last week i suggested that the major elements of u s foreign assistance consisted metaphorically speaking of sending lawyers guns and money promoting democracy free markets civil society in the rule of law strengthens our partners in the international community that supporting our allies with appropriate arms and training is morally and smart policy and that using our wealth and access to our economy to friendly nations to grow their economies and develop their governance capacity is a smart use of our taxpayers money in essence lawyers guns and money are the key pillars supporting american foreign policy but each element has its limit as well in south asia all three components are necessary but are not by themselves sufficient pillars are just that pillars they're not the whole structure they are tools and tactics to help us achieve our policy goals and in south asia they are often tactics in search of a strategy south asia is arguably the place from which america faces the greatest terrorist threat it was in afghanistan that al qaida plotted and carried out the attacks of september eleventh it is in the tribal areas of pakistan where al qaida and the taliban have reconstituted themselves and from where they are tac our forces as well as those of both afghanistan and pakistan yet since the beginning of the year there has been a series of reports all of which suggest the united states has no overall strategy for dealing with afghanistan pakistan while the terrorist threat emanates from both with regard to afghanistan the atlantic council states make no mistake nato is not winning in afghanistan the center for the study of the presidency's afghanistan study group concludes the mission to stabilize afghanistan is faltering the international crisis group maintains afghanistan is not lost but the signs are not good in the case of pakistan the government accountability office found that the united states has not met its national security goals to destroy the terrorist threat and close the safe haven in pakistan f while the president and his administration don't seem very adept when it comes to strategy either of having one or implementing one the bush administration is very good at spending money lots of it and mostly on guns in terms of foreign assistance and even in terms of u s policy south asia was a backwater until september two thousand and one from that point forward u s assistance and attention to the region skyrocketed since america was attacked south asia has become second only to the middle east in terms of u s military assistance over the past six years the united states states has spent fifteen point six billion dollars on training for the afghan national army and police yet that army is still incapable of operating on its own and the police are so bad that most afghans are more afraid of them than they are of the taliban in pakistan over the same six year period the bush administration has provided one point six billion dollars in foreign military financing and five point five six billion dollars in coalition support funds the form funds to buy radars and anti submarine planes to track the nonexistent al qaida force and navy and a lot of funds disappeared into the pakistani treasury for unspecified services allegedly rendered pakistani officials complain and have done so to me directly that they lack the capabilities and training to conduct effective counterinsurgency operations so we shouldn't be too surprised that the g a o support the claim that found that quote pakistani security forces lack counterinsurgency capability that the pakistani army is not quote neither structured nor trained for counter insurgency and that serious equipment and training deficiencies exist in the front here corps what did the bush administration spend all that money on if the situation weren't so our need for resources not so absolute i'd suggest that additional appropriations to security forces and even nation was throwing good money after bad leaving the urgent to address the merely very important for a moment there are other nations in south asia which are in various stages of civil war reconciliation or government transition where the right mix of lawyers guns and money could mean the difference between a failed state and democratic development in sri lanka the government continues to prosecute the war against the l t t the tom l terrorist group but in provincial elections on saturday a splinter group of the l p t gained enough seats in a coalition with the ruling party to form the next provincial government press reports however indicate that the election was fraught with irregularities such as ballot box stuffing voter intimidation and beatings because former l t e members who face accusations of murder harassing opposition voters and candidates in recruiting child soldiers will now be part of the provincial government the bush administration is faced with the legal question of how to provide assistance to the areas of the country partially controlled by an organization which while not actually designated a foreign terrorist organization used to be part of one in a pa the maoists did surprisingly well in elections for the constituent assembly so well in fact that they will now not only be writing a new constitution but will likely be forming a new government since the maoists are a designated foreign terrorist organization the continued provision of u s assistance in apollo peers on its face to be illegal while no one supports funding terrorist organizations continued reconciliation and democratic development in the p in the interest of the united states so i for one will be interested to hear whether the administration believes that assistance in a polish should continue and if so how it intends to proceed in bangladesh the caretaker government which has lasted a lot longer than a caretaker government ought is preparing for elections hopefully by the end of this year i support the administration's call to lifting emergency rule free fair and transparent elections cannot be conducted when the rights to speak and assemble are restricted the caretaker government has taken a partial step allowing into our political gatherings but much go much further to ensure a legitimate election in december the one country i haven't spoken about is india a giant sea of relative tranquility surrounded by chaos and instability india has experienced enormous economic growth in recent years but it still has three quarters of a billion people who live on less than a dollar a day in another context that's almost as many people as in canada the united states mexico central and all of south america combined three quarters of a billion people who live on less than a dollar a day and  serious public health problems such as the threat of hiv aids and the lack of potable water and even though india is a growing stronger economy i am still dismayed that the administration chose to cut funding for  a while i don't think that countries should receive our assistance indefinitely i do think we run the risk of on doing processes already made by cutting assistance prematurely lawyers guns and money each one is essential but in different degrees in different countries each is insufficient by itself without a strategy to pine bind them together they are only means without an end and unfortunately that is what we have seen from the administration in this region since two thousand and one we've spent thirty eight point six seven billion dollars and we're in no closer to a peaceful stable secure south asia than when we began as i said last week that's quite a legacy and now i will turn to the ranking member of my partner and conducting this hearing the honorable michael pence thank you mr chairman the chairman we had a grim reminder try that again as chairman graham reminders this week enormous natural disasters coupled with government malfeasance and even malevolence in asia in the last have reminded us that the world is always with us and this general area are ever with us whether we want to be or not the region of south asia specifically is sometimes overlooked not by our steamed witnesses today who through the course of their professional lives in their present service do great credit to themselves and to the united states of america and i welcome them but i also want to say the region of south asia while overlooked by some is never overlooked by this committee and i am grateful for the chairman's leadership in calling this important hearing the threat of islamic terrorism looms large in this region notably in the front lines of the war on terror in afghanistan and pakistan but this is not the extent of dangerous and destabilizing forces i would argue there are maoist insurgents in naipaul and some of these forces have even had unwelcome electoral success in recent days mr chairman on the subject of a linking means and is a vital undertaking those of us with some responsibility for us foreign policy recognize that foreign assistance cannot be viewed in isolation of our foreign policy i make no apology for the idea that our scarce taxpayer resources must be directed to our national interests foreign assistance is not as i said in our hearing last week it is my judgment foreign assistance must not be viewed as charity it must be driven by our national interest clearly in the forty seven year history of the foreign assistance act of one nine hundred sixty one congress and several administrations have merely added programs so that over time it now includes more than thirty three major objectives seventy five priorities two hundred forty seven directives none of which according to congressional research service report quote none of which are prioritized making it less effective in demonstrating a coordinated foreign aid strategy this dizzying array of programs is probably not optimally arranged so as the chairman asks is there a strategy to go with the money the president's u s national security strategy of two thousand and two and then two thousand and six identified global development as a pill d s goals as quote strengthening local governments abilities to to provide strengthening local governments abilities to provide basic human services and economic opportunity these goals are laudable but it is a legitimate question if we're maximizing our strength in the use of soft power and i'm pleased to have this committee raise these issues today in light of and i would question some of our shortsighted trade policies the absurdity of our trade barriers highlighted by one of our committee's witness testimony last month we who said quote we give eighty million dollars in foreign assistance to bangladesh but we charge it five hundred million dollars in tariffs this is a classic case of the left hand not knowing what the right hand is doing in american foreign affairs and surely trade not aid is an approach we can offer to some of those growing economies in south asia and i'm particularly intrigued by ambassador about your background mr ward both of you your testimony is mentioned reconstruction opportunity zones in afghanistan and while i may be pulled off of the floor i'll be reviewing your testimony carefully i would be very curious what our witnesses have to say about the possibility of pursuing a bipartisan free trade agreement with afghanistan a subject about which this member and some other members ha begun some preliminary conversations it's hard for me to imagine afghanistan's burgeoning economy as a threat to american economic interests but i i would welcome a response that on a cost mr ward's testimony highlights that some usa id personnel are embedded with u s special forces in reaching some of the most dangerous areas of afghanistan and i saw it firsthand and i have to tell you the thumbs up that i got  from the afghan citizens who were working on that bridge project down there breaking rocks but proudly wearing blue jersey was deeply humbling to me and it in addition to the soldiers that were in our company it made me terribly proud to be an american see the pride on their faces so i commend you all your leadership in that regard it's truly noble and i believe it's also a wise approach to leveraging interagency efforts in this regard  requested time to speak we now turn to our very distinguished witnesses says and secretary of state richard boucher a career foreign service officer has provided distinguished service to our nation for thirty years he was sworn in as the assistance victorious state the south and central asian affairs on february twenty first two thousand and six over the course of his career in bass the boucher as served as the state department spokesman or deputy spokesman under six secretaries of state and has served as chief of mission twice overseas embassadors boucher's early career focused on economic affairs china and europe  about your welcome back to the subcommittee we'll also hear from mr mark ward senior deputy assistant administrator for usa i d s bureau for asia mr ward has served our nation w distinction for twenty years and has chaired usaid lebannon reconstruction task force as well as having previously led usaid task force efforts in two thousand and five to respond to the southeast asian tsunami and the south asian earthquake mr wood is a career minister in the senior foreign service and has served in pakistan egypt the philippines as well russia mr ward welcome back to the subcommittee to you as well without objection each of your complete statements will be made part of the record and ambassador about you we will begin with you we have a whole room filled with electronic equipment over there the guy who knows how to run it was over there we have now reunited the technician and the technology yeah press the button on and off a couple times still no good the chair will ask our witnesses if they would relocate themselves on the first level and take the members microphones and if the staff can operate both sets of cameras so that we don't who operates the cameras there's somebody hidden somewhere if the people who know how to work the cameras or somewhere near the cameras those aren't working either well come up you can both be seated and if you prefer not to stand we forgive your back and if the camera people can accommodate us somehow we will be able to get a frontal view on the screen and the audience can see all of us and now for the first time the audience can see the witnesses live in bassett about you you're not used to live audiences i know i'm  chairman if i can i'd like to begin by expressing a sentiment that i think you share mr pence in the other members of the committee and that's absolute condemnation of the terrorist attacks in poor yesterday in it's a sad reminder that even the as i think you call it the glowing light in the region the more stable country that's developing is still subject to these horrible kinds of attacks and we need to work with the people of india as we express our our sympathy there is we all know there is no justification for the murders of innocent people in that way and we need to work with the indians to try to help them prevent such attacks in the future i want to thank you as well for hosting this hearing today south and central i think is a  region that we all agree involves vital interests for the united states millions of millions of people there especially young people who want opportunity in their lives but who are also press i think we're back in a region that faces enormous challenges from terrorists and insurgencies to melting glaciers and floods we think the united states is uniquely capable and uniquely positioned to help people in this region and that by doing so we make people at home safer it will require for a promise a long term effort problems we're dealing with we're decades in the making and solutions will take time we do have a consistent policy basis in the region that is to promote democratic stability is the best base to counter extremism in doing that to accomplish those goals we do several things first we support efforts to build democracy things like for example the way we work to improve governments levels in afghanistan for how we've been pressing and supporting strengthened institutions into the judiciary in pakistan and bangladesh second we've supported what i call the foundations of democracy education technology rule of law information education for example we're looking for new opportunities in india supporting modern education the expansion of the modern education system in pakistan as a way to give kids a modern education that prepares them for society instead of having them be drawn into radical drossos furthermore throughout the region we try to support access to information to technology so that people can join the modern world and participate in modern world affairs second third sorry we support the opportunities that people are looking for for themselves and for their children we have strong economic support programs everywhere from sri lanka to kazakhstan which is i know not in your committee but it's in my region top and  we support health care for needy populations in bangladesh and in india especially when it comes to combating aids hiv aids we're building infrastructure that's needed for private sector growth in the region especially in afghanistan where the key components of many of our programs are roads electricity irrigation systems the capabilities that people need to develop their own lives and their own economies and fourth big areas we support the security services in their fight against terrorism so we spent a lot of money as you correctly noted building the afghan army and police force which is a key element in stabilizing the country we're embarked on a program now to help transform the pakistani security forces in the tribal areas so that they are better able to provide security for the people who live in those areas we're providing anti terrorism assistance and courses in bangladesh pakistan and other places and we have border control and narcotics programs in afghanistan and in all  are assistance budgets reflect these priorities three hundred thirty one million dollars for democracy this year five hundred three m three hundred sixty six million for economic programs and seven hundred ninety one million for security and counter narcotics programs in addition to the programs we've been running for a while and expanding and moving into for a while we see new opportunities and new challenges to deal with challenges in afghanistan that require special effort on governance and security issues and the government in afghanistan is indeed taking initiatives in the districts in the provinces and we need to do what we can to provide a consistent stream of money to help governors and others carry out provincial development plans and local projects that meet the needs of the population the new government in pakistan the successful transition to democratic government in pakistan that we worked so hard on last year is now in a position to set its own priorities and to work to develop its own country and it's in the way that they were elected to do so we're talking to the new g have i lost it now so we're talking to the new government about how we can help the modernize education modernize the economy modernize democratic institutions and modernize their security forces in order to develop the country meet people's needs and above all counter extremism in this society again and again as i travel throughout this region i find that people look to the united states for help we are being asked right now to mobilize efforts to deal with food crisis and the energy problems we're being asked for assistance and support for national goals that governments including democratic governments are setting the united states public sector and the private sector in the end can provide what ordinary people want for their children safe environment education technology opportunities for jobs based on merit and not who you're born to in turn the united states benefits from any create and the stability that we can create in this region it protects us and it opens up opportunities for us as well so my conclusion is that we need to continue to engage consistently and strategically in this vital region on the basis that i said building democratic civility to fight extremism and that we need to find new and interesting ways to do that year after year after year so those remarks are i'd be glad to take your questions i won't try to go into all the things you mentioned in your opening remarks but i'm happy to deal with them if you want to race and thank you very much mr ward life i assume chairman ackerman and all right betty you shouldn't look at or i shouldn't look exactly all the other distinguished members of the committee that are behind me thanks so much for having us here today it's always a pleasure to come back to the subcommittee this topic is of particular interest to me having served as the senior career officer at usa id on south asia now for more than four years and having spent a significant portion of my foreign service career living in pakistan you know chairman i always read the letters from your subcommittee inviting me to testify very carefully because there are always some very good hints and suggestions about the things that i should cover and i take those very seriously and so in the end i was particularly taken with the questions about what we're doing differently what what what is different in the onan request and how we're delivering our assistance differently what sort of structures we have in place that are different so let me just highlight a couple of those i think that the two thousand and nine base and the two thousand and nine supplemental requests are represent a good integration of all the priorities that system secretary boucher has talked about and a real effort by usa id and all of the other agencies that are working in this region to maximize maximize the impact of our foreign aid afghanistan a close of course is at the top of the list it's the central focus of our activities with pakistan the increases that we're requesting in zero nine are for the upcoming elections improving local governance through the p r t's that mr pence mentioned and higher education so that we can really start airing out of work youth for jobs i was in afghanistan a couple of weeks ago with our new administrator henrietta for and was very pleased to attend cobbles first ever job fair in pakistan despite the significant challenges we are starting to implement many new activities in the federally administered tribal areas and that's the big change in our assistance strategy there the strategy for the fatah is twofold first to build the capacity of local government to provide better services to the people so that the people in the tribal areas understand that there is a government there that is trying to serve them and second to deliver quick impact projects to demonstrate to those same people that their lives are getting better in some communities this will mean a new road a well canal but in all the communities what it will mean is people having a stake in their own future for the first time the two thousand and requests for pakistan will also allow us a id to expand its programs in parts of the country where we have not been working before such as the swa valley in the north southern punjab and northern sindh areas that have not been getting much attention from the government and other donors in areas where we have seen growing unrest in india more than fifty years of the stis assistance have really paid off in india terrific gains such that it is now a donor with major assistance provided in afghanistan and sudan our assistance levels are not going up but we are providing more more assistance for hiv and aids in least in the zero nine request and we're trying much more than we have in the past and this is a real change in india more and more to leverage private money where our goal is to leverage four dollars  private donations assistance for every public one public dollar that we do and we think we have a real chance of meeting that goal in india given the vibrancy of the private sector in that country we will continue to say focused on the huge number of people living way below the poverty line we think that's our responsibility as a donor to look at those under served segments of the population both to combat poverty which of course is usa id's birthright but also because it's within those communities that extremists can can can really profit that paul as you mentioned is in the process of forming a new government i was also there a couple of weeks ago and had the opportunity to talk to some of the ministers of the current ministers and what they are seeing for the future implementation of the peace agreement and restoration representative government in the rural areas where the maoists had been in control remain significant challenges the zero nine request is a little below the zero zero eight level and but we are going to be spending more of our resources on programs for youth and democracy and governance to take advantage of the changes there and try to cement give us an opportunity that have been left out of  many programs while the insurgency reined in in the countryside give them an opportunity for some job skills programs to become more employable and obviously the importance of democracy and governance programs there as we're trying to get communities back involved in in their government in sri lanka as you said continuing concerns there it is a difficult environment for us a id to work in because of the security situation and because of the prohibitions on dealing with the l t t e and that's why you will find that we continue to do very little in the north in the east however we are in and in some of the poorer districts around the l t e controlled areas in the north you are going to see more u s aid programs in the future we're going to try to work to cement some of the improvements that we've seen since that area since the east was liberated from the tigers and so that that will decrease and in part that's because of the concerns that we have about some of the things you mentioned and human rights abuses but still a focus on on the east in bangladesh again a country in transition one that where we think strengthening governance this is a critical time the overall two thousand and request is over is above the zero eight request there have been some decreases in spending for health but that's because they're making progress on their own there's less reliance on donor funding there and in appreciation on our side that we need to support some of the governance reforms that the caretaker government which you mentioned has put in place in the last year that we hope will carry on into the new elected government i want to spend a few minutes talking about structures and how we are delivering assistance differently in south asia that i think will be of interest of the subcommittee when i traveled with our new administrator to afghanistan a couple of weeks ago i was very taken with her remarks which were very public that we need to start afghan izing our assistance program a lot more than we have in the past and what that means is using local contractors in afghanistan and pakistan as well and putting incentives on international contractors in the instance where we have to hire international contractors to ensure that they are hiring locals as much as possible even in key positions of management and we can do that through incentive clauses in our bid document we're also trying to buy more locally in south asia more at the local and regional levels it's more cost efficient it also speeds up the time it takes to mobilize and get supplies onsite it increases capacity of local firms that are supplying those goods and services we've talked before in the subcommittee about the importance of vetting and four of our four of the countries in south asia now require anti terrorism certifications from our contractors and grantees to ensure that none of our money which mr pence we're here to hear this none of our money is getting to the hands of organisations linked to terrorists and he's been concerned about that in the past the p r ts continue to be a very important modality for us in afghanistan as i said earlier we will be increasing the funding for programs run out of the p r t's we are putting more people in the ts we're even putting some afghan professionals that work for us now in the p r to us which add a continuity that has been missing in the past where we've had officers rotating through after a year now we're going to have some real continuity there as as mr pence mentioned we're also now beginning to work with u s special forces in those parts of afghanistan that are even no go for the p r t's we can't leave any area without development assistance and we're finding having quite a bit of luck working with the special forces to come up with strategies for they go in with kinetic operations to clear an area and we know where it's coming we know where it's going to be and then we're able to go in there very quickly after combat operations and to hold the area with quick dip community development activities henrietta for the new administrator of usa ideas very big on public private partnerships and she's pushing us to triple the number of public private partnerships south asia has twenty one active public private partnerships today i mentioned india it's probably in the lead and i'm pleased to say that on monday we secretary rice launched the international women's empowerment fund it's just the latest public private partnership fund that the administration has set up and this one to empower women in the muslim world in entrepreneurship political leadership and the rule of law the new program that used to be called section twelve zero seven of the national defense authorization act now it's section twelve ten to expand the development impact and sustainability of our programs with department of defense funds is really catching on in south asia the first country to apply for and successfully obtain these funds with netball this year is to be longer and bangladesh have proposals in for review as well and now i'll talk fast finally and perhaps most important is the foreign service officer workforce it's been steadily shrinking and currently stands at about half of what it was in one thousand nine hundred eighty despite a significant increase in our responsibilities around the world the president's two thousand and nine re quest for u s aids operating expenses includes significant funds for a development leadership initiative that would allow us to deploy three hundred new foreign service officers and i think this is particularly important because one of the criticisms that we've been getting from the congress and others around town and from some of your witnesses recently is the manner in which we conduct our contracting today with more foreign service officers in the field we're going to have the ability to manage more smaller contracts and grants so that we can shift away from relying so heavily on a few large contracts that only a few large u s companies have the resources to compete for we'll be able to work with more local contractors as well as smaller u s firms which will give us more flexibility increase competition and make more effective assistance on the ground chairman and most trader for has put forward  robust vision of a stronger more flexible usa ideally one that will continue to develop innovative approaches and expand its successful cooperation with the department of state and the department of defense thanks for having me look forward to your questions thank both of you for your excellent statements the first question that i would like to pose is framed in the irony of coming from a subcommittee chairman of folk a movie that's been countless thousands of dollars upgrading our equipment and i can't tell you how the heck we spent it so the first question with that  last week we had both embassadors holbrooke and and pickering for our full committee to discuss pakistan and one of the points that they made struck me they both very strongly asserted that the majority of the money congress provides for assistance in both pakistan and afghanistan doesn't reach the pakistani or afghan people they testified that the money disappears into consulting fees overhead costs and much of it never even leaves the united states can eat your either of you tell us what percentage of the assistant congress provides for either nation actually reaches its intended the record we are currently advised by our technical people that much of the amplifying system that is in the individual microphones including the witness table are defective and are going to have to be replaced we are not going to do that today so if we can hear from our internally displaced  very good question i'm delighted you asked that in anticipation of that question i mentioned in my thing remarks about the efforts that we're making to increase our ranks so that we can do more local pickering who i was honored to serve under and in moscow and ambassador holbrooke made these points i would not i would question the use of the word waste or that the money's not getting to the people buying top technical assistance is expensive and in a country like afghanistan where they've been at war for twenty five years that capacity did not exist in country when we first went back in at the end of two thousand and one beginning of two thousand and two i accept and i know assistant secretary about your agrees with me because we have this conversation all the time that we need to be doing more to insist that more of our contracts and grants are awarded to organizations in he's done in afghanistan not just because too much of the money otherwise is spent on overhead back here in the united states but also because i would assert we get better services those are people that know those countries it was a challenge for us to do that in afghanistan in the early days because as i mentioned twenty five years of fighting it's getting better i think we have to i don't think we should change our approach overnight there are still some sectors where the best expertise that's available is in the united states and we should continue to have the flexibility to hire it when we need it but there's also a lot that can be done particularly in infrastructure by local firms or firms in the region that don't have to mobilize from you know the east coast of the united states that might mobilize from a neighboring country  it's strange that it's taken us well this time and billions of dollars to figure out that the money to be spent on the ground should be spent on the ground how  much of the funds are we talking about that was skimmed in the united states before it ever got to afghanistan or pakistan or anywhere else aware of before it entered into these contracts and grants over he said you know you could you explain give us an example of how that happens i know in homeland security when we were hiring people to to be the screeners at the airport we awarded a contract to a company that immediately sold a contract to another security company if the taking twenty percent off the top and that happened three times before the actual people doing the work which resulted in about forty percent of the money spent on screeners ever went to a company that actually did screening people just milked it that goes with the scam bets not our case the the the complaint about the usa id funded contractors and grantees is that too much of the money that could be spent say building a school or teaching doing teacher training programs is instead spent on salaries of very qualified experts and the overhead that their home offices in the united states or a european country add as part of it as part of the contract cost to i'm torn i'm trying to get i'm just a simple kid from brooklyn and an easy picture of what this looks like well and i know that that right here good qualified people when they were told that we needed a hammer you know had meetings to decide what a hammer looked like and they sat around designing hammers and we spent lots of money designing hammers and came out with something that looked like a hammer and it cost you know three hundred seventy seven hundred two thousand dollars toilet but whatever it was that you know someone could have just gone down to lowe's or home depot or somebody and said hey that's it we would do when we're doing schools are we saying to somebody what you to school look like can you draw a picture can you get an architect or perhaps i can explain it this way that we talk about lots of money couple lots of money but there's a factor here a idea is lost people over the last few years they don't have as many direct often contracting officers people who go out in the field can you go shake contracts sign them and super it was a lot of people because they go to the other side no they lost a lot of people because over the last ten fifteen years they've been cut cut cut right vietnam there w people in the field to administer organize big contracts to handle a lot of direct contracts we're trying to increase that we're actually in underway now but how much how much or how much money or what's the percentage that stays in the united states before it actually it depends on the ground on tract if you go down to the lower levels you'll see give me an overall picture half know i used to actually be the head of procurement for usaid so i used to get asked this question a lot and it's all you can do is do sort of a mean every organization has a u s government approved overhead rate that it uses for contracting the you know i think the on the high end it might touch thirty percent for some of the not for profits their overhead is going to be much closer to say ten percent and even if we hired an afghan firm or a firm in the neighborhood so not not for profit infrastructure with a firm with an organization and not for profit that might say do community development activities or training activities at the local level there their overhead rates their cost of doing business that gets passed on to the government  don't understand why and forgive me for dwelling on this one question but that's to me that's the it is a serious question as mark indicated every time we need to build a sewer somewhere we have to decide we have to have overhead to figure out to build a sewer and if we move you know expertise and project management stuff to build that road by and large they employed some experts from outside they're now engaged in building the bridges sixteen bridges across his river that he referred to that he saw and when i went to the p r t i said how are you doing that and the answer is they have to go to and get bigger contracts and more engineering skills because the bridges require a higher level of expertise if you then take that another step up another step up you get to the point where you have big projects that require sophisticated project management which doesn't yet government should do it on the cheap we don't see god forbid because now but but but there's an important point you know october two thousand and five when the earthquake hit northern pakistan children that were killed on that saturday morning were in school the united states government build schools in afghanistan and pakistan and we will not build to any standard that will fall in an earthquake that is more expensive that is going to require an expertise that will probably bring with it some overhead and i think we just have to we just have to do is balance that in an area where we need additional engineering expertise we should look at bringing in an expatri firm in an area where that's not what you lose or built earthquake proof standards yes in those areas where earthquakes are prevalent that one is a fast new things we're doing in northern pakistan right now is bringing parents down to see the blueprints of the schools and to see the construction under way because frankly parents are afraid of schools right now because of what happened on that saturday morning so we're trying to get parents confident in school in sending their kids back to school again by showing them all the rebar all this i don't understand it all but all the stuff that goes into the construction because and we have one of the top engineering firms in the united states they're supporting the construction that's being done by a pakistani firm so they're i think because of the earthquake challenge you do need some foreign expertise in there and it's going to be expensive and but i think sometimes we have to do that i think what what secretary about israel trying to do is  have a sort of one size fits all where you don't have to have all that expensive when when an earthquake hits another country that we thought all over again and try to figure out how to build an earthquake proof school and have a new people design it and go through that process all over again but it would go to to the earthquake proof school folder and pull it out and say here's an earthquake proof school it and why don't we just implement it why don't we have it depends on the capacity in that government to build schools i mean pakistan's earthquake standards are fine on paper the issue is are they in fact enforcing them when they build their own schools and the answer we saw on that saturday morning but i have to say sir we do have standard designs the sixty five schools we're building in the tribal areas i visited one of them and they are built on a standard design that was developed with expertise from u s and pakistan pakistani firms know how to build them and so that's what they're building in the in the tribal areas and it's a good design and we use it once we've got it we can use it again and again but sometimes when you're going into an area are you going back to an earthquake  you have to do some redesign is there an existing federal schedule that says this is the reimbursement rate for contractors who are going to build a school building a school and degree of difficulty country a you will be reimbursed twenty thousand dollars per floor like when i call up my health insurance company and they tell me you've got sickness number seven you're only getting thirty two dollars regardless of how much you think it's going to cost and then my doctor if he would accept the contract takes thirty seven dollars or whatever it is you know is the answer to your question what i need to have i thought i'd never say this but we need the health insurance industry to come in and give us some guidance because they know how to keep the quests under control to make a profit and if with let's if we're the company that's looking to save money usa incorporated we should have we should know what it what a what a school is going to you know roughly i don't know mr chairman i think what's supposed to happen is the competition between these companies what competition there there are companies big companies a bit on these jobs and competition between them is supposed to help keep the costs you know in line so they really compete oh yeah but much profit that they make million dollars i don't have to ask them i think they hold that pretty close i know but we should have an idea because of my doctor was charging seven million dollars for one thing co op and i insurance company wouldn't pay it in first and there's a lot of doctors competing out there and remember we're talking about working in afghanistan and pakistan very difficult areas where there's also cost for security but anyway in answer your question each each of these firms is audited by a federal agency and which approves their overhead rate now that's an overhead rate for earth it is not per country it is not so based on what they do again competition is supposed to help but the reason that this is a secretary boucher and i have been pushing to get more firms involved in the reason why i so please administrator for is is with us on this is that we can enlarge the pool  firms that are going to bid on these jobs if we break them down if we have more officers who can manage more smaller contracts not these mega contracts like we've had to use in the past when we have so few officers that's all we can keep an eye on if we have more officers to keep an eye on a smaller number a bigger number of smaller contracts that means there's a lot of firms out there particularly in the area in which we're working afghanistan pakistan that can compete they can't compete now if we go out on the street with a big document for one hundred million dollar construction project project there are very few firms there probably no firms and afghanistan that can compete for that there are a couple in pakistan that could but we need to break those down so that we don't have those mega contracts and one way to do that and that's why we've been talking about it is to get more officers out there like we used to have so that they can keep it we have more people to keep an eye on smaller activities that we hear you we support and we welcome these questions because this is a big shift for us about your in your statement you discuss supporting afghanistan's local officials and supporting their their efforts to reach their people how does assistance do that and how do the afghan people it does it in a in a variety of ways are one of the better things is happening this year in afghanistan is more afghan ownership at the local level and they've been appointing good officials at the sub at the provincial level in the lower sub sub governor level the district level and what we're doing this year  reporting some of our money through those into pots that those people can start using to finance projects they've all engaged in cause discussions with local population there are provincial development plans in each of the provinces now that have been done through consultation with the local population we're trying to put money in the hands of capable people who can do those things that p r t do projects locally in consultation with the governors and the local people a lot of the  things like the what you call good performers initiative the good performers fund for anti narcotics where if a governor is able to reduce neurotic a poppy in his region he can apply for some of these funds and i was just up in the north of mozart's sharif and they were they got their first shipment of tractors under that money so i think as afghanistan generally starts to build these capabilities to do governance at the local level we've tried to push more money out there mr ward's recently i think changed the rules for his people a p r t so that they can spend larger amounts of money directly in consultation with local governors in your statement you tell us that if  attempting to strengthen pakistan judiciary how does that happen when one of our coalition partners has withdrawn from the withdrawn its ministers from the cabinet in a dispute over judges however they decide to do it i've made clear to the leaders of the major parties as deputy secretary negroponte made clear to the prime minister that we want to support an independent judiciary in pakistan we have had i think some programs in this area already but in terms of doing a major push in this area it will be once they solve the political questions involving the judiciary we've been strongly supportive as well of other institutions like the election commission and i think one of the areas where we'll be able to do a lot more with a new government is to help build strengthen democratic institute we give them a timeframe in which to do that now it's up to them to decide how how they're going to solve this issue and as you noted it's gotten pretty political  between the parties and they're just going to have to figure it out so we could be we could be waiting a long time conceivably i think you know there's an impasse right now but that doesn't make it permanent so we'll just have to see how things evolve there are other institutions i think that we can readily work with including you know more local local levels of the justice system and police and things like that now you mr ward in your statement you note the emergence of the maoists as part of the government and the pollen and you say the u s g is waiting to see how the new government forms before committing to a strategy of engagement with   the current rules which we operate under a license from the office of foreign assets control allows us to deal with members of government that ha be from the maoist party so we are continuing to do everything today that we and this came out of this was a result of the peace agreement that was signed seven two thousand and seven yes and as of today we are continuing to do everything that we were doing in the pol before the most recent elections when i say that we need to do assessments to decide what our engagements with the government are going to look like in the future it is not because we are and that we anticipate or even speculate about who will be in the government and who will not  but it's really more to look at opportunities that we see to engage in sectors that we were not able to engage in very effectively before because so much of the country just wasn't available for our program for security reasons and because of our disinterest in working area in areas that were governed by the maoists so i'm sorry if i gave that impression in that in that language it's  more that we want to assess the right mix of activities which sectors we could be most effective in when we hear from the new government what its priorities are going to be when we hear from the other donors what their priorities are going to be  if i can just say there are some policy issues raised by the maoists coming into government and probably leading the government the designations of the maoists under two separate terrorism designations once a specially designated global terrorist list and the other terrorist exclusion list those don't automatically prohibit any assistance to ministries or other entities that would be controlled by the maoists but we have a policy issue here we've both abandon violence and engage in politics will be able to work with them more and i know for example some of the other major parties have called on the maoists to disband the young communist league which has been reported to be involved in a lot of and to the extent that they take such steps we can have a better relationship with them harm basser has met with the baton to the maoists leader and basically told him that we will work with a peaceful government we will work with the government is committed to democracy p which as i pointed out although not a designated terrorist organization is a splinter of the l t and is now a part of the provincial government how is that circumstance going to affect our programs and these provinces it's it's also a policy question that we're looking at the i think first and foremost our emphasis right now is trying to get the militant group that's associated with  so called pliant faction to get them to end their use of child soldiers as a matter of congressional legislation it's a matter of great importance to us and i think unicef has estimated there are something like one hundred fifty child soldiers in this group  minus i don't know it's probably a big estimate couple doesn't have been released so far but we are engaged in a concerted effort trying to get the government to help us to make sure that these child soldiers are no longer members of this group will look at how we operate in the east we have wanted to try to make sure that the people of this region who have been subject to fighting and displacement a lot of other troubles over the last few years we want to try to help them stabilize and help and help them enjoy the benefits of living under a democratic government living in in a new situation but how exactly we do that run these programs will depend to some extent on how  to verify that because in and year after two thousand and nine congressional budget justification which i have here on page six increase or is there something else you're doing that's not in the budget it's it's complicated and the figures that i've been given i can share with you i think what might be more useful to the committee is if we to the subcommittee is if we get back to you with a fuller explanation there are a lot of different it's complicated is a pretty skimpy explanation but the numbers that i have  show that in the zero nine request the whole the assistance for hiv and aids which is not just coming out of that global account but also out of our child's arrival and health account is going up over what the base was in a weight now they base in  powlett that the papal for reasons i don't understand they the global hiv aids money for india is not in showing up in c b j and i don't understand that and that's what we need to get back to you and the plane because when you understand it could you explain it yes yes we are most anxious to hear how how it represents an increase if we don't see any dollars but you're absolutely right to ask the question i mean there's more than two and a half million people infected with hiv in india and this is exactly one of the groups that we should stay committed to and the president has so stated we're committed to it but wishing it were so hoping it was so i'm praying it doesn't put helping to improve donor coordination the question is is not afghanistan important enough to us security that we should shouldn't rely on others to ensure that there is coordination between donors shouldn't we make sure that ourselves sir i think we we do spend a lot of time on better coordination within the u s government within all the a gencies but also within the international community and a lot of my time on the road is spent as it was last weekend in paris working with the french on the upcoming donor conference that we're going with the u n representative who is the new special representative on coordination to make sure we're focused on the same goals and we're focused on the same practices as we all work to support the afghan government in terms of sort of assuming that overall leadership we do think the united nations is the best place to do it united states is the biggest donor has it is a very important role we do coordinate for example in police training where others have roles and police training but our general it combined command out  in afghanistan does in fact pretty much coordinate with everybody on doing that but there are other areas broadly civilian reconstruction where we all look to the united nations to give us guidance and lead and to be the primary coordinator for support for the afghan government if i can just add to that a couple of weeks ago on this trip i keep referring to that our new administrator took to afghanistan and pakistan she led a group of i think two dozen other donor countries donors can better coordinate in a lead up discussion to the paris conference that this is very very boucher referred to so i think it's absolutely right that the united nations and the government of afghanistan need to be in the lead but the united states among the donors is very much in the lead on donor coordination i thank you for that sector your statement talks about assistance to bangladesh in anticipation of a transition to a democratic government should we be providing assistance to ensure that elections are free and fair and that the government that emerges is democratic as well as legitimate is not a softball the answer is absolutely if you look from zero eight zero nine support for but democratic institutions we've asked for going from nine million to twenty million a lot of that has to be able to support the elections we've been a very strong supporter of the independent election commission in bangladesh we're just starting a program to work over next i think it's three or four years on anti corruption efforts actually sort of not the others are doing the anti corruption commission we're working on the government budget and how it's spent to try to prevent corruption we've made a big point in our talk in our finance of strengthening the institutions that can help preserve and protect democracy and i think we are indeed putting our money where our mouth is on that one in addition on a policy level we've been pressing for the steps that we think are necessary in order to provide a good election to provide a good playing field for the parties to contest the election i've made the point  quite vocally when i was in bangladesh that the state of emergency needs to be lifted and a couple days later the chief advisor who i think i've been preparing to say this anyway but he he started talking about lifting the ban on indoor political activity and some other steps and i do think they got the message quite clearly that you can't have a good election under a state of emergency so it's both working with them and pressing the policy points but also trying to put money into the election commission the anti corruption efforts civil service commissions and the other institutions that can hold good elections and guarantee stability for the democracy if i can just take this opportunity all around bangladesh to also make a plug for and it's i n the administration's request funding to continue for disaster preparedness i will never forget my visit to the area that was hit by cycle in cedar a couple of months after it happened to see what the earthen dams that they had put in with our assistance over the years and the mangrove swamps looked like after the cyclon hit them they look terrible but they look terrible because they did their job and the communities behind those earthen dams in the communities behind those mangrove swamps were in pretty good shape and that and the numbers of fatalities after that cycle own were me i hate to say this but they were good numbers for a  neighbors in recent weeks in preparing for the next natural disaster the assistance that we're providing for the area and has a government pakistan actually provided any of that funding that it's committed they like the united states and is a multi year commitment and they're on track for authority and to certain other costs that they are taking for the work in the fatah so i'd have to say i don't think the i don't know the new government specifically committed to this development plan but we've talked to the government we've talked to the parties including the party that controls the northwest frontier and they are supportive of the sustainable development plan in fact they have much bigger ideas about what needs to be done in terms of development up there so i think if anything we'll probably see an expansion  plans from the afghan from the pakistani government in terms of what they do for the tribal areas but let me thank both of you this power was among the finest public servants we've had a pleasure of  having is as witnesses and we thank you for your continued public service and for your careers and for sharing of your your time with us and suffering through our technology glitch hopefully we'll have that