U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON : 

For sale by the Superintendent of Documents, U.S. Government Printing Office

Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800

Fax: (202) 512–2104 Mail: Stop IDCC, Washington, DC 20402–0001

73–455PDF 2012

THE FISCAL YEAR 2013 BUDGET: A REVIEW

OF U.S. FOREIGN ASSISTANCE AMIDST

ECONOMIC UNCERTAINTY

HEARING

BEFORE THE

COMMITTEE ON FOREIGN AFFAIRS 

HOUSE OF REPRESENTATIVES

ONE HUNDRED TWELFTH CONGRESS

SECOND SESSION

MARCH 20, 2012

Serial No. 112–157

Printed for the use of the Committee on Foreign Affairs

(

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

http://www.gpo.gov/fdsys/

(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 

ROBERT TURNER, New York 

HOWARD L. BERMAN, California 

GARY L. ACKERMAN, New York 

ENI F.H. FALEOMAVAEGA, American 

Samoa 

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

WITNESS 

The Honorable Rajiv Shah, Administrator, U.S. Agency for International Development .............................................................................................................. 10

LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING 

The Honorable Rajiv Shah: Prepared statement .................................................. 13

APPENDIX 

Hearing notice .......................................................................................................... 42

Hearing minutes ...................................................................................................... 43

Written responses from the Honorable Rajiv Shah to questions submitted 

for the record by: ..................................................................................................

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

the State of Florida, and chairman, Committee on Foreign Affairs: Prepared statement ................................................................................................ 45

The Honorable Howard L. Berman, a Representative in Congress from 

the State of California ...................................................................................... 119

The Honorable Christopher H. Smith, a Representative in Congress from 

the State of New Jersey ................................................................................... 126

The Honorable Dana Rohrabacher, a Representative in Congress from the 

State of California ............................................................................................ 129

The Honorable Donald A. Manzullo, a Representative in Congress from 

the State of Illinois ........................................................................................... 131

The Honorable Edward R. Royce, a Representative in Congress from the 

State of California ............................................................................................ 136

The Honorable Connie Mack, a Representative in Congress from the State 

of Florida ........................................................................................................... 141

The Honorable Ted Poe, a Representative in Congress from the State of 

Texas: Letter from Members of Congress to His Excellency the Minister 

of Trade, dated February 21, 2012 ..................................................................... 144

(1)

THE FISCAL YEAR 2013 BUDGET: A REVIEW 

OF U.S. FOREIGN ASSISTANCE AMIDST ECONOMIC UNCERTAINTY 

TUESDAY, MARCH 20, 2012

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 committee will come to order. I 

will recognize myself and the ranking member, Mr. Berman, for 7 

minutes each for our opening statements. We will then hear from 

our witness before we move to questions and answers under the 5-

minute rule. We are not giving members an opportunity to give a 

1-minute? Sure, we are. 

Without objection, the witnesses’ prepared statements will be 

made a part of the record. And members may have 5 days to insert 

statements and questions for the record. 

The Chair now recognizes herself for 7 minutes. 

Dr. Shah, welcome. We appreciate your being with us today. Our 

hearing this morning is to discuss the foreign assistance budget for 

Fiscal Year 2013. When we met last year, we discussed the foreign 

aid budget against the backdrop of our Nation’s challenging fiscal 

situation, including our vast annual deficit. Regrettably, as all of 

us know, little has changed in that front. One year later, newspaper headlines read, ‘‘Nearly One in Six Americans in Poverty,’’ 

‘‘Line Grows Long for Free Meals at U.S. Schools,’’ ‘‘City Cost-Cutting Leaves Residents in Dark.’’

So our Nation continues to face a substantial deficit, with 35 

cents of every dollar being borrowed. The Congressional Budget Office predicted that our budget deficit will total a staggering $1.08 

trillion this year. CBO has also projected that the jobless rate will 

rise to 8.9 by the end of 2012 and to 9.2 the following year. Therefore, it is critical that we continue to thoroughly scrutinize our 

Government spending, and foreign assistance is no exception. 

Every dollar must be justified. 

It is a common argument that the foreign aid budget represents 

1 percent of the overall Federal budget. 

However, within that 1 percent are billions of U.S. taxpayer dollars that the American people have earned through hard work and 

have generously provided to nations around the world. It is our responsibility to ensure that these hard-earned dollars are held to 

2

the highest standards of transparency, are reaching the intended 

recipients, and are advancing our national and security interests 

and foreign policy priorities. 

Our foreign aid is not an entitlement program. Countries like 

Botswana, Chile, Thailand and South Korea have all used U.S. foreign assistance to build their economies and eventually graduate 

from U.S. foreign assistance. This should be the goal for all countries that receive U.S. assistance. 

Dr. Shah, in the previous remarks over the last year, you stated 

that by 2015, USAID could help several countries move away from 

U.S. assistance and, thus, close USAID missions. However, the 

budget request that you have submitted does not include any 

scheduled USAID mission closures in Fiscal Year 2013. So, Dr. 

Shah, what changes or reforms are you proposing or implementing 

to ensure that U.S. foreign aid does not create dependency but, 

rather, leads to empowerment and self-sufficiency? What is 

USAID’s strategy for moving countries beyond foreign assistance so 

that they can stand on their own? 

Modest progress was made in Fiscal Year 2012 to eliminate unnecessary programs and missions. However, in reviewing the Fiscal 

Year 2013 budget, it does not appear to reflect a commitment in 

increased cost savings and elimination of U.S. assistance to countries that no longer need our support. 

Further, the administration’s congressional budget justification 

states that the budget proposal only requests what is absolutely 

necessary. Yet, the administration is seeking nearly $2.6 billion 

under this request for international climate change programs, 

while humanitarian assistance accounts are scaled back. I remain 

concerned that funding of these programs is being provided at the 

expense of good governance, democracy, and rule of law programs. 

With limited resources, we must ask if this best meets our U.S. 

national security interests. For example, U.S. foreign assistance to 

the countries of the Western Hemisphere should reflect our main 

concerns: Security and democracy in that area. Under this request, 

funding for environmental programs to Guatemala increases by 

$2.5 million, funding that could be put to better use elsewhere for 

prevention programs that counter narcotrafficking and promote security funding. 

At a time when violent drug cartels are expanding their influence and fundamental freedoms are under assault by the ALBA tyrants, citizen security and democracy assistance must be USAID’s 

priority. This priority must be appropriately reflected in the President’s foreign assistance budget. The sharp cut in democracy funds 

for Cuba and Venezuela sends the wrong message to the internal 

opposition in these countries. Cuban dissidents will question the 

United States’ commitment to a free Cuba as funding is decreased 

by $5 million. 

And as the ALBA regimes move further down the path of totalitarianism, this proposed budget rewards the dictatorship of Bolivia, 

Ecuador, and Nicaragua with an increase of development assistance. In Nicaragua, the proposed budget reveals a $3.1-million 

boost in funding for Fiscal Year 2013. Yet, the unconstitutional reelection of Daniel Ortega and his successful power grab demVerDate 0ct 09 2002 11:34 Aug 15, 2012 Jkt 000000 PO 00000 Frm 00006 Fmt 6633 Sfmt 6633 F:\WORK\FULL\032012\73455 HFA PsN: SHIRL
3

onstrates that USAID funds have not been spent wisely to promote 

democracy or transparent elections. 

Even more worrisome, our current USAID programs in Nicaragua support a handful of Sandinista mayors at the municipal 

level. In Ecuador, Correa continues to intimidate the private media 

and independent journalists, but the President’s budget request increases funding for development assistance to Ecuador by $2 million. I also remain opposed to the increase in money for family 

planning and reproductive health—especially when all other global 

health accounts decline. 

The administration’s reversal of the Mexico City policy allows 

U.S. Government funding to be allocated to foreign nongovernmental organizations that support or promote abortion as a method 

of family planning. An increase in family planning and reproductive health would only provide further opportunity for expanded 

funding for these organizations. 

So I look forward to discussing with you the reforms you have 

introduced to make the delivery of our foreign assistance more effective and what steps USAID is currently taking to break the welfare state relationship between U.S. foreign assistance and dependent countries. 

At this point I would like to turn to my friend and colleague Congressman Berman, the ranking member of our committee, for the 

opening statement that he would like to make. Mr. Berman is recognized. 

Mr. BERMAN. Well, thank you very much, Madam Chairman. 

And I join you in welcoming Dr. Shah before the committee this 

morning. I appreciate this opportunity to consider the President’s 

Fiscal Year 2013 budget request for humanitarian and development assistance and to review efforts to reform the way USAID 

does business. 

As you yourself have noted, Madam Chairman, the total, cumu- lative Fiscal Year 2013 International Affairs request of $56.37 billion is $5.1 billion below last year’s request, and represents less of 

an increase over 2012 spending levels than the current, annualized 

inflation rate. 

Moreover, I would add, international affairs spending represents 

only about 1 percent of our overall Federal budget. And development and humanitarian spending is less than half of that amount. 

Despite these facts, there continues to be a widespread misunderstanding about the size of our foreign aid program. Polls 

show that most people think it is upwards of 20 percent of the 

budget and that cutting foreign aid will somehow balance the budget. What is interesting is that the amount people think we should 

be spending on foreign aid is about ten times more than we actually spending. 

It bears repeating that we give humanitarian and development 

aid not only because it is the right thing to do but because it is 

the smart thing to do. Addressing hunger, disease, and human misery abroad is a cost-effective way of making Americans safer here 

at home. And it is infinitely cheaper to address these with economic and technical assistance now than to wait until fragile states 

collapse or conflicts erupt in wide-scale violence and we have to resort to costly emergency aid or even military action. 

4

Reducing global poverty is not a partisan issue. Democrats and 

Republicans alike want to usher in an AIDS-free generation, expand access to clean water and sanitation, respond to natural disasters, help countries hold free and fair elections, and build new 

markets for U.S. exports. In fact, some of the biggest contributions 

to global health and development were spearheaded by Republican 

Presidents, such as PEPFAR and the Millennium Challenge Corporation, which were both created by President George W. Bush. 

Still, in this difficult economic climate, we have a special obligation to ensure that the funds are spent as efficiently and as effectively as possible and that they best serve our national interests. 

To do so, we must revise and update the framework of foreign aid 

laws and procedures that were designed for the last century and 

fail to reflect the many lessons we have learned over the past 50 

years. 

For instance, we know that our programs have a much greater 

impact in countries that devote significant resources to improving 

the lives of their own people. Our dollars go much further if we and 

other donors work along with host countries in a coordinated way, 

instead of setting up parallel institutions that are duplicative or 

leave gaps. But our system of stovepiped accounts and earmarked 

funds makes it very difficult to respond to local needs and priorities. 

Another thing we have learned is that we need to be strategic 

about our investments. That means not only having a clear plan of 

what we are trying to achieve and specific indicators to measure 

success, but also being more selective and focused with our funding. 

Despite the need for improvements, I think we have some good 

stories to tell. Since its founding 50 years ago, USAID has played 

a critical role in lowering child deaths by 12 million a year. It has 

helped gain global coverage of basic childhood vaccines from 20 percent to 80 percent in most countries. The money we have invested 

in agricultural research led to the Green Revolution, which saved 

hundreds of millions from hunger and famine. And just recently, 

the World Bank announced that the first Millennium Development 

Goal, having the proportion of people living on less than $1 a day, 

has been reached ahead of schedule. 

Unfortunately, this message is not the one that dominates our 

headlines. After many years of providing aid, the public is skeptical 

that aid really helps. They are concerned that the problems are too 

big for us to be able to make a difference. And they don’t have a 

clear idea of how the aid is actually used. 

In order to ensure that our money is being effectively spent and 

achieving the desired results, we need to collect solid empirical 

data about what works, and we need to make it available to the 

public. Without evidence that our programs are having a significant positive impact, we will lose the support and the confidence 

of the American people. 

Some seem to think we can keep cutting back on staff and salaries without hurting programs. Naturally no one wants to waste 

money on unnecessary overhead costs. But it is time to realize that 

development is a discipline, that our dedicated aid professionals, 

Foreign and Civil Service alike, have important skills and experiVerDate 0ct 09 2002 11:34 Aug 15, 2012 Jkt 000000 PO 00000 Frm 00008 Fmt 6633 Sfmt 6633 F:\WORK\FULL\032012\73455 HFA PsN: SHIRL
5

ence that we want to retain and build upon. If we don’t invest in 

our human resources, we will pay dearly in the long run. 

One thing that can be done to put our aid programs on a sounder 

footing is to replace the Foreign Assistance Act of 1961 with legislation better geared to the needs of the twenty-first century. Last 

September, I released a draft of the Global Partnerships Act, which 

lays out a vision for how to make foreign assistance serve our national interests more efficiently and more effectively. 

Dr. Shah, I hope by now you have had a chance to review this 

draft. I would ask your staff to begin sitting down with us to discuss how we can improve it. 

Madam Chairman, I make the same offer to you and your staff 

so that we can have the benefit of your views and suggestions before introducing it later this year. 

Before I close, I would just like to say a few words on behalf of 

our late colleague, Don Payne, who devoted so much of his career 

to serving the poor and downtrodden, particularly in Africa. And, 

Dr. Shah, I welcome your recent launch of the Donald Payne Fellowship Program, designed to attract outstanding young people to 

careers in international development. 

I know that Don had been working with you for the last year on 

your draft diversity and inclusion plan, and this will be an important element of it. But I also want to bring to your attention the 

last piece of legislation that Don introduced. H.R. 4141, the Food 

Assistance Improvement Act of 2012, is designed to improve the 

nutritional quality and cost-effectiveness of United States food assistance, based on a number of recommendations made by the 

GAO. 

Don wanted to ensure that the food we provide is of the right 

type, quality, and nutritional value, not just to prevent starvation, 

but to maintain and restore health for the most vulnerable populations. I think one of the best ways we can honor Don’s life and 

memory is to move this legislation through the process in a cooperative and bipartisan manner. 

Thank you, Dr. Shah, and I look forward to your testimony. 

Chairman ROS-LEHTINEN. Thank you so much, Mr. Berman. 

And now we will hear from our members, who are recognized to 

give 1-minute remarks, starting with Congressman Smith, the 

chairman of the Subcommittee on Africa, Global Health, and 

Human Rights. 

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

Welcome, Dr. Shah, to the committee, always great to see you. 

You know, I would ask that you perhaps in your statement and 

certainly in your work consider two issues that are largely overlooked. In 1998, I began the national effort to combat autism—

wrote the law, Combatting Autism Act, which it was my bill. It was 

just re-signed into law by President Obama, providing money for 

research. 

But on the international side, we had a hearing May 31st. It is 

estimated that there are 67 million individuals with autism and in 

Africa, it is tens of millions. And we had a woman from Cote 

d’Ivoire who said in Africa, there are no services. There are no diagnoses being made. And these children are being abandoned, and 

many of them die. 

6

Secondly, on the issue of hydrocephalic children, many of whom 

get that way because of infection, we had a hearing on that with 

CURE International on August 2nd. I have a bill that I am going 

to be introducing, International Infant Hydrocephalus Treatment 

and Training Act. 

There is a simple shuntless intervention—and I saw it when I 

was in Uganda and Kenya—that can save the lives of these children, who otherwise die or are severely disabled. And I would ask 

you. We need to put resources behind both CURE International 

and their efforts and this effort on combatting autism. 

Chairman ROS-LEHTINEN. Thank you so much. 

Mr. Faleomavaega? 

Mr. FALEOMAVAEGA. Thank you, Madam Chair. 

I want to thank you for holding this hearing. And I want to extend my personal welcome to Dr. Shah this morning at our committee. 

And I want to associate myself with the comments made earlier 

by our ranking member, the gentleman from California, Mr. Berman, especially to recognize the tremendous contributions that our 

former colleague and a dear friend of mine, Congressman Payne, 

who passed away. And I think it could not be more fitting that we 

name this program after him for the tremendous work that he has 

done for the continent of Africa, just as much as we have worked 

together for the past 23 years of being helpful to these 2 regions 

in Africa as well as in Asia Pacific region. 

I do have some questions I will ask Dr. Shah as we proceed with 

the hearing. Thank you. 

Chairman ROS-LEHTINEN. Thank you very much. 

Mr. Rohrabacher is recognized. 

Mr. ROHRABACHER. Thank you very much. 

We will miss Don Payne. And I will miss his aggressive refutations of the points that I make, as he always did so as a fine gentleman. 

We have $5 trillion more in debt right now than we had 3 years 

ago, $5 trillion. Unless that is dealt with, our economy will collapse. Currency will collapse. You are going to have to convince us. 

And I am sorry. I love my colleagues who have such great hearts 

that they want to help autistic children in Africa and elsewhere, 

but you are going to have to convince me of why it is necessary to 

borrow more money from communist China in order to give money 

to some other country or some other group of people. 

I submit for the record on top of that, Madam Chairman, at this 

point I would submit for the record a list of perhaps $100-million 

worth of aid that we are giving to China. And I would like you to 

convince me of why it is necessary for us to provide this type of 

aid to the world’s worst human rights abuser and a country that 

is governed by a clique that thinks of the United States as their 

enemy. 

Thank you very much, Madam Chair. 

[NOTE: The information referred to is not reprinted here but is 

available in committee records.] 

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

Mr. Sires is recognized. 

7

Mr. SIRES. Thank you, Madam Chair, for holding this meeting. 

And I would like to associate myself with some of the comments 

made here by my other members, especially in regards to Don 

Payne. 

And also I would like to associate myself with the $100 million 

that my good colleague Rohrabacher said that we are giving China, 

but I am also more concerned about the Western Hemisphere. It 

seems that some of the countries that need the most to promote democracy, we’re cutting it, especially when you have countries like 

Iran moving into the region and establishing a relationship with 

some of these countries that are really out to end democracy in this 

area. So I am very concerned. 

All the cuts, especially when it comes to Cuba, there is a crackdown going on now just before the Pope visits. And I don’t understand why this administration is so intent on cutting just about 

anything that promotes democracy in this area when we should 

really be putting more money into it. This business of appeasing 

some of these countries is just I don’t understand it. 

Thank you very much. 

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

Judge Poe, Texas, is recognized. 

Mr. POE. Mr. Shah, it is like we talked about in December. We 

can’t reform foreign assistance without Congress and the administration working together to do so. For example, your new evaluation policy in my opinion is a step in the right direction. 

I commend you for that. On the congressional side, we are trying 

to do some things here, too. I appreciate your support for my foreign assistance reform bill, H.R. 3159. That is co-sponsored by the 

ranking member, Mr. Berman. 

We need the administration to establish guidelines for monitoring and evaluation of America’s money. We need those guidelines implemented by all departments that deal in foreign assistance so we can hold them accountable, learn from mistakes, and 

make sure those programs are either funded or not funded. 

Now it is hard to tell the bad programs from the good ones because we don’t evaluate them. We should shut down programs that 

don’t reform and start doing what they promised when they got our 

money. Instead, we should give that money to programs that deliver. 

After 50 years of doing foreign assistance, we don’t subject our 

aid to rigorous evaluation. Those days need to end immediately and 

hold people accountable. 

I yield back. 

Chairman ROS-LEHTINEN. Thank you very much. 

Mr. Connolly of Virginia? 

Mr. CONNOLLY. Thank you, Madam Chairman, but I think Mr. 

Deutch may have been ahead of me. 

Chairman ROS-LEHTINEN. Yes, you are so right. Mr. Deutch? See, 

I am just trying to be friends with you in hopes I can get some 

more of that chocolate. Mr. Deutch? 

Mr. CONNOLLY. It is on its way, Madam Chairman. 

Chairman ROS-LEHTINEN. Thank you. 

Mr. Deutch is recognized. 

8

Mr. DEUTCH. Thank you. Thank you, Madam Chair. And thank 

you to my friend and gentleman Mr. Connolly. 

Thank you, Dr. Shah, for being with us today. Dr. Shah, I would 

like to commend you on the progress that you have made with the 

USAID Forward Program to streamline the agency and make 

USAID more effective in this difficult budget climate. 

I said many times before to this committee that the work that 

is being done across the globe through our funding of international 

assistance programs is absolutely critical to the security of our own 

country, programs like the Global Health Initiative, which works to 

prevent the spread of HIV/AIDS and fund President Bush’s 

PEPFAR Program, are vital to preventing global pandemics. These 

are the kids of programs that work to stabilize the most vulnerable 

regions in the world. 

International assistance should be an area where we can come 

together to support programs that save the lives of women and 

children by providing access to reproductive health care so that 

children don’t have to lose their mothers during childbirth, so that 

young women delivering their first child, women whose growth is 

stunted because of poor nutrition or childhood illness, women living 

in rural areas or those who use traditional maternity care and deliver at home don’t end up ostracized from their community from 

the debilitating effects of preventable conditions, like obstetric fistula. 

Dr. Shah, we provide funding for international assistance programs because they reflect our core American values. I look forward to your testimony today. 

And I yield back, Madam Chair. 

Chairman ROS-LEHTINEN. Thank you so much. 

Mr. Royce is recognized. 

Mr. ROYCE. Thank you, Madam Chair. 

According to a recent study, when asked how to solve the North 

Korea’s chronic food shortage problem, 94 percent of North Korean 

refugees said the government needed to be reformed. Only 1.4 percent said the answer was more food aid. They know that sending 

more food will only help the regime’s inner circle and keep it well 

fed. 

We had one senior North Korean defector say, ‘‘We must not give 

food aid to North Korea. Doing so is the same as providing funding 

for North Korea’s nuclear program.’’ And he argued that it allows 

Kim Jong-un to divert resources toward its military program, it allows the military to be well fed. 

According to one South Korean parliamentarian, the north is 

hoarding 1 million tons of rice, playing up the shortfall to pressure 

us and others for aid. Many others suspect that the north is hoarding food for the 100th anniversary of North Korea’s founder, Kim 

Il Sung. Food aid, of course, would subsidize that event. Consolidating the Kim dynasty is no contribution to human rights. 

Thank you, Madam Chair. 

Chairman ROS-LEHTINEN. Thank you. 

Ms. Bass is recognized. 

Ms. BASS. Thank you, Madam Chair. 

Dr. Shah, thank you for your steadfast leadership and commitment to foreign affairs and development. I commend the women 

9

and men of USAID, some of whom work in extreme and high-stress 

environments. You and your colleagues continue to share the good 

will of the American people without our fail. For this, we are very 

grateful. 

I look forward to learning where you see real opportunity to 

maximize U.S. development and diplomatic efforts. I imagine the 

last several years have not been easy and you should be commended for your resilient work to make a more efficient and effective USAID, both abroad and here at home within the agency itself. 

Thank you very much. 

Chairman ROS-LEHTINEN. Thank you very much. 

Mr. Connolly is recognized. 

Mr. CONNOLLY. Thank you, Madam Chairman. And I welcome 

Dr. Shah to the committee again. 

A great power must reject the false choice that we can deal with 

our debt or we can deal with other obligations but we cannot do 

both. A great power has obligations, and it has interests that must 

be propounded and a modest bilateral and multilateral aid program 

is a tool without which we commit unilateral disarmament. If we 

are worried about the competition coming from China, they are getting off airplanes and on airplanes in every developing country in 

the world. And we are retreating. And that is not a wise long-term 

policy for the United States of America. 

I am interested particularly in hearing about two things today. 

One is advocacy. What do we know about what works in our aid 

program over 40–50 years of experience now? 

And, secondly, how are we best structured to make sure we are 

deploying the assets and resources we have got from an administrative point of view. 

Thank you, Madam Chairman. 

Chairman ROS-LEHTINEN. Thank you, sir. 

Ms. Wilson is recognized. 

Ms. WILSON. Thank you, Madam Chair. 

Thank you, Director Shah, for your presentation of the President’s Fiscal Year 2013 budget request for USAID to the committee 

today. It is a pleasure, pleasing pleasure, to have you. 

America has long been seen as an example for the rest of the 

world in democracy and diplomacy. And thank you for your role in 

leading this charge. 

The assistance of developing nations is integral in our national 

security. In fact, you had not spent many days on the job before 

the devastating earthquake ripped through Port au Prince, Haiti, 

a day that I am sure you recall vividly. In fact, the world recalls 

that day. That was a day that forever changed the direction of 

Haiti and will not soon be forgotten by many of my constituents in 

Miami, Dade County, Florida. 

Many of them note and are grateful for the responsiveness of 

USAID, both immediate and ongoing. I am encouraged by the outreach that you and your staff have maintained with the South Florida community. 

When I traveled to Haiti, I was alarmed by the thousands that 

remained homeless without any hope of finding work or housing. 

I was disturbed by the living nightmare of women and girls who 

are suffering from sexual and physical abuse. Upon my return, it 

10

was the stories of rape by force and the visuals of pregnant teens 

that haunted me. 

I sponsored a resolution on gender-based violence in Haiti to reassure the people of Haiti, particularly the women and children, 

that the United States remains a committed partner in the fight 

to end all forms of gender-based violence in Haiti. 

I would like to encourage the administration through the State 

Department and USAID to encourage the Haitian Government to 

take proactive steps that are consistent with the Interamerican 

Commission on Human Rights’ recommendations on sexual violence to eliminate gender-based violence. 

It is my——

Chairman ROS-LEHTINEN. Thank you. 

Ms. WILSON. Oh, that is it? 

Chairman ROS-LEHTINEN. Thank you very much. 

Ms. WILSON. Thank you. 

Chairman ROS-LEHTINEN. Thank you, Ms. Wilson. Thank you to 

all of our members for their opening statements. 

And now the Chair is pleased to welcome our witness. Dr. Shah 

serves as 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 at the U.S. Department of Agriculture. He also served as director of agricultural development in the Global Development Program at the 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. Your entire statement will be 

made a part of the record. And I realize that your timer is not 

working. I will just fling the gavel at you when the 5 minutes are 

up in a very subtle way. Dr. Shah, you are recognized. 

STATEMENT OF THE HONORABLE RAJIV SHAH, ADMINISTRATOR, U.S. AGENCY FOR INTERNATIONAL DEVELOPMENT 

Dr. SHAH. Thank you, Chairman Ros-Lehtinen and Ranking 

Member Berman and members of the committee. It is an honor to 

be here today to present and discuss the President’s Fiscal Year 

2013 budget request for USAID. 

I would like to take a moment as well to recognize the life and 

work of your fellow committee member Don Payne. Congressman 

Payne was, of course, well-known on these issues and deeply respected and loved at our agency. He spent a considerable amount 

of time with me and with out staff in traveling to visit our programs. And we will continue to do what we can to honor and carry 

forward his legacy. 

Chairman Ros-Lehtinen, Ranking Member Berman, each of you 

has challenged our agency to be more businesslike in the way we 

carry out our mission and to apply a laserlike focus on the results 

we seek to achieve and to pursue them aggressively. 

Madam Chairman, I have appreciated your continued emphasis 

on the need for USAID to aggressively engage the private sector to 

11

seek more leverage and more results in how we spend our resources. And in response to that, we have expanded a number of 

efforts to do just that. 

Ranking Member Berman, I appreciate your efforts to pursue a 

reform agenda for foreign assistance that prioritizes monitoring 

and evaluation, focusing on results and transparency. And we believe we have taken a number of important steps to take that to 

the next level of performance. 

Two years ago, President Obama and Secretary Clinton called for 

elevating development as a key part of America’s national security 

and foreign policy. Recognizing that in frontline states, such as Afghanistan, Iraq and Pakistan, in transition countries in the Middle 

East and North Africa, in expanding our engagements with the private sector to create markets of the future and jobs at home, and 

in focusing on and achieving real development results in moving 

people out of hunger and poverty, saving children’s lives, improving 

access to water and education, responding to humanitarian crises 

effectively, and promoting democracy rights in governance, in doing 

these tasks, our work makes us safer and more secure over time. 

The President’s Fiscal Year 2013 budget request is designed to 

do this. We have prioritized across our portfolio, continuing the 

path of closing missions in places like Montenegro, Panama, and 

Guyana. We are cutting programs. More than 165 programs have 

been reduced or cut. So that today USAID’s China request, for example, is exclusively for only those communities in Tibet and for 

some very small disease control efforts to prevent the spread of 

international communicable diseases. 

We have eliminated health programs in Peru and Mexico, eliminated food and agriculture programs in Kosovo, Serbia, and 

Ukraine, all to refocus our efforts and our priorities in those places 

where we can generate the most significant results. 

The American Evaluation Association has referred to our approach to monitoring and evaluation as a gold standard across the 

Federal Government and encouraged other agencies to adopt the 

approach we are trying to adopt everywhere we work. 

And, perhaps most importantly, we are seeking to implement a 

new model of partnership with faith-based institutions, private sector entities, universities around this country and the world and, 

most importantly, to get much more value for money in the way we 

work with our existing NGO and contract partners. 

We do this work with great care, trying to invest more directly 

in local institutions, to stretch the value of American dollars and 

get better development results. 

Our budget request includes a request to authorize a working 

capital fund for USAID to help ensure that we have the contracts, 

capacity, and oversight, and management capability to continue to 

squeeze more value for money in how we seek to achieve development results. 

And this budget focuses on our core priorities. To support the 

transitions in the Arab Spring, we are requesting a joint State-AID 

account of $770 million in an incentive fund designed to support a 

critical transition. 

In our frontline states of Iraq, Afghanistan, and Pakistan, we 

continue to fight for sustainable programs that are delivering reVerDate 0ct 09 2002 11:34 Aug 15, 2012 Jkt 000000 PO 00000 Frm 00015 Fmt 6633 Sfmt 6633 F:\WORK\FULL\032012\73455 HFA PsN: SHIRL
12

sults. We have reduced the scale and scope of that programming 

to ensure sustainability. And we are very cognizant of the security 

risks and security management strategies we have put in place in 

those environments. 

Global health, at $7.9 billion, is the single largest item in the foreign assistance request. This amount of resource will allow us to 

meet the President’s goal of increasing treatment for HIV/AIDS patients from 4 million to 6 million people, essentially saving 2 million additional lives. 

It will allow us to maintain our commitment to fight for and implement the end of AIDS by creating a generation born without 

HIV/AIDS. It will allow us to continue to prioritize the very efficient President’s Malaria Initiative, which has seen in many of its 

priority countries child death come down by more than 30 percent 

due to effective and cost-effective programs implemented well. And 

it allows us to capture some of the new opportunities that technology and innovation have made possible in terms of saving children’s lives. 

The budget includes a $1 billion request for our Feed the Future 

partnership. We saw last year the worst drought in more than six 

decades hit the Horn of Africa, placing 13.3 million people at risk 

of hunger and starvation. USAID led an international humanitarian response, helping to save thousands of children’s lives and 

feed more than 4.5 million individuals. 

But food aid costs eight to ten times more than investing in helping people produce and sustain their own futures through agriculture. And we are starting to see real results in our Feed the Future partnership, with countries in that program experiencing a 

rate of agricultural productivity growth nearly eight times the global average. 

So I will conclude my statement with a thank you to our staff. 

We have asked them to take on real risks in difficult environments 

and to take on a significant and aggressive reform agenda, which 

I call USAID Forward. They have done this in an impressive manner. 

And, while much work lies ahead, I appreciate your support and 

your ideas and your consultation as we continue to work together 

to improve our national security. Thank you. 

[The prepared statement of Mr. Shah follows:]

13


73455a-1.eps
14


73455a-2.eps
15


73455a-3.eps
16


73455a-4.eps
17


73455a-5.eps
18


73455a-6.eps
19


73455a-7.eps
20

Chairman ROS-LEHTINEN. Thank you so much, Dr. Shah. Thank 

you for excellent testimony. And now we will begin our question 

and answer period, 5 minutes per member. 

I will ask a series of questions, Dr. Shah. You won’t have time 

to answer, but I respectfully request if I could get a written response to these, that would be wonderful. 

On Haiti, the President’s Fiscal Year 2013 budget allocates near- ly $340 million in new assistance funds for Haiti. The recent resignation of the Haitian Prime Minister and the absence of the interim Haiti Recovery Commission raises serious concerns about 

what oversight mechanisms are being employed to guarantee accountability of U.S. taxpayer dollars. 

So if you could respond in written form what action is the U.S. 

Government undertaking in order to ensure proper transparency of 

assistance funds into Haiti? 

On funding for the Palestinian authority, Dr. Shah, the adminis- tration is pressing Congress to release $147 million for Palestinians 

in the West Bank and Gaza. Among the arguments, it utilizes that 

Abu Mazen needs to be supported because he is all we have. However, the administration is not demanding that Abu Mazen return 

to the negotiation table with Israel without preconditions, nor that 

he stops his unilateral statehood scheme at the U.N. The administration also says we need to help rebuild the Palestinian economy, 

this at a time when our economy is facing serious challenges and 

Americans are suffering. 

Now, in the list of projects the administration wants to fund with 

147 million in taxpayer dollars, there are some that are aimed at 

addressing humanitarian concerns, funding for water programs, 

health, food aid, and support for USAID programming. Congress 

and the administration can’t find common ground on these. 

However, there are others that Congress finds difficult to justify 

as advancing U.S. national security interests or in assisting our 

ally and friend Israel. In this respect, if you could justify $2.9 million for trade facilitation, $4.5 million for tourism promotion, and 

$8.1 million for road construction? 

Specifically, I would ask that you justify a total of $26.4 million 

in reconstruction and recovery for Hamas-run Gaza. That includes 

cash for work programs? And, more broadly, how much has the 

U.S. spent in total since 1993 in West Bank and Gaza? And how 

much is the administration proposing we spend next year? And 

how can we justify that? 

Turning to Egypt, if you could respond to what mechanisms you 

have developed to ensure that U.S. assistance to Egypt does not directly or indirectly provide support or otherwise is influenced by 

the Ministry for International Cooperation and Development? And 

what is the justification for the provision of any U.S. assistance to 

an Egypt Government potentially dominated by the Muslim Brotherhood or affiliated extremists? Do you agree that no U.S. assistance should be provided, directly or indirectly, to the Muslim 

Brotherhood and affiliated extremists? 

And, lastly, to my native homeland of Cuba—and Mr. Sires well 

spoke of that—the Obama administration has had a policy of concession toward the Castro brothers, but it has not yielded any 

measurable change for democracy. And I am deeply concerned 

21

about the Department of State and USAID’s growing funding for 

programs that promote the Castro brothers’ sham economic reforms 

at the expense of funding for important programs that do support 

Cuba’s political prisoners and the growing internal opposition. 

Though this administration likes to point to Castro’s so-called 

economic reforms as a sign of change, the fact remains that 11 million Cubans continue to suffer under brutal conditions with the repressive Castro regime. And this new focus on economic reforms 

will do nothing more than validate the Castro regime and promote 

their radical anti-American propaganda. 

And so my question is, how does harnessing U.S. foreign assistance to promote the Castro brothers’ sham economic reforms build 

the capacity for the internal opposition? And how can we prioritize 

the funding for Cuba to strive for a free and democratic Cuba by 

again funding the pro-democracy programs there on the island? 

So I thank you, Dr. Shah, for that written response whenever 

you get to it. Thank you so much, sir. And now I would like to turn 

to Mr. Berman. 

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

Dr. Shah, I think under your leadership, a number of important 

and exciting things are happening at USAID. You have been leading the way to make our aid more efficient, more effective, and 

more accountable. You have restarted the process of doing country 

strategies so that we are clear about our objectives and our measures of success. 

You have established a new system of monitoring and evaluation, 

as the gentleman from Texas mentioned earlier, to ensure that 

funds are spent properly and achieve the desired results. And you 

have launched procurement reforms to make it easier to partner 

with small businesses and local NGOs, rather than bundling everything into huge contracts that only the biggest companies could 

hope to compete for. 

When it comes to Afghanistan particularly, and perhaps Pakistan as well, our largest recipients of ESF, these considerations 

seem to go out the window. We don’t seem to have a clear idea of 

what success would look like in Afghanistan. Each week there 

seems to be some new report about corruption and misuse of funds 

with little good news attached. 

We are spending a huge portion of our funding on security costs, 

instead of on actual programs. And USAID has just recommended 

limiting the use of cooperative agreements and grants in Afghanistan, which means, in effect, ending our work with NGOs and 

handing it all over to large companies. 

Can you talk to us about what you would regard as success in 

Afghanistan, how you are guarding against corruption, what 

progress we have made so far, and why we are relying so heavily 

on big contractors? 

And let me just insert one other question if you have a chance 

to answer that as well. This deals with Syria. Basically world leaders have made an historic commitment to protect populations from 

genocide, war crimes, ethnic cleansing, and crimes against humanity. 

What can you tell us in open session about what the United 

States is doing to uphold its responsibility to protect civilians in 

22

Syria? Do we have any assessment of the needs? And are we working with international humanitarian agencies to find ways of meeting them? So Afghanistan more generally and Syria that specific 

question. Thank you. 

Dr. SHAH. Thank you, Congressman. I appreciate your comments 

about our overall reforms. And I would suggest that they have also 

been implemented in Afghanistan. 

In Afghanistan, we have seen over the last several years significant and important results, 7 million kids in school, 64 percent 

health coverage leading to a report that came out in December that 

showed the largest reductions in maternal and neonatal mortality 

anywhere in the world have taken place in Afghanistan. 

We have also seen real economic performance, 10–11 percent 

annualized growth rates for a number of years, and a more than 

tripling of domestic revenue collection, which needs to continue on 

that trend for the Afghans to increasingly take up the responsibility of paying for their own public expenditures. 

The challenge going forward and the challenge the President has 

articulated is sustaining those gains in a challenging environment 

and in an environment where we seek enough stability for our 

troops to be able to come home on the schedules the President has 

announced and supported. 

In that context, we are doing a number of things differently. We 

have formulated and implemented sustainability guidance, reviewed all of our programs, found that some needed to be restructured pretty dramatically in order to be able to be sustained by Afghan revenues and by any legitimate future of what assistance 

could look like for the Afghan people. 

Second, we are working closely with international partners to 

have a long-term strategy that is consistent with Afghan priorities 

but also forces real prioritization and focuses on specific and concrete results, things like tripling energy access to businesses and 

to people in Afghanistan, which has been achieved over the last 6 

years. 

We believe that we want to be working more with local institutions, including in a way that monitors against corruption, government, and NGOs. I will look into the specific point about the cooperative agreements because that was only intended to apply to 

large-scale infrastructure being developed in complex security environments, but I will have to look into that and come back to you 

more specifically. 

On Syria, in particular, we have certainly been very active in 

conducting and partnering with others to conduct assessments. 

Syria actually has a strong international community presence inside of Syria, in part due to their support for Iraqi refugees over 

a longer period of time. Many of them have conducted assessments 

and presented us with opportunities to support specific humanitarian efforts with a real focus on getting commodities and medical 

support and trained medical personnel to immediately affected 

areas. 

That said, any international humanitarian effort is fundamentally constrained by the serious and very transparent lack of access 

created by the Syrian Government’s active military campaign. And 

while I can’t speak about this in much more detail, I think it is 

23

safe to say that we should have modest expectations of what humanitarian partners will be able to achieve there, but we are working with them aggressively, as aggressively as we can. 

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

And thank you, Dr. Shah. 

Mr. Smith is recognized. 

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

Dr. Shah, when the President’s Emergency Plan for AIDS Relief, 

or PEPFAR, was marked up here in this room a decade ago, I sponsored both the conscience clause amendment and the anti-trafficking and prostitution amendment. Both were enacted into law in 

2003 and reauthorized again in 2008. 

I have read the acquisition and assistance policy directive, the 

AAPD 1204 issued on February 15th of 2012, which replaces previous guidance on these matters. The policy directive reiterates the 

law verbatim, ‘‘An organization, including a faith-based organization, shall not be required as a condition of receiving assistance.’’ 

And it goes on to list it ‘‘and that the organization has a religious 

or moral objection. It shall not be discriminated against in the solicitation or issuance of grants,’’ and it goes on from there. 

Can you provide assurance, including a commitment to robust 

monitoring, that grants contracts or cooperative agreements 

haven’t been, aren’t now, nor will be written in such a way—and 

I am thinking of integrated services—to diminish or to even preclude organizations, including faith-based organizations, from applying or receiving those funds? 

Secondly, on the anti-sex trafficking prostitution law, the DC Circuit Court of Appeals, as you know, held that USAID may enforce 

the requirement that entities have a policy opposing sex trafficking 

and prostitution while the U.S. District Court for the Southern District of New York has ruled against it. Your view on this proviso? 

And will the administration appeal to the U.S. Supreme Court? I 

understand the filing deadline for cert is May 2nd. So that date is 

fast arriving. 

And, finally, number three, according to the GAO report issued 

on October 11, a USAID-funded award recipient, the International 

Development Law Organization, or IDLO, advised the Kenyan entity responsible for drafting the new Kenyan Constitution, to include 

language in the Constitution that would legalize abortion in that 

country. 

The only reason we learned about this blatant violation of U.S. 

law prohibiting the use of funds to lobby for or against abortion is 

that IDLO itself informed GAO in response to GAO’s inquiry. The 

USAID’s official responsible for managing the grant informed GAO 

that she did not fully read IDLO’s reports until the USAID IG inquiry brought them to her attention in mid 2010. I would note my 

extreme disappointment that the USAID IG did not reveal this violation in its report to Congress on September 29th, 2010. 

My question, please explain how this violation occurred; why 

USAID did not properly monitor the grant so that the violation 

could be immediately rectified; and what, if any, measures have 

been taken to ensure that future grants that potentially involved 

lobbying for abortion adhere to legal funding restrictions. 

Dr. Shah? 

24

Dr. SHAH. Thank you, Congressman. And thank you for your 

partnership and work, especially on fighting for the health of vulnerable populations around the world. We very much appreciate 

that. 

On your first point, faith-based institutions and partnerships are 

absolutely critical to our ability to be successful around the world. 

And one of the first things I did was ask our faith-based office to 

do a systematic review of both how we work with faith-based partners and to look in-depth at our procurement and contracting to explore whether we could do a better job of being more accessible and 

a better partner overall and as an agency. 

We have been steadily implementing many of the findings that 

they have come up with. And I think we are doing a better job by 

any number of metrics and in terms of our engagements with the 

faith-based community and in terms of supporting the fact that 

they sometimes generate better results because they have a deeper, 

longer-standing, more sustainability-oriented commitment to delivering services for very vulnerable populations. 

So the short answer, sir, to your first question is yes, absolutely, 

we will be implementing the law as you read it. And we will have 

a strict focus on making sure that is the case. 

Mr. SMITH. And I hope, again, that integrated services would not 

become code for exclusion. 

Dr. SHAH. Integrated was one of the issues that came up in the 

review. And we have come up with a few options that have enabled 

us to work to ensure that that is not exclusionary for faith-based 

partners. And we are now exploring a second tier set of options 

that will go even further than that. So we recognize that issue and 

have been working on that and I think getting positive feedback 

from our faith-based colleagues and partners on our steps in that 

space. 

In terms of your point about the case that is with the Solicitor 

General, I understand it is the Solicitor General’s decision and will 

be made soon. I can follow up with your office in more detail, but 

I thank you for raising that. 

Chairman ROS-LEHTINEN. Thank you very much, Dr. Shah. 

Thank you, Mr. Smith. 

Mr. Faleomavaega? 

Mr. FALEOMAVAEGA. Thank you, Madam Chair. 

Dr. Shah, approximately 20 years ago, the downfall of the Soviet 

Union, one of the decisions our Government made was to show no 

more presence of USAID in the Pacific region because of limited resources. We have new countries coming out of East Asia, South 

Asia, Central Asia. And for the last 100 years, USAID is not 

around. 

Now, I have got a little problem here because currently the People’s Republic of China currently has a $600-million development 

aid program for the 16 island nations. And when I looked around, 

the last thing we did was we sent a medical ship full of doctors and 

nurses. They did inoculations, vaccinations about 2 years ago. 

And my question is, do we have to wait another 40 years to sail 

another ship? And I am very concerned with the fact that there is 

no presence. I think it has been 2 years now USAID has been lookVerDate 0ct 09 2002 11:34 Aug 15, 2012 Jkt 000000 PO 00000 Frm 00028 Fmt 6633 Sfmt 6633 F:\WORK\FULL\032012\73455 HFA PsN: SHIRL
25

ing at whether or not it should justify itself in coming to the Pacific 

region. 

Where are we with this right now? Is there still a lack of importance in this region, why USAID feels it shouldn’t be there? 

I noticed also with interest—and please don’t get me wrong. Absolutely these countries need funding: The Western Hemisphere, 3 

countries, South Asia, 4 countries, Middle East, 5 countries, Asia 

Pacific region, 3 countries, Africa, 19 countries, and I am sure 

there will probably be assistance. There is not one thing mentioned 

about Central Asia, nothing mentioned about Eastern Europe, and 

absolutely zero for the Pacific region. Can you comment on that? 

Dr. SHAH. Yes, sir. Thank you for the comment and your point. 

The Pacific region is, in fact, a priority for this administration. 

President Obama articulated as such on his trip to the Pacific. And 

his comment on returning was that this is a region where they welcome and seek active and greater partnership in——

Mr. FALEOMAVAEGA. The problem I have with this, Dr. Shah, is 

that in my humble opinion, the only foreign policy that we have toward the Pacific region is really with Australia and New Zealand. 

These island countries are only incidental to our overall major interests in this region. And I am very concerned about this. 

If it is possible that China can provide a $600-million economic 

development program for these countries? It tells me that we are 

really not that interested. 

Dr. SHAH. So I would just argue, sir, that we have, in fact, 

opened a new satellite office in Papua New Guinea. We are putting 

in place regional programs for the Pacific islands. We are doing so, 

as you mentioned, in partnership with New Zealand and with Australia and focused on using new tools and technology so we get as 

much leverage as is possible since this is overall a very challenging 

fiscal environment. 

And we are doing that with an eye toward some core priorities 

for the region: Health, education, and regional integration in terms 

of economics and resilience. We know that two-thirds of the predicted disasters over the course of the next decade will be Asia Pacific and in where they take place. And so we have active risk reduction programs that are seen as the best in the world. 

Mr. FALEOMAVAEGA. I know my time is up, Dr. Shah. And I have 

got to hit you up with one more question. 

Dr. SHAH. Sure. 

Mr. FALEOMAVAEGA. One of the issues that is always dear to my 

heart is the fact that you know the usual Chinese saying, ‘‘Feed the 

man fish. He will live for 3 days. But if you teach him how to fish, 

he will live forever.’’

I honestly believe that one of the most important public diplomacy issues that our country should really promote and enhance, 

currently we have about 670,000 foreign students attending our 

American colleges and universities. And I am curious to know 

where is USAID putting its priority in providing educational opportunities for foreign students? 

Central Asia, countries that are really, really in need of nuclear 

self-educated and professional people so they can continue to do 

better in terms of how they can provide greater transparency than 

they are giving governments. And I was just wondering, is USAID 

26

serious they can provide the educational opportunities for students 

from these countries that really have a need? 

Dr. SHAH. Sir, we absolutely are. I would suggest we prioritize 

at this point basic education and track outcomes so that people can 

progress to secondary school. In secondary education, we prioritize 

getting girls to complete and work through secondary education. 

And we have just launched a new series of expanded partnerships to allow for twinning between U.S. higher education institutions and counterparts around the world. Today we know that it 

can often be cheaper and more effective to help people gain higher 

education through any number of innovative ways, including virtual learning and other tools. So we are very cost-conscious and 

technology-informed in how we are pursuing that goal, but we are 

pursuing that. 

Mr. FALEOMAVAEGA. I have 100 more questions, I am sure, but 

I am going to go. 

Chairman ROS-LEHTINEN. Thank you. 

Mr. FALEOMAVAEGA. Thank you, Madam Chair. Thank you, Dr. 

Shah. 

Chairman ROS-LEHTINEN. Thank you. 

Mr. Rohrabacher? 

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

And, Mr. Administrator, I put in the record in my opening statement a list——

Chairman ROS-LEHTINEN. Without objection. 

Mr. ROHRABACHER. We already have that in the record, Madam 

Chairman. Thank you. 

In that list, you will see the list of items that are going to China. 

And there are millions of dollars, perhaps $100 million that I have 

listed. Many of them are indeed for environmental assistance to 

China to try to improve their environment, but here are some of 

the others on the list. Here are $150,000: For the Organization for 

Economic Cooperation and Development for development assistance 

to China. Here is $47,000 to Management Systems International 

for development assistance, USAID to Rockefeller philanthropy advisers of $2.4 million for sustainable livelihoods in China; The Asia 

Foundation, $1 million to improve disaster management in China. 

There is, for example, to an undisclosed foreign contractor $150,000 

for development assistance in China and $450,000 to The Asia 

Foundation for disaster management in China. It is 200, almost 

$300,000 to Bob Davis nongovernmental organization for sustainable livelihoods in China. 

Now, these things all add up to a considerable sum of money. 

Can you tell me why when China at this moment is expanding 

their military spending in a way that is threatening to its neighbors and to the security of the United States at a time when it is 

developing its space-based weapons systems and rocket systems at 

a time when it is itself giving aid to rogue states that hate the 

United States, whether it is Iran or North Korea or Venezuela, why 

are we providing money to them? Actually, why are we borrowing 

money from them in order to give it back to them so that we can 

pay interest on the money that we just gave to them? Something 

is screwy here. You may proceed to try to answer that. 

27

Dr. SHAH. Okay. Sir, the Fiscal Year 2013 request for China is $6.5 million. Almost all of that is exclusively for programs to assist 

Tibetan communities to preserve their unique livelihoods and with 

a small amount to focus on limiting the transmission of infectious 

disease, which is a CDC partnership with China that grew out of 

the SARS epidemic and today focuses on top-level HIV/AIDS——

Mr. ROHRABACHER. So you say that is $6 million going to who? 

Dr. SHAH. $6.5 million going to programs to support Tibetan 

communities. 

Mr. ROHRABACHER. Okay. Six million dollars going to Tibetan 

communities. 

Dr. SHAH. But I believe the $6.5 million covers the Tibetan communities and the CDC (Centers for Disease Control) partnership 

with——

Mr. ROHRABACHER. Okay. So we are helping them control their 

health care needs for their people. 

Dr. SHAH. That is a program that grew out of the SARS epidemic, which, of course,——

Mr. ROHRABACHER. Right. 

Dr. SHAH [continuing]. Had global consequences. And it is a technical program that helps them maintain focus. 

Mr. ROHRABACHER. Yes. 

Dr. SHAH. There are two other important points. 

Mr. ROHRABACHER. There are always global implications to every 

outbreak of every communicable disease. 

Dr. SHAH. There are two other important point. The first is on 

global health, China has traditionally been a recipient of funding 

from the global funds for TB and malaria. This administration has 

taken the position and used our Board seat on that group to try 

to transition China to be a donor to that group, as opposed to a recipient. And that would be if made a——

Mr. ROHRABACHER. Let me ask you this. Have they donated more 

than they have taken out? 

Dr. SHAH. I don’t know the——

Mr. ROHRABACHER. I know the answer to that. I have confronted 

the people before with this. And they are taking out like ten times 

more than they are putting in. And you call that a success? 

Dr. SHAH. No, no. We are actually trying to change that. We are 

trying to make it so they——

Mr. ROHRABACHER. I know you are trying to change it. That is 

not a success. You have not been successful at changing that. What 

you have been successful at is now trying to give some money while 

it is taking out an enormous amount of other money. 

But what about all of these other things that I just pushed in 

your direction? Development assistance? Disaster management? 

Why are we paying China? Why are we borrowing money from 

China to give it back to them like that when they are spending 

their money on weapons aimed at the United States? 

Dr. SHAH. Sir, I would be happy to have my team look at the list 

and come back to you specifically. I know with certainty that the 

request for Fiscal Year 2013 explicitly focuses on support for Tibetan communities and a small amount of technical partnership to 

manage international disease control priorities. 

Another point I would make, sir——

28

Mr. ROHRABACHER. Madam Chairman, before my time has gone 

out, let me just note I am opposed to free trade with dictatorship, 

especially the world’s worst human rights abuser. But what I am 

more opposed to is giving aid to human rights abusers and dictatorships. And we have got the worst in all worlds in our relationship with China, which is the world’s worst human rights abuser. 

Thank you, Madam Chair. 

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

Mr. Deutch is recognized. 

Mr. DEUTCH. Thank you, Madam Chair. 

Dr. Shah, the President’s budget requests $569 million for family 

planning and reproductive health activities, including $39 million 

for the U.N. population fund for international organizations and 

programs that count and $530 million in bilateral family planning 

funds from global health programs account. 

Can you explain, please, the types of programs that USAID funds 

to provide access to reproductive health services that has the potential to prevent 350,000 women from dying during pregnancy or 

childbirth each year or prevent the horrific effects from unsafe 

childbirth, like obstetric fistula? 

Dr. SHAH. Thank you, Congressman. 

The family-planning program focuses on, as you are aware, voluntary family-planning partnerships with countries. We do not in 

any context support or encourage or in any way fund abortion. In 

fact, the opposite is the case. By having better birth spacing and 

by avoiding unintended consequences, especially for very young 

girls, ages 12 to 16, we see much, much, much reduced levels of 

abortions in the countries where we work. 

The other theme in this program has been transition to local 

management and control and funding responsibility for these efforts. Particularly in Latin America, we have seen over the last 12–

15 years. Many of these programs transition to their own domestic 

management and their own domestic revenue support. 

And the reason countries choose to do that is they see that as 

the number of births go down and the total fertility rate in countries goes down, that that lays the basis for economic growth, 

greater stability, greater ability to invest in children and their access to school and education that has been a core part of generating 

what we call in this field a demographic dividend, which kickstarts 

development activities. 

Mr. DEUTCH. Thanks, Dr. Shah. 

Dr. Shah, changing gears, I just would ask if you would provide 

some information to us, perhaps in writing, after the hearing. It 

has been reported that USAID provides assistance, possibly $2 million, to the Palestine Investment Fund, particularly to its loan 

guarantee program, for technical support is my understanding. 

If you could provide us with information on that funding, whether or not those reports are accurate, and the nature and scope of 

any such contributions, that would be helpful. 

Dr. SHAH. We can do that. 

Mr. DEUTCH. I appreciate it. 

[The information referred to follows:]

29


73455b-1.eps
30

Mr. DEUTCH. And, then, finally, like the chairman and my friend 

Congressman Wilson and other colleagues on this committee, many 

of our constituents were deeply affected by the devastating earthquake in Haiti that occurred now more than 2 years ago. 

And one common refrain that I hear because of my constituents 

is why the recovery process seems to be moving so slowly and, of 

course, the widespread allegations of corruption. The question I 

have, more specifically, is what is USAID doing to work with the 

Haitian Government to address the longstanding rampant corruption charges and provide support for civil society to establish proper government institutions, judicial processes, and uphold the rule 

of law. 

Dr. SHAH. Thank you. 

I think it is important on Haiti to mention that there has been 

very significant and critical progress. We have seen food production 

go up significantly. Corn yields are up 300-plus percent, rice yields 

60 to 70 percent, more, better nutrition outcomes. We have seen 

the effective control of the cholera epidemic, which, of course, we 

need to stay vigilant about. The access to clean water and safe 

sanitation has gone up compared to pre-earthquake levels. And, 

most importantly, we are seeing real private investment in an industrial park in the north that is creating 60,000 jobs and new 

Marriott Hotel in Port-au-Prince that will do something similar. 

So there are signs of real progress that I think we all looked to 

with real hope. There are also challenges. One of the challenges 

has been that it has taken some time for a peaceful transition in 

terms of democratic governance to lead to a fully effective government. And, as was noted earlier, the prime minister whom we were 

working very closely with on the assistance program and coordination just recently left his role after being placed in it quite late. 

And so we await progress there. 

We are in a constant and very deep, multi-level discussion with 

our Haitian partners. We support civil society and, in fact, have 

made a number of procurement changes to how we work to support 


73455b-2.eps
31

small businesses here to be part of the effort but also to support 

Haitian civil society, NGOs, and local businesses more directly. 

And, in fact, as we do larger procurements for different types of 

projects, we have built in very strict standards to ensure that there 

is an effective role for those types of organizations. 

On judicial reform, we have continued to partner with our Haitian counterparts. As you know, President Martelly is committed to 

effective judicial reform. And we could go into that in some detail, 

but that has been an important part of the dialogue because you 

are absolutely right that that lays the basis for the rule of law that 

allows all of those earlier gains in private investment and other 

things to really take hold and expand. 

Mr. DEUTCH. And, Madam Chairman, if I could just ask Dr. 

Shah to provide the committee with some of the details on those 

changes in the procurement process on the specific efforts with civil 

society and——

Chairman ROS-LEHTINEN. Thank you. 

Mr. DEUTCH [continuing]. Most specifically, in our community to 

make sure that our constituents understand——

Chairman ROS-LEHTINEN. Thank you so much. 

Mr. DEUTCH [continuing]. The opportunities they have as well. 

Chairman ROS-LEHTINEN. We will do that. Thank you. 

Judge Poe is recognized. 

Mr. POE. Dr. Shah, two issues I want to talk about, one that we 

have discussed before. That is American rice. As you know, historically American rice, the best trading partners, Iran, Iraq, and 

Cuba, those markets have sort of dried up over the years. And 

American rice farmers are looking for markets. I would just encourage you that when you have the opportunity in USAID to be involved in shipments of rice to somebody that American rice goes 

here. 

I would like to have unanimous consent to put in the record a 

letter, bipartisan letter, Madam Chair, to the Administrator of 

Trade of Iraq. 

Chairman ROS-LEHTINEN. Without objection. 

Mr. POE. And I will furnish you a copy of that, too. 

On the issue of USAID helping out other countries, there are 12 

departments, 25 agencies, 60 Federal offices that run foreign aid 

programs for the United States. Few have any sort of evaluation 

policy, let alone a standardized evaluation policy. 

MCC is the only one with a strong policy. USAID’s was weak and 

just issued last year. State Department was issued in February of 

this year and was even weaker. And the DOD doesn’t have anything in writing about evaluation of programs. 

Do you believe a common set of guidelines on measurable goals 

and monitoring of evaluation plans would be helpful? 

Dr. SHAH. Absolutely, sir. In fact, part of the President’s policy 

directive on development was calling for such an approach. I would 

note when I took office and reviewed our own performance here I 

thought we could do a lot better. I criticized our current approach 

at that time and said that it was a 2–2–2 approach with two consultants traveling for 2 weeks writing reports that two people read 

and didn’t really have the statistical validation that I think you 

32

need in this field to demonstrate whether or not your programs are 

working. 

We put in place a new evaluation policy to ensure every project 

we pursue has an independent third party evaluation done by very 

rigorous standards that include measuring data, collecting the 

right data, looking at a counterfactual, having a baseline. And the 

result of that will be that before the end of this year, we will post 

more than 250 independent validations with no success story glossiness to them at all straight to our Web site and put them in the 

public domain so that we and everybody else can learn about the 

results of our programs. 

I will just say that because we have been able to improve our 

evaluation, we know that, for example, the President’s malaria initiative has been reducing all-cause child mortality, under 5 mortality, by 25–30 percent in country after country in a very efficient 

way. 

We know that our Feed the Future programs are starting to really show results with agricultural productivity growth being anywhere from seven to eight times that of the global average. And we 

even are studying our more challenging democracy and governance 

and rights programs to try to understand which strategies, for instance, are most effective at helping kids escape situations of trafficking and modern-day slavery. And I believe this work and this 

area of endeavor ought to be treated like a science and the evaluation policy is intended to help move us in that direction. 

Mr. POE. Will you continue to work with us on H.R. 3159, cosponsored by the ranking member and myself, to try to have an 

overall evaluation policy of foreign aid? And, as alluded to by many 

members, Americans are frustrated by foreign aid for a lot of reasons, but one of the frustrations, they are writing checks and they 

don’t know where that money ends up in whose hands throughout 

the country. And I would suggest that a good place to start is with 

the $1.6 billion that we give to Egypt, especially during these 

times, that is co-sponsored by you and the State Department. 

Second question, I am glad to see that USAID is cutting funding 

in some programs and putting more money for monitoring and 

evaluation. Explain why you are doing this. 

Dr. SHAH. Well, you know, Representative, I certainly want to 

also thank you for your leadership on monitoring and evaluation. 

I think it is critical that we invest in collecting data so that we 

know what we are achieving. And we are trying to do that in every 

one of our efforts. In fact, we have had more than 60 percent of 

our Foreign Service is now with the agency within the last 5 years. 

And most of that is just attrition rehiring and our demographics. 

It has given us an opportunity to ask everyone to go through rigorous training on evaluation. We have set up an evaluation and 

monitoring service center in difficult environments, like Afghanistan. We have tripled our staff presence and gotten out more so 

that we can actually visit and see programs and ensure there is 

more accountability. And that allows us to report on results with 

much more credibility. 

So I appreciate the focus on that. I think it is worth investing 

in that activity because if you don’t know the results you are generating, you end up spending much, much, much more money before 

33

you kill programs or close things that don’t work and you end up 

under-investing in those things that have the potential to achieve 

dramatic results, like what we are seeing in reducing child death, 

for example. 

Mr. POE. Thank you, Madam Chair. Yield back. 

Chairman ROS-LEHTINEN. Thank you very much. 

Mr. Connolly is recognized. 

Mr. CONNOLLY. Thank you, Madam Chairman. 

Dr. Shah, if I could sort of pick up on one of those last points 

of my friend and colleague Ted Poe? I will use the word ‘‘efficacy.’’ 

It is not like foreign assistance is a new concept. We have been 

doing it for a long time. Why don’t we have a more robust explanation and advocacy for what we have been doing for half a century? 

I mean, by this point, surely, we have some metrics we can point 

to where we have done this, this, or this, or have learned from this 

failure. And, yes, it took 30 years, but agricultural productivity improved child mortality, dramatically improved. Fertility rates went 

down because of our intervention or not. I guess it has always puzzled me that there is not a much more assertive and aggressive attempt by our development assistance agency to propound that. 

And the down side of not doing that is there is very little constituency, as Judge Poe indicated, frankly, for foreign aid in America. 

Dr. SHAH. Well, thank you, Congressman. I agree with your basic 

premise that, in fact, when Americans see the value in the results 

that are generated through these efforts, they suggest that we 

should be spending up to 10 percent of our public budget in this 

space. And, as you know, we spend less than a tenth of that. 

The reality is we know what works at this point. And we know 

what the priorities ought to be. We have focused in our humanitarian work on building resilience to avoid humanitarian requirements in the first place. And we know that that can be very successful. 

We focus our efforts on creating what I spoke about earlier, demographic dividends for countries, because by managing the rate 

of childbirth and birth spacing and by supporting child survival to 

age five and ensuring kids get into school, we know that is the 

pathway out of poverty and that generates more results and outcomes than other activities. 

We are refocusing on and Ranking Member Berman mentioned 

in his opening statement——

Mr. CONNOLLY. My time is going to be limited. And I appreciate 

your response, but I am not making that point. I want to see a 

more robust documentation so that the narrative, the story is out 

there that is a good story. And I think we are missing an opportunity and have historically. And we are always on the defensive 

as a result. And I, for one, am kind of tired of it after 30 years. 

I would like to see us, frankly, on the attack. Here is what we 

have accomplished. And it seems to me it would be nice to have an 

AID Administrator who actually did that, instead of being here, not 

you, defensive, trying to, you know, support an unpopular program. 

Well, it is unpopular because we don’t tell the story of success. And 

if we got successes—and I know we do, some of them very draVerDate 0ct 09 2002 11:34 Aug 15, 2012 Jkt 000000 PO 00000 Frm 00037 Fmt 6633 Sfmt 6633 F:\WORK\FULL\032012\73455 HFA PsN: SHIRL
34

matic—let’s tell it and let’s document it. Let’s get it out there. And 

I would strongly urge you to do so as part of your legacy. 

Coordination and structure. One of the things that has concerned 

me—and I think I told you this the first time we met—is that, for 

good or ill, the diffusion of aid programs—you know, we get a Millennium Challenge, and we get an AIDS Africa Initiative, and we 

get other things being coordinated by other agencies. And, as a result, we don’t really have quite the lead development agency we 

should have in my opinion, where the focus is and we bring to bear 

the deployment of resources in a very structured and coordinated 

way. 

As the AID Administrator, of course, you are a loyal member of 

the administration, but can you share with us any of your reflections on how we might better structure ourselves to not only improve the lead role of AID but, more importantly, to make sure 

that the deployment of resources is an effective one? 

Dr. SHAH. Well, I appreciate that point as well, sir. I think that 

we have tried to do a number of things, such as our Partnership 

for Growth Effort, which helps to bring agencies together and ensures both coordination and USAID leadership to ensure that we 

are aligned in places where we are working together with, for example, MCC and Ghana and Tanzania and El Salvador, and that 

increasingly we are demanding policy reforms be made in the countries where we work so that we know that the gains we have will 

sustain and be more significant. And we will get more value for 

how we invest our dollars. 

I will just reflect on the fact that coming to the U.S. Government 

from a different type of institution, I am struck by the amount of 

energy that that coordination requires. And I am sure there are 

things that could be done in the future that would help make it a 

bit easier to do that. This is a very large and diffuse government, 

but it is led and populated in this administration, I think even in 

prior administrations, in this space by people who do really want 

to see those results. 

We all need to do a better job of communicating them, but we 

are committed to that outcome and would be happy to work with 

you on some ideas to make that coordination easy. 

Mr. CONNOLLY. Thank you. Thank you very much. 

Madam Chairman, my time is up. 

Chairman ROS-LEHTINEN. Thank you so much. 

Mr. Royce? 

Mr. ROYCE. Thank you, Madam Chair. 

Let me, if I could, Ambassador Shah, go to the issue of the agreement that the United States had with North Korea on February 

29th. The administration announced its plan to provide 240,000 

tons in food aid. And it took North Korea about 2 weeks before it 

broke that Leap Day agreement. So I understand the food aid issue 

now might be in abeyance, but I wanted to ask you about that in 

light of the ballistic missile launch that they are preparing and 

also reference the sort of growing skepticism that we have here in 

the House about the concept of food aid to North Korea given our 

experiences in the past, the hearings that we have had in which 

we have had testimony about the diversion of that food aid. 

35

And I had an amendment prohibiting food aid to North Korea 

that passed the House last year. There were some changes made 

in the Senate so that the final provision said that you could not 

offer food aid if it were diverted for unauthorized use. And I think 

our problem is that that is sort of the North Koreans’ specialty in 

this, is diverting it for unauthorized use. 

So I would ask, is this something the administration is still considering with respect to food aid? And how would you ensure that 

the law would not be overstepped? 

Dr. SHAH. Thank you. 

You know, it is something we are considering. We have been in, 

as has been made public, a series of negotiations to ensure that 

credible controls are in place and that in any potential effort, the 

focus is on saving kids’ lives, mitigating risks related to diversion. 

We saw in the past that when diversion took place, the program 

was shut down as a voluntary decision made by the United States 

and our agency. Going forward, the program we had been constructing was designed to get Plumpy Nut and other types of very 

specialized high nutrition feeding products for very vulnerable kids. 

Those are not the types of things that are as amenable to diversion. 

That is why we were not including things like rice or other largescale grain commodities, which are more vulnerable. 

Nevertheless, we are in an active discussion and would only go 

forward if certain conditions are in place with respect to our ability 

to ensure and protect against some of the risks you have identified. 

Mr. ROYCE. If I were to go back to 2008 and some of the provisions that that administration attempted to put into play, I remember the North Korean regime balked at the idea of having Koreanspeaking inspectors on the ground. 

The French NGOs have testified here in the past that one of the 

reasons they balk at that is because there is a real advantage to 

them being able to collect and sell whatever the product is on the 

food exchanges in Pyongyang for hard currency. And it is the ability to get their hands on that hard currency that gives us pause. 

I opened this session with my observations just about the quotes 

from a senior defector saying that it was pretty much the equivalent if we give them food aid because of their ability to convert it 

with giving them hard currency for their military program. And 

this seems to drive the attention of the North Koreans because this 

is where in the past we have heard testimony that they just lack 

the currency. In one case, we had a defector tell us they were trying to buy a piece of equipment they needed for their missile and 

on the black market. 

And this gyroscope, this Japanese-made gyroscope, was hard to 

come by, and it was expensive. But they had to shut down the 

whole missile line until they could get the hard currency. They 

don’t really have much that North Korea manufactures other than 

things done in a clandestine way, you know, meth, different drugs 

that they sell illegally on the world market, missile parts. But this 

was part of the modus operandi to get their hands on hard currency. 

So, again, I would just stress that, that this has been their past 

practice. They were very adept at it. And, having broken this last 

agreement in the span of 14 days, I think we are beginning to see 

36

here that this new regime in North Korea is not different. The 

grandson is not too different from the father and not too different 

from the grandfather in terms of the way we are played. 

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

Mr. Sherman is recognized. 

Mr. SHERMAN. Thank you. 

Administrator Shah, we are almost at the end. Take a breath. Almost everything of a broad nature that could be said has already 

been said. So I am going to talk about a couple of very narrow topics, confident that my colleagues have not brought them up, namely 

the regions of Javakheti and Sindh. Before I do, let me express the 

obvious. And that is that the needs in the world for U.S. development will always exceed the resources available. 

And so the constraint is not a lack of good donor opportunities. 

The constraint is a lack of public support for foreign aid, which is 

the most controversial part of our budget. 

There is very substantial support in America for aid to Armenia. 

And I hope that your budgetary request will be greater in the future and will at least start with the congressional appropriations 

of the prior year and work your way up from there, as you do in 

most of the rest of your budget. 

Now, as to the Javakheti region of the Republic of Georgia, your 

request for Georgia’s total is $68.7 million. The Georgian Ambassador publicly stated that—because this is something that we have 

had to review with the Georgian Ambassador. And that is, should 

the United States target its aid at this particular region in southern Georgia? And would the Georgians take offense that you are 

going with one region, instead of another? 

So I am glad to bring your attention that the Embassy of Georgia 

stated that in support of our Government’s material commitment 

to the economic development for our citizens in the SamtskeJavakheti—I have no idea if I pronounced that correctly—region 

and throughout our republic looks forward to working with our 

friends in the U.S. Congress and the administration and with all 

American civil society stakeholders, including, of course, the Armenian American community,—and here is the key phrase—in encouraging the targeting of U.S. assistance to meet SamtskeJavakheti’s urgent need for job creation, infrastructure, technical, 

and humanitarian needs. 

Also in the case of Georgia, you are dealing with a republic with 

many regions with different ethnicities. Some have a claim that 

Russia has exploited these differences in Abkhazia and Ossetia. 

And here you have an opportunity to help this predominantly Armenian area of Georgia, not in defiance of Tblisi but, rather, the 

economic aid that will help make sure that this region is a source 

of stability and prosperity for the overall Republic of Georgia. And 

I hope that you will have a robust program in the Javakheti region. 

Second is the area of Sindh. You have requested $2.4 billion. 

Sindh is, as you know, in southern Pakistan, an area influenced by 

a moderate form of Islam and Sufism. This is an area that was particularly hit by the floods. And I would hope that, rather than just 

rely on Islamabad to set our priorities, we would make the development and recovery of Sindh an important priority. 

37

I wonder if you could respond to that or whether you would prefer to just respond for the record? 

Dr. SHAH. I may briefly address those. We appreciate your 

points. On Georgia and specifically the Samtske-Javakheti region 

that you were referring to, we have been working with specific programs that work on agricultural modernization, social development, maternal health, and certain health and education infrastructure efforts, as well as support for civil society groups. 

We have increasingly tried to do that work in consultation with 

Armenian American communities and with an eye toward launching specific public-private partnerships with those communities. So 

if there are partner entities that you are aware that have interest 

in that region, we would welcome being put in touch with them and 

would seek an opportunity to have that dialogue. 

Mr. SHERMAN. I will make sure to put them in touch with you. 

Thank you. 

Dr. SHAH. And, with respect to Sindh, I would just note overall 

the budget for Pakistan for USAID programmatic efforts is $900-

and-some million. So that $2.6 billion, I’m not exactly sure what 

that refers to. 

And we have tried to focus the programs there. That is obviously 

a very complex working environment. We have, nevertheless, tried 

to focus on delivering concrete results. For example, in energy, we 

put 900 megawatts of energy on the grid as a result of our investments. In education, we are able to reach a number of kids and get 

them into educational opportunities that are more secular and 

broader. 

In the context of that particular region, our response to the 

floods and our efforts to distribute wheat seed in response to the 

floods really did help save the winter wheat harvest and improve 

the overall balance of payment situation for a country where that 

is critical to their own stability and, therefore, critical to our national security. So I appreciate your raising that. 

We constantly seek consultation in that program but have tried 

to be results-oriented, even in a very difficult environment. 

Mr. SHERMAN. I will try to provide you with specific information 

there. Thank you very much. 

Dr. SHAH. Thank you. 

Mr. JOHNSON [presiding]. Thank you. 

The Chair recognizes Mr. Fortenberry. 

Mr. FORTENBERRY. Thank you, Mr. Chair. 

Administrator Shah, it is a pleasure to see you again. First, at 

the outset, let me say I do really deeply appreciate your professionalism and your dedication, your innovation, as well as your 

heartfelt concern for the world’s most vulnerable, which has truly 

marked your tenure at USAID. 

I also want to thank you for taking time to address the concerns 

about the potential stewardship of U.S. foreign assistance dollars, 

particularly given the fiscal situation that continues to alarm many 

Americans as well as—and it weighs heavily upon us here. 

I do frequently hear from constituents who express serious concerns about the disposition of their taxpayer dollars, particularly 

those going to foreign aid, even—and I emphasize this—even as 

38

they take rightful pride in knowing that the United States is the 

world’s leading provider of meaningful humanitarian outreach. 

I am also glad that you mentioned our colleague Don Payne. His 

life and dedicated efforts on behalf of the poor we recently honored. 

Mr. Payne and I were co-chairs of the Malaria Caucus. And we 

were—and we will continue to do so, but we were attempting to 

make further bipartisan progress on this important fight against 

malaria, which was a preventable disease but harmed so many. 

I appreciate you raising this testimony, in your written testimony. I appreciate you raising the issue. But I would like you to 

address something that is of concern to me. Address the issue of 

effectively balancing our resources between the President’s Malaria 

Initiative and all other multilateral malaria prevention efforts. 

It seems to me that an outstanding review of the President’s Malaria Initiative would support a relatively stronger weighting of 

this initiative relative to other multilateral activities that are less 

transparent or they are difficult to basically monitor for accountability and results. 

Let me give you an example. In your budget, there are substantial increases for population control initiatives and the Global 

Health Initiative, as well as substantial increases in the Global 

Fund, which the United States does not fully control. This suggests 

an ideological priority there that is inconsistent with our efforts to 

monitor costs while meeting basic humanitarian goals that we all 

agree upon. So I would like you to address that concern, please. 

Dr. SHAH. Thank you. Thank you, Congressman. Thank you for 

your specific leadership in this area and for helping us find opportunities, such as with the University of Nebraska, to essentially 

bring more excellence to areas of work, like water and stewardship 

in that space. 

I also appreciate your mention of the Malaria Caucus, which has 

done very important work to establish support for this program. As 

you noted, it has been externally evaluated and shown to be incredibly effective. 

Those evaluations also discussed a more recent evaluation by 

Boston University, which looked at the processes of the PMI, also 

found that it was an effective venue for bringing the interagency 

together and coordinating U.S. Government efforts. And it was effective at supporting partners like the Global Fund for AIDS to be 

in malaria and the World Bank and helping them do their work 

more efficiently. So when commodities get stocked out, we were 

able to step in and solve supply chain issues a number of times in 

order to keep malaria control programs focused on results and effectiveness. 

It is really in that context of building a stronger partnership between PMI and the multilaterals explicitly for the purpose of driving more of other people’s resources to what we think of as 

prioritized areas where we can get results, like malaria, that we 

have proposed the budget the way we have proposed it. 

And, as you know, the Global Fund had to cancel round 11 of its 

funding. And that was intended to be the malaria round. In fact, 

countries had been encouraged to develop malaria plans. PMI had 

worked with countries to do that in a way that was coordinated 

with our own efforts. And we would have seen for every dollar we 

39

spent $3 of other countries’ resources going toward support for 

those plans. 

The same is true at the World Bank, where we worked to create 

World Bank funding plans in countries where we work so we can 

get more partnership. 

If it were up to me, you know, I would love to see larger budgets 

across the board for things like malaria that we know save kids’ 

lives. We made a number of very difficult trade-offs in order to 

present a budget that we think meets our fiscal constraints and 

prioritizes all of our potential efforts to get others on board with 

our task of ending child deaths from malaria, which is an achievable task. 

Mr. FORTENBERRY. Thank you. 

Let me insert this, though. But since we have prioritized raising 

funds for the Global Health Initiative as well as the Global Fund 

itself, that suggests that we are prioritizing population control initiatives, even though some of the increase in funding may be leverage for PMI and other malaria control outcomes. Is that true? 

Dr. SHAH. The only thing I would take issue with is the Global 

Health Initiative overall actually experiences a small, very modest 

but small, aggregate decrease in funding. And so it is not that, but 

there is a significant increase in order to meet our 4-year pledge 

that was made to the Global Fund. And we think it is a critical 

time to make that commitment and a critical time to keep the global consensus that has created an instrument that has brought in 

billions of other people’s dollars to support global health. 

Global health is an area that, without funding from other countries, the U.S. will end up taking a bigger and bigger share of global funding. And that won’t be a pathway to sustainability or success. So we are very focused on crowding in other donors’ efforts. 

Mr. FORTENBERRY. My time is done, but I may need to write you 

further on what type of balance there is in terms of increasing population control measures versus other widely agreed upon humanitarian controls. We need to discuss that further. 

Dr. SHAH. Absolutely. Thank you. 

Mr. JOHNSON. I thank the gentleman for yielding back. 

Administrator Shah, with a $10 trillion economy, we need to 

start treating China like a developed country. That means serious 

examination of the aid that we give to China. For instance, there 

is no reason in my opinion that we should be giving China money 

through USAID to become energy-efficient and compete more aggressively and effectively against U.S. businesses to strip jobs from 

American workers here at home. 

The USAID budget states that it plans to expand efforts in innovation, science and technology, and evaluation with regards to climate change, which the significant increase in funding for the 

Global Climate Change Initiative indicates. Previous funds have 

been allocated to China to help develop its clean energy sector, carbon evaluations, technology innovation, and educational awareness. 

So specifically within USAID’s DA budget, how much will be directed toward programs in China, especially in terms of clean energy and economic growth education programs? 

Dr. SHAH. Thank you, sir, for the question. 

40

The specific answer to your question is with respect to the Fiscal Year 2013 budget request, zero. The budget request is $6.5 million 

for China. And of that, the great majority is support for communities in Tibet and support for those Tibetan civil society groups 

and organizations. 

There is a small amount of support to continue a partnership between the U.S., its Centers for Disease Control, and their Chinese 

counterpart that originally grew out of the SARS epidemic and is 

now focused on a broader set of activities, including HIV/AIDS, and 

ensuring that communicable disease threats doesn’t spill out of 

China. But that is a small technical assistance effort. And the rest 

is focused on communities in Tibet. 

Mr. JOHNSON. So you are saying that none of the USAID’s DA 

budget in the 2013 budget will go toward green energy, clean energy initiatives, and economic growth education programs? 

Dr. SHAH. Correct. That is right. 

Mr. JOHNSON. I am glad that we got that cut off because that 

was one that I was very concerned about. 

I see no further members here to ask questions. With that, Administrator Shah, thank you very much for being before us today, 

for answering our questions. With that, this committee hearing will 

be adjourned. 

[Whereupon, at 12:02 p.m., the committee was adjourned.] 

(41)

A P P E N D I X 

MATERIAL SUBMITTED FOR THE HEARING RECORD

42

f


73455n.eps
43


73455m-1.eps
44

f


73455m-2.eps
45


73455c-1.eps
46


73455c-2.eps
47


73455c-3.eps
48


73455c-4.eps
49


73455c-5.eps
50


73455c-6.eps
51


73455c-7.eps
52


73455c-8.eps
53


73455c-9.eps
54


73455c-10.eps
55


73455c-11.eps
56


73455c-12.eps
57


73455c-13.eps
58


73455c-14.eps
59


73455c-15.eps
60


73455c-16.eps
61


73455c-17.eps
62


73455c-18.eps
63


73455c-19.eps
64


73455c-20.eps
65


73455c-21.eps
66


73455c-22.eps
67


73455c-23.eps
68


73455c-24.eps
69


73455c-25.eps
70


73455c-26.eps
71


73455c-27.eps
72


73455c-28.eps
73


73455c-29.eps
74


73455c-30.eps
75


73455c-31.eps
76


73455c-32.eps
77


73455c-33.eps
78


73455c-34.eps
79


73455c-35.eps
80


73455c-36.eps
81


73455c-37.eps
82


73455c-38.eps
83


73455c-39.eps
84


73455c-40.eps
85


73455c-41.eps
86


73455c-42.eps
87


73455c-43.eps
88


73455c-44.eps
89


73455c-45.eps
90


73455c-46.eps
91


73455c-47.eps
92


73455c-48.eps
93


73455c-49.eps
94


73455c-50.eps
95


73455c-51.eps
96


73455c-52.eps
97


73455c-53.eps
98


73455c-54.eps
99


73455c-55.eps
100


73455c-56.eps
101


73455c-57.eps
102


73455c-58.eps
103


73455c-59.eps
104


73455c-60.eps
105


73455c-61.eps
106


73455c-62.eps
107


73455c-63.eps
108


73455c-64.eps
109


73455c-65.eps
110


73455c-66.eps
111


73455c-67.eps
112


73455c-68.eps
113


73455c-69.eps
114


73455c-70.eps
115


73455c-71.eps
116


73455c-72.eps
117


73455c-73.eps
118

f


73455c-74.eps
119


73455d-1.eps
120


73455d-2.eps
121


73455d-3.eps
122


73455d-4.eps
123


73455d-5.eps
124


73455d-6.eps
125

f


73455d-7.eps
126


73455e-1.eps
127


73455e-2.eps
128

f


73455e-3.eps
129


73455f-1.eps
130

f


73455f-2.eps
131


73455g-1.eps
132


73455g-2.eps
133


73455g-3.eps
134


73455g-4.eps
135

f


73455g-5.eps
136


73455h-1.eps
137


73455h-2.eps
138


73455h-3.eps
139


73455h-4.eps
140

f


73455h-5.eps
141


73455i-1.eps
142


73455i-2.eps
143

f


73455i-3.eps
144

MATERIAL SUBMITTED FOR THE RECORD BY THE HONORABLE TED POE, A

REPRESENTATIVE IN CONGRESS FROM THE STATE OF TEXAS


73455j-1.eps
145

Æ


73455j-2.eps