamentary Forum
(SADC-PF) election observation delegation to Zimbabwe's presidential
election. The delegation consisted of some 70 members drawn from 12 of
the 14 parliaments of SADC. The report issued by SADC-PF was critical
of the elections, concluding that ``the climate of insecurity obtaining
in Zimbabwe since the 2000 parliamentary elections was such that the
electoral process could not be said to adequately comply with the Norms
and Standards for Elections in the SADC region.''
SADC-PF recently developed these norms and standards for observing
elections in Southern Africa, standards that adhere to international
norms for election observation and are an important step in developing
the institutional capacity of SADC to effectively monitor elections in
the region. USAID, through the National Democratic Institute (NDI),
provided the support to develop the standards, and also has supported
the SADC-PF in observing elections in Mozambique, Mauritius, Tanzania,
Zambia and Zimbabwe. With their statement on the Zimbabwe election,
SADC-PF has demonstrated that it has evolved, with USAID support, into
an important regional institution that can promote and protect
fundamental democratic standards and processes. That is not to say that
the United States shouldn't continue to work with the international
community to ensure that all important actors are speaking with one
voice in strong condemnation of the elections in Zimbabwe.
Addressing your broader question about USAID's role within the
Administration for pressing for high-level diplomatic engagement on
democracy and governance-related issues. I want to assure you that we
do this constantly. This is done both in Washington, where there are
frequent interagency dialogues regarding democracy promotion in
specific countries or regions, as well as in the field where embassies
often convene formal democracy working groups to address this very
subject. Administrator Natsios, as well as Assistant Administrators
like me, are active advocates at all levels of the State Department,
and with the NSC, for supporting democracy and human rights, including
in Zimbabwe. In all cases like this, while USAID may advocate a
specific position, the State Department ultimately sets United States
foreign policy.
______
Questions Submitted by Senator Mitch McConnell
budget breakdown
Question. Mr. Winter, what is the breakdown of USAID's democracy
and governance budget (i.e., what are the funding levels for activities
that promote civil society, rule of law, political processes, and
political party development)?
Answer. Senator McConnell, in fiscal year 2001 the breakdown of
USAID's democracy and governance budget was as follows:
--Rule of Law: $139 million (22 percent of the total democracy
budget);
--Elections and Political Parties: $46 million (7 percent);
--Civil Society: $293 million (47 percent); and
--Governance: $149 Million (24 percent); for a
--Total fiscal year 2001 Democracy Budget: $627 million.
Please note that these totals do not include some elements of the
democracy budget, such as regional ESF pots, where this breakdown is
not yet available. So the overall total, as well as funding in each
area, is likely to be higher. However, the relative breakdown of the
democracy budget is unlikely to change significantly.
definition of a democracy program
Question. Mr. Winter, what is USAID's definition of a ``democracy
program?''
Answer. Democracy and governance programs support the Agency goal
of ``Strengthen Democracy and Good Governance.'' Within that goal,
there are four separate Agency objectives. These objectives are:
1. Strengthened Rule of Law and Respect for Human Rights. Programs
under this objective include activities that support legal and judicial
institutions, administration of justice, and judicial independence. In
addition, programs that strengthen the awareness of, and adherence to,
internationally recognized human rights fall under this objective.
2. More Genuine and Competitive Political Processes. Programs under
this objective include political party support such as activities that
strengthen the organizational capacity and professionalism of political
parties so they can better represent their constituencies. In addition,
support to electoral administration bodies, voter education, and
election monitoring fall under this objective.
3. Increased Development of Politically Active Civil Society.
Activities under this objective aim to build the capacity of civic
groups, professional associations and other non-governmental advocacy
groups that build public demand for democracy and good governance.
Assistance to independent media and trade unions also falls under this
objective.
4. More Transparent and Accountable Government Institutions.
Programs under this objective include USAID's anti-corruption efforts,
assistance to local government and decentralization, legislative
strengthening, civil-military relations, and assisting governments
implement policy reforms.
role of political party development
Question. Mr. Winter, how important are political party development
programs to achieving meaningful political reform?
Answer. Senator McConnell, one of the obstacles to political reform
plaguing the countries in which USAID works is the growing problem of
bad governance. USAID believes that parties can play a significant role
in facilitating political consensus for reform among the electorate and
key decision-makers. To improve the quality of democratic governance,
it is important that parties offer citizens a range of choices, offer
accountability to voters, and translate the popular will into policies
and programs. Political party assistance should not be focused solely
on building a stronger party or parties for electoral gain. It also
needs to tackle the much harder task of creating a competitive and
representative political system, internal party democracy, and the
articulation and aggregation of competing positions that give voters a
choice.
In addition, USAID implements legislative party programs in
countries such as Russia, Nigeria and Mongolia which aim to foster the
effective participation of democratic political parties in government,
inter-party relations in legislatures, and to advance specific
legislative reforms (e.g., electoral law reform and constitutional
frameworks). How we state the goal of party assistance is key to
developing the right kinds of programs and to ensuring adequate
emphasis on the ``supply side'' of democratic governance. The goal of
political party development programs is to create a representative,
competitive multi-party system capable of fostering meaningful
political reform and democratic governance.
political party development viewed as ``too risky''
Question. Mr. Winter, in the past, USAID has avoided political
party development programs, deeming them ``too risky.'' In the post-
September 11th environment, has USAID reconsidered its democracy
strategy to include greater emphasis on political party programs?
Answer. Senator McConnell, it is fair to say that assistance to
political parties raises some sensitive issues. For example, in some
cases political party development programs involve a sensitive decision
on whether to take sides (i.e., support one or some parties and not
others). Often times, beyond the election cycle, some parties lack the
will to reform. Finally, limited resources and management capacity
available to many USAID missions demand strategic choices, which may
mean concentrating on other institutions or organizations performing
governance functions. However, USAID has not avoided political party
development. Our primary partners in this area, the National Democratic
Institute (NDI) and International Republican Institute (IRI), have
supported political party development in over 50 countries over the
past ten years. This assistance has been most prevalent in the Europe
and Eurasia and the Africa regions. USAID has focused attention on
helping parties address growing public disaffection, corruption, and
overall declining effectiveness of parties throughout the developing
world. Most recently, USAID has been working to refocus its party
assistance on more long-term, strategic interventions that do not
solely focus on elections. Over the past year, party and campaign
finance disclosure has also been a new priority. Party assistance will
be an expanding and integral element of USAID's democracy strategies.
Effective democratic parties are essential to progress in supporting
good governance in targeted countries.
funding for local democracy and human rights organizations
Question. Mr. Winter, what percentage of democracy funds
administered by State and USAID are provided directly to indigenous
democracy and human rights organizations?
Answer. Senator McConnell, unfortunately, this is not something
that we systematically track, nor is it the type of information that is
captured by our accounting system. Direct USAID support, as well as
indirect support via our grantees or contractors, to indigenous
democracy and human rights organizations is common. When done
appropriately (the receiving organization needs to be soundly managed),
this is a very effective strategy for promoting democracy. Some
examples of the types of organizations that receive democracy funds may
help illustrate how this works.
--In Russia, USAID has signed a cooperative agreement with IREX to
help support Russian civil society organizations. Part of this
grant is provided directly to several Russian intermediary
service organizations (ISO) located in regions far from the
USAID mission or IREX's project office in Moscow. These ISOs
provide training and small grants to help strengthen grass
roots NGOs throughout Russia. Therefore, via the IREX
cooperative agreement, these ISOs receive democracy funds, as
do many additional Russian NGOs that get small subgrants to
help fund specific community-level democracy projects.
--Through a cooperative agreement with the International Foundation
for Electoral Systems (IFES), USAID provides democracy funds to
several regional organizations of elections officials. These
organizations meet to share best practices on administering
free, fair, and efficient elections.
--USAID provides democracy funds directly to the Inter-American
Institute for Human Rights (IIHR), the premier human rights NGO
in this hemisphere. Human rights activists and government
officials from all over Latin America are sent to IIHR for
training and technical assistance.
democracy assistance to topple regimes
Question. Mr. Winter, should U.S. democracy assistance be targeted
to influence specific political outcomes--such as toppling oppressive
rulers like Slobodan Milosevic?
Answer. Senator McConnell, I think that there are examples where
all United States foreign policy efforts should be focused on the
democratic overthrow of oppressive rulers like Slobodan Milosevic.
Legally, there are prohibitions that prevent USAID from directly
impacting the results of an election. However, democracy assistance is
often used as a tool to directly challenge the legitimacy of
authoritarian regimes. In every country where we are promoting
democracy, USAID's primary aim is to assist democratic reform. When a
government, institution, or even an individual is opposed to democratic
reform, USAID typically reduces or ends assistance to that entity. In
authoritarian or semi-authoritarian countries, we work with democratic
political parties, the media, and civil society organizations, not the
government. We will also support the legislature and judiciary if they
appear committed to democratic reform. Our strategy is to support
organizations that broaden the space for competing ideas and views, and
to create an environment where political transformation is more likely.
In extreme cases, we support the democratic overthrow of an oppressive
dictator by supporting peaceful political opposition groups. When this
approach is matched with a high profile diplomatic offensive, it can be
very effective--witness the toppling of the Milosovic regime in Serbia.
A decision to overtly favor one political party or coalition is always
made in consultation with the U.S. Embassy and the Department of State,
and is always done in the context of the relevant legal prohibitions.
Our preferred approach outside of extreme cases (Zimbabwe, Serbia)
is to work with reformers in as many parties as possible to help
broaden support for democracy among the political elite. However, when
events warrant it, and with clear State Department leadership, USAID is
an effective partner in overt U.S. Government efforts aimed at
defeating despots and dictators.
level of usaid staff expertise
Question. Mr. Winter, what level of expertise does USAID possess in
the field of democracy and rule of law reform? Does USAID program staff
have relevant experience in American political or legal processes?
Answer. Our democracy and governance officers, both in our missions
and here in Washington, have significant technical and field
experience. Democracy jobs at USAID are extremely hard to get. When we
hire from outside the Agency, we often get scores of applicants for
each opening. This gives us the luxury of hiring highly qualified
individuals, who often agree to take significant pay cuts to join
USAID. It has been approximately a decade since USAID began to focus
considerable amounts of resources on democracy. In that time, our
institutional capacity and expertise has grown considerably. In
addition, USAID is able to attract extremely qualified Foreign Service
Nationals (FSN). We have former judges, leading university figures, and
skilled democracy activists that assist our U.S. Foreign Service
Officers in the management of our programs. Once they leave, they often
go on to serve in high-level government positions or win elected
office.
lack of agressiveness and creativity
Question. Mr. Winter, USAID programs have been criticized in the
past for lacking aggressiveness and creativity. How has USAID addressed
these shortfalls?
Answer. Senator McConnell, we are certainly familiar with these
criticisms. I think we need to look seriously at the issues raised and
see whether they make sense and whether we need to do better. Frankly,
we have been quite aggressive in places like Serbia, and we are very
creative in many places as well. USAID has contributed to irreversible
change in places like Bolivia, Bulgaria, and South Africa.
Nevertheless, we need to be open to criticism. For example, Tom
Carothers in the Journal of Democracy has alleged that USAID is
constrained by our conformity to a ``transition paradigm'' that guides
our strategy decisions regarding the promotion of democracy. We pay
attention to these concerns, especially when they are raised by those
who share our strong desire to improve the quality of our democracy
programs. We try to learn from our mistakes, so these external
critiques are often helpful. However, we don't agree with all (or even
most) of them.
For example, we now do a much better job of assessing the true
political dynamics that influence a country's commitment to democratic
reform, or the lack thereof. The DCHA Bureau has developed a
comprehensive framework to both assess the true state of reform in a
country and to design a democracy strategy that will most effectively
overcome barriers to reform. When this process works, it is the
antithesis of a cookie-cutter approach. Over the last five years, USAID
has applied this framework in 26 countries, over a third of all
countries where USAID has democracy programs. The next hurdle we are
trying to overcome is to make a more direct link between the findings
of these democracy assessments and actual programs. Too often our
democracy programs do not link as directly with our analysis as they
should. However, by centralizing democracy staff within the DCHA Bureau
and placing final responsibility for strategies with the Bureau for
Program and Policy Coordination (PPC), it will now be easier to ensure
that our programs are both more flexible and more aggressive.
Administrator Natsios has given the PPC Bureau this authority for all
USAID programs, not just for democracy programs.
comparison of grants and contracts
Question. Mr. Winter, what percentage of USAID democracy and
governance contracts are awarded to for-profit organizations, and what
is the average dollar amount of these contracts? Please provide a list
of democracy and governance contracts and grants USAID has awarded over
the past two years, indicating the recipient of the contract or grant,
the dollar amount of the contract or grant, the overhead rate of these
organizations, and a brief program description. What does USAID deem an
acceptable overhead rate for democracy and governance program contracts
awarded to for-profit organizations?
Answer. Senator McConnell, this is not the type of information that
our procurement or accounting system tracks regularly. However, we do
have much of the information you have requested, and will get the rest
as soon as possible.
We do have relevant information regarding the breakdown of funding
that goes into grants and contracts, as well as a comparison of the
average markup or overhead rate of our grantees and contractors. In
addition, we have a complete list of grants and contracts awarded in
the last two years by the Office of Democracy and Governance. We are
working with our procurement office to provide you similar information
from all of our mission-based democracy programs.
In fiscal year 1999, 65 percent of our assistance went to grants
and cooperative agreements, while only 28 percent went through
contracts. In fiscal year 2000, 61 percent of our assistance went to
grants and cooperative agreements, while 31 percent went through
contacts. In both cases, the remaining funds were channeled through
other procurement mechanisms and were not used to fund large projects.
Based on a survey of current grants and contracts under way in the
Europe and Eurasia region, USAID has determined that the average markup
for grants and cooperative agreements was 81 percent. The term
``markup'' takes into account all the indirect costs (including
overhead) that an organization applies against its direct labor costs.
For contracts, the average markup was 83 percent. Clearly, the
difference, at least in the Europe and Eurasia region, is
insignificant.
However, cost is not the only consideration when deciding whether
to employ a cooperative agreement/grant or contract. Other key factors
include:
--Ability of the prospective implementor to undertake a successful
program;
--Speed of procurement;
--USAID's degree of need to direct activities; and
--Competition requirements.
All of these factors influence the ultimate decision about what
type of instrument to use. In the democracy and governance sector, this
calculus most often leads to the decision to undertake assistance via a
grant or cooperative agreement. Looking at fiscal year 1999 and fiscal
year 2000, about twice as much money was put into grants and
cooperative agreements as was put into contracts. While work in other
sectors may have a different breakdown, the majority of democracy
assistance continues to go to grants and cooperative agreements.
The following is the information you requested on individual
awards. As mentioned above, this information only covers our democracy
office, but we will do our best to provide this information about all
of our democracy awards.
Of 36 active contract and grant mechanisms managed by the Office of
Democracy and Governance, just over one third have been awarded to for-
profit organizations. The average ceiling amount of these mechanisms is
$20,121,539, of which an average of $586,022 has been obligated so far.
In terms of ceiling, for-profit organizations represent 38.79 percent
of the sum of all active mechanisms managed by the Democracy and
Governance office. However, of a total of $184,814,079 actually
obligated through the Office's mechanisms, for-profit organizations
account for only 4.12 percent. As you can see, the balance between the
amount of money awarded to for-profit versus non-profit firms is quite
striking. However, this does not track all contracts to for-profits
awarded by missions under a global DG office contract. If these
contracts were factored in, the result would more closely resemble the
two-to-one ratio of grants versus contracts.
DCHA/OFFICE OF DEMOCRACY AND GOVERNANCE CONTRACTS AND GRANTS
[All active contracts and grants awarded by DCHA/Office of Democracy and Governance]
----------------------------------------------------------------------------------------------------------------
Obligated to
Implementing partner Award type date Agreement number
----------------------------------------------------------------------------------------------------------------
For profit--fiscal years 2000-2002:
Management Sciences for IQC..................... $25,000 AEP-I-00-00-0013-00
Development.
Development Associates........... IQC..................... 25,000 AEP-I-00-00-00008-00
Management Systems International. IQC..................... 325,000 AEP-I-00-00-00018-00
Creative Associates.............. IQC..................... 133,900 AEP-I-00-00-00019-00
Casals & Associates.............. IQC..................... 1,860,701 AEP-I-00-00-00010-00
Management Systems International. IQC..................... 250,000 AEP-I-00-00-00009-00
Associates in Rural Development.. IQC..................... 240,000 AEP-I-00-00-00016-00
Development Associates........... IQC..................... 25,000 AEP-I-00-00-00004-00
Development Alternatives......... IQC..................... 25,000 AEP-I-00-00-00006-00
Management Systems International. IQC..................... 1,323,439 AEP-I-00-00-00005-00
----------------
Subtotal....................... ........................ 4,233,040 ...............................
----------------
Previous:
Management Systems International. IQC..................... 2,483,824 AEP-I-00-99-00040-00
Associates in Rural Development.. IQC..................... 297,116 AEP-I-00-99-00041-00
PaL-Tech, Inc.................... Contract................ 604,306 AEP-C-00-99-00032-00
----------------
Total For-Profit............... ........................ 7,618,286 ...............................
================
Non-profit--fiscal years 2000-2002:
Iris Center...................... IQC..................... 25,000 AEP-I-00-00-00012-00
National Center for State Courts. IQC..................... 275,000 AEP-I-00-00-00011-00
Temple University................ Grant................... 1,750,000 GDG-A-00-01-00020-00
IFES............................. IQC..................... 734,500 AEP-I-00-00-00007-00
CEPPS............................ Co-Ag................... 11,230,184 DGC-A-00-01-00004-00
ACILS............................ Co-Ag................... 2,000,000 DGC-A-00-02-00002-00
AED.............................. Co-Ag................... 1,300,000 AEP-A-00-01-00004-00
Pact, Inc........................ Co-Ag................... 1,300,000 GEG-A-00-01-00005-00
Internews........................ Co-Ag................... 1,000,000 DGC-A-00-01-00007-00
Research Triangle Institute...... IQC..................... 25,000 AEP-I-00-00-00017-00
SUNY-Research Foundation......... IQC..................... 125,000 AEP-I-00-00-00003-00
IOM.............................. Grant................... 159,910 DCH-G-00-02-00002-00
----------------
Subtotal....................... ........................ 19,924,594 ...............................
----------------
Previous:
Freedom House.................... Co-Ag................... 4,650,175 AEP-A-00-99-00016-00
IFES............................. Co-Ag................... 3,620,000 AEP-A-00-99-00017-00
IDLI............................. Grant................... 5,179,988 AEP-G-00-97-00031-00
CEPPS............................ Co-Ag................... 69,827,023 AEP-A-00-95-00038-00
Fair Labor Association........... Co-Ag................... 1,339,000 AEP-A-00-99-00047-00
ACILS.......................... Grant................... 56,434,802 AEP-G-00-97-00035-00
International Labor Rights Fund.. Grant................... 552,880 AEP-G-00-99-00062-00
Transparency International....... Grant................... 3,282,716 AEP-G-00-95-00028-00
National Democratic Institute.... Co-Ag................... 3,173,951 AEP-A-00-98-00014-00
World Learning................... Co-Ag................... 8,810,664 AEP-A-00-95-00024-00
UNHCS............................ Grant................... 400,000 AEP-G-00-99-00064-00
----------------
Total Non-Profit............... ........................ 177,195,795 ...............................
================
Total awards................... ........................ 184,814,079 ...............................
----------------------------------------------------------------------------------------------------------------
Additional Information on Contracts and Grants awarded in the past
---------------------------------------------------------------------------
two years:
Recipient:Management Sciences for Development, AEP-I-00-00-00013-00
Type of Award:Indefinite Quantity Contract
Ceiling: \1\ $9,230,141
---------------------------------------------------------------------------
\1\ This ceiling is the maximum amount of funds that may be
obligated into this award.
---------------------------------------------------------------------------
Overhead rate: 5 percent
Description: Provides missions and regional bureaus with a
contractual buy-in vehicle for rule of law (ROL) programming.
Activities under this indefinite quantity contract (IQC) improve and
enhance the Agency's performance in facilitating the growth and
sustainability of legal and judicial systems that promote ROL
consistent with respect for human rights and market-based economies,
commitment to legal equity, and democratic principles.
Recipient: The IRIS Center, AEP-I-00-00-00012-00
Type of Award: Indefinite Quantity Contract
Ceiling: $10,098,906
Overhead rate: 21 percent
Description: Provides missions and regional bureaus with a
contractual buy-in vehicle for rule of law (ROL) programming.
Activities under this IQC improve and enhance the Agency's performance
in facilitating the growth and sustainability of legal and judicial
systems that promote ROL consistent with respect for human rights and
market-based economies, commitment to legal equity, and democratic
principles.
Recipient: National Center for State Courts, AEP-I-00-00-00011-00
Type of Award: Indefinite Quantity Contract
Ceiling: $9,963,916
Overhead rate: 4.6 percent
Description: Provides missions and regional bureaus with a
contractual buy-in vehicle for rule of law (ROL) programming.
Activities under this IQC improve and enhance the Agency's performance
in facilitating the growth and sustainability of legal and judicial
systems that promote ROL consistent with respect for human rights and
market-based economies, commitment to legal equity, and democratic
principles.
Recipient: Temple University, GDG-A-00-01-00020-00
Type of Award: Grant
Ceiling: $2,168,116
Overhead rate: 26 percent
Description: This grant fulfills a Congressional directive by
providing funding for Temple University's law center in Beijing. The
grant funds an expansion of the Center's program by supporting
additional faculty from Temple and other U.S. law schools. The funding
also provides tuition scholarships for judges and legal officials to
attend graduate programs in the United States.
Recipient: Development Associates, AEP-I-00-00-00008-00
Type of Award: Indefinite Quantity Contract
Ceiling: $22,670,918
Overhead rate: 2 percent
Description: This IQC provides missions and regional bureaus with
the buy-in capacity to support elections assistance when a contractual
mechanism is the preferred option. This mechanism may be used for
logistical field support where control over inputs such as ballot
production, ballot boxes and specific inputs are required as part of a
multi-donor effort. While offering a wide range of other support
possibilities, Development Associates may also carry out evaluations
and assessments, or conduct technical research on cutting edge,
elections-related subjects.
Recipient: IFES, AEP-I-00-00-00007-00
Type of Award: Indefinite Quantity Contract
Ceiling: $24,102,048
Overhead rate: 27.5 percent
Description: This IQC provides missions and regional bureaus with
the buy-in capacity to support elections assistance when a contractual
mechanism is the preferred option. This mechanism may be used for
logistical field support where control over inputs such as ballot
production, ballot boxes and specific inputs are required as part of a
multi-donor effort. While offering a wide range of other support
possibilities, IFES may also carry out evaluations and assessments, or
conduct technical research on cutting edge, elections-related subjects.
Recipient: Consortium for Elections and Political Process
Strengthening, DGC-A-00-01-00004-00
Type of Award: Cooperative Agreement
Ceiling: $70,000,000
Overhead rate: 24 percent
Description: The Consortium for Elections and Political Process
Strengthening (CEPPS) brings together the International Foundation for
Election Systems, the International Republican Institute, and the
National Democratic Institute for International Affairs to implement
election and political processes programming. It provides field support
(over $16 million in fiscal year 2001 buy-ins) and rapid response
capacity for both presence and non-presence countries, as well as a
limited amount of research and technical guidance, based on grantee
experience and expertise.
Recipient: Academy for Educational Development, AEP-A-00-01-00004-
00
Type of Award: Cooperative Agreement
Ceiling: $5,999,687
Overhead rate: 36 percent
Description: This mechanism is available to missions and regional
bureaus for civil society strengthening and also for rapid response
programming of ESF to address foreign policy priorities for State,
particularly in important non-presence countries. This grant supports
innovative approaches likely to facilitate the transition to, or
consolidation of, participatory democratic processes and economic
development, and helps to assure that lessons learned in civil society
programming are implemented in USAID mission programs.
Recipient: Pact, Inc., GEG-A-00-01-00005-00
Type of Award: Cooperative Agreement
Ceiling: $6,000,000
Overhead rate: 33.88 percent
Description: This mechanism is available to missions and regional
bureaus for civil society strengthening and also for rapid response
programming of ESF to address foreign policy priorities for State,
particularly in important non-presence countries. This grant supports
innovative approaches likely to facilitate the transition to, or
consolidation of, participatory democratic processes and economic
development, and helps to assure that lessons learned in civil society
programming are implemented in USAID mission programs.
Recipient: Associates in Rural Development, AEP-I-00-00-00016-00
Type of Award: Indefinite Quantity Contract
Ceiling: $23,569,988
Overhead rate: 26 percent
Description: Decentralization changes the distribution of power
within societies and can deepen democracy. Reversion to centralized
authoritarianism is more difficult when power is diffused and multiple
channels for citizen involvement have been developed. Also, moving the
locus for decision-making closer to those it affects can improve
government responsiveness. This IQC provides for services in the areas
of decentralization and public administration. Two functional areas are
included: (1) decentralization and participatory government, and (2)
public management and administration.
Recipient: Casals & Associates, AEP-I-00-00-00010-00
Type of Award: Indefinite Quantity Contract
Ceiling: $18,841,702
Overhead rate: 7.0 percent
Description: Provides field support and buy-in capacity for
missions and regional bureaus in the program area of curbing
corruption.
Recipient: Management Systems International, AEP-I-00-00-00009-00
Type of Award: Indefinite Quantity Contract
Ceiling: $16,767,614
Overhead rate: 12.8 percent
Description: Provides field support and buy-in capacity for
missions and regional bureaus in the program area of curbing
corruption.
Recipient: SUNY-Research Foundation, AEP-I-00-00-00003-00
Type of Award: Indefinite Quantity Contract
Ceiling: $12,039,393
Overhead rate: 29 percent
Description: Provides field support and buy-in capacity for
missions and regional bureaus in the program area of legislative
strengthening.
Recipient: Research Triangle Institute, AEP-I-00-00-00017-00
Type of Award: Indefinite Quantity Contract
Ceiling: $23,941,827
Overhead rate: 14 percent
Description: Provides field support and buy-in capacity for
missions and regional bureaus in the promotion of decentralization and
democratic local governance.
Recipient: Development Associates, AEP-I-00-00-00004-00
Type of Award: Indefinite Quantity Contract
Ceiling: $11,567,277
Overhead rate: 2.0 percent
Description: Provides field support and buy-in capacity for
missions and regional bureaus in the program area of legislative
strengthening.
Recipient: Management Systems International, AEP-I-00-00-00005-00
Type of Award: Indefinite Quantity Contract
Ceiling: $27,936,736
Overhead rate: 9.2 percent
Description: Provides field support and buy-in capacity for
missions and regional bureaus in the program area improving the
management of policy reform.
Recipient: Development Alternatives, AEP-I-00-00-00006-00
Type of Award: Indefinite Quantity Contract
Ceiling: $30,964,736
Overhead rate: 9.2 percent
Description: Provides field support and buy-in capacity for
missions and regional bureaus in the program area improving the
management of policy reform.
Recipient: Creative Associates International, AEP-I-00-00-00019-00
Type of Award: Indefinite Quantity Contract
Ceiling: $28,084,136
Overhead rate: 15.0 percent
Description: Provides rapid response technical assistance to
support mission and regional bureau civil society programs and assure
consistent application of lessons learned. Services focus on building
the capacity of local, country, and regional level civil society
organizations. The range of technical assistance activities includes
the design, implementation and evaluation of activities in the
following areas: (1) institutional capacity building, (2) sectoral
support, (3) conferencing and networking, and (4) independent media.
Recipient: Management Systems International, AEP-I-00-00-00018-00
Type of Award: Indefinite Quantity Contract
Ceiling: $25,318,440
Overhead rate: 12.8 percent
Description: Provides rapid response technical assistance to
support mission and regional bureau civil society programs and assure
consistent application of lessons learned. Services focus on building
the capacity of local, country, and regional level civil society
organizations. The range of technical assistance activities includes
the design, implementation and evaluation of activities in the
following areas: (1) institutional capacity building, (2) sectoral
support, (3) conferencing and networking, and (4) independent media.
Recipient: Internews, DGC-A-00-01-00007-00
Type of Award: Cooperative Agreement
Ceiling: $2,000,000
Overhead rate: 35 percent
Description: This Congressionally earmarked program provides access
for missions and regional bureaus to train journalists and other media
professionals from developing countries to obtain a broad range of
skills, practices, and equipment to assist them in developing
independent media and promoting the free flow of information in their
countries. The training takes place at Western Kentucky University with
follow-up training in the participants' home countries. The training
program components include, for example, journalism and production
training, station management training, training in media law and
advocacy, association building, internet and ``new media'' training,
site visits, field recording equipment grants, follow-on training in
participants' home countries, and ``training of trainers.'' All
obligations under the earmark to date have been for training of
Indonesian and Cambodian journalists.
Recipient: International Organization for Migration
Type of Award: Grant
Ceiling: $159,910
Overhead rate: 4.8 percent
Description: This grant funds the Participatory Elections Project
which will research, develop and facilitate the recognition of
international standards for the political rights of refugees and
internally displaced persons.
Recipient: ACILS
Type of Award: Cooperative Agreement
Ceiling: $49,500,175
Overhead rate: 22.8 percent
Description: This agreement supports labor-related programs with
the following objectives: (1) Promote the adoption and effective
enforcement of core labor standards; (2) Establishment of legal
frameworks to protect and promote civil society; (3) Increased citizen
participation in policy processes, implementation and oversight of
public institutions; (4) Increased institutional and financial
viability of labor unions and labor NGOs; (5) Enhanced free flow of
information; (6) Strengthened democratic and political culture and
gender equity; (7) Support anti-sweatshop initiatives; (8) Promote
broad-based, equitable economic growth; (9) Human capacity built
through education and training; and (10) Improve health through
workplace and peer-to-peer health education and prevention.
SUBCOMMITTEE RECESS
Senator McConnell. Thank you very much, that concludes the
hearing. The subcommittee will stand in recess until 2 p.m.,
Tuesday, March 19, when we will meet in room SD-192 to hear
from Paul O'Neill, Secretary, Department of the Treasury.
[Whereupon, at 10:49 a.m., Wednesday, March 6, the
subcommittee was recessed, to reconvene at 2 p.m., Tuesday,
March 19.]
FOREIGN OPERATIONS, EXPORT FINANCING, AND RELATED PROGRAMS
APPROPRIATIONS FOR FISCAL YEAR 2003
----------
TUESDAY, MARCH 19, 2002
U.S. Senate,
Subcommittee of the Committee on Appropriations,
Washington, DC.
The subcommittee met at 2 p.m., in room SD-192, Dirksen
Senate Office Building, Hon. Patrick J. Leahy (chairman)
presiding.
Present: Senators Leahy, Bennett, and Reed.
DEPARTMENT OF THE TREASURY
Office of the Secretary
STATEMENT OF PAUL H. O'NEILL, SECRETARY OF THE TREASURY
OPENING STATEMENT OF SENATOR PATRICK J. LEAHY
Senator Leahy. Good afternoon, Mr. Secretary. And sorry for
the strange day as we moved around. I know you are leaving for
Mexico soon. I appreciate you being here.
Now, the Treasury Department's budget request for
international programs totals $1.45 billion. $178 million is to
pay one third the arrears we owe to the international financial
institutions. That is overdue and I welcome you for doing that.
I also welcome your proposals to make changes in the way
the World Bank does business, including moving towards grants
and away from loans for the poorest countries. You and I have
discussed this before and I heard you discuss it also at the
World Economic Summit.
I know this is controversial among some donors but I do not
believe, as some suggest, that it will result in less support
from Congress for these programs.
However, I continue to have serious concerns about
management at the World Bank. Mr. Wolfensohn is a good friend.
I have great respect for him. I believe he has the right
vision. But, there are some people down there who run the
Bank's day-to-day operations who give the term ``ingrained
bureaucracy'' a bad name.
I have real doubts about some of these managers and have
expressed concerns for years about the Bank's treatment of its
own staff, especially those who file complaints of harassment
or other misconduct.
There is a fear of retaliation if anybody raises their head
at the World Bank. And if somebody makes a complaint, they risk
their career. That is wrong.
This is not to take away from the Treasury officials who
deal with these institutions. They do a good job and I
appreciate it.
I am glad that you and the President and others from the
Cabinet are going to Monterrey and am pleased with the
President's announcement last week to increase foreign
assistance by $5 billion beginning in fiscal year 2004. We do
not know the details yet but I like the direction.
However, before we congratulate ourselves, we should
recognize two things: We do know there are 2 billion people in
the world living in misery who need help now, and many of these
people cannot afford to wait until 2004. Fourteen thousand more
people were infected by the AIDS virus today. Tomorrow will be
another 14,000 and the next day another 14,000.
Second, even with the additional funds, spending on
development assistance will be below what it was in the 1980s.
It will only be six-tenths of 1 percent of the Federal budget,
and one-tenth of 1 percent of our economy.
Our foreign aid can not solve all the world's problems. But
our aid can help obtain measurable results from governments in
ending corruption, reforming their economies, and strengthening
democracy.
As much as I applaud what the President has announced, it
is not enough. This is more about our own national security
than anything else. Senator McConnell and I have said over and
over that we should be doing much more.
The British Government made a proposal to double spending
on foreign aid. Secretary Powell has said we should triple it.
I agree, and hope that you will consider these proposals.
To the extent that we bring about democracy and reduce
poverty in other parts of the world, we will improve our own
security.
For example, every disease is only an airplane trip away
from where we are right now. As we saw in the paper the other
day, the number of tuberculosis cases has gone up in Northern
Virginia. My wife is a nurse. She told me that in the last 5
years, she has seen firsthand a dramatic increse in the number
of TB cases in Northern Virginia. And a very large percentage
of these cases are from outside our borders.
Having said all of that, perhaps the most compelling reason
to increase foreign aid is a moral reason. We are the
wealthiest, most powerful nation on earth. Everybody in this
room lives well. You do, I do. We all do. And we live at a
level, no matter whether we are the lowest paid person in this
room, that is unimaginable in vast parts of the world. And I
think we have a moral responsibility to do more.
Lastly, in your prepred statement, you mention getting rid
of legislative mandates. Last year your Department brought us a
laundry list of requirements that you wanted changed during the
final stages of the conference committee, and asked us to act
in areas that are outside our jurisdiction and contrary to the
Senate rules.
I realize it was a new administration, but that is not the
way to do it. Let us talk earlier in the process, and working
together, I am sure we can reach agreement on many of these
issues.
When Congress finds that the administration is not acting,
then we will act.
PREPARED STATEMENT
We have received Senator McConnell's prepared statement
that will be made part of the hearing record.
[The statement follows:]
Prepared Statement of Senator Mitch McConnell
Mr. Secretary, thank you very much for appearing before our
subcommittee this afternoon to examine the fiscal year 2003 foreign
operations request for the Department of the Treasury and the
international financial institutions (IFIs). In the interest of time, I
will keep my opening remarks brief.
Let me begin by commending the administration for its initiative to
increase foreign aid by $5 billion over the next three fiscal years.
There has been a growing chorus in Washington and elsewhere for
increased foreign assistance in the wake of the September 11 attacks,
and both this subcommittee and President Bush recognize the need to do
more to undermine poverty and promote democracy in developing
countries. It is in America's security interest that economic, social
and political standards are improved on a global basis.
It is also in our interests to ensure that foreign aid dollars are
used in the most efficient and effective manner. A critical element of
the President's new initiative is the linkage between foreign aid and
those countries that demonstrate a strong commitment to good
governance, health and education programs, and economic policies. It is
only fitting that we use our assistance to leverage reforms--and to
reward those nations willing to make the difficult decisions necessary
for long term economic growth and development.
I should point out that this linkage will come as old news to
certain countries in Southeast Asia, the Balkans, and the Middle East.
To the consternation of some foreign capitals, I have long operated
under the premise that U.S. foreign assistance is not a hand out.
I hope that you will use today's hearing to expand on opportunities
for reform at the World Bank, the International Monetary Fund (IMF),
and other multilateral development banks. This Subcommittee has long
been concerned about operations and management at the World Bank, and
at our last Subcommittee hearing for Treasury, Senator Leahy and I
focused on personnel, management, and corruption issues. Confidence in
the World Bank is further eroded by articles that highlight management
shortfalls at that institution, as appeared in last year's Foreign
Policy journal. I take it as welcomed news that you have already made
the issue of reform at the Bank and the IMF a central theme of your
tenure as Secretary.
Let me close by commending you for your Department's leadership on
the effort to combat the financing of terrorism. This is an important
front in America's war against terrorism, and I understand that $104
million in assets has already been blocked since the attacks on our
soil. Keep up the good work.
Senator Leahy. Go ahead, Mr. Secretary. You and I have had
a lot of chats. Incidentally, I much appreciate your call
yesterday on this matter.
SUMMARY STATEMENT OF HON. PAUL H. O'NEILL
Secretary O'Neill. Well, thank you very much, Mr. Chairman.
It is a real pleasure to be here. I have a long statement which
with your permission I would like to----
Senator Leahy. Would you put that in the record. Just pull
that mike a little closer. As Senator Thurmond used to say,
pull the--oh, do we have it on now? This is a new system I am
told, just started in here. And for us old guys it is hard as
heck to get used to anything new.
Secretary O'Neill. Thank you, Mr. Chairman. It is a
pleasure to be here. I have a long statement. With your
permission, I'll just submit it for the record.
Senator Leahy. Of course.
Secretary O'Neill. I have a shorter statement that I think
may be worth going through just to create a basis for our
conversation, if you will. Thank you for the opportunity to
testify today about the President's budget request for
Treasury's international programs.
Let me begin by underscoring the emphasis that President
Bush places on economic development as a central commitment of
American foreign policy. The United States should and must be a
champion of economic growth and development, particularly in
those parts of the world where poverty is the most acute.
In today's world, in many nations and regions, extreme
poverty is widespread and deep and exacts an enormous human
toll. If we care about simple human dignity, we must act to
help raise living standards for the poorest.
As President Bush stated last week in a speech at the
Inter-American Development Bank, and I quote: ``This growing
divide between wealth and poverty, between opportunity and
misery, is both a challenge to our compassion and a source of
instability.''
The President has called for a new compact for global
development, defined by new accountability for both rich and
poor nations alike with greater contributions from developed
nations linked to greater responsibility from developing
nations.
The President's proposal recognizes that sound policies
have universal application and that development partnerships
can only be effective if rooted in a good policy framework.
For this reason, the adoption by poor countries of the
reforms and policies that make development effective and
lasting is integral to the President's proposed new Millennium
Challenge Account.
The concept underlying the Account is clear, that countries
that rule justly, invest in their people, and encourage
economic freedom will receive more assistance from the United
States.
The administration looks forward to working closely with
the Congress as we move to operationalize the Millennium
Challenge Account.
The MDBs are also important instruments in helping us
pursue growth and prosperity in a global economy. They serve
vital interests of the United States, and are crucial and
integral components of our overall foreign assistance effort.
U.S. foreign assistance programs, including assistance through
multilateral development banks, are important for advancing
American foreign policy.
The more our assistance aids in economic development, the
greater countries' ability to engage in mutually beneficial
trade with Americans, the greater the chances for democratic
values to take root, and the greater the chances for government
and social institutions to develop stability.
The crucial importance of laying the foundation for hope
and opportunity has only been underscored by recent events. As
the President has said, When governments fail to meet the most
basic needs of their people, these failed states can become
havens for terror.
This year's request totals $1.4 billion, including $1.26
billion in funding for our annual commitments to MDBs, $178
million towards clearing our arrears to those institutions over
a 3-year period, and $10 million for international technical
assistance programs.
I take very seriously my responsibility to ensure that U.S.
taxpayer resources provided in the MDBs are effective in
achieving significant and sustainable improvements in the daily
lives of the people living in developing countries.
PREPARED STATEMENT
I am convinced that the MDBs can do a better job. And it
has been a high priority from the beginning of the Bush
administration to improve their performance. Our message is
beginning to take hold, but there is much work to be done to
accomplish our objective. And with that, Mr. Chairman, I'd be
pleased to take questions.
[The statement follows:]
Prepared Statement of Hon. Paul H. O'Neill
Chairman Leahy, Ranking Member McConnell, Members of the
Subcommittee, thank you for the opportunity to testify today about the
President Bush's fiscal year 2003 budget request for Treasury's
international programs.
Let me begin by underscoring the emphasis that President Bush
places on economic development as a central commitment of American
foreign policy. The United States should and must be a champion of
economic growth and development, particularly in those parts of the
world where poverty is most acute. In today's world, in many nations
and regions, extreme poverty is widespread and deep and exacts an
enormous human toll. If we care about simple human dignity, we must act
to help raise living standards for the poorest. As President Bush
stated last week in a speech at the Inter-American Development Bank:
``This growing divide between wealth and poverty, between
opportunity and misery, is both a challenge to our compassion and a
source of instability.''
The President has called for a new compact for global development,
defined by new accountability for both rich and poor nations alike with
greater contributions from developed nations linked to greater
responsibility from developing nations. The President's proposal
recognizes that sound policies have universal application and that
development partnerships can only be effective if rooted in a good
policy framework. For this reason, the adoption by poor countries of
the reforms and policies that make development effective and lasting is
integral to the President's proposed new Millennium Challenge Account.
The concept underlying the Account is clear, that countries that rule
justly, invest in their people, and encourage economic freedom will
receive more assistance from the United States.
The Administration looks forward to working closely with the
Congress as we move to operationalize the Millennium Challenge Account.
The MDBs are also important instruments in helping us pursue growth
and prosperity in the global economy. They serve vital interests of the
United States, and are crucial and integral components of our overall
foreign assistance effort. U.S. foreign assistance programs, including
assistance through multilateral development banks, are important for
advancing American foreign policy. The more our assistance aids in
economic development, the greater countries' ability to engage in
mutually beneficial trade with Americans, the greater the chances for
democratic values to take root, and the greater the chances for
government and social institutions to develop stability. The crucial
importance of laying the foundation for hope and opportunity has only
been underscored by recent events. As the President has said, when
governments fail to meet the most basic needs of their people, these
failed states can become havens for terror.
This year's request totals $1.4 billion. It includes $1.26 billion
in funding for our annual commitments to the Multilateral Development
Banks (MDBs), $178 million towards clearing our arrears to these
institutions over a three-year period, and $10 million for
international technical assistance programs.
I take very seriously my responsibility to ensure that U.S.
taxpayer resources provided to the MDBs are effective in achieving
significant and sustainable improvements in the daily lives of the
people living in developing countries. I am convinced that the MDBs can
do a better job, and it has been a high priority from the beginning of
the Bush Administration to improve their performance. Our message is
beginning to take hold, but there is much work to be done to accomplish
our objective.
the mdb growth agenda
There is an untapped reservoir of human potential in all countries,
including the poorest. To fully realize this potential, countries need
to create an environment with the institutional conditions and
incentives required to encourage individual enterprise. These include
the rule of law, enforceable contracts, stable and transparent
government, and a serious commitment to eliminate corruption. Countries
also need to provide individuals with health, knowledge, and the skills
they need to participate in and contribute to economic activity.
External assistance can only help if the right fundamentals are in
place to harness this great human potential.
Job-creating productivity growth is the driving force behind rising
per capita income and reduced poverty, and we have been pressing the
MDBs to focus on projects and programs that raise productivity. This
includes operations that would improve health and education; promote
private enterprise; enhance the rule of law, effective public
expenditure management, accountability and anti-corruption; and open
economies by strengthening trade capacities and investment
environments.
As a result of our efforts, productivity and private sector job
creation are receiving greater emphasis in the debate on MDB policies
within the institutions and among other shareholders. We will continue
working actively to ensure they become a hallmark of actual
operations.,
We are also pressing all the MDBs to measure results. It is not
enough to say that the MDBs are increasing funding for education, for
example. We also need to know whether that increase is leading to
measurable results, such as better reading and writing skills. For the
first time, in the current IDA replenishment negotiations, the United
States will provide supplementary funding conditioned on measurable
results in areas crucial to economic growth and poverty reduction. My
goal is to ensure that the successes and failures of the past 50 years
guide and improve development efforts in the future.
President Bush has also proposed that a higher percentage of the
World Bank and other MDB funds for the poorest countries be provided as
grants rather than loans. This proposal is an important part of our MDB
growth agenda because grants are the best way to help poor countries
make productive investments without saddling them with ever-larger debt
burdens. It thus also will help avoid the need for future HIPC debt
relief. The fact is that investments in crucial social sectors, such as
education and health, do not directly or sufficiently generate the
revenue needed to service new debt.
I am happy to say that the new IDA-13 and African Development Fund
negotiations are likely to have larger shares going to grants, but
there is still disagreement on how much. It is important to reach an
agreement on grants that will facilitate closure on these important
replenishments.
Private sector development is essential for economic development
and growth. Without a transparent economic environment based on the
rule of law, private investment simply will not happen. Opaque
regulatory and legal environments create insurmountable barriers to
entry for new firms, which are the lifeblood of a thriving market
economy.
We believe the MDBs can do more to promote and develop investment
climates that will attract needed private capital. The MDBs could
provide practical investment climate assessments, for example. On the
basis of such assessments, technical assistance, project finance and
small-business loans could be channeled more effectively to countries
committed to policy and regulatory changes that will create conditions
that sustain robust levels of private-sector investment, productivity
growth, and income generation.
the fiscal year 2003 request
The Administration's fiscal year 2003 budget request of $1,447
million for Treasury's international programs reflects these
development priorities, thus projecting U.S. leadership and
complementing our efforts to strengthen the effectiveness of the MDBs.
Funding of this request also will help enable the MDBs to address
critical development issues in key regions of importance to the United
States: supporting key countries in the war on terrorism; combating
money-laundering and terrorist financing; providing assistance to
countries emerging from conflict; and responding to natural disasters.
There are three basic components to this request: annual funding
for the MDBs, arrears clearance, and Treasury's bilateral technical
assistance program.
1. Annual Funding for the MDBs ($1,259.4 million)
Our request for the MDBs includes $1,259.4 million to fund fully
our current annual U.S. commitments. This includes the first payments
of our proposed contributions to new replenishments for the
International Development Association ($850 million), the African
Development Fund ($118 million) and the Global Environment Facility
($107.5 million). Negotiations for all three replenishments are
ongoing.
For the International Development Association (IDA), the United
States is proposing for the first time a results-based financing
framework. The United States would provide $850 million in fiscal year
2003, $950 million in fiscal year 2004 and $1,050 million in fiscal
year 2005, with amounts over $850 million subject to the achievement of
measurable results in areas such as health, education and private-
sector development, for example. This amounts to a total of $2,850
million, or 18 percent above the U.S. commitment to the last IDA
replenishment.
We are also proposing an 18 percent increase in funding for the
African Development Fund (AfDF), a total of $354 million over three
years. For the GEF, the United States is proposing to contribute a
total of $430 million over four years.
2. Arrears ($178 million)
The $177.7 million request for arrears would be applied to all MDB
arrears on a pro rata basis, and is part of a three-year plan to fully
pay U.S. arrears to the institutions, which now total $533 million,
including $211 million in arrears to the GEF. Arrears have now risen
for the third consecutive year, after declining substantially from 1996
to 1999. It is critical that the United States meet its international
commitments, and I look forward to working with the Congress to pay
down these arrears over the next three years, thus helping to ensure
U.S. leadership and credibility on global issues of vital importance to
the United States.
3. Technical Assistance ($10 million)
Our request also includes $10 million for Treasury technical
assistance programs, which form an important part of our effort to
support countries facing economic transition or security issues, and
whose governments are committed to fundamental reforms. This compares
to $6.5 million in fiscal year 2002 appropriations and $3 million in
the budget supplemental for programs specifically designed to combat
terrorism. Treasury's technical assistance programs were created in
1990 and 1991 to assist countries in the Former Soviet Union and
Central and Eastern Europe. Beginning in fiscal year 1999, a direct
Congressional appropriation allowed us to expand the program
selectively and effectively. Our fiscal year 2003 request will allow us
to continue current programs in countries in Africa, Asia, Central and
South America and to expand into other countries committed to sound
economic reform policies. We expect to spend a significant amount on
anti-terrorist programs. Over half of the traditional programs will be
in Sub-Saharan Africa, as has been the case for the past two years. The
anti-terrorist programs will be global in scope, with an emphasis on a
group of about 20 countries that the Administration has identified as
having financial systems vulnerable to misuse by terrorist
organizations.
legislative mandates
There is one final issue that I want to highlight. I am determined
to enable the Treasury Department to fulfill its mission to develop and
implement our international economic policy. Currently, the
Administration is burdened by a large number of legislative mandates
relating to U.S. participation in the international financial
institutions, including requirements for directed voting, policy
advocacy, certifications, notifications, and reports, that have built
up over time.
The U.S. Government's policy development and implementation in
these institutions would be improved by consolidation of these
mandates. Some mandates go back 50 years. Some provisions overlap, or
are inconsistent. There are 32 directed vote mandates and over 100
policy mandates, plus numerous reports, certifications, and
modifications. I want the Congress to be fully informed, but numerous
vestigial reporting requirements have increased the amount of time
senior officials spend working on these reports to levels that warrant
serious concern. I would like to work with you to rationalize and focus
our mandated reports and requirements.
conclusion
I will continue to work hard with MDB managements and with other
shareholders to ensure vigorous and effective implementation of the
U.S. reform agenda. I ask for your support as we work together to
ensure that these institutions are more effective in achieving real
results that promote economic growth and productivity, improve the
living standards of people in developing countries, and advance
American interests.
Thank you very much, and I will be pleased to respond to your
questions and suggestions.
Senator Leahy. Thank you very much, Mr. Secretary.
Incidentally, in reading through your budget justification
materials, I want to say they are easy to read and informative.
If you are chatting with some of the other cabinet members,
you might suggest that they take a look at your budget
materials. As a member of the Appropriations Committee, I get
to see everybody's and the Treasury Department's are very clear
and coherent.
Secretary O'Neill. Mr. Chairman, may I--excuse me for
interrupting, but may I just give credit where it belongs, to
Under Secretary John Taylor and the people that are seated here
who are giving their--a good important part of their life to
doing this work. They deserve the credit for making these
materials more clear and more readable.
I think we've been fortunate in being able to assemble a
fantastic group of people, to work with a career staff who have
given their whole life to these subjects. And I am very pleased
to represent them, but I shouldn't be given the credit for the
great work that they do.
Senator Leahy. I appreciate you doing that. It will be so
noted.
Mr. Secretary, the press has talked a lot about you being a
critic of foreign aid. I suppose it depends whose ox is being
gored. I have heard a number of your statements you have made.
In some places I found myself in agreement with you.
In other instances I did not. Just last week, the
Washington Post said you believe that most poor countries reap
paltry benefits from the billions of dollars they have received
since the 1950s. And that was a response to a World Bank report
that describes remarkable successes from the assistance.
It seems to me that the truth is somewhere in the middle.
On the one hand, there are a lot of examples of World Bank and
U.S. agencies throwing good money after bad. We certainly saw
that during the cold war.
If you announced you were anti-communist it did not make a
difference what kind of a dictator you were, how corrupt your
regime was, or how much money you were sending to a Swiss bank.
We were going to send the money to you.
On the other hand, we have seen improvements over the past
decade or so. A lot of people worked very hard at this, a lot
of very capable professionals, through both Republican and
Democratic administrations.
You must also agree that a lot of this assistance can help
or you would not be asking for $1.4 billion for the World Bank,
and the President would not be talking about requesting another
$5 billion next year.
The President says a world where some live in comfort and
plenty, while half the human race lives on less than $2 a day
is neither just nor stable. I absolutely agree with what the
President said. In fact, it is very similar to the things,
Senator McConnell and I have been saying for years.
But why begin in 2004? You have seen the misery of people
around the world. You have been a leader of a company that has
operations all over the globe. Why cannot we start now?
Secretary O'Neill. Mr. Chairman, I think it is in fact an
excellent question. And I think one should not rule out the
possibility of looking at a beginning of this idea in fiscal
year 2003.
I think it is not out of the question that we could come
into agreement among ourselves and with other contributing
nations around the world on the idea of the measures that
should be used as a results orientation for distributing this
money, that we could get ourselves ready in time to begin at
least on some modest level in 2003.
And while I am at it, I think maybe it is worthwhile saying
the notion of where the President sees us going is to be at a
level of--at a running rate level in 2006 of $15 billion, which
would be a 50 percent increase over the level that we are
operating at now.
So we see this ramping up as we gain experience and
knowledge in working with these ideas. But the President is
quite serious about getting results for the money that is being
spent.
I think there is work to do to make sure that we get the
measures correct. My own experience is you get what you
measure. And so if you are wrong about what you measure, you
can regret the results. So----
Senator Leahy. I could not agree more that you cannot just
throw money at a problem. But we have a whole lot of existing
programs that have proven track records of success but are
currently underfunded. And I am wondering about putting money
there.
We have talked about the $1.43 billion you requested for
the international financial institutions, $177 million is to
pay a third of the arrears we owe from past years; it is $263
million more than 2002. We would like to put a lot more funding
into existing programs that work. But where do we take it from?
I mean, do we fund USAID's education programs or the World
Bank? Do we fund international peacekeeping or the Asian
Development Bank? Unless we have the money in the budget
request, it is difficult to do.
I agree very much in having standards that measure the
success of programs, but I can show you a whole lot of programs
that are working today but are starved for funds.
Secretary O'Neill. I am thinking about the conversation I
had with the President last week where we talked about the half
a billion dollars that the United States has committed to the
U.N. HIV/AIDS Fund. And we were remarking that the first of
those funds were appropriated about a year ago, and so far
there is no obligation in the field.
That is to say there is no program in the field yet as a
consequence of those funds. It is my understanding that maybe
sometime next month there will be the first actual distribution
of funds.
So I guess I have the same sense of urgency you do, Mr.
Chairman. You know, I come at this--you started by saying that
some people have blasted away that I have been criticizing the
institutions. And I guess I regret people interpreting what I
am saying as critical of the institutions. Because that is not
at all the perspective that I bring to this.
My own view is, which comes from as you said from working
around the world, I think--I know you have done this and other
members of the committee have as well, if you go and see what
it's like for people who have no reason to have hope in their
life, and that's what their whole life is going to be about,
then it's not too hard to be impatient about these matters.
And to focus only on doubling the level of average income
in low income countries from $1 a day to $2 a day is a pitiful
vision I think.
So I am quite with you in believing that we should be very
ambitious about what it is we should try to do. But I also
believe this about the President's Millennium Fund, that this
to me is the potential lever on a fulcrum that can move all of
the assistance that is moving through these channels around the
world, not just our bilateral aid but our multilateral aid and
the aid that is coming from other countries.
It is interesting to note, you know, I was challenged about
this last week so I got my statistical abstract out and
rediscovered, I think maybe I knew this before, that last year
American people and institutions gave $175 billion in
charitable giving.
So I think the spirit is there. And if we can do a better
job of assembling the fundamental conditions that give life to
hope for billions of people, there is a lot to lever here. And
I think we can go a long way with $5 billion worth of new
leverage.
Senator Leahy. Let me go to a very specific thing. You
propose that half the World Bank's aid to the poorest countries
be changed from loans to grants, to prevent new debt from being
piled on top of old debt on top of old debt on top of old debt.
The Europeans strongly oppose this. Where do we stand? Is
agreement possible, and would it be possible to channel more of
the grant funds through nongovernmental organizations rather
than through governments?
Secretary O'Neill. Where we stand at the moment is I think
we are making a little bit of progress. As we've been able to
sit down with development ministers from other countries and
make the arguments in a clear way where people can't get up and
leave when it is inconvenient to continue the discussion. I
think that those on the other side of this argument have been
hard-pressed to explain why it is that a civilized world should
say to developing nations that we want to give you, say, a $10
or $50 or $100 million loan so that you can give people HIV
drugs. And we want you to pay it back.
I mean, when you say it out loud it is such an absurdity
that even the strongest proponents of ``we've got to keep doing
this loan'' look at their shoe tops because they are so
embarrassed to continue this argument.
And the same for inoculations, and we think the same for
primary education, that we should say to people who are living
on $1 or $2 a day, we are going to make you a loan. You have to
pay it back.
I mean, just seems like such an insane notion. And I do
think we are making progress. Hopefully this 2 or 3 days in
Monterey with finance ministers and development ministers and
lots of presidents and prime ministers will help us to move
this along.
We are anxious to do it, because we are now holding some
things up that should go forward. So we are--I think we are not
being obstinate for the sake of being obstinate in this case.
We are on the side of principle.
And we need to bring our friends, people like Tony Blair
and Gordon Brown along, and Schroeder in Germany and the rest.
Because I am confident it is not the right thing to ask people
in these conditions to pay us back money that is needed for
basic survival.
Senator Leahy. I have a lot of other questions but I know
time is limited. Senator Bennett and then Senator Reed.
OPENING STATEMENT OF SENATOR ROBERT F. BENNETT
Senator Bennett. Thank you very much, Mr. Chairman. Mr.
Secretary, you know I consider you one of the leading
troublemakers in this town because you are a truth teller. And
truth tellers are in relatively short supply, vastly needed.
But given the culture of this town that is expecting people
to cut and trim their opinions, they do not quite know how to
react to you.
May I encourage you to keep doing it. I am sure you will
anyway, without that encouragement.
I think you have just told the truth here. It is absurd to
put money into a situation where it cannot grow and then expect
it to be paid back. When you make a loan, you make a loan to a
circumstance where somebody expects a return on that money.
This is why I have been such a strong proponent of
microlending, because I have been in the field, have watched
what happens. I have a piece of embroidery in my office that I
brought from a woman in Morocco who started her business
creating that embroidery on a $75 microloan from AID.
I have pushed for a massive increase in microloan funding
and run into massive opposition at AID both in the previous
administration, have not yet seen it in this one, and the best
reason I can come up with as to why they were opposing it is
because they did not control the money.
I do not consider that a valid reason for opposing it. If
you get the results, put more money. And if the results are
good, put more money in it.
The results have been good and we have seen a number, large
number of people come out of the most miserable poverty
conditions into a degree of relative health, financial health
that is in their lives transforming.
Now, by American standards you say, oh, they are still
living in poverty. But poverty is the sense of relative
deprivation. And by their standards they are doing extremely
well.
Now, let me share with you a comment that I had from a
leading minister in a foreign government. And I will tell you
his name off the record. I will not raise it here.
As he and I were having dinner together in his country, and
I said to him what do you need most. I sit on the Foreign
Operations Subcommittee on Appropriations. What do you need
most.
He said, I need people I can trust, trained people I can
trust. He said I preside over a ministry of some 50,000 people.
If I had 15 trained people I could trust, I could fire all the
rest of the 50,000 and we would run the economy of this country
a whole lot better than we do now.
He then said: When I have approached AID they say, oh, we
do not fund scholarships. And they then off the record say, you
are going to choose all your relatives and all your friends,
and you are going to send them over and we are going to pay for
them to go to college in America and we do not want to do that.
Whereupon he said: Fine. You pick the people. You go out
and pick the people that you think have the potential after
getting a degree from an American university in Economics or an
MBA or something of that kind and then send them back to me.
Well, they'll get back to you on that. And it has not
happened. I have been trying to promote scholarships in the
universities in my own State from this very country just for
this purpose.
If you are going to put money, here is--that is the lead
up, here is the statement, and I would like your comment on it.
If you are going to put money into a developing economy in an
effort to turn it into a more productive economy, if you are
going to follow the example you have given in the press of
trying to make South Korea happen again, you are going to need
trained people.
You have got to root out the corruption that is endemic in
these countries where people think the culture is to take the
government money, take the AID money and spread it around among
your cronies or let it get to a bank in Switzerland somehow
with your number on it. And nothing ever happens or very little
ever happens.
Have you given any thought to the question of human capital
in some of these countries and how AID can switch its whole
attitude, and how the World Bank or the IMF might make a
significant contribution to human capital so that we get the
leverage that would come from attaching intelligent humans to
money that can make a difference instead of just going on the
way we have been going on.
Secretary O'Neill. Senator, I think you are onto a very
important point. And it is not just one I think for us to
pursue with the instrument of the Federal Government. Now, I
must say, I was in the Middle East for a week, a week before
last, and one of the things I was very impressed by was the
very large number of leaders in the Middle East who had been
trained in U.S. colleges and universities.
I think it is a major reason why the leaders are with us
and understand us because they had an opportunity to live here.
And as a general point, I would add to your important concept
of the need for trained people.
I think it is very much in the interest of the United
States for people around the world to understand us from having
spent a significant amount of time here. And frankly, we need
to do the same in the other direction.
We need more Americans who have the authority of knowledge
that comes from being in a place where you don't speak the
language and in effect you are an infant again as you think
about what you are doing in the world.
So I am very, very sympathetic to your point that we need
trained people and we need the side benefit, if you will, of
people understanding each other's cultures a lot better. I
think it would help to reduce the tensions in the world.
And certainly as we look at important elements of how we
should stylize this $5 billion that the President's talking
about, this will be an important component in our thinking.
Senator Bennett. Is there any way we can get the folks at
IMF and the World Bank to put in some kind of human assessment
as they make their economic assessments?
Secretary O'Neill. Yes, sir, I think we can get their
attention.
Senator Bennett. Very good. Thank you, Mr. Chairman.
Senator Leahy. Thank you, Senator Bennett. Senator Reed.
OPENING STATEMENT OF SENATOR JACK REED
Senator Reed. Thank you, Mr. Chairman. Thank you, Mr.
Secretary.
I will echo what I believe we have all said and all
believe. We are spending a great deal of effort both in terms
of treasure and more importantly in terms of the lives of
American men and women in uniform to, as they say, drain the
swamp.
But I think we all recognize if your efforts
internationally do not succeed in terms of raising the standard
of living in so many parts of the world, that swamp fills up
very quickly. And so this is a very important topic.
It seems to me that in our programs in this regard there
has been a dichotomy between at least two points, raising the
standard of living and also encouraging American investment,
facilitating investment, et cetera. And these two views have
vied with each other for controlling our program direction.
It raises in my mind some very general questions, but I
think they have hopefully some import. How do we measure
results? Do we have a goal that is measurable, quantifiable or
in some way definable?
And do we have a multi-year plan to reach those goals?
Because we all recognize this cannot be accomplished by one
budget submission or one round of discussions. And if you might
comment on that, Mr. Secretary, I would appreciate it.
Secretary O'Neill. Thank you very much, Senator. Perhaps it
is useful to put down a couple of markers to begin with.
First of all, I think it's important to notice that around
the world a relatively good job in development progress has
been done over the last 40 or 50 years. A very, very large
component of the investment that was made was private sector
investment, foreign direct investment for practical purposes.
And it is also important to notice that money is--I am fond
of saying money is a coward. And what I mean by that is it goes
where it's likely to be treated well.
And so when you look at the conditions for success, for
more than usual a rapid rate of development, I think you'll
find some common conditions. One is that money is likely to be
treated well, and underneath that is the notion of a rule of
law and enforceable contracts and a minimum and hopefully
receding level of corruption.
And those are the conditions that bring on rates of growth
like those we have seen in Taiwan and South Korea and a few
other places that are very substantial.
Now, in terms of measuring results, I believe that one of
our most important measures should be the change in the average
standard, average income level of individuals in a country.
Because it is pretty unmistakable and it is pretty clear
whether you have made any progress or not.
Now, underneath that there are a whole set of questions
about distribution. And economists will give you more lectures
than you want to hear about the distributive effects of raising
the average income level. At least for me as a first
approximation, I'd take an increase in the average and then
we'll worry about the distribution question.
And especially to draw the difference between a place where
the average income level is $1 a day and on the other hand you
look at Korea and it is $24 a day, that's a lot of difference.
And you can deal with an awful lot of a distributional
equity within that huge difference. It almost doesn't matter
what the distributional consequences are.
So average income level is an important indicator I think
of--a change in average income level is an important indicator.
But I want to give you a more direct example of the kind of
measure that I believe we should work on in these millennium
grants.
In the millennium goals, the so-called millennium goals,
there is what I am sure was a heartfelt need to deal with the
subject of education. So the millennium goals say all children
should be going to school by 2015.
Now, no one could argue with that. But I would submit to
you it's not a worthwhile goal if nothing happens while the
kids are in school. And for too much of what goes on, I won't
name the country, but believe me this is a real circumstance
where 25 percent of the country's budget is spent on education,
and when the children graduate from high school, they are fully
prepared to do manual labor.
Now, I make that point because what we really want from
educational spending both here in the United States I would
say, and everyplace else, for me at least the goal should be
when children are 10 years old they should be able to read and
write and compute at a level so that if they never saw the
inside of an organized educational establishment again but had
access to a library, they could educate themselves to a level
that anyone would be proud to attain.
That is a real measurement of success that creates the
basis for what Senator Bennett was saying about the need for
educated and trained people. Having a lot of people with
certificates and no capability or knowledge is worthless.
One of the things I would say we have been guilty of, and
this is not to hammer the institutions, but that we in society
have been guilty of, we have been too ready to accept input
measures instead of output measures.
We have also I think been too ready to have a proliferation
of 100 desirable goals instead of the 5 or 10 that are
determinative of whether or not the whole society works.
So I think this charge that the President has given to me
and to Colin Powell to develop a measurement set for how we
should think about these millennium goals--I think is critical
that we do it well and that it be abetted by serious people who
care about these things.
Because if we get the measurements right, we are much more
likely to get everything that follows from this $5 billion
right.
Senator Reed. And Mr. Secretary, just quickly, there is
obviously a multi-year aspect of this, so that I know in the
Defense Department they have their 5-year fit-up. Are you
looking forward to a multi-year plan which you will share with
us along with the goals?
Secretary O'Neill. We are. We haven't yet landed on how we
think the ramp-up should take place. But the President's
committed to the idea that by 2006 and afterwards should be a
minimum of $5 billion incremental to where we are today, which
is to say 50 percent over the $10 billion that we use as a
benchmark for where we are going.
And in a way, let me tie my answer together with the
questions you and the chairman and Senator Bennett have asked.
I think, my own view is as we can demonstrate, that is to
say we and other people who care about these things including
the multilateral development banks and the rest can demonstrate
that we know what we are doing by demonstrated success, I don't
think those who follow us will have any hesitation in asking
for more. And I don't think the people of this country with
their great charitable spirit will hesitate for a moment to put
resources where demonstrated results can be shown.
Senator Reed. Thank you, Mr. Secretary. Thank you, Mr.
Chairman.
Senator Leahy. Thank you. Mr. Secretary, there was an
article in yesterday's Washington Post on how you would
maximize the effectiveness of foreign aid. And you are quoted
as saying: ``You say to foreign leaders you've got to create a
rule of law that people can depend on, enforceable contracts,
and you've got to stop being a part of the cycle of
corruption.'' I absolutely agree with you on that.
Now, on the one hand we read your quote in the paper and on
the other hand, we see the administration taking what seems to
be the opposite approach with large amounts of foreign
assistance. Take the case of Pakistan, for example. Pakistan
has been a key ally in our efforts against terrorism. But there
is a long history of government corruption in Pakistan.
In December, the administration provided $600 million for
budget support to Pakistan, with virtually no conditions on
that assistance. I can understand the reasons why it was done,
but it is almost as though we say, these are what our rules
are, unless of course we need you at the moment. And if we need
you, we will waive all the rules.
I do not see any indication the U.S. taxpayers will get
their money's worth for the $600 million. There are no strings
attached to a large amount of aid to a notoriously corrupt
government.
You were also quoted as saying we spend trillions of
dollars on foreign aid, with little to show for it. Given the
administration's approach with Pakistan, are we going to be in
the same situation we were in during the cold war when the
administrations of both parties shoveled money out to anybody
who said, we are anti-communist, regardless of how the money
was going to be spent.
Are we going to find ourselves in a similar situation as we
respond to international terrorism? If any nation says we are
anti-terrorist, or we have a good place on the map; is the
United States simply going to dole out large amounts of foreign
aid with no strings attached? You understand my concern.
Secretary O'Neill. I do. Let me go back.
Senator Leahy. And I can understand the thinking behind
providing $600 million to Pakistan, but----
Secretary O'Neill. I understand. Let me tell you my view of
this. And in order to do that, let me go back to November of
2000 which is a couple of months before President Bush took
office. And this is not to find fault with what the previous
administration did, but just to anchor the point.
I think in November of 2000 then Secretary Summers agreed
with a funding for Argentina in a very large package. And if I
remember correctly, the public and private aggregation of funds
was something like $43 billion.
And as you know, we came in saying we don't think this is
the way to do business. And in April we found ourselves in a
position of where Argentina had blown through the $43 billion
and we agreed to in effect another $20 billion package.
You know, when I talk to others in the administration
including the boss about this, I said I really think in the
longer run we know what we have said is true north. And that is
that we should not be the endless source of funds for countries
that don't meet these conditions of rule of law and no
corruption and enforceable contract.
But I don't think we can change the world overnight. It is
going to take some time. And we have to share--we have to
demonstrate goodwill. We have to show that we are not a
heartless people in changing policy, and in effect we have to
give people fair warning.
And so we did that. And in August, in the case of
Argentina, we agreed to another--a small package which wasn't
good enough to carry them through. And you know the dissolution
and the changes of governments that they have had.
And I guess I would offer you Turkey as another case where
they had a problematic economy, and working through the IMF
they have made some really remarkable changes in what was going
on there in order to secure another IMF package.
And all of this is by way of saying I think we need to be
really clear about where true north is. And for me true north
is about the role of development assistance in achieving the
conditions that we know are necessary to real economic
development that will inure to the benefit of raising the
average standard of living in these countries, and whereas you
say we have an issue of realpolitik that we not confuse that
with economic development, that we in effect use some
discipline on ourselves so that we know the difference between
economic development and assistance to an ally that's crucial
from a military point of view.
Senator Leahy. My problem is that the foreign assistance
budget is not even one-twentieth of the Defense Department. We
have to be very judicious in how we spend these funds, and I
get very concerned when we start providing large amounts of
assistance for political purposes.
For example, there was a piece in yesterday's Washington
Post on Uzbekistan, an autocratic nation with a terrible human
rights record. The Post said that President Karimov is quickly
learning the art of American clienthood as practiced by
friendly dictators.
First, be quickest among your neighbors to volunteer bases
and staging areas to the Pentagon. Next, serenade Washington
with speeches about your love of capitalism and democracy while
releasing a political prisoner to appease the State Department.
Finally, sit back and count the U.S. AID money that rolls in,
$160 million for Uzbekistan this year, while quietly sustaining
the repression that keeps you in power.
To their credit, the State Department has worked out an
agreement with Uzbekistan committing the government to making
democratic and economic reforms. The real test will be if the
administration and Congess will hold the Uzbekistan Government
to this agreement. We have already seen some troubling
statements from President Karimov when he was in town here
recently. For example, he said, we have already made a number
of these reforms. We have created a democracy in Uzbekistan.
Not by any rational standard is there a democracy in
Uzbekistan. I mean, this is like saying we have free elections
in Zimbabwe. Neither one exists. But if we are going to give
governments payoffs in order to obtain base and overflight
rights--well, why not just say that and request enough funds in
the foreign aid budget to accommodate these kinds of requests.
Secretary O'Neill. But, you know, Senator, your line of
questioning is very reminiscent of what I found when I said I
thought financial contagion was a man-made phenomenon. And
people said, well, what would you like to do about it?
And I said I think we ought to put people on notice when
it's clear that they are slipping into the financial abyss. And
the response I got was, well, you can't do that because it will
be a self-fulfilling prophecy.
And I think much the same about what you are saying, in a
way it goes to what Senator Bennett said earlier in his
introductory remarks. It would be really great if we started
telling the truth about all of this stuff on a regular basis.
It would sure make life a lot easier.
Senator Leahy. Well, we did not during the cold war.
Secretary O'Neill. Now is a good time to start.
Senator Leahy. Yeah, but we are not. I mean, why----
Secretary O'Neill. I am not----
Senator Leahy. One, I agree with you, but from what I have
seen, especially in the cases of Pakistan and Uzbekistan, we
may be heading in the wrong direction. Let us have the debate
up here. We, the Appropriations Committee, cannot even find out
how the money for our domestic programs that fight against
terrorism is being spent, say nothing about home-land defense
and whatnot, say nothing about overseas programs.
Why do not we just be very blunt and say, look, this is
payoff. We are buying your support for the moment.
The main problem with going down this road, Mr. Secretary,
is that the United States will have to be in a position to
close our eyes to human rights violations. We will have to
close our eyes to corruption. We will have to close our eyes to
the maltreatment of other nation's citizens. In other words, if
it is in our security interest to do so we will ignore all of
our important values such as human rights. But, if you don't
own territory in a region where we want to conduct military
operations or produce a lot of oil, then we'll go ahead and
lecture you.
I want to avoid setting a double standard: Tough conditions
on foreign aid to some nations, but no strings attached to
assistance to nations who happen to be strategically located at
the moment. We may have a little bit of trouble pulling some
people on with us when we need them if we start doing that. Now
maybe that is truth telling as Senator Bennett said.
But, I mean, we have got to figure out some way to balance
this. I think you and I agree on a lot of these things. But I
am just trying to figure how we balance it.
I do not want to get us into this problem we had for years
with the cold war because in the end it ended up--it really
ended up hurting us when we had some nations in Africa, for
example, where there may have been real opportunities to bring
about democracy, but because we were willing to close our eyes
to everything they were doing, our foreign assistance ended up
in Swiss bank accounts.
Poverty increased and instability increased. And now it is
hurting us.
Secretary O'Neill. I guess I don't think that our choices
are at war with each other so much as your question implies. I
think for an awful lot of these things it's surprising how much
people will change if you are willing to say what you really
believe up front.
It is not easy--it's not to say that things will change
overnight, but I don't think our choices are between putting
our values down and not. I really don't think it's that stark.
Senator Leahy. Well, I just want to make sure we do not get
into that, because frankly we have done that in the past. And I
fault both Democratic and Republican administrations. And the
temptation, there is always the short-term temptation, that the
end justifies the means this time.
I do not think it has to be that way. I think we can help
people. I think we can improve our security. I think we can do
the necessary short-term objectives, such as military
operations, but if we carefully and effectively target our
foreign assistance dollars, in the long run we will be far more
secure.
Fanaticism is fanaticism. But the more you improve
democracy, increase openness and reduce corruption, the more
you counter the conditions that help to breed fanaticism.
I know you have to leave, but Senator Bennett I think had
another question. I do not want to take all the time.
Senator Bennett. Mr. Secretary, can you expand on your
comment on financial contagion, that it is not inevitable.
Secretary O'Neill. Yes, sir. I think if you look at the
experience of the 1990s, we saw a phenomenon where in effect
the actions on the interventions of the international financial
institutions aided and abetted by the United States and other
major G-7 countries had decided that there was a great risk in
the world that if a large country or even a not-so-large
country was permitted to go into default on its publicly held
debt, that the world capital markets would transmit that
phenomenon around the world in a very fast fashion and that it
would endanger the whole world financial system.
I think this was a broadly held view and it is why there
were so many interventions in the last half of the 1990s. And
they were growing in size. And it is what we found when we got
here.
It was my view that the, if you will, the bailouts were a
way of saying to risk capital you don't really have any risk.
What I mean is this. If you went into a country that
inherently had a risk-adjusted cost of capital, say of 25
percent, that's a warning signal to an intelligent investor.
Because there is no way that you can get a 25 percent rate of
return unless you have got enormous risk that you won't get
your money back.
What was happening because of these interventions on--I
think with the best of intentions, was that we were teaching
the world financial markets that what looked like a 25 percent
rate of return was in fact a 25 percent rate of return because
the world taxpayers were going to bail you out if the country
failed.
I think we needed to demonstrate that people who put money
into these high-risk situations were going to be permitted to
lose it and not be bailed out by the world taxpayers.
I think we have accomplished that with the action that has
been taken in Argentina. We have demonstrated that we are not
going to bail out private capital. It thought it had found the
golden goose and the world taxpayers would bail them out.
Another thing that has happened that's really quite
important, I think we are now down to a very few countries in
the world that have fixed exchange rates, which I am convinced
is a good thing. Because if you don't have a fixed exchange
rate, it means the world capital markets are recalibrating
sovereign debt every day. And they are looking at your facts,
and they are looking at the risk.
It means that you don't put yourself in a position, an
individual country, where there can be a seeming falling off
the cliff for a country's financial position. So I think a
combination of moving a policy in a better direction and
unfolding of a more integrated free-flowing world economy is--
allows us to demonstrate contagion was indeed a man-made
phenomenon.
It is not something that we have to in effect be paying off
bribes, if you will, in order to defeat this phenomenon.
Senator Bennett. Bob Dole gave me the assignment to work on
the Mexican peso crisis. And I agree with you. I went through
that experience and I learned a lot from it. Can you elaborate
on the potential benefits of creating a mechanism for dealing
with sovereign bankruptcy?
Secretary O'Neill. I'd be happy to. I am sure you know that
Anne Krueger at the International Monetary Fund has put forward
a proposal about how we might in effect create the equivalent
of a U.S. chapter 11 process for countries that find themselves
in a difficult situation.
Let me first say this, that I think if we can move
countries toward the notion that the world standard is--every
country should have investment-grade debt, then the prospects
of having to use any kind of a mechanism including the chapter
11 mechanism goes down substantially. In an ideal world, we
should never have a national bankruptcy.
Senator Bennett. When you say investment-grade debt, you
are talking about the kind of debt we currently have with U.S.
Treasuries.
Secretary O'Neill. Yes. Exactly. So that for a practical
purpose today, one can think about a 5\1/4\-percent interest on
10-year securities. And in lots of developing countries the
equivalent rate is 25 percent.
That extra 20 percentage points is a measure of the risk
that is associated with some of these developing countries. And
then when they fall off the cliff, there is no limit. And you
go into the kind of meltdown situation we have in Argentina.
In fact, if we had an agreed world restructuring process
where you have regularized rules about how creditors and
debtors will be dealt with, it could have been used very well
in Argentina to cope with its problems.
We in the Treasury are working on these ideas with the
notion that it would be great to have this kind of standby
authority with the hope we never have to use it. But I think
this is another instrument that we can help to put in place
working with the IMF and the other institutions that will well
serve us.
It's hopefully a fire station where the only thing we do is
keep the dogs healthy and polish the brass.
Senator Bennett. Yeah. Well, when you talk about the need
for investment grade debts, you go against the standard country
club Republican view that says we have got to pay the debt down
to zero. And I have now repented in some of those views that I
held at some point.
I am having the same conversations with the current
chairman of the budget committee to try to get him to feel the
same way. Thank you, Mr. Chairman.
Senator Leahy. Thank you. I know you have to leave. Let me
ask you one last question. We met our $600 million HIPC
commitment last year. You are not requesting funds for debt
forgiveness this year. And I know the HIPC will not solve the
debt problems of the poorest countries, but are there plans or
proposals to expand debt forgiveness that the United States
might support?
Secretary O'Neill. Well, it is an issue that we continue to
look at. We'd like to see some additional evidence of how we
are doing with HIPC because you know, I think you know I am
going to personally go to Africa in May.
I am going to look at some of these things on the ground
and see how this debt relief has been translated into
improvements in the living conditions of real people. But it is
not an issue we have our minds closed to.
Senator Leahy. When you get back, could you and I get
together? I'd like to hear about the trip.
Secretary O'Neill. I'd be pleased to do that.
Senator Leahy. We will sit down and talk. I am sure there
will be some other Senators, but I wonder if we can do it
informally but I'd like to.
Secretary O'Neill. Right.
ADDITIONAL COMMITTEE QUESTIONS
Senator Leahy. 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 Patrick J. Leahy
monterrey conference on financing for development
Question. No one up here thinks that foreign aid is the solution to
the world's problems. Private flows of capital often dwarf the amount
of aid available. But as you have noted, the President himself has
said: ``A world where some live in comfort and plenty, while half of
the human race lives on less than $2 a day is neither just, nor
stable.''
The President has announced another $5 billion for development
assistance, beginning in 2004, conditioned on the performance of
governments that want our aid. That is a welcome step, although I want
to see the details, but it should be done this year, not in two years.
These are not programs that can wait. They deal directly with U.S.
national security. You yourself have described the horrors of AIDs, and
the misery of people living in poverty. Why wait?
Answer. The central development challenge we and other members of
the international development community face is how to bridge the large
gap between the enormous needs of the poorest countries and their
inability and/or capacity to use resources effectively. If a lack of
finance were the primary constraint to development in the poorest
countries, their problems would be so much easier to solve. So we have
to focus not only on the level of new U.S. assistance but on ways to
ensure this assistance will be effective in improving the lives of the
poor. I am currently working with the Secretary of State in exploring
ideas that will lead to the development of a set of clear, concrete and
objective criteria for measuring country performance in pursuing the
sound policies needed for the effective use of development assistance.
I also note that the President's budget request for next year includes
funding for the new replenishments of the International Development
Association and the African Development Fund where in both cases U.S.
contributions are set to rise by 18 percent above current funding
levels.
Question. As I said in my opening statement, any increase is
welcome, but is this really what the world's only superpower should be
spending?
Answer. I believe that President Bush's proposal provides an
enormous opportunity to spur economic growth and reduce poverty in the
poorest countries. It will increase core development assistance by 50
percent over the next three years. And the strong linkages to
demonstrated country performance will help ensure that the assistance
is effectively used in improving people's lives. Together with other
ongoing U.S. development assistance programs, and those of private U.S.
agencies, it will represent a very substantial U.S. engagement in
promoting economic and social development around the world.
conditionality
Question. You and the President have proposed a couple of
significant changes in the way foreign aid is administered.
First, you propose that half of the World Bank's aid to the poorest
countries be changed from loans to grants, so we don't just pile new
debt on top of old.
The Europeans have strongly opposed this proposal. Where does this
stand? Is agreement possible? Would your proposal make it possible to
channel more of the grant funds through non-governmental organizations,
rather than through governments?
Answer. As you know, a year ago, President Bush proposed that up to
50 percent of the funds provided by the multilateral development banks
to the poorest countries be provided as grants instead of loans. The
principle of substantially increased grant financing for the poorest
countries was embodied in an agreement among donors to the thirteenth
replenishment of the International Development Association. (IDA-13).
Under the agreement, between 18 and 21 percent of all IDA-13 financing
will be in the form of grants. Operationally, this means that all IDA
financing to the poorest countries for HIV/AIDS and virtually all for
other key social sectors in countries whose people live on less than a
dollar a day will be provided as grants. As is the case with IDA loans,
IDA grants will be provided to governments.
Question. Second, you and the President propose to link increases
in the U.S. contribution to IDA, and other U.S. assistance, to
measurable results in reducing poverty.
I agree this is needed, but usually it has been the Congress that
wants to set performance benchmarks, and the State Department and the
Treasury Department that want to water them down. Why is that? What
types of specific measurable results are you talking about--give me
some real examples.
Answer. As you note, the President's budget contains an innovative
proposal for a results-based contribution to IDA-13. Under this
proposal, additional U.S. funding for IDA is contingent on concrete
progress in achieving measurable results in the World Bank's programs
in the poorest countries. In the first year, an additional $100 million
in U.S. funding is linked to the establishment of a measurement and
evaluation system needed to support more successful assistance
programs, in addition to the completion of diagnostic surveys that
assess the adequacy of country fidicuiary and sectoral policies to
effectively utilize IDA funds. In the second year, an additional $200
million in U.S. funding is linked to measurable progress in improving
primary school completion rates, increasing immunization rates and
reducing the number of days and cost required to start a new business.
Question. I support conditioning our aid on the performance of
governments that want our aid. But what about other types of aid? For
example, why shouldn't we have similar performance requirements for the
aid we give the Colombian military?
Answer. U.S. foreign assistance serves a broad and often complex
range of U.S. economic, strategic and humanitarian interests around the
world. The terms and conditionalities of individual U.S. assistance
programs reflect the type and composition of each program and the
specific objectives it is intended to achieve. The proposed Millennium
Challenge Account is focused on achieving measurable economic
development results and the conditionalities are being designed
accordingly. The design of other programs such as U.S. assistance to
Colombia reflect the specific focus and objectives of the assistance
which is very different from that of the MCA.
budget--priorities
Question. You have requested $1.43 billion for the international
financial institutions. That is $263 million more than the fiscal year
2002 level. Of that increase, $177 million is to pay one-third of the
arrears we owe from past years.
We should pay these debts, and I commend you for requesting these
funds.
But there are many competing programs in the Foreign Operations
budget, and many of them are not adequately funded in the
Administration's request. Should we fund USAID's basic education
programs, or the World Bank? Should we fund international peacekeeping,
or the Asian Development Bank? These are types of choices we have to
make.
Jim Wolfensohn is a friend and I think he has the right vision for
the World Bank. But I remain disappointed with the Bank's performance.
Assuming we do not have enough money to do everything you want, what
are your highest priorities?
Answer. Our priorities are laid out in the President's budget
proposal. Our request for Treasury International Programs contains no
less--but also no more--than is needed to fulfill our obligations and
meet our policy objectives. The $1.43 billion we have requested for the
multilateral development banks in fiscal year 2003 consists of two
basic elements. $1.25 billion is requested to meet the United States'
annual funding commitments to the institutions. The annual commitments
are essential both to the ongoing operations of the institutions and to
U.S. leadership in improving the institutions' performance and ensuring
that U.S. taxpayer resources are used effectively to raise living
standards around the world. The $1.25 billion includes proposed
increases under new replenishments for the International Development
Association (IDA) and the African Development Fund (AfDF), concessional
windows that provide assistance intended to raise productivity and
improve the lives of people in the world's poorest countries. $178
million is requested to pay one-third of outstanding U.S. arrears to
the MDBs, which have risen for three consecutive years and now total
$534 million. It is imperative that the United States meet its
international commitments, and the Administration has laid out a three-
year plan to clear this rather substantial level of arrears.
Finally, our request includes $10 million for Treasury technical
assistance programs, which form an important part of our effort to
support countries facing economic transition or security issues, and
whose governments are committed to fundamental reforms. This request
will allow us to continue current programs in countries in Africa,
Asia, Central and South America and to expand into other countries
committed to sound economic reform policies. We expect to spend a
significant amount on anti-terrorist programs. Over half of the
traditional programs will be in Sub-Saharan Africa, as has been the
case for the past two years. The anti-terrorist programs will be global
in scope, with an emphasis on a group of about 20 countries that the
Administration has identified as having financial systems vulnerable to
misuse by terrorist organizations.
world bank report
Question. One of the things that really got my attention from
yesterday's Washington Post article about the World Bank report, is
that ``donors failed to appreciate how easily their efforts at
development could go awry; for example, they gave money to governments
that weren't genuinely committed to economic reform, and the
underestimated the importance of governance'--that is, the existance of
relatively uncorrupted, well-run bureaucracies and courts.''
I've lost count how many times I, and others up here, made those
arguments, and how time and again we were ignored. It still happens! In
fact, the World Bank itself hasn't learned it. No one could call the
World Bank a ``well-run Bureaucracy.'' I doubt I ever will, at least
not until they get to the bottom of that fiasco with the cost overruns
for the new building a few years ago. That was a disgrace, and so was
the coverup. And the wrong people lost their jobs.
Having said that, there are many intelligent, hard working,
committed people at the World Bank. But like most bureaucracies, key
managers seem more interested in preserving the status quo, than good
governance.
How do we change that?
Answer. First, we need to hold the Bank accountable for delivering
measurable results. Just as lending allocations should be based on a
country's commitment to reform, so too should shareholders' support for
the Bank be conditioned on the Bank's satisfactory achievement of key
results. In all cases, development assistance can only be effective if
countries create an environment with the institutional conditions and
incentives required to encourage individual enterprise. These include
the rule of law, enforceable contracts, stable and transparent
government, and a serious commitment to eliminate corruption.
Second, we need to be vigilant in conveying the message that
governance is important. I understand that based on the most recent
performance-based allocation review for IDA, 17 countries will have
their IDA lending allocations significantly reduced due to poor
governance ratings. The U.S. needs to continue to support this
framework and apply high priority to its enforcement. We should be
prepared to support the World Bank when it cuts back assistance to
countries that fail to deliver effective governance and create
conditions conducive to economic growth.
Finally, we need to lead by example. Our bilateral assistance must
be intently focused on ensuring that governance plays a critical part
in the level of assistance delivered to developing countries. As the
President has stated, good government is an essential condition of
development. To that end, the Administration is working on a set of
governance indicators that will determine eligibility for assistance
from the President's proposed Millennium Challenge Account, rewarding
nations that root out corruption, respect human rights, and adhere to
the rule of law.
budget--global environment facility
Question. Your budget document makes a strong case for funding the
GEF. For years, some House members opposed this funding, arguing that
it was a ``back door'' way to fund the Kyoto Protocol. In fact, it was
nothing of the sort. Do you agree that the GEF is supporting important
environment activities that are consistent with U.S. interests?
Answer. GEF supports important environment activities that are
consistent with U.S. interests. Examples of GEF projects in its core
activities include conserving biodiversity, expanding clean energy
production and more efficient energy use, cleaning up international
waters and protecting fisheries, and phasing out ozone-depleting
chemicals in Eastern Europe and Central Asia. Under the new
replenishment currently under discussion, the GEF will expand its
activities to support efforts to reduce persistent organic pollutants
(POPs), which directly affect the United States, particularly the Great
Lakes region and Alaska.
To be sure, there is room for improvement. That is why the United
States is advancing a strong reform agenda to help the GEF improve its
performance and focus more on results.
world bank management
Question. For years, I have expressed concerns about the World
Bank's treatment of its own staff. I have tried to encourage the Bank
to reform its grievance procedures. There has been some progress, but
the basic culture remains the same. Retaliation of managers against
employees who make complaints remains a serious problem. I am not
convinced that cases I saw mishandled five or ten years ago, would be
handled differently today.
Until there are people responsible for operations down there who we
have confidence in, I am not going to bend over backwards to help the
World Bank. I am tired of the Bank lecturing other governments about
good governance, pension systems, justice, and all the things those
governments do need, and not applying the same standards to itself. I
hope you will look into there issues, because if you talk to the right
people, you will discover that all is not as it should be.
The Bank has established a new ``Institutional Integrity
Department.'' Are you familiar with this? Its purpose is to investigate
fraud and abuse. No one supports fraud and abuse. But what is the scope
of its authority?
Answer. I understand that the World Bank established the new
Department of Institutional Integrity (INT) in November 2000, based on
recommendations by former U.S. Attorney General Richard Thornburgh. INT
has two core functions: first, to investigate allegations of fraud and
corruption in Bank projects, and second, to investigate allegations of
misconduct against Bank staff members.
Question. What protections do staff have against false accusations?
Or invasions of privacy?
Answer. The Bank's Staff Rules provide that knowingly making false
accusations is itself misconduct and, therefore, is subject to
disciplinary measures. The Bank also has a number of rules and
procedures in place that protect the privacy of staff members. For
example, staff members are permitted to forward allegations
confidentially or anonymously. In addition, staff members' e-mails and
computer files can only be reviewed by investigators with the
permission of a Managing Director and the General Counsel. The
investigators working in the Department of Institutional Integrity are
also staff members of the Bank and subject to the same Staff Rules as
their colleagues in other parts of the institution.
Overall, I understand that the rights of Bank staff members have
been unaffected by the creation of the new Department. For example, any
staff member accused of misconduct must receive the allegations against
him or her in writing, must have an opportunity to respond in writing,
and must have an opportunity to review the investigators' report before
it is submitted to the Vice President, Human Resources for a final
decision. Staff members have the right to appeal misconduct decisions
to the Bank's Appeals Committee and Administrative Tribunal.
Question. If a staff member is questioned, do they have the right
to a lawyer to be present, or a member of the Staff Association? Can
you find out?
Answer. Staff members are not permitted to be represented by
counsel in interviews with the INT. According to Bank staff, INT's
interviews are administrative in nature as the Bank has no authority to
conduct criminal investigations. However, I understand that staff
members have a right to be accompanied in interviews by another staff
member, including a Staff Association representative, provided that the
accompanying staff member has no involvement in the issues under
investigation.
afghanistan
Question. Many foreign officials are grossly underpaid, and that
often leads to corruption.
A Treasury technical assistance team is in Afghanistan helping the
government with basic financial issues, such as putting together a
budget. They tell us that they have seen very little--if any--
corruption and there is a real opportunity here to build an effective
government. However, the Treasury team told us that the budget is short
some $350 million to $500 million to pay the salaries of government
workers.
This budget shortfall could cause government officials to become
involved in illegal activities to supplement their incomes,
particularly drug trafficking. This would be a major impediment to
Afghanistan's development over the long term, and could lead to
situations--that you have described--where foreign aid is siphoned off
by corrupt government officials.
What is the Administration doing, if anything, to try to prevent
this from happening?
Answer. The Administration has led the international donor effort
to help the Afghanistan government meet its needs in an effective and
transparent manner, including meeting the needs of the recurrent budget
required to pay the salaries of government workers and maintain
government operations. The Administration is working closely with other
co-chairs of the Afghan Reconstruction Steering Group (ARSG) (EU/EC,
Japan and Saudi Arabia) and the international financial institutions to
ensure that the Afghan government has sufficient financial resources to
meet its recurrent budget costs as it works to get its domestic revenue
streams online. As part of this effort, the United States is
contributing $5 million to the Afghan Reconstruction Trust Fund, which
will assist the Afghan government to meet its budget needs. Treasury's
technical assistance advisor is assisting the Ministry of Finance with
this undertaking.
tropical forest debt relief
Question. In 1998, Congress passed the Tropical Forest Conservation
Act to protect tropical forests in developing countries through debt
reduction.
Last year, Congress appropriated $5 million and authorized up to
$20 million in unobligated balances to help implement this program.
This is an important program with bipartisan support, and I want to be
sure it gets as much funding as possible. How much of those unobligated
funds will be used for debt reduction?
Answer. For fiscal year 2002, Treasury had $6 million in
unobligated balances to be used towards debt reduction under the TFCA.
This amount, combined with the $5 million appropriation, allowed a
total of $11 million to be allocated for TFCA in fiscal year 2002.
Additional unobligated balances could be made available once Treasury
has determined the final cost of bilateral debt reduction under the
Highly Indebted Poor Countries (HIPC) program. For fiscal year 2002,
$11 million has been allocated for agreements with Peru ($5.5 million)
and the Philippines ($5.5 million). Negotiations with Peru have
concluded, and discussions with Philippines are ongoing.
Question. The fiscal year 2003 budget request contains $40 million
in transfer authority from USAID's programs to pay for tropical forest
debt relief. This is not what we want to do. These are Treasury
programs that should be funded by Treasury. Why were these funds
requested this way?
Answer. The Administration determined that the flexibility to use
the appropriation for grants and for debt reduction would best be
achieved by giving the appropriation to USAID with authority to
transfer funds to Treasury for debt reduction under the TFCA.
Question. How much, regardless of where the money comes from, do
you expect to spend on this program in fiscal year 2003?
Answer. Including countries that have already negotiated TFCA
agreements, there are currently eight countries eligible for the
program (Bangladesh, Belize, El Salvador, Jamaica, Panama, Peru,
Philippines, and Thailand). These countries alone owe the U.S.
Government over $1.9 billion in concessional debt which could be
reduced through TFCA programs in these countries, and there are
additional countries that are potentially eligible for the TFCA
program. Treasury staff estimate that the United States can program for
TFCA in fiscal year 2003 the amount of funds requested by the
President's budget. However, the inter-agency process will determine
fiscal year 2003 country allocations.
______
Questions Submitted by Senator Richard J. Durbin
monitoring results
Question. In your testimony, you called for measurable results from
the multilateral development banks, and further said that the United
States would make additional funding in future years above the fiscal
year 2003 baseline subject to achievement of such results.
Could you please be more specific about what indicators of success
in health, education, and private-sector development you intend to base
your judgment on?
Answer. The President's budget contains an innovative proposal for
a results-based contribution to IDA-13, under which additional U.S.
funding for IDA is contingent on concrete progress in achieving
measurable results in the World Bank's programs in the poorest
countries. In the first year, an additional $100 million in U.S.
funding is linked to the establishment of a measurement and evaluation
system needed to support more successful assistance programs, in
addition to the completion of diagnostic surveys that assess the
adequacy of country fidicuiary and sectoral policies to effectively
utilize IDA funds. In the second year, an additional $200 million in
U.S. funding is linked to measurable results in improving primary
school completion rates, increasing immunization rates and reducing the
number of days and cost required to start a new business.
Question. Will you consider the status of women in your indicators?
Answer. The indicators agreed upon in the recent IDA replenishment
agreement does not include a formal indicator on the status of women.
Question. How is this approach different from the conditions on aid
that the multilateral development banks have been imposing on aid?
Answer. The creation of a monitoring and evaluation system and
willingness by the World Bank to track progress on a set of indicators
is a significant new development, and directly attributable to U.S.
pressure on the Bank and other shareholders to insist on measurable
results in the institution. This is separate from the performance-based
allocation system that distributes Bank resources among eligible
borrowers based on their policy performance. Our new proposal is an
incentive-based contribution system. It would measure progress made on
a set of select, high development-impact indicators and the impact that
the World Bank itself had on delivering results. If sufficient progress
is made, the Bank would receive additional donor resources. Moreover,
this approach focuses on real, achieved outcomes, not promises of
policy reform that often fail to come to fruition. It builds on the
performance system already incorporated into country assistance and is
fundamental to maintaining and building support for IDA and other
development assistance.
Question. Can you tell me how you will measure poverty alleviation,
and where that goal fits in your measurement success?
Answer. All the indicators for which we have signaled our support
have a direct link to alleviating poverty, are consistent with IDA's
mission and are fairly well tracked in most countries. Most
importantly, the pursuit of increased living standards and economic
growth is vital to effective poverty alleviation and something to which
this Administration is committed.
development, hiv/aids, and results-based aid
Question. Many countries will be unable to develop economically,
and in fact may slide further into poverty because of the AIDS
epidemic. Many countries are losing their civil servants and teachers--
and in fact a whole generation of parents. How will you account for the
HIV/AIDS epidemic in your results-based development approach?
Answer. I fully recognize the disastrous economic and social impact
that the HIV/AIDS pandemic is having on many of the poorest countries.
I saw the impact first-hand during my recent trip to Africa.
Education is one of the areas particularly hard hit, with the
disease having a devastating impact on students, teachers, and the
operations of schools. The staggering impact on the pandemic is
illustrated by the fact that there are now over 13 million AIDS orphans
with this number projected to reach 35 million by 2010.
The severity of the crisis poses an enormous development challenge.
It also underscores the crucial importance of doing all that is
possible in often difficult circumstances to ensure that donor
assistance is well-targeted, well-coordinated, and rigorous in
measuring results in terms of improvements in the number of people
treated and, over the longer-term, in the stabilization and eventual
reduction in the number of people infected.
tools for measuring poverty
Question. I know the World Bank measures poverty based on a
measurement of how many dollars per day on a purchasing power parity
basis a person makes. Yet, when program officer's work out in the
field, it is often difficult to determine someone's income. Are you
working on other tools to measure poverty?
Answer. The collection of accurate and up-to-date economic and
social data poses a major challenge in the poorest countries. This
applies to per capita income as well as to data on such key social
information as infant and child mortality. Yet, a good poverty
monitoring system is essential both to measure progress and to track
the quantitative and qualitative impacts of domestic and external
resources. The World Bank and its development partners are
collaborating in efforts to improve country systems and capacity for
poverty monitoring. Over the last five years there have been
improvements in the availability and comparability of country-level
data on household consumption, income, and other indicators. We
continue to attach high importance to improvements in the ability to
measure and assess results in this area.
user fees
Question. Some people have charged that user fees placed on basic
health and basic education prevent the poorest people from access to
health care and education. What has the Treasury Department done to
assess the impact of user fees?
Answer. Treasury agrees that user fees for primary education and
health should not be imposed on the poor. Cost recovery for primary
health care and primary education services should only be considered
after governments have taken steps to maximize the efficiency and
equity of public expenditures. If cost recovery for these services
cannot be avoided, the poor should be expressly exempted from user fees
and service charges, and fee systems should be carefully monitored to
ensure that exemption mechanisms function as intended.
That said, Treasury has not found any evidence in its oversight of
loans, country strategies and institutional policies that the
multilateral development banks are conditioning their lending on the
payment of user fees, payment of service charges, cost recovery, cost
sharing or community financing charges by the poor for basic health
care or education services.
______
Questions Submitted by Senator Mitch McConnell
foreign assistance budget
Question. Mr. Secretary, you have been singled out by the press as
a ``chief foe'' to increasing foreign assistance programs. What are
your objections to a larger foreign assistance budget?
Answer. I have a very strong commitment to advancing economic
development and recognize the importance of helping the poorest
countries in their efforts to increase economic growth and reduce
poverty. My objection is to focusing solely on dollar amounts of
foreign assistance instead of results in improving the lives of the
poor. Dollars make a difference in creating growth and higher living
standards only if they are used effectively. I believe that wealthy
nations such as the United States have a responsibility to see that
their assistance produces real improvements in the daily lives of
people in the poorest countries. Indeed, I strongly support the
President's proposal to increase the U.S. contributions to the African
Development Fund and International Development Association by 18
percent, but we are insisting on measurable results as part of this
increase. I also support the Millennium Challenge Account proposal,
which will represent a 50 percent increase in U.S. development
assistance, because it will require recipients to have a strong policy
framework that should lead to a return on our investment.
Question. What do you believe is an appropriate increase in our
foreign aid budget in the post-September 11 world, and what adjustments
should we make to ensure that our foreign aid dollars are used
effectively?
Answer. I strongly support President Bush's landmark proposal to
increase development assistance substantially. The Administration's
fiscal year 2003 budget request of $1.447 billion for Treasury's
international programs reflects our goals of promoting economic growth
around the world insisting that the multilateral development banks show
results in raising living standards and reducing poverty. The $1.25
billion request for annual commitments to the multilateral development
banks--which includes 18 percent increases for the International
Development Association (IDA) and the African Development Fund--will
advance U.S. leadership in improving the institutions' performance and
ensuring that U.S. taxpayer resources produce measurable results in
raising living standards around the world. It was because of such U.S.
leadership that the recently concluded IDA replenishment agreement
includes the establishment of a measurement and evaluation system to
measure developing countries' progress against a set of key development
indicators. The agreement also includes concrete benchmarks for
achievement of results in areas of health, education, and private
sector development. The President's budget links $300 million in the
U.S. contribution to IDA over the next three years to achieving results
in these areas.
U.S. leadership also demands that the United States meet its
international commitments. The Administration has laid out a three-year
plan to clear the rather substantial level of outstanding arrears to
the multilateral development banks. The President's fiscal year 2003
budget includes a request for $178 million to pay one-third of these
arrears, which now total $534 million.
Finally, our request includes $10 million for Treasury technical
assistance programs, which form an important part of our effort to
support countries facing economic transition or security issues, and
whose governments are committed to fundamental reforms. This request
will allow us to continue current programs in countries in Africa,
Asia, Central and South America and to expand into other countries
committed to sound economic reform policies. We expect to spend a
significant amount on anti-terrorist programs. Over half of the
traditional programs will be in Sub-Saharan Africa, as has been the
case for the past two years. The anti-terrorist programs will be global
in scope, with an emphasis on a group of about 20 countries that the
Administration has identified as having financial systems vulnerable to
misuse by terrorist organizations.
debt relief/poverty reduction
Question. Beyond the Heavily Indebted Poor Countries (HIPC)
Initiative, are there any additional international efforts to secure
debt relief for impoverished countries?
Answer. Although there have been calls by some non-governmental
organizations to go beyond the HIPC initiative, I believe that we
should focus on effective implementation of the current HIPC program,
which is still not fully financed. As a means of helping to avoid a
build-up of unsustainable debt in the future, the President proposed
that the World Bank and other multilateral development banks provide up
to 50 percent of their funding to the poorest countries in the form of
grants instead of loans. The principle of substantially increased grant
financing for the poorest countries was embodied in an agreement among
donors to the thirteenth replenishment of the International Development
Association. (IDA-13). Under the agreement, all IDA financing to the
poorest countries for HIV/AIDS and virtually all for other key social
sectors in countries whose people live on less than a dollar a day will
be provided as grants.
foreign aid linkages
Question. News reports from the ongoing International Conference on
Financing for Development in Monterrey, Mexico indicate that foreign
donors recognize corruption and lack of political will as a major
impediment to the alleviation of poverty. Are other donors willing to
make the linkage between the provision of foreign aid and measurable
progress on good governance?
Answer. Corruption remains an enormous barrier to both domestic and
foreign investment and a tax on economic efficiency and social progress
that poor countries can least afford. This is recognized not just by
donors, but by the international community at large. The Monterrey
Consensus that was endorsed by all participants in the Conference was
very clear in recognizing that fighting corruption at all levels is a
development priority.
Question. Given the absolute failure of the donor community to take
on controversial issues in some countries (such as Cambodia and Haiti),
what assurances exist that the donors themselves possess the political
will to hold foreign governments accountable for their actions?
Answer. I believe that the donor community is coming to recognize
the simple truth that sensible economic policy choices that raise
economic growth lie at the core of all successful poverty reduction
stories. Research has clearly shown that when a country's policies are
sound, external assistance can have a significant and positive impact.
Conversely, when public policies are poor, assistance will have no or
even negative impact.
For these reasons, country performance is becoming a hallmark of
development assistance strategies. For example, the forty donor
countries that contribute to the International Development Association
(IDA) have agreed on twenty performance criteria for the allocation of
IDA funding. These criteria accord special weight to governance. For
the IDA-13 period, 17 countries will have their IDA lending allocations
significantly reduced due to poor governance ratings.
Question. What criteria are you considering to measure policy
performance under the President's new foreign assistance initiative in
the areas of good governance, health and education reform, and sound
economic policies?
Answer. In all of these areas, strong leadership is an essential
criterion. We are considering a number of measures of policy
performance from sources such as business surveys, expert evaluations,
and country/multinational statistical agencies. The key issues we are
trying to capture in each area include good governance (political
freedoms, civil rights, rule of law, minimal corruption, enforcement of
contracts, property rights); health and education (commitment to
health/education, quality of health/education; and sound economic
policies (macroeconomic stability, open markets, freedom from excessive
regulation or government interference).
Question. The rule of law is a critical factor in attracting
legitimate private sector investment in developing countries. What
additional steps can the United States take to ensure that foreign
governments understand the linkages between the rule of law and
investment?
Answer. The private sector's role is the engine of economic growth.
We should stress that in all our statements. We should stress that
governments must take the responsibility for creating the institutional
conditions and incentives required to encourage productivity and
individual enterprise. These depend on the rule of law, enforceable
contracts, and stable and transparent government. The President has
also made it clear that the proposed Millennium Challenge Account will
reward nations that adhere to the rule of law, root out corruption, and
respect human rights.
Question. What importance do you place on linking political
reforms--that is, the democratic systems of governance--to our foreign
assistance programs?
Answer. Good government is an essential condition of development,
and countries that rule justly, invest in their people, and encourage
economic freedom will receive more economic assistance from the United
States. As President Bush has emphasized, all people deserve
governments instituted by their own consent. The promotion of
democratic system of government is and will remain a fundamental goal
of U.S. foreign policy.
grants versus loans
Question. What is more appropriate for funding HIV/AIDS programs:
loans or grants?
Answer. Grants are more appropriate. One of the reasons why the
United States supports a significant increase in grants funding for the
poorest countries is that many projects that the MDBs pursue in these
countries do not generate the necessary revenues to service loans.
Funding to address the HIV/AIDS pandemic in Africa is a very good
example of the type of project where grant funding is the most
appropriate form of assistance. We believe that such assistance cannot
be viewed as a revenue generating measure and should therefore be
delivered entirely on grant terms.
terrorist financing
Question. A recent AP story indicated that the al-Qaida terrorist
network is again transferring funds for its operations. Are these
reports accurate, and how and where is the money being moved?
Answer. While there is no question that al-Qaida capacities have
been significantly impaired by military, law enforcement, and financial
actions, nobody claims that we have succeeded in destroying this
organization entirely. It is prudent to assume that, despite the
successes that we have achieved in disrupting their finances, they are
attempting to re-group and we must maintain the vigilance that has
produced results so far. We, and our colleagues in the intelligence
community, are aware of the press reports you mention, but I feel that
to comment too directly about specific allegations could reveal
intelligence sources and methods.
Question. What U.S. Government departments and agencies are
involved in combating terrorist finance, and who is leading our
efforts?
Answer. The USG effort in fighting terrorist finance is truly
collaborative. It involves the State Department, the Department of
Justice, various agencies of the intelligence community, the NSC, and
many bureaus and offices of the Treasury Department. The President's
Budget states on page 268: ``Treasury leads the nation's war against
the financing of global terrorism.'' Thus, Treasury has led the
multilateral campaign to identify, disrupt, and dismantle terrorist
financing networks. Treasury chairs an interagency committee that is
devoted to addressing issues relating to terrorist financing. In
addition to Treasury, this committee is made up of representatives from
the CIA, DOD, FBI, Justice, NSA, NSC and State.
Question. The fiscal year 2003 request contains $3 million for
programs to combat terrorist financing. Please describe these
activities, and are additional funds necessary to more effectively
block assets?
Answer. The funding requested in fiscal year 2003 will be used for
FTE annualization. If OFAC determines additional assets are necessary,
it will work with the Treasury Department and OMB through the budget
process.
Question. Are there specific countries that are not cooperating
with U.S. efforts to locate and block the assets of terrorists? If so,
what action is being taken?
Answer. We have been generally successful in achieving
international cooperation in the war on terrorist financing. All but a
small handful of countries (all of which are already the object of U.S.
sanctions) have expressed their support for the U.S. led war on
terrorist financing. Over 160 countries and jurisdictions across the
globe have implemented blocking orders against the assets of terrorists
and their supporters. We are actively cooperating with the non-
participating countries to implement the necessary legislation and
regulations to have these countries join in our global efforts.
china
Question. The World Bank claims as a result of foreign assistance
``the number of rural poor people [in China] fell from 250 million to
34 million in two decades of reform.''
Given that China's transient labor force is estimated to be as high
as 120 million people, is this claim legitimate? Did the World Bank
rely on official PRC statistics for these figures?
Answer. China's strong economic performance has been driven by its
market-oriented reforms. China's poverty headcount has indeed dropped
dramatically, according to official statistics and a variety of
independent estimates. The great bulk of success was due to domestic
rural policies that: (1) returned land to individual household
management; (2) built roads, irrigation systems, power lines and other
basic infrastructure; and (3) encouraged rural industries and migration
of rural workers to distant places of employment.
China's transient labor in fact has helped reduce poverty. Any
family in China that only farms is virtually certain to be poor. The
source of rural income and consumption growth in the past five years
has been off-farm employment.
Question. How important do you view rule of law programs that the
U.S. sponsors in China, and should we be doing more to help bring about
change (economic, legal and political) on the Mainland?
Answer. Across a wide range of legal institutions and participants,
lack of appropriate education and relevant experience cripple China's
legal system. The U.S.-sponsored rule-of-law programs, including legal
training and environmental law, are small but important contributions
toward gradual improvement in this area. Active programs, such as rule-
of-law programs and other bilateral contacts, promote economic, legal
and political change. In my view, targeted projects like these are a
cost-effective way to encourage progress in China's market-oriented
reforms.
SUBCOMMITTEE RECESS
Senator Leahy. Thank you very much, that concludes the
hearing. The subcommittee will stand in recess until 10 a.m.,
Wednesday, April 24, when we will meet in room SD-226 to hear
from the Secretary of State, Hon. Colin Powell.
[Whereupon, at 3:33 p.m., Tuesday, March 19, the
subcommittee was recessed, to reconvene at 10 a.m., Wednesday,
April 24.]
FOREIGN OPERATIONS, EXPORT FINANCING, AND RELATED PROGRAMS
APPROPRIATIONS FOR FISCAL YEAR 2003
----------
WEDNESDAY, APRIL 24, 2002
U.S. Senate,
Subcommittee of the Committee on Appropriations,
Washington, DC.
The subcommittee met at 10:07 a.m., in room SD-226, Dirksen
Senate Office Building, Hon. Patrick J. Leahy (chairman)
presiding.
Present: Senators Leahy, Durbin, Reed, McConnell, Specter,
and Bennett.
DEPARTMENT OF STATE
Office of the Secretary
STATEMENT OF HON. COLIN L. POWELL, SECRETARY OF STATE
OPENING STATEMENT OF SENATOR PATRICK J. LEAHY
Senator Leahy. Good morning, Mr. Secretary, and welcome to
this hearing. Again, I must express the appreciation of Senator
McConnell, myself, and other members of the committee for the
breakfast meeting with you yesterday. I thought it was a very
candid and very welcome briefing, especially following an
extraordinary diplomatic trip that you took on behalf of our
country.
I would like to begin our session today with some words
that express feelings that are strongly felt in this committee,
the Senate, and across the Nation. This week, our neighbor,
Canada, is burying four of its soldiers who lost their lives as
a result of an accidental and tragic bombing in Afghanistan,
and I want to take this opportunity to pay tribute to these
men. They stood shoulder to shoulder with our troops, and they
lost their lives helping us defeat terrorism in Afghanistan. It
is a terrible tragedy. We should not only thank the Canadian
soldiers but also convey our deepest condolences to their
families.
Marcelle and I live about an hour's drive from the Canadian
border, and we think of Canada as that giant to the north. We
sometimes forget Canada is our largest trading partner, and we
have no better friends. Many of us in the United States have
ties historically or otherwise to Canada. My wife is a first
generation American of Canadian descent, and both her parents
were Canadians.
Canada, like so many countries, also lost sons and
daughters on September 11, and we grieve for them as we grieve
for our own. It is hard to think of any country with whom we
have closer and more personal ties. Mr. Secretary, I know you
agree with me in these feelings.
Secretary Powell. Yes, sir.
Senator Leahy. Mr. Secretary, I want to commend you for the
tone you have brought to the office, the way in which you have
boosted morale at the Department, and the hard work you are
doing. I would like to commend your legislative affairs staff.
They are doing a superb job, and rarely get acknowledged.
Now, this is an important time for you to be speaking to
the Congress and the American people. As I mentioned earlier,
you have just returned from the Middle East. I am going to put
much of my statement in the record because I want to save time
for questions. I think you may want to do the same with your
opening statement.
When we see the horrifying violence in the Middle East,
something that none of us can overlook. I am forced to
reluctantly conclude that the administration blundered badly by
staying away when our leadership was needed most. Now, it may
have been because the President was preoccupied with the war on
terrorism, did not want to be identified with a policy that his
predecessor was so deeply engaged in, or was concerned that we
may be dragged into a quagmire that could end in failure.
Whatever the reason, it was a big mistake. We are the only
country that can effectively play the role of intermediary in
the Middle East. By staying away, the situation has become so
polarized and steeped in bitterness and hatred, the task of
bringing peace to the region is now infinitely harder.
Throughout this period, Mr. Secretary, I think you have
been the exception. You have been a voice for engagement, for
tolerance, and for fairness toward both sides. We are grateful
that you have traveled to the region and helped to reduce
tensions, especially among Israel's neighbors that were close
to spinning out of control. I hope your trip is the beginning
of a more forceful strategy for peace, because it is clear that
normal diplomatic efforts have failed.
Both sides say they want to live in peace, but whatever
they have gained or suffered in the past few weeks has, I
believe, only made peace more elusive. A two-state solution is
the only solution, and that means a Palestinian state that is
viable, that is worth living for, and not a state in name only.
For the Israelis, it means being able to live free of terror
and fear.
Suicide bombings or other deliberate attacks against
civilians are acts of terrorism. They can never be justified.
No matter what definition they are given, these acts of terror
are not justified today, they were not justified yesterday, and
they will not be justified tomorrow.
In fact, the strategy of the Palestinian leadership has
been a disaster for the Israeli people, for the Palestinian
people and for the entire region. Mr. Arafat has repeatedly
deceived his own people. The Palestinians are industrious,
compassionate, and proud people. They deserve far better.
As long as either side deprives the other of the freedom,
the dignity, and the security to which all people are entitled,
the bloodshed will continue. President Bush was right when he
said there has been a lack of leadership from both sides, and
that is why, more than ever, strong U.S. leadership is needed.
I hope that you, Mr. Secretary, will be given the support you
need from the White House to provide that leadership.
On the issue of Afghanistan, I believe our deliveries of
aid have fallen short. The President called for a Marshall Plan
for Afghanistan, but he has not requested adequate resources or
taken the steps to provide sufficient humanitarian assistance
or enhance security, both of which are desperately needed. I
would like to discuss this issue further with you over the
course of this hearing.
I expect the Congress, as I mentioned to you when we came
in, will support much of what you have asked for in the
supplemental, but I am not happy about the sweeping authority
the administration proposes for much of the funds. Your lawyers
have sought to waive existing laws, including most human rights
conditions and other restrictions, even though you want to give
this aid to some of the most authoritarian, corrupt, and
backward governments in the world. Clearly, this does not
square with the President's recent admonition that we should
tie our foreign aid to good governance, sound economic
policies, and a commitment to alleviating poverty. I do not
want us to make the same mistake that administrations of both
parties made during the cold war, when governments that did
little more than declare themselves anticommunist would receive
foreign aid no matter how corrupt they might be. By doing this,
we failed to promote the basic values--democracy, economic
freedom, and human rights--that make this Nation great. As the
cold war began to wind down, we followed a similar pattern by
providing assistance to authoritarian governments that declared
themselves to be anti-drug. With the supplemental, I am afraid
that we are starting down a road where we give assistance to
nations who claim to be anti-terror, without pushing for reform
in other key areas.
We have high standards in this country. You have maintained
those standards both in your military career and in your career
as a diplomat. I just want to make sure U.S. aid helps to
promote these high standards. I will put the rest of my
statement in the record, and yield to my good friend, the
Senator from Kentucky.
[The statement follows:]
Prepared Statement of Senator Patrick J. Leahy
I would like to begin our session today with some words that
express feelings that are strongly felt on this Committee, in the
Senate and across our nations.
This week, Canada is burying four of its soldiers who lost their
lives as a result of the accidental bombing in Afghanistan. I want to
take this opportunity to pay tribute to these men. They stood shoulder
to shoulder with our own troops and lost their lives helping us defeat
terrorism in Afghanistan. It was a terrible tragedy, and we should not
only thank the Canadians, but also convey our deepest condolences to
their families.
As a Vermonter who thinks of Canada as ``that giant to the north,''
we sometimes forget that Canada is our largest trading partner and that
we have no better friend. Canada, like so many countries, also lost
sons and daughters on September 11th, and we grieve for them as we
grieve for our own.
Mr. Secretary, we welcome you here, and we commend you for the tone
you have brought to the office, the morale you have lifted at the
Department, and the hard work you are doing. I also want to commend
your legislative affairs staff. They are doing a superb job.
With so much attention on the Middle East--and you just having
returned from there--this is an important time for you to be speaking
to the Congress and to the American people.
I am going to put most of my statement in the record because I want
to save time for questions. I would also ask you to keep your prepared
remarks brief for the same reason. We have a lot to discuss and not
very much time.
Mr. Secretary, we are all preoccupied with the horrifying violence
in the Middle East. My personal opinion is that the Administration
blundered badly by staying away when our leadership was needed most.
Whether it was because President Bush did not want to be identified
with a policy that his predecessor was so deeply engaged in, or because
his advisors were afraid that he would be drawn into a quagmire that
could end in failure, it was a big mistake.
The United States is the only country that can play the role of
intermediary in the Middle East. The situation has become so polarized,
so steeped in bitterness and hatred, that our task is now infinitely
harder. Throughout this period, I think you have been the exception.
You have been a voice for engagement, for tolerance, and for fairness
toward both sides. We are very grateful that you traveled there and
helped to reduce tensions--especially among Israel's neighbors--that
were close to spinning out of control
I hope your trip was the beginning of a more forceful strategy for
peace, because it is clear that normal diplomatic efforts have failed.
Both sides say they want to live in peace, but whatever they have
gained or suffered in the past few weeks has, I believe, only made
peace more elusive.
A two-state solution is the only solution. And that means a
Palestinian state that is viable, that is worth living for, not a state
in name only.
And for Israelis, it means being able to live free of terror and
fear. Suicide bombings or other deliberate attacks against civilians
are act of terrorism that can never, ever be justified.
The strategy of the Palestinian leadership has been a disaster, for
Israelis, for Palestinians, for the entire region. Mr. Arafat has
repeatedly deceived his own people. Palestinians are industrious,
compassionate, proud people. They deserve far better.
As long as either side deprives the other of the freedom, the
dignity, and the security to which all people are entitled, the
bloodshed will continue. The President was right when he said there has
been a lack of leadership on both sides. That is why, more than ever,
stronger U.S. leadership is needed. I hope that you, Mr. Secretary, are
given the support from the White House to provide that leadership.
The only other thing I will mention in these remarks is
Afghanistan, where deliveries of aid have fallen short. The President
called for a ``Marshall Plan'' for Afghanistan, but he has not
requested adequate resources nor taken steps to provide the security
that is desperately needed. We can discuss this further after your
testimony.
Again, we appreciate you coming here. I will put the rest of my
statement in the record, and ask Senator McConnell to make any opening
remarks he may have.
Mr. Secretary, we are here to consider your requests for a fiscal
year 2002 emergency supplemental appropriation, and for the fiscal year
2003 regular appropriation for Foreign Operations.
I expect the Congress will support much of what you have asked for
in the supplemental. However, let me say that we are not happy about
the sweeping authority the Administration proposes for much of the
funds. Your lawyers have sought to waive all existing laws, including
most human rights conditions and other restrictions, even though you
want to give this aid to some of the most authoritarian, corrupt,
backward governments.
How this squares with the President's recent admonition that we
should tie our foreign aid to good governance, sound economic policies,
and a commitment to alleviating poverty, is a mystery. It is as if,
because these funds are requested to support what has apparently become
an open-ended, global war on terrorism--and no one seems to know what
is included in the term ``terrorism''--that we should write a blank
check.
That is what we did during the cold war, when we gave aid to any
government that claimed to be anti-Communist, often with disastrous
results. It is why so many people, the Secretary of the Treasury
included, have called foreign aid a waste.
So we do not want to get into a situation, again, where the ends
are seen to justify the means, even if the means are unacceptable.
I have a number of questions about your request to broaden existing
authority to include counter-terrorism assistance for Colombia. I think
a case can be made for it, if we see more progress on human rights, but
the Administration has yet to articulate what our objectives are, what
it would take to achieve them, and at what cost. We also need to be
convinced that the Colombian Government is going to start treating the
crisis there as a national priority, and devoting the necessary
resources to it.
For Afghanistan, you have requested only $40 million for disaster
and reconstruction aid. That is less than one-third the amount USAID
says it needs. It flies in the face of the President's speech just last
week, and it leaves to Congress the task of shifting funds to make up
the shortfall.
Your Middle East Economic Initiative makes good sense to me, but it
is a fraction of the size it should be. In Vermont, we spend over $2
billion on public education for 101,000 students. Secular education is
desperately needed in the Middle East, but we will barely scratch the
surface with $50 million.
Your fiscal year 2003 budget request is an improvement over last
year, but not by much. I am sure you wish it were higher, and that the
President's Millennium Challenge Fund were scheduled to begin in fiscal
year 2003, instead of a year later. I want to discuss that with you,
because all the problems it seeks to address are getting worse every
day.
We have concerns about your proposed cuts in assistance to Central
and Eastern Europe, to the former Soviet countries, and for
peacekeeping. We are concerned that the Central and South American
countries are not receiving the attention they should, except through
the counterdrug program. There are many other reasons to provide
assistance to our southern neighbors, and I suspect the President would
agree.
A few small programs have been cut, like aid for East Timor--a
needy and deserving country if there ever was one. East Timor elected
its first President only last week. It is the wrong time for us to cut
back there.
You have increased funding for USAID's HIV/AIDS programs, but you
do so by cutting funds for other international health activities. That
makes little sense.
Destruction of the environment has a direct impact on social
stability and regional security. The increasing pressures on limited
water resources is but one example. Programs in this area have been
seriously underfunded for years, and this budget is no better.
Your budget includes only $100 million for the Global Fund to
Combat AIDS, TB and Malaria, and another $100 million would come from
the Labor, Health and Human Services, and Education budget. This is
$100 less than we provided last year, including the supplemental. The
Global Fund just barely became operational, and it has already received
more proposals than it has funds to support. $200 million is not
enough.
In the former Yugoslavia, the government continues to be an
obstacle to the War Crimes Tribunal. We are not seeing anything like
the cooperation called for in our law. In fact, the opposite. It is
clear that the Federal authorities, and to a lesser extent Serbian
officials, are engaged in a cynical process of calculating what the
minimum is that they need to do for you to certify that they are
cooperating, and then they will again do nothing until it is time for
the next certification. I hope you do not succumb to this game.
I also urge you to not unsign the Rome Treaty establishing an
International Criminal Court, which would bring to justice those
responsible for some of the most heinous crimes against humanity.
Unsigning at this time would cause us to lose valuable leverage to
shape the court in our interests, do nothing to protect U.S. citizens,
weaken our moral authority, and create more tensions with our European
allies.
I have questions on each of these issues, but I want to end on a
positive note. The Leahy human rights law has been in effect since
1997. It says that if the Secretary of State has credible evidence that
a foreign military or police unit has committed a serious human rights
violation, U.S. aid to that unit must end unless the foreign government
is taking effective measures to bring the individuals responsible to
justice.
There was some grumbling about the law in the early days, but since
then it has been accepted and, for the most part, strongly defended by
the Administration. I think that is because the alternative--that even
when there is such evidence we would continue to support a unit that
has been implicated in a serious crime--is indefensible. It is not a
simple law to administer and in some instances I have strongly
disagreed with the Department's application, or lack of application, of
the law. I have repeatedly expressed concerns about whether the law was
being adhered to in the Middle East. But on the whole it has been taken
seriously, and I want you and the rest of the Administration to know
that I appreciate it.
Thank you.
OPENING STATEMENT OF SENATOR MITCH MC CONNELL
Senator McConnell. Thank you very much, Mr. Chairman, and
welcome, Mr. Secretary, to our subcommittee. It is great to see
you again, and we appreciate very much the opportunity to have
breakfast with you yesterday and discuss your recent efforts in
the Middle East.
Let me begin by saying that I fully support the President's
$16.1 billion foreign operations request for this year. While
Congress will undoubtedly amend the request, as we typically do
every year, the proposed $783 million increase over last year's
level does reflect a growing sense that foreign aid is an
important weapon in our arsenal against terrorism. This is one
conservative Republican who is a believer in foreign aid, and
who is going to help you increase our foreign aid levels. I am
enthusiastic about the President's request to dramatically
increase our foreign assistance over the next few years.
You will also have my support for the $1.3 billion foreign
operations request contained in the emergency supplemental.
Although these funds are targeted towards countering terrorism,
Israel was not included in the request. A convincing case can
be made that circumstances in the Middle East have dramatically
changed since the request was submitted to Congress last month,
and that the issue of additional assistance to Israel should be
revisited.
As I said, we had an opportunity to discuss your recent
trip yesterday morning. We appreciate the chance to do that.
You are certainly the right man to be on the point in this very
difficult and complex subject. The frustration with the PLO
Chairman Yasser Arafat's leadership runs high in Washington. It
certainly runs high here in the Congress.
As I said when I introduced the Arafat Accountability Act
last week, the violence-prone PLO chairman is the weakest link
in securing a cease-fire and moving forward to a political
settlement. We should expect that the Israeli military will be
bivouacked outside Arafat's compound in Ramallah for as long as
it takes to secure meaningful commitments to bring to a
conclusive end the ongoing terrorist attacks against the
Israeli people. It is wholly unacceptable for Arafat to talk
peace in English and practice terror in Arabic.
To return to the 2003 budget request, the administration
proposes a $129 million cut from Eastern Europe. The SEED
account provides critical assistance to such troubled spots as
Serbia and Macedonia, countries that are far from graduating to
developed nation status. These cuts may have unintended
consequences, such as retarding the region's economic and
political development. This may be a case of paying for it now,
or paying for it later.
Similarly, the $29-million cut to the Independent States of
the former Soviet Union is troubling. I recognize that some of
the pain is offset in the supplemental's $155 million request
for Uzbekistan, Tajikistan, Kazakhstan, the Kirghis Republic,
and Georgia, but other countries, particularly Armenia, are not
provided with sufficient assistance that is critical to their
development and our war against terrorism.
To remain in the Caucasus just for a moment, the lack of
progress in the ongoing negotiations over Nagorno-Karabakh is
dismaying, and I know you are not happy about that, either,
particularly after heightened expectations following last
year's meetings in Key West. Given elections in Azerbaijan next
year, I personally do not hold any great hope that we will see
major progress in the coming months, but we should be
aggressive in securing confidence-building measures no matter
how small or seemingly insignificant. I hope that you can keep
this on your radar screen to some extent. I know you have got
so much going on these days, but I think a settlement of that
dispute in the Caucasus would certainly produce a lot of
positive results.
Let me also just close with a few comments on the situation
in Burma. I am not surprised by the lack of progress by the
United Nations in facilitating talks between the military thugs
in Rangoon and Daw Aurg San Suu Kyi. U.N. Special Envoy Razali
Ismael's visit earlier this month was abruptly canceled, and
while he returned to Rangoon only this week, we should not kid
ourselves over the intention of the State Peace and Development
Council to maintain power at all costs.
This is a regime that should be on the axis of evil list,
alongside Iraq, Iran, and North Korea, and it may be time to
increase pressure on the junta through a ban on all imports to
the United States. I know the administration is keen on
conducting HIV/AIDS programs in Burma, but I would strongly
council that the centerpiece of such efforts be regular and
ongoing consultation with the National League for Democracy and
Aurg San Suu Kyi. There is only one hope in that country, and
she is under house arrest in Rangoon.
I have a number of other issues including aid to
Afghanistan, Ukraine, and Colombia that I will save for later,
and thank you again so much for being here this morning. We
look forward to hearing from you.
[The statement follows:]
Prepared Statement of Senator Mitch McConnell
Welcome, Mr. Secretary. Let me begin my remarks this morning by
expressing my support for the President's $16.1 billion foreign
operations request for fiscal year 2003.
While Congress will undoubtedly amend the request--as is our
prerogative and as we do every year--the proposed $783 million increase
over last year's enacted level reflects the growing conventional wisdom
that foreign aid is an important weapon in our arsenal against
terrorism.
You also have my support for the $1.3 billion foreign operations
request contained in the emergency supplemental. Although these funds
are targeted toward countering terrorism, Israel was not included in
the request. A convincing case can be made that circumstances in the
Middle East have drastically changed since the request was submitted to
Congress last month and that the issue of additional assistance to
Israel should be revisited.
We had the opportunity to discuss developments in the Middle East
at yesterday's breakfast and we all recognize the complexities of the
challenges--from ending homicide bombings to the intractable issue of
the right of return for Palestinian refugees. You are the right man to
walk point on this issue. But understand that frustration with the PLO
Chairman Yasser Arafat's leadership failure runs high in Washington.
As I said when I introduced the ``Arafat Accountability Act'' last
week, the violence-prone PLO Chairman is the weakest link in securing a
ceasefire and moving forward on a political settlement. We should
expect that the Israeli military will be bivouacked outside Arafat's
compound in Ramallah for as long as it takes to secure meaningful
commitments that bring to a conclusive end the ongoing terrorist
attacks against the Israeli people. It is wholly unacceptable for
Arafat to talk peace in English and practice terror in Arabic.
To return to the fiscal year 2003 budget request, the
Administration proposes a $129 million cut from Eastern Europe. The
SEED account provides critical assistance to such troubled spots as
Serbia and Macedonia, countries that are far from graduating to
developed-nation status. These cuts may have unintended consequences,
such as retarding the region's economic and political development. This
may be a case of paying for it now--or really paying for it later.
Similarly, the $29 million cut to the Independent States of the
former Soviet Union is troubling. I recognize that some of the pain is
offset in the supplemental's $155 million request for Uzbekistan,
Tajikistan, Kazakhstan, the Krygyz Republic, and Georgia--but other
countries, particularly Armenia, are not provided with sufficient
assistance that is critical to their own development and our war
against terrorism.
To remain in the Caucuses for a brief moment, the lack of progress
in ongoing negotiations over the Nagorno-Karabakh conflict is
dismaying, particularly after heightened expectations following last
year's meetings in Key West. Given elections in Azerbaijan next year, I
do not hold any false expectations that we will see major progress in
the coming months. We should be aggressive in securing confidence
building measures, no matter how small or seemingly insignificant.
Let me close with a few comments on the situation in Burma. I am
not surprised by the lack of progress by the United Nations in
facilitating talks between the military thugs in Rangoon and Aung San
Suu Kyi. U.N. Special Envoy Razali Ismail's visit earlier this month
was abruptly cancelled, and while he returned to Rangoon only this
week, we should not kid ourselves over the intentions of the State
Peace and Development Council to maintain power at all costs.
This is a regime that should be on the ``axis of evil'' list along
side Iraq, Iran, and North Korea, and it may be time to increase
pressure on the junta through a ban on all imports to the United
States.
I know the Administration is keen on conducting HIV/AIDS programs
in Burma, but I would strongly counsel that the centerpiece for such
efforts be regular and ongoing consultation with the National League
for Democracy. There is one hope for that country--and she is under
house arrest in Rangoon.
I have a number of other issues--including aid to Afghanistan,
Ukraine, and Colombia--that I intend to address later in the hearing.
Senator Leahy. Thank you, Senator McConnell. We will put
all statements of Senators in the record, and Mr. Secretary, it
is your microphone.
SUMMARY STATEMENT OF HON. COLIN L. POWELL
Secretary Powell. Thank you very much, Mr. Chairman. It is
a great pleasure to be back before the committee, and I thank
you for your expressions of support, and I do have a prepared
statement that I would submit for the record. I just have a
brief opening statement and I will then be ready for your
questions.
Before beginning my opening statement, let me just respond
to the comments that you made earlier, Mr. Chairman, and I know
these are comments on everybody's mind, with respect to the
situation in the Middle East. We had a chance to talk about it
yesterday morning, and I am sure in the course of our
questioning there will be an opportunity to say more about the
situation in the Middle East. I have to take some exception to
your comment that the U.S. administration, President Bush's
administration, blundered badly and that we stayed away and
were preoccupied by other matters. I do not think that is an
accurate portrayal.
Immediately upon taking office last year, we became engaged
with Senator George Mitchell, your colleague from past days,
and encouraged him to remain engaged with the work he was doing
with the Mitchell Committee. He did. We encouraged the Israelis
to participate with Senator Mitchell's group and they did, and
we came out with a very fine report that gave us a blueprint of
a way to move forward. We pressed hard to get both sides to
enter into that blueprint plan, and unfortunately we were not
successful, but it was not because we were not trying. We were
not successful and they were not successful. The failure was
theirs, not ours. We could not get the violence down.
We tried again with the Tenet work plan, and the Tenet work
plan would have provided a way in to Mitchell, but we could not
get it started again, once again because of violence. We sided
with, frankly, the Israeli side here by saying that you had to
have security, you had to have some confidence that you are not
going to have your citizens blown up by suicide bombs or other
kinds of terrorist activities, and that Prime Minister Sharon
had been elected to office on the basis of his commitment to
provide security to the Israeli people. We understood that, and
we worked with both sides trying to get the violence down.
President Bush was the first President of the United States
to stand before an international forum, as he did at the United
Nations last fall, and call for the creation of a Palestinian
State, and he gave it a name. He called it Palestine, the first
time a President has done that, and he did it because he wanted
to say to the Palestinian people that the United States has a
vision for you.
We will always be Israel's closest friend. We have been
there from the very beginning. We will always be there for
Israel. But at the same time, we recognize that a way has to be
found for these two peoples to live side by side in peace
behind secured, recognizable borders, and develop relations
between themselves that do not come out of the barrel of a gun,
but come out of economic development, come out of educating
young people, come out of giving people hope and jobs. The
President is committed to that vision. He repeated that vision
in his April 4 speech before sending me off to the Middle East.
I also captured that vision in my Louisville speech of last
year.
So we have been deeply engaged in the work of finding a way
forward on the basis of security, on the basis of a political
solution, on the basis of economic and humanitarian relief. Now
the President has reaffirmed his commitment to that process,
first by sending me into the middle of a difficult situation.
We can talk about the trip that I took and what might have been
achieved, and what more we would like to have seen achieved
that was not achieved, but he is engaged. I am engaged. The
reason I was a few moments late coming up this morning is that
I was with the President in the situation room going over
today's events as well as what we are going to be doing in the
future.
Senator Leahy. By Senate standards you are a model of
punctuality, let me say.
Secretary Powell. Well, if you had a driver as good as
mine, and if you closed your eyes going through Washington
traffic, you could be anywhere on time, as I did this morning.
And so, Mr. Chairman, I assure you we will be engaged as a
close, dear friend of Israel, but also as a friend to the
Palestinian people, because they need peace, they need
security, they need to find a place in the world. We are
committed to that proposition as well, and I am sure we can
expand on these few brief remarks when we get into questions
and answers.
But let me turn now to my shortened statement. Mr.
Chairman, you may recall that when I was up here last year, I
told you how important I considered relations with Congress,
that I felt that I had an obligation as Secretary of State to
be as open and forthcoming and as accessible to every committee
before which I appear, and the Congress as a whole. It is part
of my responsibility to work closely, to let you know what I am
doing in the name of the American people to make sure that the
State Department is well-organized, well-led, a place with high
morale, a place with a sense of purpose, a place where the
people are proud to be serving in this administration and
serving the American people in the accomplishment of their
foreign policy.
You may also remember that I pointed out last year that I
was not only the foreign policy advisor to the President, but
the chief executive officer of a very large organization, and
wearing that CEO hat I want to tell you that we have made solid
advances over the past year: advances in hiring; bringing
people into the Department; increasing the number of people who
want to be a part of the State Department team; bringing state-
of-the-art information and technology to the Department;
streamlining our overseas buildings operations, and making our
buildings more secure for our people to work in confidence and
comfort.
Morale is high at the Department, and for this I think I
owe a debt of gratitude, and all of my employees owe a debt of
gratitude to the Congress for what you have done to help us
develop this momentum. We are bringing the organization and
conduct of America's foreign policy into the 21st Century, and
I want to thank the members of the committee for the support
that you have provided.
Since that heart-rending day in September, when the
terrorists struck in New York, Virginia, and Pennsylvania, we
have seen why the conduct of foreign policy is so important. We
have had remarkable success over the past 7 months in our war
on terrorism, especially in Afghanistan, and we are seeing
progress now in the Philippines and Yemen and elsewhere as a
result of our working with governments around the world who are
committed to the campaign against terrorism. Behind the
courageous men and women of our Armed Forces, behind the
stepped-up law enforcement efforts, and behind the increased
scrutiny of an action against terrorist financial networks,
there has been the quiet, steady force of diplomacy by
thousands of Americans around the world, working in our
missions, who take their job with utmost seriousness and pursue
it with diligence.
As a result of their efforts, we have reshaped a good part
of South Asia, a new United States-Pakistan relationship, a
reinvigorated United States-India relationship, a new interim
authority in Kabul, and the Taliban and the terrorists gone,
dead, in jail, or on the run.
We are also forming important new relations with our
friends in Central Asia, and helping friends and allies fight
the scourge of terrorism from the marble-floored banks of
Europe to the forests and gorges of Georgia.
In his second visit to the Department last year, President
Bush told us that despite the great tragedy of September 11, we
could see opportunities through our tears and, at his
direction, the State Department has been moving briskly ever
since, making as much as possible of those opportunities.
Over the past year, Mr. Chairman, I believe the broader
tapestry of our foreign policy has become clear. It is to
encourage the spread of democracy and market economies, to lift
up countries that want to be part of that expansion, and to
bring more governments to the understanding that the power of
the individual is the power that counts. When evil appears to
threaten this progress, America will confront that evil, call
it what it is, and defeat it, as we are doing in the war on
terrorism.
And as you well know, Mr. Chairman, we cannot do any of
this, we cannot conduct an effective foreign policy or fight
terrorism without the necessary resources. The President's
fiscal year 2003 request for foreign operations is a little
over $16.1 billion. These dollars will support the continuing
war on terrorism and the work we are doing in Colombia and the
Andean region at large.
Moreover, these dollars will help support our efforts to
help combat HIV/AIDS and other infectious diseases, our
essential development programs in Africa, the important work of
the Peace Corps, and scaling up the work of the Peace Corps and
the size of the Peace Corps, and will also make possible our
plan to clear arrearages at the multilateral development banks,
including the global environment facility.
Mr. Chairman, to fight terrorism as well as alleviate the
conditions that fuel this kind of activity, violent terrorism,
we are requesting an estimated $5 billion. In addition to the
initiatives outlined in our budget request for the State
Department and related agencies, this funding includes $3.6
billion for economic and security assistance, military
equipment and training for the frontline states and for our
other partners in the war on terrorism. As you noted, Senator
McConnell, Israel is not included in this, but I take your
point that this is something we should look at as we move
forward.
These dollars also include $3.4 billion out of the $3.6
billion from foreign operations accounts such as the economic
support fund, international military education and training,
foreign military financing, and the Freedom Support Act, $88
million for programs in Russia and other States of the former
Soviet Union to reduce the availability to terrorists of
weapons of mass destruction.
Our ongoing programs engage former weapons scientists now
participating in peaceful research, and help in this way to
prevent the spread of the materials expertise required to build
such weapons.
A few programs of note: $69 million for counterterrorism
engagement programs, training, and equipment to help other
countries fight global terror, thereby strengthening, in turn,
our own national security; $50 million to support the
International Atomic Energy Agency in activities designed to
counter nuclear terrorism and implement strengthened
safeguards; and $15 million to allow us to respond quickly and
effectively to unanticipated or unusually difficult
nonproliferation projects or opportunities; and $4 million for
the Treasury Department's Office of Technical Assistance to
provide training and assistance and other expertise to foreign
finance officers to halt terrorist financing.
Mr. Chairman, in the 2003 fiscal year budget request, there
is approximately $140 million available for Afghanistan,
including repatriation of refugees, food aid, demining, and
transition assistance. I know that President Bush, the
Congress, and the American people recognize that rebuilding
Afghanistan will require additional resources, and that our
support must be and will be a multiyear effort. Moreover, I
know we will need a lot of help from the international
community.
At the Virginia Military Institute last week, President
Bush made very clear what he wants to do for Afghanistan. The
President told his audience of eager cadets that one of their
own, George C. Marshall, helped ensure that a war-ravaged
Europe and Japan would successfully recover following World War
II. Now, today, Europe and Japan are helping America in
rebuilding Afghanistan.
The President said that by helping to rebuild Afghanistan
that is free from evil, and is a better place in which to live,
we are working in the best traditions of George Marshall, and
so we are. It will be a long, hard road. We know it, but like
General Marshall, we also know that we must do it, and the
international community knows that it must help.
Mr. Chairman, we are requesting $731 million in 2003 for
the multiyear counterdrug initiative in Colombia and other
Andean countries that are the source of cocaine sold on
America's streets. This assistance to Andean governments will
support drug eradication, interdiction, economic development,
and development of government institutions. In addition, the
Colombians will be able to stand up a second counterdrug
brigade. Assisting efforts to destroy local coca crops and
processing labs there increases the effectiveness of U.S. law
enforcement here.
In addition to this counterdrug effort, Mr. Chairman, we
are requesting $98 million in FMF to help the Colombian
Government protect the vital Cano Limon oil pipeline from the
same foreign terrorist organizations that are involved in
illicit drugs, the FARC and the ELN. Their attacks on that
pipeline shut it down 240 days in 2001, costing Colombia
revenue and disrupting its economy, and causing serious
environmental damage.
This money will help train and equip the Colombian armed
forces to protect the pipeline. These funds begin to apply the
President's decision to shift from a strictly counterdrug
effort to a more broadly based effort targeted at helping
Colombia fight the terrorists in its midst, as well as the
drugs.
In fiscal year 2003, we are also requesting $1.4 billion
for USAID global health programs. Of this amount, we are
requesting $540 million for bilateral HIV/AIDS prevention,
care, and treatment activities, and $100 million for the global
fund to fight AIDS, tuberculosis, and malaria. As you know,
another $100 million is in the HHS budget, so there will be a
total of $200 million on top of the $300 million that was
provided over the last year or so for a total of $500 million.
All of this funding will increase the already significant
contribution to combatting the AIDS pandemic, and maintain our
position as the single largest bilateral donor. I should also
add that the overall U.S. Government request for international
HIV/AIDS programs exceeds $1 billion, including the $200
million I just referenced for the global fund.
I might digress and also mention, Mr. Chairman, that I just
received a report from my staff that the trust fund that we
created for the HIV global trust fund activities is coming
along very well, and we have now reached a point where we are
about to award contracts. I think this is quite an achievement
under the leadership of the Secretary-General of the United
Nations and others working with him, that we have gone from
inception to starting to release funds that will help with the
problem in a little less than a year's time.
Mr. Chairman, I know that you and all of the subcommittee
members heard the President's remarks in his State of the Union
address with respect to the USA Freedom Corps. You heard, as
well, his objective to renew the promise of the Peace Corps,
and to double the number of volunteers in the corps in the next
5 years. We have put $320 million for the Peace Corps in the
2003 budget request. This is an increase of over $42 million
from our fiscal year 2002 level.
This increase will allow us to begin scaling up to the
level the President has directed us to, and we intend that the
Peace Corps will open programs in eight countries, including
the reestablishment of currently suspended posts, and place
over 1,200 additional volunteers worldwide. By the end of 2003,
the Peace Corps will have more than 8,000 volunteers on the
ground.
Finally, Mr. Chairman, the 2003 request includes an
initiative to pay one-third of the amount that the United
States owes the multilateral development banks for our
scheduled annual commitments. With U.S. arrears currently
totalling $533 million, the request would provide $178 million
to pay one-third of our total arrears during this fiscal year.
These banks lend to and invest in developing countries,
promoting economic growth and poverty reduction and providing
environmental benefits. We need to support them.
Mr. Chairman, in addition to what I have given you with
respect to fiscal year 2003, I want to provide you with the
main priorities of our supplemental request for 2002, but first
let me tell you how grateful we are down at the Department for
the efforts of this subcommittee and the House subcommittee to
get us the $1.5 billion in crucial emergency response fund
foreign operations that we needed to address the immediate post
September 11 requirements, but that was just a start.
We are asking for a $1.6 billion of supplemental funding
for fiscal year 2002. This amount includes $322 million for the
Department itself. These dollars will address emerging building
and operating requirements that have arisen as a result of the
September 11 terrorist attacks, including reopening our embassy
in Kabul, reestablishing an official presence in Dushanbe,
Tajikistan, and increasing security and personnel protection at
home and abroad. This will leave about $1.3 billion for foreign
operations.
These funds, added to the request we have made for 2003 for
the frontline States are primarily to deter and prevent acts of
international terrorism, provide vitally needed military
equipment training and economic assistance to our friends and
allies, to expand respect for human rights and judicial reform
in the frontline States, provide a significant and immediate
impact on displaced persons in the frontline States, support
civilian reintegration of former combatants and establish law
enforcement and criminal justice systems, and provide economic
and democracy assistance, including help with political
development, health care, irrigation and water management,
media development, community-building and infrastructure
improvement, and economic and civil society reform.
In sum, these supplemental dollars for foreign operations
in 2002 will be directed at draining the swamp in which
terrorists survive, and ensuring the long-term success of
Operation Enduring Freedom. Mr. Chairman, I told the committee
last year the conduct of the Nation's foreign policy suffered
significantly from a lack of resources over the past decade. I
have set both my CEO hat and my foreign policy hat to correct
that situation, but I cannot do it without your help, with the
help of your colleagues in the Senate and across the Capitol in
the House.
I ask for your important support in full committee and in
the Senate as a whole, both for the $8.1 billion we are
requesting for the Department and its related agencies, and for
the $16.1 billion we are requesting for foreign operations. In
addition, I ask for your support with a supplemental request
for 2002. With your help and the help of the whole Congress, we
will continue the progress we have begun.
Thank you very much, Mr. Chairman. I am now pleased to take
your questions.
[The statement follows:]
Prepared Statement of Hon. Colin L. Powell
Mr. Chairman, members of the subcommittee, I am pleased to appear
before you to testify in support of President Bush's budget request for
fiscal year 2003.
Last May, Mr. Chairman, you may recall that in my opening remarks I
told you how important I consider interchanges such as this with the
Congress. Our breakfast together at the State Department yesterday
reinforced my appreciation for such exchanges.
I believe it is an important part of my responsibilities to work
closely with the Congress and with all the various committees. This
will be my eighth budget hearing this year, but I consider this kind of
interchange with the Congress as important as any other duty that I
have.
You may also remember that last year I told you that I believe I
have responsibilities as CEO of the State Department as well as those
of being principal foreign policy advisor to the President.
Wearing that hat, my CEO hat, I want to tell you that we have made
solid advances over the past year--advances in hiring, in bringing
state of the art information technology to the Department, and in
streamlining our overseas buildings process and in making our buildings
more secure for our people.
Morale is high at the Department and we owe this Congress a debt of
gratitude for what it has done to help us develop this momentum. We are
bringing the organization and conduct of America's foreign policy into
the 21st century, and I want to thank you, Mr. Chairman, and all the
members of this subcommittee, for giving us the support to begin this
process.
Since that heart-rending day in September when the terrorists
struck in New York, Virginia, and Pennsylvania, we have seen why the
conduct of our foreign policy is so important.
We have had remarkable success over the past seven months in the
war on terrorism, especially in Afghanistan, and we are beginning to
see some success in the Philippines, in Yemen, and elsewhere. And
behind the courageous men and women of our armed forces, behind the
stepped up law enforcement efforts, and behind the increased scrutiny
of and action against terrorist financial networks, has been the quiet,
steady course of diplomacy.
As a result, we have reshaped a good part of South Asia--a new
U.S.-Pakistan relationship, a reinvigorated U.S.-India relationship, a
new Interim Authority in Kabul, and the Taliban and the terrorists
dead, in jail, or on the run. We are also forming important new
relationships with the nations of Central Asia and helping friends and
allies fight the scourge of terrorism from the marble-floored banks of
Europe to the forested-gorges of Georgia.
In his second visit to the Department last year, President Bush
told us that despite the great tragedy of September 11, we could see
opportunities through our tears--and at his direction, the Department
of State has been at flank speed ever since, making as much as possible
of those opportunities.
Over the past year, Mr. Chairman, I believe the broader tapestry of
our foreign policy has become clear: to encourage the spread of
democracy and market economies, to lift up countries that want to be
part of that expansion, and to bring more governments to the
understanding that the power of the individual is the power that
counts. And when evil appears to threaten this progress, America will
confront that evil and defeat it--as we are doing in the war on
terrorism.
In weaving this tapestry, we have achieved several successes:
With regard to Russia, President Bush has defied some of our
critics and structured a very strong relationship. The meetings that he
had with President Putin and the dialogue that has taken place between
Russian Foreign Minister Ivanov and me and between Secretary of Defense
Rumsfeld and his counterpart, and at a variety of other levels, have
positioned the United States for a strengthened relationship with the
land of eleven time zones.
The way that Russia responded to the events of September 11 was
reflective of this positive relationship. Russia has been a key member
of the antiterrorist coalition. It has played a crucial role in our
success in Afghanistan, by providing intelligence, bolstering the
Northern Alliance, and assisting our entry into Central Asia. As a
result, we have seriously eroded the capabilities of a terrorist
network that posed a direct threat to both of our countries. The job is
not complete yet--as our continuing operations in Afghanistan and our
just-beginning Train and Equip operations in Georgia clearly
demonstrate--but we are making headway.
Similarly, the way we and the Russians agreed to disagree on the
ABM Treaty reflects the intense dialogue we have had over the last
thirteen months, a dialogue in which we told the Russians where we were
headed and we made clear to them that we were serious and that nothing
would deter us. And we asked them if there was a way that we could do
what we had to do together, or a way that they could accept what we had
to do in light of the threat to both of our countries from ballistic
missiles. At the end of the day, we agreed to disagree and we notified
Russia that we were going to withdraw from the ABM Treaty. I notified
FM Ivanov--we talked about our plans for two days. President Bush
called President Putin. Then the two presidents arranged the way we
would make our different announcements. And the world did not end. An
arms race did not break out. There is no crisis in Russia-U.S.
relations. In fact, our relations are very good. Both presidents
pledged to reduce further the number of their offensive nuclear weapons
and we have been hard at work on an agreement to codify these mutual
commitments. There is every possibility that we will conclude such an
agreement next month in Moscow. This is all part of the new strategic
framework with Russia.
We even managed to come to an agreement on how we are going to work
through NATO. This new decision-making relationship, which we are
referring to as the NATO-Russia Council, or ``NATO at 20,'' will
provide a mechanism for consultations, cooperation, joint decisions and
joint action. It will offer Russia the opportunity to participate in
shaping cooperative projects in areas such as counterterrorism, civil
emergency preparedness, and joint training and exercises. Our aim is to
have this arrangement in place for the Reykjavik ministerial next
month. Moreover, NATO's Secretary General, Lord Robertson, announced
last week that President Putin will be invited to Italy for a NATO-
Russia Summit on May 28.
Mr. Chairman, as we head for the NATO Summit in Prague in November,
where we will consider a new round of NATO enlargement, I think we will
find the environment a great deal calmer than we might have expected.
I believe the way we handled the war on terrorism, the ABM Treaty,
nuclear reductions, and NATO is reflective of the way we will be
working together with Russia in the future. Building on the progress we
have already made will require energy, good will, and creativity on
both sides as we seek to resolve some of the tough issues on our
agenda.
We have not forgotten about abuses of human rights in Chechnya or
Moscow's WMD- and missile-related cooperation with Iran. Neither have
we neglected to consider what the situation in Afghanistan has made
plain for all to see; that is, how do we achieve a more stable security
situation in Central Asia? We know that this is something we cannot do
without the Russians and something that increasingly they realize can't
be done without us, and without the full participation of the countries
in the region. We are working these issues as well.
In fact, the way we are approaching Central Asia is symbolic of the
way we are approaching the relationship as a whole and of the growing
trust between our two countries. We are tackling issues that used to be
problems between us and turning them into opportunities for more
cooperation. We have found in the last few weeks, for example, that we
could even deal with chickens.
And in Madrid, when the ``Quartet'' met two weeks ago--the EU,
Russia, the United Nations, and the United States--my talks with
Russian FM Ivanov were especially helpful in framing the message the
Quartet crafted with respect to the crisis in the Middle East. In
Madrid also, FM Ivanov and I agreed to meet early next month here in
Washington to continue our discussions on the new strategic framework.
And President Bush will visit Moscow and St. Petersburg later in May.
Such a collegial approach to our relationship does not mean that
differences have vanished or that tough negotiations are a thing of the
past. What it means is that we believe there are no insurmountable
obstacles to building on the improved relationship we have already
constructed.
It will take time. But we are on the road to a vastly changed
relationship with Russia. That can only be for the good--for America
and the world.
With that in mind, Mr. Chairman, and in the spirit of closer United
States-Russia cooperation, and in light of Russia's continued
compliance with Jackson-Vanik legislation, the President hopes Congress
will lift the application of this legislation to Russia before the
Moscow-St. Petersburg Summit in late May.
Mr. Chairman, we have also made significant progress in our
relationship with China.
A candid, constructive, and cooperative relationship is what we are
building with China. Candid where we disagree; constructive where we
can see some daylight; and cooperative where we have common regional or
global interests.
These are the principles President Bush took with him to Beijing at
the end of February this year. After meeting with Prime Minister
Koizumi in Tokyo and with President Kim in Seoul, the President spent a
day and a half in Beijing and met with President Jiang Zemin, as well
as Premier Zhu Rongji. These meetings solidified further what has
become a markedly improved relationship--a relationship that will see
China's Vice President, Hu Jintao, visit Washington at the end of this
month through the beginning of next month, at the invitation of Vice
President Cheney. In less than a year, we moved from what was a
potentially volatile situation in April of last year involving our EP-3
reconnaissance aircraft which was forced to land on China's Hainan
Island after a PLA fighter aircraft collided with it, to a very
successful meeting in Shanghai in October between President Jiang Zemin
and President Bush and an APEC Conference, hosted by China, that was
equally successful.
There are certain shared interests that we have with China and we
have emphasized those interests. They are regional and global
interests, such as China's accession to WTO, stability on the Korean
Peninsula, and combating the scourge of HIV/AIDS. On such issues we can
talk and we can work out ways to cooperate.
There are other interests where we decidedly do not see eye-to-eye,
such as arms sales to Taiwan, human rights, religious freedom, and non-
proliferation. On such issues we can have a dialogue and try to make
measurable progress.
But we do not want the interests where we differ to constrain us
from pursuing those where we share common goals. And that is the basis
upon which our relations are going rather smoothly at present. That,
and counterterrorism.
President Jiang Zemin was one of the first world leaders to call
President Bush and offer his sorrow and condolences for the tragic
events of September 11. And in the over seven months since that day,
China has helped in the war against terrorism. Beijing has also helped
in the reconstruction of Afghanistan and we hope will help even more in
the future.
Moreover, China has played a constructive role in helping us manage
the very dangerous situation in South Asia between India and Pakistan.
When I could call China's Foreign Minster Tang and have a good
discussion, making sure our policies were known and understood, it made
for a more reasoned approach to what was--and as the snows melt may
continue to be--a volatile situation. As a result, China has supported
the approach that the rest of the international community has taken.
Beijing has not tried to be a spoiler but instead tried to help us
alleviate tensions and convince the two parties to scale down their
dangerous confrontation which, hopefully, is happening. We will
continue to work with Beijing as the situation evolves.
All of this cooperation came as a result of our careful efforts to
build the relationship over the months since the EP-3 incident. We
never walked away from our commitment to human rights, non-
proliferation, or religious freedom; and we never walked away from the
position that we don't think the Chinese political system is the right
one for the 21st century. And we continued to tell the Chinese that if
their economic development continues apace and the Chinese people see
the benefits of being part of a world that rests on the rule of law, we
can continue to work together constructively.
As we improved our relationship with China, Mr. Chairman, we also
reinvigorated our bilateral alliances with Japan, The Republic of
Korea, and Australia. Nowhere has this been more visible than in the
war on terrorism--where cooperation has been solid and helpful.
Prime Minister Koizumi immediately offered Japan's strong support,
within the confines of its constitution. And he is working to enhance
Japan's capability to contribute to such global and regional actions in
the future. President Bush's dialogue with the Prime Minister has been
warm, engaging, and productive. Always the linchpin of our security
strategy in East Asia, the United States-Japan Security Alliance is now
as strong a bond between our two countries as it has been in the half-
century of its existence. Our shared interests, values, and concerns,
plus the dictates of regional security, make it imperative that we
sustain this renewed vigor in our key Pacific alliance. And we will.
With respect to the Peninsula, our alliance with the Republic of
Korea (ROK) has also been strengthened by Korea's strong response to
the war on terrorism and by our careful analysis of and consultations
on where we needed to take the dialogue with the North. President Bush
has made it very clear that we are dissatisfied with the actions of
North Korea, in particular that the North continues to develop and sell
missiles that could carry weapons of mass destruction. But we have also
made clear that both we and the ROK are ready to resume dialogue with
Pyongyang, on this or any other matter, at any time the North Koreans
decide to come back to the table.
In that regard, we welcome the results of ROK Special Advisor Lim
Dong-won's recent talks with North Korean leaders in Pyongyang, which
included agreements on resuming dialogue and cooperation between the
two Koreas. We are also pleased to note that North Korea signaled its
willingness to resume dialogue with the United States. We would welcome
such a resumption of talks; however, we have not yet received a direct
response from the North Koreans.
Further south, the Australians have been exceptional in their
efforts to support the war on terrorism. Heavily committed in East
Timor already, Australia nonetheless offered its help immediately and
we have been grateful for that help, including the great Australian
soldiers who have helped us on the ground in Afghanistan. The people of
Australia are indeed some of America's truest friends.
So, Mr. Chairman, as I look across the Pacific to East Asia I see a
much-improved security scene and I believe that President Bush deserves
the credit for this success.
Another foreign policy success is the improvement we have achieved
in our relations with Europe. In waging war together on terrorism, our
cooperation has grown stronger. NATO invoked Article 5 for the first
time ever on September 12. Since then, the European Union has moved
swiftly to round up terrorists, close down terrorist financing
networks, and improve law enforcement and aviation security
cooperation.
Moreover, President Bush has made clear that even as we fight the
war on terrorism, we will not be deterred from achieving the goal we
share with Europeans of a Europe whole, free, and at peace. We continue
to work toward this goal with our Allies and Partners in Europe.
In the Balkans, we are pursuing this goal by working with our
European allies and partners to advance three inter-related objectives:
promoting integration into Euro-Atlantic institutions, with the EU and
NATO increasingly serving as the prime movers for engagement and
reform; hastening the day that peace is self-sustaining and that we and
our allies can withdraw our military forces; and ensuring that the
region is not a safe haven or way station for global terrorism. The EU
member nations are already supplying the majority of financial
resources and military forces. Our success in preventing civil war in
Macedonia while avoiding another long-term commitment of NATO forces
was based on the type of close cooperation among NATO, the EU, and the
United States that will remain essential to our future success. We need
to finish the job in the Balkans--and we will. We went in together with
the Europeans, and we will come out together.
I also believe we have been successful in bringing the Europeans to
a calmer level of concern with respect to what was being labeled by
many in Europe ``unbridled U.S. unilateralism''. Notwithstanding the
recent reaction in parts of Europe to President Bush's State of the
Union Address, to U.S. actions on steel imports, and to undocumented
and even at times egregiously wrong press reports about imminent U.S.
military action against Iraq, I still believe this to be true. There
was significant concern among the Europeans earlier last year that
because we took some unilateral positions of principle for us that
somehow the United States was going off on its own without a care for
the rest of the world. Early in the Administration, this was
particularly true with respect to the Kyoto Protocol. So we set out
immediately to correct this misperception. Beginning with President
Bush's speech in Warsaw, his participation in the G-8 meetings and the
European Union summit, our extensive consultations with respect to the
new strategic framework with Russia, and culminating in the brilliant
way in which the President pulled together the coalition against
terrorism, I believe that we demonstrated to the world that we can be
decisively cooperative when it serves our interests and the interests
of the world.
But we have also demonstrated that when it is a matter of
principle, we will stand on that principle. In his first year in office
President Bush has shown the international community who he is and what
his Administration is all about. That is an important accomplishment--
and one that is appreciated now everywhere I go. People know where
America is coming from and do not have to doubt our resolve or our
purpose. They may not always agree with us, but they have no doubt
about our policy or our position. We want to ensure that this policy
clarity and this firmness of purpose continue to characterize our
foreign policy.
Let me just note that this sort of principled approach
characterizes our determined effort to reduce the threat from weapons
of mass destruction--an effort well underway before the tragic events
of September 11 added even greater urgency. As President Bush said at
VMI last week, ``. . . the civilized world faces a grave threat from
weapons of mass destruction.'' We and the Russians will reduce our own
deployed nuclear weapons substantially. In the meantime, we are using a
comprehensive approach, along with our friends and allies, to tackle
WMD elsewhere, an approach that includes export controls, non-
proliferation, arms control, missile defenses, and counter-
proliferation.
There are terrorists in the world who would like nothing better
than to get their hands on and use nuclear, chemical, biological, or
radiological weapons. So there is a definite link between terrorism and
WMD. Not to recognize that link would be foolhardy to the extreme.
In fact, terrorism, Mr. Chairman, is another example of this
Administration's principled approach. Anyone who adopts for political
purposes the intentional killing of innocent men, women, and children
as they try to go about their everyday lives is going to be opposed by
America. That is that. There should be no doubt about this commitment
or in the understanding of this commitment. All people of every faith
and every nation should stand unalterably opposed to such killing.
Such principled approaches as our positions on the Kyoto Protocol
or on missile defense do not equate to no cooperation. Quite the
contrary. We know that cooperation is often essential to get things
done. On our efforts to lift countries out of poverty, for example, and
to create conditions in which trade and investment flourish, we need to
cooperate.
Last month, we had a good meeting in Monterrey, Mexico on financing
development. This summer in Johannesburg, we will participate in the
World Summit on Sustainable Development. There we will have an
opportunity to address such issues as good governance; protection of
our oceans, fisheries, and forests; and how best to narrow the gap
between the rich countries and the poor countries of the world.
And in June, the United States will participate in the World Food
Summit conference in Rome. At the conference, we intend to renew our
commitment to cutting world hunger in half by 2015. Progress toward
this goal since the Summit in 1996 has been positive only in China. In
much of the rest of the world, hunger has actually increased. We must
do better.
And Mr. Chairman, I know that you and the subcommittee members are
familiar with President Bush's new Millennium Challenge Account, which
he announced in Washington on March 14.
With this initiative, the President has made combating poverty a
foreign policy priority. At the same time, however, he has recognized
that economic development assistance can be successful only if it is
linked to sound policies in the developing countries. In sound policy
environments, aid attracts private investment by two to one; that is,
every dollar of aid attracts two dollars of private capital. In
countries where poor public policy dominates aid can actually harm the
very citizens it was meant to help.
The funds we authorize and appropriate for this account will be
distributed to countries that demonstrate a strong commitment toward:
(1) good governance; (2) the health and education of their people; and
(3) sound economic policies that foster enterprise and
entrepreneurship.
We envision that resources will begin to be available in fiscal
year 2004, ramping up to $5 billion in fiscal year 2006. Then, $5
billion every year thereafter. These resources will be separate from
the current budget trajectory of our other aid dollars, which we expect
to continue on their own path.
With these resources applied in this careful way, we expect to
fertilize the ultimate success of more and more countries making a
determined and transparent effort to join the globalized world.
Mr. Chairman, also among our foreign policy successes over the last
year is our new and more effective approach to Africa--the impact of
which was most dramatically demonstrated in the WTO deliberations in
Doha last November that led to the launching of a new trade round. The
United States found its positions in those deliberations being strongly
supported by the developing countries, most notably those from Africa.
The Congress laid the foundation for our success with the African
Growth and Opportunity Act--an historic piece of legislation with
respect to the struggling economies in Africa.
In the first year of implementation of this Act, we have seen
substantial increases in trade with several countries--South Africa by
6 percent, Kenya by 17 percent, and Lesotho by 51 percent for 2001 over
2000. Likewise, we are very pleased with the excellent success of the
first U.S.-SubSaharan Africa Trade and Economic Cooperation Forum which
was held last October.
A large part of our approach to Africa and to other developing
regions and countries as well, will be directly in line with what we
have prescribed for the Millennium Challenge Account, i.e., a renewed
and strengthened concern with progress toward good governance as a
prerequisite for economic development assistance. Moreover, where
conditions are favorable, our economic development assistance in Africa
will emphasize the vigorous promotion of agriculture. Agriculture is
the backbone of Africa's economies and must be revitalized to reduce
hunger and to lift the rural majority out of poverty.
In addition, we will emphasize fighting corruption and President
Bush's new initiative on basic education. Moreover, we want to
emphasize methods that directly empower individuals--methods such as
micro-lending, a superb vehicle for increasing the economic
participation and security of the working poor. The people of Africa in
particular know that in many cases their governments do not deliver the
health care, transportation and communication networks, education and
training, and financial investment needed to create 21st century
economies. They know that this must change if there is to be hope of
economic success--of job creation, private investment, stable
currencies, and economic growth.
We also know and more and more of Africa's people are coming to
know that none of this economic success is possible if we do not meet
the challenge of HIV/AIDS. That is why I am pleased to report that
pledges to the Global Fund to Fight AIDS, Tuberculosis, and Malaria now
exceed $1.7 billion and continue to grow. The Fund is meeting at
Columbia University in New York this week and is expected soon to
announce grants to partnerships in affected countries.
We want this Global Fund to complement national, bilateral, and
other international efforts to fight these dreaded diseases. Strong
congressional support will ensure that the United States remains the
leader in this global humanitarian and national security effort.
In our own hemisphere, Mr. Chairman, we have met with considerable
success. Highlights have been the President's warm relationship with
Mexico's President Fox, the Summit of the Americas in Quebec, and the
signing of the Inter-American Democratic Charter in Lima, Peru. Now our
focus is to create a Free Trade Area of the Americas--including, as
President Bush has described, not only our current negotiations with
Chile but also a new effort to explore the concept of a free trade
agreement with Central America.
To be sure, there are some dark clouds moving in over Latin
America, and one of the darkest looms over Colombia where a combination
of narco-terrorism and festering insurgency threatens to derail the
progress the Colombians have made in solidifying their democracy.
Our Andean Regional Initiative is aimed at fighting the illicit
drugs problem while promoting economic development, human rights, and
democratic institutions in Colombia and its Andean neighbors. Intense
U.S. support and engagement has been the critical element in our
counterdrug successes in Bolivia and Peru and will continue to be
critical as we help our regional partners strengthen their societies to
confront and eradicate this threat to their own democracies and to
America's national security interests.
But, Mr. Chairman, our counterdrug and development efforts in
Colombia are not enough. It has become increasingly clear that our goal
with respect to Colombia must be to help that democratic nation
preserve and strengthen its democracy while ensuring greater respect
for basic human rights. An end to the present conflict--peace--is
essential to our accomplishing that goal. We must work with the
Colombians to create the conditions where peace is possible.
To that end, we are seeking the necessary authorities to provide
enhanced intelligence sharing, additional training, and more
equipment--all geared toward a security mission that is broader than
the current counterdrug focus. We are not talking about U.S. troops
participating in combat operations; we are talking about helping the
Colombians secure their state and their democracy. We are talking about
helping the Colombians fight terrorism.
President Bush framed the issue in his meeting with President
Pastrana last week. The President made his number one priority very
clear: ``My biggest job now,'' he said, ``is to defend our security and
to help our friends defend their security against terror.''
We have made it clear and will continue to make it clear that the
Government of Colombia must also fully commit to this task. No amount
of additional U.S. assistance will be sufficient to turn the tide
unless Colombia dedicates more of its own resources to this task and
commits decisively to a policy of establishing state authority and
effective security for its people.
I also want to emphasize that we work with the Colombians to ensure
respect for human rights. There is no trade off between our work with
Colombians on human rights and elimination of the terrorist threat. Nor
are we seeking to change the caps on the number of U.S. military and
civilian personnel we can have in Colombia at any given time. Both of
these concerns are still very much a part of the pattern of our efforts
with this struggling democracy.
Mr. Chairman, a dark cloud seemed recently to pass over Venezuela
as well--a cloud that had been building for some time as President
Chavez became less and less responsive to growing opposition to his
policies, leading to increasing polarization of Venezuelan society. We
hope that the most recent tumble of events in that country foretell a
President much more cognizant of the demands of democracy. As President
Bush said last week, ``if there's lessons to be learned, it's important
that [Chavez] learn them.'' The President also said that it is ``very
important for Chavez to embrace those institutions which are
fundamental to democracy.''
The Organization of American States (OAS) agreed on April 18 to
help Venezuela regain its democratic footing. We believe there is also
a constructive role for our own Congress--to urge the Venezuelan
government to welcome OAS engagement and to encourage the opposition to
join the national dialogue.
Elsewhere in Latin America, Mr. Chairman, we have begun new
initiatives.
President Bush's Third Border Initiative (TBI) seeks to broaden our
engagement with our Caribbean neighbors based on recommendations by the
region's leaders on the areas most critical to their economic and
social development. The TBI is centered on economic capacity building
and on leveraging public/private partnerships to help meet the region's
pressing needs.
In addition to its economic provisions, the Third Border Initiative
includes 20 million dollars for HIV/AIDS education and prevention
efforts. This represents a two-fold increase in U.S. HIV/AIDS
assistance to the region in just two years.
As you are aware, Mr. Chairman, our ties to the Caribbean region
are as much cultural and human as they are economic and political. The
countries of the Caribbean attract millions of American visitors every
year and the region is our sixth largest export market. Large numbers
of Caribbean immigrants have found their way to America, including, I
am proud to say, my Jamaican forebearers. Here people from the region
have found freedom and opportunity and have added something wonderful
to the great American cultural mix. But our primary goal must be to
help ensure that the peoples of the Caribbean find new opportunities
for work, prosperity and a better life at home.
At the end of the day, it is difficult to exaggerate what we have
at stake in our own hemisphere. Political and economic stability in our
own neighborhood reduces the scale of illegal immigration, drug
trafficking, terrorism, and economic turmoil. It also promotes the
expansion of trade and investment. Today, we sell more to Latin America
and the Caribbean than to the European Union. Our trade within NAFTA is
greater than that with the EU and Japan combined. We sell more to
MERCOSUR than to China. And Latin America and the Caribbean is our
fastest growing export market. Clearly, the President is right to focus
attention on this hemisphere and we will be working hard in the days
ahead to make that focus productive, both economically and politically.
In that regard, we have a very positive vision for a future Cuba--a
Cuba that is free, with a strong democratic government that is
characterized by support for individual civil, political, and economic
rights. A Cuba in which people are free to choose their own leaders and
to pursue their own dreams. And a Cuba that is a good neighbor to all
in the Caribbean and in the hemisphere at large. That such a Cuba can
exist we have never doubted--just look at the contributions Cuban-
Americans have made in our own country and you understand immediately
what such people are capable of.
Mr. Chairman, set against the past year's foreign policy successes
is not just the conflict in Colombia in our own hemisphere, but several
challenges elsewhere. In this regard, there is no question that the
situation between Israel and the Palestinians is at the top of our
list.
I have just returned from the Middle East. I met with key leaders
in Morocco, Egypt, Syria, Jordan and Lebanon, as well as with Crown
Prince Abdullah of Saudi Arabia--and of course I met with Prime
Minister Sharon and Chairman Arafat.
I went to the Middle East because the President asked me to travel
to a region in turmoil. Recent events have taken an enormous toll in
lives lost, families shattered, economic activity frozen and mounting
humanitarian distress.
An additional cause of tension is the ongoing threat posed by
attacks by Hezbollah and others across the United Nations' recognized
Blue Line. It was for that reason I traveled to Beirut and Damascus to
underscore the President's strong message to all parties to exercise
restraint.
In my consultations with our international partners during the ten
days of my travel, and with our Arab friends and Israelis and
Palestinians, I listened carefully and I probed hard. I found broad
support for a comprehensive strategy as a way forward.
The Madrid Quartet meeting, which I mentioned earlier, resulted in
a strong declaration endorsing this comprehensive approach. In that
declaration the United States, the United Nations, the European Union
and the Russian Federation were united in this endorsement.
There are three critical elements in this comprehensive strategy:
first, security and freedom from terror and violence for Israelis and
Palestinians; second, serious and accelerated negotiations to revive
hope and lead to a political settlement; and third, economic
humanitarian assistance to address the increasingly desperate
conditions faced by the Palestinian people.
Confronting and ending terrorism are indispensable steps on the
road to peace. In my meetings with Chairman Arafat I made it clear that
he and the Palestinian Authority could no longer equivocate. They must
decide as the rest of the world has decided that terrorism must end.
Chairman Arafat must take that message to his people. He must follow
through with instructions to his security forces. He must act to arrest
and prosecute terrorists, disrupt terrorist financing, dismantle
terrorist infrastructure and stop incitement.
Prime Minister Sharon stated his intention to complete Israel's
withdrawal from the areas that it had occupied. He provided me with a
time-line for the withdrawal. I stressed to the Prime Minister the
urgency of completing withdrawal and was assured of real results in the
specified days. I recognized the particular circumstances at the Church
of the Nativity in Bethlehem and the Presidential compound in Ramallah,
and I emphasized the importance of their urgent non-violent resolution.
Improvement in the security situation, if it is achieved, must be
linked to the second point: determined pursuit of a political solution.
There can be no peace without security, but there can also be no
security without peace. Only a negotiated settlement can resolve the
conflict between Israelis and Palestinians. We must find a way to bring
together traditional elements such as United Nations Security Council
Resolutions 242 and 338, with new initiatives, such as my Louisville
speech last November, U.N. Resolution 1397, and the Arab League's
endorsement a month ago of the initiative of Saudi Crown Prince
Abdullah.
A number of the leaders with whom I spoke during my travel have
expressed interest in convening a conference on the Middle East in the
near future, a conference with international backing. As they have
suggested, its purpose would be to restore hope, reaffirm the urgency
of a comprehensive settlement, and resume direct negotiations in order
to achieve that comprehensive settlement.
At the same time we explore this initiative and other ideas to
address the political issues, the international community must address
the dire humanitarian problems as well as the long-term economic needs
of the Palestinian people. During my visit to Jerusalem, I was pleased
to announce that the United States would contribute an additional $30
million in support of the United Nations Relief and Works Agency and
its programs in providing health, education, relief and social services
to Palestinian refugees. This is beyond the $80 million we already
provide annually. We are augmenting this with emergency assistance to
deal with the special conditions in Jenin refuge camp--tents and
equipment to purify water and prevent the spread of disease.
International donors will meet in Norway later this month to
increase assistance to the Palestinian people at this time of
exceptional need. Also, international humanitarian and aid agencies
must have the freedom and access that they need to do their jobs. So
this is the comprehensive approach I believe we must pursue. I left
Assistant Secretary of State Bill Burns in the region to follow up on
my visit. As circumstances warrant, the President is prepared to send
DCI Tenet in the near future, to work with the parties to resume
security cooperation between the parties. Mr. Tenet has experience in
this from last year--experience in these kinds of organizations and
activities--that I think will once again benefit both parties.
Moreover, I plan to return to the region to move ahead on all
aspects of our comprehensive approach.
Mr. Chairman, for the Palestinian people and leaders of the
Palestinian Authority, the question is whether violence and terrorism
can be renounced forever and whether their sights can be set squarely
on peace through negotiations.
For the people and leaders of Israel, the question is whether the
time has come for a strong, vibrant State of Israel to look beyond the
destructive impact of settlements and occupation, both of which must
end, consistent with the clear positions taken by President Bush in his
April 4 speech. Israelis should look ahead to the promise held out by
the region and the world of a comprehensive, lasting peace.
For the Arab peoples and their leaders, the question is whether the
promise and vision of Crown Prince Abdullah's initiative can be
transformed into a living reality. It is important that artificial
barriers between states fall away, and distorted and racist images
disappear from the media and from public discourse.
For the people and leaders of the international community, the
question is how we can help both sides solve the deep problems they
face.
These are the challenges that we all face. President Bush has
directed his administration to do what is necessary to stop the
violence, encourage efforts toward peace, and restore the economic
foundations of the region. Our fervent hope is that Israelis,
Palestinians, our Arab friends, and the international community will
also rise to this challenge.
Mr. Chairman, with regard to other challenges in this region, Iraq
comes next on our list. That country remains a significant threat to
the region's stability. We are working at the United Nations and
elsewhere to strengthen international controls on Iraq. In the last
year, we successfully stopped the free fall of sanctions and began to
rebuild United Nations Security Council consensus on Iraq. The UNSC
unanimously adopted resolution 1382 in November, committing itself to
implement the central element of ``smart sanctions'' by the end of next
month--and I believe we are going to make it.
This central element, or Goods Review List (GRL), identifies
materials UNSC members must approve for export to Iraq and ensures
continued supervision and control over dual-use goods. Its
implementation will effectively lift economic sanctions on purely
civilian trade and focus controls on arms, especially WMD. This will
further strengthen support for U.N. controls by showing the
international community that Saddam Hussein, not the United Nations and
not the United States, is responsible for the humanitarian plight of
the Iraqi people. We have achieved agreement with the Russians on the
substance of the GRL and are now finalizing processes for implementing
the list and working on a UNSC Resolution for adopting it.
At the end of the day, we have not ruled out other options with
respect to Iraq. We still believe strongly in regime change in Iraq and
we look forward to the day when a democratic, representative government
at peace with its neighbors leads Iraq to rejoin the family of nations.
With regard to other challenges, we have a long-standing list of
grievances with Iran, from concerns about proliferation, to that
country's continued sponsorship of terrorism, to Iranian meddling in
Afghanistan in a way unhelpful to the Interim Authority in Kabul. Of
late, we have been very clear in communicating to Teheran that its
support for terrorism must stop and that what is needed in Afghanistan
is help, not meddling.
If Iran renounced terrorism, if it supported the Interim Authority,
I am convinced that we would be able to talk to Iran, that we would be
able to have a reasonable conversation with Iranian leaders. With
respect to the situation in Afghanistan, for example, I believe we can
demonstrate to them that it is not in their interest to destabilize the
government that they helped to create in Bonn. The other issues will be
more difficult; but I do believe constructive talks with Iran on
Afghanistan are possible.
Mr. Chairman, let me now turn to Afghanistan and the war on
terrorism.
In January, I was in Tokyo to join the European Union, Saudi
Arabia, and Japan in hosting the Afghan Donor Conference. The
conference helped to ensure that a wide range of countries will help
the Afghans rebuild their country. The United States pledged almost
$297 million at the conference and others pitched in accordingly. The
total pledged at this point is around $4.5 billion with more than $1.8
billion for the first year.
But the heavy-lifting with respect to Afghanistan is only just
beginning. We have helped the Afghans remove the oppressive Taliban
regime from their country. We have destroyed the al-Qaida network in
Afghanistan, with American, British, and other troops fighting the
remnants as we speak. We have made possible the delivery of
humanitarian aid, including massive amounts of food. We have avoided
the wholesale starvation that many predicted. Moreover, we have helped
the people of Afghanistan establish a multi-ethnic Interim Authority in
Kabul, led by Chairman Karzai. One of its ultimate goals is to oversee
an agreed process, now begun with district selections of
representatives who will help determine the composition of the Loya
Jirgas that will lead to a broad-based Afghan government--one that
represents all the people of the country, people of every background
and region, women as well as men. In June the Emergency Loya Jirga will
complete the process of creating a transitional administration, the
next step toward our ultimate goal of a fully democratic Afghanistan.
Many of our key allies and partners are contributing to the
International Security Assistance Force in Kabul to help ensure a
secure environment for Mr. Karzai to build a new Afghanistan. We want
to do everything possible to prevent the rise of any alternative power
to the Interim Authority and Transitional Administration, until a
permanent government can be established and begin to take care of this
challenge on its own.
A budget for the Interim Authority has been established and funded.
The Authority is beginning to meet payrolls. Police and other Afghan
officials are being paid. Schools are opened. Reconstruction has begun,
to include the beginning of a new national police and military. Roads
are being opened. The United Nations, for example, recently declared
that the road from Islamabad to Kabul, Kabul's main external lifeline,
and the road from Kabul to Kandahar, were open to unaccompanied U.N.-
employee traffic. In other words, U.N. employees were free, and it was
considered safe for them, to travel unaccompanied on those roads.
Refugees are returning in record numbers. And indeed, the former King
of Afghanistan returned for the first time in 30 years last week.
Much remains to be done and admittedly a lot of what remains will
be difficult to accomplish. But we believe that at long last
Afghanistan is on a positive track.
Mr. Chairman, I know that you are aware of the nature of the
challenge we confront in Afghanistan. You understand what is needed to
reconstruct this country and that foremost of all what is needed is a
long-term commitment by the international community. If we can ensure
such a commitment, and if we can achieve proper accountability in the
use of the donor funds, then I believe there is a good chance of making
significant progress in bringing a new future to Afghanistan--and
ending the days of warlordism and political chaos that bred the Taliban
and made a fertile ground for terrorists. And as reconstruction begins
in Afghanistan, the war against terrorism continues. As President Bush
said in his State of the Union Address, ``What we have found in
Afghanistan confirms that, far from ending there, our war against
terror is only beginning.'' The administration is working together in
new ways never before envisioned. And that's what this effort is going
to require. FBI, CIA, INS, Treasury, State, the Attorney General and
Justice Department, and others, are all coming together. This campaign
is transnational, cross-border, even global in a way we have never
contemplated.
We are operating in several areas right now. For example, in Yemen
we are working with President Ali Abdallah Salih to uproot the al-Qaida
network there. In the Philippines, we are working with President Arroyo
to assist that country in combating its terrorists, the Abu Sayyaf--who
as you know hold two American citizens as hostages.
We are also deploying a small force to Georgia to assist President
Shevardnadze in getting a handle on a tough area in his country--an
area that has spawned and harbored terrorists in the past. These troops
will help train and equip Georgian forces in counterterrorism
techniques and methods.
With respect to any new major use of military force in the war on
terrorism, we have not made any recommendation to the President and the
President has made no decision as yet with respect to such use of
force. But there are many other actions that are taking place--actions
of a law enforcement, political, diplomatic, financial, and
intelligence-sharing nature.
Mr. Chairman, as I said earlier a sizable portion of the
President's budget request is dedicated to these counterterrorism
efforts, as you will see as I turn to the specific priorities of our
budget request for Foreign Operations.
The President's fiscal year 2003 request for Foreign Operations is
a little over $16.1 billion. These dollars will support the continuing
war on terrorism, the work we are doing in Colombia and the Andean
region at large, our efforts to combat HIV/AIDS and other infectious
diseases, essential development programs in Africa, the important work
of the Peace Corps and the scaling up of that work, and our plan to
clear arrearages at the Multilateral Development Banks, including the
Global Environment Facility.
war on terrorism
To fight terrorism as well as alleviate the conditions that fuel
violent extremism, we are requesting an estimated $5 billion. In
addition to the initiatives outlined in our budget request for the
State Department and Related Agencies, this funding includes:
--Foreign assistance--$3.6 billion for economic and security
assistance, military equipment, and training for front-line
states and our other partners in the war on terrorism. This
includes--
--$3.4 billion from Foreign Operations accounts such as the
Economic Support Fund, International Military Education and
Training, Foreign Military Financing, and Freedom Support
Act.
--$88 million for programs in Russia and other states of the former
Soviet Union to reduce the availability to terrorists of
weapons of mass destruction. Ongoing programs engage former
weapons scientists in peaceful research and help prevent
the spread of the materials expertise required to build
such weapons.
--$50 million to support the International Atomic Energy Agency
(IAEA) in activities designed to counter nuclear terrorism
and implement strengthened safeguards; and $15 million to
allow us to respond quickly and effectively to
unanticipated or unusually difficult non-proliferation
projects or opportunities.
--$69 million for counterterrorism engagement programs, training,
and equipment to help other countries fight global terror,
thereby strengthening our own national security.
--$4 million for the Treasury Department's Office of Technical
Assistance to provide training and other necessary
expertise to foreign finance offices to halt terrorist
financing.
And Mr. Chairman, in the fiscal year 2003 budget request there is
approximately $140 million available for Afghanistan, including
repatriation of refugees, food aid, demining, and transition
assistance. I know that President Bush, the Congress, and the American
people recognize that re-building that war-torn country will require
additional resources and that our support must be and will be a multi-
year effort. Moreover, as I said earlier, we do not plan to support
reconstruction alone and we will seek to ensure that other
international donors continue to do their fair share.
At the Virginia Military Institute last week, President Bush made
very clear what he wants to do for Afghanistan. The President told his
audience of eager cadets that one of their own, General George C.
Marshall, had helped ensure that a war-ravaged Europe and Japan would
successfully recover following WWII. Now, today, Europe and Japan are
helping America in rebuilding Afghanistan. The President said that ``by
helping to build an Afghanistan that is free from evil and is a better
place in which to live, we are working in the best traditions of George
Marshall.'' And so we are.
It will be a long, hard road. We know it. But like General Marshall
we also know that we must do it. And the international community knows
that it must help.
andean counterdrug initiative
We are requesting $731 million in fiscal year 2003 for the multi-
year counter-drug initiative in Colombia and other Andean countries
that are the source of the cocaine sold on America's streets. ACI
assistance to Andean governments will support drug eradication,
interdiction, economic development, and development of government
institutions. In addition, the Colombians will be able to stand up a
second counterdrug brigade. Assisting efforts to destroy local coca
crops and processing labs there increases the effectiveness of U.S. law
enforcement here.
In addition to this counterdrug effort, Mr. Chairman, we are
requesting $98 million in FMF to help the Colombian government protect
the vital Cano Limon-Covenas oil pipeline from the same foreign
terrorist organizations involved in illicit drugs--the FARC and the
ELN. Their attacks on the pipeline shut it down 240 days in 2001,
costing Colombia revenue and disrupting its economy, and causing
serious environmental damage. This money will help train and equip the
Colombian armed forces to protect the pipeline. These funds begin to
apply the policy change I referred to earlier; that is, the shift from
a strictly counterdrug effort to a more broadly based effort targeted
at helping Colombia fight the terrorists in its midst as well as the
drugs.
global health and hiv/aids
In fiscal year 2003, we are requesting $1.4 billion for USAID
global health programs. Of this amount, we are requesting $540 million
for bilateral HIV/AIDS prevention, care, and treatment activities, and
$100 million for the Global Fund to Fight AIDS, Tuberculosis, and
Malaria, to which I referred earlier. All of this funding will increase
the already significant U.S. contribution to combating the AIDS
pandemic and maintain our position as the single largest bilateral
donor. I should add that the overall U.S. Government request for
international HIV/AIDS programs exceeds one billion dollars, including
$200 million for the Global Fund.
the peace corps
All of you heard the President's remarks in his State of the Union
address with respect to the USA Freedom Corps and his objective to
renew the promise of the Peace Corps and to double the number of
volunteers in the Corps in the next five years. We have put $320
million for the Peace Corps in the fiscal year 2003 budget request.
This is an increase of over $42 million over our fiscal year 2002
level. This increase will allow us to begin the scaling up that the
President has directed. We intend that the Peace Corps will open
programs in eight countries, including the reestablishment of currently
suspended posts, and place over 1,200 additional volunteers worldwide.
By the end of fiscal year 2003 the Peace Corps will have more than
8,000 volunteers on the ground.
mdb arrears
The fiscal year 2003 request includes an initiative to pay one
third of the amount the United States owes the Multilateral Development
Banks (MDBs) for our scheduled annual commitments. With U.S. arrears
currently now totaling $533 million, the request would provide $178
million to pay one third of our total arrears during the fiscal year.
The banks lend to and invest in developing economies, promoting
economic growth and poverty reduction and providing environmental
benefits. We need to support them.
Mr. Chairman, in addition to what I have given you with respect to
the President's budget request for fiscal year 2003, I want to give you
the main priorities for our supplemental request for fiscal year 2002.
But first let me tell you how grateful we are at the Department for
the efforts of this subcommittee and the House subcommittee to get us
the $1.5 billion in crucial Emergency Response Fund foreign operations
funding to address the immediate post-September 11 needs. That was just
the start though.
We are asking for $1.6 billion supplemental funding for fiscal year
2002. This amount includes $322 million for the Department. These
dollars will address emergent building and operating requirements that
have arisen as a result of the September 11 terrorist attacks,
including reopening our mission in Kabul, Afghanistan; reestablishing
an official presence in Dushanbe, Tajikistan; and increasing security
and personnel protection at home and abroad.
That leaves about $1.3 billion for foreign operations. These
funds--added to the request we have made for fiscal year 2003 for the
Front Line States (FLS)--are primarily to:
--Deter and prevent acts of international terrorism
--Provide vitally needed military equipment, training and economic
assistance to our friends and allies
--Expand respect for human rights and judicial reform in the FLS
--Provide a significant and immediate impact on displaced persons in
the FLS
--Support civilian reintegration of former combatants and reestablish
law enforcement and criminal justice systems
--Provide economic and democracy assistance, including help with
political development, health care, irrigation and water
management, media development, community building and
infrastructure improvements, and economic and civil society
reform.
In addition, we have requested legislative authority in two areas.
First, authority that will facilitate the provision of Cooperative
Threat Reduction and Title V Freedom Support Act assistance. This
assistance has been critically important in the dismantlement and non-
proliferation of WMD material and expertise in the New Independent
States. Second, as I referred to earlier, we are requesting expanded
authorities to allow support for the Government of Colombia's unified
campaign against drugs, terrorism, and other threats to its national
security.
In sum, Mr. Chairman, these supplemental dollars for foreign
operations in fiscal year 2002 will be directed at draining the swamp
in which terrorists thrive and at insuring the long-term success of
Operation Enduring Freedom.
Mr. Chairman, as I told this committee last year, the conduct of
the nation's foreign policy suffered significantly from a lack of
resources over the past decade. I have set both my CEO hat and my
foreign policy hat to correct that situation. But I cannot do it
without your help and the help of your colleagues in the Senate and
across the capitol in the House.
I ask for your important support in full committee and in the House
as a whole, both for the $8.1 billion we are requesting for the
Department and related agencies and for the $16.1 billion we are
requesting for foreign operations. In addition, I ask for your help
with the supplemental request for fiscal year 2002. With your help, and
the help of the whole Congress, we will continue the progress we have
already begun.
Thank you, and I will be pleased to take your questions.
Senator Leahy. Thank you, Mr. Secretary.
AFGHANISTAN
You referred to the President's position on a Marshall Plan
for Afghanistan. I was looking at a New York Times editorial
last week on Afghanistan and it refers to the President as
having delivered a remarkable speech in which he vowed to lead
an international effort to rebuild Afghanistan. The New York
Times also praised his earlier speech in Monterrey, Mexico.
As you know, I made similar comments praising the President
for those speeches. The editorial raised two points, regarding
Afghanistan. It said Afghanistan remains in dire need of an
expanded international security force, something the
administration has rejected. Second, USAID recently asked for
$150 million in supplemental funding for humanitarian programs
in Afghanistan. OMB approved only $40 million, saying USAID
could not absorb more funds because the roads were unsafe and
so on.
Now, I agree with the President that we must do more to
help rebuild Afghanistan. I know you do, and, I believe,
everybody in the Congress does, as well. We cannot walk away,
as many did after the Russians withdrew. In addition to the
lack of funds, we are apparently not going to expand the
peacekeeping force, even though it is going to be months before
the Afghan army is ready to deploy. In the interim, what is our
strategy to maintain law and order? And, with the lack of
security in some parts of the country, how do we get aid in to
rebuild the schools, rebuild the hospitals, and rebuild the
basic infrastructure--projects that are vital to show the
Afghan people that the United States is committed to improving
their lives?
Secretary Powell. I think we do have a solid, comprehensive
approach to the problem, Senator. Take what we have allocated
so far in 2002, add to that the emergency response fund 2002
request and 2002 supplemental request, and what we are asking
for in 2003 it comes to a total of $813 million, including $227
million of AID funding.
In addition, I think we have had some success at the donors
conference in Tokyo in asking the international community to
come forward with close to $5 billion to assist with Afghan
reconstruction efforts, and in other conferences we have been
working to find the funds necessary, using different donors
lists to find the funds necessary to rebuild the Afghan
National Army, and so I think we are off to a good start.
The issue of the International Security Assistance Force
(ISAF) and its size has been one that has been discussed at
length and debated at length. The first group going in under
the leadership of the British accomplished the mission that it
was sent to do as a result of the Bonn conference, and that is
to bring stability to Kabul. The Bonn conference that set in
place the interim authority said that as appropriate and if
necessary the ISAF could be expanded to other sites throughout
Afghanistan.
It is not clear that there is a pressing need in every
other city outside Kabul for that kind of military presence.
The real security that is going to be needed for the
reconstruction of Afghanistan, and not just in cities, but
throughout the countryside, is going to come from building up a
national army, building up a border patrol, and building up a
police force, and that is where the focus of our efforts are
going right now. We met several times earlier this week with
Secretary Rumsfeld and other members of the administration to
make sure that we are putting in place with our friends and
allies a good plan, a comprehensive plan to build up those
organizations and institutions.
There is not a great deal of enthusiasm in the
international community, even if we thought it was an
appropriate thing to do, to contribute large numbers of troops.
Some people have said, let us get 30,000 troops and put them in
Afghanistan, but essentially they would be sitting around in
cities sort of looking for the right kinds of missions, and in
fact there is not that level of support in the international
community for that level of commitment.
Senator Leahy. The security situation in Afghanistan is
very complex. You have a lot of military dressed in civilian
clothes, inter-mixed with humanitarian workers who are trying
to distribute aid. In many cases it's very difficult to
distinguish the humanitarian workers from some of the military
personnel.
I have written to Secretary Rumsfeld on this issue. This
may seem like a minor thing, but it is actually a very
important issue if you are the humanitarian worker out there
trying to build a water system or some other project, and you
are afraid someone is going to mistake you for a combatant.
There has got to be a way of addressing this problem.
Back to the peacekeeping issue, I agree with you. We need
an Afghan police force. We need an Afghan army. But, we are a
long way from being able to rely on these forces alone to
provide security throughout Afghanistan. I am worried about
what we do in the interim. The police and army are months away
from being fully operational and we have some very significant
problems to deal with before then.
Secretary Powell. We do have some problems. We do not have
anarchy in the country. It is a growing administration.
Chairman Karzai faces many challenges, but I think he is off to
a good start. The Loya Jirga will be convening in the very near
future to put a more permanent government in place. The
institutions are starting to be built that will be necessary to
govern this country.
There is instability in various parts of the country, but
it is not the total chaos that some have suggested it would be.
There is a U.S. troop presence in a number of places throughout
the country. In some cases, such as in Kandahar, it is a large
presence. In other places, it is a much smaller presence, just
people who can be on the scene to provide some reassurance to
the people that there is a United States or international
presence watching what is going on, but the real key is to
build up an Afghan army.
No number of European troops or troops from other parts of
the world can substitute for a national army that is
multiethnic, that is representative of the government. That is
the challenge that we have to meet quickly, and those units are
now starting to be trained and will come online in the course
of the next year or so, and that is where we really have to
make the strongest push and make the greatest investment.
With respect to uniformed military personnel, we are
sensitive to the concerns that have been raised in your letter.
I know that Don Rumsfeld is looking at identification means,
and I am not sure how widespread a concern this is, and I am
not sure of any humanitarian worker who truly has been put at
risk, or injured, because of this confusion that is alleged to
exist.
MIDDLE EAST
Senator Leahy. We will continue to have a lot of questions
on these issues. Following up on the Middle East, I am sure
that you are aware of U.S. law that prohibits the provision of
U.S. assistance to units of foreign militaries where there is
credible evidence that members of these units have committed
gross violations of human rights. Were there any violations of
this law in the West Bank, or areas around it, during the past
few weeks?
Secretary Powell. Israel, in pursuing terrorists and
undertaking the operations in recent weeks used equipment that
is indigenous, their own equipment, but they also used U.S.
military equipment. We are sensitive to the requirements of the
law, and so far I have not received any reports and have not
yet seen the need for any inquiries as to whether or not there
has been a violation of the law.
Senator Leahy. Well, has anybody asked that question?
Secretary Powell. Nobody has raised it to me yet, Mr.
Chairman, but I will go back to the Department and see whether
or not it has been raised. It comes up on a frequent basis, and
we examine the particular circumstances to see whether the
equipment is being used consistent with the law, and so far we
have not found an inconsistent use.
Senator Leahy. If it has been used inconsistently, will you
notify this committee?
Secretary Powell. If something is inconsistent with the
law, I will certainly do what the law requires.
Senator Leahy. We also have a Vermont Palestinian family
trying to locate several relatives who lived in Jenin. One
blind elderly aunt was trapped in the rubble for some time, but
was eventually saved. I will leave with your staff the names,
if somebody with the U.S. mission to Israel could check on that
I would appreciate it.
Secretary Powell. We shall. I have just made a note.
Senator Leahy. My time is up. I was told there was going to
be a vote.
Senator McConnell. It has not happened yet.
Senator Leahy. But Senator McConnell, why don't you go
ahead. If a vote does start I will slip out so we can keep it
going.
Senator McConnell. Mr. Secretary, the Israelis are
understandably somewhat skeptical about the U.N. investigation
of Jenin, particularly since there has been no effort on the
part of the United Nations to investigate Palestinian bombings
of Israeli civilians. I think from their point of view, since
the partition of Palestine in the late 1940s, Israel has had a
uniformly unsatisfactory experience with the United Nations
time after time after time.
I am curious as to whether or not you think the United
Nations ought to be requested--if they are going to start the
business of investigating military actions in this part of the
world--to investigate the Palestinian atrocities against
Israeli civilians as well.
Secretary Powell. I see no reason why any atrocity should
not be investigated by appropriate bodies, and I do not think
anybody would suggest there could be any justification for the
kinds of suicide bombings that we have seen that have taken the
lives of innocent Israeli citizens.
On its face, it is contemptible, and I think the United
Nations has spoken in that vein, as have we, every time it
occurs, and in this particular instance of Jenin, it was a
situation where the whole world was focusing on it, where it
was difficult to get in observers to take a look at what
happened, and we were encouraging the Israeli Government to
make Jenin accessible quickly to representatives of the ICRC or
other organizations that would get the facts and find out what
really happened, as opposed to these stories and anecdotes that
were floating out there.
Late last week, as the issue was really becoming quite
volatile, with people now starting to get in and seeing what
was on the ground, and realizing that something serious had
happened, it made sense to approach this in a more systematic
way. We had discussions with the Israeli Government. I spoke to
Foreign Minister Perez about it when he was with me last week,
and the Israeli Government agreed to a U.N. resolution,
supported by the United States and the other members of the
Security Council, that fact-finding--not an inquisition, but a
fact-finding mission should be dispatched to find out what
happened in Jenin and nowhere else. The resolution speaks
strictly to Jenin.
Since the Secretary General announced the membership of the
group, the Israelis have expressed some concern about the
membership and whether it is large enough to achieve its
purpose. They wanted to make sure that it stayed on focus with
the resolution, and it did not stray into other areas.
I spoke to Prime Minister Sharon about that last evening,
and understood his concerns. I conveyed those concerns to
Secretary General Annan, and last evening Secretary General
Annan met with the Israeli Ambassador to the United Nations and
went over the situation. The Israelis have dispatched a team,
coming to New York to discuss it all with the Secretary General
and his staff tomorrow, so I think we now have both sides
talking to one another directly to lay out their concerns.
Senator McConnell. Well, that certainly seems like a step
in the right direction. You have a military background, I do
not, but it seems to me that if the Israelis were completely
unconcerned about civilian casualties they could have chosen an
entirely different tactic to counter terrorism. They could have
simply wiped out the threat from the air, could they not?
Secretary Powell. You could wipe it out from the air, but
there was a great deal of destruction that took place from the
ground with bulldozers. Assistant Secretary of State Bill Burns
went in and also took a look to give us an independent
assessment from somebody I have confidence in.
He says there was quite a level of destruction that had
occurred within the Jenin camp, and it seemed to be in the best
interest of all concerned, especially the best interest of the
Israelis, to let a fact-finding team come in and see what the
facts are, as opposed to the kinds of coarse speculation that
was out there as to what happened with terms being tossed
around like massacre, or mass graves, none of which so far
seems to be the case. That is why we think it is important to
get a fact-finding team in.
Senator McConnell. Yes. It seems to me if the Israelis had
wanted to commit a massacre it would have been a lot easier to
do it from the air and wipe everybody out. That would be my
definition of massacre. I hope this investigation is done in an
objective manner.
Secretary Powell. I think it will be, and I think the
Secretary General is sensitive to concerns that were raised
yesterday. I know some of the individuals on the committee. I
know General Bill Nash, an American two-star General who is the
military person on the committee, and I am quite confident he
will look at this with a professional eye, and a professional
military eye, and deal with the question you raise. It would
have been far worse if they had used air power just to
pulverize everything and not put any of their troops at risk.
Senator McConnell. Yes.
Secretary Powell. They did put their troops at risk, and 23
Israeli soldiers lost their lives in that battle. The prime
minister and I have spoken of this, so I think it serves the
interests of all as a fact-finding committee to go out and lay
the facts out for the world to see.
Senator McConnell. Thank you, sir. Do we consider Israel a
frontline State in the war against terrorism?
Secretary Powell. Certainly Israel has had to deal with
terrorism perhaps more than any other country that we know of,
but for purposes of this particular presentation, and as this
budget proposal was structured, Israel was not included in
here. Israel gets funds from the United States in a variety of
other accounts, and we are always taking a look at what else
might be done to support Israel in its time of need.
Senator McConnell. What is the relationship these days
between the PLO and the PA with Iran?
Secretary Powell. We have expressed our concern in depth
and with considerable passion to the Palestinian authority
about the dealings they have had with Iran. It came to a head
with the Karine A, the ship that clearly came out of Iran and
was headed to the Palestinian authority. We pressed the
Palestinian leadership to accept responsibility for this ship,
to condemn those who were responsible for it, to forswear that
activity in the future, but I cannot tell you that it has been
forsworn, or this kind of activity is not continuing, but there
has been a connection between Iran and the Palestinian movement
that has produced such things as the Karine A.
Senator McConnell. Do we have any idea how Saudi Arabia
plans to distribute the $100 million it raised for the
Palestinians during the recent 3-day telethon?
Secretary Powell. It is a subject that I will be discussing
with the Saudi officials when I am with them tomorrow down at
Crawford with the President. We have seen some indications, and
we have even seen an Arab newspaper, handed to me by Chairman
Arafat, I might add, where some of the money, at least
according to this Arab newspaper advertisement, would be going
to elements of Hamas, so there are some troubling aspects as to
how that telethon money would be distributed.
Senator McConnell. Also, I understand that there are
reports that the Embassy of Saudi Arabia here in Washington is
buying 30-second pro-Palestinian advertisements throughout the
United States, including, interestingly enough, in my home
State. I am curious as to whether or not you were aware of
this, and if so if you had any observations about it.
Secretary Powell. I was not aware of that, and I do not
know that I have any observations until I see what the ads are,
since I do not know if the ads are proper, improper,
appropriate, inappropriate, and I do not know what the ads say.
Senator McConnell. Looking at the Palestinians down the
road, do you have any sense of what plans there were, if any,
toward developing some kind of functioning democracy in a
Palestinian state that may be created sometime in the near
future?
Secretary Powell. They have not started, yet, to develop in
a way that I think we would find acceptable for the kind of
State we want to see emerge in the occupied territories. As we
go forward, and as we find a political route forward, one of
the essential features of our work with the Palestinian
leadership and the Palestinian people has to be to put in place
a representative form of government that is answerable to its
people, that is transparent in its financial activities, that
has an accountable government----
Senator McConnell. If I could interrupt you, when we see
the associates of Chairman Arafat sitting around the table with
them, how are they chosen? Does he pick them?
Secretary Powell. Some of them are chosen by him. Some of
them represent heads of organizations. The ones I have been
dealing with are for the most part his chosen associates. Some
have positions to which they have been elected.
CAUCASUS
Senator McConnell. If I could shift to another part of the
world just for a minute. I have had an interest in the Caucasus
for sometime, and shortly after you came to office there was
the Key West meeting with regard to the Minsk Group, from which
spring a little bit of optimism that maybe there would be a way
to solve the Nagorno-Karabakh dispute. This conflict has
strangled both countries and inhibited the ability of Armenia
to develop normal relations with its biggest neighbor, Turkey.
I know you have had a lot on your plate lately, and probably
have not paid a whole lot of attention to this issue, but I
want to ask you if anything has happened since the Key West
meeting?
Secretary Powell. The Key West meeting was a good meeting,
and frankly, I had hoped to see a lot more progress since then
than we have seen. I am disappointed that we have not been able
to move the process further along, but we are now getting down
to the most difficult issues, and both presidents have staked
out strong negotiating positions, and both presidents are
trying to make a judgment as to what they can sell to their
people.
What I discovered after Key West is that some of the
commitments that were made, and some of the directions that
were laid out, when they actually went home to see whether or
not they could sell those at home, it turned out they were not
ready to be sold, and they could not move forward as
aggressively as I would have liked.
I am encouraged, however, that both presidents continue to
be engaged in the process, continue to look for a political
solution, and we continue to remain engaged with the Minsk
Group and with our own participation.
Senator McConnell. Given the evolving and improving nature
of the relationship between the Russians and ourselves, which I
think is a welcomed development, do you view the Minsk process
as a constructive way to get this solved?
It was my earlier view that a group that consisted of the
French, the Russians, and ourselves was probably not likely to
produce a positive result, because I had a suspicion that the
Russians preferred the status quo, and really did not
particularly want the Caucasus to settle down.
Is the evolving relationship between ourselves and the
Russians helpful in terms of the Minsk Group as the appropriate
process by which to go forward and achieve a settlement? In
other words, do you think the Russians would like to see this
thing settled?
Secretary Powell. I think they would, and I think the Minsk
Group has been an effective organization. At times we have
invoked President Putin to do something and move the process
along, at times the French president has been involved, and at
times President Bush has been involved.
The presidents have talked to each other over the past year
about it, and President Bush's relationship with President
Putin I think is strong right now, and frankly of such a
cooperative nature that we can work together effectively with
the Russians and the French to keep them moving along. So the
answer is yes, I think it is a successful arrangement, and I
think the Russians are committed to seeing progress, and that
is certainly my impression from my many, many meetings with my
counterpart, Foreign Minister Igor Ivanov.
Senator McConnell. Shifting next door, Georgia seems to be
going in the wrong direction, and I notice that it has
certainly been discussed of late in terms of the war on
terrorism and our own willingness to assist them. Could you
give me an assessment of where you see Georgia these days,
including the state of the Abkazia problem.
Secretary Powell. I think Georgia is still in a fragile
state. We are doing everything we can to help Georgia,
President Shevardnadze and their military, improve their
ability to go after terrorists who are using the Pankesi Gorge.
There was some concern about our efforts, and people thought
that we were trying to introduce U.S. troops into the region,
but we are not. What we are trying to do is train Georgian
troops so they can do a better job of dealing with that threat
in the gorge, which is a big distraction with respect to their
relations with Russia, and rolls into the Chechnyan problem.
We have also made it clear, however, that we do not want to
see any improvement of their capability, or that improved
capability used against Abkazia. It has to be a peaceful
solution, and is a fragile situation. We monitor it carefully.
We talk to all the parties, the Russians and President
Shevardnadze, we keep encouraging all sides to find political
ways to solve these interrelated crises in the region, and it
is another one of those accounts that we manage on a day-to-day
basis.
Senator McConnell. No assassination attempts on President
Shevardnadze lately?
Secretary Powell. Not lately, which is progress.
Senator McConnell. I see Senator Durbin is back. I am going
to run and vote, and I will be back.
Senator Durbin. Thank you very much.
Mr. Secretary, thank you for being here, and thank you for
your continued service to our country. You do us proud. That
comes from both sides of the aisle.
Secretary Powell. Thank you, sir.
MIDDLE EAST
Senator Durbin. We are happy to work with you.
May I speak first to the Middle East situation, and then to
the global AIDS crisis. The President made it clear after
September 11 what our policy would be in reference to
terrorism. We would consider enemies those on the other side of
the line, those who supported terrorism and harbored terrorism.
How, then, can we have a working relationship with the
Palestinian Authority when there is clear evidence of support
for terrorism, the Karine A shipment of 2,000 kilograms of C-4
plastic explosives destined for the Palestinian Authority, all
of the incidents which we have seen in the news, the Passover
massacre and other incidents? How can we reconcile what was a
clear and resolute position after September 11 with what we are
now facing and dealing with in the Middle East?
Secretary Powell. It is a question I put to Chairman Arafat
some 15 days ago. I went in to see him in his headquarters in
Ramallah. We had a long, 3-hour conversation, and what I said
to him is that he has to make a strategic choice, that
terrorism and violence can no longer be seen as an acceptable
means of finding a solution to the problem of a homeland for
the Palestinian people, and that unless he took action, and not
just words, but took action to move the Palestinian movement in
a new direction and start speaking to his people, and start to
use his ability as a leader, a leader who has been magnified
many times over the last several weeks. Rather than being
isolated he has become the center of attention around the
world.
He now has to use that leadership position to move his
people in a new direction. He has to start speaking not just in
English, but in Arabic, condemning suicide attacks, condemning
violence. He has done that. There is more he can do, but as I
have said to many people, it is not what he says, it is what he
does.
Senator Durbin. Have you seen those actions on his part
after 15 days?
Secretary Powell. I have seen statements. The violence has
gone down. There is still violence. He cannot control
everything. I think he can still do more as a leader of the
people. Even as we get out of this current crisis, where we
start to see the completion of the Israeli withdrawal which the
President has called for, and we start to try to work security
issues again with the Palestinian and the Israeli sides, I have
made it clear to Chairman Arafat that if we do not see deeds
match action, there is not much more the United States is going
to be able to do for him.
Senator Durbin. Are you troubled that as the opinion of
most Americans of Arafat and his policy, if not condoning,
supporting violence and terrorism, as the opinions of most
Americans decline in reference to Mr. Arafat, his role and
image in the Arab world seems to be growing by the day in
popularity. Is this creating a rift in our international
coalition against terrorism? Is it creating a chasm, a growing
chasm between the Arab States and sympathizers of the
Palestinian cause with the United States?
Secretary Powell. It has created a strategic problem for
the United States and, if I may say so, for Israel. Israel has
every right to defend itself against terrorism. The President
has said that. There is no question about it.
I talk to Mr. Sharon I would say almost every other day. I
spend a lot of time with Prime Minister Sharon. I know what it
is like to be a leader of the Israeli people who has to go to
the funerals, and so I know what he is facing, and I know his
commitment to try to achieve security for the people of Israel.
I also know what he has said to me in every one of our
conversations. He knows that there has to be a political
process. He said it again yesterday when he gave his televised
speech to AIPAC, that he hopes that as a result of this current
crisis we are now poised to begin negotiations and get into a
political track that will take us somewhere. But, the current
crisis with the Passover tragedy, that bombing, and with the
Israeli response, it started a spiral out of control with
respect to our strategic position and our interest with the
neighboring Arab countries. We believe that it was important
for us to get involved, as the President did get involved on
April 4, because the long-term consequences of not getting
involved, or letting that situation continue, would be very,
very destructive to our interests and to Israeli interests.
We saw embassies that have been no problem whatsoever
suddenly being demonstrated against, American cars being burned
in embassy courtyards. We became troubled by the deteriorating
situation, and that is why the President thought, end the
operation as soon as possible.
It took a little longer than we had hoped it would but it
is now in the process of coming to a conclusion, and we have
got to get back to security discussions between the two sides.
It is our belief, and we have heard this from Prime Minister
Sharon and from the Arab side and the Palestinian side as well,
that we have got to find a political way forward and we also
have to find a way to provide economic relief and humanitarian
support, reconstruction, help, and the building of a
Palestinian economy.
So all of that is a part of the equation for moving
forward.
HIV/AIDS
Senator Durbin. I could continue in this line of
questioning. There are many items that I would like to get
into, but I really want to focus the remainder of my time on
the global AIDS crisis.
There are many young people who are arrayed in the back of
this hearing room. They are waiting in the hallways. If I had
to sit down with them and point out something that I believe is
happening in the world today that will have a direct impact on
their life in the United States or wherever they choose to
live, it would certainly be the threat of terrorism, but it
would also be the threat of this global AIDS crisis. 8,000
people will die today somewhere in the world from AIDS, 14,000
will be infected with AIDS for the first time.
We are seeing the growth of this problem beyond Africa,
which is sadly the epicenter, to India, and Russia, and Asia,
at a pace which has to sober anyone who has studied epidemics
that have faced the world. Kofi Annan, the Secretary General of
the United Nations, has issued a challenge to all of the world
to come to the aid of developing nations and underdeveloped
nations that are suffering from this crisis and ask for a
pledge, an annual pledge of $7 to $10 billion.
It is natural that he would look first to the United
States, the wealthiest and most powerful Nation in the world.
Mr. Secretary, this year we have pledged $300 million to this
global AIDS fund. Next year, the President asks for $200
million, less than is being appropriated this year, and there
is no money being requested, as I understand it, in the
emergency supplemental for the global AIDS crisis.
It strikes me that we are moving at a snail's pace as this
worldwide plague gallops away from us. Do you really believe
that the United States is commitment to this problem?
Secretary Powell. We could do more, I think, though we
should not be ashamed of what we have done. We took the
leadership in this administration last year when the Secretary
of Health and Human Services and I went to the President and
said, this is a catastrophe, worse than terrorism where once
every now and again you have an incident. This is every day,
just as you describe, Senator.
And so we got started with the $200 million, added with the
Congress' assistance another $100 million, and now we have
asked for another $200 million. That is for the global trust
fund. It comes on top of roughly $514 million of bilateral
programs we have with respect to HIV/AIDS, and it comes on top
of billions of other dollars that are spent throughout the
Government to find a cure for AIDS, to do education on AIDS. We
have a lot of money going into the HIV/AIDS crisis, and $500
million of that large pot of money is into the trust fund.
If we could find more to put into the trust fund, or ask
for the trust fund, when you consider the balances and the
offsets that the President has to consider in putting together
a budget, I would support it.
Senator Durbin. I would say, Mr. Secretary, that Senator
Specter and I have offered an amendment to the supplemental for
$700 million more committed to multilateral and bilateral
efforts on AIDS as an emergency appropriation. I just cannot
think of money that we could spend more wisely than to try to
stop the pace of this epidemic.
I think the American people understand this, too. This is
not a problem in some other part of the world. This is a
problem of our world, a problem that is sadly an airline flight
away from being delivered to the United States every hour of
every day, and I hope that we can have the support of the
administration for $700 million.
Secretary Powell. Yes, I will pass that on to my colleagues
downtown and see what we can do as it comes through, but I
could not agree with you more, sir. We need to get on
education, we need to get on treatment, we need to get on cure,
we need to educate our youngsters as to how to protect
themselves.
I am a great believer in abstinence programs. My wife and I
have been championing those programs. I am also a believer in
protecting oneself, and you may have noticed I got into a
little trouble recently over this issue, but that is all right.
Senator Leahy. Not from most of us, Mr. Secretary.
Secretary Powell. It was interesting, we were also doubling
the purchase of condoms within the Agency for International
Development this past year to help those nations overseas who
are struggling, because you have got to hit it on all fronts.
You cannot stick your head in the sand and avoid the plain fact
of the matter 8,000 people a day are dying, and we can do
something about it, and we ought to do something about it. We
are, and we can do more.
Senator Durbin. Thank you. Let me close by just saluting
you for your statements on MTV which drew some criticism, as
Senator Leahy said, not from us, those of us who believe you
have taken the right approach, abstinence first, but protection
is critical, too.
Secretary Powell. You ought to see the rest of the MTV
piece. It is quite good.
Senator Durbin. Thank you very much.
Senator Leahy. I watched with disappointment. I thought you
were going to sing. I was told by those who have heard you sing
that you do it pretty well.
Before I go to Senator Reed, let me just underscore what
Senator Durbin has said. AIDS and infectious diseases are an
enormous problem, and we can and should do a great deal more.
As Senator Durbin pointed out, extremely dangerous infectious
diseases, such as the Ebola plague, are only an airplane trip
away from the United States.
With respect to AIDS, I would note for the record I met
with you, Senator Frist, President Bush, Kofi Annan, and Tommy
Thompson down at the White House on this critical issue. While
that was a closed meeting, I think I give away nothing by
saying that you were very strong on the need to do more. I have
also praised President Bush for saying we need to do more. I
think we can.
The pieces are slowly coming together, but only because I
think the world is awakening to the fact that AIDS is such a
horrendous problem. We could literally have countries
disappear. We now have a situation in some countries where you
have only the very young or very old, with practically nobody
in between. The whole structure breaks down.
Secretary Powell. Allow me to just expand on that point, if
I may. It became so obvious to me shortly after I became
Secretary that the HIV/AIDS and infectious diseases crisis was
not just a health problem, it was a democracy problem, it was
an economic problem, it was a social problem, it was a cultural
problem.
How can we talk about democracy and gee, let us have free
market activities in your country, when whole generations of
income-producers were being destroyed, were dying, leaving
their parents behind and children who were infected, but the
middle was gone. How could you talk about development when
there are countries which as a result of the HIV/AIDS crisis
have seen their life expectancy drop from something like 55 or
60 down to 44 in a matter of a few years?
It is a catastrophe far worse by orders of magnitude than
any other catastrophe or problem or crisis we have on the face
of the earth right now.
Senator Leahy. Thank you, and as I said, I have no doubt
about your own commitment to it. I have heard you not only in
the public domain, but I have heard you in the private meetings
with the President and others where you have been very strong
on that.
And Senator Reed, I apologize for stepping in. I appreciate
your courtesy in letting me do that.
CENTRAL ASIA
Senator Reed. Thank you, Mr. Chairman. Thank you, Mr.
Secretary. Let me commend you for your courageous efforts in
the Middle East. You changed the momentum, which was headed not
only in the wrong direction, but with increasing violence,
perhaps irredeemable, but thank you for what you have done.
Let me shift away from there for a moment, though, to
Operation Enduring Freedom, and more particularly Pakistan. The
Pakistan Government has been extraordinarily helpful to us.
President Musharraf has been very courageous in many different
ways, but there are increasing reports that Al Qaeda elements
are finding refuge in Pakistan. There are tribal areas
apparently that the government does not control.
The concern I have is that, despite the successful military
operations in Afghanistan, if a sanctuary exists, Al Qaeda will
find it, reconstitute themselves, and attack us again. Could
you comment upon efforts to work with the Government of
Pakistan to deny sanctuary to any of these elements?
Secretary Powell. We have been working with the Government
of Pakistan on this issue. President Musharraf has been
forthcoming. As you noted, Senator, these are tough areas, and
it is not just a matter of going in and occupying them by
military forces. It takes intelligence work, it takes liaison
work, and President Musharraf has been quite forthcoming, more
so than people might have expected at the beginning of this
campaign with respect to what he is willing to do and how he is
willing to cooperate with us. Some of the things we do not
discuss and, frankly, the military piece of this I would leave
to Secretary Rumsfeld or the Chairman of the Joint Chiefs of
Staff to discuss with you.
Senator Reed. Thank you, Mr. Secretary.
COLOMIBA
Mr. Secretary, turning to Colombia, we recognize there the
situation is deteriorating. This peace march over the last
weekend was organized by a professor at the University of Iowa,
Bernard Lafayette, who was temporarily detained, as a Governor
of the province detained, as a presidential candidate detained.
All of this is asking us and forcing us to reconsider
restrictions that we placed on the use of American equipment
and the number of American personnel, but I think we would be
ill-advised to open it up carte blanche. Are you going to
propose changes and new conditions that might be employed to
accompany our military equipment?
Secretary Powell. No, sir, I do not know that we have any
need for new conditions or anything that would restrict our
ability to conduct our programs the way we have been conducting
them.
Senator Leahy made a point in his opening statement with
respect to human rights and other issues, and we will continue
to apply those requirements of the law that the Senator and
you, sir, are so familiar with on human rights abuses, and
everything that has been directed in previous bills and
legislation we will continue to comply with. We are not trying
to get out of them.
Senator Reed. As I understand, the American equipment can
be used only for the counternarcotics battalions.
Secretary Powell. American equipment was provided to the
counternarcotics battalion because of the end of the safe haven
program, and we are looking for flexibility with respect to how
that equipment and how those units can be used, and how our
support can be used, since the merger between narcotrafficking
and insurgency activity is becoming blurred, but we are not
looking for any means by which or any opportunity to send U.S.
troops into active combat.
Senator Reed. I understand that, but the template that we
have used to define the use of this equipment and the use of
American trainers has been restricted to the counternarcotics
battalion. You have indicated that you are exploring a
different----
Secretary Powell. We are requesting in the supplemental, I
think is the vehicle we are now using, to remove some of the
barriers that exist between what we can do for narcotrafficking
and what we think we now need to be able to do to fight the
insurgency.
RUSSIA
Senator Reed. Let me raise a question with respect to
Russia, who is emerging as a close collaborator on so many
different initiatives. The administration is asking for waiver
authority for the comprehensive threat reduction program, which
suggests that there is a difficulty of meeting some of the
certification requirements. Could you elaborate the
difficulties certifying?
Secretary Powell. We need more information from the
Russians. I received a rather lengthy document yesterday that
answers a number of the questions that we put to them. I have
not had a chance to analyze it, but my staff is looking at it
now. But until we are able to provide the appropriate
certifications, we would like waiver authority, because we
would not like to stop supporting this kind of activity, and we
are pressing the Russians on it. They know the importance of
getting us the information we need.
Senator Reed. If I can raise another issue which we have
spoken about before, Mr. Secretary, and that is the status of
Liberians here in the United States. Many are here on a
deferred enforced departure ruling which every year must be
reviewed and extended with the cooperation of Secretary of
State and the Attorney General, and I would hope that we could
reach some type of permanent solution.
Many of these people have been here for 10 years or more.
They have become part of our community, and rather than having
the annual last minute nail-biting exercise to see if DED will
be extended, I would hope that we could work on a more
permanent solution and, certainly, if we do not reach one by
the end of this fiscal year, extend DED, and I would like to be
able to work with you on that, Mr. Secretary.
Secretary Powell. Well, thank you, Senator. I look forward
to working with you, and let me take a look at it and provide a
more comprehensive answer for the record.
NORTH KOREA
Senator Reed. Finally, let me just raise one other issue.
The policy towards North Korea. Having a big stick hopefully
allows you to employ other means, rather than using the big
stick, and we certainly have been using a big stick on North
Korea. In the last few days, there seems to be some indication
that they have responded by at least initiating a more serious
discussion with the South Koreans, an indication that they
might be quite willing to talk substantively. Are you following
that up aggressively?
Secretary Powell. Yes, we are. We do not step back in the
slightest from the President's description of North Korea. We
believe it is a regime that is not serving its people well, but
at the same time, the President made it clear that we were
willing to talk to them any time, any place, and without any
preset agenda.
It took the North Koreans a while to absorb our position
and reflect on it, and when the South Korean minister went up
to Pyongyang recently and was able to restart discussions
between North and South, he also came back with a message that
the North Koreans might be prepared to begin a dialogue with us
again, and so we will be following up on that, and do not have
any meetings scheduled yet, but we took serious note of this
apparent change in attitude and we will be following up on it.
The President's policy is one of firmness, but at the same
time a willingness to talk any time, any place.
Senator Reed. Thank you, Mr. Secretary. Thank you, Mr.
Chairman.
Senator Leahy. Thank you, Mr. Secretary, and Senator
Bennett.
Senator Bennett. Thank you, Mr. Chairman, and Mr.
Secretary, let me thank you for the commitment that you have
renewed here today to deal with Congress as a full partner. I
appreciated the breakfast that we had with you yesterday, your
willingness to be as candid as you were, and I commend you for
your willingness to do that, and personally thank you, because
it is enormously helpful--
Secretary Powell. Thank you, Senator.
EFFECTIVENESS OF U.S. FOREIGN ASSISTANCE
Senator Bennett [continuing]. To those of us who have to
face the press and our constituents and try to make some sense
out of what is going on. We pretend that we can, and time spent
with you empowers us to do it more effectively.
I would be replowing old ground if I talked about the
Israelis and the Palestinians. I think the other members of the
committee have gone through that adequately. I would just note
that since your trip there, there have been no more suicide
bombers and, since your trip there, there seems to be some
degree of settling down, and I would hope there is a cause-and-
effect relationship and applaud you for what you did there.
I want to move into another area altogether, which is the
more traditional area of this committee, foreign aid and its
use around the world, and I note that many commentators have
raised the mathematical measure of where the United States is
in terms of percent of GDP compared to other countries. I
consider that a completely meaningless kind of measure, but the
measure that I look for as a former businessman, to put it in
businessman's terms, is return on investment.
I am less concerned with how much money we put in than I am
with what kind of return we get on that investment, and trying
to coin a phrase, I am more interested in movement than
monument. That is, instead of going to these countries, as we
do as we travel, and have someone take me out to say, look at
what AID money bought, I want to say, well, that is a nice
monument to American generosity, but what kind of movement has
there been as a result of that investment towards stability and
prosperity, because I found that even if a country is what we
would call dirt poor, if there is a movement towards some
prosperity, they feel pretty good about it.
We look at them in absolute terms and we say, this country
is terrible, but it is better than it was yesterday as a result
of what we did, and that movement is the greatest bulwark
against terrorism and other kind of mischief. If there is no
hope, if there is no sense that we are moving forward, then no
amount of money and no number of monuments can help solve that
problem.
Would you comment on areas of the world where you think we
are using our AID money intelligently to get movement, rather
than the kind of statistics we get from the AID folks, who love
to stand here and total up all the monuments they have built?
Secretary Powell. Well, I hope the answer is everywhere.
Senator Bennett. So do we all.
Secretary Powell. Yes, but I can tell you that under
Administrator Natsios' leadership, I brought AID more closely
into the senior leadership councils of the State Department.
Andrew Natsios is at my staff meeting every single morning, so
I now know what is going on at AID.
And when you also look at what we are trying to do with the
millennium challenge fund that the President announced just
before Monterey, that additional $5 billion a year when it
becomes a steady state representing a 50-percent increase, in
all of our discussion about that millennium challenge fund, and
in my discussions with Administrator Natsios about where we are
going, it really goes to the heart of your question, and that
is, we want to start investing in those countries and those
places in the world that have made a commitment to democracy,
to market reform, to market economics, to transparency, to the
rule of law, to the end of corruption, so that the money is not
going down a hole.
I will give you the example of Afghanistan. We had a debate
in the Department not long ago about how AID was spending its
money, and somebody wanted AID to build a bridge in
Afghanistan, and the bridge would have cost a lot of money, and
we did not do it. Andrew Natsios was insistent that it is more
important for us to build mud brick houses and mud brick
schools than it is to build a nice, very expensive bridge that
would eat up half the money that was available.
Let somebody else go build a bridge. We are going to do
things that touch the people directly, and start to invest in
those things that give us movements and not monuments, schools,
hospitals, clean water, health care, things that give people
hope and start to give people the means by which they can reach
up and become part of the 21st Century world, the 21st Century
economy.
One impression I have gathered over the years, and really
over the past year since I have been Secretary of State, is
that there is this lag between becoming a democracy and seeing
the benefits of becoming a democracy. We had an election, isn't
this wonderful. We have a new president, and he is accountable,
she is accountable, and will be reelected every couple of
years, and we have a legislature. Good. When do the good times
start? When does the big PX open?
Senator Bennett. If I could interrupt you, I have a friend
who traveled in an Eastern European country after the Berlin
Wall came down, and noticed a particular slogan over and over
again painted on the walls, and he asked his guide, he being
not fluent in the language, what does that mean, and the guide
just kind of brushed him off, and he kept at it until finally
the guide said, well, that says you cannot eat freedom.
Secretary Powell. Exactly, and so freedom----
Senator Bennett. They were not that thrilled about
democracy.
Secretary Powell. They were not that thrilled about
democracy, because everybody said, especially you Americans, it
is going to be wonderful, but it is not wonderful if it does
not put food on my table or a roof over my head, or an
education for my children, and the longer the gap between the
beginning of a democratic tradition in the country and the
results, the bigger the problem you have, and the more fragile
the democracy is and will remain.
So our development programs, AID and everything else we do
in the Department, has to be focused on getting this group of
people ready to take advantage of the economic opportunities
and political opportunities that come from democracy. That
means infrastructure, education, teaching them how to use
computers and teaching them how to make better use of their
land for agricultural investments, new genetic seed and all
kinds of things, but speeding them up, speeding up their
development so that democracy does pay off,and if we do not do
that, we are in trouble.
We had a conference at the Department yesterday, to show
you how we are hitting this every way we can. We took advantage
of the Sub-Saharan African nations being in town to have a
conference on sovereign credit ratings, and I had to speak at
it. I first had to ask my staff what does that mean, sovereign
credit ratings, and it was very simple: teaching these
countries how to apply for a credit rating in Moody's Rating,
so that somebody will invest in these countries and start to
put in place private investments on some secure credit basis so
that they can start to generate economic activities in these
countries.
So it is our aid programs. It is such things as teaching
countries how to get a credit rating so somebody will invest in
their country, because if you have an aid program that teaches
youngsters skills, you had better have the investment to create
a place where these skills can be applied. We have to look at
this in a far more comprehensive way than we have in the past.
Lecture them on democracy, teach them about market economics,
use our AID programs to invest in the infrastructure to bring a
new generation of young people up so that they can take
advantage of economic openness in the global marketplace and
then at the same time making sure that we teach these countries
about the need for transparency and openness in their systems,
so that they can get a credit rating so that someone will
invest in their country.
There is nothing worse than having democracy and people you
have educated, and no economic opportunity for them. They will
soon fall out of love with democracy.
Senator Bennett. Thank you, Mr. Chairman. I see my time is
up.
Senator Leahy. I do not think you are going to find anybody
who is going to disagree with you on that statement, along with
a democracy is some hope for the future, build up a middle
class, let people have a stake in stability, is what you really
need.
Senator Specter.
MIDDLE EAST
Senator Specter. Thank you, Mr. Chairman.
Mr. Secretary, thank you for going to the Mideast. You took
on mission impossible, and I think you made some progress.
Secretary Powell. Thank you, sir.
Senator Specter. On the issue of Jenin, with the widespread
claims that there was a massacre there, I know that factually
there has been a determination that there are no mass graves. I
know you have your Assistant Secretary Burns on the scene, who
has been there. Are you in a position to confirm that in fact
there was not a massacre at Jenin?
Secretary Powell. As I mentioned to the committee earlier,
Assistant Secretary Burns was there last Friday for 3\1/2\
hours. He saw no evidence of a mass grave. He saw no huge cache
of bodies.
Clearly, people died in Jenin, people who were terrorists
died in Jenin, and in the prosecution of that battle innocent
lives may well have been lost, but I do not know the right
answer. I do not know the real answer. Neither did Assistant
Secretary Burns. He just had 3\1/2\ hours of looking at it.
That is why we thought it was important to get an independent
fact-finding group in there, and that is the resolution that we
supported in the United Nations last Friday, and the Israeli
Government also supported that resolution.
There has been some controversy in the last 24 hours about
the terms of reference of the fact-finding group and the
membership of the fact-finding group.
Senator Specter. I do not want to put you off, but I have
to get to a number of questions in just 7 minutes.
Secretary Powell. I just wanted to make the point that I
have talked to Prime Minister Sharon about it. He is sending a
team over to talk to Kofi Annan so that we can put this fact-
finding group in the right frame of mind to do their work.
Senator Specter. I was here at the outset of your
testimony, but had to leave for other committee assignments.
What you are, in effect, saying is that there are no mass
graves. There are people killed.
Secretary Powell. I am saying that I have seen no evidence
of such a mass grave. Since I am not there, and I have not
conducted an investigation, I cannot tell you what might be
there, but right now, I have seen no evidence of mass graves,
and I have seen no evidence that would suggest a massacre took
place.
Senator Specter. Well, I think that is an important
statement to make, no evidence of a massacre. I think that is
an important statement to have out at this time.
Mr. Secretary, thank you for hosting us at breakfast
yesterday. I want to raise just for a moment the issue of
Egypt's cooperation. There is a sentiment growing in the
Congress of concern about our approximately $2 billion a year
to Egypt for more than 2 decades, approximating now $50
billion. President Mubarak was in the Foreign Relations room a
few weeks ago, was asked a lot of hard questions, and frankly
did not give good answers.
One of the issues was that one of the leading Cairo
newspapers had written that the United States had dropped food
in Afghanistan designed to injure, to sicken, and to hurt the
people there. Now, if that happened in the United States, we
know about freedom of the press. When it happens in Egypt on a
newspaper reputedly closely controlled by the government, that
is a real question.
It has been a very, very cool peace with Israel, and I know
that Egypt has not severed diplomatic relations with Israel,
which is all to the good. We know the tremendous pressures that
President Mubarak is under with Muslim fundamentalism and the
assassination of his predecessor, Anwar Sadat, however I think
there ought to be a little notification here that we expect a
little more from Egypt on assisting United States goals.
Secretary Powell. I have been disturbed with some of the
statements that have been made in the Egyptian press from time
to time, and particularly some characterizations of me. I have
taken this up directly with the Egyptian authorities, and
directly with President Mubarak. I think they should not have a
government-controlled press, and I believe in freedom of the
press, but when press is under some government control, and
that freedom is abused with the most scurrilous kinds of
falsehoods, not for the purpose of informing but for the
purpose of inciting, then we should call it to the attention of
the Egyptian Government, and we do.
At the same time, I think that the investment we have made
in Egypt over these many years has served the intended purpose
of achieving a peace agreement between Egypt and Israel, one
that has held. Egypt has been a great friend and supporter of
the United States over the years, and even in this time of
difficulty over the last several weeks, when there was enormous
pressure on Egypt to take action against Israel, it did not,
with respect to breaking relations and things of that nature.
They have been very supportive and cooperative of my efforts.
Senator Specter. Well, I just think they ought to know that
the natives are restless.
Secretary Powell. I thank you for that, and I will
communicate it.
ANTI-NARCOTICS EFFORTS IN THE WESTERN HEMISPHERE
Senator Specter. On the subject of $731 million for the
Andean counterdrug initiative, this is something that we have
all been working on for a long, long time, and from what I have
seen, when there are changes in crops in Colombia, they move to
Bolivia or to Peru. We brought out the military, and we have
never had any real success in cutting back on the importation
of drugs.
My thought has been that we ought to be upping the
proportion--now it is about two-thirds on so-called supply,
one-third on so-called demand, about 63-37 percent--and that we
could do more with those dollars on education and
rehabilitation. That comes in the context of an effort to
utilize Cuba's willingness to have us cooperate with them on
their air lanes and their sea lanes.
I have introduced a couple of amendments which have come
through this subcommittee, and they have been either eliminated
or watered down very much in the House of Representative
because of the very strong anti-Castro political sentiment
there. Without getting involved in that embroglio, it seems to
me that when President Castro makes an offer, and he did it
directly to a group that I was with, that we can use their sea
lanes and their air lanes to interdict drugs, we ought to be
taking him up on it.
Secretary Powell. Senator Specter, on the demand side I
could not agree with you more on the problem, educating
youngsters in America and not-so-youngsters in America to stop
using drugs, and to recognize the destructive nature of this
habit both for their own lives and for our society, and the
destructive effect it has on other societies, Colombian society
and others.
The Andean initiative was designed to be a comprehensive
solution, not just in Colombia but in the other nations as
well, so that we did not just push the problem from one jungle
to another jungle.
With respect to the Cuban offer, I frankly have not
examined it, and I have not studied your amendment, I regret to
say, and I will be glad to take a look at it. But as you know,
Castro seldom just hands you something that you want to pick up
at first glance.
MIDDLE EAST
Senator Specter. Mr. Chairman, I have one more question, if
I might.
Senator Leahy. Go ahead, because--I want to get a chance to
ask questions before I go vote, but go ahead.
Senator Specter. Mr. Secretary, the issue of the
international conference appears to be the best alternative
around at the moment, and picking up again on something we
discussed at breakfast yesterday, it would be my hope that your
leadership and the President's leadership would bring some of
the so-called moderate Arab States to the conference table,
such as King Abdullah of Jordan, King Mohammed of Morocco,
Crown Prince Abdullah of Saudi Arabia, and President Mubarak
who is always a force. Although we have had grave, grave
difficulties in dealing with Chairman Arafat and there is so
much distrust because of the evidence that he has personally
participated in paying off terrorists in the Iranian arms
shipment, it may be that he will have to be at a conference.
However, whatever he signs will be in disappearing ink, and
what we ought to do with our very best efforts, it seems to me,
is to try to get those other parties to be participants,
signators, and perhaps guarantors, so that what is agreed to
will be carried out.
Secretary Powell. The President has not yet decided on a
conference as I mentioned to you yesterday morning, but we are
certainly looking at it, and there seems to be a great deal of
interest in the international community and among the parties
for such a conference at a regional or international level.
In our preliminary thinking about such a conference, if one
was held, the same point occurred to us, that the Arabs have to
play a more aggressive role than they might have otherwise, and
not only for the reasons you mentioned, but to push forward and
to put substance behind the declaration that came out of the
Arab summit calling for an agreement between Israel and all the
Arab States that would normalize relations and recognize
Israel's right to exist, and no longer be threatened by any
Arab State.
So if they believe that, and they want to begin negotiating
on that basis, then they pick up added responsibility for
Palestinian action and the action of any Palestinian leader in
the achievement of that vision.
Senator Specter. Thank you very much, Mr. Secretary, and
thank you for the very good job you are doing.
Secretary Powell. Thank you, Senator.
Senator Leahy. Mr. Secretary, we were talking about Cuba
earlier. I happen to agree with those who say that we should be
working with Cuba on drug interdiction. Some of the countries
to which we provide counter-narcotics assistance have worse
records on a range of issues.
COLOMBIA
But let us talk about Colombia. I am not quite sure I
understand the goals. I know we have spent about $2 billion on
a counter-narcotics program in Colombia. I want to know what
our objectives are, as they seem to be constantly changing.
Is it to defeat the FARC, and certainly they are committing
terrible atrocities. Or is it to defeat the paramilitaries who
have been involved in some of the most egregious human rights
violations and are rarely called to task for it? Or is it to
stop cocaine coming to the United States?
I mean, what is our final objective, and how do we measure
success, especially in light of the fact that the Colombians
have not lived up to the commitments that they previously made.
Secretary Powell. I think our objective is to support
Colombian democracy by helping Colombia deal with the threats
to that democracy. The threat comes in several forms: First,
the FARC and the ELN, terrorist organizations that we have so
designated. Second, the growing of drug crops that contaminate
the society, leads to a criminal culture and class, thereby
threatening their democracy, and hurts America by providing
drugs to drug users in our country.
So I think that we have an obligation to help Colombia
preserve its democracy by going after narcotraffickers and
helping Colombia go after those insurgent organizations that
threaten the viability of Colombian democracy and supporting
the Colombian Government, especially since President Pastrana
decided that he could not continue with this effort at
negotiating with these terrorist organizations.
Senator Leahy. I have enormous respect for President
Pastrana, and he is very well represented here in Washington by
his very able Ambassador, but I also agree with our very able
Secretary of State, who says in his prepared statement here
this morning, no amount of additional assistance would be
sufficient to turn the tide unless Colombia dedicates more of
its own resources to this task, and commits decisively to a
policy of establishing State authority and effective security
for its people.
The Colombians have not met their financial commitments
under Plan Colombia. There is about to be a presidential
election. We do not know who is going to be president, although
we may have an idea. We do not know what additional resources,
if any, they are going to commit to these efforts. Why should
we be pouring more money down there if we have goals that tend
to be shifted almost arbitrarily, and without knowing if the
Colombians are ever going to do their part?
We have talked about the need for money for AIDS and for
infectious diseases. There will be other requests, I
understand, such as additional money for Israel. Despite these,
and other pressures on an already underfunded foreign aid
budget, we seem to constantly need more and more money for
Colombia with little results. Would it be better to wait until
after the elections in Colombia?
Secretary Powell. No, I think we should not wait until
after the election. I can assure you, though, that after the
election we will be pressing the new leadership to make a more
serious commitment of financial resources of the Colombian
people and resources to this effort, and I cannot predict who
the new president will be, but just watching the campaigns
develop, it seems to me that we are probably going to have more
aggressive leadership in power in Colombia that might be more
receptive to the view you expressed and the view we will be
expressing.
KIDNAPPED CHILDREN OVERSEAS
Senator Leahy. Mr. Secretary, there is something I would
hope somebody could check into. The daughter of some
constituents of mine, Liz Henry, has been trying for 2 years to
locate her two children. They were abducted by her former
husband who is of Lebanese descent. She pursued a custody case
in the Lebanese courts and she won. However, the Lebanese
Government will not enforce the court order. It appears her ex-
husband has left Lebanan and is now in Syria. I am told that
Ambassador Burns has raised her case with the Syrian President
and nothing has happened.
I mention this because, if there are representatives of the
Lebanese Government here, I do not want them to think we have
forgotten this case, nor will I forget it as we look at the
budget for fiscal year 2003. I commend Ambassador Burns for
raising this. When you are talking to him, please tell him I
appreciate it, and I hope he will continue to push this issue.
Secretary Powell. I will, Mr. Chairman.
LANDMINES
Senator Leahy. My last thing--and somebody check whether
Senator McConnell is coming back--this concerns an issue that I
cannot let an appearance like this go by without raising.
You have been a voice of reason on the issue of land mines,
and I say that because as Secretary of State you see the
enormous problems we face in getting our aid to areas because
of land mines, but also as a well-decorated military person,
one who served in combat and served as Chairman of the Joint
Chiefs of Staff. You also have a view of it from the view of a
soldier.
I am concerned that we are losing momentum on this. There
has been some poor communication in the Pentagon. There are
people in the Pentagon at very high levels who tell me
privately we have got to solve this. Others, though, have stood
in the way. Former General George Joulwan has been a strong and
helpful voice. There is lingering resentment over the way the
United States was treated in the Ottawa process. Some of that
resentment is valid. But I was there throughout most of that
process, and some of it we brought on ourselves.
Now, I know the administration is not about to join the
Ottawa treaty. It would have been a wonderful thing had we done
that initially. But we are the world's unmatched military
power. We are actually the most powerful Nation history has
ever known, and we can set the standard for the world.
We are talking about eliminating a very small class of
weapons. We are not talking about eliminating command-detonated
mines, or mines with a man in the loop, or cluster munitions.
We are only talking about mines that are designed to be
triggered by the victim, and we have far more precise weapons
that discriminate between enemy combatants and friendly forces
or innocent civilians.
If we did this, I think we would reap both military as well
as political benefits. If it is left just to the bureaucracy,
nothing is going to change. I mean, it is the same bureaucracy
that told General Pershing 80 years ago we cannot give up
poison gas as a weapon.
It is going to take people like yourself and Secretary
Rumsfeld. I hope you will help on that, I really do. I think
that we do so much with the Leahy War Victims Fund and our
demining efforts, and we spend hundreds of millions of dollars,
but I think we should get rid of the victim-detonated mines.
Do you want to comment?
Secretary Powell. No. You know, Mr. Chairman, of my
commitment to our demining efforts.
Senator Leahy. I do.
Secretary Powell. I am not sure of the status of Pentagon
developments and programs, but I believe that the Pentagon
remains committed to finding solutions to the problem they
would have if a gap were created in that capability, and I do
not know what the status of the programs are, but I certainly
will encourage Don Rumsfeld and my former colleagues in the
military to keep pressing and not abandon efforts to find such
solutions.
As you will recall, it was really a couple of unique
circumstances related to Korea that convinced the military and
convinced me when I was Chairman of the Joint Chiefs of Staff
that we could not go along with Ottawa at this time.
Senator Leahy. I know. But I think there are ways of
solving the Korea situation, without going into a long
discussion of that. I think we could do it, I think we would
have significant moral authority worldwide, and especially for
those few remaining countries that are not abandoning these
types of mines, who use the excuse that the world's most
powerful Nation will not so why should we. I do not want to
give them that excuse.
I know you are about to leave, or are soon to leave, and I
think Senator McConnell is coming back. Mr. Secretary, if you
could hang on for just a moment, because there is a roll call
vote on and that is what is causing the problem.
ANGOLA
On Angola, today I see a country where there is a real
possibility for peace, but you have about $1 billion in oil
revenues that are stolen by the government. We need to join
others like Great Britain, the World Bank, and IMF, in
insisting that governments publicly disclose their revenues
from oil and gas, mining, and other extractive industries. If
this information is disclosed, it will be much harder for
government officials to steal their country's natural
resources. I will now turn to my good friend, the senior
Senator from Kentucky.
Again, Mr. Secretary, I appreciate your being here. I
appreciate the briefing yesterday, but more importantly, just
as an American, I appreciate the job you are doing.
Secretary Powell. Thank you, Mr. Chairman.
EFFECTIVENESS OF FOREIGN AID
Senator McConnell. Thank you again, Mr. Secretary. A couple
of wrap-up questions in no particular order, and thank you
again for being here.
I thought one of the most interesting questions of the
morning was Senator Bennett's question about whether there was
a return on our foreign aid investments, something I am
intensely interested in. I appreciated the President's
stipulations attached to the $5 billion increase through the
Millennium Challenge Account that all seem to me tended to be
targeted to rewarding movement.
Congress from time to time--no matter who is in the
executive branch--wants to make contingent assistance based on
certain behavior. Certainly, I would hope you would agree that
foreign aid is not an entitlement, and certain kinds of
behavior it seems to me ought to legitimately jeopardize
American foreign assistance.
And we understand the carrot part. That was the answer to
Senator Bennett's question, which I wholly agree with, but what
about the stick? What about some price to be paid in terms of
economic assistance when your behavior seems to warrant that?
Secretary Powell. I agree entirely. I mean, if you fall off
the wagon, if you start to act in ways that are inconsistent
with the philosophy under which you received the money in
Challenge funding or in any other kind of foreign aid, then I
certainly agree that it should not continue, or there might be
other consequences of such action.
At the same time, I would ask the Congress to think
carefully before putting too many things in legislation as
requirements,certifications, waivers required, and similar
items that make it harder for the President and the Secretary
of State to conduct foreign policy, and I would always welcome
the opportunity to discuss with Members of Congress what they
have in mind before they put it in law.
EGYPT
Senator McConnell. It has been my experience that the
granting of waivers tends to be more popular when members of
your own party are in the administration.
Senator Specter brought up Egypt, and I want to go back to
that just for a moment. I was among those getting very
skeptical about Egypt's level of cooperation well before
September 11. A couple of years ago when my party was in the
majority and I actually chaired the subcommittee, I made some
dramatic reductions in United States assistance for Egypt in
the chairman's mark. That lasted about half a day before it was
reversed, but the point I was making then, and I think we are
all contemplating these days, is the question of what are we
getting for our money?
Now, I am not going to advocate anything dramatic. I
understand how sensitive that situation is, and I have complete
confidence, frankly, in you and your ability to manage this.
But I am wondering if it has ever occurred to you that maybe
the aid ought to be reconfigured in some way.
A substantial part of it is military in nature, and having
been an Egypt-watcher for some time I have not seen a whole lot
of progress on the reform side in terms of moving ahead with a
structure that allows people to lift themselves out of poverty.
Do you think this current configuration of assistance, which
has been largely unchanged since 1980, is adequate, or would
you be open to considering a different way of looking at this
package?
Secretary Powell. I think it is adequate for the moment. I
think in this period of tension we could certainly begin
exploring with the Egyptians whether this is the right thing
and the right balance for the future, but I do not think I
would entertain changing it right now.
RUSSIA
Senator McConnell. Finally, let me go for the last question
to our new relationship with the Russians, which all of us
welcome, and I want to commend you for your role in that. I
think this is a very positive development.
You were discussing earlier the gap between the
establishment of a democracy and seeing some progress, and
Russia is a classic example of that. They went out and started
having elections, everybody looked around, and nothing was
getting any better, but hopefully after a decade or so there
are some improvements, and certainly our relationship has
gotten dramatically better.
Do the NATO-Russia Council give Russia a veto over NATO
decisions and, if it does not, what is the practical effect of
the Russian NATO Council?
Secretary Powell. No, it gives Russia no veto over anything
NATO wants to do without Russia, and it gives NATO no veto over
anything Russia wants to do without NATO.
Senator McConnell. So what is it?
Secretary Powell. It is a means by which we look at things
that we have a common interest in working on together,
terrorism and a number of other areas that have been suggested
for cooperation which the Russians have found quite promising.
We will decide at 19, without Russia, whether or not we wish to
engage Russia on a particular item, and then the NATO-Russia
Council meets and discusses it, and determines how 20 can go
forward.
If, in the process of going forward at 20, NATO finds that
new circumstances or new requirements being placed on the 20 by
Russia make it not appropriate to continue to go forward at 20,
NATO will have the ability and the right to pull it back to 19.
So it is a means by which we can cooperate more closely with
Russia on a variety of issues of common interest to both NATO
and Russia and other parts of Europe, and brings Russia closer
to the Euro-Atlantic family, but at the same time does not
destroy the essence of NATO as a unique organization that did
not include Russia but cooperates with Russia at 20.
Senator McConnell. One final thing. How many countries are
likely to be included in the next round of expansion?
Secretary Powell. Ah, Senator, nice try.
I cannot believe you did that to me.
The President, of course, has this under serious
consideration. We talk about it almost every week now, and I
think it is going to be a very healthy number. I cannot tell
you what that number will be, and I do not even want to suggest
a range.
If I could close the answer, though, by saying it has been
a marvelous evolution to watch since the days when I was
Chairman of the Joint Chiefs of Staff and the cold war ended
and the Warsaw Pact went away. I used to come up and testify
before the Senate on whither NATO, why do we need a NATO, why
doesn't it go away, and all of my Russian general friends would
come to see me and say, you know, why do you continue the cold
war by keeping NATO around, you should get rid of it, it is a
relic of the cold war. We had to defend NATO for years.
Then finally the answer became obvious, everyone wants to
join the club. It must be doing something right, and I just
respond to my still Russian General friends, nobody wanted to
be in your club anymore, so the club closed, but we are handing
out application forms all over the place. People are filling
them out left and right. Why? Because they want to be part of a
political and security organization that is anchored in its
relationship with North America, with the United States and
Russia.
Senator McConnell. And it has discovered some new missions,
too, has it not?
Secretary Powell. Right, and it is taking on new missions,
and so NATO is what gives you Canada and the United States, and
that is important to them. The E.U. does not do that. No other
organization does that, and they find comfort in being in such
a partnership.
And if I may, Senator, because we got going early, and when
I mentioned North America and NATO I really did want to linger
on Canada as well as the United States. Canada is such a great
partner with the NATO alliance, and as the Senator, Chairman
Leahy was kind enough to note earlier, and we have a lot to
thank Canada for.
They have always been there with us, and I, too, as all
Americans, mourn the loss last week of those brave Canadian
soldiers. I have not had in my career as an Army officer, as
National Security Advisor, and now as Secretary of State,
better friends and allies and trading partners than we have
with our Canadian brothers and sisters to the north.
Senator McConnell. Well, thank you very much, Mr.
Secretary, for the wonderful job you are doing and for being
here today.
Secretary Powell. Thank you, sir.
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 of State for response
subsequent to the hearing:]
Questions Submitted by Senator Patrick J. Leahy
international criminal court
Question. This month the Rome Treaty establishing the International
Criminal Court came into force. Despite the fact that close allies,
like Britain and Canada, with thousands of troops deployed overseas,
support the ICC, we hear that the Administration is considering
``unsigning'' the Treaty. Isn't a better strategy to stay engaged with
the Court, to give our negotiators the most leverage to shape it in our
interests? What benefits do we get by unsigning it now--giving all of
our leverage away up front?
Answer. On May 6, the United States notified the U.N. Secretary
General in his capacity as depositary for the Rome Statute of the
International Criminal Court (ICC) that the United States does not
intend to become a party to the statute (which comes into force July 1,
2002). We took this step in order to make clear our objections to the
Rome Statute in both principle and philosophy, and to avoid creating
unwarranted expectations of U.S. involvement in the Court.
The existence of a functioning ICC will not cause the United States
to retreat from its leadership role in the promotion of international
justice and the rule of law. We will work together with countries to
avoid any disruptions caused by the treaty, particularly those
complications in U.S. military cooperation with friends and allies that
are party to the treaty. We will also continue our longstanding role as
an advocate for the principle that there must be accountability for war
crimes and other serious violations of international humanitarian law.
millennium fund
Question. I support the President's ``Millennium Fund'' to increase
development aid by $10 billion from 2004 to 2006, and to tie the aid to
good governance, sound economic policies, and combating poverty.
However, a few months ago we gave $600 million to Pakistan, one of the
world's most corrupt countries, with no strings attached.
In the supplemental request, the Administration did not place any
conditions on its request for some of the most autocratic and
economically backward regimes in the world. Is this just because these
governments support the war on terrorism? How is this different from
the cold war, when we gave billions of dollars to corrupt governments
because they were anti-communist?
It seems like we are heading for a double standard--the Millennium
Fund would put tough conditions on development aid, but no conditions
on military aid. Do corruption and the rule of law only matter for some
of the taxpayers' money? Why shouldn't the same standards apply?
Answer. Economic Support Funds are provided in recognition that,
under special economic, political or security conditions, the U.S.
national interest may require economic support for countries in amounts
and for purposes that could not be justified solely under rather
exacting Development Assistance authorities. We anticipate that the
Millennium Challenge Account will have even higher standards with
regard to a county's demonstrated commitment to development and
sustained performance.
Economic Support Funds are intended to promote economic and
political stability and, to the extent feasible, are to be used for
program purposes consistent with the authorities of other accounts in
the Foreign Assistance Act, e.g., Development Assistance and
International Disaster Assistance. In Pakistan, for example, while the
dollars provided were in support of a severe balance-of-payments
problem, the government committed to direct a commensurate amount of
local currency to meet budget gaps in important social sector programs
specifically for basic education, health and job creation.
Even with the Millennium Challenge Account, the United States will
continue to have a need for ESF that permits the Administration to
address urgent national security interests in the most expeditious and
efficient manner.
foreign aid funding--millennium fund
Question. The details of the Millennium Fund are still unclear,
aside from some broad principles which you mention in your testimony.
One of the problems with the President's plan is that the increases
in foreign aid do not start until 2004--despite the fact that the
problems it seeks to address are getting worse each day.
Last month, I asked Secretary O'Neill if we could do more this
year, and he said: ``I think it's in fact an excellent question and I
think that one should not rule out the possibility of looking at a
beginning of this idea in the fiscal year 2003.''
Is the Administration considering a budget amendment in fiscal year
2003 to get the Millennium Fund started sooner? Why not?
Answer. We agree that it may be advisable to begin some limited
Millennium Account activities, perhaps pilot projects, before fiscal
year 2004. This subject is under discussion by the Steering Group, and
they will most certainly consult with the Congress on this matter as
discussions move forward.
colombia--human rights
Question. There is a rumor that you are close to certifying that
the Colombian Government and Armed Forces have met the human rights
conditions in our law.
I am a strong supporter of President Pastrana and of Colombia, and
the FARC has been committing kidnappings and atrocities every week.
There are other serious human rights problems there too, especially
with the paramilitaries. A few months ago, the Administration said the
Colombian Government had not made enough progress on human rights. I
agree. What has happened in the past month to justify making the
certification now?
If you make the certification--and I hope you do not until there is
more progress--that would permit the release of 60 percent of the aid.
There is another certification that would need to be made after June
1st, for release of the rest of the funds.
What further, specific progress on human rights would you expect
the Colombian military to make for a second certification? We need
clear benchmarks, to measure progress, or else we won't see it.
Answer. I have not yet made a decision regarding the certification
required under section 567(a) of the Kenneth M. Ludden Foreign
Operations, Export Financing, and Related Programs Appropriations Act,
2002 (Public Law 107-115) (FOAA). The Department of State is currently
reviewing information it has received from the Government of Colombia,
Colombia's Armed Forces, the Inspector General's Office (Procuraduria),
the Prosecutor General's Office (Fiscalia), the Vice President's Office
and a wide range of international and Colombian non-governmental
organizations active on human rights issues.
Human rights remain central to our bilateral relations with
Colombia. We will continue to engage the Government of Colombia on
concrete measures it should take to improve its human rights
performance, particularly the human rights record of the Colombian
Armed Forces.
colombia
Question. What are our objectives in Colombia, what would it take
to achieve them, over what period of time, and how much would it cost
us and the Colombians?
Is the goal to defeat the FARC? To defeat the paramilitaries? To
stop the cocaine coming to the United States?
Does it make sense to spend more money, on top of the $2 billion we
have already appropriated, before we know who the next Colombian
President is and what his policies are?
In your prepared testimony you say, and I quote:
``no amount of additional assistance will be sufficient to turn the
tide unless Colombia dedicates more of its own resources to this task
and commits decisively to a policy of establishing state authority and
effective security for its people.''
I agree. Given that the Colombians have not met their financial
commitments under Plan Colombia, what should we expect to see before we
send more aid?
Answer. The United States. remains committed to helping Colombia--
the hemisphere's second oldest democracy--combat narcotrafficking and
terrorism, defend and strengthen its democratic institutions, advance
human rights, provide humanitarian assistance for those displaced by
the conflict, and promote socio-economic development, but Colombians
must take the lead in this struggle. In 1999, President Pastrana
responded to the crisis undermining Colombia's democracy, prosperity
and security with the launch of the six-year, $7.5 billion Plan
Colombia. Plan Colombia calls for substantial Colombian social
investment, judicial, political and economic reforms, modernization of
the Colombian Armed Forces, and renewed efforts to combat
narcotrafficking. To aid Colombia, in 2000, the U.S. Government
provided $1.3 billion in assistance to the Government of Colombia's
Plan Colombia in support of these goals. In 2001, Congress appropriated
$381.86 million to sustain our Plan Colombia programs.
The Government of Colombia reports it is well on its way to funding
its commitment under Plan Colombia having spent $2.6 billion for Plan
Colombia-related infrastructure projects, including a hospital in
Puerto Guzman, a school in Orito and a farm to market road in Mocoa, as
well as projects regarding human rights, humanitarian assistance, local
governance, and the environment. Colombia has also reported that it has
spent $426 million on social services and institutional development,
including family subsidies and programs for job creation and youth
training.
The Government of Colombia's contribution to Plan Colombia is being
used for counterdrug efforts and social and economic development
projects. These projects include social and infrastructure programs in
Putumayo Department, in southern Colombia, the site of the heaviest
concentration of coca growth. Colombia has also continued to modernize
its armed forces; stabilized its economy in accordance with IMF
guidelines; and undertaken an aerial eradication program resulting in
the destruction of unprecedented amounts of coca.
President Pastrana has also announced plans to increase Colombia's
defense budget, currently at 3.5 percent of GDP, to cover the cost of
heightened military operations, and to add 10,000 soldiers to the army.
We have stressed in our meetings with senior Colombian Government
officials that Colombia needs to increase the resources it devotes to
security, and have also begun a dialogue with the leading presidential
candidates on this issue.
The Administration is now seeking new legal authorities that would
allow United States assistance to Colombia, including assistance
previously provided for counternarcotics, to be used to support a
unified campaign against narcotics trafficking, terrorist activities
and other threats to national security. The decision to seek new
authorities reflects our recognition that: (1) Colombia's terrorist
groups are involved in every facet of the illicit narcotics trade; (2)
the terrorist groups' efforts to promote insecurity hamper our
counternarcotics operations; and (3) the GOC faces a heightened
terrorist risk after the end of the demilitarized zone on February 20.
In addition to new legal authorities, we are also seeking $35
million in the counterterrorism supplemental to help the Colombian
Government protect its citizens from kidnapping, infrastructure attacks
and other terrorist actions. Our $35 million request is broken down as
follows:
--$25 million in Non-proliferation, Anti-terrorism, Demining and
Related Programs (NADR) funding for antikidnapping training and
equipment for the Colombian police and military;
--$6 million in Foreign Military Funds (FMF) funding to begin
training for Colombian military units protecting the key Cano
Limon oil pipeline; and
--$4 million in International Narcotics Control Law Enforcement
(INCLE) funding to help organize, train, equip and deploy
Colombian National Police units that will provide security in
conjunction with construction of reinforced police stations to
enable the police to reestablish a presence throughout
Colombia.
Leading presidential candidates in Colombia also advocate
continued, vigorous counter-narcotics efforts and improving Colombia's
human rights climate. All have backed President Pastrana's request that
equipment provided by the United States for counter-narcotics efforts
be used for counter-terrorism as well.
We have already engaged the leading presidential candidates on
these issues, and will hold more intensive talks with the president-
elect after Colombia's elections.
middle east--current
You have testified that you were not aware of any instance when the
Leahy law, which bars U.S. aid to foreign security forces who abuse
human rights, was violated in the Middle East conflict.
I recently received a letter signed by Assistant Secretary Paul
Kelly, responding to an inquiry on this subject which I had sent to
Ambassador Kurtzer back in January. Mr. Kelly's letter quoted the State
Department's Human Rights report, that ``numerous serious human rights
abuses'' were perpetrated by Israeli security forces during the past
year.
Question. Are you confident that no U.S. weapons were used in any
of those abuses? We also trained Palestinian police officers. Do you
know if any of those officers were involved in human rights violations?
The Red Cross and World Bank estimate damage in the West Bank to be in
the billions of dollars. Much of the damage was to infrastructure built
with foreign aid, mostly from the United States. Is it likely that U.S.
taxpayers, either directly, or through the United Nations and the World
Bank, will also end up paying a large share of the costs of rebuilding?
Answer. The Department cannot state with confidence that no U.S.-
origin weaponry was used in human rights abuses that may have been
perpetrated by the Israeli Defense Forces or that no Palestinian police
officer trained by the United States committed human rights violations.
The Department is sensitive to the requirements of the Leahy Amendment,
which prohibits the provision of funds appropriated under the annual
foreign operations appropriations acts to any unit of a foreign
country's security forces if the Secretary has credible evidence that
such unit has committed gross violations of human rights. To this
point, although the possibility cannot be excluded that the credible
evidence referred to in the Amendment may be developed, such evidence
has not been produced. We currently are refining our procedures for
implementing that amendment, including with a view to improving our
ability to discern credible evidence of gross violations of human
rights by specific units of foreign security forces. Updated guidance
will be sent to posts worldwide.
We share the goal of the Leahy Amendment to hold foreign security
forces and governments accountable to international human rights
standards. Our goal is to carry out security and other foreign
assistance programs in a manner consistent with human rights standards.
We continue to monitor this situation and the obligations the Leahy
Amendment places on the parties and us.
The World Bank recently estimated raw physical damage in the West
Bank and Gaza at approximately $400 million over the 18 months of the
intifada, plus over $300 million in additional funds as a direct result
of the recent incursions. While some damage was suffered by donor
supported projects, most of the damage was centered on businesses,
houses, and roads. The international donor community has pledged to
assist in the rebuilding of damaged infrastructure and to respond to
the Palestinians, dire humanitarian needs. Consensus emerged at the
recent Ad Hoc Liaison donors' conference in Oslo, however, that
considerable attention should still be paid to the Palestinians,
longer-term development needs. To that end, the United States is
continuing with plans to undertake major water infrastructure projects
and other programs with a long-term developmental impact. We are also
continuing our projects in the areas of health, community development,
and rule of law.
middle east--settlements
Question. During your trip to the Middle East, you said ``for the
people and the leaders of Israel the question is whether the time has
come for a strong, vibrant state of Israel to look beyond the
destructive impact of settlements and occupation, both of which must
end.''
However, Prime Minister Sharon was recently quoted as saying that
``until the November 2003 elections, there will be no talk of
evacuating any settlements.'' I am told that there have been 34 new
settlements built since he took office.
Given Prime Minister Sharon's statements, how do we make progress
on this key issue?
Answer. The President and I have been very clear that settlement
activity in the occupied Territories must stop, and that occupation
must end through withdrawal to secure and recognized boundaries,
consistent with United Nations Resolutions 242 and 338. Israeli
settlement activity prejudges the outcome of a key final status issue.
We continue to monitor this issue, and address it directly with the
Government of Israel. As for the question of possible evacuation of
existing settlements, that is an issue that will have to be faced in
the context of a final status agreement.
afghanistan
Question. Humanitarian relief workers in Afghanistan, including
people who have years of experience working in crisis situations, have
expressed great concern about U.S. military personnel in civilian dress
who are involved in humanitarian relief activities. They say this
jeopardizes the safety of the humanitarian workers, because while the
soldiers are armed, the humanitarian workers are not. If that line is
blurred, it is the unarmed humanitarian worker, whether in Afghanistan
or in the next crisis, who will be at risk. Retired military officers
and defense officials have echoed their concerns.
I gather the Administration is trying to solve this problem,
although nothing I have heard sounds adequate. As a former Chairman of
the Joint Chiefs and now Secretary of State who oversees these aid
programs, can you help to ensure that U.S. field commanders and USAID
personnel in Afghanistan work with NGOs to resolve this?
Answer. Following concerns raised by the humanitarian community,
the Department of Defense reviewed the uniform policy for the U.S.
military personnel undertaking humanitarian relief activities. The
uniform policy was subsequently revised to be compliant with the Geneva
Convention. Military personnel are required to wear one article of
military clothing and openly display their weapons. This policy both
meets the force protection requirements of our forces and clearly makes
the soldiers easily identifiable.
USAID actively coordinates with the military personnel on the
selection and execution of humanitarian assistance programs in
Afghanistan.
angola
Question. In Angola today there is a real chance for peace. But it
is estimated that approximately $1 billion--perhaps a third of Angolan
state income--has disappeared annually for the past five years.
According to the IMF, whose relationship with Angola appears to have
broken down, approximately 90 percent of Angola's state revenue is
derived from oil. This is not unique to Angola. Corruption on this
scale is a cause of poverty, failed states that become havens for
terrorists, and then we and the World Bank end up sending aid to take
care of the people.
The same American oil companies that, according to SEC regulations,
have to report their tax and other payments to the U.S. Government from
oil pumped in the United States, do not have to report their payment to
the Angolan Government, or for that matter, any other oil-dependent
developing country, from oil pumped there. And then elites in these
governments steal the money. The impact in Angola alone is staggering,
where some 1 million people face starvation conditions and where,
according to UNICEF, hundreds of children die from preventable causes
daily. There is a clear need to develop the capacity for holding these
governments accountable for their expenditure of state resources and it
seems clear that to do this there needs to be transparency of revenue
streams. To that end, should not public disclosure of these types of
payments to governments be the norm everywhere, especially in countries
that want foreign aid? Will the State Department support such a
proposal at the G-8 meeting in Ottawa in June?
Answer. The United States strongly supports efforts to encourage
transparency and counter corruption in Angola. As part of this effort,
we have encouraged oil companies to be forthcoming with their data,
especially to the IMF. We also have made known to the oil companies
that we see value in their being as open as possible with their Angolan
data. Nonetheless, we also recognize that these firms are private and
that some of the information might be considered proprietary by the
company or subject to contractual agreements with the Angolan
Government.
The larger question you raise--whether public disclosure of revenue
streams from entities such as oil companies should be the norm
worldwide--is a complex one, involving legal, political and business
concerns. Again, in principle, this is a goal we support, but it is an
issue that must be examined in a detailed, interdisciplinary and inter-
agency manner. We are looking at this issue now, including in
conversations with officials from other key countries, but have yet to
reach any conclusions.
Question. Your supplemental request includes military and other aid
for Uzbekistan, which has an authoritarian, Soviet style government.
Recently, however, Uzbekistan signed an agreement with the United
States which includes a wide range of commitments to implement
democratic and economic reforms. Is there any reason why we should not
tie our aid to Uzbekistan on its progress in meeting its commitments
under that agreement?
Answer. United States assistance to Uzbekistan is designed to fight
the war on terrorism and address threats to Uzbekistan's stability such
as: drug trafficking, weapons proliferation, poverty, political
oppression, and isolation from the outside world. The assistance helps
Uzbekistan combat illicit trafficking of weapons and narcotics across
its borders and improve military interaction with United States and
Coalition forces.
The program also seeks to change the environment in which extremism
can flourish. The United States is providing assistance on the
grassroots level in Uzbekistan that will improve health care, promote
the development of small and medium enterprises, improve water
management, provide local social services, expand exchanges to the
United States, and support human rights, independent media, and civil
society.
We consistently tell Uzbek officials that our ability to continue
higher assistance levels depends on demonstrated progress in economic
and democratic reform, and we are closely monitoring Uzbekistan's
fulfillment of its commitments under all our bilateral agreements.
While some reforms are clear prerequisites for the disbursement of
funds, it would be counter-productive to condition assistance in
general on Uzbekistan's progress on meeting specific reform
commitments.
fiscal year 2003 budget request--peacekeeping
Question. At a time when peacekeeping seems to be increasing in
importance around the world--including a critical mission in
Afghanistan and calls for peacekeepers in the Middle East--why has the
President's budget request for this account been cut by almost $30
million from last year's level?
Answer. Fiscal year 2003 PKO levels reflect a different approach
since September 11. We have to address problems that are frequently the
genesis of extremism and this requires shifting resources. We are
requesting significant increases in development assistance and other
accounts to address these problems in a more fundamental way.
Additionally, increased stability in the Balkans and in Sierra Leone
yields reduced anticipated PKO requirements.
assistance for eastern europe
Question. U.S. assistance programs, coupled with a strong NATO
security presence, have been critical to promoting peace and prosperity
in the Balkans. The fiscal year 2003 budget request cuts the SEED
account by $126 million, which some believe is too deep. In your view,
what type of impact will this reduction in U.S. aid have? What about
cuts in peacekeeping operations in that region?
Answer. Since the fall of the Iron Curtain in 1989, the United
States has provided over $5 billion in assistance to the emerging
democracies of East and Central Europe. The 20 percent reduction--in
funding proposed for the SEED (Support for East European Democracy Act)
account (from $621 million in fiscal year 2002 to $495 in fiscal year
2003) is possible because of two things. The first is the success our
partners and we have had in creating stable, democratic, market
economies in the region. The second is the fact that all of these
countries are now in line for possible future membership in the
European Union. This means that a larger share of assistance to these
countries will come from Europe in the future.
In several countries of Southeastern Europe, a good deal of work
remains to be done. The $495 million requested for that purpose is a
clear indication that the United States will remain engaged in solving
the problems of the region.
fiscal year 2003 budget request--assistance for the former soviet union
Question. Programs funded by the FSA account have become critical
in advancing U.S. foreign policy goals--especially in light of the war
on terrorism and Islamic extremism in Central Asia. Why has the FSA
account been cut by almost $30 million in the President's budget
request?
Answer. We completely agree that the FSA account is critical to
advancing U.S. foreign policy goals, including our efforts to combat
terrorism and Islamic extremism in Central Asia. The President
requested $755 million for this account in fiscal year 2003, as
compared to the fiscal year 2002 appropriated level of $784 million.
However, approximately $35.5 million in non-proliferation
activities that are funded under the FSA in fiscal year 2002--parts of
the Export Control and Related Border Security (EXBS) Assistance and
Redirection of Biotechnical Scientists programs--have been proposed to
be funded from the Nonproliferation, Anti-terrorism, Demining and
Related Activities (NADR) account in fiscal year 2003.
For purposes of comparing the FSA account fiscal year 2002 and
fiscal year 2003 levels, therefore, one must reflect this proposed
allocation from the NADR account. On a strictly comparable basis, the
President's fiscal year 2003 request represents an increase over fiscal
year 2002 levels--from $748.5 million to $755 million.
Question. First the Clinton Administration decided to open the door
to the sale of F-16s to Chile. Now Brazil appears to be on the verge of
buying its own advanced fighter aircraft, with AMRAAM missiles. Are we
seeing the new arms race in South America that everyone wanted to
avoid? And none of those countries can afford?
Answer. Chile and Brazil are both mature and stable democracies.
They, like us, are entitled to review their own security needs in light
of available resources. Both governments underwent a long and extensive
process to decide on these military acquisitions. They are transparent
in their policies toward their neighbors and with the United States.
Since 1997 the U.S. Government has abided by our global policy of
not introducing Advanced Radar Beyond Visual Range (AR-BVR) missiles to
regions such as Latin America where they have not been previously
introduced.
If the countries of the region were to adopt a voluntary agreement
to restrain purchases of ARBVR missiles, we would be fully supportive
of their decision.
Question. There are reports that East Timor expects a budget
shortfall of at least $150 million over the next 3 years. At the donors
conference in may, is the Administration going to work to make sure
that most--if not all--of this shortfall is covered' by the
international community? The United States has invested a lot to help
get East Timor headed in the right direction. Why has the
Administration proposed nearly a 25 percent cut in aid to East Timor
for fiscal year 2003, when it only just elected its first president?
Answer. The United States Government is committed to aiding East
Timor in its reconstruction and development. U.S. bilateral assistance
from 1999 to the present already totals $179 million. Additionally, the
U.S.-assessed contributions for administrative and peacekeeping costs
for the U.N. Transitional Administration in East Timor (UNTAET) are
over $300 million.
At the East Timor Donors Conference in Dili May 14-15, the United
States delegation urged East Timor to exercise fiscal restraint and to
produce a responsible budget to minimize burdening itself with debt. We
are working with other international donors and the World Bank to
establish a fund to cover East Timor's expected budget deficit. The
expected revenue shortfall over the next 3 years has been revised
downward from $154-$184 million to $90 million. At the conference in
Dili we pledged to provide $4 million (almost 15 percent of the
anticipated deficit this year) to cover East Timor's revenue shortfall.
Other donors followed suit, and a total of $82 million was pledged
towards the anticipated deficit of $90 million.
The reduction in our request for aid to East Timor, from $25
million to $19 million, for fiscal year 2003 reflects a phased
reduction in spending on the coffee cooperative project as the Timorese
develop the capacity to assume overall management of the program. The
reductions in assistance for East Timor and elsewhere also reflect a
greater effort to identify funds for reconstruction and redevelopment
in Afghanistan.
Question. In your opening statement, you mention the positive
impact that free trade can have on economic development in poor
countries, especially Africa. However, Oxfam recently released a
report--in favor of free trade--that showed that developing countries
exporting goods to wealthy nations face tariff barriers that are four
times higher than those encountered by rich countries.
The Washington Post said this ``is embarrassing to the Bush
administration, which despite its free-market rhetoric has been
reluctant to challenge politically powerful U.S. industries such as
textiles that benefit from tariffs protecting their goods from low-cost
foreign competition?''
I know that trade in not your primary responsibility. However, are
Oxfam's findings accurate? What is the Administration doing to remove
unfair trade barriers on poor countries?
Answer. The Administration recognizes that developing countries'
full participation in the global trading system is essential to their
continued economic growth and development. As President Bush said in
Monterrey, ``to be serious about fighting poverty, we must be serious
about expanding trade.'' We are committed to pursuing further market
opening through implementation of the WTO agenda developed in Doha last
fall, and the passage of the TPA will help achieve this goal in a
number of sectors. It should also be noted that the United States'
tariffs and agricultural subsidies are already much lower than those of
most other countries both developed and developing.
On a bilateral and regional basis, we have given full support to
several congressionally mandated programs, that offer less developed
regions enhanced access to the U.S. market--the Africa Growth and
Opportunity Act (AGOA), Caribbean Basin Initiative (CBI), and the
Andean Trade Preferences Act (ATPA) to name a few.
Developing countries often have difficulty making full use of the
enhanced market access opportunities available, as they lack the
capacity to exploit them. Therefore, in support of the U.S. Market
access initiatives noted before, and other trade related programs, we
are also committed to offering less developed countries technical
assistance and capacity building project support so that these
countries can fully engage in and benefit from the global, multilateral
trading system. According to a survey conducted by USAID last year, the
United States provided $1.3 billion in trade capacity building
technical assistance to developing countries between 1999 and 2001.
Regarding the Oxfam report's criticism of developed country
barriers to imports of poor countries, we strongly believe that the way
to bring down those barriers is through WTO negotiations launched last
November at Doha. Many of the measures called for in the report--
reduction in farm subsidies, the elimination of tariff peaks, the
elimination of duties and quotas on products from the least developed
countries--are in fact on the table as part of the Doha Development
Agenda negotiations.
Question. After September 11, we appropriated $600 million in
budget support for Pakistan, with the expectation that those funds
would be used to improve health and education. At the time, many of us
expressed concern about corruption in Pakistan, and how these funds
would be monitored.
In the supplemental, we are asking for another $145 million for
Pakistan, for military aid, law enforcement, and economic development.
What has been done with the $600 million? Who is keeping track of
it to be sure it is used for what we intended.
Answer. A letter of agreement between the United States and
Pakistan on use and monitoring of the $600 million was signed in
November 2001. It was agreed that the equivalent in local currency
would be used for social sector programs in education, health and rural
employment. Our Embassy and USAID have been in regular contact with
Pakistani officials and the donor community on the use of these funds.
The Ministry of Finance recently submitted a detailed report that
summaries the considerable work done by the GOP thus far to administer
the grant. From the report and subsequent discussions, it is evident
that the GOP has made available almost the entire grant to officials
responsible for implementing the programs and has in place a system for
monitoring. The IMF and the World Bank report that the money is getting
out to the local areas for which it is intended. The United States and
other donors continue to work closely with the GOP to ensure that the
funds actually reach the local level through the newly devolved
political and administrative authorities. We have no reports of the
funds being channeled into unacceptable programs or misused by any of
the recipients, but we are monitoring the situation closely.
education
Question. Since September 11th, one thing Republicans and Democrats
seem to agree on is that we should be spending a lot more to support
secular education for children in countries with significant Muslim
populations. Why was that not included in your supplemental request,
since it is not part of your fiscal year 2003 budget?
Answer. Increasing efforts to improve education in countries with
significant Muslim populations is part of both our 2002 supplemental
request and fiscal year 2003 request.
The U.S. Agency for International Development (USAID) and the
Department's Bureau of Educational and Cultural Affairs (ECA) both
promote international cooperation with Muslim populations in the field
of education, including assistance to academic and administrative staff
and students.
In fiscal year 2002, the Department has redirected 5 percent (about
$12 million) of new exchanges budget authority ($237 million) to
combating the root causes of terrorism. Our fiscal year 2003 request
maintains that level. In addition, the Department's 2002 supplemental
request includes an additional $6 million for improving education and
promoting democracy and universal human rights among Muslims.
USAID helps its partner countries develop effective education
policy and delivery systems at all service levels to produce the human
resources required to support growth and to reduce poverty. These
efforts reflect the Agency's recognition of the crucial role education
systems play in the economic and social development of poor countries
and countries in transition. In fiscal year 2003, USAID will fund
education sector interventions in over 40 percent of the countries
where there are USAID missions. A total of $333 million from all
funding sources is available in fiscal year 2003 for education support,
and an additional $60 million in special education initiatives (e.g.,
in Pakistan and Afghanistan).
USAID takes a cross-sectoral view of national, subnational and
community education sector development grounded in policy reform and
systems development based on the host-country's framework for political
and economic development. The strong focus of USAID's education support
is on basic education for children and the goals of the Dakar Framework
of Education for All (EFA). USAID support for education is in countries
most at-risk for not meeting EFA goals.
The regions at greatest risk of not meeting EFA goals are sub-
Saharan Africa and South Asia with 80 percent of the out-of-school,
primary-school-aged population, and the Middle East and North Africa
with wide gender disparities. Many of these countries that are most at
risk are those with a large Muslim population. In the aftermath of
September 11, there is a growing interest within USAID to better
support the educational needs and aspirations of the Muslim world in a
way that modernizes pedagogy and curriculum, while building on the
strengths and ideals of their religious, social and cultural
traditions.
Current education support in countries with significant Muslim
populations includes Nigeria, Mali, Guinea, Benin, Uganda, Malawi,
Egypt, Morocco, and Yemen. New education reform programs are budgeted
for Kazakhstan, Tajikistan, Turkmenistan, Bangladesh, Pakistan and
Afghanistan in fiscal year 2003, and in Indonesia with supplemental
fiscal year 2002 funds. Up until mid-May, USAID had been planning for
education interventions in Somalia.
In addition to basic education interventions, USAID supports short-
term training and higher education collaborations in USAID countries,
and student exchange programs such as Seeds of Peace for children from
the Middle East.
Question. What programs can the United States support to create a
more moderate generation of Palestinian leaders?
Answer. The U.S. funds numerous Palestinian NGOs and civil society
organizations which strengthen the rule of law and help develop
democratic processes. our most important program in this area is
TAMKEEN, a 5-year, $33 million project providing grants to Palestinian
civil society organizations working to develop democratic institutions
and capacity building for NGOs. TAMKEEN has awarded dozens of grants to
increase the competence of Palestinian civil society organizations,
increasing their capacity to manage their operations and better serve
their constituencies. USAID support for the Palestinian Academic
Society for the Study of International Affairs (PASSIA) trains civil
society leaders in policy analysis, communication skills, strategic
planning, management and conflict resolution. The project also provides
a structured, national-level dialogue forum for the discussion of
democracy and rule-of-law issues. A recently-completed $1.2 million
Civil Society Capacity-Building Project implemented by the American
Development Foundation was focused on building the financial management
and internal governance capacities of membership-based civil society
organizations.
These and other programs remain an important focus of our USAID
program in West Bank and Gaza, and we believe they are critical to
creating the environment in which the next generation of moderate
Palestinian leaders will emerge.
Question. How does Saudi Arabia plan to distribute the $100 million
raised for Palestinians during the recent 3-day telethon held in that
country?
Answer. The Saudis have told us that the donations were a
combination of cash and in-kind contributions, such as trucks and
foodstuffs. According to the Saudis, because there are no Saudi
organizations operating in the West Bank and Gaza, they plan to
distribute these contributions thorough international organizations
such as the Red Cross/Red Crescent and the United Nations.
Question. Given the dislocation of extremists in South Asia and
Southeast Asia, is there any evidence that Cambodia is being used as a
transit point or safe haven for terrorists?
Answer. The available evidence suggests that Cambodia is a transit
point for human smuggling and trafficking in persons to other points in
Asia by organized networks. Well-documented cases demonstrate the
trafficking of groups from South Asia and the Middle East through
Cambodia for purposes of economic migration. Given Cambodia's porous,
borders and modest immigration controls the possibility that it is a
transit point for terrorists on an isolated basis cannot be ruled out.
Although we have no concrete information to indicate that Cambodia is
being used by terrorist networks, we cannot ignore the possibility that
Cambodia, as with other places in the region, could be so used.
Question. Which elements of the Royal Government of Cambodia,
including the military and police, are involved in--or are profiting
from--the narcotics trade? Is Prime Minister Hun Sen profiting from the
trade?
Answer. Some elements of the Cambodian police and military are
confirmed to be involved in the narcotics trade. However, senior
Cambodian officials proclaim their intention to interdict illegal
narcotics trafficking and production, and the Prime Minister last fall
dismissed the former chief of Cambodia's national drug control office
in a move that may have been prompted by corruption concerns. We have
no evidence to indicate that Prime Minister Hun Sen is profiting from
the narcotics trade.
Question. Is there any evidence that suggests Cambodian banks are
involved in the laundering of terrorist finances?
Answer. The Royal Government of Cambodia has reported to the United
Nations that it is cooperating fully in the global effort to freeze the
assets of terrorist groups, including both those entities specified by
the United Nations under UNSC 1373 and additional entities named by the
United States. The available evidence suggests that the National Bank
of Cambodia is giving its fullest cooperation in identifying and
investigating suspect entities, although its own resources and capacity
to conduct independent investigations are limited. Moreover, Cambodia
has announced that it is in the process of ratifying the Convention for
the Suppression of the Financing of Terrorism.
Question. How does the Administration ensure that food and HIV/
AIDS-related assistance provided to the Cambodian people is not
politicized by the ruling Cambodian People's Party?
Answer. The U.S. Government provided $17 million in assistance to
the U.N. World Food Program (WFP) this past year to feed some 1.7
million people in Cambodia. In recent remarks related to this donation,
the WFP Country Director stated that the food would be used for victims
of flooding and poverty, rural development through food-for-work
programs, as well as for the support of other emergency projects, all
under the careful supervision of WFP. About $10 million in assistance
for HIV/AIDS programs is administered through USAID, which follows
regulations and guidelines about the proper distribution of benefits to
the Cambodian population. It is not the policy of the U.S. Government
to permit its humanitarian assistance to be used for political gain; we
shall continue to remind the Royal Government of Cambodia of our
policy.
______
Questions Submitted by Senator Mitch McConnell
yugoslavia cooperation
Question. Do you agree that in determining whether the Serbs are
cooperating with the War Crimes Tribunal, the opinion of the war crimes
prosecutor should be given considerable weight, and that we need to see
steady progress?
Answer. The Prosecutor of the International Criminal Tribunal for
the Former Yugoslavia (ICTY), Carla Del Ponte, and other ICTY officials
have valuable insight on the issue of cooperation by the Government of
the Federal Republic of Yugoslavia (FRY) with the ICTY.
We welcome recent steps on cooperation with the ICTY, including the
passage of a law on cooperation, facilitation of voluntary surrenders,
and the issuance of arrest warrants for indictees. However, we have
repeatedly stressed that cooperation is a process, not an event. We
continue to urge the FRY Government to fulfill its international
obligation to cooperate fully with the ICTY. All persons indicted for
war crimes, including Ratko Mladic and Radovan Karadzic, must answer
the charges against them.
israel
Question. Given increased attacks on Israel's northern border, what
is your assessment of the risk posed by Hizballah to Israel's security,
and what assurances have Syria and Lebanon given that these attacks
will end?
Answer. We remain very concerned about the potential for dangerous
escalation along the U.N.-demarcated line of withdrawal between Israel
and Lebanon--the ``Blue Line''--and we have been actively engaged at
the highest levels to prevent it. During the first two weeks of April,
Hizballah launched almost daily shelling and rocket attacks on
fortified IDF positions in the Sheba Farms area straddling the Blue
Line. During the same period, Palestinian terrorists operating in
Lebanon launched several rocket attacks against Israel and Israeli-
occupied territory. These attacks marked the most intense violence
along the border since Israel withdrew from Lebanon on May 24, 2000.
Our high level messages to Lebanon and Syria, including the Secretary's
April 15 visit to Beirut and Damascus, urged these governments to take
actions to restrain Hizballah and Palestinian terrorists, and our
efforts brought results. Since April 13, there has only been one
Hizballah attack (on April 26) and the situation along the Blue Line
has remained relatively calm. We continue to call on all sides to
exercise restraint and urge them in the strongest terms to avoid
actions that risk provoking a dangerous cycle of escalation that would
be in no one's interest.
Question. Does the Administration consider Israel to be a front-
line state in the war against terrorism?
Answer. Israel has been engaged in a decades-long struggle against
terrorism and the United States has always supported Israel's right to
defend itself. After September 11, the Administration developed a list
of front-line states to support our war on terrorists of global reach.
Israel has long been and remains a close counter-terrorism partner but
is not a front-line state.
Question. How would you describe the relationship between the PLO
and the PA with Iran, and is there evidence that additional arms
shipments from Iran are destined either directly or indirectly to
Palestinian extremists?
Answer. The Iranian Government has long opposed the willingness of
the PLO and PA to negotiate with Israel. In addition to its support for
Hizbollah, Iran has also provided varying degrees of aid to Palestinian
Islamic terrorist groups such as the Palestinian Islamic Jihad (PIJ)
and HAMAS. The weight of evidence is compelling with respect to Iranian
involvement in the attempt to smuggle arms to the PA on the Karine A.
We continue to monitor closely Iranian activities in this area.
Question. Excluding Iraq's $25,000 payments to the families of
homicide bombers, what assistance have other Arab countries pledged or
delivered to the PLO, PA, or the Palestinian people?
Answer. Arab governments have disbursed nearly $500 million
annually in direct budgetary support to the Palestinian Authority, and
at the April 25 donors conference in Oslo, they pledged to continue
this support at least through the end of this year. Saudi Arabia and
the UAE are the principal Arab providers of PA budgetary support.
Given the Israeli suspension of VAT and customs revenue
reimbursements to the PA, these contributions for budgetary support
enable the PA to continue basic operations and pay salaries to PA
employees. (The PA is the largest single employer in the West Bank and
Gaza, and termination of Arab states, budgetary support would have a
calamitous effect on Palestinian unemployment levels.) In addition,
Arab states have contributed hundreds of millions of dollars in project
support, both bilaterally and through the Islamic Development Bank. The
IDB and major Arab donors are regular participants in the international
donor coordination process, and have played a vital and constructive
role in Palestinian economic development.
Question. How effective have the Congressionally-imposed sanctions
against Serbia been in securing the arrest and transfer of Slobodan
Milosevic to The Hague and the release of ethnic Albanian political
prisoners in Serbian jails?
Answer. FRY and Serbian authorities have instituted a process for
cooperation with the International Criminal Tribunal for the Former
Yugoslavia (ICTY). The authorities in Belgrade have already taken
several steps under this process to cooperate with ICTY and have
committed to a range of others. We are in constant dialogue to convince
them to move forward on a full range of reforms to institute democracy
and rule of law and have encouraged our allies to deliver the same
message. At times, conditions on our assistance have been helpful in
focusing Belgrade on specific areas of concern and in providing
additional pressure to force politically difficult decisions. However,
these same conditions can also make things more difficult for those
reform-minded politicians that we are most interested in supporting.
Our goal remains a continuous, year-round process of cooperation with
ICTY and Belgrade acting as a good neighbor in the region.
president aliyev's health
Question. Given President Aliyev's health troubles, how would his
untimely demise impact the ability to secure a political settlement to
that conflict--and are there any other leaders in Azerbaijan that have
the political stature necessary to successfully negotiate a solution?
Answer. Both President Aliyev of Azerbaijan and President Kocharian
of Armenia have been personally engaged, deeply and intensively, in the
search for a solution to the Nagorno-Karabakh conflict. Were either to
pass from the scene, progress towards that solution would be at least
temporarily retarded--as occurred, for example, when President Ter-
Petrosian was succeeded by President Kocharian in 1998.
armenia
Question. What confidence building measures are being considered by
State as workable between all parties to the Nagorno-Karabakh conflict,
and what costs are associated with these measures?
Answer. As a Co-Chair of the OSCE Minsk Group, the United States
supports measures designed to build confidence between the peoples of
Armenia, Azerbaijan and Nagorno-Karabakh. The United States currently
supports newly-established mine action centers and the training of
local humanitarian de-mining teams in both Armenia ($1.5 million in
fiscal year 2002) and Azerbaijan ($1.1 million in fiscal year 2002).
These programs will enable each country to address a legacy of mines
and unexploded ordinance that threatens civilians and hinders economic
development in the region. The United States also funds humanitarian
de-mining activities in Nagorno-Karabakh ($300,000 in fiscal year
2002). The United States has also budgeted $1.5 million for de-mining
and structural repairs to a water project on the Armenian side of the
border; once completed, the project would provide water to farmers in
both Armenia and Azerbaijan.
Although the Minsk Group Co-Chairs have discussed a wide range of
confidence-building measures with officials in Armenia, Azerbaijan and
Nagorno-Karabakh, the parties have not been able to agree on terms for
projects that require cross-border cooperation. The parties have been
more receptive to coordinated-yet-independent projects that do not
require direct interaction, such as a rodent-control project along the
line-of-contact that will benefit villages in both Armenia and
Azerbaijan. The Co-Chairs will continue to explore options for
promoting measures, designed to improve communications and reduce
tensions among all parties to the conflict.
turkey
Question. How can Turkey be best persuaded to open a rail link that
runs from Turkey through Armenia, and onto Georgia and Azerbaijan? Will
such a rail link contribute to America's war on terrorism?
Answer. The United States is a strong proponent of helping all
sides in the south Caucasus region work towards building a peaceful,
prosperous and stable future for all the peoples of the region. We
actively support the efforts of Armenia, Azerbaijan and its neighbors
in finding a permanent and fair settlement to the Nagorno-Karabakh
dispute, and are encouraged by the recent trilateral meeting in
Reykjavik between Turkey, Armenia and Azerbaijan.
We support the normalization of relations between Turkey and
Armenia, which will bring with it a natural increase in trade,
communication and transportation links, including rail connections.
Agreement by all sides to expand trade in the region would foster
greater economic opportunity and contribute to political stability.
This would contribute to U.S. objectives for the region, including the
war on terrorism. We are pleased with the recent increase in bilateral
contacts between the two countries, and have told both we support
normal crossborder activity including opening the railroad.
ukraine
Question. What is State's assessment of respect for the rule of law
in Ukraine, and what difficulties are United States businesses
encountering in that country?
Answer. Respect for the rule of law in Ukraine is uneven at best.
Although the Constitution provides for an independent judiciary, the
judiciary is subject to considerable political interference from the
executive branch and also suffers from corruption and inefficiency. We
have pressed Ukraine to create a business environment grounded in the
rule of law in order to attract investment. Though some progress hag
been made, poor corporate governance, including inadequate protection
for shareholder rights, and the lack of confidence in investors,
ability to enforce commercial agreements and defend their legal rights
remain the biggest impediments to increased investment.
United States businesses operating in Ukraine stress the need to
improve the overall transparency of the regulatory and decision making
processes, to ensure consistent application of laws, and to provide for
an independent judiciary. These issues will continue to be a focus for
our bilateral discussions.
Question. Given the difficulty United States NGOs have encountered
in registering with the Ukraine Government, should a portion of
assistance be withheld to stimulate greater cooperation?
Answer. The Government of Ukraine has voiced objections to the
registration of several civil society activities administered by United
States NGOs. In our meetings with the Ukrainians, we have stressed that
the United States must be assured that it can work across a full range
of assistance areas, and that we view democracy and civil society
development as an integral part of our overall assistance program to
Ukraine. In particular, we have warned the Ukrainians that failure to
register these projects, which are standard elements of USAID programs
elsewhere in the world, could have repercussions for the rest of our
assistance.
After extensive discussions, the Government of Ukraine registered
three of the five projects in question. To date, we have been unable to
resolve several outstanding issues concerning the remaining two
projects, which are being implemented by the National Democratic
Institute and International Republican Institute. We are currently
engaged in intensive discussions with both the implementers and the
Ukrainian Government in an effort to reach a solution agreeable to all
sides.
burma
Question. What is your assessment of Japan's support for democracy
in Burma, and what measures has the Administration taken to shore up
support for the National League for Democracy?
Answer. The United States and Japan share the same goals in Burma:
transition to a civilian, democratic government and national
reconciliation. Both endorse humanitarian assistance programs in non-
governmental channels. However, the United States and Japan differ on
the timing of development assistance. We believe development assistance
now is premature.
The United States closely coordinates our policy toward Burma with
other like-minded countries in order to formulate the most effective
support for democracy and political reform. Most recently, the United
States participated in a multilateral meeting at the United Nations
with U.N. Special Envoy Razali on how to move the talks in Rangoon
forward. There was broad agreement that the release of Aung San Suu Kyi
was an event to be welcomed, but that other significant concrete steps
would be needed before going beyond humanitarian assistance.
Question. Are grants provided to the National Zoo's CRC Foundation
by the U.S. Fish and Wildlife Service to protect elephants in Burma in
compliance with U.S. policy objectives toward Burma?
Answer. Grants provided to the National Zoo's CRC Foundation by the
U.S. Fish and Wildlife Service to protect elephants in Burma are wholly
consistent with U.S. policy objectives toward Burma. The funds go to
independent non-governmental organizations for conservation activities
and are not used in any way by the Burmese Government.
colombia
Question. What financial commitments has the current Colombian
Government made to this pipeline protection initiative, and is the
initiative part of a broader, unified strategy to counter the FARC and
paramilitaries?
Answer. The Government of Colombia (GOC) recognizes that reducing
terrorist attacks on the Cano Limon pipeline--and the resulting
economic losses--is crucial to its efforts to meet the country's
overall security and social needs. To do so, the GOC is: (1) creating a
new brigade, the 5th Mobile Brigade, to provide enhanced protection for
the Cano Limon pipeline; (2) developing a plan to increase police
presence in the area and establish a special counterterrorism unit of
the Prosecutor General's Office; (3) training the first of 62 special
``Carabinero'' squadrons, with each having 150 police officers (the
first three squadrons will be assigned to Arauca Department, where the
pipeline originates); and (4) undertaking various social action
projects through the Colombian Investment Fund for Peace, an autonomous
State agency, with 64 projects, whose budgets total $2 million, already
being executed. The Arauca ``Carabinero'' squadrons are part of a
Colombian national strategy to increase security and the rule of law
through the re-insertion of Colombian National Police into zones of
conflict.
Question. Does this assistance draw the United States into the
middle of Colombia's civil war? What is our exit strategy?
Answer. No. The United States strongly supports Colombia's programs
to combat narcotrafficking and terrorism, promote socio-economic
development, strengthen democratic institutions and protect human
rights. This pipeline protection proposal was developed to help
Colombia recover the nearly $500 million in royalties and revenues that
it lost in 2001 due to terrorist attacks on the pipeline. Reducing
these losses will provide the Colombian Government with more resources
to invest in its efforts to meet the security, social and economic
needs of its citizens.
If Congress approves the new authorities that have been requested,
U.S personnel are expected to perform essentially the same roles that
they have over the past two years in implementing our support for Plan
Colombia. This would include providing training and equipment, and
logistical and intelligence support to human rights-vetted units of the
Colombian security forces. We are also committed to maintaining the
ceilings on U.S. permanent and temporary military personnel and U.S.
civilian contractors providing support for Plan Colombia.
The programs and new authorities we have requested will help
strengthen Colombia's ability to defeat narcotrafficking and terrorism.
However, this is clearly a commitment that will require the United
States to provide Colombia with substantial assistance over a multi-
year period.
colombia--plan colombia assets
Question. How will the proposed diversion of assets from Plan
Colombia impact counternarcotics efforts?
Answer. The Administration's fiscal year 2003 budget request
includes $98 million in Foreign Military Financing (FMF) for Colombia
to provide training and equipment to enhance the Colombian military's
ability to protect the strategic Cano Limon-Covenas pipeline. The
counter-terrorism supplemental submitted to Congress also requests $6
million in FMF to begin some of this training earlier. Because the
proposed critical infrastructure protection program will be funded
through FMF, it will not compete for Colombian counternarcotics funds
or draw from fund sources that have traditionally supported
counternarcotics activities in Colombia.
Additionally, rather than siphoning off resources, we believe that
this initiative will help the Government of Colombia preserve and put
to productive use resources that are currently lost through acts of
terrorism. In 2001, the pipeline was attacked 170 times, causing it to
be shut down for 240 days and costing Colombia nearly $500 million in
lost revenues and royalties, Helping Colombia prevent further
disruption of this important revenue source will allow the Government
of Colombia to generate major resources to meet pressing social,
developmental and security needs. In turn, increased Colombian
investment in these areas is key to accomplishing our long-term goals
in Colombia: reinforcing democracy, reestablishing the rule of law,
strengthening the legal economy, and reducing the production and
trafficking of illegal drugs.
colombia
Question. When President Pastrana was in town last week, he
indicated to members and staff of this Subcommittee that his top
priority was the resumption of the air interdiction program in
Colombia. Where does the pipeline security proposal rank in terms of
his priorities?
Answer. President Pastrana publicly requested U.S. assistance for
pipeline security in October, 2001 and Colombian officials had begun
discussions with us on this project even earlier. The Colombian
Government clearly recognizes that reducing its losses from terrorist
bombings of the Cano Limon pipeline is a key factor in developing the
resources it needs to address the country's security, economic and
social problems. President Pastrana has also repeatedly stated that he
considers the air interdiction program in Colombia an important
component in the efforts our two countries are making to reduce the
flow of narcotics to the United States and one which he hopes to see
resumed as quickly as possible.
Question. Is it prudent to embark on a new policy direction in
Colombia when elections are scheduled for May of this year, and a new
administration will take office in August? Do we know the policy
directions of the new administration, and can we hold an incoming
administration responsible for commitments made by President Pastrana?
Answer. Widespread Colombian dissatisfaction with the FARC's
failure to negotiate seriously and its continuing outrages culminating
in the hijacking of a civilian airliner and kidnapping of a prominent
senator, prompted all of Colombia's leading presidential candidates to
back strongly President Pastrana's February 20 decision to end talks
with the FARC as well as to strengthen and professionalize Colombia's
military.
We have also found broad support among the candidates for
continuing the general thrust of U.S. policy: counternarcotics,
counter-terrorism, improving human rights conditions, and improving
Colombia's economic situation. All have backed President Pastranals
request that equipment provided by the United States for counter-
narcotics efforts be used for counter-terrorism as well.
Our aim is to continue our excellent relations with President
Pastrana while laying the groundwork for our policies to transition
smoothly into the next Colombian administration. We have already
engaged the leading presidential candidates on these issues, and will
hold more intensive talks with the president-elect after Colombia's
elections.
Question. In your statement, you say the ``. . . the Government of
Colombia must also fully commit to this task [of combating terrorism''.
What is your assessment of the government's track record in fulfilling
previous obligations, specifically as they relate to Plan Colombia?
Answer. The Government of Colombia is well on its way to funding
its commitment under Plan Colombia, having spent $2.6 billion for Plan
Colombia-related infrastructure projects, including a hospital in
Puerto Guzman, a school in Orito and a farm to market road in Mocoa, as
well as projects regarding human rights, humanitarian assistance, local
governance, and the environment. Colombia has also spent $426 million
on social services and institutional development, including family
subsidies and programs for job creation and youth training.
The Government of Colombia's contribution to Plan Colombia is being
used for counterdrug efforts and social and economic development
projects. These projects include social and infrastructure programs in
Putumayo Department, in southern Colombia, the site of the heaviest
concentration of coca growth. Colombia has also continued to modernize
its armed forces, boosting the number of professional soldiers from
22,000 to 53,000 and acquiring new equipment. It has stabilized its
economy in accord with IMF guidelines; and undertaken an aerial
eradication program resulting in the destruction of unprecedented
amounts of coca.
The Colombian Government is unquestionably committed to resolving
the crisis. President Pastrana's long commitment to the peace process
and his eventual decision, after much deliberation, to reestablish
control of the demilitarized zone were born of that commitment.
Still, Colombia needs to do more. Colombia currently spends
approximately 3.5 percent of GDP on security, a figure that is not
sufficient for a country facing the security threat posed by Colombia's
terrorist groups. We have stressed in our meetings with senior
Colombian Government officials that Colombia needs to increase the
resources it devotes to security, and we have also begun a dialogue
with the leading presidential candidates on this issue.
cambodia
Question. What is the Administration' assessment of narcotics
production and trafficking in Cambodia, and does State share the U.N.'s
assessment that the country has become a major heroin smuggling route
to the West?
Answer. Cambodia, although not a major producer of opiates or coca-
based drugs, is a transit route for Southeast Asian heroin to overseas
markets including Australia, Europe, and the United States. There is
little hard information on the scale of heroin trafficked through
Cambodia, but the amount of heroin seized in the United States in
recent years that is traceable to or through Cambodia is small.
Marijuana is cultivated mainly for export, but is well below the
quantities specified for countries on the majors list. Quantities
coming to the United States are not sufficient to have a significant
impact on the United States.
In the past couple of years Cambodia has experienced, especially in
urban areas, a rapid and significant increase in amphetamine-type
stimulant abuse, which the government has characterized as a serious
social problem.
afghanistan
Question. What is the level of development that the Administration
hopes to achieve in Afghanistan?
Answer. We hope to rebuild the political and economic framework
that will prevent the return of terrorism, fight drug trafficking and
avert large-scale humanitarian crises. The first step in this process
is to address immediate needs--humanitarian and security.
nepal
Question. What are the linkages, if any, between the Maoist
insurgents in Nepal and al-Qaeda?
Answer. The State Department has no evidence linking the Maoists to
al-Qaeda. Nevertheless, Nepal's brutal insurgency threatens to bring
further instability and human suffering to South Asia, a critical front
in the war on terrorism. There is growing concern that the instability
resulting from the insurgency might provide the conditions under which
terrorists operating in the region could find safe haven in Nepal.
Question. Does any conclusive evidence exist that demonstrates
migration of extremists from Afghanistan or Pakistan to Nepal?
Answer. The State Department has no evidence linking the Maoists to
any extremists specifically emanating from Pakistan or Afghanistan.
Nevertheless, Nepal's brutal insurgency threatens to bring further
instability and human suffering to South Asia, a critical front in the
war on terrorism. There is growing concern that the instability
resulting from the insurgency might provide the conditions under which
terrorists operating in the region could find safe haven in Nepal.
middle east economic initiative
Question. How does this Initiative differ from programs and
activities already conducted by USAID and State in the Middle East?
Answer. We will be using the $50 million requested as part of the
Administration's Fiscal Year 2002 Supplemental Appropriations bill to
fund new high impact/high visibility projects immediately in three key
areas: economic reform/private sector development; education; and rule
of law/civil society. We will, simultaneously, be reviewing all of our
existing economic assistance programs across the region to insure that
our assistance money is being spent in a manner consistent with our
national interest post-September 11.
The supplemental funds will allow us to move immediately to fund
quick-disbursing projects in the areas mentioned above. We are
particularly interested in insuring the money funds projects that reach
people at a grass roots level, where the terrorists themselves are most
effectively recruiting. The supplemental funds provide us flexibility
to fund new projects immediately, while we undertake the process of
reviewing and potentially reprogramming existing assistance projects.
Question. How does the MEEI promote democracy and good governance
in the region?
Answer. The MEEI will provide funding for a range of activities
that promote democracy, rule of law and good governance. These will
include: support for democratic reforms underway in countries like
Bahrain, Qatar and Morocco; support for media reform, journalist
training and exchange programs; assistance for polling organizations;
and funding for think tanks and business associations. We will provide
direct election and campaign support, through local and international
NGOs, for new candidates, including women. Funds may also be used to
support parliamentary training activities.
Question. Which countries are targeted through the Initiative, and
how much of these funds are destined for Egypt?
Answer. All Middle East countries, with the exception of Iran,
Iraq, Libya, and Syria are eligible to participate in the Initiative.
On the question of assistance to Egypt, although no decisions have been
made, we anticipate that its participation in the initiative will be
funded largely by redirecting existing assistance programs.
Question. Does the Initiative include promoting free and
independent media throughout the Middle East?
Answer. Yes. Exchange and training programs, including for
journalists and other media professionals from the region, will be an
integral part of the initiative.
millennium challenge account
Question. When does the Administration plan to initiate this
Account, and should Congress expect a request for funds for fiscal year
2003?
Answer. The Administration plans to include the Millennium
Challenge Account in the President's fiscal year 2004 budget request.
The President's new approach to development gives us an opportunity
to show tangible results for U.S. taxpayers' investments in foreign
assistance. We hope we can count on your support in promoting this new
approach. We look forward to working with Congress as we move forward.
Question. Does the Administration support increased funding for
critical rule of law and democracy programs in China, particularly with
that nation's entry into the WTO?
Answer. Yes, we support increased funding for rule of law and
democracy programs in China.
The United States for many years has stressed the importance of
rule of law and has worked to encourage democratic practices. China's
accession to the WTO makes progress in these areas even more important,
as openness to and integration with the world economy demands a legal
system that is insulated from political influence, operates in a
transparent manner, and treats all citizens (and officials) as equals.
China recognizes some of the shortcomings of its legal system and is
seeking to improve upon them. We believe the United States can play a
constructive role in helping China move in those directions. In
addition to continuing to work on promoting rule of law and democracy
in bilateral and multilateral fora, this year the State Department will
significantly expand its efforts to support these goals directly with
programs in China.
In fiscal year 2001, $2 million was earmarked for rule of law
programs in China; this year that earmark has increased to $10 million,
and the mandate for these funds has broadened to include not only rule
of law but also human rights and democracy. The State Department
welcomes the opportunity to make an even larger impact on progress in
these critical areas, and has focused on programs involving legal
reform, rights awareness, and judicial independence, transparency and
popular participation in government, and fostering independent
government. Democracy, human rights, and rule of law programs are
effective as complements to our bilateral human rights dialogue. As
long as possibilities to promote these objectives in China continue to
expand, we can effectively program increased levels of funding.
Question. The upcoming Chinese leadership retreat this summer is
expected to yield changes in official Chinese Politburo positions. Do
you expect these changes to strengthen the hand of economic reformers,
or will hard-line elements within the Politburo emerge?
Answer. Events including the retreat at Beidaihe in the summer, the
16th Party Congress in the fall, and the 10th National People Congress
next spring are projected to result in significant changes in China's
leadership. We do not expect the leadership changes to lead to any
reversal of the long-term policy course of economic reform originally
set out by Deng Xiaoping. The process of economic reform, symbolized by
China's entry into the World Trade organization in December 2001, has
advanced China's national interests. If there were negative
developments in the global or Chinese economies, this could cause
setbacks for economic reform in China, but the long-term trend toward
increased reliance on market mechanisms rather than central planning is
likely to continue.
Question. Chinese Vice President Hu Jintao is widely considered to
be a successor to Chinese President Jiang Zemin. What is the
Administration's view of Mr. Hu's commitment to economic and political
reform within the PRC?
Answer. The Chinese will determine their new leadership, including
a successor to President Jiang Zemin, during upcoming meetings this
year and in the spring of 2003. There is every indication that the
Chinese Government's commitment to economic reform will be sustained
through the course of imminent leadership change in China. Vice
President Hu's remarks place him solidly in this mainstream view. With
regard to political reform, you will recall that we have consistently
urged that Chinese authorities establish and implement international
standards of human rights protection. Our annual Human Rights Reports
have catalogued our view of the shortcomings in this regard. The
Chinese will have to speak for themselves as to the prospect for
increased pace and scope of political reform; for our part, we will
continue to urge improvements on the ground in China. Moreover, we will
continue to urge China's increased interaction with the U.N. Commission
for Human Rights and other international organizations that promote
fundamental freedoms.
Question. Increasingly, reports of social and economic unrest in
the Chinese countryside hint at deep-rooted challenges that face the
Chinese Government as it implements economic and other reforms. Do you
believe that such unrest can be managed by the Chinese Government
without recourse to violence, and has the Administration expressed
concern over reports of the use of force to quell dissent in the
countryside?
Answer. China has implemented far-reaching social and economic
reforms in the last 20 years and faces enormous challenges as it
continues to move to a more open economy and society. The United States
will continue to urge the PRC to respect the basic human rights of its
citizens, which include freedom of assembly, freedom of association,
and freedom of speech and conscience. We are aware of recent protests
stemming from concerns over economic dislocations and other
difficulties. We believe the Chinese Government can and should manage
these challenges without resorting to violence. Grassroots elections
and good governance are seen as means of defusing tension at the local
level. We have repeatedly made it clear to the Chinese Government,
through our Human Rights Reports and through high-level exchanges, that
the Chinese Government should respect fully both the human rights of
its citizens, including the right to peaceful protest, and China's own
laws, which mandate direct elections at the village level. We will
continue to closely monitor ongoing developments, particularly the
Chinese Government's response to protests.
Question. What is your assessment of the state of democracy and the
rule of law in Hong Kong?
Answer. In the past year, there was continued public pressure on
Hong Kong's political system to evolve toward greater accountability
and democratization. Despite the public debate over the pace of
democratizing elections for the legislature and chief executive, the
Hong Kong Government continued to state that the time was not
appropriate to consider changes to Hong Kong's election arrangements.
We continue to urge the Hong Kong Government to move forward more
quickly to realize full direct elections. We continue to support the
advancement of democracy in Hong Kong at a pace that is consistent with
the aspirations of the Hong Kong people.
The rule of law and an independent judiciary remain pillars of Hong
Kong's free and open society. Since 1999, the Hong Kong Government has
not re-used a mechanism requesting that China's National People's
Congress Standing Committee reinterpret the Basic Law, Hong Kong's
constitution.
CONCLUSION OF HEARINGS
Senator McConnell. That concludes our hearings. The
subcommittee will stand in recess subject to the call of the
Chair.
[Whereupon, at 12:10 p.m., Wednesday, April 24, 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 2003
----------
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 the International Republican Institute
the importance of democracy assistance programs since september 11
Thank you for the opportunity to discuss the importance of
democracy assistance programs post-September 11. I would especially
like to thank Senator Mitch McConnell for his continued support of
these programs.
In a November 27, 2001 testimony to the U.S. Commission for
International Religious Freedom Congress, IRI's Vice President Georges
Fauriol stated that ``in a free society, religious freedom and moral
principles associated are fundamental measurements of social conduct,
yet their practical application is often caught in crisis.'' September
11 is a dramatic manifestation of such a crisis.
Indeed, the underlying value system associated with the September
11 terrorist attacks seriously undermines the United States' efforts to
create a more democratic, stable, and prosperous world. It underscores
the crucial need for assistance programs to expand, strengthen, and
achieve sustainable democracies.
The war on terrorism is not only a military struggle but also an
ideological one. Through our programs' focus on democratization, IRI
addresses terrorism's root causes not solely the symptoms. The need for
such democratic assistance is underscored by a single truism: rarely
have democracies harbored terrorists.
In our efforts to provide democracy and governance assistance,
IRI's point of reference is simple: If no viable political parties
operate in a country, political transformation to democracy is limited.
Political parties provide a measurement tool for democracy.
Thus, it is a mistake to assume that a broad focus on human rights
issues in and of itself may necessarily improve the prospects for
democratic governance. Effective democracy assistance must have long-
term, proactive institutional engagement outlook which goes beyond
dramatic descriptions of human rights abuses.
Indeed, democracy assistance needs to bring about a change in
political culture. To achieve this change requires an institutional
engagement of political parties and instruments. From such dialogue, a
foundation for exercising fundamental freedoms and building vibrant
democratic systems will emerge. Without this interaction, terrorism's
zealous restrictions on alternative and individual expressions of
thought and action will continue. The product of such continued
repression will be more conflict.
Thus, U.S. democracy assistance must include programs that exclude
cultural relativism and foster institutional engagement of political
parties and other instruments.
new and old challenges mesh together
A major challenge in IRI's work, even more pronounced after
September 11, is the unbalanced support for civil society over
political parties. Donor institutions often prefer to support
``neutral'' recipients and activities. Civil society projects are
typically more politically correct, easier to manage, and more open-
ended. These projects at times generate a self-perpetuating appetite
for involvement and dubious evaluation criteria.
Another challenge is the donors' poor understanding, flexibility
and timeliness regarding the importance of political parties. Because
the parties are seen as openly engaged in politics, the standards of
any support are inevitably tougher, and often result in unnecessary
funding delays or missed opportunities. Bureaucrats, practitioners and
diplomats often shy away from direct engagement. Instead, they support
political parties by exploring partisanship on a wider world stage.
Consequently, there are no political party assistance programs
sponsored by USAID in Latin America or Afghanistan, among others.
By contrast, shifting investments within civil society is seen as
generating a broader base of institutional and communal development.
This perception underscores the prevalent view among donors that
supporting political party development actually supports a narrower
domain, one that assumes a common societal agreement about basic
political terms of reference.
three propositions
Post-September 11 IRI operates with the following three
propositions:
First, the war on terrorism and democracy advancement often
overlap, but are not always symbiotic. In executing the war on
terrorism, the United States at times engages the cooperation of
countries and regimes which may be deficient in democratic practices.
There is a need for reconciling a conceptual tension between current
U.S. foreign policy interests and long-term democratization interests.
IRI is now able to engage governments in democratic developments
that previously were uninterested. IRI's in-country experiences suggest
democratization assistance programs and security concerns are equally
important. A useful corollary is that in those regions of the world not
directly in the focus of the war against terrorism, such as in Latin
America, lack of attention of democratic assistance may result in a
rollback of democracy-building and a return to authoritarian-style
government, with unforeseen consequences.
Second, conventional humanitarian assistance should not be confused
with democracy assistance. While agricultural development, health care
and food safety for adversely affected populations are very important,
they are not fundamental factors in developing democratic systems of
governance. Commodity assistance is frequently welcomed by undemocratic
regimes, such as the one in Haiti, because these regimes often use it
to further their political interests.
Through IRI's individual programs, we strive to develop regional
long term strategies for democracy assistance. The long-term United
States strategy in Afghanistan and the Central Asia region is unclear
besides an USAID humanitarian assistance program focused on developing
agricultural commodities. This creates the perception that the United
States is not seriously interested in stabilizing the region. In order
to demonstrate otherwise, IRI stands ready to expand and strengthen
democracy in the wake of September 11.
Third, sequencing between political party development and civil
society is critical. In a fundamental democratic equation civil society
represents demand and political parties supply. Without political
parties, democracy cannot work, and civil society becomes marginalized.
Venezuela is a textbook example of how imploding political parties lead
to more authoritarian alternatives.
Political parties not only disseminate ideas, demands, and
resources, but also link governments to civil society. To effectively
govern, therefore, political parties need a democratic infrastructure.
recommendations
IRI experience with political parties suggests a set of criteria
helpful to U.S. policy makers:
(1) A strategic political party dialogue with diverse segments of
the political community has significant payoffs.
(2) There is a need for a long-term understanding of the societal
interests political parties are likely to sustain.
(3) In some special circumstances, political party engagement
ensures a residual interest in, or protection of, issues and
constituencies in countries viewed by Washington as constituting
troubling relationships.
(4) Changing public opinion through democratic political party
development positively impacts attitudes towards fundamental human
rights and thus toward the stability, legitimacy, and integrity of the
democratic system. (5) Sustained engagement might ensure increased
credibility and a future brokering role as a goodwill gesture.
More specifically, U.S. Government donor agencies need to recognize
that we often operate in crisis environments requiring flexibility and
timely responses. Thus funds for democracy assistance should not always
be shaped by traditional funding criteria. Simplifying funding
mechanisms for crisis situations will greatly help meet the new demands
before IRI.
The National Endowment for Democracy (NED), created by President
Reagan with bi-partisan support in Congress, is an institution uniquely
flexible and knowledgeable to support democracy assistance programs.
Supporting the NED with resources to systematically address the new
issues facing democracy assistance is an urgent need. New funding
mechanisms created at USAID and the State Department would better fund
Ned's programs.
In the post-September 11 environment, the United States must
penetrate the cultural wall of authoritarianism by vigorously promoting
democratic values. To achieve such aims, we need to promote political
party programs as well as provide civil society programs and
humanitarian assistance.
______
Prepared Statement of the National Democratic Institute for
International Affairs
The National Democratic Institute (NDI) appreciates this
opportunity to present its views on U.S. democracy assistance programs.
promotion of democracy and u.s. interests
The worldwide democratic revolution of the 1990s demonstrated the
nearly universal appeal of democratic values and cemented a unique
leadership role for the United States in advancing those values. A
bipartisan policy consensus emerged that nothing better serves the
interests of the United States than the promotion of democratic
practices and institutions.
Since September 11th, some analysts have argued that strategic
considerations should take precedence over policies that promote
respect for human rights, religious tolerance and democratic decision-
making.
The notion that there should be a dichotomy between our moral
preferences and our strategic goals is a false one. The United States'
ultimate foreign policy goal is a world that is secure, stable, humane
and safe, and where the risk of war is minimal. Yet the undeniable
reality is that geostrategic ``hot spots'' most likely to erupt into
violence are found, for the most part, in areas of the world that are
nondemocratic.
NDI firmly believes that the United States should attach the
highest priority to democratic development as an essential element of
its foreign assistance programs. The promotion of democracy should be
seen as a robust and necessary element of our strategy to confront the
new global threat of terror.
Terrorism and political extremism pose an immediate security threat
that must be confronted directly and forcefully. Concurrently there
must be a new urgency in the promotion of the rule of law, pluralism
and respect for human rights. Democracy and human rights are not only
ideals to be pursued by all nations--they are also pragmatic tools that
are powerful weapons in the worldwide confrontation of terror and
extremism.
In his address to Congress in the aftermath of September 11,
President Bush said, ``Every nation in every region now has a decision
to make. Either you are with us or you are with the terrorists.'' His
warning registered everywhere, precisely because it was universally
understood that terrorism is a threat to civilization and those who
sustain the threat will suffer the consequences.
Most governments, including undemocratic ones, understand that
terrorism threatens them as much as it does the United States. Indeed,
many leaders in countries yet to join the democratic community have
joined the U.S.-led coalition because terrorism threatens their own
survival in power. Our allies in Uzbekistan, Tajikistan, Kyrgyzstan,
Kazakhstan, Pakistan, Saudi Arabia, and Egypt have faced political
extremism and appreciate what the Talibanization of their societies
would mean.
However, the price for their cooperation should not include an
open-ended sanction for their governing style, nor should the price of
coalition exclude, even unintentionally, support for democratizers.
Political extremists live in a symbiotic relationship with
nondemocratic regimes. Autocracy, corruption, and the lack of
accountability feed powerlessness, poverty, and despair.
Authoritarianism bars change within the system; among its subjects, it
produces easy rationales for extra-legal methods. Radical groups
cynically exploit the discontent created by such an environment, in
which the only outlet for political expression becomes the mosque. Some
disaffected people come to relish their role as ``fighters'' against
what they perceive as corruption and repression.
During the 1980s, an important lesson was learned about political
transformations in countries like the Philippines and Chile--that
political forces on the far left and far right enjoy a mutually
reinforcing relationship, drawing strength from each other and, in the
process, marginalizing the democratic center. Prospects for peace and
stability only emerged once democratic political parties and civic
groups were able to offer a viable alternative to the two extremes--a
``third way.'' These democratic forces benefited from the solidarity
and support they received from the international community and, in the
United States, Republicans and Democrats joined together in bipartisan
efforts to champion their cause.
As the United States pursues its current strategic imperatives with
allies like Pakistan, Uzbekistan, Kazakhstan and Egypt, we can also
work to promote a ``third way'' between authoritarianism and religious
extremism. As much as the strongmen whose cooperation we need
presently, democracy-builders in these countries also are our allies
against political extremism. Their voices are important in challenging
the misconception that democracy and Islam are incompatible, and they
are a force that can build a genuine constituency for peace,
development and prosperity.
However, many democratic activists in the Middle East and Asia now
fear that they might be caught in a kind of ``squeeze play'' between
governments that are using the call to action against terrorism to root
out even benign forms of political participation, and fundamentalists
who have always regarded democratic reform as a threat to their vision
of a religious state.
The U.S. agenda in these countries can include help for the war
effort, as well as support for those working for freedom of speech and
expression, for fair elections that reflect the will of the voters, for
representative political institutions that are accountable to the
public, and for judiciaries that uphold the rule of law.
There are many examples of democracy building successes, even in
regions of the world most afflicted by terrorism and extremist
violence.
In Pakistan, the Human Rights Commission has been organizing
community groups to address problems of freedom of the press and to
encourage women to participate in political life. In Uzbekistan, the
Human Rights Society is supporting the legal right of political
movements to register with the state as official entities.
In Kazakhstan, a coalition of nongovernmental organizations has
lobbied the Parliament to overturn legislation that would eliminate the
last remnants of independent media. In Egypt, a number of civil society
groups led by respected academic Saad Eddin Ibrahim monitored
parliamentary elections and reported on abuses.
Harassment or jail has often been their reward, but in all cases,
these democratic activists are not trying to overthrow governments--
they are trying to take away the lifeblood of extremism by providing
political space for debate and peaceful dissent.
future challenges
Even in countries which are widely regarded as democratic success
stories, ``next generation'' democracy challenges, such as corruption,
economic progress, political party reform, technological issues like e-
governance, women, youth and minority participation, leadership
development and addressing public apathy and disaffection, must be
tackled through greater linkages between the citizenry and political
institutions and politicians.
NDI has never believed that democracy promotion is a panacea but
sees these activities as one element of a mix of foreign aid and
development initiatives that include economic development and socio-
political considerations. But economic reconstruction efforts in
Afghanistan, for example, are unlikely to succeed in the long term
unless democratic political institutions are also developed.
Democracy promotion programs, to be effective, must identify
specific challenges in each country, and address those challenges while
taking culture, tradition and history into consideration.
It could be demoralizing and ultimately self-defeating to yield
ground to those professional cynics who describe democratic development
in Hobbesian terms in which war, poverty and autocracy are the natural
state of affairs. To them, the promotion of democracy is at best a
distraction. This pessimistic view of the world contradicts the reality
on the ground where courageous democrats with outside support can help
realize their people's democratic aspirations.
The realpolitik approach is to support democratic change and take
on the tough work that will lead to stability and economic growth in
the long term. Who can doubt that the support the United States
provided Solidarity in Poland, the pro-democratic forces in Chile,
those struggling against apartheid in South Africa or Milosevic in
Serbia have not been worthwhile investments in peace and prosperity.
elements of political democratization
While there is no single model for a democratic political system,
the components of a political democratization process are fairly
common. Each represents key mechanisms of conflict resolution within a
society:
(1) Civic culture.--This is the most fundamental level of democracy
promotion, where the goal is to educate citizens on their rights and
responsibilities.
(2) Intermediary organizations.--Citizens' organizations such as
labor unions, business groups and other associations are needed. In
societies where these groups have not existed, outside assistance to
develop them is required.
(3) Political parties.--These are the vehicles for healthy
political competition, the institutional mechanisms that allow a
society to aggregate ideas. If these groups are not organized
democratically, or if they fail to perform their role, the democratic
system will be threatened.
(4) Election systems.--Developing election processes capable of
producing a valid and representative reflection of the electorate's
will is essential in establishing legitimate governments.
(5) Governmental institutions.--Executive branches, parliaments,
judiciaries and local governments must function effectively, with
openness and integrity.
role of u.s. non-governmental organizations (ngos)
While the U.S. Government can set the tone, and foreign aid can
provide needed resources for democratic development, much of the real
work must be done by non-governmental organizations. Groups such as NDI
are capable of assuming responsibility, yet are not constrained by the
stringent rules of formal diplomacy. NGOs can readily share
information, knowledge and experiences with groups and individuals who
are pursuing or consolidating democracy, sometimes without the
cooperation or sanction of their government.
Moreover, in countries where one of the issues being addressed is
the paucity of autonomous civic and political institutions, the
fundamental idea that government ought not to control all aspects of
society can be undermined by a too-visible donor government hand in the
development and implementation of these programs.
NGO initiatives must grow out of the needs of democrats struggling
on the ground in the host country. The work should always be in the
open and should be conducted with partners committed to pluralism and
nonviolence. At the same time, consultation is necessary with the
Congress, USAID missions and embassies. When public funds are used,
transparency and accountability should always prevail.
u.s. government support
NGOs such as NDI have greatly appreciated the expansion of
democracy initiatives undertaken by USAID. These programs have provided
the resources necessary to maintain a permanent field presence in many
countries and to sustain, on a long-term basis, political development
activities. We hope that needed democracy assistance resources will be
maintained and even expanded by AID and that these programs will not,
even unintentionally, be reduced as a result of earmarks for other
worthy development programs.
The U.S. Congress can play an important role by ensuring needed
support for the National Endowment for Democracy (NED) and its core
institutes, NDI, the International Republican Institute, the American
Center for International Labor Solidarity and the Center for
International Private Enterprise.
These organizations have the expertise and the networks of
relationships necessary to conduct effective programs around the world,
but the need for assistance far outstrips the available resources. The
NED's original authorization in 1984 was $31.4 million; its current
budget, which includes the first increase in many years, is $33.5
million.
The NED and its core institutes give concrete expression to
America's democratic values while serving our country's national
interest by promoting political environments that are inhospitable to
political extremism.
______
Prepared Statement of the National Endowment for Democracy
Mr. Chairman and Members of the Subcommittee: Thank you for
allowing me to offer some perspectives on the importance of democracy
promotion in the aftermath of the terrorist attacks of September 11,
2001 and on the challenges that we face in approaching this critical
task.
The shattering events of September 11 have radically altered the
world in which we live, compelling people in societies throughout the
world to reexamine their fundamental goals, priorities, and
assumptions. The current U.S. policy of targeting terrorist cells and
the countries that harbor them militarily represents one very important
response. But an effective long-term approach to terrorism and related
problems must also involve helping democracy take root in those
countries and regions that now breed or support terrorists. For
terrorism feeds off tyranny, finding recruits among the politically
repressed and sanctuary from states that use terror against their own
people.
Building effective political institutions is the surest way to
sever the link between terror and tyranny and advance the values of
democracy, individual rights, and cultural pluralism. In the words of
Madeleine Albright, chairman of our affiliated National Democratic
Institute, in testimony last week to the Foreign Relations Committee,
``Certainly terrorists can exist in any country. But they cannot long
operate where leaders are accountable and legal institutions respected.
In fighting terror, democracies have a clear advantage, because they
embrace pluralism, encourage tolerance, and enable citizens to pursue
change in a peaceful and lawful way.''
Mr. Chairman, promoting democratic institutions and values in
countries and regions that serve as breeding grounds for terrorism is
thus one of the most urgent challenges our country faces. But the
attacks of September 11 did not sweep away or resolve the problems that
exist in other parts of the world as well, namely problems of
dictatorship, semi-authoritarianism, corruption, back-sliding, and
ethnic conflict in Latin America, East Asia, sub-Saharan Africa,
Central Europe, and the NIS.
If anything, the attacks aggravated these problems by accelerating
the downturn in the world economy that was already underway, and by
heightening security concerns that dictators frequently use to
rationalize and tighten their controls. Indeed, the gains of the past
decade may be more tenuous today than they were before September 11,
and democratic progress may be more difficult to achieve in the new
international environment.
In promoting democratic institution-building, it would be unwise to
write off any specific country as insignificant or beyond hope. This is
because in the globalized world that exists today, the cancer of
breakdown in any country can metastasize to other countries and regions
to become a threat to international peace and security.
a universal value
Because democracy is a genuinely universal value based upon the
belief that people everywhere, regardless of their religion and
culture, can achieve self-government under the rule of law, it is the
natural organizing principle in the struggle to defeat terrorism and to
create a stable and peaceful world. Twenty years ago this June,
President Reagan asserted in an address to the British Parliament that
helped launch the National Endowment for Democracy that it was
democracy that represented the most effective antidote to the central
threat the world then faced. In arguing its universal appeal, he
declared:
``It would be cultural condescension, or worse, to say that any
people prefer dictatorship to democracy. Who would voluntarily choose
not to have the right to vote, decide to purchase government propaganda
handouts instead of independent newspapers, prefer government to
worker-controlled unions, opt for land to be owned by the state instead
of those who till it, want government repression of religious liberty,
a single political party instead of a free choice, a rigid cultural
orthodoxy instead of democratic tolerance and diversity?''
Indeed, that people everywhere should live in a free and democratic
society is a deeply rooted American sentiment, and that government
should rule by the consent of the governed is fundamental to our
deepest values.
So the real question, Mr. Chairman, is not whether democracy
promotion is an important weapon in the fight against terrorism and the
conditions that breed it, but rather, whether we are prepared for the
challenges we face in making it a priority.
the twin tracks of values and security
While the short-term policy of protecting the security of American
citizens and the longer-term policy of promoting democracy abroad are,
for the most part, mutually reinforcing, there are circumstances in
which they may seem to collide, especially during those periods when
immediate security needs are paramount, as they currently are. Indeed,
our country's post-September 11 foreign policy agenda makes calibrating
these two tracks of U.S. policy particularly difficult.
To see how this dilemma might manifest itself, take the example of
a U.S. Ambassador in an Arab country in the Middle East, who must work
overtime to persuade the host government to permit the stationing of
American troops in the country to fight terrorism when popular
opposition to such a presence is strong and growing, with the help of
the government's critics. In the midst of such a delicate situation,
can we realistically ask the Embassy to be responsible for providing
assistance to the very kinds of voices that the host government
perceives as its opposition? It is difficult to imagine that such an
arrangement is easily workable, especially if the host government
claims to be fighting actual or potential terrorists within its own
territory.
But what price will the United States pay down the road if it does
not reach out to democrats in all societies? The perception that we
have never supported those who share our values in the Middle East only
plays into the hands of those demagogues who contend that the United
States is anti-Muslim. This perception is complicating our efforts to
meet our security needs. And not only in the Middle East, for it is
easy to imagine that those who are the subject of government repression
in places such as Central Asia could feel similar resentment if our
government, in its efforts to fight the war on terrorism and preserve
options with respect to energy supplies, turns its back on independent,
democratically-oriented voices.
For the National Endowment for Democracy and our core institutes,
such choices do not have to be made, since our sole mission is the
promotion of democracy. Indeed, it was precisely this scenario that the
founders of NED had in mind when they structured it as a non-
governmental institution.
challenges to democracy promotion
Mr. Chairman, what are the most significant barriers to democratic
progress today, and what strategies are most effective in overcoming
them?
The countries where these barriers are greatest fall into three
broad categories: dictatorships, semi-authoritarian systems, and war-
torn countries. The problems and program needs differ from one category
to the other, and there is also great variation within these
categories. Dictatorships include both totalitarian and authoritarian
systems, and semi-authoritarianism includes countries that are moving
toward or away from full democracy, or are not moving perceptibly in
either direction. War-torn countries include failed states that lack
virtually any institutions of governance, democratic or otherwise. In
addition, there is also the additional category of transitional
countries where there has been significant progress in democratization,
but where democratic institutions remain weak.
Opening dictatorial systems.--Perhaps the most difficult challenge
facing the democracy-promotion effort is to foster the opening of
closed dictatorial systems. As difficult as this area is, focused
attention is necessary because the needs are so great and the courage
of the pro-democracy activists is so admirable. Moreover, these
countries tend to be ignored by most democracy-assistance institutions,
which require an in-country presence (and thus the permission of the
host government) before they will conduct programs or provide support.
As a non-governmental organization, the NED, with its policy of making
direct grants to indigenous groups as well as to groups based in exile,
has been able to play an effective role in these difficult situations,
often at a relatively low financial cost. Its objective has been to
create internal and external pressures for liberalization by aiding
internal pockets of activity and linking them to like-minded groups in
other countries, thereby strengthening their resolve and impact and
also their international support.
NED programs in dictatorial countries place special emphasis on the
defense of human rights and the provision of access to independent
information, activities that are necessary first steps in opening
closed societies. The principle governing such programs is feasibility.
The NED presses the limits of what is possible--aiding groups working
to create new openings, to defend democracy activists, to develop
alternative channels for the flow of information, and to promote
capacity development and democratic education within the democracy
movement itself as well as the wider society. If space opens up to make
it possible to conduct democracy programs inside dictatorial countries
with the acquiescence of the government, NED readily takes advantage of
this opportunity, in accordance with its pragmatic approach. If access
to the Internet is available, even if it is highly restricted, the
Endowment will seek to take advantage of that channel, too. The NED and
its institutes also seek to build international pressure for democratic
openings, as in the case of Burma, where American labor has defended
the rights of Burmese workers in the International Labor Organization,
and NDI has recruited more than 3,000 parliamentarians in a campaign of
international solidarity.
NED programs in dictatorial countries thus vary along a spectrum of
possibility. For example, in North Korea, which is the most closed
country, the NED has provided support to groups in South Korea that
document the repressive conditions in North Korea and are working to
build an international campaign for the defense of human rights there.
In Burma, it has supported cross-border efforts that provide training,
education, and information to Burmese groups to help them develop their
institutional capacity and their ability to communicate internally and
with the international community. In Cuba, where it has become possible
to support internal democratic groups, the NED has provided assistance
to journalists, independent workers organizations, and cooperatives,
all the while maintaining exile-based programs that defend human
rights, provide uncensored information, and encourage dialogue within
Cuba and in the diaspora about the political future of the country. And
in China the NED has conducted an even more diversified effort, aiding
both internal programs to promote democratization, worker rights, and
market reform; and external programs that defend human rights and
provide access to independent ideas and information.
In these and other dictatorial countries, the strategy is to take
advantage of any opening, however limited it may be, and to find ways
to strengthen independent enclaves of democratic thought and activity.
The cause of democracy in such countries is so compelling that Congress
has begun to provide special funding to expand programs in Burma, North
Korea, China and elsewhere, including programs that support the rights
of Tibetans and dialogue about Tibet's political future. A diverse,
integrated, and flexible approach is needed, one that is multi-sectoral
and involves both internal and external programs, and builds
international solidarity networks and campaigns.
Democratizing semi-authoritarian countries.--By far the largest and
most diverse group of countries comprises the second category, semi-
authoritarianism. This is one of many terms (including pseudo-
democracy, hybrid regimes, and competitive authoritarianism) used to
describe regimes that fall somewhere between dictatorship and genuine
political openness and competition of electoral democracy. A factor
common to many such regimes is that the elections are not free and
fair, because they are constrained and controlled by the ruling party
or otherwise distorted by fraud and manipulation. In addition, such
regimes tend to have an overwhelmingly dominant executive; formal
democratic structures but authoritarian political culture and
practices; serious human rights violations; residual authoritarian laws
even where there is a new democratic constitution; and a very high
level of corruption and inequality. The rule of law is extremely weak,
as are the institutions of the state that are supposed to provide
security and look after the social and economic needs of the people.
Ironically, these problems are the product of the democratic
revolution of the past decades--or to be more precise, the unfinished
democratic revolution. The fall of authoritarian regimes in Latin
America, the Soviet bloc, and large parts of Asia and sub-Saharan
Africa triggered major efforts to foster democratic transitions in
scores of countries, involving the promotion of free elections,
economic reform, civil society, good governance, and the rule of law.
In Central Europe and the Baltic countries, as well as in parts of
Latin America and East Asia, these efforts produced significant
results. But in the large majority of cases they came up against
ingrained legacies of authoritarian culture and practice. As many
transitions stalled, hopes for an inexorable forward movement toward
democracy gave way to the realization that democratization is a slow
and arduous process, subject to reversals, and that some variation of
semi-authoritarianism, more or less harsh, is likely to persist in many
former dictatorships for some time to come.
It is necessary to stay engaged in semi-authoritarian countries
such as Russia, Ukraine, Egypt, Pakistan, Kenya, Venezuela, and Morocco
whose success or failure will significantly affect the prospect for
democratic development in their respective regions. The challenge will
be to craft a comprehensive multi-sectoral response that seeks not just
the strengthening of civil society and independent media, but also
political parties that can build effective governing coalitions, as
well as business associations, trade unions, and policy institutes that
can mediate between the state and the market and effect real economic
reform.
In working to promote democratization in semi-authoritarian
countries, it is important to bear in mind the need to:
--Assist efforts to establish more neutral, independent, and
effective election administration and to assist civil society
organizations and the mass media in monitoring the conduct of
elections.
--Work to expand the constitutional, legal, and political space for
civil society, NGOs, and opposition political party
development.
--Establish linkages between civil society and political parties, and
also promote collaboration between them and independent media,
trade unions, business associations, and the grassroots
informal sector.
--Develop practical strategies with feasible objectives, focusing on
building up subcultures of democratic activism that try to
achieve incremental gains, but that can also provide leadership
if and when opportunities arise for more substantial
breakthroughs.
--Encourage cross-border assistance within regions as a way of
strengthening democratic cooperation and solidarity, sharing
relevant experiences, building on local momentum for change,
and promoting regional integration and the gradual enlargement
of democratic practice.
Consolidating new democracies.--In many countries, democratic
institutions have been established only recently and are still very
weak, and there is broad support within and outside the government in
favor of deepening democratic consolidation. In such emerging
democracies as Thailand, Mexico, Bulgaria, Ghana, or Bangladesh,
democracy cannot be taken for granted and backsliding is an ever-
present possibility. (One need only remember the complacency about
Venezuelan democracy just a decade ago.) It is important, therefore, to
reserve some resources for programs in such countries, even as
resources and energies are concentrated on countries where democracy is
less advanced. In doing so, it is necessary to pay close attention to
the problems of governance, working to make governments more
accountable and transparent in their functioning; generating,
supporting, and sharing innovative solutions to problems of
consolidation; increasing broad-based participation in the political
process; and strengthening the capacity and transparency of political
parties.
The consolidation of these emerging and vulnerable democracies is
especially important at a time when progress has stalled on so many
other fronts. Not only do models of successful transition help lift the
spirit of those trying to break out of semi-authoritarianism. They also
offer practical lessons in how to overcome the obstacles to making
democratic institutions effective. No one is more capable of
transmitting these lessons than the activists from newly consolidated
democracies. Their contribution to those still struggling against the
legacies of authoritarianism is one of the less appreciated by-products
of successful transitions.
Healing war-torn societies.--In many regions, the political
uncertainties unleashed by the end of the Cold War and the pressures of
globalization have led to the breakdown of old political structures and
to heightened religious and ethnic conflict. While the wars in the
Balkan region have attracted the most attention, many conflicts in such
countries as Somalia, Sudan, Democratic Republic of Congo, and
Afghanistan have been even more devastating.
Efforts by the international community to negotiate solutions to
such conflicts are generally limited to holding talks among leaders of
different ethnic, religious, or tribal factions. But peace agreements
will not last unless civil society is brought into the process and
becomes invested in negotiated solutions through an inclusive
democratic process. Including civil society groups also has the effect
of diluting the influence of some non-democratic people who control
armed factions and thus must be part of the talks.
In many of these situations, the NED has been able to provide
critically-needed support to groups in civil society that defend human
rights, educate about democracy, and provide training in conflict
resolution. Often they use innovative techniques, including popular
theater and concerts as well as traditional media, to build trust and
nurture a culture of tolerance. In effect they establish enclaves of
democratic values and inter-ethnic dialogue and become centers of
grassroots pressure for peace and reconciliation. They also help
marshal international support for democracy assistance and the defense
of human rights. If negotiations are started, they can then give voice
and representation to civil society in the process of establishing
peace. In a post-war setting, they can also help the process of healing
and offer an alternative model and vision of democratic social and
political organization.
aiding democracy in the muslim world
The Muslim world is a vast region that consists of more than one
billion people and stretches some 10,000 miles from Morocco to
Indonesia. It is an immensely diverse region politically, composed of
countries that fall into all of the categories listed above--from
dictatorships such as Iraq, Syria, Saudi Arabia, and Turkmenistan; to
semi-authoritarian countries like Pakistan, Egypt or Tunisia; to
electoral or emerging democracies such as Turkey, Mali, Indonesia, and
Bangladesh; to war-torn countries like Algeria, Sudan, Somalia, and
Afghanistan. Fully one-eighth of the world's Muslim population lives as
a minority in democratic India.
While recognizing this diversity, there are three principal reasons
for highlighting the importance of aiding democracy in the Muslim
world. First, there is a significant ``democracy gap'' between the
Muslim world as a whole and the rest of the world. Only 11 of the 47
countries with a Muslim majority (23 percent) have democratically
elected governments, as compared with 110 of the 145 non-Muslim
countries (76 percent); and none of the 16 Arab states is an electoral
democracy. [Footnote reference to the latest Freedom House Survey of
Freedom in the World] Second, it is also within the Muslim world that
democracy is under political and ideological challenge from Islamic
movements that preach intolerance and hatred. Such movements may not be
broadly representative of the population in the countries where they
exist, but their influence is considerable. Finally, since such
movements often resort to violence to achieve their ends, it is within
the Muslim world where the absence of democracy has provided fertile
soil for the growth of terrorism that targets the world's democracies.
The crisis precipitated by the attacks of September 11 and the new
war on terrorism have placed the issue of democracy in the Middle East
and in other non-democratic parts of the Muslim world on the agenda of
the international community. Before the present crisis, democracy was
often viewed as a Western system incompatible with Islamic culture and
doctrine. The fear that Islamic fundamentalists might take advantage of
democratic elections to impose a theocratic system, and the absence in
the Middle East of discernible pro-democracy movements, discouraged
efforts to support democratic development in authoritarian Muslim
countries, especially those ruled by regimes ostensibly committed to
protecting significant Western security and economic interests.
Not surprisingly, political repression has helped inflame religious
extremism by forcing dissent into the mosque. The rise of terrorism and
the widespread realization that such extremism is connected to the
failure of political institutions in many Muslim countries have led to
a growing recognition that efforts must be made to encourage political
and economic modernization in the Arab Middle East and elsewhere in the
Muslim world where it is lagging. Accompanying this new attitude is a
sharpened clash within Muslim countries themselves between Islamic
fundamentalists and moderate elements, both secular and religious,
which are prepared to challenge the attempt by extremists to seize
control of Muslim society and Islamic faith. For these moderates,
democratization has become a matter of sheer survival.
They face four inter-related challenges. The first is to liberalize
the political system, ending repression and human rights violations,
permitting freedom of expression and association, and introducing
genuine party contestation. The second is to modernize the state and
the economy, so that meaningful steps can be taken to reduce poverty,
ignorance, and inequality and to provide young people with opportunity
and hope. The third is to control corruption and establish a genuine
rule of law. And the fourth is to end the political abuse of religion
and to reconcile Islam--the framework in much of the Muslim world for
political and social activism--with modern concepts of pluralism,
citizenship, and individual rights.
sending a message
It cannot be emphasized too strongly that the precondition for
progress on any of these fronts is a new birth of will and
determination within the Middle East and other non-democratic parts of
the Muslim world to strive for human rights, free institutions, and
responsible, elected government. But having said that, it is also true
that international support can make a crucial difference. It is needed
from a practical standpoint, and it also sends the message that
democratic activists in Muslim countries are not alone.
The NED, with its multi-sectoral structure and the emphasis it has
always placed on encouraging democratic values and ideas, has the
capacity to provide help in all four areas. For example, NDI and IRI,
the NED's party institutes, work with moderate political leaders,
legislators, and parties in Muslim countries, seeking new openings to
improve party communications and outreach, to encourage women's
participation in politics, and to promote contacts and exchange among
Muslim parties and between them and the major international bodies
representing parties from around the world. CIPE, the NED's business
institute, promotes good governance and economic reform by
strengthening private voluntary business associations and think tanks
as advocates of open markets, legal and regulatory reform,
transparency, sound corporate governance, and a stronger role for women
in the economy. NED supports a wide array of grassroots organizations
in the Middle East that defend human rights, train women to become
leaders in politics and civil society, and promote civic education and
women's rights in the context of Islamic texts and traditions. ACILS,
the NED's labor institute, trains union organizers to defend the rights
of workers and the poor.
NED and its core institutes see the importance of involving in
their programs Muslims whose points of reference are within Islam and
who are also in favor of liberal democracy--as a way of strengthening
these elements and countering the political abuse of religion. NED
programs in many countries already involve such individuals, as do
regional and sub-regional programs. The efforts of such people can be
further assisted in the Middle East and, where appropriate, in parts of
Asia and Africa to strengthen their voice and influence; to promote a
public discourse on Islam and democratic politics; and to develop civic
education programs that provide a modernist treatment of the role of
Islam in public life.
It is also important that focus be given to the dissemination of
first-hand accounts and systematic analyses of life in Iran, Sudan, and
Afghanistan under the Taliban, the three contemporary examples of
theocratic dictatorships. Conversely, there are positive lessons to be
learned from the experiences of Turkey, Bangladesh, Mali, Senegal,
Bahrain and other contemporary examples of Muslim countries where
democratization has progressed. Where appropriate, efforts should be
made to include in these networks and discussions Muslims living in
Western Europe and North America, whose experience of democracy may
significantly influence Islamic political thought.
Expanding women's leadership training programs is critically
important for the promotion of democracy in Muslim countries.
Empowering women at the grassroots and promoting their enhanced
participation in the political and cultural life of Muslim societies
are preconditions for democratic progress. Programs are underway to
develop women's leadership capabilities in the Arab Middle East,
Africa, and Central Asia and, when feasible, in Iran and Afghanistan as
well. Various types of media can be employed to reach larger numbers of
women in Muslim countries.
democracy promotion: ``do's'' and ``don'ts''
Mr. Chairman, given the complexity of the task of promoting
democracy at a time when security interests are so pressing, it would
be understandable were the U.S. Government to prefer to let the
Endowment and its institutes carry the load in helping the non-
governmental side of efforts to promote democracy in particular
countries. Indeed, it may be a mistake to believe that in countries
such as Egypt, the U.S. Government can do an about-face and establish
itself as the democracy force or leading democracy advocate. It can,
however, use the tools of public diplomacy more effectively in order to
begin the slow process of confidence-building with those elements of
the society that are working peacefully toward a more democratic and
accountable society. In countries outside of the Arab world generally
more opportunities exist for government assistance to support civil
society actors.
Lawmakers and the Administration can ensure that funding for
democracy efforts is better targeted. More is not always better,
especially if it is delivered through inappropriate mechanisms. If the
goal of funding is to provide support to nascent pro-democratic civil
society or non-governmental organizations, the amounts allocated and
the mechanisms for providing the support should be defined by
``market'' forces on the ground. Too often, funding is set at a given
level to make a point about how much democracy is being assisted, but
then it is funneled through expensive contractors in the direction of
any and all local NGOs, or under the control of an undemocratic local
government. When democracy forces on the ground see such reckless
spending allegedly for their benefit, but in reality it is working
against their interests, they naturally become cynical.
It is often in this context that many of the following problems
arise in the provision of democracy assistance to civil society:
--the kinds of NGOs supported are ``top down,'' elitist, often
internally undemocratic, and based in the capital city, with
weak roots in society and faint connection to real societal
interests
--Western donors impose their own goals and agendas on civil society
recipients -the organizations funded are unsustainable without
continued aid
--aid has focused too heavily on NGOs at the expense of other actors
in civil society -aid often attracts human talent and energy
away from more authentic institutions into aid-inspired
organizations that pay higher salaries.
Finally, it should be emphasized that there is no one way to help
democracy take root in countries that may have no democratic tradition
or memory. Supporting democracy is not just a matter of putting into
place democratic processes. It requires nurturing within government and
society democratic values, or a democratic ethos. In some places, we
may need to emphasize the process and institutional reform aspects of
democracy-building, but we must never overlook the fact that widespread
anti-democratic attitudes can stymie or reverse democratic progress. It
is critical that we understand that countries in which some
institutional reform has occurred, including periodic elections, may
not move in a truly democratic direction without assistance in
developing democratic culture.
Mr. Chairman and members of the subcommittee, it is your continued
support, as well as that of so many other members of this body, that
enables us to assist countless democrats in every region who are
working to make this a more peaceful world. On our behalf and theirs,
let me express our deepest appreciation.
______
Prepared Statement of the Temple University Beasley School of Law
It is a great pleasure to have an opportunity to convey our sincere
gratitude to you and the members of this Committee for your support for
Temple Law School's rule of law programs in China. We are proud that
our projects are contributing to the establishment of the rule of law
in China, and we welcome this chance to brief you on what we have
accomplished so far and what, with your continued help, we intend to
do.
As you know, President Bush recently returned from a visit to
China, where he spoke on the campus of our Chinese partner institution,
Tsinghua University. Tsinghua University is the ideal partner as it is
a forward looking university with a tradition of educating many of
China's leaders, including Zhu Rongji, the current premier, and Hu
Jiangto, the expected next President of China. Our other partners in
this project are New York University, Brigham Young University, the
State Agency for Foreign Experts Administration (SAFEA) of the PRC, and
the Supreme Peoples Court and its National Judicial College. We were
invited into China by the government because of Temple's history of
educational involvement in China (Temple was the only American
university to award an honorary degree to Deng Xiaoping during his 1979
state visit to the United States) and because the Chinese government
was aware of and impressed by a similar innovative program that Temple
has conducted in Japan since 1994. We know that a major factor in our
success is the trusting working relationship we have developed with our
Chinese partners.
The rule of law is necessary condition for a functioning democracy.
Democracy and the protection of individual rights cannot be realized
without a transparent, rules-based system that applies to all,
including the government. The rule of law itself cannot operate without
a judiciary that is well-educated in the law, honest and independent.
Another prerequisite is legislators and regulators who are
knowledgeable about how law operates in a democratic society with a
market economy. All of these elements are essential to the protection
of individual rights. When fulfilled in China, these requirements will
hopefully result in a legal system suitable to the needs of the Chinese
people and compatible with international legal norms and standards. The
extent to which this occurs will be decided by the Chinese nation. We
are proud to provide educational programs, advice and assistance
towards these ends.
Temple's rule of law program in China started with a Masters of Law
(LL.M.) program. This is the first foreign law degree-granting program
in the history of China. Our students have included national and
provincial level judges, ministry officials, legislative branch
officials, law professors and minority students from Western China. The
original curriculum focused primarily upon business subjects but also
included courses in American constitutional law and professional
responsibility. As importantly, by using the American case study
method, the students, including of course the Chinese judges and
ministry officials, were immersed in appellate decisions that
inherently exposed them to fundamental concepts of due process and
equal protection, including the resolution of disputes through an
independent judiciary, the supremacy of law and the submission of
contested governmental actions to enforceable judicial review. Today,
the Masters of Law program also offers courses in labor and employment
law, environmental law, trial advocacy and criminal procedure. As noted
below, with the support of this Committee, we have expanded the LL.M.
program and instituted additional short-term non-degree judicial
training programs. We have also undertaken a host of supporting
activities as requested by China's Supreme Judicial Court and the
National Peoples Congress. All of these activities now accrue as
integrated parts of Temple's Business and Comparative Law Center (BCLC)
which are more fully described below.
With the development of a market economy and entry into the World
Trade Organization, our Chinese partners fully understand the necessity
of developing a credible legal system. Many new laws have been passed
that could not have been imagined before, including, for example, a new
contracts law. Our Chinese partners also appear committed to making
major necessary reforms in the country's judicial system. Last year,
the National Peoples Congress passed a law requiring all new judges to
be legally-educated and members of the bar. The Supreme Peoples Court
has issued new directives on the enforceability of arbitration awards
and is creating a new economics court division. Currently, the Supreme
Court is drafting a code of judicial ethics; and the National Peoples
Congress is considering the enactment of a law governing real and
personal property rights. At the request of our Chinese partners, we
are honored to provide assistance on both of these projects.
The Business and Comparative Law Center.--The BCLC consists of
several concurrent projects that share the goal of working
cooperatively with key Chinese legal institutions to strengthen the
rule of law in China. This includes degree and non-degree educational
programs for Chinese judges and legal officials; collaborative
consultation on specific law reform projects; and providing assistance
to the Chinese government in meeting its membership obligations for
membership in the World Trade Organization.
The BCLC also assists the Chinese government in developing
transparent and well-considered laws. China is undergoing a major law
reform effort as it becomes a member of the WTO, and we know that China
is receptive to receiving input from experts from the United States and
other nations in this process. Our work in China has provided us with
crucial contacts in the Chinese legal agencies and a high degree of
credibility.
I am pleased to report that all of these projects are proceeding on
schedule and as we had hoped.
education of chinese judges and other chinese officials
Judicial Training Program
Our faculty and administration has developed a close working
relationship with the Supreme Peoples Court and the National Judicial
College.
Our judicial training programs take several forms:
--Short Term Seminars
--An intensive Legal English Training program in Spring, 2002
--A month-long intensive judicial training program in the U.S. in
July, 2002
--L.L.M degree programs at the Temple/Tsinghua Program and U.S. Law
Schools
Brigham Young University is designing an intensive legal English
program to train a pool of approximately 60 members of the Supreme
Peoples Court selected by Temple from applicants proposed by the court.
The goal is to bring the judges to a level of English language
proficiency, which will allow them to use English language legal
resources for study and to access these resources after they complete
their training. From this pool of judges, Temple will select candidates
to attend the summer judicial training program in New York as well as
LL.M. degree candidates for Temple's Beijing and Philadelphia-based
LL.M. programs. This course is on schedule to begin in late spring,
2002 and is projected to run until July 15, 2002.
N.Y.U's Institute of Judicial Training has been actively involved
in setting up a four-week training program that is on schedule to begin
on July 22, 2002.
Temple's LL.M degree program in Beijing is currently training eight
members of the Chinese judiciary and, as mentioned above, we are
already involved in the planning for a legal English program which will
provide us with a pool of qualified candidates for the Temple/Tsinghua
LL.M. program in Beijing as well as Temple's LL.M program in
Philadelphia.
The Temple Masters of Law Program
Temple's two-year LL.M. program in Beijing, which teaches United
States and international law, began in 1999. The program currently has
a class of 32 students, including eight judges, three Tibetan lawyers,
four law professors and nine Chinese government officials, including
the Division Chief of the NPC Legislative Affairs Commission, and staff
attorneys from the China Regulatory Securities Commission, NPC
Committee on Internal and Judicial Affairs and the Ministry of Foreign
Trade and Economics.
Our curriculum includes courses on Constitutional law, Labor and
Employment law, Criminal Procedure and Trial Advocacy, International
Environmental Law and Business and Commercial law.
Our Criminal Procedure and Trial Advocacy course was specially
designed by Temple Professors Edward Ohlbaum, one of the leading
experts in advocacy law in the United States, and Associate Dean and
Professor of Law JoAnne Epps, an expert in criminal law and procedure.
Professors Epps and Ohlbaum, are in Beijing at this moment teaching
this course to our Chinese students.
Professor Michael Wishnie of New York University Law School is
teaching U.S. Labor and Employment law. This course if of great
importance for a country such as China with a developing market
economy.
All of our programs are taught in English because English is the
international language of law, business and the Internet. We select
students with sufficient English language ability and invest
significant resources to bring their language ability to the level at
which they can study directly from primary U.S. and international
source materials. We believe that an important aspect of the program is
not only to impart information about the current state of legal
thinking on the international level, but also to provide as many
influential legal professionals as possible with the capacity to
continue to interact with the international legal community long after
they have completed their formal training.
Our LL.M. students study in English and have access to a computer
lab. They are required to do assignments using computers and legal
research. We believe this is a crucial element of the program as it
gives our graduates long-term access to international legal materials
as they develop long after they graduate.
business and comparative law forums and working groups
One of the major goals of the Business and Comparative Law Center
is to create working groups consisting of American scholars, attorneys,
judges and business people who will provide technical assistance on a
mid-to-long term basis to Chinese legislators, regulators, scholars and
judges as they develop China's legal infrastructure to accommodate
China's emerging market economy. The working groups will concentrate on
selected developing legal issues of particular importance to the reform
of the Chinese legal system.
Temple has been meeting with Chinese academics, government
officials and business people to ascertain the areas in which such
working groups might be well received and fruitful and are quite
pleased with our efforts and the results to date.
--Temple, Tsinghua and FADA Universities and the China Society of
Comparative Law (CSCL) are jointly forming a Working/Study
Group under the leadership of Professor Jiang Ping, FADA
professor and Chair of CSCL, and the leading scholar of civil
and commercial law in China. Professor Jiang has been
designated the key drafter of the new Chinese property law by
the National Peoples Congress. The most important goal of the
group is to provide support through research, exchange of
academic visits, seminars and counseling in the various areas
of property law. We will also create a listserve so that the
discussions can continue uninterrupted.
The first session of the working group will take place June 17-
18, 2002, in Beijing.
--From July 8 to August 9, 2002, eight prominent Chinese WTO scholars
will be in residence at Temple Law School where they will
pursue research on WTO issues facing China. This working group,
chaired by Temple Professor Jeffrey Dunoff, will include
meetings with key American WTO scholars for discussion and
professional exchanges that we expect to continue beyond these
meetings.
--Professor Amelia Boss was invited to lecture at Tsinghua University
on electronic commerce in November 2001, by Vice Dean Wang
Zhemin. While in China, Professor Boss discussed the possible
formation of a working group on the subject of electronic
commerce.
--Professor Scott Burris visited Beijing in December, 2001, with the
purpose of discussing the creation of a working group on health
law and policy. At present, Chinese legal scholarship has not
progressed to the point where they have even begun to consider
this topic despite its importance to an emerging market
economy. Regulatory and legal structures in this area are
absent or deficient. Professor Burris' visit resulted in two
promising initiatives--a Health Law Working Group incorporating
faculty at Tsinghua, Temple, the Union School of Public Health
/Chinese Academy of Preventive Medicine and other institutions;
and a plan to assist the Chinese Academy of Preventive Medicine
in the development of a new institute on Health Law and Policy
to be housed in the Chinese Centers for Disease Control and
Prevention, a new governmental agency now being organized.
assisting chinese government and legal officials with wto compliance
In addition to our overarching goal of fostering the rule of law in
the PRC, an important goal of the BCLC is to assist the Chinese
government with WTO compliance issues. We are pleased to report that we
have already made a great deal of progress with respect to this goal.
The projects listed below are in addition to the WTO working group
described in the preceding section.
--On December 9-10, 2001, Professor Jeffrey Dunoff, an expert in WTO
matters, presented a two-day seminar on WTO compliance issues
to 91 Chinese judges at the invitation of the National Judicial
College of the Supreme People's Court in Beijing, China. The
lectures were very well received, with the vast majority of the
judges giving the presentation a grade of 90 percent or better.
--On December 11, 2001, Professor Dunoff gave a two-hour lecture on
WTO law to students and faculty at FADA.
--On December 12, 2001, Professor Dunoff gave a lecture to
approximately 25 students and faculty at Tsinghua University
School of Law on WTO entitled ``Beyond Doha: The Future of the
Trade Regime.'' He provided all attendees with copies of three
law review articles he had written in the area.
--Professor Dunoff has been invited by Yuan Jie, the Division Chief
of the National Peoples Congress Legislative Division to
address the members of her department on WTO issues. Yuan Jie
is currently a student in the Temple-FADA LL.M degree program.
Professor Dunoff has also been invited to return to the
National Judicial College for additional lectures on WTO
topics.
--Professor Zhang Mo, the director of the BCLC, has spearheaded the
discussions with the Supreme Peoples' Court. In these
discussions the Court has asked that Temple emphasize WTO
issues in the judicial training programs it provides for the
next five years.
The above described activities of Temple's BCLC are a modest but
encouraging beginning. Much remains to be done. Programs like
Temple's BCLC should be replicated throughout China. Additional
programs aimed specifically at provincial level judges and
regulators should be undertaken. Hopefully, a program to allow
American JD students to study in China for a semester will also
emerge. With the support of this Committee, these and other
innovative rule of law programs can and will flourish in China.
Again, my profound thanks to the Committee for its support of what
Temple is doing in China and for your understanding of its importance.
LIST OF WITNESSES, COMMUNICATIONS, AND PREPARED STATEMENTS
----------
Page
Bennett, Hon. Robert F., U.S. Senator from Utah, opening
statement...................................................... 107
Craner, Hon. Lorne W., Assistant Secretary, Bureau for Democracy,
Human Rights and Labor, Department of State.................... 72
Prepared statement........................................... 74
Durbin, Hon. Richard J., U.S. Senator from Illinois, questions
submitted by................................................... 121
Harkin, Hon. Tom, U.S. Senator from Iowa, questions submitted by. 47
Johnson, Hon. Tim, U.S. Senator from South Dakota:
Prepared statement........................................... 7
Questions submitted by....................................... 51
Landrieu, Hon. Mary L., U.S. Senator from Louisiana, opening
statement...................................................... 8
Leahy, Hon. Patrick J., U.S. Senator from Vermont:
Opening statements...................................1, 61, 97, 127
Prepared statements..................................4, 63, 99, 129
Questions submitted by.............................37, 82, 117, 177
McConnell, Hon. Mitch, U.S. Senator from Kentucky:
Opening statements..........................................64, 131
Prepared statements......................................6, 99, 133
Questions submitted by.............................52, 83, 123, 187
National:
Democratic Institute for International Affairs, prepared
statement.................................................. 197
Endowment for Democracy, prepared statement.................. 200
Natsios, Hon. Andrew S., Administrator, Agency for International
Development.................................................... 1
Prepared statement........................................... 16
Summary statement............................................ 9
O'Neill, Hon. Paul H., Secretary of the Treasury, Office of the
Secretary, Department of the Treasury.......................... 97
Prepared statement........................................... 101
Summary statement............................................ 99
Powell, Hon. Colin L., Secretary of State, Office of the
Secretary, Department of State................................. 127
Prepared statement........................................... 140
Summary statement............................................ 134
Reed, Hon. Jack, U.S. Senator from Rhode Island, opening
statement...................................................... 109
Temple University Beasley School of Law, prepared statement...... 206
Winter, Hon. Roger P., Assistant Administrator for Democracy,
Conflict and Humanitarian Assistance, Agency for International
Development.................................................... 61
Prepared statement........................................... 67
Summary statement............................................ 65
SUBJECT INDEX
----------
AGENCY FOR INTERNATIONAL DEVELOPMENT
Additional committee questions...................................37, 82
Agressiveness and creativity, lack of............................ 89
Armenia, American University of.................................. 55
Democracy programs:
Definition of................................................84, 87
USAID management of.......................................... 85
Basic education..................................................40, 50
Biodiversity..................................................... 45
Budget:
Breakdown.................................................... 86
Request format............................................... 42
Child labor...................................................... 48
Colombia, alternative development programs in.................... 44
Democracy assistance to topple regimes........................... 88
Development assistance........................................... 39
Disaster assistance.............................................. 42
Family planning.................................................. 42
Free and independent media, establishment of a................... 57
Global Health Programs........................................... 40
Grants and contracts, comparison of.............................. 89
Great lakes and justice initiative............................... 43
Labor............................................................ 47
Local Democracy and Human Rights Organizations, funding for...... 88
Management and organization, changing to meet the challenge...... 19
New freedom initiative........................................... 49
Operation day's work............................................. 50
Political party development:
Role of...................................................... 87
Viewed as ``too risky''...................................... 87
Regional initiatives............................................. 18
State--USAID Coordination........................................ 82
Trafficking and slavery.......................................... 48
Tropical forest debt relief...................................... 43
University programs..............................................44, 49
USAID:
Afghanistan reconstruction................................... 51
Burma........................................................ 59
Cambodia..................................................... 58
Central Asia:
Assistance............................................... 41
Regional stategy......................................... 41
Colombia/Andean regional initiative.......................... 59
Compliance with Section 636(I) of the Foreign Assistance Act. 37
Contracting practices........................................ 39
Egypt........................................................ 54
Funding breakdown............................................ 85
HIV/AIDS strategy............................................ 51
Nagorno-Karabakh:
Activities that foster regional stability................ 56
Rate of implementation................................... 55
Utilization of humanitarian organizations like CRS....... 56
Office of transition initiatives............................. 60
Pakistan..................................................... 51
Russia assistance............................................ 45
South Asia/Afghanistan....................................... 57
Staff expertise, level of.................................... 89
Successes and failures.......................................38, 39
West bank and Gaza...............................................44, 52
Zimbabwe......................................................... 86
DEPARTMENT OF STATE
Office of the Secretary
Additional committee questions................................... 177
Afghanistan...............................................152, 181, 192
Andean Counterdrug Initiative.................................... 150
Angola.........................................................174, 181
Armenia.......................................................... 188
Burma............................................................ 189
Cambodia......................................................... 192
Caucasus......................................................... 157
Central Asia..................................................... 163
Colombia..................................................164, 172, 191
Human rights................................................. 179
Plan Colombia assets......................................... 190
Eastern Europe, assistance for................................... 183
Education........................................................ 185
Egypt............................................................ 175
Fiscal year 2003 budget request:
Assistance for the Former Soviet Union....................... 183
Peacekeeping................................................. 182
Foreign aid:
Effectiveness of............................................. 175
Funding--Millennium Fund..................................... 178
Global Health and HIV/AIDS....................................... 151
HIV/AIDS......................................................... 161
International criminal court..................................... 177
Israel........................................................... 187
Kidnapped children overseas...................................... 173
Landmines........................................................ 173
MDB arrears...................................................... 151
Middle East..........................................154, 159, 168, 171
Current...................................................... 180
Economic Initiative.......................................... 192
Settlements.................................................. 181
Millennium challenge account..................................... 193
Nepal............................................................ 192
North Korea...................................................... 165
President Aliyev's health........................................ 188
Russia.........................................................164, 176
Terrorism, war on................................................ 150
The Peace Corps.................................................. 151
Turkey........................................................... 188
U.S. foreign assistance, effectiveness of........................ 166
Ukraine.......................................................... 189
Western hemisphere, anti-narcotics efforts in.................... 170
Yugoslavia cooperation........................................... 187
DEPARTMENT OF THE TREASURY
Office of the Secretary
Additional committee questions................................... 117
Afghanistan...................................................... 120
Budget:
Foreign assistance........................................... 123
Global environment facility.................................. 119
Priorities................................................... 118
China............................................................ 126
Conditionality................................................... 117
Debt relief/poverty reduction.................................... 124
Development, HIV/AIDS, and results-based aid..................... 122
Foreign aid linkages............................................. 124
Grants versus loans.............................................. 125
Legislative mandates............................................. 103
MDB growth agenda................................................ 102
Monterrey Conference on financing for development................ 117
Poverty, tools for measuring..................................... 122
Request, fiscal year 2003........................................ 102
Terrorist financing.............................................. 125
Tropical forest debt relief...................................... 121
User fees........................................................ 123
World Bank:
Management................................................... 120
Report....................................................... 119
-