[Senate Hearing 118-543]
[From the U.S. Government Publishing Office]
S. Hrg. 118-543
Senate Hearings
Before the Committee on Appropriations
_______________________________________________________________________
State, Foreign Operations,
and Related Programs
Appropriations
Fiscal Year
2024
118th CONGRESS, FIRST SESSION
H.R. 4665/S. 2438
ADVANCING SECURITY AND PROSPERITY THROUGH INTERNATIONAL CONSERVATION
ENHANCING AMERICAN COMPETITIVENESS THROUGH THE U.S. INTERNATIONAL DEVELOPMENT
FINANCE CORPORATION
UNITED STATES AGENCY FOR INTERNATIONAL DEVELOPMENT
UNITED STATES DEPARTMENT OF STATE
S. Hrg. 118-543
STATE, FOREIGN OPERATIONS, AND RELATED
PROGRAMS APPROPRIATIONS FOR FISCAL
YEAR 2024
=======================================================================
HEARINGS
BEFORE A
SUBCOMMITTEE OF THE
COMMITTEE ON APPROPRIATIONS UNITED STATES SENATE
ONE HUNDRED EIGHTEENTH CONGRESS
FIRST SESSION
on
H.R. 4665/S. 2438
AN ACT MAKING APPROPRIATIONS FOR THE DEPARTMENT OF STATE, FOREIGN
OPERATIONS, AND RELATED PROGRAMS FOR THE FISCAL YEAR ENDING SEPTEMBER
30, 2024, AND FOR OTHER PURPOSES
__________
Advancing Security and Prosperity Through International Conservation
Enhancing American Competitiveness Through the U.S. International
Development Finance Corporation
United States Agency For International Development
United States Department of State
__________
Printed for the use of the Committee on Appropriations
GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Available via the World Wide Web: http://www.govinfo.gov
__________
U.S. GOVERNMENT PUBLISHING OFFICE
50-533 PDF WASHINGTON : 2025
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COMMITTEE ON APPROPRIATIONS
PATTY MURRAY, Washington, Chair
DIANNE FEINSTEIN, California \1\ SUSAN M. COLLINS, Maine, Vice
RICHARD J. DURBIN, Illinois Chair
JACK REED, Rhode Island MITCH McCONNELL, Kentucky
JON TESTER, Montana LISA MURKOWSKI, Alaska
JEANNE SHAHEEN, New Hampshire LINDSEY GRAHAM, South Carolina
JEFF MERKLEY, Oregon JERRY MORAN, Kansas
CHRISTOPHER A. COONS, Delaware JOHN HOEVEN, North Dakota
BRIAN SCHATZ, Hawaii JOHN BOOZMAN, Arkansas
TAMMY BALDWIN, Wisconsin SHELLEY MOORE CAPITO, West
CHRISTOPHER MURPHY, Connecticut Virginia
JOE MANCHIN, III, West Virginia JOHN KENNEDY, Louisiana
CHRIS VAN HOLLEN, Maryland CINDY HYDE-SMITH, Mississippi
MARTIN HEINRICH, New Mexico BILL HAGERTY, Tennessee
GARY PETERS, Michigan KATIE BRITT, Alabama
KYRSTEN SINEMA, Arizona \2\ MARCO RUBIO, Florida
DEB FISCHER, Nebraska
Evan Schatz, Staff Director
Elizabeth McDonnell, Minority Staff Director
------
Subcommittee on State, Foreign Operations, and Related Programs
CHRISTOPHER A. COONS, Delaware, Chairman
RICHARD J. DURBIN, Illinois LINDSEY GRAHAM, South Carolina,
JEANNE SHAHEEN, New Hampshire Ranking Member
JEFF MERKLEY, Oregon MITCH McCONNELL, Kentucky
CHRISTOPHER MURPHY, Connecticut JOHN BOOZMAN, Arkansas
CHRIS VAN HOLLEN, Maryland JERRY MORAN, Kansas
BRIAN SCHATZ, Hawaii MARCO RUBIO, Florida
BILL HAGERTY, Tennessee
Professional Staff
Alex Carnes
Kali Farahmand
Sarita Vanka
Drew Platt
Paul Grove (Minority)
Katherine Bowles (Minority)
Adam Yezerski (Minority)
Administrative Support
LaShawnda Smith (Minority)
\1\ Died September 29, 2023.
\2\ Appointed to Committee October 18, 2023.
\3\ Appointed to Subcommittee November 2, 2023. deg.
C O N T E N T S
----------
hearings
Wednesday, March 22, 2023
Page
U.S. Department of State......................................... 1
Wednesday, April 19, 2023
United States Agency for International Development............... 81
Tuesday, May 2, 2023
Advancing Security and Prosperity Through International
Conservation................................................... 125
Wednesday, June 14, 2023
Enhancing American Competitiveness Through the U.S. International
Development Finance Corporation................................ 159
----------
back matter
List of Witnesses, Communications, and Prepared Statements....... 191
Subject Index:
Advancing Security and Prosperity Through International
Conservation............................................... 193
Enhancing American Competitiveness Through the U.S.
International Development Finance Corporation.............. 193
United States Agency for International Development........... 193
U.S. Department of State..................................... 193
STATE, FOREIGN OPERATIONS, AND RELATED PROGRAMS APPROPRIATIONS FOR
FISCAL YEAR 2024
----------
WEDNESDAY, MARCH 22, 2023
U.S. Senate,
Subcommittee of the Committee on Appropriations,
Washington, DC.
The subcommittee met at 10:02 a.m., in room SD-138, Dirksen
Senate Office Building, Hon. Christopher Coons (Chairman),
presiding.
Present: Senators Coons, Shaheen, Merkley, Murphy, Van
Hollen, Schatz, Murray, Graham, Boozman, Moran, Rubio, Hagerty,
and Collins.
U.S. DEPARTMENT OF STATE
opening statement of senator christopher coons
Senator Coons. I call this hearing to order. Welcome to the
first State and Foreign Operations Hearing of the fiscal year
2024 Appropriations process.
Each member of the subcommittee will have 7 minutes for
questions. Those present will be called in order of seniority,
followed by members in order of arrival. Alternating sides, of
course, between the parties. If you miss your turn and later
come back and rejoin, I will do my best to insert you at the
appropriate time. We will have a second round of questions,
time permitting.
Mr. Secretary, it is great to have you with us again. We
have a lot to cover. But let me briefly first mention that
tomorrow is the 1 year anniversary of the passing of a dear
friend, Secretary Madeleine Albright. I was pleased that we
could honor her tremendous impact on U.S. diplomacy and
national security in last year's fiscal year 2023 SFOPS Bill,
and will continue to reflect our shared values through the work
of the State Department.
Thank you, Mr. Secretary, for what you are doing to keep
alive her memory, as someone who was a clear-eyed, high
spirited, and hardworking advocate for our unique role, as the
indispensable nation.
I know that you and the President also believe in the
importance, the centrality of bipartisanship in foreign policy.
I am very fortunate to have Senator Graham as the Ranking
Member on this subcommittee, and strong subcommittee membership
on both sides of the aisle. I am confident we can forge and
maintain bipartisan support to address the most critical
challenges facing us, and to advance America's interests,
including supporting Ukraine's determined fight against Russian
aggression, countering the threats posed by China, and
leveraging our trade tools in the private sector to drive our
core economic interests.
We have made real progress together to advance our national
security priorities over the last 2 years, this subcommittee
has provided you and the President with the tools you need to
lead the international community in unwavering support of the
Ukrainian people. We have recognized the need to enhance U.S.
competitiveness globally, using our diplomatic and
developmental tools, especially to address the coercive
influence of authoritarian states, like the PRC and Russia.
We work closely together to help you strengthen the State
Department workforce, provided additional flexibility,
increased funding, and work to expand the U.S. presence
overseas, accordingly, including in the Indo-Pacific.
We have addressed the impacts of an unprecedented number of
globally displaced people, roughly 100 million, so far, and an
ongoing global food crisis. And we reaffirmed U.S. multilateral
engagement by enabling you to rejoin UNESCO, and increase
investments to support Americans seeking entry-level and
leadership positions in international organizations.
But, we face enormous challenges. Vladimir Putin continues
his barbaric assault on Ukraine. The PRC, through
misinformation, and expanded diplomatic developmental trade
investments seeks to reshape the global environment challenging
our core interests. There are the ongoing impacts of climate
change including increased water and food insecurity that are
driving mass displacement and fueling instability. And a
sustained global trend of democratic backsliding.
We need to be proactive, and use every tool at our disposal
to get ahead of these challenges. Your task is daunting, and my
message to my colleagues is simple: We can't do more with less.
We must increase our investments in our diplomatic and
development tools if we want to strengthen our national
security. That is why I am encouraged by the fiscal year 2024
budget request for the State Department, USAID, and Related
Agencies. It is an ambitious request, but the challenges of our
time demand no less.
We look forward to discussing the details with you,
including your highest priorities, as we consider how best to
support the Department's critically important people, programs,
and operations.
Thank you, Mr. Secretary.
Senator Graham.
opening statement of senator lindsey graham
Senator Graham. Thank you, Mr. Chairman. I want to also
welcome Senator Collins, and Senator Murray. They have done a
good job of getting the Committee back in business. We are
having hearings, we are going to do markups, we are going to
become appropriators again, and that is welcome news to me.
As to the budget request, it is ambitious. We have got to
deal with the House eventually. An 11 percent increase, I don't
think the market will bear that, but we will do the best we
can. I consider this account to be national security in another
form. Soft power, to me, is just as important as hard power,
and many times even more important.
We are dealing with real threats out there. Countering
China is one of them. A 13.1 billion dollar mandatory spending
request in this budget is not going to fly. We need to
appropriate money directly to counter the influence of China,
but it will not be in a mandatory spending construct, like it
has been requested. I want to work with you Mr. Chairman, and
the Department, for coming up with some funds to counter China
throughout the world, particularly in their backyard.
Bottom line is we will get the bill done. We always do. I
enjoy working with you. On Taiwan: there is no funding in the
budget, specifically, for Taiwan. Senator Menendez and I, and
many others have pushed for a $2 million authorization for
Taiwan's defense needs, and I think we need to put money
directed for Taiwan's defense needs in the bill during markup,
when that time comes.
But Mr. Secretary, I want to say this to you and your
personnel; you serve in very dangerous places without a lot of
military support at times. The military gets a lot of credit,
and they deserve it, but our men and women of the State
Department, they are heroes in their own way. And I appreciate
what they do for our country.
Senator Coons. Thank you, Ranking Member Graham.
It is my understanding the Chair and Vice Chair did not
want to make opening statements?
Senator Murray. I do have one, but I can wait for the
Secretary.
Senator Coons. Mr. Secretary, if you would, please proceed.
STATEMENT OF HON. ANTONY J. BLINKEN, U.S. SECRETARY OF
STATE, U.S. DEPARTMENT OF STATE
Secretary Blinken. Thank you, very, very much.
Chairman Coons, Ranking Member Graham, very good to be with
you; Chair Murray, Vice Chair Collins, to all the Committee
Members here today, thank you for this opportunity to speak
with you about our proposed fiscal year 2024 budget for the
State Department and USAID.
And I think as you have both laid out in different ways, we
are meeting at an inflection point. The post-Cold War era is
over, and there is an intense competition underway to shape, to
determine, what comes next.
We, the United States, have a positive vision for the
future: a world that is free, that is secure, that is open,
that is prosperous. And it is our belief that the budget that
we put forward will help advance that vision and deliver on
issues that actually matter to the American people,
particularly by preparing us to effectively meet two broad sets
of challenges.
The first is the challenge posed by our strategic
competitors. The immediate, acute threat posed by Russia's
autocracy and aggression, most destructively, of course,
through its brutal aggression against Ukraine, and the long-
term challenge from the People's Republic of China.
The second set of challenges is really posed by shared
global tests, including the climate crisis, migration, food and
energy insecurity, pandemics, all of which directly impact the
lives and livelihoods of Americans and people around the world.
With this committee's leadership and support, including
through the fiscal year 2023 Omnibus, the United States is in a
stronger geopolitical position than we were 2 years ago, hence
our ability to deal with these challenges, I think has been
enhanced.
We have drawn enormous power from investments that we have
made in our own economic strength and technological edge at
home, including through the Infrastructure and Jobs Act, the
CHIPS and Science Act, the Inflation Reduction Act.
The unmatched network of alliances and partnerships has
never been stronger. In fact, we have been building on it, not
only strengthening existing alliances and partnerships, but
building new coalitions of countries and other institutions
that are fit-for-purpose.
We are expanding our presence in critical regions, like the
Indo-Pacific. We are leading the unprecedented coalitions to
confront aggression and address humanitarian challenges around
the world.
The fiscal year 2024 budget request for the State
Department and USAID meets this moment head on. This budget
will sustain our security, economic, energy, and humanitarian
support for Ukraine to ensure that President Putin's war
remains a strategic failure.
It will strengthen our efforts to outcompete the PRC.
President Biden is firmly committed to advancing a free and
open Indo-Pacific, which is why this proposal asks for an 18
percent increase in our budget for that region over fiscal year
2023.
The budget contains both discretionary and mandatory
proposals, and we are happy to talk about why we proceeded this
way, for new, innovative investments to outcompete China.
Including, by enhancing our presence in the region, and
ensuring that what we and our fellow democracies are able to
offer, including maritime security, disease surveillance, clean
energy infrastructure, digital technology, is more attractive
than any alternative.
The budget will help us push back on advancing
authoritarianism and democratic backsliding by strengthening
democracies around the world, including through supporting
independent media, countering corruption, defending free and
fair elections. And it will allow us to pay our contributions
to international organizations, because we need to be at the
table wherever and whenever new international rules that affect
the livelihoods of our people are being debated and being
decided.
The budget will allow us to continue leading the world to
addressing these global challenges, from food and energy
insecurity to climate and health crises.
And just on that last point, as you all know, we are
celebrating now the 20th anniversary of PEPFAR, which I think
is one of the greatest achievements in our foreign policy over
the last decades. It has helped us save 25 million lives around
the world.
This budget will help us continue the fight against HIV/
AIDS, while advancing health security more broadly through a
new Bureau of Global Health Security and Diplomacy, which I
look forward to working with Congress to establish this year.
The budget will advance our efforts to modernize the State
Department, including by expanding our training float, updating
our technology, carrying out diversity, equity, inclusion, and
accessibility initiatives including, to make our overseas
missions more accessible.
I am grateful for the progress we have already made
together, including Congress' support in updating the Secure
Embassy Construction and Counterterrorism Act, and
Accountability Review Board to give us some of the flexibility
that we need to open new missions and better manage the risks
that we face.
We know there is more to do. And we are looking forward to
working with Congress to accelerate these modernization efforts
so that the Department can better attract, better retain, and
support a first-rate workforce as they advance our interests in
what is a very complex and fast-moving world.
Finally, the budget will further a personal priority for
me, and I know for many of you, and that is supporting Enduring
Welcome, our whole-of-government effort to resettle our Afghan
allies. Keeping our promises to those who served alongside the
U.S. remains an unwavering priority. This budget will help us
continue to make good on that commitment.
When I took on this role, I committed to doing my part to
try to restore Congress' place as an equal partner in our
foreign policymaking. I am determined to continue to do that
and very much appreciate the work that we have been able to do
with this committee over the last couple of years and look
forward to the work ahead.
And with that, I welcome any questions. Thank you.
[The statement follows:]
Prepared Statement of Secretary of State Hon. Antony J. Blinken
Chairman Coons, Ranking Member Graham, Chair Murray, Vice Chair
Collins, committee members: thank you for the opportunity to speak with
you about the administration's proposed FY 2024 budget for the State
Department and USAID.
We meet at an inflection point. The post-Cold War world is over,
and there is an intense competition underway to determine what comes
next. The United States has a positive vision for the future: a world
that's free, secure, open and prosperous.
This budget will help us advance that vision, and deliver on the
issues that matter most to the American people, by preparing us to meet
two major sets of challenges.
The first set is posed by our strategic competitors--the immediate,
acute threat posed by Russia's autocracy and aggression, most
destructively through its brutal war against Ukraine . . . and the
long-term challenge from the People's Republic of China.
The second set is posed by shared global tests, including the
climate crisis, migration, food and energy insecurity, and pandemics,
all of which directly impact the lives and livelihoods of Americans and
all peoples around the world.
With this Committee's leadership and support, including through the
FY 2023 Omnibus, the United States is in a stronger geopolitical
position than we were 2 years ago.
We've drawn enormous power from investments we've made in our
economic strength and technological edge at home, including through the
Infrastructure Investment and Jobs Act, the CHIPS and Science Act and
the Inflation Reduction Act. Our unmatched network of alliances and
partnerships has never been stronger. We're expanding our presence in
critical regions, like the Indo-Pacific. And we're leading
unprecedented coalitions to confront aggression and address
humanitarian crises worldwide.
The President's FY 2024 budget request for the State Department and
USAID meets this moment head on.
This budget will sustain our security, economic, energy, and
humanitarian support for Ukraine to ensure President Putin's war
remains a strategic failure.
This budget will also strengthen our efforts to outcompete the PRC.
President Biden is firmly committed to advancing a free and open Indo-
Pacific, which is why this proposal asks for an 18% increase in our
budget for that region over FY 2023. The budget contains both
discretionary and mandatory proposals for new innovative investments to
outcompete China--including by enhancing our presence in the region,
and ensuring what we and our fellow democracies have to offer,
including maritime security, disease surveillance, clean energy
infrastructure to digital technology, is more attractive than any
alternative.
This budget will help us push back on advancing authoritarianism
and democratic backsliding by strengthening democracies worldwide--
including through supporting independent media, countering corruption,
and defending free and fair elections. And it will allow us to pay our
contributions to international organizations, because the United States
needs to be at the table wherever and whenever new international rules
that affect the livelihoods of our people are debated and decided.
This budget will allow us to continue leading the world in
addressing global challenges, from food and energy insecurity to
climate and health crises. On that last point: we're celebrating the
20th anniversary of PEPFAR, which has helped us save 25 million lives
worldwide. This budget will help us continue the fight against HIV/
AIDS, while advancing health security more broadly through a new Bureau
of Global Health Security and Diplomacy, which I look forward to
working with Congress to establish this year.
This budget will advance our efforts to modernize the State
Department, including by expanding our training float, updating our
technology, and carrying out diversity, equity, inclusion, and
accessibility (DEIA) initiatives, including to make our overseas
missions more accessible. I'm grateful for the progress we've already
made together, including Congress' support in updating the Secure
Embassy Construction and Counterterrorism Act and Accountability Review
Board to give us the flexibility to open new missions and better manage
risks. We know there's more to do, and we're looking forward to working
with Congress to accelerate modernization efforts, so the Department
can better attract, retain, and support our first-rate workforce as
they advance U.S. interests in a complex and fast-moving landscape.
Finally, this budget will further a personal priority for me, and I
know for many of you: supporting Enduring Welcome, our whole-of-
government effort to resettle our Afghan allies. Keeping our promises
to those who served the U.S. remains an unwavering priority, and this
budget will help us continue to make good on that commitment.
When I began this role, I committed to restoring Congress's place
as an equal partner in our foreign policymaking.
I'm looking forward to continuing that close coordination, and I'm
grateful for the chance to answer your questions. Thank you.
Prepared Statement of Diana R. Shaw, Deputy Inspector General*
(*Performing The Duties Of The Inspector General) United States
Department of State
Chairman Coons, Ranking Member Graham, and distinguished Members of
the Subcommittee, thank you for the opportunity to provide testimony
today for this hearing on the U.S. Department of State's fiscal year
2024 budget request.
The Office of Inspector General (OIG) for the U.S. Department of
State (Department) inspects embassies and diplomatic posts throughout
the world to determine whether policy goals are being achieved and
whether the interests of the United States are being represented and
advanced effectively. OIG performs specialized security inspections and
audits in support of the Department's mission to provide effective
protection to our personnel, facilities, and sensitive information. OIG
also audits Department operations and activities to ensure that they
are as effective and efficient as possible. Finally, OIG investigates
instances of fraud, waste, and mismanagement that may constitute either
criminal wrongdoing or violations of Department regulations. In short,
OIG plays a crucial role in overseeing the funds Congress appropriates
to the Department for its many programs and activities and we believe
that our work can play an important role in assisting Subcommittee
Members with funding decisions.
A growing and substantial element of our mission emerged within the
last year: oversight of the U.S. government's response to the invasion
of Ukraine. In the past fiscal year, we have worked closely with our
OIG counterparts in the Department of Defense (DoD) and the U.S. Agency
for International Development (USAID), as well as the broader oversight
community, to ensure comprehensive oversight of the more than $113
billion in U.S. assistance that has been appropriated as a result of
the war in Ukraine. This remains our top priority for the coming year.
In this testimony, I will discuss the nature and scope of our
oversight mission, various projects related to Ukraine and Afghanistan,
and other recently completed and noteworthy projects. I will conclude
by making an appeal for the subcommittee's assistance in addressing
OIG's resource challenges.
mission and results
OIG's mandate covers both Department and the U.S. Agency for Global
Media (USAGM) programs and operations, which include more than 80,000
employees and more than 270 overseas missions and domestic entities. We
also oversee the U.S. Section of the International Boundary and Water
Commission, a Federal agency that operates under the foreign policy
guidance of the Department. In terms of dollars, we are responsible for
the oversight of more than $81 billion in Department, USAGM, and
foreign assistance resources.
In pursuit of this mission, OIG provides valuable return on
investment through its audits, evaluations, inspections, and
investigations. In FY 2022 alone, OIG identified nearly $400 million in
questioned costs and taxpayer funds that could be put to better use.
Additionally, OIG's criminal, civil, and administrative investigations
produced $14.7 million in monetary results (including fines,
restitution, and recoveries) in the last fiscal year.
Our work consistently results in findings and recommendations that
significantly improve the programs and activities we oversee--including
improvements that are not easily quantifiable, such as our safety and
security work. By helping the Department improve its security, OIG's
work safeguards the lives of the thousands of people who work in or
visit U.S. posts abroad and at home. Our recommendations frequently
address inadequate compliance with emergency planning standards and
facility safety and security deficiencies.
Further, our investigative work consistently holds employees,
contractors, and grantees accountable. In FY 2022, OIG obtained 14
indictments or informations\1\ and 16 convictions. In one case, a
former employee was sentenced to 5 years in prison and ordered to pay
approximately $2 million in restitution for using his official position
to embezzle grant money by falsifying official documents to solicit
overpayments.
ukraine-related work
As mentioned, Ukraine oversight is our top priority. State OIG,
along with DoD and USAID OIGs, as well as other U.S. government
oversight organizations, have adopted a collaborative approach to
ensure that our oversight of the U.S. government's response to the
Ukraine crisis is comprehensive, relevant, timely, and transparent, and
preemptively identifies and mitigates gaps in coverage or duplication
of effort. At State OIG, we have 43 staff members working on Ukraine
oversight projects full time and a total of 107 staff members
contributing on at least a part-time basis. Congress provided us with
$13.5 million in dedicated funding for Ukraine response oversight--
funds that are available through FY 2024. We are grateful for this
essential support and are using these funds to support about two dozen
Ukraine response oversight projects. As of today, we have completed
four of these projects.
One of the completed projects is an information brief issued in
December of last year.\2\ This brief is a tool for decisionmakers at
the Department to assist them with preventing and mitigating challenges
encountered in similar situations. In the brief, we noted that Embassy
Kyiv's dispersed operations, with essential functions simultaneously
based in Poland and Ukraine, present a similar set of leadership and
management challenges faced by remote missions examined in prior work.
The brief highlights effective practices for addressing such challenges
and was well received by Department personnel.
Also in the brief, we noted the challenge of conducting official
activities in Ukraine where there are significant security
restrictions. Although this makes monitoring and evaluation activities
difficult, we identified and shared practices from our past work that
have been successful in addressing such difficult circumstances,
including the establishment of third-party monitoring contracts to
increase visibility on the ground and the need to properly document
monitoring and evaluation practices.
We have many other projects underway, including a review of the
management and operations at Embassy Kyiv to determine whether the
Department established a foreign assistance strategy and how it is
exercising its foreign assistance coordination responsibilities. We
will also describe Embassy Kyiv's operating status, highlight potential
risks, and outline how the Department plans to address facilities,
staffing, and security challenges. Other projects will address end use
monitoring of security assistance to Ukraine and examine whether the
Department implemented Ukraine-related humanitarian assistance in
accordance with policies, guidance, and award terms and conditions to
ensure funds achieve intended objectives.
I believe that robust oversight of the U.S. government's response
to the invasion of Ukraine will help give both taxpayers and Congress
the necessary confidence that our resources are being used efficiently
and effectively.
afghanistan-related work
Another priority is oversight of the withdrawal from Afghanistan.
In the wake of the Department's suspension of operations in 2021, OIG
devoted substantial time and resources to planning and coordinating
oversight activities focusing on key aspects of the situation and its
aftermath. For example, in response to a congressional request, OIG
issued an information report on the Afghan special immigrant visa
(SIV)\3\ process and related data.\4\ In an audit of the same program,
we found that the Department's actions to address open OIG
recommendations related to the SIV process did not improve methods for
collecting or verifying Afghan SIV application processing times.\5\
Specifically, the Department established procedures for calculating the
average processing time for applications; however, it continued to use
inconsistent calculation methods because the procedures lacked details
and did not encompass the entire Afghan SIV process.
In addition, we discovered a lack of internal controls for
verifying Afghan SIV data and the Department continued to face a
significant SIV application backlog. The backlog occurred for several
reasons, including insufficient staffing, limited coordination with the
Department of Defense, and the lack of prioritizing SIV functionality
within the Department's consular system modernization program. We
concluded that these deficiencies may have delayed vulnerable Afghan
allies from reaching safety.
In other work, we inspected the Afghanistan Affairs Unit (AAU) and
learned that Department and interagency stakeholders were unclear about
the lines of responsibility among the multiple Department entities that
had a role in managing U.S. government policy or programs for
Afghanistan: the AAU, the Special Representative for Afghanistan, the
Bureau of South and Central Asian Affairs' Afghanistan Desk, and the
Special Envoy for Afghan Women, Girls, and Human Rights, among others.
Although there was some principal-level coordination, an understanding
about the division of responsibilities at the working level was less
clear. Failure to redefine responsibilities and authorities when
multiple entities contribute to the Department's policies and programs
can result in duplication of effort, delayed action, and resource
misallocation.
Our work on Afghanistan is ongoing. We continue to closely
coordinate with other relevant OIGs, and we have several forthcoming
projects, including a review of the evacuation and suspension of
operations at Embassy Kabul.
other oversight efforts
For our oversight work outside of the specific contexts of Ukraine
and Afghanistan, I would like to highlight some recent findings and
recommendations that relate to three management challenges that we have
consistently identified for the Department: safety and security,
stewardship, and staffing.
Safety and Security
Safeguarding people, facilities, property, and information is a
continual challenge for the Department. Physical security and safety
deficiencies at diplomatic facilities is one aspect of this challenge.
To illustrate, a recent inspection of Embassy Kuwait City, Kuwait,
found that the Embassy did not comply with all Department standards for
two buildings constructed on the chancery compound.\6\ The Embassy
built the permanent structures without requesting the required
technical review to ensure the projects conformed to Department
building codes. This is problematic because construction and subsequent
use of structures without ensuring building code requirements are met
poses significant life safety risks to employees.
Residential safety is another area that our inspection work
frequently assesses. In an inspection of Embassy La Paz, Bolivia, we
found the Embassy did not assess 17 of its 46 residences for seismic
risk to mitigate deficiencies. Failure to conduct seismic evaluations
and mitigate deficiencies risks the life safety of residential
occupants and could result in fatalities or serious injuries in an
earthquake.\7\
Another health and safety risk our work often highlights relates to
emergency action planning. For example, an audit of emergency action
plans at domestic facilities showed that plans were not always
certified in a timely manner and did not always contain complete,
accurate, and executable information.\8\ Our report noted that when the
Department addressed the emergency action plan deficiencies, domestic
Department personnel would be better prepared to execute emergency
procedures that are meant to prevent injury, loss of life, and property
damage.
In addition to the security of people and property, we often focus
on information security, and our oversight of the Department's IT
security program continues to identify numerous control weaknesses. The
FY 2022 Federal Information Security Modernization Act (FISMA) audit
concluded again that the Department had not fully developed and
implemented an effective organization-wide information security
program.\9\ Specifically, we reported that the Department was operating
below an effective level in four of five FISMA cybersecurity functions,
making it vulnerable to IT-focused attacks and threats to its critical
mission-related functions.
Stewardship
Efficiently and effectively managing its significant resources is
another longstanding challenge for the Department. OIG's work
demonstrates that the Department could enhance its stewardship of
taxpayer resources by improving its ability to identify and address
weaknesses in financial and property management and contract and grant
oversight. Additionally, identifying and addressing weaknesses in its
internal controls is an element of the Department's stewardship
challenge.
For example, a January inspection revealed that the Bureau of
International Narcotics and Law Enforcement Affairs (INL) had weak and
missing internal controls related to monitoring, evaluating, and
closeout of foreign assistance projects. OIG also found multiple
internal control weaknesses in the management of its bureau resources
and information management operations. Regarding the latter, OIG found
deficiencies and waste in information technology contract management,
and a lack of oversight for both domestic and overseas systems. Most of
OIG's 28 recommendations were related to weak internal controls, which
collectively hindered INL's ability to effectively plan, manage, and
evaluate the results of its projects, programs, and operations.\10\
Turning to contracts, during one project we found that the
Department did not administer its domestic guard services contract,
valued at approximately $362 million, in accordance with applicable
Federal and Department standards.\11\ For example, we found that
Contracting Officer's Representatives files were incomplete. We also
found that the Department had not obtained sufficient documentation to
support invoice approval. During the project, we identified numerous
issues with the invoices, including mathematical errors, incorrect
number of hours worked, and lack of overtime approval. As a result of
these deficiencies, we questioned the entire amount of the contract
(approximately $362 million).
We also issued a report related to how the Department promotes
competition for overseas construction projects.\12\ During that
project, we found that the Department took steps to promote competition
as required by law but had not developed a formal process to guide its
efforts. Moreover, the Department did not fully comply with acquisition
planning and market research requirements. Until deficiencies are
addressed, the Department will continue to miss opportunities for
increased competition that could enhance the Department's ability to
obtain quality construction services at reasonable prices.
Likewise, proper oversight and management of grants and cooperative
agreements continues to be a challenge for the Department. In an audit
of Federal assistance to for-profit organizations, we found that Grants
Officers and Grants Officer Representatives did not always manage and
monitor selected awards in accordance with requirements.\13\
Specifically, the grant officials did not consistently perform and
document performance and financial monitoring, complete updates to risk
assessments and monitoring plans, or conduct annual reviews when
applicable. Until the deficiencies are addressed, the Department will
not have reasonable assurance that awards are being administered in
accordance with requirements.
Staffing
The Department expends substantial resources on recruiting,
training, and retaining a diverse, talented workforce capable of
carrying out the Department's foreign policy mission and priorities.
However, OIG's work finds that staffing gaps, frequent turnover, poor
oversight, and inexperienced and undertrained staff are frequent
challenges for the Department.
In one report from the past year, OIG examined the process for
selecting public members of Foreign Service Selection Boards (FSSBs),
the entities responsible for selecting and promoting all Foreign
Service Officers. OIG found that the Bureau of Global Talent Management
did not demonstrate that it considered all required criteria when
recruiting and selecting FSSB public members. Less than half of the
public members who served from 2019 through 2021 were fully qualified
under these criteria. OIG also found that the public member recruitment
and selection process lacked adequate management oversight and internal
controls to minimize the risk of favoritism and to ensure that the best
qualified applicants were recruited and chosen. For example, family
members of Department employees received public member contracts to
serve on FSSBs every year from 2014 to 2021.\14\
In another example, an OIG inspection of Embassy Khartoum, Sudan,
illustrated the unique staffing challenges presented in a difficult or
critical operating environment. We found the diplomatic post had
persistent difficulty in attracting bidders to fill Foreign Service
positions. Despite incentives and allowances, the Embassy struggled to
attract mid-level officers, which, in turn led to long-term staffing
gaps in the Embassy's Political-Economic, Public Diplomacy, and
Consular Sections. For instance, the Public Diplomacy Section sustained
a staffing gap of 20 months or more for two of its three U.S. direct-
hire positions. Similarly, the Political-Economic and Consular Sections
sustained long-term gaps of more than 1 year.\15\
resources
We appreciate the subcommittee's ongoing support of our work and
are grateful for the $13.5 billion in supplemental funding for Ukraine
response oversight. The subcommittee's timely foresight in recognizing
the draw on OIG resources created by the invasion of Ukraine allowed us
to strategically shift our focus and resources to this critical and
dynamic event.
Nonetheless, OIG's baseline budget has remained relatively flat in
recent years, which has affected our operations in significant ways. We
have not been able to keep pace with inflation due to our static budget
and we have had to scale back staffing--instituting a hiring freeze for
the first 9 months of FY 2022. More fundamentally, it has jeopardized
our ability to sustain high-quality oversight work across the wide
spectrum of programs and activities at the Department and USAGM. In
addition to meeting our mandated reporting responsibilities, the
effectiveness of our oversight relies on our ability to take on
important discretionary work, including work on big initiatives of
congressional interest, such as Afghanistan. Our funding challenges
have made this difficult.
I would like to quantify the magnitude of this challenge. As
mentioned earlier, we oversee approximately $81 billion in agency
resources, funds that span more than 35 appropriation accounts. While
those accounts have grown over time, our budget has remained relatively
constant, resulting in our budget being less than a quarter of 1
percent of what is appropriated to the accounts we oversee. In absolute
terms, OIG would have needed an additional $94 million across FYs 2020-
2023 to keep pace with increases in the scale and scope of the programs
we oversee.
Our FY 2024 budget request was designed to reset the relationship
between our budget and the dollars we oversee, while also addressing
past shortfalls. Our FY 2023 baseline appropriation was $93 million,
and we are pursuing a roughly 15 percent increase for FY 2024 to $106.8
million. This level of funding will help us address key priorities
related to Department and USAGM management challenges, maintain our
core operations, and adapt to future workforce needs.
Beyond securing adequate funding, a related resource priority for
State OIG is securing quality oversight professionals to meet
increasing oversight demands. I am fortunate to lead an organization
with outstanding staff members who have pivoted quickly to focus on
Ukraine-related work. However, we must not let the Ukraine response
oversight detract from our broader oversight mission spanning the
globe. We will need to ramp up staffing to effectuate the broad set of
extensive oversight plans highlighted in this testimony.
The largest challenge we face in this regard is the current
selection and appointment requirements, which add months to the
onboarding process for new hires. In the context of our Ukraine-related
work, this not only delays our ability to meet staffing needs, but also
makes it difficult to effectively utilize our supplemental funding. To
address this challenge and meet the long-term and critical hiring needs
associated with Ukraine-related oversight, we would like to secure
selection and appointment flexibilities consistent with direct hire
authority. We are also seeking legislative changes that would give us
the same flexible hiring authorities that exist in the context of
overseas contingency operations.
conclusion
I am incredibly proud of the work of my OIG colleagues and the
value we provide to the Department, USAGM, Congress, and taxpayers. We
are a talented and committed team of professionals dedicated to helping
the Department and USAGM successfully accomplish their respective
missions through robust oversight and well-designed, practical
recommendations. I want to thank my team for their resilience,
ingenuity, integrity, and leadership.
I also want to conclude by thanking Chairman Coons, Ranking Member
Graham, and distinguished Members of the subcommittee for the many ways
in which you support OIG's mission. I take my statutory requirement to
keep Congress fully and currently informed seriously, and I appreciate
your enduring interest in our work.
---------------------------------------------------------------------------
\1\ Per Black's Law Dictionary 772 (6th ed. 1990), an information
is an accusation exhibited against a person for some criminal offense,
without an indictment.
\2\ OIG, Information Brief: Oversight Observations to Inform the
Department of State Ukraine Response (OIG-23-01, December 2022).
\3\ In 2009, Congress established a visa program to resettle
Afghans who had worked on behalf of the United States in Afghanistan
and experienced an ongoing and serious threat as a result.
\4\ OIG, Information Report: Afghan Special Immigrant Visa Program
Metrics (AUD-MERO-22-38, September 2022).
\5\ OIG, Compliance Follow-Up Review of the Afghan Special
Immigrant Visa Program (AUD-MERO-23-01, October 2022).
\6\ OIG, Inspection of Embassy Kuwait City, Kuwait (ISP-I-23-07,
November 2022).
\7\ OIG, Inspection of Embassy La Paz, Bolivia (ISP-I-23-03,
January 2023).
\8\ OIG, Audit of Department of State Emergency Action Plans at
Selected Domestic Facilities (AUD-SI-22-36, September 2022).
\9\ OIG, Audit of the Department of State FY 2022 Information
Program (AUD-IT-22-43, September 2022).
\10\ OIG, Inspection of the Bureau of International Narcotics and
Law Enforcement Affairs (ISP-I-23-08, January 2023).
\11\ OIG, Audit of the Bureau of Diplomatic Security's Oversight of
Contractor Performance and Invoice Processing for the Domestic Guard
Services Contract (AUD-SI-22-37, September 2022).
\12\ OIG, Audit of Department of State Efforts To Promote
Competition for Overseas Construction Projects (AUD-CGI-22-34, August
2022).
\13\ OIG, Audit of the Department of State Management and
Monitoring of Federal Assistance Awards to For-Profit Organizations
(AUD-CGI-22-26, May 2022).
\14\ OIG, Review of the Recruitment and Selection Process for
Public Members of Foreign Service Selection Boards (ESP-22-02, May
2022).
\15\ OIG, Inspection of Embassy Khartoum, Sudan (ISP-I-23-13, March
2023).
Senator Coons. Thank you, Mr. Secretary, for that brief,
but a broad review of the challenges we face, and the
leadership that you have shown at the helm of the State
Department.
Let me open with a question, if I could, about the
workforce. I have had the opportunity to visit State Department
employees around the world in lots of difficult and dangerous
places; and like I believe all my colleagues, I am uniformly
impressed with their skills and their determination.
If we are going to achieve our national security objective,
it is critical to ensure our diplomatic corps is putting the
right people with the right tools, and the right resources, and
training in the right places to carry out their work. We worked
together, Senator Graham and I, to ensure that last year's bill
delivered on that goal, but there is more to be done.
What are the most critical workforce and other investments
needed to strengthen the Department to meet the challenges
confronting us today, and to have the flexibility to meet
emerging challenges in the year ahead?
Secretary Blinken. Very much appreciate that question, Mr.
Chairman. And really, it does come down to us, to people, to
resources, and in some cases to some authorities, what you will
see in the budget is a proposed hiring increase for another 500
new employees to fill some of the staffing gaps that we have,
and that I can go into more detail on.
We need more people to address some of these emerging
priorities and emergencies. That include, for example, a couple
of hundred new consular positions, I know you are seized with
some of the challenges that Consular Affairs has experienced
over the last few years, because of COVID, we have been
building back in a very significant way, but we need more work
there, and we need more resources there. So the budget proposes
that.
We need an additional number of civil and foreign service
employees to scale up the Indo-Pacific strategy, and to out-
compete China, to strengthen our outreach to fully staff, for
example, new missions in the Pacific Islands, something else
that we can talk about.
We want to make sure that we are building on something that
has been a terrific innovation that has been supported by this
committee, and that is having additional positions so that we
can increase our float, which enables us to pull people out of
their day in day out, and allow them to have career-long
training, so that they can keep their skill set fresh. In fact,
get new skills as they go along; for example, by coming here to
spend time, by going to an academic institution, et cetera.
We are requesting, in addition, new management hires, this
is critical because where the rubber meets the road in the
Department, as in so many other institutions, is particularly
our mid-level management. And we have terrific management
people in the Department, but what you know, and what you will
see, is the people who don't actually come up through the
management silo in the Department are, nonetheless, called upon
at different stages in their career, to exert management
skills. We need more there.
We have money there to make sure that we are protecting our
missions, and our diplomats, and I commend that to you. We have
to keep pace with the increased security threats, and costs,
the growing overseas presence, as I said, in the Pacific
Islands, we hope to reopen the mission in Libya, something we
want to work with you on, that is going to require some funding
as well.
We have significant funds as well to make sure that we are
up to speed on cybersecurity. We have all been challenged
across government by this, and we have to make sure that we
have the funding to do that. There are a number of authorities
as well, Mr. Chairman, that we can get into, and I am also
happy to share with you, that would be very helpful, it would
be very useful for us to have a new funding account for the
Enduring Welcome operation, to consolidate up to about $2.5
billion in existing funding for relocating our Afghan partners.
There is some personal services, Contractor Authority, we
need to hire more domestic personnel services contractors, we
can get to that, some Special Immigrant Visa adjustments,
again, to make sure that we are making good on our commitments
to our Afghan allies.
And then, I would just cite one last thing, there is more
to be said, but you touched on this. I think it is very
important for us to be able to pay our multilateral
commitments. And this is not a gift to these institutions, it
is not saying that these institutions are perfect, or don't
need a lot of work, it is saying that when we are not at the
table, then usually someone else is, and probably not in a way
that advances our interests and values.
And particularly in institutions that are actually having a
real impact on--you know, in windowless rooms, that people
don't see, in shaping a lot of rules, and a lot of norms, and a
lot of standards. For example, the way technology is being
used, we need to be there. And part of being there sometimes is
paying our dues.
The other thing that happens in these institutions, we are
the largest, actually, contributor to the U.N. system, and yet,
when we are in arrears, our competitors and adversaries point
to that and say: You know, the United States isn't serious
about it. So I hope we can do the best possible on that.
I very much believe we should be back in UNESCO. Again, not
as a gift to UNESCO, but because things that are happening at
UNESCO actually matter, and if we are not there, we are not
shaping it. They are working on rules, norms, and standards for
artificial intelligence, we want to be there. They are doing
the same thing on education curricula around the world.
China right now, is the single-largest contributor to
UNESCO. That carries a lot of weight. We are not even at the
table. It is important that we get back there. Thank you.
Senator Coons. Thank you, Mr. Secretary; both for that
answer and for your leadership across those different issues.
You mentioned at the conclusion of your introductory statement,
Operation Enduring Welcome, I would just be interested in a
brief update on your efforts to review and identify any lessons
learned on Afghanistan, so far.
Secretary Blinken. Thank you very much. Yes. One of the
things that was very important to me was that we conduct an
after-action review of the State Department's role and
execution of the withdrawal from Afghanistan. And we initiated
that review, we brought in very experienced people who had--
including one of our most senior retired diplomats to conduct
it.
And they conducted many, many interviews, reviewed many,
many documents, and produced a, I think, important report that
looks at what we did, what we did right, what we did wrong, and
could do better. And other agencies, as you know, have been
doing the same thing. We have not been spending time putting
all of this together to make sure that we look at the--some of
the common lessons learned, especially where there are
overlaps. And I am committed and determined to make that
information available to Congress. And we will do that.
We will do that by mid-April, so I can tell you today, you
will have the after-action review, we will share the findings,
and find the appropriate mechanism to do that within the next
three weeks.
Senator Coons. Great. Thank you, Mr. Secretary. In your
opening, you referenced your commitment to including consulting
with Congress, and including us in the foreign policy making
process and this is a good example of that work.
I have long questions I look forward to asking about the
Development Finance Corporation, the Global Fragility Act. But
I will just ask one, and then turn to my Ranking Member.
We are in the middle of a global food crisis, according to
the World Food Programme: pre-pandemic, there were 135 million
people in more than 50 countries who were facing hunger. That
has gone up to 345 million people across more than 80 countries
today. It is fueled by conflict, climate change, COVID-19, and
as the war in Ukraine grinds on, its shocks, in terms of prices
of food and fertilizer, are driving millions to the edge of
starvation and increasing instability.
What is the Department doing to increase contributions from
other donors to help tack this challenge? And what should the
international community be doing differently in order to
improve the resiliency of communities facing food insecurity
for the long term?
Secretary Blinken. Thank you, Mr. Chairman. And I will say,
I very much appreciate the leadership of this committee;
particularly you, Senator Graham, on this issue; and others. I
say quickly two things: First of all, we have to tackle two
aspects of this problem. We have emergency situations that
demand an emergency response, where people need food now.
And back in May, we gathered together countries from around
the world at the UN Security Council, to focus them, not just
us, on the specific things that they can do, and we can do, to
make sure, to the best of our ability, that food is getting to
people when they need it.
And of course, as you know very well, we have had an almost
perfect storm that has built up between climate change, between
COVID, and of course conflict, and now, exacerbated
dramatically by Russia's aggression against Ukraine. Ukraine,
bread basket to the world, that grain was taken off the market
by the Russian aggression. I am very glad that through the work
of the United Nations and Turkey, we were able to get the Black
Sea Corridor going, but that is a fragile thing. It has made a
difference, but it is fragile.
So there is the emergency assistance. We have significantly
increased our own contributions, as you know, we provided about
$13.5 billion going back to the Russian aggression over the
course of 2022. We have gotten other countries to step up and
increase their contributions, World Food Programme, Food and
Agricultural Organization, the UN Fund. That is one critical
piece of it.
But again, as I know you know very well, the other piece
that is critical, and what I hear, and I know you hear from our
colleagues around the world, especially in Africa, is that, as
focused as they are in emergency assistance, what they really
want, is investment in their productive capacity, and this is
absolutely critical to making sure that they have sustainable
agricultural production, and that they ultimately can feed
their own people, and actually feed others. There is tremendous
potential in Africa.
Let me just cite one thing that we are doing. And we have
in the budget, a significant fund for this. To me, one of the
most exciting things, building on and adding to the Feed the
Future Program, that USAID, and the State Department run, is
something that we have, I think you know, one of the leading
agronomists in the world at the State Department, Dr. Cary
Fowler. One of the things that we have learned in recent years
is that the two most determinative things to having sustainable
food production capacity, comes down to two things: soil and
seeds.
If the soil quality is bad, you can throw as much
fertilizer on it as you want, it is not going to work. We now
have the ability to map the quality of soil, pretty much
anywhere, including throughout Africa, determine where it is
good, where it is bad, what needs to be done to improve it. And
we have a program there, the seeds, if they are not resilient
to drought, to climate, to other things, again, it doesn't
matter, we have the capacity to do that, to provide resiliency
through nutritious crops. So I think what you will see in the
budget is the beginnings of an important program to provide for
that.
Senator Coons. Thank you, Mr. Secretary. That is a topic of
interest to both of us.
Let me now turn to my Ranking Member, Senator Graham.
Senator Graham. Yes. I really want to work with you. I
think what you have said is absolutely spot on. I talked to
Larry Ellison, from Oracle, and he has created a new school, I
think at Oxford or Cambridge, about food security. So, there
are a lot of people interested in making sure people can feed
themselves, and you know, it is soil, seed, and water, you have
got to have water.
Secretary Blinken. Yes.
Senator Graham. I look forward to working with you on that.
Are you familiar with the International Criminal Court (ICC)
arrest warrant issued against Russian President Vladimir Putin?
Secretary Blinken. Yes.
Senator Graham. Do you think that is sound?
Secretary Blinken. I think we have all seen, Senator, the
atrocities and war crimes committed in Ukraine.
Senator Graham. Yes.
Secretary Blinken. And we all--we believe strongly as we
have said at the outset----
Senator Graham. I think the President said he thought that
was a sound approach.
Secretary Blinken. There needs to be accountability.
Senator Graham. Yes.
Secretary Blinken. And the ICC is an----
Senator Graham. What do they want to arrest him for?
Secretary Blinken. The focus of the--as I understand it--
the focus is on the, in effect, abduction of children----
Senator Graham. Right.
Secretary Blinken [continuing]. From Ukraine, taking them
to Russia, giving them to Russian----
Senator Graham. Yes. So let us just stop for a second.
There is an arrest warrant for Putin by the ICC, for kidnapping
children in Ukraine, and taking them to Russia.
Secretary Blinken. That is right.
Senator Graham. Is that pretty much it, right?
Secretary Blinken. Yes.
Senator Graham. If Putin came to the United States, for
whatever reason, would we turn him over to the ICC?
Secretary Blinken. Well, I can't get ahead of that,
because, as I said, I would have to look at the laws, and
those, as you know, we are not actually a party to the ICC, so
I don't want to engage in that hypothetical, but----
Senator Graham. I would encourage you, that if he came
here, we should turn him over.
Secretary Blinken. Now, I don't think he has any plans to
travel here soon.
Senator Graham. Yes. Well, would you encourage our European
allies to turn him over?
Secretary Blinken. I think that anyone who is a party to
the court, and has obligations, should fulfill their
obligations.
Senator Graham. Okay. Are you aware that the Congress, 100
to nothing, which is pretty rare around here, supported the
idea of declaring Russia a state sponsor of terrorism under
U.S. law?
Secretary Blinken. Yes.
Senator Graham. I don't know how much more we can do to
help you in that regard. Do you intend----
Secretary Blinken. Could I just--can I just say on that?
Senator Graham. Yes. Yes.
Secretary Blinken. I appreciate it. Well, we have as you
know, multiple designations that focus on Russia's war crimes,
atrocities, et cetera. The SST brings with it, also, I think,
potentially, some unintended consequences----
Senator Graham. So here is my question.
Secretary Blinken. Yes.
Senator Graham. Are you going to designate Russia a state
sponsor of terrorism under U.S. law? Do you intend to do that?
Secretary Blinken. What we have been doing, Senator, as you
know, I think, is working with you to look at a new designation
that would go to a----
Senator Graham. Well, but we sort of failed in that
endeavor, and since we started, he has been--an arrest warrant
has been issued-- what more do you have to do to be a state
sponsor of terrorism?
On China, the meeting between Xi and Putin: would you
consider that a marriage of convenience, or a strategic
alliance?
Secretary Blinken. Perhaps a combination of both. I think
you have got a--you do have a partnership. Remember, as you
know, right before the Russian aggression, they met.
Senator Graham. Yes.
Secretary Blinken. They talked about a partnership with no
limits.
Senator Graham. So let us just break that down a bit here,
``with no limits'', the world is trying to put a cap on Russian
oil.
Secretary Blinken. Mm-hmm.
Senator Graham. The West; is that correct?
Secretary Blinken. That is correct.
Senator Graham. I think China just agreed to buy oil, as
much as Russia can supply. They are undercutting our efforts
there: do you agree with that?
Secretary Blinken. They are, although, we see it as two
things, Senator. With the oil cap, we try to accomplish two
goals. One, reduce the revenues that Russia is getting from
selling energy.
Senator Graham. Yes.
Secretary Blinken. But at the same time keep enough energy
on the market so that we don't have a crisis.
Senator Graham. Sure.
Secretary Blinken. I think we have largely accomplished
that goal. Russian oil revenues are down as a result of the----
Senator Graham. But China has made a pledge to buy all of
the Russian oil they can buy, right, not at the cap price?
Secretary Blinken. Well, we will see at what price they
actually buy at.
Senator Graham. The bottom line is China is working against
us, when it comes to Russia: do you agree?
Secretary Blinken. I think their diplomatic support, their
political support, and to some extent material support for
Russia, certainly goes against our interest in bringing this
war to an end, in a way that is just----
Senator Graham. You have publicly said that you had reason
to believe that China may be considering providing lethal aid
to Russia: is that correct?
Secretary Blinken. That is correct.
Senator Graham. If you provide lethal aid to a state
sponsor of terrorism, that would be considered material support
under U.S. law: is that correct?
Secretary Blinken. I believe that is correct.
Senator Graham. Okay. Don't you think it would be smart to
tell China, you provide lethal aid to a state sponsor of
terrorism, and they may be more deterred than if we just
remained silent about that?
Secretary Blinken. Senator, I have shared directly, with my
Chinese counterpart the serious problem that China providing
lethal material support to Russia for----
Senator Graham. Do you think it is working? Do you think
they will provide aid?
Secretary Blinken. As we speak today, we have not seen them
cross that line.
Senator Graham. So my point is, that we made a mistake, I
think, by not having pre-invasion sanctions. We should have
supplied more weapons to Ukraine before the invasion to deter
the war. We are at tipping point here. China is openly
embracing Russia, they are undercutting everything the West is
trying to do to isolate Russia. They are buying unlimited oil.
I think now is the time, Mr. Secretary, to label Russia
state sponsor of terrorism, because they are. Up the ante if
China wants to continue to help Russia. Would you at least
consider that as a deterrent possibility?
Secretary Blinken. We want to look at every reasonable
deterrent, but again, when it comes to the SST, and we should
talk about this further, I think there are better ways to get
at the same--at the same thing, that could have some of the----
Senator Graham. Whatever those ways are, let us--we are
over a year into this war. Let us do something. And I am just
going to tell you, as a friend. I like you. I will try to work
with you. I am not going to sit down on the sidelines any
longer, and see Russia not labeled for who they are. They are
terrorists. They are wreaking havoc all over Africa. We just
got back from a trip to Africa.
Through the Wagner Group, Russia committed immense war
crimes in Syria, this is just a modus operandi. They just bomb
the hell out of people, terrorize people, use rape as a weapon
of war. And it is now to stand up and say: You are a terrorist
state under U.S. law. And I think the sooner we do that, the
better.
Let us go to Mexico, real quick. And I will try to keep
within my time, go over a couple minutes. Are there places in
Mexico that the Government of Mexico does not have control?
Secretary Blinken. I think you see significant insecurity
in parts of----
Senator Graham. Well, my question is, if their own
Government----
Secretary Blinken [continuing]. I am sure that there are
individual places, communities, where the--break down.
Senator Graham. Yes. Are there drug cartels in control of
parts of Mexico, not the Government of Mexico?
Secretary Blinken. I think it is fair to say, yes.
Senator Graham. Okay. Do you agree with the following
statement: that fentanyl coming from Mexico is killing
Americans by the tens of thousands?
Secretary Blinken. It is. And it is also killing Mexicans
as well.
Senator Graham. Yes. Well, do you agree it is now time to
change our policy because it is not working? Or do you think it
is working?
Secretary Blinken. I think that, Senator, first of all, you
are exactly right about the insecurity in Mexico. As I said,
the Mexican people themselves are the number one victims of
that insecurity. The Mexican Government have supporters
working----
Senator Graham. Are more Mexicans are dying of fentanyl
poisoning than Americans?
Secretary Blinken. Currently, no. But it is growing
problem.
Senator Graham. So how many have died in Mexico from
fentanyl poisoning?
Secretary Blinken. I don't have the exact numbers, but I am
sure that is----
Senator Graham. Well, 70,000 died last year----
Secretary Blinken. That is correct.
Senator Graham [continuing]. Alone, in the United States.
Do you believe our policies toward drug cartels, and fentanyl
coming from Mexico are working?
Secretary Blinken. They need to do more. They need to be
more effective.
Senator Graham. Yes.
Secretary Blinken. Here is one way we can do that. One way
we can do that, is making sure that we have, for example, the
technology on our borders to detect and intercept the fentanyl.
96 percent of the fentanyl coming into the United States is
coming through legal ports of entry. We have the technology
that can catch a lot of that.
Senator Graham. Yes.
Secretary Blinken. We need to deploy it faster, that is
exactly what we----
Senator Graham. How about this idea. Rather than just
interdicting at the border, we go to the source and declare
Mexican drug cartels foreign terrorist organizations under U.S.
law.
Secretary Blinken. Mm-hmm.
Senator Graham. Would you consider that?
Secretary Blinken. Yes, we would certainly consider that.
Senator Graham. And that would help us with China, because
if you provide material support to a foreign terrorist
organization, you could be prosecuted in U.S. courts.
Secretary Blinken. They are also transnational criminal
organization, and that brings with it a number of sanctions----
Senator Graham. That is what they are today?
Secretary Blinken. Yes, and----
Senator Graham. I want to up----
Secretary Blinken [continuing]. It is not clear to me that
the--again, that we would get additional tools of authorities,
it is worth pointing out that----
Senator Graham. We would with China, Mr. Secretary,
Transnational Criminal Organizations cannot--material support
doesn't bring in U.S. courts. For Foreign Terrorist
Organizations (FTOs), material support for an FTO would capture
in U.S. courts if you are a China company.
Secretary Blinken. Mm-hmm.
Senator Graham. So please consider that. I would say our
policy is not working. I want to introduce into the record a
State Department travel advisory map that tells you where to go
and not to go in Mexico. The red is getting redder, Mr.
Secretary.
Mexican President Obrador is going to call Chinese
President Xi, great. I am not looking for a phone call from
Mexico. I am looking for action on their part. I am willing to
do a Plan Colombia-type effort with Mexico, but I am going to
put the Mexican Government on notice, and your Department, when
it comes to poisoning of America, we are going to take
different action because what we are doing is not working.
Secretary Blinken. Mm-hmm.
Senator Graham. This is not a confrontational statement, it
is a statement of fact. More Americans are being poisoned by
fentanyl from Mexico in a single year than we lost in the
entire Vietnam War. And the leading cause of death in America,
from 18 to 45 years old, is fentanyl poisoning.
Secretary Blinken. And Senator, I----
Senator Graham. Enough is enough.
Secretary Blinken. I absolutely share your priority and
focus on that.
Senator Graham. Thank you, Mr. Chairman. Thank you, Mr.
Secretary.
Senator Coons. Chair Murray.
OPENING STATEMENT OF SENATOR PATTY MURRAY
Senator Murray. Well, thank you very much, Chair Coons, and
Ranking Member Graham. I am really glad to join you as we kick
off this subcommittee hearing on President Biden's budget
request. We are really lucky in the Senate to have a Chair and
a Ranking Member on this committee who both really know their
stuff when it comes to foreign policy, and are so similarly
committed to finding common ground for the good of this
country.
These hearings provide a really important opportunity for
us to assess our country's needs as we write our funding bills
for the year ahead.
Vice Chair Collins, who is here today, and I, have made
very clear we want to return to regular order, a goal I know
that both you and the Ranking Member share, and many of our
colleagues do as well. We have a responsibility to work in a
timely way to write funding bills that will build a stronger
economy, make our communities safer, and ensure we stay ahead
of our global competitors.
I think we all know that getting this done through regular
order, for the first time in years, will be no walk in the
park, but it will be worth it. So I am really glad to have both
of you as partners in this effort, and I look forward to
working with everyone on this subcommittee to provide the
robust funding that these issues deserve.
Now, this hearing offers an important reminder that when it
comes to keeping our Nation safe, and competitive, and secure,
defense spending is important, but it is only one part of the
equation.
After all, our strength here at home and across the world
isn't just measured by the strength of our military, it is
measured by our diplomacy, our influence abroad, and our
strategic investments, which make the world, including our own
Nation, safer and more secure.
And that is why boosting investments in non-defense
discretionary spending is so critical, because we are weaker,
our families are more at risk, when we retreat from the world
stage, and folks back home get that. They see every day how our
world is more connected than ever, and how crises on the other
side of the world have ramifications for their daily lives:
like when supply chains are broken, and families can't get the
products they need; or when small businesses and our growers
are cut off from foreign markets that they rely on to make a
living; or when viruses spread undetected, leading to
outbreaks, and as we know, pandemics; or when the world becomes
more hostile to women as their rights are attacked, and less
free, as democracies are undermined; or when families become
refugees, and flee their homes due to persecution and violence.
The more we are engaged in the world now, the better we can
address and prevent these challenges before they reach our
door.
But if we fail to invest in the State Department and the
powerful diplomatic tools we have, if we don't keep our
embassies well-staffed, Mr. Secretary, as you mentioned, if we
don't invest in preventing conflict before it causes
catastrophe, and promoting stability with humanitarian aid and
development, if we don't stand up for democracy, and stand up
to autocrats, and if we don't invest in global solutions to
global challenges, like food security, and tackling the climate
crisis--in short, if we stand down on the world stage, our
adversaries and competitors will step up and fill that
leadership void.
We know China is already working to build relationships and
alliances across the world by building infrastructure far
beyond its borders. If we are going to stay competitive we have
to continue making smart investments that make our allies and
our partnerships stronger. And we know a global challenge, like
the climate crisis, cannot be solved through unilateral action,
it can only be solved through global cooperation, and that
requires leadership.
Chair Coons, I really appreciate your leadership in
focusing on how we must address the climate crisis on the world
stage, because we are constantly seeing new, alarming examples
of how the climate crisis poses an immense threat to global
security, and to our own national security: water scarcity,
food scarcity, extreme weather events, don't just create
humanitarian crises in a vacuum, they can destabilize entire
regions, threatening our own security.
And we have also seen how Russia has tried to use energy
dependence to strengthen its hand in its brutal war against
Ukraine, which is just one more reason it is so important that
we invest in global solutions to the climate crisis that allow
our allies be less reliant on our adversaries for energy.
At the same time we have to keep in mind that when we
strengthen our ties in Asia, when we support economic stability
in Latin America, when we build up public health capacity in
Africa, those investments pay dividends, including for all of
us right here at home. And that is true for families across the
country, and especially for my home State of Washington.
My State is a hub of global trade, especially with Asia,
and one of America's great gateways to the world. We welcome
diplomats, and have numerous consulates in our State. We
welcome refugees, and are one of the top five States when it
comes to hosting families that have fled the conflict in
Ukraine.
And not only do we welcome students, and workers, and
tourists, we engage with the world too, including the many
Fulbright scholars, and students, and Peace Corps members who
head out from Washington State to learn about other countries,
and cultures, and build relationships, and strengthen
communities. Our investments in these programs help create a
world that is safer and more open to Americans.
So Mr. Chairman, I will just end by noting the list of
issues in this subcommittee are really critical, for our
Nation, for our families, and they literally span the globe.
But the bottom line is pretty simple, we cannot be a player on
the world stage and keep our country safe and prosperous if we
put ourselves on the sidelines. And there is just too much at
stake in this moment to let that happen.
We have to continue the work of leading a global coalition
that holds Russia accountable for its cruel and unjust invasion
of Ukraine. We have to continue standing with our Ukrainian
allies, supporting refugees, and providing the support they
need, especially as we see China stepping in to grow its
influence, with Xi's visit to Moscow earlier this week.
We have got to continue to be steadfast in our investments
to counter these influences, and continue to lead by example.
So Mr. Secretary, I welcome you here today. I look forward
to working with you and the administration, and working with my
colleagues on this subcommittee on a bipartisan funding bill
for next year that provides robust investments for the State
Department, so we can strengthen our ties, support our allies,
and solidify our place as the leader of the free world.
So I have used my minutes.
Senator Coons. Thank you, Madam Chair.
Senator Murray. But Mr. Chairman just let me say, I am
following this subcommittee very closely. And look forward to
working with you on a bipartisan product for all of us to
support. Thank you.
Senator Coons. Thank you very much, Madam Chair. Madam Vice
Chair. I am so excited by the drive, the energy, the leadership
that you are delivering, and look forward to spending lots of
time together, on subcommittee hearings, on full committee
hearings, on markups, and getting a work product out. And thank
you for sharing with us the ways in which Washington, as I
suspect we may now hear is also true for Maine, are parts of
our Nation, that although thousands of miles apart, share a
common connection to the world, to global trade, and a
connection to our security.
Madam Vice Chair.
OPENING STATEMENT OF SENATOR SUSAN COLLINS
Senator Collins. Thank you very much, Mr. Chairman. I am
going to take the opposite approach of Chair Murray. I am going
to submit some comments for the record, and go straight to
questions.
Senator Collins. So as usual, we are complementing one
another.
Let me start with Ukraine, Mr. Secretary. There are those
who view our support of Ukraine, as an either-or proposition
for our national security. And they argue that either the
United States focuses on pushing back Russian aggression in
Ukraine, or the United States focuses on countering the rising
influence of China.
I don't agree with that assessment. I view the two
challenges as interconnected, and believe that Russia and China
are working in concert to reshape the international order to
our disadvantage.
Two questions for you. First, what message would it send to
China and Russia, were we to abandon Ukraine at this point? And
second, please articulate the case for why our involvement in
Ukraine is in America's national interest?
Secretary Blinken. Madam Vice Chair, thank you very much
for that question. First of all, I fully agree with you. And
let me put it this way, because it does go--in effect, the
second part of your question actually goes right to the first
part. Why is this in our interest? Why is it profoundly in the
interest of the United States, to do what we have been doing,
which is to continue to stand with Ukraine, as it defends
itself, against this Russian aggression, to continue to exert
pressure on Russia, to end the aggression, and to strengthen
our own alliance, defensive alliance, NATO, in case that
aggression spreads?
It is two reasons: fundamentally, first of all, I think
Americans do not like not like to see big nations bullying
smaller ones, that is something that sticks in our craw, and we
see the horrific abuses and atrocities that are being
committed, and that is something that, I think, Americans focus
on very intensely.
But fundamentally, the reason is this: If we allow the
Russian aggression in Ukraine to go forward with impunity, if
we allow the very basic rules of the road, for how countries
relate to one another, that were established after two world
wars, and that focus, among other things, on making sure that
countries respect the territorial integrity of other countries,
respect their independence, respect their sovereignty.
If we allow that to be violated with impunity by Russia in
Ukraine, we open a Pandora's box around the world, where would-
be aggressors everywhere look at this and say: If they can get
away with it, I can too. And that is a world of conflict, that
is a world of war, that is world that we have been in before,
and we have had to come in and do something about it. But it is
not a world that we want.
So the stakes in Ukraine go well beyond Ukraine. And to
your point, I think it has a profound impact in Asia, for
example. Everyone is watching to see how we and the world
respond to this aggression. And they will draw their lessons
from it. One of the reasons that there are so many partners
involved in this from Asia is precisely because, even though
this is happening half-a-world away, they see the stakes for
them.
One of the leading countries in our coalition that support
Ukraine is Japan, South Korea is playing an important role,
Australia is too, and they see the stakes. I think if China is
looking at this, and they are looking at it very carefully,
they will draw lessons for how the world comes together, or
doesn't, to stand up to this aggression.
Senator Collins. Thank you. And let me encourage you, and
the other members of the administration, including the
President, to make that case to the American people, much more
forcefully, so that we do not see this continuing troubling
decline in public support for our efforts in Ukraine. It goes
way beyond doing the right thing from a moral or a humanitarian
viewpoint. It is very much in our interest.
Let me follow up, to some extent, on Senator Graham's
questions on fentanyl.
Secretary Blinken. Mm-hmm.
Senator Collins. We have recently had a tragic case in
Maine, where a 14-year-old girl with no history of drug abuse,
died from taking a pill that was laced with fentanyl, so this
is a tragedy that affects each and every one of our States. The
International Narcotics Control and Law Enforcement account,
works to reduce the production and trafficking of fentanyl, and
other drugs, through its drug supply reduction program.
The President's budget proposes $20 million for this
program, which is only a $3 million increase above this year's
level, despite the flood of fentanyl, the precursors of which
come from China, go to Mexico, and then into this country to
poison our people.
So this disappoints me, and I ask you: do you think you are
requesting sufficient funding? If you do, what other measures
are you taking to specifically address the threat of fentanyl
flowing into our country?
Secretary Blinken. Thank you very much for that question,
because I absolutely share the priority that you, Senator
Graham, I think everyone on this committee, is putting on this
problem.
As Senator rightly said, the number one killer of
Americans, 18 to 49, is fentanyl, synthetic opioids. And so
this is, it needs to be, a national priority. And I think we--
the way that we are approaching this is really a whole-of-
spectrum approach, by which I mean, that obviously we are doing
work at home to try to reduce demand, protect our own people,
get them the treatment, and antidotes they need, but that is
not the answer, it is part of it, but it is not the answer.
We talked a minute ago about border security and
technology, where we can do a lot more to effectively intercept
things coming into the country. But that is not enough. We have
to be, and we are, working to disrupt the transnational
criminal organizations that are engaged in moving this--making
this stuff, and moving this stuff, and we are.
We need to be working with, as we are, with Mexico to take
down the labs, to take down the enterprises. And we need, to
your point, to be more effective in preventing the diversion of
illicit precursors into the illicit fabrication of synthetic
opioids, like fentanyl.
So we have done a number of things to intensely focus on
this with Mexico. We actually are working in very close
collaboration. They have now, you know, over the last year,
arrested dozens of first- and second-tier transnational
criminal organization leads. They have seized record amounts of
fentanyl, but it is a huge sea. But that is going up. They
disrupted production facilities with our assistance.
We have our financial intelligence unit working with theirs
to disrupt the financing of these networks, and we have now, as
a result of work that I did with my colleagues, a Joint
Synthetic Drug Action Plan with Mexico that expands cooperation
with them, from law enforcement to the regulatory agencies in
Mexico, to the trade and health organizations that are really
important.
Second, more broadly, for the first time, I just came, a
couple of months ago, from the G20 Foreign Ministers Meeting,
in preparation for the leaders. For the first time the United
States got this on the full agenda of the G20, so these are the
most important economies in the world that have a real role and
stake in different ways in this, and we will be establishing a
working group in the G20 to work on this.
Third, from the perspective of the State Department as
well, one of the things that we are working on is building a
coalition on a voluntary basis at first, to tackle another
aspect of this problem, and that is the illicit diversion of
legal precursors. This is a big problem, as you know.
There are things that we can do much more effectively:
sharing information, labeling, putting in place know your
customer protocols, around the world including with China, to
make sure that companies that are, again, involved in the
production of perfectly illicit precursors, do not have them
diverted into the fabrication of synthetic opioids. So all of
that we are coming together.
Now, as to the resources, Madam Vice Chair, very happy to
work with you, very closely, to make sure that we are properly
resourced for this. I could not agree with you more. This is a
number one priority.
Senator Collins. Thank you.
Senator Coons. Thank you, Madam Vice Chair. My strong
suspicion is that an amendment to increase the funding would
get unanimous support.
Senator Shaheen.
Senator Shaheen. Yes. I would be happy to cosponsor it.
Mr. Secretary, thank you for being here. And I want to
begin by thanking the State Department and the President for
your request in the budget to support those people who have
been affected by anomalous health incidents. As we know, that
continues to be an issue for people affected, and I appreciate
the continued work of the State Department.
I was also pleased to see the President's budget include
20,000 additional special immigrant visas for our Afghan
allies, you mentioned that as part of your remarks. And I
understand the Department is undertaking an effort to review
our withdrawal from Afghanistan last year. I hope that that is
a review that also considers the implication on Afghan women
and girls----
Secretary Blinken. Yes.
Senator Shaheen[continuing]. Who have been, again, once
again, had their rights stolen by the Taliban regime after our
departure, who were not, as we have heard, have real concerns
about what their future holds.
Secretary Blinken. Mm-hmm.
Senator Shaheen. So can you give us an update on this
effort, and is it going to be shared with the members of
Congress?
Secretary Blinken. So for the after-action review, and I
think I mentioned at the very start of this, before you were
here, yes. In short, yes, we have been working on that review,
this was a commitment that I made very early on after the
withdrawal to make sure that we learned the lessons from our
part in that, what we got right, what we got wrong, what we
need to learn from it. We brought in very experienced retired
senior Foreign Service Officers to run that process. We did
that.
Other agencies have done similar efforts. We have been
working in recent months to bring all of that together, to
understand what the common lessons learned should be. A bottom
line is this, we will be making those reports available,
sharing that information with Congress within the next three
weeks.
Senator Shaheen. You wouldn't like to preview what it is
going to say, would you?
Secretary Blinken. Well, I don't want to get ahead of it,
except to say that we have been looking at, just from the
perspective of the State Department, I obviously can't speak to
other agencies, about how we can be more effectively organized
to deal with complex emergencies in advance. And we have
definitely learned lessons from this experience that I think
can make us more effective going forward, but we will share in
detail what we have learned.
Senator Shaheen. Well, thank you. I will look forward to
seeing that. And one of the places where I think that kind of a
more coordinated strategy would be really important, is in the
Black Sea region.
Secretary Blinken. Mm-hmm.
Senator Shaheen. And the invasion of Ukraine really pointed
out, with the closing of shipping lanes, and the impact on food
security globally, just how important that region is. And as I
am sure you are aware, we had language in the last Omnibus and
Defense Authorization Bill, to ask the administration to
develop a comprehensive approach to the Black Sea. I think it
should include, not just national security issues, which we saw
with the downing of our drone, how important those are in the
region, but also economic and democracy support for what is
happening in the region.
So can you talk about where the administration is in
developing that kind of a strategy, when we can expect it, and
how it is helping to--helping us think about our approach to
the region?
Secretary Blinken. Senator, I very much appreciate your
focus and leadership on this. And bottom line up front, we will
produce that strategy. I think there is actually a deadline in
the----
Senator Shaheen. Right.
Secretary Blinken [continuing]. Legislation of June. And we
will produce it by then. And I couldn't agree with you more. It
requires, and we are focused on a much more comprehensive
approach to the Black Sea region. As you know, larger than
California, it has got six countries on its coast. Three of
them are our NATO allies, others like Ukraine are obviously are
important friends to the United States.
And to your point, the strategy will focus, not just on the
security aspects, but on promoting political engagement, on
promoting economic cooperation, including strengthened energy
security, which is critical to all of these countries in a
variety of ways. As well as building democratic resilience
because they are in a challenged neighborhood.
And one of things that we have done, and the reason we want
to make sure that we get this right is, we have gotten inputs
from some of these countries, we want to make sure that they
are factored into our strategy. For example, our Romanian
colleagues have done, as you know, very well, have done a lot
of thinking, and a brought a lot of focus to this. They shared
with us their own views and plans, and that is something that
we are factoring in. The bottom line though is, we will have it
to you by June.
Senator Shaheen. Well, I can tell you, I was in the region
in both Romania and Georgia, the end of February, and there was
a great deal of interest in the fact that we were beginning to
think about that region more comprehensively, and really
looking also at the economic potential that is there. In
Georgia they are looking at what they are calling the ``Middle
Corridor'' that would provide an opportunity to get around
Russia in terms of energy.
And I think as we look at countries like Georgia, where I
am disappointed by some backsliding in the government, but
where the people are very clearly committed to looking towards
Europe, to looking at NATO, we need to think about how we can
better support them. Our ambassador, their Ambassador Degnan,
has done an excellent job.
Secretary Blinken. Thank you.
Senator Shaheen. As I was saying to the Chairman, thinking
about where we put in Development Finance Corporation Office in
that region, Georgia, I think has some real potential for that.
It is something that could be very important.
Let me just end by going back to the fentanyl question,
because it has been such a huge issue for us in New Hampshire,
and for everybody, I think, on this committee. We passed,
Senator Portman and I worked on a legislation called the
FENTANYL Results Act, to try and give the State Department more
resources to work with other countries who might want to help
us address fentanyl coming into the United States.
Are there resources you need to do that legislation, and if
so, what do you need? Let us know what you need so that we
can----
Secretary Blinken. Thank you.
Senator Shaheen [continuing]. So that we can ensure that
that happens.
Secretary Blinken. I really welcome working with you on
that, because, indeed, one of the things that we are doing, is
working to build a coalition of countries that can work
together more effectively to deal with this challenge
internationally, particularly again, when it comes to the
diversion of licit precursors into illicit production of
fentanyl.
We started to do that, as I mentioned, at the G20, but
there may be other ways that will be effective in building that
out. That may require some additional resources. It will be
great to work with you on that. Thank you.
Senator Shaheen. Thank you. Thank you, Mr. Chairman.
Senator Coons. Thank you, Senator Shaheen.
Senator Rubio.
Senator Rubio. Thank you, Mr. Chairman. Thank you for
coming in, we appreciate it.
It strikes me--I know you like history. Is that one of
your--isn't that one of your majors? Did you study that?
Secretary Blinken. Yes.
Senator Rubio. Yes. And I think history is always
instructive. One of the things that is most interesting about
history is if you look back at these pivot moments in human
history, the people that lived through them didn't realize that
is what was happening. When you are living a hinge moment in
history, you know, you are busy with everyday life, and
everything else that is going on, and sometimes you don't
entirely perceive it.
So I am pleased, as I read the beginning of your statement
here, and I heard it before I came in on the broadcast, where
we meet at an inflection point, the post-Cold War world is
over, and there is an intense competition underway to determine
what comes next.
So it is an acknowledgment that this is not what it was
like 10 years ago, 5 years ago.
Secretary Blinken. Yes.
Senator Rubio. Very different. And that is important. I
would argue that we are beyond simply competitive, and I don't
understand why we talk about strategic competition, and I don't
say this with any joy in my heart, but simply because it is
sort of par for the course in human history. I think we are
entering, perhaps the beginning of a period of conflict, which
doesn't necessarily always mean military conflict, but conflict
nonetheless. We have an all-out war in Europe.
Secretary Blinken. Mm-hmm.
Senator Rubio. That is most clearly a conflict, and it has
been a globalized one. People call it a ``Proxy War'', but it
has been globalized.
We saw that very clearly yesterday with Xi's visit to
Moscow, but beyond that, sort of the way the world is aligned
in different ways. We have seen the rise of, by necessity,
militarization. Germany, Japan, nothing that we are against,
frankly, because given the necessities of the world, but this
post-Cold War--post-World War II Order in which both countries
decided that they were going to be less martial, less military.
Necessity has changed it for both of them.
Secretary Blinken. Yes.
Senator Rubio. A positive development for our alliance, but
nonetheless a reality. We have these nine Eastern European
countries that are even more hawkish than the rest of Europe,
geography puts them right at the edge of Russia's aggression,
when they can see very clearly what is happening.
We have the very clear outlines of this emerging conflict:
the U.S., the West, the democracies, and an alliance, the
China-Russia Alliance, they don't want to call it that, but
that is what it is, in conjunction with others like Iran,
potentially, participating as well. And then these dozens and
dozens of developing, so-called, the ``Non-Aligned Nations'',
all trying to cut deals for themselves; we saw that with Saudi
Arabia, you see it throughout Africa, et cetera.
And then on top of that, in this emerging block of two
nations between, it is not simply these military alliances, we
are seeing the rise of alternatives to the SWIFT Banking
System, to the U.S. dollar, ways to--the growth of countries
that now have a vested interest in figuring out how to evade
sanctions.
You see supply chain diversity, Europe is diversifying
where it gets its energy, and the rest of the world is
diversifying, because I think there is the understanding that
the market is responding to the fact that we are entering a
period, a conflict. It is in that vein, given all of that, that
I am really concerned about whether we can continue to afford
to do some of the things that we are doing. I don't mean from a
dollar standpoint, but from a geopolitical standpoint.
So for example, last summer the State Department released a
report attacking the Solomon Islands for their stance on same-
sex marriage. It alienated their partners there. The next week
they signed a Mutual Security Agreement with Beijing and the
Pacific, and the Prime Minister declined to participate in the
commemoration of the memorial marking the Battle of
Guadalcanal. That is just one example.
I mean, we could go--I could take 10, 15 minutes to go
through each of these here, and point to different such places
where we have sort of aligned ourselves in that way.
Haven't we now reached a point where, frankly, we have to
understand we are entering a period of geopolitical competition
bordering on conflict, diplomatic conflict, economic conflict;
and God forbid, potentially military conflict, and as a result
need to govern ourselves accordingly? Not that these values, or
whatever our values may be don't matter, but our approach has
to look very different than it did 5, 10, 15 years ago when,
frankly, the U.S. was the world's sole superpower.
And we had, in many cases, the luxury to be able to go
through and do some of these things, because it is not that
these issues don't matter, it is that none of these issues are
going to matter if 15, 10, or 5 years from now we live in a
world in which the dominant economic military and technological
power in the world is in the hands of authoritarian regimes,
who frankly resemble what the vast majority of human history
looks like. And that is, led by despots where there are no
individual rights, and all these things that have made, not
just our prosperity and freedom possible here, but the world a
better place.
Isn't it time for us to view the world through the lens,
frankly, of the beginnings, the early stages of a geopolitical
conflict?
Secretary Blinken. Senator I share your--I share your basic
analysis. And I think that, in a sense that is exactly what we
are doing. We have worked from day one to do two things,
foundational things: One is to support important investments in
ourselves, which I talked about a little earlier, to make sure
that we are as strong and competitive as we can be. And I
think, thanks to Congress, we have made those historic
investments. And the CHIPS and Science Act is maybe the best
example.
But second, we have worked from day one both to reengage,
rejuvenate, and strengthen our existing alliances and
partnerships, but also build new ones, new coalitions of
countries, and even beyond countries, that are fit-for-purpose
in dealing with different parts of the challenge that I think
you described very, very well.
Just to give you one quick example. When we are dealing
with the challenge posed to supply chains around the world, to
make sure that we have, and benefit from, diversified and
resilient supply chains. We brought together countries in a
coalition to do that, to in many cases, near-shore and friend-
shore, to have early warning systems in place if they are being
disrupted. And also, through something called the Mineral
Security Partnership, to make sure that the United States and
likeminded countries are focused on ensuring that we are able
to invest in, effectively, some of the critical minerals that
are so important to so much of what we are doing.
When it comes to our engagement in the Asia-Pacific region,
the Indo-Pacific, we have put that on full throttle. We have
reopened an Embassy, as you know, in the Solomon Islands. We
are looking at other places in the Pacific Islands, where we
can make sure that we are present in ways that we haven't been
in recent years, precisely because we are engaged in a
competition.
And I could go down the list of different collections of
fit-for-purpose partnerships that we built to deal with exactly
the world that that you are describing. I do think, and you
said it, that as we do that, the values that unite us are also
usually important to the strength and solidarity of these
alliances of partnerships.
Now, not every country that we need to be working with is
in the same place that we are. I think we recognize that, and
we need to make sure that we are adjusting and flexible enough
for that.
The last thing is this: There are a number of countries
that are looking, as you know, very carefully and what is
happening, making their own decisions, in some sense making
their own bets about which direction they are going to go in.
And from my perspective this is less about saying to them: You
have to choose, and more offering them a choice. If we are able
to do that, for example, in being able to catalyze real
infrastructure investment that is a race to the top, not a race
to the bottom, they are going to choose us.
We also have to have some strategic patience. There are
countries that have had long-standing, for decades,
relationships, for example, with Russia, where moving away from
that, as they want to do, is not like flipping a light switch,
it is moving an aircraft carrier, and we have to work with them
to do that.
But I share the basic picture that you have painted, and
really welcome working with you to figure out the most
effective ways to deal with it. Thank you.
Senator Coons. Thank you, Senator Rubio, I couldn't agree
more that that is one of the core arguments for robustly
resourcing the State Department and the USAID, is to make sure
we are meeting this moment.
Senator Murphy.
Senator Murphy. Thank you very much, Mr. Chairman. Good to
see you, Mr. Secretary.
The eyes of the world and the nation are rightly focused on
Ukraine, on our broad set of competition, challenges with
China; the Middle East always gets an outsized share of
attention from this country and this Congress. But I want to
thank you for the work that your diplomats have done to achieve
two preliminary, but very important, smaller scale diplomatic
agreements in the past several weeks.
First, the Windsor Framework, which the United States had a
great interest in, to make sure that peace is preserved in
Northern Ireland ahead of the 25th anniversary of the Good
Friday Agreement, and the Normalization Agreement between
Kosovo and Serbia. The team that you have in place in that
region is absolutely exceptional. Well, that is the beginning
of what we hope is more accommodations between those two
countries, a really important step. So I just wanted to
congratulate you and your team on the work that you have done
on those two important achievements.
I want to turn your attention to the Global Engagement
Center.
Secretary Blinken. Mm-hmm.
Senator Murphy. Because this is something you and I have
talked about, and I appreciate the fact that we have continued
to scale up the size of the Global Engagement Center, and that
your budget requests another double-digit percentage increase.
I am of the belief that the GEC needs to take a primary, rather
than secondary role when it comes to the way in which we
counter misinformation around the world. I think, often, the
Department of Defense which has a budget that dwarfs that of
the GEC, doesn't always have the sensitivities that the State
Department does about what messages work and what doesn't.
But what concerns me more is that we have ahead of us, the
reauthorization of the GEC, we have got to put it back on the
books, and there is really no way to combat Russian
misinformation, their propaganda efforts, which are integral to
their campaign against Ukraine; or China's efforts to expand
its reach, without the GEC.
So I just wanted you--I want to sneak in at least one more
question, but ask you for a minute to talk about what impact it
would have if we were not able to extend the GEC's authorities
beyond the end of 2024?
Secretary Blinken. Yes. And really, thank you for raising
that. And also, thank you for your leadership on this.
And this is a front in the conflict that Senator Rubio was
just talking about. That is information. And we have
competitors, adversaries, who are using information, or more
accurately, misinformation and disinformation, against us,
virtually every minute of the day, and against our allies and
partners, both to drive wedges between us, and also to
misinform publics in profound ways.
The GEC, for us, is a critical tool in actually being able
to deal with that. And as you know, what it is doing is working
with other agencies to direct, to lead, to synchronize, to
coordinate, our efforts to understand these trends in foreign
malign actors trying to spread disinformation and propaganda
outside of the United States; and both to understand it, to
expose it, to share that information with others, and to help
them develop tools to combat it. We have campaigns through the
GEC to--as I said, to expose, to educate, to mitigate
disinformation.
It is now the premier information sharing platform
internationally. For this we have dozens of countries that are
participating with us, among other things. Just to cite a few
examples: we have exposed through the GEC, Russian websites
that have been pushing misinformation, disinformation,
including about Ukraine, again in countries around the world;
disinformation coming from China in third countries about
elections, again, about Russia's war of aggression against
Ukraine. We have done tremendous work, I think, doing open
source mapping of some of the use that China has made of
surveillance technology and data collection, and so on. I could
go on, but the point is, it is a very effective vehicle for
doing this, and if we lose that we are, in effect, disarming
ourselves in this aspect of the competition.
Senator Murphy. Here, here. And I hope that those of us who
have worked in a bipartisan way to support the GEC, will
continue to do that.
I wanted to turn your attention to North Africa for a
moment. Senator Coons has led the effort in trying to increase
our ability to operate in fragile environments, and there are a
number of them in North Africa, one of them is Libya. Your
budget requests a 6 percent increase in worldwide security
protection funding for local forces to make sure that we have a
diplomatic presence in dangerous places; and few more dangerous
places than Libya.
Secretary Blinken. Mm-hmm.
Senator Murphy. But other countries are reopening their
diplomatic presence there. Senator Risch and I have led an
effort to rewrite the Accountability Review Board process to
try to give your folks a little bit more reason to reengage in
those fragile places.
I just worry that without a presence there in 2023, we are
going to have a hard time protecting our equities and a lot of
taxpayer dollars that have been spent there. Do you have--with
this additional funding that you have put in the budget; do you
have any timetable for our ability to reopen the Embassy in
Libya?
Secretary Blinken. Senator, I can't give you a timetable,
other than to say that it is something we are very actively
working on. And like you, I want to see us be able to
reestablish an ongoing presence in Libya. There is also an
important moment where, through the work of the UN Envoy, there
may be, emphasize, ``may be'', a path forward to moving Libya
in a better direction, including getting elections for a
legitimate government.
And our diplomats are deeply engaged in that, but obviously
it would be a lot easier and more effective if they were on the
ground day in day out. So we are working on it. We want to work
with you, work with this committee, on what would be necessary
to support that.
Senator Murphy. And lastly, on Tunisia.
Secretary Blinken. Yes.
Senator Murphy. I know that you are just as concerned as
this committee is, about the dramatic turn in Tunisia away from
democracy, an 11 turnout in the so-called ``elections''. It
seems to me that President Saied has made up his mind to move
away from a success story of democracy in Tunisia, towards a
neo-autocracy.
It seems that your budget, you know, is a bit of a middling
ground, and maybe that is where you want to be, cutting
economic funding, maintaining military funding, but then also
opening up the possibility of additional military funding if
Tunisia, quote ``shows signs of a return to democratic
governance.'' I kind of feel like they have made their
decision, and I think that our funding and our policy should
reflect that, but your budget suggests that you still have hope
that Tunisia can return to the rule of law; is that correct?
Secretary Blinken. Hope is always important, but of course,
it has to be grounded in reality. I have met with President
Saied on a number of occasions, including most recently, I
guess, the Africa Leaders Summit, at the end of last year. We
are engaged with the Tunisian Government. We are indeed
concerned about what we have seen over the last year.
There is another aspect of this that is critically
important that also goes to our budget, which is the most
critical thing they can do on the economic side, is actually
get an IMF agreement. And we have been strongly encouraging
them to do that because the economy risks falling off the deep
end. So we need to see that, but we also want to see steps
taken to put Tunisia fully back on the democratic path it was
on.
Senator Murphy. Thank you. Thank you, Mr. Chairman.
Senator Coons. Thank you Senator Murphy. One of the things
we could do to help with public diplomacy is confirm Elizabeth
Allen to the Undersecretary for Public Diplomacy.
Secretary Blinken. Yes. Thank you.
Senator Coons. But forgive me. Senator Hagerty.
Senator Hagerty. Thank you, Chairman Coons.
Secretary Blinken, welcome, it is good to see you again.
Secretary Blinken. Good to see you.
Senator Hagerty. A number of things to get through,
Secretary, so I am going to move pretty quickly. The first one
I would like to touch on: this past year, Senator Cardin and I
passed a law to create a Commission on Reform and Modernization
of the Department of State, via the 2023 NDAA.
This new law authorizes the commission to conduct a
comprehensive review of the State Department, and to offer
specific legislative proposals for modernizing the Department.
And funding the Commission will be one of my top SFOPS
appropriations priorities this year.
Secretary Blinken, if the committee includes in our
appropriation for the Commission on Reform and Modernization of
the Department of State, do you commit to cooperating fully
with this commission, on all matters described in the
underlying law that created it?
Secretary Blinken. In short, yes. And indeed, one of things
I will just say very quickly, Senator, is: I think we have been
looking as well, and talking to your team about recommendations
for that. And we very much want to make sure that we provide
the support to be able to do it.
Senator Hagerty. Excellent. We look forward to working with
you on it too.
Secretary Blinken. Thank you.
Senator Hagerty. As Senator Rubio mentioned, we do face new
and evolving challenges every day, and I think that
modernization of the Department will help us address those
challenges. So thank you for that commitment.
Let me turn to another area that is very troubling. It is
an issue related to our neighbor at our southern border,
President Lopez Obrador continues to take arbitrary and
punitive actions against U.S. businesses operating in Mexico.
So my first question is, whether you are aware of the
Mexican Military's recent seizure of a U.S.-owned Deepwater
Port that is on the Yucatan Peninsula in Mexico?
Secretary Blinken. I am not sure that I am aware of that
particular seizure. And when did this happen?
Senator Hagerty. It just recently happened in the past few
weeks.
Secretary Blinken. Happy to follow up with you on that.
Senator Hagerty. I would like to do that. In that
situation, it concerns me that the Mexican Government has put
its Military in charge of constructing a section of the Tren
Maya Railway that is near this recently seized port. And the
bigger concern is the fact that China may be involved in
building sections of that railway. The Chinese have bragged
that the China Communications Construction Corporation is
heavily involved in providing key materials for the railway.
You probably are aware of----
Secretary Blinken. Just if I could ask, just as a point of
information. There is the case, and I am not sure if this same
one, of Vulcan Materials.
Senator Hagerty. That is the case.
Secretary Blinken. Yes. I am sorry. I didn't, I didn't
associate. Yes. That I am aware of, and share the concern about
that, and we have been asking the Mexican Authorities, local
authorities as well national authorities, about the military
and police presence there. So this is a deep concern. I think
as a practical matter as well, cases like this can very
negatively impact Mexico's effort to attract future investment
from the United States, and any other countries.
Senator Hagerty. Absolutely.
Secretary Blinken. So yes. I am sorry. I didn't----
Senator Hagerty. No. I think that is a grave concern, as
you just described, that Mexico would take this sort of
arbitrary and very detrimental action against U.S. assets. I
mean, the rule of law is critical to the relationship, and I am
just shocked that President Lopez Obrador is operating in this
manner. I think the even deeper shock though, is the concern
that a Chinese company is involved in building a section of the
railway nearby.
I also understand that this company that they are using is
deeply involved in building Chinese military infrastructure,
they are involved in militarizing the islands in the South
China Sea, that China has poured concrete into the ocean to
build. I think the other thing I hope we can investigate is
whether the Chinese are involved in financing this.
Secretary Blinken. Mm-hmm.
Senator Hagerty. There are deep concerns there. We have
got, potentially, Chinese companies working with the Mexican
Military to take adverse actions on U.S. assets, and in
particular, seizing a deepwater port in that location. I would
be interested in your opinion whether this would be in the
interest of the Chinese Communist Party to have control of this
port.
Secretary Blinken. I think it, theoretically, would be. And
it would certainly not be in the interest of Mexico. One of the
things that we have worked actively with Mexico on, is making
sure that, in other areas, for example, in the telecom sector,
that they focus on making sure they have trusted vendors
engaged in their system, because we know the challenges to
their own sovereignty, when you don't have a trusted vendor in
your telecom system.
Senator Hagerty. It is a deep concern.
Secretary Blinken. And this is something I must say that
President Lopez Obrador seems seized with, but I would welcome,
first of all, making sure we have all the information that you
have about this particular case, and sharing with your team
what we know.
Senator Hagerty. We will exchange information.
Secretary Blinken. Thank you.
Senator Hagerty. And we may even have an opportunity to
discuss it further this afternoon, at the SFRC.
I would like to turn to another area, and that again,
relates to China, and the situation with Taiwan. In 2023, this
year, February, CIA Director Burns said that, ``As a matter of
assessment, China seems to be capable of conducting an invasion
by 2027 if so ordered.'' Do you agree with Director Burns'
assessment?
Secretary Blinken. I agree with his assessment, yes.
Senator Hagerty. Time is not on our side, Secretary,
especially when we have a $19 billion arms backlog to Taiwan.
That is why I was proud to contribute to and vote for the
Taiwan Enhancement Resilience Act, TERA, the Security
Assistance Authorization Law that Senators Bob Menendez and Jim
Risch passed into law via the 2023 NDAA.
The Bipartisan Menendez Law annually authorizes as much as
2 billion in grants in foreign military financing to Taiwan
between now and 2027. I was deeply disappointed, however, to
see that the President's proposed budget this year included
only 113 million in new FMF lines for emergency foreign policy
priorities, far short of the $2 billion target.
This 113 million in the President's proposed budget,
assumes a mere 16 million as a baseline for foreign military
financing in the Indo-Pacific.
So my question, Secretary, is: Why did the State
Department's budget request for foreign military financing
exclude funding for this bipartisan law?
Secretary Blinken. Well, Senator as you point out, we do
have, a part of our request, the emerging priorities fund
globally, which as you rightly said, is about $113 million in
the budget. When it comes to Taiwan, you know, FMF is one tool,
we appreciate the authority, we also appreciate the drawdown
authority, which we are looking at. But we have looked at how
we can be most effective in supporting Taiwan in its defense.
As you know, the State Department has notified just over
the past decade or so, nearly $40 billion in foreign military
sales to Taiwan, going back just between 2019, and today it has
been about $21 billion. I have signed out more cases than any
Secretary of State in history for Taiwan. Taiwan also increased
its own defense budget, by 11 percent, giving it the additional
means to buy equipment necessary for its defense.
Senator Hagerty. Back to the original question, Mr.
Secretary.
Secretary Blinken. Yes.
Senator Hagerty. I am sorry. The time is so tight.
Secretary Blinken. Yes.
Senator Hagerty. But to the original question, the budget
is far short of what you have been authorized. My question now
is, whether the PRC has said to you, or to anybody that works
at the State Department, or any of our diplomats, that there is
some sort of red line involved with us stepping up our Foreign
Military Financing?
Secretary Blinken. No. And to the extent they would ever
try to say anything like that. That is not something that we
would obviously take into account. As I said, I signed out more
cases than any previous Secretary of State, the challenge that
we have is--I think you have pointed to, is we have a backlog,
a very significant backlog that has built up.
This fundamentally goes to production challenges that we
have. I know that we are working on, on a bipartisan basis,
working with industry to build up that production capacity.
That is the long pole in the tent, and we need to address it.
Senator Hagerty. I am very familiar with foreign military
sales process.
Secretary Blinken. Yes.
Senator Hagerty. And I would just say this, we learn to--we
have an opportunity for deterrence with Ukraine, we didn't take
it. We have the opportunity here, the Menendez law, actually,
is aimed at providing that opportunity to create deterrence
there that could be significant. I encourage, and look forward
to working with you to do everything we can in that regard.
Thank you, Mr. Secretary.
Secretary Blinken. Yes, thank you.
Senator Hagerty. Thank you, Mr. Chairman.
Senator Coons. Thank you, Senator Hagerty.
Senator Van Hollen.
Senator Van Hollen. Thank you, Mr. Chairman.
Mr. Secretary, great to see you. And thank you for your
support for the men and women at the State Department,
including the Foreign Service as well as the Civil Service.
A few years ago I teamed up with my colleague, Senator
Sullivan, and we passed, with the support of members of this
committee and the Senate, the Foreign Service Families Act,
which is designed to help us continue to retain and to recruit
the finest diplomatic corps in the world.
We are in the implementation process. My staff just met
with your team yesterday. We are pleased with the progress that
has being made. And I am just asking for your assurance today
that we will continue to implement those parts that are still
in progress?
Secretary Blinken. Yes. Absolutely, because it is critical
that we be able to attract and retain the best talent
available, this is an important component of that because this
is something that you have known and lived more than, or as
much as anyone. This is a family enterprise. It is not simply
the Foreign Service Officer that is there, it is the entire
family. So we want to make sure that we are finding ways,
through the Act to support them, to create greater opportunity
for them, because that is the most effective way to attract and
retain people.
Senator Van Hollen. Thank you Mr. Secretary. Let me turn
now to the recent meeting between Putin and President Xi, which
took place, of course, just days after the ICC confirmed what
we knew, which is that Putin was a war criminal, this case
based on the fact that they have abducted Ukrainian children
and taken them forcefully to Russia.
You know, President Xi has reiterated the fact that that
relationship between Russia and China knows, quote, ``No
limits. The friendship knows no limits''. You and others in the
administration have warned of the possibility that China would
provide--start providing material----
Secretary Blinken. Right.
Senator Van Hollen [continued]: Military support to Russia
in its fight against Ukraine, and that that would be a red line
that would trigger severe economic consequences in the form of
sanctions. I am glad you have established that very clearly. In
order for that to be effective we need to make sure our allies
and partners are on board.
Secretary Blinken. Mm-hmm.
Senator Van Hollen. That includes our European partners. It
also includes our democratic partners, like South Korea, Japan,
Australia, others in East Asia, and around the world. So my
question is, do we have a break the glass plan? Because what we
don't want to see happen is if China were to provide military
assistance that we are, you know, all fluttering around trying
to figure out the way forward. Obviously imposing economic
sanctions on Chinese entities is tougher than on Russian
entities, given the more interconnected nature of the
economies. But do we have a break-the-glass plan with our
partners in the event China were to provide military assistance
to Russia?
Secretary Blinken. Thank you Senator. Let me say two things
quickly about this. First, as you noted, going back to day-one
of the Russian aggression we have been very clear with Beijing
about the serious problem that any material lethal support to
Russia, for the Russian against Ukraine would pose for us, and
we believe for countries around the world. President Biden
shared this directly with President Xi about three weeks into
the aggression when they spoke by video conference. We have
reiterated that.
And as we have seen them consider it more actively in
recent months, we have doubled down in making clear to them the
serious problem that this would pose. But what is important is
this, and it is to your point, it is not just us. When we
shared with allies and partners some of the information we had
about the act of consideration that China was giving to
providing this lethal material support to Russia, this
galvanized a number of other countries, all of whom directly
engaged senior Chinese leadership on the question.
And so we are actively talking to them about what it is we
would do in the event that that happened. But my hope is that
China having heard, not just from us, but from many countries,
including countries with which it is trying to carry more
favorable relations, that it heard them, and heard us, and will
not cross that line.
Senator Van Hollen. Well, Mr. Secretary, I appreciate that.
I just think it is going to be really important that we have in
place a specific plan with our partners so that we are ready to
go, and that China knows we are ready to go, because the
deterrent effect of that, I think, depends on their clearly
understanding the impact.
If I could turn now to the Israeli-Palestinian issue; since
the new Israeli Government was formed, high-level members of
our Government have visited Israel, including yourself. Just a
few days ago, President Biden had a phone call with Prime
Minister Netanyahu. The readout from that call indicated that
President Biden underscored the need to quote, ``Maintain the
viability of the two-state solution,'' unquote, and the
importance of abiding by the two agreements that the United
States helped to recently broker between Israelis and
Palestinians, at Aqaba, and later at Sharm el-Sheikh.
Those agreements committed Israel to, I quote, ``Stop
discussions of any more settlement units for 4 months, and stop
authorization of any outposts for 6 months.'' Within days of
the Aqaba Agreement, as you as know, President--Prime Minister
Netanyahu rushed to disavow it, said that doesn't apply.
And then just days after the meeting at Sharm el-Sheikh,
and after the phone call between President Biden and Prime
Minister Netanyahu, the Knesset voted to pass a law to lift the
ban on reentering four settlements, including Homesh, that
Israel had committed to evacuate 20 years ago.
State Department Spokesperson Patel, said the move was, and
I quote, ``Inconsistent with Israel's recent commitments to
deescalating Israeli-Palestinian tensions,'' and said, ``It was
a clear contradiction of undertakings the Israeli government
made to the United States.''
I am assuming that you also support and endorse those
comments made by the State Department spokesperson?
Secretary Blinken. Senator, I do, but it is also based on
the--what we hear. And I have heard directly from Israeli
leadership, as well as the Palestinian Authority, about the
desire for both sides to see the violence that has reached
record levels in recent months, deescalate, and to try to get a
period of calm. And that is clearly in the interest of both
sides, and it is an interest that at least Prime Minister
Netanyahu has expressed directly to me.
And there are a number of things that go with that, you
decided if we see----
Senator Van Hollen. No. Mr. Secretary----
Secretary Blinken [continued]: If we see steps inconsistent
with that, I think it does contradict what we believe both
Israelis and the Palestinian Authority are seeking to do, and
what they have said to us, is in their own self-interest.
Senator Van Hollen. No, I appreciate that. Obviously we
need to see compliance on both sides, the Palestinian Authority
and the Government of Israel. But this was a very official act
by the Knesset, just days after the phone call between Prime
Minister Netanyahu and President Biden. So I am pleased to see
you support, endorse the statement by the State Department
spokesperson.
But it seems to me that we look very weak when we
continually make statements without any kind of consequence, so
I guess my final question to you is: What are we prepared to
do? What is the Biden administration prepared to do if you see
continuing violations, by either side, of this agreement?
Secretary Blinken. Look, I don't want to speculate or get
into a hypothetical about where this may go and what we would
do. I can say that both the Israeli Government and the
Palestinian Authority want us to be involved and engaged in
helping, and supporting, and working with them to try to get to
this period of calm. At some point if either or both sides are
not doing what we believe is necessary to get there, it will be
hard or may be futile for us to do that. So we have to look
very carefully at that.
But I also think that it is important for everyone to try
to double down on the steps necessary to try to get there,
because it is profoundly not in the interests of Israel, our
close ally and partner, or for that matter the Palestinian
Authority, to see this cycle, cycle up and not down.
Senator Van Hollen. Mr. Secretary, I appreciate the
efforts. And the United States has been involved in trying to
broker these agreements, I guess my question, and I will just
leave it with your last answer is that, you know: What are we
prepared to do when we see violations of those commitments?
Thank you Mr. Chairman.
Senator Coons. Thank you, Senator Van Hollen.
Senator Moran.
Senator Moran. Chairman, thank you.
Mr. Secretary, pleased to be with you this morning.
Secretary Blinken. Thank you.
Senator Moran. Last year in this setting I asked you about
the CPTPP, the Trans-Pacific Partnership Trade Agreement.
Secretary Blinken. Mm-hmm.
Senator Moran. Your response to me touted the Indo-Pacific
Economic Forum. I would highlight for you that just in the last
6 months the Australian Foreign Minister, Singapore's Defense
Minister, Japan's Foreign Minister have noted, I think with the
objection our absence, from that agreement.
Secretary Blinken. Mm-hmm.
Senator Moran. What is it that keeps us from a willingness
to engage? You can shift me back to the Indo-Pacific Economic
Forum; but why is it that this is not a good idea? The TPP is
not a good idea for us to engage in?
I say this, I mean, perhaps from an economic, you know,
point of view, but from a relationship. I meant to say this at
the very beginning: I am as concerned about our Nation as I
have ever been. Those are usually throwaway lines from
something we say throughout our careers and lives, but it is
genuine with me. The circumstances we now face suggest to me
that we need a lot more friends and allies, and our trading
relationship, our economic support, those relationships matter.
I walked as Senator Rubio and you were conversing, and it
seems to me that our foreign policy needs to be different in
today's world than it was just even a few years ago.
Secretary Blinken. Mm-hmm.
Senator Moran. And this would be one that I think would be
important from a relationship, from a national security point
of view, as much as it is from an economic point of view.
Secretary Blinken. Yes. So Senator, a couple of things on
that: First, our focus, in the immediate, is on building up and
building out the Indo-Pacific Economic Framework, known as
IPEF. That does include, among other things, some trade
facilitation measures, it has a focus, for example, on digital
trade which is so critical to the 21st Century economies. It is
something that the partners in that endeavor are very focused
on and----
Senator Moran. Why does that exclude TPP?
Secretary Blinken. It doesn't exclude it. I am saying, in
the in the first instance this is where our focus is, supply
chain diversification and resiliency. That is a big part of
IPEF, building out clean economy infrastructures, that is a big
focus, and then, as well, making sure that we are combating,
together, corruption that still undermines the systems that we
are trying to bring together.
I was there when TPP was negotiated in the--during the
Obama administration, I was engaged in that. And I think that
in that moment it was a very good endeavor, and one that I
think, both economically and strategically, had real benefits.
I think as it now stands, the world has moved on, and I think
we have to focus, in the first instance, on what we can do, and
what we can build out, and generate support for. Let us see
where we get to----
Senator Moran. Generate support for.
Secretary Blinken. Here.
Senator Moran. Within the United States.
Secretary Blinken. Within the United States, as well as, of
course, among our allies and partners. I would note, of course,
that even as we are working on the Indo-Pacific Economic
Framework, we have been building and strengthening new
partnerships in the Indo-Pacific to include the Quad. I just
came from a meeting with Japan, with Australia, and with India.
That is a very effective vehicle, including on--increasingly on
economic matters. We, of course, more strategically, have
AUKUS.
The President, as you know, just came from a meeting with
U.K. and Australia on that, and we have deepened and
strengthened our engagement with ASEAN, including economically,
so all of those pieces fit together.
Senator Moran. Mr. Secretary, I just would say from my
point of view, when you say, ``We have moved on'', we should
not have moved on. And we should reengage. These things are not
mutually exclusive, and what you described as occurring are, in
my view good things, but it still leaves out an important
component.
I joined a number of my colleagues here. I am a co-chair of
the Senate Hunger Caucus.
Secretary Blinken. Yes.
Senator Moran. Afghanistan, massive, massive humanitarian
crisis, 20 million people facing food insecurity. The Taliban
recently eliminated the ability for women to work in NGO
organizations in food delivery. What steps are you thinking
between you and Samantha Power, and others that can be done, in
regard to Afghanistan and the world food crisis?
Secretary Blinken. Yes. Senator, you are right to point to
this, this huge challenge. We have been, even since the
withdrawal from Afghanistan, and ending the war, the largest
single humanitarian contributor to Afghanistan, particularly
when it comes to the fundamentals of the basics, like food, we
have been working, relatively effectively, through
international partners, implementers, the United Nations, NGOs
that were getting food where it was needed, and getting other
basic humanitarian support.
I think there was a real concern in the first year about
the possibility of Afghanistan as challenged, deeply challenged
as it was, falling even further off the edge, that that didn't
happen in large part, because we were able to send the
assistance. The problem that we face now is exactly what you
pointed to, the edicts promulgated by the Taliban, preventing
women from participating in the delivery of assistance. That
violates a fundamental principle that we do not want to in any
way ratify.
But what is happening, as a practical matter is, that in
many parts of Afghanistan that edict is not being implemented,
which means that where it is not being implemented we are able
to continue to have these groups provide--support them,
providing assistance, because women are still allowed to
participate in its distribution.
So that is what is going on right now. But look, I agree
with you, the Taliban is taking steps that are digging an even
deeper hole for the people of Afghanistan.
Senator Moran. This evening, a number of us will say
goodbye to Ambassador Beasley.
Secretary Blinken. Yes.
Senator Moran. And say hello, and welcome to Ambassador
McCain.
Secretary Blinken. Yes.
Senator Moran. I would use this opportunity to express my
gratitude for the leadership of Ambassador Beasley and----
Secretary Blinken. He has been remarkable.
Senator Moran. He has been remarkable. And wish every best
wish for Ambassador McCain.
I have 38 seconds, Mr. Secretary. Last month I sent a
letter, along with a number of my colleagues, to Assistant
Secretary Bitter, Consular Affairs.
Secretary Blinken. Mm-hmm.
Senator Moran. What needs to be done to improve the
processing of visas, that is the nature of our inquiry, it can
take over 400 days for a student to get an interview for an
appointment. These are, certainly, strategic in relationship,
they are family and humanitarian. Our office I would guess,
like most of my colleagues, has become a passport and visa
office. We are a part of the, apparently, the State Department,
with just hundreds.
I see a report every week of what we call ``casework'',
lots of many significant things, visas and passports occupy a
significant portion of our staff's time. We are willing and
happy to do it. But something needs to be change at the State
Department and Consular Affairs.
Secretary Blinken. Yes. I very much appreciate that. And
this is something that, Senator, we are, and I am absolutely
seized with. As you know, we have had to build back from COVID,
the system for doing the visas, as well, by the way here doing
passports, is very labor intensive, a lot of that labor, both
in terms of contractors and State Department personnel went
away during COVID. We have had to build back and that has not
been without challenge. And we are very focused on dealing with
the wait times that people are experiencing in countries around
the world.
It affects, primarily, right now, first-time visitor
applicants, processing times for categories that have a
particular impact on the U.S. economy, students, temporary
workers, maritime crew renewals, they are actually where they
were before the pandemic, or actually better.
For visitor visas, the median, global interview appointment
wait time is now under 2 months. That is the median. I don't
want to say that there are not places of importance where it is
longer, but the median time is under 2 months. That is half of
what it was in--a year ago, in 2022. Most places, the wait
times are actually much lower than that, as a practical matter.
We have 58 million foreign nationals who actually hold a
valid multi-entry visitor visa, so they don't, of course, need
to keep reapplying. And they can visit whenever. And in fact,
most international visitors to the United States come to the
United States without a visa, because they are either Canadian,
or they are part of the Visa Waiver Program.
Again, that doesn't answer the problem for those who
require visas. What we are seeing, I think the first 5 months
of this fiscal year, fiscal year 2023, we have had a huge surge
again in non-immigrant visas, we increased those by 18 percent
over the same period in 2019, before the pandemic.
Many countries, like Mexico, like Brazil, we actually
issued more tourist visas in fiscal year 2022 than we did in
fiscal year 2019. India, which I know has been a particular
concern to a lot of people, the wait time for first-time
visitor visa interviews, dropped 60 percent since January of
this year, just in the last few months. And we have issued 60
percent more non-immigrant visas this fiscal year, to date,
than the same period, again, going back to 2019.
It is a long way of saying: If you look at it
comprehensively, there is significant progress and improvement.
But there are clearly places where we need to do more to surge
some of our assets. And I think also what happens is, you know,
anecdotally, these are real human problems, we all hear about
them, we get seized with them. We want to work with you to
continue to strengthen this, and improve our----
Senator Moran. In that regard, would you thank your
personnel at Consular Affairs? They have been helpful and
appreciative of the circumstances that we----
Secretary Blinken. Thank you.
Senator Moran [continuing]. And the people we care about
are in.
Secretary Blinken. Thank you.
Senator Moran. Thank you.
Secretary Blinken. Thank you.
Senator Coons. Thank you, Senator Moran. We agree on an
awful lot of trade policy issues.
Senator Schatz.
Senator Schatz. Thank you, Mr. Chairman. I am thrilled to
be on this committee.
Mr. Secretary, thank you for your service, and thank you
for being here today. First question is: What is your level of
confidence that Israel is in compliance with the Leahy Law?
Secretary Blinken. To the best of my knowledge, they are.
And certainly it is something that we take very, very seriously
everywhere around the world. And when we do the necessary
vetting for foreign military sales, or others, one of the key
things we look at is Leahy Law compliance. So to the best of my
knowledge, they are.
Senator Schatz. Thank you. I see that you have a new
program, Strengthening Forest Conservation and Land Management
Initiative, which is great. You know I care very deeply about--
--
Secretary Blinken. Yes.
Senator Schatz [continuing]. International deforestation,
especially commodity-driven deforestation. A kind of technical
question: It is not obvious to me why you are dividing
implementation between State and USAID. So can you describe the
theory of the case here?
Secretary Blinken. I am actually happy to come back to you
on that. And make sure that I give you a fully, informed
answer. I can say, generally, two things: one, we are deeply
committed to this, and appreciate the leadership that you have
shown on it.
Just by way of example, President Lula, as you know, was in
Washington just recently to meet with President Biden. One of
the things we focused on, of course, was dealing with the
deforestation of the Amazon, and indeed hopefully dealing with
the reforestation as necessary. We are committed to that. We
would like to actually contribute to the Amazon Fund, something
we will probably need to work with Congress on.
But that as to the allocation of resources between State
and USAID, you know, generally speaking, we are focused on, and
by ``we'', I mean the State Department, are focused on the
policy and diplomatic aspects of working things, USAID tends to
implement, and it may be that the Budget Division reflects
that. But I need to give you an informed answer. So let me come
back to you.
Senator Schatz. Sure. Just on Lula, I think, obviously,
there are incredible opportunities here, but it seems to me
that we are not going to say of the world's forest, just sort
of hoping for a bunch of Lulas to get elected across the
planet. And so I think we do need to come up with an economic
model. Lula is a willing, enthusiastic participant, but we have
to make it worth it to their country.
Secretary Blinken. Yes.
Senator Schatz. So that other countries that are trying to
figure out where to move, economically, that they get--that
they can see a pathway that works for them. So I agree with you
about the Deforestation Fund, and whatever we can do to be
supportive there, I will try to help.
Secretary Blinken. Thank you.
Senator Schatz. I welcome the budget's focus on democracy
and human rights, and particularly robust funding for promoting
press freedom. There is no dedicated envoy or office for press
freedom, so how do you ensure that press freedom stays high on
that list of priorities, as your offices across the planet have
so many things to contend with, and yet this seems to me need
to be part of the slide towards authoritarianism across the
planet.
Secretary Blinken. It really is front and center on the
agenda for a number of offices at the Department, and by the
way, for me, since this is something I have spent some time on,
including making sure that I was speaking up and speaking out
on World Press Freedom Day. But also making sure that
programmatically, we are putting in place the resources, the
tools to defend press freedom, and that is exactly what we have
done over the last couple of years.
It was a key feature, and we will--by the way, next week we
will begin the key feature of the Summit for Democracy. It is
one of the critical pillars in that. We put in place, for
example, funds to help the press that is being assaulted with
lawfare in various places, be able to have the funds to defend
themselves. We put in place resources to help protect
journalists who are actually under physical threat.
Senior officials in my Department, particularly in the
Bureau of Democracy and Labor are--this is right front and
center on their agendas. So I can tell you that it is something
that I am personally focused on, and the critical Bureaus in
our Department, are focused on.
Senator Schatz. Thank you. Let us move to the Pacific. I am
glad to see a larger request from the administration for
foreign assistance for Pacific Island countries for fiscal year
2023, but it is still short of the enacted level. And so could
you speak to that, the dollar amount, but also I want to give
you a chance to talk about what we are doing in the Pacific
Island region. And I want to coach you a little bit.
Secretary Blinken. Mm-hmm.
Senator Schatz. Not that you need coaching. But I want to
remind us that it is difficult to compete with graft, right?
Secretary Blinken. Yes.
Senator Schatz. And so what we have to offer are, as you
say, values, right, and relationships. And as I have talked to
Pacific Island leaders, sure, they need resources, and
especially in a climate-change context, lots of these countries
are really in need of our direct material assistance. But they
also want to be respected as sovereigns.
Secretary Blinken. Mm-hmm.
Senator Schatz. And so I would like you to talk through
how, attitudinally, we are shifting, and not just throwing
another, say, $80 million at the problem, and then trying to
park all of our military hardware wherever it is convenient on
a map. These have to be a sovereign-to-sovereign relationship.
I would like you to talk to that.
Secretary Blinken. So we have, we fundamentally elevated
the Pacific Island countries in our foreign policy and in our
diplomacy, and that really culminated with what was really, I
think, a historic Summit Meeting between President Biden and
the Leaders of the Pacific Island nations. It is something that
I took part in, and it really was an extraordinary moment,
because I think it said to them, and it said to their people,
that the United States is engaged in a different way.
And now that needs to manifest itself in concrete,
practical ways. Our diplomatic presence, as you know, we opened
in the Solomon Islands, we are looking at establishing two to
three other embassies, or outposts in the Pacific Islands where
we have been absent for the last years. That is moving forward.
It is also reflected in our budget.
Our economic engagement, particularly in finding and
catalyzing resources to deal with challenges that are affecting
the lives of Pacific Islanders, that is front and center. As
you know, it is an interesting challenge because, in many
cases, each individual island nation is small, and so making a
market can be complicated, but particularly as they are pooled
together, and we are able to pool some resources, we are doing
that.
I think on climate we have an absolute responsibility, and
we are acting on it, to try to provide the technical
assistance, the technology and, yes, the resources to deal with
this, particularly for countries that, literally, risk not
existing because of climate change. And of course, programs
that we have that are reflected in the budget: for education,
for governance, for building institutions, all of those were
there. I am happy to work with you, and work with your team to
make sure that we are properly resourced to do that, but this
really is front and center in our thinking.
Senator Schatz. Thank you. Just one final thought on what
is happening with climate. I think there are some cases,
Kiribati is a good example where they really might vanish.
Secretary Blinken. Yes.
Senator Schatz. But I think the less precipitous, but just
as bad scenario, is saltwater inundation of the freshwater
systems, of the irrigation systems, and so you can't drink
water, you can't use water to farm.
Secretary Blinken. Yes.
Senator Schatz. And then there is no economy at all.
Secretary Blinken. Yes.
Senator Schatz. And none of these people have any place to
go. So although I, you know, I love what DFC is doing, and I
love the opportunities to kind of envision economic growth. But
the truth is, some of these people need immediate assistance
because they can't drink the salt water, and their runways are
flooding. And so I think we need to race to their aid without
precondition.
Secretary Blinken. Appreciate that.
Senator Schatz. Thank you.
Secretary Blinken. Thank you.
Senator Coons. Mr. Secretary.
Secretary Blinken. Mr. Chairman.
Senator Coons. If you have 10 more minutes, rather than
submitting a whole bunch of questions for the record, I am
going to quickly run through five topics.
Secretary Blinken. Sure, of course.
Senator Coons. We have a noon vote, to the best of my
knowledge no other Member of the Committee is coming back. None
of these will surprise you, but I thought it was worth the time
since we have each other here.
Secretary Blinken. Sure.
Senator Coons. Let me pick up from the point that Senator
Schatz was just making. The Development Finance Corporation I
think is a big step forward. You are the Chairman of the Board.
I would love to hear--so I briefly want to talk about DFC, GFA,
Conservation Foundation, PEPFAR, Mexico.
Secretary Blinken. Mm-hmm.
Senator Coons. And I can start with the first two and get
them disposed of quickly.
Secretary Blinken. Yes.
Senator Coons. The 20th anniversary of PEPFAR is, indeed,
worth celebrating. I am glad that you have prioritized it in
your opening statement. We have some real work to do here to
make sure that it remains authorized and robustly funded, and I
look forward to working closely with you on that.
I just spent the weekend in Mexico with a broad bipartisan
group of Senators and House Members. We have an outstanding
Ambassador. We have got 4 hours of the President's time,
President Lopez Obrador and his entire Cabinet. And for the
first 2 hours he simply listened, as members of his Cabinet
made presentations, and members of our delegation engaged.
I believe there is much more good news about our
partnership, and its potential, in terms of border crossings
and security, fentanyl interdiction, economic development, and
some of the ways that our economies, and our values, and
priorities align, than one could easily discern from the cable
coverage of this. But there are some real irritants in the
relationship.
Secretary Blinken. Senator, can I just say very quickly, I
very much agree with that. And we really have seen, in many
places the--our Mexican partners step up to, including dealing
with drug trafficking, dealing with the transnational criminal
enterprises. But the problem is huge, they are resource
deficient, and so I think we have to continue to work with
them. We have restored the security dialogue that would have
been held in advance, we are working very actively under that.
We have a ``Bicentennial Framework'', as we called it.
Senator Coons. Yes.
Secretary Blinken. To really move out on concrete
cooperation. And again, we have seen seizures go up, we have
seen the active, very active work to disband criminal
enterprises, we have seen a very significant increase in
Mexican law enforcement that has arrest authority, by the
creation of a National Guard. That has been important.
And of course, on migration, they have been a critical
partner, it doesn't answer the full problem, but absent that
partnership, the challenge would be even greater. So sorry to
interrupt but I think it is important, you are right, to
underscore the fact that they are a vital partner. Never mind
the fact that, you know, one of our two largest trading
partners in the world.
Senator Coons. A presentation at the Ministry of Foreign
Affairs made it very clear that the recent initiative taken by
the Biden administration to require an application, a legal
process crossing at that border point, brought down
dramatically entrants from four different countries.
Secretary Blinken. Yes. That is right.
Senator Coons. I am eager to work with you, if I possibly
can, to support finding a path forward as we anticipate the end
of Title 42, in the middle of May.
So DFC, you are the Chairman of the Board.
Secretary Blinken. Yes.
Senator Coons. How successful do you think we have been,
using this newly expanded tool? It is built on the base of OPIC
but it has got new equity authorities, it can do a whole range
of things that we couldn't do before. I think this is a
critical opportunity to crowd in private sector capital
investment, and de-risk it. Where are we making a difference?
Where are we not? And what do you think we need to fix to make
it really reach its potential?
Secretary Blinken. Yes. So I fully, I fully share your view
that the DFC is a critical tool, one that I think we are using,
increasingly, effectively, and it goes to exactly the points
that you are making. For the United States the comparative
advantage we have, if we do it right, is mobilizing--catalyzing
the private sector. We obviously are not going to match China,
for example, dollar for dollar, coming from our taxpayers. And
the DFC is a vital tool in doing that.
I do think that there are a couple of critical additions
that we could make to the DFC that would make it even more
effective, and one, maybe the most important one from my
perspective, and our perspective, is lifting the constraints
that require counting equity like a grant.
Senator Coons. Yes.
Secretary Blinken. Basically what is most in demand, which
are equity investments from the DFC, end up being what costs
the most. And I believe if we do that we will see its
effectiveness in leveraging more private sector investment go
up significantly.
Senator Coons. Well, I look forward to working closely with
you on that, your budget proposes a $2 billion mandatory to the
DFC.
Secretary Blinken. That is right.
Senator Coons. Well welcome, well engaging, that does not
address the most important issue, which you are absolutely
right, is a legal fix----
Secretary Blinken. That is right.
Senator Coons [continuing]. To a scoring issue that is
restraining this from being--if you come to the party and
everybody else has got equity investments, and you have only
got debt, you are the last person, and in a game of musical
chairs, that often means we don't get to pick our partners, we
don't get to drive and scope the project, we don't get to
deliver on the values that are at the core of transparency, and
labor, and environment that we would like to see.
So I hope that in this year, in this authorizing process,
in the Foreign Relations Committee, where you may well be this
afternoon, this issue might also be discussed.
Global Fragility Act, something Senator Graham and I
crafted based on positive experiences with Colombia. It is an
important tool, but the whole goal here was to, with State at
the lead, have State, USAID, and DOD jointly plan. Having
recently visited Niger, as I know you did as well, likely
heading back to Coastal West Africa, there are places where we
need to show this kind of prioritization.
I think it is off to a slow start, and I am concerned about
the lack of active senior engagement from DOD. I want to make
sure this isn't just viewed as another foreign assistance
program, but instead is a framework that prioritizes State's
leadership. What are you doing to get this off the ground
right? How can I help?
Secretary Blinken. Yes. I agree with you. This is a
critical framework for us, and I think it has the very strong
merit in making sure that we have a holistic, comprehensive,
whole-of-government approach to dealing with fragility, because
we know that just focusing on any one piece of this, security,
foreign assistance, you take it, is not enough, doesn't answer
the mail. And that is why I think this is a--was a very welcome
thing.
Yes, we have been working intensely on this. And what I can
tell you today is that I think very, very imminently
forthcoming, are the actual approved country plans by the
President. So I think that will be an important step forward.
And as I said, I think that is imminent.
Senator Coons. Perhaps we will have another conversation as
soon as those are out about how to better engage DOD at a
senior enough level that it moves the needle. Thank you. The
last thing--I am sorry, I have one more.
Secretary Blinken. Yes, please.
Senator Coons. We have worked hard together to provide
robust assistance to Ukraine, in fact I think this has been
President Biden's best chapter, in a very long career public
service, really marshaling the resources of the world to
deliver from sanctions, to humanitarian, to economic, to
military assistance as Ukraine continues to fight bravely.
Are we doing enough to ensure proper oversight of our
assistance, and to avoid an unforced error, a challenge to
sustaining our assistance, through a lack of accountability and
transparency?
Secretary Blinken. So again, I couldn't agree with you
more. This is something we are intensely focused on, precisely
because we have an obligation to make sure that the taxpayers'
money is being used the way it was intended to be used. And
also we certainly don't want to give those who may not want to
sustain the support, reason to move us in that direction.
So we have been intensely focused on this. I have got on
the ground, right now, in our Embassy in Kiev, 45 people whose
responsibility it is to oversee the funds that we are providing
to the Government of Ukraine. That is just on the State
Department side. DOD has its own people on the ground including
at our Embassy, to make sure that the military equipment that
we are providing, is being used in the right way. The system
that is in place is actually a very good one. Basically when it
comes to direct budget support goes through--most of it goes
through the World Bank. The World Bank has a system where the
money is dispersed to reimburse, based on receipts and approved
expenditures----
Senator Coons. Right.
Secretary Blinken [continuing]. The money. The Office of
the Inspector General did its first report on this, that just
came out a few weeks ago, and it found--and I don't want to
quote it directly, but the bottom line finding was that there
is--we got very good marks on the oversight, and making sure
that the money is being spent well, and that the processes are
in place to ensure that.
At the same time, there is also third-party validation,
Deloitte is working within the Ministry of Finance in Ukraine,
to make sure that it has the systems in place, to make sure
that the money is being well used.
And the final thing I will say is this: We have seen
President Zelenskyy go at challenges of corruption, or misuse
of funds in the government with a sledgehammer, removing very
senior officials across multiple ministries who, allegedly,
were involved in either corruption, or improper oversight of
funds. So I take that as a very good sign, that not only are we
seized with it, but the Government of Ukraine is too.
Senator Coons. You talked with two different members about
a reforestation in Brazil and the Amazon.
Secretary Blinken. Yes.
Senator Coons. And the importance of addressing climate in
a meaningful way. One of the areas I think we could come
together is around reforestation and conservation.
Secretary Blinken. Mm-hmm.
Senator Coons. Improving the management of wild and open
spaces that are not yet overrun by people and poachers,
particularly in South America and in Africa. A group of us, led
by Senator Graham and me, but four others, introduced the U.S.
Foundation for International Conservation Act. It would,
principally, draw in philanthropic and private individual
donations, set up a board that would have U.S. Government
experts in the field, and donors, prioritizing these funds for
the long-term preservation of spaces that are genuinely at
risk.
Are you aware of it? Is it something you might support? Is
it something we could work on together?
Secretary Blinken. I need to look at this very carefully.
As you have described it certainly sounds like something that
we would want to support. Let me look at the details and come
back to you.
Senator Coons. Okay.
Secretary Blinken. But I think there is a lot of merit to
that, particularly when it comes to making sure we are engaged
now in places that are still open to being secured and
preserved. So I would welcome working on that.
Senator Coons. You just released the Department's Annual
Country Reports on Human Rights Practices.
Secretary Blinken. Yes.
Senator Coons. Closing question: Where have we made the
most progress? What have we left undone? What should we do in
the next 2 years to advance human rights?
Secretary Blinken. So you know, if you look at the report I
think it is--let me say diplomatically--a mixed picture. We
continue to see democratic backsliding, and backsliding on
human rights in a number of countries, something that we call
out very clearly in the report. And you know, one of the things
that is so important about the report is we apply the same
lens, the same prism, to friends, to competitors, to
adversaries across the board; and of course we acknowledge our
own challenges in that.
At the same time, I think the report points out that in a
number of places we have seen genuine progress, important
progress. I think there are a number of countries, for example,
where looking at some marginalized groups that have been
particularly victimized, like the LGBTQI+ community, there are
some countries where we have actually seen real progress in
upholding or protecting their rights. Just as there are other
places where that continues to backslide in a significant way.
So it is a mixed--I think it is a very mixed report, but
what is important about it is, it continues to put a spotlight
on these challenges, with the imprimatur of the United States
Government on it. I think it is a way of--strongly encouraging,
countries to take steps that they need to take to improve the
human rights picture.
It is one of the reasons, by the way, that every year when
we do this, I think it is incumbent upon me to go and present
the report. I do that in front of our media in the State
Department Briefing Room, just to make sure that people
understand that this really comes from the Secretary of State
on behalf of the President of the United States. And it is
something that we attach tremendous importance to.
Senator Coons. Thank you. Mr. Secretary, thank you for your
leadership. Thank you for two hours of high energy, and
engaging testimony. I know you have another session in front of
our authorizing committee, the Foreign Relations Committee
later today. I think most importantly you make a compelling
case for the urgent national security-based need to invest more
robustly in our diplomacy and development.
So I look forward to working with you, together, to see
what we can move forward and get passed this year. I will just
say to the colleagues who have joined, we had, I think, a dozen
senators participate at different points. This was a good and
constructive hearing.
Senator Hagerty had information related to the Vulcan case.
Secretary Blinken. Yes.
Senator Coons. The seizure of a port that he would like
added to the record. So ordered. And the hearing record will
remain open for written questions until 5:00 p.m., Wednesday,
March 29.
[Information follows:]
ADDITIONAL COMMITTEE QUESTIONS
[The following questions were not asked at the hearing, but
were submitted to the agencies for response subsequent to the
hearing:]
Questions Submitted to Secretary Antony Blinken
Questions Submitted by Senator Jeanne Shaheen
Question. The Black Sea is clearly of geostrategic importance to
Putin, but the United States and the broader transatlantic community--
including NATO--have failed to successfully push back on Putin's
expansionist agenda toward the Black Sea. Will the relevant State
Department officials make themselves available to testify at the Europe
Subcommittee to discuss the strategy once it is issued to Congress?
Answer. Yes, I will ensure the relevant officials are available to
testify on our U.S. Black Sea strategy once it is submitted to
Congress. The United States has an enduring interest in the Black Sea
region and we are working on a strategy that will strengthen our
political, security, economic, and energy cooperation with the region
and promote democratic resilience.
Question. Sometimes the loudest and most extreme voices make
national headlines, overshadowing the less news-worthy fact that the
majority of this Congress remains firmly in support of Ukraine's war
against Russia's aggression. How is the Biden administration supporting
the Ukrainian government's efforts to focus on these reform efforts for
successful membership into the European Union while engaged in a full-
on war with Russia?
Answer. We welcome Ukraine's EU candidacy and support the Ukrainian
government's efforts to advance necessary institution-building in line
with Ukraine's European path. In our engagements with Ukraine's
government, we have consistently emphasized the importance of
inclusive, transparent, and accountable democratic institutions. We are
also providing technical assistance to increase judicial independence,
foster greater adherence to the rule of law, and counter systemic
corruption.
Question. We are all closely watching the implications of President
Xi's visit to Moscow recently. I know that you met with your Chinese
counterpart in Munich last month. What outcomes of the Xi-Putin summit
hold the greatest national security implications for the United States?
Answer. President Xi's visit to Moscow was further evidence that
the PRC continues to align with Russia as Moscow wages its brutal war
against Ukraine. At the Munich Security Conference, I made clear there
would be real consequences in our relationship if the PRC were to
provide Russia lethal assistance or systematic assistance evading
sanctions. We have already sanctioned the PRC firm Spacety for
providing satellite imagery to Wagner forces in Ukraine, and we
continue to monitor this space very closely.
Question. To what extent will Xi leverage China's influence on
Russia to encourage Ukraine to pursue a peace deal?
Answer. The United States welcomes any initiative that advances a
just and durable peace in Ukraine, no matter the author. The PRC issued
a 12-point position paper on Russia's war in Ukraine, which includes an
essential point: respect for the sovereignty and territorial integrity
of all countries. We call on President Xi to advocate for this key
point, which necessarily includes the withdrawal of Russia's forces
from Ukraine's sovereign territory, consistent with the UN Charter.
Question. I appreciate that, very early in its tenure, the Biden
administration rescinded the ``global gag rule'' of the Trump
administration, which prohibits foreign NGOs from using separate, non-
U.S. funds to provide legal abortion services. But simply rescinding
the dangerous policy is not enough. How are you working with USAID
administrator Samantha Power to ensure that the administration's policy
is clear to all partners, including other countries, multinational and
nongovernmental organizations as well as the implementing organizations
on the ground that provided much needed services to women?
Answer. The Department of State continues to coordinate closely
with USAID to ensure full implementation of the Presidential Memorandum
on Protecting Women at Home and Abroad. Our collaboration to
demonstrate the administration's commitment to sexual and reproductive
health and rights, including in relation to policy clarification,
extends to our partnerships with various international organizations
and U.S. Missions around the world.
Question. Two years ago, President Biden nominated Geeta Rao Gupta
to be Ambassador At Large for Global Women's Issues. Given the
rollbacks on gender equality around the world, including here at home,
how can the United States continue to be a human rights leader in this
area?
Answer. Over the past 2 years, the Department has released the
first-ever strategy on women's economic security, updated its global
gender-based violence strategy, and continues to implement the Women,
Peace, and Security agenda. We demonstrate U.S. leadership through
multilateral engagement in the UN Commission on the Status of Women,
targeted programs such as the SHE WINS Rapid Response Fund, and public
diplomacy through the International Women of Courage Awards. Senate-
confirmed leadership is important to the continued success of these
initiatives.
Question. Within the State Department, how do you ensure that
gender issues are mainstreamed across every sector of the State
Department?
Answer. The Department's Action Plan for the U.S. National Strategy
on Gender Equity and Equality identified entry points for better
integrating the perspectives of women and girls in institutional
policies and practices. This work is ongoing as the Department and
USAID strive to meet the President's budget request of more than $3
billion for foreign assistance related to gender equality. The
Department regularly convenes foreign assistance Community of Practice
sessions and has strengthened our gender equality training and
analytical tools to build the capacity of Department personnel.
Question. The Women, Peace and Security Act makes it a U.S.
priority to protect and support women's roles in peace negotiations and
conflict resolution around the world and within the U.S. government.
The Office of Global Women's Issues does the important work of
promoting WPS in U.S. policy around the world, but who in your
department is tasked with ensuring that the tenets of WPS are upheld
within the Department of State?
Answer. The Ambassador-at-Large for Global Women's Issues (S/GWI)
is the senior official for Women, Peace, and Security (WPS)
coordination; and works closely with Department leadership to oversee
integration of WPS in U.S. foreign policy and assistance. S/GWI
established and regularly convenes the Department-wide WPS Steering
Committee to exchange information on progress, challenges, and lessons
learned. The U.S. is co-chairing the UN Women WPS Focal Points Network
for the first time in 2023; the S/GWI Ambassador-at-Large serves as the
U.S. government Focal Point.
Question. What role does the Office of Diversity and Inclusion play
in ensuring that women at the Department of State have access to the
resources and opportunities needed?
Answer. The Department's Office of Diversity and Inclusion promotes
the principles of accountability and transparency as it works to
advance issues of diversity, equity, inclusion, and accessibility for
all Department employees, including women. The Office is currently
working with key stakeholders to develop a policy to facilitate the use
of lactation devices within controlled access areas, an issue of
particular interest to working mothers. Ambassador Abercrombie-
Winstanley would be happy to discuss with you.
Question. Today, both Sweden and Finland are on the cusp of NATO
membership, but two countries hold up their membership ambitions;
Hungary and Tuerkiye. Ahead of the Vilnius Summit, what deliverables
does this administration hope to achieve?
Answer. The administration continues to urge Hungary and Turkiye to
ratify Finland's and Sweden's accession to NATO at the earliest
possible opportunity before the 2023 NATO Summit in Vilnius. Finland's
and Sweden's accession will strengthen NATO's collective defense. The
administration also supports an updated defense investment pledge;
enhanced support for Ukraine; implementation of NATO's updated plans
for collective defense; and enhancing NATO's partnerships including
with the Asia Pacific as Vilnius deliverables.
Question. I remain committed to working with the administration to
ensure that peace is upheld in Bosnia; supporting their democratic
reform agenda is an integral component in bringing them closer to EU
and NATO membership. To what extent to you envision the funds requested
by the administration for the Western Balkans will include new
initiatives to enhance the cyber defenses of this region?
Answer. The Biden administration is actively working to ensure our
alliances reflect and respond to the world we face. As part of the
fourth Ukraine supplemental appropriation from Congress, we plan to
allocate $50 million in cybersecurity support to the Western Balkans.
This includes a recent $25 million pledge to Albania, with an
additional $25 million yet to be allocated. We recognize the importance
of cybersecurity to the stability of the region and NATO's collective
security and will leverage our technical assistance and expertise to
strengthen the cyber capabilities across the Western Balkans.
Question. Lukashenka continues a brutal crackdown on the Belarusian
people; a recent news article reported that Lukashenka is now targeting
therapists to snitch on ``pro-Ukraine'' patients to suppress partisan
activity. What additional measures are under consideration to prevent
Lukashenka's further oppression of the Belarusian people?
Answer. Since the fraudulent 2020 election, we have levied
sanctions and visa bans against the Lukashenka regime for its brutal
crackdown against the pro-democracy movement, flagrant human rights
abuses, and facilitation of Putin's full-scale invasion of Ukraine. As
these acts persist, we continue to examine new targets, and to
coordinate with our partners and allies, to impose additional costs on
the regime for its repression of the people of Belarus and its ongoing
support for Russia's unprovoked and illegal war against Ukraine.
Question. In last year's NDAA, the HAVANA Act was expanded to
ensure that all relevant agencies received the authority to designate
AHI's to ensure that all affected individuals could receive access to
this payment. Do you have the funds and resources in place to ensure
that this legislation is fully implemented and that the victims receive
treatment?
Answer. Under the law, I continue to hold the authority to
designate as ``other incidents'' reports of anomalous health incidents
that occurred to individuals under Chief of Mission security
responsibility. For HAVANA Act payment requests, I have delegated this
authority to the Under Secretary of Management. The State Department
has sufficient resources to ensure that the HAVANA Act is fully
implemented for our employees and their family members, and that they
receive appropriate treatment.
The State Department is working with other departments and agencies
to help them facilitate their rules and processes for reviewing HAVANA
Act payment requests.
Question. After widespread protests against the Georgian
Parliament's consideration of a foreign agent law, it is clear that we
need to revisit our policy toward Georgia and reinvigorate our approach
toward the country. Is the State Department considering any measures to
apply necessary pressure on those responsible for actively working
against Georgia's Euro-Atlantic ambitions?
Answer. The United States does not preview designations or
sanctions in advance. However, the Department of State will use Section
7031(c) visa restrictions and all other appropriate measures to promote
accountability when we have sufficient, credible information to do so.
Question. Will the administration commit to a full review of our
policy toward Georgia?
Answer. Our policy toward Georgia remains the same, and we review
our strategy to achieve our policy on an ongoing basis. We have made
our concerns about democratic backsliding very clear to the government.
We remain steadfastly committed to supporting the people of Georgia's
Euro-Atlantic aspirations. The United States continues to urge Georgia
to implement the necessary reforms to achieve EU candidate status. We
firmly support Georgia's NATO aspirations. We continue promoting the
vital democratic reforms that are essential for EU candidacy. Such
reforms also are essential to NATO accession, as NATO is a values-based
political-military alliance.
Question. I am proud to have both the National Visa Center and the
National Passport Center in Portsmouth, New Hampshire. It is to
everyone's benefit that both centers operate efficiently, which is why
I welcome the inclusion in the President's request for additional
funding to improve consular services. What efforts are being undertaken
at the NVC to reduce the immigrant visa backlog and better communicate
to Afghan SIV applicants?
Answer. The National Visa Center has eliminated all internal
immigrant visa pre-processing and public inquiry backlogs. NVC is using
data-driven analyses to help posts adjudicate immigrant visas more
efficiently and schedule more applicants sooner. NVC is working with
posts that have large pandemic-driven backlogs to inform backlog
elimination plans. NVC is also working closely with the Department's
Afghan Evacuation Coalition to improve communications with Afghan SIV
applicants about how, when, and where their cases will be scheduled.
Question. I have worked closely with Democratic and Republican
administrations to bring home Americans wrongfully detained or taken
hostage abroad. Instead of terrorist cells, increasingly we are seeing
foreign governments unjustly detain Americans to use for their own
malign intentions. Will you commit to working with Congress to conduct
a review of U.S. hostage and detainee policy to ensure that the U.S.
government is ready to meet the evolving challenge of ensuring that all
Americans are brought home safely?
Answer. I am committed to working closely with Congress on this
issue, and my team has worked hard to ensure Congress is kept abreast
of our engagements and initiatives as an equal partner in our foreign
policy making. There is no higher priority than the safety and security
of U.S. citizens around the world, including those who may be
wrongfully detained or held hostage.
Question. One of my constituents alerted me to a lingering inequity
affecting some 250 Foreign Service employees that dates back to 2014,
when the State Department did not pay the compensation traditionally
awarded to employees who were recommended for promotion but who fell
below the cutoff. While employees in the same category in 2013, 2015
and 2016 were later retroactively paid, there is one group who have
been forgotten. As you can imagine, these employees have not forgotten.
What is the Department doing to honor the Department's commitment to
its workforce and ensure these forgotten employees are fairly and
expeditiously compensated? May I seek your assurances that you will
direct the Department to use its resources to remedy this outstanding
payroll issue?
Answer. The American Foreign Service Association (AFSA) filed four
``implementation disputes'' against the Department's awarding of
Meritorious Service Increases (MSIs) to less than 10 percent of the
eligible employees, alleging that the Department violated the 2013,
2014, 2015, and 2016 Selection Board Procedural Precepts. The Foreign
Service Labor Relations Board (FSLRB) held in the 2014 MSI case that
``the plain meaning of the agreement is that the Agency may award MSIs
to 10 percent or less of the eligible employees.'' The FSLRB decision
fully resolved the 2014 MSI case which involved approximately 270 MSIs
with an estimated risk liability of over $2.5 million.
However, in the subsequent 2015 and 2016 MSI cases, the FSLRB ruled
in AFSA's favor in a split decision. That decision, which the
Department contends was wrongly decided, does not disturb the
resolution of the 2014 MSI case in the Department's favor. Therefore,
the Department declines to apply the FSLRB's incorrect interpretation
of the law to effectively overturn the FSLRB's earlier, correct
interpretation in the 2014 MSI case.
Question. At a time of significant global challenges from
disinformation and pandemics to migration and climate change, and
amidst rising strategic competition from China and Russia, I believe
it's more important than ever to expand international people-to-people
exchanges to develop new partnerships, share American values, and
increase mutual understanding worldwide. If people-to-people exchanges
are essential to achieving our near and long-term U.S. foreign policy
objectives, how does the administration justify decreasing funding for
core academic, professional, and cultural exchange programs for fiscal
year 2024?
Answer. The Department's FY 2024 Request for ECA programs is $783.7
million, $6.2 million above the fiscal year 2023 Adjusted Enacted
level. Central to this request is Exchanges Support, which pays for all
of the bureau's administrative expenses from staff salaries to IT, as
well as staff travel for program oversight. Increased funding for
Exchanges Support will help ECA best support the workforce and program
implementation, including staff monitoring to ensure the safety and
security of our participants. Strategic alignment of program delivery
with the necessary administrative support required certain offsets
reflected in the President's budget.
Question. How will the Biden administration optimize our
competitive advantage vis a vis China, Russia, and other countries if
we continue to underinvest in the State Department's Bureau of
Educational and Cultural Affairs and these proven soft power programs?
Answer. With its global reach and proven models for exchanges, ECA
is well positioned to help ensure that U.S. embassies and consulates
have the tools necessary to build alliances and maintain U.S.
leadership. For instance, exchange program funding supports Ukraine
through cultural heritage protection efforts, counters Russian
disinformation, and enables the Department to increase Indo-Pacific
engagement through the expansion of the Young Southeast Asian Leaders
Initiative and English language programming.
Question. The costs associated with global mobility and exchange
have risen steadily over time and more dramatically in recent years.
Exchange organizations who administer these soft power programs are
being asked to do so for a greater number of participants, despite flat
administrative funding, increasing costs and higher required levels of
effort due to, for instance, a rise in safety and mental health related
issues. While I'm pleased that the Biden administration has requested
long overdue funding for internal administrative support, given the
President's requested decrease in funding for fiscal year 24 regarding
core exchange programs, is the State Department sufficiently
considering the needs of its exchange organizations at this challenging
time?
Answer. The Department continues to prioritize the importance of
engagement with foreign publics on behalf of the United States. We
value the essential contributions of exchange organizations to the
success of Bureau of Educational and Cultural Affairs (ECA) efforts and
will continue to evaluate the resources needed to deliver on the
mission these organizations are given. The fiscal year 2024 request
takes into account the need for appropriate program and staff support,
understanding that the inflationary impacts on our limited resources
may mean some reduction in participant numbers. Increases in some areas
are offset by reductions in others to strategically align program
delivery with the necessary administrative support.
Question. The Bureau of Educational and Cultural Affairs has made
it clear that it is committed to maximizing the return on investment
when it comes to exchange alumni, including by supporting their ongoing
development as future leaders through targeted programming that
advances U.S. interests and objectives. Yet, the President's fiscal
year 2024 budget request recommends a decrease of $700,000 in alumni-
related funding. Does the State Department remain committed to
strengthening its engagement with and support of exchange alumni?
Answer. We remain fully committed to continuing and expanding
engagement of exchange alumni. We have expanded resources for alumni
seminars on policy priorities such as democracy, the Indo-Pacific
strategy, and diversity in foreign policy. Alumni engagement is not
only funded by the Bureau of Educational and Cultural Affairs (ECA)
Office of Alumni Affairs, but also within each exchange program's
grant, giving us a range of ways to continue engagement. The funding
request reflects increased support for the workforce and program
implementation, including staff monitoring to ensure the safety and
security of our participants.
Question. Since the start of the pandemic, technology has become
increasingly more important in international exchange program
implementation and is one way to make an exchange experience more
accessible. Investing in and developing virtual and hybrid programming
requires a lot of intentionality in order to be a successful supplement
or complement to traditional in-person exchanges. How will the State
Department support program implementers in integrating virtual and
hybrid components to expand participation and reach new audiences?
Answer. When the pandemic temporarily halted many USG-funded in-
person exchanges, ECA's innovative management of international
exchanges allowed programs and partner organizations to pivot rapidly
to virtual and hybrid models, replicating key components of an in-
person exchange. ECA was able to reprogram funds to support these
partner organizations. As a result, community members acquired critical
technology and training that enabled them to learn and engage in
virtual programming. ECA continues to incorporate lessons learned
during the pandemic and supports virtual engagement that helps reach
new audiences and enhances the impact of in-person exchange programs.
Question. The fisacal year 2023 omnibus included report language
encouraging the Department of State to allocate resources through the
Migration and Refugee Assistance account to provide safe, inclusive,
and quality education for refugee and internally displaced children.
What is the administration's fiscal year 2024 plan to support education
and flexible learning to maintain continuity across situations of
crisis?
Answer. The Department is committed to taking all possible steps to
ensure access to quality, safe, and inclusive education for forcibly
displaced and conflict-affected children. We do this through both
diplomatic engagement and programming. We also remain a steadfast
supporter of Education Cannot Wait, a global fund for education in
emergencies and protracted crises. The Department also participates in
the U.S. Basic Education Working Group, and we look forward to
contributing to the next iteration of the U.S. Government Strategy for
International Basic Education.
Question. The situation in Lebanon is dire. In December, Sens. Bob
Menendez (D-NJ) and Jim Risch (R-ID) wrote a letter to Secretary of the
Treasury Janet Yellen and yourself, calling for the use of sanctions
against Lebanon's financial and political elite for obstructing the
election of a president and implementation of needed financial reforms.
Why has the administration yet to announce any additional sanctions
against corrupt officials in Lebanon?
Answer. I share your concerns about endemic corruption in Lebanon,
officials' reluctance to implement reforms, and stalled presidential
elections. We continue to press Lebanese officials at all levels on
these priorities. In addition to diplomatic engagement, sanctions can
be a useful tool to encourage progress and a warning to those
undermining the rule of law. Our previous designations clearly
demonstrate our commitment to combatting corruption, and we continue to
work with the Department of the Treasury to identify impactful targets.
Question. How is the administration communicating any consequences
if Lebanese parliamentarians elect a president who is not clean,
capable and reform minded?
Answer. The administration continues to stress that Lebanon needs a
president free of corruption who can unite the country and forge a
coalition to implement badly needed reforms. In concert with our
partners in France, Saudi Arabia, Qatar, and Egypt, we continue to make
clear that Lebanese politicians blocking progress on the election of
such a candidate could face negative repercussions--an idea that senior
U.S. officials continue to underscore with Lebanese leaders at all
levels, including via our Embassy in Beirut and in meetings with Saudi
and French partners (September 2022), joined by Qatar and Egypt
(February 2023).
Question. Can you assess our relationship with our European and
Gulf partners, particularly France and Saudi Arabia, on the Lebanon
file?
Answer. We continue to work closely with our European and Gulf
partners--including France and Saudi Arabia--to press Lebanese
officials on the need to expedite presidential elections and implement
reforms. Productive engagements to date include a meeting with Saudi
Arabia and France on the margins of UNGA (September 2022) and a
February 6 meeting in Paris (which also included Qatar and Egypt) aimed
at applying joint pressure on Lebanese officials. We remain in regular
contact with our partners on these issues and look forward to future
engagements.
______
Questions Submitted by Senator Brian Schatz
Question. The Safeguard Tribal Objects of Patrimony (or STOP) Act
of 2021, Public Law No. 117-258, was signed into law in December. The
STOP Act was designed to prevent the international trafficking of
tribes' sacred items. It requires the Departments of the Interior,
Justice, State, and Homeland Security to undertake important and
immediate implementation actions. State, among other things, must
notify foreign nations of the STOP Act's passage so they can monitor
imports and facilitate repatriations under their own domestic laws,
enter into agreements with those foreign nations, and participate in
the STOP Act's interagency working group. What budgetary resources do
you anticipate needing to carry out the Department of State's
responsibilities under the STOP Act?
Answer. The Department is ready to notify and work with foreign
governments to facilitate repatriations under the STOP Act. The
Department also is ready to develop the required trainings and other
programming, in consultation with Tribes and Native Hawaiian
organizations, on the voluntary return of cultural heritage for
Departmental personnel, representatives of Indian Tribes and Native
Hawaiian organizations, and other stakeholders. We are currently
evaluating the resources needed to carry out our responsibilities under
the STOP Act.
Question. The Pacific Islands countries are vital partners, and it
is encouraging to see that the State Department will be expanding its
footprint in the region. However, it is important to recognize that
working in very remote locations poses real challenges for State
Department staff and their families. How is the Department planning to
support staff in the new embassies in the region and what incentives
are you planning to offer to ensure that those posts are adequately
staffed?
Answer. The Department is in the process of enhancing capacity in
Manila to provide management services and guidance to new embassies in
the region, and Embassy Port Moresby and Embassy Suva will continue to
provide Regional Security and Public Diplomacy support. The Department
is establishing positions and tours of duty. In recognition that
standard three-year tours of duty may be difficult to staff, the
Department is in the process of establishing two-year tours and
evaluating available benefits and allowances to further incentivize
employees.
Question. According to the Arms Export Control Act (AECA), U.S.
funded armaments are required to be used for legitimate self-defense
purposes. Do you believe that Israeli government personnel use of
U.S.--origin arms in the course of Palestinian home demolitions, mass
evictions, and settlement expansion would be in compliance with U.S.
law, including AECA, which generally prohibits the use of security
assistance for purposes other than those for which the United States
provided it?
Answer. While the United States remains unwavering in its
commitment to Israel's security, we expect all our allies and partners
to use U.S.--origin arms consistent with U.S. law for legitimate self-
defense and military purposes. Upon the receipt of credible reports of
unauthorized end use by a foreign government, we launch an
investigation to determine an appropriate response and to prevent
future violations.
Question. What systems and processes are in place to ensure that
U.S. funded armaments are in compliance with U.S. law, including
potential AECA violations?
Answer. Whether U.S. funded or not, potential arms transfers are
assessed to ensure that they can be implemented consistent with all
statutory requirements and with the Conventional Arms Transfer policy.
With respect to End Use Monitoring (EUM), we have an ongoing security
relationship with the vast majority of foreign recipients. We are able
to draw on that background to inform future transfers, and, if dealing
with a new partner, we assess all available relevant information to
make the determination. This is an ongoing process, so, as
circumstances arise, reviews may occur before, during, and after
delivery. In addition, Leahy Vetting is applied to all U.S. security
assistance funded transfers.
______
Questions Submitted by Senator Susan Collins
Question. In fiscal year 2023, the Department of Defense began to
transition its Operation Allies Welcome to the Department of State
under Operation Enduring Welcome, which focuses on bringing eligible
Afghans and their families who remain abroad to the United States,
including those remaining in Afghanistan. Responsibility for the
program will require the Department of State to manage multiple
overseas processing platforms for an extended period of time, providing
life support in addition to visa processing. An estimated $4.8 billion
in prior appropriated funds, including $3 billion transferred from the
Department of Defense to the Department of State, are available to
support Operation Enduring Program. Mr. Secretary, how many principal
applicants are currently in the Special Immigrant Visa pipeline, and
what is your best estimate on the time required from start-to-finish
for these applicants?
Answer. As of December 31, 2022, there were over 147,000 principal
applicants in the Afghan SIV pipeline, more than half have submitted
some, but not all, of the required documentation for Chief of Mission
approval, and processing times vary on the complexity of each case. We
are available to discuss with you Enduring Welcome operations and
Afghan SIV processing in more detail. Additionally, the Department
publishes a quarterly report on Afghan SIVs which can be found here:
https://travel.state.gov/content/travel/en/us-visas/immigrate/special-
immg-visa-afghans-employed-us-gov.html#quarterly.
Question. Are you satisfied with this pace?
Answer. No. The Department of State seeks to process Special
Immigrant Visa (SIV) applications and to relocate post-Chief of
Mission, interview-ready SIVs out of Afghanistan more rapidly. The
Coordinator for Afghan Relocation Efforts is working as quickly as
possible to increase its relocation tempo. Many factors in the
relocation process which impact the pace of operations are out of the
control of the U.S. government and our Afghan allies to whom we provide
relocation assistance. We are always available to discuss those factors
with you.
Question. The Department of State operates numerous processing
platforms, including in Qatar. How many Afghans are currently located
at each platform?
Answer. That is correct, the Department's principal processing
location for relocated Afghans is Camp As-Sayliyah in Doha, Qatar. The
Department currently has processing platforms in Albania and Kosovo as
well. The U.S. government is also engaged in case processing for
Afghans at the Emirates Humanitarian City in the United Arab Emirates.
We are available to discuss with you in more detail.
Question. Which other countries have offered to take Afghans in,
and how many has each country taken in?
Answer. Many countries around the world are providing protection to
vulnerable Afghans. According to UN High Commissioner for Refugees,
there are more than 8.2 million Afghans in neighboring countries,
including 4.5 million in Iran and 3.7 million in Pakistan. Of these,
more than 1.6 million Afghans arrived in neighboring countries since
August 2021.
Question. How many principal applicants in the Special Immigrant
Visa pipeline remain in Afghanistan?
Answer. The Office of the Coordinator for Afghan Relocation Efforts
in the Bureau of South and Central Asian Affairs provides relocation
assistance to post-Chief of Mission, interview-ready Special Immigrant
Visa (SIV) cases, provided that the case has undergone pre-travel
vetting, everyone on the case has a valid Afghan passport, the case can
be contacted, and everyone on the case is ready and willing to depart
Afghanistan. We are available to answer questions and discuss specific
numbers of SIV cases that have been relocated, and specific numbers of
SIV cases at other stages of the process.
Question. What is the Department of State's plan to sustain
Operation Enduring Welcome?
Answer. The administration requested a new Enduring Welcome account
in the President's fiscal year 2024 budget to help streamline the
complex relocation operations and meet our enduring commitment to our
Afghan allies. Additionally, CARE continues to hire more staff in order
to meet the needs of the operation as the Department assumes additional
roles and responsibilities under Enduring Welcome this year.
Question. Have annual operating costs been determined and what
resources do you anticipate needing in fiscal year 2025 to sustain the
mission?
Answer. We have not yet determined our annual operating costs. We
expect to have a clearer understanding of our projected long-term costs
by the end of fiscal year 2023, and are available to discuss with you.
Question. At what point does the Department of State consider
``mission accomplished'' regarding Operation Enduring Welcome?
Answer. The U.S. commitment to relocate and resettle all eligible
Afghans is enduring. The Department of State intends to continue the
mission as long as there are eligible Afghans to relocate and resettle.
______
Questions Submitted by Senator Lindsey Graham
Question. My Senate office is not provided direct answers when
inquiring about SIV/P1/P2 cases. My staff has attended a number of case
management calls and, quite frankly, they do not receive answers to
their questions, including regarding case specific questions.
Furthermore, when case inquiries are submitted to the CAREHillInquries
mailbox, my office only receives unhelpful, boilerplate responses. The
information my office receives is of little use, and in turn we have
very little useful information to help provide answers to those who
have submitted cases or reached out for assistance.
Additionally, there was a particular case where I wrote a letter to
the Department of State asking for assistance for an Afghan service
member I served alongside in Afghanistan. My office corresponded with
the Department of State multiple times about his ``case'' and was told
it was being tracked, only to find out this month--one and half years
later--that he never actually had an active case. We have since asked
the Department of State to provide information that we could share with
him on how he can go about submitting a P1 or P2 application. We have
yet to receive a response to this inquiry. Overall, the failure to
provide specific answers to the majority of inquiries submitted by my
office indicates the Department of State lacks a coherent plan of
action to process these cases. This is unsatisfactory and disgraceful,
particularly to those of us who served in Afghanistan. In January 2023,
the Department of State informed my office there was a backlog of over
60,000 SIV applications awaiting Chief of Mission (COM) approval. While
their cases await COM approval, our Afghan allies who fought alongside
us now struggle to provide for themselves and their families, remain in
hiding, and live in constant fear of being hunted down by the Taliban.
Does the Department of State have a comprehensive plan to work the COM
approval backlog? If so, what is that plan?
Answer. The Department continues to prioritize processing cases
through the Chief of Mission (COM) approval backlog by surging staffing
in the office reviewing applications for COM approvals and prioritizing
the most vulnerable Afghans. We continue to coordinate with interagency
partners, such as the Department of Defense, to quickly provide missing
documentation and evidence of qualifying employment. We are also
improving both the efficiency and pace of processing applications for
COM approval, including through bulk verification of applicant's
employment under U.S. government contracts.
Question. What is the estimated time period it will take the
Department of State to clear the COM approval backlog?
Answer. Increased staffing and resources directed towards the Chief
of Mission (COM) approval backlog means in the near future we will be
able to process significantly greater numbers of cases and make
progress toward reducing the COM approval backlog. Because we have not
finished surging staffing and resources, it is difficult to accurately
estimate when the Department will be able to clear the COM approval
backlog. We are certainly available to discuss in more detail with you.
Question. Are there additional resources the United States Congress
can work to provide the Department of State to assist them in working
through the COM approval backlog?
Answer. I am personally committed to keeping our promises to those
who stood by us in Afghanistan. We have surged resources and increased
staff dedicated to SIV processing. The efficient processing and
ultimate resettlement of Afghans continues apace and remains among my
highest priorities. Congress's continued support of our efforts to
resource and staff our team working through the Chief of Mission
approval will help the Department to sustain these efforts.
Question. Since July 2022, my office has been told the United
States Refugee Admissions Program (USRAP) is in the process of
establishing a new Resettlement Support Center (RSC) in Pakistan to
process Afghan P1 and P2 cases. As of December 2022, 7,500 Afghan P1/P2
applicants have relocated to more than 50 countries, and of the 7,500
number, several thousand of those cases are for Afghans in Pakistan.
What is the Department of State doing to process Afghan P1/P2 cases in
Pakistan while they wait for the RSC to become operational?
Answer. The Department remains committed to processing U.S. Refugee
Admissions Program (USRAP) cases for Afghans in third countries,
including Pakistan. We continue to engage at senior levels with
Pakistani officials frequently, both in Islamabad and Washington, on
this issue, and we are actively pursuing all potentially viable options
to enable USRAP processing in Pakistan.
Question. How much longer does the Department of State expect it to
be before the Government of Pakistan grants final approval for the RSC
to become operational?
Answer. We cannot forecast a precise timeline for Pakistan's
approval to begin U.S. Refugee Admissions Program (USRAP) processing
for Afghan applicants. This remains a priority for me, and we continue
to work with our Pakistani counterparts as they evaluate the request,
so we can address any concerns and underscore the benefits of approving
USRAP processing. The Department of State would be happy to brief you
on these issues.
Question. What specific actions is the Department of State taking
to engage the Government of Pakistan on this issue?
Answer. Thank you for your support. We are available to discuss
details with you.
Question. The Department of State has stated they anticipate the
processing of Afghan P1/P2 cases to take approximately 12-18 months. Is
the Department of State exploring options to speed up the processing
times for P1/P2 cases? If so, what are these options?
Answer. The Department's Population, Refugees and Migration (PRM)
Bureau and partners have worked hard to expedite processing of Afghan
P1/P2 cases, particularly at Camp As Sayliyah, where processing times
are now down to 30 to 45 days for individuals without serious medical
conditions or security vetting delays. PRM is working to increase
efficiencies and reduce processing times for USRAP cases globally, with
a goal of reducing processing times from the 12-18-month average down
to 6 months.
Question. Please provide the following information regarding
evacuation flights from Kabul: What is the status of evacuation flights
from Kabul? Are they ongoing, or will they be restarted? If restarting,
when are such flights expected to resume?
Answer. The Office of the Coordinator for Afghan Relocation Efforts
(SCA/CARE) carries out regular movements to relocate eligible Afghans
out of Afghanistan by air and overland routes. Despite a range of
obstacles, CARE's relocation movements have become more consistent and
repeatable over time.
Question. What are/will be the frequency of such flights out of
Kabul?
Answer. Multiple flights take place per week; however, these
movements are sensitive because of the operating environments in
Afghanistan and are subject to conditions and rules in downstream
locations.
Question. How will Afghans be able to manifest themselves onto such
flights?
Answer. The Office of the Coordinator for Afghan Relocation Efforts
(SCA/CARE) immediately manifests every U.S. citizen and Legal Permanent
Resident (LPR) who requests relocation assistance. CARE also manifests
for relocation each post-Chief of Mission (COM) interview-ready SIV
case, eligible interview-ready IV case, and eligible refugee case,
provided that every individual on the case is ready and willing to
relocate. These individuals must have a valid passport, must be
successfully contacted, and must clear pre-travel vetting. Travelers
are contacted by CARE's contact center (in English, Dari, and Pashto)
before a flight.
Question. What will be the number of people these flights will be
able to manifest, on a per flight basis?
Answer. Given the operational sensitivity and the safety of these
travelers, we are available to discuss these numbers with you in
another setting.
Question. Please provide, in a timely manner, specific updates and
estimates regarding the processing time for the following cases:
Rahmanullah Sediqi; Case Number: NVCSIV2021194099.
Answer. Due to the confidentiality of visa records, we cannot
comment on specific cases in this public format. Please forward this
inquiry to [email protected]. Additionally, we are available
to discuss this further with you.
Question. Please provide, in a timely manner, specific updates and
estimates regarding the processing time for the following cases Abdul
Razaq Baray; Case Number: PK-10032094.
Answer. The applicant you reference has an active USRAP case. We
are not able to provide a timeline for case processing. We can provide
you a briefing about this case.
Question. Please provide, in a timely manner, specific updates and
estimates regarding the processing time for the following cases: Farhad
Ayoubi; Case Number: NVCSIV2021340125.
Answer. Due to the confidentiality of visa records, we cannot
comment on specific cases in this format. Additionally, we are
available to discuss this further.
Question. Please provide, in a timely manner, specific updates and
estimates regarding the processing time for the following cases: Basir
Quraishi; Case Number: PK-10022836.
Answer. The applicant you referenced has an active USRAP case. We
are not able to provide a processing timeline. We can provide you a
briefing about this case.
Question. In 2019, travelers spent $16.9 billion in South Carolina,
which supported nearly 140,000 jobs. Currently, overseas visitation to
South Carolina remains 21 percent below 2019 levels, in part due to
long visa interview wait times. Expanding this to apply to the United
States, 35 million (43 percent) of international visitors and $120
billion in spending (50 percent) came from countries where a visa is
required to enter the United States in 2019. In 2023, Tourism Economics
forecasts that American businesses would attract 2.6 million fewer
international visitors and $7 billion less in spending as a result of
international travelers being unable to obtain a visitor visa in time
to travel to the United States. Is the Department of State tracking at
which consulates and in what countries it takes the longest to get a
visa interview? If so, can you explain what the Department of State is
doing to improve the situation at those consulates and in those
countries that are experiencing wait times above 180 days?
Answer. Long wait times for interviews apply only to first-time
tourist visa applicants--a very small percentage of entries to the
United States. In all other categories important to the U.S. economy--
students, temporary workers, repeat travelers, and maritime crew--wait
times are at prepandemic levels or lower. We are available to discuss
further with you.
Question. Can the Department of State provide an assessment as to
what impact long interview wait times have on the recovery of
international inbound travel?
Answer. Only eight of the top 20 inbound visitor nationalities
require a U.S. tourist visa. In the first 5 months of fiscal year 2023,
we issued 18 percent more nonimmigrant visas (NIV) globally than during
the same period in fiscal year 2019. Today there are almost 60 million
valid multiple-entry visitor visas and border crossing cards in
circulation worldwide. This huge pool of prospective travelers with
valid visas, and our continued visa issuance trends suggest the reasons
for the slow recovery of inbound travel are complex--for example, there
are reduced levels of inbound travel by citizens of Visa Waiver Program
countries, who make up the majority of U.S. tourists.
Question. What resources does the Department of State need to lower
interview wait times?
Answer. Since early 2022, the Department reduced gaps in consular
staffing overseas caused by the drop in fee revenue due to the
pandemic's near-shutdown of international travel. With the resurgence
of travel, the Bureau of Consular Affairs' financial situation has
improved. The Department is striving to ensure that as many
adjudicators as possible are assigned to overseas positions to reach
worldwide pre-pandemic staffing by the end of this year. Maintaining
expanded spending authorities and additional fee flexibilities would
help allow for continued innovation and additional hiring.
Question. The Department of State is currently facing an
unprecedented backlog of passport applications while at the same time
experiencing passport processing times that are close to reaching a
historic high. As a result, many citizens are missing travel, or in
certain cases, unable to make emergency travel, due to a lack of
counter service walkthrough appointments. Looking at the Southern
United States, the Atlanta Passport Agency is the only agency to offer
in-person counter service walkthrough appointments near Georgia, South
Carolina, North Carolina, Tennessee and Alabama. The population of
these 5 States that the Atlanta Passport Agency has to service is
roughly 38.5 million. Meanwhile, California alone has three passport
agencies in their State to service their roughly equivalent population
of 39.2 million. To alleviate this problem, I proposed language in the
Department of State, Foreign Operations, and Related Programs
Appropriations Act, 2023 that required the Secretary of State to
consult with the Committees on Appropriations on the operations of the
Charleston Passport Center, particularly the need for in-person
constituent appointments. During this consultation, the Department of
State informed the Committee that opening up the Charleston Passport
Center for in-person counter service walkthrough appointments would
present a number of challenges. Please provide the following, in a
timely manner: A detailed explanation of why opening up the Charleston
Passport Center for in-person counter service walkthrough appointments
presents challenges to the Department of State, including an
enumeration of such challenges.
Answer. The Charleston Passport Center (CPC) is located on a secure
government compound, home to non-public-facing operations of eight
State Department offices. Opening counter operations at CPC would
divert resources from other Passport priorities and divert CPC's focus
from specialized service (for Federal and military employees and their
families) and existing economies of scale. Construction to add counter
service would disrupt CPC operations for years. In 2021, we calculated
that 99.4 percent of the U.S. public resided within 25 miles of an
acceptance facility. We are available to answer any other questions you
have about the CPC.
Question. Please provide the following, in a timely manner: A
detailed plan addressing how in-person counter service walkthrough
appointments passport appointment backlogs can be prevented in the
Southern United States, particularly at the Atlanta Passport Agency.
Answer. The Department's modernization efforts, including Online
Passport Renewal and other initiatives, will offer faster processing
for emergency cases and potentially spare customers an agency visit
altogether. In 2021, we calculated that 99.4 percent of the U.S. public
resided within 25 miles of an acceptance facility. Travelers who can
plan ahead do not need to visit a passport agency; they may apply by
mail or at an acceptance facility. While we anticipate moving the
Atlanta Passport Agency to larger space in a few years, systems
modernization will benefit your constituents more.
Question. Please provide the following, in a timely manner: An
estimate of the number of United States citizens who will be unable to
have their passport processed before their scheduled overseas trip due
to the failure to open up an additional processing center for in-person
counter service walkthrough appointments in the Southern United States.
Answer. We do not collect or verify data on the number of U.S.
citizens who may have potentially missed their trip. From January 1 to
April 6, our staff served more than 269,000 customers with emergency or
urgent travel at our counters and issued more than 4.7 million
passports for customers who applied through the mail. We strongly
recommend customers apply early, and by mail or at an acceptance
facility, and undertake public messaging campaigns to this effect.
______
Questions Submitted by Senator John Boozman
Question. According to the World Food Programme, Ukraine produced
enough to feed 400 million people prior to the Russian invasion of
Ukraine. The war in Ukraine has not only caused tragic loss of life and
catastrophic damage, but has also fueled the global food crisis,
leaving those millions of people dependent on Ukraine's food supply
vulnerable to starvation. The Black Sea grain deal has been integral to
vulnerable countries, and was recently extended 60 days. However, the
deal faces renewal again shortly, in mid-May. Can you elaborate on how
the negotiations to renew are proceeding, and if this is a State
Department priority?
Answer. Our position has always been clear: The world needs the
Black Sea Grain Initiative (BGSI). The United States strongly supports
the efforts of Secretary-General Guterres, in partnership with Turkiye,
to expand and extend this life-saving Initiative. Russia continues to
use global food supplies as a weapon of war by threatening the future
of the BSGI, and this must be resisted. The United States welcomed the
UN's announcement on March 18 that the Initiative had been extended and
we continue to work with the UN and other countries to extend and
expand the grain deal.
Question. Additionally, can you explain the biggest obstacles
facing a long-term renewal?
Answer. The Black Sea Grain Initiative renews automatically for
120-day terms unless one of the parties' objects. We have seen comments
from Russian officials casting doubt on their interest in sustaining
the Initiative; we have also seen Russia obstruct operations and, once,
suspend its participation in the Initiative. Russia has consistently
spread misinformation about the agreement's impact on global food
security. We have worked extensively to combat correct Russia's false
claims, including that its food and fertilizer are impeded by Western
sanctions.
Question. Food Security East Africa: Last fall, I traveled to East
Africa and saw the impact firsthand of conflict in the Horn of Africa,
which leads many to seek refuge in Kenya and other surrounding
countries. However, the unrelenting drought in this region means all
countries face a significant food shortage. These and other vulnerable
countries depend on UN humanitarian response agencies such as the World
Food Program and US foreign hunger assistance programs be able to feed
their people during a crisis. What programs, tools, and partnerships
are the State Department and USAID relying on now to address this
global hunger crisis, and what so far has been most effective?
Answer. The State Department and the U.S. Agency for International
Development (USAID) use a multi-tool approach to direct interventions
to address global food insecurity. A combination of short-term
emergency assistance and longer-term systemic support, through programs
like Feed the Future, are designed to alleviate the acute suffering and
contribute to sustainable farming practices in the Horn of Africa and
throughout the Global South. State and USAID depend on our investments
through the UN system and our partnerships with the African Union to
implement programs and encourage other major donor countries to provide
funding. The combination of all our efforts is the most effective
response.
Question. As you know, Hunger causes civil instability and drives
conflict, and is a national security concern. For example, China has
made significant investments in Africa through the Belt and Road
Initiative. I hear from many leaders in Africa that they want to work
with the U.S., but we are never at the negotiating table, unlike China.
Has China used the global food crisis as an opportunity to make deals
with vulnerable countries, both in Africa and elsewhere, that could
threaten national security? If so, what has been the administration's
response?
Answer. The PRC's efforts to increase its presence and influence in
Africa are intended to advance and ultimately export its domestic
political, security, information, and economic goals as well as justify
its domestic agenda on the world stage. We push back on corrupt or
coercive practices that damage our interests and those of our African
partners while offering alternatives in collaboration with our African
and other partners. We do not ask our partners to choose between the
United States and the PRC. Instead, we give them choices on how to
deliver results to their citizens.
Question. As you also know, the renewal of our Compacts of Free
Association is due this year. Arkansas has the largest population of
Marshallese than anywhere else in the U.S. Can you provide an update on
how those negotiations are proceeding?
Answer. The Compact-related negotiations with the Freely Associated
States are crucial to deepening these strategic partnerships in support
of a free, open, and secure Indo-Pacific. Having signed Memoranda of
Understanding reflecting the levels and types of future U.S. assistance
for each country that we intend to request, we are now focused on
negotiating the agreement texts. The administration then expects to
submit a proposal for implementing legislation with necessary
authorities and mandatory appropriations to fund the costs of future
Compact assistance for the expected 20-year period.
Question. Additionally, can you elaborate on other programs and
plans the administration is planning to implement in the Indo-Pacific,
and how it would lower China's influence?
Answer. The fiscal year 2024 budget request advances partnerships
in the Indo-Pacific and supports initiatives to out-compete the
People's Republic of China. The request includes $2.1 billion in
discretionary funding for the Indo-Pacific, $7.1 billion for funding
related to the Compacts of Free Association, which includes $6.5
billion in economic assistance and $0.6 billion to support provision of
postal services, and $2 billion over 5 years in mandatory funding to
support game-changing investments in the Indo-Pacific and support
partners' efforts to push back against predatory activities.
______
Questions Submitted by Senator Bill Hagerty
Question. U.S. energy, especially natural gas, played an outsized
role in preventing the worst case outcomes for European energy markets
last year. The U.S. is the world's largest producer of natural gas, the
largest exporter of liquefied natural gas, and as of last year, the
largest supplier of LNG to Europe. In March of last year, the Biden
administration and the E.U. Commission issued a joint commitment
focused on enhancing energy security, which included many commitments
from the United States to remain a reliable long-term supplier of
energy to our allies overseas. One of those Commitments was to maintain
``an enabling regulatory environment'' for natural gas infrastructure
projects. Similar commitments have been made to the UK and Japan. In
fact, it is quite difficult to build energy infrastructure projects
here in the United States. Do you agree that U.S. LNG has been critical
to the world's energy security, and do you believe it will remain
critical going forward?
Answer. U.S. liquefied natural gas (LNG) has played a pivotal role
in Europe's energy security. Our LNG exports to the EU and the UK
increased by 140 percent over the full year of 2022 to over 70 billion
cubic meters. Additionally, about 64 percent of total U.S. LNG exports
went to the UK and EU in 2022--and this represented about half of the
region's LNG imports. LNG supplies from the United States and other
reliable suppliers, and Europe's increasing focus on energy efficiency,
will help Europe meet next winter's demand peak. U.S. LNG will continue
to play an important role in Europe's energy security.
Question. What has the administration done, or planned to do, to
ensure we can meet our commitments to our allies?
Answer. We are engaging our allies multilaterally through entities
such as the International Energy Agency, regionally through forums such
as the U.S.--EU Energy Council, and bilaterally through initiatives
like the U.S.--Japan Energy Security Dialogue, to advance energy
security and the energy transition. The United States also became the
world's largest LNG exporter in 2022, sending record amounts of gas to
Europe, and we are working with our EU partners to advance energy
efficiency and to accelerate the energy transition. We will continue to
support the energy security of our allies and partners.
Question. When you last appeared before the Senate Appropriations
Committee in April 2022, we discussed the importance of reliable access
to cost-effective sources of energy for like-minded partners in the
Quad. You said that was an interesting idea and that you would come
back to me. Since then, Japan has brought up energy security and
investment with, only to be rebuffed by many G7 members like Germany,
who are pursuing the exact same strategy. Has the State Department
created an energy security working group within the Quad since your
answer last year?
Answer. The Department of State is working with Quad partners to
increase our collective energy security by focusing efforts to develop
and diversify critical minerals and energy supply chains, while
promoting greater investment to advance the energy transition that will
increase access to cost-effective sources of energy. These efforts
complement G7 and Indo-Pacific Economic Framework priorities to enhance
energy security, decarbonization, and access.
Question. Does the Biden administration support having energy
security as part of this year's G7 agenda, including the role of U.S.
natural gas in strengthening that energy security?
Answer. The United States is working closely with Japan, the G7
President, on enhancing global energy security, which includes a role
for U.S. natural gas, particularly in the context of Russia's ongoing
war of aggression against Ukraine. The administration is in close
consultation with Japan and other G7 partners to advance global energy
security and the clean energy transition simultaneously. Japan, as both
a major energy consumer and technological innovator, will play a vital
role in these closely intertwined global efforts.
Question. Wouldn't the G7's refusal to expand LNG investment
prolong Europe's and India's dependence on Russian energy and help
finance President Putin's war against Ukraine?
Answer. G7 Leaders will meet in Hiroshima May 19-21. We are in
close consultation with Japan and other G7 partners to advance global
energy security and the clean energy transition simultaneously. Japan,
as both a major energy consumer and technological innovator, will play
a vital role in these closely intertwined global efforts. There is a
role for LNG, particularly in the context of Russia's ongoing war of
aggression against Ukraine.
Question. Chinese carriers currently use Russian airspace to arrive
and depart from the United States. Chinese carriers pay the Russian
government to access Russian airspace. The use of Russian airspace
presents safety concerns for U.S. passengers on these flights in the
case of a diversion for mechanical, medical, or other reasons.
Moreover, Chinese use of Russian airspace gives Chinese carriers
significant competitive advantages over U.S. passenger carriers and
workers as the use of Russian airspace significantly reduces flying
time, costs, fuel, and allows Chinese carriers to load their planes to
maximum capacity. The use of Russian airspace also provides funding for
the war in Ukraine. Under a Department of Transportation Order from
2021 current flights between the United States and China are limited to
eight roundtrips per side. If the existing U.S.-China bilateral
agreement comes back into full effect, Chinese carriers would be
entitled to 180 weekly roundtrips from three major cities in China to
the U.S., whereas U.S. carriers would have 154 weekly roundtrips. What
are the State Department's plans on this issue?
Answer. The Department is concerned about third country air
carriers that operate flights to and from the United States via Russian
airspace. We continue to track and coordinate closely with interagency
colleagues to identify potential responses consistent with domestic and
international legal obligations. We continue to pursue a measured
approach to the increase of flights in the U.S.-PRC aviation market
that ensures parity and a level playing field for both countries'
carriers.
Question. Will you commit not to increase flights from China above
the current limits until the Chinese government agrees not to utilize
Russian airspace to or from the United States?
Answer. We continue to track this issue closely with interagency
colleagues and maintain a measured approach to any increase of flights
in the U.S.-PRC aviation market. Our goal is to ensure parity and a
level playing field so that any increase in flights equally benefits
U.S. carriers.
Question. U.S. officials were publicly talking about ``victory''
and inflicting a ``strategic defeat'' on Russia that would leave it
``weakened.'' President Biden has repeatedly vowed to support Ukraine
``as long as it takes.'' However, in November, the NYT reported that
the administration was privately encouraging Ukraine's leaders to
negotiate with Russia. In December, you suggested that Crimea and the
Donbas be resolved later. In January, the NYT reported the
administration softened its hard line against providing Ukraine
offensive weapons and assessed that Ukrainian pressure on Crimea would
strengthen Kyiv's position in any future negotiations. What is the
Biden administration's desired end state for this conflict? To restore
the status quo ante before Putin's invasion or to force Putin to return
territory he seized in 2014, including Crimea?
Answer. Our desired end state for this conflict is a Ukraine that
is sovereign, independent, and secure within its internationally-
recognized borders. That includes all territory of Ukraine currently
occupied by Russia--Crimea, Zaporizhzhya, Kherson, Luhansk, and Donetsk
oblasts. We have said repeatedly that this war must end in negotiated
settlement, but the ``end state'' is ultimately a decision for Ukraine
to make. We will continue to support Ukraine on the battlefield and
through our economic and humanitarian assistance.
Question. What is your assessment on what conditions be required
for Putin to accept a negotiated peace?
Answer. President Putin started this war with the aim to
effectively erase Ukraine's independence and sovereignty, and control
over Ukraine remains the Kremlin's ultimate objective. Short of that
goal, Putin may consider as an interim step consolidating control of
occupied Ukrainian territory, resting and refitting his forces, and
resuming his aggression against Ukraine when able. He has shown no
willingness to engage in good-faith negotiations to end the war he
started. It is imperative that Ukraine possess the means to effectively
deter and defend itself against further Russian aggression.
Question. What is your assessment on Putin's willingness to use
nuclear weapons as the war drags on?
Answer. Russia has resorted to irresponsible and unacceptable
nuclear rhetoric throughout its unprovoked and brutal full-scale
invasion of Ukraine. The United States, however, has not seen
indications or preparations that Russia is planning imminent nuclear
use. Whether that will change over time is uncertain. The costs of such
use have been made clear by the international community. The United
States and its fellow G7 members have stated any Russian use of nuclear
weapons would be met with severe consequences.I would defer to the
Intelligence Community for a classified assessment.
Question. Would Ukraine's attempt to seize Crimea or the Donbas
prompt Putin to consider using nuclear weapons?
Answer. What exactly would prompt Putin to consider using nuclear
weapons would be a matter of speculation. The costs of any such use
have been made clear to Russia by the international community. The
United States and its fellow G7 members have stated any Russian use of
nuclear weapons would be met with severe consequences. I would defer to
the Intelligence Community for a classified assessment.
Question. What is your assessment on how stable Vladimir Putin's
hold on power is in the Kremlin?
Answer. Though the Russian government's forced partial mobilization
last fall provoked criticism and alarm from many Russians, Putin
controls the main levers of security and information in Russia. The
Kremlin ruthlessly represses dissent and opposition voices and
promulgates false narratives about the war against Ukraine to maintain
power.
Question. Taiwan's arms backlog remains roughly $19 billion despite
senior Pentagon officials' assessment that China will be capable of
invading Taiwan by 2027. The fiscal year 2023 National Defense
Authorization Act authorizes up-to-$2 billion in grants of Foreign
Military Financing to Taiwan between now and 2027. It also authorizes
$1 billion per year in Presidential Drawdown Authority (PDA) to
transfer defense articles to Taiwan in the event of an emergency. This
is the same authorization that President Joe Biden used to send
billions of dollars in aid to Ukraine for defense against Russia's
invasion; indeed, since February 2022, the Biden administration has
directed 30 drawdowns under PDA totaling approximately $18.3 billion in
weaponry from the Department of Defense, including HIMARS, Stingers,
and Javelins. In your hearing, you claimed that the State Department's
budget request did not seek an appropriation to fully fund foreign
military financing and PDA to support Taiwan because the problem with
foreign military sales was one of defense industry ``capacity.'' Why
did the State Department budget request for Fiscal Year 2024 not
include a request to fund the up-to-$2 billion in grants of Foreign
Military Financing to Taiwan between now and 2027 that was authorized
in SFRC Chairman Robert Menendez's Taiwan Enhanced Resilience Act
(``TERA'')?
Answer. The Department appreciates the authorizations in the Taiwan
Enhanced Resilience Act of Foreign Military Financing (FMF) grant
assistance to Taiwan, and continues to explore options for Taiwan. This
budget request includes $113 million to address emerging priorities
globally, which may include Taiwan. A strategic allocation of FMF could
be accomplished with increased flexibility within the annual
appropriations bill.
Question. Why did the State Department budget request for Fiscal
Year 2024 not include a request to fund the $1 billion in PDA to
support Taiwan that was authorized in TERA to proactively provide arms
necessary for Taiwan to deter a possible Chinese invasion of the
island?
Answer. The Department recognizes the drawdown authority is one of
the U.S. government's most valuable tools to quickly provide defense
articles to foreign partners. There are numerous policy and national
security implications the United States must consider before the
President decides whether to authorize a drawdown. Any decision to
exercise the new drawdown authority would not require a corresponding
appropriation as it is an authority to draw down from existing DoD
stocks.
Question. To what extent has the United States sent weapons to
Ukraine via PDA that could also be used for an asymmetric defense of
Taiwan?
Answer. Support to Ukraine and support to Taiwan are not mutually
exclusive. There are similarities and differences to our partners'
defense needs, and capabilities prioritized for Taiwan are often the
same systems that enhance the capabilities of many partners and allies.
Some of the systems transferred to Ukraine under the military
assistance drawdown authority align with some of Taiwan's priorities
for acquisition, though the specific variant may be different.
Question. Given the threat and stakes, will the administration
commit to prioritizing delivering weapons to Taiwan ahead other
countries? If so, how will you ensure this is done quickly and
effectively? If the administration believes it is unable to deliver
weapons to Taiwan ahead of other countries for legal reasons, please
explain why.
Answer. The U.S. government has limited flexibility to influence
the order in which Foreign Military Sales (FMS) requests are fulfilled,
and individual foreign partners are not automatically prioritized
within the FMS process. Numerous factors determine the production
queue, including the order that customers finalize and fund contracts,
current DoD requirements, and the system and specific variant ordered.
Prioritizing one partner would result in significant cost increases to
that partner and likely cause the United States to miss contractual
obligations with other partners.
Question. What steps is the administration taking to ensure the
U.S. defense industrial base is prepared to replenish depleted U.S.
weapons stockpiles and ramp up production to prepare for a possible
major regional conflict in the Indo-Pacific?
Answer. I refer you to the Department of Defense, which holds the
authority for contracting with U.S. companies for maintenance and
potential contingency stockpiling.
Question. Could our European allies provide more military
assistance to Ukraine?
Answer. More than 50 of our Allies and partners have publicly
committed over $24.2 billion in security assistance to Ukraine since
February 2022 and we continue to work closely with them to increase
military equipment provisions to Ukraine. Additionally, several of
these countries have provided training.
Question. What are we doing to pressure our European allies to do
more?
Answer. We continue to encourage our Allies and partners to provide
the necessary military equipment Ukraine needs. I and other Department
officials regularly raise Ukraine's needs with foreign counterparts in-
person, on calls, and in multilateral settings, and will continue to do
so for as long as it takes to help Ukraine defend itself from Russia's
further invasion.
Question. Would a greater and more rapid European contribution of
security assistance to Ukraine allow the United States to devote more
of its strained defense industrial capacity to arming Taiwan?
Answer. Most European partners have supported Ukraine
diplomatically, economically, and with military hardware and training.
For example, at nearly 1 percent of GDP, Latvia's total assistance
commitment is proportionally nearly four times that of the United
States, while Estonia has donated the equivalent of nearly half of its
annual defense budget to Ukraine. Efforts to support the timely
delivery of defense articles to Taiwan need to prioritize expanding
production capacity.
Question. The U.S. intelligence community reportedly estimated back
in 2018 that Mexican drug cartels controlled more than 20 percent of
Mexican territory--a percentage I'm certain has grown. The cartels also
control large swathes of terrain across our southern border. Moreover,
these cartels are responsible for almost all illicit drugs coming
across our border. President Biden's Executive Order 14059 authorizes
sanctions against foreign persons who provide--or facilitate the
provision of--material support to the cartels. Why hasn't the Biden
administration used existing sanctions authorities against Mexican
government officials, including governors, who help the cartels?
Answer. The Department coordinates with the Department of the
Treasury in support of Executive Order 14059. We have and will continue
to use existing sanctions authorities against those involved in
trafficking drugs into the United States.
Question. Is it acceptable that President Lopez Obrador is not
taking aggressive action to degrade the drug cartels?
Answer. Through the Bicentennial Framework for Security, Public
Health, and Safe Communities, we work closely with Mexican counterparts
to address our shared security challenges, most notably the
transnational criminal organizations responsible for trafficking
illicit drugs into the United States and the associated violence in
Mexico. I led two High Level Security Dialogues (in 2021 and 2022),
along with my colleagues from the Departments of Justice and Homeland
Security, where I urged the Mexican government to strengthen its
efforts to curb fentanyl production and trafficking.
Question. What other tools is the Biden administration using to
compel the Mexican government to take decisive action?
Answer. For years, the United States and Mexico have worked as
partners to combat transnational criminal organizations (TCOs). Through
the Bicentennial Framework, the United States and Mexico have increased
joint efforts to combat production of synthetic and other illicit
drugs, increase drug interdictions, pursue prosecutions of TCOs and
their finances, and reduce the amount of illicit goods crossing the
U.S.-Mexico border. We also committed to implement a joint synthetic
drug action plan at the 2022 High-Level Security Dialogue to complement
ongoing cooperation.
Question. Do you assess that Mexico is at risk of becoming a narco-
state?
Answer. No. Mexico is a long-standing partner in the fight against
transnational crime. During the two High Level Security Dialogues I led
in 2021 and 2022, the United States and Mexico committed to increasing
our efforts to disrupt and dismantle transnational criminal
organizations, and to strengthen Mexican capacity to improve the rule
of law and curb fentanyl production and trafficking through the
Bicentennial Framework for Security, Public Health, and Safe
Communities.
Question. Please provide a list of all non-governmental
organizations, including prime awardees and sub awardees, in Israel,
West Bank, and Gaza that have received any funding from the U.S.
government, including but not limited to the State Dept., NED, and MEPI
beginning January 1, 2021 to the present day. The list should include
the names of the prime awardees and sub awardees receiving any U.S.
funding, the date and duration of the funding provided, the total
amount of funding that has been and will be provided, the
instrumentality of the United States government that is providing the
funding, and the stated propose of the funding.
Answer. The Department is working to assemble and provide the
requested information. We would refer you to NED for information on
their programming.
Question. The Biden administration has dramatically expanded U.S.
assistance to the United Nations Relief and Works Agency for Palestine
Refugees in the Near East (UNRWA) in spite of substantial evidence that
indicates that UNRWA has contributed to Palestinian extremism and that
Palestinian schools administered by UNRWA, have used textbooks and
allowed the presence of materials that delegitimize Israel, denigrate
Jews, and venerate martyrdom. In spite of the likelihood that UNRWA
employs individuals affiliated with U.S.--designated terrorist
organization Hamas, the United States does not condition aid to UNRWA
on counter-terrorism vetting for staff, contractors, and recipients of
UNRWA funds. Unlike USAID, where all grants must pass counter-terrorism
vetting before funds are received, no similar mechanism is in place to
ensure funds allocated to UNRWA do not get into the hands of people
affiliated with Hamas and other terrorist organizations. Right now
there is no accountability on this front: taking UNRWA's word for it is
not a substitute for an independent audit. When was the last time the
State Department conducted an audit of UNRWA?
Answer. I unequivocally condemn all forms of incitement to violence
and antisemitism. The United States provides vigorous oversight of
UNRWA's commitment to neutrality and to prevent funds from benefitting
terrorists via our U.S.--UNRWA Framework for Cooperation. Department
oversight includes site visits, weekly meetings with UNRWA, quarterly
checks of UNRWA contractors receiving more than $10,000, and following
up on UNRWA and UN audit findings and UNRWA's extensive reporting. We
take oversight seriously and meet with stakeholders--including the
government of Israel--to resolve concerns.
Question. Are you in favor of conditioning UNRWA funds on the
completion of an independently conducted and verified counter-terrorism
vetting process--similar to the protocol followed for staff of USAID
aid recipients--that ensures that recipients of funds, or at minimum
the staff and contractors of institutions receiving funds, are not
being affiliated with terrorist organizations such as Hamas? Please
begin your answer with a yes or no. If not, on what grounds do you find
it acceptable that the United States taxpayer funds are going to
organizations that contribute to the perpetuation of violent extremism
and anti-Semitism and are not willing to undergo counter-terrorism
vetting.
Answer. Antisemitism and incitement to violence are unacceptable.
The State Department monitors the United Nations Relief and Works
Agency for Palestine Refugees in the Near East's (UNRWA) adherence to
stringent policies to uphold neutrality and prevent funds from
benefiting terrorists. This includes UNRWA screening all staff and
beneficiaries for terrorism and terrorist financing concerns; sharing
staff lists with host authorities including Israel and the Palestinian
Authority; prohibiting UNRWA staff participation in political
activities; and reviewing all host country curricula and instructing
teachers how to address issues inconsistent with UN values and its
neutrality framework.
Question. Last year, the United States seemingly spared no expense
and utilized every resource to bring Brittney Griner home from Russia.
How do you explain the difference in the urgency with which the
administration approached for the Griner case compared to the urgency
it has approached other cases of wrongful detention?
Answer. The President's and my commitment to this issue is clear:
there is no higher priority than the safety and security of all U.S.
citizens around the world, and that includes seeking the release of
those who are wrongfully detained or held hostage. We treat all
wrongful detention cases with the urgency they deserve and have brought
home dozens of U.S. nationals so far.
Question. What message do you have for other families who continue
to wait for their own wrongfully detained loved ones to return home,
have yet to meet with the President despite attempts to do so, and feel
as though the administration is not prioritizing their own cases in the
same way?
Answer. Whether someone receives a meeting with the President or
not, the administration is always working equally hard to resolve each
of these cases. I realize that meeting the President himself is an
important event for these families, and I know that the President is
aware of all U.S. national wrongful detention cases and feels
passionately about bringing wrongful detainees home.
Question. Do you believe these individuals should meet with the
President?
Answer. Whether someone receives a meeting with the President or
not, the administration is always working equally hard to resolve each
of these cases. I realize that meeting the President himself is an
important event for these families, and I know that the President is
aware of all U.S. national wrongful detention cases and feels
passionately about bringing wrongful detainees home.
Question. What can you commit to for these families?
Answer. This administration is committed to the return of every
U.S. national hostage and wrongful detainee and has brought home dozens
of Americans so far. We have two critical imperatives in this space:
securing the release of U.S. nationals while also promoting
accountability and deterring those who would engage in this practice.
Our goal is also to support the families; we aim to ensure families of
wrongful detainees have access to the support they need. We are
confident we can do all three, and our record speaks to that.
Question. In April 2021, the State Department invited organizations
to compete for funding to support projects that promote and defend
atheism around the world. According to the State Department's official
announcement, its ``goal is to ensure everyone enjoys religious
freedom, including freedom to dissent from religious belief and to not
practice or adhere to a religion.'' The announcement described a
competitive process for awarding grants of $500,000 to organizations
committed to specifically to the practice and spread of atheism and
humanism in South and Central Asia and in the Middle East and North
Africa (excluding Libya, Syria, and Yemen). Did the bureau of
Democracy, Human Rights, and Labor (DRL) receive an official opinion
letter or memorandum from the Office of the Legal Advisor (L)
confirming that the proposed grants are constitutional?
Answer. I am firmly committed to defending the right to freedom of
religion or belief for all. Consistent with the Biden administration's
mandate under the International Religious Freedom Act of 1998, as
amended, this policy applies equally to people of any religion or
belief, including atheists, agnostics, humanists, or non-theists.
Consistent with the First Amendment, Department of State programs never
promote specific religious beliefs; rather, they promote the ability of
all individuals to have or adopt the religion or beliefs of their
choice, free from discrimination and violence.
Question. What specific U.S. foreign policy interests does this
program advance?
Answer. As noted in the annual International Religious Freedom
reports, the prevalence of abuses or discrimination against members of
one minority group is often indicative of the existence of similar
discrimination and abuses against members of other minorities.
Supporting efforts to safeguard the rights of members of one persecuted
group helps address broader abuses and restrictions experienced by
members of many or all religious groups in that society.
Question. Which implementing partners, if any, were chosen for
funding after the NOFO in April 2021?
Answer. In accordance with longstanding practice, and to protect
the ability of rights advocacy organizations to accomplish their
objectives in highly sensitive international settings, the Department
does not make public the results of these grant awards. However, the
Department offers briefings for Congress to discuss these awards when
requested.
______
Questions Submitted by Senator Marco Rubio
Question. General Secretary Xi Jinping is correctly regarded as the
most ideological Chinese Communist Party leader since Mao Zedong. He
has personally tasked the Party with ``liberating all of humanity'' and
serving as the ``gravediggers of capitalism.'' He is pushing the
People's Liberation Army (PLA) to focus its efforts on countering the
``powerful enemy adversary,'' which the bipartisan U.S.-China Economic
and Security Review Commission argues is a code word for the U.S. Do
you believe General Secretary Xi when he says he wants the Party to
serve as a ``gravedigger of capitalism?''
Answer. The PRC is the only country with both the intent to reshape
the international order and, increasingly, the power to do it. The
PRC's own modernization benefitted from the stability and opportunity
that the international order provides. But rather than using its power
to reinforce and revitalize the laws, agreements, principles, and
institutions that enabled its success, Beijing is undermining them. The
PRC has become more repressive at home and more aggressive abroad. We
continue to work with allies and partners to shape the strategic
environment around Beijing to advance our vision of an open and
inclusive international system.
Question. Do you think General Secretary Xi is a partner the U.S.
can trust?
Answer. Under President Xi, the Chinese Communist Party has become
more repressive at home and more aggressive abroad in challenging the
rules--based international order. We will continue to defend U.S.
interests, our values, and our affirmative vision for the world. At the
same time, we recognize that how the United States and PRC manage our
relationship has consequences for the entire world. That is why we will
continue to explore possible efforts to partner with the PRC on
transnational challenges, such as climate change, counternarcotics,
non-proliferation, and global health.
Question. At what point will the administration stop downplaying
Chinese support for Russia ``as a marriage of convenience'' and instead
denounce the Chinese Communist Party as working against our interests
in Ukraine?
Answer. Under President Xi, the Chinese Communist Party has become
more repressive at home and more aggressive abroad. We will defend U.S.
national security and advance our values and prosperity. We have
repeatedly warned the PRC that assistance to Russia's war effort,
including help evading sanctions, would have serious consequences, and
have sanctioned or designed PRC entities that have aided Russia's war.
Question. You say we need to counter Beijing's actions with
diplomacy. Your department has supplanted or conflated national
security objectives with progressive social policy by funding a
Colombian LGBTQI group supporting prostitution, a film festival
featuring incest and pedophilia in Portugal, and producing a diversity,
equity, and inclusion declaration with Canada and Mexico while the
immigration crisis rages at the border. How much of the $4 billion you
have requested for the Indo-Pacific to achieve national security
objectives is going to be used on woke projects?
Answer. The fiscal year 2024 President's budget requests resources
to out-compete the PRC and advance American prosperity globally. The
budget includes $2.3 billion in discretionary funding to support
implementation of the Indo-Pacific Strategy, including by strengthening
our alliances and partnerships, as well as $2 billion in mandatory
funding to make game-changing investments in the Indo-Pacific to
strengthen economies and support our partners in pushing back against
coercive PRC efforts.
Question. Will you guarantee to this committee, and the American
people, the proposed funding for the Indo-Pacific will be utilized to
advance American prosperity and national security and not on a
progressive social agenda?
Answer. The proposed funding for the Indo-Pacific, both the
mandatory and discretionary components, included in the fiscal year
2024 President's budget request will advance American prosperity and
national security. This funding is a critical investment that must be
made for the United States to advance relationships with partners in
the Indo-Pacific where competition with the PRC is most pronounced.
Question. The claim that the United States ``does not seek to
change China's system'' is especially wrongheaded and far from a slip-
up. It echoes a line in the Biden administration's February Indo-
Pacific strategy: ``Our objective is not to change the PRC but to shape
the strategic environment in which it operates.'' This sounds exactly
like the defeatism that I feared when I warned in November 2020 that
Biden would bring back the ``caretakers of American decline.''
Additionally, recent reports of Chinese companies supplying Russian
companies with body armor, rifle ammunition, and jet repair parts to
Russia have come to light. What exactly does winning look like in a
``strategic competition'' if China's political system--a system that
commits genocide, that covers up the origins of COVID-19, and that
systematically steals our intellectual property and technology--does
not change?
Answer. The PRC is the only country with both the intent to reshape
the international order and, increasingly, the power to do it. The
United States will compete and unapologetically stand up for our values
and interests, but we do not want conflict with the PRC and are not
seeking a new Cold War. We will vigorously defend and strengthen our
national security as well as the international law, institutions, and
agreements that protect the rights of individuals and sovereign
nations, and maintain the peace and security that makes it possible for
all countries to coexist.
Question. How can U.S. leadership be maintained unless our
worldview continues to shape the global order, and the Party's
worldview--what it calls ``Xi Jinping Thought on Socialism with Chinese
Characteristics for a New Era''--is tossed onto the ash heap of history
where it belongs?
Answer. The PRC is the greatest geopolitical challenge facing the
United States because it is the only competitor with the intent and,
increasingly, the capability to remake the international order. The
United States will continue to compete vigorously with the PRC to
defend our values and vision of the world. At the same time, as we have
said, we do not seek conflict with the PRC. The United States will
manage competition responsibly and maintain open lines of communication
with the PRC.
Question. How can we paper over General Secretary Xi's statements
that he wants the Chinese Communist Party to ``liberate all of
humanity'' and serve as the ``gravediggers of capitalism'' as just a
difference of opinion that can be constrained?
Answer. The PRC is the greatest geopolitical challenge facing the
United States because it is the only competitor with the intent and,
increasingly, the capability to remake the international order. The PRC
is more repressive at home and aggressive abroad in challenging the
interests and values of the United States and our allies and partners.
We will continue to advance our vision for an open and inclusive
international system. The United States will also manage competition
responsibly and maintain open lines of communication with the PRC.
Question. Why is this administration so prone to timidity when
confronted by what is nothing less than an existential threat?
Answer. The Biden administration will continue to compete
vigorously with the PRC to uphold our values and advance our interests
and our affirmative vision of the world.We have introduced a record-
setting number of sanctions, export controls, and other competitive
actions. For example, we added more than 200 PRC and Hong Kong entities
to the Entity List; pushed back publicly against PRC claims in the
South China Sea; held the PRC to account for its egregious abuses of
human rights; and demonstrated unprecedented support for human rights
and religious freedom in Tibet.
Question. When will the administration impose sanctions on Chinese
support for the invasion of Ukraine?
Answer. We have already sanctioned a number of PRC firms under our
Russia sanctions regime, including Spacety for providing synthetic
aperture radar satellite imagery over locations in Ukraine. In my
meeting with PRC Director Wang Yi on the margins of the Munich Security
Conference on February 18, I reinforced our concern and potential
repercussions of the PRC materially supporting Russia's war effort. We
have made it clear to the PRC there would be real consequences to our
relationship if the PRC were to provide Russia lethal assistance or
systematic support to evade sanctions. We will continue to monitor this
issue very closely.
Question. What is the administration doing to hold the Chinese
Communist Party accountable for its continued refusal to stop the
production of fentanyl precursor chemicals?
Answer. The Department continues to press Beijing and expand
efforts to strengthen international cooperation with the PRC and other
partners to stop the criminal diversion of unscheduled chemicals to
illicit synthetic drug production. Among other efforts, the Department
provides foreign policy guidance to the Department of the Treasury in
support of designations pursuant to the Kingpin Act and E.O. 14059 and
continually evaluates potential targets for the Department of State
Transnational Organized Crime and Narcotics Rewards Programs.
Question. I remain skeptical that you traveling to Beijing is a net
positive for our Nation given the brazen violation of U.S. sovereignty
by its spy balloon, the CCP's continued detention of U.S. citizens, and
ongoing acts of genocide, to name a few. Should it be rescheduled, this
administration would be perceived as bailing out General Secretary Xi
Jinping, providing him with an audience after China's ``two sessions,''
which have confirmed his consolidation over the Party and Chinese
society. Do you still plan to visit Beijing?
Answer. I am prepared to visit Beijing when conditions allow. If I
do so, I will carry a clear message, as I always do in my engagements
with PRC leaders, that Beijing must live up to its responsibilities as
a global power. We will continue to manage this relationship
responsibly and maintain open lines of communication.
Question. Under what conditions do you think a trip is appropriate?
Answer. We will assess the most opportune time to visit to advance
U.S. interests. From the U.S. perspective, it's important that the PRC
make meaningful progress on some of the most high-priority issues as
outlined by President Biden. During any meeting with PRC leaders, I
intend to carry a clear message, as I always do in my engagements, that
Beijing must live up to its responsibilities as a global power.
Question. Would you, at a minimum, require the release of American
citizens, like Mark Swidan, Zhou Deyong, and Harrison Li, as a
prerequisite for any meeting with your counterparts in Beijing? Why or
why not?
Answer. I am deeply concerned by the PRC's continued use of
wrongful detentions and coercive exit bans without a fair and
transparent process in U.S. citizens' cases. There is no higher
priority for the U.S. government. The administration raises individual
U.S. citizen cases with the PRC government at every opportunity and at
the highest levels. We call on the PRC to immediately release
wrongfully detained individuals, lift coercive travel restrictions on
U.S. citizens, and refrain from such measures in the future. I commit
to keeping Congress informed, consistent with privacy concerns.
Question. Will you raise the issue of the PRC's systematic arrests
and detentions of the family members of American citizens of Uyghur
descent in order to silence their advocacy? For example, the families
of Nury Turkel, the Chairman of the U.S. Commission on International
Religious Freedom, Gulchehra Hoja, a reporter at Radio Free Asia, and
Rushan Abbas, a prominent NGO leader, are all either under detention or
travel bans.
Answer. I am deeply concerned by ongoing reports of PRC attempting
to silence human rights advocates in the United States by retaliating
against their relatives in China. We continue to call for the immediate
and unconditional release of PRC nationals who are unjustly detained.
We also urge the PRC to lift coercive exit bans affecting family
members of U.S. citizens. The Department raises priority cases of
concern directly with the PRC government at the highest levels,
including cases concerning relatives of U.S. citizens and residents.
Question. Do you pledge to hold the Chinese Communist Party
accountable for its use of slave labor, unfair trade practices, and
aggression in the region?
Answer. We will continue to take strong action to counter PRC human
rights abuses and unfair trade practices. To this end, we have deployed
tools to promote accountability for PRC individuals and entities
responsible for human rights abuses. While we were disappointed with
the outcome of the 2022 Human Rights Council vote not to discuss
Xinjiang, it successfully made clear the PRC is not above scrutiny. We
are working with likeminded allies on next steps to promote
accountability for the PRC's human rights abuses and unfair trade
practices, and to uphold the rules-based international order.
Question. Since the start of the Biden administration, it appears
its China policy has been flawed. On the one hand, the Biden
administration says Beijing is the only regime that has the intention
and capacity to reshape the international order. On the other hand, the
administration still insists on cooperating with the Chinese government
where ``our interests align.'' For example, John Kerry is still
championing a climate deal, even though the number of Chinese coal
plants continues to rise and Beijing eagerly buys up Iranian and
Russian oil. Do you believe a government that routinely violates its
commitments to international agreements, and has no interest in slowing
down its industrial capacity, will negotiate with us in good faith?
Answer. The Biden administration holds the PRC accountable to its
bilateral and international commitments. We do not hesitate to call out
the PRC when it has failed to uphold these commitments, such as in the
most recent Annual Report on China's WTO Compliance. As the largest
carbon dioxide emitter, the PRC must accelerate efforts to limit global
temperature rise to 1.5 degrees C. Confronting the climate crisis is a
global and existential issue. The world expects China and the United
States to work together when it comes to transnational challenges such
as climate, including on energy transition, methane emission
reductions, and ending illegal deforestation.
Question. What do you base that belief on?
Answer. The Biden administration holds the PRC accountable to its
bilateral and international commitments. We do not hesitate to call out
the PRC when it has failed to uphold these commitments, such as in the
most recent Annual Report on China's WTO Compliance. As the largest
carbon dioxide emitter, the PRC must accelerate efforts to limit global
temperature rise to 1.5 degrees C. Confronting the climate crisis is a
global and existential issue. The world expects China and the United
States to work together when it comes to transnational challenges such
as climate, including on energy transition, methane emission
reductions, and ending illegal deforestation.
Question. A few months ago, a report by the Center for Strategic
and International Studies concluded that the war in Ukraine has
severely depleted both American and European stocks of munitions
critical for a conventional war. This is especially cause for concern
given that the Chinese Communist Party is stepping up its aggressive
behavior in the Indo-Pacific, including towards Taiwan and India. It is
my belief that deterring Beijing in the region must be the top priority
for the U.S., and our assistance to Ukraine--though important--should
not come at the cost of leaving us unprepared to deter China or degrade
the ability of the U.S. to defend ourselves at home. Have the
militaries of Taiwan, or our other allies and partners in the Indo-
Pacific region, requested any of the capabilities and equipment we are
providing Ukraine?
Answer. Support to Ukraine and support to Taiwan and our other
allies and partners in the Indo-Pacific are not mutually exclusive. It
is correct that there are similarities and differences to our partners'
defense needs, and capabilities provided to a particular customer are
often the same systems that enhance the capabilities of other partners
and allies. Many of the capabilities we have provided Ukraine via the
drawdown authority are similar to capabilities that would support
Taiwan's defense requirements, though these often include different
variants to systems our Indo-Pacific partners are procuring through
Foreign Military Sales.
Question. If so, how is the department handling competing Foreign
Military Sales requests between our Indo-Pacific allies and partners
and our European allies? Which is being prioritized for fulfillment?
Answer. Numerous factors determine the production queue, including
the order in which customers finalize and fund contracts, current DoD
requirements, and the system and specific variant ordered. Prioritizing
one partner would result in significant cost increases to that partner
and likely cause the United States to miss contractual obligations with
other partners. That said, we are looking at ways to prioritize urgent
needs for our allies and partners in the Indo-Pacific and Europe.
Question. Chinese-produced fentanyl and fentanyl precursors
continue to enter the U.S. illicitly and kill American adults and
children. It is a tragedy that many of Florida's, and America's,
families are all too familiar with. Despite this, last fall, the Biden
administration did not list China as a Major Drug Transit or Major
Illicit Drug Producing Country for Fiscal Year 2023. This is an insult
to the pain and suffering so many Americans are facing due to Chinese-
produced fentanyl and fentanyl precursors. The law is clear: any
country ``that is a significant direct source of covered synthetic
drugs or psychotropic drugs or other controlled substances, including
precursor chemicals when those chemicals are used in the production of
such drugs and substances, significantly affecting the United States''
should be designated. China clearly meets that definition. Why did you
leave it off the list?
Answer. The James M. Inhofe National Defense Authorization Act for
fiscal year 2023 amended the definition of Major Drug and Major Illicit
Drug Producing Countries to include synthetic drugs and precursor
chemicals. It was enacted into law by President Biden on December 23,
2022. This legislative change occurred following President Biden's last
determination identifying Major Drug Transit or Major Illicit Drug
Producing Countries for fiscal year 2023 in September 2022. The fiscal
year 2024 determination of countries is required under law by September
15, 2023.
Question. Has the department considered sanctioning Chinese persons
and entities involved with producing fentanyl and fentanyl precursors
through the Kingpin Act? If not, why?
Answer. The Department of State provides foreign policy guidance to
the Department of the Treasury in support of designations pursuant to
the Kingpin Act and the more recent Executive Order 14059. The
Department remains committed to continued close collaboration in
support of the Kingpin Act and other sanctions programs targeting the
fentanyl supply chain. For further specifics on potential targets, I
recommend questions be directed to the Department of the Treasury.
Question. Which threshold needs to be crossed in order for the
department to use tools currently available to sanction these foreign
persons and entities?
Answer. The Department utilizes available sanctions tools
consistent with the terms of the specific authorities being used. The
Department works with the Department of the Treasury to support the
implementation of relevant sanctions, including EO 14059, which
implements the fentanyl sanctions act, and the Foreign Narcotics
Kingpin Designation Act. For specifics on further implementation
details, I refer you to the Department of the Treasury.
Question. On February 27, pursuant to Congress' enactment of the No
TikTok on Government Devices Act, the Biden administration ordered a
ban on TikTok on most government devices in 30 days, which would be
March 30. Do you agree that TikTok represents a national security
threat to the United States?
Answer. Since July 2021, the State Department prohibits the use of
TikTok on Department-owned devices and the creation of official
Department of State TikTok accounts. In addition, our policy states
that U.S. Embassies and Consulates should not hire contractors nor
third-party vendors to create or manage TikTok accounts of behalf of
Department organizations and personnel.
Question. Do you agree that TikTok should not be installed on U.S.
government devices?
Answer. The State Department has prohibited the use of TikTok on
Department-owned devices since July 2021 and has prohibited the
creation of official Department of State TikTok accounts. Additionally,
we are working to ensure compliance with the February 2023 OMB
memorandum ``No TikTok on Government Devices'' Implementation Guidance.
Question. Why is the Biden administration showcasing TikTok
influencers instead of clearly articulating the national security
threat the app poses to U.S. citizens?
Answer. The Department does not manage any TikTok accounts and is
taking necessary measures to safeguard government infrastructure and
data. The Department, however, is committed to engaging global
audiences, including meeting young people where they are, and promoting
U.S. foreign policy while ensuring we do not cede this space to our
adversaries and competitors. Methods used may include collaboration
with individuals on platforms where we do not currently have a digital
presence.
Question. Your fiscal year 2024 budget request identifies two
budget and policy priorities in the top three, and they are the
implementation of an Indo-Pacific strategy to strengthen alliances and
partnerships and out-compete the CCP by providing alternatives to the
CCP's predatory and coercive practices and has requested $4 billion for
this national security priority. However, you have requested $6.4
billion for what can only be called pet social policy projects that
only a narrow section of American society support, such as LGBTQI
advocacy initiatives, the U.N. Green Climate Fund, a Clean Technology
Fund, and Family Planning and Reproductive Health--essentially abortion
advocacy. This disparity highlights where the administration's
priorities truly are, progressive social policy over American
prosperity and stated national security priorities. This
administration's obsession with promoting a woke agenda is destructive
in its own right, but even more so when placed in the context of great
power competition. Currently, your department has more than 100 vacant
and unfilled Foreign Service Generalist and Specialist positions in the
Indo-Pacific. How many Foreign and Civil service staff are employed in
the Diversity offices of State and USAID?
Answer. The Department's Office of Diversity and Inclusion
currently has authorization for 12 full-time equivalent (FTE)
positions. One Senior Leader position will be added in fiscal year
2023. USAID's Office of the Chief DEIA Officer currently has 10 FTE
positions: eight Civil Service staff and two Foreign Service staff.
Question. In your proposed budget request, you have proposed 56 new
positions for State in the Indo-Pacific. Why should Congress authorize
additional positions when you cannot fill current positions and when
the department fills Diversity offices ahead of staffing a region the
President and yourself have stated is the priority?
Answer. The Department continues to make hiring and filling
positions a top priority. In fiscal year 2022, the Department executed
the largest intake of Foreign Service professionals in a decade and
fiscal year 2023 numbers will be even larger. We remain committed to
protecting and promoting U.S. interests, including in the Indo-Pacific,
by ensuring the Department is staffed appropriately.
Question. The administration's fiscal year 2024 budget request
includes $532.1 million for the Western Hemisphere. This request
supports many initiatives for the security of the Caribbean, including
the Caribbean Basin Security Initiative (CBSI), to help fight crime and
violence in these nations. Senator Kaine and I introduced legislation
to codify the CBSI to require the State Department to promote
cooperation with Caribbean nations and address the crisis in Haiti,
which isn't a beneficiary country. What steps has the State Department
taken to address the ongoing security crisis in Haiti?
Answer. The Department provided over $90 million since July 2021 to
help the Haitian National Police (HNP) expand its anti-gang capacity by
training, equipping, and vetting specialized units and supporting
community policing programs. The Department worked with U.S. and
Canadian militaries to expeditiously deliver Haitian-purchased armored
vehicles and provide real-time advice so the HNP could retake the
Varreux fuel terminal from the gangs in November 2022. The Department's
CBSI programs address firearms trafficking and other regional problems
that affect Haiti.
Question. Why hasn't the administration submitted a resolution to
the United Nations Security Council calling for international support
for Haiti, which Ambassador Linda Thomas-Greenfield promised last
October?
Answer. As a result of U.S. advocacy, the UN Security Council
adopted a resolution that extended the mandate of the UN Integrated
Office in Haiti (BINUH) to 1 year, increased the number of police
advisors, dedicated capacity to address sexual and gender-based
violence in BINUH's human rights unit, and established the first UN
sanctions regime ever in the Western Hemisphere. In addition to
increasing our bilateral assistance to the Haitian National Police, we
continue our intensive diplomatic outreach to identify partners to lead
a non-UN multinational force (MNF).
Question. What is the status on identifying a country to lead an
international response to the Haitian government's October 2022 request
for help?
Answer. We continue to evaluate options and work with international
partners to respond to Haiti's request for an international security
force. In addition, the Department is intensifying its efforts to
support the Haitian National Police (HNP), including through increased
training and equipment.
Question. How many Haitian migrants have to undertake the dangerous
journey from Haiti to Florida and across the southern U.S. border
before the administration takes the initiative in quelling gang
violence in Haiti?
Answer. The administration remains deeply concerned about Haiti's
gang violence and irregular migration. Since July 2021, we have
provided over $90 million for Haitian National Police anti-gang
capacity building. We continue to lead measures to promote an end to
the violence, including imposing sanctions and visa restrictions on
over 50 individuals involved in corruption and criminal organizations
since October 2022. The Department supports safe, orderly, and humane
migration from Haiti and the region, including through the expanded
parole process launched in January 2023.
Question. The President's request includes $430 million to support
hemispheric migration management and proposes additional funding for
programs aimed at improving the lives of migrants and refugees,
including an allocation for the Inter-American Development Bank's fund
to invest in the private sector in the Western Hemisphere, which would
help these economies provide opportunities to their people and keep
them from migrating here. What guardrails are in place to prevent
Beijing-controlled companies from accessing these funds?
Answer. Companies domiciled in the People's Republic of China, as a
non-borrowing member of the Inter-American Development Bank (IDB), are
eligible to bid on projects under IDB financing. The United States
continues to advocate for reforms and procurement policies at the
multilateral development banks (MDBs) that focus more on the best value
for life-cycle costs, which showcases U.S.-based firms' strengths,
rather than lowest bids. I refer you to the U.S. Treasury Department,
the lead agency for the MDBs, for more detailed questions on MDB
procurement.
Question. In addition to funding supported by the bank, how else
are we supporting U.S. private investment in Latin America and the
Caribbean, including upper-middle-income and high-income countries that
are not eligible for DFC funding?
Answer. DFC is authorized to work in upper-middle-income countries
on projects that advance infrastructure, human needs, and USAID
priorities. EXIM, which operates without income restriction, and USTDA,
which can work in countries up to middle-income, are able to facilitate
U.S. exports and private investment throughout the region. We are
implementing the Blue Dot Network initiative to certify quality
infrastructure projects and help close the infrastructure gap around
the world by attracting greater private sector investment regardless of
income level.
Question. On October 7, 2022, the UN Human Rights Council voted to
adopt a U.S.-supported resolution renewing the mandate of the UN Fact-
Finding Mission on Venezuela. Prior to the Council's vote, the mission
released a report which concluded that ``Nicolas Maduro, supported by
other high-level authorities, stand out as the main architects in the
design, implementation and maintenance of a machinery with the purpose
of repressing dissent.'' How is the State Department supporting efforts
to hold the Maduro regime accountable for their systematic violations
of human rights, as documented by the UN Fact Finding mission?
Answer. The State Department continues to hold the Maduro regime
accountable for its human rights abuses, including those documented in
the UN Fact Finding Mission (FFM). As part of these efforts, the U.S.
Government supports democratic actors, including civil society and the
opposition, coordinating with democratic countries to demand democracy
and call out the regime's violations. We have also welcomed the
International Criminal Court`s investigation into abuses, supported the
UN FFM's mandate renewal, and imposed sanctions on the Maduro regime.
Question. Is the administration considering a prisoner exchange
involving Alex Saab, who is wanted for counter-terrorism charges, for
innocent Americans who are wrongly detained in Venezuela?
Answer. The Biden-Harris administration has made it a priority to
protect Americans abroad and bring home all U.S. nationals wrongfully
detained or held hostage abroad. We, as always, do not comment on the
specifics of any particular ongoing case.
Question. Following the UN Human Rights Council (UNHRC) vote in
October, Venezuela lost its seat on the Council, and was replaced by
Costa Rica--a democracy with a good human rights record. This was a
positive development for the Council and the international community's
rejection of the Maduro regime's human rights record. How can we apply
the same support to keep other countries with human rights violations
off of the Council in the future?
Answer. The United States continues to seek reforms of the UN Human
Rights Council (HRC), particularly with respect to its membership. The
United States actively engages with allies and partners to encourage
countries with good human rights records to challenge countries with
poor records for seats on the Council. The United States also presses
member states to more carefully consider human rights records of
countries running for HRC election.
Question. The human rights situation in Nicaragua has deteriorated
significantly in recent years. The Daniel Ortega regime has suppressed
dissent, shuttered independent media, arbitrarily detained political
opponents, and carried out fraudulent presidential elections. U.S. law,
specifically the RENACER Act, requires the Secretary of State to impose
sanctions against human rights violators and those obstructing the
establishment of conditions that advances free, fair, transparent and
democratic elections in Nicaragua. What actions have you taken to
advance democratic elections in Nicaragua, as stated in the RENACER
Act?
Answer. The Ortega-Murillo regime continues to trample democratic
institutions and block democracy's return to Nicaragua. The United
States has imposed financial sanctions on 48 individuals and 11
entities and has taken steps to place visa restrictions on nearly 1,000
Nicaraguans and their family members who fuel repression and
corruption. No member of the Nicaraguan government nor anyone who
facilitates the Ortega-Murillo regime's abuses should believe they can
travel freely to the United States or avoid accountability for their
actions.
Question. How is the State Department highlighting the human rights
situation in Nicaragua at the UNHRC and other international forums?
Answer. The Department of State works with allies and partners in
international fora, including the UNHRC and the OAS, to focus global
attention on the Ortega-Murillo regime's human rights abuses. On April
3, the UNHRC adopted a U.S.-cosponsored resolution on Nicaragua and
renewed the mandate of the Group of Human Rights Experts on Nicaragua
for an additional 2 years. On March 29, U.S. Ambassador Mora
highlighted former political prisoner Tamara Davila's testimony before
the OAS Permanent Council, reminding everyone what is at stake in
Nicaragua.
Question. A few weeks ago, several Nicaraguan officials visited the
United States for the World Baseball Classic. The Nicaraguan community
in Florida identified some of these officials as members of the
Nicaraguan National Police, which is subject to visa sanctions mandated
by the NICA and RENACER Acts. Can you confirm if those officials are
members of the Nicaraguan National Police, which the U.S. has found
responsible for numerous cases of human rights abuses in Nicaragua,
issued visas to enter the country?
Answer. Visa records are confidential under U.S. law and therefore
we cannot provide details on individual visa cases. The Department has
taken steps to impose visa restrictions on nearly 1,000 Nicaraguans who
have contributed to the regime's human rights abuses and actions to
undermine democracy. The Department continues to gather information and
review visa applications to identify individuals covered by the
sanctions described in the NICA and RENACER Act, as well as those
ineligible under other visa restriction authorities.
Question. When should we expect the next announcement of sanctions
on Nicaragua?
Answer. We do not preview sanctions actions. U.S. sanctions are
designed to encourage the regime to change course. As the regime has
not yet shown willingness to do so, we continue to explore additional
coordinated, multilateral pressure using the diplomatic and economic
tools at our disposal.
Question. Last month, officials from Cuba's Ministry of the
Interior, an entity under U.S. human rights sanctions, were invited to
visit the U.S. Coast Guard Headquarters and a Coast Guard facility in
North Carolina. Cuba is a state sponsor of terrorism. It has sponsored
terrorism for years in South America, and it continues to shield
criminals responsible for horrific attacks on U.S. citizens from the
reach of our judicial system. Do you agree that Cuba should remain on
the list of state sponsors of terrorism?
Answer. The Department of State designated Cuba as an SST on
January 12, 2021, for repeatedly providing support for acts of
international terrorism. Under U.S. law, specific statutory criteria
must be met to rescind SST designations. The Department carefully
reviews available information, from many sources, to determine if a
country meets the statutory criteria for designation or rescission. Any
review of Cuba's SST designation would be based on the law, including
the criteria established by Congress.
Question. Are you aware of any other program where we invite North
Korea, Iran, or Syria, the other designated state sponsors of
terrorism, to tour our military facilities?
Answer. The Departments of State and Homeland Security, including
the U.S. Coast Guard (USCG), jointly planned the Cuba Port Security
visit in support of the USCG International Port Security (IPS)
Program's mission. The IPS Program fulfills the mandate to protect the
U.S. Maritime Transportation System (MTS) through security assessments
of international ports. The USCG IPS Program has not invited North
Korea, Iran, or Syria to tour port facilities in the U.S. or USCG
units. I refer you to the Department of Defense for any questions
regarding visits to military facilities.
Question. A few weeks ago, Senator Menendez and I sent a letter
urging you to increase efforts to stop the expansion or resumption of
programs in Latin America that makes use of Cuba's foreign medical
missions. I was pleased to see in the recent release of the annual
human rights report that the department again pointed out these
missions as a form of forced labor and noted that it's more than just
doctors. The regime is forcing sailors, athletes, musicians,
architects, and teachers into forced labor programs abroad. What is the
Department doing to encourage countries like Mexico, Brazil, and
Colombia to stop from using Cuban medical missions?
Answer. The administration seeks every opportunity to bring abuses
in Cuba's labor export program to light, raising our concerns with
senior foreign officials around the world. In recent weeks, U.S.
embassies engaged officials in Mexico and Brazil to share our concerns
with Cuba's labor export program to mitigate exploitation and
trafficking of government-affiliated Cuban workers, and we will
continue to raise this important issue. The Department has documented
strong indicators of forced labor in Cuba's labor export program in
each annual Trafficking in Persons Report since 2010.
Question. Should these countries start using Cuban Medical
Missions, what will be the U.S. response?
Answer. The Department will continue to raise concerns regarding
forced labor in Cuba's labor export programs with international
partners and in multilateral fora. We will urge countries to
proactively screen government-affiliated Cuban workers for trafficking
and forced labor indicators, protect identified victims, seek
transparency on their contractual agreements, and respect their human
rights and labor rights. The Department continues to call on other
governments to curb coercive labor practices and ensure compliance with
international labor standards.
Question. Since assuming office, the new administration of Gustavo
Petro has embarked on an ambitious ``Paz Total'' or ``Total Peace''
plan by launching negotiations with dozens of armed groups. These are
quite different from the talks launched in previous years with the
Revolutionary Armed Forces of Colombia (FARC)--many of the groups
participating in Paz Total, like Clan de Golfo, are literally just drug
cartels with no other motive than the pursuit of profit. Is Colombia's
pursuit of Paz Total with drug cartels beneficial for the safety of
Americans?
Answer. While the outcome of the Petro administration's
conversations with criminal groups is uncertain and there is much
skepticism that ``Total Peace'' is achievable, if talks lead to those
groups disbanding and giving up drug trafficking and other criminal
activities, the safety and well-being of U.S. citizens should improve.
The level of violence within Colombia would presumably decrease and, so
long as other groups do not step in to fill the void, negotiated
agreements could result in a decrease in Colombian cocaine trafficked
to the United States.
Question. Has the Department raised concerns with the Petro
administration regarding participants in the Paz Total talks?
Answer. Yes. We have urged extreme caution in dealing with
terrorists and narcotraffickers, especially those who seek concessions
to allow them to continue criminal operations and seek impunity. While
we support the pursuit of peace in Colombia and President Petro's
desire to address ongoing threats from insurgent, terrorist, and drug
trafficking groups, our goal remains to bring drug traffickers and
terrorists who violate U.S. laws to justice, to avoid impunity for
serious crime, and to reduce coca cultivation, and drug production and
trafficking.
Question. Do you anticipate that Colombia will not honor its
extradition treaty obligations with the United States, as some Paz
Total participants are demanding as part of the talks?
Answer. To date, President Petro has not denied a single U.S.
extradition request and approved almost 40 extraditions. We expect to
work with Colombia to ensure that extraditions continue, to advance our
shared law enforcement goals.
Question. My office has received multiple requests from U.S.
citizens whose family members are waiting for approval for their visas
to legally travel to the United States. Since the start of the
pandemic, the consular backlog has been a constant source of
frustration for my constituents. What steps has the administration
taken to alleviate this backlog of cases?
Answer. We are focused on getting posts back to pre-pandemic
staffing levels to eliminate immigrant visa backlogs and reduce
nonimmigrant visa interview appointment wait times. As scheduling
capacity at posts has increased, the National Visa Center forwards
interview-ready-cases; posts have reduced IV scheduling backlogs by 27
percent since July 2021. The Department uses data-driven analyses to
help posts adjudicate visas more efficiently, schedule more applicants,
and develop backlog-elimination plans for the posts with the largest
pandemic-driven backlogs.
Question. What explains the continued delay in resolving the
backlog?
Answer. The Department is focused on eliminating the backlog of
interview-ready immigrant visa cases that accrued during the pandemic.
The National Visa Center continues to schedule as many interviews as
posts' capacities allow. The Department has dedicated significant
resources to rebuild staffing and reduce visa backlogs and appointment
wait times. We are focused on helping all our posts around the world
get the tools, resources, and support they need to bring wait times
down. We continue to see significant progress in 2023.
Question. Honduras recently cut diplomatic relations with Taiwan
and officially established diplomatic relations with the People's
Republic of China. V This means that yet another country in our region
turns its back to our democratic ally, despite Taiwan's years long
support for development in Honduras. Earlier this year, Taiwan launched
an education program in Honduras under the Global Cooperation and
Training Framework jointly administered with the United States. What's
the administration reaction to this concerning news?
Answer. Countries make their own sovereign decisions in their
international relationships. However, countries often find promises
exchanged for diplomatic recognition go unfulfilled. The U.S. one-China
policy remains unchanged. Taiwan's investments in Honduras reflected
its lasting and sustainable commitment to the prosperity of the
Honduran people. Taiwan is a reliable, likeminded, and democratic
partner and all who value democracy, good governance, transparency, the
rule of law, and economic prosperity for their people should seek to
expand engagement with Taiwan.
Question. How is the administration demonstrating the detrimental
effect of this decision on Honduras?
Answer. Special Presidential Advisor for the Americas Chris Dodd
spoke with President Castro on March 20, and U.S. Embassy Tegucigalpa
has carried out sustained engagement to express our concern over the
Honduran government's decision. U.S. diplomats explained the risks to
Honduran sovereignty, transparency, accountability, and sustainable
financing that come with partnership with the PRC. Special Presidential
Advisor Dodd and the Embassy also underscored the many expected
benefits from partnership with the PRC that other countries never saw
come to fruition.
Question. Why is Honduras invited to participate at the second
Summit for Democracy, when it continues to mistreat American companies
and choose to stand with the genocidal regime in Beijing?
Answer. A Summit invitation does not imply that all aspects of a
country's democracy are perfect. It shows commitment to partners
willing to strengthen democratic governance. Honduras held free/fair
elections in 2021 that led to a peaceful transfer of power. The Castro
administration continues to express commitment to democratic
governance. We support companies and investments that promote good
governance and jobs and will convey our concerns about the PRC's
troubling trade, environmental, and human rights practices with
Honduras.
subcommittee recess
Senator Coons. With that, this hearing is adjourned.
[Whereupon, at 12:04 p.m., Wednesday, March 22, the subcommittee
was recessed, to reconvene subject to the call of the Chair.]
STATE, FOREIGN OPERATIONS, AND RELATED PROGRAMS APPROPRIATIONS FOR
FISCAL YEAR 2024
----------
WEDNESDAY, APRIL 19, 2023
U.S. Senate,
Subcommittee of the Committee on Appropriations,
Washington, DC.
The subcommittee met at 10:01 a.m., in room SD-138, Dirksen
Senate Office Building, Hon. Christopher A. Coons (Chairman),
presiding.
Present: Senators Coons, Shaheen, Merkley, Murphy, Van
Hollen, Schatz, Collins, Graham, Moran, and Hagerty.
UNITED STATES AGENCY FOR INTERNATIONAL DEVELOPMENT
OPENING STATEMENT OF SENATOR CHRISTOPHER A. COONS
Senator Coons. I call this hearing to order. Today, the
Subcommittee on State, and Foreign Operations, Related Programs
of the Senate Appropriations Committee, meets to review the
fiscal year 2024 budget request, for the United States Agency
for International Development.
We are honored to have Administrator Samantha Power with
us. Administrative Power, it is always an honor and a privilege
to have you before us. We have a lot to cover. You have a lot
going on and a lot of responsibilities, so we appreciate your
making yourself available.
It is unfortunate that we have two, at least two, other
compelling hearings on similar or related topics. So please be
understanding that a number of our colleagues intend to come in
and out.
I am grateful, the Vice Chair of the Full Committee, my
friend and colleague from Maine, Susan Collins, is serving as
the Ranking for this hearing, and will help open the hearing. I
know that the Ranking Member of the subcommittee, Senator
Graham, will join us in just a few minutes.
The fiscal year 2024 request for this subcommittee's budget
including staff and programs of, State, USAID, MCC, DFC, and
other agencies, is in total $68.6 billion, 6.8 billion, or 11
percent above the fiscal year 2023 enacted level, still not
even one penny on the dollar of U.S. Defense spending. If you
include the supplemental funding that was provided in 2023, to
address Russia's brutal invasion of Ukraine, the fiscal year
2024 request would actually be a 15 percent cut over the
overall expenditures.
With this relatively modest funding, Administrator Power,
you are being asked to confront an historic confluence of
complex global challenges. A record number of refugees, and
internally displaced persons, more than 100 million people
forcibly uprooted. Food insecurity steadily on the rise, with
an expected 345 million people projected to experience intense
food insecurity this year, more than double the level just 3
years ago. Sustained democratic backsliding, marked by
corruption and increased repression. A global debt crisis
amongst the poorer countries coming out of COVID-19. Economic
competition and coercion from authoritarian actors, like the
PRC.
And while we continue to focus on Russia's invasion of
Ukraine, there are many other humanitarian crises around the
world: the Horn of Africa, the Sahel, Pakistan, Syria, Yemen,
and many others.
USAID is tasked with a leading role in the U.S.
Government's response to these many challenges, which is also
critical to bolstering U.S. national security, our reputation,
and our place in the world. I am grateful for the service of
all the development professionals at USAID, who I have had the
opportunity to visit in a dozen countries in the last few
months.
I am proud of the work we have done here, on a bipartisan
basis on this Subcommittee, and Full Committee, to help you
better grow, equip, and support USAID's workforce, to apply
lessons learned from your predecessors, and adapt the Agency to
strengthen locally led development, and cooperation with the
American private sector. I know we have a lot more to do
together.
I look forward to hearing from you this morning about your
proposals for how we can best leverage our development tools to
advance our national interests, how you define those interests,
where USAID fits in, and what you are doing to better tell the
story, globally, of USAID's vital work.
I will say to you at the outset what I said in our previous
hearing to Secretary Blinken. Your task is daunting, and this
subcommittee must both rigorously oversee your work, and ensure
you have the support and resources you need to protect and
advance our national security and our national values. You
cannot be asked to do more with less.
That is why I am encouraged by the fiscal year 2024 budget
request for your Agency, and the rest of the State and Foreign
Operations budget, as the challenges of our time demand bold
investments.
Thank you Administrator Power, for joining us. I look
forward to your testimony.
And I will now turn to Vice Chair Collins.
OPENING STATEMENT OF SENATOR SUSAN M. COLLINS
Senator Collins. Thank you very much, Chairman Coons. I am
delighted to join you today. As is sometimes the case in the
Senate, there is a conflict for the Ranking Member, Lindsey
Graham, with the Judiciary Committee hearing this morning. He
will be attending a little later, but in the meantime he has
asked me to help open this hearing, and serve in the role as
Ranking Member.
I do want to welcome Administrator Power. I know that the
subcommittee looks forward to hearing your testimony on USAID's
fiscal year 2024 budget request, and moving quickly to
questions on such a wide range of issues that you deal with.
I will have questions for you regarding the Reach Every
Mother and Child Act, which Chairman Coons and I intend to
reintroduce soon, along with the others in the Senate. It sets
a goal of the Ending Preventable Maternal and Child Deaths
through such affordable and simple practices as nutritional
supplements, clean birthing practices, and vaccines.
I am also eager to hear your assessment of the situation
for women and girls in Afghanistan, which I view as dire. And
also, your comments on recent steps the Afghan Government has
taken to exclude women from working in international aid
programs and for NGOs. As I look at the situation in
Afghanistan, it appears evident that we are on the verge of
extreme food shortages, and we all know who will be most
affected by that, and that is women and girls.
I also think that there is a very interesting debate on the
best way to help people around the world who are struggling
with hunger: Is it to provide them with food, or is it to teach
them how to grow their own food, so that they can become more
sustained in meeting their needs?
So thank you, again, for being with us today. And I
appreciate the Chairman's leadership.
Senator Coons. Thank you, Vice Chair Collins. We just spent
several days together, thinking about, talking about, and
debating the future of food assistance and humanitarian relief,
and how to make that more efficient. And the opportunity to
work with Senator Collins on the REACH Act, is something that I
welcome.
We now look forward to your testimony, Administrator, and
then we will move to 5-minute rounds of questioning.
STATEMENT OF HON. SAMANTHA POWER, ADMINISTRATOR, UNITED
STATES AGENCY FOR INTERNATIONAL DEVELOPMENT
Ms. Power. Thank you so much Chairman Coons. Thank you,
Vice Chair Collins for your leadership of the entire
Appropriations Committee, and for filling in here today. I look
forward to seeing Ranking Member Graham, and other Members of
the Committee.
But I know how important, as well, the other activities are
that are going on here today--in a way it is a metaphor for the
world, the State of the world. The subjects of the other
hearings that are underway are very near and dear to my heart
and that of the Agency.
Look, the challenge the world faces today is clear, that
decades of development gains that have laid the foundation for
an era of relative peace, stability, and prosperity, are now at
serious risk. During our lifetimes, the U.S. has played an
absolutely critical role in accelerating tremendous progress in
reducing extreme poverty, in fighting disease, in addressing
hunger, and getting kids, especially girls to school, and in
fueling democracy's rise.
But for now, at least, many of these trends have moved into
reverse. The pandemic decimated health systems, leading to a
resurgence in diseases, from measles, to tuberculosis. It also
battered many countries' finances. And after a decade of heavy
borrowing, and more recently rising inflation exacerbated by
Putin's war, 60 percent of the world's poorest countries are at
or near debt distress. And this is a phenomenon that really is
a new, exacerbating dynamic in today's world.
Natural disasters, of course, just as here in the United
States, are increasing in frequency and intensity, leading to a
sharp rise in humanitarian needs. The upshot of it all, is
stark. For the first time in decades, human life expectancy is
on the decline. And again, that is a composite indicator of all
of the crises that are interlocking, for the first time since
the 1950s, life expectancy is going down globally.
At the same time, of course, democracies are under attack.
Our rivals are using transnational corruption, digital
repression, disinformation, and in Ukraine, actual artillery
and missile fire to undermine freedom, and elevate autocrats.
It is a daunting list of challenges. And I know some
question whether the United States should be taking on these
challenges through our development investments, or whether the
scope of these challenges is just too great to make a
meaningful dent.
But the fact is, our national security hinges on this work.
Deprivation and indignity abroad can fuel resource competition,
political fragility, and extremism that endanger us here at
home. Disease outbreaks, as we well know, can cross oceans, and
recessions in foreign markets can threaten our own economic
growth.
If we don't lead efforts to take on these challenges, the
People's Republic of China and Putin are ready to step in,
whether through opaque loans on unfavorable terms, or with
mercenaries in tow.
An international order that values democracy and human
rights, and respects international borders is not a given.
Indeed, authoritarian actors are challenging and aiming to
reshape it. We have to invest in the stable and humane world
that we know the American people need.
USAID is privileged to have a leading role in tackling the
most significant challenges of our time, in close coordination
with our interagency partners, advancing diplomacy and defense.
And we are very, very grateful to the American people, and to
you, for giving us the resources to make such a difference.
That said, we know that to drive progress on the scale we
need, we have got to be catalytic. We have got to bring other
donors, including non-traditional donors, we have to use our
resources to bring in the private sector, we have to work with
and through multilateral institutions, foundations, and local
organizations in our partner countries.
So USAID has set a new reform agenda aimed at delivering
progress beyond our development programs, beyond the resources
that you all provide. That means using our expertise, our
convening power, our hustle, our advocacy to draw in others, to
leverage additional resources, to spark innovation, and to
inspire broader movements for change.
The Biden-Harris Administration's fiscal year 2024 request
of $32 billion for USAID's fully- and partially managed
accounts will allow us to make more of that transformative
impact.
We will invest in countries experiencing democratic
openings, helping them show that democracy delivers tangible
economic results for citizens. We will work with nations to
attract private sector investment, and drive broadly shared
economic growth. We will support countries that are rebuilding
their decimated health systems, and we will meet growing
humanitarian needs, not just with emergency assistance, as Vice
Chair Collins was speaking to, but longer term investments in
resilience, and with their--in their ability to grow for
themselves.
And crucially, we will invest in USAID's workforce to carry
out this ambitious agenda. Since 2019, our Operating Expenses
funds have increased at half the rate that our programming has
grown, giving us more to do with fewer people and resources.
But this budget will help us invest in the people and the
systems that we need to power an Agency that is nimble, and
responsive, and critical for our foreign policy.
We know that with the United States leading the way, the
world can drive meaningful progress against our toughest
challenges, because we have decades of gains in global health,
in education, and in fueling prosperity to prove it. It is on
us now to resume that progress.
And with that, I look forward to your questions. Thank you.
[The statement follows:]
Prepared Statement of Administrator Samantha Power
Thank you Chairman Coons, Ranking Member Graham, and distinguished
members of the subcommittee.
The challenge the world faces today is clear: The decades of
development gains that have laid the foundation for an era of relative
peace, stability, and prosperity are at serious risk.
During our lifetimes, the United States has helped accelerate
tremendous progress in reducing extreme poverty, fighting disease,
addressing hunger, getting kids in school, and fueling democracy's
rise.
But now, many of these trends have moved into reverse. The pandemic
decimated health systems, leading to a resurgence in diseases from
measles to tuberculosis. It also battered many nation's finances. After
a decade of heavy borrowing and the resulting inflation--exacerbated by
Putin's war--60 percent of the world's poorest countries are at or near
debt distress. And natural disasters are increasing in frequency and
intensity, leading to a sharp rise in humanitarian needs. The upshot of
it all is stark: For the first time in decades, human life expectancy
is on the decline-- while extreme poverty is on the rise.
At the same time, democracies everywhere are under attack. Our
rivals are using transnational corruption, digital repression,
disinformation--and in Ukraine, actual artillery fire--to undermine
freedom, elevate autocrats, and curry favor.
It's a daunting list of challenges. And I know some question
whether the United States should be taking on these challenges through
our development investments, or whether the scope of the challenges is
too great to make a meaningful difference.
But the fact is our national security hinges on this work.
Deprivation and indignity abroad can fuel resource competition,
political fragility, and extremism that endangers us here at home.
Disease outbreaks can cross oceans, and recessions in foreign markets
can threaten our own economic growth.
And if we don't lead efforts to take on these challenges, the
People's Republic of China and Putin are ready to step in, whether
through opaque loans on unfavorable terms, or with mercenaries in tow.
An international order that values democracy and human rights and
respects international borders is not a given. Indeed, authoritarian
actors are challenging and aiming to reshape it. We have to invest in
the stable and humane world we need.
USAID is privileged to have a leading role in tackling the most
significant challenges of our time, in close coordination with our
interagency partners advancing diplomacy and defense. And we are
grateful to the American people--and to you--for giving us the
resources to make a major difference.
That said, we know that to drive progress on the scale we need, we
have to bring other donor countries, the private sector, multilateral
institutions, foundations, and local organizations in our partner
countries along with us.
So USAID has set a new reform agenda aimed at delivering progress
beyond our development programs--using our expertise, convening power,
and advocacy to draw in others, leverage more resources, spark
innovation, and inspire broader movements for change.
The Biden-Harris Administration's FY 2024 request of $32 billion
for USAID's fully- and partially-managed accounts will allow us to make
more of that transformative impact.
Alongside our partners, we'll invest in countries experiencing
democratic openings, helping them show that democracy delivers tangible
results for citizens. We'll work with nations to attract private sector
investment and drive broadly shared economic growth. We'll support
countries that are rebuilding their decimated health systems. And we'll
meet growing humanitarian needs not just with emergency assistance, but
long-term investments in resilience.
And, crucially, we'll invest in our workforce to carry out this
ambitious agenda. Since 2019, our operating expense funds have
increased at half the rate that our programming has grown--giving us
more to do with fewer people and resources. But this budget will help
us invest in the people and systems we need to power an Agency that is
nimble and responsive.
We know that, with the United States leading the way, the world can
drive meaningful progress against our toughest challenges--because we
have decades of gains in global health, education, and prosperity to
prove it. It's on us, now, to resume that progress.
A few months ago, President George W. Bush posed a question.
``What's the role of a great country in the world? Is it to look
inward? Is it to think about how to solve big problems?'' As he said,
``We all decided to work together to solve big problems.'' Let's
continue that legacy. Thank you.
______
Prepared Statement of Acting Inspector, Nicole L. Angarella, U.S.
Agency for International Development
Chairman Coons, Ranking Member Graham, and Members of the Subcommittee:
Thank you for the opportunity to provide a written statement for
the subcommittee's hearing on USAID's fiscal year 2024 budget request.
The USAID Office of Inspector General's (OIG) mission is to safeguard
and strengthen U.S. foreign assistance through timely, relevant, and
impactful oversight. We appreciate the opportunity to share our views
on challenges facing USAID's programs and operations.
USAID is called upon more than ever to deliver worldwide support on
behalf of the American people. It has been the primary agency providing
non-security assistance to Ukraine, while continuing its mission of
providing humanitarian and development assistance in over 100 countries
across five continents. In fiscal year 2022, USAID processed grants and
contracts with $36.4 billion obligated through more than 22,000
acquisition and assistance actions.
USAID OIG's independent audits, evaluations, inspections, and
investigations help identify USAID's current challenges in
administering programs and operations. This statement draws from our
annual Top Management Challenges report and aligns with our priority
oversight areas.\1\ The following four Top Management Challenges that
we identified for USAID in November 2022 ring true today:
1. Establishing optimal conditions for Agency staff and programs to
succeed;
2. Mitigating risk in Agency operations;
3. Countering corruption, abuse, and malign influence; and
4. Maximizing the impact of monitoring and quality data. Each of
these challenges is expanded upon below.
\1\ USAID OIG, Top Management Challenges Facing USAID in Fiscal
Year 2023, November 16, 2022.
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establishing optimal conditions for agency staff and programs to
succeed
Strategic workforce planning is a challenge for USAID and has been
noted by the U.S. Government Accountability Office (GAO) as a high-risk
issue across the U.S. government.\2\ Our recent oversight work
highlights constraints within USAID operations that inhibit adequate
staffing and workforce support for humanitarian and development
assistance programming.
These constraints include hiring impediments, increased reliance on
contractors, and various skills gaps among staff. USAID faces a
critical shortage of contracting and agreement officers that adds risk
to awards management. In addition, our work has shown that the Agency
lacks guidance and tools for a comprehensive approach to human capital
management and needs an effective central mechanism to track and close
skills gaps.\3\
USAID's reliance on short-term, limited-capacity contract staff is
of particular concern in the Bureau for Humanitarian Assistance and
Office of Transition Initiatives.\4\ While the Agency has expanded its
humanitarian assistance programming in recent years to respond to
disasters and other catastrophes worldwide, USAID's staffing levels
have not kept pace with the shift. The long-lasting nature of the
crises these offices respond to would benefit from staffing stability
and longer-term personnel. Still, efforts to address these staffing
challenges are hindered by budget constraints, lack of data, and the
absence of human capital metrics for managing contractors.
Another aspect of strategic workforce planning is initiatives to
improve diversity. USAID's diversity, equity, inclusion, and
accessibility efforts aim to improve diversity in its workforce, but
current processes do not include data on contract staff. The required
diversity reporting only includes civil service and Foreign Service
staff, making up just 40 percent of USAID's workforce. Capturing
additional data could inform efforts to improve diversity in the
Agency's workforce and cultivate more positive outcomes for its staff
and beneficiaries around the world.
We have provided the Agency with recommendations to improve its
strategic workforce planning, contract staff management, and diversity
efforts, including the need for USAID to conduct an assessment and
develop a comprehensive plan to create a sustainable workforce. In
response to this audit, the Agency has provided a multi-year plan to
address our recommendations in strategic workforce planning.
mitigating risk in agency operations
Our oversight work has highlighted the importance of USAID
identifying, documenting, and responding to risks to its programming.
This is particularly relevant as the Agency attempts to provide more
funds through local organizations and respond to complex emergencies.
In addition, continued vigilance is required to address risks tied to
information technology (IT) and further supply chain management.
---------------------------------------------------------------------------
\2\ GAO, Priority Open Recommendations: USAID (GAO-22-105799), May
18, 2022.
\3\ USAID OIG, ``Strategic Workforce Planning: Challenges Impair
USAID's Ability to Establish a Comprehensive Human Capital Approach''
(9-000-22-001-P), May 25, 2022.
\4\ USAID OIG, ``Contractor Use for Disaster and Stabilization
Responses: USAID Is Constrained by Funding Structure but Better Data
Collection Could Improve Workforce Planning'' (E-000-22-002-M),
September 29, 2022.
---------------------------------------------------------------------------
While localization remains a top priority for USAID, the pool of
capable, eligible local partners must grow for the Agency to achieve
its goals. For example, our recent audit of the U.S. President's
Emergency Plan for AIDS Relief (PEPFAR) programs found that only a
limited number of local partners were ready to implement USAID
programs, which delayed the benefits of transitioning HIV programming
to these partners.\5\ Bureaucratic hurdles, budget cuts in capacity
development for local partners, and inconsistent compliance with award
provisions are also challenges to localization efforts. In addition,
managing risks in localization requires metrics for tracking success,
increased staff capacity, and more oversight and support than currently
provided via large and established international nongovernmental
organizations (NGOs).\6\
USAID must also address risk from the outset of complex
emergencies. Our oversight work on USAID's humanitarian responses
highlights the need for greater attention to planning for and managing
risks in its programming. Past audits of programming in Yemen\7\ and
the response to the Venezuela migrant crisis\8\ found the Agency lacked
a process to respond to diversions to sanctioned groups, environmental
hazards, partner safety and theft, and misuse of cash assistance. Time
and again, we have seen new and dynamic complex emergencies and
conflict environments pose challenges for USAID, including in
Afghanistan and recently in Ukraine, where lessons learned from
previous complex emergencies should better prepare USAID to plan for
continuity of operations in the complex environments in which they
operate with small, rotational staff.
IT and supply chain management pose other risks to the Agency that
require further vigilance. Our previous audit work points to issues
such as the use of unauthorized applications on mobile devices.\9\ GAO
noted that risks of reliance on IT include attacks by foreign
adversaries and the introduction of counterfeit products in the supply
chain.
countering corruption, abuse, and malign influence
Corruption, sexual exploitation and abuse, and malign influence
threaten to undermine USAID's objectives as it provides assistance in
challenging environments. This is especially relevant as the Agency
increasingly uses multi-donor mechanisms, such as UN agencies, with
fewer safeguards than traditional assistance programming. The Agency
can address these threats by tightening controls, strengthening
processes that facilitate reporting of possible criminal activity, and
ensuring accountability of Agency partners, whether NGOs, contractors,
or multilateral organizations.
---------------------------------------------------------------------------
\5\ USAID OIG, PEPFAR in Africa: USAID Expanded the Use of Local
Partners but Should Reassess Local Partner Capacity to Meet Funding
Goals (4-936-22-001-P), December 13, 2021.
\6\ USAID OIG, Despite Optimism About Engaging Local Organizations,
USAID Had Challenges Determining Impact and Mitigating Risks (5-000-19-
001-P), March 21, 2019.
\7\ USAID OIG, Humanitarian Assistance in Yemen: Opportunities
Exist for USAID to Further Strengthen its Risk Management Process (8-
199-22-003-P), August 23, 2022.
\8\ USAID OIG, Enhanced Processes and Implementer Requirements Are
Needed to Address Challenges and Fraud Risks in USAID's Venezuela
Response (9-000-21-005-P), April 16, 2021.
\9\ USAID OIG, USAID Implemented an Effective Information Security
Program for Fiscal Year 2021 in Support of FISMA (A-000-22-005-C),
December 7, 2021.
---------------------------------------------------------------------------
Corruption and abuse by bad actors are a risk in USAID programs
with a large outflow of assistance, such as in Ukraine. To safeguard
programming, USAID can improve its pre-award certification process\10\
to capture whether prospective award recipients have engaged with
actors sanctioned by the U.S. government for corrupt activity. In a
recent audit, USAID made progress in mechanisms to prevent the risk of
sexual exploitation and abuse in their development activities but has
yet to take action on several related recommendations.\11\
USAID increasingly relies on UN agencies and other international
organizations to furnish assistance to beneficiaries. To date, the
Agency has appropriated $22.9 billion in direct budget support via the
World Bank's multi-donor trust fund to the government of Ukraine to
support non-security general budget expenses, including salaries for
civil servants, teachers, healthcare workers, and other government
employees, and social spending needs, including pension expenses and
payments to internally displaced persons. Our January and March
evaluations found that the agreement between the World Bank and the
Ukrainian government contained provisions enabling the World Bank to
respond to credible and material allegations of fraud and corruption
and to request reimbursement for expenditures that were used in a
manner inconsistent with the grant agreement.\12\ We will continue to
test the effectiveness of these established mechanisms.
To ensure accountability and prevent criminal activity and abuse,
USAID needs to improve its processes for obtaining timely and
transparent reporting by its implementing partners, including UN
agencies. Inconsistent and infrequent reporting of allegations of fraud
and abuse despite increases in Agency support in high-risk areas
indicate the need for more oversight and additional outreach to educate
partners about reporting tools. Additionally, the Agency should take
actions to strengthen the government's ability to prosecute foreign-
based NGOs; particularly by creating a forum consent clause in its
awards that enhance USAID's ability to recover taxpayer funds misused
or fraudulently obtained.\13\
USAID also faces challenges within its programming to UN agencies.
USAID OIG's access rights to UN documents, records, and other
information extend only so far as USAID's contractual agreements.
Access limitations to information held by the UN can delay or restrict
our audit and investigative work and preclude USAID from making
informed decisions regarding ongoing or future funding to UN agencies.
With one quarter of USAID's program funds going to the UN World Food
Programme, and significant funding through other UN agencies, such
programs must be subject to oversight by my office.
Finally, USAID is challenged to counter influence from foreign
actors such as Russia and the People's Republic of China. From our
audit work in countering malign Kremlin influence, we recommended the
Agency implement a process for monitoring risks and engaging with
relevant
---------------------------------------------------------------------------
\10\ USAID OIG, ``Key Considerations to Inform USAID's Response in
Ukraine,'' Advisory, July 22, 2022
\11\ USAID OIG, USAID Should Implement Additional Controls to
Prevent and Respond to Sexual Exploitation and Abuse of Beneficiaries
(9-000-21-006-P), May 12, 2021.
\12\ USAID OIG, Direct Budget Support: Ukraine Supplemental
Appropriations Act, 2023, Mandated Assessment (8-000-23-001-M), January
5, 2023.
\13\ United States ex rel. TZAC v. Christian Aid, No. 21-1542 (2d
Cir. June 16, 2022).
---------------------------------------------------------------------------
stakeholders.\14\ USAID continues efforts to counter increasing
levels of China's influence in developing countries, given concerns of
conflict with U.S. values. We have an ongoing audit that will assess
the extent that the Agency has shifted programming to counter China's
influence in Africa.
maximizing the impact of monitoring and quality data
Gathering, reporting, and acting on reliable data represents an
ongoing challenge for USAID, particularly in locations with access
limitations. Improving data quality is critical to keeping programs on
track and ensuring top-notch, data-driven decisionmaking.
USAID can address vulnerabilities by monitoring programming
throughout the development lifecycle, particularly in complex operating
environments. Monitoring helps USAID track progress towards meeting the
development goals of its programs, but the process is constrained and
sometimes not as effective as intended. Recent oversight work
highlights shortfalls with third-party monitors, such as concerns with
the quality of their products and lack of guidance on how to use their
services. Additionally, USAID access to sites in non-permissive
environments, such as Ukraine, Afghanistan, and Iraq, constrains the
capacity to monitor effectively.
Recent audit work also illustrates the need for USAID to ensure
reliable financial and performance data. Specifically, the reports
noted weaknesses with reporting data to USAspending.gov and
PaymentAccuracy.gov, and the need to take corrective action related to
validating data between its Development Information System (DIS) and
the State Department's foreign assistance data system.15 Additionally,
we noted weaknesses in quality control measures in PEPFAR's data system
in select African missions.
concluding observations
As this Committee considers USAID's fiscal year 2024 budget
request, USAID OIG remains committed to briefing Congress on its
independent oversight of USAID's programming. Our planned and ongoing
audits, evaluations, inspections, and investigations are designed to
improve efficiency, effectiveness, and accountability in USAID's
foreign assistance programs, and deter fraud, waste, and abuse that can
jeopardize program success. We appreciate the opportunity to provide
this statement.
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\14\ USAID OIG, Countering Malign Kremlin Influence: USAID Can Do
More to Strengthen Its CMKI Development Framework (8-199-22-002-P),
January 26, 2022.
\15\ USAID OIG, USAID Complied in Fiscal Year 2021 With the Digital
Accountability and Transparency Act of 2014 (0-000-22-002-C), November
6, 2021; USAID OIG, USAID Complied in Fiscal Year 2021 With the Payment
Integrity Information Act of 2019 (0-000-22-013-C), June 10, 2022;
USAID OIG, USAID Was Not On Track To Achieve Performance and Cost
Savings Goals for the Development Information Solution System (A-000-
21-001-U), May 6, 2021.
Senator Coons. Thank you, Administrator Power. Without
objection, I am going to actually have 7-minute rounds here,
and that means we may do one round. We will see how many
members come back from the other hearings.
Let me start, Administrator, if I could with a comment you
just made about the reform agenda at USAID, with a goal I think
I am quoting, ``To leverage resources and spark innovation.''
Private sector engagement is something many of us have urged
that USAID take more seriously, engage more actively on,
whether it is in food security, global health, conservation.
There is, today, a huge amount of philanthropic and private
sector funding, a big change from 50 years ago when the vast
majority of development was direct U.S. Government grants.
Today, we have got iconic foundations, we have got significant
private sector investment, and many of the countries in the
Global South would welcome U.S. private sector engagement and
investment as much as direct assistance through USAID.
Something the Ranking Member and I are working on, the U.S.
Foundation for International Conservation, would leverage and
mobilize philanthropic and private sector investment. The
Development Finance Corporation is, of course, another way that
we are trying to crowd in private sector investment. Your
budget request includes some specific programs intended to
enhance your engagement with the private sector, but I would be
interested--sort of more broadly speaking, you are the Vice
Chair of the DFC Board: What more could we be doing to unlock
the DFC and to use its leveraging power?
Give us a little more detail on this reform agenda, and
what are the areas where you think you have been most
successful? Where are there some lessons learned in terms of
partnering with the private sector? What are the reasons the
private sector might be hesitant or resistant to partner with
USAID? And what, if any, issues are there that we could help
address around your authorities, your staffing, culture, other
issues?
Ms. Power. Thank you so much. Well, I think as you and I
have discussed, there is probably the most substantial gap
right now, between what countries are asking for and what we
provide is in the economic growth domain. And if you contrast,
for example, the resources that we invest with the tremendously
impactful PEPFAR program, where, you know, you are looking at
billions of dollars every year, more than $6 billion, you know,
spread across a number of countries, again, doing enormous
good.
Contrast that with the fairly modest investments in
economic growth and economic development. And every time you
travel around you hear from leaders, what do we want: we want
to go from aid to trade, we want jobs, jobs, jobs for our
burgeoning young populations, and so forth.
And I think there is--I don't want to speak for everybody,
but I think this is a broad view--a broad embrace, broad
support for investments in economic growth, and economic
investment in trade facilitation, in assistance right now for
debt, you know, debt technical assistance as countries seek to
restructure debt at very vulnerable times.
So I don't sense a lot of opposition to this agenda, but
because USAID now, is more than 90 percent earmarked, it
doesn't leave a lot of give for that kind of programming, and
there is not the same constituency for economic growth,
economic development, trade facilitation, banging down the door
up here, as there is for some of these other incredibly
important programs that we have, like Feed the Future, like
PEPFAR, et cetera.
So I think that as we move to a progress beyond programs'
mindset, one that also looks to bring to USAID people who have
experience either in the private sector or working with the
private sector, as we seek to take advantage of being the Vice
Chair of the Board of the DFC, as we work with Treasury, for
example, on MDB reform or evolution, to try to get more out of
those institutions to manage, for example, agricultural
resilience, climate resilience and the like, that USAID really
needs to build out its capacity in this domain, and we have
taken modest steps.
With your support, we created this year, an EDGE Fund which
is just $50 million, $50 million is a lot of money, but I think
we could do a lot more in that space. EDGE is, the idea is that
instead of looking to the private sector to do philanthropic or
corporate social responsibility work, we are actually thinking:
What is their comparative advantage?
You know, are they, in fact, a bank that could provide
microfinance to a young female smallholder farmer? Is it a
tourism business that might go to a very underdeveloped area
where indigenous people are living and where development gains
are very far behind elsewhere in the country?
But they are a little nervous that it won't be productive,
so maybe USAID can work with that tourism operator to do the
assessment to show that, in fact, that investment will be
worthwhile. So modest infusions of resources in order to de-
risk, in order to provide loan guarantees, in order to do
assessments that private sector actors that--where the barriers
to entry may be ones that weaken lower, in essence.
So I think this is a really exciting area for us to go, it
is also again, probably the most aligned with where the United
States is interested in advancing its standing, as well as it
is stability and prosperity, it is what we are hearing the most
about. Thank you.
Senator Coons. I am about to run out of time, apparently.
So I am just going to pose a second question. We will come back
to it. I suspect others will be interested in the same topic.
If what we hear in country after country is: we welcome
U.S. investment, we welcome U.S. companies, we want help
transforming our economy--the agriculture sector is one that is
particularly critical, particularly in Africa. There is a huge
amount of potential for future growth, but in many countries
they are net food importers. You are requesting a significant
amount, again for humanitarian aid, there are hundreds of
millions of people knocking on famine's door.
I am interested in talking at some point about Feed the
Future, and how we strengthen its resiliency, and its Ag system
transformation capabilities. And in Food for Peace which is
going to be part of the Farm Bill, we have other folks who I
suspect are also interested in the topic. But in general, I
want us to, by the end of this hearing have had a conversation
about the future of Feed the Future.
I am going to defer now to my Vice Chair--the Vice Chair of
the Full Committee, and my Ranking for this hearing, Senator
Collins.
Senator Collins. Thank you, Mr. Chairman.
I want to return to the issue I mentioned in my opening
statement about the fact that millions of lives are
unnecessarily lost each year, globally, due to preventable
maternal and child deaths. While progress has been made in
reducing maternal mortality rates, recent data suggests that
these improvements are slowing.
In response, the Chairman and I, in the last Congress,
introduced the REACH Act, the Reach Every Mother and Child Act.
We are going to be, shortly, reintroducing that bipartisan
bill. It proposes critical reforms to increase the
effectiveness and impact of USAID's maternal and child survival
programs.
It would require a clear, coordinated, government-wide
strategy for ending these preventable deaths and ensuring that
USAID focuses quickly on scaling up the highest impact,
evidence-based interventions. I mentioned three of those: clean
birthing practices, vaccines, and nutritional supplements. The
bill would also require the appointment of a maternal and child
health coordinator.
My question is: Do you support those goals? Do you think
legislation along the lines of the REACH Act would be helpful?
Ms. Power. Thank you, Senator. Let me add to just something
I said in my opening comment about debt, and the devastating
effects of debt, just with one statistic. African countries are
going to spend $70 billion in debt service payments this year,
which is more than the total that they will receive in
development assistance.
Which, why do I mention that in the context of your
question? That is not a non sequitur. It means that, again,
these health systems that have been decimated by COVID, it is
precisely on areas like maternal and child health, that we see
that their inability now, to have the budget space to restore
those systems, or to make more substantial investments, it is
precisely on areas like maternal and child health where we see
the effects on lives lost.
In the fiscal year 2024 request, there is $910 million
included specifically for cost-effective and proven life-saving
interventions to strengthen delivery systems, to accelerate the
reduction of maternal newborn and child health. This, unlike
some areas in development, is a very gratifying one to work in
because you really see the impact. We know what works. Your
bill, I think speaks to much of this. It is a question of
resourcing those investments, scaling them, getting to the
``Last Mile'', and to more remote areas.
I think the bill, we are very grateful to you for your
leadership in this domain; thankful, not only for your
introducing this legislation, but your whole career of really
being emphasizing maternal, and child survival.
Our Bureau for Global Health is looking at the bill. We
think it is broadly aligned with our efforts. We are taking a
close look at the idea of the coordinator position, sometimes
we can layer our efforts in a way that actually slows us down,
but we would love to just work with you and your staff to see
this through. And you know, anything we do that deepens our
work in a domain where we know, dollar-for-dollar that we can
save lives in this way, is very worthwhile. So thank you.
Senator Collins. Thank you. Turning to Afghanistan, since
the United States' disastrous withdrawal, and the Taliban
takeover in August of 2021, the United States has provided
Afghanistan with an estimated $1 billion in humanitarian
assistance through international organizations and to aid
implementers.
The President's budget request includes a total of $143
million for health, education, and demining programs for
Afghanistan. My concern is this: is that money really going to
get to women and children?
Senator Shaheen, Senator Ernst, and I, went to the U.N.
shortly after the Taliban prohibited education for girls past
the sixth grade, and believe it or not, one of the officials we
met with said that she was shocked, shocked that the Taliban
broke its promise. How anyone could be shocked that the Taliban
resumed its extraordinary harsh measures against children, and
against girls and women, is beyond me.
But it has gotten worse since then. The Taliban issued an
edict last year to prohibit women's participation in the
delivery of assistance in Afghanistan, and last week took a
step further by saying that female Afghan staffers employed
with the U.N. can no longer report for work.
What does all this mean for the delivery of assistance to
women and girls in Afghanistan? Are we really going to be able
to reach them?
Ms. Power. Thank you. Well, obviously our assistance
posture in Afghanistan is radically different today, even
before these edicts, it was radically different than it was
when the Ghani government ran large parts of the country, or
controlled large parts of the country.
So we have moved, you know, much more into an emergency
assistance posture. We are still the largest humanitarian
donor, you know, especially with all of the investments that
the American people, and American soldiers, and others have
made over the years, not wanting to see full-scale famine in
Afghanistan was a major objective of ours over the course of
last year, and we have had broad support up here for that.
We have worked through international partners so that the
benefits do not accrue to the Taliban, and that the resource--
the food, particularly, goes directly to the Afghan people. But
that is not--really, the direction of your question is on
educational gains, on health. I think what we see with these
edicts, it is just how unbelievably counterproductive they are,
particularly in the health sector.
So many of the partners that USAID and the U.S. Government
support, rely on women to be providing health services, that is
actually required because of Taliban laws, and so when you then
say health--you know, females can't be health workers, what
does that mean for health services altogether.
So I will say this. We are in the health sector, working
where women are still able to serve their clientele,
enforcement and implementation of these edicts has been uneven
across the country, so there are still provinces where we have
been able to maintain our programs but a number of our partners
have suspended programs because, again, they don't work without
women actually being able to do--to perform those services.
In the education area it is even more tortured, but we are
ramping up our online programs for girls who are not able to
attend school in person, and I do think that can be a major
growth area for USAID over time.
Senator Collins. Thank you.
Ms. Power. Thank you.
Senator Coons. Thank you, Vice Chair Collins.
Senator Merkley.
Senator Merkley. Thank you. And welcome to you
Administrator Power. And thank you for your assistance in
lobbying for us to complete a trip to look at USAID programs in
Vietnam and in Indonesia. The delegation had a powerful
experience and I will ask a couple questions related to that.
In Vietnam we really wanted to reinforce support for the
Leahy programs to heal the wounds of war. And in the
President's budget, it has a $197 million, potentially, to be
used for remediation of dioxin. And this would really be the
Bien Hoa Base, where there is a huge hotspot, and it is a
massive, massive cleanup effort. And if anyone has seen the
pictures of the mountains of barrels of Agent Orange, and how
they leaked into the land there, would understand the
importance of this.
And also when we have a program for children with
disabilities that stemmed from dioxin effects, and it is a
moral responsibility, it is a big program. But also, later in
the President's budget, it says that there will be $20 million
for dioxin remediation, and it is a little confusing. Is the
President's team planning to or proposing that we allocate $197
million? Or proposing that we are allocating $20 million?
Ms. Power. I would have to get back to you on those two----
Senator Merkley. Okay. We will follow up.
Ms. Power [continuing]. Line items in the Excel sheet, but
certainly our investments are much more substantial than $20
million, I mean, given that the air base that you and I both
visited, the part that we have remediated, is a very small part
of what we intend to remediate, we are bringing in very heavy
machinery, it is a multi-year effort.
So I think it is the first number, but maybe it is a
combination. But we will get back to you.
Senator Merkley. I really salute the administration's
commitment to those--to the four programs: So one is the dioxin
cleanup, one is the disabilities with children, and a third is
continuing the demining, and the fourth is the Wartime
Accounting Initiative, in which we bring the best data
management and the best DNA analysis to help return martyrs to
Vietnamese families.
These four programs are so deeply valued in Vietnam and
they have created a foundation for a relationship where we work
on many other missions--other economic missions, and so forth,
so, well done.
It is exciting, as someone who grew up during the Vietnam
War, to see the positive relationship that we now have with
Vietnam, and hoping to build on that.
I want to turn to Indonesia, the palm oil plantations and
the coal companies are engaging in pretty steady deforestation.
The Government doesn't really like to talk about that, and
tells us not to worry, but there is iconic species there,
including our very close cousins, the orangutans. And they
could be a powerful economic development instrument for
Indonesia, in terms of drawing the world to visit these
amazing, amazing creatures, and ensuring that they are saved.
And so I just want to encourage USAID who is trying to
negotiate with Indonesian Government to secure more support for
those programs. It has been a tough negotiation. I am hoping
that it can be completed.
But I want to turn to a different piece, which is the
USAID's Climate Strategy says it seeks to promote a safe and
secure political environment for indigenous peoples, human
rights, and environmental defenders. We have seen more and more
environmental defenders slaughtered across the globe, 1,733
environmental defenders killed in the last decade.
And how do we actually weigh in, in a positive way, to
enhance safety for environmental defenders?
Ms. Power. Thank you. And just on your first point about
the orangutan in Indonesia. I mean, this is something USA tries
to do in every country. If we see, and do a market analysis
about tourism potential, particularly as a way of diversifying
economies that are often dependent on particular commodities,
or resources, or services, we leap, and I think that you have
given a great example of that.
I think we are working on the MOU with the Ministry, I
think that you all might have met with on your trip. It is not
there yet. It has been a little bit bureaucratic and a little
bit slower than it should be, given the opportunity and the
need to conserve that population. But we are on it.
On environmental defenders, couldn't agree more. The trend
lines are devastating. I think, as you see, the environmental
movement gain even more traction, globally, and more and more
people want to defend the land, want to conserve nature; that
poses a threat to people who are often well armed, and well
resourced in their own right.
All I can really say is that, depending on the country, we
sometimes have dedicated Human Rights Defender funds under
which environmental defenders would fall, because sometimes it
is not just physical threats, but also legal injunctions, and
so forth.
Our diplomacy here is key, the work that INL does with
court systems, often in partnership with USAID is key, when you
have judicial integrity, when you have legal systems that work,
then that is when you actually see a deterrent to this kind of
vigilante violence against people who are standing up for
nature. But needless to say, again, the rule of law in so many
of the countries in which we work lags far behind what it needs
to be. And so those environmental defenders are taking their
lives into their own hands in some cases, and there is not the
punishment and the accountability that is needed for them to
feel security in many countries in the work that they do. And
that is also true in this hemisphere, obviously in Brazil, in
Central America, and beyond.
Senator Merkley. I have submitted a request for this budget
to include some dedicated funds for supporting folks who
advocate for, and support environmental defenders, we are just
trying to understand better how it can be most effective.
I have a lot of other questions. It is a big, complicated
world, and there is a million programs USAID is involved in,
but so I will just use my remaining seconds to note on the
orangutan front.
The more you know about their behavior, the more you feel
connected to them. They spend 8 years raising their children;
which is extraordinary in the world of animals, they have
powerful mothering instincts. I remember the first time I saw
an orangutan it was leaning against a wall looking up and
holding its hand up, and spotting its baby that was just
learning to climb, and making sure that if the baby fell she
would catch it.
And there have been so many powerful stories about our
cousins, the orangutans, and we cannot be the last generation
that sees them having a real life in real forests, and so I
keep hoping we can work closely with Indonesia to seize that
responsibility for the human race. And thank you for all the
great work USAID does.
Senator Coons. Thank you, Senator Merkley.
Ranking Member Graham.
Senator Graham. Thank you. I think the best thing we can do
to help the orangutans is make sure they don't watch cable news
to change all of their instincts. So count me in for helping
the orangutans.
Senator Merkley. We will pass that on to the researchers.
Senator Graham. Very good.
Senator Merkley. So thank you.
Senator Graham. How many people are receiving some form of
food assistance due to food insecurity in the world; do you
know, Ms. Power?
Ms. Power. At this moment I am not going to venture an
answer to that.
Senator Graham. Well, I have that number.
Ms. Power. Your staff is better--better than me.
Senator Graham. It is not a trick. There are 345.2 million
people that participate in some food program because of food
insecurity. That number has doubled since 2020. And I have my
friend from Kansas next to me, and they know how to grow food
in Kansas, for sure.
Senator Coons and I really want to get ahead of this
problem. Do you believe the Global Fund has been effective in
combating AIDS and malaria?
Ms. Power. It has been effective, sir.
Senator Graham. Okay. Would you be willing to entertain a
public-private partnership akin to the Global Fund for food
security, where we bring the best and brightest minds
throughout the world to work with our government and hopefully
others, to increase food production? This would not be the
World Food Program, but a more focused approach to increase
food production in unstable regions.
Ms. Power. I think, Senator, you and I have talked about
this a little bit, and would love to go into a more detailed
discussion with you. In principle, more resources, yes, in
principle, private sector involvement at a scale that we don't
yet see, absolutely for it.
Senator Graham. Okay.
Ms. Power. But if I could just--you know, we do have a
number of multilateral funds for food that exist that Treasury
mans.
Senator Graham. Are they working?
Ms. Power. Yes. I mean, here what--yes, in fact. I think
working, but when one looks and sees so many hungry people, and
when one looks and sees, what I think we would all agree, is an
overweighting of resources toward emergency food assistance,
instead of food security resilience which is what you are
getting at.
Senator Graham. Right.
Ms. Power. Yes, but----
Senator Graham. Why has it doubled since 2020?
Ms. Power. Well, I don't think it is a question of there
not being a global fund, there is a set of factors that depend
on----
Senator Graham. No. No. I am saying: Why has the problem of
food insecurity doubled? Why are there 345 million people
needing food assistance? That is twice what it was in 2020.
Ms. Power. Well, first of all, there is more conflict
happening in the world since the end of the Cold War. The
second, we are coming out of a once-in-a-century, if not more,
pandemic. Third, the intensity of climate shocks, and so forth,
and our resources are not keeping up. I mean our Feed the
Future----
Senator Graham. That is my point.
Ms. Power. Yes.
Senator Graham. What I want the Committee to understand,
and Senator Coons has been a great partner on this, we have a
crisis in the world that is really challenging to put your arms
around. You know, there are more people receiving food
assistance because they can't feed themselves than exist in the
United States as a whole.
It has doubled since 2020, and it is going to double again.
So what I would like to do with Senator Coons, in a bipartisan
fashion, is to add capability we don't have today, and tap into
the private sector--there are so many bright minds thinking
about how to improve crop yields in different parts of the
world that could go to unstable regions, fragile states.
What I want is a global food security program that has
metrics. In 5 years how much can we increase production in
Zambia? Just pick your own country and have a focus of where we
can set metrics for ourselves and try to achieve them; that we
use private-public money; and we have more flexibility, more
like the Millennium Challenge Corporation (MCC), the U.S.
International Development Finance Corporation (DFC), and the
Global Fragility Act.
The one thing I am proud of in this Committee is that we
have put new programs on the table that are more metric based.
Has the MCC been a successful program?
Ms. Power. Absolutely.
Senator Graham. The DFC?
Ms. Power. Yes.
Senator Graham. The Global Fragility Act.
Ms. Power. We are working on it----
Senator Graham. Right.
Ms. Power [continuing]. Its implementation, yes.
Senator Graham. Yes. Okay. That is right. ``We are working
on it.'' So what this Committee has done... and I want to thank
you for your leadership, and I want to thank everyone at
USAID,--you are literally doing the Lord's work--and it is
national security in another form. But in the food insecurity
space--somebody asked Elon Musk: Would you give a billion
dollars to the World Food Program? And he said: Will that solve
world hunger? No.
But I can tell Mr. Musk: If you and some of your friends
came up with some cash, and if we created a global food
security fund, it would make a lot of difference. We could
conduct research at Oxford University, at the Universities of
Kansas, South Carolina, and Tennessee, and come up with an
approach that is focused on the most vulnerable areas,
particularly in Africa, and set metrics and use private-public
money--get partners throughout the world to participate--and
drive to better food production. Does that make sense to you?
Ms. Power. It does. If I may, though, make just a plea as
well, for bilateral programs. You see those on your travels, in
an age where the PRC is coming in and causing countries to
incur future debt----
Senator Graham. It is not exclusive, yes, we can----
Ms. Power. But given that resources do not seem to be
expanding at the pace of food insecurity, except in the
emergency area.
Senator Graham. Right.
Ms. Power. What you are talking about is much more
fundamental, and much more important in the long run, which is
these investments in people's own ability to grow, unless the
pie gets bigger, you are going to see something that is a
global public good come at the expense, potentially, of some of
the bilateral programs.
Senator Graham. Right.
Ms. Power. So that is what I would love to work with you
on, making sure that doesn't happen.
Senator Graham. The bottom line is that the bilateral
approach needs to be supplemented with something new because it
is not working. The Global Fund to Fight AIDS, Tuberculosis and
Malaria worked, right?
Ms. Power. But look at the difference between the
investments that the United States has made in the global
health domain, versus those in food. If we would wish to
increase our investments, I assure you, even bilaterally, we
could bring about far more substantial results.
Senator Graham. Yes. But what I am saying is----
Ms. Power. Yes.
Senator Graham [continuing]. I would like to leverage our
money.
Ms. Power. Yes, I am for leveraging it too----
Senator Graham. And I would like the Global Fund approach--
--
Ms. Power. Yes.
Senator Graham [continuing]. Because it just wasn't all
American dollars.
Ms. Power. Yes.
Senator Graham. Contributions to the Global Fund came from
the public sector and other countries. So what I want to do is
create a global food security fund, modeled after the Global
Fund, so we can get other countries helping us and helping
people who are literally starving. We can get the private
sector more involved, not less involved, and we can get
outcomes that we can measure.
So Mr. Chairman, no matter what happens the next election,
who is in charge of this place, I want to try to get everybody
on this Committee working together--and working with the Biden
administration, private sector organizations, and academic
institutions throughout the world--to establish the
infrastructure this year or early next year for a global food
security fund. If we don't do something, the 345 million can
double in the next 4 or 5 years.
Senator Coons. Thank you. If I could just respond to the
Ranking Member; I agree with you that we need to get ahead of
this problem, we need to strengthen productivity in the
agricultural sector and employment in the agricultural sector.
In the countries you and I recently visited, in Niger, in Cote
d'Ivoire, in Botswana, South Africa, in Zambia, in particular,
we have real potential.
Feed the Future, which has expanded from 12 to 20
countries, I think deserves a deep dive from us. There are
other organizations the FAO, the World Food Program, AGRA. I
think Feed the Future and finding a way to create a fund that
helps incentivize agricultural transformation of systems,
comparable to what we have accomplished through PEPFAR, are
well worth an additional meeting, conversation, or even a
hearing. We will see.
Thank you, Administrator.
Senator Van Hollen.
Senator Van Hollen. Thank you Mr. Chairman.
Administrator Power, great to see you. Let me start by
thanking you your team, both in Washington and your team
overseas, for all your good work. I know Senator Merkley
mentioned to you our recent trip to Vietnam and Indonesia.
Thank you for your trip, not that long ago, to Vietnam to
reinforce our support for many of the War Legacy programs that
Senator Leahy championed when he served on this Committee and
in the Senate, including at Bien Hoa Air Force, and I know you
were you were there.
One of the things that came up in our meetings in Indonesia
was the fact that we are trying to finalize this report to help
assist with our biodiversity efforts, to prevent deforestation,
which of course contributes to global climate change. And there
was an agreement, as you know, which is being finalized. I know
there are some issues on the Indonesian side. They did tell us
that the agreement was also in your office awaiting your sign
off. So I just wanted to get an update from you as to where
that was, on our side, with respect to your sign off?
Ms. Power. Thank you. It is in my office awaiting my sign
off. That is my update. But nothing like a trip to Capitol Hill
to focus the mind. So I think that it is more working through
with the Indonesians. You know, I think there is some
bureaucracy, and some permissions on that side. I don't think
that we are holding it back. But I will get on this and get
back to you.
Senator Van Hollen. Thank you. Right, it wasn't clear.
There seemed to be a dance. And we just want to make sure that
we are doing our part. So thank you for your efforts there.
Let me also applaud you and the Biden administration for
your help in providing human rights and other assistance to
folks in the West Bank in Gaza under very, very difficult
circumstances.
I did want to ask you about a proposed law that is being
discussed by the new very right-wing, extreme government,
including by some of the most extreme members of that
government, which is to essentially apply a very big tax to
contributions from foreign governments to NGOs. Obviously some
of the assistance that we provide flows through NGOs.
I just want to quote to you from a Haaretz article, as to
the impact that it would have. I am quoting Michael Sfard, who
is human rights lawyer, an Israeli, there saying, quote, ``If
this section passes, it will be a fatal blow to the human
rights community in Israel.'' And points out that similar
measures had been taken in other countries, where the United
States has been strongly critical of efforts of other countries
to clamp down on these kind of NGOs that do work in civil
society.
Number one, are you aware of this pending proposal? And
two, does it concern you? And if so, have you communicated your
concerns?
Ms. Power. Thank you, Senator. I would say a couple things.
I mean, first I think we have seen in recent weeks just the
vibrancy of civil society, we have seen other things as well,
very worrying developments including an uptick, a very
significant uptick in violence, but NGOs are a critical part of
the fabric of that that part of the world. We have seen NGO
laws, so-called, all around the world and, you know, these
are--this is part of a broader phenomenon of not ``rule of
law'', but ``rule by law''.
And it can deter. It can make operating in a country
financially prohibitive. NGOs in Israel have raised their
concerns about what this would mean, along the lines of what
you have just described. And Ambassador Nides, I know has
engaged on this in Israel. So you know, at this point I don't
an update on the progress or the status of those laws, but we
very much believe that a civil society able to operate is going
to make for a healthier and more stable democracy over time.
Senator Van Hollen. Well, as you know, the U.S. Government,
the Biden administration, has spoken out strongly when other
countries attempt to pass laws that clamp down on civil
society, including through NGOs. So I know Ambassador Nides is
aware of this. Since a lot of our assistance flows through
USAID, I would just ask that you also communicate your concerns
to our counterparts in the Government of Israel. Can you do
that?
Ms. Power. Yes, sir.
Senator Van Hollen. I appreciate that. Now, let me ask you
about--I know one of our long-term objectives, and one of your
personal objectives, has been to make more of our assistance
accessible, equitable, and responsive, including going to local
partners.
More and more effort to transfer assistance to those who
are on the ground, so that we can have a sustainable effort, so
that at some point in time, obviously, we don't want AID to
having to be, you know, continuing funding the same programs
over and over, we want to build capacity of local partners.
And I know that you have set a goal of 25 percent of
USAID's funding going to local partners by 2025. I know it is
an ambitious goal. I think in fiscal year 2021 it was 7
percent, that is the baseline. So either now, or in follow-up,
if you could just provide us with an update on how we are doing
in achieving your goal?
Ms. Power. Thank you. I know we don't have a lot of time. I
would say we are, this year, going to be at 10.2 percent, that
is a very small number compared to the 89.8 percent on the
other side--let me not do the math--but it is 90 percent. But
it is a 38 percent increase in investments in local
organizations.
You might say: Why can't we just turn a switch and change
the way we do things? Working with USAID is hard, compliance
with some of the requirements that come from here, that come
from our own desire to stamp out and ensure we don't have
fraud, waste, or abuse, requires lawyers, it requires
infrastructure, sometimes accounting firms, contracts can run
100-150 pages long.
So we are trying to lower those barriers to entry,
streamline our processes while not in any way sliding our
compliance obligations. And so that is one of the reasons we
have been so grateful for the staffing increases as we
replenish our workforce, as we hire more contracting officers,
we will have more people to work side by side, with these local
organizations to get those numbers up toward our 25 percent
target by 2025.
I will also say that we have set a 50 percent target by the
end of the decade, to be co-designing, co-evaluating, in a
sense where, you know, even if the money isn't going directly
to a local contracting partner or local grantee, there are
still all kinds of ways where we can, you know, change the
power dynamics, and really be following the lead of people who
know best in the communities in which we work. So I want to
keep an eye, again, on making progress in both directions.
Senator Van Hollen. Okay. Thank you.
Ms. Power. Thank you.
Senator Coons. Thank you, Senator Van Hollen.
Administrator, at some point I am going to slip out to the
PEPFAR hearing, that being such a significant part of the work
that we do together, but I will return for the rest of this, if
I can.
Senator Moran.
Senator Moran. Chairman, thank you.
Administrator, thank you for your presence this morning; I
would reinstitute an invitation, in fact we came close to
having a visit together to Kansas, and I would re-up that in
your world. We would love to show you certainly things about
production agriculture, but Feed the Future is a significant
component of our university system, and we would welcome you to
our State.
I want to highlight just a couple of things and then ask a
question. You indicated the importance, in the conversation
with Senator Graham, about bilateral, and you also mentioned in
your testimony about the desire of many countries to have a
trade agreement or trade relationship with us. I would
encourage you within the Biden administration, to encourage the
Biden administration to be interested in trade agreements with
countries.
And we are we are not negotiating around the globe, and
that long-term relationship in an economic trading circumstance
has significant value, and value beyond food aid, and in some
ways value beyond sustainability within that country. So just
an opportunity for me to use this moment to highlight, perhaps
to my colleagues, but to whoever is listening that we need to
negotiate around the globe, for agreements to trade with
countries, and even in a bilateral, if not a multilateral
fashion.
Prior to the Russian invasion of Ukraine, Ukraine of course
was a key supplier, and met many of the needs, particularly in
Africa and Asia, in food supply, I wanted to check in with you
and find out what you could tell me about the Black Sea Grain
Initiative, and what its status is. Is Russia abiding by it? Is
Turkey helpful? What is the United States doing?
And in the circumstance we find ourselves in with this lack
of Ukrainian and Russian grain, any suggestions that you would
provide to me into the subcommittee for how we can best promote
and encourage the opportunity for American farmers and ranchers
to help fill that gap? And--I will leave it there. And then I
have one follow-up.
Ms. Power. Thank you so much. So first let me say that what
we are--and on your first comment: that USAID is very active,
notwithstanding maybe the absence of a Free Trade Agreement,
there is still a lot of trade going on, both vis-a-vis the
United States, and regionally in many of the countries we work.
And we do think there is still a ton to do in the area of trade
facilitation. And that is one of the components of the economic
growth and economic development initiative that we are trying
to spearhead at USAID.
And I think there is also a whole set of questions about
the enabling environment, the regulatory environment, deeper
bureaucratization, that would make it easier, and more
attractive for whether American agricultural companies, or
others in the private sector to invest. And so I do think USAID
can be doing a lot more in that domain, and that will benefit
American businesses, including agribusinesses.
With regard to the Black Sea Grain Initiative, you know,
signed back in July of 2022, I would say it is a mixed picture.
It is the fact that it has basically freed the 20- to 25
million metric tons of grains that were backed up at that time,
has been incredibly helpful to the other countries, like
Somalia, Egypt, Lebanon, that are dependent on grain from
Ukraine.
We just have a shipment going from Ukraine, in fact I think
it arrived yesterday, or it will arrive today, to Yemen. Just a
reminder again of Ukraine as the breadbasket of the world. The
fact that Putin is not only killing Ukrainians, but weaponizing
food for developing countries, is just a complete outrage. I
think Turkey's diplomatic role, the UN's Diplomatic role was
pivotal. We, of course, supported it behind the scenes. The
voices from leaders in the Global South proved pivotal with
Putin as well. I think that pressure from the Global South.
And you now see, as you probably know better than anybody,
you know, cereal price is down, I think for the fifteenth
straight month. And you know, that there are many factors to
that, but certainly getting more grain on the open market is
going to be better for food inflation, writ large.
Right now, Russia is saying that it only agreed to a 60-day
extension, they are saying that publicly. We are hopeful that
the agreement will proceed, as it is meant to, there really
should be an infinite extension that should not be time bound.
This is about food that needs to get to Hungry people all
around the world.
The last thing I would say, Senator, is USAID launched
something called AGRI-Ukraine, that I am incredibly proud of,
which is basically about expanding storage capacity, getting
seeds to farmers, getting micro loans to farmers to replace
equipment that might have been destroyed, but also enhancing
use of rail, road, the Danube, to also be more diversified in
terms of exports, and the means of export.
So it isn't at all a solution, because the Black Sea is
where material and commodities move at scale. But I do think,
you know, on the--at the end of this war, Ukraine is going to
end up much more integrated by road, rail, and river, than it
would have been, had Putin not put in place this blockade. So
this idea of building back better and greater resilience in the
long term, I think is very important.
Senator Moran. That raises--that at least reminds me of
my--the most recent visit to Poland to take a look at Ukraine,
and the Ukrainian plea was for support of infrastructure to get
grain moving in other directions as you, I think, are
describing. And secondly, the need for diesel fuel to get their
equipment to be able to operate in to plant, and to harvest.
And I don't know whether USAID is involved in assisting in
the actual production and harvesting of crops in Ukraine, but
you are shaking your head, yes, and it is encouraging.
The final point I would make is, we have a new Ambassador,
Ambassador McCain to the World Food Program. We wish Ambassador
Beasley well, who I think did an exceptionally fine and
wonderful job, a great human being. Is there anything that is
changing in the relationship between USAID and the World Food
Program, as a result in the change of leadership?
Ms. Power. USAID is WFP's largest funder, thanks to you we
are--I have already been in touch with Cindy last week and will
again this week. Tragically, three WFP aid workers were
murdered in Sudan with the latest outbreak of violence. And,
you know, we look forward to having just the kind of
relationship we had with Ambassador McCain as we did with
Executive Director Beasley.
I don't think we can say enough about the job that he did.
Senator Graham mentioned the doubling of hungry people just in
the last couple years. Well, this Congress stepped up,
heroically, with these Ukraine supplementals and with the
flexibility in those supplementals to be able to reach people
in sub-Saharan Africa. Anybody who was indirectly affected by
the Ukraine War, we were able to use some of those supplemental
resources to reach.
And I just, you know, will remain permanently grateful,
forevermore, to David Beasley for his--for the relationships he
built up here, the advocacy, and the partnership that we had,
and we expect it to be just as strong with Ambassador McCain.
Thank you.
Senator Moran. We share that view of Ambassador Beasley,
and we hope that is exactly the same with Ambassador McCain.
Ms. Power. Should be, yes.
Senator Moran. Thank you very much.
Ms. Power. Thank you, sir.
Senator Coons. Thank you, Senator Moran.
And I will join those comments. I just had a chance to be
with David Beasley, along with the Vice Chair, the group of us
who spent last week looking at food security--this is a
daunting prospect this year, humanitarian relief, sustaining it
is going to be challenging, and then improving food systems to
meet these needs. So I look forward to working with you,
Senator Moran.
Senator Moran. Related and not lengthy, is the drought
situation across the grain producing portions of the United
States of America. We have tremendous challenges. A farmer
yesterday in the office: one-tenth of one-inch of rain in the
last 223 days. And it is not just isolated, it is broad, and it
has another consequence to our ability to feed the world.
Senator Coons. We do have real challenges. I look forward
to working with you on them.
Senator Schatz. And I will return after going to the PEPFAR
Hearing.
Senator Schatz. Thank you, Chair Coons.
Administrator Power, thank you for being here; thank you
for your good work; I am glad to see more foreign assistance
invested in the Pacific Islands, and look forward to hearing
about the work that you plan to do with the larger program
budget and more U.S. Government facilities in the region.
But I do notice that the administration's roughly $80-
million fiscal year 2024 request for the Pacific Islands is far
short of the appropriated amount from fiscal year 2023. Why did
you request so much less than we appropriated in the last
fiscal year?
Ms. Power. Well, I mean certainly the direction that the
President has sent is: more, more, more. We are trying to
leverage our resources given the scarcity, globally, and given,
you know, just what was just described in terms of drought, and
in the case of the Pacific, of course, it is flooding and
extreme weather events, more than drought. So we are opening up
a mission in Fiji, reopening a mission in September probably.
We are surging our staff presence in Papua New Guinea.
And we have programs like the Climate Ready Program which,
basically, allows us to help those countries apply, for
example, for Green Climate Fund money, work with the DFC, and
the MDBs, and others. So my understanding of our requests, as
it relates to the Pacific is that it is more substantial than
what you have just described, more than $122 million.
But it may be that I am combining our climate requests, and
that some of the money is coming into that rather than just our
bilateral, but coming together, certainly we are going to end
up with a much more--with, I think it is a 40 percent increase
from where we were a year ago.
Senator Schatz. So is it 80, or is it 100 or----
Ms. Power. I will have to get back to you. I am not
familiar with that number, but it may be again, that we are
amalgamating our climate investments----
Senator Schatz. Yes. And as you know, I am all for climate
spending.
Ms. Power. Yes.
Senator Schatz. But helping people to apply for other money
is a little bit different. I guess the question I have is: Is
this just a question of finite resources available for a very
challenging program, or are there problems with the ability of
our Pacific Island friends and neighbors to expend the money
responsibly; is that the issue?
Ms. Power. As you know, that we work through implementing
partners in the countries in which we work, so partly, it is
that you can't go from 0 to 60, or from, you know, 30 to 120
overnight. But you know, we also need the--we are building the
staff on the ground. A lot of the Pacific Island countries,
USAID doesn't have any presence at all, so we have to hire
local staff, Foreign Service Nationals, at the very least,
which we are in the process of doing. We manage all these
programs right now out of the Philippines. So some of it is
that it is--you know, it is not going to be----
Senator Schatz. Throughput capacity problem?
Ms. Power. Yes. The human capacity, but I wouldn't diminish
the climate-ready approach, because I think that is why we are
working with Australia, and New Zealand, Japan, other countries
that are also surging investments, because if we can build out
the capacity of the governments themselves, there are
resources, at scale, available, there are private-sector
partnerships, available, but without that staffing capacity, or
human capacity, that ability to put forward a bankable project
or a bankable deal, these countries are not going to be able to
compete.
Senator Schatz. Right.
Ms. Power. So I actually think that program is very
important.
Senator Schatz. Let me move to telehealth; and I have a
rather complicated question, but I am going to simplify it for
you. What is going on with telehealth? You and I have had
multiple conversations about telehealth, there is not a mention
of it in your budget testimony, which I yes I am not trying to
``gotcha you'' here.
Ms. Power. Yes.
Senator Schatz. But I would like to be reassured that we
are moving forward. And I do, I am deeply sympathetic to the
idea that you wake up every morning and telehealth sounds like
a longer lead time item, a less urgent item than the 350-odd
million people who are experiencing food insecurity. So I get
that.
However, we have seen a revolution in telehealth that that
really does leverage the Federal taxpayer dollar, as well as
private sector resources, and it seems to me in far-flung,
places you can really provide high quality care for a lower
cost, if we make the investment, and it is sort of never the
right time to do these investments because there is always
something more urgent on deck.
So can you just sort of tell me where we are with
telehealth, and how you sort out the immediate and urgent
versus the long term, and sort of theoretically smart thing to
do.
Ms. Power. Yes.
Senator Schatz. But given your day-to-day, it sort of--it
may get pushed off your calendar every week.
Ms. Power. Thank you. I think the last time we had an
exchange on this, I pivoted a little bit to talking about
health workers, and investments in health workers, and that
seemed unresponsive I gather. But part of what is true about
USAID's work in the global health area is that by virtue of
earmarks, we are disease-based, by and large, in our
orientation.
That is we have our PEPFAR allocation, we have our HIV/AIDS
allocation, we have our TB allocation, we have our malaria
allocation, we have our Global Health Security, mercifully,
that has gone up in terms of pandemic preparedness. So what we
need to do is we need to integrate attention to telehealth
across these kinds of programs, and that is what Atul Gawande,
you know, again where appropriate, who is our Global Health
leader at USAID, is working to do.
But as well, we are shifting in order to have more of an
emphasis on primary health systems, including healthcare worker
training, who are the foundation for all of this. Now, to be
more responsive, let me say that I will give you a couple
examples of things that we are actually doing in telemedicine
already. In the Middle East and North Africa we have just
launched a program where, in circumstances where stigmatized
populations may not feel comfortable coming into a health
facility, we are piloting our program, for example, for LGBTQI+
individuals who might be stigmatized to be able to secure
online health care, or online consultation. It is just a pilot.
It is not at scale. We are not there yet.
Second, in order to do digital health, you know, a lot of
the areas we work are super remote, don't have 5G, don't have
the--you know, everyone has a smartphone, or a cell phone at
the very least, but we also have what is called the digital--
USAID's Digital Health Vision, which is creating digital
health-enabling environments that are kind of a precursor for
being in a position to actually have health workers care for
patients, or at least consult with patients online.
So I hope, next time I see you at a hearing, that I will
have more to report, but I think mainstreaming this through
our, what amounts to, again, highly earmarked disease-based,
very important life-saving programming is where we need to take
this next.
Senator Schatz. Yes. I understand this is hard, but the one
thing I would add for your--or the people who run these various
programs is, they don't actually have to invent or curate
something brand new now, telehealth is all across the country,
all across the planet. Hospital systems are doing it,
healthcare systems are doing it. And so they don't need to
invent anything at all, they just need to adopt what is already
occurring, and systems, and software, and training, already
exists for telehealth, so it is no longer a mystery on how to
integrate it into an existing program. And that is what we are
going to need to do. Thank you.
Senator Hagerty.
Senator Hagerty. Thank you, Senator Schatz.
And welcome, Ambassador, it is good to see you again. A
couple of points to cover with you today, Ambassador Power;
first, I would like to just start out with a point of concern
that I have regarding USAID funding to Palestinian
organizations that foment hate, that celebrate terrorism, and I
would like to come back to a GAO report, that in March 2021,
found significant gaps in USAID's counterterrorism vetting of
Palestinian groups.
USAID agreed with the report's recommendation, and agreed
to address the shortcomings there. I just wanted to ask you:
what steps you have taken to implement the GAO's
recommendations, and to ensure that USAID funds don't go to
support the activity of Palestinian terrorist groups, or anti-
Semitic organizations?
Ms. Power. Thank you. Well, we take very seriously our
stewardship of taxpayer resources, and the generous allocations
that you all have made to USAID. We have very elaborate vetting
systems in place, including working with an FBI-run terrorism
center to run through all the databases to make sure no
connection between the organizations that we are considering
funding and, you know, terrorism or terrorists.
You know, I think if you have something specific in mind,
which it sounds like you might, happy to talk about it
specifically.
In terms of additional measures put in place we now, as you
know, USAID often works through a contractor, and then a
subcontractor, and sometimes there is a sub to the sub. In this
region we also run our subs to the subs, you know, through this
third layer of verification to make sure, again, no extremist
or terrorist affiliation.
Senator Hagerty. I do think we can do better. I have got a
couple of examples I would like to share with you and perhaps
we can get them addressed. USAID has awarded a grant to a
Palestinian group, whose leaders have attended an anniversary
event celebrating the founding of a terrorist group. USAID has
ordered a grant to a Palestinian group whose leaders praised
the murderer of the U.S. Military attache, called that
murderer, ``a hero fighter''. We are funding them.
USAID has awarded a grant to a Palestinian group whose
Board Members have publicly lauded convicted terrorists as
heroes, and applauded the missile attacks on Israel by Hamas.
Again, these are areas where I can't imagine you would be
supportive of it, but I hope that we can take a deeper dive and
a more critical look.
Ms. Power. Let me just get on the record in condemning and
deploring comments, and actions like that in the strongest
terms. And if you, again, could come back to us and we could
talk about this in detail. I can describe our system in detail,
walk you through the process, and then we can talk about those
specific organizations and what might be afoot.
Senator Hagerty. Yes. It is the vetting process that I am
concerned about. I feel like the vetting process remains
seriously flawed. A couple of other activities that, November
2022, USAID announced a $78,000 grant to a Palestinian activist
group, it is called the Community Development and Continuing
Education Institute. Their leaders have done all the things
that we talked about just a moment ago.
Terrorist glorification of USAID-funded Palestinian
institutions at schools, and other organizations, it is just,
it is happening, and it needs to come to an end. And I
appreciate your focus on that. Specifically, Section 7039(b) of
the annual SFOPS Appropriations, all mandates that USAID take
appropriate steps to ensure that foreign assistance is not
provided to any individual or entity that has a principal
officer who has advocated for terrorism. So it is happening,
and I think there are opportunities to do better here.
And let us turn now, to the broader approach that AID takes
to development. In my view, I think we really need to talk
about getting back to basics. I have traveled and visited with
leaders in developing countries. They are struggling
significantly right now to overcome the impact of the COVID-19
shutdowns. Their economies are struggling, crime is through the
roof in many of these countries, they are seriously challenged.
And as I ask myself: What are we doing to alleviate global
poverty, particularly in these situations? What are we doing to
put these countries on a pathway to some sort of sustainable
economic growth? I see a real disconnect between what I feel
like these countries need, and what we are doing.
And what I would like to refer to is this Climate Strategy
Program that has been put out by USAID. It seems to be matters
that are focused on issues that are not the priorities of these
countries. I think about the best and highest use of our
taxpayer dollars to help these countries where they are today.
And I find myself really scratching my head about what this
document calls for. We specifically have included in this
document using U.S. taxpayers to address--I am going to use a
few quotes here, ``The growing importance of young people
suffering from eco-anxiety.'' And I just wondered, if you
support using U.S. taxpayer funds to alleviate climate anxiety
among foreign children activists.
Ms. Power. Well, first let me say that--I am not sure if
you were here when we had--I had with Chairman Coons, an
exchange about the demand signal we get from other countries
around economic growth and economic development, including
agricultural development, which you and I have talked about in
the past.
Senator Hagerty. Mm-hmm.
Ms. Power. That and climate adaptation resourcing are the
number one and number two asks, often in competition with each
other, and often related since economies around the world are
being so threatened, and in some cases decimated, including
agricultural economies, by extreme weather events, along the
lines of what Senator Moran was talking about here in the
United States.
Senator Hagerty. Climate anxiety by children though. I
mean, I am trying to get to the best----
Ms. Power. Well, I mean, we are not talking about--we are
not talking about, yes, first of all the balance of our
resources goes, for example, to help health clinics get
electrified in places where they are getting to leapfrog other
forms of energy. We are talking about, again, adaptation,
climate adaptation, seeds that are drought resistant, drip
irrigation systems that can work in light of. So the lion's
share of our funding, again, is going to help countries adapt.
And the demand signals are coming from them.
Senator Hagerty. And to, because I am running out of time--
--
Ms. Power. If I may, just on--just because you talked about
that single program; if I may say, again, the investment in
something like that would be extremely modest, but we are not--
this threat is existential for many of the communities in which
we are working. So it actually is the case that when
pastoralists can no longer raise livestock, we are seeing
massive spikes in suicide, if you can believe it. In those
families, in the Horn of Africa, 9 million livestock have died.
What do those pastoralists do, who have been doing that for
generations?
Senator Hagerty. My suggestion is, we focus on how we help
the pastoralists directly, rather than trying----
Ms. Power. Well, I think we----
Senator Hagerty [continuing]. To fight this with some
psychiatric program.
Ms. Power [continuing]. Well, we also don't want them to
commit suicide in the meantime.
Senator Hagerty. Absolutely, we don't want them to do that,
but focus on the basics.
Ms. Power. Right. So actually, working with communities who
are suffering life and death consequences of climate change, it
matters to us, in the same way that life and death food
insecurity matters to us.
Senator Hagerty. Children anxiety programs over climate
anxiety, I just don't get the connection between the basic
fundamental platform--the bottom part of Maslow's hierarchy of
needs, is trying to be addressed here. That is what we should
be focused on.
Ms. Power. We are very active----
Senator Hagerty. How could the best----
Ms. Power [continuing]. At the bottom as well.
Senator Hagerty [continuing]. Way to use taxpayers' funds
be on providing programs like this. And when we have a void
China steps in to fill that void, Ambassador. We need to be in
the game, we need to be looking at the basic needs. That is
what I am encouraging you to do.
Ms. Power. Understood. Thank you.
Senator Coons. Thank you, Administrator Power.
Senator Shaheen.
Senator Shaheen. Thank you, Administrator, so nice to have
you here. Thank you for what you; and everyone at USAID--does
on a daily basis to help people around the world.
I just returned from a trip, with a number of other
senators, to Panama, Colombia, Argentina, and Brazil. One of
the things we were trying to assess is the Chinese influence in
that region. We heard a lot of concerns, in Panama
particularly, about migrants, and the Darien Gap, in Colombia
about refugees from Venezuela. But can you speak to how--what
USAID does, helps to counter that Chinese influence in the
region. And do you have any specific examples in those four
countries that you think we should particularly be aware of?
Ms. Power. Thank you. Well, let me say that as is happening
in many parts of the world, there is a fair amount of buyer's
remorse that is growing as well, in our own hemisphere.
Senator Shaheen. We have heard that.
Ms. Power. I am sure you did hear that. And there is
actually a barometer survey, a Latin American survey that shows
that trust, in fact, in the PRC has dropped 20 percent in the
last decade, and is below 38 percent last year; trust in the
U.S. has gone up actually, comparably, 20 percent, up to 57
percent, according to the latest survey, and we will get more
data on that.
I think that stems from--those numbers stem from the fact
that our objective, as USAID, is to help countries work
themselves out of an assistance relationship, and out of any
dependence, our investments are people-to-people investments,
they are about working with, for example, those Venezuelan
refugees or migrants in Colombia to help both them and the
Colombian communities who host them, get access to livelihoods.
There is no faking that, you know, whether you actually
care about the communities, whether you are in the communities,
in northern Central America, working with women who have been
subjected to gender-based violence at the community level,
working with youth who are at risk of being recruited into
gangs at the community level.
So just the contrast I think between these large
infrastructure investments which can matter, of course,
provision of infrastructure is very important. The United
States Government is going to be doing more and more of that
with the DFC, and millennium--multilateral development banks,
and others.
But it is these investments in dignity, in independence, in
the environment in a non-extractive approach. And of course, in
a climate-smart approach, given that that is what the
communities most need, given the changing elements. You know, I
think all of these points of distinction really register with
communities. And we are trying to ensure that jobs get created
for the communities in which we work, rather than bringing in
our own workers in, you know, kind of development bubbles along
the lines of what our competitors are doing.
Senator Shaheen. Well, certainly, I think South America
offers a tremendous opportunity for us, and it is a place where
we should pay more attention in the future than we have in
recent past. So I am pleased to hear that that is an area of
focus for USAID.
Last spring, Senator Murphy, Tillis, and I, were in Bosnia
and Herzegovina, and we visited one of the USAID development
efforts with a small business, and saw the impact that that was
having. We also heard about corruption, and good governance,
and the issues that they present for the people of--not only
Bosnia and Herzegovina, but the entire region.
So can you talk about what USAID is doing to address
corruption, and good governance, particularly in the Western
Balkans?
Ms. Power. Thank you. Well, USAID has done an awful lot in
the independent media sector over the years as you know. Again
thanks, in part, to your support. That work has now shifted a
little bit, also to an effort to really dig in on media
viability, because again we want these independent newspapers
like Oslobodenje, or whomever, to be viable in a digital age.
So working with them, and they are the leading exposures,
often, of corruption, not just that newspaper, but many of the
others that USAID has supported, similarly, civil society
organizations. But the heartbreaking aspect, as you know, of
the situation--there are many, many heartbreaking aspects in
Bosnia and Herzegovina--but is the poor governance, and
paralyzed governance, and governance in which individuals look
out more for themselves, and more for self-dealing than they do
for the young people in the country who continue to flee in
droves.
And here, I think we have shifted in the last year or two
toward looking to see whether there is more to be done, less at
the central or Federation level, and more at the local level.
You know, working with auditors, working with prosecutors,
working in fact with clean governments that, you know,
themselves are putting in place checks and balance--checks and
balances are responsive to them.
So it is sad in a way that one has to forum shop to find
willing partners, but I do think we have made progress; and I
will commend, also, the State Department and Treasury because I
think the sanctions designations taking advantage of the
corruption prong, of the Magnitsky Sanctions, and other
mechanisms. But those have made a real difference, I think, in
deterring this kind of conduct.
Senator Shaheen. I certainly agree, and I hope we will
continue to stay focused on other areas where--on individuals
where sanctions can help make a difference.
Finally, I wanted to ask you about Women, Peace and
Security because that makes it a priority, legislation to
protect and support women's roles in peace negotiations, and
conflict resolution. And I know that this is something that
USAID is still implementing. What else do you need in order to
successfully implement that legislation, and how do you see
that helping with the work that you are doing?
Ms. Power. Thank you. Well, I think, or the budget request
includes $16 million in order to help implement the Women,
Peace and Security Plan and its modalities around the world,
but if you actually, you know, look more broadly at Women,
Peace and Security, broadly, define less about the plan, per
se, but are programs that are responsive.
I think we are, you know, spending somewhere around $250
million in, I think, we have 80,000 females that we have
brought into mediation roles, peace building roles, you know,
through that programming. It is also something I again credit
the State Department and DOD.
Now, really pushing that the results remain elusive in many
domains, but as a design feature of any negotiation for women
to be involved, you know, we are both heartbroken by events in
Sudan. Those discussions, again, pushing even now for women to
be involved in discussing, first the ceasefire, and then the
longer term transition.
So just whenever something unfolds, you know, it isn't just
a program that lives over here, it has to be a design feature
of our diplomacy, and our engagement. And I think that is at
least what we are trying to put in place.
Senator Shaheen. Good. Thank you. Thank you, Mr. Chairman.
Senator Coons. Thank you, Senator Shaheen, and thank you
Administrator. I am going to go question at the end of the
PEPFAR hearing. So I may or may not return.
Senator Murphy, to you. And if I don't return before you
conclude questioning, if you would close out the hearing I
would appreciate it.
Senator Murphy. Will do. Thank you very much, Mr. Chairman.
Good to see you, Administrator. Administrator Power, I
wanted to turn your attention to Tunisia, a small country in
North Africa, but one that has had outsized attention, and
importance given the fact that it was one of the few relative
democratic success stories coming out of the Arab Spring. I
have a specific question, and then a more general question.
The specific one is this. The budget suggests preserving,
military aid for Tunisia, but also a pretty dramatic cut to
economic aid and to--aid to civil society groups. That is
worrying, because as you know, this is a moment of real crisis
in Tunisia. President Saied has turned his back on democratic
norms, has engaged in a pretty repressive and overwhelming
crackdown on dissent.
And this seems like a moment where it would be important
for us to send a signal to civil society that we are, you know,
going to increase our support for their work, not decrease it.
And so I wondered if, just on the specific question of how we
look at our aid budget, trying to help give some oxygen to
those that are trying to fight back against this slide away
from democracy in Tunisia, how this budget is going to do that?
And why we envision a cut to civil society money for Tunisia?
Ms. Power. Well, I think the 2024 request is for $14.5
million, but that is a lower number, in part, again because so
many of the avenues in which we were engaging, the government
at least, 2 years ago, have been for foreclosed by the actions
by the government. So I would want to dig into whether or not
your premise is right about actual cuts to civil society. I
would certainly agree with you that even when governments are
backsliding, that that can become cause just to shift resources
from what you might have wished to do with a judicial body, or
with a ministry, you know, to make sure that accountability,
you know, doesn't suffer as well. Or at least doesn't suffer a
shortage of resources, it is certainly suffering.
The other thing I would note, Senator, is that for the
first time this administration is coming forward with a
proposal for an ``Opportunity Fund for the Middle East and
North Africa.'' I don't know if that caught your attention. I
think it is a $90-million fund, and the idea there is to be
more opportunistic. Again we don't see right now, the
likelihood of a democratic opening, or reverse of the
backsliding in Tunisia; but if that were to happen, to be in a
position to draw from that fund to meet the moment, whether
through support for civil society, or for the government.
But let me get back to you on the specifics of what the cut
from the $22.5 million fiscal year 2022 level, to a $14.5
million request, sort of what the modalities of that would be.
Senator Murphy. Yes. Listen I worry that--I think you are
right, some of it was driven by a lack of avenue. You have got
a Minister of Interior who, you know, is working hand in hand
with Saied's crackdown. But I worry that this is kind of an
excuse to not get thoughtful and creative about how to find
avenues to support civil society, and look forward to hearing
back.
Here is my more general question. You know, I have been a
critic of continuing the level of aid to Saied's Government,
and one of the answers I get back is, China, right. That
becomes the excuse as to why we should be heavily invested in
repressive regimes all over North Africa, and the Middle East:
that if we are not there, China will be.
I know you have talked a lot about China here today, but on
this sort of specific question, about what I think many people
here are inviting, a human rights and democracy race to the
bottom with China, in which, just because they are willing to
fund repressive regimes, and economically backwards regimes we
should as well.
And my sense is that the way that we compete with China
successfully, is to not be China. Is to bring our values and
our standards to these conversations, and to have a walk away
moment, where the cost is just too high if a government is
engaged in massive repression, or their economy is such a mess
that it doesn't make sense for us to be involved in the long
run.
We haven't done that much despite, you know--despite the
President talking about putting human rights and democracy
first, you know, we still stay engaged with a lot of countries
that have been moving the wrong way pretty fast. But not
litigating that specific question of policy, what do you think
about this idea that there is a risk of being engaged in a
human rights, democracy race to the bottom with China? There
has got to be a point at which we walk away.
Ms. Power. Well, let me just take that question if I could
from my vantage point as Administrator of USAID, where we have
significantly increased our investments in democracy and human
rights, where I very much agree with you that those investments
that support, including by voice, but also by programming, is a
key distinguishing feature, you know.
The PRC does government-to-government this and that, the
PRC brings its own workers in to make substantial investments,
the debt distress that so many countries are suffering, it
comes about in part because they are so busy servicing debt,
and don't have an ability to invest those revenue in the
livelihoods of their citizens, the lives of their citizens.
You know, we are, under President Biden, very significantly
expanding those investments in these distinguishing features,
our attention to marginalized people, our attention to
indigenous communities, our attention to LGBTQI individuals who
are being persecuted across Sub-Saharan Africa, and the Middle
East, and beyond.
So you know, I actually think that governments are seeing,
across the board, much more substantial investments, not only
than the previous administration, which may not be unexpected,
but even then the Obama administration. I mean, I think the
years of underinvestment in those groups that are holding
governments accountable, you know, we are trying to make up for
lost time.
That 17 years of democratic backsliding occurred, you know,
without an effort to really buck, you know, or halt the
momentum that the autocrats and others were having. You know, I
will say putting to one side the--you know, the walk away
aspect of your question if I may. You know, we are doing a lot
of business with a lot of countries. I mean, if there are
places where there is democratic backsliding, where we are
dramatically, expanding our civil society programming
resources, but we are also urgently working with them to curb
emissions at the same time.
And so, you know, for USAID, you know, even in a place like
Afghanistan where the Taliban is doing, you know, one week just
something just more monstrous than the thing that was done
before, and more self-defeating from the standpoint of the
economy of the country, even there, we are not walking away
because we want to help citizens meet basic needs.
We want to support girls through online learning if we
can't reach them in the classroom like we were able to do a
couple years ago. So, you know, it is this question of walking
away, versus engaging, and continuing to be in the scrum, even
in governments that are repressive, to find reformist elements
who want to liberalize. Maybe they want to liberalize aspects
of the economy, and not yet liberalize independent--you know,
press freedom.
But sometimes, you know, history shows that you get a
foothold in there, you open things up, the private sector comes
in, and that can, you know, create openings that might not have
existed otherwise.
So I think on a case-by-case basis, one can discuss, you
know, again, whether taking our marbles and going home is the
right strategy. But I find that there is a real hunger right
now for the American alternative, and that includes support for
civil society, raising our voice for those who are being
repressed, raising our voice for marginalized populations. And
to lose that aspect of our foreign policy, really, would be to
lose a comparative advantage.
Senator Murphy. I don't know that I disagree with any of
that. I think often the rationale for our continued economic,
and security assistance, and maybe I am, you know, talking to
the wrong person about security assistance, is often connected
to our need to have a foothold inside these countries to
compete with China. It is not always connected to our efforts
to lift up democracy, and human rights.
And that is why Tunisia, for me, is an interesting example.
A place where we have, you know, continued the same level of
military assistance, despite the fact that the military is
engaged in this crackdown, and we are cutting aid that, you
know, arguably is channeled through to civil society. And my
guess is, the reason we have done that is to try to have some
influence with the Tunisian regime because, China is knocking
at the door. And the way we get that influence is through
economic aid, and military aid that the government has a role
in. That troubles me side-by-side with these reductions, and in
support for civil society. But I will look forward to
continuing the conversation.
All right; and I have got more questions, but I am going to
stay on time, given that I am already over. And I am going to
do my duty and close out the hearing.
ADDITIONAL COMMITTEE QUESTIONS
[The following questions were not asked at the hearing, but
were submitted to the agencies for response subsequent to the
hearing:]
Questions Submitted to Administrator Samantha Power
Questions Submitted by Senator Jeanne Shaheen
Question. Despite the Biden-Harris Administration's prioritization
of the repeal of the Global Gag Rule shortly after taking office, I
remained concerned by reports over the last 2 years that some
implementing partners are still restricting the services that they
provide. When we discussed this last year, you called it a
``conservative application of this Administration's policies.''
According to a Government Accountability Office report issued last
June, even after the policy has been rescinded, implementing partners
struggle to rebuild lost partnerships, networks and programs while
government and non-governmental organization stakeholders continue to
experience confusion about what is permissible.
--Can you describe what USAID is doing to ensure that all partners
and stakeholders understand that the global gag rule is not
currently in effect? How are you working to proactively rebuild
partnerships and communities harmed by the global gag rule?
--Will you commit to meeting with organizations and communities
impacted by the global gag rule on future travel?
Answer. USAID is committed to continuing to partner with
governments, the private sector, and international and nongovernmental
organizations to improve health outcomes and the empowerment of women
and girls so that they can realize their full potential.
USAID regularly communicates with Missions and partners on the
longstanding requirements and statutory restrictions applicable to
their programs. In addition to communicating the revocation of the
Protecting Life in Global Health Assistance (PLGHA) policy through the
Agency's Implementing Partner Notices (IPN) Portal, the Bureau for
Global Health has conducted outreach to USAID/Washington, Mission, and
implementing partner staff to communicate directly that the PLGHA
requirements were no longer in effect for prime awards and all existing
and future subawards.
Question. According to the most recent U.S. Government Strategy on
International Basic Education, girls are more likely to be out of
school than boys. The problem of keeping girls in school is especially
challenging in conflict-affected countries where girls are 90% more
likely to be out of secondary school than girls in stable countries.
The U.S. Global Strategy to Empower Adolescent Girls addresses the
barriers that prevent girls from staying in school to ensure adolescent
girls are educated, healthy, economically and socially empowered and
free from violence and discrimination. Does USAID have any plans to
update the implementation plans for this 2016 strategy or to publicly
report on the implementation of this strategy?
Answer. USAID has been involved in interagency discussions on the
U.S. Global Strategy to Empower Adolescent Girls (the Strategy) and
will continue to focus on implementation of the Strategy rather than
revision of the implementation plans. A publicly available report on
the progress under the Strategy was released in April 2023 and is
available on the U.S. Department of State website. The Department of
State is the interagency lead on the Strategy.
Question. In the last 5 years, how have USAID programs increased
access to education for girls in both conflict-affected and stable
countries?
Answer. USAID remains committed to advancing gender equality in and
through education around the world and to strengthening resilient
education systems that support access to quality education,
particularly for the most marginalized. In FY 2022, USAID programs in
more than 50 countries worked to advance gender equality in and through
education, reaching more than 11.8 million girls and women across the
education continuum.
Over the last 5 years, the COVID-19 pandemic, conflict and crises
have negatively impacted access to education for girls and women. USAID
programs have worked to address barriers to quality education by
supporting programs that prevent and respond to school-related gender-
based violence, ensure educational materials and instruction empower
all learners, provide safe learning opportunities for women and girls
facing adversity, and holistically support adolescent girls to overcome
their unique set of challenges.
USAID is committed to this programming and has pledged under the
National Strategy on Gender Equity and Equality to reach 15 million
girls and young women across the education continuum with education
assistance by 2025.
Examples of USAID's programs that have increased access to
education for girls in both conflict-affected and stable countries over
the past 5 years include:
--Pakistan.--In September 2022, USAID launched the Improving Girls'
Education Activity to support public-private partnerships that
will improve school management in public girls' schools in
Khyber Pakhtunkhwa Province, boost school enrollment, and
strengthen the quality of education. On March 7, the U.S.
Ambassador to Pakistan also announced 500 university
scholarships for flood-affected students, with 50 percent of
the scholarships reserved for women.
--Mali.--USAID's Girls Leadership and Empowerment through Education
program creates tangible opportunities for adolescent girls to
pursue their academic goals. It decreases educational barriers
for adolescent girls, improves their safety in schools and
communities, and increases knowledge of positive health
behaviors amongst them and their families. Programming provides
accelerated learning to girls, and supports their transition to
Mali public schools to continue their formal education.
--Mozambique.--USAID's Advancing Girls' Education activity empowers
adolescent girls and promotes girls' school attendance in
Zambezia and Nampula where girls' school enrollment is low. In
addition to equipping learners with literacy, numeracy, social,
and life skills, the activity also expands girls' safe access
to quality education and improves learning outcomes by
educating learners about malnutrition, menstrual hygiene
management, and prevention of sexually transmitted diseases.
Question. The FY23 omnibus included report language encouraging
USAID to allocate resources through the International Disaster
Assistance account to provide safe, inclusive, and quality education
for refugee and internally displaced children.
What is the Biden administration's FY24 plan to support education
and flexible learning to maintain continuity across situations of
crisis?
Answer. USAID supports child protection and education in crisis and
conflict along the humanitarian development continuum with both
International Disaster Assistance and Development Assistance funds. In
fiscal year 2024, USAID's programs, leveraged with resources from
bilateral and multilateral partnerships, the private sector, and
external stakeholders, will build on the foundation set by the U.S.
Government Strategy on International Basic Education and continue to
help partner countries to strengthen the resilience of education
systems, mitigate disruptions to education, prepare for heightened
uncertainty and instability, provide safe spaces to learn, and improve
educational outcomes.
USAID is the largest bilateral donor of basic education development
assistance in the world and is uniquely positioned to support learners,
educators, and education systems in partner countries to prepare for,
respond to, and recover from crises quickly and efficiently. In fiscal
year 2022, USAID basic education programs reached 28 million children
and youth in 56 countries, including 31 countries affected by conflict
or crisis.
USAID's education programs in crisis- and conflict-affected
environments work to provide safe learning opportunities for students
and teachers, rebuild education systems, and prevent and mitigate
further conflict and crisis through conflict-sensitive education
programs, community engagement, and disaster-risk reduction activities.
Programs also work with national government leadership in the education
sector to support integration of refugees into host country systems,
serve internally-displaced children and youth, and support external
coordination groups to increase coherence between humanitarian and
development efforts in education.
As one of its original contributors, USAID is also proud to
continue to support Education Cannot Wait, the only global fund for
education in emergencies. ECW ensures that the most marginalized child
and youth in experiencing emergencies and protracted crises have access
to lifesaving and life-sustaining education services. USAID's
contributions also support ECW in its role to coordinate among donors,
the private sector, and humanitarian and development actors to meet the
needs of the next generation and ensure this growing population has the
skills and abilities to sustain themselves while engaging as productive
citizens in their communities. The United States, through USAID and the
Department of State's Bureau for Population, Refugees, and Migration,
plans to contribute $25 million to ECW in FY 2023, bringing the total
of U.S. government contributions to ECW to $145.3 million to date since
2017.
USAID's International Disaster Assistance funding is intended to
save lives, alleviate human suffering, and reduce the impact of
humanitarian crises. USAID recognizes education is protective and life-
saving in crises. Humanitarian child protection programs support
education in emergencies through the Safe Healing and Learning Spaces
methodology, psychosocial support and coping tools for caregivers and
teachers, temporary shelters to enable damaged schools to resume
education, and contextualized learning materials for displaced
children. USAID child protection and education in emergencies experts
collaborate closely to maintain continuity across the humanitarian-
development nexus.
______
Questions Submitted by Senator Susan M. Collins
Question. Recent years have truly been historic for Israel's
relationships with regional Arab neighbors. The UAE, Bahrain, Morocco,
and Sudan joined Egypt and Jordan in establishing diplomatic relations
with Israel--paving the path to peace through recognition and
engagement rather than isolation and boycotts of Israel.
--Please describe the work USAID is undertaking to further expand and
strengthen the Arab world's normalization of relations with
Israel.
--Is there more that USAID can do on this front?
Answer. Advancing Middle East peace, regional integration, and
normalization between Israel and its neighbors is a priority of this
Administration and this agency. USAID continues to advance trilateral
and regional USAID-Israel cooperation, particularly with Israel's
neighbors and with Abraham Accords countries. USAID actively
participates in five of the six Negev Forum Working Groups aimed at
improving Israel's integration into the region. USAID serves as the USG
lead for the Negev Forum's Tourism and Food Security and Water
Technology Working Groups. Working closely with the interagency, USAID
continues engaging international counterparts to achieve tangible
progress in each Working Group it is a part of.
In August 2019, USAID and MASHAV--the Israeli government's
international development agency within its Ministry of Foreign
Affairs--signed a global Memorandum of Understanding (MOU) for
development cooperation to identify opportunities for collaboration and
partnership. Most recently, USAID utilized $2 million in FY 21 funding
to partner with MASHAV in Albania, Northern Central America, and
through a special call for agriculture, climate, and water
sustainability proposals with the agency's Middle East Regional
Cooperation (MERC) program.
In addition, through MERC, USAID manages a portfolio of over 40
active Arab-Israeli applied research grants focused on topics crucial
to the region, such as natural resources management and public health.
Examples of those projects include:
--Israeli and Jordanian scientists are developing advanced methods to
treat municipal wastewater that may assist with irrigation in
Israel and Jordan.
--Palestinian and Israeli scientists are generating evidence of the
presence, transport, and effects of lead on soils, plants,
water, animals, and individuals near sites in the West Bank
where electronics waste and cables are burned for recycling and
disposal. This research is informing how this issue is managed,
and is promoting recycling.
Question. To enhance regional prosperity and stability, the United
States joined Israel, Egypt, the UAE, Bahrain and Morocco in
establishing the Negev Forum. I understand USAID has been an active
participant in the Working Groups established by the Forum.
--Can you update us on what USAID is doing with regard to the Forum
and what outcomes you hope to achieve?
Answer. USAID continues to advance trilateral and regional
cooperation with Israel, particularly with Israel's neighbors and
Abraham Accords countries. USAID's support to the Negev Forum is a
prime example of these efforts. USAID serves as the U.S. government
lead for two of the Negev Forum Working Groups--Food Security and Water
Technology (FSWT) and Tourism, and also provides expertise to the
Health, Clean Energy, and Education and Coexistence Working Groups.
A USAID delegation attended the inaugural Working Group meetings in
Abu Dhabi in January of 2023, and Agency experts continue to work
closely coordinating with interagency and regional partners ahead of an
upcoming Ministerial expected in early summer 2023 in Morocco. For
example, USAID is working with other Negev members to advance joint
tourism projects to boost economic development, improve capacity of
tourism operators, and convene experts to share best practices and
opportunities as determined by the Tourism Working Group. The FSWT
plans to gather at the working level in the coming months to further
hone its deliverables for the Ministerial. USAID hopes that the
deliverables identified and announced at the Ministerial will promote
further regional integration between Israel and all involved countries.
Question. The World Food Program is actively investigating the
large-scale theft of USAID-provided humanitarian food aid in Ethiopia,
where protracted conflict and drought have left more than 20 million
people reliant on aid. The amount of food aid stolen is reportedly
enough to feed 100,000 people. Meanwhile, Secretary Blinken announced
an additional $331 million in new humanitarian assistance for Ethiopia
last month.
Can you provide an update on the investigation into this situation
and tell us what steps are you taking to ensure that U.S.-funded
humanitarian assistance is not stolen or diverted from its intended
recipients?
Answer. USAID recently uncovered that food aid intended for the
people of Tigray suffering under famine-like conditions was being
diverted post-distribution and sold on the local market by
beneficiaries who were either coerced or misled into selling their food
aid at cut-rate prices. Immediately upon discovery of this post-
distribution diversion in Ethiopia, USAID reported the incident to
USAID's Office of Inspector General (OIG). It is our understanding that
both the USAID OIG and investigatory units from USAID implementing
partners in Ethiopia are investigating the matter. As of March 21, when
the post-distribution diversion was initially discovered, nearly $315
million (out of $319.5 million allocated to BHA) of the announced
funding had been obligated. In response to this situation and in
cooperation with implementing partners, USAID has proactively
implemented strong mitigating measures against further diversion.
Effective April 20, 2023, we have decided to pause all USAID-
supported humanitarian food assistance to Tigray until we can work with
our partners to ensure that this assistance can be provided without
further diversion. USAID humanitarian food assistance is continuing in
other regions of Ethiopia at this time. The pause is limited to food
assistance and is intended to immediately resume once we are assured
that safeguards are in place to ensure that aid is reaching and being
utilized by its intended recipients in order to minimize humanitarian
impact to the extent possible. Pausing food assistance is not a
decision we take lightly given the immense suffering in the region.
However, USAID believes that upholding the integrity of humanitarian
assistance is critical to meeting needs and reaching the most
vulnerable, both in Northern Ethiopia and around the world. USAID
Administrator Samantha Power met with WFP Executive Director Cindy
McCain on April 6 and directly raised the concerns surrounding this
diversion.
USAID is exploring all viable programmatic options in Ethiopia as
part of global efforts to mitigate waste, fraud, or diversion of
assistance. USAID will also continue pressing for system-wide changes
throughout the country, such as enhanced beneficiary identification,
improved targeting, and strengthened monitoring of assistance.
Wherever we work, USAID continually reviews the risks associated
with our programming to ensure that our partners are able to
effectively carry out USAID-supported activities in line with
humanitarian principles, while also acting in compliance with the terms
and conditions of their awards. In parallel, we work closely with our
food assistance partners to ensure they have robust risk mitigation
systems in place. We are committed to ensuring U.S. taxpayer-funded
humanitarian assistance is reaching and being utilized by the intended
beneficiaries and commit to informing Congress as more information
becomes available.
Question. Special Inspector General for Afghanistan Reconstruction
John Sopko recently testified that he cannot assure Congress ``that we
are not currently funding the Taliban.''
--Are USAID implementers providing funding to the Taliban, including
through government registration, customs, or other fees? If so,
under what specific authority?
Answer. USAID does not provide assistance to the Taliban. All USAID
humanitarian and development assistance funds the work of UN agencies
and experienced, carefully chosen international NGOs and local Afghan
partners. In some cases, USAID partners may be required to conduct
incidental transactions with the Taliban that are necessary for the
provision of assistance, such as fees, import duties, purchase or
receipt of permits or licenses, purchase of fuel, or payment for public
utility or telecommunication services. These types of critical
transactions are authorized under General Licenses issued by the
Department of Treasury's Office of Foreign Assets Control (OFAC).
Direct financial transfers to the Taliban (or Haqqani Network) are
prohibited.
Question. How does USAID ensure that its humanitarian assistance is
reaching intended recipients, namely ``the poor Afghan people,'' and
what is your response to SIGAR's concerns that the Taliban is profiting
or benefiting from such assistance?
Answer. USAID has a track record of ensuring that our assistance
does not benefit terrorists or other blocked persons. USAID utilized
robust anti-terrorism vetting to mitigate the risk of diversion of our
funds and resources to terrorist entities during program
implementation. USAID also employs risk analytic processes that include
an examination of the risks associated with the diversion of assistance
to the Taliban and Haqqani Network in Afghanistan. We require our
humanitarian and development partners to have proper safeguards and
risk-mitigation systems in place to ensure that principled development
and humanitarian aid reaches those who need it most. When there is any
cause for concern related to the delivery of this assistance, we have
plans and protocols in place to respond.
USAID and our implementing partners have extensive experience
working in challenging operating environments and we have systems to
enable aid to reach its intended recipients--over 17 million people in
FY 2022--through numerous monitoring methods, including remote, post-
distribution, and third-party monitoring, to provide continuous
oversight of awards. Over the last 20 years, the security situation in
Afghanistan has often required remote and third-party monitoring
methods. The Taliban takeover in August 2021 has required more frequent
use of these methods. USAID partners are also required to report all
incidents of fraud, waste, and abuse, including diversion, to USAID's
Office of Inspector General (OIG).
USAID staff continually communicate and coordinate with our
implementing partners and our third-party monitoring contractor to
ensure both that our assistance is reaching those for which it is
intended and that our partners have effective systems and mitigation
measures in place to help safeguard against and promptly report and
respond to fraud, waste, and abuse, including Taliban attempts to
influence or interfere with the provision of assistance. USAID staff
regularly meet with partners, as well as review programmatic and
financial reports corresponding with their respective awards, to obtain
key contextual and programmatic updates, including updates related to
their access to beneficiary populations, safety and security, and any
attempted Taliban interference.
Question. Are you aware of any U.S. taxpayer funds being diverted
by the Taliban, including away from specific ethnic groups the Taliban
does not support or to the families of Taliban local leaders? How does
USAID ensure that no U.S. taxpayer funds are diverted by the Taliban?
Answer. The Taliban has occasionally tried to divert humanitarian
assistance in various geographic areas for personal gain or towards
public works projects such as road construction. In these cases,
humanitarian organizations have decided, on their own, to suspend
assistance until local Taliban authorities agree to abide by
humanitarian principles and not seek to influence or interfere with
programming.
USAID has risk management systems in place to safeguard against
diversion of U.S. taxpayer funds to the Taliban. As part of funding
applications, USAID requires that partners develop Risk Assessment and
Management Plans (RAMPs), which USAID uses to inform its internal
assessments on how applicants will mitigate the risk of assistance
benefiting sanctioned entities, among other risks.
The Taliban's December 24, 2022, edict and April 4, 2023, verbal
declaration prohibiting Afghan female staff from working in NGOs and
the UN in Afghanistan has further complicated the fragile operational
climate in Afghanistan. To date, USAID partners report that they are
able to continue providing principled humanitarian assistance to
Afghans in need but are increasingly confronted with access challenges
as these edicts are not uniformly enforced. USAID is continuing to
engage with partners to understand these challenges and how they impact
access for different regions, individuals, and groups.
______
Questions Submitted by Senator John Boozman
Question. Coffee is incredibly important to the U.S. economy. The
coffee industry supports nearly 1.7 million American jobs and adds $225
billion in economic activity every year according to the National
Coffee Association. Coffee is also important to Arkansas. Arkansas
companies in the coffee industry depend on a steady supply of coffee
grown by smallholders mostly in low-income countries, some of which are
countries where Feed the Future operates.
--As the risk to coffee production grows, from things including soil
fertility issues and pests and disease, what is USAID doing to
help smallholder coffee producers in low-income countries
become more resilient to the challenges they are facing growing
coffee?
Answer. USAID works in partnership with U.S. and international
coffee companies, other sector actors and non-profit organizations to
enable the world's at-risk coffee producers to improve their
livelihoods while providing a reliable supply of high-quality coffee.
USAID's work in coffee spans many countries on three continents.
Together with our partners, we are combating threats posed by the
climate crisis that endanger global coffee crops while ensuring that
coffee production protects forests and the climate. Through
partnerships with the private sector, we are working to drive
investment in sustainable production, and improve the environmental and
economic benefits of conservation for local communities.
--USAID has funded numerous activities that help smallholder coffee
producers become more resilient to production challenges
(including soil infertility and increased pest and disease
pressure). To cite two examples, one from Mexico and one from
Peru:
--Cooperative Development Project.--(2018-2024) Equal Exchange's
Cooperative Development Project, funded by USAID, is
working with the coffee association Finca Triunfo Verde
coffee association in Mexico to improve the quality and
productivity of organic, specialty coffee. Equal Exchange
is supporting the association in facilitating exchanges
between producers to model best practices in shade
diversification, soil conservation, and pest and disease
control. Additionally, Equal Exchange is working with Finca
Triunfo Verde to foster young people's interest in coffee
production by extending technical training to youth and
assisting them in establishing their own model farms.
--In September 2020, USAID and Conservation International signed an
agreement in partnership with Starbucks to implement the
Amazon Business Alliance (2020-2027) to facilitate and
promote sustainable investments in the Peruvian Amazon by
scaling-out and scaling-up their impact to support
conservation business models and enabling conditions. The
purpose of the activity is to ensure that families in the
short term improve their incomes and help restore and
conserve forests on their farms and in the broader
landscape. The project is promoting agroforestry systems
and increasing shade-tree densities in existing coffee and
cacao plots and diversifying production through non-timber
species such as peppers, bananas, among others; likewise,
families are installing plantations and managing timber
species in secondary forests as well as restoring degraded
soils with organic fertilizers made from farm residues and
composting.
Question. Are there any long-term solutions and innovations USAID
is investing in, such as agricultural research in the development of
coffee?
Answer. Yes, USAID investments in soil health research are
generating improved practices which could readily be applicable in
coffee-producing regions. Coffee producers also face challenges around
soil fertility and diversified production within coffee-based systems.
USAID also invests in the long-term sustainability of coffee
through initiatives that create economic opportunities for producers--
including access to markets, connections with buyers, and access to
finance. The Farmfit Fund, for which coffee is an important commodity,
offers affordable financial resources to start, sustain, and grow
businesses that sustainably engage with smallholders. Farmfit Fund
transactions benefit from a USAID sponsored DFC guarantee facility (up
to USD $250 million). The fund runs until 2036.
USAID also supported Green Invest Asia, an innovative project
targeting mid-growth agriculture and forestry companies in Indonesia
and Vietnam with business strategies, environmental assessments, and
advice to improve their sustainable commodity production and business
practices. The focus of GIA was on key commodities linked to
deforestation in Southeast Asia, including coffee. Green Invest Asia
facilitates increased sustainability in the transforming coffee sector
through a carbon baseline study. The results influenced companies to
strategically develop plans and policies that contribute to global
sustainability and reduced emissions. Through GIA, USAID supported top
global buyers JDE Peet's and Nestle to meet their corporate carbon
commitments to source carbon-neutral coffee from their regional supply
chains, while reducing greenhouse gas emissions for the entire sector.
These systemic industry shifts improve smallholder supplier
livelihoods, supply chain transparency and traceability while
mitigating climate change impacts and preventing deforestation.
Question. The war in Ukraine is causing widespread destruction to
both civilians and infrastructure. At the same time, Russia's invasion
of Ukraine has led to the worst food crisis since WWII. Grain and
fertilizer exports remain low, leading to higher costs of food
production and less food to consume. Addressing the global food crisis
remains a top issue, especially in the Horn of Africa where hunger and
starvation is driving conflict.
How will USAID's FY24 budget address the global food crisis and
help ensure that we are efficiently aiding starving countries and food
scarcity is not driving conflicts in these regions?
Answer. USAID remains deeply committed to providing lifesaving
humanitarian assistance to populations affected by the global food
security crisis. Underscoring the historic proportions of the current
crisis, USAID's Famine Early Warning Systems Network estimates that
acute food insecurity has increased by 70 percent when compared to pre-
pandemic levels. This crisis will be a long-term one--thus, we need to
prepare ourselves for a long-term response. The powerful, combined
effects of climate change, the COVID-19 post-pandemic effect,
protracted complex emergencies, and Russia's invasion of Ukraine will
create elevated levels of emergency needs for years to come.
Generous funding from Congress and the American people, including
through supplemental appropriations, allowed the United States to scale
up humanitarian assistance to meet unprecedented needs--especially in
Ukraine and in the Horn of Africa--during FY 2022 and FY 2023. The FY
2024 request includes $6.5 billion in humanitarian assistance for
USAID.
To prioritize USG humanitarian resources, USAID will focus on
addressing the most life-threatening needs in each context. In
addition, USAID will work with partners to deliver assistance in the
most efficient way possible. In some cases, this means potentially
switching or re-emphasizing a particular modality such as cash, local
purchase, or U.S. Food for Peace Title II in-kind assistance to find
the optimal mix within and between partners to reach the most people we
can with the resources available.
While we will continue to prioritize available resources for the
most acute emergencies and needs, significant resources are needed to
address unprecedented humanitarian needs worldwide. Humanitarian needs
are far outpacing global resources and face difficult trade-offs for
concurrent emergencies. As a result, USAID will continue to advocate
with other donors to increase their contributions to responses, with a
particular focus on the Horn of Africa.
Question. What is USAID doing to promote the growth of sustainable
agriculture in these vulnerable regions given the global food crisis,
and is there more you need from us?
Answer. USAID is leveraging the full weight of its Bureau for
Resilience and Food Security to address this crisis. USAID recently
expanded the number of target countries within Feed the Future from 12
to 20, in light of growing need and growing demand for food security
investments that address the underlying weaknesses in food systems.
When selected as a target country, USAID aims to prioritize Feed the
Future funding to go to that country. Target countries also create
country plans which are written in conjunction with USAID missions and
partner governments. This includes much more robust monitoring and
evaluation reporting than is required in non-target Feed the Future
countries.
In addition, we have a set of resilience focus countries, and zones
within countries that are areas of chronic poverty and recurrent
shocks, (for example, the arid lands of Kenya which are now
experiencing historic drought.) Our programs in these areas are
designed to build the capacities of communities to withstand climate
and other related shocks and help avert the need for year-on-year
humanitarian assistance.
These programs are bearing fruit. We have seen the reduction of
poverty and malnutrition by 20-25 percent in areas where we work, the
improvement in children's diets and the doubling of women's empowerment
as measured by our innovative Women's Empower in Agriculture Index.
Data also indicates that even without access to additional resources,
according to the World Bank, Feed the Future zones of influence were
more resilient to the economic impacts of COVID-19 than households
living outside of these areas. Our programs doubled the number of
people we reached with access to finance during that period,
demonstrating our ability to pivot even without additional resources.
In response to the current crisis, USAID scaled up and accelerated
such Feed the Future activities, building on our strong global
platform, to respond to immediate, rising food insecurity within three
lines of effort: mitigating the fertilizer shortage, increasing
investments in agricultural capacity and resilience to sustain crop
production in spite of rising input costs; and cushioning the
macroeconomic shocks and impact on vulnerable communities. We
accelerated farmer's access to improved seed in order to ensure
harvests are productive as farmers face difficult markets and USAID is
supporting, at scale, fertilizer use efficiency and other agronomic
practices to reduce the impact of fertilizer shortfalls.
In order to address this crisis, USAID both pivoted existing
investments and also rapidly distributed supplemental funds to meet
these objectives. Funds were used on a variety of critical programming.
In particular, it was used to launch a unique market-based response to
the crisis called the Accelerated Innovation Delivery Initiative.
The Accelerated Innovation Delivery Initiative (AID-I) is a $117-
million, two-year rapid response effort that connects farmers to
innovative tools and information they need to manage the high input
costs and supply disruptions over the coming seasons. AID-I works with
and through market actors such as the private sector and local
extension to drive efficiency and scale, an approach that also will
help sustain this work and build long-term resilience. AID-I focuses on
areas where the need and potential is greatest: Southern Africa
(Malawi, Tanzania, and Zambia) and the Great Lakes region (Burundi,
Democratic Republic of the Congo, Rwanda and Uganda). It provides
targeted assistance to up to six million African smallholder farmers by
improving soil health and fertilizer management, strengthening local
seed systems, connecting to financial products and services, and
delivering extension and advisory services.
Response options made possible with the supplemental funds to Feed
the Future demonstrated both the power of the platform to rapidly
respond to the crisis and the potential to do more for smallholder
farmers to build their resilience. Funding for Feed the Future
investments have been relatively the same since 2009 at roughly $1
billion per year. Recognizing these needs, the President's budget
requests an increase to $1.2 billion in FY2024.
Question. Virginia Tech released its 2022 Global Agricultural
Productivity report last Fall, and found ag productivity growing at
only 1.12% annually, falling short of the annual global rate of 1.73%
needed to feed our projected global population approaching 10 billion
by 2050.
If this shortfall in agricultural productivity continues in the
coming years, what will it mean for global food security?
Answer. The impact of sustained declines in agricultural
productivity could mean an increasingly hungry world if output
continues to stagnate as well. Investments in global agriculture
production continue to fall short of the need. The world--public,
private, and civil society sectors alike--must take far more aggressive
action and make deeper investments to accelerate agricultural
transformation. As the report points out, current efforts are
inadequate to the challenges faced, including climate and other shocks.
As an example, the U.S. government global hunger initiative, Feed the
Future, has had the same base appropriation since its creation, and
that funding goes considerably less far than it did 13 years ago.
Like you, USAID is concerned about the slow pace of agricultural
transformation in certain parts of the world and the report revealed
important regional differences in agricultural productivity growth.
Most troubling is that agricultural productivity declined, on average,
across Sub Saharan Africa (SSA). To clarify, while agricultural output
grew a healthy 2.98 percent per year (2011-2020) in SSA, most of the
growth was driven by opening up new land for cultivation and pasture.
Land productivity therefore contracted by 0.12 percent, meaning that
gains were made through ``extensification'', or expansion on to new
lands, rather than on improved productivity on the land already under
cultivation. Converting grasslands, forests, and other wildlands to
agricultural production can decrease biodiversity and wildlife habitat
and increase soil degradation and erosion and is not a sustainable way
to feed a growing global population.
To accelerate agricultural productivity growth, investments are
needed to address fundamental constraints limiting gains in Africa.
These include investments in climate smart innovations such as improved
seed, soil health, resource use efficiency (e.g., on farm water
management) and sustainable intensification of the major farming
systems that contribute up to 80% of the continent's food supplies.
Through its extensive agricultural research portfolio, USAID is
investing in the development of improved crop varieties more resilient
to extreme weather, soil health and fertilizer management
recommendations, water management strategies (including small-scale
irrigation), and nutrient-dense horticulture and livestock production
systems. These areas of investment have been proven to increase
agricultural productivity and increase resilience to the many shocks
farmers face.
In addition, extreme and unpredictable weather has required
expanded access to, and adoption of, innovations that are derived from
recent advances in crop and livestock improvement, including resistance
to pests and diseases as well as higher temperatures. Along with
development of new innovations (technologies and climate-smart
management practices), African countries and regional organizations
need to embrace and implement policies that provide positive incentives
for investment by both the public and private sectors, on-farm and
across the food system. There are bright spots in Sub Saharan Africa
where countries are advancing business-enabling environment policies
and technological innovations that would drive agricultural
productivity gains. For example, through the Zambia Growth
Opportunities (ZAMGRO) Program, a US$300 million effort funded by the
World Bank, the Government of Zambia is prioritizing policy and
institutional reforms to increase growth in the agri-food sector.
Zambia is redirecting public expenditures on agricultural subsidies to
expanding agricultural infrastructure and extension to increase
productivity and growth in the sector. Zambia is also committed to
expanding private sector-led, market-driven reforms in grain marketing
and increasing regional food trade.
Question. What more can be done to address this issue?
Answer. USAID agrees with the key policy recommendations in this
report. In fact, Feed the Future currently invests in a majority of the
solutions it identifies, from investing in research and innovation as
well as commercialization of solutions, championing science informed
policy reforms, improving access to markets for agricultural inputs and
outputs, and boosting regional trade. The US government's Feed the
Future Initiative has increased its attention as well to many forms of
investments that focus not just on efficiency, but also the resilience
of the food system. Recently, the Initiative has evolved to do more in
early warning systems to mitigate agricultural risks from climate
change and emerging pests and diseases, for example, and food loss and
waste (especially post-harvest loss) to ensure that the food we do grow
reaches the table.
The urgency of the food crisis demands more creative strategic
partnerships, as USAID and USDA have promoted through the ongoing
Agricultural Innovation Mission for Climate Initiative which to date
has generated $13 billion of public and private investment in climate
smart research and innovation in agriculture. Increasingly, USAID with
its public sector investments, works through broad public and private
partnerships to achieve results that promote increased productivity
(more output from the same or fewer inputs), making farming more
profitable and food more affordable and nutritious for low-income
households.
Key to utilizing these broad public and private partnerships are
rigorous analyses identifying the priority areas where the development
community, working hand in hand with national government partners, can
have the greatest impact on poverty and hunger through agricultural led
economic growth.
Question. In recent decades, nutritious, biofortified products such
as orange-fleshed sweet potatoes and iron-fortified green beans were
introduced into the African and Asian agricultural sectors to address
nutrient deficiencies. As of late 2019, it is estimated that more than
6 million households in 15 Sub-Saharan African countries were regularly
producing and consuming orange-fleshed sweet potatoes.
--What has USAID been doing to support agricultural research efforts
like these to improve nutritious outcomes and boost smallholder
farmers in countries where the Feed the Future Initiative is
active?
--Are there any new biofortified products or other nutrition-related
interventions that are expected to be ready for introduction
soon in USAID's programming?
Answer. Improving nutrition outcomes in Feed the Future (FTF) Zones
of Influence is a key part of the Global Food Security Strategy, which
the Administration updated in 2021. The new strategy elevates nutrition
to a key pillar for FTF activities. This includes the agricultural
research we do on biofortification. In addition, USAID prioritizes
large-scale food fortification (LSFF) of staple foods and condiments as
a proven low-cost, high-impact intervention to ensure that vulnerable
populations are able to consume a diet with the necessary vitamins and
minerals. Launched in September 2022, USAID Advancing Food
Fortification Opportunities to Reinforce Diets (USAID AFFORD) will
program up to $75m in funding to increase the scale and quality of LSFF
to provide a dietary safety net to vulnerable populations by addressing
rising dietary inadequacies.
USAID and some of its missions funded work done by HarvestPlus and
the CGIAR Research Program on Agriculture for Nutrition and Health
(A4NH) which created the orange-fleshed sweet potatoes. USAID also
supports the development and deployment of biofortified nutritious crop
varieties, as well as legumes as protein source.
For example, smallholder farmers are growing biofortified maize and
wheat varieties developed by CGIAR centers. Seven seed companies in
four countries in Eastern and Southern Africa (Zambia, Zimbabwe,
Malawi, and Tanzania) are commercializing 10 pro-vitamin A (PVA) maize
hybrid varieties, benefitting 52,705 households (approx. 331,600
people) alone in 2022. In Guatemala, 20,500 families used biofortified
(high-Zn) maize seed in 2022, and it is expected that high-Zn maize
will cover at least 10% of the improved maize market in 2023. Twenty
high zinc wheat varieties have been released in South Asia and Latin
America, and early generation seed production is taking place in Nepal
and India. In Pakistan, the number of households growing zinc-enriched
wheat has risen rapidly across the country from 218,000 in 2018 to over
2.1 million in 2022.
One tool to combat Vitamin A malnutrition, Golden Rice
(biofortified with higher levels of pro-vitamin A using Genetic
Engineering), received biosafety regulatory approval for farmer
cultivation in the Philippines in July 2021. Initial seed production
has started, and preliminary market research suggests that golden rice
is accepted by local markets. Within the next 5-7 years, the project
aims for Golden Rice to meet the rice requirement of vitamin A
deficient households in the Philippines--and ultimately its developers
aim to provide 30 to 50 percent of the estimated average requirement
(EAR) of vitamin A for pregnant women and young children in Southeast
Asia.
In addition to CGIAR centers, Feed the Future (FTF) Innovation Labs
on Sorghum and Millets, and Crop Improvement are also contributing to
biofortified/nutrition related activities. USAID/RFS is also supporting
the improvements of legume crops such as soybean, beans, cowpeas and
peanut, which are a source of low-cost protein and minerals, and also
improve soil health. For instance, the Soybean Innovation Lab has
developed the Complementary Food for Africa (COMFA) that combines the
high-quality protein of soybean with the high-energy of orange flesh
sweet potato as an early childhood nutritious food.
Question. The U.S. has provided aid to the Palestinians over the
years through humanitarian assistance. Congress has insisted on
oversight of any funds to ensure that they are properly spent and do
not go to support terrorism. The Taylor Force Act prohibits assistance
to the Palestinian Authority until they stop the inexcusable practice
of paying convicted terrorists and their families.
--What are you doing to ensure strict oversight of USAID projects and
grantees, and ensuring no funds are directed to terrorists and
their supporters?
--It has been widely reported that Palestinian schools funded by U.S.
taxpayers through the United Nations Relief and Works Agency
promote hatred in their schoolbooks. What has the
Administration done to ensure these materials are not present
at these schools, and has the Palestinian Authority taken any
meaningful steps?
Answer. USAID takes the Taylor Force Act very seriously and
provides all U.S. assistance in a manner compliant with all relevant
laws, including the Taylor Force Act.
USAID also takes counterterrorism vetting of programmatic partners
and beneficiaries in the West Bank and Gaza very seriously to prevent
American taxpayer funds, and the activities we finance, from providing
support to entities or individuals that pose a risk to our national
security.
USAID West Bank and Gaza's Mission Order 21 requires the vetting of
key individuals of partner organizations at the prime and first-tier
sub-awardee levels regardless of nationality, including U.S. citizens.
USAID also requires the vetting of individual beneficiaries/trainees at
specific thresholds, as outlined in Mission Order 21. Vetting typically
covers the directors, officers, or other employees considered ``key
individuals,'' of non-Federal entities and for-profit entities that
apply for contracts, grants, cooperative agreements, or other funding
from USAID. USAID also requires vetting of recipients and beneficiaries
(including trainees) of assistance funds meeting certain thresholds.
Vetting is conducted by trained counterterrorism experts at the
National Terrorist Screening Center (TSC). The TSC is a FBI-managed
facility that permits the sharing of terrorism-related information
across the U.S. government and with other law enforcement agencies. The
TSC manages the consolidated watchlist, which has information on people
reasonably suspected to be involved in terrorism or related activities.
All vetting requests submitted to USAID undergo a thorough review by
trained counterterrorism experts at the TSC. This review includes both
public and non-public database searches against the personally
identifiable information provided. The vetting process is rooted in
intelligence and complemented, as applicable, by other data points.
In WBG, the counterterrorism partner vetting program also includes
an additional ``second-step'' level of scrutiny whereby recipients of
assistance awards or beneficiaries of cash or in-kind assistance are
reviewed by the Office of Palestinian Affairs at Embassy Jerusalem.
USAID does not fund the United Nations Relief and Works Agency and
would refer you to the Department of State, which manages related
funding.
Question. Iranians continue to protest the death of Mahsa Amini,
calling for freedom and human rights all while facing violence from the
Iranian regime. As you know, the U.S. has a proud history of supporting
those who are struggling for freedom.
Has USAID played any role in helping the Iranian protesters, and is
there anything we can do more of to support them?
Answer. USAID stands with the brave women of Iran calling for
change and standing up to the repressive Iranian regime. While USAID
does not fund any activities in Iran or in support of Iranian protests,
USAID has made public statements expressing solidarity and support in
media interviews, public remarks, and social media For example, in
Lebanon, Administrator Power said ``Let me just take this occasion to
express great, great admiration for the courage of the young people,
and the Iranian people really of all generations who have come out,
wanting for themselves the same things all of us want and every human
deserves, which is basic dignity, freedom, economic opportunity. And it
has been both inspiring to see that courage and the bravery in the face
of such repression, but also just heartbreaking to see so many lives
snuffed out with such promise, and again, snuffed out for no other
reason than seeking to live as they choose, live with just basic
freedom.''
Together with allies and partners, through multilateral measures
and UN mechanisms, we continue to hold Iran accountable for employing
violence against its own population, particularly women and girls.
SUBCOMMITTEE RECESS
So thank you very much, Administrator Power, for joining
us. We are going to keep the hearing record open for written
questions until 5:00 p.m. on Wednesday, April 26.
[Whereupon, at 11:40 a.m., Wednesday, April 19, the
subcommittee was recessed, to reconvene subject to the call of
the Chair.]
STATE, FOREIGN OPERATIONS, AND RELATED PROGRAMS APPROPRIATIONS FOR
FISCAL YEAR 2024
----------
TUESDAY, MAY 2, 2023
U.S. Senate,
Subcommittee of the Committee on Appropriations,
Washington, DC.
The subcommittee met at 10:34 a.m., in room SD-124, Dirksen
Senate Office Building, Hon. Christopher A. Coons (Chairman),
presiding.
Present: Senators Coons, Van Hollen, Schatz, and Graham.
ADVANCING SECURITY AND PROSPERITY THROUGH INTERNATIONAL CONSERVATION
OPENING STATEMENT OF SENATOR CHRISTOPHER A. COONS
Senator Coons. This hearing of the Subcommittee on State,
Foreign Operations, and Related Programs of the Senate
Appropriations Committee, will come to order.
The subcommittee meets today to review strategies for
advancing security and prosperity through international
conservation.
We have a terrific panel of witnesses, and I very much look
forward to your testimony. Ms. Caldwell, Dr. Steer, Mr.
Sebunya, I appreciate all three of you joining us today.
I have had the chance to work with you, and to review your
testimony, and I am very optimistic we will have a positive and
constructive hearing today.
I will note at the outset, some of my colleagues may be
coming and going. There are conflicting hearings today. My
Ranking Member on this subcommittee, Senator Graham of South
Carolina, also happens to be the Ranking on the Full Senate
Judiciary Committee, which is right now having a somewhat
heated hearing. There is a chance I will step out to go to the
end of that judiciary hearing, but I will only do so if another
member comes to take over.
I think it is critical that we have this hearing. It is the
first after our budget review hearings in which both the
Secretary of State and the Administrator of USAID testified. I
think this is a critical topic, critical for the United States'
place in the world, critical for the relationship between the
private sector, and philanthropy, and government.
Those who have worked on, read about, or visited
conservation programs know what progress on conservation means
for indigenous communities, for efforts to curb wildlife
trafficking, and illicit finance, and to improve security and
for the benefit of livelihoods across the globe, including here
in the United States. That is why there is robust bipartisan
and bicameral support for that.
Like many Members on this Committee, I have had the
opportunity to visit protected and conserved spaces around the
world, from Kenya, and Mozambique, and Rwanda, to Namibia,
Colombia, and Ecuador. I have done them in partner with my
colleagues, in partner with non-profit organizations, and have
seen remarkable and impressive examples of what conservation
that is human centered, that is done in close coordination with
indigenous communities, and that is well planned, and well
accounted for, can accomplish.
We are losing the Earth's most vital spaces, the most
remarkable parts of creation, at an alarming rate, because of
logging, rapid human population expansion, the demand for
agricultural space, for charcoal, for wildfires because of a
changing climate.
This is, in part, because the vast majority of gazetted
parks of notionally protected spaces are underfunded, leaving
lands at risk of degradation and wildlife at risk from
poaching. Poaching which, as I have demonstrated in hearings,
now many years ago, to lay the groundwork for the End Wildlife
Trafficking Act, funds armed groups and global criminal
networks that threaten national security, both here and in many
countries around the world.
USAID and the U.S. Fish and Wildlife Service have long been
critical partners in addressing conservation challenges, for
which Senator Graham and I have worked to increase and sustain
funding through this subcommittee over many years.
We also recognize governments cannot possibly address this
problem alone. I am encouraged; over recent years we have seen
significant and growing commitments from philanthropic and
private sector actors to support transnational conservation.
I am looking forward to hearing, first about how USAID has
applied lessons learned from its long history working on
conservation, and how we can strengthen such efforts including
in partnership with the private sector.
Senator Graham, and I, along with a bipartisan and
bicameral group of my colleagues, have proposed legislation to
leverage these philanthropic commitments, the U.S. Foundation
for International Conservation Act. This legislation would fund
new public-private partnerships for the long-term management of
protected and conserved areas, catalyzing substantial
additional private investment with a sustained ongoing annual
amount of additional public financing.
We will discuss that legislation today and other steps we
can be taking to advance our global conservation goals in more
detail.
Thank you for joining us. I look forward to your testimony.
And my understanding from Senator Graham is that he will submit
an opening statement for the record.
Senator Coons. So with that, I would like to invite our
three witnesses to begin with your opening statements.
Ms. Caldwell, we look forward to your comments.
STATEMENT OF MS. GILLIAN CALDWELL, CHIEF CLIMATE
OFFICER AND DEPUTY ASSISTANT ADMINISTRATOR
FOR ENVIRONMENT, ENERGY, AND
INFRASTRUCTURE, UNITED STATES AGENCY FOR
INTERNATIONAL DEVELOPMENT
Ms. Caldwell. Thank you so much, Chairman Coons. And I will
recognize, in absentia, Ranking Member Graham and other
distinguished Members of the Subcommittee.
This hearing and consideration of the International
Conservation Act come at an important time: nature is facing
grave and accelerating threats. As you are well aware, alarming
declines in wildlife populations and the deteriorating health
of our oceans, forests, and grasslands are nothing short of a
global crisis.
We are deeply appreciative of your powerful leadership in
this area and your recognition of the burning imperative to
address unprecedented biodiversity loss, occurring at a speed
and scale that is threatening to undermine the development
gains that Congress and USAID have worked to secure over
decades.
As you explore how this proposed Foundation could help
address this crisis, I would like to share three key lessons we
at USAID have learned over more than 30 years about what works
best for conservation.
The first is one I know you are already deeply familiar
with, and it is central to the Act: We must ensure long-term
investment in priority places and habitats. The importance of
long-term investment to specific protected areas and the
communities that live in and around them cannot be understated.
In key areas, USAID makes those sustained commitments,
underpinned by rigorous measurement and evaluation. We have
often funded the same partner for a decade or more, even while
maintaining competitive procurement because it produces
results.
But we know that this kind of long-term conservation
investment must also work for and with Indigenous Peoples and
local communities, which is lesson number two. A prime example
of this is USAID's work in Kenya, which began in the late 1990s
in partnership with the African Wildlife Foundation and the
Government of Kenya.
I am very pleased to be speaking alongside Kaddu Sebunya of
the Africa Wildlife Foundation today.
From those early years to now, we focused on strengthening
local organizations. Today, we support the local Northern
Rangelands Trust as our lead partner in the area. This decades-
long partnership benefits 630,000 people in 39 community-owned
and managed conservancies, covering nearly 63,000 square
kilometers, an area approximately seven times the size of
Yellowstone National Park.
In addition, it has created jobs for more than 850 eco
rangers, reducing poaching, and increasing the elephant,
giraffe, wild dog, and buffalo populations.
But as you know, communities, governments, and civil
society organizations can't do this work alone, which leads me
to lesson number three: broaden the funding base by engaging
the private sector, another key proposed feature of your Act.
We know firsthand that private sector collaboration is
critical to success in conserving biodiversity and advancing
development gains more broadly. As of fiscal year 2021, USAID
had nearly 100 active public-private partnerships in the
environment sector, with every 1 government dollar matched by
an average of $3.7 from the private sector. We know your Act
aims for a minimum of a one-to-one match, and based on our
experience you should be able to exceed that.
A prime example of this is USAID's HEARTH Initiative,
standing for Health, Ecosystems, and Agriculture for Resilient
Thriving Societies, which is generating cross-sectoral
partnerships with private-sector partners such as Mars and
Disney to conserve high biodiversity areas and improve the
health, well-being, and prosperity of the communities that
depend on them.
Seventeen HEARTH activities have been awarded as of March
2023, using 75 million in public dollars to leverage over $90
million of private sector funds, with far-reaching benefits.
For example, through the Gorilla Coffee Alliance in the
Democratic Republic of Congo, USAID, Nespresso, and Olam Food
Ingredients will invest a combined $12.3 million over 5 years
to support shade-grown coffee production, sustainable
agriculture, rural enterprises, improved health, and landscape-
scale governance. Together, this will reduce drivers of
poaching and deforestation in nearby Kahuzi-Biega National
Park, home to most of the 6,800 eastern lowland gorillas.
In conclusion, I hope I have given you an idea of how we
are addressing long-term conservation efforts, and where our
experience would be helpful and complementary to the additional
support envisioned and the new initiatives and private sector
investments stimulated by the International Conservation
Foundation Act.
Private investment needs to significantly outpace
government investment due to the urgency and scale of the
crisis. The biodiversity crisis is happening now and it is
accelerating. The private sector, which relies on strong,
global economies and vibrant societies, needs to increase its
investment. The cost of inaction is simply too great.
Thank you to the subcommittee and Congress for your
continued support of USAID's efforts to tackle these critical
conservation challenges. We need your partnership to continue
to draw on over 30 years on the ground in our partner countries
to address this existential threat.
I look forward to answering your questions.
[The statement follows:]
Prepared Statement of Ms. Gillian Caldwell
introduction
Chairman Coons, Ranking Member Graham, distinguished members of the
Subcommittee:
Thank you for the opportunity to testify about U.S. efforts to
conserve biodiversity and forests, which USAID Administrator Samantha
Power has called ``one of the most important steps we can take to
mitigate climate change and biodiversity loss while reducing the risk
of disease spillover and potential future pandemics.'' We are deeply
appreciative of your leadership in this area and your continued
partnership with us to address the biodiversity crisis.
This hearing and consideration of the International Conservation
Act (ICA) come at an important time. Nature is facing grave and
accelerating threats. As you are well aware, alarming declines in
wildlife populations and the deteriorating health of our oceans,
forests, and grasslands are a global crisis.
As you explore how this proposed foundation could help address this
crisis, I'd like to share some of what we have learned works best for
conservation. USAID's partners in the developing world are key
stakeholders in this challenge and in potential solutions to this
crisis. We focus on both long-term investment in protected and
community-conserved areas, as well as supporting responses to urgent,
changing threats. But the speed and scale of the biodiversity crisis is
threatening to undermine development gains that Congress and USAID have
worked to secure over decades.
USAID looks forward to continuing to engage with the Committee on
the ICA, and we welcome the potential to bring in much needed and
additional large-scale investment from the private sector, foundations,
and other philanthropies to address the current crisis.
In my testimony, I want to underscore the importance of long-term
investment and also touch on some areas where we would hope to advise
on best practices to ensure that our actions, and those stimulated by
this potential bill, would be additive to the global fight against
biodiversity loss.
Thanks to the generous support of Congress, USAID invests in
approximately 60 countries to conserve biodiversity, support
sustainable fisheries, and fight illegal logging, wildlife trafficking
and other nature crimes. Over the past several decades, we have honed
our approach to this crucial work, from supporting the development and
management of protected areas, to partnering with Indigenous
communities on community-led conservation efforts, to establishing
large public-private partnerships to ensure sustainably sourced
products and livelihoods for local communities. Along the way, we have
sought balance between nimble action and a strategic, consultative
process with appropriate safeguards. Our strategic approach to policies
and programmatic investments has been informed--and refined--by
experience and cutting-edge evidence and analysis.
Today, the vast majority of USAID's biodiversity funding goes to
direct bilateral programs on the ground with key country partners like
Mozambique, Colombia, and the Philippines--or to regional initiatives
in key biodiversity hotspots like the Congo Basin--because that is
where we see the greatest impact and greatest return on investment of
the funds invested by Congress.
Given our 60 years on the ground in the countries where we work,
USAID has a proven track record and longstanding relationships in these
countries, from key ministries to Indigenous community organizations to
community conservancies. We have well-established strategies and
rigorous monitoring and evaluation systems to ensure results and
accountability.
We know that protected areas require three things to flourish: (1)
long-term investment, (2) supported economic, livelihood and social
opportunities for local communities, and (3) private- sector
engagement. With these three pillars in place, protected areas provide
conservation benefits, regional stability, food security, and economic
growth.
Let me give you a few examples of where we are seeing the greatest
impacts, the best opportunities for lessons learned in long-term
programming as well as opportunities for growth.
lesson #1: ensure long-term investment in priority places and habitats
The importance of long-term investment to specific protected areas,
and for the communities that live in and around them that need to
thrive for conservation to succeed, cannot be understated. USAID
typically funds in five-year program increments. That ensures that we
have the ability to measure, evaluate and learn before we invest
further resources in a program. In key areas, we make a sustained
commitment to particular places and challenges, and have often funded
the same partner for a decade or more even while maintaining
competitive procurement processes. We have also fostered the transition
from international NGO project management to local NGO leadership,
often supporting the same place for the long term, while shifting, when
possible, from international to local partners for implementation.
Nowhere is this long-term support more important than the Congo
Basin in Africa, which contains the world's second largest contiguous
rainforest and carbon reserve, and is home to a rich array of wildlife
including four species of great apes and forest elephants as well as
nearly 80 million people representing 150 distinct cultural groups.
This critically important rainforest is under threat from unsustainable
logging and competing land use for agricultural commodities.
For over twenty years, USAID has invested in Congo Basin
conservation at scale across 11 landscapes covering over 80 million
hectares. In the 1990s, we developed a twenty-year vision for
investment in these landscapes that started with a focus on management
planning and ecological monitoring, the quintessential example of long-
term investment. Today we work with communities, businesses and
governments to conserve landscapes anchored by well-managed protected
areas, with much deeper and more extensive work to help rural people
participate in and benefit from natural resource management. This
includes policies and industry partnerships that help promote
sustainable cocoa and coffee industries to lift people out of poverty
and reduce pressure on forests and species.
In FY 2022, USAID support to protected areas and community forests
in the Congo Basin improved natural resource management of nearly 9
million hectares--an area roughly the size of Indiana--and tripled the
number of people benefiting from this work, from 30,205 in 2021 to
96,331 in 2022. Support for training, equipment, and infrastructure
facilitated 355,000 kilometers of patrols, which led to 207 arrests for
wildlife crime. This law enforcement success depends on complementary
investments in conservation-friendly enterprises to reduce local
motivation to commit crime, as well as judicial sector capacity to
ensure arrests turn into prosecutions and appropriate sentences.
Our long-term initiative in the Congo has generated important
lessons in protected area management, such as the best balance between
core protected area management, community support and engagement;
private sector partnerships and landscape planning. Each of these,
intentionally monitored and assessed, are key components to conserving
the Congolese landscape. FY 2021 funds supported work to strengthen at
least 200 government-managed protected areas and 250 community-managed
protected areas. The resulting protected areas, combined with land-use
planning, trade, and other policy measures are working to provide the
security, connectivity, and resilience needed to conserve strong
functioning ecosystems into the future.
A critical--and related--part of our programming is addressing the
illegal harvest and collection of biodiversity. For example, we
invested almost $56 million in FY 2021 funds to support the reduction
of poaching and illegal trade in animals--including illegal extraction
of terrestrial, freshwater, and marine species. USAID's comprehensive
strategy is responsive to the constantly changing threats of poaching
and wildlife trafficking, and it strengthens law enforcement from parks
to ports, reduces consumer demand for illegal wildlife products, and
builds international cooperation.
lesson # 2: make conservation work for indigenous peoples and local
communities
Second, we know from experience that conservation work must be done
in close collaboration with Indigenous Peoples and local communities
that have coexisted with nature for millennia in these beautiful and
diverse habitats. For more than 30 years, USAID has led on community-
based conservation, growing areas under conservation and linking
government protected areas with community conserved areas. Good
conservation is good development. Many communities depend on
biodiversity for their food, water, housing, livelihoods and cultural
way of life.
For example, in the late 1990s we started work in northern Kenya in
partnership with the Kenyan government and African Wildlife Foundation
and I am pleased to join Kaddu Sebunya at this hearing today. That work
focused on community-led conservation and building local leadership in
conservation action. Today we continue that work with one such local
organization, the Northern Rangelands Trust. This innovative
partnership benefits 630,000 people in 39 community-owned and managed
conservancies covering nearly 63,000 square kilometers (approximately
seven times the size of Yellowstone National Park). This partnership is
creating space for the 65 percent of Kenya's wildlife populations that
utilize community lands outside of protected areas. The partnership
also develops new economic opportunities, adding value to the livestock
market chain with an average $1-1.5 million annual revenue generated,
empowering more than 1,000 women through beadwork enterprises,
diversifying tourism opportunities that produce an average $900,000
income annually, and generating market- based conservation financing
options for conservancies. I visited this project last Fall and was
able to witness the benefits first hand. I broke ground on a new
maternity clinic in an area that was suffering from unnecessary deaths
during childbirth due to the distance women had to travel for care, and
I saw solar powered wells in operation. Now this community is
benefiting from conservation finance, with conservation funding paying
for the maternity clinic. That is the power of community-led efforts.
This partnership with the Northern Rangelands Trust has helped to
employ 858 eco-rangers, reducing poaching and increasing the elephant,
giraffe, wild dog, and buffalo populations across the 39 conservancies.
The partnership has also trained hundreds of community rangers
responsible for the protection of 45,000 square kilometers. The
organization empowers communities to manage sustainable businesses
linked to conservation. Challenges continue to exist, for example--the
current severe drought is impacting communities, and the survival of
livestock and wildlife. Finding solutions to new and existing issues is
a work in progress and emphasizes the need for our continued prolonged
engagement, social and natural science monitoring, and continued
adjustment and collaboration with communities to achieve long term
results.
We also work in marine protected areas that are critical for food
security. For example, over the past three decades, USAID and the
Philippines have worked together to address illegal, unreported and
unregulated (IUU) fishing to protect the country's aquatic resources to
ensure long-term sustainable use of the area's resources and strengthen
livelihoods for local fishers and communities. Since 2018, USAID
programs have helped protect over 2.5 million hectares of oceans, an
area about as big as Lake Erie. Efforts also include expanding habitat
and fisheries of municipal marine waters. In 2022, USAID and the
Philippines' Bureau of Fisheries and Aquatic Resource developed the
country's first IUU Fishing Index and Threat Assessment Tool in
municipal waters and in the fisheries management areas of the South
China Sea, where violation of the Philippines exclusive economic zone
by People's Republic of China fishing vessels has been occurring. The
tool has been used by 28 percent of local government units nationwide
in assessing IUU fishing. USAID's decades-long partnerships in the
Philippines have also focused on strengthening the rights of Indigenous
Peoples with ancestral domains, helping to ensure long-term sustainable
use of the area's resources.
lesson # 3: broaden the funding base by engaging the private sector
We know that communities, governments, and civil society
organizations can't do this alone. Private sector collaboration is
critical to success in this area, so I want to highlight some of the
success that USAID has had as part of our approach. As of FY 2021,
USAID had nearly 100 active Public Private Partnerships in the
environment sector, with every one government dollar matched by an
average of 3.7 dollars from private sector actors.
American companies depend on well-managed natural resources in
developing countries for stable and sustainable supply chains, but
there are extensive threats to the resource base: unsustainable
expansion for agriculture and livestock, climate change-influenced
rainfall and temperature fluctuations, unsustainable over-harvesting of
fish, illegal logging, wildlife poaching, and other nature crime, and
illegal or unsustainable extraction of resources in and around
protected areas.
USAID's HEARTH initiative (Health, Ecosystems, and Agriculture for
Resilient, Thriving Societies) is generating cross-sectoral
partnerships with private sector actors to conserve high- biodiversity
areas and improve the health, well-being, and prosperity of the
communities that depend on them. By working together through HEARTH,
USAID and the private sector can more effectively achieve our shared
goals for a healthier and more prosperous world. Other private sector
partners include large global brands such as Mars, Olam, and Disney, as
well as smaller companies working in and around important biodiversity
landscapes.
Seventeen HEARTH activities have been awarded as of March 2023,
using $75 million in public dollars to leverage over $90 million of
private sector funds, with far-reaching benefits. In West Africa, the
HEARTH RESTORE activity is increasing tree cover in cocoa landscapes in
Ghana and Cote d'Ivoire while improving farmer livelihoods. These
investments, supported by a combined $14 million from USAID and its
private sector partners, will reduce pressure on wildlife and protected
areas while restoring forest corridors for improved connectivity. The
activity will support 15,000 smallholder cocoa farmers by 2027 to use
more resilient agricultural practices, of which at least 50 percent
will be women and youth. Through the Gorilla Coffee Alliance, a HEARTH
partnership with Nespresso and Olam Food Ingredients in the Democratic
Republic of Congo, we will invest a combined $12.3 million over 5 years
to support sustainable agriculture, rural enterprise, improved health,
and landscape-scale governance. These actions aim to reduce drivers of
poaching and deforestation in nearby Kahuzi-Biega National Park, home
to most of the world's 6,800 eastern lowland gorillas. In 2022, its
first year, the Alliance produced over 1 million coffee seedlings,
distributed 431,000 seedlings to 1,500 farmers, and trained nearly
5,000 farmers (nearly half women) in regenerative agriculture
practices.
USAID has also funded conservation in Guatemala's Maya Biosphere
Reserve, the largest protected area in Central America and a seat of
ancient Mayan civilization, for more than three decades. This work,
which is ongoing, strengthens the conservation of biodiversity,
protected area management, environmental governance, civil society, and
Indigenous communities' participation in the Mesoamerican tropical
humid forest of Guatemala-Belize-Mexico, a trinational region
recognized as the ``Selva Maya.'' Conservation efforts in the Selva
Maya continue to be threatened by illegal logging and unmanaged
agricultural expansion.
Despite these pressures in this critical conservation area, over
the last decade, USAID and our partners created more than 25,000
permanent and seasonal jobs, generated over $55 million in sales of
products and services, and invested up to 30 percent of profits into
local schools, rural infrastructure, healthcare, and scholarships--all
while reporting a net-zero deforestation rate. In total, communities
we've worked with on sustainable forestry across Guatemala have made
about $200 million. The model of community forestry concessions has
been so successful at reducing deforestation that the Government of
Guatemala recently renewed them for another 25-year term while
expanding the area under community management.
USAID's partnerships with the private sector are informed by our
long-term presence and understanding of the local context. We tailor
our approach to meet the scale of the opportunity, from supporting
locally-owned enterprises around protected areas to greening global
supply chains. We are always seeking partners whose core business
interests align with opportunities to contribute to economic
development while better conserving biodiversity in critical landscapes
and seascapes.
conclusion
In conclusion, the biodiversity crisis is happening now and it is
accelerating--and the private sector, which relies on strong global
economies and vibrant societies, needs to increase its investment.
USAID has been and continues to invest in the long-term conservation
efforts necessary for the sustainability of protected and community
conserved areas and the communities that depend on them. We look
forward to continuing to work with the Committee to maximize private
sector investment in conservation. In fact, we believe there is
potential for even more than a 1:1 match to truly harness the power of
the private sector. The cost of inaction is simply too great.
We look forward to engaging with Congress on the Act and on our
Biodiversity policy which will be released this fall. The policy builds
on USAID's deep commitment to support strong, more resilient landscapes
and seascapes for long-term conservation for the benefit of local
communities and the global good. We look forward to our continued
dialogue to discuss how our work can best address the global
biodiversity crisis.
Thank you to the Subcommittee and Congress for your continued
support of USAID's efforts to tackle these critical conservation
challenges, and I look forward to answering your questions. We need
your partnership to address this existential threat.
I look forward to your questions.
Senator Coons. Thank you, so much Ms. Caldwell.
Mr. Sebunya.
STATEMENT OF MR. KADDU SEBUNYA, PRESIDENT AND CHIEF
EXECUTIVE OFFICER, AFRICAN WILDLIFE
FOUNDATION
Mr. Sebunya. Thank you, Chairman Coons. I recognize the
Ranking Member, Senator Graham, and the distinguished Members
of the Subcommittee. I am grateful for the opportunity.
More than 3 million square miles managed as Africa's
protected and conserved areas provide clean air, water, flood
control, disease control, climate regulation, and a host of
other life support services, to billions of Africans on the
Continent.
American support for balancing conservation and development
on the Continent is welcome and important; however, for this
support to be effective it must be tied to African
perspectives, priorities, and aspirations. Experience has shown
us that conservation characterized by isolated interventions
parachuted in with well-meaning but extremely driven--
externally driven has been insufficient.
African conservation requires investments in solutions that
address complex realities, and rapidly emerging conservation
challenges facing the Continent and its leaders. Addressing
these challenges requires building African practitioners who
are rooted in their communities, landscapes, and socio-
political contexts, leaders who can develop locally relevant
solutions, and national movements that, correctively, have the
potential to bring large-scale change. These leaders can be
your partners.
It is my conviction that the survival of a health ecosystem
in Africa hinges largely on one factor, linking Africa's
conservation agenda in meaningful ways to the aspirations and
mindsets of African people.
I believe that the solution to conservation in Africa is in
finding the balance between conservation and development. I am
certain that effective conservation must reinforce and
complement economic development. Support for conservation
shouldn't be only for animals and their habitats, but for
putting in place sustainable economic models that empower
people, and allow nature to thrive.
Therefore, the conservation money on the ground in Africa
should promote democracy, reduce threats to terrorism, provide
natural-based solutions to climate change, advanced green
growth and economies, and increase state security. The good
news is Africa is already aligned to conservation approaches to
deliver this.
In July last year, at the first ever, Africa Protected
Areas Congress, Africa agreed to an African-led conservation
plan that provides unparalleled opportunity and means for the
U.S. to engage with Africa and hold us accountable for
conservation and development at a continental level.
I believe that to secure protected areas, you need an
investment ratio of $1 to $2, meaning for every dollar spent
inside a protected area you need to spend another two outside,
that investment in communities around protected areas, is how
AWF has been successful in securing wildlife habitats.
Protected areas across Africa are the size of Australia,
largely the budgets are ineffective, mostly are managed at 50
U.S. dollars per square mile, in comparison to Yellowstone
managed at $3,700 per square kilometer.
I have personally worked on the U.S.-funded programs that
build lasting, impactful, African environmental institutions,
with the USAID, Peace Corps, State Department, and other U.S.
entities. We created the environmental authorities across
Africa in 1990s, creation of ministries of environment in the
1980s, national park services, and wetland authorities. Those
investments are what helped in protecting 30 percent of the
global biodiversity now under threat on the Continent.
Thank you, because we need U.S. to continue to lead. It
allows us to put nature at the center of cooperation on
economic growth, climate mitigation, and adaptation, a
sustainable energy transition, conflict resolution, prevention
of future pandemic, and the reduction of terrorism.
I would like to thank the Subcommittee on the State,
Foreign Operations, and Related Programs for this opportunity.
The U.S. Foundation for International Cooperation Act has a
potential to be a transformative influence in international
conservation landscape.
But for this new mechanism to truly succeed, it mustn't
perpetuate past mistakes. The African Wildlife Foundation looks
forward to continuing the partnership of this ambition by
promising the journey together.
I thank you for the opportunity. And I wait to answer your
questions, sir. Thank you.
[The statement follows:]
Prepared Statement of Mr. Kaddu Kiwe Sebunya
On behalf of the African Wildlife Foundation (AWF), I thank the
Subcommittee on State, Foreign Operations, and Related Programs for
this opportunity to submit testimony. We are grateful for your
continued leadership and championing support towards International
Conservation.
Over 6 million square kilometers managed as Africa's protected and
conserved areas provide clean air and water, flood control, disease
control, climate regulation, and other life support services for the
billions of Africans on the continent of all humanity. They are
reservoirs of biodiversity, part of the toolkit for addressing climate
change, sources of spiritual and cultural value, and a natural heritage
for all.
Climate change is threatening food security, health, and well-being
with related displacement and forced migration for countries hardest
hit by desertification, floods, rising sea levels, and other natural
disasters. The East African region, for example, has been facing the
worst drought in decades, predicted to impact over 36.1 million people
in the Horn of Africa alone. For Kenya, Somalia, and Ethiopia, this
entails over USD 2.68 billion to support critical sectoral needs
(water, food, and pasture) up to July 2023. All these have significant
implications for arable and habitable land, and access to water,
especially as the region continues to urbanize.
Diseases of high risk to humans are on the rise as globalization
and an increase in unsustainable land and resource use continue to put
humans into close contact with each other and wildlife. The COVID-19
pandemic has demonstrated that emerging infectious diseases are a
threat to economies and lives across the globe and that the status quo
of disease response is inadequate. While the spectrum of emerging
diseases is large, the majority have origins in wild animals. Efforts
to address the socioeconomic impacts of emerging diseases have
primarily focused on mitigation after emergence rather than containing
diseases closer to their source in wild animals. Conservation of
wildlife and natural areas presents an opportunity to prevent the
transmission of diseases from wildlife to humans at the local scale.
importance of locally led-conservation
American support for balancing conservation and development on the
continent is welcome and vital. However, for this support to be
effective, it must be tied to African perspectives, priorities, and
aspirations. Conservation characterized by isolated interventions
parachuted with well-meaning but externally driven motives is
insufficient and counter-productive. African conservation requires
investment in solutions that address the complex realities and rapidly
emerging conservation challenges facing the African continent and its
leaders. Addressing these challenges requires leaders rooted in their
communities, landscapes, and social and political contexts. Leaders who
can develop locally relevant solutions and national movements that
collectively have the potential to bring large-scale change. These
leaders can be your partners.
The long-term success of balancing conservation and development on
the continent can be better achieved with the continued support of
partners in the U.S. who play a critical role in ensuring Africa
thoughtfully conserves its wildlife and wildlands. For example, the
Africa Protected Areas Congress (APAC) is an African-led initiative
coming at a critical juncture. APAC provides an unparalleled
opportunity for the U.S. and other development partners to learn of
African priorities and a continental engagement on conservation and
development.
supporting people-centred conservation
Putting people at the center of effective and equitable
conservation is a concept AWF has proven to live by through our more
than 60 years of experience in conservation on the continent. This is
why recommend that U.S. support for International Conservation must
uplift Indigenous Peoples, local communities, women, and youth, working
in partnership with governments, civil society, and private actors to
sustain the scientific and traditional knowledge, and customary
approaches that will result in effective conservation and the long-term
resilience of nature, culture, livelihoods, and human well-being. Over
the decades, the United States support for International Conservation
was critical in promoting the engagement of local communities in
conservation through the development of community conservation areas in
many African countries. Through support from U.S. agencies, AWF was at
the forefront of establishing community conservancies in Kenya and
Namibia, Wildlife Management Areas in Tanzania, wildlife ranches in
Uganda, community forest reserves in the Democratic Republic of Congo,
and other community natural resources management programs across the
continent.
a holistic integrated landscape approach to conservation
It has become increasingly apparent that conservation cannot be
done without other land use activities and development goals. The
failures of the fortress approach to conservation in Africa are evident
reminders of the need to forge a uniquely African development model
that safeguards biodiversity, secures ecosystem services, and delivers
economic benefits to communities and local and national economies.
United States support can help advance a holistic, integrated approach
to conservation through multifaceted and well-coordinated partnerships
and consortiums formed and driven by experienced entities with local
trust and international influence and relationships, the capacity to
attract and manage large budgets, and access to skills and technologies
necessary for planning and execution.
building wildlife economies
Intact landscapes and thriving wildlife populations have vast
potential to contribute to socioeconomic development. However, wildlife
conservation is frequently seen as a cost to governments, resulting in
little investment in wildlife resources despite the extensive
contributions that the wildlife economy can make. Wildlife conservation
does contribute to local, national, and regional economies in terms of
employment and revenues, as well as in terms of livelihoods and
subsistence. The wildlife economy offers the opportunity to turn
conservation into a growth industry, attracting young, inspired
leaders, increasing private sector investment in wildlife resources and
related businesses, involving communities, and increasing their
benefits and nature/wildlife becoming more abundant. Governments must
see wildlife as a critical strategic asset, investing in this asset,
creating an enabling environment for the wildlife economy and,
therefore, resulting in the conservation of related wildlife resources.
Importantly, wildlife economies provide avenues to ensure
conservation in Africa is sustainable through generating revenues for
livelihoods and reinvestment into conservation programs. U.S. support
is critical to stimulate the growth of wildlife economies on the
continent. Five essential areas for investment are crucial to unlocking
and growing wildlife economies across the continent, including--
strengthening policy, legal and regulatory provisions governing natural
resources, particularly property rights over wildlife, forests, and
fisheries; improving the overall business environment to attract
investment; promoting collaborations and partnerships; improving
transparency and data collection; and building capacity of all
stakeholders to engage in, and manage, the wildlife economy.
combatting wildlife trafficking and other nature crimes
U.S. Congress-directed funding to combat illegal wildlife
trafficking has enabled African countries to combat poaching on the
ground and the trafficking of wildlife. The U.S. support through
instruments such as the Eliminate, Neutralize, and Disrupt (END)
Wildlife Trafficking Act in 2016 and other measures has allowed for
innovative and collaborative approaches that strengthened in-country,
regional, and continental level enforcement. The removal of two African
countries, Kenya and Uganda, from the 'gang of eight' countries can be
partly attributed to the support afforded by the United States.
Although much has been achieved, wildlife poaching and trafficking
remain challenging in Africa. It is imperative to protect and build on
the gains achieved so far in combatting wildlife trafficking in Africa.
Although much has been achieved, wildlife poaching and trafficking
remain challenging in Africa and cannot be addressed in isolation.
Wildlife crimes are frequently associated with other nature crimes,
including criminal forms of mining, logging, fishing, and land
conversion. The challenge is that current efforts to combat these
crimes are highly fragmented and can only bring incremental gains
instead of transformative interventions. Therefore, efforts by
governments and law enforcement bodies, civil society, donors,
companies and financial institutions, and local communities must be
coordinated and collaborative across these types of crimes. Fundamental
to these efforts is continued investment in community awareness and
working with communities for their buy-in in protecting wildlife
resources.
mainstreaming conservation in delivery of the u.s.-africa partnership
U.S. support for African conservation through International
Conservation is critical but cannot guarantee success. Development
approaches in other sectors, such as agriculture, mining, health,
security, manufacturing, and industry, pose severe threats to Africa's
ecosystems and wildlife. Thus, unless Africa assumes a sustainable
development pathway, biodiversity loss will continue undermining our
global success in addressing climate change, pandemics, and pollution,
among other crises. We must acknowledge that global targets cannot be
met unless Africa defines a different path than ``develop now and clean
up later.'' President Biden's efforts to reinvigorate the U.S.-Africa
partnership provide a pivotal platform to confront modern challenges,
putting nature at the centre of cooperation toward economic growth,
climate mitigation, adaptation, just energy transition, conflict
resolution, and global health that contributes to preventing future
pandemics. Conservation of Africa's natural infrastructure must be
integrated into investment, trade, and development programs under the
reimagined U.S.-Africa partnership.
sustainable finance for conservation
Funding shortfalls are a source of the problems plaguing African
protected area systems. Currently, African-protected and conserved
areas receive only 10% of what is needed for effective management. Most
African protected and conserved areas are under-resourced, managed on
$50 per km\2\ rather than the $1,000 per km\2\ needed. A survey
conducted by AWF found severe budget shortfalls among 70% of the 700
protected and conserved areas consulted, and an astonishing 9% don't
have a budget at all. To reverse this trend and effectively manage all
protected and conserved regions on the African continent, $2.6-$6.7
billion is needed annually. If this shortfall is not addressed
urgently, the consequences will be dire with at least 70 percent of
people depending on natural resources for their livelihoods, living in
poverty.
Committing to ambitious targets such as conserving 30% of land and
30% of oceans under the new Kunming-Montreal Global Biodiversity
Framework, Africa needs to protect critical habitats and halt
biodiversity loss and extinction while advancing benefits to people,
economic growth, and recovery. Significant well-structured investment
is required for adequate financing for protected areas and effective
management to achieve these multiple objectives. The U.S. government
has supported several African countries' protected areas management and
advanced other effective area-based measures, such as conservancies and
other community natural resource management programs. However, a more
sustainable mechanism for financing Africa's natural infrastructure is
more critical now than ever.
The U.S. Foundation for International Conservation Act has the
makings to be an influential wheel in the international conservation
landscape. It has long been evident that government funding is
insufficient to meet global conservation challenges and opportunities.
Incentivizing and challenging philanthropy to match U.S. government
financing to provide long-term, predictable funding for effective
management of protected and conserved areas will be crucial in building
the river of conservation financing to ensure that these strongholds of
biodiversity continue to provide economic, environmental, social, and
cultural benefits locally and globally. The Foundation must be built on
the premise that it prioritizes projects with host-country government
and local community support and that creates economic opportunities.
For this new mechanism to truly succeed in supporting the long-term
conservation of critical landscapes, it mustn't perpetuate past
mistakes. Firstly, the Foundation needs to advance holistic
conservation approaches to ensure protected areas do not increasingly
become islands isolated from other conservation areas and alienate
people from nature. Secondly, resources for conservation need to reach
where they are required most--the communities that live side by side
with wildlife. Lastly, we can scale impact from limited resources only
if we work collaboratively with stakeholders. Focusing resources on a
few parks will bring gains but will not be transformative or reach the
scale required.
In closing, we encourage continued robust U.S. investments in
international conservation to respond to pressing and intertwined
challenges--the rapid loss of nature and biodiversity on a global
scale, the global climate crisis, and the threat to global health and
the economy posed by the spillover and spread of zoonotic diseases that
can lead to future pandemics. These challenges have roots in the loss,
degradation, and over-exploitation of nature. The United States is
central in helping galvanize global action, ambition, and investments
to address these problems. International conservation investments are
among the most straightforward and cost-effective solutions to
addressing them and their threats to the United States and U.S.
interests abroad. Developed countries like the United States are
critical partners in this respect.
Senator Coons. Thank you, Mr. Sebunya.
Last, we turn to Dr. Andrew Steer, President and CEO of the
Bezos Earth Fund.
STATEMENT OF DR. ANDREW STEER, PRESIDENT AND CHIEF
EXECUTIVE OFFICER, BEZOS EARTH FUND
Dr. Steer. Thank you very much, Chairman Coons, Senator
Schatz, it is an honor to be with you today. I am Andrew Steer,
the president CEO of the Bezos Earth Fund, prior to this I was
president and CEO of the World Resources Institute.
The Earth Fund is a philanthropy founded by Jeff Bezos in
2020. Our mission is to allocate boldly and wisely, $10 billion
in grants by 2030, to reverse the loss of nature and address
climate change. So far, we have pledged $3 billion in grants
for nature; $1 billion to conserve the nature we still have, $1
billion to restore what is lost, and $1 billion to help
transform agriculture to increase food whilst taking pressure
off the land.
We look forward to working in partnership with the exciting
proposed U.S. Foundation for International Conservation, we are
discussing today.
We are all very familiar with the accelerating loss of our
beautiful planet, aren't we? The facts are stunning consider
this, since 1970 one species, Homo sapiens, which is us, has
doubled our population. During the same period, the total
population of mammals, birds, fish, reptiles, and amphibians,
has fallen by more than half. We can do much better than this.
There is good news. A large amount of our globally
significant biodiversity can be founded--found in a limited
number of places which makes conserving it easier.
There is more good news. Last year, almost all of the
nations of the world, including the United States, agreed to a
global goal of protecting 30 percent of all the land and ocean
by 2030. If implemented, this could be a game changer.
We are learning how critical conservation can be in
promoting security. Healthy ecosystems can withstand
disturbances, such as droughts, floods, and storms, which can
lead to crop failures, and other problems that can destabilize
a country. Conservation can help reduce the risk of conflict
over natural resources. Many conflicts throughout history have
been driven by competition over resources, such as water and
land.
Conservation can also prevent illegal exploitation of
nature which funds conflict and threatens security. Today,
illegal wildlife trade is funding criminal networks, and
militias, and poaching is destabilizing economies, decimating
iconic species, contributing to the spread of zoonotic
diseases, such as Ebola and SARS.
There are numerous examples of how conservation can help
create more stable and secure countries. In my written
testimony I give examples from Costa Rica, Rwanda, Namibia, and
the Congo Basin.
So conservation is a rare win-win-win. Why is it not
happening faster and better?
Let me suggest three things that are necessary to unlock
more progress: Finance, political engagement, and genuine
partnerships between the public and private sector.
The proposed bipartisan bill, introduced by Senator Coons
and Senator Graham, offers all three. First Finance, there
remains an urgent shortage of funding, addressing this shortage
by leveraging public with private finance is one of the best
opportunities for the U.S. Government to enhance its leadership
in protecting nature and improving security.
Second, political engagement, while most countries have
made commitments to increase conservation, many face major
headwinds from vested interests. In our experience it is highly
valuable for such leaders to know of the support of the United
States, and to regularly participate in dialogue with senior
U.S. politicians.
Whilst the proposed fund would be formally independent of
the U.S. Government, it would have government leaders on its
Board, and would benefit from regular engagement from leaders,
such as yourself.
Third, partnership with the private and philanthropic
sectors, private philanthropy is willing to commit significant
resources to conservation and plays a highly complementary role
to public funding. They also like to work in partnership. For
example, 2 years ago 11 philanthropies, including the Bezos
Earth Fund, came together to put $5 billion on the table to
show our seriousness in advancing conservation.
The work of these and other private funders can be even
more effective if done in partnership with a proposed
initiative. Both public and private can reach different places,
and influence different actors, and both will be more effective
in the presence of the other.
Conservation, of course, must be done right. It must be
owned and driven by host countries, by local inhabitants and
indigenous people. Too many efforts have failed due to top-down
measures, and a perception that conservation is imposed from
Western countries. Conservation programs must focus on jobs and
livelihoods. The proposed legislation would insist, we believe,
on best practice.
In conclusion, the United States has been a global leader
in conservation for 150 years. When Yellowstone became the
first national park in 1872, it was also the first such park in
the entire world.
When President Teddy Roosevelt created five national parks,
18 national monuments, 51 bird sanctuaries, and established the
National Wildlife Refuge System, other countries took notice,
and the best of them sought to emulate this leadership. The
best of them still do today.
There is a big opportunity today for U.S. leadership
through the proposed U.S. Foundation for International
Conservation. It can help reduce conflict, and migration, it
can improve economic opportunity, and can enhance good
governance, and democracy. It can do this by conserving
irreplaceable natural beauty, the diversity of life, and the
goodness of God's creation.
Thank you.
[The statement follows:]
Prepared Statement of Dr. Andrew Steer
Chairman Coons, Ranking Member Graham, Members of the Senate State,
Foreign Operations, and Related Programs Appropriations Subcommittee,
thank you for convening this hearing on international conservation and
the opportunity to testify. I'm Dr. Andrew Steer, President & CEO of
the Bezos Earth Fund. Prior to this I was President and CEO of the
World Resources Institute.
The Earth Fund is a philanthropy founded by Jeff Bezos in 2020. Our
mission is to allocate $10 billion in grants by 2030 to protect nature
and address climate change. We have pledged $3 billion to nature--
including $1 billion to conserving the nature we still have, $1 billion
to restore what we have lost, and $1 billion to help transform food and
agriculture to alleviate pressure on nature. In the past 2 years we
have disbursed $550 million for conservation and restoration.
We plan to do much more, and we look forward to working in close
partnership with the proposed Fund we are discussing today.
the challenge and opportunity
We are losing nature at a dangerous rate. The facts are stunning.
Consider this: since 1970, one species--homo sapiens--has doubled its
population. (That's us.) During the same period, the total population
of mammals, birds, fish, reptiles, and amphibians has fallen by more
than half.\1\
We all are familiar with the accelerating loss of our beautiful
planet. Biodiversity loss is everywhere and is accelerating. Nearly 75%
of land surface and over 85% of wetlands have been altered or lost, and
more than one million species may be in danger of extinction this
century, creating grave threats to human health, well-being, food
security, regional stability, and continued economic success. The world
has years, not decades, to address biodiversity loss. This means we
need to find dynamic avenues that create pathways for more conservation
efforts in some of the most biodiverse and vulnerable parts of the
world.
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\1\ World Wildlife Fund. ``Living Planet Report.'' Panda.org.
Accessed on April 28, 2023. https://livingplanet.panda.org/en-US/.
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There is good news. A large amount of our globally significant
biodiversity can be found in a limited number of places, which makes
conserving it easier. Over the past decade there has been real
progress. Globally protected areas have been doubled to 16% of the land
and 7% of the ocean. But this is not enough. Protected and conserved
areas have been shown to be one of the most effective tools to conserve
nature and support the wellbeing of millions of people, when well-
managed and designed to respect the needs and rights of Indigenous
People and local communities. Protected and conserved areas provide
benefits to local communities--including fresh water, clean air and
fertile soil for food production, and poverty alleviation, as well as
stability and regional security. Additionally, protected areas serve as
a backbone for the larger landscape scale conservation and restoration
that is needed.
Globally, there is growing political momentum in support of
conservation. Last year almost all the nations of the world, including
the United States, agreed to protect 30% of the terrestrial,
freshwater, and marine ecosystems most important for biodiversity by
2030. This marked a remarkable increase in ambition and, if
implemented, could be game-changing. Research indicates that sound
guardianship of 30% of the planet in the most important places for
biodiversity could protect up to 80% of plant and animal species, and
secure 60% of the planet's carbon stocks and 66% of the planet's clean
water.
It is important to note that to be successful conservation must be
done right. Most important it must involve and be owned by local
inhabitants and indigenous peoples. Too many efforts have failed due to
top-down measures. It must also be scientifically driven, drawing upon
the highest quality biological and social sciences.
conservation, resilience and security
We are also learning how critical conservation can be in promoting
security--for communities, countries, and the United States.
First, conservation helps to protect and preserve ecosystems.
Healthy and diverse ecosystems maintain soil fertility and provide food
and clean water. When these ecosystems are healthy, they are better
able to withstand environmental disturbances such as droughts, floods,
and storms, which can lead to crop failures, water shortages, and other
problems that can cause social strife and dislocation and can
destabilize a country.
Second, conservation can help to reduce the risk of conflict over
natural resources. Many conflicts throughout history have been driven
by competition over resources such as water, land, and timber. By
conserving these resources and using them sustainably, countries can
reduce the likelihood of such conflicts arising.
Third, illegal exploitation of nature can fund conflict and
threaten stability. Illegal wildlife trade, for example, is funding
criminal networks and militias. Ivory and rhino horns are a source of
income for armed groups in Africa. Poaching is destabilizing economies,
undermining good governance, and decimating iconic species. Illegal
wildlife trafficking may also contribute to the spread of zoonotic
diseases, such as Ebola and SARS.
There are numerous examples of how conservation can help create
more stable and secure countries. A few examples:
--Costa Rica\2\.--Costa Rica is known for its commitment to
conservation, having protected over 25% of its land area in
national parks and reserves. This has helped to create a
thriving ecotourism industry, which has become a major source
of revenue for the country. By preserving its natural
resources, Costa Rica has been able to build a sustainable
economy that benefits both the environment and the people.
--Rwanda\3\.--After the genocide in 1994, Rwanda faced significant
challenges in rebuilding its economy and society. The country
has made significant progress in recent years, in part due to
its focus on conservation. Rwanda has established several
national parks and protected areas, including Volcanoes
National Park, which is home to the endangered mountain
gorilla. This has helped to attract tourists and generate
revenue, creating jobs for tens of thousands of people.
--Namibia\4\.--Namibia has implemented a community-based natural
resource management program, which gives local communities the
right to manage and benefit from wildlife and other natural
resources. This has helped to reduce conflict over resources,
while also providing economic opportunities for local
communities. As a result, Namibia has seen a significant
increase in wildlife populations, including elephants and
lions, promoting jobs and stability.
--Congo Basin\5\.--The Congo Basin is a region of immense ecological
importance, home to some of the world's most biodiverse forests
and a significant proportion of Africa's wildlife. However, the
region is facing significant threats from deforestation,
mining, and other human activities. Conservation efforts in the
Congo Basin have focused on protecting key areas of forest and
wildlife habitat, as well as supporting sustainable livelihoods
for local communities. Through these efforts, conservation has
helped to reduce conflict over natural resources, promote
sustainable economic development, and preserve the rich
biodiversity of the Congo Basin.
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\2\ Costa Rica: ``Costa Rica.'' World Bank, last modified October
22, 2021, http://www.worldbank.org/en/country/costarica/overview.
\3\ Rwanda: ``Rwanda: A Conservation Success Story.'' World
Wildlife Fund, last modified October 22, 2021, https://
www.worldwildlife.org/stories/rwanda-a-conservation-success-story.
\4\ Namibia: ``Community-based natural resource management in
Namibia.'' International Institute for Environment and Development,
last modified October 22, 2021, https://www.iied.org/community-based-
natural-resource-management-namibia.
\5\ Congo Basin: ``Conservation in the Congo Basin.'' Wildlife
Conservation Society, last modified October 22, 2021, https://
www.wcs.org/our-work/places/congo-basin.
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what's missing?
Conservation is a rare win-win-win. So why is it not happening
faster and better? Let me suggest three things that are necessary to
unlock more progress: finance, political engagement, and genuine
partnerships between public and private sectors. The proposed
bipartisan bill, introduced by Senator Coons and Senator Graham, offers
all three.
Finance.--The lack of funding is a major obstacle to the effective
management of protected and conserved areas. Addressing the lack of
financial resources--especially long-term funding--by creating a new
public-private partnership is one of the best opportunities for the
U.S. government to enhance its role in protecting biodiversity and
improving security. A new public-private partnership can mobilize
significant new funding from both public and private sources to address
the funding gap and provide the long-term funding required for the
effective management of protected and conserved areas.
This common-sense bill would empower a new entity to leverage
private funding toward the goal of conserving the most vulnerable parts
of the world. By passing this legislation, the U.S. Congress would
advance its leadership in enabling more public-private investment in
global conservation.
Political Engagement.--While most countries in the world have made
a commitment to increase conservation under the ``30x30'' pledge, many
face major headwinds from vested interests. In our experience it is
highly valuable for such leaders to know of the support of the U.S.,
and to regularly participate in dialog with senior U.S. politicians.
While the proposed fund would be formally independent of the U.S.
government, it would be partially funded by it, and would, we expect,
benefit from regular engagement, including in-country visits which
would engage at the highest levels. This would be a vital complement to
any financial contributions.
Partnership with the Private and Philanthropic Sectors.--Private
philanthropy is committing significant resources to conservation and
plays a highly complementary role to public funding. One way
philanthropy has contributed to this agenda is through innovative
partnership models supporting specific goals. For example, the
Protecting our Planet (POP) challenge is the largest-ever private
funding commitment to biodiversity conservation. Eleven
organizations\6\ have pledged $5 billion in grants to help achieve the
``30 by 30'' initiative.
This coalition of philanthropists committing $5 billion has not
created a new fund. Rather they seek to closely coordinate their work,
share analysis, and mix funding for specific programs. We prioritize
efforts with indigenous peoples and local communities, as well as local
and Federal governments. These private funders are supporting projects
around the globe that will help achieve the 30x30 initiative as
proposed by the High Ambition Coalition (HAC) for Nature and People, a
group of 70 nations. The work of these and other private funders can be
even more effective if done in partnership with the proposed
initiative. Leverage will come both from increased financial flows, but
also from the synergies that arise from public and private actors. Both
``public'' and ``private'' can reach different places and influence
different actors, and both will be more effective in the presence of
the other.
There are examples of other governments doing similar investments.
An analogous program, developed by the German government, the Legacy
Landscape Fund, is successfully providing sustainable funding for the
effective management of protected and conserved areas in developing
countries. Importantly, it has unlocked large amounts of private
dollars and unleashed an entrepreneurial and cost-effective approach to
conservation. This is critical to closing critical gaps to identify and
financially support implementation-ready projects.
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\6\ Members of the Protecting Our Planet challenge are: Arcadia,
the Bezos Earth Fund, Bloomberg Philanthropies, Bobolink Foundation,
Gordon and Betty Moore Foundation, International Conservation Fund of
Canada, Re:wild, Nia Tero, Rainforest Trust, Rob & Melani Walton
Foundation, and the Wyss Foundation
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conclusion
Effectively managed protected and conserved areas that improve
natural resource management, and restoration of degraded lands have
been shown to reduce conflict and migration in response to food
insecurity and drought. They have also protected irreplaceable natural
beauty and the diversity of life. In addition, the involvement of local
communities with the effective management of conserved areas, improves
their economic opportunity and even instills good governance and
democracy.
With a focus on protected and conserved areas, this new entity will
create synergies with efforts by USAID, USFWS, and others to focus on
other effective conservation measures that are needed to achieve
landscape scale conservation. These investments collectively represent
smart U.S. foreign policy and aid. Durable U.S. government funding,
that leverages private sector resources, will help ensure this
leadership is valued and our core economic and national security
interests are advanced.
Thank you.
Senator Coons. Thank you very much and thank you to our
panel.
We are going to start with a round of questions. I have one
colleague with me now. We will see whether we have others join.
In the absence of others, I will simply indulge myself in the
second round, of unlimited length I suspect.
[LAUGHS]
Dr. Steer, if I might, with you. You cited some really
remarkable, impressive numbers there, of billions of dollars of
philanthropy dedicated to conservation into protecting
biodiversity. What is the best argument for why there needs to
be a partnership between government, philanthropy, and the
private sector? Why is there a role for government in doing
this? Why not simply rely on a handful of visionary donors,
unrestrained by the vagaries of politics, and the accounting
and auditing requirements of spending public dollars?
Dr. Steer. Senator, I believe that the--I believe the
public sector can reach where the private sector can't. When I
listen to the kinds of visits that you and your colleagues
make, how wonderful it would be if those conversations that you
have, which are already very effective, were backed up by
serious resources that bring both the private and the public
together.
We are very, very good at financing non-governmental
organizations, they have an amazing role to play, as we heard
today from Mr. Sebunya, you know, and there are many others
doing world-class work. But the plain fact of the matter is if
we are going to be effective we need to aim at every single
level, including the very highest levels of government. And
that is where you come in, and you are so very, very effective.
And as I said in my statement, the United States has been a
leader, and engaging at a senior level makes a huge difference.
Also, I should say, that you have the capacity by putting
relatively modest amounts of money in to attract more private
sector. And that is what the Germans have figured out in their
Legacy Landscape Program, where they actually match the
resources that the private philanthropy and private companies
bring in, and it is really very effective.
Senator Coons. Mr. Sebunya, you referenced the Africa
Protected Areas Congress in Kigali, a critical convening in
which you played a central role, that called for increased
funding for locally led conservation projects. And it is my
sense, and all three of you have either referenced or directly
testified to this, that the gap, the funding gap for
conservation is dramatic. It outstrips the capacity of any one
government, even the United States Government, any one national
government in the developing world, or in the Global South, and
any particular philanthropy.
You also pointed to the critical role of indigenous
communities in identifying, prioritizing, and leading human-
centered development. I think in your testimony you said: The
fortress model of conservation has demonstrably failed, and we
need a human-centered and indigenously informed model.
How do you think we should come up with a valuation plan, a
selection plan that ensures local ownership? Not just a seat at
the table, but a driving role in terms of how sites are
designed, projects are selected, they are prioritized, and they
are maintained, and then delivered over many years?
Mr. Sebunya. Thank you, Senator. I think that it is going
to start by meeting the people where they are. In my travels in
Africa, and in my discussion with African leaders, and the
community leaders, they really spend most of the time dealing
with their human aspirations, dealing with their livelihoods,
looking at their ambitions. And I think tying the agenda we
have for conservation as part of the aspirations and outlining
that is going to be very, very critical.
At the moment here, most of the discussions on conservation
are political and economic. And so the role of--and that is
where the role of private sector and government is critical in
reaching our goals.
It is going to be the economy, and that is why we are
suggesting, if we are to secure a protected area, you are going
to invest a dollar, but that 2 dollars have to go to meet the
economic aspirations of the people dealing with wildlife
economies.
And we are not talking about tourism alone but: How they
are going to feed this huge population? How do we invest in
sustainable agriculture? What value chains can we bring? What
types of economies are compatible to these wildlife areas? And
I think that those 2 dollars are most--best suited to come from
private sector, from impact investors to support those value
chains.
But the government has a role in regulating, in creating
policies that are aligned to community participation, building
the right governance systems, the deals we want formulated. So
it is that empowerment through economic and social discussions
that are going to get us to where we are, and I think it is
critical that this partnership, this foundation under the
private sector is going to be extremely helpful in what we are
trying to achieve.
Senator Coons. Thank you. Ms. Caldwell, you laid out in
your testimony three critical points. One, broaden the base by
engaging the private sector to partner closely with indigenous
communities, but in some ways the central and long-term
investments, investments informed by rigorous metrics and
evaluation, USAID has not always been known for the ability to
sustain across administrations, you know, long-term contracts,
but you cited several very promising examples, where you have
accomplished exactly that.
What, if any, challenges are there, contractually,
structurally, statutorily, for USAID to do 5- and 10-year
commitments, that is part of what this foundation model is
designed to help facilitate, both the metrics and the long
term?
In discussing this with Senator Graham, and with others on
this Committee, and in the House, they have often cited the MCC
as an example of something that through the Compact process has
rigorous metrics and long-term engagement.
I couldn't agree more with your three central points. Help
me understand what, if any, constraints there are on USAID
being able to deliver on those long-term investments?
Ms. Caldwell. Thanks so much, Senator Coons. There is
nothing that prohibits reinvesting after what is, typically, a
5-year investment in the programs that we are engaged with. We
do believe strongly in the importance of competitive
procurements. We also believe strongly in the importance of
monitoring, evaluation, and learning.
So funding in 5-year increments really allows us to kind of
assess best practice, understand the impact, and make sure our
investment is well placed. When and if that investment is well
placed, they are, obviously, likely to succeed in procurement,
and that investment continues in many instances.
You also referenced swings in Congress, and that challenge.
Thankfully, our biodiversity funding has typically been able to
maintain support through various administrations, but it is a
real risk. There is nothing more important, I think, for us in
terms of ensuring longevity as predictability. And many of our
Missions face highly unpredictable budget levels. So even while
we may be able to sustain overall support under a given
earmark, there may be Congressional directives and top lines
which skew investment into new directions, where there may or
may not be existing capacity immediately available to deploy.
So I think, thinking about not just sustaining and
increasing this kind of biodiversity funding over time, but
also enabling us to continue to invest in the Missions that are
really effectively delivering this biodiversity programming, in
some of the most biodiverse regions of the world is critically
important.
Senator Coons. Thank you. Senator Schatz.
Senator Schatz. Thank you, Mr. Chairman.
Thank you, all for being here to testify. I am really
interested in the testimony that talks about the fortress model
of conservation. One of my proudest achievements, in
partnership with President Obama's administration, and many,
many others is the establishment of Papahanaumokuakea Marine
Monument, and it is, you know, almost 600,000 square miles, and
I worry very much that it will be a paper monument.
And so what worries me a bit about the ``30 by 30'' is
exactly that, is that the sort of geopolitical, diplomatic
impetus for an announceable will cause a bunch of people to
declare a bunch of things off limits, and will lack sufficient
resources to actually manage those terrestrial ecosystems, or
ocean ecosystems. And I am just wondering how we think about--I
do think we should have these goals, but I could see a scenario
where we, superficially, meet that goal and don't actually
change conditions on the ground.
And so I would like each one of you to comment on that as
quickly as you can. I will start on my right, with Dr. Steer.
Dr. Steer. I agree with you wholeheartedly, Senator Schatz.
The political attractiveness of 30 by 30 is useful, but it is
useless unless it is followed up well, and the best examples of
those need to be replicated. So, for example, in the marine
area, the Eastern Tropical Pacific Seascape, where four
Presidents, Ecuador, Colombia, Costa Rica, and Panama, got
together last year and they said: Let us do this, let us use
this 30 by 30 as a way of getting political and other momentum.
What happened is, a lot of us were willing to sit down with
them for, literally, weeks to design something, led by them,
led by including by the fishing industry.
And it was so cool at the Biodiversity Convention, up in
Montreal, to see the Minister of Environment of Ecuador,
together with the Minister of Fisheries, which is extremely
rare, announcing the expansion.
Senator Schatz. Oh. I know. I was the--when I was a
freshman legislator a hundred years ago, I was the Vice Chair
of the Ocean and Marine Resources Committee, and I got the--I
got the baptism in fisheries politics. So I understand what an
achievement that is.
And in Papahanaumokuakea, I think is a great example of
doing it right. I would also, just before I move on to Mr.
Sebunya, point out the emphasis on stakeholders who are
indigenous, is really important. I am the Chairman of the
Senate Committee that has jurisdiction called the Senate
Committee on Indian Affairs, and its Jurisdiction over Native
People across the United States.
But I do want to emphasize that stakeholders are
stakeholders whether they are indigenous or not. And I don't
want to get into the blood quantum question, or the question of
whether you are a lineal descendant of the original people of a
place. In all seriousness, it can become this dichotomy between
indigenous and non-indigenous; just as, for example, when we
established the Northwest Hawaiian Islands Marine Monument in
Hawaii, we worked with a lot of the fishing community, not all
of whom are Native Hawaiian. A lot of them are Japanese-
Americans, or Filipino-Americans, and Caucasian-Americans, and
all the rest of it.
And so I just want to make sure that when we think about
stakeholder engagement, it is not just indigenous, non-
indigenous, it is anyone who is a stakeholder who may make a
living doing something that is going to have to change.
So Mr. Sebunya, I actually want to ask you a slightly
different question. Is there a sort of curated list of projects
that were done right? Because I think that is maybe the most
important thing. Rather than call out the projects that are
done wrong, the model that Dr. Steer is talking about,
Papahanaumokuakea is a good example, I am sure across the
African Continent there are examples.
But I think it would be useful to the State Department and
to the Committee to kind of say: What is the model here, and
what do they all have in common? And I am wondering if anyone
has already done that work.
Mr. Sebunya. Thank you, Senator. And yes, there are a
number of examples of projects that have gone--done very well.
And the issue now we are trying to deal with for 60 years work
in Africa, is how do you scale that up at a level that is
really impactful on the Continent, for an issue that is not
only national, but Pan-African, to have that high level impact.
I will give you an example of the work we have done with
the USAID, in partnership with the Government of Rwanda and
Uganda, around the Virungas, around the mountain gorillas, 4
years ago we have been working there protecting the endangered
mountain gorilla. We started by protection, that fortress idea,
training rangers, park management systems, inventories of
mountain gorillas, then we started introducing tourism as an
aspect to that.
We, together with the USAID, we built the first high-end
lodge in Rwanda and Uganda around the mountain gorillas; these
two lodges are owned by communities. We raised the bar in terms
of community participation. At that time community
participation meant getting African communities to dance for
tourists, or sell a few crafts, and that was called Eco
Tourism.
We built lodges with community equity in it, and then we
brought in private sector as a management partner of these
lodges. These two exist, the lodge in Rwanda pumps half-a-
million dollars in the rural economy, in Rwanda around the
mountain gorillas.
Rwanda has picked--as a model--Rwanda has picked up
mountain gorillas as part of their green economies in the
country as a model.
Now, what have we achieved? Conservation of mountain
gorillas; for the last 4 years there is no single mountain
gorilla that has been killed in both Uganda and the Rwanda,
except recently, during the COVID, which was in self-defense.
That is a very good example where we have tied the economy of
the rural people to be matched by the conservation aspects of
that National Park, and the identification of their aspirations
as a people, in line with what is going on, what the ecology,
ecological systems of this area is.
Now, we are dealing with the value chains. We are
introducing bamboo economies in these areas so that people stop
growing a World Bank project which was passed from another--
agricultural products to start growing bamboo as an agriculture
economy, which is food for the mountain gorillas, but they are
going to produce furniture, building materials.
Senator Schatz. It is $6 a square foot, you know, it is
very valuable.
Mr. Sebunya. So that is a very, very good example of what
it is, right from the national level economy, to the community
level economy.
Senator Schatz. Thank you, sir. My time is up. Ms.
Caldwell, I will reduce my question for you, to writing, and
submit it for the record. Thank you very much.
Senator Coons. Thank you, Senator Schatz.
Senator Van Hollen, we had a memorable trip to view a
community conservancy in Kenya, outside of the Maasai Mara, and
frankly, had one of the most impressive visits I have ever had,
to see that model, and then a chance to talk to then President
Kenyatta, about the importance of supporting and preserving
community conservancy. So thank you for joining us. And I look
forward to your questions.
Senator Van Hollen. Well, we did. And thank you, Senator
Coons, for holding this hearing on this important subject,
international conservation and the connection between
conservation and security, and prosperity; and thank all of you
for being here today.
I am actually going to come back to the issue Senator Coons
raised. But first, let me just say, we are focused on
international conservation efforts, and of course it is
important around the world and in our backyards. I represent
the State of Maryland, and the Chesapeake Bay is an example of
an ongoing restoration effort that we have to keep at, and we
need to bring that same determination to some of these other
challenges around the world, which is why I am pleased to have
led the letter seeking support for USAID's budget request for
biodiversity. And look forward to working with the Chairman and
the Ranking Member to achieve the budget resources that we need
to meet the strategy.
And I do want to say, I know there is been lots of
conversation, important conversation about what happens when we
destroy forests, and put biodiversity at risk, from increasing
the chances of triggering pandemics, and then spreading
pandemics. To, obviously, the challenge of climate change, and
what it means when you, you know, cut down trees that provide
sinks.
I do want to mention one other thing, because it is another
practical connection between protecting biodiversity and the
health and welfare of people around the world, which is the
development of drugs.
And I would like to ask you, Ms. Caldwell, just to comment
on that for a moment. Because as I look at the figures, if you
look at the--there are about 11 percent of the drugs considered
basic and essential by the World Health Organization,
originated in flowering plants. And in the United States 56
percent of the 150 most-popular prescribed drugs are linked to
discoveries of natural compounds found in the wild.
At the current extinction rate experts estimate the Earth
is losing one major drug every 2 years. So could you just
comment on this piece of the importance of biodiversity?
Ms. Caldwell. Well, I think you have already cited some
statistics which strongly underscore the importance of
biodiversity. Of course, Western medicine hasn't always
acknowledged the relevance of traditional medicine, or of
nature for that matter, in biomimicry in the context of
responding to disease, and really in terms of articulating
solutions to so many challenges we face all over the world
every day.
There is also the major challenge that the loss of
biodiversity of course decimates pollinator populations which,
in turn, has catastrophic impacts on agriculture, so to those
senators that may be concerned that these biodiversity
investments overseas don't hit home here, I think it is just so
important to recognize that we are a globally interconnected
community; that with the loss of habitat, we will see an
increase in pandemics; as temperatures rise, we will see
increasingly virulent viruses; and we will lose the
biodiversity that our health and ecosystems depend on.
Senator Van Hollen. Now, I appreciate that. Let me ask you
about one particular USAID investment. I asked USAID
Administrator Power about this when she was here. I was on a
recent trip that Senator Merkley organized, and one of the
places we stopped was Indonesia, where we have an MOU in the
works, I am hoping it is going to be finalized, or has been
finalized. Can you provide an update to the Committee on that?
Ms. Caldwell. Yes. So since you raised that question with
Administrator Power, she did--what the Minister of Environment
and Forest was asking for was a review and acknowledgment that
the MOU was something the Administrator was prepared to sign.
She did convey that preparedness and we are now awaiting a
signature. There was a small edit that the Ministry wanted,
that has now been made, and we are hopeful that will be
resolved very soon.
I, likewise, had the opportunity to visit Indonesia and to
see the important work we are doing in action, not just with
the centrally--with the government-managed protected areas, but
also with the set-asides within the palm oil plantations, to
ensure sustainability. And of course saw orangutans in the wild
that are benefiting from, you know, that very intervention.
Senator Van Hollen. Well, I appreciate that. And, you know,
I hadn't fully realized, before that trip, that Indonesia was
the only place on earth that is the home to orangutans on two
of their islands.
Mr. Sebunya, you were talking about the importance of
preserving mountain gorillas, and I say: Amen to that. This was
another example of working to protect biodiversity, generally,
but also to make sure we protect this very important species,
that is a fairly close cousin of ours.
Let me just follow up with some of the issues that you
raised, and came up on the trip that Senator Coons and I took,
as well as the issue with respect to Indonesia, and other
places around the world. Which is, in order to make sure that
we discourage poaching, and we discourage wildlife trafficking,
we need to make sure that local populations have alternatives.
And that means that they are benefiting financially and
economically from the alternatives we provide. In Kenya, where
we visited, they adapted a mechanism to make sure that the
local population was benefiting from tourism, right. That not
all the--not all the, you know, monies from tourism were
flowing to a few people, but that the benefits were more widely
dispersed within the community, which it seems to me an
essential model if we are going to have a sustainable
protection of biodiversity.
Can you talk about some of the more--number one, do you
agree with that premise? And number two, could you highlight a
couple of what you think are the most successful examples of
local communities benefiting from international conservation
efforts?
Mr. Sebunya. Thank you, Senator. Yes. I agree with you that
unless people benefit, unless people lead our efforts, unless
people are a part of the management systems of our efforts, it
is going to be very, very expensive for us to secure. The model
we have that is being practiced in other areas, other than
Maasai Mara, where we are building forts, islands, or areas, is
heavily expensive. There is no government, or NGO, or any
partner who can run a protected area successfully without
communities.
From our research tells us that with the poaching, if you
disrupt the information poachers rely on at the local
destination, it is going to be very, very hard for them to be
successful in poaching.
But also, in order to disrupt that we would need to work
and increase the value of wildlife, in the eyes of the
communities near these national parks. Currently, on average in
Africa, a majority of Africans, value a chicken more than a
mountain gorilla, or a chicken more than a rhino, simply
because they can pay school fees with a chicken, they can pay
their medical bills by selling a chicken. They can't do that
with a leopard, currently, in many of the areas. They can't do
that with the lions of the areas. So the more we do programs
that tie those economies, like you saw in your visits, the more
successful we can be.
Maasai Mara is one of the examples, but there are several
others that tourism, as a business, has helped communities
benefit directly from wildlife. The challenge with the tourism
is what we saw during COVID, it can shut down momentarily.
And, therefore, the diversification of those economies that
rely on nature is critical for our success. We have seen that
with tying agriculture products to the sources of water for
that agriculture as critical elements in some of the
discussions we are having. Tying the local employment into
maintaining some of the parks is critical to the--to
sustainability of wildlife economies in these areas.
The regulatory regimes to--for that, that allows private
sector land owners to manage wildlife profitably is also
critical in those areas. And there are several examples across
the Continent, Senator.
Senator Van Hollen. Thank you. Thank all of you.
And Ms. Caldwell, thank you and the Administrator for
finalizing the deal on Indonesia. Thank you, all very much.
Thank you, Mr. Chairman.
Senator Coons. Thank you, Senator Van Hollen.
I would like, if I could, just for a moment, Mr. Sebunya,
to follow up on that point. I was struck at Akagera, Akagera
National Park in Eastern Rwanda, on a bipartisan bicameral trip
I led last August, at the number of Rwandans who were visiting
that National Park, transforming it from a park that had
initially been a gazetted and established under colonialism,
but in its current leadership, in its current structure both
the fee structure, the programming, the outreach, the
engagement was designed to drive--and during COVID, a vast
majority of the visitors were Rwandans, and that had been
holding up even as the pandemic had receded.
They also had a whole range of innovative programs whether
it was around aquaculture, beekeeping, harvesting mushrooms, a
whole series of agricultural initiatives so that it was not
just employment in the park.
The other the thing that impressed me in Gorongosa, which
really, was in some ways, the most significant model I have
been tracking over more than a dozen years, was the profound
investment in Mozambican leadership, not just being engaged on
the periphery, or at the entry level, but training a new
generation of wildlife conservationists, of managers, of
leaders, through a world-class training center.
So I would be interested if you would just comment on--I
have been to conservancies in countries where the benefits to
the folks of that country seemed modest, at best. Or more talk
than reality. And I have been to some where it seemed to me
that the local community really was directly benefiting,
driving, prioritizing the activities happening there. How do we
ensure that is what happens going forward?
Mr. Sebunya. Thank you, Senator. I think that that model
you have just mentioned, that the Akagera, Gorongosa, is one of
the models that has worked. And I think, going forward, is
really that leadership element you have just mentioned,
capacity element that needs to be accompanied by the--foreign
investments in these areas.
The role of governments in building the value chains that
support those investments it is going to be critical going
forward. The idea that these areas are part of the economic
ecosystem of these areas, managing these areas as landscapes,
as part of other entities within these regions is also
critical.
We have done work in Tanzania where the areas of
sugarcane--producers of sugarcane that are found miles away
from the national park, there is a realization that their
sources of water is from this national park, and tying that
sugar economy through the management part, is so critical for
sustainability of financing of these areas.
So I think that future is really, of those kind of models,
is I would say in three--mostly in three--summarize them in
three areas: One, capacity of Africans to play that role they
should play is critical. The role of government in regulation,
in policies, in creating financial systems that allow private
sector, environment that allows private sector to play their
role is critical.
And the other one is really for an entity, like us, NGOs,
or private sector, or government, to have an exit strategy so
that when you train, when do you engage communities, there is
also a plan to exit, and they see the future, especially the
young Africans, that are the majority of--on the Continent.
That is what they would like to see. They would like to see an
end, and them taking control over these elements.
Senator Coons. I couldn't agree with you more. That the
core challenges today, the vast majority of the population
looks at a chicken, and says: I see value, I can sell eggs, I
can eat the chicken, I can sell the chicken. And no value at
all in things that are considered sort of iconic wildlife that
seem to inspire the imagination and engagement of those who
live thousands of miles away, marrying those two, so that there
is real value that begins with local communities, is critical.
And over the dozen years I have been communicating with
Greg Carr, and others at Gorongosa, it has become an initiative
that really focuses on people, and is driven by people, and it
benefits wildlife as secondary consequence, not the other way
around.
One of the ways I first got involved in this, Ms. Caldwell,
was a concern about wildlife trafficking, and its consequences
for security. It is something I know my Ranking Member is also
quite concerned about. He and I traveled to Rwanda, and one of
the things that we were talking with the national leadership
there about was how in Eastern DRC, in Rwanda, and other parts
of the world, wildlife trafficking really funds lots of other
trafficking, trafficking of weapons, of drugs, of people, and
the financing of terrorism.
The law that Senator Flake and I worked on in 2016, the End
Wildlife Trafficking Act, authorized the Presidential Task
Force on Wildlife Trafficking. Senator Portman and I got
passed, a bill, that the President signed into law last year,
reauthorizing and extending that.
Tell me about USAID's investments in protected areas, and
its work and its partnership with the Fish and Wildlife
Service, to reduce wildlife trafficking flows, particularly to
countries like China, and Vietnam, elsewhere in Southeast Asia.
What more do you think we could do to combat wildlife
trafficking? And how does that connect with the rest of this
focus on biodiversity?
Ms. Caldwell. Absolutely. Well, we were very pleased that
the End Wildlife Trafficking Act was reauthorized in December
of 2022, and very much appreciate your leadership on that
front. For fiscal year 2022, approximately $75 million, or 20
percent of our budget, our biodiversity budget, was allocated
to addressing wildlife trafficking.
Our focus area is largely on building law enforcement
capacity, so ensuring that the rangers are well trained,
ensuring that the forensic scientists have the ability they
need, supporting prosecutors and judges to understand best
practice in these cases, addressing corruption and
transparency, which of course are critical issues, and demand
reduction.
When it comes to demand reduction, and there was a
reference, I think, from Senator Schatz, to this effect, China,
of course, looms large, as do other Asian countries.
So we have done some very innovative work. In Vietnam, for
example, we worked with the business community to ensure that
they were messaging to their own colleagues, that gifts of
rhino horn do not convey elevated status, that there are other
ways to convey that status and that appreciation.
In Thailand we worked with monks to ensure that they were
communicating with their--you know, with their congregations
about the fact that tigers won't ensure the protection that
Thais presumed they would.
Also, working on a publicly oriented campaign in Thailand,
called Only Elephants Wear Ivory; and then again in PRC
addressing rhino, ivory, and pangolin.
So we try to take a pretty comprehensive look at these
problems. And as you have mentioned, it relates very much, of
course, to biodiversity because these are--this is wildlife
that is on the market, unless we reduce the demand and address
the crimes as they take place, you know, that kind of activity
will continue. Likewise, it emphasizes the importance of local
livelihoods, which have been so heavily underscored.
I, myself, also had an opportunity to visit Greg Carr in
Gorongosa, and would absolutely highlight that as best
practice. I mean there is a community of 200,000 people
surrounding that park who are getting health care, and
education, and training, and again, that sort of one-of-a-kind
investment in leadership. So we, really, have parks that are
managed by and for Africans is so critical.
Senator Coons. Let me ask one brief follow-up question,
then I am going to defer to my Ranking Member.
In terms of implementers of that law enforcement training,
that is a key piece of countering poaching, and ending wildlife
trafficking. The SFOPS Bill requires more active oversight. How
is that playing out? How is that working out, oversight of
those who are implementing law enforcement activities?
A lot of this happens in very difficult, unstable
locations, Eastern DRC, for example, is a difficult place in
which to conduct counter-poaching activities, because there is
a lack of central government control, there is a lot of
different warring factions, it is mountainous, and remote. How
is that oversight going?
And then I will defer to Senator Graham.
Ms. Caldwell. Sure, I can give you a brief response, but I
will give you a fuller one for the record. What I know is that
there, of course, has been a history at times of the rangers
and law enforcement surrounding these parks engage themselves
in human rights abuses, and we do quite a lot of training to
ensure that that kind of activity doesn't take place.
Needless to say, that will undermine community confidence
in these parks. And it is critically necessary that we get that
right. I also alluded to the work we do to address corruption
which, you know, fuels this kind of activity, and that is
another critical form of oversight.
We have a very strong anti-corruption initiative at USAID
that is really focused on elevating best practice and
addressing corruption, but also ensuring that we are investing
in democratic bright spots to avoid the kind of corruption that
really enables wildlife crime.
I actually, first had my own exposure to this, when I was
approached by someone who was investigating the trade in
Siberian tiger pelts, and they offered to sell him women in the
1990s. And I got involved in an undercover campaign on the
Russian mafia's involvement.
So it also underscores your earlier point, which is that
these networks diversify their so-called ``product base'', and
really represent a threat to national security.
Senator Coons. Thank you, very much.
Let me defer to Senator Graham. Glad to have you join us.
Senator Graham. Thank you, Mr. Chairman. Of all the things
the Committee could be focusing on, this is sort of top of our
list for a good reason.
We just got back from Africa on our CODEL, and what I
learned was these parks, are sort of sanctuaries of governance,
and law and order, surrounded by a lot of upheaval. So if it
were up to me, I would have a string of parks, conservation
parks all over Africa because it may be the only place a
community can reside with some level of peace, and certainty in
terms of the rule of law.
Do all of you support the U.S. Foundation for International
Conservation Act introduced by Senator Coons and myself?
Dr. Steer. Yes, sir.
Ms. Caldwell. Yes, we do.
Mr. Sebunya. Yes, sir.
Senator Graham. Good; probably why you are here. Now, the
goal, of Chris and myself, is to create a public-private
relationship where the private sector sort of leads and puts
their money where their mouth is, collaborating with the United
States Government, and other people, hopefully other
governments, to make sure that these parks are well managed,
that we deal with poaching by force, and that the communities
surrounding these parks benefit.
Mr. Steer, is that right--Dr. Steer?
Dr. Steer. Absolutely right, Senator. We believe this
initiative is a very good one. The way you describe it is
absolutely right, and there are certain components that will
make this very successful. It is if the private sector, as you
say, comes in and works together with the public funding, if
the emphasis is on long term, if we think precisely the way you
are talking about, and good governance, but also thinking about
citizens who live outside the area, who maybe are not able to
get the incomes they used to get before.
So we have got to be pretty imaginative in order to make
sure there are alternative livelihoods. And then we need to
monitor very carefully. We now have the capacity, using
satellite technology, to see almost every tree falling, that is
very, very valuable information. And we need to be very
disciplined.
We, in the Bezos Earth Fund, are very highly engaged in
that space and we are very interested in partnering with you in
this new proposed fund.
Senator Graham. Well, Dr. Steer, I appreciate that, and to
other groups like yours, I would love to work with you. The
goal here, I guess, is to have the local community feel like
the park is an asset. Is that correct, everybody?
You are nodding your head. Protecting the animals is better
business than allowing them to be poached. Everybody is nodding
their head, right?
Ms. Caldwell. Yes, absolutely. Before your arrival we
discussed the importance of community engagement; couldn't
agree more.
Senator Graham. Yes. And so when we collect fees for people
who visit these parks, we want to make sure that the local
community feels the benefit of that; is that correct?
Ms. Caldwell. Yes, sir.
Dr. Steer. Yes, sir.
Senator Graham. Okay. So what I would suggest to my
colleagues in Congress, if you want to do something to bring
about better governance, and a semblance of the rule of law in
this part of the world, in these ungoverned spaces, the parks
are your best opportunity.
Dr. Steer, the Africa Parks; are you familiar with that
group?
Dr. Steer. Yes, indeed. Yes.
Senator Graham. Okay.
Dr. Steer. So, yes, we believe they are a very expert--I
mean, in Africa there are some very, very good groups, some
international non-governmental organizations, many based, you
know, headquarters are in the United States.
Senator Graham. Well, let us explain for the public if we
can, Mr.--how do you say your last name, sir?
Mr. Sebunya. Sebunya, sir.
Senator Graham. Okay. So let us walk through, real quickly,
how this works. A group called Africa Parks will take over the
park. They will provide security; is that right?
Mr. Sebunya. That is correct, sir.
Senator Graham. Okay. And they will have the capability to
fight the poachers, right?
Mr. Sebunya. Yes, sir.
Senator Graham. And their emphasis is on helping the local
community surrounding the park.
Mr. Sebunya. I don't know. I don't work for Africa Parks,
Senator, but yes, in some cases.
Senator Graham. Okay. Dr. Steer, is that sort of,
generally, the way Africa Parks works?
Dr. Steer. I believe so. Yes, indeed.
Senator Graham. Okay. Well, the reason I mentioned it, it
is a private sector group, right, non-profit.
Dr. Steer. It is a foundation.
Senator Graham. And so what we want to do, is that where
the government is failing in some of these countries, due to
corruption, or whatever, is to bring something new to the
table, and hopefully get the government buying what we are
doing.
So like Botswana, they have got great parks. The government
seems to be buying into this public-private partnership. What I
would suggest to the Chairman here, is not only we pass our
bill, but we put the countries in question on notice, we expect
you to up your game, we expect you to make sure that the money
being generated for all this activity, some of it actually goes
to the people.
So I am really excited about how this effort to conserve
nature, and protect animals actually, is probably one of the
best antidotes to the spread of terrorism, and international
criminality.
The biggest benefit from this, beyond protecting the
wildlife itself, I think is to have a system that can make it
harder not only for illegal traffickers and wild--poachers, but
also people involved in radical activity.
And, Mr. Chairman, I think we are onto something here, I
think this is a--USAID, is that right Ms. Caldwell?
Ms. Caldwell. Yes, sir.
Senator Graham. Do you consider this a threat to what you
do?
Ms. Caldwell. No, I don't. I understand you are working to
ensure this is additional funding, and of course we are
absolutely supportive of ensuring a further $200 million a year
for 10 years for biodiversity conservation.
Senator Graham. So it is additional funding, but it is not
just additional funding, it is a fundamentally new approach.
Dr. Steer if you could just wrap this up for us. How do you
think the private sector will respond to this idea? And should
we be optimistic that we are on the right track, in terms of
the public-private partnerships?
Dr. Steer. I think the private sector, both the
philanthropic private sector, and even the for-profit private
sector would respond very, very well to this. And the reason
for that is that we are more effective if we work with the
public sector.
So it is not actually just dollars that we hope you will be
putting into this fund, it is actually, influence and
engagement, and even now, clearly, when you, Senator Graham,
and you, Senator Coons, go on these visits, you meet at the
Head of State level, you engage. That is incredibly useful.
It will be even more useful if we could do it in
partnership, whereby, when you go, you not only have public
money, but actually you are engaged with something much bigger
than that, where the private sector is. So whilst we are very,
very good at putting money into NGOs, you are very, very at
doing that, plus you are very good at engaging at the very--the
Head of State.
So that is why we are interested in working with you. And
it is certainly not just me, in my written testimony I talked
about a group of philanthropists, $5 billion put on the table,
not particularly specifically for this--this particular
initiative, but would be very interested in working with you in
the design and the implementation.
Senator Coons. Thank you, Senator Graham.
And thank you to the witnesses. We are going to conclude in
just a moment, if I could.
One of the examples that Senator Graham and I have talked
about is Park W--an area that is at the intersection, roughly,
of northwestern, Benin, and Togo, and Southeastern Burkina
Faso, thus his comments about national parks being a sort of an
area of potential stability and governance in a region troubled
by significant extremism and violence, that is, I think, the
concrete example he had in mind there.
Obviously, in different countries, the role of the central
government, the role of the park and the community, and the
intensity of violence or extremism, varies wildly across a
massive continent, with many different examples.
Gorongosa was initially destroyed, denuded by an ongoing
civil war between FRELIMO and RENAMO; and as recently as the
last visit I made there, there was renewed violence around the
periphery of the park; although at a much, much smaller level
than anything we are seeing in Benin.
I do think it is important for us to focus on how we would
select and prioritize, there are many potential NGO
implementing partners, African Parks is one that has a strong
record, but there are many others, not just in Africa, but
throughout the Global South.
And the design elements that, frankly, all three of you
testified to and agreed on: The importance of long-term
funding; the importance of clear metrics and accountability
that have conservation and biodiversity goals, as well as
economic, improvement, and stability goals. The importance of
engaging the public, private, and philanthropic sectors, so
that the power of the U.S. government, and potentially other
close Allied Partner governments, in terms of providing
security assistance and advice, mobilizing national leadership
in partner countries, can't be overstated.
And then as we have talked about throughout this hearing
today, the critical role of having, not just a seat at the
table, but a driving part of how things are designed and led.
African voices, to the extent we are talking about the African
continent, as well as indigenous communities in the rest of the
world.
One last point, Senator Schatz referenced a marine park.
Bazaruto Archipelago, off of Southeastern Mozambique, is
another I've visited. It is important to be clear that--I am
imagining this as not just land, but also sea, and at the
intersection there are critical challenges, in terms of pirate
fishing, or IUU fishing, marine debris, plastic debris, that
USAID is also making real contributions--is taking a real
leadership position on, and there is so much more we could talk
about.
I must go to question, and vote.
I will invite each of you, if you would choose to, make a
brief concluding comment and then I will conclude this hearing.
Ms. Caldwell, a closing comment of any kind?
Ms. Caldwell. Sure. Without reiterating anything I have
already said, I just want to underscore the power and potential
of this--of the government partnership as a critical component
of this nexus.
When you go on your CODELs, ensuring that you are bringing
the ministers of finance, and economic development, and tourism
into the conversation, since this is all too often sequestered
in the environment ministry, which doesn't have the funding or
the power that many of those others do.
And of course USAID's history of six decades on the ground;
and having built those very strong partnerships with government
that traverse various administrations, the work we do on the
enabling environment to ensure the appropriate policies and
regulations that would enable the success of an investment the
Conservation Foundation might make, is so important.
So I appreciate the fact that the Act calls for seats on
the board from a range of U.S. government entities, including
State and USAID, who have on-the-ground contacts that can be
very relevant in helping ensure the success of your
investments, and evaluating the potential of them before they
are made. Thank you.
Senator Coons. I might also add, the ministries of health,
education, and agriculture.
Ms. Caldwell. Of course.
Senator Coons. Because focusing on human development also
means bringing those on board as well.
Ms. Caldwell. Yes, I agree.
Senator Coons. Thank you, ma'am.
Mr. Sebunya.
Mr. Sebunya. Thank you, Senator. I think I would just,
again, repeat our support to the Foundation for International
Conservation Act, and that we believe that it has a potential
to be a transformative influence to the international
conservation landscape, and especially the things that you--
Senator, you touched on, and the Ranking Member also touched
on, that really conservation is not about--is not a name in
itself, that conservation needs to meet the aspirations of
people.
On the African continent, it is a political and a cultural
heritage issue, and the leadership of, and the voices, and the
perspectives of the Africans is going to be so critical in the
success of this entity.
The last thing I will say, is the role of the private
sector; I really, personally, believe that, in the long run,
the NGOs are going give way to the private sector in running,
and managing the entities of wildlife--our wildlife. And within
the protected areas and outside the protected areas; it is
very, very critical.
Senator Coons. I think it is essential that, in the long
run, conservation, the protection of biodiversity, wildlife, be
seen as a central part of competent development strategies, by
nations all over the world, if that ultimately, not in
competition, but really reinforcing each other. If we can
achieve that, we can have done something significant.
Dr. Steer, close us out, if you would.
Dr. Steer. This is a historic opportunity. Never has the
need been greater, but also never have we known as much about
what works and what doesn't work. We actually do know how to do
this, and it requires a very unusual type of partnership,
ranging from those who are indigenous people in the forest, to
those who are trying to make are living outside the forest, to
politicians at the highest level, to the business community, we
now have a business community, globally, that is very
interested in this issue.
We have philanthropists that are very interested in this
issue. The fact that we have you, Senator, and a bipartisan
initiative in the U.S. Congress, is a great blessing, and we
really, we really are honored to be your partner in this.
Senator Coons. Thank you. Thank you, all. I look forward to
our ongoing partnership in this. You have given us great input
about how to think about this as we move forward with this
legislation, and with writing the fiscal year 2024
Appropriations Bill for the Subcommittee.
ADDITIONAL COMMITTEE QUESTIONS
The hearing record will remain open for written questions,
until 5:00 p.m., on Tuesday, May 9.
[The following questions were not asked at the hearing, but
were submitted to the witnesses for response subsequent to the
hearing.]
No questions were submitted for the hearing.
SUBCOMMITTEE RECESS
Senator Coons. Thank you, all.
And with that this hearing is adjourned.
[Whereupon, at 3:30 p.m., Tuesday, May 2, the subcommittee
was recessed, to reconvene subject to the call of the Chair.]
STATE, FOREIGN OPERATIONS, AND RELATED PROGRAMS APPROPRIATIONS FOR
FISCAL YEAR 2024
----------
WEDNESDAY, JUNE 14, 2023
U.S. Senate,
Subcommittee of the Committee on Appropriations,
Washington, DC.
The subcommittee met at 10:07 a.m., in Room SD-138, Dirksen
Senate Office Building, Hon. Christopher A. Coons (Chairman),
presiding.
Present: Senators Coons, Shaheen, Merkley, Van Hollen,
Graham, Boozman, and Hagerty.
ENHANCING AMERICAN COMPETITIVENESS THROUGH
THE U.S. INTERNATIONAL DEVELOPMENT
FINANCE CORPORATION
OPENING STATEMENT OF SENATOR CHRISTOPHER A. COONS
Senator Coons. This Hearing of the Subcommittee on State,
Foreign Operations, and Related Programs of the United States
Senate Appropriations Committee will come to order.
Mr. Nathan, we are grateful that you are joining us today.
We will have one witness today, Scott Nathan, CEO of the
Development Finance Corporation.
I will make some brief opening remarks. I believe my
Ranking Member will join us by then, but if not we will then
proceed with your opening testimony, and then proceed to a
round of questions of the Members of the subcommittee.
We meet in a moment when, nationally, we are facing the
challenge of: How do we sustain American competitiveness, how
do we strengthen our place in the world, and how do we respond
to recovery from the pandemic, to economic growth opportunities
all across the world, and how do we sharpen and modernize
America's development tools?
This hearing is an opportunity to review the successes,
challenges, and lessons learned for the Development Finance
Corporation, and to discuss ways we can help strengthen the
DFC's implementation of its mandate.
I have also invited the DFC Inspector General to submit
testimony, which I will review and will be included in the
hearing record.
Some of our colleagues have scheduling conflicts, but I
thought it was critical we hold this hearing today as we are
working on drafting Appropriations bills, and other critically
relevant legislation for the Development Finance Corporation.
First, a quick word on the House Appropriations Committee
allocations which concern many of us given the proposed deep
cuts across agencies, including those funded by this
subcommittee. I have worked with Chair Granger in the past, and
I am looking forward to working with Chair Diaz-Balart in his
new role as the House SFOPS Chair. They are serious
appropriators and we share many priorities. We don't yet have
the full picture of the resources or legislative provisions
that may be included in the House SFOPS Bill, but we do know
the initial allocations include deep cuts, a cut of about 33
percent to the SFOPS allocation.
The consequences of that I think would be grave. Under-
investing in our global, diplomatic, and development
professional workforce. Failing to pay our treaty dues on time.
Failing to provide credible alternatives to countries seeking
development finance, investment, and infrastructure, and
modernization. Stepping back from our global leadership in
confronting Russian aggression, countering PRC economic
coercion, and addressing, truly, global threats to stability,
like terrorism, corruption, and climate change.
I don't think we can compete globally and do our job by the
American people by slashing funding and turning inward, this
will make for a particularly challenging and engaging
Appropriations process between the House and the Senate.
Moving on to today's topic. The DFC was established through
strong bipartisan support for modernizing U.S. foreign
assistance. It was broadly recognized at the time many of us
worked on the BUILD Act, that by expanding the tools we have
for leveraging private-sector capital, we could achieve a
greater impact on development, and advance our broader foreign
policy objectives.
We also thought it was important to provide more
opportunities for higher quality investment so that partner
countries would not be susceptible to relying on coercive
lending from other countries, principally the PRC, which across
dozens of countries, has too often been the only choice in
emerging markets for rapid financing or access to large
infrastructure investments.
I am optimistic about the DFC's trajectory in seeking to
meet these objectives as you approach your fifth year in 2024.
Over the relatively brief time that the DFC has been
operational with its current authorities, and mission, and
mandate, including under two administrations with some
significant differences in the administration's priorities, I
have been impressed with the DFC's progress in using the new
tools provided by Congress.
Fiscal year 2022 set a record for DFC investment, with over
$7 billion committed to offer values-driven and high quality
alternatives, and to drive investment in economic growth and
development where it is most needed in the world.
And what matters more than the dollars are the projects
themselves. You have worked to ensure that there is a critical
investment in energy transitions, in critical mineral supply
chains, tackling food insecurity, facilitating responses to the
COVID-19 pandemic globally by making available vaccines and
investing in vaccine production, increasing capital access in
countries plagued by economic crisis like Sri Lanka and in
Ukraine, where Russia's War has had a devastating impact on its
economy. There are so many more, and we look forward to hearing
from you about them.
To be clear, I didn't play a role in creating the DFC
imagining it would be a panacea to all of our global
challenges, I have no illusions about the complexity of your
work, but we look forward to working with you to take the next
steps required to strengthen the DFC.
I do hope to hear from you about planned internal
reorganization, and how you are working to strengthen the
overall strategic direction of the Corporation, and
communicating your priorities, and your response to those who
feel the DFC has been too slow to engage in either critical
sectors, or regions, including, in particular, the Indo-
Pacific.
I look forward to getting your perspective on some of the
specific legislative reforms that I am pursuing with
colleagues, such as ensuring you can fully leverage your equity
investments as Congress intended and, potentially, expanding
country eligibility.
So Mr. Nathan, thank you for joining us. We have a great
deal to discuss. I am not anticipating the imminent arrival of
my Ranking Member, and so let me briefly introduce you to the
other Member of the subcommittees who is with us.
Scott Nathan you are someone who has served in public life
for quite a period of time, educated at Harvard and Harvard Law
School. We most recently met when you were working for the
White House Office Presidential Personnel, helping manage the
transition adroitly. I very much look forward to your
testimony.
And welcome the Members of the Committee who have joined
us.
Mr. Nathan, if you would address the subcommittee. Thank
you.
STATEMENT OF HON. SCOTT NATHAN, CHIEF EXECUTIVE
OFFICER, UNITED STATES INTERNATIONAL
DEVELOPMENT FINANCE CORPORATION
Mr. Nathan. Thank you very much, Chairman Coons, Ranking
Member Graham, and Members of the Committee, thank you for
having me here today.
I want to start by thanking Congress, and especially this
Committee, for its continued support of DFC. You have helped
strengthen our ability to fulfill our mission, drive positive
development impact, and advance the foreign policy interests of
the United States.
I am proud of the progress DFC has made in increasing its
investments and impact, both developmental and strategic.
Last year, DFC committed over $7.4 billion through 183
transactions in 111 countries. That was a great result, but DFC
can drive even greater impact as we build our capacity, execute
on our strategy, and work more effectively with our partners.
For fiscal year 2024, the Administration requests a budget
of $1.023 billion for DFC, a 2.3 percent increase over last
year's request. Included in that total is $780 million in
program funds, unchanged from last year, and $243 million in
administrative expenses, an increase of $23 million. The
requested increase in administrative resources will allow DFC
to meet critical staffing needs, bolster business development
efforts, and increase our overseas engagement.
DFC is also working to be more proactive across our
operations, refocusing our efforts on our highest priority
sectors where there are enduring needs: infrastructure, energy,
health, and agriculture, and small business support.
DFC focuses on working with the private sector because
closing the $40 trillion global infrastructure financing gap is
beyond the capacity of any single development finance
institution or single state actor.
The PRC focuses on lending at the sovereign level,
frequently burdening communities with projects that are
overpriced, poor quality, and unsuitable to local conditions.
This often saddles developing countries with too much debt and
disappointing results.
DFC offers a choice. Our investments carry our values of
openness, respect for local laws and conditions, and high
environmental, labor, and quality standards. DFC's work
enhances the long-term sustainability of our projects,
amplifies development impact, and guards against the danger
that projects will harm local populations.
DFC is committed to making high-quality investments in
seaports, airports, railways, and road networks that connect
communities to the opportunities of a global marketplace.
For example, earlier this year DFC invested $150 million in
the expansion of the Yilport Terminal in Ecuador, and earlier
this month, DFC's Board approved a loan that supports the
expansion and modernization of an airport in Sierra Leone,
providing one of the world's poorest countries stronger
connections to its region and to the world.
At the same time, DFC is also investing to strengthen 21st
century infrastructure, working with the private sector to
bolster digital connections, and networks that are secure,
safe, and open.
In Ghana, South Africa, and Kenya, DFC is investing with
Africa Data Centres, a company investing in information
technology infrastructure. And in the Indo-Pacific region, DFC
worked with our Australian and Japanese counterparts to support
Telstra's acquisition of cellular and digital networks in Papua
New Guinea, and five other Pacific Island nations.
DFC is also investing to secure supply chains for critical
minerals. As you know, the PRC has made it a priority to
attempt to control these supply chains, from mining to
processing. With an additional $30 million equity investment
into TechMet Limited, a U.S.-aligned critical minerals
platform, DFC is helping to secure access to nickel and cobalt
through an innovative project in Brazil. I am optimistic that
our relationship with TechMet will lead to many additional
opportunities.
DFC is focused on providing affordable, reliable, and
sustainable access to energy, a critical factor in development
and economic security.
In India, DFC is pursuing several transactions that will
diversify the solar manufacturing supply chain away from PRC
dominance. Last year, DFC provided $500 million in debt
financing to First Solar for construction of a new plant.
Across a range of technologies, DFC is working to provide
reliable access to power for communities in countries ranging
from Sierra Leone, and Malawi, to Nigeria, and Ecuador. We are
pursuing new opportunities in nuclear energy, e-mobility
businesses, and the supply chains that support them.
In response to Russia's brutal war against Ukraine, DFC is
also helping to drive greater diversity and resilience in
energy supply in Central Europe and the Caucasus. In Bulgaria,
Georgia, Moldova, and Poland, DFC has projects that will help
diversify power supplies away from Russian gas and stabilize
electricity grids.
Russia's war against Ukraine has also endangered food
security around the globe, and in response, last year DFC
surged efforts in the food and agriculture sector.
Investments in resilient health care systems provide a
necessary foundation for the development of a vibrant private
sector, and help prepare for future health crises. For example,
in Vietnam, DFC is investing to help expand access to clinics
and pharmaceutical products in rural areas.
DFC is also committed to providing support for the small
businesses that are the engines of so many economies. We have
recently made investments focused on expanding access to
capital for SMEs in Egypt, El Salvador, Honduras, Jordan,
Nigeria, Sri Lanka, and Vietnam, amongst many others. And none
of these deals are easy, but all of these countries and
investments are strategically important to the United States.
DFC has a unique complement of products and tools that can
help drive the private sector investment to make development
impact. However, current budgetary rules for equity scoring
prevent DFC from taking full advantage of this important tool
that Congress gave us in the BUILD Act. I imagine we will
address this further during the questions. I want DFC to be
strategic and focused where we make investments, and to be held
accountable for our performance.
The Administration's funding request allows us to build our
workforce, grow our capacity, and align our organizational
structure to drive greater impact.
Thank you for your support which makes this work possible;
and for your continued commitment to helping DFC achieve even
more.
I look forward to continuing to work with this Committee.
And I look forward to answering your questions. Thank you.
[The statement follows:]
Prepared Statement of Scott A. Nathan
Chairman Coons, Ranking Member Graham, and Members of the
Committee, thank you for having me here today to discuss the
Administration's Fiscal Year 2024 Budget Request for the U.S.
International Development Finance Corporation.
I want to thank Congress and especially this committee for its
continued support of DFC. The resources and tools you provided DFC have
helped to strengthen our ability to fulfill our mission, drive positive
development impact, and advance the foreign policy interests of the
United States.
I am proud of the progress DFC has made in increasing its
investments and impact, both developmental and strategic. In Fiscal
Year 2022 alone, DFC committed over $7.4 billion through 183
transactions, in 111 countries. This was a great result, but I know we
can do more. DFC can drive even greater impact as we build our
capacity, execute on our strategy, and work more effectively with our
U.S. government partners and partners around the world.
For FY 2024, the Administration requests a budget of $1.023 billion
for DFC, a 2.3 percent increase over its FY 2023 request. Included in
that total is $780 million in program funds, unchanged from our FY 2023
request, and $243 million in administrative expenses, an increase of
$23 million over the FY 2023 request.
In response to what we've heard from our team, from clients, and
from you, DFC is in the process of building our overall capacity to do
more and do it faster. The requested increase in administrative
resources will allow DFC to meet critical staffing needs, bolster
business development efforts, and increase our overseas engagement.
DFC is also working to be more proactive across our operations,
refocusing efforts on our highest priority sectors where there are
enduring needs: infrastructure, energy, health, food and agriculture,
and small business support.
DFC focuses on working with the private sector because closing the
$40 trillion global infrastructure financing gap is beyond the capacity
of any development finance institution or state actor to address alone.
The People's Republic of China (PRC) focuses on lending at the
sovereign level and often uses the demand for infrastructure investment
for its purposes, frequently burdening communities with projects that
are over-priced, poor quality, and unsuitable to local conditions. This
often saddles developing countries with too much debt and disappointing
results.
DFC offers a choice. Our investments carry U.S. values of openness,
respect for local laws and conditions, and high environmental, labor,
and quality standards. DFC's work enhances the long-term sustainability
of our projects, amplifies development impact, and guards against the
danger that projects will harm local populations. Supporting high
quality, sustainable projects has been a focus for DFC from the
beginning, and we have continued to enhance our capacity to monitor and
measure our impact.
DFC is committed to making investments in seaports, airports,
railways and road networks that connect communities to the
opportunities of a global marketplace. For example, earlier this year
DFC invested in the expansion of the Yilport Terminal in Puerto
Bolivar, Ecuador, which after its modernization, will become one of the
most advanced facilities of its kind on South America's Pacific Coast.
And earlier this month, DFC's Board approved a loan that supports the
expansion and modernization of an airport in Sierra Leone, providing
one of the world's poorest countries stronger connections within West
Africa, a region where populations and markets are rapidly growing.
At the same time, DFC is also investing to strengthen 21st century
infrastructure, working with the private sector to bolster digital
connections and networks that are secure, safe, and open. In Ghana,
South Africa, and Kenya, DFC is investing with Africa Data Centres in
information technology infrastructure to help make these countries more
attractive destinations for data-driven companies looking for a
foothold in growing markets. And in the Indo-Pacific region, DFC worked
with our Australian and Japanese counterparts to support Telstra in
making an acquisition that allowed the company to provide secure, high
quality mobile services to Papua New Guinea and several Pacific
Islands.
DFC is also investing to secure supply chains for critical
minerals. As you know, the PRC has long made it a priority to attempt
to control these supply chains, from mining to processing and
manufacturing. With a $30 million equity investment into TechMet
Limited, a U.S.-aligned critical minerals platform that DFC had
previously supported, DFC is helping to secure access to nickel and
cobalt through an innovative project in Brazil. I'm optimistic that our
relationship with TechMet will lead to many additional opportunities.
We are committed to pursuing additional projects that help diversify
the supply and sourcing of these and other strategic resources
important to the economic growth and national security of the United
States.
DFC is also focused on providing affordable, reliable and
sustainable access to energy, a critical factor in development and
economic security. In India, DFC is pursuing several transactions that
can diversify the solar manufacturing supply chain away from PRC
dominance. Last year DFC provided $500 million in debt financing to
First Solar for construction of a new plant, which goes online in Tamil
Nadu later this year. Additionally, the DFC Board approved financing
last week for the development of Ecuador's first private sector owned,
on-grid solar power plant. Supported by a $144 million DFC loan, this
power plant will be the lowest cost electricity provider in all of
Ecuador.
Across a range of technologies, DFC is working to provide reliable
access to power for communities that have never had it in countries
ranging from Sierra Leone to Malawi to Nigeria. While we are working
with developers to find more power projects in every region of the
world, we are also pursuing new opportunities in nuclear energy and e-
mobility businesses and the supply chains that support them.
In response to Russia's brutal war against Ukraine, and in keeping
with the authorities provided to DFC under the European Energy Security
and Diversification Act (EESDA), DFC is also helping to drive greater
diversity and resilience in energy supply in Central and Eastern Europe
and the Caucasus. In Bulgaria, Georgia, Moldova, and Poland, DFC has
projects that will help diversify power supplies away from Russian gas
and stabilize electricity grids.
Russia's war against Ukraine has also put other critical supply
chains at risk, and endangered food security for communities beyond the
region. To respond to this potential crisis, DFC surged efforts in the
food and agriculture sector, doubling the number of transactions to
support food security in FY 2022, and we continue to actively look for
more viable projects to support. We are committed for the long term to
working with the private sector to improve agricultural yields,
increase incomes for smallholder farmers, and foster innovation in food
distribution networks. From Guatemala to Ghana, DFC is investing to
help bring more produce to market and bolster food security for remote
populations. And we want to do more of this critical work.
Investments in resilient health systems, not unlike investments in
food security, represent a commitment to the well-being of people and
the stability of communities, providing a necessary foundation for the
development of a vibrant private sector. The COVID-19 pandemic helped
to underscore the need for these investments, particularly improvements
to healthcare supply chains, which DFC is working with the private
sector to address.
In places like Vietnam, DFC is investing to help expand access to
clinics and pharmaceutical products in rural areas. In Brazil, a DFC
loan is helping to modernize a women's health diagnostic center and
supporting its expansion into areas with minimal access to medical
care. In India, we finance a chain of eye care clinics and are
supporting a local company that provides much needed sanitary products
for women, both with huge development impact. And across sub-Saharan
Africa, DFC's investments are improving access to quality care,
including through the provision of digital healthcare solutions.
DFC is also committed to providing support for the small businesses
that are the engines of so many dynamic economies. Our investments in
the third quarter of this year alone demonstrate what an important
priority this line of effort is to the organization. From a $476
million guaranty that will provide working capital for thousands of
Brazilian SMEs in an underbanked part of the economy, to support for
women entrepreneurs in Honduras and small businesses in El Salvador
addressing climate impacts, DFC is working to provide individuals the
financial support they need to create jobs and opportunities in their
communities. Since FY 2021, DFC has provided over $430 million in loans
and loan portfolio guarantees to support small businesses and
underserved populations in sub-Saharan Africa, a chronically under
financed region. We have recently done investments in Egypt, Jordan,
Mexico, Sri Lanka, Turkiye, and Vietnam and we will continue to scour
the world in search of opportunities to invest in the small businesses
that are the backbone of free enterprise.
Small business support is one critical area where DFC's close
partnership with USAID is helping to deliver opportunity in communities
across the world. Because of transactions sourced jointly by DFC and
DFC Liaisons at USAID, small business owners and smallholder farmers in
the DRC have financing they need; entrepreneurs in Burkina Faso, Mali,
and Guinea, and Sierra Leone are creating hundreds of jobs, and in
Ukraine, Bank Lviv is able to provide loans that are a lifeline to
small businesses that can continue operating during a difficult time of
war. DFC's Mission Transaction Unit (MTU) has worked closely with USAID
to identify communities where DFC can address a lack of financing
through support for local institutions, with DFC/MTU helping to close
more than $900 million in USAID sponsored commitments.
DFC is also committed to driving impacts that cut across the
priority sectors we have identified and using our tools to advance
innovative transactions. For instance, DFC recently provided $656
million in political risk insurance to support the largest debt for
nature swap in history. This ground-breaking transaction helps to
preserve the diverse ecosystem of the Galapagos, and protect it from
illegal fishing, while at the same time significantly reducing
Ecuador's sovereign debt.
None of these deals are easy, but all of these countries and
investments are strategically significant to the United States. DFC has
a unique complement of products and tools that can help us drive
private sector investment and development impact. However, current
budgetary rules for equity scoring prevent DFC from taking full
advantage of this important tool Congress gave us in the BUILD Act.
One avenue for boosting DFC's equity investments is through a $2
billion revolving fund that is included as part of the President's Out
Compete China Proposal. I look forward to continued discussions with
you on how DFC can make more robust use of our equity tool and the
potential for changes to provide DFC working capital authority,
allowing us the ability to use the fees we collect from private parties
to share costs for due diligence with potential partners seeking
investment.
I want DFC to be strategic and focused in where we make investments
and to be held accountable for our performance. The Administration's
Funding request for DFC in FY 2024 allows us to build our workforce,
grow our capacity, and align our organizational structure to drive
greater impact across a number of strategically important sectors.
In DFC's short history, we have made great progress. Funding for
this request will support DFC's efforts to further unlock the power of
private capital to create opportunity, alleviate poverty, and improve
lives in communities across the world.
Thank you for the support which makes this work possible and for
your continued commitment to helping DFC achieve even more. I look
forward to continuing to work with this Committee and welcome your
questions.
______
Prepared Statement of Anthony ``Tony'' Zakel, Inspector General, U.S.
International Development Finance Corporation Office of Inspector
General
Chairman Coons and Ranking Member Graham, and members of the
Subcommittee, thank you for allowing me the opportunity to provide
written testimony for the record to discuss the U.S. International
Development Finance Corporation (DFC) Office of Inspector General's
(OIG) oversight work related to DFC.
about dfc oig
DFC OIG's mission is to prevent, detect, and deter fraud, waste,
and abuse by conducting and supervising audits and investigations of
DFC's programs and operations worldwide. Congress established DFC OIG
in the Better Utilization of Investments Leading to Development (BUILD)
Act of 2018 (Public Law 115-254). Like other Offices of Inspector
General, DFC OIG gets its authority from the Inspector General Act of
1978, as amended (IG Act). I was appointed as DFC's first Inspector
General in August 2020 and report directly to the DFC Board of
Directors and Congress. DFC OIG is a lean office with 11 FTEs and a
$5.5 million budget in FY 2023. However, we are tasked with overseeing
a growing agency whose budget has increased to $1 billion, staff has
grown to 513 employees, and has increased the number of new projects by
about 132% between FY 2020 and FY 2022.
DFC's development portfolio has reached almost $40 billion\1\ and
is expected to grow in the coming years, especially in economies that
may not have adequate safeguards to address fraud and corruption. DFC
products include debt financing, equity investments, feasibility
studies, investments funds, political risk insurance, and technical
assistance.\2\ These products are essential to supporting key sectors,
such as small business, energy, water, infrastructure, agriculture, and
health, which improve the quality of life for millions and lay the
groundwork for creating modern economies and providing financing for
women or other borrowers who do not have sufficient access to
commercial financing.
DFC needs an effective OIG to safeguard American taxpayer dollars
as DFC fulfills its dual mission to partner with the private sector to
finance solutions to the most critical challenges facing the developing
world today, while also advancing U.S. foreign policy priorities.
work to date
In the last year, DFC OIG completed all four of its congressionally
mandated audits, one performance audit, and eight investigations, four
of which were referred to the Department of Justice (DOJ) for
prosecution. Some of our audit and investigative work is highlighted
below and additional details can be found in our Spring FY 2023
Semiannual Report to Congress and Fall FY 2022 Semiannual Report to
Congress. Our semiannual reports to Congress, as well as our audit
reports, Top Management Challenges Facing DFC,\3\ and other public
documents and correspondence can be found on our external website,
www.dfc.gov/oig.
audits
The Office of Audits conducts a variety of independent, statutorily
mandated and discretionary performance audits assessing controls of DFC
programs and operations to detect and deter waste and mismanagement.
Mandatory audit work includes Financial Statements, Federal Information
Security Modernization Act (FISMA), Risk Assessment of Government
Charge Cards, and Payment Integrity Information Act (PIIA) audits. In
addition to mandatory audits, the Office of Audits conducts performance
audits of DFC programs or functions to determine if they are operating
as intended to achieve stated goals. Two recent performance audits are
highlighted below.
--DFC Made Significant Progress Implementing Provisions of the BUILD
Act This audit revealed that DFC complied with and implemented
116 of the 118 subsections of the BUILD Act. The two
subsections not fully implemented were: (1) the roles,
responsibilities, and authorities of the Chief Development
Officer and Chief Risk Officer; and (2) DFC publicly reporting
performance metrics including development impact on a country-
by-country basis. In addition, we noted two observations
regarding: (1) the methodology of calculating and tracking the
progress of investments in less developed countries; \4\ and
(2) the Annual Report timeliness.
--We are wrapping up an audit of DFC-funded renewable energy and
finance projects in India. This was DFC OIG's first audit where
we had ``boots on the ground,'' allowing us an opportunity to
review projects and see DFC's impact in developing countries
firsthand. Our audit team, along with DFC staff, traveled to
India in February and March 2023 and visited eight DFC-financed
projects. We are discussing our findings with DFC management,
including issues regarding records management, waiver of
environmental and social standards, project monitoring,
reporting fatalities and serious injuries, and subordinate
loans policies. The final report of our audit findings and
recommendations will be published in early fall 2023.
investigations
The Office of Investigations conducts proactive investigations and
responds to allegations of fraud, abuse, and misconduct, which may
result in criminal, civil, or administrative sanctions. DFC OIG
investigations protect whistleblowers and address critical and
sensitive issues supporting not only DFC's mission, but also U.S.
foreign policy objectives and national security interests more broadly.
The Office of Investigations seeks to foster the integrity of DFC
employees, partners, and contractors, and encourages them to report
suspected wrongdoing through outreach and training. To assist in this
effort, DFC OIG provides training to new DFC employees and issues
periodic newsletters to all DFC employees to promote understanding of
our investigative mission and encourage reporting of suspected fraud,
illegal activity, or misconduct.
The OIG Hotline is available online or by phone, +1 833-OIG-4DFC,
allowing information and complaints to be submitted to DFC OIG easily
and confidentially from anywhere in the world. Since DFC OIG's
inception, we have received 49 allegations, which have resulted in 28
preliminary inquiries or investigations. During that time, we conducted
six proactive initiatives to detect fraud and illegal conduct. Three
recent investigations are highlighted below.
--An investigation revealed a loan applicant submitted false
financial statements to DFC in support of a $41 million loan
for a construction project in the Middle East. Fortunately, the
loan commitment was cancelled before funds were dispersed. We
sent a report to DFC management detailing our findings and will
be referring the subjects of the investigation to DFC for
debarment.
--As part of a proactive initiative, an OIG investigator visited a
solar power plant in India funded by a DFC loan to determine
the origins of the solar modules and inverters used to
construct the plant. We verified that although the solar
modules and inverters were manufactured by companies in the
PRC, the manufacturers were not linked to forced labor programs
as identified by a Federal interagency advisory.\5\
--Last, we have investigated several complaints by whistleblowers
recently, including a whistleblower reprisal complaint, which
we referred to the Office of Special Counsel.
ukraine management advisory
DFC OIG intends to proactively protect DFC's investments in
Ukraine. To raise awareness of potential areas for fraud and abuse, we
issued a management advisory, Key Considerations to Inform DFC's
Response in Ukraine, to DFC management in June 2023. DFC plans to
mobilize well over $1 billion in private sector capital to support the
economy and people of Ukraine. While it has been reported that Ukraine
has made significant improvements in its efforts to address corruption,
it still faces challenges with implementing internal controls to ensure
effective and efficient reconstruction efforts. DFC OIG is a member of
the Ukraine Oversight Interagency Working Group; coordinating with
other OIGs, international law enforcement entities, and various
domestic and international stakeholders, and intends to commit
resources to proactively monitor and evaluate DFC-funded projects in
Ukraine.
dfc top management challenges in fy2023
Last fall, in collaboration with DFC, OIG published Top Management
Challenges (TMCs) facing DFC in FY 2023 and discussed four challenges:
\6\ (1) improving monitoring and evaluating actual development impact;
(2) improving performance management, transparency, accuracy and
availability of project data as DFC's commitments grow; (3) balancing
heightened expectations of Congress and stakeholders while managing
risks; and (4) managing organizational transition while building
internal controls of core management systems. In particular, we
identified that DFC needs to take action to make actual development
impact achieved and promotion of our nation's foreign policy the
primary metrics of its success. We look forward to working with DFC
this coming fall in identifying the FY 2024 TMCs, which likely will be
similar to those previously published.
memorandum of agreements
DFC OIG has been actively establishing international partnerships
to support anti-fraud and anti-corruption initiatives that will enrich
our audit and investigative efforts. We recently executed Memoranda of
Agreement (MOA) with the United Nations Office of Project Services
(UNOPS) Internal Audit and Investigations Group, the European Anti-
Fraud Office (known by the acronym OLAF), and the World Bank Group
Internal Audit (GIA). These MOAs are based on a common interest to
enhance relationships that support sharing information and other
resources with these international partners, which is critical given
the international nature of our work.
looking ahead
The BUILD Act authorizes DFC to grow its portfolio to $60 billion.
To reach this goal, DFC plans to increase its staff level to 700 by
September 2024. DFC has requested $1.023 billion for FY 2024 and $2
billion in mandatory funds for an equity revolving fund.\7\ As DFC's
portfolio and staff levels grow, the OIG also must grow. The OIG has
requested $7.2 million for FY 2024, which includes increasing staff
levels to support mobilizing an inspections and evaluations program and
expanding our Office of Investigations (which currently has only two
staff).
increase oig staff to match dfc's growth
To audit program and operational effectiveness, as well as
investigate allegations of fraud, in a portfolio of DFC's size and
complexity, the OIG must attract and retain skilled, experienced
auditors, evaluators, investigators, attorneys, and other
professionals. We also want to effectively monitor and evaluate DFC-
funded projects worldwide, which includes site visits, as a critical
aspect of evaluating progress, assessing development impact, developing
relationships, and identifying potentially fraudulent activity. The OIG
proposes to hire an additional 9 FTEs in FY 2024, which will include
auditors, evaluators, a data scientist, and an attorney to improve our
audit and investigation capabilities. In addition to FTEs, the OIG has
also recently hired two Pathways paid interns to support legal and
audit functions.
need for law enforcement authority
DFC OIG is hampered in its ability to independently conduct certain
law enforcement activities because we do not have law enforcement
authority. Our request for such authority has been pending with the
U.S. Attorney General's Office for two and a half years. Prior to the
BUILD Act, DFC's predecessor, the Overseas Private Investment
Corporation (OPIC), was overseen by USAID OIG, which has law
enforcement authority. Compared to OPIC, DFC has a significantly larger
portfolio, a larger staff, expanded investment authority (including
equity), and increased focus on development impact and promoting U.S.
national interests. DFC OIG cannot properly oversee DFC without the
same law enforcement authority that its predecessor OIG--and almost all
other OIGs--have. Our lack of law enforcement authority has also
hampered our ability to recruit and hire experienced investigators, who
naturally want to continue their law enforcement careers. The OIG
continues to work with key stakeholders, including Congress and DOJ, to
obtain much-needed law enforcement authority.
future planned audits
The OIG currently has two future audits it will conduct. The first
is an audit of DFC's goods and services contracts. We plan to determine
whether DFC complied with applicable goods and services contract
regulations, policies, and procedures that contribute to being good
stewards of government resources, ensuring Federal programs fulfill
their intended purpose, effectively spending funds, and safeguarding
assets. In the second audit, because of DFC's dramatic growth\8\ and
the planned organization realignment, we plan to audit DFC's workforce
planning efforts. We will assess if DFC is hiring the right people in
the right places, how decisions were made, and explore current employee
retention efforts. We will also review DFC's strategic human capital
management as it positions the organization to be more effective and
results-oriented by managing DFC's most valued resource--its people.
inspections & evaluations of dfc projects worldwide
DFC has a global reach and currently has development initiatives in
four regions: Africa and the Middle East; Latin America and the
Caribbean; Indo-Pacific; and Eastern Europe and Eurasia. DFC has also
made investment commitments in Ukraine, which will likely increase in
the future. To enhance our oversight efforts, DFC OIG intends to
establish and mobilize an inspections and evaluations (I&E) program in
FY 2024 to assess 8-10 DFC-funded projects around the world. We
strongly believe that such a program is required to improve
transparency and provide timely status of project progress and
development impact as DFC's portfolio continues to grow. The I&E
program will provide ``boots on the ground,'' giving DFC OIG the
ability to provide real-time input regarding project status and
effectiveness to help make timely recommendations for improvement and
identify where administrative action might be necessary. The OIG's I&E
program will incorporate lessons learned from our recent audit of DFC
investments in India and we will also collaborate with DFC's Office of
Accountability and DFC's Impact Management and Monitoring Division.
conclusion
DFC has an important mission and makes significant contributions to
promote economic growth, increase food security, build critical
infrastructure, advance global health, and bolster connectivity in the
developing world, while advancing U.S. foreign policy and providing
financially sound alternatives to unsustainable and irresponsible
state-directed initiatives. At the same time, in many parts of the
world, extremism, instability, and open conflict make the jobs of
development professionals working to achieve these goals much harder.
Meeting these and other challenges requires serious commitment; a
thoughtful, informed approach; and effective collaboration to curb
risks and change course when necessary. DFC OIG will continue to be an
independent voice and steadfast partner in helping chart improvements
to U.S. foreign financial support, and I look forward to working with
you in the years to come to ensure that we provide maximum value to
decision-makers, stakeholders, and, above all, the American people.
I appreciate the opportunity to provide you with this overview of
our work and our needs. My staff and I are always available to brief
you and your staff and look forward to working with you on prioritizing
future oversight efforts.
---------------------------------------------------------------------------
\1\ U.S. International Development Finance Corporation, Annual
Management Report, FY 2022.
\2\ DFC Website: https://www.dfc.gov/what-we-offer/our-products.
\3\ DFC OIG website: https://www.dfc.gov/oig/reports/strategic-
plans-top-management-
challenges.
\4\ Under the BUILD Act, DFC is required to prioritize support for
less developed countries with a low-income economy or a lower- middle-
income economy. See 22 U.S.C. Sec. 9612(c)(1); see also 22 U.S.C.
Sec. 9601(2).
\5\ U.S. Interagency: Xinjiang Supply Chain Business Advisory:
Risks and Considerations for Businesses and Individuals with Exposure
to Entities Engaged in Forced Labor and other Human Rights Abuses
linked to Xinjiang, China, updated July 13, 2021.
\6\ Top Management Challenges Facing DFC in FY 2023, DFC OIG
website: www.dfc.gov/oig.
\7\ DFC FY 2023 Congressional Budget Justification, DFC website:
www.dfc.gov.
\8\ DFC plans to have 700+ employees by 2025.
Senator Coons. Thank you, Mr. Nathan. We are now going to
move to, probably, one round of 7-minute questions, and if
there are members who persist, I will be happy to do a second
round.
I wanted to ask, if I could, when we established the DFC in
2019 it was with a mandate to mobilize private capital in
support of development goals and sustainable economic growth,
to help further our foreign policy interests. Some of the
stakeholders of the DFC want you to focus more of your
attention on poverty reduction in less developed countries,
while others are urging a shift towards critical geostrategic
investments.
To what extent is this a zero-sum trade-off between poverty
alleviation and strategic impact? Is that real, or is that a
perception? And how are you ensuring the DFC is maximizing
resources to deliver on the full scope of its mandate? How do
you prioritize if this is, in fact, a real trade-off?
Mr. Nathan. So the BUILD Act clearly gave us a dual mission
to make development impact in the poorest countries of the
world, and to advance the strategic and foreign policy
interests of the United States. And I think we can do both. We
can do both through all of our transactions.
Both elements of our mission are mutually reinforcing, I
don't see them as contradictory in any way.
I see the two elements of our mission, as strongly
reinforcing of one another. And you can see this through our
projects. A project like I mentioned, Yilport, critically
important from a strategic point of view to give Ecuador a
deepwater port on the Pacific. It is important that we were
there to finance that rather than our strategic competitors.
But that project also produces 1,250 jobs locally, it provides
connections to markets around the world for Ecuador which is a
key to their economic growth.
So even a project that can be viewed as purely strategic
has huge developmental impact, and the same is true in terms of
the small and very important, highly developmental projects we
do, that make a difference in remote communities, that helps
with economic growth and stability, that is good for the United
States, that is good for our interest.
Senator Coons. What I mostly hear when I travel to other
countries, Senator Graham and I traveled to a number of
countries in Africa together a few months ago, is they want
more. They want more of the DFC, they want more of your
leveraging American private capital, they want more of having
an alternative to, as you put it, PRC investment that often
produces too much debt and disappointing results.
There are legislative changes, that a number of us are
advocating for, that would allow you to leverage funds more
effectively. One would fix the equity scoring issue. The other
would expand country eligibility, rather than just relying on
World Bank income categories. A similar change is being
considered for the MCC.
What would the impact of these two changes be? And could
you provide some examples of equity investments you have had to
have pass on which could have helped us geostrategically with
countering the PRC, and with development, had the equity
scoring problem been solved?
Mr. Nathan. Thank you for the question. It is very clear
that in the BUILD Act the expansion of our toolkit to include
equity was one of the key elements of making us be able to be
more forward-leaning on risk. Our predecessor agencies,
particularly OPIC, were constrained in their ability to take
risk in projects, partially by the way that they were
structured and funded, but also because they were unable to use
equity as a tool.
That made it difficult to partner with our colleagues at
other development finance institutions, with the G7 and other
allies. And it meant that there were projects that were earlier
in the life cycle, or in countries, low-income countries there
is reasons why there is not robust financing markets on the
debt side, equity is a more long-term, patient tool.
The way that I think equity, if we had the expanded ability
to use it, would be valuable to our mission, in particular, we
would be able to be earlier in projects, even infrastructure
and energy projects, where we could support developers, help
influence their choices of vendors and EPC contractors, other
shareholders, or sources of finance to make sure they make the
right choice.
You are right, when I travel I hear like you did, that
people want us to show up, they are looking for diversity in
their relationships, they are looking for a choice, but if we
don't have an offering that fits their needs, we won't be able
to offer that kind of choice.
I am struck that both the Millennium Challenge Corporation,
which was an innovation of the Bush Administration, and
approaches development with metrics, accountability, long-term
goals, and the DFC whose principal goal is crowding in private
capital and deploying the best of the American private sector,
and delivering more transparent, more sustainable--are both
funded at about a billion dollars, in a government, that in
terms of our engagement with the world between defense,
development, diplomacy, does hundreds of times more than that.
I am excited to have a chance to work with you and my
colleagues in trying to fix the equity scoring issue. What
would that fix do to your leverage, and your reach, and your
scope?
Mr. Nathan. Yes. So at the moment our ability to make
equity investments, because they are accounted for on a dollar-
for dollar basis, as if immediately, it is as if we lost the
money, it is accounted for more like a grant than an
investment. We are not able to get the kind of leverage that we
do with our debt transactions.
On an appropriation last year, of $500 million of program
funds, we made $7.4 billion of investments, but the amount of
equity we could use was quite limited as a result.
If we had a bigger pot of equity we could look at making
$100 million, or $200 million investments in precisely the kind
of projects that I mentioned: big infrastructure, mining of
critical minerals, energy projects, where we could be early and
influence the direction that those projects are taking, as
opposed to coming all the way at the end with debt financing.
Senator Coons. And just for those who may not be familiar
with how the stacking and the structuring works, if you are
equity, you help drive the deal.
Mr. Nathan. That is right.
Senator Coons. If you are debt, you are the caboose.
Mr. Nathan. With equity we would have a seat at the table,
we would be able to be far more patient, we would be able to
operate in environments that are more difficult, more complex,
and riskier.
Senator Coons. Thank you. I appreciate your testimony.
My Ranking Member, Senator Graham.
OPENING STATEMENT OF SENATOR LINDSEY GRAHAM
Senator Graham. Thank you, Mr. Chairman. Number one, a
brief opening statement here.
If you are really serious about countering China, and we
all are, you have to show up, you have to show up and offer to
people in the world an alternative to Belt and Road. This
program, the DFC, is sort of like the best thing we have going
for us right now, and a billion dollars, it should be multiple
times that, and what the Chairman is trying to do, and no
matter who wins in 2024, we are going to be partners on this
issue. Senator Shaheen has been great.
All of our colleagues up here sort of get, that you are not
going to compete with China through a lens of isolationism. Why
are we spending money over there? Well, because people over
there affect the quality of life over here. If you want to stop
illegal immigration, let us improve the quality life in places
where people are coming from.
If you have forgotten 9/11 which was over there, I haven't.
Taking your eye off the ball can really lead to a lot of money
and lives being lost. So without some soft power, as General
Mattis said, ``You had better buy a lot more bullets'', because
if you don't show up and turn things around before it is too
late, you wind up getting sucked into military conflict, or you
lose influence in a world that China is trying to dominate.
So the equity aspect of this makes perfect sense to me, Mr.
Chairman. The goal is to run this more like a business, we have
the former Ambassador to Japan here. We are going to have to
redesign and reimagine foreign assistance, the MCC, the DFC,
the fragile-state approach, the food security conservation
fund, where you are having the private sector put serious money
involved, and the government partners up, is the only way to
get outcomes.
So I want to applaud you, Mr. Chairman. You are trying to
make this program more efficient, to get a better return on the
taxpayer dollar and equity investment should be allowed.
I am worried about the World Bank income classification
being our guide, taking areas of the world off the table that
it is in our strategic national security interest to be
involved in. It should be about what is best for us, it is not
what the World Bank does in terms income ratings. So I would
like to change that.
To my colleagues here, don't tell me about how tough you
are on China if you are going to let Ukraine fail. You are not.
If you don't see the need to support Ukraine, related to China,
you are missing a lot. Don't tell me we are going to be tough
on China if you don't have something like the DFC to compete
with a Belt and Road Initiative.
So this subcommittee I think has done really good work in
this space. President Bush started it, President Trump
continued along these lines, even though he cut the account
dramatically, these are one of the programs he saw value in,
and I want to support President Biden's effort to grow the
footprint here.
So the bottom line for me is that this is a program worth
investing in at a higher level, taking some of the limitations
off the program to get maximum benefit, should be our goal in
2024. And I will end with one question, basically.
Mr. Nathan, is China your chief competitor in the spaces
that you deal in through the DFC portfolio? And what would
happen if this program went away, vis-a-vis China's ability to
influence the world at a greater level?
Mr. Nathan. Senator, thank you for the question. And thank
you, especially, for your comments before that. I
wholeheartedly agree with what you said.
So it is clear, in the markets where we operate, China is
the major actor, the major source of finance, through the Belt
and Road Initiative, through their development banks, the
offering of finance at terms that often end up creating
problems for the countries down the road that accepted them. It
is clear.
You can't blame countries for looking for financing to
build their economies, and support the infrastructure in their
countries, but it often comes with strings attached, or is
inappropriate, poor quality.
What we do at DFC is different than what China does. There
are there are many reasons for that. The first is we support
the private sector. I am a strong believer that the best engine
for alleviating poverty around the world is a robust economy,
and a robust private sector.
We also adhere to extremely high standards. We are offering
projects that countries want, that are appropriate for their
local conditions, and their laws, that have passed through very
important screening for labor conditions, environmental
standards, for know your customer, we care about corruption.
These are things where we offer something, not only that is
a choice, but that is different, and I believe is better. And
if we weren't on the playing field, I hear this all the time
when I travel, that countries are impatient, they obviously are
looking to support the welfare of their people, but they want a
diversity of relationships.
Senator Coons. Thank you, Senator Graham.
Senator Shaheen.
Senator Shaheen. Thank you, Mr. Chairman, for holding this
hearing. And to you, Mr. Nathan, thank you for being here, and
for the work you are doing every day.
I share Senator Graham's sentiments about not limiting
where we invest to just those countries that are designated by
the World Bank, because there are places that both need
investment and have strategic interests for the United States.
One of those areas, I would argue, is the Western Balkans
which I have been focused on for a number of years, and one of
the places where I think we should consider opening a DFC
office, somewhere in the region, because of its significance,
both for a Europe that we want to see whole, free, and at
peace, but also because it is an area that is ripe for
interference by both the Russians and the Chinese.
And one of the examples that I have here is from
Montenegro, which signed a nearly billion-dollar Belt and Road
deal with the China Road and Bridge Corporation, with funding
from the Export-Import Bank of China, to build a road that
would have connected the north and south of the country.
[Poster on Display.]
Senator Shaheen. Now, you can see the current status of the
project in red, that is where the project is completed, but the
blue parts highlight the still incomplete sections of the
project, and I think this is a poster example of what you were
talking about in your opening statement about the limits of the
PRC's investments.
Sadly, despite the fact that this project has not gone
forward as it was supposed to, Montenegro has now signed yet
another infrastructure deal with China. That happened in March
when the government signed a deal worth $59 million with the
PRC Consortium to build a new road.
But it is my understanding that there were no U.S. or
European firms who submitted bids. So can you talk about why
that would have happened? That there were no other viable
offers from the U.S., and what lessons we should take from this
kind of situation?
Mr. Nathan. Thank you Senator. Well, I don't know the
specifics of why the tender in Montenegro failed. I think I can
generalize to the kind of situations that I see in many of the
countries where DFC operates. You know, we focus on the private
sector, so the projects that we fund need to be commercially
viable, need to offer an opportunity for a return from the
sponsors where we would provide debt financing or, potentially,
make an equity investment.
And I think what frequently happens in these government
projects that are then tendered, is there is an opportunity--
and I don't know in this particular case--but in general, there
is an opportunity for corruption, for projects that don't
really fit the needs.
What happens when Chinese firms come in is frequently, they
use their own workers. They end up burdening the country at the
sovereign level with debt that is difficult to manage. We are
avoiding that by focusing on the private sector and viable
projects. And I heard yesterday about a--you know, a South
American country where Huawei had built the 911 Emergency Call
System that needs to be rebooted every 4 hours, and so it goes
offline for an hour, all the manuals are in Chinese, and the
country can't use it, so they are launching a new tender.
I am hopeful that American companies will step in, that
companies from allied countries, and our partners will also
step in, in order to provide these services. But it is true,
particularly when I am in Africa, one of the things that you
rarely see are U.S. companies that are there to compete, and
that I think is a broader issue, but one, I would love to see
EPC contractors, the firms that build infrastructure, be more
broadly representative of America and Europe.
Senator Shaheen. I agree. And one of the things we have got
to do is to remind those countries that are looking for
investments, the trap that the PRC can create for them as they
did for Montenegro.
Last year, the DFC announced a deal to provide up to 300
million in financing to the Three Seas Investment Fund, which
is supposed to invest in transportation, energy, digital
infrastructure in Central and Eastern Europe. It is my
understanding that despite the strong bipartisan support for
this investment, that negotiations have still not been
finalized; can you give us an update on where those are, and
when you expect them to be completed?
Mr. Nathan. Yes. Thanks for the question. So I was
delighted last year, I think it was in June, to lead the U.S.
delegation to the Three Seas Initiative Summit, the Three Seas
Initiative is incredibly important in terms of strengthening
our partners and allies in Central Europe. It is about economic
connectivity, something that I am a strong believer in.
At that conference we announced that we would be making a
commitment to the fund. We are already working with the fund
and throughout the region to find investments that we can make
directly. We are in the final stages of negotiation with the
Fund Manager for that fund. There are still some sticking
points in the negotiation that are important from our side in
terms of protecting the taxpayer interests in how the fund is
structured, but you know, I am hopeful that we can get that
fund across the finish line in short order.
The bigger picture is this is a Europe where--this is a
region where we are actively looking for projects. The European
Energy Security and Diversification Act authorizes us to focus
on energy infrastructure, and we have some very good projects
in the pipeline, and have already made a few in the region.
Senator Shaheen. That is good to hear. One of the other
areas, I chair the European Affairs Subcommittee of Foreign
Relations, and so that is where I have been mostly focused. And
one of the other areas I know that is ripe for investment is
telecommunications, and we hear particularly from Eastern
European countries about their interest in getting investment
to help them so that they are not reliant on China or other
countries for telecommunications.
Is the DFC currently involved in any telecommunications
projects in Eastern Europe?
Mr. Nathan. So in the high-income countries of Eastern
Europe, which is the vast majority of them, we are not
currently authorized to work on telecommunication investments.
Senator Shaheen. I actually have legislation that I
introduced in 2022 that would authorize the DFC to invest in
those kinds of telecommunications projects, because they are so
critical. So hopefully we will revisit that legislation.
Thank you, Mr. Chairman.
Senator Coons. Thank you to my colleague, Senator Shaheen,
both for the way that you bring your experiences, and
strengths, and skills, across several different committees, but
also your persistent focus in a critical part of Eastern and
Central Europe. It is greatly appreciated.
Senator Hagerty, we very much look forward to your
questioning.
Senator Hagerty. Chairman Coons, thank you very much for
your remarks. I think that all of you will find that I am in
violent agreement with everything that has been said, and I
look forward to working with you on making some continued
improvements.
And Senator Shaheen, I could not agree with you more about
the criticality of telecommunications infrastructure,
particularly given the difficulties that we have had with
Huawei, ZTE, and others that are trying to invade the entire 5G
infrastructure system.
I would like to just step back for a moment, Mr. Nathan. I
think you know a little bit of the history, but for my
colleagues, I would like to share the fact that I have some
parental pride in what you are doing, because the design of
what has now become the Development Finance Corporation was
something I was deeply involved, and as we transform from the
old OPIC, to what you are leading right now.
And at that point, we made some significant modifications
in terms of what you are allowed to do, equity investment for
example. I don't think any of us, particularly people with
business background imagined that we got it exactly right, but
I think that what we would hope to see is the ability to
continue to improve. As you learn, as you try to deploy the
funds that we have given you, and finding rules that will help
make you more and more effective, so I am glad that this
conversation is happening right now, in terms of how we can get
it done.
I will see another critical aspect of having the ability to
improve, is having individuals like yourself who have the
relevant private sector experience, and know-how to invest. And
I think we benefit from your experience, your predecessors like
Adam Boehler, and Ray Washburne, having that type of business
DNA makes your organization much more effective. And I think it
makes us much more inclined to work with you to improve the
various parameters that you have been given to operate, so that
you can become even more effective.
One thing that you mentioned; is that the best recipe for
alleviating poverty--and I don't want to put words in your
mouth--was a robust economy and a robust private sector. And I
would just add to that, that it is also the best means to
ensure economic security and national security, when we have
both of those elements.
I hope that you will have that emblazoned, and put on the
wall there at the Development Finance Corporation, because I
admire your words and agree with them, with that slight
addition.
I would like to step back and share just some observations
from a trip I recently took, and I think I spoke with you
before I undertook the trip to Chile, to Uruguay, to Colombia.
I just left, this morning, a conference, an ASEAN-U.S. Business
Council Conference, everywhere we go talking to leaders, we
realize something very basic. They are trying to recover from
the devastation of the coronavirus pandemic. Their economies
are facing serious headwinds, their debt burdens have
increased, social upheaval exists everywhere, frankly, crime is
up in each of the countries that I speak with.
These are very real challenges. And you have got countries
that are operating at the bottom level of Maslow's hierarchy of
needs. They are trying to put food on the table right now. And
as I look at the DFC Investment Portfolio what I see are a
number of projects that are oriented toward lofty goals but,
you know, with ESG parameters on them, we are investing in, you
know, billions of dollars in climate change projects, solar
panels that require endless government subsidies, we are even
doing a project in South Africa on equitable taxi
transportation.
So I am trying to understand how you prioritize projects,
particularly given the competitive environment that we are in.
And this has been mentioned, I think, very clearly. We are
competing every day, you have acknowledged who our top
competitor is, and that is the CCP, how do you prioritize these
projects?
Mr. Nathan. Well, thank you for your comments and for your
question, Senator. So we have been engaged in a process at DFC
of thinking about, now that DFC is fully launched its 3 years
into operation, about how to refine our statement of
priorities. And I mentioned them in my testimony, it reflects
the areas that we have been working in, and I think they are
broad and enduring enough that from administration to
administration they should be in place.
That is, infrastructure, energy, health care, agriculture
and food, and support for small business. This is the five
areas, that if you look across our portfolio, it is 85-90
percent of the activity that we do, and it should be where we
are focusing our business development efforts, our client
management efforts, trying to bring our whole toolkit of
solutions to clients in that area, to make a difference in
infrastructure, energy, health care, food and AG, and small
business support.
Senator Hagerty. Well, I think that the countries that we
are targeting to partner with, will be most receptive if you
focus on the very basic deliverables here, and the aspirational
projects that may have some benefit at the higher levels of
Maslow's hierarchy, I think should be reprioritized. I just
want to get that point across.
The second point has been emphasized earlier before, and
that is the utilization of income-based criteria for the
countries that you work in. I had a very frustrating
conversation with the President of Uruguay who really wants to
work with us, yet our rules make it impossible for him to do
so. So his only alternative is to, as he told me, is to turn to
China.
And I think it just underscored for me, the need to take a
fresh look at this, and if you have any further comments on
what we might be able to do in that regard, I would appreciate
it.
Mr. Nathan. Well, thank you for the question. The BUILD Act
gave us eligibility to work in lower-income countries, lower-
middle- and upper-middle income countries, and that is by
income classification from the World Bank, a categorization
that the World Bank doesn't even use for their lending.
What we think might make more sense is a categorization
based on the World Bank lending categories, which can take into
account countries that haven't yet graduated, that haven't yet
found the way to get to a position where commercial finance is
the only option.
Senator Hagerty. Well, I think that----
Mr. Nathan. If we went to that category, Uruguay would
become a country that we would be able to operate in.
Senator Hagerty. I think we will look forward to working
with you on taking a more strategic view, as opposed to sort of
a dogmatic income approach.
There is one last thing I would like to--just a comment I
would like to have you take a look at it, and get back to my
team, if you might. And that is to take a look at the Hanjin
Port at Subic Bay in the Philippines, that project. I was
deeply involved in that project in my previous role as U.S.
Ambassador to Japan. I learned that CCP-affiliated entities
were about to buy that shipyard out of bankruptcy. We were able
to change that dynamic, put a U.S. private-sector company in
play for the equity component.
The DFC was not able to play as I had imagined they would
be able to play. And if you could just take a look at that
project, with your business perspective, and could get back to
me and tell me what might have changed, if your toolset had
been different, that would have allowed you to play; if I am
asking that in a way that makes sense?
I would really like to just take a hard look at that one
lesson I am very, very familiar with, and understand how an
improvement or a modification of your tools could have allowed
you to play a more effective role.
Mr. Nathan. I definitely will do that. Sea ports are an
area of real emphasis for us, shipyards too. We just did a deal
in Greece, we did a ship--a seaport in Ecuador, and we have a
couple projects in our pipeline that I hope to be able to
announce publicly later in the year that fit exactly the kind
of strategic and developmental elements that you just
referenced.
Senator Hagerty. Thank you. I look forward to hearing back
from you.
Senator Coons. Thank you, Senator Hagerty, for bringing
your previous experience and insights, both regionally and
sectorally, to the questioning today.
Senator Van Hollen.
Senator Van Hollen. Thank you, Mr. Chairman. And welcome,
Mr. Nathan.
I want to start by associating myself with the comments the
Chairman made at the outset, and the comments that the Ranking
Member made at the outset. And I am very concerned about what
we saw emerge from the House of Representatives yesterday in
terms of their 302(b) allocations for SFOPS.
In my view that represents a retreat around the world at a
time that we need to be more engaged, not less engaged. And I
hope that--I know this Committee has had a bipartisan history
in terms of recognizing America's role in the world, and the
need to use all of our tools to engage around the world,
especially when, as you have said, we are competing around the
world.
We have a good product to offer. China's investments often
come with strings that result in bad things happening to those
countries. But you can't do this on the cheap, and you can't do
it with rhetoric and no resources. So it is going to be really
important that we move forward, including the DFC.
I want to commend the Chairman, not only for his role in
establishing the DFC, but the legislation that I am proud to
co-sponsor to fix this budgeting issue. It is absolutely nuts
to account an equity investment as a PEER Grant, nobody in the
private sector would think that makes any sense. And since
these investments are appropriately public-private
partnerships, we want to make sure that our dollars can travel
as far as they can, and we are essentially handcuffing you in
the DFC when we place that limitation through the Budget County
Rules.
I am pleased that yesterday in the Senate Foreign Relations
Committee I chaired a nomination hearing for someone I hope
will be your deputy, Nisha Desai Biswal, I hope we can move
that confirmation forward as soon as possible.
Let me ask you, Mr. Nathan, about the issue of critical
minerals, and what role the DFC can play in this area. I
appreciated our conversation after you returned from a visit to
the Indo-Pacific, including Indonesia. But right now we know
that we are way behind the game when it comes to critical
minerals.
China has secured access to lots of critical mineral
deposits around the world, and is the world's largest processor
of critical minerals, and the world's largest manufacturer of
batteries for EVs, which is going to be a very important part
of our future, and our future competitiveness globally.
So can you speak to what kind of projects, investments the
DFC has when it comes to securing our supply chain for critical
minerals?
Mr. Nathan. Thank you for the question, and thanks for
chairing yesterday's nomination hearing.
So we are the owner of about, I think it is about, 12-13
percent at the moment of a company called TechMet Limited which
is a U.S.-aligned platform for investing in the mining of
critical minerals. We made an initial $25 million investment;
we have made a follow-on $30 million equity investment
recently, so that they could pursue cobalt and nickel mining
and processing in a more efficient way than the standard of the
industry, in Brazil.
We are going to have some follow-on projects with them
elsewhere in Africa, focused on rare-earths, and other
minerals, those two projects that we are currently working with
them on.
This is just an example with the difference that equity can
make. In these kinds of projects the ability to make equity
investments made them possible. We wouldn't have been able to--
at the early stage that we were involved, be able to use debt.
But we are looking beyond just this relationship, there is
a whole series of projects in other rare earths, in critical
minerals, in the manufacturing of batteries, and even in
graphite, we hope to be able to announce a deal later this year
in that regard, graphite being a critical component of being
able to manufacture batteries.
This supply chain, you are right, is already very much
dominated by PRC entities, but we have to begin chipping away
at that, at the mining, at the processing, at the manufacturing
level.
Senator Van Hollen. Well, I appreciate it, and I think
right now you--you know, you are you are hamstrung a little bit
in terms of the rules, because I think we need to do more than
chipping away. I mean, I think we need a surge effort in this
area. And I look forward to following up on the conversation we
are having here.
I worry that we, the United States, and even our allies are
perceived in some cases of over-promising and under-delivering.
The President and the G7 announced the partnership for Global
Infrastructure Investment with the goal of investing $600
billion in, by I think the year 2027, approximately.
Can you talk about the DFC's role in that effort, and the
extent of resources that you are investing at this time?
Mr. Nathan. Yes. So the areas of priority for DFC dovetail
very nicely with the Partnership for Global Infrastructure
Investment, and the effort that the G7 is making.
Last year, out of our $7.4 billion of transactions $5.2
billion of those qualified as PGII projects. This is helpful to
have this more whole-of-government effort with our interagency
partners, but beyond even the U.S. Government, our G7 partners
are critical in helping amplify the amount of capital available
for the kind of private-sector investing that we do.
Under PGII we have made a great deal of effort to
coordinate with our counterparts in the G7, and more broadly
amongst our allies, particularly in Europe and in Asia. By
working together we can create greater efficiency, bring more
resources to bear on these projects, and really chip away at
what is the thing that we hear, I hear constantly that DFC
needs to do more, and do it faster. That is our effort. And
this is a helpful part of that.
Senator Van Hollen. Well, thank you. On the ``do it
faster'' part, any suggestions you have as to how we can be
helpful to you in that, or whether it is internal to the
Executive Branch process? I would welcome any suggestions on
that front. Because I think moving quickly is obviously very
important in this global environment.
Thank you, Mr. Chairman.
Senator Coons. Thank you, Senator. And thank you for your
persistent interest and engagement on this issue, and on the
balance between development and strategic priorities.
Senator Boozman.
Senator Boozman. Well, thank you, Mr. Chairman, and thank
you and Senator Graham for holding this very important hearing.
We appreciate you, Mr. Nathan, for being here and all that
you are doing. You have got a big job. I know in your
testimony, you mentioned that the DFC has surged its efforts in
the food and agricultural sector, food security is national
security for all of our countries, and that you continue to
actively look for more viable projects to support.
Can you tell us what types of projects has the DFC
supported in improving food security in developing countries?
Mr. Nathan. Thank you for the question, Senator.
Particularly after Russia's illegal and brutal war on Ukraine,
the issue of food security, globally, has become even more
critical and highlighted. It has been one of the reasons why we
have surged our effort, had a special focus on it.
Our projects are often small in this area, because they are
targeted at smallholder farmers, at rural communities, at
finding ways to bring products to market more quickly,
eliminating layers of middlemen. We have invested in companies
that provide technology and financing to smallholder farmers.
We have made investments with banks that then target their
lending activity toward farming and agricultural businesses.
I visited, when I was in Georgia, in the Republic of
Georgia, I visited cold chain supply--cold chain logistics
companies that help--that we have invested in, that help
products--produce not spoil and get to market more quickly. I
think there are a range of things we can do in aquaculture in
Asia, and in other activities, focused on really bringing the
farmer more directly to market.
Senator Boozman. Very good. That is so important, you know,
things, little things that are huge things getting countries,
the regions at just the world food price, you know, as opposed
to not having the competition, you know, it is so important.
Mr. Nathan. If I could add. Even something like our
investment in Yilport, and Puerto Bolivar in Ecuador, a Pacific
deepwater container port, that has a food security element to
it, because that helps Ecuador be more efficient in exporting
bananas, and their--you know, their primary agricultural
commodity to the rest of the world; so infrastructure is a
critical component to also helping to promote food security.
Senator Boozman. Right. Very good. Speaking of
infrastructure I know that DFC is focusing on working with the
private sector to promote infrastructure investment in an
effort to offer a good alternative to Chinese predatory
lending, can you elaborate on the specific actions the DFC has
done to reduce Chinese predatory lending in developing
countries, and what it intends to do moving forward?
Mr. Nathan. Senator, we need to show up and offer a choice.
That is the best way to compete. If we have a flow of deals, if
we have the financing tools available to us, if we have the
workforce and capacity to process those deals quickly, and to
generate more deal flow, and deal with clients, that is how we
are going to be able to properly compete with China.
I can think of some recent examples of investments that we
have made that are helpful in that. Our Board approved earlier
this year our financial support for the expansion of an airport
in Sierra Leone. Sierra Leone is one of the poorest countries
in the world, anything we can do to help connect them to their
region, to the world, to help their economy.
We are also financing the building of a power plant in
Sierra Leone. This is a country with an extremely low level of
electricity penetration. That is a key to development. At the
moment the capital city, Freetown, is dependent on diesel
generators on a barge that are owned by a Turkish businessman.
It is unreliable, it is inefficient, it is unhealthy. By
financing the construction of a power plant we are helping them
have greater energy security, and promote development.
Senator Boozman. In the 2024 budget, the State Department
has a lot of money for infrastructure, ports, things like you
are describing; do you all work together?
Mr. Nathan. Yes. We work very closely with our interagency
partners. The Secretary of State is the Chair of our Board. We
rely on posts around the world to help us with sourcing deals,
with the vetting of our partners, with our Know Your Customer
rules.
The State Department helps us with thinking about
certification for the strategic importance of our deals. And
like with all of our interagency partners, USAID, the Treasury
Department, Commerce, we work closely to help get our projects
through the process more quickly, and to generate as many good
ideas as we can for potential future transactions.
Senator Boozman. And as far as critical, critical entities
like biotechnology, do you--are you emphasizing things like
that? Or how does that work?
Mr. Nathan. So one of our priority areas is health care,
helping developing countries build more resilient health
systems, is an important element of that, that can include
therapeutic clinics, but it can also be involved in the
manufacturing of vaccines, or pharmaceuticals, the distribution
of medicines to rural and underserved communities, those are
the kind of opportunities that we are looking at.
Senator Boozman. Very good. Well, thank you. We appreciate
you and your staff's hard work.
Thank you, Mr. Chairman.
Senator Coons. And thank you, Senator Boozman, thank you
for your great partnership, and development work in Africa, and
around the world, over now so many years together. I think we
have done this 13 years together.
Senator Boozman. A long time.
Senator Coons. It is hard to believe, thank you for coming
today.
If I might, while we wait to see if there is one more
member who wants to join us, I am going to ask a few more
follow-up questions. I am specifically interested in vaccine
production, one of the things that was striking to me about the
arc of the global pandemic was that we faced a moment where
vaccine nationalism emerged, and a number of countries, in
Europe, and the United States, prioritized the development of
abundant available vaccines for their own population before
meeting pledges that had been made to the developing world,
partly because of developments in India.
But it opened a critical window where both China and Russia
offered vaccines that were less effective, on complex terms
that were often not favorable to the recipient country, and
there was a 6- to 9-month period where I received dozens of
pointed, and sometimes desperate calls from heads of State
pressing for access to vaccine technology.
Vaccines are an important part of human development, and
public health. We are also likely at some point in our lives to
face a comparable global pandemic. I am wondering what
initiatives have been taken to provide some investment or
financing, or whether that it is credible, in places around the
developing world so that there is a more distributed global
network of vaccine manufacturing?
Mr. Nathan. Thank you, Senator. DFC, this is before I was
there, but DFC pivoted and directed a huge amount of energy
toward responding to the global pandemic, that did include
supporting efforts for distributed vaccine manufacturing in
Senegal, in South Africa, and in India.
But now that the current pandemic has seemed to fade from
the top of people's attention, we can't divert our focus from
preparing for the next pandemic. Part of that is building
resilient health care systems, and just the underlying
development of countries I think is critical to that.
But specifically on vaccines we are looking at broadening
some of the investments that we previously made to be beyond
COVID-19 response vaccines, but instead be funding available
for a broader approach for the basic sort of health of
societies for children, and for development.
We worked with, Gavi, The Vaccine Alliance, we provided
them with a revolver in order to place orders for vaccines
prior to donor nation commitments coming in. And we are working
with them again to think about how to reimagine that
relationship to be broader in the way that you exactly referred
to.
Senator Coons. I would appreciate your keeping up with me
on that development. One of the things we imagined when writing
the BUILD Act, was that having equity investment capabilities,
would also improve syndicating capabilities, partnering early
stage with DFCs from the Nordic countries, from Japan, from
South Korea, from our European partners; how is that
proceeding? What are the limitations on it? Are there any
additional supports you need either for the interagency or in
terms of refunding, or legal authorities that would help make
that real?
Mr. Nathan. It is clear that that was one of the goals
behind the BUILD Act, and we have worked hard to fulfill this.
And I think we are doing a good job. There is a lot of work
ahead though. Part of that is direct coordination. We have had
numerous meetings with our counterparts at multiple levels, my
level and at staff level to find ways that we can get
efficiencies on due diligence, on deal sharing. This has been a
productive activity.
There are some examples of specific frameworks that I think
could produce great results. One is focused on Ukraine, and I
don't want to get ahead of an announcement but we announced in
Japan, during the G7, a collaboration between EBRD, DFC, and
the other DFIs in the G7, and I think there is opportunities to
broaden this out.
Another is a deal that I mentioned in my opening statement,
which, along with our Japanese and Australian counterparts, we
were able to fund the acquisition of digital assets in the
South Pacific. These assets had received an unsolicited offer
from a Chinese firm. It was important to the Australians, and
as a result, clearly strategically important to the Japanese
and to us, to support that effort.
I think there is a lot more things like that we can do, it
includes also some of the MDBs, so we are working closely with
Inter-American Development Bank, with the EBRD, and others, to
find ways to share deal flow, to get more efficiencies, and
make greater impact.
Senator Coons. As there is more and more conversation and
there have been some actions to revise the World Bank, its risk
tolerance, its structure, its prioritization, similarly in the
IMF, I will be interested to have you keep me and others on the
subcommittee up to date about that work in terms of the
syndication.
Two other quick questions, if I can, then I will turn to my
friend and colleague, Senator Merkley. I think countering
corruption is an absolutely critical part of what you are
doing. I would welcome any input on how the offerings that you
are making allow leaders in developing countries to not just
have more transparency, better labor standards, better
technology and skill transfer, but to push back on corruption,
and what other supports, or partnership you need from either
State Department, more broadly, Federal law enforcement, the
private sector, to strengthen that piece of what you are
bringing to the table?
Because often the conversation about a large infrastructure
project in a foreign country is complex, and there are some
elements of a government that stand to benefit politically and
professionally, and others that may stand to benefit
personally. And those are very fraught conversations for a
potential bidder, an American contractor to engage in, and it
requires subtle and complex conversations. How are we doing at
bringing the best of your capabilities, in terms of countering
corruption, to the fore?
Mr. Nathan. Thanks for the question. I believe that our
adherence to high standards is one of our competitive
advantages, actually. I think you are exactly right, that by
having a commitment to high standards, labor, social,
environmental, and integrity standards, it gives countries an
opportunity to fight corruption, to highlight the problems they
have, to contrast a difference.
We work closely with post, our colleagues at embassies are
critical for helping inform our work, on many questions, but
particularly this one. We work closely with the intelligence
community for our KYC, our Know your Customer, and other due
diligence activities for vetting our potential partners. We
have very high standards, and occasionally that means we have
to pass on a deal, but more often than not it means that we are
able to improve the structure of a deal, the partners we deal
with, and provide an example in the countries where we operate,
where working with the private sector, we can really set the
tone in the way that you said.
Senator Coons. As we approach the fifth anniversary of the
DFC next year, I am interested in how you monitor that. Our
ability to go around the world and say: We have got this great
new tool, it has got great resources, it is delivering--is
going to be tested. Folks will look back at some of the
projects that have been financed and say, did they in fact
meet, higher labor standards, higher skilled transfer, and
higher transparency?
How are you monitoring the outcomes of projects? And as you
know, unfortunately, all too often in looking across a big
portfolio, critics or the media are inclined to pull out one or
two out of hundreds of projects that may have failed to meet
the projected goals. How are you monitoring the actual
implementation on the ground over these 5 years?
Mr. Nathan. Yes. Well, I think you are right mistakes do
happen, and we need to be prepared to handle them well. That
that is what makes the difference, right, by being open and
transparent, by having process internally and externally for
dealing with that. That is the key to mitigating the damage
that a mistake, or some future problem could have.
You know, this is one of the things that the resources,
that this committee has provided us with has really helped
bolster. Our Office of Development Policy is actually the
biggest area in DFC. That is where our investment monitoring
takes place. We don't just need to do screening and analysis of
the development impact, and all of the various standard
concerns we have before making the investment, we need to stay
engaged and measure in precisely the way that you are
mentioning.
And when things happen, if we didn't catch them, we still
need to have a mechanism whether it is our public
accountability mechanism, our openness with our Office of
Inspector General, or other channels with our interagency
partners, to make sure that when deals go in a direction that
we wouldn't have wanted, that we handle that as effectively and
proactively as possible.
Senator Coons. I look forward to staying in touch with you
about that, because anyone who has supervised a large portfolio
project knows there is always a tail, there is always a few
that go sideways. But as you said, exactly, how you monitor,
how you respond, and then how you change policies and practices
are critical.
Senator Merkley, thank you.
Senator Merkley. Thank you, Mr. Chairman. And thank you,
Mr. Nathan for coming and sharing your insights.
I want to focus on the DFC's role in supporting fossil fuel
projects. The report from April 2021 through March 22 had $217
million directed towards fossil fuel projects; when is DFC
going to quit financing all fossil fuel projects?
Mr. Nathan. Senator there are situations where the funding
of fossil fuel projects is within our mandate. For example, in
response to Russia's brutal war on Ukraine, and under the
European Energy Security and Diversification Act, we have
increased our effort to find projects in Central Europe that
help with energy security.
We provided $400 million in political risk insurance to an
entity that is providing gas in Moldova so that they can
diversify away from their dependence on Gazprom. This is in
response to the emergency situation that Moldova was in because
of the war in Ukraine.
Furthermore, and I referenced it earlier, DFC is currently
financing the building of a gas-fired power plant the small
one, 83 megawatts, in Sierra Leone, this project is highly
developmental in a country that is incredibly poor, where
providing access to electricity is a critical component of
development. And while the major emphasis for DFC in providing
access to electricity is in providing renewables, solar,
geothermal, wind, we are looking at many nuclear projects, in
some circumstances where there is no alternative and a highly
developmental situation that can help bring a country out of
poverty, we will still consider those situations.
Senator Merkley. Yes. Well, I would suggest that you are
missing the bigger picture. The amount of fossils that can be
burned by humankind across the globe, and keep us below 1.5
degrees centigrade, is microscopic now. And all the identified
projects around the world already account for more than two
times the amount that can be burned and keep us below 1.5, and
40 percent more than will keep us below 2 degrees.
And yet here we are continuing to promote one project after
another. For example, DFC is supporting the LNG Pipeline and
project in Vietnam, the DFC supporting the project in
Mozambique, and supporting intermediaries that are supporting
fossil fuel projects, and I think it was called the Three Seas
Initiative.
So here we are in a situation where my State is burning up,
we have a national Paris commitment, we have a notional
understanding that we need to get zero, we are building more
fossil fuel projects, and yes, I certainly understand that you
can create jobs in the fossil fuel world, but I recall this
conversation with the Energy Minister in New Delhi, and this
occurred during actually a trip that Chris and I were on
together, and I did a little side trip to meet with him.
We had had a conversation with the legislators from India
at the Paris talks in 2015. And he was intent on developing
some 40 new coal plants, and the gist of it was, I asked him
what does it cost for a new kilowatt hour of coal? And he said:
Seven cents, about seven cents.
I said, how about for a new kilowatt hour of solar energy?
And he said: About two to three cents. And I said: And those
costs don't reflect what is outside your window? And he looked
outside his window but he couldn't really see anything because
of the pollution from burning coal. And you take into the
health impacts, then the discrepancy was not seven cents versus
two cents; it was some much larger number.
And so the world is at this crisis point, and yet the DFC
is doing exactly what we have to not do. And there seems to be
a philosophy deeply embedded in the organization that somehow
fossil gas is better for the climate than fossil coal, and that
is simply, scientifically, untrue.
In its lifecycle, because methane is such a heat collector,
it is as bad as coal. Now, it is a very powerful organization,
the fossil fuel world, but we have the biggest challenge ever
presented to humanity in terms of the devastation we are doing
to this planet, and the DFC has blinders on, and is continuing
to support all these fossil projects.
And there may be super-rare exceptions, but even in a
situation where there has been war, it is an opportunity to
rebuild, not on the old model, but on a new model, a new model
of renewable energy with wind and solar, and in other places,
for example, in the Rift Valley of Africa, tremendous
opportunity for geothermal.
So DFC could be a leader on the pathway the world has to
take, or they can be anchoring us to exactly the wrong strategy
that that puts us deeply invested in fossil gas, for a
generation to come. That is my concern. I really think it is
time to say that DFC has to rethink this strategy doing far
more harm than good. And think about how those rising
temperatures are devastating our coastlines, devastating our
forests, devastating our groundwater, producing more powerful
storms, devastating cities across America.
All those are impacts that have to be taken into account
too. And those facts, by the way, are not just in America, they
are all over the world. And if we talk about development in
Africa, the expanding drought and climate impacts in Africa are
having enormous impact. The climate impacts in Central America
are a major driving force of loss bean and corn harvest,
driving people in the cities, where people cannot find work,
where they are subject to drug cartels, and they are coming
north to our border.
And so while it may look like creating some significant
number of jobs here, or solving a short-term crisis there, it
is really time to rethink this underlying strategy.
Mr. Nathan. Thank you, Senator. I think our area of
disagreement is actually pretty small. I think there is a large
agreement between us, of finding ways of addressing the climate
crisis is a priority for DFC. Last year we did $2.4 billion of
climate-linked investments.
Last week our Board approved $144 million loan to a company
in Ecuador, called Solar Aromo to build a 200 megawatt on-grid
solar plant that will be the cheapest electricity in Ecuador.
So I completely agree with you on that. We are engaged in
diversifying the solar panel supply chain for manufacturing,
from PRC, so that it is easier to do development of solar
projects. Even in Ukraine we are currently considering
providing political risk insurance to a number of wind projects
which, when I was there, I have been there several times this
year, these projects are still under construction in the
western part of the country.
So this is a huge emphasis from e-mobility, to geothermal,
wind, solar, nuclear for us. It is the rare exception that you
mentioned. Some of the projects you mentioned I think are not
actually projects that we are doing, there is no LNG pipeline
in Vietnam that DFC is financing. The Mozambique project was
initiated in 2020. Our major emphasis is in the areas that you
mentioned, and it is----
Senator Merkley. Well, let us talk about Vietnam for a
moment. The Saigon Times reported, January 14, 2023, that the
U.S. International Development Finance Corporation were going
to help Vietnam's decarbonization by financing transition to
LNG. And while the details were not published, that the
assumption is that supporting the Chan May LNG project, a 4,000
megawatt gas-fired power project, the energy transition
partnership, found that Vietnam can transition to clean energy
without any new LNG development. Transitioning to LNG is not
decarbonization.
Mr. Nathan. Yes. So I don't know what that article is
referring to. I mean, I just have to be frank about that.
Senator Merkley. Okay. We will explore that, and see if
that was a typo in the article, but it is the type of thing
that certainly concerns me. Thank you.
Senator Coons. Thank you, Senator Merkley. And thank you
for your persistent engagement on critical issues that matter
to all of us.
Thank you, Mr. Nathan. I appreciate your testimony today. I
look forward to staying in close touch. You have had a wide
range of questions from a wide range of Members of the
subcommittee, which I hope reflects the degree of interest.
Across many of us the common theme is that we want to see the
DFC succeed, and be strategic, and be effective, and help with
development, and help with the United States' overarching
strategic goals. So I look forward to continuing our
conversation and appreciate your valuable input.
This hearing, the record will remain open for written
questions until 5:00 p.m., on Wednesday, June 21. And with
that, thank you.
ADDITIONAL COMMITTEE QUESTIONS
[The following questions were not asked at the hearing, but
were submitted to the agencies for response subsequent to the
hearing:]
Questions Submitted to The Honorable Scott Nathan, Chief Executive
Officer, U.S. International Development Finance Corporation
Questions Submitted by Senator Jeff Merkley
Question 1. What steps has DFC taken to implement its timeline for
reaching net zero emissions by the year 2040? What will you do to
ensure that the DFC ends financing for fossil fuels from all sources,
including financial intermediaries, as well as midstream and upstream
fossil fuel projects?
Answer. As potential investments are driven by market demand on the
ground, DFC expects the net emissions of DFC's portfolio to decrease as
the proportion of mitigation, resilience, and adaptation investments in
DFC's pipeline increases and as it potentially supports more
investments that sequester carbon from the atmosphere, including
forestry and agriculture. DFC can support a diverse set of technologies
on a case-by-case basis with an eye towards significant developmental
and strategic benefits. However, DFC believes that the commercial
viability of nature-based solutions will increase, allowing the
Corporation to scale its financing in zero and negative emitting
investments.
DFC has seen demand for its support in the alternative energy
sector increase since its establishment. For example, on June 6, DFC's
Board of Directors approved a $144 million loan to support the
construction of a 200 MW solar photovoltaic power plant in Ecuador,
which is expected to be amongst the lowest cost electricity in the
country. This investment will be the first large-scale solar power
project in Ecuador, demonstrating the financial and operational
viability of solar investments in the country.
1a. Can you share background information on the projects that DFC
is counting as contributions to climate adaptation? (i.e. basic project
background, amount of DFC support that advances adaptation, amount
leveraged for adaptation, etc.).
Answer. In Fiscal Year (FY) 2022, DFC committed $393.75 million to
11 investments with adaptation and resilience interests.
Examples include:
--MCE Empowering Sustainable Agriculture Fund LLC (DFC $10 million,
all source funding $40 million): This debt fund is providing
financing globally to agribusinesses and rural farmers,
improving long-term food security in lower income countries.
--Leap Agri Logistics in India (DFC $6.7 million, all source funding
$8.9 million): Greenfield loan to construct modern, resilient
grain silos leased to Food Corporation of India to deliver on
their food security mission and reduce food loss yielding
positive environmental impacts by avoiding carbon emissions
that would have been associated with producing the wasted
grain.
--responsAbility Climate-Smart Agriculture and Food Systems Fund (DFC
$19 million, all source funding $350 million): Climate smart
investments for global small and medium businesses operating
across the food system, including in production, processing and
logistics, retail, and technology.
1b. DFC recently approved a $500 million LNG project in Poland that
will run until 2030, which is also the year by which the EU aims to
reduce greenhouse gas emissions by 55% below 1990 levels. The pipeline
will likely operate for decades after. This project stands to further
widen the gap between President Biden's $11.4 billion annual pledge in
international climate financing and the mere $1.057 billion in
bilateral and multilateral authorized by Congress for this use in FY
2023, as every dollar of new fossil fuel investment means more future
climate financing needed to counter emissions to stay within the global
carbon budget. Please explain the DFC's justification for financing
this fossil fuel project given the administration's shortfall in
renewable energy projects, its climate pledges, and security risks
associated with continued reliance on fossil fuels.
Answer. The referenced DFC investment in Poland is a guaranty
covering derivative obligations that represents an important
contribution to broader U.S. government support for Ukraine and
European energy security and is in line with the U.S.-EU Task Force on
Energy Security. By helping European countries meet their energy needs
and reduce dependence on Russian energy, DFC is supporting a needed
alternative to Russian supplied energy sources.
While DFC is supporting energy supply diversification projects for
strategic foreign policy reasons, the Corporation is committed to
supporting mitigation, resilience, and adaptation efforts. In FY22, DFC
committed significant financing to investments that respond to the
climate crisis (more than $2.3 billion).
Question 2. There has been concern that the DFC's emissions
accounting fails to assess the emissions of DFC projects over their
entire life cycle, thereby underestimating the real climate impact of
DFC investments. How would you evaluate the DFC's current emissions
accounting, and what measures could the DFC take to more fully account
for its carbon footprint?
Answer. DFC and the Overseas Private Investment Corporation, DFC's
predecessor organization, have been tracking and reporting direct
emissions from its carbon intensive investment portfolio since 2010.
That accounting approach follows the methodology established by the
industry standard Greenhouse Gas (GHG) Protocol. As noted, in the GHG
inventory reports published on the DFC website, the accounting approach
adheres to statutory obligations.
2a. Does the DFC contract third party monitors to objectively
assess DFC's carbon footprint and lifecycle emissions?
Answer. Yes, DFC currently retains an independent firm to verify
portfolio carbon emissions. The firm's GHG inventory certification
letters are publicly posted on the DFC website.
2b. Does DFC's life cycle analysis take into consideration not only
the gas that is burned downstream but the leakage that occurs
throughout the supply chain? How is DFC dealing with new science that
is finding that methane leakage is significantly higher than previously
thought?
Answer. Yes, as part of the due diligence process, DFC conducts
Environmental and Social Impact Assessments of all infrastructure
investments. The Corporation follows current industry guidance in
assessing potential GHG impact.
2c. How are Inflation Reduction Act (IRA)-driven opportunities
around US clean energy development and deployment being leveraged by
DFC to support a diversified, global clean energy economy?
Answer. One area where DFC can support Inflation Reduction Act
goals is in critical minerals. DFC's tools can support efforts to
diversify and secure critical minerals supply chains, which are
important to meet increasing global demand. For example, DFC provided a
$30 million equity investment in TechMet Limited, building upon
existing DFC support for the development of critical minerals and
bolstering of supply chain security for the renewable energy
transition.
DFC is collaborating with other U.S. government agencies to
identify opportunities to leverage investments for greater impact.
Question 3. A leaked diplomatic cable suggests that there is
interim guidance in place for climate policy on international public
finance for energy. While the cable appears to rule out U.S. bilateral
support for unabated and partially abated coal and other carbon-
intensive projects, there appears to be loopholes that could facilitate
continued large-scale support for fossil fuels, particularly for gas.
3a. Is that guidance going to be published, and if not, why not?
3b. Does the guidance include a prohibition on indirect support,
such as lending through financial intermediaries that finance fossil
fuel projects?
3c. Does the guidance prohibit U.S. support to natural gas
projects?
Answer. We refer you to the Department of State for questions
related to its cables and other internal communications.
Question 4. How does DFC conduct due diligence with partners and
engage in local consultation processes to obtain the free, prior, and
informed consent of Indigenous communities before approving any
projects affecting their lands and territories?
4a. How has the establishment of an independent Office of
Accountability improved transparency and addressed concerns about
environmental and social issues that arise around DFC-supported
projects?
Answer. DFC's Environmental and Social Policy and Procedures
incorporates the International Finance Corporation (IFC) Performance
Standards, which in turn define client responsibilities for managing
environmental and social risks. IFC Performance Standard 7 focuses
directly on Indigenous Peoples and outlines specific engagement
responsibilities when there are potential adverse impacts to Indigenous
populations. DFC specialists assess and monitor the process as the
client implements the requirements under Performance Standard 7.
The DFC Office of Accountability can further provide affected
communities an opportunity to have concerns related to the project
independently reviewed and addressed.
Question 5. How is DFC prioritizing projects to address forest loss
in the Amazon region, and what are regional DFC staff doing to source
and develop these kinds of deals? We are aware of a new Brazilian
representative of DFC and would like to know how they will be charged
to focus on nature-based deals.
5a. President Biden announced during the Major Economies Forum on
Energy and Climate Change potential DFC financing of $50 million to
help mobilize $1 billion for the BTG Pactual Timberland Investment
Group's (TIG) Latin American reforestation investment policy milestones
are satisfactory--and how can DFC scale more sustainable forestry and
conservation projects like this one?
Answer. The Regional Managing Director based in Sao Paolo, Brazil
will support DFC business development activities generally across Latin
America and the Caribbean with a focus on nature-based solutions. The
Brazil-based officer will work closely with counterparts in Washington,
DC, including an investment officer focused on nature-based solutions.
DFC is conducting ongoing due diligence of the BTG Pactual TIG
project and structuring the commercial terms for the loan. DFC hopes to
be able to reach commitment on the investment this year.
DFC is now evaluating its approach to overseas staffing and working
closely with interagency partners to develop and implement a strategic
plan for placing officers abroad where DFC can achieve the greatest
impact. Part of DFC's strategic vision is to expand its on-the-ground
presence so that DFC can be closer to potential clients.
CONCLUSION OF HEARINGS
Senator Coons. This hearing is adjourned.
[Whereupon, at 11:24 a.m., Wednesday, June 14, the
subcommittee was recessed, to reconvene subject to the call of
the Chair.]
LIST OF WITNESSES, COMMUNICATIONS, AND PREPARED STATEMENTS
----------
Page
Angarella, Nicole L., Acting Inspector, U.S. Agency for
International Development, Prepared Statement of............... 86
Blinken, Hon. Antony J., U.S. Secretary of State, U.S. Department
of State:
Questions Submitted to....................................... 52
Statement of
Boozman, Senator John, U.S. Senator From Arkansas, Questions
Submitted by
Caldwell, Ms. Gillian, Chief Climate Officer and Deputy Assistant
Administrator for Environment, Energy, and Infrastructure,
United States Agency for International Development:
Prepared Statement of........................................ 128
Statement of................................................. 127
Collins, Senator Susan M., U.S. Senator From Maine:
Opening Statement of
Questions Submitted by......................................58, 116
Coons, Senator Christopher A., U.S. Senator From Delaware,
Opening Statement of
Graham, Senator Lindsey, U.S. Senator From South Carolina:
Opening Statement of
Questions Submitted by....................................... 59
Hagerty, Senator Bill, U.S. Senator From Tennessee, Questions
Submitted by................................................... 64
Merkley, Senator Jeff, U.S. Senator From Oregon, Questions
Submitted by................................................... 187
Murray, Senator Patty, U.S. Senator from Washington, Opening
Statement of................................................... 19
Nathan, Hon. Scott, Chief Executive Officer, United States
International Development Finance Corporation:
Prepared Statement of........................................ 163
Questions Submitted.......................................... 187
Statement of................................................. 161
Power, Hon. Samantha, Administrator, United States Agency for
International Development:
Prepared Statement of........................................ 85
Questions Submitted to....................................... 114
Statement of................................................. 83
Rubio, Senator Marco, U.S. Senator From Florida, Questions
Submitted by................................................... 71
Schatz, Senator Brian, U.S. Senator From Hawaii, Questions
Submitted by................................................... 57
Sebunya, Mr. Kaddu, President and Chief Executive Officer,
African Wildlife Foundation:
Prepared Statement of........................................ 134
Statement of................................................. 132
Shaheen, Senator Jeanne, U.S. Senator From New Hampshire,
Questions Submitted by
Shaw, Diana R., Deputy Inspector General (Performing the Duties
of the Inspector General), United States Department of State,
Prepared Statement of.......................................... 6
Steer, Dr. Andrew, President and Chief Executive Officer, Bezos
Earth Fund:
Prepared Statement of........................................ 138
Statement of................................................. 137
Zakel, Anthony ``Tony'', Inspector General, U.S. International
Development Finance Corporation Office of Inspector General,
Prepared Statement of.......................................... 166
SUBJECT INDEX
----------
Page
ADVANCING SECURITY AND PROSPERITY THROUGH
INTERNATIONAL CONSERVATION
125
A Holistic Integrated Landscape Approach to Conservation......... 135
Building Wildlife Economies...................................... 135
Combatting Wildlife Trafficking and Other Nature Crimes.......... 135
Conservation, Resilience and Security............................ 139
Importance of Locally Led-Conservation........................... 134
Introduction 128
Lesson #1: Ensure long-term investment in priority places and
habitats................................................... 129
Lesson # 2: Make conservation work for Indigenous Peoples and
local communities.......................................... 130
Lesson # 3: Broaden the funding base by engaging the private
sector..................................................... 131
Mainstreaming Conservation in Delivery of the U.S.-Africa
Partnership.................................................... 135
Supporting People-Centred Conservation........................... 134
Sustainable Finance for Conservation............................. 136
The Challenge and Opportunity.................................... 139
What's Missing?.................................................. 140
__________
ENHANCING AMERICAN COMPETITIVENESS THROUGH THE U.S. INTERNATIONAL
DEVELOPMENT FINANCE CORPORATION
About DFC OIG.................................................... 166
Audits........................................................... 166
DFC Top Management Challenges in FY2023.......................... 168
Future Planned Audits............................................ 169
Increase OIG Staff to Match DFC's Growth......................... 168
Inspections & Evaluations of DFC Projects Worldwide.............. 169
Investigations................................................... 167
Looking Ahead.................................................... 168
Memorandum of Agreements......................................... 168
Need for Law Enforcement Authority............................... 168
Ukraine Management Advisory...................................... 168
Work to Date..................................................... 166
__________
UNITED STATES AGENCY FOR INTERNATIONAL DEVELOPMENT
Countering Corruption, Abuse, and Malign Influence............... 88
Establishing Optimal Conditions for Agency Staff and Programs to
Succeed........................................................ 86
Maximizing the Impact of Monitoring and Quality Data............. 89
Mitigating Risk in Agency Operations............................. 87
__________
U.S. DEPARTMENT OF STATE
Afghanistan-Related Work......................................... 8
Mission and Results.............................................. 7
Other Oversight Efforts.......................................... 8
Resources........................................................ 10
Ukraine-Related Work............................................. 7
[all]