[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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