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

                  ASSESSING U.S. FOREIGN POLICY PRIORITIES AND
                      NEEDS AMIDST ECONOMIC CHALLENGES IN
                                   SOUTH ASIA

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

                                    HEARING

                                   BEFORE THE

                                SUBCOMMITTEE ON
                         THE MIDDLE EAST AND SOUTH ASIA

                                     OF THE

                          COMMITTEE ON FOREIGN AFFAIRS
                            HOUSE OF REPRESENTATIVES

                          ONE HUNDRED TWELFTH CONGRESS

                                 SECOND SESSION

                                   __________

                                  MAY 16, 2012

                                   __________

                               Serial No. 112-148

                                   __________

            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         BRAD SHERMAN, California
    EDWARD R. ROYCE, California          ELIOT L. ENGEL, New York
    STEVE CHABOT, Ohio                   GREGORY W. MEEKS, New York
    RON PAUL, Texas                      RUSS CARNAHAN, Missouri
    MIKE PENCE, Indiana                  ALBIO SIRES, New Jersey
    JOE WILSON, South Carolina           GERALD E. CONNOLLY, Virginia
    CONNIE MACK, Florida                 THEODORE E. DEUTCH, Florida
    JEFF FORTENBERRY, Nebraska           DENNIS CARDOZA, California
    MICHAEL T. McCAUL, Texas             BEN CHANDLER, Kentucky
    TED POE, Texas                       BRIAN HIGGINS, New York
    GUS M. BILIRAKIS, Florida            ALLYSON SCHWARTZ, Pennsylvania
    JEAN SCHMIDT, Ohio                   CHRISTOPHER S. MURPHY, Connecticut
    BILL JOHNSON, Ohio                   FREDERICA WILSON, Florida
    DAVID RIVERA, Florida                KAREN BASS, California
    MIKE KELLY, Pennsylvania             WILLIAM KEATING, Massachusetts
    TIM GRIFFIN, Arkansas                DAVID CICILLINE, Rhode Island
    TOM MARINO, Pennsylvania
    JEFF DUNCAN, South Carolina
    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
                                     ------

                 Subcommittee on the Middle East and South Asia

                          STEVE CHABOT, Ohio, Chairman
    MIKE PENCE, Indiana                  GARY L. ACKERMAN, New York
    JOE WILSON, South Carolina           GERALD E. CONNOLLY, Virginia
    JEFF FORTENBERRY, Nebraska           THEODORE E. DEUTCH, Florida
    ANN MARIE BUERKLE, New York          DENNIS CARDOZA, California
    RENEE ELLMERS, North Carolina        BEN CHANDLER, Kentucky
    DANA ROHRABACHER, California         BRIAN HIGGINS, New York
    DONALD A. MANZULLO, Illinois         ALLYSON SCHWARTZ, Pennsylvania
    CONNIE MACK, Florida                 CHRISTOPHER S. MURPHY, Connecticut
    MICHAEL T. McCAUL, Texas             WILLIAM KEATING, Massachusetts
    GUS M. BILIRAKIS, Florida
    TOM MARINO, Pennsylvania
    ROBERT TURNER, New York

                                C O N T E N T S

                                  ----------
                                                                       Page

                                   WITNESSES

    The Honorable Robert O. Blake, Assistant Secretary for South and
      Central Asian Affairs, U.S. Department of State................     6
    The Honorable Nisha Desai Biswal, Assistant Administrator for
      Asia, U.S. Agency for International Development................    15
    Mr. Daniel Feldman, Deputy Special Representative for Afghanistan
      and Pakistan, U.S. Department of State.........................    22
    Alexander Thier, Ph.D., Assistant to the Administrator and
      Director, Office of Afghanistan and Pakistan Affairs, U.S.
      Agency for International Development...........................    33

              LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING

    The Honorable Robert O. Blake: Prepared statement................     9
    The Honorable Nisha Desai Biswal: Prepared statement.............    17
    Mr. Daniel Feldman: Prepared statement...........................    25
    Alexander Thier, Ph.D.: Prepared statement.......................    35

                                    APPENDIX

    Hearing notice...................................................    56
    Hearing minutes..................................................    57
    The Honorable Gerald E. Connolly, a Representative in Congress
      from the Commonwealth of Virginia: Prepared statement..........    58

      ASSESSING U.S. FOREIGN POLICY PRIORITIES AND NEEDS AMIDST ECONOMIC
                            CHALLENGES IN SOUTH ASIA

                                  ----------

                            WEDNESDAY, MAY 16, 2012

                  House of Representatives,
                    Subcommittee on the Middle East
                                            and South Asia,
                                  Committee on Foreign Affairs,
                                                        Washington, DC.
        The committee met, pursuant to notice, at 2 o'clock p.m.,
    in room 2172 Rayburn House Office Building, Hon. Steve Chabot
    (chairman of the subcommittee) presiding.
        Mr. Chabot. Good afternoon, the subcommittee will come to
    order. I want to welcome all of my colleagues to this hearing
    of the subcommittee on the Middle East and South Asia. The
    purpose of this hearing is to follow up on the recent full
    committee hearing with the Secretary of State and the USAID
    Administrator.
        Last week we heard from administration officials on the
    Middle East component of the Fiscal Year 2013 budget, and this
    week we will focus on the South Asia component which includes,
    notably, Afghanistan. Just over a year ago this subcommittee
    heard testimony from the administration on our programming in
    Afghanistan, and although much has changed on the ground since
    then, our policy has not. Although the details continue to
    change, the fundamental underlying policy seems to remain the
    same and it is driven by one key objective, transition by the
    end of 2014 by any means necessary.
        In the President's recent speech at Bagram airbase,
    President Obama tried to lay out what he believes is the path
    forward. Reading that speech, however, it seems to me that it
    was more of a victory lap than a statement of strategy or
    objectives. Indeed, there is an inherent tension in President
    Obama's remarks. On the one hand, he makes very clear that our
    objective is to deny al-Qaeda a safe haven, nothing more. On
    the other hand, he acknowledges how tenuous the gains we have
    made are and that if, as he says, we do not offer ``Afghanistan
    the opportunity to stablize, our gains could be lost and al-
    Qaeda could establish itself once more.''
        While the much-celebrated recently signed Strategic
    Partnership Agreement is certainly a move in the right
    direction, it is more of a broad commitment toward a similar
    future than a road map of how to get there. Clearly, in order
    to sustain these goals we must, as President Obama notes, work
    to stabilize Afghanistan. But what does a stable Afghanistan
    entail? And as important, how do we and the Afghans plan to get
    there? We now have this agreement but we have no specifics. We
    have the transition plan on the ground, but handing the keys
    over is hardly in and of itself a measure of success. How do
    our aid programs fit into an overall political strategy? We
    have a reconciliation process, but the process is stalled and
    by all reasonable assessments is going nowhere. As former
    Secretary of State Henry Kissinger recently noted, ``If you
    negotiate while your forces are withdrawing, you are not in a
    great negotiating position.''
        I hope our witnesses will explain today what kind of
    Afghanistan we want to see post-2014, and how the policies that
    are being implemented get us there. I will confess that my fear
    is that the administration has no real comprehensive plan, at
    least not on the civilian side. Before we start patting
    ourselves on the back too much over the Strategic Partnership
    Agreement, we should remember that shared intent is not shared
    policy. The devil, as they say, is in the details.
        Just to the south in Pakistan, continued sanctuary offered
    to insurgents has been one of our largest challenges on the
    ground, and regrettably, I fear it will not disappear anytime
    soon. To that point, the Department of Defense's most recent
    report to Congress notes flatly that, ``The Taliban insurgency
    and its al-Qaeda affiliates still operate with impunity from
    sanctuaries in Pakistan'' which ``remain the most critical
    threat'' to the U.S.-led effort in Afghanistan. At its core,
    Pakistani sanctuary is really a symptom of a larger problem.
    Our strategic objectives in Afghanistan are fundamentally
    incompatible with Pakistan's. While we seek a sovereign and
    independent Afghanistan, Islamabad vies for a neighbor that can
    be easily influenced and controlled. And as serious of a threat
    as Pakistani-based insurgent groups pose now, they have the
    potential to spiral post-2014 and place Afghanistan once more
    in the center of a dangerous regional conflict. I wish this
    were the only challenge in our bilateral relationship with
    Pakistan, but the 14-point guidelines approved by Pakistan's
    parliamentary review of the country's relationship with the
    U.S. ensures that more bumps are surely ahead, particularly as
    we approach transition in Afghanistan. I hope the
    administration is considering how our policy should adjust to
    accommodate a shift in our interests vis-a-vis Pakistan post-
    2014.
        To the southeast of Pakistan, things happily look
    significantly better. The U.S.-India relationship has come a
    long way in the past 20 years. The U.S. and India are united
    not only by shared interests, but by shared values such as a
    belief in democracy. And as one of India's leading trading and
    investment partners, the United States strongly supports New
    Delhi's economic reforms and strongly encourages the Indian
    Government to continue along this path. It is no secret,
    however, that to date the U.S.-India Civil Nuclear Agreement
    hasn't met U.S. commercial expectations due to the nuclear
    liability law passed by the Indian Parliament which essentially
    shuts out U.S. companies. I hope our witnesses here today will
    discuss what actions are being taken to resolve this.
        And finally, I hope our witnesses will address the status
    of post-conflict reconciliation in Sri Lanka. I had the
    opportunity to travel to Sri Lanka recently, and I am
    particularly interested in how Colombo is building on the
    recommendations of the Lessons Learnt and Reconciliation
    Commission. And I might note that the foreign minister, or the
    Minister of External Affairs, was here today, and a number of
    Members of Congress, including myself, met with him and the
    delegation that they brought. We had a very good meeting, I
    thought.
        Unlike in some places, U.S. national security interests in
    South Asia are both dire and immediates. As we approach what
    will be a critical time of transition in the region, I hope the
    administration crafts its policy with a careful eye toward the
    future in order to sustain the gains that have been so hard-
    won.
        And at this time I would like to yield 5 minutes to the
    distinguished gentleman from New York, and my colleague, the
    ranking member, Mr. Ackerman.
        Mr. Ackerman. Thank you very much, Mr. Chairman. Just as we
    examined priorities in the Middle East last week, this week we
    are covering the other half of the subcommittee's jurisdiction,
    South Asia. Last week I complimented the Obama administration
    for proposing, wisely in my view, a significant increase in
    American foreign assistance to the Middle East. This week there
    will be no such compliments to the administration, which has
    requested more money for both Afghanistan and Pakistan, which
    are far and away the biggest aid recipients that we have in the
    region.
        Pakistan is like a black hole for American aid. Our tax
    dollars go in, our diplomats go in sometimes, our AID
    professionals go in sometimes, our hopes go in, our prayers go
    in, nothing good ever comes out. Since Fiscal Year 2002, we
    have sunk $24 billion in foreign assistance to Pakistan. It is
    hard to fathom how so much money can buy so little. Waste at
    this scale requires not only an oblivious body politic and
    Congress, but a large cadre of government professionals and
    horde of contractors. Pakistan's Government, civil-military
    relations and economy are not an iota less dysfunctional than
    they were 10 years ago, and in some respects are probably
    worse.
        Pakistan continues to pursue its national interests at our
    expense and that of our actual allies. Pakistan continues to
    shelter, directly support and sponsor terrorists. Officially
    acknowledging this indisputable fact might be grossly
    impolitic, but that does not make it less true. American
    standing in the Pakistani public opinion is terrible and it is
    getting worse. When polled last year, three out of every four
    Pakistanis regard the United States unfavorably and more than
    half hold it to be a bad thing that Osama bin Laden sleeps with
    the fish. Does anyone think another 10 years and another $24
    billion will turn things around?
        So apart from the need to secure the minimum cooperation
    necessary for us to continue to kill as many terrorists as we
    can identify and to keep the supplies flowing to our American
    troops in Afghanistan, it is hard to imagine a less productive,
    more dysfunctional bilateral relationship anywhere in the
    world. Budget cutters, here is a fat and truly deserving
    target.
        And there is another right next door in Afghanistan. If
    money and effort and hope simply disappear into the black hole
    of Pakistan, then Afghanistan is the equivalent of a
    theoretical wormhole. Money goes into Pakistan and by a miracle
    of metaphysics or perhaps just electronic fund transfers, it
    emerges in bank accounts in the Gulf. A former advisor to
    General McChrystal once told me, in Dubai there is a running
    joke that at the banks anyone depositing less than $1 million
    in cash has to wait in line. It is a good one, but the joke is
    on us. We are the chumps who have poured more than $83 billion
    in foreign assistance down the world's biggest rathole. And
    between the fall of the Taliban and today, other than killing
    Osama bin Laden and nearly destroying al-Qaeda, we have
    scarcely a single, significant, durable nation-building
    achievement to claim despite the extraordinary efforts that we
    have made in Afghanistan.
        What I really hope is behind the current plan for
    transition to Afghanistan's security responsibility in 2014, is
    a cold, disspassionate recognition that a country as ruined and
    dysfunctional as Afghanistan and that a government so
    thoroughly corrupt and ineffectual as Hamid Karzai's cannot be
    saved by our efforts. Instead of providing the requested $9.2
    billion in military spending and foreign aid in Fiscal Year
    2013, we need to put this program on a glide path toward
    something much smaller and more sustainable. How small should
    it be? I would suggest this rule of thumb. Our support should
    never total more than the Government of Afghanistan spends on
    itself. Last year that number was $3.3 billion. That would be a
    good start.
        American interests in South Asia are larger than Pakistan
    and Afghanistan, and I apologize for not giving in this a lot
    of time the many other countries in the region especially India
    that merit attention. But unless we rebalance our policy and
    spending priorities in the region away from the expensive,
    failed sinkholes and toward building stronger partnership with
    the governments and nations that are seizing control of their
    own futures, we are going to lose much more than just money.
        Mr. Chabot. Thank you very much. At this time, the members
    who would like to have 1 minute to make an opening statement
    can do so. And we will yield 1 minute to the gentleman from
    California, Mr. Rohrabacher, who is the chairman of the Foreign
    Affairs Committee on Oversight and Investigations.
        Mr. Rohrabacher. Thank you very much, Mr. Chairman. Let me
    just note that I was a strong supporter of efforts that back
    after 9/11 that have failed. And was I wrong for supporting
    them? I don't know, maybe I was, maybe I wasn't. Those policies
    have failed and we should recognize that after we foisted a
    government upon the people of Afghanistan after 9/11 that is
    overly centralized, totally inconsistent with their traditions
    and has become a captive of corrupt leaders like President
    Karzai, who has his own marching orders being given not by the
    Afghan people but by the Pakistani Government. In Pakistan
    billions of aid has been given to the Paks since then, billions
    of aid, while they at the same time have terrorized their
    neighbors and repressed their own people. Their own people like
    at the Balochs, who are now fighting and struggling for their
    freedom there. We should cut Pakistan off of every cent because
    it is being used for evil purposes and it has even been used to
    kill Americans. It is time we face reality, admit our mistakes
    and cut our losses and quit supporting failed policies and
    corrupt dictators.
        Mr. Chabot. Thank you. The gentleman's time has expired.
    The gentleman from New York, Mr. Turner, is recognized for 1
    minute if he would like to make a statement.
        Mr. Turner. Thank you, Mr. Chairman. Thank you, Ranking
    Member. I think I will condense my remarks to Pakistan and
    Afghanistan. Pakistan is difficult country with a long history
    of instability, military coups and the harboring of jihadists
    and other violent enemies of the West and basic democratic
    values. In light of recent tensions between Pakistan and our
    Government, I think we should carefully reevaluate the nature
    of what has been a fundamental foreign policy relationship and
    its benefit to us. The President has requested over $2.2
    billion in assistance, a 100-million increase over last year.
    I, for one, am concerned about how this money is being spent by
    this government that has been openly hostile to our interests
    and our values.
        Finally, everyone in this committee is familiar with the
    situation in Afghanistan. With the President having set a 2004
    withdrawal date, there is growing concern among many in both
    Washington and across the country that the fragile institutions
    which we attempted to build in that country will quickly
    disintegrate. The President has asked for $928 million in total
    aid for Afghanistan. I would like to know what metric we will
    have to judge the success of our policies and our
    contributions. Thank you. I yield back.
        Mr. Chabot. Thank you. The gentleman's time has expired.
        I would like to introduce the panel here this afternoon. I
    will begin with Ambassador Robert Blake who is the Assistant
    Secretary for South and Central Affairs at the U.S. Department
    of State. As Assistant Secretary, he oversees U.S. foreign
    policy with India, Bangladesh, Sri Lanka, Nepal, the Maldives,
    Bhutan, Kazakhstan, Uzbekistan, Kyrgyzstan, Turkmenistan and
    Tajikistan. He previously served as Ambassador to Sri Lanka and
    the Maldives from 2006 to 2009, and as deputy chief of mission
    at the U.S. mission in New Delhi, India, from 2003 to 2006.
    Since he entered the Foreign Service in 1985, he has served at
    the American Embassies in Tunisia, Algeria, Nigeria, and Egypt.
        And if I might, I would also like to take a moment to thank
    you, Ambassador Blake, for the assistance you and your team
    have provided the subcommittee over time. Since becoming
    chairman I have tried to visit as many of the countries in the
    South Asian region as I could and meet with the leaders there,
    as well as in the Middle East, and you and your staff and our
    diplomats in the region have helped to make those visits very
    productive for myself and I know other members as well. We have
    some great folks on the South Asia desk and on the ground over
    there and we appreciate all your efforts, and I would just like
    to publicly thank you for that.
        Next, I would like to recognize Nisha Desai Biswal who is
    USAID's Assistant Administrator for Asia. Prior to her
    appointment she served as the majority clerk for the State
    Department and Foreign Operations Subcommittee on the House
    Committee on Appropriations. She also served on the
    professional staff of the House International Relations
    Committee where she was responsible for South and Central Asia
    policy as well as the oversight of the State Department and
    USAID. Ms. Biswal has worked at USAID for 4 years and has
    served as special assistant to the administrator and has worked
    in the Office of U.S. Foreign Disaster Assistance and the
    Office of Transition Initiatives. We welcome you here this
    afternoon.
        And next I would like to introduce Daniel F. Feldman who is
    one of two deputies to the Special Representative for
    Afghanistan and Pakistan. He previously served as a partner in
    the International Corporate Social Responsibility Group at the
    law firm of Foley Hoag LLP. He has also served as director of
    Multilateral and Humanitarian Affairs at the National Security
    Council in the Clinton administration, and is counsel and
    communications advisor to the U.S. Senate Homeland Security and
    Governmental Affairs Committee. He acted as senior foreign
    policy and national security advisor to the Kerry Presidential
    campaign in 2004. And we welcome you here this afternoon, Mr.
    Feldman.
        And last but not least, we have Alexander Thier who is the
    Assistant to the Administrator for the Office of Afghanistan
    and Pakistan Affairs at the U.S. Agency for International
    Development USAID. Prior to joining USAID, Thier served as
    director for Afghanistan and Pakistan at the U.S. Institute of
    Peace, and chair of the Institute's Afghanistan and Pakistan
    working groups. Thier was also legal advisor to Afghanistan's
    constitutional and judicial reform commissions in Kabul, and as
    U.N. and NGO official in Afghanistan and Pakistan during the
    countries' civil war.
        And again, we have a very distinguished panel here this
    afternoon. We want to thank you for being willing to testify.
    And as you know we have the 5-minute rule, and there is a
    lighting system. The yellow light will warn you that you have 1
    minute to hopefully wrap up, and when the red light comes on we
    would appreciate it if you would cease at that point or very
    closely within that. And I do have a gavel but I am sometimes
    relatively free with it. Not throwing it at people or anything,
    but free at it in maybe giving you a few extra seconds. I am
    progressive with the gavel.
        So in any event, without further ado, Ambassador Blake, you
    are recognized for 5 minutes.

    STATEMENT OF THE HONORABLE ROBERT O. BLAKE, ASSISTANT SECRETARY
     FOR SOUTH AND CENTRAL ASIAN AFFAIRS, U.S. DEPARTMENT OF STATE

        Mr. Blake. Thank you, Mr. Chairman. And first let me thank
    you for your very kind words about our great team in the field
    and our great team in Washington. We really appreciate that.
        Mr. Chairman and members of the committee, it is a pleasure
    to be back here to discuss with you the priorities of my
    bureau, the South and Central Affairs Bureau. I have longer
    written testimony that I will submit for the record, and let me
    just briefly summarize what I have to say.
        First, let me start by talking about the SCA Bureau's
    highest priority which is advancing regional economic
    integration both within and between South and Central Asia.
    Both regions remain among the least integrated in the world,
    and the true economic development potential of the region
    particularly of Afghanistan and Pakistan will not be realized
    without greater connectivity to the fast growing economies of
    South Asia.
        Last summer in Chennai, Secretary Clinton outlined her New
    Silk Road vision that foresees a network of economic and
    transit connections throughout South and Central Asia, with
    Afghanistan at its heart. We are starting to see regional
    ownership and some momentum in this effort, and our budget
    request includes resources to facilitate this. We are also
    seeing other countries such as Bangladesh recognize the
    importance of tightening the linkage between South and Central
    Asia.
        The United States is extremely encouraged by the positive
    recent steps taken by the Governments of India and Pakistan to
    normalize trade and commercial ties. This process of
    normalization in both directions could lead to at least a $10-
    billion increase in trade, not to mention expanded economic
    opportunity and stability for the wider region.
        In India we continue to advance our strong partnership.
    Secretary Clinton just returned from a very positive and
    productive visit to New Delhi and Kolkata. We anticipate that
    bilateral goods and services trade will surge beyond $100
    billion this year, which represents a quadrupling of trade
    since 2000. Meanwhile our security relationship has hit an all-
    time high with an approximately $9 billion in U.S. defense
    sales to India, and a continuing robust bilateral military
    exercise program.
        Let me also note continuing progress on civil nuclear
    cooperation. As you said, Mr. Chairman, there is more work to
    be done on both sides to create the level playing field
    necessary for U.S. companies to fully participate in India's
    civil nuclear market. In the interim we continue to have
    constructive dialogue with the Indian Government on these
    issues and we are pleased that U.S. companies are finding ways
    to move forward now with commercial negotiations. Finally,
    India shares our goal of preventing Iran from acquiring a
    nuclear weapon, and to that end has taken steps to reduce its
    imports of crude oil from Iran.
        In Bangladesh, Secretary Clinton announced on her trip the
    establishment of a partnership dialogue to maximize our
    bilateral cooperation on a wide range of issues that are
    important to us. We continue to voice our concerns to the
    government on issues like labor rights, Grameen Bank, and the
    importance of preserving and widening the space for civil
    society. We have also urged Bangladesh's leading political
    parties to work together for the good of the country, to agree
    on a formula for the next national election scheduled for late
    2013 or 2014.
        In the past year, Nepal has made remarkable strides toward
    concluding its peace process and resolving post-conflict
    issues. Today, all but 3,000 of the approximately 19,000 former
    combatants have departed the cantonments and have begun
    integrating into civilian life, and all of the former
    combatants' weapons have been turned over to the Nepalese Army.
    With this progress in mind, the Department of State is
    currently undertaking a review of the Maoists' status on two
    terrorist lists, and the Millennium Challenge Corporation has
    begun discussions with the government on a threshhold program.
        In Sri Lanka the government has resettled over 95 percent
    of those displaced during the final phase of its 26-year
    conflict, released many former LTTE combatants and undertaken
    important infrastructure and other economic development
    projects, but there is much that remains to be done. The United
    States led successful efforts to win support for a U.N. Human
    Rights Council resolution in March that calls for Sri Lanka to
    implement its own Lessons Learnt and Reconciliation Committee
    report, take action on accountability and allow U.N. special
    rapporteurs to visit Sri Lanka, report on their findings and
    offer relevant technical assistance. Mr. Chairman, Secretary
    Clinton will see Foreign Minister Peiris on Friday to discuss
    further all of these matters.
        Mr. Chairman, in conclusion, South Asia's strategic
    importance in the region and world affairs will only continue
    to grow. And it is my pleasure now to turn this over to my good
    friend and colleague, Nisha Biswal, to discuss the vital role
    that USAID is playing to support our foreign policy priorities.
    Thank you.
        [The prepared statement of Mr. Blake follows:]

                                  ----------

        Mr. Chabot. Thanks very much, Mr. Ambassador. You were
    right to the second on that. That is very impressive, very
    impressive.
        And Ms. Biswal, you are recognized for 5 minutes.

       STATEMENT OF THE HONORABLE NISHA DESAI BISWAL, ASSISTANT
         ADMINISTRATOR FOR ASIA, U.S. AGENCY FOR INTERNATIONAL
                              DEVELOPMENT

        Ms. Biswal. That is why he is at the State Department, sir.
        Chairman Chabot, Ranking Member Ackerman, members of the
    committee, thank you again for the invitation to testify today.
    I will summarize briefly my opening statement and ask that my
    full statement be submitted for the record.
        Mr. Chabot. Without objection, so ordered.
        Ms. Biswal. This afternoon I wanted to share with you my
    perspective on the vital role that U.S. foreign assistance
    programs are playing in this important, dynamic and
    increasingly democratic region, and in support of the foreign
    policy priorities that Ambassador Blake outlined.
        The diverse but densely populated subcontinent is home to
    nearly one-fourth of the world's population and we are
    confronting daunting challenges of disease, deprivation,
    natural disasters and environmental degradation. Yet this is
    also a region that has shown significant progress and one that
    holds even greater promise for the future. And the American
    people can take a degree of pride in the role that our
    partnership and our assistance has played in this progress such
    as the recent success in India on polio eradication.
        As Assistant Secretary Blake noted, our investments in the
    region have also yielded significant benefits for the American
    people. In fact, U.S. exports to developing countries overall
    have grown six times faster than exports to developed
    economies, and today they represent roughly half of all goods
    and services that the United States sells abroad. We know that
    the markets of the future will be in these expanding economies
    of South and East Asia, and USAID is committed to helping
    develop these further.
        Finally, under the leadership of Dr. Rajiv Shah, USAID is
    reforming the way that we do business by broadening our partner
    base making in easier for small businesses, local institutions
    and donors to partner with us. We are making better use of
    science and technology, strengthening our evaluation capability
    and partnering much more effectively with the private sector to
    leverage the knowledge, the expertise and the resources of the
    American businesses to solve critical global challenges.
        The President's Fiscal Year 2013 budget requests $362.3
    million for USAID programs in South Asia. The majority of AID
    assistance in South Asia is concentrated on the two poorest
    countries, Bangladesh and Nepal. About 69 percent of our
    assistance goes to these two countries. Nearly 40 percent of
    all Bangledeshis today still live on less than $1 a day, and
    malnutrition rates in this country continue at an alarming rate
    of about 41 percent for children under five. So in Bangladesh
    we are addressing food insecurity and malnutrition through our
    Feed the Future program, improving health outcomes through a
    focus on infectious diseases, family planning, maternal and
    child health, and addressing the impact of weather-related
    disasters.
        Similarly, Nepal faces development challenges and
    simultaneously is emerging from a 13-year conflict. AID is
    strengthening that fragile transition to peace by supporting
    the integration and rehabilitation of thousands of former
    combatants into civilian life. We are also working with civil
    society and the government to improve the delivery of essential
    social services, scale up health interventions and address food
    insecurity and build disaster resilience.
        In Sri Lanka, USAID has focused on the war-affected
    populations in northern and eastern parts of the country to
    support reconciliation between the ethnic groups and to
    increase economic opportunities for the victims of conflict.
        In the Maldives we are supporting efforts to enhance
    climate resilience and water security in this incredibly
    vulnerable island nation.
        And finally, in India, the United States has embarked on a
    strategic partnership with the government to harness the
    capabilities of both countries to address poverty and hunger
    not only in India but around the world. As India steps up its
    own engagement and assistance programs globally, it provides a
    powerful example of democratic governance and economic growth.
    The new partnership between the United States and India brings
    together U.S. and Indian resources and partners with U.S. and
    Indian businesses to identify and invest in innovative and
    cost-effective solutions that can have a transformative impact
    not only in India, but can also be adapted for addressing
    global challenges.
        In closing, Mr. Chairman, I just want to reiterate my
    commitment to ensuring that our assistance programs are
    advancing vital U.S. interests in the region, are being
    implemented in the most effective and efficient manner
    possible. USAID's programs are a smart investment in our own
    prosperity and security. I appreciate the opportunity to share
    AID's programs in South Asia and welcome any questions that you
    may have.
        [The prepared statement of Ms. Biswal follows:]

                                  ----------

        Mr. Chabot. Thank you very much. You also nailed it as well
    right on the second.
        Ms. Biswal. I was 2 seconds off.
        Mr. Chabot. Yes, very impressive. They set a big,
    important, high standard----
        Mr. Feldman. The bar is high.
        Mr. Chabot. The bar is very high, it is. Now you might have
    heard the bells there which is indicated that we do have votes
    on floor. We have time to get in one, so we will take your
    testimony and then we will come back and take Mr. Thier and our
    questions then after that. We will be gone about \1/2\ hour or
    so because we have four votes.
        So Mr. Feldman, you are recognized for 5 minutes.

    STATEMENT OF MR. DANIEL FELDMAN, DEPUTY SPECIAL REPRESENTATIVE
         FOR AFGHANISTAN AND PAKISTAN, U.S. DEPARTMENT OF STATE

        Mr. Feldman. Thank you. Mr. Chairman and members of the
    committee, thank you for inviting me in to discuss our Fiscal
    Year 2013 request for Afghanistan and Pakistan. And I, too,
    have submitted a more detailed written statement which I would
    like to ask be submitted for the record.
        Mr. Chabot. Without objection, so ordered.
        Mr. Feldman. Thank you. While the situation on the ground
    in both Afghanistan and Pakistan has been quite fluid over the
    past year with some significant progress and also remaining
    challenges, a constant in our approach is the sober
    responsibility we take as stewards of the taxpayers' funds. We
    have sought to carefully evaluate our efforts with our
    interagency partners and request for Fiscal Year 2013 only the
    core resources needed to accomplish and sustain our mission
    successfully in this upcoming, very critical and transitional
    year.
        In Afghanistan the administration has implemented three
    mutually reinforcing surges, military, civilian, and
    diplomatic, to fulfill the national security imperative of
    ensuring that Afghanistan never again serves as a safe haven
    for al-Qaeda. We are committed to learning the lessons of
    history and avoiding the kind of precipitous pullout that can
    fuel instability. We are now in the execution phase of this
    strategic trajectory that the administration outlined for you.
    We expect some continuing challenges along the way but we are
    doing what we said we would. We are achieving the goals we set
    in each of these three surges, fighting, talking and building
    at once.
        Just 2 weeks ago, as you noted, Mr. Chairman, a Strategic
    Partnership Agreement was signed that provides a comprehensive
    framework for continued cooperation between the United States
    and a sovereign Afghanistan. President Karzai just announced
    this past weekend the third tranche of transition, after which
    nearly 75 percent of Afghans will be living in areas where
    Afghan forces are leading. The Afghan army and police have now
    repeatedly demonstrated their enhanced capacity to defend the
    Afghan people with minimal assistance from Coalition forces,
    and by the end of 2014 the Afghans will be fully responsible
    for security throughout the country.
        In Chicago this weekend, our allies and partners will join
    us in advancing a sustainable, effective Afghan security force
    beyond transition. Key to achieving our security objectives is
    improved Afghan civilian capacity and economic opportunity,
    which requires not only sustained support from the
    international community but also critically, Afghan action to
    improve governance, fight corruption, promote private sector
    investment and protect human rights. In July, the international
    community and the Afghan Government will meet in Tokyo to
    advance this mutual accountability, building on commitments
    already made in a series of international conferences,
    including in Istanbul and Bonn, over the past year. While we
    will continue to face real challenges we have seen some
    remarkable results. We have made significant progress in
    bolstering womens' rights and education, expanding health
    services to the Afghan people, advancing nascent democracy and
    improving Afghan capacity.
        We similarly have a clear national security interest in
    Pakistan's stability with a population of 190,000 million
    people in the second-largest Muslim-majority country in the
    world, but with pockets of extremism and nuclear capability in
    a tough neighborhood Pakistan is of critical importance to
    regional stability and to our regional strategy. We share many
    common interests with Pakistan including fighting the
    extremists that plague us both, the benefits of a secure and
    stable Afghanistan, and developing stronger regional trade
    ties.
        I want to be clear-eyed in acknowledging that the events of
    the past year have posed significant challenges to our
    bilateral relationship, but the U.S. and Pakistan have both
    expressed and demonstrated a real commitment to getting this
    relationship on firmer footing and working together
    constructively on military intelligence and economic
    cooperation. I have been witness to this personally on my two
    visits to Pakistan in the last month alone both as part of
    senior interagency delegations to work diligently through these
    issues. A critical step must be Pakistan's contribution to the
    U.S. and international efforts in Afghanistan through the
    reopening of the groundlines of communication. A U.S. team has
    been in place in Islamabad for the past 3 weeks, since my last
    trip there to address these issues, meeting around the clock
    including this evening. We are making progress and hope we can
    come to resolution soon. We welcome NATO's invitation to
    Pakistan to participate at this weekend's summit in Chicago.
        Pakistan's cooperation on our key counterterrorism
    priorities is vital. As President Obama said following the
    death of Osama bin Laden, we have been able to kill more
    terrorists on Pakistani soil than just about anyplace else. We
    could not have done that without Pakistani cooperation. We
    continue to work with Pakistan to restrict the capability of
    extremist groups that pose a serious threat to Americans,
    Afghans and ISAF forces and to the Pakistani people. In their
    recent parliamentary review, the Pakistanis themselves mandated
    that their territory shall not be used for any kind of attacks
    on other countries and that all foreign fighters shall be
    expelled from Pakistani soil. In this broader national security
    context, U.S. assistance to Pakistan is designed to promote
    stability and growth in civilian institutions and the private
    sector. Though still fragile, Pakistan civilian institutions
    have strengthened over the past year and shown great
    resilience, and the country is now preparing for elections
    which could bring the first handover of one civilian government
    to another in the nation's history.
        Our assistance is also designed to evolve the bilateral
    economic relationship to one based on trade not just aid so
    that we can begin the trajectory away from long-term civilian
    assistance. In both Afghanistan and Pakistan we recognize that
    our objectives cannot be met without regional support and
    greater regional trade and economic integration. We applaud
    unprecedented steps to improve Indian-Pakistani trade and
    commerce in which will continue to advance the Secretary's New
    Silk Road vision.
        And in conclusion, in Fiscal Year 2013, and looking ahead
    in Fiscal Year 2014, are both critical milestones in our
    engagement. We look forward to continuing to work closely with
    Congress to ensure that our efforts are appropriately resourced
    to achieve our objectives.
        [The prepared statement of Mr. Feldman follows:]

                                  ----------

        Mr. Chabot. Thank you very much. And at this time we will
    be in recess for a half hour, and then we will have Mr. Thier,
    and then question the panel. So we will be gone for
    approximately a half hour, and we are in recess.
        [Recess.]
        Mr. Chabot. The committee will come back to order. We have
    to have two members here at least in order to carry on
    business, and we now have two members. So Mr. Thier, you are
    recognized for 5 minutes. You might want to hit that mic there.

         STATEMENT OF ALEXANDER THIER, PH.D., ASSISTANT TO THE
    ADMINISTRATOR AND DIRECTOR, OFFICE OF AFGHANISTAN AND PAKISTAN
           AFFAIRS, U.S. AGENCY FOR INTERNATIONAL DEVELOPMENT

        Mr. Thier. Thank you, Mr. Chairman, and other distinguished
    members of the subcommittee. Thank you for the invitation to
    appear today. My statement is also longer and I ask that it be
    entered into the record.
        Mr. Chabot. Without objection, so ordered.
        Mr. Thier. Our civilian assistance to Afghanistan and
    Pakistan is a critical component of our core U.S. national
    security objectives in South and Central Asia. Afghanistan and
    Pakistan, and consequently the region as a whole, present
    enormous opportunities and enormous challenges. I began working
    in the region 20 years ago when I served in Afghanistan and
    Pakistan for nearly 4 years during the Afghan civil war. This
    region, wracked with conflict for much of the last three
    decades, remains one of the least integrated in the world, with
    the vast majority of its human and economic potential untapped.
        This does not have to be the case. However, it will take
    fundamental changes by regional leaders to transform these
    dynamics. Our U.S. civilian assistance programs can be an
    essential catalyst and incentive for change, and our efforts in
    Afghanistan and Pakistan today are delivering tangible,
    measurable results. Our efforts to spur investment in small
    Afghan enterprises, expand trade ties between Afghanistan,
    Pakistan and India, and connect the restive tribal areas of
    Pakistan to the economy and government are creating economic
    opportunity, interdependence, better governance and increased
    accountability.
        The importance and impact of effective, accountable and
    sustainable development assistance to Afghanistan and Pakistan
    is more essential than ever in this period of transition. The
    stability of Afghanistan amidst the drawdown of our forces will
    require sustained effort to cement the important development
    gains that have been made and mitigate the economic
    consequences of the reduction of our military presence. We have
    seen the dire consequences of neglect and disengagement play
    out in this region before, and the Obama administration is
    committed not to repeat history.
        Afghanistan has, in fact, made remarkable development
    progress in the last decade with the support of U.S. and other
    donor investments. None of these significant achievements was
    foreordained. For example, the Afghan public health story is
    nothing short of remarkable. It is an appropriate reminder this
    week of Mother's Day that Afghanistan had the worst maternal
    mortality rate in the world in 2002, and only 6 percent of
    Afghans had access to even the most basic health care. Today,
    thanks to an innovative partnership with the Afghan Ministry of
    Public Health, access to basic health services has expanded to
    over 60 percent, and life expectancy has risen 15 to 20 years,
    the single largest gain in life expectancy anywhere in the
    world in the last decade.
        Improvements in education and economic growth tell a
    similar story. But we have also learned the hard lessons in
    what is one of the most challenging environments in the world,
    and we have made critical corrections to the implementation of
    assistance to enhance effectiveness, accountability and
    sustainability. The path to sustainable stability in
    Afghanistan requires continued commitment to civilian
    assistance increasingly through efforts that will boost Afghan
    self-sufficiency.
        We have prioritized our assistance portfolio to make
    foundational investments that will enable transition, ensuring
    that Afghans have the skills and resources necessary to chart
    their own future. However, this commitment is contingent on the
    Afghans fulfilling their commitment to strengthen
    accountability, transparency, oversight and the effectiveness
    of government institutions.
        Pakistan also remains a critical partner for the United
    States. Their efforts to deal with rising militancy,
    transnational terrorism and nuclear security are of paramount
    importance to U.S. national security, and Pakistan's economic
    and political stability is essential to achieving those
    objectives. Despite the enormous challenges to the bilateral
    relationship over the last 16 months, U.S. development work in
    Pakistan has persevered and delivered important outcomes for
    the United States and for Pakistan.
        USAID has crafted a results-driven civilian assistance
    strategy that is having a visible and measurable impact that
    furthers our objectives there. Over the past 18 months we have
    refocused our program in five key sectors, energy, economic
    growth, stabilization, education and health, and I hope I will
    have more opportunity to talk about those. We have also created
    a network of public-private partnerships that will make those
    gains sustainable.
        In conclusion, development assistance is an important tool
    in advancing key U.S. national interests, forging strong and
    productive relationships with international partners, and
    helping Afghanistan and Pakistan on a path to where our
    assistance will no longer be required. Ultimately our
    investments in a stable, self-reliant Afghanistan and Pakistan
    provide security, economic opportunity, and basic services to
    their citizens will enhance U.S. security and the long-term
    stability of the region. Thank you.
        [The prepared statement of Mr. Thier follows:]

                                  ----------

        Mr. Chabot. Thank you, Mr. Thier. Your time has expired. We
    will now have 5 minutes to ask questions. I recognize myself
    for 5 minutes for that purpose, and I will begin on Afghanistan
    with Mr. Ambassador. Any of the questions I have, anybody is
    free to respond if you would like to.
        The 6-month assessment team concluded that the Afghan
    Public Protection Force, the APPF, was not on track to assume
    private and security contract responsibilities by March 20th,
    2012, and made six urgent recommendations with regard to
    improving the APPF readiness standards. Have any of these
    recommendations been implemented, and how many of the
    transition readiness standards have been met by the APPF as of
    this quarter? Whoever might want to--Mr. Thier?
        Mr. Thier. Thank you. I can speak for the USAID portion of
    that transition. The date of transition was on March 20th of
    this year, and our implementing partners had identified that 34
    of our programs in Afghanistan would require the services of
    the Afghan Public Protection Force. Today 28 of those 34 have
    signed contracts with the APPF. The APPF is at their program
    sites and is functioning. The remaining six of those projects
    are still negotiating the terms of the agreement under an
    extension that was granted to them to do so.
        So in specific response, while I do not have an update
    assessment that directly tracks the one from last September,
    what I can tell you is that for the vast majority of our
    projects that require the APPF, the challenge has been met of
    contracting with the APPF, the guards are now onsite and
    performing the function to the satisfaction of our implementing
    partners.
        Mr. Chabot. Okay, thank you. My next question has to do
    with aid to Pakistan. As I mentioned in my opening statement,
    one of my main concerns regarding our current policy in
    Afghanistan is the general lack of long-term strategy. I have
    that same concern regarding our policy toward Pakistan. Foreign
    assistance is a means not an end in and of itself. From looking
    through the Fiscal Year 2013 budget proposal, however, it
    appears to me that our assistance is not aimed in any larger
    objective, they are just a series of disparate programs.
        Could one of you explain to me exactly what we are trying
    to achieve in Pakistan in particular with our aid? Whoever
    would like to take that--Mr. Feldman?
        Mr. Feldman. Sure, I will start on that. Alex and I can
    split it. We have thought very long and hard about our civilian
    assistance to Pakistan, and our request is split almost exactly
    evenly between civilian assistance and security assistance.
    That was done purposely so that there would be some equality
    between those amounts. On the civilian assistance side in
    particular, what we have continued to say is that we are trying
    to support a long-term stable, civilian, democratic,
    pluralistic, tolerant society, and we have prioritized our
    assistance into the five key areas that Alex noted. Those are
    all, particularly those top priorities of energy, economic
    growth and stabilization along the border areas, to help to
    build economic stability, build a middle class and ultimately
    transition us away from assistance to a more trade-based
    economy. And so on something like energy it is impossible to
    create the type of middle class that can provide for the
    economic stability when we are still dealing with 16-, 18-hour
    brownouts. And so our efforts to get megawatts on the grid, to
    build, to have economic growth programs in both urban and rural
    areas, and then very tangible projects such as roadwork in the
    border areas, which help us both on the security and stability
    side as well as the economic stability side, are key to those
    goals.
        Mr. Chabot. Okay. I have only 1 minute left, so one thing I
    would like to say is I heartily support the idea of moving to
    more trade and less aid. I think that is a goal. We don't
    always make it but we certainly ought to attempt to do that.
        And finally, my question is about the impact of U.S.
    withdrawal on India. Indian decision makers have become
    discomfited by signs that the United States and its allies are
    preparing to leave Afghanistan in such a way that would provide
    a central role for Pakistan in mediating between Kabul and
    Taliban elements perhaps even to include a role for the latter,
    Pakistan, or Taliban in Afghanistan's governance. Such an
    outcome stokes fears in Indian leaders who wish to limit
    Islamabad's influence in a post-war Afghanistan.
        To what extent are such Indian fears legitimate, and to
    what extent, if any, does an Indian role in Afghanistan
    represent a legitimate threat to Pakistan's security interests?
    And whoever would like to take that--Mr. Ambassador?
        Mr. Blake. Let me just start on that and then maybe Dan can
    chime in. Mr. Chairman, when Secretary Clinton was in India
    last week, she talked a lot with the Prime Minister and the
    Foreign Minister about what we are doing in Afghanistan and
    particularly briefed them on our own Strategic Partnership
    Agreement. I think the Indians were very reassured by that and
    reassured by the long-term commitment that we are demonstrating
    to Afghanistan. And indeed, the Indians themselves are doing a
    lot to show their own long-term commitment. They have a $2-
    billion assistance program. They have recently invested in a
    very large iron ore project that is a multi-billion dollar
    project at Hajigak, where they will not only be investing in
    that but also the associated infrastructure.
        And then we really see India as kind of the lynchpin of the
    New Silk Road vision, because they are going to be the largest
    market in the region. So they are really so important to
    developing a lot of these regional projects like the
    Turkmenistan-Afghanistan-Pakistan-India gas pipeline, and many,
    many other things like that. And of course they have been
    making a lot of progress with Pakistan on the bilateral trade
    side which is very, very important to this vision that you
    talked about of trade. If we are going to create a trade-based
    economy in Afghanistan, a very important part of that will be
    to open up those trade routes to India.
        Mr. Chabot. Okay, thank you very much. And my time is
    expired. I will yield to the gentleman from Virginia, Mr.
    Connolly, for 5 minutes.
        Mr. Connolly. Thank you, Mr. Chairman. And I will ask
    first, unanimous consent to my full statement be entered into
    the record?
        Mr. Chabot. Without objection, so ordered.
        Mr. Connolly. I thank the chair. Ambassador Blake, I think
    this may be a question for you, but it may be for Mr. Feldman.
    The United States and Pakistan seem to have been on different
    paths when it comes to the Haqqani network. Can you comment on
    where we are in our discussions with the Pakistani Government
    with respect to this very troubling issue?
        Mr. Feldman. As I noted in my opening statement, core among
    the shared interests that the U.S. and Pakistan have is our
    commitment to fighting extremism and it has taken many forms.
    And I noted the President's statement, which is in my written
    statement as well as some specific examples, of continued
    coordination on the counterterrorism side over the last year.
    On the Haqqani network in particular, I can echo Secretary
    Clinton's own comments when she was there last in October, when
    she talked about how terrorism is mutual threat to all of us.
    And at that point she noted the efforts to squeeze the Haqqani
    network both from the Afghan side of the border, which was
    going on with military operations, as well as from the
    Pakistani side. And we have listed some specific steps that we
    have ongoing intelligence channel conversations with the
    Pakistanis about on continued ways to do that including and
    ensuring----
        Mr. Connolly. But Mr. Feldman----
        Mr. Feldman [continuing]. Intel sharing on financial----
        Mr. Connolly [continuing]. Hold on just for a second. There
    is convincing evidence that elements of the Pakistani
    Government have protected the Haqqani network within the
    borders of Pakistan. What are we doing to change that?
        Mr. Feldman. Yes, sir. We are working jointly with the
    Pakistanis on targeting Haqqani very, very explicitly. We have
    targeted them through listings specifically and individually.
    We continue to work with the Pakistanis on ways that we can
    confront this not only through military effort but through a
    range of efforts that the civilian government, the intelligence
    channels and others can take for part of our conversation----
        Mr. Connolly. Mr. Feldman, is it your testimony to this
    subcommittee that the Pakistani Government and all of its
    elements including the ISI are in full cooperation with the
    United States in trying to suppress the Haqqani network as a
    terrorist organization?
        Mr. Feldman. We continue to work with the Pakistanis very
    closely on all extremist threats posed to both the U.S. and
    Pakistan----
        Mr. Connolly. That is not my question, Mr. Feldman.
        Mr. Feldman [continuing]. Including the Haqqani network.
        Mr. Connolly. My question is, do we have the full
    cooperation of the Pakistani Government in this matter? It is
    not a complicated question.
        Mr. Feldman. And I would say we are coordinating very
    closely with the Pakistani Government.
        Mr. Connolly. And I would say you just didn't answer the
    question, Mr. Feldman.
        Mr. Feldman. Sir, our counterintelligence efforts are core
    to our shared interests here, and the Haqqani network is chief
    amongst them. There are key Haqqani targets who have been
    killed in Pakistan over the last year both through our own and
    shared efforts, and there are a range of other alternatives
    that we are taking to try to continue to target them.
        Mr. Connolly. Well, I think in this Congress in a
    bipartisan basis, there is very troubling evidence of the lack
    of cooperation with the Pakistani Government on this matter and
    the Haqqani network is a very dangerous, potent network that
    has been listed as terrorist. And if we are going to have a
    partnership or a collaboration with the Pakistani Government
    that is the least we can expect of them. And the idea that they
    actually harbor the Haqqani in Pakistan is extremely troubling,
    Mr. Feldman. The fact that we make representations to the
    Pakistani Government is not sufficient.
        Ambassador Blake, we just saw an assassination of somebody
    who was sort of playing interlocutor with the Taliban with the
    idea toward enticing some elements of the Taliban to negotiate
    with the United States Government with the Government of
    Afghanistan. That seems not to bode well for any prospect of
    negotiating with such an extremist Islamic element like the
    Taliban. Would you comment?
        Mr. Blake. I am handling India and all the countries
    around----
        Mr. Connolly. Mr. Blake, we can't hear you. I'm sorry, Mr.
    Ambassador, we can't hear you.
        Mr. Blake. Let me defer to Dan again on that one.
        Mr. Connolly. You are back, Mr. Feldman.
        Mr. Feldman. I am here to talk about----
        Mr. Connolly. You are going to tell me again with marbles
    in your mouth, we are cooperating very closely with----
        Mr. Feldman. Sir, I think as Chairman Mullen noted when he
    testified last fall, there is no solution in the region without
    Pakistan and there is no stability in the region without
    Pakistan. And core among our chief interests which are
    continuing to work and to evolve and where we have a very
    robust, ongoing relationship through intelligence channels,
    through military channels and through civilian channels, this
    is chief amongst our commitments. We talk to the Pakistanis
    constantly about the need to continue to target even more
    robustly Haqqani network.
        Mr. Connolly. Okay, so you were putting closure on the
    previous question. I just asked a question about the Taliban.
        Mr. Feldman. Yes.
        Mr. Chabot. The gentleman's time has expired, but the
    gentleman is yielded 1 additional minute.
        Mr. Feldman. On the most recent assassination we don't have
    any specific intelligence on where that originated from.
    Obviously, the reconciliation efforts in Afghanistan are part
    of our core interests. The diplomatic surge is one of the three
    surges. The High Peace Council is key among those, and there
    are those to seek to undermine the reconciliation process who
    are targeting specific members of the High Peace Council. But
    we don't have any intelligence at this point in terms of who
    ordered that.
        Mr. Connolly. But--Mr. Chairman, if you would indulge just
    one follow-up. My question really wasn't so much what
    intelligence we have as asking you to react to the idea that it
    calls into question, if you will, the efficacy of trying to
    engage the Taliban in reconciliation at all, and in a tragic
    way this assassination perhaps puts the exclamation point on
    that. You may not share that view, and I am inviting you to
    tell us whether you do or don't, or----
        Mr. Feldman. Sir, I would say that we have long said
    through both military and civilian leadership that this
    conflict would not end through military means alone. It has to
    end, as most insurgencies end, through some sort of political
    resolution and reconciliation. That is why we are continuing to
    try to pursue all possible channels on reconciliation in
    conjunction with continuing our military and civilian efforts
    as well. I think this assassination indicates that there is
    actually great divisions within the Taliban, and that there may
    well be some who are seeking to reconcile and others that are
    not. And in as far as it may be a signal of conflict and chaos
    within the Taliban that is not a bad thing for our interests.
        Mr. Connolly. And to your point, and the U.S. Government's
    position is there are some elements worth trying to reconcile
    with?
        Mr. Chabot. The gentleman's time has expired. Did you want
    to respond to that quickly?
        Mr. Feldman. Yes, sir. That is part of our fundamental
    strategy that we would have these three surges simultaneously,
    military, civilian and diplomatic, and reconciliation is the
    core piece of that diplomatic strategy.
        Mr. Connolly. I thank the chair.
        Mr. Chabot. Thank you. The gentleman's time has expired.
    The gentleman from Texas, Mr. McCaul, is recognized for 5
    minutes.
        Mr. McCaul. Thank you, Mr. Chairman. In following up with
    my good friend from Virginia, Mr. Connolly, Chairman Mullen,
    himself, stated that the Haqqani network is operating with
    Pakistan support. Secretary Clinton warned the President of
    Pakistan about this. Recently I was in Pakistan, last November,
    we talked to President Zardari about this. But in his terms he
    said, we don't pick and choose between terrorist organizations,
    we go after them all. So I see a bit of a conflict. And of
    course when we get briefed on this they say, well, they have
    the terrorists that are in the good bin and those in the bad
    bin, and so where does the truth lie? I guess, Mr. Feldman, you
    are the man of the hour.
        Mr. Feldman. I am the man of the hour. Sir, as Chairman
    Mullen said and as I was attempting to try to say before, he
    expressed the administration's view that continuing safe havens
    are extremely troubling and we have to see action taken against
    them. But he also emphasized in that exact same testimony that
    we need to continue to stay engaged to be able to do that and
    he cautioned against signs of disengaging with Pakistan.
        Mr. McCaul. Well, then and also the report came out that
    Haqqani was behind the Afghan attacks against the U.S. envoy
    just last, well, in April of this year.
        Mr. Feldman. Yes.
        Mr. McCaul. They are killing our soldiers. And the idea
    that the Pakistanis could be complicit and working with them,
    which I personally believe is true, is very troubling to
    policymakers like ourselves, and particularly when it comes to
    foreign aid. Could the Secretary certify today that the
    Pakistani Government is in no way working with the Haqqani
    network?
        Mr. Feldman. Well, that is one of the certifications that
    we are working through right now on a staff level and we don't
    have an answer for you at this point. But we are taking that
    certification, which I know you have been quite involved with
    very seriously, and trying to look at it as soberly as
    possible. Look, we need to be in a position where in every
    engagement with the Pakistanis we can continue to show the need
    for increased cooperation on extremists including among the
    Haqqani network which pose a threat to both of us. And there is
    clearly more that could be done, but the way that we continue
    to try to get this done is to increase engagement. And as
    Secretary Clinton said when she was there last, it is through
    issues like the financing networks, on intelligence sharing, on
    working with law enforcement personnel to deny safe haven, and
    we raise this at every opportunity at every level in all of our
    engagement.
        Mr. McCaul. And I totally agree with the engagement issue.
    I just think again when it comes to being able to certify
    whether or not Pakistan, ISI or government at any level is
    working with Haqqani, it sounds like this is a work in progress
    within the administration in terms of whether or not they can
    certify that question.
        Mr. Feldman. It is indeed a work in progress. But I can
    tell you very honestly it is still happening at the staff level
    where we are collecting all the data, and in looking at the
    range of criteria----
        Mr. McCaul. Are you aware of any evidence that they are
    cooperating and working together----
        Mr. Feldman. There is a range of evidence, and depending on
    the certification for the steps that they have taken countering
    extremism and terrorism including on Taliban, including on
    Quetta Shura and last on the Haqqani network, but continued
    efforts to try to encourage joint----
        Mr. McCaul. Well, encourage to continue that pressure. I
    know the Secretary is very good at that. She is smart. I know
    she is putting that pressure on.
        Want to echo the chair's comments about trade. When we met
    with President Zardari, and I just want to pass this along, he
    said, really what I want is more trade not aid. And we had
    dinner with some Pakistani businessmen who were working with
    the Indians, and there are actually now some pretty closer
    business ties between Pakistan and India which I think long-
    term will resolve a lot of this tension between the two
    countries that has caused so many problems for us here as well.
        Last question I want to ask Ms. Biswal. In Herat there has
    been kind of an experiment going on with five different things,
    health care, water, food, job training, and education too, kind
    of have a more holistic approach to our aid to that area in
    Afghanistan. USAID, there have been a lot of problems with the
    way it has, I think, functioned in Afghanistan. This has been a
    sort of joint project with USAID and the NGOs. And I would ask
    that you look at what is going on in Herat as a potential model
    for the rest of the country. I don't know if you are familiar
    with what is going on there or not, or if you can comment on
    that.
        Ms. Biswal. I would defer to my colleague, Alex Thier, on
    that.
        Mr. McCaul. Okay. Mr. Thier?
        Mr. Thier. Yes, hi. Thank you. I am not obviously certain
    which project you are referring to. I have been to Herat
    recently, and if you have been, Herat is the place in
    Afghanistan when you visit you think if the rest of the country
    could look like this in a decade we would be doing well. So I
    fully endorse the notion that there have been some very
    successful programs there. And I want to link it to this
    broader issue which is that Herat is a trading city. It has
    always been a trading city, and its strength is drawn from the
    fact that they have very successfully, in the last 10 years,
    rebuilt trade relations going in every direction, which I think
    is contributing to the prosperity of the city. And one of the
    things that we are really trying to do in Afghanistan in that
    part as well as other parts is to really provide these tools of
    self-sufficiency so that more Afghans are building their own
    sustainable livelihoods rather than depending on----
        Mr. McCaul. I would ask that you look at that model and see
    what they are doing there to just work. Even some Taliban
    members are coming back to the village saying, we want to join
    you because we don't like--they are doing it just for $5 a day,
    a lot of these guys, and they don't want to be with the
    Taliban. Now the top leaders, they are who they are, but I
    think we can win back a lot of the Afghan people through that
    kind of model.
        I know my time is expired.
        Mr. Chabot. Yes, great. The gentleman's time has expired.
    We will go to a second round now and I recognize myself for 5
    minutes. I would like to shift a little bit here to Sino-Indian
    relations. The simultaneous rise of the two world's most
    populous countries has elicited anxieties in both New Delhi and
    in Beijing. The dynamics of the triangular U.S.-India-China
    relationships are likely to be critical to fostering global
    stability and prosperity in the 21st century.
        How do you see these things progressing in coming years?
    And additionally, anti-Indian rhetoric has become more common
    in China's state-run media. Some hawkish Indian analysts assert
    that China's newly muscular stance toward India is a direct
    result of the U.S.-India strategic partnership. To what extent,
    if any, do you agree with that particular assessment? Whoever
    would like to take it on--Mr. Ambassador?
        Mr. Blake. Mr. Chairman, let me just say, first of all,
    that both the United States and China have continuously
    stressed that our expanded strategic engagement is not coming
    at the expense of China and that neither one of us are seeking
    to contain China. On the contrary, both of us are seeking to
    engage China wherever possible. In my own case, I have very
    productive dialogues with my Chinese counterparts both on South
    Asia and on Central Asia to try to encourage more cooperative
    efforts between us and at least understand what each of us are
    trying to get accomplished in each of these important regions
    for us. And I must say that the quality of those dialogues has
    really improved over the last several years. I think another
    kind of important factor to note is that Sino-Indian trade has
    grown very, very fast, so that has given both of those
    countries an enormous stake in each other's success, and I
    think has helped to give them incentive to work through some of
    the very tough border and other issues that they have.
        So I think both of our countries are going to continue to
    try to engage China, to be clear when we have differences, but
    also to look for opportunities where we can work together. We
    have actually proposed a trilateral U.S.-China-India dialogue,
    and I think that the Chinese are seriously considering that
    now. We hope that they will agree to that. And one of the most
    interesting early topics for discussion would be Afghanistan,
    because we believe there are ways that we could work together
    in that country.
        Mr. Chabot. Thank you. Staying on India but a related
    issue, the relations between the U.S. and India have been
    somewhat strained due to India's continued import of Iranian
    oil. This dynamic was the focus of Secretary Clinton's recent
    trip to India where she said, ``We are encouraged by what we
    have seen the Indian Government being able to do. We want to
    keep the pressure on Iran.'' India said on Tuesday that it
    would cut purchases of Iranian oil by 11 percent. And we had a
    meeting with the Indian Foreign Minister awhile back, and I
    think in a bipartisan manner we all emphasized how important
    this was to us.
        And so my question is, is this move big enough to avert
    U.S. sanctions, and how will this move affect U.S.-Indian
    relations? Mr. Ambassador?
        Mr. Blake. Thank you for that important question, Mr.
    Chairman. As you say, when Secretary Clinton was in India last
    week she welcomed the progress that India is making, and she
    noted that the United States and India both show the same goal
    which is to prevent Iran from acquiring a nuclear weapon. So
    India has been really terrific in their support in four
    different votes in the IAEA, the International Atomic Energy
    Agency, on this subject. Prime Minister Singh has said publicly
    many times, it is not in India's interest to have another
    nuclear weapon state in the region. So I think we are in pretty
    good convergence on this. We continue to urge India to make
    progress in continuing to reduce its imports of oil from Iran
    as we do with all of our other partners. And as the Secretary
    said, there is progress but we need to see continued progress
    from them and other countries.
        Mr. Chabot. And then finally, in the short time that I have
    left there, it is no secret that to date, and I had mentioned
    this in my opening statement, that the U.S.-India civil nuclear
    agreement hasn't met U.S. commercial expectations, and a key
    impediment has been the nuclear liability law passed by the
    Indian Parliament which essentially, as I mentioned, shut down
    U.S. companies in being involved there. I understand that the
    Department has been in some discussions with the Indians about
    the implementation of this law. What is the current status of
    that liability law?
        Mr. Blake. Well, again, Secretary Clinton discussed this on
    her visit last week with senior Indian leaders. She noted that
    we continue to have a very strong interest in supporting our
    companies' interests in moving ahead, particularly Westinghouse
    and General Electric. She was pleased to hear from India that
    they have restated their commitment to ensuring a level playing
    field for our companies. We have had a very strong dialogue on
    the liability legislation. That dialogue has relieved some of
    our concerns but not all of our concerns, and I think our
    companies still feel that there are impediments to moving ahead
    with the current law, so we will continue to work through that.
        But in the meantime we are focusing on trying to support
    our companies' efforts to sign early commercial agreements,
    things that do not require or they are not impeded in any way
    by the existing liability legislation. Things like early
    engineering and other contracts that would be the kind of
    precursors to a wider reactor contract. So there has been
    progress on that and we hope that we can see some early
    conclusion to some of those contracts that would be quite
    important to our companies.
        Mr. Chabot. Thank you. My time has expired. The gentleman
    from Virginia is once again recognized for 5 minutes.
        Mr. Connolly. I thank the chair. Mr. Ambassador, following
    up on the chairman's question about India's cooperation in our
    sanctions and other policies with respect to Iran. We had a
    dinner with the new Indian Ambassador here in Washington, and
    she made the point that India is heavily reliant on Iran as a
    source of oil. I want to say 15, 20 percent, something in that
    range. I assume that was the subject of ongoing discussions
    between the Secretary and Indian leadership when she was there.
        What is the sense of progress we are making in helping the
    Indians to lessen their reliance on Iran as a source of fuel?
        Mr. Blake. As the Secretary said and as I said earlier, Mr.
    Connolly, I think progress is being made. To be clear, India is
    making this progress not because of our own bilateral urgings,
    but I think they are making progress because they say that this
    is because of financial and commercial considerations. Most of
    the Indian companies that have been working in Iran are pulling
    out for their own reasons, again, looking at market
    considerations. That is certainly a welcome development from
    our perspective. So we have had a good dialogue on this, and
    again we welcome the progress. And that percentage is steadily
    going down even as India's energy needs----
        Mr. Connolly. Consumption, yes.
        Mr. Blake [continuing]. Are growing quite substantially.
        Mr. Connolly. One can't be unsympathetic with the Indian
    plight. It is not that easy to radically alter, especially in a
    big country like India, as you say with growing consumption,
    growing demand, to easily just change your supply pattern. Are
    we assisting the Indian Government in identifying alternative
    suppliers?
        Mr. Blake. We are. And we are really assisting all of our
    friends that are in this same predicament. In the Indian case
    they have actually had a long-term policy to source more from
    Saudi Arabia that has been going on for several years, so you
    will see the percentage from Saudi Arabia has been growing
    rapidly. A more recent important source for them is Iraq which
    itself has been increasing its own production and so that also
    has become quite an important source for India.
        Mr. Connolly. Maybe the Keystone Pipeline will help India
    with its energy independence too. I am surprised that claim
    hasn't been made.
        Ms. Biswal, when I was in Afghanistan, AID was ramping up
    big-time, several years ago, and so was DEA. Recent report
    about poppy production seems to suggest that actually we have
    lost ground in that respect, 17 out of 34 provinces now poppy
    producers, three of which had been previously declared as
    poppy-free. That sounds like all of the aid we are providing
    through your agency and through DEA does not seem to have had
    the desired effect. Your comment?
        Ms. Biswal. I am going to again defer to my colleagues,
    Alex Thier and Dan Feldman, on this.
        Mr. Feldman. Yes, Mr. Connolly, we would be happy to get
    back to you with a briefing specifically on counternarcotics.
    There have been reports on several of the districts that have
    gone from poppy-free to some production, but that production is
    still relatively minimal, and I am not sure whether the overall
    trends agree with your supposition that the overall amount is
    down. What we can talk about is what USAID and other of our
    civilian assistance is doing in agricultural production to
    create livelihoods and to create more economic stability in the
    countries, specifically focused on poppy-producing regions.
        I don't know if you wanted to say anything more on that?
        Mr. Thier. So there is obviously two components to this
    program. The State Department INL works mostly on the
    eradication and prosecution and so on side of their narcotics
    control element and USAID focuses on what we call alternative
    livelihoods, creating a way for farmers who are in the poppy to
    get out of it and to get out of it sustainably. We have seen,
    really pretty dramatic in the last couple of years, increases
    in crop yields in Afghanistan and specifically in some of those
    areas that are targeted to try and replace poppy cultivation
    with cultivation of wheat and horticulture. So that is
    improving. What we are really now working on is trying to get
    them better market access, because you can plant one thing one
    season and then if the prices change plant a different thing.
    And what we need to do is to be able to take the success we
    have had in agricultural production and make that long-term by
    creating more sustainable access to markets.
        Mr. Connolly. Two observations if I may. One is,
    interestingly, one of the great consumers of Afghan poppy
    production is actually Iran, and there may be an opportunity
    there for cooperation. Secondly, in my previous life up here,
    on the Senate, in my portfolio was international narcotics
    control. And the observation I have in looking at many
    countries that are producers of various substances is that we
    have the disadvantage that many food crops or other kinds of
    agricultural production simply don't compete economically,
    unfortunately, with the drug of choice or the precursor to that
    drug of choice. And that is what we are up against. I mean how
    do you disincentivize a farmer who is poor and wants to feed
    his family from growing a cash crop that is highly lucrative
    and easily brought to market, and we are offering them, grow
    some food crops that are a fraction of the cash value of that
    crop? And I think that has got to be a dilemma including in
    Afghanistan.
        Mr. Chabot. The gentleman's time has expired. Did anybody
    want to comment on that? If not, I would just comment, myself,
    and then we are going to wrap this up. One area that I think
    has been a dismal failure is our ability to influence
    Afghanistan relative to the poppy. Opium production in the
    world, 90 percent of it is coming from Afghanistan, and we are
    supposed to have some influence there and have spent billions
    and billions and billions of dollars. But to think that 90
    percent of the world opium production comes from Afghanistan
    means that we haven't even scratched the surface in being
    successful on that front.
        But in any event, I would like to thank the panel for their
    testimony here this afternoon. We appreciate it greatly.
    Members will have 5 days to supplement their statements and
    remarks or offer additional questions. And if there is no
    further business to come before the committee, we are
    adjourned. Thank you.
        [Whereupon, at 4:06 p.m., the subcommittee was adjourned.]

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