[House Hearing, 111 Congress]
[From the U.S. Government Publishing Office]


 
                     U.S. POLICIES AND PROGRAMS FOR
                   GLOBAL DEVELOPMENT: USAID AND THE
                    FISCAL YEAR 2011 BUDGET REQUEST

=======================================================================


                                HEARING

                               BEFORE THE

                      COMMITTEE ON FOREIGN AFFAIRS
                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED ELEVENTH CONGRESS

                             SECOND SESSION

                               __________

                             MARCH 3, 2010

                               __________

                           Serial No. 111-83

                               __________

        Printed for the use of the Committee on Foreign Affairs


 Available via the World Wide Web: http://www.foreignaffairs.house.gov/

                                 ______



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                      COMMITTEE ON FOREIGN AFFAIRS

                 HOWARD L. BERMAN, California, Chairman
GARY L. ACKERMAN, New York           ILEANA ROS-LEHTINEN, Florida
ENI F.H. FALEOMAVAEGA, American      CHRISTOPHER H. SMITH, New Jersey
    Samoa                            DAN BURTON, Indiana
DONALD M. PAYNE, New Jersey          ELTON GALLEGLY, California
BRAD SHERMAN, California             DANA ROHRABACHER, California
ELIOT L. ENGEL, New York             DONALD A. MANZULLO, Illinois
BILL DELAHUNT, Massachusetts         EDWARD R. ROYCE, California
GREGORY W. MEEKS, New York           RON PAUL, Texas
DIANE E. WATSON, California          JEFF FLAKE, Arizona
RUSS CARNAHAN, Missouri              MIKE PENCE, Indiana
ALBIO SIRES, New Jersey              JOE WILSON, South Carolina
GERALD E. CONNOLLY, Virginia         JOHN BOOZMAN, Arkansas
MICHAEL E. McMAHON, New York         J. GRESHAM BARRETT, South Carolina
JOHN S. TANNER, Tennessee            CONNIE MACK, Florida
GENE GREEN, Texas                    JEFF FORTENBERRY, Nebraska
LYNN WOOLSEY, California             MICHAEL T. McCAUL, Texas
SHEILA JACKSON LEE, Texas            TED POE, Texas
BARBARA LEE, California              BOB INGLIS, South Carolina
SHELLEY BERKLEY, Nevada              GUS BILIRAKIS, Florida
JOSEPH CROWLEY, New York
MIKE ROSS, Arkansas
BRAD MILLER, North Carolina
DAVID SCOTT, Georgia
JIM COSTA, California
KEITH ELLISON, Minnesota
GABRIELLE GIFFORDS, Arizona
RON KLEIN, Florida
VACANTWexler leaves 1/4/
    10 deg.
                   Richard J. Kessler, Staff Director
           Yleem Poblete, Republican Staff Director
         Jasmeet Ahuja, Professional Staff Member deg.
       David Fite, Senior Professional Staff Member deg.
          Jessica Lee, Professional Staff Member deg.
     Alan Makovsky, Senior Professional Staff Member deg.
   Pearl Alice Marsh, Senior Professional Staff Member deg.
     Peter Quilter, Senior Professional Staff Member deg.
      Edmund Rice, Senior Professional Staff Member deg.
      Daniel Silverberg, Senior Deputy Chief Counsel deg.
         Amanda Sloat, Professional Staff Member deg.
           Kristin Wells, Deputy Chief Counsel deg.
              Shanna Winters, Chief Counsel deg.
             Brent Woolfork, Professional Staff Member deg.
        Diana Ohlbaum, Senior Professional Staff Member
      Laura Rush, Professional Staff Member/Security Officer deg.
   Genell Brown, Senior Staff Associate/Hearing Coordinator
                     Riley Moore, Deputy Clerk deg.


                            C O N T E N T S

                              ----------                              
                                                                   Page

                                WITNESS

The Honorable Rajiv Shah, Administrator, United States Agency for 
  International Development......................................     4

          LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING

The Honorable Rajiv Shah: Prepared statement.....................     8
The Honorable Keith Ellison, a Representative in Congress from 
  the State of Minnesota: Associated Press article by Katharine 
  Houreld dated February 17, 2010................................    34

                                APPENDIX

Hearing notice...................................................    44
Hearing minutes..................................................    45
The Honorable Howard L. Berman, a Representative in Congress from 
  the State of California, and Chairman, Committee on Foreign 
  Affairs: Prepared statement....................................    47
The Honorable Diane E. Watson, a Representative in Congress from 
  the State of California: Prepared statement....................    49
Written responses from the Honorable Keith Ellison to questions 
  submitted for the record by:
  The Honorable Eliot L. Engel, a Representative in Congress from 
    the State of New York........................................    50
  The Honorable Ileana Ros-Lehtinen, a Representative in Congress 
    from the State of Florida....................................    61
  The Honorable Barbara Lee, a Representative in Congress from 
    the State of California......................................   165
  The Honorable Gus Bilirakis, a Representative in Congress from 
    the State of Florida.........................................   179


U.S. POLICIES AND PROGRAMS FOR GLOBAL DEVELOPMENT: USAID AND THE FISCAL 
                        YEAR 2011 BUDGET REQUEST

                              ----------                              


                        WEDNESDAY, MARCH 3, 2010

                  House of Representatives,
                              Committee on Foreign Affairs,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 9 o'clock a.m. in 
room 2172, Rayburn House Office Building, Hon. Howard L. Berman 
(chairman of the committee) presiding.
    Chairman Berman. The committee will come to order. We have 
to adjourn today's hearing shortly before 11 o'clock a.m. so 
members can attend the memorial service for our late colleague, 
John Murtha.
    Given the relatively short time we have to spend with our 
distinguished witness, I will limit opening statements to 
myself and the ranking member. All other members may submit 
written statements for the record.
    Dr. Shah, I am very pleased to welcome you for your first 
formal appearance before this committee and your first time 
testifying before the  deg.Congress as USAID 
administrator.
    Less than 2 weeks after being sworn in, you were made the 
Obama administration's point person in responding to the almost 
unimaginable tragedy in Haiti. Dealing with a crisis of that 
magnitude would be a tall order no matter how long you had 
served as administrator, and by all accounts you stepped up to 
the task with great aptitude and aplomb.
    Prior to your confirmation, USAID had been without a 
permanent administrator for an extended period, so we 
particularly appreciate the leadership you have demonstrated 
and the experience and dynamism you bring to the job.
    Our focus today is on the President's Fiscal Year 2011 
budget request, and specifically the policies and programs for 
development that USAID is responsible for designing and 
implementing.
    Secretary Clinton has rightfully identified diplomacy and 
development as two key pillars of our national security, along 
with defense. We make it a priority to reduce poverty and 
alleviate human suffering around the world because it is the 
morally right thing to do and because it reflects the 
compassion and generosity of the American people. But foreign 
assistance programs also serve our economic and national 
security interests.
    Poor and unstable countries make unreliable trading 
partners and offer weak markets for U.S. goods and services. 
Conflict, lawlessness and extremism that threaten U.S. 
interests find fertile ground in the places where basic human 
needs are not being met and fundamental human rights are not 
respected. Done right, development assistance is a sound 
investment in a better, safer world.
    One of my legislative priorities is to reform our foreign 
assistance laws and programs to ensure that aid reaches those 
who need it most, and that it is delivered with maximum 
effectiveness and efficiency. Our development assistance should 
aim not only to improve the lives of poor people, but to build 
the human capacity and the economic and political institutions 
that will sustain these gains.
    I look forward to working with you as we write legislation 
to replace the outdated and cumbersome legal structure that 
currently exists with one designated to meet the needs of the 
21st century.
    The administration is now in the midst of two reviews that 
will have some bearing on this process. The Quadrennial 
Diplomacy and Development Review, or QDDR, seeks to define the 
capabilities that are needed and to match resources with 
priorities. The Presidential Study Directive known as PSD-7 
will, we hope, produce a national strategy for global 
development that establishes clear and specific objectives for 
United States policies and programs, consistent with the 
Millennium Development Goals.
    We should strive to achieve those goals not only in 
countries where the risk of violent extremism is most 
pronounced, but everywhere that children go hungry, women die 
in childbirth for lack of skilled assistance, and communities 
are ravaged by a preventable disease.
    I am particularly gratified that the President's budget 
places an emphasis on global health, food security and climate 
change. These are areas where the international community faces 
significant challenges, and where we know how to make a real 
difference. They build on one of the great foreign policy 
legacies of the previous administration, the President's 
Emergency Plan for AIDS Relief, or PEPFAR.
    To ensure that our assistance is as effective as possible, 
we must elevate and strengthen USAID. I applaud Secretary 
Clinton's call to ``rebuild USAID into the world's premiere 
development agency.'' We also must make good on President 
Bush's pledge to double the size of the USAID Foreign Service, 
a goal that President Obama has also endorsed.
    To put the budget numbers in perspective, the entire 
International Affairs budget accounts for just over 1 percent 
of Federal spending. And only about a third of that 1 percent 
is allocated to development and humanitarian programs.
    One overarching goal of our foreign assistance is to reduce 
the need for putting American soldiers in harm's way. About 18 
percent of the entire International Affairs budget--and about 
60 percent of the growth since last year--is for the front-line 
states of Iraq, Afghanistan and Pakistan. By building schools, 
training police and increasing agricultural production, we help 
lay the foundations for a more stable future in these volatile 
nations. It is an investment well worth making, considering the 
savings in long-term costs in American blood and treasure.
    With this in mind, the increases for Fiscal Year 2011 are 
quite modest and, I think, extremely well-justified.
    Dr. Shah, we appreciate having you here this morning. We 
look forward to your testimony. But first I would like to turn 
to the ranking member, Ileana Ros-Lehtinen, for any opening 
remarks that she might want to make.
    Ms. Ros-Lehtinen. Thank you. As always, Mr. Chairman, thank 
you for the opportunity. And Dr. Shah, I join in welcoming you 
to our Foreign Affairs Committee. With the recent tragedy in 
Haiti and the intensive, rapid efforts to help the people of 
that devastated country, you have had a bracing introduction to 
your current position. And as I had said to you in the side 
room, you represented our humanitarian country so well, and I 
commend you for an exemplary USAID mission in Haiti. You hit 
the ground running. We wish you well in all of your endeavors 
on behalf of our nation, and those whom it seeks to help 
throughout the world.
    I am, however, disappointed that the congressional Budget 
Justification for your Agency is not yet available. That places 
us at a disadvantage today in discussing the Fiscal Year 2011 
budget request for USAID, because we lack that information.
    Necessity is the mother of invention. The past year has 
seen a dramatic deterioration in our nation's economic 
position. Should the President's proposed budget for Fiscal 
Year 2011 be adopted without any changes, the debt created in 
the next year alone will equal an additional $4,000.00 owed by 
every man, woman, and child in the United States. This would be 
on top of the $40,000 that each American already effectively 
owes, through the public debt.
    We are now borrowing at a rate of about $4 billion a day to 
keep our Government in operation. This is not the best position 
for our country to be in.
    In light of this situation, I recommended to Secretary 
Clinton last week that, although our aid programs are not a 
major part of the overall budget, we need to find places where 
we can slow down or freeze spending. We have this opportunity 
to foster innovation, and I believe that the seeds for this 
innovation are already contained in some of USAID's programs. 
They just need to be expanded to allow us to move away from 
more costly assistance programs that work through wasteful, and 
often corrupt, bureaucracies abroad, and that so often create 
dependency and breed stagnation among recipient countries.
    Instead of continuing with such tremendous reliance on 
USAID's traditional Development Assistance account, for 
example, we might instead consider moving quickly to expand our 
Development Credit Assistance program, which, at far less cost, 
leverages tremendous private funding in pursuit of our 
development goals. In line with that, we might also consider 
expanding USAID's Global Development Alliances program, an 
approach that is, once again, built on leveraging private funds 
and pursuing development goals without creating aid dependency 
in other countries.
    In short, we have to do more with less. There are 
additional innovations out there, many of them based on 
technological advances of the past two decades, which USAID is 
either already experimenting with or should consider. I will 
cite some examples.
    Improvements in marketing by small-scale farmers and shop 
owners in impoverished countries by means of cell phone alerts. 
The development also of affordable, small-scale clean-energy 
power generators that can be run off the electrical grid in 
remote areas. Also, small-scale vouchers for farmers, allowing 
them to break free from the control by huge bureaucratic and 
often corrupt ministries in obtaining seed and other farm 
inputs.
    USAID is working in many of these areas, but we need to 
think of how we can intensify the focus on such small-scale 
programs, which can unleash individuals' creativity, rather 
than continuing to interact with unaccountable bureaucratic 
government agencies abroad.
    We should also consider ways to multiply the impact of such 
small-scale programs wherever possible, by implementing the 
approach used in our micro-finance and micro-credit programs, 
where even the poorest beneficiaries are expected to repay some 
of their assistance to cooperative groups that can then, in 
turn, provide such assistance to others. Small businesses and 
individual opportunities are what helped America grow into the 
prosperous country that we are, long before there was a theory 
of development. It is time to revisit our longstanding views 
and theories on how to help the impoverished around the world 
become self-sustaining and prosperous.
    I hope that the challenges of addressing our fiscal 
deterioration here at home will lead us to truly explore ways 
to be more efficient and accomplish our goals at less cost, but 
with more benefit for those who deserve our help.
    I thank you again, Dr. Shah, for what you have done in 
Haiti. I know that you are already standing up a new program in 
Chile, in far different circumstances. I congratulate your 
entire team at USAID.
    Thank you, Mr. Chairman.
    Chairman Berman. Thank you, Ms. Ros-Lehtinen. And now I am 
happy to introduce Dr. Rajiv Shah. He is the 16th administrator 
of the United States Agency for International Development.
    Prior to his confirmation as administrator, he served for 
about 6 months as under secretary of agriculture for Research, 
Education, and Economics, and chief scientist.
    A medical doctor and health economist by training, Dr. Shah 
previously spent 7 years with the Gates Foundation holding 
leadership positions in its agricultural development and global 
health programs.
    Dr. Shah, your entire statement will be made a part of the 
record, and we look forward to hearing your testimony.

 STATEMENT OF THE HONORABLE RAJIV SHAH, ADMINISTRATOR, UNITED 
          STATES AGENCY FOR INTERNATIONAL DEVELOPMENT

    Dr. Shah. Thank you. Chairman Berman, Ranking Member Ros-
Lehtinen, members of the committee, I am honored to join you 
here today in support of the President's Fiscal Year 2011 
Foreign Operations Budget Request.
    In the interest of time, please allow me to summarize the 
key points of my testimony, and submit the full text for the 
record.
    As you know, just days after my swearing-in, the people of 
Haiti were struck by a tragedy of almost unimaginable 
proportions. This past weekend, Chile suffered a devastating 
earthquake, as well. Our thoughts and prayers, as are yours, 
are with the people of Chile and Haiti, as we provide 
humanitarian relief and assistance.
    In the aftermath of the earthquake in Haiti, President 
Obama designated me to lead our overall Federal response, and 
charged our Government with mounting a swift, aggressive, and 
coordinated effort. In that capacity USAID coordinated a multi-
agency effort, with the Departments of State, Defense, Homeland 
Security, Health and Human Services, Agriculture, and many 
other Federal partners.
    With these partners we launched the largest and most 
successful international urban search-and-rescue effort ever; 
created a robust urban food distribution system that reached 
more than 3 million individuals with critical food supplies; 
greatly increased a nation's infrastructure, especially at the 
ports and the airport; and coordinated medical assistance 
support, including direct treatment for more than 30,000 
patients, and performed hundreds of surgeries, saving lives and 
limbs.
    Haiti faces a long and steep road to recovery. And as the 
operations transition from rescue to recovery, we will continue 
to stand by the people of Haiti, and appreciate the support of 
this committee and the Congress in doing so.
    At the same time, we will not lose sight of the other 
priorities, including the important work that USAID does to 
help other countries achieve their development goals, and the 
critical need to strengthen our capacity and accountability in 
pursuit of this mission. The investments we make today are a 
bulwark against current and future threats, both seen and 
unseen, and a down payment for future peace and prosperity 
around the world.
    As President Obama said in Oslo last December, security 
does not exist when people do not have access to enough food or 
clean water, or the medicine and shelter they need to survive.
    Secretary Clinton strongly shares this view, and has asked 
us to elevate development to stand with diplomacy and defense 
as part of our nation's foreign policy.
    Together with other government agencies, USAID is examining 
our resources and capabilities to determine how best to achieve 
these development objectives. We are doing so through the 
Presidential Study Directive on U.S. Development Policy, the 
Quadrennial Diplomacy and Development Review, and through 
consultations with congressional committees that are pursuing 
foreign assistance reform.
    The Fiscal Year 2011 budget request will support 
development priorities that contribute directly to our national 
security. Specifically, our request is focused on three 
priority areas: Securing critical front-line states, meeting 
urgent global challenges, and enhancing USAID effectiveness and 
accountability.
    Allow me to summarize each briefly. First, in critical 
front-line states, we propose spending $7.7 billion in State 
and USAID assistance in support of development efforts in 
Afghanistan, Pakistan, and Iraq. We have made some progress in 
each of these countries, but we realize that significant 
challenges remain.
    Over the past several years our focus in Afghanistan has 
been achieving greater stability and security. We are beginning 
to see major improvements in health care, education, and 
agriculture, as well as, in some cases, the foundation of a 
more representative and democratic government.
    The administration's funding request is part of the 
President's Afghanistan strategy, and designed to encourage 
stability and opportunity in that nation.
    In Pakistan, our request supports ongoing efforts to combat 
extremism, promote economic opportunity, strengthen democratic 
institutions, and build a long-term relationship with the 
Pakistani people. Here, too, our programs are helping to 
achieve significant improvements in education and health.
    The funding increase in Fiscal Year 2011 for Pakistan will 
help USAID reach approximately 60,000 more children with 
nutrition programs, increased enrollment in both primary and 
secondary schools by over 1 million learners, and support 
500,000 rural households to improve agricultural production.
    In Iraq we have transitioned to a new phase in our civilian 
assistance relationship, shifting away from reconstruction 
toward the provision of assistance to bolster local capacity in 
line with Iraqi priorities. USAID is promoting economic 
development, strengthening the agriculture sector, which is the 
largest employer of Iraqis after the Government of Iraq, and 
increasing the capacity of local and national government to 
provide essential services.
    Our second budget priority is focused on meeting urgent 
global challenges. $14.6 billion in State and USAID assistance 
will support local and global solutions to core transnational 
problems, including global health, extreme poverty, natural and 
manmade disasters, and threats of further instability from 
climate change and rapid population growth.
    In global health, we are requesting $8.5 billion in State 
and USAID assistance. Our request supports the President's 
Global Health Initiative. With this additional funding, we will 
build on our strong record of success in HIV/AIDS treatment, 
tuberculosis, and malaria control, and seek to achieve improved 
results in areas where progress has lagged, such as obstetric 
care, newborn care, and basic nutrition.
    In food security we are proposing to invest $1.2 billion 
for State and USAID food security and agriculture programs, in 
addition to $200 million set aside for nutrition. With these 
additional funds we will work in countries in Africa, Central 
America, and Asia to combat poverty and hunger.
    In climate change, we propose to invest $646 million for 
State and USAID programs, part of the administration's overall 
$1.4 billion request to support climate change assistance. 
USAID will support the implementation of sustainable landscape 
investments, as well as developing low-carbon-development 
strategies for critical countries, market-based approaches to 
sustainable energy sector reform, and capacity building and 
technology development to enhance adaptation and resilience 
strategies.
    In humanitarian assistance, USAID and State propose to 
invest $4.2 billion. This funding allows us to assist 
internally displaced persons, refugees, and victims of armed 
conflict and natural disasters worldwide, such as the tragic 
earthquakes in Haiti and Chile. With these combined 
investments, we will save lives and help make people less 
vulnerable to both poverty and the threat of instability that 
extreme poverty breeds.
    Our third major budget priority focuses on enhancing 
USAID's effectiveness and accountability by investing $1.7 
billion in the ongoing rebuilding effort for USAID's personnel 
and infrastructure.
    All of the priorities I have outlined require strong 
capacities in evaluation, planning, strategic resource 
management, and research, to ensure we are incorporating the 
best practices, innovations, and technologies from the field.
    We also must be able to recruit, hire, and retain best-in-
class development professionals. By reducing our reliance on 
contractors to design and evaluate programs, we will not only 
save taxpayer dollars, but also enable greater oversight and 
more effective program implementation. Through these critical 
investments we can achieve the development goals we have set 
around the world, and restore USAID's standing as the world's 
premiere development agency.
    I know this is a time of great economic strain for so many 
Americans. For every dollar we invest, we must show results. 
That is why this budget supports programs vital to our national 
security and our ability to account for outcomes.
    The United States must be able to exercise global 
leadership to help countries, as they develop more stable and 
sustainable foundations for security, stability, and well-
being. This requires the effective use of all instruments of 
our national security, including development. And this requires 
a relentless focus on results and accountability, a focus we 
embrace with enthusiasm.
    Thank you very much, and I look forward to your questions, 
your guidance, and your ongoing consultation.
    [The prepared statement of Mr. Shah follows:]Rajiv 
Shah deg.















    Chairman Berman. Well, thank you very much. We appreciate 
your vision, and the specifics that fill it out. And I will 
give myself 5 minutes to begin the questioning.
    Dr. Shah, could you give us an update on the status of the 
Quadrennial Diplomacy and Development Review, and the 
Presidential Study Directive on Global Development Policy? And 
more specifically, when can we receive the findings, and will 
they be made public?
    Dr. Shah. Yes, thank you, Mr. Chairman, for those 
questions.
    The QDDR has completed now its first phase of work, which 
was structured around a broad set of exploratory conversations 
and brainstorming related to five core working-group topic 
areas relating to how the United States projects its power and 
its smart power and its diplomatic and development capacities 
around the world.
    As we transition, we are in the process of transitioning to 
a series of more operationally oriented task forces that will 
be addressing specific topics, like how we improve our ability 
to do policy planning, how we develop real systems for 
accountability and budgeting, how we help our country's 
missions and our country's chiefs of missions develop long-term 
investment strategies for development and diplomacy, and have 
the flexibility to partner more effectively with the private 
sector with sources of innovation and with country governments 
themselves.
    The results of those more specific operational efforts 
should be available in the April/May timeframe. We, at this 
point, do hope to have deep and ongoing conversations both 
about the content of the QDDR, as well as learning from the 
committees and the Congress around a range of views on some of 
these core issues. And that is an ongoing process, but one that 
has shifted from a larger strategic conversation to a more 
focused set of operational discussions.
    The Presidential Study Directive is similarly making the 
same transition, after having completed a series of phases of 
work that brought together 16 to 18 different agencies 
throughout the Federal Government to discuss ideas and concepts 
in a more open space, related to the future of development. 
That is now transitioning into also a more operational focus, 
to come up with specific constructs that will define the 
development strategy of this administration going forward.
    These two processes come together in a number of different 
ways, not least of which are deputy's committees that we 
participate in; but also just the key individuals that are part 
of both of these processes are often the same individuals.
    Chairman Berman. And the PSD, when do you think that 
process--you mentioned April?
    Dr. Shah. Yes.
    Chairman Berman. An initial idea of April for the QDDR. 
What about the PSD?
    Dr. Shah. Well, I should clarify, I don't think the QDDR 
will be complete in April, but I think we will have enough 
specifics to begin a serious consultation on a set of ideas in 
that timeframe.
    On the PSD, I would expect the same thing, although I 
shouldn't speak on behalf of the National Security Council. I 
think they can identify a more specific timeline, and we could 
come back to you with a more specific answer on it.
    Chairman Berman. I would appreciate that. In order to fund 
Haiti's relief effort, you had to borrow money from other 
humanitarian programs across the globe until the supplemental 
funding arrives. Everyone understands the overwhelming needs in 
Haiti, but the fact is, these transfers have created some 
hardships and delays on the ground in other countries, such as 
Sudan and Congo.
    What is being done to ensure that other humanitarian 
emergencies aren't being neglected in order to address the 
tragedy in Haiti?
    Dr. Shah. Well, I appreciate that question, sir. And I 
believe the United States Government has already committed more 
than $600 million to the effort in Haiti. And as you point out, 
that, a large percentage of that, has come from the IDA account 
that provides the flexible and rapid funding. We will seek, in 
a supplemental, to reconstitute the IDA account as fully as 
possible in this context.
    We have been in close contact with our implementing 
partners in other complex crises around the world, and have 
asked them not to delay or slow down program implementation, 
working under the assumption that those additional resources 
will arrive prior to the June timeframe, which is when we, you 
know, would have to start making those trade-offs that we hope 
not to make.
    So I am aware that a number of partners felt they might 
have to do that. We have tried to be in touch with everyone who 
has reached out to us to indicate that they should not slow 
down programs in other areas; that we expect the supplemental 
to reconstitute IDA in a manner that----
    Chairman Berman. So you are really saying the assumption of 
my question is wrong. There has not been deprivation in other 
programs as a result of the transfer.
    Dr. Shah. That is correct, sir. I believe there have been, 
I know that partners have reached out to us, asking if they 
should. And when we did, we tried to correct that misperception 
right away.
    Chairman Berman. And my time has expired. The ranking 
member is recognized for 5 minutes.
    Ms. Ros-Lehtinen. Thank you, Mr. Chairman. I want to touch 
on Cuba, Haiti, the West Bank, and Gaza, all in 5 minutes. No 
problem, right, Dr. Shah?
    I am concerned that, with the arrest and the imprisonment 
of U.S. citizen Alan Gross, that USAID programs in Cuba may 
have come to a standstill. If we could get a commitment from 
you, Dr. Shah, that USAID is going to continue to carry out 
U.S. democracy programs in Cuba, I would appreciate that.
    On Haiti, following up on the chairman's questions, how 
should the cost of recovery response and long-term development 
efforts in Haiti be shared among donor countries? And what 
portion of the overall aid efforts for Haiti over the coming 
years should the United States be expected to provide; 10 
percent, 20 percent, 30 percent, whatever figures you think.
    Lastly, on the West Bank and Gaza, the administration has 
requested another over $400 million in Economic Support Funds 
for the West Bank and Gaza, but, as we have seen, there has 
been a lot of stealing of those funds; it has not been managed 
well.
    What kind of vetting do we have in place to ensure that the 
funding does not benefit violent extremists or corrupt 
officials, and instead reaches its intended targets? What kind 
of metrics are we using to ensure that we can actually 
accomplish what we seek to do with the funding?
    Thank you, sir.
    Dr. Shah. Thank you. I appreciate those questions. On Cuba 
in particular, I think we can strongly affirm our commitment to 
execute our programs and our priorities. We have taken a number 
of steps working with the State Department to try to address 
the needs of Mr. Gross. I have been in direct contact with DAI, 
the partner for whom he was contracted to work with. And we 
have worked directly with a range of our other partners to 
ensure that they, given the challenging travel situation, that 
they come up with alternative solutions to execute and 
implement these programs. And we are giving them the 
flexibility to do that. So we are fully committed to seeing 
through the program there.
    On Haiti, I appreciate your points and your earlier 
comments there, as well. We have been approximately half of the 
overall early relief effort. A large part of that is the 
Department of Defense, the costs related to Department of 
Defense assets, including the Marines, the Comfort Hospital 
Ship, the effort to rebuild the port and the airport, those 
were mission-critical early activities that were required for 
other assistance to come in.
    As we transition through recovery reconstruction, we expect 
that percentage will go down significantly. And we are working 
with a range of major bilateral partners, but also the World 
Bank, as part of the post-disaster needs assessment, to make 
sure there is a strong plan going forward that is unveiled at 
the donors' conference later in March, this month. And that 
U.S. assistance is targeted, and a far more modest percentage 
of the overall needs. It will be a small percentage. But our 
leadership will be critical, and our technical support and our 
deep engagement in this process will be continued and 
unwavering.
    On West Bank and Gaza, I appreciate the question, as well. 
As you know, we have systems for both tracking partners and 
vetting partners. The partner-vetting system there involves the 
specific identification of names of partners. It involves our 
database tracking systems, and we vet that very, very 
carefully. That system has been in place for more than 2 years.
    On the cash tracking, we also have a very specific system 
that has been in place for more than 4 years, where we are 
supporting and we authorize specific disbursements from the 
Palestinian Authority. The resources are transferred quite 
closely, from a bank in Israel to a special Treasury account in 
the Palestinian banking system. And then all flows out of that 
are monitored on a case-by-case basis.
    So there is a very strong system in place for tracking cash 
flows in that environment, as well. And our budget request 
going forward is to really focus on doing specific work that 
will achieve real outcomes in infrastructure and in health, and 
in humanitarian support in Gaza. And I am happy to describe 
that some of the things we have done have been successful, 
building 60 kilometers of road in the West Bank, funding seven 
schools that are operational and effective, and promoting a 
broadly based health system in that region that is reaching 
many, many more people in need.
    So we will continue to track those outcomes very closely, 
but we have special systems for tracking how we work with 
partners, and how we track the flow of cash.
    Ms. Ros-Lehtinen. Thank you so much. And the emphasis 
should always be to make sure that it is a transparent, 
accountable system of aid that is not corrupted by officials in 
the West Bank and Gaza.
    Thank you, Dr. Shah. Thank you, Mr. Chairman.
    Chairman Berman. I yield 5 minutes to the gentleman from 
New Jersey, the chairman of the African Global Health 
Subcommittee, Mr. Payne.
    Mr. Payne. Thank you, Dr. Shah, and let me also commend you 
for the outstanding job that you have done in Haiti. Also, I 
wish we didn't have a debt, but we do have to remember we had a 
balanced budget when President Clinton left. However, the war 
in Iraq, which was unnecessary, and big tax cuts put us in the 
position we are in today, unfortunately.
    Let me just say about the Global Fund. I see that you have 
cut $50 million from the Global Fund, and I wonder if you would 
look at that. Because, as you know, the U.N. formula is a one-
third U.S., that means $150 million will be cut overall when 
the other nations participate.
    Secondly, on the neglected tropical diseases. Although you 
are dealing with them, some of them, the most neglected, such 
as fatal vascular mineosis, sleeping sickness, Charge's 
Disease, and some of these other disfiguring, buruli ulcers, 
are not covered. And I wonder if they could be included in 
that.
    Just real quickly, on three governance groups, Somalia, the 
transitional Federal Government. I wonder, will there be a 
significant increase in development aid, because we have to 
support this government or we are going to be, in my opinion, 
in very serious problems. If they fall, all of these--Africa, 
as you know, Somaliland, Putland, and Somalia, in my opinion, 
will go.
    Secondly, are we concentrating enough on South Sudan? If, 
in 2011, they decide to secede, how will we support the new 
government with additional funds?
    And finally, Liberia needs to have some consideration. 
Where we have strong institutions, we see elections work, like 
South Africa and other places. Where we don't, they fail. So if 
you could look at Liberia, the historical relationship between 
the United States and Liberia is important.
    And finally, I would like to know how you are making out 
with AFRICOM and the coordination with that. I will just stop 
so that you can answer the questions. Thank you.
    Dr. Shah. Thank you, Mr. Chairman. We have, on the global 
front in particular, and that is in the context of the larger 
Global Health Initiative, we are committed to significant 
financial increases against Global Health. And even more than 
that, using those resources in a way that will be more 
effective against those lagging indicators within the MDGs, 
like maternal mortality and newborn and obstetric care.
    We are working with the Global Fund, with the Global Lines 
for Vaccines and Immunization and other vertical programs, to 
try to accelerate the partnerships between them, and get more 
value out of the overall investment.
    The overall administration request on the Global Fund is $1 
billion, because it, of course, includes the Treasury 
component. And we will be very committed to helping the Global 
Fund succeed.
    On neglected tropical diseases, I will take your comments 
as advisement, and look specifically into those cases. That is 
a unique area where I do believe we can have, and we have been 
in discussions with private partners to accelerate public-
private partnerships and meet the overall needs, as they have 
been delineated by the World Health Organization and others. 
And that is very much a priority of the Global Health 
Initiative.
    On Somalia, we will, in terms of increases in development 
assistance, as you know, most of our assistance is humanitarian 
at this point. It is flowing through the north. We continue to 
be in close conversation with the World Food Program to explore 
what can be done, and when it can be done in other parts of 
Somalia. And we look to use our development assistance in a 
strategic manner. I will follow up more specifically on what we 
could do to be more expansive in that context.
    With Southern Sudan, we have $95 million for the referendum 
and for support for the referendum, and we are doing a series 
of activities with respect to capacity building and serving the 
people of Southern Sudan.
    I will note that our mission is in that region there. And 
unlike other partners, even multi-lateral partners that are 
trying to serve that region from farther away, we feel we are 
very well-positioned to play a critical role should the needs 
arise, as you have identified. And so we are doing contingency 
planning around that, and also identifying what kind of budget 
flexibility we would have, and what the needs would be.
    But we think we have an important role in leading that 
effort. We think we would have an important role in bringing 
other donors and multi-lateral institutions to that mission, 
should that be the outcome of the early 2011 referendum. And I 
will take your comments on Liberia as guidance.
    And on AFRICOM, we continue to be in discussion with them, 
and do hope to have a strongly coordinated operational effort 
in Africa with them. I personally visited them this summer, and 
hope to continue that conversation.
    Chairman Berman. The time of the gentleman has expired. The 
gentleman from Texas, Mr. Poe, is recognized for 5 minutes.
    Mr. Poe. Thank you, Mr. Chairman. Dr. Shah, thank you for 
being here. I am over here, far right to you.
    First of all, I want to commend the workers in the field in 
USAID. I have traveled, you know, like everybody else on this 
committee, all over. And they are the greatest ambassadors for 
the United States and freedom that we have, are those people in 
the field.
    And I know that USAID is developing all kinds of things. 
Most recently, the farmers down there at Texas A&M invented 
some kind of soybean that now yields nine times what they used 
to yield, for Afghanistan, so that the farmers in Afghanistan 
don't have to raise poppies. They can raise soybeans that were 
invented at Texas A&M. I mean, that is all good things, those 
are all good.
    I am concerned about, though, being good stewards of money. 
Last week we had before us the Special Inspector General for 
Iraq Reconstruction, Stuart Bowen. And he said that in 
reconstruction of Iraq there was, and there is, $4 billion 
unaccounted for.
    And I asked him which, of all the agencies that are in Iraq 
from the United States, has the, I guess the worst record of 
accountability. And he said the State Department. Of course, 
the example he used was the $2.5 billion that went to Dimecorp 
for training police officers, and there is no record. We have 
no records about where that $2.5 billion went. And so I am 
concerned about the unaccountability of money we send.
    And I also asked him about well, could some of that money 
have turned up in the hands of our enemies, like al-Qaeda? And 
he mentioned that there were 14,000 Glock weapons that 
disappeared from our possession to somewhere else. That 
troubles me. We have our men and women in uniform overseas 
trying to protect us, and guns that we ship over there end up 
in their hands because our Federal agencies aren't good 
stewards of, of the money.
    So you want an increase in the budget. We have 15 million 
Americans unemployed. It seems like, to me, when some country 
is in trouble, of course they call 1-800-USAID to come over and 
help them out, you know. That is what we kind of do in this 
country. The government and the people of this country are the 
most giving of any nation in history.
    But I would like for you to specifically address this 
problem of accountability. And how do we know that this money 
is going to be accounted for; that thieves aren't going to 
steal it, that crooked contractors aren't going to steal it, 
and the bad guys aren't going to end up with some of the aid 
that we send to foreign countries. Similar to some of the 
questions that the ranking member addressed in other parts of 
the world.
    So how about that, Dr. Shah?
    Dr. Shah. Thank you, sir. I want to thank you for your 
comments about our staff, and also acknowledge that our Foreign 
Service nationals in that context do make us awfully proud.
    I also want to address your comment about Texas A&M. We are 
proposing in this budget an increase in our agricultural 
research and development as it relates to meeting the needs in 
some of these priority countries in food security.
    With respect to Iraq reconstruction, the contract you 
referred to, I would just point out that for USAID, we have a 
shifting strategy where we are moving toward supporting the 
elections that are upcoming, and providing real support to the 
government and the health system, and other, meeting basic 
human needs and the needs of IDP populations.
    We are also more aggressively pursuing matching fund 
requirements to make sure that our resources are being matched 
by the Government of Iraq. And we have strong financial 
accountability and procurement systems in place that are 
tracked very closely in that context.
    In general, your point----
    Mr. Poe. Excuse me, Dr. Shah. Are these accountability, are 
these accounting procedures new? Or are they the same ones 
where----
    Dr. Shah. No, many of them are new over the course of the 
last year. Some of them have all been, are based on some 
learning.
    There are four basic strategies we use to track and ensure 
accountability. I agree they could be more transparent, and it 
is one of my priorities to make them more effective and 
transparent.
    One is selectivity. We have rigorous systems for making 
sure we only work with those partners, especially in 
Afghanistan and Pakistan, where we can track the resources and 
have confidence in effectiveness of spending.
    A second is around capacity building, particularly in 
financial management and procurement systems, both reform and 
tracking.
    A third is on monitoring, and a fourth is on auditing, 
which we do in a multiple manner system in those places.
    Mr. Poe. Thank you, Dr. Shah.
    Chairman Berman. The time of the gentleman has expired. The 
gentleman from New York, Mr. Meeks, is recognized for 5 
minutes.
    Mr. Meeks. Thank you, Mr. Chairman. Good morning, Dr. Shah. 
It is great having you here, and I thank you for, commend you 
for all of your efforts, especially in helping Haiti with the 
aftermath of the devastating earthquake.
    You talked about how complex it is in dealing with Haiti. I 
would like first to ask you the question, can you describe for 
us the international aspect of the effort to help Haiti? 
Specifically what I am interested in is the coordination of 
efforts, the coordination of funds, who is leading that effort, 
where do we go from here, and what role can the Haitian 
Government play? And how do we support that government until it 
has the capacity to take on more or most of the responsibility?
    I know that there are a number of international communities 
that are calling for a Haiti Marshall Plan. And I, myself, have 
put in a resolution calling for a Haiti Marshall Plan. So I 
would like to know what your thoughts are on whether or not we 
need to do that clarion call, and whether Haiti needs a 
Marshall Plan.
    Then, I just want to ask also, in the short time that we 
have, about Afro-Latinos in the Western Hemisphere. You know 
that the Obama administration has finalized the signing of the 
U.S.-Colombia Joint Action Plan on Racial and Ethnic Equality. 
And we have one on Brazil, of which I have asked also to get 
the report on that, so that we can continue to follow that. I 
know we are still making progress. But over the years, I have 
requested appropriators that, from the USAID funds be 
specifically directed toward helping marginalized communities 
in Latin America. And more often than not, those 
disproportionately means they are Afro-Latinos and indigenous 
populations.
    So I would like to know, can you tell me about your plans 
to address the plight of African Latinos and indigenous 
populations? And have you prioritized the plans from the budget 
perspective?
    And finally, and real briefly, I am also concerned about 
trade capacity and trade capacity dollars. So can you tell me 
if there are any plans to more comprehensively coordinate trade 
capacity dollars across the various departments and agencies 
that have these funds?
    I have proposed, for example, that we create an Office for 
Trade Capacity for the nation. I would like to know your 
thoughts on this kind of function.
    Dr. Shah. Thank you for those comments and questions. I 
will start with Haiti.
    The international aspect is being led by the Government of 
Haiti, working with an internationally recognized system of 
U.N. clusters that are established sector by sector. We play a 
key role in each of the clusters, and directly with the 
Government of Haiti.
    We also, in some cases, like rubble removal for the 
establishment of safe places in advancing, where the floods are 
coming in, or in food distribution or water distribution, at 
times when frankly we felt the clusters needed more support, we 
have stepped in and offered more capacity and more directed 
leadership from our military-civilian partnership in Haiti. So 
that is how it is being coordinated on an international aspect.
    In terms of the plan forward, the Haitian Government has 
had a plan, most recently unveiled last spring, and also 
revised and updated for last fall, which was based on a 
decentralization of the population outside of Port-Au-Prince, 
and creating vibrant economic opportunities and centers of 
economic activity outside of Port-Au-Prince. We expect them to 
unveil that plan in a more updated and specific form at the 
upcoming donors' conference, and believe that does constitute 
the groundwork for a very strong reconstruction effort that 
will hopefully build back a more vibrant and more effective 
economy, governance system, and ability to meet human needs in 
Port-Au-Prince. And, perhaps more importantly, to the majority 
of the population outside of Port-Au-Prince.
    In terms of your comments about Afro-Latinos in the Western 
Hemisphere, it is absolutely true and completely recognized by 
our agency that those marginalized communities are 
disproportionately suffering on health and human indicators of 
welfare and well being throughout the hemisphere. And that is a 
clear and statistically straightforward point.
    I will come back to you more specifically on how our budget 
addresses that. But in our efforts to address food security, 
global health, and meeting basic human needs, we are 
disproportionately targeting those marginalized populations. 
And how that plays out in terms of budget numbers, I will come 
back to you more specifically.
    And finally, on trade capacity building and coordination, I 
do believe that we need more effective coordination in that 
context. We have been in a conversation as part of the 
Presidential Study Directive, and in efforts like our Food 
Security Initiative, to explore how we can improve the 
integration of our trade policy, our trade capacity 
investments, and our investments in agriculture and high-value 
agriculture, to get more bang per buck in our development 
spending.
    Thank you.
    Chairman Berman. The time of the gentleman has expired, and 
the gentleman from New Jersey, Mr. Smith, is recognized for 5 
minutes.
    Mr. Smith. Thank you, Mr. Chairman. Dr. Shah, thank you for 
your testimony.
    About 12 years ago, Dr. Shah, I initiated an effort on the 
whole issue of autism, at a time when very few people were 
paying attention to it. And it led to the creation of the 
Centers of Excellence. As a matter of fact, I wrote the 
provisions for the Centers of Disease Control.
    We quickly found that we may have an epidemic where about 
one out of every 100 of our children have autism or part of the 
autism spectrum.
    I have since been focusing on the international elements of 
autism. And to my not shock, but certainly to my, and I think 
many other people's, dismay, have realized that we have a 
global epidemic of autism.
    I am working with a number of NGOs in Nigeria, in Kenya, 
Indonesia, Poland, and in Ireland, in trying to combat autism. 
And what all of these organizations have is a deficiency in 
funding. Lots of thought, a lot of good expertise, but lack of 
funding.
    I have introduced legislation, H.R. 1878, about a year ago, 
that would provide a small grants program, and also a teach-
the-teachers program. And I am asking you if you would take a 
good, long, hard look at these NGOs, as I am sure you have the 
authority, absent the legislation, to assist these NGOs.
    I will give you one on defeating autism in Nigeria, as I 
know some of the people involved with an NGO there. They 
suggest that there may be as many as 1 million Nigerians who 
have autism. So I would ask you to take a good, hard look at 
this, and provide some assistance there.
    Secondly, on your three priority areas, you talk about 
instability from rapid population growth. I would respectfully 
request that you take a second look at the issue of 
depopulation. In places all over Europe, Russia, the U.N. 
estimates that by the year 2050, there will be 25 percent lower 
population than that which currently exists in Russia. It is 
the same way with all of the Eastern European countries. We are 
seeing a depopulation trend.
    The reason why the aggregate continues to grow is that we 
are living longer. It is not about births; it is about the 
other side of the spectrum. In South Korea, they are so far 
below replacement--Japan has the same problem--that they are 
looking at a serious disproportionality when it comes to 
workers and those who are on the other end of the spectrum 
receiving benefits.
    So I think your underlying assumption has been surpassed, 
in many ways, by a depopulation trend that is very injurious to 
individual countries. And in China, where the sex-selection 
abortions has led to gendercide, there are as many as 100 
million missing girls, and a whole unique set of problems has 
developed there. As many as 40 million men will not be able to 
find wives by 2020 because they are gone, they are dead, as a 
result of sex-selection abortion and the one-child-per-couple 
policy. That is a crime against women, of gargantuan 
proportions.
    So I would ask you to look at maybe some of the underlying 
assumptions about population growth. There is a depopulation 
trend that is very, very dangerous.
    Finally, on obstetric fistula, I pushed very hard with Dr. 
Kent Hill when he was at USAID on behalf of building out the 
ability to meet women's real needs when they have obstetric 
fistula. Getting the surgeries that are very low cost and high-
impact gives the woman her life back.
    Like many of my colleagues, I have been to the hospital in 
Addis. I have been to other obstetric hospitals. Can you give 
us an assurance that you will not only continue that money, it 
was $12 million at the time, but hopefully significantly expand 
it? I yield.
    Dr. Shah. Thank you for those comments and questions. On 
autism, I will be happy to look at the NGOs you are proposing, 
and we can do that in a systematic manner.
    I do believe the principles of the Global Health 
Initiative, which is to broaden the scope of how we think about 
supporting health systems and setting priorities based on 
medical need, and based on what are the biggest lagging 
indicators against meeting development goals, will help guide 
our work in the health sector overall going forward. And I 
appreciate your comments on that issue.
    On instability from population growth, I do believe the 
2050 population projections are significant, and they do show 
over 9 billion as a global population. And I think consistent 
with your comments, they show that those increases will happen 
in certain parts of the world, and certain parts of the world 
will stay flat, and in some cases decrease. So I appreciate 
that, and we will take a nuanced look at that very 
specifically.
    Some of your comments related to gender and girls in that 
context, which is an immediate priority for our team and for 
the Secretary. And on obstetric fistula, I do believe our 
Global Health Initiative, in its reprioritization of obstetric 
care, of skilled attendants at birth, and of focusing on the 
needs of women and girls, will create a strong strategic 
priority in that space.
    Thank you.
    Chairman Berman. The time of the gentleman has expired. The 
gentleman from Georgia, Mr. Scott, is recognized for 5 minutes.
    Mr. Scott. Thank you, Mr. Chairman. Dr. Shah, let me first 
of all commend you and the Obama administration for the very 
quick response to the situation in Haiti. I would like to ask 
you a few questions about that, if I may.
    First of all, as of today, how much money has USAID spent 
in the disaster relief in Haiti?
    Dr. Shah. I believe the overall Federal commitment has been 
just over $600 million, maybe just over $630 million. We could 
get you a very specific number.
    Of that amount, I think USAID has spent approximately $350 
million, with the majority of the alternative part of that 
being Department of Defense spending.
    Mr. Scott. Which leads to my next question. Where has that 
money been spent, by category?
    Dr. Shah. I would have to provide you a more specific 
breakdown, but the major areas have been out of our disaster 
relief account, which immediately supported priorities for 
urban search and rescue. We sent our two trained international 
urban search and rescue teams, but also four or five other 
teams that were stood up by FEMA, so that we had at any one 
time more than 500 American search and rescue professionals 
with heavy equipment and specialized training at work for an 
extended period of time.
    We made significant investments in the health space, 
spending resources to take disaster medical assistance teams 
from the Department of Health and Human Services, and put them 
in place supporting the treatment of more than 30,000 Haitians 
in that context. And then food and water were immediate 
priorities that accounted for a large bulk of that spending. We 
successfully supported the distribution of food to more than 3 
million people who were at risk, and had some immediate and 
progressive procurements to make sure that people had as much 
access to water in the camps as possible. We think we 
successfully met the needs around water. That was a big concern 
in the early moments.
    So those have been the big areas of disaster assistance 
spending. And in addition to that, the Department of Defense, 
with its personnel and its other resources, and the Comfort 
Hospital Ship, also are cost items that we are tracking.
    Mr. Scott. And going forward, Dr. Shah, where do you feel 
the priority should be now? Where is the greatest need now for 
the people of Haiti?
    Dr. Shah. Well, the immediate needs are in two areas. One 
is in the collective effort to remove rubble from, and other 
waste, from critical sites, whether they are elevated sites 
where people could live, or whether they are drainage systems 
that will be critical when it rains.
    Linked to that is shelter and sanitation. So we are 
aggressively pursuing those three priorities, with the common 
goal of reaching every Haitian in need with shelter materials, 
first by March 8, and then with an expanded set of shelter 
materials by April 8. That is probably the top and immediate 
priority.
    A second priority is public health. And we have vaccinated 
more than 150,000. We are trying to reach 150,000 people. I 
think we have reached more than 80,000 so far, in advance of 
the rainy season.
    Mr. Scott. Very good. Now, there have been some reports 
coming to us from Haiti that, in our efforts to really move 
forward and help them, particularly in our food export area, 
and particularly in the area of rice, which is major farming 
product of the farmers in Haiti; and there has been some 
concern that maybe our efforts to do that have undermined the 
basic farmers in Haiti, because we have over-supplied the 
market, and thereby putting disincentives in for the Haitian 
people themselves, in farming, to produce their own food.
    Can you give us an assessment of that situation, and what 
are we doing to make sure we correct that?
    Dr. Shah. Well, thank you, I appreciate your raising it. It 
is an incredibly important point.
    What we did was initially, upon sending food, we also sent 
some experts who could track market prices of different food 
commodities, including rice, vegetable oils, beans, and track 
the flow of charcoal and other cooking supplies in markets, to 
make sure that we were pursuing an assistance strategy that did 
not impede local market systems and resilience.
    We have been tracking that closely. We do think we have had 
an aggressive response. The data on rice is varying. The data 
on beans and vegetable oil is that we have not had as 
significant price effect of that.
    And complementary to this effort, we have accelerated our 
major program to support the agriculture sector, including 
trying to get fertilizer support and seeds and other 
agricultural support out to farmers in advance of this planting 
season. And we will continue to track the price of rice closely 
to make sure we are not distorting incentives for local 
production. You are right to point that out as a critical 
issue.
    Mr. Scott. So we do have effective monitoring and 
evaluation and measurement systems in place to measure what we 
are doing?
    Dr. Shah. As best we can, in an emergency environment. We 
were getting wildly different price estimates from different 
markets, which would not take place in a normal setting. So we 
are doing our best, given that issue.
    Mr. Scott. Thank you. And again, I commend you for your 
excellent work.
    Dr. Shah. Thank you.
    Chairman Berman. The time of the gentleman has expired. The 
gentleman from Arkansas, Mr. Boozman, is recognized for 5 
minutes.
    Mr. Boozman. Thank you, Mr. Chairman. Secretary Clinton 
recently stated that we hope one day to put ourselves out of 
the aid business. Because, due to our success, countries will 
no longer need this kind of help.
    Can you give us some examples of how aid initiatives have 
been successful in permanently breaking the cycle of dependence 
by impoverished countries on outside aid?
    Also maybe in your answer, micro-finance is something that 
I have a lot of interest in.
    Dr. Shah. Certainly, thank you. I think that is the long-
term goal for anyone in the assistance business, which is to 
put ourselves out of assistance because countries effectively 
graduate.
    The most commonly cited examples are not always the most 
generalizable ones, like Western Europe after the World War and 
after the Marshall Plan, or South Korea and some other East 
Asian and Southeast Asian economies that were USAID 
beneficiaries, and now are becoming donor countries. And so 
that is important, they are important examples, and we are 
trying to learn lessons from there to apply elsewhere.
    The guidance in the Spence Commission Report I think offers 
a lot of interesting parallels of how we could pursue work 
differently in other parts of the world to achieve those 
outcomes.
    In terms of more specifically, areas like our Global Health 
Initiative or our Food Security Initiative are where we are 
trying to use that principle in a more sector-specific manner. 
So in global health, in a country that we prioritize, we will 
look at our full portfolio of activities. We will partner more 
deeply with countries. We will develop a financial 
sustainability plan, and we will do our best to identify an 
exit strategy for our partners and our own financing. It may be 
a long exit strategy, but an exit strategy, so that we are not, 
so that we are all aiming against that common goal on a more 
sector-specific basis.
    I appreciate your raising micro-finance. This is an 
important area, and the ranking member also made reference to 
the Development Credit Authority.
    We recently completed a transaction that provided credit 
authority support to micro-financed institutions through the 
Grameen Bank and its global network. That will leverage more 
than $160 million, and provide institutional support to 
institutions around the world to put resources in the pockets 
of women and vulnerable populations around the world that have 
a surprisingly high repayment rate. And in a financial system 
that, even though it is banking to the poorest, it is an 
incredibly safe bet to make in terms of repayment rates and 
risks that the communities take.
    We are also, in the micro-finance area, looking to expand 
and enhance our investments in the development of other 
financial services for the poor. Most notably, insurance 
products and savings products that have, recent data and 
research have shown, are critically important to reducing the 
vulnerability of those people to all kinds of shocks and risks 
that they experience in their day-to-day lives. So we 
appreciate your comments.
    Mr. Boozman. Very good. One of the other things that I have 
experienced is, in traveling to various countries, and this is 
certainly not true of all areas. But it does seem like there is 
a duplication of services. You get into turf battles, you know, 
where USAID is there doing a certain function, and then you see 
duplicative, you know, activities by perhaps another branch of 
the State Department.
    Do you see that as a problem? Is that something that you 
have experienced? And if so, how do we solve that problem? How 
do we get people on the same track? Right now, with the, you 
know, all of us being so aware of the finances, the limited 
finances that we have got, again, I would appreciate your 
comment on how we would tackle that problem.
    Dr. Shah. I appreciate that. There clearly are, in certain 
parts of the world, a significant duplication of services. And 
what is a clear priority for us is trying to get to a place 
where we are prioritizing efficiency and outcome, and using 
resources as effectively as possible.
    I think you do that by really three things. The first is 
you set very clear and specific development goals and 
development priorities. We are expanding our efforts to do 
that, both in our hiring of expertise at USAID and in 
developing better policy planning and evaluation systems.
    The second is we aspire to serve as a whole of government 
platform to point resources against those goals in an efficient 
and non-duplicative manner. The learnings from Haiti I think 
accelerate the need to do that. The health sector in Haiti is a 
good example, where we had some unique capabilities at the 
Department of Health and Human Services that were brought into 
the field. And we have been able to transition those 
capabilities to local NGO partners to expand their ability to 
provide more services to Haitians. We need more examples of 
that kind of partnership for effectiveness and outcome.
    And the third is really to focus on focus and scale as we 
implement our programs. And so we structured our policy 
planning to do that on a program-by-program basis.
    Mr. Boozman. Thank you, Mr. Chairman.
    Chairman Berman. The time of the gentleman has expired. And 
the gentlelady from California, Ambassador Watson, is 
recognized for 5 minutes.
    Ms. Watson. Thank you, Mr. Chairman. And Dr. Shah, welcome. 
I have really admired your stewardship of USAID. I have been in 
several informational hearings with you, and you give us 
inspiration that this program is working well.
    I want to relate now to the Lantos-Hyde Act. And if you 
remember, it mandated a 5-year strategy to treat 4.5 million 
cases of tuberculosis under DOTS, and 90,000 multi-drug-
resistant TB cases.
    The Global Health Initiative, on the other hand, proposes 
to treat only 2.6 million TB patients, and only 57,000 MDR TB 
cases. Moreover, TB will soon need new drugs to combat the rise 
in highly resistant TB.
    So what specific initiatives are planned to strengthen 
country responses to re-emerging infectious diseases such as 
TB, and how will TB treatment be incorporated into a health 
system-strengthening approach?
    Dr. Shah. Thank you. I very much appreciate that. I got my 
first experience in tuberculosis, working on a DOTS program in 
rural South India a number of years ago, and recognize how 
critical and important this issue is, and the importance of the 
legislative targets.
    I would say that the distinction between the targets, in 
terms of the 4.5, 2.6, 90, and 57,000 with respect to MDR, is 
primarily, I believe, the distinction between what we think we 
can achieve in our bilateral programs with current technology 
and implementation protocols, and what we would hope to achieve 
by getting more efficiencies out of the Global Health 
Initiative.
    And we can get those efficiencies in two ways. One is as we 
repackage our complete programs to be more systems-oriented, I 
fully expect, especially given the relationship between TB and 
HIV, that we will actually have more resources that are 
currently not counting, going toward the joint treatment of TB 
and HIV, and getting those numbers up.
    The second is I think we will partner better with the 
Global Fund, and do more shared system-strengthening 
investments that would expand their capacity and ours to reach 
TB patients.
    So I believe those numbers, the 2.6 and the 57,000, are 
really floors upon which we can build as we get more efficient, 
and as we partner more effectively.
    The second point I would make is we will increase our 
research and development investments in this space. I am 
particularly enthusiastic about new diagnostic technologies 
that I think will detect TB earlier, allowing more cases to be 
treated in the general platform, as opposed to MDR 
requirements. And that would lower dramatically the cost of 
each treatment episode.
    I also believe, with new drugs and treatment protocols, 
over time the length of time needed to treat an MDR patient 
will come down significantly, potentially to as little as 9 
months. And if that happens, that would significantly expand 
our capacities to offer treatment more broadly.
    So we will track these things very closely, and try to 
learn from some of the more innovative efforts that are taking 
place around the world in TB.
    Ms. Watson. Yes. Are you seeing TB in Haiti?
    Dr. Shah. Well, we have had all kinds of reports. We have a 
51 surveillance site system that the Centers for Disease 
Control has set up with our support, tracking diseases. We have 
not had a big outbreak or any specific reporting in that area, 
but they are out there looking for it. And I did see some 
earlier episodes they thought were TB, but then I didn't get 
the follow-up that indicated that it had been confirmed.
    Ms. Watson. Thank you for that. The administration has 
stressed country ownership of aid projects. And the true 
meaning of this concept is really unclear to us. Words such as 
country-based and country-led are also in the mix.
    And also, in addition, aid is coming from a variety of 
sectors: GHI, PEPFAR, MCC, and the Global Fund, and so forth.
    So can you tell us what country ownership and its many 
variations means to you and the administration? And how will 
this be reflected in your policies? And can you expand on how 
health initiatives will be coordinated within countries already 
receiving other forms of aid, and keeping in mind the country 
ownership concept?
    Dr. Shah. Well, thank you. The Global Health Initiative 
will include all of the investments the U.S. Government makes 
in helping a country to achieve that goal.
    Quickly, the four components of country ownership, to us, 
are country plan, specific guidance from countries that informs 
our own strategic investment, and restructuring our contracts 
and our programs to abide by those guidances, and sharing data, 
information, and personnel against the common strategy and 
learning platform.
    I am very enthusiastic about my ability to work with Tom 
Frieden at the CDC and Eric Frisby at the OGEC in order to do 
that more effectively going forward.
    Ms. Watson. We are out of time. Thank you so much.
    Chairman Berman. The time of the gentlelady has expired, 
and I recognize the gentleman from California, Mr. Sherman, for 
5 minutes.
    Mr. Sherman. Thank you, Mr. Chairman. I believe in foreign 
aid development because it is the right thing to do. But we are 
told to go to our districts and sell it as a necessary 
component in the war on terrorism, something we do for our 
national security, not just out of generosity.
    And frankly, if American people were convinced that it was 
only altruistic, I think we would have an even more difficult 
time selling foreign aid.
    Now, the proponents of foreign aid put forward the idea 
that any alleviation of poverty in the world reduces terrorism. 
This fits a Western morality play view of the world. Because we 
all desperately want to live in a reasonable world, and so 
something like terrorism must be the just and reasonable 
response of desperate people who are desperately poor.
    Unfortunately, we live in an unreasonable world. Poverty 
does not correlate with international terrorism. Both the 
Christmas Day bomber and bin Laden come from some of the 
richest and most powerful families in the world, and a majority 
of those who struck us on 9/11 come from a country that has 
received far more infusions of cash than USAID has ever dreamed 
of putting into one country or all countries; namely, Saudi 
Arabia. They were middle- and upper-middle-class kids from a 
country that gets an awful lot of American cash.
    Somalia is kind of a separate case. But looking at the 
world as a whole, the poorest 10 percent of the world's people 
cause less than 10 percent of the international terrorism. So 
simple poverty alleviation itself cannot be justified as a good 
investment in our, in the global war on terrorism.
    Another problem we have is the bureaucracy of USAID. It 
took strong political push to get them to put the flag on the 
bag. They didn't want to say this aid is from the American 
people; they just wanted to give out the aid. So many of your 
staff are people that wanted to work at OXFAM, but wanted a 
retirement plan.
    What can you do to make sure that when we select the 
countries and the projects, when we design each part of that 
project, and when we publicize the efforts and decide how much 
resources to put into publicity rather than doing good, and put 
the money into telling people we are doing good, that we are, 
in fact, honest with the American people that this is an effort 
to win the global war on terrorism and to protect them?
    Because as good a goal as alleviation of world poverty is, 
and as much as I would support it, I don't support telling the 
American people we are doing it to stop terrorism; and then 
failing to select, design, and publicize so that we really are. 
Given your reluctant bureaucracy, what are you doing?
    Dr. Shah. Thank you, sir, for that comment. I do believe 
that our budget presentation prioritizes the intersection of 
development investments in specific places and parts of 
specific civilian and military strategies that are designed to 
defeat al-Qaeda and support a stronger and more effective 
global security environment for our country. It is why we 
present our budget in the context of Afghanistan and Pakistan, 
where that is being carried out as a front-line state.
    I would also note that we have looked carefully at the data 
following the Indonesian tsunami, that I know you were involved 
in, with the relief effort there. The branding effort around 
USAID's giving in that context more than doubled our 
favorability rating among the Indonesian people. And in that 
same 6-week period after the tsunami, it actually reduced by 
more than half the favorability of the Indonesian people in 
Osama bin-Laden.
    Mr. Sherman. I have limited time. I like your answer, and 
hope you will extend it for the record. I just want to urge you 
to do everything you can to make sure every aspect of design 
and selection reflects what we are telling the American people.
    I want to put forward one idea, and that is, in the 
impoverished world, people have to pay for their kids' 
textbooks. If we were to print all the elementary school, 
middle school textbooks, A, we could make sure that the 
content, while not entirely politically correct perhaps from an 
American perspective, was good; and second, we would be helping 
education; and third, we would be reducing corruption, because 
it is pretty hard to steal textbooks and turn them into cash, 
although I guess you could do it.
    Dr. Shah. Thank you.
    Chairman Berman. The time of the gentleman has expired. The 
gentleman from California, Mr. Costa, is recognized.
    Mr. Costa. Thank you very much, Mr. Chairman, for this 
important hearing. And thank you, Dr. Shah, for the good work 
you are doing.
    I am going to cover your efforts in a host of countries 
that we are focused in, and I would like some quick responses. 
Obviously it was noted earlier about our efforts with regard to 
Gaza and the West Bank. How would you assess the results of the 
infusion thus far of aid that has been provided, and the 
Palestinians' ability to absorb the large amount of American 
aid, quickly?
    Dr. Shah. Well, we track that very carefully before 
making----
    Mr. Costa. No, I know, you noted that earlier.
    Dr. Shah. Right.
    Mr. Costa. How would you assess it?
    Dr. Shah. So I think there has been more success in some 
areas than others. There have been successes in infrastructure 
and the development of road networks and building schools. 
There have been successes in health, in particular with 
building a stronger health system.
    I think there are real challenges, especially in Gaza, 
where there, for a variety of reasons, have been issues with 
both transport mobility of goods and individuals, as well as 
some interference. And so, so there is much to do to improve 
the effectiveness of those efforts, and we are working, through 
our diplomatic channels, to help improve that.
    Mr. Costa. I would like you to provide at a later date 
written notice of both those challenged areas. In Afghanistan 
and Pakistan, obviously those are harsh environments. Many of 
us have visited those countries in the past.
    It is my understanding that USAID personnel are only there 
for a year at length. However, as we know, after the year ends, 
most people are getting their feet on the ground, getting some 
level of understanding of local knowledge. Do you think that is 
too short of a time period, as they are just becoming to be 
experts in their field? Are you considering extending the time?
    Dr. Shah. We would like to encourage them to stay for 
extended periods of time. We are doing a number of things to 
facilitate a more effective personnel situation in Afghanistan 
in particular, related to improve----
    Mr. Costa. That could be an administrative change, couldn't 
it? I mean, if you provide the opportunity to extend beyond a 
year?
    Dr. Shah. Well, we have to balance that with our recruiting 
and hiring and on-boarding process, and making sure we have 
enough numbers.
    Mr. Costa. What if an individual decides, in Pakistan or 
Afghanistan, they would like to stay beyond a year? What is the 
normal course?
    Dr. Shah. They absolutely can, if they would like to.
    Mr. Costa. Okay. As it relates, I have had a little bit of 
experience with some folks from my area who have actually taken 
the time and contributed to build a hospital in Afghanistan 
outside of Kabul. I have seen where some of the other money 
that has been spent by us, where we have had a lot of problems 
with corruption.
    It just seems to me that we don't have it right yet, in 
terms of how, whether we are building a road, whether we are 
building a school, whether we are building housing, or in this 
case a hospital. For $2 million they were able to build a 
state-of-the-art hospital in Afshar, Afshar Hospital; 120 beds 
with seemingly no corruption that was involved.
    What are you guys doing to figure out how you can avoid or 
learn from your past mistakes?
    Dr. Shah. Well, first I will say I am aware of that 
hospital, and appreciate the advance that that represents in 
the work from members of your district.
    I do think our work in Afghanistan is tracked quite 
closely. Health is a good sector example. We were very 
selective in working with the Ministry of Health. It took a 
number of years to build the financial management and 
procurement system and other tracking systems to give us the 
confidence that we could enter into the agreement we entered 
into with them last year.
    We have now started to flow resources through that 
ministry, but we track every procurement action quite 
carefully. We monitor every strategic decision. And in addition 
to that, we have a series of audits that take place, both from 
our IG and the Special Inspector General, to make sure that 
those resources are being spent effectively.
    As a result of our health sector investments, we believe we 
have more than tripled access to the health system for the 
population of Afghanistan, and we think that is a tremendous 
achievement. We are very optimistic in that space.
    Mr. Costa. Quickly, before my time expires, Mr. Chairman, I 
would like to see us maybe do more work as it relates to 
determining how well we are applying smart power, and to ensure 
that the money is going into the right places.
    Which brings me to Iraq. What would you say, as we ramp 
down and USAID ramps up in Iraq, are the lessons learned from 
the experience of the Department of Defense?
    Dr. Shah. Well, sir, I think there are a broad range of 
lessons learned. Some relate to contracting, and the risks of 
very large and poorly supervised----
    Mr. Costa. And you are going to apply those lessons?
    Dr. Shah. Absolutely. We have a contracting reform effort 
underway.
    Mr. Costa. And finally, what do you think your biggest 
challenges are this year?
    Dr. Shah. Well, our efforts in Afghanistan, Pakistan, and 
Haiti, as well as our health and food efforts. When you put all 
that together, we will severely strain our work force. And so 
building a strong work force and our ability to do that will be 
pretty critical to success.
    Mr. Costa. Thank you very much.
    Chairman Berman. Thank you, Mr. Costa. Your time, the 
gentleman's time has expired. And now the gentleman from 
Minnesota, Mr. Ellison, is recognized for 5 minutes.
    Mr. Ellison. Thank you, Mr. Chair. And thank you, Dr. Shah. 
And let me add my voice to everybody who has thanked you and 
the administration for the speedy response in Haiti.
    I represent Minneapolis, Minnesota, and we have a large 
Somali community there. And they are all--not all, but mostly 
all concerned about, you know, what is going on in Somalia.
    And I realize that the United States reduced its funding to 
Somalia last year after OFAC expressed fear that the extended 
supply line in insurgent-heavy areas where aid agencies were 
operating meant that aid could be diverted to al-Qaeda-linked 
groups.
    But on the other side of the coin, the people at the U.N. 
have expressed concern about that, because it results in a net 
reduction to food to people who need it desperately.
    What are the things that you think could be done to 
straighten this situation out? And do you care to offer some 
views on this?
    Dr. Shah. Certainly, thank you. Well, first I will start by 
saying that we will follow and respect the law and the guidance 
around protecting and stewarding effectively U.S. resources.
    We have been in a very in-depth conversation with the World 
Food Program, and they have made it--they are our primary food 
distribution partner, as you point out. And they have been very 
clear with us that this is not, that our policies are not 
impeding in any way their capacity to distribute food at this 
time. They are not distributing food more aggressively in 
Southern Somalia for their own safety, security, and logistics 
capacities to do so in a difficult operating environment. So 
that is not the current constraint.
    We will work with them, if that becomes the constraint, and 
they have the ability to distribute food that we have to offer 
to them. If they agree to do that, then we will work with them 
to make sure we have a policy in place that supports those 
efforts.
    Mr. Ellison. Well, I am going to just submit this article 
for the record, with unanimous consent.
    Chairman Berman. Without objection, it will be included in 
the record.
    [The information referred to follows:]Ellison 
FTR deg.



    Mr. Ellison. And I will send it to you. And perhaps we 
could flesh out a stronger answer, because I would like to get 
to the bottom of this. Because it seemed that there was some 
sort of technical requirements that we are being restricted, 
and I am sure you are aware of the complaint. It sounds like 
you are saying that it may be not a valid complaint. But we 
will----
    Dr. Shah. Yes. Okay, I am sorry. What I was suggesting is 
we have worked through that, and they are now in a different 
circumstance.
    Mr. Ellison. Okay.
    Dr. Shah. And the circumstance they are in right now, and 
we are in very direct communication, is that that is not an 
operating issue any more.
    Mr. Ellison. That is great, great. Next is, you know, thank 
you for the work that you do to support the people in Gaza. Do 
you think that USAID could be more effective at its work if 
USAID personnel were able to enter Gaza? Have you reviewed a 
process by which USAID personnel might actually be able to 
enter, and not just work through surrogates?
    Dr. Shah. Well, as a general principle, we do believe that 
our presence allows for improved effectiveness. We are 
reviewing a broad range of things we can do to improve the 
operations in Gaza, that include working with partner agencies, 
U.N. agencies more aggressively; working the diplomatic 
channels to reduce some of the issues in that department.
    Mr. Ellison. I am sorry, Doctor. USAID is working through 
surrogates now. That is already happening. I want to know, do 
you think it would be an advantage to having USAID personnel in 
Gaza, you know, since we are already in other tough areas, like 
Afghanistan, Iraq, and others?
    Dr. Shah. Well, I think the core constraint for us right 
now is actually mobility, getting items in, and a series of 
specific issues with respect to interference from Hamas and 
others in that environment.
    In that context, it is not clear that sending our people in 
is the immediate resolution to that. I think the immediate 
resolution to that is solving those problems as a precondition 
to that. And so we are working with others to do that.
    I am happy to review this more specifically, though, and 
come back to you with a more specific answer.
    Mr. Ellison. Yes. And you know, there are, I mean USAID 
does operate in Gaza. And do you feel that the UNRWA is doing 
all it can to keep materials and supplies away from Hamas?
    Dr. Shah. Well, you know, we believe UNRWA is an incredibly 
important partner, and needs to be successful at their efforts. 
And so we work in coordination with them.
    You know, I think we all can do a better job at any number 
of things in Gaza, which is a very difficult operating 
environment for the reasons I was identifying.
    Mr. Ellison. Thank you, Doctor.
    Chairman Berman. The time of the gentleman has expired. And 
the gentleman from New York, Mr. McMahon, is recognized for 5 
minutes.
    Mr. McMahon. Thank you, Mr. Chairman, and Director, it is 
good to see you again. And I am sure I want to join in that 
chorus of all those who have thanked you and your agency for 
the great work you are doing in Haiti in responding to that 
emergency there, as well. And I know the people of Chile need 
your assistance, as well, and that America is doing that. And 
you kind of put a little polish on the reputation of our 
country being able to respond in an effective manner, and that 
is something that the American people are grateful for.
    I also want to thank you for your assistance in allowing 
the New York City Search and Rescue Team to get down there to 
Haiti. And as you know, we put in a resolution recently, under 
the chairman's leadership, commending USAID and the civilian 
emergency response team, as well as the military response team. 
And we are grateful for that.
    Dr. Shah, I want to follow up a little bit on the Gaza 
questions that my colleague from Minnesota was asking. The 
President's request included $400.4 million in economic 
assistance for the West Bank and Gaza to ``strengthen the 
Palestinian Authority as a credible partner in Middle Eastern 
peace, and continue to respond to humanitarian needs in Gaza.''
    The request also states that this assistance will ``provide 
significant resources to support the stability of the 
Palestinian Authority, economic development into the West Bank, 
and increase the capacity of the Palestinian Authority to meet 
the needs of its people.''
    Dr. Shah, I would like to reiterate the importance of 
vetting this funding, and of course, supporting Israel. Just 
yesterday the U.N.'s Under Secretary for Humanitarian Affairs, 
John Holmes, dismissed Hamas's cross-border raid in 2006, the 
kidnapping of Staff Sgt. Gilad Shalit, and Hamas's unacceptable 
calls for Israel's destruction by condemning Israel. Of course, 
he completely neglected to mention the fact that despite 
Hamas's aggression, Israel allows daily shipments of food, 
medicine, and other supplies.
    Given these statements, and to follow up again to my 
colleague from Minnesota, how will USAID make sure that this 
funding does not end up in the hands of terrorists, 
specifically when we are partnering with organizations like 
UNRWA? What sort of safeguards are in place? And if you can be 
as specific as possible.
    And also, if you could provide an assessment of the 
effectiveness of USAID to Palestinians over the past several 
years. Which economic projects have been effective, and which 
have not? Has U.S. assistance helped increase popular support 
from moderate Palestinians in the West Bank, a goal which we 
all support? And what role is United States aid playing in 
helping to strengthen governing institutions in the West Bank? 
Basically, are we making a positive impact?
    Dr. Shah. Thank you for those comments with respect to 
Haiti, and the questions with respect to Gaza and the West Bank 
and Israel.
    You know, we do have, as I had noted, we have a very 
rigorous system for vetting partners, and for tracking any cash 
disbursements all the way through to their end use. On partner 
vetting, we have a very sophisticated system; it has been in 
place for more than 2 years. It tracks the names of all our 
partners, that clearly vets all key personnel in any partner 
organization against a larger database, and that allows us to 
follow up on any positive hits that occur in that tracking 
system.
    After we get any positive hits, we have an aggressive 
process of investigation and review before going forward. So 
that is a very robust system.
    The cash tracking system is similarly robust. We track any 
authorized disbursements. We transfer resources through an 
Israeli-based banking account into a special Treasury account 
in a Palestinian bank, and then we monitor all flows out of 
that account by every single disbursement being tracked 
specifically to its end use.
    Most of these disbursements, or nearly all of these 
disbursements are used to pay off creditors, so those resources 
go back out to other places.
    The question with respect to how are we coordinating with 
other partners, and what can we do to improve effectiveness, I 
will just say I spoke to John Holmes before he went to make the 
point that you are making, that our goal is about effectiveness 
in that environment, and that we need to look at the whole 
picture. It is the PRM program that primarily partners with 
UNRWA, and not USAID, although we believe that that is an 
important partnership going forward. So we will continue to 
have those safeguards in place.
    On effectiveness, you know, there are some areas we think 
have been more effective than others. Health and education have 
been perhaps more effective than the full portfolio of 
infrastructure investments, which are more complex to 
implement, although there have been some success stories there, 
as well, in the West Bank in particular.
    In Gaza, with the mostly humanitarian mission, it is a 
different operating environment.
    Chairman Berman. The time of the gentleman has expired. And 
with an impressive show of efficiency of time, Mr. Connolly, 
within 45 seconds after entering the room, is recognized for 5 
minutes of questioning.
    Mr. Connolly. Thank you, Mr. Chairman. I am sorry I am 
late, but we had a weekly breakfast meeting with the Speaker 
and the freshman class, and it went a little bit over. So 
please forgive me, Dr. Shah, for coming in so late. And I thank 
the courtesy of the chairman for allowing me to continue 
nonetheless.
    Dr. Shah, one of the concerns I certainly have, and I know 
other members of the committee do as well, is that in some 
ways, USAID has been hollowed out in the last decade. And I 
would hope that part of your mission is to turn that around.
    We had Secretary Clinton here in her first appearance 
before the committee--she has been here since--who is certainly 
committed to doing that. But we have seen, for example, a 
proliferation of aid-related missions that are not, however, 
part of USAID. The Millennium Project, and the AIDS Project, 
and on and on. I would even argue that an awful lot of the sort 
of funds that are used by the military in Afghanistan and Iraq 
really ought to be projectized aid, and they are being managed 
by our military, and hopefully well. But those sums are now so 
substantial, one is concerned about what could go wrong, and 
would maybe preferably have them in the hands of professionals.
    I wonder if you could address that subject, that whole 
question of how do we consolidate, how do we make sure you are 
the go-to person for bilateral and multi-lateral U.S. 
assistance? And that we remake USAID into a cutting-edge 
development agency that actually does something, and isn't just 
a place that facilitates contracts with others?
    Dr. Shah. Thank you very much for that comment and that 
statement. I believe that right now is an incredibly unique 
time to seize the opportunity to rebuild USAID as the world's 
premiere development agency. I think we have a President and a 
Secretary and an administrator completely committed to that 
goal, and we have such strong leadership and support in the 
congressional committees and in Congress to achieve that 
outcome.
    I also believe development is a discipline. And I think it 
is a professional discipline that needs to benefit constantly 
from the learnings of the past and the learnings of the 
present. And we need to represent excellence in the practice of 
that discipline on behalf of all development activities.
    Our game plan for reestablishing our effectiveness and our 
transparency, our accountability and our operational 
excellence, is really to focus on a handful of strategic 
priorities. We will focus our work in Afghanistan and Pakistan 
and try to show clear results against clear strategic metrics, 
in Haiti and in our series of key issues, like health, food, 
security, and climate change.
    In each of these areas, USAID can show, through 
restructuring how we do our work, that we can have more impact 
for less; that we can serve as a whole of government platform 
that invites in other partners in a manner that is directed 
against specific goals and specific outcomes, and that makes 
tough choices about how we use resources so we get the most 
bang per buck of our spending, as we tried to do in the relief 
effort around Haiti.
    We are also pursuing a set of operational improvements, and 
I want to thank the Congress for its leadership in allowing us 
to have the Development Leadership Initiative and rebuild the 
actual Foreign Service Corps of this agency, which you are 
right to point out has been decimated over the past 15 years.
    We think we have a strong position. We have more than 4,000 
Foreign Service nationals that represent people with PhDs and 
medical degrees, and are entirely capable leaders that any 
other private company would think of as a tremendous core 
asset, for a more globally interconnected world.
    We need to rebuild our Foreign Service. We are doing that 
at the mid-career technical level, and we are doing that 
through the DLI.
    Mr. Connolly. If I may interrupt you, because my time is 
going to run out, but count me as an ally in that effort.
    Dr. Shah. Thank you.
    Mr. Connolly. The lead development agency, as far as I am 
concerned, in the United States Government has to be USAID. Not 
the State Department. You are the hands-on guys, you are the 
people with the experience, and you just enumerated that. And 
that is what we have got to work with.
    In my 49 seconds left, one thing I just want to sort of put 
in your cap. USAID does provide funding both to NDI and IRI 
through various spigots. One of the concerns I have had about 
their work is that democratization works from the bottom up, 
not the top down. I would like to see a much enhanced effort at 
working with local governments in those programs.
    Quite frankly, I think we haven't done such a good job over 
the years in doing that. We have tried, but it is a hard 
mechanism. But they are going to take their lead from where the 
money flows. And I would hope that you would take a look at 
that. Because I think we have the, if we really mean it about 
democratization, the place you build that is at the local 
level.
    Thank you, Mr. Chairman, my time is up.
    Dr. Shah. Thank you.
    Chairman Berman. The gentleman's time has expired. I thank 
him for echoing some of my sentiments on these issues, an 
unusual occurrence. And given the time if it is all right with 
you, I am going to recognize myself. No, I am sorry, Mr. 
Rohrabacher is here. You are next, Mr. Rohrabacher. The 
gentleman is recognized for 5 minutes.
    Mr. Rohrabacher. Thank you, Mr. Chairman. How much aid have 
we provided to Afghanistan since 2001?
    Dr. Shah. I am not sure of the precise number since 2001.
    Mr. Rohrabacher. Well, how much have we provided this year?
    Dr. Shah. Well, this year we are proposing, in the Fiscal 
Year 2011 budget, that we would be spending $3.9 billion. That 
is down from $4.4 billion in 2010, when you include the 
supplemental amount with the enacted amount.
    Mr. Rohrabacher. Okay. And how much will we be providing 
Iraq?
    Dr. Shah. I believe that is going down, as well, from $700 
million to around $400 million, but I will double-check those 
numbers for you.
    Mr. Rohrabacher. So with Iraq it is going to be 400. And 
what are some of the programs we are spending $400 million for 
in Iraq?
    Dr. Shah. Which programs are priorities in Iraq?
    Mr. Rohrabacher. Right.
    Dr. Shah. We have, well, our immediate priority is support 
for the elections, and successfully completing the elections. 
We are also supporting the potential government transitions and 
ministries through a support contract that will work in the 
aftermath, that are currently up and running, but will also 
continue through that critical 4- to 6-month period after the 
election. And in addition to that, we have a number of programs 
in health and education, economics and agriculture in 
particular.
    Mr. Rohrabacher. Do you have the figures with you in terms 
of how much we have spent, how much aid has been spent in Iraq 
since the liberation?
    Dr. Shah. No, not at the top of my fingertips, but I will 
follow up on that.
    Mr. Rohrabacher. Maybe you can tell us of the almost $4 
billion, $3.9 billion that will be spent in Afghanistan, what 
are some of the programs that Afghanistan will be receiving?
    Dr. Shah. Sure. Well, we have restructured our Afghanistan 
portfolio to be aligned with and very much a part of the 
President's Afghanistan strategy. We have had two major 
strategic reviews in March of last year, and in December, when 
the President's strategy was announced by the President.
    The priorities going forward are agriculture, which is the 
largest employer of individuals outside of the government in 
Afghanistan. Our investments there have peaked this year at 
around $820 million; will come down to $425 million in the 2011 
spending. But that continued pipeline of investment will be the 
single-greatest investment in productivity centers and in 
agriculture. And we are encouraged by some of the early 
outcomes with respect to performance in that sector.
    We also have major investments, and will continue with 
major investments, in health and education. The health sector 
is a sector where we are partnering closely with the Ministry 
of Health. It has been a number of years in the making to 
develop a really robust partnership with strong auditing trails 
and financial accountability for our spending, and our 
priorities are on building an effective tertiary-care health 
system and effective primary-care health system, and getting 
health access out into rural areas to serve the needs of women 
and children in particular, to most effectively reduce some of 
the disproportionate health harms in that context.
    We have a broader range of activities in partnership with 
other departments and the State Department that include 
security, rule of law, counter narcotics. But the USAID-
administered programs will focus in the areas I described.
    Other economic growth priorities include roads and power, 
as well.
    Mr. Rohrabacher. So how much did you say was being spent on 
agriculture?
    Dr. Shah. Well, the Fiscal Year 2010, when you include the 
supplemental, is around 820. And the Fiscal Year 2011 request 
is around 425. That is agriculture and food security, including 
alternative livelihoods in rural communities, not including 
counter narcotic activities.
    Mr. Rohrabacher. Not including----
    Dr. Shah. Not including counter narcotic.
    Mr. Rohrabacher. And could you give us an example of some 
of the agricultural spending that we have got?
    Dr. Shah. Sure. We have programs, well, first we work in 
close partnership with the U.S. Department of Agriculture, 
where they are providing significant technical support to 
ministries and the public sector system. And we are very 
focused on supporting the private sector.
    We have farmer support programs that are getting seed and 
fertilizer out to farmers through a voucher-based private-
sector system. We have programs to help farmers produce high-
value products, like apples, and then export them in the 
region, so they have sources of cash and income in addition to 
the production of basic foodstuffs. And we are working to 
develop improved access to agricultural credit, so that farmers 
can really support their own pathway out of poverty through 
agricultural development.
    Mr. Rohrabacher. Thank you very much, Mr. Chairman. Thank 
you.
    Chairman Berman. The time of the gentleman has expired. I 
am going to recognize myself for 3 minutes, and Mr. Smith for 3 
minutes.
    And I just want to follow up a little more specifically on 
some of the points raised by my colleague from Virginia. In the 
context of what the Secretary has referred to as a key foreign 
policy priority--that is, development and rebuilding USAID as 
an institution--specifically, could you talk about the 
restoration of a budget development capacity and a policy 
planning capacity within USAID? And also, in the rebuilding of 
the staff with the goal of doubling the number of Foreign 
Service officers, to the development leader initiative, your 
priorities for hiring and recruitment of new people at USAID.
    Dr. Shah. Thank you, Mr. Chairman. We have a strong effort 
underway, through the QDDR, to partner some of our new staff 
with the members of the F Bureau, to identify really a revised 
and improved budget process that would allow USAID to be 
financially accountable for the resources it spends.
    It goes without saying that in order to be the world's 
premiere development agency, we have to be able to account for 
our spending, and be held to account for resources that are 
spent in a transparent and clear manner. And so we are actively 
working on that, through the QDDR and through other processes.
    On the policy----
    Chairman Berman. What about on the impact of developing--
the accountability is very important. But the question is, are 
you handed a budget, or do you get to develop a budget?
    Dr. Shah. We will get to a place where we have the 
opportunity to develop a budget, working in partnership with 
others. But we clearly need to be able to make strategic 
resource tradeoffs in order to be held accountable for the 
performance of the agency.
    On policy planning, similarly, sir, we are building an 
active policy-planning capacity. I am pleased to announce we 
have had real leaders in the field, like Ruth Levine from the 
Center for Global Development, that just joined our team. We 
hope to have a world-class innovative evaluation capacity that 
helps us learn from direct program beneficiaries, through text 
messaging all the way through doing a range of other efforts, 
to do randomized control program trials to understand the 
impact of our work most effectively, and rebuild our policy 
planning and evaluation capacities.
    On staff, we have now hired in 420 individuals through the 
DLI. We respect the great leadership Congress has provided. My 
priorities are to sort of relook at how we do deployments, and 
more rapidly deploy the DLI individuals to our core strategic 
and operational priorities, and shorten the length of time that 
they are in the current training program.
    Chairman Berman. My time has expired. The gentleman from 
New Jersey is recognized for 3 minutes.
    Mr. Smith. Thank you very much, Mr. Chairman.
    Dr. Shah, as you know, WHO estimates that up to 70 percent 
of health care in Africa is provided by faith-based 
organizations. The Catholic health care alone in Africa 
constitutes about 40 percent. We know that a number of other 
groups, Samaritan's Purse, World Vision and others are all 
doing yeoman's work there. They provide expertise, 
infrastructure, trust to the people, and an enormous number of 
volunteers that otherwise might not be utilized. And their 
ability to expand is incredible.
    What is your view of increasing the partnership with faith-
based organizations and NGOs, especially as it relates to 
implementing the Global Health Initiative?
    Dr. Shah. Thank you for that observation. I believe that 
the partnerships and bringing those partnerships into a whole 
health system construct will be critical to the effectiveness 
of the Global Health Initiative. So I would see whether it is 
in Kenya or other countries, where there are significant faith-
based organizations running hospitals and doing that work, and 
where we are involved in providing support. Our goal is to 
bring that support within the context of the health system, and 
to make those more formally part of an integrated national 
health plan.
    So it absolutely involves expanding and deepening our 
partnership.
    Mr. Smith. I hope you would be mindful that in some 
countries where church opposition to human rights abuses has 
been very strong, when integrated partnerships are formed and 
the government health ministries and others might be less than 
quick to want to embrace the faith-based community, I would 
hope that we would play a very positive role in suggesting, you 
know, when it comes to health care, we want the maximum impact.
    And certainly it seems to me--and I know in places, and I 
have been throughout Africa--usually when there is corruption 
or human rights abuse by a dictatorship or an authoritarian 
regime, it is reflected in other parts of that government when 
it comes to partnering. So they shun those partnerships in some 
instances. So I would hope that we would help to overcome that.
    Dr. Shah. Thank you.
    Mr. Smith. And finally, in 40 seconds, in reading the 
enterprise results reporting, I understand that there is some 
real problems with meeting the 50 percent goal of providing 
micro-financing to the poorest of the poor.
    Could you take a second look at how we might be able to 
reach out to those NGOs that are actually meeting, you know, we 
had a big fight, we did the reauthorization in 2004. I know, 
because that was my bill. And there is a lot of tugs and give-
and-take.
    But when it comes to the NGOs that are there on the ground, 
providing maximum benefits to the poorest of the poor, the goal 
is a real one. I think it is achievable. So please take a 
second look at that.
    Dr. Shah. We will.
    Chairman Berman. The time of the gentleman has expired.
    Because of the service for our late colleague, Congressman 
Murtha, we are going to adjourn the hearing. We thank you very 
much for being here. We look forward very enthusiastically to 
working with you in the future.
    [Whereupon, at 10:48 a.m., the committee was adjourned.]
                                     

                                     

                            A P P E N D I X

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     Material Submitted for the Hearing RecordNotice deg.



                               Minutes deg.
                               
                               
                               
                               
                               Berman statement deg.
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                               Watson statement deg.
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                               Engel QFRs deg._

                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               Ros-Lehtinen QFRs deg._

                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               Lee QFRs deg._

                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               Bilirakis QFRs deg._

                               
                               
                               
                               
                                 
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