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[Senate Hearing 112-55]
[From the U.S. Government Publishing Office]

                                                         S. Hrg. 112-55
 
                    U.S. POLICY TOWARD LATIN AMERICA

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

                                HEARING

                               BEFORE THE

               SUBCOMMITTEE ON WESTERN HEMISPHERE, PEACE

                  CORPS, AND GLOBAL NARCOTICS AFFAIRS

                                 OF THE

                     COMMITTEE ON FOREIGN RELATIONS
                          UNITED STATES SENATE

                      ONE HUNDRED TWELFTH CONGRESS

                             FIRST SESSION

                               __________

                           FEBRUARY 17, 2011

                               __________

       Printed for the use of the Committee on Foreign Relations

       Available via the World Wide Web: http://www.fdsys.gpo.gov

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                COMMITTEE ON FOREIGN RELATIONS          

             JOHN F. KERRY, Massachusetts, Chairman        
BARBARA BOXER, California            RICHARD G. LUGAR, Indiana
ROBERT MENENDEZ, New Jersey          BOB CORKER, Tennessee
BENJAMIN L. CARDIN, Maryland         JAMES E. RISCH, Idaho
ROBERT P. CASEY, Jr., Pennsylvania   MARCO RUBIO, Florida
JIM WEBB, Virginia                   JAMES M. INHOFE, Oklahoma
JEANNE SHAHEEN, New Hampshire        JIM DeMINT, South Carolina
CHRISTOPHER A. COONS, Delaware       JOHNNY ISAKSON, Georgia
RICHARD J. DURBIN, Illinois          JOHN BARRASSO, Wyoming
TOM UDALL, New Mexico                MIKE LEE, Utah
              Frank G. Lowenstein, Staff Director        
        Kenneth A. Myers, Jr., Republican Staff Director        

                         ------------          

          SUBCOMMITTEE ON WESTERN HEMISPHERE, PEACE          
             CORPS, AND GLOBAL NARCOTICS AFFAIRS          

             ROBERT MENENDEZ, New Jersey, Chairman        
BARBARA BOXER, California            MARCO RUBIO, Florida
JIM WEBB, Virginia                   MIKE LEE, Utah
JEANNE SHAHEEN, New Hampshire        JIM DeMINT, South Carolina
TOM UDALL, New Mexico                JOHNNY ISAKSON, Georgia
                                     JOHN BARRASSO, Wyoming

                             (ii)          

                            C O N T E N T S

                              ----------                              
                                                                   Page

Feierstein, Hon. Mark, Assistant Administrator for Latin America 
  and the Caribbean, U.S. Agency for International Development, 
  Washington, DC.................................................    14
    Prepared statement...........................................    16
    Responses to questions submitted for the record by Senator 
      Marco Rubio................................................    39
Kaplan, Richard H., president and CEO, Inter-American Foundation, 
  Washington, DC.................................................    20
    Prepared statement...........................................    21
Menendez, Hon. Robert, U.S. Senator from New Jersey, opening 
  statement......................................................     1
Mora, Frank O., Ph.D., Deputy Assistant Secretary of Defense for 
  the Western Hemisphere, U.S. Department of Defense, Washington, 
  DC.............................................................    23
    Prepared statement...........................................    25
    Responses to questions submitted for the record by Senator 
      Marco Rubio................................................    40
Rubio, Hon. Marco, U.S. Senator from Florida, opening statement..     5
Valenzuela, Hon. Arturo, Assistant Secretary of State for Western 
  Hemisphere Affairs, U.S. Department of State, Washington, DC...     7
    Prepared statement...........................................     8
    Responses to questions submitted for the record by Senator 
      Marco Rubio................................................    41

                                 (iii)

                    U.S. POLICY TOWARD LATIN AMERICA

                              ----------                              

                      THURSDAY, FEBRUARY 17, 2011

                           U.S. Senate,    
        Subcommittee on Western Hemisphere,
         Peace Corps, and Global Narcotics Affairs,
                            Committee on Foreign Relations,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 2:18 p.m., in 
room SD-419, Dirksen Senate Office Building, Hon. Robert 
Menendez (chairman of the subcommittee) presiding.
    Present: Senators Menendez, Udall, and Rubio.

           OPENING STATEMENT OF HON. ROBERT MENENDEZ,
                  U.S. SENATOR FROM NEW JERSEY

    Senator Menendez. Good afternoon. This hearing of the 
Western Hemisphere, Peace Corps, and Global Narcotics Affairs 
Subcommittee will come to order.
    Let me first welcome all of our guests and witnesses. I 
know that Senator Rubio, who I understand will be the ranking 
member once we fully organize, is on his way from a vote on the 
floor.
    Let me further say that I am chairing this hearing even 
though we have not organized our full and subcommittees, 
although it is my expectation when we do I will be the chair of 
this subcommittee. We wanted to get the work started, and we 
appreciate Chairman Kerry allowing us to do so.
    I want to take this opportunity to welcome the members of 
what I expect the subcommittee to be, based upon the choices of 
members on both sides, certainly Senator Rubio, who will be the 
ranking member of the subcommittee, and we look forward to 
working with him. Let me welcome all the new members of the 
subcommittee, Senator Boxer, Senator Shaheen, Senator Udall, 
Senator DeMint, and Senator Lee from Utah; and those who are 
returning to the subcommittee from the last Congress, Senators 
Webb, Barrasso, and Isakson.
    I look forward to chairing the subcommittee when we are 
fully organized, and I intend to use the chairmanship to place 
attention on an area of the world that I personally believe has 
not had the full attention of U.S. foreign policy in a way that 
it needs to; in a way that is in our national interest and our 
national security. It is our intention to--working with the 
chairman--have a robust schedule of hearings on the vital 
issues facing the United States in this hemisphere.
    Now, since it is our hope that this hearing will set the 
tone for the rest of the work to come, I'm going to ask you to 
bear with us a few minutes. I will deliver a longer opening 
statement than we will normally have, but it is a scene-setter, 
so I ask you to bear with me a few moments.
    I welcome Senator Rubio, who I just spoke about a moment 
ago.
    Insufficient focus on the Western Hemisphere by governments 
of our country going back to both parties has not always been 
so. The Good Neighbor Policy during the FDR Presidency was an 
era during which we were fully engaged, and in March of this 
year we celebrate the 50th anniversary of the Alliance for 
Progress announced by President John F. Kennedy. President 
Kennedy did shine the spotlight on the region, and I want to 
quote directly from his vision. He said: ``We propose to 
complete the revolution of the Americas, to build a hemisphere 
where all men can hope for a suitable standard of living and 
all can live out their lives in dignity and in freedom.''
    We can certainly say now that the region has made very 
significant progress. Today most of the countries in Latin 
America are free and participate in representative democracies, 
with the exception of Cuba. Within the past 10 years there's 
also been much material progress. So from the long view of 
history, political and economic gains have indeed been made. 
Latin America therefore commands a new respect and needs to be 
treated with respect.
    That is why we seek a deeper partnership with Latin America 
than ever before. At the Summit of the Americas in Trinidad and 
Tobago last year, the President proclaimed a policy of 
partnership with the Americas and next month he is embarking on 
a trip to strengthen that partnership. He will visit Brazil, 
Chile, and El Salvador. Each of those countries have made proud 
political and economic achievements. Brazil has truly emerged 
as a country no longer of the future, but very much of the 
present. Chile's advances are known to all and its epic rescue 
of the miners from the bowels of the Earth is tribute to its 
respect for life, Chilean technical know-how--with a little 
help of a United States company--and Chilean pride. El Salvador 
has been a true ally in our fight to establish a democracy in 
Iraq and we value their friendship as we seek to curb the 
scourge of narcotrafficking in Central America together.
    The progress of the region is clearly evident on the 
economic front. According to new projections by the United 
Nations Economic Commission for Latin America and the 
Caribbean, the region's economy grew by 6 percent last year and 
is projected to grow by another 4.2 percent this year.
    Culturally as well as economically, Latin America is a 
vibrant and dynamic region. It has not only resources, but a 
resourceful people that have allowed it to grow and develop. It 
has its own values, its own institutions, its own attitudes 
toward government, its own challenges, and its own solutions--
institutional, cultural, and technological.
    I think it's important to understand these if we hope to 
forge a meaningful relationship, a practical policy, and a 
fruitful partnership with the countries of Latin America. Now, 
I know that each country and region has its own 
characteristics, but in this first hearing we want to explore 
our relationship with Latin America as a whole. I think it's 
only appropriate to take a holistic view as a starting point 
that will give us a reference point from which to drill down 
and get more specificity in subsequent hearings.
    I propose, therefore, that we look at our policy on Latin 
America through a prism that includes four lenses: values, 
institutions, attitudes, and technology. Anthropologists use 
this framework to understand societies and I think it will 
serve our purposes as well.
    Let's begin with the question of values. In talking about 
values, I mean to highlight a belief system, a core set of 
values that serves as an organizing principle for society. In 
the United States, there is no question that among the values 
of liberty, order, and equality, liberty ranks high above the 
others. We love our freedom and we are prepared to sacrifice 
for it. We hold it dear above life itself. It is with that 
conviction that Patrick Henry made his case for independence 
from Britain and uttered the immortal cry: ``As for me, give me 
liberty or give me death.''
    It is that value that American soldiers take with them when 
they fight our Nation's wars. It is that value we uphold when 
we stand up for freedom--of expression, of worship, of 
assembly, and the right to have our grievances heard at the 
expense of stability or order.
    It is these values that inspired the people in Tahrir 
Square in Egypt last week and today in the streets of Tehran. 
It is what makes our democracy vibrant and enables us to 
represent the rights of others.
    There is also a place for order when it comes to protecting 
lives and property, as well as in providing for the welfare of 
those less fortunate in our society. Liberty allows us to 
acquire property and to care for the less fortunate and gets 
the place of honor in our ideological pantheon. It is an 
honored place that is protected from competing ideologies such 
as fascism and communism.
    As we examine our relationship with Latin America, I find 
it important to understand where each of the countries of the 
region place the value of order and equality in relation to the 
value of liberty, in order to determine what is or should be 
our policy toward governments that are based on ideals that are 
less than democratic and less respectful of the rights of 
others than in self-preservation.
    Institutions that give stability to societies enable them 
to develop from cultures to civilizations. Strong institutions 
protect the rights of citizens and allow nations to defend 
themselves against threats to the state and its citizens. 
Strong democratic institutions prevent one person from 
dominating and instead allow an assembly to represent the 
rights of the people and create laws on their behalf. It also 
includes an independent judiciary that makes clear what the law 
is and applies due process in protecting citizens' rights.
    As we examine our relationship to countries in Latin 
America, we need to ask what strong institutions prevail that 
recognize the rule of consent by the governed, have the 
security of its citizens in mind, and are governed by the rule 
of law.
    Institutions, of course, have no relevance and do not 
resonate without acceptance by the people in their interaction 
with their representatives. Representatives who do not hear 
from their constituents are not able to determine what laws are 
in their best interests. A society without a civic attitude, 
without the willingness to participate, and without the ability 
to interact with its representatives, cedes its voice to others 
who may or may not react wisely to the challenges of the times. 
Civil society most definitely has a role to play in a healthy 
political culture. Access by citizens to their government or 
governing bodies ensures that their voices are being heard and 
provides the legitimacy that governing bodies need to function 
effectively and efficiently in the service of their citizens.
    This is one of the questions we need to ask about countries 
in Latin America: How strong is civil society, the sense of 
civil responsibility and engagement? How strong is the 
legitimacy of governments that have to face challenges from 
organized crime and from drug trafficking organizations? And in 
which areas can we work together to make improvements?
    Finally, when I speak of technology I mean the tools a 
society has at its disposal to improve the quality of life for 
a society as a whole and for the individuals within it. I 
include the advances of modern science to defeat diseases like 
cholera, malaria, tuberculosis. I include advances in energy 
security in the fields of nuclear, solar, wind, and renewable 
fuels. I include all those tools that enable us to secure our 
borders, explore space, manage the effects of climate change, 
and those that will help us produce economic growth and 
opportunity in this century.
    From time immemorial, man has been able to improve his lot 
only with the creation of tools that help him solve his 
problems. That is no less the case today as we explore our 
relationship with the economies in the region. Here we have 
many areas in which we can cooperate and strengthen our 
partnerships, both in the public and private sectors. So let's 
keep that in mind as we explore our opportunities for 
cooperation in the hemisphere.
    Our relationship with the hemisphere is one of neighbor to 
neighbor, working cooperatively to improve the quality of life 
for all citizens in the Americas and to uphold the values, 
institutions, and attitudes contained in the Inter-American 
Democratic Charter that we believe best serve our citizenry and 
advance the social, political, and economic development of the 
people of the Americas. And it's in that spirit that I look 
forward to holding some future hearings, working with Senator 
Rubio.
    Finally, I have said many times, as a member of this 
committee, that many of the things debated in this country 
today emanate from issues that exist in the hemisphere. If we 
talk about undocumented immigration in this country, it stems 
in part from the challenge of societies with civil unrest or 
dire economic circumstances. If we talk about our young people 
who get addicted to drugs, it is in part the demand and the 
creation of opportunities for the supply of that demand to 
emanate from the hemisphere. If we talk about diseases that 
have resurfaced after having been eliminated within our 
hemisphere, disease knows no boundaries or borders. If we are 
talking about creating regional opportunities for growth of 
American services and products, which would create jobs here at 
home, it is a tremendous opportunity to advance. And the list 
goes on and on.
    So I view the work of this subcommittee as something that 
is integral to the national interest, the national security, 
and the national economy of the United States, and that's how 
we intend to proceed.
    With that, let me invite our soon to be ranking member, 
because we haven't formally organized, Senator Rubio, the 
junior Senator from Florida, who I look forward to working very 
closely with, to move the interests of our collective 
hemispheric engagement.

             OPENING STATEMENT OF HON. MARCO RUBIO,
                   U.S. SENATOR FROM FLORIDA

    Senator Rubio. Thank you, Senator and Mr. Chairman, for 
holding this meeting. If I need to, when we ratify this, I'll 
come back and give the opening statement again a second time, 
just to make sure. But I appreciate your leadership on the 
committee and for holding this hearing. I think, as we talked 
before, if I'm correct, this subcommittee only met a handful of 
times over the last few years, and unfortunately I think it's 
reflective of a lack of vision toward the region by multiple 
administrations from both political parties.
    That being said, I think there's been a tremendous amount 
of progress made in this hemisphere. With the sad exception of 
Cuba and a handful of increasingly authoritarian regimes in the 
area, Latin American leaders increasingly recognize the 
legitimacy of free and fair elections, of promarket economic 
policies, and unprecedented cooperation to curb transnational 
crime.
    I think the best example of that would be Colombia. This is 
a country that almost 2 decades ago was nearly a failed state. 
In the process, it has now over the last two decades defeated 
the Communist narcoguerrillas. It has expanded democratic 
spaces and strengthened independent government institutions, 
and it has opened markets and increased economic competition.
    I think it reminds us that Colombia today--and I think the 
panelists, I hope, will agree--is our strongest ally in the 
region and certainly an example to the region of the promise of 
tomorrow, when there is real leadership and a vision for 
tomorrow.
    But their work is not complete, which is one of the main 
reasons it's imperative that our Congress approve our seriously 
delayed trade promotion agreement with both Colombia as well as 
Panama.
    With the exception of Nicaragua, the nations of Central 
America are working hard to overcome the legacy of the cold war 
conflicts, to build democratic institutions, and to bring 
security to their citizens. Unfortunately, the U.S. response I 
think to some of these rising challenges--and again, I don't 
mean that in the partisan context--appears confusing, 
inconsistent, and timid.
    Let me say I am pleased that the President will be 
traveling to the region shortly. I think that that's a 
promising first step in this new year, and I think there's much 
more to be done.
    I also believe that in many respects the United States and 
its confusing policy toward the region has often created a 
vacuum that has allowed us to lose market-share in many of 
these strategic partners that we have in the region, that at a 
time when other nations around the world are recognizing the 
promise of Latin America, the promises of the Western 
Hemisphere, and are more than eager to fill it, while we look 
elsewhere or nowhere at all. So I hope that that will be a 
focus of the subcommittee as well.
    Let me thank the panelists for being a part of this. I hope 
we'll have future repeated engagement on this issue. I 
personally believe, not just because of where I'm 
geographically located in Florida, but because I truly believe 
that the 21st century can be a western hemispheric century, one 
where the true and full promise of equality and opportunity can 
bear fruit in multiple nations and it will enrich us all. So I 
hope that we can be leaders in that regard. Mr. Chairman, I 
appreciate your leadership on this issue and I look forward to 
the testimony of the panel.
    Senator Menendez. Thank you, Senator Rubio.
    With that, let me introduce the rather distinguished panel 
of witnesses with us today as we start off this series of 
hearings. Let me take a few minutes to introduce them all 
collectively and then we'll hear from them.
    Dr. Arturo Valenzuela has served as the Assistant Secretary 
for the Western Hemisphere at the Department of State since 
November 2009. He was previously the professor of Government 
and director of the Center for Latin America Studies at 
Georgetown University. He is a specialist on the origins and 
consolidation of democracy and the institutional dimensions of 
democratic government. We look forward to his expertise and 
testimony today.
    Mr. Feierstein is the Assistant Administrator for USAID for 
Latin America and the Caribbean. He has previously served at 
USAID as the Director of the Agency's Global Elections Office. 
He's worked in the State Department as a Special Assistant to 
the United States Ambassador to the Organization of American 
States and prior to that was director for Latin America and the 
Caribbean at the National Democratic Institute for 
International Affairs, overseeing programs to strengthen 
democratic institutions in developing countries; something of 
great interest and concern. We look forward to his comments.
    Mr. Kaplan is the president and chief executive officer of 
the Inter-American Foundation. He joined the foundation on 
November 1, 2010, and although he's been there a short period 
of time, we're looking forward to great things. From 1994 to 
2010 he served at the Inter-American Development Bank, most 
recently as the chief adviser to the executive vice president. 
Before assuming that position, he served as chief of the 
Environment and Natural Resources Management Division for 
Mexico, Central America, Dominican Republic, and Haiti, where 
he was responsible for all IDB programs in those countries 
related to agriculture, rural development, among others, and a 
lending portfolio in excess of $2 billion.
    Dr. Mora is the Deputy Assistant Secretary of Defense for 
Western Hemisphere Affairs. From 2004 to 2009, Dr. Mora was the 
professor of National Security Strategy and Latin American 
Studies at the National War College, the National Defense 
University. He has taught courses on strategy, global security, 
and Latin American politics to senior military and civilian 
officers. He's worked as a consultant to the Library of 
Congress, the U.S. Department of the Air Force, Army, CIA, the 
Institute for National Security Studies, the National 
Democratic Institute, the U.S. State Department, the OAS, the 
Joint Chiefs of Staff--Who have you not worked for?--the U.S. 
Joint Chiefs of Staff, the U.S. Southern Command, and the 
Office of the Secretary of Defense. So we're thrilled to get 
you here for free today. [Laughter.]
    With that, let me ask Secretary Valenzuela to start. Please 
limit your testimony to about 5 minutes or so. Your full 
statements all will be entered into the record, and what we 
want to do is give the maximum amount of time to explore 
different topics with you after you lay your foundation.
    With that, Mr. Secretary.

  STATEMENT OF HON. ARTURO VALENZUELA, ASSISTANT SECRETARY OF 
STATE FOR WESTERN HEMISPHERE AFFAIRS, U.S. DEPARTMENT OF STATE, 
                         WASHINGTON, DC

    Mr. Valenzuela. Thank you very much, Mr. Chairman and 
future acting cochair of the committee. I want to take this 
opportunity to acknowledge the debt that we have to this 
committee for the interest and commitment that you have to U.S. 
policy in the Western Hemisphere, and I will just highlight a 
few points from my written testimony that will be put into the 
record.
    Mr. Chairman, I'm pleased to tell you that this 
administration is deeply engaged in the Americas in this 50th 
anniversary year of the Alliance for Progress. Since our 
earliest days in office, the Obama administration has been 
working hard to safeguard democratic values and fundamental 
freedoms, promote economic opportunity, strengthen regional 
security, and advance U.S. interests. We strongly believe that 
the United States has important national security interests at 
stake in the Western Hemisphere and that the best way to 
advance these interests is through proactive engagement with 
all of the countries of the Americas.
    That is why Secretary Clinton has traveled to the region 
more frequently than any other Secretary of State in modern 
American history, and that is why President Obama chose to use 
his State of the Union Address to announce that he will be 
traveling to Brazil, Chile, and El Salvador later this spring 
to ``forge new alliances across the Americas.''
    We believe that the United States has a vital stake in the 
success of Latin America and the Caribbean, and that a United 
States policy that contributes to that success will benefit all 
of the peoples of the Americas, including people in our own 
country. We also know that Latin America's future depends on 
the consolidation of vibrant democratic institutions that are 
responsive to their citizens and capable of expanding the 
boundaries of freedom, creating greater social prosperity, 
unlocking the economic potential of market, and deepening the 
rule of law.
    Our strategy has already achieved important results. Today 
two-thirds of the populations of most countries in the region 
now have a very favorable impression of the United States, an 
increase of 10 to 20 points over the 2008 levels.
    Today we are very optimistic about the state of the 
hemisphere. Since taking office in November 2009, I have 
traveled extensively throughout the Americas, making 51 stops 
in 23 countries. Through these visits, I have witnessed the 
convergence of two powerful and positive trends: the 
consolidation of successful market democracies that are making 
big strides in meeting their peoples' needs and the growing 
global integration of Latin America.
    The greatest regional challenges, including inequality, 
impunity, insufficient respect for human rights, and lack of 
opportunity, are receding in most countries in the Americas. 
Furthermore, nations of the hemisphere are realizing their 
stake in global issues, like food security, climate change, 
transnational crime, and economic competitiveness.
    Let me note from the outset that there are continuing areas 
of concern, of course. Venezuela is one. I want to underscore 
that, despite the rhetoric of the Venezuela Government 
proclaiming the triumph of socialism for the 21st century, 
today Venezuela's influence in the region has markedly 
declined, with only 30 percent of the region holding a positive 
view of Venezuela, which is less than half of the favorability 
ratings of the United States.
    Furthermore, the administration remains unwaveringly 
committed to supporting the Cuban people's desire to freely 
determine their own future, and to that end we've taken steps 
to empower the Cuban people through increased contact and 
exchange. Indeed, we recognize that achieving our goals in the 
Americas will require building stronger institutions of 
democratic governance that respect fundamental civil and human 
rights.
    In 2011, several Latin American and Caribbean countries 
will hold Presidential elections. We join others in welcoming 
elections that are credible expressions of the popular will, 
and we also encourage all countries to facilitate domestic and 
international observation of the election process.
    We're working hard to strengthen our economic relationships 
with Latin America, including moving forward with the two 
pending free trade agreements with Colombia and Panama. 
President Obama has instructed USTR to intensify engagement 
with the Colombians and Panamanians to resolve outstanding 
concerns related to these trade agreements as soon as possible 
this year.
    Building a new spirit of inter-American partnership is 
especially important at a time when we face a constrained 
budget environment. This administration's top priorities 
include critical citizen safety programs to support the 
hemisphere's ability to combat drug trafficking and 
transnational crime, and to achieve these goals we're 
implementing the Merida Initiative with Mexico, the Central 
American Regional Security Initiative, and the Caribbean Basin 
Security Initiative.
    Robust programs in Colombia are key to firmly secure the 
country's democratic and security gains of recent years, and 
the President's 2012 foreign assistance request for the Western 
Hemisphere reflects these priorities.
    Mr. Chairman, in conclusion let me say that the Obama 
administration's Latin America policy is informed, engaged, 
dynamic, collaborative, and optimistic about what the future 
will hold for the countries of the Americas. And I thank you 
for your attention and I welcome your questions.
    [The prepared statement of Mr. Valenzuela follows:]

            Prepared Statement of Hon. Arturo A. Valenzuela

    Mr. Chairman and members of the committee, I want to begin by 
thanking you for this opportunity to testify before you today and for 
the level of interest and attention that you dedicate to the Western 
Hemisphere and U.S. policy in the region. I also want to congratulate 
you for your assignment as chairman of the Western Hemisphere 
Subcommittee. I look forward to continuing to work with you and with 
the other members of this committee to advance U.S. interests in the 
hemisphere.
    Mr. Chairman, I am pleased to tell you that this administration is 
deeply engaged in the Americas. Since the earliest days in office, the 
Obama administration has worked tirelessly to safeguard democratic 
values, promote economic opportunity and social inclusion, strengthen 
regional security, and advance U.S. interests. We believe the United 
States has important national interests at stake in the Western 
Hemisphere, and the best way to advance these interests is through 
proactive engagement with all of the countries of the Americas. That is 
why Secretary Clinton has traveled to the region more frequently than 
any other Secretary of State in modern American history. And that is 
why President Obama chose to use his State of the Union Address to 
announce that he will travel to Brazil, Chile, and El Salvador later 
this spring ``to forge new alliances across the Americas.''
    The Obama administration is committed to leadership in the Western 
Hemisphere that is guided by a set of core principles. First, we 
believe that the best framework for engaging with the Americas is one 
based on mutual partnership and coresponsibility. As President Obama 
stated at the Summit of the Americas in 2009, ``There is no senior 
partner and junior partner in our relations; there is simply engagement 
based on mutual respect and common interests and shared values.'' 
Second, we believe that working through multilateral channels in 
concert with the nations of the Americas is critical to advancing our 
interests. While it is important that we maintain strong and vibrant 
bilateral relationships, the solutions to the challenges we face will 
be more impactful, durable, and sustainable if we partner with nations 
that share our common values and goals. Third, we believe that the 
United States has a vital stake in the hemisphere's prosperity--and 
that contributing to its success is good policy, because it benefits 
all the people of the Americas. We also know that the success of Latin 
America and the Caribbean will continue to rely on the consolidation of 
vibrant democratic institutions that are responsive to their citizens 
and capable of expanding the boundaries of freedom, creating greater 
social prosperity, unlocking the economic potential of markets, 
deepening the rule of law, and fostering respect for human rights.
    Today, we are optimistic about the hemisphere's course. Indeed, the 
Western Hemisphere is experiencing a period of economic progress that 
is a far cry from the troubles of the past. Not only did the region 
avoid the worst effects of the financial crisis, but current growth 
rates are projected to exceed 4 percent this year. And politically 
speaking, we welcome the reduction in tensions among the nations of the 
Andean region and note the smooth transfer of power that has occurred 
in many countries throughout the Americas. Indeed, the nations of Latin 
America and the Caribbean are undeniably promising partners in 
confronting crucial regional and global challenges. In much of the 
region, we are seeing the convergence of two powerful and positive 
trends: the consolidation of successful market democracies that are 
making big strides in meeting their peoples' needs; and growing global 
integration. The greatest regional challenges--including inequality, 
lack of transparency and accountability, insufficient respect for human 
rights, ineffective institutions, and lack of opportunity--are receding 
in most countries in the Americas. Nations of the hemisphere are 
realizing their stake in new global challenges, like food security, 
climate change, transnational crime, and economic competitiveness.
    There are many examples of the Western Hemisphere's emerging 
diplomatic and economic influence. Brazil has positioned itself as a 
key actor in global economic forums like the G20. It was Mexico's 
skillful diplomacy that brought the most recent United Nations Climate 
Change Conference in Cancun to a successful conclusion. On a per capita 
basis, Uruguay contributes more troops to United Nations peacekeeping 
missions than any other nation. Colombia is sharing its judicial reform 
and security expertise and working with partners such as Mexico and the 
Central American nations in a coordinated fashion. Canada has been a 
steadfast partner in addressing crucial issues that range from global 
climate change to securing the peace in Afghanistan to restoring the 
health of the world economy. Member nations of the Caribbean Community 
(CARICOM) are leading in collective efforts to address citizen security 
challenges in the subregion. These are just a few examples of 
democratic societies with whom we can join in new networks of 
partnership around the world in order to help meet the tests of our 
times.
    Mr. Chairman, as you know, Secretary Clinton recently unveiled the 
groundbreaking QDDR process to enhance our capacity to lead through 
civilian power. As she has emphasized, advancing American interests and 
values will require leading other nations in solving shared problems in 
the 21st century. Therefore, we must increase our reliance on our 
diplomats and development experts as the first face of American power.
    In 2011, the concepts underpinning the QDDR will also guide our 
approach of ``dynamic engagement'' that seeks to advance U.S. interests 
in partnership with the Americas as a whole, while recognizing the 
value of accommodating diverse needs and interests. The Obama 
administration has focused our efforts on four overarching priorities 
critical to people in every society: building effective institutions of 
democratic governance, promoting social and economic opportunity for 
everyone; securing a clean energy future; and ensuring the safety and 
security of all of our citizens. All this we seek to achieve while 
harnessing and strengthening multilateral and regional institutions, 
especially the Organization of American States.
    We recognize that achieving our goals will require helping to build 
stronger institutions of democratic governance that respect fundamental 
freedoms and human rights. As we have recently witnessed during the 
Presidential election process in Haiti, ensuring that democratic 
elections respect the will of the people is essential to maintaining 
political legitimacy and social stability. This goal united all of the 
hemisphere as well as nonhemispheric partners that have made a 
commitment to assisting Haiti in the wake of last year's devastating 
earthquake. In 2011, several Latin American and Caribbean countries 
will hold Presidential and legislative elections, including Guatemala, 
Nicaragua, Guyana, Peru, and Argentina. We join others in welcoming 
elections that are a credible expression of the popular will, and we 
encourage all countries to facilitate domestic and international 
observation and to establish mechanisms capable of mitigating disputes 
that may arise through the election process.
    While many countries in the Americas have strong and healthy 
democracies, we all still have more work to do. As we engage with our 
partners to strengthen democratic institutions and civil society 
throughout the Americas, we are cognizant of the continuing weaknesses 
in democratic procedures and practices and the threats to their 
consolidation. Collectively, we need to be clear-eyed and proactive in 
addressing risks to our common agenda. Those include attempts to expand 
majoritarian or populist rule at the expense of fundamental minority 
rights, effective democratic governance, or dialogue and consensus 
within the rule of law. And while we congratulate the popular leaders 
who have opted to leave office in accordance with the institutions of 
democratic governance, rather than promoting constitutional changes to 
benefit incumbents, we regret the opposite trend in several countries.
    Recent developments in Venezuela raise serious concerns in this 
context. Particularly worrisome, among other measures, is the 
delegation of the legislative authority to the executive that extended 
beyond the terms of office of the outgoing National Assembly, 
undermining the authority of the new assembly and thereby 
circumscribing popular will. This violates the doctrine of the 
separation of powers and therefore contravenes the Inter-American 
Democratic Charter. That said, we are heartened by the presence of a 
coherent opposition in the National Assembly as Venezuela's 
institutions must reflect the range of views in society in order for 
democracy to prosper.
    During 2010, Honduras made significant progress in strengthening 
governance, promoting national reconciliation, addressing some of the 
problems of human rights violations, and restoring diplomatic relations 
with many countries in the hemisphere. As President Lobo has said, he 
has sought to redirect the country on a path toward democratic 
normalization following the disruption of the institutional order that 
took place in June 2009. In our view, he has prepared the groundwork 
for the restoration of Honduras to the Organization of American States. 
The U.S. Government is supporting Honduras through robust programs 
managed by several agencies, including the Departments of the Treasury, 
Defense, Homeland Security, State, and USAID, and we will seek new ways 
to support the country's efforts to achieve its economic development 
objectives.
    Since taking office, President Obama has made clear his commitment 
to supporting the Cuban people's desire to freely determine their own 
future. During the first 2 years of the Obama administration, we have 
taken measures to increase contact between separated families and to 
promote the free flow of information to, from, and within Cuba--
including new measures that will enable more Americans to travel to the 
island for academic, religious, and people-to-people exchanges. And we 
have engaged the Cuban Government directly on key bilateral matters 
like migration and direct mail service. However, we deplore the Cuban 
Government's recent announcement that Cuban prosecutors intend to seek 
a 20-year sentence against U.S. citizen Alan Gross. Mr. Gross is a 
dedicated international development worker who was in Cuba providing 
support to members of the Cuban Jewish community. We strongly urge his 
unconditional release.
    Though our hemispheric agenda remains manifestly inclusive and 
seeks points of convergence even in difficult cases, we remain 
steadfast in our commitment to core principles and recognition of key 
values such as human and labor rights, media freedom, and the 
importance of robust democratic institutions. Building a new spirit of 
inter-American partnership is especially important at a time when we 
face a constrained budget environment. Now more than ever, our budget 
choices must be strategic, and we must align limited funding resources 
to the areas where our resources can make a critical difference.
    The President's 2012 foreign assistance request for the Western 
Hemisphere includes funding for critical citizen safety programs that 
will support the hemisphere's ability to combat drug trafficking and 
transnational crime. These threats to the rule of law in Latin America 
and the Caribbean also threaten U.S. national security, and 
strengthening the region's capacity to combat them is in our national 
interest. We support full fiscal year 2012 funding from Congress for 
the Merida Initiative with Mexico, the Central America Regional 
Security Initiative, and the Caribbean Basin Security Initiative as 
vital for the achievement of these goals. In Colombia, continued 
funding is key to firmly secure the country's transformational gains on 
security, democracy, human rights, and the illicit drug industry, while 
U.S. cooperation with Mexico is critical to the success of Mexico's 
effort to fight drug trafficking and strengthen its institutions.
    The 2010 poll by the public opinion research firm Latinobarometro 
also confirmed one of the core precepts of the Obama administration's 
policy toward the hemisphere: that the greatest concern of citizens 
throughout the hemisphere is achieving safety and security and 
combating the rise of international crime. Against this backdrop, the 
United States and Mexico have built an especially close partnership 
over the past 2 years, in large part through our cooperative law 
enforcement efforts to dismantle transnational organized criminal 
groups. The Congress has appropriated $1.5 billion to support the 
Merida Initiative assistance programs. By the end of 2010 the U.S. 
Government had delivered 11 helicopters, millions of dollars worth of 
other equipment, and trained over 6,000 Federal Police investigators 
and corrections staff as well as over 3,000 prosecutors and judicial 
authorities. We have shifted Merida's focus away from supplying 
critical equipment to providing more training and technical assistance. 
Along these lines, we are partnering with Mexico to help 
institutionalize justice sector reforms to sustain the rule of law and 
respect for human rights--and build a stronger institutional basis, 
including at the community level, for combating crime and the drug 
trade and enhancing citizen safety. In addition, the United States is 
increasing its own domestic law enforcement efforts to dismantle 
Mexican narcotics supply networks in our country, and combat the 
smuggling of illegal financial proceeds and weapons into Mexico. 
Although the road ahead remains challenging, we are certain that this 
is the right approach that will lay the groundwork for long-term 
sustainable results.
    We have learned that a successful approach to security challenges 
must be a comprehensive regional one. That is why the United States is 
also working to enhance citizen safety through the Central America 
Regional Security Initiative (previously part of the Merida 
Initiative), which has received $260 million to date, and the Caribbean 
Basin Security Initiative, which began last year with an initial 
investment of $45 million. These programs are central to our strategy 
to break the power, violence, and impunity of the region's drug, gang, 
and criminal organizations and strengthen law enforcement and justice 
sector institutions. Recognizing that the United States is one of many 
players in the security sector, we are encouraging partners and donors 
in the field and in capitals to better coordinate their efforts to 
avoid program redundancy and to improve overall impact. Donors can 
better leverage resources where they have comparable advantage, such as 
coordinating with host nations on law enforcement and rule of law 
programs. This week we met with the European Union, Spain, Canada, the 
U.N., and other partners, and the multilateral development banks to 
better coordinate international responses.
    Our engagement with Central America is especially pivotal. Through 
our Central America Security Strategy, we are reassessing how we can 
more rapidly, and effectively, reverse the worrisome decline of citizen 
safety in Central America. At the President's and Secretary's 
direction, we are examining ways in which to enhance cooperation on 
citizen security, especially focused on Central America, in a way that 
ensures we are mindful of and addressing gaps that transnational 
criminal organizations may be seeking to exploit. We are working with 
partners to ensure that Central America is both a development and 
foreign policy priority, and that pooled donor resources have a greater 
chance of positively affecting the trajectory there.
    Our support for Central America and the Caribbean is by no means 
limited to security. In El Salvador, Honduras, and Nicaragua, the U.S. 
Government's Millennium Challenge Corporation has spent almost $800 
million in recent years modernizing farms and building or improving 
hundreds of miles of highway. In the Caribbean, through the President's 
Emergency Plan for AIDS Relief (PEPFAR), the United States works with 
15 Caribbean countries to treat and prevent exposure to HIV, provide 
care and treatment and eliminate the stigma and discrimination 
associated with the disease.
    In addition, the United States continues to prioritize economic 
growth programs that leverage the emerging leadership potential and 
resources of many Latin American and Caribbean countries. Innovative, 
partnership-based initiatives like the Energy and Climate Partnership 
of the Americas and Pathways to Prosperity initiative will support 
Latin America and the Caribbean's ability to lead its own development 
by encouraging others to assume leadership roles and commit their own 
resources in order to promote key policy innovations. Latin America and 
the Caribbean will also benefit from the administration's Feed the 
Future and Global Health Initiatives, which will help foster healthy, 
prosperous societies.
    U.S. economic engagement with the Western Hemisphere extends far 
beyond foreign assistance for Latin America and the Caribbean. The 
Western Hemisphere remains a critical economic partner to the United 
States and many of our neighbors are also among our top trading 
partners. In 2009, total U.S. merchandise trade between the U.S. and 
Latin America and the Caribbean reached $524 billion and 40 percent of 
Latin America and the Caribbean's exports flowed to the United States, 
making us the region's single largest export destination. The Western 
Hemisphere, including Canada, absorbs 42 percent of U.S. exports and 
total trade with the hemisphere reached $1.5 trillion in 2009. Earlier 
this month, President Obama and Prime Minister Harper released a 
declaration intended to keep the United States safe while increasing 
American jobs through minimizing bottlenecks and nontariff barriers. 
Around 84 percent of our overall trade with the region takes place with 
our 10 FTA partners in the hemisphere. NAFTA alone represents the 
largest free trade area in the world, accounting for $735 billion in 
trade in 2009. The administration continues to work with our NAFTA and 
CAFTA-DR partners on improving the flow of trade through regulatory 
cooperation and trade capacity-building programs. In addition, the U.S. 
continues to be the largest investor in the region, supplying 
approximately 37 percent of the foreign direct investment (FDI), which 
totaled $34 billion in 2008.
    Remittances have also become a critical dimension of the economic 
relationship between the United States and our neighbors. While the 
flow of U.S. remittances to Latin America and the Caribbean declined 
about 11 percent following the 2008 financial crisis, the overall 
figure of $62 billion in 2009 remains impressive and underscores the 
strong family ties with the region. We are currently initiating 
programs, such as the BRIDGE initiative that was launched in El 
Salvador and Honduras last year, that seek to harness the investment 
potential of these remittances to help these countries fund vital 
infrastructure improvements.
    The Western Hemisphere will be a key target of the President's 
National Export Initiative, known as NEI. As part of his strategy for 
restoring strong economic growth in the United States, President Obama 
has called for doubling U.S. exports in 5 years--an ambitious goal. 
Last month's deal with South Korea paves the way for congressional 
approval of a long-stalled FTA with a crucial Asian ally, and creates a 
valuable example of how best to move forward on our other two pending 
FTAs with Colombia and Panama. President Obama has instructed U.S. 
Trade Representative Ron Kirk to intensify engagement with the 
Colombians and Panamanians to resolve outstanding concerns relating to 
these trade agreements as soon as possible this year. If we are 
successful, we will move those forward for congressional consideration 
immediately thereafter.
    Our efforts to advance economic opportunity are complemented by 
initiatives to expand social inclusion and provide support to 
marginalized groups. We also seek to advance gender equity through 
education, outreach, and government-to-government dialogue. A new area 
of emphasis is our effort to combat discrimination based on sexual 
orientation, and we are prepared to speak out forcefully to denounce 
violence against lesbians, gays, bisexuals, and transgendered persons 
in the Americas. We have made significant strides in supporting racial 
and ethnic inclusion throughout the region, including with indigenous 
communities. We look forward to increasing these efforts during 2011, 
which the United Nations has named the International Year for People of 
African Descent.
    Secretary Clinton attended the inauguration of Brazilian President 
Dilma Rousseff to underscore our commitment to elevate our bilateral 
relationship with this rising power to a new level. The United States 
and Brazil share many common interests and values and are natural 
partners on a wide range of regional and global issues. We have made 
important progress in that front over the last year. Brazil was the 
first country to take the lead in an initiative under the Energy and 
Climate Partnership of the Americas. The United States commends 
Brazil's leadership in Haiti, along with that of many other Latin 
American and Caribbean countries, and we are pursuing opportunities to 
work together on development projects in Central America and Africa. 
Brazil stands out in the global marketplace for the tremendous 
potential opportunities it offers U.S. companies. We will work with 
American exporters and investors to take advantage of that potential 
and would like to devote more resources to efforts that strengthen our 
bilateral mechanisms with Brazil, such as the Economic Partnership 
Dialogue. President Obama's visit will be incredibly important to our 
efforts to establishing a strong working relationship with President 
Rousseff and her government.
    In South America, the United States has forged especially strong 
partnerships with Colombia, Peru, and Chile. Our relations with these 
countries have never been so comprehensive, with both regional and 
global dimensions. Last fall, President Obama met with his counterpart, 
Colombian President Juan Manuel Santos, at the United Nations in New 
York where they announced the creation of the High Level Partnership 
Dialogue, which Deputy Secretary Steinberg launched when he traveled to 
Colombia in October. The Dialogue marks a new chapter to broaden our 
maturing and wide-ranging relationship, making Colombia an ever-more 
vital strategic partner. We are working to finalize a new framework 
agreement with Bolivia that will reaffirm both governments' commitment 
to engagement based on mutual interest and respect, and in a manner 
consistent with our laws and policies regarding assistance and 
counternarcotics cooperation. We have engaged Ecuador on a range of 
important bilateral, regional, and global issues. And we have also 
struck a new tone in our dialogue and engagement with Uruguay and 
Paraguay. We strongly believe it serves U.S. interests when we engage 
both with our friends and allies as well as those countries with which 
we may not see eye to eye.
    This approach goes beyond traditional relationships between 
governments. People-to-people contacts build mutual understanding and 
bring to light our shared values. Our diplomatic posts throughout the 
Western Hemisphere reach youth, civil society groups, opinion leaders, 
and others who take a constructive interest in the future of their 
society and how it relates to its neighbors. Educational and cultural 
programs, outreach through new and traditional media, and diverse 
voices from U.S. culture are all ways we project our values and 
translate our policy goals into ideas and actions that affect people's 
lives.
    It is important to note that the Obama administration's strategy of 
engagement has contributed to a shift in Latin American public opinion. 
According to the 2010 poll by Latinobarometro, two-thirds of the 
population in most countries had favorable attitudes toward the United 
States--an increase of 10 to 20 points from 2008 levels. The role of 
the United States in Latin America is also overwhelmingly viewed as 
positive. This suggests that the Obama administration's strategy has 
reversed the dangerous depletion of good will toward the United States 
that had occurred during the prior decade.
    We are also continuing to help the Haitian people rebuild after the 
terrible earthquake that struck the country a year ago. As President 
Obama emphasized shortly after the earthquake, U.S. commitment to Haiti 
will be sustained. We are proud of the role of the United States in the 
unprecedented bilateral and multilateral cooperation in support of 
Haiti. Since the earthquake, the U.S. Government has spent $1.1 billion 
in humanitarian relief assistance and an additional $406 million in 
recovery assistance toward job creation, rubble removal, shelter 
solutions, health and other priorities. In addition, the U.S. 
Government has pledged $1.15 billion in new money toward 
reconstruction. To date, we have disbursed more than $332 million to 
provide debt relief and contribute to the Haiti Reconstruction Fund. 
This has allowed the Haitian Government to use its resources to support 
the construction and repair of houses, remove rubble in critical areas 
of Port-au-Prince, establish funds to finance private sector activity, 
and provide education assistance. The United States has also provided 
over $43 million in assistance since the onset of the cholera crisis in 
October 2010, for medical supplies and services; and cholera treatment 
facilities and information campaigns to increase public awareness of 
prevention and treatment of the disease.
    A democratic transfer of power is vital to Haiti's long-term peace, 
stability and opportunity for economic growth. The United States and 
the international community support an election process in Haiti that 
reflects the will of the Haitian people. A free and fair process will 
allow the incoming government to enjoy full legitimacy, while 
representing the best way to promote stability and reconstruction. 
Since the November 28 election, our message has been consistent: the 
people of Haiti have the right to choose their leaders. The Haitian 
Provisional Electoral Council (CEP)'s February 3 announcement of the 
final results of the November elections was an important milestone in 
this electoral process. The United States stands ready to assist 
Haitian electoral authorities in the next round of elections, currently 
scheduled for March 20, to promote a free and fair electoral process 
and reduce the level of fraud and irregularities that affected the 
first round. As Haiti moves forward with the second round of elections, 
it is essential that all political actors, including candidates and 
their supporters, continue to work peacefully and within the law. In 
short, there has been progress, and, while uneven, it has deepened the 
resolve and commitment to Haiti of the international community, 
including the United States.
    In conclusion, our hemispheric policy is based on the premise that 
the United States has a vital interest in contributing to the building 
of stable, prosperous, and democratic nations in this hemisphere that 
can play a pivotal role in strengthening a rules-based international 
system capable of meeting today's global challenges. As President Obama 
and Secretary Clinton have said, policy must be conducted on the basis 
of mutual respect and shared responsibility through dialogue and 
engagement. The United States must be a more effective and determined 
partner in helping countries throughout the Americas achieve their own 
chosen paths as determined by their own people. Today, the Obama 
administration's Latin America and Caribbean policy is informed, 
engaged, dynamic, and collaborative--and optimistic about what the 
future will hold for the countries of the Americas.
    I thank you for your attention.

    Senator Menendez. Thank you.
    Mr. Feierstein.

STATEMENT OF HON. MARK FEIERSTEIN, ASSISTANT ADMINISTRATOR FOR 
LATIN AMERICA AND THE CARIBBEAN, U.S. AGENCY FOR INTERNATIONAL 
                  DEVELOPMENT, WASHINGTON, DC

    Mr. Feierstein. Mr. Chairman, members of the committee, 
thank you for the invitation to testify today. I welcome the 
opportunity to share with you how USAID is advancing prosperity 
and security in the Americas.
    During my 4 months on the job, I've been heartened by 
bipartisan expressions of support for USAID. There is 
widespread recognition that the agency's work advances our 
national interest. Our investments to promote economic growth, 
stem drug trafficking, and combat disease in Latin America and 
the Caribbean produce jobs, safer streets, and a healthier 
environment in our country.
    This is a propitious time in the Americas. Political and 
economic progress has produced a mature set of partners with 
which we can advance common objectives. At the same time, USAID 
is implementing innovative approaches to development. These 
dynamics present us with a historic opportunity to make 
sustainable gains that will leave citizens throughout the 
Americas better off.
    The hallmark of this administration's approach to 
development is sustainability. As President Obama said when he 
announced his development policy last September, the purpose of 
development is, ``creating the conditions where our assistance 
is no longer needed.''
    USAID is taking steps to achieve that objective. First, we 
are accelerating the shift from providing aid to building the 
capacity of countries to provide for themselves. Our overriding 
goal in Latin America and the Caribbean is to strengthen the 
capacity of governments and civil society to expand economic 
opportunity, strengthen democratic governance, and improve 
citizen security.
    Second, we are increasingly collaborating with businesses, 
because long-term development and job creation depend upon an 
active and vibrant private sector.
    Third, we are consolidating resources in priority countries 
and priority sectors. We are guided by President Obama's pledge 
to ``focus our efforts where we have the best partners and 
where we can have the greatest impact.''
    As countries reach a point when they no longer need our 
assistance, we will recruit them to work with USAID as fellow 
donors. Such partnerships will be especially important in 
dealing with issues that require a multinational response, such 
as gang activity and drug trafficking.
    Areas of Mexico, Central America, and the Caribbean suffer 
today from the highest rates of nonpolitical violence in the 
world. As regional leaders develop strategies to combat crime, 
it's in our interest to support them. The flow of drugs into 
this country harms our youth and saps strength and resources 
from our communities. The lack of security also threatens to 
undermine our other development work. Crime discourages 
business investment, diverts valuable resources, and corrodes 
state institutions.
    In response, the Obama administration had deepened the 
Merida Initiative and expanded the security effort into the 
Caribbean. USAID is continuing our longstanding work to 
strengthen judicial systems. But the heart of our effort in 
this area involves preventive measures, namely providing youth 
vulnerable to the lure of crime with positive alternatives.
    We are also committed to maintain and advance democracy in 
the hemisphere. Despite overall democratic gains, there has 
been a narrowing of political space in some countries and 
unrelenting repression in another. Autocratic governments might 
try to make it more difficult to work in solidarity with 
citizens struggling to exercise basic human rights, but the 
United States will not yield in our support for those who want 
to enjoy universally recognized rights.
    Mr. Chairman, the hemisphere's development challenges 
converge in one form or another in Haiti, USAID's highest 
priority in the hemisphere. As we move into the second year of 
post-earthquake reconstruction, we are implementing our new 
approach to development. We are partnering with Haitian 
Government institutions, ramping up our collaboration with the 
private sector, and implementing novel approaches.
    We're encouraged by the progress made in Haiti over the 
past year. The number of people living in camps has fallen by 
more than half a million. The U.S. Government alone has removed 
nearly 1.5 million cubic meters of rubble. More Haitians have 
access to clean water today than before the quake, and the 
cholera epidemic has stabilized.
    To be sure, the challenges before us in Haiti are 
formidable. With over 800,000 Haitians still living in camps, 
moving people into permanent housing is a top priority. Another 
is clearing remaining rubble. Beyond these needs, Haiti's long-
term development plan is in place, with United States efforts 
focused on infrastructure, health, agriculture, and governance.
    We are optimistic about Haiti's prospects. The Haitian's 
people's determination not just to survive, but to thrive, 
reminds us all what is in reach when we join forces for the 
common good.
    That dynamic in Haiti is repeated every day in various 
forms in the largest cities and smallest villages throughout 
the Americas. We help each other not only because it's the 
right thing to do, but because our well-being is linked to 
people throughout this vast and diverse hemisphere.
    Thank you, Mr. Chairman. I look forward to the committee's 
questions.
    [The prepared statement of Mr. Feierstein follows:]

               Prepared Statement of Hon. Mark Feierstein

    Mr. Chairman and members of the committee. thank you for the 
invitation to testify today. I appreciate and welcome the opportunity 
to share what the U.S. Agency for International Development is doing to 
advance prosperity and security in the Americas, and I am eager to hear 
your advice and counsel as well.
    It is also an honor to testify with my colleagues, Assistant 
Secretary Arturo Valenzuela, Deputy Assistant Secretary Frank Mora, and 
President Robert Kaplan. As a college student, I read Dr. Valenzuela's 
work on political development in the Americas. He helped shape my 
thinking then, and I cannot think of a more accomplished diplomat to 
frame the policy environment within which USAID operates in the 
hemisphere today.
    Mr. Chairman, during my 4 months on the job, I have had the benefit 
of meeting with you, other Members of Congress and your staffs to 
discuss development challenges and opportunities in the Americas. Your 
ideas have enriched my thinking, and have already improved USAID's 
strategic and programmatic approach in Latin America and the Caribbean.
    I have also been heartened by the bipartisan expressions of support 
for USAID's work in the Americas. There is widespread recognition about 
how the agency's investments advance our national interest. USAID's 
work is not charity. Our programs may reflect the generosity of the 
American people, but they are not only from the American people, as the 
agency's motto says; they are for the American people.
    When we help stabilize and grow economies closely tied to our own, 
we help develop markets for our products. When we help farmers in coca 
producing areas of Colombia harvest legal crops or steer vulnerable 
youth in Central America toward constructive endeavors, we help to stem 
the flow of drugs to our communities. When we reduce deforestation in 
the Amazon, we help stabilize rainfall cycles for farmers in our 
country. And when we reduce the prevalence of disease in the Americas, 
we help keep our communities healthy.
    President Obama's upcoming visit to Brazil, Chile, and El Salvador 
underscores that amidst competing global priorities and challenges, the 
Americas remain a vital strategic partner for the United States.
    The President's trip comes at a most propitious time. The 
hemisphere is more prosperous, more democratic, and more independent 
today than ever before. Sound financial management has helped spur 
several years of robust economic growth. Thanks to greater access to 
education and innovative social programs, poverty has declined and 
income inequality narrowed in many countries. Citizens are better 
organized and governments more responsive to their needs.
    Despite this progress, few countries in Latin America and the 
Caribbean are poised to be classified as ``developed.'' Poverty rates 
in Latin America and the Caribbean remain high, with millions working 
outside the formal economy and denied access to credit. Many economies 
are characterized by a lack of diversification and low productivity. 
Crime rates have reached frightening levels, overwhelming ill-equipped 
judicial bodies. Schools are failing to prepare students for modern job 
opportunities. Governments are not collecting the revenues they need to 
provide essential services, rendering weak state institutions even more 
ineffective. Climate change is posing new economic threats. And some 
countries are even regressing politically, as governments impose new 
restrictions on political activity.
    Although many of these challenges are not new, we are better 
positioned than ever to make progress on them. As governments and civil 
society have advanced, they have become better development partners for 
the United States. At the same time, USAID, under the energetic 
leadership of Administrator Raj Shah, is implementing innovative 
approaches to development, based on lessons learned from around the 
world. These two dynamics--a more mature hemisphere and a more modern 
and effective development approach--present the United States and our 
neighbors with a historic opportunity to make sustainable development 
gains that will leave citizens throughout the Americas better off. Our 
overriding goal in Latin America and the Caribbean is to strengthen the 
capacity of governments, civil society and the private sector to expand 
economic opportunity, strengthen democratic governance, and improve 
citizen security.
    The hallmark of the Obama administration's approach to development 
is sustainability. Of all the metrics we use to gauge our success, none 
is more important than reaching the point at which we can close up shop 
in a country. As President Obama said when he announced his new 
development policy in September, the purpose of development ``is 
creating the conditions where our assistance is no longer needed.''
    There are a number of steps USAID is taking to achieve that 
objective. First, we are accelerating the shift from being an agency 
that provides aid to one that builds the capacity of countries to 
provide for themselves. We are donating less food and putting greater 
emphasis on helping farmers to increase agricultural production and 
access markets. Those changes are already evident in Haiti and Central 
America, where farmers we are assisting have experienced rising 
incomes.
    Similarly, we will continue to provide life-saving medical care, 
where needed, but we are placing a greater emphasis on improving the 
capacity of governments to manage their own health systems and provide 
affordable and high-quality care for their citizens. In Paraguay and 
Guatemala, for example, we are supporting the Ministry of Health's 
efforts to broaden the reach and efficiency of the country's medicine 
supply system.
    As school attendance rates have risen in recent years, we are 
emphasizing the improvement of education quality. In Jamaica, for 
example, we are supporting the government's efforts to increase early 
grade literacy and the acquisition of math skills.
    We are also dedicating fewer resources for one-time elections and 
more to enhance the capacity of government agencies to provide 
essential services. That means not just strengthening Congresses and 
municipalities, but helping Ministries of Health to guarantee high-
quality, affordable care and Ministries of Education to ensure that 
children are being prepared for 21st century jobs.
    Second, to strengthen institutions abroad, we are channeling 
resources more directly through governments, local NGOs and the private 
sector. We will continue to use outside contractors where appropriate, 
but will direct more assistance to local entities in order to 
strengthen them and reduce dependence on outside assistance. In Peru, 
for example, we are providing direct assistance to the national 
counterdrug agency and municipal governments to develop economic 
alternatives for former coca growers. In the coming weeks, we plan to 
give every USAID mission in the hemisphere a target for the share of 
its program portfolio to be channeled through organizations in their 
host countries.
    Third, we are increasingly collaborating with businesses. Long-term 
development and job creation depend upon an active and vibrant private 
sector. By partnering with private companies, we not only leverage 
resources; we create durable enterprises that will provide long-term 
development dividends. For example, spurred on by an incentive fund 
created by USAID and the Gates Foundation, the telecommunications 
company Digicel introduced a mobile banking service that will provide 
any Haitian with a cell phone with access to financial services. When 
we partner with private companies on initiatives like that, we achieve 
the development hat trick. We save money and advance our development 
objectives; firms gain access to markets and sources of supplies; and 
the poor improve their livelihoods.
    In order to achieve our sustainable development objectives, we are 
also consolidating resources in priority countries and sectors. We are 
guided by President Obama's pledge at the United Nations to ``focus our 
efforts where we have the best partners and where we can have the 
greatest impact.'' For USAID, that will mean operating in fewer 
countries; in each country working in fewer sectors; and in each 
sector, implementing fewer programs. In Latin America and the 
Caribbean, we are closing two missions. In recognition of the gains 
that Panama has made since we reopened our office there in 1990, we 
will be closing the mission and winding down our programming. And in a 
cost-saving measure, we plan to manage our Guyana projects from one of 
our regional offices. Steps like these will enable us to shift program 
resources and staff to countries where the need is greatest and where 
we are confident we have strong partners to achieve our development 
goals.
    We are also reducing our work in some sectors in Latin America and 
the Caribbean, such as family plan. We will continue to look for smart 
ways to exit other sectors, as well as other countries, and revisit our 
portfolio of programs to make sure we are utilizing our resources in 
the most effective way possible.
    In the field of development, where there is so much need, 
determining funding priorities is a challenge, and I can understand why 
a decrease in funding in any area might be disappointing. The question 
is not whether help is needed in a given area, because the response 
would almost always be an unequivocal yes. Rather, the question is 
where can the United States Government best leverage our scarce 
resources and most effectively deploy our range of agencies to have a 
transformative and lasting impact.
    As countries reach a point when they no longer need our assistance, 
we will actively recruit them to work with USAID as a fellow donor. We 
are already working with countries like Brazil and Chile, which have 
valuable lessons to share from their recent successes in achieving 
broad-based economic growth. We are looking to expand upon those 
arrangements and form new ones.
    Such partnerships will be especially important in dealing with 
development issues that respect no borders and require a coordinated, 
multinational response. In Latin America and the Caribbean, USAID is 
confronting two transnational threats in particular. The first is the 
escalating gang activity and drug trafficking.
    Areas of Mexico, Central America, and the Caribbean are suffering 
from the highest rates of nonpolitical violence in the world. In some 
countries in the region, murder rates are nearly 10 times higher than 
in the United States. As regional leaders develop strategies to counter 
the crime wave, it is in our interest to support their efforts. In an 
increasingly globalized world, organized crime, like disease and 
environmental degradation, penetrates borders. The flow of drugs 
through the Caribbean and Central America often continues into this 
country, harming our youth and sapping strength and resources from our 
communities.
    The lack of security also threatens to undermine all our other 
development work in the region. Crime is discouraging business 
investment and diverting public and private resources that could 
otherwise be used for more productive investments. Organized crime is 
corroding state institutions, undermining faith in democracy. Drug 
trafficking organizations have a greater presence in some areas than 
the government. Given the primacy of improving the security 
environment, we plan to channel as much of our resources in the region 
as possible to promote security and reduce the influence of organized 
crime. The President's 2012 foreign assistance request for the Western 
Hemisphere reflects the importance of programs that advance the common 
security interests of the United States and our neighbors.
    Beyond our self-interest in helping to combat organized crime and 
drug trafficking, we have an obligation to do so along our southern 
border. As Secretary Clinton has noted, the demand for drugs in the 
United States drives much of the illicit trade, while guns purchased in 
the United States are used in violent crimes in Mexico and other 
neighboring countries. USAID programs are an integral part of President 
Obama's National Drug Control Strategy and its goals to significantly 
reduce drug use and its consequences in the United States by 2015.
    The Obama administration is deepening President Bush's constructive 
Merida Initiative to combat crime in Mexico and Central America and 
expanding the effort into the Caribbean. USAID is continuing our 
longstanding work to strengthen the capacity of judicial systems to 
fairly and effectively provide justice; but the heart of our work now 
involves supporting preventive anticrime measures, namely providing 
youth vulnerable to the lure of crime with positive and productive 
alternatives. That means creating safe urban spaces, providing job 
training, and engaging in concerted efforts to keep children in school.
    As Mexico, Central America, and the Caribbean are mostly transit 
points for the movement of drugs, we also continue to work with drug-
producing countries to cut off the source. In Colombia, USAID has 
helped reduce coca production by as much as 85 percent in the 
geographic areas where we collaborated with the government and local 
communities. Today, thousands of farmers in Colombia who once 
cultivated coca are now growing legal crops, thanks to USAID 
assistance. Where guerrilla groups and drug trafficking organizations 
once operated with impunity in ungoverned terrain, peace is returning 
and civilian agencies of the state are arriving to provide services.
    As countries deal with crime's debilitating impact on development, 
another emerging issue--one with truly transnational impact--looms 
large for the region's economies: global climate change. The increase 
in average temperatures, changes in rainfall patterns, rising sea 
levels, glacier melts and extreme weather patterns linked to climate 
change are predicted to have an adverse economic impact on an already 
vulnerable region.
    Many of the region's key economic activities, such as agricultural 
production in Central and South America and tourism in the Caribbean, 
are acutely sensitive to climate change. Added to this is the strain on 
national budgets when droughts, heavy flooding or powerful hurricanes 
siphon off scare resources to finance disaster relief and recovery 
efforts.
    Through the Obama administration's Global Climate Change 
Initiative, we are responding to this threat by strengthening the 
capacity of communities and governments in Central and South America to 
improve land-use management to minimize deforestation, a principal 
source of emissions in Latin America. We are also working with the 
small island nations of the Caribbean to develop adaptation plans to 
protect critical industries and resources. And we are exploring 
partnerships with the private sector to devise creative ways to 
mitigate the economic costs of catastrophic events like hurricanes and 
flooding.
    Many of these challenges may seem daunting, but the United States 
is fortunate to have an impressive set of institutional partners to 
work with. Unfortunately, we cannot always work as closely with all 
governments in the region as we would like. Nevertheless, even in some 
of the more politically challenging settings, we have been able to 
identify particular ministries and officials eager to work with us to 
advance common objectives. And when that is not feasible, we are often 
able to collaborate with capable NGOs.
    In some countries, our objectives are more elemental. While the 
hemisphere has experienced impressive democratic gains in recent years, 
there has been a narrowing of political space in some countries and 
unrelenting repression in another. Freedom House reports that 10 
countries in Latin America and the Caribbean are only ``partly free,'' 
with political rights and civil liberties decreasing in six countries 
in the past 2 years. Governments fearful of their own people are 
restricting the rights of individuals, the media, civic organizations 
and political parties.
    Autocratic governments might try to make it more difficult to work 
in solidarity with citizens struggling to exercise basic human rights, 
like freedom of expression and freedom to assemble. But the United 
States will not yield in our support for those who want to enjoy 
universally recognized human rights.
    Mr. Chairman, the many development challenges I have discussed 
today converge in one form or another in Haiti, USAID's highest 
development priority in the hemisphere. As we move into the second year 
of post-earthquake recovery and reconstruction, we are already 
implementing our new approach to development. We are partnering 
successfully with Haitian Government institutions to respond to the 
cholera epidemic; address security; and boost the economy. We are 
ramping up our partnerships with the private sector to generate jobs 
and benefit from innovative approaches to tackling development 
challenges, like the mobile banking initiative. And we are including 
the Haitian people in the reconstruction effort. As contracts are 
awarded in the coming months, we will be reaching out to Haitian 
organizations to maximize their ability to compete. To the extent 
possible, we want to partner with local entities, rather than outside 
contractors, in order to creating lasting local capacity.
    We are encouraged by the progress made in Haiti over the past year. 
In coordination with other donors and in support of the Government of 
Haiti, USAID has saved countless lives, began to build the country back 
better and strengthened the government's capacity to provide for its 
citizens. The number of Haitians living in camps has fallen by 700,000 
since last spring. The U.S. Government alone has removed over 1.3 
million cubic meters of rubble. More Haitians have access to clean 
water and health services today than before the earthquake. And thanks 
to the leadership of the Haitian Ministry of Health, with the support 
of the international community, the cholera epidemic has stabilized, 
with the number of cases growing more slowly and the fatality rate 
down.
    To be sure, the challenges before us are still formidable. With 
over 800,000 Haitians still living in camps, moving people into safe 
resilient housing is one of our top priorities. Another is clearing 
away the remaining rubble. To make more progress on this front, we need 
help from other donors and the Government of Haiti in addressing land 
tenure issues and prioritizing funding for rubble removal and 
resettlement of the displaced.
    Beyond these immediate needs, Haiti's long-term development plan is 
now in place, with United States efforts focused in four areas: 
infrastructure, health, agriculture and governance. In a major 
reconstruction development last month, we reached agreement with the 
Inter-American Development Bank and one of the world's largest 
garmentmakers to develop an industrial park with the potential to 
double the size of Haiti's textile sector.
    Despite the daunting challenges in Haiti, I am hopeful about the 
country's prospects. We have been encouraged by the ability of Haitian 
Government agencies to rebound from the devastating earthquake and will 
be eager to work with the new government when it comes on board. But 
fundamentally, it is the tenacity and resilience of the Haitian people 
that inspire and drive us. Their unrelenting determination not just to 
survive, but to thrive, reminds us all of what is in reach when we join 
forces for the common good.
    That dynamic in Haiti--of peoples, organizations, and governments 
coming together--is being repeated every day in various forms in the 
largest cities and smallest villages throughout the Americas. We help 
each other not only because it is the right thing to do and is an 
expression of our values, but because our well-being is linked to that 
of people throughout this vast and diverse hemisphere. As the peoples 
of Latin America and the Caribbean become more prosperous and more 
secure, so will we. Ultimately, successful development abroad will 
depend on efforts in the countries themselves. But USAID stands ready 
to help, because it is in our national interest to do so.
    Thank you, Mr. Chairman. I look forward to the committee's 
questions.

    Senator Menendez. Mr. Kaplan.

    STATEMENT OF ROBERT H. KAPLAN, PRESIDENT AND CEO, INTER-
              AMERICAN FOUNDATION, WASHINGTON, DC

    Mr. Kaplan. Chairman Menendez, future Ranking Member Rubio, 
members of the subcommittee, congratulations in advance on your 
committee assignments and we look forward to working with you 
and all of the committee members. It is my pleasure to testify 
before you today on behalf of the Inter-American Foundation, a 
small independent foreign assistance agency of the U.S. 
Government that works directly with the organized poor in Latin 
America and the Caribbean.
    Policy deliberations naturally emphasize broad trends and 
impacts at the national or regional level, and I appreciate 
your interest in bringing a community perspective to the table. 
We know from our own country's experience that healthy 
communities strengthen democracy, create economic 
opportunities, and enhance social resilience. For four decades, 
the Inter-American Foundation has been providing small grants 
to support self-help ideas and solutions proposed by the poor 
themselves. The impact of the IAF's grants can be life-
changing. Our grants help start or expand small businesses, 
create jobs, develop skills, and access markets for local 
products. They promote inclusion of disadvantaged groups or 
address basic needs, such as nutrition or access to clean 
drinking water, sanitation, or health care.
    Regardless of the immediate purpose, the fundamental long-
term objective is to enhance local social capital as people 
work together to solve their most pressing problems and in the 
process build stronger communities and more stable societies.
    The experience of the IAF staff working directly with the 
organized poor in 21 countries gives us firsthand insight into 
their concerns and aspirations.
    While there's been much progress throughout the region, 
many challenges remain. There are still deep pockets of poverty 
where people struggle to meet their most basic needs. 
Globalization has opened opportunities, but it has also made 
the poor more vulnerable to economic shocks. Lacking better 
alternatives, the poor often settle on land exposed to 
hurricanes, earthquakes, or man-made hazards. Too often, the 
poor fall victim to traffickers and illicit activities and the 
destabilizing violence that comes with them. Despair at lack of 
opportunities at home leads some to migrate, despite the 
personal risk and the immediate cost to their own families and 
communities.
    We receive hundreds of proposals every year from grassroots 
groups with imaginative ideas for overcoming these challenges. 
These groups embrace democratic values and are committed to 
participating actively in civic life. They believe in the 
opportunities available in the market economy and have a 
fervent desire to join in. These are decent, hardworking people 
living in difficult circumstances, but full of spirit and the 
will to succeed. Their creativity and perseverance despite the 
odds are inspiring.
    The proposals the IAF receives build on the proponent's own 
resources and what they are able to mobilize from others. Since 
the agency's founding in 1969, grantees have contributed or 
mobilized almost $1 billion, far exceeding the IAF's own $665 
million.
    Supporting initiatives designed and implemented by the poor 
is a good investment. It increases the likelihood of long-term 
success and enhances local social capital and capacity to solve 
other problems or take advantage of future opportunities.
    The scale of the Inter-American Foundation's program is 
very small and it is clear we must work in partnership with 
others. The flexibility that comes with being small and 
independent allows us to experiment, share our experience with 
others, and encourage others to--and bring others to the table.
    One example is our relationship with a network of corporate 
foundations from the region, which allows us to lever our 
investment two-to-one while helping private donors advance 
beyond charitable philanthropy to have a long-term sustainable 
development impact.
    The IAF has consistently encouraged a culture of results as 
part of our programs. Since 2000 we have required all grantees 
to report their progress by applying a grassroots development 
framework designed to track both tangible and intangible 
results. This results-based approach helps all of us learn what 
works and adjust accordingly.
    Funding small-scale self-help development and 
entrepreneurship, the Inter-American Foundation supports the 
efforts of disadvantaged people throughout the hemisphere to 
escape poverty, improve livelihoods, and participate more 
actively in their nation's civil society. Through our 
respectful and responsive approach, the IAF develops goodwill 
toward the United States and maintains a positive presence at 
the community level, including in countries where bilateral 
government relations may be strained.
    Mr. Chairman, in conclusion let me say that cost-effective 
investments at the grassroots that help make Latin America and 
the Caribbean a better place in which to live are fundamentally 
in the interest of the United States. This was Congress' 
mandate to the Inter-American Foundation four decades ago and 
it is as important and relevant today as ever.
    Thank you very much.
    [The prepared statement of Mr. Kaplan follows:]

                 Prepared Statement of Robert N. Kaplan

    Chairman Menendez, Ranking Member Rubio, and members of the 
subcommittee, it is my pleasure to testify before you today on behalf 
of the Inter-American Foundation (1AF), a small independent foreign 
assistance agency of the U.S. Government that works directly with the 
organized poor in Latin America and the Caribbean. Policy deliberations 
naturally consider broad trends and impacts at the national or regional 
level, and I appreciate your interest in bringing a community 
perspective to the table. We know from our own country's experience 
that healthy communities strengthen democracy, create economic 
opportunities and enhance social resilience.
    For four decades, the Inter-American Foundation has been providing 
small grants to support grassroots development in Latin America and the 
Caribbean. We invest in self-help ideas and solutions proposed by the 
poor themselves, and we work with them directly. Our grants to local 
and community-based groups complement their own resources to address a 
problem or take advantage of an opportunity to improve families' 
livelihoods where they live. Individual grants may help start or expand 
small businesses, create jobs, develop skills or access markets for 
local products. They may promote inclusion of disadvantaged groups or 
address basic needs, such as nutrition or access to clean drinking 
water, sanitation, or health care. Regardless of the immediate purpose 
of the limited funding we provide, the fundamental long-term objective 
is to enhance local social capital as people work together to solve 
their most pressing problems, and in the process build stronger 
communities and more stable societies.
    The experience of the IAF's staff working directly with the 
organized poor in 21 countries gives us firsthand insight into their 
concerns and aspirations. While there has been significant progress 
throughout the region over the last few decades, many challenges 
remain. There are still deep pockets of poverty where people struggle 
to meet even their most basic needs. In many places, public and private 
institutions are not yet able to engage the poor effectively to help 
them along a viable path out of poverty. Globalization has opened 
opportunities, but it has also made the poor more vulnerable to 
economic shocks such as rising food or fuel prices. Lacking better 
alternatives, the poor often settle on land that is particularly 
exposed to hurricanes, earthquakes or man-made hazards. Too often, the 
poor fall victim to criminal opportunists trafficking in drugs or women 
and children and to the destabilizing violence that comes with them. 
And despair at lack of opportunities at home leads some to leave, 
despite the personal risks and the immediate cost to their own families 
and communities.
    At the IAF, we receive hundreds of proposals every year from 
grassroots groups with imaginative ideas for overcoming these 
challenges. We see in their organizations their embrace of democratic 
values and their desire to participate actively in civic life. Their 
proposals illustrate their strong belief in the opportunities available 
in a market economy. These are decent, hard-working people living in 
difficult circumstances but full of spirit and the will to succeed. 
Their creativity and perseverance, despite the odds, are inspiring.
    Assistant Secretary Valenzuela recently told an audience at the 
Brookings Institution that U.S. policy toward Latin America must be 
``respectful, responsive, and realistic.'' This has been the Inter-
American Foundation's approach at the grassroots since the beginning. 
In 1975, an appraisal of the IAF and its grantees during the first 5 
years was titled ``They Know How'' to acknowledge the capabilities of 
our partners and to underline the central tenets of the IAF's 
responsive approach and respect for local knowledge. We provide an 
opportunity for marginal populations to articulate their principal 
challenges and map a way forward. In the process, this approach 
strengthens bonds within communities, as well as engagement with 
society at large.
    The proposals we receive identify a funding gap after taking into 
account the proponents' own resources and what they are able to 
mobilize from others. Since the agency's founding in 1969, grantees 
have contributed or mobilized almost $1 billion--far exceeding the 
IAF's $665 million investment. In deciding whether to fund a proposal, 
IAF staff confirm on the ground that the communities themselves play a 
protagonist role. This approach both increases the likelihood of 
success and enhances local social capital so that community groups can 
build on the experience to solve other problems or take advantage of 
future opportunities.
    The scale of the Inter-American Foundation's program is very small, 
and it is clear to us that we must work in partnership with others. We 
have always tried to use the flexibility and agility that comes with 
being small and independent to experiment, share our experience and 
encourage others to bring their resources to bear. For example, over 
the last several years, we have developed a robust relationship with a 
network of corporate foundations from the region that, by cofunding 
with us, have learned to direct their own programs to address long-term 
development needs rather than short-term charity. Through this 
relationship, the IAF levers its investment two-to-one and nurtures a 
still-incipient culture of private philanthropy in the region.
    We can also play a useful role by complementing and extending the 
impact of large public or private development projects. Over the years, 
we have seen marginalized communities lose out or be displaced if they 
are located in the footprint of multimillion dollar investments in 
infrastructure, natural resources extraction or tourism. By providing 
timely support to these communities, the IAF may be able to help them 
take advantage of the economic opportunities that accompany these 
investments instead.
    The Inter-American Foundation has consistently encouraged a culture 
of results as part of our program of development grants. Since 2000, 
all grantees have been required to report on their progress by applying 
a ``grassroots development framework'' that the IAF designed to track 
both tangible and intangible results. Grantees submit reports every 6 
months, and the data are independently verified on site. More recently, 
we have begun to return to communities 5 years after the IAF's support 
has ended in order to assess the ongoing impact. This results-based 
approach helps us and our grantees learn what works and adjust 
accordingly.
    By funding small-scale, self-help development and entrepreneurship, 
the Inter-American Foundation supports the efforts of disadvantaged 
people throughout the hemisphere as they begin to break out of poverty, 
improving conditions for themselves and future generations, and 
participate more actively in their nation's civil society. Through its 
support, the IAF develops goodwill toward the United States and 
maintains a positive presence at the community level, including in 
countries where bilateral governmental relations may be strained.
    Cost-effective investments at the grassroots that help make Latin 
America and the Caribbean a better place in which to live are 
fundamentally in the interest of the United States. This is the mandate 
with which Congress charged the Inter-American Foundation four decades 
ago, and it is as important and relevant today as ever.

    Senator Menendez. Thank you.
    Dr. Mora.

 STATEMENT OF FRANK O. MORA, PH.D., DEPUTY ASSISTANT SECRETARY 
   OF DEFENSE FOR THE WESTERN HEMISPHERE, U.S. DEPARTMENT OF 
                    DEFENSE, WASHINGTON, DC

    Dr. Mora. Thank you, Mr. Chairman and members of the 
committee. I'd like to begin by thanking you for the 
opportunity to testify before you today and for your interest 
in U.S. defense policy in the Americas. And thank you, Mr. 
Chairman, for that nice introduction.
    I value the insights and the work of this committee in 
advancing U.S. interests in the hemisphere. Indeed, my hope is 
that I can help you better do your job by being transparent in 
mine, and that my testimony today is responsive in this regard.
    Mr. Chairman, the Defense Department is focused on 
strengthening its relationships in the Americas by using 
defense diplomacy to institutionalize ties. This approach is a 
byproduct of the Obama administration's commitment to equal 
partnership in the region. As the President made clear in his 
remarks at the Summit of the Americas in 2009, from a defense 
standpoint the framework of partnership makes perfect sense 
because interdependence goes beyond economics and culture. It 
also includes security and defense. In an age of transnational 
security challenges, nations can no longer afford to go it 
alone. In fact, we act unilaterally at our own peril, because 
these problems require multinational solutions. Collective 
action is essential for homeland security and for the security 
of our neighbors.
    U.S. defense policy in the region is therefore guided by 
one principal objective and that is to be a partner of choice. 
The institutionalization of relationships is critical to the 
security of the region because we require continuity to make 
progress in countering transnational challenges. For this 
reason, we have chosen to forge defense cooperation agreements, 
also known as DCAs, with countries such as Brazil and Colombia. 
DCAs provide long-term umbrella frameworks for security 
relationships. They also have the added benefit of providing 
transparency, a key element of building trust and confidence on 
defense issues, and a point that Brazil and Colombia have 
understood well.
    Bilateral working groups, also known as BiWGs, are another 
important formal mechanism for sustaining our relationships in 
the region. Since I became Deputy Assistant Secretary of 
Defense for Western Hemisphere Affairs, we have participated in 
BiWGs with countries such as Argentina, Brazil, Colombia, El 
Salvador, Mexico, and Peru. Each BiWG is different, of course, 
with a specific emphasis on those issues or areas of most 
importance to the bilateral relationship. But they all allow 
for senior level discussion.
    These discussions normally result in a structure and a plan 
for how we should move forward and cooperate. I believe BiWGs 
provide an important blueprint for our strategic engagement in 
the region.
    Of particular note, Mr. Chairman, I would note, I would 
take notice of a strategic dialogue that we will begin next 
month when I will travel to Uruguay to participate in our 
first-ever strategic dialogue. So our list of BiWGs soon will 
increase.
    A BiWG with Mexico was held for the first time in 2010, an 
indication of our increasing collaboration against a shared 
threat. In addition, we are working closely with Mexico to 
develop a strategy to tackle emerging threats along its 
southern border with Guatemala and Belize.
    In 2010 we also held the first binational human rights 
dialogue with Mexico, an initiative we are working to establish 
on an annual basis. Similarly, our BiWGs with Brazil has been 
revitalized. After a 6-year lull, the BiWG was reconvened in 
November 2008 in Brasilia and has met regularly ever since.
    In addition to the BiWG and the defense cooperation 
agreement, we signed a general security military information 
agreement, GSMIA, in November 2010 to facilitate the exchange 
of classified information with Brazil. In sum, United States-
Brazil defense cooperation is closer today than at any time 
since 1977, when Brazil unilaterally withdrew from a military 
cooperation agreement with the United States.
    Of course, Brazil's selection of the Super Hornet would be 
another key element in broadening our cooperation for the 
future. As part of this proposal, the U.S. Government has 
allowed for significant technology sharing with Brazil. In 
fact, this is technology that has been provided only to our 
close partners, which is a clear indication of the strength of 
our partnership with Brazil.
    Our diplomatic approach is also yielding impressive results 
with regards to natural disaster response. At the 2010 
Conference of Defense Ministers of the Americas in Bolivia, 
Secretary Gates spearheaded a proposal, cosponsored by 13 
countries, that seeks to develop a framework for military 
support to civilian-led disaster relief operations and to 
standardize a system for facilitating collaboration among 
militaries during these crises.
    Finally, I would like to underscore that U.S. Southern 
Command and U.S. Northern Command are vital to our efforts in 
building partnerships by supporting humanitarian assistance, 
security assistance, training, military education, peacekeeping 
exercises, and multinational operations, which brings together 
many nations to confront illicit trafficking in a collaborative 
environment.
    Mr. Chairman, I would like to close by reiterating that 
this is just a snapshot of our activities in the Americas, but 
I hope it has provided you with a sense of how we approach 
engagement in the region.
    I very much look forward to your questions. Thank you.
    [The prepared statement of Dr. Mora follows:]

                  Prepared Statement of Frank O. Mora

    Mr. Chairman and members of the committee, I would like to begin by 
thanking you for the opportunity to testify before you today and for 
your interest in U.S. defense policy in the Americas. I value the 
insights and work of this committee in advancing U.S. interests in the 
hemisphere. Indeed, my hope is that I can help you better do your job 
by being transparent in mine, and that my testimony today is responsive 
in this regard.
    Mr. Chairman, the Defense Department is focused on strengthening 
its relationships in the Americas by using defense diplomacy to 
institutionalize ties. This approach is a by-product of the Obama 
administration's commitment to equal partnership in the region, as the 
President made clear in his remarks at the Summit of the Americas in 
2009.
    From a defense standpoint, the framework of partnership makes 
perfect sense because interdependence goes beyond economics and 
culture; it also includes security and defense. In an age of 
transnational security challenges, nations can no longer afford to go 
it alone. In fact, we act unilaterally at our own peril because these 
problems require multinational solutions. Collective action is 
essential for our homeland security and for the security of our 
neighbors. U.S. defense policy in the region is therefore guided by one 
principal objective: To be a partner of choice.
    The institutionalization of relationships is critical to the 
security of the region because we require continuity to make progress 
in countering transnational challenges. For this reason, we have chosen 
to forge defense cooperation agreements (DCAs) with countries such as 
Brazil and Colombia.
    DCAs provide long-term, umbrella frameworks for security 
relationships. They also have the added benefit of providing 
transparency, a key element of building trust and confidence on defense 
issues, and a point that Brazil and Colombia have understood well.
    Bilateral Working Groups (BWGs) are another important formal 
mechanism for sustaining our relationships in the region. Since I 
became the Deputy Assistant Secretary for Western Hemisphere Affairs, 
we have participated in BWGs with countries such as Argentina, Brazil, 
Chile, Colombia, El Salvador, Mexico, and Peru.
    Each BWG is different, with a specific emphasis on those issues or 
areas of most importance to the bilateral relationship, but they all 
allow for senior-level discussion. These discussions normally result in 
a structure and plan for how we should move forward and cooperate. I 
believe BWGs provide an important blueprint for our strategic 
engagement in the region.
    Of particular note, I will travel in March to Uruguay to 
participate in a first-ever bilateral Strategic Dialogue with Uruguay, 
so our list of BWGs will soon increase. A BWG with Mexico was held for 
the first time in 2010--an indication of our increasing collaboration 
against a shared threat. In addition, we are working closely with 
Mexico to develop a strategy to tackle the emerging threats along its 
southern border with Guatemala and Belize. In 2010, we also held the 
first Binational Human Rights dialogue with Mexico, an initiative we 
are working to establish on an annual basis.
    Similarly, our BWG with Brazil has been revitalized. After a 6-year 
lull, the BWG was reconvened in November 2008 in Brasilia and has met 
regularly ever since. In addition to the BWG and DCA, we signed a 
General Security of Military Information Agreement (GSOMIA) in November 
2010 to facilitate the exchange of classified military information. In 
sum, United States-Brazil defense cooperation is closer today than at 
any time since 1977, when Brazil unilaterally withdrew from a military 
cooperation agreement with the United States.
    Of course, Brazil's selection of the Super Hornet would be another 
key element in broadening our cooperation for the future. As part of 
this proposal, the U.S. Government has allowed for significant 
technology-sharing with Brazil. In fact, this is technology that has 
been provided only to our closest allies and partners, which is a clear 
indication of the strength of our partnership with Brazil.
    Our diplomatic approach is also yielding impressive results with 
regards to natural disaster response. At the 2010 Conference of Defense 
Ministers of the Americas (CDMA) in Bolivia, Secretary Gates 
spearheaded a proposal--cosponsored by 13 other countries--that seeks 
to develop a framework for military support to civilian-led disaster 
relief operations and to standardize a system for facilitating 
collaboration among militaries during these crises. Clearly, the region 
is coming together to ensure we are best prepared when another Haiti-
like disaster strikes.
    Finally, I would like to underscore that U.S. Southern Command and 
U.S. Northern Command are vital to our efforts in building partnerships 
by supporting humanitarian assistance, security assistance, training, 
military education, peacekeeping, exercises, and multinational 
operations like that of Joint Inter-Agency Task Force-South (JIATF-
South), which brings together many nations to confront illicit 
trafficking in a collaborative environment.
    Mr. Chairman, I would like to close by reiterating that this is 
just a snapshot of our activities in the Americas, but I hope it has 
provided you with a sense of how we approach engagement in the region. 
I very much look forward to your questions.

    Senator Menendez. Well, thank you all for your testimony. 
It's very helpful to start a foundation here.
    I think we'll start with 7-minute rounds, based on the 
number of members who are here, and we'll see how we progress. 
So the Chair recognizes himself.
    Let me start with you, Mr. Secretary. Citizen security and 
narcotics. My global view is that we've made a lot of progress 
in the hemisphere, but there are some areas that still are 
problematic. In the area of citizen security and narcotics 
trafficking in Mexico, Central America, and the Caribbean, I'm 
not sure that our progress is certainly keeping up with that of 
criminal and drug trafficking organizations. Certainly the 
situation in Mexico is particularly gruesome. We have seen as 
many as 10,000 people murdered as a result of showdowns between 
criminal organizations or between those organizations and 
public authorities. Certainly this past Tuesday, two U.S. 
Immigration officials were shot and one, Special Agent Jaime 
Zapata, was killed, and our thoughts and prayers are with him 
and his family. The agents were on a well-traveled highway in 
an armored car with diplomatic plates.
    So I'm concerned that our interests and our challenges are 
incongruous with the essence of what we are trying to do there. 
I was a strong supporter of the Merida Initiative, but I look 
at the fiscal year 2012 budget, which actually decreases 
funding for counternarcotics efforts and law enforcement by 7 
percent for the region, and wonder how we do that at a time 
when we are still facing a very significant, severe challenge? 
We still have the Central America issue. As we seek to pressure 
the narcotraffickers, working with the Mexican Government, that 
squeezes them into Central America, and then squeezed into the 
Caribbean, so much so that we recently--the United States 
Government--recently denied the Dominican Republic use of 
certain container ports to ship to the United States.
    So help me out here.
    Mr. Valenzuela. Sure. Mr. Chairman, I think you're 
absolutely right that there's nothing perhaps that's more 
important for most of the citizens in Latin America--and this 
is throughout the continent--than citizen security. It's 
particularly serious in the case of Mexico, Central America, 
the Caribbean--Central America and the Caribbean because in 
some ways they're caught like a ham in a sandwich between 
Mexico and Colombia.
    We've been redoubling our efforts to pay attention to this 
issue, and we're doing so by strengthening our Merida 
Initiative and working with Mexico as well as expanding our 
efforts in Central America with CARSI, with the Central 
American Regional Security Initiative. We just had a meeting 
this Monday with the European Union, with the Canadians, with 
others, because this has to be an international response, and 
coordinating better other donors is allowing us to strengthen 
our own strategic approach to this as well. The Europeans 
provide about one-third of assistance to Central America, for 
example, in some of the other areas.
    But our focus, Mr. Chairman, very specifically is on trying 
to bring down the drug trafficking organizations and the 
cartels, but at the same time moving to strengthen institutions 
like police and governance, judicial institutions, while at the 
same time, as Mark made it clear in his testimony, we have a 
whole host of programs that are also looking at things like 
youth at risk in places like El Salvador, where this is a 
significant problem.
    This is an international----
    Senator Menendez. I'm all for institution-building, which 
is something I advocated for when we were doing Merida, arguing 
that it couldn't all be firepower. But when we move our budget 
in a direction that is opposite our challenge, we are not 
aligning ourselves in terms of our challenge and that's my 
concern. So I hope the administration will work with the 
Congress to make sure that our resources meet our challenges, 
because I appreciate that the European Union is a third and 
there is another third involved there.
    Mr. Valenzuela. The Inter-American Development Bank, the 
World Bank, and others----
    Senator Menendez. Those are all good, and coordinating, 
maximizing, and leveraging our effort is fantastic. But I don't 
want the security of the communities in my State of New Jersey 
to depend upon any of that effort. I want it to depend upon our 
own.
    Mr. Valenzuela. I couldn't agree with you more, and I'd 
like to work--the administration would like to work with the 
Congress to make sure that those levels remain high.
    Senator Menendez. I appreciate that.
    Let me talk about democracy and development, Mr. 
Feierstein. I am concerned when I look at the AID request for 
democracy, human rights, and governance programs in Latin 
America, typically around $2 million, which is approximately 1 
percent of the total funding of $1.9 billion requested for the 
region.
    Now, it seems to me that, while we celebrate the advances 
of the region, I certainly am concerned by efforts in the 
region to disguise authoritarianism as the exercise of 
Presidential power or convenient constitutional reforms, as we 
have seen in Venezuela, in Nicaragua, and as some anticipate in 
Guatemala prior to the September elections. So what steps are 
we taking, if democracy promotion is important to us and 
important to the citizens of the hemisphere for the fulfillment 
of their own hopes, dreams, and aspirations? Why are we not 
looking at this in a more robust way?
    Mr. Feierstein. Thank you, Mr. Chairman. I very much 
appreciate the question. We have a robust set of programs in 
Latin America and the Caribbean to advance democracy. We think 
of them in three baskets. First, we work in the area of 
institution-building, strengthening electoral bodies, 
strengthening Congresses, municipalities, and that's a 
recognition, as you said, Mr. Chairman, and Senator Rubio as 
well in his opening remarks, of the progress that the 
hemisphere has made. In most cases, we're talking about 
strengthening institutions, strengthening democracies, as 
opposed to the promotion of democracy.
    But second, I think we need to broaden how we think about 
governance. We tend to think about Parliaments, mayors' 
offices, but I think we need to think as well about Ministries 
of Education, Ministries of Health. To the extent that we are 
trying to create local capacity throughout the region and make 
governments more efficient in providing services to their 
people, the strengthening of those institutions is vital as 
well.
    Finally, there are countries that you mentioned where we 
are seeing a backsliding; and we need to continue our robust 
programs to support civil society, to support political 
parties, to support a range of media, to protect and to try to 
create political space, and of course, in the one country where 
there are no freedoms, to try to help to create civil society 
networks and help give people the opportunity to communicate, 
both among themselves and with people in other countries.
    Senator Menendez. Well, I'd like to follow up with you, but 
I will wait for the second round and turn to Senator Rubio.
    Senator Rubio. Thank you.
    Let me start first by kind of describing what I hope is our 
vision for the region, and I think it's not in conflict with 
what I've read in your statement or what the President has 
stated. I just wrote this down here, so it's a work in 
progress. But basically my vision for the region, I think ours 
from all the testimony here today, is that the Western 
Hemisphere is a close and mutually respectful partnership with 
our neighbors. We understand that from time to time among 
friends there will be disagreements on policy issues, 
particularly on some international issues, but by and large 
we're going to find ourselves, if we're truly partners, on the 
same side more often than not, because we're going to have very 
close security and economic ties.
    Is that a fair vision for the future? Do you think that in 
essence describes what our hopes should be for the region?
    Mr. Valenzuela. I think so. I think so, Senator. There's no 
question that we find that we have real, genuine partners in 
the hemisphere and that we share extraordinary values with the 
countries of the hemisphere. It's simply not true that there's 
a distance between us in that regard.
    I think as we move forward constructively to try to 
advance, each country has its interests, but we have common 
interests, and that's what's, I think, encouraging about the 
Western Hemisphere. And they are things like strengthening 
democratic institutions or freedoms, as well as becoming more 
competitive and a very difficult 21st century, where Latin 
America has fallen behind.
    Senator Rubio. In that light, I want to examine, in the 
time that I have, briefly three key points in the hemisphere 
that I think are critical to any successful carrying out of 
this vision. The first is Mexico. Unfortunately, I think, in 
recent years we've seen statements by some in our government 
claiming that the country might even be on the verge of a 
failed state. I think it was unfortunate that that was the 
statement that was uttered.
    The reality of it is that, from everything I have read--and 
please correct me if I'm wrong--the Mexican Government appears 
to be deeply intent on confronting this challenge internally 
and solving it, in much the same way Colombia was over the last 
two decades. I was hoping you could elaborate on that briefly, 
and I think Dr. Mora as well may want to comment on that.
    Mr. Valenzuela. Yes, I certainly would agree with that, 
Senator. I think that we have a very close, respectful, and 
constructive partnership with Mexico on this. It is a very 
significant challenge. It's one where we've recognized our 
coresponsibility as a demand country with regard to narcotics 
and so on. But at the same time, we've moved forward.
    Frank Mora mentioned earlier that for the first time there 
really is an extraordinary cooperation on the security side 
with Mexican authorities. What I'd like to stress--and this 
goes back to the chairman's point earlier about some of the 
funding--is that in Mexico in particular we've moved from some 
of the original expenses for some of the heavy equipment and 
things like that, that were very expensive, to moving to other 
areas where they are really significant, particularly setting 
up police, making the judicial institutions work better, 
particularly at the local level, and so on and so forth.
    This has to be a multipronged policy. It has to be a 
comprehensive policy. We're working effectively, I think, 
together with Mexico in order to overcome those challenges.
    Dr. Mora. Yes, Senator, I agree with your assessment of 
Mexico. I think, as the President and Secretary Clinton have 
expressed, we do not believe there is any attempt to overthrow 
the Government of Mexico. We don't think it's a weak state or 
failed state or anything of that sort.
    Certainly we recognize the violence that exists. We are all 
concerned with that violence. Certainly Mexico is. But I think 
in part I would say, Senator, that part of the reason for the 
violence is a result of some of the success the Mexican 
Government is having in terms of pressuring the drug 
trafficking organizations, the transnational criminal 
organizations, creating more conflict. So I think that's 
important to underscore.
    The other thing I'd like to also emphasize, and Secretary 
Valenzuela mentioned, the kind of cooperation that we're doing 
in collaboration with Mexico is really extraordinary from a 
mil-to-mil standpoint. We are engaged with our partners, both 
our partner Sedena, which is the National Secretariat of 
Defense, and the Navy on exchange and training and information-
sharing, providing equipment of course, subject matter 
exchanges, human rights training--a whole host of activities 
that we really didn't do and weren't doing 4 or 5 years ago.
    It's really a testament to the commitment of both 
governments, President Calderon and the Government of the 
United States, to deal with this very serious--very serious 
problem.
    Senator Rubio. I want to move on to the second key part of 
the region, country, and that's Colombia. We've talked about 
that before in our statements. What exactly are we asking of 
them in order to consummate this trade agreement? First of all, 
they're not waiting around, as they shouldn't. They are 
beginning to examine other partnerships around the world as the 
United States continues to take longer and longer to consummate 
something that makes total sense from both perspectives. So 
they're acting in their best national interests and moving on 
without us.
    What are we asking of them? What is the checklist that has 
to be accomplished in order to get this deal done?
    Mr. Valenzuela. Senator, as we said earlier, the President 
has instructed--in fact, as we speak today there is a USTR-led 
interagency group in Colombia at this particular point to look 
at some of the outstanding issues that are still on the table 
with regard to that.
    But we certainly see a commitment on the part of this 
government to move forward on some of the remaining issues that 
exist. Those have to do with issues having to do with labor 
code and violence against unionists and that kind of thing.
    But let me assure you that we see very close engagement 
with the Colombians to try to, in fact, get to the outstanding 
issues.
    Senator Rubio. I guess where I'm getting at with the 
question is: Is there somewhere I can go in this city where 
someone will give me a sheet of paper that will tell me, these 
are the things that we are trying--that we would like Colombia 
to do in order to consummate this deal? Does that kind of 
matrix exist, the particular metrics that we're asking them to 
meet? I've been here 6 weeks, so maybe it's out there and I 
haven't found that place yet.
    But if someone could show me who has that, so we could 
perhaps be helpful.
    Mr. Valenzuela. I think the answer is we're working on it, 
and that this mission in Colombia this week of USTR should help 
to advance some of the points on that.
    Senator Rubio. And I won't belabor the point. But when you 
say we're working on it, I guess my question is: So we don't 
have that yet? If the Colombians were here with us today and 
they told us, we want this deal, what do we need to do, our 
answer would be, we're still working on it?
    Mr. Valenzuela. We're working on it, but, look, let me also 
say that I would defer also to USTR on this since they're the 
ones that have the lead on this issue.
    Senator Rubio. Thank you.
    Senator Menendez. Thank you, Senator Rubio.
    Senator Udall.
    Senator Udall. Thank you, Chairman Menendez.
    I share both of their comments about Mexico in terms of 
worrying about it and worrying about the relationship. New 
Mexico, my State, is a border State and we're one of four that 
borders six states down in Mexico, and there's a great deal of 
worry down on the border in terms of the narcotrafficking and 
the gang activity.
    I think if you went to the border and asked the people on 
the border if they thought things were getting better, you 
would have the perception that it isn't getting better. And yet 
the panel here seems to say we're working on it, it is getting 
better. Dr. Mora, you're talking about the sharing that's going 
on in terms of the DOD.
    The numbers--we're seeing the numbers go up in terms of the 
murders, aren't we? And I know that the President has put on a 
big effort to try to tackle this. But can you give me a sense? 
What would you tell somebody down there on the border that's 
saying there are murders now occurring in the United States? 
There's evidence that these gangs or people are coming over and 
in the United States gang activity is going on related to gangs 
down in Mexico. It's a very worrisome thing, I think, if you're 
down there right on the border and hearing all the stories and 
hearing the reports.
    Please help me out here.
    Dr. Mora. Senator, I'll talk briefly about that. I think 
that, as I mentioned earlier, I think the more pressure the 
Mexican Government places on these organizations, the more the 
violence will spill over into other areas, either south to 
Central America or to the Caribbean. Our approach is that we 
need to be proactive. We need to enhance the degree to which we 
are collaborating and sharing information, in my case with 
HEDENA and SOMAR, and that we are doing.
    Senator Udall. You're sharing intelligence, is that 
correct?
    Dr. Mora. Indeed.
    Senator Udall. And we haven't done that for a long time?
    Dr. Mora. I wouldn't be able to tell you since when.
    Senator Udall. I think that's an encouraging development, 
the sharing of intelligence. I know that there is probably a 
worry on our side that by sharing intelligence it's going to go 
to the wrong places. Is there any evidence that's happening?
    Dr. Mora. There's no evidence on my side, Senator.
    Senator Udall. Please, go ahead. You were continuing.
    Mr. Valenzuela. If I could simply add to that, that, yes, I 
think that we can certainly understand why citizens in your 
State and others are worried about what's going on in Mexico. 
Citizens in Mexico are worried about what's going on in Mexico. 
But indeed, we do feel that the proper measures are being taken 
in order to address this issue.
    We saw similar challenges in some ways, although very 
different in other ways, in other countries have been 
addressed. Colombia is one of them, for example, and I don't 
want to draw parallels between the two because there are some 
significant differences as well.
    But the point I'm trying to make is that it takes time to 
make some progress on these sorts of things.
    Finally, let me just add the following insight, that this 
is an issue that has to be dealt with on a regional basis. I 
think that this is what we've tried to do. The spillover effect 
into Central America, into the Caribbean, is something that we 
would not want. So we have to have an integrated, transnational 
approach to this phenomenon. When we address it that way, I 
think that we're going to be successful in getting a grip on 
this.
    Senator Udall. Thank you.
    Let me ask about USAID. I note in your statement you said 
that the hallmark of the Obama administration is to approach 
development from the sustainability standpoint, and that the 
President has said creating the conditions where our assistance 
is no longer needed. My understanding--and you talk a little 
bit about contractors in USAID. Over time, haven't we gone from 
personnel on the ground, people in the countries, giving 
assistance to more and more contractors and putting an emphasis 
on U.S. companies and that kind of thing? And doesn't that hurt 
our ability to really do the capacity-building that I think the 
President's talking about here?
    Mr. Feierstein. Thank you, Senator, very much. I appreciate 
the question. What we're trying to do now at AID----
    Senator Udall. Can you turn the mike on?
    Mr. Feierstein. Thank you, Senator.
    Dr. Shah, the Administrator of USAID, has introduced a set 
of reforms and the heart of those reforms is what we call 
procurement reform. The goal is to create sustainability, to 
create local capacity--that is, strengthening governance, NGOs, 
and the private sector.
    What we're trying to do is move from a model where we tend 
to work with U.S.-based contractors and shift that toward 
working more directly with and channeling resources through 
local entities. That is a process that we've already begun, 
that we intend to accelerate in the coming months and years.
    I can tell you that in my bureau, for example, I'll be 
giving every one of my missions, every one of our offices in 
the hemisphere--we have 17 of them--specific targets they'll 
have to hit in terms of the amount of resources going through 
local entities, as opposed to going through outside 
contractors.
    As President Obama said in his development policy, we're 
trying to create the conditions whereby our assistance is no 
longer necessary. The only way to get there is to strengthen 
that local capacity.
    At the same time, we're also trying to work much more 
closely with the private sector in a lot of these countries, 
not only to leverage resources, but there's also a recognition 
that the most effective and efficient way to create jobs is via 
a vibrant private sector. So we've been able to collaborate and 
partner with companies in a number of arenas.
    Senator Udall. Thank you.
    Thank you all for being here today. I yield back.
    Senator Menendez. Thank you, Senator.
    Let's do a second round. I have a series of questions I 
want to pursue. Let me go back to democracy for a moment.
    I just wanted to make sure I wasn't wrong, so I had my 
staff check, and we have $37 million from State, but that is 
mostly rule of law, not a lot of support for civil society. 
Rule of law is important; don't misunderstand. I think that's 
very important. But we have about $2 million in AID in 
democracy promotion. I look at what is happening in Venezuela. 
I look at what is happening in Nicaragua. I look at what may 
very well happen in Guatemala. I look at some of the other 
places, and I say to myself, how do we, with those--how much 
are we really committed to democracy promotion with that?
    What is our ability to really do democracy promotion, which 
is really to help civil society be in a position to make its 
own claims upon its government in a rightful manner, where 
liberty is one of the essential elements?
    Mr. Feierstein. Thank you, Senator. To be honest, it's not 
clear to me which document you're referring to. But in terms of 
our fiscal year 2012 budget the President has presented, we 
have not yet determined how the money would be allocated within 
each country and toward which sectors.
    We are undergoing a process throughout the entire agency, 
including----
    Senator Menendez. It's more than $2 million?
    Mr. Feierstein. Well, we are undergoing a process 
throughout the agency, including in my bureau, where every 
single mission basically lays out a strategy which they present 
to Washington for our approval. And I can assure you that as 
these strategies come through my bureau and through my office, 
we will make a priority of the strengthening of democracy. I 
can't commit to specific figures now----
    Senator Menendez. I know. I'm just trying to push the point 
that--I'm talking about fiscal year 2011 numbers, so if I start 
there I get a sense of where we're at. So I hope that it will 
be more robust, but I don't think that we can really say that 
we are into democracy promotion, which I think is incredibly 
important.
    Look at what is happening in the Arab world. There is a 
wave. We are either part and with that wave and helping it or 
we are behind it. I don't think that's unique to the Arab 
world.
    So I think that it's important in this regard. So I hope we 
can get you as an advocate.
    In the context of democracy programming, of course, I have 
to raise the question, Mr. Secretary, with you on Cuba. I, of 
course, oppose the President's stated changes, primarily 
because I see them as open-ended and largely sending huge 
amounts of money to the Castro regime at a time in which that 
regime has huge economic consequences, as is evidenced by their 
dismissal of thousands of state workers. And they would never 
have done that but for economic necessity. They would have 
never reduced the third-largest army in the Western Hemisphere 
during the period of the Soviet Union per capita without 
economic necessity.
    The most hated symbol of the Cuban revolution, the American 
dollar, now freely sought and traded, unfortunately retained 
only by state government entities, was now sought because of 
economic necessity.
    So when I see the new regulations and then I see entities 
already up that say: ``Salza and Afro-Cuban dance. Beginning to 
advance dancers welcome. You can choose to focus''--I could do 
this for them without going to Cuba. ``You can choose to focus 
on salza and other popular dances, like mamba, cha-cha-cha.'' 
This is going to create democracy for the people of Cuba?
    Mr. Valenzuela. Senator, the administration----
    Senator Menendez. By the way, the price tag is $3,000 for a 
single person, to go to Cuba to learn salza, cha-cha-cha, and 
mamba.
    Mr. Valenzuela. I think I would prefer to sign up with your 
lessons, Senator, if you don't mind.
    If I might say, look; the President's policy toward Cuba 
and the intent of these changes in the regulations is because 
the President feels and the administration feels that we need 
to move forward much more effectively to engage directly with 
the Cuban people, in order to encourage their own ability to 
determine their own future.
    The particular--I would be extremely surprised if the 
particular instance that you referred to, the dance lessons, 
would be in any way countenanced by this kind of a program.
    Senator Menendez. I hope so, because this is a company that 
got from the 1990s to 2004 a series of licenses to do a lot of 
this. So my point is that to the extent that you could get real 
people engagement, with real itineraries that get to real 
Cubans, not those who are constrained and/or directed by the 
government to engage with citizens--being on a beach in Cuba, 
having a cuba libre, which is an oxymoron, and smoking a cigar 
made by hands that get a fraction of their wages is not my way 
of how we create freedom.
    So I just hope--I have a long list of these and I hope that 
you will look at them as an exercise.
    Mr. Valenzuela. If you would share some of those with us. 
But we're going to work very closely with OFAC, with State 
Department guidance, to make sure that, in fact, when the 
licenses are given that, in fact, they do meet the objectives 
of this program, which is to engage directly with the Cuban 
people and have Americans engage directly with the Cuban 
people. We think that this is a way of giving them the kind of 
space that they need in order to become independent of the 
clutches of the regime.
    Senator Menendez. Mr. Kaplan, poverty and inequality have 
longstanding challenges in the hemisphere and, while we have 
seen growth, the reality is that nearly 40 percent of the 
hemisphere live on less than $2 a day. That in my mind will 
continue to be the nature of a huge challenge, and the 
inequality between those who have and have not, we have seen in 
other parts of the world how that can create instability.
    Now, your agency is known for its work in dealing with 
indigenous needs and responding with real people, identifying 
problems and solutions. How do you identify meritorious 
projects and how have you managed to stay engaged in countries 
like Bolivia and Venezuela while other agencies seem to be 
struggling to do the same?
    Mr. Kaplan. Thank you, Senator. I also would like an 
opportunity to talk about what we do as democracy-building as 
well. I think the point that you made before, that anything 
that's enhancing, that's strengthening civic society, civic 
participation, is also contributing to democracy. We consider 
that the work that we do responding directly to proposals 
presented to us by communities throughout the region, where 
they're designing their own projects and they're figuring out 
how to do it themselves, bringing in resources to complement 
their own resources, and then proceeding to learn how to do it, 
and to fail sometimes, but succeed more times, strengthens 
social capital, strengthens the communities, and is a building 
block for democracy as well.
    So I think all of our programs in fact could be perceived--
could be presented as democracy-building through that lens, 
because we are responding directly to the requests from the 
communities.
    To your questions, let me say we receive about 500 project 
requests every year from across the hemisphere. We can't fund 
all 500. We fund--last year we funded about 75 projects. So we 
have a process of going through those projects, looking at 
them, and then visiting every single one of them, spending time 
with the community, with the group that's working with the 
community directly, that is proposing the project, and then 
proceeding to fund it.
    The projects go forward for 2 or 3 years and there's a 
results-based process for following up on it, and then 
strengthening the capacity of the communities themselves to 
report the results, to comply with audits, so it's capacity-
building again at the community level and with community 
organizations.
    In countries where other agencies have had more tense 
relationships perhaps, I think that we've been successful 
because we've worked, not through the government; we work 
directly with the communities themselves, and the communities 
have appreciated the respectful approach that we have in 
working with them and have welcomed the support. We don't tell 
them what to do. We listen to what they think they should do 
and we work with them to fill the gaps so that they can do it.
    Senator Menendez. Senator Rubio.
    Senator Rubio. Thank you.
    I have here the President's order regarding Cuba from 
January 14. It reads that: ``In continuing efforts to reach out 
to the Cuban people in support of their desire to freely 
determine their country's future,''--which is the stated goal 
of policy toward Cuba; it says that--part of the things it 
expands is purposeful travel for the purpose of enhancing 
contact with the Cuban people and supporting civil society 
through purposeful travel.
    Are you familiar, Mr. Secretary, with the case of a United 
States citizen that traveled to Cuba to distribute 
communications technology on the island, particularly I believe 
to the Jewish community?
    Mr. Valenzuela. Yes, I am, Mr. Rubio.
    Senator Rubio. Would distributing technology to members of 
that community or to the Cuban people fall within the context 
of meaningful purposeful travel? I mean, would it fall within 
the guise of what we're talking about here, to enhance contact 
with the Cuban people?
    Mr. Valenzuela. With respect to Mr. Gross, Mr. Gross was in 
Cuba as a long-term development worker. He was working with 
elements of the Jewish community----
    Senator Rubio. To make contact with the Cuban----
    Mr. Valenzuela [continuing]. To make contact with the Cuban 
people.
    Senator Rubio. Well, he's facing 20 years in prison; is 
that correct?
    Mr. Valenzuela. He might face 20 years in prison, that's 
correct.
    Senator Rubio. So are we going to issue an advisory to 
Americans that are looking at doing purposeful travel to make 
contact with people in Cuba, that they may also face 20 years 
if their contact is too purposeful?
    Mr. Valenzuela. Anybody who travels to Cuba, I imagine 
that, including relatives of Cubans--and the numbers increased 
this year; there are about 300,000 Cuban Americans who traveled 
to Cuba--may take some risks in traveling. But it is our view 
that it's very important for us to be able to have the capacity 
to have both--not only Cuban Americans, but also citizens 
across our country----
    Senator Rubio. Right, but is the State Department prepared 
to begin advising both Cuban Americans and non-Cuban Americans 
traveling to Cuba what you've just said, that there are risks 
to traveling in Cuba?
    Mr. Valenzuela. I think--I don't know whether there's some 
specific guidance on that, but I think that there is an 
awareness that there is a risk and that we--institutions that 
send--I was a professor at Georgetown and when our students 
would go down on a license to Cuba we always were mindful of 
the fact that they needed to be particularly careful.
    Senator Rubio. So specifically, based on your testimony and 
what we've read about this particular case and others, isn't it 
wise--or would it be unwise to advise people looking to travel 
to Cuba, be careful how much contact you make, because if you 
upset the Cuban Government you may be jailed and face 20 years, 
and by the way we may not be able to do much at all?
    In fact, what have we done with the case of the U.S. 
citizen?
    Mr. Valenzuela. I think, at least from the experience that 
I've seen--we have one case right now. I can't think of any 
other case recently of somebody who has been--of an American 
citizen who's been arrested for this kind of activity. There 
are all kinds of people who've been going down to Cuba for a 
long period of time on the people-to-people program, and I can 
think of people, friends of mine from Tampa, for example, who 
go down with their church to Cuba all the time.
    Senator Rubio. But the church visits are largely run 
through the ecumenical council, correct?
    Mr. Valenzuela. Well, look. Let me clarify that these--
again, the travel is going to be purposeful, regulated travel, 
where individuals and organizations and institutions will have 
to get licenses in order to go. So it's under the framework of 
the same sorts of arrangements that we have now.
    Senator Rubio. Now, in terms of--because I think there's 
clearly a cost-benefit analysis that I hope the Department made 
or is making in this decision in the administration, between on 
the one hand the benefits of people-to-people contact, if you 
don't go to jail, and the other of the revenues that it 
provides the Cuban Government, which is a repressive regime.
    In fact, in January alone we know of 260 political arrests. 
In fact, yesterday Sarah Fonseca was brutally beaten in the 
streets of Havana. So it continues to be a repressive regime, 
and it has to pay for its repression. One of the ways it does 
that, perhaps the single largest source of funding to the Cuban 
regime, is remittances and travel by Cuban Americans to the 
island.
    For example--many people may not know this. You have a 
Cuban American; you've got to get a Cuban passport. The funds 
all flow to the Cuban Government. Then you've got to go out and 
get a ticket through a charter company, which is basically--if 
this is an accurate assessment, basically a business partner of 
the Castro government, where a significant percentage of the 
money you pay for your travel to Cuba flows to the Cuban 
Government, correct?
    Mr. Valenzuela. Yes. Our policy, Senator, is to have rules 
and regulations that will maximize the contact between the 
American people and the Cuban people----
    Senator Rubio. I understand, but I'm looking at the revenue 
side. What I'm trying to get at is you have to get a Cuban 
passport, which is money directly to the Cuban Government, a 
source of revenue. Then you've got to get a ticket through a 
charter company, which is the business partner of the Castro 
government--revenue to the Cuban Government. Then when you land 
you get hit with an entry fee, which is direct revenue to the 
Cuban Government. Then they make you change your currency, 
which they take 20 percent of--revenue to the Cuban Government.
    Estimates are that about $4 billion a year flow directly to 
the Cuban Government from remittances and travel by Cuban 
Americans, which is the largest--perhaps the single largest 
source of revenue, to the most repressive government in the 
region.
    Mr. Valenzuela. The remittances to Cuba are a large number, 
too. But let me just simply say this, that there may be some 
ancillary benefits to the Cuban Government, but it is our view 
that to be able to have direct contact with the Cuban people, 
that Americans have direct contact with the Cuban people, will 
provide them with the kind of space that will allow them to 
become much more independent of the regime.
    If we continue to isolate the Cuban people, we simply play 
into the hands of the Cuban regime. I think that we need to in 
that sense expand----
    Senator Rubio. But that goes back to the case of this 
American citizen, whose attempt was to create a technology or 
help people create a technology platform where there could be 
communication with the outside world.
    I guess my last question, and it kind of is redundant--I 
asked this earlier, but this is important, because a lot of 
people from my State are expressing an interest in traveling to 
Cuba, including people that are not Cuban Americans. Is the 
Department of State prepared to assure American citizens that 
if they go to Cuba they'll be able to talk to whoever they 
want, do whatever they want within the civil laws--obviously, 
you can't violate the civil law. But they'll be able to talk to 
anybody they want, including somebody like Sarah Fonseca? 
They'll be able to go there and actually tell people about the 
outside world, talk to dissidents, and that they will not get 
in trouble?
    Are we prepared to assure people if they travel to Cuba 
nothing bad will happen?
    Mr. Valenzuela. Senator, I can't give you that assurance. 
But I will also point to the fact that there's been a lot of 
experience with travel to Cuba, including that of many, many 
Cuban Americans, and we still continue to think that that has a 
beneficial effect in promoting greater freedom in Cuba.
    Senator Rubio. Thank you.
    Senator Menendez. Thank you, Senator Rubio.
    Two last questions. Dr. Mora, technology transfer issues, 
particularly in relation to Brazil. Despite some of the United 
States and Brazil's disagreements on foreign policy, we share a 
long tradition of cooperation in the area of national security, 
to include fighting shoulder to shoulder during the Second 
World War.
    With the beginning of Brazil's new administration under 
President Rosef, it would seem we have the opportunity to reset 
our strategic relationship along the lines of our shared 
history. I am aware of Brazil's recent interest in the United 
States--in the United States offer to sell fighter aircraft, 
the Super Hornet, as part of a foreign military sales 
transaction between our two countries. In fact, the Congress 
approved the sale in 2009, underscoring that commitment.
    I know that there have been concerns raised by the 
Brazilians about our commitment to this sale. To what extend do 
you believe that such a sale promotes cooperation, 
interoperability, and shared security interests with the United 
States?
    Dr. Mora. Absolutely, Senator. As I said in my opening 
statement, this is a critical part of our defense cooperation 
with Brazil. It links us in ways that perhaps is an extension 
or continuation of the defense cooperation agreement that we 
signed last year.
    Now, we understand a final decision has not been made on 
whether--on the fighter competition. The United States I think, 
Senator, has made a robust proposal of the Super Hornet 
technology. In fact, I would argue the technology transfer that 
we are offering of this magnitude would put Brazil on par with 
our close partners. So it is a robust offer. It is significant 
tech transfer, and it is in par, as I say, with many of our 
close partners. And it demonstrates really our commitment, not 
only to the sale of this aircraft, but really a commitment to 
increasing, deepening, our defense-defense relationship.
    Senator Menendez. So to the extent that Brazil is going to 
make a decision, is it fair to deduce from your answer that 
they should have no concern about our commitment to make that 
sale and to share the associated technology?
    Dr. Mora. That is correct, Senator.
    Senator Menendez. All right. Thank you very much.
    Is this something that Secretary Clinton will be raising in 
her upcoming consultation, do you know, with Minister Patriota?
    Mr. Valenzuela. Yes, we always raise these issues.
    Senator Menendez. Then last, Mr. Secretary, on a milder 
note, I want to ask about competitiveness in the hemisphere for 
U.S. companies and interests, which obviously means jobs here 
in the United States. I see the hemisphere opening up trade 
opportunities with regions such as China, Korea, Japan, to 
mention a few, as well as creating regional blocs. U.S. 
companies have had significant growth in the hemisphere and I 
wonder, as I have no doubt that some countries in the region 
want to limit U.S. influence and engagement, are there 
opportunities for the United States that we are missing out, 
for example as China takes a more prominent presence in terms 
of investment in trade in the region?
    What should we be doing?
    Mr. Valenzuela. A couple points. One is, the region itself 
needs to become more competitive. There's no question about it. 
It's still--the growth rate for the last couple of years have 
been based on primarily exports of raw materials. Most 
countries in Latin America, including Chile and Brazil, that 
for example sell 60 percent of all exports to China, which are 
raw materials, realize that their future comes from value-added 
activity, and that requires in turn increasing levels of 
competitiveness, which in turn of course requires greater 
investment in such things as education, technology, and that 
kind of thing.
    In fact, one of the advantages that U.S. firms already have 
in the region is that U.S. firms are much more likely to be 
involved in production chains with firms in Latin America than, 
say, the Chinese. But there's no question that I think that we 
can do a better--and should do a better--job to try to promote 
the ability of American firms to do better in Latin America.
    The Western Hemisphere is today the source of 43 percent of 
all U.S. exports. It's the area of the world where 37 percent 
of all U.S. direct investment is. There are 400 million people 
who are coming into the middle classes in Latin America. So the 
opportunities are great there.
    One area that we need to work on, though, and this is one 
of the things that fits in with what we discussed earlier, is 
that many U.S. firms are reluctant to move into Latin America 
because of issues of judicial insecurity and things like that. 
So strengthening the rules of the game, making them much more 
transparent--other competitors often don't play by those 
rules--is an important part of the dialogue that we have with 
Latin America moving forward.
    Senator Menendez. Let me thank you all for your testimony 
and answers to our questions. We're going to keep the record 
open for 5 days for anyone on the committee who may have 
additional questions. We urge you to answer them in a timely 
fashion. I appreciate the contribution you've made to this 
opening hearing on United States policy toward Latin America. 
Clearly we see our relationship as a partnership, and when the 
committee formally organizes it is my intention to pursue 
hearings on citizen security in the Americas, renewal and 
reform of the Peace Corps, poverty and inequality in Latin 
America, challenges and opportunities for democracy in the 
Western Hemisphere, and additional topics.
    We've laid a broad brush. We've only touched the surface. 
There are many topical issues that are cross-cutting as well as 
country-specific issues that are opportunities for us to delve 
into. So we look forward to working with the chairman and with 
those interested in advancing in our partnership in Latin 
America to realize our joint dream of a safer, more prosperous, 
and democratic Western Hemisphere whose citizens can ultimately 
realize their dreams, hopes, and aspirations where dignity and 
freedom can become a reality.
    With that, this hearing is adjourned.
    [Whereupon, at 3:46 pm., the hearing was adjourned.]
                              ----------                              

              Additional Material Submitted for the Record

   Responses of Assistant Administrator Mark Feierstein to Questions 
                    Submitted by Senator Marco Rubio

    Question. Authoritarian governments the world over--and especially 
in Latin America--are taking aggressive measures to limit our support 
for democratic advocates in close or repressive societies. How is your 
agency responding to these autocratic challenges?

    Answer. Some autocratic governments are trying to make it more 
difficult for USAID and others to work in solidarity with citizens 
struggling to exercise basic human rights, like freedom of expression 
and freedom to assemble. But the United States will not yield in our 
support for those who want to enjoy universally recognized human 
rights. We support NGOs, independent media, and political parties 
committed to democratic principles. We and our implementing partners 
take our lead from the advocates for democracy in a given country. They 
guide us about the most effective way to promote democracy.

    Question. Do you believe that the implementing community has the 
tools to continue to operate under the difficult environment they are 
facing in some of the countries in the region?

    Answer. Yes. Our implementing partners, and USAID, have years of 
experience promoting democracy and human rights in difficult 
environments throughout the world. They are experts in democratic 
development, are familiar with the countries they operate in, speak 
fluent Spanish, and have extensive in-country contacts. As 
organizations that in most cases work globally, they apply lessons 
learned from many other countries. They work closely with and take 
their lead from the democracy advocates they support in order to 
maximize their effectiveness and minimize the risks associated with 
advancing democracy and human rights in politically challenging 
settings.
                                 ______
                                 

         Responses of Dr. Frank Mora to Questions Submitted by
                          Senator Marco Rubio

                   security cooperation with honduras
    Question. As you know, our government has had a long standing and 
productive relationship with Honduras, including vital counternarcotic 
cooperation through the Joint Task Force-Bravo (JTF-Bravo).Have we 
restored--or increased--all security cooperation with Honduras to pre-
June 2009 levels?

    Answer. We have restored the level of security cooperation with 
Honduras to pre-June 2009 levels, with the following caveats.
    Per U.S. Government policy, our reengagement and security 
cooperation with Honduras is to focus on military professionalization, 
countering illicit trafficking (CIT), combating terrorism, and 
capacity-building for humanitarian assistance and disaster relief. For 
example, we have resumed all International Military Education and 
Training (IMET) and Foreign Military Financing (FMF) activities that 
reinforce these principles and/or improve nonlethal technical skills.
    Security assistance for lethal weapons aid was restricted in 2009. 
However, it is increasingly evident that we need to initiate a staged 
approach to bolstering our assistance to units directly involved in CIT 
operations, which are facing formidable opposition, including high-
caliber weapons, from drug trafficking organizations. U.S. Embassy 
Tegucigalpa is currently pursuing authorization to resume lethal 
weapons assistance (initially for select, vetted units directly 
supporting CIT operations), with the goal of subsequently normalizing 
lethal weapons aid to pre-June 2009 levels during 2011. The Defense 
Department supports the Embassy's request to resume lethal weapons aid, 
and the Department of State notified Congress of its desire to provide 
equipment, including weapons, for a unit assigned to the violent La 
Mosquitia region of Honduras.
                    disrupting trafficking networks
    Question. Have we seen an improvement in our success rate in 
disrupting illicit trafficking on the Mosquito Coast since the Lobo 
government has been in power?

    Answer. We have seen an improvement, although it is too early in 
the Lobo administration to make an accurate judgment. It is clear, 
however, that the government of President Porfirio Lobo shares our 
concerns about the difficult situation in La Mosquitia. Using the 
policy and resource framework provided under the Central America 
Regional Security Initiative (CARSI), President Lobo is supportive of, 
and cooperating on, a bilateral, integrated strategy to strengthen the 
operational capabilities of Honduran security forces and law 
enforcement officials, as well as to spur increased development, jobs, 
and growth opportunities in La Mosquitia.
    The strategy for La Mosquitia is a whole-of-government approach and 
is focused on prevention, interdiction, and law enforcement. USAID, for 
example, is working on the prevention side by partnering with Honduran 
agencies (e.g., the Ministries of Health, Education, and Social 
Investment) and the private sector to bolster health, education, and 
economic opportunity. The U.S. Military Group in Honduras has 
established partnerships with U.S. agencies, the Armed Forces of 
Honduras, and other governmental and nongovernmental organizations to 
support interdiction efforts, provide mobility, and build capacity to 
counter illicit trafficking in La Mosquitia.
    Finally, the support of the Lobo administration has been 
instrumental in ensuring the effectiveness of Joint Task Force-Bravo 
(JTF-B) efforts in La Mosquitia. In 2010, for example, JTF-B, in 
coordination with their Honduran counterparts, launched more than a 
dozen helicopter rapid response and deliberate missions in support of 
the Drug Enforcement Agency and has executed four forward deployments 
in La Mosquitia.
                           the balloon effect
    Question. Transnational criminal organizations have responded to 
security successes in Colombia and the sustained efforts in Mexico by 
increasing their activities in Central American countries, thus 
threatening to overwhelm the capacity of these countries' security 
forces to protect their innocent populations. What is the status our 
Nation's efforts to more closely partner with Central American security 
forces? Have you identified any U.S. mandates limiting the potential 
expansion of these cooperative efforts?

    Answer. DOD supports U.S. Government efforts to build the capacity 
of the nations of Central America to fight illicit trafficking. Led by 
the Department of State, the Central America Security Initiative 
(CARSI) is the principal vehicle currently employed to partner with 
Central American countries. DOD support to CARSI includes funding for 
equipment, training, and technical assistance to counter the corrosive 
impact of gangs, transnational criminal organizations, and arms and 
narcotics trafficking.
    DOD also administers the Foreign Military Financing (FMF) and 
funding from the Counternarcotics Central Transfer Account (CN CTA). 
FMF and CN CTA funding for fiscal year 2010 included funding for 
counterterrorism and counternarcotics trafficking training for Belize, 
interdiction boat refurbishment for the Guatemalan Naval Special 
Forces, maritime mobility and communications equipment for El Salvador, 
vehicles and aviation spare parts for Honduras, aviation and maritime 
modernization for Nicaragua, helicopter maintenance and crew safety 
equipment for Costa Rica, and training of border security units for 
Panama.
    Additionally, Joint Interagency Task Force South (JIATF-S), a 
USSOUTHCOM subcommand led by the U.S. Coast Guard, is the keystone of 
regional maritime detection, monitoring, and interdiction efforts for 
the United States and our partner nations. JIATF-S coordinates 
information from multiple sources, including U.S. and partner nation 
law enforcement; and DOD assets such as Maritime Patrol Aircraft (MPA) 
and radar, and U.S. Coast Guard and Navy ship patrols. JIATF-S detects 
and monitors suspect aircraft and maritime vessels, and then provides 
this information to international and interagency partners who have the 
authority to interdict illicit shipments and arrest members of 
transnational criminal organizations (TCOs). In 2010, JIATF-S and our 
international and interagency partners were directly responsible for 
interdicting 142 metric tons of cocaine and denying TCOs $2.8 billion 
in revenue.
    More than one-half of the cocaine destined for the United States 
makes its initial landfall in Honduras and Guatemala; nearly all of 
that crosses the Guatemala-Mexico border. Focusing specifically on this 
vulnerable Mexico-Guatemala-Belize border area, we are engaged in 
planning with our U.S. Northern Command, U.S. Southern Command, U.S. 
interagency, and partner nation colleagues to develop a subregional 
operations capability among these three countries.
    U.S. law currently prohibits provision of FMF and International 
Military Education and Training (IMET) to the Guatemalan Army 
(Consolidated Appropriations Act, 2010, Public Law 111-117). Assistance 
to the Guatemalan Air Force, Navy, and Army Corps of Engineers (for 
disaster preparedness and peacekeeping) is not affected, provided the 
U.S. Secretary of State certifies that they are respecting 
internationally recognized human rights and cooperating with civilian 
judicial investigations and prosecutions.
                                 ______
                                 

    Responses of Assistant Secretary Arturo Valenzuela to Questions
                    Submitted by Senator Marco Rubio

    Question. I am concerned about the persistent delays in the 
delivery of equipment and I want to work with the administration and 
the committee to resolve the situation.

   Has the administration identified the specific obstacles 
        slowing the delivery of badly needed equipment?

    Answer. We have identified the significant hurdles to managing and 
moving Merida Initiative assistance and we are working to address them. 
Although it has taken longer than we would have wanted to move 
assistance under the Merida Initiative, the pace of delivery continues 
to accelerate. Furthermore, key pieces of large equipment have been 
delivered, while more is well along in the procurement process.
    To date, approximately $295 million in equipment has been delivered 
to Mexico. Examples of equipment delivered include 3 UH-60M helicopters 
($76 million), 8 Bell 412 helicopters ($88 million), 318 polygraph 
machines ($2.3 million), various pieces border security and of 
nonintrusive inspection equipment (NIIE) ($25 million), and IT 
equipment ($28 million). We are committed to delivering $460 million in 
equipment this calendar year alone, as part of the Secretary's goal to 
deliver $500 million in total assistance to Mexico this calendar year.
    As mentioned, the greatest obstacles to delivering assistance have 
been identified and are being addressed. For example, staffing in 
Washington and at Embassy Mexico City's Narcotics Affairs Section (NAS) 
needed to grow, and it has--from 21 to 107 full time staff supporting 
the Merida Initiative. To address office space concerns, we opened the 
first ever Bilateral Implementation Office (BIO)--a shared United 
States-Mexico office space outside of the Embassy that allows for daily 
exchanges among the staff of both countries. We expect this to 
facilitate improved planning for and delivery of assistance. In 
addition to hiring staff, working level bilateral relations and trust 
had to be established. Now that staffing is in place, working-level 
relations are strong, and contracting processes are better understood 
by Government of Mexico counterparts, we are seeing an acceleration of 
deliveries to Mexico.
    Certain delays to providing assistance were unforeseen, or simply 
unavoidable. For example, the contract award for NIIE was protested by 
a losing vendor, delaying delivery of $100 million in assistance for 
much of last year. We have overcome the protest delays, which will 
allow us to move most of this NIIE this year. Another delay in 
assistance was caused by advanced aviation modifications required by 
Mexico. For the UH-60Ms, for example, the GOM-requested modifications 
pushed back the delivery date by approximately 10 months. To minimize 
these delays, relevant offices in the State Department, as well as at 
the Department of Defense, are collaborating very closely.
    Other steps taken to streamline Merida assistance include:
    1. We recently brought on an experienced INL Senior Advisor to 
conduct a full review of INCLE-funded Merida Initiative programs, 
identify possible bottlenecks, and engage in efforts to implement 
programmatic changes.
    2. We are working more closely with Mexican counterparts to help 
them provide clear program requirements, which are required for our 
contracting and procurement processes. We are also exploring ways to 
build training in strategic planning into the Merida programs 
themselves.
    3. We are exploring new contracting mechanisms for large training 
programs, that could move large sums of assistance as quickly as needs 
demand.
    4. We are moving funds away from slow-moving projects, toward high 
impact programs that can be executed faster.

    Question. Have you identified the need of legislative fixes to 
address these bottlenecks, especially as we look into increasing 
security cooperation in Central America and the Caribbean?

    Answer. As discussed above, the major bottlenecks to providing 
Merida Initiative assistance have been identified and are being 
addressed. In many cases, they related to having insufficient staff; in 
others, they related to the procurement processes that are part of an 
open competitive process. Our GOM counterparts are now much more 
familiar with our processes and better able to provide the 
specifications for equipment requirements that are needed for contract 
proposals; and we anticipate a rapid acceleration in the pace of 
delivery this year. We are also looking to increase staff in support of 
new Central America and Caribbean programs, including expanding our 
procurement and administrative support, where necessary.

    Question. When can we expect the next round of Cuba policy changes 
by the administration and what will be their nature?

    Answer. The administration is working to advance U.S. national 
interests through policies that support the Cuban people's desire to 
freely determine their future. Over the past 2 years, we have taken a 
number of important steps in support of this objective. On January 14, 
the President directed changes to regulations and policies governing 
purposeful travel, nonfamily remittances, and airports supporting 
licensed charter flights to and from Cuba. These new measures will 
increase people-to-people contact, support for civil society in Cuba, 
and enhance the free flow of information to, from, and among the Cuban 
people. The changes also build upon the President's April 2009 actions 
to help reunite divided Cuban families, facilitate greater 
telecommunications links with the Cuban people, and increase 
humanitarian flows to the island.
    The administration believes that these actions are important steps 
in reaching the widely shared goal of a Cuba that respects the basic 
rights of all its citizens. We want to ensure that the United States is 
doing all we can to support the Cuban people in fulfilling their desire 
to live in freedom. There are no additional policy changes contemplated 
at this time, although policy can be adjusted to advance U.S. national 
interests.

    Question. As you know, the Government of Colombia is considering 
extraditing notorious drug trafficker Walid Makled to Venezuela instead 
of the United States. U.S. prosecutors have identified Mr. Makled as 
``a king among kingpins,'' and his arrest is testimony to our excellent 
security cooperation with Colombia. Considering the control exerted by 
President Chavez over the Venezuelan judiciary, and Mr. Makled's 
implication of senior Venezuelan officials in the illicit drug trade:

   How is the administration working to make sure that this 
        notorious drug kingpin is extradited to the United States 
        instead of Venezuela?
   How confident is the administration of the Venezuelan 
        Government's intentions and capacity to fully investigate and 
        punish all individuals implicated by Mr. Makled?
   Is the administration aware of any connections between Mr. 
        Makled's drug trafficking activities and terrorist activities 
        and organizations?

    Answer. The President designated Makled as a significant narcotics 
trafficker under the Foreign Narcotics Kingpin Designation Act in May 
2009. Colombian authorities arrested him in 2010 on the basis of 
information and a provisional arrest warrant from the United States. We 
have formally requested Makled's extradition to the United States, and 
have separately made clear, publicly and privately, to the highest 
levels of the Colombian Government, our intense interest in Makled's 
extradition to the United States, given the seriousness of the offenses 
he is charged with and the quality and volume of evidence to support 
the charges.
    The decision on extradition rests with the Colombian Government, 
and we respect their processes and internal deliberations. As you may 
know, we have a particularly healthy extradition relationship with 
Colombia; between 2002 and 2010, the Colombian Government has 
extradited 1,149 individuals to the United States.
    While it is impossible to predict how Venezuela will react in this 
case, we have repeatedly expressed our concern about Venezuela's 
counternarcotics efforts generally; since 2005, we have found that 
Venezuela has ``demonstrably failed'' to meet its international 
counternarcotics obligations. We are also concerned about the 
independence and capabilities of the judiciary in Venezuela. As 
reported in the 2009 Human Rights Report, ``judicial independence and 
competence is compromised due to corruption and political influence, 
particularly from the Prosecutor General's Office.''
    Finally, regarding the possibility of connections between Mr. 
Makled's drug trafficking activities and terrorist activities and 
organizations, the Department of State does not have any specific 
information in this regard. However, the fact that the FARC, a 
terrorist organization, is known to be involved in narcotics 
trafficking in the region makes this a legitimate cause for concern and 
one which we are tracking.

    Question. As you know, Venezuela is building deep and troubling 
ties with Iran--the world's most active state sponsor of terrorism. I 
believe these ties are--or will soon begin--to undermine the 
multilateral sanctions against the Iranian regime's pursuit of an 
illicit nuclear weapons program. You have recently said that the 
administration is ``looking into'' whether Venezuela is in violation of 
sanctions against Iran.

   How long would this process last?
   Will the administration's findings be publicly available?

    Answer. We have seen the recent press and other reports, including 
the purported PDVSA documents made public February 23, suggesting that 
Venezuela has sent refined petroleum to Iran. If true and accurate, 
these shipments may render the companies involved eligible for 
sanctions under the Iran Sanctions Act (ISA), as amended by the 
Comprehensive Iran Sanctions, Accountability, and Divestment Act, and 
the administration will comply fully with the law. We are reviewing the 
possibility that Venezuelan companies may have engaged in sanctionable 
activity under ISA, as amended, and will provide Congress with the 
basis of any determination.

    Question. I commend the administration and our Ambassador in Haiti 
for speaking out early and clearly against attempts to manipulate the 
results of the November 2010 Presidential elections.

   What is the current status of recovery and reconstruction 
        efforts in Haiti?

    Answer. In the immediate aftermath of the earthquake, the U.S. 
Government deployed assets from across the government in the largest 
U.S. humanitarian response on record. We provided rescue, food, water, 
shelter, medical treatment, and other essential items and services to 
help Haitians immediately begin rebuilding their lives.
    Since the earthquake, the U.S. Government, working with partners, 
provided food for more than 4 million people--the largest emergency 
urban food distribution in history--and continues to target 1.9 million 
with food assistance. The United States and international partners 
provided basic shelter materials to 1.5 million people before the start 
of the rainy season in May 2010. We supported the immunization of more 
than 1 million Haitians against highly communicable disease including 
polio and diphtheria. With partners, we provided safe drinking water 
for up to 1.3 million people daily following the earthquake.
    The Government of Haiti estimates that 80 percent of schoolchildren 
were able to return to school last year with the help of the United 
States and the international community. The U.S. Government and the 
international community have assessed damage to nearly 400,000 
buildings and homes, enabling hundreds of thousands of people to return 
home. Short-term employment projects have cumulatively employed more 
than 350,000 people. We have supported the rebuilding of the Haitian 
Government, including temporary offices for government officials. We 
continue to strengthen capacity in Haitian institutions.
    We have helped the Government of Haiti respond to the cholera 
outbreak, providing technical expertise and nearly $45 million in 
assistance. This money has funded the establishment of more than 30 
cholera treatment facilities with more than 1,100 beds.
    In the first year alone, the U.S. Government helped clear more than 
1.3 million cubic meters of rubble from areas prioritized by the 
Haitian Government. We have completed more than 15,000 temporary 
shelters sufficient to house more than 75,000 displaced Haitians, and 
about 31 percent of the international total of more than 48,000. We are 
working with partners to promote an industrial park in Haiti's North, 
providing employment for tens of thousands of Haitians and harnessing 
the region's untapped economic potential.
    We are pleased that the elected authorities in Haiti followed the 
recommendations of the Organization of the American States electoral 
mission and look forward to working with Haiti's new authorities after 
the second electoral round.
    Though much remains to be done, the U.S. commitment is long term.

    Question. To what extent has Haiti's precarious political 
situation--with runoff Presidential elections scheduled for March--
affected the pace of recovery and reconstruction?

    Answer. For all intents and purposes, the Haitian Government has 
been without a functioning legislature since May 10, 2010, when the 
terms of all members of the Chamber of Deputies and one-third of the 
Senate expired. President Rene Preval has been making decisions via 
executive order since that time.
    This has had an impact on the Preval administration's ability to 
make long-term decisions and Haiti's ability to enact through 
Parliament critical reform legislation, such as fiscal, judicial, and 
constitutional reforms key to long-term assistance objectives.
    In addition, rioting in Port-au-Prince and other urban areas 
sparked by the announcement of preliminary results of the November 28 
elections hindered local reconstruction and international efforts to 
respond to the cholera crisis. For these reasons, peaceful and timely 
transfer of power, based upon an electoral process that reflects the 
will of the Haitian people, is critical to the consolidation of Haiti's 
democracy and the reconstruction effort.

    Question. What is the administration doing to ensure a fair and 
transparent process during the second round of elections in March?

    Answer. For the second round of elections, the U.S. Government has 
determined to focus its on-the-ground capacity on the following: 
minimizing voter disenfranchisement by supporting activities which 
focus on helping voters to locate their names on voter lists, find 
their polling stations, and retrieve their voter ID cards; helping to 
improve organization and transparency at the polling station level with 
the aim of increasing the credibility of the electoral results; and 
increasing the transparency and credibility of the tabulation process.
    The United States will continue to provide technical and financial 
assistance in other areas we are supporting, but rely on the work of 
our partners to use their on-the-ground capacity to achieve outcomes 
associated with those areas.
    We have committed an additional $1 million for the second round to 
support initiatives such as the provision of technical assistance to 
the Provisional Electoral Council (CEP) call center, training to 
domestic observer groups and capacity building for the Vote Tabulation 
Center (CTV). In addition, we are providing an additional $500,000 to 
support the Organization of American States observation mission, funds 
which will be used to deploy 200 observers nationwide to observe the 
elections and conduct a quick count following the vote count on March 
20.
    In focusing its capacity in these areas, we are looking to see 
measurable improvements in these areas from the first round.

    Question. Since its default on more than $81 billion in sovereign 
debt in 2001, Argentina has repeatedly refused to negotiate in good 
faith with its creditors and ignored rulings by U.S. courts to pay its 
obligations. Despite now having the capacity to pay its debts, 
Argentina still owes U.S. bondholders over $3 billion and the costs of 
Argentina's default and debt restructuring to the United States is 
estimated to be billions more.

   What has the administration done to address this unfair 
        treatment of American creditors and American taxpayers, who 
        have been forced to shoulder the costs of Argentina's 
        irresponsible conduct?

    Answer. Prompt payment of debts is a hallmark of wise economic 
stewardship. I have repeatedly urged the Government of Argentina to 
resolve all of the outstanding claims against it.
    The Government of Argentina has stated publicly its interest in a 
resolution of its outstanding debts, and completed a second debt swap 
with bondholders in 2010.
    Argentina is currently subject to Brooke amendment sanctions under 
the Foreign Operations Appropriations Act and Section 620(q) sanctions 
under the Foreign Assistance Act for its arrears to the U.S. 
Government. These sanctions prevent most U.S. assistance and official 
creditor agency lending to Argentina. The U.S. Government and other 
Paris Club creditors continue to encourage the Government of Argentina 
to normalize relations with all creditors, including the United States. 
We also urge the Government of Argentina to pay all outstanding 
arbitral awards held by U.S. investors.

    Question. The Organization of American States (OAS) has served as 
the primary organization to build hemispheric consensus on regional 
matters. Yet, over the last decade or so, the OAS has performed 
dismally at responding to nearly every challenge to democracy in the 
region. You have spoken about implementing the Inter-American 
Democratic Charter ``more effectively.''

   Can you give us specifics on how the administration plans to 
        do this?

    Answer. Together with other democracies in the hemisphere, we need 
to continue to strive to improve adherence to the principles set forth 
in the Inter-American Democratic Charter and other inter-American 
instruments that deal with democracy and human rights. The Organization 
of American States (OAS) is not a perfect institution, but it is the 
best forum available in the Western Hemisphere for strengthening the 
collective promotion and defense of democracy.
    One of the underlying premises of multilateral diplomacy and the 
OAS is that collective action can be more effective than a single 
country acting alone. That means working with the often widely 
divergent views of the active Member States to seek consensus where 
that is possible.
    The Inter-American Democratic Charter serves as a benchmark for 
assessing the state of democracy in the hemisphere, but the provisions 
of the Democratic Charter do not have the force of a legally binding 
instrument. As we seek full adherence to democratic norms we must 
persuade other governments that protecting democratic values throughout 
the hemisphere is an obligation of OAS membership.
    While challenges exist in the OAS, there are success stories big 
and small, the most recent being elections in Haiti and the quiet role 
it exercised in peacefully resolving the hunger strike by opponents of 
the Chavez government in Venezuela. We also note the success of the 
Inter-American Commission on Human Rights (IACHR). The recent ability 
of opposition elements to petition the court for redress is something 
we support and continue to encourage.
    Countries are changing their practices and even their laws based on 
the findings of the Commission and the work of Special Rapporteurs who 
note publicly when governments fail to support the principles of human 
rights and rule of law that support democracy. These are important 
steps and the work being done is effective and unique to the region. 
The United States, together with other countries has renewed its 
support for the Commission, including its work in monitoring challenges 
to the civil rights of citizens, including press freedom, freedom of 
assembly, and the freedom to run for elected office.
    The United States contributes $3 million annually to enable the OAS 
to reinforce democratic institutions through the OAS Democracy Fund, 
which supports not only the important work of the IACHR, but also 
mobilizes hemispheric efforts in electoral observation missions and 
technical assistance to electoral bodies, conflict resolution, and the 
strengthening of institutions and political parties. Most of this 
funding is used to ensure the credibility of electoral processes in OAS 
Member States, which is fundamental to democratic systems. But the OAS 
can only do this where Member States agree.
    Much more needs to be done to make the OAS an effective institution 
in support of democracy. We must, therefore, continue our work to 
increase OAS action in support of democratic values, but must not 
overlook the real impact it is already having in support of democracy 
and human rights, both in the Western Hemisphere and in Africa, where 
active collaboration with the African Union is beginning. Conscious of 
the challenges to the OAS, we are undertaking a concerted diplomatic 
strategy to engage with individual government to highlight the 
importance of strengthening democratic institutions and bolstering an 
effective OAS response to interruptions in the democratic order.

                                  
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