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[Senate Hearing 108-70]
[From the U.S. Government Publishing Office]

                                                         S. Hrg. 108-70
 
                  FOREIGN ASSISTANCE OVERSIGHT (PART I)

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

                                HEARING

                               BEFORE THE

                     COMMITTEE ON FOREIGN RELATIONS
                          UNITED STATES SENATE

                      ONE HUNDRED EIGHTH CONGRESS

                             FIRST SESSION

                               __________

                             MARCH 26, 2003

                               __________

       Printed for the use of the Committee on Foreign Relations

 Available via the World Wide Web: http://www.access.gpo.gov/congress/
                                 senate

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                     COMMITTEE ON FOREIGN RELATIONS

                  RICHARD G. LUGAR, Indiana, Chairman
CHUCK HAGEL, Nebraska                JOSEPH R. BIDEN, Jr., Delaware
LINCOLN CHAFEE, Rhode Island         PAUL S. SARBANES, Maryland
GEORGE ALLEN, Virginia               CHRISTOPHER J. DODD, Connecticut
SAM BROWNBACK, Kansas                JOHN F. KERRY, Massachusetts
MICHAEL B. ENZI, Wyoming             RUSSELL D. FEINGOLD, Wisconsin
GEORGE V. VOINOVICH, Ohio            BARBARA BOXER, California
LAMAR ALEXANDER, Tennessee           BILL NELSON, Florida
NORM COLEMAN, Minnesota              JOHN D. ROCKEFELLER IV, West 
JOHN E. SUNUNU, New Hampshire            Virginia
                                     JON S. CORZINE, New Jersey

                 Kenneth A. Myers, Jr., Staff Director
              Antony J. Blinken, Democratic Staff Director

                                  (ii)

  

                            C O N T E N T S

                               ----------                              
                                                                   Page

Lugar, Hon. Richard G., U.S. Senator from Indiana, opening 
  statement......................................................     2

              Hearing Segment I.--Near East and South Asia

Burns, Hon. William J., Assistant Secretary of State, Near 
  Eastern Affairs, Department of State, Washington, DC...........     4
    Prepared statement...........................................     6
    Responses to additional questions for the record submitted by 
      Senator Biden..............................................    74
Chamberlin, Hon. Wendy, Assistant Administrator, Bureau for Asia 
  and the Near East, United States Agency for International 
  Development [USAID], Washington, DC............................     8
    Prepared statement...........................................    12
    Response to an additional question for the record submitted 
      by Senator Feingold........................................    79
Rocca, Hon. Christina B., Assistant Secretary of State, South 
  Asian Affairs, Department of State, Washington, DC.............    40
    Prepared statement...........................................    43
    Responses to additional questions for the record submitted 
    by:
      Senator Biden..............................................    76
      Senator Bill Nelson........................................    80

               Hearing Segment II.--East Asia and Pacific

Chamberlin, Hon. Wendy, Assistant Administrator, Bureau for Asia 
  and the Near East, United States Agency for International 
  Development [USAID], Washington, DC............................    65
    Prepared statement...........................................    12
    Response to an additional question for the record submitted 
      by Senator Feingold........................................    79
Kelly, Hon. James A., Assistant Secretary of State, East Asian 
  and Pacific Affairs, Department of State, Washington, DC.......    60
    Prepared statement...........................................    63
    Responses to additional questions for the record submitted 
    by:
      Senator Biden..............................................    77
      Senator Feingold...........................................    79

                                 (iii)

                 FOREIGN ASSISTANCE OVERSIGHT (PART I)

                              ----------                              

                       WEDNESDAY, MARCH 26, 2003

                                       U.S. Senate,
                            Committee on Foreign Relations,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 9:30 a.m. in room 
S-116, The Capitol, Hon. Richard G. Lugar (chairman of the 
committee), presiding.
    Present: Senators Lugar, Hagel, Brownback, Chafee, 
Alexander, Coleman, Boxer, and Bill Nelson.
    The Chairman. This hearing of the Senate Foreign Relations 
Committee is called to order. We are very pleased to initiate 
our hearings today in preparation for foreign assistance 
authorization, and it is the pleasure of the committee to move 
sector by sector so that there are opportunities for State 
Department leadership to give objectives, goals and specifics 
that ought to be part of our legislation. We take seriously the 
authorization process, as these hearings are evidence, and we 
appreciate very much your willingness to come to testify.
    It is a pleasure to welcome Assistant Secretaries of State 
William Burns, Christina Rocca, and James Kelly, who will all 
appear in the course of this morning, as well as USAID 
Assistant Administrator Wendy Chamberlin, to our committee. We 
look forward to your testimony and to our discussion of the 
role that U.S. foreign assistance can play in three strategic 
areas of the world, the Near East, South Asia, and East Asia.
    Since the mid-1980s, Congress has not fulfilled its 
responsibility to pass a Foreign Assistance Authorization Act. 
As I make that statement, I said Congress. From time to time 
this committee has acted, sometimes the Senate as a whole, 
sometimes the other body, but we have not been successful in 
forwarding our efforts in conference or producing legislation 
that the President would sign, and so we hope to forge a 
different path this year, in 2003.
    In the absence of such legislation, the job of providing 
guidance on foreign assistance has fallen to the Appropriations 
Committees, House and Senate. I am hopeful that our committee 
will work together during the coming months to pass a 
thoughtful foreign assistance authorization bill that carefully 
examines existing programs and addresses emerging needs.
    We appreciated very much the testimony of the Secretary of 
State last month on the administration's request to fund the 
Department's domestic and overseas operations. Understandably, 
many questions at that hearing focused on broader United States 
policy toward Iraq and North Korea. Today, we will probe 
foreign assistance programs in much greater detail. In the 
midst of the current conflict, we hope to learn how the 
administration's fiscal year 2004 budget request will support 
U.S. foreign policy interests, including a successful foreign 
assistance strategy for post-war Iraq.
    We also must probe how foreign assistance should support 
efforts to reconstruct Afghanistan, to mitigate the threat of 
weapons of mass destruction on the Korean Peninsula, to bolster 
our public diplomacy, and to ensure the security of Americans 
who travel overseas, including those who serve in our 
embassies.
    Today is the first of two hearings the committee will hold 
in advance of our deliberations on reauthorizing foreign 
assistance. I am very pleased that Senator Chafee has agreed to 
lead the first two segments of our discussion with the very 
capable ranking member, Senator Boxer, and they will listen to 
you address foreign assistance for the Near East and South 
Asia. As the subcommittee chairman for Near Eastern and South 
Asian Affairs, Senator Chafee has the responsibility for these 
two regions. Senator Brownback, our East Asian and Pacific 
Affairs Subcommittee chairman, had an unavoidable conflict this 
morning, so I will preside over the third panel so that we will 
have continuity in our hearings this morning.
    I am going to turn the meeting over to my distinguished 
colleague, Senator Chafee, with first of all a wish that he has 
a happy birthday. This is, in fact, for those of you who have 
not already read Roll Call and other distinguished 
publications, Senator Chafee's fiftieth birthday, so he is 
beginning the day with very productive and wonderful labors on 
behalf of the public service of this country.
    And likewise, I am indebted to Senator Boxer. She is 
constant in these subcommittee hearings either as chairman of 
the subcommittee or as distinguished ranking member, and has a 
profound and long interest in the areas that are going to be 
discussed this morning.
    So I turn the gavel over to you, Senator Chafee, with best 
wishes, and as these two panels conclude I will return and 
conduct the third part of our session. I think we will not have 
rollcall votes, as I am advised, for the moment until 11:30. 
The Senate is due, as I understand, to come in at 10:30, so 
that is a blessed relief, at least for a couple of hours, which 
we will try to use productively, and then probably during the 
session that I am chairing we may be interrupted. Hopefully all 
of you will understand our predicament, but we will go in 
sections between votes until we can conclude our hearings.
    [The opening statement of Senator Lugar follows:]

             Opening Statement of Senator Richard G. Lugar

    It is a pleasure to welcome Assistant Secretaries of State William 
Burns, Christina Rocca, and James Kelly, as well as USAID Assistant 
Administrator Wendy Chamberlin to the committee. We look forward to 
your testimony and to our discussion of the role that U.S. foreign 
assistance can play in three strategic regions of the world: the Near 
East, South Asia, and East Asia.
    Since the mid-1980s, Congress has not fulfilled its responsibility 
to pass a Foreign Assistance Authorization Act. In the absence of such 
legislation, the job of providing guidance on foreign assistance has 
fallen to the Appropriations Committees. I am hopeful that our 
committee will work together during the coming months to pass a 
thoughtful Foreign Assistance Authorization bill that carefully 
examines existing programs and addresses emerging needs.
    We appreciated very much the testimony of the Secretary of State 
last month on the administration's request to fund the Department's 
domestic and overseas operations. Understandably, many questions at 
that hearing focused on broader U.S. policy toward Iraq and North 
Korea. Today we will probe foreign assistance programs in much greater 
detail.
    In the midst of the current conflict, we hope to learn how the 
administration's fiscal year 2004 budget request will support U.S. 
foreign policy interests, including a successful foreign assistance 
strategy for post-war Iraq. We also must probe how foreign assistance 
should support efforts to reconstruct Afghanistan, to mitigate the 
threat of weapons of mass destruction on the Korean Peninsula, to 
bolster our public diplomacy, and to ensure the security of Americans 
who travel overseas, including those serving in our embassies.
    Today is the first of two hearings the committee will hold in 
advance of our deliberations on re-authorizing foreign assistance. I am 
very pleased that Senator Chafee has agreed to lead the first two 
segments of our discussion, which will address foreign assistance for 
the Near East and South Asia. As the subcommittee chair for Near 
Eastern and South Asian Affairs, he has responsibility for those two 
regions. Senator Brownback, our East Asian and Pacific Affairs 
subcommittee chairman, had an unavoidable conflict this morning, so I 
will preside over the third panel.

    The Chairman. I turn the chair over to my colleague.

              HEARING SEGMENT I.--NEAR EAST AND SOUTH ASIA

    Senator Chafee [presiding]. Thank you, Mr. Chairman. I 
appreciate you holding these timely hearings. Let me welcome 
our distinguished witnesses from the State Department and 
USAID. Today, the Foreign Relations Committee meets to take 
testimony on the President's fiscal year 2004 budget request 
for foreign assistance.
    I will chair this hearing for the first two sets of panels, 
the first focusing on the Near East region and the second on 
South Asia, and as the chairman mentioned, we could have 
rollcall votes later, so although there are so many issues to 
cover, this one particularly is on the foreign assistance, and 
we will try and stick to that just for the sake of time, I 
hope, in our questioning.
    There are so many issues I hope we can invite you back at 
another time to cover many of the other issues that are of 
importance. I do note that the commitment we are making to the 
Near East is over the last 3 years fairly static, and so there 
are many questions associated directly with our foreign 
assistance, based on all of the challenges we have in the 
region, and to see the foreign assistance over the last 3 years 
remain--from $5.5 billion, $5.4 billion, $5.5 billion roughly--
you can argue very, very static, and I know you are making a 
commitment to the Middle East Partnership Initiative, and we 
look forward to hearing your testimony on that, so I will turn 
any further statements over to Senator Boxer.
    Senator Boxer. Senator, thank you so much. This is the 
second subcommittee hearing on which we held the titles of 
chairman and ranking member. Outside of the fact that I would 
like to see it reversed, there is nothing I love better than 
working with you, and I know that we will make some progress.
    Clearly, this hearing is coming at a challenging time, 
and--as we finish the first week of the war in Iraq. I have 
believed clearly that once the war started I wanted us to have 
a much broader coalition, I wanted us to go through the United 
Nations, I mean, there is no secret about that, but here we 
are, so we need to show unqualified support for our troops and 
also for the innocent people who have suffered over these many 
years under Saddam Hussein and who will suffer because of the 
wartime situation.
    I hope you will touch on, although we are looking at a 
broader category of issues, the humanitarian situation there; 
what are we facing in terms of getting aid--I understand 
Hussein's government is not making it all that easy for us, I 
would like to know from you.
    I know the President's supplemental does provide $2.4 
billion for relief and reconstruction for Iraq, but there are 
no additional funds in the fiscal year 2004 budget for Iraqi 
reconstruction. I am confused about that. Do we expect that 
other nations will pick up the tab for that? I have the list of 
the coalition forces, and I have been asking for a long time 
which of those 40 nations will be contributing hard dollars to 
help us in reconstruction. I would like you to clear that up. 
Do we expect to be completed, I mean, after the supplemental, 
is that it, or will we need more funds, so the rebuilding of 
Iraq is important. We know in the last gulf war that other 
nations picked up 88 percent of the costs there, so I am 
interested to see where we are going.
    I want to express my support of the additional aid to 
Israel and Egypt that is in the supplemental request. I support 
the aid to Turkey as well, but that is in a different area of 
the world than we are talking about here. I think it is 
important, because I think that the war has extracted great 
cost to both of those nations in terms of their tourism 
business, their economy in general, and clearly the security of 
Israel and what they have had to do to prepare, so also I know 
we need to turn our attention to the peace process, and the 
President has been very, I think, strong in terms of what the 
Palestinians need to do in order for that process to move 
forward. I think we are starting to see certainly some good 
changes there in terms of the leadership, so I would love to 
hear your perspective on that.
    But again, Mr. Chairman, as I look over the countries that 
we are responsible for--quote-unquote, responsible for--it is 
an extraordinary challenge for us, and I think we are going to 
need to work hard and stay close, and hopefully be united, 
because if we can be bipartisan on this subcommittee and on the 
full committee, I just think we are going to be doing the right 
thing for our country, and I know if anyone can make that 
happen, it is you, so thank you very much.
    Senator Chafee. Thank you, Senator Boxer. Senator Hagel, do 
you have any statement?
    Senator Hagel. No, Mr. Chairman, thank you.
    Senator Chafee. Assistant Secretary Burns.

  STATEMENT OF HON. WILLIAM J. BURNS, ASSISTANT SECRETARY OF 
 STATE, NEAR EASTERN AFFAIRS, DEPARTMENT OF STATE, WASHINGTON, 
                               DC

    Ambassador Burns. Thank you very much, Mr. Chairman. First, 
happy birthday again. Second, with your permission I will 
submit a longer written statement and just briefly summarize my 
statement at the outset.
    Senator Chafee. Without objection.
    Ambassador Burns. Mr. Chairman, as we meet today, American 
and coalition forces are closing in on Baghdad. The demise of 
Saddam Hussein's regime will end a dark chapter in the region's 
history. Iraq's liberation will bring new hope to the Iraqi 
people and eliminate a significant WMD threat to the United 
States and our allies, but as the Iraq regime falls we face a 
new challenge, helping the Iraqi people to build a peaceful and 
prosperous nation that serves its people's interests.
    The $2.4 billion supplemental budget request you have just 
received for Iraq reconstruction and relief is a clear signal 
of the seriousness of our commitment to achieve these ambitious 
goals. We will need to work in close partnership with patriotic 
Iraqis, and with the assistance of Iraq's neighbors, other 
friends and allies, and the wider international community.
    We will also need to work with the United Nations, 
nongovernmental organizations and others to provide for the 
humanitarian needs of the Iraqi people, rebuild infrastructure, 
and reestablish effective institutions of government and civil 
society. No one should underestimate the complexity of these 
challenges or their importance.
    Even as we begin the formidable task of helping Iraqis 
build a new Iraq, an array of old and new policy challenges 
face us in the broader region. We have targeted and expanded 
our military and economic assistance throughout the region to 
bring terrorists to justice and to deny them, their financiers, 
and their supporters refuge, aid, or comfort. We need to build 
on this by helping our friends and allies in the region improve 
their legal, regulatory and enforcement capabilities.
    Working to end the tragic conflict between Israel and the 
Palestinians, as Senator Boxer said, is another absolutely 
critical priority. President Bush has outlined a vision for 
peace based on the simple but profoundly important idea of two 
states, Israel and Palestine, living side by side in peace, 
security, and dignity. That will be very hard to achieve, but 
we must get started. Both sides, as well as Arab states, will 
have to make difficult choices if we are going to revive hopes 
for peace. The United States will have to exercise vigorous 
leadership, and our assistance package is a vital element of 
our approach.
    Economic and military assistance to Israel helps provide 
the security and economic vitality to take risks for peace. Our 
support for UNRWA and our efforts to help Palestinians build a 
humanitarian infrastructure have helped alleviate profound 
economic hardship for Palestinians. Economic, social, and 
political change are a reality in the Middle East as many 
people in the region, including the authors of the 
exceptionally thoughtful Arab Human Development Report have 
acknowledged. Conflict, instability and terrorism are in many 
ways by-products of failures to adapt and modernize.
    Last year, at President Bush's direction, Secretary Powell 
took the lead in organizing the U.S.-Middle East Partnership 
Initiative to establish a framework for working with those in 
the region who are committed to positive change. The initiative 
allows us to focus our efforts around three key regional reform 
priorities, economic modernization, educational opportunity, 
and political participation. We will also focus on addressing 
the special needs of Arab women and girls in all three areas.
    We are working very closely with USAID, with the U.S. Trade 
Representative and others in the U.S. Government to shape this 
initiative, and we are working closely with our partners in the 
region, recognizing that real and sustainable change must come 
from within, not as a result of preaching or prescription from 
the outside.
    None of this will be easy, and results are likely to be 
fitful and incremental. We have to approach these challenges 
with determination, but also with a degree of humility. The 
Middle East is a diverse and complex set of societies, and 
there can be no one-size-fits-all solution to the region's 
problems. However, in the end, our interests are best served by 
aligning our policies with the goals and aspirations of the 
people of the region, a Middle East that is stable, prosperous, 
and open. Secretary Powell last December called it adding hope 
to the U.S.-Middle East agenda. It is a sorely needed element 
right now.
    We have no monopoly on wisdom, Mr. Chairman, in approaching 
these challenges. To be successful we will need the guidance 
and support of this committee, the Congress, and many others. 
As we address a profoundly important set of interconnected 
policy challenges in the Middle East, I look forward to working 
very closely with all of you. Thank you very much.
    [The prepared statement of Mr. Burns follows:]

  Prepared Statement of Hon. William J. Burns, Assistant Secretary of 
                      State, Near Eastern Affairs

    Thank you, Mr. Chairman for the opportunity to lay out our 
priorities in the Middle East and North Africa at this decisive moment.
                                  iraq
    As we meet today, American and coalition forces are closing in on 
Baghdad. The demise of Saddam Hussein's regime will end a dark chapter 
in the region's history. Iraq's liberation will bring new hope to the 
Iraqi people and eliminate a significant WMD threat to the United 
States and its allies. But as the Iraqi regime falls, we face a new 
challenge: helping the Iraqi people to rebuild a peaceful and 
prosperous nation that serves its people's interests. The $2.44 billion 
supplemental budget request you have just received for Iraq Relief and 
Reconstruction is a clear signal of the seriousness of our commitment 
to achieve these ambitious goals. We will also need to work in close 
partnership with patriotic Iraqis, and with the assistance of Iraq's 
neighboring states, other friends and allies, and the wider 
international community. We will need to work with the United Nations, 
NGOs and others to provide for the humanitarian needs of the Iraqi 
people, rebuild infrastructure, and re-establish effective institutions 
of government and civil society. No one should underestimate the 
complexity of these challenges or their importance.
    Even as we begin the formidable task of helping Iraqis to build a 
new Iraq, an array of new and old policy challenges faces us in the 
broader region. We must continue to work with our allies in the region 
to win the war against terrorism; to bring about an end to violence and 
realize the President's vision of two states, Israel and Palestine, 
living side by side in peace, security and dignity; and to support the 
efforts of peoples and leaderships in the region to promote economic 
modernization, educational opportunity and political participation.
                           fighting terrorism
    We have targeted and expanded our military and economic assistance 
throughout the region to bring terrorists to justice and to deny them, 
their financiers, and their supporters refuge, aid and comfort. We need 
to build on this by helping our friends and allies in the region 
improve their legal, regulatory and enforcement capabilities. We are 
providing additional resources to strengthen key regional military and 
law enforcement assets. And, in coordination with the Departments of 
Justice and Treasury, are providing the training these forces need to 
oversee banks, charities, and the informal hawala system to deny 
terrorists the ability to solicit, hide and transfer assets.
    Foreign Military Financing (FMF) directly supports the ongoing war 
against terror and our operations in Iraq. While we have always 
supported active programs to engage regional militaries, we have 
recently paid particular attention to the maintenance--and in many 
cases the expansion--of our bilateral military relationships. For 
example, we have increased assistance to critical partners such as 
Jordan, Bahrain and Oman--and have requested additional anti-terror and 
security-related funding in the supplemental for these countries. We 
have also provided more support to key Operation Enduring Freedom 
coalition states like Yemen. In doing so, we support regional stability 
and enhance the ability of our friends and allies to operate against 
terror networks and other threats to peace.
                           middle east peace
    Working to end the tragic conflict between Israel and the 
Palestinians is another critical priority. President Bush has outlined 
a vision for peace based on the simple but profoundly important idea of 
two states, Israel and Palestine, living side by side in peace, 
security, and dignity. That will be very hard to achieve, but the 
President has expressed his readiness to move forward with the roadmap 
as soon as an empowered Palestinian Prime Minister is confirmed. Both 
sides, as well as the Arab states, will have to make difficult choices 
if we are going to revive hopes for peace.
    The United States will have to exercise vigorous leadership and our 
assistance package is a vital element of our approach. Economic and 
military assistance to Israel helps provide it the security and 
economic vitality to take risks for peace. The supplemental request you 
have just received includes $1 billion in additional FMF to help Israel 
improve the readiness of defensive capabilities and systems, both in 
defense and civilian security areas. The language also authorizes up to 
$9 billion in loan guarantees for Israel over a three-year period 
through the end of FY05. Israel will use these guarantees, which would 
be provided at no additional budget cost to the United States, to 
address the costs associated with its current economic difficulties, 
exacerbated by the current conflict with Iraq, as well as to implement 
critical budget and economic reforms.
    Our ongoing assistance in the West Bank and Gaza funds programs to 
help alleviate the profound economic situation the Palestinians now 
face and contributes to the development and reform of credible 
institutions vital for Palestinian statehood. Our recent supplemental 
request included an additional $50 million to support these activities.
    We also continue to play a leadership role by funding multilateral 
peace activities such as the Multinational Force and Observers--a 
cornerstone of the Egyptian-Israeli peace treaty. U.S. funding has also 
maintained important experts-level ``track two'' dialogue between Arab 
states, Israel and the Palestinians, even as direct contacts have been 
intermittent. Our multilateral priorities include environmental 
protection and water resources, humanitarian assistance to more than 
three million Palestinian refugees and engaging Israelis and Arabs in a 
dialogue on their joint future in the region. Complementing these 
efforts, the Middle East Regional Cooperation Program provides grants 
based on unsolicited research project proposals from regional 
universities, NGOs and government laboratories.
             the middle east partnership initiative (mepi)
    As we enter the 21st century, it is a hard truth that countries 
that adapt to global conditions and open up and seize the economic and 
political initiative will prosper; those that don't will fall farther 
and farther behind. Economic, social and political change are a reality 
in the Middle East, as many people in the region (including the authors 
of the exceptionally thoughtful Arab Human Development Report) have 
acknowledged. Conflict, instability and terrorism are in many ways by-
products of failures to adapt and modernize. Last year, at President 
Bush's direction, Secretary Powell took the lead in organizing the 
U.S.-Middle East Partnership Initiative to establish a framework for 
working with those in the region who are committed to change. The 
Initiative allows us to focus our efforts around three key regional 
reform issues: economic reform, educational opportunity, and political 
participation. We are working closely with AID and others in the U.S. 
government to shape this initiative. And we are working closely with 
our partners in the region, recognizing that real and sustainable 
change must come from within, not as a result of preaching or 
prescription from the outside.
    There is some reason for hope. Many in the region understand the 
challenges they face better than we ever will and have begun to speak 
openly about what must be done. We have secured initial funding and, 
together with our partners in the region, we are developing a set of 
promising pilot projects. In addition, the Initiative establishes a 
framework for organizing our bilateral assistance programs. State and 
USAID are working with host governments and NGOs to ensure that our 
existing regional aid programs are targeted on the kinds of reforms 
that are most critical.
    The MEPI initiative is an ambitious and broad-based program. The 
program was funded at the level of $20 million in the FY02 supplemental 
to jump-start critical pilot projects in areas such as basic education 
reform, campaign skills training for women candidates, training for new 
parliamentarians, micro-enterprise programs, and assistance to open 
markets and eliminate trade barriers.
    In the FY03 supplemental we have requested $200 million for the 
Middle East Partnership Initiative and Muslim Outreach to expand our 
programming in Arab countries and in the broader Muslim world. Funding 
will be used to expand Middle East Partnership Initiative activities in 
the Arab world and to launch similar pilot projects outside the Arab 
world. For FY04, we have requested $145 million for MEPI. The FY03 
supplemental money is vital to move the program forward, particularly 
as there is no FY03 ESF allocation for the MEPI (as the program was 
conceived after the FY03 budget was finalized). Both the FY03 
supplemental money and the FY04 money will support the expansion of 
economic, educational and political opportunities across the Arab 
world.
    For FY04, $50 million would be dedicated to promoting economic 
reform, supporting those who are working to open up their economies and 
expand opportunities for all their citizens. $45 million would be used 
to expand access and raise the quality of education in the region. $40 
million would promote greater political participation and rule of law. 
And $10 million would address the special needs of Arab women and girls 
across the region. We intend to use FY03 supplemental monies, if 
approved by the Congress, to support the same sorts of programs.
                             looking ahead
    None of this will be easy and results are likely to be fitful and 
incremental. We have to approach these challenges with determination, 
but also with a degree of humility. The Middle East is a diverse and 
complex set of societies, and there can be no ``one size fits all'' 
solution to the region's problems. However, in the end, our interests 
are best served by aligning our policies with the goals and aspirations 
of the people of the region: a Middle East that is stable, prosperous 
and open. Secretary Powell last December called it ``adding hope to the 
U.S. Middle East agenda.'' It's a sorely needed element right now.
    We have no monopoly on wisdom in approaching these challenges. To 
be successful, we will need the guidance and support of this Committee, 
the Congress, and many others. As we address a profoundly important set 
of interconnected policy challenges in the Middle East, I look forward 
to working closely with all of you.

    Senator Chafee. Thank you, Mr. Assistant Secretary.
    Assistant Administrator Chamberlin, welcome.

 STATEMENT OF HON. WENDY CHAMBERLIN, ASSISTANT ADMINISTRATOR, 
  BUREAU FOR ASIA AND THE NEAR EAST, UNITED STATES AGENCY FOR 
       INTERNATIONAL DEVELOPMENT [USAID], WASHINGTON, DC

    Ambassador Chamberlin. Thank you very much, Senator Chafee, 
and happy birthday again. Senator Boxer, Senator Hagel, thank 
you very much for asking me to join my friend and long-time 
colleague, Bill Burns. It is our pleasure to represent USAID 
here today in these hearings. Like Ambassador Burns, I would 
like to submit a much longer written text and try to get to the 
heart of some of the issues that we have in our assistance 
programs throughout the Near East Bureau. I will even try to 
pare back my oral remarks a bit in the interest of true dialog, 
because that is really what we desire with your committee, is a 
dialog. As you begin to develop the authorization legislation, 
we want to offer to be up here often and frequently to talk to 
you in the kind of partnership that I know that we all look 
forward to.
    Recent events have clearly demonstrated the enormous risk 
posed by nations with weak institutions, high poverty, and 
limited opportunity. As noted in the national security strategy 
of the United States, poverty does not make poor people into 
terrorists and murderers, yet poverty, weak institutions, 
corruption, can make weak states vulnerable to terrorist 
networks and drug cartels within their borders. For this 
reason, the strategy calls for the United States to launch a 
new era of global economic growth through free markets and 
trade, while expanding the circle of development by opening 
societies and building the infrastructure of democracy.
    Two important initiatives the President has proposed to 
help carry out this strategy will dramatically affect the way 
USAID does business in the Asia and Near East region and, 
indeed, throughout the world. The Millennium Challenge account 
articulates a fresh and practical policy framework for 
development built on the simple fact that our aid is most 
effective when governments are democratic and accountable to 
their citizens.
    The Middle East Partnership Initiative, MEPI, emphasizes 
democracy, trade, and economic development and education in a 
region that desperately needs all of these things. USAID is 
pleased that it will play an important role in both of these 
initiatives, and against this backdrop I would like to discuss 
USAID's efforts in the three regions throughout the morning 
covered by our bureau, the Asia and Near East Bureau. I will 
begin, of course, at your request with the Near East region, 
and then later on in the morning we will move to the other 
areas of South Asia and East Asia.
    All of us are concerned today by the unfolding events in 
Iraq. Like the events of September 11, the current conflict 
points out the need to address the root causes of regional 
instability. Across North Africa and the Middle East, economic 
hopelessness and political stagnation are a breeding ground for 
extremism, providing fertile ground for terrorist groups. Slow 
economic growth is exacerbated by demographic conditions. With 
the majority of the population in many of these countries below 
the age of 25, each year, millions of young people enter the 
labor market with no prospect of finding a job.
    To address these challenges, the ANE Bureau is working 
closely with the Department of State to make sure that all 
programs in the region correspond closely with the objectives 
of MEPI. USAID is fully committed to using all the resources 
available to us to support this new initiative. We believe that 
MEPI's focus on democracy, economic growth, and education is 
exactly right, and I am pleased to report that our programs in 
the Middle East largely reflect these emphases. Economic growth 
and democracy are two of the three pillars which define USAID's 
mission and shape our organizational structure, while education 
and health care are crucial areas as well.
    Indeed, the recent report commissioned by USAID's 
Administrator, Andrew Natsios, ``Foreign Aid in the National 
Interest,'' speaks to the importance of promoting democratic 
governance and driving economic growth as key themes. Thus, 
USAID's own analytical work points in precisely the same 
direction as does the philosophy that underlies MEPI.
    Looking beyond MEPI to the broader USAID program in the 
region, following are examples of some of the challenges that 
we do face and the successes that it helped achieve at the 
bilateral level. In Iraq, years of highly centralized rigid 
administration have left enormous development challenges and a 
citizenry disempowered. One-third of all children in the south 
and central regions in Iraq suffer from malnutrition and 5 
million people lack access to safe water and sanitation. These 
are conditions that existed because of many of the policies of 
Saddam Hussein that predated the current hostilities.
    Prior to the 1990s, Iraq had one of the best educational 
systems in the world. Now, children do not have basic literacy 
skills, and Iraq's infrastructure has suffered greatly from 
years of neglect. As the fighting comes to an end, and we hope 
it will soon, USAID's programs will help restore economically 
critical infrastructure and the delivery of essential services 
to facilitate this recovery.
    USAID also plans to support essential health and education 
services. Potable water sanitation services will be 
reestablished to prevent disease, as will basic health care and 
education services.
    USAID programs will expand economic opportunity through 
credits to small businesses, development of business networks, 
and work force training. To improve local agricultural 
production is another one of our goals.
    In the area of governance, USAID will work to improve the 
efficiency and accountability of government. USAID will also 
work with local administrations to deliver basic services and 
promote the development of civil society and decentralized 
government. Mr. Chairman, I look forward to talking about these 
programs in greater depth as the morning proceeds.
    In Egypt, our strong bilateral relationship with Egypt 
facilitates the U.S. national interest in combating terrorism, 
promoting regional peace, encouraging trade and investment, and 
promoting economic development. In keeping with recent U.S. 
foreign policy imperatives, USAID and the U.S. State Department 
are working together to adjust the program, adapting to the 
changing global and Egyptian circumstances.
    In 2002, the Government of Egypt undertook a number of 
economic policy actions including, and I would like to note 
some specific points, completing an IMF-sponsored financial 
sector assessment program, second, enacting far-reaching 
legislation in money laundering and intellectual property 
rights, third, proposing a comprehensive macroeconomic policy 
reform plan, and fourth, floating the Egyptian pound.
    USAID technical and policy-based assistance helped lay the 
framework for many of these initiatives, and thus made possible 
these reforms. We look forward to continuing the work with 
Egypt to accelerate this progress of reform in ways that 
directly affects the lives of many of the Egyptian people.
    Jordan plays a pivotal role in promoting Middle East 
stability, combating terrorism, and serving as a model of 
reform under the leadership of His Majesty King Abdullah II. 
However, one-third of the population still lives at or below 
the poverty level, and Jordan has been deeply affected by 
prolonged economic shocks of September 11 combined with other 
regional conflicts that we see today. It needs to create 46,000 
new jobs in 2003 alone. To help address these challenges, USAID 
works hand in hand with the Government of Jordan, local NGOs, 
and the private sector to create jobs, improve education, 
health care, and address the water scarcity issues.
    Lebanon is still recovering from its 16-year civil war. The 
United States has a strong interest in promoting a stable 
democratic and economically strong Lebanon at peace with its 
neighboring States. However, a political leadership often mired 
in gridlock and strongly influenced by other regional players 
has not been able to provide strong direction for economic 
reform.
    In response, USAID works to expand economic opportunities 
in rural areas, promote democracy and good governance, and 
build the capacities of local municipalities to manage 
resources more efficiently, and we have had some important 
successes, community development program, for example. Because 
of it, the social and economic situation of more than 430 
communities has improved significantly. More than 70 percent of 
the rural population, of which 110,000 live in southern 
Lebanon, have access to improved irrigation, agriculture, 
roads, schools, dispensaries, water storage, sewer, and solid 
waste treatment.
    Morocco has made great gains in recent years, but still 
faces formidable challenges, including rising poverty due to 
high levels of unemployment, a labor pool unprepared for 
today's job market, and a citizenry appreciative of democratic 
reforms but thirsting for more.
    To deal with this challenge, USAID is reorienting its 
program in Morocco to make economic growth and in particular 
job creation the centerpiece of our strategy. The focus of this 
strategy will be on activities directly linked to job creation. 
In this context, USAID, State, and USTR are working together to 
help Morocco prepare for an eventual free trade agreement.
    Gaza, West Bank. Escalating violence, terrorism, closures 
and curfews have resulted in the virtual collapse of the 
Palestinian economy, and a growing humanitarian crisis. The GDP 
declined by 46 percent between 2000 and 2002 alone, and 
unemployment levels have climbed to 50 percent. Acute and 
chronic malnutrition have increased to epidemic proportions. 
USAID's greatest challenge is meeting the immediate emergency 
humanitarian needs of the Palestinians, such as medical 
supplies, food, and water without losing focus on medium- to 
long-term development goals, such as revitalizing the private 
sector and promoting political and economic reform.
    Given the continued political stalemate and the growing 
humanitarian crisis, USAID has programmed approximately $35 
million since April 2002 toward urgent humanitarian health, 
food and water activities to meet the basic human needs of the 
Palestinian people. We anticipate providing vital emergency and 
humanitarian assistance for another 12 to 18 months.
    And finally, in Yemen, USAID has established a new program 
this year, or hopes to very shortly, to improve basic health 
and education programs in tribal areas. We plan to open an 
office there this summer. Already, USAID programs have made an 
impact on increasing voter registration and enhancing 
professionalism in the main parties leading up to the 
parliamentary elections. In the coming years, USAID plans to 
support education, particularly for women, and income 
generation in poor and tribal areas.
    Thank you very much, and I welcome your questions.
    [The prepared statement of Ambassador Chamberlin follows:]

 Prepared Statement of Hon. Wendy Chamberlin, Assistant Administrator, 
   Bureau for Asia and the Near East, U.S. Agency for International 
                              Development

    Chairman Lugar, Members of the Committee, I welcome the opportunity 
to appear before you today to discuss the work of the U.S. Agency for 
International Development (USAID) in the Asia/Near East region, and 
your interest in possible adjustments to the Foreign Assistance Act. I 
am particularly pleased to appear before you in the company of 
Assistant Secretaries Burns, Rocca, and Kelly. Our joint appearance 
illustrates the close and ever growing coordination between the State 
Department and USAID, as well as the important role that USAID plays as 
a part of this Administration's foreign policy team.
    Recent events have clearly demonstrated the enormous risks posed to 
our nation by the existence of nations with weak institutions, high 
poverty, and limited opportunity. As noted in the National Security 
Strategy of the United States, ``Poverty does not make poor people into 
terrorists and murderers. Yet poverty, weak institutions, and 
corruption can make weak states vulnerable to terrorist networks and 
drug cartels within their borders.''
    For this reason the Strategy calls for the U.S. to launch a new era 
of global economic growth through free markets and trade while 
expanding the circle of development by opening societies and building 
the infrastructure of democracy.
    To help carry out this strategy, the President has proposed two 
important new initiatives that will dramatically affect the way USAID 
does business in the Asia Near East region, and indeed throughout the 
world:

   The Millennium Challenge Account (MCA) articulates a fresh 
        and practical framework for development. The MCA is built on 
        the fact that our aid is most effective in situations where 
        governments are democratic and accountable to their citizens. 
        We will achieve more effective results in economies that are 
        open and corruption-free, where governments invest in their 
        people. The MCA offers significant aid for governments that 
        meet high standards of performance. By making explicit the 
        causal relationship between good governance and economic 
        growth, the President has provided an innovative formula for 
        more effective assistance.

   The Middle East Partnership Initiative, or MEPI, emphasizes 
        democracy, economic reform and private sector development, and 
        education in a region that is desperately in need of all those 
        things.

    These general principles--igniting a new era of global economic 
growth through free markets and trade while expanding the circle of 
development by opening societies and building the infrastructure of 
democracy--articulated in the National Security Strategy and carried 
out through (among other means) the MCA and MEPI initiatives--form a 
useful backdrop against which to discuss USAID's efforts in the three 
regions covered by our ANE Bureau.
                               near east
    In the Near East, the need for robust foreign assistance has never 
been more compelling. All of us are concerned today by the unfolding 
events in Iraq, as U.S. forces are once again called upon to take 
decisive measures to ensure the United States and international 
community do not fall victim to terrorism, violence, and the spread of 
weapons of mass destruction. Like the events of September 11, the 
current conflict points out the need to address the root causes of 
regional instability. In countries across North Africa and the Middle 
East, economic hopelessness and political stagnation are providing 
fertile ground for those seeking to fill the ranks of terrorist groups. 
Over the last 25 years, economic performance in the Middle East has 
fallen behind that of most other regions of the world. The economic 
situation is exacerbated by demographics, with a majority of the 
population in many of these countries below the age of 25. Each year 
millions of young people enter the labor market with no prospect of 
finding a job. Many of the unemployed and/or underemployed are 
university graduates, often with technical degrees. Thus, there is 
already a considerable level of ``human capital'' not being put to use.
    Governments in the Middle East face crucial choices on issues of 
economic development and policy reform. If they do not make the right 
choices, the region will continue to fall farther behind, potentially 
increasing the threat to stability. Economic assistance is critical to 
fostering the correct choices and providing the means to implement 
them. By addressing the major development problems of economic 
stagnation, lack of participatory government, competition over water 
resources, and poor health, we can help to create the conditions 
necessary for regional peace and stability.
    To accomplish these objectives, the ANE Bureau is working closely 
with the Department of State to make sure that all our programs in the 
region correspond closely with the objectives of the Middle East 
Partnership Initiative (MEPI) announced by Secretary of State Powell. 
MEPI is an important tool to address the objectives cited in the 
National Security Strategy. USAID is fully committed to using all the 
resources available to us to support this important new initiative.
    Based on USAID's extensive experience around the globe and in the 
region, we believe that MEPI's focus on democracy, economic growth, and 
education is exactly right. And I am pleased to report that our 
programs in the Middle East largely reflect these emphases. Economic 
growth and democracy are two of the three pillars which define USAID's 
mission and shape our organizational structure, while education and 
health are crucial areas of emphasis within the economic growth pillar. 
The recent report commissioned by USAID's Administrator Andrew Natsios, 
``Foreign Aid in the National Interest: Promoting Freedom, Security, 
and Opportunity,'' speaks to the importance of promoting democratic 
governance and driving economic growth as key themes. Education and 
health are ends in themselves, as literacy and mortality rates are key 
development indicators, and essential to support the goals of democracy 
and growth. Democracy, in turn, is critical to good governance.
    USAID's own analytical work points us in precisely the same 
direction as does the philosophy that underlies MEPI. MEPI seeks to 
``bridge the job gap'' by promoting economic growth; ``bridge the 
freedom gap'' by promoting democracy; and ``bridge the knowledge gap'' 
by promoting greater access to higher education. USAID shares the same 
objectives.
    Together with our colleagues at State, we are crafting effective 
approaches for advancing MEPI's goals. We must also be rigorous in 
evaluating new programs to recognize and replicate successful 
approaches and to quickly discard methods that do not work. We must 
develop strategic priorities in each area and guard against a 
proliferation of small and unrelated activities. And we must recognize 
that the unique circumstances in each country require that Embassy and 
USAID officials on the ground tailor the programs to local conditions. 
Success will ultimately be judged by demonstrable impact and results.
    I am pleased to note that a significant number of projects that 
will be directly funded by MEPI this year will be implemented by USAID. 
And I am equally pleased that so many of our projects support the MEPI 
objectives. For example:

   Our health and population programs have women and children 
        as their primary beneficiaries and provide immediate and 
        visible benefits. Programs in Egypt, Jordan and the West Bank 
        and Gaza are extending improved mother and child health care to 
        poor areas. An unhealthy population cannot contribute 
        effectively to economic growth or participate in civil society. 
        Also, unhealthy children cannot learn well in school.

   In Egypt under the New Horizons project, more than 50,000 
        girls--some of whom are out-of-school--have received life 
        skills training along with their ``regular'' curriculum. 
        Interestingly, under Egypt's New Visions project, 1,075 
        Egyptian teenaged boys receive education in anger management, 
        health, leadership and job skills training.

   In Lebanon, approximately 150,000 families, representing 
        about 70% of rural Lebanon and 30% of South Lebanon, benefited 
        from over 1,300 small-scale, environmentally-friendly, income-
        generating activities in over 400 villages representing 40 
        economic ``clusters'' whose diverse communities and 
        municipalities contributed 40% of total costs. Perhaps even 
        more important, multi-ethnic and multi-religious communities, 
        previously in conflict, are beginning to work together for 
        common economic purposes.

   Since its inception four years ago, USAID's Jordan-U.S. 
        Business Partnership has assisted 245 small and medium 
        enterprises with 550 activities, helped establish 8 new 
        business associations, supported the retention or creation of 
        1,000 new private sector jobs, helped develop 430 international 
        business linkages, and assisted with the generation of more 
        than $130 million in Jordanian exports.

   In Morocco, as of October 2002, three USAID-assisted 
        microfinance organizations have a total of 80,000 outstanding 
        loans, bringing the total of loans since the program's 
        inception to 270,000. The majority of these were extended by 
        Al-Amana, a highly successful association started by USAID in 
        1996. Al-Amana has 81 branch offices with over 260,000 loans. 
        Al-Amana also has recovered all its costs since its start-up. 
        Rural communities have benefited extensively from the program. 
        About 11,000 new loans were made to rural areas in the past 
        year.

    We expect that USAID will remain a key implementing MEPI partner in 
the future.
    In sum, USAID believes the Middle East Partnership Initiative is 
timely and well focused on the critical issues in the region. We are 
excited about the prospect of using USAID's extensive expertise and 
resources to aid in the success of this important new undertaking.
    Looking beyond MEPI to the broader USAID program in the region, 
following are examples of some of the challenges we face, and the 
successes we have helped achieve, at the bilateral level. I will start 
with our newest program, our assistance to the people of Iraq as they 
emerge from years of dictatorship, repression, and conflict.
                                  iraq
    USAID is committed to providing assistance to the Iraqi people to 
help them realize a prosperous and just Iraq. The development 
challenges are numerous. Iraq's highly centralized administration has 
resulted in a disempowered citizenry and quite limited opportunities 
for local initiatives. In addition, almost one-third of all children in 
the south and center regions of Iraq suffer from malnutrition. Low 
exclusive breastfeeding rates, high prevalence of anemia among women, 
and a high incidence of low birth weight contribute to Iraq's high 
child mortality rate (131 deaths among children under 5 years per 1,000 
live births). Furthermore, five million people are at risk from lack of 
access to safe water and sanitation. Prior to the 1990s, Iraq had one 
of the best education systems in the Arab world, achieving universal 
primary school enrollment and significantly reducing women's illiteracy 
in the country. Primary school net enrollment, which was close to 100% 
before the Gulf War is down to 76.3%, and secondary school enrollment 
is at 33%. For those children completing primary school, the quality of 
education is so poor and the motivation of teachers (due to low pay) so 
low that many do not have basic literacy and numeracy skills. Iraq's 
infrastructure, which has suffered from years of neglect, has limited 
economic productivity and growth and impaired the delivery of essential 
services.
    USAID plans to address the following objectives:
    Restoring Economically Critical Infrastructure: Assistance will 
rehabilitate critical infrastructure to help maintain stability, ensure 
the delivery of essential services, and facilitate economic recovery. 
Iraq's roads and ports will be rehabilitated to meet the needs of 
citizens and facilitate transportation of humanitarian assistance and 
commercial imports. Potable water and sanitation services will be 
reestablished to prevent disease. Assistance will restore power supply 
to health facilities, water supply facilities, and infrastructure that 
contribute to the local economy and employment generation.
    Supporting Essential Health and Education Services: USAID will 
restore basic health-care services to vulnerable populations, including 
delivery of essential drugs, equipment, and supplies to health 
facilities, and assist in health/disease surveillance. The assistance 
will supply health information/education to the public, build the 
management capacity of Iraqi counterparts, and help to promote 
equitable access to health services. Education assistance will increase 
access to primary and secondary public education for Iraqi children, 
promote retention of students in the classroom, strengthen school 
administration, and develop re-entry programs for out-of-school youth. 
Priority will be given to ensuring that girls and women have equal 
access to education.
    Expanding Economic Opportunity: Assistance will promote a 
competitive private sector, generate employment opportunities, and 
improve agricultural productivity. Activities will extend credit to 
small and micro businesses; develop local, regional and international 
business networks; and provide workforce development and training. 
Agricultural assistance will supply agricultural inputs for the spring 
and winter planting season, and address livestock and poultry diseases. 
Farmers will be empowered to use modern agricultural technologies to 
enhance profitability and competitiveness. Agricultural policies and 
regulations will be introduced. Assistance will help to reestablish the 
Central Bank and Finance Ministry, establish a market-based 
telecommunications system, and stabilize the banking sector as a 
foundation for broad-based growth. Activities (implemented in 
cooperation with the Department of the Treasury) will build the 
capacity of the Ministry of Finance to undertake macro-economic policy 
analysis and budget planning, and support an independent Central Bank's 
capacity to issue and manage domestic currency, promote a competitive 
financial system, establish a market-friendly legal and regulatory 
environment, and develop a successful trade promotion strategy.
    Improved Efficiency and Accountability of Government: USAID will 
foster social and political stability by helping meet citizens' basic 
needs within their communities and by providing Iraqis with an 
opportunity to participate in public decision-making. Activities will 
strengthen the capacities of local administrations to manage and 
deliver services such as potable water, education, and health-care; 
assist the development of NGOs and civil society organizations; and 
support the preparation and implementation of an appropriate legal 
framework for decentralized government.
                                 egypt
    U.S. national interests in Egypt hinge upon a strong bilateral 
relationship to form an effective partnership to combat terrorism, 
resolve regional conflicts and promote regional peace, ensure regional 
security, and promote economic development. A stable and prosperous 
Egypt serves U.S. regional concerns and national security interests and 
provides an important economic partner for trade and investment. In 
keeping with recent U.S. foreign policy imperatives, adjustments to the 
program are adapting to changing global and Egyptian circumstances-
especially following September 11, 2001. In particular, the Mission's 
program is being redesigned to fit the priorities of the recently 
announced Middle East Partnership Initiative (MEPI): economic reform 
and private sector development, education, strengthening civil society, 
and addressing women's development issues.
    In 2002, the GOE undertook a number of economic policy actions 
including: (1) completing an IMF-sponsored financial sector assessment 
program; (2) enacting far-reaching legislation in money laundering and 
intellectual property rights; (3) proposing a comprehensive 
macroeconomic policy reform plan in ``Egypt Policy Paper''; and (4) 
floating the Egyptian pound. The GOE also implemented a major set of 
agricultural policies such as effective water resource management, 
privatization of multiplication and marketing of seeds and promotion of 
transparency in decision making. The USAID funded pilot court model 
that aims at reducing case delays, ensuring the timeliness and quality 
of justice, and introducing modern management and appropriate 
automation into Egypt's courts has been accepted by the Ministry of 
Justice (MOJ) for nationwide replication. Four successful USAID/Egypt 
projects helped equip more than 9,400 teachers, supervisors and 
administrators with improved teaching and classroom management skills.
                                 jordan
    Jordan plays a pivotal role in promoting Middle East stability, 
combating terrorism and serving as a model of reform. His Majesty King 
Abdullah II is leading the Kingdom in economic and political reforms to 
improve the quality of life of all Jordanians, and striving to reach 
peaceful solutions to the region's many challenges. His Majesty's 
Social and Economic Transformation Plan, which shares much in common 
with the Middle East Partnership Initiative (MEPI), is the vision for 
expanding opportunities and benefits to all Jordanians. King Abdullah 
recently announced parliamentary elections for June 17, and the 
government has taken initial administrative steps in this direction--an 
encouraging sign. Also, the king has set aside 6 parliamentary seats 
for women. While somewhat below what women's activists and groups were 
campaigning for, many have welcomed it.
    Jordan faces several unique challenges, which impact greatly on its 
ability to reach its development and reform goals. First, prolonged 
economic effects of September 11th combined with ongoing regional 
conflicts have significantly shocked the economy in which one-third of 
the population lives at or below the poverty line. Second, Jordan is 
one of the ten most water-poor countries on earth. While the population 
is expected to double by the year 2027, water resources are already 
stretched to the limit. Third, this population momentum and lack of 
water lead to serious economic challenges related to the need for the 
economy to expand to provide 46,000 new jobs in 2003 alone. USAID works 
hand-in-hand with the Government of Jordan, local NGOs and the private 
sector in a focused manner targeting water, creating jobs, health and 
family planning, education and civil society based on the Middle East 
Partnership Initiative. All Jordanians benefit from USAID's efforts.
    Assistance to improve the quality of care and facilities of the 
Ministry of Health's Primary Health Clinics has resulted in improved 
care for the clients of all centers and improved facilities for almost 
40 clinics to date. The Watershed Management Program concluded several 
assessments and provided recommendations on issues ranging from water 
quality monitoring to drinking water guidelines, and operations and 
maintenance plant protocols. USAID supported a national initiative to 
re-draw the investment promotion and facilitation institutions. This 
was accomplished in July 2002, and is currently awaiting passage into 
Law. A second important achievement included the passage of a 
Securities Law that meets international standards. With the passage of 
the law, foreign equity investors should be able to enter the Jordanian 
market with greater ease.
                                lebanon
    Lebanon is still recovering from its sixteen-year civil war and 
making slow progress toward rebuilding its civil institutions, 
reestablishing the rule of law, and implementing economic reform. The 
United States has a strong interest in promoting a stable, independent, 
democratic, and economically strong Lebanon at peace with Israel and 
its neighboring states. Lebanon is challenged by the political and 
economic instability of the aftermath of September 11, 2001, as well as 
the continued violence and heated emotions across the region. A 
political leadership often mired in gridlock and strongly influenced by 
other regional players has not been able to provide strong direction 
for economic reform. USAID strategy aims at revitalizing and expanding 
economic opportunities in rural areas, through small-scale 
infrastructure and income-generating activities; promoting democracy 
and good governance, building capacity of local municipalities to plan 
and manage resources efficiently and transparently; and improving 
environmental practices, particularly community-based approaches that 
promote sustainable agriculture and environmental health. As a result 
of the USAID community development program, the social and economic 
situation of more than 430 communities has improved. More than 70% of 
the rural population, of which 110,000 live in South Lebanon have 
access to improved agricultural, social and environmental 
infrastructure (irrigation, agricultural roads, schools, dispensaries, 
water storage, sewer treatment and solid waste treatment). In FY 02, 
66,000 families were reached and an additional 2,900 hectares of land--
out of a total of 27,000 hectares--were improved to yield high-value 
crops and forage for cows, which resulted in about $100 per month 
savings for each farmer.
                                morocco
    Morocco has made great gains in recent years, but still faces 
formidable challenges. Among the most important is the rising poverty, 
due to high levels of unemployment and a labor pool largely unprepared 
for today's and tomorrow's job market. Morocco's citizenry is 
appreciative of democratic reforms and improved governance, but wants 
more. To help Morocco address its development challenges, USAID is re-
orienting its program in Morocco to make economic growth--and, in 
particular, job creation--the centerpiece of our strategy. The focus of 
this new strategy will be on activities directly linked to job 
creation. As we develop our new strategy for assistance in Morocco, we 
will work with the Moroccan government to strengthen its economic and 
educational reform programs which will enable it to benefit more fully 
from the U.S.-Morocco Free Trade Agreement now being negotiated.
                           west bank and gaza
    Escalating violence, terrorism, closures and curfews have resulted 
in the virtual collapse of the Palestinian economy and a growing 
humanitarian crisis. GDP has declined by 46 percent between 2000 and 
2002. The number of Palestinians with incomes below the poverty line of 
$2 per day is estimated at more than 70 percent of the population, 
while unemployment levels have climbed from 20 percent to more than 50 
percent since the start of the Intifada. Acute and chronic malnutrition 
have increased to epidemic proportions, and psycho-social problems 
affect large sectors of the population. The most important challenges 
that USAID confronts is meeting the immediate and on-going emergency 
humanitarian needs of Palestinians while not losing focus on medium to 
long term development goals. Given the continued political stalemate, 
and the growing humanitarian crisis, USAID anticipates providing vital 
emergency and humanitarian assistance for at least another 12-18 
months. USAID has programmed approximately $35 million since April 2002 
towards urgent humanitarian health, food and water activities to meet 
basic human needs of the Palestinian people. USAID partners are 
actively providing psychological trauma support to children, while 
training parents and teachers regarding counseling skills and 
techniques. Medical supplies, equipment, and pharmaceuticals are being 
procured to fill commodity gaps within the health system. At the same 
time, USAID is pursuing a robust medium to longer term development 
program focused on private sector revitalization, political and 
economic reform consistent with the policy priorities of the 
administration, and water infrastructure to meet this basic human need. 
USAID is working with NGO partners to monitor water supplies in more 
than 200 villages. Funds are available for immediate interventions when 
the water supply is dangerously limited, or where simple steps could 
greatly increase the safety of the water supply (e.g., supplying 
chlorine disinfection tablets, providing water in bottles or tanker 
trucks). Hundreds of destroyed roof-top water tanks have been replaced, 
renewing household water storage. USAID is also installing or repairing 
well pumps across the West Bank to increase water supplies, especially 
in rural areas and in villages most isolated by the closures.
                                 yemen
    U.S. assistance to Yemen is essential for furthering U.S. 
counterterrorism goals, and provides vital aid to one of the world's 
poorest nations. Over the past year USAID established a new program to 
improve basic health and educational programs in tribal areas in Yemen 
and plans to re-open an office there by the summer. Already, USAID-
funded programs have made a significant impact on increasing voter 
registration and enhancing professionalism in the main political 
parties for the upcoming parliamentary elections. With ESF funding in 
the coming years, USAID plans to further support improving the 
educational status and health conditions of Yemenis, particularly 
women, and increasing income earning opportunities of people in poor 
tribal areas.
                               south asia
    As we know from recent events in Afghanistan and along the Indo-
Pakistan border, the threats posed by terrorism, violence, and the 
spread of weapons of mass destruction are very real to the people of 
South Asia. Terrorism, ethnic and religious conflict, and the ever-
present risk of nuclear war present imminent dangers to the South Asian 
subcontinent.
    USAID's assistance programs play an important role in addressing 
and preventing the many threats to U.S. interests posed by terror, 
violence, weapons, disease, crime, drugs, and hate. In the words of 
USAID Administrator Andrew Natsios, ``this Administration has taken 
development off the back burner and placed it squarely at the forefront 
of our foreign policy.''
    Although the countries of South Asia are not eligible for MEPI, the 
Asia Near East Bureau is dedicated to applying the principles of the 
MEPI and the Millennium Challenge Account to our programs in South 
Asia. To be sure, not all of the governments in South Asia would meet 
the MCA high standards of good governance and economic openness today. 
However, it is our goal to work with governments and the people 
themselves to create conditions in which all South Asian countries can 
some day meet those standards.
    Among our South Asian programs, Sri Lanka stands out as a nation 
emerging from decades of horrific ethnic conflict with great promise 
for development. There are a few troubling challenges as well. The 
Maoist insurgency in Nepal has caused us to reevaluate and redirect our 
program there to address the causes and impact of the conflict. In 
fact, we are working closely with our Mission Directors and Ambassadors 
across the region to re-evaluate whether our aid programs adequately 
address today's challenges. If they do not, we must either reshape or 
drop poorly performing programs. This is a continuing and evolving 
process that takes on new urgency in light of transnational threats 
such as terrorism.
    In addition to our development assistance work, USAID's Office of 
U.S. Foreign Disaster Assistance is emphasizing training and 
preparedness programs in South and Southeast Asia to limit the economic 
and social impact of future natural disasters. Two key goals are to 
enhance local response capacities and to decrease countries' reliance 
on international emergency assistance.
    Following is a description of some of the key programs in which we 
are now engaged in South Asia, and of some of the successes we've 
achieved--and the challenges we still face.
                              afghanistan
    Afghanistan was the number one recipient of U.S. humanitarian 
assistance before September 11, 2001, and America continues to lead the 
international community in providing assistance to Afghanistan today. 
Poverty, famine, a devastating drought, and years of war and civil 
strife have created a humanitarian crisis in Afghanistan, which was 
aggravated by years of Taliban misrule. The people of the United 
States, through USA]D, have responded.
    USAID is playing a leading role in meeting the Afghans' urgent need 
for food, water, shelter and medicine. Since September 11, 2001, the 
United States has provided nearly $900 million for Afghan relief and 
reconstruction. In addition to the well-publicized schoolbook and seed 
distribution programs, USAID has:

   Reopened the Salang Tunnel and made preparations for keeping 
        it open during the winter. More than 1,000 vehicles and 8,000 
        people use the tunnel every day. Seventy percent of the fuel 
        for Kabul passes through it.

   Completed demining, grading, and leveling through 51 miles 
        of Kabul-Kandahar-Herat Highway, and will begin asphalting 
        soon.

   Completed over 6,100 water-related projects, including 
        wells, irrigation canals, karezes, dams, reservoirs, and 
        potable water systems.

   Supported over 4,225 spot reconstruction projects such as 
        government buildings, schools, roads, bridges, irrigation 
        systems and other community projects that provide local workers 
        with thousands of days of labor.

   Will rebuild thousands of schools, irrigation systems, and 
        other vital infrastructure in villages adjacent to 
        reconstructed highways.

   Is rehabilitating 2,500 miles of road, is reconstructing 31 
        bridges, and has kept open an additional three mountain passes.

    In addition to assisting or facilitating linkages between local, 
regional and national governments with communities and NGOs in various 
priority regions of Afghanistan, USAID has also been providing direct 
support to the new Government of Afghanistan.
    To date, USAID's Office of Transition Initiatives (OTT) has 
provided 50 small grants to over 26 different Afghanistan Government 
ministries and offices, totaling an estimated $1.9 million. OTI 
programs in Afghanistan are providing valuable reconstruction and media 
assistance to government institutions in Kabul, but more importantly to 
local communities in many areas outside the capital. The programs have 
extended the reach and influence of President Karzai's government to 
the rest of the country by establishing radio communications and a 
government pouch system. Community Development projects also assist 
local municipalities in both working with local communities to identify 
priority reconstruction projects, and establishing coordination 
mechanisms to communicate needs with and receive direction from the 
central government.
    USAID has provided additional support to the government by funding 
key consultants to President Karzai's office (Public Information 
Officer), the Ministry of Women's Affairs (Special Consultant to the 
Minister), and the Ministry of Agriculture (through implementing 
partner consultancies).
    In light of all these accomplishments, I want to thank this 
Committee for its support of the Afghan Freedom Support Act. Absent 
this key piece of legislation, the Afghan people would face a far 
different, and much less hopeful future than they do today.
                                pakistan
    USAID opened a field mission in Pakistan in June, 2002 after 12 
years of rupture following the imposition of sanctions in 1990. Our 
goal is to strengthen Pakistan's capacity to combat terrorism by 
encouraging just governance, investment in people, and economic 
freedom. These programs are just getting off the ground now, so we 
cannot gauge their full effectiveness yet. However, the leadership and 
commitment of our Pakistani counterparts are very positive signs of 
future success.
    Education: Our highest priority is investing in the people of 
Pakistan. The illiteracy rate is 53 percent, one of the highest in the 
region. Nearly 40 percent of young people aged 15 to 20 are unemployed. 
As seen by the dramatic increase in private schools and madrassahs, the 
demand for education is strong. We need to help Pakistan meet this 
need, thereby also reducing the demand for madrassahs headed by 
uneducated extremists. Right now, USAID is enhancing teacher training 
for both public and private primary schools. We are providing funds to 
improve curricula, encouraging community involvement in the local 
schools and supporting adult and youth literacy programs.
    Governance: In October 2002, Pakistan held a national election 
which restored civilian government with a Prime Minister and National 
Assembly, but democratic institutions in Pakistan remain weak. Our 
focus is on strengthening democratic institutions and political 
parties, including the National Assembly and locally-elected 
legislatures. We also have a tremendous opportunity to work with 
communities and local, provincial and national elected officials on 
local development problems.
    Health: Infant mortality rates in Pakistan are 83 per 1000 live 
births, which compares poorly with other countries in the region. Only 
31 percent of married women seek prenatal care. In addition, Pakistan's 
annual population growth rate is one of the highest in the world at 2.8 
percent. To address these issues, USAID has formed a partnership with 
the U.K.'s Department for International Development (DFID). Our work 
will focus on maternal and child health, family planning, AIDS 
prevention, and tuberculosis control at the provincial and community 
levels. Meanwhile, DFID will support the Federal health ministries.
    Economic Growth: 40 percent of Pakistan's 140 million people live 
below the poverty line. Recent economic growth rates have been 
disappointing, and low levels of foreign investment have made the 
situation worse. To stimulate growth, we are implementing a two-pronged 
approach. At the national level, our goal is maintain macroeconomic 
stability, reduce Pakistan's foreign debt and encourage the Pakistan 
Government to meet IMF goals. On a local level, USAID will promote 
microenterprise to create jobs in some of Pakistan's poorest and 
hardest-to-reach regions.
    Overall, we have tailored the USAID program to Pakistan's primary 
development issues and have used the ESF cash transfer mechanism to 
address Pakistan's foreign debt. The FY 2003 transfer of $188 million 
will be used to buy down $1 billion in debt. The FY 2002 transfer was 
used to secure Pakistani spending in the social sector.
                               sri lanka
    Sri Lanka is another clearly defined example of putting the 
Administration's policies of accountable foreign aid to work. Until 
last year, Sri Lanka was on the road to becoming a non-presence post. 
In response to the promising cease fire and peace process there, we are 
now moving swiftly to accelerate our investments. We have reversed 
staffing reductions and requested additional resources in FY 2004 in 
recognition that, at last, the country is on the right track.
    In the near term, a peacefully negotiated settlement of the 
conflict is essential in order to secure a healthy environment for 
economic growth and promote U.S. trade interests. USAID's humanitarian 
assistance and longer-term economic reforms are designed to ensure the 
``peace dividend'' is distributed equitably among the peoples of Sri 
Lanka. Successfully reintegrating the thousands of Internally Displaced 
Persons and refugees from India into their home communities and 
resettlement villages is a priority. Homes, schools and hospitals need 
to be rebuilt. Water and sanitation infrastructures must be 
rehabilitated, and we need to make sure people have ways to earn a 
living and support their families.
    USAID's FY04 program will target three main areas: increasing the 
country's competitiveness in global markets, building constituencies 
for peace through transition initiatives, and democracy and governance 
reform. The remaining funds will be directed to humanitarian assistance 
and to regional environmental activities.
                                 nepal
    Today the situation in Nepal is more hopeful than it has been in 
over a year. Just last week, representatives of the Maoist rebel group 
and the Government agreed to a Code of Conduct, a peaceful foundation 
for future negotiations towards a longer-term political settlement to 
the conflict. A few months ago, however, the future of Nepal appeared 
bleaker. A Maoist insurgency practiced unspeakable brutality, 
intimidation and murder, resulting in over 7,000 deaths since it began 
in 1996. The insurgents control a large share of the countryside, and 
have benefited from popular outrage over years of government corruption 
and denial of service to the people.
    The destructive effects of the Maoist insurgency, however, should 
not distract attention from the gains Nepal has made over the past 
fifty years. It has transformed itself from an isolated medieval 
kingdom to a constitutional monarchy. Child mortality and fertility 
rates have significantly decreased. Literacy and food security have 
improved.
    Yet these development gains are unevenly distributed. Poor 
governance and corruption, the forbidding mountainous terrain and lack 
of basic infrastructure, like roads, have led to wide disparities 
across regions and ethnic groups and between rural and urban 
populations. These inequities provided a fertile ground for the 
insurgency.
    Our greatest challenge is to meet the immediate needs of those 
communities most affected by the conflict, former combatants and 
victims of torture, without losing sight of the Government's needs 
through successive stages in the peace process. USAID plays an 
important part in the USG's larger strategy in Nepal. Our emphasis is 
on health, economic security and governance reform to combat the 
poverty and disenfranchisement that facilitated the six-year 
insurgency. Our task is to expand opportunities for employment and 
generate growth in the private, trade, agriculture, and energy sectors. 
We will reinforce that work with efforts to improve public sector 
management to deter corruption and strengthen the rule of law.
                               bangladesh
    Bangladesh is one of a handful of moderate, democratic Islamic 
nations in the world today. It is also an ally in the U.S. Government's 
efforts to combat terrorism. Promotion of democracy is an important 
U.S. objective in Bangladesh, since achieving and sustaining economic 
growth is based upon a strong democratic system of government. The need 
to combat HIV/AIDS is now a high level U.S. interest because the 
country appears to be on the brink of a serious HIV/AIDS outbreak. 
While HIV/AIDS prevalence is low today, Bangladesh shares most of the 
characteristics of high prevalence countries. Action is needed now to 
avoid the politically, socially and economically destabilizing affects 
of a widespread epidemic.
    This year Bangladesh exceeded USAID's performance targets in 
economic growth. Other donors, the business community, and the 
Bangladeshi Government view USAID's small business and agribusiness 
projects as leaders in innovative, business-driven approaches. 
Moreover, USAID was able to respond to several opportunities during the 
past year by initiating new interventions in the areas of information 
and communications technology, bank supervision, a national enterprise 
survey; a new trade leads facility, and a new Government investment 
strategy that complements longer-term activities. The U.S. Mission 
continues to work with the Government of Bangladesh to support a 
decision to export Bangladesh's abundant gas. Meanwhile deregulation of 
the power sector is rapidly proceeding.
    Unfortunately, governance problems continue to hamper growth. For 
the second year in a row, Bangladesh was ranked as the most corrupt of 
102 countries surveyed in Transparency International's annual 
corruption perceptions survey. Power and resources are highly 
centralized, leaving local government bodies with little ability or 
authority to control decisions that affect their constituencies. 
Political parties need support to transform bitter rivalry into 
constructive opposition. Only then can the Parliament focus on the many 
complex national issues facing the Bangladeshi people. Elections will 
be held in 2006; now is the time to start providing constructive 
assistance to level the playing field.
    With limited prospects for the Government's real assistance in this 
area, USAID seeks to mobilize civil society. Our goal is to build 
demand for policy reform in the areas of local governance, 
parliamentary and political processes and human rights. This work has 
already met with some success for better informing the public. With 
three years of USAID support, Transparency International Bangladesh 
(TIB) has become a regional leader, coordinating the 2002 household 
corruption survey for not only Bangladesh, but also four other South 
Asian countries. We are also working at the community level to improve 
basic education, introduce innovative learning techniques, and 
integrate family planning and promote health to reduce long-term 
poverty and encourage economic growth and democracy.
                                 india
    India has the potential to be a catalyst for economic growth and 
development in an unstable region, and is a key U.S. ally in the war on 
terrorism. At the same time, India--the world's largest democracy of 
1.1 billion people--is home to over 300 million people living in abject 
poverty (more than Africa and Latin America combined).
    USAID's program in India advances U.S. national interests: economic 
prosperity through opening markets; global issues of population growth, 
infectious diseases, and climate change; democracy concerns of 
alleviating poverty, reducing malnutrition, and improving the status of 
women; and enhancing India's ability to save lives, reduce suffering, 
and recover faster after natural disasters.
    One of our biggest successes has been in reducing CO2 
emissions from the supply side. Now USAID is focusing on the demand 
side of the energy equation-distribution reforms. Policy changes at the 
local level, by providing consistent power for individuals and 
businesses, produce immediate results and improved revenue collection. 
Such reforms will also reduce state subsidies, leaving more budget room 
for badly needed social sector investments.
    USAID is providing high-level technical assistance to the 
Government of India in the area of economic growth. At the national 
level, our focus is on reforming state fiscal policies and private 
pensions. At the local level, we are helping local governments finance 
public infrastructure and improve policy. We are also emphasizing 
technology, trade and resource-allocation initiatives.
    India faces severe health challenges: over 4 million people are 
infected with HIV/AIDS; polio is re-emerging in the Northern portion of 
the country; and each year India has more new cases of tuberculosis 
(1.9 million) than any other country. USAID has ongoing activities in 
all these areas. Our work in the State of Tamil Nadu has successfully 
tempered the growth of HIV/AIDS, setting a model for others in India.
                       east asia and the pacific
    As our nation is fighting terrorism in Iraq and Afghanistan, we 
must continue to pay attention to terrorism and other threats to 
stability in East Asia. Countries like Indonesia and the Philippines 
are also front line states in the war on terrorism. By strengthening 
economic reforms, democracy, education, and health, USAID programs help 
address the threat of terrorism directly in East Asia and the Pacific.
    We are on the front lines of the war on terrorism in Southeast 
Asia. In the Philippines and Indonesia, USAID support has enabled the 
governments to take a stand against terrorism within their borders. 
USAID has provided viable alternatives for people who, unable to 
fulfill basic social and economic needs, might otherwise be drawn into 
terrorist groups, and has helped the Philippines and Indonesia to take 
policy decisions and enforce regulations that directly fight terrorism. 
For example, in both countries, USAID has contributed to successful 
anti-money laundering legislation.
    At the same time, the variety of conditions across the different 
countries in East Asia means that we must tailor our response to the 
needs of each country in situations as varied as East Timor, Burma, 
Vietnam, and Mongolia.
    In all of East Asia, USAID's programs address the conditions that 
provide fertile ground for terrorism: poverty, disease, unemployment, 
lack of education, economic decay, failing governments, political 
disenfranchisement, disrespect for human rights, and local conflict. 
USAID demonstrates to the people of East Asia that the United States is 
committed to improving their lives for the long term.
    Indonesia, the Philippines, and East Timor represent countries 
where we are working with governments committed to a democratic path, 
yet which are facing serious internal conflict issues and economic 
struggles. We are providing direct support in addressing conflicts, for 
democratic transition and improved governance, and for economic reforms 
to stimulate trade and investment. We are also providing significant 
support for improved health and for better environmental practices that 
lead to better health and sustainable economic opportunities.
    In mainland Southeast Asia (Burma and the Burma/Thailand border, 
Cambodia, Vietnam, and Laos), we are working in countries with 
governments that have not shown that they are firmly committed to a 
democratic future. We have therefore designed our strategies to 
stimulate democratic change, working mostly through non-governmental 
organizations. Our programs in mainland southeast Asia focus largely on 
democratic transition, corruption and transparency, health (including 
HIV/AIDS and other infectious diseases), environment, education and 
trafficking in persons. These are critical themes in all of the 
countries.
    Democracy and good governance is a common thread running through 
almost all our programs in East Asia. Corruption drains East Asian 
economies of millions each year. USAID helps governments to address 
corruption head-on, while also helping civil society to pressure 
governments to be transparent and accountable. As Cambodia, Indonesia, 
Mongolia, and the Philippines move toward elections in 2003 and 2004, 
the success of the incumbent governments in addressing corruption will 
become increasingly important.
    Because East Asia still has not completely recovered from the 1997 
financial crisis and must also deal with the current world economic 
downturn, its governments are having trouble staying the course on the 
economic reforms that would have a lasting effect. However, given the 
world economic situation, East Asia's performance, as a whole, is not 
bad. USAID is helping with key economic policy decisions and 
implementation, including bank restructuring in Indonesia, Philippines, 
Mongolia, and East Timor. We are helping Vietnam to implement the 
Bilateral Trade Agreement with the U.S. in ways that break new ground 
in strengthening the rule of law and improve government transparency.
    The environment is another key area for USAID in East Asia. East 
Asia is home to some of the world's most endangered forests and 
wildlife. Population growth, poverty and corruption are generating 
unsustainable demands on natural resources in the region and 
exacerbating conflict. In response, we are assisting local governments 
to improve resource conservation through increased transparency, 
accountability, and improved management. In the Philippines, USAID is 
supporting local governments in Mindanao and surrounding conflict-
affected areas to reduce illegal logging and destructive fishing. The 
coastal patrols have not only reduced illegal fishing, but also have 
improved efforts to control smuggling, trafficking and terrorism. We 
have also integrated the U.S.-Asia Environmental Partnership into our 
bilateral programs to help continue to promote public-private 
partnerships to address key urban environmental issues such as air 
pollution. For example, in Indonesia, USAID, working with the private 
sector, will reduce air pollution through improving the public bus 
system and introducing cleaner public buses. Air and water quality are 
important factors in improving infant and child mortality rates.
    Trafficking in persons is one of the most critical and sad areas I 
would like to highlight. The amount of trafficking from and within 
Southeast Asia is alarming. Burma, Cambodia and Indonesia are currently 
ranked at Tier 3, the worst ranking given by the State Department's 
Global Trafficking in Persons Report. USAID, in partnership with State, 
is committed to preventing trafficking, protecting the victims, and 
supporting efforts to prosecute offenders. We have gained experience in 
this area in recent years and are establishing resourceful partners on 
the ground. Just last week the prosecution of two sex traffickers in 
Cambodia resulted in fifteen-year sentences and required compensation 
to the victims. State Department and USAID support enabled the 
Cambodian Human Rights Organization to present the case. The State 
Department and USAID want to keep up the momentum and expand on such 
progress.
    Within this broader context, following is a description of some of 
the key programs in which we are now engaged in East Asia, and of some 
of the successes we've achieved--and the challenges we still face.
                               indonesia
    Indonesia, the largest Muslim country in the world, plays an 
important role in U.S. efforts to combat terrorism and maintain 
political and economic stability across Southeast Asia. Indonesia is 
implementing a major transformation of its political and economic 
landscape while simultaneously addressing multiple crises--from 
terrorism and inter-ethnic, sectarian and separatist violence to 
endemic corruption and rising poverty.
    Indonesia has USAID's largest aid program in East Asia. We have 
reconfigured the program significantly to respond better to the post-9/
11 needs, helping moderate Islamic groups to have a bigger voice, to 
address financial crimes, and to improve basic education. We have 
played a key role in Indonesia's dramatic move to democracy and 
decentralized local government, and in restoring macroeconomic 
stability. We have a comprehensive program improving people's lives 
every day through health, environment, livelihoods, education, and 
political participation. We are working in partnership with the private 
sector to fight illegal logging. We have also ensured a protected 
habitat for orangutans, one of the world's most endangered species.
    We are deeply involved in three important developments in Indonesia 
today:

   Signed on December 9, 2002, Aceh's fragile Cessation of 
        Hostilities Agreement has been successful in greatly reducing 
        the armed conflict. We supported the peace dialogue that led to 
        the agreement and are the lead player in the monitoring. 
        Security throughout the province has improved dramatically and 
        we are working with other donors to ensure reconstruction and 
        responsible governance under special autonomy.

   Indonesia continues to recover from the October 12, 2002 
        Bali bombings that killed over 200 people, including seven 
        Americans. The economic impact devastated tourism revenues. 
        USAID provided rapid emergency response that has helped the 
        local economy to recover, and has worked with local groups to 
        ensure that there are no outbreaks of tensions. Bali continues 
        to display a remarkable coherence and lack of conflict. 
        Generally, the trend line is positive if the tourist industry 
        continues to recover.

   Preparations are underway for historic direct elections in 
        Indonesia in 2004, for local and national legislative 
        positions, President and Vice President, and the Parliament. We 
        are working with partners like IRI, NDI, and IFES towards 
        smooth, free and fair elections and full and productive 
        participation by all parties.
                              philippines
    The Philippines is on the front lines of the war on terrorism in 
Southeast Asia. Beginning in FY 2002, approximately 60% of our 
bilateral budget has been directed to addressing social and economic 
conditions in Mindanao that would make its Muslim population less 
vulnerable to terrorist influence. USAID-managed assistance has already 
successfully integrated 13,000 former Moro National Liberation Front 
(MNLF) combatants, is training an additional 8,000 MNLF former 
combatants in 2003, and will train the remaining 4,000 in 2004. 
Complementary programs are helping Mindanao to put into place better 
health services and educational programs, as well as improve 
infrastructure and public administration in the Autonomous Region of 
Muslim Mindanao (ARMM).
    In Mindanao and elsewhere in the Philippines, USAID's assistance in 
health builds on the Government's devolution of its health services to 
local government levels for general health care, TB and malaria 
management, immunizations, micro nutrient supplementation, and family 
planning. USAID also focuses on stimulating the private sector to play 
a greater part in improving access to quality health services.
    The Philippines' ability to address conflict in Mindanao is 
undermined by its worsening economic and fiscal performance. For 
example, in 2002, the public sector deficit was an alarming six percent 
of GDP, due to falling tax collections. USAID's Economic Governance 
program addresses the issues most fundamental to ending the 
Philippines' pattern of stunted economic growth, conflict and 
corruption. In 2003-04, special attention is being given to improving 
tax administration, due to the overwhelming importance of fiscal 
revenue to economic stability and social infrastructure as well as 
widespread perception of tax administration as a sore point in 
Philippine corruption. Other areas of assistance include procurement 
reform, customs reform, public expenditure reform, improving in-court 
and out-of-court judicial systems, implementation of Anti-Money-
Laundering legislation and protection of intellectual property rights.
    Governance is also weak in the regulation of public utilities and 
environmental management. USAID's program to protect natural resources 
includes strengthening the ability of national and local governments to 
address critical threats to marine and forest resources. USAID's work 
in energy and air quality aims to 1) establish an open, competitive 
market for generating and distributing electricity; 2) electrify 
communities of former rebel soldiers using renewable energy in order to 
promote peace and raise their standards of living; and, 3) reduce 
vehicle emissions to improve public health.
                        east timor (timor leste)
    East Timor is the world's newest nation, where USAID programs 
strongly support U.S. interests of democracy, economic development, and 
regional stability. We are playing a critical role in this exciting 
time for East Timor. We provide direct support to the Timorese in 
establishing a democratic government: in drafting and publicly vetting 
a constitution, in holding free and fair elections for the Constituent 
Assembly and President, in drafting and holding public hearings on 
critical legislation, and in establishing an independent media and an 
effective regulatory body to oversee it.
    But the majority of Timorese are still very poor and live mostly in 
rural areas. Today, two in five persons do not have enough food, 
shelter or clothing. One in two have no access to clean drinking water, 
and three in four have no electricity. USAID worked in East Timor prior 
to independence, generating rural employment and raising rural incomes 
for 20 percent of East Timor's coffee farmers, in a country where 43 
percent of the rural population farms coffee. USAID-supported coffee 
cooperatives broke the monopoly of the Indonesian military on coffee 
purchasing, enabling the Timorese to find better markets. Our economic 
development work is also improving food security and increasing rural 
employment through agricultural diversification and microenterprise 
development.
    We are contributing $12 million over three years to the central 
government for implementation of key elements of its national 
development plan. We are the second largest bilateral donor, after 
Australia. Donor coordination is good, and essential in this new 
nation. We are committed to a democratic and economically prosperous 
future for East Timor and will need to responsibly reassess our levels 
of assistance as expected Timor Gap oil and gas revenues come on line 
in future years.
    In mainland Southeast Asia (Burma and Burma/Thailand border, 
Cambodia, Vietnam and Laos), we are working in countries with 
governments that have not shown that they are firmly committed to a 
democratic future. We have designed our strategies in each country to 
provide appropriate stimuli towards democratic change, working mostly 
through non-governmental organizations. Our programs in mainland 
Southeast Asia focus largely on democratic transition, health 
(including HIV/AIDS and other infectious diseases), environment, 
education and trafficking in persons. These are critical themes in all 
of the countries.
                                cambodia
    Cambodia is one of the most compelling cases for development 
assistance. It ranks among the poorest countries in the world, with an 
annual per capita GDP of $280, low literacy rates, poor health status, 
and the highest official HIV/AIDS infection rate in Asia (although 
Burma's actual rate may be higher). Cambodia suffers from the legacies 
of war, genocide and corrupt government. U.S. objectives in Cambodia 
include promoting democratic practices, good governance, protection of 
human rights, and fighting disease and poverty.
    We are there as the country takes tentative steps towards a 
democratic future. This year our focus is on the July 2003 national 
elections. We are helping the democratic opposition's ability to 
participate effectively in elections and are working to promote an 
environment in which voters can make informed decisions without fear of 
intimidation or reprisals. Years of USAID support have fostered the 
evolution of strong, motivated NGOs, and now we are working to 
strengthen their capacity to promote democratic reforms at the national 
level. After the elections, our support will continue to help build the 
capabilities of the parties to develop leadership and messages. USAID 
will help the civil society organizations we support better identify 
and expose corrupt practices and promote active engagement by the 
public to monitor government activities and advocate for change, 
especially in the realm of anti-corruption. USAID also supports 
indigenous business associations which advocate for improvements in 
governance and transparency--reforms that will be necessary for 
Cambodia's accession to the WTO.
    Cambodia's health services are still very weak, so we are focusing 
on the provision of services. This includes rehabilitation of severely-
malnourished children, vitamin distribution, life-saving skills 
training for midwives, bednet impregnation to prevent malaria, 
improving the availability of treatment for tuberculosis, birth 
spacing, and immunization outreach. The most significant investment is 
being made to prevent HIV/AIDS and care for its victims. Cambodia is 
one of USAID's rapid scale-up countries for HIV/AIDS programming. Since 
2000 we have made significant progress in moderating the spread of HIV 
in Cambodia.
    Strong and relevant education is the key to the future of Cambodia. 
USAID has begun to develop a program to improve the quality and 
relevance of Cambodian education, with the aim of keeping children in 
school longer, especially girls.
    Consistent with appropriations legislation, we do not contribute 
funds to any entity of the Royal Cambodian Government (RCG), and we 
only engage directly with the Government in the areas of HIV/AIDS, 
primary education, trafficking, and maternal and child health. Although 
our principal partners in Cambodian development remain international 
and Cambodian NGOs, this increased flexibility in recent years to work 
with certain parts of the Government is enhancing our effectiveness.
                                vietnam
    Vietnam, a country of 80 million people, is key to regional 
stability in a mainland Southeast Asia that is currently more unstable 
than it has been for a while. Our interests lie in helping Vietnam make 
the transition to a more open and market driven economy. This is an 
economy that has the potential to take off. We want Vietnam as a 
friend; as a trading partner and market for U.S. goods. It also 
occupies a strategic position related to China. Vietnam, at the same 
time, is a very poor country with great needs for our support.
    The main thrust of the USAID program is support for the 
implementation of the U.S.-Vietnam bilateral trade agreement. Since the 
signing of the agreement in December 2001, imports from the U.S. have 
grown by 26 percent and exports to the U.S. by 129 percent. Our 
assistance, helping with the laws and regulations to enable smooth 
international trade and investment, improves the rule of law (related 
to business) and makes government more transparent. We also provide 
assistance to prevent HIV/AIDS, improve and increase services to the 
disabled, and protect the environment.
    Despite the government's continued hold on power, the younger 
generation is growing in power. More than 50 percent of the population 
is too young to remember the war. They are interested in our support, 
our culture, language, and our goods. They welcome USAID assistance at 
the official and grassroots levels. Cooperation is positive. The 
Vietnamese have recently asked for USAID assistance with developing 
their new securities law and with a new groundbreaking NGO law. Our 
assistance in economic governance has the potential to grow into more 
positive work in the rule of law, democracy and civil society. This is 
a mutually advantageous relationship we should continue to build.
                                 burma
    Burma is an authoritarian state, with serious health, economic 
indicators, a drug trade, and rampant human rights abuses. U.S. 
interests lie in promoting democratic practices and universal human 
rights. Our Burma program is coordinated closely with the State 
Department. We provide significant humanitarian assistance to displaced 
Burmese on the Thai-Burmese border, and help groups to promote 
democracy inside and outside Burma. Our implementing partners have 
established successful education and health programs on the border; 
refugees are receiving good health care, and children are getting an 
education. Our assistance supports scholarships to provide higher 
education to young Burmese who will help develop a future democratic 
Burma. Internews has helped opposition groups get out their democratic 
messages with better media products. Last year we began to address the 
serious HIV/AIDS situation in Burma, where the infection rates, 
estimated as high as four percent, may be the highest in all of Asia. 
We hope to expand this program in FY 04.
                                  laos
    U.S. interests in Laos are largely humanitarian. Serious human 
rights concerns, widespread acute poverty and disease are major 
concerns. USAID has a modest program in Laos. We are contributing to 
employment and economic growth in targeted provinces through a silk 
production project. We are educating Lao children about unexploded 
ordnance (UXO), particularly in the most affected provinces. We are 
also training emergency medical personnel to deal with accidents from 
unexploded ordnance. With unexploded bombs from the Vietnam war era 
still on the ground in Laos, in some parts of the country a child is at 
risk simply playing outdoors. Through our assistance, children are able 
to identify UXO and know what to do to not get hurt and to safely 
report the danger. While HIV/AIDS is not yet a severe problem in Laos, 
we are working hard to make sure it doesn't become one. Maternal and 
child health is a major concern we are beginning to address, especially 
for Laos' most vulnerable children.
                                mongolia
    Mongolia is a separate case. The government has made the transition 
to democracy and a market economy over the past eleven years, and USAID 
is instrumental in seeing that those transitions are successful and 
provide equitable benefits to the Mongolian people.
    We are very proud of our Mongolia program. We have helped to 
rebuild the financial sector, guide responsible privatization, automate 
the courts, and improve herders' livelihoods. There is still work to be 
done. The majority of the population is poor, lives in remote rural 
areas, and is cut off from many of the benefits of the country's 
advances. The judicial sector is weak and vulnerable to corruption. The 
economy is far from thriving. The political opposition is weak. Slums 
outside urban areas are growing, with few employment opportunities. We 
are addressing all these areas with a well-integrated, streamlined and 
high-performing program.
                              china/tibet
    USAID is involved on a limited scale in China. At the request of 
the State Department, we are managing small programs in rule of law and 
in Tibet (sustainable development, environmental conservation, and 
cultural preservation). We are also beginning a modest amount of HIV/
AIDS prevention work in two southern provinces as a part of our Greater 
Mekong HIV/AIDS regional strategy.
                           regional programs:
Thailand
    We have no bilateral aid programs in Thailand, but there are 
several regional programs operating in the country. We are opening a 
new regional support office that will support our bilateral and 
regional programs (HIV/AIDS, anti-trafficking, environment, and 
economic growth) in mainland Southeast Asia as well as our Burma border 
activities. The programs in Vietnam, Laos, and the Burma border, where 
we currently have no direct hire presence, will be managed from 
Bangkok. Our fast-growing HIV/AIDS assistance in the region will be 
directed from this regional platform. The regional office will also be 
the home for the regional Office of Foreign Disaster Assistance staff.
ASEAN
    USAID is playing a key role in support of the U.S. Government's new 
ASEAN Cooperation Plan. We have arranged for Information, 
Communication, and Technology (ICT) assistance to the ASEAN Secretariat 
and key ASEAN members to enable them to communicate effectively within 
the Secretariat and among member nations via the Internet. We are also 
providing assistance to the Mekong River Commission to address critical 
regional environmental management issues. We aim to work with the State 
Department and ASEAN to address the alarming trafficking in persons 
problems in the region through a regional, intergovernmental approach.
Regional HIV/AIDS and Infectious Diseases
    HIV/AIDS is an extremely serious issue for USAID in East Asia. 
While HIV prevalence is still very low compared to sub-Saharan Africa, 
HIV/AIDS crosses borders easily in this part of the world and has 
reached adult prevalence rate of 2.7 percent in Cambodia and is 
estimated to be four percent in Bunna. There are rates as high as 80% 
among prostitutes, and 93% among intravenous drug users in some parts 
of the region. Given these factors, and East Asia's large population, 
HIV/AIDS is a time bomb. We have initiated a Greater Mekong HIV/AIDS 
strategy, which includes Vietnam, Laos, Thailand, Burma and two 
southern provinces in China. Interventions include prevention, care and 
support, voluntary counseling and testing, prevention of mother-to-
child transmission, policy and advocacy, and stigma reduction. USAID 
has joined forces with USAIDS, AusAid, DID, and other donors to 
advocate for HIV/AIDS at high political levels.
    East Asia is also the home of seven countries with high 
tuberculosis burden and countries with multi-drug resistant malaria 
that is becoming increasingly difficult and expensive to treat. The 
regional program also addresses these diseases by strengthening 
training, policy, advocacy, and surveillance systems.
                                 us-aep
    Through the U.S.-Asia Environmental Partnership (US-AEP), USAID has 
developed innovative and successful government-business partnerships to 
address key environment issues and create markets for U.S. businesses. 
We have integrated the most successful elements of US-AEP into our 
bilateral programs and will no longer request funding as a separate 
line item.
                      public-private partnerships
    The ANE Bureau established a public-private alliance mission 
incentive fund (MIF) in FY02 to encourage missions to seek out 
partnerships with private sector enterprises, donors, host country 
counterparts foundations, and local non-governmental organizations 
(NGOs), among others. A competitive process resulted the award of $17.5 
million to 12 projects in six countries with an average mobilization of 
more than four alliance partner dollars to each USAID dollar. In other 
words, the bureau's $17.5 million investment in these activities are 
expected to yield over $70 million in outside resources being applied 
to our development objectives. Examples of the types of programs 
supported by the MW include:

   Working with Mirant Philippines and the Philippine 
        Department of Energy on a solar energy project in Mindanao 
        which is delivering electricity to over 3,000 people in remote 
        areas to promote peace and prosperity;

   In Morocco, over 300 girls are assured a middle school 
        education by providing scholarships and safe housing through a 
        partnership with Coca Cola and the Moroccan Ministry of 
        National Education;

   An alliance with British Petroleum in a remote province in 
        Indonesia is working with civil society groups, private firms, 
        and local governments to put natural resources to work for the 
        economic and social betterment of the region while protecting a 
        unique environment; and

   A timber alliance to combat illegal logging in Indonesia 
        which harnesses resources from The Nature Conservancy, the 
        World Wildlife Foundation, and Home Depot. The latter is 
        groundbreaking because it builds on the strengths and talents 
        of government, the private sector, and NGOs to confront the 
        challenges to forest conservation in Indonesia.

    These FY02 alliances were so successful that the bureau is 
supporting a similar exercise this year, and will endeavor to identify 
funds with which to promote a third and final round next year.
                            usaid challenges
    One of the Committee's objectives in holding these hearings is to 
consider possible adjustments to our basic authorizing legislation, the 
Foreign Assistance Act of 1961. USAID has put forward several 
suggestions in this regard, and I hope that you and your staffs are 
consulting with our leadership about these suggestions. The demands on 
USAID to support new mandates to address global challenges--
Afghanistan, Iraq, HIV/AIDS, education, MEPI, and other pressing 
priorities--have increased exponentially, as have the costs of 
providing security for (and occasionally funding the evacuation of) our 
personnel and their families in this part of the world. Meanwhile, our 
ability to fund and staff these operations has reached its limit. The 
solution will have to involve not only the identification and provision 
of adequate resources, but also the need for new personnel and 
procurement authorities that will streamline and create more responsive 
systems. In this context, I am pleased to report that ANE is part of an 
Agency-wide process to analyze what it really costs for us to do 
business overseas. With this analysis in hand, we look forward to 
demonstrating our capacity and resolve to implement high priority USG 
programs throughout the ANE region in a cost effective and successful 
manner.
                               conclusion
    We applaud the leadership of this Committee in addressing many key 
issues such as HIV/AIDS, tuberculosis and malaria as well as your work 
on promoting international religious freedom, combating the crime of 
trafficked persons and preventing famine. We look forward to continued 
close cooperation with you and your committee as USAID implements its 
development programs based on the President's vision of foreign aid as 
articulated in the Millennium Challenge Account and in Administrator 
Natsios' vision for the Agency, Foreign Aid in the National Interest.
    In conclusion, I would cite President Bush's words: ``we fight 
against poverty because hope is an answer to terror. We fight against 
poverty because opportunity is a fundamental right to human dignity. We 
fight against poverty because faith requests it and conscience demands 
it. And we fight against poverty with a growing conviction that major 
progress is within our reach''. We look forward to joining with you and 
your committee in that fight.
    Thank you.

    Senator Chafee. Thank you, Assistant Administrator, very 
much. Those are sobering comments, and as you said in one 
sentence here in your written testimony, ``in the Near East the 
need for robust foreign assistance has never been more 
compelling.'' All the reasons you gave certainly are testimony 
to that.
    And so, Assistant Secretary Burns, the numbers really are 
not there for that robust assistance that Assistant 
Administrator Chamberlin talks about. What are the reasons not 
to have more of a commitment financially to all of the needs in 
the region?
    Ambassador Burns. Well, Senator, obviously enormous needs 
in the region, and they reflect not just the sort of 
traditional security concerns, but also, as both of us have 
tried to highlight, the broader regional challenge of economic 
and political change, and what we can do to invest in the 
efforts of people in the region to open up their economies and 
meet the need to create jobs.
    We have tried to focus in particular on some countries 
where there clearly is that sense of leadership and a 
willingness to make the changes that can ensure that our 
assistance moneys are going to be used well. We have also 
tried, when Secretary Powell introduced the concept of a 
partnership initiative, to highlight the importance of all of 
these challenges and, as we seek resources from the Congress, 
to demonstrate that we can use them wisely in the support of 
those aims.
    And that is why, not only in the request we have submitted 
for 2004 did we request $145 million in new money for the 
Middle East Partnership Initiative, but also in the President's 
supplemental request there is a $200 million supplemental 
request for the Middle East Partnership Initiative and Muslim 
outreach in general. I think we have also tried to look at some 
key bilateral partnerships, like Jordan, where we are looking 
for significantly increased funds, especially in economic 
support funds, again to provide support for, as Wendy said, a 
demonstrated leadership and a willingness to make tough 
decisions on economic reform and in other areas.
    Senator Chafee. So as we see the flat funding in the Middle 
East Partnership Initiative actually going from $200 million 
down to $145 million, is that accurate?
    Ambassador Burns. Well, no, sir. Let me just try and take a 
step back. When the Secretary put forward the Middle East 
Partnership Initiative, the 2003 budget request had already 
been made. We got a very modest amount in the 2002 
supplemental, $20 million for pilot projects just to show that 
we could get some of these programs started. I think we have 
had some modest successes there.
    And then we submitted a $145 million request for 2004, 
regular budget request, and now we have come back to try and 
take into account the fact that we did not make any request in 
the 2003 budget request with a supplemental request, so you get 
to see all of it as a package designed to meet what I think is 
a profoundly important set of challenges for us and for the 
people of the region.
    Senator Chafee. And you mentioned earlier that the 
detriment to more increased funding is the ability to use it 
wisely. Is that the main reason, that we want to make sure that 
our investments are, as you said, being most helpful to the 
populations they are directed at? Is that the key reason we do 
not see more robust funding, as Assistant Administrator 
Chamberlin mentioned? The need is there for more robust 
funding, yet we do not see it in the numbers.
    Ambassador Burns. Well, sir, I am a great advocate of 
robust funding. I have seen it myself in my own experiences as 
Ambassador in Jordan, what can be done with increased 
assistance flows. It is true that without that sense of 
political will and leadership in the region you are not going 
to get very far, but I think it is extremely important for us 
to provide positive reinforcement where we see that kind of 
leadership, and also, and this is one of the ideas embedded in 
the partnership initiative, to make sure we are coordinating 
across the whole range of policy instruments we have, so not 
just the assistance programs USAID manages so well, but also 
what USTR can do in trade agreements, whether formal free trade 
agreements, trade investment framework agreements, those kinds 
of things, to make sure we are harnessing all of the resources 
we have in support of positive efforts at change from the 
region itself.
    Senator Chafee. OK, just to switch a little bit--what role 
do you see our foreign assistance playing in the road map 
process?
    Ambassador Burns. Sir, I think our assistance program both 
for the Palestinians, the $75 million that we have requested in 
2004, as well as the contributions we make to UNRWA, as well as 
the $50 million supplemental request which was just submitted 
are extremely important to help to address many of the very 
deep humanitarian needs the Palestinians face right now in a 
city like Nablus, one of the largest towns on the West Bank, 
you have nearly 80 percent unemployment amongst Palestinian 
males. In a circumstance like that it is difficult for people 
to look easily at political compromises and reconciliation. You 
have to inject a sense of economic hope, and we coordinate our 
own efforts very closely with those of other donors in terms of 
dealing with the Palestinians, so I think it is an extremely 
important part of that effort to use the road map as a starting 
point to move seriously in the direction of the two-state 
vision that President Bush has laid out.
    The Israel program it seems to me, as I said in my opening 
comments, is also extremely important, given our enduring 
commitment to Israel's security and its well-being and to 
ensure that Israelis feel secure and a sense of economic well-
being that can help provide the space within which risks for 
peace can be taken as well, risks which are in the interests of 
both the Israelis and the Palestinians.
    Senator Chafee. And as we go forward with the ``road map'' 
and the desire for a Palestinian state, certainly it is, you 
might argue, getting more difficult to envision that state as 
the settlements expand. Is there going to be any linkage from 
the administration to the funding, the advance of the 
settlements, or the taking down of settlements? Is the 
administration going to make any request for a linkage?
    Ambassador Burns. Well, sir, I would make two comments. 
First, and as you said, the administration has been very clear 
in its opposition to continued settlement activity. It has been 
a prominent feature of what the President and Secretary Powell 
have said publicly. It is also a prominent feature of the first 
phase of the ``road map,'' and that is because this 
administration, like its predecessors, has seen continued 
settlement activity in the West Bank and Gaza and the Occupied 
Territories as wholly inconsistent with the two-state vision 
that President Bush has laid out.
    In the past, when previous administrations looked at the 
issue of loan guarantees, we had worked to ensure that there 
was some form of conditionality in the use of those funds, and 
we have worked with the Congress on that a decade ago in the 
early 1990s, and that is exactly the kind of thing that we are 
looking at right now.
    Senator Chafee. Looking at, or can you say there will be 
some kind of recommendations to----
    Ambassador Burns. I am certain that we are going to pursue 
that, and the exact terms are something that obviously will 
have to be worked out.
    Senator Chafee. Very good. Thank you very much.
    Do you have questions, Senator Boxer?
    Senator Boxer. Thanks, Mr. Chairman. I thank you both. I 
found your comments very important. I want to focus in just for 
a minute on the current situation in getting humanitarian 
assistance to the Iraqis. Now, we know that a lot of our 
nonprofits, USAID also, is not going to go in there while there 
are still hostilities, so it falls to the military, and I saw 
some shots of the British military handing out meals to some of 
the civilian people. Is that a plan for our military, do you 
know, at this point, to do that?
    Ambassador Chamberlin. Yes, Senator, it is. Our military 
has civilian affairs troops that will be going in, are in now, 
and that is their responsibility. That is their mission, is to 
provide immediate food, water, health assistance to affected 
civilians in the conflict period. As soon as we can move to a 
post-conflict period, USAID will deploy its DART team. I think 
you have read about it in the paper. We have a DART team that 
is over 60 members. It includes participants from the 
Department of State and other agencies, and they will go in two 
steps behind the civil affairs troops to begin to also make 
assessments of humanitarian requirements.
    Senator Boxer. Well, I have absolutely no question that as 
soon as possible we will get everything going. I want to get a 
picture of the condition now, because a lot of the Iraqis 
counted on the food from the Oil for Food program which, of 
course, is disrupted at the present time, and with the mining 
by Hussein of some of the harbors there, what can you tell us 
about the current circumstances? How long can the Iraqi people 
hold out?
    I mean, there is some talk that this war is right exactly 
where they wanted it, there is some talk that it may be longer 
than they anticipated. I do not know which is correct because I 
am not a military expert, but the point I am concerned about it 
is the scale of the humanitarian problems. Clearly, if our 
people are worried about their back, that comes first, so where 
are we in terms of getting food to people, and how long can 
they hold out, and do we have a contingency plan if we cannot 
do the massive type of humanitarian aid within the next couple 
of weeks?
    Ambassador Chamberlin. Modest estimates are that the Iraqi 
people have 1 month of food supplies within their families. The 
Saddam regime actually distributed their food provisions, 
doubled up their food provisions over the last several months, 
so our estimates are that the households have from 1 to 2 
months' food supplies within their families. Water is the 
issue. Water is the issue, and it is one that does concern us.
    Senator Boxer. But at this point, water is OK as far as we 
know?
    Ambassador Chamberlin. Yesterday the reports were that the 
water systems in Basra presented a severe threat to the people. 
Fortunately, the International Red Cross were able to get into 
Basra and to restore water to 40 percent of the population 
within the city. Today, I understand from the press that Basra, 
perhaps other humanitarian agencies and our own people can get 
into Basra now and have access to it.
    Senator Boxer. OK, so the food, you are giving us an answer 
they can last a month to 2 months. What about, the budget in 
2004 has nothing for rebuilding Iraq. I mean, we are kind of 
facing with this budget, that it did not have the cost of the 
war, so we are taking up a supplemental. We are going to have 
some money in a supplemental.
    Ambassador Burns. $2.4 billion.
    Senator Boxer. What other countries are helping us with 
hard cash to rebuild Iraq, and why isn't there anything in 
there for 2004, and do you anticipate a 2004 supplemental?
    Ambassador Burns. I cannot answer the last question, 
Senator Boxer, I just do not know, and I am sorry. Wendy can 
add to this as well, but I think the supplemental request for 
Iraqi reconstruction and relief is the administration's best 
estimate at this point of the costs that are going to be 
required. Obviously, we want to try and share the burden as you 
look at the enormous task of helping Iraqis rebuild their 
country, and the expense of that is going to be quite 
significant over time.
    Senator Boxer. What countries have offered to give us hard 
cash in this effort?
    Ambassador Burns. We are still in the process of consulting 
with a range of those countries that you see who have 
identified themselves publicly with this coalition effort. One 
of the points that countries who are willing to contribute have 
expressed--at least a preliminary willingness to contribute 
have made to us is that they are very much interested in what 
is the post-war structure going to be for supporting the 
efforts of Iraqis to put themselves back on their feet. What is 
the U.N. role going to be, how are we going to open things up, 
and so I think those two issues are very closely connected.
    We obviously want to share the burden. There are obviously 
a lot of countries around the world and international 
institutions which have a stake in a stable Iraq emerging, and 
that is one of the reasons that it is so important, I think, 
for us to follow through on what the President and Prime 
Minister Blair talked publicly about in their Azores statement, 
which is to find an appropriate U.N. role so that we can build 
a structure which attracts those kinds of contributions.
    Senator Boxer. I could not agree more. I want to have more 
of a U.N. role right now, but as I look over the coalition, 
most of them receive aid from America, so I do not know how 
much we are going to get from this coalition, but I have been 
asking for a real long time for a list of what each country 
will be contributing to the war effort and to the post-war 
effort. If it is possible to have that, I would ask unanimous 
consent that the record be kept open. Is that all right with 
you, Mr. Chairman?
    Senator Chafee. Without objection.
    [The following information was subsequently supplied.]

                             Other Donor and International Organization Assistance*
                                              (As of July 3, 2003)
----------------------------------------------------------------------------------------------------------------
            Donor                US $ (Millions)       Date (2003)                Assistance Snapshot
----------------------------------------------------------------------------------------------------------------
Australia                     $64.9                 April 29          U.N. agencies, ICRC, and NGOs
Austria                       $1.1                  April 1           UNICEF
Bangladesh                    $2                    April 4           Food Assistance
Belgium                       $4.4                  April 29          ICRC, UNICEF
Canada                        $74.6                 March 26          WFP, UNICEF, UNHCR, OCHA, ICRC, NGOs
China                         N/A                   March 27          Tents
Czech Republic                $41                   May 22            UNHCR, WFP, and assistance for refugees,
                                                                       health, education, and reconstruction
                                                                       activities
Croatia                       $2.8                  May 2             Blankets, sleeping bags, flour, sugar,
                                                                       water purification disinfectants
Denmark                       $54                   March 8           Various
European Commission           $117.7                April 22          U.N. agencies, IOs, and NGOs
Finland                       $5.13                 March 25          ICRC, UN, OCHA, WFP
France                        $10.7                 ................  UNICEF, WFP, NGOs
Germany                       $50                   May 5             UNHCR, WFP, ICRC
Greece                        $4.6                  May 5             UNHCR, ICRC, NGOs
Iceland                       $3.75                 April 8           ICRC, NGOs, UNHCR, WFP
India                         $20                   April 4           WFP and U.N. Consolidated Appeal
Ireland                       $5.1                  March 31          U.N. agencies and NGOs for humanitarian
                                                                       assistance
Italy                         $16.3                 April 29          Field Hospital
Japan                         $212                  May 1             U.N. agencies, NGOs, Bilateral Assistance
Jordan                        $10                   May 5             Various
Korea                         $10                   April 3           U.N. agencies and Korean NGOs
Kuwait                        $40                   March 14          UNHCR, WFP, UNICEF, ICRC, Water and
                                                                       Sanitation, Health
Netherlands                   $20.5                 April 2           U.N. Consolidated Appeal and ICRC
New Zealand                   $2.3                  April 22          U.N. agencies including WFP, IOs, and NGOs
Saudi Arabia                  $13.3                 April 12          Medical Assistance
Spain                         $56.7                 April 22          U.N. agencies, bilateral refugee
                                                                       assistance, and NGOs
Sweden                        $38                   April 11          OCHA, UNICEF, ICRC, IFRC
Switzerland                   $21.9                 April 16          ICRC, UNHCR, IOM, IFRC, OCHA
Taiwan                        $4.3                  March 27          Refugee assistance--food, medicine,
                                                                       nonfood items
U.A.E.                        N/A                   April 22          Medical Assistance
United Kingdom                $382                  April 29          U.N. agencies including WFP, IOs, and
                                                                       NGOs--food, health kits, water units,
                                                                       winter supply kits, primary health, IDP
                                                                       assistance
----------------------------------------------------------------------------------------------------------------

 
Other Donor Contributions to Date**...............        $1,289 Million
------------------------------------------------------------------------
* This compilation was drawn from Department of State tracking of donor
  government pledged or committed funding. The list may not be
  comprehensive.
** This total is approximate as the value of donated commodities is not
  available in some cases.

    Senator Boxer. Basically, that is where my focus is right 
now.
    In terms of the lack of funding in 2004, it is very 
perplexing to me. We have a lot of goals here. I mean, I have 
read that the administration wants to have, you know, health 
care for every Iraqi, education for every kid. I would like to 
see them do that in this country. That is another domestic 
argument, it is a different argument, but surely at the 
minimum, with those goals in Iraq, we just need to see a little 
bit more, Mr. Chairman, of where these resources are coming 
from, so I will be very delighted if we could have in writing 
what these countries are going to give us to help us with this 
burden.
    And also I would say that--I am going to call you 
Ambassador Chamberlin----
    Ambassador Chamberlin. Please. Call me Wendy.
    Senator Boxer [continuing]. Because you have done a 
fantastic job for your country. Both of you have. But I 
really--I am very worried about this humanitarian situation, 
and I would just like to say, as the ranking Democrat working 
with my colleagues on the other side of the aisle, if you see 
things coming down that are alarming, that you feel we need to 
help, please come to us with that so that we can be supportive.
    Thank you.
    Ambassador Chamberlin. Thank you very much for that 
invitation.
    Senator Chafee. Senator Hagel.
    Senator Hagel. Mr. Chairman, thank you. Welcome. We 
appreciate your efforts and good work and your leadership at a 
difficult time.
    Picking up a bit on what Senator Boxer was talking about, 
the role of the United Nations, what can you tell us about Dr. 
Rice's conversation with Secretary General Annan yesterday, the 
role of the United Nations? Is there a role? What will that 
role be? Where are we? I presume Prime Minister Blair will be 
talking to the President about that. Can you expand on that as 
much as you can?
    Ambassador Burns. Yes, sir, I will try to. First, I cannot 
comment a lot on the details of Dr. Rice's conversation. Let me 
take this in steps.
    First, there is an immediate focus, and it picks up on 
Senator Boxer's question, on the oil for food program and how 
the Security Council responds to the Secretary General's 
request that he get the authority to ensure that goods that are 
already in the pipeline and Iraqi resources are used to support 
some of the immediate humanitarian concerns that you raised. We 
are working hard today, even as we speak, in the Security 
Council to try and work out a mechanism and language in order 
to do that in response to what the Secretary General has said, 
and that is a very important starting point, I think, for the 
U.N. role.
    More broadly, as the President and Prime Minister Blair and 
Prime Minister Aznar said in the Azores recently, we do support 
a role for the U.N. in managing the enormous challenge of post-
war Iraq. That can take a number of different forms. You look 
at the role the U.N. has played in different crises around the 
world in recent years, I do not think there is any perfect 
model for the unique set of circumstances that faces us in 
Iraq, but I think for all sorts of reasons, in particular, 
burden-sharing, I think the administration recognizes that we 
are going to need to seek to work as closely as we can with the 
United Nations, and that is notwithstanding all the 
difficulties that are obvious to all of us in recent weeks as 
the President moved to the decision to go to war as a last 
resort, to head up the coalition.
    So we are still working through the problem, Senator Hagel, 
but it is very much with a sense of purpose, and the sense of 
purpose is to try and work out a cooperative role with the 
United Nations, one which can serve not just to coordinate all 
of the work of the U.N. specialized agencies in Iraq in a post-
war setting, which can be enormously important, but also see if 
there are other kinds of roles that the U.N. can play which 
would support our interest in a stable situation emerging, 
meeting basic reconstruction goals, as well as ensuring as much 
burden-sharing as we can, so we are still working that through.
    Senator Hagel. Realizing that this is an imperfect process 
and we are dealing with many uncontrollables and unknowables, 
how much time did this administration put into this, thinking 
it through? Are we just now starting figuring this out with the 
role of the United Nations, or are we starting from a plan, or 
where are we starting from? We have been told in many hearings, 
as we ask some of these same questions, as you know, how do we 
intend to move forward? We have been talking about this for 
months, and some of us have been concerned that the 
administration has not put the kind of planning into it.
    I am a little puzzled that this seems to be something 
fairly new, at least as it is being projected here, when we 
were told by the administration that, don't worry about it, 
Senator, we know what we are doing, we have got it essentially 
figured out.
    Ambassador Burns. Let me start, Senator Hagel, and then 
Wendy might want to add to this, just on the U.N. role. We have 
worked hard at this for some months, as a matter of prudent 
planning to sort of think through the kind of challenges that 
we as an administration and a country would face if we went to 
war as a last resort, thinking through not just how we would 
work with the international community, in particular the United 
Nations, but also how it would work with Iraqis.
    For a year and a half, as you know, Senator, the State 
Department took the lead in putting together Future of Iraq 
Working Groups, looking at each sector of Iraqi society, and 
what Iraqi specialists themselves think in terms of rebuilding 
that society. In part, though, it does depend on the kind of 
situation that we walk into and that we find as hostilities 
end. That is true in terms of how we go about trying to support 
the creation of an interim authority for Iraqis.
    It is also true, in part, in terms of the U.N.'s role, 
because as I said, there are a lot of different models out 
there, and it is a question of trying to harness the best 
experiences to the situation we face, but we have tried to look 
very carefully in recent months at the different roles that the 
U.N. has played in the past, and what might be the best mix to 
fit the particular circumstances of Iraq, but again, it does 
depend in part upon the kind of situation on the ground that we 
face afterwards, so we have tried to think through a kind of 
range of options that we have and have begun to coordinate 
closely with the British and with other partners to think those 
options through, and it is going to be a large part, I think, 
of the conversation Prime Minister Blair and the President have 
tonight and tomorrow.
    Senator Hagel. You mentioned the State Department took the 
lead in putting these groups together. It is my understanding 
the Defense Department has the lead in reconstruction. Is that 
correct or not correct? What is the role of the State 
Department here? Who is leading that effort? Who is organizing 
it?
    Ambassador Burns. Well, it is an interagency effort. The 
NSC staff, as is properly the case, has helped to organize. 
When I mentioned the State Department's role in putting 
together the Future of Iraq Working Groups, that goes back more 
than a year, and what we have tried to do is to plug that work 
in, some very good work that was done, into the efforts of the 
group that retired General Garner now heads, based in the 
Pentagon but a true interagency effort reflecting contribution 
from the State Department and from other parts of the 
administration, so the lead in terms of immediate 
reconstruction challenges is with that group.
    What we are trying to do is plug the work that we have done 
over more than a year into those efforts to make sure that this 
reflects the best efforts of the whole administration.
    Ambassador Chamberlin. Let me just add, because I think my 
comments will fit in nicely with Bill's comments, Bill has 
really addressed the types of planning we have been doing on an 
interagency basis for reconstruction with a ``large R.''
    USAID has been involved for many months, since about 
September, on issues of reconstruction. I call it 
reconstruction with a ``small r,'' issues like those Senator 
Boxer was addressing, health, water, electricity, food, 
telecommunications, rebuilding bridges, getting the education 
system up, working on local governance, building their 
capacity, economic governance. We have developed very extensive 
plans in each of these sectors for reconstruction with a 
``small r.''
    We have done it in an interagency group chaired by the NSC 
and OMB. Robyn Cleveland, perhaps you know her, has led this 
group for some months, prepared extensive planning in this, 
all-perspective, all-contingency. We really have not been in 
Iraq for sometime. NGOs for the most part have not been there. 
There have been three NGOs in the south. We do not have a whole 
lot of information, but we used information that we were able 
to get from the Future of Iraq Working Group, from our 
intelligence services, from those NGOs and from Iraqis in the 
exile community, what are conditions there and what should we 
plan for.
    In each of these sectors, USAID set benchmarks. Some of the 
benchmarks you, Senator Boxer, noted as goals, ambitious goals, 
yes. Every child in Iraq ought to have access to education. 
That does not mean that from U.S. resources alone we are going 
to provide education at an American standard level for every 
child in Iraq, but it is a benchmark that is out there that we 
would hope we would aspire to, the Iraqis themselves could 
aspire to, other donors could aspire to.
    What we are trying to do in this supplemental request for 
reconstruction is to jump start, to get into a wide variety of 
areas that we think need work, desperately need work right 
away, provide immediate punch to it in a 1-year timeframe. We 
want to bring those sectors up to a level perhaps as good as 
they were 10 years ago before Saddam Hussein really started to 
run it into the ground.
    Senator Hagel. Madam Ambassador, I do not doubt the 
nobility of the purpose here. That is not the point. Let me, 
because I do not have a lot of time, and we have other 
colleagues, so I am going to not be offensive here, but see if 
I can cut to a couple of other questions. So General Garner 
reports to OMB?
    Ambassador Chamberlin. No.
    Senator Hagel. General Garner reports to OMB, or who does 
he report to? Powell?
    Ambassador Chamberlin. DOD.
    Ambassador Burns. No, no, he reports up through the DOD 
channel.
    Senator Hagel. He reports to DOD? That gets back to my 
question, so what is the role of the State Department? I know 
you talked about the purpose, but is State Department, what, a 
junior partner here, or what?
    Ambassador Burns. No. We have contributed personnel. As I 
said, we tried to contribute the work of this Future of Iraq 
Working Group to those efforts, but it is an interagency effort 
headed by General Garner, the Pentagon----
    Senator Hagel. Garner reports to the Pentagon.
    Ambassador Burns. Yes, sir.
    Senator Hagel. And OMB is what? What do they do? What is 
OMB's role?
    Ambassador Chamberlin. Well, OMB established the 
Interagency Working Group that provides guidance.
    Senator Hagel. Do they have management control over this?
    Ambassador Chamberlin. No.
    Senator Hagel. Are they part of the reporting process?
    Ambassador Chamberlin. No.
    Senator Hagel. So they are out of it now? They were part of 
organizing the----
    Ambassador Chamberlin. They will manage the supplemental 
funds.
    Senator Hagel. The financial part that OMB normally does, 
but as far as the rest of it, they do not have anything to do 
with it--and the reason I asked that, too, is the millennium, 
the grant process, which I think is wrong, and we are not 
finished with that issue, is having OMB being one of the three 
board members on there. I mean, OMB is the court of last resort 
for everything, but we are not here to talk about OMB.
    If I might, Mr. Chairman, I want to ask a couple of 
questions on the Middle East. Can you clear up some of the 
misunderstanding of the President's speech the other day about 
the ``road map,'' and we will welcome new comments to the 
``road map.'' What did he mean by that? Are we opening that up 
now for new negotiations or not, or what exactly did he mean?
    Ambassador Burns. Sure, sir, well, first I think what the 
President said a couple of weeks ago is very important. He 
reaffirmed his commitment to a two-state position. He 
reaffirmed his personal commitment to the process. It is going 
to be a very difficult one to start moving in that direction 
finally, and he reaffirmed his commitment to the ``road map'' 
as the way to get started in that process.
    And our view is, reflecting what the President said, that 
the ``road map'' is the starting point. It is a basis for 
getting the two parties to engage one another. It is not a take 
it or leave it edict. It is a basis for them to engage, to roll 
up their sleeves, with our help, because it will not happen 
without vigorous leadership from the United States, to begin to 
change the atmosphere on the ground, and it is our best 
judgment about how to get started, and what kind of framework 
is going to lead us, and lead the two peoples and leaderships 
from the place they are in now to the two-state vision that the 
President has laid out.
    So our view is very much that the point here is not 
renegotiation of text, it is using it as a starting point and 
taking advantage of some of the modest, positive steps which 
have occurred on the Palestinian side, in the financial sector, 
with the creation of the position of Prime Minister, the 
appointment of a credible personality who is now trying to put 
together a new cabinet, and see, as the President said, if we 
cannot take advantage of that opportunity and get started and 
again, use the ``road map'' as a starting point.
    Senator Hagel. So his language was not meant to open up a 
negotiation of new points in the language. Let be more specific 
in the question. It has come to my attention that Prime 
Minister Sharon has a list of new points that he wants 
included. I understand that list may include as many as 150 
points. Is that true or not true? Is it open to negotiation or 
not open to negotiation?
    Ambassador Burns. I think it is obvious that both parties 
are going to have to make contributions if we are going to take 
the ``road map'' as a starting point and get anywhere with it. 
Those contributions, those comments are obviously going to have 
to come in, and we would like to focus them on implementation, 
in other words, how you take that starting point and make 
something of it, because it is seven pages. It is a framework. 
It is a starting point, and obviously many of the specifics in 
terms of implementation are going to have to be fleshed out, 
and that is only going to happen if we work with the two 
parties.
    Senator Hagel. But what we have on the table now, what has 
been agreed to, that is not open for negotiation. We will start 
from that, as you say, and then the implementation of those 
points needs be worked out. Is that what you are saying?
    Ambassador Burns. Just as Secretary Powell said yesterday, 
Senator, that is exactly our point, is we want to use it as a 
starting point and see it in that context. To implement it, 
both sides are going to have to make contributions, make 
comments and come up with ideas----
    Senator Hagel. So we are not going back and renegotiating 
all the points in the framework?
    Ambassador Burns. No, sir. We want to use that as a 
starting point.
    Senator Hagel. Thank you very much. Thank you, Mr. 
Chairman.
    Senator Chafee. Thank you, Senator.
    Senator Alexander.
    Senator Alexander. I have a general question. Just help me 
understand the concept of a moderate Islamic democracy and how 
we would define one. Would we recognize one if we saw one? How 
can we encourage that? I mean, it is fairly likely that a 
moderate Islamic democracy might not look anything like our 
democracy. It might not have separation of church and state, 
probably would not, might not have equal opportunity in the way 
we think about it, in the case of women, for example. It might 
not have many of the freedoms that we want to encourage, and if 
it were a democracy, it might not agree with us on our foreign 
policy objectives. It might be on the other side. It also might 
take a long time to get to where we could even call it a 
democracy at all, so how do we think about this? I mean, what 
is the concept of a moderate Islamic democracy? What should be 
our guidelines as we think about it?
    Ambassador Burns. Well, Senator, let me just offer a couple 
of comments because it is a very good question.
    First is, you are right, there is no one-size-fits-all 
solution here, and it is not a question of models, which have 
worked so well for us in this society, a Jeffersonian democracy 
emerging full-blown in the parts of the region at least for 
which I am responsible.
    Second, it is very clear that there are a lot of pressures 
and trends within the region itself to which leaderships are 
going to have to respond, people who want to have more 
participation, more say in how they are governed, and that is 
just a reality which leaderships are not going to be able to 
ignore, and the Arab Human Development Report, as I mentioned 
in my opening remarks, I think very eloquently highlighted the 
way in which Arabs themselves see those kinds of challenges.
    You are also right, sir, it is going to take time, and 
progress in the direction of creating durable political 
institutions. Opening up greater participation is not going to 
happen overnight. It is going to have to be driven from within. 
There are things we can do to help. There are forms of 
assistance that we can provide, many of which are included in 
the partnership initiative that can be used, I think, very 
constructively in support of efforts from within the region 
itself.
    And finally, sir, you are also right that broader political 
participation, greater openness in those societies is not 
necessarily going to make for more positive views of American 
policy. There is a deep frustration, anger and bitterness in 
parts of the Arab world right now with regard to aspects of 
American policy, and more open political systems are not going 
to make those go away and in some respects it is going to give 
greater voice to them.
    But I think the reality is, in terms of American interests 
at least as I see them, that is ground that has to be covered, 
because stability is not a static phenomenon, and societies in 
that part of the world are going to have to evolve. They are 
going to have to take into account the pressures for greater 
political participation that come from their own people. How 
that evolution is going to work is going to depend largely on 
decisions they make. It can depend in part on assistance we 
offer, and that is why we want to target it, you know, where 
leaderships are making constructive changes.
    Senator Alexander. But how far should we go in making it 
our business to instruct moderate Muslim democracies as to what 
they should look like? I mean, we should insist--if we insist 
too quickly that they make their own decisions, then they end 
up on the other side from us. If we insist that they look like 
us, maybe they would say to us, well, you should look like us 
instead of us looking like you.
    Ambassador Burns. I think, Senator, that instruct is a verb 
we need to avoid, because I think that the more this appears to 
be instruction or a prescription or preaching from the outside, 
the more hostile oftentimes people in those societies become to 
the whole idea, and there is a real sensitivity to the sense of 
this being imposed from the outside.
    What is encouraging to me are the voices coming from within 
the region who highlight the problems those societies face, who 
do not underestimate the difficulty of those challenges, but 
recognize that changes have to be made, and it seems to me that 
we need to respond to those voices and provide what assistance 
we can, but it is not a function of instruction or dictation 
from the outside, I do not believe, Senator.
    Senator Alexander. Thank you, Mr. Chairman.
    Senator Chafee. Senator Coleman.
    Senator Coleman. Thank you, Mr. Chairman. Two questions.
    Senator Chafee. I just note, Senator Coleman, I note the 
second panel is here, so we are trying to make our questions 
and answers as succinct as possible.
    Senator Coleman. Two quick questions, one in terms of 
coordination between military and state, the question was 
raised to me about, as we are proceeding to military action, 
funding for broadcasting into Iraq, is that going on? Is that 
funding flowing? Are we doing that at the same time? Is there 
any issue about that, about broadcasting into Iraq?
    Ambassador Burns. I do not think so, Senator. We have set 
aside funding for the INC's broadcasting, TV broadcasting into 
Iraq as just one example, but I do not think there is any 
problem. I will be glad to look into it for you.
    [The following information was subsequently supplied.]

    The Iraqi National Congress has received continuous funding for 
Liberty TV since 2001. The INC decided to cease broadcasting in June 
2002 and although additional funding was approved as recently as 
February, the INC has failed to get Liberty TV or any other broadcast 
capacity back on the air. INC members the Kurdish parties maintain on-
going broadcast capacity from northern Iraq without direct U.S. 
Government support.

    Senator Coleman. And a second question, Mr. Chairman, in 
regard--shifting over to Israel and the Middle East--the Middle 
Eastern Partnership Initiative, the education, one of the 
principles there is the education initiatives. Can you just 
give me a little bit more, kind of the detail of that? Are we 
in a position to be supporting educational institutions, other 
than the madrassahs school system that is not promoting a 
generational hate, and--long-term perspective for education is 
the key. What are we doing about that?
    Ambassador Burns. It is going to depend society to society, 
and Ambassador Chamberlin can add to this better than I can, 
but just very quickly, we are trying to look at some programs, 
for example, in Morocco, which USAID has run, which look at how 
you help keep girls in middle school in school and provide 
scholarships. This has been a big problem in Moroccan society, 
as in many societies in the region, so we can help there.
    We have done the same thing in Alexandria in Egypt, again 
in support of local leaders who really want to make curricula 
changes and can use our assistance widely. We have even had 
conversations with the Ministry of Education in Saudi Arabia 
about how we can help quietly in support of curricular reform 
and changes there that are useful. I think English language 
teaching is another area where there is an enormous thirst in 
the region, and we can do more.
    Senator Coleman. I would just note, Mr. Chairman, that if 
we are to make a long-term change, that this is a very, very 
important area of concern.
    Ambassador Chamberlin. It is certainly, Senator. We 
certainly agree with trying to shift much of our programs with 
a greater emphasis on education, not just in the NEA area but 
also in Pakistan and Indonesia, other Muslim countries around 
the world.
    Senator Coleman. Thank you, Mr. Chairman.
    Senator Chafee. Senator Nelson.
    Senator Nelson. Thank you, Mr. Chairman. There is $1 
billion here for Turkey. Tell us about that, was that as a 
result of a quid pro quo that they would let us come in on the 
overflights?
    Ambassador Burns. Well, Senator, blessedly in some respects 
Turkey falls outside of my area of responsibility in the Near 
East Bureau, and one of my colleagues will be here later. I am 
sure he would be glad to address that, but I think it is a 
reflection, sir, in the supplemental request of the economic 
consequences that could befall Turkey as well as some other 
neighbors in the region, and that is what it is largely in 
recognition of.
    Senator Nelson. Let us see if I can get within your area. I 
know I can ask Wendy about Pakistan. There is $175 million 
here. One of your big deals was to get education at the local 
level. Is this going to accomplish that?
    Ambassador Chamberlin. We certainly hope so. It is a start. 
Of course, we would always like to have more, but we anticipate 
a $100 million commitment over the next 5 years for education 
alone in Pakistan, and it is in many of the areas Bill has just 
mentioned. It is in teacher training, it is in girls' 
education, it is in basic education--we are targeting basic 
education--and in local reforms.
    Senator Nelson. All right. There is only $650 million for 
Afghanistan. This is significantly less than what we authorized 
last year. Tell us about that.
    Ambassador Chamberlin. Well, do you mean in 2004 funds?
    Senator Nelson. In the President's request, the 
supplemental--the wartime supplemental.
    Ambassador Chamberlin. In the wartime supplemental, I can 
tell you this from memory----
    Senator Nelson. No, I beg your pardon. This is 2004. This 
is your request for 2004, $650 million for Afghanistan.
    Ambassador Chamberlin. Senator, we have already expended in 
Afghanistan $800 million. Much of that, particularly initially 
in 2002, happened right after 2002, was humanitarian 
assistance. We had 6 million people who were threatened with 
famine by Christmastime immediately following September 11, as 
you know. Most of our effort was designed to feed them, to keep 
them warm, to do some food-for-work projects that did build 
some roads and the Salang Tunnel, but primarily it was 
humanitarian.
    Thankfully in 2003 the Congress in your wisdom did put some 
money in there for us, and it has enabled us to begin now a 
reconstruction project. These funds in 2003 that you all 
provided for us in 2004, now we are going to really start the 
real work in Afghanistan of building capacities, building 
infrastructures. For example, that money will go to build the 
ring road from Kabul to Kandahar, and we hope eventually to 
Herat. It will go to building the capacities of the government 
in the Human Rights Commission, the Judicial Commission, the 
election which is coming up.
    We are giving some money to help the Ministry of Women, 
women's affairs groups, projects such as the bakery for widows, 
the women's outreach centers, 17 of them throughout the 
country, education, education particularly for women, 
scholarships, schools, basic education, health projects, 
primarily in the rural area. We do not want to build big 
hospitals in Kabul, where everybody else is building big 
hospitals, but in the rural areas where the people are, where 
the child mortality and maternal mortality rates are so high.
    Senator Nelson. Do you think this $650 million is enough?
    Ambassador Chamberlin. I think there is an absorptive 
problem that we do have to monitor. We have a very small staff 
there. The size of our staff is limited by the number of office 
space we can get, cram into that very small embassy until we 
can build another one, so we are limited. I would hope that 
this might grow in 2005 and 2006, but right now that is just 
about what we can absorb.
    Senator Nelson. Mr. Chairman, let me just take the liberty 
of asking the former Ambassador to Pakistan what is the word 
that you get back as to how Musharraf is able to handle the 
street with us being now in Iraq and then seeing all these 
pictures?
    Ambassador Chamberlin. I really have been so absorbed in 
the reconstruction, the ``small r'' reconstruction of Iraq, 
that I have not paid an awful lot of attention to some of the 
details of the security situation in Pakistan. I will leave 
that to my colleague, Christina Rocca, when she comes in next, 
but my understanding is the street is active, that there have 
been some fairly sizable demonstrations in Rawalpindi, and as 
you know, Senator, because that is where the airport is, that 
is just a jog down the road from our embassy.
    So far, President Musharraf has contained these. His 
security is good. We are satisfied with it, but Ambassador 
Powell has reduced the size of our mission yet again, and a 
number of our USAID folk have come home on evacuation status. 
Touch wood.
    Senator Nelson. Thank you.
    Senator Chafee. Without any further questions of this 
panel, we thank you both for your testimony.
    We will started with our witnesses of the second panel on 
South Asia, and we welcome you. We look forward to your 
testimony.

 STATEMENT OF HON. CHRISTINA B. ROCCA, ASSISTANT SECRETARY OF 
STATE, SOUTH ASIAN AFFAIRS, DEPARTMENT OF STATE, WASHINGTON, DC

    Ms. Rocca. Thank you, Senator. Mr. Chairman. Mr. Chairman, 
thank you for inviting me here today to talk about U.S. foreign 
assistance programs for South Asia, all of which support our 
policy priorities and efforts in the region. South Asia remains 
at the front lines of the war on terror. Support for democracy 
and regional stability remain critical. We are redoubling our 
efforts to resolve and prevent conflict throughout South Asia 
in order to avoid instability favorable to terrorist movements 
seeking to relocate or expand operations in the region. 
Stability will also assist continued economic and political 
progress.
    The programs we are planning using fiscal year 2003 
supplemental funds and fiscal year 2004 resources directly 
reflect these key policy priorities. In Afghanistan, we are 
helping Afghanistan to establish a lasting peace and stability, 
and will require a continued commitment of U.S. and donor 
resources to four interlocking objectives consistent with the 
goals of the Afghan Freedom Support Act.
    Afghanistan must establish internal and external security, 
without which economic reconstruction and political stability 
will fail. We are taking the lead among donors in helping to 
establish a multiethnic and disciplined Afghan military. We are 
working with President Karzai to draw the center and regions 
together. Provincial reconstruction teams have been established 
in three locations, with more to follow later in the spring.
    A stable and effective central government is being 
established according to the ``road map'' accepted at Bonn 
December 2001. A constitutional Loya Jirga is scheduled for 
October of this year, followed by national elections in June of 
2004. We will assist those processes as well as assistance to 
the women's ministry, judicial rehabilitation, human rights, 
civic education, and independent media development.
    Economic reconstruction and development will bolster the 
Bonn process and reduce dependence on donors. Our development 
programs focus on private enterprise, employment and 
agriculture, as well as health and education. Economic support 
funds will also continue to support infrastructure development, 
including the Kabul-Kandahar-Herat ring road. Humanitarian 
needs will also continue as reconstruction proceeds, including 
support for refugees, IDPs, and demining.
    In Pakistan, we have a very solid partnership in the war on 
terror. Cooperation in Operation Enduring Freedom has been 
outstanding. We have expanded the relationship greatly over the 
past 18 months, including the reestablishment of the USAID 
program which provides assistance in education, democracy-
building, economic development, and health. We have also 
expanded our cooperation in law enforcement and have begun 
restoring our military-to-military ties. We continue to work 
closely with the government on counternarcotics, and have more 
than a decade of successful counternarcotics collaboration with 
the Pakistani Government, including in the tribal areas of the 
Pak-Afghan border.
    We have also strengthened our program's bilateral 
cooperation aimed at dealing successfully with regional 
stability and improving Pakistan's relations with its 
neighbors.
    In India, we have shared interests and values which link 
the United States and India, the world's two largest 
democracies. We have deepened our partnership and are providing 
assistance on issues ranging from regional stability, 
nonproliferation, science and technology, economic reform, and 
global issues such as trafficking in persons. As we continue to 
expand economic dialog with the India, U.S. economic and 
development programs aim to assist the completion on fiscal, 
trade and other reforms that will promote economic stability 
and reduce poverty.
    We are deeply shocked and disturbed by Sunday's terrorist 
attacks south of Srinagar in Kashmir, which killed 24 innocent 
civilians. This cowardly act appears aimed at disrupting the 
Jammu and Kashmir State Governments' bold efforts to restore 
peace and religious harmony to this troubled state, and 
although the United States has no preferred solution for 
Kashmir, the one thing we do know is that violence will not 
provide a way forward and should cease immediately. Avoiding 
conflict between India and Pakistan is perhaps the most 
daunting U.S. challenge in South Asia.
    We have helped to successfully walk India and Pakistan back 
from the brink of war last year. However, continued terrorism 
like last Sunday's attack threatens to provoke yet another 
crisis in coming months. We look to Pakistan to do everything 
in its power to prevent extremist groups operating from its 
soil from crossing the line of control. Pakistan has taken 
steps to curb infiltration, and we are asking the government to 
redouble these efforts. At the same time, we will use our good 
offices to continue to press both sides to take confidence-
building steps that will lead to a process of engagement, 
addressing all issues that divide them, including Kashmir.
    In Sri Lanka, through a Norwegian-facilitated peace 
process, the Sri Lankan Government and Tamil Tigers have now 
completed six rounds of talks since September 2002. They have 
made significant progress, although complex issues remain that 
will require time and skillful diplomacy.
    Several U.S. Government agencies, including Treasury, 
Commerce, Peace Corps, and the Department of Defense have sent 
assessment teams to Sri Lanka to examine how we can most 
effectively use our bilateral assistance and engagement in 
support of the peace process. As a result, we are providing 
demining support, we plan to establish new programs to 
strengthen Sri Lanka's peacekeeping capability and reform its 
military institutions. Our economic assistance and development 
programs will facilitate post-war reconstruction, economic 
recovery, and political and social reintegration and 
reconciliation.
    In Nepal, a recent cease-fire and agreement on the code of 
conduct has raised hopes of progress with the Maoists. We 
believe the parties have come this far only because the Royal 
Nepalese Army was able to make an effective stand, a goal which 
U.S. security assistance aims to bolster. If a political 
settlement is reached, the United States should be in the 
forefront of donors prepared to help Nepal conduct local and 
national elections and strengthen administrative and democratic 
institutions. In the near term, we will continue to support 
improved governance and respect for human rights, improved 
health services, rural livelihoods, and sustainable 
development. Our assistance will also support efforts to 
bolster government control in areas vulnerable to Maoist 
influence by funding high-impact rural infrastructure and 
employment projects.
    Bangladesh provides a model of a strong, stable democracy. 
It is in the interest of the United States to help Bangladesh's 
economy and democracy prosper. A valued partner in the war on 
terror and a moderate voice in regional and international fora, 
Bangladesh is also the top manpower contributor to U.N. 
peacekeeping missions.
    Our programs seek to improve basic education, provide high-
impact economic assistance, and target improved health services 
for Bangladeshi women and children. U.S. assistance programs 
also seek to increase the accountability and effectiveness of 
Bangladesh's democratic institutions and to promote human 
rights and the rule of law.
    To conclude, Mr. Chairman, achieving U.S. goals in South 
Asia has never been more critical to our national security or 
to the stability of the region. I will close by reemphasizing 
that the United States has significantly deepened its 
relationships in South Asia. We are making progress in the war 
on terror. We have contributed to the reduction of tensions and 
supported the resolution of conflict and will continue to do 
so. We have championed stronger democratic institutions, 
development, and economic reform, and I want to emphasize that 
the South Asia Bureau's public diplomacy efforts support these 
policy goals as well.
    As the war on terror continues, we are using public 
diplomacy programs to counter extremist influences and 
encourage moderate voices in universities, media, government, 
and religious and business organizations, but there remains a 
great deal to accomplish. I look forward to working together 
with the Congress as we continue to pursue these very important 
goals, and I would be happy to answer any questions you may 
have. Thank you.
    [The prepared statement of Ms. Rocca follows:]

 Prepared Statement of Hon. Christina B. Rocca, Assistant Secretary of 
                       State, South Asian Affairs

                       regional policy priorities
    Chairman Lugar, members of the Committee, thank you for inviting me 
to come here today to talk about how U.S. foreign assistance programs 
for South Asia support our policy priorities and efforts in the region.
    Mr. Chairman, even as we advance our efforts in the Middle East, 
South Asia remains at the front lines of the war on terror, and 
regional stability remains critical. We must remain actively and 
effectively engaged in this region where our most vital interests are 
at stake. U.S. support has contributed to substantial progress over the 
past year and a half. Eighteen months ago, we could not have foreseen 
that Afghanistan would convoke a representative Loya Jirga, select a 
transitional government to preside over reconstruction, and draft a 
constitution. Afghanistan must shortly begin preparations for national 
elections in June 2004. Pakistan's effective support for Operation 
Enduring Freedom has been equally welcome. Pakistan's October 2002 
elections re-established a civilian government, and we are providing 
assistance towards a full return to democracy there.
    We have experienced the close cooperation of all the countries in 
the region in the war against terror, and were able to play a helpful 
role last spring and summer to defuse a dangerous crisis between India 
and Pakistan that could have led to a catastrophic conflict, and we are 
redoubling our efforts to reduce tensions in Kashmir. Regional 
stability has been served by Sri Lanka's progress towards ending a 20-
year civil conflict. However, we must assist Sri Lanka to achieve and 
consolidate peace, and Nepal to avoid resumption of a Maoist insurgency 
and to shore up its fragile democracy. With an eye to the future, we 
will continue to transform our relationship with India, a rising global 
power, and will help the moderate Muslim democracy of Bangladesh, which 
faces difficult political divisions and significant economic 
challenges, towards greater stability and economic growth.
   assisting south asia's frontline states: afghanistan and pakistan
    As we move into FY 2004 and beyond, helping Afghanistan to 
establish lasting peace and stability will require a continued 
commitment of U.S. and donor resources to four interlocking objectives, 
consistent with the goals of the Afghanistan Freedom Support Act.

   Afghanistan must establish internal and external security, 
        without which economic reconstruction and political stability 
        will fail. President Bush committed the United States to take 
        the lead among donors in helping to establish a multi-ethnic 
        and disciplined Afghan military. Our security assistance will 
        enable us to train and help retain troops and officers. This 
        program has made significant strides in the last few months. 
        Thanks to the Afghanistan Freedom Support Act, we were able to 
        provide $150 million under DOD drawdown authority towards a gap 
        in funding those efforts. With similar FY 2004 levels of U.S. 
        funding from all our security accounts, including drawdown 
        authority, we will be able to meet our goal to help establish a 
        strong Central Corps before the 2004 elections. Although we 
        must rely to some degree on local leaders and their militia to 
        provide interim security and stability in many parts of the 
        country, we are working with President Karzai to draw the 
        center and the regions together. We must therefore link 
        recruitment efforts to the broader process of Disarmament, 
        Demobilization and Reintegration (DDR) of Afghan fighters. We 
        are also helping the Afghan government to combat narcotics 
        trafficking, fortify counter-terror and non-proliferation 
        export control capabilities, and train police in coordination 
        with European and other donors.

   A stable and effective central government is being 
        established according to the roadmap accepted at Bonn in 
        December 2001. A Constitutional Loya Jirga is scheduled for 
        October of this year followed by national elections scheduled 
        for June 2004. We will assist those processes, as well as 
        assistance to the women's ministry, judicial rehabilitation, 
        human rights, civic education and independent media 
        development. We are providing budget assistance to help keep 
        the government operative while helping Afghans establish 
        revenue generation, while other programs support development of 
        an accountable, broad-based, and representative political 
        system. We are striving to ensure visible signs of progress by 
        the Central Government on key reconstruction needs, such as the 
        completion of the Kabul to Kandahar road segment prior to the 
        June 2004 elections. In order to enhance the Afghan 
        Transitional Authority and better link central and local 
        government, Provincial Reconstruct Teams (PRTs) have been 
        established in three locations with more to follow in late 
        spring. Initial indications of PRT success point to increased 
        stability and enhanced NGO reconstruction efforts.

   Economic reconstruction and development will bolster the 
        Bonn process and reduce dependence on donors. In January of 
        2002 at Tokyo, 60 countries, the EU, the World Bank, and the 
        Asian and Islamic Development Banks pledged over $4.5 billion 
        over six years. At the Afghanistan high-level strategic forum 
        in Brussels in March 2003, the international donor community 
        reaffirmed its commitment to Afghanistan and pledged $1.5 
        billion for reconstruction and recurrent budget assistance in 
        2003. In addition to pledging over $297 million at Tokyo and 
        $600 million at Brussels, the United States has assisted 
        Afghanistan to access frozen assets and begun initiatives in 
        the areas of trade, commerce and finance. USAID development 
        programs focus on private enterprise and employment and 
        agriculture--the livelihood of most Afghans--as well as health 
        and education. Economic Support Funds will also continue to 
        support infrastructure rehabilitation, including the Kabul-
        Kandahar-Herat ring road.

   Humanitarian needs will also continue as reconstruction 
        proceeds. We continue to support the remaining Afghan refugees 
        in Pakistan and Iran, internally displaced persons (IDPs) and 
        returnees. U.S. demining assistance as part of a larger donor 
        effort will enable the return of refugees and displaced, and 
        will support economic reconstruction.

    Mr. Chairman, U.S. relations with Pakistan have broadened 
significantly over the past 18 months. Starting with our solid 
partnership in the war on terror and our cooperation in Operation 
Enduring Freedom, we have expanded the relationship and have 
reestablished a USAID program, providing assistance in the areas of 
education, democracy, economic development and health. We have expanded 
our cooperation in law enforcement and we have begun restoring our 
military ties. In the coming years we will strengthen our programs of 
bilateral cooperation in order to deal successfully with issues of key 
interest to both our nations, including: counterterrorism, Pakistan's 
relations with its neighbors, regional stability, strengthening 
Pakistan's democracy, helping to promote economic development, and 
improving life for the people of Pakistan to help this nation continue 
moving in a positive direction.
    U.S.-Pakistan cooperation in the war on terror takes place on 
several fronts, including coordination of intelligence and law 
enforcement agencies in hunting al-Qaida and other terrorists within 
Pakistan, coordination with military and law enforcement agencies along 
the border with Afghanistan and efforts to strengthen Pakistan's law 
enforcement and counterterrorism capabilities and institutions. We 
continue to work closely with the government on counternarcotics and 
have more than a decade of successful collaboration with the Pakistani 
government, including in the tribal areas near the Afghan border. Since 
the fall of 2001, Pakistan has apprehended close to 500 suspected al-
Qaida operatives and affiliates. It has committed its own security 
forces--some of whom have lost their lives--to pursue al-Qaida in its 
border areas. Just as importantly, we are encouraging Pakistan to build 
positive, mutually constructive relations with neighboring Afghanistan 
and support its efforts to establish a stable and secure government. We 
are also assisting Pakistan to strengthen non-proliferation export 
controls.
    Pakistan's commitment to democracy and human rights will be central 
to building a stable, positive future for its people. National 
elections in October, although flawed, restored civilian government, 
including a Prime Minister and a National Assembly, after a three-year 
hiatus. We want to see accountable democratic institutions and 
practices, including a National Assembly that plays a vigorous and 
positive role in governance and an independent judiciary that promotes 
the rule of law. We will support development of the independent media 
and effective civil society advocates. These institutions are required 
if Pakistan is to develop into a stable, moderate Islamic state.
    Pakistan's progress toward political moderation and economic 
modernization will require sustained economic growth. The U.S. 
Government engages in a bilateral economic dialogue with Pakistan to 
encourage sound economic policies. We are providing debt relief and 
budgetary support, and are devoting significant resources to assist 
Pakistan's economic development, particularly in the areas of education 
as well as health, so that Pakistanis can develop the skills they will 
need to build a modern democratic state that can compete successfully 
in the global economy.
  promoting regional stability: indo-pak tensions, sri lanka and nepal
    We are redoubling our efforts to resolve and prevent conflict 
throughout South Asia in order to avoid instability favorable to 
terrorist movements seeking to relocate or expand operations in the 
region. Stability will also assist continued economic and political 
progress.
    We were deeply shocked and disturbed by Sunday's terrorist attack 
south of Srinagar, which killed 24 innocent civilians, including two 
young children. This cowardly act appears aimed at disrupting the Jammu 
and Kashmir state government's bold efforts to restore peace and 
religious harmony to this troubled state. Although the U.S. has no 
preferred solutions for Kashmir; one thing we do know is that violence 
will not provide a way forward, and should cease immediately. The 
Kashmiri people have demonstrated a desire to move forward with a 
peaceful, political solution, and their efforts should be supported by 
all sides.
    Avoiding conflict between Pakistan and India is perhaps the most 
daunting U.S. challenge in South Asia. We helped to successfully walk 
India and Pakistan back from the brink of war last year. However, 
continued terrorism like Sunday's attack threaten to provoke yet 
another crisis in the coming months. We look to Pakistan to do 
everything in its power to prevent extremist groups operating from its 
soil from crossing the Line of Control. Pakistan has taken steps to 
curb infiltration but we are asking the government to redouble its 
efforts. At the same time, we will use our good offices to continue to 
press both sides to take confidence building steps that will lead to a 
process of engagement addressing all issues that divide them, including 
Kashmir.
    We were encouraged by the results of last fall's state elections in 
Kashmir and view them as the first step in a broader process that can 
promote peace. The new state government has adopted a 31-point common 
minimum program aimed at promoting dialogue, reconciliation, human 
rights, and economic development in Kashmir. Resources required for 
this effort are primarily diplomatic. We are also examining ways in 
which modest U.S. assistance might bolster some of these positive 
developments and help build up constituencies for peace.
    Through a Norwegian-facilitated peace process, the Sri Lankan 
government elected in December 2001 moved rapidly towards peace 
negotiations with the separatist Tamil Tiger guerrillas--designated a 
Foreign Terrorist Organzation in 1997. Five rounds of talks have 
followed the initial round that began in September 2002, and the talks 
have made significant progress, although complex issues remain that 
will require time and skillful diplomacy to resolve. Several U.S. 
agencies, including Treasury, Commerce, and DOD, sent assessment teams 
to Sri Lanka last year to examine how we can most effectively use our 
bilateral assistance and engagement in support of the peace process. As 
a result, we are providing demining support, and we plan to establish 
new programs to strengthen Sri Lanka's peacekeeping capability and 
reform its military institutions. Our economic assistance and 
development programs will facilitate post war reconstruction, economic 
recovery, and political and social reconciliation and reintegration.
    In Nepal, a recent cease-fire and agreement on a code of conduct 
have raised hopes of progress with the Maoists. We believe the parties 
have come this far only because the Royal Nepal Army was able to make 
an effective stand--a goal which U.S. security assistance aims to 
bolster. In coordination with Great Britain, India and other partners, 
our security assistance will provide direly needed small arms, 
equipment and training to enable the RNA to counter the Maoist military 
threat. If a political settlement has been reached, the United States 
should be in the forefront of donors prepared to help Nepal conduct 
local and national elections and strengthen administrative and 
democratic institutions. In the near term, we will continue to support 
improved governance and respect for basic human rights, improved health 
services and rural livelihoods, and sustainable development. Our 
assistance will also support efforts to bolster government control in 
areas vulnerable to Maoist influence by funding high-impact rural 
infrastructure and employment projects.
                transforming the u.s.-india relationship
    Shared interests and values link the United States and India, the 
world's two largest democracies. We are deepening our partnership and 
are providing assistance on issues ranging from regional stability, 
non-proliferation and combating terror, to science and technology, 
economic reform, human rights and global issues. We are expanding our 
security cooperation through a bilateral Defense Planning Group, joint 
exercises and military exchanges. U.S. security assistance aims to 
promote cooperation and interoperability, and we are helping to upgrade 
India's export-control system to meet international non-proliferation 
standards.
    As we continue an expanded economic dialogue with India, U.S. 
economic and development programs aim to assist the completion of 
fiscal, trade and other reforms that will promote economic stability 
and by extension, reduce poverty. Our programs will also enable 
vulnerable groups to have better and quicker access to justice, and 
will address human rights concerns. Our health programs aim to increase 
the use of reproductive health services, prevent HIV/AIDS and other 
diseases, promote child survival, and improve access to and 
availability of TB treatment. A number of these services are delivered 
in conjunction with NGOs and the GOI using the platform of our food 
assistance, which we expect will continue, although with some degree of 
modification.
                    supporting a moderate bangladesh
    Bangladesh provides a model of a strong, stable democracy. It is in 
the interest of the United States to help Bangladesh's economy prosper. 
A valued partner in the war on terror as well as a moderate voice in 
regional and international fora, Bangladesh is the eighth most populous 
country in the world and the top manpower contributor to UN 
peacekeeping missions. Bangladesh has made marked progress on economic 
development, health and women's rights. However, political rivalries 
and corruption threaten political stability and impede economic growth, 
while law and order problems must be addressed. U.S. assistance 
programs in Bangladesh aim to increase the accountability and 
effectiveness of Bangladesh's democratic institutions and to promote 
human rights. Our programs also seek to improve basic education and 
provide high impact economic assistance and target improved health 
services for Bangladesh's women and children.
                        the maldives and bhutan
    The Maldives, a small Muslim country of 280,000 persons, has served 
as a moderate voice in international fora, including in the 
Organization of Islamic Countries. Absent a U.S. mission in the 
Maldives, engagement continues through regular diplomatic exchanges 
managed by the U.S. Embassy in Sri Lanka, through our International 
Military Education and Training program, and through South Asia 
regional programs.
    We have a cordial but modest relationship with Bhutan. We welcome 
efforts by the King to modernize the nation and to build a 
constitutional democracy. We continue to urge Bhutan and Nepal to 
resolve the long-standing plight of 100,000 refugees in Nepal. Bhutan 
needs to accept back those persons who have a legitimate claim to 
citizenship.
                            public diplomacy
    The South Asia bureau's public diplomacy efforts support the 
preceding policy goals. As the war on terror continues, we are using 
public diplomacy programs to counter extremist influences and encourage 
moderate voices in universities, media, government, religious 
organizations and business organizations and associations. Getting the 
message out is key. In Afghanistan, we recently installed a VOA 
transmitter capable of supporting country-wide AM radio. We are engaged 
in dialogue with religious leaders in Bangladesh and Pakistan, and 
through our international exchange programs are giving South Asians 
greater understanding of religious life and democracy in the United 
States. To promote stability and development in South Asia, we are 
focusing in particular on women's rights advocacy training, building 
skills in conflict resolution, and improving civic education and 
teacher competence. Other programs work to increase mutual 
understanding, particularly by reaching out youth and women, like the 
Seeds for Peace program. Finally, our public diplomacy programs will 
continue to support our goals to strengthen democratic institutions, 
extend universal education and support economic development.
                               conclusion
    Achieving U.S. goals in South Asia has never been more critical to 
our national security, or to the stability of the region. Mr. Chairman, 
I will close by re-emphasizing that the United States has significantly 
changed and deepened its relationships in South Asia. We are making 
progress in the war on terrorism. We have contributed to the reduction 
of tensions and supported the resolution of conflict throughout the 
region. We have championed stronger democratic institutions, 
development and economic reform that will lead to a better quality of 
life and long term stability for all South Asians. But there remain a 
great deal to accomplish. A more secure, democratic, stable and 
prosperous South Asia is very much in our interest, and I look forward 
to working together with the Congress as we continue to pursue those 
very important goals.
    I will be happy to answer any questions you may have, as well as 
those of committee members.

    Senator Chafee. Excellent testimony, thank you very much.
    Ambassador Chamberlin.
    Ambassador Chamberlin. Thank you very much. In South Asia, 
terror, ethnic and religious conflict and the ever-present risk 
of nuclear war present imminent dangers. USAID's assistance 
programs play an important role in addressing and preventing 
many of these threats to U.S. interests.
    Afghanistan was the No. 1 recipient of U.S. humanitarian 
assistance before September 11, and America continues to lead 
the international community in providing assistance to 
Afghanistan today. Poverty, famine, a devastating drought, and 
many years of war and civil strife created a humanitarian 
crisis that was aggravated by years of Taliban misrule.
    Since September 11, the U.S. Government has provided nearly 
$900 million in Afghan relief and reconstruction funds. In 
addition to its well-publicized school book and seed 
distributions programs, USAID has reopened the Salang Tunnel, 
which is used by 1,000 vehicles and 8,000 people per day. It 
has completed over 6,000 water-related projects and 
rehabilitated 2,500 miles of road. USAID has also funded key 
advisors to President Karzai's public office, the Ministry of 
Women's Affairs, and the Ministry of Agriculture.
    In addition, USAID's Office of Transition Initiatives has 
provided 50 small grants worth nearly $2 million to different 
Afghan Government ministries and offices to provide valuable 
reconstruction and media assistance both within and, more 
importantly, outside of Kabul. In light of these 
accomplishments, I want to take a moment to thank this 
committee for its support for the Afghan Freedom Support Act. 
Absent this key piece of legislation, the Afghan people would 
face a far different and much less hopeful future than they do 
today, and I really mean that.
    In Pakistan, USAID opened a field mission in Pakistan in 
June 2002, after 12 years of rupture following the imposition 
of sanctions in 1990. Our objectives there directly reflect our 
desire to strengthen Pakistan's capacity to combat terrorism by 
encouraging just governance, investment in people, and economic 
reform.
    Our highest priority is investing in the people of 
Pakistan. The illiteracy rate is 53 percent, one of the highest 
in the region. Nearly 40 percent of young people between the 
ages of 15 to 20 are unemployed. In response, USAID is 
enhancing teacher training, improving curricula, encouraging 
curricular involvement, and supporting literacy programs. We 
are also working in the democracy and governance sector.
    In 2002, Pakistan held a national election and restored 
civilian government with a Prime Minister and a national 
assembly, but democratic institutions are still weak. Our 
programs aim to strengthen these institutions and the political 
parties. Pakistan remains a poor country, where over 40 percent 
of the population lives below the poverty line. To stimulate 
growth, USAID's focus is on maintaining macroeconomic 
stability, reducing Pakistan's foreign debt, and encouraging 
the government to meet IMF goals.
    On the local level, we are promoting microenterprise 
development to create jobs in some of Pakistan's poorest 
regions. The U.S. Government has used the ESF cash transfer 
mechanisms to address Pakistan's foreign debt. In fiscal year 
2003, transfer of $188 million will be used to buy down $1 
billion worth of debt.
    Sri Lanka is a success story. It is a clear example of 
putting the administration's policies of accountable foreign 
aid to work. We are moving swiftly to capitalize on recent 
positive events. Successfully reintegrating the thousands of 
internally displaced persons and refugees from India will 
require substantial human and material resources. In response 
to the promising cease-fire and peace process there, we are now 
moving swiftly to accelerate our investments. We have reversed 
staffing reductions and requested additional resources in 
fiscal year 2004, in recognition that at last the country is on 
the right track.
    USAID's 2004 program will target three main areas, 
increasing the country's competitiveness in global markets, 
building constituencies for peace through transition 
initiatives, and democracy and governance reform.
    Nepal is a trouble spot. In Nepal today the situation is 
more hopeful than it has been for over a year. Just last week, 
the representatives of the Maoist rebel group and the 
government mutually agreed on a code of conduct, a peaceful 
foundation for future negotiations toward a longer-term 
political settlement of the conflict.
    A few months ago, however, the future of Nepal appeared 
bleaker. A Maoist insurgency practiced unspeakable brutalities, 
intimidation, and murder. The insurgency still controls a large 
share of the countryside, and has benefited from popular 
outrage over years of government corruption and denial of 
service to the people.
    The destructive effects of the Maoist insurgency, however, 
should not distract attention from the gains Nepal has made 
over the past 50 years. It has transformed itself from an 
isolated medieval kingdom to a constitutional monarchy and 
democracy. Child mortality and fertility rates have 
significantly decreased, literacy and food security has 
improved, yet these development gains are unevenly distributed. 
Poor governance, corruption, forbidding mountainous terrain, 
and the lack of basic infrastructure have led to wide 
disparities across regions and ethnic groups. These inequities 
provide fertile ground for the insurgency.
    Our greatest challenge is to meet the immediate needs of 
those communities most affected by the conflict through health 
and employment programs. At the same time, we must maintain our 
support for the government and the peace process. USAID plays a 
role in the USG's larger strategy in Nepal. Our emphasis is on 
health, economic security, and governance reform to combat the 
poverty and disenfranchisement that facilitated the 6-year 
insurgency. Our task is to expand opportunities for employment 
and generate growth in the private trade, agriculture and 
energy sectors. We will reinforce that work with our efforts to 
improve public sector management, deter corruption, and 
strengthen the rule of law.
    Bangladesh is one of a handful of moderate democratic 
Islamic nations of the world, but it is also an ally of the 
U.S. Government's efforts to combat terrorism. Governance 
problems continue to hamper growth there. For the second year 
in a row, Bangladesh was ranked as the most corrupt of the 102 
countries surveyed in Transparency International's annual 
corruption perception survey.
    Since progress in USAID's government-focused anticorruption 
initiatives is slow, we are also mobilizing civil society to 
fill the demand for policy reform. With 3 years of USAID 
support, Transparency International Bangladesh has become a 
regional leader not only for Bangladesh but for the other four 
South Asian countries as well.
    Looking forward, Bangladesh elections will be held in 2006. 
Now is the time to start providing constructive assistance. 
Despite governance issues, Bangladesh has met USAID's 
performance targets in the economic sector. In fact, other 
donors in the business community and the Bangladeshi Government 
view our small business and agribusiness projects as leaders, 
due their innovative and business-driven approaches.
    India, well-known to all, is a key ally and has a 
tremendous potential to be a catalyst for growth and 
development in an unstable region. India, the world's largest 
democracy of 1.1 billion people, enjoys vast economic growth, 
but India is also the home of 30 million people living in 
abject poverty, more than Africa and Latin America combined. 
India faces severe health challenges. Over 4 million people are 
infected with HIV/AIDS. Polio is reemerging in the northern 
portion of the country, and tuberculosis infections continue. 
USAID has activities in all of these areas. We have been 
especially helpful in stemming the tide of HIV/AIDS in the 
State of Tamil Nadu, and this has become a model for the rest 
of the country.
    India depends heavily on coal for its energy, causing 
widespread pollution and serious health hazards. Having 
successfully worked with Indians to reduce CO2 emissions on the 
supply side, USAID is now addressing the demand side of the 
equation through distribution reforms. We have a need to 
continue our work in India, and our program is moving forward.
    Thank you very much. I would be happy to take your 
questions.
    Senator Chafee. Thank you very much. We appreciate your 
testimony, excellent testimony.
    Assistant Secretary Rocca, you said our top concern is in 
Kashmir and what is happening there in your testimony, and you 
also said we were fortunate a year ago to walk back from the 
brink of war. Were you part of that walk back from the brink, 
and can you describe what happened then as it relates to how we 
look at what is happening now?
    Ms. Rocca. Yes, I would be happy to, Senator. The issue of 
Kashmir and the tension between India and Pakistan, as I have 
said in my testimony, is one of the biggest challenges, because 
it is a very deep-rooted problem and there is no obvious 
solution that we could impose, and it is one that both sides 
need to work out.
    A year ago, we had a situation where India and Pakistan 
were facing each other with a million men across the border 
eyeball to eyeball, and were essentially waiting for a trigger 
to go to war, and there was a lot of diplomatic effort. I was 
part of it, but I cannot take the credit because it was a major 
effort and the Secretary was involved, and the Deputy Secretary 
was involved as well, as was the international community. And 
it was one instance where the international community all got 
together very well. We all recognized the potential disaster 
that could occur, and we were able to convince them that they 
needed to at least demobilize, and that is where we were at the 
end of the year last year, both sides demobilized, and most of 
the troops are now back in the barracks.
    The entire buildup was prompted by a particularly vicious 
terrorist attack on the Indian Parliament in December 2001, and 
the problem with the situation is that a terrorist attack can 
continue, can once again spark that kind of a buildup and that 
kind of a threat to the region. We are working very hard in a 
number of ways to try to defuse the tension. We have got a 
number of initiatives underway, which we would be happy to 
discuss in another forum, of sort of ideas on how to bring the 
two together.
    However, the fact of the matter is that the terrorism and 
the violence has got to stop. That is absolutely not the 
answer. Nor is dead silence between the two countries the 
answer, either, so we are working very hard to try to find a 
way to bring them to have a more people-to-people contact, to 
have perhaps more economic contact, more economic links, and 
somehow create a situation where both countries are not putting 
the fate of the region in the hands of a terrorist who might 
want to prompt some major terrorist attack and launch exactly 
what we are trying to avoid.
    Senator Chafee. From what I understand from the recent 
news, Pakistani soldiers dressed as Indians emptied a village 
of men, women, and children and executed them pretty much. 
Those that came out of their houses were then ambushed and 
executed, is that accurate--a Hindu village--and certainly 
tensions have to be extraordinarily high. Do you see a 
remobilization of the forces that are back in the barracks, or 
is that not happening?
    Ms. Rocca. Well, first let me just--one minor tweak. Yes, 
that is essentially what happened, but there is no proof, or 
any kind of indication that these were Pakistanis yet. We do 
not know who did it. There are militants. We know that there 
are extremists on the other side of the border, yet there are 
attempts to cross the border, and some of them are successful, 
but there is no indication that the Pakistani Government was 
involved in it, so I just want to make sure that that is clear.
    In fact, the Government of Pakistan stepped in immediately 
and condemned it in the harshest language possible, because it 
was a particularly ugly, brutal attack, where indeed people 
dressed as Indian soldiers went in, took people out of their 
homes, and executed essentially what amounted to half of the 
village, which was a little Hindu village.
    Tensions are running very high. There is a lot of 
absolutely understandable anger within India, and they feel the 
need to do something. The problem is that the solution, what it 
is that one does is not a clear-cut answer, and therefore we 
are working with both sides. We are asking Pakistan to redouble 
its efforts to prevent any terrorists from crossing the border. 
That remains a key, as I mentioned earlier.
    Senator Chafee. Are the forces remobilizing?
    Ms. Rocca. Not yet, sir. Not yet.
    Senator Chafee. Very good. I know we are going to have a 
vote soon, so I will just advise you, as we go forward, 
anything we can do to help in this emerging crisis, or 
simmering crisis, if you will, keep us informed. We want to 
provide the resources necessary--I believe I speak for my 
colleagues--to prevent any escalation in this hot spot.
    Ms. Rocca. Thank you very much.
    Senator Chafee. Senator Boxer.
    Senator Boxer. Thank you, Senator. First, I want to say you 
are doing a great job. We miss you around the Senate. My staff 
really enjoyed working with you, and I teamed up with Senator 
Brownback on calling attention to the brutality of the Taliban 
long before we knew their connection with al-Qaeda, so it was 
wonderful to work with you then, and I think your explanation 
of what is happening in Kashmir is very instructive.
    I am glad Senator Chafee probed you on that, because 
basically those terrorists do what all the terrorists do, and 
that is why terrorism is our No. 1 enemy in the world. In my 
opinion, the whole notion is to destroy the possibility of any 
kind of reconciliation between people, and just have the world 
in chaos and disorder, and just that particular example that 
you have cited I think says it well.
    I want to focus on Afghanistan and just ask one question 
about that and then a question about Pakistan. We know in this 
committee that--and thank you so much for thanking this 
committee. This committee has really been a leader in the whole 
area of rebuilding Afghanistan and not committing the same 
error that was made before by walking away, and I think it is 
very important that we focus on this, and even though with all 
the other problems in the world, and God knows, there are many 
that we have to focus on, we still cannot have failure in 
Afghanistan. It is just not an option, and I want to reiterate 
that. Dave
    And that leads me to the fact that we continue to hear 
about terrible abuses committed by local warlords outside the 
control of President Karzai. When President Karzai was here, 
several of us asked him some pretty pointed questions with the 
goal of really helping him and trying to draw him out on some 
of these issues.
    We were on a bipartisan basis taken to the woodshed by the 
President, actually, and I thought it was pretty--he was not 
happy, and he felt that President Karzai was offended and so on 
and so forth. I just want to say for the record that I would 
not change one of the questions that any of us asked that day 
of President Karzai, notwithstanding the fact that the 
President--that two Presidents were unhappy with it, both 
President Bush and President Karzai, because how are we going 
to get to the truth if we do not ask these questions? These 
questions were not meant to do any harm. It was to make the 
point that we are very, very concerned.
    Now, I want to say that since that meeting there are more 
questions. We had some actions by Ismail Khan in Herat where 
security forces for Khan had been accused of beating and 
detaining a journalist working for Radio Free Europe/Radio 
Liberty, so these problems continue, and it is absurd in the 
fact that the beating took place as the Herat office of the 
Afghan Independent Human Rights Commission was opening, here 
they are beating a journalist while the Human Rights Office is 
opening across the street, so I do not think that any of us 
should duck the fact that these are problems.
    Now, I think it gets back to the fact that many of us on 
this committee want to see the international forces get more 
support and spread throughout the country. That includes 
Senator Lugar, Senator Biden, and others, most of us on this 
committee, and so I guess I want to talk to you about that a 
little bit. Is the administration still so sort of--I do not 
want to use the word intransigent, but they still feel that we 
should not expand these forces, given this latest incident in 
Herat, given the fact that the warlords continue to do harm, 
and so if you could answer that.
    Also, one of the recommendations that came out of this 
committee was giving aid to the Ministry of Women's Affairs. 
You mentioned that, Ambassador, and I worked with others on 
this committee to include an earmark of $15 million, so I 
wondered whether you intend to provide this funding to the 
ministry for fiscal year 2004, and again the sense of the 
instability in the countryside.
    Finally, I just want to pick up on Senator Nelson's 
question on Pakistan, and that is, it is such a delicate 
situation in Pakistan. You talk about some of what is happening 
in the street. I wonder, maybe you could expand on what is 
happening in the street in Pakistan, given what is going on, 
and what information are the Pakistanis receiving about what is 
going on in Iraq today, and the fact is, thank God we are 
getting so much cooperation from them on al-Qaeda, and going 
after al-Qaeda, and I am so concerned about it, and obviously 
that is being lost in the shuffle.
    So those are a few hard questions I hope you can answer. 
Thank you.
    Ms. Rocca. Senator, I do not think anyone would argue with 
you that the events in Herat are unacceptable and that Ismail 
Khan is a problem. It is one of those issues also of how to 
deal with it. Now, there are a few things that we are working. 
I will take the big picture and then go little, so I am not 
avoiding the question, I just----
    On the bigger scale----
    Senator Boxer. If you had to avoid my question, it would 
not be the first time my questions have been avoided by members 
of both political parties, so do not worry about it.
    Ms. Rocca. I do not want to avoid it, but I think we have a 
bigger strategy of trying to deal with the warlords which gets 
into our provincial reconstruction teams and trying to expand 
the writ of the central government in a way that will bring 
them on board.
    In the case of Ismail Khan and what is going on out there, 
we have a diplomat out there with the civil humanitarian 
liaison unit that is out in Herat, and he is working very hard 
out there not only to influence him but also to identify other 
potential leaders in the region and make other contacts.
    There are things going on in terms of, we have got women's 
centers out there. We are working to--the Human Rights 
Commission. It has opened up its office there, as you said, 
ironically on the same day, but it will give an opportunity for 
people to go and complain and it will give an opportunity for 
the central government to learn about them, but also to start 
dealing with them directly----
    Senator Boxer. Yes, because President Karzai says he knows 
nothing about this problem.
    Ms. Rocca. Well, this is going to help inform everybody, 
and so it is going to be a slow process, I do not think there 
is any doubt about it, and this issue with the VOA 
correspondent and the other journalist is a problem that a 
number of nations are facing, including Iran, so these are 
things that we are working on in a number of ways, but 
obviously in terms of the immediate protection of women in the 
area, the women's centers and the Human Rights Commission 
should help us start dealing with that as well.
    As for ISAF expansion, as you know, we do not oppose it, 
but we are working very hard to find ways to bring stability to 
this country, and in looking at ISAF expansion, looking at the 
size of the country and the force protection requirements 
involved, and the fact that the forces are not available from 
other nations as well, this is not really a practical--it is 
not something we oppose. If there were a way to make it happen 
I think we would be happy, but I think there are a number of 
nations involved there and none of them want to provide the 
forces for it, and as I said, the force protection issues would 
be enormous.
    So the numbers--we have looked at different ways. One is 
the civil humanitarian liaison groups, and now we are looking 
at the provincial reconstruction teams as a way of working, and 
I have to say the first three that are out, the one in Gardez, 
recently we have already been able to see, it has been on the 
ground for a couple of months now and there are some 50 to 60 
members of the military, USAID, State Department, medical 
units, engineers, reconstruction, and liaison with the central 
government to help them liaise with the locals in Gardez as 
well, and we have seen the security improve dramatically in 
that area, and the reconstruction is going well in that area, 
so we are rather optimistic that this may actually help. There 
are three of them up, as I mentioned. There are five----
    Senator Boxer. I do not want to take up too much time, so 
could you quickly answer the other two, the $15 million to the 
women's ministry, and then the last is how do you report on the 
Pakistani street?
    Ms. Rocca. I will start with the Pakistani street and I 
will let Wendy talk about the $15 million. The street right now 
is very inflamed, and the MMA is able to rally quite a fair 
amount of anti-American sentiment.
    Senator Boxer. MMA is?
    Ms. Rocca. That is the coalition of religious parties that 
managed to come into power in the western border areas of 
Pakistan and actually hold not quite a quarter of the national 
assembly and maybe 10 percent of the Senate, so they are a 
political force. They are also a force that is opposed to 
Pakistan's position with respect to the United States.
    That said, they are usually able to rally a large number of 
people and were trying to pull together million man marches, 
and those million man marches fell very far short in a country 
where this is easier to do than in other places, so the last 
big demonstration was in Lahore last weekend, and there were 
some 70,000 people who showed up, which is far short of a 
million, so they do have influence, but they are not the 
overriding sentiment in the country. Long answer.
    Senator Boxer. Thank you.
    Ambassador Chamberlin. Thank you very much for your support 
for women's programs in Afghanistan. They are most welcome. We 
are also very enthusiastic about our programs that target women 
in our Afghan programs. We have 14 women's centers that we are 
putting throughout. We have given assistance to the women's 
ministry both in rebuilding the building but also in some 
planning and capacity building and salary support.
    We have support for the women's bakery, to hire widows, 
particularly in education and getting girls back into schools, 
where we have made our greatest success for women. Thousands of 
Afghan girls are now back in school. We are targeting at 
getting women teachers back in the schools, with teacher 
training, with curriculum development. All of this is with the 
support of the Senate. We truly do appreciate it.
    Our health programs are targeting child and maternal health 
care centers in the rural areas, also another way of supporting 
women in Afghanistan.
    Senator Boxer. Mr. Chairman, through you, could we get some 
written notes on this question for what your plans are for 2004 
moneys directly to the women's ministry?
    Ambassador Chamberlin. Certainly. We would be happy to 
provide that.
    [The following information was subsequently supplied.]

                        Support to Afghan Women

    USAID shares your concern for supporting Afghan women. USAID's 
Afghanistan program supports Afghan women through both targeted grants 
and programs and by integrating sub-programs directed at women into our 
larger multi-year sector programs.
    In the early stage of our program, we used small grants to help 
establish the Ministry of Women's Affairs, support Afghan women's NGOs, 
and provide women with income generation opportunities. We also 
integrated support for women into our humanitarian programs, such as 
food aid. Our current work has focused on establishment of seventeen 
women's centers and funding programming for those centers. Our future 
work with women will address women through major, multi-year 
development programs in the sectors in which we are working.
    Below we provide specific activities and funding amounts for what 
USAID has done so far, what we are currently doing, and what we will be 
doing in FY 2004.
                past activities supporting afghan women
   Ministry of Women's Affairs: This was the first Afghan 
        Ministry to receive USAID assistance. USAID assisted in the 
        physical rehabilitation of the Ministry of Women's Affairs (the 
        auditorium and 11 offices) and provided the Minister with a 
        vehicle, office furniture and supplies, two computers and a 
        satellite phone. USAID's Gender Advisor provided extensive 
        assistance in helping the Ministry develop its first National 
        Development Budget recently. (Total activity funding: $178,718)

   Women's Resource Centers: USAID built and furnished the 
        first Women's Resource Center. (Total activity funding: 
        $60,000)

   Daycare Centers: Seventeen centers have been built for 
        Government ministries and offices to enable women to return to 
        work. (Total activity funding: $151,506)

   Widow's Bakeries: USAID supports WFP's 121 Widow's Bakeries 
        in Kabul, Mazar, and Kandahar. In Kabul, the bakeries provided 
        5,000 children with fresh bread in school. Overall, through 
        employment and provision of subsidized bread, WFP reports that 
        200,000 urban vulnerable people benefited from this program in 
        CY 2002. USAID support was over half of WFP's CY 02 budget in 
        Afghanistan. (Total USAID food aid funding in FY 2002: 
        $158,600,000; Total USAID food aid funding to date in FY 2003: 
        $42,662,800)

   Education: Trained 1,359 teachers, 907 of whom were women 
        and printed 15 million textbooks for 2002 school year, 
        contributing to an increase in girls' enrollment from 90,000 
        under Taliban in 2001 to 900,000 in 2002 school year. (Total 
        project funding including teacher training and textbook 
        printing: $7,709,535) Reconstructed 142 schools, daycare 
        centers, teacher training colleges, and vocational schools. 
        (Total activity funding approximately: $5.5 million) In 
        addition, USAID provides a food salary supplement to 50,000 
        teachers equal to 26% of pay. (see above for total USAID food 
        aid funding)

   Food-for-Education Program: Through WFP, USAID is supporting 
        distribution of food to schoolchildren in several districts of 
        Dadakhshan Province, in northeastern Afghanistan. Approximately 
        27,000 children and 1,500 teachers and service staff in 50 
        schools have received a four-month ration of wheat flour, under 
        this program, girls receive five liters of vegetable oil every 
        month as an extra incentive for regular school attendance. The 
        program increases school attendance, reduces dropout rates, and 
        encourages families to send girls to school. (see above for 
        total USAID food aid funding)

Income Generation for Vulnerable Afghan Women
    Examples include:

   3,200 women, primarily widows, received approximately $30 
        for 15 days work, producing clothing and quilts in three 
        women's centers in Charikar, Taloqan, and Maimana ($2/day is 
        also the typical wage for male labor). In addition, the women 
        receive basic health education and some English training while 
        working in the centers. (Total project funding, of which this 
        activity is a part: $750,000)

   The women of northwestern Afghanistan are receiving tools 
        and materials to generate their own income through activities 
        such as growing kitchen gardens, embroidering, producing cheese 
        and yogurt and crafting shoes. (Total activity funding: 
        $51,072)

   400 women returnees in the Shomali, an area devastated by 
        the Taliban's ruin of its household poultry stock, have 
        received 10 breeding chickens each to generate family income. 
        (Total project funding, of which this activity is a part: 
        $2,000,000)

   100 women, mostly widows, employed in raisin processing in 
        Kandahar. (Total project funding, of which this activity is a 
        part: $8,359,706)

Afghan Women's NGO Activities
    Examples include:

   Rehabilitation of the offices of the NGO, ARIANA so they can 
        provide vocational training to 1,800 women. (Total activity 
        funding: $12,470)

   Afghan Women's Network is providing returnees with job 
        skills, including managerial training, and training women to 
        participate in the political process. (Total activity funding: 
        $27,352)

   AINA provided support to Afghan women filmmakers to make a 
        film on the experience of the Afghan woman over the Taliban 
        period and hopes for the future. (Total activity funding: 
        $97,110)

   Through ACBAR, USAID supports a program to encourage Afghan 
        women and girls to read by hosting reading classes and 
        improving the country's libraries. The staff of nine libraries 
        within eight provinces is receiving training and supplies of 
        books. (Total activity funding: $61,180)
Current Activities Supporting Afghan Women
   Women's Centers; USAID is currently engaged in building and 
        providing programming for seventeen women's centers throughout 
        Afghanistan. Three of these are currently under design in 
        Jalalabad, Samangan, and Taloqan. (Total activity funding: $2.7 
        million) The Ministry has recently identified 14 more sites for 
        USAID to build and furnish centers. ($2.5 million obligated in 
        FY 2002 Supplemental funds) In addition, USAID will fund 
        programming for the centers, i.e., health education programs, 
        daycare, etc. ($5 million of FY 2003 funds to be obligated in 
        late May)
Future Activities Supporting Afghan Women
    Following the overall trend in our Afghanistan programming from 
humanitarian and quick impact activities toward longer term development 
activities, our future work to support Afghan women will be through our 
major, multi-year sectoral programs:

   Health (REACH program): One of the central goals of this 
        three year $100 million program is to reduce Afghanistan's high 
        maternal mortality rate. The program will accomplish this goal 
        by building 400 new clinics and funding performance grants to 
        NGOs to provide a basic package of health services, 
        particularly in rural areas, where medical care is most scarce. 
        A major component of this program will be to increase women's 
        access to skilled birth attendants and essential obstetrical 
        services through an extensive training program. The first 
        obligation for REACH is expected in the first week of May.

   Education (APEP program): USAID's new education program will 
        support accelerated learning programs for up to 60,000 
        children, mostly girls, that missed education under the 
        Taliban. USAID intends to rebuild between 1,000-1,200 schools, 
        benefiting 402,000 students, over three years. In addition, 
        USAID provides a food salary supplement to 50,000 teachers 
        equal to 26% of pay. (APEP budget is $60.5 million over three 
        years; $7.41 million has been obligated to date)

   Agriculture and Rural Incomes (RAMP program): Agriculture 
        employs 70% of Afghanistan's labor force, and Afghan women play 
        a large part in agriculture, especially in raising livestock. 
        RAMP will improve the technical capacity of Afghans for raising 
        livestock. RAMP will also provide women entrepreneurs with 
        innovative opportunities for credit and business training. This 
        activity will be particularly helpful for women headed 
        households, which are among the most vulnerable in Afghanistan. 
        (The RAMP budget is $150 million over three years; first 
        obligation will occur in late May)

    Senator Chafee. Senator Hagel.
    Senator Hagel. Thank you.
    Christina, we extend to you our thanks as well, as we have 
to Wendy and Bill Burns and Jim Kelly and others for your work 
in this difficult time. I was interested in your response to 
the chairman's question regarding walking back the Pakistan-
Indian conflict when we were close to the brink. I had always 
thought that it was because Armitage had threatened bodily harm 
to those people.
    He is far too modest to take credit for that, I know.
    Your testimony as well as Wendy's about the problems that 
we have in that part of the world once again highlighted the 
danger and I think the immediacy of this problem, and you both 
have had, and still do, great responsibility in this area. Of 
course, Wendy being our ambassador to Pakistan knows first-hand 
of the danger.
    Our ambassadors to India and Pakistan, as you know, have 
been here for the last few months, and I have spent some time 
with them, and they painted a pretty dark picture, as you have. 
I mean, when you look at the numbers, 300 million in abject 
poverty in India, and other facts that we do know of, how do we 
get our arms around this, in the middle of this cauldron that 
is spilling over everywhere, and then with springtime coming in 
Kashmir.
    Could you develop, each of you, a little more detail about 
what we are doing to pay attention to this? Not that we are not 
paying attention, and I understand that, but as the spring 
comes and the thaw develops, and both armies are going to be 
able to maneuver better, I suspect that we are preparing here 
for some real problems, and what you can tell us here in an 
open hearing, give us some assurance that we are not focused 
just on Iraq here, we are focused on something I think far more 
dangerous than Iraq, because there is no guesswork, just like 
in North Korea, about who has nuclear weapons and who might 
well use them.
    Ms. Rocca. Senator, first of all, let me reassure you we 
are very focused at the highest levels of government and, in 
fact, for example, yesterday the President got engaged on this 
and issued a statement as well condemning the attack in 
Kashmir. There is no lack of attention on it.
    The issue of how to bring about reconciliation is and will 
be, we envisage will be not a short process. There are steps we 
are taking on both sides, on the Pakistan side we are moving 
very hard to say this is the big picture. We are moving very 
hard to get Pakistan, to keep Pakistan on the road that 
President Musharraf set it on in January 2001, and part of that 
is dealing with the extremist elements that exist within 
Pakistan, frankly exist within the region, but since we are 
talking specifically here--and there needs to be an end to the 
violence.
    There also needs to be some path forward to have some kind 
of contact in order to prevent the very kind of conflagration 
that we all fear. I think in this forum that is about as far as 
I can go, other than that there are calls. The Secretary, in 
fact, in the last few days has spoken to the Foreign Minister 
and to President Musharraf. These calls are regular calls. The 
President has spoken to them regularly. We are in regular 
contact and trying very hard to continue to diffuse the 
situation, and there is a lot of attention focused on it.
    Senator Hagel. Thank you. Wendy, would you like to add 
anything?
    Ambassador Chamberlin. No. I think Christina covered it.
    Senator Hagel. OK. Thank you. I know we need to move on 
here, Mr. Chairman. Thank you. Thank you both.
    Senator Chafee. Senator Nelson.
    Senator Nelson. When we got the big fish in Pakistan that 
is now giving us a lot of information, tell us something about 
the cooperation of Pakistan. When Wendy was still the 
Ambassador we were actually over there the night they did five 
simultaneous raids in five cities and got a high level al- 
Qaeda person that time, but this is a year later. Tell us about 
the Pakistani Government's cooperation.
    Ms. Rocca. So far we are up to close to 500 individuals 
arrested and nabbed with the help of the Pakistani Government. 
Their assistance in tracking down al-Qaeda and the Taliban and 
bringing them to justice has been outstanding. That is really 
the only way to phrase it.
    Senator Nelson. Does Musharraf get a lot of heat for this 
publicly?
    Ms. Rocca. What he gets heat for is mainly is for the 
presence of, or the--some of these raids, they are 
misrepresented, and it is the FBI that did the raid alone, you 
know, went in and knocked down doors. This is being done by the 
Government of Pakistan. There are Pakistani officers involved, 
and when that misperception is in there, then there is a lot of 
opposition, but short of that, short of that it is generally 
supported, probably not within the MMA, may I say, because 
their rhetoric all involves going after Americans.
    Senator Nelson. What is the effort, if any, in Pakistan to 
lessen the influence or change the program of the madrassahs?
    Ms. Rocca. President Musharraf had and still has an 
education reform plan. It involves the madrassahs, but it also, 
even more importantly than just focusing on the madrassahs, it 
involves essentially fixing an education system that was 
bankrupt and broken and practically nonexistent, and the United 
States has committed over $100 million over the next 5 years to 
assist him in that effort, to assist the Government of Pakistan 
in rebuilding their education system and training teachers, and 
providing an alternative to the madrassahs. Not all madrassahs 
are bad. Not all of them only preach anti-western--or hate for 
America.
    Part of what he is trying to do is also to broaden the 
curriculum, not just as an effort to diffuse extremism, but 
also because these large numbers of Pakistani children who come 
out of the madrassahs have no employment skills, so they are 
trying to broaden it in order to provide them with other skills 
so that they will be employable as well, which will also help, 
but this is a long-term project. This is not something that can 
be done overnight.
    Senator Nelson. And how many troops are facing each other 
on the Kashmir border today?
    Ms. Rocca. Right now there are no more troops facing each 
other along the international border, and we believe there are 
still--I think there is still some 400,000 Indian troops on the 
Indian side, but please let me come back and correct that if I 
am wrong.
    Senator Nelson. And that is compared to a million before?
    Ms. Rocca. There were a million along the entire border, 
including the international border, which is about as far away 
as from each other as you and I, without the mountains in 
between.
    Senator Nelson. So they pulled back from that.
    Ms. Rocca. Yes, sir.
    Senator Nelson. And now there are 400,000 on India's side, 
and how many over here?
    Ms. Rocca. I think that the Pakistani military have all 
gone back to garrison. There was always a presence of Indian 
military in Kashmir and in the valley. There are some military, 
but other than the usual military post, I do not think there is 
a big mobilization on the Pakistani side, and on the Indian 
side there are only a little bit above the normal number that 
operates there.
    Senator Nelson. When did that disengagement occur--just 
approximately, like weeks, how many weeks after the time of the 
highest tension?
    Ms. Rocca. Oh, the highest tension sort of came to a peak 
in May and June of last year. The mobilization did not start 
until the fall--the demobilization did not start until the 
fall, so there was very high tension that entire time.
    Senator Chafee. Thank you very much, Senator. I do have a 
note there is an objection to this hearing going past 12:30, 
and we do have another panel on East Asia.
    Senator Coleman. Good man.
    Senator Coleman. Thank you. I will keep my comments very 
short, because I could be here a long time. At least I want to 
thank you for the work you are doing. I want to wish you well, 
and highlight what a tinderbox world we live in. Just one 
question. We always talk about the relationship between poverty 
and terrorism, and I know you talked about Bangladesh being a 
model of a strong, stable democracy. How is that happening, and 
are there any lessons there for us?
    Ms. Rocca. Well, Bangladesh has had three absolutely free 
and fair turnovers of power. In fact, they had regional 
elections just last week which were also deemed by the 
international community to be free and fair. They have a system 
of government which puts the governance in the hands of an 
interim government in between changeover of power, which is a 
very interesting model that others are actually looking at, 
because it works. It is a neutral government that then comes 
into power for 3 months and turns it over to the winner of the 
election.
    There is also a--I think just by virtue of the fact that 
this democracy works so well, it also is providing more leeway 
for people to express themselves, and therefore it is not an 
extremist area. I will just leave it at that.
    Senator Coleman. Thank you, Mr. Chairman.
    Senator Chafee. Thank you, Senator, very much.
    This part of the hearing is concluded. Thank you very much 
for your patience and testimony.
    [Recess.]

               HEARING SEGMENT II.--EAST ASIA AND PACIFIC

    Senator Brownback [presiding]. We will call the hearing 
back to order. I think everybody understands the circumstances 
we are under. We are under a series of votes that will be 
starting shortly on the floor, if they have not already, on the 
budget, so we will have to pop back and forth for that. We have 
asked them to notify us when there are 2 minutes left to go in 
the budget. If we can, we will probably just try to keep 
members rotating in and out. We will not have to recess. If we 
do have to recess, we will recess.
    We can only meet for another hour, I am told. There has 
been an objection from the other side going past the hour of 
12:30, so unfortunately your stop at the dentist this time will 
only last until 12:30.
    Rather than having any opening statements, if that is OK, 
on this particular topic I would like to go straight to the 
Assistant Secretary for your statement and testimony so we can 
have as much time as possible for questions and interactions.
    So Assistant Secretary Kelly, thank you for joining us.

STATEMENT OF HON. JAMES A. KELLY, ASSISTANT SECRETARY OF STATE, 
     EAST ASIAN AND PACIFIC AFFAIRS, DEPARTMENT OF STATE, 
                         WASHINGTON, DC

    Mr. Kelly. Thank you very much, Mr. Chairman. I would like 
to enter my statement here for the record.
    Senator Brownback. Without objection.
    Mr. Kelly. And if you do not mind, I will just pick out 
some highlights from it, and I will try to be very, very brief 
in what we do, because the structure of the East Asia and 
Pacific Region is such that the money we seek for foreign 
assistance, which is the focus of this hearing, is not in 
precise balance with the, let us say, tensions associated with 
the issue because obviously, the Korean Peninsula is a serious 
issue, and for excellent reason, North Korea is not a recipient 
of formal foreign assistance, although in many respects because 
of the humanitarian aid issues North Korea has been a very 
large recipient indeed.
    We do focus our ESF efforts and our development assistance 
efforts--I am delighted to have Ambassador Chamberlin here with 
me to talk about that--in Southeast Asia and, in particular, in 
the Muslim-populated countries, Indonesia especially, a 
struggling new democracy, and of course, the Philippines has 
some serious problems now, and our programs have been 
particularly focused in that way.
    Combating terrorism in the region, though, ranks at the top 
of East Asia and Pacific Region's list of immediate priorities, 
and this is inextricably linked to our long-term and 
overarching goal of regional stability, but it also impacts 
directly on each of our five top goals for the region, which 
are, promoting and deepening democracy, improving sustainable 
economic development, countering proliferation in weapons of 
mass destruction, countering international crime in the region, 
and promoting open markets. Since 9/11 combating terrorism has 
had important resource implications to be factored into our 
Bureau's business plan.
    On terrorism, skipping over some of the material in the 
formal statement, I want to point out that bilaterally we are 
cooperating with our five East Asian allies and partners in 
combating terrorism and also with China and other close 
friends. We are also working very closely with ASEAN, the 
Association of Southeast Asian Nations, the ASEAN Regional 
Forum, the region's only multilateral security forum, and APEC, 
Asia Pacific Economic Coordination, in a regional and 
multilateral cooperation on terrorism.
    In the coming fiscal year, we look to work very strongly on 
terrorism with other departments of the government and other 
bureaus within the State Department. Efforts in the 
counterterrorism effort have focused on training, helping 
countries, particularly in Southeast Asia, to recognize that 
there is a terrorism threat, that terrorists know no boundaries 
and can show up and cause serious problems, as we saw with the 
terrible Bali bombing of last October.
    Additionally, we try to work with financial institutions on 
things like financial controls to get at the root of money that 
sustains terrorist issues, and on things like improving airport 
security as well.
    Regional stability, of course, is an overarching strategic 
goal, and in fiscal year 2004 we will have both foreign 
military financing [FMF] and international military education 
and training [IMET] to be used as tools for expanding and 
deepening U.S. regional influence with allies and friends.
    We also will expand our cooperative relationships with 
other key states, including China, where we will coordinate and 
monitor rule-of-law programs in the fiscal year under request. 
We intend to draw on and enhance the potential contributions of 
the regional multilateral organizations, as I mentioned before.
    In particular, we are trying to do some new work with the 
ASEAN Secretariat, which is headquartered in Jakarta. Because 
of the enormous diversity in the 10 countries of ASEAN, in 
terms of development and democratization in particular the new 
ESF funding in our fiscal year 2004 request will support 
expanded U.S. engagement with ASEAN to enhance its stabilizing 
role in Southeast Asia.
    Democracy is, of course, a key issue, and democratic values 
have spread enormously in East Asia. In the past decade, the 
Philippines, South Korea, Thailand, Mongolia, and Taiwan have 
consolidated relatively young democracies. Indonesia, under 
authoritarian rule for 30 years, remains in a struggle for 
democratic transformation. There will be the first direct 
Presidential election ever in Indonesia to be held in 2004, and 
we are trying to build election procedures in this enormously 
spread-out country.
    There are other efforts that use ESF and DA funding to 
reinforce educational opportunity and the demand for honest 
government. The decentralization of what was an entirely 
centralized government brings on an enormous need in a place 
like Indonesia to improve administrative skills, and Ambassador 
Chamberlin and her USAID staff are working very hard on that.
    Training of police is a significant element, and the police 
were simply a poor adjunct of the Indonesian army for many 
years. They have only really been independent now for about 3 
years, and showed in many respects this newness. On the other 
hand, in their response to the Bali bombing, in which they have 
gone from one end of Indonesia to the other to track down and 
identify terrorists, they seem to have gotten at least a 
significant number of the people who perpetrated or were behind 
that terrible crime, and trials are starting now on that crime.
    Elsewhere in the region, the democratization process has 
been pretty slow. We have to continue to promote more open 
societies and democratic governments, for example, in Laos, 
Cambodia, Vietnam. Burma itself steadfastly resists any real 
suggestion of democracy, and this is a problem. We will focus 
particularly on states where there is the evidence of some 
progress toward these goals.
    International crime and transnational issues are another 
principal focus, including emphasis on narcotics trafficking 
and the epidemic of infectious diseases, especially HIV/AIDS, 
malaria and tuberculosis, which hit our region very hard now. 
In conjunction with USAID and with other bureaus in the 
Department of State we are working to address these problems 
and to supplemental bilateral solutions.
    The EAP regional women's issues account tries to develop a 
regional approach to the problem of trafficking in persons, of 
which there is now a very interesting and significant report 
and evaluation moving into its third year. The objective of our 
assistance is to reduce trafficking in children, to eliminate 
violence against women, and to increase women's empowerment and 
status through increased participation in the political 
process.
    Our efforts have concentrated on projects in what are 
called tier 3 countries such as Cambodia and Indonesia to try 
to help them improve their performance, but other countries 
have problems with trafficking in persons, sometimes for sex 
business purposes. It is interesting, Korea received a low 
mark, started paying attention, changed its laws, saw the 
development of nongovernmental organizations to provide support 
for these people, and significantly, in less than a year, 
enormously responded to this effort.
    We have had progress, understandably slower in parts of 
Southeast Asia. I will not dwell long on open market and 
economic development efforts, but here, too, and in particular 
in Indonesia, we try to work with the financial systems of the 
country which are key to the development process in the future 
and to improving corporate governance and restructuring and 
promoting regulatory reform and pressing for trade and 
investment liberalization.
    On weapons of mass destruction, our efforts, of course, 
apply to each and every country. Proliferation is a very 
serious concern. This is not a matter in which we have sought 
particular foreign assistance funding, but of course it remains 
an extremely high priority for us. We are going to try to, in 
the years to come, work closer with particularly Indonesia. 
There are restrictions on our military-to-military relations 
which we are not at the moment seeking to lift, but we will at 
some appropriate time, because although the Indonesian army has 
been guilty of terrible abuses in the past, it is an 
organization that is essential to that country and that needs 
to be improved. We have to find a way to work with the more 
positive elements within the army, but we have not quite found 
that yet.
    Additionally, current legislation restricts assistance to 
the central government in Cambodia, which faces elections in 
the summer of this year, July 2003. The advent, if these 
elections are successful and free and fair, is going to be 
extremely important as an indication of whether we can and will 
seek any change in the restrictions that limit our assistance 
in Cambodia to nongovernmental organizations.
    With that awfully quick and cursory summary, Mr. Chairman, 
I will end my remarks and be ready to respond to questions.
    [The prepared statement of Mr. Kelly follows:]

   Prepared Statement of Hon. James A. Kelly, Assistant Secretary of 
                 State, East Asian and Pacific Affairs

    Mr. Chairman, I am pleased to share with the Committee our 
priorities for assistance in the East Asia and Pacific region.
                             u.s. interests
    Combating terrorism in the region ranks at the top of EAP's list of 
immediate priorities. This is inextricably linked to our long-term and 
overarching goal of regional stability, but it also impacts directly on 
each of our five top goals for the region: promoting and deepening 
democracy; improving sustainable economic development; countering 
proliferation and weapons of mass destruction; countering international 
crime in the region; and promoting open markets. Since 9/11, combating 
terrorism has important resource implications that must be factored 
into our Bureau business plan.
    Terrorism: The growth of terrorist networks in the EAP region 
presents a direct threat to U.S. national security, to the welfare of 
Americans overseas and to the security of U.S. allies and friends in 
the region. Terrorism carries enormous potential to disrupt regional 
trends toward peace, prosperity, and democracy. It adds new urgency to 
our efforts to pursue non-proliferation and Weapons of Mass Destruction 
(WMD) goals in the region, and affects how the Bureau promotes open 
markets and transnational crime objectives. Our preeminent goal, 
therefore, must be to ensure that terrorism and its practitioners are 
rooted out of every country or safe haven and that we address 
conditions--financial, economic and political--that render the region 
vulnerable to terrorism.
    To succeed in this effort, we must secure the active cooperation of 
others in the region. Bilaterally we are cooperating with our five East 
Asian allies and partners committed to combating terrorism, and with 
China and with other close friends. We are also working very closely 
with ASEAN, the ASEAN Regional Forum (ARF), and APEC to develop 
regional, multilateral cooperation on terrorism. In FY 04 we will 
continue to work closely with other State Bureaus, particularly S/CT 
and DS, and with other USG agencies, including Treasury and DOD, and 
DHS to further enhance this reinforcing web of bilateral and 
multilateral relationships that foster not only a greater U.S. ability 
to combat terrorism in the region, but also leverage growing intra-
regional efforts to come to grips with terrorism. Resources for this 
effort must come not only from EAP but also from other counter-
terrorism funding sources available to the Department and other 
agencies.
    Regional Stability: Regional stability remains our overarching 
strategic goal and provides the underpinning for achievement of other 
key goals and objectives. Active U.S. engagement and renewed emphasis 
on our alliance relationships has helped keep the East Asia and Pacific 
region generally stable. Nevertheless, the Korean Peninsula and the 
Taiwan Strait remain sensitive and potentially volatile. Our ability to 
deter conflict is currently strengthened by several factors, including 
the mutual interests of key East Asian powers in working cooperatively 
to address terrorism and shared interests in keeping interstate 
frictions within parameters conducive to economic recovery and growth. 
Terrorism in Asia carries the potential to destabilize friendly 
governments in Southeast Asia.
    In FY 04, we will continue to carefully manage ties with five 
regional allies--Japan, Korea, Australia, the Philippines, and 
Thailand--to maintain our ability to sustain a stable and secure 
environment in the region. Our strategies in this effort include the 
forward deployment of military assets. In FY 04 both FMF and IMET will 
be used as tools for expanding and deepening U.S. regional influence 
with allies and friends. We also will expand our cooperative 
relationships with other key regional states, including China, where we 
will coordinate and monitor rule of law programs in FY 04. We intend to 
draw on and enhance the potential contributions to regional stability 
of regional multilateral organizations, including the ARF, APEC, and 
ASEAN. In particular, the new ESF funding in our FY04 request will 
supported expanded U.S. engagement with ASEAN to enhance its 
stabilizing role in Southeast Asia.
    Democracy: Stability and prosperity create good conditions for the 
development of democracy. In East Asia, the generally stable 
environment has created conditions in which democratic values have 
gradually been incorporated into the governing structures of many 
regional states. In the past decade, the Philippines, South Korea, 
Thailand, Mongolia, and Taiwan have consolidated their relatively young 
democracies. Indonesia, under authoritarian rule for thirty years, 
remains engaged in a struggle for democratic transformation. We will 
continue our efforts to foster democracy in Indonesia with ESF and DA 
funding. These efforts are designed to reinforce educational 
opportunity, domestic demand for honest government and greater respect 
for individual human rights; they also underscore key dimensions of the 
U.S. counter-terrorism effort in Indonesia.
    Elsewhere in the region, the democratization process has been 
slower to develop. We will continue to promote more open societies and 
democratic governments in key areas, including in Laos, Cambodia and 
Vietnam. We will focus particularly on states where there is evidence 
of some progress toward these goals. These are critical components in 
the development of a stable and enduring framework for overall regional 
development.
    We are watching developments closely in Burma for signs of change. 
Lately, Burma has shown no signs of interest in a dialogue with the 
democratic opposition that could lead to progress in that country.
    International Crime and Transnational Issues: Our strong diplomatic 
and military presence in the region will be key to addressing immediate 
and pressing transnational challenges that arise. These, almost by 
definition, will require multilateral solutions, and several of them, 
the most obvious being terrorism, already pose a serious challenge to 
regional stability. We will work with USAID, as well as with other 
Department bureaus to keep ahead of the advancing trends that have 
internationalized once-local problems. For example, narcotics 
trafficking and the epidemic of infectious diseases, especially HIV/
AIDS, malaria and TB, are hitting our region harder now. In 
coordination with USAID and with INL and OES Bureaus, we are working to 
address these problems and seeking to supplement bilateral solutions 
with multilateral approaches.
    Through our EAP Regional Women's Issues Account, we are developing 
a regional approach to the problem of trafficking in persons (T1P). Our 
objective is to reduce trafficking of women and children, to eliminate 
violence against women, and to increase women's empowerment and status 
through increased participation in the political process. Our efforts 
have concentrated on TIP projects in eligible Tier 3 countries, such as 
Cambodia and Indonesia, to help them improve their performance. In 
addition, we are providing assistance to Tier 2 countries that face the 
risk of being downgraded to Tier 3. We are adjusting our foreign 
assistance and technical training priorities to reduce the level of 
trafficking in the region. Our FY 04 request account is for $3 million.
    Open Markets/Economic Development: Although related to our goals on 
terrorism, democracy and regional stability, promoting open markets and 
pro-growth policies is an essential goal on its own merits. U.S. trade 
with East Asia now exceeds that with Western Europe. Asia includes some 
of the largest and fastest growing economies in the world. Open 
economies support U.S. jobs and income, broaden the foundations on 
which democratic institutions can be constructed, and create incentives 
to settle problems peacefully.
    Sustained economic recovery from the Asian Financial Crisis of the 
late 1990's will require significant additional reform efforts. We 
continue to work multilaterally and bilaterally to help restore long-
term growth prospects by strengthening Asian financial systems, 
improving corporate governance and restructuring, promoting regulatory 
reform, and pressing for trade and investment liberalization. Recovery 
of the Japanese economy is crucial to regional recovery, and we 
continue to urge the GOJ tackle deflation and implement fully its plans 
for structural and financial sector reform, as well as measures to 
become more open to foreign direct investment and trade. We are pleased 
with the successful conclusion of negotiations on the U.S.-Singapore 
Free Trade Agreement (FTA) and look forward to its implementation as an 
example of advancing free trade in Asia. We closely monitor China's 
compliance with its WTO obligations, which will increase the access of 
the Chinese people to goods, ideas and information, encourage further 
economic reform and, advance the rule of law. We work closely with U.S. 
business in our effort to promote these market-oriented, pro-growth 
policies in the region.
    Not all countries in the region have shared in the economic growth. 
Significant development needs remain throughout the region, including 
in Mongolia and in the Philippines, Indonesia and several other ASEAN 
states, particularly ASEAN's newer mainland Southeast Asian members. We 
recognize that the immediate post 9/11 demands of the war on terrorism 
have diverted resources from this region. These factors require that we 
take a fresh look at our program resources and where they are focused. 
While we could always spend additional resource on economic development 
in the EAP region, we are effectively using our current level of 
funding to meet key regional goals such as stemming the growing links 
between the EAP region and the South Asia-based terrorist networks and 
eliminating poverty in the region that terrorists are poised to 
exploit.
    Our program requests for FY 04 reflect a realistic effort to 
address terrorism directly and also through programs designed to reduce 
its appeal to economically and politically disadvantaged populations. 
Our Philippines programs offer a good example. Supplemental and FMF 
funding is addressing weaknesses in Philippine military capabilities to 
combat terrorist groups, while our ESF programs, such as Livelihood 
Enhancement and Peace program in Mindanao that has enabled 13,000 ex-
combatants to take up peaceful pursuits such as farming, have been 
successful in developing better alternatives for populations 
susceptible to terrorist recruitment. In FY 04 we must maintain ESF 
funding for the Philippines at $20 million to adequately continue 
momentum for social foundations for peace. In conjunction with INL, we 
are also looking at ways to enhance civilian police capabilities.
    Weapons of Mass Destruction: Proliferation of weapons of mass 
destruction, nuclear, chemical, and biological, and their means of 
delivery have been a major concern in East Asia during the past decade, 
but have become even more urgent since 9/11. We continue to work toward 
a reduction of this threat, including through discussions with China 
focused on getting the PRC to adhere fully to existing bilateral and 
multilateral nonproliferation arrangements. The latter includes China's 
commitments contained in the November 2000 missile nonproliferation 
arrangement, as well as getting China to fully cooperate in pre-license 
and post-shipment verification checks related to U.S. dual-use exports. 
We are asking for China's cooperation in bringing other countries under 
the discipline of multilateral arms control and nonproliferation 
arrangements. We are also working to prevent, contain, and reverse the 
possibility that such WMD might become available to non-state terrorist 
organizations.
    Modifications of Current Restrictions: EAP priorities for FY 04 are 
to sustain our foreign assistance to Indonesia and the Philippines. 
Existing restrictions on our ability to consider a full range of 
security assistance options for Indonesia reduce the Administration's 
flexibility in military-to-military relations. While conditions are not 
now in place to warrant removal of restrictions, we are not seeking 
that today; we are working towards the time when that will be possible.
    Current legislation restricts assistance to the central government 
of Cambodia. Provided that the situation in Cambodia improves, 
including successful free and fair elections in July 2003, greater 
flexibility in allowing closer cooperation with the central government, 
might be in the U.S. national interest: Types of assistance that could 
then be considered include: enhancing counter-terrorism capabilities; 
promoting rule of law and justice; and developing a smaller more 
professional military.
    Cambodia needs training in immigration, border security, and other 
areas critical to our global fight against terrorism. IMET funds could 
be used to professionalize the Royal Cambodian Armed Forces through 
training in human rights and rule of law as well as help officers 
contribute to regional stability and play an effective role in 
transnational issues (narcotics, human trafficking, border security, 
and protection of land and natural resources) through additional 
training in civil-military relations and military justice.
                               conclusion
    The foregoing represents a brief overview of the EAP Bureau's top 
goals and objectives, and the resources we will need to meet them. It 
incorporates our best assessment of the region-wide demands and 
requirements we should work to meet, but it cannot incorporate resource 
requests for major, unanticipated events that could emerge without 
warning in the region, including on the Korean Peninsula.

    Senator Brownback. Good. Thank you very much for that 
summarization.
    Ambassador Chamberlin, did you have prepared testimony you 
wanted to give?

 STATEMENT OF HON. WENDY CHAMBERLIN, ASSISTANT ADMINISTRATOR, 
  BUREAU FOR ASIA AND THE NEAR EAST, UNITED STATES AGENCY FOR 
       INTERNATIONAL DEVELOPMENT [USAID], WASHINGTON, DC

    Ambassador Chamberlin. Yes, Mr. Chairman. I also have 
written testimony which, with your permission, I will submit 
for the record.\1\
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    \1\ Ambassador Chamberlin's written testimony can be found on page 
12.
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    Senator Brownback. That will be included without objection.
    Ambassador Chamberlin. I will try to even pare back a bit 
my oral remarks here so that you can get to your questions.
    As our Nation is fighting terrorism in Iraq and 
Afghanistan, we must continue to pay attention to terrorism and 
other threats to stability in East Asia. Countries like 
Indonesia and the Philippines are also frontline states in the 
war on terrorism, and by strengthening economic reforms, 
democracy, education, and health, USAID programs help to 
address the threat of terrorism directly to East Asia and the 
Pacific.
    Conditions across Southeast Asia vary greatly. Despite 
major economic gains of the past decade, several fragile States 
still threaten to become failed ones, yet it also remains a 
region of great economic and democratic promise.
    One of the most pressing regional issues I would like to 
highlight again is trafficking in persons. I think Assistant 
Secretary Kelly has amplified some of the problems and 
challenges in the region, and I would like to take this 
opportunity to thank you for your contributions in introducing 
legislation that developed the report and reinvigorated our 
effort in trafficking of persons and has had, as Assistant 
Secretary Kelly has pointed out, enormous good results. Thank 
you very much.
    Within the broader context, let me highlight some of the 
key programs we have in individual countries. In Indonesia, the 
largest most populous Muslim country in the world is a critical 
partner in the U.S. Government efforts to combat terrorism and 
maintain stability in the region. We have drastically 
reconfigured our aid program in Indonesia to respond more 
effectively to post-9/11 policy priorities. USAID has 
contributed directly to three of Indonesia's most important 
recent developments.
    Signed on December 9, 2002, Aceh's fragile Cessation of 
Hostilities Agreement. It has greatly reduced the armed 
conflict that was killing almost 90 civilians a month and had 
wreaked havoc on local livelihoods. Not only did we support the 
peace dialog, but we have also taken the lead in monitoring the 
ongoing truce.
    For the first time, in 2004 Indonesians will have the 
opportunity to directly elect their President, Vice President, 
and legislators, a major milestone for a country on its way to 
becoming the world's third-largest democracy. These elections 
are the direct result of U.S.-sponsored constitutional 
amendment. We are following up that support with work toward 
free and fair elections and strengthening the voices of 
moderate Islamic groups.
    In the environmental arena, our partnership with the 
private sector to combat illegal logging not only leverages $4 
for every USAID dollar spent to support resource management, 
but it also directly contributes to higher incomes for the 
rural poor.
    In the Philippines, the Philippines is on the front lines 
of the war on terrorism in Southeast Asia. Mindanao, the home 
to an ongoing internal conflict between Muslim separatists and 
the Philippine Government has received approximately 60 percent 
of our bilateral budget since fiscal year 2002. USAID programs 
have successfully reintegrated 13,000 former combatants into 
their communities, and we are training an additional 12,000 in 
2003 and 2004. This is a highly successful project, and one we 
are very proud of.
    In Mindanao and elsewhere in the Philippines, health 
services are being devolved to the local level. This is a 
challenge and an opportunity to local governments, and USAID is 
helping to build their capacity to provide primary care as well 
as TB and malaria management. Unfortunately, the Philippine 
economic and fiscal performance is disappointing. In 2002, the 
public sector deficit was an alarming 6 percent of GDP, largely 
due to failing tax collections. USAID's programs are critical 
to combating the pervasive corruption that undermines the 
economy and political stability. At least that is our 
intention.
    In East Timor, the newest nation on the world stage, it is 
an exciting and crucial time for our support to a blossoming 
democracy and economic development. Our aid programs are 
supporting the Timorese as they establish a democratic 
government and an independent media. We are the second-largest 
bilateral donor after Australia, as East Timor begins to take 
advantage of the projected oil and gas revenues from the Timor 
Gap, we will reassess our future assistance levels.
    Cambodia ranks amongst the poorest countries in the world, 
with an annual per capita GDP of only $280, a very low literacy 
rate, and a high official HIV/AIDS infection rate in Asia. 
Burma may be higher, but Cambodia's is certainly very, very 
high.
    Years of war, genocide, and political corruption continue 
to weigh heavily on Cambodia. We are supporting Cambodia's 
tentative steps toward democracy. Years of U.S. Government 
support have fostered strong, motivated NGOs with whom we are 
now working to combat corruption and engage the public in 
monitoring government activities, particularly in light of the 
upcoming July elections.
    Cambodia's health services are still very weak, so our 
focus there is on rehabilitation of severely malnourished 
children, training of midwives, malaria prevention, and 
immunization outreach. Given Cambodia's high HIV prevalence, 
USAID's most significant investment is in HIV/AIDS prevention 
and care.
    Consistent with appropriate legislation, we do not 
contribute funds to any entity of the Royal Cambodian 
Government. However, the increased flexibility in recent years 
to coordinate our work with certain parts of the government has 
enhanced our effectiveness.
    In Vietnam, a country of 80 million people occupies a 
strategic position related to China. This is an economy that 
has the potential to take off, but today it still remains very 
poor. The main thrust of our aid program is to support the 
implementation of the U.S.-Vietnam bilateral trade agreement. 
Since signing the agreement in December 2001, imports from the 
United States have grown by 26 percent, and exports to the 
United States by 129 percent.
    In Burma, Burma remains an authoritarian state with serious 
health and economic growth issues, a drug trade, and rampant 
human rights abuses. Our work in Burma is guided by appropriate 
earmarks and is focused on promoting democracy and human 
rights. Last year, we began to address the serious HIV/AIDS 
situation in Burma, where the infection rates, estimated as 
high as 4 percent, may be the highest in all of Asia. We hope 
to expand this program and request additional funding for 
fiscal year 2004.
    Laos faces serious human rights concerns and widespread 
acute poverty and disease. Therefore, our aid in Laos is 
largely humanitarian. While the program is quite modest, it 
works hard to create jobs, promote targeted growth through a 
silk production project, improve maternal and child health and 
educate children about unexploded ordnance.
    Mongolia. With USAID's assistance, the Government of 
Mongolia has made the transition to democracy and a market 
economy over the past 11 years. We have helped to rebuild the 
financial sector, guide responsible privatization, automate the 
courts, improve livelihoods. There is still much work to be 
done. A majority of the population is poor, life in remote 
rural areas is cutoff from many of the benefits of the 
country's advances. We are addressing these challenges with 
well-integrated high-performing programs.
    Last, in China and Tibet, USAID is involved on a limited 
scale in China. At the request of the State Department, we are 
managing small programs in rule of law for both countries, and 
in Tibet we have activities in sustainable development, 
environmental conservation, and cultural preservation which 
correspond to earmarks. We are beginning a modest amount of 
HIV/AIDS prevention work in two southern provinces as part of 
the Greater Mekong regional HIV/AIDS prevention strategy.
    There are regional issues in environment, support for 
ASEAN, support for public-private partnerships, which I amplify 
greater in my written testimony and I will not get into.
    One final comment on the possible changes to the Foreign 
Assistance Act, which I know is of great concern to this 
committee. One of the committee's objectives in holding these 
hearings, as we understand it, is to consider possible 
adjustments to our basic authorizing legislation, the Foreign 
Assistance Act of 1961. USAID has put forward several 
suggestions on this subject, and I cite these in my written 
testimony.
    One of these involves the need to identify and fund the 
real cost of doing business overseas. This is a subject of 
particular interest to the ANE Bureau, given the extremely 
fluid nature of the developmental challenges that we face 
throughout our three Bureaus. USAID needs to obtain adequate 
funding for flexibility in the use of funds devoted to the real 
cost of administering development assistance.
    The demands on USAID to support new mandates to address 
global challenges such as in Afghanistan and Iraq, HIV/AIDS, 
education, MEPI, and other pressing priorities have increased 
greatly, as have the costs of providing security for our 
families in these troubled parts of the world. Meanwhile, our 
ability to fund and staff these operations has reached its 
limit.
    The solution will have to involve not only the 
identification and provision of adequate resources, but also 
new personnel and procurement authorities that will streamline 
and create more responsive systems. The Foreign Assistance Act 
could acknowledge this and signal the need for greater 
flexibility and more resources and new sources to finance the 
administrative cost in existing appropriations.
    Mr. Chairman, we look forward to working with you as you 
develop these plans. We will be happy to come up here as often 
and intensely as you would like us to.
    Senator Brownback. Good. Thank you very much, Ambassador 
Chamberlin.
    I will go up and vote and then will come back and go 
through some questions at that time.
    [Recess.]
    Senator Brownback. The hearing will come back to order. 
Hopefully we will get the budget done today. We will see.
    Assistant Secretary Kelly, it is outside the purview, 
really, of the hearing, but with having you here I think it 
would be wrong for us not to ask you to comment on the 
situation currently on North Korea-U.S. relations, and if you 
could just give us the current state of play with that and what 
has happened in the last couple of weeks I would appreciate 
that.
    Mr. Kelly. The current state, Mr. Chairman, is pretty much 
as it was when I testified before the committee 2 weeks ago. We 
still want multilateral dialog with North Korea. They still 
publicly demand a bilateral dialog that takes the position that 
the nuclear issues are solely something between North Korea and 
the United States, although we have detected in some statements 
possibly some softening of that position.
    We are continuing to explore with countries in the region, 
specifically with Japan and, of course, with South Korea and 
with China, and to a slightly lesser extent Russia, the 
prospects of entering into multilateral dialogs.
    The North Koreans, of course, have taken many actions of 
very serious concern, headlined by their withdrawal from the 
Nuclear Nonproliferation Treaty on January 10. Since then, 
there have been incidents at the DMZ. There was a very serious 
matter of their fighter planes challenging an observation 
aircraft that was over 100 miles from the nearest part of North 
Korean terrain. They have not, however, begun to reprocess, to 
the best of our knowledge, the 8,000 spent fuel rods that would 
provide a significant quantity of plutonium that is a matter of 
extraordinary concern.
    The President's commitment to a diplomatic solution to this 
situation continues, and we have several things coming up 
shortly. The Foreign Minister of Korea arrives on his first 
visit as Foreign Minister to Washington this afternoon, and he 
will be in meetings over the next several days. We expect that 
President Roh of South Korea will accept President Bush's 
invitation to come to Washington probably within the next 2 
months, and so there is going to be a number of things going 
on, but there is no particular news that I have to report 
today, sir.
    Senator Brownback. No other provocative acts taken by the 
North Koreans in the last couple of weeks, since the incident 
with the observation plane?
    Mr. Kelly. There are not any. There have been a lot of 
noisy attacks from propaganda organs of North Korea, but none 
of a directly military nature.
    Senator Brownback. Any greater support from the Chinese to 
stop the reprocessing and the development of nuclear weapons on 
the Korean Peninsula?
    Mr. Kelly. The Chinese have shown considerable signs of 
support, of working with the North Koreans and we are waiting 
for further reports from them about this matter. There have 
apparently--and we have no first-hand information--been senior 
Chinese visitors to North Korea, and other signals. China has 
been even more forthright than it was in the past in objecting 
to the development of nuclear weapons on the Korean Peninsula, 
and has made clear to us that that would be a threat to Chinese 
interests as well as those of the U.S. and other countries in 
the region, but these are just signs on the horizon, and the 
completion of any such effort remains vague and unproven.
    Senator Brownback. Any discussion within countries in the 
region, South Korea, Japan, Taiwan, of a theater missile 
defense architecture to try to protect against further North 
Korean development and potential provocative acts?
    Mr. Kelly. Concerning the prospect of a next step of the 
serious steps that North Korea might do but has not done, I 
mentioned reprocessing spent fuel rods. Another step would be 
testing ballistic missiles, which they last did on August 31, 
1998. Japan is understandably extremely concerned about the 
prospect, and we are, too, of whether there would be any such 
test of a missile.
    It would be possible for some kind of test, particularly of 
Nodong missiles, to occur with little advanced warning. That 
has not yet occurred, and if that were to happen, that would be 
another serious escalation of the process.
    As a result, though, of the threat it is very clear that 
Japan in particular has a renewed and strengthened interest in 
missile defense programs and, in fact, the government has 
significantly increased the money within the Japanese budget to 
pursue research and, I think, probably to move to more direct 
activity in missile defense soon. It has definitely focused the 
minds of the Japanese.
    South Korea is less threatened by ballistic missiles and 
more threatened by artillery, and we have not seen that kind of 
interest there.
    Senator Brownback. You mentioned that we have no formal 
assistance to North Korea, but we are providing substantial 
food aid into North Korea.
    Mr. Kelly. Some have characterized them as our largest 
recipient of assistance, because there has been almost $700 
million of food aid, Mr. Chairman, provided to North Korea 
since 1995, and we recently announced, as the humanitarian 
effort, that some 40,000 tons would be provided against the 
World Food Program's estimate of needs.
    At the same time, we are very concerned at the quality of 
monitoring to make sure that this food gets to the hungry 
people who need it inside North Korea. The economic news that 
we are able to pick up from North Korea is extremely bad, not 
just in terms of food, but in terms of all kinds of movement of 
that sad economy, and so you are right, Mr. Chairman, the food 
aid has very much been a part of our aid and it is not directly 
linked to our very serious concerns with North Korea's other 
actions.
    Senator Brownback. Are we continuing to have refugees from 
North Korea move into China, and is China continuing to 
repatriate and refoul these refugees?
    Mr. Kelly. Well, Mr. Chairman, this is, of course, a matter 
with which you are certainly interested, and I want to thank 
you for that interest and for taking the trouble to travel 
close to that border, which you did not so long ago. You have 
been there more recently than I have.
    The information we are getting is that yes, sir, reflecting 
hunger conditions, more North Koreans are coming across that 
border. Some have been returned during the fall. Quite a number 
were being sent back. We have argued very strongly to the 
Chinese that that not be done. There is less indication of 
forced returns now, but it is something that is very hard to 
monitor.
    There is no question that not all of these people are 
economic refugees, and that China, as a signatory to the 
International Refugee Convention, should be accepting some of 
these as political refugees and involving the U.N. High 
Commissioner on Refugees. China has not been doing that, and 
you are well aware that China's treatment of these refugees 
remains a serious problem.
    Senator Brownback. Is the Department looking at asking for 
assistance for North Korean refugees either for refugee support 
in China or resettlement outside of China, or refugee camps in 
places other than China, such as Mongolia? Is that reflected in 
your budget, or is that being contemplated?
    Mr. Kelly. It is not reflected in our budget. Refugee 
funding is handled in another pot, but I do not believe that 
there is any direct money for that. It is an ongoing item of 
discussion. It would probably be very difficult for us to spend 
money directly with the Government of China, or directly on 
that. There are nongovernmental organizations, though, that 
have been working with impoverished people of Korean ancestry, 
some of whom just live in northeast China, and many of whom, of 
course, have come across that border.
    The possibility of having these people come to the United 
States is something that is, I would say, getting more 
consideration than it had before. At the moment, the numbers 
are such that if they can leave China, they can in every 
instance go to South Korea, which has a substantive and serious 
program for resettling these people, but that program may not 
be enough if things continue to deteriorate in North Korea, and 
we may need to seek further authorities, but we have not 
requested those at this time.
    Senator Brownback. I may be looking at that either on this 
supplemental or in the appropriation process that we will be 
starting--well, we are starting it now, to provide authority 
and assistance to the Department to be able to help in the 
resettlement of the North Korean refugees, or to help in the 
establishment of camps or operations in or around China. As I 
mentioned to you, Mongolia, I think, has offered even to host a 
refugee camp for North Koreans. We will pursue those more with 
the agency. We wanted to let you know we are looking at that.
    Mr. Kelly. Assistant Secretary Dewey for Population and 
Refugee and Migratory Affairs and I will be very happy to be in 
contact, sir, with you and certainly with your staff about 
these refugee issues. It is a moving train. It is a serious 
problem. We appreciate your interest, and we will work with 
you, sir, to come out with the best results.
    Senator Brownback. Within the region, I do not know--
Ambassador Chamberlin, if you might be the better one to ask on 
this, you have got in the southern part of the region in Asia, 
Cambodia, Burma, Laos, Vietnam I do not know as well, but 
substantial low-income populations, or just poverty-stricken 
populations, substantial trafficking you identified and talked 
about, and you hear about a lot of pretty horrifying stories 
from people in that region. How well are we set up, or how well 
is it set up in the region to try to take care of people if 
they are in a very extraordinarily impoverished starvation-type 
situation?
    I am reflecting, I was in Thailand on the Thai-Burma 
border, and there was a number of people who had basically just 
been shoved out of Burma, they had to flee out of Burma, and 
they were in acceptable-type refugee camp situations, but it 
was pretty difficult circumstances for them, and I worry 
particularly about the most vulnerable in those populations, 
whether it is little children or widows.
    How is that being taken care of? Tell me if you are--I know 
you are not satisfied with the situation, but are you deeply 
concerned with the size and scale, or is it a limited scale? 
Are we taking care of the most vulnerable in those populations?
    Ambassador Chamberlin. It is a heartbreaking situation, 
Senator, and I certainly agree with you. We do have aid 
programs inside Thailand along the Burmese-Thai border for 
Burmese. We have some programs, for example, where we send 
medical workers with backpacks inside Burma. That is still 
going on, is it not, Jim?
    Mr. Kelly. I am frankly not sure.
    Ambassador Chamberlin. It was a program that we certainly 
had before. It was very effective. We work with a large network 
of NGO's along the Thai-Burmese border with those that are most 
vulnerable, particularly the women and children.
    We assist vulnerable groups in Cambodia, and will be 
starting up assistance to vulnerable children in Laos shortly. 
We are trying to negotiate now a child-maternal health project 
in Laos. It is very small, $300,000, but inside one of its very 
tropical jungle areas. I have been to some of those villages. 
It breaks your heart. It is small. It is not enough. Yes, we 
are concerned.
    Senator Brownback. One of the things that I have talked 
with some people about is a special category of refugees, call 
it widows and orphans category, but allowing State Department 
personnel to identify key vulnerable individuals that they may 
see in a particular area--you have got people that are out, and 
they are around in these regions--and allow them to be 
identified by the State Department for resettlement, even into 
the United States.
    In looking at our refugee programs that we have had, the 
numbers have been going way down, refugees that we have taken 
into the United States for resettlement, and I get reasoning--
and I am not sure this is going to be very valid. They say the 
numbers of refugees around the world, or the population pools 
are not there.
    It seems to me they are there, but be that as it may, but 
that we identify this special category for State Department or 
other U.S. Government workers to say, these 10 women here are 
in an extraordinarily vulnerable situation, where they are in 
this refugee camp, they should be resettled and out, or we have 
a group of 20 orphans here in this particular village that are 
being pillaged, or preyed upon by the population, they should 
be identified and taken out, and just these small type of 
groups to take care of those individuals and provide that not 
as a category that an individual could apply for, but as a 
category that State Department and other U.S. Government 
personnel could identify as having a need to be pulled out of 
this situation.
    We are working with some groups to see if we can draft that 
up and provide that authority to you. I do not know if it would 
be broadly useful, but in some narrow cases it might save quite 
a few lives.
    Ambassador Chamberlin. We will certainly pass your concern 
on to Assistant Secretary Gene Dewey.
    Senator Brownback. Let me ask you, in the Philippines and 
Indonesia, if you could go into a little more detail on the 
programs we are working with in Indonesia, particularly with 
the military, I would like to hear about it, because that is 
the largest Muslim country in the world struggling for 
democracy, and I hear from some sources it may be one of the 
most fertile grounds for terrorism to take place as well. And 
so I want to get a little more detail on what your military 
assistance is, and what work you are doing in Indonesia.
    Mr. Kelly. I will respond to that, Mr. Chairman. In 
Indonesia there has been no assistance in terms of military 
funding or, in fact, in terms of military sales for a number of 
years, particularly because of the abuses involved with the 
East Timor freedom plebiscite in 1998. Since then we have for 
the last and current fiscal years some money for what is called 
IMET. This is expanded international military education and 
training, but it is limited to civilian officials only. That 
limitation has been lifted in the appropriations committees, 
and we do have authority now to bring suitable military 
officers to the United States under IMET. It is my belief that 
that is something that we need to do.
    One of the problems with the Indonesian army is that we 
have had almost a whole generation of younger army officers who 
have matured into more senior officers who have had no exposure 
whatsoever to U.S. persons or U.S. schools, or to the United 
States at all, because of the abuses not necessarily of these 
individuals, but within the larger service. That is not good, 
in my view, and we have to try to work on it, but we are 
proceeding extremely carefully so that we are not caught in a 
situation in which we are giving training or sustenance or 
benefits of any kind to people who have been proven human 
rights abusers.
    Ambassador Chamberlin mentioned the situation in Aceh. It 
is significantly better. I think it is significantly better 
than what we might have expected it to be some 6 months ago. We 
also, of course, have had the August 31, 2002 murders of two 
U.S. citizens in West Papua. The FBI has been able to go into 
Indonesia, somewhat belatedly, and is trying to investigate the 
murders.
    These are in the other end of Indonesia, in the West Papua 
area near the mining efforts that an American company is 
involved in, and two American teachers were in a group of 
vehicles and they were murdered a matter of extreme concern 
because there have been some suggestions that this was not the 
work of indigenous guerrillas, but of some elements from the 
Indonesian army.
    So this is an area in which we have to proceed very, very 
carefully, and clearly involves crimes against America 
citizens. We are not going to rest until those involved are 
punished, but at the same time, we very much have an interest 
in the positive development of not only the Indonesian police, 
for which there is an ongoing program, but the Indonesian army 
as well.
    Senator Brownback. I do not know the situation in Indonesia 
well enough to really comment, but I know in Pakistan, when we 
started looking at this, we had discontinued military training 
programs, and I think it has really hurt us over a period of 
time, clearly in the relationship with the country and clearly 
in the ability to move forward in their establishment and work 
as a democracy, and I do not know, but it sounds like there may 
be some parallel situations in Indonesia.
    Mr. Kelly. I think it is parallel, Mr. Chairman.
    Senator Brownback. We have a vote on, and we have to 
discontinue at 12:30. Let me thank both of you for the great 
work you are doing in a world full of opportunities and 
challenges all over the place, but you are both doing excellent 
work. We appreciate it. I would offer you our office to work 
with if you have particular items that you think, you know, if 
we really had the support of this, or if we had the opportunity 
by change of legislation to do A, B, or C, this would really be 
helpful to our people in the field, well, let us know and let 
us see if we cannot work to provide that flexibility, 
authority, financing to be able to accomplish the objectives we 
are all after.
    Mr. Kelly. Thank you, Mr. Chairman. We really appreciate 
that this committee is undertaking this review and possible 
Foreign Assistance Act revisions and we are delighted to work 
with you and your staff, sir.
    Senator Brownback. Thank you very much. The hearing is 
adjourned.
    [Whereupon, at 12:30 p.m., the committee adjourned, to 
reconvene subject to the call of the Chair.]

                              ----------                              

       Responses to Additional Questions Submitted for the Record

                                ------                                

Responses of Hon. William J. Burns, Assistant Secretary of State, Near 
 Eastern Affairs, to Additional Questions for the Record Submitted by 
                      Senator Joseph R. Biden, Jr.

    Question. According to the Congressional Budget Justification for 
the FY 2004 budget proposal, ``Increased levels of funding for the Near 
East reflect the requirements of individual countries and their 
capacity to absorb additional training as part of their efforts to help 
support global counter-terrorism efforts. Military-to-military contacts 
afforded by the IMET program are particularly important in this region, 
paying dividends far into the future as students rise up the military 
and political ranks of their respective countries. In FY04, Bahrain, 
Jordan, Morocco, Oman, Tunisia and Yemen all receive substantial 
increases.''
    Please provide some concrete examples of how previous IMET training 
has paid dividends for the United States in the build-up to and the 
execution of Operation Iraqi Freedom.

    Answer. IMET is an exceptional program, probably the best ``bang 
for the buck'' with regards to promoting military engagement. While MEA 
has always supported robust bilateral military engagement, recent 
events in Iraq and the continuing war on terrorism highlight the 
importance of maintaining and in some cases increasing regional IMET 
assistance.
    NEA regional IMET-funded training courses complement our regional 
FMF programs. Together these programs support regional stability, 
reinforce frontline states, address border security requirements, and 
help secure critical sea-lanes to/from the region.
    While FMF pays for the equipment and material to support these 
objectives, IMET trains the individuals who implement them. IMET-funded 
training translates to technical competence and doctrinal proficiency 
amongst the regional officer corps. This in turn promotes 
interoperability and even more important as officers move up the 
ranks--mutual understanding.
    Interoperability and mutual understanding are critical to the 
success of many on-going activities in the region that support 
Operation Iraqi Freedom. They include: liaison officers deployed to 
CENTCOM Headquarters, missile defense and air defense coordination, 
base access and force beddown, overflight rights and canal and overland 
transit.
    For NEA countries, IMET-trained officers are routinely assigned to 
the most critical mid and high-level command and staff positions. For 
example:

   U.S. senior service school graduates command all three major 
        airbases in Oman.

   In Jordan, the CJCS and virtually every service Chief of 
        Staff as well as their Assistant Chiefs of Staff are IMET 
        graduates. Further, King Abdullah attended several mid and 
        senior-level courses during his military career.

   In Bahrain, home to NAVCENT and Fifth Fleet Headquarters, 
        both the Bahraini Naval and Air Force Commanders graduated from 
        the respective U.S. service staff college. Moreover, the King 
        is a graduate of the U.S. Army Command and Staff College.

   In Yemen, the mid-level officers filling the critical roles 
        of liaison to the CJTF-Horn of Africa and to the Yemeni MOD are 
        both graduates of the U.S. Army staff officer or advanced 
        branch training.

   The Tunisian Defense Minister is proud to say that almost 
        all his senior officers have had a course in the United States. 
        Indeed, President Ben Ali was one of Tunisia's first IMET 
        students, attending an artillery course nearly 40 years ago.

    In terms of strengthening bilateral military and political 
relationships, IMET has been an unqualified success. It warrants 
additional resources, given the real and significant return on 
investment this funding produces in terms of U.S. interests.

    Question. The FY 2004 budget proposal slates Yemen for a 
significant boost in FMF assistance, from $2 million in FY 2003 to $15 
million for the new fiscal year. Why is Yemen receiving such a large 
boost in assistance? How will it use the expanded FMF assistance?
          To what extent did the U.S. interdiction in December of the 
        North Korean vessel ferrying Scud missiles affect our bilateral 
        relationship with the Yemeni government? How have we 
        communicated our disapproval of Yemeni cooperation in missile 
        proliferation with the North Korean regime, what tangible 
        commitments have we received, and what is being done to ensure 
        that those commitments are honored?

    Answer. Yemen's FMF allocation for FY 2004 reflects its partnership 
with the United States in the war against terrorism. We have worked 
together to uproot the al-Qaida presence in Yemen, which poses a grave 
threat to us both. This cooperation has yielded a number of important 
successes, some of which were highlighted by the President in his 
January 28 State of the Union address. Yemeni forces have been active 
in all of these operations, and have at times acted entirely 
independently to eliminate al-Qaida threats.
    These actions show Yemeni resolve and the tangible results of the 
U.S. training that has been provided for Yemen's counterterrorism 
forces. We are now seeking additional FMF funding to maintain and 
upgrade further these developing capabilities. The Yemenis will use the 
$15 million requested in FY 2004 FMF funding to pay for additional U.S. 
military training, the purchase of HMMWVs to improve mobility and 
interoperability, and the refurbishment and supply of parts for its 
existing U.S. systems (C-130s, M-113 APCs). FMF funding will also 
directly support the development of Yemen's Coast Guard, which is 
slated to receive excess U.S. Coast Guard motor lifeboats in early 
FY2004. Through this assistance, we are working to establish a 
capability to finish the job against al-Qaida in Yemen, and prevent the 
terrorists from returning.
    Because of our strong bilateral relationship with Yemen, we were 
able to effectively engage the government at the highest levels on its 
military acquisitions from North Korea. We conveyed our concerns about 
these acquisitions to the Yemeni government in December, and in 
response, the Yemenis have explained that this shipment of Scud 
missiles was contracted for by the former South Yemen in 1994. Yemen 
has also assured us that these missiles will be used for strictly 
defensive purposes, and also that they will not be transferred to any 
third party. On the basis of these assurances, and Yemen's pledge to 
cease all missile and missile-related imports from North Korea, we are 
moving ahead with our vital counterterrorism and military cooperation. 
We are in a continuing dialogue with the Yemen to ensure that its 
commitments remain consistent with our foreign policy goals. We also 
continue to monitor Yemen's activities to ensure that they remain in 
compliance with its commitments.

                                 ______
                                 

Responses of Hon. Christina B. Rocca, Assistant Secretary of State for 
 South Asian Affairs, to Additional Questions for the Record Submitted 
                    by Senator Joseph R. Biden, Jr.

    Question. Why has India's FMF allocation been cut by 90% from $50 
million in the FY 03 budget request to $5 million in the FY 04 budget 
request?

    Answer. As indicated in the 653(a) report submitted to Congress by 
the Department, the FY 2003 FMF start-up program for India is now at $5 
million, so the FY 2004 request does not represent a cut in funding.
    FMF has never been a major component of our military supply 
relationship with India. India is well able to finance its military, 
with an annual defense acquisition budget in the range of four billion 
dollars. Nevertheless, as part of our continuing effort to transform 
the United States' relationship with India, we plan to provide $5 
million in FMF for India in each of Fiscal Years 2003 and 2004 to 
promote military cooperation and interoperability, particularly, in the 
areas of counterterrorism and naval cooperation.
    Although the FY 2003 request level was higher, the reasons for the 
$5 million FY 2003 start-up level include:

   The overall level of FY 2003 FMF appropriated worldwide was 
        below the request level, which had a disproportionate impact on 
        discretionary FMF.

   In addition, there are continuing competing demands for FMF 
        from other regions, including funding for other countries 
        involved in the Global War on Terrorism.

    Question. Please explain further the proposed and intended uses of 
the $75 million in FMF funding for Pakistan in FY 2004. How will such 
assistance specifically benefit Operation Enduring Freedom?

    Answer. Based on current planning with the Pakistani Ministry of 
Defense, FY 2004 FMF funds will be used for equipment to support 
Operation Enduring Freedom efforts, including airground radios to 
assist in communications and interoperability with the U.S. military, 
as well as P-3C aircraft to increase surveillance capability to track 
maritime smuggling of drugs and al-Qaida operatives.

    Question. The FY2004 budget proposal calls for a 25% increase in 
IMET funding for India and Pakistan. During the last major war on the 
South Asian subcontinent in 1971, a senior Indian military commander 
and his Pakistani counterpart negotiated a cease-fire during a battle, 
owing in part to the fact that the two men had studied together years 
earlier and thus personally knew each other.

          To what extent are IMET activities involving Indian and 
        Pakistani soldiers tailored to promote mutual dialogue and 
        interaction and build closer links between the two militaries?

          If not, should the Department incorporate this objective into 
        future IMET activities to promote a greater mutual 
        understanding between the two militaries and enhance future 
        crisis stability?

    Answer. Members of the Indian and Pakistani armed forces are often 
fellow students in IMET courses. Currently, both countries are 
represented in the National Defense University, the Army War College, 
the Naval War College, and the Air War College at the senior officer 
level, and mid-level officers from both India and Pakistan are 
attending service staff colleges of the Army, Navy, and Air Force. The 
Marine Corps University will have officers from both countries for the 
first time in the class that enters in summer 2003.
    In every IMET course, non-attribution is the standard, thus 
encouraging frank and open discussion among all participants. Faculty 
at institutions that provide IMET courses unanimously report that 
Indian and Pakistani officers at the courses often form close personal 
relationships. We understand that these relationships are long-lasting, 
and that officers who attend IMET courses often inquire about their 
course mates across the border when they encounter other graduates of 
the same institution.

    IMET TRAINING OF INDIAN AND PAKISTANI OFFICERS IN THE SAME COURSE
------------------------------------------------------------------------
                                               Years in Which Indian and
    Service              Institution            Pakistani Officers Both
                                                       Attended
------------------------------------------------------------------------
U.S. Army       Army War College              2001-2003
------------------------------------------------------------------------
                Command and General Staff     1948-1954, 1958-1965, 1968-
                 College                       1971, 1974-1981, 1983-
                                               1991, 1996-1998, 2001-
                                               2003
------------------------------------------------------------------------
                Infantry Captain Career       2002
                 Course
------------------------------------------------------------------------
                ............................  ..........................
------------------------------------------------------------------------
U.S. Navy       Naval War College             1990, 1995-1997, 2000,
                                               2001-2003
------------------------------------------------------------------------
                Naval Staff College           1990, 2002-2003
------------------------------------------------------------------------
U.S. Air Force  Air War College               1997, 2001-2002
------------------------------------------------------------------------
                Command and Staff College     2003
------------------------------------------------------------------------
                ............................  ..........................
------------------------------------------------------------------------
National        International Fellows         1986, 2003
 Defense         Program
 University
 
------------------------------------------------------------------------
This is a partial list; in some cases, records are incomplete or not
  easily accessible.

                                 ______
                                 

 Responses of Hon. James A. Kelly, Assistant Secretary of State, East 
   Asian and Pacific Affairs, to Additional Questions for the Record 
               Submitted by Senator Joseph R. Biden, Jr.

    Question. The regional Anti-Terrorism Assistance (ATA) budget is 
slated to double in FY 2004 from FY 2003 spending levels. Please 
describe the extent and nature of bilateral and multilateral 
cooperation on counter-terrorism activities between the United States 
and nations in the region.

    Answer. The ASEAN countries came to the support of the U.S. 
immediately after the 9/11 attacks. Malaysia, Singapore, and the 
Philippines also faced an immediate internal threat (i.e., from Jemaah 
Islamiya, the Abu Sayaaf Group, and others) and acted quickly to 
address it. Subsequent discoveries about the extent of targeting 
activity undertaken by the terrorist group Jemaah Islamiya (JI) also 
galvanized the political will of these governments to act, as 
investigations revealed a sophisticated, extensive and dangerous group 
linked to al Qaeda.
    Many other countries in the region were at first hesitant to 
acknowledge the seriousness of the situation, but recognition of the 
terrorist threat in Southeast Asia has increased dramatically since the 
October terrorist attack in Bali. The Bali bombings energized the 
region by driving home the reality of the terrorist presence and the 
continued threat of terrorism to all.
    With U.S. assistance, counterterrorism (CT) capabilities have been 
increased, and the results of those efforts and initiatives are cause 
for some optimism. Regional CT cooperative efforts are increasing, and 
will become more effective as states become more accustomed to working 
together to combat terrorism.
    Indonesia provides a good example of the change taking place. 
Before the Bali attack, many Indonesians were in denial about terrorism 
in their midst. Indonesia's successful investigation of the Bali 
bombing, assisted by the Australian Federal Police and the Federal 
Bureau of Investigation, has been impressive and gone a long way 
towards changing public attitudes; successful prosecution of the 
perpetrators of this crime is the next step.
    We have had good cooperation with Thailand, which has responded 
positively to our requests for support and assistance.
    Multilaterally, the ASEAN-U.S. Joint Declaration on Combating 
International Terrorism provides a chapeau for close, on the ground, 
cooperation. Cooperation among the states within the region will be 
even more important, and the signs are positive: Indonesia's arrest of 
JI's operations chief at Singapore's request is indicative of the kind 
of cooperation we hope for in the future.
    Our partners and we have had considerable success, as evidenced by 
the arrests of more than 150 JI operatives in Malaysia, Singapore, the 
Philippines and Indonesia. With continued assistance from the U.S., 
Southeast Asian countries will become more adept in arresting and 
trying terrorists, and will--cooperatively--break up terrorist cells 
and organizations. A high level of effort and creativity will be 
required, especially in terms of law enforcement cooperation, sharing 
intelligence, and cutting off terrorist sources of funds. It is our 
policy to do all we can to assist where needed and where it makes 
sense, and to help coordinate the efforts and resources of regional 
partners.
    Our strategy is to engage bilaterally and multilaterally. 
Bilaterally we engage diplomatically to build and sustain political 
will in capitals, and provide national capacity building programs such 
as the Terrorist Interdiction Program, Financial System Assessment 
Teams, and DS/ATA courses.
    Our multilateral engagement is based on the promotion of 
transnational approaches to transnational CT challenges. Regional 
conferences, and engagement with organizations such as the Pacific 
Island Forum, ASEAN (Association of South East Asian Nations) ARF 
(ASEAN Regional Forum), and APEC (Asia-Pacific Economic Cooperation) 
are the foundations of our multilateral effort.
    Much remains to be done. Terrorists operate between the seams of 
jurisdictions and national boundaries, moving men, materiel and money 
across porous national borders and exploiting weak infrastructure. As 
countries increase their CT capabilities, terrorists will search out 
more hospitable environments in which to seek haven and operate. The 
general conditions that make parts of Southeast Asia attractive to 
terrorists, including porous borders, pockets of sympathetic 
populations, and weak security infrastructure, will take a long time to 
correct, but we have made a strong start.

    Question. The issue of IMET programs in Indonesia has sparked 
concerns regarding human rights on the one hand, and, on the other 
hand, regarding the ability of the United States to work effectively 
with military forces in an area of concern to the war on terrorism. 
What are the Administration's plans regarding military-to-military 
relations in Indonesia? How will any planned activities be structured 
so as to contribute to the protection of human rights, rather than 
sending the message that violations of those rights will be tolerated 
so long as the military joins us in fighting a greater threat?

    Answer. Our military-to-military relationship with Indonesia 
supports U.S. goals of assisting Indonesia with its complex transition 
to democracy and simultaneously combating terrorism. Primarily due to 
our concerns about human rights abuses and stalled military reforms, 
U.S. interaction with the military is limited in scope and calibrated 
to provide incentives for the military to take recognizably difficult 
steps towards reform and accountability. Our security assistance 
program emphasizes, through the provision of IMET and the absence of 
many other forms of assistance, the U.S. policy of seeking 
professionalization, reform, and accountability.
    The authorization of unrestricted IMET will help provide education 
to key Indonesian military officers in areas directly related to reform 
and professionalization of the military and provides one more tool to 
encourage the Government of Indonesia to reinvigorate the military 
reform process. IMET may be a precursor to reform. Without knowledge 
and training, there is little chance of developing sufficient numbers 
of reform minded officers to make a difference in the larger 
institution. We must also be realistic, IMET is a long-term program 
that will require many years of continuity to achieve significant 
results by annually sending a handful of officers to U.S. schools.
    Military reform in Indonesia has a mixed record. The military has 
accepted more changes in its status and role in the national life over 
the past four years than at any other time in its history. It did not 
intervene in the 1999 elections, and it resisted political pressure to 
violate constitutional norms during the turbulent period of President 
Wahid's impeachment and the succession to President Megawati. The 
military has formally relinquished its special, parallel function in 
government, accepted a sharp reduction in appointed parliamentary 
seats, and agreed to the end of appointed representation in legislative 
bodies by 2004. The five-year conviction on March 12, 2003 of an Army 
General officer for East Timor human rights abuses represents a 
tangible step on the path to accountability.
    Fundamental problems remain, however. Progress on accountability 
has been slow; the military has grudgingly gone along with trials for a 
small number of officers for human rights abuses. Civilian control only 
exists in name only and discipline remains a problem. The military 
deals with inadequate central government funding through running 
unofficial businesses and foundations, and engaging in illegal 
activities. There are many other reasons for this lack of progress, 
including lack of Government of Indonesia and public will to press the 
military for reforms, institutional resistance within the military, and 
budgetary constraints. Added to these problems is the fact that the 
decade-long absence of IMET-trained military officers constrains our 
interactions with key players in regards to both CT cooperation and 
comprehensive military reform. We continue to press the Indonesians for 
thoroughgoing reforms.
    We have conveyed in the strongest possible terms to the Government 
of Indonesia that we expect them to identify and punish all those 
responsible for the August 2002 murder of Americans in Papua. Anything 
short of a full accounting and punishment for those responsible for 
this crime would be unacceptable and would have a negative impact on 
the bilateral relationship. Indonesian Government actions in this case 
would be an important factor in our evaluation of future military 
assistance programs for Indonesia, along with other factors such as 
U.S. national security interests, respect for human rights, civil-
military relations, political developments in Indonesia, and the 
regional strategic environment.

                                 ______
                                 

   Response of Ambassador Wendy Chamberlin, Assistant Administrator, 
   Bureau for Asia and the Near East, U.S. Agency for International 
  Development, to an Additional Question for the Record Submitted by 
                      Senator Russell D. Feingold

                           assistance to laos
    Question. The President does not request any development assistance 
for Laos in FY 2004. What is the reasoning behind zeroing out this 
account?

    Answer. Pressure to maintain strong programs in Afghanistan and 
Pakistan has forced the Asia and Near East Bureau to make some hard 
budget choices for the coming year, and Laos was unfortunately one of 
the casualties. We do intend, however, to look for opportunities to 
identify prior year funds to continue our economic growth program 
there. In addition, we expect to commit $1 million in FY 2004 HIV/AIDS 
funds and $350,000 in FY 2004 Child Survival and Health Program funds, 
and the Leahy War Victims Fund will provide $500,000 for care for 
civilian victims of war in Laos in FY 2004.

                                 ______
                                 

 Responses of Hon. James A. Kelly, Assistant Secretary of State, East 
   Asian and Pacific Affairs, to Additional Questions for the Record 
                Submitted by Senator Russell D. Feingold

    Question. What is the status of our military-to-military 
relationship with Indonesia? Have we linked any aspect of this 
relationship to our insistence on Indonesia's full cooperation in the 
investigation of the murder of American citizens in West Papua last 
August? Is it your view that the Indonesian military has made 
significant progress in its reform efforts over the past two years? On 
what do you base your assessment?

    Answer. Our military-to-military relationship with Indonesia is 
limited to providing training and expertise in reform, accountability, 
and professionalization. Recent authorization of unrestricted IMET 
provides one more tool to help with reform and to encourage the 
Government of Indonesia to reinvigorate the military reform process. 
Military reform in Indonesia has a mixed record. The military has 
accepted more changes in its status and role in the national life over 
the past four years than at any other time in its history. It did not 
intervene in the 1999 elections, and it resisted political pressure to 
violate constitutional norms during the turbulent period of President 
Wahid's impeachment and the succession to President Megawati. The 
military has formally relinquished its special, parallel function in 
government, accepted a sharp reduction in appointed parliamentary 
seats, and has agreed to the end of appointed representation in 
legislative bodies by 2004. The five-year conviction on March 12, 2003 
of an Army General officer for East Timor human rights abuses 
represents a tangible step on the path to accountability.
    Fundamental problems remain, however. Progress on accountability 
has been slow; the military has grudgingly gone along with trials for a 
small number of officers for human rights abuses. Civilian control only 
exists in name only and discipline remains a problem. The military 
deals with inadequate central government funding through running 
unofficial businesses and foundations, and engaging in illegal 
activities. There are many other reasons for this lack of progress, 
including lack of Government of Indonesia and public will to press the 
military for reforms, institutional resistance within the military, and 
budgetary constraints. Added to these problems is the fact that the 
decade-long absence of IMET-trained military officers constrains our 
interactions with key players in regards to both CT cooperation and 
comprehensive military reform. We continue to press the Indonesians for 
thoroughgoing reforms.
    We have conveyed in the strongest possible terms to the Government 
of Indonesia that we expect them to identify and punish all those 
responsible for the August 2002 murder of Americans in Papua. Anything 
short of a full accounting and punishment for those responsible for 
this crime would be unacceptable and would have a negative impact on 
the bilateral relationship. Indonesian Government actions in this case 
would be an important factor in our evaluation of future military 
assistance programs for Indonesia, along with other factors such as 
U.S. national security interests, respect for human rights, civil-
military relations, political developments in Indonesia, and the 
regional strategic environment.

    Question. What steps will the United States be taking in the year 
ahead to encourage greater respect for human rights in Laos?

    Answer. The promotion of human rights, including religious freedom, 
is an integral part of our bilateral relationship. We remain deeply 
concerned about Laos' poor human rights record, and continue to raise 
our concerns with the Lao government. In virtually every meeting with 
Lao officials, Ambassador Hartwick and other officers at the U.S. 
Embassy in Vientiane press on a range of issues including religious 
freedom, minority rights, the status of political prisoners, and prison 
conditions, among others.
    We are encouraged to see some modest improvements on the religious 
freedom front. A Prime Ministerial Decree governing religion seeks to 
regularize religious practice, and local religious leaders have 
responded favorably. Isolated problems remain, particularly in 
Savannakhet province, but some previously closed churches have 
reopened, and we have seen fewer detentions and arrests and no reports 
of new church closings or forced renunciations of faith with the 
exception of one localized case recently brought to our attention, 
which we are currently working with government to try to resolve.
    Over the next year, we will continue to press the Lao Government to 
address human rights issues at every opportunity. Ambassador Hartwick 
and the Embassy staff travel extensively throughout the country to 
investigate allegations of human rights abuses. We will also continue 
outreach efforts, both in the U.S. and in Laos, to ensure that human 
rights concerns are addressed and that the Lao people gain the skills 
needed to protect human rights. This includes activities such as 
training journalists and bringing emerging leaders to the U.S. on 
international visitor programs for promising Lao on topics of interest. 
IRI concluded a successful seminar in Vientiane in February 2003, on 
village elections, which we hope will expand to include other 
provinces.
    In addition, we plan to continue to encourage U.S. government 
officials and others, including members of Congress and their staff, to 
visit Laos and raise issues of concern in meetings with Lao officials. 
We also encourage the Lao government to become more actively engaged 
and cooperative with organizations such as the ICRC and UNHCR, who are 
working on human rights issues such as prison conditions and the well-
being of refugees inside of Laos.
    As one of the ten poorest countries in the world, Laos faces many 
challenges to improving its human rights record and promoting both 
democratic change and economic growth. We believe that granting NTR for 
Laos (Rep. Crane of the House Ways and Means Trade Subcommittee 
recently called for a Request for Comment on NTR for Laos) will help 
create a more cooperative atmosphere in which we can address such 
issues.

                                 ______
                                 

  Response of Hon. Christina B. Rocca, Assistant Secretary of State, 
South Asian Affairs, to an Additional Question for the Record Submitted 
                         by Senator Bill Nelson

    Question. How many troops are facing each other on the Kashmir 
border today?

    Answer. Since the two sides have pulled their strike forces back 
from the international border, the Kashmir region is the only place 
where Indian and Pakistani forces are directly confronting each other. 
Including paramilitary forces, there are at least 250,000 troops on the 
Indian side of the line of control and roughly 100,000 on the Pakistani 
side of the line of control.

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