[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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