    [House Hearing, 115 Congress]
    [From the U.S. Government Publishing Office]

          MAINTAINING U.S. INFLUENCE IN SOUTH ASIA: THE FY 2018 BUDGET

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

                                    HEARING

                                   BEFORE THE

                      SUBCOMMITTEE ON ASIA AND THE PACIFIC

                                     OF THE

                          COMMITTEE ON FOREIGN AFFAIRS
                            HOUSE OF REPRESENTATIVES

                         ONE HUNDRED FIFTEENTH CONGRESS

                                 FIRST SESSION

                                   __________

                               SEPTEMBER 7, 2017

                                   __________

                               Serial No. 115-76

                                   __________

            Printed for the use of the Committee on Foreign Affairs

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    Available via the World Wide Web: http://www.foreignaffairs.house.gov/
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                          COMMITTEE ON FOREIGN AFFAIRS

                     EDWARD R. ROYCE, California, Chairman
    CHRISTOPHER H. SMITH, New Jersey     ELIOT L. ENGEL, New York
    ILEANA ROS-LEHTINEN, Florida         BRAD SHERMAN, California
    DANA ROHRABACHER, California         GREGORY W. MEEKS, New York
    STEVE CHABOT, Ohio                   ALBIO SIRES, New Jersey
    JOE WILSON, South Carolina           GERALD E. CONNOLLY, Virginia
    MICHAEL T. McCAUL, Texas             THEODORE E. DEUTCH, Florida
    TED POE, Texas                       KAREN BASS, California
    DARRELL E. ISSA, California          WILLIAM R. KEATING, Massachusetts
    TOM MARINO, Pennsylvania             DAVID N. CICILLINE, Rhode Island
    JEFF DUNCAN, South Carolina          AMI BERA, California
    MO BROOKS, Alabama                   LOIS FRANKEL, Florida
    PAUL COOK, California                TULSI GABBARD, Hawaii
    SCOTT PERRY, Pennsylvania            JOAQUIN CASTRO, Texas
    RON DeSANTIS, Florida                ROBIN L. KELLY, Illinois
    MARK MEADOWS, North Carolina         BRENDAN F. BOYLE, Pennsylvania
    TED S. YOHO, Florida                 DINA TITUS, Nevada
    ADAM KINZINGER, Illinois             NORMA J. TORRES, California
    LEE M. ZELDIN, New York              BRADLEY SCOTT SCHNEIDER, Illinois
    DANIEL M. DONOVAN, Jr., New York     THOMAS R. SUOZZI, New York
    F. JAMES SENSENBRENNER, Jr.,         ADRIANO ESPAILLAT, New York
        Wisconsin                        TED LIEU, California
    ANN WAGNER, Missouri
    BRIAN J. MAST, Florida
    FRANCIS ROONEY, Florida
    BRIAN K. FITZPATRICK, Pennsylvania
    THOMAS A. GARRETT, Jr., Virginia

         Amy Porter, Chief of Staff      Thomas Sheehy, Staff Director

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

                      Subcommittee on Asia and the Pacific

                         TED S. YOHO, Florida, Chairman
    DANA ROHRABACHER, California         BRAD SHERMAN, California
    STEVE CHABOT, Ohio                   AMI BERA, California
    TOM MARINO, Pennsylvania             DINA TITUS, Nevada
    MO BROOKS, Alabama                   GERALD E. CONNOLLY, Virginia
    SCOTT PERRY, Pennsylvania            THEODORE E. DEUTCH, Florida
    ADAM KINZINGER, Illinois             TULSI GABBARD, Hawaii
    ANN WAGNER, Missouri

                                C O N T E N T S

                                  ----------
                                                                       Page

                                   WITNESSES

    The Honorable Alice G. Wells, Acting Assistant Secretary, Bureau
      of South and Central Asian Affairs, U.S. Department of State...     6
    Ms. Gloria Steele, Acting Assistant Administrator, Bureau for
      Asia, U.S. Agency for International Development................    22

              LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING

    The Honorable Ted S. Yoho, a Representative in Congress from the
      State of Florida, and chairman, Subcommittee on Asia and the
      Pacific: Prepared statement....................................     3
    The Honorable Alice G. Wells: Prepared statement.................     9
    Ms. Gloria Steele: Prepared statement............................    24

                                    APPENDIX

    Hearing notice...................................................    46
    Hearing minutes..................................................    47
    The Honorable Gerald E. Connolly, a Representative in Congress
      from the Commonwealth of Virginia: Prepared statement..........    48
    Written responses from the Honorable Alice G. Wells to questions
      submitted for the record by:
      The Honorable Ted S. Yoho......................................    50
      The Honorable Dina Titus, a Representative in Congress from the
        State of Nevada..............................................    55
      The Honorable Brad Sherman, a Representative in Congress from
        the State of California......................................    56

          MAINTAINING U.S. INFLUENCE IN SOUTH ASIA: THE FY 2018 BUDGET

                                  ----------

                          THURSDAY, SEPTEMBER 7, 2017

                           House of Representatives,

                     Subcommittee on Asia and the Pacific,

                         Committee on Foreign Affairs,

                                Washington, DC.

        The subcommittee met, pursuant to notice, at 10:00 a.m., in
    room 2172 Rayburn House Office Building, Hon. Ted Yoho
    (chairman of the subcommittee) presiding.
        Mr. Yoho. The subcommittee will come to order. Members
    present will be permitted to submit written statements to
    include in the official hearing record. Without objection, the
    hearing record will remain open for 5 calendar days to allow
    statements, questions, and extraneous material for the record,
    subject to length limitation in the rules.
        Well, good morning. The subcommittee assembles today to
    discharge our responsibility to conduct oversight of the
    administration's fiscal year 2018 budget request for South
    Asia. Today, we will discuss requests for Bangladesh, India,
    the Maldives, Nepal, and Sri Lanka, reserving Afghanistan and
    Pakistan until next week when we will convene jointly with the
    Subcommittee on the Middle East and North Africa.
        It goes without saying that South Asia is an increasingly
    consequential part of the globe. For a long time, the world's
    center of gravity has been shifting to the East, and the Indian
    Ocean region is a major part of this trend. The five nations we
    will discuss today--Bangladesh, India, the Maldives, Nepal, and
    Sri Lanka--have about 1.5 billion residents combined,
    comprising nearly 20 percent of the world's population.
        These nations are located along, or on top of, vital global
    sea lanes through the Indian Ocean which grows more
    strategically important by the day. Connecting vital straits
    and rising Asian economies in the East with the rest of the
    world and its energy to the West, the Indian Ocean has
    significant implications for security and trade across the
    globe.
        Despite the immense strategic economic importance of these
    nations, this year's State and Foreign Operations Congressional
    Budget Justification shows the administration tends to slash
    our commitments to them by 48 percent. Under the
    administration's request, this region is the hardest hit by
    cuts after Europe and Eurasia.
        As I stated during the subcommittee's last budgetary
    oversight hearing, I commend the administration's efforts to
    increase fiscal responsibility, but I am concerned that cutting
    the budget to an arbitrary dollar amount has been prioritized
    over the actual value of the individual programs. It is worth
    reiterating that even before this year's foreign operations
    budget was slashed by 30 percent, it accounted for just 1
    percent of annual Federal outlays.
        Dramatic cuts to foreign aid are not the way to rein in our
    out-of-control government spending, especially if they
    undermine U.S. interests. Sound business logic dictates that we
    should continue projects that deliver a good return on
    investment, but this year's request seems to de-fund a number
    of initiatives that significantly benefit our national
    interest.
        In Sri Lanka, for example, U.S. foreign assistance will be
    cut by 92 percent, mostly from accounts that have supported
    programs to promote the rule of law, democratic reforms, post-
    Civil War reconciliation, and related efforts. These programs
    are cost-effective ways to contribute to Sri Lanka's
    transformation while pursuing a partnership in strategically
    critical locations. Even at their height in 2016, U.S.
    assistance commitments to Sri Lanka were about 42.5 million,
    and that is a bit less than half the cost of a single F-35
    fighter jet. That seems like a reasonable investment to gain a
    friend in one of the world's most critical sea lanes.
        While we are forming a large Millennium Challenge
    Corporation compact with Sri Lanka, the MCC will focus on
    economic activities. I am concerned that by changing course so
    drastically we want to make sure that we are not throwing away
    the investments we have already made in Sri Lanka, leaving a
    gap in the democracy and governance programs Sri Lanka badly
    needs and potentially forcing the closure of our USAID mission.
        Requests for other nations in this region raise similar
    questions. Assistance of the Maldives which faces seriously
    security risks will be cut by 87 percent. Assistance to India
    and Nepal will each be cut by about 60 percent. Amid the rising
    strategic and economic importance of the Indian Ocean region,
    these numbers raise a serious risk of sending the wrong message
    about our understanding of the region and our commitment to
    stay engaged.
        As in any business, it is important to look at what
    investments are competitors are making. As we reduce our
    commitments in South Asia, China is expanding there like never
    before leveraging huge infrastructure projects to rapidly
    become the preferred partner in locations across the Indian
    Ocean. We have all heard the cliche that nature abhors a
    vacuum.
        This morning as we discuss the fiscal year 2018 budget
    requests for these five nations, I am interested in hearing
    from the witnesses how the reductions of our commitments will
    affect U.S. security and economic interests in the Indian Ocean
    and how our partnerships will fare. I also hope our
    conversation will answer a comparatively simpler question: Does
    this budget represent a step forward in our partnership in
    South Asia?
        Without objections, the witnesses' written statements will
    be entered into the hearing, and I now turn to the ranking
    member for any remarks he may have.
        [The opening statement of Mr. Yoho follows:]

        [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                                  ----------

        Mr. Sherman. Thank you, Mr. Chairman. I had this brilliant
    opening statement to talk about the budget cuts. You,
    unfortunately, already laid it out in a level of eloquence that
    I would not try to match.
        Mr. Yoho. I read your notes before you got here.
        Mr. Sherman. I want to associate myself with your comments
    that this is not the time to be cutting our foreign operations,
    particularly in the South Asia area.
        My district includes most of the studios. I love actors. We
    have before us an acting assistant secretary and an acting
    assistant administrator, but on this one occasion I would
    prefer not to be talking to actors. The idea that is this the
    fault of the Senate and the confirmation process, I am always
    in favor of blaming the United States Senate. I have done it in
    this room many times. But the folks have not been nominated
    yet.
        The Senate is controlled by Republicans and they have
    changed their rules so it takes only 50 votes, only Republican
    votes, to confirm. This is not a confirmation problem, this is
    an appointment problem. The Secretary of State and I have
    talked about this. He says, but the acting people are doing
    well, doing spectacularly well, to which my response has been
    fine, Ambassador Wells should be given the job permanently.
        And I don't have a response. I didn't single you out,
    actually. But in general, the people he praises ought to be
    given the job on a permanent basis. The idea that we go from
    Obama appointees to acting and then to other appointees,
    perhaps all in 1 year, puts our foreign policy in disarray.
        With regard to reaching out to the people of South Asia, I
    think it is critically important that we look at broadcasting.
    I will be asking just how involved you are, Ambassador Wells,
    in talking to the folks that control our international
    broadcasting. I think they try to match our foreign policy
    objectives in selecting which countries to broadcast to and in
    which languages, but I think they often don't get much guidance
    from the State Department.
        But what is worse is this committee has urged them to start
    broadcasting in the Sindhi language and other languages of
    Pakistan, starting with Sindhi, and they have always found a
    reason not to do so even though the cost would be, I think,
    less than it costs to operate an aircraft carrier for 1\1/2\
    minutes.
        So I think we will learn from your testimony just how
    problematic the situation in Pakistan is. You are dealing with
    a nuclear state that is not always consistently friendly with
    the United States and apparently, even in its military city of
    Abbottabad, can't find a compound inhabited by Osama bin Laden.
    And yet we are only reaching out in Urdu, the language the
    government might prefer us to broadcast in, but not the
    language used by thousands and thousands of businesses who try
    to reach out to consumers. They know what they are doing when
    they try to sell soap; we should be in the same language.
        India, Afghanistan--the President and I know from other
    sources, has doubled down on this idea of encouraging India to
    be involved with Afghanistan. India, it is a poor country, but
    one question is whether it should have a foreign aid program at
    all. If it doesn't have a foreign aid program it has immediate
    neighbors like Nepal and Bangladesh whose needs far exceed
    India's capacity to provide, and yet India is spending foreign
    aid money in Afghanistan. It is a geopolitical effort to deal
    with Pakistan, and one that we should not encourage.
        The Durand Line, between the border between Afghanistan and
    Pakistan, has not been recognized by the Afghan Government and
    we ought to condition our aid to Afghanistan on the recognition
    of that line. I realize that is tough, they will say oh, don't.
    But the fact is, as long as Afghanistan leaves open the idea
    that they are claiming Pakistani territory, it is going to be
    very hard to get the Pakistanis involved as we need them
    involved in controlling the Afghan Taliban.
        Certainly Pakistan sees its enemy as India, and the idea
    that India would have a close relationship with an Afghanistan
    that hasn't recognized the border and with whom they share the
    Pashtun ethnic group, shows that this particular foreign aid
    program of India should not be on the top of our list when we
    talk to the Indians about how they can use their scarce
    resources to help the most desperately poor people in the
    world.
        So I look forward to talking about these issues, and trade,
    as the questioning begins.
        Mr. Yoho. I thank the ranking member. And I know you will
    be excited that next week we will have the hearing on
    Afghanistan and Pakistan with the full committee and so we will
    fulfill that.
        We are thankful to be joined today by the Honorable Alice
    G. Wells, Acting Assistant Secretary for the Bureau of South
    and Central Asian Affairs at the U.S. Department of State, and
    I appreciate your time yesterday with the briefing; and Ms.
    Gloria Steele, again back talking to Us, Acting Assistant
    Administrator for the Bureau for Asia in the U.S. Agency for
    International Development.
        And with that we are going to let you go ahead and give
    your statement. Your statement, you will have 5 minutes, red
    light, you know, turn your red light on so that the microphone
    is on. You will have your timer there. And Ambassador Wells, if
    you would, your opening statement. Thank you.

      STATEMENT OF THE HONORABLE ALICE G. WELLS, ACTING ASSISTANT
      SECRETARY, BUREAU OF SOUTH AND CENTRAL ASIAN AFFAIRS, U.S.
                          DEPARTMENT OF STATE

        Ambassador Wells. Thank you Chairman Yoho, Ranking Member
    Sherman, and Representative Brooks. Thank you for inviting me
    to testify on the fiscal year 2018 foreign assistance
    priorities for South Asia, and in my oral remarks today I will
    briefly summarize my written statement which has been submitted
    for the record.
        It is an honor to appear before the subcommittee as both,
    Acting Assistant Secretary for South and Central Asia and as
    Acting Special Representative for Afghanistan and Pakistan. The
    reintegration of the State Department's policy offices for
    Afghanistan, Pakistan, and South Asia is improving coordination
    and will enable us to more effectively advance U.S. national
    security interests across the region.
        Today, a quarter of the world's population, 1.7 billion
    people, live in South Asia. It is the fastest growing region in
    the world with almost half the population under the age of 17.
    This drives economic growth, expected to be above 7 percent
    from 2018 onwards, along with unprecedented opportunities for
    trade. Nowhere are these opportunities greater than in the
    growing road, air, and sea links between India, Bangladesh,
    Burma, Nepal, and Sri Lanka and the rapidly expanding ASEAN
    economies.
        Seventy percent of the infrastructure required to sustain
    and support the India of 2030 has yet to be built. This will be
    an enormous opportunity for U.S. companies that have the
    technology and expertise. For example, Boeing alone foresees a
    market for 2,000 commercial aircraft in South Asia over 20
    years. The region's growth has the potential to create \1/2\
    billion new customers for U.S. businesses in consumer goods,
    financial services, technology, infrastructure, the health
    sector, energy, education, tourism, and more.
        In 2014, the United States exported more than $22 billion
    worth of goods to Southeast Asia, making us the region's number
    one trading partner. These exports support thousands of jobs
    and as the region rises thousands more are likely to be created
    as a result.
        India is one of our most important strategic partners and a
    country of growing political and economic importance globally
    with which our values and national interests increasingly
    align. U.S. assistance to the Indian Government contributes to
    meeting the basic needs of the Indian people, helping India to
    devote more attention to the regional and global leadership
    roles to which it aspires and which the United States supports.
        Bangladesh is a key partner for the United States. Despite
    its development and security challenges, Bangladesh sustains
    global peace with over 7,000 police and armed forces deployed
    to ten U.N. peacekeeping operations. It contributes to global
    food security and can provide a moderate alternative voice to
    countering violent extremism. In recent weeks, Bangladesh has
    also demonstrated its continuing commitment to host large
    numbers of Rohingya refugees.
        U.S. assistance will continue to strengthen Bangladesh
    against the threats of radicalization, support Bangladesh as a
    global model and humanitarian in development and poverty
    reduction, and promote a trade and investment environment
    conducive to U.S. companies. And in one of the poorest
    countries of the world, our assistance to Nepal helps
    strengthen democracy and improve transparency and
    accountability. With an MCC compact expected to be signed
    shortly, we will assist the Nepali Government in transforming
    its energy and transportation sectors.
        Since Sri Lanka's historic January 2015 elections, the
    United States has been partnering to make its workers more
    skilled, citizens more empowered, while ensuring that the
    government continues its ambitious reform agenda. As Sri Lanka
    implements its reform objectives and in accordance with limits
    set by Congress, our modest military-to-military engagement has
    expanded slowly and incrementally. Our 2018 requests support
    security and maritime cooperation and enhance strategic trade
    controls.
        In the Maldives we have real concerns about the status of
    rule of law and democracy. Maritime security is also a great
    concern due to threats posed by narcotics trafficking, piracy
    in the Indian Ocean, and seaborne trade in illicit materials of
    potential use for terrorist activity. Our foreign assistance
    request continues targeted support for maritime security
    cooperation.
        South Asia remains among the least economically integrated
    regions in the world and non-tariff barriers are a major cause.
    Their regional programs will target the elimination of non-
    tariff barriers and the facilitation of regional trade and
    investment.
        In conclusion, South Asia is at the crossroads of the Indo-
    Pacific region whose sea lanes are critical to the security and
    prosperity of the United States. By promoting a common vision
    of economic growth, transparent development, accountability,
    and regional integration, the policies and programs supported
    by our fiscal year 2018 request will ensure that the United
    States continues to be a leader in advancing regional unity and
    stability.
        Thank you for the opportunity to testify, and I look
    forward to working with you and your staff.
        [The prepared statement of Ambassador Wells follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                                  ----------

        Mr. Yoho. Thank you for your opening statement, Ambassador
    Wells.
        Ms. Steele?

    STATEMENT OF MS. GLORIA STEELE, ACTING ASSISTANT ADMINISTRATOR,
       BUREAU FOR ASIA, U.S. AGENCY FOR INTERNATIONAL DEVELOPMENT

        Ms. Steele. Chairman Yoho, Ranking Member Sherman,
    Representative Brooks, Representative Connolly, thank you for
    inviting me to testify on the President's budget request for
    development assistance in South Asia. The President's budget
    request for USAID in the South Asia region is approximately
    $190 million. This request supports activities in Bangladesh,
    Nepal, and India--three countries in vastly different stages of
    development.
        In Bangladesh, the country finds itself at an important
    crossroads in its democratic evolution and economic growth.
    USAID has a diverse program helping to address the underlying
    factors that impede the country's progress and stability. Much
    hinges on the success of Bangladesh's secular democracy in
    preventing violent extremist attacks. The budget request
    supports USAID's program to strengthen citizen participation
    and government accountability. We are intensifying efforts to
    address the threat of violent extremism and recently awarded a
    new flagship project that will work to prevent recruitment of
    members of vulnerable groups by confronting key drivers.
        Advancements in agriculture have helped to drive poverty
    reduction and inclusive economic growth in Bangladesh over the
    past decade.
        But to continue this progress the country needs to shift to
    high-value agriculture. USAID is promoting crop
    diversification, market access, and modern farming practices to
    help farmers make this transition. We are also supporting
    improved disaster preparedness and natural resource management
    to sustain these gains amid frequent natural disasters and
    competition for scarce resources. On health, the budget request
    supports our continued efforts to improve maternal and child
    health, mitigate the spread of tuberculosis, and prevent
    chronic malnutrition and undernutrition.
        In Nepal, more than 10 years following the end of its civil
    war, the government is hampered by constant leadership changes
    and unresolved drivers of conflict. These include limited
    inclusion of traditionally marginalized populations and weak
    governance to meet public demand for quality services. The 2015
    earthquake was a significant setback for Nepal, pushing an
    additional 800,000 people into poverty.
        This budget request supports USAID's efforts to help
    fortify Nepal's fragile democracy, shore up its economic
    growth, and address persistent challenges in education,
    maternal and child health, and nutrition. So far this year, our
    support for the Government of Nepal has been critical in
    holding two phases of credible, broadly participatory local
    elections, the first in 20 years.
        USAID assisted with nine election-related bills as well as
    voter education initiatives and political party candidate
    training for women and members of other traditionally
    marginalized groups. The elections mark a historic devolution
    of power and resources to the local level, giving the people a
    stronger voice. As we support Nepal's transition to a
    democratic state with functioning local governance, we continue
    to support the combined national and provincial assembly
    elections scheduled for November 26th and December 7th.
        With 80 percent of Nepalis engaged in subsistence
    agriculture, USAID is working to modernize farming methods in
    order to improve productivity and increase incomes. At the same
    time, we are working to catalyze economic growth through
    agricultural commercialization and increased agribusiness
    competitiveness. Our agricultural programs contributed to a 36
    percent decrease in poverty in the targeted areas where we
    worked in the past 3 years.
        In India, although significant development gains have been
    made the country is still home to one-fourth of the world's
    extremely poor. Inequities abound particularly in health. More
    than 40 million Indians, a population equal to that of
    California, are pushed into poverty each year because of health
    care costs and illness-induced low productivity. Moreover,
    India accounts for roughly one-fifth of global maternal and
    child deaths and one-fourth of the world's new TB cases.
        Given its population of 1.3 billion, India's capacity to
    effectively respond to its pressing health challenges has
    proved understandably challenging. With a focus on improving
    maternal and child health and preventing the spread of TB, the
    budget request enables us to demonstrate high-impact models and
    approaches that more efficiently and effectively direct India's
    own resources to save lives. For example, India now uses a
    cloud-based patient feedback system that USAID helped them to
    develop in order to ensure better accountability and governance
    of services in hospitals.
        Mr. Chairman, Ranking Member Sherman, committee members,
    thank you for your support. Investing in global development
    progress remains in our national interest. In supporting the
    world's most vulnerable populations and in helping to build
    more stable, open, and prosperous societies, we strengthen our
    own security and help to generate new economic partners. Our
    efforts are both from and for the American people and reflect
    core American values of freedom, democracy, and stability.
    Thank you, and I look forward to your counsel and questions.
        [The prepared statement of Ms. Steele follows:]

        [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                                  ----------

        Mr. Yoho. I have to commend both of you. You were right on
    time, under the marker. That is good.
        I find this so important that we are talking about this
    today. Outside of India which is the largest democracy, and us
    being the oldest democracy, I see the South Asia region being a
    fledgling democracy area. When I look at Sri Lanka going
    through the civil war that they did, they had for 30-some
    years, now that we have a democracy in place, a fledgling one
    since what, 2015. The insight that we have coming from the
    business world is not to put good money after bad.
        We wanted to make sure that the investment we made stays,
    and the long-term benefit of that is there in the long term so
    that we can make sure there is rule of law and democracies that
    continue to foster those relationships in trade, economics,
    security, and cultural exchanges. It is so important that we do
    that.
        I know we are going through some fiscal challenges in our
    country, there will be austerity measures as we have seen, but
    that doesn't mean you move away from the investments we have
    already made. We want to make those stronger. And so as we move
    from some of the maybe cuts from 96 percent, but we see MCC
    coming in there and investing what is it, $500 million,
    roughly, in Sri Lanka, that we invest in the roads and the
    infrastructure and we build an economic base for those
    countries to build upon and it is so important that economic
    connectivity gets built upon.
        And for Ambassador Wells, it is unclear that in the fiscal
    year 2018 budget the amount of funds that are requested to
    further the Indo-Pacific Economic Corridor initiative, could
    you give us a breakdown of the amount of funds that you think
    are necessary for this initiative to be successful?
        Ambassador Wells. Thank you. I just returned from Sri Lanka
    where I had an opportunity to meet with the President, Prime
    Minister, Foreign Minister, and leadership, and we had a very
    good conversations on Sri Lanka's need to continue along the
    road of reconciliation, what is a fragile post-conflict
    society, the important commitments that the government made
    with our assistance to the United Nations and our determination
    to help Sri Lanka meet those commitments.
        I heard firsthand from the Sri Lankan leadership that they
    understood that they needed to intensify, that they are now
    starting to operationalize mechanisms like the Office of
    Missing Persons. They undertook the constitutional reform was
    going to continue and move forward. I think our role, our
    diplomatic role in ensuring that that reconciliation process
    continues is critical and we are deeply engaged with the Sri
    Lankan leadership in that conversation and have been since the
    dramatic formation of the national unity government.
        In terms of the reductions in assistance, I mean there has
    been again a rationalization of our assistance across the
    board. But what I would emphasize is that ironically in Sri
    Lanka we are the largest grant provider of assistance. China is
    providing non-concessional loans that promote unsustainable
    debt burdens which I think are increasingly now of concern to
    the Sri Lankan people and the government, but what we bring to
    our relationship are multiple tools.
        And so when I stand back and look at the totality of the
    relationship, how we have begun to engage incrementally on
    military-to-military engagement--we are going to have our first
    naval exercise in October--we have provided excess defense
    article equipment so that the Sri Lankans can perform more
    effectively as a maritime nation. We are starting an IMET
    program, moving from the enhanced IMET to a traditional
    professionalization courses IMET. Then you add to that our
    negotiation of a compact, we are actually close to, with
    congressional notification, a compact in Nepal.
        The Sri Lanka compact is in the process of being
    negotiated. We have allocated a little over $7 million this
    year to continue that process of defining what an MCC compact
    would look like and we would like to reach a compact by 2018.
    But that is, the kind of assistance that we bring is thought
    out, transparent, involves the public-private sector, has buy-
    in for civil society. The kind of investment that we make in
    Sri Lanka, I think, is deeply valued by both the government and
    the people. When I met with civil society representatives,
    including the leader of the Tamil opposition, they very much
    want to see a U.S. role and welcome our commitment to expanding
    both the economic as well as the diplomatic portion of our
    relationship.
        So I recognize that there has been a significant percentage
    reduction in the ESF, but I think outside of ESF we are using
    our tools to reinforce a message of reform and to bring Sri
    Lanka into a space where they too will institutionalize the
    principles of the Indo-Pacific. Freedom of navigation,
    transparency, non-militarization, humanitarian assistance and
    disaster relief at its core, and I think we are making good
    progress there.
        Mr. Yoho. I appreciate you bringing that up because it is
    so important, because we see how China has invested and it is
    loans, and they get them to where they are unsustainable and
    then they get into a situation where we saw the 99-year lease
    in Sri Lanka. And the investment that we want to do, we want
    them long term and it is to grow their economy, their economic
    base, the jobs for their youth. You said half the population in
    South Asia is under the age of 17.
        I found it astounding that you said 70 percent of the
    infrastructure needed by 2013 is yet to be built. I think with
    our business model, our relationships in investing in their
    country for their economic development is the way to go versus
    funding or loans as China does, and we see that all over the
    world. And it is important the jobs that both of you do, all of
    our diplomatic core as they represent the United States of
    America to concentrate on that economic development, because if
    it is the economic development they have they are going to
    guard it, they are going to protect it, and it is going to make
    our alliance stronger. So I commend you.
        I am out of time, and I know, Ms. Steele, you had something
    to say, but hopefully we can come back to you. I am going to
    turn to the ranking member. Thank you.
        Mr. Sherman. Thank you, Mr. Chairman. Once again you have
    shown brilliance by starting your questioning regarding Sri
    Lanka. I will imitate that brilliance.
        As I understand it Ambassador Wells, we are talking about a
    92 percent decline in our aid to Sri Lanka. Does this request
    include any support for reconciliation and reform efforts in
    Sri Lanka, and what signal are we sending with a 92 percent
    reduction? Ambassador?
        Ambassador Wells. I turn to my colleague to discuss the
    specific USAID programs, but again I recognize the severity of
    the percentage decline in the ESF but I would point to the
    totality of our programs. On the reconciliation side,
    diplomatically, we have always been the leading partner in
    driving the original agreement with Geneva which produced the
    government's historic----
        Mr. Sherman. So we do a great job of talking, which is what
    diplomats and congressmen do, but in my world money talks and a
    92 percent decline in money cannot be covered up by eloquence
    or good offices or even the art of the deal negotiations.
        Ms. Steele, we are talking about $3.3 million. That is
    basically--I hesitate to ask you about the aid for Sri Lanka
    because it has basically been zeroed out. I am sure Congress
    will not do that. But can you support reconciliation reform
    with $3.3 million?
        Ms. Steele. Mr. Sherman, we have invested $70 million since
    2015 and we worked in reconciliation, economic growth, and good
    governance. We have been using those resources which continue
    to be still available, some of them, to build their capacity to
    continue to be able to do what we started out to do.
        Mr. Yoho. Ms. Steele, thank you. I do want to go on to the
    next question.
        I am sure Ambassador Wells, you are well aware of the
    Rohingya. As additional background, America saved the people of
    Kosovo by bombing a Christian country. We saved the Muslims of
    Bosnia. So my question is twofold. First, are we going to
    cajole or pressure Aung San Suu Kyi and the Government of
    Burma, Myanmar, to start respecting these people's rights, to
    change their legal structure so that groups that have been
    there for 100 years and longer are given citizenship; and
    secondarily, what are we going to do so that Muslims around the
    world know that we saved the Muslims of Kosovo and Bosnia, and
    here we are playing in a major role or what I hope will be a
    major role, in saving those of Southwest Burma?
        Ambassador Wells. Thank you. When I was in Bangladesh it
    was at the onset of the refugee influx. At that time it was
    about 20,000. It is now over 160,000, I believe, and the human
    tragedy is compelling. What we have worked to do is both to
    assist Bangladesh in responding to the crisis we are waiting--
    --
        Mr. Sherman. Ambassador, the easy thing is to just throw
    money at refugees in Bangladesh.
        Ambassador Wells. In addition----
        Mr. Sherman. How tough are we going to be on the Burmese
    Government?
        Ambassador Wells. In addition to the assistance we will
    provide to the--are providing and will continue to provide to
    the Bangladesh Government, the U.N. had a--Kofi Annan went out
    and did a report on the situation which produced several
    recommendations including recommendations like a joint
    commission on border management. We are working to see how we
    can have both countries sit down and implement some of those
    recommendations. But I agree with you that this is a crisis and
    there needs to be both a humanitarian and a political response
    to it.
        Mr. Sherman. But does Aung San Suu Kyi recognize her debt
    to those of us and millions and millions of Americans who
    worked for democracy in her country and are now watching the
    government over which she has significant influence carry out
    these atrocities?
        Ambassador Wells. I am afraid I am not able to speak for my
    colleague, Acting Assistant Secretary Susan Thornton, but
    from----
        Mr. Sherman. Okay. So your jurisdiction does not include--
    --
        Ambassador Wells. It does not.
        Mr. Sherman. Okay. And if I can sneak in one more question,
    when a business asks for the help of the State Department and
    says it is important, do you look at how many jobs are involved
    in the project or could you end up working just as hard because
    a big business looking for a foreign supplier to be helped,
    looking to license IP, looking to do things that are very
    profitable for the company but involve very few jobs? Do you
    have a jobs analysis that guides you in determining how much
    effort to put into an economic request?
        Ambassador Wells. Our goal is always to support American
    business and analyses are done of the individual proposals and
    their effect on creation for U.S. jobs. Companies have to
    petition to the U.S. Department of Commerce in order to receive
    advocacies, specific advocacy for that company, in which case
    they have to be the only American company competing to have
    specific recognition.
        Mr. Sherman. But if you have two projects, one in one
    industry, one in another industry, they are the only American
    companies--one, they both will produce $100 million worth of
    profit for the companies, but one will produce a lot of jobs
    and one is just IP licensing, what mechanism do you have to
    prioritize the jobs profits over the licensing profits?
        Ambassador Wells. We will advocate for all U.S. companies
    under that circumstance.
        Mr. Sherman. Okay. I yield back.
        Mr. Yoho. Yeah, we will probably do three rounds. The
    wisdom of Congress is that we book all of our meetings at the
    same time and so people who are on the Judiciary--and you know
    how it goes. Anyways, let's move on.
        I would like to talk about the Maldives. Being an island
    nation of 393,000 people, roughly, it represents a growing
    terrorist threat. They are one of the largest sources of ISIS
    fighters per capita in the world operating abroad. Knowing
    that, what is the administration's reasoning for nearly
    eliminating the already modest U.S. assistance commitment to
    the Maldives? Ms. Steele?
        Ms. Steele. We recognize that violent extremism is a very
    important issue in the Maldives and we are in the process of
    putting together an assessment team to take a look at what we
    can do to help address the drivers of violent extremism in the
    Maldives at this time.
        Mr. Yoho. Okay. Ambassador Wells, do you have any comment
    on that?
        Ambassador Wells. We are also assessing how we can enhance
    our information sharing relationship with the Maldives in order
    to counter terrorism, counter violent extremism while at the
    same time recognizing that the government, the President, has
    consolidated control, has stripped the authority of many
    democratic institutions. There are complications and challenges
    in working with the Government of the Maldives.
        Mr. Yoho. Okay, let me ask you both because we hear about
    the cuts for Sri Lanka but we don't talk about the investment
    of MCC of $500 million, roughly. Are the other countries, are
    we at a point where MCC is going into Bangladesh, the Maldives,
    Nepal, have we looked at business models? Because the way we
    invest on those we hold the countries accountable with the
    metrics that are set up in those and it is more of an
    investment in the infrastructure and business.
        What are your thoughts on that, say, for the Maldives? Have
    we looked at that?
        Ambassador Wells. The MCC has very rigorous standards and
    criteria for countries to be eligible for compacts. Currently,
    within the South Asia region it is Nepal and Sri Lanka who are,
    Nepal is at the end stage of negotiating the compact and Sri
    Lanka is at the beginning. So the criteria will still need to
    be applied so there is no movement at this stage to consider a
    compact for the Maldives.
        Mr. Yoho. Okay. And in your experience in the countries
    that have used the MCC business model do you find that more
    effective than just foreign aid through USA--through some other
    form versus, you know, just giving money out and doling it out
    like we have done in the past in other countries?
        Ambassador Wells. I think they are very complementary and I
    will turn to Gloria. But my personal experience is that the MCC
    and its ability to do public-private partnerships, to tap in
    the government and the business community, and to implement
    gender-related components to it has been very useful in
    multiple compacts. But it doesn't substitute for all the other
    assistance work that we do. Gloria?
        Ms. Steele. Yes. When I was in the Philippines, I was
    Mission Director in the Philippines before coming here and we
    had an MCC compact there as well as a robust Partnership for
    Growth program run by USAID, and they are complementary. They
    don't actually--they don't substitute for one another. We work
    on very specific issues that are of the time important to them.
    We did an analysis with them to identify what areas they wanted
    to work with and they complement what MCC does.
        But MCC's analyses of the programs they do are put together
    5 years before because it is a 5-year compact and so we focus
    on the constraints they face at the time. They are
    complementary but they don't substitute for one another.
        Mr. Yoho. Okay, thank you. With President Trump's speech, I
    think it was a week or two ago where he was talking about our
    pivot with Afghanistan and Pakistan and India's more increasing
    role with Afghanistan and we saw India's willingness to stand
    up to China in the Northern Territory and then we saw the
    resolution of that peacefully. Thank God. Are there provisions
    in the proposed budget that could help deepen the U.S-India
    security partnership which could be beneficial in checking
    China's unwarranted territorial claims through the rest of
    Asia?
        Ambassador Wells, you brought up the mil-to-mil cooperation
    between the United States Navy with Sri Lanka. What are your
    thoughts on that dealing with India and how can we strengthen
    that relationship?
        Ambassador Wells. The United States supports peaceful and
    stable relations globally among all countries, including India
    and China, and our goal ultimately in the Indo-Pacific region
    is, you know, every nation should be able to work together to
    uphold international norms and to prosper. While we strongly
    support, we obviously strongly support a prosperous India that
    plays a leading global role, both China and India are leading
    powers but our relationship with India really stands on its
    own. It stands on its own because it is based on democratic
    values, on close political and economic ties.
        If you look at the military relationship between the United
    States and India, it is an extraordinary story over the last 10
    years where we went from zero in military sales to $15 billion.
    We are currently holding the largest military exercise with
    India and Japan, the Malabar exercise that brings together
    10,000 personnel and our largest carriers. We are with India as
    a major defense partner.
        We are able to now offer advanced technologies, and during
    the visit of Prime Minister Modi with President Trump in June
    we had the unprecedented offer of the nonlethal Sea Guardian
    UAV for maritime security. Now we want to build on that
    military partnership. India over the next 7 years is projected
    to spend $30 billion in military modernization. Our companies
    like Boeing and Lockheed with the F-18s and the F-16s are
    natural competitors and would deeply enhance our
    interoperability with India.
        But then how do we build that relationship further outward?
    So we are already working with Japan. There are opportunities
    to work with Australia. How do we as democratic nations that
    share values enshrine those values? And again freedom of
    navigation, demilitarization, you know, working together on
    disaster response, humanitarian assistance, setting a standard
    for the region.
        I think when I was at this conference in Colombo which
    brought the countries of the region, really, from the
    Seychelles to Singapore together I was impressed by the unity
    of purpose. People seek that. They want that. We have an
    opportunity to create this working relationship.
        Mr. Yoho. Thank you.
        Mr. Sherman, round two.
        Mr. Sherman. I want to pick up where I was on
    prioritization of two different companies that would like your
    assistance. You don't have unlimited resources, so one
    possibility is that advocacy for a U.S. company consists of
    just sending a letter or rubber-stamping a document in which
    case you do have unlimited resources. You could send out 1,000
    letters a year, but I would hope that you are doing more than
    that.
        If you have to prioritize between--I mean, do you have
    unlimited, I know you don't have unlimited resources. Are there
    significant resources being used to advocate for U.S.
    businesses? And given the fact that your resources are limited,
    how do you prioritize which companies to put a lot of effort
    behind?
        Ambassador Wells. I mean in countries where you have a
    vibrant trade relation and foreign direct investment
    relationship then yes, I mean the bigger deals where we are
    eligible and allowed under U.S. regulation to lobby
    specifically for a company those projects that deliver more
    jobs for Americans are going to occupy the attention.
        Mr. Sherman. How are you certain that your--because we
    talked privately in my office. I brought to your attention the
    fact that an ambassador was advocating for German-built cars,
    not in your region I might add. So how do you, do you get a
    report as to okay, I have limited resources. I could put a
    little more time in this project or that project, do you get
    any report as to how many U.S. jobs are involved?
        Ambassador Wells. When countries apply----
        Mr. Sherman. Or is it just the size of the deal? Because
    they both could be $100 million deals but one is $100 million
    of licensing as the one that is $100 million of product. So
    they both, if you just say how big is the deal they are the
    same size deal, but what do you do to prioritize jobs to know
    how many jobs are behind the project?
        Ambassador Wells. No, I am speaking now from my personal
    experience as a former Ambassador to Jordan. And there what you
    receive from the Commerce Department, and I would have to defer
    to my Commerce colleagues, you receive an analysis of what the
    deal is and an understanding of the----
        Mr. Sherman. I would urge you to insist for the Department
    of Commerce that jobs be the first line. Not how many profits,
    not how big is the deal, how many jobs.
        I want to go on to Sindh. We have seen disappearances, both
    of those who advocate for the Sindhi-speaking community and
    those who advocate for the Muhajirs. These two groups don't
    tend to get along but it seems like their political activists
    are disappearing. I look forward to working with you to make
    official inquiries of the Pakistani Government of political
    activists who have just disappeared including the brother of a
    friend of mine.
        I know that we have a Web site from the consulate in
    Karachi in the Sindhi language. We do some public diplomacy
    which means the State Department has determined that reaching
    out in the Sindhi language makes sense. Have you communicated
    that over to the broadcasting board of governors saying, hey,
    we are reaching out to people in the Sindhi language, you
    should too? Or more importantly, what do I do to get you to do
    that?
        Ambassador Wells. You have just inspired me to reach out.
    But I would note that in countries like Sri Lanka, for
    instance, our Embassy is doing programming in seven languages
    and its seven different markets. We are often confronted in
    places like Pakistan and India where there are multiple
    languages that have deep reach at the state level or even lower
    where there is a need to target information. So I absolutely
    take your point----
        Mr. Sherman. I ask questions about Sri Lanka. It is very
    important. Pakistan has an undisclosed number of nuclear
    weapons and three or four major languages and it is important
    that we reach out beyond just Urdu. The State Department has
    done that and my inspiring you will inspire the board of
    governors of the broadcasting operation to do the same.
        Let's see. Oh, you mentioned airplane exports to India
    either in our private conversations or here. That may be our
    biggest single export to India. We are in competition with
    Europe. They have an export finance authority. We have the EXIM
    Bank. Without the EXIM Bank we are at a distinct disadvantage
    in selling planes to India.
        Have you found the EXIM Bank to be helpful and do you think
    that we would have an even bigger trade deficit with India if
    we didn't have an EXIM Bank?
        Ambassador Wells. I can't comment on what motivates
    individual companies. I mean over the course of my career of
    course I have appreciated the work of EXIM in supporting U.S.
    exports and particularly in the aircraft sector, but I would
    note that in our trade relationship with India these exports
    are continuing regardless. During the Prime Minister's visit in
    June we had the announcement of a $23 billion plane sale and
    planes, commercial aircraft as well as military aircraft, are a
    key sector for exports in the future.
        Mr. Sherman. Well, I hope that the President will appoint
    people to the board of directors of EXIM Bank that will carry
    out its duties. Otherwise, you may be back here assuming that
    you--well, assuming that Rex Tillerson takes my advice and
    makes you the permanent assistant secretary.
        Do you have a plan to reach balanced trade with the major
    countries in our area? Because if I share one thing with the
    President it is a real focus on the trade deficit numbers
    because those numbers translate into real jobs, real lives,
    lives that can be ruined, lives that I have seen being ruined.
    We have this trade deficit. You are doing a few things about
    it. But do you have a goal? Do you have a strategy designed to
    achieve a particular goal and is a balanced trade relationship
    the goal?
        Ambassador Wells. It is a clear priority for the Trump
    administration, absolutely. During the visit of Prime Minister
    Modi with President Trump, this was discussed. And I think
    that----
        Mr. Sherman. Was it discussed in the nature not of, well,
    we would like to sell more to India; was it discussed in the
    idea we want to achieve balance in the trade? Because when I
    first got to Congress, an administration official said yes, if
    we could expand exports by $1 billion and expand imports by $2
    billion that would be great because we would have $3 billion
    more in trade. And so is the goal just, is there a strategic
    goal to reach balance with India and with Bangladesh?
        Ambassador Wells. The administration is doing an assessment
    of the top countries with trade deficits and the goal is to
    equalize and reduce those trade deficits. In the case of India
    there are obvious areas where we can work to improve IPR
    protection, to reduce non-tariff barriers. We have several
    high-level, serious dialogues through USTR and the Department
    of Commerce to tackle specific sectorial issues. We have used
    the WTO in the case of our chicken, our poultry and egg
    exports, where we expect India to implement the WTO ruling and
    this is a major part of our dialogue.
        Mr. Sherman. I have got to interrupt for one more question
    because I promised you I would ask this. Is India going to
    change its liability laws to put America nuclear plant builders
    on the same liability footing as those entities that have
    sovereign immunity such as those from China, France, and
    Russia?
        Ambassador Wells. India took three actions. They joined the
    convention on Supplementary Compensation for Nuclear Damage. It
    is a multilateral treaty.
        Mr. Sherman. Did they sign the additional protocol?
        Ambassador Wells. The additional protocol of the IAEA?
        Mr. Sherman. I think there is a particular--please
    continue.
        Ambassador Wells. So they joined this multilateral treaty
    that lays out a framework for liability and then they announced
    guidance that its nuclear law, domestic nuclear legislation,
    was in conformance with that law. Then the third thing they did
    was they set up a domestic insurance pool for operators and
    vendors for liability from nuclear accidents. Those three steps
    are designed to increase confidence in the domestic and foreign
    companies in the nuclear industry.
        Mr. Sherman. Are companies----
        Ambassador Wells. All I can say is that Westinghouse found
    them sufficient.
        Mr. Sherman. Westinghouse. Now if they could just move
    their jobs back to the United States I would be more happy with
    them. I yield back.
        Ambassador Wells. Can I respond to----
        Mr. Sherman. I didn't even mention global warming. We
    talked about the Maldives.
        Mr. Yoho. No.
        Mr. Sherman. I didn't mention the ex-Maldive island.
        Mr. Yoho. I said tax reform.
        Ambassador Wells. But the $10 billion in U.S. content, in
    export content in the nuclear deal, potential in the nuclear
    deal, we believe would generate 50,000 jobs.
        Mr. Yoho. 15,000?
        Ambassador Wells. Yeah.
        Mr. Yoho. No, I want to build on that. When we look at what
    China's done with the One Belt One Road, there is over $1
    trillion invested, roughly, that they have invested through
    loans from other countries and they have such a strong
    presence. Do you feel the business model that we are working
    with our foreign aid as small as it is, but more importantly
    with the relationships we are developing with like-minded
    democracies, is enough to offset that? And our mil-to-mil
    cooperation with India and with Sri Lanka, what are your
    thoughts on that? Is that enough to fend off the encroachment
    of China with their investments?
        Ambassador Wells. I mean our priority has been to increase
    interregional connectivity.
        Mr. Yoho. Right.
        Ambassador Wells. If you look at the region, their
    interregional trade comprises only 2 percent which is the
    lowest in the world. A lot of what we bring to the table is the
    soft assistance, helping with regulations and frameworks and
    how do you do customs and how do you streamline procedures. And
    that assistance has proved, I think, very useful for countries
    like Bangladesh and India, where in my written remarks I note
    it takes 20 permits to export something from one side of the
    border to the other. So how do we break down those barriers?
    How do we use MCC to promote, you know, electricity trade
    between Nepal and India?
        Mr. Yoho. Right, with the hydroelectric investment.
        Ambassador Wells. Exactly, and also the road maintenance
    component of it, so you actually have the infrastructure that
    can support the trucks that can support the trade. And so, you
    know, these are very specific sometimes and targeted regulatory
    reforms, other times they are major investments in
    infrastructure. But I think we are seen as an extremely
    credible and valuable partner in this effort. Gloria?
        Mr. Yoho. Ms. Steele, can you add to that?
        Ms. Steele. Yes, I think that what we are doing in all of
    Asia I would say is trying to level the playing field for
    American companies to be able to come in. In many of the
    countries in which we work, we work with the governments to be
    able to do public-private partnerships so that they don't have
    to go into debt but rather attract investments leveraging their
    own funds. And that I have found, this has also helped to keep
    more investments from other countries including China to come
    in. It has worked there effectively in East Asia in particular
    where we have done that.
        Mr. Yoho. Okay, thank you. I am going to ask something, it
    could be a little controversial. But a potential challenging in
    the U.S.-India relationships and partnership is the rise of the
    Hindu nationalist politics which detract from the India's
    traditional, inclusive, multi-faith democracy. A less
    harmonious India raises human rights concerns and endangers our
    growing partnership. What are the administration's priority
    regarding human rights in India?
        Ambassador Wells. India provides the highest constitutional
    protections for religious minorities, and our goal is to work
    with India and to encourage India to meet the goals that it
    sets for itself in its own constitution and its laws. There are
    cases obviously of religious, as we detail in both the Human
    Rights Report and the International Religious Freedom Report,
    of infringements and there was the tragic murder of a
    journalist just this week who was often the subject of
    nationalist criticism.
        These are challenges for any democracy, but India is a
    democracy and it is a vibrant democracy and we have respect for
    Indian institutions and ability to rise and meet these
    challenges, and we certainly in all of our engagements at
    senior levels encourage the Indian Government to do so.
        Mr. Yoho. Okay. Ms. Steele, I am going to ask you something
    because Dr. Bera is on his way down, I heard, and this probably
    doesn't get asked a lot of people in your situation or your
    position, but what is it that you could see from the United
    States Congress that if we changed in our policies or
    directions would help facilitate what you do?
        I know appointing people would be a good thing or getting
    them through the Senate. I will bring it up to--I will agree
    with my colleague here that there have been a lot of positions
    appointed but they haven't been passed through the Senate. I
    know that would be something--and I see you guys both writing
    things down so this will be good.
        I will let you direct these at Mr. Sherman--no, both of us
    because so many times we get the information, and I know there
    are things that you have said, man, if they would have asked
    this, or, you know, if there is something that we should have
    asked that we didn't, I would like to hear your thoughts if you
    are comfortable doing that.
        Mr. Sherman. And don't hesitate to say that the President's
    budget requests are completely wrong and that we should be
    providing far more money especially for Ms. Steele's efforts.
        Mr. Yoho. If you do that do it in the third person. I am
    not saying this, but somebody else told me this.
        Mr. Sherman. Yes. I will add that to the question. Do you
    know intelligent people who believe that the President's budget
    requests are completely wrong and that higher amounts should be
    spent?
        Ambassador Wells. I just want to say I am very honored that
    the Secretary Tillerson has trusted me as a senior career
    officer of 28 years' experience to lead the Bureau at this time
    and I think it is a mark of his faith in the institution that
    he has done so. There is a very ambitious and I think very
    credible and inclusive discussion of reform of the State
    Department that is underway. It is coming to its conclusion and
    I know we all look forward to its results. I would say that I
    am sitting here before you because Secretary Tillerson trusts
    the colleagues, the career colleagues that he is working with.
        I interpreted your question a little bit differently on
    what Congress can do. I mean what I would encourage, I really
    encourage congressional visits. Many of these issues are so
    complicated to understand the dynamic in Sri Lanka, to
    understand India's rise and the complexity of India as a
    democracy, and the challenges that a democratic government in
    India has to navigate is best seen firsthand. In my experience
    as a Foreign Service Officer and as an ambassador, having
    congressional visits really built the strength and the
    foundation for a relationship.
        Mr. Yoho. I appreciate you saying that because I just got
    back from a codel to South Korea and Taiwan and we hear the
    same thing there, you know, congressional delegation visits,
    the higher up the better because it shows that cooperation and
    alliance.
        Ms. Steele, do you want to add to that?
        Ms. Steele. Yes. Especially at this time when resources are
    more limited, we would like to be able to build a more trusting
    relationship between you and us so that flexibilities, a little
    bit more flexibilities will be available to us to be able to
    use resources, the limited resources that we have.
        Mr. Yoho. Maybe we should visit the State Department then?
        Ms. Steele. No, we will come and visit you more often and
    provide information, because I think that the relationship
    built on more trust will enable us to be more responsive and
    agile on the needs of, vis-a-vis the needs of the countries,
    and this is particularly important when resources are limited.
        Mr. Yoho. It really is and that trust builds on the
    relationships built on that trust and I think it so important.
    So many times I feel like when people like you come into a
    hearing you feel like it is a to-get-you type and it is not.
    Our goal is to make our relationships with the countries and
    the regions that we represent stronger and we rely on your
    information.
        With that I am going to turn over to Dr. Bera who I just
    had the pleasure to be in South Korea and Taiwan. Doc.
        Mr. Bera. Thank you, Mr. Chairman. I think this is a very
    timely hearing, obviously, as we think about the U.S. role in
    the world the important mission of USAID and the emerging
    importance and dynamism of South Asia. Let's think about it in
    a couple ways.
        I know we will be having a hearing on Afghanistan but the
    interconnected nature between Afghanistan, India, and Pakistan
    was highlighted in the President's comments, I guess it was a
    week ago, last week. As we look at our continuing mission in
    Afghanistan I know USAID has had a role, but the President--and
    I would actually support the President's statement that the
    importance of India continuing to have a role in helping build
    infrastructure, helping build stability and then the complexity
    of Pakistan there in terms of harboring some of the groups that
    are creating an instability there creates this complication,
    Pakistan's concern when the more India is involved in
    Afghanistan the more Pakistan seems to get concerned as well.
        I would just be curious, Ambassador Wells or Ms. Steele,
    how you would think about that in terms of kind of negotiating
    and navigating that with the desire of creating that stability
    in Afghanistan and how it interrelates with India and Pakistan.
        Ambassador Wells. Well, just as Pakistan has very real and
    legitimate security interests in Afghanistan so does India. We
    would like to see, and appreciate constructive economic
    investments, investments in Afghanistan's stability and
    institutional stability, and so if you look at India, by 2020
    they have pledged to spend $3 billion. Some of the projects
    they have already funded include the Parliament House, an
    important dam, training in India for experts and in agro
    experts very vital programs that and Afghanistan is going to
    need.
        In that instance, I think the more international partners
    we can bring to bear who do constructive investments again in
    the economic sphere and in the development sphere we are very
    supportive of.
        Mr. Bera. All right.
        Ambassador Wells. I have nothing to offer.
        Mr. Bera. Okay. And as we think about that role we will
    continue to have a presence there trying to provide training
    and security and we have made significant investments in
    Afghanistan in terms of educating a generation of girls. You
    are seeing a younger generation that is now as they enter
    adulthood does give Afghanistan this possibility of creating
    those civil institutions and we would hate to lose some of
    that.
        Shifting to some of the projects in India that I have had a
    focus on in terms of empowering women and girls in India, I do
    have some real reservations about the proposed budget cuts that
    would decimate some of these programs, some of the cuts to
    UNFPA. Again, I don't think this is a time for the United
    States to be stepping out of that void, especially as India
    historically has been a recipient nation. As it is starting to
    develop, it also is developing into being a donor nation and
    partnering with us to do some interesting things as we go into
    third countries into Africa and so forth.
        I guess again whoever it is appropriate to, Ambassador
    Wells, maybe you want to touch on the importance of maintaining
    some of those investments that we have in India.
        Ambassador Wells. We really see our relationship with India
    transitioning. As India itself becomes an increasingly
    important provider of assistance in the region, we are moving
    away from India as a donor recipient to India as a partner, as
    you said, in third countries.
        We have done interesting work in Africa. There are
    opportunities for us to do joint training in Afghanistan. And
    so what we have tried to do, and I will refer to Gloria here,
    is to really prioritize the remaining funding in those areas
    where we think we can provide the best multiplier effect or
    assist Indian private sector and government in being able to
    tackle a problem more creatively and effectively.
        Mr. Bera. Great. Ms. Steele, do you want to----
        Ms. Steele. In following up on the theme of prioritization,
    the health situation in India, we have prioritized working on
    the health situation in India. It is probably one of the worst
    problems and where we can be better partners and where our
    dollars will make a bigger difference. They have more incidence
    of TB than any in the world. They have one-fourth of the
    maternal and child mortality in the world. And so with the
    limited resources we have, we have prioritized funding in India
    around health, TB prevention and cure, and maternal and child
    health.
        Mr. Bera. And obviously if we could get you more funding
    then you could have a bigger impact; so thank you.
        Ms. Steele. Yes.
        Mr. Yoho. Thank you for that.
        Next, we will go to Mr. Connolly from Virginia.
        Mr. Connolly. Thank you, Mr. Chairman, and thank you for
    holding this hearing. Great to see you both again. I will say
    you have got a job to do and God bless you for trying to do it.
    But when we talk about South Asia perhaps it is the most
    effective region in the world with respect to the retrograde
    policies of the Trump administration. Ripping up TPP, ripping
    up our participation in the Paris climate accord and of course
    slashing AID's budget especially in this region, all those
    things probably have the most effect, the most intense effect
    in South Asia than anywhere else on the planet.
        To that end, correctly debating, and I know my friend, the
    chairman of this committee, he is going to defend Trump, but I
    also know that Ted Yoho has really reflected on how important a
    foreign assistance program is. It is a modest investment. It is
    a modest part of our diplomatic machinery to keep America great
    and I really applaud the chairman of the subcommittee for
    articulating that position.
        I know that was not his original position when he first got
    elected to Congress, but like all of us we learn. We come to
    appreciate. I certainly hope that happens in the administration
    because the cuts being proposed, the retreat being proposed, I
    think is profoundly deleterious to U.S. interests and simply
    opens the way to another power in Asia that is only too happy
    to walk through that opening. That is not making America great
    again, that is making America weak again.
        Let me ask you, Ms. Steele, and feel free, Ambassador
    Wells, to comment. I am not asking you to comment on what I
    just said because that would impolitic for both of you. In
    fact, I am going to say for the record you both vehemently
    disagree with everything I just said, defending the Trump
    administration.
        But South Asia, we have got the heaviest monsoon rains in
    40 years, 1,400 dead, hundreds of thousands of homes damaged or
    destroyed, 41 million people directly affected, and a third of
    an entire sovereign nation, Bangladesh, underwater. How well
    prepared are we to respond to that crisis, Ms. Steele?
        Ms. Steele. We are prepared to respond to the crisis when
    and if they request for our assistance.
        Mr. Connolly. I am sorry, I can't hear you.
        Ms. Steele. When they request for assistance we will be
    there.
        Mr. Connolly. You mean Bangladesh has not requested any
    assistance?
        Ms. Steele. No, not on the flooding. Nepal has, but
    Bangladesh has not. They have not right now, but we are poised
    and prepared to assist when they do.
        Mr. Connolly. Could the fact that a third of an entire
    sovereign nation, Bangladesh, being underwater, could it have
    anything at all to do with, I don't know, the warming of the
    climate? Hmm, all right.
        Ambassador Wells. Could I just add another dimension to----
        Mr. Connolly. Of course.
        Ambassador Wells. In our military-to-military cooperation
    we have done extraordinary work in disaster assistance,
    humanitarian response, including with Bangladesh and with
    Nepal. In fact, we tragically lost seven of our own in Nepal in
    a helicopter accident in the wake of the earthquake response.
    And so in Bangladesh where we have built over 500 cyclone
    shelters, we have worked on how you manage water resources,
    there has been a significant U.S. investment in that effort and
    an ongoing commitment to increase the capacity of Bangladeshis
    to respond.
        Mr. Connolly. I appreciate that Ambassador Wells, but the
    fact of the matter is the Trump budget slashes health for these
    three countries by 50 percent and this flooding is now leading
    to a mass outbreak of diarrheal related diseases, malaria,
    Dengue fever, and possibly cholera. How can we in good
    conscience cut our health budget to these countries in half in
    light of what is happening in front of our faces? How can we
    justify that? How can we make those programs efficacious with a
    50 percent cut?
        Ms. Steele. On humanitarian assistance and disaster
    response, these are not bilaterally allocated. We have a
    central fund for humanitarian assistance. As I mentioned
    earlier, Mr. Connolly, we are prepared to respond when they
    request for our assistance and they have not done so. And I
    believe as my colleague Alice said, we have invested in helping
    them mitigate the impacts of disasters and we are ready. The
    budget that you see that is allocated for these countries does
    not reflect the humanitarian assistance budget that we have
    centrally.
        Mr. Connolly. Mr. Chairman, will you allow me just one
    follow-up question with respect to Bangladesh?
        Mr. Yoho. Okay.
        Mr. Connolly. I thank the chair. Why hasn't Bangladesh
    asked for our help? I am puzzled by that. I mean maybe the
    phone is underwater with the rest of the country.
        Ms. Steele. I do not know the response to your question and
    I will follow up and ask, but we have not received----
        Mr. Connolly. And Ambassador Wells, do you have any idea?
        Yeah, thank you. I am sorry. I just, I don't want to--I am
    running out of time, so I didn't mean to be abrupt.
        All right. Well, if anyone is listening, Bangladesh, please
    call. Got a phone number? No? All right, State Department,
    thank you. Thank you, Mr. Chairman.
        Mr. Yoho. Thank you. Dr. Bera would like to have another
    shot at some questions if you guys are okay.
        Mr. Bera. Yeah, I actually just wanted to make a statement.
    You know, listening to my colleague Mr. Connolly as well as
    being a classmate of Chairman Yoho and serving on Foreign
    Affairs with Mr. Sherman, this is an incredibly important time
    for the United States with everything going on around the world
    and in South Asia to continue to stay engaged and involved.
        Both Ambassador Wells and Ms. Steele, you guys are doing
    the best you can within the circumstances and the resources
    that are being provided, and I think it is important to make a
    statement about the public servants who serve us within the
    State Department and represent our country around the world.
    Again I just want to make a statement on how much as a member
    of the Foreign Affairs Committee and a Member of Congress we
    appreciate their service. We understand they are doing what
    they can and I think it is important for us to let them hear
    how much we as Members of Congress as well as the public and
    the citizens of the United States appreciate that service and
    representation, so thank you.
        Mr. Sherman. If the gentleman will yield, I so appreciate
    the individuals who work at the State Department. I married one
    of them.
        Mr. Yoho. Well said on both counts with both of you,
    because I was going to end that way.
        Ambassador Wells, Ms. Steele, as you go forward, as our
    State Department goes forward in these economic times that we
    are having in our country and as we are having some challenges
    here, we may be cutting some programs, but we are going to
    replace it with the goodwill as you said the humanitarian
    assistance. You are the spokesmen for the United States
    Government as you go to these countries and we rely on you to
    instill into those countries the belief that we are here with
    them. We will stand with them. We will work through our
    challenges, but we are there to provide that assistance.
        So I do appreciate it. This committee, I think, speaks as a
    voice of unity in saying that same thing, and again I can't
    tell you how much we appreciate you coming in, being up front
    and just very engaging. Thank you both. This meeting is
    adjourned.
        [Whereupon, at 11:21 a.m., the subcommittee was adjourned.]

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