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65–301PDF 2011

THE AGENCY FOR INTERNATIONAL DEVELOPMENT

AND THE MILLENNIUM CHALLENGE

CORPORATION: FISCAL YEAR 2012 BUDGET

REQUESTS AND FUTURE DIRECTIONS IN FOREIGN

ASSISTANCE

HEARING

BEFORE THE

COMMITTEE ON FOREIGN AFFAIRS 

HOUSE OF REPRESENTATIVES

ONE HUNDRED TWELFTH CONGRESS

FIRST SESSION

MARCH 16, 2011

Serial No. 112–11

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 

(III)

C O N T E N T S 

Page

WITNESSES 

Rajiv Shah, M.D., Administrator, U.S. Agency for International Development . 13

Mr. Daniel Yohannes, Chief Executive Officer, U.S. Millennium Challenge 

Corporation ........................................................................................................... 22

LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING 

The Honorable Ileana Ros-Lehtinen, a Representative in Congress from the 

State of Florida, and chairman, Committee on Foreign Affairs: Prepared 

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

Rajiv Shah, M.D.: Prepared statement .................................................................. 16

Mr. Daniel Yohannes: Prepared statement ........................................................... 24

APPENDIX 

Hearing notice .......................................................................................................... 66

Hearing minutes ...................................................................................................... 67

Questions submitted for the record by the Honorable Ileana Ros-Lehtinen 

and written responses from: 

Mr. Daniel Yohannes ........................................................................................... 69

Rajiv Shah, M.D. .................................................................................................. 95

Written responses from Rajiv Shah, M.D., to questions submitted for the 

record by the Honorable Gus Bilirakis, a Representative in Congress from 

the State of Florida .............................................................................................. 126

Written responses from Mr. Daniel Yohannes to questions submitted for 

the record by the Honorable Dana Rohrabacher, a Representative in Congress from the State of California ....................................................................... 135

Written responses from Rajiv Shah, M.D., to questions submitted for the 

record by the Honorable Albio Sires, a Representative in Congress from 

the State of New Jersey ....................................................................................... 136

Questions submitted for the record by the Honorable Donald M. Payne, a 

Representative in Congress from the State of New Jersey, and written 

responses from: 

Mr. Daniel Yohannes ........................................................................................... 137

Rajiv Shah, M.D. .................................................................................................. 138

Questions submitted for the record by the Honorable Jeff Duncan, a Representative in Congress from the State of South Carolina, and written 

responses from: 

Mr. Daniel Yohannes ........................................................................................... 172

Rajiv Shah, M.D. .................................................................................................. 174

(1)

THE AGENCY FOR INTERNATIONAL DEVELOPMENT AND THE MILLENNIUM CHALLENGE 

CORPORATION: FISCAL YEAR 2012 BUDGET 

REQUESTS AND FUTURE DIRECTIONS IN 

FOREIGN ASSISTANCE 

WEDNESDAY, MARCH 16, 2011

HOUSE OF REPRESENTATIVES, 

COMMITTEE ON FOREIGN AFFAIRS, 

Washington, DC. 

The committee met, pursuant to notice, at 10 o’clock a.m., in 

room 2172 Rayburn House Office Building, Hon. Ileana RosLehtinen (chairman of the committee) presiding. 

Chairman ROS-LEHTINEN. The meeting will come to order. I will 

recognize myself and then my good friend, the ranking member Mr. 

Berman for 7 minutes each for our opening statements. Then I will 

recognize any of our members who would like to offer an opening 

statement for 1 minute each. 

We will then hear from our witnesses and I ask that you please 

summarize your prepared statements in 5 minutes each before we 

move to questions and answers with our members under the 5-

minute rule. 

Without objection the witnesses’ prepared statements will be 

made a part of the record and members may have 5 legislative 

days to insert statements and questions for the record subject to 

the limitations of the rules. 

The Chair now recognizes herself for 7 minutes. 

There is little that is discussed here in the Congress these days 

that does not immediately run up against the issue of our Nation’s 

fiscal situation. Today’s hearing is no exception. Our Government’s 

vast annual deficit, the rapid run-up of the public debt, the borrowing and, indeed, the outright printing of dollars to pay that deficit and debt, have become extraordinarily critical issues. 

This is not simply a crisis at the Federal level, but also a crisis 

for state and local governments, and many individual Americans as 

well. On a personal note, our county mayor was recalled by 88 percent of the electorate based on this budget crisis just yesterday. 

It is a crisis that appears in newspaper stories every day, with 

headlines like: ‘‘From California to New York, States are Facing 

Monstrous Deficits, and Cities in Debt Turn to States, Adding 

Strain.’’

With such stories in mind, it is easy to understand why the 

American people are demanding that we carefully scrutinize our 

2

Government spending, both domestic and foreign, both large and 

small. 

A rate of increasing our budgets, such as the 2-year increase of 

an estimated 57 percent in USAID’s budget between Fiscal Year 

2008 and Fiscal Year 2010 or the estimated 147 percent increase 

in USAID’s budget between Fiscal Year 2001 and Fiscal Year 2010, 

is just not feasible in light of what is happening here at home. As 

I said in our hearing with Secretary Clinton this month, we must 

make difficult decisions in light of the unfortunate fiscal priorities 

facing us. 

Those who complain about diminished levels of U.S. aid funding 

need to ask themselves: How much less would an insolvent United 

States be able to do? There are, in fact, freezes or cuts that can be 

made that would actually help us maintain our efforts to help the 

most impoverished people abroad who truly need our help. 

We can take greater steps toward using small-scale education 

vouchers of just a few dollars or less to help parents in poor countries choose their children’s schools. This will help them get around 

the wasteful, corrupt bureaucracies that tend to expend large sums 

while not always providing poor children with a good education. 

If we cut our Development Assistance funding, we can move 

some of that funding to USAID’s Development Credit Authority 

program, which has a proven track record of leveraging about $28 

dollars in private funds in support of development for every dollar 

provided by USAID. 

As we cut elsewhere, we can move more funding to USAID’s 

Global Development Alliance program, which, again, leverages private capital in support of development, focusing on partnerships 

with corporations and major private donors, who can contribute 

large, matching sums again cutting our Government’s cost. 

We can freeze further increases in personnel. USAID’s staffing 

alone has already grown by an estimated 22 percent in just the 

past 2 years, for example. We can require the reform of the several 

international development aid agencies run by the U.N., ending the 

waste caused by staffing and program duplication that ultimately 

comes out of American taxpayers’ pockets. 

We can insist that governments in developing countries that receive our assistance be as committed to helping their own people 

as we are, and end purchases of things like self-flattering monuments that fly in the face of our taxpayers efforts to help. We 

should not be giving aid to corrupt, unaccountable governments to 

begin with. The focus should be from the grassroots up. 

Our hearing this morning is about the budget requests for 

USAID and MCC and the need to ensure maximum return on our 

investments. This hearing also concerns the lessons learned since 

USAID’s creation 50 years ago, as well as the need for a new assistance concept, which led to the creation of the Millennium Challenge Corporation in the year 2004. 

In that regard, concerns have been raised as to whether the MCC 

will remain a unique agency that focuses on economic growth and 

the graduation of countries from dependence on our aid, or if it will 

begin to fall into the trap of providing more and more assistance 

agreements with foreign governments, irrespective of U.S. requirements or priorities. 

3

After more than five decades of providing aid to other countries, 

we know that assistance can produce dependency and corruption. 

Ms. Dambisa Moyo, an economist and critic of our current assistance program, made these comments in 2009:

‘‘The African Union estimated that corruption was costing 

the continent [of Africa] $150 billion a year, as international 

donors were apparently turning a blind eye to the simple fact 

that aid money was inadvertently fueling graft.’’

And she continues:

‘‘A constant stream of ‘free’ money is a perfect way to keep 

[a] bad government in power. The aid system encourages poorcountry governments to pick up the phone and ask the donor 

agencies for [the] next capital infusion.’’

And she ends with this:

‘‘It is no wonder that across Africa, over 70 percent of the 

public purse comes from foreign aid.’’

We know that economic growth is ultimately the only way that 

development in impoverished countries can be sustained after our 

assistance programs end and, at some point, they need to end. 

Today, we have before our committee two leaders of United 

States aid agencies who are working hard to meet the challenge of 

preventing cycles of aid dependency and to create the kind of economic development in those countries that will do just that, develop while helping those most in need. 

At this point I would like to recognize my friend and colleague, 

Congressman Berman, the ranking member of this committee, for 

his opening statement. 

[The prepared statement of Chairman Ros-Lehtinen follows:]

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Mr. BERMAN. Thank you very much, Madam Chairman. I do appreciate the opportunity to review the Fiscal Year 2012 budget request for USAID and MCC, and to explore the steps each agency 

is taking to make our aid programs more effective and more efficient. I want to welcome both Dr. Shah and Mr. Yohannes here. 

This is Mr. Yohannes’ first chance to testify before the committee. 

When Dr. Shah last testified before this committee, he had only 

been in the job for a few months. Immediately he was caught up 

in coordinating the U.S. Government’s response to the earthquake 

in Haiti. Understandably much of the hearing was devoted to examining the status of those relief efforts. 

At that time the administration was also in the midst of conducting its QDDR and simultaneously a review of development policy, so we did not get much of a chance to get into the specifics 

about his plans for reform. 

Thankfully, Dr. Shah did not let the press of all this other business deter him from pursuing an overhaul of the agency. In the 

year since he last appeared before us, he has embarked on a very 

ambitious reform agenda aptly named ‘‘USAID Forward.’’

The aim of this effort is to change fundamentally the way the 

agency does business. It encompasses reforms in nearly every aspect of the agency’s programming and operations. Under Dr. Shah’s 

leadership USAID is taking aggressive steps to harness science, 

technology, and innovation in support of development. He is exploring new ways of partnering with the private sector to leverage resources and achieve break-throughs. 

Likewise, the MCC finds itself at a pivotal juncture. Created by 

President George W. Bush as a new approach to development, the 

MCC forms partnerships with poor but well-governed countries to 

eliminate constraints to growth. 

Given that the MCC was established by Republicans for the explicit purpose of creating a new model for development assistance, 

I find it astonishing that H.R. 1, the Republican CR, slashes funding for the MCC by nearly 30 percent from the Fiscal Year ’10 enacted levels. Even the development credit authority—cited by my 

chairman as a small but effective way of leveraging dollars—is cut 

in H.R. 1, not expanded. 


65301c_3.eps
7

Now that the MCC’s first two compacts have been completed in 

Honduras and Cape Verde, and final evaluations are being conducted, we have an opportunity to assess the added value of the 

MCC. Many aspects of the MCC’s innovative model in such areas 

as country ownership, transparency and accountability, and managing for results are already being adopted by other foreign affairs 

agencies as a result of the QDDR. 

Yet, the MCC has not been content to sit on its laurels. It is continually proposing new ways to improve and strengthen its effectiveness including a new initiative to expand partnerships with the 

private sector. 

I share the view of everyone on this committee that in this difficult economic climate we have an obligation to ensure that every 

tax dollar is put to the best possible use and that we are receiving 

a meaningful return on our investments. No area of the budget 

should be exempt from scrutiny. 

I must say that I am concerned by the unrealistic expectations, 

often based on misinformation, that cuts in foreign assistance will 

fix the deficit. A poll last fall by the Kaiser Family Foundation 

found that four in 10 Americans erroneously believe that foreign 

aid is one of the two biggest areas of spending in the Federal budget. 

A December poll by the University of Maryland showed that 

when asked to estimate the amount of Federal budget that is devoted to foreign aid, the average American says 25 percent. When 

asked how much would be an appropriate percentage, the median 

response is 10 percent. Of course, what we actually spend is about 

1 percent. 

What is particularly interesting about this poll is that over the 

15 years it has been conducted, the amount Americans think is 

spent on foreign aid has gone up from 20 to 25 percent, while the 

amount they think should be spent has remained steady at 10 percent. Even during this time of economic distress, people still think 

we should be spending about 10 times as much on foreign assistance as we actually are. 

As members of this committee, I think we have a special obligation to exert leadership to help correct some of these misunderstandings. The U.S. Agency for International Development and the 

Millennium Challenge Corporation provide the bulk of our development assistance around the world. They use different approaches, 

work with a different though sometimes overlapping pool of countries, but they both seek to reduce global poverty by promoting economic growth. 

Reducing global poverty is not a matter of altruism, though it 

would be the right thing to do even if it brought us no direct benefits. The truth is that addressing hunger, disease, and human misery abroad is a cost-effective way of making Americans safer here 

at home. Our foreign assistance benefits us as much as it does our 

local partners. 

Let me offer a few examples. Anyone who had the experience of 

suffering the H1–N1 flu last year, which fortunately turned out to 

be much less deadly than we feared at first, can tell you that it is 

worth investing in surveillance, detection and prevention systems 

abroad. 

8

For just pennies a dose, we can rid the world of polio, which was 

one of the most dreaded childhood diseases of the 20th Century in 

the United States. 

More than one in every five U.S. jobs is linked to exports and imports of goods and services, and approximately half of all U.S. exports go to developing countries. If those countries are not stable 

enough to serve as reliable trading partners, we lose our overseas 

markets. And if these people don’t have a way of earning income, 

they won’t be able to afford our products. 

Dramatic increases in food prices in 2007–2008 created a global 

crisis and led to political and economic instability around the 

world. If we are not helping to increase global food production, addressing the impact of climate change, and enabling couples to plan 

the size of their families, these problems are only going to get 

worse. 

The recent democracy movements across North Africa and the 

Middle East have demonstrated not only the benefits of our security assistance, but also the importance of contingency funds for a 

flexible response. Countries that descend into chaos and anarchy 

provide breeding grounds for extremism and training grounds for 

terrorists. Just a small investment in supporting stable and peaceful transitions to democracy could yield far greater gains for U.S. 

national security than billions for developing new weapons. 

Since my time has expired, even though my statement has not 

ended, I will ask unanimous consent to include my entire statement in the record and I will forego describing the work of our foreign aid programs in Iraq, Afghanistan, and a number of other 

countries as part of our national security strategy. Thank you, 

Madam Chair. 

Chairman ROS-LEHTINEN. Without objection. Thank you, Mr. 

Berman. 

Chairman Smith, who chairs the Africa, Global Health, and 

Human Rights Subcommittee, is recognized for 1 minute. 

Mr. SMITH. Thank you very much, Madam Chair. 

Dr. Shah, in your testimony you state that USAID supports 

faith-based organizations. Last week I chaired a hearing on the 

Democratic Republic of the Congo and Catholic Relief Services’ Sexual and Gender-Based Violence Advisor Francisca Vigaud-Walsh 

testified that she has repeatedly seen rape survivors in the eastern 

Congo walk many kilometers from their displacement camp to the 

nearest parish for assistance. 

They do so not only to avoid stigmatization by going to services 

available within the camp, but also because they trust the church. 

This scenario is played out repeatedly throughout Africa. Many 

people trust the churches and faith-based organizations and will 

seek them out even when non-FBO services are closer or readily 

available. 

A Gallup Poll asked sub-Saharan Africans in 19 countries about 

their confidence in eight social and political institutions. Seventysix percent responded they were most confident in their religious 

organizations in their countries. 

Not only are faith-based organizations culturally important in 

places like Africa, often they are the primary provider of healthcare 

services. I am concerned and I hope, Dr. Shah, you speak to this, 

9

that as the Global Health Initiative is unveiled and as it evolves, 

what is being done to ensure that grants are not discriminated 

against in terms of going to faith-based organizations because 

they——

Chairman ROS-LEHTINEN. Thank you. 

Mr. SMITH [continuing]. Do not include population control? 

Chairman ROS-LEHTINEN. Mr. Ackerman, the ranking member of 

the Subcommittee on Middle East and South Asia. 

Mr. ACKERMAN. Thank you, Madam Chairman. I fear that we 

have forgotten how to reason. When we were kids we used to tease 

each other and ask silly-seeming questions like, ‘‘Do you walk to 

school or take your lunch?’’ It seems to me that is the question that 

has been placed before us today. As I only have 30 seconds left, I 

will try to unwind the puzzle when I have my 5 minutes. I yield 

back. 

Chairman ROS-LEHTINEN. Thank you so much. 

Mr. Rohrabacher, the Subcommittee on Oversight and Investigations chair. 

Mr. ROHRABACHER. Thank you very much, Madam Chairman. 

Early this morning I was called by our U.S. Ambassador to Pakistan. He was on a plane escorting a U.S. Government employee, 

Raymond Davis, out of Pakistan. This is a cause for joy and happiness and we are very grateful that he has been released. 

That a recipient of U.S. aid would treat our people in such a way 

is shocking and should suggest that we take a close look at the fundamentals of who we give our aid to and whether or not they are 

our friends or whether they are treating us like suckers. Thank you 

very much, Madam Chair. 

Chairman ROS-LEHTINEN. Thank you. 

Mr. Payne, the ranking member on the Subcommittee on Africa, 

Global Health, and Human Rights is recognized. 

Mr. PAYNE. Thank you very much. I also think that we need to 

review how our so-called friends treat us. However, we also need 

to evaluate how our representatives behave in foreign countries. I 

think everything has to be held in balance. 

Let me just say that if these cuts continue, we will certainly see 

an impact on not only our U.S. economy but national security, and 

our Nation’s moral standing. These cuts, in my opinion, go too 

deep. We all know that we will have to tighten the belt. We all 

agree with that and we think we should move but I do not want 

to see us being a pound wise and a penny foolish. 

Some of the increases in staff at USAID is because they are taking away from contractors and in the long run there will be saving 

of funds. Once again, thank you very much, Ms. Chair. 

Chairman ROS-LEHTINEN. Thank you, Mr. Payne. 

Mr. Chabot, Subcommittee on Middle East and South Asia chairman. 

Mr. CHABOT. Thank you, Madam Chair. Let me just remind my 

colleagues on the other side of the aisle when they continue to rant 

against H.R. 1 and they were slashing and cutting and burning and 

all the rest that we are broke and that is the reason we are trying 

to be responsible and do the right thing. 

As far as the American people not understanding exactly how 

much is being paid out, there are all kinds of things floating out 

10

there that Members of Congress get free medical care and do not 

pay into Social Security. There are a lot of things and a lot of misinformation out there. 

I have got a judiciary hearing. I probably will not be able to stick 

around and leadership has a jobs forum. There is a lot going on so 

let me just ask either during this hearing or in follow-up on questions, I am interested in funding. The USAID’s political party policy explicitly states, ‘‘Assistance to non-Democratic political parties 

is prohibited.’’

The vagueness of the policy, however, raises a couple of questions. I just want to know what the policy is relative to the Muslim 

brotherhood in Egypt. Thank you. 

Chairman ROS-LEHTINEN. Thank you, Mr. Chabot. 

Mr. Meeks, the ranking member on the Subcommittee on Europe 

and Eurasia. 

Mr. MEEKS. Thank you, Madam Chairman. Let me just say that 

it is vision sometimes that we have to have. Yes, we have got to 

tighten our belt. We have to look at what our colleagues, what our 

allies in Great Britain did. They tightened their belt. 

They are having a fiscal crisis but yet they had vision enough to 

know not to cut substantially their foreign aid budget because the 

world is a much smaller place and we are now moving in that direction where we are working with other folks and that is what we 

need to do. 

It is pay me now or pay me later. It is either have short-term 

gain or long-term pain. If we slash the way we are talking about 

slashing, we are going to feel the pain in the long-term. We should 

have some vision and understanding of the entire world that we 

live in because we don’t live in this world by ourselves. I yield 

back. 

Chairman ROS-LEHTINEN. Thank you. 

Mr. David Rivera of Florida. 

Mr. RIVERA. Thank you, Madam Chairman. I hope as we get into 

our question and answer period that you will address a major concern of mine which is USAID’s treatment of its own subcontractors 

in hostile environments such as Cuba. 

I think the reason Alan Gross’ situation speaks to this, it is my 

understanding that USIAD recently or is now basically abdicating 

its concern for our workers who are in our service and are exercising their duties on behalf of this country by requiring the signing of waivers for NGOs and for subcontractors, waivers over their 

own safety of this personnel. 

I think it is outrageous that we would basically wash our hands 

over our own people in the service of this country for USAID’s development programs and democracy building programs. I hope we 

will address that in the hearing. 

Chairman ROS-LEHTINEN. Thank you so much. 

Mayor Cicilline. 

Mr. CICILLINE. Thank you, Madam Chairman. Welcome to the 

witnesses. We heard recently from the Secretary of State about the 

three pillars of our foreign policy; diplomacy, development, and defense. I recognize that all three of those are important parts of it 

and particularly look forward to hearing about the development 

component today. 

11

I think we need to all be reminded that the commitments we 

make and the investments we make in this area of our foreign policy are not only describe our values as a country in promoting freedom and democracy around the world, but also ultimately enhance 

our national security interest by creating a safer world. I look forward to your testimony and welcome you to the committee. I yield 

back. 

Chairman ROS-LEHTINEN. Thank you. 

Mr. Mike Kelly is vice chair of the Subcommittee on Asia and the 

Pacific. 

Mr. KELLY. Thank you, Madam Chair. 

Thank you for being here today. I have got to tell you, though, 

we are the only country in the world that gives more than anybody 

else, 1 percent of our budget, toward what everybody else does. If 

we would quit going around the world going mea culpa, mea culpa, 

mea maxima culpa, we just don’t do enough, I think we would get 

a lot more accomplished. 

I don’t think that we are talking about not helping foreign countries. I think we are talking about doing what’s prudent for the 

American people. I wish the people on the other side of the aisle 

would stop going around the world and telling everybody how terrible America is. We should be talking about how great we are. Nobody does more than we do for the world. Thank you. 

Chairman ROS-LEHTINEN. Thank you. 

Mr. Keating. Oh, Mr. Connolly. Sorry. Thank you. 

Mr. CONNOLLY. Thank you. I want to say to my friend wearing 

the green tie with an Irish name who just admonished the other 

side of the aisle, at least I don’t know Democrats who go around 

the world saying mea culpa, mea culpa, mea maxima culpa. I speak 

Latin, Mr. Kelly, so I know whereof you speak. 

I will say this. If we continue to slash the foreign assistance 

budget irresponsibly as your side of the aisle did in H.R. 1, we are 

going to cripple our ability to exercise diplomacy. Then we are 

going to say requiescat in pace. We need a vibrant robust foreign 

assistance program as Secretary Gates said in the Bush administration when he was in that administration and as Secretary Clinton said just a few weeks ago before this very committee. I wish 

Mr. Chabot was still here because I want to respond to him, too, 

since he directly addressed——

Chairman ROS-LEHTINEN. Perhaps in the afterlife. 

Mr. CONNOLLY [continuing]. This side of the aisle. 

Chairman ROS-LEHTINEN. Right now, Mr. Mack, Subcommittee 

on the Western Hemisphere chairman, is recognized. 

Mr. MACK. Thank you, Madam Chairman. I appreciate the hearing today because I have some big concerns when it comes to the 

Millennium Challenge Corporation and what messages we might 

be sending around the world. I would like to also just add my two 

cents into this back and forth. I do not speak Latin so I am not 

going to do any of that but I will tell you this. 

I think what I do speak is what the American people are saying 

is, ‘‘We are broke. We are broke. Every time we spend more money, 

we borrow it from somewhere else.’’ We cannot afford to continue 

to do that. I will agree with my colleagues that we have a lot of 

12

priorities but so far what I’ve seen on the other side of the aisle 

is they haven’t found something yet that they would like to cut. 

Every time we go to a hearing all we hear is, ‘‘We are slashing. 

We are slashing.’’ But you haven’t offered anything to cut and we 

are in this predicament because of the leadership of the other side. 

Chairman ROS-LEHTINEN. Thank you. 

Mr. MACK. I don’t know where Latin fits into that but thank you, 

Madam Chair. 

Chairman ROS-LEHTINEN. Thank you. 

Mr. Murphy of Connecticut. 

Mr. MURPHY. Thank you, Madam Chair. 

I look forward to your testimony. I think part of the frustration 

comes from the fact that a lot of us don’t understand the distinction 

that gets made between a scared cow, which is the Department of 

Defense, and the State Department and USAID budget that seems 

ripe for targeting. 

I think every country in the industrialized world has figured out 

that a national security strategy involves being very strong when 

it comes to tanks and guns but being very strong when it comes 

to foreign aid as well. I think that we see a double standard that 

doesn’t make sense with how most national security experts would 

describe a safe nation in the long run. 

My one query as you make your comments is back to Mr. Kelly’s 

point in part. I want to make sure that when we are putting aid 

into these communities, how do we make sure that we get credit 

for it? How do we make sure that it has an American face—to the 

degree that we can—so that people understand the commitment 

that we are making here. I know it is an ongoing conversation and 

something I am very interested in hearing about. 

Chairman ROS-LEHTINEN. Thank you. 

Ms. Buerkle of New York who is the vice chair of the Subcommittee on Terrorism, Nonproliferation, and Trade. 

Ms. BUERKLE. Thank you, Madam Chair. 

Good morning and thank you for being here this morning. I agree 

with the gentleman, Mr. Connolly, who said we need a vibrant foreign affairs policy. However, that policy needs to be one that is prudent with the American taxpayer’s money when it is accountable 

to the American taxpayer’s money and what is in the best interest 

of this country. I look forward to the hearing this morning. Thank 

you. 

Chairman ROS-LEHTINEN. Thank you so much. 

Judge Poe, the vice chair of the Subcommittee on Oversight and 

Investigations, to wrap up. 

Mr. POE. Thank you, Madam Chair. In my opinion the foreign 

aid process is a mess. Fifty years after a Foreign Aid Authorization 

Act the process is still what President Kennedy called bureaucratic, 

fragmented, awkward, and slow. It is no surprise that our aid in 

real dollars is now at the highest level since 1985 and that in FY 

2009 we gave twice as much money away as any other country. 

We need to bring transparency and accountability back to the 

process. In typical Washington fashion all of our foreign aid is done 

at once in one bill. We either pass the bill for everybody or no one 

gets it. I am introducing legislation today that breaks this process 

13

up. It changes House rules so members are able to vote on each 

individual country one at a time. 

For every dollar handed out we will be able to ask, How does this 

further the interest of the United States? If a country can justify 

that it is critical to U.S. interest, then it will pass. If not, the bill 

should not pass. I think it is time we show some accountability as 

Members of Congress and account for the money we spent overseas. Thank you, Madam Speaker. 

Chairman ROS-LEHTINEN. Just the way it is. Thank you, Judge. 

The Chair is pleased to welcome our two esteemed witnesses. Dr. 

Shah is the Administrator of the United States Agency for International Development. He was nominated by President Obama and 

sworn in as the 16th USAID Administrator in December 2009. 

Previously Dr. Shah served as Under Secretary for Research, 

Education, and Economics, and as Chief Scientist for the U.S. Department of Agriculture. He has also served as the Director of Agricultural Development in the Global Development Program at Bill 

and Melinda Gates’ Foundation. Dr. Shah earned his medical degree from the University of Pennsylvania Medical School and a 

master’s degree in health economics from the Wharton School of 

Business. 

Dr. Shah, thank you for attending. 

Then we will hear from Mr. Daniel Yohannes, the Chief Executive Officer of the Millennium Challenge Corporation. He was nominated for this position of CEO by President Obama in 2009. Mr. 

Yohannes is an active philanthrophist and a former banker previously serving as vice chair of the U.S. Bank. 

Immediately prior to his confirmation Mr. Yohannes served as 

president of NMR Investment, a firm specializing in financial services and the renewable energy sector. From ’92 to ’99 Mr. Yohannes 

also served as president and CEO of Colorado National Bank and 

prior to that held numerous leadership roles at the Security Pacific 

Bank now called Bank of America. 

It is also a pleasure to have you here, Mr. Yohannes. Please feel 

free to summarize your statements. Your statements in full will be 

made part of the record. 

Thank you, Dr. Shah. We will begin with you. 

STATEMENT OF RAJIV SHAH, M.D., ADMINISTRATOR, U.S. 

AGENCY FOR INTERNATIONAL DEVELOPMENT 

Dr. SHAH. Thank you very much Madam Chairman, Ranking 

Member Berman, and members of the committee. I am honored to 

join you here today in support of the President’s Fiscal Year 2012 

Foreign Operations Budget Request. 

First, I want to briefly comment on USAID’s response to the devastating earthquake and subsequent tsunami that hit Japan last 

Friday. As we speak today, a disaster assistance response team and 

two urban search and rescue teams from Fairfax and LA County, 

the same men and women that responded so bravely and effectively 

to last year’s tragic earthquake in Haiti, are working to save lives 

in Japan. I would like to thank these teams for their courage. 

In the Middle East our humanitarian response experts are currently on the Tunisian border and in Egypt helping coordinate and 

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ing the conflict in Libya meeting immediate needs and returning 

foreign workers safely to their countries of origin. 

Madam Chairman, 1 year ago in this chamber, you asked me to 

increase our private sector engagement to harness the power of 

technology and to expand the use of our development credit authority to more effectively leverage private investment. 

Ranking Member Berman, you emphasized the importance of ensuring that aid reaches those who need it most and that it is delivered with maximum effectiveness and efficiency. I have taken these 

concerns to heart. Consistent with the President’s Policy Directive 

on Global Development and the Quadrennial Diplomacy and Development Review, we have launched a series of comprehensive reforms we call USAID Forward, designed to cut red-tape, improve 

accountability, and deliver better results. 

We are also placing a renewed emphasis on economic growth, 

driven by private sector investment as demonstrated through our 

Feed the Future Food Security Initiative. Groundbreaking new 

partnerships with Pepsi-co and General Mills will deliver tens-ofmillions of dollars in investment in African agriculture achieving 

tremendous leverage for our taxpayers and helping to create stability in places where food riots and famines are all too familiar. 

Our FY 2012 budget request doubles the capacity for development credit authority and more than doubles the ceiling on loan 

guarantees allowing us to generate $28 of private investment for 

every single dollar of taxpayer funds applied. 

And across our portfolio, we are seeking new ways to harness the 

power of technology for development. In Haiti, rather than rebuilding brick-and-mortar banks devastated by the earthquake, we are 

partnering with the Gates Foundation to begin a mobile banking 

revolution in the country. 

In India we help farmers access solar powered micro-irrigation 

systems that are in part produced in the United States and improving food security abroad while creating jobs in Georgia and Michigan. 

The FY 2012 budget includes dedicated funding for these innovative approaches to development while outlining a number of specific and significant cuts. This budget eliminates bilateral development assistance in 11 countries and shuts down USAID missions 

in three. It cuts development assistance in at least 20 countries by 

more than half. It reallocates almost $400 million in assistance and 

shifts more than 30 Foreign Service positions toward priority countries and initiatives designed to align with our national security 

and keep us safe. 

This year, for the first time, the President’s budget presents 

USAID war funding in a separate account called the Overseas Contingency Operations, or ‘‘OCO’’ Account. This transparent approach 

distinguishes between temporary one-time war costs and our enduring budget. 

USAID’s logo is a handshake accompanied by the motto ‘‘From 

the American People.’’ Now more than ever, we are delivering benefits for the American people. 

In the most volatile regions of Afghanistan and Pakistan USAID 

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ance, improving the lives of local citizens, and ultimately paving 

the way for American troops to return home safely. 

As General Pertaeus warned just yesterday, inadequate 

resourcing of our civilian partners, State and USAID, could, in fact, 

jeopardize the accomplishment of the overall mission. 

USAID’s work also strengthens America’s economic security. By 

establishing links to consumers at the bottom of the pyramid, we 

can effectively position our country and our companies to sell more 

goods and services in the markets of tomorrow. 

Best of all, we deliver these benefits for the American people for 

less than 1 percent of our Nation’s total budget. Putting these values into action will deliver real results for the American people, 

making us safer and more prosperous. 

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

[The prepared statement of Dr. Shah follows:]

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Chairman ROS-LEHTINEN. Thank you so much. 

Mr. Yohannes. 

STATEMENT OF MR. DANIEL YOHANNES, CHIEF EXECUTIVE 

OFFICER, U.S. MILLENNIUM CHALLENGE CORPORATION 

Mr. YOHANNES. Madam Chairman, congratulations on taking the 

gavel of the House Foreign Affairs Committee. We look forward to 

working with you and Congressman Berman, and every member of 

the committee to advance American interests and values and reduce poverty in developing countries around the world. 

I am especially pleased to be appearing here today alongside my 

good friend Dr. Shah. We speak on a regular basis about how our 

agencies can collaborate, avoid duplication, and leverage our comparative advantages. 

If there are no objections, I would like to submit my full testimony for the record and summarize it for you now. 

Let me offer my view of what makes the MCC so effective and 

distinctive. Republicans and Democrats, including some of you, 

worked together to create MCC in 2004. You outlined a new vision 

for development, one based on accountability and a business-like 

approach. 

My own background is in banking. I bring a banker’s perspective 

to my role as CEO of MCC. I have a client, the U.S. taxpayer. I 

have a partner, the countries receiving MCC assistance and the 

citizens they represent. I have a goal, to get the best return. 

We focus on economic growth, sustainability, country ownership, 

transparency, and results. I am very pleased that the principles 

that MCC was founded on and have implemented for the past 7 

years are central to the administration’s new global development 

policy and to the priorities that we have heard from Congress. 

In deciding where to invest, MCC measures whether a country 

has created a policy environment for sustained economic growth. 

This focus on economic growth and a transparent selection process 

allow us to say no to those countries that are not accountable to 

their people and not pursuing policies that promote markets and 

economic growth. 

We believe that engaging with developing countries in a targeted 

selective way is a good way to achieve development impacts. This 

is fiscally responsible and it is critical for helping poor countries attract private sector investment which I believe is the only path to 

ending reliance on assistance. 

MCC also puts a laser focus on results. All donors and host countries are interested in achieving results. What sets MCC apart is 

our rigorous, systematic, and transparent methods of evaluating 

the impact of our programs. From the beginning, our projects are 

subjected to a thorough analysis to ensure that there will be an 

economic rate of return. 

From MCC’s current investments we expect more than 170 million people and the poorest countries will benefit. We expect incomes to rise by over $12 billion over the life of those investments. 

Those projects are underway and on track. 

We do have early data that is extremely promising. Let me give 

you an example. In Honduras preliminary data collected by program implementers of our agriculture program suggest that farmVerDate 0ct 09 2002 14:51 May 17, 2011 Jkt 000000 PO 00000 Frm 00026 Fmt 6633 Sfmt 6633 F:\WORK\FULL\031611\65301 HFA PsN: SHIRL
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ers receiving assistance from MCC saw their annual net income 

rise 88 percent on land being cultivated with new practices from 

$1,880 per hectare to $3,550 per hectare. 

I want to stress that this is early data and we will know much 

more when independent evaluations are complete. This is the kind 

of strong return on the U.S. taxpayer’s investment that MCC is 

working to deliver. 

Looking ahead President Obama has requested $1.125 billion to 

fund MCC in the next fiscal year. This amount would enable MCC 

to sign compacts with Indonesia, Georgia, and Ghana. These countries were selected because of their strong policy performance, their 

status as important emerging markets, and their strategic importance to the United States. 

With that, Madam Chairman, I would like to again state my appreciation for your support and this committee’s support for MCC. 

I look forward to our discussion. Thank you. 

[The prepared statement of Mr. Yohannes follows:]

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Chairman ROS-LEHTINEN. Thank you very much for excellent testimony and they will be made part of the record. 

I wanted to ask some questions. I don’t think we will have time 

for answers but would love to have them in writing later if I could 

and we will provide those for you. 

On Honduras, thank you for mentioning that country. While I 

was disappointed that the Honduran Government was unable to 

qualify for a second compact due to the wrongdoings of its predecessor government headed by Manuel Zelaya, I recognize the principal decision of MCC. I commend MCC’s commitment to working 

with the current Government of Honduras to advance its efforts in 

support of accountable governance, enhanced management of public 

resources and fiscal transparency. 

However, our State Department is continuing to impose pressure 

tactics and unjust visa policies against those who defended the sanity of the Honduran constitution and the rule of law against 

Zelaya’s attacks more than a year after President Lobo took office. 

So our State Department that is harassing those who uphold the 

rule of law in Honduras are really undermining the very investments that MCC and USAID have made, are making, and plan to 

make. One is punishing and the other one is trying to help. So 

what steps is MCC taking to compensate for the time lag under its 

corruption indicator for future determinations? 

My second question is for Dr. Shah and that is about the announcement of a U.S. enterprise fund for Egypt. Yesterday Secretary Clinton said in Cairo that she will seek a quick congressional approval of an enterprise fund for Egypt funded at $60 million. Monies from such funds come out of AID’s budget as a rule. 

Our committee has not been consulted but was only told informally yesterday when we inquired there are serious issues involving some of our earlier enterprise funds. In one case the executives 

of the funds were allowed to set up a stock option plan and when 

they closed down the fund’s operations, the CEO reportedly gave 

himself $22 million, the chief financial officer was awarded $9 million, the managing director reportedly got over $8 million, and 

other executives got between $1 million and $4 million each. 

Meanwhile, $200 million of that fund’s cash was transferred to 

a legacy foundation. The taxpayers got back a grand total of $27.5 

million. The oversight of this legacy foundation’s set-up by enterprise funds as they have closed down operations have been questionable to say the least. Why would we do this again now in Egypt 

given these issues? 

Lastly, and you can get back to me in writing, on Afghanistan. 

In early 2010 the Washington Post reported that the Kabul bank 

with its ties to the Karzai family and sometimes questionable practices played a part in what they say is, ‘‘Crony capitalism that enriches politically connected insiders and dismays the Afghan populous.’’

I wanted to ask if the accounting firm Deloitte or any other 

USAID contractors reported incidences of malfeasance at the bank, 

what was the damage estimate conducted as a result of the run on 

the bank, and did USAID conduct a performance review or audit 

of the Deloitte contract? 

38

In my opening statement I pointed out that times are tough and 

I want all of our agencies who appear before us, our agency heads, 

to know that some of us are very serious about cutting the budget. 

I had mentioned that the mayor of Miami Dade County and a county commissioner—Miami Dade is a very large county—was recalled 

by 88 percent of the electorate yesterday, an amazing turn of 

events due in large part for approving a bloated county budget that 

increased property taxes. 

There were no problems of raft or corruption or ethical issues involved in these two officials at all. Voters want fiscal sanity. I 

would hope that all of our agencies when they present their budgets keep that in mind and that this is a serious issue and perhaps 

serious differences between some of our parties. 

Thank you, gentlemen, and look forward to getting your questions later. 

I now would like to turn to my ranking member, Mr. Berman, 

for his questions. 

Mr. BERMAN. Thank you very much, Madam Chairman. I’m 

going to ask, for me anyway, a relatively short question. Not completely short, but relatively short, to give both of you a chance to 

take the remaining hopefully 4 minutes or so to answer it. 

Assume H.R. 1 was enacted into law, the House Republican CR. 

In USAID’s case there would be a 50-percent cut in disaster assistance. The catastrophic damage in Japan serves as a reminder of 

how important it is to have a flexible funding ready and available 

to use in emergency. If this were in a poor country how could we 

have responded in such a situation? 

In MCC’s case a nearly 30-percent cut in your budget would 

mean reducing, delaying, or scrapping any number of compacts 

that you spent years preparing for. How would that affect your 

ability to leverage tough economic and political reforms? 

I might point out in this case these cuts are totally disproportionate, even if one were to accept the overall reductions contained 

in the Fiscal Year ’11 budget proposed by the majority party here. 

Dr. Shah first. 

Dr. SHAH. Thank you. The cuts to the humanitarian account and 

the cuts in H.R. 1 overall for USAID would be absolutely devastating. The humanitarian account allowed us to support the recovery in Haiti. Just in the last few weeks it allowed us to run 

three different humanitarian operations and respond quickly and 

efficiently, transmitting our values and protecting our national security and preventing the need to send in our military. The option 

of using the military as the first line of defense as opposed to civilian humanitarian response is very, very costly and a far less effective way to address these concerns. 

I would also add that those cuts also would affect our food security program, essentially shutting down Feed the Future, which is 

a private sector-oriented program based on the principles of selectivity and accountability and designed to focus on precisely those 

countries and communities where the link between food and security, food riots, and famines is very, very strong. 

It would reverse progress in malaria which, for example, has 

seen a 30-percent reduction in all-cause child mortality as a result 

of a program President Bush created and we have continued. That 

39

would be reversed significantly and would undermine our ability to 

conduct our procurement reforms which allow us to reign in contractors and better manage resources. The meta-story is, over a 15-

year period, USAID staffing has been cut by more than 40 percent. 

The Agency is significantly diminished because of it and we have 

outsourced at great cost to American taxpayers and large inefficiencies some of the functions that absolutely need to be conducted by 

U.S. direct hire staff. All of these reform priorities, including our 

priorities in Afghanistan, Pakistan, Iraq, Sudan, and Haiti would 

be significantly undermined. 

Mr. BERMAN. Mr. Yohannes. 

Mr. YOHANNES. Thank you, Congressman Berman. We have been 

working with Zambia, Indonesia, and Cape Verde. The proposed 

cut would have a significant impact in Indonesia as Indonesia, of 

course, is the most populous country in the world and the largest 

Muslim country in the world. We have been working with them primarily and it relates to the embarkment projects. This would have 

measured consequences in terms of not getting those projects complete if, in fact, the 30-percent cut is made permanent. Thanks. 

Mr. BERMAN. Thank you, Madam Chairman. 

Chairman ROS-LEHTINEN. Thank you very much. 

Mr. Smith. 

Mr. SMITH. Thank you very much, Madam Chair. 

Gentlemen, thank you for your testimony and for your service to 

the country. Let me ask, or make a very brief statement and then 

ask a few questions. 

Secretary of State Hilary Clinton did, in my opinion, a grave disservice in the struggle to reduce maternal mortality worldwide 

when on March 1st before this committee testified that 529,000 

women die from complications in childbirth each year. 

Obviously any woman who loses her life in childbirth, or for any 

reason, is a numbing loss, especially to her family. I would respectfully submit that conveying false information, misleading and inflated numbers, may have shock value but in accuracy in assessing 

efforts to mitigate maternal mortality and engaging in hyperbole is 

wrong. 

The Secretary of State failed at first to acknowledge the massive 

study on maternal mortality financed by the Gate Foundation published in the Lancet last may that found significant progress. It 

had dropped to 342,000. And if deaths attributable to the 

HIV/AIDS pandemic were excluded, it drops to 281,000. Still unconscionably high but not 529,000. 

On September 15, 2010, WHO and several other U.N. agencies 

announced that maternal deaths worldwide had dropped by a third. 

That was the headline, dropped by a third. There estimate is about 

358,000. 

Obviously still unconscionably high but, again, I would respectfully submit false numbers expressed by Mrs. Clinton to this committee undermines the initiatives that are working, especially 

skilled birth attendants, safe blood, adequate nutrition which I 

know, Dr. Shah, you have been a champion of, as has the Secretary 

of State, and maternal health. We need to be accurate in our numbers to the greatest extent possible. Two major studies last year 

couldn’t have been more clear that we are indeed making progress. 

40

Secondly, let me just say briefly that in late February Dr. Bernard Nathanson, the founder of NARAL Pro-Choice America, back 

in 1969 passed away. I would, again, respectfully submit to this administration that a reappraisal, and I won’t hold my breath. It may 

not happen, but a reappraisal at least, about the child in the womb 

and the inherent bigotry and prejudice against that child in the 

womb that is inherent in the abortion culture and the promotion 

of abortion worldwide by this administration at least be taken a 

second look at. 

What caused Dr. Nathanson to change his mind and go from 

being the leading abortionist in the United States of America to a 

leading pro-life advocate? He started doing prenatal interventions, 

blood transfusions. He began to recognize, especially working at St. 

Luke’s Hospital in New York, that the child in the womb ought to 

be regarded as a patient who if that patient has a disability or a 

disease is in need of a lifesaving intervention to enhance or to even 

save their life. 

He saw the gross inconsistency of dismembering or chemically 

poisoning a baby in one hospital room or clinic room while helping 

that child with a medical intervention in the other and he became 

a very strong prolifer. I would hope the administration would take 

a second look at its embrace of abortion globally because it really 

does undermine Millennium Goal 4 which calls for mitigating child 

mortality. 

Let’s face it, abortion is child mortality and there are at least 113 

studies that show a significant association between abortion and 

subsequent premature births. So even for the babies who are born 

later there is an increase or risk of 36 percent of preterm birth 

after just one abortion and a staggering 93 percent increased risk 

of prematurity after two. 

Disability is attributable to some extent, a very large extent, to 

that kind of prematurity or low birth weight. In a developing world 

we promote abortion. Not only do those children die, those mothers 

are wounded, there is also a significant problem of disability that 

will be the deleterious consequence to those children. 

I’m closely out of time. Also, Dr. Shah, I asked you in the beginning of my open statement about faith-based organizations. We are 

very concerned, many of us, not everyone, that faith-based organizations will be excluded because of their lack or unwillingness to 

provide certain types of population control and that whole integration effort, which I know is underway, could preclude them from 

doing what they do best and that is helping mothers and children 

and families in the developing world. 

Chairman ROS-LEHTINEN. Thank you, Mr. Smith. 

Mr. Ackerman, the ranking member on the Subcommittee on 

Middle East and South Asia. 

Mr. ACKERMAN. Thank you, Madam Chairman. 

I wish we could all be that passionate about people who are already born as we are about people who are yet to be born. I don’t 

know if I am more frustrated or amused when some of our colleagues imagine things that aren’t necessarily true and then just 

rail against them. We seem to have a lot of that going on lately. 

I don’t know anybody on our side of the aisle who goes around 

the world disparaging our country but if you want to imagine that 

41

and make it up, that is fine. If you would like to name names, that 

is fine, too. For every Democratic name you give us, or me, I will 

give you five Republican names who go around disparaging our 

President and our administration. But to the question of the day, 

whatever that might be, I think it is, ‘‘Do you walk to school or 

take your lunch?’’ That is really the question I want to ask. 

If you are mad about whatever it was your county commissioner 

did or doesn’t do, do you deny U.S. assistance to people in another 

part of the world? I mean, what does one thing have to do with the 

other? I am not entirely sure. I think we have forgotten how to ask 

the questions or what the policy implications of those questions 

might be. 

Maybe it is that we are more afraid of our voters than we are 

of international disasters or international terrorists, but we have to 

approach these issues, which are big issues, with a lot more intelligence than we seem to be prepared to do and that is all of us. 

I have heard a couple of people, at least, bemoan the imagined 

fact that we are broke. We are not broke. We are the richest nation 

in the world. We are the world’s strongest economy. We are doing 

pretty well. One of the reasons that we are doing well is because 

we’ve done the right things. Not always. We make mistakes. 

The market went down. The market will come back up. We have 

to figure out what the wrong things are and what the right things 

are so that we can do the right things more consistently and not 

do the wrong things at all if that is possible. If there is one lesson 

we should have learned on 9/11 is that if we don’t visit bad neighborhoods, they will visit us. 

How do you justify this disengaging from the world and its problems, especially at a time when such change is coming to so much 

of the world? Where we could have a major influence to get things 

right to make ourselves safe or more secure, wealthier if that is 

your goal, but enriched certainly, then we have to continue with 

the kinds of programs that Dr. Shah and Mr. Yohannes are talking 

about today, or hopefully talking about today. 

I think we seem to be here today mostly for our own entertainment and you have not had a chance to say as much as you 

thought you were going to say. Let me just ask the question. Do 

you walk to school or do you take your lunch and what does one 

thing have to do with the other? 

Dr. SHAH. May I respond to that, Madam Chairman? 

Sir, I think we need to walk to school and take our lunch. At the 

end of the day I just want to clarify that USAID does not fund 

abortion abroad. No U.S. tax dollars go to that purpose. Maternal 

mortality is a great example of where being results-oriented, as 

Daniel has discussed, we are achieving real impacts on the ground. 

We have launched new partnerships with private sector partners 

to leverage our money five-fold in that specific area as the chairman has asked us to consider. At the end of the day, when a 

woman is more likely to die in Southern Sudan in childbirth than 

she is to complete grade school, that is not in our national interest. 

If we even once have to send our military into that type of environment, it will cost more than decades of modest goal-oriented, results-oriented investments that can be made with partners, made 

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ably. We recognize the need to reform and are committed to that. 

Now is our chance to realize some of these important gains and results. 

Chairman ROS-LEHTINEN. Thank you very much. 

Mr. Rohrabacher, Subcommittee on Oversight and Investigations. 

Mr. ROHRABACHER. Thank you very much, Madam Chairman. 

Let me just note that Mr. Smith, who has a passion on this issue 

of the unborn, is one of the most compassionate Members of Congress for children who are born as well. I find that the little comment insinuating that he is not, to be not only inaccurate but unfair, grossly unfair——

Mr. ACKERMAN. Would the gentleman yield? 

Mr. ROHRABACHER. I just have 5 minutes. As long as it is 15 seconds to apologize, I will yield. 

Mr. ACKERMAN. I want to apologize that you misunderstood everything that I said. I did not say Mr. Smith. I said us, you and 

me. 

Mr. ROHRABACHER. Well, I didn’t hear the us part but I didn’t 

hear Mr. Smith either and I think that many of us took it that you 

were attacking Mr. Smith so thank you. I don’t think that criticism 

applies to any of us. 

Frankly, for those of us who think we are doing pretty well I 

think that the American people will try to figure that out whether 

they think we are doing pretty well. We are having to borrow 40 

cents on every dollar that we spend. For a third year in a row this 

administration has proposed about $1.5 trillion more in spending 

than we are taking in. 

With that type of policy our currency will collapse within a short 

period of time. We are not doing pretty well. We have set America 

on a course for the destruction of the well being and quality of life 

of the American people. Unless we make some very serious reforms 

and change the direction of our country, all of our people will suffer. We are not doing pretty well. 

Certainly all of us would like to be generous beyond our means 

because Americans love to be benevolent toward other people because we are free and we understand how when people are struggling, because most of us come from families that were poor at one 

point, but we can’t give away money that we don’t have. 

If we have to borrow it from China and we saddle future American children with paying the interest on this debt, we are doing 

a huge disservice to them. We need to reexamine everything including defense and I think that is a legitimate criticism of many 

Republicans that were unwilling to try to find savings in defense 

while we are willing to cut other things. 

We need to reexamine all of the spending and especially in terms 

of what we are taking from the American people and giving to 

someone else. That is what foreign policy and that is what foreign 

aid is all about. We are taking from the American people resources 

and wealth and giving it to other people. It better be structured in 

the right way so it is efficient and we better damn well know that 

there is a payback. 

We end up with countries like Honduras. Madam Chairman, we 

have American citizens whose property has been expropriated in 

Honduras. They expect us to give them assistance and treat them 

43

well while they expropriate the property of American citizens and 

do not take the steps to make that whole and make those Americans whole again. 

I will be trying my best to see that Honduras doesn’t get one 

penny until it deals with the property expropriations of Americans 

in Honduras. There is a big difference between emergency aid and 

development aid. A huge difference. Indonesia is grateful to us because we went there and helped them after the tsunami. We should 

make sure we give emergency aid to those people who are in crisis 

around the world. Development aid is a whole different thing. 

Mr. BERMAN. Would the gentleman yield? 

Mr. ROHRABACHER. You know what? I need to finish this because 

I have a couple more seconds. Let me just note that I don’t see any 

reason why development aid can’t be made in a way that they are 

paid back. In recent days I have been trying to get in touch with 

the freedom fighters in Libya who are fighting the Gaddafi regime. 

I have been informed by their representatives that any money 

that the United States Government expends to help them win their 

freedom they will repay that debt back to the people of the United 

States of America. There is no reason in the world why we 

shouldn’t be working with other countries in that same way. 

If we are going to help them raise their standard of living or win 

their freedom, let us get a payback so that the children of this 

country aren’t saddled with paying the interest on this debt for the 

rest of their lives. I have used all but 4 seconds and you are certainly welcome to comment for those 4 seconds. 

Chairman ROS-LEHTINEN. Thank you, Mr. Rohrabacher. 

Mr. Payne, the ranking member on the Subcommittee on Africa, 

Global Health, and Human Rights is recognized. 

Mr. PAYNE. Mr. Berman, did you want a second or two? I will 

yield. 

Mr. BERMAN. I thank the gentleman for yielding. Even if one accepts the premise of my friend from California, Mr. Rohrabacher, 

it doesn’t explain why we cut disaster assistance in H.R. 1. I am 

not talking about traditional development assistance; the Republican CR cuts disaster assistance by 50 percent, 50 percent that 

helps us do what we did in Indonesia and in Haiti and in these 

places. 

Mr. PAYNE. Thank you very much. It is certainly clear that the 

world is interdependent. What has happened in Japan is going to 

have an impact on us. Even tourism that would go to our State of 

Hawaii will be reduced significantly because Japanese will not be 

traveling as they will mourn for years and years. If anyone doesn’t 

see that the world is interdependent, what has happened in Bahrain and Libya in oil? I just think that we need to relook. 

Let me just also talk about Secretary Clinton that my friend Mr. 

Smith raised. The 529,000 number came from an outdated fact 

book that the World Bank issued in 2006. Of course, our programs 

are working and because the world is paying closer attention, this 

number is now estimated at 360,000, 1,000 per day, which is still 

unacceptable but I would like to get that information to Mr. Smith. 

Let me just quickly——

Mr. SMITH. Would the gentleman yield? 

Mr. PAYNE. Yes. 

44

Mr. SMITH. The point was the Secretary presented to this committee—I was not in the room at the time or I would have raised 

it directly with her—that was the information as of now. 

Mr. PAYNE. She used outdated information. 

Mr. SMITH. Thank you. 

Mr. PAYNE. Let me just quickly mention that—we could talk 

about so many issues but the whole question of elections and I 

would just like to say that in Africa there will be 16 elections coming up. I wonder what USAID is going to be able to do as it relates 

to elections. We have the problem in Cote d’Ivoire and I think we 

need to put more pressure on Gbagbo to step down. We have elections coming up in Nigeria and other parts of the country, DRC, 

and I am not sure that the preparedness is there. 

Also, let me mention that as we talk about being broke, we are 

spending over $1 trillion a year in Afghanistan. We spend hundreds of millions of dollars in Iraq and no one talks about that. It 

makes no sense at all when we talk about spending less than 1 

percent of our GDP on trying to help people live. We spend trillions 

of dollars on killing people. We are going in the wrong direction. 

I think the morality of our national direction needs to be questioned about the election, sir. 

Dr. SHAH. Thank you. I just want to say that across Africa supporting democratic governance and effective elections is one of our 

top priorities. I think what we were able to do in Southern Sudan 

is a good example of how, when we coordinate with the international community, coordinate with the efforts of diplomacy, do 

joint planning with our military and, frankly, be aggressive about 

prepositioning certain capabilities, voting booths, ballots, even pencils and the mechanisms required to conduct a successful, in this 

case, referendum, we can make a difference. 

Our team was able to successfully see that through. That is the 

model of what we are trying to replicate throughout the continent. 

Our investments in Africa matter a great deal. We are seeing right 

now that we are being outstripped in our investments in Africa by 

the Chinese on a regular basis. On a year-on-year basis they are 

increasing their investments. 

We have tried to present a budget between USAID, MCC, OPIC 

and the other development partners in the Federal Government 

that will reprioritize smart strategic investments in Africa and do 

it in a way that holds leaders and governments and governance 

systems accountable for real results. 

One example of that is our Feed the Future Program, where borrowing an MCC practice that is an absolute best practice, we have 

limited the program to those governments that are willing to double their own investment in agriculture and be accountable for seeing that through. I will ask if Daniel wants to add to that. 

Mr. YOHANNES. Approximately about 70 percent of our investments are in the continent of Africa, about $5.2 billion, and 60 percent of the funds are being utilized in agriculture and infrastructure. This is an area that is key and vital for trade investment opportunities. Ghana is one role model in the region just to give you 

an example of how successful we were in Ghana alone. The MCCtrained farmers for the first time sold $300,000 of crops to the 

45

World Food Program. Not only are we helping this country to become——

Chairman ROS-LEHTINEN. Thank you. 

Mr. YOHANNES. Thank you, Madam Chair. 

Chairman ROS-LEHTINEN. Thank you. 

Mr. Rivera. 

Mr. RIVERA. Thank you, Madam Chair. In light of the situation 

with Alan Gross, U.S. citizen, which I believe is being held hostage 

by the Castro dictatorship and recently received a 15-year sentence 

for exercising democracy-building programs in Cuba, what is the 

status of the Section 109 democracy programs with respect to 

Cuba? 

Dr. SHAH. Thank you. First, let me say with respect to Mr. Gross 

that we have been in contact with and continue to work aggressively, primarily through the State Department, to ensure an effective outcome of that situation. I believe the Secretary and others 

have spoken to that point specifically. 

With respect to our Cuba program, we will be sending the congressional notification up before the end of the month. As you 

know, we have requested $20 million for the program. We believe 

it aligns strongly against the congressional directions that are offered. We intend to see that through and implement it in a manner 

that allows for real transparency and results with respect to how 

that program is implemented. 

There has been a lot of work that has gone into it. Our team is 

happy to offer a much more detailed briefing on the specifics of the 

program going forward but our goals will be to accelerate implementation, get that done in a timely way, get the congressional notification up, and align all of the investments with the basic objective of supporting civil society and democratic space in that environment. Thank you. 

Mr. RIVERA. Thank you. What is the status of USAID’s effort to 

require liability waivers from NGOs involved in Cuba democracy 

promotion programs? 

Dr. SHAH. I will have to come back to you with the specific answer to that question. I will say in general we invest a great deal 

of management effort. I personally engage directly with our implementing partners around the world on issues with respect to the 

safety of their staff. It is well known to this committee that USAID 

officers, USAID Foreign Service Nationals who are locally employed staff, and USAID implementing partners, all take tremendous personal risks. 

Every day I walk through my office there is a plaque on the wall 

in our lobby that puts the names and the years of people we have 

lost in service. That is also true for all of our implementing partners. How we manage their security, our efforts to design programs 

that allow for them to be safe and effective, and our efforts to reach 

out and engage with our community are very robust and have 

grown stronger through our experiences in places like Afghanistan 

and Pakistan. 

Mr. RIVERA. Are we pursuing these liability waivers for NGOs 

with any other country on the planet? 

Dr. SHAH. I will have to come back to you on liability waivers 

specifically, sir. 

46

Mr. RIVERA. Are there any efforts? Are you familiar with any efforts recently on liability waivers for NGOs on Cuba? 

Dr. SHAH. I don’t know the specific answer to that so I will come 

back in a letter with a very detailed response. 

[The information referred to follows:]


65301d_1.eps
47

Mr. RIVERA. Okay. Thank you very much. 

I will waive my time. 

Chairman ROS-LEHTINEN. Thank you very much, Mr. Rivera. 

Mr. Meeks, the ranking member, the Subcommittee on Europe 

and Eurasia. 

Mr. MEEKS. Thank you, Madam Chairman. 

I didn’t want to get into this but I just hope that folks don’t forget the baton they passed to us after 8 years of a Republican administration, 6 years of a Republican majority in both the House 

and the Senate, and a Republican President. What was inherited 

we have got to fix and that is what we are trying to do here. I hope 

we don’t go back to foreign policies. 

We heard before that Iraq was going to—it was not going to cost 

the American people no money. They were going to pay us all this 

back. We heard that before and we are hearing that again that 

somebody is going to pay us back money. We haven’t gotten anything. 

It is still costing us billions of dollars in Iraq. I hope we don’t 

go to the kind of diplomacy where we begin to change names from 

such trivial things of French Fries to Freedom Fries insulting our 

allies, calling them old Europe. I mean, those are the kinds of policies that put us in a problem dealing with the rest of the world. 

I’m hoping that we don’t ever go back to that kind of policy to 

talking that way where we are alienating out allies. We should be 

doing the kinds of things that you are doing, bringing our allies together working together on this place that we call Earth trying to 

save folks, not cutting about 67 percent from international disaster 

assistance, 45 percent from migration and refugee assistance, and 

41 percent from global food relief. I mean, we are all human beings 

no matter what country we come from and no matter where we are 

we should be working together. 

Now, I am going to try to leave that alone. I do want to know 

from you because I want to give you a chance to ask because I really wanted to come here and ask to get an update on Haiti. There 

are elections there. We have talked about we wanted to build it 

better. Can you tell us where we are with Haiti? They are having 

elections. My colleague, Mr. Payne, talked about some important 

elections that are coming up and we need to do that also in Haiti. 


65301d_2.eps
48

Let me just pause for a second and ask you, where are we with 

Haiti? 

Dr. SHAH. Thank you for that question. As you know, we have 

been very committed to putting in place a more innovative, more 

forward-looking development program and reconstruction program 

in Haiti. There are a number of examples where we have tried to 

build back better. We are building a mobile money platform that 

already has three times as many participants in it actively saving 

money and being part of a formal economy than existed in the previous more traditional banking sector. 

In agriculture we are making large scale supportive investments 

to bring private investors including companies like Coca-Cola that 

are now creating the Haiti Hope Product to really help create wellmanaged value chains and supply chains that can reach back to 

Haitian farmers and restart the Haitian agricultural economy. 

In housing we are down from 1.5 million people just a few 

months ago in temporary housing down to 810,000. We are seeing 

the slope of that curve continue to get steep. We think we are being 

successful there. 

In rubble removal we have removed more than 20 percent of the 

rubble that was there from the earthquake and we have done it at 

a pace that is roughly twice as fast as the pace from which rubble 

was removed in the Aceh earthquake. In all of those examples the 

United States leadership of the international community, our focus 

and rigor around real results and our efforts to work with local 

partners like in the construction sector in particular, where we are 

literally training local construction firms to build back to a higher 

earthquake standard, use rebar from local materials to get wall 

strength up to a higher level than what the traditional construction 

methods were, are all having real affects. 

I think the Haiti program should be judged over a multi-year effort but we have tried to use that program to showcase a more private sector-oriented, a more robust, and a more efficient effort to 

reinvest in our neighbors. 

Mr. MEEKS. I’m going to throw a couple of questions out there. 

You probably won’t get a chance to answer them but on the staffing 

needs I would just like to know whether or not it makes some 

sense to make sure that you have decentralized in a sense so that 

more people are on the ground who knows what is going on. For 

example, there is a situation where in Chad if you invest through 

the government it cost more to build a school than by using, say, 

an NGO. 

Whereas in Afghanistan the opposite might be true. Only people 

on the ground would know that so are we utilizing the individuals 

on the ground so that we can make those kinds of decisions as opposed to just saying we are going to use an NGO? 

Further, I would like to know whether or not the proposed continuing resolutions H.R. 1 whether or not you will be able to continue your mandate of objectives in Afghanistan and Pakistan if it 

goes through. Whether or not you will be able to help support the 

democratic movements in Belarus or for the needs of displaced African Latinos and indigenous populations in Ecuador and Columbia. 

Chairman ROS-LEHTINEN. Thank you. 

49

Mr. Kelly, the vice chair of the Subcommittee on Asia and the 

Pacific. 

Mr. KELLY. Thank you, Madam Chair. Not to continue to kick a 

dead horse but I have got to tell you, I am trying to understand 

because there is an old adage out there that charity begins at 

home. I would say this: There is not one person in America who 

does not have a passion to helping those who are in need but we 

are in denial. 

As Dana pointed out, when you are borrowing 40 cents on every 

dollar you spend, understand that once you spend the dollar, the 

dollar has been spent. Whether it is spent at home or abroad or 

any place else the dollar is gone. Once it is gone it is gone. 

Now, I am looking over these figures and while we continue to 

talk it is only 1 percent of our budget. Let me just point this out. 

Maybe I am just not getting it because I just have a bad habit of 

doing that being in business for yourself where you have got to 

have your own skin in the game and every dollar you give is your 

dollar. 

In 2008 for USAID $5.9 billion. In 2009 $6.31 billion. In 2010 

$8.03 billion. Now, I would hardly say that America is being cheap. 

I think what the American people are asking us to do is please, we 

don’t want to stop helping other people around the world but at 

what point do we come to the realization that we are truly broke? 

We are in denial. 

This country is not seeing what we need to see. We need fiscal 

responsibility. Now, I am not saying stop being philanthropic. I’m 

just saying when you spend a dollar, spend it smart. Let us just 

spend it smart. 

Let me ask you, Dr. Shah, I am looking over your testimony. I 

am looking at some things here. Countries such as China which 

has over $2.6 trillion in foreign cash reserves, yet has received 

nearly $1 billion in assistance from the Global Fund in the United 

States to finance its response to AIDS, malaria, and TB. They 

should finance their own health programs. 

How do we justify the $4 million request for China under 

USAID’s apportionment of the global health and child survival account when China can and should finance its own health? I mean, 

it is like me asking Bill Gates if he needs a loan. Where are we 

going with this? Where does the common sense come in to what we 

have to do to get through this crisis we are in? 

If you could please help me out because I am so confused right 

now as to what it is we are trying to do with those dollars we 

spend. Listen, I will tell you right now. Everybody wants to help. 

It is just when you are broke, you are broke. I am asking if we are 

going to spend a dollar, let us spend it really, really smart because 

this money does not belong to me or to this Congress or to this government. 

This is all taxpayer money. It is nice to be benevolent with somebody else’s money. I have done that out of my own wallet so it is 

nice to give somebody else’s money away. If you could just help me. 

How do we justify giving China $4 million? You know, we are going 

to borrow it from them and then give it back to them. That does 

not make any sense to me. 

50

Dr. SHAH. Thank you, sir. I will say that the fiscal responsibility 

point is something we are introducing in all of our work at every 

level and let me give you an example starting with China. 

The $4 million is targeting XDR and MDR tuberculosis. That is 

multi-drug resistant tuberculosis and a new strain of tuberculosis 

called XDR TB that literally we do not as a global community have 

a solution for that is efficient and effective in terms of both the diagnosis and the treatment. 

That effort is to try and identify new diagnostic mechanisms and 

a new treatment methodology so that we can essentially bring the 

cost down on how we treat TB patients all around the world. The 

reason we have to do it there is that is where these strains are and 

that is where the more innovative solutions for diagnostics are. 

If we were successful with that program, we would be able to reduce the unit cost of treating TB by 30 or 40 percent on a panel 

of millions of patients around the world. The truth is the global 

community is currently not winning the fight against global tuberculosis because of these new strains and because of the lack of effective tools. The diagnostic technology we use is almost 100 years 

old. 

As others have pointed out, we don’t do that in any other area 

of fighting so we need new technologies and new approaches. That 

is what that is about. I will also say on the fiscal responsibility 

point that we are trying to look at this from a macro perspective. 

For the overseas contingency operation account, for example, we 

have determined a $4 billion investment in that capability allows 

for a reduction in DOD’s OCO account by $41 billion. That is the 

kind of tradeoff that we think can allow for real fiscal responsibility and stability while achieving the objectives of keeping our 

troops safe and ensuring stability in areas where we have vital national interest. 

Mr. KELLY. Okay. I understand that. Do we have any indication 

of anybody around the world that is sending money to the United 

States to help us with our problems? 

Dr. SHAH. Well, a number of the programs that we do are global 

research programs that do, in fact, attract resources and put those 

investments in U.S. universities, U.S. corporations, U.S. institutions. One good example is partnerships with other countries——

Chairman ROS-LEHTINEN. Thank you. 

Mr. Connolly of Virginia is recognized. 

Mr. CONNOLLY. Thank you, Madam Chairman. 

By the way, I think we did get some foreign assistance from 

some countries during the Katrina crisis in the Gulf. There are examples. I guess I am troubled by this line of questioning that says, 

‘‘We are broke,’’ whatever that means, as a great country. Therefore, apparently we are supposed to conclude we can’t afford to do 

any of these investments. Any of them. 

We can afford to continue to deny ourselves oil royalties so we 

can give a break to the oil companies. The estimate of our subcommittee was that total amount is $53 billion. If we can afford to 

do that, we can afford to continue to provide $1 trillion a year in 

tax expenditures, tax breaks to a lot of corporations that do business overseas, privileged groups economically in the United States. 

51

If you want to be consistent, we can’t afford that. Maybe it was a 

good thing once. We can’t afford it. 

The idea that the world’s surviving superpower cannot afford to 

back up its diplomatic efforts is to me a reckless thought, an unacceptable thought. Frankly, provides the American people with a 

false Hobson’s choice, one I think the Foreign Affairs Committee, 

of all committees, ought to reject. 

Dr. Shah, the continuing resolution that was passed by the 

House majority a few weeks ago proposed a 19-percent cut to the 

2011 requested levels of development assistance. Could that impair 

your ability to do your job from your perspective? 

Dr. SHAH. Yes, sir. That would. 

Mr. CONNOLLY. I can’t hear you. 

Dr. SHAH. Yes, sir. That would. I believe that would undermine 

our ability to invest in our procurement reforms and reign in and 

better manage our contracts and grants programs around the 

world. I think it will undermine some important new initiatives 

like our accountable assistance for Afghanistan program that does 

require greater management resources in order to get out and 

evaluate projects. 

We have just launched a new evaluation policy that I think, borrowing from MCC, will be the best in the world. It insist that every 

single project we do gets an independent third party evaluation 

and that evaluation is made public at 3 months within the completion of that program but it will take some investments and our capabilities in order to implement that policy around the world. 

Perhaps most critically it will reduce significantly our ability to 

run the Feed the Future program which will reach 18 million people in 5 years, moving them out of poverty and hunger in precisely 

those places where poverty and hunger leads to food riots, famines, 

and threatens our sense of stability and our natural security. 

Mr. CONNOLLY. But you are the head of AID. What about this 

compelling argument we just can’t afford it? Those might be nice 

things to do but we just can’t afford it. What is your answer? 

Dr. SHAH. Well, sir, I believe it is far more costly for us to deal 

with the instability and the riots that result. It is even more costly 

frankly for us to give away food to starving people than it is to invest——

Mr. CONNOLLY. So what you are contending is that sometimes 

when we don’t make relatively modest investments up front we can 

pay huge cost down the line having forgone that opportunity. Is 

that what you’re arguing? 

Dr. SHAH. Yes, sir. I will give you one example. Before I got to 

USAID programs that should have been done as fixed cost contracts but it requires more up-front contracting capacity to write a 

fixed-cost contract were done as cost reimbursement contracts 

where you don’t have the ability to essentially control cost. 

You can lose in a single poorly managed contract hundreds of 

millions of dollars and you can frankly with that same investment 

in doing it more efficiently, more effectively with more business 

like approach up front, save those resources and generate better results for American taxpayers. 

52

Mr. CONNOLLY. By the way, that same CR cut humanitarian assistance 42 percent. Does humanitarian assistance affect what is 

going on in Libya or even the tragedy in Japan? 

Dr. SHAH. Yes. The humanitarian account is supporting all of the 

relief efforts. In Japan it’s a good example. It is also supporting our 

ability to get members of the Nuclear Regulatory Commission and 

other technical agencies out there to provide support and engage 

with our partners. Those are the types of things we put at risk. 

Mr. CONNOLLY. Thank you. My time is up, Madam Chairman. 

Chairman ROS-LEHTINEN. Thank you so much. 

Mr. Mack, the chairman on the Subcommittee on the Western 

Hemisphere is recognized. 

Mr. MACK. Thank you, Madam Chairman. Again, thank you for 

this hearing. 

First of all, I have some questions about Honduras. So we have 

heard that we are doing pretty good. I think the elections were 

pretty clear this last election that the American people don’t think 

we are doing pretty good. Then we hear that we are not broke. 

All you have to do is look at this graph and if we continue with 

the current policy that was pushed by the Democrats, we are talking about close to 800 percent debt, over 800 percent held by the 

public as a percentage of the GDP. I don’t know where some people 

are coming from. Too bad they left but we are broke and we are 

not doing pretty good and we have got to be serious about where 

we spend our dollars. 

I would also like to say this. I agree that we need to stand up 

for U.S. businesses throughout the world. The case of a U.S. business in Honduras has been going on for over 7 years and needs to 

be solved. The Honduran Embassy in the U.S. has been engaged 

in my office on this issue that they inherited with the Lobo administration. I would just suggest to those that it is time to get together to solve that problem. 

I am very concerned about the current state of affairs in Honduras. President Obama, his administration, and the State Department have been applying enormous pressure on Honduras. Why 

Honduras? Because Honduras decided to stand up for what they 

believe in, stand up for their constitution and they did the right 

thing by removing Zelaya. For some reason our Government has 

decided they shouldn’t do what is right for their country but they 

should do what we tell them to do. 

Specifically the State Department has been doing everything in 

its power to force Honduras to succumb to the U.S. demands revoking visas, cutting off critical defense support, suspending MCC 

funds. My question is this: Isn’t it true that this is nothing more 

than punishing a small country that we aren’t happy with? 

Mr. YOHANNES. Mr. Congressman, a couple of things. Number 

one, the MCC funds were not suspended by the State Department. 

In fact, Honduras did an outstanding job in getting the first compact completed. The only reason why they did not get the second 

compact is because they did not qualify. They did not pass the corruption indicators which——

Mr. MACK. Let me say this. The corruption indicators are perception based. Correct? 

53

Mr. YOHANNES. They are perception based but having said that 

I have had——

Mr. MACK. Weren’t they in the margin of error? 

Mr. YOHANNES. That is absolutely correct but let me say this. I 

have had conversations with President Lobo and his administration. They recognize——

Mr. MACK. I am sorry. Was not this corruption that is perception 

based, that you acknowledge is perception based, and it was in the 

margin of error, isn’t it true that this corruption occurred under 

Zelaya and the very person that the administration tried to bring 

back to power after its country said we are not going to continue 

with the corruption? 

Mr. YOHANNES. Again, corruption is corruption. It does not matter which government——

Mr. MACK. Isn’t it true that the new government in Honduras 

has been making large strides in reducing corruption? 

Mr. YOHANNES. In fact, they are and they understand what has 

happened in the last couple years and——

Mr. MACK. So the message—sorry but I have a little bit of time 

here. So the message we are sending is that if you do the right 

thing, if you stand up for your constitution, if you believe in the 

rule of law, if you do those right things we are going to punish you. 

But if a country like Nicaragua who invaded Costa Rica, we are 

going to continue to allow you to have funds. Doesn’t this send a 

message to people in Latin American countries and Latin America 

that there is not a consistent way that our foreign policy is being 

delivered in Latin America? 

Mr. YOHANNES. We are working with the Lobo administration. 

They have set aside a 2-year program to strengthen the anti-corruption areas primarily by strengthening the audits and primarily 

management of public resources so we are continuing to get engaged with them. 

Mr. MACK. If it was in the margin of error and all that Honduras 

had done to try to eliminate the corruption that was under the 

former President who this administration tried to bring back to 

power, wouldn’t it be the right thing to do to continue with the 

MCC compact? 

Mr. YOHANNES. We have a very limited source of funding. 

Chairman ROS-LEHTINEN. Thank you very much. 

Mr. YOHANNES. We have a lot of countries that are competing for 

it so——

Chairman ROS-LEHTINEN. Thank you. 

Mr. YOHANNES [continuing]. At the end of the day we have to 

make the best decision. 

Chairman ROS-LEHTINEN. Thank you. 

Mr. Cicilline of Rhode Island is recognized. 

Mr. CICILLINE. Thank you, Madam Chairman. 

Mr. Yohannes, thank you for being here today to talk about the 

important work of the Millennium Challenge Corporation. I really 

would like to acknowledge the excellent work of the MCC and the 

work that it is doing really to incentivize policy or reform in good 

government in a number of countries all around the world. 

I want to express here my deep concern about the cuts that are 

being proposed for funding for the MCC. The MCC has made straVerDate 0ct 09 2002 14:51 May 17, 2011 Jkt 000000 PO 00000 Frm 00057 Fmt 6633 Sfmt 6633 F:\WORK\FULL\031611\65301 HFA PsN: SHIRL
54

tegic investments in countries like El Salvador and Honduras by 

improving infrastructure, strengthening property rights, enhancing 

access to markets and assisting in business development. These are 

investments that really are contributing to the long-term sustainability in these countries. 

I would also like to acknowledge the excellent work that has 

been done through the MCC in Cape Verde. You might know my 

district is home to a very vibrant and wonderful Cape Verdean 

community and I am very proud that Cape Verde may well be the 

first nation to receive a second compact with the MCC. They have 

made incredible progress with the help of the MCC and I just want 

to acknowledge that. 

My question really is what can we do, what steps are being 

taken, what can we do to ensure that countries like El Salvador 

and Honduras who have made substantial progress in reforming 

policies and strengthening their markets, improving their governments, what can we do to help them continue on that path so that 

they, too, might be eligible for a second compact and what procedure is in place to continue that kind of support that is both in 

their interest, obviously in their national interest, but also in the 

interest of our country? 

Mr. YOHANNES. Thank you, sir. As you know, it is extremely 

competitive to get to our program. We select countries that are well 

governed, those that have accepted market principles, and those 

countries that have made a tremendous commitment to investing 

in their people. Those are the major criteria. 

We are very selective. We only work with about 22 different 

countries out of about a 100. We work with the best of the best. 

This is primarily with the goal that we want to make sure that this 

country is on a path to replace aid dollars with dollars from the investment community. 

Many of the investments we make in those countries are not only 

used to improve the infrastructures and so forth but the key is the 

policy reform which is extremely critical to create the conditions 

and the environment for private sectors to flourish. 

Having said that, El Salvador has done an outstanding job. In 

fact, I was there last year. I met with many of the beneficiaries 

that have benefitted from our program, both men and women. Also 

have seen the road that has been built which will connect the north 

and the south that has been the dream of the El Salvadoran people 

for the last 50 years. 

I have been to Honduras. I have seen the benefits that have been 

provided to both men and women in that country. In addition, in 

Honduras we built 510 kilometers of road so that the farmers could 

have access to markets. Having said that, they also made a tremendous investment. They have set aside an additional $30 million 

to maintain the roads. 

They also passed a major legislation primarily in the financial 

sector to make sure that people who do not own land also have access to credit. There has been a lot of accomplishments both in El 

Salvador and in Honduras. Again, Honduras was not eligible this 

time but we are engaged with them and would hope that if they 

continue to implement what President Lobo and his administration 

55

have planned, there is no reason why they should not be considered 

for a second compact. 

Mr. CICILLINE. I yield back, Madam Chairman. 

Chairman ROS-LEHTINEN. Thank you very much. 

Ms. Buerkle, the vice chair of the Subcommittee on Terrorism, 

Nonproliferation, and Trade, is recognized. 

Ms. BUERKLE. Thank you, Madam Chairman. 

I would like to just begin my comments by Representative Mack 

referred to a chart, and we have it over here on our right, regarding the tidal wave of debt that we will continue to incur if we continue on the path that we are on. 

The first thing I do want to say is in defense of my very good 

friend from New Jersey, Representative Smith, he is not only a 

champion of the unborn, he is a champion for human rights for all 

people, born and unborn, so I want to make sure that is in the 

record loud and clear. Thank you. 

I come from New York State and I represent upstate New York. 

New York along with 43 other states is facing terrible deficits and 

issues. There is no question they will be forced to make a decision 

about whether or not they are going to be able to pay their debt 

or pay their employees. Many states in this country are just in dire 

straits when it comes to spending and debt and whether or not 

they can keep their state alive. We are all aware of that. We see 

articles regarding this all the time. 

My question to you is, and this piggybacks on Mr. Kelly’s question, Americans have suffered 20 months of 9 percent unemployment and greater. We are facing fiscal crisis. As was pointed out 

we are borrowing 40 cents on every dollar. We need justification. 

How do we go to the American people? American people many of 

them are losing their homes. They are unemployed. How do we justify spending this money in other countries and not having it available for the American people? 

Mr. YOHANNES. Thank you, Madam Congresswoman. This is 

about our future. This is about our security. This is about our prosperity. This is building the next set of emerging economies. This is 

about trade investment opportunities for American businesses. 

This is about job creation here in America. We are working to put 

these countries on the path to become self-sufficient so they will 

never have to depend on foreign aid again. 

Having said that, if we leave these countries alone then, in effect, 

we are giving these countries to our competitors. Keep in mind 

after the war we had the Marshall Plan. We helped a lot of countries. Today 75 percent of our trade is with those countries that we 

supported. I really believe that the countries we work with are 

poised to do the same in the next 10 years. 

Ms. BUERKLE. Thank you. Let me ask, and this question is for 

both of you. Is there an end game with some of the aid that is 

going to some of these countries? Will this aid end or does it just 

go on indefinitely? 

Dr. SHAH. Let me address that in the context of our food security 

programs or in our health programs. Our goal is to basically put 

ourselves out of business by supporting a vibrant civil society, a 

real vibrant private sector, or effective public investments that are 

made locally that can carry out these goals. 

56

In malaria, for example, in sub-Saharan Africa, just 5 or 6 years 

ago we were all talking about how 1 million children under the age 

of 5 died. Hospitals were overwhelmed. 

Through a very smart program put in place by the Bush administration and picked up and supported by our administration, we 

have essentially gotten insecticide treated bed nets to kids through 

schools, community centers, hospitals. It is keeping them out of 

hospitals so the hospitals are now able to see other types of patients. 

As a result we have seen about a third of all those kids who die 

under the age of five in sub-Saharan Africa are now living. What 

that does is that allows families to invest in their education. It allows people to invest in human capital, and it is the pathway for 

growth that allows exactly what Daniel said, countries to stand on 

their own two feet. 

The thing I worry about is in the way that some of the cost reductions are applied, in this case we would have to take 5 million 

of those kids and stop providing insecticide treated nets to those 

kids. This is a $4 intervention. Unwinding some of the more effective programs that lay the basis of sustainable growth and real development will over time result in the need for us to have a different approach, mostly military, to areas that are insecure and unsafe. 

Ms. BUERKLE. Thank you. I have 15 seconds left. I want to just 

end by saying that the American people are a generous people and 

they want to help but we here in this Congress have an ultimate 

responsibility of holding all agencies accountable for how we spend 

the taxpayer’s money and we have to be prudent and we have to 

put their needs first. Thank you very much. 

Dr. SHAH. Thank you. 

Chairman ROS-LEHTINEN. Thank you. 

Mr. Manzullo, the Subcommittee on Asia and the Pacific chairman is recognized. 

Mr. MANZULLO. Thank you very much. Mr. Shah, in your testimony at the end of page two and the beginning of page three, you 

mentioned a new venture capital investment fund called the Development Innovation Ventures Fund, DIV. On the USAID Web page 

describing the fund it lists the E-Bike as one of the fund’s first 

grantees. The E-Bike, according to the Web site, is a ‘‘practical, 

scalable, pollution-free form of mobile transportation.’’

The Web site further says,

‘‘USAID, borrowing from the private venture capital model, 

will seek through a competitive process to invest resources in 

promising, high-risk, high-return projects that breakthrough 

innovations often require that are often difficult to undertake 

using traditional agency structures.’’

Furthermore, according to Grants.gov, the Federal Government’s 

official Web site for announcing grants, it states that the purpose 

of the fund is to, ‘‘Institutionalize further in USAID the serendipitous process by which great ideas are conceptualized, developed, 

and refined to be real world operational challenges.’’

This is a venture fund, right, that the taxpayer could end up losing money on? 

57

Dr. SHAH. Well, sir, it is a grant program that is operating with 

principles that are modeled after a venture fund so that we can get 

a higher return on our investment. 

Mr. MANZULLO. So it is a giveaway program? It is a grant? 

Dr. SHAH. Yes. We have——

Mr. MANZULLO. And there is no basis for repayment? 

Dr. SHAH. No, we do not——

Mr. MANZULLO. Alright. Then tell me about this E-Bike. Who 

makes this E-Bike? 

Dr. SHAH. Well, all of the grantees of this program are small entrepreneurs——

Mr. MANZULLO. I asked, who makes the E-Bike? 

Dr. SHAH. I am not sure of the specific——

Mr. MANZULLO. I think you should know that. This is the first 

grantee. 

Dr. SHAH. There was a wave of grantees. We got thousands of 

applications——

Mr. MANZULLO. I understand that. So somebody is going to take 

this solar-powered bicycle paid for by U.S. taxpayers’ funds and 

give it somewhere in the world and that is going to help save the 

world? 

Dr. SHAH. No, that is not it, sir. We are investing in developing 

new technologies that can be sold——

Mr. MANZULLO. Oh, come on, please. 

Dr. SHAH [continuing]. In developing countries. One example is 

the——

Mr. MANZULLO. Where is this E-Bike going with U.S. taxpayers’ 

dollars? Where is it going? 

Dr. SHAH. Well, if it is developed and if it is a viable business 

model, then a small U.S. entrepreneur could sell that product in 

developing countries around the world just like——

Mr. MANZULLO. And the U.S. taxpayer is supposed to pay for 

that? 

Dr. SHAH. We are investing in the development of some of those 

technologies. 

Mr. MANZULLO. The U.S. taxpayer is paying to buy E-Bicycles, 

solar-powered bicycles, to give away to other countries. 

Dr. SHAH. No, sir. We don’t buy and give away any bicycles. 

Mr. MANZULLO. Where is the money going? 

Dr. SHAH. The investment goes into technology development. 

Mr. MANZULLO. Oh, come on. This bicycle was already developed 

by the time your program started. 

Dr. SHAH. No, they have to be refined. They have to be built into 

a business model and sold——

Mr. MANZULLO. Then why are the U.S. taxpayers buying a solarpowered bicycle? How is that going to help out the world? 

Dr. SHAH. Sir, U.S. taxpayers are not buying solar-powered bicycles. 

Mr. MANZULLO. Wait a second. Just a second, Mr. Shah. You said 

that it is a grant. Is that correct? 

Dr. SHAH. A grant to the entrepreneur to develop a business 

model 

Mr. MANZULLO. And the grant money comes from the U.S. taxpayer? 

58

Dr. SHAH. Correct. 

Mr. MANZULLO. So the U.S. taxpayer is buying an E-Bicycle. Isn’t 

that correct? 

Dr. SHAH. The U.S. taxpayers investing in business——

Mr. MANZULLO. Will you answer the question, please? Don’t use 

the word ‘‘investment.’’ Use the word ‘‘spend’’ or ‘‘paid.’’

Mr. BERMAN. Madam Chairman, I think the gentleman should be 

able to answer the questions in the words he choses. 

Chairman ROS-LEHTINEN. Thank you, Mr. Berman. 

Mr. MANZULLO. I understand. Are U.S. taxpayers’ dollars being 

used to buy this E-Bicycle? Yes or no? 

Dr. SHAH. No, we are not buying and giving away E-Bicycles. 

Mr. MANZULLO. So where is the money going? 

Dr. SHAH. To U.S. entrepreneurs——

Mr. MANZULLO. So they can develop——

Dr. SHAH. I can give you a number of examples. Another partner 

we are working——

Mr. MANZULLO. No, I am just asking about the bicycle. Okay? 

U.S. taxpayers’ dollars are being given to somebody to develop this 

bicycle. 

Dr. SHAH. To develop a business to sell bicycles wherever they 

can. 

Mr. MANZULLO. I understand. Does the taxpayer get reimbursed 

on the sales of these bicycles? 

Dr. SHAH. No, these are small up-front grants that are providing 

seed capital to develop businesses that can be scaled through——

Mr. MANZULLO. I understand, but this is the problem. This is 

why the U.S. taxpayers are really upset. I don’t know any Americans that can afford to buy a solar-powered bicycle themselves. 

Now the American taxpayers are buying solar-powered bicycles and 

essentially giving them away to countries around the world. This 

is a waste of taxpayers’ dollars. The sooner you guys wake up and 

understand that, the better off you are going to be and take limited 

resources and use them for better purposes. 

Dr. SHAH. Sir, the development innovation program is focusing 

on those interventions that can reduce the cost of achieving——

Chairman ROS-LEHTINEN. Thank you, Dr. Shah. 

Dr. SHAH [continuing]. And we are seeing that work in a number 

of——

Chairman ROS-LEHTINEN. Judge Poe, the vice chair of the Subcommittee on Oversight and Investigations is recognized. 

Mr. POE. Madam Chair, I am waiting for a poster. I would yield 

to Mr. Fortenberry if that is agreeable to the chair. 

Chairman ROS-LEHTINEN. Absolutely. 

Mr. Fortenberry first and then we will go to Judge Poe. 

Mr. FORTENBERRY. Thank you, Madam Chair, for holding the 

hearing. 

Thank you, gentlemen, for coming today. Let me touch upon a 

subject that was brought up earlier. It is sensitive but, nonetheless, 

I think it needs to be unpacked further. 

You are correct in stating that the United States does not directly subsidize the procurement of abortion in our overseas program. However, the United States does subsidize and underwrite 

organizations that are directly involved in the provision of abortion. 

59

That is a new position, a new policy of this administration which 

is frankly troubling to me. 

I think our development goals, our foreign policy initiatives, 

should be built upon the consensus of values in this country. My 

goodness, we have enough to do with meeting basic humanitarian 

needs that we shouldn’t be exporting our own philosophical and 

cultural divides and imposing them on other people. I would submit 

that for your consideration. 

I think what you do is important. I think that it is intimately related to national security, economic well being, as well as what is 

the call really in the hearts of most Americans to try to do something to help those who are in vulnerable situations. 

As we do that we develop relationships. We develop trust and 

that helps with communication. That breaks down barriers and 

that prevents the potential for conflict and it opens up the possibility for economic well being between different peoples. With that 

said, what works? What works best? What doesn’t work? 

Dr. SHAH. Thank you. We have restructured a number of our 

major strategies to focus on exactly that question. We want to invest in those things that work and move resources away from those 

things that don’t. We have just unveiled a new education policy, for 

example, that is targeting 100 million children and ensuring that 

they get improved learning outcomes. 

For decades a lot of the investment and spending that has gone 

into development assistance and education has been somewhat effective but has not measured the educational attainment of the 

kids. By measuring that attainment and focusing and investing in 

those strategies whether it is teacher training or getting kids access to better material and curricula that work, we can demonstrate and document that we are getting better outcomes. 

That is one example. Across our health portfolio we are reinvesting our resources in things like vaccines and immunization, 

malaria prevention, HIV prevention, new TB diagnostic technologies that can bring down the cost of treatment and diagnosis 

because those things are, frankly, an order of magnitude more efficient in achieving the outcomes than the traditional way of doing 

business. 

A lot of the innovations we are trying to pursue across all of 

these areas are looking at what is more expensive and can we find 

new ways to provide services and help achieve the same outcomes 

at much lower cost. 

Just last week we launched a partnership with the Gates Foundation, Norway, the World Bank, and Canada where we leverage 

our dollars. For every dollar we put in we raised four from them. 

It is called Saving Lives at Birth and it focuses on developing new 

innovations that allow community health workers who are not 

paid. 

They are trained but not paid to in people’s homes and in communities really help save lives in that critical 48 hours of birth and 

immediate life. Those are the kinds of innovations that we think 

can reduce the cost and get us better outcomes. 

Mr. FORTENBERRY. Which become all the more important in light 

of the fundamental purpose of this hearing to talk about constraints in the budget which are very, very real and we are all havVerDate 0ct 09 2002 14:51 May 17, 2011 Jkt 000000 PO 00000 Frm 00063 Fmt 6633 Sfmt 6633 F:\WORK\FULL\031611\65301 HFA PsN: SHIRL
60

ing to make very difficult decisions about priorities and how we are 

going to tighten the belt. It is unsustainable the pathway that we 

are on so we all have to embrace this reality and do what we can 

with limited resources. What doesn’t work? 

Dr. SHAH. Well, I would say there are some things that don’t 

work. We have done, I think, far too much teacher training without 

measuring outcomes so we are reducing our investment in that 

area and focusing more on learning attainment. When we do things 

like try to provide health services through only hospitals, that is 

a very costly way to provide health services in the lower-income 

parts of the world and we should be looking for community-based 

solutions that are cheaper so we are shifting resources from hospitals to communities. 

Mr. FORTENBERRY. I am running out of time so I need to cut you 

off. So in that regard as well, do we make an attempt? Perhaps it 

has to be subtle at points and sensitive that this is a gift of the 

United States Government? 

Dr. SHAH. We try to be aggressive in pointing out that these investments are from the American people. That is our tagline. The 

logo goes on everything we do and we demand real results. I think 

MCC——

Mr. FORTENBERRY. Let us turn to Millennium Challenge right 

quick if you could answer the question as to what has worked and 

what hasn’t worked because it is a new framework—I have 10 seconds. It is a new framework for accountability and it is very fascinating. I think we are starting to get evidence. 

Mr. YOHANNES. What makes MCC distinctive, so different from 

any other development agency that our approach to development is 

like a business? We do a very thorough——

Chairman ROS-LEHTINEN. Thank you. Thank you very much. 

Mr. Royce, the chairman on Subcommittee on Terrorism, Nonproliferation, and Trade is recognized. 

Mr. ROYCE. Thank you, Mr. Yohannes. Let me raise an issue on 

Millennium Challenge that I have been concerned about for some 

time and that is the $240 million contract with Senegal. I will give 

you just one of many of the issues that I have raised repeatedly 

with your agency and that is the fact that you have a 160-foot tall 

North Korean-built statue being shipped in by the 83-year-old 

President. 

The cost, I would guess, is around $50 million and he gets 35 

percent of that as a kickback. We are talking about the President 

of the country gets 35 percent of that as a kickback to a personal 

foundation. This is a guy who created a special ministry for his son 

in order to pay his son. We have a European diplomat who was 

given a gift of about $200,000 walking out of the country before a 

loan came in the other direction. 

I just wonder. It is not just that our aid dollars freed up Senegalese funds to be used for a statue taller than the Statue of Liberty, taller than the Redeemer statue in Brazil. This thing is a colossus, North Korean art, sitting there. It is the fact that the North 

Korean regime got the money. Our U.S. taxpayers put money into 

Senegal and that frees up money for this kind of an operation. 

Frankly, you strip away everything else and we are essentially 

rewarding a guy who is helping fund the regime in North Korea, 

61

besides just the corruption that is going on there. I have written 

repeatedly, raised this issue with the Secretary of State, tried to 

get everybody to reevaluate the $540 million over in Senegal. I 

know we say we are bringing up these issues with him but he has 

extended his term to 7 years in office. 

Come on. Could you give me your take on what we are doing 

right now with President Wade in Senegal?, which is certainly 

moving in the wrong direction. I have been to Senegal. I was there 

back when it was moving the right direction. Right now we are 

doubling down on somebody who is back peddling as fast as humanly possible in terms of the rule of law. 

Mr. YOHANNES. Thank you very much, Mr. Congressman. You 

know, in terms of the statue, I mean, those things happen. We are 

not happy about it but some of the poorest countries they seem to 

be doing something like that which is stupid but, nevertheless, that 

goes on. 

In terms of looking at the country as a whole, when you consider 

Senegal with other countries, primarily in the area of corruption, 

in the area of good governance, in the area of freedom of the press 

and economic policies and investment in people, they do score extremely well. 

Having said that, you know, a number of issues have come to us 

in the last couple months. In fact, there was an incident that happened a couple of months ago where President Wade exempted a 

couple of the ministries from procurement processes and we responded back and we worked in conjunction with the State Department, the World Bank, and others. 

We sent a message that if you decide to remove those exemptions 

that will suspend or terminate our compact and they reversed after 

they heard our complaint. It appears to be sometimes a problem 

but we are responding to it. We are making some changes. They 

are responding to us. After all, you know, they have about $500 

million. They don’t want to do that. 

Mr. ROYCE. I understand that but think on this, all right? As I 

said, once they were moving in the right direction. They had think 

tanks that were promulgating the right ideals. You brought out 

these facts. The facts I look at is how Transparency International 

sees it. They say that Senegal has fallen from No. 71 in ’07 to 105 

out of 178 countries, 105 from the list in their corruption ranking. 

In other words, they are not moving in the right direction. They 

are slipping about as fast as a country can slip. I would argue that 

at some point in time you have to send a message and you have 

got to send a message to other countries that you are serious. 

If Senegal isn’t it, and if cutting this deal with the North Koreans to bring in a statue taller than the Statue of Liberty which 35 

percent of the money gets kicked back to a personal foundation of 

President Wade, if he has a relationship with what he is doing with 

his son, if that isn’t the red light, I don’t know what is. I would 

really suggest to you what I have suggested in numerous blogs and 

letters——

Chairman ROS-LEHTINEN. Thank you. 

Mr. ROYCE [continuing]. And in meetings with the Secretary of 

State please reverse this action. Thank you. 

Chairman ROS-LEHTINEN. Thank you. 

62

Judge Poe, the vice chair of the Subcommittee on Oversight and 

Investigations is recognized. 

Mr. POE. Thank you, Madam Chair. Thank you both for being 

here. I want to make it clear that in your operation you are doing 

what Congress has commissioned you to do. I have a chart here 

that is furnished to us by the Department of Defense and the State 

Department. It is off their Web site. A very simple chart. All of the 

red represents countries that receive aid from the United States 

whether it be foreign aid and maybe military aid. 

The green represents those countries in the world that receive 

military aid from the United States. And those few countries that 

are in blue they receive no aid from the United States. As you can 

see, it is most of the countries in the world. There are 192 countries in the world give or take those last two who sometimes are 

countries and sometimes they are not countries but we give aid to 

most of those countries. 

I understand the reason. It is to promote humanitarian goals in 

the interest of the United States and some of those noble things. 

But it concerns me that we give aid to our ‘‘friends’’ Chavez in Venezuela; that we give aid to Cuba, that we give aid to Russia and, 

of all things, we give aid to China, the country that controls most 

of our debt. And the other countries throughout the world receive 

some type of aid. 

Many of these, I would guess most of these countries, they don’t 

even like us. They vote against our interest in the United Nations. 

As my friend Louie Gohmert says we don’t need to pay people to 

hate us. They will do it on their own. Maybe there is some truth 

to that. It seems to me that maybe we should rethink the way that 

when we are talking about the budget and foreign affairs and the 

State Department that we allocate money. 

Maybe each of these countries should stand or fall on their own. 

As you know, we vote for foreign aid appropriations all the countries together in one piece of legislation whether it is Israel or 

whether it is some other country. I am a big supporter of Israel. 

I think that most Members of Congress are. I can’t speak for them 

but I think most Members of Congress would want to appropriate 

aid to Israel. 

If we want to give aid to Israel, we have got to give it to all of 

these other countries as well. So maybe the time has some to let 

each of these countries stand or fall yearly on their own with an 

up or down vote. Each country in the State Department presents 

to us the arguments for, and maybe against, continuing aid for 

each country one at a time. Maybe that is our responsibility to rein 

in spending. 

Foreign aid, you mention that. If I mention that in my congressional district in Southeast Texas, people really just get irritated 

about that. I understand the percentage of it from the budget but 

people are concerned about foreign aid. 

Dr. Shah mentioned that we are helping educate people throughout the world. Well, we are at a time where many states are cutting back education so why are we giving money to countries to 

educate their kids when we are losing money, don’t have as much 

money to educate our own? It is questions like that that I constantly get. 

63

Dr. Shah, I don’t want to commit you but what do you think 

about that philosophy? Should we just let each country stand or 

fall on its own or should we continue the same process? 

Dr. SHAH. Well, I would suggest and believe strongly that our assistance is part of our national security strategy. When you look at 

it in aggregate it is a very, very small investment that yields relatively higher returns. In education in Pakistan, for example, when 

we are able to get hundreds of thousands of kids in FATA and 

Waziristan and other dangerous parts of the countries in schools 

where they have an alternative to madrassas, that is an outcome 

that is good for our national security. 

Mr. POE. But isn’t it true that in Pakistan we have now issues 

with the Pakistan Government about giving safe haven to the 

Taliban and maybe some of the money that we are giving them is 

turning up in the hands of the bad guys? Doesn’t that outweigh 

educating the kids in Pakistan? 

Dr. SHAH. We have robust vetting and monitoring systems in our 

Pakistan program and in other programs around the world so that 

we can track where our resources have gone. I guess that is the 

second point which is we are not just writing checks to governments. A lot of this work, depending on where and under which circumstances, supports civil society, often supports democratic governance initiatives, supports the types——

Mr. POE. Excuse me, Dr. Shah. I want to reclaim my time with 

16 seconds. Do you have an opinion about whether we should put 

it all in one big massive bill or split them up country for country 

regardless of what kind of aid it is? 

Dr. SHAH. I think we should be focused on reform and results 

and think of this as part of our national security strategy and 

based on that, make relative tradeoffs across the entire portfolio. 

Chairman ROS-LEHTINEN. Thank you. 

Mr. POE. You cannot answer my question, or won’t. Thank you, 

Madam Speaker. 

Chairman ROS-LEHTINEN. Thank you. Thank you so much and I 

want to thank first our members for excellent, thought-provoking 

questions. Thank you to our two wonderful panelists. We thank you 

for the time and we will move ahead and see where we can meet 

each other between the fiscal realities that confront us and the 

needs of our world. Thank you so much and the meeting is adjourned. 

[Whereupon, at 12:10 p.m., the Committee was adjourned.] 

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