[Senate Hearing 112-]
[From the U.S. Government Publishing Office]





 
  STATE, FOREIGN OPERATIONS, AND RELATED PROGRAMS APPROPRIATIONS FOR 
                            FISCAL YEAR 2013

                              ----------                              


                       WEDNESDAY, MARCH 14, 2012

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.
    The subcommittee met at 10:08 a.m., in room SD-226, Dirksen 
Senate Office Building, Hon. Patrick J. Leahy (chairman) 
presiding.
    Present: Senators Leahy and Graham.

           UNITED STATES AGENCY FOR INTERNATIONAL DEVELOPMENT

STATEMENT OF RAJIV SHAH, M.D., ADMINISTRATOR

             OPENING STATEMENT OF SENATOR PATRICK J. LEAHY

    Senator Leahy. Good morning Dr. Shah and thank you for 
being here. We will be discussing the U.S. Agency for 
International Development's (USAID) budget.
    It has been a little more than 2 years since you became 
USAID Administrator, and I know you had to start addressing the 
serious cultural and programmatic problems you inherited that 
have plagued USAID for years. You have plenty to be proud of. 
USAID's programs have helped to improve agricultural 
productivity, rather than countries having to import food. 
USAID has increased the enrollment of girls in schools, which 
is extremely important. USAID has also saved countless lives 
from malaria and other diseases.
    We also understand that in any bureaucracy as large as 
USAID change doesn't come easily, and so while you have made 
progress there is a long way to go.
    We included several provisions in the Department of State, 
Foreign Operations, and Related Programs bill last year to 
support USAID's procurement reform.
    We have asked USAID for recommendations of other ways the 
Congress could amend the Federal acquisition regulations. I 
have said to you privately and publicly that I am concerned 
that a few large U.S. contractors and nongovernmental 
organizations (NGOs) obtain the majority of USAID funding.
    Eight years ago, the Congress created the Development 
Grants Program, a small fund to support innovative proposals 
including small, mostly local NGOs. But I see what happens so 
often, USAID has taken a good idea and either failed to 
implement it or redesigned it in such a way that it thwarts our 
intent.
    I think you have to fundamentally reform the way USAID does 
business. If the changes we have asked for simply end up 
shifting a whole lot of money to big contractors in developing 
countries, that is not the reform we seek.
    A related concern is sustainability of USAID's programs. 
The World Bank recently analyzed the sustainability of 
nonsecurity assistance in Afghanistan. They estimated that by 
2014 between $1.3 billion and $1.8 billion will be needed just 
to maintain and operate the programs that are currently 
underway.
    The majority of our assistance programs are funded by 
USAID. There is just no way at all that an impoverished, 
corrupt government--and the Karzai government is corrupt--can 
come up with that kind of money, even if it wanted to. This 
concern is not limited to Afghanistan. Sustainable development 
became a popular slogan a decade or so ago, but we need more 
than slogans.
    I think a lot of what USAID does is well-intentioned, but 
not sustainable. We hear of programs that are not pursued 
because program officers are afraid to try something new and 
may fail, and I understand that. But if USAID is unwilling to 
try new things, we simply end up continuing to fund projects 
that produce mediocre results.
    Your budget requests include disproportionate amounts for 
Afghanistan and Iraq. That is wishful thinking.
    Billions of people today live in conditions that would be 
condemned if they were animals living in the United States. Yet 
these are human beings. Corrupt leaders plunder their 
countries' natural resources as though they were their personal 
bank accounts while their people scavenge for food.
    We are racing toward 9 billion people in the world. The 
demand for food, water, land, and electricity outstrips supply. 
We see what may be coming, and these are all things that you 
know as well as I, and you see them every day.

                           PREPARED STATEMENT

    We want to hear from you, but first, of course, from 
Senator Graham, who I should point out has followed the 
tradition of this subcommittee where both the chairman and 
ranking member have worked very closely together, just as 
Senator Gregg and I did and Senator McConnell and I did when 
each one of us was either chairman or ranking member.
    [The statement follows:]
             Prepared Statement of Senator Patrick J. Leahy
    Welcome Dr. Shah and thank you for being here. This morning we will 
discuss the United States Agency for International Development's 
(USAID) budget request for fiscal year 2013.
    It has been a little more than 2 years since you became USAID 
Administrator and began to address the serious cultural, management, 
and programmatic problems you inherited that have plagued USAID for 
years.
    We appreciate your efforts. You are taking steps to improve 
efficiency and reduce costs, which are reflected in your budget 
request. USAID also has plenty to be proud of thanks to investments 
that have improved agricultural productivity, increased the enrollment 
of girls in school, and saved countless lives from malaria and other 
diseases--to name just a few examples.
    We also recognize that, as much as we wish it were otherwise, as 
with any large government bureaucracy, change does not come easily at 
USAID. In fact, I would say that after 2 years and lots of hard work, 
you are at first base.
    Last year we included several provisions to support USAID's 
procurement reform. We have also asked for recommendations of other 
ways the Congress could amend the Federal acquisition regulations, if 
they impose onerous or unnecessary requirements on USAID.
    I have long voiced my concerns with the way a few large U.S. 
contractors and nongovernmental organizations (NGOs) obtain the vast 
majority of USAID funding. Years ago I created the Development Grants 
Program, a small fund to support innovative proposals of small, mostly 
local NGOs. But USAID has done what it does too often--take a good idea 
and either fail to implement it or redesign it in such a way as to 
thwart the original intent.
    I hope you can tell us what you expect from the changes to USAID's 
procurement process, because they need to fundamentally reform the way 
USAID does business. If these changes just end up shifting resources to 
big contractors in developing countries that is not the reform we seek.
    Another concern is the sustainability of USAID projects. The World 
Bank recently analyzed the sustainability of nonsecurity aid in 
Afghanistan and estimated that by 2014 between $1.3 and $1.8 billion 
will be needed just to maintain and operate the programs that are 
currently underway. The majority of those programs are funded by USAID.
    There is no way that impoverished, corrupt government can come up 
with that kind of money even assuming it wanted to.
    This concern is not limited to Afghanistan. ``Sustainable 
development'' became a popular slogan a decade or so ago, but slogans 
don't get you very far. USAID does a lot of good, but I worry that too 
much of what USAID does, while well-intentioned, is not sustainable.
    We also hear of innovative projects that USAID has not pursued 
because program officers are afraid to try something new and fail. I 
understand that, but we need to balance accountability of taxpayer 
dollars with a willingness to try promising new approaches to 
development. It may make less fiscal sense to continue funding projects 
that produce mediocre results, than it does to fund new ideas even if 
it means taking some risk.
    Your fiscal year 2013 budget request for USAID operating expenses 
and programs totals slightly less than what was enacted for fiscal year 
2012, including disproportionate amounts for Afghanistan and Iraq 
which, in my view, are more a reflection of wishful thinking than what 
can be effectively used.
    Today, we face similar fiscal challenges as we did last year. To 
those who think this budget is some kind of luxury or charity we can't 
afford, I would say take a look at the world around us.
    Despite progress in many countries, billions of people live in 
conditions that would be condemned if they were animals living here, 
while corrupt leaders plunder the country's natural resources as if it 
were their personal bank account. As the Earth's population races 
toward 9 billion and the demand for food, water, land, and electricity 
outstrips supply, it does not take a rocket scientist to foresee what 
the future may hold.
    We ignore these forces at our peril, and while USAID cannot 
possibly solve these problems alone we need to get the most for our 
money. I want us to work together to bring about the kind of 
transformative changes at USAID that this country, and the world, 
needs.

    Senator Leahy. Senator Graham.

                  STATEMENT OF SENATOR LINDSEY GRAHAM

    Senator Graham. Thank you, Mr. Chairman.
    That is very true. I have enjoyed working with you and your 
staff. And you know, being the ranking Republican, talking 
about foreign assistance is not popular, in general, but I 
think very necessary. And I just want to say I think you have 
done a great job.
    I think USAID is changing for the better, that you have 
thought outside the box, that your cooperation with the 
military in Afghanistan evolved over time to where USAID 
actually coordinates with it. Our civilian-military partnership 
in Afghanistan is as good as I have seen it. We are making sure 
that the dollars we spend on the USAID side fits into the 
strategy to withdraw and transition.
    In Iraq, I share Senator Leahy's concerns. I just--I am not 
so sure that the security footprint in Iraq can be maintained 
by a civilian contractor force, and I am very worried about the 
ability to get the dollars out the door into the hands of 
people and transform the country because of lack of security. 
And I couldn't agree with Senator Leahy more. We are going to 
have to redesign our footprint in Iraq.
    But as far as Africa is concerned, I really enjoyed my 
visit over there a month or so ago. I met your people on the 
frontlines. Between President Clinton and President George W. 
Bush, we have done a very good job.
    And I know Senator Leahy has been supportive of trying to 
get dollars from the American taxpayer to do three things--
create a counterweight to China. China is all over the 
continent of Africa, and their desire to help the people, I 
think, is secondary to their desire to own the resources that 
the people have.
    I do worry about safe havens for al Qaeda and other 
terrorist organizations developing in Africa. And the third 
thing is that make sure that our money is being spent to create 
economic growth in the future for American companies. We have a 
lot of efforts going on in Africa to deal with AIDS and malaria 
and other diseases where we have a transition plan.
    I want people to understand that the foreign aid budget is 
about 1 percent of the total budget and that under 
Administrator Shah's guidance and Secretary Clinton, we are 
trying to find ways to transition. It is not an endless, 
perpetual amount of money being spent to combat AIDS and 
malaria. We are creating systems that can be sustained in 
Africa by local governments, by the national governments.
    I applaud your efforts to come up with a transition plan. 
Some places would be quicker than others, but there is a desire 
to build people up so they can help themselves.
    On food security and agriculture development, I really 
applaud your efforts to try to get the Europeans to be more 
reasonable when it comes to the use of hybrid seeds and other 
farming techniques that will allow Africa to double or triple 
their food production, just by using modern farming practices. 
Your association with ONE, the Gates Foundation, and faith-
based organizations are the way to go.
    There is a lot of goodwill from the American people, apart 
from their Government. There are a lot of churches involved in 
Africa, a lot of private foundations all over the continent 
that are delivering quality services, and I want to make sure 
that we partner with the private sector in an appropriate way.
    As far as Afghanistan, sustainability is a question, but I 
think General Allen has a good military plan to withdraw. And 
post-2014, I do believe it is in our national security 
interest. The foreign assistance account is a tool to be used 
to protect America.
    There are many ways to protect this country. Sometimes it 
is military force, but it doesn't have to be that way all the 
time. Sometimes it is just helping the population with 
devastating problems like AIDS and malaria, building up a 
relationship with younger people which is going to take more 
than 1 day.
    And the chairman is right. The Karzai government is very 
difficult to deal with. Corruption is rampant. But having been 
there about a dozen times, I can tell you there is a new 
generation coming through the system that will have a different 
attitude about Afghanistan. This is going to take a while.
    People from age 25 to 45 have been mentored by our 
military, by our civilians, and there are better days ahead in 
Afghanistan. We are just going to have to push through and get 
a new generation of leadership, and it does matter what happens 
in Afghanistan.
    I worry tremendously about Pakistan. Pakistan, to me, is 
the place most likely to fall if we don't get it right in 
Afghanistan, and I look forward to hearing from Administrator 
Shah about what we can do in Pakistan with a deteriorating 
relationship.
    When it comes to Egypt, I want to be involved and be 
helpful, but the Egyptian parliament has made some statements 
that I would say at best are unnerving. And they have got to 
decide what they want to be. If you want to be a country that 
tears up the treaty with Israel and brings disdain upon the 
Israeli people and basically go back into the darkness in terms 
of the way women live and minorities in Egypt, that will be a 
choice you will make, and the price will be heavy for the 
future of the Egyptian people.
    You can have Islamic conservative governments. That is 
totally understandable to me. But those governments have to 
reach out not only to their neighbors, but the world at large 
and so that win foreign partnerships.
    So I think you have done a very good job. We can always do 
better, but I look forward to hearing from you about what we 
can do to help you and all those in your care and guidance.
    So, thank you and to those people who are out front in Iraq 
and Afghanistan and other places, I know you are accepting 
personal danger, but you are doing a good job for the country.
    Senator Graham. Thank you.
    Senator Leahy. Please go ahead, Dr. Shah.

                  SUMMARY STATEMENT OF DR. RAJIV SHAH

    Dr. Shah. Thank you, Chairman Leahy, Ranking Member Graham, 
members of the subcommittee.
    I am honored to join you to discuss the President's fiscal 
year 2013 budget request for USAID. I would like to start by 
thanking Senator Kirk and wishing him a continued speedy 
recovery. He has been someone who has spent time with me and 
has significantly supported our efforts and our agenda and our 
reforms.
    Chairman Leahy, Ranking Member Graham, on behalf of our 
agency, I really do want to thank you for the tremendous 
support and guidance you have offered to our agency and our 
efforts.
    Senator Leahy, you have, as you continue to do today, 
challenged us to reform the way we do business, to expand the 
way we think about development, to be open to new partners, 
innovations, and new ways of solving traditional development 
problems. We have tried to heed that call and, I believe, have 
made real progress, and we will continue to stay very focused 
on that agenda.
    Senator Graham, you have challenged us to work more 
effectively with our military partners, with the private 
sector, with the American public, including faith-based 
organizations. I think in all of those areas, we have taken and 
made real strides and will continue to stay committed to that 
path of engagement and cooperation.
    Two years ago, President Obama and Secretary Clinton called 
for elevating development as part of America's national 
security strategy and foreign policy approach. This required us 
to be more effective and responsive in a broad range of 
priorities.
    Frontline states, such as Afghanistan, Pakistan, and Iraq; 
quickly reacting to the political transitions in the Arab 
Spring; expanding our engagements in a concerted and forceful 
way with the private sector in order to enable them to be a 
counterweight to the way China and others engage in places like 
Africa; and to focus on delivering core results in our basic 
areas of business.
    Avoiding food insecurity and hunger; helping to improve 
health, in particular helping children survive; expanding 
access to water and sanitation and education to kids who are 
vulnerable; and responding to humanitarian and complex crises. 
And all the while staying focused on gender issues and on 
expanding the access to basic democratic governance and human 
rights.
    The President's fiscal year 2013 budget request enables us 
to implement an ambitious set of reforms we call USAID Forward. 
We have prioritized and focused and concentrated in many 
different parts of our overall portfolio.
    In global health, we have reduced the number of places 
where we will work on maternal health from 64 to something 
closer to 40 and concentrated resources in the 24 countries 
where we think we can get the most lives saved for the dollars 
we invest.
    In ``Feed the Future'', our signature food security effort, 
we have closed programs in Kosovo, Serbia, and Ukraine so we 
can reinvest resources in places like Tanzania, where we are 
seeing improved new seed varieties rapidly increase food 
production and a pathway to end child hunger and malnutrition.
    With guidance from the Quadrennial Diplomacy and 
Development Review and Presidential Policy Directive on Global 
Development (PPD), our budget prioritizes this set of basic 
reforms. We have taken the call to be more innovative in our 
programs. We have launched grand challenges in development that 
have helped us reach thousands of new partners and seek 
innovative new proposals to lower the cost of saving lives at 
birth or come up with new ways to use technology to ensure that 
all children have the opportunity to read and achieve basic 
literacy outcomes.
    In those two grant programs alone, we have literally 
reached more than 1,100 new partners who have sent in proposals 
and who we can now work with and engage with. We have launched 
the Development Innovation Ventures Fund, a portfolio of 
innovative investments, more than one-half of which use clear, 
randomized control methodologies, which is the gold standard to 
evaluate outcomes so we can study and learn from small and 
focused investments.
    We have put in place a new evaluation approach that has 
been recognized by the American Evaluation Association as the 
gold standard across the Federal Government, and they have, in 
fact, encouraged other agencies to adopt some of the principles 
and operational approaches we have put into practice.
    But most important, we are trying aggressively to change 
the way we partner, to partner more directly and in a more 
collaborative way with institutions of faith that do incredible 
work around the world, to focus on exactly what Senator Leahy 
mentioned, reforming how we do procurement to work with local 
institutions, including setting specific targets across our 
more than 80 missions to ensure that we move resources to the 
most efficient opportunities we have.
    This work, taken together, allows us to concentrate on some 
of our specific priorities, and I would like to spend a moment 
to just articulate what they are.
    First, we continue to maintain a priority for the frontline 
states and to expand our work in the Arab Spring. I look 
forward to being able to discuss some of the efforts we are 
making in those areas, but they are, I believe, responsive to 
the guidance and dialogue we have had over the past 2 years in 
that respect.
    Second, we are focused on global health. At $7.9 billion, 
this is the single largest item in the foreign assistance 
budget. This budget, we believe, will allow us to make and live 
up to the President and Secretary's extraordinary commitments 
in this space: to expand the PEPFAR program to treat 6 million 
patients, thanks to a significant reduction in the cost of 
treatment; to expand our efforts to save children's lives by 
pulling together the incredibly effective President's Malaria 
Initiative with a number of other programs designed to improve 
nutrition and child survival, especially in the first 48 to 72 
hours of life; and by focusing on seeking efficiencies in our 
maternal health programs so we could expand services while 
lowering costs.
    Next, our priority is food security. This budget includes 
significant resources for the President's ``Feed the Future'' 
program. We continue to believe that food security is a 
national security priority, and we believe we saw that come 
together just these past 6 months in the Horn of Africa, where 
the worst drought in more than six decades affected more than 
13 million people.
    USAID led a significant humanitarian response across 
international partners, feeding more than 4.6 million 
individuals and saving countless lives in the process. But we 
know that it is more efficient and more effective to help 
countries transition from food aid to being able to grow their 
own food, have their own modern food systems and agricultural 
systems, and achieve self-sufficiency.
    In the 20 Feed the Future priority countries, we have seen 
agricultural productivity go up at more than 8 times the rate 
that we see it in the rest of the world, with a 5.6-percent 
improvement in agricultural food production on an annual basis 
in those 20 countries.
    We believe those kinds of results will help move hundreds 
of millions of kids out of poverty and hunger over time if we 
stay focused, we partner with the private sector, we use new, 
effective, and proven technologies, and we bring our capacity 
to measure results and ensure that progress is being made 
especially for women, who continue to provide most of the labor 
in these farm economies.
    Finally, I would like to conclude with a thank you to our 
staff. Our teams work incredibly hard and take extraordinary 
risks. Those risks have been quite visible in recent weeks in 
Afghanistan, as our staff and our partners, many of whom work 
directly with counterparts in the Afghan Government and with 
civil society organizations, have had to take on new 
precautions to protect themselves.
    But we also have colleagues taking risks in all parts of 
the world. And just this morning, I got an email from one of 
our Foreign Service nationals who works in Zimbabwe to support 
democracy and civil society organizations in that difficult 
environment.
    He takes tremendous personal risks every day in order to 
just come to work, but he sent a note that said that he does 
this because he genuinely believes that the efforts we make are 
helping to make the world fairer and more just for his children 
and all of our children.

                           PREPARED STATEMENT

    And it is really that spirit that motivates our staff, that 
motivates our teams, and that has led to a tremendous amount of 
commitment to this set of reforms that we have discussed and to 
these priorities. And I look forward to taking your questions.
    Thank you.
    [The statement follows:]
                  Prepared Statement of Dr. Rajiv Shah
    Thank you Chairman Leahy, Ranking Member Graham, and members of the 
subcommittee. I am honored to join you to discuss the President's 
fiscal year 2013 budget request for the United States Agency for 
International Development (USAID).
    Two years ago, President Obama and Secretary Clinton called for 
elevating development as a key part of America's national security and 
foreign policy. Through both the Presidential Policy Directive on 
Global Development and the Quadrennial Diplomacy and Development 
Review, they made the case that the work USAID's development experts do 
around the globe was just as vital to America's global engagement as 
that of our military and diplomats.
    The President's fiscal year 2013 budget request enables USAID to 
meet the development challenges of our time. It allows us to respond to 
the dramatic political transformations in the Middle East and North 
Africa. It helps us focus on our national security priorities in 
frontline states like Afghanistan, Iraq, and Pakistan. And it 
strengthens economic prosperity, both at home and abroad.
    This budget also allows us to transform the way we do development. 
It helps countries feed, treat, and educate their people while 
strengthening their capacity to own those responsibilities for 
themselves. It helps our development partners increase stability and 
counter violent extremism. It supports those who struggle for self-
determination and democracy and empowers women and girls. And it helps 
channel development assistance in new directions--toward private sector 
engagement, scientific research and innovative technologies.
    I want to highlight how the investments we make in foreign 
assistance help our country respond to our current challenges, while 
delivering results that shape a safer and more prosperous future.
               efficiency, trade offs, and usaid forward
    While foreign assistance represents less than 1 percent of our 
budget, we are committed to improving our efficiency and maximizing the 
value of every dollar. American households around the country are 
tightening their belts and making difficult tradeoffs. So must we.
    Even as we face new challenges around the world, our budget 
represents a slight reduction from fiscal year 2012.
    We've prioritized, focused, and concentrated our investments across 
every portfolio. In global health, we propose to close out programs in 
Peru and Mexico as those countries take greater responsibility for the 
care of their own people.
    We've eliminated Feed the Future programs in Kosovo, Serbia, and 
Ukraine and reduced support to Europe, Eurasia, and Central Asia by 
$113 million to reflect shifting global priorities and progress over 
time by some countries toward market-based democracy.
    And we're keeping our staffing and overall administrative costs at 
current levels, even in the midst of a major reform effort. It is 
through that effort that I spoke about last year--USAID Forward--that 
we've been able to deliver more effective and efficient results with 
our current staffing profile and operating budget.
    Our budget prioritizes our USAID Forward suite of reforms.
    That funding allows us to invest in innovative scientific research 
and new technologies. Last year, our support of the AIDS vaccine 
research through President's Emergency Plan for AIDS Relief (PEPFAR) 
led to the isolation of 17 novel antibodies that may hold the key to 
fighting the pandemic. And we're working with local scientists at the 
Kenyan Agricultural Research Institutes to develop new drought-
resistant seed varieties of sorghum, millet and beans, as well as a 
vitamin-A rich, orange-fleshed sweet potato.
    It helps us conduct evaluations so we know which of our development 
efforts are effective and which we need to scale back. The American 
Evaluation Association recently cited our evaluation policy as a model 
other Federal agencies should follow.
    It allows us to partner more effectively with faith-based 
organizations and private companies. In fact, the Organization for 
Economic Co-operation and Development recognized USAID as the best 
amongst peers in driving private sector partnerships and investment.
    And through our procurement reform efforts, among the most far-
reaching and ambitious across the Federal Government, we are 
aggressively seeking new ways to work with host country partners 
instead of through more costly consultants and contractors. This effort 
will make our investments more sustainable and hasten our exit from 
countries, while cutting costs.
    For instance, in Afghanistan, we invested directly in the country's 
Ministry of Health instead of third parties. As a result, we were able 
to save more than $6 million.
    That investment also strengthened the Afghan health ministry, which 
has expanded access to basic health services from 9 percent of the 
country to 64 percent. Last year, we discovered the true power of those 
investments; Afghanistan has had the largest gains in life expectancy 
and largest drops in maternal and child mortality of any country over 
the last 10 years.
    In Senegal, we are working with the government--instead of foreign 
construction firms--to build middle schools at a cost of just $200,000 
each. That helps strengthen the government's ability to educate its 
people, but it is also significantly more cost effective than enlisting 
a contractor.
    When we do invest money in partner governments, we do so with great 
care. Our agency has worked incredibly hard to develop assessments that 
make sure the money we invest in foreign governments is not lost due to 
poor financial management or corruption.
    With your continued support of this effort, we can expand our 
investments in local systems while building the level of oversight, 
accountability, and transparency that working with a new and more 
diverse set of partners requires.
    The Working Capital Fund we've requested would give us a critical 
tool in that effort. The Fund would align USAID's acquisition and 
assistance to USAID's program funding levels through a fee-for-service 
model, so that our oversight and stewardship is in line with our 
program and funding responsibilities. The result will be improved 
procurement planning, more cost-effective awards, and better oversight 
of contracts and grants.
  supporting strategic priorities and strengthening national security
    We will continue to support the growth of democracies around the 
world, especially in the Middle East and North Africa where the 
transformative events of the Arab Spring are bringing down autocratic 
regimes and expanding freedom.
    State and USAID have requested $770 million for a new Middle East 
and North Africa Incentive Fund to respond to the historical changes 
taking place across the region. The Fund will incentivize long-term 
economic, political, and trade reforms--key pillars of stability--by 
supporting governments that demonstrate a commitment to undergo 
meaningful change and empower their people. State and USAID will 
continue to play a major role in helping the people of this region 
determine their own future.
    In Iraq, Afghanistan, and Pakistan USAID continues to work closely 
with interagency partners including the State and Defense departments, 
to move toward long-term stability, promote economic growth, and 
support democratic reforms. Civilians are now in the lead in Iraq, 
helping that country emerge as a stable, sovereign, democratic partner. 
Our economic assistance seeks to expand economic opportunity and 
improve the quality of life throughout the country, with a particular 
focus on health, education and private sector development. With time, 
Iraq's domestic revenue will continue to take the place of our 
assistance.
    In Afghanistan, we've done work to deliver results despite 
incredibly difficult circumstances. We established our Accountable 
Assistance for Afghanistan--or A3--initiative to reduce subcontracting 
layers, tighten financial controls, enhance project oversight, and 
improve partner vetting. And with consistent feedback from the Congress 
we are focusing on foundational investments in economic growth, 
reconciliation and reintegration and capacity building, as well as to 
support progress in governance, rule of law, counternarcotics, 
agriculture, health, and education. We continue to focus on the 
sustainability of these investments so they ultimately become fiscally 
viable within the Afghan Government's own budget.
    In Pakistan, our relationship is challenging and complex, but it is 
also critical. Our assistance continues to strengthen democratic 
institutions and foster stability during a difficult time. Crucial to 
those efforts is our work to provide electricity. Over the last 2 
years, we've added as many as 1,000 megawatts to Pakistan's grid, 
providing power to 7 million households. We've also trained more than 
70,000 businesswomen in finance and management and constructed 215 
kilometers of new road in South Waziristan, expanding critical access 
to markets.
                      the global health initiative
    Thanks in large part to the bipartisan support we've had for 
investments in global health, we're on track to provide life-saving 
assistance to more people than ever before. Although this year's budget 
request of $7.9 billion for the Global Health Initiative is lower than 
fiscal year 2012 levels, falling costs, increased investments by 
partner governments, and efficiencies we've generated by integrating 
efforts and strengthening health systems will empower us to reach even 
more people.
    That includes PEPFAR, which will provide life-saving drugs to those 
around the world afflicted with HIV and expand prevention efforts in 
those countries where the pandemic continues to grow. We can expand 
access to treatment and lift a death sentence for 6 million people in 
total without additional funds.
    We're also increasingly providing treatment for pregnant mothers 
with HIV/AIDS so we can ensure their children are born healthy. And 
because of breakthrough research released last year, we know that 
putting people on treatment actually helps prevention efforts--
treatment is prevention. All of these efforts are accelerating progress 
towards President Obama's call for an AIDS-free generation.
    Our budget request also includes $619 million for the President's 
Malaria Initiative, an effective way to fight child mortality. In 
country after country, we've shown that if we can increase the use of 
cheap bed nets and anti-malarial treatments, we can cut child death--
from any cause, not just malaria--by as much as 30 percent. In 
Ethiopia, the drop in child mortality has been 50 percent.
    Last year, we commissioned an external, independent evaluation of 
the Presidential Malaria Initiative's performance. That report praised 
the Initiative's effective leadership for providing ``excellent and 
creative program management''.
    And we will continue to fund critical efforts in maternal and child 
health, voluntary family planning, nutrition, tuberculosis and 
neglected tropical diseases--cost-effective interventions that mean the 
difference between life and death.
                            feed the future
    Last year, the worst drought in 60 years put more than 13.3 million 
people in the Horn of Africa at risk. Thanks to the humanitarian 
response led by the United States--and the investments we made in the 
past to build resilience against crises just like these--millions were 
spared from the worst effects of the drought.
    But as is well known, providing food aid in a time of crisis is 7 
to 10 times more costly than investing in better seeds, irrigation and 
fertilizers. If we can improve the productivity of poor farmers in 
partner countries, we can help them move beyond the need for food aid. 
And we can prevent the violence and insecurity that so often 
accompanies food shortages.
    That's why we are requesting $1 billion to continue funding for 
Feed the Future, President Obama's landmark food security initiative. 
These investments will help countries develop their own agricultural 
economies, helping them grow and trade their way out of hunger and 
poverty, rather than relying on food aid.
    The investments we're making are focused on country-owned 
strategies that can lift smallholder farmers--the majority of whom are 
women--out of poverty and into the productive economy. All told, the 
resources we're committing to Feed the Future will help millions of 
people break out of the ranks of the hungry and impoverished and 
improve the nutrition of millions of children.
    We're also leveraging our dollars at every opportunity, partnering 
with countries that are investing in their own agricultural potential 
and helping companies like Walmart, General Mills, and PepsiCo bring 
poor farmers into their supply chain.
    These investments are working.
    In Haiti--where we continue to make great strides thanks to strong 
congressional support--we piloted a program designed to increase rice 
yields in the areas surrounding Port-au-Prince. Even while using fewer 
seeds and less water and fertilizer, Haitian farmers saw their yields 
increase by almost 190 percent. The farmers also cut 10 days off their 
normal harvest and increased profit per acre. Today, that program is 
being expanded to reach farmers throughout the country.
    These results complement our work to cut cholera deaths to below 
the international standard. And we worked with the Gates Foundation to 
help nearly 800,000 Haitians gain access to banking services through 
their mobile phones.
    And in Kenya, Feed the Future has helped more than 90,000 dairy 
farmers--more than a one-third of whom are women--increase their total 
income by a combined $14 million last year. This effort is critical, 
since we know that sustainable agricultural development will only be 
possible when women and men enjoy the same access to credit, land and 
new technologies.
    Overall, since we began the initiative in 2008, our 20 target 
countries have increased their total agricultural production by an 
average of 5.8 percent. That's over eight times higher than the global 
average increase of 0.7 percent.
                          building resilience
    We all know that a changing climate will hit poor countries 
hardest. Our programs are aimed at building resilience among the 
poorest of those populations.
    By investing in adaptation efforts, we can help nations cope with 
these drastic changes. By investing in clean energy, we can help give 
countries new, efficient ways to expand and grow their economies. And 
by investing in sustainable landscapes, we can protect and grow 
rainforests and landscapes that sequester carbon and stop the spread of 
deserts and droughts.
    That work goes hand-in-hand with our efforts to expand access to 
clean water to people hit hard by drought. In 2010 alone, those efforts 
helped more than 1.35 million people get access to clean water and 2 
million people access to sanitation facilities. Increasingly, we're 
working with countries to build water infrastructure and with 
communities to build rain catchments and wells to sustainably provide 
clean water. We're currently in the process of finalizing a strategy 
for our water work designed to focus and concentrate the impact of our 
work in this crucial area.
                        strengthening education
    Last year, we made some critical decisions about how we strengthen 
global education. Since 1995, USAID's top recipients have increased 
primary school enrollment by 15 percent. But even as record numbers of 
children enter classrooms, we have seen their quality of learning 
sharply drop. In some countries, 80 percent of schoolchildren can't 
read a single word at the end of second grade. That's not education; 
it's daycare.
    The strategy we released last year will make sure that our 
assistance is focused on concrete, tangible outcomes like literacy. By 
2015, we will help improve the reading skills of 100 million children.
                               conclusion
    Thanks to these smart investments, every American can be proud that 
their tax dollars go toward fighting hunger and easing suffering from 
famine and drought, expanding freedom for the oppressed and giving 
children the chance to live and thrive no matter where they're born.
    But we shouldn't lose sight that these investments aren't just from 
the American people--as USAID's motto says--they're for the American 
people. By fighting hunger and disease, we fight the despair that can 
fuel violent extremism and conflict. By investing in growth and 
prosperity, we create stronger trade partners for our country's 
exports.
    And above all, by extending freedom, opportunity and dignity to 
people throughout the world, we express our core American values and 
demonstrate American leadership.
    Thank you.

    Senator Leahy. Thank you very much.
    I have met many of these dedicated people in places all 
around the world where often times they are working under very 
difficult circumstances.
    I noticed it was reported today that Thomas Lubanga, who is 
a rebel leader in Congo, had been captured, tried, and found 
guilty of outrageous crimes. Last week, 50 million people 
watched a YouTube video about Joseph Kony and the Lord's 
Resistance Army (LRA), who terrorized civilians in Central 
Africa for two decades.
    About 12 years ago, Tim Rieser from my staff went to Uganda 
to see what kind of aid we could bring to families whose lives 
were destroyed by Joseph Kony. You have been providing 
humanitarian aid to the victims, including the families and 
children who were abducted.
    USAID and State have expanded an early warning radio 
network for vulnerable communities. The Leahy War Victims Fund 
has been used to provide artificial limbs, wheelchairs, and so 
on. So we have been doing a lot for years, long before 
attention was brought to this, and I included up to $10 million 
for these programs in the last appropriations bill.
    I understand the administration supports expanding the 
State Department's Rewards for Justice program to cover war 
criminals like Joseph Kony. What do you plan to do with the 
2012 funds that we provided you?
    Dr. Shah. Well, thank you, Sir, for the question. I want to 
thank you for your incredible leadership on this issue for a 
much longer period of time than well before YouTube was even in 
place.
    And the Leahy War Victims Fund is one of the many tools 
that you have encouraged us to deploy over the past two decades 
to address this challenging issue including--the other tools 
include the international disaster assistance account and the 
development assistance account, both of which we have deployed 
aggressively over the last decade to try to meet needs that are 
created by an incredibly unjust situation.
    The video to which you referred has been seen by so many 
people, and it does highlight the basic actions and approach of 
LRA. Our approach has been to focus on humanitarian relief and 
recovery in places like Northern Uganda, which are now cleared 
in some degree of the LRA.
    We have seen internally displaced persons return to their 
communities, and we support those returns, providing people 
opportunities for education, employment, to re-enter their own 
economy, mostly by supporting agriculture, which is the primary 
economy in Northern Uganda.
    But we also know that there are efforts that need to be 
made in the Central African Republic, in the Democratic 
Republic of Congo, in South Sudan. And in those areas, we have 
expanded our efforts to support recovery, offering psychosocial 
support for children, offer humanitarian assistance ranging 
from food and water and other basic necessities, but also cash 
for work opportunities to be engaged in short-term employment, 
creating roads and helping their economies get back together.
    We remain very, very focused on this issue, and I just want 
to thank you and our partners, partners like Catholic Relief 
Service that is reaching 24 communities in South Sudan. 
Partners like Vodacom that are helping to establish cell towers 
that will enable a greater degree of protection.
    The program you mentioned around expanding radio access and 
programming to help warn communities ahead of time and a whole 
range of other activities, some of these things take some 
learning, as we are trying a lot of new things in order to 
offer protection to the population and to meet needs 
thereafter.
    Senator Leahy. Keep me posted on this, and please know that 
it is a priority and has been a priority for some time.
    We watch our children playing safely at playgrounds--it 
used to be my children, now my grandchildren. It is hard to 
conceive of something like that happening.
    Over the years, American taxpayers have provided tens of 
billions of dollars in economic aid to Egypt for programs 
administered by USAID. Very few Egyptians seem to know this. It 
has come out, in the last year especially, that apparently year 
after year the money was channeled through Egyptian Government 
ministries for programs that corrupt Egyptian officials took 
credit for.
    Now we see anti-Americanism rampant in Egypt. I agree with 
the comments Senator Graham made about Egypt earlier.
    We have seen the same thing in Pakistan after billions of 
dollars in United States aid went there. We are giving billions 
of dollars to these countries, but the American people who are 
paying for it often get no credit for it. A lot of it is 
siphoned off by corrupt officials. How do you respond?
    Dr. Shah. Well, I think our focus has been ensuring that 
the investments we make generate results. And I just want to 
start by saying that whether it is Egypt or Pakistan, I think 
when the American people see the actual results--28 percent of 
irrigated farmland in Egypt was created by USAID partnership, 
the water and sanitation system in Cairo, the number of girls 
in school, and a 30-year externally validated health student 
that showed the gains in women's health because of our 
partnerships. That said, it is critical that those gains are 
made more visible to people in the countries.
    That is why we are working more directly with civil society 
organizations and with local organizations. That is why we 
recently looked at just what our USAID press presence is in 
Pakistan and found that every month there are about 1,000 
references to USAID that are mostly positive in the news. That 
is often not enough to overwhelm the broader context, but----
    Senator Leahy. We should follow up on that because, as 
Senator Graham also said, getting foreign aid bills passed is 
not the most popular thing back home.
    The Budget Control Act of 2011 includes automatic 
reductions in mandatory and discretionary spending beginning in 
2013 if an additional $1.2 trillion in deficit reduction is not 
enacted by January 15, 2013.
    If no legislation is passed before 2013, the Congressional 
Budget Office estimates the fiscal year 2013 discretionary 
funding levels would be reduced by 7.8 percent. I understand 
the amount of the final reduction would be determined by the 
Office of Management and Budget using its own estimates.
    What is going to be the impact of a 7.8 reduction in 
USAID's fiscal year 2013 budget for operations and programs, 
and what preparations are you taking in the event this 
mandatory reduction is implemented?
    Dr. Shah. Well, thank you for the question.
    In terms of what impact a reduction like that would have 
is, as we have discussed previously, it would essentially shut 
down our ability to implement the reforms we are putting in 
place. USAID today has a $70 million per full-time equivalent 
(FTE) contract oversight capacity. The standard across the 
Federal Government is $35 million per FTE.
    We have been trying to build up our staff, our contracts 
officers, our procurement capacities, taking in consideration 
the recommendations of the wartime contracting commissions and 
what we have learned about what it takes to implement serious 
accountability to hold our partners to account and to ensure 
that we are more directly engaged with the local institutions 
that you spoke about earlier, Sir. And our ability to do those 
types of things in an environment where we are cutting staff 
and presence and resources by that percentage would be severely 
impeded.
    On the program side, the programs that would be most 
affected, I fear, are the ones that we all believe deliver some 
of the most extraordinary results. Efforts like our Global 
Health and our Feed the Future priorities since those have been 
the ones that have been the areas of most recent investment 
focus and growth.
    And so, we are working hard to come up with contingency 
plans, but we are also hopeful that scenario will not come to 
pass and believe that it would be inefficient if it did.
    Senator Leahy. Well, I hope it doesn't come to pass. As a 
bumper sticker slogan, talking about these kind of cuts sounds 
great. It can be very popular, especially in a Presidential 
election year. The reality is something else, so that is why I 
raise it.
    Senator Graham, please.
    Senator Graham. Well, I want to echo what you said about 
sequestration. It is the dumbest way in the world to achieve 
savings. It will decimate the military, $600 billion on top of 
the $480 billion we are trying to reduce spending by over the 
next decade. It is a blind hatchet approach to try to get our 
budget in balance.
    You may not know the answer to this, but you can get it to 
us later. Of all the USAID programs from around the world, you 
know, every dollar that you are responsible for, what 
percentage of the Federal budget would you think that would 
equate to?
    Dr. Shah. Well under, I think State and USAID together----
    Senator Graham. No, just USAID.
    Dr. Shah [continuing]. Is right around 1 percent, and USAID 
is about one-half of that total budget, even less than one-
half. So it would be probably less than one-half a percentage 
point.
    Senator Graham. Okay. Let us talk about that one-half a 
percentage point and what we get for it. In terms of China and 
Africa, what is your assessment of the Chinese involvement in 
the continent of Africa?
    Dr. Shah. It has been--the defining trend in Africa over 
the last decade has been a rapid increase in Chinese investment 
and subsidy for Chinese companies to invest. Most of those 
investments appear to be focused on resource extractive 
industries, and not all of them have followed, as you would 
imagine, the international norms and standards around 
transparency, around anti-corruption, around ensuring that 
benefits accrue to local populations.
    The United States continues to be tremendously popular, and 
it is----
    Senator Graham. Can I just stop you there?
    Dr. Shah [continuing]. In Africa because of our work.
    Senator Graham. In Ghana, I think we had an 80-something-
percent approval rating. And when I went all over Africa, the 
Chinese presence was dominant. Would you agree they are making 
a play for the continent of Africa, the Chinese?
    Dr. Shah. Absolutely.
    Senator Graham. They are trying to basically gather up the 
natural resources of a continent blessed with a lot of natural 
resources, and they are doing it in a way, don't you think, 
Administrator Shah, that instead of focusing on the population, 
making sure they can benefit from these resources, they are 
using some unsavory tactics, to say the least. Do you agree 
with that?
    Dr. Shah. Absolutely. Absolutely.
    Senator Graham. Eighty-five percent of the people in 
Tanzania, I was told, have no access to power from a grid or 
running water. Is that correct?
    Dr. Shah. I believe so.
    Senator Graham. Okay. But all of them have cell phones. 
Just about everybody I met had a cell phone, but no running 
water, no power. The continent of Africa is underpowered. Is 
that fair to say?
    Dr. Shah. Absolutely.
    Senator Graham. So one of the benefits of our engagement in 
Africa, helping people and trying to make the governments more 
responsible, responsive to the people is that somebody is going 
to provide the resources to help the whole continent achieve 
power, right?
    Dr. Shah. And coupled with African investment itself, yes.
    Senator Graham. So I would like that to be the United 
States, not China. There is so much business to be done in 
Africa between a continent and the United States on the food 
side. What opportunities exist for American companies to be 
involved in agricultural development in Africa? Is that a good 
business opportunity?
    Dr. Shah. I personally believe it is probably the best 
agricultural business opportunity that exists over the course 
of 20 or 30 years. We have done a lot at USAID to work better 
with business and to let American businesses be part of 
partnerships that help to tap into an African common market 
that is----
    Senator Graham. Will that create jobs here at home?
    Dr. Shah. They absolutely do, including our programs, for 
instance, in Ethiopia with Pepsi that now are trying to reach 
30,000 chickpea farmers, efforts to help United States 
entrepreneurs create and sell innovations like solar-powered 
flashlights to rural communities. Many of those are the 
innovative business models of the future, and either U.S. firms 
and entrepreneurs will be part of that large common market as 
it evolves, or we will cede that ground to others.
    Senator Graham. Is it fair to say 10, 15, 20 years ago that 
AIDS was rampant throughout the continent about to take out an 
entire generation of people, women and children?
    Dr. Shah. Certainly, and I think people saw that the 
structure of the epidemic specifically killed people who were 
in their productive earning years and, therefore, had outsized 
and destructive effects on the economies in Africa.
    Senator Graham. And mother-to-child AIDS growth was 
phenomenal. The children would be infected at birth. Is that 
correct?
    Dr. Shah. Yes. It was one of the leading causes of child 
infection and then morbidity.
    Senator Graham. Well, between Presidents Clinton, Bush, and 
Obama, how would you rate our efforts to control mother-to-
child AIDS transmission, and generally, are we turning a corner 
when it comes to AIDS in Africa?
    Dr. Shah. We are. And in fact, both the President and 
Secretary have made the commitment to ensure that our 
leadership continues to deliver in the future a generation free 
from AIDS. Today, we have a global commitment to completely 
eliminate mother-to-child transmission so no child is born with 
AIDS.
    That means treating pregnant women and----
    Senator Graham. What kind of results are we getting?
    Dr. Shah. Extraordinary results in that program. It is 
called Preventing Mother-to-Child Transmission. That is a 
highly efficient way to eliminate transmission to children.
    Senator Graham. I had a chance to go and see the program in 
action in Ghana and Tanzania and South Africa, and I was just 
astounded what a little bit of money can do spent well.
    On the malaria side, what kind of progress are we making to 
address this really devastating disease?
    Dr. Shah. Yes. I think the recent external data reviews of 
the malaria program have shown that it is by far the most cost-
effective way to save a child's life on the planet.
    Senator Graham. Now the Gates Foundation and ONE and other 
organizations, they are doing things apart from the U.S. 
Government. Is that correct?
    Dr. Shah. They are, but also in partnership with us. And 
through a unique partnership with the Gates Foundation and 
others called the Global Alliance for Vaccines, we were able to 
lower the cost of new vaccines by 70 percent and expand access.
    Senator Graham. Well, I am going to invite you to Clemson 
University, where they have a logistics graduate degree 
program, and they are coming up with a way to deliver vaccines 
in a more-efficient way, the actual delivery of vaccines to the 
people who need them.
    And we have a rule of law center we are developing at the 
University of South Carolina Law School, and I know USAID is 
very involved in rule of law development, particularly in 
developing frontline state nations. We will invite you down to 
look at that program.
    And Don Gressett, who served as a detailee, has been really 
great. So thanks for his services.
    Now when it comes to Iraq, I think Senator Leahy and I 
share a concern. How many people do you have in Iraq?
    Dr. Shah. Well, if you include our Foreign Service 
nationals, it is more than 100. If you look at just U.S. direct 
hires, it is closer to 40.
    Senator Graham. Okay. How much money are you intending to 
spend on Iraq?
    Dr. Shah. I would have to check the exact number. I think 
it was around $200 or $250 million.
    Senator Graham. What is the security environment like there 
now?
    Dr. Shah. I am sorry. The number for fiscal year 2013 is 
$263 million. The security environment is challenging. It is 
more challenging today than it was 6 months ago, and of course, 
as we are having this transition, we are also seeking and have 
been on a path of transition of the USAID programs. Iraq, 
increasingly and appropriately, is taking on more of the costs 
of implementing these programs themselves.
    Senator Graham. Right. I just want to echo what Senator 
Leahy said. I think our footprint in Iraq is too big. Fourteen 
thousand contractors providing security, most of the money goes 
to security, not to the actual training of the police and other 
programs. And we are just going to have to re-evaluate that in 
light of the changes.
    Now when it comes to Afghanistan, how many people do you 
have in Afghanistan?
    Dr. Shah. More than 400.
    Senator Graham. Okay. How would you evaluate the people 
that you interact with, younger people in Afghanistan? Do you 
have any insight to share with the subcommittee about what you 
see on the ground in terms of younger Afghan partners?
    Dr. Shah. Sure. Sir, I think that my interactions with our 
partners who fit that description are, of course, self-selected 
to be more creative, entrepreneurial, and capable. We have been 
impressed with the capacity of some of those individuals to 
lead efforts on behalf of their country.
    Some are in ministries, ministries like the Ministry of 
Agriculture, that have implemented to great success a program 
that is funding small- and medium-sized agricultural 
entrepreneurs that will largely be the source of economic 
growth for the next 5 to 6 years.
    Senator Graham. Senator Leahy mentioned something I think 
is very true. If you are an American out there and you are 
spending all this money on Afghanistan, you see the cross being 
burned and the President being burned in effigy, that is 
certainly not reassuring.
    But is there another side to Afghanistan? Are there things 
that do not make it on TV that we should know about and maybe 
be encouraged about?
    Dr. Shah. Well, there is that other side. There is this 
other side that is focused on the results that we have seen 
over the last decade. The largest reductions in maternal 
mortality anywhere on the planet, more than 7 million kids in 
school, 35 percent of whom are girls, whereas there were none 
in school previously. Ten or so percent annualized growth rate, 
and more than 1,800 kilometers of road that were created to 
support that economic growth, more than tripling energy access 
to the population and the business population.
    Those types of gains are critical to success, but the 
challenge going forward and as it has been the President's 
policy and what something USAID has really led on is ensuring 
that we make the shift to efforts that can be sustained over 
the long run.
    Senator Graham. Right. And we have a transition plan to put 
Afghans in control of Afghanistan. Is that correct?
    Dr. Shah. We do on the military side. We absolutely do on 
the development program side. I issued a sustainability 
guidance last year. We reviewed more than 65 programs. We found 
more than 20 that failed the sustainability review and 
restructured those programs to be more aligned.
    Senator Graham. I think that has been a great breakthrough, 
and I don't want to take too much more of your time here.
    Now this Joseph Kony that Senator Leahy spoke about, who 
is--I don't know how you would describe him other than just the 
worst of humanity. Is the Taliban in the same league as this 
guy?
    Dr. Shah. The things we have seen Joseph Kony do are 
brutal. The things that we have seen at different points in 
history the Taliban do are also very, very challenging. The 
thing that we stay very focused on as a development agency is 
ensuring that we build the basis for a sustainable, inclusive, 
and stable society. And that is why when there were no girls in 
school, now having millions of girls in school is such an 
important accomplishment that absolutely needs to be sustained.
    It is why, as we go forward with the President's policy to 
achieve a political and military strategy that allows us to 
bring troops home, we are very focused on protecting women's 
rights and protecting girls in particular and ensuring that we 
continue to support civil society and women leaders in 
Afghanistan, many of whom have done just extraordinary things 
in partnership with us over the last few years.
    Senator Graham. Well, thank you for your service and to all 
those under your command. You have done a great job.
    Thanks.
    Dr. Shah. Thank you.
    Senator Leahy. Here in this subcommittee we have supported 
USAID's procurement reform. We included several provisions in 
the fiscal year 2012 bill, including 2-year availability for 
operating funds, funding increases for procurement staff and 
training, and authority for USAID to limit competition to local 
organizations for awards less than $5 million.
    We supported USAID's effort to change its internal 
procurement policies. Your budget request proposes additional 
legislative changes and funding. What would they do beyond what 
we have already done?
    Dr. Shah. Well, first, thank you, Senator, for your 
extraordinary and specific support for procurement reform and 
for ensuring that America has a development agency that is 
capable of delivering value for every tax dollar that is spent 
in trying to make the world a better place.
    That is really what this procurement reform is about. In 
this budget, we request a working capital fund to ensure that a 
small percentage of allocated resources go in a dedicated way 
to building out the contracting capacity and the capacity for 
oversight and accountability so that we continue to make the 
transition from very costly and sometimes Western-dominated 
implementation mechanisms to local institutions.
    Because ultimately, our goal is to build capacity, not 
dependence. And ultimately, our goal is to identify those local 
leaders who have to have their own ownership of success, as 
opposed to doing things for them. And that takes effort. It 
takes doing risk assessments of local organizations to ensure 
we can protect taxpayer dollars.
    It takes a more active on the ground presence to make sure 
we are combating corruption and ensuring that money is not 
lost. It takes extra effort to monitor and evaluate programs so 
that we can guarantee that every major investment will have an 
externally valid evaluation public within 3 months of 
completion.
    Senator Leahy. Let me give you an example of where I think 
you can look. There is a small NGO working in an impoverished 
country, a place where most people have no access to modern 
healthcare. They have a corrupt and repressive government, but 
this small NGO has been implementing successful programs to 
diagnose and control malaria for 20 years.
    The Congress asked USAID to do more in this area. You 
solicited proposals. Somehow this local NGO was cut out of the 
picture, and two large U.S. NGOs were selected. One has 
experience in malaria but has never worked in the country. The 
other has worked in the country, but not on malaria.
    I am just wondering why we fund big NGOs that have no track 
record in a country if we have a small NGO that has a good 
track record?
    Dr. Shah. Well, honestly, Sir, we got here over decades. 
The agency over two decades has experienced 60-percent staff 
attrition and a 300-plus-percent increase in its programmatic 
responsibilities, most notably in dangerous, wartime 
environments in Iraq and Afghanistan.
    The combination of those two things led to contracting out 
of way too many core functions. Designing programs, searching 
for partners, engaging directly with local staff, learning 
about what is working, what is not working, using those 
learnings to then make changes and to insist on, document, and 
report on actual results. That is the basis of the USAID 
Forward reforms, but they are contingent upon our ability to 
rebuild the balance and rebuild our core staffing.
    I thank you personally for the support for the development 
leadership initiative and for the new Foreign Service officers 
and procurement officers we have been able to hire. And I can 
assure you that we have focused those additional energies and 
resources on precisely this challenge.
    Under the procurement reform, we will go from approximately 
9 percent in 2009 to approximately 30 percent in 2015 in terms 
of our total programmatic allocations to local institutions. 
And we are doing that in a careful, measured way.
    Every one of our countries has specific targets for helping 
to achieve that global aspiration. And when we get there, we 
will be a much more nimble, much more-efficient enterprise.
    Senator Leahy. It worries me and it is symptomatic of other 
places, and there is not a limitless amount of money. For 
Afghanistan, Pakistan, and Iraq, the President's fiscal year 
2013 budget request for USAID operations is $331 million, plus 
$84 million in overseas contingency operations funding.
    That is a 35-percent increase from 2011. It is a larger 
percentage every year of your total operating budget. The 
operating budget in fiscal years 2011 and 2012 for these 
countries was 17 percent of USAID's operating budget. For 
fiscal year 2013, the budget request is 22 percent of the 
total.
    We provided this administration and the one before it 
billions of dollars for Afghanistan. Think about what will 
happen when the funding tap dries up. You have issued a report 
on guidance and sustainability of assistance for Afghanistan, 
but your total request for fiscal year 2013, $1.85 billion, is 
only $87 million less than the fiscal year 2012 estimate.
    How is that sustainable? I acknowledge in many areas the 
Afghans have moved forward, but with a corrupt, anti-American 
Government, but are we approaching a point where all of USAID 
is going to be in Afghanistan, Iraq, and Pakistan?
    Dr. Shah. No, Sir. I don't believe we are. I believe that 
in Afghanistan, we, as USAID, are a small part of the 
investment this country has made in lives and in dollars. We 
are very, very small in comparison to the overall military 
expenditure. But we are a big part of helping to create the 
conditions that will allow our troops to come home safely and 
quickly.
    In order to live up to that mission, we have had to more 
than triple our staffing in Afghanistan to implement a program 
we call the A-Cubed, or Accountable Assistance for Afghanistan 
effort. We have had to go to 100-percent local cost accounting. 
We have had to do much more monitoring and evaluation and a 
significant number of program redesigns to ensure that we have 
a more-effective focus on sustainability.
    In just the last few years, we have seen Afghan Government 
revenues from local collections, customs collections, and 
collecting revenue related to energy more than triple. That is 
a trend that we need to absolutely stay focused on in order to 
ensure there is some degree of sustainability for the gains 
that we have all seen.
    Going forward, our focus will be sustainability, revenue 
collection, economic growth that is based in the agriculture 
and food sector for the next 5 to 7 years and the mining sector 
beyond that. And we believe we are putting forth budgets that 
will help lay the groundwork for that and allow the American 
people to save 10, 20 times the proposed expenditure because of 
our ability to draw down our troops.
    Senator Leahy. I supported our mission to go into 
Afghanistan because the mission was defined as to capture or 
kill Osama bin Laden. That was 10, 11 years ago. Shortly after 
that time, he apparently left Afghanistan and went elsewhere. 
We have been there ever since, and it is almost as though we 
overlook the fact, and I hate to use the term, but it is 
``mission accomplished''. We got Osama bin Laden.
    We have long since been supporting extensive nation-
building. Perhaps I can be convinced it can succeed. I haven't 
been yet.
    Let me ask you one last question and then yield back to 
Senator Graham. For several years, USAID has been implementing 
a program, which was begun by the Congress, which funds 
partnerships between United States universities and NGOs with 
counterparts in China to strengthen the rule of law and 
environmental health and safety.
    I have met some of the Chinese participants in this 
program.
    They are impressive and courageous people. They are 
standing up for environmental health and safety in China. This 
is not the safest thing to do. Some Members of the House have 
held up this funding on the ground that the Chinese Government, 
not USAID, should pay for it and it somehow hurts American 
businesses.
    Actually, I think it helps to level the playing field. 
American companies are contributing funds to support it. How do 
you feel about this program?
    Dr. Shah. Well, Senator, the fiscal year 2013 budget 
request does not include any funds for the Chinese Government. 
Our request is focused on assistance to Tibetan communities and 
to address the threats that may emanate from China with respect 
to pandemic diseases in a partnership with the Centers for 
Disease Control (CDC).
    So that is what we believe the priority is and believe 
that, in fact, we have gone even farther and worked through 
entities like the Global Fund to try and create a situation 
where China is no longer necessarily a recipient of funds, but 
is more of a global donor to those types of mechanisms that 
help effectively prevent disease spread.
    Senator Leahy. So you don't think there should be these 
partnerships between United States universities and NGOs in 
China to strengthen the rule of law in environmental health and 
safety?
    Dr. Shah. No, Sir. We do. I was just highlighting that 
those are not programs that run through in any way the Chinese 
Government. That they support----
    Senator Leahy. I understand that.
    Dr. Shah[continuing]. NGOs outside of the government. 
Sorry.
    Senator Leahy. Well, I am confused. Are you in favor of 
these programs or not?
    Dr. Shah. So I would have to come back to you on the 
specific program. I know that our efforts have supported NGOs 
in areas like human rights and rule of law outside of those 
efforts.
    Senator Leahy. Can you get back to me within 1 week?
    Dr. Shah. Absolutely.
    Senator Leahy. Sometimes when we ask these questions, they 
go--not just to you, but to everybody else--they go into some 
kind of a dark hole and with a feeling that perhaps there is a 
limited attention span on the part of some of us in the 
Congress. On this matter, I have a long attention span.
    So if you could get back to me within 1 week?
    Dr. Shah. We certainly will. And let me also say we do 
support these efforts. I just want to come back with something 
more specific. But we will do that within 1 week.
    [The information follows:]
    United States Agency for International Development Programs To 
        Strengthen Rule of Law and Environmental Safety in China
    The United States pursues a long-term strategy vis-a-vis China to 
protect and promote U.S. national interests and values. United States 
Agency for International Development's (USAID) fiscal year 2013 budget 
request is limited to funds for activities that preserve the distinct 
Tibetan culture and promote sustainable development and environmental 
conservation in Tibetan communities through grants to U.S. 
organizations, and for health programs to address pandemic diseases.
    With regard to your question about partnerships between United 
States universities and nongovernmental organizations (NGOs) to 
strengthen rule of law and environmental safety in China, consistent 
with congressional intent, USAID has operated programs since 2006 that 
focus on activities in environmental, administrative and criminal law, 
energy use and management, and regional trafficking in endangered 
species.
    These programs address development challenges that have regional 
and international reverberations for U.S. communities and companies.
    For example, USAID environmental law programs include:
  --The U.S.-China Partnership for Environmental Law strengthens and 
        improves China's environmental regulatory system through 
        partnerships involving United States and Chinese universities, 
        government agencies, and NGOs. The program works through 
        collaborative partnerships and training for lawyers, scholars, 
        law students, judges, regulators, and lawmakers.
  --USAID works with the Institute for Sustainable Communities, a U.S. 
        NGO, to establish environmental health and safety (EHS) 
        academies to train factory managers (paid for by trainees or 
        Chinese employers) to improve environmental safety practices 
        for Chinese workers and communities. EHS academies help ensure 
        that Chinese factories comply with international standards; 
        they help to level the playing field for U.S. companies and 
        reduce air pollution that reaches U.S. shores.
    Mr. Chairman, partnerships do not stop with NGOs and universities. 
USAID programs in China have leveraged important contributions--
financial and technical--from U.S. companies including General 
Electric, Honeywell, Wal-Mart, Alcoa, and Pfizer. GE alone has 
contributed more than $2.8 million for USAID's China programs. The EHS 
academies program plans to become fully self-sustaining and serves as 
an example of initial USAID seed funding that leads to sustainable, 
long-lasting impact.

    Senator Leahy. Thank you.
    Senator Graham.
    Senator Graham. Thank you.
    And these hearings are very informative and helpful, and I 
will give you my 2 cents worth about Afghanistan. I agree with 
Senator Leahy on a lot in this effort to craft a foreign 
operations account that is more focused on results, that allows 
us to transition to country control, no matter where we are at.
    But I have always believed that we are fighting an idea, 
not just a person, that killing bin Laden is a great 
accomplishment for the United States. President Obama deserves 
a lot of credit for making, I think, a very tough call.
    But we don't want to make him larger in death than he was 
in life, and the way I think we have become safe in the war on 
terror is not just killing the leaders of terrorist 
organizations, but empowering those who would fight these guys 
in their own backyard if they could. So I have come to conclude 
that about 80 percent of the people in Afghanistan have 
absolutely no desire to go back to Taliban control because it 
was a miserable life.
    You couldn't do anything other than what they told you you 
could do, and from a woman's point of view, it was just 
barbaric. And from the average young person's point of view, it 
was a miserable existence, and they have had a taste of it, and 
they don't want to go back.
    The problem is capacity. You have got to have capacity to 
meet will. That is why I think we can be successful in 
Afghanistan because, based on my view of the country, there is 
a lot of will to change Afghanistan. The problem is that their 
government, as Senator Leahy says, is very dysfunctional. This 
is trying to create a democracy out of 30 years of chaos is 
difficult.
    But when it comes to Afghanistan, how many times have you 
been, Director Shah?
    Dr. Shah. Well, Senator, I believe we met for the first 
time out there, and I appreciated that opportunity. I don't 
know, four, five, six? I would have to----
    Senator Graham. Is it your sense that the people of 
Afghanistan, as a collective body, want to move forward?
    Dr. Shah. That is my sense, of course.
    Senator Graham. Okay. And I believe it is in our national 
interest that they move forward. Any place they can move 
forward where the Taliban used to reign is a good deal. Places 
going back into Taliban control after an effort to squash them 
is probably not the right signal to send to Iran and other 
places.
    But let us talk about Egypt. The Arab Spring to me is a 
defining opportunity for change in the Arab world, and people 
mentioned Egypt to me, and Senator Leahy and I are very much 
concerned about what is going on in Egypt right now. And I had 
high hopes for the Arab Spring.
    The fact that Islamic conservatism is on the rise when you 
displace secular dictatorships is of no surprise to me because 
religious people were pretty suppressed in Libya, Tunisia, and 
Egypt. But what does concern me is the attitude that is 
emerging in some sectors of the political space in Egypt about 
the way to move forward.
    What advice would you give this subcommittee about how to 
engage Egypt and the Arab Spring in general?
    Dr. Shah. Well, thank you, Senator. Thank you for your 
recent efforts in Egypt to help advance our approach.
    You know, USAID has played a major role in Eastern Europe 
during political transitions and transformations and learned 
that it takes both time and persistence. There will be ups and 
downs along the way. And it takes flexibility, flexibility to 
invest in creating capable political processes in engaging 
beyond Government-to-Government engagements, but with local 
civil society.
    In supporting the private sector so there is a more dynamic 
set of opportunities----
    Senator Graham. Is that why we need to make sure you have 
democracy assistance, development programs in the USAID budget?
    Dr. Shah. That is, Sir. I think those programs have been 
uniquely important in this setting. This budget also has a 
request for a $770 million Middle East Incentive Fund that we 
intend----
    Senator Graham. Can I just point out to the subcommittee 
how important that fund is? Tunisia is, I think, one of the 
better stories in development and progress stories. They have a 
budget shortfall of about $1 billion. This fund you just 
acknowledged is trying to do a loan guarantee program so they 
can borrow money.
    Do you know the status of that? Are you familiar with that 
at all?
    Dr. Shah. I am. I am not sure of the immediate status of 
that, but we have been pursuing a number of efforts there, 
including helping to set up an enterprise fund. And this budget 
includes a request for that. And a number of other efforts we 
have taken to build public-private partnerships with 
information and communications firms to create more jobs.
    Senator Graham. Well, I know the subcommittee here is 
trying to reprogram $100 million--I can't remember from what 
account--to create a fund to challenge the rest of the world to 
invest in it as kind of a transition to your program, where we 
can come up with about $1 billion to help the Tunisians get 
through a budget shortfall.
    They seem to be very focused on reforming their economy, 
privatizing industries, and making a more free market situation 
in Tunisia. So I just want to let you know that I think the 
subcommittee on both sides would be very interested in trying 
to create some short-term assistance for Tunisia.
    What is your view of Tunisia? How does it seem to be going?
    Dr. Shah. Well, I had the opportunity to visit Tunisia and 
a number of the senior administration officials have. We are 
very optimistic about and President Obama and Secretary Clinton 
have directed us to really do everything we can to be helpful 
through this transition. They are, as you mentioned, putting in 
place tough, but important reforms to enable entrepreneurs to 
start businesses easier, to access capital more effectively.
    They have the potential to provide information technology 
services to the region and including some of the southern 
European countries. And so, they have benefited from 
partnerships we have helped establish with Microsoft and Cisco 
and others that will help employ more Tunisian youth.
    And we have helped their local civil society organizations 
create processes----
    Senator Graham. I think they want a free trade agreement 
with the United States. Is that----
    Dr. Shah. I am sure they do.
    Senator Graham. Yes, and I think that is encouraging. So I 
just want to echo what you are saying about Tunisia. I think we 
have a good strategy, but it is imperative that we deliver 
quickly when it really does matter. We have got to get these 
loan guarantees, agreements done so they can--people are 
hopeful. They are ready for change, and the government has got 
to deliver.
    And Tunisia has got an Islamic conservative coalition, but 
they seem to be embracing free-market economies and tolerance 
for minorities. So anything we can do in Egypt, Tunisia, and 
Libya, let us do.
    So thank you. If there is anything else the subcommittee 
can do to help be engaged in the Arab Spring, let us know 
because every 6,000 years you get a chance for democracy in 
Egypt. I hope it doesn't pass. I hope we don't fail, and I hope 
more than anything else, the Egyptian people do not fail on a 
chance to start over.
    And one last thought about Egypt. The parliament has said 
some things that are very chilling. It is probably more 
symbolic than it is substantive. But I think Senator Leahy and 
I, one Republican and one Democrat from different political 
spectrums and perspectives, really do want to engage the world 
in a constructive fashion. But we are not going to throw good 
money after bad.
    And if we are not welcome and if people don't want our 
assistance, we are not going to force it on them. So I hope we 
can find a way to make Egypt a showcase of what can happen when 
people have free choices to make.
    So thank you very much and continue the good work.
    Dr. Shah. Thank you.
    Senator Leahy. Thank you. I concur with that, too.
    The thing is we all want you to be successful everywhere 
you are. We also know that we only have a certain amount of 
money available and a certain number of people. We also realize 
that each country is different.
    Egypt, I think, is very important to that part of the 
world. They will have to decide what kind of government they 
want. I get frustrated when I see one more government that 
might become a theocracy. We have to watch it carefully.
    I was in Cuba a couple of weeks ago, and USAID has 
democracy and human rights programs there. Some have been 
controversial here in the Congress. Certainly they create a lot 
of controversy in Cuba. We all want to see a democratic Cuba 
where human rights are respected.
    I am one who feels, and in fact I have said this to Fidel 
and Raul Castro personally, that in some ways our embargo has 
been one of the best things going for them. They can have a 
failed economic and political system and blame it on us. What 
we get out of it, of course, is looking foolish to the rest of 
the world that a nation as powerful as the United States 
maintains an embargo on a country that poses no threat to us.
    I don't know what benefits there are, but we have what we 
have. If USAID has programs in Cuba that break Cuban laws, even 
though they may be laws you and I would totally disagree with, 
there are consequences.
    I do not agree with the kind of censorship that goes on in 
Cuba. I do not agree at all with their restrictions on the 
Internet and travel. I am not suggesting otherwise. I don't 
agree with what they do there, but neither do I agree with what 
we do with the embargo.
    Alan Gross, who is a USAID contractor, has served 2 years 
as a prisoner in Cuba for implementing a USAID program. The 
Cubans agree that he is not a spy, that he is not anything 
other than a USAID contractor. But his case has become an 
obstacle to progress on some issues between the United States 
and Cuba.
    Have you reviewed the program that he was involved with? 
Many of us will continue to work to get him released and back 
to his family. Have you considered expanding into areas in Cuba 
like private sector development?
    Dr. Shah. Thank you, Senator.
    First, thank you for mentioning Alan Gross' case and for 
your personal efforts to help him seek freedom and be free from 
his current situation.
    Senator Leahy. Senator Coons of Delaware and I met with 
him, and then I personally raised his case with President Raul 
Castro, the Foreign Minister, and the head of their National 
Assembly.
    Dr. Shah. Well, we very much appreciate those efforts. The 
State Department is leading our efforts to try to negotiate his 
release and has been very focused on that. We have also taken 
some special measures to support his family through what is a 
very difficult situation.
    We have reviewed that case, and based on that review and a 
more comprehensive review of our efforts, we have presented a 
budget request for $15 million this year that we believe is 
consistent with our law. It is consistent with basic 
international human rights conventions. And it is focused on 
those areas where we think our partners are going to be able to 
implement some of these programs.
    With respect to expanding efforts to private sector 
development, we are currently restricted from pursuing broad 
expansions in those areas. And I am very focused on making sure 
that if we are putting resources into something, we are 
confident the conditions are in place to deliver results. And 
it probably goes without saying under current circumstances, it 
seems that is not particularly the case in this situation.
    Senator Leahy. Does that include private sector 
development? I met with a number of people in Cuba including, 
ironically enough, representatives of foreign companies. These 
companies were from Germany, Canada, France, Mexico, and 
elsewhere. They all say with unity ``Please keep your 
embargo.'' They want to keep the United States out of Cuba 
while they get a foothold.
    They say it with only a little bit of a smile. But there is 
some private sector development in Cuba. Certainly not what you 
and I would want, but it is a change from just a few years ago.
    Will you look at whether that is an area we could expand 
into?
    Dr. Shah. We will certainly look into that and look forward 
to learning more about your views from your trip and who you 
met with and what your opinions are based on that.
    Thank you.
    Senator Leahy. I also went to Haiti. I have been there a 
number of times. I know you have. I wanted to see the progress 
that was made in downtown Port-au-Prince. It was different than 
it was a year ago. The progress is still slow, but it is more 
encouraging.
    I met with President Martelly. In past times when I have 
been there, I have heard over and over from people that they 
want a government that cares more about the Haitian people than 
it does about itself, and maybe they have that now. I hope they 
do. I look at all the lost opportunities after the earthquake 
when the government could not or would not even respond, though 
there was an enormous amount of aid available to make life 
better for so many people there.
    One thing that goes way beyond even housing or any other 
issues is the possibility of cholera. I am told that the danger 
remains high, and of course, if it were to happen there, it 
could spread to a number of other countries. The Dominican 
Republic, of course, as it is on the same island, but also 
Jamaica, Mexico, Brazil, and so on.
    Do you think the Haitians are prepared to respond to 
another cholera epidemic?
    Dr. Shah. Senator, I appreciate your raising Haiti. I think 
the progress has been extraordinary, given the circumstances, 
and we all want to see things move faster, but take some 
encouragement from what is happening in agriculture and 
establishment of improvements in education, improvements in 
access to mobile banking services and other types of 
innovations there, and some of the bigger private investments 
that are creating jobs in the industrial park in the north and 
hotel construction in Port-au-Prince.
    You mentioned President Martelly, and we continue to work 
closely with him, hope he will appoint a new Prime Minister 
soon because that is a critical position for our partnership.
    Senator Leahy. Incidentally, we urged him to move as 
quickly as he could on that.
    Dr. Shah. Great. And with respect to cholera, we were the 
major partner in rapidly moving resources to make sure that 
rural communities in particular had clean water, had access to 
medical services, oral rehydration, and brought the cholera 
disease, the case fatality rate down to I believe it is now 0.4 
or 0.5, which is below--or 0.04, which is below the--no, I am 
sorry, 0.4 or 0.5, which is below the 1 percent, which is the 
international target.
    Of course, if there is a new expansion or epidemic of 
cholera, that would place a tremendous amount of strain on 
their already-strained health services capacity. In the last 
situation, it was really the United States, USAID, and the CDC 
working together to address and tamp down cholera.
    And I suspect if it were to--if it were to go out and 
become an epidemic again, it would again require a significant 
external response in order to quickly save children's lives.
    Senator Leahy. I have talked with our ambassador there who 
is a very, very good ambassador, but he is about to leave and 
going to Dubrovnik, as I understand. It is something we may 
want to keep watching.
    Let me add one last thing on Feed the Future, and you have 
given more personal attention to that than anybody has. The 
administration has requested $1 billion in fiscal year 2013 as 
part of that initiative. The first page of the Feed the Future 
Web site says USAID is going to help tackle global food 
security. Nobody would disagree with that as a goal.
    We have provided more than $2 billion for these programs. 
Is this a 3-, 5-, or a 10-year initiative? How will we know 
that we are succeeding, and what is the timeframe that you see?
    Dr. Shah. Well----
    Senator Leahy. Incidentally, I support you on this. I just 
want to know how we measure success.
    Dr. Shah. Thank you, Senator.
    I think success for our Feed the Future partnership with 
countries and governments is measured in a number of ways. 
First, we need to make sure that other countries are also 
living up to the commitments that were made in 2009 at the 
L'Aquila summit. The United States is living up to them, and we 
are holding others to account in a very transparent and public 
way.
    Second, this initiative is in part different because we 
asked more of our partners. We said we will do business 
differently, partner with the private sector, measure results, 
invest in local institutions. But we want to see the kind of 
policy reforms that will generate extraordinarily effective 
results.
    And so, we continue to work on that aspect of the effort, 
and that is a critical ingredient. But the third and most 
important piece is we are measuring outcomes. So I can tell you 
today that the agricultural productivity growth rate in the 
countries where we are working is I think it is 5.6 percent, 
which is higher than the international average, which is 0.7 
percent.
    That is because we are investing in new technologies. We 
are working with women farmers. We are measuring outcomes. We 
have put in place a women's empowerment index, which for the 
first time across all partners will measure whether women are 
getting benefits from these programs, report on that in a very 
transparent way, and allow us to program against it.
    And most importantly, we measure the actual outcomes we 
care about, families that move out of poverty and children who 
are malnourished chronically, and we are starting to see 
reductions there. And my recent favorite example is Bangladesh, 
which for the first time certain parts of Bangladesh are 
becoming self-sufficient in rice. And that is leading to 
improved outcomes for children's nutrition.
    Senator Leahy. Years ago, I was chairman of the Senate 
Agriculture Committee, and I tended to upset some of the 
agriculture lobbies here in the United States because I was 
urging that we help countries grow their own food rather than 
buy it, especially when it means buying food in the United 
States and shipping it there. Some in the farm lobby loved 
that, of course, because it gave them a market.
    I remember there were a couple of places in Africa that I 
visited where they could raise food, but the market for it was 
20 miles away, and the condition of the roads was so poor it 
would take 2 or 3 days to travel that 10 or 20 miles. Of 
course, for perishable produce, this didn't work.
    Why don't we spend some money--we don't have to build the 
George Washington Parkway--to build a road like the dirt road 
that I live on in Vermont, where they could actually go 25, 35 
miles an hour and bring the food in an hour's time to market. 
That is just one example.
    Keep me posted what you are doing on food security. I 
applaud you for it.
    Dr. Shah. May I make a comment, Senator?
    Senator Leahy. Sure.
    Dr. Shah. You know, we agree entirely. I believe it is 8 to 
10 times less costly to help countries achieve food security 
and sustainability on their own self-sufficiency, as opposed to 
providing food aid during emergencies. Well, of course, we are 
always going to be there when people are struggling.
    Senator Leahy. Well, you have a tsunami. You have an 
earthquake. No country can move it as quickly and easily as we 
can.
    Dr. Shah. That is right.
    Senator Leahy. I want people to have the ability during 
normal times to be able to produce their own food.
    Dr. Shah. Absolutely. The other thing I would say, Sir, is 
that Feed the Future is a partnership across the entire Federal 
Government, and Secretary Tom Vilsack and the Department of 
Agriculture has been a major partner, working with us to 
improve phytosanitary standards in Central America so food can 
enter into Wal-Marts, value chains there, which is helping to 
move thousands of farmers out of poverty.
    We have partnered to address wheat rust, which is a disease 
in wheat that is starting to expand in Eastern Africa and 
threatens the food supply there, but could easily threaten the 
food supply anywhere else in the world. And our partnerships 
are helping to create international research efforts that are 
very modern and very effective and, ultimately, offer very 
direct protections for American farmers as well.
    The food supply is just much more interconnected today than 
it ever has been.

                     ADDITIONAL COMMITTEE QUESTIONS

    Senator Leahy. A stable food supply will bring countries 
that much further toward having a stable government and 
democracy.
    I will keep the record open for 1 week for the submission 
of written questions.
    [The following questions were not asked at the hearing, but 
were submitted to the Department for response subsequent to the 
hearing:]
            Questions Submitted by Senator Patrick J. Leahy
               afghanistan, pakistan, and iraq operations
    Question. The President's fiscal year 2013 budget request for 
United States Agency for International Development (USAID) operations 
in Afghanistan, Pakistan, and Iraq operations total $331 million, 
including $84 million in Overseas Contingency Operations funding. This 
is 35-percent higher than fiscal year 2011. Not only does the cost for 
USAID operations in these three countries continue to rise, it is 
becoming a larger percentage of USAID's total operating budget. In 
fiscal year 2011 and 2012 the operating cost for these countries was 17 
percent of USAID's total operating budget, and in fiscal year 2013 the 
cost is 22 percent of the total.
    How does this make sense given all the obstacles to implementing 
sustainable programs in these countries, and the pressing needs in so 
many other parts of the world?
    Answer. The fiscal year 2013 budget request for the Frontline 
States of Afghanistan, Pakistan, and Iraq reflects the level needed to 
maintain current on-going operations in countries critical to our 
national security. The fiscal year 2013 Operating Expense (OE) request 
for these countries is based on the most recent projections for 
security and other operational conditions and is not a result of new 
programs or staffing increases above approved levels. Since USAID's 
overall fiscal year 2013 OE request is a relative straight line of the 
fiscal year 2012 appropriation, as security and other operating costs 
increase in the Frontline States it takes up a larger percentage of the 
USAID's total operational budget. As an agency, we have made the 
necessary trade-offs to fully support operational requirements in 
countries that are critical to our national security.
    Development assistance to Afghanistan and Pakistan remains a 
critical component to supporting our core U.S. national security 
objective to disrupt, dismantle, and defeat al Qaeda, as well as to 
deny safe haven to it and its affiliates in the region. The fiscal year 
2013 OE request for Afghanistan and Pakistan reflects the cost of 
implementing and providing proper oversight of the program funds 
appropriated in prior years. We must provide and maintain a high level 
of oversight in order to prevent waste, fraud, and abuse. Given a 
vastly improved recruiting and hiring process it was only this fiscal 
year that USAID reached the full approved civilian surge level of 333 
OE funded American staff on the ground in Afghanistan. As a result of 
reaching the full approved staffing level this year, the fiscal year 
2013 budget request represents the first time USAID has fully budgeted 
for the civilian surge for an entire fiscal year. The full approved 
staff level of 333 OE-funded Americans includes a tripling of oversight 
staff, contract officers, comptrollers/financial management officers, 
and lawyers. We have also increased the number of field officers 
outside of Kabul, all of whom are working to improve project 
performance and oversight of U.S. taxpayer funds. USAID, working with 
State and the National Security Council-coordinated interagency 
process, is in the process of determining the most-effective transition 
of staff levels in fiscal year 2013 and 2014 ensuring that the staffing 
levels support the overall transition and the administration's civilian 
assistance objectives.
    In Pakistan, the staffing levels reflect the tripling of assistance 
since fiscal year 2008 in support of our core objectives in the region. 
We have increased the number of critical oversight staff (i.e., 
contracting officers, financial management officers, and lawyers). The 
increased number of United States staff also reflects United States 
presence in the Consulates in Lahore, Karachi, and Peshawar in order to 
increase the oversight and effectiveness of assistance program 
implementation. As assistance levels have tripled since fiscal year 
2008, we have doubled the number of United States direct hire and 
Pakistani staff over that same period in order to improve oversight. 
USAID's operational costs are increasing as the embassy and USAID 
address security concerns and other operational challenges.
    Based on the most recent projection for operations in the current 
fiscal year as reported in the Congressional Budget Justification 
(CBJ), USAID operating requirements in fiscal year 2012 were revised 
downward from $75.3 to $53.8 million. For fiscal year 2013, the budget 
request for Iraq is $66.2 million, which accounts for USAID now paying 
life-support costs for mission personnel through the Department of 
State's International Cooperative Administrative Support Services 
(ICASS) program, the costs of and estimates for which can vary 
frequently. However, USAID's actual operating costs for fiscal year 
2014 are likely to continue trending downward due to both operational 
efficiencies and changing circumstances on the ground in Iraq.
                       afghanistan sustainability
    Question. For years this administration and the one before it has 
provided billions of dollars in aid to Afghanistan with little thought 
for how the programs would be maintained once the funding tap dries up. 
I was encouraged that in June 2011, USAID announced its ``Guidance on 
Sustainability of Assistance for Afghanistan''. Yet your total budget 
request for the Economic Support Fund for Afghanistan for fiscal year 
2013--$1.85 billion--is only $87 million les than the current fiscal 
year 2012 estimate. Given how Afghanistan looks today I do not consider 
$1.85 billion a ``sustainable'' level. How has this guidance influenced 
USAID's programs?
    Answer. The Administrator's Sustainability Guidance is reflected in 
the significant changes in programming that we have undertaken in 
Afghanistan. A major phase of the interagency sustainability review of 
USAID's Afghanistan program recently concluded. USAID also conducted 
the sustainability review in consultation with the Afghan Government 
and in collaboration with other donors.
    While the overall level of spending in fiscal year 2013 is roughly 
in line with the fiscal year 2012 enacted level, that funding level is 
consistent with U.S. Government and expert views, including those of 
the World Bank, as to what is necessary to lay a foundation for an 
economically sustainable, post-transition Afghanistan. As a result of 
USAID's sustainability review, the country program is focused on 
fostering economic growth; enabling increasingly effective governance; 
and fostering a more resilient and capable population able to advocate 
for government services. If funding were to decline dramatically in 
fiscal year 2013, we believe there would be negative effects on both 
the transition in 2014 and on the viability of the gains in civilian 
development.
    Consistent with the principles of sustainability, USAID will 
continue to increase the proportion of its on-budget assistance to the 
Afghan Government, contingent upon the proper oversight and requisite 
safeguards, while drawing down investments in less sustainable forms of 
assistance.
    USAID will also continue the next phase of the sustainability 
review with the Afghan Government to ensure that programming reflects 
shared priorities, and that programs not addressing core objectives are 
phased down, eliminated, or assumed by other donors. For instance, the 
economy of Afghanistan lacks trained and skilled workers. Therefore, 
our assistance will increasingly focus on higher education and 
vocational training to ensure Afghanistan has the workforce required to 
grow its economy over the critical transition years.
    We are also focusing on strengthening government capacity to 
maintain roads, bridges, schools, and other infrastructure built over 
the last 10 years, rather than continuing to build new infrastructure. 
We are targeting economic growth and agriculture investments towards 
provinces where economic zones can generate the greatest number of 
private sector led business and job growth. In addition, we are 
reorienting our ``clear/hold'' stabilization programing from 17 
provinces down to the 9 that are most critical for the 
counterinsurgency effort. Finally, we are focusing our efforts in 
health and basic education on consolidating and maintaining the gains 
that have been made in these sectors rather than on expansion.
                                pakistan
    Question. Since 9/11 we have spent billions of dollars in Pakistan. 
Most has been military aid, but several billions have been for 
humanitarian and development programs administered by USAID. Yet the 
Pakistani people's view of the United States does not seem to have 
improved at all. In fact it may be worse.
    Are the programs we are funding in Pakistan sustainable; what are 
you doing to strengthen civilian democracy in Pakistan and with what 
results; and why has all this aid had so little impact on the 
Pakistanis' opinion of the United States?
    Answer.
                 sustainability and civilian democracy
    After a careful review of the Pakistan assistance portfolio during 
the first half of 2011, we have determined that it remains in the 
United States interest to continue to provide civilian assistance which 
addresses the priorities of the Pakistani people and their 
democratically elected representatives. Continuation of civilian 
assistance remains an important tool to furthering our objective of 
building more capable civilian state institutions, fostering economic 
growth, and building non-state institutions that can serve as checks on 
political and military power. It also demonstrates United States 
staying power in the region by empowering the middle class and other 
drivers of long-term change in Pakistan. Despite challenges, over the 
long-term, a tolerant, democratic, and economically stable Pakistan 
both benefits the Pakistani people and advances United States national 
security, as well as security in the region.
    Our approach of providing a substantial percentage of the country 
program in the form of local direct assistance contributes to 
sustainability by strengthening the capacity of those ministries of the 
Government of Pakistan, in provincial government, and in other 
important entities with whom we work, such as the FATA Secretariat. 
Similarly, our work with Pakistani nongovernmental organizations (NGO) 
builds capacity and sustainability in civil society. For example, we 
have worked closely with the FATA Secretariat to strengthen their 
financial management and procurement mechanisms, but more broadly 
strengthen their ability to communicate with constituents and be more 
responsive to the people of the FATA. Another example is our work in 
Sindh Province. USAID will be helping the Sindh Department of Education 
manage resources and monitor school construction. This is essential to 
ensuring results can be maintained and local governments can become 
responsible for service delivery.
    Beyond governmental capacity-building, our multi-sectoral strategy 
aims to build long-term sustainability within important sectors, such 
as the energy sector. The U.S. Signature Energy Program in Pakistan has 
invested in policy reform, capacity building and efficiency 
improvements to reduce power losses and increase revenues, as well as 
targeted infrastructure investments to increase electricity generation. 
This effort has yielded significant results. By the end of 2013, these 
investments will have added 900 megawatts (MW) of power to the grid, 
including the completion of the Gomal Zam Dam in South Waziristan, one 
of Pakistan's restive tribal areas. Going forward, we will continue to 
support infrastructure projects but, complementing those infrastructure 
programs, U.S. efforts will also help GOP institutions build the 
capacity needed to manage the power sector effectively and implement 
policy reforms that will strengthen commercial performance in the 
short-term and increase access to power in the mid- to long-term. These 
efforts will be undertaken through ongoing technical assistance and 
implementation of improved commercial operation of power distribution 
companies and demand-side load management initiatives.
    We will also continue important cross-cutting activities that 
strengthen governance, transparency, and gender equality through 
programs such as the Political Parties Development Program, the Anti-
Fraud Hotline, and the Gender Equity Program.
    In addition, we are working to expand the ability of civil society 
to engage in government oversight and policy advocacy, combat 
corruption, improve the status of women, and address the pressing needs 
of communities. For example, the Political Parties Development Program 
will work to improve the democratic performance of political parties to 
strengthen their ability to address constituent needs and grass-roots 
concerns by helping parties conduct their own research, analysis, and 
training for the formulation of increasingly responsive and informed 
platforms and policies, as well as implement internationally recognized 
standards for internal democracy and transparency. This work builds on 
previous USAID investment in Pakistan's democracy and governance that 
continues to provide long-term sustainable benefits. For example, 
USAID's prior work with the Election Commission of Pakistan, including 
improving and updating Pakistan's voter registry, will be essential to 
the integrity and legitimacy of upcoming general elections that are due 
no later than May 2013. Those elections would mark the first civilian 
transfer of power in Pakistan's history.
                             public opinion
    Pakistani public opinion of the United States has historically been 
extremely low for a variety of reasons. During 2011, several events 
occurred--Wiki Leaks, the Raymond Davis incident, May 2, and the 
November cross-border incident--that have provided further challenges 
to the effort to improve Pakistani public opinion of the United States.
    We have continued to implement a strong branding policy in 
Pakistan, as detailed in a briefing provided for your staff last year. 
In 2012, USAID will focus efforts on raising Pakistani awareness of 
United States assistance. A recent USAID-funded study suggests that 64 
percent of Pakistanis are not aware of USAID at all and 86 percent are 
not aware of specific USAID projects.
    While USAID does not anticipate that increased awareness of United 
States civilian assistance will dramatically change historic trends in 
Pakistani public opinion of the United States, we believe increased 
awareness can have a long-term impact on public opinion. Past 
experience shows that greater awareness of U.S. civilian assistance 
does help improve overall perceptions of the United States.
    Accordingly, USAID is working closely with the Embassy Islamabad 
Public Affairs Section to positively message United States civilian 
assistance and increase Pakistani public awareness. The USAID mission 
in Pakistan has contracted with one of Pakistan's leading media groups 
to design and implement integrated information campaigns, primarily 
using television and radio as a vehicle. USAID runs a weekly Urdu 
language radio show that features USAID projects in Pakistan and is 
broadcast across 70 percent of the country. We have also created a 
series of documentaries about our projects, which are being broadcast 
on local TV stations. Additionally, USAID has engaged a local research 
company to conduct public opinion research that will be used to inform 
our strategic communications efforts and evaluate its effectiveness.
    While our relationship with Pakistan is complex, Pakistan's future 
remains vital to our national security and regional interests. As 
challenging as the last year has been, we have many shared interests, 
and it is important we continue to find a way to act on those 
interests, even as we work through difficult issues.
                     cuts in global health funding
    Question. The President proposes to cut funding for the neglected 
tropical disease program from $89 million in fiscal year 2012 to $67 
million in fiscal year 2013. These diseases afflict the poorest people 
in the world. I am told that more than 532 million neglected tropical 
disease treatments have been distributed in 21 countries since fiscal 
year 2006, but this cut would cause a sharp drop in the number of 
people treated and in the number of countries served. The President 
also proposes to cut funding for maternal and child health by $27 
million, and for malaria programs by $31 million. We have worked hard 
for years to build up these programs. Why do these cuts make sense?
    Answer. In light of the constrained fiscal environment, USAID made 
difficult decisions in the development of the fiscal year 2013 budget.
    For the Neglected Tropical Disease (NTD) program, USAID remains 
committed to the control of NTDs and the advances made by this program 
and will strategically plan resources to ensure the greatest outcomes 
of the funding provided for this purpose.
    USAID's NTD program has expanded from five countries, when the 
program began in 2006, to 20 countries in 2012. To date, the program 
has delivered more than 500 million NTD treatments to 200 million 
people. Documentation of control and elimination of the targeted 
diseases on a district-level basis is now underway. In order to 
continue toward national level control and elimination, USAID will 
continue to prioritize those countries closest to elimination.
    USAID's NTD program leverages billions of dollars' worth of 
pharmaceutical donations each year. Pharmaceutical partners have 
significantly increased their donations because of the demand USAID's 
support for treatment programs has created. USAID will continue to 
advocate for other partners to increase their support and commitments 
to NTDs so the gains made to date are not lost and we can continue to 
maximize the leverage from these pharmaceutical partners.
    Every year in developing countries, 7.6 million children younger 
than age of 5 die, two-thirds of which are preventable. USAID goals are 
to reduce under-5 mortality by 35 percent and maternal mortality by 30 
percent across assisted countries. Substantial mortality reduction for 
mothers and children in the developing world is the result of a 
strategic use of resources from donors, governments, and families 
themselves. Mortality reductions are achieved by USAID investments in 
maternal and child health (MCH), malaria, nutrition, and family 
planning programs. USAID's maternal and child health resources are 
focused in the 24 MCH priority countries under the Global Health 
Initiative, which account for more than 70 percent of under-5 
mortality.
    In fiscal year 2013, USAID will expand investment in vaccines 
through our contribution to the Global Alliance for Vaccines and 
Immunization (GAVI Alliance), where the U.S. Government will take 
advantage of the ability to leverage resources from other donors and 
increase the effectiveness of this investment. Immunization programs 
presently prevent approximately 2.5 million under-5 deaths each year. 
By expanding the coverage of existing vaccines and introducing new 
immunizations, we believe we can save the lives of 4 million children 
over just the next 5 years. To do this, we need to deliver routine 
vaccines in new combinations, as well as introduce new vaccines against 
childhood killers, which includes acute respiratory infections and 
diarrheal disease to all children, and especially hard to reach 
children who are presently not receiving any vaccinations. The impact 
of the new pneumococcal conjugate vaccine, which protects against acute 
respiratory infections, could reduce the deaths from childhood 
pneumonia by up to 500,000 every year. Similarly, the rotavirus vaccine 
that combats diarrhea could save 300,000 children who die every year 
from extreme diarrhea.
    Fiscal year 2012 increases in funding for the President's Malaria 
Initiative (PMI) have allowed for the expansion of activities and 
geographic coverage within both Nigeria and the Democratic Republic of 
the Congo (DRC), which together account for almost one-half of all 
malaria cases in Africa, while maintaining coverage and sustaining 
gains in the remaining PMI countries. Further expansion of program 
activities in Nigeria and the DRC will be possible with the fiscal year 
2013 budget request level. PMI will continue to collaborate closely 
with other donors and partners to seek cost savings and sustain the 
gains achieved in focus countries.
               joseph kony and the lord's resistance army
    Question. Your fiscal year 2013 budget request does not mention the 
Lord's Resistance Army (LRA) or anything about implementing the LRA 
Disarmament and Recovery Act. Is that an oversight? What more could be 
done to help Kony's victims recover, to support the early warning 
network and the disarmament and reintegration of former LRA combatants, 
especially child soldiers?
    Answer. While a specific LRA line item is not included in the 
fiscal year 2013 budget, USAID will continue to assist those affected 
by the LRA in Uganda, the Central African Republic (CAR), the 
Democratic Republic of the Congo (DRC), and South Sudan with 
humanitarian and development assistance in fiscal year 2013. USAID's 
fiscal year 2013 CBJ includes approximately $82 million for 
reintegration, recovery and development of conflict-affected 
populations in Northern Uganda, including 1.8 million people who had 
been displaced by the LRA. USAID's fiscal year 2013 budget request also 
includes funding for development programs in South Sudan, a portion of 
which will be in LRA-affected areas (the southwestern region of the 
country) and could benefit individuals affected by LRA violence. USAID 
assistance in Western Equatoria State includes construction of feeder 
roads that will enable agricultural products to get to market, market 
electrification assistance, basic education services, primary 
healthcare delivery, English language instruction via radio programs, 
technical assistance to improve the quality of the water supply in the 
area, and fertilizer and seed distribution programs.
    USAID will continue to utilize humanitarian assistance funds to 
address emergency needs in the DRC, CAR, and South Sudan related to the 
impact of LRA violence, including food security, economic recovery, 
health and protection assistance, as well as continuing reintegration 
assistance for children formerly abducted by the LRA. USAID, in 
conjunction with the Department of State's Bureau for Population, 
Refugees, and Migration (PRM) will continue to monitor the humanitarian 
needs of LRA-affected communities and deliver needs-based humanitarian 
assistance throughout the region. In addition, we have launched a new 
Counter-Trafficking in Persons policy and are elevating our focus on 
trafficking in and around conflict areas; we will be particularly 
focused on the DRC.
    Question. How do you regard the potential for social media to 
inform the public and rally support in response to crises--whether to 
stop the effects of climate change, punish war criminals in Sri Lanka, 
or some other compelling issue?
    Answer. USAID recognizes that social media is a proven catalytic 
force in global politics and requires timely, consistent, and relevant 
communication to be effective. Social media has great potential to both 
inform the public and rally support around a cause, and when harnessed 
correctly, positions USAID to be truly effective in engaging directly 
with myriad development stakeholders. In times of immediate crisis, 
like natural disaster or conflict situations, user-generated social 
media content often provides the world with the first glimpses of the 
disaster. These on-the-ground testimonials can be vital in rallying 
support for direct action, thus resulting in a timelier and ultimately 
more-effective response to distressed areas.
    With longer-term crises, like famine, drought, or public health 
issues, a more measured and intentional approach can and should be 
taken. Social media provides a streamlined, yet far reaching, avenue 
for engaging the public in the places where they both consume and share 
content within their immediate circles of influence and beyond. A 
strong social media campaign can leverage the critical opportunity to 
reach not only our natural audiences, but their extended audiences as 
well. The primary key to that virality is providing timely and relevant 
content of a quality that is worth sharing.
    To that end, USAID partnered with the Ad Council in September 2011 
to raise awareness of the serious plight of more than 10 million people 
who have been at risk from the famine, war, and drought affecting the 
Horn of Africa. Through this partnership, USAID produced several public 
service announcements (PSAs), which featured celebrities, professional 
athletes and well-known personalities, and have aired nearly 20,000 
times, reaching an audience of more than 45 million people. These same 
PSAs garnered more than 150 million forward actions through Facebook, 
Twitter, email, and YouTube, and increased attention to and support for 
the efforts to ameliorate the situation in the Horn of Africa.
    Internationally, USAID's missions utilize various social media 
platforms with increasing regularity, and within the last year, USAID 
has seen an exponential increase specifically with engagement via 
Facebook and Twitter accounts. Recognizing the need to engage with 
development stakeholders in a meaningful way through the social media 
realm, USAID is actively working toward institutionalizing demonstrated 
successes and best practices by supporting its missions' use of these 
platforms. Further, the State Department (Embassy Public Affairs 
Sections) and USAID (Communications Offices) work together in the field 
to improve their communications collaboration and develop cohesive 
strategies that incorporate USAID outreach efforts, leverage different 
networks, and reach relevant target audiences. This information is also 
shared with the USAID Washington Social Media team to further promotion 
via domestic audiences.
                       development grants program
    Question. I started the Development Grants Program (DGP) several 
years ago to provide a relatively small amount of money--$45 million 
out of a total Development Assistance account of more than $2 billion--
to provide small NGOs with grants of less than $2 million for 
innovative proposals. The purpose was to support mostly local NGOs that 
cannot compete for big USAID grants. Unfortunately, USAID did not 
implement the program as intended.
    One of the key goals of your procurement reform is to be able to 
support more grants to smaller NGOs. But given your track record with 
the DGP, it is hard to be optimistic. Why can't these DGPs be made 
available for projects in any sector--agriculture, environment, 
education, democracy and governance, water and sanitation, you name 
it--at any USAID mission that receives a proposal that qualifies?
    Answer. In its first 3 years of programming, the DGP has been 
successful at broadening the USAID partner base by providing direct 
grants to 38 small U.S. private voluntary organizations and 104 small 
local NGOs, the majority of which had not received any prior direct 
USAID funding. In addition to providing small grants, the program 
continues to provide capacity building to strengthen the organizations 
and provide critical program support to missions.
    DGP is valued by missions and has become an important way that 
missions directly engage with small nontraditional partners that have 
access to underserved communities. In many instances, DGP relationships 
have grown into long-term partnerships supporting core mission goals.
    In Zambia for example, under the DGP, a local NGO implemented a 
Water and Sanitation program in schools which increased sustainable 
access to safe drinking water and sanitation facilities, improved 
hygiene, and addressed environmental issues that impacted education 
quality and learner performance. The structured and consistent support 
to the local NGO under the DGP resulted in effective planning, 
implementation and monitoring of activities as well as a strong 
collaboration and positive working relationship with government 
officials, schools, communities and other key stakeholders. Valuing the 
local NGO's reach into the most rural communities, the mission, with 
its own funds, more than doubled the size of the award to the 
organization and now considers them as a strong development partner in 
its Water and Sanitation program.
    All of USAID's programs must address the balance between 
development priorities and budget realities. In the context of the DGP, 
USAID finds that mission capacity to program through local 
organizations and a greater number of smaller partners is increasing to 
meet the same goals. Further, unlike the first 3 years of programming 
in which all of the DGP funds were encumbered with sector directives, 
in fiscal year 2012, more than one-half of the appropriated funds will 
not be required to be used with specified sectors.
                                 haiti
    Question. Some public health experts say the international response 
to the cholera epidemic was fraught with problems, the incidence of 
cholera in some parts of Haiti today remains among the highest in the 
world, the danger of another cholera epidemic in Haiti is high, and the 
country is far less prepared to respond than it was a year ago. If 
cholera were to spread to Jamaica, Mexico, or Brazil, it could be 
disastrous. How do you respond to these concerns? Do you believe the 
United States Government's support for cholera management in Haiti is 
sufficient to prevent another epidemic; and, if so, why?
    Answer. Experts view the rapid spread of cholera within the 
region--with the high mortality rates seen during the early onset in 
Haiti--as highly unlikely, in large part, because sanitation systems 
are more advanced, and access to healthcare is greater.
    As the rainy season approaches, our focus continues to be on 
supporting the Haitian Government in the prevention and treatment of 
cholera. The U.S. Government has integrated cholera response into our 
long-term health programming, ensuring that we are helping to combat 
the disease as long as it continues to threaten the country. The United 
States Government has also taken precautions by prepositioning cholera 
response commodities throughout Haiti. Though spikes in cases are 
possible with the onset of the rainy season, the fact that the case-
fatality rate has remained less than 1 percent for several months is 
good indication that people understand what to do when symptoms occur 
and that the system itself is able to manage the cases that occur.
    Since the cholera epidemic began a year-and-a-half ago, USAID has 
provided cholera treatment through our health service delivery sites, 
which provide access to care for approximately 50 percent of the 
Haitian population. Today, the U.S. Government continues to manage the 
epidemic primarily through our basic health services. All sites in 
USAID's network are capable of treating new cholera cases. All staff 
are appropriately trained, and commodities such as oral rehydration 
salts and IV fluids are on hand to treat patients.
    In addition, the U.S. Government continues to support improvements 
in access to safe drinking water, improved sanitation, and hygiene for 
the people of Haiti, as these represent long-term solutions to the 
cholera epidemic and to many other public health problems that hinder 
the health of the Haitian people and the development of the Haitian 
nation. To date, the U.S. Government has spent more than $73 million to 
fight cholera in Haiti.
                protecting forests and indigenous people
    Question. Last year, we transferred the position of Advisor for 
Indigenous People from the State Department to USAID. Do you know if a 
search is underway to fill that position? It is important because USAID 
gets involved in everything from building roads to logging in tropical 
forests which directly impact indigenous people, and their governments 
often run roughshod over their rights and territories. We are seeing 
that today in Peru, where the Amazon is being carved up for oil, gas 
and logging concessions, and I want to be sure there is a person at 
USAID with authority who indigenous people have access to who will look 
out for their interests.
    Answer. USAID shares your commitment to elevating the interests of 
indigenous peoples, which are currently integrated into many areas of 
programming, including land tenure and property rights, forestry and 
biodiversity, resource governance, rule of law, human rights, and 
community health programs.
    With respect to the position of the Advisor for Indigenous Peoples 
Issues, which was transferred to USAID with the passage of the fiscal 
year 2012 appropriations bill, we are working at the highest levels of 
USAID to determine the appropriate scope of duties for this position, 
its optimal home within the organization, and associated resource 
requirements. We look forward to consulting with your staff to move 
this forward as expeditiously as possible.
                           evaluation policy
    Question. USAID adopted a new evaluation policy in January 2011 
which changed the requirements for evaluating the effectiveness of 
USAID projects and programs. I agree that the way USAID evaluates the 
effectiveness of its programs needs to be more credible, but I worry 
that the emphasis on quantitative analysis is overly-simplistic and 
focuses on short-term impact, rather than longer-term outcomes which 
can be influenced by many factors. I am not sure your results will be 
accurate. How do you respond?
    Answer. USAID's Evaluation Policy has been recognized by the Center 
for Global Development for ``fostering a new culture, of transparency 
and learning.'' The American Evaluation Association has also cited the 
policy as a model other Federal agencies should follow. USAID's 
Evaluation Policy was created to recommit USAID to ``obtain systematic, 
meaningful feedback about the success and shortcomings of its 
endeavors'', and this includes stronger quantitative and qualitative 
analysis. The Policy does not place an emphasis on quantitative 
analysis to the exclusion of other methods. Rather it requires that 
USAID-funded evaluations use methods that generate the highest quality 
and most-credible evidence that corresponds to the questions being 
asked, taking into consideration time, budget, and other practical 
considerations. Given the nature of development activities, both 
qualitative and quantitative methods yield valuable findings, and a 
combination of both is often optimal.
    To ensure that USAID's evaluations address longer-term outcomes, 
evaluation requirements are written into the guidance for the missions' 
Country Development Cooperation Strategies (CDCS). Missions identify 
longer-term outcomes of the USAID country program in the CDCS and 
specify indicators to routinely track change and evaluation questions 
to be addressed over the period of the strategy. In addition to the 
CDCS, evaluation is integrated throughout the USAID Program Cycle, 
which includes long- and medium-term outcomes and includes developing 
and implementing policies and strategies, project design and 
implementation, performance monitoring, and learning from experience to 
improve development outcomes and inform resource requests.
    The Evaluation Policy and USAID's efforts to build evaluation 
capacity, particularly in missions, to conduct high-quality evaluation 
will lead to increasingly accurate, unbiased, relevant, and transparent 
evaluations. USAID is investing in classroom training in evaluation 
methods for staff, creating tools, and resources to guide staff and 
partners, and providing direct technical assistance to staff engaged in 
evaluation design and management. USAID's Bureau for Policy, Planning 
and Learning and USAID technical and regional bureaus are working on 
the sectoral and multi-country learning that complements mission 
evaluations and tracks longer-term outcomes. For example, the new 
Center for Democracy, Human Rights and Governance has established the 
Evaluating Democracy and Governance Effectiveness initiative; a 
comprehensive, long-term program to measure the impact and 
effectiveness of various approaches to democratic development and 
incorporate the findings into USAID policies and programs through 
outreach, training, and field support.
                                 ______
                                 
            Questions Submitted by Senator Daniel K. Inouye
    Question. Dr. Shah, I commend the U.S. Agency for International 
Development (USAID) in its efforts to improve the delivery of foreign 
assistance in more-efficient ways. With the President's announced shift 
in our national security strategy to focus more on the Asia-Pacific 
region, would you please elaborate on enhancements, new areas of 
interest, or ways USAID will strengthen its work in the region?
    Answer. USAID has responded to the administration's focus on the 
Asia-Pacific region by enhancing existing programs, expanding into new 
areas of focus and strengthening our collaborative work in the region. 
We will work with Asian countries facing management, governance, and 
social challenges that impede progress and growth. USAID will enhance 
key bilateral relationships, such as those in the Philippines and 
Indonesia, where U.S. Government partnership agreements are elevating 
broad based, inclusive economic growth as development priorities.
    In Burma, where emerging reform presents a new opening, United 
States Government officials have been able to travel to Burma to meet 
with government officials and civil society to determine the country's 
development needs. On April 4, 2012, following Burma's successful by-
elections, USAID announced the re-establishment of an in-country USAID 
mission in Rangoon as part of the United States Government's commitment 
to support the Burmese people, reform-minded governmental officials and 
other Burmese leaders who are seeking constructive engagement to 
advance reform in the country.
    USAID Forward and Procurement Reform policies are changing the way 
we conduct business--broadening our collaborative partner base and 
making it easier for small businesses, local institutions, and other 
donors to partner with us. As two examples:
  --USAID's work with Association of Southeast Asian Nations Dialogue 
        partners supports regional program coordination, climate change 
        initiatives, disaster management and regional trade; and
  --USAID efforts promote important multi-donor and multilateral 
        coordination on issues such as the development of hydro-power 
        on the Mekong River.
    Question. Senate Report 112-85, the Senate's State, Foreign 
Operations, and Related Programs Appropriations Act for fiscal year 
2012, which was referenced in the Consolidated Appropriations Act, 
House Report 112-331, directed the Secretary of State to follow 
guidance included in Senate Report 112-74 related to the Compact of 
Free Association (Compact) agreements with the Federated States of 
Micronesia, the Republic of the Marshall Islands (RMI), and the 
Republic of Palau. It also directed the Secretary to work within the 
U.S. Government interagency process to address the domestic impacts of 
Compact migrants on affected jurisdictions. Could you please explain 
what, if any, involvement and role USAID has in this process?
    Answer. USAID is responsible for United States disaster assistance 
and reconstruction services in the RMI and the Federated States of 
Micronesia (FSM), which the United States Government is obligated to 
provide as stipulated in the Compact. While our disaster response and 
reconstruction program does not directly address the domestic impacts 
of Compact migrants, it does support these countries' ability to 
anticipate and mitigate the effects of natural disasters. Our efforts 
help reduce the number of Compact citizens who will have to migrate to 
the United States due to disasters.
    Question. With respect to the Compact countries, currently, the 
Departments of the Interior and State participate in the Joint Economic 
Management Committee and Joint Economic Management and Fiscal 
Accountability Committees to strengthen the management and 
accountability of assistance provided to Compact countries. This 
involves a review of the development plans and other planning and 
budget documents of the governments, as well as monitoring the progress 
being made toward sustainable economic development and budgetary self-
reliance. USAID's mission is development assistance to countries for 
the purpose of helping them gain stability and sustainability. I 
believe this is an area USAID's experience and technical expertise 
would be invaluable, and would be interested to learn what involvement 
USAID may have in this process and what it might be able to lend to the 
Departments of the Interior and State.
    Answer. USAID has more than 50 years of experience in partnering 
with governments to build sustainable institutional capacity in 
developing countries. We have developed technical expertise in 
improving governments' capacity to formulate and implement economic 
development plans; improve fiscal stability; reinforce anticorruption 
measures; and strengthen rule of law. While USAID's program is limited 
to disaster assistance in the RMI and FSM, we welcome opportunities to 
share our technical expertise in other areas critical for the Compact 
countries' sustainable economic development.
    When the Federal Emergency Management Agency (FEMA) of the 
Department of Homeland Security was responsible for disaster assistance 
under the Compact, that FEMA's role was restricted to disaster relief 
and reconstruction. USAID is now able to fulfill the U.S. Government's 
obligations under the Compact, while helping to strengthen each 
country's capacity for disaster mitigation, response, recovery, and 
reconstruction at both national and community levels. USAID will work 
with the Departments of the Interior and State to ensure our programs 
are complementary in building sustainable institutional capacity.
    Question. I am interested in learning what USAID's plans are for 
development assistance in the larger context of the South and Western 
Pacific, and what it is currently undertaking in this key strategic 
area.
    Answer. USAID seeks to play a key role in deepening U.S. Government 
engagement in the Pacific region. Our programs in the Pacific are 
regionally focused, but target South and Western Pacific countries, 
including Papua New Guinea (PNG), RMI, FSM, Kiribati, Nauru, Palau, 
Samoa, Solomon Islands, Fiji, Vanuatu, and Tonga.
    The value of U.S. Government presence is magnified by our programs' 
focus on issues that pose the greatest socio-economic threat to the 
Pacific island countries:
  --Mitigating the negative impacts of global climate change in a 
        region that is among the most vulnerable in the world to the 
        adverse effects of climate change, but least able to respond;
  --Addressing the impact of HIV/AIDS in PNG, which suffers from the 
        highest HIV/AIDS epidemic rate in the Pacific; and,
  --Strengthening democratic institutions in PNG and Fiji, where 
        democracy is still fragile.
    To further maximize the impact of our programs, USAID:
  --Collaborates and leverages the funding of key donors in the region, 
        including Australia, New Zealand, and Japan and other 
        multilateral organizations such as the United Nations, the 
        World Bank, and Asian Development Bank;
  --Supports key regional institutions; and
  --Forges greater synergy and unity of effort among the different U.S. 
        Government agencies working in the region for a more-effective 
        ``whole-of-government'' approach that makes the best use of 
        limited resources.
    The opening of USAID's satellite office in Port Moresby, Papua New 
Guinea in October 2011 is a recent example of increased U.S. engagement 
in the region. USAID's presence has contributed to expanding the U.S. 
Government's outreach and diplomatic capacity in the region.
    Question. Would you please tell me what USAID's plan for economic/
development assistance is for the country to the Philippines?
    Answer. A team of economists from the United States and the 
Philippines analyzed and identified the country's most binding 
constraints to growth. To ensure the Government of the Philippines 
ownership of the new approach, the analysis was a collaborative effort 
and included development objectives outlined in the Philippines 
Development Plan (PDP), 2011-2016. The PDP is a document developed by 
the Government of the Philippines that closely aligns with the United 
States' 5-year strategy from 2012-2016. Under the new strategy, USAID 
will focus on two key areas to address economic/development assistance 
in the Philippines:
  --regulatory reform; and
  --fiscal space
areas identified as among the most critical constraints that prevent 
the Philippines from realizing its full economic potential.
    The United States Government supports the Government of the 
Philippines measures to reduce the cost of doing business, improve the 
investment climate, ensure that import regulations are science-based, 
and ease restrictions on market entry. Rule of law and judiciary 
reforms will support these critical initiatives. The Government of the 
Philippines has committed to streamlining business procedures 
(predictability, reliability, and efficiency) at national and local 
levels to reduce the country's cost of doing business and they have 
committed to improving the overall investment climate through 
regulatory reforms. The Government of the Philippines is pursing 
implementation of the Anti-Red Tape law and a Philippine Business 
Registry system to establish an on-line system for national business 
registration.
    Improving fiscal space is the second key area on which USAID will 
work. Low government revenue due to a narrow tax base and ineffective 
expenditure management, caused in part by favoritism in government 
contracting, inhibit growth. Through this strategy, programs will 
address inefficient revenue generation, strengthen tax collection 
enforcement and improve expenditure management of the Government of the 
Philippines agencies.
    Question. In your testimony, you spoke about the focus being given 
to North Africa and the Middle East, especially following the 
revolutions in the region early last year. How does USAID plan to 
sustain its various assistance, economic and reform oriented, while 
shifting focus to the Asia-Pacific region and maintaining the current 
operational tempo in Iraq and Afghanistan?
    Answer. In North Africa and the Middle East, USAID will remain an 
active and sustained partner as the region transforms. As the U.S. 
Government shifts focus to the Asia-Pacific, we are utilizing our 
resources differently. Through innovation and reinvention, USAID will 
expand focus to the Asia-Pacific while sustaining our current efforts 
elsewhere. In October 2011, USAID opened an office in Port Moresby, 
Papua New Guinea, to manage programs throughout the Pacific Islands. 
Additionally, USAID will re-open its mission in Rangoon to better serve 
the nascent democratic process in Burma and provide increased oversight 
to our on-going programs.
    USAID is in the midst of finishing a comprehensive portfolio review 
in Afghanistan. Last June, Administrator Shah issued Sustainability 
Guidance that mandates all programs in Afghanistan be reviewed and 
adjusted to ensure they are implemented with the driving principles of 
accountability, sustainability, and social and gender inclusion, and 
that they be implemented in partnership with the Afghan government. 
Allocation of aid resources will increasingly be based on maximizing 
capacity-building initiatives and development impacts as aid budgets 
shrink to enable a viable Afghan transition.
    USAID's projects in Iraq transitioned from stabilization assistance 
to development assistance beginning in 2009. The State Department, 
USAID, and our other U.S. Government partners continue to meet the 
challenge of operating successfully in a dynamic environment while 
still maintaining the safety of our personnel by:
  --Contracting third-party monitoring and evaluation specialists who 
        have greater access to project sites, are less limited by 
        security concerns, and possess local knowledge.
  --Employing local Iraqi professionals to provide an additional layer 
        of oversight and greater access to project sites, 
        beneficiaries, and counterparts.
  --USAID employs more than 1,100 implementing personnel in Iraq, 
        nearly 1,000 of whom are local Iraqi employees, or 90 percent.
    Question. The American Schools and Hospitals Abroad (ASHA) program 
is very important to assisting our friends and partners overseas. I 
have been very supportive of ASHA in the past, in particular its work 
in Israel. Would you please explain how much an average ASHA grantee 
receives, and how many grantees ASHA supports? Finally, I have 
supported efforts by the Israel Center for Excellence in Education 
(ICEE) in the past, and I understand they have benefited from ASHA 
support many years ago. Dr. Shah, would you please explain how the 
grant process has changed over the years, and if ICEE submitted a grant 
application, I would be interested in learning about its current 
status.
    Answer. USAID's ASHA program administers a worldwide grant program 
that reflects both the pioneering spirit and the generosity of citizens 
of the United States. USAID appreciates your past and future support of 
the program, including its work in Israel.
    In order to ensure an equitable distribution of ASHA funds to 
entities whose proposals best support the program's objectives, ASHA 
conducts a fair and competitive process in order to allocate grant 
funds each year. On average, ASHA receives approximately 80-100 
applications in response to the annual Request for Applications. Of 
that number, 25-35 new grants are awarded annually. The individual 
grant awards range from $150,000 to $2,000,000.
    USAID/ASHA has recently modified the grant process in the last year 
by utilizing www.grants.gov as the means to post its Request for 
Applications. fiscal year 2012 funding requests are currently being 
reviewed by a USAID Technical Evaluation Committee, and it is 
anticipated that final agency recommendations will be made in June or 
July 2012.
    ICEE did not submit an application for this past grant application 
cycle, which ended October 31, 2011. We appreciate your show of support 
and encourage ICEE to apply to the upcoming grant application cycle, 
which will be available on www.grants.gov in June or July 2012.
                                 ______
                                 
               Questions Submitted by Senator Tom Harkin
    Question. While I commend the efforts being made by the United 
States Agency for International Development (USAID) to cut waste in the 
delivery of its assistance, I wish to assure that we maintain a broad 
connection between democracy and labor rights groups in the United 
States with their counterpart partners in developing nations. This is 
especially important when we want to promote such groups around the 
world, often in countries where direct associations with the U.S. 
Government is problematic. Can you tell me how USAID is balancing the 
important role these intermediary organizations play with its efforts 
at greater localization of assistance contracts?
    Answer. USAID will continue to offer significant support to 
international democracy and labor rights groups, particularly as they 
support local counterpart organizations.
    The connection between local organizations in developing countries 
and democracy and labor organizations in the United States is supported 
through the Agency's guidance regarding incorporation of Local Capacity 
Development into USAID project designs. Building strong partnerships 
between local and American organizations that respond to similar 
issues, or have similar organizational missions, can facilitate the 
emergence of stronger promotion of democracy and labor rights. 
Considering the potential value of such relationships is part of 
appropriate project design, and is reinforced through the guidance that 
is shared with missions.
    This is especially true in the area of international labor rights 
programming. USAID supports U.S. intermediary organizations, like the 
Solidarity Center and the International Labor Rights Fund, in order to 
leverage specialized expertise to strengthen unions and labor rights 
nongovernmental organizations (NGOs) in developing countries and 
connect them to the global labor movement. A good example of this is 
USAID's $37.5 million Global Labor Program (GLP) Leader with Associates 
Award, a 5-year program with the Solidarity Center that is currently 
active in nine countries and four regions (Africa, Asia, Latin America, 
and Eastern Europe). Due to the Solidarity Center's successful capacity 
building of local unions and labor rights NGOs, this support helps 
prepare the type of local organizations that USAID seeks to strengthen 
through local capacity development and localized assistance contracts. 
USAID recognizes that support to U.S. intermediaries like the 
Solidarity Center and the International Labor Rights Forum, a 
consortium partner in USAID's Global Civil Society Strengthening 
Program, is important to this effort.
    USAID also promotes democracy groups in developing countries by 
encouraging USAID missions to incorporate them into the monitoring and 
evaluation of USAID programs that use partner country systems, thus 
bringing a more-sustainable form of accountability to developing 
country governments. This is reflected in USAID's policy on the use of 
partner country systems.
    Question. I very much applaud your efforts to strengthen 
independent civil society and NGOs around the world. Can you outline 
how the President's budget request will support the strengthening of 
democracy, human rights groups, and labor unions around the world 
through funding by USAID? How is USAID strengthening worker rights in 
Arab Spring countries that have seen trade unions leading efforts for 
democratization?
    Answer. The President's budget request for fiscal year 2013 
includes $2.84 billion for State Department and USAID programs to 
strengthen democracy, human rights and governance worldwide. Under this 
broad rubric, both the State Department and USAID will plan programs 
to:
  --ensure free and fair elections;
  --promote freedom of association and strengthen civil society 
        organizations;
  --support human rights organizations in their monitoring and advocacy 
        efforts; support independent media; and
  --strengthen labor unions and worker rights.
    USAID's programs promote freedom of association, working to ensure 
that NGO laws provide an enabling environment for a vibrant, 
independent civil society sector. USAID also builds the organizational 
capacity of NGOs to advocate on behalf of constituents, influence 
policy dialogues, and hold governments accountable for their 
performance. In the Middle East, USAID's programs focus on empowering 
new actors, including women, youth, minorities, and other communities 
that have been excluded from political and economic power.
    USAID support for workers' rights revolves around the GLP, 
implemented by the Solidarity Center, which promotes international core 
labor standards, works to improve workers' access to justice, and 
supports independent, democratic labor unions and NGOs.
    USAID has workers' rights programs in Ukraine, Georgia, Bangladesh, 
Cambodia, South Africa, Liberia, Mexico, Honduras, Brazil, Peru, 
Colombia, Kyrgyzstan, and Vietnam. While USAID does not have specific 
programs focusing on workers' rights in the Middle East and North 
Africa, the Department of State's Bureau for Democracy, Human Rights 
and Labor is supporting independent trade unions in Egypt. USAID 
coordinates its programming closely with the Department of State.
                                 ______
                                 
            Questions Submitted by Senator Mary L. Landrieu
                          vulnerable children
    Question. In just 9 days, the inspirational video created by the 
American nongovernmental organization Invisible Children--which focuses 
on Lord's Resistance Army (LRA) leader Joseph Kony--has attracted more 
than 78 million views on YouTube and generated hundreds of thousands of 
dollars in donations on its release day alone. Louisiana constituents, 
particularly younger Louisianans, have been contacting my office 
nonstop in support of the ``Kony 2012'' movement with phone calls and 
emails. Though the size of the LRA is dwindling and Joseph Kony is now 
thought to be operating from the Congo or the Central African Republic 
(CAR), some 440,000 Ugandans have been displaced by the conflict--most 
of them children.
    Do you mind detailing the United States Agency for International 
Development's (USAID) support for these conflict-affected children and 
former child soldiers in Uganda?
    Could you explain USAID's efforts to restore the livelihoods of 
conflict-affected children? Is there a focus on reconnecting these 
children with the families from which they were kidnapped?
    Answer. USAID has been heavily engaged in addressing the needs of 
LRA-affected communities since the late 1980s, when USAID began 
providing humanitarian assistance in Northern Uganda. Although the 
threat of the LRA has shifted from terrorizing communities in Northern 
Uganda to CAR, the Democratic Republic of Congo and South Sudan, USAID 
remains committed to addressing the needs of affected populations, 
including children, in Uganda. In fiscal year 2011, USAID provided 
approximately $102 million in assistance to Northern Uganda. The needs 
of children, women, and other vulnerable groups are addressed through 
programs that promote reconciliation, restore livelihoods and rebuild 
the region. USAID programs do not isolate child soldiers, but rather 
integrate them and their unique needs into our programs designed to 
promote reconciliation. By linking the specific needs of formerly 
abducted persons with those of their communities, USAID ensures a 
whole-of-community approach that addresses both the short- and long-
term needs of conflict-affected children and former child soldiers. 
USAID programming to support conflict-affected children and their 
communities in Northern Uganda include:
  --psychosocial support;
  --vocational and leadership training;
  --peace education;
  --livelihoods training and agricultural extension;
  --community consensus-building; and
  --provision of family support social services.
    As the needs in Northern Uganda have evolved from short-term, 
quick-impact transition initiatives to longer-term development, USAID 
has transitioned its work in Northern Uganda to address these long-term 
issues. As an example, the Supporting Access to Justice, Fostering 
Equity and Peace program is a new 5-year program that continues peace 
and reconciliation efforts in LRA-affected areas and proactively 
addresses emerging development issues and conflict drivers, such as 
land disputes and government service delivery.
    USAID began transitioning from providing emergency food assistance 
to internally displaced persons (IDPs) in the camps to supporting the 
return of IDPs to their former homes. Since 2006, USAID/FFP has 
provided more than $100 million in title II Development Food assistance 
benefiting 87,000 families in 21 districts in Northern Uganda. This 
assistance has included:
  --support for increased agriculture production;
  --HIV/AIDS awareness;
  --infrastructure development;
  --maternal and child health and nutrition; and
  --water, sanitation, and hygiene.
                           procurement reform
    Question. The administration has said that it wants to make foreign 
aid more effective and efficient and has made some progress on this, 
particularly through the USAID Forward agenda. I've been a supporter of 
procurement reform and was pleased to see that just this past month, 
USAID simplified its regulations so that the agency can support smaller 
businesses in the United States and abroad--supporting economic growth 
in areas that really need it--when buying goods and services. The 
President's fiscal year 2013 budget requests that $16 million be 
appropriated to the USAID operating expenses account to support the 
USAID Forward agenda, and particularly procurement reform. The request 
notes that several new civil service positions are needed to implement 
procurement reform to develop smaller contracts appropriate for partner 
country systems.
    What other local procurement activities are envisioned by this $16 
million?
    Answer. The $16 million identified in the President's fiscal year 
2013 budget for procurement reform includes $13 million in fiscal year 
2012 appropriated operating expenses (OE) and $3 million in the fiscal 
year 2013 appropriation. Per the fiscal year 2012 statement of managers 
provision that at least $25 million of the appropriation be made 
available for procurement reform in fiscal years 2012 and 2013, the $13 
million reflects the carryover funding for fiscal year 2013 activities. 
Hence, only $3 million for 16 new civil service positions for 
procurement reform is requested for appropriation in fiscal year 2013.
    With the additional funding, USAID will be able to field more 
acquisition personnel to support the increased local procurement 
activities and related local capacity development interventions. 
Additional work includes the need to complete pre-award surveys for 
local organizations that have never had a direct award with the U.S. 
Government, assess the capacity development needs of the organizations, 
and provide capacity-building support to ensure accountability for U.S. 
taxpayer funds and compliance with U.S. law and policy requirements.
    Question. Additionally, what steps have been taken to help both 
small U.S. and developing country businesses know about and take 
advantage of these recent regulatory changes?
    Answer. USAID has increased and focused its outreach efforts to 
both small U.S. and developing country businesses to inform them of the 
Implementation and Procurement Reform Initiative and opportunities for 
direct and indirect partnership implementing USAID-managed development 
resources. For U.S. small businesses, USAID's Office of Small and 
Disadvantaged Business Utilization (OSDBU) conducts on-going outreach 
activities at both USAID-sponsored events and external small-business 
conferences. These outreach efforts provide forums for OSDBU to counsel 
U.S. small businesses seeking contracting opportunities at USAID. In 
fiscal year 2012, OSDBU will take part in more than 25 small-business 
outreach events, including hosting the 5th Annual USAID Small Business 
Conference. This conference provides a forum for U.S. small businesses 
to hear from senior USAID leadership and program officials regarding 
IPRI and future contracting opportunities at USAID. Additionally, OSDBU 
conducts periodic Vendor Day sessions with all categories of U.S. small 
businesses.
    For developing country business, the Agency's Partner Community 
Outreach Plan, available at http://www.usaid.gov/business/
USAIDPartnerCommunityOutreach
Plan.pdf, provides guidance to USAID personnel on outreach to new and 
existing partners. Missions have started holding ``Industry Days'' and 
``Pre-solicitation Conferences'' and inviting local organizations to 
participate. For example, the USAID mission in Rwanda recently held a 
``How to Do Business with USAID'' for potential local applicants for a 
health award solicitation. The USAID mission in Philippines held 
similar events for solicitations in the Economic Growth and Democracy 
and Governance sectors. In Egypt, the USAID mission held a series of 
outreach events attended by more than 1,400 people to learn about the 
process for submitting applications under an Annual Program Statement. 
As part of a series of field-based Local Capacity Development training/
workshops, USAID personnel have been trained on mapping local civil-
society and private-sector organizations to identify prospective local 
partners and assess their capacity to implement activities. Missions 
are encouraged to invite prospective local partners to ``Partner 
Exchange Days'', which provide opportunities for prospective 
implementation partners to provide feedback on project designs and 
identify potential partnerships, and ``Pre-Proposal Conferences'', 
which provide information on upcoming solicitations, and invite local 
organizations to participate.
                            central america
    Question. Within Central America, the deteriorating security 
situation threatens citizen safety. Narcotics traffickers continue to 
establish trafficking routes to and through the region. The continued 
expansion of national and transnational gangs creates communities of 
fear where illicit organizations are effectively in control. At a time 
when many of our regional partners are fighting a brutal battle in 
their countries against organized crime, the President's fiscal year 
2013 budget request recommends that the State Department make a $5 
million cut from enacted fiscal year 2012 levels to the Central America 
Regional Security Initiative (CARSI). The President recommends that the 
International Narcotics Control and Law Enforcement Account 
appropriation to the Western Hemisphere be reduced by $92 million for 
fiscal year 2013. Can you please explain the President's logic in 
making such a sizeable reduction to this appropriation for the Western 
Hemisphere, when drug-related violence and narcotics trafficking is at 
an all-time high?
    Answer. We share your concern regarding the citizen security crisis 
in Central America, and the accompanying factors that bring violence to 
the region. The problem is large and complex, but the United States is 
committed to continuing to work with Central American governments, as 
well as other donor nations and institutions, to support the region's 
efforts to reverse the deteriorating state of citizen security.
    Through its programming and policy advocacy, CARSI seeks to reduce 
the region's levels of crime and violence, support prevention efforts 
for at-risk youth and those living in marginalized communities, and 
strengthen rule of law institutions. The Bureau of International 
Narcotics and Law Enforcement Affairs (INL) and USAID are implementing 
CARSI programs capable of being replicated or ``nationalized'' by host 
nations. Examples of this are Model Police Precincts, the opening of 
youth outreach centers and vocational training centers, and the 
development of ``Municipal Crime Prevention Strategies'' in communities 
at-risk. CARSI also supports border security professionalization, 
assistance for judicially authorized wire intercept programs, seized 
asset programs, and the training and vetting of specialized 
investigative units.
    Since fiscal year 2008, the United States has committed $361.5 
million to these efforts. The administration requested $100 million for 
CARSI for fiscal year 2012; however, we plan on allocating $105 million 
for CARSI (INCLE: $60 million; ESF: $45 million), pending final 
congressional approval. The administration's fiscal year 2013 budget 
request of $107.5 million will represent a 2.3-percent increase more 
than the fiscal year 2012 actual allocation for CARSI (INCLE: $60 
million--no change; ESF: $47.6 million--5.7-percent increase).
    Citizen security is a priority for the people of Central America 
and the hemisphere. The administration's proposed fiscal year 2013 
$91.8 million reduction in Western Hemisphere INCLE funding largely 
accounts for the continuing transition of counternarcotics and rule of 
law programs to the Government of Colombia as it continues to build and 
strengthen its capacities, which reflects the success of United States 
assistance investments. In fact, Colombian capacity has reached the 
point where they are providing law enforcement training and assistance, 
in cooperation with the United States, in both Mexico and Central 
America. In Mexico, the fiscal year 2013 INCLE budget request decrease 
reflects a reorientation of efforts in Mexico from the acquisition of 
equipment to training, mentoring and capacity building, all of which 
are lower cost and provide long-term sustainability.
    Given the proximity of Central America to our own border, and the 
efforts of transnational trafficking organizations in Central America, 
Colombia and Mexico, we will continue our commitment to Central 
American and in the hemisphere to sustain our efforts and support our 
partners in addressing their most pressing citizen security, rule of 
law and prevention challenges.
    Question. The U.S. Congress voted to ban military aid to Guatemala 
in 1990 due to concerns regarding human rights abuses committed by the 
Guatemalan army. Today, the ban remains in place as a partial 
restriction that limits Foreign Military Financing (FMF) and 
International Military Education and Training (IMET) funding to the 
Army Corps of Engineers, Navy and Air Force, allowing only Expanded 
IMET to the Guatemalan army. The fiscal year 2012 omnibus 
appropriations bill, which passed through the Congress last December, 
states that funding to the Army will only be considered in fiscal year 
2013 if the Army complies with a series of stipulations, including ``a 
narrowly defined mission focused on border security and external 
threats, cooperation with civilian investigations and prosecutions of 
cases involving current and retired officers and with the CICIG, and . 
. . publicly disclosing all military archives pertaining to the 
internal armed conflict.''
    Does USAID concur with these requirements and do you believe that 
the Guatemalan army is ready to receive regular FMF and IMET funding?
    Answer. The Department of State has indicated to both the current 
and past Guatemalan governments that we are willing to discuss the 
United States congressional restrictions on IMET and FMF funding for 
the Guatemalan army, and we have encouraged the Guatemalans to discuss 
the restrictions with Members of Congress. While it is early in the 
Perez Molina administration, going forward we will thoroughly assess 
the military's commitment and progress with regard to human rights, 
internal reform, and other key issues, as outlined in the manager's 
report accompanying this year's appropriations act. The Guatemalan 
military is responsive to civilian political authorities, it has a 
human rights and international humanitarian law training program, and 
has provided key complementary support to law enforcement as part of 
Perez Molina's strategy to improve citizen security. The Guatemalan 
military is also continuing to work with representatives of the Central 
American archives to explore the possibility of putting the conflict-
era military archives online through the University of Texas. It has 
earned significant international and Guatemalan public respect for its 
work in support of peacekeeping operations, disaster response, and 
recovery efforts.
                                 ______
                                 
           Questions Submitted by Senator Frank R. Lautenberg
    Question. Recent events have underscored the importance of the 
current United States strategy to continue withdrawing our troops from 
Afghanistan. What role do you see the United States Agency for 
International Development (USAID) playing in Afghanistan after our 
troops have left the country?
    Answer. Afghanistan faces a critical turning point in the next few 
years. Insecurity, corruption, the narcotics trade, and political 
instability continue to pose challenges to fragile gains in development 
and governance. The drawdown of international combat forces and the 
associated economic impact will slow growth. But as the recently 
concluded U.S.-Afghanistan Strategic Partnership Agreement (SPA) makes 
clear, we will stay engaged in Afghanistan for the long-term, providing 
the Afghan people support so that they can pursue a future of greater 
stability and dignity.
    The path to sustainable stability in Afghanistan requires continued 
commitment to civilian assistance, but increasingly through efforts 
that will boost Afghan self-sufficiency. The signing of the SPA is a 
major accomplishment and pivotal milestone on this path. The United 
States commitment to seek funding from the Congress for continued 
economic assistance is contingent on the Afghans fulfilling their 
commitments and obligations to strengthen accountability, transparency, 
oversight, and the effectiveness of government institutions. Through 
the SPA, we seek to cement an enduring partnership with Afghanistan 
that strengthens Afghan sovereignty and stability while promoting 
respect for the constitution, human rights, and the advancement of 
women.
    We have prioritized our assistance portfolio to make foundational 
investments that will enable transition to full Afghan security 
responsibility, and help to ensure Afghans increasingly have the skills 
and resources necessary to chart their own future. USAID plans to 
invest in priority sectors that are critical to private sector-led 
economic growth:
  --agriculture;
  --extractive industries;
  --trade; and
  --human capacity development.
    In addition, we are working with the Afghan authorities to ensure 
credible and inclusive national elections in accordance with the Afghan 
constitution, including by supporting and strengthening political 
parties and civil society coalitions to participate fully in an 
inclusive and representative democracy.
    In one of the most food-insecure countries on Earth, our 
agriculture assistance will help significantly boost crop yields, farm 
income, access to markets, and reduce dependence on opium poppy for the 
80 percent of Afghans who make their living from subsistence farming. 
Afghanistan's endowment of mineral wealth provides enormous 
opportunities to expand industry, trade corridors, and revenues, but 
presents significant potential pitfalls as well. USAID will work with 
the Afghan Government and the private sector to improve the investment 
climate, increase Afghan capacity to create and implement a policy and 
regulatory framework that meets international best practices, and 
transparently report and manage resource flows so that they benefit the 
Afghan people.
    As you well know, Afghanistan remains a poor country and as such, 
we cannot, and should not, set unrealistic goals. USAID is making 
difficult choices to sharpen our focus--reducing infrastructure 
investments in order to support the government to maintain the 
infrastructure it already has. Likewise, we are cementing, rather than 
expanding, gains in health and education, and are reorienting 
stabilization efforts to more directly support the transition and a 
sustainable Afghanistan.
    The G8, Chicago, and Tokyo conferences will be instrumental in 
engaging the Afghan Government and international community to advance 
our diplomatic and civilian efforts in the region.
    Question. On the 2-year anniversary of the Haiti earthquake this 
year, I wrote to the State Department expressing concern about the slow 
distribution of aid to the region. In January, the State Department 
responded by noting the many challenges that State and USAID have faced 
in distributing this aid. Understanding that USAID faces considerable 
challenges, what are you doing to speed the distribution of aid?
    Answer. The United States Government continues to move forward in 
programming our funds to meet the needs of the Haitian people. Since 
our response to you on January 19, 2012, we have made significant 
strides in accomplishing our goals set forth in our Post-Earthquake USG 
Haiti Strategy. As of March 1, 2012, USAID shelter solutions benefited 
64,478 households--or more than 322,000 people-- approximately one-
fifth of the 1.5 million people estimated to have been displaced by the 
earthquake. Overall, internally displaced persons (IDPs) are down to 
490,545 from the estimated 1.5 million after the earthquake. In 
addition, our efforts have removed 2.31 million cubic meters of 
rubble--almost one-half of all the rubble that has been removed.
    We have also made progress in longer-term development solutions. 
Our agricultural programs are increasing farmer incomes and 
productivity. The 2011 harvest produced increased yields in corn (+368 
percent), rice (+118 percent), beans (+85 percent), and plantains (+21 
percent). The 2012 planting season will incorporate new innovations in 
productivity and continue the progress being made.
    We have also successfully launched $6 million in programs to 
benefit vulnerable populations, specifically people with disabilities. 
These efforts will improve access to services, and the legal and policy 
environment, train health personnel to better understand and attend to 
their needs, and strengthen advocacy groups focused on this effort. 
Also, a $22 million human rights program is now underway which will 
protect the rights of children, women, and youth.
    We have addressed several key obstacles such as staffing shortages 
and procurement support. As a result, our pace of programming continues 
to accelerate, while still adhering to the requisite environmental and 
seismic data assessments.
    The resignation of Prime Minister Conille may unfortunately slow 
down development efforts. For our programs to function better and be 
implemented faster, we need a Haitian Government that is fully engaged 
and that is showing no tolerance for corruption and reaffirming its 
commitment to democracy and rule of law. Such engagement will also 
serve as a signal to other donors that their investments will be 
worthwhile and spent effectively.
    Question. It is critical that gender issues are integrated 
throughout all of our foreign aid programs, so I was pleased to see 
that USAID recently released a new policy on gender equality and 
women's empowerment. What metrics will you use to specifically 
determine the impact this new gender policy is having on women and 
girls around the globe?
    Answer. USAID's newly updated policy on Gender Equality and Women's 
Empowerment mandates the Agency to monitor the impacts of our 
investments on males and females and to measure our results in specific 
ways. To that end, USAID will measure performance in closing key gender 
gaps and empowering women and girls; ensure that our monitoring and 
evaluation methods include gender indicators that measure progress 
toward gender equality and women's empowerment; and ensure that 
projects collect and use sex-disaggregated data.
    USAID has already put in place various metrics to determine the 
impact of our investments. USAID's Feed the Future Initiative developed 
an enhanced monitoring and evaluation system that will comprehensively 
track the impact of our work on women and girls using a newly designed 
Women's Empowerment in Agriculture Index created in collaboration with 
the International Food Policy and Research Institute and Oxford's 
Poverty and Human Development Initiative. The Index is the first 
measure to directly capture women's empowerment and inclusion levels in 
the agricultural sector. It focuses on five areas:
  --decisions over agricultural production; and
  --power over productive resources such as:
    --land and livestock;
    --decisions over income;
    --leadership in the community; and
    --time use.
    Women are considered to be empowered when they meet the 
requirements in some combination amounting to 4 of the 5 areas. The 
Index also takes into consideration the empowerment of women compared 
with men in the same household, based on asking women and men the same 
survey questions. The Index will be used to monitor and evaluate 
programs in all 19 Feed the Future countries to ensure that our efforts 
are empowering women and supporting the essential role they play in 
reducing hunger and advancing prosperity.
    In 2011, the State-USAID Performance Plan & Report system was 
significantly revised and the entire Foreign Assistance indicator suite 
was re-engineered. This new system includes seven output and outcome 
indicators on gender equality, female empowerment, and gender-based 
violence that Operating Units will use in Performance Management Plans 
and Reports for tracking progress toward implementation results and 
measuring impact across programs. The seven indicators are:
  --Number of laws, policies, or procedures drafted, proposed, or 
        adopted to promote gender equality at the regional, national or 
        local level.
  --Proportion of female participants in U.S. Government-assisted 
        programs designed to increased access to productive economic 
        resources (assets, credit, income, or employment).
  --Proportion of females who report increased self-efficacy at the 
        conclusion of U.S. Government-supported training/programming.
  --Proportion of target population reporting increased agreement with 
        the concept that males and females should have equal access to 
        social, economic, and political opportunities.
  --Number of laws, policies or procedures drafted, proposed, or 
        adopted with U.S. Government assistance designed to improve 
        prevention of or response to sexual and gender-based violence 
        at the regional, national, or local level.
  --Number of people reached by a U.S. Government-funded intervention 
        providing GBV services (e.g., health, legal, psycho-social 
        counseling, shelters, hotlines, other).
  --Percentage of target population that views gender-based violence as 
        less acceptable after participating in or being exposed to U.S. 
        Government programming.
    These seven indicators were designed to be broad so that they can 
be used across various sectors--from health to democracy and governance 
to economic growth. Already, missions have asked implementing partners 
to begin collecting data and set targets for these indicators that can 
be used in fiscal year 2013 performance reports.
    Question. If we do not take real steps to stop the worst effects of 
climate change, what additional resource burdens will USAID face in 
trying to meet development goals in our partner countries?
    Answer. Climate change is already expected to exacerbate existing 
development pressures and most heavily impact the poor in developing 
countries. If steps are not taken to stop the worst effects of climate 
change, the impacts undoubtedly will be greater and place additional 
burdens on USAID programs, as well as countries that can least afford 
to handle them. Among the additional resource burdens USAID and its 
partners will face are:
  --Additional obstacles to achieving development goals in food 
        security, health, and economic growth. More variable rainfall, 
        stronger storms, and temperature changes, driven by unmitigated 
        climate change, have the potential to reduce agricultural 
        productivity. Agricultural productivity is projected to decline 
        in some continents, especially Africa and South Asia, at a time 
        of rapidly growing demand for food, threatening the success of 
        USAID's food security investments. The combined climate change 
        impacts of warming and ocean acidification are projected to 
        result in nearly all coral reefs classified as threatened by 
        2050, impacting the roughly 500 million people who depend on 
        reef ecosystems for their protein. Similarly, increased 
        incidence of flooding and drought, saltwater intrusion into 
        drinking water supplies, and the migration of disease vectors 
        into new areas (such as mosquitoes carrying malaria) will 
        affect public health by undermining access to clean water and 
        sanitation, undercutting nutritional gains, and changing 
        disease distribution patterns and prevalence. Reduced 
        agricultural productivity, combined with increased disease 
        burdens and increased economic losses from climate change-
        related damage will undermine effort to achieve sustainable 
        economic development in USAID-partner countries as well as 
        place additional burdens on the Agency.
  --Increased demand for humanitarian assistance. Unmitigated climate 
        change is likely to increase the severity and frequency of 
        natural disasters, such as floods and droughts. USAID already 
        spends significant resources responding to both immediate 
        humanitarian and long-term reconstruction needs after natural 
        disasters. These needs would increase with the number and 
        severity of disasters. Rising sea levels will render some 
        densely populated coastal areas uninhabitable, creating 
        ``climate refugees'' who will be forced to move to higher 
        ground.
  --Increased need to respond to conflict and political instability. 
        Any humanitarian crises, caused or exacerbated by climate 
        change will undermine the social, economic, and political 
        stability of our allies and partners, leaving them less able to 
        help address other global challenges. Climate change may 
        exacerbate water scarcity and increase conflicts; it could 
        trigger displacement and contribute to national and regional 
        resource governance tensions, threatening U.S. national 
        security objectives in key regions of the world. The U.S. 
        military, USAID, and intelligence community consider climate 
        change to be a ``threat multiplier.''
    Question. Worldwide, there are more than 200 million women who want 
to delay or prevent pregnancy but lack access to modern contraceptive 
methods. What new approaches and innovations is USAID supporting to 
meet these family planning needs? Additionally, how do investments in 
international family planning help USAID achieve the goals of the 
Global Health Initiative?
    Answer. Expanding the availability, accessibility, and voluntary 
use of family planning is vital to safe motherhood and healthy 
families, reduces abortion and mother-to-child transmission of HIV, and 
has profound health, economic and social benefits for families, 
communities, and nations. Voluntary family planning programs that 
enable couples to choose the number, timing and spacing of their 
children are a key intervention in achieving the Global Health 
Initiative goal of preventing 54 million unintended pregnancies.
    By allowing women to delay and space births, family planning could 
prevent as many as one-third of the 350,000 maternal deaths that occur 
each year. In the developing world, an estimated 90 percent of infants 
whose mothers die in childbirth will die by their first birthday. 
Family planning helps women have healthier children, and increases the 
likelihood that infants will survive and remain healthy.
    To help the more than 200 million women with an unmet need for 
family planning, USAID supports all the key components of effective 
family planning/reproductive health programs--service delivery, 
performance improvement, contraceptive supply and logistics, health 
communication, biomedical and social science research, policy analysis 
and planning, and monitoring and evaluation. In addition, USAID puts 
special emphasis on program approaches and issues that are under-
resourced in country programs but hold promise for accelerating 
progress, including contraceptive security, integrated family planning/
HIV and family planning/maternal and child health programming, 
community-based approaches, voluntary access to long-acting and 
permanent methods, gender, reaching youth and underserved populations, 
and equity in access to services.
    USAID also works to expand access to family planning through social 
science, operations and contraceptive research. These efforts include 
promoting a greater understanding of the gap between unmet need and 
planned family planning use through the social network, and developing 
a compendium of best practices in family planning/HIV integration.
    Question. The President's fiscal year 2013 budget request includes 
$770 million for the establishment of a new program Middle East and 
North Africa (MENA) Incentive Fund (IF). What type of programs and 
activities is USAID expecting to support with this new Fund? What 
requirements will be made of recipient groups or countries that receive 
this aid?
    Answer. The MENA IF represents a new approach to the Middle East 
and North Africa by demonstrating a visible commitment to reform and to 
the region; tying assistance to reform agendas; and providing 
flexibility for contingencies in order to take advantage of new 
opportunities. USAID will work with State Department and other 
interagency partners through a process that develops shared objectives 
consistent with U.S. foreign policy goals. Deploying the fund will 
require close coordination.
    What type of programs and activities is USAID expecting to support 
with this new Fund? MENA IF will address three types of needs as 
follows:
    Longer-Term Transition Incentives.--The bulk of the fund will be 
focused on activities supporting governance and economic reform 
including activities such as:
  --Private sector development, including jobs growth;
  --Seed money for larger investments and multilateral projects;
  --Loan guarantees;
  --Governance reform assistance;
  --Enterprise funds; and
  --Technical assistance to improve transparency, human rights, free 
        trade, and regional integration.
    Immediate Transition/Stabilization Contingencies.--In addition, a 
portion of the MENA IF will be available for short-term support for 
newly transitioning countries including activities focused on the 
following:
  --Short-term economic stabilization (e.g., fiscal support);
  --Assistance in managing immediate political transition processes;
  --Civil society strengthening;
  --Emergency technical support;
  --Humanitarian assistance and human rights investigations;
  --Transitional justice programs;
  --Security sector support; and
  --Bolster capacity to engage with newly emerging democracies.
    Regional Program Platforms.--MENA IF also includes the base funding 
for the Middle East Partnership Initiative (MEPI) ($65 million), and 
USAID's Office of Middle East Programs (OMEP) ($5 million). MEPI 
cultivates locally led change by supporting civil society in every 
country of the MENA region where the United States has a diplomatic 
presence. OMEP provides surge capacity and region-wide scope for 
development activities that respond to regional transition and reform.
    What requirements will be made of recipient groups or countries 
that receive this aid? MENA IF provides incentives to support 
transitioning governments who demonstrate a clear commitment to 
political and economic reform. Recipients will be required to submit 
credible political, economic, and/or security reform proposals for 
activities that demonstrate significant economic returns or progress in 
quality of governance. Policies and procedures for programming of 
assistance will govern proposal identification, implementation, 
monitoring, and evaluation. This will include, among other things, 
clearly defined conditions and benchmarks for measuring and achieving 
individual program success.
                                 ______
                                 
              Question Submitted by Senator Lindsey Graham
    Question. What are the specific impacts of sequestration on United 
States Agency for International Development operations and programs?
    Answer. We urge the Congress to enact balanced deficit reduction 
legislation that avoids sequestration. If necessary, the administration 
will be addressing important technical questions concerning sequester, 
but now is the time to focus on enacting the balanced framework 
proposed in the President's budget.
                                 ______
                                 
                Questions Submitted by Senator Mark Kirk
                            veterans hiring
    Question. According to the Office of Personnel Management (OPM), 
the United States Agency for International Development (USAID) has the 
lowest percentage of veteran hires and the second-lowest number of on-
board veteran employees among all executive branch agencies. According 
to OPM, in fiscal year 2010, veterans made up 5.6 percent of USAID's 
workforce, as compared to State Department's 16.7 percent, the Labor 
Department's 17.8 percent, or even the National Science Foundation's 
5.7 percent.
    Why is USAID unable to effectively recruit veterans?
    Answer. USAID has made substantial progress in recruiting veterans. 
In fiscal year 2011, USAID implemented a wide range of outreach, 
recruitment, and marketing initiatives to increase veteran hiring. 
These efforts resulted in a marked increase of new veteran hires from 
5.6 percent in fiscal year 2010 to 8.5 percent in fiscal year 2011. 
USAID continues to make significant progress this fiscal year. During 
the first quarter of fiscal year 2012, 11 percent of USAID's new hires 
were veterans.
    Question. What specific steps beyond OPM's hiring preferences is 
USAID taking to engage our veterans and substantially increase its 
number of veterans on staff? Does USAID have any specific veteran 
hiring programs?
    Answer. USAID has implemented a number of creative strategies to 
increase the number of veterans in USAID. First, we hired a seasoned 
full-time professional as the Veterans Employment Program Manager with 
primary responsibility for executing all aspects of the Veteran's 
Employment Initiative and serving as an advocate to promote veteran 
recruitment, hiring, and retention within USAID. Second, we initiated a 
vigorous internal referral program to target vacancies for veterans as 
soon as they arise. The program allows USAID hiring managers to contact 
the Veterans Employment Program Manager to fill their positions quickly 
with qualified veteran candidates using the Special Appointing 
Authorities for Veterans. These Special Appointing Authorities enable 
veterans to be referred for consideration prior to the posting of a job 
announcement. Twenty-five percent of all veterans hired in fiscal year 
2011 were referred from this program. Third, USAID sponsors quarterly 
Federal employment workshops at USAID headquarters at no cost for 
separating and retiring military members and spouses. Finally, USAID 
has increased the number of veterans hired through our formal Student 
Internship Program and continues to partner with a wide variety of 
Military Transition Assistance Programs and Veterans Rehabilitation 
Organizations. The specific types of transition assistance we provide 
include resume writing, workshops on the Federal application process, 
and interviewing skills. These are only a few examples of the many 
proactive initiatives USAID has implemented to hire more veterans.
    Question. How many veterans currently work for USAID and in what 
capacities are they primarily employed? Do their USAID positions align 
with previous military experience, including conducting development and 
diplomacy on the front lines? What specific skills gained by our men 
and women in uniform during their service can advance USAID's mission?
    Answer. Currently, there are 306 veterans employed at USAID (8 
percent of the workforce). There are 204 veterans employed in the Civil 
Service, 101 employed in the Foreign Service, and 1 veteran employed as 
an Expert Consultant. Veterans are employed in a myriad of professional 
and administrative positions in both the Civil Service and the Foreign 
Service, including the position of Chief of the Office of Human 
Resources' Outreach and Marketing team, which leads recruitment.
    Our veterans' previous military experience allows them to 
transition directly into positions conducting development and diplomacy 
on the front lines. For example, during fiscal year 2011, USAID hired 
15 veterans on term-limited appointments to the Foreign Service to work 
on critical priority programs in Afghanistan and Pakistan, allowing a 
seamless transfer of skills gained in uniform to assist in advancing 
USAID's mission in the field.
    The discipline and work ethic that our veteran men and women bring 
to bear, coupled with their technical skills, make them well suited for 
a variety of positions at USAID. Veterans at USAID are currently 
working in occupations such as acquisition, administration, information 
technology, communications, security, human resources, engineering, 
public policy, finance, and education.
                         partner vetting system
    Question. When do you expect the joint State-USAID Partner Vetting 
System (PVS) pilot to become fully operational?
    Answer. The Department of State and USAID are working closely to 
implement the pilot program. The schedule is dependent upon several 
factors including the rulemaking process which mandates a specific 
comment and review period; upgrades to the database functionality to 
incorporate the secure portal; and, the completion of the Department of 
State's iteration of the PVS database. USAID and the Department of 
State expect to begin the deployment to the pilot missions by September 
30, 2012 as required by Public Law 112-174.
    Question. Would you support expanding PVS globally?
    Answer. The Department of State and USAID consider the pilot PVS 
program to be a true test, with a view toward providing both agencies 
with a deeper understanding of the ways to mitigate risk in the 
provision of foreign assistance and safeguard U.S. taxpayer funds, as 
well as, to determine the feasibility and utility of developing a 
worldwide system. The pilot will ensure that countries will be selected 
with a range of terrorist threat levels, rather than simply selecting 
five countries with high threat levels, to provide a broad range of 
useful data for evaluation. At the conclusion of the pilot program, 
USAID and the Department of State will evaluate the results and make 
determinations regarding future applications of the vetting process.
                                somalia
    Question. Can you provide an update on USAID's assistance efforts 
in Somalia, including on the ground presence, applicable restrictions 
on USAID operations, and any efforts to expand the scope of USAID 
operations?
    Answer. Since early 2011, the United States has provided more than 
$252 million to respond to humanitarian needs in Somalia. USAID 
humanitarian programs focus mainly on providing emergency food 
assistance and supporting immediate recovery in food security, economic 
recovery, protection, health, water, sanitation, and hygiene 
activities. USAID development programs complement these efforts by 
focusing on improving good governance, increasing economic growth, 
enhancing education and livelihood opportunities, reducing the appeal 
of extremism, and promoting stabilization in recovering areas.
    Due to the highly insecure environment, the U.S. Government has no 
permanent staff presence in Somalia; however, USAID works closely with 
international and local organizations working in the country to 
implement USAID-funded programs. USAID staff members located in 
Nairobi, Kenya, and Addis Ababa, Ethiopia, manage humanitarian and 
development programs. USAID uses a third-party contractor to monitor 
its work in-country, interspersed with limited in-country travel by 
USAID staff to monitor programs, meet with partners, and build 
relationships with key stakeholders.
    USAID is expanding its development and stabilization programming to 
areas vacated by al-Shabaab such as Mogadishu and along the Kenya and 
Ethiopian border. In terms of humanitarian assistance, access 
constraints, ongoing insecurity, and population displacement affect the 
provision of humanitarian assistance for affected populations in 
Somalia. Al-Shabaab controls many parts of central and Southern Somalia 
and has prevented 16 relief agencies from operating in areas under the 
group's control since November 2011. In addition, al-Shabaab terminated 
the agreement under which the International Committee of the Red Cross 
(ICRC) was allowed to deliver aid in January 2012 and revoked the 
permission of another organization to operate in areas under the 
group's control in March 2012.
    USAID's efforts are critical to prevent a deterioration of 
humanitarian conditions or a reversal of recent food security gains.
    Question. On February 3, 2012, the United Nations declared the end 
of famine conditions in Somalia.
    Do you share this assessment and if so, how do you expect it to 
impact USAID operations in fiscal years 2012 and 2013?
    Answer. The United Nations based its February 2012 declaration that 
famine had ended in Somalia on findings from the Famine Early Warning 
Systems Network and the U.N. Food Security and Nutrition Analysis Unit. 
USAID concurs with this assessment. While famine no longer exists due 
to a favorable harvest and increased humanitarian assistance, high 
levels of food insecurity, malnutrition, and other emergency conditions 
still exist.
    The situation remains extremely fragile and conditions could 
deteriorate due to another anticipated season of below-normal rainfall 
combined with the loss of household assets, constraints to humanitarian 
access, insecurity, and displacement.
    In fiscal year 2012 and fiscal year 2013, USAID plans to continue 
providing humanitarian assistance for Somalia in response to identified 
needs and evolving conditions.
    Question. Following the decision by the al-Shabaab terrorist 
organization to ban all international organizations from distributing 
aid to al-Shabaab-controlled territories, you wrote to the Congress on 
December 8, 2011 that USAID is working ``to determine the impact of 
this ban and identify alternative options for delivering humanitarian 
assistance'' to these areas.
    Can you provide additional details regarding these efforts?
    Answer. As of mid-March 2012, Al-Shabaab was preventing 16 relief 
agencies from operating in areas under the group's control and halted 
the operations of two others. These agencies include several large U.N. 
agencies and international relief organizations that had facilitated 
logistics and supply chains for other relief agencies. However, a 
number of international and local relief agencies continue to operate 
in areas of Central and Southern Somalia controlled by al-Shabaab.
    Al-Shabaab's ban on humanitarian organizations has substantially 
reduced relief activities in affected areas. The number of 
beneficiaries reached by the Food Assistance Cluster--the coordinating 
body for food-related assistance in Somalia--decreased from 
approximately 2.6 million in October to 1.6 million in January due to 
access challenges. This affected 7 of the 18 Cluster partners and 
created notable nutritional gaps in the Bay, Bakool, and Middle 
Shabelle regions. The ban also interrupted the distribution of 
essential health supplies, limiting access to life-saving 
interventions. Affected populations in the Bakool, Bay, Hiraan, and 
Middle Shabelle regions did not receive food vouchers in January as a 
result of the ban.
    As of mid-February, USAID's partners continued to coordinate to 
provide humanitarian assistance in nonpermissive areas to address 
shortages in health, nutrition, water, sanitation, and hygiene supplies 
as a result of the ban. As humanitarian access levels in Somalia 
change, USAID staff will continue to identify and support implementing 
partners and approaches that can best meet humanitarian needs.
    Question. Can you provide an accounting of USAID's distribution of 
assistance to Nagorno Karabakh (NK) for fiscal year 2011 and fiscal 
year 2012 to date, including a complete description of the projects, 
purpose, funding, and an assessment of goals achieved?
    Answer. United States assistance supports our diplomatic efforts, 
including Armenia's reconciliation with Azerbaijan, and resolution of 
the conflict over NK. Our humanitarian assistance is also helping to 
stabilize the region and prevent future conflict. Our commitment to NK 
assistance has remained steadfast despite the decline in overall 
funding and competing priorities. During fiscal year 2011, the United 
States provided $2 million in humanitarian assistance to the people of 
NK. A similar amount of assistance is planned for fiscal year 2012. 
U.S. assistance is roughly split between humanitarian demining and 
potable water projects. The demining activity, implemented by HALO 
Trust since 2001, focuses on clearing mines and returning lands to the 
rural population for agricultural use. Thus far 94 percent of anti-
personnel and anti-tank mines and 71 percent of the battle area have 
been cleared. Upon the current project's completion in December 2012, 
the U.S. Government will have invested more than $7.6 million in 
demining.
    We are concluding a potable water program which is expanding access 
to clean water in the city of Stepanakert. The program, totaling $2 
million upon completion this year, supports improvements to two 
independent water systems in Stepanakert which are expected to benefit 
more than 20,000 people. Water supplies are being improved through 
priority repairs to water mains, sand traps, and dikes; providing for 
rehabilitation and modernization; and installing water meters.
    Question. Can you provide the results of all needs assessments that 
USAID has conducted with regard to the NK since December 2007?
    Answer. In March 2012, USAID, through an independent consultant, 
conducted a rural water sector needs assessment. The final report is 
expected in mid-April. USAID is planning to conduct a thorough 
assessment on the remaining minefield clearance in NK in July 2012. The 
assessment will also be implemented by an independent consultant.
    Question. In rendering aid decisions concerning NK, do USAID 
officials interact and consult with their counterparts in the NK 
Government? Can you provide details of such interactions concerning 
fiscal year 2011 assistance or fiscal year 2012 to date? Are there any 
restrictions in place for any such interactions?
    Answer. The U.S. Co-Chair of the OSCE Minsk Group has the U.S. lead 
in mediating the Nagorno-Karabakh conflict and travels frequently to 
Nagorno-Karabakh. USAID personnel have traveled to Nagorno-Karabakh in 
the past with the concurrence of the U.S. Co-Chair to implement 
humanitarian aid programs. USAID's non-American local staff visits NK 
to monitor the two ongoing projects. For program coordination purposes, 
non-American local staff may meet with community leaders, municipality 
representatives, or representatives of particular services such as the 
water operations and maintenance unit and the rescue team (which 
includes a demining section), but does not discuss future funding 
decisions with central NK authorities.
    Question. Pursuant to report language in Public Law 112-74, how 
does USAID plan to assist vulnerable ethno-religious minorities in 
Iraq, specifically the Chaldo-Assyrian communities in the Nineveh 
Plains?
    Answer. To date, the United States Government has provided about 
$40 million in assistance to Iraq's minority communities. This includes 
Iraq's Christian communities including the Chaldo-Assyrians in the 
Ninevah Plains. Assistance has included both short-term humanitarian 
and long-term development projects.
    In 2010-2011, USAID assisted minority communities in the Ninevah 
Plains with various community development projects. USAID also provided 
apprenticeships to help members of these communities gain the skills 
needed to sustain their development. USAID-funded microfinance 
institutions benefiting minority communities in the Ninevah Plains are 
focusing on expanding access to credit to promote private sector growth 
which generates jobs and increases incomes.
    Access to Credit.--USAID is providing additional funding to 
existing USAID-supported microfinance institutions, small- and medium-
enterprise lending units, vocational training and apprenticeships 
available to minorities in the Ninevah Plains and other vulnerable 
groups.
    Access to Justice.--USAID assists minorities in the Ninevah Plains 
by increasing awareness of their rights as well as avenues for 
receiving remedies from the government through legal clinics and as 
well as by Iraqi civil society partners, including professional legal 
associations, law schools, human rights nongovernmental organizations 
(NGOs), and government partners.
    Civil Society.--USAID supports Iraqi civil society efforts to 
advocate on behalf of minorities to improve national, provincial, and 
local governments' responsiveness to needs identified by local 
communities.
    Governance.--Broad-based improvements in Iraqi livelihood and 
democratic governance will also directly and indirectly benefit Iraqi 
minority communities. In fiscal year 2013, USAID expects to fund 
governance and livelihoods projects. These projects will improve the 
effectiveness of Iraqi governance at all levels and encourage 
community-based development through partnerships with civil society 
organizations, among others.
    Question. According to USAID, ``Kosovo is the youngest country in 
Europe with more than 50 percent of Kosovars aged 25 or younger. The 
growing youth population that is unemployed (estimates range from 50 
percent-75 percent), disengaged, and disconnected is emerging as an 
urgent issue for the newly independent state.''
    In an effort to foster stability and economic development, would 
you support prioritizing United States assistance for Kosovo with a 
focus on education?
    Can you please provide an update on your efforts in this regard?
    Answer. USAID currently supports the basic education sector in 
Kosovo by enhancing school management capacities at the municipal 
level, strengthening the assessment of learning outcomes, and improving 
in-service teacher professional development and certification.
    Consistent with the Ministry of Education's reform strategy, USAID 
improves the capacity of primary schools to provide a modern education 
through advanced teacher professional development, as well as 
introducing technology for science and math teaching. The USAID basic 
education program enhances skills in Kosovo's youth that are important 
to Kosovo's economic future.
    Higher education funds support results-oriented programs to address 
specific issues related to human resource development and higher 
learning. Our assistance is aimed at improving systems and processes in 
Kosovo institutions, particularly those that will have a direct impact 
on Kosovo's economic growth and democratic stability.
    USAID is currently engaging in a feasibility analysis to determine 
the needs of strategically selected Kosovar higher education 
institutions in priority developments areas. The assessment will also 
address institutional partnerships, faculty exchanges and student 
scholarships, as these contribute to building and strengthening 
Kosovo's development institutions and societal transformation.
                             west bank/gaza
    Question. Can you provide a list of all NGOs that received funding 
(with name of group, funding amount, account/bureau providing funds, 
and purpose) from USAID in fiscal year 2011 and so far in fiscal year 
2012 for accounts/programs/projects operating in Israel, the West Bank 
and Gaza?
    Answer. USAID/West Bank and Gaza Economic Support Fund (ESF) 
Bilateral Program.--The international organizations referenced below 
are all prime recipients of USAID/West Bank and Gaza managed fiscal 
year 2011 ESF funding. This first set of responses focuses on prime 
recipients. We will provide shortly a second tranche of information 
that will include the sub-awards. Total fiscal year 2011 funding 
obligated to date is $37.55 million. The bulk of fiscal year 2011 ESF 
for West Bank and Gaza program funds have not been obligated yet due to 
congressional holds on these funds in place until very recently. Fiscal 
year 2012 funds have not been obligated yet. USAID will first notify 
the Congress of our plans for fiscal year 2012 funding, and only after 
that, can obligation occur.

    Name of Group: Chemonics International
    Fiscal Year 2011 Funded Amount: $12.1 million

    Purpose:
Palestinian Authority Capacity Enhancement (PACE)
    PACE works with Palestinian Authority (PA) agencies and ministries 
to expedite service delivery, improve financial and human resource 
management, and enhance accountability and transparency.
The Palestinian Justice Enhancement Program (PJEP)
    PJEP aims to strengthen the justice sector by building public 
confidence and respect for institutions and the rule of law.
Palestinian Health Sector Reform and Development Project (Health 
        Flagship Project)
    The Health Flagship Project works with the Palestinian Ministry of 
Health (MOH) to improve the core areas identified in the Palestinian 
National Health Strategic Plan:
  --governance;
  --human resources for health;
  --access to quality services; and
  --healthy behaviors.
    The project also connects health clinics, the communities they 
serve, and the private sector.
Trade Facilitation Program (TFP)
    The movement and access of Palestinian goods within the West Bank 
and to/from Gaza, and in and out of Israel and neighboring countries, 
remains key to all other economic growth objectives. TFP stimulates 
trade in the West Bank and Gaza and facilitates cargo movement through 
crossing points allowing Palestinian enterprises to generate employment 
and economic opportunities.
Investment Climate Improvement (ICI)
    ICI assists the PA in adopting and implementing laws, regulations, 
policies, and procedures to improve the Palestinian business and 
economic climate and promote domestic and foreign investment.

    Name of Group: AMIDEAST
    Fiscal Year 2011 Funded Amount: $900,000

    Purpose:
Model Schools Network (MSN)
    MSN improves the quality of basic education (grades 1-9) in the 
Palestinian territories. The MSN program focuses on the professional 
development of teachers and administrators within the model school 
network, particularly in the areas of English, math, and science.

    Name of Group: Education Development Center, Inc.
    Fiscal Year 2011 Funded Amount: $1.1 million

    Purpose:
Palestinian Youth Empowerment Program (Ruwwad)
    Ruwwad builds the leadership capabilities of youth by engaging them 
in community service learning including:
  --civic engagement;
  --economic opportunities;
  --leadership skills; and
  --sports and culture.

    Name of Group: International Youth Foundation
    Fiscal Year 2011 Funded Amount: $1.4 million

    Purpose:
Youth Entrepreneurship Development Program (YED)
    YED prepares in and out-of-school youth ages 14-29 for the job 
market by equipping them with the employment and entrepreneurial skills 
needed to find jobs in the public and private sector or to start their 
own businesses.

    Name of Group: American Near East Refugee Aid
    Fiscal Year 2011 Funded Amount: $3 million

    Purpose:
Emergency Water and Sanitation and Other Infrastructure (EWAS II)
    EWAS II provides rapid response and emergency relief primarily in 
the water and sanitation sectors, and in other sectors as needed. This 
project improves the supply of potable water to Palestinian communities 
facing serious water shortages by rehabilitating, expanding, and 
upgrading small- and medium-scale water and sewage systems. EWAS II 
also supports the improvement of basic Palestinian infrastructure needs 
by building and rehabilitating community health facilities, classrooms, 
and community and youth centers.

    Name of Group: CHF International
    Fiscal Year 2011 Funded Amount: $1.3 million

    Purpose:
Local Government and Infrastructure Program (LGI)
    LGI promotes good local governance practices and provides the basic 
infrastructure necessary for sustainable improvements in the quality of 
life for Palestinians. LGI strengthens local government capacity to 
respond effectively and efficiently to community needs through capacity 
building, institutional development, and service delivery skill 
enhancement initiatives; promotes and institutionalizes good governance 
practices; encourages public involvement through participatory 
governance mechanisms; and enhances the capacity of the Ministry of 
Local Government to assume regulatory, policy development, and 
strategic planning responsibilities.

    Name of Group: Development Alternatives Inc.
    Fiscal Year 2011 Funded Amount: $5,263,000

    Purpose:
Enterprise Development for Global Competitiveness Project
    The Enterprise Development for Global Competitiveness Project 
improves access to markets for Palestinian Small and Medium 
Enterprises. Additionally, it improves economic growth and access to 
services through the development of local business associations and 
business service providers.

    Name of Group: Black & Veatch Special Projects Corp.
    Fiscal Year 2011 Funded Amount: $5.8 million already obligated

    Purpose:
Infrastructure Needs Program II Architect and Engineering Contract (INP 
        II)
    INP II Architect-Engineering provides design, engineering, 
operations and maintenance, and construction management services 
required to implement multi-discipline, high-quality construction 
projects in the West Bank.

    Name of Group: United Nations World Food Program (WFP)
    Fiscal Year 2011 Funded Amount: $4 million

    Purpose:
Assistance to Vulnerable Groups
    The WFP provides high-quality food assistance (direct food 
distribution and electronic food vouchers) to help meet basic food 
needs and improve dietary diversity of the most vulnerable and food 
insecure nonrefugee populations in the West Bank and Gaza.

    Name of Group: Mercy Corps
    Fiscal Year 2011 Funded Amount: $1,550,000

    Purpose:
Palestinian Community Assistance Program (PCAP)
    PCAP addresses infrastructure recovery needs through tangible 
improvements in community infrastructure and housing; supports economic 
recovery and development through the creation of income generation and 
business development opportunities; and promotes social recovery 
through community outreach programs focused on mental well-being, 
childhood education, humanitarian assistance, and cash-for-work 
programs.

    Name of Group: CARANA
    Fiscal Year 2011 Funded Amount: $687,000

    Purpose:
Enterprise Development and Investment Promotion (EDIP)
    EDIP supports the development of businesses and business 
associations to achieve increased production and better marketing of 
their products and services. EDIP improves the capacity of Palestinian 
businesses to integrate into domestic and international markets through 
initiatives with business associations.

    Name of Group: International Relief & Development; American 
Intercontinental Constructors, LLC; CDM Constructors Inc; BLD Services, 
LLC; APCO/ArCon; The Morganti Group
    Fiscal Year 2011 Funded Amount: $450,000

    Purpose:
Infrastructure Needs Program II Construction (INP II)
    INP II provides critical infrastructure that promotes economic 
growth, and helps the PA address both immediate and long-term 
infrastructure needs. INP projects include the construction and 
rehabilitation of roads, water systems and distribution networks, 
wastewater systems, schools, and other necessary facilities.
           conflict management and mitigation grants program
    The organizations referenced below are all expected to receive 
fiscal year 2011 funding as part of the congressionally mandated fiscal 
year 2011 Conflict Management and Mitigation program which is managed 
at post by both USAID and U.S. Embassy Tel Aviv. The recipients of 
fiscal year 2012 funds for this program have not yet been decided.

    Name of Group: The Economic Cooperation Foundation
    Funding Amount: $1 million

    Purpose:
Jenin-Gilboa-Nablus-Haifa: Cooperation Zone
    Economic growth requires cooperation, personal interaction, and 
joint planning among neighbors. This program is expected to promote 
people-to-people activities in Jenin, Gilboa, and Haifa cross-border 
area in tourism, trade, and infrastructure planning to support the 
economic development of the region. The program will bring together 
local and national authorities and civil representatives to strategize 
and promote economic development.

    Name of Group: Catholic Relief Services
    Funding Amount: $1 million

    Purpose:
The Gemini Project
    The program will build the capacity of Arab and Jewish youth from 
Israel to engage in civil debate and encourage increased civic 
engagement using nonviolent approaches.

    Name of Group: The Hand in Hand Center for Jewish-Arab Education in 
Israel
    Funding Amount: $1.08 million

    Purpose:
Shared Community/School Integration
    Hand in Hand works to integrate Jews and Arab children in schools, 
and to integrate the communities where these schools are located by 
generating people-to-people activities among the residents and 
increasing interactions between community members.

    Name of Group: Mercy Corps
    Funding Amount: $1.19 million

    Purpose:
Technology for Peace
    The program will bring Palestinian and Israeli youth, 
entrepreneurs, and companies together to pursue the shared interest in 
information and communication technology (ICT) as an enhancing tool 
both for peace activism as well as for economic collaboration and 
growth. This 18-month program, designed in collaboration with three 
local partners in Israel and the West Bank, seeks to promote peace 
activism through the enhanced use of social media, to build the 
capacity of Palestinian youth in collaboration with Israeli companies 
and joint Palestinian/Israeli youth activities in ICT, and to encourage 
economic cooperation between Israelis and Palestinians in the ICT 
sector.

    Name of Group: The Parents Circle--Families Forum
    Funding Amount: $700,000

    Purpose:
Where Parallel Lines Meet
    The project engages Israeli and Palestinian participants in an 
effort to promote peace and reconciliation.

    Name of Group: Israel/Palestine Centre for Research and Information
    Funding Amount: $1 million

    Purpose:
Jewish and Arab Israeli Youth Defining Shared Citizenship Through 
        Collaborative Community Programs
    This program will help Jewish and Arab Israeli youth, living 
together in mixed cities in Israel, redefine the nature and quality of 
their citizenship, promoting a shared citizenship with shared 
responsibilities. Reconciliation and cooperation between these groups 
of youth will be fostered through collaborative community programs that 
serve a common goal and by facilitating the organization of programs by 
the youth that are beneficial for both communities living in the target 
cities.

    Name of Group: Mifalot--Hapoel Tel Aviv Soccer Club's Education and 
Social Project
    Funding Amount: $900,000

    Purpose:
United Soccer for Peace
    This is an Israeli Arab training program for coaches using soccer 
as a tool for peace education, conflict resolution, and community 
development in marginalized populations. Mifalot will use soccer to 
cultivate the proper environment for growth leading to social change. 
The aim is to train young men and women as licensed soccer coaches, 
cultivate them as community leaders, and at the same time instill in 
them values of peace and conciliation. The program is based on a grass 
roots approach toward peace and conciliation, starting with 
geographically and socially marginalized populations, populations 
normally ignored in the people-to-people dialogue.

    Name of Group: The Maccabim Association
    Funding Amount: $93,000

    Purpose:
Goals for Peace
    This program recognizes that Arab and Jewish children have minimal 
contact with each other in their formative educational years. This has 
resulted in a lack of trust and tolerance of each other based on the 
prejudices and stereotypes of their families, communities and a biased 
media. This program will implement joint Jewish-Arab soccer activities, 
as well as computer classes and dialogue programming to reach 
marginalized groups that normally would not have an opportunity to be a 
part of these activities and to provide an opportunity for interaction. 
The program uses soccer as an educational tool for increasing 
cooperation and team work, respect for rules and each other, and to 
enhance communication and dialogue among participants.

    Name of Group: Arab-Jewish Community Center
    Funding Amount: $100,000

    Purpose:
Jewish-Arab Class Exchange Program
    This program recognizes that the majority of Jewish and Arab youth 
have not been previously exposed to one another and is expected to 
contribute to increased tolerance and respect.

    Name of Group: The State University of New York (SUNY) New Paltz 
Institute for Disaster Mental Health
    Funding Amount: $96,917

    Purpose:
Families First: A Palestinian-Israeli People-to-People Approach To 
        Assist Children and Caregivers as a Means of Conflict 
        Mitigation and Reconciliation
    The program recognizes that children raised in this environment are 
likely to absorb and echo the violence that surrounds them. It will 
bring together Palestinian and Israeli health and social service 
professionals to work in partnership to work to prevent long-term 
conflict by addressing short-term mental health needs of children and 
families.

    Name of Group: The Arava Institute for Environmental Studies
    Funding Amount: $561,438

    Purpose:
Mitigating Trans-Boundary Waste-Water Conflicts
    This program aims to address, help reduce, and prevent further 
wastewater conflicts and disputes between Israel and the West Bank.

    Name of Group: Seeds of Peace
    Funding Amount: $951,745
    Purpose:
On Common Ground
    The program is designed to provide Palestinian and Israeli young 
leaders between the ages of 14-32, as well as local educators, with 
experiences, skillsets, and resources to find common ground on the core 
issues within and between their societies that perpetuate conflict and 
prevent peace.

    Name of Group: Sipurei Yerushalayim (Jerusalem Stories)
    Funding Amount: $100,000

    Purpose:
Storytelling Encounters: A Model Approach for Transforming Israeli-
        Palestinian Perceptions
    The program seeks to make Israelis and Palestinians understand and 
humanize each other through the use of storytelling, photographs, and 
video and will build on this tested approach to train Israeli and 
Palestinian youth leaders in a series of joint workshops so that they 
can introduce the power of storytelling as a conflict transformation 
tool to broader audiences throughout Israel and the West Bank.

    Name of Group: Kids Creating Peace
    Funding Amount: $100,000

    Purpose:
Sach-Ten: A Uniquely Interactive Reconciliation and Leadership Program 
        for Israeli and Palestinian Youth
    The Sach Ten program is a recognized professional peace education 
program coordinated by the Israeli Ministry of Education and several 
leading Palestinian schools and educational institutes.
                middle east regional cooperation (merc)
    The Israeli and Palestinian organizations listed below are all 
current recipients of USAID-managed ESF funding under the MERC program, 
funded through prior year funding. MERC's $3 million fiscal year 2011 
ESF was received in fiscal year 2012, and its distribution is dependent 
upon the completion of ongoing reviews of grant applications, expected 
to be finished by June 2012. MERC has not yet received its fiscal year 
2012 funding.
    MERC is a competitive research program that funds joint Arab-
Israeli research grants to address shared development problems and 
promote direct collaboration between Arab and Israeli researchers, 
students, and institutions. MERC accepts jointly authored Arab-Israeli 
research proposals on any research topic that the applicants can 
justify as likely to produce a lasting development result. The program 
funds a wide variety of scientific research, but most projects focus on 
subjects such as agriculture, water resources, health and the 
environment.
    The following Israeli NGOs are current MERC recipients and 
illustrative of the Israeli institutions expected to receive fiscal 
year 2011 and 2012 funds:
  --The Arava Institute for Environmental Studies;
  --The Assaf Harofeh Medical Center;
  --Bar-Ilan University;
  --Ben-Gurion University of the Negev;
  --The Galilee Society;
  --Hebrew University of Jerusalem;
  --Shaare Zedek Medical Center;
  --The Technion Institute;
  --Tel Aviv University; and
  --The University of Haifa.
    The following Palestinian NGO are current MERC recipients and 
illustrative of the Palestinian institutions expected to receive fiscal 
year 2011 and 2012 funds:
  --Al-Quds University;
  --Augusta Victoria Hospital;
  --Beit Jalla Hospital;
  --Bethlehem University (a subsidiary of the Roman Catholic Church);
  --The Biodiversity and Environmental Research Center;
  --Caritas Baby Hospital, Children's Relief of Bethlehem;
  --The Environmental Protection Research Institute;
  --The House of Water and Environment;
  --The Palestinian Agricultural Relief Committee; and
  --The Princess Basma Center for Disabled Children.
    MERC funds are typically awarded to Israeli Government ministries 
and NGOs that serve as prime grantees and issue sub-awards to partner 
institutions in six Arab countries and Israel. Of the 37 projects 
active in 2011, 29 had been awarded to Israeli prime grantees, 5 to 
Jordanian primes, and 3 to primes in the United States. All of the 
Palestinian institutions listed above are sub-grantees of Israeli 
primes. Many institutions are on more than one project.
                 american schools and hospitals abroad
    USAID's Office of American Schools and Hospitals Abroad (ASHA) 
provides grants to competitively selected private, nonprofit 
universities and secondary schools, libraries, and medical centers 
abroad. The list below represents grants for Israeli and Palestinian 
institutions that received fiscal year 2011 ASHA funding. Fiscal year 
2012 funding decisions have not been made at this time.

    U.S. Organization: Trustees of the Feinberg Graduate School of the 
Weizmann Institute
    Organization Name: Feinberg Graduate School of the Weizmann 
Institute of Science
    Funding Amount: $1,000,0000
    Purpose: To acquire critically needed scientific instrumentation 
for Feinberg Graduate School educational and research activities in 
science education, energy/environment, and genome-based biomedicine 
programs.

    U.S. Organization: Hadassah Medical Relief Association, Inc.
    Organization Name: Hadassah Medical Center
    Funding Amount: $1,600,000
    Purpose: To acquire American-manufactured equipment and state-of-
the-art surgical equipment that will improve patient care at Hadassah 
Medical Center.

    U.S. Organization: Friends United Meeting
    Organization Name: Ramallah Friends School
    Funding Amount: $1,000,0000
    Purpose: To expand classroom capacity for art and music 
instruction, upgrade existing facilities to make them handicap 
accessible, update classroom technology, renovate guest rooms, and 
install photovotaic hybrid power plant.

    U.S. Organization: American Committee for Shaare Zedek Hospital in 
Jerusalem, Inc.
    Organization Name: Shaare Zedek Medical Center
    Funding Amount: $500,000
    Purpose: To replace obsolete equipment with American-standards 
models by purchasing new defibrillators, a new EKG system and new 
recovery monitors for the Post Anesthesia Care Unit.

    U.S. Organization: American Society of the Most Venerable Order of 
the Hospital St. John of Jerusalem
    Organization Name: St. John's Eye Hospital Group
    Funding Amount: $300,000
    Purpose: To purchase a set of highest-quality diagnostic and 
surgical equipment and instruments to expand the existing retinal care 
unit to benefit 10,000 patients annually.

    U.S. Organization: American Friends Tel Aviv University
    Organization Name: Tel-Aviv University
    Funding Amount: $325,000
    Purpose: To purchase American equipment for research to develop 
vaccines and therapies for HIV/AIDS, hepatitis, and other diseases 
prevalent and deadly in Africa and third world countries.

    U.S. Organization: American Friends of The Hebrew University
    Organization Name: The Hebrew University of Jerusalem
    Funding Amount: $500,000
    Purpose: To purchase next-generation genomic DNA sequencer and 
accessory liquid handling work station, essential for research 
uncovering roots of human disease to promote diagnosis, prognosis, and 
treatment.
    Question. Does USAID track the public statements made or events 
held by USAID-funded NGOs with regard to incitement against Israel or 
Jews?
    In a yes or no answer, do you believe USAID should provide funds to 
NGOs in Israel, the West Bank or Gaza that compare the State of Israel, 
Israelis, Jews, or Zionism to Nazis?
    In a yes or no answer, do you believe USAID should provide funds to 
NGOs in Israel, the West Bank or Gaza that support boycotts of, 
divestment from or sanctions against the State of Israel?
    In a yes or no answer, do you believe USAID should provide funds to 
NGOs that accuse Israel of ``the slaughter of Palestinian children'', 
``massacre'', ``cultural genocide'', ``war crimes'', or ``apartheid''?
    Answer. The United States has firmly and consistently condemned 
incitement to violence and called on both sides to take action to end 
such activity.
    Under the Roadmap for Peace brokered by the Quartet in 2003, both 
Israel and the Palestinian Authority are committed to ending 
incitement. The Palestinian Authority has made significant progress 
since the 1990s in combating official incitement to violence through 
measures that include undertaking revisions of official PA textbooks 
and reducing inflammatory rhetoric.
    We continue to work in a variety of ways to combat incitement. 
Also, in ongoing discussions with senior Palestinians, we continue to 
stress the importance of avoiding any actions that would constitute 
incitement.
    USAID also employs robust and effective measures to ensure that all 
of our assistance to the Palestinian people is only used when, where, 
and by whom we have authorized.
    Local NGOs that receive U.S. assistance, including sub-grantees, 
are vetted to ensure no terrorist connections. In addition to vetting, 
USAID has in place other mandatory anti-terrorism procedures including 
the requirement that an NGO receiving USAID assistance first sign the 
anti-terrorism certification, mandatory clauses in contracts and grants 
reminding awardees of their duty to comply with U.S. laws, and 
monitoring and audits of all programs in order to safeguard U.S. 
investments. These anti-terrorism procedures are described in more 
details below:
      Vetting.--Before making an award of either a contract or a grant 
        to a local NGO, the USAID West Bank/Gaza mission checks the 
        organization against lists maintained by the Office of Foreign 
        Assets Control within the Department of the Treasury. The 
        mission also checks all non-U.S. organizations and their 
        principal officer, directors, and other key individuals through 
        law enforcement and intelligence community systems accessed by 
        USAID's Office of Security. The mission collects the 
        individual's full name, government-issued photo identification 
        number, and the individual's date and place of birth.
      Anti-Terrorism Certification.--All NGOs applying for grants from 
        USAID are required to certify, before award of the grant will 
        be made, that they do not provide material support to 
        terrorists.
      Mandatory Clauses.--All contracts and grants also contain a 
        mandatory clause reminding awardees of their duty to comply 
        with U.S. laws and Executive orders prohibiting assistance to 
        terrorist organizations.
      Monitoring and Audits.--Once an award has been made, USAID has 
        established procedures to safeguard U.S. investments and ensure 
        the transparency and integrity of U.S. assistance. In order to 
        ensure that funding through local and U.S. NGOs is used only 
        for agreed-upon purposes, all NGOs are required to submit 
        quarterly financial reports to USAID on how funds are spent. 
        The annual appropriation act requires an audit of all direct 
        USAID grantees, contractors and significant subgrantees and 
        subcontractors on an annual basis to ensure, among other 
        things, compliance with vetting. In addition, the annual 
        appropriation act requires a Government Accountability Office 
        audit of the WB/G program, including the cash transfer.
                                 ______
                                 

                         CONCLUSION OF HEARINGS

    Senator Leahy. Thank you all for being here.
    I don't want to embarrass her, but there is one member of 
the audience who I first knew of when she was just 3 days old, 
Suphada Rom, and I want to take a moment to say hello to her 
before I leave.
    Thank you.
    Dr. Shah. Thank you, Senator.
    [Whereupon, at 11:30 a.m., the hearings were concluded, and 
the subcommittee recessed, to reconvene subject to the call of 
the Chair.]
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