[Senate Hearing 113-524]
[From the U.S. Government Publishing Office]






                                                        S. Hrg. 113-524

                 INTERNATIONAL DEVELOPMENT PRIORITIES 
                         IN THE FY 2015 BUDGET

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

                                HEARING

                               BEFORE THE



                     COMMITTEE ON FOREIGN RELATIONS
                          UNITED STATES SENATE

                    ONE HUNDRED THIRTEENTH CONGRESS

                             SECOND SESSION

                               __________

                             APRIL 10, 2014

                               __________

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                COMMITTEE ON FOREIGN RELATIONS         

             ROBERT MENENDEZ, New Jersey, Chairman        
BARBARA BOXER, California            BOB CORKER, Tennessee
BENJAMIN L. CARDIN, Maryland         JAMES E. RISCH, Idaho
JEANNE SHAHEEN, New Hampshire        MARCO RUBIO, Florida
CHRISTOPHER A. COONS, Delaware       RON JOHNSON, Wisconsin
RICHARD J. DURBIN, Illinois          JEFF FLAKE, Arizona
TOM UDALL, New Mexico                JOHN McCAIN, Arizona
CHRISTOPHER MURPHY, Connecticut      JOHN BARRASSO, Wyoming
TIM KAINE, Virginia                  RAND PAUL, Kentucky
EDWARD J. MARKEY, Massachusetts
               Daniel E. O'Brien, Staff Director        
        Lester E. Munson III, Republican Staff Director        

                              (ii)        

  













                            C O N T E N T S

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                                                                   Page

Corker, Hon. Bob, U.S. Senator from Tennessee, opening statement.     3
Menendez, Hon. Robert, U.S. Senator from New Jersey, opening 
  statement......................................................     1
Shah, Hon. Rajiv, Administrator, U.S. Agency for International 
  Development....................................................     3
    Prepared statement...........................................     5
    Responses to questions submitted by Senator Bob Corker.......    36
    Responses to questions submitted by Senator Tom Udall........    49

              Additional Material Submitted for the Record

Letter and attached prepared statement submitted by Lions Clubs 
  International..................................................    33

                                 (iii)

  

 
  INTERNATIONAL DEVELOPMENT PRIORITIES IN THE FISCAL YEAR 2015 BUDGET

                              ----------                              


                        THURSDAY, APRIL 10, 2014

                                       U.S. Senate,
                            Committee on Foreign Relations,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 9:40 a.m., in 
room SD-419, Dirksen Senate Office Building, Hon. Robert 
Menendez (chairman of the committee) presiding.
    Present: Senators Menendez, Cardin, Durbin, Murphy, Kaine, 
Corker, Rubio, Johnson, Flake, and Barrasso.

          OPENING STATEMENT OF HON. ROBERT MENENDEZ, 
                  U.S. SENATOR FROM NEW JERSEY

    The Chairman. This hearing of the Senate Foreign Relations 
Committee will come to order.
    Administrator Shah, welcome back to the committee. You come 
at a time when USAID is making headlines for, in my mind, doing 
nothing more than the job you were appointed to do.
    Let me say for the record when it comes to the issue of 
Cuba or your work in any closed society, I do not believe that 
USAID's actions, as clearly articulated in your mission 
statement--to promote, ``resilient, democratic societies that 
are able to realize their potential''--are in any way a 
cockamamie idea.
    I believe it is exactly what the people of Cuba, Iran, 
Burma, Belarus, North Korea, and other authoritarian nations 
need to help them communicate with each other, and to help them 
achieve USAID's stated mission of a ``free, peaceful, and self-
reliant society with an effective legitimate government.''
    So I commend you for helping people have a less-controlled 
platform to talk to each other, and for helping them to find a 
way to connect and to share their views.
    Global Internet freedom programs, U.S. international 
broadcasting, and support for human rights activists are all 
fundamental components of our country's long-standing efforts 
to promote democracy overseas. For more than 50 years, the 
United States has had an unwavering commitment to promote 
freedom of information in the world.
    Our work in Cuba is no different than our efforts to 
promote freedom of expression and uncensored access to 
information in Ukraine, Russia, Belarus, Iran, China, or North 
Korea.
    It should be noted that in the fiscal year 2014 Senate 
foreign operations bill, there is $76 million set aside to 
promote global Internet freedom and democracy in closed 
societies like Cuba, where the regime allows no independent 
press and limits access to the Internet. It also states that 
``with respect to the provision of assistance for democracy, 
human rights, and governance activities,'' these programs 
``shall not be subject to the prior approval by the government 
of any foreign country.''
    It is common sense that we should not ask the Government of 
Iran or Egypt or China for permission to support advocates of 
free speech, human rights, or political pluralism, or to 
provide uncensored access to the Internet or social media.
    At the end of the day, just giving people the opportunity 
to communicate with the outside world and with each other is, 
in my mind, a fundamental responsibility of any democracy 
program.
    As Bill Gates said: ``The Internet is becoming the town 
square for the global village of tomorrow,'' and he is right. 
But to go one step further, the town square will become more 
free and inclusive thanks to the democracy efforts of 
organizations like USAID.
    And let me just close on this one point. I think it is 
dumb, dumb, and even dumber to go ahead and suggest that there 
can be freedom, and that we should seek freedom of Internet 
access and freedom of expression globally, but that somehow the 
people of Cuba do not deserve the same freedom.
    Finally on this topic, I will say that there is only one 
entity responsible for the imprisonment of Alan Gross, and that 
is the Cuban regime. It is not this Government. It is not 
USAID. It is the Cuban regime. I am tired of blaming ourselves 
when the entity that should be blamed is the regime that 
unlawfully holds an American in prison for doing nothing but 
having the Jewish community in Cuba to communicate with each 
other. It is pretty outrageous.
    Now, finally, with reference to the overall priorities of 
the budget, we look forward to your perspective on how we can 
make certain that U.S. development assistance is aligned with 
overall U.S. foreign policy, and I look forward to hearing 
about your priorities for the fiscal year 2015 USAID budget.
    I know I speak for all of the members when I say how 
impressed I have been by your creativity and energy, which has 
been essential to USAID reform and to your agency's pursuit of 
international development priorities in ways that focus on best 
practices and results.
    However, as we have discussed on numerous occasions before, 
and as I said to the Secretary when he was here, I do remain 
deeply concerned about the resources for the Western 
Hemisphere. They are insufficient to meet the challenges of the 
region and its importance to our own economic prosperity, 
security, and our shared interests in health and development. 
So that is something that we look forward to continuing to 
engage on with you.
    And while efforts to address the challenges of domestic and 
transnational criminal networks pose the greatest short-term 
threat to stability in the region, a long-term strategy that 
boosts economic growth and consolidates the rule of law is 
fundamental, and, in my view, it is currently lacking. I 
believe we can do better in the hemisphere, and I think we can 
do better in meeting, within that context, our international 
development priorities within the hemisphere.
    I look forward to an ongoing conversation with you about 
how we get the best results more broadly for USAID, for foreign 
assistance, for donors, for NGOs, for the taxpayers.
    And now I would like to recognize the ranking Republican, 
Senator Corker.

             OPENING STATEMENT OF HON. BOB CORKER, 
                  U.S. SENATOR FROM TENNESSEE

    Senator Corker. Thank you, Mr. Chairman, and thank you for 
those passionate comments.
    Mr. Shah, we appreciate you being here and all the work you 
do around the world.
    My comments are going to be a little more brief. We look 
forward to your testimony.
    But, look, we appreciate you being here to go over your 
budget request for 2015. We appreciate the reforms that you are 
trying to put in place around the world but also within USAID 
itself.
    I think foreign aid is one of the most misunderstood 
concepts that the American people have sometimes. And the fact 
is we spend 1 percent of our overall U.S. budget on foreign 
assistance and foreign aid and foreign activities, nonkinetic I 
might add. But I would like for you to herald some of those 
successes. I know you are going to do that today, but I think 
it is also our responsibility to have some healthy skepticism 
regarding some of the programs. I really appreciate what you 
are trying to do with the food programs, to make them much more 
efficient and look forward to talking with you about that.
    I know there are some other programs where we are going to 
be dealing 30 percent with local entities. In one way, that is 
a much appreciated concept. On the other hand, I know we want 
to make sure we have results from that.
    But thank you for being here today. We look forward to the 
questions and certainly your testimony. And we thank you for 
your work.
    The Chairman. Administrator Shah, the floor is yours. We 
will enter your full statement in the record, without 
objection. We would ask you to summarize it, more or less, in 
about 5 minutes, so that members can have an opportunity to 
have a dialogue with you.

 STATEMENT OF HON. RAJIV SHAH, ADMINISTRATOR, U.S. AGENCY FOR 
           INTERNATIONAL DEVELOPMENT, WASHINGTON, DC

    Dr. Shah. Thank you. Thank you, Chairman Menendez and 
Ranking Member Corker. I want to thank you specifically for 
your very strong leadership and your support for America's 
development programs around the world and ensuring that they 
are a full reflection of our values.
    I want to thank all the members of the committee for your 
guidance, counsel, support, and oversight in these past years.
    And I am honored to be here to present the President's 
fiscal year 2015 budget request for USAID, which totals just 
above $20 billion.
    This resource and this investment is a core part of keeping 
our country safe and secure over the long term and improving 
our own domestic prosperity as the world prospers with us. Our 
mission is to end extreme poverty and to promote resilient 
democratic societies.
    Our efforts over the last few years with your support have 
constituted a serious rebuilding of this agency. During my 
tenure, we have hired more than 1,100 staff, rebuilt our 
capacity to manage budgets, projected policy priorities in 
food, energy, education, water, and health and expanded our 
partner base to include more local organizations, companies, 
faith-based institutions, universities, scientists, and 
students in addition to our valued traditional NGO and 
contracting partners.
    We have expanded our capacity to evaluate all of our major 
programs. When I started, there were a few dozen evaluations 
put forth every year. This year we will have nearly 280, with 
more than 50 percent of them used to make course corrections in 
how programs are implemented, with all of them being open and 
publicly available.
    Our efforts have constituted a new model of development 
that engages the private sector, science and technology, faith 
institutions, and others in new types of partnerships. We 
believe these partnerships are delivering results.
    President Obama's Feed the Future program, which is 
represented with nearly $1 billion in this budget request, now 
reaches 7 million small-scale farmers in 19 countries. This 
year, 12.5 million children will no longer be hungry because 
they are in families that are beneficiaries of Feed the Future. 
Our investment is matched and in some cases exceeded by private 
sector partners who have committed $3.7 billion to this effort, 
and I want to thank the committee for its leadership in 
supporting incremental food aid reforms that will help us reach 
an additional 800,000 children in the context of disasters 
around the world this year.
    Our efforts to support and save children's lives, 
especially children who die unnecessarily under the age of 5, 
are supported in this budget with a $2.7 billion budget 
request. Between 1990 and today, every year we save more than 5 
million children from dying under the age of 5. We have set for 
ourselves a similar goal of saving 6 million kids a year by 
2030 and mobilized the global community to work with us to 
achieve those goals.
    In education, water, energy, and many other sectors of the 
economy, we work in a results-oriented way, and I look forward 
to that discussion today.
    Last week, I was in Hawaii with Secretary Hagel working 
with ASEAN defense ministers on how we can coordinate 
humanitarian relief efforts more effectively and help them 
build the capacity to be great partners in dealing with 
disasters. This budget request includes more than $3 billion 
for disaster assistance in places like Syria, the Central 
African Republic, and South Sudan.
    Our investments in democracy, human rights, and governance 
are an important part of what we do all around the world. This 
past weekend, we noted with some initial success an election in 
Afghanistan that saw nearly 60 percent voter turnout and a very 
large proportion, more than expected, of women. Those efforts 
were supported by the United States and other international 
partners and led by Afghan institutions themselves.
    Our work in our own hemisphere is of particular importance. 
And while budgets have been tight and this budget does make 
tradeoffs, we have now launched a U.S. Global Development Lab 
that brings businesses, scientists, technologists, and 
universities together. And I believe in the Latin American 
region in particular, we are starting to see some interesting 
results. We closed an interesting leveraged partnership in 
which we will spend $5.7 million to motivate local banks to 
commit $133 million to small-scale farmers and producers in 
agricultural lands in Colombia, Peru, and Guatemala. That kind 
of leverage and that kind of scale is what is possible if we do 
things in a more creative and effective way.
    Let me close just by saying thank you. I had the 
opportunity this year--and I was honored to--to deliver the 
speech at the National Prayer Breakfast, and it reminded me 
that when we come together to serve the world's most vulnerable 
people, this is an issue that can cut across partisan divides, 
bring us together as a nation, and allow us to continue our 
proud heritage over past decades as the world's humanitarian, 
development, and global health leader. Thank you.
    [The prepared statement of Dr. Shah follows:]

                  Prepared Statement of Dr. Rajiv Shah

    Thank you Chairman Menendez, Ranking Member Corker, and members of 
the committee. 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 
anticorruption, 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 toward 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 FY 2015 budget request for USAID managed or partially managed 
accounts is $20.1 billion, 1 percent below the total enacted FY 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 a 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 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 longstanding partners in the development community, to faith 
organizations, to multinational 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 health care providers buy life-saving health 
care equipment, including portable ultrasound devices and 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 
multimillion 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 toward 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 toward these goals. Since 2010, 15 of our 24 
priority countries have rolled out the pneumonia vaccine with GAVI 
support; and since 2011, 8 have introduced rotavirus vaccines against 
diarrheal diseases. In 2013, the President's Malaria Initiative 
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 FY 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 multinational 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 FY 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 toward 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 
FY 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 one 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 two 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 geospatial 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 FY 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 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 ninefold 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 one 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 US-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 FY 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 FY 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 FY 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 FY 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 good will 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.

    The Chairman. Thank you, Administrator.
    Let me start off with the one concern that I had, which is 
the Western Hemisphere. Almost every major account in USAID's 
fiscal year 2015 budget for the Western Hemisphere will be cut 
relative to past years. Venezuela will be cut by 14 percent, 
even amidst the current crisis. Haiti, Colombia, and Guatemala, 
will all be cut by 20 percent.
    Now, I do not underestimate the problems we face in the 
world, but I do think we underestimate the problems that we 
face in our own hemisphere. We have enormous challenges in 
Central America with one of the highest homicide rates in the 
world. We have challenged governments in terms of meeting that 
challenge and rule of law issues. In Mexico we still have some 
states that are relatively lawless near the frontier border 
with the United States. We have the challenge of Venezuela and 
a growing set of circumstances there where civil society is 
under siege. And in Ecuador, because of the government, we have 
basically closed our missions. So I see a wide range of issues.
    And I understand that some of these countries have sort of 
``graduated,'' but by the same token, instead of looking for 
other investment opportunities in the hemisphere, the money is 
sent to other parts of the world. And we have now seen, year 
over year over year, double-digit cuts that, from my 
perspective, are not sustainable.
    So can you commit to me that you will work with us, as the 
Secretary said he would, to see how we change this dynamic? 
Because I think that in our own hemisphere, in our own front 
yard, there are challenges that are in our national interests 
on so many different questions--from security to drug 
interdiction to economic opportunity to health care issues that 
know no borders when it comes to diseases. Can you talk a 
little bit about that?
    Dr. Shah. Yes. Thank you, Senator, and I appreciate that 
point of view and agree with the central nature and importance 
of the region.
    While we have made tough tradeoffs over the last many 
years, as Secretary Kerry noted and as President Obama has 
said, this region is of critical importance to our future from 
a trade, immigration, and partnership perspective. As a result, 
we are trying to position our programs in such a way that 
especially as countries get wealthier and move into middle 
income and upper income status, our programs shift to engaging 
more public/private partnerships, and we are doing more 
creative and technical partnerships in lieu of, in some cases, 
slightly lower resources.
    In particular, I am proud of the fact that our Development 
Credit Authority team has dramatically expanded the number of 
loan guarantees we provide to local banks, whether it is in El 
Salvador where we have now allowed Banco Davivienda to open $25 
million of lending for small-scale businesses or in Nicaragua 
or in Mexico where I will be next week to meet with some of 
these partners. We are making real progress in helping to 
unlock local finance using our credit guarantees in a highly 
leveraged way. I would like for us to be able to do a lot more 
of that.
    Similarly, as we have reprioritized science, technology, 
and innovation, we have a host of new and improved partnerships 
with businesses and research institutions throughout the 
region. One I would note is an innovative partnership with 
Starbucks to help them reach 25,000 small-scale farmers in 
Colombia in previously FARC-affected communities so that they 
can bring better prices 
to the farm gate, economic value, and build supply chains that 
enhance economic opportunity while also supporting their own 
presence there.
    So we are trying to evolve into those types of 
partnerships, and the region can become a model for that new 
model of development and developmental partnership especially 
in countries that are moving up the income scale.
    The Chairman. Well, I appreciate that innovative thought 
and I welcome it, but we are also looking at some of these 
other challenges in the hemisphere. So we will continue to 
engage with you in that respect.
    In Ukraine, the language passed by this committee and the 
Senate and the House, signed by the President asks State and 
USAID to reprogram assistance to Ukraine, $50 million to be 
budgeted for the improvement of democratic governance, rule of 
law, and free elections, among other things, and $100 million 
for security assistance spread over the next 3 fiscal years.
    Where are you in the process of reprogramming this 
assistance, and when would you expect it to get to Ukraine? And 
when do you believe the USAID mission director signing the 
bilateral agreement with the Ukrainian Government, which will 
transfer the $1 billion in loan guarantees we authorized in the 
same law will take place? Do you have any sense of the 
timeframes there?
    Dr. Shah. Well, sir, I would appreciate the chance to come 
back to you on the specific question of the bilateral agreement 
and loan guarantee.
    [The information from Dr. Shah follows:]

    The loan guarantee agreement is expected to be signed with the 
Government of Ukraine on April 14, 2014.

    But our Acting Deputy, Mark Feierstein, and Paige 
Alexander, our Assistant Administrator, are actually in the 
Ukraine right now. They are working with civil society groups 
and groups that are supporting the election process.
    I would note that some of our partners there were critical 
to documenting some of the human rights abuses that took place 
in the 45-day period during the protests.
    Our economic portfolio is being restructured to support the 
implementation of and moving forward with the IMF agreement so 
that Ukraine can get access to tens of billions of dollars of 
IMF resources. We are helping them with technical support to 
change the fuel subsidy structure and the future of their 
energy security policy and a number of other areas where that 
kind of economic technical assistance has been requested.
    But we have had a proud and significant history of working 
in Ukraine. We have delivered very important results, and we 
look forward to continuing to do that at a higher level now, 
given some repositioning of resources and given the very strong 
support of the committee.
    The Chairman. Finally, I understand that USAID plans to 
incentivize up to $100 million in on-budget funding based on 
benchmarks set through the Tokyo Mutual Accountability 
Framework. I think that is an important initiative that 
deserves highlighting. In a time of constrained budgets, 
accountability for the funds in Afghanistan will only grow in 
importance.
    What hard deliverables will we be emphasizing in 
discussions with the incoming Afghan Government? What are some 
of our goals? What are some of the challenges there?
    Dr. Shah. Sir, first, thank you, Senator for your 
leadership in supporting our programs in Afghanistan. For 2 to 
3 percent of the total cost of the war, we have delivered 
tremendous and important results that create the basis of a 
more stable and secure society going into the future.
    We were part of an international conference effort at Tokyo 
a year and a half ago to bring together all the international 
partners and create a set of conditions that the Afghan 
Government would have to meet in order to receive the full 
amount of committed development assistance not just from the 
United States but the U.K., Australia, Japan, all of the 
international partners speaking with one voice. Some of those 
benchmarks include anticorruption activities that are clear and 
transparent and effective. They included the conduct of free 
and fair elections and the peaceful transition of power. They 
include collecting more customs revenue and using their 
domestic collection of revenue to replace developmental 
assistance over the long term, and we have seen a 360-percent 
increase on that benchmark. There are seven or eight other 
critical benchmarks that include protecting women's and girls' 
rights and access to school and education for young girls in 
particular. And so our community meets twice a year to assess 
their performance, and we intend to make some shared 
determinations after an assessment conducted with the new 
government.
    The Chairman. Senator Corker.
    Senator Corker. Thank you, Mr. Chairman.
    And again, Mr. Shah, thank you for being here.
    I know you and I have talked a great deal about the Food 
for Peace program, and I know that it is being partially 
implemented. But I think we all know that due to parochial 
interests, we are really not delivering food aid in the way 
that we need to as a country. The goal is to alleviate 
suffering for people who are starving and malnourished. I 
wonder if you could talk a little bit about that and what you 
would like to see fully happen relative to our food programs.
    Dr. Shah. Thank you, Senator, and thank you for your 
leadership on this critical issue.
    America has, through Food for Peace, which USAID 
implements, over the last 50 years served more than 3 billion 
people, providing them food assistance when they need it. Every 
other country that provides food assistance has made a shift to 
purchasing food locally and to providing cash resources to 
institutions like the World Food Programme so they can buy and 
deliver in the most efficient way----
    Senator Corker. And that empowers those local countries to 
be far more self-sufficient over the long haul. Is that 
correct?
    Dr. Shah. It absolutely does.
    Senator Corker. It raises the standard of living in those 
countries when we do that. Right?
    Dr. Shah. Yes.
    Senator Corker. How many more people could be actually 
served if we would move fully to this kind of program, which I 
think anybody would say, from the standpoint of what we are 
trying to do, makes more sense than what we are now doing where 
we are shipping U.S. products overseas to places and never 
building up that independence that we would like to see happen 
over time? How many more people would be served?
    Dr. Shah. This year's budget proposal calls for 25 percent 
flexibility in the program, and that 25 percent correlates to 2 
million additional children who would receive food at times of 
crises. Those are kids and women and men inside of Syria, in 
Amman, Jordan, in Lebanon, in the Central African Republic, and 
South Sudan and in Afghanistan.
    Senator Corker. And if we did it fully, how many more 
people would be served?
    Dr. Shah. I have not made the 100 percent estimates.
    Senator Corker. We have done an estimate and we think it is 
7 million to 9 million more people each year would be served if 
we would move away from the constraints that we now have by 
ensuring that instead of, again, building up the independence, 
helping the local economies, which is what this is all about, 
we would--and I guess we also have preferred shippers. Would 
you tell us a little bit about that?
    Dr. Shah. Well, the way the shipping contracting system 
works is that it relies on a handful of core partners. They 
have been important partners over the course of the program. 
And the President's proposal, which is an incremental proposal, 
maintains an important role for American farmers, food 
producers, and shippers. We are simply asking for a little bit 
of additional flexibility so we can meet the needs of 
beneficiaries at a time when humanitarian caseloads are higher 
than they have ever been and our budgets are constrained.
    Senator Corker. Another program you have underway is USAID 
Forward. We have asked for a GAO study on that. And again, this 
is along similar lines in many ways. I think your goal is to 
contract 30 percent of your activities at the local level.
    One of the concerns we have, though, is that right now the 
way you are tracking that is you are tracking how much money 
you are spending, but you are not tracking outcomes, as I 
understand it, to see that even though the money may be 30 
percent going there, are we getting the same kind of results. 
Now, this is a different kind of effort than the food aid 
program I was talking about. This is actually contracting with 
people to carry out the work that USAID is underway with.
    Could you talk to us a little bit about that, and do you 
have similar concerns, by the way, that we are only measuring 
money out, we are not measuring results?
    Dr. Shah. Well, I would just reframe that a little bit, 
Senator, because I think USAID Forward is intended to cover a 
range of reforms that allow us to be a better and more 
efficient partner, allow us to be more efficient, and 
ultimately and critically, allow us to be better at reporting 
on core results. And so that is a package of reforms that 
includes a number of things to move us in that direction, and I 
think we have proven we have been able to do that.
    I will say I believe the GAO review is focused specifically 
on this shift to including more local NGO's and local 
institutions. I would have hoped that they might have broadened 
the analysis because if you do broaden the analysis to the full 
set of reforms, what you would find is unlike a few years ago, 
today I can sit here and say we are reaching 7 million farmers, 
moving 12.5 million kids out of hunger through our agriculture 
efforts, that our child survival programs are saving millions 
of lives a year, and that ability to quantify and report on 
those results is also a part of USAID Forward.
    I would also note that our progress against our goals in 
moving to local institutions has been, as designed, 
incremental, and we think we are doing this at a pace that is 
responsible. But the ultimate goal is to build enough 
institutional capacity locally so that American aid and 
assistance is not needed over the long run. We want to build 
that self-sufficiency so that we do not have to be there 
forever.
    Senator Corker. One of the important things that we do as a 

nation is trade capacity-building. Again, these are along the 
lines that I think most people here would like to see, and that 
is making sure that we are doing, on a daily basis, everything 
we can to empower countries that we are working with to be 
sustainable on their own and not be dependent upon aid forever 
from the United States.
    We looked on a Web site just to try to determine who is 
really in charge of trade capacity-building. There are 24 U.S. 
agencies involved in that. And I would just ask you which one 
really is ultimately responsible for building trade capacity in 
countries that we are dealing with.
    Dr. Shah. Well, sir, first, I think this is a critically 
important issue. I would note that we commit nearly $200 
million a year specifically to trade capacity-building but, 
frankly, far more than that if you look at agricultural trade 
support in regions of Africa and elsewhere.
    Michael Froman, the U.S. Trade Representative, and I are 
cohosting a discussion with a number of our partners to 
understand how we can together optimize the implementation of 
the new Bali Agreements that create a framework for improved 
intracountry trade with many of the countries we work in. 
President Obama launched Trade Africa last year in Africa based 
on some extraordinarily strong and independently validated 
results that showed that for every dollar we invested in trade 
capacity building and trade transit, we were generating $40 of 
economic value through our east African trade hub. So the U.S. 
Trade Representative, myself, and the State Department work in 
close coordination. USAID probably provides most of the 
financing for these activities.
    Senator Corker. But I think the concern is--again, you are 
one of the most reform-minded leaders of this organization we 
have ever had, and I think we all applaud those efforts. But I 
think the concern is there is not really one person or a small 
group of people that is driving this. And as you mentioned, I 
mean, it is incredibly important and there is so much that we 
can do without much money to really empower these countries to 
be involved in trade that, again, goes on forever versus what 
we are doing relative to aid.
    Is there a way that you think--maybe you are not going to 
answer this today in this setting, but is there a way you would 
work with us to help figure out who actually is in charge and 
responsible and accountable for these activities so it has a 
focus that gets us to a place that we would all like to go?
    Dr. Shah. We absolutely would like to work with you. I will 
just say the way it currently works is USAID takes 
responsibility for the implementation of these programs and 
reporting on the results, ensuring they are effectively 
designed, and the U.S. Trade Representative, of course, leads 
the trade negotiations that create opportunities for these 
programs to be effective and deployed where they are most 
needed. It is critical that we are working closely together. I 
can report to you with a high degree of confidence that I think 
that partnership has never been closer.
    Senator Corker. Thank you very much.
    I appreciate the hearing, Mr. Chairman.
    The Chairman. Thank you.
    Senator Cardin.
    Senator Cardin. Administrator Shah, again, thank you very 
much for your leadership.
    Development assistance is a critical part of our national 
security interest, and the Obama administration has made it 
clear that our national security budget includes the 
development assistance programs. You are less than 1 percent of 
the Federal budget and a very small fraction of the total 
national security budget. But it is a very, very important part 
of the budget.
    I particularly want to acknowledge the budget support for 
East Asia and the Pacific, the subcommittee that I chair. As I 
told you before the hearing started, you are working under a 
very tough budget climate. The overall budget growth is very 
much reduced, and you have had to make very tough decisions. So 
I particularly appreciate the priority that has been given to 
East Asia and the Pacific, consistent with the President's 
Rebalance to Asia, from the Philippines in disaster assistance 
funds to Burma, democratic institutions. And I might say to 
Senator Corker your trade capacity improvement in Laos--there 
are many countries that are benefiting directly from what you 
are doing in East Asia and the Pacific.
    The Lower Mekong Initiative Secretary Clinton initiated 
affecting the countries in that region not just on the 
environment, but also on health and also on infrastructure. It 
is a major initiative that I think we can be very proud of.
    Having said what I did, we want to make sure that aid is 
done in the most efficient way. And that is why the food aid 
program reforms that you are instituting are very valuable 
improvements so that we can reach more people and leverage our 
dollars further than we do today. This year you started the 
Global Development Lab, and I want to talk for a few moments 
about that--about using science and technology innovation in 
development by leveraging the moneys that we make available to 
our academic centers that have expertise in specific areas and 
who are already working in many of the countries that we are 
active in, as well as engaging private companies that also want 
markets in these countries, and so are prepared to make 
investments in them. If we work in a coordinated way, we can 
get much more effective results and achieve our development 
assistance objectives in a more efficient and, hopefully, a 
shorter time period.
    Can you just share with the committee how you anticipate 
this program operating as you now have launched the development 
lab?
    Dr. Shah. Well, thank you, Senator. Thank you for your 
leadership on so many issues related to our work and for your 
personal commitment to food aid reform and to the U.S. Global 
Development Lab.
    We are excited to have recently launched the U.S. Global 
Development Lab. In my time in this role, we have increased our 
spending on science and technology, research and development 
from about $130 million previously to just over $600 million 
this year, and we have done that entirely through programmatic 
tradeoffs where we are making the tough choices to move money 
into this area.
    What this has allowed us to do is create development 
innovation laboratories on college campuses across this 
country, and we are seeing groups of students and faculty and 
researchers create new technologies like new ways to allow 
babies to breathe through low-cost continuous positive airway 
pressure devices that came from Rice University, the Pratt 
Pouch which came from the Duke School of Biomedical Engineering 
that allows us to store nevirapine in a ketchup-like packet, 
but it is heat sensitive and safe for up to a year so women can 
take that--go to their homes and when they give birth, take one 
dose before and one for the child after, and prevent the 
transmission of AIDS from a mother to a child without being in 
an assisted medical environment. Those kinds of technological 
breakthroughs reduce the cost of saving kids' lives, saving 
mothers' lives, and improve the effectiveness of our efforts.
    Senator Cardin. It also reduces the cost that we would 
incur in direct health services to deal with babies that are 
infected.
    Dr. Shah. That is exactly right. We have also found that 
companies across our country and around the world have been 
eager to partner with us. So now Wal-Mart has joined the Lab 
and is working with us to reach farmers throughout sub-Saharan 
Africa. Unilever and Procter and Gamble have joined and are 
providing packets of material that allow us to purify water in 
places like Burma. They are donating those, but they are also 
helping us reach hard-to-reach communities where too many 
children die just because the water is impure and still has 
microorganisms in it.
    These kinds of public/private partnerships, coupled with a 
real professional science and technology capacity will allow 
USAID and U.S. development efforts around the world to have a 
DARPA-like capability to create new technologies, deploy them 
on behalf of the world's poorest people, and just as 
importantly, allow young people in this country that want to 
create entrepreneurial businesses, whether it is making and 
selling solar-powered flashlights in parts of rural Africa 
where there is no energy access, or commercializing the CPAP--
positive airway pressure--device which they now do for $20 or 
$30, a device we are deploying throughout Malawi. We found a 
lot of young people are inspired by the opportunity to become 
inventors and entrepreneurs and to use that business savvy and 
skill to actually solve some of the world's most challenging 
problems.
    Senator Cardin. I think we find it very exciting. You are 
really leveraging the strength of America, the strength of 
America in our science and technology and what we have been 
able to discover and share with the world, as well as our 
entrepreneurial spirit in our private companies. These are 
American values that are being used to help you deal with your 
objectives in development assistance.
    Where are the challenges and where can Congress help?
    Dr. Shah. Well, we have requested a series of new 
authorities from Congress to help us be a little more flexible 
and modern in how we carry out this work. They include the 
ability to use program funds to hire specialized individuals 
with science and business backgrounds, the ability to provide 
prizes. We have seen that a lot of technological innovation 
comes out of prize competitions, and then you only spend money 
on outcomes that are winning and you are able to motivate 
hundreds, sometimes thousands of new partners, some you would 
never otherwise be able to find to compete, are the ones 
winning prizes on some of those innovation awards; and we have 
also requested some flexibilities in how we use our resources 
in the development assistance account, which is particularly 
critical to funding this effort, and then of course, fully 
funding the USAID budget.
    So those would be the requests as it relates to this, and I 
just want to thank members of the committee for the 
extraordinary efforts you have made to support this new way of 
working.
    Senator Cardin. Just one final comment. As I understand it, 
it is basically using existing resources in a more efficient 
way to accomplish greater results.
    Dr. Shah. That is correct, sir.
    Senator Cardin. Thank you.
    The Chairman. Senator Rubio.
    Senator Rubio. Thank you. Thank you for being here and for 
all of your work.
    Mr. Director, the USAID is not a charity. Right? It is a 
U.S. agency that promotes humanitarian and development aid 
around the world but, as part of it, also furthering U.S. 
interests around the world. So it is a two-way street for us. 
We are doing what is right but we are also furthering our 
national interests. Right?
    Dr. Shah. Yes, that is correct.
    Senator Rubio. And so as you get involved in each country, 
you look at the specific needs. Every country has different 
needs. Some countries have a lack of access to water. Some 
countries--women are not treated appropriately or rights are 
violated. Every country has different needs. Some have energy 
problems. And so what USAID aims to do is to go into specific 
countries, determine what their need is, and promote those 
humanitarian causes, but also in a way that furthers U.S. 
interests. Is that an accurate description?
    Dr. Shah. Yes. Our mission is to end extreme poverty and 
promote resilient democratic societies because over the long 
term, accomplishing that mission makes us safer and more 
secure. You have articulated that very well.
    Senator Rubio. So with that mission in mind, you have 
programs, for example, on the Island of Cuba, that you have 
been engaged in in the past and continue. As I understand it, 
the clearly stated goals of that program, available for every 
members of the committee and the world to read, is to break the 
information blockade in Cuba and to promote information-
sharing, among other stated goals. Those are stated goals of 
our program and our involvement there. Correct?
    Dr. Shah. We have notified Congress in congressional budget 
justifications and notifications every year since 2008 on the 
goals of those programs, and we run Internet access and freedom 
of information programs in many parts of the world, including 
Cuba.
    Senator Rubio. Exactly.
    And the reason why I bring that up--and rightfully so that 
you focused on information-sharing and so forth because Cuba, 
according to Freedom House, is the second most repressive 
government in the world, only after Iran. In my understanding, 
it was a very close second after Iran in terms of denying 
access to information sharing, denying access to the Internet.
    People in Cuba cannot go on the Internet. I mean, if you 
are close to the government, you may be able to sneak in an 
Internet access here or there, but the average person on the 
street cannot go on the Internet in Cuba. It is not just a 
capacity issue. It is prohibited. In fact, I am going to send 
out a tweet right now. If I sent this tweet in Cuba, I would be 
put in jail. And I am going to send it right now as an example 
of what people in Cuba cannot do. People in Cuba cannot do what 
I am about to do.
    And so as a result of that, USAID, as has been revealed in 
the last few days, but was available for people to see if they 
were interested in it--USAID had a program called ZunZuneo, 
which was designed to provide the people of Cuba access to 
information and to break the information blockade and to allow 
people to share information.
    And I want to walk through this. First of all, there has 
been an insinuation made by some that this program was illegal, 
but in fact, this program in my opinion and I think in yours as 
well was completely within the stated mandate, within the 
stated purpose of your programs in Cuba, to break the 
information blockade, to promote information-sharing. That is 
accurate. Right? That was right within that goal.
    Dr. Shah. We have publicly notified that these programs are 
designed to enable open communications.
    Senator Rubio. And the other argument I have heard is, 
well, this was a covert program. But in fact, this program was 
reviewed by the General Accounting Office. Right?
    Dr. Shah. Correct.
    Senator Rubio. And they made no suggestions for changes. 
They had no criticism of the way the money was being 
administered.
    Dr. Shah. They actually complimented USAID on improved 
management oversight of the program.
    Senator Rubio. This was not an intelligence program. We 
were not spying on the Cuban Government using this program.
    Dr. Shah. No.
    Senator Rubio. We were not selling weapons on this program 
or somehow arming elements on the ground in Cuba through this 
program.
    Dr. Shah. No.
    Senator Rubio. So this program basically was allowing 
Cubans to be able to communicate with other Cubans because 
their government does not let them do that.
    By the way, in an advanced society in the 21st century, 
people should at least be able to do that. Right? But in Cuba 
they are not. And so what this program chose to do was to 
fulfill the mandate of this program as informed by Congress to 
break the information blockade and to promote information-
sharing.
    So I read this article and it said that at its peak there 
were 40,000 users on the program. That is actually not true. 
Right? At its peak, it had 68,000 users.
    So here is my question. When was the last time that we 
stopped a program because it was too successful? Because this 
program in my mind is successful. Not only am I glad that we 
did this program. What I am upset about is that we stopped, and 
I do not think we should just stop at Twitter-like programs. I 
think we should do everything possible. Maybe USAID is not the 
perfect agency for this, what I am about to talk about. But I 
believe we should do everything we can to provide the people of 
Cuba and other repressed societies full access to the Internet 
so they can go on any Web site they want. If they want to read 
Granma, which is the Communist rag in Cuba, they can read it 
all they want online, and if they want to read the CNN Web site 
or the New York Times or Huffington Post or Drudge, whatever 
they want to read, they should be able to do that as well.
    I think for everyone who is outraged by this program--when 
was the last time that undermining a tyranny is counter to the 
stated purposes of the United States of America? When is the 
last time that we have been outraged by a Government program 
that undermines a tyranny and provides access to a people of a 
country to the free flow of information and the ability to talk 
to each other?
    I read these quotes in the paper, people setting themselves 
on fire around here, oh, this program. I heard one quote it was 
cockamamie. Since when? We had radio broadcasts to Europe 
during the cold war. We have radio broadcasts to Cuba right 
now. Those actually have content in them. All we wanted people 
to do was to talk to each other.
    And I want to know when was the last time that it was 
against the stated purpose and goals of the United States of 
America to undermine a tyranny, by the way, a tyranny that we 
heard testimony here just 3 days ago that is involved in the 
single greatest violation of U.N. sanctions against North Korea 
since they were imposed, a tyranny that votes against us in 
every international forum, a tyranny that is consistently on 
the side of every madman and tyrant on the planet. If there was 
a vote on Syria, they are with Assad. When there was a vote on 
Libya, they were with Qaddafi. If there was a vote on Russia, 
they are with Putin. If there is a vote on human rights 
violations in China, they are with China. Time and again.
    When was the last time that Cuba in an international forum 
ever lined up on the side of decency and human rights? This is 
an anti-American government that does not just undermine its 
own people. It tries to undermine our foreign policy aims and 
the foreign policy aims of the free world.
    And so my question would be--and I know this is a 
longwinded question--when do we start this program again. What 
do we need to do to start not just this program but expand it 
so that people in Cuba can do what I just did and that is, 
speak freely to the world and to each other about the reality 
of Cuban life and about anything else they want, including the 
latest record from Beyonce or Jay-Z or what someone wore to the 
Oscars, whatever they want to write about? When do we start 
this again?
    Dr. Shah. Senator, I just want to clarify. USAID programs 
are, as notified, designed to promote open access to 
information and facilitate communication. Any programs that 
have further purposes are not implemented by USAID but rather 
by other parts of the State Department or the National 
Endowment for Democracy.
    In terms of restarting these types of things, the fiscal 
year 2014 fiscal guidance is pretty clear as to which agencies 
will be pursuing these activities into the future.
    The Chairman. Senator Durbin.
    Senator Durbin. Thank you, Mr. Chairman.
    I guess I want to follow my colleague and friend, Senator 
Rubio. And I sure do not quarrel with the premise, whether it 
is China or Cuba. Opening up information, free exchange of 
information is so fundamental to our country and so fundamental 
to what I consider to be the basic values of a democracy. So 
the critics of this effort, Mr. Shah, I think ought to come up 
with a better idea, but the notion behind it, the premise, I 
think is sound.
    I may go a little further than my colleagues on the 
committee when I say that after over 50 years of what has been 
a dubious foreign policy in Cuba by the United States, I have 
been in favor of opening up, as much as we can, Cuba to the 
ideas and people of the world and the United States. That is 
how communism and the Soviet Union came to an end. They were 
overwhelmed by reality.
    I have been to Cuba. They are isolated from reality. If we 
had more contacts at the social media level and beyond, I do 
not think that the current regime could survive as the 
communistic regimes did not survive in Eastern Europe.
    And I want to put in one point here, and I am sure it has 
been mentioned earlier. I visited Alan Gross. I think it was 2 
years ago now. What a heartbreaking situation. This poor man is 
being held because he may have brought in equipment that would 
have brought in more information into Cuba. I do not know 
specifically whether he did or did not, but that is the charge. 
Espionage. And what they have done to this poor man is 
heartbreaking. When you visit with him and see what his life is 
like today or meet his wife and family, as I have--and I said 
to the Cuban officials I have kind of leaned your way in 
opening up relationships between the United States and Cuba, 
but we have lost me on Gross. What you have done to this man in 
closing out his small, little effort to bring in some equipment 
to me is just outrageous. And this poor guy is still in prison, 
hospital prison, or whatever it happens to be and is going on a 
hunger strike. I do not know how he keeps his mind about him 
when he faces this every single day.
    But I do not disagree with your premise, Senator Rubio. 
Open it up. The more ideas we can pour into that island, the 
better I think the chance that they will move toward values 
that we share. And so those who are critical of this basic 
approach, give me a better one. Give me something else that 
will achieve this goal.
    Mr. Shah, two things that I focused on. One was a legacy 
from my predecessor, Senator Paul Simon, about Water for the 
World. We have been appropriating money. I know USAID has been 
focused on it. The other one was child marriage, and we finally 
passed that as part of the Violence Against Women Act. And I 
know that there is a program underway in USAID to try to 
discourage child marriage and all of the awful things which 
come as a result of it. And I would like you to comment on 
those two areas, if you could.
    Dr. Shah. Thank you, Senator. First, just thank you for 
your leadership on water and water for the poor. Thanks in part 
to your leadership and your predecessor's, we have an 
extraordinary opportunity now to reach 16 million people who 
would otherwise not have access to clean and reliable sources 
of water. And when we do, when we succeed, what that means is 
girls who are usually sent into dangerous environments to fetch 
water have safe passage. They avoid being abused and raped and 
hurt as they are going about those tasks, and they can do 
things like go to school. It is an extraordinary accomplishment 
that the Senate and the entire Congress should be very proud 
of.
    Between 2009 and 2012, our spending on water relative to 
the prior 4-year period went up from $1.4 billion to $2.4 
billion. The reason we were able to make that extraordinary 
increase at a time of tight budgets is that as we have focused 
on investing in those things that deliver the most cost-
effective results, save the most lives, and produce the most 
opportunity particularly for girls around the world, 
investments in water were near the top of the list, and that is 
why you have seen that transition and shift.
    I just want to thank you for your leadership, and I am 
proud of the way the agency is focused on measuring results in 
terms of lives saved from water programs and diarrheal disease 
reduction, in water access, and in sanitation access as well.
    With respect to child marriage and gender-based violence, 
we have new programs that focus on these issues in particularly 
high risk places. But it is just extraordinary the challenges 
people face. I was just in eastern Congo a few months ago and 
saw the U.N. report last week that shows 15,000 girls had been 
raped and it has been a part of how war has been conducted in 
that part of the world. I am proud of the fact that thanks to 
your support and other members of the committee, the United 
States leads the world in supporting health services for 
victims and helping girls get back on their feet and helping 
people reintegrate into society and finding economic 
opportunity, going back to school. And the range of those 
programs has gone up significantly since Secretary Clinton made 
a visit to that region I think now 5 years ago. But I think it 
is something America can be very, very proud of.
    Senator Durbin. Thank you very much.
    I might add too that I am promoting a product that is made 
in Chicago. This is a shameless promotion. It is called 
Portapure. This man has made--he is an engineer in water 
sanitation. He has made a 6-gallon thermos. Whatever you pour 
in the top comes out clean drinking water at the bottom in 2 
minutes. No chemicals involved. They use nano-fiber filters. It 
sells for about $60 or $70. In Haiti, a family spends about 
$3.50 a week for a jug of water. If we could take that into a 
microcredit situation, in a few weeks they could buy this jug 
that for 2 years would provide them safe drinking water for 
their family.
    So it is one idea. You have mentioned some others, and I 
hope that your folks will take a look at it. Portapure, one 
word. And I think if you meet George Page, you will be very 
impressed with this man who is trying to change the world one 
little bit at a time, and I think it is a good effort.
    Thank you very much.
    Dr. Shah. Thank you, Senator. We set up the U.S. Global 
Development Lab to help further develop and commercialize and 
distribute precisely those types of technologies. So we would 
be eager to follow up.
    Senator Durbin. I hope you will look at it. Thanks.
    Thanks, Mr. Chairman.
    The Chairman. Legitimate in-State promotion I think is one 
of the duties of a United States Senator. [Laughter.]
    Senator Johnson.
    Senator Johnson. Thank you, Mr. Chairman.
    By the way, we have got pretty good water filtration--a 
technology center in Milwaukee as well. You probably helped out 
with that company.
    Administrator Shah, welcome. I really enjoyed your keynote 
at the National Prayer Breakfast where you made I think a very 
strong case for foreign aid. Unfortunately, not every American 
got to hear that case, and I think it is also unfortunate that 
when you take a look at our current budget situation, the 
enormous pressure we are under, most Americans take a look at 
foreign aid and that is the first place they want to cut.
    So can you just speak a little bit in terms of making that 
case for foreign aid?
    Dr. Shah. Thank you, Senator, and thank you for your 
leadership.
    I think what I learned from the opportunity to be at the 
Prayer Breakfast this year was that when we come together 
across different communities of partners, Republicans and 
Democrats, House and Senate, businesses and entrepreneurs, and 
very importantly, faith community members who carry out this 
mission with exactly the right kind of intention of serving 
those that are least fortunate amongst us, we present a picture 
to the world of an America that cares about vulnerable people, 
that cares about countries and societies that have been left 
out of the tremendous growth and opportunity that has swept 
over the world over the last several decades and centuries.
    And when we start to remind Americans of just how much 
suffering there is out there, that 860 million people will go 
to bed hungry tonight, that 6.6 million children will die under 
the age of 5, almost all from simple diseases that could be 
prevented with pennies per dose types of treatments, people 
begin to the see the opportunity and actually ask us to do 
more, not less in our foreign assistance and our development 
investments.
    So our priority at USAID has been to demonstrate that 
resources the Congress entrusts in us at a difficult fiscal 
time are deployed as effectively and efficiently as possible. 
Congress has helped us a lot rebuilding our agency to do that, 
and we now evaluate every major program. I can sit here with 
confidence and describe programs that work and sometimes those 
that do not, that need to be changed or----
    The Chairman. I am going to ask Senator Johnson if he would 
just yield to me for one moment.
    Senator Johnson. Sure.
    The Chairman. I am going to ask Senator Kaine to preside. 
You are next after Senator Johnson. I am going to go vote, come 
back. I know Senator Flake wants to come back, and this way we 
will maximize your time. Thank you.
    Senator Johnson. You mentioned a word that is dear to my 
heart, prioritization. I think one of the things that harms 
foreign aid are examples where our foreign aid is given to 
countries that are very corrupt and may be supporting programs. 
The opposite of what Senator Rubio asked, can you name a 
program to give me certainly the information or the argument 
where we have actually ended a program that has been 
unsuccessful, that we have not been able to influence a country 
into better behavior?
    Dr. Shah. Well, sir, let me just say over my tenure we have 
shut down 34 percent of our programmatic areas of investment 
around the world, and that is what we have needed to do to free 
up the resources to invest in Feed the Future, which works in 
19 countries and delivers incredible and outstanding results.
    Specifically, I went out with my team a couple years ago to 
Afghanistan. We did a comprehensive review of everything that 
was planned 5 years out, and we called it a sustainability 
review. We removed from the game plan a number of projects that 
we did not think would be financially sustainable or generate 
the return on investment that would have been required. And 
right now, I sit here and I am very glad we did. And I do not 
want to name all those projects.
    Senator Johnson. I tell you what. Would you provide my 
office with that list?
    Dr. Shah. Absolutely.
    Senator Johnson. I think again that gives me some good 
information where I can say, listen, we have got a good 
Administrator. He is looking at these programs. These are 34 
that he has ended appropriately so.
    But also, let us keep going on in terms of prioritization. 
I know when you are looking at your budget request, you have 
got about a half a billion dollars targeted toward the global 
climate initiative. Now, I think when you were before a 
subcommittee in the Appropriations Committee in which I served, 
we talked about Bjorn Lomborg, somebody whose writings I 
respect an awful lot because he is really looking at 
prioritization of spending, what you were talking about 
earlier. You know, what do you get the most bang for the buck 
on? And he has written a pretty good book, ``Cool It,'' that 
certainly argues that we are far better off spending money on 
malaria prevention, addressing the problems of HIV and AIDS, 
fresh water initiatives that provide fresh water for 
populations as opposed to spending money on global warming, on 
climate change initiatives.
    So can you speak to that? That is 3 percent of your budget 
being allocated to something that somebody like Bjorn Lomborg 
is really scratching his head and saying that you are far 
better off spending money elsewhere.
    Dr. Shah. Well, we can. First, just so I am clear about 
what our priorities are, our largest area of investment at 
USAID is health at $2.7 billion. When you do the all-in and 
include the HIV program, it is $8 billion a year. Food is the 
next largest at about $2.5 billion, and that includes the Feed 
the Future program that investments in agriculture so our food 
aid is no longer needed.
    Senator Johnson. So again, here is another half billion 
dollars for climate change that maybe could be put toward the 
food initiative that Senator Corker was saying was incredibly 
effective.
    Dr. Shah. Well, we have $800 million for education, $600 
million for water, and our energy programs, which are part of 
the President's climate change initiative are growing in the 
budget. And it is because access to clean energy in country 
after country is just critical for development. I was in the 
Democratic Republic of Congo. They have 9 percent energy 
access. They want hydropower. They want off-grid energy 
solutions for local communities. And we work on all of those 
issues, and as we carry them out and implement them, they are 
going to be carbon reduction strategies as well.
    Senator Johnson. Hydropower is very cost-effective. I like 
that concept. Solar power is not economically feasible. Wind 
power is double the price of other type of generated power.
    So again, I am just asking the question. Where is this 
money being spent? Is it being spent wisely? Is it better spent 
in other areas?
    Dr. Shah. I think it is being spent wisely, and I would 
also point out when we are looking at the communities we are 
working in, people actually pay a huge amount of money for 
diesel generation for power and energy in places where there is 
no systemic access. In that context, small-scale energy 
solutions, off-grid solutions that rely on solar, wind, and 
other sources are extraordinarily cost-effective for those 
communities in those contexts. But this is exactly the kind of 
math we do to make sure that we are investing in things not 
just because we want to invest in things that have the highest 
return on investment, which we do, but ultimately we are making 
an initial investment and countries themselves have to sustain 
these systems over time. Like we did in Afghanistan, we want to 
be sustainable in how we carry out this work.
    I give a lot of credits to our team for bringing that kind 
of sophisticated analysis and ROI thinking to how we do this 
work and, in particular, carrying out cost-effectiveness 
analysis on these major programs and how they are implemented.
    Senator Johnson. Okay. Again, thank you for your answers.
    Senator Kaine [presiding]. Thank you, Administrator Shah. 
Good to be with you today.
    Just three comments and then a set of questions around 
Syria and humanitarian relief.
    Senator Cardin and others talked about the Global 
Development Lab. I am really excited about that project, and 
congratulations on the successful rollout.
    I was in Palestine recently and met with technology 
entrepreneurs that are really benefiting because of work with 
USAID, and it is not only creating economic opportunities but 
some strong regard for our country. You are a good ambassador 
in that way.
    I echo Senator Menendez's concern about the Latin America 
budget. You know, it is a combination of things. When we see 
the Latin America line items going down, when we see there are 
currently 10 U.S. Ambassadors in Latin America--ambassadorial 
positions that are unfilled, some of that is on the White 
House, but some of it is on people languishing on the floor of 
the Senate. The SOUTHCOM region of our defense has been hit 
very hard by austerity politics and are having to reduce their 
drug interdictions as a result. The combined message that we 
seem to be sending, while each of these might have their own 
explanation, is that Latin America is not really a place of 
importance to us. Just because it is not a place of importance 
to us does not mean it is not a place of importance to China, 
to Iran, to Russia. Russia is doing military exercises in the 
Caribbean for the first time in 20 years. And I really worry 
about this. And so I just want to echo what the Chair said.
    I want to ask you about Syria. The committee 2 weeks ago 
and the full Senate last week passed a resolution, S. Res. 384, 
dealing with humanitarian aid in Syria. The United States is 
the largest provider of humanitarian aid to Syrian refugees 
outside Syria, $1.7 billion in aid. Much of the aid has been 
delivered through NGOs and the U.N. to refugees who have fled 
across the border primarily in Turkey, Lebanon, and Jordan, to 
a lesser degree in Iraq and Egypt. We passed a resolution last 
week picking up on the U.N. Security Council resolution of 
February 22 saying now is the time for cross-border delivery of 
humanitarian aid.
    There are 3 million refugees outside Syria, but there are 9 
million people in need of humanitarian assistance inside Syria. 
The U.N. has indicated that unimpeded access cross-border is 
now something that is supported by the United Nations Security 
Council, and our resolution of last week called on the 
administration to bring back to us within 90 days plan for how 
we are going to be more aggressive in the delivery of 
humanitarian aid.
    What do you see as the potential role of USAID in 
facilitating a more aggressive humanitarian strategy to deal 
with the suffering?
    Dr. Shah. Thank you, Senator. Thank you for your leadership 
on such a broad range of issues and your partnership.
    On Syria in particular, I hope more Americans can see that 
the $1.7 billion we have provided is making a huge difference. 
It is reaching 4.2 million people inside of Syria. It is 
reaching 2.5 million refugees, as you point out, that are in a 
tremendous and unsustainable crisis within their neighboring 
countries of Jordan and Lebanon in particular. And within 
Syria, as you point out, 3.5 million of the 9 million you 
referenced are essentially not reachable because of the current 
constraints placed on how aid is provided.
    In that context, USAID has been the world leader in 
providing cross-border assistance, and the U.N. Security 
Council resolution calls for U.N. agencies to do the same. It 
was agreed to by the whole Security Council, and per Valerie 
Amos' report presented at the end of March, it essentially 
shows that the Syrian regime has not allowed for the terms of 
that Security Council to be met at any reasonable scale. There 
has been, I think, a few convoys across the Qamishli border 
done in coordination with the Syrians, but that is a small and 
very incremental step given that there are 3.5 million people 
that could be reached that are not being reached because the 
terms of that resolution are not being implemented as 
aggressively as necessary by the regime.
    So we are currently the main provider of cross-border 
assistance. That assistance has allowed us to provide surgeries 
and medical support to 250,000 injured Syrians in the north and 
the south and in places that other partners are not reaching. 
And I just want to say in this setting, I want to recognize 
Syrian American doctors and other humanitarian actors who have 
risked their lives to do some extraordinary work in that 
context.
    But we need to do more. We need the U.N. agencies to do 
more, and we need ultimately the Syrian regime to abide by what 
is in the U.N. Security Council resolution to allow for that.
    Senator Kaine. Well, I was at a meeting with Save the 
Children, one of the many NGOs that does work inside Syria, 
this morning, and we were talking about the effect that the 
regime is not allowing access in accord with the Security 
Council resolution.
    An important thing for the administration I think to 
understand in terms of Congress, while there are complicated 
feelings here in Congress about Syria--and particularly that 
was demonstrated in the vote about authorization of military 
force in August--there are not complicated feelings about 
humanitarian assistance. The humanitarian resolution that we 
passed came out of this committee unanimously. It passed out of 
the Senate unanimously. We would not be providing $1.7 billion 
of aid if it was controversial in Congress.
    So as the administration wrestles with what is the next 
step to try to make the Syria policy more effective, take 
advantage of the fact that you have a Congress that is 
unanimous about the aggressive delivery of humanitarian aid, 
including cross-border. That is something we are with you, and 
there is not controversy about it. And so I think there is much 
more that can be done in that area.
    Dr. Shah. Well, thank you. And that is wonderful to hear 
because just tomorrow I am convening my counterparts from other 
donor countries to basically ask them to do more of this type 
of cross-border work. It is good to know that there is support 
for that. Thank you.
    The Chairman [presiding]. Thank you, Senator Kaine, for 
presiding.
    Senator Flake.
    Senator Flake. Thank you. I appreciate your testimony here. 
As I sit here, I do want to respond to some of the comments 
made earlier. The chairman started off talking about the Cuba 
issue and said--I will just paraphrase--something like it is 
dumb, dumb, and even dumber to essentially shield Cuba from the 
influences that we have on other dictatorial regimes and 
authoritarian regimes. I could not agree more. I could not 
agree more. And that is why I have opposed our policy on Cuba 
for so long.
    The Senator mentioned that Iran is the only country less 
free than Cuba, but even in Iran, we do not shield the people 
of Iran from the influences or the Government of Iran from the 
influences of Americans traveling there. We encourage it.
    North Korea. If their government would allow more of it, we 
would encourage more of it where more Americans, not just 
Dennis Rodman, would travel there.
    And we have a similar situation with Cuba. We have Oliver 
Stone going down there and praising the education system in 
Cuba when if we had Bob from Peoria or Frank from Des Moines, 
they would say no such thing because they would realize that it 
is a different world than is described by some who travel 
there.
    So I just, for the life of me, cannot understand why, when 
our goal is to expose Cubans and the Cuban Government to 
American influence, we would cut off our arm and both feet here 
by denying ordinary Americans, everyday Americans the ability 
to travel freely there.
    Now, I have no doubt that if we opened up the travel ban, 
suspended it, ended it, the Cuban Government would try to be 
more selective on who they allow to come to Cuba. They are all 
about control. But if somebody is going to limit my travel, it 
should be a Communist, not this Government. That is the broader 
problem and issue I have with our whole policy at large 
regarding Cuba.
    Specifically with this one, I do have issues, not with the 
fact that we have programs like this going, but the fact that 
they are conducted by USAID. You can say until you are blue in 
the face, well, hey, this is something that we should have 
known about or it 
has been authorized, it is legal. We would argue back and forth 
whether it is covert or simply discreet, but that does not 
shield the fact that it is ill-advised for USAID that has the 
role, as you described it properly, to provide humanitarian 
relief and encourage democratic development around the world 
because that benefits us and them in the long term. It benefits 
U.S. interests as well.
    But when we have programs elsewhere in the world--just to 
describe some of the things USAID is doing, we are providing 
humanitarian relief to those in South Sudan. We have supplies 
coming from Nairobi to South Sudan, tough stuff. We are working 
with partners inside Syria. We may not have people on the 
ground there, but we do in neighboring countries. This is 
serious stuff.
    What are we doing to our USAID programs around the world 
when they hear there are covert or discreet programs like this 
going on by USAID? Do you have any concern that this program in 
Cuba jeopardizes our programs elsewhere in the world? Like I 
said, I am not questioning whether or not we should do this. I 
am just questioning you where we are doing it.
    Dr. Shah. Well, Senator, I appreciate and I think your 
remarks illustrate that there is a policy debate on the overall 
policy.
    With respect to the implementation of the program, what I 
can assure you is that our implementation is consistent with 
the authorizations and appropriations language that has 
directed us to do this. And by that I mean they are not covert. 
They are intended to provide access to open information. They 
are consistent with programs we conduct in a number of other 
countries around the world as part of supporting democratic and 
open governments and societies and civil society actors. At the 
end of the day, I believe that our mission to end extreme 
poverty requires a broad, open society to participate in that 
task.
    And I appreciate your mention of South Sudan and Syria 
where our people are conducting, I believe, heroic, world-
leading and modern technology-enabled humanitarian aid.
    Senator Flake. I understand that, but if I can get back to 
Cuba. I have limited time here.
    Like I said, we can argue whether it is discreet or covert, 
but when we look at the description of the program here, look 
at some of these text messages that we hired people to write, a 
satirist apparently from somewhere in South America to write 
some of these--I am reading a few that we have access to. 
Latest, this is a tweet sent out under this program.
    Dr. Shah. May I just say I think--and I am sorry to 
interrupt you, sir. I do think this program is no longer 
operational. I have asked my team to review the content that we 
are seeing in the various AP stories because we know the intent 
of the program was to support open information.
    Senator Flake. Along those lines, will we have access to 
all of the tweets or the messages, that were sent by USAID or 
its contractors, in full so we can judge here because we have 
to determine--we have to provide oversight, whether we 
authorize programs or fund them. Will we have access to these?
    Dr. Shah. I have asked my team to review the documents. 
Most of these documents are not in our possession. They are in 
the possession of a grantee----
    Senator Flake. But surely you have access to them.
    Dr. Shah. They will gather them. They will gather them, 
review them, and we will make our findings available to you. 
Absolutely.
    Senator Flake. I am not interested in your findings. I am 
interested in the data. I think we need to make decisions.
    Dr. Shah. We will make the data available. Absolutely.
    Senator Flake. We will have access to each of these tweets 
or messages that were sent out by USAID or its contractors.
    Dr. Shah. You will have access to what we are able to 
gather. Absolutely.
    Senator Flake. Because my concern is, you know, we had 
programs like this dating back--I am not pointing fingers at 
this administration. I think this administration has done some 
good things in further broadening allowable travel--allowable 
categories for travel. So I applaud this administration for 
doing that, much better in my view than the last 
administration, the Republican administration, in this regard.
    But the last administration had, for example, for a while a 
ticker at the U.S. interest section in Cuba where messages were 
put up that were really--the only way to describe them 
charitably was juvenile. It would chide the Cubans for not 
providing school lunches for their kids when those were 
provided in Miami, for example. It was just juvenile things 
that I do not think served anybody's purposes. And this seems 
to smack of that.
    Dr. Shah. Sir, I cannot really speak to what the 
administration----
    Senator Flake. No, no, no. But I was saying we are 
continuing with things like that. It smacks of that kind of 
program. I am not making a political point, Republican versus 
Democrat. I am just saying our policy is wrong.
    Let us simply allow Americans to travel to Cuba, and we 
would achieve in my view--and this is not your call to make. It 
is ours in Congress, but I think if we have the information 
from this program to actually review it and then make a 
decision, do we want to continue to fund programs like this 
that in my view might put USAID contractors or individuals from 
other countries, including Cuba, that participate in this 
program in danger for what? I am not sure what we get out of 
this. Allow Americans to travel, allow them to take flash 
drives, allow them to actually go and do good instead of 
saying, no, you cannot travel. We are going to shield the Cuban 
Government from the influences that come with American travel. 
And I do not see American travel as some kind of a reward for 
good behavior on behalf of the Cuban Government. We are 
unlikely to see that. It is finally a get-tough policy in my 
view with the Cuban Government.
    My time is well spent.
    Dr. Shah. Senator, I would just----
    Senator Flake. I appreciate the indulgence, but if the 
chairman wants you, go ahead.
    Dr. Shah. If I may just say the fiscal year 2014 language 
is very clear about the purpose and authorization for these 
programs, as well as which agencies should be in the lead for 
their implementation. And we intend to follow the law. In that 
case, it transitioned some of those efforts to the National 
Endowment for Democracy. There is a larger policy debate here, 
but I just want to come back to assuring you that we believe 
our implementation in the past of these programs has been 
consistent with the law in that these are not covert. They have 
been publicly notified a number of times.
    The Chairman. Thank you, Senator.
    Administrator, do you conduct Internet access programs in 
other countries in the world?
    Dr. Shah. We do at the direction of specific language in 
the congressional----
    The Chairman. Do you have any idea of how many those are?
    Dr. Shah. Part of what we do everywhere around the world--
and Internet access can be one component of it--is supporting 
civil society's ability to stay safe and productive online, 
which allows for an open and inclusive approach to development 
in a number of different contexts.
    The Chairman. Because a society that can come together and 
share what its goals are is part of the information as to what 
sustainable programs we might be able to support.
    So I would like you to give the Chair a list of all the 
Internet access programs you conduct. I may ask you for the 
same thing Senator Flake has asked for, all of those programs, 
because it seems to me we are either going to judge whether we 
are going to be supportive of Internet access in the world or 
not. I think it is consistently unfair that one set of 
democracy programs has the greatest scrutiny of the Federal 
Government in the absence of all others. So as the authorizing 
committee, I think we want to see what is happening across the 
entire spectrum, and I would ask you to give me information 
about all of those programs, and all of the programming of 
those programs, and all of the tweets and all of the emails and 
everything so that we can make an informed judgment here.
    And the Chair is of the view, as the authorizing committee, 
that either we believe in these programs collectively--which I 
generally think I do--in which case we will support it and not 
pick and choose which country deserves openness and which 
country does not as it relates to Internet access, and whether 
or not USAID is the appropriate entity.
    I think as part of its overall development program, the 
democracy programs that have been run by USAID are critical. 
And so I am not one to advocate having USAID to all of a sudden 
be stripped of its democracy programs because democracy 
programs in and of itself, generally speaking--maybe they are 
in some open societies in which we seek to strengthen 
democratic institutions, but there are many in which they are 
not, which is why we are having democracy programs in the first 
place. These are not governments that are receptive at the end 
of the day. They are governments that oppose.
    Just as the Voice of America and a whole host of other 
surrogate broadcasting was meant to try to create open 
information to people in different parts of the world, it seems 
to me that what we are trying to do is that for which we have a 
global perspective--an understanding of the value of those 
programs and a commitment to it. Those commitments should not 
be decided by picking and choosing which country we somehow 
like and which countries we do not. If they fail to provide 
their people access to the basic flow of information, it seems 
to me that we should be pursuing it.
    So I would like the information on all the programs.
    Also, let me just say I would like to get a full sense of 
all your democracy programs beyond the Internet because we want 
to judge all of those in context as well.
    And maybe I will ask for GAO Inspector General reports on 
some of them because there is, in my mind, a siege mentality. I 
respect that there is a difference of opinion as to what our 
policy should be. What I do not respect is the siege upon one 
part of our democracy programs to the exclusion of all others. 
So that is something that we are going to have a full spectrum 
analysis of.
    Senator Flake, did you have something?
    Senator Flake. Yes. I was just going to clarify. This 
particular program was not to provide Internet access. It was 
social media content within the access that already exists. 
Right?
    Dr. Shah. This program was designed to provide access to 
information and create a platform for people to communicate.
    Senator Flake. Right, but it did not provide Internet 
access to any Cuban who did not have it before. Correct?
    Dr. Shah. The program was a communications platform to 
enable Cubans to provide their own content. We did not provide 
Internet access. The Zunzuneo project was an effort to 
facilitate communication among Cubans so they could connect 
with each other.
    The Chairman. Clearly, it was a basis which did not exist, 
because people flocked to it when they had the opportunity. If 
they had some other venue, they would have used some other 
venue.
    You know, there is telephone access inside of Cuba. 
Telefonica of Spain has it. The problem is that the regime 
blocks the access to both the Internet and to these platforms. 
And so that is the challenge of a regime, as other regimes in 
the world that simply do not want to allow its people to have 
information, because when they have information, they may 
suddenly decide to make choices, or to peacefully protest, or 
to try to create change in their government. We look at Turkey 
and what it is doing, and how the world has come down on Turkey 
for what is happening there. We look at Iran and what has 
happened there. We look at China and the challenges there. And 
we condemn those; but in Cuba, somehow the Cuban people do not 
deserve that flow of information.
    So we are going to have a broad range of judgment here.
    One final note. I know that Senator Flake has a different 
view, and Senator Durbin expressed some of that too.
    But the problem is that when you do travel to Cuba--and 
there are millions of people going to Cuba. Millions--the 
Europeans, Latin Americans, Canadians, and others. Yet the 
regime has become not less repressive, but more repressive and 
more selective. And when you travel there, you end up feeding 
who? Unfortunately, not the Cuban people, but the regime. Why? 
Through its company Gamesa--which is basically owned by the 
military and Raul Castro's son--the entities by which those who 
visit and largely stay at are either a foreign partner, in 
which Gamesa is the other side, or totally owned by the 
military through a front company. So we ultimately feed the 
regime versus feed the people.
    So this is a legitimate debate. We have different views. 
But what should not be a debate, in my view, in this context is 
the nature of our democracy programs and creating access to 
information for people anywhere in the world.
    With the thanks of the committee, we will keep this record 
open for questions to the end of tomorrow, Friday.
    And this hearing is adjourned.
    [Whereupon, at 11:05 a.m., the hearing was adjourned.]
                              ----------                              


              Additional Material Submitted for the Record


  Letter and Prepared Statement Submitted by Lions Clubs International

                                                     April 4, 2014.
    Dear Chairman Menendez and Ranking Member Corker: On behalf of the 
World's largest service organization, Lions Clubs International, I 
would like to submit our testimony for the record for the upcoming 
hearing entitled, ``International Development Priorities in the FY 2015 
Budget.'' (See attachment.)
    This testimony provides our strong support for foreign development 
programs that are of significant importance for millions of people 
around the world. Lions Clubs International is dedicated to the cause 
of eliminating poverty on a global basis through humanitarian, health-
related, nutrition, literacy, and poverty-focused development programs 
and assistance on a global basis, and we urge Congress to invest 
robustly in the following programs under the jurisdiction of this 
subcommittee:

   USAID Developmental Assistance to eliminate poverty in 
        developing nations;
   USAID Global Health Bureau (including the Office of Health, 
        Infectious Diseases and Nutrition and sight-saving activities 
        such as vaccination in child and maternal health, nutrition, 
        vulnerable children, malaria, tuberculosis and neglected 
        tropical disease);

    As well as maintained funding for vital accounts that provide 
disaster, refugee and food assistance to world's most vulnerable 
populations.

    We appreciate your consideration of our testimony.
            Sincerely,
                                              Wayne Madden,
                            Immediate Past International President.

ATTACHMENT

  Prepared Statement of Wayne A. Madden, Immediate Past International 
               President, Lions Clubs International (LCI)

    As the Immediate Past President of the world's largest service 
organization (with 1.4 million members in over 206 countries including 
345,000 in the United States), I commend the Chairman and Ranking 
Member of the Senate Committee on Foreign Relations for holding this 
hearing entitled, ``International Development Priorities for the FY 
2015 Budget.'' This is an important opportunity to explore how we can 
provide strong support for foreign development programs that further 
America's interests while improving millions of lives in the developing 
world.
    Lions Clubs International is dedicated to providing humanitarian, 
educational, and health-related development assistance on a global 
basis, and I urge the Committee to provide robust support for programs 
under the jurisdiction of this subcommittee: USAID Developmental 
Assistance that foster a wide variety of solutions to help end extreme 
poverty around the globe; USAID Global Health Bureau (including the 
Office of Health, Infectious Diseases and Nutrition and sight-saving 
activities such as vaccination in child and maternal health, nutrition, 
vulnerable children, malaria, tuberculosis and neglected tropical 
disease); as well as maintained funding for vital accounts that provide 
disaster, refugee and food assistance to world's most vulnerable 
populations.
    Lions Clubs and its charitable arm, Lions Clubs International 
Foundation (LCIF), support and develop international programs and high 
impact initiatives that serve people who are overwhelmed by poverty, 
hunger, and disease. Founded in 1968, LCIF has also been a world leader 
in serving the vision and hearing needs of millions of people in 
America and around the world. The foundation works collaboratively with 
many NGOs and intergovernmental organizations such as the World Health 
Organization, to accomplish shared humanitarian goals. In 2012-2013, 
LCIF awarded 489 grants totaling $39.2 million and in 2011-2012, LCIF 
awarded 513 grants totaling more than $55 million.
    Our members, with the support of the foundation, focus initiatives 
to address many complex global challenges including measles and 
rubella, diabetes, tropical diseases that result in blindness, as well 
as natural disasters. Meeting these challenges in an increasingly 
changing world requires strong partnerships between the Federal 
Government's foreign assistance programs and global development 
partners in the nonprofit sector. This is especially true within 
vulnerable populations where the need is very high.
                  global humanitarian/disaster relief
    Lions Clubs International and the foundation support Lions member's 
relief efforts within communities immediately following natural 
disasters. Lions club members are always available to provide basic 
necessities such as food, water, clothing and first aid supplies 
through its Emergency grant program. To date, more than 3,700 Emergency 
grants have been provided. In the last 10 years alone, over $100 
million in disaster-related grants have been awarded to address 
immediate and long-term needs for victims following disasters.
    LCIF and Lions around the world have played key roles in some 
recent relief efforts. Lions Clubs International Foundation directly 
provides funds to local Lions to implement disaster relief aid. Lions 
were among the first to respond during both the 2011 Joplin, Missouri 
tornado and the 2013 tornado that destroyed Moore, Oklahoma. The Lions 
worked with local social service organizations, churches, food banks 
and shelters to address the needs of those displaced by the disasters. 
Because Lions live in the communities they serve, they have a permanent 
presence in helping to restore and rebuild these communities.
    LCIF is presently working with Lions in the Philippines to address 
victims' needs following the November 2013 typhoon, which impacted more 
than 9 million people. This local effort is supported by the 380 Lions 
clubs and 12,600 Lions members in the Philippines. LCIF, with the help 
of Lions members from around the world has mobilized more than $2 
million for the Philippines disaster relief; in addition to providing 
critical supplies--hundreds of tents for temporary shelter and water 
purification units. Lions Clubs International Foundation's history in 
disaster relief includes $21 million in funding for the Japan tsunami 
disaster relief effort; $15 million for the South Asia Tsunami; $6 
million to Haiti in the aftermath of its earthquake; and $3 million for 
the China Earthquake. We urge our Federal partners to collaborate with 
NGOs whenever possible to maximize the impact of this aid.
    lions' sightfirst programs--the need to combat global blindness
    Initiated in 1990, SightFirst is the Lions humanitarian initiative 
to combat blindness on a global scale. SightFirst has prevented serious 
vision loss for more than 30 million people around the world. 
Accomplishments of SightFirst include: saving the sight of millions of 
people at an average cost of $6 per person; establishing hundreds of 
need-based Lions eye care centers around the globe that provide sight 
restoration and eye care services; provided treatments to millions of 
people for river blindness in Africa and Latin America; establishing 34 
childhood blindness centers around the world; and training more than 
675,000 eye care specialists to provide better or expanded care.
                 vaccines and immunization for children
    Lions Clubs International strongly supports efforts to improve 
life-saving vaccination of children in more than 70 of the world's 
poorest countries. Each year 22 million children in poor and remote 
communities do not have access to the most basic vaccines. One in five 
of all children who die before the age of five lose their lives to 
vaccine-preventable diseases. In fact, we have recently joined forces 
with the GAVI Alliance (a public-private partnership to increase access 
to immunizations in poor countries) to raise $30 million toward 
improving life-saving vaccines for tens of millions of children in the 
fight against measles.
    We urge the committee to consider its support for vital 
immunization programs where a small investment can lead to dramatic 
improvement in peoples' lives.
                           cataract blindness
    Cataracts are the leading cause of blindness in the world as 20 
million people experience cataract blindness (representing 51 percent 
of all cases). Access to cost-effective cataract surgeries, (proven to 
be one of the most affordable surgical interventions in the world 
according to WHO), corrects this problem and reverses needless 
disability, must be improved, especially in underresourced countries. 
The SightFirst program awarded $7.16 million in grants to combat 
cataract blindness, including funds that underwrote 7.84 million sight-
restoring surgeries. Our current focus is on supporting comprehensive 
eye care solutions through equipment upgrades, facilities improvement, 
human resource training and hospital management courses. The Federal 
Government can make a positive impact on this global problem by drawing 
attention to human resource and capacity needs in developing countries, 
and supporting innovative and cost-effective programs and institutions.
                      neglected tropical diseases
    Lions clubs are working toward the elimination of neglected 
tropical diseases like onchocerciasis (river blindness) and trachoma, 
the world's most prevalent form of infectious causes of blindness, as 
public health threats. We support the important work of the World 
Health Organization, The Carter Center, other international NGOs and 
partner governments to bring needed therapies to impacted communities. 
The U.S. Government, through USAID and other agencies, has been an 
international leader in this fight. Thanks to this leadership, other 
governments, multilateral agencies and donors have mobilized 
significant resources and there is now hope that these diseases, and 
other neglected tropical diseases, will be eliminated as public health 
threats in the very near future. We commend Congress for its past and 
current support and call for the maintenance of current allocation 
levels so that the important work being conducted in the field is not 
interrupted.
                       lions quest youth programs
    Over the past 30 years, 13 million young people in 86 countries 
have benefited from LCIF's principal youth program, Lions Quest. Lions 
Quest is a comprehensive social and emotional learning (SEL) youth 
development program that promotes character education, bullying 
prevention, drug awareness, and service-learning. Lions Quest also 
promotes a caring, well-managed, and participatory learning environment 
that allows students to develop 21st century life skills through 
quality educator training. More than 550,000 educators have been 
trained in Lions Quest curriculum and methodology around the world 
equipping students with essential life skills to be successful, well-
adjusted adults. Lions Clubs International Foundation has supported 
Lions Quest program implementation since 1984 through a total of $20 
million in grant funding along with volunteer school support from Lions 
locally.
    Today we face great humanitarian challenges, and Lions Clubs 
International understands the importance of foreign development 
assistance as well as the ethic of service in addressing ever-expanding 
global health, development, literacy, nutrition, and disaster-relief 
crises. Our success shows what the service sector can do for economic 
and social development, and we look forward to working with you and 
your colleagues on taking up the important challenge of increasing 
global health and humanitarian services.
    Thank you. We appreciate the opportunity to provide our 
perspective.
                                 ______
                                 

               Responses of Dr. Rajiv Shah to Questions 
                    Submitted by Senator Bob Corker

    Question #1. In some respects, building local capacity is the most 
important objective of development aid, and I support the effort. But 
in an examination of USAID Forward's Local Solutions requirement that I 
have asked for from GAO, they observed that USAID uses only obligations 
of funds--which is planned spending-- 
as an indicator of program performance or success. Even if USAID were 
collecting actual disbursement of funds to local institutions, simply 
measuring money spent does not seem to provide an indication of whether 
we are improving aid or not, or whether the programs we fund as a 
consequence are providing real, long-term solutions to real problems.

   (a). What is the measure of success for Local Solutions?

    Answer. The ability of local systems to produce desired outcomes 
over time--in other words, the realization of truly locally led 
sustainable development--is how USAID defines the success of Local 
Solutions. If the objective of Local Solutions was only results 
delivered, the focus would be on whether to implement through 
international partner X or local partner Y and which is more cost 
efficient. However, to have results that sustain requires a different 
approach: engaging with a range of actors effectively and efficiently 
to achieve a mutual objective which is set not only by USAID, but also 
by the very people we aim to assist.
    USAID has many examples of such inclusive, networked approaches to 
sustainability, including Feed the Future and Power Africa. Within the 
Agency's work toward ending preventable child and maternal deaths, we 
foster local solutions from idea through to implementation, such as our 
``Saving Lives at Birth: A Grand Challenge for Development,'' an 
initiative which engages participants from around the world, and 
through which we have invested in 59 global health innovations. For 
example, we supported randomized control trials and feasibility studies 
demonstrating that an antiseptic called chlorhexidine could cut infant 
mortality by 23 percent. In Nepal, we partnered with a local 
pharmaceutical company and community health workers to deliver the 
life-saving antiseptic free of charge to expectant mothers. Today, 
efforts to introduce the antiseptic are underway in 15 other 
countries--far exceeding expectations.
    USAID will use ex-post evaluations to measure the connection 
between desired outcomes and the broader development impact at the 
project level and within the broader system. These evaluations will 
examine whether the results of a given project continued to be 
sustained several years after the project's conclusion; the effects 
that project has had on the local system in which it was implemented; 
the extent of country ownership present; and the cost-effectiveness of 
the project relative to its long-term effects.

   (b). Other than obligations, are there other specific types 
        of outcome indicators USAID will collect to show that we are 
        successfully building sustainable local capacity and not just 
        increasing local spending?

    Answer. The recently released Local Systems Framework explains why, 
if our objectives are to support development that sustains, we need to 
use and strengthen not only local actors, but also the broader systems 
in which we engage. It is providing the framework for developing 
measures of the strength of local systems.

   (c). Will you be able to clearly demonstrate greater value-
        for-money through Local Solutions than what it replaces? How so 
        and in what timeframe would you anticipate being able to do so?

    Answer. We believe that developing strong, local systems through 
the use of local partners is an astute investment strategy. The value-
for-money proposition is that not only will a given approach yield 
results, but that the local systems will be able to produce these 
desired outcomes over time and will sustain such results using their 
own resources. A market test for determining this will be through ex-
post evaluations which will examine the impact of our programs over an 
extended period of time. The first of these evaluations is planned for 
our basic education programs. We believe that these efforts will 
confirm our hypothesis that the Local Solutions approach is both more 
efficient and effective; i.e., will deliver greater value-for-money 
than solely delivering specific inputs to an individual partner. Given 
the recent approval of the Local Systems Framework and the normal 5-
year lifecycle of a given strategy and program investment followed by 
ex-post evaluation, we expect to demonstrate significant improvements 
in organizational strength relative to results delivered by key local 
actors in 5 years and significant improvements in systems strengthened 
relative to results delivered by key local actors in 7 years.

    Question #2. GAO found that USAID has expanded the definition of 
Local Solutions in order to include things such as direct budget 
support to Jordan, aid to Pakistan and Afghanistan, and contributions 
to certain trust funds. They also found that USAID has backed-out 
headquarters costs from calculations of the denominator. GAO found that 
the changing definitions or uncertainty around what is counted makes it 
difficult to understand how much progress you are making toward the 30 
percent target and might give the impression of cooking the books a 
bit.

   (a). Does USAID intend to clarify its definition of what's 
        included and report progress based on a consistent and clear 
        definition of what is considered to be a Local Solution?

    Answer. From fiscal year 2010 until present, USAID has consistently 
based the Local Solutions indicator on mission program funds obligated 
to partner-country local organizations. The set of countries includes 
all missions where we have a full presence and has remained the same 
since FY 2010. It has always been USAID's intention to include every 
obligation that meets the definition of ``local'' in calculating the 
indicator. To be considered ``local'', funds have to be directly 
managed by a local entity. Over time, we have learned from our 
experience and have broadened the types of implementing mechanisms 
(such as government-to-government agreements, contracts, grants, 
cooperative agreements, cash transfers and qualifying trust funds) that 
qualify in meeting the definition of ``local'' used for the indicator. 
To ensure transparency and consistency with initial figures, USAID has 
reported the indicator with and without cash transfers and qualifying 
trust funds.
    Excluding cash transfers and qualifying trust funds, the percentage 
of mission program funds obligated for Local Solutions in the core set 
of missions where we have a full presence has risen from 9.6 percent in 
FY 2010 to 17.9 percent in FY 2013.

   (b). Does USAID count cash transfers in the overall 
        percentage considered to be a Local Solution?

    Answer. As explained above, USAID reports the figure with and 
without cash transfers and qualifying trust funds. Cash transfers and 
qualifying trust funds are included in a footnote on the data tables 
published on our Web site https://www.usaid.gov/usaidforward.

   (c). What kind of accountability processes and performance 
        measures do we have in place for those cash transfers?

    Answer. All cash transfer assistance programs undergo a 
certification process prior to initiation. This includes verification 
and validation that specified requirements (e.g., controls, procedures) 
are in place before the program begins. As part of the verification 
process, USAID typically conducts assessments to assure that the 
recipient government has the systems, policies, and staff required to 
manage such assistance and has put in place the monitoring and 
evaluation systems required to ensure that assistance is used for 
intended purposes. USAID also ensures that the recipient government 
will conduct any USAID funded procurements using competitive 
procedures; is taking steps to publicly disclose on an annual basis its 
national budget; and USAID does not assume or fail to treat as risk 
any, even minimal, levels of fraud or corruption--all of these 
requirements consonant with good development practice and legal 
requirements.
    In a typical cash transfer program, funds are deposited in a single 
tranche into a U.S. domiciled, interest-bearing bank account, and are 
not commingled with other funds. Details on the destination bank, 
account number, and confirmation procedures are specified in one or 
more implementation letters prepared in connection with the cash 
transfer agreement. The recipient government is then required to 
transfer the U.S. dollars to a separate account within the respective 
country, typically within 24-48 hours so that interest does not accrue. 
The recipient government then holds the transferred funds in a separate 
dollar-denominated account--not commingled with other funds--until 
expended. To withdraw or transfer these funds, the recipient government 
must obtain prior written authorization from USAID. To ensure 
appropriate performance and oversight of the program, USAID receives 
third-party access rights to the account into which cash transfer 
proceeds are disbursed.

   (d). How would Trust Funds managed by international or 
        multilateral organizations be considered ``local''?

    Answer. Trust funds are established when funding from multiple 
sources are pooled and made available to support development 
activities. In those instances where the trust fund is managed directly 
by a government department or ministry, the USAID contribution to the 
trust is deemed an investment in local systems. Trust funds managed by 
an external entity, for example the World Bank, through a project 
implementation unit, are considered nonlocal.

    Question #3. Does the increased use of local partners represent a 
greater or lesser exposure to risk for the taxpayer in terms of 
accountability? How so?

    Answer. USAID welcomes the emphasis on accountability and ownership 
and believes these are inextricably linked to effective development. If 
the objective is to deliver sustainable development, then USAID is 
convinced that using, strengthening, holding accountable and partnering 
with local partners and systems is the most effective strategy for 
reducing risk for USAID's investments on behalf of American taxpayers.
    Earlier this year, USAID issued the Local Systems Framework that 
outlines four specific types of risk for the taxpayer in terms of 
accountability:

          (1) Fiduciary--The possibility that the misuse, mismanagement 
        or waste of funds adversely affects the realization of 
        development outcomes;
          (2) Contextual--The possibility that various occurrences 
        particular to a specific area or context adversely affect the 
        realization of development outcomes. Examples include risks of 
        a natural disaster or civil unrest;
          (3) Programmatic--The possibility that flaws in the way a 
        project is designed or implemented adversely affect the 
        realization of expected outcomes; and
          (4) Reputational--The possibility that a loss of credibility 
        or public trust resulting from how a project is implemented or 
        the choice of partners adversely affects the realization of 
        development outcomes.

    USAID has developed a series of tools that assess these risks. They 
include the Public Financial Management Risk Assessment Framework 
(PFMRAF), which specifically examines the fiduciary, political, 
contextual and reputational risks of providing direct assistance 
through local governments to achieve stated objectives, and requires a 
senior official to approve use of the partner country systems before 
any award to local governments. USAID also examines the risks 
associated with making awards, including making a ``responsibility 
determination'' before any award to nongovernmental partners, be they 
local or international. USAID uses both international and local 
independent public accounting firms as well as our own financial 
analysts to conduct these pre-award responsibility determinations. Our 
financial analysts conduct regular financial reviews and pre-award 
surveys on local organizations. Finally, through our project design 
process, we carefully examine the contextual and programmatic risks 
associated with different technical, institutional, and other 
approaches and seek to determine which will provide the greatest value-
for-money, coupled with an appropriate level of accountability and 
sustainability, for the use of taxpayer resources.
    We also mitigate financial risk and account for U.S. funds through 
oversight and monitoring by:

   Establishing Regional and Bilateral Inspector General field 
        offices;
   Providing training to public accounting firms and to the 
        host government Supreme Audit Institutions (SAIs) on conducting 
        audits of U.S. Government (USG) funds. There are a number of 
        host government SAIs who are conducting financial audits of USG 
        funds provided to their government entities;
   Expanding investigatory coverage along with providing fraud 
        awareness briefings and building the capacity of the government 
        in this area;
   Supporting oversight from the U.S. Inspectors General and 
        Government Accountability Office (GAO);
   Using our financial analysts to conduct financial audits of 
        funds provided to host government and nongovernmental 
        organizations;
   Having our Controller's office provide training to new and 
        current NGOs on Financial Management, Program Management, and 
        internal controls; and,
   Having conditionality and other types of guidance that will 
        mitigate the risk associated with implementing programs through 
        local institutions.

    These assessment and design tools as well as oversight and audit 
mechanisms help to ensure good stewardship of the American people's 
funds.
    Additionally, USAID fosters accountability for its investment 
inclusive of local partners and local systems through increased 
transparency, evaluation, and learning which provide the feedback loop 
that strengthens public engagement in order to improve program results. 
We report on how our funds related to local solutions are spent. We 
conduct independent evaluations of projects that include local partners 
and local systems in order to measure not only simple outputs (such as 
number of teachers trained or wells drilled) but also outcomes (such as 
improved reading skills or reduced disease burden) that help us to 
determine which programs provide the greatest value for money, and how. 
Finally, we are taking the lessons learned and feeding them back into 
the system to improve program design and guide spending decisions.
    ``Ownership'' is both a result of accountability and a prerequisite 
for it. USAID's local partners will not feel responsible for making 
programs work if they are not part of the decisionmaking process, and 
they cannot be part of the decisionmaking process without detailed 
information about our aid budgets, plans, and activities. Past 
performance shows that taking into consideration the views and 
capabilities of local partners and beneficiaries, and engaging them in 
program implementation is critical for cost-effective, sustainable 
development. Ultimately, our goal is for developing countries to become 
self-reliant, with governments that answer to the people and vibrant 
economies that expand opportunities and hope for all--especially women 
and others who have been marginalized and excluded. To succeed in this 
effort we must heed local priorities, use local systems, and leverage 
local resources. Development investments rooted in accountability, 
local ownership, and sustainability are the soundest strategy for 
reducing risk to the American taxpayer.

    Question #4. As I mentioned in the hearing, USAID's ``Trade 
Capacity Building Database'' Web site lists 24 U.S. agencies, 
departments, and independent foundations as providing U.S. funded trade 
capacity-building assistance.

   (a). Who or which U.S. Government agency is ultimately 
        responsible for ensuring that trade capacity-building aid 
        throughout the government is spent wisely and achieves the 
        administration's goals?

    Answer. There is no single coordinating agency for trade capacity-
building (TCB) activities. Each agency has its own processes for 
ensuring proper and effective programming of its appropriated funds. 
USAID, as the largest provider of TCB assistance, coordinates closely 
with the U.S. Trade Representative (USTR), Departments of State, 
Treasury, Agriculture, Labor, and other trade-related agencies in 
prioritizing TCB efforts. USAID is a member of interagency processes 
such as the USTR-led Trade Policy Review Group (TPRG) and its Trade 
Policy Staff Committee (TPSC). USAID is informed by the interagency 
discussions in the TPRG/TPSC process, and takes such information into 
consideration when developing its programs to support USG policy 
priorities and to advance development goals established by USAID 
missions in consultation with host country and U.S. stakeholders.
    In the Presidential Policy Directive (PPD) on Global Development 
released on September 22, 2010, the President laid out a modern 
architecture to raise the importance of development in our national 
security policymaking and to generate greater coherence across the U.S. 
Government. The PPD highlighted that ``through existing policy 
mechanism (e.g., trade policy through the United States Trade 
Representative's Trade Policy Review Group, etc.), an assessment of the 
``development impact'' of policy changes affecting developing countries 
will be considered.'' Utilizing this channel for TCB discussion ensures 
alignment with USG goals and provides interagency transparency and 
awareness as a degree of oversight.

   (b). Who is in charge of the process that determines where 
        trade capacity-building money will be directed? Is it an 
        interagency process? And does that person or group of people 
        have specific or explicit authorities? How are they held 
        accountable for performance?

    Answer. For funding requested for USAID and the Department of 
State, the Department of State's Office of U.S. Foreign Assistance 
Resources (F) ensures the strategic and effective allocation, 
management, and use of foreign assistance resources. In order to ensure 
that foreign assistance is used as effectively as possible to meet our 
broad foreign policy objectives, F oversees a coordinated strategy 
development process, including multiyear, country specific, whole of 
government Integrated Country Strategies and annual country-specific 
foreign assistance operational plans. Included in the Integrated 
Country Strategies are the USAID-specific objectives developed through 
the Agency's Country Development Cooperation Strategies (CDCS) and the 
Regional Development Cooperation Strategies (RDCS) which include input 
from both U.S. and host country stakeholders. Resource requests are 
informed by these strategies and annual performance reporting, which 
tracks progress made toward foreign assistance objectives. Through 
these processes, USAID determines and accounts for its trade capacity-
building assistance for individual countries.

   (c). Given our budget realities, we must be especially 
        focused on prioritization of resources. How do you decide where 
        to spend trade capacity building money to ensure it will do the 
        most good? For example, do you prioritize certain countries 
        because they are best positioned to implement the trade 
        capacity-building aid we provide, and can you provide a 
        specific example?

    Answer. Decisions regarding resource allocation take into account a 
multitude of factors, including some or all of the following: host 
country capacity, host country development priorities, identification 
of ``binding constraints'' to sustainable economic growth (through the 
Inclusive Growth Diagnostic framework), participation in a free trade 
agreement or multilateral agreement, activities of other donors and 
stakeholders, U.S. strategic interests and availability of nondirective 
funds that could be used for trade capacity-building. Many countries 
which have received USAID trade capacity-building are considered TCB 
success stories. For example, significant technical assistance and 
trade capacity-building was provided as an integral part of the trade 
negotiations that led to the Dominican Republic-Central America-United 
States Free Trade Agreement (CAFTA-DR) with five Central American 
countries (Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua) 
and the Dominican Republic. U.S. trade capacity-building support to 
Vietnam over many years led to the successful implementation of the 
U.S.-Vietnam Bilateral 
Trade Agreement and subsequently, to Vietnam's accession to the World 
Trade Organization.

    Question #5. What are the administration's specific benchmarks for 
success for trade capacity-building aid? Do you have targets for the 
program toward which 
the agencies involved have to work and do we have a way to measure 
agencies' performance?

    Answer. The President's Trade Policy Agenda outlines trade policy 
priorities, including helping developing countries to build capacity to 
harness the power of trade, that are the focal point of all trade-
related activities. The ultimate goal of development assistance, 
including trade capacity-building, is to graduate countries from 
requiring U.S. foreign assistance.
    For USAID and the Department of State, there are a set of standard 
indicators developed through an interagency process which included 
input from the broader development community and external stakeholders. 
These indicators are used to measure what is being accomplished with 
foreign assistance. Annual targets and results are required for 
applicable indicators. Additionally, ``Trade Capacity Building'' is a 
``Key Issue'' in assistance operational plans and annual performance 
reporting, requiring operating units receiving funds for such 
activities to provide detailed information on their program plans and 
performance.

    Question #6. (a). Do you work with the business community in 
developing your plan for the most effective use of U.S. assistance 
resources?

    Answer. Partnering with the private sector is a key component of 
USAID's strategy to achieve long-term, sustainable development impact. 
We must collaborate with and support the institutions, private sector 
partners, and civil society organizations that are engines of growth 
and progress for their own nations.
    Through our decade of alliance building, we know that effective 
partnerships not only widen the funnel of ideas and assets which are 
channeled toward addressing development issues, but also foster 
private-sector-led growth in developing countries. We work 
collaboratively with the private sector to improve the business 
environment in developing countries; promote sustainable and inclusive 
business practices; and help companies find growth and investment 
opportunities in sectors critical to development.
    USAID works with the business community in a number of ways:

   Sharing knowledge, data, research and ideas to cross-
        pollinate expertise, further understanding of development 
        challenges across both parties and identify areas of alignment 
        between USAID objectives and the objectives of private sector 
        actors in the countries in which we work;
   Building public-private partnerships with local and 
        international companies, as well as business associations and 
        other private sector entities;
   Providing guarantees to unlock local capital for sustainable 
        growth;
   Offering field support, industry expertise and country-
        specific knowledge to help facilitate sustainable investment 
        opportunities in developing countries;
   Providing financing to find and test cost-effective, 
        scalable development solutions through a venture capital style 
        grant competition; and
   Engaging with the private sector as strategic partners in 
        advancing our Presidential Initiatives in the areas of food 
        security, global health, climate change, and energy.

   (b). What is the process for seeking the private sector's 
        input?

    Answer. The Center for Transformational Partnerships within the 
U.S. Global Development Lab supports USAID missions and bureaus in 
developing the skills needed and understanding the best processes for 
engaging the private sector in USAID's work. A key tenet of this work 
is that it is important to engage the private sector in providing input 
to our work throughout the USAID program cycle--from strategy 
development through program design, implementation, and evaluation.
    USAID's Automated Directive Systems (ADS) 201 policy on Planning 
provides missions with guidance on how to engage the private sector 
across the full program cycle--particularly as missions are developing 
their Country Development Cooperation Strategies (CDCS). The guidance 
notes that:

   ``An analysis of local public and private organizations 
        (government, civil society and private sector entities), and 
        how the mission plans to support the capacity development of 
        these entities should inform the CDCS.''
   ``The mission should apply Aid Effectiveness principles by 
        linking CDCS Goals and DOs/IRs to partner country priorities, 
        including its sector or regional plans. Partner country 
        priorities, however, are not determined exclusively by the 
        partner country government. The mission should also consult 
        with private sector actors, local communities, civil society 
        organizations, as well as a range of political actors and 
        government officials at the national, regional, and local 
        levels.''
   ``Within 2 months of CDCS approval, the mission must prepare 
        a public version that removes all budget, procurement, and 
        sensitive information. . . . The public version [of the CDCS] 
        also provides the basis for dialogue with partner country 
        partners and other stakeholders in the private sector as the 
        mission moves forward in project design.''

    Further information in the ADS provides 11 detailed steps for 
project design, which include both stakeholder analysis and defining 
strategic partners for USAID projects, through consultation with public 
and private sector stakeholders. The Center for Transformational 
Partnerships also provides missions with a toolkit called ``Tools for 
Alliance Builders'' as well as virtual and in-person consultation to 
help missions seek and incorporate private sector input into our work 
in a way that is designed to deliver development impact better, faster, 
cheaper and more sustainably.

   (c). If so, would you provide an example where private 
        sector input modified your proposed use of USAID resources or 
        assets.

    Answer. Developing economies now account for over half the world's 
economic output and represent many of the fastest growing markets, 
customer bases and workforces. As a result of the changing global 
landscape, U.S. companies are increasingly looking at development as a 
core strategy issue, rather than a matter of corporate philanthropy. A 
U.N. Global Compact Survey of over 1,000 global CEOs, from 27 
industries across 103 countries found that 93 percent believe that 
sustainability issues will be critical to their company's future 
success. And 78 percent of CEOs believe that companies should engage in 
industry collaborations and multistakeholder partnerships to address 
sustainability and development goals. This creates continued 
opportunities for USAID to work collaboratively with companies and 
investors to design and promote market-led development.
    In the past 12 years, USAID has built over 1,500 alliances 
involving more than 3,500 unique partner organizations--in the majority 
of these partnerships, private sector partners have brought their 
expertise, knowledge, and ideas to bear to shape USAID projects to 
deliver development results more effectively, more quickly, more 
efficiently and/or more sustainably--and through strong interest from 
private sector partners, we expect to continue to expand our 
collaborative work with the private sector in the coming years.
    Global Development Alliances (GDAs) are USAID's premiere model for 
public-private partnerships, helping to improve the social and economic 
conditions in developing countries and deepen USAID's development 
impact. GDAs combine the assets and experiences of the private sector--
corporations, foundations, nongovernmental organizations (NGOs), 
universities, local businesses and diaspora groups--leveraging their 
capital and investments, creativity and access to markets to solve 
complex problems facing governments, businesses, and communities. When 
successful, the resulting alliances are both sustainable and have 
greater impact. GDAs are codesigned, cofunded, and comanaged by all 
partners involved, so that the risks, responsibilities, and rewards of 
partnership are shared.
    A 3-year partnership between DuPont, the Government of Ethiopia, 
and Feed the Future is working to increase maize productivity by 
helping more farmers adopt improved seed varieties, reduce post-harvest 
losses, expand access to credit and inputs, and build the capacity of 
extension services to disseminate skills and best practices to 
Ethiopian maize farmers. By training smallholder farmers to use higher 
quality inputs and production techniques, the program aims to help them 
transition from subsistence to self-sustaining farming operations.
    In Central America since 2006, and more recently in Asia and 
Africa, the U.S. Government is partnering with Walmart to train tens of 
thousands of farmers, including large percentages of women, on fruit 
and vegetable production. These trainings increase yields and improve 
quality and enable farmers to sell produce to Walmart and other 
retailers, leading to better livelihoods and expanded opportunities for 
women. Walmart's corporate buyers provide a consistent source of demand 
that empowers farmers to invest for the long term. Walmart benefits by 
having access to affordably priced, fresh, high-quality local produce 
to sell in its markets around the world. These partnerships also 
address some of Walmart's key sustainability concerns: supporting 
farmers and their communities, producing more food with less waste, and 
sustainably sourcing key agricultural products.

    Question #7. In 2010, Senator Durbin and I passed the Water for the 
World Act though the Senate to prioritize funding to bring first-time 
access to safe water and sanitation to the most needy. USAID's 2013 
water strategy seems to do some of that, but it is not clear that 
first-time access for the poorest is the highest priority.

   (a). How has USAID categorized countries in the FY15 WASH 
        budget?

    Answer. In FY 2015, USAID will continue to categorize priority 
countries according to the three tiers detailed in the 2013 Water and 
Development Strategy (http://www.usaid.gov/sites/default/files/
documents/1865/USAID_Water_Strategy_3.pdf) and in our subsequent Water 
and Development Strategy Implementation Field Guide (the ``Field 
Guide'') (http://www.usaid.gov/sites/default/files/documents/1865/
Strategy_Implementation_Guide_web.pdf). These country tiers were 
identified through an analysis that took into account: (1) the 
country's need and vulnerability as evidenced by the proportion of the 
population without access to improved water and sanitation services as 
well as key health indicators, including the proportion and absolute 
number of deaths of children under 5 due to diarrheal disease; and (2) 
the host country's opportunity and potential to achieve significant 
impact. In FY 2014, Tier 1 countries included Ethiopia, Kenya, 
Indonesia, Nigeria, Liberia, and South Sudan. USAID will continue to 
utilize the structures detailed in the Field Guide to determine 
allocations by priority country in FY 2015.

   (b). How many countries and programs will receive WASH 
        funding?

    Answer. The exact number of countries will not be known until the 
finalization of the FY15 653(a) process. However, USAID expects to 
allocate WASH funding to a similar number of priority countries as in 
FY 2014. In FY 2014, 37 countries will receive WASH directive 
allocations via USAID accounts.

   (c). Was a country's access to safe water and sanitation a 
        factor? Because in FY12 countries with less than 50 percent 
        WASH access accounted for only 9.7 percent of USAID's WASH 
        budget, while countries with over 80 percent WASH access 
        accounted for 44.3 percent, with projects in West Bank and Gaza 
        alone accounting for 27.5 percent of USAID's total WASH budget.

    Answer. Yes, as detailed above, USAID has sharpened its focus on 
the consistent use of criteria to allocate resources--both in terms of 
priority country focus and on targeting of activities within countries. 
As described, priority country tiers for funding allocations are 
identified through an analysis that takes into account the country's 
need and vulnerability as evidenced by the proportion of the population 
without access to improved water and sanitation services as well as key 
health indicators, including the proportion and absolute number of 
deaths of children under 5 due to diarrheal disease. These same 
criteria are used to determine targeting of resources within countries.
    In FY 2012, WASH funds were used in 43 bilateral missions, 6 
regional missions, 5 USAID/Washington Bureaus, and 2 Department of 
State Offices. These funds were allocated from various accounts 
authorized by the FY 2012 Appropriations Act. Allocations from these 
accounts are limited to certain geographic regions and countries. Of 
the 43 bilateral missions that received WASH allocations, 24 (56 
percent) were in countries in which over 50 percent of the population 
was using an unimproved drinking water source or sanitation facility as 
defined by the UNICEF-World Health Organization Joint Monitoring 
Programme. Collectively, these countries represented 39 percent of the 
Agency's FY 2012 WASH allocations.

   (d). How does USAID use management and evaluation reports 
        within their WASH programs? Have lessons learned been applied 
        to future projects to ensure federal dollars are being used as 
        efficiently and effectively as possible? What targets does 
        USAID have for the management and evaluation of their WASH 
        projects?

    Answer. USAID has continued to learn from experience in the 
implementation of WASH projects. USAID's Water Office, in particular, 
serves as the knowledge management lead for all water related matters 
within the Agency, and disseminates lessons learned from WASH programs 
Agencywide. Consistent with the Agency's approach to program design, 
all WASH programs must include robust monitoring plans. In addition, in 
accordance with the Field Guide and USAID's Evaluation Policy, missions 
that have water programs are encouraged to integrate performance or 
impact evaluations into the design of projects for the purposes of 
accountability to stakeholders and learning to improve effectiveness.

    Question #8. USAID's Latin America and Caribbean Bureau has 
established the goal of ``graduating'' nearly all countries in the 
Western Hemisphere and ending U.S. development assistance. The 
administration's budget submission does not lay out a strategy for 
accomplishing this goal. What is your strategy for achieving this goal? 
Is USAID contemplating a follow-on strategy for engaging middle-income 
countries to address constraints to economic growth?

    Answer. Aligned with the overall purpose of development to help 
countries reach the point at which they no longer need foreign 
assistance, USAID's goal is to largely graduate countries in the region 
from foreign assistance by 2030. Due to policies advanced by leaders in 
the region and investments by USAID and other donors, Latin America and 
the Caribbean economies are growing, fewer people live in poverty, 
citizens are healthier and better-educated, and voters are more ably 
represented by their elected leaders.
    As we succeed in creating the conditions under which foreign 
assistance is no longer necessary, our strategy for engaging in those 
countries will also change. Countries where USAID made significant 
investments in the past, such as Chile and Brazil, are now 
collaborating with us in third countries. For example, in Brazil, we 
are transitioning from a donor-recipient relationship to a partnership 
program that leverages Brazilian financial and technical resources to 
advance shared development objectives in the region and around the 
world.
    In the short-term, the Latin America and the Caribbean Bureau does 
not have any plans for additional mission close outs. Across all 
missions in the region, the Bureau is committed to the principles of 
selectivity and focus to maximize our development impact, and this 
approach is particularly relevant with those countries where our 
relationship is transitioning. Through each mission's Country 
Development Cooperation Strategy (CDCS) process, we have narrowed and 
targeted programing and emphasized partnering with the private sector, 
scaling up successful models with host governments, and prioritizing 
investments in scientific and technological innovations.

    Question #9. Funding for democracy support in Venezuela is cut by 
$800,000. USAID has had to withdraw from Ecuador. At a time when civil 
society is under increasing pressure, why doesn't the budget submission 
reflect a coherent strategy for off-shore democracy support in Western 
Hemisphere countries where democracy is being challenged?

    Answer. USAID's commitment to support human rights and democracy, 
including in challenging environments of the Western Hemisphere, 
remains strong.
    The President's budget reflects no decrease in priority toward 
these areas. We have the resources needed to advance U.S. objectives 
and support democracy and human rights in countries of concern.
    For Venezuela and Ecuador, the U.S. Government will support ongoing 
assistance for civil society to push for public accountability, defend 
human rights, and increase the public's access to independent 
information. We will continue to monitor events and circumstances 
closely.

    Question #10. I was surprised to see that the budget justification 
does not include any allocation of funding to at least plan for support 
of the implementation of the peace process in Colombia. USAID has 
played a key role in supporting the consolidation of Colombian 
Government control over previously ungoverned areas. What role do you 
foresee the USAID playing in the peace process and have you calculated 
the magnitude of resources we might wish to commit?

    Answer. The United States has strongly engaged in support of peace 
in Colombia, both as an advocate for negotiations and in laying the 
groundwork for a negotiated settlement.
    In his December meeting with President Santos, the President 
praised the ``bold and brave efforts to bring about a lasting and just 
peace inside of Colombia.''
    Our ongoing foreign assistance has helped the Colombian Government 
initiate talks and prepare for a peace agreement, and laid the 
groundwork to sustain an agreement once it is finalized. 
Counternarcotics programs have reduced cocaine production, thereby 
reducing illicit funding to terrorist groups, including the 
Revolutionary Armed Forces of Colombia (FARC). U.S. programs engage 
government, civil society, and the private sector to strengthen 
Colombia's ability to implement a sustainable and inclusive peace. This 
includes initiatives 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.
    We are in regular, close contact with the government about the 
status of peace talks and have encouraged the government to inform us 
of possible assistance the United States may offer in support of a 
final peace agreement. We will stay in contact with the committee as we 
receive requests from the Colombian Government and develop proposals to 
respond.

    Question #11. What is the administration's short-term strategy for 
addressing immediate humanitarian needs in Burma's Rakhine state, 
including the interruption of international NGOs' ability to operate in 
the area?

    Answer. The United States Government (USG) is deeply concerned by 
the recent violence and disruptions of essential services and 
humanitarian assistance in Rakhine State due to the targeting of the 
facilities of the United Nations (U.N.) and international 
nongovernmental organizations (NGOs). We are committed to working with 
the Government of Burma (GOB) to facilitate unimpeded access for 
humanitarian aid workers, to fully reestablish humanitarian assistance, 
and to urge their continued effort to create an environment where aid 
workers can safely operate.
    In the short-term, we have called on the GOB to hold accountable 
all those who committed violence, prevent the outbreak of future 
violence, and take appropriate steps to protect aid workers, their 
offices, and other vulnerable populations in the area. The GOB has been 
working with the international community to initiate steps toward the 
resumption of humanitarian aid. While this is a positive step from the 
government, far more is needed.
    The U.S. Embassy in Rangoon is in daily contact with GOB officials 
to facilitate the return of aid workers back into Rakhine State, take 
appropriate steps to reinforce and ensure their security, and resume 
humanitarian operations without delay. While some international 
organizations are starting to return to Rakhine State, they are facing 
difficulty in accessing internally displaced people (IDP) camps and in 
reestablishing offices and residences. Unfortunately, Malteser and 
Meedecins Sans Frontieeres (MSF)-Holland have been informed that their 
organizations will not be allowed to return to Rakhine. Although many 
of the most serious food and water shortages have been addressed since 
the violence, the exclusion of these organizations from Rakhine is 
severely disrupting access to life-saving medicine and medical care and 
local government health systems do not have the capacity to address all 
patients in need. We will continue to advocate for full access for U.N. 
and international NGOs to work in Rakhine.
    In parallel to engaging the GOB to resolve the security and 
accesses issues, the U.S. Government will continue to build upon its 
provision of humanitarian assistance to both IDPs in Rakhine State, and 
more broadly across the country. Through partners such as UNICEF, Save 
the Children, Solidarities International, and WFP, USAID's Office of 
Foreign Disaster Assistance (OFDA) and Office of Food for Peace (FFP) 
will continue to fund programs focusing on water, sanitation, and 
hygiene (WASH); coordination and delivery of relief commodities; and 
nutrition and food security. Since FY 2013, USAID and the U.S. 
Department of State's Bureau of Population, Refugees, and Migration 
(State/PRM), has provided over $69 million in humanitarian assistance 
to aid displaced populations in Burma and other vulnerable Burmese in 
neighboring countries and continues to work with international 
organizations for protection and assistance activities.
    The GOB is currently formulating a Rakhine Action Plan that is 
likely to include a roadmap to advance peace, security, and development 
as well as a process of verification and citizenship for members of the 
Rohingya with rightful claims. While the release of the Rakhine Action 
Plan would be a positive step, the will and ability of the GOB to 
implement this plan is essential. We continue to encourage the GOB to 
work toward a durable solution that addresses the underlying causes of 
conflict in Rakhine State and to create the conditions for sustainable 
peace and development. The United States stands ready to assist in 
these efforts.

    Question #12. What are the great challenges to a sustained 
democratic transition in Burma? What lessons learned from other 
transitional democracies are we applying today in our political, 
economic, and diplomatic initiatives in Burma?

    Answer. While the fervor for Burma's new democracy has created 
great expectations, the USG strives to not only live up to those 
expectations, but to also manage expectations in light of the complex 
realities faced by countries in transition. To ensure sustained 
democratic transition in Burma, a robust civil society must remain 
positively engaged with the Government of Burma (GOB) to continue and 
sustain reforms and promote human rights. Additionally, the people of 
Burma must address underlying issues that perpetuate ethnic and 
religious tension to create the social cohesion necessary for a healthy 
democracy. Accordingly, the resolution of Burma's long-standing armed 
conflicts and establishment of political processes and institutions 
that respect the rights of the country's diverse peoples are absolutely 
vital. Economic reforms must also be inclusive and provide tangible 
benefits--such as jobs, education, and health care--to the whole 
population. Addressing all of these challenges will create greater 
space for democratic reforms to progress and for legitimate democratic 
processes to be established.
    The lessons learned from democratic transitions in Eastern Europe 
and the Arab Spring have informed our approach to the transition in 
Burma. In countries such as Romania, Bulgaria, and Hungary in the early 
1990s, U.S. assistance focused on building governmental capacity and 
promoting macroeconomic reforms. Despite the assistance provided by 
USAID, many of the newly independent States struggled to establish the 
infrastructure and social safety nets needed to ensure tangible 
benefits from the transitioning economy were rapidly extended to all 
parts of the population. In the Arab Spring, the population's fervor 
for democracy also did not translate into economic progress for the 
average citizen.
    Taking the challenges and lessoned learned into account, USAID's 
programming in Burma is focused on inclusive growth to improve the 
lives of average citizens throughout the country. To support this 
approach, USAID is establishing an agricultural framework focused on 
inclusive growth benefiting smallholder farmers. This framework aims to 
create an enabling environment where increased foreign investment and 
improved technologies can deliver higher yields and sustainable, 
inclusive growth to Burma's agricultural workers. Additionally, we are 
strengthening more than 1,600 villages by building local governance and 
civil society, and creating community resilience to disruptions such as 
floods, droughts, violence, and the effects of climate change. 
Furthermore, we recently initiated a Rule of Law program which is 
advancing democratic reform by supporting legal reform, fostering an 
enabling environment for effective justice, and promoting a culture of 
citizen rights and accountability under the rule of law.

    Question #13. How effective has U.S. assistance been in promoting a 
two-state solution and political reform in the West Bank and Gaza?

    Answer. A just, lasting, and comprehensive peace between Israel and 
its Arab neighbors, including a two-state solution to the Israeli-
Palestinian conflict, is a long-standing bipartisan goal of U.S. 
foreign policy in the Middle East, of which a viable and moderate 
Palestinian Authority (PA) government is an essential component. U.S. 
assistance programs effectively develop viable and democratic PA 
institutions as a foundation for a future Palestinian state, as shown 
by significant improvements in governance, service delivery, and 
private-sector led economic growth. The Office of the United States 
Security Coordinator and the Department of State's Bureau for 
International Narcotics and Law Enforcement Affairs (INL) provide 
training, nonlethal equipment, infrastructure, and other assistance to 
the Palestinian security and justice sectors, effectively combating 
serious crime and terrorism and strengthening the rule of law in the 
West Bank. USAID and INL coordinate closely to ensure complementarity.
    USAID programs support increases in economic opportunities, build 
institutions, and promote cross-border cooperation. Promoting a 
prosperous Palestinian economy helps open up new markets to Israel, 
empowers moderate voices, and deepens the ties between the two peoples, 
thereby increasing security. With USAID's support, Palestinian per 
capita gross domestic product (GDP) has increased by 50 percent since 
2007. Tourism has increased nearly 350 percent. In the agribusiness and 
information and communication technology (ICT) sectors, entire 
industries have emerged. Cooperation with and between Israelis and 
Palestinian businesspeople led to a 44-percent increase in Palestinian 
exports. Below are additional examples of USAID's successes.
PA Budget Support & Fiscal Sustainability
   USAID budget support ensures the continued viability of the 
        PA to support peace efforts and respond to the needs of the 
        Palestinian people. Before disbursement, USAID approves the use 
        of this budget support for specific purposes.
   USAID helped the PA increase tax revenues by more than 18 
        percent in the first 2 months of 2014 by providing technical 
        assistance and introducing an automated revenue management 
        system.
Democracy and Governance
   USAID's support for 19 Youth Shadow Local Councils, 
        voluntary bodies comprised of Palestinian youth (aged 15-20) 
        elected by their peers to mirror local government, creates the 
        building blocks of governance for the next generation of PA 
        leaders in the West Bank.
   A total of 32 USAID-supported Citizen Service Centers 
        provide a range of quality, accessible services--including 
        issuance of driver's licenses and passports, as well as postal 
        services--for the entire population of the West Bank.
Tourism
   USAID financial, technical, and infrastructure-related 
        support to the city of Bethlehem leading up to the 2013 
        Christmas tourism season resulted in the injection of more than 
        $6 million into the local economy. USAID is currently 
        supporting a Spring Arts Festival in Jericho and a Canafe 
        Festival in Nablus. The festivals are estimated to draw more 
        than 100,000 tourists in only 4 weekends.
   USAID works with the PA and the Palestinian private sector 
        to find innovative ways to expand options available to 
        tourists, including by forging partnerships between Palestinian 
        and Israeli tour operators. One example is the joint Israeli-
        Palestinian run company, ``Breaking Bread Journeys,'' which 
        combines site visits with daily cultural exchanges.
Agribusiness
   USAID helped Palestinian agribusinesses grow exports from $0 
        to $17 million in a matter of only 2 years by providing farmers 
        with technical assistance, access to capital, and exposure to 
        international businesses and distributors
ICT
   USAID facilitates partnerships between Palestinian software 
        development companies and U.S. companies and their Israeli 
        subsidiaries, including Cisco, Microsoft, Intel, Hewlett-
        Packard, and Oracle. Thanks to these efforts Intel, for 
        example, now employs 40 Palestinian programmers working on 
        projects for Intel Israel.
Trade
   USAID's support eases cross-border trade and investment 
        constraints. Intensive cooperation between Palestinian and 
        Israeli customs has saved Palestinian transport firms $1.2 
        million per year by streamlining customs procedures.
   At the Jalameh crossing, USAID renovated and improved 
        pedestrian and vehicle crossing infrastructure, reconnecting 
        Jenin with the large Israeli-Arab communities in Northern 
        Israel. This resulted in an estimated $120 million in economic 
        gains from 2009-2012.
High Impact Micro-Infrastructure Initiative (HIMII)
   USAID is implementing $100 million in small-scale 
        infrastructure projects in support of the High Impact Micro-
        Infrastructure Initiative, with the goal of demonstrating 
        tangible benefits to the Palestinian people. Since November 
        2013, USAID has initiated 73 projects, including roads, 
        schools, and clinics at a total estimated value of $74 million. 
        An additional 25 new HIMII projects, valued at about $25 
        million, are tentatively scheduled to begin in June 2014.
Health
   USAID supports PA efforts to reform the health referrals 
        system. USAID identified critical reform measures, which helped 
        decrease expensive referral costs by 13 percent.
People-to-People Reconciliation
   USAID's supports 25 diverse organizations as they promote 
        understanding and tolerance between Israelis and Palestinians 
        over issues of common concern. One program, Olive Oil Without 
        Borders, brokered an agreement allowing Palestinian olive oil 
        producers to sell to Israelis, resulting in a revenue increase 
        of $3.2 million.

    Question #14. USAID's recent Global Health Supply Chain request for 
proposals (RFP) will be one of the single largest awards ever made by 
the agency. However, a lack of publicly available data makes it 
difficult to assess how the new program requirements will necessarily 
improve upon supply chain performance. How will USAID improve the use 
and availability of data and analysis in this next phase of investment 
in commodities and supplies?

    Answer. USAID is dedicated to improving the performance of the 
Global Health Supply Chain (GHSC) program and improving the use and 
availability of logistics data. Recently, USAID released a substantial 
amount of supply chain data in connection with our new commodity and 
supply chain procurements. The new GHSC procurements consist of five 
mechanisms designed to address identified areas of improvements in the 
current program structure, including the need for a more mature and 
fully integrated data warehouse capability that encompasses the 
Agency's entire global health commodity portfolio.
    One of the new GHSC mechanisms, the Global Health Business 
Intelligence & Analytics (BI&A) contract, which was awarded at the end 
of April 2014 and is expected to be fully operational by fall 2014, 
specifically addresses issues of data management, data availability, 
analytics solutions, and knowledge management. Once implemented, the 
BI&A contract will house both historical and ongoing data on all global 
health investments in commodities and supplies, which will facilitate 
the Agency's ability to analyze and report on USAID-supported 
investments in commodities and supply chain strengthening.
    The BI&A contract will serve multiple purposes and improve the use 
and availability of data and analysis in the next phase of the Agency's 
investment in health commodity procurement and technical assistance by 
enabling:

   The consolidation and coordination of data from all GHSC 
        mechanisms, including those responsible for commodity 
        procurement, delivery and quality assurance;
   USAID to better analyze and identify supply chain trends and 
        conduct predictive modeling to better inform our commodity 
        decision making processes. For example, the contract will allow 
        USAID to manage vendor performance; track and trace shipments; 
        monitor product and shipping costs, and product flow; identify 
        available stocks and gaps; and predict stock-outs;
   Nonsupply chain data sets to overlay GHSC data to help 
        identify new or previously unsubstantiated development trends; 
        and
   USAID leadership to provide additional data sets publicly 
        consistent with the administration's Open Data policy.

    USAID is committed to capturing the GHSC data and making the supply 
chain data available to Congress and the public.

    Question #15. In 2013, the Promoting the Quality of Medicines 
program, which is funded by USAID and implemented by the U.S. 
Pharacopeial Convention (USP), along with the Ghana Food and Drugs 
Authority Laboratory Services, sampled hundreds uterotonics across the 
health sector in Ghana. The survey's results are a source of great 
concern. For example, 55 percent of the oxytocin samples failed quality 
tests, of which 86 percent were manufactured in China; and 73 percent 
of the Ergometrine injection samples failed, of which 90 percent were 
manufactured in India. How will the upcoming Global Health Supply Chain 
address counterfeit, substandard, and unsafe medications, and will it 
incorporate quality testing of drugs before they are funded by or 
distributed through our foreign assistance programs?

    Answer. USAID shares your concern about the medicines quality 
issues identified in the survey. The substandard medicines identified 
in the report from Ghana were sampled from the local marketplace by the 
Ghana Food and Drugs Authority (FDA) Laboratory Services Department, 
with technical assistance from USAID's Promoting the Quality of 
Medicines (PQM) program. USAID supported the Ghana FDA to use the 
survey findings to take regulatory and legal action, which included 
recalling products from the market and protecting patients from being 
exposed to substandard uterotonics. This study demonstrates USAID's 
rigorous commitment to building the capacity of country governments to 
combat the presence of counterfeit, substandard, and unsafe medicines.
    USAID fully understands and appreciates the importance of providing 
patients and recipients with quality assured medicines and 
strengthening national medicines quality assurance systems, and USAID 
is committed to continuing its investments in the quality assurance 
arena.
    In accordance with the Agency's policy and procedure requirements 
(as contained in Automated Directives System 312), all pharmaceuticals 
procured with USAID resources are procured from quality-approved 
vendors that are subject to rigorous quality control testing. All of 
these requirements and mechanisms will remain in place under the new 
Global Health Supply Chain Program (GHSCP) to manage the quality 
assurance and quality control activities of pharmaceuticals procured by 
USAID.
    USAID has a long history of successfully strengthening national 
medicines regulatory authority quality assurance systems through the 
PQM program and predecessor programs. Currently, USAID supports 
national medicines regulatory authorities through the PQM program, 
which is implemented by the U.S. Pharmacopeial Convention. 
Additionally, the Product Quality Assurance Contract, under the new 
GHSCP, will serve as another mechanism to provide technical assistance 
to national medicines regulatory authorities to build country capacity 
to mitigate counterfeit, substandard, and unsafe medicines and other 
health products from entering the supply chain or becoming compromised 
within the supply chain.

    Question #16. The President's Malaria Initiative (PMI) regularly 
uses end-use verification tools to monitor the availability in health 
facilities of diagnostics, medicines, and other commodities. How is 
this information being used to improve the supply chain? Is USAID using 
these or similar tools in other USAID programs to monitor and verify 
the availability of commodities?

    Answer. The End-Use Verification (EUV) Tool is used to improve the 
supply chain in four ways:

    1. Detect stockouts and other stock issues. In the short-term, the 
tool detects stockouts and stock surpluses of antimalarial drugs at 
regional warehouse depots and at health facilities. The identification 
of mismatched stock levels is used to shift antimalarial drugs from 
medical stores with stock surpluses to facilities experiencing 
stockouts. Since malaria is an acute, febrile condition that can 
rapidly become life-threatening, especially in children less than 5 
years of age, immediate access to treatment is imperative. Therefore, 
this enables the President's Malaria Initiative (PMI) and national 
partners to quickly mobilize life-saving antimalarial drugs where they 
are needed.
    2. Facilitate supervisory visits. EUV implementation teams include 
staff from the Ministries of Health, as well as national malaria 
control program and regional health management teams. The Ministry of 
Health staff provide increased opportunities for supportive supervision 
of peripheral health staff, while providing visibility into systemic 
bottlenecks in country supply chains. Bringing central and regional 
officials, who are capable of making policy changes, into the field to 
see the challenges can help promote improvements in supply chain 
functionality. Identifying stockouts or other stock issues improves 
transparency in often opaque systems, and brings central-level 
attention to gaps and challenges at lower levels of the system.
    3. Improve quantification and forecasts. In the longer term, the 
EUV tool contributes to more systemic improvements in country supply 
chains, by improving the collection of and reporting on antimalarial 
consumption data over time. These data inform national-level 
quantification and forecasting and ensure that commodity predictions 
are more accurate, which in turn decreases potential stockouts and 
improves the use of drugs due to expire. Ultimately, using the EUV tool 
results in supply chains that are more responsive to real-time needs 
with the correct volume of commodities available to reach end-users--a 
key benchmark of a functional supply chain.
    4. Contribute to greater country ownership of the supply chain. The 
EUV tool ensures that national malaria program staff are equipped to 
make evidence-based recommendations to improve the function of the 
national supply chain. Over time, data from repeated EUV tool 
implementation demonstrate improvements at the local facilities, as 
well as across multiple regions.

    The EUV tool is currently undergoing an expansion to include select 
maternal and child health (MCH) commodities, with the PMI and USAID MCH 
teams closely collaborating. There is the potential to expand the EUV 
tool to other health elements within USAID's Bureau for Global Health.
                                 ______
                                 

               Responses of Hon. Rajiv Shah to Questions 
                     Submitted by Senator Tom Udall

    Question. USAID is doing important work to promote development in 
Africa and Asia, and these efforts should be applauded, yet this has 
come at the expense of countries in our own backyard such as El 
Salvador, Honduras, and Guatemala, where the crime rate is higher than 
anywhere in the world. While partnerships to leverage funding such as 
the Development Credit Authority are important, it does not replace 
core funding in education, water, health and other areas critical to 
ending extreme poverty and providing economic opportunities which can 
turn youth away from gangs. Sadly it's this core funding which has been 
on the decline for years in Latin America. A comprehensive approach to 
the region, addressing crime and drug-trafficking but also rule of law, 
economic development, and education is critical to prevent further 
decline.

   Would USAID support increased efforts to address the roots 
        of the problems in this region and what can Congress do to help 
        these efforts?

    Answer. The primary vehicles for USAID's security assistance to 
Mexico, Central America, and the Caribbean are the Merida Initiative, 
Central America Regional Security Initiative (CARSI) and Caribbean 
Basin Security Initiative (CBSI), respectively. Under these 
initiatives, USAID works to strengthen rule of law institutions and 
reduce levels of crime and violence by assisting countries and 
marginalized communities in addressing the root causes of insecurity 
that impede broader economic development and social inclusion. These 
efforts are complemented and reinforced by USAID's traditional 
development programs across a range of sectors--from democracy and 
governance to economic growth to health and the environment.
    USAID recognizes that sustained improvements in the region's 
security are predicated on an integrated approach to development. Only 
by keeping children in school and training out-of-school youth for 
work, connecting small farmers to markets, lifting rural poor out of 
poverty, preserving natural resources and reaching out to historically 
marginalized groups, can USAID contribute to a broader effort to make 
the region more safe and prosperous.
    USAID is committed to furthering these integrated efforts, which 
include such approaches as the use of Development Credit Authority 
(DCA) and public private partnerships, as you note. These approaches 
are not add-ons, but are essential to our mission of ending extreme 
poverty and providing economic opportunities in the region. We look 
forward to the continued support of Congress in overcoming the region's 
challenges.

    Question. USAID's Global Development lab is an exciting and 
important pillar in our approach to development globally. Innovation, 
entrepreneurship, and job creation are critical to U.S. economic 
competitiveness as well. Just last year 75 U.S. industries classified 
as intellectual property intensive added $5.8 trillion to U.S. output. 
Technology transfer, which accelerates innovations from the lab to the 
market, is critical to maintaining our role as a leader in science and 
technology, and developing solutions to complex global challenges such 
as disease, pollution, and access to energy. Our National Labs 
including Sandia and Los Alamos in New Mexico are actively involved in 
basic and applied research, and examining ways to accelerate tech 
transfer.

   How will you ensure that the research and technologies you 
        support through the lab mature into viable businesses, and are 
        scaled up to benefit those in need around the world?
   How will this new lab link with other agencies such as the 
        Department of Energy, Small Business Administration, and 
        Department of Commerce, also focused on innovation?

    Answer. The U.S. Global Development Lab (The Lab) is building 
directly off of the successes of its two predecessor organizations--the 
Office of Innovation and Development Alliances and the Office of 
Science and Technology. Those two offices were able to generate 
hundreds of new innovative and cost effective approaches to solving 
long-standing development challenges. Where the Lab seeks to improve is 
in the area of making sure the most promising of those solutions are 
taken to global scale, impacting hundreds of millions of people. This 
can only be done if these efforts become sustainable. For a large 
subset of these solutions, it means ensuring that they become viable 
businesses. The Lab will do this in two ways. First, we will provide 
staged financing, making increased investments to those solutions where 
there is solid evidence of a sound business model that will enable 
global impact. Second, the Lab is establishing innovative financing 
models and other tools for nascent development enterprises, and 
connecting entrepreneurs with accelerators like the USAID Higher 
Education Solutions Network Health Accelerator at Duke University and 
USAID partnerships like LAUNCH (Department of State, NASA, and Nike) 
that connect entrepreneurs with business advisory services. Successful 
examples include: the Odon Device, which will be manufactured by 
Becton, Dickinson and Company, of Franklin Lakes, N.J.; Subsurface 
Vapor Transfer Irrigation, which has licensed the technology to Dupont; 
and d.Light, which just closed on $11 million in Series C venture 
capital financing.
    The Lab has created a strong network of partners that will work 
closely with the Lab from the outset to help scale proven solutions. 
The Lab's cornerstone partner network includes corporations, 
foundations, donors, universities and nongovernmental organizations. 
The Lab also has a close network of U.S. Government Partners that we 
are already working with to help the Lab design and implement programs. 
This list includes the State Department, USDA, NASA, the U.S. 
Geological Survey, the National Science Foundation, the Millennial 
Challenge Corporation, the National Geospatial Intelligence Agency, and 
the National Oceanic and Atmospheric Administration. In addition, the 
Lab tapped into the expertise and experience of the Department of 
Energy to help us design the U.S. Global Development Lab.

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