[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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