[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]



 
   ASSESSING U.S. FOREIGN ASSISTANCE PRIORITIES IN EAST ASIA AND THE 
                                PACIFIC

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


                                HEARING

                               BEFORE THE

                  SUBCOMMITTEE ON ASIA AND THE PACIFIC

                                 OF THE

                      COMMITTEE ON FOREIGN AFFAIRS
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED THIRTEENTH CONGRESS

                             FIRST SESSION

                               __________

                              MAY 16, 2013

                               __________

                           Serial No. 113-26

                               __________

        Printed for the use of the Committee on Foreign Affairs


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                                 ______
                      COMMITTEE ON FOREIGN AFFAIRS

                 EDWARD R. ROYCE, California, Chairman
CHRISTOPHER H. SMITH, New Jersey     ELIOT L. ENGEL, New York
ILEANA ROS-LEHTINEN, Florida         ENI F.H. FALEOMAVAEGA, American 
DANA ROHRABACHER, California             Samoa
STEVE CHABOT, Ohio                   BRAD SHERMAN, California
JOE WILSON, South Carolina           GREGORY W. MEEKS, New York
MICHAEL T. McCAUL, Texas             ALBIO SIRES, New Jersey
TED POE, Texas                       GERALD E. CONNOLLY, Virginia
MATT SALMON, Arizona                 THEODORE E. DEUTCH, Florida
TOM MARINO, Pennsylvania             BRIAN HIGGINS, New York
JEFF DUNCAN, South Carolina          KAREN BASS, California
ADAM KINZINGER, Illinois             WILLIAM KEATING, Massachusetts
MO BROOKS, Alabama                   DAVID CICILLINE, Rhode Island
TOM COTTON, Arkansas                 ALAN GRAYSON, Florida
PAUL COOK, California                JUAN VARGAS, California
GEORGE HOLDING, North Carolina       BRADLEY S. SCHNEIDER, Illinois
RANDY K. WEBER SR., Texas            JOSEPH P. KENNEDY III, 
SCOTT PERRY, Pennsylvania                Massachusetts
STEVE STOCKMAN, Texas                AMI BERA, California
RON DeSANTIS, Florida                ALAN S. LOWENTHAL, California
TREY RADEL, Florida                  GRACE MENG, New York
DOUG COLLINS, Georgia                LOIS FRANKEL, Florida
MARK MEADOWS, North Carolina         TULSI GABBARD, Hawaii
TED S. YOHO, Florida                 JOAQUIN CASTRO, Texas
LUKE MESSER, Indiana

     Amy Porter, Chief of Staff      Thomas Sheehy, Staff Director

               Jason Steinbaum, Democratic Staff Director
                                 ------                                

                  Subcommittee on Asia and the Pacific

                      STEVE CHABOT, Ohio, Chairman
DANA ROHRABACHER, California         ENI F.H. FALEOMAVAEGA, American 
MATT SALMON, Arizona                     Samoa
MO BROOKS, Alabama                   AMI BERA, California
GEORGE HOLDING, North Carolina       TULSI GABBARD, Hawaii
SCOTT PERRY, Pennsylvania            BRAD SHERMAN, California
DOUG COLLINS, Georgia                GERALD E. CONNOLLY, Virginia
LUKE MESSER, Indiana                 WILLIAM KEATING, Massachusetts


                            C O N T E N T S

                              ----------                              
                                                                   Page

                               WITNESSES

Mr. Joseph Y. Yun, Acting Assistant Secretary, Bureau of East 
  Asian and Pacific Affairs, U.S. Department of State............     5
The Honorable Nisha Biswal, Assistant Administrator, Bureau for 
  Asia, U.S. Agency for International Development................    16

          LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING

Mr. Joseph Y. Yun: Prepared statement............................     7
The Honorable Nisha Biswal: Prepared statement...................    18

                                APPENDIX

Hearing notice...................................................    40
Hearing minutes..................................................    41


   ASSESSING U.S. FOREIGN ASSISTANCE PRIORITIES IN EAST ASIA AND THE 
                                PACIFIC

                              ----------                              


                         THURSDAY, MAY 16, 2013

                       House of Representatives,

                 Subcommittee on Asia and the Pacific,

                     Committee on Foreign Affairs,

                            Washington, DC.

    The subcommittee met, pursuant to notice, at 2:01 p.m., in 
room 2172, Rayburn House Office Building, Hon. Steve Chabot 
(chairman of the subcommittee) presiding.
    Mr. Chabot. The committee will come to order.
    I would like to welcome and thank everyone for attending 
the Subcommittee on Asia and the Pacific's hearing this 
afternoon.
    Mr. Bera will be sitting in for the ranking member, Eni 
Faleomavaega, who could not be with us here today. Mr. Bera and 
I will make opening statements, and other members will be 
recognized for 1 minute to make a statement if they wish to do 
so.
    We want to start this on time because we are going to have 
votes shortly. We will vote and then come back, but we can get 
in as much as possible before that.
    This hearing was called to further assess the Fiscal Year 
2014 State Department and U.S. Agency for International 
Development, USAID, budget request for the East Asia and the 
Pacific region. It follows Secretary of State Kerry's and USAID 
Administrator Shah's testimony received at the full committee 
last month.
    The Asia-Pacific region is receiving the largest proposed 
budget increase of any other region, which makes it critical 
that we focus on this portion of the budget request and hear 
from State Department and USAID about how the additional funds 
for this region will fulfill U.S. priorities and national 
security objectives. Of particular interest are those nations 
receiving a significant increase in foreign assistance, notably 
Burma, Indonesia, and the Philippines.
    I believe all of us in this room today know how important 
Asia is politically, militarily, and economically. The 
administration refers to a foreign policy rebalance. Congress 
has also recognized Asia's importance. In the last 2\1/2\ 
years, three Presidents or Prime Ministers have addressed a 
joint session of Congress. All three have been from the Asia-
Pacific region, including South Korea's President Park, who 
spoke in the Capitol just last week. But while we all note the 
region's geopolitical significance, such a substantial increase 
in foreign assistance funding must be justified as providing an 
equally substantial return on the taxpayer investment.
    The Asia-Pacific is a region which faces many challenges, 
among them: Nuclear proliferation, human trafficking, 
terrorism, widespread corruption, natural disasters, poverty, 
and complex security threats, all of which have bilateral and 
multilateral implications. Today we have come face-to-face with 
what will undoubtedly be one of our greatest challenges in 
Asia, North Korea's belligerence and nuclear ambitions. We also 
have major concerns about China's growing political and 
economic influence throughout the region and its aggression in 
the South and East China Seas. In the face of such challenges, 
no single one-track approach to ensuring U.S. national security 
interests and priorities will suffice, but it must be 
multipronged. I hope the witnesses here today will elaborate on 
the administration's plans for confronting these threats.
    The administration seeks a $53.3 million budget increase 
for the Asia-Pacific region. It proposes expanding foreign 
assistance, with the goals of strengthening regional security, 
enhancing economic integration, developing the Lower Mekong 
region, supporting democratic developments, and addressing war 
legacies.
    In today's fiscal environment, as we face our own nearly 
$16.8 trillion national debt, this $53.3 million is not chump 
change. The entire Asia-Pacific budget of $1.2 billion must be 
thoroughly examined. For example, the administration is 
proposing providing Burma with an additional $28.8 million. 
While we have seen tremendous progress over the course of only 
2 years, Burma is fraught with ongoing violence in the ethnic 
areas, which, in many cases, is being perpetrated by the 
Burmese military. There are few signs reconciliation is 
forthcoming, and reforms have yet to benefit Burma's diverse 
communities. Our U.S. Embassy staff on the ground cannot travel 
outside specified zones, and there have been roughly 1,300 
additional people unlawfully detained in the ethnic areas.
    I think President Thein Sein's visit to the White House 
next week is perhaps a bit premature. While we have seen 
advances, it is too early, in my view, to proclaim a new day in 
Burma. In addition, I am aware that the administration is 
considering providing military assistance to Burma. Frankly, I 
believe, with the slow-moving reform process and numerous human 
rights issues remaining in Burma, considering providing 
military aid is probably premature and may face considerable 
opposition in this Congress.
    Similarly, the increase in military assistance to Cambodia, 
I believe, may very well be unwarranted. I hope today's 
witnesses will explain the reasoning behind this request.
    There are many other areas of concern that I am sure my 
colleagues will address this afternoon--one of them is the 
continuing and unjustified assistance to Beijing that is aimed 
at promoting job growth in China. When many Americans are still 
struggling to make ends meet and find jobs, we should not be 
using American tax dollars to subsidize a country that owns 
$1.2 trillion of U.S. debt, steals our technologies, and puts 
U.S. companies out of business and American workers oftentimes 
out of work.
    I welcome increased U.S. attention and engagement in Asia 
because our economic security and political development depends 
on the success of each other. At the same time, our strategy 
needs to be judicious and discerning. We should not be funding 
projects just because we can. The truth is, we can't afford to 
take that approach anymore.
    I look forward to hearing from our distinguished witnesses 
this afternoon.
    I now yield to Mr. Bera for his opening remarks, if he can 
make them in 5 minutes.
    Mr. Bera. Absolutely.
    Mr. Chabot. Okay. Excellent. The gentleman is recognized.
    Mr. Bera. Thank you, Mr. Chabot.
    And thank you, Mr. Yun, Ms. Biswal, for being here.
    U.S. policy toward the Asia-Pacific reflects the growing 
importance of the Pacific Rim to our own country's prosperity. 
The region is home to two-thirds of the world's population and 
many of the world's fastest-growing economies.
    The rapid growth of this region presents both 
opportunities, but it also presents challenges for our 
strategic interests. Robust engagement there is necessary 
because it promotes U.S. economic interests as well as regional 
and global peace and stability.
    As the region rapidly grows and transforms, a sustained and 
visible U.S. commitment is increasingly essential. Our 
country's future prosperity and security will be defined by 
events and developments in this important region. The State 
Department's Bureau of East Asian and Pacific Affairs 
rebalances our country's relationship across the Asia-Pacific, 
strengthens multilateral engagement, enhances security 
cooperation, supports democracy and human rights, and taps into 
the regional markets which are key to U.S. economic growth.
    At $1.2 billion, a 7 percent increase over Fiscal Year 2012 
levels for the Asia-Pacific region, EAP's Fiscal Year 2014 
budget request supports the Obama administration's rebalance to 
the Asia-Pacific. This funding will help support democratic 
reform in key countries and will assist in shaping the region's 
emerging security landscape.
    U.S. assistance will also focus on renewing our leadership 
in this region, deepening economic ties, promoting democratic 
values, strengthening diplomatic engagement, and broadening the 
U.S. security presence.
    I am also pleased that the administration plans to 
strengthen regional organizations such as the Association of 
Southeast Asian Nations and the East Asia Summit. Stronger 
multilateral institutions in Asia are necessary to promote 
stability and act as a counterweight to China's rapid 
expansion.
    With regards to specific countries, the budget request for 
Burma is a substantial increase above the Fiscal Year 2012 
level. The additional funds will support the country's 
democratic gains following the dramatic political gains of the 
past 2 years. The funding will also address humanitarian needs 
both within and across Burma's borders, as well as promote 
national reconciliation, a vital issue given the ongoing ethnic 
conflicts.
    The Philippines is another country that will see a 
significant budget increase. Specifically, the Fiscal Year 2014 
budget requests additional funding to help the Philippines, a 
treaty ally of ours, build their maritime security 
capabilities. Given the ongoing disputes and security 
challenges in the region, it is important that we deepen our 
traditional security ties to promote a stable and peaceful 
Asia-Pacific.
    And, last, foreign assistance to countries in the Asia-
Pacific is not a gift. The United States provides foreign aid 
because it serves our interests--security, economic, and 
political interests--and because it reflects our values. U.S. 
assistance is also a vital sign of our country's deep 
commitment to the Asia-Pacific region.
    Mr. Chairman, thank you for calling this important hearing, 
and I look forward to hearing from our witnesses.
    Mr. Chabot. Thank you very much, Mr. Bera.
    At this time, we are going into recess to vote. We will be 
back in probably 30 minutes or so. We are in recess.
    [Recess.]
    Mr. Chabot. The committee will come back to order.
    I would now like to recognize the gentleman from 
California, Mr. Sherman, for the purpose of making an opening 
statement.
    Mr. Sherman. Okay. Virtually all my statements will be 
about our trade deficit and our trade agreements, because 
virtually all of our trade deficit is attributable to the 
region we are focused on.
    We have a huge trade deficit. It is as big a problem as our 
budget deficit; it just receives far less attention. Those who 
believe that we should always blame America first will argue 
that we have a big trade deficit because we have a Federal 
budget deficit. But we had a budget surplus in the latter part 
of the last century, and we still had a huge trade deficit.
    Excuse me, Mr. Chairman. Am I limited to 1 minute?
    Mr. Chabot. Yeah.
    Mr. Sherman. Ah.
    Mr. Chabot. We will make it 2 minutes, in your case.
    Mr. Sherman. Okay.
    Mr. Chabot. So the gentleman is recognized for an 
additional 1 minute, plus the 20 seconds that he still has on 
the first minute.
    Mr. Sherman. Good.
    Mr. Chabot. It was really good, by the way.
    Mr. Sherman. Oh, okay.
    And so the real question, why are we running a huge trade 
deficit, it is either because our workers and entrepreneurs are 
worse or our Government is worse, at least worse than our 
trading partners, at promoting U.S. exports and deterring 
imports and working for a better trade deficit.
    And this is consistent with what I see in the Foreign 
Service of the United States and other countries. I talk to the 
Foreign Service of other countries. Promoting trade and exports 
is the most prestigious thing they can do. Then I talk to those 
in the State Department, and I have seen just egregious 
mistakes made by very intelligent people, which only happens 
when it is a matter they don't really care about, but they are 
trying to seem like they care when they are talking to a 
Congressman.
    We see China not allowing our movies in, except in limited 
numbers, and yet we allow an unlimited number of Chinese tennis 
shoes in. And we have never threatened one with the other.
    And we see Japan not only engaging in quantitative easing 
but also intervening in the currency markets. And all they are 
greeted with from the United States is sympathy that they have 
a bad economic situation. Well, by God, we have a bad economic 
situation, and currency manipulation is something that ought to 
be at the highest levels of the State Department. And it will 
at least be a part of this hearing.
    I yield back.
    Mr. Chabot. Thank you. The gentleman's time has expired.
    I would now like to introduce our distinguished panel here 
this afternoon.
    We will begin with the Acting Assistant Secretary Joseph 
Yun of the Bureau of East Asian and Pacific Affairs at the 
Department of State. He previously held the position of 
Principal Deputy Assistant Secretary. After joining the Foreign 
Service in 1985, he has held overseas postings in the Republic 
of Korea, Thailand, France, Indonesia, and Hong Kong. Before 
joining the Foreign Service, Mr. Yun was a senior economist for 
Data Resources, Inc., in Lexington, Massachusetts.
    We welcome you here this afternoon, Mr. Yun.
    I would also like to introduce Nisha Biswal, who has served 
as USAID's Assistant Administrator for Asia since September 
20th, 2010. Prior to her appointment, she served as the 
majority clerk for the State Department and Foreign Operations 
Subcommittee on the Committee on Appropriations in the U.S. 
House of Representatives. She has also served as the director 
of policy and advocacy at InterAction and as a professional 
staff on the House Foreign Affairs Committee, where she was 
responsible for South and Central Asia policy. Ms. Biswal has 
also worked with the American Red Cross, both in their 
Washington headquarters and overseas as an international 
delegate in Armenia, Georgia, and Azerbaijan.
    We welcome you both here this afternoon.
    I know you are familiar with our rules. We have the 5-
minute rule for witnesses and ourselves. The yellow light will 
come on when you have a minute to wrap up. When the red light 
comes on we would appreciate it if you would complete your 
statements.
    You are recognized for 5 minutes, Mr. Yun. Thank you for 
being here.

  STATEMENT OF MR. JOSEPH Y. YUN, ACTING ASSISTANT SECRETARY, 
 BUREAU OF EAST ASIAN AND PACIFIC AFFAIRS, U.S. DEPARTMENT OF 
                             STATE

    Mr. Yun. Mr. Chairman, Mr. Bera, and distinguished members 
of the subcommittee, thank you for----
    Mr. Chabot. You might want to pull the mic a little bit 
closer so everybody in the back can hear, too. Thank you very 
much.
    Mr. Yun. Thank you for the opportunity to appear before you 
to testify on the Bureau of East Asian and Pacific Affairs 
budget request for Fiscal Year 2014.
    With your permission, Mr. Chairman, I would like to make 
brief remarks and submit a more detailed written testimony for 
the record.
    Mr. Chabot. Without objection, so ordered.
    Mr. Yun. At the outset of this administration, the 
President made a strategic decision to increase focus on the 
Asia-Pacific region. The President's approach recognizes that 
the United States is a Pacific power whose people, economy, and 
interests are increasingly linked with Asia's economic security 
and political development.
    The Fiscal Year 2014 budget reflects this strategic 
priority. Our budget request was crafted in full recognition of 
our current budgetary constraints, as well as the expectations 
of the American people to use their tax dollars wisely.
    I am grateful for the opportunity to come before you, along 
with my good friend Nisha Biswal, to discuss what is at stake 
in a region with over half the world's population and nearly 
half of the world's global trade.
    First, these efforts create and sustain American jobs. 
Economic vitality in the United States depends on the ability 
of U.S. firms to tap the growing base of the demand for goods 
and services in the Asia-Pacific region. Our diplomatic and 
development resources in the region support U.S. jobs by 
promoting open markets, protecting intellectual property, and 
helping U.S. Firms compete for foreign contracts.
    U.S. exports to Asia-Pacific reached almost $400 billion in 
2012, up 26 percent in 4 years. Through expanded engagement 
with China on investment, the value of Chinese greenfield 
investment and acquisitions in the United States has risen 
dramatically, from less than $500 million annually prior to 
2009 to $6.5 billion by 2012. These inflows of capital support 
more American jobs.
    Public diplomacy and consular operations throughout the 
Asia-Pacific bring millions of tourists and foreign students to 
the United States each year, with students from East Asia 
contributing, we estimate, $9 billion annually to the U.S. 
economy.
    Second, our funding resources make the United States more 
secure. In cooperation with the Defense Department and other 
agencies, our security assistance programs help maintain peace 
and security across the Asia-Pacific, including efforts to deal 
with North Korea, stem proliferation, maintain freedom of 
navigation, and promote transparency and human rights.
    Third, our budget promotes democracy, human dignity, and 
the rule of law. For example, in Burma, the United States is 
supporting a historic political and economic transition through 
targeted assistance to promote the rule of law, respect for 
human rights, a robust civil society, and the development of a 
transparent, accountable government that is responsive to the 
needs of the people.
    The overall Fiscal Year 2014 budget requests for the State 
Department and USAID to provide $1.2 billion in funding for 
East Asia and the Pacific, which reflects a 7.1 increase from 
Fiscal Year 2012 in support of the East Asia rebalance. This is 
the largest percentage increase of any region.
    The request expands foreign assistance funding to the Asia-
Pacific region to $768 million from $715 million in Fiscal Year 
2012.
    On the State operations request, the budget provides an 
additional $25.9 million for program and supporting costs, 
including funding to add 24 new positions to fill needs at our 
Embassies and our regional bureau offices.
    To conclude, Mr. Chairman, U.S. leadership in the Asia-
Pacific region will pay dividends for our security and 
prosperity well into this century, just as our post-World War 
II commitment to Europe created a similar transatlantic network 
of institutions and relationships.
    Thank you, Mr. Chairman, for inviting me to testify today, 
and I am pleased to answer any questions you may have.
    Mr. Chabot. Thank you very much, Mr. Yun.
    [The prepared statement of Mr. Yun follows:]

    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
                              ----------                              

    Mr. Chabot. Ms. Biswal, you are recognized for 5 minutes 
also.

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

    Ms. Biswal. Thank you, Chairman Chabot and Congressman Bera 
and members of the committee. Thank you for the opportunity to 
testify today on the President's Fiscal Year 2014 budget 
request for East Asia and the Pacific.
    In the interest of time, I, too, will summarize my 
statement and ask that the full statement be entered into the 
record.
    Mr. Chabot. Without objection, so ordered.
    Ms. Biswal. Thank you, Mr. Chairman.
    And let me begin by thanking you, sir, for your leadership, 
and this committee for laying the bipartisan foundation of 
support for increased U.S. engagement in the Asia-Pacific 
region.
    As my esteemed colleague Joe Yun has articulated, the 
rebalance of the Asia-Pacific region is a key economic and 
national security priority. Deepening our engagement is 
sensible and strategic in a region that is home to two-thirds 
of the world's population and some of the fastest-growing 
economies, but one that also encompasses nearly 30 percent of 
the world's poor.
    We know that Asia faces serious development challenges, 
such as inequitable growth, poverty and malnutrition, the 
threat of pandemic diseases, environmental degradation, and 
natural disasters, just to name a few. President Obama has 
noted that Asia will largely define whether the coming century 
will be marked by conflict or cooperation, by needless 
suffering or human progress.
    USAID's role is to provide the platform for partnership and 
technical cooperation with the countries of the region to 
ensure that we are advancing human progress and cooperation. To 
that end, the President's budget requests $768.3 million for 
international assistance programs for East Asia and the 
Pacific, and as Joe noted, an increase of 7.5 percent compared 
to Fiscal Year 2012.
    Our programs in the region are focused on supporting 
bilateral and regional efforts to address these challenges by 
investing in health and human capacity, by strengthening food 
security, and helping the region address the impacts of global 
climate change.
    At the same time, we recognize that a critical constraint 
to inclusive and efficient growth is persistent and pervasive 
corruption, weak systems of governance, and continuing 
challenges to human rights. So much of our assistance also 
focuses on these priorities.
    Across the region, we will devote 33 percent of the request 
to improving health outcomes. Four countries--Cambodia, 
Indonesia, Philippines, and Vietnam--are the priority or focus 
countries for the Global Health Initiative. And our support has 
helped improve maternal and child health and reduced the spread 
of infectious diseases such as HIV, avian influenza, malaria, 
and tuberculosis.
    Asia is also home to 62 percent of the world's hungry and 
70 percent of undernourished children. The President's Feed the 
Future initiative is increasing agricultural productivity and 
food security through a comprehensive approach that invests in 
the entire agricultural value chain.
    But sustainable economic growth and agricultural 
development require effective stewardship of the region's 
natural resources and biodiversity. And so we direct 17 percent 
of the 2014 request to share best practices, tools, and 
technologies for conserving forests, coral reefs, and 
fisheries, promoting clean energy, supporting climate change 
adaptation, and combatting illegal wildlife trafficking.
    And in a region that experiences over 60 percent of global 
natural disasters, we are helping improve disaster response 
capabilities across the region so that countries in the region 
can handle these disasters when they happen. As we speak, our 
Office of Foreign Disaster Assistance personnel are on the 
ground in Burma and Bangladesh working with local partners and 
the United Nations to help prepare for and respond to Cyclone 
Mahasen.
    The budget request prioritizes support for political and 
economic transition in Burma, the Partnership for Growth in the 
Philippines, and the Comprehensive Partnership with Indonesia, 
as well as resources to consolidate democratic gains in 
Mongolia.
    Finally, we also address issues of strengthening regional 
institutions, such as the ASEAN Secretariat, and our work with 
the Lower Mekong countries to address transnational issues and 
promote regional integration.
    Mr. Chairman, we recognize that to do all that I have laid 
out we cannot be business as usual. And so as part of the USAID 
reforms, we are changing the way we do business in three major 
ways: A greater emphasis on local partnerships to ensure 
sustainable solutions; a focus on science, technology, and 
innovation to ensure that we are bringing the latest, most 
efficient tools; and a focus on partnerships that leverage 
private-sector and other donor resources. We think that this is 
critical to advancing our interests in the region and advancing 
prosperity for the countries of Asia.
    Thank you for the opportunity to testify, and I welcome 
your questions.
    Mr. Chabot. Thank you very much.
    [The prepared statement of Ms. Biswal follows:]

    
    
    
    
    
    
    
    
    
    
    
    
                              ----------                              

    Mr. Chabot. We appreciate the testimony of both witnesses 
here this afternoon.
    Now we have 5 minutes to ask questions, and we will stay 
within our 5 minutes as much as possible. I will begin by 
recognizing myself for 5 minutes.
    Mr. Yun, I will begin with you. I would like to start with 
something that the ranking member, Eni Faleomavaega, and I feel 
very strongly about, and are very concerned about. That is the 
recent attack on the Taiwanese fishing vessel by a Philippine 
Government ship that resulted in the death of a Taiwanese 
national.
    I hope you will take just a moment to address this issue 
and advise us as to any discussions that the administration 
might be having with Philippine Government officials regarding, 
for example, an official apology to Taiwan or compensation to 
the victim's families or any other action that might be 
contemplated at this time.
    Mr. Yun. Thank you, Mr. Chairman.
    On this very tragic incident, number one, we would very 
much like to convey our condolence to the family for the loss 
of life.
    I think there have been a number of discussions between 
Manila and Taipei, and, of course, we would like those 
discussions to go on to an end that is acceptable to both 
sides.
    I think, at this point, sir, we really don't know what 
happened. I understand an investigation is going on. But we are 
keeping in very close contact both with Taipei and Manila on 
this incident. It is very unfortunate because, as you well 
know, these are two of our closest friends and partners in the 
region, and so we just feel awful.
    Mr. Chabot. Thank you very much. We would appreciate the 
Department keeping this committee up to date on what is 
happening there. Ranking Member Faleomavaega and I just came 
back from Korea, Japan and Taiwan a couple of weeks ago. As you 
indicated, both of these countries are very close and important 
allies to the United States and you hate to see something like 
this happen between friends.
    Moving on, the U.S. has provided an extraordinary amount of 
assistance to Cambodia since 2007, roughly $70 million a year. 
Over the course of the last few years, however, we have seen 
assistance yield arguably few results, and Cambodia is no more 
closely tied to the United States than it was back in 2007.
    According to our U.S. Ambassador to Cambodia, Ambassador 
Todd, the relationship, according to him, has actually soured 
quite a bit following President Obama's visit to Cambodia last 
year. I am not inferring it is because of that, but since then 
it apparently has worsened. In addition, Hun Sen's party, the 
Cambodia People's Party, CPP, controls almost every aspect of 
governance and civil life in Cambodia, including the military 
and police forces, which are all members of the standing 
committee of Hun Sen's CPP and its Politburo. Every single top 
military commander also sits on the CPP's central committee.
    Additionally, many of these CPP-dominated military units 
are involved in gross human rights abuses, like violent land 
seizures for economic concessions. We just met with some 
Cambodians about land seizures last week. Economic concessions 
to timber and rubber and palm oil companies and a whole range 
of things.
    Would you comment on that, Mr. Yun?
    Mr. Yun. Thank you, Mr. Chairman.
    I think we absolutely share your concerns. There is no 
question about that.
    I think the high level of our assistance really does 
reflect the tragic history that Cambodia has gone through and 
really our effort to help overcome past legacies. Having said 
that, you are very much on the right, same thinking as us. 
Their abuse of human rights and lack of political freedom is 
very much of concern.
    As you noted, President Obama was in Cambodia last November 
for multilateral meetings, East Asia Summit and other meetings. 
And he did have a meeting with Prime Minister Hun Sen, and at 
that meeting he had a very good discussion and conveyed our 
very strong views on human rights.
    There will be Cambodian elections coming up in July. And, 
again, we have been telling the Cambodians to please be 
inclusive and also have openings so that political opposition 
can legitimately represent themselves. And these discussions 
are going on, and I expect these elections will be a crucial 
indicator of----
    Mr. Chabot. Thank you. If I could stop you there just for a 
second because I am almost out of time, but you mentioned the 
national elections in July.
    Let me ask you, if they are determined not to be free or 
fair, which a lot of observers think is quite likely, how will 
the administration adjust, for example, its assistance levels 
to Cambodia to reflect our disapproval with how Hun Sen is 
ruling the country and how the elections went, if they don't go 
the way they should? And when I say ``should,'' not judging 
which way an election should go, but just that it is fair.
    Mr. Yun. We will, of course, have to digest what happens in 
the election, but I would imagine it will be a very important 
factor in the way we go with our assistance.
    Mr. Chabot. All right. I would strongly urge that is a 
factor. It ought to be a factor in whether we are taking 
American taxpayer dollars and aiding a country, if their 
elections are deemed to be fair and open to both sides or all 
sides.
    Mr. Yun. Yes.
    Mr. Chabot. Thank you very much.
    I would now like to recognize the current ranking member 
for the day, Mr. Bera, for 5 minutes.
    Mr. Bera. Thank you, Mr. Chairman.
    And, again, thank you, Mr. Yun and Ms. Biswal, for your 
opening statements.
    Obviously, the strategic rebalance to the region is very 
important and something that I think this committee and many of 
us in the House support. There is huge opportunity in the Asia-
Pacific region, but there are also, obviously, significant 
challenges, particularly when we look at East Asia, when we 
look at the Pacific and the South China Sea region.
    If you were to think about, you know, one or two key 
challenges to this region, would either one of you--you know, 
feel free to articulate what you think our biggest challenges 
are to the U.S. strategic interests in this region.
    Ms. Biswal. Sure. I would be happy to talk about what I 
think are some of the critical development challenges that bear 
into our interests in the region. Because, as you see the fast-
growing economies, they are having some major impacts within 
the region--the issues of urbanization, competition over 
natural resources; the impacts on health, with the emergence of 
pandemic diseases. As you know, Southeast Asia is the crucible 
of the pandemic threats that have been emerging over the past 
decade or so. And global climate change and the impact of 
environmental degradation on the world's resources and, 
frankly, on pollution that we experience on our own shores.
    And so these are important challenges not only for the 
region, but they are important for us. And so, increasingly, 
our programs are looking at how we address the way Asia grows, 
the way Southeast Asia experiences growth, to push for more 
sustainable and inclusive growth that takes into account 
managing and mitigating for these particular developmental 
challenges.
    Mr. Bera. And would it be accurate to say that the 
budgetary requests that are being made for the coming fiscal-
year budget helps us build critical infrastructure to address 
these challenges and lays out those priorities?
    Ms. Biswal. Absolutely. While we don't invest in hard 
infrastructure, the soft infrastructure of governance that is 
fundamental to how the region grows is where we put a lot of 
resources.
    Mr. Bera. Great. Thank you.
    Mr. Yun?
    Mr. Yun. I would say our biggest opportunity and biggest 
challenge is in the economic area. Very much think there is 
enormous growing market there; how we take advantage of that. 
And how we deal with problems associated with unfair trade, not 
level playing field, and these include thefts of intellectual 
property rights, cybersecurity.
    So I think those are the issues that are of critical 
interest to Americans, and we need to deal with them.
    Mr. Bera. Great.
    And in my remaining time, you know, I was recently reading 
that USAID has been working with the country of India to help 
them develop their own aid institutions to help other nations.
    Ms. Biswal, what do you think India's role is in helping 
these emerging economies in the region? And how best can we 
work with India?
    Ms. Biswal. Sure. So we are increasingly working with and 
talking to India about the development programs that it 
supports within the Asia region. We have a trilateral dialogue, 
U.S., India, Japan, that focuses on the East Asia theater. And 
India is investing very heavily in Burma in many of the same 
areas in which we are providing support. And so I think there 
is an opportunity for us to work together to maximize the 
impact of the resources that we bring to bear.
    When President Obama went to India in 2000, he talked about 
the local-global cooperation. And he launched, along with Prime 
Minister Singh, the Partnership for an Evergreen Revolution, 
which talks about the partnership between the United States and 
India in the African context.
    Increasingly, we are looking at how to partner in sub-
Saharan Africa, and in Afghanistan, in South Asia, and in East 
Asia.
    Mr. Bera. Great. Yeah, thank you.
    Mr. Yun, do you have anything that you would like to add?
    Mr. Yun. I don't think I have much to add to that.
    Mr. Bera. Okay. Great.
    With that, I will yield back my time.
    Mr. Chabot. Thank you very much.
    I think the gentleman has left that we were going to turn 
to next. The gentlelady from Hawaii is recognized for 5 
minutes.
    Ms. Gabbard. Thank you very much, Mr. Chairman.
    Thank you very much for being here today with us.
    You have mentioned, both of you, in different parts of your 
testimony about our country's focus and rebalance toward Asia 
and the Pacific and, without a doubt, the importance that we 
focus on the broad range of challenges and opportunities that 
we face, which include the security and prosperity of the Asia-
Pacific region.
    I represent the Second District in Hawaii. And the regional 
instability created by the recent North Korean provocations, as 
well as the slow-boiling territorial disagreements around the 
Senkakus and South China Seas, are something that affect us in 
a very personal way but also affect us as we look at this 
rebalance and the region as a whole. And I think it underscores 
the growing need that we strengthen our Nation's military and 
diplomatic presence in the region, where we have economic and 
national security interests that are inextricably linked.
    We had Secretary Kerry here before us in the committee last 
month, and he touched very briefly on the fact that we need to 
do things differently going forward, specifically as it relates 
to North Korea.
    And, Mr. Yun, I know you have a lot of background in this 
area, and I would love to hear your thoughts in more detail 
than we had before on exactly what are some examples of 
different diplomatic steps that we can take toward North Korea 
in order to stop this endless cycle that we have been under for 
so long and, specifically, the tactic that we have proposed 
legislation on and has been tried before in 2005, with the 
sanctions on hard currency for North Korea.
    Mr. Yun. Thank you very much.
    This is a tough one, the North Korean challenge. 
Specifically, their nuclear weapons program has been there, as 
you know, since the late 1960s, so this is a problem we have 
had to deal with for decades. And, of course, as they test more 
nuclear devices and as they test more missiles, their 
capabilities increase, which is very worrisome.
    I had an opportunity to accompany Secretary Kerry on his 
trip to Northeast Asia some 6 weeks ago. And, clearly, there is 
awareness among our two key allies, which is Japan and South 
Korea, and they are working very closely with us.
    I would say, really, the important party with leverage and 
influence over North Korea is China. And, on this occasion, 
Secretary Kerry had a really lengthy engagement with Chinese 
leadership, including President Xi Jinping, Prime Minister Li 
Keqiang, and Foreign Minister Wang Yi. We are continuing that 
dialogue, and very soon afterwards we had a visit by their six-
party chairman, Wu Dawei. And, of course, this will go into 
next month and thereafter, with important meetings between our 
side and Chinese side.
    So we are putting a lot of emphasis on that front, Ms. 
Gabbard. But it is something we dealt with, and I think, quite 
frankly, while many people will criticize that it has not been 
successful, at the same time I think the problem that we have 
so far is, I would say, you know, considering it is a 30-, 40-, 
50-year-old problem, we will continue to deal with through 
strength, especially with our allies, and build up our 
defenses, especially around Hawaii and Alaska.
    Ms. Gabbard. I think one of the issues that concerns many 
of us, though, however, is that while the cycle continues and 
people say we go back to status quo every time, the bar of what 
status quo is continues to be raised as North Korea continues 
to develop more nuclear and ballistic missile capabilities.
    Specifically, if you could touch again, quickly, on the 
hard currency sanctions, as the chairman of this committee as 
well as many of my colleagues and I have introduced legislation 
to bring back these hard currency sanctions on North Korea.
    China's role in allowing that success that we saw in 2005 
to happen--we saw that it worked, but, unfortunately, the 
program was pulled back too quickly back in 2005, and 
apparently because of China.
    Now, when things have changed, we would like to hear your 
thoughts on how that could be continued in a more successful 
way.
    Mr. Yun. As you know, we have had a number of sanctions 
imposed against North Korea. And I believe these have been 
multilateral as well as unilateral. And, most lately, China has 
also sanctioned some North Korean entities, specifically 
Foreign Trade Bank (FTB).
    And these are discussions we are going to have as new 
information comes in. Ms. Gabbard, we would like to give you a 
classified briefing on steps we have taken and we have asked 
our partners to take on this issue.
    Ms. Gabbard. Thank you. I look forward to continuing the 
conversation.
    Thank you, Mr. Chairman.
    Mr. Chabot. The gentlelady's time has expired.
    The gentleman from California, Mr. Sherman, is recognized 
for 5 minutes.
    Mr. Sherman. Thank you. I have another hearing going on at 
the same time.
    Mr. Yun, you said in your testimony that our exports to 
your region has gone up to $400 billion. What are our imports 
from that region? And is there a reason why only one was 
mentioned in your testimony?
    Mr. Yun. I don't have the import figure, sir, but I would 
imagine they also have gone up. And I fully----
    Mr. Sherman. Wait a minute. You are our chief diplomat for 
East Asia, and nowhere in your notes or with your staff behind 
you do you know what our imports are from the region?
    Mr. Yun. I don't have the exact figure. I will be happy to 
provide them to you, sir.
    Mr. Sherman. Do you happen to know it within $100 billion?
    Mr. Yun. I think probably it would be, since we have a 
deficit, it would be way larger than the export figure.
    Mr. Sherman. Okay.
    You talk about the new security concerns. The concern I 
have is that, since we are pulling out of Afghanistan, our 
military-industrial complex needs a new focus and that fighting 
China over the South China Sea provides that.
    One of the major focuses of our national security 
deployment is to help Japan defend some islands that it claims. 
What percentage of its GDP does Japan spend on its defense, 
compared to what we do?
    Mr. Yun. Again, I would be happy to provide you figures, 
sir.
    Mr. Sherman. Okay.
    Have you made any efforts to push the Japanese to say, 
look, if you want to go eyeball-to-eyeball militarily with 
China, would you mind doing that to some extent with your own 
expenditures, rather than ask the American defense budget to 
deploy additional forces to East Asia? Has that been an 
objective of our policy?
    Mr. Yun. We have frequent discussions with the Japanese on 
these issues, and, of course, the Japanese provide host-nation 
support for our troops and our bases----
    Mr. Sherman. So they allow us, at our expense, to defend 
their territory from their territory and have invited us to 
devote our resources to defending their disputed islands, but 
they have made no promises to you to increase their military 
expenditures as their national security situation worsens. They 
feel that that should be handled by the U.S. taxpayer.
    Is there any part of that characterization that is 
demonstrably false?
    Mr. Yun. I think, as we speak, the Japanese, including led 
by the government, are reviewing the issue of whether they 
should change their constitution----
    Mr. Sherman. Okay. So we spend, they review, and there is 
no--now, China restricts the import of U.S. movies, when they 
are not pirating them to begin with.
    Have you taken any action to focus Chinese attention on not 
allowing American movies to be shown on all their screens? And 
have we threatened any restriction on their access to U.S. 
markets in order to open theirs?
    Mr. Yun. Every year, we have had strategic and economic 
dialogue in which intellectual property rights form the core of 
our----
    Mr. Sherman. This was not a question about intellectual 
property rights. The question was access to screens, where they 
say they have quotas on how much of our import they will 
accept. We have no quotas on how much they can send to us in 
fabrics or tennis shoes or whatever.
    Isn't it outrageous that, running this huge trade surplus 
with us, that they would restrict our imports to their country 
while having unlimited access to our market? Is that an outrage 
that you share and have expressed to the Chinese?
    Mr. Yun. We do share these views. And, again, we----
    Mr. Sherman. Let me get you pinned down. Is it outrageous 
that our movies do not have free access to the Chinese market?
    Mr. Yun. Our movies should have free access.
    Mr. Sherman. Okay.
    You talked about that there were a lot of jobs from 
exports. I do want the record to reflect that the U.S. Policy 
Institute has calculated that our imports from China, since we 
gave it MFN status, have displaced 2.8 million U.S. jobs. And I 
think that dwarfs the figure that you put forward as to the 
export jobs to China or even the entire region.
    I see my time has expired. And I hope that we will be more 
aggressive in seeking to open up the Chinese market. And I 
haven't even had a chance to talk about Japanese currency 
manipulation or Chinese currency manipulation, but maybe we 
will do another round.
    Mr. Chabot. Thank you. We are going to do another round.
    I will recognize myself for 5 minutes.
    I have to note that my Democratic colleague was scoring 
such great points with respect to our Democratic 
administration, but I want to at least throw out some 
assistance relative to the Japanese issue.
    Correct me if I am wrong, Mr. Yun, but it is my 
understanding that after World War II one of our principal 
concerns with Japan was their aggression, and all their 
neighbors were, as well. They had a history there. And so, by 
their constitution, which we helped them write, their ability 
to act militarily was, shall we say, greatly constrained to 
what it was prior to World War II. Is that accurate?
    Mr. Yun. I think that would be very accurate, sir.
    Mr. Chabot. As you attempted to answer, having just been 
over there and having discussed this with both the Japanese and 
the Koreans and others in the region, they are in the process 
of overhauling their constitution. One issue, in particular, is 
in the area of defense and how they can act.
    They are now one of our strongest allies in the region; is 
that correct?
    Mr. Yun. Yes, I would say they are most definitely one of 
our strongest allies in the region.
    And just to go a little bit further, they do want to change 
the constitution so they can help outside Japan, as well, 
including, for example, by sending peacekeeping forces outside.
    Mr. Chabot. It is in our interests in order to encourage 
that ability for them to act militarily more in conjunction 
with the United States than in the past. That is our goal, and 
we are trying to encourage them to do that, correct?
    Mr. Yun. We are trying to encourage them to do that. And, 
however, as you mentioned earlier, this is a very sensitive 
issue----
    Mr. Chabot. And that is what I wanted to get at. One of the 
problems is some of their neighbors, like South Korea, for 
example, that have an experience, and you have the comfort-
women issue and a whole range of things in the region that 
gives a lot of folks a lot of heartburn whenever you get into 
this stuff. But it is a pretty complicated issue.
    I agree with many of the points that my colleague from 
California made, but I think it is just a bigger story. I hated 
seeing the administration squirm. Unlike yesterday, when I was 
in the Judiciary Committee where we had Eric Holder as our 
witness, and I was one of the questioners, I felt that I should 
defend the administration here a little bit, although maybe it 
goes against my natural instincts.
    But let me get off of Japan for just a minute, which I 
hadn't even intended to go into at this point. But let me ask, 
the State Department has requested $10.3 million to add 21 new 
positions, 8 of which will be in Washington. Then I think in 
your testimony, rather than 21, it is up to 24 new positions, 
and 10 of those will be here in Washington. Would you explain 
this discrepancy? Also, why are nearly half of the new 
positions located in Washington? In this time of fiscal 
constraints and budget austerity, shouldn't these roles be 
handled by staff currently in Washington rather than putting 
new folks here? It seems, based on your testimony and the 
documents reviewed before this hearing, that the demand for 
sustaining a U.S. presence in Asia is actually having a U.S. 
presence in Asia, not here in Washington. Could you talk about 
the additional people and why so many of them are here rather 
than overseas?
    Mr. Yun. Yes. I think, number one, I would like to clarify, 
of course, $10.3 million is increasing in our operations 
budget. That is not all going to go to new positions. Some will 
go to improving facilities and overall costs.
    The reason why we believe we need to split between 
Washington and our field offices, our Embassies, shall we say, 
is because our bureau has been so understaffed for a long time. 
And it is probably, of the regional bureaus, the smallest 
bureau in the State Department. And we have undertaken a lot of 
initiatives from Washington, you know, for example, on 
multilateral affairs as well as in a lot of trade affairs and 
economic affairs that Mr. Sherman alluded to. So there is a lot 
of work to be done in Washington, where we do instructions, 
where we issue assessments. And so that is why we feel that 
there is a need.
    I do take your point that, on balance, we ought to prefer 
having positions overseas. And that is reflected in our overall 
numbers. And we feel that in Washington we have been 
understaffed.
    Mr. Chabot. All right. Thank you.
    My time has expired. I will recognize the gentlelady from 
Hawaii.
    Ms. Gabbard. Thank you, Mr. Chairman.
    Just also to follow up on some of the staffing, additional 
staffing positions that you have, the one in particular that 
you have assigned in South Korea to assist with defense policy 
coordination and the planning of transferring wartime 
operational control of forces to Korea, if you could expand 
specifically on what this individual's role is, as well as if 
there is a greater section to address both of those areas.
    Mr. Yun. As you know, the current plan is to transfer 
wartime operation control to South Korea by the end of 2015. 
There is a lot of work that needs to be done. I would say among 
the most important work is the South Korean capability for 
intelligence, as well as having interoperable equipment.
    So, in fact, a lot of it will be related to exporting 
defense equipment and getting together with the South Korean 
side and the USFK side to make sure that once the opcon is 
transferred there is a safe environment for that.
    Ms. Gabbard. And do you feel that that timeline is on 
track?
    Mr. Yun. Again, the timeline is, of course, we expect it to 
be on track, but, at the end of the day, we have to be sure it 
is safe and it is secure to transfer that. It is going to be 
based on facts on the ground.
    Ms. Gabbard. Thank you.
    I have a question for Ms. Biswal with regards to 
transforming the traditional donor-recipient model of 
development with India.
    As we collectively in a partnership look to tackle those 
development challenges, can you expand on how USAID is doing 
this and if you foresee a point in time when India will become 
a donor rather than a recipient of aid, and at what point?
    Ms. Biswal. Sure. Thank you, Congresswoman.
    First of all, I would note that India has long been a donor 
country. For example, I believe their commitment to Afghanistan 
is in the $2 billion annual range. So that is certainly not a 
new undertaking for that country.
    What we talk about when we say transforming the 
partnership, the relationship from donor/recipient to one of 
true partnership, is we recognize that India is a country that 
has represented both tremendous progress and faces continuing 
challenges. Those challenges are going to be met, by and large, 
through the resources that are galvanized from within India. 
And yet the technical collaboration between American 
institutions, American private sector, American academic and 
research institutions, and Indian institutions to co-create 
solutions, innovations, frugal innovations that are emerging in 
India, has tremendous promise to bring more cost-effective and 
relevant and impactful solutions that can be scaled with Indian 
resources within India but also can inform and transform the 
way that we are addressing development challenges globally.
    And if I could just give you a couple of cases in point. 
India has pioneered agricultural extensions for small-holder 
farmers in a way that is unseen in other parts of the world. 
Because it has very small-holder and disaggregated farming 
systems, it uses mobile systems, mobile phones, to provide 
extension services to these farmers at very, very low cost. And 
they are connected to their agricultural institutions, such as 
IIIT in Hyderabad, and so farmers are able to take pictures of 
their crops that have diseases and beam them directly into 
these research institutions and get realtime data on what could 
be done to advance or address these challenges. Now, we are 
working with Indian institutions to see how we can apply those 
kinds of techniques in African systems.
    And so there is tremendous opportunity for partnership, 
where we are not doing service-delivery-type interventions in 
India because that is really not where we bring value, but we 
focus on the kind of partnerships that allow us to take it to 
the next level and have global impact.
    Ms. Gabbard. Great. Thank you.
    Thank you, Mr. Chairman.
    Mr. Chabot. The gentlewoman yields back.
    The gentleman from California is recognized for 5 minutes.
    Mr. Sherman. Thank you.
    We appreciate India's role as a donor country, but its aid 
to Afghanistan is not an unmitigated benefit. It has scared the 
hell out of the Pakistanis. Rationally or irrationally, they 
feel themselves caught between two potentially hostile 
territories, and the Pakistani reaction has certainly cost us 
far more than $2 billion.
    Mr. Chairman, it is in my nature to ask tough questions, as 
you have seen over the decades of administrations of any 
political party and of a foreign policy establishment that I do 
not think has well-served American working families.
    But I will defend the State Department on one thing, and 
that was your concern as to whether we base people here or 
overseas.
    With security costs, with housing allowances, with 
dependants allowances, the cost of a Foreign Service officer is 
at least double or triple the cost of having somebody in the 
civil service here in Washington. And then, of course, when 
Foreign Service officers return, they feel that they should be 
rewarded for their foreign service. They get a particularly 
good desk for a while before they go overseas again.
    As to Japan's peace constitution, Mr. Yun, I assume there 
is nothing in that constitution that prohibits Japan from 
defending its own territory, which it claims these disputed 
islands to be, and there is nothing in the Japanese 
constitution that prohibits them from writing us a check for 
the costs of our deployments in support of their national 
security.
    Am I right on those two items of the Japanese constitution?
    Mr. Yun. I am not an expert on the Japanese constitution, 
sir, but I would imagine there is no precedent for a country 
paying for service outside their immediate defense, in terms 
of, number one, how would you cost out that service? And then--
--
    Mr. Sherman. I am not saying they would pay the full cost. 
There is much international precedent for a country helping an 
ally with its defense costs. We help many of our allies with 
their defense costs. And there is nothing in the Japanese 
constitution or a lack of international precedent that would 
prevent them from helping us. They just don't want to.
    Mr. Yun. They do provide host-nation support, as I----
    Mr. Sherman. Do they provide that for free, or do we pay 
anything for our bases in Japan?
    Mr. Yun. They provide utilities. They also provide for 
our----
    Mr. Sherman. Do we have to pay any rent?
    Mr. Yun. Do we have to pay anything to Japan? No, we don't 
pay anything.
    Mr. Sherman. Okay. So, unlike bases in other countries, at 
least the use of the land it is for free. The costs of 
defending Japan are in the hundreds of billions, and I doubt 
their free utilities for us approach that.
    You have mentioned that you have focused with China on 
intellectual property. Have you given them any reason to 
believe that they would lose any access to the U.S. market if 
they just smile and nod and keep having discussions with you 
about intellectual property but simply don't do anything?
    What is the penalty to China for not dealing with 
intellectual property, other than they will have another 
meeting with you and those who report to you?
    Mr. Yun. Congressman Sherman, we have had, as I have 
described, lengthy meetings with them. And we do have tools--I 
really don't want to go into it at this place--including CFIUS, 
our restrictions on exports of technology. So to characterize 
it as one way----
    Mr. Sherman. What penalty has been imposed on China for its 
disregard of our intellectual property?
    Mr. Yun. I don't think we do business in terms of quid pro 
quo. We treat our trade and investment and we have discussions 
with them. Among them, we have discussions on investment 
issues----
    Mr. Sherman. Okay. So we have discussions. And, as far as 
they know, they have not lost a dollar due to their 
mistreatment of intellectual property rights.
    Why has the administration not designated China as a 
currency manipulator?
    Mr. Yun. I think if you were to ask any Chinese whether 
there have been consequences as a result of trade friction, I 
doubt any one of them would say they have not lost a dollar in 
investment or trade, sir.
    Mr. Sherman. Well, with regard to intellectual property, I 
don't think they have lost. But why have we not declared China 
to be a currency manipulator?
    Mr. Yun. I would like to ask my Treasury colleagues to get 
back to you on that question.
    Mr. Sherman. They won't answer the question either, but 
thank you very much.
    Mr. Chabot. The gentleman's time has expired.
    The gentleman from California, Mr. Bera, is recognized for 
5 minutes.
    Mr. Bera. Thank you, Mr. Chairman.
    Mr. Yun, obviously, safety is a paramount issue, 
particularly in the aftermath of violent and often deadly 
attacks on our U.S. Facilities and personnel around the world. 
So, you know, this committee and this body continue to be very 
worried about the safety of our personnel. This is especially 
true in East Asia, which, you know, we have uncovered several 
plots against U.S. installations and have fortunately been able 
to foil them in recent years.
    Can you explain what steps the State Department and USAID, 
also, are taking to secure our facilities and protect our 
citizens?
    Mr. Yun. In terms of facilities, we have expended a 
considerable amount of money and efforts, of course, in 
building new facilities that will be safe. And I would say they 
have had a very good effect.
    And a number of facilities, including those in Indonesia, 
Malaysia, and elsewhere, we will be rebuilding into a new 
compound.
    And we have done a lot of work on this issue for over the 
past 10 years or more. And among them, for American citizens, 
to have the quality of information that we have, so when we 
give warning to--when we have information, we share them widely 
and broadly. So in our area and throughout the world, 
information is rapidly disseminated.
    Mr. Bera. Great.
    Is there anything that you would like to add, Ms. Biswal?
    Ms. Biswal. Only that USAID staff fall under chief-of-
mission authority. Our security offices coordinate very closely 
with the State Department Diplomatic Security, and our 
facilities' resources are very closely coordinated with OBO to 
look at those needs.
    We are right now going through a process of examining any 
facilities where we are not co-located with our Embassies to 
ensure that, in the short term, that the security needs are 
being adequately addressed and, in the long term, looking at 
and exploring ways to make sure that we can be co-located where 
it is warranted.
    Mr. Bera. Great. Thank you.
    And then in my remaining time, obviously, there has been a 
rapid transformation of the Burmese leadership and so forth and 
their thought process. Could either one of you offer any 
insight into what is happening with the Burmese leadership, 
what their motivations are, and where they are right now?
    Mr. Yun. My own belief is that the Burmese have changed. 
They have changed and they have opened up for, really, two 
fundamental reasons.
    One of them is the economic backwardness of Burma. And they 
have realized that they have completely missed the boat on 
economic prosperity that has taken place around them.
    The second reason is really decades of isolation, political 
isolation. And with a change in leadership, they, too, have 
again decided that they no longer want to be isolated.
    So, in the end, I think it is these two factors that have 
led to change in decisions.
    Ms. Biswal. One of the remaining challenges, though, is 
that while there is tremendous political will at the top, 
political capacity for change and political will at lower 
levels is still very much something that we need to 
aggressively monitor and capacitate where we can capacitate it. 
So it is going to be an ongoing process; it is not a done deal.
    Mr. Bera. Do we have specific programs, to either one of 
you, that help build that capacity at the lower levels? And can 
you highlight some of those programs?
    Ms. Biswal. When the President went to Burma in November, 
he announced a partnership for democracy, peace, and prosperity 
between the United States and Burma. And we framed it as a 
partnership because it is going to require the political will 
and the reform process from Burma and the provision of 
technical support from the United States to help build the 
capacity.
    And so, right now, we are in the process of, essentially, 
designing and developing programs that will address not only 
capacity at the government level, which is important, but also 
the capacity in civil society and institutions, nongovernmental 
institutions, because it has to be both demand and supply.
    We are looking at more comprehensively how we can support 
reform and how we can build that capacity in that country, 
whether it is through the provision of technical assistance, 
whether it is through political party strengthening, judicial 
reform, rule of law, et cetera.
    Mr. Bera. Great. Thank you.
    I yield back.
    Mr. Chabot. The gentleman's time has expired.
    The final questioner this afternoon will be the gentleman 
from Georgia, Mr. Collins.
    Mr. Collins. Thank you, Mr. Chairman. I just have a few, 
and as we go along--thank you for being here.
    And I can sympathize with my friends from across the aisle 
that I have trouble getting answers a lot of times from 
different organizations since the short time I have been here. 
So I can sympathize there.
    We have heard from civil society groups inside Burma, whose 
work is critical, you know, the government, that they are 
having difficulty assessing U.S. assistance, while they see 
substantial resources and attention being focused on groups 
that are closer to the government and whose work reflects the 
government's priorities as well as the usual suspects, in terms 
of USAID contractors.
    Ms. Biswal, what is the USAID strategy for integrating its 
long-term cross-border partners into its programmatic approach 
in Burma?
    Ms. Biswal. Thank you very much for that question.
    We have maintained and will continue to maintain support to 
those cross-border organizations. Our assistance on the Thai-
Burma border for organizations that are working on either side 
of that border has continued unabated and will be there as long 
as it is necessary.
    And, at the same time, what we are trying to do is also 
support Burmese civil society within Burma. We have some 
challenges, because direct support to these organizations is 
going to be difficult in the short term, while their own 
systems and capacities to absorb direct assistance are 
addressed. Because many of the civil society groups in Burma, 
while they have technical capacity and resilience, don't have 
the kind of management systems that our assistance requires in 
terms of accountability requirements.
    Nonetheless, what we are doing is trying to work through 
partner organizations that can then both sub-grant to Burmese 
civil society but also then build their capacity.
    Mr. Collins. So, basically, your mechanism for helping them 
would be using other organizations, is that what you are 
saying? That they are technically able, but they have issues in 
management. Is that what you are saying?
    Ms. Biswal. Yes, in the short term, with the hope that we 
can move toward direct support of those organizations in the 
long term. And we will also test it out with doing some very 
small grants to Burmese civil society organizations that allow 
them to build up those systems.
    Mr. Collins. Okay.
    Let me ask a question for either one of you who want to 
answer. There is a report stating that there is no evidence 
that military-to-military relations will strengthen America's 
engagement with Burma. The State Department and USAID both 
emphasize that no assistance is being given to the Burmese 
Government because of mistrust. And I think that is the issue.
    If that is true, why are we incrementally increasing the 
aid, especially as we are doing this through the government 
programs that we just spoke of? Or why is that increasing 
there?
    Ms. Biswal. I will let my colleague talk about the military 
side of it.
    We are not providing any funds through the Government of 
Burma, because we don't believe they have the systems right now 
to provide the kind of assurances and accountability and 
transparency that we would require, nor have we seen sufficient 
progress at this point for us to put resources directly into 
that.
    But we are providing technical assistance to reform-minded 
ministries in Burma to help build those transparent systems 
that will enable down the road, if the situation warrants, for 
us to be able to support directly.
    Mr. Collins. Before you answer on the military, I want to 
add something to the question. Because there has been some 
release of issues of prisoners, but there is also--Burma still 
maintains a relationship with North Korea. It still has aims in 
its own program. Violence continues in ethnic areas; 1,300 
individuals have been taken into unlawful detention; and lack 
of transparency.
    While some officials--you know, and there is a thought that 
you use a philosophy of foreign assistance should be given in 
order to stimulate social change. I don't see foreign 
assistance as an entitlement. And I am concerned here about 
what I am seeing. The government's attitudes to be toward 
noticeable conversion and that to use incremental foreign 
assistance.
    If a government's allegiance to transparency and civil 
order is questioned, then, again, why is there such a huge 
increase here? I am trying to get the reasoning why we are 
doing this, especially when we have an issue where there is so 
much mistrust.
    Ms. Biswal. First of all, our interest here is in 
supporting the people of Burma and in addressing the very 
critical development challenges within that country. The extent 
to which we find reform-minded partners, we want to build the 
capacity of those reformers to drive change.
    Mr. Collins. Okay.
    Ms. Biswal. But we are not putting money into Burma because 
we are trying to reward a government. We are trying to build a 
relationship with a people that we think have, you know, 
important needs that we can address.
    Mr. Collins. And I understand that.
    And very quickly here, the concern that I have here is, the 
increase that has been asked for is substantial. It is from 
$28.8 million to $75.4 million. Is there enough of those 
agencies that you can work with to handle that much of an 
increase? Or is this, we are going to find people and give 
money? Maybe that is the question.
    Ms. Biswal. Yeah. So let me explain how that increase is 
justified.
    First of all, our prior-year funding levels in Burma were 
about $35 million a year. Roughly half of that was on support 
to the Thai-Burma border, and roughly half of that was on 
programs inside Burma that were funding nongovernmental 
organizations addressing humanitarian needs and supporting 
democracy, free media, et cetera. We have continued our support 
for those programs.
    The additionality that comes into play with the 2014 
request is to allow us to expand into areas that we previously 
did not work on, expand on political reforms, including 
supporting political parties, election reforms, parliamentary 
strengthening, rule of law, and ethnic reconciliation.
    So our programs, because of the increased request in 2014, 
will enable us to be much more comprehensive. And, yes, I do 
believe that there is the ability to absorb those resources in 
that country.
    Mr. Collins. Okay.
    Mr. Chairman, I know my time is over. I do have more 
questions. I will submit those for the record and get answers, 
because there is a lot more I want to delve into there.
    Mr. Chabot. Very good. Thank you very much.
    As the gentleman indicated, his time has expired.
    I want to thank the panel for their testimony here this 
afternoon.
    Without objection, members will have 5 days to submit 
questions and revise and extend their remarks.
    If there is no further business to come before the 
committee, we are adjourned. Thank you.
    [Whereupon, at 4 o'clock p.m., the subcommittee was 
adjourned.]
                                     

                                     

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