[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]


 
                    BUDGET OVERSIGHT: EXAMINING THE
         PRESIDENT'S 2012 BUDGET REQUEST FOR EUROPE AND EURASIA

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


                                HEARING

                               BEFORE THE

                   SUBCOMMITTEE ON EUROPE AND EURASIA

                                 OF THE

                      COMMITTEE ON FOREIGN AFFAIRS
                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             FIRST SESSION

                               __________

                             APRIL 14, 2011

                               __________

                           Serial No. 112-43

                               __________

        Printed for the use of the Committee on Foreign Affairs


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

                                 ______


                  U.S. GOVERNMENT PRINTING OFFICE
65-799                    WASHINGTON : 2011
-----------------------------------------------------------------------
For sale by the Superintendent of Documents, U.S. Government Printing Office, 
http://bookstore.gpo.gov. For more information, contact the GPO Customer Contact Center, U.S. Government Printing Office. Phone 202ï¿½09512ï¿½091800, or 866ï¿½09512ï¿½091800 (toll-free). E-mail, [email protected].  


                      COMMITTEE ON FOREIGN AFFAIRS

                 ILEANA ROS-LEHTINEN, Florida, Chairman
CHRISTOPHER H. SMITH, New Jersey     HOWARD L. BERMAN, California
DAN BURTON, Indiana                  GARY L. ACKERMAN, New York
ELTON GALLEGLY, California           ENI F.H. FALEOMAVAEGA, American 
DANA ROHRABACHER, California             Samoa
DONALD A. MANZULLO, Illinois         DONALD M. PAYNE, New Jersey
EDWARD R. ROYCE, California          BRAD SHERMAN, California
STEVE CHABOT, Ohio                   ELIOT L. ENGEL, New York
RON PAUL, Texas                      GREGORY W. MEEKS, New York
MIKE PENCE, Indiana                  RUSS CARNAHAN, Missouri
JOE WILSON, South Carolina           ALBIO SIRES, New Jersey
CONNIE MACK, Florida                 GERALD E. CONNOLLY, Virginia
JEFF FORTENBERRY, Nebraska           THEODORE E. DEUTCH, Florida
MICHAEL T. McCAUL, Texas             DENNIS CARDOZA, California
TED POE, Texas                       BEN CHANDLER, Kentucky
GUS M. BILIRAKIS, Florida            BRIAN HIGGINS, New York
JEAN SCHMIDT, Ohio                   ALLYSON SCHWARTZ, Pennsylvania
BILL JOHNSON, Ohio                   CHRISTOPHER S. MURPHY, Connecticut
DAVID RIVERA, Florida                FREDERICA WILSON, Florida
MIKE KELLY, Pennsylvania             KAREN BASS, California
TIM GRIFFIN, Arkansas                WILLIAM KEATING, Massachusetts
TOM MARINO, Pennsylvania             DAVID CICILLINE, Rhode Island
JEFF DUNCAN, South Carolina
ANN MARIE BUERKLE, New York
RENEE ELLMERS, North Carolina
VACANT
                   Yleem D.S. Poblete, Staff Director
             Richard J. Kessler, Democratic Staff Director
                                 ------                                

                   Subcommittee on Europe and Eurasia

                     DAN BURTON, Indiana, Chairman
ELTON GALLEGLY, California           GREGORY W. MEEKS, New York
GUS M. BILIRAKIS, Florida            ELIOT L. ENGEL, New York
TIM GRIFFIN, Arkansas                ALBIO SIRES, New Jersey
TOM MARINO, Pennsylvania             THEODORE E. DEUTCH, Florida
JEAN SCHMIDT, Ohio
TED POE, Texas


                            C O N T E N T S

                              ----------                              
                                                                   Page

                               WITNESSES

Mr. Daniel Rosenblum, Coordinator of U.S. Assistance to Europe 
  and Eurasia, Bureau of Central and South Asian Affairs, U.S. 
  Department of State............................................     8
Ms. Susan Elliott, Deputy Assistant Secretary, Bureau of European 
  and Eurasian Affairs, U.S. Department of State.................    16
Ms. Paige Alexander, Assistant Administrator, Bureau for Europe 
  and Eurasia, U.S. Agency for International Development.........    20
Ms. Nisha Biswal, Assistant Administrator, Bureau for Asia, U.S. 
  Agency for International Development...........................    26

          LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING

The Honorable Dan Burton, a Representative in Congress from the 
  State of Indiana, and chairman, Subcommittee on Europe and 
  Eurasia: Prepared statement....................................     4
Mr. Daniel Rosenblum: Prepared statement.........................    11
Ms. Susan Elliott: Prepared statement............................    19
Ms. Paige Alexander: Prepared statement..........................    23
Ms. Nisha Biswal: Prepared statement.............................    29

                                APPENDIX

Hearing notice...................................................    50
Hearing minutes..................................................    51
Questions submitted for the record to Mr. Daniel Rosenblum and 
  Ms. Susan Elliott by the Honorable Dan Burton..................    52
Questions submitted for the record to Mr. Daniel Rosenblum by the 
  Honorable Ted Poe, a Representative in Congress from the State 
  of Texas.......................................................    55


  BUDGET OVERSIGHT: EXAMINING THE PRESIDENT'S 2012 BUDGET REQUEST FOR 
                           EUROPE AND EURASIA

                              ----------                              


                        THURSDAY, APRIL 14, 2011

                  House of Representatives,
                Subcommittee on Europe and Eurasia,
                              Committee on Foreign Affairs,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 2:30 p.m., in 
room 2200, Rayburn House Office Building, Hon. Dan Burton 
(chairman of the subcommittee) presiding.
    Mr. Burton. Good afternoon. The Subcommittee on Europe and 
Eurasia will come to order.
    Last week's budget debate between Republican leadership and 
the White House showed how divided and contentious discussions 
about our spending have become. Democrats like my colleague 
here continue to ask for bigger government than this Nation can 
afford. We don't collect enough revenue to meet spending, and 
the revenue we do collect largely goes to paying interest on 
the debt which foreign nations hold.
    Contrary to the belief held by some on Capitol Hill, the 
average American doesn't want to have excess funds to pay for a 
bigger government. Neither could we ask Americans to pay more, 
nor borrow, greater amounts by mortgaging the future of our 
society and our children and our grandchildren. I am sure you 
have all heard that.
    As our budget problems become more alarming, President 
Obama has ignored his own advisors on the debt, refusing to 
adopt many of the recommendations. Ben Bernanke, Erskine 
Bowles, and Alan Greenspan have said that the President's 
spending is not sustainable. The Congressional Budget Office 
agrees with this assessment. However, the President recently 
handed Congress a bloated budget request for 2012. President 
Obama has already overspent by $830 billion in the first 6 
months of this year, the 2011 budget year, with the 
Congressional Budget Office projecting that the total 2011 
deficit spending will reach $1.5 trillion. By contrast, the 
entire debt that was accrued between 2000 and 2008 was only 
$1.76 trillion. So what we incurred as debt between 2000 and 
2008 was not much more than we are incurring just this 1 year.
    So we have got a real fiscal problem. The deficit spending 
of the U.S. Government is out of control. As members of this 
subcommittee, we have an obligation to the American people to 
conduct responsible oversight of the portion of the U.S. budget 
under this subcommittee's jurisdiction.
    I know the State Department budget is less than 1 percent 
of GDP. I don't understand those who point to the relatively 
small size of the State Department budget as being itself a 
justification. No amount of taxpayer money is too small to go 
unjustified.
    The proposal we discuss today increases the core State 
Department budget to $53 billion and represents an increase of 
23 percent, $10 billion over the Department's 2008 budget of 
$43 billion. And that is one of the things I know that you know 
we are concerned about. We want to stay as close to the 2008 
budget as possible because of the overspending, and a 23 
percent increase just isn't going to cut it.
    I have heard from some who still want more spending, or to 
protect their own share of the Federal pie. And I have told 
them the same thing, that we just have to cut spending, there 
is no more pie left.
    Today, I will ask our witnesses to identify areas of 
essential spending and for them to prioritize programs and 
needs. And I know you are all qualified to do that. We must 
curtail some programs, even if they are noble and justified, 
because we just don't have the money. The reasoning that we are 
doing great things and it helps our friends, those are good 
reasons, but we can't justify a total deficit that has 
increased by $4.19 trillion in the last 2\1/2\ years. I mean, 
it boggles my mind.
    We have continuously overfed a beast whose burden will 
consume us all, yet, there is little urgency to do anything 
about it. So, I ask everyone, Republicans and Democrats, to 
raise the bar of what constitutes justifiable spending so that 
``essential'' truly means ``essential,'' and that the only 
spending done is for programs that are truly vital to our 
national interest.
    It is with relief that I see the budget request that is 
pertaining to the jurisdiction of this subcommittee, decline 
from previous years. I understand that the efforts of the State 
Department and the Agency for International Development to 
develop democracy, rule of law, and stronger government 
institutions, have paid off, meaning the need for many programs 
no longer exists.
    However, there still exists a need for concentrated efforts 
in some countries that continue to receive assistance. The 
Balkans, which have made great progress in the last 15 years, 
still need attention to help permanently solidify democracies 
and ascension into the transatlantic community. The Caucasus, 
which have greater needs, still struggle with diversifying 
economic and political relations beyond their historic 
connections to Moscow. And we met one of their Ambassadors 
today.
    The Central Asian countries continue to transition at a 
slower pace than anticipated, as they attempt to balance the 
needs for government reforms, protection of rights, stronger 
democracy and economic development, after years of Soviet 
influence.
    I recognize that reforms and development will take time as 
well as funding by the United States and the international 
community of nations. For this reason, we should be careful 
about how we spend our precious dollars. We should focus on 
productivity and efficiency in our work with the like-minded 
actors. Specifically, I applaud U.S. efforts in Kyrgyzstan, 
where democratic reforms offer so much promise. I also commend 
U.S. support of Georgia as it deals with, to put it delicately, 
a very overbearing neighbor. And, I just met with their 
Ambassador, who seems like a pretty dedicated individual. I 
believe in working together and providing assistance to 
countries that are like-minded in the belief that we will get 
the most return on our dollar.
    In that vein, I question the necessity to spend $72 million 
in Russia, where it seems our taxpayer dollars have little 
chance of making a lasting impact. Additionally, Ukraine, 
Kazakhstan, among others, are also concerns as to how effective 
our efforts can truly be when they and others seem to sway 
between democracy and autocracy.
    I do not advocate for boarding up USAID offices and 
removing the United States from the region. However, less can 
be more. Throwing more taxpayer dollars at problems does not 
guarantee favorable results.
    I thank the witnesses for being here today, and agreeing to 
visit the Hill and testify in such a turbulent time of debate 
between Congress and the Obama administration, regarding 
spending.
    I will recognize all four of you as dedicated public 
servants to the United States, and I will not throw any rocks 
at any of you. That is not in the script. But nevertheless, any 
criticism you might hear today is not a personal, but 
institutional concern. However, I do take exception to how 
American policymakers in general continue to spend taxpayer 
money so easily and at such high rates, the likes of which this 
country has never seen before. This has to come to an end 
because we are just about broke.
    [The prepared statement of Mr. Burton follows:]

    
    
    
    
    
    
                              ----------                              


    Mr. Burton. And now I would like to recognize my friend for 
a long, long time, Mr. Engel.
    Mr. Engel. Thank you, Mr. Chairman. And I know that the 
bells have gone off, so I will try to condense everything. 
First of all, I want to welcome our witnesses. All have long 
and distinguished----
    Mr. Burton. Excuse me. I don't want to interrupt you, but I 
have to. On the clock, we have 10 minutes until this vote is 
over, so I will try to adjourn here or recess when we have 5 
minutes to go. Is that all right?
    Mr. Engel. That is good. I want to thank you for being 
here. And I am sitting in for Mr. Meeks today who has a family 
emergency. And he sends his best and he is sorry he is not able 
to be here.
    Mr. Burton is one of my best and closest friends, but we 
don't agree much on politics. We do actually agree a lot on 
international politics. But domestic spending is a little bit 
different. I know that we have to tighten our belts. We can't 
just keep spending and spending and tighten our belts. But I 
don't want to be penny-wise and pound-foolish.
    We can spend $1 trillion on a war or on two wars or on 
three wars, or $1 billion to prevent a war. So I think that 
when we are talking about foreign assistance, I often wonder 
when I look and see all our people, our dedicated people around 
the world--and I know Mr. Burton has too--I don't know how they 
do it. I just don't know how we do it.
    This is a very important time and I think that we need to 
put our money where our mouth is. I think cutting foreign 
assistance in USAID is a disaster, quite frankly, because 1 
percent of the budget--if you ask the American people, they 
think it is 15 percent of the budget. I have seen these 
different surveys. So I think now, at a time when we have such 
a crisis going on in the Middle East, when we have difficulty 
with states of the former Soviet Union, when we have all kinds 
of problems, I don't think we should throw good money after 
bad. But I don't think that we should just, you know, cut for 
the sake of being cut. And I know that I feel very strongly 
that the whole discussion shouldn't just be about cutting. Yes, 
it should be about cutting partially. But it really is what our 
priorities are; how, you know, how equal can we be?
    I find difficulty with tremendous tax breaks at a time we 
are cutting everything. I think it has got to be a balance, and 
that is what I really object to. But the chairman and I--and we 
have been chairs and ranking members for each other and we have 
worked closely together, and we don't really disagree all that 
much when it comes to foreign policy. I believe in a robust 
foreign policy. I believe that the United States needs to be 
engaged. If we are not engaged, then our enemies will move in 
and they will be engaged. Russia is trying, time and time 
again--I am not saying Russia is an enemy, but Russia has its 
own interests and their interests are not necessarily ours.
    I chaired the Western Hemisphere Subcommittee, as did Mr. 
Burton, and we know that there are enemies in that area. We 
could start with Hugo Chavez and continue. The Chinese are 
always trying to invest and do these different kinds of things. 
So, if we don't--if there is a vacuum and we don't move in, 
shame on us, because we are really hurting our self-interest.
    So I think it is a delicate balance. You don't want to 
spend money that you don't have. On the other hand, you don't 
want to pull out programs that you know are very, very 
important.
    So while budgets are tight, U.S. assistance to the European 
countries still making the transition to democracy in market 
economies is very, very important. And many countries have 
graduated from our assistance programs. The leading Central 
European countries, Poland, Hungary, Czech Republic, Slovakia, 
and Slovenia don't need much more aid, if any at all. And 
still, though, some of the Balkan countries, the Caucasus and 
Central Asia, can still benefit from American help to 
strengthen their institutions and help their transition to a 
market economy.
    I would like to highlight only some of the key cooperation 
we have with our European partners. From pressure on Iran to 
the no-fly zone in Libya, to the massive commerce and cultural 
exchanges, our relations with the region that deepen our ties, 
are permanent. We need to continue our intense involvement with 
the EU and other partners in Europe, and assistance programs I 
believe are still very important.
    One of the questions I am going to ask you--and I have been 
very much involved in the Balkans throughout the 23 years I 
have been in Congress, and I have been one of the leading 
supporters of an independent Kosovo--I will ask you about the 
Enterprise Fund because the Albanians have returned a chunk of 
the Enterprise Fund. It has been very successful. Albanians in 
Albania and I want to talk about establishing an Enterprise 
Fund for Kosovo. I had heard that the days of the enterprise 
funds were over, but earlier this year I have learned that we 
are working on one for Egypt. So these are some things I would 
like to talk about.
    I promised the chairman I would be 5 minutes or less, and I 
am going to keep my promise. And I look forward to listening to 
you.
    Mr. Burton. We will stand in recess till the fall of the 
gavel, and we will be back. We have two votes. It shouldn't be 
too long.
    [Recess.]
    Mr. Burton. While Mr. Engel is coming, I will introduce our 
guests. Daniel Rosenblum is the Coordinator of the U.S. 
assistance to Europe and Eurasia in the State Department's 
Bureau of European Affairs, European and Eurasian Affairs. And 
Mr. Rosenblum oversees all U.S. Government assistance to more 
than 30 countries in Europe and Eurasia, with primary focus on 
the Balkans and the former Soviet Union, including Central 
Asia. Welcome, Mr. Rosenblum.
    Paige Alexander was sworn in as Assistant Administrator of 
the Bureau for Europe and Eurasia at the U.S. Agency for 
International Development on January 3 of this year. Ms. 
Alexander heads USAID's development efforts for Europe and 
Eurasia. Prior to her current position, she was Senior
    Vice President of IREX, an international nonprofit 
development organization. So thank you.
    Susan Elliott. Ms. Elliott is Deputy Assistant Secretary of 
Central Asia in the State Department's Bureau of South and 
Central Asian affairs. Ms. Elliott is a career Foreign Service 
officer and her posting includes Russia, Northern Ireland, 
Secretary Rice's office, Greece and Peru. That is interesting. 
They have got four countries with Secretary Rice right in the 
middle there. I don't understand that. Is that a country--
Secretary Rice?
    Ms. Elliott. I worked on her staff in between overseas 
postings.
    Mr. Burton. I understand. I am just pulling your chain 
there.
    Nisha Biswal is the Assistant Administrator for Asia for 
the USAID and oversees their efforts in Central Asia. Prior to 
her current position, Ms. Biswal was a staff member of the 
Foreign Operations Subcommittee on the House Appropriations 
Committee, and the director of InterAction, the largest 
alliance of U.S.-based development and humanitarian NGOs. I 
want to thank you very much for being here.
    I know he is on his way. Okay. As a matter of fact, there 
he is, folks. Let's hear it for my buddy. Okay.
    We will start with Mr. Rosenblum. Mr. Rosenblum, we will 
recognize you for 5 minutes.

    STATEMENT OF MR. DANIEL ROSENBLUM, COORDINATOR OF U.S. 
 ASSISTANCE TO EUROPE AND EURASIA, BUREAU OF CENTRAL AND SOUTH 
            ASIAN AFFAIRS, U.S. DEPARTMENT OF STATE

    Mr. Rosenblum. Thank you, sir. Chairman Burton, Congressman 
Engel, thanks for inviting us today to talk to you about our 
Fiscal Year 2012 budget request for foreign assistance to 
Europe, Eurasia and Central Asia. At today's hearing, I hope we 
can give you a good sense of how our assistance programs 
support U.S. foreign policy interests in ways that directly 
relate to the security and well-being of the American people.
    The President's Fiscal Year 2012 request for this region 
attempts to balance an awareness of budget constraints with a 
continued commitment to advancing stability, prosperity and 
democracy. Our request trims approximately $140 million from 
the budget for the entire region relative to our 2010 levels. 
My written testimony provides more detail about our request, 
and I would ask to submit it for the record.
    Mr. Burton. Without objection.
    Mr. Rosenblum. In my limited time, I will try to hit the 
key points.
    First, U.S. foreign assistance to this region has helped 
bring about a remarkable foreign policy success. Twelve of the 
formerly Communist states of Central and Eastern Europe are 
members of NATO; 10 of those 12 are now members of the European 
Union. These countries are among the most stalwart allies of 
the U.S. in the world. They recognize that the generous U.S. 
support for their reform efforts in the 1990s and the early 
2000s played an absolutely critical role in getting them to 
where they are today. That support also generated enormous 
goodwill in those countries so that today these are some of the 
most pro-American places on Earth.
    I would argue that the key to these successes has been 
consistent policy and resource support over the past 2 decades. 
The SEED Act and the FREEDOM Support Act were about transition 
from communism to democracy and free markets, and a strong 
commitment to that goal has spanned four administrations, 
Republican and Democratic, and has been supported by the 
Congress on a bipartisan basis.
    My second main point is that the job isn't done. We have 
learned over the past 20 years that the line from communism to 
democracy and free markets is not a straight one. We have 
encountered challenges and setbacks not anticipated in the 
early 1990s. Those who wrote the SEED Act, for example, never 
imagined the violent breakup of Yugoslavia and the consequences 
that we are still dealing with today. The conflict over 
Nagorno-Karabakh, between Armenia and Azerbaijan, civil war in 
Tajikistan, separatist movements in Moldova and in Georgia, 
have all left lasting scars.
    While a few countries experienced democratic breakthroughs 
over the past decade, a greater number of former Soviet 
countries have seen major backsliding on democracy as old 
authoritarian habits reasserted themselves.
    Meanwhile, a series of transnational threats have emerged. 
Criminal groups trafficking in narcotics, trafficking in 
persons and in weapons, filled vacuums left by receding State 
authority. Infectious disease, such as HIV/AIDS and drug-
resistant tuberculosis, began claiming lives. The risk of 
international terrorism is real, and porous borders of this 
region make it a potential conduit for extremists of all 
stripes.
    Mr. Chairman, Mr. Engel, this transition is a complicated 
process in which change will take longer, perhaps considerably 
longer in some countries than others. And we believe that U.S. 
engagement, while not in itself sufficient, is a necessary 
ingredient for achieving that transition goal.
    Third point. We are committed to the principle that foreign 
aid is not a permanent entitlement. Our job is to work 
ourselves out of a job. All nonmilitary assistance in the 
region is undertaken with an eye to graduating aid recipients 
when they have achieved a level of economic and democratic 
reform sufficient to ensure continued development. Eleven 
countries so far have graduated from U.S. assistance. And over 
the past decade we have developed a methodology for phasing out 
assistance to the rest, based on evaluating performance data 
collected by various international organizations.
    And with your permission, Mr. Chairman, we will submit for 
the record further information about this methodology.
    Mr. Burton. Without objection.
    Mr. Rosenblum. My fourth and final point is that we seek to 
always maximize the impact of the resources provided by the 
American taxpayer for these programs. And we do this in several 
ways: By constant monitoring and evaluation of programs so we 
can draw lessons from our past successes and failures; by 
seeking to get buy-in from governments in recipient countries, 
including in a few cases by actually getting them to share the 
costs of financing our technical assistance, and we can talk 
more about that later if you are interested; and by leveraging 
the work of other international donors, especially the European 
Union and the multilateral development banks.
    Mr. Chairman, let me close by emphasizing that what happens 
in Europe, Eurasia, and Central Asia matters to the United 
States. Criminal networks, WMD proliferation, infectious 
disease, these threats have a direct bearing on the security 
and well-being of American citizens.
    We also benefit if more of these countries become stable 
democracies with market economies that generate growth and 
thereby create trade and investment opportunities for American 
companies and potential jobs for American workers.
    We will continue to use the resources provided to us by 
Congress and the American people in the most effective way 
possible, always mindful of the very real resource constraints 
affecting foreign assistance. Thank you, sir.
    Mr. Burton. Thank you, Mr. Rosenblum.
    [The prepared statement of Mr. Rosenblum follows:]

    
    
    
    
    
    
    
    
    
    
    
    
                              ----------                              


    Mr. Burton. Ms. Elliott.

  STATEMENT OF MS. SUSAN ELLIOTT, DEPUTY ASSISTANT SECRETARY, 
 BUREAU OF SOUTH AND CENTRAL ASIAN AFFAIRS, U.S. DEPARTMENT OF 
                             STATE

    Ms. Elliott. Thank you, Chairman Burton, thank you 
Congressman Engel. As a graduate of the Indiana University and 
former resident of the State of New York, it is an honor for me 
to testify in front of you today. I am glad only the two of you 
are here.
    Mr. Burton. Your are a real politician.
    Ms. Elliott. As you mentioned, I am the Assistant Secretary 
of State in the Department of State's Bureau of South and 
Central Asian Affairs. I have responsibility for policy 
coordination with the countries of Central Asia.
    During my 20-year career in the Foreign Service, I have 
worked on a wide range of issues related to the countries of 
the former Soviet Union and have traveled extensively in the 
region.
    As Assistant Secretary of State Robert Blake underscored in 
his remarks to this committee last month, the United States has 
an important interest in promoting a stable, secure and 
prosperous Central Asia. Since the breakup of the Soviet Union, 
our primary policy goal in Central Asia has been to ensure that 
these newly independent countries remain sovereign and 
independent while helping them become stable, market-oriented 
democracies.
    The United States currently pursues a broad range of policy 
goals in Central Asia. Today, I would like to speak to you 
about the importance of the administration's goals for U.S. 
engagement and assistance in Central Asia.
    Our first goal is to engage the countries of Central Asia 
to cooperate with us in stabilizing Afghanistan. We believe 
that Central Asia plays a vital role in our Afghanistan 
strategy. Three of the five Central Asian states share borders 
with Afghanistan, and the Northern Distribution Network is an 
increasingly important route for transporting supplies to our 
troops in Afghanistan. The Central Asian countries already are 
contributing greatly to international efforts in Afghanistan, 
from supplying much needed electricity, to providing 
humanitarian assistance, to supporting educational 
opportunities to Afghan students. A stable future for 
Afghanistan depends on the continued assistance of its Central 
Asian neighbors and likewise, we believe, greater peace, 
stability, and prosperity in Afghanistan will ensure a stable 
prosperous future for Central Asia.
    Our second goal is develop stronger bilateral relationships 
with the countries of Central Asia in order to make progress on 
democracy and human rights. In December 2009, we announced our 
intention to hold annual bilateral consultations with each 
country in order to deepen our engagement with Central Asia. 
Over the last 1\1/2\ years, we have conducted these 
consultations with all of the Central Asian states except 
Kyrgyzstan, whose meeting is scheduled for later this year.
    These annual bilateral consultations offer a structured 
dialogue covering a full range of bilateral priorities and 
result in a work plan to address our key priorities and outline 
practical steps to advance U.S. policy. While pursuing these 
goals is often challenging, our engagement and our assistance 
is yielding important results. Last week marked the 1 year 
anniversary of the transition to a new government in 
Kyrgyzstan, and we are grateful that anniversary passed 
without--passed peacefully. Our assistance in engagement with 
the government and people of Kyrgyzstan over the last year has 
focused on addressing ethnic violence that boiled over last 
June. We also have tried to assist them to create conditions 
necessary for the first democratically elected Parliament in 
Central Asia to succeed, the administration's priority to work 
alongside other donors to bolster Kyrgyzstan's stability and 
solidify democratic reforms.
    Our third goal involves combating narcotics trafficking. We 
are developing a new counternarcotics initiative that will 
focus on assistance to governments in the region to create 
counternarcotics task forces. Our objective is to use 
intelligence collection and analysis and effective 
investigative teams to target organized traffickers, seize and 
confiscate their assets and bring them to justice.
    Mr. Chairman, we agree with you that we should be careful 
about how we spend our precious resources. We view our 
assistance funding to the region to be a critical tool in 
accomplishing our policy goals. We envision a future in which 
the United States and the countries of Central Asia work 
together for peace, security, democracy, and economic 
prosperity. We recognize that the pace of change can be slow 
and that our assistance should support programs oriented toward 
long-term meaningful results. But through our policy engagement 
and targeted assistance funding, we aim to strengthen our ties 
with these important countries and their people and advance 
U.S. interests in the strategically important region. Thank 
you.
    Mr. Burton. Thank you very much. It is nice to have an 
adopted Hoosier with us. We will forget about New York. You 
don't mind, do you?
    [The prepared statement of Ms. Elliott follows:]

    
    
    
    
                              ----------                              


    Mr. Burton. Ms. Alexander.

  STATEMENT OF MS. PAIGE ALEXANDER, ASSISTANT ADMINISTRATOR, 
 BUREAU FOR EUROPE AND EURASIA, U.S. AGENCY FOR INTERNATIONAL 
                          DEVELOPMENT

    Ms. Alexander. Thank you, Chairman Burton, Ranking Member 
Engel and members of the subcommittee. Thank you for inviting 
me here today to discuss USAID's successes in Europe and 
Eurasia, the persistent development challenges, and our future 
direction in a period of resource constraints.
    The President's Fiscal Year 2012 budget request for Europe 
and Eurasia builds on the momentum of reform. It seeks to 
entrench stability and addresses the key challenges that 
inhibit full democratic and economic transitions in the region. 
Reflecting on the tight budget environment, successes in key 
areas, and the need to fund other global priorities, the 
President's request represents a significant decline in 
resources from previous years. Twenty years of USAID engagement 
in Europe and Eurasia has produced sustainable democratic and 
economic transitions in 11 of the original 24 countries that 
received assistance; 17 countries have joined the WTO, 10 have 
acceded to the European Union, and 23 have joined NATO. Once 
our opponents in the Cold War, the former Eastern Bloc States 
have graduated from assistance and are now among the strongest 
supporters of U.S. foreign policy objectives.
    We continue to advance transitions by actively building on 
sustainable partnerships and addressing key challenges that 
further U.S. national security interests as well as our 
economic interests. USAID assistance prevents instability and 
fosters these emerging markets. We have seen that the ability 
of other countries to weather global economic crises directly 
affects the U.S. economic stability in this globalized market.
    USAID promotes broad-based economic growth to create the 
American markets of tomorrow by building local entrepreneurship 
and innovation, and strengthening institutions in investment 
environments. We are confident that the resources that the U.S. 
interests invest in this region will continue to provide a 
strong return on investments and help achieve our core policy 
objectives.
    As Dan laid out four major assistance goals, I would like 
to reiterate the President's request which reflects our 
commitment in the region and issues that both of you mentioned.
    Partnership with Russia as an emerging donor, while 
pressing for respect of universal values and democratic 
liberty. As I am sure the Georgian Ambassador brought up to 
you, enhancing the stability for the Caucasus through 
assistance for economic growth and democracy, particularly 
building on the postconflict gains in Georgia.
    Promoting democratic and economic reform in Ukraine, 
support of Moldova's progress toward European integration by 
strengthening democratic institutions and promoting economic 
growth, addressing the most difficult challenges to democracy 
and human rights, like those in Belarus. And, as Congressman 
Engel mentioned, increased stability in the Western Balkans by 
helping countries there reach their goal of Euro-Atlantic 
integration through programs that strengthen economic 
opportunity, build democratic institutions, and promote 
tolerance and reconciliation.
    We will work with increased efficiency and creativity to 
address the key challenges and advance the democratic and 
economic transitions in this region.
    USAID is fundamentally transforming the way that we work by 
strategically realigning our Foreign Service officer positions, 
empowering our local staff, and increasing reliance on cost-
effective DC-based staff to restructure our field presence.
    By Fiscal Year 2012, we will also end USAID funding for 
assistance programs in Montenegro, which is middle-income 
country that is on a sustainable path to becoming a fully 
democratic and market-based economy. Through the USAID forward 
reforms, we are rebuilding our efforts to increase donor 
coordination in this region, enhance the sustainability through 
local capacity building, and to use science to leapfrog global 
development challenges.
    To further improve efficiency and effectiveness to meet 
continuing challenges, we are leveraging funding to maximize 
the impact achieved with every taxpayer dollar spent in this 
region. We are partnering with international donors, host 
countries, and the private sector, to amplify our results and 
to achieve these positive development outcomes.
    In Bosnia-Herzegovina, USAID has leveraged over $60 million 
in additional funding from other international donors, 
including the launch of the first-ever jointly funded 
Development Credit Authority Loan Guarantee Program. And it 
unlocked $40 million to spur local entrepreneurship by 
combining capital with the Swedish International Development 
Agency.
    In Azerbaijan, the host government has provided a near one-
to-one match to co-finance USAID implemented economic growth 
and community development programs. Throughout the region, 
USAID has leveraged over $350 million in public-private 
partnerships through our Global Development Alliance. So with 
Congressional support, USAID has financed 10 Enterprise Funds, 
covering 18 countries, and that has leveraged over $9 billion 
in additional financing to strengthen private sector growth. 
The profits from these funds have been reinvested in the target 
countries to further propel economic development, and have 
already returned over $180 million back to the American 
taxpayers through the U.S. Treasury. We are also forging new 
partnerships with emerging donors to work with us to overcome 
development challenges.
    I look forward to working with you as we transform the way 
that we work to advance U.S. interests in meeting the 21st 
century development challenges, and building a strong 
partnership with the stable and sustainable market-oriented 
democracies in Europe and Eurasia. Thank you and I welcome any 
questions.
    Mr. Burton. Thank you, Ms. Alexander. The remainder of your 
statement we will put in the record.
    Ms. Alexander. Thank you.
    [The prepared statement of Ms. Alexander follows:]

    
    
    
    
    
    
    
    
                              ----------                              


    Mr. Burton. Ms. Biswal.

STATEMENT OF MS. NISHA BISWAL, ASSISTANT ADMINISTRATOR, BUREAU 
      FOR ASIA, U.S. AGENCY FOR INTERNATIONAL DEVELOPMENT

    Ms. Biswal. Thank you, Mr. Chairman.
    Mr. Burton. Incidentally, let me just say that we have been 
joined by my good friend, Congressman Poe from Texas, and Mr. 
Deutch. Thank you both for being here.
    Ms. Biswal. Thank you, Mr. Chairman, Congressman Engel, 
Congressman Deutch, and Congressman Poe, thank you for inviting 
me to testify today. And I also ask that the full statement be 
placed in the record
    Mr. Burton. Without objection.
    Ms. Biswal. This afternoon, I want to share my perspective 
on how U.S. foreign assistance in Central Asia is promoting 
stability, encouraging reforms, and meeting urgent needs.
    Mr. Chairman, there is no question that Central Asia is a 
challenging environment in which USAID works. The lack of 
political space and the human rights record has been troubling. 
And yet, we have clear and compelling interests in Central 
Asia, as my colleague Susan Elliott mentioned, the most 
important being the impact on our ability to succeed in 
Afghanistan and Pakistan.
    In Fiscal Year 2012, the President's budget requests a 
total of $112.8 million for Central Asia through the AEECA 
account, a decrease of 14 percent from the Fiscal Year 10 
enacted levels. The request also includes $35.3 million in 
global health and child survival funding to support health 
activities in the region.
    Our programs in Central Asia are built around key USAID 
successes over the years. In 1998, technical support provided 
by USAID was instrumental in helping Kyrgyzstan become the 
first country in the region to join the WTO. Today, Kazakhstan 
is also making progress toward WTO membership, again with USAID 
assistance. In Kazakhstan, a country which has shown strong 
growth fueled by oil and gas reserves, USAID's modest program 
leverages $2 of Kazakh funding for every dollar of U.S. 
investment for assistance to promote legal regulatory and 
policy reforms, as well as supporting the expansion of small 
and medium enterprises.
    Regionally, our health programs have had widespread impact. 
Millions of citizens across the region have greater access to 
primary health care based on USAID's introduction of family 
medicine, replacing the old Soviet system.
    And while political space in the region is very narrow, the 
Kyrgyz Republic, as you noted, Mr. Chairman, represents a 
bright spot for democracy in Central Asia. Kyrgyzstan is 
undertaking what Secretary Clinton has called a bold endeavor 
to strengthen and deepen parliamentary democracy in a region 
where such successes are few.
    USAID is doubling down on our efforts to support the 
democracy efforts in Kyrgyzstan. USAID was there on the ground 
and able to provide quick support for constitutional referendum 
and the parliamentary elections, which occurred last year, and 
we will be there to help Kyrgyzstan prepare for the upcoming 
Presidential elections as well. And if Kyrgyzstan does succeed, 
it becomes a model of how democracy can deliver for the people 
of Central Asia. And if it fails, that failure will be 
exploited by regional forces unfriendly to democracy and 
pluralism.
    Mr. Chairman, if I may quote my good friend, Ken Wollack of 
the National Democratic Institute, Kyrgyzstan is not Las Vegas, 
and what happens in Kyrgyzstan will not stay in Kyrgyzstan. It 
will spread throughout the region. We are working to make sure 
that that impact is a positive one.
    Tajikistan, USAID's second-largest program, has had a 
markedly different trajectory and experience. The economic 
development there has been frustrated by widespread corruption, 
food and energy shortages, and over-reliance on remittances 
from abroad. The 2012 request of $42 million will focus on 
improving food security and addressing health concerns.
    USAID support has helped farmers establish more than 30 
associations of water users and has led to better management of 
irrigation and drainage systems, helping many farmers to nearly 
double their income. We hope to reach an additional 30,000 
households through our agricultural programs in funds requested 
in Fiscal Year 2012.
    Our health care programs allowed us to provide a rapid 
response to the polio outbreak and was instrumental in halting 
the world's largest outbreak of polio in decades, and that was 
accomplished through a partnership with Russia as well as 
India.
    Finally, energy security is another area of focus and long-
term stability in Central Asia and its economic success will 
depend greatly on energy production. The countries of Central 
Asia tend to look at this issue singularly, and we are working 
to create more regional cooperation as well as enhance regional 
energy markets, and improve capacity, so that Central Asia can 
become a more efficient exporter of energy, particularly to 
Afghanistan and Pakistan.
    Let me just conclude, Mr. Chairman, by saying that 
development saves lives. It strengthens democracies and expands 
our opportunities around the world. But it also keeps our own 
country safe and strengthens our own economy. USAID programs in 
Central Asia are a critical component of securing our vital 
interests in the region.
    Thank you very much for the opportunity to testify today, 
and I welcome any questions you may have.
    Mr. Burton. Thank you very much.
    [The prepared statement of Ms. Biswal follows:]

    
    
    
    
    
    
    
    
    
    
    Charts deg.

    
    
    
    
    
    
    
    
                              ----------                              

    Mr. Burton. You say what happens there is not like Las 
Vegas. How did you come up with that analogy? I am just 
curious.
    Ms. Biswal. Well, I can't take credit for it, sir. I 
borrowed it from Ken Wollack of NDI, but I thought it was a 
brilliant one.
    Mr. Burton. It was brilliant, yes. Have you ever been to 
Las Vegas?
    Ms. Biswal. I have not. I have been to Atlantic City.
    Mr. Burton. Well, let me know when you go. If what happens 
there stays there, would you let me know when you get back?
    Ms. Biswal. I will indeed.
    Mr. Burton. All right.
    First of all, I will recognize myself for 5 minutes. You 
know, the thing that concerns me is we had a budget in 2008 
of--let me get the figure here--53--$43 billion in 2008. What 
we are trying to do on the Republican side, of course we are 
going to have to compromise, I am sure, to some degree with the 
Democrats in the Senate and the White House, but the State 
Department had a budget in 2008 of $43 billion, and our target 
is to use 2008 figures as far as our budgetary concerns are 
this year.
    You are asking for, or your proposal is $53 billion this 
time, which is a 23 percent increase at a time when we don't 
have any money. The budget deficit this year is going to be 
between $1.5- and $1.6 trillion. We are facing a $14 trillion 
national debt, and while I understand that everything that all 
four of you have said is meritorious, what we have to do is 
have every department of government go back and actually take a 
fine point on their pencil and cut out anything that is not an 
absolute necessity, and is not necessary for the security and 
longevity of the United States of America.
    And so, and I understand from your testimony today, that 
your section has actually decreased since 2010. But you didn't 
tell me what it did between 2008 and 2010. Does anybody have an 
answer to that? From the 2008 appropriation that was made for 
your section of the world, has the amount gone up or down? I am 
not talking about 2010.
    Mr. Rosenblum. Mr. Chairman, I don't have the 2008 number 
in front of me, but from my memory, I believe that the 2010 
level was still lower than we were in 2008.
    Mr. Burton. Really?
    Mr. Rosenblum. Yeah. But we will get back to you with the 
accurate answer on that. If we look over a longer period of 
time, I can say, because this is sort of seared into my mind, 
that in comparison to where we were 10 years ago in the region, 
we are actually down by about 60 percent in foreign aid. We 
were about $1.5 billion, and the request for this year, as you 
see, is a little over $600 million for the foreign aid portion 
of what we are doing. So over time, because of the countries 
graduating from assistance and because of focusing our programs 
on the highest priorities, we have been able to come down 
significantly.
    Mr. Burton. The 2012 request is what, $626 million?
    Mr. Rosenblum. Yes, $626 million. That is for the 
assistance to Europe, Eurasia, and Central Asia accounts. If 
you include all the accounts, the 2012 request is a little over 
$900 million. That includes the military assistance and some of 
the global health.
    Mr. Burton. And that, compared to 2008 is still lower, as 
you recall?
    Mr. Rosenblum. As I recall, it is.
    Mr. Burton. Well, if you could get me those figures I would 
really appreciate it.
    The Bureau's--and I hate to hit you on salaries, but this 
is part of the overall issue that we have to look at--the 
Bureau's spending on American salaries has gradually risen from 
$217 million in 2008 to about $237.5 million in 2011. And the 
Fiscal Year 2012 budget request, $266 million, rather. So you 
have got an increase over the 2008 levels of about $50 million.
    And I know everybody wants to make more money. But is there 
any way, or can you give us an idea on whether or not there are 
any economies that can be made at State to deal with that?
    Mr. Rosenblum. Mr. Chairman, I hate to do this twice in a 
row, but I will respond--we will respond with a more detailed 
response.
    Mr. Burton. Okay. Along with that response----
    Mr. Rosenblum. In writing.
    Mr. Burton. You actually had a decrease in American staff 
that has been employed by the Bureau of European and Eurasian 
Affairs. So even though you have had a decrease in staff, you 
have got almost a $50 million increase in spending, so----
    Mr. Rosenblum. Sir, the one thing I will say is that the 
primary cost drivers, as you have noted, for the cost of the 
salaries relate to the general operating expenses, maintenance, 
and utilities at our posts overseas. And those costs do tend to 
rise over time, even though when you cut down the staff size, 
sometimes the overall cost rises.
    Mr. Burton. Is that because possibly the value of the 
dollar has decreased in competition with the European 
currencies?
    Mr. Rosenblum. That is one of the factors. But again, to 
give you the full answer you deserve, I will have to get back 
to you in writing.
    Mr. Burton. My time is just about up, so why don't I go 
ahead and yield to my colleague, and then I will have more 
questions after he and Mr. Poe ask their questions.
    Mr. Engel. Okay. Thank you. Thank you, Mr. Chairman.
    I just want to say, and again, in the general realm of 
knowing that we have got to cut costs and do the best we can, I 
just want to go on record again. I have said this many, many 
times. I think that the salaries that staff is paid--I travel 
around to our Embassies and our consulates; I think it is 
pitiful, the work that the personnel do. I think they are 
underpaid, and I think if we are going to look for cuts we 
should not start with salaries. I think that our men and women 
are so dedicated. They certainly don't do it because of the 
salary. And it is really embarrassing, I think, what they are 
paid. So I understand we need to tighten our belt, but I think 
that on the backs of our workers in the Foreign Service and 
Embassies, I think is really the wrong way to go. I only 
mention it because Mr. Burton just mentioned it.
    Let me ask the Kosovo question. Mr. Rosenblum, let me just 
do it, because you and I attended a ceremony where we had the 
Albanian Ambassador, and Albania presented a check, a 
ceremonial check back--$15 million to the U.S. Treasury, which 
is returning half of its startup funds to the American people. 
I was interested that you said that you don't believe that any 
country that gets aid is entitled to that aid in perpetuity; 
that there is a purpose for that aid, and once a country has 
succeeded in that purpose, then we move on.
    Obviously, Albania, when I was growing up, was the most 
repressive Communist dictatorship, far beyond the Soviet Union 
and every other place, in fact, in line with China early in the 
fifties, and then broke with China because China was too 
liberal for it.
    What I find amazing, first time I went to Albania was back 
in 1993, there is a large Albanian American community in New 
York. And I became very friendly with that constituency and 
worked very hard with them. Went to Albania, didn't know what 
to expect. And I could not believe there are no--there is no 
more pro-American country or more pro-American people than 
Albanians, both in Albania and in Kosovo. They truly love our 
country. And when Kosovo declared independence, there were more 
U.S. flags in the street than there were either Albanian or 
Kosovo flags.
    I mean, that is how they feel about the United States. They 
never believed the 50 years of garbage that the dictatorship 
told them about the United States. And it is just amazing. And 
the warmth really just makes you feel good. And it really is 
contagious.
    So I believe it would be nice to establish an Enterprise 
Fund for Kosovo. Again, I mentioned that we had heard that 
there were no startups for Enterprise Funds. We are working on 
one for Egypt, supposedly. I know funds are tight. But I think 
there is no place more deserving of an Enterprise Fund where 
one can play a more useful role. And I understand that the 
Albanian American Development Foundation, which is the private 
follow-on to the Enterprise Fund, might be willing to 
contribute a portion of its huge endowment to start up a Kosovo 
American Enterprise Fund. So will State and USAID support the 
creation of a Kosovo American Enterprise Fund?
    Mr. Rosenblum. Congressman Engel, first of all, we agree 
completely about the importance of supporting enterprises in 
Kosovo, finding ways of promoting economic growth there. I 
think that country's survival as a sovereign state depends on 
being able to generate economic growth. And they obviously have 
some major obstacles to achieving that goal.
    The Enterprise Fund method, the tool of that is one way to 
do that. And I would be glad to come and discuss with you more 
specifically about the pros and cons of the model and how it 
would be done. We have been looking at it together with our 
Embassy in Pristina, and we can talk about the other things 
that we are doing to promote private sector development and how 
an Enterprise Fund may fit into that.
    I would note that there might be some legal issues that 
would have to be dealt with concerning the use of these funds, 
because they are previously appropriated funds, the funds that 
belong to the Albanian American Development Foundation. We 
would have to examine that. But we value this kind of creative 
suggestion and will seriously consider it.
    Mr. Engel. Good. Why don't you come in and we will chat 
about it? I would be very, very interested.
    And I wanted to say that in terms of foreign assistance in 
general, Defense Secretary Gates and the U.S. Chamber of 
Commerce, which is Republican-leaning, all support foreign 
assistance and support increases, I think, in the President's 
budget in terms of foreign assistance. So I believe that it 
plays off well in terms of helping us in America.
    I would like someone to tell me about Russia. I think, Mr. 
Rosenblum, you had said in your testimony that these 
authoritarian regions, former Communist regions, have a way of 
slipping backwards into more autocracy. That is kind of what 
they are used to. That is why I truly believe it is so 
important for us not to leave a vacuum, to be in there and to 
fight for things.
    I would like to know about Russia. How has our assistance 
to Russia contributed to the reset or targeted assistance? Has 
it improved our bilateral relationship? And I would also like 
to throw in there, the State Department human rights report 
identified Uzbekistan, Turkmenistan and Tajikistan as 
authoritarian states. A new report singled out countries for 
incarcerating people on political grounds, lacking fair 
elections, obstructing a multiparty system, and on and on and 
on. So I would like to hear some talk about Russia and these 
other countries.
    Mr. Rosenblum. Glad to talk about it, sir. And I will defer 
to Ms. Elliott on the question about Central Asia. But with 
respect to Russia, our policy on Russia now is premised on the 
idea that we can be doing two things at once; that is, finding 
areas of common interests, common concerns with Russia where we 
can work together and actually achieve significant results, but 
at the same time, knowing that there are areas where we 
disagree, and where we can be direct and frank in addressing 
the issues.
    The issues that you talked about in terms of democracy, 
backsliding on democracy, apply there; and another issue is 
Georgia, where we definitely have a major disagreement with 
Russia on that.
    We think that this policy has paid dividends. We think we 
can point to a number of areas, and I won't go into all of them 
now in detail. I think Assistant Secretary Gordon talked about 
this when he appeared before you several weeks ago. But with 
respect to Iran, with respect to North Korea, nonproliferation, 
counterterrorism, and other areas, and in a very practical way 
some of this collaboration is paying off, and this connects to 
the assistance, because one of the areas where we do work with 
Russia and where some of the assistance money is going, is 
counternarcotics. Obviously, a huge problem of the flow of 
heroin coming out of Afghanistan. It is important to work with 
all countries of the region. Russia itself is very directly 
impacted by this; in fact, in terms of their own drug abuse 
problem--and we have had very good cooperation on this issue 
and have used our assistance programs to support it.
    Most recently, there was a major seizure of about a ton of 
heroin in Afghanistan, an Afghan-led operation, but with 
support from the U.S. and Russia working together.
    So our assistance has that aspect to it. It works on the 
collaborative area. But there is another major portion that is 
actually the majority, in dollar terms, of our assistance to 
Russia that is focused on the areas of democracy and human 
rights. It is about supporting civil society, supporting 
independent media, working on rule of law problems, and most of 
that, most of those programs, not only are they aimed at those 
issues but the funds are being spent to work with 
nongovernmental sector; that is, this is not anything to do 
with the Government of Russia.
    Mr. Burton. We will have more questions.
    Mr. Engel. I will ask Ms. Elliott the questions that I 
raised, but I will defer.
    Mr. Burton. We will come back to you. Mr. Poe and then we 
will go back. Mr. Poe.
    Mr. Poe. Thank you, Mr. Chairman. I apologize, I am in a 
markup in Judiciary, too. So I am going to be short.
    I live in Texas, the Houston area. What occurs in Eastern 
Europe becomes our problem in the area of human trafficking. 
The figure is 50,000 people that are human trafficked out of 
Eastern Europe, end up in the United States. Houston, Texas, 
has Interstate 10 that goes east to west, which is apparently 
the corridor for human trafficking in the United States, 
because you can go all the way to Florida and you can go all 
the way to California.
    I have been to Eastern Europe, have seen and talked to the 
people in Romania and Bulgaria about the issue of women, 
specifically, being trafficked. I understand that Bulgaria, 
Russia, Romania, are all tier two when it comes to trafficking 
of people, which I think is despicable. As a former judge, I 
would like to try all of the traffickers at the same time, but 
they won't let me do that.
    But anyway, so I am concerned and my question really is, 
since that problem becomes America's problem, what funds are 
being used and are they effective in trying to convince 
countries--Romania, Bulgaria, and Russia--to get their acts 
together and protect human beings in Russia so that they don't 
end up being trafficked to the United States and other places? 
Mr. Rosenblum, you want to answer that?
    Mr. Rosenblum. Sir, I will be glad to start and answer, but 
my colleagues may well have things to add to it.
    I would say that the starting point has to be political 
will in the countries; that is, the countries themselves have 
to recognize that it is a real issue and be willing to deal 
with it. Sometimes dealing with it has some costs for them, 
because they may be going after important people in the country 
in terms of prosecutions. So that is always the starting point, 
and through our diplomacy, we are constantly engaging and 
constantly pushing the issue with these governments. And of 
course, the ranking, the tier ranking that you referred to is 
an element of that because no country wants to see itself slip 
in the tier ranking.
    Through our assistance programs, we do have ways that we 
can deal with the issue as well, which we are; and we are 
spending money in the countries of the region on this issue. 
Some of it is working with the victims of trafficking in those 
countries, you know, with shelters and providing--sometimes it 
is providing employment opportunities so the targets of the 
traffickers will have other options, other things that they 
will do. And some of it is aimed at helping them--helping the 
governments, the justice sectors of these countries figure out 
how to prosecute the crime. It is not a crime that they in the 
past have been used to treating as its own criminal offense 
under their code. So it is a matter of amending the criminal 
code.
    It is a matter of training judges and training prosecutors, 
and we have done a good deal of that in the region, but there 
is a lot of work left to do. And we agree completely that this 
is a horrendous problem.
    Mr. Poe. In your opinion, do you think that Russia has the 
moral will to get this crime problem stopped or not? Can you 
give me your opinion of that? Political will, whatever kind of 
will you want to call it, do you think they do?
    Mr. Rosenblum. I think that they have shown a lot of 
evidence of that will, that there has been movement.
    Mr. Poe. How about Romania?
    Mr. Rosenblum. Romania, the same thing in Romania as well. 
I mean, there are different elements in the political systems 
there that may have different views on it, but in general the 
Romanian Government is engaged very strongly with us on this.
    Mr. Poe. How about Bulgaria?
    Mr. Rosenblum. Bulgaria, I would say the same about 
Bulgaria and Romania. Bulgaria and Romania also as members of 
the European Union have certain requirements that they have to 
meet that are a little different than countries further to the 
east do. So I am not going to sit here and tell you that the 
problems are solved, because we know that they aren't. We know 
that they aren't, and there is a lot of work to be done, but we 
see movement in these countries in the right direction.
    Mr. Poe. Ms. Alexander, do you want to weigh in on that in 
my limited time?
    Ms. Alexander. Sure, thank you. I think that as Dan has 
recognized, the legal reforms that are necessary to address 
this problem are vast, and it is something that we are trying 
to conquer. From USAID's perspective, we are also working with 
civil society groups in public education because I think those 
pieces can make sure these trafficked people or persons are 
educated before they end up in Houston, Texas. This is an 
element where I think independent media and the reforms that 
are addressed through both the legal proceedings, as well as 
civil society, are important elements to make sure that people 
understand what they are getting into. And this is an area that 
I think remains important for engagement and assistance 
programming.
    Mr. Poe. Thank you very much, Mr. Chairman. I yield back.
    Mr. Burton. Thank you, Mr. Poe. I think since my colleague 
was not finished with his questions, I will let him take his 5 
minutes, and I will ask questions after Mr. Engel.
    Mr. Engel. Thank you very much, Mr. Chairman. I would like 
Ms. Elliott to answer the questions I was talking about, the 
authoritarianism in those four or five countries.
    Ms. Elliott. Thank you, Mr. Engel. As I mentioned in my 
statement, we conduct Annual Bilateral Consultations with all 
the countries of Central Asia, all five, and an integral part 
of the engagement we have is discussing democracy, human 
rights, freedom of the press, what I would call the human 
dimension. So this is something that we take very seriously and 
we raise it at high levels.
    In fact, Secretary Clinton, when she visited the region in 
December, raised these issues with all five of the Central 
Asian leaders in a meeting she had. And as well, she visited 
Uzbekistan, and this again was an integral part of her 
discussion. So we raise these things at high levels, and we 
continue to emphasize the importance of them.
    Mr. Engel. Ms. Biswal.
    Ms. Biswal. Yes. I just want to add, in addition to the 
diplomatic efforts, we very much, through our assistance 
program, provide support to human rights defenders. We provide 
regional support as well as bilateral support to civil society 
institutions, and because the political space is so narrow, we 
look for creative ways that we can engage and encourage 
democratic activities.
    Some of it might be creating things like water institutions 
or water associations, where at community levels you bring 
individuals together to make decisions in a more democratic 
way. So we are trying to get at democratic reforms through as 
many different ways as we can. If we can't attack a problem 
directly at the top, we try to go around through other ways.
    Mr. Engel. Thank you.
    Ms. Biswal, you still work for our committee. I don't know 
if you know that, Mr. Chairman. So she is still doing good 
work, your work for USAID.
    Let me throw out two countries I would like you to tell me 
about. One is Turkey, who I have lots of difficulty with. 
Obviously, they are a NATO ally, and some of their very recent 
orientations are really disturbing with regard to Israel and 
the Middle East, and also with regard to Armenia. I am 
wondering if someone can talk to me about that. And the other 
country you mentioned before is Georgia. Obviously, there are 
differences with the Russians on Georgia, but Georgia being a 
pro-Western government and a country that would like to work 
with us, what are we doing in Georgia, especially based on the 
fact that the Russians have occupied a portion of Georgia?
    Mr. Rosenblum. Mr. Engel, maybe I will start and, again, 
welcome contributions from my colleagues as well.
    To be honest, I don't have too much to say about Turkey, 
but I have lots to say about Georgia. And the reason is, 
frankly, in terms of assistance, in terms of the budget request 
and the assistance, we are doing very little with Turkey. We 
still have a significant IMET program, military training there, 
to enhance our collaboration with Turkey as a NATO member, but 
we we are not requesting any funding for FMF. We have a small 
amount of funding that is being requested for the antiterrorism 
cooperation programs that we do with countries around the 
world, and that is it. That is pretty much it. I see here, it 
is a total of $5.6 million between the IMET and this 
antiterrorism cooperation.
    You mentioned Armenia, and we can talk about that more if 
you would like. But let me surf to Georgia for a moment and say 
that we were able, as you know, and with a lot of help from 
Congress, to step in after the Russian invasion in 2008 and 
provide very significant assistance to Georgia which we think--
--we were able to, I think, provide assistance that actually 
might have made the difference between Georgia surviving or 
collapsing in some ways. The economic situation was dire in the 
fall of 2008 after the Russian invasion, and we provided a very 
large package of assistance, including the type of assistance 
that we very rarely do, and in this part of the world it is 
almost unheard of in my experience, and that is budget support. 
We actually provided some budget support.
    Mr. Engel. Are we still doing that in a consistent way or 
have we backtracked?
    Mr. Rosenblum. We are not doing budget support anymore. 
That was a one-time thing. We are still providing a significant 
amount of assistance to Georgia. I think this year the request 
for Georgia totally is $87.6 million, and what we are doing 
with that money is supporting reform. The Georgian Government 
is very serious about reform in the economy, reform in their 
political institutions, in their social sector. And this is one 
of those cases I think that the chairman referred to as like-
minded countries that we can support their reforms. Georgia has 
been a model in that respect. So we think the money there is 
well-invested.
    We also, as you know, had until recently--actually, I think 
it is still in place--a major Millennium Challenge compact in 
Georgia that was working on rural development and roads and so 
on.
    Mr. Engel. Can I ask one final question, Mr. Chairman? When 
you come and talk about the Kosovo fund, then you can talk to 
me about Armenia as well, because I am very concerned and would 
like very much to help Armenia in any way we can.
    There are 300,000 refugee and internally displaced persons 
in the Balkans, 100,000 displaced in Georgia, 160,000 persons 
in Turkey, and an untold number of stateless persons in Eastern 
Europe and Central Asia; yet, the President's budget for 
migration and refugee assistance in Europe and Central Asia is 
slated to decline from $48 million to $29 million. UNHCR budget 
for Europe alone is $196 million for 2011. The Department's 
total 2012 request for Europe doesn't come close to 
contributions to the U.N., and I have a lot of questions about 
the U.N.; but you know, in fact, if the entire amount would 
come to the U.N., it would come under 15 percent, and we assume 
it doesn't all go to the U.N.
    So my question really is, just as some of these countries 
are beginning to make progress, are we pulling out the rug from 
under their feet, and if it is appropriate to end programs, 
what do we do? Shouldn't we be pumping up assistance to Bosnia 
to end another 2 years of other displacement? Those questions, 
similar.
    Mr. Rosenblum. Should I respond?
    Mr. Engel. Sure.
    Mr. Rosenblum. On that point, Congressman, as I said in my 
opening statement, there is a lot that we are balancing here in 
terms of being very aware of the fiscal constraints, but at the 
same time wanting to sustain commitment to the kinds of goals 
that you mentioned in this region.
    What we have tried to do to respond to that is to really 
focus on the highest priorities. And there have been a few 
cases where we have had to stop programs in order to shift 
those resources into things that are really important. Ms. 
Alexander referred to one of them in her testimony with respect 
to Montenegro, where we had a program aimed at economic growth 
in Montenegro for many years. We felt that it reached a point 
where that program could be phased out.
    The real issues that need to be focused on in Montenegro 
now, in our view, relate to rule of law. There is still a major 
problem with rule of law, with organized crime operating in the 
region, et cetera. So what we have done is, we have reduced the 
budget for that country and focused in on the rule of law 
issues, and this is true in other places in the region as well. 
So it is a difficult challenge, but we are trying to make the 
best of it and keep that progress going.
    Mr. Engel. Thank you.
    Mr. Burton. More than 56 national and 260 multilateral aid 
organizations contribute to development resources. New donors 
are emerging all the time. China, India, Brazil, Taiwan, and 
Russia collectively contribute about $8 billion each year. What 
troubles me is, why are we giving money, aid, to these 
countries that are collectively giving $8 billion in aid to 
other countries? I mean, we give money to India, we give money 
to Brazil, we give money to Russia, and I just can't understand 
why, when we are having the fiscal problems we are having right 
now, we would be contributing to these countries, who in turn 
are contributing money to other countries.
    Ms. Biswal. I would like to maybe talk to you a little bit 
about India and why we have an USAID program there. I think it 
is a very fair question, what is USAID and what is U.S. 
assistance doing in India at a time when India is emerging much 
more significantly in the world scene as a donor.
    Mr. Burton. But the point is, if we are giving them money, 
then they need the money for various USAID programs. So how can 
they contribute to other countries when we are giving our 
money? It sounds like a transfer of funds, and I don't 
understand why we should be giving money if they have their 
money being given to other countries.
    Ms. Biswal. Well, in the case of India what we are trying 
to do is--and India still has 800 million people living in 
poverty--but what we are trying to do is not necessarily--I 
mean, India is going to have to solve its own problems of 
poverty. But what USAID can do, and what we are increasingly 
trying to gear our programs toward, is working with India to 
pilot some effective solutions that they can scale up, but not 
only that they can scale up, but in partnering with them as 
donors to take Indian-piloted solutions and apply them to 
challenges in Africa.
    So when the President was in India last November, he 
announced a partnership for an evergreen revolution with Prime 
Minister Singh, and that is basically what is at the heart of 
this.
    Mr. Burton. I understand what you are saying, but there is 
a host of countries that are contributing foreign assistance to 
other countries and we are giving them money. It just seems 
like to me that is one of the things that ought to be looked at 
very closely, especially when we are in a situation like we are 
economically.
    And a while ago we were talking about salaries. I am not 
cutting people's salaries and putting you in bread lines or 
anything like that, but all I am saying is every single aspect 
of our expenditures needs to be parsed and looked at very 
closely. Some need to be changed, some need to be cut, but we 
cannot go on the way we are going, and that is why foreign 
assistance is also one of the things that we have to look at 
very closely.
    Now, there are 56 OSCE members. Could you elaborate on the 
potential expansion of the role of the OSCE in Central Asia and 
Afghanistan and what would this expansion role entail and what 
funding would it call for and which countries would contribute 
to these funds out of the 56?
    Ms. Elliott. Well, I can just say that the OSCE is already 
active in Central Asia, and, as you probably are aware, that 
Kazakhstan was the chairman in office of the OSCE. They have 
worked in Kyrgyzstan and other countries in Central Asia. I 
can't tell you specifically how much each member country 
contributes, but that is certainly something we could find out 
and get back to you with.
    Mr. Burton. Okay. That would be helpful.
    We are running out of time because we have votes on the 
floor. So what I will do is, I will ask one more question, and 
then I would like to, with unanimous consent, submit a number 
of questions to you for the record that I, and my staff, and 
your staff can take a look at after the meeting is over; 
because I don't want to go vote and then keep you guys here 
until 6 or 7 o'clock, because you probably have dinner dates 
and things that you have to do.
    Let me ask you about corruption. Transparency International 
measures the level of corruption perception worldwide. Now, we 
give $123 million to the Ukraine while the Transparency 
International, which measures corruption, rates it 134th out of 
178 countries assessed. So they have got a real corruption 
problem, and yet they are getting $123 million from us. 
Tajikistan is getting $48 million. It ranks 154th. Russia gets 
$65 million.
    And I just would like to know why, when the corruption 
level is so high, we are giving large amounts of money to these 
countries, as well as others, and why is Russia getting any? So 
if you want to answer that question real quick, then we will 
submit the rest for the record.
    Ms. Alexander. I will start on Ukraine, because I think 
that Ukraine was disproportionately affected by the global 
economic crisis, and the corruption element really requires 
political will. So when you have a global economic crisis that 
is crashing a country and you have a lack of political will, 
there is a need to help because that will actually affect and 
have a snowball on the region.
    Mr. Burton. But the one thing that none of us want is for 
us to give aid and then, because there is no political will, it 
ends up in a Swiss bank account. We have had an awful lot of 
countries around the world, and I experienced it because I was 
in Zaire when they had Mobuto over there, and he was getting 
billions of dollars and it was all in a Swiss bank account or 
in the French Riviera.
    If we are going to give aid, we want to make sure it is 
going for a purpose. And if there is political corruption we 
can't deal with, it seems to me, unless we can go through a 
private agency that is not connected to the government, we 
shouldn't be giving them any money.
    Ms. Alexander. Part of this is addressing the political 
will of the players, but it is also the legal and regulatory 
reforms that you have in these countries. And when you don't 
have those systems set up, these things can happen.
    And so I think that there have been incomplete market-
oriented reforms that have limited the ability of the 
politicians to actually conquer this political will that is 
necessary to address the corruption issues. So through 
Transparency International, through a lot of our technical 
assistance in these countries, we have actually been 
shepherding some of these programs through. I know in Central 
Asia, too, corruption is an issue that Nisha----
    Ms. Biswal. And I just want to assure you, Mr. Chairman, 
that while we may have assistance programs in countries where 
corruption is a major concern, U.S. assistance dollars, we are 
not providing budget support to these countries. We are not 
providing U.S. funds directly to governments. We are only 
providing technical----
    Mr. Burton. What is it, going through PVOs?
    Ms. Biswal. We are going through private voluntary 
organizations, nongovernmental organizations. We are also going 
through U.S. contractors who are undertaking a lot of the 
programs on our behalf, and so we are not providing assistance 
to governments, and we take very strong measures of 
accountability to track U.S. resources.
    Mr. Burton. Well, what I would like to do is, in addition 
to submitting these questions for the record, because we are 
out of time and we don't want to keep you, if you could give us 
some idea of how you police this; because I was senior 
Republican on Africa for 10 years, and the money we were poring 
into Zaire and a whole host of countries, South Africa and 
elsewhere, was going right down--pardon my expression--the rat 
hole. And when we are talking about the fiscal problems we have 
right now, we can't allow that to happen, or at least keep it 
to a minimum.
    So with that, I just say thank you very much. We will 
submit these questions for the record, and I really appreciate 
you being here today.
    Thank you very, very much. We stand adjourned.
    [Whereupon, at 4:17 p.m., the subcommittee was adjourned.]
                                     

                                     

                            A P P E N D I X

                              ----------                              


     Material Submitted for the Hearing RecordNotice deg.



                               Minutes deg.

                               
                               
                               QFRs from Burton deg.
                               __________
                               
                               
                               
                               
                               
                               

    [Note: Responses to the above questions were not received prior to 
printing.]

                               QFR from Poe deg.__

                               
                               
    [Note: A responses to the above question was not received prior to 
printing.]

                                 
