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

                        BUDGET PRIORITIES FOR SOUTH ASIA

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

                                    HEARING

                                   BEFORE THE

                      SUBCOMMITTEE ON ASIA AND THE PACIFIC

                                     OF THE

                          COMMITTEE ON FOREIGN AFFAIRS
                            HOUSE OF REPRESENTATIVES

                         ONE HUNDRED FIFTEENTH CONGRESS

                                 SECOND SESSION

                                   __________

                                 JULY 25, 2018

                                   __________

                               Serial No. 115-163

                                   __________

            Printed for the use of the Committee on Foreign Affairs

                     [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    Available: http://www.foreignaffairs.house.gov/, http://docs.house.gov,

                           or http://www.Govinfo.gov

                                     ______

                         U.S GOVERNMENT PUBLISHING OFFICE

    30-889PDF    		   WASHINGTON : 2018

                          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
    MO BROOKS, Alabama                   AMI BERA, California
    PAUL COOK, California                LOIS FRANKEL, Florida
    SCOTT PERRY, Pennsylvania            TULSI GABBARD, Hawaii
    RON DeSANTIS, Florida                JOAQUIN CASTRO, Texas
    MARK MEADOWS, North Carolina         ROBIN L. KELLY, Illinois
    TED S. YOHO, Florida                 BRENDAN F. BOYLE, Pennsylvania
    ADAM KINZINGER, Illinois             DINA TITUS, Nevada
    LEE M. ZELDIN, New York              NORMA J. TORRES, California
    DANIEL M. DONOVAN, Jr., New York     BRADLEY SCOTT SCHNEIDER, Illinois
    F. JAMES SENSENBRENNER, Jr.,         THOMAS R. SUOZZI, New York
        Wisconsin                        ADRIANO ESPAILLAT, New York
    ANN WAGNER, Missouri                 TED LIEU, California
    BRIAN J. MAST, Florida
    FRANCIS ROONEY, Florida
    BRIAN K. FITZPATRICK, Pennsylvania
    THOMAS A. GARRETT, Jr., Virginia
    JOHN R. CURTIS, Utah

         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, Principal Deputy Assistant
      Secretary, Bureau of South and Central Asian Affairs, U.S.
      Department of State............................................     9
    Ms. Gloria Steele, Senior Deputy Assistant Administrator, Bureau
      for Asia, U.S. Agency for International Development............    18

              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....................................     4
    The Honorable Alice G. Wells: Prepared statement.................    11
    Ms. Gloria Steele: Prepared statement............................    21

                                    APPENDIX

    Hearing notice...................................................    48
    Hearing minutes..................................................    49
    Written responses from the Honorable Alice G. Wells to questions
      submitted for the record by:
      The Honorable Ted S. Yoho......................................    50
      The Honorable Ami Bera, a Representative in Congress from the
        State of California..........................................    51
      The Honorable Dina Titus, a Representative in Congress from the
        State of Nevada..............................................    55

                        BUDGET PRIORITIES FOR SOUTH ASIA

                                  ----------

                            WEDNESDAY, JULY 25, 2018

                           House of Representatives,

                     Subcommittee on Asia and the Pacific,

                         Committee on Foreign Affairs,

                                Washington, DC.

        The subcommittee met, pursuant to notice, at 2:00 p.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 be
    included 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 limitations in the rules.
        I am excited to be here today to discuss South Asia nations
    in the Indian Ocean region, a group of states that are small in
    number but growing more and more consequential on the world
    stage.
        Bangladesh, India, the Maldives, Nepal, Sri Lanka are also
    becoming more central to U.S. foreign policy and national
    security. These nations, collectively, include over 1.5 billion
    residents, about a fifth of the world population.
        They are located along vital global sea lanes through the
    Indian Ocean which grow more strategically important by the
    day, connecting vital straits and rising Asian economies in the
    East with the rest of the world in its energy to the West.
        The Indian Ocean has significant implications for security
    and trade across the globe. The Trump administration has taken
    a holistic view of Asia understanding and the Western Pacific
    and the Indian Ocean are deeply interconnected.
        President Trump, Secretary Pompeo, and Administrator Green
    have all championed the Free and Open Indo-Pacific Strategy
    which places an increased emphasis on South Asia.
        The concept has received broad support, but the
    administration has yet not provided many details about how this
    critical strategy will be resourced or implemented.
        I hope that our witnesses can shine some light on this
    today because the United States is not the only power that is
    turning its attention to the Indian Ocean region.
        The People's Republic of China has sought to expand its
    influence worldwide through its Belt and Road Initiative, a
    program that raises substantial concerns for U.S. and regional
    security, international norms, and global democracy.
        The Indian Ocean is the most important crossroads for this
    massive Eurasian development push. The Belt and Road
    initiative, a phenomenon unlike anything else American foreign
    policy has stressed before, will have major implications in the
    South Asia--in South Asia's future.
        Sri Lanka's Hambantota Port, is the most notable example of
    how China can induce struggling countries to take on debt they
    cannot pay back, later using this leverage to increase control
    and we are seeing this more and more around the world. Sri
    Lanka was forced to hand over its strategic port and 15,000
    acres of its land for 99 years and still owes billions of
    dollars to Chinese-controlled firms.
        Through the Indo-Pacific strategy the United States is
    putting forward a very different proposal for the region, one
    that would protect freedom and openness instead of relying on
    bribery and predation.
        We are making some progress in operationalizing the idea
    using new tools like the BUILD Act, legislation that we
    authored and has passed out of this committee and has passed
    out of the House and, shortly, out of the Senate to modernize
    U.S. development finance, which passed the House this month.
        But, ultimately, the United States can't and shouldn't
    compete with China's Belt and Road dollar for dollar. Over the
    last few years, at its highest U.S. assistance to South Asia
    was $472 million is fiscal year 2017.
        The fiscal year 2019 budget request was a significant
    reduction of more than half of 2017's assistance at only $219
    million. So instead, our diplomats need to be creative,
    effective, and properly resourced.
        Apart from these important regional strategic
    considerations, South Asia presents a diverse spread of
    intractable other foreign policy challenges.
        In the last year, 700,000-plus Rohingya have fled ethnic
    cleansing in Burma to seek refuge in Bangladesh. Bangladesh, a
    developing country in its own right, is still struggling to
    support a massive population of refugees, which are constantly
    at risk for monsoon floods, health crises, and other disasters.
        The stories have faded from international headlines since
    the explosion of violence from Burma's Tatmadaw last August.
    But the Rohingya crisis remains one of the world's most urgent
    humanitarian emergencies.
        Bangladesh faces a host of other challenges--militancy,
    extrajudicial killings, and a troubled electoral season, to
    name just a few.
        The Maldives is headed for an election but remains in an
    extended crisis of democracy and is a subject of intense
    Chinese influence.
        Nepal has been racked by devastating natural disasters in
    recent years and is struggling to address its development needs
    while determining its political future in places in the region.
        As the Indian Ocean becomes more central to U.S. foreign
    policy, our diplomatic and development efforts must address all
    these challenges and many, many more.
        The South Asian region has the demographic potential to
    transform the world but presents equally intractable problems.
    The administration should be commended for recognizing the
    region's importance, but we must follow through. So it is
    essential that the U.S. engagement is properly targeted and
    resourced.
        I thank the witnesses for joining us today to discuss how
    the administration plans to allocate resources among our
    critical regions in the South Asia region and I now turn to our
    ranking member, Mr. Brad Sherman of California.
        [The prepared statement of Mr. Yoho follows:]

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                                  ----------

        Mr. Sherman. Today's hearing covers India, Bangladesh, Sri
    Lanka, Nepal, and the Maldives. In the past 4 years, our annual
    foreign aid to these countries has averaged $400 million.
        The President proposes that we cut this to $219 million.
    There is a natural focus to say, well, what we are spending in
    these countries is the foreign aid budget. We should also keep
    in mind that the most significant contribution America makes to
    the world is the maintenance of peace and security and safety
    for democracies.
        We spend $1 trillion on that every year. If we were to
    think that only a tenth of that were to be spent in the South
    Asian region, that's $100 billion which, of course, dwarfs what
    we actually spend on foreign aid.
        I start with $1 trillion as our defense budget. This is
    just kind of a footnote. Our foreign policy establishment tries
    to state that figure as a much lower item--in order to hide
    from liberals the fact that we are spending so much on defense,
    and hide from conservatives the fact that we are spending so
    much more than our allies.
        But the fact is that you can't exclude the CIA and the VA
    from the costs of maintaining a military.
        The chairman points out the question is how are we going to
    resource and implement our efforts in South Asia. When it comes
    to resourcing, the President wants to cut U.S. aid to the area
    by half. And when it comes to implement, the President hasn't
    bothered to appoint anybody to, really, any permanent position
    in the whole South Asia bureau of the State Department.
        So aside from not having the people to implement and not
    having the money to resource, all of his strong talk about the
    Indo-Pacific region--well, it appears to be just talk.
        We need to strengthen democracy in the region. Freedom
    House scores the region at a 3.7 on a scale of seven where one
    is the highest. This is better than the 4.8 score for Southeast
    Asia as a region.
        The per capita income in the area is only $6,700, measured
    by purchasing power, which is 40 percent less than Southeast
    Asia.
        Overall, South Asia has a population of 1.5 billion and
    last year's U.S. aid budget was $470 million. That is very
    small per capita and the reason for it is that we give almost
    nothing to India.
        If you look at the countries we are considering today other
    than India, the per capita amount is considerably more than we
    spend in Southeast Asia, for example.
        We have a strategic partnership with India. They purchased
    $15 billion of arms from U.S. defense firms. While we export
    $50 billion last years, we still have a $27 billion trade
    deficit and I'll be asking Ambassador Wells what we can do to
    reduce that.
        With Bangladesh, we have to commend Bangladesh for being
    willing to host 700,000 Rohingyas who have been pushed out of
    Burma. Our aid supports those refugees and democracy and
    economic needs in Bangladesh.
        Last year Nepal had its first parliamentary elections in 20
    years. Our assistance helps political and economic development
    in that country.
        And in Sri Lanka, democracy is as old there as India, but
    it lags behind in the area of minority rights, particularly for
    the Tamil community. Progress has been slow on a Federal
    constitution giving autonomy to the Tamil regions.
        More needs to be done on accountability for human rights
    and the human rights violations that occurred during the civil
    war, and on ending military control of civilian property in
    Tamil areas.
        Two months ago on Sri Lanka's Remembrance Day, I expressed
    my concerns on this in the Congressional Record.
        Then there is the Maldives. At the budget hearing 2 years
    ago, I said the President of the Maldives was crushing
    democracy. Unfortunately, that continues to be true, and, of
    course, we must remember that well over 200 Maldivians are
    estimated to have traveled to fight and live under ISIS.
        As to burden sharing, Europe spends over $1 billion in
    annual aid to the region, Japan $200 billion. Australia
    provides $100 million. That sounds like they are doing more.
        But they can afford to do so because they are not paying
    for their own defense, and therefore we would expect that it
    would be these allies that would do far more than they have to
    bring about economic development and democracy in South Asia.
        So with that, I look forward to discussing our foreign aid
    budget. But keeping in mind that the $1 trillion we spend on
    defending democracy around the world dwarfs everything that we
    are doing in foreign aid and even dwarfs what our allies are
    doing on foreign aid.
        And I yield back.
        Mr. Yoho. Thank you for your comments.
        Next, we will go to Mr. Rohrabacher from California.
        Mr. Rohrabacher. Thank you very much, Mr. Chairman, and
    thank you for calling this hearing together and trying to
    create a dialogue among Americans about what our policies
    should be like, considering that there are changes going on in
    Asia and South Asia in particular.
        What we have got and what we need to recognize that the
    world is not the same as it was 20 and 30 years ago.
        What has emerged is a partnership, an alliance, so to
    speak, between Pakistan and India--an alliance that is hostile
    to the basic tenets of democracy and hostile to its neighbors.
        India has every reason to be alarmed by this new
    cooperation and coordination between China and Pakistan.
    Pakistan, who is immersed and its leaders are immersed in
    radical Islam and terrorism, not only to terrorize their
    neighbors but to terrorize their own populations into
    submission, and Pakistan, where you've got Sindhis, who are
    being brutalized and murdered, we have to recognize this group
    who believes in peace and are not in any way threatening to
    others, they are being murdered.
        They grab and dump their bodies. The MQM in Karachi as
    well--another group dedicated to democracy--and the Baloch, an
    individual tribe in Pakistan--these groups of people are being
    brutalized by this corrupt government in Islamabad in alliance
    now with China, which, of course, is the world's worst human
    rights abuser.
        And they not only have no opposition parties, but anybody
    like the Falun Gong, who peacefully express their opposition to
    this brutality and this repression that the Chinese Government
    has on its millions of people, they themselves become
    victimized, and the stories about Falun Gong being put in jail
    and their organs being harvested and sold, maybe even to some
    Westerners, these are things we need to pay attention to so
    that the people of the world will rise up together--the good
    people can rise up together behind those people in Pakistan and
    in China who are suffering so much needlessly.
        Thank you very much and thanks for holding this hearing.
        Mr. Yoho. Thank you for your comments.
        Next, we will go to Dr. Ami Bera from California.
        Mr. Bera. Thank you, Mr. Chairman. I'll keep my comments
    short.
        First off, Ambassador Wells, Ms. Steele, thank you for your
    service to our country and your representation of our nation
    abroad.
        As I think about it, you know, we should make sure that the
    President's budget request, which is a huge cut to the region,
    is not a reflection of how Congress looks at the importance of
    the region.
        From the congressional side, as we do our oversight and our
    budgeting process, I hope we realize and reallocate and
    reemphasize the strategic importance of the region.
        When we think about the Indo-Pacific, certainly, from an
    economic perspective the growing relationship and growing
    trading relationship between the United States and India and
    the region is incredibly important.
        You know, when we think about the strategic importance and
    partnership that's happening in maritime security between the
    United States and India, incredibly important.
        The partnership that's occurring trilaterally and
    quadrilaterally between Japan, the United States, India,
    Australia, is incredibly important to maintaining the
    stabilization of the Indian Ocean region as well as the
    maritime security there.
        So you know, I am happy that the President does use the
    term Indo-Pacific. I think it does emphasize the importance of
    the region, and I think we should applaud what the Bangladeshi
    people have done in terms of helping and absorbing the Rohingya
    population that has been displaced. You know, it can't be easy.
        We do have a global duty to help this humanitarian crisis
    and find some resolution and, again, I look forward to the
    questions, and I'll yield back.
        Mr. Yoho. Any other members wish to have an opening
    statement?
        Hearing none, we are thankful to be joined today by two
    repeat customers, I appreciate you coming back, the Honorable
    Alice G. Wells, Principal Deputy Assistant Secretary to the
    Bureau of South and Central Asian Affairs at the U.S.
    Department of State--thank you for coming back--and Ms. Gloria
    Steele, Senior Deputy Assistant Administrator for the Bureau of
    Asia and the U.S. Agency for International Development,
    otherwise known as USAID.
        We will start with you, Ms. Wells. You know how the lights
    work and all that, and hopefully stay within the time limits of
    5 minutes.
        Thank you, and go ahead.

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

        Ambassador Wells. Thank you, Chairman Yoho and Ranking
    Member Sherman, and members of the subcommittee for inviting me
    today to discuss the administration's 2019 budget request for
    South Asia.
        Today, my testimony will cover a request for India,
    Bangladesh, Sri Lanka, Nepal, and the Maldives.
        The Indo-Pacific region spanning from the West coast of the
    United States to the west coast of India hosts 70 percent of
    global commerce within its maritime domain alone, and as the
    Indo-Pacific's largest trading partner and investor, the United
    States conducts $1.4 trillion in two-way trade with its
    markets, benefitting from $850 billion in foreign direct
    investment.
        The region has achieved this through a shared commitment
    between the United States and its allies and partners to a
    free, open, and rules-based system. The Indo-Pacific strategy
    announced during the President's historic trip to Asia in
    November, seeks to strengthen that order, protecting the
    sovereignty of all Indo-Pacific nations to chart their own path
    forward.
        The strategy will ensure the freedom of the seas and skies,
    promote market economies, and support good governance,
    transparency, and liberty.
        South Asia is a market of more than 1.5 billion people,
    critical to our national security. For India, the
    administration supports India's emergence as a leading global
    power and is committed to strengthening our strategic and
    defense partnership.
        We look forward to working with Congress to deepen the
    links between our two great democracies. As India's number-one
    trading partner, purchasing close to 20 percent of India's
    goods and service exports annually, the United States is
    working to ensure fair and reciprocal trade for American
    companies and achieve greater balance in our trade deficit.
        We are also facilitating greater regional engagement with
    our other South Asian partners who have expanding populations,
    dynamic economies, and ambitions of their own to promote a free
    and open Indo-Pacific.
        Bangladesh, strategically positioned at the crossroads
    between South and Southeast Asia, is an important venue in the
    fight against transnational terrorism.
        But this developing country is now hosting more than a
    million Rohingya refugees from neighboring Burma. We have an
    interest in helping Bangladesh bear this burden so the country
    can remain peaceful and stable.
        The U.S. has committed $190 million to Bangladesh for this
    crisis since last year.
        For Sri Lanka, we will support its commitments to
    constitutional reform, fighting corruption, human rights, post-
    civil war reconciliation, transitional justice, and
    accountability.
        Adopting these principles is the only way to help resolve
    long-standing ethnic and religious conflicts and usher in a
    more stable and prosperous future.
        Nepal, located between two of the largest economies in the
    Indo-Pacific region, is entering a new era of political
    stability. The administration will continue to assist Nepal in
    its efforts to develop its infrastructure and regional
    connectivity, most prominently through the Millennium Challenge
    Corporation Compact.
        Finally, the United States encourages Maldives to hold free
    and fair democratic elections in line with the Indo-Pacific
    region's values.
        For fiscal year 2019, the department requests $219.3
    million for South Asia, sufficient to meet our objectives. This
    includes $120.9 million for Bangladesh, $42.1 million for
    India, $40.5 million for Nepal, $11.5 million for Sri Lanka,
    $400,000 for the Maldives, and $3.9 million in regional funding
    for South Asia.
        We also look forward to working with Congress to determine
    future funding needs for the Indo-Pacific. Reflecting the
    importance the administration attaches to the region on July
    30th, Secretary Pompeo will join Secretaries Perry, Ross, and
    OPIC President Washburne to headline the Indo-Pacific Business
    Forum in Washington.
        Soon after, Secretary Pompeo will travel to Singapore to
    participate in the ASEAN ministerials and discuss the future of
    the Indo-Pacific with his counterparts, and Secretaries Pompeo
    and Mattis will hold a two plus two dialogue with India on
    September 6th in New Delhi.
        We look forward to the committee's review of this budget
    request and hope that we can find ways to further support the
    prosperity and sovereignty of South Asia.
        Thank you.
        [The prepared statement of Ambassador Wells follows:]

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                                  ----------

        Mr. Yoho. Thank you, Ambassador Wells.
        Next, Ms. Steele. Thank you.

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

        Ms. Steele. Thank you.
        Chairman Yoho, Ranking Member Sherman, distinguished
    subcommittee members, thank you very much for inviting me today
    to testify on USAID's role in South Asia to advance the
    objectives of the Indo-Pacific strategy, the South Asia
    strategy, and USAID support for partner countries on their
    journey to self-reliance.
        USAID's fiscal year 2019 request contributes to the
    administration's Indo-Pacific strategy of advancing free, open,
    and rules-based order.
        To this end, USAID will support programs that help partner
    countries to strengthen their democratic systems, ensure that
    their trade, infrastructure, and investment programs are
    transparent, open, and free of corruption, and encourage
    responsible management of natural resources upon which our
    partner countries depend for their long-term growth.
        To strengthen democratic systems, USAID will promote
    integrity of electoral processes, support the independence of
    media and information integrity, implement anti-corruption
    initiatives, and amplify the voice of the civil society.
        In Nepal, for example, fiscal year 2019 resources will help
    educate the government on its roles and responsibilities as it
    transitions to a Federal form of government.
        In Sri Lanka, funds will strengthen parliamentary oversight
    committees and key ministries to foster transparency and
    accountability.
        To strengthen economic governance, fiscal year 2019
    resources will support programs that focus on fostering
    competitiveness, trade facilitation, and responsible
    infrastructure development including the transformation of the
    energy sectors, and this will be in Sri Lanka, Nepal,
    Bangladesh, and India.
        We will also look for opportunities to assist countries to
    improve their tax administration and financial management in
    order to reduce their vulnerability to debt traps.
        Finally, USAID will help improve natural resource-related
    legal frameworks and foster better enforcement of environmental
    safeguards such as in Bangladesh.
        Irresponsible natural resources management undermines long-
    term growth and non-transparent natural resource extraction
    often breeds corruption.
        Our fiscal year 2019 budget request will also support the
    goals of the South Asia strategy. Our programs within our
    strategic partnership with India support its efforts in
    fostering regional stability and promote regional connectivity
    of South Asia and Central Asia countries.
        Helping countries on their journey to self-reliance is good
    development. As my administrator, Administrator Green, has
    often said, and I quote,

            ``We believe that every person, every community, and
            every country wants to be empowered to lead their own
            journey to self-reliance. Accordingly, we will stand by
            them and prioritize local capacity, engage private
            sector in the growth process, and help partner
            countries mobilize domestic and international resources
            in order to help them in their development process. We
            will help countries develop their capacity and
            commitment to make clear informed policies and advance
            their development and attract legitimate investors and
            trading partners.''

        I will now give examples on programs that we have to help
    countries become self-reliant. Let me start with Bangladesh.
        Besides being well on its way to graduating from least
    developed country status, much remains to be done to accelerate
    Bangladesh's journey to self-reliance.
        Our budget request will support Bangladesh's efforts in
    health, education, and food security, all of which are
    important to its development.
        We will also continue to help in strengthening their
    democratic institutions and addressing the drivers of extremism
    in that country.
        The Bangladeshis' response to the Rohingya crisis
    highlights their tremendous generosity. The magnitude of the
    crisis, however, underscores the importance of support from
    international community.
        In May 2018, I accompanied Administrator Green to
    Bangladesh and to Burma to assess the humanitarian crisis and
    the response. We urge further action and assistance for the
    refugees and host communities.
        In Nepal, our budget requests will continue to support the
    agriculture sector and support private sector development and
    the expansion of countryside hydroelectric power.
        We will continue working with the government to make public
    financial management systems more transparent and accountable.
        And finally, we will support Nepal's earthquake
    reconstruction efforts and its successful health and education
    programs.
        In Sri Lanka, our budget requests will continue to
    strengthen the government's ability to finance its own
    development and level the playing field for firms to engage
    with government, especially on infrastructure projects.
        Having supported the development and passage of the
    National Audit Bill, we will continue to strengthen the
    government's oversight of public funds which require state-
    owned enterprises to publish audited financial statements.
        We are also helping the government to create the first
    electronic procurement secretary in order to increase
    transparency and accountability.
        And, finally, in India, our fiscal year 2019 request will
    enable USAID to support the government's national campaign for
    TB-free India by 2025. This is one of the largest and most
    important TB initiatives in the world.
        We will also support the country's water, sanitation, and
    hygiene program. We will assist the government to scale up
    successful interventions by generating private sector
    contributions through innovative financing arrangements.
        Mr. Chairman, thank you very much for your support of
    USAID's programs in South Asia including enabling us to provide
    health, education, and livelihood services to Tibetan
    communities in India and Nepal.
        With our fiscal year 2019 budget request, we are committed
    to making the most out of every taxpayer dollar we receive to
    ensure that our partner countries move forward in their
    journeys to self-reliance and that we achieve objectives of the
    South Asia and Indo-Pacific strategy.
        Thank you.
        [The prepared statement of Ms. Steele follows:]

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                                  ----------

        Mr. Yoho. Thank you, Ms. Steele. I appreciate both of your
    testimonies.
        At this point, we are going to break a little bit. We are
    going to go to Mrs. Ann Wagner from Missouri and start with
    her, and then we'll go to the ranking member.
        Mrs. Wagner. Boy, it's Christmas. Thank you, Mr. Chairman,
    and thank you for hosting this hearing. I thank our witnesses
    for their tremendous service.
        Dr. Wells, welcome back. Let me ask you, the Thomson
    Reuters Foundation found that India--India--is the most
    dangerous country in the world for women.
        In India, this runs even deeper than rape and sexual
    violence, due to female infanticide, sex selective abortions,
    and childhood neglect, 63 million women are missing from the
    Indian population. How does U.S. programming in South Asia
    address gendercide in India?
        Ambassador Wells. Thank you, and I will ask Gloria to
    comment.
        But we have a range of programs that we undertake with the
    civil society to promote gender equality and to empower women.
        I would note that, as a democracy, this is a subject of
    enormous debate inside of India and I think we respect the fact
    that Indian institutions, the media, civil society, are engaged
    on this very important issue.
        Mrs. Wagner. Ms. Steele.
        Ms. Steele. Thank you very much.
        In all of our programs, in India in particular, recognizing
    the problem that you just identified, we have made sure that we
    work with the government to identify the gender issues related
    to health.
        In health in particular, our programs make sure that we
    work with them on the issues related to men versus women. We
    also have sensitivity programs with them and we have talked to
    them about the issues that you have just pointed out and our
    maternal and child health programs provide an emphasis in
    looking into the issues that you've just pointed out.
        Mrs. Wagner. How do you anticipate the heightened demand
    for women will affect human trafficking in the region and what
    is the United States doing to prepare for changes in
    trafficking patterns?
        Ms. Wells.
        Ambassador Wells. I think we have already seen, for
    instance, in China where there is a gender imbalance that that
    creates trafficking concerns.
        And so through our dialogues with the region, including
    with India, these are the subjects that we do take up: How do
    you protect women, ensure their rights, and educate societies
    about the societal costs of these policies that discriminate
    against women?
        Mrs. Wagner. Sixty-three million women missing.
        India and China have clashed repeatedly over territories in
    the Himalayas. Most recently, Chinese and Indian troops faced
    off on the disputed Doklam Plateau between Bhutan and China
    after the Chinese People's Liberation Army began building roads
    through the area.
        Although both countries backed down, China has quietly
    resumed its activities in Doklam and neither Bhutan nor India
    has sought to dissuade it.
        Ambassador Wells, China's activities in the Himalayas
    remind me of its South China Sea policies. How should our
    failure to respond to the militarization of the South China Sea
    inform the international response to these Himalayan border
    disputes?
        Ambassador Wells. I would assess that India is vigorously
    defending its northern borders and this a subject of concern to
    India as it looks ahead to its own strategic stability.
        It certainly helps drive and is a factor in driving a
    closer partnership that we enjoy with India, and as we look to
    the Indo-Pacific strategy put forward by this administration,
    it's taken in light of the South China Sea strategy--how do we
    maintain the region to be open, to have maritime security, to
    not have militarization that would imperil the 70 percent of
    global trade and we need to do that by giving authority to
    sovereign nations to have choices in how they develop, to have
    choices in their partnerships, and that's the goal that's being
    undertaken comprehensively and will be discussed at this forum
    on July 30th.
        Mrs. Wagner. I look forward to the forum.
        Ms. Steele, in my limited time, USAID has put forward
    reforms to ensure a more effective approach to development in
    humanitarian programs including creating bureaus for
    humanitarian assistance, resilience in food security, and
    conflict prevention and stabilization.
        With your experience co-chairing the working group between
    State and USAID, can you give the committee an update on those
    reforms and how they are being implemented?
        I realize I have left you no time. You can certainly
    respond, I suppose, in writing, too.
        Ms. Steele. Sure.
        Mrs. Wagner. I thank the chair for his indulgence and I
    look forward to that response in writing.
        Thank you. I yield back.
        Ms. Steele. We will provide it.
        Mr. Yoho. Thank you, Ann.
        And next we will go to the ranking member, Mr. Sherman of
    California.
        Mr. Sherman. They say be careful what you wish for. I would
    hope that the State Department would be staffed by people
    properly appointed by the administration.
        We have Ambassador Wells here, who could be appointed
    Assistant Secretary for South Asia but instead appears before
    us now as PDAS because you can no longer be Acting Assistant
    Secretary, because you were in that Acting Assistant Secretary
    position for so long.
        I say be careful what you wish for because I am not sure I
    want everyone in Foggy Bottom to be wearing MAGA hats. I might
    prefer an administration that doesn't fill positions. I hope
    they fill positions with people that are capable, who have the
    resume, the background, the experience, and are empowered by
    having a permanent position.
        But, again, maybe I should settle for what we have. But,
    Ambassador Wells, I think we talked about this earlier. You're
    a PDAS in the bureau. Is there any other person in the entire
    bureau who has been appointed by this administration?
        Ambassador Wells. I am the PDAS in the bureau. I have four
    acting DASes who assist me in the conduct of SCA's policy.
    That's----
        Mr. Sherman. Okay. So the four people under you are acting
    and the person over you would be acting and would be you,
    except you're acting for so long you can't be acting anymore.
        So we have four positions under your PDAS position and one
    position above your PDAS position, representing five of the six
    most important positions in the bureau, all of which have not
    been appointed by this administration.
        Again, I don't know whether that's a good thing or a bad
    thing. It would depend on who they would appoint.
        I want to move on to Pakistan. Ms. Steele, you escaped
    these questions but Ambassador Wells' area includes Pakistan.
        Last November, I raised the case from a human rights
    perspective of Dr. Anwar Laghari, a law-abiding nonviolent
    leader from Sindh who was assassinated in 2015. And then his
    only son, Asad, was found dead under mysterious circumstances.
        I am also concerned with hundreds of other Sindhi activists
    who remain missing including Hidayat Lohar, Nangar Chana, and
    just this week a young man named Afrab Chandio who has,
    apparently, been disappeared by Pakistani security agents and,
    of course, his cousin is missing and his daughter is receiving
    death threats from Pakistani agencies.
        Earlier this year, Ambassador Wells, you sent me a letter
    that addressed Anwar Laghari and stated in part that you will
    continue to press the Government of Pakistan to ensure a
    thorough and impartial investigation.
        Can I count on you to continue to do that with regard to
    those cases and the additional cases I brought up?
        Ambassador Wells. Yes, very much so. We continue to raise
    the case of Mr. Laghari and I understand his brother is here in
    the audience and we had an opportunity to discuss this as well.
        We are seeing popular protests against the disappearances,
    against staged encounters, and I think, you know, this is very
    much a leading part of the political dialogue right now in
    Pakistan, the rule of law and the relationship, you know, of
    the political establishment to its people.
        Mr. Sherman. I'll go on to a question for the record. And
    that is, we are loathe, as a country, to urge the change of any
    international border. We did support, eventually, the
    independence for Eretria.
        But the more relevant example is South Sudan. The
    Government of Sudan was oppressing the people of South Sudan,
    killing by the thousands its own citizens.
        We see the same in Burma where the Rohingya have been
    forced in numbers of, roughly, many hundreds of thousands out
    of their own country and North Rakhine state is on all our
    international maps as part of Burma.
        But Burma seems to have--or Myanmar seems to have provided
    the same level of governance to North Rakhine state as Khartoum
    provided to South Sudan.
        And so I realize this affects not only your bureau but the
    East Asia bureau. What--how many people does the Myanmar
    military have to kill before the United States would recognize
    that North Rakhine state should be independent or join with
    Bangladesh, rather than continue to be part of the territory of
    a country that has killed by the many, many thousands?
        So I'd ask you to respond to that, for the record. I don't
    know if there is a number but perhaps we could draw a line
    somewhere, about whether we should draw a line, a border, on a
    map that shows North Rakhine state as part of a country that
    has killed so many of the people who live there.
        I'll ask the chairman's indulgence to then ask you a
    question about India. Would the purchase of Russian S-400
    surface to air missiles result in a violation of CAATSA
    sanctions, which of course are sanctions against Russia? And
    how do ties between India and Iran affect our relationship with
    India, particularly with regard to oil purchases, and have we
    asked India to purchase less oil from Iran?
        Ambassador Wells. I can't address the hypothetical of an S-
    400 sale but I can underscore the administration and the State
    Department's commitment to enforcing the CAATSA sanctions.
        Mr. Sherman. Well, I mean, would the purchase of Russian S-
    400s trigger CAATSA sanctions?
        Ambassador Wells. I mean, if there is a purchase of S-400s
    the administration will have to review that purchase. I am not
    in a position today to answer that question.
        On JCPOA, we have been in discussion----
        Mr. Sherman. I would say the Indians might benefit from us
    telling them in advance, rather than waiting for them to do
    something in ignorance of what our position is, and then
    hitting them with sanctions because they did something we
    wouldn't tell them in advance they shouldn't do. But go on.
        Ambassador Wells. Under the JCPOA, we have been engaging
    with all of the partners and international community on support
    for the sanctions that are being reimposed on Iran, and as part
    of that discussion we have raised with India the need and our
    expectation that India will reduce its imports of crude oil.
        What we have seen in the past is that, you know, private
    sector companies responding to the sanctions do respond to
    these forces.
        Mr. Sherman. I thank the chairman for the additional time.
        I yield back.
        Mr. Yoho. Thank you for your question.
        Next, we will go to Mr. Scott Perry from Pennsylvania.
        Mr. Perry. Thank you, Mr. Chairman. Thank you, ladies, for
    being here and for your testimony and your service.
        Ms. Steele, I am particularly interested in Bangladesh and
    the way you characterize it. I mean, and I don't know--you used
    a metaphor, which escapes me at the moment, regarding a guy
    going through school, right, for some of these countries, like,
    they are progressing on their way, right, and do any of them
    ever graduate, is my question, do any of them ever graduate
    from this progression toward where the United States hopes they
    will be, and we hope they do?
        I am just asking if we have any of those success stories
    where at some point we are just good friends with those folks
    and they are good friends with us and they do their thing and
    we do ours and we buy stuff from them and sell stuff and
    everybody's happy. Do we get to that point anywhere in this
    area of the world?
        Ms. Steele. I use the term journey to self-reliance.
        Mr. Perry. Yes. There you go.
        Ms. Steele. That's right. Actually, going back to
    Bangladesh, but Bangladesh is very, very close to transitioning
    from a least developed country status.
        So it's actually making progress, and that's what we are
    intending to do is to help countries move them along so that
    they move on and be able to be in complete control of their
    development, be able to make decisions about their development,
    be able to fund them themselves and attract investments from
    others, not just be on the dole.
        Mr. Perry. But even though they are on the journey and even
    though they are progressing, they are far from where we hope
    they will eventually be. So it's not like we are going to help
    them this far and then when they complete that portion of the
    journey we are out, right. We are going to----
        Ms. Steele. Bangladesh itself has made tremendous progress.
    But it is far from being a higher income--you know, a higher
    middle income country.
        But it is showing the potentials for being that.
        You asked for examples. One example is in the region of
    Asia is South Korea. I still remember when I started my career
    with USAID that I had colleagues working with me who had just
    came from Korea and that dates me.
        But my point is that we do have success stories when
    countries are committed and area capacitated to take on the
    journey on their own they do succeed.
        Another region is in eastern Europe and Eurasia where I
    worked for 9 years, and we did help a number of countries be on
    a journey, complete the journey to being self-reliant and they
    are now----
        Mr. Perry. And I am glad you mentioned South Korea. I've
    had the privilege of visiting and the country is wonderful and
    so are the people. So I am privileged to know that.
        Let me ask you a little more about Bangladesh. You
    mentioned health security and I think civil society or
    institutional capacity in that context and the other things
    that you mentioned it seems to me one of the biggest things
    that we can assist with or advocate for is free and open
    democratic elections there, and I just wonder where we stand
    with that and where that is on the list of priorities.
        Ms. Steele. It is a high priority. In fact, among the
    countries in South Asia, we have allocated the biggest amount
    for democracy and governance programs.
        We are working with civil society, youth groups, and
    various groups that in order to make sure that the voice of the
    people are heard in the coming elections.
        We are working to make sure that the elections are going to
    be free, open, and transparent, and we have been working with
    them for several months now--in fact, over a year, which is
    what is necessary. We can't just work on the day of or after.
        Mr. Perry. Right. Well, we are very interested in Congress
    to see the outcome of that and I just wanted to impress that
    fact upon you.
        Ambassador, I see that you want to add some----
        Ambassador Wells. You know, it's very much a part of our
    political dialogue. The last elections were not contested by
    the major opposition party and that detracts, you know, from
    the strength of the government.
        And when I met today with the Foreign Minister of
    Bangladesh I reiterated what our Ambassador, Ambassador
    Bernicat, in Dhaka has been underscoring privately and publicly
    the need for a contested and fair election.
        Mr. Perry. Okay. In the time remaining, I just would like
    to get an update on the Rohingya situation as well. We have
    addressed it in this committee on several occasions.
        But, in my opinion, it's just conversation, right? Maybe
    nothing that America can do would make a difference. But we
    lament that situation and we'd love to see any kind of forward
    progress on their behalf.
        Can you let us know where this conversation fits in or
    where they fit into this conversation?
        Ambassador Wells. We support the safe and voluntary and
    dignified return of the Rohingya home and while we welcome the
    fact that Bangladesh and Burma have negotiated MOU for the
    return of refugees, you know, our position continues to be that
    the situation in Rakhine has to be satisfactory for that safe
    return.
        And so the conditions on the ground in Burma have to
    demonstrate to the people that when they return they will not
    face ethnic cleansing, and that they will have opportunities to
    live in peace.
        So I think we are faced with two challenges, both the
    political challenge of reinforcing to the military leadership
    in Burma to uphold the commitments made by their civilian
    leadership and at the same time the challenge of ensuring that
    Bangladesh isn't pulled back further from its own development
    goals because of this, you know, enormously generous decision
    to take in 1 million Rohingya.
        Mr. Perry. So even though the MOU may be out there, is it
    your studied opinion at this point that it remains unsafe for
    them to return?
        Ambassador Wells. That's been the U.N.'s judgment and I
    think we have to also look to the people. They have to be
    prepared to return and I think the overwhelming majority are
    not at this moment prepared to return, given current
    conditions.
        Mr. Perry. You can't say you blame them, right?
        Ambassador Wells. Right.
        Mr. Perry. All right. Thank you.
        I yield.
        Mr. Yoho. Thank you for the questions.
        Dr. Bera from California.
        Mr. Bera. Thank you, Mr. Chairman.
        You know, my colleague from California, Mr. Sherman,
    brought up a couple points. I know both you, Ambassador Wells,
    and Ms. Steele, if it was up to you, you don't want the title
    of acting. You'd certainly like to fill positions, et cetera.
        But, again, I'll reiterate thank you for showing up every
    day, doing your job, and convey back to the career employees at
    Foggy Bottom that we thank them as well and our diplomats and
    State Department employees around the world.
        You know, we might prefer different circumstances. But the
    fact that, you know, and I think my colleague describes the
    same thing and many of us in Congress that, you know, we
    appreciate your representing the United States of American
    around the world and showing up every day to do your job.
        Ambassador Wells, you know, over the past few years and my
    time in Congress increasingly in a bipartisan way, bicameral
    way, there is been a sense that we wanted to grow our
    relationship strategically with India and that the U.S.-India
    defense relationship in the Indo-Pacific was of huge strategic
    importance.
        In fact, in last year's Congress in the NDAA we required
    the administration--if we defined India as a major defense
    partner we asked for, from the administration, kind of a
    clarification of how they would define that.
        In addition, there was a request that the secretaries of
    state and defense jointly designate an individual that was
    responsible for spearheading the U.S.-India defense
    relationship, understanding that that was to emphasize the
    importance of that relationship.
        Would you be able to give us an update on that definition,
    if it's happened as well as who our quarterback is going to be
    on the U.S.-India defense relationship--if there is been a
    decision made on that?
        Ambassador Wells. Thank you, and to both you and
    Representative Sherman, I do want to underscore the full
    support that I've received from Secretary Pompeo, which I
    appreciate in the prosecution of my job every day.
        On India, we are looking ahead to the September 6th two
    plus two and the joining of forces between Secretary Pompeo and
    Secretary Mattis to help define what a major defense
    partnership is.
        And I think we are going to be able to demonstrate both in
    terms of the progress we make on the agreements we can reach
    that will make it easier for us to share classify information
    and undertake logistical activities together.
        We are also demonstrating it through the incredible growth
    in our defense sales relationship from, essentially, zero in
    2008 to what we expect will be $18 billion by 2019 with other
    major purchases on the horizon.
        And then the on-the-ground activities, whether it's the
    Malabar exercise and the fact that we do more military
    exercises with India than we do with any other country in the
    world and so giving meaning and definition to how we can work
    together to secure the Indo-Pacific region.
        Instead of, you know, one point person I think you're
    getting a fusion of State and Defense efforts.
        For instance, when India sent its Foreign Secretary and
    Defense Secretary, they too adopted that two plus two format.
    And so we are working together hand in glove, diplomatically
    and militarily, to build out the dimensions of what Secretary
    Pompeo has said is one of our most critical relationships.
        Mr. Bera. Great.
        And, you know, my colleague from California also brought up
    the CAATSA issue. While I am not part of the NDAA conference
    committee, my sense is that they did address this issue in
    conference and, you know, made some adjustments to the
    language, because it's our sense that while India may have
    purchased equipment from Russia in the future, their real
    desire is to partner more closely with the United States and I
    think they are, you know, giving that flexibility to folks in
    our DOD and State Department to make sure that we are not
    losing any of our equipment, intellectual property, and
    technology to potential adversaries, and we don't see India as
    an adversary.
        And, again, I think as the two plus two dialogue takes
    place, et cetera, you know, I think it's important for us to
    continue to send the message that we do see India as a major
    defense ally and someone that, you know, is incredibly
    important and a country that is incredibly important in helping
    us stabilize that region.
        I am running out of time. But, Ms. Steele, just a quick
    question. I think you traveled with Ambassador Green to
    Bangladesh and, you know, saw the conditions on the ground
    first hand.
        When Ambassador Green was here, you know, a few months ago,
    he also talked about some of the worry of the rainy season and,
    you know, certainly, where the refugees are at lower territory.
        I don't know exactly the timing of the rainy season in
    Bangladesh but I assume that we are close to it if we are not
    in the middle of it right now.
        And, you know, can you give us an update on the actual
    conditions in the camps right now?
        Ms. Steele. We are in the middle of the cyclone season. In
    fact, it's about to end and another cyclone season starts in
    October.
        And in the meantime, I sent a team to go out to Bangladesh
    in order to look at potential multipurpose buildings that we
    can reinforce to provide a shelter for the people for both the
    host communities and the refugees along Cox's Bazar.
        And the team talked to other donors in the area in order to
    get our heads together and see what we can do. In the meantime
    right now, they are fine. I mean, we worried more, fortunately,
    we did not get the strength of cyclone that we were concerned
    about. But October is coming and so we are preparing for that.
        Mr. Bera. Well, thank you. And again, thank you and your
    colleagues and, you know, for your service, and I think I speak
    for the entire committee.
        Thank you.
        Mr. Yoho. I think that would be fair to say, and I
    appreciate your questions and your comments.
        Moving on, I think it was you, Ms. Steele, you said we
    believe in every country wants to determine their own self-
    reliance, and I think that's so true. We see India graduating
    and moving in that direction and Bangladesh moving from a LDC.
        Can we look at anything in our programs via aid that stands
    out in facilitating their transition? Because it's like running
    for Congress or when I went to vet school.
        There was a lot of people that were doubtful and they
    weren't real helpful, but once you make it, it says, I knew
    you'd make it all the time--it was the help we gave you.
        Are there any programs that we can look at definitively
    through USAID, and say this led to this, and that we can repeat
    over and over again in different countries?
        And I know each different country is a different situation.
    But is there anything that sticks out? Was it good governance?
    Was it developing economies via infrastructure? Banking
    systems? Rule of law?
        So I'd like to hear both of you comment on that.
        Ms. Steele. Thank you. Thank you.
        Actually, it isn't just one thing and it really depends on
    where in the journey a particular country is.
        For example, India's development is constrained by its very
    poor health situation. It has the highest number of TB cases in
    the world. It is the third highest number of HIV cases and it
    accounts for 20 percent of maternal and child mortality.
        And so that's where we focus to help move them along. But
    the good thing about India is that it does have the resources
    and it has the technology.
        So we provide them models of how you address specific
    issues and they scale it up, and that is the kind of
    partnership that we have with them.
        India, then, would be different from another country like
    Nepal or Sri Lanka, so it would depend. But, in general, if you
    want me to just talk about it in general, it is really a
    combination of good governance, strong democratic system, and
    an ability to be able to generate. They have a good regulatory
    environment so that they can generate resources on their own.
        Mr. Yoho. Let me interrupt you, because you were saying
    that they didn't have the resources. You want to look at a
    country like India, they are the largest democracy. Of course,
    we are the oldest, and you say they don't have the resources.
    Yet, they have nuclear weapons. They have other things. Is it a
    problem with prioritizing? Because we know what causes TB. We
    know how to get rid of it. We know how to isolate it. You know,
    there is a massive amount of rabies that shouldn't be running
    rampant over there and we know how to deal with that.
        So it is a prioritization that we can help better direct
    funds or strategies, I guess?
        Ms. Steele. Mr. Chairman, I am sorry, I said they have the
    resources.
        Mr. Yoho. Okay. I am sorry. I am sorry.
        Ms. Steele. But they don't have the technical capability.
        Mr. Yoho. Strike the record. [Laughter.]
        Ms. Steele. What we do is provide them the technical
    capacity and they use the resources to scale up the programs
    that we work with them on.
        Mr. Yoho. Okay. So but you can't point to one program that
    we----
        Ms. Steele. So in India our focus would be in the health
    sector----
        Mr. Yoho. Okay.
        Ms. Steele [continuing]. Because that is their major
    concern.
        Mr. Yoho. What about Bangladesh?
        Ms. Steele. In Bangladesh, unfortunately, it is many more
    issues there.
        Mr. Yoho. Okay.
        Ms. Steele. And so we work with them on food security. It
    is our biggest food security program in South Asia. So we help
    them improve the technologies to be able to produce the food
    that they need or generate the revenues in order to be able to
    purchase the food they need.
        We also work with them on the education sector in order to
    develop the capacity that they will have and, more importantly,
    we work with them on their good governance and democratic
    system.
        Mr. Yoho. Okay. Thank you.
        Ambassador Wells, do you have any comments on that or
    input?
        Ambassador Wells. The only thing I would add is the concern
    we have that countries not mortgage their future or mortgage
    their development to unsustainable projects and lending, and
    that is a major focus of the Indo-Pacific that what is taken on
    as debt is utilized in projects that will help lift the
    standards and the wellbeing and economic growth of the
    countries.
        Mr. Yoho. That's a good transition for me because that's
    something I wanted to talk about. You know, the importance of
    that whole region is incredible where we are going and if you
    look at outside of India, and China that the Southern Asia
    Pacific region, according to Admiral Harris, there will be more
    people living within that region than outside of it by 2050 in
    the world, and it shows you the strategic importance of that.
        And so with that, we see the aggressiveness of China with
    their high lending tactics. I was reading a report the other
    day that in Pakistan they had lent a lot of money. They were
    expecting a 34 percent return on investment.
        I'd like to be in that fund. But, unfortunately, countries
    can't return and they can't pay that back and we saw what
    happened in Sri Lanka and, of course, in the Maldives.
        And then, you know, we see them encroaching on that, and
    what we are looking for is stability so that we can move
    forward so that we can promote those things that have created
    the economic boom in this world, and we feel it's good
    governance.
        We also feel it's democracies where people have a choice
    because people are empowered. Empowered people run better
    governments in general and we are seeing the antithesis of that
    coming through. It's as Xi Jinping calls it, socialism with
    Chinese characteristics, which, as far as I am concerned, is
    communism--he can call it whatever he wants--and their goal is
    to break up democracies.
        And, you know, we have to make sure that we are moving
    forward and understand that it's like that movie ``Bob.'' You
    know, you got to take baby steps but understand they are going
    to fall down and move backwards a little bit.
        But if we are going forward and so with that, when I look
    at the Maldives, it's 400,000--roughly--people in that area and
    they didn't have free and fair elections and China had a strong
    influence and said that if India intercedes they would see that
    as an act of aggression.
        What are your thoughts on how the best way to counter China
    in that region?
        Ambassador Wells. I agreed with your opening remarks that
    we shouldn't be seeking to compete with China dollar for
    dollar. That's not our strength.
        Our strength is what we bring to the table also with the
    private sector instead of state-parastatal lending on terms
    that may not be to the benefit of countries or their citizens.
        You know, we are providing $850 billion in foreign direct
    investment in the region, which is far more than what has been
    injected by China.
        You know, as well we are still the single largest, you
    know, grant donor and our assistance is designed to address
    exactly trade facilitation, what makes systems work, what
    promotes regional connectivity.
        The BUILD Act that you mentioned is something the
    department strongly--the administration strongly supports. We
    look forward to being able to harness all the levers that we
    have to make it easier for our private sector to engage more
    effectively in the region.
        And through our diplomacy, both whether it's in support of
    ASEAN and APAC but also trilaterals with Japan and India,
    whether quadrilateral with Japan, Australia, and India, we are
    trying to gather like-minded countries who can bring resources
    to the table, who can coordinate assistance and effort so as to
    provide countries with meaningful alternatives.
        Mr. Yoho. Ms. Steele.
        Ms. Steele. Mr. Chairman, China flourishes when the
    democratic systems are weak, or when there is no transparency
    and when there is corruption.
        And so from AID's perspective, we work in three different
    areas. One is on strengthening democratic systems and making
    sure that their electoral processes are free and open.
        And we are working with civil society to make sure that
    voices are heard and because, you know, when the democratic
    systems are weak then China is able to come in.
        Mr. Yoho. Right.
        Ms. Steele. And we are also working in the economic area on
    strengthening the governance. We want to make sure that the
    policies and the rules are free and open and rules based. That
    keeps China from being able to flourish.
        And so we work with them in the area of competitiveness, in
    infrastructure development, in trade facilitation, et cetera,
    and we work them on improving the procurement tools because it
    is when the procurement tools are nontransparent that China is
    able to come in.
        And then, finally, China is very interested in extractive
    resources in the mines and minerals, and so we work with the
    countries to make sure that they are aware of the environmental
    consequences and the long-term consequences when they do not
    manage their resources properly.
        Mr. Yoho. Thank you. And I am going to turn to the ranking
    member if you have the time, the patience, and the tolerance to
    have another round of questions for both of us.
        Mr. Sherman. And if that involves questions from me we are
    asking for a very high level of patience and tolerance.
        I will disagree with just one thing with the chairman's
    remarks. I don't think what China calls socialism with Chinese
    characteristics is communism.
        I am a progressive. I am on the left. I know what a real
    communist is, and President Xi, you're not communist.
        You may be in favor of crony capitalism. You may be in
    favor of state-directed capitalism. But I know a real
    communist. I don't know if--I don't know if you----
        Anyway, now, I want to put for the record into context. We
    are all talking about the $18 billion of arms purchases by
    India. That's what they are going to do over a 14-year period,
    whereas the trade deficit--and that's what I am told, you know,
    from 2005 to present or maybe even a year or two into the
    future--whereas the trade deficit is $27 billion per year.
        Ambassador Wells, is it official U.S. policy that we want
    to reduce or eliminate that trade deficit or is that $27
    billion trade deficit just hunky dory?
        Ambassador Wells. The President wants fair and reciprocal
    trade and I think when we look at India there are three sectors
    where I think we can get a significant boost in our trade.
        Mr. Sherman. Do we have a target, like by this year we will
    cut that $27 billion to this figure or to that figure?
        Ambassador Wells. We'd like the trade deficit to be reduced
    as quickly as possible.
        Mr. Sherman. But it's not like we have got a target for
    2020 or----
        Ambassador Wells. No.
        Mr. Sherman [continuing]. The Chinese are the ones with
    targets for 2020 and----
        Okay. So we don't--we don't have a particular target. We
    just want to see the trade deficit reduced. I will ask you one
    other question.
        Let's say there was some policy that would increase our
    exports to India by $1 billion but increase our imports from
    India by $2 billion, thereby creating $3 billion of additional
    bilateral trade. Is that something that we would look favorably
    upon or is--or not?
        Ambassador Wells. I am going to have to defer to USTR. But
    what I'd like to underscore is----
        Mr. Sherman. Well, I mean----
        Ambassador Wells [continuing]. Our trade policy forum
    discussions underway focused on eliminating or reducing the--
    both the tariffs and the nontariff barriers that do exist.
        If our average tariff rate is about 3.5 percent, India's is
    over 13 percent. It's historically been a more closed market.
    We are pushing aggressively for medical devices,
    pharmaceuticals, dairy, agricultural products.
        Mr. Sherman. But we may or may--but that may add up to a
    lot or a little. I am going to----
        Ambassador Wells. But if I could underscore the positive
    picture, which is in defense aviation and energy. In aviation
    alone, Boeing estimates that over the next 20 years there is
    going to be $290 billion in aviation sales. Last year we saw
    $22 billion----
        Mr. Sherman. Yes. Well, trade is growing worldwide. Numbers
    are getting bigger. But as the numbers get bigger, the trade
    deficits tend to get bigger.
        But I want to ask Ms. Steele, you're often going to be
    approached by brand name U.S. corporations and they are going
    to be whistling ``American the Beautiful'' under their breath
    and they are going to try to get you to finance something that
    they are going to call trade promotion that will lead to higher
    profits for that corporation--good American corporation.
        But that will increase total trade, but will actually
    increase the trade deficit and reduce jobs in the United
    States. Do you regard as trade promotion a project just because
    it's favored by a U.S. corporation that talks about its supply
    chains, or do you get an analysis as to whether this is going
    to lead to more jobs and a reduction of the trade deficit?
        Ms. Steele. I, too, would defer to USTR on that. We do not
    do the trade analysis with the----
        Mr. Sherman. But wait a minute. You're spending--you're
    spending the money and people will come to you with projects
    that say this foreign aid expenditure will help trade and
    supply chains and you can't check with--you don't check with
    USTR before you find a road.
        So how do you analyze whether it's not just good for the
    country involved, but it's good for reducing the trade deficit,
    increasing jobs in the United States? Or are those just not
    factors you look at?
        Ms. Steele. No. Actually, we do consult with USTR before we
    implement any trade facilitation programs. We look at the needs
    at the country because----
        Mr. Sherman. Are they looking at jobs or are they just
    looking at profits for big U.S. corporations? Or do they--or
    haven't they told you?
        Ms. Steele. I don't know what they are looking at. But they
    do have a basis for making analysis of the trade issues that
    they deal with.
        Mr. Sherman. If they are anything like prior USTRs, they
    are just looking at what's in the interests of the profits of
    the big corporations and they are not looking at the trade
    deficit and they are not looking at jobs.
        So, hopefully, if you're funding any project that's
    supposed to do good for U.S. workers, find out whether it's
    good for U.S. workers, or just decide that that's not important
    to you. But for God's sakes, don't trust the bureaucracy over
    at USTR.
        And I got one more question for Ambassador Wells. We
    completed the U.S.-India civilian nuclear agreement a decade
    ago. So when will U.S. firms be able to sell nuclear power
    plants to India?
        Ambassador Wells. We continue to support the Westinghouse
    bid as Westinghouse comes out of bankruptcy. We have been in
    conversation----
        Mr. Sherman. That's a good American name, Westinghouse. Is
    there a lot of U.S. jobs involved in that, or is that all
    Japanese jobs?
        Ambassador Wells. I believe that it also produces jobs on
    the U.S. side as well as----
        Mr. Sherman. Well, I am sure there is some but yeah----
        Ambassador Wells. I don't have the analysis in front of me.
    We can respond formally.
        But, you know, having done the hard work of creating a
    basis for a civilian nuclear relationship with India, having
    engaged seriously with India as they accede to the agreements,
    Wassenaar, Australia Group, and, hopefully, in the future,
    Nuclear Supplier Group. We would like to see this also
    manifested in our commercial relations with India and we're
    very supportive of U.S. companies----
        Mr. Sherman. Can you respond, for the record, what are we
    going to do commercially, but also what portion of the jobs
    from Westinghouse or anything else that you're pushing will be
    here in the United States?
        Ambassador Wells. Sure.
        Mr. Sherman. Just because it has a venerable name it
    doesn't answer the question.
        Yield back.
        Mr. Yoho. Thank you for your questions and I appreciate
    your input. I've got a couple comments here I want to do.
        One is on Bangladesh. There is a lot of talk up here on the
    Rohingya crisis that's going on, and this is something Gerry
    Connolly wanted to be here today but he couldn't be here. This
    is something that has to be dealt with.
        We do appreciate what Bangladesh has. I think they've gone
    over and above. One of my question was, was any assistance
    moved from Bangladesh to Burma or other countries in the region
    to deal with refugees issues in Burma?
        Ambassador Wells.
        Ambassador Wells. No. We increased--we provided a net $190
    million in assistance to Bangladesh above and beyond the
    existing bilateral assistance.
        There was some money also provided to deal with the
    Rohingya in Burma and I'll defer to Gloria.
        Mr. Yoho. Ms. Steele.
        Ms. Steele. Yes. We have provided assistance in Burma to
    deal with the Rohingya issue as well as providing assistance in
    the Cox's Bazar and the communities around it.
        But in Burma we have provided $63 million to provide
    shelter, food assistance, nutrition, emergency nutrition, and
    livelihood development.
        Mr. Yoho. Okay. And as we move forward, our goal is to have
    a resolution that's acceptable to Burma, to the Rohingya, to
    Bangladesh as quick as we can so that there is not more tragedy
    involved in that and there is more stability that comes out of
    that, and that certainly is our goal.
        And I know we are separate branches of government, but we
    have the same goal. And the work you guys do is so vital that
    we continue to do that.
        And I have offered this to everybody pretty much that we
    talk to: Please use this branch of government as a way to move
    legislation forward.
        You're the ones that have the boots on the ground. You're
    the ones that have been in those countries. You know what works
    and what doesn't work, and you also know what you're hampered
    by by legislation.
        I am giving you a pass and I am sure that Ranking Member
    Sherman would feel the same way, that if you say: If you guys
    could allow us to do this, we could do this better.
        Our whole goal is to move countries from aid to trade as
    fast as we can, and we want to duplicate that over and over
    again, and by doing that we are going to develop we are going
    to develop economics and trade.
        And I am excited about our BUILD Act because it changes the
    dynamics of what we can do and as we do that, as you guys vet
    these programs, if that's in your wheelhouse, I think what
    Ranking Member Sherman brought up about jobs created, yes, it's
    important for U.S. jobs. But I want to make sure we are doing
    those jobs within that country because it's that infrastructure
    that leads to the economy that leads to a higher standard of
    living where countries will start finding their own way and be
    self-determining.
        And our program is so much different than what other
    countries offer because we are not in there to suck out the
    resources. We are there to build strong alliances based on
    economies and trade, and if we do that and we trade on a
    balanced and fair level playing field and we move in that
    direction that we will be stronger allies and partners in the
    future, and that's our goal with this and this is a tool we
    have needed so badly and we are just honored that it was able
    to pass out of here in the House.
        And I see were are joined by Mr. Connolly of Virginia, and
    go ahead, Gerry.
        Mr. Connolly. Thank you, Mr. Chairman. I did promise you on
    the floor I'd make it. But I had one other hearing and one
    briefing all at the same time. So forgive me for being late.
        Let me ask either one of you or both of you. I am
    particularly interested in the situation of the Rohingya.
    Reports I got months ago were that a number of the refugee
    camps in Bangladesh were up and running and functioning fairly
    well, but their worry was the monsoon.
        What happens when the monsoon hits because then you're
    going to have, you know, landslides. You're going to have
    damage to structures that are temporary. You're going to have
    washed out roads and on and on.
        So where are we right now? The monsoons have begun. How
    much damage is there and how worried should we be about their
    situation and temporary quarters that aren't all that robust
    and sturdy?
        Ms. Steele. Thank you for that question. We are actually at
    the tail end of the cyclone season now. There is another
    cyclone season starting in October.
        Two weeks ago, Ambassador Green and I, along with a PDAS
    from the State Department, went to visit both Bangladesh and
    Burma and we were very concerned about the situation in both
    countries.
        We talked to various civil society organizations and the
    NGOs that we work with to understand better the situation.
        In fact, the inadequacy of cyclone-resistant shelters were
    raised as an issue as well as the lack of land in that area to
    build additional shelters.
        But the United States Government has invested in building
    cyclone-resistant shelters in all of Bangladesh including in
    the Cox's Bazar. Other donors are doing the same thing and the
    Government of Bangladesh is doing the same thing.
        I sent an assessment team over 2 weeks ago to Bangladesh to
    take a look at other actions we may be able to take to
    strengthen existing structures that could be used for this
    purpose when the next cyclone season hits. And we have a report
    on that now.
        Mr. Connolly. Well, I hope you'll keep this subcommittee
    posted and informed because we are particularly interested in
    cyclone-resilient structures for refugees who already have
    suffered a great deal.
        Ms. Steele. Yes, sir.
        Mr. Connolly. And their status remains up in the air, and
    we don't want them blown away with cyclone while they are at
    it. So please keep us posted on that.
        Ms. Steele. Yes. We are also looking at shelters for host
    communities as well as----
        Mr. Connolly. About what?
        Ms. Steele. For the host communities as well the refugees.
        Mr. Connolly. I understand. But my question has to do with
    the Rohingya.
        Ms. Steele. Yes.
        Mr. Connolly. I mean, Bangladesh has lots of issues we
    could talk about. This is about a refugee population Bangladesh
    has been gracious enough to welcome, that has been subject to
    ethnic cleansing and violence, and the least we can do is to
    try to make sure they've got safe reliable shelter in their
    refugee communities that they've created during--especially
    that are resilient to the monsoon.
        Ambassador Wells, Bangladesh and Burma agreed to a
    voluntary repatriation time frame in January of this year. Is
    that correct?
        Ambassador Wells. Yes.
        Mr. Connolly. What's the status of that agreement?
        Ambassador Wells. It depends. The agreement is premised on
    voluntary returns and I think we have seen that the situation
    and the U.N. has certainly judged that the situation in Rakhine
    state is not conducive to returns yet.
        We don't have the guarantees of safety or economic
    viability. We haven't seen refugees vote with their feet by
    trying to return to Rakhine. To the contrary, we are still
    seeing some flows of Rohingya coming from Burma.
        As we welcome the fact that Bangladesh and Burma are
    working together and so as I said earlier that we have a two-
    prong issue, we have to, I think, encourage the Burmese
    military to uphold the commitments that their civilian
    leadership has made while simultaneously assisting Bangladesh
    so that they are not dragged backwards as a result of the
    generous hosting of this refugee population.
        Mr. Connolly. So, I mean, sometimes in international
    diplomacy we have these wonderful breakthroughs and sometimes
    it almost seems like we are checking boxes and going through
    the motions. So we got a voluntary repatriation time table
    agreement.
        Meanwhile, we have got the U.N. High Commissioner for human
    rights who called the atrocities that sparked the refugee
    crisis among the Rohingya ``a textbook example of ethnic
    cleansing.''
        Why would anybody who's a Rohingya in Bangladesh want to
    voluntarily return to that prospect?
        Ambassador Wells. I think they would want to return under
    conditions of safety for reasons that their ties are there,
    their families are there, their land is there--you know, their
    livelihood, their sense of self and community.
        But, certainly, to be subjected again to, you know,
    violence or ethnic cleansing is not something that we can
    condone or that they would voluntarily submit to.
        Mr. Connolly. Right. I mean, I'd call that kind of common
    sense.
        Ambassador Wells. And so the--and so the conversations--I
    mean, so the diplomacy underway is to achieve the changes in
    policy in Burma that will allow the Rohingya to return to
    Rakhine and to live safely. There is both security guarantees
    that are required. There are significant----
        Mr. Connolly. Well, I agree with you. But who would enforce
    that? Who's going to make sure that, say, on the Burmese side
    they keep those commitments, assuming they make them?
        Ambassador Wells. I think we need the presence--I mean, we
    need our diplomacy. We need the broader international
    community, the U.N. agencies all to be involved in this. I
    don't think that refugees will go back just because of a piece
    of paper.
        Mr. Connolly. Right.
        Ambassador Wells. There is going to have to be certitude.
        Mr. Connolly. Right. And I just think that's got to be key
    and so far we don't have that.
        Ambassador Wells. No.
        Mr. Connolly. Right. So it's an aspirational thing but it's
    not a real thing until we have that. Okay.
        Ambassador Wells. Yes, at this stage.
        Mr. Yoho. If the gentleman will yield.
        Mr. Connolly. Of course.
        Mr. Yoho. I would love to work on that with you, maybe
    letters to the U.N., other agencies, where we can put some meat
    behind that.
        Mr. Connolly. I agree. And as I mentioned to you on the
    floor, I got one for you.
        Mr. Yoho. Got it right here.
        Mr. Connolly. Okay, good. Super.
        Mr. Yoho. Let's do it.
        Mr. Connolly. Hopefully, we can collaborate. And in fact,
    that's how I--if it's all right, Mr. Chairman, just want to
    end--Ambassador Wells, are you familiar with the Amnesty
    International listing of, I guess, it's 10 individuals in the
    Burmese military they've identified as guilty parties to the
    ethnic cleansing who should be held to account in terms of
    international justice? Are you aware of that?
        Ambassador Wells. I am not, and you've caught us in the
    division between the South and Central Asia Bureau and the East
    Asia Pacific Bureau, and so I have not focused as closely on
    the Burmese dimension of this, sir.
        Mr. Connolly. Okay. Well, assuming Mr. Yoho and Mr. Sherman
    and I can work together on this matter, we will be glad to be
    in communication because, obviously, this is a massive human
    rights crisis and we want to see democracy flourish but we also
    want to see individual human rights and collective human rights
    of a minority group protected.
        And so we are going to do our part to contribute to that
    protection.
        Thank you, Mr. Chairman. Thank you.
        Mr. Yoho. Thank you for coming by and participating.
    Appreciate you being here and I appreciate your testimonies. We
    take this stuff and a lot of times we have come out with pieces
    of legislation or support that has really made a difference and
    we hope to continue to do that, and I think what I hear over
    and over again and I hear it all the time as I am honored to be
    chair of this Asia Pacific Subcommittee is it's America's
    presence, it's the rule of law, honoring contracts, and good
    governance and, certainly, we have our own problems. But it
    still is a standard that a lot of the world looks up to.
        And so with that, I appreciate you being here. This
    subcommittee hearing is adjourned.
        [Whereupon, at 3:50 p.m., the subcommittee was adjourned.]

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