    [House Hearing, 116 Congress]
    [From the U.S. Government Publishing Office]

              U.S. INTERESTS IN SOUTH ASIA AND THE FY 2020 BUDGET

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

                                    HEARING

                                   BEFORE THE

             SUBCOMMITTEE ON ASIA, THE PACIFIC AND NONPROLIFERATION

                                     OF THE

                          COMMITTEE ON FOREIGN AFFAIRS
                            HOUSE OF REPRESENTATIVES

                         ONE HUNDRED SIXTEENTH CONGRESS

                                 FIRST SESSION

                                   __________

                                 June 13, 2019

                                   __________

                               Serial No. 116-47

                                   __________

            Printed for the use of the Committee on Foreign Affairs

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                          COMMITTEE ON FOREIGN AFFAIRS

                       ELIOT L. ENGEL, New York, Chairman

    BRAD SHERMAN, California             MICHAEL T. McCAUL, Texas, Ranking
    GREGORY W. MEEKS, New York               Member
    ALBIO SIRES, New Jersey		     CHRISTOPHER H. SMITH, New Jersey
    GERALD E. CONNOLLY, Virginia         STEVE CHABOT, Ohio
    THEODORE E. DEUTCH, Florida	     JOE WILSON, South Carolina
    KAREN BASS, California		     SCOTT PERRY, Pennsylvania
    WILLIAM KEATING, Massachusetts	     TED S. YOHO, Florida
    DAVID CICILLINE, Rhode Island	     ADAM KINZINGER, Illinois
    AMI BERA, California		     LEE ZELDIN, New York
    JOAQUIN CASTRO, Texas		     JIM SENSENBRENNER, Wisconsin
    DINA TITUS, Nevada		     ANN WAGNER, Missouri
    ADRIANO ESPAILLAT, New York          BRIAN MAST, Florida
    TED LIEU, California		     FRANCIS ROONEY, Florida
    SUSAN WILD, Pennsylvania	     BRIAN FITZPATRICK, Pennsylvania
    DEAN PHILLPS, Minnesota	             JOHN CURTIS, Utah
    ILHAN OMAR, Minnesota		     KEN BUCK, Colorado
    COLIN ALLRED, Texas		     RON WRIGHT, Texas
    ANDY LEVIN, Michigan		     GUY RESCHENTHALER, Pennsylvania
    ABIGAIL SPANBERGER, Virginia	     TIM BURCHETT, Tennessee
    CHRISSY HOULAHAN, Pennsylvania       GREG PENCE, Indiana
    TOM MALINOWSKI, New Jersey	     STEVE WATKINS, Kansas
    DAVID TRONE, Maryland		     MIKE GUEST, Mississippi
    JIM COSTA, California
    JUAN VARGAS, California
    VICENTE GONZALEZ, Texas

                        Jason Steinbaum, Staff Director

                  Brendan Shields,  Republican Staff Director

                                     ------

             Subcommittee on Asia, the Pacific and Nonproliferation

                       BRAD SHERMAN, California, Chairman

    DINA TITUS, Nevada                   TED YOHO, Florida, Ranking Member
    CHRISSY HOULAHAN, Pennsylvania	     SCOTT PERRY, Pennsylvania
    GERALD CONNOLLY, Virgina	     ANN WAGNER, Missouri
    AMI BERA, California		     BRIAN MAST, Florida
    ANDY LEVIN, Michigan		     JOHN CURTIS, Utah
    ABIGAIL SPANBERGER, Virginia

                         Don MacDonald, Staff Director

                                C O N T E N T S

                                  ----------
                                                                       Page

                                   WITNESSES

    Wells, Ms. Alice, Acting Assistant Secretary for South and
      Central Asian Affairs, U.S. Department of State................     7
    Freeman, Ms. Karen, Assistant to the Administrator for the Office
      of Afghanistan and Pakistan Affairs, United States Agency for
      International Development......................................    17
    Steele, Ms. Gloria, Acting Assistant Administrator for the Bureau
      for Asia, United States Agency for International Development...    25

          INFORMATION FOR THE RECORD SUBMITTED FROM COMMITTEE MEMBERS

    Information submitted for the record from Representative Houlahan    37

                                    APPENDIX

    Hearing Notice...................................................    54
    Hearing Minutes..................................................    55
    Hearing Attendance...............................................    56

                 ADDITIONAL MATERIALS SUBMITTED FOR THE RECORD

    Information submitted for the record from Representative Sherman.    57
    Statement for the record submitted from Representative Connolly..    62

                RESPONSES TO QUESTIONS SUBMITTED FOR THE RECORD

    Responses to questions submitted to Mrs. Steele from
      Representative Wagner..........................................    64
    Responses to questions submitted to Mrs. Wells from
      Representative.................................................    65
    Responses to questions submitted to Mrs. Wells from
      Representative Houlahan........................................    70
    Responses to questions submitted to Mrs. Steele from
      Representative Houlahan........................................    71

            U.S. INTERESTS IN SOUTH ASIA AND THE FISCAL YEAR BUDGET

                            Thursday, June 13, 2019

                            House of Representatives

            Subcommittee on Asia, the Pacific, and Nonproliferation

                          Committee on Foreign Affairs

                                         Washington, DC

        The subcommittee met, pursuant to notice, at 9:35 a.m., in
    room 2172 Rayburn House Office Building, Hon. Brad Sherman
    (chairman of the subcommittee) presiding.
        Mr. Sherman. 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 five calendar days to allow
    statements, questions, and extraneous material for the record,
    subject to the length limitation in the rules.
        We will be joined by members of the full committee who are
    not members of the subcommittee and, without objection, they
    will be allowed to ask questions at the end of the first round
    of questions. The first opening statement will be delivered by
    our ranking member, Ted Yoho.
        Mr. Yoho. Good morning. Thank you, Mr. Chairman, for
    calling this hearing. I appreciate the opportunity to discuss
    the Fiscal Year 2020 State Department and U.S. Agency for
    International Development budget request for the South Asia
    region. I would also like to thank our distinguished witnesses
    for being here today.
        The relationship between the United States and countries in
    South Asia concerning democracy promotion and economic growth
    is ripe for cooperation. However, the region also faces
    significant challenges particularly involving China's increased
    influence in the region. We have also seen the continued
    proliferation of human rights abuses and acts of radical
    terrorism. I would like to focus this hearing on how U.S.
    expenditures support the health of U.S.-Asia's democratic
    institutions, increase economic development, and address
    security concerns while best serving U.S. interests.
        In recent years, we have seen an increased focus on South
    Asia. In 2017, the Trump administration announced their Free
    and Open Indo-Pacific Strategy which restructured the typical
    Asia Pacific approach and emphasized the importance of this
    region to the U.S. and our national security. This area is
    vital for national security. The development and the growth, as
    we have heard over and over again, there is going to be more
    people living in the Asia Pacific theater by 2050 in the world
    than outside of that.
        This strategy is marked by respect for sovereignty, freedom
    of navigation, open markets, and transparent investment in the
    Indo-Pacific and is carried out by agencies like the Department
    of State and USAID, whom we have here today with us and we are
    so excited. A June 2019 Pentagon report called the Indo-Pacific
    the single, most consequential reason for America's future.
        For this reason, we must continue to address the region's
    shifting geopolitical landscape, increasing complex security
    outlook, lingering human rights issues--not lingering human
    rights issues, but more egregious human rights issues that we
    haven't seen since probably World War II--and enduring
    development challenges.
        I look forward to hearing from our witnesses on how the
    Department of State and USAID intend to address these concerns
    and how Congress can best support them in these endeavors. I
    yield back.
        Mr. Sherman. Thank you, Mr. Yoho.
        Today's hearing examines the administration's budget
    request for South Asia and our interest in the region. We look
    forward to hearing from Ambassador Wells, Ms. Steele, and Ms.
    Freeman. I will introduce them at the end of my opening
    remarks.
        In the 4-years from 2014 to 2017, our annual aid to South
    Asia averaged $2.2 billion. This included one billion for
    Afghanistan and nearly 800 million for Pakistan. But our 2018
    budget for South Asia has dropped almost in half, and the
    Fiscal Year 2020 budget is proposed at $1 billion, including
    half a billion or a bit more than that for Afghanistan, and 70
    million for Pakistan. This is a dramatic reduction in our
    efforts. It will be interesting to hear from our witnesses
    whether South Asia is dramatically less important to us than it
    was a few years ago.
        As to India, we have a strategic partnership in the Indo-
    Pacific. I am working to strengthen that relationship as co-
    chair of the India Caucus. Our partnership is built around
    common democratic values, our economic relations, and our
    strategic interests. And of course, there have been several
    steps forward in the area of joint naval exercises, whether it
    be U.S.-India or U.S.-Japan-India. We do have a $24 billion
    trade deficit with India. I look forward to hearing from our
    witnesses how we are going to open India's markets and how
    India is going to open its markets so tha American exports will
    increase.
        As to Pakistan, USAID projects have covered energy,
    agriculture, education, and health sectors. There is a small
    but growing middle class, civil society, independent judiciary,
    and we have had two elected changes in government at least in
    the--what should I say--official government as opposed to the
    whatever role in government the military plays beyond what is
    set forth in the constitution.
        That being said, our aid to Pakistan less than a decade ago
    was two billion a year. We now have cut it to 70 million. If I
    did the math quickly, I would just say that is under 5, you
    know, that is a 95 percent reduction, roughly. Pakistan, I
    think, is very important to the security of the United States.
    There are those that argue that Pakistan is important because
    it is close to Afghanistan and I think it is just the reverse.
        It is true that looking at history, looking at 2001,
    Afghanistan suddenly became critical to our national security
    and the fact that al-Qaida was able to operate there, who had
    devastating effects on our country. But looking forward, it is
    clear that Pakistan will have a much bigger impact on the
    United States and, of course, is a nuclear country with--
    nuclear weapons State with a growing nuclear arsenal.
        I want to hear about what we are doing with regard to
    forced conversions, particularly in southern Pakistan where
    young girls are, in effect, kidnapped, forced to convert first
    to Islam and then forced to marry. And I will want to focus on
    human rights in Pakistan as a whole and particularly in Sindh
    Province and, of course, Pakistan giving safe haven to
    terrorists that attack Afghanistan and India.
        Now given the importance of Pakistan, I do not think there
    is anything more important than our public broadcasting to the
    people of Pakistan. We broadcast over only in one Pakistani
    language, Pashtun, which is both a Pakistani and an Afghan
    language, leaving out the many tens of millions of Pakistanis
    that speak Sindhi. I have offered an amendment which is pending
    on the floor and my staff may pull me out of this room and, if
    so, it is for a good reason, one that I am sure all of our
    witnesses will agree with and that is to increase the budget of
    Radio Free Europe and Radio Liberty, so that they can begin a
    Sindhi language service.
        Whether we will be able to get them the full million and a
    half that they have said they wanted for a 24-hour service or
    whether it will be less, will depend upon the legislative
    process. So whether we get anything will depend upon the
    legislative process. But given Pakistan's--I mean Pakistan is,
    for example, the only State with nuclear weapons that has
    experienced a military coup, and I will turn to the historians
    on our panel to tell me just how many military coups Pakistan
    has had. But that is 100 percent of all the military coups in
    all nuclear States.
        So, we do need to reach out to the people of Pakistan and I
    am by no means sure that the $70 million we are spending is
    sufficient. Further, I will point out that the big thing we are
    doing for Pakistan is the IMF loan. While our aid is 70
    million, the IMF loan is 6 billion. And, of course, I do not
    think that could have happened without the United States and I
    hope that I will be told by our witnesses that when Treasury's
    over there at the IMF they aren't just checking the boxes for
    fiscal purposes, but are, in fact, taking policy direction from
    the State Department.
        In Afghanistan, we have given 130 billion in security and
    development assistance since 2001. The conflict continues. The
    Taliban finds safe havens in Pakistan. One of the reasons for
    this is because Pakistan fears a united Afghanistan that might
    make claims on its territory, particularly at a time when
    Pakistan might be preoccupied with India.
        The way to make Pakistan calmer and more solidly in favor
    of a peaceful, strong, and prosperous Afghanistan is to gain
    international recognition from the Durand Line. I will discuss
    with our witnesses what we can do at the United Nations to get
    the entire world to recognize the Durand Line and to make it
    plain to Afghanistan and Pakistan that their border is that
    line and that they can live in peace without either side,
    particularly without Afghanistan looking for an opportunity to
    expand its territory.
        As for Sri Lanka, we all express our deepest condolences to
    those affected by the tragic Easter Sunday terrorist attacks.
    These attacks took place 10 years after Sri Lanka ended its
    civil war, and I hope that these attacks will not impede the
    reconciliation efforts between the Sinhalese and Tamil
    communities.
        As to democracy, development, and burden sharing, our
    foreign aid has supported development in the Maldives which
    might be the first nation submerged if we do not do something
    about global warming and global climate change, Nepal and
    Bangladesh. And I want to commend Bangladesh for hosting
    hundreds of thousands of Rohingya from neighboring Myanmar.
        As I have said in this room before, if Myanmar or Burma is
    unwilling or unable to be a good government for the Rohingya
    people that live in North Rakhine State, then we should
    transfer and the United States should support the transfer_that
    portion of that State to Bangladesh, which is willing to
    accommodate the people. The Rohingya people of North Rakhine
    State deserve a government that tries to protect them, not
    destroy them.
        Overall, our aid can consolidate democracy and advance
    development across South Asia. Freedom House scores the region
    at 3.7 on a scale of 1 to 7 where 1 is the highest. This is
    better than the 4.8 score of Southeast Asia, but the per capita
    income for South Asia is only $6,700 if measured in purchasing
    power which is 40 percent less than Southeast Asia.
        So there is much development work to be done in South Asia.
    In recent years, Australia and Canada have annually given 200
    million, Japan gave nearly 600 million, and European countries
    have disbursed, apparently, $3 billion to South Asia. I
    encourage our allies to continue that element of burden sharing
    as we, of course, carry the lion's share of the load when it
    comes to defense expenditures.
        With that I will see whether there are other members of the
    subcommittee wishing to make an opening statement.
        Mr. Perry?
        Mr. Perry. No, thanks.
        Mr. Sherman. Mr. Levin?
        Well, with that we will start with our witnesses. We will
    start with Ambassador Alice Wells, the former U.S. Ambassador
    to Jordan who has headed the South Asia Bureau at the State
    Department for 2 years as acting assistant secretary. Of
    course, our committee has been urging for the last over 2 years
    the administration to actually have permanent people in the
    positions, and I know that the party line of the administration
    is you do not need permanent people, but I think we do. I am
    not saying that Ambassador Wells would not be the perfect
    permanent assistant secretary, but the idea that you can
    operate the executive branch without appointing people, getting
    them confirmed, and filling the positions is absurd.
        That being said, we will also hear from Ms. Gloria Steele
    who is acting assistant administrator for the Bureau for Asia
    at the U.S. Agency for International Development, USAID. And
    then, finally, we will hear from Ms. Karen Freeman who is
    assistant to the administrator for the Office of Afghanistan
    and Pakistan Affairs, again, at USAID.
        Ambassador Wells?

    STATEMENT OF ALICE WELLS, ACTING ASSISTANT SECRETARY FOR SOUTH
          AND CENTRAL ASIAN AFFAIRS, U.S. DEPARTMENT OF STATE

        Ms. Wells. Chairman Sherman, Ranking Member Yoho, and
    members of the subcommittee, thank you for inviting me to
    testify on the Department's Fiscal Year 2020 budget request for
    Afghanistan, Pakistan, and South Asia.
        And before we begin, I want to recognize the servicemen and
    women, the diplomats, the development specialists, who risk
    their lives in service to our country, particularly one
    Department of Commerce employee, Chelsea Decaminada, for her
    ultimate sacrifice during the Easter Sunday attacks in Sri
    Lanka. Her commitment to public service is a model for all of
    us and she served her country with distinction.
        I will first talk about our work in Afghanistan and
    Pakistan and then continue by describing the progress we have
    made on our Indo-Pacific Strategy in India and South Asia. Our
    goal in Afghanistan is a sustainable, political settlement to
    end the war. Our conditions-based approach is working and the
    Taliban have come to the table. As Secretary Pompeo has
    testified, the President wants to reduce the risks and costs to
    Americans in a manner that protects our counterterrorism
    interests. President Ghani shares this vision.
        I traveled to Kabul last month where the Afghan Government
    agreed to focus assistance on our highest priorities: peace,
    self-reliance, and stability. We have been working with other
    donors to develop a post-settlement economic plan while not
    losing focus on the need to strengthen democratic institutions,
    include women, and see credible Presidential elections in
    September. This request supports those objectives. We recognize
    a durable peace in Afghanistan requires consultation with
    Pakistan and Pakistan is encouraging the Taliban to negotiate.
        But our relationship with Pakistan is broader than just
    Afghanistan. We are asking Islamabad to take sustained and
    irreversible actions against terrorists who threaten stability
    in the subcontinent. One such organization, Jaish-e-Mohammed,
    precipitated the India-Pakistan crisis in February and we have
    made clear that there is no legitimate role for these non-State
    actors.
        On May 1, we succeeded in listing Masood Azhar, the leader
    of that organization, at the United Nations 1267 Sanctions
    Committee, an achievement that was 10 years in the making. Our
    tailored assistance request for Pakistan reflects the
    relationship that is moving from aid to a more mature trade-
    based partnership.
        From Afghanistan and Pakistan, we turn to South Asia where
    we support India's rise as the fulcrum of the administration's
    Indo-Pacific Strategy. Prime Minister Modi is committed to
    strengthening ties between our two countries and we
    congratulate him on his decisive election victory. India's
    election was free and fair and the largest exercise in
    democracy in human history.
        As the Secretary said at yesterday's India Ideas Forum,
    ``It is only natural that the world's most populous democracy
    should partner with the world's oldest democracy to maintain
    our shared vision for the Indo-Pacific.'' With India at its
    center, we have made good incremental progress in our Indo-
    Pacific vision since I last testified to the subcommittee. In
    July, the Secretary announced $114 million in economic
    assistance at the Indo-Pacific Business Forum, and in August he
    announced $300 million in security assistance at the ASEAN
    Regional Forum.
        In November, the Vice President announced the Indo-Pacific
    Transparency Initiative in conjunction with over $400 million
    in democracy rights and governance assistance and we thank
    Congress for supporting and approving these announcements. The
    Indo-Pacific Strategy is beginning to register successes. In
    September, the Maldives voted out the preceding corrupt regime
    that was implicated in secretive, unsustainable procurements of
    debt-financed infrastructure. Maldives instead elected a new
    president who is strengthening his country's outreach to both
    India and the United States.
        Maldives is a concrete example of how our Indo-Pacific
    vision can inspire engaged voters in civil society to push back
    against corruption through the ballot box. We are happy to see
    that Congress supports this vision, and we thank you for
    passing the Asia Reassurance Initiative Act with broad
    bipartisan support. The President was happy to sign.
        To conclude, this has been a year of success in our region
    and our budget request reflects that. While Afghanistan
    transitions to a more sustainable, post-settlement mission, the
    administration is refocusing its assistance request on the
    Indo-Pacific. I welcome today's discussion and hope we can
    agree to support America's diplomacy in this indispensable
    region. Thank you.
        [The prepared statement of Ms. Wells follows]

        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Mr. Sherman. Ms. Freeman?

    STATEMENT OF KAREN FREEMAN, ASSISTANT TO THE ADMINISTRATOR FOR
     THE OFFICE OF AFGHANISTAN AND PAKISTAN AFFAIRS, UNITED STATES
                  AGENCY FOR INTERNATIONAL DEVELOPMENT

        Ms. Freeman. Good morning, Chairmen Deutch and Sherman,
    Ranking Members Wilson and Yoho, and members of the
    subcommittee. Thank you for having me here today to discuss the
    administration's Fiscal Year 2020 budget request for the U.S.
    Agency for International Development's assistance priorities
    for Afghanistan and Pakistan.
        As a career Foreign Service officer, it has been my honor
    to serve my country and a privilege to testify before you today
    alongside my esteemed colleagues, Ambassador Alice Wells and
    Assistant Administrator Gloria Steele. Like those before me, I
    would like to thank our colleagues, the women and the men in
    our military who have served in Afghanistan, who in some cases
    have given their lives. And I would also like to express my
    appreciation to their families.
        Our gratitude also goes to the brave American civilians who
    have served in both Afghanistan and Pakistan, USAID's Foreign
    Service officers, development professionals, and Foreign
    Service nationals, diplomats at the United States Department of
    State, and the men and women working shoulder to shoulder with
    us, implementing U.S. programs in the region and around the
    world. I have been proud to have served with these people over
    the past 30 years and they have my deepest respect.
        Under USAID Administrator Mark Green's leadership, our
    agency's mission is to support our partners to become self-
    reliant and capable of leading their own development journeys.
    A key stepping stone on this path to self-reliance is ensuring
    governments are responsive and accountable to their citizens
    and to the international community. We make progress toward
    this by increasing private sector economic growth,
    strengthening democratic governance, and enhancing health and
    education outcomes.
        But we must also reduce the reach of conflict and
    counteract the drivers of violence and instability.
    Specifically, USAID has three strategic development objectives
    in each country. In Afghanistan, accelerating private sector-
    driven, export-led economic growth including the growth of high
    value agriculture; sustaining and advancing social gains in
    health, education, and women's opportunities; and increasing
    the Afghan Government's accountability to its citizens
    including anticorruption in government and elections--pardon
    me.
        In Pakistan, our objectives are helping to consolidate
    Pakistan's civilian government control on the border with
    Afghanistan, particularly in the newly merged districts of
    Khyber Pashtunkhwa, supporting civil society's efforts to build
    a more tolerant Pakistan, and promoting private sector-led
    economic growth including creating opportunities for U.S.
    businesses. The President's Fiscal Year 2020 budget request for
    assistance to Afghanistan and Pakistan reflects our Nation's
    efforts to advance our national security interests and increase
    regional stability.
        The Fiscal Year 2020 request for USAID in Pakistan includes
    48 million in economic support funds. It is anticipated that
    our request for 400 million for Afghanistan will be adjusted
    downward as a result of recent program reviews. As Ambassador
    Wells has outlined, this has been a year of reflection on the
    appropriate balance of resources both human and financial in
    Afghanistan and Pakistan. Both missions are undergoing intense
    scrutiny and consultation with our partners, the interagency,
    and yourselves here on Capitol Hill. The lower request
    continues a downward trend as our assistance portfolios mature,
    adjust, and adjust toward a more sustainable level.
        Although the 2020 request is reduced in comparison to
    Fiscal Year 2019, both missions will continue to implement a
    significant suite of assistance programs which are strategic
    and long-term and incorporate our partners, other donors and
    the private sector, and of course the countries themselves, as
    we engage in dialog on encompassing their aspirations and our
    comparative advantages.
        Experience shows that women's participation in development
    is a key driver for sustainable outcomes including enhanced
    economic growth, improved health, education, and community
    cohesion and a reduction of conflict. Support for Afghan and
    Pakistani women is and will remain an important focus for
    USAID. Afghan women in particular have achieved much with the
    continuing support from the American people, and furthering
    these gains is a cornerstone of USAID's efforts.
        Again, thank you for inviting me here today to discuss
    USAID's programs in Afghanistan and Pakistan. I look forward to
    answering your questions.
        [The prepared statement of Ms. Freeman follows:]

        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Mr. Sherman. Ms. Steele?

    STATEMENT OF GLORIA STEELE, ACTING ASSISTANT ADMINISTRATOR FOR
      THE BUREAU FOR ASIA, UNITED STATES AGENCY FOR INTERNATIONAL
                              DEVELOPMENT

        Ms. Steele. Chairman Sherman, Ranking Member Yoho,
    distinguished subcommittee members, thank you for inviting me
    to testify on USAID's role in advancing U.S. policy priorities
    in South Asia, including the President's vision for a free and
    open Indo-Pacific, the South Asia Strategy and USAID's journey
    to self-reliance.
        First, I will speak to the President's vision for a free
    and open Indo-Pacific region. The Fiscal Year 2020 budget
    request for USAID's development assistance in South Asia is
    $332 million. This request includes support for USAID's
    continued leading role in advancing the Indo-Pacific Strategy
    in three primary areas.
        First is strengthening democratic systems, which are
    critical for fostering good governance and transparency. Second
    is leveling the playing field for the participation of
    legitimate private enterprises, especially in the areas of
    infrastructure and digital economy. And the third is improving
    the management of natural resources, particularly in energy,
    which are important for sustained, long-term growth.
        Second, the South Asia Strategy. The South Asia Strategy
    recognizes the strategic importance of the region for stability
    in Afghanistan. The request supports continued USAID engagement
    important to this objective. For example, deepening our
    strategic partnership with India, which shares economic and
    humanitarian interests in Afghanistan.
        And third, the journey to self-reliance. In the words of
    USAID Administrator Mark Green, the ultimate goal of
    development assistance must be to work toward the day when it
    is no longer necessary. He has said, and I quote, ``At the
    heart of our work is the core belief that each country must
    lead its own development journey.''
        We call the path to get there the journey to self-reliance.
    In support of this, we focus on building capacity and
    commitment of countries to drive their own development. This
    includes commitments to open and accountable governance and
    inclusive growth and it includes the capacity to mobilize funds
    domestically for their development. With Fiscal Year 2020
    resources we will continue to strategically focus our efforts
    toward achievement of this goal.
        I will next provide brief country highlights. For
    Bangladesh, our request includes resources for lifesaving
    assistance to Rohingya refugees and for ramping up our support
    to impacted host communities. In addition, our request supports
    programs aimed at restoring democratic processes, political
    pluralism and good governance, improving the business-enabling
    environment and agricultural economy, strengthening the
    conservation of targeted ecosystems in order to mitigate the
    impact of natural disasters, and attracting renewable energy
    investments. Our program supports Bangladesh in its goal of
    achieving middle income status by 2024.
        For India, our budget request supports India's integral
    role to advancing both a free and open Indo-Pacific region and
    a stable South Asia. For example, India is central in our
    efforts to facilitate infrastructure and energy investment and
    connectivity across South Asia. The request includes new funds
    for regional energy activities that contribute to advancing the
    President's vision of a free and open Indo-Pacific.
        It also supports Asia EDGE, a U.S. Government initiative to
    promote energy security and expand energy access across the
    Indo-Pacific region. The request will also enable USAID to
    leverage domestic resources, including from India's robust
    private sector that is legally mandated to contribute to social
    causes in ways that help India better respond to its lingering
    development challenges, including poor health conditions,
    inadequate resources related to water and sanitation, and air
    pollution.
        For Nepal, despite steadfast progress the country remains
    vulnerable to unsustainable debt, weak institutional capacity
    and future disasters. Following on USAID's support for the
    historic 2017 elections, the request will allow USAID to
    address emerging challenges to Nepal's transition to
    federalism. Our request also supports efforts to improve the
    country's weak business regulatory environment, advance a
    competitive market economy, and address health, food security,
    and education challenges.
        For Sri Lanka, recent political turmoil compounded by the
    April terrorist attacks, growing ethnic religious nationalism,
    and slow progress and commitment to transitional justice and
    ethnic reconciliation exacerbate the country's development
    challenges. With elections on the horizon for late 2019 and
    early 2020, USAID will use Fiscal Year 2020 resources to
    bolster democratic governance, foster ethnic reconciliation,
    and enhance fair opportunities for trade and competitiveness.
    Assistance will also provide the Government of Sri Lanka with
    technical support for infrastructure development and for
    fostering the rule of law.
        And, finally, for the Maldives, Fiscal Year 2020 resources
    will enable USAID to advance U.S. interests and seize
    burgeoning opportunities presented by the country's democratic
    opening. We will also use Fiscal Year 2020 resources to support
    the government's request for assistance in public financial
    management, in countering terrorism, and in managing its
    natural resources.
        In closing, South Asia is a strategically important region
    for the United States. With this request, USAID will continue
    efforts vital to increasing partner countries' self-reliance
    and advancing a free and open Indo-Pacific region. Thank you.
        [The prepared statement of Ms. Steele follows:]

        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Mr. Sherman. I want to thank all of our witnesses. I will
    now recognize myself for 5 minutes.
        Ambassador Wells, how important is it for us to reach out
    to the people of Pakistan in the languages they actually speak
    in their home, particularly in the language of Sindh?
        Ms. Wells. Very important, sir, and we do through our
    Karachi consulate have programming in Sindhi language to the 50
    million person audience in that region. We also have local
    staff, whether it is in Karachi or elsewhere in-country that
    are engaged in Sindhi language outreach.
        Mr. Sherman. So you are able to reach people by sending
    speakers out, by convening meetings, but if we did broadcasting
    in Sindhi we would be able to reach all 50 million people. I
    hope you support that record. For the record? Yes.
        Ms. Wells. We appreciate additional efforts of outreach in
    Pakistan.
        Mr. Sherman. Now the big aid, and we are here not talking
    about 70 million for Pakistan, the big issue is the IMF loan.
    It looks like that is going through.
        Ambassador Wells, does Treasury just do what they want for
    checking off some economic boxes, or since this is the single
    most important thing we do with regard to Pakistan, do they
    listen to you?
        Ms. Wells. Yes. There is a discussion about the
    conditionality that we think would be appropriate for an IMF
    package to Pakistan. We have not seen the IMF package yet. We
    understand that there has been an agreement reached between the
    IMF and Government of Pakistan, but certainly we have
    communicated our strong views and Secretary Pompeo has also
    done so publicly on the need for any package to include a real
    structural reform to reinforce----
        Mr. Sherman. If I can interrupt, what about Dr. Afridi? Can
    we, should we block this IMF loan until Dr. Afridi, his family,
    are free here in the United States?
        Ms. Wells. We believe Dr. Afridi is being held wrongly,
    inappropriately. With Congress's help we have withheld 130
    million dollars in assistance to Pakistan already as a result
    of his incarceration, and we continue to raise Dr. Afridi's
    case.
        Mr. Sherman. But we are letting them get what they really
    want which is the six billion from the IMF. And if they default
    on that the American taxpayers lose well over a billion. Have
    we offered any prisoner exchange, for example, Dr. Siddiqui,
    who I know has cooperated in terrorism, but is still, given Dr.
    Afridi's critical role are we negotiating or are we seeking to
    negotiate with Pakistan some sort of prisoner release?
        Ms. Wells. We have not offered a prisoner exchange for Dr.
    Afridi. Dr. Afridi is being held wrongly. He is not guilty of
    any terrorism charges.
        Mr. Sherman. Almost every prisoner exchange--when we
    exchanged spies with the Soviets, the spies that we gave up
    were people working for communism and the people we got back
    were people working for freedom. By all rights they should have
    been freed anyway. I would hope that as another committee looks
    at those who--the first responders at 9/11, that you would do
    more to get Dr. Afridi released and make more, offer more on
    the plus side even if it is unjust and withhold on the other
    side, because who is going to ever help America stop terrorism
    as long as Dr. Afridi is in jail.
        I have talked before about the missing persons and forced
    disappearances, particularly religious minorities in the Sindh
    Province of Pakistan. I will ask both--well, I will ask all of
    our witnesses, to what extent do we bring up these human rights
    issues in our interactions with Pakistani officials? Ms.
    Steele?
        And if it Ms. Freeman who pretty much deals with that then
    I will just--Ms. Freeman.
        Ms. Steele. It is Ms. Freeman.
        Ms. Freeman. USAID remains concerned about all of the
    reports on human rights violations. And not only do we raise
    that with the government officials, but we also try to
    encourage the new initiatives with the Government of Pakistan
    and strengthen civil society to that end. Thank you.
        Mr. Sherman. My time is expired, my list of questions is
    not. We will call on other members and we will do a second
    round for those who are still here. We will hear from our
    ranking member.
        Mr. Yoho. Thank you, Mr. Chairman.
        Thank you for your testimony. Ambassador Wells, it was
    music to my ears to hear you say moving countries from aid to
    trade as soon as possible. From a hearing like this it is
    amazing when I look back, it led to the inspiration for the
    BUILD Act and that is how that happened. That led to the
    bipartisan support to create the new USIDFC, the International
    Development Finance Corporation, modernizing OPEC, and
    strengthening our foreign development arm moving, again,
    countries from aid to trade. You know, so out of this meeting
    we hope to move beyond that.
        It is such a large region from Afghanistan over to the east
    encompassing all the countries in between, I think it is about
    1.8 billion people just in that region. And what I hear, again
    when we talk about development I hear over and over again we
    need to build democracies. And I have been a proponent of I do
    not think that is the right way to go. You guys have got
    collectively a tremendous amount of experience.
        I think more importantly we should develop stable
    governments. If I look at the history that has been learned or
    the lessons that have been learned from Afghanistan, we moved
    into a country that we did not understand. We did not
    understand the tribal nature of a country and we tried to
    instill a democracy. And as we know democracies are very messy
    as we have learned over 240-plus years.
        I think we should adapt our strategy and policies to
    fulfill the needs of a country and develop a stable government,
    because I see right now we are negotiating with the Taliban,
    but somebody correct me if I am wrong, they were a terrorist
    organization and we had a policy we do not negotiate with
    terrorists. Yet they control more land in Afghanistan today
    than they did before we went into Afghanistan.
        My question to you is, the Taliban will not negotiate with
    the current, democratically elected Afghan Government. Is that
    not a major problem and should the Afghan Government be brought
    into the negotiations?
        Ms. Wells. Absolutely. And Ambassador Khalilzad's mission
    or his mandate is, you know, first to ensure that we are not
    threatened by terrorist groups operating inside of Afghanistan;
    and two, to protect the investments we have made over the last
    18 years in Afghanistan; and then three, to end the war and
    reduce the burden on the United States. And the way he has
    approached the negotiations is through four interrelated
    elements.
        The first element is to, you have guarantees and
    enforcement mechanism that the Taliban will break all ties with
    international terrorists, with any terrorist group on Afghan
    soil; second, to arrive at guarantees and enforcement mechanism
    for the withdraw of foreign troops; but three is to ensure
    Taliban participation in intra-Afghan negotiations and dialog,
    and that would include the Afghan Government. It would include
    the political opposition, civil society, and women.
        And then the fourth element is a complete and comprehensive
    cease-fire. And you cannot have one without the other, all four
    interrelated. And, for example, how would we trust the
    counterterrorism guarantees if we do not understand the
    government that emerges from an intra-Afghan negotiation. And
    so, this process is underway. Ambassador Khalilzad is in
    Afghanistan right now working to create, working with partner
    President Ghani, and also bringing in the region through his
    consultations with Russia, China, the Europeans, and Pakistan
    of course.
        Mr. Yoho. You know, I hear you on the development and the
    things that we want and we want to, you know, empower people,
    women, and everybody in society. But again, when you go to a
    country that is for thousands of years has never had that and
    we are kind of forcing this on them, I think there is--if we
    know that people want to become more successful economically,
    when we go in and do major infrastructure development--and that
    was the impetus behind BUILD Act, so that we could develop
    infrastructures that would lead to the development of economies
    that create the jobs that bring a better outcome--generally, I
    would think you would get more stability.
        I mean we have been in Nicaragua, we had a hearing on that
    yesterday, with Daniel Ortega, and basically, we are still
    trading with this guy and he is a communist dictator by all
    practical means, but yet we have--we pretend it is a democracy
    and it is anything but. And so, if people do not understand a
    democracy, I think they would understand a stable government.
        And again, it pains me that we are negotiating with the
    Taliban after what, 18 years and billions or trillions of
    dollars. I just depend on you with your collective experience
    to feel bold enough to say I think we should change the
    strategy. And if you cannot do it in the State Department, slip
    a note under my office door anonymously and I will be happy to
    follow through with this committee.
        Mr. Chairman, I yield back.
        Mr. Sherman. We have many methods of communication with all
    of you who work hard in our foreign policy agencies. With that
    I recognize the gentlelady from Pennsylvania.
        Ms. Houlahan. Thank you, Mr. Chair.
        And thank you very much for your testimony. Today it is
    nice to see some of you again and some of you for the first
    time. My question is for Ambassador Wells and Ms. Steele, most
    likely, but I would welcome anybody to answer it. Yesterday, or
    probably this morning, because we just got out of the HASC all-
    day, 24-hour marathon markup, I was able to successfully
    include an amendment in the NDAA that directs the DOD to
    conduct research on the role of women in countering violent
    extremism.
        Given the horrific Easter Sunday attacks in Sri Lanka, can
    you talk about the ways that State and USAID are perhaps
    working with or using women to help prevent the rise of
    extremism in South Asia?
        Ms. Wells. This is a very strong component, obviously, of
    the peace process in Afghanistan in ensuring that women's
    voices and views are incorporated. And so, you see that
    Ambassador Khalilzad actively soliciting the views of women,
    working with women's organizations in Afghanistan, working with
    stakeholders to ensure that women are included as
    representatives in any dialog or negotiating structure, this is
    reinforced by the White House's own initiative to emphasize
    women in peacemaking.
        And so there will not be peace in Afghanistan if half the
    population is not understood and accommodated, and I would just
    add that as we come closer to peace negotiations, the demand
    for upholding women's education and women's rights has been so
    strong, and not just from women in cities but reports of women
    under Taliban control, what they want is education and an
    opportunity to work and so getting their voices heard is
    critical.
        In Sri Lanka, the multi-confessional, multiethnic nature of
    that society, you have to have women also reaching across those
    boundaries, and so I will let Gloria discuss the range of
    programs that we have to do so.
        Ms. Steele. Thank you. You are absolutely right. A major
    component of our programs not just in Sri Lanka, but also in
    the Maldives is mobilizing women, the civil society
    particularly involving women, in order to help us address the
    root causes of violent extremism in both countries. One of the
    first things that we did when we provided assistance in the
    Maldives, for instance, was to get civil society together
    focusing specially on women and the youth in order to help us
    try to address violent extremism. This is a major component of
    our programs.
        Ms. Houlahan. Thank you. And I certainly look forward to
    the opportunity to have the DOD do a little bit of research on
    all of our behalves on this issue.
        And kind of transitioning into that, on Tuesday the
    administration finally released its Women, Peace, and Security
    strategy. I think it was about eight or 9 months late. And last
    month, I joined many of my colleagues on this committee in
    sending a bipartisan letter to Secretary Pompeo urging him to
    ensure the representation of Afghan women in peace negotiations
    with the Taliban.
        So I would like if it is OK, Mr. Chairman, to enter that,
    ask for unanimous consent to enter that letter into the record.
        Mr. Sherman. Without objection, so ordered.
        [The information referred to follows:]

        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Ms. Houlahan. And for the Ambassador, I was wondering if
    you could tell me a little bit about the status of those
    negotiations.
        Ms. Wells. Ambassador Khalilzad has made significant
    progress in getting the Taliban to the negotiating table. And
    not just any Taliban, but an empowered negotiating team that
    represents various constituencies of the Taliban and leadership
    figures. And in these discussions that have taken place in Doha
    and in the discussions that are taking place in Kabul with the
    Government of Afghanistan, hammering out those four elements of
    what are going to constitute a sustainable peace settlement.
    And so the progress is ongoing.
        The next step, major step that needs to be taken is to
    achieve an intra-Afghan dialog and negotiation. There are
    certain things that can be discussed between the United States
    and the Taliban that are appropriate, but certainly nothing can
    be negotiated over the heads of the Afghan people.
        Ms. Houlahan. And you feel as though women are being
    included in those early conversations?
        Ms. Wells. They are. And both in Ambassador Khalilzad's
    extensive outreach, but also in President Ghani's own
    solicitation of the views of Afghan women, the role of Afghan
    women in the Peace Council. I would note that about a third of
    all voters in the parliamentary elections in Afghanistan were
    women. We have 69 women members of Parliament. Women are part
    and parcel of not just government, but in all aspects of
    society now in Afghanistan and it is one of the foremost
    achievements of the last 18 years.
        Ms. Houlahan. Thank you. And my time has expired and I
    yield back.
        Mr. Sherman. We move from the gentlelady from Pennsylvania
    to the gentleman from Pennsylvania.
        Mr. Perry. Thanks, Mr. Chairman, and I thank our panelists
    for their attendance today.
        Ambassador Wells, I want to turn to India a little bit and
    have a discussion regarding our ties--correction--India's ties
    with Russia, especially on the military side and particularly
    their purchase or acquisition of S-400 surface-to-air missiles,
    and if that will result or, in your view, if it will invoke
    CAATSA sanctions. And what is India's calculation in receiving
    that weaponry from Russia and is there any indication that they
    did so because they couldn't get some like kind of capability
    from the United States?
        Ms. Wells. Thank you. I think we have seen India, over the
    years, in particular over the last 10 years, start to diversify
    its weapons sources. And so, we, our trade relationship in
    defense sector went from zero to 18 billion over the last 18
    years and we expect a continued progress in expanding that
    defense relationship. But it is still the case that about 65 or
    70 percent of India's military hardware is Russian origin. And
    when President Putin visited in October of last year, there
    were additional announcements of big-ticket military items that
    were potentially under consideration.
        What causes concerns with the S-400 is that it effectively
    could limit India's ability to increase our own
    interoperability, that at a certain point a strategic choice
    has to be made about partnership and a strategic choice about
    what weapons systems and platforms a country is going to adopt.
    It is the case that 10 years ago we did not offer the range of
    military equipment to India that we are prepared to offer
    today, and so we are very much engaged in a conversation with
    India over how we can broaden our defense relationship.
        And you saw a key step forward last year when the Ministers
    of State and Defense met each other, when we negotiated and
    signed the COMCASA agreement which allows for the sharing of
    classified information, one of these basic foundational
    agreements that foster military interoperability. So we are
    making, I think, significant strides forward in our military
    relationship. There is no blanket waiver or a country waiver
    when it comes to an S-400. We have serious concerns about a
    possible S-400 purchase and we are continuing our conversations
    on what the United States or other defense providers how they
    could assist India.
        Mr. Perry. Were we aware that they were in negotiation for
    the S-400 prior to its acquisition? I mean did we know they
    were engaging in that with Russia in advance of the acquisition
    and the delivery? I mean, were we in the conversation?
        Ms. Wells. We were aware of India and Russia's
    negotiations. These have been long-running.
        Mr. Perry. I am sure.
        Ms. Wells. Many, many years in the making, and so----
        Mr. Perry. So what did we do to try and dissuade, and
    encourage, dissuade India and encourage them to take a
    different path, particularly with the S-400, and did we do
    anything to offer any alternatives, or was it and is it
    inappropriate to do that at this time?
        Ms. Wells. Well, I think under the Trump administration we
    have been very clear that we are ready to help meet India's
    defense needs and we are seeking a very different kind of
    defense partnership, building on the major defense partner
    designation that India has received from Congress, and so how
    to make that as robust and as meaningful of a relationship as
    possible.
        You know, we now do more military exercises with India than
    with any other country. Just a few weeks ago, India, the United
    States, Philippines, and Japan did a sail-by in the South China
    Sea. In both our bilateral, trilateral, quadrilateral formats,
    we are working together in ways that we did not even conceive
    of 10 years ago. And so, we would like all aspects of our
    military relationship to catch up to this new partnership.
        Mr. Perry. What do you envision the relationship with the
    U.S. and India vis-a-vis China, strategically? I mean can you
    give us like a 1-2-3 overview of what the State Department
    envisions for that relationship or of that relationship vis-a-
    vis China?
        Ms. Wells. Both the United States and India believe in a
    free and open Indo-Pacific region. We believe--so, first, we
    are worried about China's ambitions and aggressions as they are
    manifesting themselves in the Indo-Pacific. I think, second, we
    are concerned by a policy of predatory lending, unsustainable
    loans, loans that do not adhere to labor, environmental
    standards and loans that have led to, in the Indian Ocean
    region, the loss of sovereignty, whether it is in Sri Lanka or
    Pakistan or what was about to happen in the Maldives.
        And so, I think we have a clear-eyed understanding of the
    need for us as like-minded democracies to work with other like-
    minded democracies like Japan and Australia to provide
    alternatives to countries in the region. We are not trying to
    make this a zero-sum game, but countries should as they pursue
    necessary infrastructure development not have to go down a road
    that is ultimately going to compromise their national security
    or their economic well-being.
        And we have, through our bilateral and now these
    quadrilateral sessions that we are doing with India, Japan, and
    Australia, we are working on sort of practical steps that we
    can take to coordinate on our finance development, so through
    the BUILD Act, the practical steps we can take to make sure our
    assistance programs, whether it is USAID or the Millennium
    Challenge Corporation, are helping to promote regional
    connectivity.
        And this is really one of the most exciting elements of the
    Indo-Pacific Strategy and where I expect to see a lot of
    progress. The President will be meeting with Prime Minister
    Modi and Prime Minister Abe in Japan at the G20 and we will
    have an opportunity, I think, to again highlight this new
    partnership of ours.
        Mr. Perry. Thank you, Mr. Chairman. I yield.
        Mr. Sherman. I now recognize the gentleman from Michigan.
        Mr. Levin. Thank you, Mr. Chairman.
        I am deeply concerned about the degradation of democracy in
    Bangladesh. When the people of Bangladesh went to vote in
    December, some were turned away. They were told polling
    stations were closed for lunch, had run out of ballots, and
    that is after reporters noticed that when polls opened some
    ballot boxes already appeared full. And that is after the
    Government of Bangladesh neglected to provide credentials and
    visas to most election monitors.
        And I would add that my own constituents who went to
    participate in--saw multiple, multiple violations of basic
    election procedures. Maybe it is no surprise then that the
    Awami League won 96 percent of the seats contested. I think we
    need to take these issues very seriously. The government-
    appointed Election Commission says the election was legitimate,
    but I do not think we can leave it at that.
        Ambassador Wells, what is the State Department doing to
    support thorough, independent investigations into these
    allegations of election fraud? With all due respect, it seems
    that we are just moving on.
        Ms. Wells. In our human rights report and in our public
    statement that followed the elections, we were clear that we
    did not consider the elections free and fair, given the
    widespread reports of irregularities that you have mentioned
    included the ballot box stuffing and the intimidation of
    opposition polling agents and voters, and certainly the legal
    cases that were brought against opposition candidates in the
    lead up to the elections.
        We have urged Bangladesh and the independent Election
    Commission to investigate these concerns seriously. At the same
    time, you know, we see that the six opposition members that
    were elected to Parliament have taken their seats and we are
    encouraging the opposition to participate fully to demonstrate
    that there needs to be, the government needs to have an
    opposition body to provide alternatives to, to shine a light on
    government practices.
        We do not lose sight of the fact that Bangladesh over the
    last, you know, years, has made significant strides in lifting
    millions of people out of poverty and the government's social
    indicators are noteworthy. And that is something to respect,
    and it is something to respect that this government has taken
    in a million----
        Mr. Levin. So that sort of mitigates our protection of
    basic democratic norms and procedures or it is a mitigating
    factor somehow?
        Ms. Wells. No, sir. I do not want to suggest that. I mean
    we have been very clear about our view on the election.
        Mr. Levin. All right. Well, then let me turn to the
    situation with Rohingya. The Government of Bangladesh has
    raised the possibility of relocating Rohingya refugees living
    in Cox's Bazar to Bhasan Char, an island in the Bay of Bengal.
    NGO's have expressed concern about this possibility noting that
    access to health care and other basic necessities could be
    limited on the island. It is particularly vulnerable to
    monsoons, and Yanghee Lee, the U.N. Special Rapporteur for
    Myanmar has questioned whether the island is even habitable.
        Ms. Steele, what is the administration's position on the
    potential relocation of Rohingya refugees to Bhasan Char?
        Ms. Steele. We have always informed both the Governments of
    Burma and Bangladesh that our position is to support voluntary
    returns. Voluntary, safe, and dignified returns to Burma.
        In terms of Bhasan Char, we have joined other donors in
    saying that we need to have an assessment of the island to make
    sure that these are livable and safe for the refugees.
        Mr. Levin. How long will such an assessment take?
        Ms. Steele. We do not know, and we have been encouraging
    donors to come together and continue to put pressure on the
    Government of Bangladesh. But as of now, the Government of
    Bangladesh has continually, as a result of pressure from the
    international community, the Government of Bangladesh has
    postponed, repeatedly postponed the movement of the refugees--
    --
        Mr. Levin. All right, thank you. And let me try to squeeze
    in one more question, again, about Bangladesh. As a result of
    the security situation there, the State Department has ordered
    the departure of families of Department personnel stationed
    there. State Department employees do not want to go there and
    be separated from their families and it is not a great work
    situation.
        When does State anticipate allowing families to return to
    Bangladesh, Ambassador Wells?
        Ms. Wells. Right. It is an ongoing process of reviewing the
    security situation and the government's ability to deal with
    potential terrorist incidents. The drawdown took place after
    the Holey Bakery attack that took place, you know, on the
    diplomatic enclave. So as somebody who has to recruit our
    officers to Bangladesh, I am keenly interested in being able to
    take that step forward when appropriate.
        Mr. Levin. All right, thank you.
        Thank you, Mr. Chairman. I yield back.
        Mr. Sherman. Thank you. I recognize the gentleman from
    Utah.
        Mr. Curtis. Thank you, Mr. Chairman and Ranking Member for
    holding this committee. Thank you to our witnesses who have
    come today. I would like to switch gears just a little bit to
    Nepal and reference the election of 2017 which was a pretty
    significant mandate and it seems like there has been some
    struggling since then.
        And I am going to let you all decide who can best answer
    this question. Can you give me an update on our relationship
    with that government as the U.S. Government and how that is
    going?
        Ms. Wells. We have a good, close working relationship with
    the Government of Nepal, which, you know, the government has
    had--there have been many governments over the last 5 years,
    and so the prospect of having an election which brings in a
    government for a full term offers a greater stability in
    decisionmaking and greater opportunity to move forward.
        In addition to the assistance that we provide under USAID,
    we have launched with Nepal a Millennium Challenge Corporation
    compact, which is you have a $500 million program, the Nepalese
    are contributing another 130 million, and it is an
    extraordinary sign, a signal of confidence in Nepal to
    demonstrate that working with Nepal we can create conditions of
    good governance that will help serve as a model for other
    foreign direct investment.
        In addition to the assistance, we have Peace Corps
    volunteers who have been in Nepal for over 70 years. We are
    growing our defense relationship focused on disaster assistance
    and humanitarian relief. We provided over $190 million in
    earthquake relief and continue to play a very important role in
    helping that government develop the housing standards and the
    retrofitting. So it is a robust relationship that is nOt just
    limited government to government, but really enjoys a strong
    people to people basis.
        Mr. Curtis. That is good. You talked a little bit earlier
    about China and relationship with some of these countries. We
    are worried about that as well and their acceptance of China's
    Belt and Road Initiative. It seems like we are going down the
    same path there with China with the predatory lending. Can you
    speak to that? And is the Millennium Challenge helping with
    that or what else can we be doing to change that course?
        Ms. Wells. We certainly discuss with the leadership and we
    had the Foreign Minister and Foreign Secretary here over the
    last several months to have partnership dialogs. We discussed
    with the leadership the concerns over predatory lending, the
    options that are available, whether it is through foreign
    direct investment where American companies are most active.
    Obviously, Nepal has a very close relationship with India which
    has a major role to play in Nepal and is Nepal's largest
    trading partner. So it is a subject of conversation and
    certainly Nepal is aware of our concerns.
        Mr. Curtis. Is that enough to keep them from going down
    that path and do we need to be doing more? I know that is a
    tough question and probably applies to the entire world, right?
        Ms. Wells. Well, it is interesting. Recently there was a
    joint U.S.-Chinese project in Nepal, a private sector project,
    a tunneling project, and that was what we sought to highlight
    to the government. When--it does not matter whether it is
    Chinese, Indian, you know, whoever is the lender, if the
    project is transparent, if it is competitively bid, if it meets
    international standards, we support it.
        Mr. Curtis. Sure.
        Ms. Wells. You know, Nepal needs infrastructure. But
    everyone needs to be careful about the terms that
    infrastructure is offered on.
        Mr. Curtis. Yes.
        Ms. Steele?
        Ms. Steele. Thank you. Nepal is one of our biggest target
    countries under the Indo-Pacific Strategy and through our
    assistance in the Indo-Pacific Strategy we were working with
    the government in order to address and prioritize the use of
    their public finances so that they can be more productive. We
    are helping them to generate revenue through better tax
    administration. We are helping them to improve the business
    processes in order to be able to attract more legitimate
    private enterprise investments so that they do not fall prey to
    the what, the offerings of others that would make them go into
    a long-term, unsustainable debt.
        So that is what we are doing with them, and we are hoping
    that they will be able to improve their competitiveness and
    address their corruption, which is a major issue for how
    countries fall under the debt trap.
        Mr. Curtis. I am pleased to hear that. I applaud those
    efforts and hope we can continue those and do even more and
    that you will continue to let Congress know what our role is in
    that. I think many of my colleagues are also very interested in
    that.
        Ms. Steele. I think the support that you have given on both
    sides through the Indo-Pacific Strategy is very encouraging and
    a very strong impetus for us to be able to move and achieve the
    goals and objectives of the Indo-Pacific Strategy.
        Mr. Curtis. Thank you. Mr. Chairman, I yield my time.
        Mr. Sherman. I will now recognize the gentlelady from
    Virginia.
        Ms. Spanberger. Thank you, Mr. Chair.
        Ambassador Wells, I have a question for you. According to
    the State Department's Congressional Budget Justification book
    for Fiscal Year 2020, they write, ``India's emergence as a
    regional security provider and global leader is essential to
    advancing U.S. interests.'' However, in June 2019, the White
    House formally ended concessions for India under the
    Generalized System of Preferences, GSP, which exempted Indian
    goods worth more than 6 billion from import duties. This move
    came in the context of ongoing tensions over U.S. imposition of
    steel and aluminum tariffs.
        I am curious if you could speak a little bit about what
    this impact is, how you think this GSP decision will impact our
    strategic relationship with India, and how the State Department
    is adjusting our foreign policy and engagement strategy because
    of it.
        Ms. Wells. We have a multifaceted relationship with India
    and, you know, on the whole, this is a partnership that is
    moving forward that is, it is the centerpiece, really, of an
    Indo-Pacific Strategy, and Secretary Pompeo spoke to that
    yesterday in his public remarks. It does not mean we do not
    have frictions. And one of the frictions, historically, has
    been on trade, on tariff barriers. India has the highest tariff
    barriers of a G20 country; historically, it has been a
    protected market. And so, our failure to negotiate an agreement
    over the course of the last year, year and a half, led to the
    decision to suspend the GSP benefits.
        And that said, when you look at the trade relationship, we
    have 142 billion trade relationship. It increased 12 percent
    last year. U.S. exports increased 28 percent. The trade deficit
    went down 11 percent, you know, to 24 billion. So, you know, we
    see India making strategic purchases of, you know, of defense
    industry or defense weaponry, of aviation, of energy. This is
    going to very much be at the top of the agenda when Secretary
    Pompeo visits India later this month.
        Ms. Spanberger. Do we have any concerns or should we be
    concerned that both the steel and aluminum tariffs and the GSP
    decision together could potentially push India closer to its
    cooperation with China, Russia, or even potentially Iran?
        Ms. Wells. I do not think so, no. I mean we are India's
    largest and best market, you know, 20 percent of India's goods
    come here. There is Indian foreign direct investment in the
    United States. There is huge interest by U.S. firms in India.
    As Prime Minister Modi begins his second term, you know, he is
    preoccupied with job creation, and attracting foreign direct
    investment is going to be a key part of that strategy.
        So, you know, trade properly, you know, conducted can be a
    huge strength to the relationship and that is certainly our
    focus as we begin our engagement with Prime Minister Modi in
    his second term is how do we, you know, affix this part of the
    relationship so it better matches the positive trajectory we
    see in other areas.
        Ms. Spanberger. Thank you. And recognizing some of the
    challenges and certainly may be a uptick in some difficulties,
    in your opinion, is there anything else that Congress could be
    doing, could be assisting in to ensure that we are retaining
    and building upon the relationship, this already strong
    relationship that we have with India?
        Ms. Wells. I think congressional support for the India-U.S.
    relationship has been extraordinary, you know, and the
    designation of India as a major defense partner, the bipartisan
    support that the relationship enjoys, has been critical and
    will continue to be critical. I mean this is a relationship
    where, you know, we have four million Indian Americans who also
    provide great ballast to the relationship and perspective on
    the relationship. And so I would just say please keep on
    providing that, that bipartisan consensus that we should be
    moving forward with India.
        Ms. Spanberger. Thank you, Ambassador Wells. And I thank
    the other witnesses for being here today and I yield back.
        Mr. Sherman. Thank you. We will now go to a second round. I
    believe everyone here has asked one round of questions.
        Ms. Wells, or Ambassador Wells, I did not promise you you
    get by with just one round. The current Sri Lankan Government
    came to power with overwhelming support in the Tamil community.
    The government has disappointed many in the Tamil community as
    far as its dedication to justice, peace, and reconciliation.
    There is little movement on a Federal constitution giving
    autonomy to the Tamil regions. And of course, much more needs
    to be done on accountability for human rights violations that
    have occurred during the civil war and especially its last
    phases.
        The Sri Lankan military--and this is probably the most
    important aspect, continue to hold on to civilian lands in
    Tamil areas, and of course the longer that is delayed--the
    longer they delay the return of that land, the more likely it
    is that the military occupation becomes permanent. What, you
    know, will we continue to press the Government of Sri Lanka on
    these issues of reconciliation with the Tamil community, and
    especially the need for the military to give up land that it is
    occupying?
        Ms. Wells. Yes. And we invited the Sri Lankan Foreign
    Minister and Foreign Secretary here to Washington for a
    strategic dialog and that was very much a part of the dialog.
    We welcome the fact that Sri Lanka, you know, has co-sponsored
    the U.N. Human Rights Commission resolution extending the
    international monitoring of its commitments to human rights,
    reconciliation, justice, and accountability. The progress has
    been slower than we would like to see.
        Mr. Sherman. I will count on you to continue to make that a
    priority for us.
        What level of aid have we provided for the Rohingya
    refugees in Bangladesh? Yes, Ms. Steele?
        Ms. Steele. The total amount of funding for the Rohingyas
    both in Burma and Bangladesh is approximately $500 million to
    date, starting in 2017.
        Mr. Sherman. So that is 500 million a year?
        Ms. Steele. No, 500 million----
        Mr. Sherman. Total.
        Ms. Steele [continuing]. Since 2017.
        Mr. Sherman. Since 2017, so the--and with the
    administration budget request what would it be of the coming
    fiscal year?
        Ms. Steele. A significant amount of the funding that goes
    through the Rohingya is humanitarian assistance which is not
    included in the budget that you have reviewed.
        Mr. Sherman. Ah. It is not included in the----
        Ms. Steele. In the budget that we are discussing. It is,
    for instance, for USAID it is part of our Office of Foreign
    Disaster Assistance.
        Mr. Sherman. Right.
        Ms. Steele. And Food for Peace, which is separate from the
    budget that we----
        Mr. Sherman. I realize it is outside the purview of your
    agency. Do you happen to know what it is? Can you give us a
    number or----
        Ms. Steele. Oh, I am not aware of what the number is for--
    --
        Mr. Sherman. OK, so we will have to----
        Ms. Steele [continuing]. For budget outside of my bureau.
        Mr. Sherman [continuing]. We will have to put it together.
    Obviously, Bangladesh is a poor country and has taken in people
    that would otherwise be not only ethnically cleansed but
    subject to genocide. And I realize that--well, I believe,
    Ambassador Wells, your purview does not extend to Myanmar
    Burma? No.
        But the question I have, and I guess this affects your
    purview, is whether the United States will take the position
    that if the Government of Burma, Myanmar does not extend
    citizenship and protection to the Rohingya who were born there
    that we would support the transfer of North Rakhine State to
    Bangladeshi sovereignty. That is right on the border,
    literally, of your jurisdiction.
        Ms. Wells. Well, I will not speak for my colleagues, but I
    think it is a traditional position of State Department that we
    support the territorial integrity of countries and the
    sovereignty of countries.
        Mr. Sherman. But when the people of South Sudan were
    subject to horrific treatment by the Khartoum government, we
    were in effect the midwives for the creation of an independent
    South Sudan. And I will not say that that has worked out well,
    but we did support the creation of an independent State when a
    government in Khartoum could not.
        Ms. Wells. Right. What we have focused on is, you know, can
    we get the conditions in Myanmar so you can have Rohingya go
    and look and see what their neighborhoods look like. Are the
    conditions such that they have confidence in returning, you
    know, how can we----
        Mr. Sherman. And is citizenship and passports part of that?
        Ms. Wells. The U.N. Report recommendations listed, you
    know, citizenship as one of the key issues that would help
    restore confidence. I think right now, you know, the Rohingya
    would like to return home if the conditions support a dignified
    return. And for those countries that are working in Myanmar and
    supporting the Myanmar Government, is how do we get the Myanmar
    Government to create those conditions.
        Mr. Sherman. Yes. I would say if the Myanmar Government
    does not announce that it is dedicated to the protection of
    these people and the issuance of citizenship documents, that we
    alter our position and call for the transfer of North Rakhine
    State to a country that will protect these people. This is
    their land. They have lived there for generations. And they
    have been subject to, I think, cleansing, and one might say
    attempted genocide.
        Certainly, if you lay that out compared to the facts of
    South Sudan, a change in international borders would be called
    for. Keep in mind, the government of Khartoum never denied the
    citizenship of the people of South Sudan.
        I will turn to Ms. Steele. What steps can USAID and the
    State Department take to partner with the charitable efforts of
    the South Asia diaspora community in the United States to help
    the people of South Asia? How can you work with the large and
    generous diaspora community?
        Ms. Steele. We have been working with them, in particular
    with the Indian diaspora, in order to identify areas where we
    could work together. And they have the same interests as we do
    in addressing, for instance, the health issues and air
    pollution issues in the country. India--well, I met with a
    diaspora group of the Indian diaspora group recently, and they
    had expressed deep concern over the fact that India has the
    highest TB rate in the world. One-sixth of maternal and child
    mortality happens in India, and some of the high--most polluted
    cities in the world are in India.
        And so we have agreed to work together. Our proposed plan
    to create a foundation, the U.S.-India Development Foundation,
    using Indian private sector is intended to capitalize and
    mobilize on Indian resources to address our joint interests in
    development.
        Mr. Sherman. I thank you. And we often hear in Washington
    of public-private partnerships. When I hear that phrase I get
    concerned that maybe the deal is too good for private investors
    seeking a profit, but in the case we are talking about here, we
    are talking about a public-private partnership with charitable
    intent.
        And with that I will recognize the ranking member.
        Mr. Yoho. Thank you for the second round, Mr. Chairman.
        If we go back to Afghanistan, if a deal is struck with the
    Taliban, what concerns do you have with regard to the progress
    we have made on the rights of Afghan women? And I want to kind
    of focus this again on, you know, we always stress building
    democracies versus let's build a stable government, and if we
    build a stable government we can progress into these things and
    think a lot quicker.
        So I would like to hear, Ms. Steele, if you want to answer
    that.
        Ms. Steele. I do not cover Afghanistan, Congressman. I
    would like to defer to----
        Mr. Yoho. I am sorry. I am sorry.
        Ms. Freeman?
        Ms. Freeman. Those proud women are in my jurisdiction.
        USAID has had a history since the early years, in fact, the
    entrance into Afghanistan of working very closely with the
    women of Afghanistan in supporting their advancement. It is
    amazing to look back at 2001 when they had no access to
    education, to private sector, anything, and now in 2018 when we
    can look at--I recently attended a trade show in India that was
    between Afghanistan and India and, there, women attended and
    they were able to cut $500 million in contracts.
        Mr. Yoho. That trade show was in India?
        Ms. Freeman. Yes.
        Mr. Yoho. And there were women from Afghanistan?
        Ms. Freeman. There were, indeed. And their attendance,
    their participation really highlighted their experience, the
    increase in their capabilities and how much they shine outside
    in the business world. Currently, we have been able to leverage
    about $3.2 million in private sectors loans to about over 1,700
    women.
        Mr. Yoho. What are the results of that? What kind of loans?
    Are they creating businesses?
        Ms. Freeman. These are new business loans, exactly, to----
        Mr. Yoho. Are they becoming successful businesses?
        Ms. Freeman. Indeed, they are. And we have been working
    with them with the Women's Chamber there in Kabul and to expand
    their access to not only financing, but also in terms of
    leveraging their ability to raise their voices and speak their
    concerns to the government as well.
        Mr. Yoho. Has the tolerance of the Taliban toward women in
    society, education, has that improved since we all remember how
    they came in and--I remember that one young girl that got shot
    in the eye as a signal that they do not want women being
    educated. Has their outlook changed on women becoming educated,
    women being involved in business?
        Ms. Freeman. I would highly doubt it, but I would----
        Mr. Yoho. Me too.
        Ms. Freeman [continuing]. Cede to my colleague.
        Ms. Wells. The Taliban say that their views on education
    have changed and the proof is going to be in looking at the
    areas that they control or dominate and what is the situation
    there, and you see a variety of practices. You do see girls'
    schools operating. In some conservative places they do not. In
    some places they have more of a religious education. They
    divert from the curriculum of the Ministry of Education.
        But in the conversations that the Taliban are having with
    us and with other like-minded countries, they emphasize the
    fact that their views have evolved when it comes to education
    and working outside the house.
        Mr. Yoho. Let me ask you this then. What concerns do you
    have with the elements of the Taliban splintering off from the
    group and aligning themselves with ISIS and how is that going
    to affect the progress that we have made if we do not have a
    stable government there?
        Ms. Wells. It is certainly a possibility for members of the
    Taliban to hive off and join ISIS. Some members already have.
    And that is why it is going to be critical that any peace
    agreement contain those guarantees----
        Mr. Yoho. Right.
        Ms. Wells [continuing]. By the Taliban that they are
    opposed to any terrorist presence and will combat any terrorist
    presence on Afghanistan soil.
        Mr. Yoho. Well, that is why I keep bringing up, you know, I
    think our focus should be on a stable government, because look
    at South Korea after the Korean conflict. It wasn't what we
    would call a democracy, but after a short period of time once
    they started gravitating that way, they are our sixth largest
    trading partner today.
        I look at Vietnam after the Vietnam War, you know, we went
    in there to prevent communism. It is a communist country, but
    yet today it is a vibrant, market economy and we see baby steps
    moving in the right direction for human rights. You know, we
    cannot expect them to get to where we are at after our 200-year
    struggle and we still do not have it right.
        So if we focus on those things that we know will stabilize
    a government: rule of law, honor it in contracts basic human
    rights, drawing them this way. As the people become more to
    experience liberty and freedom, I think then you will see the
    changes that we want versus trying to push it the other way
    that causes the resentment in governments or groups like the
    Taliban.
        Mr. Chairman, I yield back and thank you for the second
    round. Thank you all.
        Mr. Sherman. You are free to leave.
        [Whereupon, at 10:57 a.m., the subcommittee was adjourned.]

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