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






                 THE FISCAL YEAR 2013 BUDGET: A REVIEW
                   OF U.S. FOREIGN ASSISTANCE AMIDST
                          ECONOMIC UNCERTAINTY

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

                                HEARING

                               BEFORE THE

                      COMMITTEE ON FOREIGN AFFAIRS
                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             SECOND SESSION

                               __________

                             MARCH 20, 2012

                               __________

                           Serial No. 112-157

                               __________

        Printed for the use of the Committee on Foreign Affairs










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                      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              deceased 3/6/12 deg.
STEVE CHABOT, Ohio                   BRAD SHERMAN, California
RON PAUL, Texas                      ELIOT L. ENGEL, New York
MIKE PENCE, Indiana                  GREGORY W. MEEKS, New York
JOE WILSON, South Carolina           RUSS CARNAHAN, Missouri
CONNIE MACK, Florida                 ALBIO SIRES, New Jersey
JEFF FORTENBERRY, Nebraska           GERALD E. CONNOLLY, Virginia
MICHAEL T. McCAUL, Texas             THEODORE E. DEUTCH, Florida
TED POE, Texas                       DENNIS CARDOZA, California
GUS M. BILIRAKIS, Florida            BEN CHANDLER, Kentucky
JEAN SCHMIDT, Ohio                   BRIAN HIGGINS, New York
BILL JOHNSON, Ohio                   ALLYSON SCHWARTZ, Pennsylvania
DAVID RIVERA, Florida                CHRISTOPHER S. MURPHY, Connecticut
MIKE KELLY, Pennsylvania             FREDERICA WILSON, Florida
TIM GRIFFIN, Arkansas                KAREN BASS, California
TOM MARINO, Pennsylvania             WILLIAM KEATING, Massachusetts
JEFF DUNCAN, South Carolina          DAVID CICILLINE, Rhode Island
ANN MARIE BUERKLE, New York
RENEE ELLMERS, North Carolina
ROBERT TURNER, New York
                   Yleem D.S. Poblete, Staff Director
             Richard J. Kessler, Democratic Staff Director














                            C O N T E N T S

                              ----------                              
                                                                   Page

                                WITNESS

The Honorable Rajiv Shah, Administrator, U.S. Agency for 
  International Development......................................    10

          LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING

The Honorable Rajiv Shah: Prepared statement.....................    13

                                APPENDIX

Hearing notice...................................................    42
Hearing minutes..................................................    43
Written responses from the Honorable Rajiv Shah to questions 
  submitted for the record by:...................................
  The Honorable Ileana Ros-Lehtinen, a Representative in Congress 
    from the State of Florida, and chairman, Committee on Foreign 
    Affairs: Prepared statement..................................    45
  The Honorable Howard L. Berman, a Representative in Congress 
    from the State of California.................................   119
  The Honorable Christopher H. Smith, a Representative in 
    Congress from the State of New Jersey........................   126
  The Honorable Dana Rohrabacher, a Representative in Congress 
    from the State of California.................................   129
  The Honorable Donald A. Manzullo, a Representative in Congress 
    from the State of Illinois...................................   131
  The Honorable Edward R. Royce, a Representative in Congress 
    from the State of California.................................   136
  The Honorable Connie Mack, a Representative in Congress from 
    the State of Florida.........................................   141
The Honorable Ted Poe, a Representative in Congress from the 
  State of Texas: Letter from Members of Congress to His 
  Excellency the Minister of Trade, dated February 21, 2012......   144

 
THE FISCAL YEAR 2013 BUDGET: A REVIEW OF U.S. FOREIGN ASSISTANCE AMIDST 
                          ECONOMIC UNCERTAINTY

                              ----------                              


                        TUESDAY, MARCH 20, 2012

                  House of Representatives,
                              Committee on Foreign Affairs,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 10 o'clock a.m., 
in room 2172 Rayburn House Office Building, Hon. Ileana Ros-
Lehtinen (chairman of the committee) presiding.
    Chairman Ros-Lehtinen. The committee will come to order. I 
will recognize myself and the ranking member, Mr. Berman, for 7 
minutes each for our opening statements. We will then hear from 
our witness before we move to questions and answers under the 
5-minute rule. We are not giving members an opportunity to give 
a 1-minute? Sure, we are.
    Without objection, the witnesses' prepared statements will 
be made a part of the record. And members may have 5 days to 
insert statements and questions for the record.
    The Chair now recognizes herself for 7 minutes.
    Dr. Shah, welcome. We appreciate your being with us today. 
Our hearing this morning is to discuss the foreign assistance 
budget for Fiscal Year 2013. When we met last year, we 
discussed the foreign aid budget against the backdrop of our 
Nation's challenging fiscal situation, including our vast 
annual deficit. Regrettably, as all of us know, little has 
changed in that front. One year later, newspaper headlines 
read, ``Nearly One in Six Americans in Poverty,'' ``Line Grows 
Long for Free Meals at U.S. Schools,'' ``City Cost-Cutting 
Leaves Residents in Dark.''
    So our Nation continues to face a substantial deficit, with 
35 cents of every dollar being borrowed. The Congressional 
Budget Office predicted that our budget deficit will total a 
staggering $1.08 trillion this year. CBO has also projected 
that the jobless rate will rise to 8.9 by the end of 2012 and 
to 9.2 the following year. Therefore, it is critical that we 
continue to thoroughly scrutinize our Government spending, and 
foreign assistance is no exception. Every dollar must be 
justified.
    It is a common argument that the foreign aid budget 
represents 1 percent of the overall Federal budget.
    However, within that 1 percent are billions of U.S. 
taxpayer dollars that the American people have earned through 
hard work and have generously provided to nations around the 
world. It is our responsibility to ensure that these hard-
earned dollars are held to the highest standards of 
transparency, are reaching the intended recipients, and are 
advancing our national and security interests and foreign 
policy priorities.
    Our foreign aid is not an entitlement program. Countries 
like Botswana, Chile, Thailand and South Korea have all used 
U.S. foreign assistance to build their economies and eventually 
graduate from U.S. foreign assistance. This should be the goal 
for all countries that receive U.S. assistance.
    Dr. Shah, in the previous remarks over the last year, you 
stated that by 2015, USAID could help several countries move 
away from U.S. assistance and, thus, close USAID missions. 
However, the budget request that you have submitted does not 
include any scheduled USAID mission closures in Fiscal Year 
2013. So, Dr. Shah, what changes or reforms are you proposing 
or implementing to ensure that U.S. foreign aid does not create 
dependency but, rather, leads to empowerment and self-
sufficiency? What is USAID's strategy for moving countries 
beyond foreign assistance so that they can stand on their own?
    Modest progress was made in Fiscal Year 2012 to eliminate 
unnecessary programs and missions. However, in reviewing the 
Fiscal Year 2013 budget, it does not appear to reflect a 
commitment in increased cost savings and elimination of U.S. 
assistance to countries that no longer need our support.
    Further, the administration's congressional budget 
justification states that the budget proposal only requests 
what is absolutely necessary. Yet, the administration is 
seeking nearly $2.6 billion under this request for 
international climate change programs, while humanitarian 
assistance accounts are scaled back. I remain concerned that 
funding of these programs is being provided at the expense of 
good governance, democracy, and rule of law programs.
    With limited resources, we must ask if this best meets our 
U.S. national security interests. For example, U.S. foreign 
assistance to the countries of the Western Hemisphere should 
reflect our main concerns: Security and democracy in that area. 
Under this request, funding for environmental programs to 
Guatemala increases by $2.5 million, funding that could be put 
to better use elsewhere for prevention programs that counter 
narcotrafficking and promote security funding.
    At a time when violent drug cartels are expanding their 
influence and fundamental freedoms are under assault by the 
ALBA tyrants, citizen security and democracy assistance must be 
USAID's priority. This priority must be appropriately reflected 
in the President's foreign assistance budget. The sharp cut in 
democracy funds for Cuba and Venezuela sends the wrong message 
to the internal opposition in these countries. Cuban dissidents 
will question the United States' commitment to a free Cuba as 
funding is decreased by $5 million.
    And as the ALBA regimes move further down the path of 
totalitarianism, this proposed budget rewards the dictatorship 
of Bolivia, Ecuador, and Nicaragua with an increase of 
development assistance. In Nicaragua, the proposed budget 
reveals a $3.1-million boost in funding for Fiscal Year 2013. 
Yet, the unconstitutional reelection of Daniel Ortega and his 
successful power grab demonstrates that USAID funds have not 
been spent wisely to promote democracy or transparent 
elections.
    Even more worrisome, our current USAID programs in 
Nicaragua support a handful of Sandinista mayors at the 
municipal level. In Ecuador, Correa continues to intimidate the 
private media and independent journalists, but the President's 
budget request increases funding for development assistance to 
Ecuador by $2 million. I also remain opposed to the increase in 
money for family planning and reproductive health--especially 
when all other global health accounts decline.
    The administration's reversal of the Mexico City policy 
allows U.S. Government funding to be allocated to foreign 
nongovernmental organizations that support or promote abortion 
as a method of family planning. An increase in family planning 
and reproductive health would only provide further opportunity 
for expanded funding for these organizations.
    So I look forward to discussing with you the reforms you 
have introduced to make the delivery of our foreign assistance 
more effective and what steps USAID is currently taking to 
break the welfare state relationship between U.S. foreign 
assistance and dependent countries.
    At this point I would like to turn to my friend and 
colleague Congressman Berman, the ranking member of our 
committee, for the opening statement that he would like to 
make. Mr. Berman is recognized.
    Mr. Berman. Well, thank you very much, Madam Chairman. And 
I join you in welcoming Dr. Shah before the committee this 
morning. I appreciate this opportunity to consider the 
President's Fiscal Year 2013 budget request for humanitarian 
and development assistance and to review efforts to reform the 
way USAID does business.
    As you yourself have noted, Madam Chairman, the total, 
cumulative Fiscal Year 2013 International Affairs request of 
$56.37 billion is $5.1 billion below last year's request, and 
represents less of an increase over 2012 spending levels than 
the current, annualized inflation rate.
    Moreover, I would add, international affairs spending 
represents only about 1 percent of our overall Federal budget. 
And development and humanitarian spending is less than half of 
that amount.
    Despite these facts, there continues to be a widespread 
misunderstanding about the size of our foreign aid program. 
Polls show that most people think it is upwards of 20 percent 
of the budget and that cutting foreign aid will somehow balance 
the budget. What is interesting is that the amount people think 
we should be spending on foreign aid is about ten times more 
than we actually spending.
    It bears repeating that we give humanitarian and 
development aid not only because it is the right thing to do 
but because it is the smart thing to do. Addressing hunger, 
disease, and human misery abroad is a cost-effective way of 
making Americans safer here at home. And it is infinitely 
cheaper to address these with economic and technical assistance 
now than to wait until fragile states collapse or conflicts 
erupt in wide-scale violence and we have to resort to costly 
emergency aid or even military action.
    Reducing global poverty is not a partisan issue. Democrats 
and Republicans alike want to usher in an AIDS-free generation, 
expand access to clean water and sanitation, respond to natural 
disasters, help countries hold free and fair elections, and 
build new markets for U.S. exports. In fact, some of the 
biggest contributions to global health and development were 
spearheaded by Republican Presidents, such as PEPFAR and the 
Millennium Challenge Corporation, which were both created by 
President George W. Bush.
    Still, in this difficult economic climate, we have a 
special obligation to ensure that the funds are spent as 
efficiently and as effectively as possible and that they best 
serve our national interests. To do so, we must revise and 
update the framework of foreign aid laws and procedures that 
were designed for the last century and fail to reflect the many 
lessons we have learned over the past 50 years.
    For instance, we know that our programs have a much greater 
impact in countries that devote significant resources to 
improving the lives of their own people. Our dollars go much 
further if we and other donors work along with host countries 
in a coordinated way, instead of setting up parallel 
institutions that are duplicative or leave gaps. But our system 
of stovepiped accounts and earmarked funds makes it very 
difficult to respond to local needs and priorities.
    Another thing we have learned is that we need to be 
strategic about our investments. That means not only having a 
clear plan of what we are trying to achieve and specific 
indicators to measure success, but also being more selective 
and focused with our funding.
    Despite the need for improvements, I think we have some 
good stories to tell. Since its founding 50 years ago, USAID 
has played a critical role in lowering child deaths by 12 
million a year. It has helped gain global coverage of basic 
childhood vaccines from 20 percent to 80 percent in most 
countries. The money we have invested in agricultural research 
led to the Green Revolution, which saved hundreds of millions 
from hunger and famine. And just recently, the World Bank 
announced that the first Millennium Development Goal, having 
the proportion of people living on less than $1 a day, has been 
reached ahead of schedule.
    Unfortunately, this message is not the one that dominates 
our headlines. After many years of providing aid, the public is 
skeptical that aid really helps. They are concerned that the 
problems are too big for us to be able to make a difference. 
And they don't have a clear idea of how the aid is actually 
used.
    In order to ensure that our money is being effectively 
spent and achieving the desired results, we need to collect 
solid empirical data about what works, and we need to make it 
available to the public. Without evidence that our programs are 
having a significant positive impact, we will lose the support 
and the confidence of the American people.
    Some seem to think we can keep cutting back on staff and 
salaries without hurting programs. Naturally no one wants to 
waste money on unnecessary overhead costs. But it is time to 
realize that development is a discipline, that our dedicated 
aid professionals, Foreign and Civil Service alike, have 
important skills and experience that we want to retain and 
build upon. If we don't invest in our human resources, we will 
pay dearly in the long run.
    One thing that can be done to put our aid programs on a 
sounder footing is to replace the Foreign Assistance Act of 
1961 with legislation better geared to the needs of the twenty-
first century. Last September, I released a draft of the Global 
Partnerships Act, which lays out a vision for how to make 
foreign assistance serve our national interests more 
efficiently and more effectively.
    Dr. Shah, I hope by now you have had a chance to review 
this draft. I would ask your staff to begin sitting down with 
us to discuss how we can improve it.
    Madam Chairman, I make the same offer to you and your staff 
so that we can have the benefit of your views and suggestions 
before introducing it later this year.
    Before I close, I would just like to say a few words on 
behalf of our late colleague, Don Payne, who devoted so much of 
his career to serving the poor and downtrodden, particularly in 
Africa. And, Dr. Shah, I welcome your recent launch of the 
Donald Payne Fellowship Program, designed to attract 
outstanding young people to careers in international 
development.
    I know that Don had been working with you for the last year 
on your draft diversity and inclusion plan, and this will be an 
important element of it. But I also want to bring to your 
attention the last piece of legislation that Don introduced. 
H.R. 4141, the Food Assistance Improvement Act of 2012, is 
designed to improve the nutritional quality and cost-
effectiveness of United States food assistance, based on a 
number of recommendations made by the GAO.
    Don wanted to ensure that the food we provide is of the 
right type, quality, and nutritional value, not just to prevent 
starvation, but to maintain and restore health for the most 
vulnerable populations. I think one of the best ways we can 
honor Don's life and memory is to move this legislation through 
the process in a cooperative and bipartisan manner.
    Thank you, Dr. Shah, and I look forward to your testimony.
    Chairman Ros-Lehtinen. Thank you so much, Mr. Berman.
    And now we will hear from our members, who are recognized 
to give 1-minute remarks, starting with Congressman Smith, the 
chairman of the Subcommittee on Africa, Global Health, and 
Human Rights.
    Mr. Smith. Thank you very much, Madam Chair.
    Welcome, Dr. Shah, to the committee, always great to see 
you. You know, I would ask that you perhaps in your statement 
and certainly in your work consider two issues that are largely 
overlooked. In 1998, I began the national effort to combat 
autism--wrote the law, Combatting Autism Act, which it was my 
bill. It was just re-signed into law by President Obama, 
providing money for research.
    But on the international side, we had a hearing May 31st. 
It is estimated that there are 67 million individuals with 
autism and in Africa, it is tens of millions. And we had a 
woman from Cote d'Ivoire who said in Africa, there are no 
services. There are no diagnoses being made. And these children 
are being abandoned, and many of them die.
    Secondly, on the issue of hydrocephalic children, many of 
whom get that way because of infection, we had a hearing on 
that with CURE International on August 2nd. I have a bill that 
I am going to be introducing, International Infant 
Hydrocephalus Treatment and Training Act.
    There is a simple shuntless intervention--and I saw it when 
I was in Uganda and Kenya--that can save the lives of these 
children, who otherwise die or are severely disabled. And I 
would ask you. We need to put resources behind both CURE 
International and their efforts and this effort on combatting 
autism.
    Chairman Ros-Lehtinen. Thank you so much.
    Mr. Faleomavaega?
    Mr. Faleomavaega. Thank you, Madam Chair.
    I want to thank you for holding this hearing. And I want to 
extend my personal welcome to Dr. Shah this morning at our 
committee.
    And I want to associate myself with the comments made 
earlier by our ranking member, the gentleman from California, 
Mr. Berman, especially to recognize the tremendous 
contributions that our former colleague and a dear friend of 
mine, Congressman Payne, who passed away. And I think it could 
not be more fitting that we name this program after him for the 
tremendous work that he has done for the continent of Africa, 
just as much as we have worked together for the past 23 years 
of being helpful to these 2 regions in Africa as well as in 
Asia Pacific region.
    I do have some questions I will ask Dr. Shah as we proceed 
with the hearing. Thank you.
    Chairman Ros-Lehtinen. Thank you very much.
    Mr. Rohrabacher is recognized.
    Mr. Rohrabacher. Thank you very much.
    We will miss Don Payne. And I will miss his aggressive 
refutations of the points that I make, as he always did so as a 
fine gentleman.
    We have $5 trillion more in debt right now than we had 3 
years ago, $5 trillion. Unless that is dealt with, our economy 
will collapse. Currency will collapse. You are going to have to 
convince us.
    And I am sorry. I love my colleagues who have such great 
hearts that they want to help autistic children in Africa and 
elsewhere, but you are going to have to convince me of why it 
is necessary to borrow more money from communist China in order 
to give money to some other country or some other group of 
people.
    I submit for the record on top of that, Madam Chairman, at 
this point I would submit for the record a list of perhaps 
$100-million worth of aid that we are giving to China. And I 
would like you to convince me of why it is necessary for us to 
provide this type of aid to the world's worst human rights 
abuser and a country that is governed by a clique that thinks 
of the United States as their enemy.
    Thank you very much, Madam Chair.
    [Note: The information referred to is not reprinted here 
but is available in committee records.]
    Chairman Ros-Lehtinen. Thank you, Mr. Rohrabacher.
    Mr. Sires is recognized.
    Mr. Sires. Thank you, Madam Chair, for holding this 
meeting. And I would like to associate myself with some of the 
comments made here by my other members, especially in regards 
to Don Payne.
    And also I would like to associate myself with the $100 
million that my good colleague Rohrabacher said that we are 
giving China, but I am also more concerned about the Western 
Hemisphere. It seems that some of the countries that need the 
most to promote democracy, we're cutting it, especially when 
you have countries like Iran moving into the region and 
establishing a relationship with some of these countries that 
are really out to end democracy in this area. So I am very 
concerned.
    All the cuts, especially when it comes to Cuba, there is a 
crackdown going on now just before the Pope visits. And I don't 
understand why this administration is so intent on cutting just 
about anything that promotes democracy in this area when we 
should really be putting more money into it. This business of 
appeasing some of these countries is just I don't understand 
it.
    Thank you very much.
    Chairman Ros-Lehtinen. Thank you very much, Mr. Sires.
    Judge Poe, Texas, is recognized.
    Mr. Poe. Mr. Shah, it is like we talked about in December. 
We can't reform foreign assistance without Congress and the 
administration working together to do so. For example, your new 
evaluation policy in my opinion is a step in the right 
direction.
    I commend you for that. On the congressional side, we are 
trying to do some things here, too. I appreciate your support 
for my foreign assistance reform bill, H.R. 3159. That is co-
sponsored by the ranking member, Mr. Berman.
    We need the administration to establish guidelines for 
monitoring and evaluation of America's money. We need those 
guidelines implemented by all departments that deal in foreign 
assistance so we can hold them accountable, learn from 
mistakes, and make sure those programs are either funded or not 
funded.
    Now it is hard to tell the bad programs from the good ones 
because we don't evaluate them. We should shut down programs 
that don't reform and start doing what they promised when they 
got our money. Instead, we should give that money to programs 
that deliver.
    After 50 years of doing foreign assistance, we don't 
subject our aid to rigorous evaluation. Those days need to end 
immediately and hold people accountable.
    I yield back.
    Chairman Ros-Lehtinen. Thank you very much.
    Mr. Connolly of Virginia?
    Mr. Connolly. Thank you, Madam Chairman, but I think Mr. 
Deutch may have been ahead of me.
    Chairman Ros-Lehtinen. Yes, you are so right. Mr. Deutch? 
See, I am just trying to be friends with you in hopes I can get 
some more of that chocolate. Mr. Deutch?
    Mr. Connolly. It is on its way, Madam Chairman.
    Chairman Ros-Lehtinen. Thank you.
    Mr. Deutch is recognized.
    Mr. Deutch. Thank you. Thank you, Madam Chair. And thank 
you to my friend and gentleman Mr. Connolly.
    Thank you, Dr. Shah, for being with us today. Dr. Shah, I 
would like to commend you on the progress that you have made 
with the USAID Forward Program to streamline the agency and 
make USAID more effective in this difficult budget climate.
    I said many times before to this committee that the work 
that is being done across the globe through our funding of 
international assistance programs is absolutely critical to the 
security of our own country, programs like the Global Health 
Initiative, which works to prevent the spread of HIV/AIDS and 
fund President Bush's PEPFAR Program, are vital to preventing 
global pandemics. These are the kids of programs that work to 
stabilize the most vulnerable regions in the world.
    International assistance should be an area where we can 
come together to support programs that save the lives of women 
and children by providing access to reproductive health care so 
that children don't have to lose their mothers during 
childbirth, so that young women delivering their first child, 
women whose growth is stunted because of poor nutrition or 
childhood illness, women living in rural areas or those who use 
traditional maternity care and deliver at home don't end up 
ostracized from their community from the debilitating effects 
of preventable conditions, like obstetric fistula.
    Dr. Shah, we provide funding for international assistance 
programs because they reflect our core American values. I look 
forward to your testimony today.
    And I yield back, Madam Chair.
    Chairman Ros-Lehtinen. Thank you so much.
    Mr. Royce is recognized.
    Mr. Royce. Thank you, Madam Chair.
    According to a recent study, when asked how to solve the 
North Korea's chronic food shortage problem, 94 percent of 
North Korean refugees said the government needed to be 
reformed. Only 1.4 percent said the answer was more food aid. 
They know that sending more food will only help the regime's 
inner circle and keep it well fed.
    We had one senior North Korean defector say, ``We must not 
give food aid to North Korea. Doing so is the same as providing 
funding for North Korea's nuclear program.'' And he argued that 
it allows Kim Jong-un to divert resources toward its military 
program, it allows the military to be well fed.
    According to one South Korean parliamentarian, the north is 
hoarding 1 million tons of rice, playing up the shortfall to 
pressure us and others for aid. Many others suspect that the 
north is hoarding food for the 100th anniversary of North 
Korea's founder, Kim Il Sung. Food aid, of course, would 
subsidize that event. Consolidating the Kim dynasty is no 
contribution to human rights.
    Thank you, Madam Chair.
    Chairman Ros-Lehtinen. Thank you.
    Ms. Bass is recognized.
    Ms. Bass. Thank you, Madam Chair.
    Dr. Shah, thank you for your steadfast leadership and 
commitment to foreign affairs and development. I commend the 
women and men of USAID, some of whom work in extreme and high-
stress environments. You and your colleagues continue to share 
the good will of the American people without our fail. For 
this, we are very grateful.
    I look forward to learning where you see real opportunity 
to maximize U.S. development and diplomatic efforts. I imagine 
the last several years have not been easy and you should be 
commended for your resilient work to make a more efficient and 
effective USAID, both abroad and here at home within the agency 
itself.
    Thank you very much.
    Chairman Ros-Lehtinen. Thank you very much.
    Mr. Connolly is recognized.
    Mr. Connolly. Thank you, Madam Chairman. And I welcome Dr. 
Shah to the committee again.
    A great power must reject the false choice that we can deal 
with our debt or we can deal with other obligations but we 
cannot do both. A great power has obligations, and it has 
interests that must be propounded and a modest bilateral and 
multilateral aid program is a tool without which we commit 
unilateral disarmament. If we are worried about the competition 
coming from China, they are getting off airplanes and on 
airplanes in every developing country in the world. And we are 
retreating. And that is not a wise long-term policy for the 
United States of America.
    I am interested particularly in hearing about two things 
today. One is advocacy. What do we know about what works in our 
aid program over 40-50 years of experience now?
    And, secondly, how are we best structured to make sure we 
are deploying the assets and resources we have got from an 
administrative point of view.
    Thank you, Madam Chairman.
    Chairman Ros-Lehtinen. Thank you, sir.
    Ms. Wilson is recognized.
    Ms. Wilson. Thank you, Madam Chair.
    Thank you, Director Shah, for your presentation of the 
President's Fiscal Year 2013 budget request for USAID to the 
committee today. It is a pleasure, pleasing pleasure, to have 
you.
    America has long been seen as an example for the rest of 
the world in democracy and diplomacy. And thank you for your 
role in leading this charge.
    The assistance of developing nations is integral in our 
national security. In fact, you had not spent many days on the 
job before the devastating earthquake ripped through Port au 
Prince, Haiti, a day that I am sure you recall vividly. In 
fact, the world recalls that day. That was a day that forever 
changed the direction of Haiti and will not soon be forgotten 
by many of my constituents in Miami, Dade County, Florida.
    Many of them note and are grateful for the responsiveness 
of USAID, both immediate and ongoing. I am encouraged by the 
outreach that you and your staff have maintained with the South 
Florida community.
    When I traveled to Haiti, I was alarmed by the thousands 
that remained homeless without any hope of finding work or 
housing. I was disturbed by the living nightmare of women and 
girls who are suffering from sexual and physical abuse. Upon my 
return, it was the stories of rape by force and the visuals of 
pregnant teens that haunted me.
    I sponsored a resolution on gender-based violence in Haiti 
to reassure the people of Haiti, particularly the women and 
children, that the United States remains a committed partner in 
the fight to end all forms of gender-based violence in Haiti.
    I would like to encourage the administration through the 
State Department and USAID to encourage the Haitian Government 
to take proactive steps that are consistent with the 
Interamerican Commission on Human Rights' recommendations on 
sexual violence to eliminate gender-based violence.
    It is my----
    Chairman Ros-Lehtinen. Thank you.
    Ms. Wilson. Oh, that is it?
    Chairman Ros-Lehtinen. Thank you very much.
    Ms. Wilson. Thank you.
    Chairman Ros-Lehtinen. Thank you, Ms. Wilson. Thank you to 
all of our members for their opening statements.
    And now the Chair is pleased to welcome our witness. Dr. 
Shah serves as the Administrator of the United States Agency 
for International Development. He was nominated by President 
Obama and sworn in as the 16th USAID Administrator in December 
2009.
    Previously Dr. Shah served as Under Secretary for Research, 
Education, and Economics and as chief scientist at the U.S. 
Department of Agriculture. He also served as director of 
agricultural development in the Global Development Program at 
the Bill and Melinda Gates Foundation.
    Dr. Shah earned his medical degree from the University of 
Pennsylvania Medical School and a master's degree in health 
economics from the Wharton School of Business.
    Dr. Shah, thank you for attending. Your entire statement 
will be made a part of the record. And I realize that your 
timer is not working. I will just fling the gavel at you when 
the 5 minutes are up in a very subtle way. Dr. Shah, you are 
recognized.

  STATEMENT OF THE HONORABLE RAJIV SHAH, ADMINISTRATOR, U.S. 
              AGENCY FOR INTERNATIONAL DEVELOPMENT

    Dr. Shah. Thank you, Chairman Ros-Lehtinen and Ranking 
Member Berman and members of the committee. It is an honor to 
be here today to present and discuss the President's Fiscal 
Year 2013 budget request for USAID.
    I would like to take a moment as well to recognize the life 
and work of your fellow committee member Don Payne. Congressman 
Payne was, of course, well-known on these issues and deeply 
respected and loved at our agency. He spent a considerable 
amount of time with me and with out staff in traveling to visit 
our programs. And we will continue to do what we can to honor 
and carry forward his legacy.
    Chairman Ros-Lehtinen, Ranking Member Berman, each of you 
has challenged our agency to be more businesslike in the way we 
carry out our mission and to apply a laserlike focus on the 
results we seek to achieve and to pursue them aggressively.
    Madam Chairman, I have appreciated your continued emphasis 
on the need for USAID to aggressively engage the private sector 
to seek more leverage and more results in how we spend our 
resources. And in response to that, we have expanded a number 
of efforts to do just that.
    Ranking Member Berman, I appreciate your efforts to pursue 
a reform agenda for foreign assistance that prioritizes 
monitoring and evaluation, focusing on results and 
transparency. And we believe we have taken a number of 
important steps to take that to the next level of performance.
    Two years ago, President Obama and Secretary Clinton called 
for elevating development as a key part of America's national 
security and foreign policy. Recognizing that in frontline 
states, such as Afghanistan, Iraq and Pakistan, in transition 
countries in the Middle East and North Africa, in expanding our 
engagements with the private sector to create markets of the 
future and jobs at home, and in focusing on and achieving real 
development results in moving people out of hunger and poverty, 
saving children's lives, improving access to water and 
education, responding to humanitarian crises effectively, and 
promoting democracy rights in governance, in doing these tasks, 
our work makes us safer and more secure over time.
    The President's Fiscal Year 2013 budget request is designed 
to do this. We have prioritized across our portfolio, 
continuing the path of closing missions in places like 
Montenegro, Panama, and Guyana. We are cutting programs. More 
than 165 programs have been reduced or cut. So that today 
USAID's China request, for example, is exclusively for only 
those communities in Tibet and for some very small disease 
control efforts to prevent the spread of international 
communicable diseases.
    We have eliminated health programs in Peru and Mexico, 
eliminated food and agriculture programs in Kosovo, Serbia, and 
Ukraine, all to refocus our efforts and our priorities in those 
places where we can generate the most significant results.
    The American Evaluation Association has referred to our 
approach to monitoring and evaluation as a gold standard across 
the Federal Government and encouraged other agencies to adopt 
the approach we are trying to adopt everywhere we work.
    And, perhaps most importantly, we are seeking to implement 
a new model of partnership with faith-based institutions, 
private sector entities, universities around this country and 
the world and, most importantly, to get much more value for 
money in the way we work with our existing NGO and contract 
partners.
    We do this work with great care, trying to invest more 
directly in local institutions, to stretch the value of 
American dollars and get better development results.
    Our budget request includes a request to authorize a 
working capital fund for USAID to help ensure that we have the 
contracts, capacity, and oversight, and management capability 
to continue to squeeze more value for money in how we seek to 
achieve development results.
    And this budget focuses on our core priorities. To support 
the transitions in the Arab Spring, we are requesting a joint 
State-AID account of $770 million in an incentive fund designed 
to support a critical transition.
    In our frontline states of Iraq, Afghanistan, and Pakistan, 
we continue to fight for sustainable programs that are 
delivering results. We have reduced the scale and scope of that 
programming to ensure sustainability. And we are very cognizant 
of the security risks and security management strategies we 
have put in place in those environments.
    Global health, at $7.9 billion, is the single largest item 
in the foreign assistance request. This amount of resource will 
allow us to meet the President's goal of increasing treatment 
for HIV/AIDS patients from 4 million to 6 million people, 
essentially saving 2 million additional lives.
    It will allow us to maintain our commitment to fight for 
and implement the end of AIDS by creating a generation born 
without HIV/AIDS. It will allow us to continue to prioritize 
the very efficient President's Malaria Initiative, which has 
seen in many of its priority countries child death come down by 
more than 30 percent due to effective and cost-effective 
programs implemented well. And it allows us to capture some of 
the new opportunities that technology and innovation have made 
possible in terms of saving children's lives.
    The budget includes a $1 billion request for our Feed the 
Future partnership. We saw last year the worst drought in more 
than six decades hit the Horn of Africa, placing 13.3 million 
people at risk of hunger and starvation. USAID led an 
international humanitarian response, helping to save thousands 
of children's lives and feed more than 4.5 million individuals.
    But food aid costs eight to ten times more than investing 
in helping people produce and sustain their own futures through 
agriculture. And we are starting to see real results in our 
Feed the Future partnership, with countries in that program 
experiencing a rate of agricultural productivity growth nearly 
eight times the global average.
    So I will conclude my statement with a thank you to our 
staff. We have asked them to take on real risks in difficult 
environments and to take on a significant and aggressive reform 
agenda, which I call USAID Forward. They have done this in an 
impressive manner.
    And, while much work lies ahead, I appreciate your support 
and your ideas and your consultation as we continue to work 
together to improve our national security. Thank you.
    [The prepared statement of Mr. Shah follows:]
    
    
    
                              ----------                              

    Chairman Ros-Lehtinen. Thank you so much, Dr. Shah. Thank 
you for excellent testimony. And now we will begin our question 
and answer period, 5 minutes per member.
    I will ask a series of questions, Dr. Shah. You won't have 
time to answer, but I respectfully request if I could get a 
written response to these, that would be wonderful.
    On Haiti, the President's Fiscal Year 2013 budget allocates 
nearly $340 million in new assistance funds for Haiti. The 
recent resignation of the Haitian Prime Minister and the 
absence of the interim Haiti Recovery Commission raises serious 
concerns about what oversight mechanisms are being employed to 
guarantee accountability of U.S. taxpayer dollars.
    So if you could respond in written form what action is the 
U.S. Government undertaking in order to ensure proper 
transparency of assistance funds into Haiti?
    On funding for the Palestinian authority, Dr. Shah, the 
administration is pressing Congress to release $147 million for 
Palestinians in the West Bank and Gaza. Among the arguments, it 
utilizes that Abu Mazen needs to be supported because he is all 
we have. However, the administration is not demanding that Abu 
Mazen return to the negotiation table with Israel without 
preconditions, nor that he stops his unilateral statehood 
scheme at the U.N. The administration also says we need to help 
rebuild the Palestinian economy, this at a time when our 
economy is facing serious challenges and Americans are 
suffering.
    Now, in the list of projects the administration wants to 
fund with 147 million in taxpayer dollars, there are some that 
are aimed at addressing humanitarian concerns, funding for 
water programs, health, food aid, and support for USAID 
programming. Congress and the administration can't find common 
ground on these.
    However, there are others that Congress finds difficult to 
justify as advancing U.S. national security interests or in 
assisting our ally and friend Israel. In this respect, if you 
could justify $2.9 million for trade facilitation, $4.5 million 
for tourism promotion, and $8.1 million for road construction?
    Specifically, I would ask that you justify a total of $26.4 
million in reconstruction and recovery for Hamas-run Gaza. That 
includes cash for work programs? And, more broadly, how much 
has the U.S. spent in total since 1993 in West Bank and Gaza? 
And how much is the administration proposing we spend next 
year? And how can we justify that?
    Turning to Egypt, if you could respond to what mechanisms 
you have developed to ensure that U.S. assistance to Egypt does 
not directly or indirectly provide support or otherwise is 
influenced by the Ministry for International Cooperation and 
Development? And what is the justification for the provision of 
any U.S. assistance to an Egypt Government potentially 
dominated by the Muslim Brotherhood or affiliated extremists? 
Do you agree that no U.S. assistance should be provided, 
directly or indirectly, to the Muslim Brotherhood and 
affiliated extremists?
    And, lastly, to my native homeland of Cuba--and Mr. Sires 
well spoke of that--the Obama administration has had a policy 
of concession toward the Castro brothers, but it has not 
yielded any measurable change for democracy. And I am deeply 
concerned about the Department of State and USAID's growing 
funding for programs that promote the Castro brothers' sham 
economic reforms at the expense of funding for important 
programs that do support Cuba's political prisoners and the 
growing internal opposition.
    Though this administration likes to point to Castro's so-
called economic reforms as a sign of change, the fact remains 
that 11 million Cubans continue to suffer under brutal 
conditions with the repressive Castro regime. And this new 
focus on economic reforms will do nothing more than validate 
the Castro regime and promote their radical anti-American 
propaganda.
    And so my question is, how does harnessing U.S. foreign 
assistance to promote the Castro brothers' sham economic 
reforms build the capacity for the internal opposition? And how 
can we prioritize the funding for Cuba to strive for a free and 
democratic Cuba by again funding the pro-democracy programs 
there on the island?
    So I thank you, Dr. Shah, for that written response 
whenever you get to it. Thank you so much, sir. And now I would 
like to turn to Mr. Berman.
    Mr. Berman. Thank you very much, Madam Chairman.
    Dr. Shah, I think under your leadership, a number of 
important and exciting things are happening at USAID. You have 
been leading the way to make our aid more efficient, more 
effective, and more accountable. You have restarted the process 
of doing country strategies so that we are clear about our 
objectives and our measures of success.
    You have established a new system of monitoring and 
evaluation, as the gentleman from Texas mentioned earlier, to 
ensure that funds are spent properly and achieve the desired 
results. And you have launched procurement reforms to make it 
easier to partner with small businesses and local NGOs, rather 
than bundling everything into huge contracts that only the 
biggest companies could hope to compete for.
    When it comes to Afghanistan particularly, and perhaps 
Pakistan as well, our largest recipients of ESF, these 
considerations seem to go out the window. We don't seem to have 
a clear idea of what success would look like in Afghanistan. 
Each week there seems to be some new report about corruption 
and misuse of funds with little good news attached.
    We are spending a huge portion of our funding on security 
costs, instead of on actual programs. And USAID has just 
recommended limiting the use of cooperative agreements and 
grants in Afghanistan, which means, in effect, ending our work 
with NGOs and handing it all over to large companies.
    Can you talk to us about what you would regard as success 
in Afghanistan, how you are guarding against corruption, what 
progress we have made so far, and why we are relying so heavily 
on big contractors?
    And let me just insert one other question if you have a 
chance to answer that as well. This deals with Syria. Basically 
world leaders have made an historic commitment to protect 
populations from genocide, war crimes, ethnic cleansing, and 
crimes against humanity.
    What can you tell us in open session about what the United 
States is doing to uphold its responsibility to protect 
civilians in Syria? Do we have any assessment of the needs? And 
are we working with international humanitarian agencies to find 
ways of meeting them? So Afghanistan more generally and Syria 
that specific question. Thank you.
    Dr. Shah. Thank you, Congressman. I appreciate your 
comments about our overall reforms. And I would suggest that 
they have also been implemented in Afghanistan.
    In Afghanistan, we have seen over the last several years 
significant and important results, 7 million kids in school, 64 
percent health coverage leading to a report that came out in 
December that showed the largest reductions in maternal and 
neonatal mortality anywhere in the world have taken place in 
Afghanistan.
    We have also seen real economic performance, 10-11 percent 
annualized growth rates for a number of years, and a more than 
tripling of domestic revenue collection, which needs to 
continue on that trend for the Afghans to increasingly take up 
the responsibility of paying for their own public expenditures.
    The challenge going forward and the challenge the President 
has articulated is sustaining those gains in a challenging 
environment and in an environment where we seek enough 
stability for our troops to be able to come home on the 
schedules the President has announced and supported.
    In that context, we are doing a number of things 
differently. We have formulated and implemented sustainability 
guidance, reviewed all of our programs, found that some needed 
to be restructured pretty dramatically in order to be able to 
be sustained by Afghan revenues and by any legitimate future of 
what assistance could look like for the Afghan people.
    Second, we are working closely with international partners 
to have a long-term strategy that is consistent with Afghan 
priorities but also forces real prioritization and focuses on 
specific and concrete results, things like tripling energy 
access to businesses and to people in Afghanistan, which has 
been achieved over the last 6 years.
    We believe that we want to be working more with local 
institutions, including in a way that monitors against 
corruption, government, and NGOs. I will look into the specific 
point about the cooperative agreements because that was only 
intended to apply to large-scale infrastructure being developed 
in complex security environments, but I will have to look into 
that and come back to you more specifically.
    On Syria, in particular, we have certainly been very active 
in conducting and partnering with others to conduct 
assessments. Syria actually has a strong international 
community presence inside of Syria, in part due to their 
support for Iraqi refugees over a longer period of time. Many 
of them have conducted assessments and presented us with 
opportunities to support specific humanitarian efforts with a 
real focus on getting commodities and medical support and 
trained medical personnel to immediately affected areas.
    That said, any international humanitarian effort is 
fundamentally constrained by the serious and very transparent 
lack of access created by the Syrian Government's active 
military campaign. And while I can't speak about this in much 
more detail, I think it is safe to say that we should have 
modest expectations of what humanitarian partners will be able 
to achieve there, but we are working with them aggressively, as 
aggressively as we can.
    Chairman Ros-Lehtinen. Thank you very much, Mr. Berman. And 
thank you, Dr. Shah.
    Mr. Smith is recognized.
    Mr. Smith. Thank you very much, Madam Chair.
    Dr. Shah, when the President's Emergency Plan for AIDS 
Relief, or PEPFAR, was marked up here in this room a decade 
ago, I sponsored both the conscience clause amendment and the 
anti-trafficking and prostitution amendment. Both were enacted 
into law in 2003 and reauthorized again in 2008.
    I have read the acquisition and assistance policy 
directive, the AAPD 1204 issued on February 15th of 2012, which 
replaces previous guidance on these matters. The policy 
directive reiterates the law verbatim, ``An organization, 
including a faith-based organization, shall not be required as 
a condition of receiving assistance.'' And it goes on to list 
it ``and that the organization has a religious or moral 
objection. It shall not be discriminated against in the 
solicitation or issuance of grants,'' and it goes on from 
there.
    Can you provide assurance, including a commitment to robust 
monitoring, that grants contracts or cooperative agreements 
haven't been, aren't now, nor will be written in such a way--
and I am thinking of integrated services--to diminish or to 
even preclude organizations, including faith-based 
organizations, from applying or receiving those funds?
    Secondly, on the anti-sex trafficking prostitution law, the 
DC Circuit Court of Appeals, as you know, held that USAID may 
enforce the requirement that entities have a policy opposing 
sex trafficking and prostitution while the U.S. District Court 
for the Southern District of New York has ruled against it. 
Your view on this proviso? And will the administration appeal 
to the U.S. Supreme Court? I understand the filing deadline for 
cert is May 2nd. So that date is fast arriving.
    And, finally, number three, according to the GAO report 
issued on October 11, a USAID-funded award recipient, the 
International Development Law Organization, or IDLO, advised 
the Kenyan entity responsible for drafting the new Kenyan 
Constitution, to include language in the Constitution that 
would legalize abortion in that country.
    The only reason we learned about this blatant violation of 
U.S. law prohibiting the use of funds to lobby for or against 
abortion is that IDLO itself informed GAO in response to GAO's 
inquiry. The USAID's official responsible for managing the 
grant informed GAO that she did not fully read IDLO's reports 
until the USAID IG inquiry brought them to her attention in mid 
2010. I would note my extreme disappointment that the USAID IG 
did not reveal this violation in its report to Congress on 
September 29th, 2010.
    My question, please explain how this violation occurred; 
why USAID did not properly monitor the grant so that the 
violation could be immediately rectified; and what, if any, 
measures have been taken to ensure that future grants that 
potentially involved lobbying for abortion adhere to legal 
funding restrictions.
    Dr. Shah?
    Dr. Shah. Thank you, Congressman. And thank you for your 
partnership and work, especially on fighting for the health of 
vulnerable populations around the world. We very much 
appreciate that.
    On your first point, faith-based institutions and 
partnerships are absolutely critical to our ability to be 
successful around the world. And one of the first things I did 
was ask our faith-based office to do a systematic review of 
both how we work with faith-based partners and to look in-depth 
at our procurement and contracting to explore whether we could 
do a better job of being more accessible and a better partner 
overall and as an agency.
    We have been steadily implementing many of the findings 
that they have come up with. And I think we are doing a better 
job by any number of metrics and in terms of our engagements 
with the faith-based community and in terms of supporting the 
fact that they sometimes generate better results because they 
have a deeper, longer-standing, more sustainability-oriented 
commitment to delivering services for very vulnerable 
populations.
    So the short answer, sir, to your first question is yes, 
absolutely, we will be implementing the law as you read it. And 
we will have a strict focus on making sure that is the case.
    Mr. Smith. And I hope, again, that integrated services 
would not become code for exclusion.
    Dr. Shah. Integrated was one of the issues that came up in 
the review. And we have come up with a few options that have 
enabled us to work to ensure that that is not exclusionary for 
faith-based partners. And we are now exploring a second tier 
set of options that will go even further than that. So we 
recognize that issue and have been working on that and I think 
getting positive feedback from our faith-based colleagues and 
partners on our steps in that space.
    In terms of your point about the case that is with the 
Solicitor General, I understand it is the Solicitor General's 
decision and will be made soon. I can follow up with your 
office in more detail, but I thank you for raising that.
    Chairman Ros-Lehtinen. Thank you very much, Dr. Shah. Thank 
you, Mr. Smith.
    Mr. Faleomavaega?
    Mr. Faleomavaega. Thank you, Madam Chair.
    Dr. Shah, approximately 20 years ago, the downfall of the 
Soviet Union, one of the decisions our Government made was to 
show no more presence of USAID in the Pacific region because of 
limited resources. We have new countries coming out of East 
Asia, South Asia, Central Asia. And for the last 100 years, 
USAID is not around.
    Now, I have got a little problem here because currently the 
People's Republic of China currently has a $600-million 
development aid program for the 16 island nations. And when I 
looked around, the last thing we did was we sent a medical ship 
full of doctors and nurses. They did inoculations, vaccinations 
about 2 years ago.
    And my question is, do we have to wait another 40 years to 
sail another ship? And I am very concerned with the fact that 
there is no presence. I think it has been 2 years now USAID has 
been looking at whether or not it should justify itself in 
coming to the Pacific region.
    Where are we with this right now? Is there still a lack of 
importance in this region, why USAID feels it shouldn't be 
there?
    I noticed also with interest--and please don't get me 
wrong. Absolutely these countries need funding: The Western 
Hemisphere, 3 countries, South Asia, 4 countries, Middle East, 
5 countries, Asia Pacific region, 3 countries, Africa, 19 
countries, and I am sure there will probably be assistance. 
There is not one thing mentioned about Central Asia, nothing 
mentioned about Eastern Europe, and absolutely zero for the 
Pacific region. Can you comment on that?
    Dr. Shah. Yes, sir. Thank you for the comment and your 
point. The Pacific region is, in fact, a priority for this 
administration. President Obama articulated as such on his trip 
to the Pacific. And his comment on returning was that this is a 
region where they welcome and seek active and greater 
partnership in----
    Mr. Faleomavaega. The problem I have with this, Dr. Shah, 
is that in my humble opinion, the only foreign policy that we 
have toward the Pacific region is really with Australia and New 
Zealand. These island countries are only incidental to our 
overall major interests in this region. And I am very concerned 
about this.
    If it is possible that China can provide a $600-million 
economic development program for these countries? It tells me 
that we are really not that interested.
    Dr. Shah. So I would just argue, sir, that we have, in 
fact, opened a new satellite office in Papua New Guinea. We are 
putting in place regional programs for the Pacific islands. We 
are doing so, as you mentioned, in partnership with New Zealand 
and with Australia and focused on using new tools and 
technology so we get as much leverage as is possible since this 
is overall a very challenging fiscal environment.
    And we are doing that with an eye toward some core 
priorities for the region: Health, education, and regional 
integration in terms of economics and resilience. We know that 
two-thirds of the predicted disasters over the course of the 
next decade will be Asia Pacific and in where they take place. 
And so we have active risk reduction programs that are seen as 
the best in the world.
    Mr. Faleomavaega. I know my time is up, Dr. Shah. And I 
have got to hit you up with one more question.
    Dr. Shah. Sure.
    Mr. Faleomavaega. One of the issues that is always dear to 
my heart is the fact that you know the usual Chinese saying, 
``Feed the man fish. He will live for 3 days. But if you teach 
him how to fish, he will live forever.''
    I honestly believe that one of the most important public 
diplomacy issues that our country should really promote and 
enhance, currently we have about 670,000 foreign students 
attending our American colleges and universities. And I am 
curious to know where is USAID putting its priority in 
providing educational opportunities for foreign students?
    Central Asia, countries that are really, really in need of 
nuclear self-educated and professional people so they can 
continue to do better in terms of how they can provide greater 
transparency than they are giving governments. And I was just 
wondering, is USAID serious they can provide the educational 
opportunities for students from these countries that really 
have a need?
    Dr. Shah. Sir, we absolutely are. I would suggest we 
prioritize at this point basic education and track outcomes so 
that people can progress to secondary school. In secondary 
education, we prioritize getting girls to complete and work 
through secondary education.
    And we have just launched a new series of expanded 
partnerships to allow for twinning between U.S. higher 
education institutions and counterparts around the world. Today 
we know that it can often be cheaper and more effective to help 
people gain higher education through any number of innovative 
ways, including virtual learning and other tools. So we are 
very cost-conscious and technology-informed in how we are 
pursuing that goal, but we are pursuing that.
    Mr. Faleomavaega. I have 100 more questions, I am sure, but 
I am going to go.
    Chairman Ros-Lehtinen. Thank you.
    Mr. Faleomavaega. Thank you, Madam Chair. Thank you, Dr. 
Shah.
    Chairman Ros-Lehtinen. Thank you.
    Mr. Rohrabacher?
    Mr. Rohrabacher. Thank you very much, Madam Chairman.
    And, Mr. Administrator, I put in the record in my opening 
statement a list----
    Chairman Ros-Lehtinen. Without objection.
    Mr. Rohrabacher. We already have that in the record, Madam 
Chairman. Thank you.
    In that list, you will see the list of items that are going 
to China. And there are millions of dollars, perhaps $100 
million that I have listed. Many of them are indeed for 
environmental assistance to China to try to improve their 
environment, but here are some of the others on the list. Here 
are $150,000: For the Organization for Economic Cooperation and 
Development for development assistance to China. Here is 
$47,000 to Management Systems International for development 
assistance, USAID to Rockefeller philanthropy advisers of $2.4 
million for sustainable livelihoods in China; The Asia 
Foundation, $1 million to improve disaster management in China. 
There is, for example, to an undisclosed foreign contractor 
$150,000 for development assistance in China and $450,000 to 
The Asia Foundation for disaster management in China. It is 
200, almost $300,000 to Bob Davis nongovernmental organization 
for sustainable livelihoods in China.
    Now, these things all add up to a considerable sum of 
money. Can you tell me why when China at this moment is 
expanding their military spending in a way that is threatening 
to its neighbors and to the security of the United States at a 
time when it is developing its space-based weapons systems and 
rocket systems at a time when it is itself giving aid to rogue 
states that hate the United States, whether it is Iran or North 
Korea or Venezuela, why are we providing money to them? 
Actually, why are we borrowing money from them in order to give 
it back to them so that we can pay interest on the money that 
we just gave to them? Something is screwy here. You may proceed 
to try to answer that.
    Dr. Shah. Okay. Sir, the Fiscal Year 2013 request for China 
is $6.5 million. Almost all of that is exclusively for programs 
to assist Tibetan communities to preserve their unique 
livelihoods and with a small amount to focus on limiting the 
transmission of infectious disease, which is a CDC partnership 
with China that grew out of the SARS epidemic and today focuses 
on top-level HIV/AIDS----
    Mr. Rohrabacher. So you say that is $6 million going to 
who?
    Dr. Shah. $6.5 million going to programs to support Tibetan 
communities.
    Mr. Rohrabacher. Okay. Six million dollars going to Tibetan 
communities.
    Dr. Shah. But I believe the $6.5 million covers the Tibetan 
communities and the CDC (Centers for Disease Control) 
partnership with----
    Mr. Rohrabacher. Okay. So we are helping them control their 
health care needs for their people.
    Dr. Shah. That is a program that grew out of the SARS 
epidemic, which, of course,----
    Mr. Rohrabacher. Right.
    Dr. Shah [continuing]. Had global consequences. And it is a 
technical program that helps them maintain focus.
    Mr. Rohrabacher. Yes.
    Dr. Shah. There are two other important points.
    Mr. Rohrabacher. There are always global implications to 
every outbreak of every communicable disease.
    Dr. Shah. There are two other important point. The first is 
on global health, China has traditionally been a recipient of 
funding from the global funds for TB and malaria. This 
administration has taken the position and used our Board seat 
on that group to try to transition China to be a donor to that 
group, as opposed to a recipient. And that would be if made a--
--
    Mr. Rohrabacher. Let me ask you this. Have they donated 
more than they have taken out?
    Dr. Shah. I don't know the----
    Mr. Rohrabacher. I know the answer to that. I have 
confronted the people before with this. And they are taking out 
like ten times more than they are putting in. And you call that 
a success?
    Dr. Shah. No, no. We are actually trying to change that. We 
are trying to make it so they----
    Mr. Rohrabacher. I know you are trying to change it. That 
is not a success. You have not been successful at changing 
that. What you have been successful at is now trying to give 
some money while it is taking out an enormous amount of other 
money.
    But what about all of these other things that I just pushed 
in your direction? Development assistance? Disaster management? 
Why are we paying China? Why are we borrowing money from China 
to give it back to them like that when they are spending their 
money on weapons aimed at the United States?
    Dr. Shah. Sir, I would be happy to have my team look at the 
list and come back to you specifically. I know with certainty 
that the request for Fiscal Year 2013 explicitly focuses on 
support for Tibetan communities and a small amount of technical 
partnership to manage international disease control priorities.
    Another point I would make, sir----
    Mr. Rohrabacher. Madam Chairman, before my time has gone 
out, let me just note I am opposed to free trade with 
dictatorship, especially the world's worst human rights abuser. 
But what I am more opposed to is giving aid to human rights 
abusers and dictatorships. And we have got the worst in all 
worlds in our relationship with China, which is the world's 
worst human rights abuser.
    Thank you, Madam Chair.
    Chairman Ros-Lehtinen. Thank you, Mr. Rohrabacher.
    Mr. Deutch is recognized.
    Mr. Deutch. Thank you, Madam Chair.
    Dr. Shah, the President's budget requests $569 million for 
family planning and reproductive health activities, including 
$39 million for the U.N. population fund for international 
organizations and programs that count and $530 million in 
bilateral family planning funds from global health programs 
account.
    Can you explain, please, the types of programs that USAID 
funds to provide access to reproductive health services that 
has the potential to prevent 350,000 women from dying during 
pregnancy or childbirth each year or prevent the horrific 
effects from unsafe childbirth, like obstetric fistula?
    Dr. Shah. Thank you, Congressman.
    The family-planning program focuses on, as you are aware, 
voluntary family-planning partnerships with countries. We do 
not in any context support or encourage or in any way fund 
abortion. In fact, the opposite is the case. By having better 
birth spacing and by avoiding unintended consequences, 
especially for very young girls, ages 12 to 16, we see much, 
much, much reduced levels of abortions in the countries where 
we work.
    The other theme in this program has been transition to 
local management and control and funding responsibility for 
these efforts. Particularly in Latin America, we have seen over 
the last 12-15 years. Many of these programs transition to 
their own domestic management and their own domestic revenue 
support.
    And the reason countries choose to do that is they see that 
as the number of births go down and the total fertility rate in 
countries goes down, that that lays the basis for economic 
growth, greater stability, greater ability to invest in 
children and their access to school and education that has been 
a core part of generating what we call in this field a 
demographic dividend, which kickstarts development activities.
    Mr. Deutch. Thanks, Dr. Shah.
    Dr. Shah, changing gears, I just would ask if you would 
provide some information to us, perhaps in writing, after the 
hearing. It has been reported that USAID provides assistance, 
possibly $2 million, to the Palestine Investment Fund, 
particularly to its loan guarantee program, for technical 
support is my understanding.
    If you could provide us with information on that funding, 
whether or not those reports are accurate, and the nature and 
scope of any such contributions, that would be helpful.
    Dr. Shah. We can do that.
    Mr. Deutch. I appreciate it.
    [The information referred to follows:]
    
    
    
                              ----------                              


    Mr. Deutch. And, then, finally, like the chairman and my 
friend Congressman Wilson and other colleagues on this 
committee, many of our constituents were deeply affected by the 
devastating earthquake in Haiti that occurred now more than 2 
years ago.
    And one common refrain that I hear because of my 
constituents is why the recovery process seems to be moving so 
slowly and, of course, the widespread allegations of 
corruption. The question I have, more specifically, is what is 
USAID doing to work with the Haitian Government to address the 
longstanding rampant corruption charges and provide support for 
civil society to establish proper government institutions, 
judicial processes, and uphold the rule of law.
    Dr. Shah. Thank you.
    I think it is important on Haiti to mention that there has 
been very significant and critical progress. We have seen food 
production go up significantly. Corn yields are up 300-plus 
percent, rice yields 60 to 70 percent, more, better nutrition 
outcomes. We have seen the effective control of the cholera 
epidemic, which, of course, we need to stay vigilant about. The 
access to clean water and safe sanitation has gone up compared 
to pre-earthquake levels. And, most importantly, we are seeing 
real private investment in an industrial park in the north that 
is creating 60,000 jobs and new Marriott Hotel in Port-au-
Prince that will do something similar.
    So there are signs of real progress that I think we all 
looked to with real hope. There are also challenges. One of the 
challenges has been that it has taken some time for a peaceful 
transition in terms of democratic governance to lead to a fully 
effective government. And, as was noted earlier, the prime 
minister whom we were working very closely with on the 
assistance program and coordination just recently left his role 
after being placed in it quite late. And so we await progress 
there.
    We are in a constant and very deep, multi-level discussion 
with our Haitian partners. We support civil society and, in 
fact, have made a number of procurement changes to how we work 
to support small businesses here to be part of the effort but 
also to support Haitian civil society, NGOs, and local 
businesses more directly. And, in fact, as we do larger 
procurements for different types of projects, we have built in 
very strict standards to ensure that there is an effective role 
for those types of organizations.
    On judicial reform, we have continued to partner with our 
Haitian counterparts. As you know, President Martelly is 
committed to effective judicial reform. And we could go into 
that in some detail, but that has been an important part of the 
dialogue because you are absolutely right that that lays the 
basis for the rule of law that allows all of those earlier 
gains in private investment and other things to really take 
hold and expand.
    Mr. Deutch. And, Madam Chairman, if I could just ask Dr. 
Shah to provide the committee with some of the details on those 
changes in the procurement process on the specific efforts with 
civil society and----
    Chairman Ros-Lehtinen. Thank you.
    Mr. Deutch [continuing]. Most specifically, in our 
community to make sure that our constituents understand----
    Chairman Ros-Lehtinen. Thank you so much.
    Mr. Deutch [continuing]. The opportunities they have as 
well.
    Chairman Ros-Lehtinen. We will do that. Thank you.
    Judge Poe is recognized.
    Mr. Poe. Dr. Shah, two issues I want to talk about, one 
that we have discussed before. That is American rice. As you 
know, historically American rice, the best trading partners, 
Iran, Iraq, and Cuba, those markets have sort of dried up over 
the years. And American rice farmers are looking for markets. I 
would just encourage you that when you have the opportunity in 
USAID to be involved in shipments of rice to somebody that 
American rice goes here.
    I would like to have unanimous consent to put in the record 
a letter, bipartisan letter, Madam Chair, to the Administrator 
of Trade of Iraq.
    Chairman Ros-Lehtinen. Without objection.
    Mr. Poe. And I will furnish you a copy of that, too.
    On the issue of USAID helping out other countries, there 
are 12 departments, 25 agencies, 60 Federal offices that run 
foreign aid programs for the United States. Few have any sort 
of evaluation policy, let alone a standardized evaluation 
policy.
    MCC is the only one with a strong policy. USAID's was weak 
and just issued last year. State Department was issued in 
February of this year and was even weaker. And the DOD doesn't 
have anything in writing about evaluation of programs.
    Do you believe a common set of guidelines on measurable 
goals and monitoring of evaluation plans would be helpful?
    Dr. Shah. Absolutely, sir. In fact, part of the President's 
policy directive on development was calling for such an 
approach. I would note when I took office and reviewed our own 
performance here I thought we could do a lot better. I 
criticized our current approach at that time and said that it 
was a 2-2-2 approach with two consultants traveling for 2 weeks 
writing reports that two people read and didn't really have the 
statistical validation that I think you need in this field to 
demonstrate whether or not your programs are working.
    We put in place a new evaluation policy to ensure every 
project we pursue has an independent third party evaluation 
done by very rigorous standards that include measuring data, 
collecting the right data, looking at a counterfactual, having 
a baseline. And the result of that will be that before the end 
of this year, we will post more than 250 independent 
validations with no success story glossiness to them at all 
straight to our Web site and put them in the public domain so 
that we and everybody else can learn about the results of our 
programs.
    I will just say that because we have been able to improve 
our evaluation, we know that, for example, the President's 
malaria initiative has been reducing all-cause child mortality, 
under 5 mortality, by 25-30 percent in country after country in 
a very efficient way.
    We know that our Feed the Future programs are starting to 
really show results with agricultural productivity growth being 
anywhere from seven to eight times that of the global average. 
And we even are studying our more challenging democracy and 
governance and rights programs to try to understand which 
strategies, for instance, are most effective at helping kids 
escape situations of trafficking and modern-day slavery. And I 
believe this work and this area of endeavor ought to be treated 
like a science and the evaluation policy is intended to help 
move us in that direction.
    Mr. Poe. Will you continue to work with us on H.R. 3159, 
co-sponsored by the ranking member and myself, to try to have 
an overall evaluation policy of foreign aid? And, as alluded to 
by many members, Americans are frustrated by foreign aid for a 
lot of reasons, but one of the frustrations, they are writing 
checks and they don't know where that money ends up in whose 
hands throughout the country. And I would suggest that a good 
place to start is with the $1.6 billion that we give to Egypt, 
especially during these times, that is co-sponsored by you and 
the State Department.
    Second question, I am glad to see that USAID is cutting 
funding in some programs and putting more money for monitoring 
and evaluation. Explain why you are doing this.
    Dr. Shah. Well, you know, Representative, I certainly want 
to also thank you for your leadership on monitoring and 
evaluation. I think it is critical that we invest in collecting 
data so that we know what we are achieving. And we are trying 
to do that in every one of our efforts. In fact, we have had 
more than 60 percent of our Foreign Service is now with the 
agency within the last 5 years. And most of that is just 
attrition rehiring and our demographics.
    It has given us an opportunity to ask everyone to go 
through rigorous training on evaluation. We have set up an 
evaluation and monitoring service center in difficult 
environments, like Afghanistan. We have tripled our staff 
presence and gotten out more so that we can actually visit and 
see programs and ensure there is more accountability. And that 
allows us to report on results with much more credibility.
    So I appreciate the focus on that. I think it is worth 
investing in that activity because if you don't know the 
results you are generating, you end up spending much, much, 
much more money before you kill programs or close things that 
don't work and you end up under-investing in those things that 
have the potential to achieve dramatic results, like what we 
are seeing in reducing child death, for example.
    Mr. Poe. Thank you, Madam Chair. Yield back.
    Chairman Ros-Lehtinen. Thank you very much.
    Mr. Connolly is recognized.
    Mr. Connolly. Thank you, Madam Chairman.
    Dr. Shah, if I could sort of pick up on one of those last 
points of my friend and colleague Ted Poe? I will use the word 
``efficacy.'' It is not like foreign assistance is a new 
concept. We have been doing it for a long time. Why don't we 
have a more robust explanation and advocacy for what we have 
been doing for half a century?
    I mean, by this point, surely, we have some metrics we can 
point to where we have done this, this, or this, or have 
learned from this failure. And, yes, it took 30 years, but 
agricultural productivity improved child mortality, 
dramatically improved. Fertility rates went down because of our 
intervention or not. I guess it has always puzzled me that 
there is not a much more assertive and aggressive attempt by 
our development assistance agency to propound that.
    And the down side of not doing that is there is very little 
constituency, as Judge Poe indicated, frankly, for foreign aid 
in America.
    Dr. Shah. Well, thank you, Congressman. I agree with your 
basic premise that, in fact, when Americans see the value in 
the results that are generated through these efforts, they 
suggest that we should be spending up to 10 percent of our 
public budget in this space. And, as you know, we spend less 
than a tenth of that.
    The reality is we know what works at this point. And we 
know what the priorities ought to be. We have focused in our 
humanitarian work on building resilience to avoid humanitarian 
requirements in the first place. And we know that that can be 
very successful.
    We focus our efforts on creating what I spoke about 
earlier, demographic dividends for countries, because by 
managing the rate of childbirth and birth spacing and by 
supporting child survival to age five and ensuring kids get 
into school, we know that is the pathway out of poverty and 
that generates more results and outcomes than other activities.
    We are refocusing on and Ranking Member Berman mentioned in 
his opening statement----
    Mr. Connolly. My time is going to be limited. And I 
appreciate your response, but I am not making that point. I 
want to see a more robust documentation so that the narrative, 
the story is out there that is a good story. And I think we are 
missing an opportunity and have historically. And we are always 
on the defensive as a result. And I, for one, am kind of tired 
of it after 30 years.
    I would like to see us, frankly, on the attack. Here is 
what we have accomplished. And it seems to me it would be nice 
to have an AID Administrator who actually did that, instead of 
being here, not you, defensive, trying to, you know, support an 
unpopular program. Well, it is unpopular because we don't tell 
the story of success. And if we got successes--and I know we 
do, some of them very dramatic--let's tell it and let's 
document it. Let's get it out there. And I would strongly urge 
you to do so as part of your legacy.
    Coordination and structure. One of the things that has 
concerned me--and I think I told you this the first time we 
met--is that, for good or ill, the diffusion of aid programs--
you know, we get a Millennium Challenge, and we get an AIDS 
Africa Initiative, and we get other things being coordinated by 
other agencies. And, as a result, we don't really have quite 
the lead development agency we should have in my opinion, where 
the focus is and we bring to bear the deployment of resources 
in a very structured and coordinated way.
    As the AID Administrator, of course, you are a loyal member 
of the administration, but can you share with us any of your 
reflections on how we might better structure ourselves to not 
only improve the lead role of AID but, more importantly, to 
make sure that the deployment of resources is an effective one?
    Dr. Shah. Well, I appreciate that point as well, sir. I 
think that we have tried to do a number of things, such as our 
Partnership for Growth Effort, which helps to bring agencies 
together and ensures both coordination and USAID leadership to 
ensure that we are aligned in places where we are working 
together with, for example, MCC and Ghana and Tanzania and El 
Salvador, and that increasingly we are demanding policy reforms 
be made in the countries where we work so that we know that the 
gains we have will sustain and be more significant. And we will 
get more value for how we invest our dollars.
    I will just reflect on the fact that coming to the U.S. 
Government from a different type of institution, I am struck by 
the amount of energy that that coordination requires. And I am 
sure there are things that could be done in the future that 
would help make it a bit easier to do that. This is a very 
large and diffuse government, but it is led and populated in 
this administration, I think even in prior administrations, in 
this space by people who do really want to see those results.
    We all need to do a better job of communicating them, but 
we are committed to that outcome and would be happy to work 
with you on some ideas to make that coordination easy.
    Mr. Connolly. Thank you. Thank you very much.
    Madam Chairman, my time is up.
    Chairman Ros-Lehtinen. Thank you so much.
    Mr. Royce?
    Mr. Royce. Thank you, Madam Chair.
    Let me, if I could, Ambassador Shah, go to the issue of the 
agreement that the United States had with North Korea on 
February 29th. The administration announced its plan to provide 
240,000 tons in food aid. And it took North Korea about 2 weeks 
before it broke that Leap Day agreement. So I understand the 
food aid issue now might be in abeyance, but I wanted to ask 
you about that in light of the ballistic missile launch that 
they are preparing and also reference the sort of growing 
skepticism that we have here in the House about the concept of 
food aid to North Korea given our experiences in the past, the 
hearings that we have had in which we have had testimony about 
the diversion of that food aid.
    And I had an amendment prohibiting food aid to North Korea 
that passed the House last year. There were some changes made 
in the Senate so that the final provision said that you could 
not offer food aid if it were diverted for unauthorized use. 
And I think our problem is that that is sort of the North 
Koreans' specialty in this, is diverting it for unauthorized 
use.
    So I would ask, is this something the administration is 
still considering with respect to food aid? And how would you 
ensure that the law would not be overstepped?
    Dr. Shah. Thank you.
    You know, it is something we are considering. We have been 
in, as has been made public, a series of negotiations to ensure 
that credible controls are in place and that in any potential 
effort, the focus is on saving kids' lives, mitigating risks 
related to diversion.
    We saw in the past that when diversion took place, the 
program was shut down as a voluntary decision made by the 
United States and our agency. Going forward, the program we had 
been constructing was designed to get Plumpy Nut and other 
types of very specialized high nutrition feeding products for 
very vulnerable kids. Those are not the types of things that 
are as amenable to diversion. That is why we were not including 
things like rice or other large-scale grain commodities, which 
are more vulnerable.
    Nevertheless, we are in an active discussion and would only 
go forward if certain conditions are in place with respect to 
our ability to ensure and protect against some of the risks you 
have identified.
    Mr. Royce. If I were to go back to 2008 and some of the 
provisions that that administration attempted to put into play, 
I remember the North Korean regime balked at the idea of having 
Korean-speaking inspectors on the ground.
    The French NGOs have testified here in the past that one of 
the reasons they balk at that is because there is a real 
advantage to them being able to collect and sell whatever the 
product is on the food exchanges in Pyongyang for hard 
currency. And it is the ability to get their hands on that hard 
currency that gives us pause.
    I opened this session with my observations just about the 
quotes from a senior defector saying that it was pretty much 
the equivalent if we give them food aid because of their 
ability to convert it with giving them hard currency for their 
military program. And this seems to drive the attention of the 
North Koreans because this is where in the past we have heard 
testimony that they just lack the currency. In one case, we had 
a defector tell us they were trying to buy a piece of equipment 
they needed for their missile and on the black market.
    And this gyroscope, this Japanese-made gyroscope, was hard 
to come by, and it was expensive. But they had to shut down the 
whole missile line until they could get the hard currency. They 
don't really have much that North Korea manufactures other than 
things done in a clandestine way, you know, meth, different 
drugs that they sell illegally on the world market, missile 
parts. But this was part of the modus operandi to get their 
hands on hard currency.
    So, again, I would just stress that, that this has been 
their past practice. They were very adept at it. And, having 
broken this last agreement in the span of 14 days, I think we 
are beginning to see here that this new regime in North Korea 
is not different. The grandson is not too different from the 
father and not too different from the grandfather in terms of 
the way we are played.
    Chairman Ros-Lehtinen. Thank you, Mr. Royce.
    Mr. Sherman is recognized.
    Mr. Sherman. Thank you.
    Administrator Shah, we are almost at the end. Take a 
breath. Almost everything of a broad nature that could be said 
has already been said. So I am going to talk about a couple of 
very narrow topics, confident that my colleagues have not 
brought them up, namely the regions of Javakheti and Sindh. 
Before I do, let me express the obvious. And that is that the 
needs in the world for U.S. development will always exceed the 
resources available.
    And so the constraint is not a lack of good donor 
opportunities. The constraint is a lack of public support for 
foreign aid, which is the most controversial part of our 
budget.
    There is very substantial support in America for aid to 
Armenia. And I hope that your budgetary request will be greater 
in the future and will at least start with the congressional 
appropriations of the prior year and work your way up from 
there, as you do in most of the rest of your budget.
    Now, as to the Javakheti region of the Republic of Georgia, 
your request for Georgia's total is $68.7 million. The Georgian 
Ambassador publicly stated that--because this is something that 
we have had to review with the Georgian Ambassador. And that 
is, should the United States target its aid at this particular 
region in southern Georgia? And would the Georgians take 
offense that you are going with one region, instead of another?
    So I am glad to bring your attention that the Embassy of 
Georgia stated that in support of our Government's material 
commitment to the economic development for our citizens in the 
Samtske-Javakheti--I have no idea if I pronounced that 
correctly--region and throughout our republic looks forward to 
working with our friends in the U.S. Congress and the 
administration and with all American civil society 
stakeholders, including, of course, the Armenian American 
community,--and here is the key phrase--in encouraging the 
targeting of U.S. assistance to meet Samtske-Javakheti's urgent 
need for job creation, infrastructure, technical, and 
humanitarian needs.
    Also in the case of Georgia, you are dealing with a 
republic with many regions with different ethnicities. Some 
have a claim that Russia has exploited these differences in 
Abkhazia and Ossetia.
    And here you have an opportunity to help this predominantly 
Armenian area of Georgia, not in defiance of Tblisi but, 
rather, the economic aid that will help make sure that this 
region is a source of stability and prosperity for the overall 
Republic of Georgia. And I hope that you will have a robust 
program in the Javakheti region.
    Second is the area of Sindh. You have requested $2.4 
billion. Sindh is, as you know, in southern Pakistan, an area 
influenced by a moderate form of Islam and Sufism. This is an 
area that was particularly hit by the floods. And I would hope 
that, rather than just rely on Islamabad to set our priorities, 
we would make the development and recovery of Sindh an 
important priority.
    I wonder if you could respond to that or whether you would 
prefer to just respond for the record?
    Dr. Shah. I may briefly address those. We appreciate your 
points. On Georgia and specifically the Samtske-Javakheti 
region that you were referring to, we have been working with 
specific programs that work on agricultural modernization, 
social development, maternal health, and certain health and 
education infrastructure efforts, as well as support for civil 
society groups.
    We have increasingly tried to do that work in consultation 
with Armenian American communities and with an eye toward 
launching specific public-private partnerships with those 
communities. So if there are partner entities that you are 
aware that have interest in that region, we would welcome being 
put in touch with them and would seek an opportunity to have 
that dialogue.
    Mr. Sherman. I will make sure to put them in touch with 
you. Thank you.
    Dr. Shah. And, with respect to Sindh, I would just note 
overall the budget for Pakistan for USAID programmatic efforts 
is $900-and-some million. So that $2.6 billion, I'm not exactly 
sure what that refers to.
    And we have tried to focus the programs there. That is 
obviously a very complex working environment. We have, 
nevertheless, tried to focus on delivering concrete results. 
For example, in energy, we put 900 megawatts of energy on the 
grid as a result of our investments. In education, we are able 
to reach a number of kids and get them into educational 
opportunities that are more secular and broader.
    In the context of that particular region, our response to 
the floods and our efforts to distribute wheat seed in response 
to the floods really did help save the winter wheat harvest and 
improve the overall balance of payment situation for a country 
where that is critical to their own stability and, therefore, 
critical to our national security. So I appreciate your raising 
that.
    We constantly seek consultation in that program but have 
tried to be results-oriented, even in a very difficult 
environment.
    Mr. Sherman. I will try to provide you with specific 
information there. Thank you very much.
    Dr. Shah. Thank you.
    Mr. Johnson [presiding]. Thank you.
    The Chair recognizes Mr. Fortenberry.
    Mr. Fortenberry. Thank you, Mr. Chair.
    Administrator Shah, it is a pleasure to see you again. 
First, at the outset, let me say I do really deeply appreciate 
your professionalism and your dedication, your innovation, as 
well as your heartfelt concern for the world's most vulnerable, 
which has truly marked your tenure at USAID.
    I also want to thank you for taking time to address the 
concerns about the potential stewardship of U.S. foreign 
assistance dollars, particularly given the fiscal situation 
that continues to alarm many Americans as well as--and it 
weighs heavily upon us here.
    I do frequently hear from constituents who express serious 
concerns about the disposition of their taxpayer dollars, 
particularly those going to foreign aid, even--and I emphasize 
this--even as they take rightful pride in knowing that the 
United States is the world's leading provider of meaningful 
humanitarian outreach.
    I am also glad that you mentioned our colleague Don Payne. 
His life and dedicated efforts on behalf of the poor we 
recently honored. Mr. Payne and I were co-chairs of the Malaria 
Caucus. And we were--and we will continue to do so, but we were 
attempting to make further bipartisan progress on this 
important fight against malaria, which was a preventable 
disease but harmed so many.
    I appreciate you raising this testimony, in your written 
testimony. I appreciate you raising the issue. But I would like 
you to address something that is of concern to me. Address the 
issue of effectively balancing our resources between the 
President's Malaria Initiative and all other multilateral 
malaria prevention efforts.
    It seems to me that an outstanding review of the 
President's Malaria Initiative would support a relatively 
stronger weighting of this initiative relative to other 
multilateral activities that are less transparent or they are 
difficult to basically monitor for accountability and results.
    Let me give you an example. In your budget, there are 
substantial increases for population control initiatives and 
the Global Health Initiative, as well as substantial increases 
in the Global Fund, which the United States does not fully 
control. This suggests an ideological priority there that is 
inconsistent with our efforts to monitor costs while meeting 
basic humanitarian goals that we all agree upon. So I would 
like you to address that concern, please.
    Dr. Shah. Thank you. Thank you, Congressman. Thank you for 
your specific leadership in this area and for helping us find 
opportunities, such as with the University of Nebraska, to 
essentially bring more excellence to areas of work, like water 
and stewardship in that space.
    I also appreciate your mention of the Malaria Caucus, which 
has done very important work to establish support for this 
program. As you noted, it has been externally evaluated and 
shown to be incredibly effective.
    Those evaluations also discussed a more recent evaluation 
by Boston University, which looked at the processes of the PMI, 
also found that it was an effective venue for bringing the 
interagency together and coordinating U.S. Government efforts. 
And it was effective at supporting partners like the Global 
Fund for AIDS to be in malaria and the World Bank and helping 
them do their work more efficiently. So when commodities get 
stocked out, we were able to step in and solve supply chain 
issues a number of times in order to keep malaria control 
programs focused on results and effectiveness.
    It is really in that context of building a stronger 
partnership between PMI and the multilaterals explicitly for 
the purpose of driving more of other people's resources to what 
we think of as prioritized areas where we can get results, like 
malaria, that we have proposed the budget the way we have 
proposed it.
    And, as you know, the Global Fund had to cancel round 11 of 
its funding. And that was intended to be the malaria round. In 
fact, countries had been encouraged to develop malaria plans. 
PMI had worked with countries to do that in a way that was 
coordinated with our own efforts. And we would have seen for 
every dollar we spent $3 of other countries' resources going 
toward support for those plans.
    The same is true at the World Bank, where we worked to 
create World Bank funding plans in countries where we work so 
we can get more partnership.
    If it were up to me, you know, I would love to see larger 
budgets across the board for things like malaria that we know 
save kids' lives. We made a number of very difficult trade-offs 
in order to present a budget that we think meets our fiscal 
constraints and prioritizes all of our potential efforts to get 
others on board with our task of ending child deaths from 
malaria, which is an achievable task.
    Mr. Fortenberry. Thank you.
    Let me insert this, though. But since we have prioritized 
raising funds for the Global Health Initiative as well as the 
Global Fund itself, that suggests that we are prioritizing 
population control initiatives, even though some of the 
increase in funding may be leverage for PMI and other malaria 
control outcomes. Is that true?
    Dr. Shah. The only thing I would take issue with is the 
Global Health Initiative overall actually experiences a small, 
very modest but small, aggregate decrease in funding. And so it 
is not that, but there is a significant increase in order to 
meet our 4-year pledge that was made to the Global Fund. And we 
think it is a critical time to make that commitment and a 
critical time to keep the global consensus that has created an 
instrument that has brought in billions of other people's 
dollars to support global health.
    Global health is an area that, without funding from other 
countries, the U.S. will end up taking a bigger and bigger 
share of global funding. And that won't be a pathway to 
sustainability or success. So we are very focused on crowding 
in other donors' efforts.
    Mr. Fortenberry. My time is done, but I may need to write 
you further on what type of balance there is in terms of 
increasing population control measures versus other widely 
agreed upon humanitarian controls. We need to discuss that 
further.
    Dr. Shah. Absolutely. Thank you.
    Mr. Johnson. I thank the gentleman for yielding back.
    Administrator Shah, with a $10 trillion economy, we need to 
start treating China like a developed country. That means 
serious examination of the aid that we give to China. For 
instance, there is no reason in my opinion that we should be 
giving China money through USAID to become energy-efficient and 
compete more aggressively and effectively against U.S. 
businesses to strip jobs from American workers here at home.
    The USAID budget states that it plans to expand efforts in 
innovation, science and technology, and evaluation with regards 
to climate change, which the significant increase in funding 
for the Global Climate Change Initiative indicates. Previous 
funds have been allocated to China to help develop its clean 
energy sector, carbon evaluations, technology innovation, and 
educational awareness.
    So specifically within USAID's DA budget, how much will be 
directed toward programs in China, especially in terms of clean 
energy and economic growth education programs?
    Dr. Shah. Thank you, sir, for the question.
    The specific answer to your question is with respect to the 
Fiscal Year 2013 budget request, zero. The budget request is 
$6.5 million for China. And of that, the great majority is 
support for communities in Tibet and support for those Tibetan 
civil society groups and organizations.
    There is a small amount of support to continue a 
partnership between the U.S., its Centers for Disease Control, 
and their Chinese counterpart that originally grew out of the 
SARS epidemic and is now focused on a broader set of 
activities, including HIV/AIDS, and ensuring that communicable 
disease threats doesn't spill out of China. But that is a small 
technical assistance effort. And the rest is focused on 
communities in Tibet.
    Mr. Johnson. So you are saying that none of the USAID's DA 
budget in the 2013 budget will go toward green energy, clean 
energy initiatives, and economic growth education programs?
    Dr. Shah. Correct. That is right.
    Mr. Johnson. I am glad that we got that cut off because 
that was one that I was very concerned about.
    I see no further members here to ask questions. With that, 
Administrator Shah, thank you very much for being before us 
today, for answering our questions. With that, this committee 
hearing will be adjourned.
    [Whereupon, at 12:02 p.m., the committee was adjourned.]
                                     

                                     

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