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86–148 PDF 2014

S. HRG. 113–137

INTERNATIONAL DEVELOPMENT PRIORITIES

IN THE FISCAL YEAR 2014 BUDGET

HEARING

BEFORE THE

COMMITTEE ON FOREIGN RELATIONS 

UNITED STATES SENATE

ONE HUNDRED THIRTEENTH CONGRESS

FIRST SESSION

APRIL 24, 2013

Printed for the use of the Committee on Foreign Relations

(

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FOREI-43947 with DISTILLER

COMMITTEE ON FOREIGN RELATIONS

ROBERT MENENDEZ, New Jersey, Chairman

BARBARA BOXER, California 

BENJAMIN L. CARDIN, Maryland 

ROBERT P. CASEY, JR., Pennsylvania 

JEANNE SHAHEEN, New Hampshire 

CHRISTOPHER A. COONS, Delaware 

RICHARD J. DURBIN, Illinois 

TOM UDALL, New Mexico 

CHRISTOPHER MURPHY, Connecticut 

TIM KAINE, Virginia 

BOB CORKER, Tennessee 

JAMES E. RISCH, Idaho 

MARCO RUBIO, Florida 

RON JOHNSON, Wisconsin 

JEFF FLAKE, Arizona 

JOHN McCAIN, Arizona 

JOHN BARRASSO, Wyoming 

RAND PAUL, Kentucky 

DANIEL E. O’BRIEN, Staff Director

LESTER E. MUNSON III, Republican Staff Director

(II)

FOREI-43947 with DISTILLER

C O N T E N T S 

Page

Corker, Hon. Bob, U.S. Senator from Tennessee, opening statement ................. 3

Menendez, Hon. Robert, U.S. Senator from New Jersey, opening statement .... 1

Prepared statement .......................................................................................... 2

Shah, Hon. Rajiv, Administrator, U.S. Agency for International Development, 

Washington, DC ................................................................................................... 4

Prepared statement .......................................................................................... 7

Responses to questions submitted for the record by the following Senators: 

Robert Menendez ....................................................................................... 41

Bob Corker ................................................................................................. 57

Barbara Boxer ........................................................................................... 69

Ron Johnson .............................................................................................. 72

Christopher A. Coons ................................................................................ 75

Jeff Flake ................................................................................................... 77

(III)

FOREI-43947 with DISTILLER

FOREI-43947 with DISTILLER

(1)

INTERNATIONAL DEVELOPMENT PRIORITIES 

IN THE FISCAL YEAR 2014 BUDGET 

WEDNESDAY, APRIL 24, 2013 

U.S. SENATE, COMMITTEE ON FOREIGN RELATIONS, Washington, DC. 

The committee met, pursuant to notice, at 10:01 a.m., in room 

SD–419, Dirksen Senate Office Building, Hon. Robert Menendez 

(chairman of the committee) presiding. 

Present: Senators Menendez, Cardin, Casey, Coons, Udall, Murphy, Kaine, Corker, and Rubio. 

OPENING STATEMENT OF HON. ROBERT MENENDEZ,

U.S. SENATOR FROM NEW JERSEY 

The CHAIRMAN. Good morning. This hearing of the Senate Foreign Relations Committee will come to order. 

Today we welcome Administrator Shah of the USAID before the 

committee. We look forward to your perspective on making certain 

that U.S. development assistance is carefully calibrated with our 

overall U.S. foreign policy priorities. 

We all know the rapidly evolving landscape in the Middle East 

and Africa and the Asia-Pacific region demands that we continue 

to invest in programs and relationships that advance our strategic 

interests and basic values. Even in this age of fiscal austerity with 

the significant budgetary limitations we face, it is my view that the 

benefits of such investments far outweigh the costs, and it is the 

men and women at USAID who see the results of those investments firsthand every day. 

In 2011, you described ‘‘having seen famine for the first time in 

the world’s largest refugee camp 50 miles from the Somali border 

after the worst drought in 60 years,’’ as you described, ‘‘had thrown 

13.3 million people into crisis and bought more than 750,000 people, mostly women and children, to the brink of starvation.’’

You mentioned meeting mothers who had carried their children 

for weeks across famine-stricken and terrorist-held lands, and a 

young Somali mother named Habida who walked 100 kilometers to 

the nearest camp and had to decide which of her two children she 

would leave behind because she could not carry both, a heartbreaking image that leaves no one unmoved by the suffering. And 

we commend you and all the men and women at AID for working 

very hard every day around the world to end it. 

Today I hope to hear from you about how we can do even more 

with the limited funds we have to maximize the effectiveness of 

development aid and what more we can do to reform programs that 

FOREI-43947 with DISTILLER

2

enhance relationships that will advance U.S. interests and values 

around the world. 

Your creativity and energy has been essential to the reform process, but it is also important, however, that Congress remain a 

working partner with you to establish our international development priorities and ensure that all reforms focus on best practices 

and results as well, that they be well crafted, and will have the 

hoped-for effects. 

I am looking forward to an ongoing conversation with you about 

how to get the best results for USAID for our foreign assistance, 

for donors, for NGOs, and for the taxpayers. 

USAID Forward is an example of a reform that has achieved 

results. It aligns resources with priorities, builds capacity through 

sustainable development, and identifies new innovations to help 

meet the President’s goal of ending poverty in the next two decades. I applaud the progress USAID Forward is making, but more 

needs to be done to institutionalize reforms in cooperation with the 

Congress to make certain they reflect our overall foreign policy, our 

international development priorities, and pay dividends around the 

world in every region. 

And so I look forward to your testimony. I will have the rest of 

my statement entered into the record. 

Having said all of those great, positive things, I do not want you 

to believe that there are not some issues that I have some concerns 

about, as I expressed to you. But certainly the work at AID has 

been exceptional, and we applaud your for it. 

[The prepared statement of Chairman Robert Menendez follows:]

PREPARED STATEMENT OF SENATOR ROBERT MENENDEZ

INTRODUCTION—PRAISE FOR THE WORK OF USAID

Thank you, Administrator Shah, for coming before the committee. We look forward to your perspective on making certain that U.S. development assistance is 

carefully calibrated with our overall U.S. foreign policy priorities. 

We all know that the rapidly evolving landscape in the Middle East, Africa, and 

the Asia-Pacific demands that we continue to invest in programs and relationships 

that advance our strategic interests and basic values. 

Even in this age of fiscal austerity—with the significant budgetary limitations we 

face—it is my view, that the benefits of such investments far outweigh the costs 

. . . and it is the men and women at USAID who see the results of those investments firsthand, every day. 

In 2011, you described ‘‘having seen famine for the first time at the world’s largest 

refugee camp—50 miles from the Somali border—after the worst drought in 60 

years had . . .’’—as you described—‘‘. . . thrown 13.3 million people into crisis and 

brought more than 750,000 people—mostly women and children—to the brink of 

starvation.’’

You mentioned meeting ‘‘mothers who had carried their children for weeks across 

famine-stricken and terrorist-held lands . . .’’ and a young Somali mother named 

Habiba who walked 100 kilometers to the nearest camp and had to decide which 

of her two children she would leave behind because she could not carry both. 

A heartbreaking image that leaves no one unmoved by the suffering—and we 

commend you and all of the men and women at USAID for working hard every 

day—round the world—to end it. 

Today, I hope to hear from you how we can do even more—with the limited funds 

we have—to maximize the effectiveness of development aid and what more we can 

do to reform programs and enhance relationships that will advance U.S. interests 

and values around the world. 

FOREI-43947 with DISTILLER

3

USAID REFORMS

Your creativity and energy has been essential to the reform process . . . but it 

is also important that Congress remain a working partner with you to establish our 

international development priorities and assure that all reforms focus on best practices and results, are well-crafted, and will have the hoped-for effects. 

I look forward to an ongoing conversation with you about how to get the best 

results for USAID, for our foreign assistance, for donors, for NGOs, and for the 

taxpayer. 

USAID Forward is an example of a reform that has gotten results—it aligns 

resources with priorities, builds capacity through sustainable development, and 

identifies new innovations to help meet the President’s goal of ending poverty in the 

next two decades. 

I applaud the progress USAID Forward is making, but more needs to be done to 

institutionalize reforms—in cooperation with Congress—to make certain they reflect 

our overall foreign policy, our international development priorities, and pay dividends around the world—in every region. 

CONCLUSION—WE CAN DO MORE

In my view, even within the confines of our budgetary limitations, we can do more 

in Syria—though we’re already the world’s largest donor nation—to increase the 

level of humanitarian support because—clearly—we have to do more to address the 

world’s most pressing humanitarian crisis—with 4 million displaced and 700,000 

dead. 

We can do more in the Sahel to mitigate the suffering . . . more to alleviate horrific conditions in the long-suffering communities of Somali refugees, displaced Congolese . . . more to combat AIDS, tuberculosis, polio, and malaria . . . more to provide simple tools that can prevent millions of childhood deaths . . . critical to our 

global health strategy . . . more to help others take the reigns of leadership in their 

own countries . . . And—I believe—we can reach 2 to 4 million more hungry people 

if we maximize efficiency in how we provide food aid. 

It seems to me that a common sense, achievable approach to Food Aid Reform is 

to work with U.S. farmers, labor, and experts in the field to improve not only how 

we deliver resources in times of crisis, but how we promote food security and resilience in mitigating emergencies. 

Again, let me commend the men and women at USAID for their service to the 

Nation and for meeting our international development priorities by doing so much 

for so many around the world. 

Thank you, Administrator Shah.

The CHAIRMAN. Let me turn to the ranking member, Senator 

Corker, for his comments. 

OPENING STATEMENT OF HON. BOB CORKER,

U.S. SENATOR FROM TENNESSEE 

Senator CORKER. Thank you, Mr. Chairman, and thanks for having the hearing. Mr. Shah, thank you for being here and for your 

openness in dealing with our office and others. 

In this fiscal environment, obviously looking at how we deliver 

aid is very important, and I know you have done so. 

And I appreciate the time, again, that your staff has spent with 

ours. 

I do applaud you, as the chairman just did, on your movements 

in the food assistance areas. It looks like, if I read correctly, about 

55 percent of our programs are being transferred over to this new 

approach. I would love to see you go to 100 when it is appropriate. 

I know you have political considerations back home relative to that, 

but I do applaud those efforts. 

And I will say that at the same for decades, we have been providing food assistance, and we still are in the mode of, you know, 

day-to-day assistance. And so I do hope either today or over time 

you will cause us to explain why after so many decades of doing 

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4

what we are doing we are still in the situation in so many countries where, you know, we are still having to provide day-to-day 

assistance, and they do not have the capacity themselves to do 

what needs to be done there. 

But again, I think you have taken a very positive step. 

I thank you for that and looking forward to working with you 

toward that end. 

Another area we have talked with you and your staff about is 

just development, which takes place in areas which are not secure. 

I know we had a huge amount of problems in Iraq. We are going 

to have probably even greater problems once people get through 

looking at what we did in Afghanistan. And I know that it is very 

difficult for civilians to be out with development projects in areas 

that are not secure. We understand that. 

My sense is that we are going to be very soon at some point dealing with the same kind of issues in Syria, and I do hope that we 

will continue discussions about the best way to make sure that 

those kinds of development programs are monitored properly when 

it is so difficult for your outstanding staff to be able to get in and 

deal with that. So a big issue. 

I also welcome the fact that your agency talked about most Caribbean and Latin American countries graduating from aid by the 

year 2030. I do hope that that is not just a rhetorical statement, 

but there is a plan to make that happen. And again, I thank you 

for having that type of goal, but we would like to see the backup 

and the vision that is going to cause that to occur. 

And then I will close with this, which is the same thing we 

talked to Secretary Kerry about. Look, a lot of money is going out 

of USAID. I know compared to our overall budget, it is not as much 

as people in our country think. But we need a permanent inspector 

general, OK? I do expect you very soon to send up a highly qualified, capable inspector general. Acting inspectors general do not 

have the clout that permanent inspectors general do, and it is just 

not responsible. So I hope very soon that the status on this will 

change. 

Again, thank you for being here, and thank you for your service 

to our country. 

The CHAIRMAN. With that, Administrator, we welcome your

remarks. 

STATEMENT OF HON. RAJIV SHAH, ADMINISTRATOR, U.S. 

AGENCY FOR INTERNATIONAL DEVELOPMENT, WASHINGTON, DC 

Dr. SHAH. Thank you, Chairman Menendez, and thank you, 

Ranking Member Corker. I am personally very appreciative for the 

opportunity to be here to discuss the President’s fiscal year 2014 

budget. And I am very grateful for the counsel, guidance, and oversight that you have offered and continue to offer on a personal 

basis, and from your team and your staff. So I appreciate this 

unique opportunity. 

I would ask that my formal remarks are entered for the record, 

and will just briefly summarize a few topline points. 

This is an important moment for development, and I was eager 

to hear in both of your statements that basic reflection as we draw 

FOREI-43947 with DISTILLER

5

down from a decade of war. We are rethinking how we project 

power and American values around the world in a manner that 

keeps us safe and improves our own domestic and economic opportunities. 

President Obama and Secretary Kerry, like Secretary Clinton 

before him, have talked about elevating development as part of our 

national security and foreign policy strategy, including with a real 

focus on America’s economic competitiveness over time. 

I was grateful, Senator Menendez, for your mention of the reference and the visit to the Somalia refugee camp. That was an eyeopening experience and one that I will never forget. I was a few 

months ago back in Somalia, and this time instead of seeing the 

devastating human consequences of a famine with children literally 

dying in front of our eyes, we saw a much more hopeful picture. 

We saw American investments in a new government and a new 

flourishing civil society start to yield some results as street lights 

came on in Mogadishu for the first time in several decades and citizens celebrated peacefully for the first time that most could 

remember. 

We noted that we were helping more than 400 local communities 

improve their agriculture and helping people leave the displacement camps that were formed around Mogadishu during the famine, to go back to their communities, start growing their own food, 

and start rebuilding their own lives, because the purpose of our 

partnership should not be to perpetuate dependence, but to build 

self-sufficiency and human dignity. 

We are helping in more than 40 small-scale fishing ports to 

replace piracy with transparent and legal small-scale fishing activity. And those are the types of partnerships that will help establish 

stability, security, and peace in that critical region. 

Those examples are emblematic of what we believe is an approach that focuses on ensuring that development builds self-sufficiency and dignity and replaces dependency. It is an approach that 

we believe is delivering real results. Our Feed the Future Program 

and partnership involved us making tough decisions. We cut agricultural programs in 23 countries in order to focus in 19 that were 

willing to make reforms and expand their own investment. 

We are now beginning to see the results. In those 19 countries, 

poverty has been reduced by 5.6 percent on an annual basis. Seven 

million farm households directly benefit from American investments in their agriculture, science, and technology. More than $31⁄2

billion have been committed to invest in a subset of these countries 

so that private and commercial interests can help transform and 

end hunger in those settings. And all of this has been coupled with 

real policy reforms that require our country partners to invest more 

resources to fight corruption and to establish policies that are 

friendly to business investment. 

We are seeing similar results in our efforts to end preventable 

child death. Again, we made tough decisions to cut 22 country programs in global health in order to focus in those countries that 

have the greatest burden of disease. This effort is seeing a real 

reduction in the rate of child death as it is reduced from 7.6 million 

kids under the age of 5 to 6.9 million today. We believe we can end 

FOREI-43947 with DISTILLER

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preventable child deaths within two decades, and are committed to 

that model. 

We are also seeing that effort take hold in our citizen security 

efforts in our own hemisphere. In El Salvador, we recently 

launched the largest public-private partnership in the region where 

we made a $20 million investment, but that unlocked more than 

$22 million of investment from local foundations and local businesses because it is those local institutions that believe that addressing citizen security is the key to unlocking greater business 

investment and growth in that critical part of the world. 

These new efforts have been possible because of your support; 

your support for USAID Forward and a new model of partnering 

with local partners, a new model of innovating with scientists and 

technologists who can help bring the costs down and help us aspire 

to achieve bigger outcomes, and your partnership in measuring and 

reporting on results. 

I am pleased to note that today the United States has joined the 

International Aid Transparency Initiative and our aid data is 

increasingly transparent and accessible to everyone. You can go to 

the App store and download an application that has much of our 

evaluation data, easily accessible and unadulterated, so we can all 

learn together from an evidence base that defines what works and 

what does not as we make these critical investments abroad. 

As part of this transition, this year’s budget includes an important proposal to reform the way we provide food assistance around 

the world. The President’s proposal is designed to help us reach 4 

million additional hungry children with basic nutrition interventions, and to target those feeding programs to those kids when they 

need it most and when it can have the most impact on improving 

their ability to grow and thrive. 

The approach will expand the flexibility we need to meet needs 

in a changing world, a world where increasingly humanitarian 

catastrophes happen alongside security challenges, whether it is in 

opposition controlled parts of Syria or al-Shabaab controlled parts 

of Somalia. And it is an approach that maintains and, in fact, 

renews a partnership, an important partnership, with American 

agriculture that will allow us to refocus on creating new high nutrition and modern agricultural products and foods that can be targeted to kids in a way that saves their lives. We thank you for your 

reflections on this proposal and your consideration. 

Finally, I would like to thank our staff. Around the world we now 

have 9,600 staff, many of which carry different types of acronyms 

or hiring authorities, but all of whom bring passion and a commitment to this incredible mission; a mission of representing our country around the world and working to end extreme poverty and to 

protect those who are most vulnerable. 

In this past year, cognizant of the risks that many of our staff 

do take, as Senator Corker highlighted, we lost one of our own, 

Ragaei Abdelfattah, in Afghanistan. And one of our toughest 

moments as an agency was getting through that very trying period, 

and we reflect on and thank Ragaei and his family for their service. 

At a time when cuts across our Government are significant and 

having real impacts, the fiscal year 2014 request reflects a 6-

percent decrease compared to the fiscal year 2012 enacted budget. 

FOREI-43947 with DISTILLER

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We are making very tough tradeoffs around the world in order to 

focus on delivering results and are cognizant of the economic and 

budget times that we live in. 

But we are also focused on doing things differently, on demanding more of others, and on partnering better to achieve better 

results. And it is our belief that with this new approach taking 

hold, we can still have big aspirations, and that is why the President highlighted our capacity to help end extreme poverty in two 

decades. It is why we believe by projecting American values effectively around the world we can support transitions in the Middle 

East, help bring our troops home from Afghanistan, help improve 

trade and economic ties in Latin America, and help expand on our 

engagements in Africa, including connecting American businesses 

to real growth opportunities there, while simultaneously working to 

do things like ending preventable child deaths. 

I thank you and look forward to your questions, comments, and 

thoughts as we go forward. Thank you. 

[The prepared statement of Dr. Shah follows:]

PREPARED STATEMENT OF DR. RAJIV SHAH

Thank you, Chairman Menendez, Ranking Member Corker, and members of

the committee. I am pleased to join you to discuss the President’s fiscal year 2014 

budget request for USAID. 

In his State of the Union Address, President Obama called upon our Nation to 

join with the world in ending extreme poverty in the next two decades. Today, we 

have new tools that enable us to achieve a goal that was simply unimaginable in 

the past: the eradication of extreme poverty and its most devastating corollaries, 

including widespread hunger and preventable child and maternal deaths. 

The President’s fiscal year 2014 budget request responds to this call and the most 

critical development challenges of our time. It supports important global partnerships, including the New Alliance for Food Security and Nutrition and the Child 

Survival Call to Action, by increasing and focusing investments in food security and 

maternal and child health. It builds resilience in areas besieged by recurrent crisis 

and natural disaster, with a focus on the Horn of Africa and Sahel regions. And it 

advances a comprehensive food aid reform package that will enable us to feed 2 to 

4 million additional people each year. 

The President’s request enables USAID to strategically advance our national security priorities by implementing critical economic growth, democracy, human rights, 

and governance programs in the Middle East and North Africa, as well as in support of the administration’s Asia-Pacific Rebalance. It also focuses activities in 

Afghanistan, Pakistan, and Iraq at an appropriate level to sustain the gains we 

have made in those countries over the last decade. And it strengthens economic 

prosperity, both at home and abroad. 

The President’s request also makes important investments in Latin America by 

expanding economic opportunity and social equity and strengthening citizen security 

by promoting effective judicial systems and investing in communities and at-risk 

youth to address the root causes of crime. Some of USAID’s most exciting examples 

of fostering innovation are in this region, where, through groundbreaking publicprivate partnerships, we have broadened local investment for development. 

I want to highlight how the investments we make in foreign assistance, which 

represents just 1 percent of the Federal budget, help our country respond to the 

global challenges we face and how we have modernized our Agency to deliver results 

that shape a safer and more prosperous future. 

A NEW MODEL FOR DEVELOPMENT: PARTNERSHIPS, INNOVATION, AND RESULTS

The FY 2014 request for USAID managed, or partially managed, accounts is $20.4 

billion, 6 percent below the total enacted funding for FY 2012. In this tough budget 

environment, USAID is committed to maximizing the value of every dollar. We have 

made tough choices so that we are working where we will have greatest impact, and 

shifting personnel and funding resources toward programs that will achieve the 

most meaningful results. Since 2010, regional program areas have been reduced by 

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29 percent, Feed the Future agriculture programs have been phased out of 22 countries, and USAID global health program areas have been phased out of 23 countries. 

The President’s FY 2014 request continues to build on gains we have made over the 

past year to work smarter and more effectively through a suite of ambitious reforms 

called USAID Forward. Through USAID Forward, the Agency has fostered new 

partnerships, placing a greater emphasis on innovation, and a relentless focus on 

results. These reforms have formed the foundation of a new model for development 

that continues to define the way we work around the world. 

The FY 2014 budget provides funding to mobilize a new generation of innovators 

and scientists. Through our Development Innovations Ventures, we invite problemsolvers everywhere to contribute a cost-effective and cutting-edge idea that could 

scale to reach millions. 

It provides funding for Grand Challenges for Development, capitalizing on the 

success of previous challenges to accelerate reductions in maternal and child mortality, promote childhood literacy, power agriculture through clean energy, and raise 

the voices of all citizens through technology. We have received more than 500 applications per challenge, with almost 50 percent of innovations coming from developing 

and emerging economies. For example, through ‘‘All Children Reading: A Grand 

Challenge for Development,’’ nearly three dozen organizations—half of them local—

are pioneering a range of novel approaches to education, from helping children in 

India learn to read with same language subtitling on movies and TV to bringing 

fully stocked e-readers to rural Ghana. 

The request accelerates advances of USAID’s Higher Education Solutions Network, a constellation of seven development innovation labs on university campuses 

that work with a global network of partners to provide solutions for key development challenges, leveraging tens of millions of dollars of university and privatesector financing. 

The 2014 request also allows us to work more effectively with a range of partners, 

from faith-based organizations to private sector companies. A new focus on 

leveraging private sector resources has enabled us to dramatically expand our 

Development Credit Authority—unlocking a record $524 million in FY 2012 in commercial capital to empower entrepreneurs around the world. Last year alone, we increased our contributions to public-private partnerships by almost 40 percent, 

leveraging an additional $383 million. 

This funding also allows us to rigorously measure and evaluate our work so we 

know which of our development efforts are effective and which we need to scale back 

or modify. Since the launch of our evaluation policy, 186 high-quality evaluations 

have been completed and are available on our Web site or through a mobile ‘‘app’’ 

that is easily downloaded. Half of these evaluations have led to mid-course corrections and one-third has led to budget changes. 

A new emphasis on supporting local solutions has enabled us to shift $745 million 

in funding to local institutions, firms, and organizations in the last year alone—

helping replace aid with self-sufficiency. When we partner with developing country 

institutions, we use sophisticated tools to assess their financial management capacity and safeguard U.S. resources. 

As part of our new model, we’re insisting our partners make policy reforms and 

fight corruption in order to meet the conditions of our assistance. Through new models of partnership that demand mutual accountability—including the New Alliance 

for Food Security and Nutrition and the Tokyo Mutual Accountability Framework 

for Afghanistan—we are creating incentives for governments to strengthen their 

own institutions. 

Across our work, we are moving from a traditional approach of top-down development to a new model that engages talent and innovation everywhere to achieve 

extraordinary goals. In education, a core development objective, we are harnessing 

this new approach to help close the gaps in access and quality of education. We 

know that globally 171 million people could be lifted out of poverty if all students 

in low-income countries gained basic literacy. Our strategy for basic education is 

focused on improving reading skills for 100 million children in primary grades by 

2015 and increasing equitable access to education in crisis and conflict environments for 15 million learners by 2015. 

FOOD AID REFORM

At its foundation, our new model of development shares the bedrock principles of 

effectiveness and efficiency that serve as the clarion call for government today. 

There is perhaps no better example of this fundamental imperative than the food 

aid reform package proposed in this year’s budget request, which would enable us 

to feed 2 to 4 million more hungry men, women and children every year with the 

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same resources, while maintaining the valuable contribution of American agriculture to this mission. 

Through P.L. 480 Title II, or Food for Peace, America’s agricultural bounty and 

generosity have fed well over a billion people in more than 150 countries since 1954. 

But while the world has changed significantly since Title II was created, our hallmark food assistance program has not. The current program limits our ability to use 

the appropriate tools for each humanitarian situation—tools we know will help people faster and at a lesser cost. 

Buying food locally can speed the arrival of aid by as many as 14 weeks—making 

up precious time when every day can mean the difference between life and death. 

It can also cost much less—as much as 50 percent less for cereals alone. In complex 

environments such as Syria and Somalia, which are increasingly the kind of crises 

where we need to provide assistance, these more flexible tools are invaluable. 

The more agile, flexible, and modern approach laid out in the President’s budget 

request pairs the continued purchase of the best of American agriculture with greater flexibility around interventions such as local procurement, cash transfers, and 

electronic vouchers. The President’s proposal maintains the majority of our emergency food aid funds—55 percent in 2014—for the purchase and transport of American commodities. That means we’re going to keep working with soy, wheat, pulse, 

and rice farmers and processors across America who help feed hungry children from 

Bangladesh to the Sahel—often in the form of specialized high nutrition products. 

At a time of urgent human need and budget constraints, we can save more lives 

without asking for more money. 

The proposal also reaffirms our commitment to development partners who receive 

Title II funding, enabling them to provide the same types of development programs 

at a lower cost. These programs strengthen our ability to reduce chronic poverty, 

build resilience, and help prevent future crises. 

FEED THE FUTURE

Ending hunger and creating a food secure world are vital components of the fight 

to end extreme poverty. Launched in 2009 by President Obama, Feed the Future 

is unlocking agricultural growth, helping transform developing economies and ending the cycle of food crises and emergency food aid. Although the initiative is still 

in its early days, we are beginning to see significant results. 

In Rwanda, we have reached 1.6 million children under 5 with nutrition programs 

that reduced anemia, supported community gardens, and treated acute malnutrition. In Bangladesh, we helped more than 400,000 rice farmers increase yields by 

15 percent through the more efficient use of fertilizer, which led to the first-ever 

rice surplus in the country’s poorest state. In FY 2012, we helped more than 7 million farmers across the world apply these kinds of new technologies and practices, 

four times the number we reached the previous year. 

The FY 2014 request provides $269 million for the President’s G8 commitment to 

the New Alliance for Food Security and Nutrition, which aims to lift 50 million people in sub-Saharan Africa out of poverty in the next decade. Since its inception at 

last year’s G8 summit, we have helped leverage more than $3.75 billion in commitments from more than 70 global and local companies. In Tanzania, Yara International is constructing a fertilizer terminal at the nation’s largest port, and, in 

Ethiopia, DuPont is expanding seed distribution to reach 35,000 smallholder maize 

farmers and increase productivity by 50 percent. 

At the same time, participating African governments have committed to serious 

market-oriented reforms. Tanzania has removed its export ban on staple commodities, Mozambique eliminated permit requirements for interdistrict trade, and Ethiopia no longer imposes export quotas on commercial farm outputs and processed 

goods. 

GLOBAL HEALTH

Thanks to strong bipartisan support we are on track to provide life-saving health 

assistance to more people than ever before. The FY 2014 Global Health request supports our goals of creating an AIDS-free generation, ending preventable child and 

maternal death, and protecting communities from infectious diseases. 

Across our global health portfolio, we are aligning our budgets to the areas of 

greatest need. Now, 90 percent of USAID bilateral maternal and child health funding is in the 24 USAID priority countries that account for three-quarters of maternal and child deaths. 

The request supports the continuation and scale-up of high-impact HIV/AIDS prevention, care, and treatment tools in pursuit of an AIDS-free generation. The 

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request also provides $1.65 billion under PEPFAR for the U.S. contribution to the 

Global Fund to Fight AIDS, Tuberculosis, and Malaria. 

In June, USAID cohosted a Call to Action to accelerate progress and end preventable child death. A powerful example of how our new model of development can 

rally diverse partners behind ambitious but achievable goals, the Call to Action has 

encouraged more than 170 countries, 200 civil society organizations, and 220 faithbased organizations to sign a pledge to help reduce child mortality. This global effort 

builds on an 8-percent reduction we have seen from 2008 to 2011 in child mortality 

in countries where the U.S. Government provides assistance. 

We will continue to fund critical efforts in voluntary family planning, immunizations, nutrition, malaria, tuberculosis, and neglected tropical diseases—cost-effective 

interventions that save lives, while preventing the spread of disease. 

SUPPORTING STRATEGIC PRIORITIES AND STRENGTHENING NATIONAL SECURITY

Across the world, we are strengthening democracy, human rights, and governance, with a special emphasis on marginalized populations, including women and 

youth. Support for democratic and economic transitions enables the rise of capable 

new players who can help solve regional challenges and advance U.S. national security. 

Since January 2011, the State Department and USAID have allocated more than $1.8 billion to support democratic transitions in the Middle East and North Africa 

and respond to emerging crisis needs in the region. The President’s Request of $580 

million for the Middle East and North Africa Incentive Fund provides support to 

citizen demands for change, improves our ability to respond adroitly to new challenges and opportunities, and begins to address the imbalance between our security 

and economic assistance in the region. 

The budget request supports our humanitarian assistance work around the globe 

in places where the need is greatest. This is particularly true in Syria, where at 

least 4 million people are in need of humanitarian assistance and 2 million are displaced. To date, State and USAID have provided nearly $385 million in humanitarian relief to the Syrian people. 

In Iraq, Afghanistan and Pakistan, USAID continues to work closely with interagency partners including the State and Defense Departments, to move toward longterm stability, promote economic growth, and support democratic reforms, including 

the rights of women. Despite the challenges, we have seen a number of positive 

gains. For example, over the past decade in Afghanistan, we have increased access 

to education, resulting in dramatic increases in primary school enrollment from 

900,000 boys in 2002 to 8 million students in 2012, 37 percent of whom are girls. 

In Iraq, USAID-funded legal clinics have supported over 1,700 legal cases on behalf 

of vulnerable individuals, including internally displaced persons and ethnic and religious minorities. 

The President’s budget request supports the administration’s Asia-Pacific Rebalance by increasing funding for the region to address critical gaps in core programs 

to renew U.S. leadership, deepen economic ties, promote democratic and universal 

values, and strengthen diplomatic engagement. In addition, we are seizing new opportunities for partnership in Asia, including in Burma, a nation undertaking political and economic reform. 

GLOBAL CLIMATE CHANGE AND BUILDING RESILIENCE

As a result of global climate change, natural disasters are becoming more frequent 

and more severe. With a new emphasis on helping vulnerable communities build 

resilience to disasters, the Global Climate Change Presidential Initiative invests in 

developing countries to accelerate transitions to climate-resilient, low-emission economic growth, while incentivizing private sector investment to scale impact and sustain progress. For example, we are partnering with the Consumer Goods Forum—

which represents about 400 companies and $3 trillion in market value—to reduce 

tropical deforestation from key commodities, like palm oil and timber. 

Drawing on lessons learned during last year’s food crisis in the Horn of Africa—

as well as decades of experience responding to disasters—USAID is pioneering a 

fundamental new approach to help communities strengthen their resilience in the 

face of crises. In Ethiopia, for instance, we’re working with international firms like 

Swiss Re and local businesses to develop index-based livestock insurance—a new 

product that uses satellite data to protect pastoralists from drought-related losses. 

CONCLUSION

When people around the globe cannot feed their families, when young adults find 

themselves without education or a source of income, and when parents watch their 

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children die of preventable illnesses, the world is inherently less secure. The FY 

2014 budget request will continue our work to combat these causes of instability 

and end extreme poverty. 

These investments aren’t just from the American people; they’re for the American 

people. By promoting sustainable growth in the developing world, we spur new markets abroad and energize our economy here at home. By driving innovations in agriculture, education, and global health, we strengthen global stability and advance 

our national security. And by delivering aid in the wake of natural disasters and 

humanitarian crises, we express the generosity and goodwill that unite us as a 

people.

The CHAIRMAN. Thank you, Administrator, and your full statement will be entered into the record. 

Let me start off. You know, I took my first trip as chairman to 

Afghanistan and Pakistan because I believe it is still obviously a 

vital national security interest to the United States. And the region 

is in the midst of economic security and political transition. And 

during our trip there, I spent time with our aid missions and conducted a couple of field visits to visit some of our programs. And 

I am incredibly impressed with the dedication and drive of our 

teams there. 

But I also have concerns as to how we conduct oversight in the 

field given the security conditions, so my questions are in this 

regard. Are we right sizing our aid presence in both countries to 

reflect our diminishing footprint or our security concerns and 

implementation challenges? And specifically, what steps are taken 

to ensure that our aid is necessary, achievable, and sustainable, 

which are steps that this committee called for in its June 2011 

oversight report? 

Dr. SHAH. Thank you, Senator, and I want to thank you personally for your leadership on this issue and for taking the time to 

meet with our staff when you were there. That meant a lot to them 

and was very encouraging for them to personally get the chance to 

meet with you. 

As you note, the gains in Afghanistan that we believe have 

resulted from our collective international investments have been 

real and significant, and now create the opportunity for some 

degree of stability as our troops start to come home. We have seen 

9 percent annualized growth rates year on year for the past decade. 

The largest increases in human longevity and reductions in child 

and maternal mortality anywhere in the world have been experienced in Afghanistan in part due to our investments in health. 

We have 8 million kids in school, nearly 35 percent of whom are 

girls compared to no girls in school under the previous Taliban 

regime. And energy access has more than tripled as a result of collective investments we have made, and we have put down more 

than 1,900 kilometers of new road in partnership with the people 

and businesses and governments of Afghanistan. 

But it has taken a lot to make sure that this program has 

become more accountable and more transparent in the last few 

years. When we took office, we launched an effort called the A–3 

Initiative, Accountable Assistance for Afghanistan, which included 

a full partner vetting of all of our partners and subcontractors. It 

included getting eyes and third-party monitors on most major programs and investments. It included a local cost auditing system 

that allowed us to understand where resources were going and how 

performance was improving. 

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We believe that some of those efforts will be at risk as we see 

a transition that will limit, to some degree, our capacity to be physically present and out in all parts of Afghanistan, seeing and 

engaging on these projects and programs. I spoke to General 

Dunford earlier this week by videoconference, and it is part of our 

coordinated civilian military plan to make sure that we have a 

capacity to continue to oversee these programs effectively. But we 

know we will be doing it with some degree of reduced staffing, with 

more local staff, with more support from the Afghan Public Protection Force, and with other forms of ensuring accountability for our 

resources. 

So I thank you for asking that question. It is something that we 

are working on aggressively right now. 

The CHAIRMAN. So do you believe that the programs moving forward in that region will continue to be able to follow those three 

criteria that the committee set, particularly sustainability? 

Dr. SHAH. Absolutely, and, in fact, those criteria become more 

important, not less important, going forward. If programs cannot 

sustain themselves anymore, they are really not worth doing 

because we know that we are not going to be there endlessly. 

We did, in fact, pull together the international community in 

Tokyo last year, and we got the international community to commit 

$16 billion of development investment for Afghanistan over the 

next 4 to 5 years. As part of that, we introduced a mutual accountability framework with the Government of Afghanistan, and so 

they have to show real progress on corruption, on asset recoveries 

from Kabul Bank, on pursuing with clarity and transparency fair 

and free elections in order for those resources to take hold and for 

those pledges to be met. 

We are doing that not unilaterally, but in concert with 20 other 

international partners. And we believe that sort of approach—real 

mutual accountability on behalf of ourselves and our Afghan partners—will be critical if we are going to effectively over time replace 

aid and assistance with business and investment. 

The CHAIRMAN. Which brings me to the question of capability—

USAID went through, in my view, a 20-year decline in personnel 

and dispersion of development responsibilities to other entities, 

such as the Millennium Challenge Corporation, the State Department AID’s coordinator, and in 2006, the loss of budgeting and policy capabilities. How would you assess your agency’s progress in restoring its capacities under USAID Forward and the development 

and leadership initiative? And, you know, describe for me your 

goals—the end goals of these efforts as you move forward, because 

one of the things I want to understand I have been an advocate of 

is making sure that USAID has the wherewithal, and the ability, 

and the personnel to carry out its mission. And I think the dispersal that we have seen, particularly including Defense Department engagement in what, in essence, was development activities, 

undermine the capacity. 

Dr. SHAH. Thank you, Senator, and thank you for your personal 

advocacy on behalf of those objectives. 

Our end goal very clearly is to be the world’s premiere development enterprise, and I believe we are well on the way to accomFOREI-43947 with DISTILLER

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plishing that. Our focus on public-private partnerships has been 

unique and extraordinarily effective in many parts of the world. 

We have been able to rebuild our budget authority, our policy 

capacity. We have hired 1,100 new staff because of the Development Leadership Initiative on which you commented. And we believe these investments, deployed accurately, particularly on contract oversight and accountability, are saving taxpayer dollars on 

the program side of our budget. 

So we believe these are important investments that need to continue to be made. They are put at real risk and threatened by current sequestration realities. The fiscal year 2014 budget includes 

an investment in our operating expenses that will allow us to continue on this path of rebuilding this agency. But we have had real 

success in the last 3 years with strong support from President 

Obama and Secretary Clinton, and now Secretary Kerry. 

The CHAIRMAN. All right. I will come back to some of my concerns in the next round. 

Senator. 

Senator CORKER. Thank you, Mr. Chairman. Again, Mr. Shah, 

thank you for being here and for your work in bringing some of the 

private sector, Gates Foundation, thinking to USAID. It is much 

appreciated. 

Will you go ahead and tell me what you plan to do on the inspector general? I would imagine in the next 2 weeks you plan to send 

up a permanent nominee. 

Dr. SHAH. Well, we have had a very good working relationship 

with our acting inspector general, and the White House, of course, 

has responsibility for putting forward a Presidential nomination. 

We know that that process is, and has been, well under way, and 

do expect very soon for the White House to make that nomination. 

Senator CORKER. I noticed you and the administration have

decided that 55 percent of our food aid is going to be spent here 

in the United States. How did you decide on that number? 

Dr. SHAH. Well, first, thank you for your leadership and comments on food aid specifically. 

As we look around the world, we note that over the last few 

years, the program has had essentially about 81 percent of the program tied to the purchase and distribution on U.S.-flag vessels of 

American commodities, which gives us a little bit of flexibility, 

about 19 percent, every year. That flexibility has been deployed in 

different places. 

This year, with the challenges of providing humanitarian assistance in and around Syria, that flexibility is being absorbed almost 

completely in that setting and in that region. As a result, there are 

a number of other countries—the Democratic Republic of Congo, 

Somalia, and Pakistan—where we actually have to take children 

off of nutrition support, often in post-famine or post-hunger situations, because we are reverting from a more efficient locally procured program to the more traditional U.S.-based program. And 

there are 155,000 kids in Somalia that this year will be subject to 

that. 

So we basically looked at how do we avoid that outcome, how can 

we build maximum flexibility and efficiency? And we want to also 

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ship that prioritizes high nutrition food products that America 

ought to have the scientific and technical lead in producing, a partnership that is flexible and efficient in how we get those products 

to people quickly in times of great need, and a partnership that 

continues to benefit from the engagement from the agricultural 

communities in this country that sustain this effort over time. 

So that is how we ended up with the proposal we have. We 

believe the proposal will allow in the first year to reach 4 million 

additional children. 

Senator CORKER. And so your goal, though, still over time is selfsufficiency. Is that correct? 

Dr. SHAH. Absolutely. The goal—as the President has said over 

and over since 2009 when he first launched Feed the Future, our 

goal is to move people from food aid to self-sufficiency so they can 

be trading and commercial partners with us. As we have seen, our 

largest recipient of American food aid in the 1960s and 1970s was 

South Korea, and today they are obviously a major trading partner. 

Senator CORKER. Do you plan on working with this committee to 

get the reforms you are putting in place into code, or are you just 

going to do the easy route of going and talking with an appropriator and getting it done in that manner? 

Dr. SHAH. Absolutely, sir; we would be eager to work with this 

committee to have as much structure and longevity and commitment to this renewed vision of an efficient, effective, and more 

high-impact results-oriented program. 

Senator CORKER. Really the only way to lock in the reforms is 

to get us to get it into code, right? And you know that it is going 

to be there when you go off to do other things, some other place? 

Dr. SHAH. Yes, sir. 

Senator CORKER. Let me talk to you a little bit about Syria. I 

wrote an op-ed this morning that was about our role in Syria. And 

obviously there are multiple things that need to be done there to 

change the balance of power. What do you think, briefly, USAID 

can do to change the balance right now to favor the more moderate 

secular opposition groups that are inside Syria? 

Dr. SHAH. Well, thank you, Senator, for your leadership on Syria 

and articulating that as the central challenge. I think Secretary 

Kerry also has acknowledged that that is our goal. 

And I would point out that with 41⁄2 million internally displaced 

and 11⁄2 million refugees already, that we have a major humanitarian and political crisis on our hands. 

In terms of your specific question of how can we tip the balance 

toward what we think of more moderate and more responsible 

within the framework of the opposition, Secretary Kerry announced 

this past weekend a doubling of our aid and assistance to the Syrian Opposition Council. As part of that commitment to them, which 

is now up to $250 million, we will request from them, and they 

have already made public assurances of their commitments to protect human rights, to protect the rights of women in both transitional and security challenged environments and over the long 

term, and their openness to working with the international community on a range of issues like that. 

We believe this effort, which we support through a number of our 

partners and through the Office of Transition Initiatives, will be a 

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critical part of helping the Syrian Opposition Council provide services in opposition controlled areas. A large part of this effort is 

already taking place. There is tight coordination through an organization called the Assistance Coordination Unit of the SOC. And we 

recognize that our own people and our partners are taking real 

risks, but are providing significant support in many different ways, 

specifically in opposition controlled areas. 

Senator CORKER. You know, the special investigator inspector 

that we had in Iraq talked about just recently that he does not see 

us as any more prepared to do development in similar circumstances today than we were in 2003. That has not worked so well 

for us. And I wonder if you would just briefly—I want to get on—

I know there are other folks who have questions, and I do want to 

talk to you about USAID Forward and how that affects us dealing 

with other countries and some of the problems that may exist. I 

want to talk to you a little bit about some of the trade issues to 

help countries toward self-sufficiency. 

But could you briefly talk to us and give us some assurance that 

something is different as it relates to how we deliver assistance in 

places like Syria that are very troubled and obviously have security 

problems? 

Dr. SHAH. Absolutely, Senator. I believe there has been a significant shift in how we do this work. If you look even just in Afghanistan over the last 3 or 4 years, we have more than tripled our civilian presence across the State Department, USAID, and a number 

of other partners. We have implemented data systems and accountability processes, vetting systems, that have not only established a 

program to audit 100 percent of locally incurred costs, but with a 

real rejection rate for, I believe, 21 projects or programs, contracts 

that were cancelled or not awarded because they failed to pass the 

vetting system, that is, positives, or hits, that came through the 

vetting system. 

Those are mechanisms that simply did not exist before. They do 

exist now, and they are highly effective at allowing us to have 

tighter coordination with our military colleagues, more eyes on 

effectiveness in our programs, and a more results oriented orientation. 

We are seeing the benefits of that today in opposition controlled 

parts of Syria where more than 65 percent of our humanitarian 

support goes into those areas through a broad range of partners, 

and where we are now the primary partner of the Syrian Opposition Council in trying to get everything from generators and fuel 

to hospitals and facilities, all the way to some form of media and 

communication and ability for that organization to communicate 

with its population. 

These are capabilities that we have built over the last several 

years that we did not previously have when the 2003 situation was 

made reference to. 

Senator CORKER. Thank you. 

The CHAIRMAN. Thank you. 

Senator Cardin. 

Senator CARDIN. Thank you, Mr. Chairman. Administrator Shah, 

first of all, thank you for your leadership. It has been very, very 

effective in bringing together international development assistance 

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in our security budget, recognizing the returns that we get in our 

involvement in other countries on our national security front. 

I also want to thank you for your commitment to transparency, 

to gender equity, to dealing with good governance, and dealing with 

corruption issues to make sure that our aid is actually furthering 

the stability of a country and not adding to the corruption of certain officials. We have talked about all these issues, and I very 

much applaud the manner in which you have moved forward in 

these areas. 

Senator Corker has talked about the changes in our Food for 

Peace Programs. We have a lot of programs that deal with nutrition and food, but perhaps the No. 1 initiative that the Obama 

administration moved forward with was Feed the Future. So can 

you just quickly tell us how the reforms that you see in the Food 

for Peace Program works with the other programs we have, particularly Feed for the Future? 

Dr. SHAH. Absolutely. Thank you, Senator, and thank you for 

your extra investment of time on issues ranging from gender to 

science, technology, and innovation as we have tried to focus on 

and accelerate those as core parts of our portfolio. We are very 

appreciative of that. 

With respect to Feed the Future, as I noted, that is intended to 

be a model program that focuses in 19 countries, many in subSaharan Africa, some in Latin America, and south Asia, that are 

making their own commitments to reform their policies, increase 

their investments, and move people from a condition of hunger and 

ongoing need for social support and protection to self-sufficiency 

and ultimately commercial market success by building their agricultural capabilities. 

We have seen incredible success stories from Bangladesh, to Tanzania, to Guatemala, and often those success stories are tied to 

either new technologies, like deep fertilizer placement in Bangladesh, which has transformed an entire state in that country, to 

our partnership with Wal-Mart in Guatemala, which is helping 

tens of thousands of farm households connect to modern international supply chains and improve their livelihoods. That to us is 

the vision of success. 

I visited Guatemala and had a chance to see in the same community where we had a Feed the Future Program, farmers connecting 

to Wal-Mart and doubling or tripling their incomes. There had been 

a 35-year Food for Peace Program that provided food to those 

communities. 

What we have been trying to do with that program is shift from 

giving them bulk grains to giving them high-nutrition foods focusing particularly when kids are in the first 2 years of life where we 

know nutrition intervention at that point in time has the biggest 

difference in terms of their livelihoods and their ability to learn 

and thrive over time. And then connecting those families to these 

Feed the Future efforts that help them transition from requiring 

that kind of assistance to being self-sufficient because they are part 

of a larger effort. 

What was tremendous about the Wal-Mart partnership was in 

that setting, when I asked those families what do you need next—

and I thought they would say a new form of agricultural technology 

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or farm implements. Instead, they all said they want schools 

because now that kids are not working on the farm and they are 

earning more income, they want to send their kids to school. And 

that is the path to sustained development that we believe is taking 

hold in parts of western Guatemala, or southern Tanzania, or eastern Bangladesh, and it is making a huge difference. 

Senator CARDIN. Thank you. You mentioned the Office of Science 

and Technology. You have requested additional funding, for a total 

of $85 million. Could you just briefly tell us what those additional 

funds would be used for if it is appropriated by Congress? 

Dr. SHAH. Yes, sir. If appropriated, we believe that these investments will help engage our American universities and American 

businesses and entrepreneurs in helping to bring new scientific and 

technical breakthroughs to our mission around the world. 

This past year, we created what we call the Higher Education 

Solutions Network with seven universities in the United States. 

They include development innovation laboratories, such as one at 

University of California, Berkeley, where students have developed, 

for example, what they call a cell scope that is an iPhone that connects to a microscope that takes a photo of a blood smear, and can 

automatically diagnose malaria and potentially TB without requiring going back to a laboratory. 

Those kinds of breakthroughs can tremendously change the cost 

structure of the global health programs that we implement around 

the world, allowing us to eliminate or eradicate diseases at lower 

cost. And that is what we are going for. And American technological breakthroughs have been at the core of many of our biggest 

successes in development around the world. 

Senator CARDIN. I think it is very exciting, and I want to just 

underscore what Senator Corker said. It would be helpful if we had 

the statutory authority to make sure that, in fact, is done the way 

that you are suggesting it rather than just rely upon the appropriation process. I think it would be helpful for this committee to weigh 

in on that initiative, because engaging our private universities, 

being transformational, and reducing the number of countries 

requiring direct assistance is exactly what our international development assistance program should do. 

One last point on transparency, we have talked about that frequently. And Senator Corker raises the issues of Syria and whether 

the significant investment that we are making in Syria will get to 

its intended recipients, and whether the United States will get the 

benefits of that aid directly as it relates to our security concerns. 

There is concern here because we do not control all the terrain 

on which this aid is going, so I really would appreciate you keeping 

this committee closely advised as to the accountability and transparency issues as it relates to the funds going into Syria and the 

help going into Syria so that we have confidence that the significant investments we are making there are fulfilling their purpose. 

Thank you, Mr. Chairman. 

Dr. SHAH. Thank you, Senator. 

The CHAIRMAN. Thank you. 

Senator Rubio. 

Senator RUBIO. Thank you, and thank you for being here today 

and for your service to our country. 

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I wanted to ask you about a program that I think enjoys incredible bipartisan support and has been incredibly effective, and that 

is PEPFAR, the President’s Plan for AIDS Relief. And I am sure 

you have heard this; I have, from many advocates who are concerned about ongoing cuts to the program that have been phased 

in over the last few years. 

I understand the concept that some of the funds have been 

moved to the Global Fund and so forth to fight AIDS, and that is 

worthy as well. But these two programs are synergistic. 

I wanted to get your take on truly what is going to be the impact 

of this continuing reduction of spending on this program, and what 

it would mean to undermining the goal that the President himself 

has stated of an AIDS free generation? 

Dr. SHAH. Thank you, Senator. The President is very committed 

to the goal of an AIDS-free generation, and I appreciate your advocacy and leadership on this issue as well. 

America has played a unique role in starting and helping to 

accelerate the fight against HIV/AIDS, and today the United States 

spends more than $8 billion a year in global health, the majority 

of which is focused on our efforts to control and reverse the trends 

around HIV/AIDS. It is by far the largest category of our foreign 

assistance and the largest single item within the entire 150 

Account budget. 

With respect to PEPFAR specifically, the President’s fiscal year 

2014 request includes $1.65 billion for the Global Fund. This is an 

important year. The Global Fund has been through a tremendous 

restructuring, and through that restructuring, they are going to be 

working very closely with our bilateral program. And we see the 

Global Fund as a mechanism to accelerate other donors’ commitments to maintain and accelerate this fight. 

I would say with respect, I think in the countries where we work, 

we are seeing more, not less, resources go to HIV/AIDS control and 

treatment. In South Africa, as we modulate our own investment, 

the government is more than making up for gaps, and, in fact, that 

transition is one that has been carefully negotiated with them and 

one they are eager to pursue. So they have ownership and responsibility for what I believe is the more than 4 million South African 

AIDS patients, some of which I have had a chance to meet and that 

are partners, and we proudly work to serve. 

So our goal is to reach 15 million global AIDS patients on treatment. That is a global number that we have all agreed to. I believe 

the current global effort is at 8 billion. And the way we believe we 

will get there is by crowding in investments from, first, the countries in which we work, second, other donors and other partners, 

and, third, by maintaining very strong American budgets for global 

health and HIV/AIDS. 

Senator RUBIO. So just the takeaway then is that even though 

our investment into PEPFAR particularly has eroded over the last 

few years, the difference is being made up by local countries’ own 

investment in these programs, and that that will more than adequate to continue to meet the benchmarks that we have set? 

Dr. SHAH. Absolutely. In fact, we have accelerated and have met 

every benchmark we have set earlier than the time indicates. And 

I think that will continue to be the case through this second term. 

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Senator RUBIO. So you are confident in saying that this reduction 

in spending on PEPFAR will not lead to erosion in the gains that 

have been made and in the progress that is being made? 

Dr. SHAH. Absolutely not. In fact, I am confident that our 

approach of bringing together our global health investments 

around the world and bringing other partners to do more will actually accelerate impacts. We genuinely believe we will see twice as 

many AIDs patients, supported by the global partnership, not just 

the United States. And we are absolutely committed to and very 

confident that we will achieve an AIDS-free generation largely by 

targeting pregnant women with antiretroviral therapy, early testing, and diagnostics. 

Senator RUBIO. OK. Just to another part of the world quickly, 

and it is an article that came out on March 4 and talked about, 

‘‘Dam and Other Afghanistan Projects Being Scaled Back as United 

States Picks Up Its Pace of Withdrawal.’’ The concern is that the 

United States is investing a tremendous amount of treasure and 

obviously lives and blood and otherwise in this region, and scores 

of people have lost their lives to secure, for example, this area 

around Kajaki Dam in southern Afghanistan so that the USAID 

could safely manage a major construction project. 

But now it appears that we have decided not to complete the 

project, and instead leave it to an Afghan electricity company that 

our own special inspector general has criticized for lacking the necessary expertise. 

Obviously the decision to move from Afghanistan is one that 

enjoys popular support, and it is a decision that is not in your 

agency per se. But can you talk about the impacts of these projects 

that we have invested so much money in, that now we are either 

turning over to Afghan institutions that are documented as having 

very little accountability, unless you disagree, and then we can talk 

about that. But more importantly, there is this notion that these 

major projects that we are on the verge of completing or what have 

you and have already invested a lot of money in, we are either not 

going to complete and turn it to others to do or not do at all because of the eroding security situation in some of these regions, 

and the challenge that that poses. 

Dr. SHAH. Well, I thank you for the question, and I would note 

also that American investment in Afghanistan has already allowed 

for a more than tripling of energy access for Afghan citizens, 

including in Kandahar City, which is what the Kajaki Dam is 

intended to improve upon. 

We saw that article, and it inaccurately reflected a sense that we 

were cutting back or scaling back our commitments there. In fact, 

I just spoke with General Dunford earlier this week who spoke specifically about his recent visit to Kajaki where the USAID military 

partnership to refurbish and expand its capacity to produce electricity is proceeding at pace. We think we will be successful. 

The partnership is with Black & Veatch/Louis Berger, which is 

a firm that has been doing the project. And it is also with the 

Afghan Electricity Company. The reason they are part of the partnership is they have to ultimately collect the revenue to sustain 

that effort, and we have been working with them, in some cases 

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ments, which has allowed them to increase by more than 300 percent their revenue collection from Afghans who benefit from this 

electricity. 

And that is what will be required to sustain these efforts over 

time, so we do have to work in a responsible, transparent way with 

our Afghan partners. I think that is a good example of how we 

believe we can be successful. And Kajaki remains a priority within 

our shared military-civilian campaign plan there. 

The CHAIRMAN. Thank you. 

Senator Kaine. 

Senator KAINE. Dr. Shah, great to be with you today. 

When the President in his State of the Union talked about the 

big goal, the eradication of extreme poverty in the world over two 

decades, the United States in tandem with others, you know, I 

applauded because I love the big goals, and I think we are sent 

here to do big things, and we ought to be looking for the big goals. 

But at the same time, I find myself wondering a little bit. 

Sometimes there is a hubris that we have if something goes 

wrong in Syria or North Korea, and we kind of get into what did 

we do wrong, or what is our responsibility. And as I read some of 

the development literature about why the bottom billion or the bottom million, you know, the United States not doing enough usually 

is not one of the reasons why cultures or people get locked into 

extreme poverty. So clearly, a goal like that of extreme poverty 

eradication in two decades is one that has to be done in partnership, and it also has to be one around which there are some pretty 

clear metrics. 

I just would like it if we have talked about this in Senator 

Cardin’s office, a little bit about hunger and preventable child 

death. But let us talk sort of about metrics, and let us talk about 

partnerships that you intend to leverage, both NGO partnerships, 

but also, you know, how are we incorporating other nations into 

this goal? 

Dr. SHAH. Well, thank you, Senator, and thank you for your 

extra commitment to this particular issue because I think it is an 

issue where real significant political leadership will, in fact, make 

a huge difference. 

The President claimed and put forward the goal of ending 

extreme poverty within two decades because we believe for the first 

time in human history that it is achievable. We have seen between 

2005 and 2008, for the very first time in our history, extreme dollar 

and a quarter a day poverty fall in every region of the world for 

the first time. And we believe we are on that path today. We know 

that there are about 1.2 billion people that live in that sort of 

excruciatingly difficult situation, and we know that bringing them 

into a more connected global economy will be the path that gets 

them out of extreme poverty. 

So the question then, as you point out, becomes, what are the 

right metrics to measure? We believe the dual goals of ending hunger and ending preventable child death are the areas where America can make the biggest contribution toward that outcome specifically. We measure our efforts in food and hunger by looking at 

incomes of farm households, by looking at the number of farm 

households we reach, by looking at agricultural development and 

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21

agricultural GDP growth specifically in countries where we focus, 

and then by correlating that to reductions in extreme poverty. 

We know agricultural GDP growth is three to six times more 

likely to reduce extreme poverty, and we have seen that trend play 

out in the 19 Feed the Future countries that have had on average 

a 5.6-percent annualized reduction since joining the program. 

On child death and on global health in particular, we can measure a number of specific things, but under-5 child mortality is the 

core measure of how many children are dying. And it is actually 

a pretty good correlate for other morbidity related measures about 

disease and loss of productivity related to child death, meaning if 

a lot of kids die, then a lot of kids are also getting sick and not 

going to school and other negative consequences. 

So those are the two things. We measure them. You can actually 

download an iPhone app that we have that shows you the health 

statistics and under-5 mortality statistics elsewhere. 

Going forward, as part of achieving this goal, we will also expand 

our efforts in energy access because that is such an important 

driver of helping families move out of poverty, and believe it is possible to double energy access in sub-Saharan Africa from 30 to 

roughly 60 percent, and to achieve that in a very highly leveraged 

way with strong partnerships with American businesses that help 

bring energy to many parts of the world. 

So we believe that these objectives are possible, but they are only 

possible with setting a big goal, bringing other countries and international institutions to bear. The United Nations will in the next 

18 months identify a new set of global millennium development 

goals, and John Podesta is our representative to that process and 

has also advocated for setting the goal of ending extreme poverty 

within two decades. 

And quite frankly, the United States makes outsized and critically important investments in those places where extreme poverty 

will be concentrated 4 or 5, 6 years from now, places like Afghanistan, Pakistan, Somalia, and with a results-oriented public-private 

partnership approach, we believe it is achievable. 

Senator KAINE. The public-private partnership approach, the 

data I see suggests now, you know, foreign aid dollars, if you look 

at a public-private, 10 to 15 percent is public, and 80 to 85 percent 

is private—philanthropic, NGO. Talk a little bit about the leveraging you do in tackling a big challenge like this with the NGO 

community. 

Dr. SHAH. Absolutely, and, in fact, that is the exact opposite from 

40 years ago. Forty years ago, flows into these countries were 

largely public investments, and private investments were the 15 

percent. Now that has been flipped on its head, and that is why 

we have pursued USAID Forward as a reform agenda that allows 

us to partner differently with companies all around the world. 

When we engage, for example, in ending preventable child death 

in India, we are not spending more money in India by any stretch, 

but we are working with Unilever and other partners that can get 

improved technologies and start businesses that reach some communities that can be profitable businesses, and also can work toward the objective of saving children’s lives and ending extreme 

poverty. 

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And that increasingly is defining a broad range of partnerships. 

USAID has been recognized by its peers as leading in this area, 

and we have now completed almost 1,100 of these public-private 

partnerships around the world, many of which I think are a genuine model of how we can achieve the end of extreme poverty. 

Senator KAINE. Great. Thank you. 

The CHAIRMAN. Thank you. 

Administrator, let me just follow up a moment on Syria before 

I go to one area of concern that I have in the budget. Have you 

been approached or has there been any discussion in any interagency process about the need to achieve credit with the Syrian 

people for our assistance, balancing obviously protecting our aid 

provided by not marking everything so that it says U.S.—delivered 

by the people of the United States, but still trying to develop some 

foundation of having them understand who is being supportive 

here. 

Has there been any talk about changing the current approach, 

going primarily through the United Nations and possibly filtering 

some of this assistance through the opposition that we have vetted 

as opposition that we believe share our values? 

Dr. SHAH. Yes, Senator; there have been precisely those con- versations. I would note that of the $385 million of humanitarian 

assistance that we provide, we use the United Nations as core partners in delivering that assistance, but also a sizable proportion 

goes to NGOs and other private organizations that are able to 

sometimes more effectively and with U.S. branding reach opposition controlled areas and settings. And we believe more than 60 to 

65 percent of our aid and assistance actually goes into opposition 

controlled areas and targets specifically those communities. And we 

make every effort to not only brand and publicize when we can and 

when that is safe, but we also have in parallel, TV and media 

efforts to try to communicate what the United States is doing. 

In addition to that, on the services side, we are working directly 

with the Syrian Opposition Council to help them provide that support and do this together, and that was the additional $250 million 

that Secretary Kerry announced this weekend that is separate and 

apart from the basic humanitarian aid, but often will provide water 

services, or diesel generators and fuel, or other things that are 

critically needed essential services, as an economy is going through 

that very difficult time. 

I would say one last thing about this, sir, is the extent to which 

we believe there has been specific targeting by the Assad regime 

of our humanitarian partners. We know there have been 143 

deaths of doctors and nurses and other medical personnel that 

have worked with and at our various supported field hospitals or 

hospital sites. We know that more than eight U.N. international 

staff have been killed as part of efforts to provide services. We have 

very clear data that bakeries and hospitals are preferentially targeted by regime forces in opposition controlled areas, for example, 

in parts of Aleppo. 

The safety and security concerns are very real, and we do respect 

our partners, some of whom are working with Syrian-American 

doctors, for example, that do some extraordinarily courageous 

things, but they do it with a real concern for their own safety. 

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The CHAIRMAN. Well, I am not surprised about Assad, and I am 

concerned, having seen the most recent reports about chemical 

weapon usage, if that is verified, it makes all the more case that 

we have to change our dynamics there and the tipping point. 

Let me go to an area of the world that I am confounded by the 

administration as well as previous administrations’ views. We have 

seen a continuing significant decline in our assistance to the Western Hemisphere, particularly to Latin America and the Caribbean. 

And I am amazed because all the things that we debate here in 

the—or many of the things, I should say, not all the things, but 

many of the things we debate here in the Congress are, in fact, 

emanating in our front yard. 

If I do not want to see undocumented immigration in this country, there are push factors—people leave their countries for only 

two reasons: civil unrest or dire economic circumstances. Otherwise 

they would stay. So it is in our interest through our development 

programs to try create greater economic growth in our own hemisphere. 

If we want to help governments stop transnational crime and 

narcotics trafficking, you have to give poor growers who have to 

sustain their families, alternative crops so that they are not growing coca at the end of the day. That is in our national interest because the last thing we want to see is those narcotics end up in 

the streets of our cities. 

If you want to open up greater markets for U.S. products and 

services for which there is an affinity by Latin Americans to U.S. 

products and services, you want to create economies that are ultimately going to buy more U.S. products and services. If you want 

to look at some of the incredibly important biodiversity issues that 

affect us collectively, you want to think about how you change the 

dynamics of eviscerating a rain forest. If you want to stop some of 

the diseases that had been largely eradicated and now begin to rise 

again, such as tuberculosis, they know no boundaries. 

So I am amazed that with all of those realities and with the 

unrest and the movement away from democracy in the region 

toward dictatorships and totalitarianism, that we continue to cut—

this is like a 6-percent cut, but if you compound it over the last 

several years, you are looking at a very enormous cut. And we just 

finished talking about poverty. Well, about 30 percent of all of the 

region’s population is below the poverty level, and of those, 66 million are in extreme poverty. This is in our own neighborhood. 

So I do not understand the cuts that we are seeing. I know that 

we are going through programmatic changes with Mexico and 

Colombia. We are moving away from hardware to institution-building. But when I look at the totality of these cuts, I just do not get 

it, and that is why we create a void in which people like Chavez 

when he was alive ultimately filled the void, where the Chinese are 

coming in our own hemisphere, where the Iranians have been promoting diplomacy in the hemisphere. I just do not get it. 

So I look at that. I look at in another context—a cut on Cuba’s 

democracy program at a time in which, in fact, we had 6,000 

arrests and detentions last year. We had the Ladies in White, a 

group of women whose husbands or sons sit in Castro’s jail simply 

because they sought peaceful change in their country, get attacked 

FOREI-43947 with DISTILLER

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brutally every week. We saw Oswaldo Paya ́ assassinated, one of 

the leading human rights individuals inside of Cuba. His daughter 

was here not too long ago and made it very clear to us, from all 

the information, that he was assassinated. And yet we see a cut in 

that program. 

So I look at the totality of this, and it certainly does not make 

public policy sense to me. So I am going to be looking to try to 

change this because I just think we have created—and it is not 

until we have a major problem in the hemisphere that everybody 

will run, and we will spend a fortune instead of doing the right 

thing now that can ultimately create the seeds of democracy in 

open markets within the hemisphere. 

If there is one bright spot here, it is CARSI, which obviously is 

one of my critical concerns, and I will be traveling on the break to 

this region, in terms of preventing violence, combating narcotics 

trafficking, increasing citizen security. And I look forward to hearing how you are going to use the funding for 2014 there, as well 

as how do we create in these countries fiscal and policy reforms 

that can sustain us moving forward. 

So, I have gone over my time, but this is one of my passions and 

no one else seems to have a greater passion for it. But it just does 

not make a lot of sense in my mind in terms of the national interests and security of the United States. 

Dr. SHAH. Thank you, Senator. We had the chance to discuss 

this, and I very much appreciate and recognize your strong and 

consistent leadership here. We, too, believe the region is critical 

and important. We have had to present a budget that conforms to 

an overall 6-percent reduction, which has forced a lot of difficult 

tradeoffs at a time when the actual number of humanitarian disasters around the world is doubling what we need to respond to in 

terms of case loads. 

There have been, as you point out, some critical areas, like 

CARSI, where we are presenting in this budget a 23-percent 

increase in our investment and our focus on that critical security 

program for the Northern Triangle. We know that our efforts have 

been delivering real results. In Mexico, where we have worked on 

prosecution-related partnerships, we have seen the rates in participating cities go up significantly and delays go down significantly. 

We built a new partnership with Los Angeles to bring some of the 

crime control measures that have been effective and proven in that 

setting to other countries in the region. We know that the alternative crop program, to which you made reference, in Peru has 

been successful there and a model for work in other parts of the 

world. 

And we also see across regions—Latin America has been by far 

the most successful with public-private partnerships. For every dollar we put into a public-private partnership in that region, we are 

able to attract $2.53 dollars from private sector, local partners. And 

we believe that that serves as an engine of sustaining significant 

development, investment, and partnership. 

But we recognize that this is a very important region, and we 

have had to make tough tradeoffs in a budget that we certainly 

wish was larger. 

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The CHAIRMAN. I will just close on this, Administrator. For several years now, whether you were the Administrator or previous 

ones, I have heard that there are always tough tradeoffs. And 

where the tough tradeoff goes always is Latin America and the 

Caribbean. That is always where it ends up being cut. And I just 

think that that is foolish at the end of the day. We are going to 

have a problem, and then when we have the problem, we will 

spend a fortune. 

We did the same thing with Central American wars, and then 

after we spent a fortune in Central America providing democracy, 

we got out, and we did not lay the foundation of the seeds that 

would have provided long-term growth and prosperity. 

Senator Corker. 

Senator CORKER. Thank you, Mr. Chairman. I am glad to hear 

you talk about a topic you care deeply about. Thank you. 

Mr. Administrator, I want to talk to you this round of questions 

about USAID Forward. And, again, I want to say I really appreciate the thrust that you have had toward self-sufficiency. I know 

what you are trying to do is move away from NGOs that are not 

necessarily based in the area or based in the country, and try to 

build capacity with governments that are there. 

And obviously, you know, foreign aid is under criticism right 

now. A lot of people here in our country see needs here and wonder 

why we are doing things in other places, and so I do think that the 

move toward self-sufficiency is a good one. On the other hand, dealing in that manner can create a lot of political risk. You end up 

dealing with governments that sometimes commit fraud and are 

involved in corruption. It does mean probably that we move toward 

more direct involvement with them. 

And I just wondered if you might talk a little bit about your concerns there and your plans to alleviate those, and also comment on 

whether—if you were moving ahead with this effort, which I hope 

you will, if you see countries where corruption and other kinds of 

things are taking place—you will withdraw due to their lack of 

accountability and responsibility. 

Dr. SHAH. Thank you, Senator, and I appreciate the opportunity 

to discuss with you USAID Forward. This has been our signature 

agency reform effort and has covered three major areas of transformation. One is how we partner around the world to which you 

have asked that question. 

But there have been other areas of focus within USAID Forward 

as well, a real focus on science, technology, and innovation, and 

making sure we bring the best of what America has to offer to our 

work has been a core element, as well as an absolute focus on 

measurement, results, evaluation, and transparency, which has 

been an important part of this. 

But going to your question specifically, a core part of our thinking is using and partnering with those who represent real local 

solutions. We can bring the cost structure of our work down and 

create the kind of institutional strength that can sustain these 

efforts and activities after American aid and assistance goes away. 

And that is the basic theory. 

Nearly every one of our peer countries spends somewhere 

between 60 and 80 percent of their total budget on these types of 

FOREI-43947 with DISTILLER

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local institutions. When I started at USAID, we spent 9 percent in 

that space. So we have had a focused effort to increase that percentage to something that we think is responsible, and we have 

asked every mission to identify what that responsible level might 

be, taking in account for all kinds of considerations, including corruption and weak institutions locally. 

The result of this has been a process where we have moved more 

resources to local partners. But in all of those cases, we have conducted careful and rigorous country assessments. If we are going 

to work with a local government, we assess their capacity to be 

transparent. If they are not, we say, sorry, we cannot work with 

you. And in some cases, they will come back and say, OK, well, 

what can we do differently as they have in Malawi and Liberia, 

where, as a result of receiving our assessments, they said, OK, we 

will embed an international auditing operation within our Ministry 

of Finance, or we will build a strong public financial management 

system that gives you the confidence. And then, by the way, you 

can work with us, and then other partners can also work with us 

because we are committed to fighting corruption as best we can 

with your partnership. 

So I believe this effort has really transformed our capabilities. 

Our staff is out and about working with partners. We are able to 

find and support local entrepreneurs. We have offered credit guarantees to dozens of local banks that have increased their lending 

to small and medium enterprises in Africa, for example, by $530 

million last year, at almost no expense to us because those credit 

guarantees do not get called down because the people tend to be 

good for the loans. 

And we have seen external validation from nearly every major 

development entity and expert organization in this town, ranging 

from AEI and Heritage to the Center for American Progress and 

OXFAM. 

So, I know that this is tough. I know in places like Afghanistan 

where corruption can be a very significant endemic challenge we 

have a different approach. 

In that setting, most of our ‘‘on budget assistance’’ goes to an 

entity called the Afghan Reconstruction Trust Fund, which is managed and operated by the World Bank. And while that is not quite 

what we meant by local solutions, it protects and safeguards very 

significant American investment in that country’s future, and we 

will not take undue risks in that context. 

Senator CORKER. Well, again, I like the thrust that you have 

with ag. I like the thrust that you have with USAID Forward. I 

think the movement toward self-sufficiency and dealing with people 

in their own countries is a great—I like the way you are levering 

PEPFAR, the way you discussed with Senator Rubio. 

One area that I think we are not doing a good job in leveraging 

is in trade. In other words, if we want some of these developing 

countries to really move toward self-sufficiency, something we can 

do well is really increase the ability of those countries to trade 

internationally and to trade with us. And yet if we look at the 

efforts, there is really not a coordinated effort. GAO says there is 

18 different agencies that focus on trade. We understand when the 

report comes out each year to focus on how much effort toward 

FOREI-43947 with DISTILLER

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trade is taking place, people just start lumping in things: a roadway in Afghanistan, something else. 

I am wondering if you might consider putting some effort into a 

coordinated trade effort so that we can help leverage many of the 

self-sufficiencies you are talking about and move away from the 

day-to-day assistance effort that we continue to be involved in. 

Dr. SHAH. Well, thank you, Senator. The short answer, sir, is 

absolutely we will. And I believe in this second term, in particular, 

this will be an increased focus, specifically with respect to some of 

our efforts in Africa, but also in context ranging from Jordan to 

Afghanistan to Haiti. In fact, in Afghanistan, one of the most important things we can do is help clean up the process by which customs are collected and revenues are generated and then actually 

sent back to the government. And by cleaning up that process, we 

think they can significantly improve their domestic revenue collection, which will be critical to smoothing the reality of less international expenditure in that country. 

In Jordan, we have seen a 250-percent improvement in customs 

collections because of our partnerships with them. Sometimes it is 

bringing technology to border posts. Sometimes it is just bringing 

transparency to those settings and helping to improve transparent 

customs collection. 

In parts of east Africa, as coordinated with our Feed the Future 

effort, we are actively expanding the focus on regional trade. In 

Tanzania, for example, as a precondition for being part of our partnership, we asked the Tanzanians to forgo the export bans they 

have put on Tanzanian agriculture. Every time food prices go up 

or there is a regional shortage, they use those export bans. And 

that, of course, creates a strong disincentive for investment. So 

they have made that commitment, and now we are working with 

them to clean up the kind of checkpoint process as roads cross from 

one country into neighboring countries. The same is true of South 

Sudan and its neighbors. 

So these types of efforts, while they do not get a lot of publicity 

and do not tug at the heartstrings in the same way, they do, in 

fact, improve domestic revenue collection speed, local and regional 

trade and investment, and are often very high on the list of what 

local businesses will ask us to advocate for and prioritize. And you 

are absolutely right, and we should do more, and we will try to. 

The CHAIRMAN. Senator Casey. On the second round, I go to 

members who have not had an opportunity. 

Senator CASEY. I am very happy about that. [Laughter.] 

Mr. Chairman, we often say thank you, Mr. Chairman. I want 

to say it loud and clear. Thank you, Mr. Chairman. We know of the 

seniority rule. 

I wanted to, first, by way of commendation for the work that you 

have done. We appreciate that. You have been stellar in a very difficult environment and in a very tough position. 

I wanted to direct your attention to two areas. One is the question of food aid. Too often around here, and I point a finger of 

blame at myself and probably could extend that to others as well. 

But we do not talk enough about the impact of the international 

affairs budget on our States and on the country, in addition to 

FOREI-43947 with DISTILLER

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making the argument about security and the important necessity 

of food aid and aid like that. 

Interestly, in Pennsylvania, three numbers: 3, 223, and 112. Just 

looking at these numbers today, and we should have them—

I should have them memorized by now. The U.S. Export-Import 

Bank financed over $3 billion in exports from 223 companies in 112 

communities in Pennsylvania. We do not say that enough. We do 

not often make that very important and substantial and measurable nexus between that support and what happens in a State like 

Pennsylvania. 

We have more than 30,000 international students studying in Pennsylvania in 2011, and they brought over $950 million into the 

State’s economy. So all these subjects we are talking about when 

it comes to this budget are significant for our States and for the 

country. 

First of all, with regard to food aid, I was struck by—and I am 

sorry I missed your testimony and your personal testimony, or the 

testimony you gave today. But I was noting in your prepared testimony, and you may have gotten to this already, but I think it bears 

repeating, that you assert on page 4 that pursuant to this year’s 

budget request, it would ‘‘enable us to feed 2 to 4 million more hungry men, women, and children every year with the same resources.’’ You go on to talk about buying food locally can speed the 

arrival of aid by as much as 14 weeks. 

It can also cost much less. And you go on from there to make the 

case on flexibility. 

I guess I would focus the first question on how do you make that 

happen? How do you ensure that the potential recipients of this aid 

get not just get the kind of food, but in particular, the nutritious 

foods that they need, even if they cannot be bought in local 

markets? 

Dr. SHAH. Well, thank you, Senator, and thank you for your 

unique leadership on food and hunger issues at home and around 

the world. The legislation that you have worked on is often referenced appropriately as the underpinning of our Feed the Future 

initiative and program. And your leadership on thinking through 

food aid is very important to our aspiration to get this done. 

Senator CASEY. Thank you. 

Dr. SHAH. The reality is that over the last 3 years we have an 

actual database driven by the fact that we have had in the international disaster assistance account about $300 million a year for 

a program called Local and Regional Procurement. That program 

provides us with real data about where we have been buying food, 

how long it takes us to take regionally procured food to children 

and women in needy situations. 

It has shown us that we can use new and different kinds of tools 

ranging from local foods and new food formulations to vouchers and 

other card-based systems that empower people in settings where 

we cannot physically reach them with food convoys for security reasons. And it has given us the confidence that we can use the teams 

and the organizations we have in place to implement this approach 

in a way that delivers real measurable results. 

And I would also add that through that effort, we know that 

when we buy food locally, we put it in a bag that says ‘‘USAID 

FOREI-43947 with DISTILLER

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from the American People,’’ and it has the same brand value as 

anything else. In fact, I have actually been in settings where we 

are feeding children with high nutrition pastes and things like 

that. And I can assure you they are well aware because each 

packet is individually wrapped and labeled and branded, that those 

benefits accrue to them because of American commitment, generosity, and humanitarian support. 

So we have a strong database that indicates that this kind of 

flexibility will reach the 4 million additional children. And we know 

that, frankly, this year, the Syria crisis is so dramatic and significant that all of our flexibility will be absorbed in that setting, 

requiring us to move children in Somalia, DRC, and Pakistan from 

the LRP program to the Title II program. And because of the efficiency differences, we will end up moving hundreds of thousands 

of kids off the support programs as we make that transition if we 

do not do this reform. 

Senator CASEY. I appreciate that, and I have limited time, but 

I will just raise one more question. You can amplify the answer in 

written form as well. But on Syria, I know you have been asked 

a number of questions today, and I am sorry I was not here for 

that. 

But I think we are still struggling with the best approach, and 

I think it is both a bipartisan struggle, but also a bipartisan effort 

that is being undertaken. Senator Rubio and I have legislation. 

Senator Coons and several others are working with us on it. But 

we are trying to move forward in a way that would be constructive 

and effective in bringing the conflict to an end and to be able to 

deal with the aftermath. 

And I know this may be by way of reiteration, but just maybe 

a couple of words about how you are going to continue to make 

sure that the food aid gets to folks either on the Syrian side or the 

refugee side in places like Turkey? 

Dr. SHAH. Well, thank you. On the humanitarian side, we have provided at this point nearly $400 million of humanitarian support. 

We know that we are reaching 2.4 million Syrians inside of Syria 

with everything from food to clean water to earlier in the season 

winterization kits and blankets for their homes and their living situations. And we know that we are providing through a range of 

partners support to the 11⁄2 million refugees with a real focus on 

those in Jordan and Turkey. 

In addition, we have also provided actual direct support to Jordan to help them absorb what is essentially 42,000 children who 

are now joining the Jordanian public school system in the neighborhoods along the Syrian border and placing extraordinary strains 

on their domestic situation. It has been difficult. Access inside 

Syria is the biggest challenge, but we work with a range of partners, including NGOs, that can focus and work in opposition controlled areas. 

In addition to that, Secretary Kerry this past weekend noted an additional $250 million commitment specifically to the Syrian 

Opposition Council to support services and governance efforts in 

opposition controlled areas. And we are coordinating an international effort to bolster the SOCs capacity to provide real services 

and governance in certain parts of opposition controlled Syria. And 

FOREI-43947 with DISTILLER

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as Secretary Kerry noted, in making that announcement the Syrian 

opposition has worked with us to also make commitments to respect women’s rights, gender considerations, and to promote openness in their approach to governance as this gets off the ground. 

So we are doing everything we can. It is a very difficult operating 

environment as, of course, you are well aware. And our people take 

real risks to do this, but it is in our national security interests to 

be actively engaged here. 

Senator CASEY. Thanks very much. 

The CHAIRMAN. Senator Rubio. 

Senator RUBIO. Thank you. And the chairman brought this up 

earlier, but I wanted to close the loop and just add my own 

thoughts on the Cuban democracy programming. And he may have 

made this point, and so I apologize. I was in the back for a few 

moments. 

But my understanding is that your core budget at USAID has 

taken about a 10-percent reduction, is that correct? But the Cuban 

democracy programs have taken a 25-percent reduction, which 

seems way out of proportion to the general reduction for a program 

of this small scale. 

And a couple of points come to mind. No. 1 is, every time some 

of our colleagues or others visit Cuba, one of the first things they 

get complaints about from the Castro government is the democracy 

programs. They absolutely hate it. That is No. 1. And there is a 

reason for that, because not only are they antidemocratic, but 

apparently they felt these programs in the past have been quite 

effective. 

The second problem then is, over the last few years, and this is 

documented. I am not making this up. Some of our colleagues, including the former chairman of this committee through staff, held 

this program up with endless questions about it. And so I do not 

think it is a coincidence that this reduced so completely out of proportion from the size and scope of the program. And I just hope 

that this will be reversed because I think it is a terrible precedent 

and a terrible idea. 

Beyond that, I do have concerns that I hope will be addressed 

when the funding does come out, and hopefully it will be at a 

higher level once it goes through this process, that it is truly being 

purposed for democracy purposes. And I have no problem, and obviously I do not have anything here to say today about the people 

who are currently receiving the funds and how they are using it. 

I just think it is important that we be clear, this is a democracy 

program, and there are actually provisions in law—the Cuban 

Democracy Act, the Lever Debt Act—that actually condition what 

it can be spent on and what it cannot be spent on. 

So I am not claiming that it is being spent on things that it 

should not be. I think it is very important that we be clear that 

this money is being spent on the promotion of democracy, not on 

the creation of grassroots community organizations that specialize 

in, you know, better sewage treatment programs or what have you. 

This is about democracy. That is what this program is about. And 

I hope we will be vigilant in that regard. 

And I also think it is important to ask ourselves—and by the 

way, this is not a 1-year cut. My understanding, Mr. Chairman, is 

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this has been a steady erosion of this program over the last few 

years. But a 25-percent cut on such a small program, combined 

with we have seen some of the political resistance to it over the 

last few years. I personally do not believe it is a coincidence, and 

I hope that this can be reversed. 

On a broader point about foreign aid in particular, in general, 

and I would use Egypt as an example, in particular. 

I am a believer in foreign aid. I think it is an important part of 

our foreign policy. It gives us influence. It allows us to impact 

events around the world. I think it is an important tool in furthering our national interest. And I am sure you agree—I know you 

agree—that the primary purpose of foreign aid is to further our 

national interests. 

Americans are concerned, however, when they see foreign aid 

going into places—and I would just use Egypt as an example—

where you have government leaders and others in that society that 

are participating not just antidemocratic things, but just systematically violating the rights of religious minorities and others. And I 

think my question is on a broader scale—I am a firm believer, and 

I want to get your thoughts—that our foreign aid should be conditioned, and increasingly conditioned, on our national interests and 

on our values, particularly when it comes to foreign aid along the 

lines of supporting governments and their economic programs. 

And I just think it is critically important that our foreign aid 

come with strings—quite frankly, not with strings, with ropes 

attached, that ensure that the money is being used to further our 

national interests. It is not a charity. It is not paying tribute to a 

foreign government the way one leading cleric in Egypt classified 

it as. It is something that is designed to further our national interests and our values. 

And I just want your general thoughts about what we can do to 

improve on that front. What can we do to ensure that our foreign 

aid is a carrot, and, quite frankly, an incentive for governments to 

move their societies and their economy in a direction that is good 

for them, but ultimately is really good for us because it is our 

money. 

Dr. SHAH. Well, thank you, Senator. On both points, I can assure 

you on Cuba, your point is well taken, and we will make sure as 

we have done that the focus of this program sticks to the letter of 

the law and is focused on democracy and civil society. And per the 

recent GAO report, I think those third party assessments show 

that, in fact, that has been how we have managed to implement 

this effort. 

With respect to the general point about foreign aid, I am in complete agreement that our foreign assistance advances our national 

interests. Sometimes it advances our national interests by seeking 

and achieving commitments to certain types of reforms that can 

range from sectorial policy reforms to larger scale commitments to 

protect the rights of women and minorities in certain situations. 

We would be eager to work with you to articulate different forms 

of conditionality, but Egypt is a good example because over the last 

year and a half, as we have reshaped the program in Egypt, we 

have essentially focused on a handful of priorities. The first is the 

macroeconomic situation, and we have, in fact, conditioned our 

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cash transfers and loan guarantee support efforts to Egyptian participation and negotiations in the IMF program, because that is 

what is required for them to be successful. 

Second, we focus very much on youth employment. As Secretary 

Kerry recently said, that is the core challenge, and we know that 

our efforts help open up the economy, have led to 3,700 small business starts; 7.9 million loans to local small-scale businesses that 

create jobs for young people in those settings. 

Third, we focus very much on women and minorities. We specifically support the Coptic Evangelical Organization for social services, and a range of other minority rights organizations, and have 

conditioned as part of our diplomatic dialogue this assistance on 

ensuring space remains open for those civil organizations in respect 

of those rights. 

Senator RUBIO. I am sorry, when you say ‘‘diplomatic dialogue,’’ 

we have told them we want you to protect the Coptic Christians, 

or we have actually said——

Dr. SHAH. In every conversation, absolutely. 

Senator RUBIO. All right. 

Dr. SHAH. And, we do not link everything to precise conditionality, but the basic themes of supporting the macropackage with 

the IMF, supporting women and minorities, ensuring rights and 

open space for civil society, and allowing private enterprise to flourish and create jobs in areas where there is a lot of young unemployment have been the drivers of our dialogue and are the basic 

conditions for this program being in place. 

The CHAIRMAN. Thank you. 

Senator Coons. 

Senator COONS. Thank you. I want to thank Senator Menendez 

for convening this critically important hearing. 

And I want to applaud you, Administrator Shah, for your determination, your vision, your leadership, and your deep commitment 

to development issues. I share the views expressed by several of my 

colleagues that development is absolutely essential to America’s 

national interests, and I intend to continue to work with you to 

ensure strong support for the appropriate balance between diplomacy, defense, and development. 

But in order for me to be true to the concerns of my home State, 

we also need to continue to pursue efficiencies to make sure that 

funds that are being spent on foreign assistance are spent wisely 

and well. And I have been impressed with your innovative 

approach to furthering our development goals, to insisting on 

accountability and to transparency. And so let me dive into a couple of things around it if I might. 

I also want to commend the work of this committee in partnership with USAID on Syria and Syrian relief, and I commend 

Secretary Kerry’s significant increase and support through the 

SOC, something we have discussed before and you know I have 

pressed for. 

Africa trade hubs, if I might first. I have been impressed with 

the work of USAID’s regional trade hubs that help build regional 

capacity in Africa and create economic opportunity for Americans 

and Africans. How can they be expanded to promote and further 

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interregional trade, and what ways do you think USAID can contribute to expanded opportunities for trade investment in Africa? 

Dr. SHAH. Well, thank you, Senator, and thank you for your ongoing support of this agenda and your tremendous personal experience and guidance on a range of issues as we go forward. 

Specifically with respect to the African trade hubs, I would point 

out that in both west Africa, eastern Africa, and southern Africa, 

we have had independent evaluations that demonstrate that over 

the period of 7 to 10 years, these trade hubs have significantly 

improved interregional trade, that countries depend on them for 

having clear and transparent custom systems and the ability to 

move goods across borders. 

We are implementing reforms as we speak. We are tying these 

very closely to our agricultural programs and agricultural trade 

efforts, and that has already borne quite a lot of fruit. The second 

way we are informing them by is linking these to some of the 

efforts to fight corruption and improve transparency with customs, 

collection, and informal collections of tariffs at border posts. And a 

third has been tying the trade hubs to our efforts to expand access 

to energy in the region. Many of these settings—energy, trade—will 

be one of the next big areas of regional trade and expansion. 

So we are pursuing all of those with respect to these trade hubs 

and obviously maintaining the budget support for these efforts has 

been a challenge, but we think there is strong external validation 

for the effectiveness of these efforts. 

Senator COONS. Well, they are a modest investment that I think 

has seen some real outcomes. I look forward to working with you 

on those. There are so many other things I would like to talk 

about: the Higher Education Solutions Network, which I think is 

a tremendous idea, your, I think, bold reform, USAID Forward. 

But let me also talk about food aid reform, which is a significant 

proposal in this year’s budget. If you would, please discuss the 

reforms to the Food for Peace Program that were included in the 

Senate version of last year’s farm bill, what benefits they would 

bring to the program, and what the proposals are in the administration’s budget, and how that would deal with inefficiencies in the 

current system. As I know, it has already been discussed, but continue to protect the vital interests of American farmers and shippers as well. How does it strike the right balance? 

Dr. SHAH. Well, thank you. We believe this proposal does, in fact, 

strike the right balance. It incorporates many of the components of 

what the Senate bill was moving toward, which is giving us more 

flexibility to use and purchase food locally and to do that when it 

is cheaper, more effective, it does not compete with Americanproduced commodities, and it can help save lives in emergency 

settings. 

And we have a strong database over the last several years of 

examples where we have done precisely that. And we also have a 

strong database that shows that recipients of that type of aid and 

assistance have the same appreciation of it as coming from the 

United States and being branded as such as in the traditional 

programs. 

I would add that this proposal includes a commitment to continue to buy the majority of food from American producers and 

FOREI-43947 with DISTILLER

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shipped on American-flag vessels. But we want to do that in a 

more modern and science-based way. The science tells us that traditional commodity gifts are less useful at saving children’s lives at 

times of crisis than high nutrition, micronutrient enhanced, prepackaged foods that are now being developed in Europe and elsewhere in the world. We think they should be developed in the 

United States. We have the best agricultural system and the best 

agricultural companies on the planet, and we should be at the forefront of that. 

So our team has created a pipeline of 10 to 12 new products and 

technologies that will be emerging with those types of products. We 

think that is very much the future of a science-based aid program 

that can save the most lives at times of crises, and we think that 

will be very effective. 

Finally, I will just say with respect to shipping that we have 

looked very carefully at this and provided a support program 

expansion for the Department of Transportation. We believe that 

most—in fact, there is quite a lot of concentration in this industry 

with our use of a few firms really being at issue here, and we have 

designed that to be able to ensure that those partners have a transition path in which they receive support and can maintain American jobs. And that was the purpose of that part of the proposal. 

Senator COONS. I look forward to working with you on a number 

of these different great challenges of development. I have additional questions I would love to ask on Kenya and the Democratic 

Republic of the Congo that I will submit for the record. 

Thank you, Mr. Chairman, for the chance to question today. 

The CHAIRMAN. Thank you, Senator Coons. 

Senator Murphy. 

Senator MURPHY. Thank you, Mr. Chairman. Welcome, Administrator Shah. Thank you very much for joining us. Let me just associate myself with the comments of Senator Coons and others. We 

are so appreciative of your work, and I think we understand now 

more than ever that this Nation does not remain secure unless we 

have a commitment to foreign aid and an understanding that the 

only way to win the argument as we have been talking about on 

this committee week after week and month after month is to make 

sure that we are a true partner for development. 

Administrator Shah, I wanted to talk about recent events in Russia for a few moments. I do not know if that has come up yet, but 

we certainly were very disappointed to see the new Russian disposition not only on USAID, but also on other American NGOs that 

have been very good work there. 

And it is an open-ended question for you to just give the committee an update as to our strategy vis-a-vis Russia going forward. 

To the extent that we do not have a physical presence there of 

USAID, can we still accomplish with respect to our development 

goals there from outside the country, and what do you see as our 

future disposition toward that nation, and is there anything left 

that we can continue to do without a presence there? 

Dr. SHAH. Thank you, Senator, and thanks for raising that particular issue. It has not yet come up. 

Over 20 years of history, the United States development partnership with Russia had evolved to be very focused on specifically 

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maintaining space for civil society organizations and supporting 

those organizations, primarily Russian-led organizations that 

sought to advance the principles of freedom of speech, freedom of 

civil society, openness, transparency, and government and public 

administration. 

Obviously that specific space has been aggressively targeted with 

those organizations, whether they are USAID partners or otherwise, having been the subject of visits and raids and document 

requests and other things that have made it very hard for those 

organizations to continue their mission. 

That said, our Ambassador in Russia and our State Department 

team in Russia is very focused on this element of the partnership 

and dialogue with that country. And, in fact, there are a range of 

mechanisms they can use to continue to provide support through 

international organizations and others to advance civil society 

causes. But at the end of the day, we are very concerned and worried about the continued restrictions on these organizations. 

By the time what happened last year happened, USAID was a 

very small partner with these organizations that had become 

almost entirely supported through a diversity of sources of support, 

most of which were Russian. So it is not so much a targeting of 

USAID that we are concerned about. It is the space and the ability 

of partners, like GOLOS, to be effective operators. 

Senator MURPHY. So without the mission presence, will there be 

any presence of USAID dollars in Russia moving forward? 

Dr. SHAH. Well, the State Department will continue to provide 

engagement and support in a range of ways to partners. USAID 

will not be part of that. 

Senator MURPHY. Just turning quickly to Afghanistan, I want to 

just raise a very specific point. On one of my recent visits there, 

we were taking a look at some, you know, very productive programs that you had funded to try to build the agricultural sector. 

And we continued to hear about a persistent problem of transport 

that, though we were doing a better job of getting resources to producers and they were producing new crops that were not poppy, 

increasingly they just could not come up with an economic rationale to get them out of the country to buyers because on average the 

transport was being stopped 24 different times, legally and illegally, by people who required them to pay fees. And by the time 

they got it to a port, it just did not make any sense to sell it any 

longer. 

Can you talk a little bit about this specific problem in Afghanistan and how that potentially gets better or worse as we decrease 

our military presence there? We are doing a lot of good work with 

farmers, but it does not do much good if they cannot get their product to market because of the difficulty of transportation. 

Dr. SHAH. Well, thank you for asking about agriculture in

Afghanistan. I think over the next 5 to 7 years, until some of the 

mining resources come online, that will be the core driver of growth 

and development and employment for the bulk of the people of 

Afghanistan. 

The reality is the central challenge for Afghanistan in this setting is sustaining the huge gains that have already been made, and 

ultimately replacing international support and military contracting 

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with private activity and private investment. And private investment simply cannot thrive in an environment that, as you described, has so many erratic points of engagement from officials, or 

otherwise, who effectively create a difficult and sometimes corrupt 

operating environment. 

So we have worked in a number of ways to address that. First 

we have created something called the Tokyo Mutual Accountability 

Framework by which future aid commitments will be conditioned 

on Afghans themselves achieving certain benchmarks, one of which 

is specifically fighting corruption and improving the collection of 

domestic revenue from customs and reducing transport bottlenecks. 

Second, we work with them across the board on trying to, in a 

more specific way, implement programs that address these things. 

Things as technical as using mobile-phone-based payment systems 

have been found to be effective at essentially cutting out the various layers of middlemen who can sometimes cause these types of 

respective corruption problems that limit private activity and 

investment. 

The third is we are in the process of making sustainable agricultural investments and often doing it through local Afghan private 

enterprises, and we think that is going to be a very important part 

of that sector succeeding. 

Senator MURPHY. Thank you. Thank you very much, Mr. Chairman. 

The CHAIRMAN. Senator Cardin. 

Senator CARDIN. Thank you, Mr. Chairman. 

Administrator Shah, I want to spend a little bit of time allowing 

you to respond to how the President’s budget fits into the Rebalance to Asia policies that the administration has announced and is 

moving forward on so many different fronts. So I am interested as 

to how your budget will complement the President’s initiative on 

the Rebalance to Asia. First, I want to ask about two specific countries, and then I will be glad to get a general response if the time 

remains. 

In Burma, the President has made this a personal priority. You 

opened an office in August of last year, if I am correct. Can you 

just update us as to the progress being made in that country? We 

have gotten mixed reports as to how things are going. 

Dr. SHAH. Yes, thank you. I will say just in general while we 

have a 6-percent overall reduction in our budget, the fiscal year 

2014 request reflects a 7-percent increase for Asia to capture this 

Presidential priority of a pivot to a prioritization of our Asia partnerships. 

In Burma specifically, when the President was there, he both 

opened the USAID mission and launched a partnership that was, 

in fact, conditional. It delineates the conditions under which we are 

expanding our efforts on a range of fronts. And some of those conditions have to do with government transparency and openness and 

continuing on their path of reform. And some of them have to do 

with how they are addressing the peace process with ethnic minorities in certain border areas. 

We believe there has been effective and significant progress in 

the first area, and we know there are processes in place to address 

FOREI-43947 with DISTILLER

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the second. But as we have all seen more recently in the press, 

that it is not on the same trajectory as the first. 

That said, our efforts are focused on a few things. First, we are 

focused on improving the economic climate, opening up the economy, and supporting the kinds of public-private partnerships that 

we launched on a recent visit that I made there with a range of 

American technology companies creating higher education partnerships and opportunities for business starts in Burma. 

A second is a real focus on health, education, and agriculture, 

which are by indicators some of the lowest in the region by far on 

all of those fronts, and they have a lot of potential. But we will 

have to implement those programs effectively and with far more 

domestic investment alongside our commitments and capabilities. 

And then the third is we are active participants in the peace 

process and in the humanitarian services needs that exist in areas 

where there has been ethnic conflict. And so we are actively doing 

that as well. 

Senator CARDIN. I would suggest there is no bigger spotlight 

than the President when he visits, but you need to keep the spotlight on Burma. Clearly the progress has been inconsistent and 

there is great opportunity there. 

I want you to comment on Vietnam for one moment, and let me 

put this in context. It is one of the PEPFAR countries, and I am 

a strong supporter of PEPFAR. I think it has been incredibly successful. But in Vietnam, PEPFAR makes up more than half the aid 

programs we have there, totaling roughly $70 million dollars if I 

am correct. And that is a significant amount of money for that one 

country. 

I believe that the HIV/AIDS rate in Vietnam is less than .05 percent. So the question is, Is that the best use of our foreign aid 

resources in a country that has a relatively low rate of infection, 

where the other needs are so great? That money, perhaps, could be 

used for other purposes to advance U.S. goals. Your comments. 

Dr. SHAH. Well first, thank you for asking the question. I think 

the President’s budget, especially in fiscal year 2014, reflects some 

of those tough tradeoffs. While we remain very committed to the 

PEPFAR control effort in Vietnam, the actual budget committed to 

that will decrease significantly by 20 percent, because of increased 

domestic investment and responsibility for seeing through the ongoing treatment needs for Vietnamese patients, but also because 

we wanted to increase resources in a few other areas of investment 

in order to capture opportunities on poverty reduction, and maintain civil society rights, and support democratic governance. 

Senator CARDIN. You are usually very responsive to my questions. I did not find that particularly responsive. We have a limited 

amount of money, and it is wonderful their country is making 

progress on HIV/AIDS, but, are there higher priorities that we 

should be investing in in Vietnam? 

Dr. SHAH. Well, let me address it a slightly different way by saying I think one of the top priorities we do want to capture is Vietnamese participation in the TPP, the trade partnership. And we 

are increasing our investment to encourage that participation, and 

the budget reflects that in that it reflects an increase in our 

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economic support resources, but a decrease in some of the core 

global health investments. 

There are other programs we are seeing through, like dioxin 

remediation and support for overall economic governance. But I 

think the direct answer to your question is, yes, we believe that 

there are other priorities that we should be supporting, and we are 

trying to prioritize that within a difficult budget. 

Senator CARDIN. And there is strong support for PEPFAR, and 

I think it has been remarkably successful. My point is that if there 

are higher leverage programs available in a country, we should be 

able to talk about that and look at it. Vietnam has been in the 

spotlight a lot for United States relations, and it is a country that 

we have made a lot of progress with, including on security issues. 

I think many of us thought that is amazing. 

So we have made progress on all fronts of Vietnam, and we have 

to look at our resources and see if we are using them most effectively. 

I will get your response to the other parts of Asia later, but 

thank you very much for your commitment. 

The CHAIRMAN. Senator Kaine. 

Senator KAINE. Thank you again, Dr. Shah. I just want to follow 

up on comments that the chairman made about the Americas. 

Senator Rubio made some comments as well. And, you know, just 

to say that any time somebody from USAID or the State Department is here before this committee, I think you are going to hear 

a lot of questions about this from, I think, a lot of different angles 

because it is of grave concern. 

I lived in Honduras in 1980 and 1981 when it was a military dictatorship. And in that period of time, labor activists, human rights 

activists, clergy were being persecuted, even losing their lives. 

There were civil wars in Guatemala and El Salvador that were 

sending refugees by the tens of thousands over the border. The 

United States was building a military presence in Honduras to use 

as a staging area for a fight against Nicaragua. 

It is not a military dictatorship today. It is a democracy today, 

and it is less safe. The people that I lived with then in a very oppressive time are less safe in their communities today in Honduras, 

and not just in Honduras, than they were. At that point, Honduras, 

who has been just a spectacular ally of the United States—if there 

is a more pro-U.S. Government in Central America than Honduras, 

I do not know what it is over time. 

We pulled the Peace Corps out of Honduras because it has the 

highest murder rate in the world. And so when we see budgets that 

are declining in this part of the world, it is not only—all the issues 

that the chairman mentioned are true. So many of the issues that 

we are wrestling with, they are right in our own front yard in the 

Americas. But we also have a little bit to do with this. 

I met with the Honduran Ambassador to the United States 

yesterday. In terms of their internal security situation, you know, 

perceptible reductions in U.S. consumers’ demand for drugs is the 

thing that would make them the safest. If we had a plant that was 

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thing about it. We would be demanded to do something about it. 

Our committees would demand that we do something about it. 

But it is U.S. demand for drugs that is hugely a part of the security situation, especially in Central America. So whether it is 

CARSI, whether it is your rule of law, project to help Mexico and 

criminal justice issues, whether it is this Partnership for Growth 

pilot that you are working on in El Salvador, and that is something 

where there is a budgetary plus. I was glad to see that, El Salvador 

and other countries. 

I just think before this committee and before the International 

Development Subcommittee, you know, I think you are going to 

hear a lot of questions about the Americas. 

We may be rebalancing toward Asia because of China. China is 

rebalancing toward the Americas, as you know, with their work in 

resource contracts and so much of what they are doing in the 

Americas. You know, they see it as an opportunity area. They see 

it as an area where they should be more deeply involved. 

I would venture to say, you know, it is probably hard to get 

transparent Chinese budgetary figures, but they have a development philosophy, too. And I would venture to say that their development philosophy, they see the Americas as a growth area for the 

Chinese development philosophy, and it is an area of decline for us. 

And I just think that it is something that we need to be very, very 

concerned about. 

And I suspect that there will be an awful lot of questions about 

that any time State, USAID, other agencies are before this 

committee. 

Dr. SHAH. Thank you. I appreciate those comments. I know they 

echo those of the chairman. 

The CHAIRMAN. And the chair is happy to have an ally in this. 

[Laughter.] 

Dr. SHAH. I will say in this context, we have worked very hard 

to have a dramatic investment in the CARSI Program to expand 

the Partnership for Growth to that region, and to enhance the public-private partnerships specifically for El Salvador, Guatemala, 

and Honduras, and even to establish this new program with the 

city of Los Angeles where we are not just taking the kind of technical strategies that have worked in that setting at crime reduction, but actually asking the specific individuals who worked to 

counter those specific gang organizations to go to Central America 

and work with counterparts that are facing, in some settings, the 

same gang organization. 

You are absolutely right that there is a very close and compelling 

tie to what happens in this country and citizen security in that 

region. It is also very clear that the fundamental outcome of the 

Partnership for Growth is that the No. 1 constraint to growth is 

citizen security. That is far and away No. 1, and that is why we 

are trying to do everything we can against those challenges. And 

we have also expanded our efforts to do this in a coordinated way 

with the military and with the mapping exercises that 

SOUTHCOM has really taken leadership on. 

We appreciate those comments, and I hear you, and I certainly 

hear the chairman as well. 

FOREI-43947 with DISTILLER

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The CHAIRMAN. Thank you. Let me just piggyback a moment so 

we can close the loop on this. I gave it to you in a long list of 

things, so I just want to mention specifically—on CARSI, how are 

you intending to use the additional funding for 2014? And in addition to what specifically are you using the additional funding for, 

what are we doing about helping or engaging the Central American 

governments in their fiscal and policy reforms that would be necessary to sustain these types of programs that were supported by 

AID? 

Dr. SHAH. Well, thank you, Senator. I have had the chance to 

visit and see some of these efforts in practice, and our funding goes 

to specific elements of CARSI. CARSI obviously also includes core 

State investments. But some of the things we have supported include mapping, community crime—mapping using new technologies 

and identification of crime rates, areas, hot spots, community crime 

prevention strategies that have borne out with real data that they 

have been far more effective than what those communities were 

trying before. 

We have been the lead partner within that program for some of 

the youth programs that reach at-risk youth and have engaged 

some American partners to help advance those efforts as well. And 

then we work in partnership to track both the international gang 

relationships and otherwise to be able to provide data and information to our partners in the region. Those are just some of the things 

that CARSI does overall, and we have one part of that program in 

terms of our responsibility. 

On the very good question of what are we doing on the fiscal policy side, while I know there are some activities to support that, I 

would rather get the right answer for you and send that out. 

The CHAIRMAN. I will look for that answer. So basically, is your 

answer that you are just plussing up the activities you are already 

pursuing under CARSI, or is there something new that you are 

doing with the additional money? 

Dr. SHAH. No. Well, I think the things that we believe have the 

most evidence of being really effective are the areas where we will 

focus the increased resources. And this mapping effort that has offered a lot of data and information has been very closely correlated 

to improving outcomes is one of the examples of that. 

The CHAIRMAN. Senator Murphy. 

Senator MURPHY. Thank you, Mr. Chairman. One additional 

question. I wanted to bring you back to Russia’s zone of influence 

again, talk about the Ukraine for a moment. 

You know, obviously a pivotal moment right now in the Ukraine 

as they are making some fundamental decision as to which they 

orient. It is not a choice for them necessarily, but there is certainly 

a lot of leverage that we have at our disposal to try to make their 

turn to the West slightly more attractive than a turn to the east. 

The Peace Corps, for instance, has one of its largest presence in the 

world in the Ukraine. We have had enormous success there. 

Can you just talk for a moment about the tools at our disposal 

at USAID over the next several years as we talk with Yanukovych 

and others about their opportunity to orient themselves toward 

Europe, to have greater partnership with the United States amidst 

obviously growing pressure Russia to look in a different direction. 

FOREI-43947 with DISTILLER

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What are the tools that we have at our disposal to try to help 

them make that decision? 

Dr. SHAH. I think we have a few. We have helped to expand the 

Peace Corps presence as one example. We have supported democratic governance and civil society programming and have been 

probably the lead international supporter, and thereby have some 

very longstanding relationships and partnerships with organizations in that community. And many of them have matriculated into 

government and have taken with them a capacity to work with us 

and partner with us. 

Traditionally, we have had a larger health investment in the 

Ukraine. Part of that was focused on the control of TB and helping 

them manage, in particular, multidrug resistant tuberculosis, 

which was more challenging. And more recently we are focused on 

establishing partnerships that can attract more private investment. 

We do not have the kind of resourcing to allow for sort of large 

sale infrastructure, but we also do not think that is what is 

required given their economic standing. It is more helping them 

with policy reforms, domestic administration, and attracting private investment through our partners, including OPIC and Ex-Im 

and some of the other U.S. agencies that can bring resources to 

bear. 

Senator MURPHY. Well, as you know, we are at a critical moment 

in terms of the decisions that are being made there, and I think 

you are right. At this point they are looking for opportunities for 

the United States to allow them to attract some private money that 

they right now do not have an availability to other than through 

partnerships with Russian industry. And I think you are along the 

right track. 

Thank you, Mr. Chairman. 

The CHAIRMAN. Thank you. Well, Mr. Administrator, thank you. 

You have exhibited a breadth and depth and scope of knowledge of 

your agency, and that is tremendously reassuring to the committee. 

We look forward to working with you on some of these issues that 

we think we can enhance. And as I visit abroad, I always like to 

stop by AID projects and see our men and women in action, and 

always impressed by them. 

With the thanks of the committee, the record will be remain open 

until Friday. 

The CHAIRMAN. And this hearing is adjourned. 

[Whereupon, at 11:58 a.m., the hearing was adjourned.] 

ADDITIONAL QUESTIONS AND ANSWERS SUBMITTED FOR THE RECORD

RESPONSES OF ADMINISTRATOR RAJIV SHAH TO QUESTIONS SUBMITTED

BY SENATOR ROBERT MENENDEZ

SYRIA

I understand that the United States has been the largest provider of humanitarian aid to Syria and I commend the administration on all it has done on this 

front. But given the scale and scope of the crisis and the exponential growth in the 

number of refugees, I believe we should be doing more and we should also be ensuring that we receive credit for the contributions we are making.

Question. Do you expect a dramatic increase in the level of support for Syrian 

humanitarian assistance over the next few months?

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Answer. For the past 2 years, the U.S. Government has continuously programmed 

humanitarian funds in Syria and the neighboring countries to respond to evolving 

needs on the ground, targeting any available opportunities to get assistance to people in need. Given the protracted conflict and continuously growing needs, the Syria 

response will remain one of the USG’s highest humanitarian priorities. USAID 

anticipates that emergency food requirements in Syria and neighboring countries 

will double by October, requiring a commensurate increase in support from the USG 

and other donors. For example, the U.N. World Food Programme (WFP) is currently 

reaching approximately 2 million people in Syria with emergency food assistance, 

with plans to expand distributions to 4 million people. USAID and the U.S. Department of State’s Bureau of Population, Refugees, and Migration (State/PRM) are in 

the process of programming additional funds, which will be announced be in the 

coming months.

Question. How can we ensure that we receive credit for all the contributions we 

are making? How do we balance the need to receive credit from the Syrian people, 

with the imperative of protecting aid providers by not labeling everything as ‘‘made 

in the USA?’’

Answer. Though recognition of U.S. humanitarian efforts inside Syria are severely 

constrained by safety and security concerns we are working to make our aid more 

visible. The U.S. Government requires NGO partners to brand our assistance unless 

doing so would imperil the lives of aid recipients and the humanitarian workers 

delivering assistance. In the majority of Syria it remains too dangerous for widescale branding activities. In areas where it is safe to do so, including opposition held 

areas in the north, we are able to inform local leaders and recipients about where 

the aid is coming from. 

We work with international organization partners to highlight U.S. Government 

support wherever possible. For example, nearly all of the bakeries receiving U.S. 

Government flour in Aleppo governorate are informed that it is U.S.-donated flour. 

A USG partner recently delivered heavy-duty plastic sheeting branded with the 

USAID logo to Atmeh camp in Idlib governorate. The plastic sheeting will be used 

to construct community structures in the camp, which houses more than 26,500 

IDPs. The USG continues to work with partners to evaluate appropriate opportunities to increase the visibility of USG assistance without endangering the lives of 

both partners and beneficiaries. 

Because wide-scale branding is not an option at this time, we are seeking to get 

the word out in other ways that do not undermine the operation: U.S. Government 

staff in D.C. regularly meet with the Syrian diaspora community to utilize its connections inside Syria and spread the message of USG support. We also continue to 

heavily engage with local, regional, and international media, both traditional and 

digital, to illustrate the extent to which USG humanitarian assistance is reaching 

a wide range of areas inside Syria. 

U.S. Government officials use every public opportunity to highlight our humanitarian assistance to the region, including speaking engagements, social media, and 

regional, national, and international media interviews.

Question. Should we be providing more of the humanitarian aid through the 

Syrian opposition as some have suggested? Or are you satisfied with the current 

approach of going primarily through the United Nations?

Answer. As policy, the USG does not channel humanitarian assistance through 

political organizations and institutions, such as the Syrian Coalition or the Syrian 

Arab Republic Government (SARG). To reach all populations in need, the USG and 

all other humanitarian donors must work with relief organizations that strictly 

adhere to the humanitarian principles of neutrality and impartiality of aid. This is 

particularly essential in a war zone, to ensure access to beneficiaries as well as the 

safety of beneficiaries and the relief workers who are delivering the aid. 

The USG continues to closely work with the Syrian Coalitions’ Assistance Coordination Unit (ACU) on humanitarian activities and is currently funding a humanitarian advisor for 3 months to improve the ACU’s capacity to better coordinate and 

manage the humanitarian response in Syria. 

While the USG is delivering approximately 56 percent of its assistance in Syria 

through U.N. agencies, the USG also provides a significant portion of funding to 

international NGOs that are delivering assistance through networks of local NGOs. 

The USG’s strategy is based on the ability of relief organizations, whether U.N. 

agency or NGO, to respond to needs quickly and effectively. 

To date, USG humanitarian assistance has reached all 14 governorates, including 

contested and opposition-controlled areas. The World Food Programme (WFP), 

which receives significant support from the USG, is working in coordination with 

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the Syrian Arab Red Crescent and its vast network of volunteers, as well as NGOs, 

to reach nearly 2 million people during each distribution cycle. In addition, USG 

support through international NGOs has reached more than 1 million people in 

some of the hardest hit areas of Syria. The USG will continue its funding strategy, 

while also working to identify potential new partners that can reach underassisted 

areas or respond to unmet needs. 

LATIN AMERICA GENERAL

Our international affairs budget should more accurately reflect the importance of 

relationships, opportunities, and challenges in our own hemisphere. Latin American 

and Caribbean nations are our neighbors, and our actions in the hemisphere have 

a direct, often magnified, impact at home.

Question. What are USAID’s objectives for foreign assistance in the region? How 

will reductions in funding affect USAID’s ability to achieve those objectives?

Answer. Impressive progress in the Latin America and Caribbean (LAC) region 

in the past several decades has enabled USAID to adjust its mission in the region 

away from providing direct assistance—like vaccinations and food aid—and toward 

strengthening the capacity of LAC governments, the private sector and civil society 

to propel their own development. 

We are prioritizing investments in four areas: (1) rebuilding Haiti through investments in agriculture, infrastructure, energy, health and economic growth; (2) reducing crime and violence—particularly among youth in Mexico, Central America, and 

the Caribbean—and reducing drug production in Colombia and Peru; (3) promoting 

democracy and protecting fundamental freedoms in Cuba and other countries where 

restrictions on press and civil society and flawed electoral processes continue, and 

in some cases worsen; and (4) reducing greenhouse gas emissions and adapting to 

the impacts of global climate change. 

To accelerate progress in these areas, we are embracing a new way of doing business by: (1) channeling more resources through local entities; (2) testing novel ways 

to help local governments generate revenues for development; (3) partnering with 

private companies (U.S., multinational, and local) to supplement our assistance, create durable local enterprises and deliver long-term development dividends; (4) opening USAID to innovators from LAC and the world in search of the most effective 

and efficient development solutions; and (5) tapping into the home-grown development expertise of LAC leaders like Brazil, Chile, Colombia, and Mexico. 

CUBA

I have long-supported a strong budget allocation for U.S. democracy promotion 

funding in Cuba. Our efforts on this score provide critical support to Cuba’s civil 

society such as access to communication technology, humanitarian assistance for the 

families of political prisoners, and training for independent journalists. It is essential that we uphold the historical funding level of $20 million to demonstrate our 

strong support in Cuba for democracy, freedom of expression and assembly, and 

human rights. This year’s request is only $15 million.

Question. What are the reasons for these cuts?

Answer. The U.S. commitment to human rights and democracy in Cuba remains 

strong. We will continue our robust program providing humanitarian support to 

political prisoners and their families, building civil society and expanding democratic space, and facilitating the information flow in, out, and within the island. The FY14 request for $15M is based on our assessment of needs on the ground, 

and on-island and off-island capacity to carry out programs. In addition, the combined pipeline (FY09 to FY12) for Department of State and USAID implementers 

is about $44 million, sufficient funding ($74 million total) to carry out the purposes 

of the program over the next 3 years. 

MEXICO

I understand that the nature of our assistance delivery to Mexico has changed. 

Whereas in the early stages of the Merida Initiative, we delivered a good deal of 

expensive equipment, we are now working to support the Mexican Government’s 

efforts to strengthen institutions. However, I want to make certain that—as we 

reduce our assistance budget to Mexico by almost 40 percent—we are not constraining our ability to flexibly respond to any strategy shifts that may come down 

under the new Mexican administration.

Question. Do we have the flexibility to respond to policy shifts that may emerge 

under President Pen ̃ a Nieto? USAID is also supporting municipal level crime preFOREI-43947 with DISTILLER

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vention programs in Mexico for the first time. What lessons can be learned from 

similar efforts that have been going on in Central America for several years?

Answer. Yes, USAID has the flexibility to respond to potential policy shifts from 

the new Pen ̃ a Nieto administration. In fact, the Pen ̃ a Nieto administration 

expressed support for USAID’s primary areas of Merida Initiative programming—

criminal justice reform, crime and violence prevention, and human rights. Closely 

aligned with the priorities of the new administration, USAID continues to emphasize crime prevention and community resiliency under Pillar IV of the Merida Initiative. While the geographic and technical focus may change as the Government of 

Mexico (GOM) develops its new approach to crime prevention, USAID and our counterparts are currently working together to align strategic priorities and activities. 

USAID has incorporated lessons learned from crime prevention programs in Central America to its programming in Mexico, where USAID supports the GOM and 

local communities to plan and implement community development strategies aimed 

at reducing crime and violence and providing youth with alternatives to crime. The 

Pillar IV strategy and current programs relied heavily on lessons learned from Central America, in particular the need to improve coordination and planning at the 

local level through the development of municipal crime prevention committees and 

plans. USAID is also incorporating experience in crime data collection and analyses, 

as well as in establishing alliances with the private sector to reduce crime and 

violence. 

COLOMBIA

Colombia is working toward implementation of some ambitious but necessary 

reforms and I am glad that USAID is supporting them in these efforts. The Land 

Restitution and Victims Law, in particular, is essential for sustainable peace in Colombia. Colombia is taking on a greater share of the counternarcotics burden. I am 

happy to see that. I understand, also, that Colombia is increasingly involved in 

training and assistance delivery elsewhere in Latin America. Years of U.S. training 

has prepared Colombian security officials for the task of assisting their neighbors—

a sound U.S. investment. Colombia and the FARC are in the middle of a peace process right now. We all long to see lasting peace in Colombia and are hopeful for an 

accord.

Question. Will this budget request allow us to respond if the Colombians call on 

us for assistance? For help implementing a peace accord?

Answer. USAID is supporting many Government of Colombia (GOC) efforts that 

lay the groundwork for peace. Our current programs are focused on bringing state 

presence and services to marginalized, high-conflict areas of the country; supporting 

victims and land restitution; and promoting access to justice. Many of these programs directly support GOC initiatives related to the five agenda items (rural development, guarantee of functional political opposition and civic participation, end of 

conflict, drug trafficking, and rights of victims) to be negotiated by the FARC and 

Colombian Government as part of a possible peace accord. 

Without knowing what the GOC may or may not request in terms of additional 

or modified support in light of a possible peace agreement, we have worked to 

increase flexibility in our programs in order to quickly adjust our assistance if need 

be. 

CENTRAL AMERICA

CARSI is a top priority. I am glad to see the President’s request includes an addition $27 million for security in Central America. However, I believe our efforts in 

this region could benefit from more robust assistance levels. Central American 

nations face grave challenges—Honduras’ homicide rate is among the highest in the 

world. The U.S. Government is partnering with governments in Central America to 

prevent violence, strengthen state institutions, combat narcotics trafficking, and 

increase citizen security. Failure to adequately fund these efforts will result in continued high levels of crime and violence, and an inability to dismantle criminal organizations. U.S. investments in the region expand markets for American businesses 

and connect high quality Latin American goods to the U.S. market. Stable Central 

American countries diminish the push factors for illegal immigration.

Question. To what extent are the governments of Central America implementing 

fiscal and policy reforms necessary to sustain and replicate programs currently supported by USAID? How does USAID intend to use the additional CARSI funding 

requested for FY 2014? Is the additional funding sufficient to meet the challenges 

we face in Central America?

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Answer. Central American nations are making progress toward raising more of 

their own resources to improve the rule of law and address the root causes of crime 

and insecurity in their countries. 

For example, El Salvador has improved its tax collection system, which should 

generate additional funding for citizen safety initiatives. Similarly, Honduras passed 

an emergency ‘‘security tax’’ measure in June 2012 that established a temporary 

levy on a range of financial transactions with the proceeds set to support security 

sector needs. 

In addition to continuing to implement programs for at-risk youth, municipal 

crime prevention, and rule of law, USAID intends to use additional FY14 CARSI 

funding to further target the most vulnerable, at-risk populations. 

For example, USAID is partnering with the city of Los Angeles to adapt a tool 

designed to identify those youth most at risk of joining a gang. Using this tool, 

USAID will provide mentoring and family support services on those most vulnerable 

to joining gangs and criminal activity. 

Further, USAID will continue to pursue public-private partnerships on social prevention to engage local actors and maximize private sector contributions. For example, USAID recently signed a partnership with five Salvadorian foundations to combat citizen insecurity and strengthen municipal responses to crime and violence in 

50 dangerous communities in El Salvador. 

Finally, USAID works actively to incorporate best practices and lessons learned 

in other parts of the region and world into our citizen security portfolio. FY14 funding will help USAID develop and nurture best practices among citizen security technical experts and practitioners from various cities across the Western Hemisphere. 

CARSI assistance is meant to supplement—not supplant—the need for host 

nations to develop, fund, and implement national strategies to reverse their deteriorating citizen safety environments. 

USAID has effectively coordinated our programming with other donors and multilateral and international financial institutions to reduce duplicative programs and 

identify leveraging opportunities to enhance the impact of our funding. Together 

with other donors and the host country governments, the nearly $132 million appropriated for USAID-specific CARSI programs in Central America from FY08 through 

FY12 has been able to achieve results in targeted municipalities and provide the 

host countries with blueprints for successful interventions to address the underlying 

drivers of crime and violence. 

CARIBBEAN

The Caribbean is a transshipment point for drugs en route to the United States. 

The Caribbean Basin Security Initiative aims to improve local capacity to combat 

the flow of illicit drugs. However, I worry that we are not doing enough. The sequester is reducing our military’s presence in the Caribbean, certain interagency interdiction programs were grounded for off the coast of Central America for other reasons, and this budget request, instead of compensating for these losses, decreases 

funding for Caribbean security.

Question. Are our development and crime prevention activities in the hemisphere 

well-coordinated, strategic, and forward-looking?

Answer. Since 2010, various USG agencies, including USAID and the State 

Department, have been jointly implementing Caribbean Basin Security Initiative 

(CBSI) programs to reduce illicit trafficking, increase citizen security and address 

the causes of crime and violence. In an interagency effort, we have drawn on each 

other’s comparative advantage to provide assistance on maritime and aerial security 

cooperation, law enforcement capacity building, border and port security and firearms interdiction, justice sector reform, and crime prevention and at-risk youth. In 

addition, the Department of State convenes an Inter-Agency Working Group including representatives from USAID, DHS, DOJ, ATF, DEA, OSD, SOUTHCOM, 

NORTHCOM, and USCG to discuss CBSI programs and related strategies. 

USAID has taken a strategic and coordinated approach to addressing the security 

and development needs in Latin America and the Caribbean. The CBSI programs 

complement the Central America Regional Security Initiative (CARSI) and the 

Merida Initiative in Mexico. As trafficking activities are being prevented in one 

area, traffickers seek alternative routes, so there is a need to preemptively deter 

trafficking activities from taking root in other areas. One mechanism to help ensure 

that these initiatives are effectively coordinated is the Executive Committee for citizen security in the Western Hemisphere. This interagency group includes key interagency stakeholders in each of the initiatives and brings them together periodically 

to discuss lessons learned, opportunities for enhanced implementation, and opportunities for coordination across the initiatives. 

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USAID missions in El Salvador, Guatemala, Honduras, Jamaica, the Dominican 

Republic, and Barbados and the Eastern Caribbean are developing strategies that 

include citizen security as a key focal point for the planning of long-term development activities. The idea of cross-sectoral responses to the security environment is 

woven throughout and integrated into these programs with the goal of improving 

citizen security. For example, at-risk youth who participate in USAID’s workforce 

development programs benefit from life skills and vocational training that are interconnected with broader health programs. All of these activities work in concert to 

ensure that youth who are at risk of engaging in criminal activities are receiving 

critical services and have opportunities to engage productively in society. 

AFGHANISTAN/PAKISTAN

Question. I took my first trip as chairman to Afghanistan and Pakistan because 

I believe this region remains critical to our national security interests. The region 

is in the midst of an economic, security, and political transition. During my trip 

there, I spent time with our USAID missions and conducted field visits to review 

some of our aid programs. I came away impressed with the dedication and drive of 

our USAID teams there. But I also had concerns about how well we can conduct 

oversight in the field, given the security conditions.

♦ How are we right-sizing our aid presence in both countries to reflect our diminishing footprint, security concerns, and implementation challenges we face? 

What steps are we taking to ensure that our aid is ‘‘necessary, achievable, and 

sustainable,’’ steps this committee called for in its June 2011 oversight report?

Our relationship with Pakistan has been rocky these past couple of years, despite 

efforts to build a strategic partnership based on mutual interests and trust. Efforts 

such as the historic Kerry-Lugar-Berman aid legislation have faced an array of 

political and implementation problems.

♦ What is your vision for improving this relationship, and how can Congress best 

support this effort given all the challenges we face?

Answer. Afghanistan: USAID has identified three priority areas for continued 

investment leading up to and beyond transition: sustainable, inclusive economic 

growth; credible, effective, and legitimate governance; and consolidation of gains, 

particularly in health, education, and women’s rights. All programming will reflect 

the four principles of Results, Partnership, Sustainability, and Accountability, and 

USAID has adjusted its operating model to facilitate an Afghan-led and hence, more 

sustainable transition:

• First, USAID has increased the percentage of our programming provided onbudget to the Afghan Government, with an emphasis on building Afghan capacity to effectively manage and oversee this assistance. We will also continue to 

employ multilateral funds like the Afghanistan Reconstruction Trust Fund to 

consolidate programming and share monitoring responsibilities with other 

donors and the Afghan Government. 

• Second, USAID is focusing more of its assistance on Regional Economic Zones 

(REZs) that cover major population centers and are linked with regional trade 

routes to generate more investment opportunities. 

• Third, USAID is expanding the number and type of tools in our monitoring 

capacity to ensure we have access to all appropriate techniques necessary to 

provide continued oversight of our projects in the field, even as we decrease 

field staff and have potentially less direct hire access to project sites. This remote monitoring program will employ a number of methods in a multilayered 

approach to obtaining necessary information, including expanded partner 

reporting, remote sensing with aerial and satellite imagery where applicable, 

third-party monitors, community-based reporting, and collection/sharing of data 

gathered by other donors. 

• Finally, in keeping with the principles of Busan, the New Deal for Fragile 

States, and the Tokyo Mutual Accountability Framework, USAID is transforming its investment approach in Afghanistan to one of mutual accountability, 

working in close partnership with the Afghan Government and its people and 

closely monitoring progress on reform. In July, we announced the creation of an 

incentive mechanism that will provide up to $175 million of current funding for 

the achievement of specific economic and democratic reforms before those funds 

are made available to the Afghan Government.

In addition to adjustments in USAID’s operating model in preparation for transition, USAID has incorporated sustainability analysis into its project design process 

as part of the Administrator’s Sustainability Guidance issued in 2011. Each project 

must develop a thorough sustainability plan during the design phase. To ensure 

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that current and planned projects are consistent with the Sustainability Guidance, 

USAID also conducts internal portfolio reviews twice a year and once a year with 

the Afghan Government.

Answer. Pakistan: USAID agrees that programs in Pakistan must have the ownership of the Pakistanis to be fully successful and sustainable. USAID constantly 

monitors and evaluates our activities in Pakistan to ensure resources are used strategically and appropriately to achieve program goals and sustainability. 

In 2011, USAID and the State Department jointly reviewed the program portfolio, 

streamlined the number of programs, and narrowed the focus to five priority sectors 

that represent mutual U.S. Government and Government of Pakistan priorities: 

energy, economic growth and agriculture, stabilization, education, and health. This 

more-focused portfolio of activities ensures that our investment:

• Advances U.S. foreign policy objectives; • Defines ambitious, measurable, and achievable results and manages to these 

results; • Builds local capacity in Pakistani governmental and nongovernmental organizations; • Creates a network of public-private partnerships that makes gain sustainable; • Safeguards U.S. Government resources; and, • Communicates impact to a broad Pakistani audience to ensure visibility and 

awareness of our efforts.

USAID takes a multilayered approach to monitoring and evaluation in Pakistan, 

to include a missionwide third party contract for evaluations to ensure robust program management. Also, the number of locally employed staff has increased over 

the past year, although challenges continue. For example, earlier this year, USAID 

made the decision to relocate local staff operating out of our Peshawar office to 

Islamabad in response to the deteriorating security situation in Peshawar. Nevertheless, we believe we are able to continue effective monitoring of our projects in 

FATA using third parties, aerial and satellite imagery, and other methods. 

USAID REFORM

USAID Reform USAID went through a period of 20 years of decline in personnel, 

dispersion of development responsibilities to other agencies such as the Millennium 

Challenge Corporation (MCC) and the State Department AIDS Coordinator’s office, 

and in 2006, a loss of budgeting and policy capabilities.

Question. How would you assess your agency’s progress in restoring its capacities 

under USAID Forward and the Development Leadership Initiative? What further 

reforms are you planning on making? What is the end goal of these efforts?

Answer. USAID Forward: USAID Forward, initiated in 2009, is designed to 

change the way the Agency does business—with new partnerships, an emphasis on 

innovation, and a clear focus on results. 

The USAID Forward reform agenda identifies seven areas of concentration. They 

are: (1) implementation and procurement reform; (2) talent management; (3) 

rebuilding policy capacity; (4) strengthening monitoring and evaluation; (5) rebuilding budget management; (6) science and technology; and (7) innovation. 

With these areas of priorities foremost, USAID established the Bureau of Policy, 

Planning and Learning to drive policy, and to restore and deepen the discipline of 

development across the Agency. Concurrently, USAID reestablished Agency-level 

budget and resource planning capability with the creation of the Office of Budget 

and Resource Management (BRM). USAID is responsible for the development and 

humanitarian assistance budget for USAID-managed programs, which is annually 

reviewed by the State Department and OMB. BRM has been instrumental in 

USAID’s efforts to focus and concentrate development and humanitarian assistance 

in a difficult budget environment and strengthen budget capacity within all levels 

of USAID. 

A cornerstone of USAID Forward has been the reestablishment of USAID strategic planning, including 5-year, country/regional based strategic plans, and project 

design capabilities. Under USAID Forward, the Agency established seven policies 

(ranging from education to gender equality to resilience) to support an evidencebased reform process and tighten and align Agency planning, budgeting, and reporting around the globe. 

To date, USAID has conducted 21 design and 18 strategic planning workshops in 

the field. USAID missions are carrying out intensive and data-driven strategic planning. By the end of 2012, 20 USAID missions have approved strategic plans, Country Regional Development Cooperation Strategies. A total of 70 USAID missions are 

scheduled to complete their strategic plans by the end of the 2014. To better measFOREI-43947 with DISTILLER

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ure the effectiveness of programs and help to inform the next phase of programming, USAID field missions completed 186 quality program evaluations. These are 

driving USAID’s evidence-based decisions. 

The Agency has built several global platforms to capture results and leverage this 

knowledge so that it is shared transparently to further support and catalyze 

Agencywide learning capacities. Last, USAID has put in place structures to foster 

innovative development solutions (e.g., Grand Challenges, competitions, university 

partnerships) that create opportunities to connect staff to leading innovators in the 

private sector and academia. This will fortify new, effective partnerships across the 

globe to transform our collective efforts and help solve the most difficult development issues of today. 

Taken together, these reforms are forming the foundation of a new model for 

development and will continue to define the way we work. It is a model that recognizes that the problems we face are solvable, but that solving them requires continued commitment and partnerships across the private sector, with NGOs, 

governants, universities, and others. Our ultimate goal remains to work ourselves 

out of business and replace our efforts with those of responsible institutions, vibrant 

private sectors, and thriving civil societies.

The Development Leadership Initiative: The Development Leadership Initiative 

(DLI) program was launched to increase USAID’s total Foreign Service staffing by 

1,200 with particular emphasis on rebuilding the technical cadre of agriculture, education, engineers, and economists, and expanding language capabilities and USAID’s 

overseas presence. USAID’s on-board Foreign Service Officer (FSO) career staff at 

the beginning of FY08 was 1,029, with about 640 of these deployed overseas. Cumulatively, with DLI funding from FY08 to FY10, USAID hired 720 new FSOs over 

attrition, averaging one new group of FSOs approximately every 8 weeks. FY11 

funding supported an additional 100 new FSOs, bringing the total DLI hiring to 820 

since its inception. No funds were appropriated for additional increases in FSO staff 

in FY12.

Recruitment and Hiring: DLI hiring is designed to rebuild USAID’s technical 

capabilities as well as provide resources to enhance the Agency’s stewardship functions. USAID has had a broad and rich applicant pool since its inception. Between 

2008 and 2011, USAID received over 35,000 applications. The selection process is 

rigorous and highly competitive and approximately 15 percent of basically qualified 

applicants are invited for the three-stage interview process. Approximately 4 percent 

of applicants receive offers. While not required for all positions, most require a master’s degree as a minimum qualification. On average, selected applicants have 5 to 

7 years of prior international experience before joining USAID; most speak at least 

one other language; and about 28 percent are former Peace Corps Volunteers or 

staff. 

Individuals hired through the DLI program now constitute 45 percent of the 

USAID Foreign Service. With a current cadre of 1,790 career FSOs, USAID has now 

reached almost 70 percent of its original hiring target. 

Continued reform efforts are planned to build the capacity among the staff hired 

under the DLI program. These officers will need to have a strong foundation in core 

technical competencies relevant to their functions in the Agency to implement effective projects and to elevate development as an evidence-based discipline. Efforts are 

also underway to strengthen the alignment of staff globally with mission needs to 

advance USAID Forward reforms. 

GLOBAL HEALTH PROGRAMS

U.S. global health programs are literally saving millions of lives. Over 5 million 

people with HIV are on treatment. We are well on the way to cutting malaria 

deaths in half in Africa by 2015. And USAID is rightly focused on preventing the 

preventable, namely helping countries save many of the nearly 7 million children 

under 5 who die every year, over 40 percent within that first vulnerable month of 

life. But, as effective as these programs are, efforts like the Global Health Initiative 

have struggled with interagency differences and tensions.

Question. Please explain to us the current status of the Global Health Initiative. 

How can USAID, CDC, and PEPFAR most effectively work together while each 

brings their comparative advantage to bear on some of the world’s most pressing 

problems?

Answer. Leadership of USAID, CDC, and the Office of the Global AIDS Coordinator continue to meet on a regular basis to discuss policy issues related to our collective work in the field. In addition, there are technical committees that address 

cross-cutting issues, such as monitoring and evaluation, which are structured 

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around the comparative advantages of the three agencies to produce the greatest 

results. Over 40 USG-supported countries have written strategies for operationalizing the Global Health Initiative and in-country teams work together to achieve the 

goals outlined in these strategies. 

FOOD AID REFORM AND FOOD SECURITY

The administration has proposed some dramatic changes to the way we provide 

emergency food assistance.

Question. While there are many reforms proposed for food aid, the budget still 

continues to draw a pretty bright line between emergency assistance and programs 

to relieve chronic food insecurity. Is this something of a false dichotomy? Could we 

do more to promote resilience while helping address emergencies?

Answer. Emergency food assistance is provided first and foremost to save lives. 

Emergency resources can play a significant role in laying the foundation for greater 

resilience. The flexibility provided by having a range of tools for emergency response 

(cash, vouchers, or in-kind) greatly increases our ability to reach people before their 

ability to recover has been eroded. If a household receives assistance before losing 

all productive assets (thereby losing any source of future income), it is much more 

likely to be able to recover and move forward. 

Emergency assistance is rarely enough to ensure the future resilience of vulnerable households. By layering, sequencing, and integrating our programming to build 

resilience, relieve chronic food insecurity, and help vulnerable populations recover 

from recurrent shocks and stresses. USAID’s Annual Program Statement amendment issued at the height of the Sahel food crisis last year reflects just that—by 

focusing on resilience building across the Sahel, giving priority to emergency food 

assistance applications that supported recovery activities targeting the most vulnerable populations. 

The emergence of resilience as an organizing concept helps bridge the historical 

divide between humanitarian and development programming. Emergency assistance, including both relief and recovery programs, provides a foundation upon which 

resilience and development investments can build, particularly in places such as 

Northern Kenya where emergency and recovery assistance is required year after 

year. There, new resilience programs have been designed to anticipate and incorporate emergency resources as a proactive way of protecting social and economic 

gains in in the face of inevitable droughts and other shocks in the future. Over time, 

these programs aim to sustainably reduce humanitarian assistance needs—building 

community, local and national capacities to manage through drought without 

humanitarian crisis. 

The goal of all USAID food assistance programming is to eventually eliminate the 

need for food assistance. USAID expects that its funds, whether emergency or development, will be used in complementary ways. 

There is inherent complementarity between title II nonemergency programs—

which aim to provide a ‘‘hand-up’’ to particularly vulnerable households and communities, and Feed the Future’s (FTF) agriculture programs—which help countries and 

communities use agriculture to ‘‘move out’’ of poverty. Real progress is being made 

to fully leverage this complementarity. For example, in Bangladesh and Guatemala, 

new FTF projects are completely or partially colocated with title II nonemergency 

programs that are targeting the more vulnerable in the region with foundational 

support to improve their health and food security. In some cases, FTF is using the 

same international and local partners as Food for Peace (FFP). In these cases title 

II programs now can aim to ‘‘graduate’’ vulnerable but viable households who can 

benefit from value chain interventions being implemented by FTF. In several other 

countries, USAID has taken a ‘‘division of labor’’ approach, targeting agriculture 

development assistance resources in higher productivity areas, and title II development programs in more food insecure, disaster-prone areas (e.g., Haiti and Uganda). 

The aim in these countries is to ramp up agricultural productivity where potential 

is greatest, while building resilience and increasing economic opportunity in crisisprone areas to lay the foundations for sustainable growth.

Question. Under your leadership, USAID has emphasized its identity as a learning organization. You have worked on the challenges of food security for a number 

of years. What have you learned from Feed the Future (FTF) and from your efforts 

to promote food aid reform? What has surprised you?

Answer. FTF and Food Aid Reform are both examples of the integrated and innovative approaches that USAID and the U.S. Government as a whole employ to 

address the complex challenges facing the world. Natural disasters are becoming 

more frequent, resulting in greater shocks and threats to food security worldwide. 

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USAID has seen firsthand how greater flexibility in food assistance programming 

can help us save lives in places where traditional food aid cannot go. Our FFP 

teams have put together smart, creative solutions to meet urgent needs in some of 

the toughest emergencies globally, and with greater flexibility, they can do even 

more. This year, in particular, we have committed a large portion of our funding available for flexible use to respond to the crisis in Syria. That means we do not have 

the flexibility to reach tens of thousands of children in places like Somalia, Kenya, 

Pakistan, and the Democratic Republic of Congo. 

FTF coordinates closely with FFP. In general, FFP food aid programs are community-based programs targeted to very poor or extremely poor households—‘‘the poorest of the poor.’’ Many of these households depend on agriculture for livelihoods—

either from farming their own land or working on someone else’s land. We have 

learned that many of these households are often unable to meet their family’s basic 

food and nonfood needs for 12 months of the year. Constraints, such as limited land 

size and labor availability, reliance on less productive technologies and practices, 

and poor access to markets and inputs, make it very difficult for these communities 

and households to break out of poverty. FFP programs work at a local level, providing a safety net for these extremely vulnerable households and have a proven 

success record in many underserved communities around the world. Meanwhile, 

many FTF programs focus on value chains and aim to address constraints to agricultural productivity both within targeted geographic areas and, in terms of policy, 

at a national level. For example, if a lack of access to fertilizer and improved seed 

is a significant constraint to productivity, FTF engages the host government and 

other interested partners to identify key challenges and develop solutions. 

As a result, FTF and FFP have learned to work in tandem to allow for an 

expanded focus on the resilience of vulnerable communities to the shocks that 

exacerbate food insecurity. For example, in order to combat the recent crises in the 

Horn of Africa and the Sahel, FTF programs include both longer term investments 

like increasing the commercial availability of climate-resilient crops and reducing 

trade and transport barriers, as well as Community Development Funds (CDF). 

CDF plays a catalytic role in bridging humanitarian and development assistance. 

CDF investments fund community-based interventions aimed at increasing the economic and nutritional resilience of the rural poor and accelerating their participation in economic growth. These programs bridge humanitarian and development 

objectives through expanded support for productive rural safety nets, livelihood 

diversification, microfinance and savings, and other programs that reduce vulnerability to short-term production, income, and market disruptions. 

VIOLENT EXTREMISM

Question. In 2011, USAID came out with a policy regarding the development 

response to violent extremism and insurgency.

♦ To what extent are you now able to measure the effectiveness of programming 

that targets drivers of violent extremism? 

♦ What are some successful examples of USAID’s work in countering violent 

extremism and what have been some key lessons learned?

Answer. To support our monitoring and evaluation (M&E) learning for countering 

violent extremism (CVE), USAID commissioned a review of program monitoring and 

reporting systems that track progress in addressing violent extremism and insurgency (VE/I). The report, which reviewed M&E systems across a number of countries including Iraq, Kenya, the Sahel, Afghanistan, Pakistan, and Yemen, provided 

a series of recommendations for the Agency’s VE/I Steering Committee as part of 

a larger endeavor to produce an operational guide and/or field handbook to assist 

USAID practitioners. The report concluded that indicators developed for USAID 

CVE programs have shown steady improvement and increasing sophistication over 

the period 2006 to 2012. Though measuring the effectiveness of programming in 

insecure environments is often costly and burdensome, USAID’s experience and expertise in this area has improved dramatically. Our impact evaluation techniques 

now include randomized control trials, baseline surveys, household surveys, mobile 

technology, and focus group discussions among others. In global forums, USAID has 

been identified as an early leader in developing approaches for CVE program 

measurement. 

Evidence shows that drivers of extremism are generally related to the enabling 

environment (e.g., poorly governed areas and weak security services), pull factors 

(i.e., social networks, group dynamics, and existence of radical institutions), and 

push factors (i.e., societal discrimination, economic exclusion, and frustrated expectations). USAID CVE programming is designed to mitigate those factors. Therefore, 

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measuring the effectiveness of our programming often involves measuring the 

change in community perceptions vis-a-vis those drivers. In this way, programs are 

developing more systematic approaches to credibly document progress and impact, 

beyond just anecdotal evidence. 

Typical CVE programming focuses on livelihoods, governance and civic participation, functioning state services, government legitimacy, security, youth engagement, 

attitudes of tolerance and moderation, among others. Each of those programs will 

have tailored indicators to measure if they reached the desired impact and, by 

proxy, mitigated the drivers to radicalization and violence. 

Investments in M&E at USAID have increased significantly, and indicators of 

progress have shifted toward more complex, abstract, and meaningful concepts like 

youth empowerment, community outlook for the future, attitudes toward violence, 

and stabilization. Indicator sets are more likely to capture citizen experience, behavior, and perception as well as on-the-ground reality. There is a recognition that 

citizen perception can be volatile in uncertain, high-risk environments and that 

much-surveyed populations are likely to deliver set responses to frequently asked 

questions. Much more effort is being invested in trying to capture concepts that are 

difficult to measure and may have indirect causal links with preventing extremist 

recruitment, such as the provision of justice (believed to be a vital factor in stability 

and resiliency in Pakistan and Afghanistan). In these M&E efforts, USAID collaborates with other agencies, such as the Department of Defense, in sharing indicators 

and data. 

USAID programs incorporate a mixed-methods approach to data collection, which 

allows M&E specialists to validate or cross-check the reliability of data from any 

given source and which also affords richer and more nuanced information for learning than reliance on any one quantitative or qualitative method. 

In Pakistan, USAID’s Karachi Youth Initiative and Youth in Southern Punjab 

programs were developed in 2012 to enable the U.S. Government to respond to the 

massive amounts of at-risk youth in areas vulnerable to recruitment by violent 

extremist groups. Covering specific geographic neighborhoods and regions, USAID’s 

Office of Transition Initiatives in the Bureau for Democracy, Conflict, and Humanitarian Assistance is developing an innovative system to measure whether the 

desired outcomes of each activity are achieved. Utilizing its independent monitoring 

unit (IMU), USAID is surveying the participants of each activity using relevant portions of a standardized ‘‘question bank.’’ Comparing before and after responses, 

USAID aims to determine whether participants’ perceptions, attitudes, and beliefs 

have changed during the course of the activity, as well as whether any intended 

developmental outcomes were achieved. By using a standardized set of questions, 

USAID will be able to determine which types of activities are more effective at 

yielding the desired outcomes. In addition, participants will be interviewed 6 and 

12 months following project completion to determine whether there are any long 

lasting effects to activities there. 

In Karachi and southern Punjab USAID has helped lead interagency efforts to 

pilot small activities at the community level in order to test out a variety of ways 

to target neighborhoods and communities. Some of these activities support vocational training, youth clubs, leadership conferences, sport tournaments, schools. All 

activities seek opportunities for ways to disseminate ideas of peace, tolerance, and 

positive relations within the community. In both Karachi and southern Punjab, the 

drivers of violent extremism are manifold and vary widely. In Karachi, the neighborhood of Lyari is plagued with gang violence whereas violence in the Sultanabad 

neighborhood adjacent to the U.S. consulate is driven primarily by religious extremism. There is no ‘‘one size fits all’’ approach that would be effective across the 

country so interventions must continually adapt to the changing local dynamics. 

USAID’s Kenya Transition Initiative in Eastleigh (KTI–E) was established in 

August 2011 to enable at-risk youth to reject extremism, which has become a growing threat to Kenya’s stability. The Partner Performance Management Plan (PPMP) 

was developed to clarify expectations, ensure alignment with program goals and 

effectively use current program information. Indicators of the PPMP were selected 

based on KTI–E’s overall strategic approach while assessing the main activities of 

the project. By assigning indicators at each level of the Results Framework, KTI–

E is able to monitor whether the developmental hypothesis is being achieved. Each 

of KTI–E’s activities is assessed and analyzed at multiple stages including at the 

concept phase, during implementation, and at activity closeout. 

KTI–E has focused on supporting moderate views and nonviolence amongst youth. 

Areas of action have included sponsoring public debates on issues related to extremism, interfaith dialogue, training for youth in financial literacy and entrepreneurship, support for local government townhall style meetings, and support to the Ministry of Youth to bridge the gaps in services for Somali youth. 

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One set of activities supported ‘‘Weekly Youth Debates’’ implemented by the 

Nabad Doon (Peace Seeking) Youth Alliance. The grantee held weekly debates 

among Somali youth in which participants discussed issues related to extremism 

facing youth in Eastleigh. This created a constructive and peaceful environment for 

youth to express themselves on sensitive topics. Each debate had between 180 to 

200 attendees and one debate was televised on the ‘‘Somali’’ television channel. 

Building on the success of the first two debate activities, KTI–E supported a grantee 

to expand an existing Web site to carry out an enhanced interactive platform engaging youth in positive online activities that reject extremism. Through these activities, KTI–E has found that participants involved with the youth debates have been 

highly engaged in their communities, particularly with advocating against violent 

extremism. 

SUDAN

Question. Sudan today is at a crossroads, not so much in terms of its relationship 

with South Sudan but in terms of its own future. Its economy is in dire straits. It 

is waging war in South Kordofan, Blue Nile, and Darfur. And, as in many countries, 

its youth are increasingly willing to take to the streets to announce that the status 

quo is no longer acceptable. There are those who look at the operating environment 

in Sudan and argue that we should not have a full USAID mission until we can 

have full-scale development programs. I look at Sudan and think the opposite, as 

long as security assessments permit. We have massive humanitarian programs 

there that demand oversight. We want to find ways to help the Sudanese people 

have free and fair elections and hold their government accountable. We want to find 

ways to help bring peace to Sudan and promote good economic as well as political 

relations with Sudan.

♦ What is your vision for the USAID mission in Khartoum, including plans for 

staffing and how to pursue democracy and governance goals?

Answer. USAID is committed to a partnership with the Sudanese people and to 

ongoing development programming and humanitarian assistance for conflict-affected 

communities. We are working to increase the engagement and participation of citizens in Sudan’s governance and vision for its future, and to prevent the escalation 

of local conflicts in flashpoint areas, strengthen the foundations for peace in Darfur, 

and enhance Sudan-South Sudan cross-border dialogue. USAID operates under 

multiple layers of executive and legislative restrictions that limit the extent of our 

engagement. 

Since the period leading up to the historic January 2011 referendum on self-determination for southern Sudan and the subsequent independence of South Sudan, the 

international community, including the United States, has seen an increasingly 

restrictive and difficult operating environment in Sudan. The scope of USAID’s programs has diminished since the Sudan mission reopened in 2006 to support implementation of the 2005 Comprehensive Peace Agreement (CPA). 

Despite this challenge, USAID is supporting efforts among the Sudanese people 

to raise their voices in the public sphere and engage with the government in constructive ways. For example, USAID supports civic participation through consultations in Khartoum on the development and adoption of a permanent constitution, 

which was mandated by the CPA and committed to by President Bashir. Though 

the process has been slow and our assistance has been limited in scope, USAID has 

partnered with respected Sudanese partners, such as Ahfad University for Women, 

to conduct open discussions about constitutional issues. 

Sudan is still plagued by internal conflict of varying severity throughout the country’s peripheral areas, as well as simmering tensions between Sudan and South 

Sudan that have continued since the independence of South Sudan. In response, 

USAID is helping to strengthen Sudanese NGO and civil society capacity to address 

the causes and consequences of political conflict, violence, and instability. In addition, recognizing the importance of women and youth in Sudanese society, USAID 

consistently looks for ways to increase their capacity to engage in peace-building 

and strengthen civil society at local and national levels. For example, USAID has 

supported training for culturally influential women artists (called Hakamat) from 

Southern Kordofan and Darfur to become peace activists. A USAID grantee, the 

Human Security Initiative (MAMAN), has worked with these female artists to 

spread messages of peaceful coexistence and tolerance in their communities. In addition, USAID is committed to building the capacity of youth and civil society organizations nationwide to more effectively represent the interests and preferences of citizens. USAID is also supporting health clinics, schools, and water yards for livestock 

in the disputed Abyei Area to engage all communities in the area and to help reduce 

competition and potential conflict over scarce water sources. 

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Despite significant humanitarian needs in Sudan, humanitarian space has also 

been steadily shrinking further over time, with restrictions in Darfur broadened to 

other areas of Sudan, most recently in Blue Nile State and Southern Kordofan 

State. The recently issued Sudanese Directive on Humanitarian Assistance codifies 

restrictions on access and operations that USAID and its implementing partners 

have faced for many years. These policies and procedures severely constrain 

USAID’s ability to fund and ensure effective implementation of assistance programs. 

Restrictions have been imposed on programs that the Government has itself repeatedly appealed to donors to support, such as for early recovery in Darfur. Despite 

these challenges, USAID continues to be the largest donor of humanitarian assistance in Sudan, providing support to those in need through health, nutrition, and 

water interventions. Where conditions of access and security permit, USAID 

strengthens local markets, livelihoods, and food security through early recovery initiatives. However, increased fighting throughout Darfur has undermined opportunities and prospects for sustained early recovery in many areas and USAID continues 

its focus on meeting emergency needs as a result of displacement and violence in 

Darfur. 

Regarding staffing in Sudan, USAID has assigned the next Mission Director to 

Khartoum and is in the process of filling other staff vacancies with U.S. Foreign 

Service personnel. Unfortunately, as a result of a 180-day Ordered Departure (OD) 

from Sudan, which lasted the maximum limit of 6 months for ODs (from September 

2012 until March 2013), a number of American Foreign Service officers based in 

Khartoum curtailed their assignments. We are working to recruit experienced U.S. 

staff to fill critical positions so that we can move forward with more effective program implementation and oversight. We also continue to implement a staffing plan 

to gradually restructure the Sudan mission as part of a larger, global effort to consolidate functions that USAID and State Department share. As part of this process, 

we continue to transfer responsibility for some administrative support and financial 

functions to the State Department and to other USAID missions in the region in 

alignment with the U.S. Government’s consolidation process. 

USAID looks forward to collaborating with Congress on charting the way forward 

for our assistance to Sudan. 

TB

Question. Particularly given the rising levels of resistance and the global threat 

posed by multi and extensively drug resistant tuberculosis, please explain the proposed decrease in funding for bilateral tuberculosis programs and how that reduction would be carried out in terms of altered activities.

Answer. It is important to clarify that the U.S. Government (USG) commitment 

to reducing the burden of tuberculosis (TB) is unwavering. When taking into consideration the overall FY 2014 funding request for TB—made up primarily of funding 

from the U.S. Agency for International Development (USAID), and supported by the 

annual contribution to the Global Fund to Fight AIDS, Tuberculosis and Malaria 

(Global Fund)—we can continue to leverage and maximize those investments to 

achieve greater impact. The concern in the global health community appears to center on the structure of the FY 2014 Congressional Budget Request, which identified 

the USAID FY 2014 budget request that is a reduction over FY 2012 but did not 

fully capture additional investments made through the Global Fund. The Obama 

administration has demonstrated its strong support for the Global Fund with a 

request for $1.65 billion in FY 2014, maintaining the same level requested in FY 

2013, which is a $350 million increase over FY 2012. 

The USG’s important role in TB is maintained within the aggregate request, as 

is our longstanding leadership role. The response to global health problems is a 

shared responsibility, and USAID is striving to maintain our leadership while 

strongly encouraging countries that have the ability to do more to increase their 

commitments. 

It is also important to point out that we are on track to achieve the Millennium 

Development Goal (MDG) of halving TB mortality rates by 2015, and USAID is on 

track to meet the Global Health Initiative TB goals for reducing TB prevalence and 

diagnosing and initiating treatment for 57,000 new multi-drug-resistant TB (MDR–

TB) cases. This outcome is a result of decades of collaboration between the USG, 

developing countries, and public and private partners. This achievement is notable 

and will be one of the only health-related MDGs met by 2015. 

USAID is working diligently with developing countries to increase the amount of 

TB funding within their national health budgets. As examples, the Government of 

South Africa recently committed to increase domestic funding for TB and has committed to fully funding the national scale-up of GeneXpert by investing over $27 

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million on equipment and consumables. In addition, the Government of India has 

expressed willingness to increase TB funding by over 40 percent over the next 4 

years to scale-up case detection and management of MDR–TB. The nature of our 

assistance is evolving, and as these countries increase their resources, USAID resources will direct technical assistance to scaling-up quality interventions and piloting innovative approaches, while building national and local capacity in partnership 

with the ministries of health. 

USAID’s leadership in TB has contributed to impressive gains—with worldwide 

mortality from TB falling 41 percent since 1990. In particular, USAID has been 

instrumental in making available key innovations, such as GeneXpert, as well as 

new drug regimens, and enhanced diagnosis and treatment. For example, USAID 

is funding clinical studies to develop shorter TB drug regimens, and if successful, 

would reduce the treatment of MDR–TB from 24 months to 9 months, thereby, 

improving treatment outcomes, and significantly lowering the cost of treatment. 

Additionally, USAID is introducing the newly approved drug Bedaquailine, supporting the development of a second-line drug market for MDR–TB, and investing 

in research for new drug development. 

CLIMATE CHANGE

Question. I was pleased to see that USAID’s Climate Change and Development 

Strategy includes as the third strategic objective, strengthening ‘‘development outcomes by integrating climate change in USAID programming, learning, policy dialogues, and operations.’’ This integration is important to the overall efficiency and 

success of the strategy.

♦ Therefore, please provide at least two examples how the Agency has been integrating the strategy within the following areas: programming, learning, policy 

dialogues, and operations.

Answer. One of the ways that climate change is being integrated into USAID programming is through the strategic planning process; all USAID missions are 

required to fully consider climate change as they develop their 5-year Country 

Development and Cooperation Strategies (CDCSs). USAID developed supplemental 

guidance that provides information to missions on requirements to integrate climate 

change programming into the CDCS planning process. Through this guidance and 

additional technical support, missions have been able to successfully integrate climate change into their CDCSs. The Southern Africa Regional CDCS, for instance, 

integrates climate change into policy and decisionmaking as a part of an objective 

to increase sustainable economic growth in targeted areas. As another example, the 

Bangladesh CDCS establishes improving responsiveness to climate change as interest to an overall goal of becoming a knowledge-based, healthy, food secure, and climate resilient middle-income democracy. 

USAID is also working to develop results frameworks and targeted outcome indicators that measure climate change and development outcomes for work in sectors 

throughout the agency, drawing on expertise from many sectors including energy, 

water, food security, democracy and governance, and humanitarian assistance. By 

tracking these indicators, we will be able to learn more about the impacts that 

development efforts across the agency are having on climate change. In this vein, 

USAID is implementing 10 Integration Pilot Projects to examine innovations on how 

to integrate climate change mitigation and adaptation across Agency development 

priorities. We are now planning evaluations that will help us draw rigorous lessons 

learned from those experiences. 

In December, USAID released policy and program guidance on ‘‘Building Resilience to Recurrent Crisis.’’ This policy recognizes that climate change is a critical 

factor contributing to the shocks and stresses that can produce recurrent crises and 

undermine development gains. Integration of climate change considerations in 

USAID’s Resilience Policy is just one example of how USAID is integrating climate 

change into its policy dialogues.

Question. As the USAID Climate Change and Development Strategy notes, climate change impacts in the form of rising temperatures and increasingly variable 

rainfall (to name just a couple) are likely to undermine livelihoods and threaten food 

security in developing countries, including where USAID operates. At the same 

time, the U.S. Government has undertaken a significant global hunger and food 

security initiative known as ‘‘Feed the Future.’’

♦ Please provide three examples of how USAID has been integrating climate 

change into the Feed the Future program and how this integration promotes 

their mutual benefit.

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Answer. Climate change is inextricably linked to food security because of its widereaching impact on agriculture and landscapes. The Feed the Future Initiative has 

integrated indicators related to natural resources management and climate resilience into its monitoring and evaluation system so that we can track the effectiveness of our programs. In addition, many of the USAID staff working on food security 

and climate change are colocated in the same field offices and work together to build 

sustainable economic growth. Programs are being designed in partnership in order 

to build stronger capacity among our partner countries to address these critical 

issues. Some specific examples of how climate change is being integrated into the 

Feed the Future program follow. 

One key component of building climate change adaptation into food security and 

other development efforts is the development of vulnerability assessments, which assess expected climate impacts enabling necessary adjustments in development planning and implementation. The Uganda mission recently completed a comprehensive 

climate change vulnerability assessment for the agriculture sector. The assessment 

is generating insights for use in food security policy, programming, and investment 

decisions. The climate analysis showed average temperatures have already risen 

and that they will continue to rise. The analysis also points to changes in precipitation patterns and an increase in extreme weather events. Of the eight crops 

assessed, coffee, matooke, maize, and beans were determined to be the most vulnerable. The livelihood analysis found that 73 percent of households surveyed were 

highly vulnerable to climate change impacts. The most vulnerable households are 

at risk partly because they rely on crops like coffee, matooke, maize, and beans for 

income and food security, and partly because they lack the assets, financial capital, 

and nonagricultural sources of income that can help households endure times of 

stress. To ensure local decisionmakers are aware of the assessment, USAID’s Uganda mission organized a week of meetings and workshops for more than 150 government, donor, research, and civil society stakeholders. A total of 50 stakeholders 

joined a 1-day Options Analysis Workshop where cross-sector teams identified specific adaptation options for the agriculture sector. Within the mission, the vulnerability assessment is already being used to design programs and interventions that 

increase adaptive capacity under the Uganda Feed the Future Value Chain Project. 

The assessment is also being used to ensure existing Feed the Future interventions 

are planning for potential climate change impacts. 

Another way Feed the Future is supporting the development of resilient agricultural systems is by helping farmers cope with extreme weather events. For example, 

with the help of climate change adaption techniques taught by Feed the Future, a 

Cambodian fish farmer was able to save her pond when record seasonal floods hit 

in 2011. As the water levels started rising, aquaculture technicians from Feed the 

Future showed her how to install a tall netting fence to keep her fish from escaping 

the pond and to keep unwanted predators out. They also advised her on how to protect the fence so crabs and debris wouldn’t cut holes in it. This farmer is now sharing the techniques she learned with her neighbors, who lost their ponds during the 

floods. 

The Feed the Future Initiative is investing in multiple safeguards and adaptation 

strategies to prepare for and respond to a changing climate in Ethiopia. Ethiopia, 

one of the most food insecure countries in the world, sits in the cross-hairs of climate change patterns, and is endeavoring to cope with the multiple threats to food 

security, access to water, and even certain livelihoods. The productivity—and soon, 

even the basic viability—of its long-cycle crops is at risk. These crops, which provide 

up to 85 percent of the food grown in Ethiopia, have already seen 15-percent 

declines in rainfall, setting up a potentially dangerous and costly interaction between drought and declining agricultural capacity. Under the most likely climate 

change scenarios, cereal production in Ethiopia—and, indeed, much of east Africa—

may drop 30 percent by 2030. During that period, food aid to the region would have 

to triple to make up for the shortfall. 

For example, USAID is investing $5 million to carry out global-level research on 

making livestock more climate resilient in order to help people that raise livestock 

better adapt to climate change impacts. USAID will support research on the development, identification, and introduction of livestock that are disease resistant and 

heat tolerant, and capable of living on low quality forages and feeds without experiencing a decrease in meat and milk production. 

Additionally, USAID’s Ethiopia Mission’s Capacity to Improve Agriculture and 

Food Security (CIAFS) program supports Ethiopia’s efforts to transform its agricultural sector and improve food security for the Ethiopian people by providing targeted training on and raising awareness of best practices in agricultural development. The project strives to empower leaders to catalyze change, drive growth, and 

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pians to learn innovative practices and technologies in agriculture and natural 

resource management, targeting technologies for adapting to climate change. CIAFS 

also promoted peer-to-peer learning on an organized a study tour to Mali and Niger 

pastoralist areas for Ethiopian pastoral stakeholders including representatives of 

pastoralist organizations, parliamentarians, and relevant ministry leadership and 

staff.

Question. I understand that as part of USAID Climate and Development Strategy, 

USAID is helping developing counties move toward low-carbon emission economic 

growth by promoting low emission development strategies (LEDS). As part of LEDS, 

please describe how USAID is working to increase access to renewable and sustainable energy.

♦ Please provide examples of this work in Africa and Asia. In addition, in cases 

where energy is considered a constraint to growth, please describe how is 

USAID working to promote access to renewable and sustainable energy?

Answer. A LEDS is a planning and implementation framework that helps a country achieve its economic and social development objectives while reducing greenhouse gas emissions and building greater climate resiliency. USAID’S Enhancing 

Capacity for LEDS (EC–LEDS) program integrates economywide analysis and climate change mitigation considerations into long-term country-level planning and 

decisionmaking and assists countries to implement the clean and renewable programs that are identified as part of these strategies. 

In Africa, USAID’s LEDS work is just getting started. Negotiations on government-to-government Memorandum of Understandings (MOUs) have established 

jointly agreed work programs under EC–LEDS with Gabon, Zambia, Malawi, 

Kenya, and South Africa. As these work programs are being negotiated, our teams 

in-country have been working to put in place the necessary technical assistance 

mechanisms to provide targeted assistance to our partner countries in Africa that 

responds to the needs and actions outlined in the work programs. Examples of our 

clean energy-related work through EC–ELDS in Africa follow. 

In Gabon, we are working with the Department of Energy’s National Laboratories 

to build capacity for carbon footprint analysis of economic development and infrastructure projects, for public sector energy efficiency, and for cross-sectoral modeling. These efforts will enhance capacity for carbon footprint analysis of economic 

development and infrastructure and improve investment decisions that provide economic, social, and environmental value, backed by business cases that are sustainable, transparent, and accountable to society. This work will also build capacity to 

assess energy efficiency opportunities in the public sector and pilot demonstration 

projects with the goal of transferring analysis and implementation capabilities to 

the Ministry of Energy. 

In South Africa, the principal objective of the EC–LEDS partnership is to 

strengthen public sector-related development planning and project development 

capacity for low emission projects, including the mobilization of development finance 

and private sector participation in such projects. This collaboration will provide support for the preparation and development of approximately 20–30 identified projects 

over the initial 3-year period. This will enable low emission projects to leverage 

potential development financing, cofunding and private sector participation opportunities that exist or are emerging within the South African development agenda. 

In Kenya, our work is early in the design phase as we work out concrete details 

of technical assistance in support of our joint MOU with the Government of Kenya. 

Possible work may focus on support for the development of the renewable energy 

and energy efficiency master plan, support for design of policies that encourage 

adoption of renewable energy technologies including GOK feed in tariffs, assessments of grid reliability and ancillary services and requirements necessary for the 

Kenyan electricity grid to accept a greater share of variable renewable energy generation sources, and assistance to reduce barriers and increase private sector investment in renewable energy projects. 

In Asia, the United States has established joint EC–LEDS work programs with 

Vietnam, Bangladesh, Indonesia, and Philippines. They are all in various stages of 

implementation, but the Philippines program is especially noteworthy for the speed 

at which it has advanced and the explicit links to constraints to economic growth. 

The U.S. Government and the Philippines Government have agreed to a Partnership for Growth, which mobilizes the resources of both governments to address the 

most serious constraints to economic growth and development in the country, 

including hurdles in the energy and environment sectors. Building on this partnership, EC–LEDS will address two fundamental, constraints to growth: a pressing 

need for improved land use and resource planning that is integrated with both climate resiliency and development priorities; and, the lack of a consistent policy 

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framework and reliable data for accelerating investment in domestic energy 

resources to ensure reliable, sustainable, and affordable energy access nationally. 

The U.S. Government trained 29 Filipino technical experts on using the Long 

Range Energy Alternatives Planning System (LEAP) model to identify and prioritize 

climate change mitigation options. The next step is to develop and incorporate 

LEAP scenarios into the 2013 update of the Philippines Energy Plan. Another 35 

transport and fuels analysts have been trained on tools and databases to analyze 

sustainable transport and fuel alternatives. Moving forward, USAID will support 

the development of high-quality that is essential to increasing wind development 

and private sector investment in utility-scale wind energy. This effort will benefit 

local industry, help to meet the country’s clean energy growth target, and leverage 

5MW of new RE generation in FY 2013. 

USAID will also work to increase investment in wind and other renewable energy 

development by joining with the Asian Development Bank and the wind industry 

to provide training on overcoming barriers for wind development. This activity will 

result in increased investment in wind and other renewable energy development 

leading to $16M of new investment leveraged. 

The U.S. Government is also helping the Government of Bangladesh integrate climate change goals with the country’s broader economic development goals. For 

example, the USG is capitalizing on the linkages between climate change programming and the Feed the Future Initiative, which is promoting climate change adaptation through, for example, improved seeds and farm diversification, and greenhouse 

gas mitigation through techniques like improving fertilizer application techniques to 

reduce nitrogen emissions. Through the EC–LEDS program, the United States and 

Bangladesh are also partnering to help design and implement a low emission development strategy for Bangladesh. USAID specifically, is collecting data on wind 

energy potential and information on siting in order to unlock private investment in 

wind energy. We are also working with the Government of Bangladesh to build their 

capacity to manage and measure their own GHG emissions. 

RESPONSES OF ADMINISTRATOR RAJIV SHAH TO QUESTIONS SUBMITTED

BY SENATOR BOB CORKER

FOOD AID REFORM

Question. Given USAID’s statement that food aid reform will save an estimated 

$500 million over the next 10 years, are the savings identified by USAID going 

toward deficit reduction or toward other programming?

Answer. The President’s proposal would use $500 million in savings generated 

from food aid reform to reduce the deficit. The shift of funding from title II to foreign assistance accounts eliminates mandatory funding for cargo preference reimbursements to title II, reducing the deficit by an estimated $50 million per year—

$500 million over the next decade—based on recent data.

Question. How did the administration determine that 55 percent of the $1.4 billion 

food aid in guarantees will be spent in the United States? Why was that the final 

percentage?

Answer. The administration is committed to continuing a strong partnership with 

American farmers through the Food for Peace program. For that reason, the President’s proposal maintains the majority of U.S. funds—55 percent in 2014—for the 

purchase, transport, and related costs of American commodities. This level is also 

based on our estimation of need and global market supply, taking into account the 

level of procurement local and regional markets can reasonably bear. That means 

the United States will keep working with farmers and processors across America 

who help feed hungry children from Bangladesh to the Sahel, where American commodities are the best possible tool. American farmers are vital to transforming the 

food aid basket with ready-to-use therapeutic foods, better fortification of blended 

foods, improved micronutrient reformulation for milled grains and vegetable oil, and 

emergency food bars and paste. 

USAID FORWARD

Question. What controls has USAID established over its direct funding to local 

institutions to ensure accountability?

♦ Describe the mechanisms in place to respond to cases of inappropriate or inefficient use of funds. 

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♦ Have there been any cases where USAID has had to stop or pull back funding 

provided directly to local institutions? If so, please describe and provide some 

specific examples. 

♦ Are the audit mechanisms and accountability standards for direct assistance to 

foreign governments the same as they are for U.S. recipients and other nongovernmental recipients? If not, how do they differ?

Answer. USAID is committed to accountability, transparency, and oversight of 

USG funding and we have a number of mechanisms for ensuring that resources are 

not lost to waste, fraud, or abuse throughout development assistance implementation, as follows:

• Pre-Award: Contracting and Agreements Officers (CO/AO) make a determination whether a contractor/recipient is sufficiently responsible in terms of financial capabilities to account for funding, and have the ability to carry out or 

perform the work, under an award. This process is known as ‘‘a pre-award responsibility determination.’’ As part of the Request for Proposal/Application 

process, CO/AOs also ensure that regulatory language enabling oversight and 

performance monitoring is included in each award. This language comes from 

the Federal Acquisition Regulation, the Office of Management and Budget 

(OMB) Circulars and/or Agency operational policy. Finally, performance indicators and metrics linked to the desired results are also included in the awards. • Post-Award: During the period of performance for an award, USAID performs 

myriad activities to ensure award compliance. Contracting/Agreement Officer’s 

Representatives COR/AORs review and approve awardee vouchers for invoices 

submitted, conduct site visits, and enable third-party program and project evaluations. They also monitor performance through reporting, meetings, and general oversight of the work being performed. COR/AORs formally document any 

material deficiencies in performance. This documentation triggers immediate 

action by an Agency CO/AO which may ultimately include recommending that 

the vendor not be paid. Additionally, we use financial systems and controls, as 

well as internal and independent audits to enable the Agency to effectively 

manage, track, and safeguard funds before they are disbursed. 

• Award Close-out: Like other federal agencies, USAID uses the Contractor Performance Assessment Reporting System (CPARS) to formally record data about 

contractor performance. CORs are responsible for compiling and entering past 

performance data into CPARS annually. Additional USAID mechanisms are 

also in place to evaluate contractor performance including the post-performance 

audit process and the Office of the Inspector General to whom any instances 

of suspected waste, fraud, or abuse are promptly referred.

In February 2011, USAID stood up a Compliance Division within the Bureau for 

Management’s Office of Acquisition and Assistance (M/OAA) to serve as the central 

repository for any and all referrals of administrative actions, including suspension 

and debarment actions. In just its first year the Division issued 102 administrative 

actions and recovered nearly $1 million. For this achievement the Agency was recognized by the Office of Management and Budget in 2012 as a success story:

‘‘The Agency debarred 16 people in 2012 for their participation in a 

scheme to submit fraudulent receipts for the administration of federal foreign assistance to support public health, food aid, and disaster assistance 

in Malawi. By working with its recipient organization to assure that the unlawfully claimed funds were not reimbursed, USAID was able to avoid 

waste and abuse of taxpayer funds designed to provide vital assistance to 

a developing country.’’—‘‘Taking Contractor Accountability to the Next 

Level,’’ September 18, 2012 (http://www.whitehouse.gov/blog/2012/09/18/taking-contractor-accountability-next-level).

With respect to audit mechanisms and accountability standards, U.S.-based grantees are subject to OMB Circular A–133 and U.S. contractors are subject to FAR 

52.1215–2 and 52.216–7. 

For all foreign-based recipient entity types, including contractors, grantees, and 

host government entities, audits are conducted in accordance with USAID Inspector 

General (IG) guidelines. The USAID IG guidelines were derived directly from U.S. 

Government auditing standards for implementation in the overseas, developing 

country context in which USAID financed performance takes place. The most notable difference between USAID audits on non-U.S. entities and U.S. entities is that 

a lower annual audit threshold is used for non-U.S. recipient entities—$300,000 in 

annual expenditures instead of the $500,000 threshold applicable by OMB to U.S. 

entities. Also, in most cases, foreign contractors and grantees and host governments 

are audited by independent, private sector auditors using the USAID IG guidelines. 

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1 USAID has corrected the baseline year from 2012 as stated in the original QFR sent by Senator Corker, to 2010, to track the baseline year, FY 2010, established in USAID Forward 

Progress Report 2013. 2The term ‘‘annual program allocation’’ includes the missions’ new obligating authority (NOA), 

carry-over funds, and transfers from other agencies (e.g., PEPFAR funds implemented by the 

mission; interagency transfers from State/DRL, State/INL). 3 USAID’s detailed assessment process for consideration of awards to partner country governments is described in QFRs 3, 5, and 8. 

However, pending USAID IG concurrence, audits on host government implementing 

entities may also be carried out by host government Supreme Audit Institutions. 

Such audits must comply with one of the following standards: (1) Comptroller 

General of the United States; (2) International Organization of Supreme Audit Institutions (INTOSAI); (3) International Auditing Practices Committee of the International Federation of Accountants (IFAC).

Question. According to the 2013 USAID Forward Progress Report, USAID increased the percentage of funding provided directly to local institutions from about 

10 percent in FY 2010 [sic] 1 to about 14 percent in FY 2012, with half going to partner country governments. Please describe what types of funding are included in this 

figure. For example, does the figure include funding provided through all assistance 

awards? Subawards? 

Answer. The 14.3 percent figure referenced above (and from page 20 of the USAID 

Forward Progress report) represents the dollar value of cumulative mission program 

allocations2 that were obligated through local systems during fiscal year 2012. 

The figure includes all obligations at the mission level to partner country governments for direct implementation of assistance (projects) that involve direct use of 

previously assessed3 partner country public financial management (including audit) 

and partner country procurement systems. 

The figure also includes all direct funding through grants, cooperative agreements, contracts and Development Credit Authority mechanisms, to local, nongovernmental, nonprofit, educational, and commercial organizations. It does not include 

subawards such as subcontracts or subgrants. Local organizations are defined as 

entities organized and having a principal place of business in the recipient country, 

and majority owned or controlled by recipient country citizens, with less than a 

majority ownership or control by foreign entities or individuals.

Question. According to the 2013 USAID Forward Progress Report, USAID uses 

various tools to assess capacity and weaknesses of partner country government 

institutions and, in some cases, provides funding and assistance to these institutions. How many such assessments have been completed and in which countries?

Answer. As of March 2013, a total of 35 countries, listed below, have completed 

initial (‘‘Stage One’’) Public Financial Management Risk Assessment Framework 

(PFMRAF) assessments.

Armenia El Salvador Jamaica Moldova Rwanda 

Bangladesh Ethiopia Jordan Morocco Senegal 

Barbados Georgia Kenya Mozambique Serbia 

Benin Ghana Kosovo Nepal South Africa 

Colombia Haiti Liberia Paraguay Tanzania 

Dominican Republic Honduras Malawi Peru Trinidad and Tobago 

East Timor Indonesia Mali Philippines Zambia 

Question. In how many (and which) countries is USAID providing funding directly 

to government institutions?

Answer. USAID is providing Direct Government-to-Government Assistance to the 

following 22 countries: Afghanistan, Kosovo, Armenia, Liberia, Benin, Mozambique, 

Bolivia, Nepal, Egypt, Pakistan, El Salvador, Peru, Ethiopia, Rwanda, Ghana, Senegal, Honduras, South Africa, India, Tanzania, Jordan, and Zambia.

Question. How do these assessments translate into USAID country assistance 

strategies and/or activities to build partner countries’ public financial management 

capacity?

Answer. USAID’s Country Development Cooperation Strategies (CDCS) are based 

on evidence and analysis, including that provided by the Public Financial Management Risk Assessment Framework (PFMRAF). At the strategy stage, the CDCS 

Guidance requires that the focus and selectivity principle be applied in selecting 

institutions and institutional levels (national, regional, local) which are most 

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promising. Such a decision would be informed by a PFMRAF or other preliminary 

analysis. 

After strategy approval, USAID’s Project Design guidance requires a sustainability analysis to be performed. Missions are asked to analyze key sustainability 

issues and considerations around a host of issues including economic, financial, social soundness, cultural, institutional capacity, political economy, technical/sectoral, 

and environmental. Where appropriate, the analysis should discuss generally how 

funding local actors and supporting government-to-government objectives could help 

achieve sustainability goals. Further follow-on PFMRAF analysis of specific activities to support building country public financial management capacity may be conducted based on findings of the preliminary analysis. 

For additional information regarding the Agency’s CDCS guidance, please see: 

(http://www.usaid.gov/results-and-data/planning/country-strategies-cdcs).

Question. In 2012, GAO recommended that USAID develop a process to track 

assistance provided through local financial systems—in part to help monitor 

progress toward providing 30 percent of its assistance through these systems by 

2015. Please update the committee on the status of USAID’s efforts to develop such 

a process, including any changes made to USAID’s accounting systems to capture 

this type of assistance.

Answer. While no changes were necessary to Agency core accounting or procurement systems, a process was developed by the Agency to track progress of providing 

assistance through local systems toward the goal of 30 percent of all country assistance programs by 2015. The process was part of a broader effort to track progress 

of all USAID Forward components which resulted in the publication of the USAID 

Forward Progress Report 2013. Annex 1 of the report, ‘‘Scorecard of Indicators,’’ provides data for each goal reflecting the progress measure and 2012 milestone 

achieved. The report may be found at (http://www.usaid.gov/sites/default/files/documents/1868/2013-usaid-forward-report.pdf). Further, the Agency is working to refine 

and strengthen our reporting procedures to better integrate data collection with 

Agency standard business practices, improve data quality and more efficiently utilize existing technology.

Question. How did USAID determine that 30-percent target was a reasonable near 

term goal?

Answer. One of the key objectives of the Agency’s reform effort, USAID Forward, 

is to increase the amount of work we do with more and varied local partners, so 

we can create true partnerships; build local, sustainable capacity; and begin to create the conditions where aid from the United States is no longer necessary. 

The 30-percent ‘‘topline indicator’’ is an Agencywide aspirational target, not a mission-by-mission or country-by-country hard requirement. Every country in which 

USAID is operating has different levels of ministerial and local capacity, governance 

challenges, civil society participation and commitment to fight corruption, as well 

as a varying commitment to strengthen its systems and provide opportunities for 

local NGOs and private businesses. 

USAID determined that the 30 percent overall target was a reasonable near term 

goal on the basis of USAID mission estimates (averaged to establish the overall target) of what progress toward localizing and increasing sustainability of assistance 

would be appropriate and prudent given the local context. 

The selection of the implementing partner—whether a local government or nongovernmental organization, U.S. or international contractor or grantee, or other 

donors—is driven by country context and development needs, not by the 30 percent 

target. 

For government-to-government assistance, USAID has an extensive assessment 

process in place that analyzes fiduciary risks and technical capacity, as well as the 

partner government’s democracy, human rights, and governance record and capacity, before any decision is made to provide funding. Where manageable risks are 

identified, USAID implements a risk mitigation plan. If risk is too great, USAID 

chooses another approach. 

For awards to local nongovernmental organizations, including local not-for-profit 

and commercial organizations, we also have an extensive process in place before any 

award to review a potential recipient’s administrative, financial management and 

technical capacities to manage USAID funds and deliver results. USAID Agreement 

and Contracting officers must make a responsibility determination covering these 

factors before we provide funding or other resources. 

Further, missions are instructed that partnership with local government entities 

or local organizations is not an end in itself. Rather, such partnerships should be 

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tive, and a determination of which modality among several—contracts and grants 

to U.S. or international organizations included—are the best fit for the project design and to achieve the development objective. 

Whether it is government-to-government assistance or awards to local nongovernmental organizations, USAID always retains the unilateral right to suspend or terminate such assistance if any issues arise, and when necessary, USAID will seek 

to recover unallowable costs.

Question. How does USAID plan to measure performance [of awards to local organizations]? How does this differ from existing performance evaluation processes?

Answer. USAID has recently revised Agency guidance (the Automated Directive 

System) to the chapters covering strategic planning, project design, performance 

monitoring, and use of reliable partner government systems. An important reason 

for these updates was to ensure that USAID support for activities undertaken by 

partner governments or by local nongovernmental organizations were fully integrated into the Agency’s established procedures for rigorous strategic planning, 

project design, and performance monitoring. Hence, awards to local organizations 

are subject to the same requirements for good project design and performance monitoring that applies to other awards that USAID makes. Good project design for all 

USAID projects includes development of a logical framework and associated performance indicators while good performance monitoring includes establishing a performance monitoring plan and conducting regular reviews.

Question. In 2012, GAO also recommended that USAID improve monitoring and 

evaluation of public financial management assistance programs. How is USAID 

monitoring and evaluating the effectiveness of efforts to use local systems, including 

identifying indicators and collecting data?

Answer. USAID Forward introduced two complementary reforms to address 

GAO’s recommendation. The first effort reinvigorates strategy development and 

project design into USAID’s development assistance programs. For the design of 

new projects, Agency requirements now include detailed preobligation analysis and 

indicative plans for monitoring progress and evaluation. This incorporates defining 

indicators, collecting baseline data, ensuring reliable results and planning for independent evaluations. Second, new guidance requires that final monitoring and evaluation plans include refined indicators and agreement on independent approaches 

to evaluation. These reforms are being incorporated into USAID’s policy and directives systems for continuing use. 

An important reason for updating the Agency’s guidance is to ensure that activities undertaken by partner governments or by local nongovernmental organizations 

receiving USAID support are fully integrated into the Agency’s established procedures for rigorous strategic planning, project design, performance monitoring, and 

evaluation. As such, all directly funded activities will be subject to the same requirements for good project design, performance monitoring and evaluation that apply to 

any other award that USAID would make. Good project design for all USAID 

projects includes development of a logical framework and associated performance 

indicators while good performance monitoring includes establishing a performance 

monitoring plan and conducting regular reviews.

Question. How does USAID coordinate its public financial management assistance 

activities with other USG agencies? With other donors?

Answer. USAID coordinated with the US. Department of the Treasury, the 

Millennium Challenge Corporation, other bilateral and multilateral donors, and 

international financial institutions before devising USAID’s Public Financial Management Risk Assessment Framework (PFMRAF) assessment process. USAID’s 

PFMRAF policy, set forth in our Automated Directives System Chapter 220, Use of 

Reliable Partner Country Systems for Direct Management and Implementation of 

Assistance, ordains a five stage assessment process to ensure that partner country 

government entities being considered as direct recipients of USAlD funding have the 

appropriate financial, administrative, and technical capacities in place before 

USAID entrusts U.S. taxpayer funds to them. 

USAID conducts these appraisals and assessments in person and in country, and 

invites and coordinates the participation of representatives of other executive 

branch agencies, other donors, and where appropriate, the potential partner country 

government. We also coordinate the provision of any technical assistance directed 

at enhancing public financial management capabilities of the partner governments 

via a country level interagency and donor coordination process. Finally, USAlD has 

entered into interagency agreements with the Department of the Treasury and other 

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tage to do so, and when provision of such assistance furthers USAID’s development 

objectives and project designs.

Question. What plans do you have to make available programmatic and expenditure data about assistance to host-country grantees and governments?

Answer. USAID intends to start publishing disaggregated program and expenditure data, including data fields at implementation level, on the Foreign Assistance 

Dashboard (FAD) after the close of the third quarter of FY 2013. The FAD provides 

a wide variety of stakeholders, both internal and external, with the ability to examine, research, and track U.S. Government foreign assistance investments in an 

accessible and easy-to-understand format. The disaggregation will also be applied 

retroactively to previously posted FY 2013 Quarters 1 and 2 data. Data fields that 

will be displayed include the name of the implementing agent (i.e., the organization, 

host country government or other entity that received the funding) and the implementing agent’s country of origin. 

TRADE CAPACITY

Question. U.S. development assistance should focus on helping developing nations 

achieve economic independence and graduate from U.S. assistance. Helping these 

countries attract investment and trade with the world is a critical part of achieving 

that goal. With respect to trade capacity-building (TCB), I am interested in (1) the 

administration’s overall goals on trade capacity-building and (2) the specific strategy 

to coordinate the efforts of all the differing agencies providing trade capacity-building assistance.

♦ (a) What are the administration’s top three goals with respect to trade capacitybuilding?

Answer. Through ‘‘aid for trade,’’ the United States focuses on partnering with 

countries, particularly those countries that are least integrated into the global trading system, on training and technical assistance needed to: inform decisions about 

the benefits of trade arrangements and reforms; implement obligations to bring certainty to trade regimes; and enhance countries’ ability to take advantage of the 

opportunities of the multilateral trading system and compete in a global economy. 

These goals are articulated in USAID’s strategy document ‘‘Building Trade Capacity 

in the Developing World.’’

♦ (b) Please describe the interagency process by which all of the U.S. Government’s agencies collaborate to set those goals and to construct a comprehensive 

strategy to implement those goals.

Answer. In the Presidential Policy Directive (PPD) on Global Development, the 

President laid out a modern architecture to raise the importance of development in 

our national security policymaking and to generate greater coherence across the 

U.S. Government. The PPD highlighted that ‘‘through existing policy mechanisms 

(e.g., trade policy through the United States Trade Representative’s Trade Policy 

Review Group, etc.), an assessment of the ‘‘development impact of policy changes 

affecting developing countries will be considered.’’ USTR chairs the interagency 

coordination process through the Trade Policy Review Group (TPRG) and the Trade 

Policy Staff Committee (TPSC). USAID has been using its position as a statutory 

member of this interagency process to inject the development impact and ‘‘on the 

ground’’ input from USAID field personnel into the trade policy decisionmaking 

apparatus, which includes discussions on the need for trade capacity-building interventions.

♦ (c) How does the interagency process identify and eliminate nontariff trade 

barriers?

Answer. USTR is responsible for annually publishing a National Trade Estimate 

Report on Foreign Trade Barriers (NTE). Information in this report is the result of 

input provided through the interagency TPSC process and supplemented by input 

in response to a notice published in the Federal Register, and by members of the 

private sector trade advisory committees and U.S. embassies abroad. 

While the NTE identifies foreign trade barriers—efforts to eliminate them are led 

by USTR through a variety of negotiating avenues: bilaterally in direct discussion 

with trading partners; through regional bodies when they can play a significant role 

in addressing barriers across their member states; in multilateral negotiations; and, 

in some cases, through dispute settlement. USAID and other agencies which provide 

TCB often augment USTR’s efforts by providing technical assistance in support of 

the policy changes necessary to eliminate nontariff barriers.

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♦ (d) With respect to the administration’s goals and the strategy on trade capacity-building, how do you define success?

Answer. The goal is to graduate countries from requiring U.S. foreign assistance. 

A number of former USAID-assisted countries have achieved that measure of success based on their strong economic and trade performance. Until that is achieved, 

the Department of State and USAID have worked together to develop standard indicators to measure what is being accomplished with foreign assistance resources, 

including indicators related to measuring the success of trade programs.

♦ (e) What are your criteria for success and how do you determine or measure 

your progress toward success?

Answer. A primary criterion for success of TCB programming is to expand the 

number of people that benefit from trade. This is accomplished through reducing the 

barriers that inhibit the flow of goods and services and working to integrate countries and businesses into the global trading system. In a 2005 study, the GAO raised 

questions about USG trade capacity-building efforts and the need for a more disciplined assessment of TCB interventions. As a result of that report, USAID undertook an extensive evaluation of TCB interventions and published a report of its findings in 2010. The study, ‘‘From Aid to Trade: Delivering Results’’ found that trade 

capacity-building had contributed substantially to achieving the goals of TCB. Individual USAID TCB projects also contain performance management plans which 

measure progress achieved under their respective programs. Evaluation of TCB programs and projects continues pursuant to USAID’s evaluation policy.

♦ (f) What does a successful comprehensive trade capacity-building effort look 

like?

Answer. Integration into the global economy is a powerful force for economic 

growth and poverty reduction. The results of USAID trade capacity-building include 

more active and better informed participation by developing countries in a range of 

international trade negotiations, greater compliance with trade commitments and 

obligations, tangible improvements in the effectiveness of commercial laws and institutions, reduction in the time and cost to export and import goods, and improvements in the quantity and quality of individual developing country’s exports, 

imports, and foreign investment. USAID has assisted more than 28 countries in 

acceding to the WTO. USAID assistance includes supporting the government in conducting analysis and preparing technical documents required for accession, as well 

as advice in undertaking required legal and regulatory reforms, and supporting 

effective implementation of those reforms.

♦ (g) Is there a specific country that you would describe as a success story?

Answer. Many countries which have received USAID trade capacity-building are 

considered success stories. For example, significant technical assistance and trade 

capacity building was provided as an integral part of the trade negotiations that led 

to the Dominican Republic-Central America-United States Free Trade Agreement 

(CAFTA–DR) with five Central American countries (Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua) and the Dominican Republic. U.S. TCB support to 

Vietnam over many years led to the successful implementation of the U.S.–Vietnam 

Bilateral Trade Agreement and subsequently, to Vietnam’s accession to the World 

Trade Organization. USAID provided substantial assistance to Laos and Tajikistan 

to accede to the WTO in 2013.

Question. Our current budget environment demands that we spend scarce 

resources well. Please explain the administration’s decision process to direct TCB 

aid to countries with the best chance of success. How do you decide where to spend 

TCB money to ensure it will do the most good? For example, under your comprehensive strategy, do you prioritize certain countries as being best positioned to implement the trade capacity-building aid we provide?

Answer. USAID works closely with USTR to identify U.S. trade policy priorities 

and to align USAID activities in support of those trade policy objectives. For example, USAID has implemented significant TCB programming to support implementation of U.S. trade agreements (CAFTA–DR, Peru, Colombia, Jordan, and Morocco) 

and utilization of trade preference programs such as the African Growth and Opportunity Act. In addition to working closely with USTR, USAID determines the need 

for trade capacity-building for individual countries through a Country Development 

Cooperation Strategy (CDCS) process that includes input from both U.S. and host 

country stakeholders and regional strategies that are developed through a Regional 

Development Cooperation Strategy (RDCS) process.

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Question. A July 2011 GAO report notes that as many as 18 agencies provide 

trade capacity-building assistance. For example, the report identified that the 

Millennium Challenge Corporation and the Department of the Army as two of the 

largest providers of trade capacity-building assistance. Please describe the interagency process for coordinating decisionmaking with these other agencies and 

USAID’s role in that process.

Answer. With respect to the Millennium Challenge Corporation, USAID serves on 

the MCC Board of Directors, along with the Departments of State and Treasury, 

and USTR. The Board is responsible for the identification and selection of MCC 

Threshold and Compact countries. 

The Department of Defense is also a statutory member of the TPSC process led 

by USTR, through which trade-related policies are coordinated within the executive 

branch.

♦ (a) Does USAID lead the process?

Answer. The coordinating process for trade-policy-related issues is led by USTR. 

USAID works with USTR to identify TCB-related activities which complement U.S. 

trade policy goals. USAID is also part of the country team in U.S. embassies around 

the world. USAID works within the country team and with host country counterparts to identify and implement country specific trade capacity-building activities 

consistent with the partner country’s development plan.

♦ (b) Can USAID direct the Army’s efforts on where and how to spend trade 

capacity assistance?

Answer. USAID cannot direct the Army on where and how to spend trade capacity building assistance.

Question. The GAO has identified 18 agencies as providing trade capacity-building 

aid. Which U.S. Government agency is ultimately responsible to the President for 

ensuring that TCB aid is spent wisely and achieves the administration’s goals as 

defined by the administration’s overall trade capacity-building strategy?

Answer. USAID works with USTR and other agencies as appropriate to align 

USAID TCB programs to support trade policy and broader USG objectives.

♦ (a) Which agency and which official is in charge of the process that decides 

where U.S. trade capacity-building money will be directed?

Answer. There is no single coordinating agency, official, or process specific to TCB 

activities. USAID, as the largest provider of TCB assistance, coordinates closely 

with USTR, State, Treasury, Agriculture, Labor and other trade related agencies in 

prioritizing TCB efforts. USAID programs identify TCB needs through a Country 

Development Cooperation Strategy (CDCS) process that includes input from both 

U.S. and host country stakeholders and regional strategies that are developed 

through a Regional Development Cooperation Strategy (RDCS) process. These strategies are approved by the cognizant USAID regional Assistant Administrator with 

input from USAID policy, budget, and technical bureaus.

♦ (b) Can that agency and that official direct how resources are spent?

Answer. There is no single agency or individual that directs how all TCB 

resources are spent.

♦ (c) Which of the 18 agencies officially participate in that process?

Answer. Most of the USG entities that provide TCB are statutory members of the 

TPSC interagency process led by USTR such as the Departments’ of Agriculture, 

Commerce, Defense, Energy, Health and Human Services, Homeland Security, Interior, Justice, Labor, State, Transportation, Treasury, the Environmental Protection 

Agency and USAID.

♦ (d) According to the President’s Congressional Budget Justification, some of this 

money is being spent to help foreign governments modernize customs procedures at foreign ports. For example, is reducing delays and paperwork at ports 

one of the established benchmarks for success?

Answer. USAID focuses significant attention to the issue of trade facilitation, particularly reducing the time and cost to move goods. USAID trade facilitation activities include active support for customs and border management reforms at border 

crossings, ports, and along major transit corridors. In addition, USAID has worked 

closely with USTR to support the WTO negotiations on a Trade Facilitation Agreement. In particular, USAID recently launched the Partnership for Trade Facilitation, which is working with 17 countries to respond quickly to requests for assistance from trade and customs authorities for help with implementing aspects of the 

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proposed WTO agreement on trade facilitation. Additional efforts to improve trade 

facilitation are also being carried out by USAID’s Africa trade hubs to promote both 

United States-Africa trade as well as intra-African trade. Specific indicators tracked 

in many USAID trade facilitation projects include the time, number of procedures 

and cost (including informal payments) to clear goods through customs and border 

agencies or to move goods along major transit corridors.

♦ (e) How do you identify, with the help of the business community, specific areas 

where aid could be best applied?

Answer. USAID’s country and regional development strategies are primarily 

developed by its field missions, which seek input from host country private sector 

stakeholders. USAID/Washington also plays an active role in the development of 

these assistance strategies and contributes input that reflects U.S. private sector 

views and concerns as identified by USTR through its statutory private sector consultative process—the Trade Advisory Committee system.

♦ (f) What is the process for seeking their input?

Answer. In 1974, Congress created the trade advisory committee system to ensure 

that U.S. trade policy and trade negotiating objectives adequately reflect U.S. public 

and private sector interests. The advisory committee system consists of 28 advisory 

committees, with a total membership of approximately 700 citizen advisors. 

USTR’s Office of Intergovernmental Affairs & Public Engagement (IAPE) manages the advisory committees, in cooperation with other agencies, including the 

Departments of Agriculture, Commerce, and Labor, and the Environmental Protection Agency. 

AFGHANISTAN/DEVELOPMENT IN WAR ZONES AND CONTINGENCIES

Question. The Special Inspector General for Afghanistan Reconstruction (SIGAR) estimates that there is about $10 billion in assistance given to Afghanistan annually, yet the government raises only about $2 billion in revenue. In your estimate, 

what is the gap between foreign assistance flowing into Afghanistan to start and 

maintain reconstruction and stabilization projects and the revenue the Government 

of Afghanistan can be expected to accumulate in a given year? What is the plan to 

overcome this challenge going forward?

Answer. The World Bank estimates the financing gap could reach as high as 40 

percent of the Afghan Government’s budget in 2017 (including security costs), then 

drop to around 25 percent in 2021 assuming an increase in mining revenues. The 

current financing gap is estimated at 5.3 percent of GDP (2012), which continues 

to be financed entirely by donor grants. The fiscal sustainability ratio, defined as 

the percentage of operating expenses covered by domestic revenues—was 59 percent 

for FY 2012. Domestic revenues financed approximately 40 percent of the operating 

budget and the development expenditures. 

In 2011, the Ministry of Finance reported that the Government of Afghanistan 

collected more than $2 billion in revenues for the first time ever, representing more 

than a 140-percent increase since 2008. Customs accounted for about 48 percent of 

the revenues. Domestic revenues increased by 7 percent in 2012, reaching US$2.15 

billion. The World Bank reported that the Afghan Government expects domestic revenues to increase to US$2.5 billion (11.6 percent of GDP) this year, with increases 

in all sources of revenue. This could finance approximately 65 percent of the operating expenditures, with the remainder to be financed through donor grants. 

Donors have committed to cover the financing gap for several years. Pledges from 

all donors at the July 2012 donor meeting in Tokyo totaled $16 billion in development aid to Afghanistan over 4 years. Together with earlier pledges on the security 

side, annual aid would amount to about $8 billion—divided roughly equally between 

civil and security aid. 

USAID is continuing to work with the Government of Afghanistan and the international donor community to improve trade, strengthen customs, and support the 

Ministry of Mines in managing natural resource extractions. In addition, USAID’s 

agriculture strategy is focused both on food security and high-value exports. These 

efforts are supporting the Government of Afghanistan in growing its public revenue 

and manage expenditures so it can better manage its own financing needs.

Question. In its final report, the Special Inspector General for Iraq Reconstruction 

concluded that: ‘‘The U.S. Government is not much better prepared for the next stabilization operation than it was in 2003.’’ Do you agree with that assessment? If not, 

why not?

♦ (a) As a government, do we require a different approach to planning and implementation in reconstruction and stabilization circumstances? 

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♦ (b) Are structural changes needed at USAID, in the interagency coordination 

structures, or within specific programs?

Answer. We respectfully defer to the Department of State’s Office of Civilian 

Response (CSO) to address the broader question of the U.S Government’s ability to 

respond to a stabilization initiative. CSO, formerly known as the Civilian Reconstruction and Stabilization Office (S/CRS), was specifically created in 2004 in the 

aftermath of Iraq. 

As to USAID’s readiness, since 2004 a number of structural changes have better 

positioned the Agency to successfully support stabilization type operations. One such 

change includes the creation of USAID’s Office of Conflict Management and Mitigation which, among other things, developed a Conflict Assessment Framework (CAF) 

in 2005 to better understand the underlying causes of conflict and instability in a 

country or region. The CAF has been updated to reflect a more nuanced understanding of these causes and has been used repeatedly by our missions in the development of new projects and strategies. Agency staff has been trained in the use of 

the CAF as well as other conflict-related subjects, making USAID staff both in 

Washington and in the field, more capable of designing programs and applying our 

development assistance support to stabilization objectives. 

In 2005, USAID launched a comprehensive human capital strategic planning process which identified the lack of depth in critical core areas such as education, 

health, and agriculture, and concluded that this was severely constraining the Agency’s ability to ‘‘surge’’ staff in support of pre- and post-conflict programs in Iraq and 

other Critical Priority Countries around the world. Staffing shortages were limiting 

USAID’s direct engagement with foreign government agencies and local partners. 

Subsequently, USAID implemented an ambitious hiring effort, the Development 

Leadership Initiative (DLI), paralleling the Department of State’s Diplomacy 2.0 Initiative, with bipartisan congressional support and increased funding. Since 2008, 

USAID has recruited approximately 800 additional Foreign Service officers through 

the DLI program who now constitute part of USAID’s ranks of technical specialists. 

Since 2010, eight DLIs have served or are serving in Iraq and 50 DLIs have served 

or are serving in Afghanistan. An increase in Foreign Service officers has better 

positioned USAID to meet our technical staffing needs abroad. 

Many lessons learned from the Iraq have been incorporated into USAID’s development assistance, including:

• Define what is needed for sustainability from the start by ensuring that the 

host country beneficiaries are involved in setting priorities and developing the 

capacities within their societies to lead their own development. In some cases, 

the host country was not involved in the planning stage of an activity and the 

activity was less successful. 

• Ensure that people sent overseas to support a mission or program possess the 

appropriate skills and experience. 

• The duration of the tour is critical to ensuring the sustainability and continuity 

of programs.

An example of where USAID has incorporated sustainability into its programming 

is Iraqi Government cost-sharing. Over the past year, the Iraqi Government, 

through several Memoranda of Understanding, has committed to cost share important USAID activities. This demonstrates both the Iraqis’ willingness to pursue critical development objectives and invest their own resources into their own development. This has enabled USAID to redirect resources to strengthen Iraqi governing 

institutions, promote private sector development, and assist vulnerable populations 

such as ethnic and religious minorities, internally displaced persons, female-headed 

households and youth. 

In Afghanistan, all projects, both current and planned, must undergo an analysis 

to determine (1) Afghan ownership; (2) cost/program effectiveness; and (3) contributions to stability. Through the Accountable Assistance for Afghanistan (A3) initiative, USAID is carrying out a 100-percent audit of all locally incurred costs, expanding monitoring and evaluation capacity to include hundreds of USAID onsite 

monitors in the field, and has placed limits on the number of subcontractor tiers. 

HOST NATION RECONSTRUCTION/INFRASTRUCTURE SUSTAINABILITY

Question. How does USAID collect and record information from nations receiving 

U.S. foreign aid about their abilities to pay for the maintenance or expansion of 

infrastructure we have funded?

Answer. USAID receives and analyzes information regarding recipient nations’ 

ability to pay for the maintenance or expansion of U.S. foreign aid funded infrastructure construction activities through the completion of a Foreign Assistance Act 

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of 1961 Section 611(e) certification process. When a capital assistance project is proposed, and total U.S. assistance for it will exceed $1 million, the Mission Director 

must review and certify a country’s capability to effectively maintain and utilize the 

assistance. Pursuant to section 611(e), the certification is then forwarded to the 

cognizant Assistant Administrator, as delegated by the Administrator, for consideration. During project design, an analysis of the capital cost and operation and 

maintenance costs along with an analysis of host country technical and financial capability to operate and maintain capital projects is undertaken. The project design 

includes training and institutional reform components to increase the capability of 

the host country to operate and maintain the facility that is being financed, and 

often continues after the facility is constructed.

Question. What policies and procedures does USAID have in place to prevent the 

funding of projects that, when added to the aggregate of USAID projects in the same 

country, would be beyond the capability of the host nation to raise sufficient 

resources domestically to maintain the work that we have funded?

Answer. As part of USAID Forward reform efforts to strengthen the Agency’s 

project design process, all missions must complete a mandatory sustainability analysis that assesses the host country’s ability to sustain the development gains that 

would be achieved through the project. The sustainability analysis should include 

a review of the financial implications of the project. For any organization to be sustained following completion of the project (whether governmental or nongovernmental), a recurrent cost analysis must be undertaken that estimates the costs of 

operations during the project and of continuing expected functions at the end of the 

project and estimated sources of revenue. The recurrent cost analysis should take 

into consideration maintenance capability and all other costs anticipated to implement the project activities, business operations or infrastructure on a continuing or 

recurring basis. 

HIRING VETS

Question. The most recent version of the Office of Personnel Management report 

on federal veteran employment claims that just 7.2 percent of USAID employees are 

veterans, making the agency the third-lowest in the executive branch for percentage 

of veterans on staff. Given that many of our veterans’ experience in contingency 

environments seem to match exactly with the current needs of USAID programs 

still ongoing in contingency environments, what do you think contributes to such 

low levels of veterans in the ranks of USAID employees?

Answer. Veterans have greatly contributed to the Agency and work in myriad professional and administrative positions in the United States and overseas. There has 

been a significant increase in USAID’s data on veterans since the issuance of the 

OPM report. Currently, there are 356 veterans employed at USAID (9.3 percent of 

the Agency’s total workforce). Indeed, veterans account for 14.6 percent of the Agency’s Civil Service employees (251 veterans) and 4.9 percent of our Foreign Service 

staff (105 veterans). In addition, the Agency is trending well above its FY 2013 veteran hiring goals of 15.3 percent for veteran new hires and 4.7 percent for disabled 

veterans. As of May 2013, 24 percent of USAID’s new hires were veterans and 6 

percent have been disabled veterans. As discussed in response to the Question 

below, the Agency will continue its efforts to increase the number of veterans in the 

Agency.

Question. Beyond that mandated by the President’s Veterans Employment Initiative, has USAID implemented any additional programming for veterans?

Answer. USAID has implemented a number of aggressive strategies to increase 

the number of veterans in the Agency. We began by hiring a full-time employee as 

our Veteran Employment Program Manager. The Program Manager has initiated a 

robust referral program that targets veterans for vacancies as soon as they occur. 

The referral program has allowed veterans to be referred for consideration prior to 

the posting of a job announcement. As a result, 30 percent of all veterans hired in 

FY12 were referred from this highly successful program. In addition, USAID sponsors quarterly Federal Employment Workshops at our headquarters, at no cost, for 

separating and retiring military members and spouses. We have also increased the 

number of veterans hired through our formal Student Internship Program, as well 

as by partnering with a wide variety of Military Transition Assistance Programs 

and Veterans Rehabilitation Organizations.

Question. As USAID continues to have significant involvement in contingency 

zones, its projects demand exceptional leadership and character on the part of 

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USAID personnel. Have veterans enabled USAID to more effectively carry out contingency missions?

Answer. Our veterans’ previous military experience has allowed them to transition directly into positions conducting development and diplomacy in contingency 

zones and other locales. For example, during FY12, USAID hired 13 veterans as 

Foreign Service Limited Officers to work on critical priority programs in Afghanistan, Pakistan, and Yemen. Their work has indeed enabled the Agency to be effective in carrying out its mission.

Question. By virtue of their service, veterans bring a unique and valued perspective to any government agency. In what ways do you think an increase in veteran 

employment at USAID would have on the culture of USAID?

Answer. Veterans hired by USAID have contributed greatly to our mission. Their 

discipline, work ethic, and leadership skills, coupled with the USAID-specific technical skills they have learned, make them well suited for a variety of positions at 

USAID. Veterans at the Agency are currently working in occupations such as acquisition, information technology, communications, security, human resources, engineering, public policy, finance, and education.

Question. Please describe any specific plans you have to increase the hiring of veterans by USAID.

Answer. USAID will continue to implement a number of strategies to increase the 

number of veterans in the Agency. Specifically, we will continue to increase veteran 

hiring by improving the following:

• Continue to sponsor USAID Federal Employment Workshops onsite at no cost 

for separating/retiring military and spouses; • Support the Operation Warfighter and Wounded Warrior Programs; • Continue to develop our partnership with the Department of Veterans Affairs 

Vocational Rehabilitation & Employment Program; • Increase the number of veterans hired as interns through the Pathways Program; • Expand the Agency Veterans Hiring Database and usage of OPM’s Shared 

Database of People With Disabilities • Continue to participate in Military Transition Assistance Programs (TAP); and • Increase hiring of veterans through the Foreign Service Junior Officer Program. 

This vital program brings qualified applicants into the Agency’s Foreign Service 

to assume positions of increasing responsibility for planning, implementing, and 

managing USAID’s economic and humanitarian assistance programs. 

CLIMATE CHANGE

Question. USAID’s budget fact sheet states that $481 million is requested for the 

Global Climate Change Initiative ‘‘implemented in partnership with the Department 

of State.’’ Of this, how much funding is requested for USAID?

Answer. Of the $481 million request for the Global Climate Change Initiative in partnership with the Department of State, $349 Million is being requested for 

USAID.

Question. What dollar amount of FY 2014 USAID climate change funding is going 

to the United Nations and affiliated agencies? How much was provided in FY 2012?

Answer. It is too early to tell how much USAID climate change funding may be 

implemented through United Nations (U.N.) programs in FY 2014. In FY 2012, 

USAID did not provide direct climate change funding to United Nations agencies 

or programs.

Question. In the past 10 years, how much climate change funding has USAID 

spent on programming for peer-to-peer interaction and information-sharing (e.g., 

conferences, Web sites, exchanges, fellowship, etc.)? What specific advances have 

been made in U.S. development goals through these types of initiatives?

Answer. Addressing climate change depends on having the best available data 

and tools and knowing how to apply them. USAID has made this type of assistance 

a priority to help expand the knowledge base and more broadly and effectively share 

information. Several of our approaches to climate assistance have been delivered 

through the types of mechanisms that you reference, particularly peer-to-peer 

knowledge-sharing and information-exchanges. 

For example, SERVIR Global, USAID’s partnership with NASA, works with scientists and decision makers around the world to provide training and access to satellite and geospatial data and applications. These applications are being used to predict a range of natural hazards, from red tide blooms in El Salvador to stream flows 

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in Kenya to forest fires in the Himalaya region. Over the past 10 years, USAID has 

programmed approximately $29 million, with NASA also providing approximately 

$22.4 million, to develop and sustain this information sharing tool. In 2011, the 

Environment Minister for El Salvador estimated that the red tide information available from SERVIR averted $14 million in losses. In Africa, SERVIR has developed 

early warning tools for Rift Valley Fever, a vector-borne disease. In an effort to 

increase evidence-based decisionmaking among countries, USAID is expanding this 

partnership in west Africa and Central Asia in FY 2013. 

USAID does not distinctly capture these approaches collectively as an indicator 

or reporting category within climate funding.

Question. What are the overall objectives of the climate change programs? What 

are specific outcomes (not outputs) USAID aims to achieve? How will you measure 

progress and determine success or failure?

Answer. USAID’s 2012 Climate Change and Development Strategy defines three 

objectives: (1) reducing greenhouse gas emissions by accelerating targeted countries’ 

transition to low emission development through clean energy and sustainable landscape use (mitigation); (2) increasing the resilience of people, places and livelihoods 

to climate change (adaptation); and (3) integrating climate change considerations 

into USAID’s programs, policies and operations (integration). 

Regarding outcomes and related measures, USAID assistance is refining the 

development of a series of indicators against which we will assess the success of our 

climate change programming. For example, USAID will assess: (1) whether assisted 

countries prepare greenhouse gas inventories and sustain the quality of those inventories; (2) whether partner countries’ national and subnational development plans 

are informed by climate change analysis and include mitigation and/or adaptation 

actions; (3) the extent to which stakeholders are using climate information in their 

decisionmaking; and (4) tracking increased leverage of public and private sector investment devoted to climate change mitigation and adaptation as a result of USG 

assistance. 

USAID is engaging in an organized effort with other donor and implementing 

agencies to explore ways to assess the capacity of individuals, households, and institutions to adapt to climate change. With the help of evaluations, such analysis will 

allow for the assessment of impact of adaptation assistance in post-disaster situations, as well as create opportunities to strengthen the predictive quality of the outcome measures outlined above. 

RESPONSES OF ADMINISTRATOR RAJIV SHAH TO QUESTIONS SUBMITTED

BY SENATOR BARBARA BOXER

GENDER-BASED VIOLENCE STRATEGY AND INDIA

Question. It is my understanding that you traveled to India last month to focus, 

at least in part, on violence against women. So I am certain that you are aware of 

the heartbreaking stories that have emerged out of India recently, including the 

gang rape of a 23-year-old woman on a bus last December. Her injuries were so horrific that she later died of them. A Swiss tourist was also gang raped by five men 

while traveling with her husband. And just last week, a 5-year-old girl was kidnapped, repeatedly raped, and nearly killed. These cases—as well as others—have 

garnered significant international attention and sparked protests within India.

♦ How is USAID working in India to help address rape and other forms of genderbased violence? 

♦ Is there more that we could be doing, especially in light of the recently 

announced U.S. Strategy to Prevent and Respond to Gender-Based Violence 

Globally?

Answer. USAID shares your strong concern about gender-based violence and violence against children in India. 

Our approach in India and other countries around the world is to work across sectors to identify and close gender gaps wherever they exist, because we recognize the 

broader benefits that arise when women are able to realize their rights and determine their own outcomes. USAID/India’s goal is to enhance women’s leadership and 

gender equality in all program sectors in which we work, including health, clean 

energy, and agriculture programs, and identify entry points in each of these sectors 

to address gender-based violence and other barriers to gender equality. 

In India, we are working through a variety of partnership mechanisms to identify 

innovative approaches to combating gender-based violence (GBV) that build on local 

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knowledge, Indian innovation, and show the potential for scale and replication in 

India and around the world. 

USAID is partnering with Care, ITVS—the independent television station, and 

the Ford Foundation to support Women and Girls Lead Global. In India, this program is working to engage men and boys and change their attitudes and behaviors 

related to GBV. USAID is partnering with U.N. Women to implement the Safe Cities program in New Delhi—an innovative program that employs a gender empowerment approach to the issue of urban planning and infrastructure development. The 

goal is for girls and women to reclaim their right to public spaces. Further, we are 

working through our health programming in India to identify entry points in patient 

care where front line health workers are equipped in a systematic way to identify 

GBV in patients as well as counsel them and refer them for care. 

The U.S. Strategy to Prevent and Respond to Gender-Based Violence Globally is 

a milestone in solving this critical problem and USAID has developed an implementation plan to realize the goals of the strategy, yet there is always more to be done. 

USAID appreciates the efforts and coordination of many U.S. Government agencies 

at home and abroad to implement this strategy as well as the advocacy from senior 

leadership across the government. 

MALALA YOUSAFZAI AND PAKISTAN

Question. Earlier this year, I introduced the Malala Yousafzai Scholarship Act 

with Senator Landrieu. Specifically, it would build upon an existing USAID-funded 

scholarship program for disadvantaged Pakistani students by increasing the number 

of scholarships awarded each year by 30 percent and requiring that all of these new 

scholarships be awarded to women. To date, only 25 percent of the program’s scholarships have gone to women.

♦ Will you commit to working with me to ensure that Pakistani women are given 

full and equal access to USAID scholarship programs? 

♦ What more can the United States do to expand educational opportunities for 

women and girls in Pakistan and around the world?

Answer. USAID is committed to ensuring that Pakistani women are given full and 

equal access to USAID-funded scholarship programs. USAID specifically supports 

the goal of increasing the number of scholarships available to Pakistani women 

under USAID’s Merit and Needs-Based Scholarship Program (MNBSP). The 

MNSBP provides scholarships for Pakistani students to attend bachelor’s and master’s degree programs at Pakistani universities, targeting underserved populations, 

including women. 

Based on an overall positive independent evaluation of the MNBSP issued in 

August 2012, USAID is making several programmatic adjustments to reach that 

goal. These adjustments are scheduled to take effect for university enrollment in 

September 2013. Among these adjustments are targeting of the distribution of scholarships to women for entrance into the fall 2013 matriculation at 50 percent; this 

is 4 percent above the ratio of women attending university as a percentage of the 

university-going population (46 percent). In order to reach the 50 percent target, 

USAID is expanding disciplines of study from agriculture and business to a wide 

variety of fields popular with women from chemical engineering to journalism. 

USAID is also expanding the university pool to include five women’s universities. 

In addition, in our other scholarship programs in Pakistan, we have set a 50 percent 

target for scholarship awards to women. 

Scholarship programs are only one aspect of USAID’s education initiative in Pakistan. In many areas parents will only send their girls to schools with an all-female 

teaching staff, so increasing the number of women teaching will expand access to 

education for girls. To ensure more girls have the opportunity to pursue basic education, USAID is working to mobilize communities to increase girls’ enrollment in 

school and training female teachers, which encourages families to send their girls 

to school. USAID is also constructing or rehabilitating over 185 girls’ schools in 

Sindh, FATA, Khyber Pakhtunkhwa, and Balochistan. To address the challenges of 

educational quality, which impacts access, USAID will be transforming the way 

classroom teachers teach and assess reading over the next 5 years by working with 

universities and colleges on new degree programs in preservice teacher education 

as well as working with in-service teachers. 

Similarly, USAID is working to expand opportunities for women and girls worldwide. In 2012, the Agency adopted a new policy on Gender Equality and Female 

Empowerment, which includes equal access to education as part of its vision. Among 

the requirements under this new policy are that gender equality and female 

empowerment must be integrated throughout the program cycle: in policy and stratFOREI-43947 with DISTILLER

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egy formation, project design and implementation, and monitoring and evaluation. 

USAID’s Automated Directives System, which dictates operational policy, also 

requires gender analyses to guide long-term planning and project design so that 

men and women experience an equal opportunity to benefit from and contribute to 

economic, social, cultural, and political development; enjoy socially valued resources 

and rewards; and realize their human rights. 

Taken together, these efforts along with those that the Agency has undertaken 

around the National Action Plan on Women, Peace and Security, preventing 

Gender-Based Violence, ending Child Marriage and Countering-Trafficking in Persons, provide a global approach for the empowerment of women. 

CLIMATE CHANGE

Question. Numerous statements and studies from the defense and national security communities have warned that climate change and its impacts—from extreme 

events to sea-level rise to water and food scarcity—will create political instability, 

especially in the poorest and least able to adapt countries.

♦ How will funding the President’s budget request for the Department of State 

and USAID’s efforts on global climate change help prevent and mitigate such 

impacts and assist U.S. national security priorities?

Answer. Global climate change has the potential to significantly alter the relationships between people and their environment. It could undermine the resource base 

upon which people have built their livelihoods and sociopolitical institutions. However, there remains little certainty over exactly how these changes will be manifested in specific events and locations and what the consequences will be in terms 

of economic development, political stability, peace and security. It has therefore 

become a priority for USAID to help build an evidence base about the relationship 

between climate, resources, and conflict and to be able to knowledgeably inform both 

development policy and programming, especially when working in fragile and conflict affected areas. 

USAID recognizes at least three ways by which climate change could potentially 

contribute to armed conflict or violent social unrest: (1) climate change could intensify existing environmental or resource problems (whether due to scarcity or abundance); (2) climate change could create new environmental problems that contribute 

to instability; and (3) the introduction of climate-related resources and financing 

could interact with existing grievances and fault lines in counterproductive or 

destructive ways. 

USAID and other development organizations have recognized these risks and 

have widely accepted the need to be ‘‘conflict-sensitive’’ in climate-related interventions. The FY14 foreign assistance request includes funds for the collection of 

needed data and for adaptation funding as a critical component of the climate 

change program. 

We believe our adaptation programs will play a critical role in helping prevent 

and mitigate instability caused by the impacts of climate change. USAID adaptation 

programs seek to make early and smart investments to build the resilience of vulnerable communities and reduce many of the negative impacts of climate change. 

Adaptation funds are targeted at the poorest and most vulnerable countries, both 

in terms of exposure to physical impacts of climate change and socioeconomic sensitivity to those impacts. USAID’s Climate Change and Development Strategy 

prioritizes small island developing states, glacier-dependent nations, and least 

developed countries, especially in Africa, for adaptation investment. The Global 

Climate Change Initiative is a critical component of USAID’s Resilience Strategy; 

considering the current and future effects of climate change allows us not only to 

better predict, prepare for, and respond to shocks and stresses (e.g., hurricanes, 

flooding, and droughts) but also to improve planning for the long-term stresses of 

climate change.

Question. As we have seen here in the United States, extreme weather events 

associated with climate change are increasing in their number and impact. The frequency and intensity of these events will only increase. The poor and countries least 

able to adapt are the most vulnerable to extreme events and other climate change 

impacts such as sea-level rise, water and food scarcity, and shifting seasons and disease vectors.

♦ How will funding the President’s budget request for the Department of State 

and USAID’s global climate change efforts help prevent and mitigate the 

impacts of climate change on the world’s most vulnerable people and nations?

Answer. FY 2014 adaptation funding will bolster the Global Climate Change Initiative’s efforts to increase the resilience of vulnerable communities to climate 

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threats, and preserve hard-won development gains in democracy, food security, 

health, economic growth, and natural resource management. Through adaptation 

programming, the United States is contributing to stability and sustainable economic growth in developing countries, preventing loss of life, and reducing the need 

for post-disaster assistance. 

With FY 2014 resources, USAID will support on-the-ground programs that rigorously test the effectiveness of adaptation actions, disseminate lessons learned and 

catalyze their widespread adoption to build resilience across communities, countries, 

and regions. Adaptation funding will also be used to support strategic investments 

in science and analysis for decisionmaking, and tools and platforms that can be used 

in multiple countries around the world. For example, USAID will continue to extend 

climate forecasting technology systems, such as the Famine Early Warning System 

and SERVIR, to help vulnerable countries adapt and respond to shocks.

• The USAID-supported Famine Early Warning System Network (FEWS NET) is 

an information system designed to identify problems in the food supply system 

that potentially lead to famine or other food-insecure conditions in sub-Saharan 

Africa, Afghanistan, Central America, and Haiti. The USGS FEWS NET Data 

Portal provides access to geospatial data, satellite image products, and derived 

data products in support of FEWS NET monitoring needs throughout the world. 

This portal is provided by the USGS FEWS NET Project, part of the Early 

Warning and Environmental Monitoring Program at the USGS Earth Resources 

Observation and Science (EROS) Center. (http://early.warning-usgs.gov/fews/

index.php) FEWS NET predicted a recent drought in Africa and allowed donors 

to take quick action before the worst conditions set in. In those areas that were 

expected to be hit the hardest, USAID helped households with ‘‘commercial 

destocking’’—selling off some livestock while the prices were still high, which 

helped families bring in enough income to feed themselves and their remaining 

livestock. USAID also prepositioned significant amounts of food and nonfood 

commodities and worked to rehabilitate wells before the worst drought conditions, preventing the need to launch expensive water trucking efforts in those 

regions.

In Mozambique, USAID will help vulnerable coastal cities incorporate climate 

change projections into their planning processes and implement adaptation measures to reduce risks associated with sea-level rise, flooding, storms, and erosion; 

direct beneficiaries will include municipal governments, local communities, nongovernmental organizations, and faith-based organizations. In the Dominican 

Republic, USAID will build on a new partnership with reinsurer Swiss Re to make 

an affordable tailored weather index insurance product commercially available to 

small farmers who are currently unable to make optimal productive investments 

due to increasing risks of drought or flooding. Hundreds of Dominican farmers will 

also receive training and technical assistance on climate change, financial management, and the design and application of farm-level risk reduction measures. USAID 

has built an impact evaluation around this project in the Dominican Republic, and 

will be gathering evidence of the effectiveness of this holistic risk management 

approach over the next 2 to 4 years. 

USAID programs will also promote effective governance for climate change adaptation, by helping governments integrate climate resilience into development planning, and building the capacity of civil society organizations and the private sector 

to engage in policymaking processes. 

Adaptation resources will be spent in the vulnerable countries and communities 

that need them most. The Global Climate Change Initiative prioritizes adaptation 

funding for least developed countries, especially in sub-Saharan Africa, small-island 

developing states, and glacier-dependent countries. 

RESPONSES OF ADMINISTRATOR RAJIV SHAH TO QUESTIONS SUBMITTED

BY SENATOR RON JOHNSON

Question. Foreign assistance is an important component of America’s foreign and 

defense policy. I am proud of the fact that we portray American values around the 

world, and when done effectively and strategically, it is money well spent. At the 

same time, however, we have a responsibility to ensure that taxpayer funds are 

being spent in the national interest, and our allies and partners have not always 

been reliable. The American public has become more skeptical of aid, and in some 

cases, with good reason.

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♦ In your opinion, what is the best way of holding accountable recipients of U.S. 

assistance, while also understanding the reality of difficult situations, whether 

discussing Egypt, Pakistan, Syria or others?

Answer. USAID is committed to accountability, transparency, and oversight of 

USG funding and we have a number of mechanisms for ensuring that resources are 

not lost to waste, fraud, or abuse throughout development assistance implementation, as follows:

• Pre-Award: Contracting and Agreements Officers (CO/AO) make a determination whether a contractor/recipient is sufficiently responsible in terms of financial capabilities to account for funding, and have the ability to carry out or 

perform the work, under an award. This process is known as ‘‘a pre-award 

responsibility determination.’’ As part of the Request for Proposal/Application 

process, CO/AOs also ensure that regulatory language enabling oversight and 

performance monitoring is included in each award. This language comes from 

the Federal Acquisition Regulation, the Office of Management and Budget 

(OMB) Circulars and/or Agency operational policy. Finally, performance indicators and metrics linked to the desired results are also included in the awards. • Post-Award: During the period of performance for an award, USAID performs 

myriad activities to ensure award compliance. Contracting/Agreement Officer’s 

Representatives COR/AORs review and approve awardee vouchers for invoices 

submitted, conduct site visits, and enable third-party program and project evaluations. They also monitor performance through reporting, meetings, and general oversight of the work being performed. COR/AORs formally document any 

material deficiencies in performance. This documentation triggers immediate 

action by an Agency CO/AO which may ultimately include recommending that 

the vendor not be paid. Additionally, we use financial systems and controls, as 

well as internal and independent audits to enable the Agency to effectively 

manage, track, and safeguard funds before they are disbursed. 

• Award Close-out: Like other federal agencies, USAID uses the Contractor Performance Assessment Reporting System (CPARS) to formally record data about 

contractor performance. CORs are responsible for compiling and entering past 

performance data into CPARS annually. Additional USAID mechanisms are 

also in place to evaluate contractor performance including the post-performance 

audit process and the Office of the Inspector General to whom any instances 

of suspected waste, fraud, or abuse are promptly referred.

In February 2011, USAID stood up a Compliance Division within the Bureau for 

Management’s Office of Acquisition and Assistance (M/OAA) to serve as the central 

repository for any and all referrals of administrative actions, including suspension 

and debarment actions. In just its first year the Division issued 102 administrative 

actions and recovered nearly $1 million. For this achievement the Agency was recognized by the Office of Management and Budget in 2012 as a success story:

‘‘The Agency debarred 16 people in 2012 for their participation in a 

scheme to submit fraudulent receipts for the administration of federal foreign assistance to support public health, food aid, and disaster assistance 

in Malawi. By working with its recipient organization to assure that the unlawfully claimed funds were not reimbursed, USAID was able to avoid 

waste and abuse of taxpayer funds designed to provide vital assistance to 

a developing country.’’—‘‘Taking Contractor Accountability to the Next 

Level,’’ September 18, 2012 (http://www.whitehouse.gov/blog/2012/09/18/taking-contractor-accountability-next-level).

With respect to audit mechanisms and accountability standards, U.S.-based grantees are subject to OMB Circular A–133 and U.S. contractors are subject to FAR 

52.1215–2 and 52.216–7. For all foreign-based recipient entity types, including contractors, grantees and host government entities, audits are conducted in accordance 

with USAID Inspector General (IG) guidelines. The USAID IG guidelines were 

derived directly from U.S. Government auditing standards for implementation in 

the overseas, developing country context in which USAID financed performance 

takes place. The most notable difference between USAID audits on non-U.S. entities 

and U.S. entities is that a lower annual audit threshold is used for non-U.S. recipient entities—$300,000 in annual expenditures instead of the $500,000 threshold applicable by OMB to U.S. entities. Also, in most cases, foreign contractors and grantees and host governments are audited by independent, private sector auditors using 

the USAID IG guidelines. However, pending USAID IG concurrence, audits on host 

government implementing entities may also be carried out by host government 

Supreme Audit Institutions. Such audits must comply with one of the following 

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tion of Supreme Audit Institutions (INTOSAI); (3) International Auditing Practices 

Committee of the International Federation of Accountants (IFAC).

Question. The issue of branding—making sure recipients know who is sending the 

assistance—has been discussed several times before this committee, most recently 

regarding aid to Syrians.

♦ What is your assessment of the branding of American aid to Syria? Also, please 

explain our branding efforts globally, including where there are areas for 

improvement.

Answer. The U.S. Government requires NGO partners to brand our assistance 

unless doing so would imperil the lives of aid recipients and the humanitarian workers delivering assistance. Recognition of U.S. humanitarian efforts inside Syria is 

severely constrained by safety and security concerns, but we continue to work to 

make our humanitarian aid more visible, including some small-scale branding of our 

assistance. In areas where it is safe to do so, including opposition-held areas in the 

north; we are able to inform local leaders and recipients about where the aid is coming from. For example, nearly all of the bakeries receiving U.S. Government flour 

in Aleppo governorate are informed that it is U.S.-donated flour. 

Because wide-scale branding is not an option at this time, we are seeking to get 

the word out in ways that do not undermine the operation: U.S. Government staff 

in D.C. regularly meet with the Syrian diaspora community to utilize its connections 

inside Syria and spread the message of USG support. We also continue to heavily 

engage with local, regional and international media, both traditional and digital, to 

illustrate the extent to which USG humanitarian assistance is reaching a wide 

range of areas inside Syria. 

In addition, we work with our international organization partners to highlight 

U.S. Government support wherever possible, and U.S. Government officials use 

every public opportunity to highlight our humanitarian assistance to the region, 

including speaking engagements, social media, and regional, national, and international media interviews. 

More broadly, since 2004, USAID has significantly improved its branding and 

marking efforts in order to drive greater awareness of America’s support in countries that receive aid ‘‘From the American People.’’

Over the past 8 years, we have seen concrete results from our efforts to brand 

and market USAID’s assistance. USAID now has the strongest and most robust 

branding and marking efforts of all bilateral donors, and we have integrated our 

branding efforts across our project design and award process to ensure consistency 

and effectiveness. 

USAID’s marking requirements, as outlined in the Code of Federal Regulations 

(22CFR226) and ADS 320 policy guidance, ensure that USAID’s visual identity is 

represented or ‘‘marked’’ on all appropriate products: food aid, clinic signs, schools, 

hospitals, training materials, and other program materials. These federal marking 

regulations are complemented by our work to ‘‘brand’’ USAID assistance—a phrase 

that broadly encompasses all of our efforts to advance America’s strategic priorities 

abroad by communicating our mission and the investments of the American people 

around the world. 

To put our branding and marking regulations into practice, USAID’s overseas 

communications officers create strategies to tailor messages and information according to each country’s specific needs and opportunities. Branding and marking plans, 

which are required of every USAID contract and grant agreement, further these 

strategies by outlining how each project will specifically apply federal marking 

requirements and communicate the message that the assistance is from the American people. 

Our communications officers also occasionally direct in-country polling surveys 

both before and after the communications efforts. Polling data results by region 

from these surveys offer an important evidence-based review of the impact that can 

be generated with the consistent application of the USAID brand. The results show 

that USAID’s branding and marking have garnered returns for the United States 

in terms of awareness and support of our efforts and policies. 

Challenges and Solutions to Improving Branding Impact 

Despite the progress made by the Agency, challenges remain in our branding and 

marking efforts and USAID continues to undertake a proactive stance in ensuring 

branding guidelines are followed. In some parts of the world, the security situation 

makes marking inherently dangerous to our employees, grantees, and program 

beneficiaries. In these cases, waivers are sought and granted when situations merit 

this action. 

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When USAID observes implementing partners not adhering to branding and 

marking requirements, we notify these partners in writing of their noncompliance 

and reiterate the mandatory requirement to observe and apply branding standards. 

USAID also retains the right to terminate agreements for noncompliance. 

Finally, regular polling and surveys of local populations are important tools to 

understanding the impact and management of our assistance programs in country. 

Missions also may monitor the local media, and coordinate closely with their respective Embassy Public Affairs Sections, to assess the general sentiment toward 

USAID’s ability to improve host country perception of U.S. political, diplomatic, economic, and security goals in country. 

USAID recognizes that effective branding and marking of American assistance 

abroad can help our Nation achieve its diplomatic, political, economic, and security 

goals. USAID also works proactively to strengthen efforts to communicate directly 

to governments, our beneficiaries, and their communities that aid is from the American people. 

RESPONSES OF ADMINISTRATOR RAJIV SHAH TO QUESTIONS SUBMITTED

BY SENATOR CHRISTOPHER A. COONS

KENYA

Question. I am convinced that USAID’s long-term commitment in support of 

democratic and electoral reform in Kenya made a significant contribution to the 

largely credible and peaceful election, but the reform process is far from complete 

and accountability must be strongly enforced.

♦ How will USAID programs help ensure that Kenya continues to implement critical reforms such as devolution, accountability, and land reform?

Answer. Support to the implementation of hard-won reforms will be central to 

assistance programs in post-election Kenya. USAID programs will continue to assist 

Kenyans by providing responsive programs which build upon years of partnership. 

Devolution and accountability will cross-cut all programs, and support for land 

reform will continue as an integral part of the mission’s agriculture programming. 

Devolution 

Kenya’s decision to devolve government systems to the county level will bring governance and service delivery closer to the people served. It will also make decisionmakers more accessible to their constituents. Devolution represents a new operational environment. All of USAID’s programming is being adjusted to work with 

traditional national ministries, new county systems and governance structures, and 

civil society. The Kenyans are making the adjustments needed across 47 new counties. Most health and education programs were already being implemented by 

devolved institutions, and the mission is reviewing how it can facilitate the adjustment to county decisionmakers by engaging with the new county governments. This 

is also true of agriculture programs under Feed the Future. In a targeted governance effort, USAID’s democracy, human rights, and governance programs support 

Kenyans with devolution by assisting national entities facilitating this reform process and providing comprehensive capacity-building for appointed and elected officials. Initial capacity-building has focused on all 47 counties and included training 

for Governors, Senators, and local assembly representatives. Over the long term, 

USAID will concentrate resources in 15 to 20 of the newly formed counties—focusing especially on strengthening new women leaders, enhancing public financial 

management, and combating corruption. Assistance will also target 100 different 

county-level civil society organizations to strengthen their capacity to oversee local 

service delivery, ensure accountability, collaborate together, and effectively represent citizen interests (especially those of marginalized groups) in county-level 

decisionmaking. 

Accountability 

Because of the high level of corruption in Kenya, USAID strives to build into all 

of its programs support for transparency and accountability. This is something that 

relies heavily on both how one does business and what is done. Thus, USAID 

adheres to regular high standards in program management and oversight through 

monitoring, evaluating, and auditing. The USAID-funded program, ‘‘Strengthening 

Institutions of Governance and Service Delivery to Entrench Transparency and 

Accountability,’’ advances the implementation of anticorruption reforms enumerated 

in Kenya’s new constitution, including laws and policies that will reduce corruption 

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gram increases participation of the various stakeholders in the anticorruption 

agenda in Kenya by promoting networking among like-minded organizations and 

state institutions, policy advocacy, and research and documentation. The program 

also supports research, including institutional systems and practices audits, and 

systematic monitoring of the performance of key institutions. Central to the program’s research work is the annual East African Bribery Index, which documents 

citizens’ experiences with corruption. Research findings are widely disseminated, 

through stakeholder organizations, the mass media, and social media. The formation 

of a more effective policy and legal framework has promoted accountability and 

transparency, resulting in a number of corruption cases that have been investigated, 

and public resources recovered. For example, recent engagement by Transparency 

International with the courts helped to clarify that Members of Parliament are 

constitutionally required to pay taxes and cannot exempt themselves from this 

responsibility. 

USAID’s future devolution program also contains several major components that 

focus on accountability, transparency, and anticorruption. Technical assistance will 

be provided to county governments to help them set up transparency mechanisms 

such as the adoption of freedom of information policies and ensuring that government proceedings are shared with the public. The program will also support the 

adoption of strong procurement, public financial management, and public engagement mechanisms. On the demand side, the program supports civil society and the 

media to advocate for reform, as well as to monitor county governments through 

instruments such as citizen scorecards and investigative journalism. 

Land Reform 

USAID engaged in land reform after the 2007 post-election violence, when no 

other donor viewed it as feasible. USAID established a pilot community land rights 

recognition model on the island of Lamu that the Ministry of Lands (MoL) adopted 

as part of its drafting of the new land laws. After the passage of the 2010 constitution, USAID supported the MoL and the Attorney General’s office to draft three new 

pieces of land legislation that passed in 2012. After executive branch delays, members of the new, constitutionally mandated National Land Commission, which was 

established by one of the pieces of legislation, were named. In addition, USAID supported women’s land rights in the contentious Mau Forest region, helping to empower women in that community and securing better livelihood options for them 

and their families. USAID continues to support the establishment of the National 

Land Commission, as well as drafting of the important Community Land Rights 

Recognition Act, because it will bring transparency to the regulations that govern 

over 60 percent of Kenya’s lands. USAID will also continue to support communitybased wildlife conservation, since 60 percent of Kenya’s wildlife resides on these 

communal lands. 

USAID’s Kenya Civil Society Strengthening Program works with hundreds of civil 

society organizations to help them effectively advocate for governance reforms, conduct civic education and peace-building activities, and improve management of natural resources. The program provided subgrants, totaling over $27 million, to 260 

organizations working to advocate for and monitor progress on important issues, 

including: elections; ethics and anticorruption; land; human rights; devolution; the 

police; judiciary; rights for women, youth and persons with disabilities; peace-building; and natural resource management. The program also assisted civil society to 

provide input and advocacy on key pieces of reform legislation. Legislation successfully enacted include: Truth, Justice and Reconciliation Bill; National Land Policy; 

Political Parties Bill; Elections Bill; Forest Act; and Wildlife Policy Bill. Partners 

continue to monitor implementation of these new laws. More than 5,000 people benefited from the improved management of more than half a million hectares of land. 

The program has created viable, profitable nature-based enterprises and natural 

resource management activities. 

In addition, USAID’s Land and Conflict Sensitive Journalism activity has trained 

dozens of news media representatives on more conflict-sensitive and objective 

reporting. Land reform, as a major source of livelihoods and of conflict in Kenya, 

has been a recurring theme covered by the activity. 

DEMOCRATIC REPUBLIC OF CONGO (DRC)

Question. Recent developments in the DRC—such as the signing of a multilateral 

Framework Agreement, appointment of a U.N. envoy, and the expanded mandate 

of MONUSCO with an intervention force—present an opportunity to make meaningful progress toward sustainable peace.

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♦ What is USAID’s role and to what extent is the DRC able to effectively absorb 

more U.S. assistance in light of its significant governance challenges?

Answer. As it becomes clearer how the Peace, Security and Cooperation (PSC) 

Framework Agreement and authorization of the Intervention Brigade will influence 

the situation in eastern DRC, USAID will be ready to assist the Congolese people 

through humanitarian assistance, recovery and development programs specific to 

eastern DRC, and programs with a broader national coverage that includes, but are 

not limited to, the east. In FY 2012, USAID programmed approximately $168 million dollars in the region. USAID can also provide strategic analysis of drivers of 

conflict. Such analysis would help inform the design of strategies and activities to 

address the root causes of conflict. 

It is our judgment that the DRC is able to absorb all of the assistance that the 

United States has requested. USAID will increasingly implement its programs in 

alignment with DRC Government priorities and in concert with Congolese partners. 

This will be a means to build local and national government capacity, strengthen 

civil society, and foster communication with and accountability to citizens, thus promoting the sustainability of service delivery and building state legitimacy. 

We will continue to press the DRC to undertake much-needed domestic reforms, 

including comprehensive security sector reform, as it committed to do in the PSC 

Framework. USAID will increase efforts to help the Government of the DRC 

(GDRC) implement decentralization, as envisioned in the 2006 constitution. Much 

remains to be done, including putting in place enabling legislation, establishing new 

institutions, and training officials. USAID and State will coordinate with stakeholders to promote electoral reform and support the GDRC to undertake credible, 

transparent, and peaceful elections—provincial and local as soon as feasible, and 

national in 2016. 

In eastern DRC, USAID already works with communities to reconcile underlying 

causes of political and socioeconomic disputes; helps extend state authority through 

work with local governments; and increases communities’ capacity to respond to 

insecurity. USAID also focuses on sexual and gender-based violence preventative 

programs and reinforcing communities’ capacity to combat sexual violence themselves. In addition, USAID projects provide psychosocial and economic support to 

allow victims to reenter society. 

USAID is helping to develop a mineral traceability program that monitors minerals from the mine to the manufacturing user, ensuring that the minerals do not 

help fund conflict. USAID and the Department of State will build on recent successes and continue working with private sector partners to demonstrate that legal, 

responsible, and economically viable trade in natural resources is not only possible 

but can be beneficial to all stakeholders in a given supply chain. As security in the 

east increases, these efforts can be expanded to benefit more communities and miners. This expansion will give the diverse actors who currently exploit the absence 

of state authority a vested interest in supporting improvements to the DRC’s 

stability. 

RESPONSES OF ADMINISTRATOR RAJIV SHAH TO QUESTIONS SUBMITTED

BY SENATOR JEFF FLAKE

Question. A school of thought exists which posits that U.S. foreign assistance is 

only effective for countries that want to change.

♦ To what degree do the programs administered by USAID take this into consideration? 

♦ The Millennium Challenge Corporation (MCC) has a pretty good success record, 

and is an organization that firmly subscribes to this school of thought. Can you 

tell me whether USAID collaborates with MCC on the lessons it has learned 

in administering foreign assistance?

Answer. USAID subscribes to the view that foreign assistance is most effective 

when it is given in the context of a full collaboration between the United States and 

a strong democratic government that is effective on behalf of all its citizens. However, it would not be in the U.S. national interest or comport with American morality to only provide assistance to people fortunate enough to live in countries with 

such governments. We cannot afford to restrict our fight against global public health 

threats like HIV/AIDS and multi-drug-resistant tuberculosis to countries that have 

the best governments, or ignore the plight of sick and starving children because 

they are not well governed. 

USAID has developed effective ways of providing assistance through civil society, 

NGOs and implementing partners when governments are not the most effective at, 

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or interested in, promoting the welfare of all their citizens, and of promoting 

improvements in democratic rights and governance that over time will produce better development prospects as well as a more secure world. MCC fills an important 

niche in U.S. Foreign Assistance. There is a healthy interchange between MCC and 

USAID on issues of aid effectiveness, and USAID and MCC perform complementary 

roles in the countries where both operate. 

USE OF OCO FUNDS

Question. FY 2012 was the first year that OCO funds were requested for State 

& Foreign Operations. In that year, Congress provided an additional $2.5 billion in 

OCO funds above what the administration requested for things like USAID operating expenses, and international development assistance.

♦ Given that OCO funds are extra-budgetary and do not count toward overall 

spending caps set forth by the BCA, does the addition of funds help or hinder 

USAID’s future years budgeting process? 

♦ Is it common that USAID would try and expend all these dollars to demonstrate 

a need for them in the next budget year? 

♦ How does USAID define ‘‘Overseas Contingency Operations?’’

♦ Does USAID plan to cease the request of OCO funds, commensurate with the 

timetable for withdrawal from Afghanistan?

Answer. The FY 2014 OCO request funds the extraordinary, but temporary, costs 

of the Department of State and the U.S. Agency for International Development 

(USAID) operations in the Frontline States of Iraq, Afghanistan, and Pakistan. This 

approach to funding extraordinary but temporary costs, which is similar to the 

approach taken by the Department of Defense, allows USAID and the Department 

of State to clearly identify the exceptional costs of operating in these countries that 

are focal points of U.S national security policy and require a significant U.S. civilian 

presence. 

The administration continues to propose a multiyear cap that limits governmentwide OCO funding to $450 billion over the 2013 to 2021 period. FY 2014 OCO funding will provide resources for the United States continuing diplomatic platform and 

foreign assistance programs, including assistance focused on foundational investments in economic growth, support of the military, political and economic transitions, and continuing the capacity-building within the Afghan Government to sustain remarkable gains made in the past decade. 

It is certainly not USAID’s practice to seek to expend all OCO funding to demonstrate a need for such funding in the next budget year. USAID’s assistance programs in Afghanistan, particularly those funded by OCO, are designed through close 

civilian-military cooperation to ensure collaboration and coordination and a cohesive 

effort in support of overarching stabilization and development objectives in Afghanistan. They are also designed and implemented in accordance with the Administrator’s Sustainability Guidance for USAID in Afghanistan: http://transition.usaid.gov/

locations/afghanistanpakistan/documents/afghanistan/sustainabilitylguidancel

final.pdf. 

CONTRACTING AT USAID

Question. An October 2012 memorandum from the Office of the Inspector General 

at USAID to your office noted some ongoing issues with projects USAID has been 

managing. For example, in Afghanistan, ‘‘forty percent of the reports issued from 

October 1, 2010, through June 30, 2012, have identified contract or project management deficiencies and noncompliance with relevant procedures or regulations.’’ In 

Pakistan, ‘‘more than 40 percent have found internal control weaknesses and noncompliance with relevant procedures or regulations.’’ In light of these persistent performance management issues:

♦ If a project does not meet specific criteria within its first year, what is USAID’s 

plan for course correction? 

♦ What are the baselines that Congress should use when evaluating whether 

USAID is meeting the goals set out for particular projects? 

♦ How heavily is performance history weighed when USAID is considering awarding a contract to a particular entity?

Answer. USAID staff develop detailed monitoring and evaluation plans as part of 

their project design process. The targets set in the project monitoring and evaluation 

plans are the basis for portfolio reviews of progress or lack thereof against targets, 

during which mission staff make appropriate course correction according to the 

context. 

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USAID continues to make strides in its ability to effectively monitor and evaluate 

its development assistance programs. The Agency has many mechanisms through 

which it sets targets and collects performance information against those targets. 

The Agency has revised its guidance on performance monitoring, requiring that missions develop a Project Monitoring and Evaluation (M&E) Plan during the design 

of new projects. This Project M&E Plan provides a framework for collecting baseline 

data as well as monitoring project performance during implementation. It is the 

baselines established for various project level indicators that missions then use during periodic reviews of project implementation to determine whether projects are 

meeting the targets that have been set against their baselines. 

USAID recently updated guidance on past performance tracking as a mandatory 

reference document to the Automated Directives System (ADS) Chapter 302 with a 

suggested weight of 20–30 percent.

Æ

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