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65–799PDF 2011

BUDGET OVERSIGHT: EXAMINING THE

PRESIDENT’S 2012 BUDGET REQUEST FOR EUROPE

AND EURASIA

HEARING

BEFORE THE

SUBCOMMITTEE ON EUROPE AND EURASIA

OF THE

COMMITTEE ON FOREIGN AFFAIRS 

HOUSE OF REPRESENTATIVES

ONE HUNDRED TWELFTH CONGRESS

FIRST SESSION

APRIL 14, 2011

Serial No. 112–43

Printed for the use of the Committee on Foreign Affairs

(

Available via the World Wide Web: http://www.foreignaffairs.house.gov/

(II)

COMMITTEE ON FOREIGN AFFAIRS 

ILEANA ROS-LEHTINEN, Florida, Chairman 

CHRISTOPHER H. SMITH, New Jersey 

DAN BURTON, Indiana 

ELTON GALLEGLY, California 

DANA ROHRABACHER, California 

DONALD A. MANZULLO, Illinois 

EDWARD R. ROYCE, California 

STEVE CHABOT, Ohio 

RON PAUL, Texas 

MIKE PENCE, Indiana 

JOE WILSON, South Carolina 

CONNIE MACK, Florida 

JEFF FORTENBERRY, Nebraska 

MICHAEL T. MCCAUL, Texas 

TED POE, Texas 

GUS M. BILIRAKIS, Florida 

JEAN SCHMIDT, Ohio 

BILL JOHNSON, Ohio 

DAVID RIVERA, Florida 

MIKE KELLY, Pennsylvania 

TIM GRIFFIN, Arkansas 

TOM MARINO, Pennsylvania 

JEFF DUNCAN, South Carolina 

ANN MARIE BUERKLE, New York 

RENEE ELLMERS, North Carolina 

VACANT 

HOWARD L. BERMAN, California 

GARY L. ACKERMAN, New York 

ENI F.H. FALEOMAVAEGA, American 

Samoa 

DONALD M. PAYNE, New Jersey 

BRAD SHERMAN, California 

ELIOT L. ENGEL, New York 

GREGORY W. MEEKS, New York 

RUSS CARNAHAN, Missouri 

ALBIO SIRES, New Jersey 

GERALD E. CONNOLLY, Virginia 

THEODORE E. DEUTCH, Florida 

DENNIS CARDOZA, California 

BEN CHANDLER, Kentucky 

BRIAN HIGGINS, New York 

ALLYSON SCHWARTZ, Pennsylvania 

CHRISTOPHER S. MURPHY, Connecticut 

FREDERICA WILSON, Florida 

KAREN BASS, California 

WILLIAM KEATING, Massachusetts 

DAVID CICILLINE, Rhode Island 

YLEEM D.S. POBLETE, Staff Director 

RICHARD J. KESSLER, Democratic Staff Director 

SUBCOMMITTEE ON EUROPE AND EURASIA

DAN BURTON, Indiana, Chairman 

ELTON GALLEGLY, California 

GUS M. BILIRAKIS, Florida 

TIM GRIFFIN, Arkansas 

TOM MARINO, Pennsylvania 

JEAN SCHMIDT, Ohio 

TED POE, Texas 

GREGORY W. MEEKS, New York 

ELIOT L. ENGEL, New York 

ALBIO SIRES, New Jersey 

THEODORE E. DEUTCH, Florida 

(III)

C O N T E N T S 

Page

WITNESSES 

Mr. Daniel Rosenblum, Coordinator of U.S. Assistance to Europe and Eurasia, 

Bureau of Central and South Asian Affairs, U.S. Department of State .......... 8

Ms. Susan Elliott, Deputy Assistant Secretary, Bureau of European and Eurasian Affairs, U.S. Department of State ............................................................ 16

Ms. Paige Alexander, Assistant Administrator, Bureau for Europe and Eurasia, U.S. Agency for International Development ............................................. 20

Ms. Nisha Biswal, Assistant Administrator, Bureau for Asia, U.S. Agency 

for International Development ............................................................................ 26

LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING 

The Honorable Dan Burton, a Representative in Congress from the State 

of Indiana, and chairman, Subcommittee on Europe and Eurasia: Prepared 

statement .............................................................................................................. 4

Mr. Daniel Rosenblum: Prepared statement ......................................................... 11

Ms. Susan Elliott: Prepared statement .................................................................. 19

Ms. Paige Alexander: Prepared statement ............................................................ 23

Ms. Nisha Biswal: Prepared statement ................................................................. 29

APPENDIX 

Hearing notice .......................................................................................................... 50

Hearing minutes ...................................................................................................... 51

Questions submitted for the record to Mr. Daniel Rosenblum and Ms. Susan 

Elliott by the Honorable Dan Burton ................................................................. 52

Questions submitted for the record to Mr. Daniel Rosenblum by the Honorable Ted Poe, a Representative in Congress from the State of Texas ............. 55

(1)

BUDGET OVERSIGHT: EXAMINING THE PRESIDENT’S 2012 BUDGET REQUEST FOR EUROPE AND EURASIA 

THURSDAY, APRIL 14, 2011

HOUSE OF REPRESENTATIVES, 

SUBCOMMITTEE ON EUROPE AND EURASIA, 

COMMITTEE ON FOREIGN AFFAIRS, 

Washington, DC. 

The subcommittee met, pursuant to notice, at 2:30 p.m., in room 

2200, Rayburn House Office Building, Hon. Dan Burton (chairman 

of the subcommittee) presiding. 

Mr. BURTON. Good afternoon. The Subcommittee on Europe and 

Eurasia will come to order. 

Last week’s budget debate between Republican leadership and 

the White House showed how divided and contentious discussions 

about our spending have become. Democrats like my colleague here 

continue to ask for bigger government than this Nation can afford. 

We don’t collect enough revenue to meet spending, and the revenue 

we do collect largely goes to paying interest on the debt which foreign nations hold. 

Contrary to the belief held by some on Capitol Hill, the average 

American doesn’t want to have excess funds to pay for a bigger government. Neither could we ask Americans to pay more, nor borrow, 

greater amounts by mortgaging the future of our society and our 

children and our grandchildren. I am sure you have all heard that. 

As our budget problems become more alarming, President Obama 

has ignored his own advisors on the debt, refusing to adopt many 

of the recommendations. Ben Bernanke, Erskine Bowles, and Alan 

Greenspan have said that the President’s spending is not sustainable. The Congressional Budget Office agrees with this assessment. 

However, the President recently handed Congress a bloated budget 

request for 2012. President Obama has already overspent by $830 

billion in the first 6 months of this year, the 2011 budget year, 

with the Congressional Budget Office projecting that the total 2011 

deficit spending will reach $1.5 trillion. By contrast, the entire debt 

that was accrued between 2000 and 2008 was only $1.76 trillion. 

So what we incurred as debt between 2000 and 2008 was not much 

more than we are incurring just this 1 year. 

So we have got a real fiscal problem. The deficit spending of the 

U.S. Government is out of control. As members of this subcommittee, we have an obligation to the American people to conduct responsible oversight of the portion of the U.S. budget under 

this subcommittee’s jurisdiction. 

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I know the State Department budget is less than 1 percent of 

GDP. I don’t understand those who point to the relatively small 

size of the State Department budget as being itself a justification. 

No amount of taxpayer money is too small to go unjustified. 

The proposal we discuss today increases the core State Depart- ment budget to $53 billion and represents an increase of 23 percent, $10 billion over the Department’s 2008 budget of $43 billion. 

And that is one of the things I know that you know we are concerned about. We want to stay as close to the 2008 budget as possible because of the overspending, and a 23 percent increase just 

isn’t going to cut it. 

I have heard from some who still want more spending, or to protect their own share of the Federal pie. And I have told them the 

same thing, that we just have to cut spending, there is no more pie 

left. 

Today, I will ask our witnesses to identify areas of essential 

spending and for them to prioritize programs and needs. And I 

know you are all qualified to do that. We must curtail some programs, even if they are noble and justified, because we just don’t 

have the money. The reasoning that we are doing great things and 

it helps our friends, those are good reasons, but we can’t justify a 

total deficit that has increased by $4.19 trillion in the last 21⁄2

years. I mean, it boggles my mind. 

We have continuously overfed a beast whose burden will consume us all, yet, there is little urgency to do anything about it. So, 

I ask everyone, Republicans and Democrats, to raise the bar of 

what constitutes justifiable spending so that ‘‘essential’’ truly 

means ‘‘essential,’’ and that the only spending done is for programs 

that are truly vital to our national interest. 

It is with relief that I see the budget request that is pertaining 

to the jurisdiction of this subcommittee, decline from previous 

years. I understand that the efforts of the State Department and 

the Agency for International Development to develop democracy, 

rule of law, and stronger government institutions, have paid off, 

meaning the need for many programs no longer exists. 

However, there still exists a need for concentrated efforts in some 

countries that continue to receive assistance. The Balkans, which 

have made great progress in the last 15 years, still need attention 

to help permanently solidify democracies and ascension into the 

transatlantic community. The Caucasus, which have greater needs, 

still struggle with diversifying economic and political relations beyond their historic connections to Moscow. And we met one of their 

Ambassadors today. 

The Central Asian countries continue to transition at a slower 

pace than anticipated, as they attempt to balance the needs for 

government reforms, protection of rights, stronger democracy and 

economic development, after years of Soviet influence. 

I recognize that reforms and development will take time as well 

as funding by the United States and the international community 

of nations. For this reason, we should be careful about how we 

spend our precious dollars. We should focus on productivity and efficiency in our work with the like-minded actors. Specifically, I applaud U.S. efforts in Kyrgyzstan, where democratic reforms offer so 

much promise. I also commend U.S. support of Georgia as it deals 

3

with, to put it delicately, a very overbearing neighbor. And, I just 

met with their Ambassador, who seems like a pretty dedicated individual. I believe in working together and providing assistance to 

countries that are like-minded in the belief that we will get the 

most return on our dollar. 

In that vein, I question the necessity to spend $72 million in 

Russia, where it seems our taxpayer dollars have little chance of 

making a lasting impact. Additionally, Ukraine, Kazakhstan, 

among others, are also concerns as to how effective our efforts can 

truly be when they and others seem to sway between democracy 

and autocracy. 

I do not advocate for boarding up USAID offices and removing 

the United States from the region. However, less can be more. 

Throwing more taxpayer dollars at problems does not guarantee favorable results. 

I thank the witnesses for being here today, and agreeing to visit 

the Hill and testify in such a turbulent time of debate between 

Congress and the Obama administration, regarding spending. 

I will recognize all four of you as dedicated public servants to the 

United States, and I will not throw any rocks at any of you. That 

is not in the script. But nevertheless, any criticism you might hear 

today is not a personal, but institutional concern. However, I do 

take exception to how American policymakers in general continue 

to spend taxpayer money so easily and at such high rates, the likes 

of which this country has never seen before. This has to come to 

an end because we are just about broke. 

[The prepared statement of Mr. Burton follows:]

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Mr. BURTON. And now I would like to recognize my friend for a 

long, long time, Mr. Engel. 

Mr. ENGEL. Thank you, Mr. Chairman. And I know that the bells 

have gone off, so I will try to condense everything. First of all, I 

want to welcome our witnesses. All have long and distinguished——

Mr. BURTON. Excuse me. I don’t want to interrupt you, but I 

have to. On the clock, we have 10 minutes until this vote is over, 

so I will try to adjourn here or recess when we have 5 minutes to 

go. Is that all right? 

Mr. ENGEL. That is good. I want to thank you for being here. And 

I am sitting in for Mr. Meeks today who has a family emergency. 

And he sends his best and he is sorry he is not able to be here. 

Mr. Burton is one of my best and closest friends, but we don’t 

agree much on politics. We do actually agree a lot on international 

politics. But domestic spending is a little bit different. I know that 

we have to tighten our belts. We can’t just keep spending and 

spending and tighten our belts. But I don’t want to be penny-wise 

and pound-foolish. 

We can spend $1 trillion on a war or on two wars or on three 

wars, or $1 billion to prevent a war. So I think that when we are 

talking about foreign assistance, I often wonder when I look and 

see all our people, our dedicated people around the world—and I 

know Mr. Burton has too—I don’t know how they do it. I just don’t 

know how we do it. 


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This is a very important time and I think that we need to put 

our money where our mouth is. I think cutting foreign assistance 

in USAID is a disaster, quite frankly, because 1 percent of the 

budget—if you ask the American people, they think it is 15 percent 

of the budget. I have seen these different surveys. So I think now, 

at a time when we have such a crisis going on in the Middle East, 

when we have difficulty with states of the former Soviet Union, 

when we have all kinds of problems, I don’t think we should throw 

good money after bad. But I don’t think that we should just, you 

know, cut for the sake of being cut. And I know that I feel very 

strongly that the whole discussion shouldn’t just be about cutting. 

Yes, it should be about cutting partially. But it really is what our 

priorities are; how, you know, how equal can we be? 

I find difficulty with tremendous tax breaks at a time we are cutting everything. I think it has got to be a balance, and that is what 

I really object to. But the chairman and I—and we have been 

chairs and ranking members for each other and we have worked 

closely together, and we don’t really disagree all that much when 

it comes to foreign policy. I believe in a robust foreign policy. I believe that the United States needs to be engaged. If we are not engaged, then our enemies will move in and they will be engaged. 

Russia is trying, time and time again—I am not saying Russia is 

an enemy, but Russia has its own interests and their interests are 

not necessarily ours. 

I chaired the Western Hemisphere Subcommittee, as did Mr. 

Burton, and we know that there are enemies in that area. We 

could start with Hugo Chavez and continue. The Chinese are always trying to invest and do these different kinds of things. So, if 

we don’t—if there is a vacuum and we don’t move in, shame on us, 

because we are really hurting our self-interest. 

So I think it is a delicate balance. You don’t want to spend 

money that you don’t have. On the other hand, you don’t want to 

pull out programs that you know are very, very important. 

So while budgets are tight, U.S. assistance to the European countries still making the transition to democracy in market economies 

is very, very important. And many countries have graduated from 

our assistance programs. The leading Central European countries, 

Poland, Hungary, Czech Republic, Slovakia, and Slovenia don’t 

need much more aid, if any at all. And still, though, some of the 

Balkan countries, the Caucasus and Central Asia, can still benefit 

from American help to strengthen their institutions and help their 

transition to a market economy. 

I would like to highlight only some of the key cooperation we 

have with our European partners. From pressure on Iran to the nofly zone in Libya, to the massive commerce and cultural exchanges, 

our relations with the region that deepen our ties, are permanent. 

We need to continue our intense involvement with the EU and 

other partners in Europe, and assistance programs I believe are 

still very important. 

One of the questions I am going to ask you—and I have been 

very much involved in the Balkans throughout the 23 years I have 

been in Congress, and I have been one of the leading supporters 

of an independent Kosovo—I will ask you about the Enterprise 

Fund because the Albanians have returned a chunk of the EnterVerDate 0ct 09 2002 13:50 Aug 04, 2011 Jkt 000000 PO 00000 Frm 00011 Fmt 6633 Sfmt 6633 F:\WORK\EE\041411\65799 HFA PsN: SHIRL
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prise Fund. It has been very successful. Albanians in Albania and 

I want to talk about establishing an Enterprise Fund for Kosovo. 

I had heard that the days of the enterprise funds were over, but 

earlier this year I have learned that we are working on one for 

Egypt. So these are some things I would like to talk about. 

I promised the chairman I would be 5 minutes or less, and I am 

going to keep my promise. And I look forward to listening to you. 

Mr. BURTON. We will stand in recess till the fall of the gavel, and 

we will be back. We have two votes. It shouldn’t be too long. 

[Recess.] 

Mr. BURTON. While Mr. Engel is coming, I will introduce our 

guests. Daniel Rosenblum is the Coordinator of the U.S. assistance 

to Europe and Eurasia in the State Department’s Bureau of European Affairs, European and Eurasian Affairs. And Mr. Rosenblum 

oversees all U.S. Government assistance to more than 30 countries 

in Europe and Eurasia, with primary focus on the Balkans and the 

former Soviet Union, including Central Asia. Welcome, Mr. 

Rosenblum. 

Paige Alexander was sworn in as Assistant Administrator of the 

Bureau for Europe and Eurasia at the U.S. Agency for International Development on January 3 of this year. Ms. Alexander 

heads USAID’s development efforts for Europe and Eurasia. Prior 

to her current position, she was Senior 

Vice President of IREX, an international nonprofit development 

organization. So thank you. 

Susan Elliott. Ms. Elliott is Deputy Assistant Secretary of Central Asia in the State Department’s Bureau of South and Central 

Asian affairs. Ms. Elliott is a career Foreign Service officer and her 

posting includes Russia, Northern Ireland, Secretary Rice’s office, 

Greece and Peru. That is interesting. They have got four countries 

with Secretary Rice right in the middle there. I don’t understand 

that. Is that a country—Secretary Rice? 

Ms. ELLIOTT. I worked on her staff in between overseas postings. 

Mr. BURTON. I understand. I am just pulling your chain there. 

Nisha Biswal is the Assistant Administrator for Asia for the 

USAID and oversees their efforts in Central Asia. Prior to her current position, Ms. Biswal was a staff member of the Foreign Operations Subcommittee on the House Appropriations Committee, and 

the director of InterAction, the largest alliance of U.S.-based development and humanitarian NGOs. I want to thank you very much 

for being here. 

I know he is on his way. Okay. As a matter of fact, there he is, 

folks. Let’s hear it for my buddy. Okay.

We will start with Mr. Rosenblum. Mr. Rosenblum, we will recognize you for 5 minutes. 

STATEMENT OF MR. DANIEL ROSENBLUM, COORDINATOR OF 

U.S. ASSISTANCE TO EUROPE AND EURASIA, BUREAU OF 

CENTRAL AND SOUTH ASIAN AFFAIRS, U.S. DEPARTMENT OF 

STATE 

Mr. ROSENBLUM. Thank you, sir. Chairman Burton, Congressman Engel, thanks for inviting us today to talk to you about our 

Fiscal Year 2012 budget request for foreign assistance to Europe, 

Eurasia and Central Asia. At today’s hearing, I hope we can give 

9

you a good sense of how our assistance programs support U.S. foreign policy interests in ways that directly relate to the security and 

well-being of the American people. 

The President’s Fiscal Year 2012 request for this region attempts 

to balance an awareness of budget constraints with a continued 

commitment to advancing stability, prosperity and democracy. Our 

request trims approximately $140 million from the budget for the 

entire region relative to our 2010 levels. My written testimony provides more detail about our request, and I would ask to submit it 

for the record. 

Mr. BURTON. Without objection. 

Mr. ROSENBLUM. In my limited time, I will try to hit the key 

points. 

First, U.S. foreign assistance to this region has helped bring 

about a remarkable foreign policy success. Twelve of the formerly 

Communist states of Central and Eastern Europe are members of 

NATO; 10 of those 12 are now members of the European Union. 

These countries are among the most stalwart allies of the U.S. in 

the world. They recognize that the generous U.S. support for their 

reform efforts in the 1990s and the early 2000s played an absolutely critical role in getting them to where they are today. That 

support also generated enormous goodwill in those countries so 

that today these are some of the most pro-American places on 

Earth. 

I would argue that the key to these successes has been consistent 

policy and resource support over the past 2 decades. The SEED Act 

and the FREEDOM Support Act were about transition from communism to democracy and free markets, and a strong commitment 

to that goal has spanned four administrations, Republican and 

Democratic, and has been supported by the Congress on a bipartisan basis. 

My second main point is that the job isn’t done. We have learned 

over the past 20 years that the line from communism to democracy 

and free markets is not a straight one. We have encountered challenges and setbacks not anticipated in the early 1990s. Those who 

wrote the SEED Act, for example, never imagined the violent 

breakup of Yugoslavia and the consequences that we are still dealing with today. The conflict over Nagorno-Karabakh, between Armenia and Azerbaijan, civil war in Tajikistan, separatist movements in Moldova and in Georgia, have all left lasting scars. 

While a few countries experienced democratic breakthroughs 

over the past decade, a greater number of former Soviet countries 

have seen major backsliding on democracy as old authoritarian 

habits reasserted themselves. 

Meanwhile, a series of transnational threats have emerged. 

Criminal groups trafficking in narcotics, trafficking in persons and 

in weapons, filled vacuums left by receding State authority. Infectious disease, such as HIV/AIDS and drug-resistant tuberculosis, 

began claiming lives. The risk of international terrorism is real, 

and porous borders of this region make it a potential conduit for 

extremists of all stripes. 

Mr. Chairman, Mr. Engel, this transition is a complicated process in which change will take longer, perhaps considerably longer 

in some countries than others. And we believe that U.S. engageVerDate 0ct 09 2002 13:50 Aug 04, 2011 Jkt 000000 PO 00000 Frm 00013 Fmt 6633 Sfmt 6633 F:\WORK\EE\041411\65799 HFA PsN: SHIRL
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ment, while not in itself sufficient, is a necessary ingredient for 

achieving that transition goal. 

Third point. We are committed to the principle that foreign aid 

is not a permanent entitlement. Our job is to work ourselves out 

of a job. All nonmilitary assistance in the region is undertaken 

with an eye to graduating aid recipients when they have achieved 

a level of economic and democratic reform sufficient to ensure continued development. Eleven countries so far have graduated from 

U.S. assistance. And over the past decade we have developed a 

methodology for phasing out assistance to the rest, based on evaluating performance data collected by various international organizations. 

And with your permission, Mr. Chairman, we will submit for the 

record further information about this methodology. 

Mr. BURTON. Without objection. 

Mr. ROSENBLUM. My fourth and final point is that we seek to always maximize the impact of the resources provided by the American taxpayer for these programs. And we do this in several ways: 

By constant monitoring and evaluation of programs so we can draw 

lessons from our past successes and failures; by seeking to get buyin from governments in recipient countries, including in a few cases 

by actually getting them to share the costs of financing our technical assistance, and we can talk more about that later if you are 

interested; and by leveraging the work of other international donors, especially the European Union and the multilateral development banks. 

Mr. Chairman, let me close by emphasizing that what happens 

in Europe, Eurasia, and Central Asia matters to the United States. 

Criminal networks, WMD proliferation, infectious disease, these 

threats have a direct bearing on the security and well-being of 

American citizens. 

We also benefit if more of these countries become stable democracies with market economies that generate growth and thereby 

create trade and investment opportunities for American companies 

and potential jobs for American workers. 

We will continue to use the resources provided to us by Congress 

and the American people in the most effective way possible, always 

mindful of the very real resource constraints affecting foreign assistance. Thank you, sir. 

Mr. BURTON. Thank you, Mr. Rosenblum. 

[The prepared statement of Mr. Rosenblum follows:]

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Mr. BURTON. Ms. Elliott. 

STATEMENT OF MS. SUSAN ELLIOTT, DEPUTY ASSISTANT SECRETARY, BUREAU OF SOUTH AND CENTRAL ASIAN AFFAIRS, 

U.S. DEPARTMENT OF STATE 

Ms. ELLIOTT. Thank you, Chairman Burton, thank you Congressman Engel. As a graduate of the Indiana University and former 


65799a_6.eps
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resident of the State of New York, it is an honor for me to testify 

in front of you today. I am glad only the two of you are here. 

Mr. BURTON. Your are a real politician. 

Ms. ELLIOTT. As you mentioned, I am the Assistant Secretary of 

State in the Department of State’s Bureau of South and Central 

Asian Affairs. I have responsibility for policy coordination with the 

countries of Central Asia. 

During my 20-year career in the Foreign Service, I have worked 

on a wide range of issues related to the countries of the former Soviet Union and have traveled extensively in the region. 

As Assistant Secretary of State Robert Blake underscored in his 

remarks to this committee last month, the United States has an 

important interest in promoting a stable, secure and prosperous 

Central Asia. Since the breakup of the Soviet Union, our primary 

policy goal in Central Asia has been to ensure that these newly 

independent countries remain sovereign and independent while 

helping them become stable, market-oriented democracies. 

The United States currently pursues a broad range of policy 

goals in Central Asia. Today, I would like to speak to you about 

the importance of the administration’s goals for U.S. engagement 

and assistance in Central Asia. 

Our first goal is to engage the countries of Central Asia to cooperate with us in stabilizing Afghanistan. We believe that Central 

Asia plays a vital role in our Afghanistan strategy. Three of the 

five Central Asian states share borders with Afghanistan, and the 

Northern Distribution Network is an increasingly important route 

for transporting supplies to our troops in Afghanistan. The Central 

Asian countries already are contributing greatly to international efforts in Afghanistan, from supplying much needed electricity, to 

providing humanitarian assistance, to supporting educational opportunities to Afghan students. A stable future for Afghanistan depends on the continued assistance of its Central Asian neighbors 

and likewise, we believe, greater peace, stability, and prosperity in 

Afghanistan will ensure a stable prosperous future for Central 

Asia. 

Our second goal is develop stronger bilateral relationships with 

the countries of Central Asia in order to make progress on democracy and human rights. In December 2009, we announced our intention to hold annual bilateral consultations with each country in 

order to deepen our engagement with Central Asia. Over the last 

11⁄2 years, we have conducted these consultations with all of the 

Central Asian states except Kyrgyzstan, whose meeting is scheduled for later this year. 

These annual bilateral consultations offer a structured dialogue 

covering a full range of bilateral priorities and result in a work 

plan to address our key priorities and outline practical steps to advance U.S. policy. While pursuing these goals is often challenging, 

our engagement and our assistance is yielding important results. 

Last week marked the 1 year anniversary of the transition to a 

new government in Kyrgyzstan, and we are grateful that anniversary passed without—passed peacefully. Our assistance in engagement with the government and people of Kyrgyzstan over the last 

year has focused on addressing ethnic violence that boiled over last 

June. We also have tried to assist them to create conditions necVerDate 0ct 09 2002 13:50 Aug 04, 2011 Jkt 000000 PO 00000 Frm 00021 Fmt 6633 Sfmt 6633 F:\WORK\EE\041411\65799 HFA PsN: SHIRL
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essary for the first democratically elected Parliament in Central 

Asia to succeed, the administration’s priority to work alongside 

other donors to bolster Kyrgyzstan’s stability and solidify democratic reforms. 

Our third goal involves combating narcotics trafficking. We are 

developing a new counternarcotics initiative that will focus on assistance to governments in the region to create counternarcotics 

task forces. Our objective is to use intelligence collection and analysis and effective investigative teams to target organized traffickers, seize and confiscate their assets and bring them to justice. 

Mr. Chairman, we agree with you that we should be careful 

about how we spend our precious resources. We view our assistance 

funding to the region to be a critical tool in accomplishing our policy goals. We envision a future in which the United States and the 

countries of Central Asia work together for peace, security, democracy, and economic prosperity. We recognize that the pace of 

change can be slow and that our assistance should support programs oriented toward long-term meaningful results. But through 

our policy engagement and targeted assistance funding, we aim to 

strengthen our ties with these important countries and their people 

and advance U.S. interests in the strategically important region. 

Thank you. 

Mr. BURTON. Thank you very much. It is nice to have an adopted 

Hoosier with us. We will forget about New York. You don’t mind, 

do you? 

[The prepared statement of Ms. Elliott follows:]

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Mr. BURTON. Ms. Alexander. 

STATEMENT OF MS. PAIGE ALEXANDER, ASSISTANT ADMINISTRATOR, BUREAU FOR EUROPE AND EURASIA, U.S. AGENCY 

FOR INTERNATIONAL DEVELOPMENT 

Ms. ALEXANDER. Thank you, Chairman Burton, Ranking Member 

Engel and members of the subcommittee. Thank you for inviting 

me here today to discuss USAID’s successes in Europe and Eurasia, the persistent development challenges, and our future direction in a period of resource constraints. 

The President’s Fiscal Year 2012 budget request for Europe and 

Eurasia builds on the momentum of reform. It seeks to entrench 

stability and addresses the key challenges that inhibit full democratic and economic transitions in the region. Reflecting on the 

tight budget environment, successes in key areas, and the need to 

fund other global priorities, the President’s request represents a 

significant decline in resources from previous years. Twenty years 

of USAID engagement in Europe and Eurasia has produced sustainable democratic and economic transitions in 11 of the original 


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24 countries that received assistance; 17 countries have joined the 

WTO, 10 have acceded to the European Union, and 23 have joined 

NATO. Once our opponents in the Cold War, the former Eastern 

Bloc States have graduated from assistance and are now among the 

strongest supporters of U.S. foreign policy objectives. 

We continue to advance transitions by actively building on sustainable partnerships and addressing key challenges that further 

U.S. national security interests as well as our economic interests. 

USAID assistance prevents instability and fosters these emerging 

markets. We have seen that the ability of other countries to weather global economic crises directly affects the U.S. economic stability 

in this globalized market. 

USAID promotes broad-based economic growth to create the 

American markets of tomorrow by building local entrepreneurship 

and innovation, and strengthening institutions in investment environments. We are confident that the resources that the U.S. interests invest in this region will continue to provide a strong return 

on investments and help achieve our core policy objectives. 

As Dan laid out four major assistance goals, I would like to reiterate the President’s request which reflects our commitment in the 

region and issues that both of you mentioned. 

Partnership with Russia as an emerging donor, while pressing 

for respect of universal values and democratic liberty. As I am sure 

the Georgian Ambassador brought up to you, enhancing the stability for the Caucasus through assistance for economic growth and 

democracy, particularly building on the postconflict gains in Georgia. 

Promoting democratic and economic reform in Ukraine, support 

of Moldova’s progress toward European integration by strengthening democratic institutions and promoting economic growth, addressing the most difficult challenges to democracy and human 

rights, like those in Belarus. And, as Congressman Engel mentioned, increased stability in the Western Balkans by helping countries there reach their goal of Euro-Atlantic integration through 

programs that strengthen economic opportunity, build democratic 

institutions, and promote tolerance and reconciliation. 

We will work with increased efficiency and creativity to address 

the key challenges and advance the democratic and economic transitions in this region. 

USAID is fundamentally transforming the way that we work by 

strategically realigning our Foreign Service officer positions, empowering our local staff, and increasing reliance on cost-effective 

DC-based staff to restructure our field presence. 

By Fiscal Year 2012, we will also end USAID funding for assistance programs in Montenegro, which is middle-income country that 

is on a sustainable path to becoming a fully democratic and market-based economy. Through the USAID forward reforms, we are 

rebuilding our efforts to increase donor coordination in this region, 

enhance the sustainability through local capacity building, and to 

use science to leapfrog global development challenges. 

To further improve efficiency and effectiveness to meet continuing challenges, we are leveraging funding to maximize the impact achieved with every taxpayer dollar spent in this region. We 

are partnering with international donors, host countries, and the 

22

private sector, to amplify our results and to achieve these positive 

development outcomes. 

In Bosnia-Herzegovina, USAID has leveraged over $60 million in 

additional funding from other international donors, including the 

launch of the first-ever jointly funded Development Credit Authority Loan Guarantee Program. And it unlocked $40 million to spur 

local entrepreneurship by combining capital with the Swedish 

International Development Agency. 

In Azerbaijan, the host government has provided a near one-toone match to co-finance USAID implemented economic growth and 

community development programs. Throughout the region, USAID 

has leveraged over $350 million in public-private partnerships 

through our Global Development Alliance. So with Congressional 

support, USAID has financed 10 Enterprise Funds, covering 18 

countries, and that has leveraged over $9 billion in additional financing to strengthen private sector growth. The profits from these 

funds have been reinvested in the target countries to further propel 

economic development, and have already returned over $180 million back to the American taxpayers through the U.S. Treasury. We 

are also forging new partnerships with emerging donors to work 

with us to overcome development challenges. 

I look forward to working with you as we transform the way that 

we work to advance U.S. interests in meeting the 21st century development challenges, and building a strong partnership with the 

stable and sustainable market-oriented democracies in Europe and 

Eurasia. Thank you and I welcome any questions. 

Mr. BURTON. Thank you, Ms. Alexander. The remainder of your 

statement we will put in the record. 

Ms. ALEXANDER. Thank you. 

[The prepared statement of Ms. Alexander follows:]

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Mr. BURTON. Ms. Biswal. 

STATEMENT OF MS. NISHA BISWAL, ASSISTANT ADMINISTRATOR, BUREAU FOR ASIA, U.S. AGENCY FOR INTERNATIONAL DEVELOPMENT 

Ms. BISWAL. Thank you, Mr. Chairman. 

Mr. BURTON. Incidentally, let me just say that we have been 

joined by my good friend, Congressman Poe from Texas, and Mr. 

Deutch. Thank you both for being here. 

Ms. BISWAL. Thank you, Mr. Chairman, Congressman Engel, 

Congressman Deutch, and Congressman Poe, thank you for inviting me to testify today. And I also ask that the full statement be 

placed in the record 

Mr. BURTON. Without objection. 

Ms. BISWAL. This afternoon, I want to share my perspective on 

how U.S. foreign assistance in Central Asia is promoting stability, 

encouraging reforms, and meeting urgent needs. 

Mr. Chairman, there is no question that Central Asia is a challenging environment in which USAID works. The lack of political 

space and the human rights record has been troubling. And yet, we 

have clear and compelling interests in Central Asia, as my colVerDate 0ct 09 2002 13:50 Aug 04, 2011 Jkt 000000 PO 00000 Frm 00030 Fmt 6633 Sfmt 6633 F:\WORK\EE\041411\65799 HFA PsN: SHIRL

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league Susan Elliott mentioned, the most important being the impact on our ability to succeed in Afghanistan and Pakistan. 

In Fiscal Year 2012, the President’s budget requests a total of 

$112.8 million for Central Asia through the AEECA account, a decrease of 14 percent from the Fiscal Year 10 enacted levels. The request also includes $35.3 million in global health and child survival 

funding to support health activities in the region. 

Our programs in Central Asia are built around key USAID successes over the years. In 1998, technical support provided by 

USAID was instrumental in helping Kyrgyzstan become the first 

country in the region to join the WTO. Today, Kazakhstan is also 

making progress toward WTO membership, again with USAID assistance. In Kazakhstan, a country which has shown strong growth 

fueled by oil and gas reserves, USAID’s modest program leverages 

$2 of Kazakh funding for every dollar of U.S. investment for assistance to promote legal regulatory and policy reforms, as well as supporting the expansion of small and medium enterprises. 

Regionally, our health programs have had widespread impact. 

Millions of citizens across the region have greater access to primary 

health care based on USAID’s introduction of family medicine, replacing the old Soviet system. 

And while political space in the region is very narrow, the 

Kyrgyz Republic, as you noted, Mr. Chairman, represents a bright 

spot for democracy in Central Asia. Kyrgyzstan is undertaking 

what Secretary Clinton has called a bold endeavor to strengthen 

and deepen parliamentary democracy in a region where such successes are few. 

USAID is doubling down on our efforts to support the democracy 

efforts in Kyrgyzstan. USAID was there on the ground and able to 

provide quick support for constitutional referendum and the parliamentary elections, which occurred last year, and we will be there 

to help Kyrgyzstan prepare for the upcoming Presidential elections 

as well. And if Kyrgyzstan does succeed, it becomes a model of how 

democracy can deliver for the people of Central Asia. And if it fails, 

that failure will be exploited by regional forces unfriendly to democracy and pluralism. 

Mr. Chairman, if I may quote my good friend, Ken Wollack of the 

National Democratic Institute, Kyrgyzstan is not Las Vegas, and 

what happens in Kyrgyzstan will not stay in Kyrgyzstan. It will 

spread throughout the region. We are working to make sure that 

that impact is a positive one. 

Tajikistan, USAID’s second-largest program, has had a markedly 

different trajectory and experience. The economic development 

there has been frustrated by widespread corruption, food and energy shortages, and over-reliance on remittances from abroad. The 

2012 request of $42 million will focus on improving food security 

and addressing health concerns. 

USAID support has helped farmers establish more than 30 associations of water users and has led to better management of irrigation and drainage systems, helping many farmers to nearly double 

their income. We hope to reach an additional 30,000 households 

through our agricultural programs in funds requested in Fiscal 

Year 2012. 

28

Our health care programs allowed us to provide a rapid response 

to the polio outbreak and was instrumental in halting the world’s 

largest outbreak of polio in decades, and that was accomplished 

through a partnership with Russia as well as India. 

Finally, energy security is another area of focus and long-term 

stability in Central Asia and its economic success will depend 

greatly on energy production. The countries of Central Asia tend to 

look at this issue singularly, and we are working to create more regional cooperation as well as enhance regional energy markets, and 

improve capacity, so that Central Asia can become a more efficient 

exporter of energy, particularly to Afghanistan and Pakistan. 

Let me just conclude, Mr. Chairman, by saying that development 

saves lives. It strengthens democracies and expands our opportunities around the world. But it also keeps our own country safe and 

strengthens our own economy. USAID programs in Central Asia 

are a critical component of securing our vital interests in the region. 

Thank you very much for the opportunity to testify today, and 

I welcome any questions you may have. 

Mr. BURTON. Thank you very much. 

[The prepared statement of Ms. Biswal follows:]

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Mr. BURTON. You say what happens there is not like Las Vegas. 

How did you come up with that analogy? I am just curious. 

Ms. BISWAL. Well, I can’t take credit for it, sir. I borrowed it from 

Ken Wollack of NDI, but I thought it was a brilliant one. 

Mr. BURTON. It was brilliant, yes. Have you ever been to Las 

Vegas? 

Ms. BISWAL. I have not. I have been to Atlantic City. 

Mr. BURTON. Well, let me know when you go. If what happens 

there stays there, would you let me know when you get back? 

Ms. BISWAL. I will indeed. 

Mr. BURTON. All right. 

First of all, I will recognize myself for 5 minutes. You know, the 

thing that concerns me is we had a budget in 2008 of—let me get 

the figure here—53—$43 billion in 2008. What we are trying to do 

on the Republican side, of course we are going to have to compromise, I am sure, to some degree with the Democrats in the Senate and the White House, but the State Department had a budget 

in 2008 of $43 billion, and our target is to use 2008 figures as far 

as our budgetary concerns are this year. You are asking for, or your proposal is $53 billion this time, 

which is a 23 percent increase at a time when we don’t have any 

money. The budget deficit this year is going to be between $1.5- 

and $1.6 trillion. We are facing a $14 trillion national debt, and 

while I understand that everything that all four of you have said 

is meritorious, what we have to do is have every department of 

government go back and actually take a fine point on their pencil 

and cut out anything that is not an absolute necessity, and is not 

necessary for the security and longevity of the United States of 

America. 

And so, and I understand from your testimony today, that your 

section has actually decreased since 2010. But you didn’t tell me 

what it did between 2008 and 2010. Does anybody have an answer 

to that? From the 2008 appropriation that was made for your section of the world, has the amount gone up or down? I am not talking about 2010. 

Mr. ROSENBLUM. Mr. Chairman, I don’t have the 2008 number 

in front of me, but from my memory, I believe that the 2010 level 

was still lower than we were in 2008. 

Mr. BURTON. Really? 

Mr. ROSENBLUM. Yeah. But we will get back to you with the accurate answer on that. If we look over a longer period of time, I 

can say, because this is sort of seared into my mind, that in comparison to where we were 10 years ago in the region, we are actually down by about 60 percent in foreign aid. We were about $1.5 

billion, and the request for this year, as you see, is a little over 

$600 million for the foreign aid portion of what we are doing. So 

over time, because of the countries graduating from assistance and 

because of focusing our programs on the highest priorities, we have 

been able to come down significantly. 

Mr. BURTON. The 2012 request is what, $626 million? 

Mr. ROSENBLUM. Yes, $626 million. That is for the assistance to 

Europe, Eurasia, and Central Asia accounts. If you include all the 

accounts, the 2012 request is a little over $900 million. That includes the military assistance and some of the global health. 

39

Mr. BURTON. And that, compared to 2008 is still lower, as you 

recall? 

Mr. ROSENBLUM. As I recall, it is. 

Mr. BURTON. Well, if you could get me those figures I would really appreciate it. 

The Bureau’s—and I hate to hit you on salaries, but this is part 

of the overall issue that we have to look at—the Bureau’s spending 

on American salaries has gradually risen from $217 million in 2008 

to about $237.5 million in 2011. And the Fiscal Year 2012 budget 

request, $266 million, rather. So you have got an increase over the 

2008 levels of about $50 million. 

And I know everybody wants to make more money. But is there 

any way, or can you give us an idea on whether or not there are 

any economies that can be made at State to deal with that? 

Mr. ROSENBLUM. Mr. Chairman, I hate to do this twice in a row, 

but I will respond—we will respond with a more detailed response. 

Mr. BURTON. Okay. Along with that response——

Mr. ROSENBLUM. In writing. 

Mr. BURTON. You actually had a decrease in American staff that 

has been employed by the Bureau of European and Eurasian Affairs. So even though you have had a decrease in staff, you have 

got almost a $50 million increase in spending, so——

Mr. ROSENBLUM. Sir, the one thing I will say is that the primary 

cost drivers, as you have noted, for the cost of the salaries relate 

to the general operating expenses, maintenance, and utilities at our 

posts overseas. And those costs do tend to rise over time, even 

though when you cut down the staff size, sometimes the overall 

cost rises. 

Mr. BURTON. Is that because possibly the value of the dollar has 

decreased in competition with the European currencies? 

Mr. ROSENBLUM. That is one of the factors. But again, to give 

you the full answer you deserve, I will have to get back to you in 

writing. 

Mr. BURTON. My time is just about up, so why don’t I go ahead 

and yield to my colleague, and then I will have more questions 

after he and Mr. Poe ask their questions. 

Mr. ENGEL. Okay. Thank you. Thank you, Mr. Chairman. 

I just want to say, and again, in the general realm of knowing 

that we have got to cut costs and do the best we can, I just want 

to go on record again. I have said this many, many times. I think 

that the salaries that staff is paid—I travel around to our Embassies and our consulates; I think it is pitiful, the work that the personnel do. I think they are underpaid, and I think if we are going 

to look for cuts we should not start with salaries. I think that our 

men and women are so dedicated. They certainly don’t do it because of the salary. And it is really embarrassing, I think, what 

they are paid. So I understand we need to tighten our belt, but I 

think that on the backs of our workers in the Foreign Service and 

Embassies, I think is really the wrong way to go. I only mention 

it because Mr. Burton just mentioned it. 

Let me ask the Kosovo question. Mr. Rosenblum, let me just do 

it, because you and I attended a ceremony where we had the Albanian Ambassador, and Albania presented a check, a ceremonial 

check back—$15 million to the U.S. Treasury, which is returning 

40

half of its startup funds to the American people. I was interested 

that you said that you don’t believe that any country that gets aid 

is entitled to that aid in perpetuity; that there is a purpose for that 

aid, and once a country has succeeded in that purpose, then we 

move on. 

Obviously, Albania, when I was growing up, was the most repressive Communist dictatorship, far beyond the Soviet Union and 

every other place, in fact, in line with China early in the fifties, 

and then broke with China because China was too liberal for it. 

What I find amazing, first time I went to Albania was back in 

1993, there is a large Albanian American community in New York. 

And I became very friendly with that constituency and worked very 

hard with them. Went to Albania, didn’t know what to expect. And 

I could not believe there are no—there is no more pro-American 

country or more pro-American people than Albanians, both in Albania and in Kosovo. They truly love our country. And when Kosovo 

declared independence, there were more U.S. flags in the street 

than there were either Albanian or Kosovo flags. 

I mean, that is how they feel about the United States. They 

never believed the 50 years of garbage that the dictatorship told 

them about the United States. And it is just amazing. And the 

warmth really just makes you feel good. And it really is contagious. 

So I believe it would be nice to establish an Enterprise Fund for 

Kosovo. Again, I mentioned that we had heard that there were no 

startups for Enterprise Funds. We are working on one for Egypt, 

supposedly. I know funds are tight. But I think there is no place 

more deserving of an Enterprise Fund where one can play a more 

useful role. And I understand that the Albanian American Development Foundation, which is the private follow-on to the Enterprise 

Fund, might be willing to contribute a portion of its huge endowment to start up a Kosovo American Enterprise Fund. So will State 

and USAID support the creation of a Kosovo American Enterprise 

Fund? 

Mr. ROSENBLUM. Congressman Engel, first of all, we agree completely about the importance of supporting enterprises in Kosovo, 

finding ways of promoting economic growth there. I think that 

country’s survival as a sovereign state depends on being able to 

generate economic growth. And they obviously have some major obstacles to achieving that goal. 

The Enterprise Fund method, the tool of that is one way to do 

that. And I would be glad to come and discuss with you more specifically about the pros and cons of the model and how it would be 

done. We have been looking at it together with our Embassy in 

Pristina, and we can talk about the other things that we are doing 

to promote private sector development and how an Enterprise 

Fund may fit into that. 

I would note that there might be some legal issues that would 

have to be dealt with concerning the use of these funds, because 

they are previously appropriated funds, the funds that belong to 

the Albanian American Development Foundation. We would have 

to examine that. But we value this kind of creative suggestion and 

will seriously consider it. 

Mr. ENGEL. Good. Why don’t you come in and we will chat about 

it? I would be very, very interested. 

41

And I wanted to say that in terms of foreign assistance in general, Defense Secretary Gates and the U.S. Chamber of Commerce, 

which is Republican-leaning, all support foreign assistance and 

support increases, I think, in the President’s budget in terms of foreign assistance. So I believe that it plays off well in terms of helping us in America. 

I would like someone to tell me about Russia. I think, Mr. 

Rosenblum, you had said in your testimony that these authoritarian regions, former Communist regions, have a way of slipping 

backwards into more autocracy. That is kind of what they are used 

to. That is why I truly believe it is so important for us not to leave 

a vacuum, to be in there and to fight for things. 

I would like to know about Russia. How has our assistance to 

Russia contributed to the reset or targeted assistance? Has it improved our bilateral relationship? And I would also like to throw 

in there, the State Department human rights report identified 

Uzbekistan, Turkmenistan and Tajikistan as authoritarian states. 

A new report singled out countries for incarcerating people on political grounds, lacking fair elections, obstructing a multiparty system, and on and on and on. So I would like to hear some talk about 

Russia and these other countries. 

Mr. ROSENBLUM. Glad to talk about it, sir. And I will defer to 

Ms. Elliott on the question about Central Asia. But with respect to 

Russia, our policy on Russia now is premised on the idea that we 

can be doing two things at once; that is, finding areas of common 

interests, common concerns with Russia where we can work together and actually achieve significant results, but at the same 

time, knowing that there are areas where we disagree, and where 

we can be direct and frank in addressing the issues. 

The issues that you talked about in terms of democracy, backsliding on democracy, apply there; and another issue is Georgia, 

where we definitely have a major disagreement with Russia on 

that. 

We think that this policy has paid dividends. We think we can 

point to a number of areas, and I won’t go into all of them now in 

detail. I think Assistant Secretary Gordon talked about this when 

he appeared before you several weeks ago. But with respect to 

Iran, with respect to North Korea, nonproliferation, counterterrorism, and other areas, and in a very practical way some of this 

collaboration is paying off, and this connects to the assistance, because one of the areas where we do work with Russia and where 

some of the assistance money is going, is counternarcotics. Obviously, a huge problem of the flow of heroin coming out of Afghanistan. It is important to work with all countries of the region. Russia itself is very directly impacted by this; in fact, in terms of their 

own drug abuse problem—and we have had very good cooperation 

on this issue and have used our assistance programs to support it. 

Most recently, there was a major seizure of about a ton of heroin 

in Afghanistan, an Afghan-led operation, but with support from the 

U.S. and Russia working together. 

So our assistance has that aspect to it. It works on the collaborative area. But there is another major portion that is actually the 

majority, in dollar terms, of our assistance to Russia that is focused 

on the areas of democracy and human rights. It is about supporting 

42

civil society, supporting independent media, working on rule of law 

problems, and most of that, most of those programs, not only are 

they aimed at those issues but the funds are being spent to work 

with nongovernmental sector; that is, this is not anything to do 

with the Government of Russia. 

Mr. BURTON. We will have more questions. 

Mr. ENGEL. I will ask Ms. Elliott the questions that I raised, but 

I will defer. 

Mr. BURTON. We will come back to you. Mr. Poe and then we will 

go back. Mr. Poe. 

Mr. POE. Thank you, Mr. Chairman. I apologize, I am in a markup in Judiciary, too. So I am going to be short. 

I live in Texas, the Houston area. What occurs in Eastern Europe 

becomes our problem in the area of human trafficking. The figure 

is 50,000 people that are human trafficked out of Eastern Europe, 

end up in the United States. Houston, Texas, has Interstate 10 

that goes east to west, which is apparently the corridor for human 

trafficking in the United States, because you can go all the way to 

Florida and you can go all the way to California. 

I have been to Eastern Europe, have seen and talked to the people in Romania and Bulgaria about the issue of women, specifically, 

being trafficked. I understand that Bulgaria, Russia, Romania, are 

all tier two when it comes to trafficking of people, which I think 

is despicable. As a former judge, I would like to try all of the traffickers at the same time, but they won’t let me do that. 

But anyway, so I am concerned and my question really is, since 

that problem becomes America’s problem, what funds are being 

used and are they effective in trying to convince countries—Romania, Bulgaria, and Russia—to get their acts together and protect 

human beings in Russia so that they don’t end up being trafficked 

to the United States and other places? Mr. Rosenblum, you want 

to answer that? 

Mr. ROSENBLUM. Sir, I will be glad to start and answer, but my 

colleagues may well have things to add to it. 

I would say that the starting point has to be political will in the 

countries; that is, the countries themselves have to recognize that 

it is a real issue and be willing to deal with it. Sometimes dealing 

with it has some costs for them, because they may be going after 

important people in the country in terms of prosecutions. So that 

is always the starting point, and through our diplomacy, we are 

constantly engaging and constantly pushing the issue with these 

governments. And of course, the ranking, the tier ranking that you 

referred to is an element of that because no country wants to see 

itself slip in the tier ranking. 

Through our assistance programs, we do have ways that we can 

deal with the issue as well, which we are; and we are spending 

money in the countries of the region on this issue. Some of it is 

working with the victims of trafficking in those countries, you 

know, with shelters and providing—sometimes it is providing employment opportunities so the targets of the traffickers will have 

other options, other things that they will do. And some of it is 

aimed at helping them—helping the governments, the justice sectors of these countries figure out how to prosecute the crime. It is 

not a crime that they in the past have been used to treating as its 

43

own criminal offense under their code. So it is a matter of amending the criminal code. 

It is a matter of training judges and training prosecutors, and we 

have done a good deal of that in the region, but there is a lot of 

work left to do. And we agree completely that this is a horrendous 

problem. 

Mr. POE. In your opinion, do you think that Russia has the moral 

will to get this crime problem stopped or not? Can you give me 

your opinion of that? Political will, whatever kind of will you want 

to call it, do you think they do? 

Mr. ROSENBLUM. I think that they have shown a lot of evidence 

of that will, that there has been movement. 

Mr. POE. How about Romania? 

Mr. ROSENBLUM. Romania, the same thing in Romania as well. 

I mean, there are different elements in the political systems there 

that may have different views on it, but in general the Romanian 

Government is engaged very strongly with us on this. 

Mr. POE. How about Bulgaria? 

Mr. ROSENBLUM. Bulgaria, I would say the same about Bulgaria 

and Romania. Bulgaria and Romania also as members of the European Union have certain requirements that they have to meet that 

are a little different than countries further to the east do. So I am 

not going to sit here and tell you that the problems are solved, because we know that they aren’t. We know that they aren’t, and 

there is a lot of work to be done, but we see movement in these 

countries in the right direction. 

Mr. POE. Ms. Alexander, do you want to weigh in on that in my 

limited time? 

Ms. ALEXANDER. Sure, thank you. I think that as Dan has recognized, the legal reforms that are necessary to address this problem 

are vast, and it is something that we are trying to conquer. From 

USAID’s perspective, we are also working with civil society groups 

in public education because I think those pieces can make sure 

these trafficked people or persons are educated before they end up 

in Houston, Texas. This is an element where I think independent 

media and the reforms that are addressed through both the legal 

proceedings, as well as civil society, are important elements to 

make sure that people understand what they are getting into. And 

this is an area that I think remains important for engagement and 

assistance programming. 

Mr. POE. Thank you very much, Mr. Chairman. I yield back. 

Mr. BURTON. Thank you, Mr. Poe. I think since my colleague was 

not finished with his questions, I will let him take his 5 minutes, 

and I will ask questions after Mr. Engel. 

Mr. ENGEL. Thank you very much, Mr. Chairman. I would like 

Ms. Elliott to answer the questions I was talking about, the 

authoritarianism in those four or five countries. 

Ms. ELLIOTT. Thank you, Mr. Engel. As I mentioned in my statement, we conduct Annual Bilateral Consultations with all the countries of Central Asia, all five, and an integral part of the engagement we have is discussing democracy, human rights, freedom of 

the press, what I would call the human dimension. So this is something that we take very seriously and we raise it at high levels. 

44

In fact, Secretary Clinton, when she visited the region in December, raised these issues with all five of the Central Asian leaders 

in a meeting she had. And as well, she visited Uzbekistan, and this 

again was an integral part of her discussion. So we raise these 

things at high levels, and we continue to emphasize the importance 

of them. 

Mr. ENGEL. Ms. Biswal. 

Ms. BISWAL. Yes. I just want to add, in addition to the diplomatic 

efforts, we very much, through our assistance program, provide 

support to human rights defenders. We provide regional support as 

well as bilateral support to civil society institutions, and because 

the political space is so narrow, we look for creative ways that we 

can engage and encourage democratic activities. 

Some of it might be creating things like water institutions or 

water associations, where at community levels you bring individuals together to make decisions in a more democratic way. So we 

are trying to get at democratic reforms through as many different 

ways as we can. If we can’t attack a problem directly at the top, 

we try to go around through other ways. 

Mr. ENGEL. Thank you. 

Ms. Biswal, you still work for our committee. I don’t know if you 

know that, Mr. Chairman. So she is still doing good work, your 

work for USAID. 

Let me throw out two countries I would like you to tell me about. 

One is Turkey, who I have lots of difficulty with. Obviously, they 

are a NATO ally, and some of their very recent orientations are 

really disturbing with regard to Israel and the Middle East, and 

also with regard to Armenia. I am wondering if someone can talk 

to me about that. And the other country you mentioned before is 

Georgia. Obviously, there are differences with the Russians on 

Georgia, but Georgia being a pro-Western government and a country that would like to work with us, what are we doing in Georgia, 

especially based on the fact that the Russians have occupied a portion of Georgia? 

Mr. ROSENBLUM. Mr. Engel, maybe I will start and, again, welcome contributions from my colleagues as well. 

To be honest, I don’t have too much to say about Turkey, but I 

have lots to say about Georgia. And the reason is, frankly, in terms 

of assistance, in terms of the budget request and the assistance, we 

are doing very little with Turkey. We still have a significant IMET 

program, military training there, to enhance our collaboration with 

Turkey as a NATO member, but we we are not requesting any 

funding for FMF. We have a small amount of funding that is being 

requested for the antiterrorism cooperation programs that we do 

with countries around the world, and that is it. That is pretty 

much it. I see here, it is a total of $5.6 million between the IMET 

and this antiterrorism cooperation. 

You mentioned Armenia, and we can talk about that more if you 

would like. But let me surf to Georgia for a moment and say that 

we were able, as you know, and with a lot of help from Congress, 

to step in after the Russian invasion in 2008 and provide very significant assistance to Georgia which we think——we were able to, 

I think, provide assistance that actually might have made the difference between Georgia surviving or collapsing in some ways. The 

45

economic situation was dire in the fall of 2008 after the Russian 

invasion, and we provided a very large package of assistance, including the type of assistance that we very rarely do, and in this 

part of the world it is almost unheard of in my experience, and that 

is budget support. We actually provided some budget support. 

Mr. ENGEL. Are we still doing that in a consistent way or have 

we backtracked? 

Mr. ROSENBLUM. We are not doing budget support anymore. That 

was a one-time thing. We are still providing a significant amount 

of assistance to Georgia. I think this year the request for Georgia 

totally is $87.6 million, and what we are doing with that money is 

supporting reform. The Georgian Government is very serious about 

reform in the economy, reform in their political institutions, in 

their social sector. And this is one of those cases I think that the 

chairman referred to as like-minded countries that we can support 

their reforms. Georgia has been a model in that respect. So we 

think the money there is well-invested. 

We also, as you know, had until recently—actually, I think it is 

still in place—a major Millennium Challenge compact in Georgia 

that was working on rural development and roads and so on. 

Mr. ENGEL. Can I ask one final question, Mr. Chairman? When 

you come and talk about the Kosovo fund, then you can talk to me 

about Armenia as well, because I am very concerned and would 

like very much to help Armenia in any way we can. 

There are 300,000 refugee and internally displaced persons in 

the Balkans, 100,000 displaced in Georgia, 160,000 persons in Turkey, and an untold number of stateless persons in Eastern Europe 

and Central Asia; yet, the President’s budget for migration and refugee assistance in Europe and Central Asia is slated to decline 

from $48 million to $29 million. UNHCR budget for Europe alone 

is $196 million for 2011. The Department’s total 2012 request for 

Europe doesn’t come close to contributions to the U.N., and I have 

a lot of questions about the U.N.; but you know, in fact, if the entire amount would come to the U.N., it would come under 15 percent, and we assume it doesn’t all go to the U.N. 

So my question really is, just as some of these countries are beginning to make progress, are we pulling out the rug from under 

their feet, and if it is appropriate to end programs, what do we do? 

Shouldn’t we be pumping up assistance to Bosnia to end another 

2 years of other displacement? Those questions, similar. 

Mr. ROSENBLUM. Should I respond? 

Mr. ENGEL. Sure. 

Mr. ROSENBLUM. On that point, Congressman, as I said in my 

opening statement, there is a lot that we are balancing here in 

terms of being very aware of the fiscal constraints, but at the same 

time wanting to sustain commitment to the kinds of goals that you 

mentioned in this region. 

What we have tried to do to respond to that is to really focus on 

the highest priorities. And there have been a few cases where we 

have had to stop programs in order to shift those resources into 

things that are really important. Ms. Alexander referred to one of 

them in her testimony with respect to Montenegro, where we had 

a program aimed at economic growth in Montenegro for many 

46

years. We felt that it reached a point where that program could be 

phased out. 

The real issues that need to be focused on in Montenegro now, 

in our view, relate to rule of law. There is still a major problem 

with rule of law, with organized crime operating in the region, et 

cetera. So what we have done is, we have reduced the budget for 

that country and focused in on the rule of law issues, and this is 

true in other places in the region as well. So it is a difficult challenge, but we are trying to make the best of it and keep that 

progress going. 

Mr. ENGEL. Thank you. 

Mr. BURTON. More than 56 national and 260 multilateral aid organizations contribute to development resources. New donors are 

emerging all the time. China, India, Brazil, Taiwan, and Russia 

collectively contribute about $8 billion each year. What troubles me 

is, why are we giving money, aid, to these countries that are collectively giving $8 billion in aid to other countries? I mean, we give 

money to India, we give money to Brazil, we give money to Russia, 

and I just can’t understand why, when we are having the fiscal 

problems we are having right now, we would be contributing to 

these countries, who in turn are contributing money to other countries. 

Ms. BISWAL. I would like to maybe talk to you a little bit about 

India and why we have an USAID program there. I think it is a 

very fair question, what is USAID and what is U.S. assistance 

doing in India at a time when India is emerging much more significantly in the world scene as a donor. 

Mr. BURTON. But the point is, if we are giving them money, then 

they need the money for various USAID programs. So how can they 

contribute to other countries when we are giving our money? It 

sounds like a transfer of funds, and I don’t understand why we 

should be giving money if they have their money being given to 

other countries. 

Ms. BISWAL. Well, in the case of India what we are trying to do 

is—and India still has 800 million people living in poverty—but 

what we are trying to do is not necessarily—I mean, India is going 

to have to solve its own problems of poverty. But what USAID can 

do, and what we are increasingly trying to gear our programs toward, is working with India to pilot some effective solutions that 

they can scale up, but not only that they can scale up, but in 

partnering with them as donors to take Indian-piloted solutions 

and apply them to challenges in Africa. 

So when the President was in India last November, he announced a partnership for an evergreen revolution with Prime Minister Singh, and that is basically what is at the heart of this. 

Mr. BURTON. I understand what you are saying, but there is a 

host of countries that are contributing foreign assistance to other 

countries and we are giving them money. It just seems like to me 

that is one of the things that ought to be looked at very closely, 

especially when we are in a situation like we are economically. 

And a while ago we were talking about salaries. I am not cutting 

people’s salaries and putting you in bread lines or anything like 

that, but all I am saying is every single aspect of our expenditures 

needs to be parsed and looked at very closely. Some need to be 

47

changed, some need to be cut, but we cannot go on the way we are 

going, and that is why foreign assistance is also one of the things 

that we have to look at very closely. 

Now, there are 56 OSCE members. Could you elaborate on the 

potential expansion of the role of the OSCE in Central Asia and Afghanistan and what would this expansion role entail and what 

funding would it call for and which countries would contribute to 

these funds out of the 56? 

Ms. ELLIOTT. Well, I can just say that the OSCE is already active 

in Central Asia, and, as you probably are aware, that Kazakhstan 

was the chairman in office of the OSCE. They have worked in 

Kyrgyzstan and other countries in Central Asia. I can’t tell you 

specifically how much each member country contributes, but that 

is certainly something we could find out and get back to you with. 

Mr. BURTON. Okay. That would be helpful. 

We are running out of time because we have votes on the floor. 

So what I will do is, I will ask one more question, and then I would 

like to, with unanimous consent, submit a number of questions to 

you for the record that I, and my staff, and your staff can take a 

look at after the meeting is over; because I don’t want to go vote 

and then keep you guys here until 6 or 7 o’clock, because you probably have dinner dates and things that you have to do. 

Let me ask you about corruption. Transparency International 

measures the level of corruption perception worldwide. Now, we 

give $123 million to the Ukraine while the Transparency International, which measures corruption, rates it 134th out of 178 

countries assessed. So they have got a real corruption problem, and 

yet they are getting $123 million from us. Tajikistan is getting $48 

million. It ranks 154th. Russia gets $65 million. 

And I just would like to know why, when the corruption level is 

so high, we are giving large amounts of money to these countries, 

as well as others, and why is Russia getting any? So if you want 

to answer that question real quick, then we will submit the rest 

for the record. 

Ms. ALEXANDER. I will start on Ukraine, because I think that 

Ukraine was disproportionately affected by the global economic crisis, and the corruption element really requires political will. So 

when you have a global economic crisis that is crashing a country 

and you have a lack of political will, there is a need to help because 

that will actually affect and have a snowball on the region. 

Mr. BURTON. But the one thing that none of us want is for us 

to give aid and then, because there is no political will, it ends up 

in a Swiss bank account. We have had an awful lot of countries 

around the world, and I experienced it because I was in Zaire when 

they had Mobuto over there, and he was getting billions of dollars 

and it was all in a Swiss bank account or in the French Riviera. 

If we are going to give aid, we want to make sure it is going for 

a purpose. And if there is political corruption we can’t deal with, 

it seems to me, unless we can go through a private agency that is 

not connected to the government, we shouldn’t be giving them any 

money. 

Ms. ALEXANDER. Part of this is addressing the political will of the 

players, but it is also the legal and regulatory reforms that you 

48

have in these countries. And when you don’t have those systems 

set up, these things can happen. 

And so I think that there have been incomplete market-oriented 

reforms that have limited the ability of the politicians to actually 

conquer this political will that is necessary to address the corruption issues. So through Transparency International, through a lot 

of our technical assistance in these countries, we have actually 

been shepherding some of these programs through. I know in Central Asia, too, corruption is an issue that Nisha——

Ms. BISWAL. And I just want to assure you, Mr. Chairman, that 

while we may have assistance programs in countries where corruption is a major concern, U.S. assistance dollars, we are not providing budget support to these countries. We are not providing U.S. 

funds directly to governments. We are only providing technical——

Mr. BURTON. What is it, going through PVOs? 

Ms. BISWAL. We are going through private voluntary organizations, nongovernmental organizations. We are also going through 

U.S. contractors who are undertaking a lot of the programs on our 

behalf, and so we are not providing assistance to governments, and 

we take very strong measures of accountability to track U.S. resources. 

Mr. BURTON. Well, what I would like to do is, in addition to submitting these questions for the record, because we are out of time 

and we don’t want to keep you, if you could give us some idea of 

how you police this; because I was senior Republican on Africa for 

10 years, and the money we were poring into Zaire and a whole 

host of countries, South Africa and elsewhere, was going right 

down—pardon my expression—the rat hole. And when we are talking about the fiscal problems we have right now, we can’t allow 

that to happen, or at least keep it to a minimum. 

So with that, I just say thank you very much. We will submit 

these questions for the record, and I really appreciate you being 

here today. 

Thank you very, very much. We stand adjourned. 

[Whereupon, at 4:17 p.m., the subcommittee was adjourned.] 

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