[Senate Hearing 113-]
[From the U.S. Government Publishing Office]
STATE, FOREIGN OPERATIONS, AND RELATED
PROGRAMS APPROPRIATIONS FOR FISCAL
YEAR 2015
----------
TUESDAY, APRIL 8, 2014
U.S. Senate,
Subcommittee of the Committee on Appropriations,
Washington, DC.
The subcommittee met at 10:17 a.m., in room SD-138, Dirksen
Senate Office Building, Hon. Patrick J. Leahy (chairman)
presiding.
Present: Senators Leahy, Landrieu, Coons, Graham, Coats,
Johanns, and Boozman.
UNITED STATES AGENCY FOR INTERNATIONAL DEVELOPMENT
STATEMENT OF DR. RAJIV SHAH, ADMINISTRATOR
OPENING STATEMENT OF SENATOR PATRICK J. LEAHY
Senator Leahy. Good morning.
We are meeting today to hear testimony from Dr. Rajiv Shah,
who is the Administrator of the U.S. Agency for International
Development, to discuss USAID's fiscal year 2015 budget
request. Dr. Shah, thank you for being here.
USAID, like every Federal agency, needs to adapt to a
changing world, and so does Congress. If we want to do that
effectively, we need a shared understanding of USAID's core
purpose.
I have always assumed it is sustainable development, and I
believe, Dr. Shah, you would agree with that. But today,
USAID's strength seems to be saving lives, and feeding people,
technological innovation, and other such things that are
unquestionably important. Many of them I strongly support:
efforts to bring down the rate of maternal deaths, ways to help
immunize more children; these I strongly support.
I do not want to over generalize, but these activities are
often not the same as building institutions and organizations,
owned and run by foreign governments and communities which, to
me, is what real development, sustainable development, is
about.
And while USAID's renewed emphasis on partnership is
welcome, it often seems as if USAID still tends to view NGOs,
or other organizations, as instruments of what USAID wants to
do, not as partners.
I am optimistic about USAID Forward and its focus on
country ownership, and eventually working yourselves, USAID,
out of a job. Outsiders can help. And local entities--whether
governments, civil society, or private companies--need to be in
charge and take responsibility for the results.
There is a lot of talk about capacity, either the lack of
it or the need to build it. Of course, it is necessary to be
able to set realistic goals, and do the work, and keep track of
money spent. But I also know that a lot of capacity already
exists, especially if we do not try to do too much, too fast.
Many local organizations may not have the clout, or the
connections, or the lobbyists that big U.S. contractors or
grantees have. All they have going for them is they are often
better at getting results than we are. What they lack is the
capacity to navigate the reams of pages of extremely technical,
incomprehensibly bureaucratic USAID applications for funding. I
am a lawyer. I did well in college. I did well in law school
and I am benumbed by some of these applications; a lot of this
is government-wide and not just of USAID's making. I worry
about creating a whole new industry of high priced, capacity-
building consultants. They would love the idea. We have a lot
of lobbyists in this town who rely on it.
But even though there has been progress, I think after 4
years you would agree, USAID Forward has a long way to go.
Local organizations may increasingly look for other models than
USAID, if USAID does not make further changes in how staff is
recruited, trained, and deployed to work with local
organizations and institutions.
Other than responding to humanitarian crises, it makes no
sense to spend money without a coherent strategy focused on
sustainability. Afghanistan is probably the most egregious
example of what not to do, but there are others.
Now, I say this as I also recognize that USAID has a lot to
be proud of. I have seen some of those successes. I have seen
your people in the field, sometimes in dangerous conditions,
and I applaud you for that. But I am worried about our foreign
aid programs. I am worried that they are not as relevant or
effective as we may think and say they are. And we have to pay
attention in this committee because it has been 25 or 30 years
since we have had an authorization bill, so we have to do it
here.
You inherited an Agency that had lost its bearings. I told
you 4 years ago, I think I said that I did not know whether to
offer you congratulations or condolences when you became the
head of it. There has been progress, but we have to focus on
producing sustainable outcomes.
Now, I want to mention the recent press reports on USAID's
Twitter program in Cuba. I will have a number of questions
about it. We should remember that while we debate what USAID is
doing in Cuba, U.S. citizen Alan Gross remains in solitary
confinement in his fifth year of captivity, solely because he
was carrying out a USAID program which was poorly conceived and
poorly implemented.
Alan Gross is confined to his cell 23 hours of every day. I
have visited Mr. Gross twice. On April 3rd, he began a hunger
strike to protest his detention by the Cuban Government, and
the failure--the failure--of the United States Government, and
this Administration, to take effective steps to obtain his
release.
It is long past time for the Administration and the Cuban
Government to negotiate a resolution of this ordeal so Mr.
Gross can return home. Now, I am told by the Administration,
``Well, if you only knew all the things we are doing.'' All I
know is whatever they are doing has not accomplished anything.
PREPARED STATEMENT
There is a way to resolve it, there is ample precedent for
doing so, it is in our national interest, and it could be done
immediately if the Administration really wants to. That is my
own personal view.
[The statement follows:]
Prepared Statement of Senator Patrick J. Leahy
Good morning. We are meeting today to hear testimony from Dr. Rajiv
Shah, Administrator of the United States Agency for International
Development, who will discuss USAID's fiscal year 2015 budget request.
Dr. Shah, thank you for being here.
USAID, like every Federal agency, needs to adapt to a fast changing
world. So does the Congress. In order to do that effectively, we need a
shared understanding of USAID's core purpose.
I have always assumed it is sustainable development, and I am sure,
Dr. Shah, you would agree.
But today, USAID's strength seems to be saving lives, feeding
people, technological innovation, and other such things that are
unquestionably important. Many of them I strongly support.
I don't want to overgeneralize, but these activities are often not
the same as building institutions and organizations, owned and run by
foreign governments and communities, which to me is what real
development--sustainable development--is about.
And while USAID's renewed emphasis on partnership is welcome, it
often seems as if USAID still tends to view non-governmental
organizations (NGOs) or other organizations as instruments of what
USAID wants to do, rather than as partners in their own right.
I was optimistic about USAID Forward, and its focus on country
ownership and eventually working yourselves out of a job. Outsiders can
help, but local entities, whether government or civil society or
private companies, need to be in charge and take responsibility for the
results.
There is a lot of talk about capacity--either the lack of it or the
need to build it. Of course it is necessary to be able to set realistic
goals, do the work, and keep track of money spent.
But I also know that a lot of capacity already exists--especially
if we do not try to do too much, too fast. Many local organizations may
not have the clout or connections that big U.S. contractors or grantees
have, but they are often better at what they do.
What they lack is the capacity to navigate the reams of pages of
extremely technical, incomprehensibly bureaucratic USAID applications
for funding. A lot of this is governmentwide and not of USAID's making,
but I worry about creating a whole new industry of high-priced
capacity-building consultants.
There has been progress, but after 4 years I suspect you would
agree that USAID Forward has a long way to go. Local organizations may
increasingly look for other models than USAID, if USAID doesn't make
further changes--from how staff are recruited, oriented, and deployed
to how USAID missions get to know and work with local organizations and
institutions.
Other than responding to humanitarian crises, it makes no sense to
spend money without a coherent strategy focused on sustainability.
Afghanistan is probably the most egregious example of what not to do,
but there are many others.
USAID has a lot to be proud of. I have seen some of those
successes, and I applaud you for them. But I am worried about our
foreign aid programs. I am worried that they are not as relevant or
effective as we may think and say they are.
You inherited an agency that had lost its bearings. I told you 4
years ago that I did not know whether to offer my congratulations or
condolences. There has been progress, but we need to focus on producing
sustainable outcomes.
I also want to mention the recent press reports on USAID's twitter
program in Cuba, and I will have a number of questions about it. But we
should remember that while we debate what USAID is doing in Cuba, U.S.
citizen Alan Gross remains in solitary confinement in Havana in his 5th
year of captivity, solely because he was carrying out a USAID program.
Alan Gross is confined to his cell 23 hours of every day. On April
3, Mr. Gross, who I have visited twice, began a hunger strike to
protest his detention by the Cuban Government and the failure--the
failure--of his own Government to take meaningful steps to obtain his
release. As far as I can tell, USAID has all but forgotten about him.
It is long past time for the administration and the Cuban
Government to negotiate a resolution of this ordeal so Mr. Gross can
return home. Whatever past attempts have been made on his behalf have
achieved nothing, and I believe in some respects they have made his
situation worse. There is a way to resolve it, there is ample precedent
for doing so, and it is in our national interest.
Senator Graham.
STATEMENT OF SENATOR LINDSEY GRAHAM
Senator Graham. Thank you, Mr. Chairman.
This is what oversight is all about, is it not? Asking hard
questions and making people justify their action, or lack of
action.
From the committee's point of view, $20.1 billion is what
the USAID budget is, of about $48 billion of foreign
assistance. So it is a big part of what we do.
From an Afghanistan point of view, I think the elections
have seemed to have gone very well. I know that you have people
all over Afghanistan trying to build capacity that is
sustainable. And I hope the American people appreciate that
these elections came off because of a lot of sacrifice by
Afghans, coalition forces, and people on the ground. So that is
something to appreciate and, quite frankly, celebrate. We have
some articles about USAID aid in Afghanistan that we would like
you to comment on, Dr. Shah.
But bottom line, 4 years ago, you did inherit, for lack of
a better word, a mess and I think you have done, overall, a
very good job of trying to bring the private sector to partner
with the Government. As Senator Leahy said, there is more to
do, particularly in the faith-based area.
But the collaboration between our Government, NGOs, and the
private sector, particularly in Africa, has unlimited ability.
And I appreciate your willingness to reach out and form these
partnerships because that makes sure that we have the highest
and best use of the money that the taxpayer puts forward.
Finally, from a taxpayer's point of view, there is a strain
in my party, I am sure all over America, quite frankly, that
wants to disengage. And I just want to reinforce that the
entire foreign operations budget is about 1 percent of Federal
spending, and the world is rapidly changing. Some areas for the
better; in many places, it is deteriorating. USAID is a way for
the Government of the United States to have a presence without
military force that, I think, can be a positive presence.
So I want to continue to support Senator Leahy's view of
oversight, but also continue to support Budget Requests that
make us stronger as a Nation.
So on behalf of the committee, and I think the senate as a
whole, we appreciate the dangers that your people face every
day, and your willingness to represent our Government and the
American values we all share in some of the most dangerous,
contentious places in the world. And I look forward to hearing
your testimony.
SUMMARY STATEMENT OF DR. RAJIV SHAH
Dr. Shah. Thank you, Senator Leahy, Senator Graham, members
of the committee.
I would like to start just by saying thank you to you,
Senator Leahy. Your leadership on behalf of America's
engagement around the world on human rights, on civil society,
on supporting local institutions, and on all of the things we
do in health, food, agriculture, water, sanitation, have
literally helped tens of millions, hundreds of millions of
people improve their lot in life all around world, and to help
make our country safer and more secure.
Senator Graham, thank you for your specific leadership,
especially on difficult, but important issues like Afghanistan
where, I believe, we first had the chance, one of the chances,
to meet out there together. And I look to you for guidance and
counsel in carrying out my duties.
I also want to thank all the members of the committee. I
have appreciated, and continue to appreciate, your engagement,
advice, and support as we have been trying to carry out our
mission.
Over the course of the last year, one of the things we did
was ask 2,700 of our staff to work with us to more clearly
define and articulate our mission. And today, we know that our
core mission is to partner to end extreme poverty and promote
resilient, democratic societies while advancing American
security and prosperity.
For the first time in decades, it is now possible to
envision a world without the kind of dollar-a-day poverty that
robs people of their human dignity. You have supported, over
the last 4 years, a significant investment in rebuilding USAID
as the world's premiere development institution, and I want to
say thank you for that.
Under your leadership, and with your support, we have
rebuilt our staff; hired dozens of experts across a range of
different areas; rebuilt our budgets in areas like food, and
agriculture, and child survival; engaged and built a policy
team that allows USAID to articulate America's vision for
partnership to address the needs of the world's most
vulnerable; and worked to expand our partner base to work with
hundreds of new institutions, many local organizations, and
most through direct new partnerships that enable them to drive
forward success.
You have helped us ensure that we monitor and evaluate all
of our major programs, going from publishing a few dozen
monitoring and evaluation reports a year, to now publishing
nearly 300 a year, all of which are available on an iPhone app,
if you have the interest, and a long plane ride. These efforts
collectively have helped us deliver comprehensive results
across our major areas of investment.
And the President's fiscal year 2015 budget request for
USAID focuses on, and invests, in what works in global
development. The Budget includes $1 billion for the President's
Feed the Future program that now works in 19 countries, reaches
7 million farm households, gets them access to new agricultural
technologies, helps to move 12\1/2\ million children who
otherwise would be malnourished out of a condition of under-
nourishment and towards nutritional sufficiency. And has
already leveraged nearly $400 million of private investment out
of the nearly $4 billion of commitments we have secured from
more than 140 companies to co-invest with us.
These efforts, together and with your support, will allow
us to reduce extreme poverty in the countries where we work by
more than 20 percent, and reduce the number of children who are
stunted from malnutrition by an equivalent amount.
The budget asks for nearly $2.7 billion for child survival,
and over the last decade, there has been no other area of work
where the United States gets a better return on investment.
Having gone from having more than 11 million children die every
year to 6.6 million this year, and well on our way to having
that number be near 1 million in the next 15 to 20 years going
forward.
In other areas--like education, water, and energy--with
your support, we have crafted new partnerships, new goals,
created and put forth transparent metrics, and reported on
progress in a quantitative, specific, businesslike way.
Our efforts to promote disaster assistance have been taxed
significantly over the past year, given the fact that we now
have three Level 3 disasters around the world: In and around
Syria, in the Central African Republic, and in South Sudan. I
appreciate the extra efforts the committee has made to ensure
that humanitarian funding exists for these efforts. And our
work has been carried out to a level of excellence that we just
saw in the Typhoon Haiyan response in the Philippines that was
just the subject of a roundtable discussion with ASEAN Defense
Ministers that Secretary Hagel and I co-chaired in Honolulu
early last week.
Our work in democracy and governance helps to improve our
national security, and we are actively working to support the
free and fair conduct of elections in Ukraine. And I am
extraordinarily proud of our Embassy and USAID mission teams
that have spent 18 months working to ensure that the Afghan
election was accessible, particularly to women, safe, carried
out by institutions led by Afghans themselves, and had a
complaints process and fraud mitigation strategy that was
effectively deployed just last week as nearly 58 percent of
eligible voters went to the polls.
I look forward to our discussion on Cuba because I want to
talk about some of our work that is more difficult to execute,
and learn from members of the committee.
And I want to conclude just by noting that I often worry
about what is difficult for us. Can our country maintain a high
level of political commitment so that we can lead the world in
humanitarian development and global health efforts over the
next two decades?
In my more than 4 years in this role, I have seen hundreds
of new partnerships with private businesses, with scientists
and universities, with faith communities, with leaders from
congress in both the House and the Senate on both sides of the
aisle. And I am convinced, especially after having the
opportunity to deliver this year's Prayer Breakfast Address
that, in fact, America can, should, and if we do our jobs well,
will lead the world to end extreme poverty in the next two
decades.
Thank you, and I look forward to your questions.
[The statement follows:]
Prepared Statement of Dr. Rajiv Shah
Thank you Chairman Leahy, Ranking Member Graham, and members of the
subcommittee. I am pleased to join you to discuss the President's
fiscal year 2015 budget request for the U.S. Agency for International
Development.
Four years ago, President Obama set forth a new vision of a
results-driven USAID that would lead the world in development. We have
since risen to this challenge, pioneering a new model of development
that brings a greater emphasis on partnerships, innovation, and
results. We are guided in these efforts by a new mission statement: we
partner to end extreme poverty and promote resilient democratic
societies while advancing our security and prosperity.
Although these goals are not new, they reflect a unique moment in
development today when exciting opportunities are emerging to change
what is possible. In a time of fiscal restraint, we are applying the
new model to seize this moment and reach more people, save more lives,
and leverage more private investment than ever before--delivering
results for the American people and those in greatest need around the
world.
The President's fiscal year 2015 budget responds to unprecedented
development challenges, including some of the most significant events
unfolding on the world stage today.
When Typhoon Haiyan swept across the Philippines, we swung into
action, leading and coordinating the U.S. Government civilian and
military humanitarian response and distributing life-saving aid,
including highly-nutritious food products to feed hungry children and
adults. In Ukraine, we remain committed to helping citizens realize the
democratic aspirations that many spent months on the Maidan demanding.
For nearly 20 years, we have stood shoulder-to-shoulder with the people
of Ukraine, putting 1.8 million land titles into the hands of farmers
and helping civil society leaders develop recommendations, including on
anti-corruption, in an comprehensive reform package for the government.
Many of the recommendations are being implemented through new and
revised legislation.
In South Sudan, as citizens face a looming humanitarian catastrophe
that will leave half the country on the brink of famine, we are racing
against the clock to save lives. And as we saw just a few days ago,
citizens in Afghanistan voted for a new president to lead them towards
a brighter, more stable future. In support of the Afghan-owned election
process, USAID provided extensive guidance on how to prevent electoral
fraud, as well as capacity building support for independent domestic
observers, civil society, media, and political parties to help ensure a
transparent electoral process.
The budget enables us to respond effectively to these events and
address the underlying causes of extreme poverty through President
Obama's Feed the Future, Global Health, Global Climate Change, and
Power Africa initiatives. It advances our national security by building
linkages to emerging markets, strengthening democracy and human rights,
and promoting broad-based economic growth. It helps vulnerable
communities strengthen their resilience to crises and natural
disasters. It facilitates strategic engagement in the Middle East and
North Africa, as well as across the Asia-Pacific and Latin America. It
also focuses our activities in Afghanistan, Pakistan, and Iraq,
ensuring that we sustain the gains we have made.
Even though we work far from home, our work continues to realize
benefits for our home: for opportunities we open for American
businesses, the skills of our young people we help build, and the
threats to our security that we help prevent. For less than 1 percent
of the Federal budget, we are delivering results that shape a more
secure and prosperous future for the American people and the world.
a new model for development
The fiscal year 2015 budget request for USAID managed or partially
managed accounts is $20.1 billion, 1 percent below the total enacted
fiscal year 2014 funding for these accounts. In this constrained budget
environment, USAID is focused on maximizing the value of every dollar.
Over the past 5 years, we have made difficult choices about where our
work will have the greatest impact, shifting resources and personnel to
better advance our mission of ending extreme poverty around the world.
Since 2010, regional bureaus have reduced program areas by 34
percent; USAID global health program areas have been phased out of 23
countries; and Feed the Future agriculture programs have been phased
out of 26 countries. We are reducing programs in countries that have
turned a corner, like Mongolia, and transitioning Missions to Offices.
We are shifting resources to countries in critical need and where our
work has the widest impact.
Over the past 3 years, the USAID Forward reform agenda has touched
upon every part of our Agency. We've revamped our budget to include
more rigorous performance monitoring and impact evaluation, expanded
the use of science, technology, and public-private partnerships, and
improved talent management. In each area of reform, we set aspirational
targets that have established a common language for success, challenged
our partners, and encouraged us to step out of our comfort zone.
Taken together, these reforms have formed the foundation of a new
model of development that defines the way we work around the world.
With this new model, we are backing cutting-edge innovation, taking
advantage of fast-moving technology, and harnessing the vast potential
of the development community to achieve unprecedented results.
Today, all our major programs are independently evaluated, and
those evaluations are available right now on an iPhone app--an
unprecedented level of transparency. The quality of our evaluations has
improved significantly, which is an important sign that we are
increasingly grounding our work in evidence and data. Missions are
reporting dozens of different ways that these evaluations are
strengthening our programs in the field. Through an evaluation in
Benin, we learned that community health programs naturally favored men
in their hiring, which limited our ability to provide care to women. So
we're redesigning our recruitment to help more women become community
health workers.
Working closely with local leaders, governments, and organizations,
we are strengthening the capacity of our partner countries to create
stronger communities and brighter futures without our assistance. In
2013 alone, our emphasis on local solutions enabled us to support 1,150
local organizations in 74 countries. In the Democratic Republic of the
Congo, for instance, we have worked with 12 local governments to
improve their tax collection, so they can afford to pay the salaries of
teachers and health workers. As a result, they have increased revenues
by 95 percent since 2009.
We are also mobilizing a new generation of innovators and
scientists to advance our mission. Launched last week, the U.S. Global
Development Lab represents an historic investment in the power of
science and technology to bend the curve of development. With $151
million in funding, it will generate and scale breakthrough solutions
to complex development challenges, while attracting private sector
investment to improve the sustainability of our solutions. Already, it
has generated cutting-edge inventions--including the bubble continuous
positive airway pressure (CPAP), a device from Texas that can
resuscitate newborns at a fraction of the price of existing machines.
To maximize the impact of the Lab, we seek new authorities from
Congress. These include the ability to hire a diverse range of staff;
to use development assistance funding programmed for science,
technology, and innovation for all development purposes, including
health; and to use a ``pay-for-success'' model to incentivize the best
solutions from innovators around the world--all of which will help us
catalyze a wave of innovation that solves the toughest development
challenges on the planet.
We are increasingly focused on engaging a wide array of partners,
from our long-standing partners in the development community, to faith
organizations, to multi-national corporations. Through our Development
Credit Authority (DCA), we unlocked a record $1.02 billion over the
last 2 years alone in commercial capital to empower entrepreneurs
around the world. Earlier this year, we partnered with GE and Kenya
Commercial Bank to help healthcare providers buy life-saving healthcare
equipment, including portable ultrasound devices and magnetic resonance
imaging (MRI) machines. For the first time ever, our private sector
partner is covering the cost of the loan guarantee--making this program
virtually costless for the American taxpayer. To build on this success,
the request seeks to increase the annual cap on loans under DCA
guarantees from $1.5 billion to $2 billion, a measure that will enable
us to ramp up high-impact projects, particularly through Power Africa.
core priorities
Under the leadership of President Obama, we are applying the new
model to deliver unprecedented results across our work, from expanding
access to mobile money to empowering women and girls to strengthening
land tenure rights to safeguarding the world's biodiversity.
Feed the Future
In this request, $1 billion is devoted to Feed the Future,
President Obama's global food security initiative. After several years,
Feed the Future has hit its stride--delivering results that are
changing the face of poverty and hunger for some of the world's poorest
families.
In 2012, we reached 12 million children with programs to strengthen
their nutrition and helped more than 7 million farmers increase their
yields through new technologies and management practices. Reported
incremental sales of farmers working with Feed the Future programs
worldwide increased their sales from $100 million in 2012 to over $130
million in 2013. These results are grounded in a robust management
system for gathering timely, accurate data that measures everything
from household income to the participation of women to the prevalence
of stunting. Just as the Demographic and Health Surveys helped
dramatically expand monitoring capabilities in global health, Feed the
Future's new open data platform is transforming our knowledge and
informing cutting-edge approaches.
This year's budget request builds on these results with an
integrated nutrition approach to reduce stunting by 20 percent--a
target that will prevent 2 million children from suffering from this
devastating condition over the next 5 years.
In Kenya, the reported gross margin of livestock farmers receiving
training on improved management practices and support to partner with
cooperatives increased over 45 percent from 2012 to 2013, from $371 to
$541 per cow. Feed the Future activities in Kenya support rural
smallholders who account for over 80 percent of the country's raw milk
production. Farmers in Bangladesh using new fertilizer technologies
more than doubled the production of rice from 2011 to 2013. New
technologies and management practices such as this also contributed to
increases in the rice farmers' gross margin per hectare from $431 in
2012 to $587 in 2013. Across Central America, Feed the Future is
helping trading unions to meet international standards and maintain
access to agricultural markets in the United States.
Two years ago, President Obama led global food security efforts to
the next stage, introducing the New Alliance for Food Security and
Nutrition. Today, it is a $3.75 billion public-private partnership that
is enabling reforms from 10 African governments and commitments from
more than 140 global and local companies. For instance, Ghana Nuts--an
agricultural business that was once an aid recipient--is now a multi-
million dollar company employing 500 people. Under the New Alliance, it
has committed to strengthening local supply chains, reaching 27,000
smallholder farmers with more than $4 million in investments.
At the same time, the governments we work with through the New
Alliance have committed to significant market-oriented policy reforms.
Recently, Burkina Faso launched an electronic platform that increases
the transparency and speed of their customs processes. Last summer,
Mozambique, Cote d'Ivoire, and other New Alliance nations committed to
policy reforms that will foster private sector investment in
smallholder farmers, particularly women.
Global Health
With strong bipartisan support, we are providing critical health
assistance more efficiently than ever before. We have narrowed our
focus on maternal and child health to the 24 countries that represent
more than 70 percent of maternal and child deaths in the developing
world. Through the $2.7 billion request for USAID Global Health
Programs--along with State Department Global Health Programs for $5.4
billion--we will work towards ending the tragedy of preventable child
and maternal death, creating an AIDS-free generation, and protecting
communities from infectious diseases.
Around the world, we are seeing real results of global partnerships
to accelerate progress towards these goals. Since 2010, 15 of our 24
priority countries have rolled out the pneumonia vaccine with Global
Alliance for Vaccines and Immunization (GAVI) support; and since 2011,
8 have introduced rotavirus vaccines against diarrheal diseases. In
2013, the President's Malaria Initiative (PMI) protected over 45
million people with a prevention measure. Since 2006, all the original
15 PMI focus countries have had reductions in childhood mortality
rates, ranging from 16 to 50 percent.
In 2013, Saving Mothers Giving Life, a USAID-led public-private
partnership, contributed to a 30 percent decline in the maternal
mortality ratio in target districts of Uganda and a 35 percent
reduction of maternal deaths in target facilities in Zambia.
Since 2006, our support for neglected tropical diseases has
expanded to reach 25 countries. In the countries where we work, nearly
35.8 million people no longer require treatment for blinding trachoma,
and 52.4 million people no longer require treatment for lymphatic
filariasis.
Since USAID's 2012 Child Survival Call to Action, nearly a dozen
countries, representing those with the highest global rates of child
death, have launched their own local calls to action, set national
targets, and are creating evidence-based business plans to focus
resources in acutely vulnerable regions.
We will continue to make cost-effective interventions that save
lives--from preventing the spread of disease, to providing nutrition to
millions of hungry children around the world.
Climate Change
Of the President's $506.3 million request for the Global Climate
Change Initiative implemented in partnership with the Department of
State, USAID implements approximately $348.5 million and invests in
developing countries best suited to accelerate transitions to climate-
resilient, low-emission economic growth. In fiscal year 2013, USAID
helped over 600,000 stakeholders implement risk-reducing practices or
use climate information in decisionmaking. These stakeholders are
impact multipliers, including meteorologists, agricultural extension
workers, and disaster planners who use this information to improve the
climate resilience of millions of people in their countries and
regions.
Across the world, we are harnessing innovation, evidence, and
technology to help vulnerable communities anticipate and take action to
reduce the impacts of climate change. Today, a joint venture between
USAID and NASA--called SERVIR--provides communities in 29 countries
with global satellite-based climate information, including sending
frost alerts to tea growers in Kenya and fire alerts to forest
officials in Nepal.
USAID is pioneering a new approach that puts people on a path from
dependency to resilience, while expanding broad-based economic growth.
From small farming collectives to multi-national corporations, our
partners are pursuing climate-resilient, low-emission development. In
support of the Tropical Forest Alliance 2020, we recently helped launch
the Global Forest Watch, a forest alert system that utilizes real-time
satellite data to help countries reduce tropical deforestation and
enable companies to monitor their supply chains.
The Global Climate Change Initiative advances practical, on-the-
ground solutions to help developing countries contribute to the global
effort to reduce greenhouse gas emissions while achieving development
goals. Since 2010, USAID and the State Department have established 25
bilateral agreements with partner countries to develop and implement
for low emissions development strategies. This support is helping
advance the transition to lower carbon energy systems by creating
enabling environments for public and private investments in efficient,
clean energy sources, and sustainably reduce emissions from land use
such as deforestation and agriculture.
Power Africa
The fiscal year 2015 request advances our Nation's commitments to
Africa with initiatives like Trade Africa and Power Africa. With $77
million requested in this budget, Power Africa represents a bipartisan
approach to use public-private partnerships to double access to power
on the continent and connect American investors and entrepreneurs to
business opportunities abroad. Less than a year since launching, more
than 5,500 mega-watts of power projects have been planned--putting us
more than halfway towards our goal of expanding electricity to 20
million people and businesses. For every dollar that the U.S.
Government has committed, the private sector has committed two--over
$14 billion so far.
With an initial set of six partner countries, Power Africa focuses
on completing projects quickly and efficiently, while encouraging
countries to make energy sector reforms critical to their success. In
Ethiopia, for example, Power Africa is supporting the first independent
power producer geothermal plant in the country, a project that will
pave the way for future private sector investment and provide enough
power to reach tens of thousands of people. In Kenya, Power Africa is
enabling the construction of the largest privately-owned wind farm in
Sub-Saharan Africa--helping millions leapfrog dirtier, unhealthier
phases of development and join a global low-carbon economy.
Education
Education remains a critical focus for the Agency. Our request for
Basic Education is $534.3 million, an increase of 6.6 percent over our
fiscal year 2014 request.
Through the ``Room to Learn'' program, we are intensifying our
efforts in six countries--including Nigeria and Afghanistan--where
endemic poverty and conflict conspire to rob children of their futures.
In the Katanga Province in Democratic Republic of the Congo, in the
schools we support, we have seen a 40 percent decrease in students
repeating a grade from 2010 to 2013. The drop-out rate was also 65
percent lower than in 2010.
From Kenya to Afghanistan, we're seeing reading skills develop and
enrollment--especially for girls--jump. Our strategic shift to
improving primary grade reading for tens of millions of kids brings
with it a commitment to measuring results through student learning
achievements. In Malawi, we used early grade reading assessments to
evaluate students' foundation skills--giving their parents and teachers
a way to measure their progress. Today, second graders who receive
interventions like these have comprehension levels four times those in
control groups.
By maintaining our focus on global education as a core development
objective, we can brighten the future for millions of vulnerable
children, including children in crisis environments. With widespread
illiteracy estimated to cost the global economy more than 1 trillion
dollars this year alone, these programs are not only advancing
America's standing as the world's development leader in education, but
are also energizing the global economy.
Water
While the world has seen tremendous progress on expanding access to
safe drinking water--halving the proportion of people without
sustainable access since 1990--a lot of work remains. This budget
request continues the implementation of our first-ever Water and
Development Strategy, which outlines a goal to save lives and advance
development through improvements in water for health and water for
food. The Strategy sets explicit targets of sustainably providing 10
million people with access to improved water supply and 6 million
people with access to improved sanitation over the next 5 years.
Through our Development Innovation Ventures fund, we're partnering
with the Gates Foundation to help bring safe drinking water to at least
4 million of the world's poor. Called WASH for Life, this initiative
will source and rigorously test great ideas to improve access to water
and sanitation service. Last year, in Kenya, we leveraged a Development
Credit Authority guarantee to extend piped water supply in Kisumu for
over 1,500 piped water connections to benefit over 8,500 individuals.
The request for WASH funding is $231 million in this budget. Budget
requests for WASH programs have typically been about $230 million, and
because of the number of program areas we engage in with water
investments--from OFDA's emergency response work, to resilience
programs in regions of chronic crisis like the Horn of Africa and the
Sahel, to Feed the Future agricultural infrastructure support--our
actual programming for all water activities has grown to over $500
million, and we expect similar levels in the year ahead.
supporting regional priorities and strengthening national security
This budget also maintains our Nation's tremendous leadership in
humanitarian response with $4.8 billion requested in State and USAID
funding. In the last year, we have responded to unprecedented need
around the world--saving lives from the Philippines to South Sudan.
In Syria, we currently provide life-saving aid for 4.2 million
people in all 14 governorates across the country, as well as more than
2 million people who have fled the violence into neighboring countries.
At the same time, we are supporting neighboring Jordan and Lebanon to
manage the overwhelming influx of refugees from Syria. We have worked
with local school systems to accommodate Syrian children, and in some
areas, helped them adjust their schedules so that local children can
learn in the morning and Syrian kids in the afternoon.
Thanks to strong bipartisan support, we have begun reforms that
mainly address our development food aid programs, allowing us to reach
an additional 800,000 hungry people every year with the same resources.
The need for this flexibility grows more urgent every day, as crises
deepen from Syria to the Central African Republic to South Sudan. That
is why this budget calls for reforms to be extended to emergency food
assistance. We are seeking the flexibility to use up to 25 percent of
title II resources for life-saving tools, like vouchers and local
procurement--allowing us to reach 2 million more people in crises with
our existing resources.
While we remain the world's leader in humanitarian response, we are
increasingly focused on ensuring communities can better withstand and
bounce back from shocks--like droughts, floods, and conflict--that push
the most vulnerable people into crisis again and again. In the Horn of
Africa, which suffered a devastating drought 2 years ago, we're
deploying mapping technology to help farming communities find new
sources of water. In the Sahel, we're partnering with U.S. Special
Operations Command to conduct detailed analysis and geo-spatial mapping
of the region. These efforts have given U.S. development and military
professionals a deeper understanding of both the drivers of conflict
and ways to build resilience.
We are working effectively to both protect and manage the
environment that supports us. In addition, we are harnessing
innovation, evidence, and technology to reduce consumer demand for
endangered species and stop wildlife trafficking. For instance, no
tigers or rhinos were poached in Nepal in 2013 due to our sustained
investments in community-based conservation. This past January, USAID
partners convened 28 African and Asian countries to participate in an
enforcement operation that resulted in more than 400 arrests and the
seizure of three metric tons of ivory, 10,000 turtles, and 1,000 skins
of protected species.
We're pioneering a new approach that puts people on a path from
dependency to resilience, while expanding broad-based economic growth.
USAID and State Department are requesting $2 billion globally in
the Development Assistance and Economic Support Fund accounts to
strengthen democracy, human rights, and governance. Thanks to USAID's
rapid-response capability on civil society laws, we were able to take
advantage of political openings in Libya, Tunisia and Burma to
encourage early reformers to adopt consultative government-civil
society processes that have led to much-improved civil society
legislation, which in turn will pave the way for further political
opening.
In fiscal year 2015, the State Department and USAID have requested
nearly $1.5 billion to support democratic transitions and respond to
emerging crises in the Middle East and North Africa. For example, in
Tunisia, we worked with civil society and the government to implement
some of the most progressive non-governmental organization (NGO) laws
in the region. The new law passed as a result of a consultative
government-civil society process and is now considered a model for the
region; the new Libyan draft civil society organization law is based on
peer consultations with Tunisians on their law.
Of the President's $2.8 billion assistance request for the
Frontline States, USAID implements $1.8 billion for long-term
development assistance, continuing to work closely with interagency
partners--including the State and Defense departments--to move toward
long-term stability, promote economic growth, and support governance
reforms, including the rights of women.
This request is tailored to support our three-fold transition
strategy in Afghanistan, including maintaining gains in health,
education, and the empowerment of women; promoting economic growth; and
improving stability by supporting more accountable and effective Afghan
governance, which is especially critical in the first year after the
2014 presidential election.
Our assistance in Afghanistan has helped deliver incredible gains.
Today, 77,000 university students--a nine-fold increase from 2001--will
form a new generation of leaders. The wait time for goods crossing the
border with Pakistan has fallen from 8 days to 3.5 hours--saving $38
million every year and opening access to new markets for farmers and
entrepreneurs. The rapid expansion of mobile technology across the
country is empowering Afghan women to demand an equal stake in their
nation's future.
Building on our strong legacy of progress in Latin America and the
Caribbean, we're focusing on spurring economic growth and strengthening
democracy by tackling the biggest drivers of instability, from drug
trafficking to climate change. Today, for example, we work with a range
of partners, including Nike Foundation and PepsiCo, to train thousands
of at-risk youth in 18 countries of the region. The program has had an
extremely high success rate, with 65 percent of graduates getting jobs,
returning to school, or starting their own business within 1 year of
graduation.
In Colombia, we've partnered with Starbucks to improve yields for
25,000 coffee-farmers, giving them a shot at the global market and a
reason to invest in their land after decades of conflict. In Peru, our
partnership with the Government of San Martin has helped reduced
poverty by more than 67 percent and cut coca production from 22,000
hectares to around 1,200.
We're also investing in the future innovators, doctors, and
entrepreneurs throughout Latin America. For instance, in Honduras, we
partnered with a telecom company to connect our network of 40 youth
outreach centers--providing Internet access, online education and
virtual job training to more than 17,000 people. On the whole, these
investments produce immense gains in literacy, stability, and long-term
economic growth.
From empowering small businesses in Burma to helping eradicate
extreme poverty in Nepal, we are supporting the administration's Asia-
Pacific Rebalance, renewing U.S. leadership, deepening economic ties,
and promoting democratic and universal values. Today, we are bolstering
regional cooperation around shared solutions to complex challenges
through deepened engagement in ASEAN and the Lower Mekong Initiative.
In March, we signed an agreement with the U.S.-ASEAN Business Council
to help link small- and medium-sized enterprises across Asia to
regional and global value chains.
usaid operating expenses
In recognition of development's centrality to U.S. national
security, the President's National Security Strategy calls for
investing in development capabilities and institutions. The fiscal year
2015 USAID Operating Expenses account request for $1.4 billion will
provide that investment--advancing U.S. interests, enhancing national
security, and reaffirming our global development leadership. The
request will enable USAID to maintain core operations, and to continue
USAID Forward reforms--as well as better collaborate with partner
countries and local institutions--to maximize the value of each dollar.
Although an increase from fiscal year 2014, the request represents
the minimum level of resources necessary to preserve our agency's
current services and operations and support the existing workforce to
meet U.S. foreign policy objectives and global development needs. The
requested funding will allow our agency to offset the projected
decrease in other funding sources, such as recoveries, reimbursements,
and trust funds that support operations. At the same time, it will
restore the new obligation authority needed to maintain its current
level of operations into fiscal year 2015.
The request reflects our agency's focus on working through a more
efficient, high-impact approach. We are continuing to reform operations
to improve management processes and generate significant cost savings
for fiscal year 2015, like real property disposals and space
optimization. In addition, our agency restructured its overseas
presence to strengthen its ability to meet its foreign policy and
national security mission.
conclusion
Today, for the first time in history, we have new tools and
approaches that enable us to envision a world without extreme poverty.
This is an unprecedented moment for our Nation--one where we can
again lead the world in achieving goals once deemed too ambitious, too
dangerous, or too complex. In doing so, we can protect our national
security and spur economic growth. But above all, we can express the
generosity and goodwill that unite us as a people.
As President Obama said in the 2013 State of the Union address,
``We also know that progress in the most impoverished parts of our
world enriches us all--not only because it creates new markets, more
stable order in certain regions of the world, but also because it's the
right thing to do.''
As we step forward to answer the President's call with renewed
energy and focus, we remain committed to engaging the American people
and serving their interests by leading the world to end extreme
poverty.
Thank you.
CUBA
Senator Leahy. Thank you.
The U.S. provides $15 million to $20 million for so-called
democracy programs in Cuba. They traditionally have been
administrated by USAID. It is the same program that got Alan
Gross arrested. He is in his fifth year of a 15 year sentence,
which at his age is basically a death sentence. Last week, he
began a hunger strike because he has given up waiting for any
kind of a sign by this Administration they are doing anything
meaningful to get him out.
According to a recent Associated Press report, between 2009
and 2012, USAID funded a program named ZunZuneo. They used
personal data obtained overseas, secret bank accounts, a shell
company to support cell phone access for Cubans who had no idea
it was funded by the U.S. Government. The irony being if we did
not have the embargo we have, we probably would have had ten
legitimate American companies down there vying for the ability
to sell cell phones and Internet access.
Whose idea was it to undertake this program in this manner?
Dr. Shah. Senator Leahy, first let me--thank you for your
question.
Let me address Alan Gross first, we believe----
Senator Leahy. No, how you--first answer the question.
Whose idea was this?
Dr. Shah. The program was designed in 2007 and 2008, at
that timeframe. That said, the legislation that crafts the
purpose of the program----
Senator Leahy. No. Whose idea was it for this specific
program? I have read the legislation. The legislation does not
say anything about setting up a cockamamie idea in Cuba with
Twitter accounts and all, on something that the Cubans would be
so easy to discover.
Whose idea was this specific program in Cuba? Who? It is a
simple question.
Dr. Shah. Sir, the program was in place before I arrived.
Senator Leahy. Sir, do you know whose idea it was? I know
it was in place before you arrived. But do you know whose idea
it was?
Dr. Shah. I--well, first let me say, and I think this is
important, sir, and I greatly respect your point of view. But
that AP story had a number of critical inaccuracies----
Senator Leahy. I have read--I have read----
Dr. Shah. And I am, I am----
Senator Leahy. I will put that in the record. I will put it
in the record, both the AP story and USAID's response to the AP
story.
[Clerk's note: The information below is the Associated
Press story.]
[From the Miami Herald, Apr. 3, 2014]
U.S. Secretly Created ``Cuban Twitter'' to Stir Unrest
(By Desmond Butler, Jack Gillum and Alberto Arce, Associated Press)
Copyright 2014, The Miami Herald. All Rights Reserved.
Washington.--In July 2010, Joe McSpedon, a U.S. Government
official, flew to Barcelona to put the final touches on a secret plan
to build a social media project aimed at undermining Cuba's Communist
Government.
McSpedon and his team of high-tech contractors had come in from
Costa Rica and Nicaragua, Washington and Denver. Their mission: to
launch a messaging network that could reach hundreds of thousands of
Cubans. To hide the network from the Cuban Government, they would set
up a byzantine system of front companies using a Cayman Islands bank
account, and recruit unsuspecting executives who would not be told of
the company's ties to the U.S. Government.
McSpedon didn't work for the CIA. This was a program paid for and
run by the U.S. Agency for International Development, best known for
overseeing billions of dollars in U.S. humanitarian aid.
According to documents obtained by the Associated Press (AP) and
multiple interviews with people involved in the project, the plan was
to develop a bare-bones ``Cuban Twitter,'' using cellphone text
messaging to evade Cuba's strict control of information and its
stranglehold restrictions over the Internet. In a play on Twitter, it
was called ZunZuneo--slang for a Cuban hummingbird's tweet.
Documents show the U.S. Government planned to build a subscriber
base through ``non-controversial content'': news messages on soccer,
music, and hurricane updates. Later when the network reached a critical
mass of subscribers, perhaps hundreds of thousands, operators would
introduce political content aimed at inspiring Cubans to organize
``smart mobs''--mass gatherings called at a moment's notice that might
trigger a Cuban Spring, or, as one USAID document put it, ``renegotiate
the balance of power between the state and society.''
At its peak, the project drew in more than 40,000 Cubans to share
news and exchange opinions. But its subscribers were never aware it was
created by the U.S. Government, or that American contractors were
gathering their private data in the hope that it might be used for
political purposes.
``There will be absolutely no mention of United States Government
involvement,'' according to a 2010 memo from Mobile Accord, one of the
project's contractors. ``This is absolutely crucial for the long-term
success of the service and to ensure the success of the Mission.''
The program's legality is unclear: U.S. law requires that any
covert action by a Federal agency must have a presidential
authorization. Officials at USAID would not say who had approved the
program or whether the White House was aware of it. McSpedon, the most
senior official named in the documents obtained by the AP, is a mid-
level manager who declined to comment.
USAID spokesman Matt Herrick said the agency is proud of its Cuba
programs and noted that congressional investigators reviewed them last
year and found them to be consistent with U.S. law.
``USAID is a development agency, not an intelligence agency, and we
work all over the world to help people exercise their fundamental
rights and freedoms, and give them access to tools to improve their
lives and connect with the outside world,'' he said.
``In the implementation,'' he added, ``has the government taken
steps to be discreet in non-permissive environments? Of course. That's
how you protect the practitioners and the public. In hostile
environments, we often take steps to protect the partners we're working
with on the ground. This is not unique to Cuba.''
But the ZunZuneo program muddies those claims, a sensitive issue
for its mission to promote democracy and deliver aid to the world's
poor and vulnerable--which requires the trust of foreign governments.
``On the face of it there are several aspects about this that are
troubling,'' said Sen. Patrick Leahy, D-VT and chairman of the
Appropriations Committee's State Department and Foreign Operations
Subcommittee.
``There is the risk to young, unsuspecting Cuban cellphone users
who had no idea this was a U.S. Government-funded activity. There is
the clandestine nature of the program that was not disclosed to the
appropriations subcommittee with oversight responsibility. And there is
the disturbing fact that it apparently activated shortly after Alan
Gross, a USAID subcontractor who was sent to Cuba to help provide
citizens access to the Internet, was arrested.''
The Associated Press obtained more than 1,000 pages of documents
about the project's development. The AP independently verified the
project's scope and details in the documents--such as Federal contract
numbers and names of job candidates--through publicly available
databases, government sources and interviews with those directly
involved in ZunZuneo.
Taken together, they tell the story of how agents of the U.S.
Government, working in deep secrecy, became tech entrepreneurs--in
Cuba. And it all began with a half a million cellphone numbers obtained
from a Communist Government.
ZunZuneo would seem to be a throwback from the Cold War, and the
decades-long struggle between the United States and Cuba. It came at a
time when the historically sour relationship between the countries had
improved, at least marginally, and Cuba had made tentative steps toward
a more market-based economy.
It is unclear whether the plan got its start with USAID or Creative
Associates International, a Washington, DC, for-profit company that has
earned hundreds of millions of dollars in U.S. contracts. But a ``key
contact'' at Cubacel, the state-owned cellphone provider, slipped the
phone numbers to a Cuban engineer living in Spain. The engineer
provided the numbers to USAID and Creative Associates ``free of
charge,'' documents show.
In mid-2009, Noy Villalobos, a manager with Creative Associates who
had worked with USAID in the 1990s on a program to eradicate drug
crops, started an instant messaging (IM) chat with her little brother
in Nicaragua, according to a Creative Associates email that captured
the conversation. Mario Bernheim, in his mid-20s, was an up-and-coming
techie who had made a name for himself as a computer whiz.
``This is very confidential of course,'' Villalobos cautioned her
brother. But what could you do if you had all the cellphone numbers of
a particular country? Could you send bulk text messages without the
government knowing?
``Can you encrypt it or something?'' she texted.
She was looking for a direct line to regular Cubans through text
messaging. Most had precious little access to news from the outside
world. The government viewed the Internet as an Achilles' heel and
controlled it accordingly. A communications minister had even referred
to it as a ``wild colt'' that ``should be tamed.''
Yet in the years since Fidel Castro handed over power to his
brother Raul, Cuba had sought to jumpstart the long stagnant economy.
Raul Castro began encouraging cellphone use, and hundreds of thousands
of people were suddenly using mobile phones for the first time, though
smartphones with access to the Internet remained restricted.
Cubans could text message, though at a high cost in a country where
the average wage was a mere $20 a month.
Bernheim told his sister that he could figure out a way to send
instant texts to hundreds of thousands of Cubans-- for cheap. It could
not be encrypted though, because that would be too complicated. They
wouldn't be able to hide the messages from the Cuban Government, which
owned Cubacel. But they could disguise who was sending the texts by
constantly switching the countries the messages came from.
``We could rotate it from different countries?'' Villalobos asked.
``Say one message from Nica, another from Spain, another from Mexico''?
Bernheim could do that. ``But I would need mirrors set up around
the world, mirrors, meaning the same computer, running with the same
platform, with the same phone.''
``No hay problema,'' he signed off. No problem.
After the chat, Creative hired Bernheim as a subcontractor,
reporting to his sister. (Villalobos and Bernheim would later confirm
their involvement with the ZunZuneo project to AP, but decline further
comment.) Bernheim, in turn, signed up the Cuban engineer who had
gotten the phone list. The team figured out how to message the masses
without detection, but their ambitions were bigger.
Creative Associates envisioned using the list to create a social
networking system that would be called ``Proyecto ZZ,'' or ``Project
ZZ.'' The service would start cautiously and be marketed chiefly to
young Cubans, who USAID saw as the most open to political change.
``We should gradually increase the risk,'' USAID proposed in a
document. It advocated using ``smart mobs'' only in ``critical/
opportunistic situations and not at the detriment of our core platform-
based network.''
USAID's team of contractors and subcontractors built a companion
website to its text service so Cubans could subscribe, give feedback
and send their own text messages for free. They talked about how to
make the Web site look like a real business. ``Mock ad banners will
give it the appearance of a commercial enterprise,'' a proposal
suggested.
In multiple documents, USAID staff pointed out that text messaging
had mobilized smart mobs and political uprisings in Moldova and the
Philippines, among others. In Iran, the USAID noted social media's role
following the disputed election of then President Mahmoud Ahmadinejad
in June 2009--and saw it as an important foreign policy tool.
USAID documents say their strategic objective in Cuba was to ``push
it out of a stalemate through tactical and temporary initiatives, and
get the transition process going again towards democratic change.''
Democratic change in authoritarian Cuba meant breaking the Castros'
grip on power.
USAID divided Cuban society into five segments depending on loyalty
to the government. On one side sat the ``democratic movement,'' called
``still (largely) irrelevant,'' and at the other end were the ``hard-
core system supporters,'' dubbed ``Talibanes'' in a derogatory
comparison to Afghan and Pakistani extremists.
A key question was how to move more people toward the democratic
activist camp without detection. Bernheim assured the team that
wouldn't be a problem.
``The Cuban Government, like other regimes committed to information
control, currently lacks the capacity to effectively monitor and
control such a service,'' Bernheim wrote in a proposal for USAID marked
``Sensitive Information.''
ZunZuneo would use the list of phone numbers to break Cuba's
Internet embargo and not only deliver information to Cubans but also
let them interact with each other in a way the government could not
control. Eventually it would build a system that would let Cubans send
messages anonymously among themselves.
At a strategy meeting, the company discussed building ``user volume
as a cover . . . for organization,'' according to meeting notes. It
also suggested that the ``Landscape needs to be large enough to hide
full opposition members who may sign up for service.''
In a play on the telecommunication minister's quote, the team
dubbed their network the ``untamed colt.''
At first, the ZunZuneo team operated out of Central America.
Bernheim, the techie brother, worked from Nicaragua's capital, Managua,
while McSpedon supervised Creative's work on ZunZuneo from an office in
San Jose, Costa Rica, though separate from the U.S. Embassy. It was an
unusual arrangement that raised eyebrows in Washington, according to
U.S. officials.
McSpedon worked for USAID's Office of Transition Initiatives (OTI),
a division that was created after the fall of the Soviet Union to
promote U.S. interests in quickly changing political environments--
without the usual red tape.
In 2009, a report by congressional researchers warned that OTI's
work ``often lends itself to political entanglements that may have
diplomatic implications.'' Staffers on oversight committees complained
that USAID was running secret programs and would not provide details.
``We were told we couldn't even be told in broad terms what was
happening because 'people will die,''' said Fulton Armstrong, who
worked for the Senate Foreign Relations Committee. Before that, he was
the U.S. intelligence community's most senior analyst on Latin America,
advising the Clinton White House.
The money that Creative Associates spent on ZunZuneo was publicly
earmarked for an unspecified project in Pakistan, Government data show.
But there is no indication of where the funds were actually spent.
Tensions with Congress spiked just as the ZunZuneo project was
gearing up in December 2009, when another USAID program ended in the
arrest of the U.S. contractor, Alan Gross. Gross had traveled
repeatedly to Cuba on a secret mission to expand Internet access using
sensitive technology typically available only to governments, a mission
first revealed in February 2012 by AP.
At some point, Armstrong says, the Foreign Relations Committee
became aware of OTI's secret operations in Costa Rica. U.S. Government
officials acknowledged them privately to Armstrong, but USAID refused
to provide operational details.
At an event in Washington, Armstrong says he confronted McSpedon,
asking him if he was aware that by operating secret programs from a
third country, it might appear like he worked for an intelligence
agency.
McSpedon, through USAID, said the story is not true. He declined to
comment otherwise.
On September 20, 2009, thousands of Cubans gathered at Revolution
Plaza in Havana for Colombian rocker Juanes' ``Peace without Borders''
concert. It was the largest public gathering in Cuba since the visit of
Pope John Paul II in 1998. Under the watchful gaze of a giant sculpture
of revolutionary icon Ernesto ``Che'' Guevara, the Miami-based Juanes
promised music aimed at ``turning hate into love.''
But for the ZunZuneo team, the concert was a perfect opportunity to
test the political power of their budding social network. In the weeks
before, Bernheim's firm, using the phone list, sent out a half a
million text messages in what it called ``blasts,'' to test what the
Cuban Government would do.
The team hired Alen Lauzan Falcon, a Havana-born satirical artist
based in Chile, to write Cuban-style messages. Some were mildly
political and comical, others more pointed. One asked respondents
whether they thought two popular local music acts out of favor with the
government should join the stage with Juanes. Some 100,000 people
responded--not realizing the poll was used to gather critical
intelligence.
Paula Cambronero, a researcher for Mobile Accord, began building a
vast database about the Cuban subscribers, including gender, age,
``receptiveness'' and ``political tendencies.'' USAID believed the
demographics on dissent could help it target its other Cuba programs
and ``maximize our possibilities to extend our reach.''
Cambronero concluded that the team had to be careful. ``Messages
with a humorous connotation should not contain a strong political
tendency, so as not to create animosity in the recipients,'' she wrote
in a report.
Falcon, in an interview, said he was never told that he was
composing messages for a U.S. Government program, but he had no regrets
about his involvement.
``They didn't tell me anything, and if they had, I would have done
it anyway,'' he said. ``In Cuba they don't have freedom. While a
government forces me to pay in order to visit my country, makes me ask
permission, and limits my communications, I will be against it, whether
it's Fidel Castro, (Cuban exile leader) Jorge Mas Canosa or Gloria
Estefan,'' the Cuban American singer.
Carlos Sanchez Almeida, a lawyer specializing in European data
protection law, said it appeared that the U.S. program violated Spanish
privacy laws because the ZunZuneo team had illegally gathered personal
data from the phone list and sent unsolicited emails using a Spanish
platform. ``The illegal release of information is a crime, and using
information to create a list of people by political affiliation is
totally prohibited by Spanish law,'' Almeida said. It would violate a
U.S-European data protection agreement, he said.
USAID saw evidence from server records that Havana had tried to
trace the texts, to break into ZunZuneo's servers, and had occasionally
blocked messages. But USAID called the response ``timid'' and concluded
that ZunZuneo would be viable--if its origins stayed secret.
Even though Cuba has one of the most sophisticated counter-
intelligence operations in the world, the ZunZuneo team thought that as
long as the message service looked benign, Cubacel would leave it
alone.
Once the network had critical mass, Creative and USAID documents
argued, it would be harder for the Cuban Government to shut it down,
both because of popular demand and because Cubacel would be addicted to
the revenues from the text messages.
In February 2010, the company introduced Cubans to ZunZuneo and
began marketing. Within 6 months, it had almost 25,000 subscribers,
growing faster and drawing more attention than the USAID team could
control.
Saimi Reyes Carmona was a journalism student at the University of
Havana when she stumbled onto ZunZuneo. She was intrigued by the
service's novelty, and the price. The advertisement said ``free
messages'' so she signed up using her nickname, Saimita.
At first, ZunZuneo was a very tiny platform, Reyes said during a
recent interview in Havana, but one day she went to its Web site and
saw its services had expanded.
``I began sending one message every day,'' she said, the maximum
allowed at the start. ``I didn't have practically any followers.'' She
was thrilled every time she got a new one.
And then ZunZuneo exploded in popularity.
``The whole world wanted in, and in a question of months I had
2,000 followers who I have no idea who they are, nor where they came
from.''
She let her followers know the day of her birthday, and was
surprised when she got some 15 personal messages. ``This is the coolest
thing I've ever seen!'' she told her boyfriend, Ernesto Guerra Valdes,
also a journalism student.
Before long, Reyes learned she had the second highest number of
followers on the island, after a user called UCI, which the students
figured was Havana's University of Computer Sciences. Her boyfriend had
1,000. The two were amazed at the reach it gave them.
``It was such a marvelous thing,'' Guerra said. ``So noble.'' He
and Reyes tried to figure out who was behind ZunZuneo, since the
technology to run it had to be expensive, but they found nothing. They
were grateful though.
``We always found it strange, that generosity and kindness,'' he
said. ZunZuneo was ``the fairy godmother of cellphones.''
By early 2010, Creative decided that ZunZuneo was so popular
Bernheim's company wasn't sophisticated enough to build, in effect, ``a
scaled down version of Twitter.''
It turned to another young techie, James Eberhard, CEO of Denver-
based Mobile Accord Inc. Eberhard had pioneered the use of text
messaging for donations during disasters and had raised tens of
millions of dollars after the January 2010 earthquake in Haiti.
Eberhard earned millions in his mid-20s when he sold a company that
developed cellphone ring tones and games. His company's Web site
describes him as ``a visionary within the global mobile community.''
In July, he flew to Barcelona to join McSpedon, Bernheim, and
others to work out what they called a ``below the radar strategy.''
``If it is discovered that the platform is, or ever was, backed by
the United States Government, not only do we risk the channel being
shut down by Cubacel, but we risk the credibility of the platform as a
source of reliable information, education, and empowerment in the eyes
of the Cuban people,'' Mobile Accord noted in a memo.
To cover their tracks, they decided to have a company based in the
United Kingdom set up a corporation in Spain to run ZunZuneo. A
separate company called MovilChat was created in the Cayman Islands, a
well-known offshore tax haven, with an account at the island's Bank of
N.T. Butterfield & Son Ltd. to pay the bills.
A memo of the meeting in Barcelona says that the front companies
would distance ZunZuneo from any U.S. ownership so that the ``money
trail will not trace back to America.''
But it wasn't just the money they were worried about. They had to
hide the origins of the texts, according to documents and interviews
with team members.
Brad Blanken, the former chief operating officer of Mobile Accord,
left the project early on, but noted that there were two main criteria
for success.
``The biggest challenge with creating something like this is
getting the phone numbers,'' Blanken said. ``And then the ability to
spoof the network.''
The team of contractors set up servers in Spain and Ireland to
process texts, contracting an independent Spanish company called
Lleida.net to send the text messages back to Cuba, while stripping off
identifying data.
Mobile Accord also sought intelligence from engineers at the
Spanish telecommunications company Telefonica, which organizers said
would ``have knowledge of Cubacel's network.''
``Understanding the security and monitoring protocols of Cubacel
will be an invaluable asset to avoid unnecessary detection by the
carrier,'' one Mobile Accord memo read.
Officials at USAID realized however, that they could not conceal
their involvement forever--unless they left the stage. The predicament
was summarized bluntly when Eberhard was in Washington for a strategy
session in early February 2011, where his company noted the ``inherent
contradiction'' of giving Cubans a platform for communications
uninfluenced by their government that was in fact financed by the U.S.
Government and influenced by its agenda.
They turned to Jack Dorsey, a co-founder of Twitter, to seek
funding for the project. Documents show Dorsey met with Suzanne Hall, a
State Department officer who worked on social media projects, and
others. Dorsey declined to comment.
The State Department under then-Secretary Hillary Rodham Clinton
thought social media was an important tool in diplomacy. At a 2011
speech at George Washington University, Clinton said the U.S. helped
people in ``oppressive Internet environments get around filters.'' In
Tunisia, she said people used technology to ``organize and share
grievances, which, as we know, helped fuel a movement that led to
revolutionary change.''
Ultimately, the solution was new management that could separate
ZunZuneo from its U.S. origins and raise enough revenue for it to go
``independent,'' even as it kept its long-term strategy to bring about
``democratic change.''
Eberhard led the recruitment efforts, a sensitive operation because
he intended to keep the management of the Spanish company in the dark.
``The ZZ management team will have no knowledge of the true origin
of the operation; as far as they know, the platform was established by
Mobile Accord,'' the memo said. ``There should be zero doubt in
management's mind and no insecurities or concerns about United States
Government involvement.''
The memo went on to say that the CEO's clean conscience would be
``particularly critical when dealing with Cubacel.'' Sensitive to the
high cost of text messages for average Cubans, ZunZuneo negotiated a
bulk rate for texts at 4 cents a pop through a Spanish intermediary.
Documents show there was hope that an earnest, clueless CEO might be
able to persuade Cubacel to back the project.
Mobile Accord considered a dozen candidates from five countries to
head the Spanish front company. One of them was Francoise de Valera, a
CEO who was vacationing in Dubai when she was approached for an
interview. She flew to Barcelona. At the luxury Mandarin Oriental
Hotel, she met with Nim Patel, who at the time was Mobile Accord's
president. Eberhard had also flown in for the interviews. But she said
she couldn't get a straight answer about what they were looking for.
``They talked to me about instant messaging but nothing about Cuba,
or the United States,'' she told the AP in an interview from London.
``If I had been offered and accepted the role, I believe that
sooner or later it would have become apparent to me that something
wasn't right,'' she said.
By early 2011, Creative Associates grew exasperated with Mobile
Accord's failure to make ZunZuneo self-sustaining and independent of
the U.S. Government. The operation had run into an unsolvable problem.
USAID was paying tens of thousands of dollars in text messaging fees to
Cuba's communist telecommunications monopoly routed through a secret
bank account and front companies. It was not a situation that it could
either afford or justify--and if exposed it would be embarrassing, or
worse.
In a searing evaluation, Creative Associates said Mobile Accord had
ignored sustainability because ``it has felt comfortable receiving
United States Government (USG) financing to move the venture forward.''
Out of 60 points awarded for performance, Mobile Accord scored 34
points. Creative Associates complained that Mobile Accord's
understanding of the social mission of the project was weak, and gave
it 3 out of 10 points for ``commitment to our Program goals.''
Mobile Accord declined to comment on the program.
In increasingly impatient tones, Creative Associates pressed Mobile
Accord to find new revenue that would pay the bills. Mobile Accord
suggested selling targeted advertisements in Cuba, but even with
projections of up to a million ZunZuneo subscribers, advertising in a
state-run economy would amount to a pittance.
By March 2011, ZunZuneo had about 40,000 subscribers. To keep a
lower profile, it abandoned previous hopes of reaching 200,000 and
instead capped the number of subscribers at a lower number. It limited
ZunZuneo's text messages to less than 1 percent of the total in Cuba,
so as to avoid the notice of Cuban authorities. Though one former
ZunZuneo worker--who spoke on condition of anonymity because he was not
authorized to speak publicly about his work--said the Cubans were
catching on and had tried to block the site.
Toward the middle of 2012, Cuban users began to complain that the
service worked only sporadically. Then not at all.
ZunZuneo vanished as mysteriously as it appeared.
By June 2012, users who had access to Facebook and Twitter were
wondering what had happened.
``Where can you pick up messages from ZunZuneo?'' one woman asked
on Facebook in November 2012. ``Why aren't I receiving them anymore?''
Users who went to ZunZuneo's Web site were sent to a children's Web
site with a similar name.
Reyner Aguero, a 25-year-old blogger, said he and fellow students
at Havana's University of Computer Sciences tried to track it down.
Someone had rerouted the Web site through DNS blocking, a censorship
technique initially developed back in the 1990s. Intelligence officers
later told the students that ZunZuneo was blacklisted, he said.
``ZunZuneo, like everything else they did not control, was a
threat,'' Aguero said. ``Period.''
In incorrect Spanish, ZunZuneo posted a note on its Facebook page
saying it was aware of problems accessing the Web site and that it was
trying to resolve them.
``;Que viva el ZunZuneo!'' the message said. Long live ZunZuneo!
In February, when Saimi Reyes, and her boyfriend, Ernesto Guerra,
learned the origins of ZunZuneo, they were stunned.
``How was I supposed to realize that?'' Guerra asked. ``It's not
like there was a sign saying `Welcome to ZunZuneo, brought to you by
USAID.' ''
``Besides, there was nothing wrong. If I had started getting
subversive messages or death threats or `Everyone into the streets,' ''
he laughed, ``I would have said, `OK,' there's something fishy about
this. But nothing like that happened.''
USAID says the program ended when the money ran out. The Cuban
Government declined to comment.
The former Web domain is now a placeholder, for sale for $299. The
registration for MovilChat, the Cayman Islands front company, was set
to expire on March 31.
In Cuba, nothing has come close to replacing it. Internet service
still is restricted.
``The moment when ZunZuneo disappeared was like a vacuum,'' Guerra
said. ``People texted my phone, `What is happening with ZunZuneo?' ''
``In the end, we never learned what happened,'' he said. ``We never
learned where it came from.''
[Clerk's note: The information below is USAID's response to
the Associated Press story.]
[A Blog From the United States Agency for International Development,
Apr. 7, 2014]
Eight Facts About ZunZuneo
(Posted by Matt Herrick, Spokesperson)
On Thursday, April 3, the Associated Press published an article on
a social media program in Cuba funded by the U.S. Agency for
International Development. The article contained significant
inaccuracies and false conclusions about ZunZuneo, which was part of a
broader effort that began in 2009 to facilitate ``twitter like''
communication among Cubans so they could connect with each other on
topics of their choice. Many of the inaccuracies have been re-reported
by other news outlets, perpetuating the original narrative, or worse.
The article suggested that USAID spent years on a ``covert''
program to gather personal information to be used for political
purposes to ``foment'' ``smart mobs'' and start a ``Cuban Spring'' to
overthrow the Cuban Government. It makes for an interesting read, but
it's not true.
USAID's work in Cuba is not unlike what we and other donors do
around the world to connect people who have been cut off from the
outside world by repressive or authoritarian governments. USAID's
democracy and governance work focuses on strengthening civil society,
governance, and promoting human rights.
Here are eight claims made by article, followed by the facts:
(1) The story says the ``program's legality is unclear'' and
implies the program was ``covert.''
FACT: USAID works in places where we are not always welcome. To
minimize the risk to our staff and partners and ensure our work can
proceed safely, we must take certain precautions and maintain a
discreet profile. But discreet does not equal covert.
The programs have long been the subject of congressional
notifications, unclassified briefings, public budget requests, and
public hearings. All of the Congressional Budget Justifications
published from 2008 through 2013, which are public and online,
explicitly state that a key goal of USAID's Cuba program is to break
the ``information blockade'' or promote ``information sharing'' amongst
Cubans and that assistance will include the use or promotion of new
``technologies'' and/or ``new media'' to achieve its goals.
In 2012, the Government Accountability Office--the U.S.
Government's investigative arm--spent months looking at every aspect of
USAID's Cuba programs. GAO's team of analysts had unrestricted access
to project documents, extended telephone conversations with Mobile
Accord (ZunZuneo) and even traveled to Cuba. The GAO identified no
concerns in the report about the legality of USAID's programs,
including ZunZuneo, and offered USAID zero recommendations for
improvements.
(2) The article implies that the purpose of the program was to
foment ``Smart Mobs,'' funnel political content and thereby trigger
unrest in Cuba.
FACT: The ``USAID documents'' cited in the article appear to be
case study research and brainstorming notes between the grantee and the
contractor. The specific reference to ``Smart Mobs'' had nothing to do
with Cuba nor ZunZuneo. The documents do not represent the U.S.
Government's position or reflect the spirit or actions taken as part of
the program in Cuba. The project initially sent news, sports scores,
weather, and trivia. After which, the grantee did not direct content
because users were generating it on their own.
(3) The story states there was a ``shell company'' in Spain formed
to run the program.
FACT: No one affiliated with the ZunZuneo program established a
private company in Spain as part of this program. The project sought to
do so if it was able to attract private investors to support the effort
after USAID funding ended. Private investment was never identified and
thus no company was ever formed.
(4) The story implies that the United States Government (USG) tried
to recruit executives to run ZunZuneo without telling them about USG
involvement.
FACT: A USAID staff member was present during several of the
interviews for candidates to lead ZunZuneo. The staff member's
affiliation with USAID was disclosed and it was conveyed that the
funding for the program was from the U.S. Government.
(5) The article states that private data was collected with the
hope it would be used for political purposes.
FACT: The ZunZuneo project included a Web site, as is typical for a
social network. Users could voluntarily submit personal information.
Few did, and the program did not use this information for anything.
(6) The article says that the funding was ``publicly earmarked for
an unspecified project in Pakistan,'' implying that funds were
misappropriated.
FACT: All funds for this project were congressionally appropriated
for democracy programs in Cuba, and that information is publicly
available.
(7) The story stated, ``At its peak, the project drew in more than
40,000 Cubans to share news and exchange opinions.''
FACT: At its peak, the platform had around 68,000 users.
(8) The article suggests there was an inappropriate base of
operations established in Costa Rica outside of normal U.S. Government
procedures.
FACT: The Government of Costa Rica was informed of the program on
more than one occasion. The USAID employee overseeing the program
served under Chief of Mission Authority with the U.S. Embassy, as is
standard practice.
Dr. Shah. Okay.
Senator Leahy. Having said that, do you know whose idea it
was?
Dr. Shah. I do not specifically, but I will say this, that
working on creating platforms to improve communication in Cuba,
and in many other parts of the world, is a core part of what
USAID has done for some time and continues to do.
Senator Leahy. Did----
Dr. Shah. Part of the Administration's policy is to
continue to support efforts to allow for open communications.
To the extent that the AP story, or any other comment, creates
the impression that this effort, or any other, goes beyond that
for other ulterior purposes, that is simply inaccurate.
Senator Leahy. Was it a covert program?
Dr. Shah. Absolutely not. It was conducted----
Senator Leahy. Was anyone at the U.S. Interests Section, at
either the Department of State or the White House, aware of the
facts of this program?
Dr. Shah. This program has been notified publicly in
congressional budget justifications dating back to 2008----
Senator Leahy. I have read those and you are talking about
bureaucratese. If you could figure out that it meant this, you
are a lot better than most of us.
Now, Alan Gross----
Dr. Shah. Well, sir, may I speak to that?
The notifications point out that we are working to increase
the free flow of information and support civil society and
engagement using new technology. They specifically highlight
work to reduce Internet restrictions to information. They
highlight using new digital methods to increase information
flow in and out of the island, and they talk about work on
Internet freedom. More detailed conversations took place in
staff briefings.
Senator Leahy. And we have spent millions of dollars, for
example, on the Marti program even though we just made a lot of
people wealthy, but it has not done much of any good
whatsoever, but it makes people feel good to spend the money.
Alan Gross was arrested in December of 2009. Did USAID
consider what the possible discovery of this program by the
Cuban Government, did anybody consider what that might have
meant for Alan Gross?
Dr. Shah. Look, Alan's detention is wrong. The
responsibility for his detention rests with Cuban authorities.
And our administration has worked, and since you mentioned it,
I should highlight that the State Department has led an
aggressive effort to help Alan secure his release. And
specifically, Under Secretary Sherman has worked this issue at
the highest levels, it has been addressed.
Senator Leahy. I have seen some nice press releases, but I
have not seen any steps that would actually get him out.
Dr. Shah. We can share that with you in a private setting,
I am sure. She would be eager to do that.
Senator Leahy. Okay.
Dr. Shah. Because I know that----
Senator Leahy. Let me ask you this----
Dr. Shah [continuing]. There is a lot of focused work on
behalf of the Gross family, whom we think about and care about
deeply.
Senator Leahy. Is the program that Alan Gross was sent down
there to carry out, did USAID consider the fact that if he was
discovered in that program that he would be arrested? Was that
ever a consideration of USAID?
Dr. Shah. Yes, these programs are conducted more discreetly
precisely because of a recognition that providing Internet
access in an authoritarian environment----
Senator Leahy. Then why has----
Dr. Shah [continuing]. Exposes partners to certain risks.
Senator Leahy. There are USAID people who are doing
wonderful things that you and I would applaud all over the
world, many at great risk to themselves because of the places
they are in. And they are constantly faced with the suspicion
``You are not here to help us. You are really a spy.'' And they
have to say, ``Well, no. We do not work for the CIA. We work
for USAID.''
Did you not worry that having a USAID employee do this,
knowing how the Cuban secret police and informants work, that
he would be discovered? Does that not taint all USAID employees
around the world as spies? I mean, we are already getting
emails from USAID employees, current and past, saying, ``How
could they do this and put us in such danger?''
Dr. Shah. Sir, we support civil society. We support and
implement the fiscal year 2014 appropriations language that
directs us to improve access to information and Internet
freedom in many parts of the world. We do it transparently and
with public notifications. The fact that we are discussing it
in this hearing highlights the reality that these are publicly
notified programs.
Senator Leahy. Where are some other countries where you do
it openly?
Dr. Shah. Literally, around the world. And we have had
efforts in Kenya to support the Yes Youth Can----
Senator Leahy. Have they always been done with----
Dr. Shah [continuing]. Movement student groups.
Senator Leahy. Has it always been done with full knowledge
and support of our U.S. ambassadors in those countries in every
instance?
Dr. Shah. That is the aspiration.
Senator Leahy. Is that the reality?
Dr. Shah. I think for the major ones that I am most
familiar with, absolutely. There are things we review. There
are things that our Embassy teams are more than aware of.
And, in fact, the Yes Youth Can program in Kenya is a great
example. They can work. Sometimes they help lean and tip the
scales towards protection of communities and rights, allowing
people to gain access, promoting democratic transitions from
one administration to the next, supporting safe participation
in elections, and we have seen it time and time again. They do
not always work, and I will be the first to admit that, but
often they do.
Senator Leahy. This one had, this one from the get-go had
no possibility of working. That is my problem with it.
Senator Graham.
AFGHANISTAN
Senator Graham. Thank you, Mr. Chairman.
There is an article, I think, in ``USA Today,'' April the
2nd. The title was, ``AID Agency Accused of Cover Up in
Afghanistan.'' The Special Inspector General for Afghanistan
Reconstruction issued a report asserting that USAID kept
information from congress and the American people regarding
Afghan ministries unable to account for cash and other
assistance. And the concern was that some of this money was
going to suppliers and beneficiaries of the funds that have
links with terrorist organizations.
Could you comment on that article?
Dr. Shah. Yes, absolutely, and thank you for the
opportunity, Senator.
First I will say that we have been fully open with all of
these documents. These are assessments that we conduct in order
to mitigate the risks of all of our partners, whether they are
Government partners or others. We have made those full
documents open without any redaction whatsoever to anyone who
wants to be a part of an in-camera review, and that has taken
place in the past.
We have also made documents that were jointly redacted by
the USAID and State available externally, in terms of moving
the documents forward to, I think in that case, it was the
House Oversight and Government Reform Committee where
personally identifiable information and other things that were
deemed national security sensitive were redacted.
But the full, open documents are open. And, by the way, I
am proud of these documents. These documents show that our
teams are doing careful assessments, they assess 13 or 16
ministries. They found some deficiencies in the controls, and
procurement, and financial management systems. So instead of
moving money directly to those ministries, they used a
mechanism called the Afghan Reconstructions Trust Fund run by
the World Bank, and a different central bank mechanism that
allows us to carefully monitor and measure where our resources
are going, and only expend them when we know costs have been
incurred.
And the final thing I will say about this, sir, is that,
for 2 to 3 percent of the cost of this war, USAID has helped 8
million kids go to school, nearly 3 million girls. We have
helped support elections over the past weekend. We have seen
the fastest reduction in maternal and child death anywhere in
the world in Afghanistan over the last decade, and the 44 year
increase in women's longevity in Afghanistan is not something
that I made up. It is actually coming from a properly conducted
demographic and health survey which is the gold standard for
data collection in these types of efforts.
The 2,200 kilometers of road have allowed real economic
growth. And to the extent that Afghanistan has a shot at a
secure and prosperous future, in large part, I believe,
retrospectively people will see this 2 to 3 percent of our
total investment as a very important part of giving that
country a chance and of supporting American security interests
in the long term.
Senator Graham. I would agree with that assessment.
FEED THE FUTURE
Let us now go to Africa. Genetically modified organisms,
GMO's: what role do they play in our Feed the Future
initiative? How are you integrating them into Africa? And very
briefly, could you tell me, are we making progress with our
European partners regarding GMO's utilization in Africa?
Dr. Shah. Well, thank you, sir. And I want to thank the
committee for its support for the Feed the Future program.
When we launched Feed the Future, at the President's
direction at the beginning of the first term, the goal was to
help African institutions develop their own seeds, fertilizers,
improved agricultural technologies that could help millions of
people move beyond needing food assistance, and become self-
sufficient in their own right and commercially prosperous. Part
of that transition is testing the use of all different kinds of
technologies.
And so, we have engaged in a series of partnerships to
develop improved, drought-resistant or water efficient corn for
east Africa; improved, bio-fortified products for west Africa
and southern Africa. And these products are being developed,
tested and introduced based on the regulations and the science
norms in those countries.
I think we are making tremendous progress. The fact that we
have gone from virtually nothing to reaching 7 million farm
households in a 4-year period, I believe, is an extraordinary
effort. And the fact that we have motivated private companies
to join us, most are local, African companies to make nearly $4
billion of commitment----
Senator Graham. And the goal----
Dr. Shah [continuing]. And $48 million of investments is a
big step forward as well.
Senator Graham. And the goal is to create some disposable
income in these farming families so they will have some
purchasing power, building roads to get their crops to the
market, and having some trade agreements in Africa to further
advance farming. Is that correct?
Dr. Shah. That is exactly true, sir. And the goal is,
furthermore, to recognize that when these countries and their
economies stand on their own two feet, they become trading
partners. That creates jobs and security, trade and prosperity
for the United States as well as Ghana, or Tanzania, or
Mozambique, or Bangladesh.
Senator Graham. Thank you.
HEPATITIS C
Egypt has, I think, one of the highest levels of Hepatitis
C infection in the world; over 12 million people infected.
There is--I do not know if it is a new drug--but a drug
available that can actually cure the disease.
Would you be willing to talk with this committee about a
pilot program where we, the United States, could supplement
what the Egyptian Government is doing in terms of treating
people who are infected with Hepatitis C and try to leverage
some of the Sunni Arab countries who provide aid to Egypt to
put some of their money into this program, and see if we can
turn this around?
Dr. Shah. I would be eager to learn more about it, sir,
yes.
Senator Graham. I think it is an opportunity for the
committee and the congress to really weigh-in and help the
Egyptian people with a huge problem, which is Hepatitis C
infection that creates a lot of drain on their economy, and
health problems that have to be addressed.
UKRAINE
On Ukraine, do you have a presence in Ukraine?
Dr. Shah. We do. Yes.
Senator Graham. Where is it located?
Dr. Shah. In Kiev.
Senator Graham. I am very concerned that what you see in
the east is a precursor to more Russian advancement that is
pretty obvious that Putin is setting up a scenario where he is
coming to the aid of ethnic Russians in the east, justifying a
further incursion into Ukraine.
Do you share those concerns? What purpose is our money
being spent on? And is there any chance that the money that we
are investing in Ukraine can yield results? And if we need to
invest more, what would you advise the committee to do?
Dr. Shah. Well, thank you, Senator and we have already
significantly increased the investment just over the last few
weeks in the Ukraine.
Our investment serves two major purposes. One is to support
the elections and civil society and democratic processes, so
they are implemented effectively. And the second is economic--
--
Senator Graham. Do you believe that Putin is trying to
undercut this election? That the actions in the east are trying
to, basically, dismember the country according to the Prime
Minister of Ukraine's statement that that is going on before
our eyes?
Dr. Shah. They appear significant, sir, but our role is to
focus on supporting the economic reforms, getting the IMF
package, which is tens of billions of dollars to help bolster
the Ukrainian economy.
Specifically we will be, and are, providing technical
assistance to do everything from providing land titles to 1.8
million Ukrainian farmers, so they can provide commercial
activity; to supporting the Government to make transitions in
its fuel policies so that it can be more fiscally secure and
have an economy that is more resilient to some of the
geopolitical realities.
Senator Graham. Thank you for all your good leadership and
hard work.
Dr. Shah. Thank you, sir.
Senator Leahy. Senator Landrieu.
Senator Landrieu. Thank you very much, Administrator. Thank
you for the leadership you have provided and the partnerships
that you have developed with other Governments, and nonprofit
organizations, and businesses to leverage the money that the
taxpayers of the United States are putting towards some of
your, some of our very worthy goals.
NATIONAL ACTION PLAN FOR CHILDREN
I have three questions today, and one is about the National
Action Plan for Children. Secretary Kerry sent me a letter in
September of this year and he wrote that the State Department
and USAID were moving forward aggressively to implement the
first-ever U.S. Action Plan for Children in Adversity, which
the White House released in December of 2012. More
specifically, he stated, ``USAID and State recently formed a
senior policy operating group.'' So I have a few questions
about that.
In the 15 months since the National Action Plan on Children
was released, what concrete actions has USAID, under the
direction of this senior advisory committee, taken to advance
the plan's implementation? And specifically, how many people
have been assigned and how much money has been spent in
standing up this Action Plan for Children in Adversity?
Dr. Shah. Thank you, Senator Landrieu, and thank you for
your strong support for USAID, for our reforms all around the
world, and for your tremendous leadership on the issue of
Children in Adversity in particular.
As Secretary Kerry noted, we have made great strides moving
forward. We have a coherent strategy that prioritizes birth
registration efforts to move children to family care and out of
orphanages, and to support efforts to help children survive and
thrive as they grow into adolescence.
We at USAID, to contribute to that strategy most
effectively, have restructured our work, merging a few of our
offices and moving them from global health to our humanitarian
assistance bureau which, I think, will help take this forward.
We have also increased our budget commitments to this area.
The fiscal year 2015 request in addition to the 10 percent of
the PEPFAR program that focuses on orphans and vulnerable
children, will include additional resources specifically for
this Center of Excellence. And we intend to support both new
grand challenges in this area that will allow innovators and
new partners to work with us in partnerships with companies
like IKEA, H&M, and the Lumos Foundation, which was created by
J.K. Rowling, to help leverage our resources and drive other
people's money into this space as well.
The one other thing I would like to highlight is that
because of your leadership, and as a result of our mutual
actions, last year, 500 kids were moved from orphanages in
Cambodia, Rwanda, and Guatemala to family care in those
settings. And our Children in Adversity advisor, our program
partners, and certainly your office, have played a critical
role. And for that, I want to thank you.
Senator Landrieu. Well, thank you, Administrator.
But we have, as you know, a lot more work to be done and
there are 5 members of this committee, and over 60 members of
congress, that have signed on to a piece of legislation called
Children and Families First. And you would not think that a
piece of legislation like that would be necessary. Think about
it. Children and Families First, where else would children be?
So I tell myself every day, it is interesting that I have
to try to pass a bill in congress because when I read your
statement today, even though that we have made a lot of
progress, and I do believe that you are sincere. I cannot find
the word ``family'' in, on any one of these pages. I see
``children.'' I see ``young people.'' I see ``girls.'' I see
``child.'' I see ``childhood,'' on and on and on.
But as I have tried to explain to the chairman and he is, I
think, very sympathetic, one of my big problems in this whole
State Department, whole USAID space is I cannot find the word
``family.'' And when you talk to regular Americans, regular
Americans, Americans whether they are in Delaware or Louisiana
or Vermont, the basis of society is family. Children belong in
families. Families belong together.
And I am sure you are aware of the studies that have been
done by some of the outstanding doctors in our country. Are you
aware of the Bucharest Early Intervention, Harvard Early
Childhood Development, the work of Charles Zeanah at Tulane?
Would you give a minute to explain to the committee what the
findings of this work have been?
Dr. Shah. Well, Senator, I do not have the specific
findings in front of me, but the studies that I have been
briefed on show very clearly that family care is good for kids,
and my kids appreciate being in a family, sometimes.
And so the reality is that you are right. We are trying to
use the flexibilities and the capabilities we have to help
support children to make the transition into families where
that is not possible.
I have met with kids in eastern Congo, just recently, who
are working with our partners there to help them get placed
into families, coming out of the conflict and the war that has
been taking place there, and this should be a bigger part of
what we do.
Senator Landrieu. Okay. Well, let me ask you this question.
Do you agree, then, that child welfare, particularly
international child welfare, is more than a counselor issue?
And needs to be handled in a way that represents or supports
its importance in building civil societies?
Dr. Shah. Yes.
Senator Landrieu. Okay. Because this piece of legislation,
which will be moving through, that is exactly what it attempts
to do, to use the models that are very effective.
And we have, on this committee, helped to create some of
these very effective models for combating trafficking,
providing humanitarian assistance for resettlement of refugees,
AIDS relief, fighting terrorism. I mean, those are four really
extraordinary successes that this chairman, and we have, and
our authorization committee have led.
That is what we are talking about with CHIFF is focusing
the work so that we can put our money and our strategies in
line with our views and values that children belong in
families. Keeping them to the one they are born into, keeping
that family together. If they are separated, reuniting them.
And if we cannot keep the family together or reunite, find
another family for them, in-country preferably, and if not,
inter-country adoption.
The chair is--I am on my last 3 seconds--the chair is aware
that our numbers for inter-country adoption have fallen from a
high of 20,000 down to 7,000. If we do not change this--20,000
just 8 years ago to 7,000--we will be down to zero.
Now, what that means to me is that we are not doing the
very best job we can to help children find families. Most of
them will find families in their own country. But inter-country
adoption is an important--not the only, not the first, not the
central--but an important part of that equation.
So I thank you, Mr. Chairman, for your support and the
members of this committee will continue to work on this. My
other questions were about the Lord's Resistance Army and about
the children in Syria, but I will submit those for the record.
Senator Landrieu. Thank you.
Senator Leahy. Thank you very much. We will continue to
work on this issue. Thank you very much for that.
Senator Johanns.
Senator Johanns. Mr. Chairman, thank you.
If I might start out, I do not have any questions to follow
up on the chairman's comments relative to Cuba. I think those
comments are extremely important, and I would strongly suggest
that somebody in the Administration should pay attention to
those comments. But here is just a general observation having
worked with USAID as the ex-Secretary and now with you.
I really like what you are doing, and I think you have
bipartisan support on this committee for what you are doing. I
think in many ways, you and your team have revitalized the
image of USAID and I just see progress wherever I look.
But when I think about USAID, I think about words like
``humanitarian,'' ``caring,'' ``road-builders,'' people who are
really trying to get in the midst of very difficult situations,
some of the worst poverty in the world, for example, and change
the course of that country.
I cannot imagine why USAID would want to be involved, or
even should be involved--maybe that is the more appropriate
comment--in something like going into a country and dealing,
and trying to get Internet access for people opposing the
regime or some other. Not to say that that is not an important
mission. But why would we put that mission in USAID? Why would
you not look at some other part of the Federal Government to
place that mission? And you do not have to comment on this, Dr.
Shah, but to me, it seems crazy. It just seems crazy that you
would be in the middle of that. That is just my observation.
FOOD AID
Let me, if I might now, turn my focus to something that
everybody on this committee cares very deeply about, and that
is food aid. Just within the last few days, on April 4th, I
wrote a letter to Mark Pryor, Senator Mark Pryor, the chairman
of the subcommittee on Agriculture, Rural Development, FDA, and
Related Agencies, and to Senator Roy Blunt, who is the ranking
member. The letter was my opportunity to urge them to do this
and that on their appropriation.
I am going to read something to you that I put in that
letter, and I would ask you comments on it. ``Over the past
decade,'' I say, ``Funding has declined in Public Law 480--
Title II as commodity prices have gone up. This has meant fewer
commodities have been made available while global hunger has
remained at alarming levels. While I know the committee has
competing priorities, food aid can literally save the lives of
hungry people around the world, generating good will towards
the United States.''
And then I say, ``This request that I am making would
simply restore the average of funding levels over the past
decade.'' So it would boost funding to the average. I could
make, I think, a very compelling case that it should be higher
than that. What is your reaction to that request? And is that a
request that you would support, the Administration would
support?
Dr. Shah. Well, thank you, Senator. Thank you for your
strong advocacy for food aid reform that is carried out
responsibly.
On face value, just hearing that for the first time, I am
supportive of the basic idea that you are articulating, which
is if we can reform the way we provide our food assistance, we
can update and modernize our programs, save more lives, reach
more children and families in critical need, and do that
without costing the Federal Government extra resources. And
that was the motivation behind President Obama's budget
proposal last year. It continues to be his motivation behind
this year's request for some additional flexibility in the
program.
I will say one additional thing, which is the farm bill
combined with some efforts that you, personally, engaged in and
that Senator Pryor and others supported, will allow us in
fiscal year 2014 to reach 800,000 additional children whom we
otherwise would not have because of partially adopting the
President's proposal.
That is 800,000 kids at a time when in and around Syria, in
and around the Central African Republic, in and around South
Sudan, we are going to have needs that far outstrip our
capacities in terms of humanitarian response. And that is a
real, in my view, step forward we can all jointly take pride
in.
Senator Johanns. I will make sure you get a copy of this
letter. I am hoping that the chairman and ranking member of
this committee will also take a look at it. You are almost
never going to see me come down to a subcommittee hearing and
say, ``We need more funding.'' It is not in my DNA, typically.
But having said that, again, based on my experience in
looking at what you are dealing with Syria, Sudan, etcetera, I
do not think there is any other conclusion to that. I think the
resources are just disappearing and, of course, we went through
a very difficult time where prices were extremely high. That
has changed a little bit here, but I just think at the end of
the day, we are trying to stretch the rubber band too tight and
at some point, it breaks.
Dr. Shah. Thank you, sir.
Senator Johanns. Let me, if I might, ask about the proposal
that the Administration has made on the Food for Peace Title II
program. It is scaled back from last year's proposal. You are
still supportive of local and regional purchases. And, as you
know, I have got some history with that proposal too. In fact,
I think you have used the same proposal that I made when I was
Secretary.
Talk to us about local and regional purchases, what you are
trying to do here, and why you think that could be a
difference-maker. And that will wrap up my questions.
Dr. Shah. Well, thank you. And I will just say we have been
really recognized for the strength, speed, and effectiveness of
the response in the Philippines.
Almost all of the food that you saw provided in the first
few weeks, and even months, were the result of local and
regional purchased and prepositioned food stocks with the
American shipped foods then coming in 8 to 12 weeks later. And
your leadership as the Secretary of Agriculture helped make
that possible, helped feed those kids.
We have a lot of data from that program that shows that we
can do this at a lower cost, more effectively buying the types
of food products that have more nutrition value, can be
delivered quicker, safer, are more preferred for communities.
And, frankly, can help communities then get back on their feet
because we are buying from those local environments, creating
incentives for local farmers.
You pioneered this effort, sir, and I think we are excited
to have the opportunity to continue to build bipartisan support
to take it forward. And if the Senate and the House were to
adopt this year's proposal from the President, we would reach
another 2 million additional children at the end of this year
when it is absolutely, critically needed in core and emergency
environments.
So thank you, very much, for your leadership, and I look
forward to continuing to take your guidance.
Senator Johanns. Well, thank you. It is a difference maker.
Thank you, Mr. Chairman.
Senator Leahy. Thank you, Senator Johanns.
I completely agree with your concept that we have got to
make it possible for the people in the area to do things, to be
able to help themselves. We can give them the help to help
themselves. And Dr. Shah, I appreciate the fact that you have
taken that attitude as strongly as you have since you have been
here.
Senator Coons, you visited many of the areas, some very
unglamorous areas wherever the USAID has been very helpful, and
I am glad to have you here.
Senator Coons. Thank you, Mr. Chairman. I am grateful for
the opportunity you gave me to travel to Cuba with you, and to
be able to meet Alan Gross in person, to be able to see the
conditions of his imprisonment, and to get to hear personally
how difficult his experience has been. I just want to say that
I share and support the chairman's concerns about doing
everything we can to secure Alan's release.
I also have enjoyed working with my colleague, Senator
Johanns, on food aid reform, and I look forward to continuing
to work together on responsible reform that sustains our
investment in food aid relief, but that also makes it more
efficient and more effective. So if we can strike the midpoint
that sustains our relief around the world, but also makes a
better use of American taxpayer dollars, well, that would be a
great outcome.
POWER AFRICA
I recently chaired a hearing in my senate subcommittee on
Africa about Power Africa with Senator Flake of Arizona, and I
am optimistic about the potential power of this Administration
initiative to tackle energy poverty and to really make a
lasting difference as we work together towards your ambitious
goal of ending extreme poverty and making other significant
advances in development and in security.
What steps are you planning to take to ensure that Power
Africa is sustained? Some of the most significant initiatives
in development today, such as PEPFAR and the Millennium
Challenge Corporation, were started under the Bush
Administration, but structured in a way that they have lasted
well beyond it, and have a made a real difference.
How can Power Africa be funded, authorized, and sustained?
And have you thought of a future expansion that would allow it
to function beyond the initial six countries, and that would
allow it to have a timeline that is more appropriate for power
infrastructure projects?
Dr. Shah. Thank you, Senator.
Thank you for your extraordinary leadership on development.
The depth of your knowledge, experience, and your help in
connecting us to great businesses, universities, and others who
can be part of this effort to end extreme poverty have been
invaluable.
I want to thank you specifically for the efforts you have
made on food aid reform. I know that it is a difficult topic on
which we need to work together, and I am very hopeful that the
President's proposal of this year is perceived as and is, in
fact, an effective midpoint that can help us continue to make
the kind of progress that people have not previously expected,
but we have, with your leadership Senator, have been able to
deliver.
With respect to Power Africa, I believe this is the key to
unlocking growth and development, particularly in sub-Saharan
Africa where around 550 million people still go without real,
consistent power access. And we can only imagine how hard it
would be to start a business or to create economic opportunity
in your community if you were paying exorbitant prices for
diesel that is trucked in and put into generators because there
is no proper energy access.
Power Africa is structured to bring a lot of different
American agencies together. USAID coordinates the effort and
the coordinator is based in Nairobi, but we work hand in glove
with the Overseas Private Investment Corporation, the Export-
Import Bank, State Department and, very importantly, the
Treasury Department that brings all the multilateral partners
together in support of this effort.
We are supportive of the Electrify Africa legislation in
the House and look forward to further authorizing and
appropriations language in both the House and the Senate to, in
fact, codify this as something America can do in Africa over
the long term. And we believe that it will need appropriate
funding. We have committed upwards of $250 million of
appropriated resources, which then leverages billions of
dollars of private investment commitments. But we should not be
too excited about the private investment commitments if the
appropriations do not come through.
And so, your advocacy for the Development Assistance
Account, specifically, which funds Power Africa, as well as
education, water, Feed the Future, and so many of our other
high priority development initiatives, and is under a lot of
pressure is particularly valued for the Power Africa program.
And finally, I think with respect to partnerships, this has
unlocked a new level of public-private partnership that can
really dramatically improve energy access. We have seen of the
10,000 megawatts we committed to supporting in six countries,
we have already identified more than 5,000 of the megawatts
through specific projects and programs. Those are moving
forward.
We are actively considering right now how to expand this
program and also how to ensure that countries that are not
formally Power Africa countries, but where there are
businesses, and local leaders, and Governments that want to do
the right thing, and allow for public-private partnerships to
create low cost energy access, that we are supporting that
effort as well.
Senator Coons. Thank you.
I share your concern that the Development Assistance
Account is under significant pressure. My concern is that Power
Africa and Feed the Future are funded out of it, but there are
significant pressures on democracy, governance, and peace
building around the world in a variety of countries addressed
by other members of this subcommittee.
So I frankly think it could stand to have more robust
funding and, frankly, to have a dedicated line that makes it
clear that Power Africa is being separately sustained for the
long term.
I have a number of other topics and relatively little time.
There are, as you mentioned, three Level 3 crises going on in
the world at the moment: Central African Republic and South
Sudan being two of the three. I am worried about how we address
the urgent short-term humanitarian needs in both countries, and
the significant requirement for peacekeeping assistance, and
then the requirements for USAID to provide support for
stabilization and return to normalcy, if that is possible in
these two countries. Let me just mention that as a first a
question, and then a second and third, and give you a few
minutes to answer, if I might.
Second, the Global Development Lab; I think one of the
things that has been the hallmark of your leadership of USAID
has been a focus on transparency, accountability, and
innovation. When we combine science, innovation, and
entrepreneurship, we really can solve the grand challenges of
development, and the Global Development Lab really shows
promise for making this possible.
What sort of additional legal authorities does USAID need
from congress to maximize the efforts and the long term impact
of the Lab?
Then last, I am concerned about wildlife trafficking. We do
not yet have the details of your fiscal year 2015 budget, the
detailed congressional budget justifications, and I look
forward to reviewing them and seeing what sort of investment
there will be in combating wildlife trafficking, particularly
in Africa.
Dr. Shah. Thank you, Senator.
On South Sudan, we agree with you. There, our Famine Early
Warning System is noting that there is a very high famine risk
for a variety of reasons, mostly due to violence. Last week, we
announced $83 million of food items that will be prepositioned.
But it is going to be very, very difficult and we will
appreciate your support through what is a difficult period.
With respect to wildlife trafficking, we also recognize
that this is an important issue, and I think between fiscal
year 2014 and 2015, we are doing some very innovative and
important things, and I would look forward to following up with
you on it. I am very excited about what the supply side and
demand side efforts we are going to be pursuing.
On the Global Development Lab, I want to thank you for
raising it. We have worked for years on an effort that both
President Obama, and Secretary Clinton, and now Secretary Kerry
have been very enthusiastic about. We have identified 32
partners including private companies, research universities,
student groups, NGOs. They have all come together to say, ``Let
us work together to bring science, technology, innovation to
global development so we can achieve the end of extreme
poverty, better, cheaper, faster.''
We are seeking some important, new authorities. There are
some hiring authorities under Schedule A that we hope to pursue
as part of this discussion. We are requesting the ability to
use some amount of development assistance funding for health
purposes so that we are not as sectorally focused going
forward.
We are looking forward to having some, notwithstanding,
authority that might help the Lab do its work. And we are
supportive of efforts to, over time, have the ability to own
and commercialize intellectual property.
So we look forward to working with you, but if American
development institutions over the long term are going to have a
DARPA-like institution that can bring high powered, high
quality, well meaning American science and innovation to the
field of development, we would, in fact, need those types of
authorities. And we value the continued support in helping us
find the partners to build this Lab.
Senator Coons. Well, thank you, Administrator and I value
your tireless leadership, your personal commitment to making
sure that USAID is transparent, is responsive to congress, and
spends taxpayer money as responsibly as possible. I look
forward to continuing to work with you on these very important
issues. Thank you.
Dr. Shah. Thank you.
Senator Leahy. Senator Boozman.
Senator Boozman. Thank you, Mr. Chairman and thank you for
being here. We appreciate your leadership, and you and your
Agency's hard work.
CHILD SURVIVAL
Can you talk a little bit about, there is concern about
decreasing maternal and child health funds, and especially cuts
to the bilateral programs. Talk a little bit about how that is
going to impact child survival.
Dr. Shah. Thank you, Senator.
First, let me say, thank you for your partnership and
support for child survival, for malaria, for all the issues you
have fought and worked hard on over the years. And I know you
know, but your efforts have helped generate some real successes
that mean that more children survive in many, many parts of the
world. So thank you for that.
With respect to this year's commitments in maternal and
child health, they do represent a small increase in our
commitment relative to the fiscal year 2014 request level. And
I, of course, always want more resources in general from the
U.S. Government, from private partners, from countries
themselves that still pay for the bulk of this, to help
accelerate the end of preventable child death.
We have worked aggressively with more than 170 countries
now to have everyone commit to an evidence-based, results-
oriented approach to end preventable child deaths. In 24
countries specifically, we have restructured our programs to
invest in the most cost-effective ways to save children's
lives. Those 24 countries account for just over 70 percent of
the 6.6 million children that die every year unnecessarily.
I am confident that these resources, especially if we can
continue the successful track record we have had of getting
companies, faith institutions, NGOs, and just as importantly,
the countries themselves to put more in, will allow us to be
successful to achieve our goal.
NUTRITION
Senator Boozman. In relation to that, talk a little bit
about the U.S. Global Nutrition Strategy, which I know that you
are working very, very hard to develop. We appreciate your
leadership in that, and talking about that as a roadmap to
achieve some of the goals that we want to achieve.
Dr. Shah. Well, thank you, Senator.
As part of both Feed the Future and our global health
efforts, we have seen a lot of new science that shows that
children who are malnourished early in their lives are stunted
and have less effective and full brain development that then
affects their capacity to contribute to society for the rest of
their lives.
We also know that there are targeted, specific ways to
prevent that kind of disastrous consequence of large scale
child malnutrition. So we are leading an interagency process to
create a U.S. nutrition strategy.
Last year at the G8 meeting, I committed on behalf of the
United States, that we would make significant investments in
health and agriculture that focus on child and maternal
nutrition in particular. We are the world's largest funder of
nutrition efforts with, over a 3 year period, nearly $1 billion
going to specifically child and maternal nutrition efforts
according to our analysis.
And our strategy will show a very clear way to set a
target, which will be reducing stunting by 2 million kids, to
measure outcomes in the countries where we are going to focus,
and to bring together public-private partnerships and NGOs to
expand the resource commitment in this area.
But this, I think, is the one area where we work in this
space, in which the science has evolved tremendously over just
the last few years. And so, our ability to produce new and
improved food products as part of our food assistance programs;
our ability to target women, pregnant women with clean water
interventions to ensure that they avoid disease during a period
of time when they are at high-risk; and our ability to support
child nutrition during pregnancy, but also just after, with
specific, low cost, supplemental feeding can really help change
the trajectory for some of these countries that have 40-50
percent child stunting rates.
CHILDREN'S VACCINES
Senator Boozman. Very good. Again, along the same vein, the
GAVI Alliance, Global Assistance Vaccination, for those that
are listening that are not familiar, but do you feel our
contribution is being leveraged to the maximum to get the
results that we need?
And, the other thing is what more can we do, what more can
the United States do--and it does a tremendous amount--to
ensure that our work with GAVI countries has the high rate of
success that it has enjoyed?
Dr. Shah. Well, thank you.
The fiscal year 2015 budget includes a $200 million
commitment for the Global Alliance on Vaccines and
Immunization. We, like Bill Gates and so many others, who have
invested in this effort, believe this is one of the most cost
effective ways to save children's lives and that is why we are
proposing a unique increase in our commitment.
We also recognize that GAVI helps low income countries
reach children with new vaccines that they simply would not get
otherwise. By doing deals with pharmaceuticals and vaccine
manufacturers, they secure the vaccines at lower prices for
those countries than they would otherwise gain access to.
USAID then works to supplement GAVI's work in countries to
help train health workers, to help provide some infrastructure,
whether it is motorbikes or bicycles or refrigerators to make
sure that those vaccines can get to where they are most needed.
One of the most hopeful moments I have had in this role was
walking through a refugee camp in Dadaab during the Somali
famine and seeing that these emaciated Somali children were
actually getting a world-class pneumococcus vaccine because of
the efforts of GAVI and the United States together.
Senator Boozman. That is great.
Finally, and I think this is really important, but last
year, you announced USAID would be scaling back and winding
down missions in certain countries in order to focus its
resources on areas with the most potential impact, and USAID
has recently closed some countries. You also noted that USAID
could graduate at least seven countries from assistance by
2015.
What progress have you made in moving more countries beyond
aid and, as you like to say, putting yourself out of business?
Which, again, is really what this is all about, and you have
done a great job, I think, in moving the Agency in that
philosophy.
Dr. Shah. Well, thank you, Senator. We absolutely believe
our mission should be to work to end extreme poverty, but do it
in a way that builds local capacity, so we do not have to be
there over the long, long term. And in that context, I am proud
to have supported this effort to close out of certain programs
and missions.
Over my tenure, we have taken down 34 percent of our total
programs around the world in order to be able to focus
resources in food, Feed the Future, in child survival, in the
kinds of programs that we think deliver the best return on
investment for the American taxpayer in terms of supporting the
world's most vulnerable people. And we are on track to fulfill
our commitments that we made to change our mission structures
and downscale in some of the places we highlighted by the end
of fiscal year 2015.
Sometimes those mission close outs cost us a little money
in terms of staff transitions and programmatic transitions. We
are cognizant of trying to find local partners to pick up the
costs of some of the programs that are ongoing because they are
effective programs the countries value. So we are trying to do
this in a very responsible and sensitive way.
But over my tenure, I have felt that this approach was the
only way to, in a largely budget-neutral environment, have the
flexibility to invest in the things that we think will make the
biggest difference in terms of serving the world's most
vulnerable people. Thank you.
Senator Boozman. Thank you. Thank you, Mr. Chair.
Senator Leahy. Thank you very much.
CUBA
Let me ask about a couple of these other things. You said
the Cuban Twitter program was not a covert program, it was just
a discrete program. Is that correct?
Dr. Shah. Yes.
Senator Leahy. It was U.S. Government activity, correct?
Dr. Shah. We supported the program, but it is no longer
active.
Senator Leahy. And its purpose was to influence political
conditions abroad by gathering information about Cuban cell
phone users to encourage opposition to the Cuban Government. Is
that correct?
Dr. Shah. No, that is not correct. The purpose of the
program was to support access to information and to allow
people to communicate with each other as we do in many other
parts of the world. The program was not----
Senator Leahy. And were the people----
Dr. Shah [continuing]. For the purpose that you just
articulated, sir.
Senator Leahy. Were those people told that this was a U.S.
Government program?
Dr. Shah. Well, the platform was built and then people were
able to communicate on the platform, and some 48,000-plus
people did.
Senator Leahy. Did they know that it was a U.S.
Government----
Dr. Shah. I do not believe so, no.
Senator Leahy. Thank you.
Dr. Shah. That was part of discretion.
Senator Leahy. And, in fact, there were quite a few efforts
made to conceal the fact that it was a Government program. Is
that correct?
Dr. Shah. Well----
Senator Leahy. Using shell companies and others?
Dr. Shah. Well, the program was conducted discreetly. Some
of the details to which you are referring, sir, in the AP story
were inaccurate. There was no shell company, or Spanish
company----
Senator Leahy. So, there was no----
Dr. Shah [continuing]. And there was no Pakistan money
involved. We put out a point by point rebuttal, but----
Senator Leahy. Did we tell them it was U.S. Government
money and a U.S. Government program?
Dr. Shah. I am sorry. Could you repeat that?
Senator Leahy. Did we tell the people in Cuba that this was
a U.S. Government program?
Dr. Shah. No.
Senator Leahy. Well, who did we tell them this was coming
from?
Dr. Shah. Well, we conduct programs in lots of different
places without branding----
Senator Leahy. On this particular one----
Dr. Shah [continuing]. Or advertising USAID.
Senator Leahy. You know, on this particular one, where were
they told the program was coming from?
Dr. Shah. I do not know. We did not advertise that this was
a U.S. program just as we, as you know, sir, provide--We have
provided 250,000 surgeries inside of Syria, and we do not
disclose or highlight that those are American programs
providing them medical support because----
Senator Leahy. Did we tell them it was a Spanish company
that was doing it?
Dr. Shah. To be honest, we can go back and get you the
details, sir, but I know that there was no Spanish company
created, and that was one of the inaccuracies in the AP story.
Senator Leahy. But there had to be somebody who was doing
it.
Dr. Shah. Well, I will----
Senator Leahy. And they had to be told it was from
somebody. Is that correct?
Dr. Shah. Well, when you create a platform and then people
would use the platform, we did not advertise that that platform
was supported by the U.S. Government. So that is an inaccurate
representation.
Senator Leahy. If we did not have our embargo, you would
have so many American companies down there, fighting for the
chance to do this and very openly doing it, it would have
accomplished a lot more than this program did.
Dr. Shah. Sir, that----
Senator Leahy. And probably put a lot fewer people at risk.
Dr. Shah. Sir, let me speak to that because it highlights a
reality that we struggle with. This is a program that we are
specified to do and the restrictions on it are quite clearly
specified as well. And, of course, as you are aware, sir, USAID
does not define the full extent of that policy.
My goal is to make sure that we are implementing the
program consistent with the law and managing it well. And if
you look at the GAO report that came out in 2013, I believe the
title of the report was ``USAID Significantly Improves
Management Over This Program.'' And you compare that to the
2008 or 2006 GAO reports that, I think, the title of those
reports were, ``USAID Needs to Improve Management Over This
Program.''
Senator Leahy. I think everybody on this panel, both
democrats and republicans, have praised you for improving----
Dr. Shah. Thank you, sir.
Senator Leahy [continuing]. As have I, but on this
particular one, we are talking about Alan Gross. He was in
Cuba. He was carrying out a USAID-funded program. He was given
very little training about the enormous personal risk. He was
arrested. He is now facing, in effect, a life sentence. I am
told by everybody in the Administration, ``Oh, we are working
so hard on this,'' but I do not see where they have achieved
anything. He does not either. That is why he started a hunger
strike.
Have you done anything specifically, personally, to get him
home?
Dr. Shah. I have, sir, but the responsibility and the
leadership for this rests with the State Department, and the
Secretary, the prior Secretary, Under Secretary Sherman, and
President Obama have all been involved in efforts to secure
Alan's release.
And again, that is not something I can speak about
publicly, but I am certain that Wendy Sherman or others that
are responsible for that body of work would be, would
appreciate the opportunity to disclose what they have done to
you in the right setting.
Senator Leahy. Well, I have asked----
Dr. Shah. And I would also say----
Senator Leahy. Let me read you what another USAID
contractor wrote to me this morning about Alan Gross. He said,
``I always held out the hope that maybe the silence by the
USAID was an effort to find a quiet, diplomatic solution to
secure Alan's release. Now, with the revelation of the Cuban
Twitter program, it seems that the Agency was never very
concerned with Alan's fate and their silence was really a
reflection of callousness. I think the Agency and Congress need
to think through the U.S. Government's moral responsibilities
to any American, even a lowly contractor, that it puts into
harms way by ordering them to engage in programs that are
illegal under the host country's law. Either USAID needs to
refrain from these programs entirely,'' he says that is
preferable to him. ``Or if it is going to run these types of
programs, it needs to take steps to ensure in the event
something goes wrong that it is ready to take a level of
responsibility for the people hurt.''
What about that?
Dr. Shah. Well, sir, three things.
The first is we do care about work on behalf of and support
Alan, and his family, and Judy and, we think about them all the
time. But more importantly than thinking about him, we have a
very, very sophisticated leadership team led out of the State
Department that has been, has tried a number of things to
secure his release.
Second, his incarceration is offensive and completely
inappropriate, and entirely the responsibility of the Cuban
authorities that are holding him for simply carrying out an
effort to help people gain access to the Internet.
And third, I would like to just point out, because this was
reflected in the letter you just read. There are environments
like Uganda right now, where it would be inconsistent with
their new law to try to find and provide antiretroviral drugs
to people who are homosexual. We do that anyway and we do that
because it is a reflection of our values and it is a part of
our programmatic responsibilities.
So, these are difficult issues. I have struggled with the
challenges of managing these efforts, but we are doing them
better than they have been done in the past. We have external
validation that has been pretty comprehensively assessed. Not
just some desk review of what USAID is doing, but the GAO went,
interviewed the partner, interviewed the sub-grantee, had
access to all the documents, and highlighted and complimented
our improved management performance in the title of their
report.
And I think about Alan every day, but I also know that I am
buffeted by a State Department that takes the lead in these
types of issues, and they are highly sensitive and I would
defer to them to be able to explain to you in the appropriate,
private setting or classified setting what----
Senator Leahy. I have had private----
Dr. Shah [continuing]. Has taken place.
Senator Leahy. I have had private settings with them; I
have yet to hear any explanation whatsoever.
Thank you for mentioning Uganda. I struggle with that
because of the absolutely irresponsible position taken by their
government; unfortunately promoted by an American missionary
and those associated with him. I struggle with whether we
should cut off aid to Uganda or not. You do not want to hurt
the people, but I question sending money to a country that
would do something like that.
Senator Graham, thank you for coming back.
Senator Graham. Thank you, Mr. Chairman. You bring up a
good point, and you are in countries where women, young girls,
are basically denied opportunity for an education. Afghanistan,
obviously, is trying to move forward.
We have to be somewhat practical in our aid, but also not
abandon our values, and one of our values is people should be
able to freely communicate. You should be able to get drugs
when you are in a lethal situation regardless of your sexual
orientation and regardless of your gender. You should be able
to have access to schools and that is what we believe in as a
Nation, so it is a complicated world.
Let us go to the West Bank right quick. President Abbas, of
the Palestinian Authority, signed letters of accession for 15
international conventions and treaties. They are threatening to
try to seek membership at different levels in the United
Nations, going around the peace process. We have legislation
cutting off funds if they continue to seek membership in the
U.N. and become an independent State without negotiating with
their neighbor Israel.
How do you see these actions of President Abbas? Do you
believe it violates existing law? And what would the effect be
if we had to terminate our aid programs in the West Bank and
Gaza?
Dr. Shah. Well, thank you, Senator, for your comment about
women and girls in Afghanistan and Uganda.
With respect to the West Bank, and I appreciate the
question. Immediately, the signing of those particular
documents did not trigger any of the concerns with respect to
specific U.N. organizations and American funding for them.
With respect to our work in the West Bank, and I was just
there with Secretary Kerry a few----
Senator Graham. Would you consider these letters
provocative?
Dr. Shah. I will let Secretary Kerry best characterize the
reaction to that.
Senator Graham. I do.
Dr. Shah. I know he is working very, very hard and the
whole team is working hard to abide by and try to honor the
fact that both parties have said they want to continue to be a
part of negotiations.
Now, with respect to what we do in the West Bank, we
provide a significant amount of resources to the authority
there to help provide basic services and support for its
communities. We have public-private partnerships that help
create some economic opportunity and micro enterprise.
I had a chance to visit many of the farmer co-ops and
things that we have, where we provide support, and I personally
think it would be a significant step back for the people of the
West Bank if our support were to go away. In addition to all of
the direct support we provide, we are their lead partner in
trying to mobilize international private investment commitments
should the economy open up. And Secretary Kerry and Tony Blair
have announced a $4 billion investment package from a series of
companies. This puts all of that, of course, at risk and I
think those are important steps.
Senator Graham. Let me just make it clear. This
Administration's position is the Palestinians should negotiate
with the Israelis and vice versa----
Dr. Shah. Absolutely.
Senator Graham [continuing]. Before they try to seek
independent State status at the U.N.
Dr. Shah. Yes.
Senator Graham. That is the congress' decision.
Thank you very much.
Senator Leahy. Well, certainly, I have, you can imagine,
other questions, but I also understand the constraints you have
in answering some of them.
You have, incidentally, a terrific record on child
survival, for which I have applauded you both publicly and
privately.
Have you considered working with the Cuban Government on
child survival programs, something that could be done openly?
Dr. Shah. Sir, my understanding of the Helms-Burton
legislation is that we would not. We would be precluded from
engaging in those kinds of----
Senator Leahy. So the Helms-Burton Act would make sure
that, to show how tough we are, we could not help Cuban
children who have health needs.
You know, I kind of, you do not have to answer this, but I
look at some of these programs and the money we waste on Radio
Marti and other things, and I would like to see free markets in
Cuba. I would like to see an openness there. I would like to
see an end to the repression of people who speak up for their
rights in Cuba. I am not blind to things that every one of us
could disagree with in Cuba.
But I have to think that some of these programs, somebody
dusts off a memo that says, ``If we had just carried this out,
we would get rid of those Castro's.'' And they strike out the
fact of who that memo was given to, first, to President
Eisenhower, and then to President Kennedy, and then to
President Johnson, and then to President Nixon, and then to
President Ford; you get the drift of where I am going.
And of course, the Castro's are still there. I often think,
``What would have happened if we had tried the kind of direct
engagement as we have with other countries that have been
historically repressive or communist?'' But when we have
flooded them with American tourists, and students, and exchange
programs, and programs that improve health, and education, and
other things, how much they have changed afterward.
I think if we had had that kind of a non-embargo, you would
have had, as I mentioned earlier, so many telecommunication
companies from the United States to set up the things that you
were trying to set up clandestinely. And that Cubans would have
no more ability to cut that off than Turkey had to cut it off
when they wanted to cut off Twitter accounts.
There will come a time, I suppose, when we will move from
the 1950's maybe to the 1970's or even the 1980's, and the
United States would be better off for it. We know how it is
reflected in the rest of Latin America.
Here we are, the most powerful Nation on earth, and we act
as if we are afraid of a tiny island country, a country where,
when I visited there, most of the people would love to be able
to communicate more with the United States, eager to hear about
life here.
I would like to be able to see you doing the things you do
so well. I mention child health, and that is something that you
can be proud of, and you have done so much personally around
the world; just think how great it would be if we were doing
that in Cuba. You do not have to answer, but I have no further
questions.
ADDITIONAL COMMITTEE QUESTIONS
I will keep the record open for written questions until
Friday.
[The following questions were not asked at the hearing, but
were submitted to the Department for response subsequent to the
hearing:]
Questions Submitted to Dr. Rajiv Shah
Questions Submitted by Senator Patrick J. Leahy
Question. Development Experience. I wonder to what extent
significant experience in overseas development is a requirement for
working at USAID? I am struck by the fact that few if any of USAID's
senior officials appear to have that background. They are very
experienced in their own specialized fields, but it is not the same as
sustainable development--meaning, extensive field work building
relationships with local organizations and institutions in a way that
helps them achieve their goals. Can you respond?
Follow Up. Since 2008, USAID's Development Leadership Initiative
has hired 820 new permanent Foreign Service Officers increasing USAID's
permanent Foreign Service corps by 80 percent. How many of these
recruits have strong backgrounds in development?
Answer. The Development Leadership Initiative (DLI) hiring from
2008 through 2012 capitalized on the low rate of hiring by USAID during
the previous decade, which created an eager and well qualified group of
applicants for almost all of the specialty areas (backstops) needed by
USAID. The combination of minimum requirements of a master's degree in
most backstops and strong competition resulted in a talented and
experienced group of new Foreign Service Officers (FSOs) who have
already made valuable contributions to the Agency since joining USAID.
Additional qualifications are required for specific backstops, such as
law degrees and accounting majors.
The average of about 3 years of relevant overseas experience for
the entire group does not adequately capture the range of experience
and skills that all of the new officers have brought to the Agency.
Thirty percent (246) of the new FSOs have Peace Corps experience as
volunteers and/or staff. A majority of the new hires also brought
relevant foreign language skills to the Agency which helped them meet
the mandatory language requirements before deployment.
The smaller group of mid-level DLI hires had considerably more
overseas experience as contractors or working in other capacities with
USAID, other development agencies, or non-governmental organizations.
Our estimate is that the group of mid-career DLIs has an average of
over 10 years of development experience, most of which is overseas.
Question. Local Organization Capacity. I recently learned about a
$600 million ``Indefinite Delivery--Indefinite Quantity Contract'' for
capacity development of national and sub-national governments, private
sector entities, and non-governmental organizations (NGOs). The
performance period of the contract is 2013 through 2020. The
implementers are mostly the usual big U.S. contractors. Is this an
example of USAID Forward?
Answer. A key element of USAID Forward is increasing the Agency's
work directly with local governments, NGOs and private sector--and
building those actors' ability to perform without U.S. assistance. The
Agency's Human and Institutional Capacity Development (HICD) initiative
is a model of structured and integrated processes designed to identify
fundamental causes of performance gaps in host country partner
institutions, address those gaps through a wide array of performance
solutions in the context of all human performance factors, and enable
cyclical processes of continuous performance improvement through the
establishment of performance monitoring systems.
The ultimate goal of HICD is to help USAID's partners improve
performance in critical areas leading to measurable results in
achieving the organization's goals and objectives. In undertaking HICD
initiatives, USAID missions will strengthen their partner
organizations' abilities to more effectively perform for their
constituents and stakeholders and will increase the effectiveness of
ongoing technical assistance provided by the United States Government
and other International Donors.
HICD is implemented through two mechanisms: the Human and
Institutional Capacity Development (HICDpro) indefinite delivery/
indefinite quantity contract (IDIQ) and HICDpro for Critical Priority
Countries (CPCs) IDIQ.
The HICDpro IDIQ is a mechanism under which all awards were
reserved for small businesses. This 100 percent small business
mechanism has a maximum ordering limitation of $300 million over a 5-
year ordering period for programs worldwide.
The HICDpro for CPCs IDIQ provides an overarching framework for
capacity development programs. Under the HICDpro IDIQ for CPCs, there
is a maximum ordering limitation of $500 million over a 5-year ordering
period. Two of the five prime awards were reserved for small
businesses, increasing competition and further contributing to the
diversification of contractors doing business with USAID.
Task orders under HICDpro and HICDpro for CPCs are subject to a
comprehensive review involving the Bureau for Economic Growth,
Education and Environment's Office of Education (E3/ED) and mission
technical staff, technical offices throughout the Agency, and both
mission and headquarters senior management who are well versed in best
practices of implementing USAID Forward initiatives. These safeguards
help ensure that USAID funding directly impacts local organizations and
host country governments.
All six awards under the HICDpro IDIQ were made to U.S.-based small
businesses, including one minority-owned firm. Under the HICDpro for
CPCs IDIQ, two (2) of the five (5) awards were also made to U.S.-based
small businesses, one of which is a minority-owned, SBA-certified 8(a)
disadvantaged, and woman-owned firm from an Historically Underutilized
Business Zone. These eight HICDpro prime contracts ensure maximum
practicable small business participation in HICDpro activities and are
in full support of the Agency's mission for small and disadvantaged
business utilization. This exemplifies another aspect of USAID Forward,
which is broadening the Agency's partner base.
Building on already existing capacity of host country governments
and local organizations, technical design features and required
outcomes of the HICDpro model include:
--Transferring HICD knowledge and expertise to local key performers
and other local staff for the organization's own internal use
and functionality.
--Sub-contracting or otherwise outsourcing HICDpro technical
expertise and services to local organizations.
--Host country governments and local organizations designating
engaged and participatory leaders and key staff to coordinate
and provide HICDpro activities, expertise, and performance
solutions. Most institutional performance solutions are
internal business changes and can only be implemented by each
organization itself.
--Host country partner organizations institutionalizing an internal
performance monitoring system that enables the host country
partner to regularly monitor its own organizational performance
for its own evidence-based management and reporting.
USAID is confident of the HICDpro model's contribution to USAID
Forward objectives and principles. The HICDpro model equips host
country governments and local organizations with methodologies and
tools designed to strengthen each organization's capability of
providing quality services and products to their constituents and
stakeholders.
Question. Follow Up. For years, I have been asking why USAID
``Requests for Proposals'' are so mind-numbingly technical and
bureaucratic and impossible for anyone but a USAID procurement officer
or U.S. contractor to understand. It makes it very hard for local
organizations to compete. What is being done about this?
Answer. USAID appreciates your support for our efforts, under the
Local Solutions (LS) initiative, to increase the use and participation
of local organizations where prudent and appropriate. We also share
your desire to make our Requests for Proposals (RFP) and other
solicitations comprehensible to all potential partners, including local
ones.
As you know, this is a key goal of the Agency's LS initiative and
we have taken a number steps to make things easier for local
organizations. For example, we have:
--created Webinars, e-learning modules that explain USAID contract
and grant making procedures to potential new partners;
--encouraged two-step application processes that start with
submission of a concept paper followed by a full proposal that
often include how-to information sessions;
--translated procurement documents and standard agreement provisions
to the extent the law allows (see below) into local languages;
--conducted in person, pre-award conferences to explain procurement
procedures to local organizations, as well as answer questions
raised about the RFPs or other Agency solicitations; and
--offered post award, new partner conferences which explain in local
working languages USAID's standard form agreements, including
terms and conditions of the award that may be difficult for
speakers of English as a second language to understand.
To further facilitate our work with local organizations, USAID
conducts outreach to current and potential partners through training,
industry days, and other events. As part of the LS initiative, we are
also establishing a feedback mechanism to spot and address further
instances where red tape or overly technical communications frustrate
our attempts to work more with local partners.
More broadly, USAID has developed ``Principles of Plain Language''
and related training courses to promote clear government communications
that the public can understand and use, and requires all Agency
guidance to be written in plain language. While we acknowledge that
this is a work in progress, we understand that clarity of
communications and to the extent possible, in local working languages,
is critical to the success of our Agency's mission.
That said, there are some limitations on what we can do under
current law. USAID's RFPs and other solicitations for contracts must
comply with the Federal Government's laws and regulations applicable to
government contracts, including the Federal Acquisition Regulation
(FAR) (48 CFR Parts 1-53) for all acquisitions using appropriated
funds.
The FAR requires that Contracting Officers use the Uniform Contract
Format (UCF) when drafting RFPs. The FAR prescribes forms and
approximately 580 possible solicitation provisions and contract
clauses. These are used to prepare 8 of the 13 sections required by the
UCF. To comply with the FAR, a typical RFP may contain more than 100
prescribed FAR solicitation provisions and contract clauses.
Due primarily to new and amended Federal legislation and Executive
orders, the number of FAR provisions and clauses continues to grow each
year. For example, FAR Part 52 Solicitation Provisions and Contract
Clauses now requires over 600 pages to set out these often complex
provisions and clauses.
The FAR also limits the use of languages other than English; FAR
52.214-34 explicitly provides that all offers in response to contract
solicitations must be in English and those in other languages must be
rejected.
USAID does have more flexibility in designing Requests for
Applications (RFA) for assistance awards (cooperative agreements and
grants), which is where the bulk of USAID awards to local organizations
are occurring, as the FAR does not apply to grants and cooperative
agreements.
However, in accordance with the Federal Grant and Cooperative
Agreement Act, USAID may only use an RFA when the anticipated purpose
of the relationship between USAID and the cooperative agreement or
grant recipient is to transfer something of value (such as money,
property, or services) to the recipient to carry out a public purpose
authorized by U.S. law. An RFP for a contract must be used when USAID
seeks to acquire, by purchase, property or services for the direct
benefit or use of the Agency in achieving its mission.
Question. Afghanistan. The Special Inspector General for
Afghanistan Reconstruction has identified lessons learned from USAID's
programs in Afghanistan based on the numerous audits and inspections
that the Inspector General has conducted since 2008.
According to the Inspector General, USAID programs must take into
account the recipient country's ability to afford the costs of
operating and sustaining completed projects. SIGAR's recommendation
comes 2 years after USAID's budget justification for Afghanistan said
this: ``The United States has structured its partnership with
Afghanistan to be sustainable, durable, and realistic in terms of
funding levels.''
Over the past dozen years, USAID has obligated more than $18
billion for Afghanistan. Do you think those amounts were realistic and
sustainable?
Answer. In 2001, Afghanistan was a country wracked by decades of
conflict and a safe haven for terrorists from which emanated the
attacks of 9/11 on the United States. The United States' core policy
objective in Afghanistan is to ensure that the country is never again a
safe haven for terrorists who threaten the United States or our allies.
Over the past 13 years, civilian assistance has supported our national
security objective by investing in improvements in governance, the
provision of basic services, private sector-led economic growth, and
the strengthening of civil society, starting from a very low level in
2001. In addition, through multi-sectoral, mutually reinforcing
investments, the U.S. has made a concerted effort to prioritize the
advancement of the political, social, and economic rights of Afghan
women and girls.
Since 2001, Afghanistan has made remarkable development gains
across multiple sectors, as a result of the investment and programming
provided by the United States and other donors, along with our
international partners, the Afghan Government and the Afghan people. In
recent years, USAID has made a concerted effort to ensure the
sustainability of these investments.
Weaning Afghans from extraordinary levels of assistance is
necessary for us, and essential for them. To achieve this goal without
triggering a crisis that could ensue should U.S. and related donor
investment precipitously decline, the U.S. seeks to continue to provide
assistance in areas critical to Afghan development and stability, and
to request the resources needed to establish a funding glide path to a
more sustainable level of annual funding. Following on the issuance of
the June 2011 Administrator's Sustainability Guidance for USAID in
Afghanistan, utilized in the Fiscal Year 2012 Appropriations Act, USAID
has regularly reviewed and adjusted its programs in an ongoing effort
to ensure that they are achievable and sustainable.
The effort to promote sustainability has several facets. USAID
performs regular portfolio reviews of USAID programs, both internally
and coordinated with the Afghan Government. Through portfolio reviews,
USAID has oriented its programming to support the development of
Regional Economic Zones that cover major population centers and
promoted regional trade and economic opportunities--especially with
regional markets in Central and South Asia. In addition, through
technical assistance and direct government-to-government assistance
that is subject to stringent safeguards, USAID is building the capacity
of the Afghan Government to implement programs, provide services, and
preserve key development gains, as well as raise the revenue necessary
to financially support services.
Throughout our efforts, we are applying important lessons from the
past 12 years in Afghanistan, as well as from other high-risk
environments in which USAID has worked. As USAID navigates through the
2014 transition period and looks to 2015 and beyond, we are committed
to expending every effort to safeguard taxpayer funds and ensure that
the remarkable development progress in Afghanistan is maintained and
made durable, in order to secure our overall national security
objectives.
Question. For fiscal year 2015 you are requesting hundreds of
millions of dollars in additional aid for Afghanistan. Since sustaining
our investment there seems to depend on continuing to spend large
amounts of U.S. funds, how is that sustainable?
Answer. Weaning Afghanistan from unsustainable levels of assistance
is necessary for us, and essential for them. To achieve this goal
without triggering a crisis, we believe it is essential to continue to
provide assistance in areas critical to Afghan development and
stability. We are making tough decisions and prioritizing investments
that have the greatest potential for long-term sustainability.
USAID has placed an overriding emphasis on promoting sustainability
across all of the Agency's programs in Afghanistan, outlined in the
Administrator's 2011 Sustainability Guidance which emphasizes the
principles of (1) increasing Afghan ownership and capacity; (2)
contributing to stability and confidence; and (3) effective and cost-
efficient programming.
In Afghanistan over the past 3 years, USAID has shifted the focus
of its programs from stabilization and infrastructure to creating the
basis for sustainable, long-term development. USAID's strategy in
Afghanistan is threefold:
--Maintaining and making durable the gains made in health, education,
and for women;
--Supporting continued economic growth and employment through a focus
on the agriculture sector and private sector development,
operations and maintenance of infrastructure investments, and
responsibly developing the extractives industry, all key to
ensuring future fiscal sustainability; and
--Fostering legitimate and effective Afghan governance, the rule of
law, and a robust civil society.
a. USAID is also promoting sustainability by conditioning a
significant percentage of its assistance to the government on
progress toward economic and governance reforms. This process
was formalized by the international donor community and agreed
to by the Afghan Government in the 2012 Tokyo Mutual
Accountability Framework, which outlined reform indicators in
areas such as elections; governance, rule of law, and human
rights; public finance and commercial banking; government
revenues, budget execution and sub-national governance; and
inclusive and sustained growth and development.
b. USAID will use fiscal year 2015 funds to continue support
for economic growth and employment through the agriculture
sector and private sector development; work with the Afghan
Government on commercialization and cost recovery so it will be
able to fund operations and maintenance of infrastructure
investments; and assist them in responsibly developing the
extractives industry for the benefit of all Afghan citizens.
These efforts will help foster economic growth, connect
Afghanistan to its neighbors, improve the functioning of
government, and reduce dependence on international assistance,
while helping the Afghan Government increase revenue generation
to mitigate the impact of the troop drawdown.
Question. SIGAR has brought to my attention a study USAID
contracted for in 1988 which reviews 30 years of U.S. assistance
programs in Afghanistan from 1950 to 1979. The study makes one wonder
how many times we have to repeat the same mistakes. Here are some of
the findings:
--USAID's assistance programs in Afghanistan after 1955 were overly
ambitious in scale and timing, and were larger than could be
effectively administered by the U.S. or Afghan Governments. The
U.S. expectations of the time required to achieve effective
project results were generally unrealistic;
--The U.S. placed too much confidence in the applicability of
technical solutions and U.S. values to complex social and
economic development issues in Afghanistan;
--Infrastructure projects were too often done before planning for
institutional adaptation in the use of the facilities and the
training of personnel;
--U.S. government-to-government assistance programs were at a
disadvantage because the Afghan Government was overly
centralized, largely ineffective, and out of touch with the
local communities; and
--The use of assistance for short-term political objectives tends to
distort sound economic rationale for development and weaken the
longer-term political interests of the U.S.
Does any of that sound familiar? Were you aware of this 1988 study
and did it inform any of the approaches to USAID programs in
Afghanistan? How can these and future lessons learned be incorporated
into the culture and management of USAID so that they are not
forgotten?
Answer. USAID is aware of this study and, along with the project
files of the earlier USAID programs in Afghanistan, utilized this
information and lessons learned in the development of the USAID
reconstruction program in 2001 and continues to incorporate these
lessons in the implementation of the Agency's strategy in Afghanistan.
USAID's development assistance, which represents approximately 3
percent of the total military and civilian financial cost of the war,
has helped Afghans achieve extraordinary gains for a country that in
2002 had virtually no access to reliable electricity, roads or modern
telecommunications, and disadvantaged almost half of its population--
women and girls--by prohibiting them from contributing fully to Afghan
society and the economy. Specific examples include:
--Health: Life expectancy has increased from 42 years to over 62
years since 2002; the maternal mortality rate has declined by
80 percent from 1,600 to 327 deaths per 100,000 births; and
child mortality decreased by 44 percent from 172 to 97 deaths
per 1,000 live births.
--Education: In 2002, there were approximately 900,000 Afghan
children in school, and virtually none were girls. Today,
approximately 8 million children are registered to attend
school and more than one-third of them are girls.
--Mobile Technology: In 2002, there were few fixed telephone lines
and making calls outside of Afghanistan required a satellite
phone. Today, the combined phone network covers 90 percent of
the Afghan population. Eighty-five percent of women have access
to a mobile phone. The telecommunications sector is
Afghanistan's greatest source of foreign direct investment,
largest remitter of taxes to the government, and biggest licit
employer, providing jobs for over 100,000 Afghans.
USAID's current program is putting assistance on a more sustainable
footing, focusing on operations and maintenance of infrastructure, and
increasing Afghan capacity, including through direct government-to-
government assistance.
USAID's Development Strategy for Afghanistan
In Afghanistan over the past 3 years, USAID has focused our
programs on creating the basis for sustainable, long-term development.
We have seen the dire consequences of neglect and disengagement play
out in this region before, and the Obama administration is committed to
not letting history repeat itself.
USAID's strategy in Afghanistan is threefold:
--Maintaining and making durable the gains made in health, education,
and for women;
--Supporting continued economic growth and employment through a focus
on the agriculture sector and private sector development,
operations and maintenance of infrastructure investments, and
responsibly developing the extractives industry, all key to
ensuring future fiscal sustainability; and
--Fostering legitimate and effective Afghan governance, the rule of
law, and a robust civil society.
Sustainability
In June 2011 USAID implemented Sustainability Guidance for
Afghanistan which includes the principles of increasing Afghan
ownership and capacity, contributing to stability and confidence in the
Afghan Government, and designing effective and cost-efficient
programming. In line with this guidance, USAID also conducts annual
portfolio reviews internally within the U.S. Government and then with
the Afghan Government, to ensure USAID programming is fully aligned
with U.S. Government-wide priorities and with Afghan priorities.
Infrastructure
USAID has made a concerted effort since 2011 to reduce new
infrastructure investments, while increasing efforts to build Afghan
Government capacity to maintain the recent investments in critical road
and energy infrastructure. This effort includes the planned Road Sector
Sustainability project, designed to strengthen the capacity of the
Afghan Government to perform operations and maintenance (O&M). This
support will include short-term O&M emergency operations, medium-term
capacity-building activities, and a longer-term effort to establish a
road authority and road fund that will equip the Afghan Government with
the necessary tools to manage its transportation infrastructure in a
sustainable way.
Government-to-Government Assistance
USAID has worked to responsibly increase on-budget assistance
through Afghan Government mechanisms as an integral component of the
Agency's strategy to build the government's capacity and enhance
accountability. For example, in 2003, USAID, in partnership with the
Ministry of Public Health (MoPH) and other donors, created an Afghan-
led Grants and Contract Management Unit (GCMU) in the MoPH to procure,
manage, and oversee donor-funded health contracts. Since 2009, the GCMU
has worked to ensure proper procedures are followed for procurement of
services, contract and financial management, monitoring and evaluation,
and coordination with other donors and ministry stakeholders, including
USAID's Partnership Contracts for Health Services Program. This
includes issuing solicitations and contracts on behalf of the MoPH.
Utilizing Local Solutions
USAID believes that utilizing local solutions is integral to the
sustainability of development efforts in Afghanistan, particularly in
our efforts to build the capacity of the Afghan Government to be able
to deliver goods and services to the Afghan people. USAID has
incorporated local solutions across our portfolio, including through
the World Bank-managed Afghanistan Reconstruction Trust Fund, direct
assistance mechanisms, and by awarding grants and contracts directly to
local organizations. During fiscal year 2014, approximately 45 percent
of USAID's obligations were to mechanisms comprising local solutions.
Question. How do we respond to constituents--as well as to
Afghans--who complain that we are supporting a government of thieves
who have enriched themselves and their relatives and friends thanks to
us?
Answer. Although there are inherent risks in conducting development
programs in a country like Afghanistan, USAID prioritizes the effective
and accountable use of taxpayer dollars and does not assume any level
of acceptable fraud, waste, or abuse. The Agency approaches oversight
as a stringent process that involves continual re-examination of
ongoing efforts and flexibility to adjust to new oversight needs as
they arise. Tolerance of waste, fraud or abuse not only would run
counter to our responsibility as stewards of U.S. taxpayer resources,
but would undermine our development goals in Afghanistan. Accordingly,
USAID views robust oversight as an essential component of our
development programming in Afghanistan. In designing oversight
measures, USAID has learned important lessons over its 12 year
engagement, and has drawn on experiences in other challenging
environments, including Iraq, Pakistan, Yemen, Sudan and Colombia, to
ensure strong oversight of U.S. assistance funds.
In addition to standard USAID oversight measures implemented
worldwide, USAID has implemented the Accountable Assistance for
Afghanistan (A3) initiative, designed to prevent funds from being
diverted from the development purpose to malign actors. Some of the
approaches USAID employs in Afghanistan under A3 include:
1. Award Mechanisms.--We rely less on large agreements and have
increased the number of smaller and more flexible agreements. We are
also utilizing assistance awards that provide the most visibility on
project costs, such as cost-reimbursable contracts and limiting layers
of subcontracts to two.
2. Partner Vetting.--The USAID Mission established a Vetting
Support Unit in February 2011. The unit conducts checks on non-U.S.
companies and non-U.S. key individuals for prime contractors, sub-
contractors, grant recipients and sub-grantees to minimize the risk
that the Mission's programs might support, even inadvertently, malign
entities or individuals. As of April 2014, we have kept over $49
million from being awarded to those who did not meet our vetting
requirements.
3. Financial Controls.--We are enhancing controls on project funds,
such as using electronic funds transfers in lieu of cash payments,
utilizing independent financial monitors to verify appropriate usage of
funds, ensuring close review of recipients' claims prior to payment,
and performing audits of locally incurred costs.
4. Project Oversight.--USAID uses a multi-tiered monitoring
approach that includes, as appropriate, independent monitoring
contractors; observation by U.S. Government staff; reporting by
implementing partners, local non-governmental organizations and civil
society; and use of technological tools, such as time- and date-stamped
photos. By using multiple sources of monitoring data, USAID can compare
information received from separate sources to ensure the greatest
degree of oversight possible.
Approximately $283 million out of $14.4 billion dollars (or
approximately 2 percent) disbursed by USAID has constituted direct
government-to-government assistance to the Afghan Government, and there
are stringent safeguards on this funding. USAID implements risk
mitigation measures in order to ensure proper oversight of direct
assistance funds, which may include:
--Establishing a non-commingled, separate bank account for each
project;
--Regular review and reconciliation of the bank accounts;
--Disbursement of funds only after the ministry has achieved a
performance milestone or USAID has verified incurred costs;
--Regular audits by a USAID OIG-approved firm;
--Substantial involvement and oversight by USAID staff in procurement
processes; and
--Technical assistance to increase the capacity of ministries while
addressing priority vulnerabilities or weaknesses identified in
the assessments.
USAID requires that all direct assistance with the Afghan
Government be in compliance with USAID accountability and oversight
procedures, including site visits to ministries by USAID staff or
independent contractors, as well as regular reporting. If Afghan
ministries fail to adhere to these measures, the agreements are subject
to immediate suspension or termination.
For instance in 2012, USAID suspended the $24.5 million District
Delivery Program (DDP), an on-budget program implemented by the
Independent Directorate for Local Governance (IDLG) due to non-
compliance with requirements for receiving USAID direct assistance. At
the time of suspension, USAID had obligated $4.9 million for the
program and disbursed $2.3 million. Following a USAID-conducted
financial audit of the program, USAID submitted a bill to the
Government of Afghanistan for $703,884 to recover funds lacking
supporting documentation.
USAID also actively engages in training Afghan entities to ensure
they have the capacity to properly manage and account for all funds.
Our efforts to strengthen these institutions include capacity building
for legal and judicial institutions in order to improve application of
rule of law and access to justice; capacity building in other Afghan
Government institutions, particularly those involved in revenue
collection, financial supervision, and accountability and
transparency--thereby reducing the space for corrupt practices; and
direct engagement with Afghan civil society organizations in their
efforts to address corruption in the provision of public goods and
services and hold government accountable to its people.
In addition, audits provide useful oversight and discipline, and
complement and reinforce USAID's own efforts to ensure U.S. taxpayer
dollars are used effectively and efficiently. There are currently over
100 on-going audits of USAID programs in Afghanistan. In fiscal year
2013, the USAID Office of Inspector General, the Special Inspector
General for Afghanistan Reconstruction, and the U.S. Government
Accountability Office completed over 65 financial and program audits in
Afghanistan.
Question. One thing everyone seems to agree about is the need to do
whatever we can to protect the important progress that has been made
for Afghan women, however limited it may have been for many who
continue to face discrimination and abuse. Do you agree that this
should be a top priority, and what are your plans?
Answer. Afghanistan will not be able to achieve sustainable peace,
reconciliation, stability, and economic growth if Afghan women are not
empowered. Though many challenges remain for Afghan women, Afghan women
and girls have achieved dramatic progress over the last 12 years
through the engagement and support of the United States, our
international partners, and courageous Afghan women and men. With
substantial assistance from USAID, more than a third of all school
children in Afghanistan are now girls compared to virtually none in
2002. More than 120,000 young women have finished secondary school and
40,000 are working on university degrees. Over the last decade,
Afghanistan has seen one of the most rapid declines in maternal
mortality anywhere in the world and an increase in overall life
expectancy of 15-20 years. Women have entered the business and
political arenas with women comprising more than 25 percent of the
Afghan Parliament.
Sustaining and maintaining these gains is a key objective of
USAID's work in Afghanistan now and in the future. USAID's programming
includes two women-specific programs as well as integration of gender
into all sectors of programming. USAID's Gender Equality and Women's
Empowerment Policy requires consideration of gender equity and female
empowerment in all USAID project design and implementation across all
sectors. Over 40 gender analyses have been done in Afghanistan, the
findings of which help to ensure that opportunities arising from USAID
investments are equitable. Our work in each sector supports women's
progress.
Similarly important for the preservation of gains for women and
girls is the overall level of funding sought in the President's budget
request for civilian assistance to Afghanistan. That funding request is
intended to provide resources for programs in Afghanistan that support
the provision of security, justice, and basic services to women and
men.
USAID has two projects that are designed specifically to advance
women in Afghanistan. The Promoting Gender Equity in National Priority
Programs (``Promote'') project that is expected for award later this
year will be USAID's largest gender program in the world. The 5-year
program is designed to support a cadre of educated women ages 18 to 30
to enter and advance into decisionmaking and leadership positions in
Afghanistan's public, private and civil society sectors. The program
has four components: (1) Women's Economic Empowerment, (2) Women's
Rights Groups and Coalitions, (3) Women in Government, and (4) Women's
Leadership Development. The project will increase women's contributions
to Afghanistan's development by strengthening women's rights groups,
boosting female participation in the economy, increasing the number of
women in decisionmaking positions within the Afghan Government, and
helping women gain business and management skills. The project will
help 75,000 women between 18 and 30 years of age who have at least a
secondary education. USAID plans to allocate up to $216 million with
the potential for other donors to contribute $200 million in additional
funding.
In addition, the ongoing Ministry of Ministry of Women's Affairs
Organizational Restructuring and Empowerment (MORE) project is designed
to strengthen the Afghan Government's capacity to develop and implement
its National Action Plan for Afghan Women. This project works directly
with the Ministry of Women's Affairs to implement national and
provincial level ministerial restructuring and to improve public
relations, awareness raising campaigns and women's rights.
In addition, USAID will continue to focus on increasing and
improving primary healthcare, safe childbirth, healthier adolescent
girls and women, and training and job opportunities in health for
women. Strengthening women's economic opportunities is planned to be
pursued through reinforcing women's land rights and providing a full
range of business development services to existing and women-owned
enterprises. In agriculture, USAID will target opportunities from
micro/household- to macro/financial institution-strengthening,
expanding women's income-generating potential, improving access to
markets, and addressing constraints that disproportionately affect
women.
USAID is also supporting quality education through teacher training
and placing emphasis on access to formal and community-based education
for boys and girls. USAID's programs additionally focus on increased
literacy and inclusive educational opportunities in basic and higher
education, and technical and vocational educational training.
Democracy, rights and governance projects will continue to support
women's participation in democratic governance and political processes
through investment in women's civic leadership; support to women
journalists and media professionals; judicial training and outreach
programs; access to justice and legal rights awareness; and activities
to ensure informed participation of Afghan women as voters, candidates,
elections administrators and observers.
Question. Partner Vetting. There is a lot of concern among U.S.
non-governmental organizations (NGOs) about USAID's vetting of local
partners. While steps need to be taken to prevent U.S. funds from
ending up in the hands of a terrorist or terrorist organization, you
also need to protect sensitive relationships with the local
organizations we depend on to implement programs.
What is the status of this? Are you still in the pilot phase? What
happens next?
Answer. The USAID Partner Vetting System (PVS) pilot program is in
the implementation phase. USAID has completed PVS public rule making
for acquisitions, identified contract actions in the pilot missions,
and added notice of potential vetting of awards to pilot mission
contract solicitations. USAID is completing public rule making for
assistance awards under PVS. PVS pilot award applicants and their
organizations will be vetted in accordance with established vetting
protocols. USAID plans to analyze data collected from the pilot
program, as well as from existing vetting programs, including those for
West Bank/Gaza and Afghanistan, and produce a joint report to Congress
with the Department of State in accordance with the requirements of
Public Law 112-74, Section 7034(i).
USAID makes it a priority to consult with its partners about
vetting and recognizes the importance of regular dialogue and feedback
from partners about the impact of vetting on partner operations and
effectiveness. USAID seeks to make adjustments where possible while
maintaining the effectiveness of the vetting programs. For example, in
the PVS pilot program, USAID has agreed to test direct vetting in
certain pilot missions. Direct vetting is a concept proposed by
implementing partners that involves direct communication between USAID
and sub-awardees for purposes of vetting, rather than through prime
awardees. Likewise, in the Afghanistan vetting program, the Mission
Order on vetting has been updated to put in place certain modifications
to the vetting process to accommodate requests of implementing
partners, including the exemption of certain routine commercial
transactions from vetting. We will continue to stay in touch with
USAID's implementing partners and seek to accommodate requests, while
maintaining the effectiveness of vetting as a means of ensuring U.S.
taxpayer funds are used for their intended purpose.
Question. Many people have the same name and there have been many
examples of personal information in U.S. databases being stolen or
unintentionally released to the public. Do you tell individuals and
organizations how information about them will be used and stored by the
U.S. Government, including how a ``positive match'' would be handled
and how to appeal such a match?
Answer. USAID has engaged in several public notices and rule
makings that have provided the public with notice on the planned use of
Personally Identifiable Information (PII) for vetting. These public
notices and rule makings include:
Partner Vetting in USAID Assistance
--Proposed Rule--August 8, 2013
--Correction--November 21, 2013
Partner Vetting in USAID Acquisitions
--Final Rule--February 14, 2012
--Proposed Rule--June 6, 2009
Paperwork Reduction Act--Partner Information Form
--June 6, 2011
Privacy Act
--December 12, 2012
--February 2, 2009
Public Briefings
--August 8, 2011
--April 4, 2008
USAID has established procedures for the use of PII for vetting
under the PVS pilot program. PII on key individuals of organizations
applying for USAID funds, either as a prime awardee or as a sub-
awardee, is entered into a secure USAID database that is housed within
USAID servers. Access to this data is strictly controlled and provided
only to authorized U.S. Government staff with vetting responsibilities.
Authorized U.S. Government personnel who have been assigned roles in
the vetting process are provided role-specific training to ensure that
they are knowledgeable in how to protect personally identifiable
information. Access to this data is further restricted through role-
based limitations.
Using the data provided by the applicant, USAID analysts search for
any possible matches between the applicant organization or key
individuals associated with that organization and one or more names
contained in U.S. Government law enforcement and intelligence
databases. Where a possible match is found, USAID staff will thoroughly
analyze all available and relevant data to determine the likelihood of
the match, and make a recommendation regarding the eligibility of the
organization to receive USAID funding. In those instances where there
is a positive match, USAID will update the existing public or non-
public database records for those organizations or individuals with any
pertinent data provided by the organization or individual.
The above process is also followed in the Afghanistan vetting
program. Additionally, in an effort to improve the consistency of
Afghanistan vetting among U.S. agencies, USAID participates in an
Interagency Vendor Vetting Working Group facilitated by the U.S.
Embassy. At these working group meetings, USAID shares its ineligible
determinations and identifies significant assessments. USAID and the
Embassy also participate in a weekly Vendor Vetting Advisory Panel
convened by the Department of Defense regarding Afghanistan eligibility
recommendations.
In the event of an ineligible determination by USAID under the PVS
pilot program, the applicant will be notified of the decision and may
request reconsideration. Once USAID reviews any additional information
provided by the applicant in the PVS pilot program, USAID will make a
final determination and communicate such determination to the
applicant, as appropriate. In the case of vetting programs, USAID may
reconsider ineligible determinations and has done so in particular
cases when it had reason to conduct such reconsideration.
Question. Do you have the ability to waive the vetting requirement
in order to avoid delays in responding to humanitarian crises?
Answer. USAID may approve awards without pre-award vetting that
ordinarily would be required for a program, including the PVS pilot
program, if pre-award vetting would impede the delivery of emergency
aid to an immediate humanitarian crisis. In such cases, USAID may
conduct post-award vetting following the response to the crisis or once
emergency aid has moved to the reconstruction phase of the relief
effort. USAID's policy of allowing approval of awards without pre-award
vetting in order to avoid delays in responding to urgent humanitarian
crises is documented in the PVS pilot mission order.
Question. Are USAID's partner vetting procedures the same as those
used by the Department of State and other agencies implementing
programs with overseas partners? What about the Department of Defense,
which has gotten deeply involved in the foreign aid business in recent
years?
Answer. Both USAID and the Department of State (State) conduct
searches of public and non-public databases for vetting programs. There
are some differences in USAID and State vetting procedures and systems,
including for reasons related to their differing procurement models.
USAID's procurements are often executed at the Agency's overseas
missions, while State's procurement function is centralized in
Washington, DC. As a result, in the PVS pilot program, USAID has staff
at the pilot missions and in the Washington, DC area that work together
on the vetting process, whereas State vetting is conducted out of
Washington, DC. The same State and USAID approaches to the vetting
process are maintained for Afghanistan vetting. Regarding interagency
coordination, USAID coordinates the PVS pilot program with State. USAID
coordinates its Afghanistan vetting program with State and the
Department of Defense (DOD), as noted by the Special Inspector General
for Afghanistan Reconstruction (SIGAR) in SIGAR Audit 13-14. We
respectfully refer detailed questions regarding vetting procedures at
State and DOD to those agencies.
Question. Disaster Relief Budget Request. Your request for
International Disaster Assistance is $1.3 billion, which is $500
million below the fiscal year 2014 appropriations level of $1.8
billion. What is that cut based on? Do you have reason to believe that
the needs of victims of war and natural disasters will be significantly
less in 2015, or was this just an Office of Management and Budget (OMB)
decision unrelated to reality?
Follow Up. We cannot assume that we there will be less humanitarian
need in fiscal year 2015 than in 2014. Syria and the Central African
Republic are the best examples of that. It means that Congress will
have to make the hard choices. Are there any programs which you regard
as lower priority than disaster assistance that we should shift money
from?
Answer. The administration remains dedicated to providing robust
support for humanitarian programs worldwide. The President's fiscal
year 2015 request includes $1.3 billion for the International Disaster
Assistance (IDA) account. The United States Agency for International
Development plans to carry over fiscal year 2014 IDA funding into
fiscal year 2015 to support humanitarian assistance needs. The
President's request also includes $1.4 billion in Title II to respond
to development and emergency food assistance needs and $2.097 billion
for the Migration Refugee Assistance and the Emergency Refugee and
Migration Assistance accounts. The administration has additional
authorities, if needed, to draw upon to respond to humanitarian needs.
Taken together, we anticipate having the funds needed to support our
humanitarian assistance goals in Syria, Africa, and elsewhere. However,
this is contingent upon avoiding a further deterioration in any of the
current major emergencies, and no new large-scale emergencies before
the end of the fiscal year.
The President's fiscal year 2015 request reflects the
administration's ongoing commitment to humanitarian programs, while
taking into account the current constrained budget environment.
Question. Global Health Budget Request. You propose cuts in several
global health programs, from maternal and child health to neglected
diseases, tuberculosis, vulnerable children, and nutrition. The overall
cut in USAID's health programs below the fiscal year 2014 appropriated
level is $89 million. Was this OMB's decision, or do you think we are
spending too much on global health? Should we be spending less, the
same as 2014, or more?
Answer. The administration's fiscal year 2015 budget request for
USAID's global health programs reflects difficult choices made in a
constrained budget environment.
USAID has undertaken an ambitious review of every dollar the Agency
spends in order to identify inefficiencies and accelerate reductions in
child and maternal mortality in 24 countries, primarily in sub-Saharan
Africa and South Asia, which account for 70 percent of child and
maternal deaths and half of the unmet need for family planning. Our
goal of ending preventable child and maternal deaths will be achieved
through increasingly effective efforts to link diverse health
programs--in maternal and child health, malaria, family planning's
contribution to the healthy timing and spacing of pregnancy, nutrition,
HIV/AIDS, and sanitation and hygiene improvement--and through global
cooperation.
Our nutrition programs are effectively contributing to both the
goals of Feed the Future and of ending preventable child and maternal
deaths. On May 22, 2014, USAID released its new Multi-Sectoral
Nutrition Strategy which aims to reduce the number of chronically
malnourished or stunted children by at least 2 million over the next 5
years and hold global acute malnutrition below the agreed emergency
threshold of 15 percent in places with humanitarian crises, like South
Sudan and the Central African Republic.
USAID's approach will focus on the 1,000 days from pregnancy to a
child's second birthday--the most critical time for a child's
cognitive, intellectual, and physical development. Poor nutrition
during these first 1,000 days can have negative, life-long impacts on
children that prevent them from reaching their full potential. The
strategy's new approach will bolster support for ongoing child and
maternal health commitments, which aim to reach 500 million pregnant
women and children under 2 years of age with improved nutrition, avert
20 million additional cases of stunting, and prevent 1.7 million deaths
due to poor nutrition and health--goals laid out in the Global
Nutrition for Growth Compact.
Further, USAID is a global leader in large-scale implementation of
integrated treatment programs for neglected tropical diseases (NTDs),
focusing on the scale-up of mass drug administration to target the
control or elimination of lymphatic filariasis, blinding trachoma,
onchocerciasis, schistosomiasis, and intestinal worms. The program
currently supports 25 countries and regional programs in Africa and the
Americas to reach treatment targets and monitor and evaluate the
programs to document achievement of control and elimination goals. As a
result of the support provided by USAID, 59 million people now live in
areas where they are no longer at risk of acquiring lymphatic
filariasis and treatment can be stopped, and 35 million people live in
areas where active trachoma is no longer a public health problem. Over
the past 7 years, the U.S. Government has leveraged $6.7 billion in
donated medicines, resulting in the delivery of more than 1 billion
treatments to approximately 467.9 million people.
In part because of the USG's efforts, the rate of new TB cases has
been declining for the past decade and the world is on track to meet
the Millennium Development Goals of reversing TB incidence, along with
a 50 percent reduction in the mortality rate by 2015, compared to 1990.
Since 1990, TB treatment has saved the lives of more than 22 million
people.
There are 22 high-burden countries, which account for 80 percent of
the world's TB cases. Five of these countries, which account for almost
50 percent of the TB cases--Brazil, Russia, India, China and South
Africa--have the ability and capacity to increase domestic funding to
address TB. All of these five countries are now providing development
assistance to other countries. For example, Russia has increased
funding for its National TB Control Program from less than $500 million
annually in 2007 to more than $1 billion annually beginning in 2010,
and Brazil has increased annual funding to its National TB Control
Program and will provide an additional $7.3 million in 2014.
The Global Health Programs-USAID request for TB does not represent
the totality of the U.S. Government response to this disease. USAID
collaborates with other agencies and the Global Fund to integrate and
expand TB health services and strengthen delivery platforms, and with
the President's Emergency Plan for AIDS Relief (PEPFAR) on TB/HIV co-
infection interventions. It is important to note that three-quarters of
annual international donor funding for TB is provided by the Global
Fund, and the U.S. Government remains the largest donor to the Fund.
Through the Displaced Children and Orphans Fund, USAID supports
programs in 14 countries to prevent family separation, promote family-
based alternatives to institutional care for children and strengthen
the capacity of families, communities and governments to care for
children. As a result of our assistance, more than 14,000 child
protective service providers were trained in fiscal year 2013 to
provide comprehensive, sensitive care. In turn, these providers have
directly reached more than 92,000 children and their family members,
improving protection and wellbeing for vulnerable children.
Follow Up. For many years, United States law, known as the Hyde
Amendment, has permitted Federal funding of abortions in cases of rape,
incest or to protect the health of the mother. That was most recently
reaffirmed in the fiscal year 2013 Defense Authorization Act. Does
USAID provide funding for this purpose, particularly in places like
Eastern Congo where rape is widely used as a weapon of war against
women and girls? If not, why not?
Answer. USAID is committed to saving women's lives and advancing
their health by investing in voluntary family planning and reproductive
health programs, including in conflict settings and humanitarian
emergencies. These programs have improved the health of women worldwide
by helping to prevent unintended pregnancies, reducing the number of
abortions and lowering the number of maternal deaths related to
complications of pregnancy and childbirth.
USAID's Gender Equality and Female Empowerment Policy stipulates
that USAID will strive to reduce gender-based violence and mitigate its
harmful effects on individuals and communities. USAID provides a range
of health services for victims of sexual violence, including
reproductive healthcare, emergency contraception, psycho-social
counseling, family mediation, socio-economic assistance, and referral
for legal services. USAID does not provide funding for the performance
of abortion.
Question. USAID Operating Costs. The USAID fiscal year 2015 request
for operating costs are almost double what they were in fiscal year
2007. This trend is not sustainable. What is USAID doing to reduce its
operating costs and bring them into line with the current budget
environment? What impact has this increase in operating costs over the
past 8 years had on improving the delivery and effectiveness of U.S.
foreign aid?
Answer. Our mission to end extreme poverty and promote resilient,
democratic societies while advancing the Nation's security and
prosperity could not be achieved without the operational resources to
support the delivery of our foreign assistance. The increase in
operating costs since fiscal year 2007 was necessary for USAID to
achieve its mission by rebuilding civilian capacity, improving
development results and sustainability, regaining global development
leadership, and supporting critical operations in Afghanistan and
Pakistan vital to national security interests.
Beginning in fiscal year 2008, recognizing that development is key
to national security, Congress appropriated funding to launch the
Development Leadership Initiative (DLI) to rebuild the Agency's human
capital capacity to meet the stewardship and technical demands of
implementing the National Security Strategy. With continued bipartisan
support, the Agency received funding for an additional 820 permanent
Foreign Service Officers (FSOs) under DLI, allowing USAID to align
human capital resources strategically with foreign assistance goals and
increased program funding.
The main drivers of increases from fiscal year 2007 to fiscal year
2015 include the following:
--The U.S. Direct Hire (USDH) workforce grew by 81 percent,
reflecting the hiring of 820 new FSOs under DLI and Civil
Service staff to support USAID Forward reforms, the
Presidential Initiatives, and the expanded overseas workforce.
--The cost for Afghanistan and Pakistan operations increased
significantly to support a ramp-up in USAID's presence in these
Frontline States.
--Mandatory International Cooperative Administrative Support Services
(ICASS) costs, excluding Afghanistan and Pakistan, from the
Department of State increased by 351 percent due to challenging
security environments overseas.
As a careful steward of taxpayer dollars, especially in this
fiscally constrained environment, USAID strives to be more efficient
and effective in its worldwide operations. The Agency continues to
implement ambitious operational reforms to improve management processes
and achieve efficiencies through real property disposals, in-sourcing,
travel, conferences, information technology, and space optimization
that generate cost savings and avoidance. USAID has achieved cost
savings and avoidance of $57.6 million in fiscal year 2011, $92.6
million in fiscal year 2012, $17.8 million in fiscal year 2013 and
$12.6 million thus far in fiscal year 2014. Further, USAID has
restructured its overseas presence to realign resources with policy
priorities, strengthening its ability to meet its foreign policy and
national security mission.
Over the past 8 years, the increased budget for operating costs has
allowed USAID to improve the delivery and effectiveness of U.S. foreign
assistance through its new model of development. With the expanded
workforce, USAID has been able to reform policy, harness innovation,
and leverage private capital, thus maximizing development impact.
The results the Agency has achieved in recent years to end extreme
poverty and promote democratic, resilient societies would not have been
possible without the human and financial resources made available to
recruit, hire, train, deploy, and equip USAID's talented staff. The
chart below illustrates the Agency's recent foreign assistance
achievements.
----------------------------------------------------------------------------------------------------------------
Funding Level
Corporate Priorities 2006-2009 v. Result Cost-Effectiveness and
2010-2013 Leverage
----------------------------------------------------------------------------------------------------------------
Feed the Future........................ +206% Helped 6.7M farmers grow Cost-benefit analyses show
more food and improved an average rate of return
nutrition for 12.7M of 32% for Feed the
children in 2013. Future investments.
Child Survival......................... +42% Helped achieve 8% Helping Babies Breathe
reduction in under-5 Alliance leveraged $3 for
mortality in our 24 every $1 we invested,
priority countries in 2 raising an additional
years alone, saving $23M for this lifesaving
560,000 lives. partnership.
AIDS-Free Generation................... +29% With PEPFAR, we provided The Global Fund raised $2
antiretroviral treatment for every $1 pledged by
to 6.7M people with HIV/ the U.S. Government,
AIDS in 2013--a four-fold leveraging billions for
increase since 2008. HIV/AIDS.
Power Africa........................... +420% 2,500MW of power projects For every $1 the U.S.
have financially closed; Government has committed,
another 5,500MW are in the private sector has
the planning stages-- committed $2--over $14
together enough to light billion so far.
over 10M homes.
Resilience............................. +$451M Reduced disaster risk for Each $1 of investment in
27M people and resilience yields $2.9 in
strengthened resilience development gains,
for 3.4M in targeted avoided livestock losses,
zones in the Horn of and unneeded aid.
Africa in 2013.
Education.............................. +28% Expanded education All Children Reading: A
opportunities for 19M Grand Challenge for
students in 2013. Development matched $1
for every $1 we invested.
Water.................................. +38% Provided 38M people with Securing Water for Food: A
access to water and 17.7M Grand Challenge for
with access to improved Development leveraged
sanitation since 2006. roughly $2 for every $1
we invested.
----------------------------------------------------------------------------------------------------------------
Question. Development Assistance Budget Request. Your request of
$2.6 billion for Development Assistance is $113 million above the
fiscal year 2014 appropriated level. Where do you plan to use the bulk
of these additional funds?
Answer. The fiscal year 2015 DA request of $2.6 billion is designed
to achieve the goals outlined in Presidential Policy Directive-6 (PPD-
6) by supporting programs focused on sustainable development, economic
growth, democratic governance, development innovations, sustainable
systems for meeting basic human needs, and building resilience.
The bulk of the additional resources of $113 million will support
the Presidential Initiatives for Global Climate Change and Feed the
Future and further development goals in the areas of education, water,
governing justly and democratically as well as empowering women.
Question. Follow Up. Do you expect higher or lower amounts in the
countries of Central America, where poverty and violence are driving
people to leave their homes and come to the United States?
Answer. The fiscal year 2015 request prioritizes the countries of
Central America with a $26.0 million increase in funding for the region
as compared to the fiscal year 2014 Estimate.
[$ in thousands for all items]
----------------------------------------------------------------------------------------------------------------
Fiscal Year 2014 Fiscal Year 2015 Increase/
Estimate Request Decrease
----------------------------------------------------------------------------------------------------------------
El Salvador............................................... 19,281 25,000 5,719
Development Assistance................................ 19,281 25,000 5,719
Guatemala................................................. 57,789 70,387 12,598
Development Assistance................................ 42,789 57,387 14,598
Global Health Programs--USAID......................... 15,000 13,000 -2,000
Honduras.................................................. 36,700 44,326 7,626
Development Assistance................................ 36,700 44,326 7,626
Nicaragua................................................. 7,400 8,000 -400
Development Assistance................................ 7,400 8,000 600
USAID Central America Regional............................ 19,891 19,391 -1,500
Development Assistance................................ 11,500 11,000 -1,500
Global Health Programs--USAID......................... 8,391 8,391 --
-----------------------------------------------------
TOTAL............................................... 141,061 167,104 26,043
----------------------------------------------------------------------------------------------------------------
In addition, through the Central America Regional Security
Initiative, the fiscal year 2015 request includes $60.0 million of ESF
for Central America, the majority of which will be managed by USAID.
Question. Indigenous People. As you know, USAID now has an Advisor
on Indigenous Peoples Issues, a position I established some years ago.
This is important because many of the countries where USAID has
programs have indigenous populations whose survival is threatened,
particularly from extractive industries and the encroachment of
agriculture and unchecked development. What steps is USAID taking to
incorporate indigenous people as partners in the sustainable
development process, to ensure that their rights and traditions are
protected and their needs addressed?
Answer. USAID recognizes the important role that indigenous peoples
play in sustainable development, biodiversity conservation, and
adapting to--and mitigating the effects of--global climate change. For
several years we have worked to incorporate the issues and concerns of
indigenous peoples into our work in many countries, including Colombia,
Peru, Brazil, Ecuador, Guatemala, and Honduras. Now, with the
appointment of our new Advisor on Indigenous Peoples Issues, USAID is
taking steps to ensure that all of USAID's projects, programs and
policies are designed and implemented to include indigenous peoples as
partners in the entire development process, including:
A. Integrating Indigenous Peoples' Issues into USAID Programs, Policies
and Projects:
--Evaluating the impact of USAID's projects and programs on
indigenous communities
--Developing a USAID policy on Indigenous Peoples
--Integrating Indigenous Peoples' Issues into other USAID Policies
(Internally Displaced People Policy, Biodiversity Policy, etc.)
--Integrating Indigenous Peoples' Issues into USAID Country
Development Cooperation Strategies
B. Enhancing USAID Staff Capacity to Integrate Indigenous Peoples into
Programs and Projects:
--Developing a USAID Training Program on Indigenous Peoples' issues
--Developing a series of issue papers on Indigenous Peoples
--Incorporating Indigenous Peoples into USAID's Democracy Human
Rights and Governance (DRG) Strategic Assessment Framework to
ensure that the situation of indigenous peoples is assessed
when a country's primary DRG challenges are identified, to
support USAID missions in developing strategies for addressing
them, and to guide resources to areas where investments will
have the greatest impact.
C. Improving Coordination:
--Strengthening Intra-Agency Coordination
--Enhancing Inter-Agency Coordination (Department of State, Treasury,
USUN, Bureau of Indian Affairs, White House)
--Engaging International Financial Institutions on policy and project
issues (World Bank, Inter-American Development Bank, African
Development Bank, Asian Development Bank, European Bank for
Reconstruction and Development)
D. Engaging Indigenous Peoples:
--Coordinated consultations with indigenous leaders at the 13th
session of the U.N. Permanent Forum on Indigenous Issues in May
2014.
--Planning for the World Conference on Indigenous Peoples, a high-
level plenary meeting of the United Nations General Assembly
that will take place September 22-23, 2014 at the UN
headquarters in New York.
--Providing funding for indigenous peoples' issues through USAID's
Human Rights Grant Program. In the first round of grants since
the Advisor has been at USAID, a grant for $750,000 was awarded
to support the economic inclusion of Guarani farmers in
Paraguay. The next call for proposals will go out in the next 2
weeks and, because of outreach undertaken by the Advisor, we
expect a minimum of three proposals for indigenous peoples'
projects.
--Organizing meetings between USAID staff and indigenous leaders from
Indonesia, Kenya, Bangladesh, Democratic Republic of Congo and
Peru
--Serving on the planning committee of the World Summit of Indigenous
Funders that will be held in September 2014.
Question. Columbia. The Colombian Government is trying to negotiate
a peace agreement with the FARC, which if successful will end decades
of civil war. That may be the easy part. If there is an agreement,
securing and sustaining the peace will be extremely difficult.
What plans is USAID making, if any, and how is it reflected in your
fiscal year 2015 request for Colombia--which is decreasing--to help
Colombia? Is this something you are anticipating for fiscal year 2016,
rather than this year?
Answer. USAID has been planning for nearly 2 years to ensure that
its programs are flexible and relevant to adapt to the needs in
Colombia in the coming years. Specifically regarding the peace process,
USAID has been in close contact with the government about the status of
the negotiations and we have encouraged them to inform us of any areas
of anticipated support.
USAID programs in Colombia will continue to work with the
government, civil society, and the private sector to support conflict
victims, reduce impunity, develop rule of law, bring government
services to rural areas previously controlled by the FARC, and improve
land tenure and livelihoods in rural areas. By supporting the efforts
of the Colombian people to secure justice and good governance, we help
lay the ground work for the accountability, stability, and
reconciliation necessary for any peace deal to be successful.
Question. USAID Overseas Presence. USAID proposed in the fiscal
year 2014 budget request to restructure its overseas presence by
closing or downsizing 10 USAID missions and establishing new or
upgrading existing USAID offices in 10 countries. The fiscal year 2015
budget doesn't propose any additional restructuring overseas. Given the
dynamic and changing situations in Ukraine, Russia, Africa, and the
Middle East, do you continue to think that no additional restructuring
is needed? Are you looking at other ways to maintain overseas presence
in a more flexible manner?
Answer. USAID monitors closely the political and security
situations in the countries where it has programs to determine whether
changes in presence are warranted. At the time the Agency prepared the
fiscal year 2015 budget, no changes in USAID presence were needed.
However, given the recent deteriorating security situations in the
Middle East and Africa and the conflict between Ukraine and Russia, the
Agency is considering additional restructuring changes that will
address security concerns while maintaining overseas presence in a
flexible manner. As required, the Agency will notify Congress of any
proposed presence changes.
Question. Ethiopia. What steps have been or will be taken by USAID
to ensure that no foreign aid is used to support activities that either
directly or indirectly result in forced evictions?
Answer. USAID will continue to conduct the appropriate planning,
consultation, analysis, due diligence, and monitoring to ensure that
foreign assistance does not support forced evictions, while continuing
our important partnerships to improve the livelihoods of people in
Ethiopia. Through consistent site visits to the areas in question, such
as South Omo, implementing partner reports, and data quality analysis,
USAID is diligent about ensuring that aid supports the intended project
purposes and does no harm. In addition, USAID and other donors continue
to insist that the Ethiopian Government conduct meaningful community
consultations, offer appropriate grievance procedures, and allow for
sufficient planning and the timely provision of services.
Question. In two reports released in 2013, Development Aid to
Ethiopia: Overlooking Violence, Marginalization, and Political
Repression and Ignoring Abuse in Ethiopia: DFID USAID in the Lower Omo
Valley, the Oakland Institute documented how officials from USAID heard
first-hand accounts of forced resettlements and human rights abuses
from villagers in Ethiopia and yet still came to the conclusion that
the allegations of forced resettlements were ``unsubstantiated.'' They
went on to say that no evidence exists to make the links between their
programs and practices of the Ethiopian Government. What methodology
did USAID use to reach this conclusion?
Answer. USAID has conducted over six monitoring visits to the
village sites in the lower Omo region since late 2011 with an
additional visit ongoing presently. Some of these visits were jointly
conducted with other donors. During each visit USAID has conducted
numerous discussions with affected groups to assess their experience.
Despite these discussions and the significant efforts expended by USAID
on each trip to investigate alleged abuses, USAID has never encountered
any evidence of the Ethiopian Government using violence to threaten or
remove populations during its visits.
______
Questions Submitted by Senator Roy Blunt
Question. As you know, tuberculosis is the leading curable
infectious killer in the world, claiming 1.3 million lives per year.
Worldwide, tuberculosis is the third leading cause of death among women
of reproductive age. I agree that continued advances in scientific
health, specifically with tuberculosis, are imperative. The United
States has been a leader on this issue and, as a result, has helped
save and improve the lives of millions. I know the Foreign Assistance
Act allows USAID to provide assistance to any U.S. or non-U.S.
individual or entity. I also know that we must weigh the expertise of
entities to ensure that the government is providing resources,
especially research and development resources, to those that are most
capable of achieving the outcomes. However, given the history of U.S.
entities in TB research, I am frustrated by the level of funding going
to entities outside the U.S. I am also frustrated that Requests for
Applications specifically confirm that non-U.S. based groups are
eligible, and to my knowledge, U.S. companies are not given any
weighted preference in the selection process.
Please share with me why we have significant USAID funding for TB
being awarded to non-U.S. entities when we have plenty of U.S. entities
more than capable of meeting the requirements?
Answer. USAID's top priority in managing its tuberculosis (TB)
program is to ensure that program operations achieve the maximum
results possible in an effective and efficient manner. The TB program
operates through a variety of mechanisms that are awarded based on
technical excellence and cost effectiveness through a full and open
application process. Our partners are composed of both U.S. and non-
U.S. based entities which carry out various elements of the diagnosis,
treatment, and prevention of TB. We are proud of the results that have
been achieved through USAID-assisted TB programs. Since 1990, deaths
from TB have been reduced 41 percent and the overall prevalence of TB
has been reduced 40 percent in USAID-supported countries. These
countries are on track to meet the Millennium Development Goal target
of a 50 percent reduction in mortality by 2015. Further, more than 1.31
million people with TB were successfully treated and more than 45,000
people with multi-drug resistant TB (MDR-TB) initiated treatment in
2012, the most recent year for which data is available. This is a 40
percent increase in 1 year of the number of people initiated on MDR-TB
treatment, comparing the same number of countries in 2011.
USAID's record demonstrates a strong commitment to partnering with
U.S. companies, with USAID TB mechanisms in both Washington and
worldwide awarded to numerous U.S.-based entities--including University
Research Co., LLC, PATH, FHI 360, Abt Associates, Chemonics, and MSH.
In addition, USAID partners with a number of U.S.-based organizations--
such as the TB Drug Alliance, Johnson & Johnson, and Cepheid, Inc.--to
strengthen our TB programs. These organizations provide unique
expertise that contributes to the Agency's impressive TB results. In
certain cases, non-U.S. based entities--including the World Health
Organization, the Stop TB Partnership, the International Union Against
Tuberculosis and Lung Disease, and KNCV Tuberculosis Foundation--
possess a unique expertise and existing logistical access to improve TB
care, treatment and prevention in a cost-effective manner. For example,
the Stop TB Partnership's Global Drug Facility allows for the pooling
of procurements, thereby creating the opportunity for countries to
purchase improved quality commodities for lower prices.
Question. What system of priorities does USAID give to U.S.
companies for TB funding in order to further build our domestic
capabilities?
Answer. USAID's tuberculosis (TB) program follows the policies and
procedures in USAID's Automated Directives System (ADS), specifically
ADS Chapter 300 which outlines policies for the procurement of goods
and services through Agency acquisition and assistance planning.
Further, USAID follows the Code of Federal Regulations procurement
standards. Through a competitive and transparent process, USAID makes
awards to partners with applications that are of the highest technical
merit, while providing the best value for money.
USAID partners with a number of U.S. companies to further build TB
capabilities in the international sector, including:
--TB Drug Alliance, a non-profit U.S.-based organization dedicated to
the discovery and development of new, faster-acting and
affordable TB medicines. USAID funding is supporting the TB
Alliance to develop new, urgently needed TB treatments for use
both in the United States and globally. With USAID support, the
TB Alliance currently has multiple new TB drug combinations in
clinical development.
--Johnson & Johnson, a U.S.-based company that includes
pharmaceutical products. USAID is supporting studies to
evaluate the efficacy of bedaquiline--a drug that can be used
as part of a combination therapy for pulmonary, multidrug-
resistant TB (MDR-TB) in adults. Bedaquiline is the first drug
in 40 years with a specific indication for MDR-TB. USAID will
be supporting the implementation of a clinical trial that will
evaluate efficacy, as well as the safety of bedaquiline. Data
from the study will help Johnson & Johnson meet U.S. Food and
Drug Administration requirements for full approval of the drug.
Further, USAID is supporting countries to introduce bedaquiline
as part of TB treatment for MDR-TB and extensively drug-
resistant TB (XDR-TB) patients--information that will directly
benefit U.S. MDR-TB and XDR-TB patients.
--Cepheid Inc., a California-based molecular diagnostic system
manufacturer and supplier responsible for bringing to market an
exciting new TB diagnostic, Xpert MTB/RIF--a test capable of
accurately diagnosing TB and MDR-TB in 2 hours. USAID--in
partnership with PEPFAR, UNITAID and the Bill & Melinda Gates
Foundation--entered into a financial agreement with Cepheid to
reduce the cost of one Xpert test from $16.87 to $9.98--a 40
percent reduction. USAID is also supporting the roll-out and
scale-up of Xpert in countries through a comprehensive
technical approach, and experience from this roll-out will
inform better testing practices in the United States for
persons suspected of having TB and MDR-TB.
Partnering with international organizations allows USAID to more
efficiently leverage the funds of other donors, including other
government donors and the Global Fund to Fight AIDS, Tuberculosis and
Malaria, to develop new tools and drugs and reduce the price of
commodities while increasing the quality. USAID also supports the Stop
TB Global Drug Facility (GDF) to pool TB drug procurements so
countries, including the United States, are able to access cheaper,
high-quality drugs. USAID, through engagement with the GDF and U.S.
Pharmocopeia, has contributed to the dramatic reduction of second-line
drug costs for the treatment of MDR-TB.
SUBCOMMITTEE RECESS
Senator Leahy. Thank you very much, Dr. Shah.
Dr. Shah. Thank you, Senator.
[Whereupon, at 11:43 a.m., Tuesday, April 8, the hearings
were concluded, and the subcommittee was recessed, to reconvene
subject to the call of the Chair.]