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23–757 PDF 2005

S. HRG. 109–141

FOREIGN ASSISTANCE OVERSIGHT

HEARING

BEFORE THE

COMMITTEE ON FOREIGN RELATIONS

UNITED STATES SENATE

ONE HUNDRED NINETH CONGRESS

FIRST SESSION

MARCH 2, 2005

Printed for the use of the Committee on Foreign Relations

(

Available via the World Wide Web: http://www.gpoaccess.gov/congress/index.html

COMMITTEE ON FOREIGN RELATIONS

RICHARD G. LUGAR, Indiana, Chairman

CHUCK HAGEL, Nebraska

LINCOLN CHAFEE, Rhode Island

GEORGE ALLEN, Virginia

NORM COLEMAN, Minnesota

GEORGE V. VOINOVICH, Ohio

LAMAR ALEXANDER, Tennessee

JOHN E. SUNUNU, New Hampshire

LISA MURKOWSKI, Alaska

MEL MARTINEZ, Florida

JOSEPH R. BIDEN, JR., Delaware

PAUL S. SARBANES, Maryland

CHRISTOPHER J. DODD, Connecticut

JOHN F. KERRY, Massachusetts

RUSSELL D. FEINGOLD, Wisconsin

BARBARA BOXER, California

BILL NELSON, Florida

BARACK OBAMA, Illinois

KENNETH A. MYERS, Jr., Staff Director

ANTONY J. BLINKEN, Democratic Staff Director

(II)

CONTENTS

Page

Camp, Donald, Deputy Assistant Secretary, Bureau of South Asian Affairs,

Department of State, Washington, DC ............................................................... 1

Prepared statement .......................................................................................... 3

Response to question submitted by Senator Biden ........................................ 159

Chafee, Hon. Lincoln, U.S. Senator from Rhode Island, opening statement ...... 1

Feingold, Hon. Russell D., U.S. Senator from Wisconsin ..................................... 73

Kunder, Hon. James R., Assistant Administrator for Asia and the Near East,

U.S. Agency for International Development, Washington, DC ........................ 8

Prepared statement .......................................................................................... 10

Martinez, Hon. Mel, U.S. Senator from Florida, opening statement .................. 53

Pierson, Hon. Lloyd O., Assistant Administrator for Africa, U.S. Agency for

International Development, Washington, DC .................................................... 63

Prepared statement .......................................................................................... 65

Response to question submitted by Senator Feingold ................................... 165

Responses to questions submitted by Senator Obama .................................. 166

Ranneberger, Michael E., Principal Deputy Assistant Secretary, Bureau of

African Affairs, Department of State, Washington, DC .................................... 55

Prepared statement .......................................................................................... 59

Response to question submitted by Senator Chafee ...................................... 160

Responses to questions submitted by Senator Feingold ................................ 161

Responses to questions submitted by Senator Obama .................................. 167

Satterfield, Hon. David M., Acting Assistant Secretary, Bureau of Near Eastern Affairs, Department of State, Washington, DC .......................................... 33

Prepared statement .......................................................................................... 33

AFTERNOON SESSION

Allen, Hon. George, U.S. Senator from Virginia ................................................... 126

Bradtke, Robert A., Principal Deputy Assistant Secretary, Bureau of Europe

and Eurasia Affairs, Department of State, Washington, DC ........................... 128

Prepared statement .......................................................................................... 131

Coleman, Hon. Norm, U.S. Senator from Minnesota, opening statement .......... 79

Franco, Hon. Adolfo, Assistant Administrator for Latin America and the

Caribbean, U.S. Agency for International Development, Washington, DC ..... 89

Prepared statement .......................................................................................... 92

Response to question submitted by Senator Coleman ................................... 173

Hill, Hon. Kent R., Assistant Administrator, Bureau for Europe and Eurasia,

U.S. Agency for International Development, Washington, DC ........................ 135

Prepared statement .......................................................................................... 138

Kunder, Hon. James R., Assistant Administrator for Asia and the Near East,

U.S. Agency for International Development, Washington, DC ........................ 116

Martinez, Hon. Mel, U.S. Senator from Florida .................................................... 98

Murkowski, Hon. Lisa, U.S. Senator from Alaska ................................................ 109

Revere, Evans, Acting Assistant Secretary, Bureau of East Asia and Pacific

Affairs, Department of State, Washington, DC ................................................. 110

Prepared statement .......................................................................................... 112

Noriega, Roger F., Assistant Secretary, Bureau of Western Hemisphere Affairs, Department of State, Washington, DC ..................................................... 83

Prepared statement .......................................................................................... 85

Responses to questions submitted by Senator Lugar .................................... 168

Responses to questions submitted by Senator Coleman ............................... 170

Response to question submitted by Senator Nelson ...................................... 175

(III)

(1)

FOREIGN ASSISTANCE OVERSIGHT

WEDNESDAY, MARCH 2, 2005

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

The committee met, pursuant to notice, at 9:08 a.m., in room

SD–419, Dirksen Senate Office Building, Hon. Lincoln Chafee, presiding.

Present: Senators Chafee, Boxer, Martinez, Nelson, Obama, and

Feingold.

OPENING STATEMENT OF HON. LINCOLN CHAFEE, U.S.

SENATOR FROM RHODE ISLAND

Senator CHAFEE. The hearing will commence of the Foreign Relations Committee and the South Asian Subcommittee. Welcome,

gentlemen.

I would like to start with Mr. Camp. Is that appropriate?

STATEMENT OF DONALD CAMP, DEPUTY ASSISTANT SECRETARY, BUREAU OF SOUTH ASIAN AFFAIRS, DEPARTMENT

OF STATE, WASHINGTON, DC

Mr. CAMP. Thank you. Thank you, Mr. Chairman and Senator

Boxer.

First of all, I’d like to express the regrets of Assistant Secretary

Rocca, that she could not be here today. She is ill; sent me in her

stead. She sends her regrets and her best wishes.

In many parts of South Asia, there has been increased momentum for positive change. Our productive relationships with India

and Pakistan continue to improve, and significant progress is being

made in rebuilding Afghanistan and lowering tensions between

India and Pakistan.

Not all the news is good, unfortunately. In particular, we are

deeply troubled by the political crisis in Nepal, where the Maoist

threat continues to grow. In Sri Lanka, the cease-fire continues to

hold, but negotiations remain stalled. Problems with corruption,

lawlessness, governance, and political violence plague Bangladesh.

Our fiscal year 2006 foreign operations assistance requested for

South Asia will be used to support our policy in the region and to

maintain momentum in our programs for progress and meet these

challenges.

I’d like to begin with Afghanistan. Last year, Afghans adopted a

moderate democratic constitution and successfully conducted their

first multiparty Presidential election. Afghanistan’s economy has

grown by 50 percent in 3 years. United States assistance is helping

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the Afghan people win the peace, preventing Afghanistan from ever

again becoming a haven for terrorists.

Much remains to be done, and we are committed to finishing the

task. Nine hundred and fifty-six million dollars requested in fiscal

year 2006 foreign-ops assistance for Afghanistan will sustain critical ongoing and accelerated stabilization programs, including $1.98

billion in urgent foreign-ops programs included in our 2005 supplemental funding request.

Holding parliamentary elections in 2005 is one of the primary political tasks for President Karzai’s administration. We will support

this process and, at the same time, help the government build and

strengthen democratic institutions. Economic support funds requested for budget assistance will support government operations

as revenue generation and collection capacity are strengthened. As

DOD continues training of an Afghan National Army, our ESF assistance will sustain accelerated programs for disarmament, demobilization, and reintegration, and support a multifaceted counternarcotics strategy.

In India, our strong bilateral partnership includes security and

economic ties and working together to address regional problems,

such as the tsunami disaster and the crisis in Nepal. Our next

steps in strategic partnership expands cooperation on civilian nuclear, civilian space, and high-tech trade development, provides for

expanded dialog on missile defense and for enhanced nonproliferation export regimes in India. Military-to-military cooperation is

greatly increased. United States assistance programs are helping

India to complete financial, trade, energy, water, and agricultural

reforms, to improve economic stability and reduce poverty. Our programs also promote better access to education, justice, healthcare,

and services by women and vulnerable groups.

Pakistan. Though our long-term commitment—through our longterm commitment to Pakistan, we support its efforts to combat extremism and become a moderate, prosperous, democratic state. We

seek a Pakistan that is secure and at peace with all its neighbors,

a voice for tolerance and moderation in the Islamic world, living up

to its great economic potential, and serving as an inspiring model

for the broader Middle East and South Asia region. Our relations

with Pakistan have grown steadily closer and more productive. It

is a key ally against terrorism. Our $698 million fiscal year 2006

request for Pakistan contains $300 million in FMF and $300 million in ESF for the second of the 5-year $3 billion Presidential commitment.

A return to full democracy in Pakistan is central to long-term

stability and a primary objective of our policy. United States democracy programs support this goal, including by helping Pakistanis prepare themselves to participate in successful 2007 national

elections that are free and fair.

Bangladesh. Bangladesh has built a functioning, albeit challenged, democracy that has achieved important economic growth.

Nevertheless, significant problems with corruption, increase in violent political attacks, poor governance, and the opposition’s general

strikes threaten democratic stability and impede economic growth.

United States development and democracy programs in Bangladesh

seek to address the challenges that foster extremism.

3

Nepal. The United States has a strong interest in helping the

Nepalese overcome the serious political problems they face. Unity

among Nepal’s legitimate political forces is key to assuring that a

brutal Maoist insurgency does not seize power. We see King

Gyanendra’s February 1 dismissal of the government and declaration of a state of emergency and detention of politicians and dissidents as a serious setback for Nepalese democracy that risks

eroding even further the government’s ability to resist the insurgency. We told the king that he needs to move quickly to reinstate

and protect civil and human rights, release those detained under

the state of emergency, and begin a dialog with the political parties. We have made it clear to the government that, in the current

political situation, our security assistance is at risk. The overwhelming preponderance of the assistance that the United States

is providing to Nepal is devoted to the political and economic development the country so desperately needs.

Sri Lanka. The United States has been in the forefront of the effort to support Sri Lankan tsunami relief efforts, and will remain

engaged in reconstruction. We are committed to help resolve the

conflict between the government and the Liberation Tigers of Tamil

Eelam. We support Norway’s facilitation of a peace settlement, and

remain prepared, along with other donors, to help Sri Lanka address urgent post-conflict reconstruction needs. Our nationwide development and health programs support the government’s economic

growth and antipoverty efforts.

In concluding, let me say just a word about our public diplomacy

and regional programs. Our public diplomacy programs remain a

key part of the war on terrorism in South Asia. Through peopleto-people programs, we will continue to promote shared values on

education and democratic reforms, regional conflict resolution, and

strong civil societies. We are also addressing, in a regional context,

many of the issues of concern to us in South Asia, such as trafficking in persons, fighting deadly diseases like HIV/AIDS, ending

corruption, and improving the status of women and girls.

Finally, achieving United States goals in South Asia remains

crucial to our own national security and to a stable future for the

region. While there has been much progress over the past few

years, continued success depends on adequate resources to manage

our policy and support our foreign assistance programs.

Thank you very much for your support. And, after Mr. Kunder

speaks, I’d be very happy to take questions.

[The prepared statement of Mr. Camp follows:]

PREPARED STATEMENT OF DEPUTY ASSISTANT SECRETARY DONALD CAMP, BUREAU OF

SOUTH ASIAN AFFAIRS, DEPARTMENT OF STATE, WASHINGTON, DC

MOMENTUM FOR PROGRESS IN SOUTH ASIA

Mr. Chairman and members of the committee, thank you for inviting me to meet

with you today to discuss United States policy interests in and our program request

for South Asia. In many parts of the region, I am happy to report, there has been

increased momentum for positive change. Our relations with India and Pakistan

continue to improve, and significant progress is being made in rebuilding Afghanistan and lowering tensions between India and Pakistan. Although Sri Lanka was

devastated by the Indian Ocean tsunami, there is hope that cooperation on relief

between the government and the Liberation Tigers of Tamil Eelam may increase

trust between the two sides. Not all the news is good, unfortunately. In particular,

we are deeply troubled by developments in Nepal, where the King dismissed the

4

government and imposed a state of emergency while the Maoist threat continues to

grow. Although the cease-fire continues to hold in Sri Lanka, negotiations remain

stalled. Problems with corruption, lawlessness, governance and political violence

plague Bangladesh.

We will have, during the next few years, a crucial opportunity to assist South

Asia toward a future that is stable and free from terrorism, conflict and proliferation; prosperous and economically integrated; governed through accountable democratic institutions; and a responsible voice for moderation in the Muslim world. Our

fiscal year 2006 foreign assistance requested for South Asia will be used to support

our policy in the region and to maintain momentum in our programs for progress

and to meet these challenges.

Afghanistan

In January of last year, Afghans adopted a moderate, democratic constitution, and

in October successfully conducted their first multiparty Presidential election. With

the rebuilding of major roads, schools, health facilities, and other infrastructure, the

country is being physically knit back together, which in turn will assist economic

and political integration. The IMF estimates that Afghanistan’s economy has grown

by 50 percent in 3 years. NATO agreed to lead the International Security Assistance

Force, as a new United States-trained Afghan Army and police are gathering

strength, and civil-military Provincial Reconstruction Teams are extending security

and development in the provinces.

United States assistance is helping the Afghan people win the peace in their country. By doing so, we prevent Afghanistan from ever again becoming a haven for terrorists. Much remains to be done and we are committed to helping the Afghans finish the task. We are requesting $956.4 million in FY 2006 Foreign Operations assistance for Afghanistan to sustain accelerated programs to stabilize the country

(the request for Afghanistan is $1.1 billion including DOD and DEA counternarcotics programs, and State and USAID operations), to follow $1.986 billion in foreign operations funding in the FY 2005 supplemental request. Between fiscal years

2001 and 2005 Congress has appropriated over $6.2 billion for Afghanistan as an

investment in a more democratic and prosperous future and a more secure future

for Americans.

Holding legitimate parliamentary elections in 2005 is one of the primary political

tasks for President Karzai’s administration. We will support this process and at the

same time help the government build and strengthen democratic political institutions able to peacefully channel the intense competition for power and resources

among Afghanistan’s rival groups. U.S. and other donors’ assistance to the 2005

election process will include civic education and training for newly elected officials.

A portion of the FY 2006 Economic Support Funds (ESF) will assist local elections,

develop effective public education, and strengthen the women’s ministry and centers

throughout the country, as well as the judicial infrastructure, the Human Rights

Commission, civil society groups, and the independent media.

ESF-funded budget assistance will support government operations as revenue

generation is strengthened. ESF-funded civil-military Provincial Reconstruction

Teams established by the United States and our allies in Afghanistan have increased stability and development in Afghanistan’s provinces, helping link central

and local governments with communities. The number of PRTs has expanded to 19

today, with two more to be established in coming months. Expanding security and

the government’s control of the territory is an ongoing challenge to Afghanistan’s

progress. As DOD continues training of the Afghan National Army, our FY 2006

ESF assistance will also sustain accelerated programs for disarmament, demobilization, and economic reintegration of militia and support a multifaceted counternarcotics strategy. FY 2006 International Narcotics Control and Law Enforcement

(INCLE) funds will continue to fund training for border police, national police, and

a highway patrol, as well as institutional reform at the Ministry of the Interior.

Agriculture and the rural economy provide a way of life for about 70 percent of

the Afghan population. In FY 2006, Transition Initiatives (TI) funding will be used

to help farmers re-establish production, become more profitable and efficient, improve food security, provide employment for more Afghans, and rehabilitate water

systems. Credit programs for operating and investment capital will support production and processing activities. TI funds, along with ESF, will also be aimed at increasing access to primary education through community-based school construction,

textbook production, classroom-based teacher training, and primary school equivalency/accelerated learning.

Afghanistan’s counternarcotics program will also be supported by FY 2006 INCLE

funds, which will continue to fund crop eradication, public diplomacy, and demand

reduction programs. ESF funds will also continue to play an important role in supVerDate 11-MAY-2000 13:57 Oct 05, 2005 Jkt 000000 PO 00000 Frm 00008 Fmt 6633 Sfmt 6621 963433.SEN SFORELA1 PsN: SFORELA1
5

porting government efforts to end poppy cultivation and narcotics trafficking

through alternative development programs.

Economic reconstruction and development and rebuilding of infrastructure continue to be key factors in ensuring stability and a ‘‘democracy dividend’’ for the Afghan people. Requested FY 2006 ESF continue assistance for restructuring the

banking system, strengthening fiscal management capacity and revenue generation,

and spurring private enterprise and trade initiatives. We must sustain programs for

employment, agriculture (the livelihood of most Afghans), health, and education.

Completion of the Kabul-Kandahar-Herat ring road will extend central government

authority, increase trade, and continue to knit the country back together. We have

vaccinated millions of children, and constructed or rehabilitated scores of schools,

clinics, and hospitals.

A significant reconstruction dividend is the steady decline in humanitarian needs.

The 3 million refugees who have returned and the millions saved from famine and

cold are now contributing to the Afghan economic boom. But humanitarian problems

have not disappeared, and we cannot turn our backs on the remaining Afghans who

are destitute. We will continue to support remaining Afghan refugees in Pakistan

and Iran, internally displaced persons, and returnees. U.S. and donor demining assistance will enable continued safe returns and facilitate economic reconstruction.

India

United States relations with India, the preeminent power in the region, continue

to improve and expand. As India increasingly fills a global leadership role, we must

build strong bilateral partnership. Our partnership is growing across multiple

fronts, including our security and economic ties and we are working together to

solve regional problems. India, along with the United States, was a charter member

of the group of countries formed to coordinate tsunami relief, and we are consulting

closely with the Indians on how to help the Nepalese resolve their political crisis.

Through our Next Steps in Strategic Partnership, we are working to expand cooperation on civilian nuclear, civilian space and high technology trade development

as well as an expanded dialog on missile defense and enhanced nonproliferation export regimes in India. DOD’s bilateral Defense Planning Group, joint exercises, and

military exchanges have greatly increased military-to-military cooperation. A High

Technology Cooperation Group is advancing trade and investment in this vital area

where our two countries have complementary strengths.

United States assistance programs are helping India to complete financial, trade

energy, water, and agriculture reforms to improve economic stability and reduce

poverty. Our programs also promote better access to education, justice, and services

by women and vulnerable groups. Our health programs support the prevention of

HIV/AIDS, tuberculosis and other diseases, and increased child survival—issues

also addressed though a bilateral Global Issues Forum whose concerns range from

trafficking in persons and human rights abuses to environment, science, and health.

Pakistan

In the Intelligence Reform and Terrorism Prevention Act, Congress adopted the

9/11 Commission’s recommendation that the United States make a long-term commitment to the future of Pakistan. We see this commitment—which requires that

we support Pakistan’s own efforts to combat extremism and transform itself into a

moderate, prosperous, democratic state—as a pillar of our strategy to win the war

on terrorism. We seek a Pakistan that is secure and at peace with all its neighbors,

a voice for tolerance and moderation in the Islamic world, a country that lives up

to its great economic potential and can serve as an inspiring model for the broader

Middle East and South Asia region.

United States relations with Pakistan have grown steadily closer and more productive. As a key ally against terrorism, throughout 2004 Pakistan mounted successful operations against terrorists and their supporters near the border with Afghanistan and as well as in the country’s urban areas. Hundreds of terrorist

operatives have been captured in Pakistan since September 11, 2001. In recent

months, terrorists linked to Daniel Pearl’s murder, the 1998 Embassy Dar Es Salaam bombing, the 2002 Consulate Karachi attack, the 2004 Afghanistan election

worker kidnappings, and assassination attempts against President Musharraf and

Pakistani Prime Minister Aziz have been arrested by Pakistani law enforcement or

killed in police shoot-outs. Last year the A.Q. Khan proliferation network was unmasked and we continue to work closely with Pakistan to ensure that this global

security threat can never be reconstituted.

Our $698.3 million FY 2006 request for Pakistan contains $300 million in Foreign

Military Financing funds and $300 million in Economic Support Funds for the second of the 5-year, $3 billion Presidential commitment. This reflects the critical imVerDate 11-MAY-2000 13:57 Oct 05, 2005 Jkt 000000 PO 00000 Frm 00009 Fmt 6633 Sfmt 6621 963433.SEN SFORELA1 PsN: SFORELA1
6

portance of both aspects of the war on terror. As we facilitate the capture of alQaida and Taliban remnants and strengthen our military ties through the FMF program, we will help tackle the conditions that terrorists seek to exploit providing up

to $200 million in ESF for macroeconomic stabilization and growth, plus at least

$100 million in ESF to support social sector programs.

A return to full democracy in Pakistan is central to long-term stability and a primary objective of our Pakistan policy. U.S. democracy programs and exchanges are

assisting the development of accountable, responsive democratic institutions and

practices, including effective legislatures and local councils that respond to citizens

and that play a positive role in governance. Our programs will also support muchneeded political party reform, the development of an independent media that provides balanced information, and effective civil society that advocates for the rights

of those most vulnerable, such as women and religious minorities. All of these programs will be crucial to helping Pakistanis prepare themselves to participate in successful 2007 national elections that are free and fair.

Pakistan’s economy has moved from crisis to stabilization and now to significant

growth. The government’s ongoing pursuit of structural reform, prudent economic

policy initiatives, and effective macroeconomic management has impressed the IMF

and donor community. We are assisting this positive momentum with ESF, but also

continue to support the grassroots economic development and health programs that

are just as important, and much more visible to ordinary Pakistanis, through

USAID’s programs.

Pakistan recognizes the critical need for, and is pursuing, education reform, including for madrassahs. Pakistan’s need for improvements in education is profound.

Beyond the very real problem created by the intolerance and extremism inculcated

in some madrassahs, the education system in general has been failing the youth of

Pakistan. For political, economic, and social reforms to succeed, young Pakistanis

must have the preparation needed to gain employment and compete in the global

marketplace. Funds requested for education will be used to support and help the

government shape these reforms, including through incentives for schools to join the

government’s reform programs, teacher training, and increased access for girls.

FY 2006 INL funds will be used to further strengthen Pakistan’s border security,

and law enforcement and intelligence capabilities and coordination, including on

counternarcotics. Funds will also help extend law enforcement access and enhance

monitoring in the Federally Administered Tribal Areas along the Afghan border

through construction of roads and infrastructure. Road construction will also, in tandem with USAID projects, facilitate access to education and economic development

to help integrate these areas with the rest of the country.

India-Pakistan Relations

Reducing the threat of conflict between India and Pakistan is of critical importance to both countries as well as to the United States and the international community. We have long encouraged Indo-Pak engagement while working to reduce

the tensions between these two countries. The rapprochement and Composite Dialogue that began nearly 2 years ago between India and Pakistan has seen a number

of successes. Most recently, during Indian Foreign Minister Natwar Singh’s February 15–17 visit to Islamabad, both sides made real compromises in agreeing to

begin bus service across the Line of Control in Kashmir. This is one of the most

significant developments since the composite dialog began in January 2004. It shows

that the parties are committed to increasing their engagement, and we will encourage further progress.

Bangladesh

Bangladesh, despite its stormy birth and initial dismal prospects, has built a functioning, albeit challenged, democracy that has achieved important economic growth.

Credit for Bangladesh’s accomplishments, past and present, does not rest with a single leader, party, or organization. And, neither does responsibility for the current

problems rest with a single Bangladeshi administration, institution, or leader.

Nevertheless, Bangladesh’s significant problems with corruption, increase in violent political attacks, poor governance, and the opposition’s ‘‘hartals’’ (general

strikes), threaten democratic stability and impede economic growth. United States

development and democracy programs in Bangladesh seek to address the challenges

that foster extremism. Poverty, lack of education, and endemic corruption combined

with porous borders and lack of public faith in elected government have increased

the appeal of radicalism.

United States democracy programs seek to increase the accountability and transparency of democratic institutions, which can help defuse bitter rivalries, and support civil society advocacy groups such as Transparency International Bangladesh.

7

To promote sustainable development, our programs will continue to improve basic

education, foster scientific cooperation, assist economic growth and trade, combat

trafficking in persons, and increase health services for women and children.

Nepal and Bhutan

The United States has a strong interest in helping the Nepalese overcome the serious political problems they face, and the developmental problems from which

much of their current political crisis derives. We want Nepal to be a peaceful, prosperous, and democratic country, but it confronts the possibility that a brutal Maoist

insurgency might seize power; not through military force but through a collapse of

will to resist it. For this reason we were particularly concerned about King

Gyanendra’s February 1 dismissal of the government, declaration of a state of emergency, and detention of politicians and dissidents. This serious setback for Nepalese

democracy risks eroding the government’s ability to resist the insurgency even further. The King has said that his recent actions are intended to strengthen Nepal’s

multiparty democracy and to bring the Maoist insurgency to an end. He needs to

move quickly to reinstate and protect civil and human rights, release those detained

under the state of emergency, and begin a dialog with the political parties intended

to restore multiparty democratic institutions under a constitutional monarchy.

Following on the King’s actions, India and the United Kingdom announced they

are suspending assistance to Nepal’s Armed Forces. We have the same step under

consideration, but have not yet made a decision. However, we have made it clear

to the government that in the current political situation our security assistance is

at risk. In our security assistance so far, we have supported Nepal’s military

through professional training, modern rifles, and nonlethal equipment. A central

part of our program has been ensuring that the security forces improve their record

with respect to human rights.

The overwhelming preponderance of the assistance the United States is providing

to Nepal is devoted to the political and economic development the country so desperately needs. Nepal has some of the world’s lowest social indicators, and more

than half of our development assistance has been earmarked for health and family

planning. We will also continue to focus on the restoration of democratic institutions

and seek to increase citizen participation and representational diversity, provide assistance for elections, if and when they are held, and strengthen key rule of law and

anticorruption institutions.

We continue to work with the governments of Bhutan and Nepal to resolve the

situation of the 100,000 refugees of Bhutanese origin in Nepal and are working

closely with UNHCR and NGOs to assure the welfare of the many resident and

transiting Tibetans in Nepal.

Sri Lanka and Maldives

The focus of almost everyone in Sri Lanka, over the past several weeks, has been

on recovery from the effects of the tsunami. The United States has been in the forefront of the effort to assist Sri Lankan recovery efforts and will remain engaged as

we transition into meeting the country’s enormous reconstruction needs. Other important long-term concerns remain, however. First among them is resolving the conflict between the government and the Liberation Tigers of Tamil Eelam. Despite the

largely successful ceasefire begun in 2003, peace negotiations between the two sides

have not been restarted. The necessity for cooperation between the two sides on tsunami relief may help establish a higher level of trust helpful to the peace process.

The United States continues to support Norway’s facilitation of a peace settlement

and remains prepared, along with other donors, to help Sri Lanka address urgent

post-conflict reconstruction needs. The goal of peaceful reconciliation will also need

to help guide our post-tsunami reconstruction assistance. As we and other donors

encourage a resumption of talks, we continue to provide a package of assistance programs aimed at providing a boost to reconstruction and reconciliation in war-torn

areas.

Our nationwide development and health programs support the government’s economic growth and antipoverty efforts, while our democracy programs promote

human rights and political reintegration and reconciliation. Increased FY 2006 FMF

funding will be used to help Sri Lanka’s navy meet threats posed by national and

regional terrorist groups, and will help to reform and upgrade its military.

Another country devastated by the tsunami was Maldives. As with Sri Lanka and

other countries, the United States made a major contribution to relief in Maldives

and is committed to help with reconstruction. The recent visit of former Presidents

Bush and Clinton to Maldives and Sri Lanka underlines the seriousness of our commitment.

8

PUBLIC DIPLOMACY AND REGIONAL PROGRAMS

Public Diplomacy programs remain a key part of the war on terrorism in South

Asia. Throughout the region the Bureaus of South Asian Affairs and Economic and

Cultural Affairs and the Office of International Information Programs are implementing both traditional and innovative outreach programs, targeting younger,

nonelite audiences. Through these people-to-people programs we will continue to

promote shared values on education and democratic reforms, regional conflict resolution, and strong civil societies. Our American Centers remain key to these efforts.

Our English teaching programs will advance academic potential and engagement

with the United States and its values.

These programs are complemented by our regional Economic Support Fund initiative for Education, Democracy and Development in South Asia (EDSA). We are requesting $2.5 million in FY 2006 ESF for this initiative, which seeks more effective

ways to address extremism through small, innovative pilot and multicountry

projects in education, democracy, and income generation. These projects are coordinated with and will inform our larger bilateral development programs.

Many of the issues of concern to us in South Asia, particularly those that affect

ordinary South Asians on a personal level, need to be addressed in a regional context. Our diplomatic efforts and programs aimed at combating trafficking in persons

have been refocused and intensified to raise the performance of South Asian governments in accord with criteria in the Trafficking Victims Protection Act. We are combating HIV/AIDS throughout the region, with the principal focus on India, where

the problem is by far the worst. Corruption lies at the nexus of the governance and

economic failures in South Asia. Our development, democracy programs, and law

enforcement programs combat corruption by promoting transparency, accountability,

and efficiency, including through strengthened private sector, civil society, and independent media involvement. Finally, we remain ever mindful of the plight of women

throughout the region, and our programs across the board have integrated components to improve literacy, education, health, and economic and legal rights for

women and girls.

CONCLUSION

Achieving United States goals in South Asia remains crucial to our own national

security and to a stable future for the region. While there has been much progress

over the past few years, continued success depends on adequate resources to manage our policy and support our foreign assistance programs.

Thank you for your support. I’d be happy to take questions.

Senator CHAFEE. Thank you very much, Mr. Camp.

Mr. Kunder, welcome.

STATEMENT OF HON. JAMES R. KUNDER, ASSISTANT ADMINISTRATOR FOR ASIA AND THE NEAR EAST, U.S. AGENCY FOR

INTERNATIONAL DEVELOPMENT, WASHINGTON, DC

Mr. KUNDER. Thank you, Senator, Senator Boxer.

I am the Assistant Administrator for Asia and the Near East.

Our Bureau is responsible for those countries between Morocco and

the Philippines, and extending north to Mongolia. In that area, we

have the world’s largest concentration of poor people; and so, many

of our development programs focus on the needs of those poor.

I also want to point out one other demographic statistic. Across

that region, there are 324 million people, a number exceeding the

population of the United States, in the age category between 15

and 24. So we’ve got an enormous opportunity, but also an enormous recruiting ground for instability. And so, the need to focus on

jobs programs and education programs is driven home by that 324

million number.

Our primary focus in South Asia is, naturally, on stability and

reconstruction. Our reconstruction program in Afghanistan is preeminent among those programs, but we also have unstable situations, as Don has said, in Nepal, in Pakistan along the border reVerDate 11-MAY-2000 13:57 Oct 05, 2005 Jkt 000000 PO 00000 Frm 00012 Fmt 6633 Sfmt 6602 963433.SEN SFORELA1 PsN: SFORELA1
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gion, in Sri Lanka. So, the area of focusing on counterterrorism, instability, and reconstruction is primary for us.

We’ve also tried to look at, in our program request for 2006, a

number of strategic issues that extend across the region. Number

one is education and the need to transform the educational systems

in the region. Number two is democracy and governance, with

greater participation, focus on specific issues, like gender issues,

participation of women, participation of civil-society organizations,

antitrafficking, and other issues generally in the cone of democracy

and governance. A third area is economic growth. For that burgeoning population, we have got to focus on job programs.

We have tried to focus on creative modalities for working in

these areas. In addition to our ESF and development-assistance

programs, we have emphasized public/private partnerships.

USAID’s Global Development Alliance tries to take advantage of

the increasing investment across Asia; and, thus far, we have been

able to leverage private contributions to the development process,

on an order of 5-to-1 ratio for every taxpayer dollar we’ve invested

in these Global Development Alliance programs.

We have also tried to look over the horizon, if you will, at problems that are not yet prominent in our discussions, but we think

are going to be increasingly prominent issues in the coming years.

Preeminent among those is water, both the water shortages that

we face across the region and the potential for water disputes to

be the source of conflict and friction in the future. We have suggested—this is something we will want to discuss with the committee, and with the Congress—the need to have a ‘‘Blue Revolution,’’ like the Green Revolution that we led several decades ago,

to increase food production around the world.

We have also looked at the need to create regional hubs. Right

now, we are looking at regional hubs in Cairo and in Bangkok to

supplement our bilateral programs and start looking at regional

issues and engagement with regional institutions across Asia as a

way of leveraging the taxpayers’ dollars in the foreign-assistance

field.

Finally, in terms of modalities, we have increasingly tried to perfect our technique of working with the United States military in

places like Afghanistan. We have got to figure out ways to make

that relationship more productive. In the recent tsunami response,

USAID, State, and the military worked very closely together to deliver humanitarian assistance. We’re trying to build on that kind

of relationship through the use of Provincial Reconstruction

Teams—that is, joint State, DOD, and USAID teams—working in

the countryside to help win the war on terrorism and assist in the

reconstruction effort.

In closing, I would just like to focus a little bit further on Afghanistan. I had the honor of being sent out in January 2002, right

after the Taliban abandoned Kabul, to reopen the USAID mission

there. If someone had predicted, in January 2002, that we would

be as far along in the reconstruction process as we are in March

2005, I would have thought they were crazy. The situation, obviously, is not without its problems, not without its occasional terrorist attacks, and not without significant reconstruction hurdles

yet to cross, but we have made enormous progress, and I think the

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request for substantial assistance in Afghanistan needs to be supported, and I think we have a track record of proving that we can

do the job there.

And, finally, I want to make a request for full support for our operating-expense request. I know that this is a de rigeur thing that

I have to do, but I really want to make a personal appeal, because

it’s not just an abstract operating-expense issue. When we have to

take on these reconstruction and instability issues, as we do in

South Asia—just as we say for the military, we have to have ‘‘boots

on the ground,’’ well, we have to have ‘‘Reeboks on the ground,’’ if

you will. We need people out there.

We’ve got, now, 20 reconstruction teams scattered across Afghanistan. We can do a good amount of work through our contractors,

through our NGO partners, but the U.S. Agency for International

Development, from a height of around 10,000 officers during the

Vietnam war period, is down to about 2,200 officers around the

world, in more than 80 countries. As one of my military colleagues

said, in shock, ‘‘This is nothing but a reinforced battalion, worldwide.’’

We are doing the job. We have proven we can do the job in tough

places, like Iraq and Afghanistan. And we simply need the resources. That’s an important part of the U.S. Government’s toolkit

in the war on terrorism, and we simply need the bodies to continue

to do the job.

So, my report on South Asia is that we’ve made enormous

progress. We’ve got very significant challenges, as Mr. Camp has

said. And I’d be prepared to answer any questions you have.

Thank you.

[The prepared statement of Mr. Kunder follows:]

PREPARED STATEMENT OF HON. JAMES KUNDER, ASSISTANT ADMINISTRATOR FOR

ASIA AND THE NEAR EAST, U.S. AGENCY FOR INTERNATIONAL DEVELOPMENT,

WASHINGTON, DC

I welcome the opportunity to appear before you today to discuss the work of the

U.S. Agency for International Development in Asia and the Near East.

USAID works in 28 countries in Asia and the Near East—from Morocco to the

Philippines and as far north as Mongolia. The region is home to 64 percent of the

world’s population and two-thirds of the world’s poor.

Foreign assistance is an essential component of U.S. foreign policy in the region.

To meet the needs of the people of Asia and the Near East, we have missions in

19 countries. Five of those missions—Afghanistan, Pakistan, Thailand, Yemen, and

Iraq—opened recently. We established them to handle priorities arising from U.S.

foreign policy goals and ongoing development challenges in the region. Three countries in ANE are eligible for the Millennium Challenge Account, and three have

been selected as MCA threshold countries. Our fiscal year 2006 request is consistent

with U.S. foreign policy priorities and rewards countries that demonstrate commitment to democracy, good governance, and economic freedom.

There are struggling democracies throughout Asia and the Near East that need

help building stronger legal and governing institutions; promoting citizen participation, particularly that of women; and strengthening the basic services they provide

to the public.

Corruption is a pervasive problem, making it difficult for economies and legal systems to function properly—particularly in South and East Asia. This also makes foreign investors less likely to put more money into the region.

Fundamentalism is spreading, especially in the Middle East. The insurgency in

Iraq and the ongoing Israeli-Palestinian issue make the Middle East one of our

greatest challenges and foreign policy priorities. Radicals are taking advantage of

the sense of hopelessness caused by oppressive regimes and extreme poverty. Severe

restrictions on human rights impose a sense of fear among many.

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Threat of Instability and Terrorism

USAID’s overriding focus is countering the threat posed by instability and terrorism in Asia, the Middle East, and North Africa. Conflicts permeate the region—

from ongoing insurgencies in Iraq, Afghanistan, and Nepal to the separatist movements in Mindanao, Philippines, and Sri Lanka. Many countries harbor extremist

groups that prey on disenfranchised populations left vulnerable by their government’s inability or lack of commitment to meet their daily needs. As these extremist

groups grow, they threaten to destabilize their own countries and often support terrorism directed at the United States. USAID is an integral player in the U.S. Government’s response to these threats.

All of USAID’s programs, ranging from democracy and economic governance to

education and health care, address the poverty, extremism, and corruption that

threaten the region’s stability. USAID plays an indispensable role in stabilizing and

rebuilding Afghanistan and Iraq; and mitigating conflict and improving conditions

for peace in the Middle East and elsewhere.

In fiscal year 2006, USAID proposes shifting $275 million in Development Assistance funds to the more flexible Transition Initiative (TI) account for Afghanistan,

Ethiopia, Haiti, and Sudan. TI funds provide the necessary resource flexibility to

target the sources of fragility in countries where political and economic conditions

remain volatile. Afghanistan is a prime example. In its changing security and economic environment, the ability to adjust priorities and programs quickly is critical

to supporting its successful transition to a democracy and rebuilding its social and

economic fabric. TI funds comprise 24 percent of the total fiscal year 2006 request

for Afghanistan.

Operating large programs in high threat environments, such as Iraq and Afghanistan, where we can have only a limited footprint is demanding and has challenged

the skills and creativity of our staff. Our American staff on the ground and our host

country national staff remain the backbone of overseas missions, but particularly in

these countries, which are some of the most dangerous places in the world. Granting

USAID’s Operating Expense request is vital to the Agency’s ability to adequately

manage its expanding portfolio and develop a workforce with the depth and skills

to respond to the challenges of development in the 21st century.

Although increasing stability and minimizing terrorism are USAID’s highest priority, we have other important objectives in the Asia and Near East region such as

improving education and workforce training, strengthening democratic and economic

institutions, and improving health. A few of these are described below.

Burgeoning Youth Population Requires an Education for Work and Life

Giving young people appropriate skills and hope for a better future is essential

for economic, political, and social development. The Asia and Near East region has

experienced a drastic demographic shift and now houses the largest generation of

youth ever—368 million young people in the 19 countries where USAID has a presence. The youth population has grown disproportionately compared to the rest of the

population, putting enormous pressure on governments with limited capacity and

resources to provide education and employment opportunities. Developing a workforce with the right skills to be productive is a key issue across the region. USAID

implements school-to-work and vocational programs to equip the youth population

with skills needed in the job market.

A Blue Revolution

USAID hopes to spearhead a ‘‘blue revolution’’ to address the life-threatening and

growing constraint of scarce water resources. Some of the most important international security interests in Asia and the Middle East either derive from, or are

significantly exacerbated by, transboundary water disputes over water sources.

Water needs in Jordan exceeded supply by 78 percent in 2000, and West Bank/Gaza

has water to meet only one-third of its minimum drinking needs. Projections show

that much of South Asia will be facing similar shortages of potable water by 2025.

A serious challenge to maintaining the quantity and quality of water is land degradation due to deforestation and settlement by growing populations.

Public-Private Partnerships

USAID recognizes that the private sector is a huge factor in the places we work,

either through their presence in East Asia or lack, thereof, in the oil and utility industries in the Middle East. Partnerships with the private sector enable USAID to

leverage funds, technologies, and new ideas to address the growing challenges in our

region. Identifying synergies between our goals and our comparative advantages

have led to a number of successful partnerships, including an education initiative

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in the Broader Middle East and North Africa and campaigns against illegal logging

in Asia.

Regional Hubs

One of our strategies for increasing surge capacity and enhancing management

efficiency is the opening of regional offices in Bangkok and more recently in Cairo.

These offices provide contracting, legal, and financial services to field missions and

manage programs in countries with no USAID presence and programs targeting key

regional issues with a regional dimension such as HIV/AIDS and trafficking in persons.

Tsunami Response and Reconstruction

In December 2004, a major earthquake followed by a tsunami hit Asia and Africa,

devastating many coastal areas. Over 220,000 people in eight countries perished in

a few hours and many more had their homes and livelihoods swept away. The coastal areas of Indonesia and Sri Lanka, the Maldives and two Indian island chains

bore the brunt of the calamity and will require significant investments in rehabilitation and reconstruction. President Bush has pledged long-term U.S. commitment to

help the tsunami victims rebuild their lives.

USAID’s presence in these countries, our expertise with disaster assistance, and

solid working relationships with the region’s governments and our partner nongovernmental organizations meant we were able to respond immediately, providing

life-saving food, water, medical care, and shelter. Lessons learned from working

with the Department of Defense in Afghanistan and Iraq also bore fruit in the

weeks following the disaster. Close coordination between USAID and the military

was a key part of the success of the U.S. response.

Now, we have moved on to rebuilding the communities devastated by the tsunami.

Cash-for-work programs to give families incomes, loans, and training to develop livelihoods and design of longer term reconstruction projects of water systems and critical infrastructure are underway.

USAID’s Work Pays Off

Despite the growing security challenges, our work has brought substantial and

measurable results.

In less than 2 years on the ground in Iraq, we are managing $4.2 billion in contracts and grants. We laid the foundation for democracy and good governance. The

first free elections in more than 40 years were held on January 30, 2005. We have

trained 10,000 local council members, and we have rehabilitated over 2,300 schools

and trained 32,000 teachers.

Despite ongoing security challenges, the progress we are seeing in Afghanistan is

noteworthy. Eight million people, 40 percent of them women, voted in the country’s

first Presidential election. USAID played a prominent role in that success, through

voter education programs and distributing and counting ballots. We have built a

good relationship with the new government, substantially completed the KabulKandahar highway and contributed to the best wheat harvest in over two decades

through seeds, fertilizer, and irrigation projects. We have printed 10.3 million textbooks and provided basic health services to 4.7 million people.

In Indonesia, where corruption has been a major stumbling block, we have helped

pass antimoney laundering laws. And in the Philippines, where a separatist movement threatens peace in the South, we have helped reintegrate over 21,000 combatants into society and helped equip them with jobs and other social services.

Ninety-five percent of children ages 2–8, in Egypt, tune in to the Egyptian version

of Sesame Street, learning to be tolerant, practice good hygiene, and get a head

start in school.

USAID supported the recent free trade agreement with Morocco, the second Arab

country after Jordan (2001). We have also worked with Lebanon, Yemen, Vietnam,

Cambodia Nepal, Laos, and Algeria on accession to the WTO. A bilateral trade

agreement with Vietnam was completed in 2000. These efforts are critical because

regional and international trade is an important source of growth for the region.

PRIORITIES IN EAST ASIA

In East Asia, as in much of the Asia/Near East region, conflicts threaten stability.

Oppressive and corrupt governments and disenfranchised populations contribute to

discontent and obstruct economic growth.

USAID will continue to focus attention and resources on two conflict-affected

countries, Indonesia and the Philippines, which are also two important allies in the

war on terror. In both of those countries, education is a major part of our programs.

Like the rest of the region, access to basic and secondary education remains unVerDate 11-MAY-2000 13:57 Oct 05, 2005 Jkt 000000 PO 00000 Frm 00016 Fmt 6633 Sfmt 6621 963433.SEN SFORELA1 PsN: SFORELA1
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equal. Both Indonesia and the Philippines have Presidential initiatives for education

of $157 million and $33 million respectively. Throughout the region, we are rapidly

expanding our education programs.

We will work to open up corrupt and closed political and economic systems, major

barriers to investment, good governance and human rights. In addition to targeted

efforts in countries like Indonesia, USAID is developing a new regional governance

initiative for East Asia. Where possible, we will support trade capacity building to

complement the United States-Thailand Free Trade Agreement negotiations.

Our intensive efforts to fight the spread of HIV/AIDS in Cambodia have been a

resounding success to date. However, the threat persists. We will continue our vigilance against this potential epidemic through regional and bilateral programs.

We will also continue to combat trafficking. Over the last 10 years, the number

of people trafficked has grown, and the average age has dropped. Profits from trafficking rank third only to drugs and guns, encouraging criminal syndicates to work

closely with local trafficking networks. USAID will continue to work with vulnerable

people in high-risk environments, but we will give added attention to children and

youth, who are most at risk.

Regional Development Mission in Asia

The East Asia and Pacific region is one of the world’s most important trading

routes, which facilitates the spread of HIV/AIDS and other infectious diseases, as

well as trafficking of persons and illicit narcotics. Many challenges remain for the

region, not the least of which is recovering from the recent tsunami. Many countries

in mainland Southeast Asia still have relatively centralized systems of government.

Another threat is the health and economic impact of poor air quality, unclean water,

and lack of safe sanitation. Countries in the region continue to suffer from the

scourge of HIV/AIDS, malaria, and tuberculosis.

A secure, robust, and integrated Southeast Asia Pacific region would bode well for

the economic well-being of all nations in the world. Highly unbalanced growth and

political or social instability could jeopardize vital U.S. strategic interests in the region.

USAID’s Regional Development Mission/Asia manages regional programs,

strengthening United States relations with ASEAN members, and country-specific

programs in mainland Southeast Asia (Burma, China, Laos, and Vietnam) as well

as HIV/AIDS and environmental programs that extend east into the Pacific and

west into South Asia.

Burma

The State Peace and Development Council continues to maintain political and

military control of the country. The Council’s economic mismanagement of the country’s resources has led to a deterioration of social and economic conditions.

The intensifying economic hardship in Burma over the past decade has resulted

in many Burmese relocating to the Thai-Burma border region. There are over

144,000 Burmese living in refugee camps and hundreds of thousands registered and

unregistered Burmese migrants.

USAID provides humanitarian assistance, including health care and efforts to

control infectious diseases. Democracy programs train Burmese journalists and public information workers to improve the quality and dissemination of news and information on the situation inside Burma. Scholarships are available for Burmese refugees to study at universities around the world.

Cambodia

After a year of political stalemate, the country has inaugurated a new administration and a new monarch, signaling new prospects for stability. However, corruption

permeates all aspects of daily life.

More than half of Cambodia’s 13 million people are under the age of 18. Ensuring

that they receive an adequate education that will prepare them to be productive citizens remains a major challenge. The forests of Cambodia are one of its most valuable resources. The Government has attempted to regulate forest exploitation, with

limited success.

United States interests in Cambodia include strengthening democracy; expanding

regional cooperation and integration; promoting greater economic openness and

lower trade barriers; and addressing terrorism. USAID programs address HIV/AIDS

prevention and care; expand access to maternal, child, and reproductive health services; increase the participation of political parties, NGOs, and the private sector in

promoting human rights and documenting evidence of Khmer Rouge atrocities; and

improve the quality of basic education.

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China

USAID’s activities in China are limited to assisting Tibetan communities, a regional HIV/AIDS program and support for American Schools and Hospitals Abroad.

The Tibetan Plateau presents a challenging implementation environment for development assistance. Those most in need of assistance live in small nomadic communities scattered across vast rural tracts, unserved by roads or other public infrastructure, and the harsh climate limits assistance to the warmer 9 months of the

year.

The principal goal of the program is to strengthen Tibetan communities’ capacity

for meeting their socioeconomic needs, while conserving the environment and preserving their cultural heritage. This program is implemented through U.S. nongovernmental organizations.

East Timor

In 2002, after 24 years of Indonesian occupation, East Timor became the first

newly independent nation of the millennium. It is one of the 10 poorest countries

in the world with an estimated population of 924,642. Its small domestic market,

island status, extreme mountainous terrain, and poor infrastructure present formidable challenges.

Despite these challenges, East Timor has made solid progress since 1999 in establishing a democratic state and revitalizing its economy and export market for coffee.

However, its bid for the Millennium Challenge Account failed in the economic

growth area. Given the Government’s willingness to respond, dedication of the international community, and concentration of MCA threshold resources in this area,

rapid progress is possible.

The overall goal of the USAID program will continue to address the long-term development needs in accordance with key United States foreign policy interests in

East Timor. USAID programs address Timor’s most pressing concerns; accelerating

economic growth and job creation; good governance; and improving basic health

services.

Indonesia

Besides the new challenges created by the tsunami, significant social, political,

and economic barriers continue to impede Indonesia’s progress toward becoming a

moderate, stable, and productive nation. More than half of Indonesia’s population

subsists on less than $2 per day. Governing institutions remain weak and corruption is endemic. Approximately half of Indonesian nchildren who start primary

school do not complete junior secondary school, and dropout rates are increasing.

In 2004 Indonesians voted in a new President, Vice President, and legislators in

free and fair elections. By holding the largest and most complex single-day elections

in history, the most populous Muslim nation demonstrated to the world the compatibility of democracy and Islam.

The GOI commitment to tackling terrorism and regional conflicts is strong, but

the September 2004 terrorist bombing of the Australian Embassy and continued violence in Aceh in 2004 demonstrated that sustainable solutions to these issues remain elusive. The current ceasefire in post-tsunami Aceh offers hope for future conflict resolution.

The outcome of Indonesia’s democratic transition has profound implications for

United States strategic interests in fighting terrorism; preserving regional stability

in Asia; strengthening democratic principles, the rule of law, and respect for human

rights; and expanding access for U.S. exports and investment.

USAID immediately responded to the tsunami disaster with relief assistance. Additional relief and reconstruction activities will respond to the needs in Aceh.

USAID focuses on economic growth and job creation; clean and good governance;

and improving the education and health sectors. The Millennium Challenge Corporation has identified Indonesia as an eligible country for the Millennium Challenge Account. USAID will play an active role in helping Indonesia qualify for these

new funds.

Mongolia

Mongolia’s harsh climate, small domestic market, land-locked status, and lack of

infrastructure present formidable challenges. Yet the country provides an important

example to others in East Asia, Central Asia, and elsewhere on how to manage an

economic transition within a democratic political framework. Mongolia has also been

a visible supporter of the United States in the continued war on terrorism.

USAID’s programs directly address two of Mongolia’s most pressing concerns: Sustainable private sector-led economic growth and more effective and accountable governance. This includes work on growth at the policy, sector, individual firm, and

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‘‘grassroots’’ levels. Judicial reform is the largest program within USAID’s governance work, leading to fully automated courtrooms that increase public access dramatically.

Philippines

The Philippines has long been a close strategic ally of the United States. However,

the Philippines continues to be held back by internal conflict and violence. The sizeable Muslim population in Mindanao is marginalized economically and lacks adequate access to basic social services.

Weak leadership, powerful vested interests, and ongoing conflict feed the cycle of

poor economic performance by discouraging private investors and tourism and

draining public coffers.

Nevertheless, the Philippines can accelerate its economic and social development

as well as the ongoing peace process with the Mindanao-based Moro Islamic Liberation Front. With USAID assistance, more than 24,000 former combatants from the

Front have been successfully reintegrated into the productive economy, demonstrating the tangible benefits of peace.

USAID concentrates on reducing conflict in Mindanao and other areas vulnerable

to violence; fighting corruption and supporting improved performance of selected

government institutions. Other programs promote the health and well-being of Filipinos through improved and decentralized service delivery, increased private sector

involvement, social acceptance of family planning, and policy reform. In addition,

USAID protects the Philippine’s rich natural resources by strengthening their management and governance and encouraging better urban environment management

and reliable and cleaner energy. In Mindanao, USAID increases access to quality

education and livelihood skills in the conflict-affected areas, and in the rest of the

country, USAID supports broader education sector policy reform.

Vietnam

Since the late 1980s, Vietnam pursued a policy of economic openness and has

transformed its centrally planned economy into a market-driven system. As a result

of more market-based policies, the Vietnamese economy has achieved a relatively

high GDP growth rate (7 to 8 percent per year) for the last several years. However,

Vietnam still ranks as one of the world’s 25 poorest countries.

Presently, Vietnam’s strict regulatory environment, lack of rule of law, inadequate

infrastructure, and lack of market competitiveness handicap the private sector. The

HIV/AIDS epidemic is now widespread, not just in high-risk groups, but also among

the general population.

An expanded United States-Vietnam relationship is important for fostering regional security, prosperity, human rights, and peace in the Southeast Asia region.

USAID’s progam focuses on two areas: Accelerating Vietnam’s transition to a more

open, market-based economy and improving access to services for selected vulnerable groups.

PRIORITIES FOR SOUTH ASIA

With a young, impoverished, and rapidly growing population, governments in

South Asia strain to provide basic human services and economic opportunities.

USAID will continue to rebuild Afghanistan. Working hand-in-hand with the Afghans, we have made significant progress, and the country is well on its way to selfrule through democratic processes. However, there is much more to be accomplished. We will also promote economic and political transitions in conflict-ridden

countries, such as Pakistan, Nepal, and Sri Lanka. These efforts will remain central

to our efforts to bring prosperity to the region.

To combat the region’s dire poverty, USAID will spur the rapid creation of jobs

and the delivery of essential human services, especially education and health. Boosting incomes among the large numbers living in rural populations will require attention to agribusiness and other nonfarm endeavors.

Trafficking

USAID has been instrumental in increasing awareness and understanding of

human trafficking in South Asia. In addition to educating governments and populations largely unaware of the issues, USAID has directly assisted about 27,000 people and many more indirectly. The program has spawned policy reforms in India,

Nepal, and Sri Lanka. In Bangladesh, the government has made significant

progress with USAID’s help, thereby removing the threat of Tier III sanctions.

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Afghanistan

Afghanistan remains at the center of United States strategic interests. We began

our work there in 2002 to address a humanitarian crisis. Three years later, we see

a future bright with hope. The most important development in the post-Taliban era

occurred this past October with the completion of highly successful Presidential elections in which over 8 million people voted, with over 40 percent of voters being

women. We are in a unique position to support this deserving population living on

the front lines in the war on terror. Working closely with other U.S. Government

agencies, USAID plays a key role in the development of the country.

Despite remarkable progress, much crucial work remains. Afghanistan has some

of the worst social and economic indicators in the world. Curbing the alarming

growth of the illicit narcotics trade, in part by providing viable alternatives for rural

farmers, is essential for stability. Agriculture, which makes up over 60 percent of

GDP, is hampered by lack of access to markets. Ruined infrastructure is a factor

in this, as it impedes economic growth in all areas. Among all other factors, the

most important constraint to USAID’s work is the security situation.

Our programs support the country’s transition from a failed state to a stable, productive country. To boost the economy, USAID works with the Government to

strengthen economic policy and increase rural incomes, especially from licit agriculture. Other programs improve basic health care for women and children. In addition, USAID has expanded access to basic education and strengthened democratic

practices through funding for elections, media, and civil society.

Bangladesh

Bangladesh is a populous and important ally of the United States in the Islamic

world. U.S. interests include a stable democracy, economic prosperity to stem the

potential growth of extremism, and improved understanding between the two countries.

Bangladesh has responded with remarkable promptness to the threat of Tier III

sanctions under the Trafficking Victims Protection Act. At the same time, endemic

corruption and deteriorating quality of governance are serious problems. Nearly half

of Bangladeshis live below the national poverty level of $1 per day, and natural disasters, compounded by substandard and unavailable public services, condemn millions of people to misery.

USAID’s overall goal is to reduce poverty through a vibrant economy. Additional

programs help reduce fertility, improve family health, strengthen small businesses,

improve environmental management, strengthen the energy industry, provide food

for the most vulnerable, improve disaster response, promote democracy, and improve the quality of the basic education system. Measures to more directly address

governance and corruption are also being built into the program. Underscoring this

work are efforts to engage current and future opinion leaders on key development

issues while demonstrating U.S. commitment. Some examples include engaging Islamic leaders with respect to our antitrafficking program and acquainting journalists with USAID programs and beneficiaries.

India

India is home to 1.1 billion people and has the world’s 12th largest economy. India

also has the world’s third largest Muslim population. As the two largest democracies

in the world, the United States and India share many values and strategic interests.

India is both a key partner in the war on terrorism and an anchor for security and

economic growth in strategically important South Asia.

India’s strong democratic traditions and financial stability are forces of equilibrium in a volatile region. However, economic development in India is uneven and

varies by region and social factors. India is also one of the most disaster-prone countries in the world. The December 2004 tsunami underlines the importance of ongoing investments in disaster management.

USAID seeks to promote economic prosperity through financial market development and expanded trade and investment, reduce incidence of infectious diseases,

and enhance family welfare. In addition, USAID supports development and democracy to alleviate poverty, reduce malnutrition, and improve the status of women;

and humanitarian responses to save lives and reduce suffering associated with disasters.

Nepal

In the last 54 years, Nepal has made a remarkable transition from an isolated

kingdom with limited basic services and infrastructure to a constitutional monarchy.

Today, the most pressing problems are the Maoist insurgency and its impact on security and economic development, the stabilization of a democratic multiparty sysVerDate 11-MAY-2000 13:57 Oct 05, 2005 Jkt 000000 PO 00000 Frm 00020 Fmt 6633 Sfmt 6621 963433.SEN SFORELA1 PsN: SFORELA1
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tem and return to the rule of law. Nepal remains one of the poorest countries in

the world, with an annual per capita income of $276 and 38 percent of the population living below the national poverty line. Moreover, Nepal is grappling with an

incipient HIV epidemic.

On the political front, there are reasons for serious concern, particularly given the

King’s actions on February 1 when he dismissed the government, announced a state

of emergency, suspended fundamental rights and press freedoms, and arrested leading politicians, human rights activists and journalists. This is a serious setback for

democracy and rule of law in Nepal and risks increasing support for the Maoists.

The United States has an interest in an economically and politically stable

multiparty democracy in Nepal, serving as a geographic buffer between the world’s

two most populous nations in a volatile region. By addressing the underlying causes

of poverty, inequality, and poor governance in Nepal, USAID makes an important

contribution to fighting terrorism, promoting regional stability and freedom, and diminishing the likelihood of a humanitarian crisis.

Pakistan

Pakistan is of unquestioned strategic importance to the United States. With 159

million people, it is home to the world’s second largest Muslim population and has

been key to United States-led counterterrorism efforts in South Asia. Over the past

year, Pakistan has improved relations with India in the conflict over Kashmir and

with Afghanistan.

However, Pakistan faces daunting challenges: Poverty, low literacy, little foreign

investment, sectarian strife, and terrorism. A stable, democratic, economically thriving Pakistan is vital to United States interests in South Asia. However, continued

high fertility rates and the large number of youth mean that demand for schools,

health care, water and sanitation services, and jobs will strain Pakistan’s fundamentally weak service delivery systems in the coming years.

In Pakistan, USAID concentrates on improving the quality of education, increasing reproductive health and health care services for women and children, building

democratic institutions, and increasing rural incomes and employment. These objectives not only address Pakistan’s fundamental social and economic challenges, but

also exemplify the long-term commitments needed to establish the United States as

a reliable partner and ally to this strategically important nation.

Sri Lanka

Sri Lanka, struggling to recover from two decades of armed conflict, will now have

to deal with recovery from the recent tsunami, which flooded coastal areas and

wiped away communities along the south and east coasts of the island nation.

Prior to the tsunami, USAID emphasized the opportunities presented by the 2002

ceasefire agreement between the government and the separatist Liberation Tigers

of Tamil Eelam. Now, along with ongoing activities to support the peace process,

foster economic growth and civil society participation, and provide physical and psychological rehabilitation for those affected by the war, USAID is undertaking a

range of recovery and reconstruction activities.

The United States continues to support measures to enhance the peace process,

improving democratic institutions and processes, promoting respect for human

rights, and enhancing economic growth through market-oriented policy reform and

financial stability. By helping resolve Sri Lanka’s civil war, the United States contributes to regional stability and the global war on terrorism. Sri Lanka is also eligible for the Millennium Challenge Account and is working with the MCA to develop

a concept paper that addresses its post-tsunami needs as well as the wider development context.

PRIORITIES IN THE MIDDLE EAST

In the Middle East and North Africa, a region persistently lacking in political and

economic opportunities, a disproportionately large youth population frays today’s social fabric and threatens future stability. Like the rest of the region, economic

growth is just not rapid enough to absorb all the new entrants into the workforce.

As a result, high unemployment and underemployment rates are typical throughout

the region.

Priorities here include rebuilding Iraq, establishing self-rule through democratic

processes and the expanding education programs to give youth the skills to earn a

living and be productive members of society. In a region where the youth population

is exploding and unemployment remains disturbingly high, a relevant education is

critical. In addition, USAID supports free trade agreements, infrastructure and

business development programs to create jobs and help jumpstart a stagnant economy.

18

Reform in the Middle East and North Africa

In his State of the Union speech, President Bush said that to ‘‘promote peace and

stability in the broader Middle East, the United States will work with our friends

in the region to fight the common threat of terror, while we encourage a higher

standard of freedom. Hopeful reform is already taking hold in an arc from Morocco

to Jordan to Bahrain.’’

To support this growing momentum for reform and respond to the region’s aspirations for democratic, economic, and social progress, President Bush led the G–8 last

year at the Sea Island Summit in establishing a partnership with countries of the

Broader Middle East and North Africa (BMENA). The foundation of this partnership is the Forum for the Future, which brings together ministers from G–8 and

BMENA countries to discuss reforms and new ideas for cooperation. The first Forum

meeting was held in Rabat, Morocco, in December 2005, and brought together foreign, finance, and economic ministers from 28 countries. Other efforts developed

under this partnership include initiatives on literacy, democracy assistance, microfinance, development of small- and medium-sized businesses, and entrepreneurship

training. USAID is supporting these reform efforts.

Many Arab countries have been attempting to reform their political systems for

more than a decade. Although change has been slow, space has been created in several countries for increased political debate and action. In some of these countries,

political reforms have been fairly continuous. In others, progress has been followed

by regression. In a third category, countries have only recently embarked on reform

efforts.

USAID supports reform in many sectors and through a variety of approaches. In

Egypt, for example, assistance in tariff adjustments have simplified customs procedures, boosted investment and promoted trade. In Lebanon, USAID works with local

governments to strengthen administration and with citizens to encourage their participation in public decisions. A manual to educate women on human rights has

been distributed throughout Morocco, and programs to train judges in the West

Bank and Gaza have strengthened the judicial system and promoted rule of law.

Middle East Partnership Initiative

Under the Middle East Partnership Initiative (MEPI), managed by the State Department, USAID administers a variety of activities across the MEPI pillar areas

of economic reform, political reform, education reform, and women’s empowerment.

Some USAID-administered activities in the political reform arena include the development of campaign training schools for women candidates in the region, and a regional rule-of-law program focused on judicial independence, procedure, and training

for legal professionals. In the education arena, USAID helped to establish United

States-Middle East university partnerships to strengthen programs in such areas as

education, business/economics, journalism, and information and communications

technology. In the economic reform area, USAID provided technical assistance and

training to improve commercial banks’ capacity to provide credit and other critical

financial services, as well as strengthen central bank supervision and regulation.

Egypt

Egypt, a strong moderating force in the Middle East, has long been an important

United States ally. Egypt and the United States share strategic interests that include combating terrorism, resolving regional conflicts, advancing regional peace,

ensuring domestic and regional security, and promoting economic development.

The greatest threat to domestic stability results from popular frustration with recent economic performance and a persistent lack of economic opportunity. On the

other hand, favorable trends in 2004 included advances in intellectual property

rights protection, new legislation promoting business competition, and accession to

several important trade ageements. In all of these areas, USAID worked closely

with the government to reach these goals.

USAID focuses first on accelerating economic growth—essential to strengthening

Egypt as a stable and prosperous United States ally. Second, we emphasize the creation of private sector jobs: Strengthening the trade and investment environment

and increasing access to sustainable utility services. Third, we have targeted the enhancement of the human resource base: Providing health services; strengthening

governance and participation in the political process; and improving basic education.

Iraq

Misguided economic policies and three wars wrought terrible damage to Iraq’s society and economy. Per capita income fell to very low levels, unemployment increased, poverty expanded, and basic services deteriorated along with social indicators in areas such as health and education. The reconstruction efforts have been unVerDate 11-MAY-2000 13:57 Oct 05, 2005 Jkt 000000 PO 00000 Frm 00022 Fmt 6633 Sfmt 6621 963433.SEN SFORELA1 PsN: SFORELA1
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dertaken in the midst of a growing violent insurgency of former regime elements,

foreign fighters, and other enemies of democracy. Over past decades, Iraq has deteriorated from a nation with enormous natural resources and a relatively healthy,

educated population to a failed nation.

It is in the United States national interest to create a stable, democratic Iraq with

a free-market economy. If this can be achieved, it will have far reaching impacts

on an unstable region with little experience in democracy.

In 2004, USAID carried out programs in agriculture, economic growth, infrastructure, transportation, telecommunications, seaport and airport rehabilitation/operation, local governance, health, education, electricity, water, and sanitation. Just

last month with USAID support, for the first time in decades, Iraqis had the opportunity to vote, express their views publicly, debate important issues and policy alternatives, and have a part in the decisionmaking process.

Israel

The close bilateral relationship that the United States has with Israel serves the

national security interests of both countries. The Government of Israel’s political

and economic stability continues to be a key objective of United States foreign policy

in the Middle East.

The fundamental USAID objective in Israel is to support the Israeli economy, a

task of special importance as the Government of Israel implements a series of ambitious reforms required for financial stability and sustainable growth. Though the

United States cash transfer is not conditioned on economic policy reform, the United

States continues to encourage Israeli efforts to reduce government spending and

deficits, improve tax and public wage structures, increase privatization, reform labor

markets, and liberalize its trade regime.

Jordan

Jordan continues to play a vital role in the Middle East as both a key United

States ally in the war on terror and a model of reform for the rest of the Arab world.

This role is enhanced by the strong will and dynamism of King Abdullah II, who

has actively promoted major reform initiatives in all sectors to create a better future

for Jordanians. However, the Jordanian economic, political, and social sectors are

still very vulnerable to regional developments, particularly in Israel and the Palestinian Territories and Iraq.

Serious social challenges clearly exist in Jordan. First, Jordan’s growing population has now reached 5.29 million. Second, most schools do not provide students

with the skills they need for work. Third, the vast majority of early childhood education services are provided by the private sector and only affordable by the upper

classes. A growing population will also place a tremendous strain on Jordan’s limited water resources.

USAID focuses on increasing water supplies and using existing water resources

better; improving economic opportunities for all Jordanians through private sector

development; fostering the democratic process; improving Jordan’s educational system; and improving primary and maternal health care.

Lebanon

Significant events took place in Lebanon last year, including the formation of

around 180 new municipalities reflecting a stronger trend toward decentralization.

The controversial extension of the President’s term for an additional 3 years, and

the formation of an unpopular government and the current events of this week, culminating with the resignation of Prime Minister Karami and his government, have

brought Lebanon’s internal politics to the forefront of the international arena. Lebanon’s accumulating public debt has reached $35 billion, which is equivalent to approximately 180 percent of GDP, one of the highest ratios in the world.

USAID contributes to U.S. policy priorities of promoting democratic principles and

free economies through investing in the people. It is helping the people of Lebanon

by improving their standard of living, protecting their environment and health,

building their local institutions, addressing their legal rights as citizens, and addressing their humanitarian needs.

Morocco

Morocco has a per capita income of $1,200, placing it in the lower class of middleincome countries in the region. Its social indicators are among the lowest in the region. Urban poverty is a direct consequence of unemployment, which is particularly

high among youth, contributing to insecurity and instability in urban areas.

Morocco is important for United States interests in the region as its oldest ally

and as a stable, democratizing, and liberalizing Arab Muslim nation. The key chalVerDate 11-MAY-2000 13:57 Oct 05, 2005 Jkt 000000 PO 00000 Frm 00023 Fmt 6633 Sfmt 6621 963433.SEN SFORELA1 PsN: SFORELA1
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lenges for the country are creating jobs for a fast growing labor force and addressing

the gaps in meeting the basic needs of the population.

In Morocco, USAID helps increase productivity in agriculture and agribusiness,

create new business opportunities in other areas, and improve the business environment. In addition, USAID improves education and training for employment. Last,

USAID works with the Government to improve its response to citizen needs.

West Bank and Gaza

USAID continues to play an integral role in promoting the U.S. Government’s

strategic foreign policy priority of advancing the Middle East peace process and creating an independent, viable, and democratic Palestinian State living side by side

with Israel in peace and security. This includes improving the quality of life for Palestinians. The conflict with Israel has severely constrained development, especially

since the Intifada began in September 2000.

A forceful and well-coordinated donor response during the past 4 years, and the

successful USAID-led effort for the resumption of Israeli revenue clearances in the

past 2 years, has meant that an outright humanitarian disaster, especially in Gaza,

has been averted.

USAID’s strategy has been guided recently by a more flexible plan to promote stability in the West Bank and Gaza by responding to emergency needs; promoting reform; revitalizing the private sector; and maintaining infrastructure and human

capital development.

Yemen

Yemen has made impressive progress with the establishment of a constitutional

government, a parliamentary system with multiparty elections, and laws to

strengthen nongovernmental organizations. Recently, though, economic reform has

slowed, and Yemen’s internal stability is threatened by a combination of forces challenging the government’s movement to increased democracy. These forces include

extreme poverty, Islamic extremism, internal and international terrorism, and the

alienation from the central government by relatively independent tribal leaders in

remote areas.

Despite progress made over the last decade, Yemen remains one of the least developed countries. Poverty reduction remains Yemen’s most compelling challenge.

USAID’s overall goal in Yemen is to support the United States Government’s

(USG) foreign policy objectives in the war on terrorism by helping to develop a

healthy and educated population with access to diverse economic opportunities. To

gain support from tribal leaders for government decentralization, development, democracy, and counterterrorism objectives, USAID helps create jobs, increase income,

improve health, education, and community empowerment, and strengthen democratic institutions.

Senator CHAFEE. Well, thank you very much.

Mr. Camp, could we run down the numbers for South Asia, as

you go through the various categories, and just some of the decisionmaking that went into coming up with those numbers, the development, child survival, the transition initiative, economic support, the narcotics. Do you have that same chart?

Mr. CAMP. I do have a chart outlining the—yes—the individual

accounts for each country, and we can discuss that.

Senator CHAFEE. Rather than each country, the one I have has

it for the region. Is it more appropriate to go country by country

or can we look at just regionally?

Mr. CAMP. I think it would—I don’t know. Jim? I think it would

be more rational to go country by country, because we’re doing different things in different countries, rather than putting the accounts together. That would be my preference.

Senator CHAFEE. OK. Sounds good.

Mr. CAMP. OK. Maybe I could address, in particular, the ESF

and FMF for each of the countries. And, Jim, do you want to handle the DA and CSH accounts?

Let me start with a couple of the big ones. And that would be

Afghanistan ESF, in particular, where we have a request, in 2006,

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for $430 million. A lot of this is focused on infrastructure in Afghanistan. The infrastructure needs in Afghanistan are simply

enormous. This funding is intended for items such as completion of

the major road between Kandahar and Herat, which is part of the

larger ring road around Afghanistan. It is intended for farm-tomarket roads, smaller secondary roads, and even graveled roads

throughout the country. It is—it will help rebuild the irrigation

ditches that were destroyed over many years, some of which were

built by USAID in the 1950s, but have deteriorated over the years.

Power generation is a huge issue in Afghanistan. A lot of that

money is going for thermal power-generation plants and the like.

That’s one of our really big-ticket items. The INCLE, International Narcotics and Law Enforcement, $260

million for Afghanistan. This is focused on the—several things. One

is the emerging huge counternarcotics issues we face in Afghanistan. We are working—we have an estimate, this year, of something like 206,000 hectares of land under poppy. We’ve got to get

this down. And we’re focusing on several different methods: Eradication, interdiction, police enforcement, public information. All of

that is in that INCLE account. And then, as well, police training,

the Afghan national police, building up the security forces of Afghanistan, that is a very important portion of that account.

Let’s see, Jim, do you want to talk about the CSH and DA accounts in Afghanistan?

Mr. KUNDER. In the 2006 budget request, we are not requesting

any development assistance money for Afghanistan. We’re relying

extensively on the ESF account. We are requesting $42.8 million in child survival and health. Despite the progress, obviously Afghanistan has some of the worst socioeconomic indicators in the world, very high infant mortality rate,

very high maternal mortality rate. We are working with a very receptive Ministry of Health to reform the delivery of healthcare in

Afghanistan, build more rural clinics across the country and try to

get those clinics made part of an overall coordinated healthcare

system that reaches out to isolated populations across the country.

And most of that child survival and health funding will go to build

more rural clinics, staff those rural clinics, and help reform the

Ministry of Health.

Mr. CAMP. Moving on to Pakistan. Here, the big-ticket items, if I may, are $300 million for ESF and $300 million for FMF. This

is part of the President’s multiyear commitment to Pakistan, to

President Musharraf, of $3 billion over 5 years. This is the second

year of that program.

The FMF is focused on helping Pakistan help us in the global

war on terrorism. It will mean providing the means to help Pakistan combat remnants of al-Qaida in the frontier areas. It relates

also to Pakistan’s own defense needs.

The ESF is divided, $200 million and $100 million—$200 million

for budget support, $100 million for education and a variety of social-sector needs that Pakistan faces.

Jim, do you want to add to that?

Mr. KUNDER. I’m not sure what would be most helpful. We have,

obviously, a detailed breakdown of exactly what individual projects

the money is going for. Do you want me to go through those in deVerDate 11-MAY-2000 13:57 Oct 05, 2005 Jkt 000000 PO 00000 Frm 00025 Fmt 6633 Sfmt 6602 963433.SEN SFORELA1 PsN: SFORELA1
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tail, sir? I’ll be glad to do it at whatever level of detail you want.

I’m not sure you want to spend the time, I’ll be glad to do it.

What’ll——

Senator CHAFEE. Well——

Mr. KUNDER [continuing]. Be most helpful?

Senator CHAFEE. What would be helpful for me is: Where are you

taking from as you receive the increases? How do you make priorities as you look at the region? You mentioned just—Afghanistan,

up on the narcotics; in Pakistan, up on the military, foreign military financing. Where is it coming from?

Mr. CAMP. This is part of the larger request. We’re not—we, unfortunately, are increasing most of our accounts in South Asia, so

we are not—we don’t find a lot of areas to cut in South Asia. Because we have such growing, large, expanding programs in Afghanistan and Pakistan, our programs in the rest of the region have

traditionally been rather small by comparison, including in India

and Bangladesh. So we’re not really drawing from South Asia programs. We’re requesting new money, in many cases.

Senator CHAFEE. Now, my chart has, when you put all the programs together—development, child survival, transition initiative,

economic support, narcotics, law, Peace Corps, refugees, foreign

military financing—fiscal year 2004 was $2.4 billion, and this year,

total for the region is $1.8?

Mr. CAMP. I don’t have that chart in front of me. One big difference—and this may account for the variation. Last year, we requested substantial amounts for FMF in Afghanistan—let me look

at my chart just a moment—$400 million in FMF for Afghanistan.

We’re down to zero this year in our request because that $400 million in 2005 was primarily for training of the Afghan National

Army. That was implemented by the Department of Defense. This

year, in a change in our accounting, the Defense Department is

asking for the money for Afghan National Army training, rather

than State Department. So that’s an accounting change that accounts for at least $400 million of that.

Mr. KUNDER. I believe, sir, the other major factor in all of this

is the heavy use of supplemental funding for Afghanistan. I don’t

have the chart that you have in front of you. But if you’re looking

at year by year, what we would call, operating-year budget, actual

expenditures in the year, as opposed to budget request, then you

would also have to look at the substantial supplemental request for

Afghanistan and add those numbers in, as well. I know it’s a separate issue about whether we should be asking for the money in

supplemental funding, as opposed to the 2006 budget, but I believe,

when you compare historical expenditures to budget requests, then

we’d have to weave in the supplemental requests, as well.

Senator CHAFEE. Thank you, you’ve answered my question.

Senator Boxer.

Senator BOXER. Thank you so much, Mr. Chairman.

Thank you very much for your testimony. And could you send

Secretary Rocca our best wishes and hope that she has a speedy

recovery?

Mr. CAMP. Thank you; I’ll do so.

Senator BOXER. I want to talk a minute about Afghanistan. I

have a very soft spot for Afghanistan. I think our country does.

23

This is a nation that was crushed by the Taliban, and it was the

tragedy of 9/11 that led to their liberation, because, otherwise, we

were not doing that much. And as the author of the first resolution

that called on President Clinton not to recognize the Taliban, I was

aware—not of my own work, but because of the work of many feminists in America—I was very aware of what the Taliban was doing

to the women there, essentially making them invisible, or worse.

So when we had what I call this ‘‘accidental liberation,’’ it was

this amazing opportunity to free these good people. And I think

that Hamid Karzai is really an extraordinary human being.

And I also think that, were it not for Iraq and the fact that it’s

costing a billion dollars a week there, we could have had the resources necessary. And I feel it is, you know, exceedingly sad, because, in Afghanistan, I think we have a situation where we could

work with them to create a true model of democracy and freedom,

but, because we are so hampered by our lack of resources, it’s very

difficult.

And I want to talk to you about the status of women there, because, when you gave your report, it was very glowing, but what—

you didn’t talk about the latest report by the Human Rights Watch,

and I want to ask you about that.

First of all, we continue to see delay in parliamentary elections.

I want to ask you about that delay, how you view that. In a recent

article, Nisha Varia, of Human Rights Watch, wrote—and I’d ask

unanimous consent that Human Rights Watch article, published in

The World Today, be placed in the record.

Senator CHAFEE. Without objection.

[The article referred to follows:]

[From Human Rights Watch, Mar. 1, 2005]

STRUGGLE FOR RIGHTS

(By Nisha Varia)

Images of long lines of Afghan women patiently waiting to cast their votes in last

October’s presidential election, and the candidacy of a female doctor for president,

seem vividly to symbolise the progress of women since the fall of the Taliban just

over 3 years ago. The images of hope are not wholly misleading. Large numbers of

women participated as voters, poll workers, and civic educators in many parts of the

country. However, the real test—for women’s rights, and for Afghanistan itself—lies

ahead, with local and parliamentary elections. This time women will run for office

in greater numbers, and the rule of local warlords will be at stake as never before.

The parliamentary and local elections, to be held later this year carry a greater

risk of violence, vote-buying, and intimidation, with intense jockeying for control

over districts and provinces. Given the slow pace of disarmament and demobilisation

and the continued security vacuum, the omens are mixed, at best. From attacks on

girls’ schools to death threats, violence against women remains routine.

The areas with the most Taliban and insurgent activity continue to be particularly hostile to women’s rights. The insecurity and attacks have prevented many aid

projects in the south and southeast. Thus, in Zabul province, only 1 percent of 7-

to 12-year-old girls attends primary school. In Uruzgan province, only 2 percent of

those who cast their ballots in the presidential election were women.

FACING DANGER

In theory, women’s political rights are clearly outlined in the new constitution. It

guarantees men and women equal rights and duties before the law, and reserves

a quarter of the seats in the lower house of parliament, the Wolesi Jirga, for women.

One-sixth of the upper house, the Meshrano Jirga, is also reserved for women, by

presidential appointment.

In practice, things look very different. Independent candidates face violent retaliation if they run campaigns advocating justice and women’s rights. The worry is that

24

the only women who will feel safe enough to stand will be compliant daughters, sisters and wives of local commanders, or other proxies, who promise to toe the party

line.

Women still struggle to participate in the country’s evolving political institutions.

This is not just a question of social expectations, or about the conservatism of Afghan society, it is to do with power. Those who put their heads above the parapet

powerfully describe the dangers that they face. From Kabul to Kandahar to Herat,

women talk of how the failure of disarmament and the continued dominance of regional warlords threatens their ability to work and speak freely.

Women aid workers, government officials, and journalists face harassment, violent

attacks, and death threats. Those who challenge the powerful, conservative elements of the country’s political structures are targeted because they can be made

into chilling examples for other women considering political activity.

Last June, gunmen fired into the home of a women’s rights activist who had spoken publicly about sexual harassment, trafficking, and violence against girls. The

bullets missed her by inches. ‘‘To fear losing your life,’’ she told me, ‘‘is part of living

in this country.’’

One organisation was forced to close a project that provided classes for internally

displaced women in the central Panjshir region. Two armed men declared: ‘‘We don’t

want to see you here again or else you risk your lives.’’ The provincial government

could not provide safety guarantees. In the words of one staff member: ‘‘Nothing

worked. We felt we had lost.’’

In the north a woman working for a literacy programme was repeatedly threatened by local strongmen. They told her: ‘‘We will kill you as an example to other

women.’’ A magazine editor says she has been threatened many times, but has not

even reported the threats, because to do so would be pointless. ‘‘If I want to report

it, what can [the government] do? Nothing at all.’’

The pervasive mood of fear, and the lack of accountability for perpetrators of violence, could seriously undermine women’s participation in the elections. These are

not isolated examples, I talked to more than 80 women from around the country

considering running for office. Almost all say they expect warlords and dominant political factions to intimidate them through violence or threats if they decide to become candidates.

Some say they will not run because they are afraid for themselves and their families. These fears of harassment are often reinforced by previous threats women faced

during the emergency and the constitutional Loya Jirga grand councils, or in their

everyday work. As one female community leader in northern Afghanistan said,

‘‘Most of the women who are running have connections with [General Rashid]

Dostum or [Governor Mohammed] Atta. Their men will come at night and make

problems for my family so it’s not possible [to run for parliament]. I have to sit

quiet.’’

Others are determined to be candidates—but are clear about the risks. One

woman told me: ‘‘I am sure, l00 percent, [military factions] will make problems for

me. I will try, what else can we do? For five years, they should take us hostage?

If they kill me, no problem, but I will run for parliament.’’

WARLORDS REMAIN

Part of the underlying problem is that many of the men who replaced the Taliban

share the same views on women that made the Taliban so notorious. But another

key reason is that the United States and its allies have helped prop up regional

warlords and their factions—many with atrocious human rights records—in the

fight against the Taliban and Al Qaeda. These warlords have had a chokehold on

regional and local governments.

There has been no coherent strategy for helping President Hamid Karzai remove

the warlords from power and replace them with civilians loyal to the central government. The replacement of General Mohamed Qasim Fahim as defence minister in

Karzai’s new cabinet, is welcome. However, the president failed to appoint women

to powerful cabinet posts, relegating them to traditional roles overseeing ministries

for women and young people. And at the local level, many influential provincial governors—in effect, more militia leaders than civilian governors—remain in place.

LAWLESS

NATO leads the international peacekeeping force but has repeatedly failed to

muster the necessary resources to expand its presence throughout the country.

NATO member states, while in theory acknowledging the security needs, and recently expanding their activities in the East, have not translated this into decisive

action. In the meantime, much of the country remains lawless.

25

Again and again, Afghan women activists identify improvement of the security environment as the most significant step that the government and international actors

can take to ensure their freedom to assert political rights without fear of violence.

Almost all who talked to Human Rights Watch expressed their dismay at the failure

of the disarmament process, the continued dominance of warlords, and the lack of

accountability for abuses.

An expansion of NATO-led peacekeeping troops throughout the country and renewed efforts at disarmament could help transform it from the rule of the gun to

the rule of law. Instead, Afghanistan remains one of the most poorly funded conflict

zones in the world.

The Taliban stripped women and girls of their most basic rights. Banished completely from public life, the slightest infraction could result in arrest or execution.

With the fall of that regime at the end of 2001, it seemed such nightmares were

a thing of the past. But the pressures on women today are sometimes almost as severe as they were in that brutal era.

Three years ago, the United States, Britain, and their allies pledged to support

women in their struggle to reclaim their rights, and to provide a supportive environment for them to do so. After decades of conflict, those promises should be kept.

Senator BOXER. She wrote that, quote, ‘‘The parliamentary and

local elections to be held later this year carry a greater risk of violence, vote-buying, and intimidation, with intense jockeying for control over districts and provinces.’’ And she goes on, ‘‘Given the slow

pace of disarmament and demobilization and the continued security

vacuum, the omens are mixed, at best. From attacks on girls’

schools to death threats, violence against women remains routine.’’

And you didn’t mention that in your statement.

What we know is, many women in Afghanistan still live in fear,

especially in the southern parts of the country. NATO only has

8,500 troops conducting peacekeeping duties in a country that’s the

size of Texas. And I don’t have a lot of confidence that women will

be able to vote without facing threats, violence, and intimidation.

Now, as I said, we’re spending a billion a week in Iraq, and the entire ask for Afghanistan is $1.3 billion in economic and development assistance. So I want to know how much of that assistance

will be directly targeted to improve the lives of women. And where

in your budget might I find that?

Mr. CAMP. OK. Several good questions. Let me start on the parliamentary-election side.

I think we share, with President Karzai, the desire to see those

parliamentary elections take place as soon as possible. Obviously—

you know, the Bonn Agreement talked about having them by June

2004, I believe. That deadline has obviously passed. There was a

decision taken last year to separate the Presidential and parliamentary elections. Now we are faced—and I would say, more

pointedly, Afghanistan is faced—with moving forward with those as

quickly as possible.

Senator BOXER. What does that mean?

Mr. CAMP. Well, it means as soon as the logistics can be arranged. And I would say security, as well, is part of that. We don’t

have a date yet. We would like—it’s not really up to us. The Government of Afghanistan has to decide when it can hold those. I

know that President Karzai wants to do those as soon as he possibly can. He’s working with the United Nations on the logistics

and on the—basically, the modalities of getting this done.

Senator BOXER. Do we have anything in the budget that’s—to

help with this?

Mr CAMP. Absolutely.

26

Senator BOXER. And where would we find that?

Mr. CAMP. That would be in the Afghanistan ESF. That is—actually, it’s 2005 supplemental, I believe, to assist Afghanistan in the

holding of elections. We made a large contribution——

Senator BOXER. And how much is that?

Mr. CAMP. I’m sorry?

Senator BOXER. How much would that be?

Mr. CAMP. I do not know the answer to that right now. I think

it’s $60 million, but I’d have to check and get back to you on that.

Senator BOXER. Yes.

Mr. CAMP. We contributed——

Senator BOXER. I need to know that.

Mr. CAMP [continuing]. For the parliamentary—for the Presidential election. We want do the same for the parliamentary.

Senator BOXER. Yes, I would like you to get back to us, if you

can, on how——

Mr. CAMP. Sure.

Senator BOXER [continuing]. Much that is, and if it is in the supplemental.

Mr. CAMP. OK. It is in the supplemental. And as far as what the

exact amount was, I’ll get that to you. In fact, my colleagues might

have the answer, behind me.

[The submitted written answer to the requested information follows:]

Question. What is the USG contribution for the Afghanistan National Assembly

elections?

Answer. The United States has already contributed $12 million to the United Nations for Afghanistan’s 2005 National Assembly elections, scheduled for September

18, 2005. Once funds are available from the administration’s FY05 supplemental

funding request, the administration intends to make an additional significant contribution consistent with U.S. support for the Presidential election last year.

We are also actively reaching out to the international community on this issue

and encouraging them to help fully fund the elections.

Senator BOXER. OK.

Mr. CAMP. But on the question of——

Aha. Thank you very much. In the supplemental, a request includes $280 million to support preparation for upcoming parliamentary elections and to extend the stabilizing influence of the new

democratic government. So that combines two things. But the elections portion is substantial.

Senator BOXER. All right.

Mr. CAMP. The United Nations will be putting out an appeal for

every—a global appeal for support in the elections.

Senator BOXER. Good.

Mr. CAMP. We will be supporting that. But also on the

followup——

Senator BOXER. Good.

Mr. CAMP [continuing]. Of the $280 million——

Senator BOXER. OK.

Mr. CAMP. The question of women’s participation in elections. I

think we can take some confidence from the fact that, in the Presidential election, women’s participation was actually rather high, as

a percentage, higher than some might have expected.

Senator BOXER. What was it?

27

Mr. CAMP. Forty percent is the figure that I recall. And I think

that——

Senator BOXER. And what was the participation of men? How

many——

Mr. CAMP. I’m sorry. Forty percent of the voters were women.

Senator BOXER. So 60 percent of the voters were men.

Mr. CAMP. Right.

Now, moving into the question that you asked about where funding exists in our budget for—focused on women and girls. I would

say it is virtually everywhere. It is a crosscutting issue. We are

providing funding under ESF for women’s and girls’ education. We

are—in our health programs, we have programs focused specifically

on women and girls. I think we’re helping to set up hospital wings

devoted to women and girls, which, in the Afghan social context,

is necessary. Training of female doctors. So it’s——

Senator BOXER. OK.

Mr. CAMP [continuing]. Across the board.

Senator BOXER. If you could get back to us with a breakdown——

Mr. CAMP. OK.

Senator BOXER [continuing]. It would be very helpful. Because

the committee has been interested in this, and we have passed

some amendments that passed the committee; we never got the foreign relations bill, authorization bill, onto the floor—but that deal

with women and girls. So I would be very interested.

So do you not agree with Human Rights Watch when they say

that the attacks on girls—I’ll read it, exactly, to you—‘‘Women aid

workers, government officials, and journalists face harassment, violent attacks, and death threats. Those who challenge the powerful

conservative elements of the country’s political structures are targeted because they can be made into chilling examples for other

women considering political activity.

‘‘Last June, gunmen fired into the home of a women’s rights activist who had spoken publicly about sexual harassment, trafficking, and violence against girls. The bullets missed her by

inches. ‘To fear losing your life,’ she said, ‘is part of living in this

country.’

‘‘The pervasive mood of fear, the lack of accountability for perpetrators of violence, could seriously undermine women’s participation. These are not isolated examples. She spoke to more than 80

women from around the country considering running. Almost all

say they expect warlords and dominant political factions to intimidate them through violence, threats, if they decide to become candidates.’’

And she goes on—this is Human Rights Watch—‘‘Part of the underlying problem is that many of the men who replaced the Taliban

share the same views on women that made the Taliban so notorious. But another key reason is that the United States and its allies have helped prop up regional warlords and their factions—

many with atrocious human-rights records—in the fight against

Taliban and al-Qaida. These warlords have had a choke hold on regional and local governments.’’

What is your response to that?

Mr. CAMP. My response would be that, in fact, our program is designed very much to ensure that the central government takes—reVerDate 11-MAY-2000 13:57 Oct 05, 2005 Jkt 000000 PO 00000 Frm 00031 Fmt 6633 Sfmt 6602 963433.SEN SFORELA1 PsN: SFORELA1
28

gains authority over the whole country and that, in fact, warlords

are minimized, marginalized, and eventually——

Senator BOXER. They’re minimized and marginalized.

Mr. CAMP [continuing]. And eventually eliminated.

Senator BOXER. You think they are being minimized and

marginalized.

Mr. CAMP. I think that our DDR program, in particular, is focused on making sure that people—the warlords are brought into

Kabul, lose their, sort of, regional support, in terms of militia. It’s

a long-term task. And I would certainly not dispute the fact that

there is still—there are still problems, particularly in the south, I

would say, where the traditional social structure is extremely conservative. There are problems. And that—those are what we’re trying to address.

And I would say that our funding commitment to Afghanistan is

quite substantial. I think the numbers that we are citing are large

numbers and seek to solve the problems that Human Rights Watch

has identified.

Jim, did you have anything to add on——

Mr. KUNDER. I’m glad you raised it, Senator. When we first went

into Kabul, in January 2002, we made a point of making our first

grant—first USAID grant—to the Ministry of Women’s Affairs, as

both a practical and symbolic indication of how important this

issue was to us.

I think you made a comment earlier about the Taliban and it’s

oppression of women. But I think, in fairness, that to understand

the depth of the problem, women in rural Afghanistan live in medieval conditions in many places. The problem is a structural problem, with deep structural roots, cultural roots, as Don just said. So

that to solve that problem is going to require a long-term approach.

Now, we’ve taken the congressional earmark that was in the 2005

appropriations bill for $50 million, specifically targeted for Afghan

women, and we’ve exceeded that earmark. We’re trying to drive resources to women. And we just met again with the Minister of

Women’s Affairs, Minister Jalal, to try to come up with a comprehensive and accelerated program of establishing women’s centers in regional capitals.

We’re taking this very seriously. But while life was dramatically

worse for urban elite women in Kabul under the Taliban, my honest view is that women in rural Afghanistan had it rough before

the Taliban, during the Taliban, and still have it rough because of

these structural problems.

So we’re taking the earmark seriously. We’re taking cooperation

with the Ministry of Women’s Affairs seriously—we’re passionately

committed to doing something about this. But I would be misleading you if I suggested that the allocation of $50 or $60 million

is going to dramatically change things in the short term.

I have one last comment—and I feel very strongly about this—

there have been bombings of girls’ schools in the countryside, and

there have been attacks on women activists. But, to some extent,

this is us being on the offensive. The reason there are attacks on

girls’ schools—and they’re in the most isolated regions—is that we

are pushing girls’ schools up into the most isolated valleys and regions of the countryside, in places where there are men who do not

29

want women to leave medieval conditions, and they are pushing

back. But we are pushing very hard. This it not happening in

downtown Kabul, or even downtown Kandahar. It’s happening in

the most isolated rural areas. So we’re seeing those incidents, but

we’re seeing in, in part, I would argue, because democracy is on the

march.

Senator BOXER. Well, I’d just make the point that when you talk

about deep culture, there—from my conversations with Afghan

women, before the Taliban women were quite involved in society.

So you’re not talking about something that goes back, you know,

hundreds and thousands of years, as you could point in other

places.

I would just say thank you very much for your comments, both

of you, and especially those last comments. I think it shows that

you do get what’s going on there.

I would just make a point to you, Mr. Chairman—I don’t know

whether you would agree with me or not—but I feel that the opportunity here in this country is—in Afghanistan—is just tremendous.

And it, to me—and it’s true that a billion-three is not chump

change, and no one would suggest that at all. But after years of

the Taliban and this opportunity that we have, it is just so unfortunate that we don’t have more international troops outside of the

main cities.

And I know we have more now than we did. It was a big push

by this committee, in many ways, to just get them to get outside

of Kabul. And to the extent that we can do more there—we obviously are hampered by the unrelenting cost of our military in Iraq.

I mean, it’s just plain and simple. And I’ll say again, a billion a

week on the military, a billion-three for the entire year for aid to

Afghanistan, a place where I think we have an atmosphere, an underlying atmosphere, of change, that we really could exploit, in the

best sense of the word.

So I just thank both of you for your comments, and I look forward to getting a followup from you on, if you can analyze the aid,

both in the supplemental and in your regular budget request, and

how you see the different line items being applied to condition of

women in the country.

Mr. CAMP. Be glad to.

[The submitted written answer to the requested information follows:]

Question. Can you provide a breakdown in fiscal year 2005 of how much economic

and development assistance for Afghanistan will be directly targeted to improve the

lives of women (provide a breakdown by program), and where in the budget it might

be found?

Answer. While exact funding figures will be unavailable until final program allocations of the fiscal year 2005 supplemental have been determined, we plan to apportion a significant amount of funding directly at initiatives designed to improve

the lives of women and girls. Project in fiscal year 2005 to include:

• Health programs and services that have a direct impact on women;

• Education programs designed to increase school attendance for girls, expand literacy, and commence renovation of the Carte Seh Girls’ School;

• Promotion of Afghan civil society opportunities for women through training and

grants to women-led NGOs;

• Entrepreneurship training workshops for women and networking assistance to

develop market linkages inside and outside Afghanistan;

30

• Integrated Development programs to empower and strengthen women-led community organizations such as development councils, saving and investment

clubs, and enterprise development vehicles;

• Expanded focus on alternative livelihood opportunities in provincial areas (i.e.,

employment creation programs and small business and vocational training.

These proposed activities are above and beyond the $50 million earmarked by

Congress in the fiscal year 2005 conference report for support of programs that directly address the needs of Afghan women and girls. In response to that earmark,

over $56 million within existing projects have been identified and tailored to include

activities that have a direct impact on women and girls.

In fiscal year 2006, we fully expect to continue our focus on projects aimed at improving the lives of Afghan women and girls. While funding levels for the next fiscal

year are not yet determined, it is anticipated that our fiscal year 2006 programs

benefiting Afghan women and girls will approximate those planned for fiscal year

2005. As figures become available, we will be glad to provide you with further information on our activities in this area.

Senator BOXER. And I think if we can make real progress there,

it also sends a message to a place like Saudi Arabia, where the

women couldn’t even vote in their election, and the women can’t

drive, and it’s a disastrous situation.

The last point I would make is, if you ever, sort of, get tired of

hearing about the condition of women in Afghanistan, just put on

a burqa, once, for 15 minutes, and keep it on, even though you’re

going to want to pull it right off. And you—the sense that you have

is of being completely invisible and having no soul and no humanity whatsoever. And I think if everyone could do that—I wish everyone could do that, who’s interested in foreign policy, to understand what it means to women throughout the world who are made

to feel invisible.

And as Bernard Lewis said—the noted historian, a conservative

one, at that, when he was asked, and I saw this interview, which

I am paraphrasing—‘‘If you had to say what—why is the economic

development in the Muslim world behind the times?’’ He said, ‘‘If

I had to give one reason, it would be the condition of the women

and the way the women are treated.’’

So there’s so much to this, liberating the women there, because

it’s going to mean so much for democracy, so much for economics;

and, frankly, it’s going to mean so much for our spirit, because, if

we do that, we’re helping, you know, half the world’s population

just by fostering equality.

So I thank you very much, Mr. Chairman.

Again, I thank the witnesses.

That would conclude my questions.

Senator CHAFEE. Thank you, Senator Boxer.

I have a couple of followup questions, if I could, on the counternarcotics effort. What is the real truth? We have, at some of our

hearings, testimony that it—the spread of the poppy-growing is destabilizing the country; it’s getting worse. I think one of our witnesses said they’re growing—they grow the poppies right in the

town square in some of the communities. And then the militias

that are—the warlords that are growing the crops have their own

militias, and it affects the judicial system, such as it is. The corrosive aspect of narcotics in Afghanistan. What is happening? And

are dollars being well spent? You testified to eradication and crop

substitution and some of the other initiatives that we have there.

But are we making any gains?

31

Mr. CAMP. I would start out by saying it is a huge, huge problem.

There is no denying that. Two hundred thousand hectares under

cultivation is a frightening statistic. Afghanistan has quickly surpassed Burma as the largest producer of opium. That is something

that no one can ignore, and it is something that has focused us to

look very, very severely at our programs and what we can do to

begin to address this problem. And I won’t say that we’re going to

end it next year. It is an ongoing problem that we have to address.

I think we’ve come up with a coordinated program that is going to

be making progress over the coming years. That’s all I can commit

to, I would say. Certainly, eradication is an important part, but it

is not the entire part.

And I would also say that, first of all, Afghanistan is fully committed—the Government of Afghanistan and President Karzai is

fully committed to wiping out this scourge. He has strong moral

authority that he is using in this respect. Growing narcotics is

against Islam, and that is a message that we are sending, and that

the Government of Afghanistan is sending, through every public-information medium it has.

But we’re also working on interdiction, we’re also working on alternative livelihoods. And I think USAID is heavily involved there.

Mr. KUNDER. Sir, first of all, I would like to say, for the record,

to Senator Boxer’s comments, I don’t get tired of hearing about

women’s issues in Afghanistan, so you don’t have to worry about

that. We’re more than glad to debate that anytime.

All of our experience around the world in counternarcotics says

that we’ve got to have all three legs of the stool in place. We’ve got

to have good law enforcement. We’ve got to have active interdiction. And we’ve got to have an economy that gives people other alternatives. Unless you have the economy, interdiction, and law enforcement in place, you’re not going to have success. And because

the infrastructure, the institutional infrastructure was so damaged

in Afghanistan after 23 years of civil war, we don’t have law enforcement active in the countryside.

So in terms of short-term gains, until we get the law enforcement

and the interdiction and the economic opportunities all working in

sync, it’s going to be a while until we get this thing turned around.

Our administrator, Andrew Natsios, just came back from Afghanistan last week. He was in Nangahar Province, one of the centers

of poppy-growing. And his sense, anecdotally, talking to farmers,

was that these messages are getting through—the public-education

message that Don is talking about, the public-health message, and

President Karzai’s personal strong opposition to narcotics. What

Andrew was out there seeing were jobs programs, where people

were rebuilding irrigation systems as an alternative to growing

poppy. And they were successful. Now, we’re getting anecdotal information that this combination of programs is starting to have an

impact in the countryside.

I think, truth in advertising, you’re not going to see an immediate dramatic decline in the next year, because it’s going to take

a while to rebuild the law-enforcement infrastructure and the economic infrastructure in the countryside. Over time, I think we’re

going to win it better than we are in Latin America, because we’ve

got open countryside to work in, we’ve got poppies that happen to

32

grow red flowers on them that are easily noticeable, and some factors that are on our side. But until we get all three legs of the

stool—interdiction, law enforcement, and alternative livelihoods—

working in sync, we’re not going to have an immediate dramatic

turnaround. That’s my estimation.

Senator CHAFEE. Well, thank you very much.

One last question. On the ring road, what’s the status? What do

we have—what have we completed, and what do we have in front

of us?

Mr. KUNDER. The main section, from Kabul to Kandahar, south,

the part that was completed last year, is handling traffic. We’ve

had some maintenance problems. We’ve had to go back to a couple

of contractors, sort of the way we do in the United States, who

didn’t do quite as good a job paving as we expected them to. But,

essentially, that segment of 240 miles from Kabul to Kandahar is

in service.

The next stretch that we’re focused on is the one to the west,

from Kandahar to Herat. The U.S. Government is responsible for

220 kilometers; the Saudis and Japanese, about 100 kilometers

apiece. We are under construction. We are shooting for a target

date of completion of December of this year for the Kandahar-toHerat section of the road.

On the good-news/bad-news front, we had record snows in Afghanistan this winter. That’s good news for irrigation and agriculture. It was bad news for highway construction. So we’ll be reporting to you later this year about whether we’re going to meet

the December deadline for the Kandahar-to-Herat portion.

The northern portions of the ring-road, where the Europeans and

the World Bank are working, they have not made quite as much

progress. But the United States sections, between Kabul to

Kandahar, and then Kandahar to Herat, we’re, generally speaking,

on schedule.

Senator CHAFEE. Do you have many bridges? Is that an issue?

Mr. KUNDER. It is a huge issue. The section from Kandahar to

Herat is the major drainage basin for the Helmand River and others, that are subject to rapid flooding in the springtime from the

Hindu Kush Mountains, some of the highest mountains in the

world, so that the construction of bridges and culverts is a huge engineering task. And so, that’s a major part of it, and that’s one of

the reasons we have the timeline we do.

Senator CHAFEE. I’ve been asked to ask a question on behalf of

the committee, and that is: What is the status of our assistance

programs to Nepal?

Mr. CAMP. The status of our assistance programs to Nepal is,

frankly, that they’re under review, after what happened on February 1. We’re looking at how we can express our dismay at what

the King has done, without harming the people of Nepal, and without making any more likely the possibility of a Maoist takeover. So

we have really not come to a conclusion as to how best to deal with

the assistance issue here. We are hoping that the King will do

what we have urged, and what the Indians and the British and the

rest of the international community has urged, which is to quickly

restore civil liberties and release political—the prisoners that have

been picked up after February 1, and restore multiparty democVerDate 11-MAY-2000 13:57 Oct 05, 2005 Jkt 000000 PO 00000 Frm 00036 Fmt 6633 Sfmt 6602 963433.SEN SFORELA1 PsN: SFORELA1
33

racy. If we see no progress on that, then I think we’re going to have

to take a very careful look and see how we use our assistance programs in that respect.

Senator CHAFEE. Thank you very much, gentlemen. And we will

recess for the second panel. Thank you once again.

[Recess from 9:56 to 10:02 a.m.]

Senator CHAFEE. Welcome, Mr. Satterfield. And we will welcome

your testimony.

STATEMENT OF HON. DAVID M. SATTERFIELD, ACTING ASSISTANT SECRETARY, BUREAU OF NEAR EASTERN AFFAIRS, DEPARTMENT OF STATE, WASHINGTON, DC

Ambassador SATTERFIELD. Thank you very much, Senator. Very

pleased to be here this morning.

I would ask permission for the written statement, which I have

prepared, to be entered into the record.

Senator CHAFEE. Without objection.

Ambassador SATTERFIELD. And I understand that time is short

today, and I think there will be a number of questions asked. Rather than do a normal summary statement, I’d simply like to note,

I have just returned, yesterday evening, from a rather extraordinary 3 days in Beirut, Lebanon. The developments that we have

witnessed on the ground in that country, which emerged from its

civil war 15 years ago, but which has remained under Syrian dictate, in terms of its political process, and with the presence of Syrian occupying forces and intelligence elements on the ground, is

now moving forward in a quite exceptional manner. Secretary of

State, our colleagues in Europe, the French Government, have spoken to these developments in London last night. We are doing all

we can to support and encourage a continuation of an atmosphere

in Lebanon which allows the people of Lebanon, at long last, to

make their own political decisions in an atmosphere of freedom—

freedom from violence, freedom from threat of intimidation. It is

long past time that Lebanon be able to assume its sovereign independent role in the region. But we are very, very encouraged by

what is taking place on the ground there.

Thank you, Senator.

[The prepared statement of Ambassador Satterfield follows:]

PREPARED STATEMENT OF HON. DAVID M. SATTERFIELD, ACTING ASSISTANT SECRETARY, BUREAU OF NEAR EASTERN AFFAIRS, DEPARTMENT OF STATE, WASHINGTON, DC

Mr. Chairman and members of the committee, thank you very much for providing

me the opportunity to come here today and discuss the year ahead for the Middle

East region.

As we look forward to the year ahead, it’s safe to say that we have greater reason

for optimism for the region than has been the case for many years. We see as harbingers of a much brighter future for the people of the region:

• The political process under way in Iraq;

• New Palestinian leadership that has committed itself to an end to violence, a

return to negotiations with Israel, and internal reform;

• A rising tide of demand throughout the region for the political, economic, and

social reform that we believe is critical for regional security, stability, and prosperity; and

• Libya’s abandonment of its weapons of mass destruction programs.

Just over a month ago, we witnessed a historic day for the Middle East. Millions

of courageous Iraqi men and women, defying threats to their lives, lined up on the

34

streets to cast their votes in Iraq’s first democratic and transparent elections in generations. On that day, the Iraqi people demonstrated to the world their determination to shed the shackles of an authoritarian past and to build a democratic, stable,

and prosperous Iraq, at peace with its neighbors. The Iraqi people still face a challenging road ahead. But the United States remains firmly committed to providing

the support Iraq needs to progress in its transition.

In February, the United States Government sent an assessment mission to Iraq

headed by Ambassador Dick Jones. This mission aimed to take a fresh look at our

overall engagement in Iraq and ensure that we do everything we can to support the

Iraqi Transitional Government and maintain momentum in the political and economic development in Iraq throughout 2005. We are now assessing the results of

that mission.

As we look ahead, it remains clear that the success of Iraq’s transition will depend

upon continued progress in three key areas: Security, the political process, and the

economy and reconstruction.

The key to establishing and maintaining security in Iraq is the development of

Iraqi Security Forces capable of taking full responsibility for external and internal

security. The horrific suicide bomb in Hilla on February 28 was only the latest tragic reminder of the challenge that Iraq faces as it emerges from decades of dictatorship. The discipline and bravery exhibited by the ISF on Election Day gave us a

glimpse into what is possible as more Iraqi forces are trained, equipped, and

spurred by patriotism to serve and protect their country. It is this specter of capable

Iraqi forces that drives the insurgents to target Iraqis who are determined to support the new government. The capacity of the ISF also will increase as its leadership is trained, including more military officers developed through the NATO training mission. We are very pleased by NATO’s decision, taken during the President’s

visit last week, to increase participation in this critical mission.

Political progress will depend largely on Iraqi efforts to promote national unity,

both over the year ahead and in the long-term. On Election Day, some Iraqis chose

to stay home—some out of fear, and others out of alienation and disenchantment.

However, we are encouraged by the post-election statements of Iraqi leaders, calling

for broad participation in the political process moving forward. In 2005, according

to the Transitional Administrative Law: Iraq will form a Transitional Government;

the Transitional National Assembly will draft a new permanent constitution—to be

completed by August 15 and put before Iraqi voters in a referendum by October 15;

and elections for an Iraqi Government under the new constitution will be held in

December. Although the fundamental freedoms and protections set forth in the TAL

will serve as a guide, it will be up to the Iraqi people to decide the shape and content of the new constitution. Broad participation will be essential to the creation of

a pluralistic, democratic system of government that respects the rights and freedoms of all Iraqis.

It also will be essential to accelerate Iraq’s economic recovery and reconstruction.

We have seen significant progress on the economic side in Iraq, including debt reduction and movement toward WTO accession. Most importantly, international assistance and Iraq’s own national funding must continue to be applied in ways that

ordinary Iraqis can see and feel, particularly through the improved delivery of essential services. Development of a strong private sector is also a key to Iraq’s success. The goal is productive, immediate infrastructure improvements, which in turn

will stimulate sustainable job creation.

Finally, we are very encouraged by signs of increasing international engagement

in supporting the Iraqi people. The tremendous success of Iraq’s January elections

has been recognized by many countries and international organizations, which publicly reaffirmed their commitments to the reconstruction and political development

of Iraq. Moreover, some countries that were reluctant to participate in the past now

are stepping forward to assist Iraq. In coordination with the Iraqi Government, we

also are continuing to reach out to friends and allies; on February 22, the EU announced its readiness to cohost with the United States a conference to demonstrate

international support—political, economic, and security—to Iraq following its elections, if the Iraqis request such a conference.

Dramatic changes within the Palestinian Authority and between Israelis and Palestinians have also greatly improved the atmosphere in the Middle East over recent

months although the horrific terrorist bombing in Tel Aviv February 25 painfully

illustrates just how fragile that progress is, and how critical it is that the PA take

decisive action—now against terrorists who kill innocent civilians and act to subvert

progress. Following the overwhelming electoral victory by Mahmoud Abbas in a free

and fair Presidential election at the beginning of the year, the Palestinian Authority

has begun to take positive steps to implement many of the reforms that we have

long stressed are critical to the successful implementation of the road map and the

35

establishment of a stable, democratic, and economically prosperous Palestinian

State. We were struck by the robust debate within the Palestinian Legislative Council in recent days over the shape of the new cabinet, and the insistence of a majority

of council members that ministers be free of the taint of corruption and cronyism

that has long plagued the Palestinian Authority. General Ward’s presence on the

ground, working closely with the new Minister of Interior, General Nasir Yusuf, will

provide us with a greatly enhanced opportunity to aid crucial Palestinian security

reform.

Palestinians will go to the polls again this year to elect a new Legislative Council

for the first time in nearly a decade. These elections will be another strong signal

in favor of democratic reform throughout the region and will be a critical test for

President Abbas and his reform agenda. We anticipate that he will face a strong

challenge from Hamas and other extremist Palestinian groups. We are committed

to taking steps to demonstrate to Palestinians that their interests are best served

by cooperating with President Abbas, pursuing the path of peace, and abandoning

the destructive tools of terror. The President’s announcement of a United States

commitment to increase our aid levels to the Palestinians substantially to $350 million, subject, of course, to congressional approval, is intended to provide the immediate boost that we hope will help jump start the Palestinian economy and restore

Palestinian confidence in the future, and to ensure that Palestinian and Israeli interests are safeguarded as Prime Minister Sharon’s Disengagement Plan is implemented. Similarly, we are working both bilaterally and in multilateral channels to

encourage our partners in the region and internationally to increase their own economic assistance to the Palestinians to alleviate Palestinian poverty, reduce unemployment, rebuild critical infrastructure, and promote new private sector investment. We will work closely with the Palestinian Authority to ensure that the economic reforms required to make these assistance programs succeed are implemented.

The resumption of Israeli-Palestinian dialog is greatly encouraging; it gives both

Israelis and Palestinians new hope for the future. Successful implementation of the

Israeli planned withdrawal from Gaza this summer will be a key milestone marking

a move away from the violence of the past 4 years and toward a political process

that will allow implementation of the road map, which remains the internationally

agreed strategy for achieving the President’s vision of two democratic states, Israel

and Palestine, living side by side in peace and stability. As the President has made

clear, we continue to press on both sides the need to abide completely by the obligations and commitments they made on the road map.

We also look to the neighbors, especially Egypt and Jordan, to take steps that will

contribute constructively to the efforts of the two parties in making progress toward

peace. Egypt’s willingness to work with Palestinian security forces to improve the

security climate in Gaza, its hosting of the Sharm al-Sheikh summit, and the decision by both Egypt and Jordan to return their Ambassadors to Tel Aviv are all indicative of the many ways that these two states can play a crucial supportive role

in the peace process. Beyond the immediate neighbors, the other states in the region

also have important roles to play, not only in providing Palestinian economic assistance, but also in lobbying for internal Palestinian Authority reform, resuming contacts with Israel, reopening trade or other representative offices, and finally and forever abandoning the Arab League boycott, which remains an obstacle to peace and

economic advancement. With promising openings between Israelis and Palestinians,

we will be working aggressively over the coming months to encourage our friends

and partners in the region to help create a positive environment for peace.

As President Bush noted in his inaugural address, in our world today, the survival of liberty at home increasingly depends on the success of liberty in other lands.

In cooperation with our regional and G–8 partners, last summer we formally

launched last summer the Broader Middle East and North Africa Initiative

(BMENA), which will serve increasingly as a forum for mobilizing our energies to

promote democracy and reform with our partners in the Arab world and beyond. We

believe that our efforts to promote reform measures across the political, economic,

and education spectrum have already put these issues on the regional agenda to an

extent not previously known. The Forum for the Future held in Rabat last December laid out an ambitious agenda of programs in support of reform for this year.

The Palestinian and Iraqi elections have inspired prodemocracy forces throughout

the region to demand that their own societies similarly enjoy the benefits of true

popular participation in government. Further, through the Middle East Partnership

Initiative, this administration has strengthened a commitment to work cooperatively, using all of the resources available to the Department of State and USAID

for this region, with the governments and civil society in the region to support and

promote democratic, economic, and educational reform and to reduce barriers to

36

women’s full participation in society. The Middle East Partnership Initiative has requested additional funding for FY06 that will ensure that the United States is in

a position to continue playing a central role in developing programs that will advance this important reform and democratization agenda. Strengthening bilateral

economic ties through, for example, the conclusion of Free Trade Agreements, will

also promote economic reform in the region.

In his State of the Union address, the President stated that ‘‘the Government of

Saudi Arabia can demonstrate its leadership in the region by expanding the role of

its people in determining their future. And the great and proud nation of Egypt,

which showed the way toward peace in the Middle East, can now show the way toward democracy in the Middle East.’’ Both Egypt, with President Mubarak’s announcement that the Egyptian constitution would be amended to allow multiple candidates for the Presidential election, and Saudi Arabia, which is currently holding

unprecedented municipal elections, have taken modest but important steps in the

right direction. But much more remains to be done to promote political reform and

foster democracy. In particular, it is essential if true political reform is to take hold

that we see an end to politically motivated arrests, like that of Ayman Nour, and

a real commitment to accepting the principles of freedom of speech and expression

as a foundation block for democratic institutions. Intensifying our dialog on democracy and reform with these two critical regional partners, as with all of our friends

in the region, will remain a high priority for the administration as we look to the

future.

We continue to confront difficult, even daunting challenges in achieving our regional goals and objectives. Over the coming months, we will press ahead with our

critical work in support of the global war on terror. We will continue robust, cooperative efforts with regional governments to prevent terrorist attacks, disrupt terrorist

finance, and bring terrorists to justice. Through our assistance and training programs, we are helping our friends in the region build their legal, regulatory, enforcement, and operational counterterrorism capabilities, including strengthening regional military and law enforcement forces and financial oversight and regulatory

capabilities. Our highest priority is and will remain using all of our resources to protect American citizens and facilities, to prevent terrorist operations, to deny terrorists and their financiers refuge or support anywhere in the region and to eliminate

the disenfranchisement and despair that contribute to terrorist recruitment.

The pursuit of weapons of mass destruction by regional powers and nonstate actors remains a principal source of threat and instability in the Middle East. As the

President made clear in his visit to Europe last week, the United States and its key

European allies are in full accord that Iran must not be allowed to acquire a nuclear

weapon capability. A nuclear-armed Iran pursuing aggressive regional policies and

supporting terrorism, especially aimed at derailing Arab-Israeli efforts to achieve

peace, would pose a unique danger to regional and global security and stability.

Over the coming year, we will continue to work closely with our friends and allies,

particularly the United Kingdom, France, and Germany, in finding a means to convince Iran to abandon its efforts to develop this capability or to respond appropriately if it does not. The United States has demonstrated in Libya that it is prepared to respond positively to concrete steps taken to address United States WMD

concerns. In response to Libya’s implementation of its December 2003 commitment

to eliminate WMD and MTCR-class missile programs, the United States has returned United States diplomatic personnel to Tripoli, lifted the travel ban, removed

the National Emergency and effectively ended the economic embargo. Over the coming year, we will continue to develop our new relationship with the Libyan regime.

The tragic assassination of former Lebanese Prime Minister Rafiq Hariri also underscores the urgency of implementing UNSCR 1559, ending Syria’s occupation of

Lebanon and its interference in Lebanese internal affairs. We cannot say more

clearly or explicitly that Syria must leave Lebanon now. We have seen Syria’s words

to the effect that it intends to withdraw its forces to the Beqa’a valley, but the time

for words is past. We need to see Syrian action, and we will be watching very carefully to ensure that the parliamentary elections scheduled for this spring are allowed to proceed freely, fairly, and without any outside interference. The people of

Lebanon deserve to live in freedom, no less than any other people in the Middle

East or elsewhere. And, as we saw earlier this week, the people of Lebanon are now

demanding a voice in their own political future.

Finally, as we address these critical priorities, we are aware that we must also

confront unprecedented popular hostility to the United States in the Arab world. We

have developed a coordinated strategy that aims to explain our policies and culture

through a broad range of regional media as well as USG-funded outlets, cultural exchanges, English-language training, ‘‘American Corners’’ information centers, and

enhanced Arabic and Farsi websites to reach out to younger and nonelite audiences

37

in the region. Over the course of the year, we will be redoubling our efforts to

strengthen our public diplomacy outreach in the region.

Mr. Chairman and members, thank you very much for providing me with this opportunity to describe our views on the state of the Middle East region.

Senator CHAFEE. Thank you.

And as the hearing here is on the budget, can you talk somewhat

about how—your priorities in addressing the region?

Ambassador SATTERFIELD. Certainly.

Senator, our priorities with respect to the region are focused on

encouraging the key elements of the President’s program for the

Middle East; that is, to support continued developments in Iraq toward a democratic, pluralistic, stable, and prosperous state; to support peacemaking between Israel and the Palestinian Authority,

which both guarantee that Israel remains secure—secure in a regional context, secure as it moves forward with its extraordinary

step in withdrawing from the Gaza Strip and cities in the West

Bank; support for the new Palestinian Authority and the democratically elected President of that Authority, Mahmoud Abbas; support

for our friends and allies throughout the region, not just in traditional terms, Senator—for their security, for their development—

but also in terms of providing focused support for the process of regional reform and transformation.

The Broader Middle East/North Africa Initiative, which incorporates the economic pillar of the Middle East Partnership Initiative run by the Department of State, is very much keyed to encouraging, supporting, and sustaining democratic developments on the

ground throughout the Middle East.

The President and his Secretary have spoken out, quite directly,

on the fact that we have strategic partnerships, partnerships that

are vital to our broadest interests, in the Middle East and beyond,

with countries throughout the Middle East, including Egypt and

Saudi Arabia. But the fact of that partnership, and the fact of our

strong support for, and acknowledgment of, the steps being taken

by states—such as Saudi Arabia, and Egypt, in areas that include

the Israel/Palestinian peace process, Iraq, the global war on terrorism—does not mean that we’re not able, also, to address, as

partners and friends, those areas of internal reform or development

where we do see progress, as needed.

We will continue to make our focus on that, and you will see, in

the budget request, support for civil-society development, for broad

democratization, and for reform.

Senator CHAFEE. Thank you.

Having just returned from Lebanon, what is the status of our aid

to that country? And do you think there will be need for further

than you have put in the budget?

Ambassador SATTERFIELD. Certainly.

We are not recommending, at present time, an increased amount

of assistance for Lebanon. The amount—the moneys that we had

been providing to Lebanon have been targeted, through PVOs and

NGOs, at support for civil society, as well as support for development in those areas of the countries most deprived, primarily in

the rural areas. We will be looking, aggressively, given developments on the ground, at how we can best focus, perhaps more specifically, on preparing for democratic free and fair elections in LebVerDate 11-MAY-2000 13:57 Oct 05, 2005 Jkt 000000 PO 00000 Frm 00041 Fmt 6633 Sfmt 6602 963433.SEN SFORELA1 PsN: SFORELA1
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anon, including training of Lebanese elections observers, how best

to encourage the development of civil society there. And we will obviously come back and consult with the Congress, as developments

there may shift our own decisions with respect to assistance.

And I would defer to my colleague from AID for any further comment on that.

Mr. KUNDER. I think he said it all.

Senator CHAFEE. And moving away from the numbers to some of

the policy, is there concern about Hezbollah and their sphere of influence in Lebanon?

Ambassador SATTERFIELD. We’re obviously concerned, Senator,

about Hezbollah. We have made very clear, we regard Hezbollah as

a terrorist organization. We do not differentiate between the leadership which is involved in unacceptable support for, conduct of,

acts of violence and terror directed against Israel and the leadership which works on social, economic, political, or religious programs in Lebanon. We can’t make that decision. And we have

strongly encouraged our European allies, similarly, to take steps

addressing Hezbollah as a terrorist organization, particularly with

respect to the possibility of financing flowing to Hezbollah.

We are concerned about Hezbollah’s and Iran’s destructive role

in Arab/Israel peacemaking. It is a significant issue—significant for

the Palestinians, significant for us.

Senator CHAFEE. Is there fear that, with the withdrawal of the

Syrians, the Hezbollah would then become more dominant in Lebanon?

Ambassador SATTERFIELD. Senator, Hezbollah is a political force

in Lebanon. In view of potential developments on the ground which

open the scope for true free and fair elections, the possibility does

exist that Hezbollah will be able to obtain more parliamentary

seats than it otherwise would have been able to.

There are other specific developments which Syrian withdrawal

from Lebanon could produce, in terms of the internal scene. But we

believe, if civil society is supported, if efforts against corruption are

supported and advanced—and we do have specific assistance programs that have been focused on anticorruption efforts—that

Hezbollah’s appeal can be reduced.

Senator CHAFEE. It would seem to make sense that we try and

establish a better relationship with Assad. What’s the impediment

to doing that?

Ambassador SATTERFIELD. Well, the impediment, Senator, is the

Syrian Government, itself, and it’s refusal to move—unwillingness

or inability to move—on those demands that we have posed to

them now for 2 years, demands that have been made very specifically in the three areas of concern over Iraq, concern about Syrian

support for, tolerance of, groups involved in or through Syrian territory in support for terror and violence, and Syria’s position/presence in Lebanon and refusal to admit or to acknowledge implementation of U.N. Security Council Resolution 1559’s provisions.

We have spoken with the Syrian Government, the most senior

levels, on this, most recently in January, by then-Deputy Secretary

of State Armitage and then-Assistant Secretary of State Burns. We

have not seen satisfactory progress from the Syrian Government on

these issues. And so, the answer, Senator, to your question, is,

39

Syria, itself, bears responsibility for the failure to move our relationship forward, failure, indeed, to move forward on a broad range

of critical issues for the United States.

We will continue to make clear, there are two directions in which

this bilateral relationship can move. There is a further downward

direction in which the administration will have to consider whether

further steps directed to the Syrian Government are appropriate.

There is another direction, however, which is much more positive,

but that direction very much depends, if it is to be taken, on the

steps which the Syrian Government now adopts.

Senator CHAFEE. What do you make of the Russian’s sale of

weapons, or proposed sale of weapons, to Syria?

Ambassador SATTERFIELD. I cannot clarify the motives, plural,

behind the Russian decision to choose this moment to warm their

political/military/economic relationship with the government in Damascus.

I can say this, though. We have registered, at the most senior

levels, including the President in his discussion with President

Putin, our very serious concern over these steps, particularly any

step which would result in the provision of advanced weaponry to

Syria. This will continue to be a concern. We will continue to raise

it.

Senator CHAFEE. You must have some idea of why they’re doing

this. Could you share those with us?

Ambassador SATTERFIELD. I can offer an analysis which would

reflect upon a Russian desire to differentiate itself, in its relationship with the Arab world, from the United States. The Russian position in the Security Council on a number of Middle East-related

issues, not focused on the Middle East peace process, but, rather,

on Syria and Lebanon, has not been constructive. This is of concern

to us.

I think it may be a form of identification of Russia as an independent political force, an independent political actor. There may,

as well, be an economic element in this. Russia has recently agreed

to a significant debt forgiveness for Syria, which would permit, in

theory, a return to military sales. It may be a complex of all of

these issues.

Senator CHAFEE. Thank you.

Senator Boxer.

Senator BOXER. Thank you, Mr. Chairman.

Mr. Satterfield, should I call you ‘‘Ambassador’’? Because you

were an ambassador once.

Senator CHAFEE. That’s right. Ambassador.

Ambassador SATTERFIELD. You’re welcome to, Senator.

Senator BOXER. So I’ll say Mr. Ambassador. OK.

I was the coauthor of the Syria Accountability Act, which—you

probably know about the Syria Accountability Act—called for Syria’s withdrawal from Lebanon. And I wrote that a couple of years

ago. We had a very hard time getting the administration to go

along with it. And eventually—they never actually supported it

publicly, but they—I was very pleased that President Bush did sign

it. I’m beginning to see some of the sanctions put in place. The

other thing the act talked about was Syria’s response to the terVerDate 11-MAY-2000 13:57 Oct 05, 2005 Jkt 000000 PO 00000 Frm 00043 Fmt 6633 Sfmt 6602 963433.SEN SFORELA1 PsN: SFORELA1
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rorist groups in its midst; Islamic Jihad being a classic case in

point.

So I want to ask you about a couple of things. You said you were

encouraged by what you saw. I think that no one could help but

be encouraged by the people, themselves. This is what I keep saying I hope we see in Iraq more. We did see a good turnout in the

election, but the people have to just stand up and say, you know,

‘‘We want to control our own destiny.’’ And so, of course, we can’t

forget that all that happened because of a tragedy, which was the

assassination of former Prime Minister Hariri. And now we also

hear that there’s a belief that Islamic Jihad is behind the latest

suicide bombing that killed a few people in Israel, in the nightclub—the cowardly nightclub bombing.

So, I guess, what I want to know from you is this. With Syria

apparently not taking action to close down these terrorist groups

in its midst—and yet we did hear they cooperated with turning

over Saddam’s brother, so it seems like there’s a give with one

hand, a take with another—but with—first of all, do you believe

that we know enough to say that Islamic Jihad operating out of

Syria was responsible for the nightclub bombing? Second, when you

were there—I understand the U.N. team is there trying to figure

out who was responsible for Mr. Hariri’s assassination. Can you

give us an update on both of those issues? Because I think they

weigh heavily in terms of whether we increase sanctions on Syria

or not.

Ambassador SATTERFIELD. Absolutely, Senator.

I cannot, in this particular forum, go further into the information

available on the specifics of the Islamic Jihad responsibility for this

attack, but that’s information which, certainly, we can provide and

brief on separately, or my colleagues will be able to.

What I can say is this. We have made clear, very specifically, to

the Syrian Government, over this 2-year period, that the continued

presence on their soil of operational elements of Palestinian

groups—including Islamic Jihad and Hamas, but not restricted to

those two groups, which we know, and are confident the Syrian

Government knows, are involved, not just in political or public-relations work, as the Syrians maintain, but in operational direction,

facilitation of acts of violence and terror against Israelis in Gaza,

in West Bank, and in Israel proper—is unacceptable; that if Syria

wishes, as President Bashar has repeatedly said, to seek a comprehensive Middle East peace, if he wishes to see a United States

partnership for that peace process, then this support for terror and

violence from and through Syrian soil must cease. It is simply not

realistic to believe that the United States will be able or willing,

or that the United States will be able or willing, or that indeed, the

Israeli people will be able or willing, to see a Syrian negotiation

commence, while, with one hand, Syria talks rhetorically about

support for a peaceful resolution, and, with the other, continues to

tolerate the presence on its soil of groups involved in exploding

that very situation. We are also concerned with the presence, and

facilitation of, Hezbollah and Iranian activities, from and through

Syrian soil, also directed at detonating the chance of peace between

Israelis and Palestinians. This, too, has been part of our agenda

with Syria.

41

Senator, I would agree with you that if Syria wishes to move upward in their relationship with us, including on the issue of additional sanctions, steps in this area are going to have to be taken.

And we are watching very closely, very carefully to see what is or

is not done.

Senator BOXER. And that message, you believe, has been conveyed to Syrian leader Assad.

Ambassador SATTERFIELD. President Bashar al Assad understands all that I have said here, and more, on the specifics of our

agenda, including on the issues revolving around Iraq and Lebanon, in face-to-face conversation. And we continue to speak to

these issues through our charge in Damascus and through the Syrian Ambassador.

Senator BOXER. Were you able to meet with him on this 3-day

trip that you took?

Ambassador SATTERFIELD. No. My meetings were only in Lebanon.

Senator BOXER. OK.

Ambassador SATTERFIELD. I did not travel to Syria on this trip.

Senator BOXER. OK.

Ambassador SATTERFIELD. You had asked, Senator, about the

status of the U.N. inquiry into former Prime——

Senator BOXER. Yes.

Ambassador SATTERFIELD [continuing]. Hariri’s assassination.

That team arrived last Friday, on the ground in Beirut. They are

holding discussions with a wide range of Lebanese and other officials. We stand ready to provide any technical facilitation or assistance to the Government of Lebanon or to the United Nations in

that regard. Such requests have not yet been posed. There is no report of findings, even preliminary, yet available from the inquiry.

Senator BOXER. The Syrian leader said that Syrian forces will be

completely out of Lebanon, quote, ‘‘in the next few months.’’ Having

just come back from there, do you think the Lebanese people believe that is real?

Ambassador SATTERFIELD. Senator, I think the question is: Does

the U.S. Government attach credibility to that statement? And my

answer would have to be, we have seen a number of very conflicting statements coming from senior Syrian officials in the news

media over the last 4 days. We do not know from that rhetoric

what, in fact, the position of the Syrian Government is on withdrawal of their forces, as required by Resolution 1559.

What is needed now is not rhetoric, whether private or public.

What’s needed is actions on the ground. The Syrian Government

needs to make a commitment to take those steps related to its

presence and activities in Lebanon called for in Resolution 1559,

nothing less. And I think neither this government nor the people

of Lebanon will believe anything other than what we see with our

eyes.

Senator BOXER. So the answer to the question is? I asked you if

the people in Lebanon believe it, because they’re living with this

and——

Ambassador SATTERFIELD. I think they’re deeply skeptical.

Senator BOXER. OK, they’re skeptical. And we’re skeptical, until

they actually start withdrawing.

42

I was a little confused by your ducking the issue on Islamic

Jihad. And I understand you’re being very careful. But, yesterday,

White House Press Secretary Scott McClellan said, quote, ‘‘We do

have firm evidence that the bombing in Tel Aviv was not only authorized by Palestinian Islamic Jihad leaders in Damascus, but

that Islamic Jihad leaders in Damascus participated in the planning.’’ So——

Ambassador SATTERFIELD. I’m not contradicting that

statement——

Senator BOXER. Thank you.

Ambassador SATTERFIELD [continuing]. Of course. But specific

information——

Senator BOXER. Well, I was just——

Ambassador SATTERFIELD [continuing]. Detailing our views, we

can provide in another forum.

Senator BOXER. Well, that’s pretty specific. Because in the Syria

Accountability Act we lay out these escalating sanctions based on

Syria’s support or—let’s put it this way—lack of action against terrorists within their country.

I have just one question on the Palestinian support. The President’s supplemental includes—well, I have two questions—$200

million in support for the Palestinian people; and I support that

aid, but I want to make sure that it’s transparent, it’s not wasted.

And I wondered, you know, what assurances you can give us on

tracking that funding.

Ambassador SATTERFIELD. Senator, the assistance we have provided to the Palestinian people since October 1, 1993, have all been

done in a completely transparent and fully accountable manner.

We have, on two occasions, provided extraordinary assistance directly to the Palestinian Authority through the Ministry of Finance. And, in those two instances, again, absolute transparency

and accountability has been maintained.

We are very concerned, as we know the Congress is, regarding

these issues. We will continue to pursue our assistance efforts with

the Palestinian people, and, indeed, with the Palestinian Authority,

on that basis of absolute transparency, absolute accountability.

Senator BOXER. And you know of no incidents where we’ve had

problems with that aid in the past.

Ambassador SATTERFIELD. No instance——

Senator BOXER. OK.

Ambassador SATTERFIELD [continuing]. Whatsoever.

Senator BOXER. All right. My last question is about the burdensharing question in Iraq.

Ambassador SATTERFIELD. Yes.

Senator BOXER. And many of us believe that—not all of us, but

many of us believe that the burden-sharing in the first gulf war

was worthy of emulation. We wound up spending 20 percent, and

our allies, 80 percent. And, here, in this war, I would go so far as

to say it’s close to 98 percent or 96 percent American dollars. And

in making the case for war, the administration repeatedly assured

Congress that we’d have a large coalition that would share the burden, but we were not told that the U.S. taxpayers would be paying

for this assistance. You know, we were told, when we questioned

43

it, that we were being ungrateful to our allies who did join with

us.

Now, here we have a circumstance where countries are withdrawing their troops, and yet the administration is requesting between $200 and $400 million in economic and military aid to our

coalition partners in Iraq and Afghanistan as part of the supplemental. The DOD portion of the request includes an additional

$600 million in transportation and other assistance.

Now, I don’t expect that you’d have this at your—at a moment’s

notice, that you can give us this information. But before we get this

supplemental, would you please make available to the committee

a list of the countries that have been our coalition partners, and

what they have provided to us in military or reconstruction assistance, and what are we asking for those coalition partners?

Because if we knew we were hiring people, it would have been—

we would have been one response. We were told these were people

who shared our values and were contributing. And now we’re being

asked—taxpayers are being asked, in addition to the billion dollars

a week we’re spending just on the military in Iraq, to now give

money, hundreds of millions, for these coalition partners.

So I need to know, in every case—and I’m going to make an issue

of it on the Senate floor, if we don’t have it, but even if we have

it. I need to know what they’ve spent and what—instead of just

giving a blank check of $200 to $600 million to the administration

to hand out to folks—which we were not told that was going to be

the case—you know, I need specific information.

So I will be looking to you, in the next couple of weeks, whatever

it takes you—be very aware that it’s going to be difficult—please

tell us what these countries have spent, what we’ve already reimbursed them, because I know we’ve already—in some cases, we’ve

paid for the troops. I believe it was in Poland. And we paid for the

uniforms, and we paid for a lot of other things. So what have we

already paid these countries for their contribution? And out of that

pot of money the administration wants, what are we planning to

reimburse or pay each of these countries in the future? So I would

really appreciate that.

Would that be forthcoming, Mr. Ambassador?

Ambassador SATTERFIELD. I’ll check that.

Senator BOXER. Thank you.

Ambassador SATTERFIELD. Certainly.

Senator BOXER. Thank you very much, Mr. Chairman.

Ambassador SATTERFIELD. Thank you, Senator.

[The submitted written answer to the requested information follows:]

Question. What have Coalition members spent in Iraq (to include both military

and economic/reconstruction spending)?

Answer. Economic contributions by the international community have been significant. Of the $32 billion in pledges for 2004–2007 at the Madrid Donors’ Conference, $13.584 billion was from non-U.S. sources. This consisted of $5.55 billion

in lending pledged by the World Bank and IMF and $8.034 billion in grants and

loans from 37 bilateral donors, of which $5.9 billion was from Coalition members.

About half (just over $1 billion) of the $2.1 billion disbursed by donors by the end

of the first year (pledges were made over 4 years) has been in deposits to the International Reconstruction Fund Facility for Iraq (IRFFI), which is comprised of U.N.

and World Bank trust funds. These trust funds are now implementing their initial

IRFFI projects.

44

In addition to reconstruction assistance, Paris Club creditors, in November 2004,

agreed to forgive 80 percent of Iraqi sovereign debt (approximately $31 billion in

debt relief) in three stages.

In terms of security assistance, the NATO Training Mission—Iraq (NTM–I) is benefiting from financial contributions. Over $4 million has been pledged by all 26

NATO members to a recently established trust fund for training of Iraqi security

forces, providing for troops, equipment, and financial assistance to NTM–I. NATO

trainers were in Baghdad within 6 weeks of NATO’s decision to launch a training

mission in Iraq. Mission advisors have coordinated in-country training courses and

mentored over 200 Iraqi staff-level officers. NTM–I is currently staffed by personnel

from 14 different countries, including the United States, and is now supported with

either personnel or financial assistance by every ATO member.

The international community has also provided extensive assistance in the areas

of military/security manpower. MNF–I currently has 27 non-United States contributors with roughly 24,700 soldiers in Iraq. These forces were trained, equipped, and

deployed at significant expense to the contributing nations, funds that had been allotted to other national priorities.

UNSCR 1546 notes the MNF’s intention to create a distinct entity under its command to provide security for the U.N. presence in Iraq. Japan and many EU member states have pledged over $20 million for U.N. security. Georgia and Romania,

already with troops inside MNF–I ranks, are the first contributors; over 500 new

Georgian troops have deployed to the region and Romania is expected to deploy 100

new troops this month. In addition, over 150 Fijian security personnel are providing

close-up security as an integral part of the U.N. mission.

Contributions from non-Coalition countries are making an impact as well. Jordan

hosts an 8-week police training course at an academy outside Amman, where international police trainers implement basic police training and border enforcement officer training through a program sponsored by the State Department. The graduation

of 1,500 students every month is due to the support of 16 nations (including Iraq

and Jordan) that collectively provide 325 International Police Trainers (IPTs). A

company of 134 soldiers recently conducted training in Egypt, and the United States

is helping Bosnia prepare an explosive ordnance disposal unit for their first deployment to Iraq this summer. Germany established a military and police training program in the UAE and has trained over 100 Iraqis in truck driving and maintenance.

In May, Australia will deploy 450 troops to provide security for Japanese and to

train Iraqi Security Forces. Macedonia, the United Kingdom, Canada, Poland, the

Czech Republic, Austria, Slovenia, Slovakia, Hungary, and Finland have all offered

police training.

Question. What have Coalition members been reimbursed for their contributions?

Answer. The United States only provides assistance to countries for which such

assistance is an absolute financial necessity. The United States often provides strategic lift (i.e., transportation to and from the region), sustainment (i.e., consumables

such as food, water, fuel, and ammunition), and certain items of individual soldier

equipment (e.g., desert pattern uniforms, flack jackets, helmets, boots, etc.) and

other required equipment. In addition, the United Nations has established a Trust

Fund to consolidate and disburse donations to forces providing U.N. protection.

Funds have been deposited in the account, but it is not yet operational.

U.S. assistance still leaves every Coalition partner responsible for a significant set

of financial obligations, including soldier salaries and per diem, benefits and insurance, and the depreciation and recapitalization of all nationally owned equipment

such as weapons, vehicles, and communications gear. The Polish Government, for

example, estimates it has spent over $550 million in support of its operations in

Iraq thus far, in addition to other bilateral contributions and assistance they have

provided to the Iraqi Govemment and people. Despite United States assistance, our

Coalition partners sustain significant expenses in Iraq and elsewhere.

Question. What are we planning to reimburse them in the future (with reference

to the supplemental and how Coalition partners will be assisted)?

Answer. The current supplemental requests include $400 million for Coalition

Partner Support [$200 million in a new account for economic assistance and $200

million for Peacekeeping Operations (PKO)]. The purpose of the request is to provide assistance to Coalition or Global War on Terrorism (GWOT) partners that have

taken on significant political risks and financial burdens in order to support United

States-led operations in Iraq, Afghanistan, and elsewhere.

When a new troop contributor comes forward, or a current Coalition partner decides to deploy additional troops, military-to-military discussions take place to work

out such details as timing and location for the deployment, equipment requirements,

logistical support, and financial costs. The United States does not offer assistance

45

to Coalition partners that do not require it, nor does U.S. assistance come close to

covering all deployment costs. However, in some instances it often allows certain

countries to contribute forces, or more forces than they could otherwise afford to deploy. While we believe the amount of assistance given is, in all cases, the required

amount that will help the U.S. efforts in the GWOT, we have simultaneously sought

to minimize financial burdens on the U.S. taxpayer. For example, we worked with

our European allies in getting the United Nations to establish a (U.N.) Trust Fund

to provide funding for middle ring security for the U.N. presence in Iraq. Our NATO

allies help to provide all finances required to resource the NATO Training Mission.

We are committed to working with the international community to appropriately

share future costs.

Senator CHAFEE. Thank you, Senator Boxer.

Senator Martinez.

Senator MARTINEZ. Thank you, Mr. Chairman.

And, Mr. Ambassador, I wanted to ask you a couple of quick

questions. One is—during a recent trip to the Middle East, I was

taken by the need for there to be a lasting peace process, for there

to be security, obviously, for Israel. And one of the real problems,

obviously, was Southern Lebanon. Their withdrawal—or the potential withdrawal of troops is an encouraging sign. In addition to the

15,000 or so troops, there appear to be thousands of intelligence

agents that are also in Syria. Is there any talk of the withdrawal

of, also, these intelligence agents?

Ambassador SATTERFIELD. Absolutely, Senator. The requirement

of Resolution 1559 is for the withdrawal of all Syrian forces from

Lebanon immediately. That includes their military intelligence personnel. And we have reiterated that demand. The President of the

United States has made that specific requirement clear. During my

visit, I reiterated that requirement, as well. So, yes; it does include

their military intelligence personnel.

Senator MARTINEZ. If, in fact, there were to be a withdrawal,

what occurs in Southern Lebanon, where there appears to be little

governmental control by the Lebanese Government, and where

there are, in fact, substantial forces that are not the forces of peace

and not the forces of—that would assist the peace process?

Ambassador SATTERFIELD. Senator, we have called—U.N. Security Council Resolution 425 calls for the extension of Lebanese Government authority throughout its territory, specifically in the

south, to the border. And Resolution 1559 picks up that call and

makes clear that all armed elements, other than those belonging to

the Lebanese Government, need to be disarmed or to give up their

arms. There should be only one gun, one authority, in this country,

and that includes on the border area.

Those are requirements, requirements of a variety of U.N. Security Resolutions; they are requirements of the U.S. Government, as

well. And we very much hope that, in a political environment in

Lebanon established—if this current, very encouraging and very

dramatic trend continues—with free and fair parliamentary elections, that there will be the possibility of real steps on these areas:

Full establishment of Lebanese Government authority, an end to

unauthorized armed presences, as well. These are difficult issues

that have an internal complex content to them within Lebanese

politics. But they need to be worked on. And, in this environment

that we have lived with for the past 15 years, it’s been impossible

to see progress achieved. We very much hope that that changes.

46

Senator MARTINEZ. How are we doing on our support for political

and economic and educational reforms under the Middle East Partnership Initiative? And how effective is the aid that we’re providing

through that effort?

Ambassador SATTERFIELD. Well, I’ll defer to my colleague from

AID, but I can tell you, generally speaking, we have made quite a

focus on both education, in the civil-society sense and otherwise, in

the MEPI programs, and will continue to do so. It is part and parcel of the efforts to generate support for both reform and for civil

society, for creating a viable economic new generation in that region, that are both employed, but employed in a manner that

makes them competitive in a 21st century environment. And we

have been pleased by the progress made, in the limited life span

of this program so far.

And, Jim——

Senator MARTINEZ. Mr. Kunder.

Mr. KUNDER. I mentioned earlier, Senator, that across the entire

Asia and Middle East region there’s a population of young people

between 15 and 24 that exceeds the entire population of the United

States of America. So we’ve got an enormous opportunity, but also

an enormous problem. So we’re focusing extensively on education

and job creation, and the linkages between the two; not just abstract education, but education that is going to lead to jobs in the

21st century economy.

I can deliver more information to you, but we’ve got substantial

successes across the region in getting schools constructed, in getting teachers trained in more participatory teaching techniques

that teach children to think a little more creatively, not the rote

learning that they’ve been used to, which we think makes a contribution both to education and democracy and antiterrorism.

We’ve also made significant contributions in getting parents and

communities involved in education, because the culture there was

to keep the parents and the community leaders excluded from participating in the education process, which was very centralized.

So we’ve got a lot of work to do, but I think there’s been substantial progress, and it’s a high priority for us.

Senator MARTINEZ. One last question is—the Israelis I know expressed some concern to me, when I visited there, about arms

smuggling that oftentimes takes place through Egypt. And I know

that Egypt is an ally of ours, and one that is the recipient of substantial assistance, military, and otherwise. Is it possible—first of

all, do you concur that a substantial amount of arms smuggling

takes place through Egypt that finds its way to this troubled region, where no more arms are needed? And is there more that we

can do with Egypt, in terms of encouraging their cooperation in

stopping this smuggling?

Ambassador SATTERFIELD. Senator, the issue of arms transfers

coming across the Egyptian/Gaza border is a significant one. It is

an issue which not only has been the object of discussion between

the United States and Egypt, but, more importantly, has been the

object of direct discussion at very senior levels between the Egyptian and Israeli Governments. Those two governments are in the

process, as we speak here, of reaching agreement, upon a change

in disposition of Egyptian forces on that border, which can provide

47

for a more effective control over this kind of very destructive, very

detrimental smuggling.

We very much hope that these understandings come to conclusion soon, that Egyptian forces are able to deploy to that area. It

does require the mutual agreement of Egypt and the Israeli Governments, because of the peace-treaty limitations there. We hope it

does conclude, because, yes, it is a problem. It’s a threat to Egypt,

it’s a threat to Israel, it’s a threat to the Palestinians, as well.

Senator MARTINEZ. Thank you.

Thank you, Mr. Chairman.

Senator CHAFEE. Thank you, Senator Martinez.

Senator Nelson.

Senator NELSON. Thank you, Mr. Chairman.

Back on the question of Iran. After the President’s seemingly

successful meetings in Europe, what steps is the administration

going to take now to address the Iranian situation? Give me specifics of what the administration plans to do.

Ambassador SATTERFIELD. Senator, we’ve made clear it would be

unacceptable to us—indeed, we believe it should be unacceptable to

the world—to see Iran acquire a nuclear-weapons proficiency.

Senator NELSON. We all embrace that. I need to know, specifically, what is the administration planning?

Ambassador SATTERFIELD. We have been discussing, with our EU

allies, their own discussions, negotiations with Iranian authorities

on achieving an absolutely verifiable and sustainable suspension of

the enrichment cycle which could lead to a weapons-development

program.

Senator NELSON. And what do you see in the cooperation of Russia and other European leaders that will lead us to be able to verify

elimination of the Iranian nuclear program?

Ambassador SATTERFIELD. We are supportive of the EU negotiations with Iran and their demand for a suspension, a full suspension, in a verifiable manner, of the enrichment cycle. We have our

own doubts regarding the credibility of Iranian commitments made,

which is why we underscore ‘‘verifiable’’ and——

Senator NELSON. Do we have our doubts about the——

Ambassador SATTERFIELD. The Iranians——

Senator NELSON [continuing]. Commitment of the Europeans?

Ambassador SATTERFIELD. We have our doubts—no, we have our

doubts about the committee of the Iranians in this regard. The Iranian track record is not a positive one.

Senator NELSON. I understand that. How much confidence do we

have that the Europeans are not looking out for their own financial

arrangements?

Ambassador SATTERFIELD. Senator, in the course of these discussions that the European Union is conducting with Iran, we have

made very clear, the President’s made clear, we support the content of those discussions as we understand what the European

Union is insisting upon. We hope very much they achieve a satisfactory result.

Senator NELSON. Well, I hope so, too.

What about Russian President Vladimir Putin?

Ambassador SATTERFIELD. We have made clear to the Russian

Government, as well, our concerns about Russia’s own unique enVerDate 11-MAY-2000 13:57 Oct 05, 2005 Jkt 000000 PO 00000 Frm 00051 Fmt 6633 Sfmt 6602 963433.SEN SFORELA1 PsN: SFORELA1
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gagement in the Russian nuclear program. We would not want to

see—we have made clear—any steps from the Government of Russia that would undermine, undercut the efforts being undertaken

by the European Union in this regard. We see this all as a package. Every state dealing, either with the missile program in Iran

or with its nuclear program, broadly writ, need to be on the same

script with respect to controls and limiting the ability of Iran to develop a nuclear weapons program.

Senator NELSON. OK. Now, everything you’ve said, we would embrace unanimously here, as the congressional committee charged

with the oversight of the administration. Now, will you give me

specifics of what has changed, other than what you said about the

EU, that would lead us to the conclusion that we have a chance

of getting Iran to dismantle their nuclear program?

Ambassador SATTERFIELD. Well, our focus all along had been on

Iranian lack of good faith, based on their historical record, not on

a challenge to EU good faith in the conduct of the discussions. We

have had a very intense discussion with the EU, including at the

level of the President, on where they are going with this dialog.

And we believe they are moving in the right direction on this.

They, the EU. The issue is whether Iran will respond to the demands, the quite appropriate demands, being made by the European Union in this regard.

Senator NELSON. Do you see that that EU effort is being embraced by specific people, such as Chirac, such as the leadership of

Germany?

Ambassador SATTERFIELD. We certainly believe that the EU effort is one that is informed at the political level by the key players

in the European Union, yes, there’s no question about that.

Senator NELSON. Well, let me just say that I’m a Doubting

Thomas.

Ambassador SATTERFIELD. We all are.

Senator NELSON. And the problem is that if we continue to see

this thing drift, as it has in the past 4 years, suddenly Iran is going

to be like North Korea and they’re going to have a nuclear weapon,

and then it’s all the more difficult to get them to dismantle.

Ambassador SATTERFIELD. Senator, we have seen steps taken on

the ground. And a briefing in other channels can be provided on

our assessment of what Iran has or has not done to date. But whatever current steps may be, whatever current measures Iran may

have put in place, we want to see it continued and we want to see

it monitorable and verifiable. That’s——

Senator NELSON. Well, Mr.——

Ambassador SATTERFIELD [continuing]. The bottom line.

Senator NELSON [continuing]. Mr. Chairman, in our oversight capacity, what the Secretary has just said is, in another setting, that

we would be able to understand the specifics of what has been

done. And I wish that you would consider doing that. He’s referring

to a classified setting, and I think——

Ambassador SATTERFIELD. Certainly, Senator.

Senator NELSON. I mean, the alternative is unthinkable, that

they start peddling nukes to terrorists, just like our concern is that

North Korea starts peddling nukes to terrorists. Or, that they put

a nuke on top of their rocket that has a range to go to Israel.

49

Ambassador SATTERFIELD. We absolutely agree, Senator. We

share those concerns.

Senator NELSON. Why have we dillydallied for 4 years?

Ambassador SATTERFIELD. Well, Senator, we have not. We have

been as engaged as possible with the Iranian regime in addressing

these areas. We have been as supportive as possible of other efforts

to constructively deal with this. And by ‘‘constructive,’’ I mean to

establish a verifiable and a sustainable suspension of the Iranian

nuclear program. I do not believe we have been lacking in efforts

to deal with this very, very difficult issue, either our own or

through our allies.

Senator NELSON. Well, I’m glad you feel that way. There are others that think that we haven’t been nearly as aggressive as we

should. But, we can talk about that another day.

Let me ask you—the administration has come forth, which I embrace, with a $350 million package with regard to the Palestinians.

What are we doing to get other Arab countries to step up to their

responsibility?

Ambassador SATTERFIELD. In the course of the discussions over

the last month, that preceded the London meeting that just concluded yesterday evening, we have been engaged, the Palestinian

Authority has been engaged directly, with states in the Persian

Gulf, Saudi Arabia, other potential donors, to mobilize as much as

possible of an additional broad international and regional economic

support effort for the Palestinians. We have seen significant

progress in that direction through the meetings held in December

of last year of the Ad Hoc Liaison Committee, which groups the

principal donors for Palestinian assistance.

We are, all of us, looking toward a donor pledging session later

this spring. I think the political environment on the ground, if it

continues as it is now, will be supportive for such a session.

We have made specifically clear to states in the gulf that the

windfall of profits they have received from the increase in oil

prices, and the dramatic changes in the Palestinian Authority with

the death of Yasser Arafat, the free and fair election of Mahmoud

Abbas, means they have a role, as well as do we, as does the international community, in providing support for the new Palestinian

leadership. It is our expectation, it is the Palestinian expectation,

that those Arab States will see it in their direct interest to provide

significant assistance, and we will continue to make that point

clear.

Senator NELSON. You know, it’s the opinion of this Senator that

it is absolutely inexcusable for Saudi Arabia, as much money as

they have, to have given such a paltry sum for the economic development of the Palestinian people. And, in fact, that’s been the case.

Are we coming down hard now? Is this administration coming

down hard on Saudi Arabia to get them to help economically develop the Palestinians?

Ambassador SATTERFIELD. Senator, Saudi Arabia is one of the

very few Arab States which has actually met in full its commitment under the 2002 Arab League Summit to provide assistance to

the Palestinian Authority. But the answer to your question is: Yes;

we have been extremely direct with the Government of Saudi Arabia, as well as with other governments throughout the gulf, not on

50

those past obligations, but on what the changed circumstances

mean in terms of future and current obligations to help the Palestinians. Absolutely.

Senator NELSON. One more question, Mr. Chairman.

You may have covered this in some of the discussion with Senator Boxer. It seems that this tragic assassination of Rafik Hariri

has brought to the surface the desire of the Lebanese people to be

free. What can this United States Government, right now, do to

help the Lebanese people throw off the shackles that have been put

around them, not only by the Syrian Government, but by these terrorists groups?

Ambassador SATTERFIELD. Senator, we can continue to do several

things that we have underway right now. The first is to speak very

bluntly, and at the most senior levels, as the Secretary of State and

her colleagues at the London meeting have done, as the President

has done, as we all are doing, to say that it is long past time for

the people of Lebanon to be able to live in sovereignty, independence, and freedom, which are the three slogans of this unique development taking place on the ground in Beirut. We can provide

continued emphasis on the part of the international community,

not just the United States, on the absolute need for full implementation of Security Council Resolution 1559, which calls for the withdrawal of Syrian forces, including intelligence forces, from Lebanon. We can continue to emphasize that the goal here is an atmosphere on the ground in Lebanon, in these months before spring

elections are expected, that allows Lebanese to campaign, to face

choices regarding their representatives in an atmosphere free of

threats and free of intimidation.

The tragic murder, the terrorist killing, of former Prime Minister

Hariri has, indeed, been a catalytic event, but it has underscored,

I think, for Lebanese, as it has for the international community,

the simple fact of, ‘‘Enough. The time has come for Syria to go. The

time has come for the Lebanese people to be able to step forward.’’

On the specific economic side, we are, indeed, working on programs which gear to preparation for elections, gear to civil-society

development in Lebanon, can help the people of Lebanon move forward.

Finally, we will continue to maintain all possible pressures on

the government in Damascus to meet their obligations and responsibilities in all of those areas we have identified in our bilateral dialog, but, in particular, on their international obligations, under

Council Resolution 1559, to withdraw their forces from Lebanon.

Senator NELSON. Do you think President Assad wants to withdraw the Syrian troops, but is prevented so by his daddy’s men surrounding him?

Ambassador SATTERFIELD. Senator, we do not, in the conduct of

our own relationship with Syria, make a differentiation between

any particular officials of that government. We believe it must be

treated as a single government in which the statements by all of

its officials are taken with equal seriousness.

Do we know what the Syrian Government wishes to do? We

have—I said it already to Senator Chafee—we will judge what the

Syrian Government is doing based on what we see on the ground,

not on its rhetoric.

51

Senator NELSON. Why did the Government of the United States

not follow up on President Assad’s offer to cooperate with the

United States military in sealing the Syrian/Iraqi border, which

was conveyed through your Ambassador over a year ago?

Ambassador SATTERFIELD. We followed up in full. It is disingenuous on the part of the Syrian Government, in this area or any

other areas of requested cooperation, to claim that there was some

United States reluctance or failure to follow up. It’s simply not

true. We followed up in full on all of these steps. It——

Senator NELSON. Are those——

Ambassador SATTERFIELD [continuing]. It was Syrian unwillingness to move that created the problems that Syria now faces today.

Senator NELSON. Has that unwillingness changed now?

Ambassador SATTERFIELD. We have seen some steps taken by the

Syrian Government with respect to the Iraqi border, but those

steps fall below the level of comprehensiveness. We have seen very

few steps taken, to this date, on the very important issue of former

regime elements moving through, or resident in, Syria and providing support to this brutal insurgency.

Senator NELSON. Does this recent turnover of this al-Qaida figure portend a change in Syria?

Ambassador SATTERFIELD. We would hope that that step indicates that all of the other measures which we have told Syria it

must take with respect to former regime elements will now be conducted. But, again, we will have to judge this on what we see on

the ground. The disposition of Mr. Sab’awi was part of, but not a

completion of, a list of very specific measures we have asked the

Syrian Government to take.

Senator NELSON. Are there government-to-government contacts

going on right now with regard to the sealing of the Syrian/Iraqi

border?

Ambassador SATTERFIELD. Yes, there are, Senator.

Senator NELSON. Are there military-to-military contacts?

Ambassador SATTERFIELD. There have been military contacts on

this issue.

Senator NELSON. Thank you, Mr. Chairman.

Senator CHAFEE. Thank you, Senator Nelson.

You were Ambassador to Lebanon for several years in the late

nineties, so you know the Lebanese people well. And you spoke recently about the strength of the political party, Hezbollah. Is it a

fair question—some would say that the antipathy that the Lebanese have toward the Syrians is only equaled by their antipathy toward Israel and the United States. Is that accurate?

Ambassador SATTERFIELD. No, Senator; I don’t think that’s an

accurate statement. There is clearly a concern throughout the region regarding U.S. policies. Some of that is based on misinformation as to what our policies and values truly are, some of it is outright opposition to specific policy decisions we’ve made. But I do

not believe it is fair to say that the majority of the Lebanese people

are unfavorably disposed to the United States.

Senator CHAFEE. How strong is the political party, Hezbollah?

Ambassador SATTERFIELD. It has significant strength, particularly in the south and in the Beqa’a Valley, and that strength depends largely on the fact that it was regarded by Lebanese as less

52

corrupt and more effective in providing basic services than the alltoo-absent Lebanese Government or other political parties functioning on the ground there.

The way to get at that particular phenomenon, whether it’s Lebanon we’re speaking of or any other country around the world, is

to be able to build the capacity for a corruption-free national government to take its responsibilities in providing that assistance.

It’s true in Lebanon, as it is true in any other country in the Middle East or elsewhere.

Senator CHAFEE. So you’re saying their strength is minimal. Am

I hearing you accurately?

Ambassador SATTERFIELD. Their strength is a phenomenon of the

absence of a Lebanese Government role on the ground which is capable of providing basic services and support to its own people.

Hezbollah has stepped into that void, and it’s a void which needs

to be filled by the government itself.

Senator CHAFEE. OK. And my last question is: You are the Ambassador to Jordan, is that correct?

Ambassador SATTERFIELD. I was confirmed by the Senate as Ambassador to Jordan. I will be going to Baghdad in May.

Senator CHAFEE. Who, then, will be our diplomat in Jordan?

Ambassador SATTERFIELD. The President has not yet made a recommendation for the next Ambassador to Jordan.

Senator CHAFEE. Who’s carrying those tasks at present?

Ambassador SATTERFIELD. Our very able charge, David Hale, is

currently carrying out those duties.

Senator CHAFEE. And is that—the lack of—that being resolved,

is that a problem?

Ambassador SATTERFIELD. We have an excellent operational relationship with the Government of Jordan.

Senator CHAFEE. Thank you.

Senator Martinez.

Senator MARTINEZ. A couple of quick questions. May I congratulate you, then? Will you be taking Ambassador Negroponte’s place?

Is that——

Ambassador SATTERFIELD. I will not be taking Ambassador

Negroponte’s place. The administration will be submitting a recommendation for John Negroponte’s replacement. I will be taking

the number two position in Baghdad.

Senator MARTINEZ. OK; very good.

In coordinating aid, I know that it’s always something we want

to see happen to ensure the best use of taxpayer dollars. Is there

a need for a full-time coordinator to support aid efforts? Is there

a need for coordination between the State Department arm and the

USAID arm and how that function takes place?

Ambassador SATTERFIELD. We are looking right now at structural issues as the situation on the ground moves forward, as the

international assistance effort moves forward, and we will be in

close touch with the Congress on how we would recommend moving

forward in this regard. And I wouldn’t prejudge the outcome of

those discussions with respect to a coordinator position.

Senator MARTINEZ. I would just say thank you both for your

service, and particularly best wishes to you in your new assignment, and thank you for your testimony today.

53

Ambassador SATTERFIELD. Thank you very much, Senator.

Senator CHAFEE. Thank you, Senator Martinez.

I echo those words also. Thank you for your service——

Ambassador SATTERFIELD. Thank you.

Senator CHAFEE [continuing]. To the country and for your testimony today.

Ambassador SATTERFIELD. Appreciate it.

Mr. KUNDER. Senator Chafee, you asked earlier, in the South

Asia hearing, about the 2006 budget request specifically and

whether there were dramatic changes. I just want—truth in advertising—to point out that there is, in an addition to the supplemental request, a request for an increase in West Bank/Gaza funding, because the anticipation is, with the transfer of Gaza, we will

have a need for a more robust program ongoing there. And also, in Iraq, we have been working off of the generous $18

billion that the Congress provided under the Iraq Reconstruction

Fund. There is, for the first time, a request for an ongoing program

at a much lower level. And this is not to do the major reconstruction work, but to do the kind of transformational change in the

Iraqi economy, in the Iraqi educational system, that we think will

continue the work that’s been done during this immediate reconstruction phase.

So you asked that question earlier. I just wanted to point out, in

this region, as opposed to South Asia, we have asked for several

dramatic changes in the appropriations level between 2005 and

2006.

Thank you, sir.

Senator CHAFEE. Thank you, sir.

The hearing is concluded.

[Recess from 10:51 to 10:57 a.m.]

OPENING STATEMENT OF HON. MEL MARTINEZ, U.S. SENATOR

FROM FLORIDA

Senator MARTINEZ [presiding]. Good morning. We’ll call the hearing to order.

And I wanted to just begin by welcoming Mr. Michael

Ranneberger, Principal Deputy Assistant Secretary of Bureau of

African Affairs, and the Honorable Lloyd Pierson, Assistant Administrator for Africa of the United States Agency for International Development. I want to thank both of you for joining us today.

And this, of course, is the six-regional panel today, and the focus

of this hour will be on sub-Saharan Africa. And today also represents my first official business as the chairman of the Africa Subcommittee, and I’m quite pleased and honored to be in this position. And I look forward to working with our distinguished ranking

member, Senator Feingold, in this matter.

And I should point out that Senator Feingold has, currently, an

amendment being debated on the floor of the Senate. And that has

not allowed him to be with us, momentarily. There will be a vote

on that amendment shortly. And so, I may have to recess the hearing so that I, myself, might go vote. And then I presume, after that

vote, both the Senator and I will be able to return.

Today’s discussion about our foreign-assistance efforts is a very

appropriate stating point, and I will hopefully encourage a comVerDate 11-MAY-2000 13:57 Oct 05, 2005 Jkt 000000 PO 00000 Frm 00057 Fmt 6633 Sfmt 6602 963433.SEN SFORELA1 PsN: SFORELA1
54

prehensive and thoughtful exchange of our priorities and programs

in sub-Saharan Africa.

And before we go to our panelists, I’d like to just briefly highlight

some of my key priorities and interests related to the subcommittee

and to the region.

First and foremost, I think United States foreign policy needs a

stronger and more focused effort on Africa. I’m very pleased by the

increased assistance that is being provided through the HIV/AIDS

funding and, obviously, the Millennium Challenge Account and our

counterterrorism efforts that are so important to our national security. I’m very concerned that we also increase our focus on traditional development assistance.

I believe we need to advance a comprehensive strategy for Africa,

a strategy that focuses on democracy and governance, institutionbuilding, human rights, and sustainable economic growth, a strategy that focuses on building domestic capacity, which will bring

about lasting, positive change for the people of Africa.

I’m particularly troubled that, despite the considerable level of

international aid, the record of development in sub-Saharan Africa

is still very poor, and there are statistics to back that up. For example, per-capita GDP in sub-Saharan Africa has fallen from $660

in 1980 to $585 in 2003. This poor growth occurred despite U.S. development assistance that totaled over $32 billion from 1980 to

2003. Total development assistance from all sources, bilateral and

multilateral, totaled over $361 billion. Clearly, a lack of foreign assistance has not been the predominant reason for the lack of development in the region.

At the same time, sub-Saharan Africa is the world’s least free

nation, with 31 of 38 countries greater than—the 2005 Index of

Economic Freedom as being greater—that’s mostly unfree or repressed. As such, it is not surprising that it is the world’s poorest

region, as well.

Countries that embrace economic freedom, including freedom of

trade, labor, and capital, experience stronger economic growth than

those that seek to thwart the market through regulatory hurdles

and political policy restrictions.

A final concern, I want to briefly highlight, is security. Sub-Saharan Africa is home to many unstable governments. Over the past

decade, there have been wars and serious insurrections in 28 of the

48 countries in sub-Saharan Africa. In fact, most new peacekeeping

operations in the past decades have involved—in the past decade

have involved conflict in the region.

In addition to contributing to serious humanitarian crises, instability in the region aggravates poverty and poses an important security concern for the United States. As we have learned all too

well, unstable regions are ripe for terrorist exploitation as bases of

operations and recruitment. There has also been increased evidence

of terrorist activity in sub-Saharan Africa over the past decade,

ranging from attacks on United States assets in Kenya to Islamic

terrorists in Nigeria, Niger, and Chad. And this is obviously alarming as we go forward.

The bottom line is, we need to advance bold policies which will

target the root causes of challenge, of conflict in the developing

countries around the world. We need to aggressively fight the

55

causes of poverty—poor institutions and poor economic policies—

which plague the people of Africa.

And I look forward to discussing these issues in greater detail

after hearing from our distinguished witnesses today. Unfortunately, our ranking member will not be here to give an opening

statement at this time, so we will immediately go ahead and turn

to our distinguished panel, and then allow the ranking member to

give his opening statement.

So, Mr. Ranneberger, we’ll turn to you first.

STATEMENT OF MICHAEL E. RANNEBERGER, PRINCIPAL DEPUTY ASSISTANT SECRETARY, BUREAU OF AFRICAN AFFAIRS,

DEPARTMENT OF STATE, WASHINGTON, DC

Mr. RANNEBERGER. Thank you, Senator.

Mr. Chairman, thank you for asking me to testify today on the

most pressing issues in, and the budget priorities for, sub-Sahara

Africa in fiscal year 2006.

Our increasing engagement in Africa advances United States national interests: To promote peace and stability, to advance democracy, to combat terrorism, to foster economic development, and to

alleviate human suffering. As we move ahead, we are forging a

partnership with Africa that advances shared interests and values.

As Secretary Rice said in recent congressional testimony, ‘‘We don’t

consider Africa to be a target of our policy, but, rather, very good

partners in what we are doing.’’

Substantial progress is being made. During the past 4 years,

there have been over 50 democratic elections, and the majority of

African economies are growing. It is particularly significant that

African regional institutions are becoming stronger and playing

more effective roles to mitigate conflict, foster democracy, promote

regional integration, and act against terrorism. We see timely, specific examples in the decisive role that the economic community of

West African States is playing to restore democracy in Togo, and

in the effective mediation of the Comprehensive Peace Accord in

Sudan by the Intergovernmental Authority on Development.

It is also important to highlight the growing role of the African

Union, as evidenced, for example, by the crucial mission it has undertaken in Darfur in western Sudan. Strengthening these African

regional organizations, and our relationship with them, is a major

goal of United States policy.

Yet the challenges are daunting. African development is not advancing at a sufficient pace to alleviate widespread poverty. And

Africa will not likely reach the international development goals of

the Millennium Declaration. We are working closely with African

partners to alleviate the poverty that enables terrorists to continue

to find refuge, resources, recruits, and training grounds in the region.

The administration’s $2.8 billion fiscal year 2006 budget request

addresses the most serious problems facing our interests in Africa

and is designed to help African governments and organizations implement African solutions to African problems, both urgent and

long term.

While Africans want to, and are, taking the lead in addressing

many of their problems, our assistance remains indispensable. Our

56

request includes $152 million in economic support funds, $24 million in foreign military finance, $11 million in international military education and training, $41 million in peacekeeping operations, and at least $1.2 billion in global HIV/AIDS initiatives, as

well as child survival and development assistance funds, and transition initiatives moneys. In addition, the United States will continue to be the largest donor of humanitarian assistance to Africa,

and Peace Corps programs will continue to make major contributions throughout the continent.

Our six priority goals in using this assistance are:

First, expand democratic values and respect for human rights by

promoting democratic government and good governance, particularly through efforts to combat corruption and to strengthen civil

society.

Second, increase economic prosperity and security by expanding

trade and investment, strengthening Africa’s private sector, and

improving the productivity of African economies.

Third, strengthen Africa’s capacity to fight terrorism.

Fourth, foster regional stability by preventing, mitigating, and

resolving crises and conflict through coordination with international allies and, most importantly, with the African Union and

other subregional African organizations.

Fifth, counter the spread of HIV/AIDS and other infectious diseases.

And, sixth, assist with the conservation of Africa’s natural-resource base.

These six priorities reflect the fact that the continent’s challenges

are, in our increasingly global environment, linked to our broader

interests and to those of the international community. And in that

context, I want to emphasize that the United States is collaborating at an unprecedented level with the European Union and its

member states; with other countries, such as Japan, Australia, and

Canada; and with international institutions, particularly the

United Nations, the international financial institutions, and, of

course, very importantly, with the African Union and the subregional African organizations. This approach maximizes the impact of our assistance and our influence.

The African Continent is increasingly hearing a concerted message from the international community on the core issues of democracy, economic development, HIV/AIDS, counterterrorism, and conflict mitigation.

Africa remains a major focus of the G–8 process, particularly

with respect to efforts to combat corruption, to train Africans for

peacekeeping, and to promote development.

Our engagement with Africa is, then, inextricably tied to the

broader goal of strengthening United States security. We count, in

that regard, many sub-Saharan African countries as allies in the

global war against terrorism.

American leadership will remain crucial to Africa’s stability and

progress. Three examples stand out:

Nowhere is this more evident than in the Sudan. The United

States played a leading role to support the mediation by the Intergovernmental Authority on Development (IGAD) of the Comprehensive Peace Accord in Sudan. We will remain at the forefront of

57

international efforts to support implementation of this accord. And

this Comprehensive Peace Accord then provides a solid basis for resolving the crisis in Darfur.

We have intensified, at the same time, efforts to end the violence

and atrocities in Darfur, and to achieve a political settlement there.

And we have made clear to all parties that we will not normalize

relations with Sudan until the Darfur crisis is resolved.

In Liberia, our sustained involvement has been crucial to ending

armed conflict and assisting preparations for elections.

The United States is also remaining strongly engaged to support

completion of the peace process in the Great Lakes Region.

We will remain focused on areas where conflict and tension

threaten regional stability. We continue to follow closely the developments in Somalia, and have supported the IGAD-sponsored reconciliation process there.

We’re also engaging with the problem of the border dispute between Ethiopia and Eritrea. For fiscal year 2006, Senator, we have requested $152 million in Economic Support Funds, $138 million of which is targeted on 12

key focus countries. These include five key partner countries: Nigeria, South Africa, Ethiopia, Kenya, and Djibouti. Their size, the

size of their economies, the strength of their militaries, their cooperation on counterterrorism, and their roles in promoting regional stability all warrant our investment in their development as

prosperous democracies.

Six of our focus countries—Angola, Burundi, the Democratic Republic of the Congo, Sierra Leone, Liberia, and Sudan—are emerging from, have recently emerged from, or are still enduring, long

periods of conflict and instability.

In Zimbabwe, our last focus country, we will channel funds to organizations working to restore democracy and good governance.

Nine million seven hundred thousand dollars in our fiscal year

2006 ESF request has been sought for the Africa Regional Fund,

which will be used, among other purposes, to support good governance, encourage trade and investment, assist judicial reform, bolster civil society, strengthen borders, and help preserve Africa’s

ecosystems and natural resources. This fund is essential to provide

the flexibility to target problems as they arise. For example, some

of this year’s regional fund will be used to help support the elections process in Togo, which was, of course, an unforeseen need. If

the regional fund were not available, we would not be in a position

to respond quickly, as U.S. interests are impacted in late-breaking

developments. We, of course, will notify the Congress each time

when these moneys are used.

The Bureau has requested $1 million in ESF to strengthen regional and subregional organizations, such as the AU and

ECOWAS, by bolstering their institutional capacities and their

ability to reach and implement regional solutions.

Assisting African States to fight terrorism is one of our most important priorities.

Economic progress and prosperity are essential to Africa’s future;

and, thus, a paramount United States goal. Our efforts are directed

toward a trade and development-based approach that encourages

the growth of Africa’s private sector. We will continue to reinforce

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the policies of African governments that promote economic liberalization and successful private-sector development.

Over the past 4 years, in that regard, Senator, the Africa Growth

and Opportunity Act has created over 190,000 new jobs. Two-way

trade is up to just over $44 billion, as of last year. In addition to

the progress generated by AGOA, we can point to other signs of

positive economic activity in Africa. For example, foreign direct investment in Africa increased by 28 percent. United States investment in sub-Sahara Africa alone has increased by about 37 percent. Average GDP in sub-Sahara Africa, while still not at acceptable levels, is at a record level of about 4.5 percent, on average.

The Millennium Challenge Account (MCA) holds enormous promise, of course, for growing Africa’s economies. The worldwide fiscal

year 2006 MCA request of $3 billion will, to a large extent, go to

Africa, in that half of the MCA-eligible countries are located in subSahara Africa.

One very positive development that we will reinforce in fiscal

year 2006 is the willingness of African militaries to be trained for,

and to participate in, peacekeeping operations. Training of these

forces continues under the African Contingency Operations Training and Assistance program, and will now be incorporated into the

Global Peacekeeping Operations Initiative, the so-called GPOI,

starting this year. The global request for 2006 for GPOI is $114

million, of which a substantial percentage will be used in sub-Sahara Africa.

Progress on so many fronts—economic, governance, professionalization of the military, health, and education—is threatened

by the continuing plagues of HIV/AIDS, malaria, and tuberculosis.

Twelve of the fifteen countries, however, in the President’s emergency plan for AIDS relief, are located in sub-Sahara Africa. At

least $1.2 billion from the global AIDS initiative is designated for

programs in Africa.

In closing, Mr. Chairman, I want to emphasize the importance

we attach to strong public diplomacy efforts to strengthen ties between the people of Africa and the American people. Our request

for public-diplomacy programs in Africa in 2006 is $33 million.

We estimate that approximately 75 percent of our current publicdiplomacy resources are directly engaged in reaching out to Africa’s

Muslim community, which makes up about 43 percent of the continent’s population.

By and large, people throughout Africa have positive attitudes

about the United States, and we need to build on these. Our histories and cultures are intertwined. We share fundamental values

that link us together. That is why the American public supports increased aid to Africa as long as it’s done with accountability and

transparency in expenditure.

Mr. Chairman, I appreciate your, and this committee’s, continuing interest in Africa. I look forward to discussing our budget

request and other issues of concern with you and members of the

committee.

Thank you.

[The prepared statement of Mr. Ranneberger follows:]

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PREPARED STATEMENT OF MICHAEL E. RANNEBERGER, PRINCIPAL DEPUTY ASSISTANT

SECRETARY, BUREAU OF AFRICAN AFFAIRS, DEPARTMENT OF STATE, WASHINGTON, DC

Mr. Chairman and members of the committee, thank you for asking me to testify

on the most pressing issues in, and our budget priorities for, sub-Saharan Africa in

FY2006. Our increasing engagement in Africa advances United States national interests to promote peace and stability, to advance democracy, to combat terrorism,

to foster economic development, and to alleviate human suffering. As we move

ahead, we are forging a partnership with Africa that advances shared interests and

values. As the Secretary stated in recent congressional testimony: ‘‘We don’t consider Africa to be a target of our policy, but rather, like the rest of the world, very

good partners in what we’re doing.’’

Substantial progress is being made. During the past 4 years there have been over

50 democratic elections, and the majority of African economies are growing significantly. It is particularly significant that African regional institutions are becoming

stronger, and playing more effective roles to mitigate conflict, foster democracy, promote regional integration, and act against terrorism. We see timely, specific examples in the decisive role that the Economic Community of West African States

(ECOWAS) is playing to restore democracy in Togo, and in the effective mediation

of the comprehensive peace accord in Sudan by the Inter-Governmental Authority

on Development (IGAD). It is also important to highlight the growing role of the

African Union as evidenced, for example, by the crucial mission it has undertaken

in Darfur in western Sudan. Strengthening these African regional organizations and

our relationship with them is a major goal of United States policy.

Yet the challenges are daunting. African development is not advancing at a sufficient pace to alleviate widespread poverty, and Africa will likely not reach the International Development Goals of the Millennium Declaration. We are working closely

with African partners to alleviate the poverty that enables terrorists to continue to

find refuge, resources, recruits, and training grounds in the region. Although most

of African countries are willing partners in the war on terrorism, many lack the resources to counter effectively this threat in their midst. Failed or failing states

present tempting opportunities to terrorist networks. Long-running conflicts, some

nearing resolution and others not, threaten regional and subregional security.

Persistently high HIV/AIDS rates, hunger, drought, and poverty undercut

progress that is being made in establishing democratic frameworks and liberalizing

economies. The same is true of corruption, armed conflict, and human rights abuses.

Addressing these problems is essential so that Africa can harness the vast potential

of its people and natural resources. Increasing our engagement now is a wise investment that will pay dividends in the United States-Africa partnership for many years

to come.

The administration’s $2.8 billion fiscal year 2006 budget request addresses the

most serious problems facing our interests in Africa, and is designed to help African

governments and organizations implement African solutions to African problems,

both urgent and long term. While Africans want to, and are taking, the lead in addressing many of their problems, our assistance remains indispensable. Our request

includes $152 million in Economic Support Funds (ESF), $24 million in Foreign

Military Finance (FMF), $11 million in International Military Education and Training (IMET), $41 million in Peacekeeping Operations (PKO), at least $1.2 billion in

Global HIV/AIDS Initiative, and $849 million in Child Survival and Health (CSH),

Development Assistance (DA), and Transition Initiatives (TI) moneys. In addition,

the United States will continue to be the largest donor of humanitarian assistance

to Africa, and Peace Corps programs will continue to make major contributions

throughout the continent. My colleague from USAID, Lloyd Pierson, the Assistant

Administrator for Africa, will speak to the details of development assistance.

Our six priority goals are:

• Expand democratic values and respect for human rights by promoting democratic government and good governance, particularly through efforts to combat

corruption and to strengthen civil society;

• Increase economic prosperity and security by expanding trade and investment,

strengthening Africa’s private sector, and improving the productivity of African

economies;

• Strengthen Africa’s capacity to fight terrorism;

• Foster regional stability by preventing, mitigating, and resolving crises and conflict through coordination with international allies, and most importantly, with

the African Union and other African subregional organizations; • Counter the spread of HIV/AIDS and other infectious diseases; and,

• Assist with the conservation of Africa’s natural resources base.

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These six priorities reflect the fact that the continent’s problems are, in the increasingly global environment, linked to our broader interests and to those of the

international community. There are numerous examples. The progress of democracy

in Africa reinforces United States efforts to promote freedom throughout the world.

Twenty African counties are now members of the Community of Democracies. Africa

supplies over 30 percent of U.N. peacekeeping forces worldwide. Resolution of conflicts in Africa sends a positive message to other conflict-prone areas of the world.

Most notably, the achievement of peace in Sudan will send a very positive message

to the people of the Middle East that even the most intractable conflicts can be resolved. Finally, Africa is an increasingly important producer of petroleum, with exports growing to the United States, Europe, and other areas.

The United States is collaborating at an unprecedented level with the European

Union and its member states, other countries such as Japan, Australia, and Canada, the United Nations, and international institutions to work with African countries and regional organizations. This multilateral approach maximizes the impact

of our assistance and influence. The African Continent is increasingly hearing a concerted message from the international community on the core issues of democracy,

economic development, HIV/AIDS, counterterrorism, and conflict mitigation. Africa

remains a major focus of the G-8 process, particularly with respect to efforts to combat corruption, to train African countries for peacekeeping, and to promote economic

development.

Unfortunately, there remain African governments that are unable to govern effectively parts of their countries outside the capital area. As has been demonstrated

in other parts of the world, failed, failing, and fragile states breed the conditions

where terrorists recruit and take haven. They also afford bases for terrorist networks to attack the interests of the United States and its allies. Porous borders and

weak governments in Africa are conducive to drug trafficking, arms smuggling, corruption, human rights abuses, and conflicts. Deadly diseases and environmental

problems in African States have effects far beyond their borders.

Our engagement in Africa is, therefore, inextricably tied to strengthening United

States security. We count many sub-Saharan African countries as our allies in the

Global War on Terrorism. They are eager for U.S. counterterrorism programs and

training. These partner governments are willing to apprehend terrorist suspects and

host forward operating sites for U.S. and coalition forces. Our FY06 request addresses threats to the United States via counterterrorism programs, as well as addressing

our partners’ economic, social, and security needs.

American leadership will remain crucial to Africa’s stability and progress. Three

examples stand out. Nowhere is this more evident than in Sudan. The United States

played a leading role to support the mediation by the Inter-governmental Authority

on Development (IGAD) of the comprehensive peace accord in Sudan. We will remain at the forefront of international efforts to support implementation of the

North/South peace accord. This comprehensive peace accord provides a solid basis

for resolving the crisis in Darfur. The African Union has made substantial progress

in constraining violence through the deployment of observers and protection forces.

A United States-drafted U.N. Security Council resolution will be considered soon

that calls on the U.N. Secretary General to develop a plan for the eventual rehatting

of the African Union mission into a U.N. peacekeeping operation. The total appropriated for Sudan-Darfur through FY05 is $753 million; the United States has already provided $545 million in humanitarian relief in Darfur and Chad from the

FY04 and FY05 regular budgets, and will continue to provide urgent humanitarian

assistance as long as is necessary. We have intensified efforts to bring about an end

to violence and atrocities, and a political settlement, and have made clear to all parties that we will not normalize relations with Sudan until the Darfur crisis is resolved. In addition to the fiscal year 2006 request, we have requested $242 million

in the fiscal year 2005 supplemental for Darfur, and $100 million in the fiscal year

2005 supplemental to support implementation of the North/South accord, and development and reconstruction in southern Sudan.

In Liberia our sustained involvement has been critical to ending armed conflict

and assisting preparations for elections. Congress’ appropriations in FY04 and

FY05, the activities of the U.N. Peacekeeping Mission in Liberia (UNMIL), strongly

supported by the United States, the hands-on involvement of our Embassy in Monrovia, and daily attention here in Washington have all played a role in Liberia’s reconstruction. We are coordinating closely with other donor nations and the World

Bank, especially in the crucial area of security sector reform, which will be funded

in part by PKO funds. However, our work here is not done. One of the key lessons

we have learned over the years in West Africa is that we must not pull back from

these challenges too soon. The problems in Sierra Leone, Liberia, and Cote d’Ivoire

are all linked. We will do this in close consultation with ECOWAS, which played

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a vital role in helping stabilize Liberia. We must, therefore, continue to ensure Liberia’s peace and successful development, so that democratic national elections can finally be held for the people of Liberia.

The United States will also remain strongly engaged to support the completion

of the peace process in the Great Lakes region. The United States has taken the

lead to foster a tripartite mechanism among the Democratic Republic of the Congo,

Rwanda, and Uganda to ease tensions and to build confidence among the three to

move forward. We are working closely with the European Union, the United Nations, and the Africa Union in these efforts, particularly to end the violence in eastern Congo. At the same time we are heartened by developments in Burundi, where

on February 28 voters went to the polls in a referendum on the country’s new constitution. This is a key step in the country’s transition to democracy after a decade

of civil war.

We will remain focused on other areas where conflict and tension threaten regional stability. We continue to follow closely the developments in Somalia, and

have supported the IGAD-sponsored reconciliation process. While serious challenges

lie ahead, we will work with the international community to foster the development

of a stable Somalia at peace with its neighbors.

We remain engaged with the problem of the border dispute between Ethiopia and

Eritrea, which constantly threatens to disrupt regional stability and holds back the

economic progress of both countries. High-level interagency delegations have visited

both countries in recent months, encouraging both sides to meet their obligations

under the Algiers Agreement. The United States also supports the U.N.’s efforts to

resolve this dispute and avert further hostilities.

For FY06 we have requested $152 million in Economic Support Funds, $138 million of which will be targeted on 12 key focus countries. These include five key partner countries—Nigeria, South Africa, Ethiopia, Kenya, and Djibouti. Their size, the

size of their economies, the strength of their militaries, their cooperation on

counterterrorism and/or their key roles in regional stability warrant our investment

in their development as prosperous democracies.

Six of the focus countries (Angola, Burundi, the Democratic Republic of the Congo,

Sierra Leone, Liberia, and Sudan) are emerging from, have recently emerged from,

or still are enduring long periods of conflict and instability. Our assistance will support efforts to resolve these conflicts and help people reintegrate into society. Of the

$138 million for the focus counties, $75 million is for Liberia, and $20 million is for

Sudan.

In Zimbabwe, we will channel funds to organizations working to restore democracy and good governance. We remain gravely concerned by the situation in

Zimbabwe. Its once-thriving economy has shrunk by 40 percent over the past 5

years; inflation and unemployment have soared; the once strong Zimbabwe dollar

is now trading informally at over 10,000 to one United States dollar; and new investment has disappeared. Parliamentary elections at the end of this month provide

an opportunity to the Zimbabwe Government to demonstrate that it wants to return

to the path of free market democracy. The Southern Africa Development Community

(SADC) is insisting that Zimbabwe adhere to SADC electoral principles to provide

for fair elections. We are urging Zimbabwe to take specific steps to end violence,

allow freedom of assembly, allow a free press, and invite international election observers, among others.

Nine million seven hundred thousand dollars in fiscal year 2006 ESF has been

requested for the Africa Regional Fund, which will be used, among other purposes,

to support good governance, encourage trade and investment, assist judicial reform,

bolster civil society, strengthen borders, fight money laundering, and help preserve

Africa’s ecosystems and natural resources. This fund is essential to provide the flexibility to target problems as they arise. For example, some of this year’s Regional

Fund will help support elections in Togo. If the Regional fund were not available,

we would not be in a position to quickly advance U.S. interests in such late-breaking

situations. We, of course, notify Congress in a timely manner regarding the use of

these funds.

The Bureau has requested $1 million in ESF to strengthen regional and subregional organizations such as the AU and ECOWAS by bolstering their institutional capacities, and their ability to reach and implement regional solutions. Also,

through the Global Peace Operations Initiative (GPOI), the Department will provide

significant support to African Union and ECOWAS peace and security structures.

In addition to Darfur, the AU’s Peace and Security Council has recently pressured

Togo to restore its constitutional order, and supported South African President

Thabo Mbeki’s mediation in Cote d’Ivoire. The AU’s reach across the continent, including northern Africa, makes it an especially important partner. Three million

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dollars is requested for the Safe Skies for Africa program, both to combat terrorism

and promote economic development by improving aviation safety and security.

Assisting African States to fight terrorism is one of our most important priorities.

Both Development Assistance (DA) and ESF funds will be utilized to improve the

long-term economic prospects of Africa’s people, while furthering United States gaols

and interests. Along with Public Diplomacy (PD) funds, these programs promote

goodwill toward the United States. The history of terrorist attacks in East Africa,

the problems in Somalia and Africa’s growing Muslim population all make Africa

an important venue in the Global War on Terrorism. Significant proportions of FMF

funding will assist counterterrorism efforts by strengthening border and coastal security in key partner states. For example, a large part of our requested FMF will

be allocated for follow-on support to the $100 million East Africa Counter-Terrorism

Initiative (EACTI). In addition, we will sustain efforts to help stabilize the panSahel region of West Africa through Africa Coastal/Border Security Program FMF

funds.

Economic progress and prosperity are essential to Africa’s future, and thus a

paramount United States goal. We continue to encourage economic reforms and the

development of functioning capital markets. American trade and commerce with Africa continues to grow. Our efforts are directed toward a trade and developmentbased approach that encourages the growth of Africa’s private sector. We will continue to reinforce policies of African governments that promote economic liberalization and successful private sector development.

Over the past 4 years, the African Growth and Opportunity Act (AGOA) has created over 190,000 jobs. Two-way total trade (exports plus imports) between the

United States and sub-Saharan Africa increased 37 percent to just over $44 billion

in 2004. AGOA encourages high standards for market-based economies, progress on

governance and human rights issues, broader economic reforms and building goodwill toward the United States. Thirty-seven countries in sub-Saharan Africa are now

eligible for AGOA. We expect more to meet the criteria during 2005 and 2006.

In addition to the progress generated by AGOA, we can also point to other signs

of positive economic activity in Africa. For example, foreign direct investment in Africa (including north Africa) increased by 28 percent in 2003. United States investment in sub-Saharan Africa alone increased by 37.2 percent in 2003. Average real

GDP grown in sub-Saharan Africa reached a record level of 4.5 percent in 2004. Despite these encouraging statistics, however, sub-Saharan Africa still has not made

sufficient progress toward reaching its full economic potential.

The Millennium Challenge Account (MCA) holds enormous promise for growing

Africa’s economies. The MCA funds only countries that have demonstrated a commitment to democracy and good governance, investing in people and economic freedom. The worldwide FY06 MCA request is $3 billion. Half of MCA eligible countries

for both fiscal year 2004 and fiscal year 2005 are in African countries.

We will continue to support the AU’s New Partnership for Africa’s Development

(NEPAD), as an important initiative to provide a road map to development through

good political and corporate governance, sound economic practices, and peer review.

One very positive development that we will reinforce in FY06 is the willingness

of African militaries to be trained for, and participate in, peacekeeping operations.

Training of these forces continues under the African Contingency Operations Training and Assistance (ACOTA) Program, which will be incorporated into the Global

Peacekeeping Operations Initiative (GPOI), starting in fiscal year 2005. The fiscal

year 2006 worldwide request for GPOI is $114 million. We have also requested $11

million in IMET funding for sub-Saharan Africa, which is largely aimed at fostering

respect for human rights, democratic governance, and civilian control of the military. This is in addition to $41.4 million in PKO funds for regional peacekeeping.

Many of the troops now involved in peacekeeping operations in Africa were

trained under ACOTA and/or include personnel who received IMET training.

ECOWAS troops were essential in bringing order to Sierra Leone, Liberia, and Cote

d’Ivoire. The key partner states of Nigeria and Ethiopia have taken an important

lead in peacekeeping matters, and are currently the second and fifth largest troop

contributors respectively to U.N. peacekeeping operations around the world.

In Central Africa, the AU mission to Burundi made excellent progress before its

transition to a U.N. force, and peace has returned to this once war-torn country.

Other recent successes in Africa include the long periods of post-conflict stability,

including elections, in countries such as Mozambique and Namibia. We’ve been able

to reopen our Embassy in the Central African Republic and are encouraging a return to democracy in that country.

Progress on so many fronts—economic, governance, professionalization of the military, health, education—is threatened by the continuing plagues of HIV/AIDS, malaria, and tuberculosis. Over half the people infected with HIV in the world live in

63

Africa. Africa’s most important resource is its people, yet trained professionals and

key workers die of this disease every day. Twelve of the fifteen focus countries for

the President’s Emergency Plan for AIDS Relief (the Emergency Plan) are in Africa.

The principal source of funding for the Emergency Plan is the Global HIV/AIDS Initiative (GHAI). At least $1.2 billion from this account is designated for programs

in Africa.

On a related issue, the important Child Survival and Health (CSH) request for

sub-Saharan Africa for FY06 is $326 million; that for Development Assistance is

$428.5 million and for Transition Initiatives is $95 million. The President’s budget

contains DA/CSH requests aimed at improving health systems, building human capacity in the health field, working to prevent the spread of disease, enhancing food

security, increasing access to education and promoting conservation of natural resources. The DA/CSH program provides support for the Initiative to End Hunger in

Africa (IEHA), Trade for African Development and Enterprise (TRADE), the Congo

Basin Forest Partnership (CBFP), and the President’s Africa Education Initiative.

In closing, Mr. Chairman, I want to emphasize the importance we attach to strong

public diplomacy efforts to strengthen ties between the people of Africa and the

American people. Our request for public diplomacy programs in Africa (not including

exchange programs) in FY06 is $40 million. In addition to this, the President’s request for the Bureau of Educational and Cultural Affairs includes an estimate of

just over $49 million for exchanges and cultural programs in sub-Saharan Africa for

FY06. Through outreach, cultural centers, American corners, exchanges, dissemination of information using the latest technology, and other steps we are promoting

understanding of and support for our foreign policy objectives.

Our Embassies are engaging community leaders, using ESF for girls’ education

in marginalized areas, for example, and we are working with moderate local Muslim

nongovernmental organizations through grants and other means. We are providing

scholarships for the study of English, distributing information in local languages

and conducting media training. We estimate that 75 percent of our current public

diplomacy resources are directly engaged in reaching out to Africa’s Muslim community, which makes up about 43 percent of the continent’s population.

By and large, people throughout Africa have positive attitudes about the United

States, and we need to build on these. Our histories and cultures are intertwined.

We share fundamental values that link us together. That is why the American public supports increased aid to Africa as long as it’s done with accountability for funds

and transparency in expenditure.

Mr. Chairman, I appreciate your and this committee’s continuing interest in Africa. I look forward to discussing our budget request and other issues of concern relating to Africa with you and members of the committee.

Senator MARTINEZ. Thank you, sir, very much.

And now, Mr. Pierson, we’d be pleased to hear from you.

STATEMENT OF HON. LLOYD O. PIERSON, ASSISTANT ADMINISTRATOR FOR AFRICA, U.S. AGENCY FOR INTERNATIONAL

DEVELOPMENT, WASHINGTON, DC

Mr. PIERSON. Thank you very much, Mr. Chairman. I am honored today to be before this committee and also to be here with my

colleague from the Department of State, Ambassador Ranneberger.

I have a brief opening statement that I would like to make, but

do request that a longer written statement that has been submitted

be included in the record.

Senator MARTINEZ. Without objection, it will be made part of the

record.

Mr. PIERSON. Mr. Chairman and members of this committee, I

am pleased to appear before you today as the U.S. Agency for

International Development’s Assistant Administrator for Africa to

discuss the opportunities and challenges for sustainable development in sub-Sahara Africa and how the President’s proposed budget for assistance to the region in fiscal year 2006 will enable us to

address these opportunities and challenges.

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I would particularly like to highlight, at the outset, a few key

priorities that USAID has considered in developing in its FY06 program for Africa.

In fiscal year 2006, USAID is proposing to shift $275 million of

development assistance funding for four fragile states to the more

flexible transition initiatives account to permit focus on the source

of fragility and faster, shorter term, high-impact visible response.

Four countries—Afghanistan, Sudan, Haiti, and Ethiopia—were

chosen because they are the largest fragile states, in budgetary

terms, which would most diminish flexible resources available if

left in the development assistance account.

The Agency has made efforts to prioritize our use of resources

that better assures results by emphasizing support for countries

that demonstrate a commitment to sound development principles

and democracy.

The future for sub-Sahara Africa continues to look brighter. The

resolution and recovery from several violent conflicts which inhibited economic and social development is particularly encouraging.

The peace in Liberia is holding. A comprehensive peace agreement

ending the conflict in Southern Sudan was signed in January of

this year. And Sierra Leone and Angola continue their transitions

to peace and stability after years of protracted conflict.

Unfortunately, the crisis remains unsettled in Darfur. Instability

persists in Cote d’Ivoire, and conflict still plagues the Great Lakes

Region.

Encouragingly, African institutions are beginning to demonstrate

increased capacity to deal with conflict and instability and to adopt

more realistic policies to address poverty and economic growth.

Interventions of the economic community of West African States in

Liberia, and its most recent efforts to avert a crisis in Togo, and

the deployment of African Union forces in Darfur are cases in

point.

Measurable progress is now being made in increasing the availability of the specific treatment, care, and prevention services required to address one of the continent’s most overwhelming crises;

the spread of HIV/AIDS.

Despite these positive trends, sub-Sahara Africa continues to face

enormous development challenges. It remains the world’s poorest

region, with half of its 700 million people living on less than $1 per

day. Income and gender inequality are also widespread. While

many countries have taken positive steps to improve democratic

governance and governmental accountability, ongoing instability in

countries such as Zimbabwe, Sudan, and the Democratic Republic

of the Congo, act as a deterrent to increased domestic and international involvement.

Rapid urbanization poses new and different challenges as cities,

which will harbor more than half of Africa’s population in just over

a decade, struggle to provide sufficient jobs and services, particularly for the young, who can become quickly disillusioned and easy

targets for extremist propaganda, criminal gangs, or armed militias. Meeting these challenges will require an extraordinary and

sustained effort on the part of African governments, the private

sector, civil society, and the international community.

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In fiscal year 2006, USAID’s Africa Bureau proposes to invest

$849.4 million in development assistance and child survival and

health, and transition initiative funding in sub-Sahara Africa as

well as $151.9 million in ESF. It should be noted that this excludes

all funding for HIV/AIDS in the 12 focus countries in sub-Sahara

Africa covered by the President’s emergency plan for AIDS relief;

$459.3 million.

Support to the Sudan peace process is the single-highest priority

in sub-Sahara Africa. And USAID’s Africa Bureau is requesting a

total of $89 million in transition initiatives and child-survival-andhealth account funding for Sudan in fiscal year 2006.

The support of Ethiopia’s efforts to address issues of chronic food

insecurity and poverty is also one of USAID’s highest priorities in

Africa.

The centerpieces of USAID’s 2006 program will continue to be

the four Presidential initiatives launched in fiscal year 2002, the

Initiative to End Hunger in Africa, the Trade for African Development and Enterprise Initiative, the Congo Basin Forest Partnership, and the African Education Initiative.

Other key elements in the program include the continuation of

the African Anti-Corruption Initiative, the Conflict and Peace

Building Initiative, and the Leland Initiative to Increase Access to

Information Technology.

Mr. Chairman, I appreciate this committee’s continuing interest

in Africa. I would be pleased to discuss our budget request and our

proposed program and other issues of concern in Africa with you

and members of this committee at this time.

Thank you, Mr. Chairman.

[The prepared statement of Mr. Pierson follows:]

PREPARED STATEMENT OF HON. LLOYD PIERSON, ASSISTANT ADMINISTRATOR FOR

AFRICA, U.S. AGENCY FOR INTERNATIONAL DEVELOPMENT, WASHINGTON, DC

Mr. Chairman and members of the committee, I am pleased to appear before you

today as the U.S. Agency for International Development’s (USAID) Assistant Administrator for Africa to discuss the opportunities and challenges for sustainable development in sub-Saharan Africa and how the President’s proposed budget for assistance to the region in FY06 will enable us to address these opportunities and

challenges. I would particularly like to highlight, at the outset, a few key priorities

that USAID has considered in developing its FY06 program for Africa.

In FY06, USAID is proposing to shift $275 million of Development Assistance

(DA) funding for four fragile states to the more flexible Transition Initiatives (TI)

account to permit focus on the source of fragility, and faster, shorter term, high-impact, visible response. Four countries, Afghanistan, Sudan, Haiti, and Ethiopia,

were chosen because they are the largest fragile states in budgetary terms, which

would most diminish flexible resources available for others if left in the Development Assistance (DA) account.

In addition, the Agency has made efforts to prioritize our use of resources that

better assures results by emphasizing support for countries that demonstrate a commitment to sound development principles and democracy.

THE DEVELOPMENT CHALLENGE

The future for sub-Saharan Africa continues to look brighter as many countries

in the region begin to reap the benefits of sound changes to economic policy, improved governance and investments in key social sectors undertaken during the past

decade. With the rebounding of the global economy, the continued growth of responsible and representative governments, and the recovery from several lengthy conflicts, much of the continent is poised to see more robust economic growth and an

improvement in living standards in the years ahead. The IMF estimates that GDP

in the region grew by 4.5 percent in 2004, up significantly from 3.5 percent in 2003

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and projects that growth will accelerate further in 2005. While growth will be highest in oil producing countries, it is also expected to be strong in several important

nonoil producing countries.

The resolution and recovery from several violent conflicts which inhibited economic and social development is particularly encouraging. The peace in Liberia is

holding, a comprehensive Peace Agreement ending the conflict in southern Sudan

was signed in January of this year, and Sierra Leone and Angola continue their

transitions to peace and stability after years of protracted conflict. Unfortunately,

the crisis remains unsettled in Darfur, instability persists in the Cote d’Ivoire, and

conflict still plagues the Great Lakes region.

Encouragingly, African institutions are beginning to demonstrate increased capacity to deal with conflict and instability and to adopt more realistic policies to address poverty and economic growth. Interventions of the Economic Community of

West African States (ECOWAS) in Liberia, its most recent efforts to avert a crisis

in Togo, and the deployment of African Union forces in Darfur are cases in point.

The policy framework and the program of action adopted by the New Partnership

for Africa’s Development (NEPAD) is sending a very positive signal to the world

that African leadership is increasingly ready to take primary responsibility for economic and social development and improved governance in the region. NEPAD continues to deepen its support among African Government leaders and its road map

for action is gaining wider credibility. NEPAD is demonstrating through its initiation of peer reviews of political, economic, and corporate governance in four countries that Africans are indeed serious about tackling some of their most difficult development issues. Twenty-four countries have now agreed to undergo the process.

The United States continues to affirm its endorsement of NEPAD.

Measurable progress is now being made in increasing the availability of the specific treatment, care, and prevention services required to address one of the continent’s most overwhelming crises, the spread of HIV/AIDS. Fiscal year 2004 was

the first year of implementation of the President’s Emergency Plan for AIDS Relief,

which proposes $15 billion over a 5-year period for the treatment, care, and prevention of HIV worldwide. Of this, a total of $10 billion is designated to scale up HIV/

AIDS programs and services in 15 focus countries, 12 of which are in Africa. The

extraordinary response by the international community combined with the wider

availability of treatment, prevention, and care offers new hope that the advance of

the pandemic can be contained with sustained support.

Despite these positive trends, sub-Saharan Africa continues to face enormous development challenges. It remains the world’s poorest region, with half of its 700 million people living on less than $1 per day. Income and gender inequality are also

widespread. As mid-decade approaches, it is becoming increasingly evident that the

region will fall seriously short of meeting many of the Development Goals of the

Millennium Declaration (DGMD). In order to meet the goal of halving poverty by

2015, overall GDP growth must increase substantially from today’s levels to between 6 and 7 percent per annum. While many countries have taken positive steps

to improve democratic governance and governmental accountability, on-going instability in countries such as Zimbabwe, Sudan, and the Democratic Republic of the

Congo act as a deterrent to increased domestic and international investment. Food

security remains elusive in many parts of the continent, particularly in the Horn

of Africa, with children being particularly vulnerable. It is projected that by 2015,

two-thirds of the world’s hungry will be in Africa, and it is the only continent where

the trends are actually getting worse. Africa still lags far behind other developing

regions in educational attainment, particularly in rural areas and for girls, and despite the rapid growth of information and telecommunications technology, the digital divide between Africa and the rest of the world continues to widen.

Rapid urbanization poses new and different challenges as cities struggle to provide sufficient jobs and services, particularly for the young, who can become quickly

disillusioned and easy targets for extremist propaganda, criminal gangs, or armed

militias. While some health indicators have improved, the HIV/AIDS pandemic has

overwhelmed health systems and further impoverished families in many countries,

particularly in eastern and southern Africa. Dramatically reduced life expectancies

and a shrinking labor pool due to HIV/AIDS will slow economic growth in the region

by as much as 1.5 percent a year. Lingering conflicts, both large and localized, continue to exact a huge toll on efforts to bring stability and improve livelihoods. The

presence of 4–5 million refugees and 12–13 million internally displaced persons in

the region complicates the challenge.

Meeting these challenges will require an extraordinary and sustained effort on the

part of African governments, the private sector, civil society, and the international

community. Through the fiscal year 2006 foreign affairs budget, the President has

pledged to continue and augment, where possible, U.S. programs to address some

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of the most critical problems facing the continent. USAID will focus its efforts on

supporting economic growth and agriculture, improving governance, mitigating conflict, improving education (particularly basic education for girls), preserving the diversity of the continent’s resources, and fighting disease.

USAID’s programs will be bolstered by the significant additional resources to be

provided through the Millennium Challenge Account, which will be channeled to

countries that govern justly, invest in their people, and practice economic freedom.

Eight sub-Saharan African countries, out of 16 total worldwide, have been deemed

eligible for MCA assistance and an additional seven sub-Saharan African countries

are close to the threshold of eligibility. We view these combined efforts as an extremely worthwhile investment in Africa’s future. They equally serve our own interests as stability in the region is important to U.S. security concerns. Sub-Saharan

Africa is also a source of natural resources of growing importance to the United

States and represents an expanding market for American goods and services.

THE USAID RESPONSE

The proposed fiscal year 2006 USAID program for sub-Saharan Africa will support a broad range of activities which address the most pressing development challenges of the region. USAID programs in Africa will also contribute directly to the

priorities outlined in the joint State/USAID Strategic Plan for 2004–2009, particularly those which advance sustainable development and global interests, including

regional stability and counterterrorism. Critical to the success of these efforts is full

support for USAID’s Operating Expense request. The Agency’s ability to manage its

portfolio and develop a workforce with the depth and skills to respond to the challenges of development in the 21st century is dependent on these resources.

Beginning in fiscal year 2006, USAID will move deliberately to reorient its programming in sub-Saharan Africa to reflect the principles of maximizing aid effectiveness. This shift will be formally codified through the adoption of a new USAID

Strategic Framework for Africa to be completed in mid-2005. In order to maximize

the impact of its resources, USAID will increasingly direct its development assistance funding toward those African countries that are performing relatively well,

demonstrate need, and exhibit commitment to the principles of sound governance,

investing in their people and economic freedom. Experience has shown that it is in

these countries that foreign assistance has been most effective.

At the same time, USAID recognizes the significant number of fragile states in

sub-Saharan Africa and the destabilizing influence that these countries have on economic and social development of their subregions. USAID will target its resources

in these countries specifically to address the root causes of fragility and potential

conflict. In fiscal year 2006, USAID also proposes to expand the use of the ‘‘Transition Initiatives’’ (TI) funding account to program its resources for four key countries:

Afghanistan, Haiti, Ethiopia, and Sudan. The Transition Initiatives account will

provide support to countries that are confronting crisis or are in transition from crisis toward more steady ‘‘transformational’’ economic and social development. The

use of the Transition Initiatives account for the high profile programs in Ethiopia

and Sudan will provide a mechanism that retains the responsiveness and flexibility

of humanitarian aid, but with a focus on addressing the causes of crisis, advancing

democratic governance, and managing conflict within highly charged and fluid environments. This required flexibility is not readily available within the traditional development assistance account which is used to fund long-term initiatives appropriate for transformational development. Using Transition Initiatives account funds

in Sudan and Ethiopia will better enable the USAID Missions in these countries to

direct their programs at the sources of instability and weakness and to redirect

funds if necessary to maximize impact.

In fiscal year 2006, USAID’s Africa Bureau proposes to invest $849.4 million in

Development Assistance (DA), Child Survival and Health (CSH) and Transition Initiative (TI) funding in sub-Saharan Africa. Of this, 50.4 percent will be directed toward transformational development, strengthening fragile states and addressing

global issues and special concerns, such as climate change, through the development

assistance (DA) account; 11.2 percent for assistance in stability, reform, and recovery to Ethiopia and Sudan through the Transition Initiatives (TI) account; and 38.4

percent for child survival and health, infectious disease reduction and family planning programs through the Child Survival and Health (CSH) account. It should be

noted that this excludes all funding for HIV/AIDS in the 12 ‘‘focus’’ countries in subSaharan Africa covered by the President’s Emergency Plan for AIDS Relief

(PEPFAR), which is budgeted directly through the Office of the U.S. Global AIDS

Coordinator in the Department of State.

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Support to the Sudan peace process is the single highest priority in sub-Saharan

Africa and USAID’s Africa Bureau is requesting a total of $89 million in Transition

Initiatives and Child Survival and Health (CSH) account funding for Sudan in fiscal

year 2006. USAID’s goal in Sudan is to establish a foundation for a just and durable

peace with broad-based participation of the Sudanese people. Transition Initiatives

funding will help to lay the groundwork for long-term recovery and to help the country move from crisis toward economic and political stability. Key programs will

strengthen institutions of democratic governance and political parties, improve the

justice sector, strengthen civil society, improve the access to quality education in the

south, and create and strengthen market support infrastructure and institutions.

The support of Ethiopia’s efforts to address issues of chronic food insecurity and

poverty is also one of USAID’s highest priorities in Africa. USAID is implementing

a strategy to manage a transition from an emergency-dominated program to one

which proactively builds capacity to prevent famine and also promotes economic

growth, especially in the agricultural sector. The goal of the strategy is to promote

increased capacity of the government, the private sector, nongovernmental organizations, communities, and households to generate economic growth and to build a

foundation for permanently reducing famine vulnerability, hunger, and poverty.

The centerpieces of USAID’s fiscal year 2006 program will continue to be the four

Presidential Initiatives, launched in fiscal year 2002, the Initiative to End Hunger

in Africa (IEHA), the Trade for African Development and Enterprise (TRADE) Initiative, the Congo Basin Forest Partnership (CBFP), and the Africa Education Initiative (AEI). Other key elements of the program include the continuation of the African Anti-Corruption Initiative, the Conflict and Peacebuilding Initiative and the

Leland Initiative to increase access to information technology.

Agriculture and the Environment

Agriculture remains the mainstay of most sub-Saharan African economies. It

serves as the primary source of livelihood for 65 percent of its people, represents

30 to 40 percent of GDP and accounts for almost 60 percent of export income. Improved performance of the agricultural sector is, therefore, critical to efforts to

achieve food security and reduce poverty. The major constraints to increasing agricultural productivity include low usage of improved technologies, limited access to

credit, low levels of public investment, inefficient land use and environmental degradation, market distortions that discourage production, poor rural infrastructure

and the debilitating effects of the HIV/AIDS pandemic. Now in its second full year

of implementation, USAID’s flagship program in the agriculture sector, the Presidential Initiative to End Hunger in Africa (IEHA), is helping agriculture generate

more income and employment, unleashing the power of new technologies, promoting

policy and program changes to liberalize trade and improve the efficiency of markets

and developing human capital, infrastructure and institutions. IEHA is also assisting NEPAD efforts to launch the G–8 supported Comprehensive African Agricultural Development Plan (CAADP). In fiscal year 2006, USAID proposes to invest

$47.1 million through the Initiative to End Hunger in Africa.

Africa is a continent of great natural riches, unmatched biodiversity, and vast unspoiled landscapes. Prudent management and protection of these assets can contribute to sustainable economic growth as well as to worldwide efforts to improve

the global environment and maintain biodiversity. Yet the region’s environment is

under serious threat. Sub-Saharan Africa contains 45 percent of global biodiversity

yet has the highest rate of deforestation in the world. Serious efforts must be taken

immediately to preserve, protect and improve Africa’s environmental patrimony.

USAID’s environmental programs, which focus on linking better management of

natural resources with improved livelihoods and strengthened environmental governance, are now demonstrating very positive results in over a dozen countries. The

Central Africa Regional Program for the Environment (CARPE), a 20-year effort

begun in 1995, is USAID’s premier environmental program in Africa and serves as

the Agency’s primary vehicle for the U.S. contribution to the Congo Basin Forest

Partnership (CBFP) Presidential Initiative, launched in 2002. The Congo Basin Forest Partnership, an association of 29 governmental, nongovernmental, and private

sector organizations, addresses two of the world’s most significant global issues,

global climate change and the loss of biodiversity in the world’s second largest tropical forest. In fiscal year 2006, USAID proposes to invest $15 million through

CARPE in support of the CBFP activities.

Trade

The globalization of the world economy offers Africa genuine opportunities to increase trade and attract foreign investment. Yet Africa remains at the margins of

the world economy, accounting for just 1.4 percent of world exports in 2002, down

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from 3.5 percent in 1970. The region has enormous potential to become a much

more significant player in international trade. However, to realize this potential Africa must continue to liberalize economic policies and implement institutional reforms required of the changing economic environment. The United States has continued to demonstrate worldwide leadership in expanding trade with Africa through

the African Growth and Opportunity (AGOA) Acceleration Act of 2004. AGOA is

yielding ever more encouraging results with total two-way United States trade with

sub-Saharan Africa rising 37 percent in calendar year 2004, to $44.4 billion. AGOA

imports totaled $26.6 billion in 2004, an 88-percent increase over 2003. While petroleum continues to constitute the bulk of AGOA imports, it is worth noting that nonpetroleum AGOA imports—including apparel and agricultural products—are also on

the rise, totaling $3.5 billion in 2004, up 22 percent over 2003. To support the

AGOA process as well as to promote business linkages between the United States

and Africa and to enhance the competitiveness of African products and services,

USAID will continue to work with the United States Trade Representative and

other United States Government agencies to design and implement trade capacity

building activities, in recognition of the importance of such assistance in promoting

economic growth, reducing poverty, and adjusting to liberalized trade. USAID plays

a critical role in providing trade capacity building assistance in Africa, which has

mainly been implemented through the Presidential Trade for African Development

and Enterprise (TRADE) Initiative. Through this initiative three regional ‘‘Hubs for

Global Competitiveness’’ in southern, eastern, and West Africa, are improving public

services that support trade (such as customs procedures), building African capacity

for trade policy formulation, and strengthening the enabling environment for African businesses. USAID will continue its trade capacity building activities in support

of the United States-Southern African Customs Union (SACU) free trade agreement

negotiations. In addition, the Agency is working to support the WTO negotiations

by focusing on the development obstacles facing the cotton industry in West Africa.

In fiscal year 2006, USAID proposes to provide $15 million of its development resources in the TRADE Initiative. Overall, USAID proposes to invest $311 million,

or 36.7 percent of its development resources, for programs in economic growth, agriculture, and the environment in fiscal year 2006.

Education

Advances in education are critical to Africa’s economic, social, and political development. Although literacy rates have risen from 50 percent in 1990 to 62.4 percent

in 2003, Africa continues to lag behind much of the world in educational attainment.

While access to formal education has improved, 39 percent of boys and 43 percent

of girls are still not enrolled in primary school. Drop out rates remain high, with

just 20 percent of all children completing primary school. Educational quality is also

poor with large class sizes, significant numbers of poorly qualified teachers, and severe shortages of textbooks and teaching aids. HIV/AIDS continues to decimate the

ranks of qualified teachers. Systemic education reform is critical if Africa’s children

are to compete successfully in today’s world. USAID programs focus on educational

policy and systems development, decentralized decisionmaking, and greater parental

and community involvement. An emphasis on basic education, particularly for girls,

has proven to yield high returns. USAID’s flagship program in education is the $200

million President’s Africa Education Initiative (AEI), launched in 2002. USAID proposes to invest $121 million, or about 14.3 percent of its program resources, in education programs in Africa in fiscal year 2006, of which $55 million will support the

Education Initiative. The Education Initiative is on track to provide 250,000 scholarships for girls, 4.5 million much-needed textbooks, and training for 420,000 teachers

over a 5-year period.

Health, Population, and HIV/AIDS

Improved health is both an important development goal in and of itself, as well

as a major factor in reducing poverty and accelerating economic growth. Health conditions in sub-Saharan Africa remain the poorest in the world, with gains in access

to care and wider availability of treatment often undermined by persistent poverty,

conflict, poor governance, and the continued spread of HIV/AIDS and other infectious diseases such as tuberculosis (TB), malaria, polio, meningitis, and cholera. Life

expectancy has continued to decline, to less than 50 in those countries most severely

impacted by HIV/AIDS. Malaria claims over 2.3 million African lives a year, mostly

of young children. In 2003, polio, which had almost been eliminated worldwide,

spread from two endemic countries, Nigeria and Niger, to 10 other countries. SubSaharan Africa also has the highest maternal and neonatal mortality rates in the

world.

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USAID Missions throughout the region are implementing broad-based programs

to increase the availability, effectiveness, and access to quality health care. Successful efforts to create alternative community-based health care financing schemes in

Senegal, Rwanda, and Zambia offer promise to hundreds of thousands of households

and provide successful models for replication. Immunization campaigns have reduced disease rates, and expanded use of bed nets has begun to significantly reduce

the incidence of malaria in target areas. Several countries, including Eritrea, Malawi, and Guinea, have realized important reductions of 19 percent to 32 percent

in child mortality rates. USAID proposes to invest $142.7 million, or 16.8 percent

of its program resources, for child, maternal, or reproductive health, and the reduction of disease.

With a growth rate of 2.4 percent a year, the highest in the world, Africa’s population of 700 million will swell to over 1 billion by 2025, despite the impact of HIV/

AIDS. This will place natural resources, public services, and the social fabric under

enormous strain and impact economic growth. Though the majority of women indicate the desire for fewer children, contraceptive prevalence rates remain under 20

percent in all but five countries and above 50 percent only in Zimbabwe and South

Africa. Dramatic increases in contraceptive prevalence rates in Botswana and Malawi over the past 15 years, however, offer proof that reproductive health programs,

such as those supported by USAID, can indeed promote behavioral change. In fiscal

year 2006, USAID proposes to program $101 million to continue its efforts to support a range of family planning programs, including public education, advocacy, and

outreach through traditional and community structures, community-based distribution of contraceptives, and encouragement of child spacing programs.

Fighting HIV/AIDS is the number one health priority in sub-Saharan Africa. The

pandemic continues to ravage the continent, although there are hopeful signs that

prevention and treatment measures are beginning to slow its spread. Prevalence

rates remain high in all of southern Africa, reaching 25 percent in Zimbabwe and

almost 40 percent in Swaziland and Botswana. Of the estimated 34–46 million people infected by HIV worldwide, 25–28 million reside in sub-Saharan Africa. Over 80

percent are in their productive years and two-thirds are female. The number of

AIDS orphans is expected to rise from 11 million to 20 million by 2010. However,

the experience of Uganda, where infection rates have decreased by 50 percent from

1997–2001, and promising results in Zambia and elsewhere, demonstrate that

strong leadership and an integrated approach to prevention, care, and treatment

can be effective in stabilizing and/or reducing prevalence rates. The President’s

Emergency Plan is offering a new future to people who are infected with the virus

through rapid expansion of prevention, care, and treatment programs of all participating U.S. Government agencies. In coordination with the U.S. Global AIDS Coordinator, USAID proposes to invest $82.2 million of its FY 2006 Child Survival and

Health funding in the fight against AIDS in the ‘‘nonfocus’’ countries in Africa and

will coordinate closely with the other U.S. Government Agencies administering

other components of the Emergency Plan.

Democracy, Governance and Conflict Mitigation

Transparency in government, observance of the rule of law, respect for human

rights, and inclusive political processes are essential ingredients for the continued

economic and social development of sub-Saharan Africa. Good governance, coupled

with improved economic and social well-being, also diminishes the appeal of extremist ideologies and terrorist agendas. USAID democracy and governance programs

throughout the continent promote representative political processes and institutions,

the growth of a vibrant civil society, building the capacity of local governments to

deliver essential services, and respect for the rule of law and human rights. USAID

is also addressing the insidious issue of corruption in the region through its Africa

Bureau Anti-Corruption Initiative, launched in 2003. In fiscal year 2006, USAID

proposes to invest $7.5 million in this initiative, which promotes public access to information, citizen awareness and advocacy, transparency and accountability of government functions and procedures, support for public oversight institutions, and

public-private dialog.

The United States has played a seminal role in successful international efforts to

bring an end to several of the violent conflicts that have plagued sub-Saharan Africa. In January 2005 the Government of Sudan and the Sudan People’s Liberation

Movement signed a comprehensive peace agreement after more than 2 years of negotiations. The agreement ends the world’s longest running civil war, and provides

for fundamental changes in governance through power sharing, wealth sharing, security arrangements, and a formal ceasefire. Across the border, there have been

signs of progress in addressing the 18-year-old conflict in northern Uganda. In addition, the Intergovernmental Authority on Development (IGAD) has achieved several

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major breakthroughs in efforts to restore peace to Somalia. Liberia remains on the

road to recovery after two decades of instability and civil war. In mid-2004, the Congolese Assembly for Democracy was persuaded to remain engaged with the Transition Government. In Burundi, the Parliament agreed to extend the transition until

April 2005 when elections are scheduled. Through the Conflict and Peace Building

Fund, the USAID Africa Bureau is implementing conflict response programs that

aim to avert imminent violence, mitigate ongoing violence, or address its immediate

aftermath. The Fund also supports conflict management programs that address the

causes and consequences of conflict such as youth unemployment, ethnically based

economic competition, and inequitable control over natural resources. USAID proposes to augment its investment in the Africa Conflict and Peace Building Fund by

$20 million in fiscal year 2006. Overall, in fiscal year 2006, USAID proposes to invest $91.2 million, or 10.7 percent of its resources, in efforts to strengthen democracy and governance and mitigate conflict in Africa.

Aid Effectiveness and Partnership

While the United States is the largest bilateral donor in sub-Saharan Africa, we

must actively collaborate with our development partners in the donor community

and with our African counterparts in order to achieve our common goal of a better

life for all Africans. The United States supports ongoing efforts to harmonize our

assistance flows with those of other bilateral and multilateral donors around sound

African country-led development strategies. Experience has demonstrated time and

again that without buy-in to donor programs from country and African regional

partners, assistance funds will have little lasting impact.

In conclusion, USAID is proposing a well-balanced program to address the major

development challenges of the sub-Saharan Africa. The additional flexibility to be

provided through the expanded Transition Initiatives account will assist us in implementing our important programs in Sudan and Ethiopia.

Mr. Chairman, I appreciate this committee’s continuing interest in Africa. I would

be pleased to discuss our budget request and our proposed program and other issues

of concern in Africa with you and members of the committee at this time.

Senator MARTINEZ. Thank you very much.

We’ve been called for a vote. What I want to do is deal with some

of the questions that are before us and allow my distinguished colleague, that has joined us, from Illinois—and then—to also ask.

So I’ll ask a couple of questions, defer to Senator Obama, and

then come back to questions, further, until we have to depart for

our vote.

The Millennium Challenge Account—you know, one of the things

that I pointed out in my opening remarks is the poor development

record, in spite of significant aid, over years—the Millennium Challenge Account is a new approach to development assistance. And

I wanted to ask—eight of the countries eligible for this aid are in

the sub-Sahara, and my question to you is: What types of projects

are we funding under the Millennium Challenge Account? How is

this aid reaching out to make the situation better there? How is

it going to work better than prior aid efforts? Give me your take

on the Millennium Challenge Account, and how it’s working, and

some specifics.

Mr. RANNEBERGER. Just let me say a quick word, and then let

Assistant Administrator Pierson talk.

These projects, of course, Senator, are still in development. But

the kinds of projects that are on the boards now and that are being

drafted, for example, include an anticorruption initiative, which

would pull together government and nongovernmental organizations, in a country which is plagued tremendously by corruption at

this time. There’s another that’s, I think, an environmentally related project, conserving natural resources in conjunction with private-sector and nongovernmental groups.

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So they are the kinds of projects. Of course, none have actually

been signed yet. We do hope that, within the coming near future—

I’d say the next couple of months—that we will start signing the

first compacts with African countries.

With that, let me——

Mr. PIERSON. Mr. Chairman, we believe that the Millennium

Challenge Corporation is one of the best strategic-planning exercises that we’ve seen, in terms of Africa. The Administrator of

USAID is on the board of directors. We work very closely with the

Millennium Challenge Corporation.

The type of programs in which they are involved, as I understand

it, is widely varied, but they certainly look, in terms of the economic activity, the type of government programs that a given country has. Anticorruption is a major part of their programs.

The first compact country under the MCA provisions, I understand, has not been voted on, as yet, by the board, but that is progressing. There are also threshold countries in Africa in which

USAID missions, USAID staff, work very closely to try to help elevate that country from the threshold status, so they can be considered under the other provisions of the MCA.

But we work very closely, as I know the Department of State

does, with MCA.

Senator MARTINEZ. The other transitional—transitional initiatives account—and I was going to ask, on that, the rationale between shifting—behind shifting from development assistance account to transitional initiatives account for Ethiopia and Sudan,

while, at the same time, not doing it for Liberia and Congo. And,

again, what types of assistance projects fall under that category,

and what are we doing there?

Mr. PIERSON. Mr. Chairman, that’s a very good question. The

transition initiative account is increased in fiscal year 2006 for

USAID. It is an attempt on the part of the agency in terms of Ethiopia and Sudan, to prioritize, to give focus, to give added attention

to those countries in which we feel the country—the particular instances in the country may vary, as they would from Ethiopia and

Sudan, but it is a focus, it is a priority, to give more immediate attention to those countries that have the higher budget impact in

which immediate results are more visible.

And that is not to mean that there are other countries that could

not be considered. I just returned from visiting seven countries in

Africa; Liberia was one of them, also in the Democratic Republic

of Congo. And there certainly are other countries that could make

a case. Their situations are very pressing. We want peace, democracy, and good governance in all of the countries.

But the selection in the transition account, we had worked very

closely with both the Senate and the House, in terms of consultation. That account does not have earmarkings. It is an opportunity.

It is a priority, a focus, to address specific needs in these largerbudgeted countries for us, as Africa Bureau.

Senator MARTINEZ. Senator Obama.

Senator OBAMA. Thank you, Mr. Chairman. You know, my suggestion would be, given the short time that we have remaining—

and I don’t want to give 2 minutes to responses on an entire continent—that I submit some written questions. And if the gentlemen

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here would be willing to respond to them in that fashion, then I

think that——

Senator MARTINEZ. That would be fine.

Senator OBAMA [continuing]. May be the best way to proceed.

Senator MARTINEZ. Very good.

We probably should then—what is our schedule, vote-wise? I

think we probably have to recess at this time, go take care of our

vote, and then resume after the vote. I understand it may be two

votes, now, I’m told, so it may be a bit, in which case we may see

you after lunch.

Thank you very much.

Mr. PIERSON. Thank you, Mr. Chairman.

Mr. RANNEBERGER. Thank you.

[Recess from 11:26 to 12:01 p.m.]

STATEMENT OF HON. RUSSELL D. FEINGOLD, U.S. SENATOR

FROM WISCONSIN

Senator FEINGOLD [presiding]. Call the hearing back to order,

and thank everybody for their patience.

The chairman, Chairman Martinez, was kind enough to ask me,

on the floor, to continue the hearing and make my opening comments and ask a few questions. So I appreciate that very much, a

good start to our relationship together, working on this subcommittee.

I want to thank Ambassador Ranneberger and Mr. Pierson for

being here today, and, again, thank Chairman Martinez for taking

on the challenging, but very rewarding, task of leading this Subcommittee on African Affairs.

I’ve been either the chair or the ranking member of this subcommittee for a decade now, and I have enjoyed some wonderful relationships with partners on the other side of the aisle on this subcommittee, from Senator Nancy Kassebaum to Senator John

Ashcroft to Senator Bill Frist to Senator Lamar Alexander.

Today, for the first time, I join my new partner, Senator Martinez, on this subcommittee. And I want to state publicly and for

the record, that I genuinely look forward to working with him in

the cooperative spirit that has always characterized this Subcommittee on African Affairs.

There is much to discuss today. As we sit here, a crisis that both

the Congress and the administration have acknowledged is a genocide raging in Darfur. Instability continues to plague parts of Africa, from the Eastern Congo to Cote d’Ivoire. The insidious influence

of corruption is threatening to steal the victory that Kenyan voters

won just a few years ago, when they chose democratic change for

their country. The Government of Zimbabwe continues to wage a

deliberate and coordinated campaign of repression targeting its

own citizens. The people of Somalia still live in near anarchy. Parts

of Nigeria are controlled by organized criminal syndicates that do

not simply intimidate the state; in these areas the syndicates sometimes are the state. The children of Northern Uganda continue to

have to flee their homes at night in fear.

But even as we focus on these urgent issues, we must also recognize that the news is certainly not all bad, and that our assistance

must help contribute to the momentum behind African successes,

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as well as addressing African crises. From Senegal to Botswana,

governments and civil societies are making fighting HIV/AIDS a

real priority. ECOWAS and the AU stood firmly on the side of democracy when Togo’s longstanding President passed away, setting

off a power struggle. Ironically, in Sudan, where violence in Darfur

continues, the prospect of a lasting north/south peace is closer to

reality than ever before.

As my colleagues in the administration know, I believe that we

serve our own interest and our own best impulses when we pay

close attention to the varied policy challenges we confront in Africa.

It’s unfortunate, however, that we are holding this hearing 1 day

before marking up the foreign assistance authorizing bill. This

timeframe provides little to no opportunity to take the information

from this hearing and then use it to inform the committee’s work.

Nevertheless, I welcome the opportunity to hear from our witnesses, and to work with them and with Chairman Martinez in the

years ahead.

I have a number of questions, but I will put some of them in

writing, certainly with regard to Somalia, where we haven’t really

had a policy. And I’m still waiting for my report on that. I’ve got

questions relating to Uganda.

But let me turn to Darfur and the issue of famine. Jan Egeland,

U.N. Under Secretary for Humanitarian Affairs, recently sounded

the alarm about impending famine in Darfur, stating that some—

some are predicting 3 million, some are predicting 4 million, some

are predicting more than that, of people in desperate need of lifesaving assistance, whose lives will be at stake as we approach the

hunger gap in midyear.

As I understand it, the U.N. World Food Program reached 1.2

million needy recipients in January 2005, which was actually a decline of 3,000—300,000—from December 2004. It appears that our

capacity to provide help is declining, while the magnitude of the

problem is growing.

I’d ask the witnesses: Do you believe that there will be a gap between available assistance and humanitarian needs in Darfur in

2005? How big a gap? And how much of the problem is access? And

how much is related to available resources?

Mr. PIERSON. Senator, at USAID we are doing everything that

we possibly can to ensure that there is no gap in humanitarian assistance in the Darfur area. The FY05—the total amount, dollar

amount, that we have budgeted for Sudan is $664 million, $370

million particularly for Darfur. And we are doing everything that

we possibly can to ensure that emergency food aid, relief supplies,

water sanitation, agriculture—anything related to the humanitarian assistance to that terrible area—that we are doing everything we can to try to make sure that humanitarian assistance is

there, and on time.

There are issues. There are some constraints, certainly, that we

have faced. There’s also a rainy season. There’s logistics issues.

But, in terms of the agency, we’ve expanded the number of people

on our disaster-assistance relief team that is there. And we would

certainly not want to have, in terms of those human needs that are

there, any type of gap in that assistance.

Senator FEINGOLD. Thank you, sir.

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Mr. RANNEBERGER. And what I would add to that, Senator, is

that we have made the access point a major issue in our discussions, of course, with the Sudanese Government. And I do think

we’ve made some headway there. There’s been good coordination

with USAID, so that, as they get the food in place, the government

does not pose the obstacles.

Now they are still posing some obstacles. They’re slow on visa

issuance. Sometimes their local people on the ground in Darfur

don’t get the word from Khartoum to cooperate the way they

should. And, of course, the other big constraint is the violence

itself, which does continue. Unfortunately, it’s a little bit more sporadic now; and so, it’s not always as predictable. So sometimes

routes are shut down one day, and not shut down another. But it

makes it hard to plan convoys and other logistical support.

And on that, I would add that the African Union is gradually expanding their role, in terms of things like patrolling humanitarian

corridors.

Senator FEINGOLD. So, can we expect to see the number of people

reached increase, let’s say, March, April, in that timeframe?

Mr. PIERSON. Senator, I don’t know that I can quantify a number

on that, other than to say that the humanitarian assistance, that

is desperately needed there, is the priority focus for the African Bureau. But in terms of the total number of individuals who will be

reached within another month, 2 months, I don’t know that, at this

stage, I could quantify on that.

Senator FEINGOLD. Sir, anything to add?

Mr. RANNEBERGER. No. The only thing I’d add—I mean, is that,

in addition to Jan Egeland, of course, this is a subject of—the Secretary regularly discusses these issues with Secretary General Kofi

Annan, in terms of the United Nations also needing to push on this

access issue. So the one point—and I think it’s an important one—

is, it’s not just us pushing. There really is a good coordination between us, the United Nations, and the Europeans to push. But I

agree with the Assistant Administrator, it really is impossible to

predict where we’re going to——

Senator FEINGOLD. Well, let’s hope those numbers do get up

there.

I strongly support the administration’s request for an increase in

the budget for educational and cultural exchange programs. And I

am encouraged by Secretary Rice’s strong statements about the importance of getting public diplomacy right and making it a priority.

Often, we hear about new public-diplomacy initiatives in the Muslim world, but rarely do we hear how these initiatives will be pursued in Africa’s many Muslim societies. In fact, I’ve been to eight

different Islamic countries since January, and I have a pretty good

sense of that. I was recently in Mali, actually, where I was shocked

at how small the public-affairs budget was for the year.

Is it possible to break out for me how much you plan to spend

on public diplomacy in sub-Saharan Africa this year and next year?

And what is your strategic plan for reaching out to African Muslims?

Mr. RANNEBERGER. Perhaps I could start, and then if—first of all, we’ve projected $33 million in public-diplomacy funds, which

come of, really, the state operating budget. But, in addition, we do

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use ESF funds. Some of our ESF funds are used to support public

diplomacy, as well.

But it really is a multipronged approach. And I think the good

news, and the important news, in a sense, on outreach, Senator, is

that it’s now integrated into just about everything we do. And I

think a case in point is the HIV/AIDS efforts. You wouldn’t normally think HIV/AIDS in terms of outreach. But what we’ve done

there, for example, is, we’ve channeled an increasing amount of

funding, where possible, through moderate Muslim nongovernmental groups as a way of building those relationships. When you

look at the vaccination issue in Northern Nigeria, that was ultimately resolved by working with the local Muslim authorities and

nongovernmental groups. So this kind of integration into realworld, if you will, practical programs and outreach is important.

But, in addition to doing that, of course, our Ambassadors reach

out to the Muslims in speeches, contacts, and more frequent visits

to Muslim areas of countries. So that is a major priority.

But we’ve also got the full panoply of public-affairs actions. We’ve

increased the amount of American Corners exhibits in Africa. We

have developed, for example, a special program of international

visitors to target more senior imams. Normally, they would be cut

off by the age limit for International Visitor programs, but we’re

now bringing them in under a special program. In fact, I believe

there was one for Mali.

So it’s a very multifaceted approach, and it’s a major priority for

us in Africa. I mean, you have about 43 percent of the population,

or, some people would say, maybe half the African population,

being Muslim at this point. And, of course, education efforts, as I’m

sure can be explained, factor into this, as well, in terms of what

we’re doing on curriculum development in all of these societies.

Senator FEINGOLD. Did you give me a figure for the public diplomacy in sub-Saharan Africa?

Mr. RANNEBERGER. Yes, sir; I said $33 million.

Senator FEINGOLD. Sub-Saharan.

Mr. RANNEBERGER. Yes, sir. As part of the State operations budget. And then in terms of the exact amount of ESF, it would be

hard-pressed to tell you that, because that tends to be—you know,

we tend to allocate that as the year develops, and I don’t have a

specific amount of ESF set aside at this point for the outreach. But

some of it will go toward outreach.

Senator FEINGOLD. Do you want to comment on that?

Mr. PIERSON. Senator, I’d like to comment on three aspects of

your question. One is the public diplomacy, other is education in

general, and then specific Muslim education.

I’ve just returned from visiting seven countries in Africa. And

one of the most memorable things on this trip that I’ve not seen

before, and it’s as a result, I believe, of the administrator’s very

strong efforts in terms of public diplomacy and branding, trying to

ensure that those who receive assistance from the American people

recognize that it does come from the people of this country. And for

the first time—I’ve lived in Africa for a number of years, and I’ve

never before seen this on—as I have on this trip—where the American people were being recognized for their assistance, either in

terms of humanitarian assistance or our implementing partners. I

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saw the ‘‘US AID from American people’’ in Liberia. Virtually every

place that I went there, there would be a sign, ‘‘USAID. From the

American people.’’ I saw that in Kenya. I was in Southern Sudan,

it was there.

The administrator has provided guidance, as we’ve relayed to all

of our mission in Africa, that we need a communications person to

work with the public-affairs individual at the U.S. Embassy. And

that is being done.

For those of our staff who are involved in the southern region of

Africa, we’ve recently had a conference with them, talking about

communication matters, public diplomacy, in Johannesburg. And

starting this weekend will be a similar conference for West Africa;

it’ll be held in Dakar, Senegal.

I think it is a matter of great pride. It’s a matter of great pride

for USAID and, I believe, for the American people who contribute

the moneys that—for these programs—that, I believe for the first

time we are really seeing that public diplomacy, that branding,

take effect where people are really realizing that it comes from the

American people. I don’t have a specific dollar amount on that, but

the effort is certainly there.

One of the fundamental approaches the President has, is the Initiative on Education in Africa. The budget includes $55 million in

FY06 specifically for the President’s Initiative on Africa. There are

other education-related programs that we have. But that’s a very

results-oriented program. And I’m happy to provide more information. But, in terms of girls’ scholarships, there’s something. My

recollection, it is something over 25,000 girls’ scholarships that

have been provided. Teacher training runs up into the hundredthousand or so. Education is a very basic part of what we are

doing.

In terms of Muslim education, specifically, we have a number of

programs in East Africa, as well as West Africa, and I’m sure in

Mali that you had some experience with, what our bilateral mission

is doing, as well as the West Africa regional program. For instance,

in West Africa and Nigeria, there are 70 Islamic schools in which

they participate in learning-institution-specific education for those

Islamic institutes.

So all of those areas are areas that we see as a fundamental part

of our policies and actions in Africa.

Senator FEINGOLD. Thank you for your answers.

Finally, last year’s budget request included a separate line for an

anticorruption initiative in Africa, a portion of the development assistance account. For the current fiscal year, the administration requested over $39 million for this initiative, but this line item does

not exist in the current budget request. Can you explain that?

Mr. RANNEBERGER. Senator, there are two major initiatives in

Africa on counterterrorism, and then other areas that we’re involved in. We have been pursuing this Pan Sahel Initiative. And

I think that’s one of them that you’re referring to, sir. And the Pan

Sahel Initiative was not envisioned as a permanent program. It

was an initiative to help to increase the capacities of the Sahelian

countries to address the counterterrorism. And those funds have

been expended.

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Now, we are looking at a Trans-Sahara initiative—it’s being discussed—which would integrate both the North African countries

and the Sahelian countries. But that is still in development. That

was not developed to that point at which that we felt we could request funding in the 2006 allocation.

However, the other point I would make is that the PKO, the

Peacekeeping—the PKO money that we have, some of that, in

terms of training for African militaries, of course, relates to the

counterterrorism efforts that we’re making. In addition, of course,

we’ve got training programs which will take place within the ESF

account, as well.

So this is—there’s not—while there’s not a specific line item, the

priority very much remains on the counterterrorism efforts.

Senator FEINGOLD. I appreciate that, but I—and I want to actually submit a question to you about the East Africa Counter Terrorism Initiative. My question was about the Anti-Corruption Initiative.

Mr. RANNEBERGER. Oh, I’m sorry.

Senator FEINGOLD. Obviously——

Mr. RANNEBERGER. I missed your——

Senator FEINGOLD. OK. Because, obviously, the issues are related, but——

Mr. RANNEBERGER. Excuse me.

Senator FEINGOLD [continuing]. I’m interested in the Anti-Corruption Initiative. There was——

Mr. RANNEBERGER. I’m sorry.

Senator FEINGOLD [continuing]. $39 million in there for this

year—but there’s no line item for it this year.

Mr. RANNEBERGER. No, excuse me. I misheard you.

Senator FEINGOLD. That’s OK. Go ahead.

Mr. RANNEBERGER. I apologize.

Anticorruption, of course, is a major priority for us, and it is

factored into all of our bilateral programs in the 12 focus countries

that we have in Africa, in particular. And then the $9.7 million regional fund that we have requested for ESF for 2006; some of that

funding will also be used to address anticorruption initiatives.

And I think USAID can speak to some of the funding that they’re

planning to include, that they’ve included in their 2006 request, as

well.

Mr. PIERSON. Senator, there’s no diminishment at all in our interest and activism on anticorruption issues. We’re very—verbally

and the different types of actions that are occurring within our

missions is very strong. To some extent, publicly, is stronger, I

think, that it’s ever been. The money may appear to be different

on the line, because the money’s being allocated specifically and directly to our missions. And so, there may not be a separate line

item. And I’ll get back with you on that, if I may. But it’s my understanding that the moneys on anticorruption are going directly

to our bilateral missions, and there may not be a separate line

item, as there has been——

Senator FEINGOLD. What I’m looking for is assurance that that

money has continued—continuing to be used for anticorruption——

Mr. PIERSON. Absolutely.

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Senator FEINGOLD [continuing]. Not only because it’s critical for

these countries’ development, for their credibility, for their trade,

but also it does directly relate to our ability to fight terrorism in

countries like Kenya and Mali and many other countries in——

Mr. PIERSON. Absolutely. I was in Kenya when the secretary of

the anticorruption unit there with the Kenyan Government resigned. And, in Liberia, of the three major issues that were there,

one was the elections, but anticorruption and taking money constantly—the United States Ambassador made points that public

funds must be managed in an open, transparent manner. There’s

anticorruption money that is there. There’s absolutely no diminishment. In fact, it is even stronger that we are doing.

Mr. RANNEBERGER. Could I just make one point here? On the policy and the indication of what a priority it is for us, I want to just

emphasize that under the G–8 initiative on Africa, anticorruption

is going to be one of the three major issues that will continue to

be addressed. In that connection, Nigeria is a focus country of that

G–8 effort, and we’re pressing Nigerians to develop an action plan

with the G–8.

Senator FEINGOLD. Well, I appreciate that, because for all the

talk here and throughout the administration about antiterrorism

and how we are doing everything we can to stop terrorism, if this

aspect of fighting corruption in some of these countries is not part

of it, we are not serving the American people, we are not truly

stopping the things that can lead to terrorism and facilitate terrorism.

I’m sure you know that, and appreciate your answers. I want to

thank you for your help with this hearing.

And, with that, I adjourn the hearing.

[Whereupon, at 12:21 p.m., the hearing was adjourned.]

AFTERNOON SESSION

The committee met, pursuant to notice in room SD–419, Dirksen

Senate Office Building, Hon. Norm Coleman, presiding.

Present: Senators Coleman, Allen, Murkowski, and Martinez.

OPENING STATEMENT OF HON. NORM COLEMAN, U.S.

SENATOR FROM MINNESOTA

Senator COLEMAN. This hearing of the Senate Foreign Relations

Committee will come to order.

It gives me great pleasure to return to the chairmanship of the

Subcommittee on Western Hemisphere, Peace Corps and Narcotics

Affairs for 109th Congress. I’m equally pleased to continue to work

with my good friend and colleague, Senator Dodd, whose breadth

of knowledge and years of experience in Latin America are virtually unmatched in these halls.

It goes without saying that the United States has a number of

interests in the Western Hemisphere. We have an interest in ensuring that democratic gains made in the hemisphere in the past

two decades continue. We support democracy by working for political inclusion, the rule of law and economic opportunity, and by

standing with our partners in the region in the fight against drug

trafficking. The impact of drugs is acutely felt by too many AmerVerDate 11-MAY-2000 13:57 Oct 05, 2005 Jkt 000000 PO 00000 Frm 00083 Fmt 6633 Sfmt 6602 963433.SEN SFORELA1 PsN: SFORELA1
80

ican families and communities, but we, in the United States, are

not the only ones who struggle with the effects of narcotics trafficking. Drug traffickers breed violence, corruption, and fear, all

factors which threaten democracy in Latin America and in the Caribbean. The United States and other nations in this hemisphere

have similar interests in cooperating in the fight against other

transnational threats like gangs, and international terrorism.

The United States also has important economic ties to the region.

Latin America can represent a major market for United States exports. We have an interest in making sure that there are economic

opportunities south of the Rio Grande, so that fewer people feel

compelled to cross it. Cooperation in the energy sector could yield

economic benefits to the United States, as well as our hemispheric

neighbors. In the age of globalization, I believe there is much we,

as a hemisphere, can do together to make our region more competitive with the rest of the world.

Finally, the United States enjoys cultural and value-driven ties

with our neighbors to the south. One cannot watch the Oscars, for

example, without observing the influence of Latin American culture

here in the United States. Issues such as immigration, international education and adoptions, and humanitarian work have

created strong links between the United States and the other nations in the hemisphere.

As America looks around the world for friends and allies, we are

wise to look in the neighborhood of the Western Hemisphere, and

do more to strengthen these ties. This is a region of great opportunity during an important time historically, but it is also a region

with challenges. Some of our neighbors appear to be taking steps

back from their commitments to democracy and the rule of law.

Cuba is still not a free society. Certain laws of concern are being

considered in Venezuela, and Nicaragua’s progress against corruption and destroying weapons left over from the civil war is in jeopardy. Haiti continues to face huge challenges, from natural disasters, to security concerns, to economic strife.

Economically the region’s performance has improved along with

the U.S. economy, but the challenges remain. Latin America has

the largest income disparities of any world region, an issue which

has given rise to ever more populist leaders. Protection of intellectual property rights remains a concern, and over half of Latin

Americans, in a recent survey, said they would choose an authoritarian leader over a democratic one if it would solve their economic

problems.

Despite the best of intentions, our relations with the countries of

this region are not as good as they could be. The war on terror has

necessitated our attention elsewhere in the world, and anti-United

States rhetoric and sentiments are, unfortunately, evident in many

parts of Latin America as well as elsewhere in the world.

This budget advances American foreign policy goals in the Western Hemisphere in a number of ways. The budget maintains funding for the Andean Counterdrug Initiative which supports Plan Colombia as well as counternarcotics efforts in the countries that border Colombia, so as to prevent gains in Colombia from being offset

by losses in Peru, Bolivia, Ecuador—the balloon effect that we have

heard about and talked about and focused on.

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In many ways the results in Colombia speak for themselves.

Kidnapings are down, murders are down, the people in Colombia

are confident once again to travel within their own country. Insurgent groups are feeling the pressure and are abandoning their

weapons and their dangerous ways of life.

The ACI represents a substantial part of the budget, and it is not

a blank check. It comes with a commitment to support human

rights and human development. Plan Colombia expires at the end

of this fiscal year, but our funding continues. I think it is important to have a road map going forward, and I look forward to working with the administration to put that in place.

After Colombia, Haiti is the largest Western Hemisphere recipient of foreign aid in this budget. Haiti, our close neighbor to the

south, is beginning a pivotal year as it progresses toward democratic elections in November. This budget would shift much of our

assistance to Haiti to the Office of Transition Initiatives at USAID.

This funding is designed to create job opportunities, implement justice sector reforms, ensure free and fair elections, and support reconciliation throughout the country. I look forward to the comments

of our witnesses with regard to the issue of assistance for Haiti.

The President’s budget doubles funding for the Millennium Challenge Account. This innovative approach to foreign assistance

stresses good governance, economic reform, and investing in people.

For 2004, three Latin American countries are eligible for MCA assistance, with two additional countries being eligible in 2005. We

look forward to the signing of MCA country compacts and

disbursals of aid for this valuable program.

This budget supports democracy throughout the hemisphere, including in Cuba. Throughout the region, this budget proposes $144

million in Economic Support Funds (ESF), much of which will support the consolidation of democracy through judicial reform,

anticorruption initiatives, education and economic opportunities.

The budget recognizes the democratic strides made in Guatemala

by proposing the resumption of a tiny amount of military assistance after a 15-year hiatus.

Even as we pursue these lofty goals, the budget will provide assistance to vulnerable populations in the Americas. The budget designates some $125 million in child survival funding and $224 million in development assistance for Latin America. Of the President’s $3.2 billion request for global AIDS, Haiti and Guyana

would receive some $68 million. American farmers will continue to

provide food assistance to millions of at-risk individuals in the

Americas, and the United States will continue to lend a helping

hand in times of emergency as we have done recently in Grenada

and Venezuela.

Another way America demonstrates its commitment to global engagement is through the Peace Corps. The Peace Corps is a unique

institution that harnesses the American spirit for the twin goals of

supporting international development and showing the true face of

America overseas. Writing in the December 2004 edition of the Foreign Service Journal, former U.S. Ambassador Tibor Nagy observes, ‘‘During my long overseas service, I consistently met two

categories of people who were highly favorable toward our country:

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Those who had close contact with the Peace Corps volunteers, and

those who had studied in the United States.’’

This week as we celebrate the 44th anniversary of the Peace Corps, I’m pleased that the President’s budget calls for a $27 million increase for the Peace Corps. This funding will enable the

Corps to expand into two additional countries. At the same time,

we must acknowledge that during each of the last several years,

Congress has failed to fully fund the President’s request for the

Peace Corps. While the small increases we have passed are, no

doubt, welcome, they have not been enough to bring to reality the

President’s vision of doubling the size of the Peace Corps, particularly as the costs per volunteer are climbing in the areas of safety,

security, and health care. I hope this year we, in Congress, will

fully fund the President’s request for the Peace Corps.

As Americans, we are blessed to live in the greatest nation on

earth. There are times and places where America must exercise its

military might, recently in Iraq and Afghanistan. Sometimes great

sacrifice is required. Last week, we, in Minnesota, received the

news that three Minnesota National Guardsmen were killed in

Iraq. The news shook my State and caused all of us to reflect on

what their sacrifice has been for. I attended the funeral of one of

those servicemen yesterday in Marshall, MN. But as we consider

the free elections and new leaders in Iraq, Afghanistan, and the

Palestinian territories, and as the ripple effect spreads to Egypt,

Saudi Arabia, and Lebanon, it is clear to me that these sacrifices

were not made in vain.

At the same time, America has other tools for exerting our influence in the world and winning the war on terrorism. I’ve spoken

at length about the role international exchanges can play in breaking down barriers that too often lead to hate. I would submit that

the budget for foreign affairs is another way to win over hearts and

minds around the world. The President’s request for a 13-percent

increase in foreign aid this year speaks volumes about America’s

commitment to using our ‘‘soft power.’’ This commitment is all the

more striking in a tight budgetary year, and should be recognized.

The Foreign Assistance budget contributes to the shared goals of

supporting democratic governance, encouraging economic opportunity, and demonstrating compassion in the Western Hemisphere.

It is good for America, and it is good for the Americas.

We are pleased to have before the committee the two most foremost officials who look after American policy and American assistance in the Western Hemisphere, Assistant Secretary of State for

Western Hemisphere Affairs, Roger Noriega, and Assistant Administrator of USAID for Latin America and the Caribbean, Adolfo

Franco. At a certain point in time when Senator Dodd will be here,

I will turn to him for a statement, but I do want to thank our witnesses for coming before us. I appreciate all that you do, I appreciate you being before this committee in the past.

I have a great sense of optimism about the possibilities to

strengthen the relationship between America and our neighbors in

the Western Hemisphere. We are, quite obviously, very occupied

with things going on in the Middle East, but for those who have

complained that somehow we’ve ignored the hemisphere, I would

argue that that’s not the case. That certainly this chairman and

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ranking member of this committee, and the gentlemen sitting in

front of us, understand the importance of this relationship and are

working very hard to see that it’s strengthened. I look forward to

that continuing and growing during the course of this 109th Congress.

With that, since my colleague Senator Dodd is not here, I think

what we will do is hear first from Assistant Secretary of State for

Western Hemisphere Affairs, Roger Noriega, and then we will hear

after that from Adolfo Franco.

Secretary Noriega.

STATEMENT OF HON. ROGER F. NORIEGA, ASSISTANT SECRETARY, BUREAU OF WESTERN HEMISPHERE AFFAIRS,

DEPARTMENT OF STATE, WASHINGTON, DC

Mr. NORIEGA. Thank you very much, Mr. Chairman. Let me just

say at the outset that we certainly look forward to continuing to

work with you. I’m sure that with your leadership and insight and

commitment to the issues, we will make the most of an opportunity

to build even closer relations with this region of the world, with

which we have so many important ties.

Our policy in this region, Mr. Chairman, which is supported by

the President’s budget request, is to help countries consolidate and

extend the democratic gains of the past two decades. We aim to

build an inter-American community where all governments are not

only democratic, but the people are genuinely free. Trade with the

region is growing faster than with the rest of the world. At the

same time, the region’s economies grew at the fastest rate in 25

years. The challenge remains, however, to sustain this faster rate

of growth to help reduce chronic poverty.

Also, income distribution in the Western Hemisphere continues

to be among the most skewed in the world, and competitiveness

lacks behind other regions of the developing world. In this environment, we have fine-tuned our programs and assistance to help governments and the region deliver the benefits of democracy to populations that are increasingly impatient. We want to help our neighbors to strengthen their democratic institutions, and retool their

economies to consciously extend political power and economic opportunity to everyone, especially the poor.

Our policy rests on four interdependent pillars: Strengthening

democratic institutions, promoting a prosperous hemisphere, investing in people, and bolstering security. Our policy is both a lens

for analyzing the needs of the hemisphere, and a road map to guide

our actions.

On strengthening the democratic institutions, we have seen too

many political crises in the region, resulting from weak, democratic

institutions. In response, we are advancing an ambitious reform

agenda to help extend political power, promote the rule of law, ensure accountability and transparency, guarantee basic rights, and

help resolve disputes. Of course, in this regard we have, at the moment, some important concerns, for example, in Haiti, Bolivia,

Nicaragua, Venezuela, and Cuba. Each of them represents different

challenges, but what is constant is the need for an active U.S. policy and the means for carrying it out.

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On promoting prosperity in the hemisphere, the key to sustained

economic growth is a reform agenda that further opens markets,

encourages investment and expands free trade. In conjunction with

this effort, we will pursue an ambitious trade agenda in the next

4 years. We remain committed to comprehensive free trade in the

Americas, with our Brazilian partners cochairing that process.

We will be working with Congress very soon, we hope, to approve

a Central American-Dominican Republic Free Trade Agreement,

and we are concluding similar pacts soon, we hope, with Panama

and the Andean countries.

CAFTA–DR, Mr. Chairman, presents another significant step in

the remarkable transformation that Central America has undertaken toward democratic governance and free market economics.

We can make no greater contribution to this process, at this time,

than to secure the approval by Congress of this historic accord.

CAFTA–DR not only will allow all parties in the agreement, including the United States, to increase prosperity through opening up

of markets and increased investments, but it will also strengthen

democracy in the region, encourage critical second generation economic reforms, and contribute to anticorruption and poverty alleviation efforts.

Another pillar of our policy is investing in people. Trade and development go hand in hand, but governments must also adopt policies that spread prosperity to people from all walks of life. In addition, citizens are better able to claim their fair share of economic

opportunity when their government invests in them, specifically in

basic health and education services. This is a crucial component of

President Bush’s Millennium Challenge Account initiative. The

MCC is currently negotiating agreements with three Western

Hemisphere countries, Bolivia, Honduras, and Nicaragua. In addition, Guyana and Paraguay are eligible to receive threshold funding to help them quality for full MCA programs. We are also providing the Caribbean with more than $68 million from the President’s HIV/AIDS initiative, destined to assist Haiti and Guyana to

dramatically expand prevention and treatment and to reduce, significantly, the prevalence of HIV in Haiti.

On security, the focus of our assistance is to help countries reestablish control of their national territory, improve the interdiction

capabilities of countries on the southern approaches to the United

States, and to help modernize partner countries so their defense

forces can participate in peacekeeping and other operations, including counterterrorism operations, around the world.

The Department’s requested Western Hemisphere Regional Security Fund will be used to help resolve territorial disputes, and promote conflict resolution, train security forces to respond to 21st

century threats, and expand security cooperation, as well as reduce

arms trafficking.

You made specific mention of Colombia, and our assistance to Colombia will continue. It has made a crucial difference in President

Uribe’s fight against terrorism and narcotrafficking, and he is

transforming Colombia in a dramatic fashion.

Eradication of illicit crops is at record levels, as are interdictions

and extraditions. Our goal is producing a solid success story that

will be irreversible in Colombia and with its Andean neighbors.

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We’ve reduced cocoa cultivation and increased seizures dramatically. We’re committed to sustaining support in Congress for our

program to help President Uribe win the peace by defeating

narcoterrorists and immobilizing illegal groups.

Finally, we’re attacking crime by fighting corruption. Our regional anticorruption funds will train law enforcement personnel,

support legal reform, and mobilize the private sector through ethics

pacts. As we work to implement our strategy in the hemisphere, we

will retain our commitment to multilateralism.

In 2005, two key multilateral events will help the hemisphere advance a common agenda. In June, the United States will host the

OAS General Assembly in Fort Lauderdale, FL. In November 2005,

Argentina will host the fourth Summit of the Americas, where the

focus will be on creating sustainable jobs.

To sustain the momentum of the past two decades, this administration will be a creative partner with our neighbors seeking to reinforce freedom and to expand opportunity. We want what they

want, a safer and more prosperous neighborhood, where dictators,

traffickers, and terrorists cannot thrive. We are optimistic because

we know these goals are within our reach, as we work together in

a spirit of mutual respect and partnership. Thank you very much,

Mr. Chairman.

Senator COLEMAN. Thank you, Secretary Noriega, I would note

that your full statement will be entered into the record in its entirety.

Mr. NORIEGA. Thank you, sir.

[The prepared statement of Mr. Noriega follows:]

PREPARED STATEMENT OF HON. ROGER F. NORIEGA, ASSISTANT SECRETARY, BUREAU

OF WESTERN HEMISPHERE AFFAIRS, DEPARTMENT OF STATE, WASHINGTON, DC

Mr. Chairman and Members of the Committee, thank you for the opportunity to

discuss the administration’s foreign assistance priorities for the Western Hemisphere.

In his second inaugural address, President Bush proclaimed, ‘‘The best hope for

peace in our world is the expansion of freedom in all the world . . . Our goal . . .

is to help others find their own voice, attain their own freedom, and make their own

way.’’

Putting the President’s words into action in the Western Hemisphere, our policy

is to help countries consolidate and extend the democratic gains of the past two decades. We aim to build an Inter-American community where all governments are not

only democratic, but their people are truly free.

U.S. trade with the region is growing faster than with the rest of the world. At

the same time, while the region grew at its fastest rate in 25 years, the challenge

remains to sustain this faster rate of growth in order to reduce chronic poverty. Income distribution in the hemisphere continues to be among the most skewed in the

world; and competitiveness lags behind other developing regions. Some citizens are

losing faith in the benefits of democracy.

In this environment, we have fine-tuned our programs and assistance to help governments in the region deliver those benefits. We want to help our partners to

strengthen their democratic institutions and retool their economies to extend political power and economic opportunity to everyone, especially the very poor.

Our policy rests on four interdependent pillars: Strengthening democratic institutions, promoting a prosperous hemisphere, investing in people and bolstering security. Our policy is both a lens for analyzing the needs of the hemisphere and a roadmap to guide our actions.

• Strengthening Democratic Institutions

Democracy is our priority. All citizens in the hemisphere deserve a voice in how

their lives are governed. Moreover, many political crises in the region are a direct

result of weak democratic institutions. In response, we are advancing ambitious reVerDate 11-MAY-2000 13:57 Oct 05, 2005 Jkt 000000 PO 00000 Frm 00089 Fmt 6633 Sfmt 6621 963433.SEN SFORELA1 PsN: SFORELA1
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form agendas to help extend political power, promote the rule of law, ensure accountability and transparency, guarantee basic rights, and resolve disputes.

In Haiti, for example, we have an exceptional opportunity to help the Haitian people develop the good government they have always deserved, but rarely had. We are

encouraged that the interim government has set an elections timetable and that the

United Nations and OAS are working to make that timetable a reality.

Much of the United States foreign assistance in Haiti will improve the prospects

for the new government that will be elected in late 2005, continuing the reform and

training of the Haitian National Police and judiciary, boosting anticorruption programs, laying the groundwork for economic growth, and promoting human rights.

In Bolivia, we are focused on ensuring political stability and maintaining constitutional democracy. A significant portion of United States aid to Bolivia will shore up

democratic institutions there, through training for political parties, technical assistance to local governments, programs on human rights, judicial reform and

anticorruption, and efforts to help the majority indigenous population play its rightful role within the democratic process.

And in Nicaragua, United States funding will support national elections in 2006

by assisting with preparations and oversight. President Bolan ̃ os and the two major

opposition parties that control the National Assembly are seeking agreement on a

broad range of governability issues through a national dialog process sponsored by

the United Nations. We are also engaged in high-level talks with the Government

of Nicaragua on a joint plan to secure and destroy man-portable air defense missiles

(MANPADS) left over from the internal conflict that pose a threat to civil aviation

in the region and beyond. Should the Bolan ̃ os government successfully compete for

support through the MCC, these funds will spread the benefits of his development

plan and help sustain his government.

Venezuela has the resources it needs for its own development, but we are concerned that President Hugo Chavez’s very personal agenda may undermine democratic institutions at home and among his neighbors. Despite our efforts to establish

a normal working relationship with his government, Hugo Chavez continues to define himself in opposition to the United States. His efforts to concentrate power at

home, his suspect relationship with destabilizing forces in the region, and his plans

for arms purchases are causes of major concern to the Bush administration. We will

support democratic elements in Venezuela so that they can continue to maintain the

political space to which they are entitled, and we will increase awareness among

Venezuela’s neighbors of President Chavez’s destabilizing acts with the expectation

that they will join us in defending regional stability, security, and prosperity.

In Cuba, the President’s message to democratic reformers facing repression, prison, or exile is clear: ‘‘When you stand for your liberty, we will stand with you.’’ We

are implementing the recommendations of the President’s Commission for Assistance to a Free Cuba designed to hasten a democratic transition, and the regime is

being pressured as never before. We will continue to prepare to support a rapid,

peaceful transition to democracy. And, we will assist Cuba’s democratic opposition

and civil society as it seeks to organize itself for the coming transition.

• Second Pillar: Promoting a Prosperous Hemisphere

Because U.S. purchases, investment, and remittances to the hemisphere dwarf

U.S. aid, the key to sustained economic growth in the Western Hemisphere is a reform agenda that further opens economies, encourages investment, and expands free

trade. We are urging our partners, therefore, to remove impediments to business

creation, improve access to capital, strengthen property rights, and revise their

labor laws. In this way, we can create opportunity and reduce poverty by expanding

the ability of individuals to profit from their labor and creativity.

In conjunction with this effort, we will pursue an ambitious trade agenda in the

next 4 years. In many respects, this free trade agenda takes its inspiration from the

success of the North American Free Trade Agreement; in the case of Mexico, our

trade has increased 135 percent since NAFTA inception in 1994. We also have in

place a new free trade agreement with Chile. In the next several months, we will

be working with Congress to approve a Central America-Dominican Republic Free

Trade Agreement; and we are concluding similar pacts with Panama and our Andean partners. We remain committed to a comprehensive Free Trade Agreement of the

Americas, with our Brazilian cochair as a key player

In Brazil, the personal relationship between President Bush and President Lula

has yielded the most positive and open relations with Brazil in recent memory. We

have a strategy for building even closer ties. We will reach out to engage industry

and the media in support of the FTAA and free trade. In addition, we will orient

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sized enterprises to boost trade-led growth. And we will continue to welcome Brazil’s

cooperation on our shared regional responsibilities.

The trade agreements we are signing don’t simply create economic opportunity,

they transform societies by encouraging the good governance needed to attract investment. Trade accords also require that countries enforce their own workers rights

and environmental legislation.

With your permission, I will return to the subject of the approval of the Central

America-Dominican Republic Free Trade Agreement, or CAFTA–DR, which is one

of the administration’s highest priorities. This free trade agreement represents another significant step in the remarkable transformation that Central America has

undertaken toward democratic governance and free market economies. We can make

no greater contribution to this process at this time than to secure the approval of

this historic accord. CAFTA–DR not only will allow all parties in the agreement, including the United States, to increase prosperity through the opening of markets

and increased investment flows, but it will also strengthen democracy in the region,

encourage critical second generation economic reforms, and contribute to

anticorruption and poverty alleviation efforts.

Along these lines, trade capacity building (TCB) for CAFTA–DR countries is integral to our implementation of the accord. In a first for any free trade agreement,

the CAFTA–DR includes a Committee on Trade Capacity Building, in recognition

of the importance of such assistance in promoting economic growth, reducing poverty, and adjusting to liberalized trade. We support such important work. We are

working through environmental and labor cooperative mechanisms in CAFTA–DR,

and in the other free trade agreements under negotiation, to channel assistance to

improve environmental and labor conditions in our trading partners. In FY05, Congress appropriated nearly $20 million in funds for labor and environmental cooperation for CAFTA–DR countries. We are now working to identify the best way to utilize these resources. We’ll also gain synergy with ongoing TCB efforts and our bilateral assistance in the region, which supports democratic institutions and

anticorruption programs.

• Third Pillar: Investing in People

Citizens are better able to claim their fair share of economic opportunity, when

their government invests in people—specifically, in health and education.

This is a crucial component of President Bush’s Millennium Challenge Account.

As you know, to be eligible for MCA funds—amounting to $2.5 billion for fiscal years

2004 and 2005—nations must govern justly, uphold the rule of law, fight corruption,

open their markets, remove barriers to entrepreneurship, and invest in their people.

By placing a premium on good governance and effective social investment, the MCA

approach should help countries attract investment, compete for trade opportunities,

and maximize the benefits of economic assistance funds. The MCC is currently negotiating full MCA agreements with three WHA countries—Bolivia, Honduras, and

Nicaragua. In addition, two WHA countries, Guyana and Paraguay, are eligible to

receive ‘‘threshold’’ funding to help them qualify for full MCA programs.

Our other assistance programs likewise stress investment in people. We are providing the people of the Caribbean with more than $68 million from the President’s

HIV/AIDS initiative, destined to assist Haiti and Guyana, to dramatically expand

prevention and treatment and have reduced significantly the prevalence of HIV in

Haiti.

We are also making quite substantial investments of Development Assistance and

Child Survival and Health funds in several nations—more than $25 million per

country in Bolivia, El Salvador, Honduras, Nicaragua, and Peru—in an effort to improve education, health care, and food security.

• Fourth Pillar: Bolstering Security

We cannot strengthen democratic institutions, promote a prosperous hemisphere,

and invest in people without bolstering security. The focus of our security assistance

is to help countries reestablish control of their national territory; improve the interdiction capabilities of countries on the southern approaches to the United States;

and help modernize partner countries so that their defense forces can participate

in peacekeeping, coalition, and counterterrorism operations.

The nations of the hemisphere recognize that we all share responsibility to protect

ourselves from terrorism and the illegal trafficking of arms, people, and drugs. For

the United States, this means working with Mexico to strengthen our respective

borders through the Border Partnership Action Plan, and with Canada via the

Smart Border Accord. In the Caribbean, we are strengthening regional security and

protecting the southern approaches by implementing our Third Border Initiative as

well as supporting the Enduring Friendship program. In both the Caribbean and

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Central America, we are boosting drug interdiction programs, advancing the establishment of entry/exit systems at ports of entry, conducting port and airport assessments, providing airport and port security and crisis training. These programs are

funded through the Department of State and other USG agencies, and the OAS

Counter Terrorism Committee, of which the United States is the largest supporter.

We need to strengthen local law enforcement capabilities to address transnational

threats.

In Colombia, United States assistance has made a crucial difference in President

Uribe’s fight against terrorism and narcotrafficking; he is transforming Colombia in

dramatic fashion. While the various terrorist organizations are still serious adversaries, as shown in several recent attacks, President Uribe’s democratic security policy has the guerrillas in retreat and the overall number of terrorist attacks has

dropped dramatically as the armed forces have expanded their level of operations.

Eradication of illicit crops is at record levels as are interdictions and extraditions.

Our policy is a solid success story, with a 33-percent reduction in coca cultivation

from 2001 to 2003. In 2004 more than 178 metric tons of coca were seized, a 23-

percent increase over 2003. We are committed to sustaining bipartisan support in

Congress for our program to help President Uribe win the peace by defeating the

narcoterrorists and demobilizing illegal groups.

By combining eradication, interdiction, alternative development, and strengthening government institutions in Bolivia, Ecuador, and Peru, we have also helped

those governments limit the spillover of drug cultivation. Overall, Andean regional

coca cultivation declined by 16 percent in 2003, compared to 2002. However, much

still needs to be done to eradicate illegal coca in Bolivia and Peru, especially in the

face of organized cocalero opposition. With Argentina, Brazil, and Paraguay, we are

strengthening cooperation in the Tri-Border region in the 3+1 Counter-Terrorism

Dialogue.

The Department’s requested Western Hemisphere Regional Security Fund will be

used to help resolve territorial disputes and promote conflict resolution, train security forces to respond to 21st century threats, expand security cooperation, and reduce arms trafficking.

Finally, we are attacking crime by fighting corruption. Our regional

anticorruption funds will train law enforcement personnel and support legal reform,

and mobilize the private sector through ‘‘ethics pacts.’’ Bilateral assistance in Mexico, Central America, and the Andean region will increase government transparency

and accountability.

As we work to implement our strategy in the hemisphere, we will retain our commitment to multilateralism. Our neighbors share our values and interests, so we

can get results through multilateral organizations.

In 2005, two key multilateral events will help the hemisphere advance common

interests. In June, the United States will host the OAS General Assembly in Fort

Lauderdale, FL. That gathering will advance our agenda of delivering the benefits

of democracy to ordinary citizens.

In November 2005, Argentina will host the Fourth Summit of the Americas,

where the focus will be on creating sustainable jobs through policies that promote

more competitive economies, attract investment, and foster private sector-led

growth—through small and medium enterprises in particular. We will again push

for concrete commitments, including simplifying and expanding access to credit, so

we can empower individuals to benefit from their own efforts.

We have witnessed great advances of freedom and opportunity in the region, but

we need to accelerate our progress or risk being left behind in the global competition

for capital and trade. The Bush administration will be a creative partner to our

neighbors seeking to reinforce freedom and opportunity. We already have many

good-intentioned and hard-working partners in the region.

For the second Bush term, our objectives are the same: A safer, more prosperous

neighborhood where dictators, traffickers, and terrorists cannot thrive. The hemisphere can be optimistic because we know these goals are within our reach, and we

work together in a spirit of mutual respect and partnership.

Thank you very much and I look forward to answering any questions you may

have.

Senator COLEMAN. Thank you.

Mr. Adolfo Franco.

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STATEMENT OF HON. ADOLFO FRANCO, ASSISTANT ADMINISTRATOR FOR LATIN AMERICA AND THE CARIBBEAN, U.S.

AGENCY FOR INTERNATIONAL DEVELOPMENT, WASHINGTON, DC

Mr. FRANCO. Thank you very much, Mr. Chairman. It’s a pleasure to appear before the Senate Committee on Foreign Relations to

discuss how USAID’s Bureau for Latin America and the Caribbean

is implementing the President’s vision for the hemisphere.

At the outset, Mr. Chairman, I want you to know that I fully

share your optimism for our region, and your eloquent statement

is far better than anything I could present here, I fully share it.

And I also like the phrase ‘‘soft power’’ which is what we are promoting at USAID on behalf of the President.

I’ve submitted my complete statement for the record, Mr. Chairman, with your permission I’d like to summarize my statement

here today.

Senator COLEMAN. Mr. Franco, your complete statement will be

entered into the record, without objection.

Mr. FRANCO. Thank you, Mr. Chairman.

Mr. Chairman, the essence of President Bush’s policy for the

Latin American and Caribbean region is that long-term economic

growth and political stability are only possible if governments extend political power and economic opportunity to all of their citizens, especially the very poor. By promoting prosperity throughout

Latin America and the Caribbean, the United States can provide

expanded opportunities to promote a peaceful and democratic hemisphere, and Secretary Noriega is absolutely right, we want exactly

what they want.

USAID, therefore, remains committed to the promotion of the

consolidation of democracy and improved political stability, advanced market-based development, and increased human wellbeing for the fulfillment of human potential in our region.

Mr. Chairman, there is good news in our region. With the exception of Haiti, 2004 has seen a healthy turn in the region’s economic

activity, which averaged a 5.5-percent growth. Of all United States

exports, 40 percent were sold to Latin America and the Caribbean,

and the United States continues to be the largest buyer of all of

Latin America and the Caribbean’s exports.

However, as you have noted, Mr. Chairman, and so has Secretary Noriega, there is a huge income disparity in the region compared to the rest of the world, and the challenge will be to remain

competitive with other regions of the world as we move to a further

globalized economy, and therefore these remain monumental challenges in our region.

Mr. Chairman, I would like to highlight some key areas of concern to us and to the committee. First, corruption is continuing to

lead in terms of the crisis and challenges of the region, and continues to pose a threat to democracy. As you noted, Mr. Chairman,

recent polling data is disturbing, and suggests that many citizens

would prefer authoritarian regimes, that can deliver economic benefits, to democratic governments.

Corruption is a real threat to economic development as well, and

the growth of democratic and strong societies will be impossible if

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ority for the Bush administration. I think the President eloquently

stated that vision when he spoke at the Development Bank 3 years

ago, announcing the Millennium Challenge Account.

Despite, Mr. Chairman, bold efforts by Colombia, Bolivia, and

Peru to combat narcotrafficking, the continuing lack of state presence and functioning public institutions have allowed illegal narcotics production and armed terrorist organizations to continue to

flourish, particularly in the Andean region.

We also face the growing problem of global demand for forest

products. Illegal and destructive logging remains a key threat to

our region. It is important to underscore that Latin America has

the largest remaining forests in the world and they are under increasing stress. In addition, as you noted, Mr. Chairman, inequalities and access to quality health services also present a major obstacle to achieving overall economic and social development in

Latin America and the Caribbean which has the second highest

prevalence rate of HIV in the world.

To help address these challenges, USAID will continue to focus

on four strategic program priorities. Number one, democracy and

governance. Number two, economic prosperity and security. Number three, counternarcotics, and lastly, social and environmental

development issues.

In addition, USAID is implementing a number of President

Bush’s initiatives from the President’s Emergency Plan for HIV/

AIDS Relief, to the Centers for Excellence in Teacher Training, to

the Amazon Basin Initiative, and lastly to the Water for the Poor

initiative, which I know, Mr. Chairman, is of great interest to you.

I would like to give you some of the details of the priority areas

I’ve outlined. On democracy and governance, as stated previously,

legal and judicial reforms remain the highest priority for USAID

governance program in the region. This is because corruption remains the chief obstacle to economic development, and to effective

democratic governance throughout the hemisphere. USAID-supported criminal justice system reforms, are improving access to

courts, providing more open and participatory processes, leading to

faster resolution of cases, and increasing citizen confidence, and we

need to redouble these efforts.

On the economic, prosperity, and security front, the United

States continues to help Latin American and Caribbean countries

to enact legal policy and regulatory reforms that promote trade liberalization, hemispheric market integration, and improved competitiveness. USAID provided technical assistance and public outreach

in Central America, and the Dominican Republic during the negotiations for the United States-Central America Free Trade Agreement, which was signed by five countries in Central America in

2004. CAFTA implementation will continue to be a major priority

in 2006, along with increased efforts to negotiate other free trade

agreements in the region, particularly the Andean region of South

America.

On the counternarcotics front, as you know, Mr. Chairman, narcotics trafficking leads to violence, crime, and corruption, and

weakens governments, especially in the Andean region. To address

this threat to democracy, the Andean counternarcotics initiatives

have three primary goals. First, disrupt the production of illicit

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drugs. Second to strengthen law enforcement in the region, and

third, to develop licit income alternatives to illegal drug production.

Since its inception in fiscal year 2003, USAID’s assistance to Andean governments has expanded state presence, strengthened democracy, created licit income streams, improved social conditions,

and provided assistance to displaced people. And, as Secretary

Noriega underscored, I think our assistance was critical to assisting the courageous government of President Alvaro Uribe in Colombia.

On the social and environmental issues, Mr. Chairman, USAID

assistance in the health sector has helped to advance cure rates for

tuberculosis, expand vaccination coverage, reduce major childhood

illnesses and deaths, lower maternal mortality rates, and develop

cost-effective methods for combating malaria and other contagious

diseases. Under the President’s emergency plan for AIDS relief,

USAID will continue to assist the two high-risk focus countries in

our region, which are Guyana and Haiti, and also establish two

subregional programs on HIV/AIDS in the Caribbean and Central

America, as well as in 10 other countries, and I’m also working personally very closely with the business community, both United

States and international in the region to establish business councils to promote HIV training, education programs, and treatment.

USAID education programs also continue to develop effective

service delivery models that provide promise to people’s lives in the

future, for young people to have training, particularly on the technical and IT areas, which have been lacking in our region. We support monitoring student performance, better information systems

for ministries of education, and special training for young adults to

compete in the workforce. I wish to note that we have an enormously large youth population in this region, and this is of concern

to the President, I know he’ll discuss it at the Summit in November, we need to create future jobs for this growing population in

our region.

USAID also implements a wide array of environmental programs

that respond to the President’s priorities to protect and conserve

the region’s natural resource base and biodiversity by reducing environmental hazards, and increasing the management of, and access to, clean water in the region. A major strategy will be

launched this year to further expand our efforts in biodiversity conservation, particularly in the Amazon basin countries.

In conclusion, Mr. Chairman, the programs I have mentioned

offer you an insight into the steep development challenge that the

countries of our hemisphere face. I, as you, remain optimistic

though, that with the leadership and vision of President Bush, Secretary Rice, and Administrator Natsios, we are setting a new

standard, particularly on the corruption and good governance front

that will instill a deserved sense of security, opportunity, and prosperity for all Latin Americans and Caribbeans.

I would be pleased to answer any questions that you or the distinguished members of the committee might have for me. Thank

you very much.

[The prepared statement of Mr. Franco follows:]

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PREPARED STATEMENT OF HON. ADOLFO A. FRANCO, ASSISTANT ADMINISTRATOR, BUREAU FOR LATIN AMERICA AND THE CARIBBEAN, U.S. AGENCY FOR INTERNATIONAL

DEVELOPMENT, WASHINGTON, DC

Mr. Chairman, Members of the Committee, it gives me great pleasure to appear

before the Senate Committee on Foreign Relations to discuss with you how USAID’s

Bureau for Latin America and the Caribbean (LAC) continues to promote the President’s vision for the Western Hemisphere. The essence of President Bush’s policy

is that real, long-term economic growth and political stability are only possible if

governments consciously extend political power and economic opportunity to everyone, especially the very poor. In her January 18 confirmation hearing before the

Senate Foreign Relations Committee, Secretary of State Condoleezza Rice stated

that the Western Hemisphere is ‘‘extremely critical’’ to the United States. ‘‘With our

close neighbors in Latin America we are working to realize the vision of a fully

democratic hemisphere bound by common values and free trade.’’

The strong economic, cultural, and geographic ties between the United States and

the countries of the Western Hemisphere make their political and economic stability

of vital interest to the United States. Approximately 40 percent of imports for LAC

countries come from the United States, 50 percent of the region’s exports ($217 billion) are purchased by the United States, and Latin America supplies more than

one-third of United States energy imports. In 2003, $20 billion of U.S. private investment was made in the region, and according to the Inter-American Development

Bank May 2004 report, an estimated $30 billion in remittances were expected to

flow to the region from the United States. Still, the people of the LAC region suffer

from huge income disparity compared to the rest of the world, and competitiveness

lags behind other developing regions of the world.

The challenges remain formidable as it becomes obvious that many regional

economies are not growing sufficiently fast to generate enough jobs to keep up with

population growth, let alone address chronic poverty.

Mexico is the largest source country for unauthorized immigration to the United

States, and of the six other countries with more than 100,000 unauthorized residents in the United States, five are in Latin America. As stated by President Bush

in November 2004, ‘‘In this century, countries benefit from healthy, prosperous, confident partners. Weak and troubled nations export their ills—problems like economic instability and illegal immigration and crime and terrorism. . . . Healthy and

prosperous nations export and import goods and services that help to stabilize regions.’’

The challenge ahead for the LAC region is to produce more sustainable, equitable

growth, and develop diversified, broad-based economies if U.S. assistance is expected to make a substantial difference in reducing poverty. To this end, the United

States can provide expanded opportunities that promote a peaceful and democratic

hemisphere.

There is growing consensus that corruption is leading to a crisis for democracy

in this region. Corruption is not only a consequence of weak governance, but is a

barrier to economic development and growth of democratic and strong societies. The

Center for Strategic and International Studies reported in 2003 that a corrupt or

inefficient justice sector can slow economic development, undermine the strength

and credibility of democratic institutions, and erode the social capital necessary for

increased human well-being and the fulfillment of human potential.

Further, research by the World Bank shows that countries that effectively address

corruption and improve the rule of law can increase their national incomes by fourfold over the long term, and child mortality can fall as much as 75 percent.

Both policymakers and the public are growing more aware that corruption has

significantly increased. A 2003 survey by the World Economic Forum of business

leaders in 102 countries found that 7 of the 10 countries with consistently high

measures of political corruption are in Latin America. Growing awareness of corruption has influenced the rhetoric of politicians, and many officials have won elections

by promising to fight corruption. Similarly, civic organizations and the media are

increasingly promoting transparency, lobbying for reforms, and informing citizens.

LAC countries have adopted a wide range of legal, accounting, and auditing procedures to combat corruption, and some are prosecuting corrupt public officials. The

pervasive nature of high-level corruption across the region makes prosecution and

punishment imperative.

In December 2003, former Nicaraguan President Arnoldo Alema ́n was sentenced

to 20 years in prison for corruption. Accused of helping to divert nearly $100 million

of state funds into his party’s election campaign and found guilty of money laundering, fraud, embezzlement, and electoral crimes. Alema ́n has been released from

93

prison to serve his sentence in his home, where he continues to negotiate political

deals that could result in reversing his conviction.

In January 2004, prosecutors in Guatemala initiated a formal investigation of embezzlement charges against former President Alfonso Portillo, as well as his Vice

President, Finance Minister, and three other top officials, who are now in jail.

Former Costa Rican President Miguel Angel Rodriguez resigned as secretary general of the Organization of American States in October 2004. This action followed

allegations of corruption against Rodriguez, who is presently under house arrest.

And, in Paraguay, six Supreme Court justices charged with corruption were impeached and replaced in 2004, and judges selected in an open and transparent process for the first time in Paraguayan history.

Just and effective legal systems increase government credibility amid its citizens

and bolster support for democratic institutions. The 2004 United Nations Development Program Report on Democracy in Latin America drew attention to declining

public faith in democracy due to persistent poverty and governments’ inability to effectively deliver public services, including security. In addition, countries with more

effective and equitable justice systems provide more stable and attractive investment environments by offering legal protections for investors.

Although LAC countries have made strides to adopt procedures to make criminal

justice more transparent, efficient, and participatory, much remains to be done to

fully implement these reforms and provide access to justice for all. Crime and organized gangs, fueled by a combination of population density and resource conflict,

rapid urbanization (World Bank estimates that 58 percent of Latin Americans live

in urban areas), and persistent income inequality, present a growing problem that

places further stress on democratic institutions. A study by the Inter-American Development Bank notes that Latin America’s per capita gross domestic product would

be 25 percent higher today if the region had a crime rate similar to the rest of the

world.

Free and fair elections have become the norm in the LAC region. However, Haiti’s

fraudulent parliamentary elections in 2000 led to a protracted political impasse

characterized by arbitrary and authoritarian rule, lawlessness, and violence. The

impasse ended in 2004 with the resignation of President Aristide. To demonstrate

commitment to advance and consolidate democracy, alleviate poverty, and restore

stability in Haiti, the donor community pledged more than $1 billion in short-term

assistance to the interim Government of Haiti. That available funds are being utilized at a significantly slower than envisioned rate is indicative of Haiti’s weak public institutions, unskilled workforce, and insecure working environment—hallmarks

of a fragile state.

Despite bold efforts by Colombia, Bolivia, and Peru to combat narcotrafficking, the

continuing lack of state presence and weak institutions in some areas allow illegal

narcotics production and armed terrorist organizations to operate. Profits from narcotics offer large trafficking organizations the means to corrupt and undermine legitimate governments, and the lack of effective rule of law threatens business interests and puts citizens and Americans at risk.

Economic growth in LAC reached 5.5 percent in 2004 (according to a preliminary

estimate by the Economic Commission for Latin America and the Caribbean), outperforming the most optimistic forecasts. With the exception of Haiti (where GDP

fell 3.0 percent), every country in the region posted positive growth. This growth is

a reflection of improved macroeconomic policies throughout the region, including fiscal consolidation and prudent monetary management. As a result, the countries in

the region were able to reverse the trend where GDP has grown, on average, by a

paltry 2.0 percent annually for the last 9 years.

The region’s macroeconomic performance is closely tied to the international economy. World economic activity increased in 2004 and global GDP is expected to grow

just under 4.0 percent (up from 2.6 percent in 2003), while world trade is expected

to grow more than 9.0 percent. This international environment, especially rising

prices for oil, metals, and agricultural commodities, also boosted the terms of trade

in LAC. In 2003 the region marked its first balance of payments surplus in 50 years,

and posted a surplus again in 2004. Importantly, this surplus is not only a reflection

of high commodity prices, with export volumes rising an estimated 11 percent last

year, but also improved terms of trade and migrant remittances, which rose 16.8

percent over 2003 levels.

Significant challenges remain, however, to lock in this higher rate of economic

growth and reduce poverty. These include putting in place the macroeconomic reforms needed to boost competitiveness and productivity growth. Nearly 128 million

people (about 25 percent of the region’s population) earn less than $2 per day and

50 million people earn less than $1 per day. The urban unemployment rate has hovered around 10 percent for the last several years. External debt for the region reVerDate 11-MAY-2000 13:57 Oct 05, 2005 Jkt 000000 PO 00000 Frm 00097 Fmt 6633 Sfmt 6621 963433.SEN SFORELA1 PsN: SFORELA1
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mains a concern; since the mid-1990s, external debt as a share of GDP has risen

from a low of 35 percent in 1996 to 43.9 percent in 2003. Although the IMF estimates external debt fell to 38.4 percent in 2004 on the back of strong fiscal performances, this level of debt is still too high. This indicator was highest for Guyana (202

percent), Nicaragua (162 percent), Argentina (130 percent), and Belize (90 percent).

Spurred by a growing global demand for timber and paper, illegal and destructive

logging remains one of the key threats to the world’s oldest forests. Illegal logging

destroys forest ecosystems and displaces the poor, robs governments and communities of needed revenues, and acts as a disincentive to sustainable forest management. Only 0.5 percent of all forests are under ecologically sound management, as

certified by independent international certification bodies.

Inequalities in access to quality health services, especially for maternal and child

health, present major obstacles to achieving overall health improvements as well as

economic and social development in the LAC countries. HIV/AIDS prevalence is increasing across the LAC region, with significant increases noted between 2001 and

2003 in Belize, Honduras, Suriname, and Jamaica. The adult HIV/AIDS prevalence

rate in the Caribbean is surpassed only by sub-Saharan Africa, and AIDS has become the leading cause of death in the Caribbean for both men and women aged

15–24. More than 2 million people now live with HIV in LAC countries. In the past

year, over 250,000 people were newly infected with HIV and well over 140,000 people died from AIDS in 2004.

The increased risk of transmission stems from social patterns of early sexual initiation and multiple partners, as well as stigma and discrimination, which keep the

disease underground and discourage people from seeking testing and treatment.

This poses a serious threat for the security and health of the United States, given

the high mobility of LAC populations regionwide for employment, education, and

tourism.

The quality of primary and secondary education in LAC countries is poor. In a

recent study by the Organization for Economic Cooperation and Development of

math and science skills among 15-year-olds in 43 countries, the 5 participating LAC

countries ranked among the lowest. The majority of students attends weak and underfunded schools, and fails to acquire basic skills in mathematics, language, and

science. Educational systems lack adequate financing, which translates into poorly

trained and motivated teachers and a shortage of materials.

Rural and poor populations, the majority in most LAC countries, face many obstacles—language barriers, long distances to schools, and poorly trained teachers—resulting in very high dropout rates. Fewer than 30 percent of students in the region

complete secondary school, and many who do finish lack the skills to compete in the

workplace, especially in an increasingly competitive global economy.

U.S. NATIONAL INTERESTS

As outlined in the U.S. National Security Strategy of September 2002, and the

joint State-USAID 2004–2009 Strategic Plan, USAID’s overarching goal is to advance sustainable development and global interests.

In LAC, the four top strategic priorities are: (1) To advance democracy and human

rights; (2) to increase economic prosperity and security; (3) to combat narcotics trafficking; and (4) to address social and environmental issues. These strategic priorities

give paramount importance to the implementation of policies that address the key

constraints to development.

USAID OPERATIONAL GOALS FOR THE LAC REGION

USAID’s challenge in the LAC region is to continue to assist with building a hemispheric community where all governments are not only democratic, but their people

are truly free. Within this environment USAID continues to target its scarce development assistance resources mainly to those countries that are making the difficult

decisions to help themselves. We want to help our partners to retool their economies

to take advantage of the new trade opportunities, to strengthen their social and political institutions through greater investments in health and education, and to encourage responsible policies and effective government.

The LAC Bureau determines strategic priorities for transformational development

countries (all of the 16 USAID presence countries except Haiti and Colombia—both

grouped as strategic states) according to their performance against Millennium

Challenge Account (MCA) indicators that reflect effective governance, economic

growth, and investment in people. In low-income (MCA eligible) countries where

there is political will and commitment to address the performance gaps, USAID’s

programs are designed to improve country performance to meet the MCA assistance

criteria.

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Three countries from our own hemisphere were among the first 16 to be declared

eligible for MCA assistance: Bolivia, Honduras, and Nicaragua. Two additional

countries were recently selected as ‘‘MCA threshold countries’’ for fiscal year 2005:

Guyana and Paraguay. These countries will receive USAID assistance aimed at

helping them achieve full eligibility.

In both the low- and middle-income countries, USAID is strengthening the skills

of host country government institutions and local organizations to address MCA performance gaps and ensure sustainability of development progress, as well as addressing global and transnational issues such as HIV/AIDS, conservation of biological diversity and global climate change, trafficking in people, direct support for

trade agreements, and counternarcotics.

In Haiti, a top hemispheric priority country, USAID’s core program focuses on humanitarian assistance and support to the interim government in its efforts to reestablish political stability and improve economic performance, implement justice and

police reform, and hold free and fair elections. To implement these activities, USAID

is requesting additional resources from the planned Transition Initiative Appropriations account to fund the creation of short-term employment, environmentally sound

agricultural production, improving access to microfinance, primary education, justice, human rights protection, and civil society strengthening. The USAID program

in Colombia, another Presidential priority country, is designed to attack narcotics

trafficking. Other strategic program goals in the region include implementation of

the Peru/Ecuador Peace Accords, bolstering security in the Caribbean and building

international solidarity for human rights activists, especially strengthening the

voice to Cuba’s independent journalists.

In the Caribbean, USAID provides significant humanitarian assistance to countries recovering from several hurricanes and tropical storms which caused significant human suffering and economic loss in September 2004. Grenada, Haiti, and Jamaica were particularly hard hit. Following the disaster relief phase, the economic

recovery program has drawn on lessons learned from post-Hurricane Mitch reconstruction efforts in Central America to implement community infrastructure rehabilitation and economic revitalization, including targeted assistance to particularly

damaged economically important sectors, such as the tourism, agriculture, and fishing industries to create employment and revitalize economic growth.

DEMOCRACY AND GOVERNANCE

Justice sector modernization remains the largest focus of USAID governance programs in the LAC region. USAID is advancing criminal justice reforms, strengthening judicial independence, expanding access to justice, and improving administration of justice. Criminal justice system reforms developed and enacted over the last

decade are making an impact through improved access to courts; more transparent,

efficient, and participatory processes; faster resolution of cases; and increased citizen confidence in the integrity of the process.

USAID has also made significant progress to provide alternative case resolution

mechanisms, including the establishment of 61 mediation centers in eight countries.

In addition, 61 community justice centers bring together a variety of justice-related

institutions and services in a single location, often in areas where no access was

previously available to justice. USAID plans to make operational 15 additional mediation centers and 15 additional justice centers by the end of 2006. These and other

justice reform efforts will reduce the time to process cases in eight target countries

by an additional 20 percent by the end of 2006 (for Bolivia, Dominican Republic,

Ecuador, El Salvador, Guatemala, Honduras, Nicaragua, and Peru). New efforts in

justice reform will target crime prevention and commercial codes.

USAID’s governance programs promote accountability and transparency in national and local government institutions, strengthen civic organizations to advocate

for citizens’ rights, and increase the skills of national and local governments to manage resources and provide services. We can see the results of electoral reform in

Honduras, where for the first time in history, citizens were able to vote directly for

representatives, rather than for a party slate. Anticorruption programs, such as establishment of transparent management and recordkeeping systems or auditing

agencies, improve citizen oversight and build local capacity to address issues of

weak governance, entrenched political institutions, and poor public sector management.

USAID investments, since 1990, have encouraged adoption of national-level integrated financial management systems by all USAID presence countries in LAC,

bringing transparency to national budgets for the first time. USAID, plays an active

role in anticorruption efforts. At the local level, technical assistance and training for

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municipal leaders improves coverage of basic public services and infrastructure,

transparent financial administration, and public participation in decisionmaking.

USAID collaborates with U.S. Government agencies in planning and managing

the biennial Global Forum against Corruption, and convenes the Donor Consultative

Group for Latin America and the Caribbean. The Agency advises the State Department in the work of the committee of experts for the implementation mechanism

of the Inter-American Convention Against Corruption by involving USAID missions

and civil society in the review process.

ECONOMIC PROSPERITY AND SECURITY

USAID is assisting LAC countries to enact legal, policy, and regulatory reforms

that promote trade liberalization, hemispheric market integration, competitiveness,

and investment. USAID was instrumental in providing technical assistance and

public outreach in Central America and the Dominican Republic during negotiations

for the United States-Central America Free Trade Agreement (CAFTA), which was

signed by five countries in 2004. USAID continues to help countries meet new

standards for rules of trade, such as customs and rules of origin, sanitary and

phytosanitary measures (animal and plant health and food safety), and intellectual

property rights. In addition, USAID assistance helps smaller economies benefit from

a global trading system by addressing longer term challenges, such as rural economic diversification and small and medium enterprise development and competitiveness.

Implementation of CAFTA will continue to be a major priority in 2006, along with

increased efforts to negotiate other free trade agreements, including a United

States-Andean Free Trade Agreement. USAID will continue to play a vital role with

the United States Trade Representative and partners in the Andean region in trade

negotiations with Colombia, Ecuador, and Peru. Our work related to CAFTA and

in the Andean region is expanding as we partner with different governments, producers, associations, nonprofit organizations, think tanks and especially corporations to promote an enlightened dialog about the role trade can play in stimulating

economic growth.

USAID will continue to support development of regulatory frameworks and innovative approaches to widen and deepen financial intermediation in the small and

microenterprise sector to give marginalized business people greater access to borrowing capital. USAID plans to train an additional 10,000 people across the region

in trade-related areas in 2006. USAID is also supporting cutting edge efforts to increase the developmental impact of remittances, which were estimated at $38 billion

in 2003—more than all other development assistance combined.

ANDEAN COUNTERNARCOTICS

Narcotics trafficking, guerrilla and paramilitary violence, human rights abuses,

corruption, crime, and a lack of effective government presence in the coca-growing

areas in the Andes pose a threat to democracy in the region.

The Andean Counternarcotics Initiative has three goals: (1) Disrupt the production and trafficking of illicit drugs in the Andean region; (2) strengthen law enforcement and judicial institutions that combat narcotrafficking; and (3) develop viable

alternatives to illegal drug production. Working in partnership with the leadership

in the Andean region, USAID’s assistance has helped to expand state presence,

strengthen democracy, create licit economic opportunities, improve social conditions,

and provide assistance to internally displaced people. For example, in Peru from

1995 to 2001, the alternative development program contributed to a 75-percent reduction in the hectares under illicit coca. Today, the legal agricultural economy in

the coca growing regions is larger than the coca economy.

In his remarks at an international donors’ conference for Colombia held February

3–4, 2005, in Cartagena, Colombia, USAID Administrator Andrew Natsios noted the

Government of Colombia’s political will and commitment to coca eradication and asserted that the global community, by working together, can provide the appropriate

types and levels of assistance Colombia needs to end the drug trade and strengthen

‘‘legitimate’’ state institutions in a manner that protects the rights and freedoms of

its citizens. He added that the United States will continue to provide assistance on

alternative development programs to expand opportunities for social, economic, and

democratic progress by farmers ‘‘caught up in illicit drug cultivation.’’

SOCIAL AND ENVIRONMENTAL ISSUES

USAID programs in the health sector are improving access to and quality of

health services offered by both private and public sector care providers. USAID assistance has directly contributed to important advances in detection and cure rates

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for tuberculosis, significantly raised vaccination coverage rates, and helped reduce

or eliminate major childhood illnesses, such as measles in LAC countries. While

progress is being made to lower maternal mortality and apply proven, cost-effective

methods to combat malaria and other contagious diseases, infection rates remain

unacceptably high.

In the LAC region, the HIV/AIDS epidemic is largely concentrated in high-risk

populations. Under President Bush’s Emergency Plan for AIDS Relief (PEPFAR),

USAID assists in two focus countries (Guyana and Haiti), subregional programs in

the Caribbean and Central America, and 12 nonfocus countries. These 12 ‘‘nonfocus’’

programs are extremely important in combating the epidemic since they not only

cover non-USAID presence countries (such as Costa Rica, Belize, and nine Eastern

Caribbean countries), and Panama, but they also engender economies of scale in

cross-border initiatives. For example, the Central America program saves money by

negotiating regional prices for media programs across Central America.

In addition, these programs ensure effective collaboration with and among regional bodies working to fight HIV/AIDS. In the Caribbean, for example, USAID

helps support the Caribbean Epidemiology Centre in its HIV/AIDS surveillance activities, and PANCAP (Pan-Caribbean AIDS Program), which was the first regional

program to receive a Global Fund grant. Regional programs are also effective at

leveraging other donor resources. In the past 2 years the Guatemala-Central America Program has leveraged 7.6 million Euros from the Germans (KFW) and an $8

million World Bank grant to complement USAID regional program efforts.

Across the LAC region, USAID activities have resulted in a significant decrease

in risky behavior and an increase in protective behavior, a substantial increase in

access to treatment and diagnosis, and a marked improvement in the quality of care

and support available for people living with HIV/AIDS.

USAID education and training programs develop innovative and more effective

service delivery models, many of which are being expanded by host governments

and multilateral development banks. USAID programs support the following: Improved testing and student assessment; development of school-level report cards;

management information systems to help Ministries of Education make targeted investments in low-performing schools; and greater parental and community involvement in education.

In direct response to the poor quality of primary and secondary educational structures in LAC countries, USAID will train an additional 5,500 teachers and administrators in 2005 and 2006 through the Centers of Excellence for Teacher Training

(CETT), a Presidential Initiative to improve the quality of reading instruction in the

1st through 3rd grades. USAID also supports advancements in workforce training

and higher education to help young adults prepare to enter the workforce.

USAID’s environment programs protect the region’s natural resource base and

biodiversity, and reduce environmental hazards. As part of the Global Climate

Change Initiative, USAID strives to improve land use and management of scarce

biological resources, and promote the transfer and wider adoption of clean energy

technologies. Through the Initiative Against Illegal Logging, USAID attempts to reverse the sale and export of illegally harvested timber products and assist countries

to establish and strengthen enforcement of laws related to forest management,

strengthen protected areas management, and promote good business practices,

transparent markets, and legal trade. Under the Clean Energy Initiative in Mexico,

USAID supports clean energy production and promote energy efficiency concepts to

selected municipalities.

USAID is also continuing efforts to improve the management of water resources

and accelerate access to clean water in support of the Water for the Poor Initiative.

A regional strategy for biodiversity conservation in the countries comprising the

Amazon Basin will improve the capacity of indigenous communities and local law

enforcement agencies to protect the biodiversity of indigenous peoples’ reserves. As

part of the work USAID conducts in this sector, an additional 1.5 million hectares

(bringing the total to 19.5 million) will be under improved management for biodiversity conservation and an additional 5.3 million hectares (for a total of 23.5 million

hectares) will be under increased protection and sustainable management of forest

ecosystems by the end of 2006.

MANAGEMENT EFFICIENCY AND EFFECTIVENESS

To improve management efficiency and ensure that operating expense and staff

allocations respond to priorities, the LAC Bureau has undertaken Mission Management Assessments in all 16 missions. These assessments have helped the Bureau

streamline management support operations, focus program portfolios, reduce management units, identify efficiencies in procurement, and broaden the functions of its

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regional platforms throughout the region. The LAC Bureau continues to work on

finalizing the regional services platforms for Central and South America. The bureau is defining core staff requirements (technical and management support) for

small-, medium-, and full-sized missions, and redefining the roles of U.S. direct hire

staff, as well as the missions’ program delivery models.

The Program Assessment Rating Tool (PART), a component of the President’s

Management Agenda, focuses on assessing whether goals, indicators, and targets

are in place and used to determine whether a program achieves results. The original

assessment found that while strategic planning and performance evaluation were effective at the level of USAID’s individual operating units (the 16 country programs),

the LAC Bureau could not assess regional level progress due to the lack of regional

performance measures and targets. To facilitate regional performance monitoring,

the LAC Bureau in collaboration with the Office of Management and Budget undertook an extensive effort in 2004 to develop a set of contextual and regional indicators that would provide valuable performance information to managers in the field

and in Washington. The Bureau’s long-term goals are now supported by annual outcome and/or output-related regional performance measures which the Bureau will

use to assess program progress.

OTHER DONORS

Official development assistance across the LAC region by all donors totaled just over $5.2 billion in 2002 (latest available figures compiled by the OECD). Bilateral

donors accounted for about 86 percent of this assistance and multilateral donors the

remaining 14 percent. The largest multilateral donor is the European Commission,

followed by the International Development Association and the Inter-American Development Bank.

The United States has been the largest bilateral donor since 2001, topping Japan,

which was the largest donor for 6 years prior to 2001. United States assistance in

2002 totaled more than $1.2 billion in grant funds, followed by Japan and Spain.

Germany, the Netherlands, and the United Kingdom are also active donors in the

region. According to OECD, nearly 60 percent of the assistance to the LAC region

was geared toward social (health, education, water, housing, employment) infrastructure and services; approximately 14 percent was focused on economic (transportation, energy, and business development) infrastructure and services; and 12 percent on improved economic production (agriculture, industry, trade, and tourism).

Mr. Chairman, this concludes my statement. I welcome any questions that you

and other members of the committee may have. Thank you.

Senator COLEMAN. Thank you very, very much Administrator

Franco. I’m pleased to have with us my colleague from Florida who

brings a personal perspective, a life experience perspective to U.S./

Western Hemisphere relations, and I’m just thrilled to have him as

part of this subcommittee, Senator Martinez.

STATEMENT OF HON. MEL MARTINEZ, U.S. SENATOR FROM

FLORIDA

Senator MARTINEZ. Thank you, thank you, Mr. Chairman, I appreciate that very much, and if I may begin by welcoming good

friends, Secretary Noriega and Administrator Franco, what a pleasure it is to be with you in this setting.

Let me just, as a matter of opening, and before any questions

might come up, I just wanted to say a few things about my view

of the region. First, and foremost, it is obviously a region of the

world that has had such a close and long neighbor relationship

with the United States, and it’s one that we have to continue to

keep a strong presence in, and a more vibrant presence. And I

think if I hear anything consistently from people, in the region

from those that are interested in Latin America, is that our foreign

policy needs to be more focused on the region, so I would hope that

in this President’s term, and as we go to the future, that there will

be continued and renewed revitalization and enthusiastic new perspectives in our very vital relation with the region.

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And, it’s a region while, at the same time, having made a tremendous amount of progress over the last decade, many challenges

remain, and at times we even see new challenges arising, so I for

one, I think I will just say that I’m staunchly committed to the

President’s call for democracy, for freedom, for the President’s call

that I think ought to be heard far and wide, but certainly in the

region that we care so much about.

I believe that looking at Secretary Noriega’s statement, I think

you say it very well that this multifaceted approach, and I think

it is correct that we should face it that way. I am very imbued with

the great progress that President Uribe is making in Colombia, I

think we’re making headway against a very determined group that

are more interested in the trafficking of narcotics than they are in

lofty thoughts of freedom, democracy, or anything else, so I think

the progress he’s making is encouraging, it’s positive, and I think

what we must do is continue to foster that. I want to delve into

that as we go into questions on how it’s going, how we can do better to help President Uribe and the fledgling progress that’s being

made in Colombia, and how do we avoid allowing neighbors to disrupt that progress, how do we find a way that we can deal with

the forces of the region that now seem more disruptive than they

seem helpful?

I’m very concerned about the continuing stridency of the government of Venezuela, not so much toward the United States, because

that will come and go, but as toward some people, and the departure from somewhat democratic beginnings into what is a course

that is far from democratic.

A government cannot call itself democratic if it doesn’t govern

democratically. The first step to democracy is the election, what

really proves out to be a democratic regime is the way it acts toward its own people, the way it behaves toward the standards,

rights that we understand around the world to be freedom of religion, freedom of assembly, freedom of the press, the freedom of

speech, which includes the free press, and then also the freedom

to own property, and the property rights of people, so all of these

things I view, are under challenge in Venezuela in a way that I

think is threatening to the stability of the country.

I am extremely concerned about the tendency of this government

to now wish to arm itself, I’m not sure against whom or for what

purpose, but arms purchases in this region will only be destabilizing, will only trigger an arms race, it will only trigger a missed

opportunity for a better life for its own people, and I think that’s

misguided and wrong.

I also am encouraged by the implementation of the President’s

policy toward a free Cuba. It is too long since the people of Cuba

had the opportunity to see the exciting things that we’ve seen in

the Middle East with elections, that we’ve seen in other parts of

Latin America with elections, and I think that the time for Cuba

to begin to join the family of nations is upon us. But I think the

President’s policies are wise, I think those things that would derail

the success of that policy or I think are misguided and wrong, I

think the President put together a comprehensive approach to

Cuba, a strategic vision for how we bring the country to democracy,

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and it uses several key ingredients as strategies for that, and I

think that one of those, obviously, is information.

I’m always encouraged when I hear the subjugated people of

Eastern Europe, now having an opportunity to be free, how they

do not talk about tourist travel and they do not talk about agricultural sales making a difference in their lives or freeing them from

the subjugation of communism, but they do consistently talk about

Radio Free Europe, and how hearing a message of hope, knowing

that they were not alone in the world, somehow made their prison,

made their imprisonment, made their oppression somehow more

tolerable because they knew they were not alone. That same power

of communication can be achieved with an effective radio and

TVMRT, and I’ve been looking forward to some specifics on that effort. I think also a continuation of our current policies in Cuba will

allow us to continue what we’ve seen as a very effective policy since

May, when it began.

I think, also being from Florida, we have to be very concerned

about Haiti, looking for stability and progress there so the people

of Haiti can have a better life and so that the stability of their government can be enhanced.

But, also on a more positive note, I think we also need to look

forward to the great success that we’ve had with NAFTA, the potential for CAFTA, and I think that other initiatives that would encourage and enhance the possibilities of commerce, of grade, of

agreements that bring hope to people, that bring jobs to the region,

we’re very encouraged in Florida, and very hopeful that the free

trade zone of the Americas will be housed in Miami, which I believe to be the trade and commerce capital of Latin America, so

anyway, we’re very excited and hopeful about that, and look forward to that.

So, with those comments, Mr. Chairman, thank you for allowing

me, and I’ll be happy to get into some questions.

Senator COLEMAN. Thank you, Senator Martinez, it’s a great

pleasure to have you as part of this committee. Let me turn to your

colleague, the senior Senator from Florida has arrived, Senator

Nelson, would you like to say a few words? The witnesses have already given their testimony, before they are questioned, I’d certainly like to give you an opportunity.

Senator NELSON. Are we the two anchors on this committee?

Senator COLEMAN. And fine anchors you are, too, by the way,

Senator.

Senator NELSON. Well, I have visited with Mr. Noriega on

lengthy occasions about many of these subject countries in the jurisdiction, and I assume that you’ve already discussed the matter

of Venezuela, the matter of Haiti, and so forth, but I’ll get into it

in some of my questions.

Senator COLEMAN. Thanks, Senator Nelson. Let me talk a little

bit, we’ll start with Colombia. I think it would be fair to speak for

all of the folks here that the leadership of President Uribe has been

very strong. We’ve seen many positive things coming out of Colombia. Colombia is in the process now of working out details of legislation to demobilize insurgents, Senator Noriega, we had a little

chance in private to talk about this issue, but I’d like to explore

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it further. What’s the role for the United States in this demobilization process?

Mr. NORIEGA. Thank you very much, Mr. Chairman. We believe

that the progress that President Uribe is making through agreements whereby members of the AUC, the self-defense units, are

stacking weapons, demobilizing themselves, taking themselves off

the battlefield is an important part of his strategy and policy and

is a fruit of our commitment. We need to make the most of this,

because it’s taking people out of the conflict. It demonstrates that

his policy of imposing a rule of law and making significant investments in the security side, is producing dramatic results. And so

our role in supporting demobilization is literally helping secure the

peace.

It has to be done in a responsible, careful way. We know, for example, that the AUC, as well as the others, is deeply involved in

drug trafficking. We want to make sure that as people are demobilized by the Colombian Government that there’s an accountability,

and an integrated and responsible policy that actually dismantles

these groups, these blocks of fighters. So I think that it is important that there be a juridical framework for that. President Uribe

and his team have presented to Congress in Colombia, a proposal

on justice and reconciliation and we need to encourage them to

work with their Congress to come up with a credible process that

holds people accountable. In particular, one that never extends an

amnesty to the notorious violators of human rights or undermines

our extradition arrangements.

President Uribe has proposed that sort of draft law. It’s being

considered through good-faith, open negotiations with Members of

the Colombian Congress. As they produce that, and I’m confident

that they will, I think the United States will have more room to

provide sustained substantial support to this demobilization process. Members of Congress of the United States have laid out their

concerns, but I see that as a positive thing, because what they’ve

laid out are certain conditions under which we would make a substantial commitment to support this demobilization effort. President Uribe, I think, sees that as an opportunity to get this right.

If there is a juridical framework, it could potentially mean support,

not only from the United States, but elsewhere in the international

community. So I think we’re going to get there.

In the meantime, we have provided some support to a vetting

and tracking and monitoring system that the Organization of

American States is running. We’ve consulted with Congress and

are able, now, to provide an additional $1.8 million for that process.

Again, this is a process that is essentially a census of the people

that are being demobilized, and tracking them to ensure that they

stay out of the fight. So we can pay for that filter process, and

eventually be able to provide, perhaps, more substantial support to

actually retrain people and reenter them into civilian life.

Senator COLEMAN. Let me go from one of the success stories,

which I believe Colombia to be, to one of the areas of great concern,

Haiti. Funding for Haiti has been transferred to the Office of Transition Initiative, OTI, both Administrator Franco, respond first and

second, Secretary Noriega. Can you explain, kind of a multipart

question, how is this going to help us with United States assistance

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for Haiti, there’s an election that’s scheduled by the end of the

year, I’d like to get a sense for whether you see it coming off,

what’s the role of the OAS, do they have resources, give me a little

overview of what’s happening with Haiti, both in terms of our funding and how you see it being more effective, and then if you can

give me a view of the social and political situation in Haiti, in particular as we look to an election, Administrator Franco?

Mr. FRANCO. I’d be delighted to do so, Mr. Chairman. Let me

just, if I could, add a couple of things on Colombia, so I can give

you a very good, comprehensive answer. We want to get it right on

Colombia, we’ve been engaged in consultations with Congress, we

did notify the Congress last year of our intention to be supportive

of the demobilization process, contingent on consultations which

were ongoing.

I think it’s important since we’re concerned, now, that Plan Colombia is coming to an end, I know you said the ACI this fiscal

year, about our continued role in the future that by getting this

process right, as I think we will in very short order, this will also

be a way to get by in and support from the European Union and

other donors, because this will be an expensive proposition, something that we are consulting with Members of Congress as we do

move toward, I hope in the future, of providing vocational training

and the other, to have international cooperation and financial support forthcoming for this effort, in addition to being the right thing

on the human rights front.

On the situation in Haiti, first on the OTI account and the mechanics of this, there is, what the administrator has proposed is a

Transition Initiatives Account worldwide, for USAID, of which, for

our region, for fragile and failing states. In our region the country

that would be eligible for this, if it is approved by the Congress,

would be Haiti in the amount of $30 million. So this is a proposal

that a portion of the resources that would be made available would

come from a new account called Transition Initiatives. In essence,

what the difference is between Transition Initiatives and the other

support that we give to Haiti, is that it would provide, notwithstanding, authority for the use of these resources.

Why that is important in a failing state, or a fragile state situation as we have in Haiti, is that we have a very changing circumstance happening, we have long-term development plans for

the country, but we also have many short-term needs. Most of the

funds that are appropriated to AID are appropriated to specific accounts, for specific purposes that are good, but tie our hands, so

this is a way to be responsive to the Haitian Government and our

own foreign policy priorities in the country. Obviously, there is a

consultation process with the Congress, but it does not tie the

money to a specific activity and it gives us that additional flexibility.

On the questions of elections, and support for elections, last year

we provided $9.4 million for this effort, and it was largely through

the OAS, we are in the process of the planning and oversight of the

election for later this year that has taken place since last year, registration of voters, the resources we’re requesting this year will be

not only to continue those efforts, but also to promote an education

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ple interested in the process in Haiti in terms of running for office,

political parties in the country, on the media campaign, to explain

to voters their responsibility, civic responsibilities, what the elections entail, and of course, monitors for these elections, which will

be international, United States and domestic, meaning local monitors from Haiti.

So these are the chief activities, there’s also an important component with Minustah, that is the name for the U.N. Stabilization

Mission in Haiti, and the OAS to provide security at the polling

places, and there’s security prior, during, and after voting. So this

is a very comprehensive plan that we have been engaged in, we

work closely with the OAS with our mission, with the international

community.

This is an area, Mr. Chairman, because it will be an expensive

election, this is a society that, in terms of election experiences does

not have the track record of other countries in the region, and has

some major obstacles, namely a population that is not, does not

have the literacy rates and so forth of some of the other Latin

American countries, so we are looking for donor support through

our donor coordination group, particularly from the Canadians and

others, and France, that are engaged very closely in this effort.

Mr. COLEMAN. Senator Noriega, anything you want to add to

that?

Mr. NORIEGA. Yes, Mr. Chairman, I appreciate the opportunity.

We have a long way to go in Haiti. We’ve had a very tough couple

of weeks recently, and the last year, although we see the elements

occasionally coming together and we see some running room ahead

of us in political normalization, getting the economy going, getting

the security situation going. But, we have hit some serious tough

spots.

One was last September when there was political violence inspired by President Aristide’s engagement with the Lavalas settlements in the country, but also a natural disaster, tropical storm

Jeanne, so September was a real blow.

In the last few weeks, some of this has to do with the anniversary of President Aristide’s departure from the country, some of

those people taking advantage, you’ve seen prison break and some

political violence, including the possibility of some abuses by the

police, so this has been a rough spell, too. But I think it’s good that

we’re here being held accountable right now after this tough patch,

because it reminds us that this is going to be a long effort.

The positive news is, I think, that the elections will give people

hope, if they see that it’s a genuine process that’s open. So we have

to provide support to democratic elements of the country. Security

has to be improved so we have to go after those criminal elements

and those who use political violence and put them back in jail. I

should say, that the prison break had as much to do with

narcotrafficking as it did anything else, so they have to be detained

so that it restores a sense of security so that political leaders from

across the political spectrum will get out and compete in the process and participate in a national dialog and go forward.

So, I think we need to recover our stride there. We have an international commitment. There was a donor meeting last July where

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nity. We need to get that money moving more urgently, more effectively, more efficiently, and in a transparent and obvious way so

that people see things improving in their lives. The United States

has done an awfully good job. We initially had this conversation

after Aristide’s departure a year ago, and there was some question

as to whether we would step up to the plate, and we did. The

United States put $200 million toward this in the last year.

But we don’t have to go it alone, other key donors are there. The

United Nations is engaged, the U.N. Security Mission has done a

tremendous job, I must say, under difficult circumstances, but they

have to be encouraged to be even more proactive and to stay engaged and step up as bad guys in the country try to undermine the

progress that they’re making.

So, this is an integrated approach, it’s very tough. The Haitian

people deserve a good government, they’ve always deserved it,

they’ve seldom had it, and the foundation of our policy is to give

them that, to restore some sense of security, so that the economy

can start to revamp. Economic assistance will always have to be a

part of this equation, and we’ll stay in there, and I think the international community will stay committed as well. But I don’t want

to leave you with the impression that it isn’t going to be awfully

tough.

Senator COLEMAN. Thank you. I have some more questions to

ask of you, but we are limited in time, an hour that I will extend

a little bit in deference to my colleagues. Why don’t we do two 5-

minute rounds, first Senator Nelson and then for Senator Martinez

and Nelson.

Senator NELSON. Thank you, Mr. Chairman. Mr. Noriega, you

just talked about economic assistance. Can you explain to this committee why you oppose Senator Mike DeWine’s legislation, known

as the HERO Act that would allow textiles from third parties to

come into Haiti to be turned into manufactured garments that

would then be duty free, and explain your opposition, in light of the

fact that you supported doing the same thing for Africa.

Mr. NORIEGA. Thank you very much, Senator Nelson. The administration hasn’t taken a formal position on the HERO Act, or the

other measures that have been proposed.

Senator NELSON. It would pass in a nanosecond, if the administration said yes.

Mr. NORIEGA. I think the concern that we have is, frankly, the

interests of American industry, particularly in the textile industry

as we are working in good faith with our Congress to get approval

of other trade measures. I’m not an expert in this issue, but it is

my understanding that the area of concern is the ability under the

HERO proposal to use fabric and fiber from outside of the——

Senator NELSON. From third countries.

Mr. NORIEGA. From outside of the hemisphere.

Senator NELSON. That’s correct. Just like it’s being done in Africa; sub-Sahara and Africa.

Mr. NORIEGA. And that in the case of Haiti, this could be meaningful. It is perceived by our textile industry as being a meaningful,

significant problem, and frankly we just had to rely on the judgment of some of our allies up here about what is doable in terms

of that industry. That does not mean, Senator, that we don’t see

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the importance of this kind of commercial arrangement as part of

our long-term strategy in Haiti. During the course of this year,

where we will be doing some very real bargaining with the Congress on trade legislation. There may be some opportunity for

Haiti, but it may not take the form of the HERO proposal. But

there are some other ideas on the table, and I can tell you, Senator,

that I had the opportunity to discuss this at length with Deputy

Secretary Zoellick yesterday. We spent an hour and a half on Haiti

and this is one of the issues that he’s very mindful of, and very

sensitive to, and I think you’ll find that we’ll be prepared to engage

during the course of the year.

In the meantime, right now, before we can talk about meaningful

advances on the commercial side of things, we need to make additional strides on cleaning up the port and the customs procedures

and eventually privatizing the port, so that you can make space for

honest commerce. Right now that is not the case in Haiti, so we

have a way to go on that front, and we’re working on that earnestly

right now. We’re putting about $1.7 million to the customs and——

Senator NELSON. Well, other than cleaning up the port, which is

clearly a step in the right direction, now what other things, if you

want support, the building up of a garment industry in Haiti, for

200 years, Haiti has been a basket case, and it’s the poorest nation

in the Western Hemisphere, and it’s going to continue to spiral

downward unless the other nations of the Western Hemisphere get

serious about it. It happens to affect Senator Martinez and my

State probably more than any other, simply because we’re on the

receiving end, so other than cleaning up the port, what other, since

you don’t support, and I think you have stated the position of the

administration, and now we have it on the record as to why you

don’t support Senator DeWine’s legislation, what other things

would you think and propose?

Mr. NORIEGA. Senator, what I’ve noted, what we do in terms of

improving the security situation, and supporting the rule of law in

Haiti, in the energy area, getting power, reliable sources of energy

is also good for the private sector. USAID has given a terrific emphasis on microenterprise and come public works activities to generate economic activity. Haitians are good workers, and I’m convinced under the right conditions, the private sector will go in

there without additional trade benefits. But we have to get to a certain stability and improve the security situation and transparency

so people can get their product in and out of their country in a reliable way before you’ll see room for a lot of commercial activity.

I don’t want to suggest that anyone give up on the trade side of

this, because, as I noted, it is something that is very much on our

mind, and it is something that we could do at the appropriate time.

But again the intricacy of moving trade legislation up here does

play into this.

Senator COLEMAN. I noted that Administrator Franco wanted to

respond. Please, go ahead.

Mr. FRANCO. Senator, if I could, I shared the concern about invigorating, I don’t want to say reinvigorating, but invigorating for the

first time, commercial activities in Haiti, and especially export potential. Obviously, Florida is the State particularly of interest in

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lished an advisory committee on this issue, and has appointed me

to it. So this has been a discussion with private sector HaitianAmericans, and just as Secretary Noriega has said, I want to underscore that we’re looking at every option and I think he’s made

it very clear, that we’re looking to see what can be done in this

field, but, there’s an important ‘‘but’’ here. HERO, in and of itself,

can’t even if it were approved, is not going to transform the society

until we have proper infrastructure, electrical delivery of service,

it’s important to understand right now, we’ve now taken it for

granted in Port-au-prince, the lights are on.

Senator NELSON. Of course, that’s true for any Third World country, but we did it for Africa.

Mr. FRANCO. Yes, sir, but there is a distinction. Currently, unlike

Africa, and most of the countries in Africa, and I am familiar with

AGOA, and I worked up here, I did work on AGOA, on the Africa

issues, unlike the Africa situation, in the case of Haiti, Port-auprince specifically, United States Government efforts and financing

through USAID is providing electrical power. Now at some point,

we need to transition from this, that there is private power, there

is a functioning country that can actually have the investment climate necessary to fulfill the promise of something like AGOA or

HERO.

Therefore when I’ve met with Haitian-Americans who are going

to be the individuals investing, or the people in Haiti, the first

thing they talk about is what Ambassador Noriega has mentioned,

we’ve got to get security, which we’re working on, under control, we

have to have customs facility that’s actually working and

functionable, we have to see how these resources are collected so

they can be reinvested, we have to have electrical power and grids

that are working, working with the seat of the development agency

to achieve those things, our sense is let’s get the cart and the horse

right to fulfill the promise of any potential for HERO-like situations in Haiti, and we have a way to go in that regard, and we’re

working on them.

Senator COLEMAN. Senator Martinez.

Senator MARTINEZ. I’ll try to be brief in my questions just in the

interest of time, Secretary, are we clear that the platform for the

broadcast Taquiera is in the budget and will be part of this year’s

appropriation that you’re seeking?

Mr. NORIEGA. Yes, Senator, there’s $10 million in the 2006 budget for the Broadcasting Board of Governors from airborne platform.

Senator MARTINEZ. Right.

Mr. NORIEGA. It’s just as important, and we were having a senior

level discussion about this yesterday, it’s just as important that we

continue the broadcasting during the course of the year.

Senator MARTINEZ. Right.

Mr. NORIEGA. Until we get there to where that money kicks in,

that means the Commando Solo continuing and also the blimp.

Senator MARTINEZ. Right, right.

Mr. NORIEGA. That was also used for broadcasting, because we

have degraded the capability of the regime to jam and so we’re producing real results there.

Senator MARTINEZ. The results I hear are very encouraging, in

fact, I’ve heard fairly directly that it is getting through for the first

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time, the TV images are being seen and it’s very encouraging, and

it’s having, I think, the kind of impact that would expect it to have.

I’m very concerned, as I mentioned in my statement about Venezuela and the situation there, how will we monitor the arms purchases and those types of activities that I think are so threatening

to the stability of the region?

Mr. NORIEGA. Senator, you put your finger right on the problem.

It is not a question of new arms going in, it’s the question of transparency and what it does to the arms balance. Within the interAmerican system there is an awful lot of work on transparency in

arms acquisition and a lot of confidence-building measures to ensure that we don’t have an arms race set off.

MIGs are one thing, sophisticated aircraft. It’s going to take

many, many years before the Venezuelans can get them in the air

and keep them in the air. The small arms are, on the other hand,

another sort of problem. First, we’re worried about apparent corruption in the acquisition of these arms, where additional resources

of the state are being diverted to support certain illicit activities.

We’re worried about the arms that are displaced by this type of

purchase, tens of thousands of rifles potentially ending up, not necessarily in the United States, but in jungles, and for that matter,

on the mean streets of some countries in the Western Hemisphere;

or in the hands of guerillas, like the FARC and the ELN; in the

hands of radical groups with which the Venezuelan Government

maintains a certain intimate contact, and; in the hands of other

criminal elements in the big cities of South America. So that’s why

we’ve asked our neighbors to step up and ask Chavez about these

things.

Senator MARTINEZ. But these neighbors are the ones making

some of the sales. Brazil is engaging sales, how do we talk to President Lula who, as a responsible leader, must share our concerns,

is that at all fruitful?

Mr. NORIEGA. Absolutely, I think that they want to be responsible. The sales of the Super Tucanos from Brazil to Venezuela,

again, is relatively small and that is not of as much concern to us,

and it’s going to take years before they get there. We do communicate with our neighbors in the region and elsewhere, actually, in

Europe about the need to look at the balance, at transparency in

these transactions so that it doesn’t set off an arms race.

Colombia had a run-in with Venezuela recently because something became public that we’ve known privately for a long time; the

fact that the FARC and other bad guys maintain a presence, and

are given, essentially, hospitality of the Venezuelan Government.

Our message is that Colombia should not stand alone. They certainly don’t in as much as we’re with them, but their other Latin

neighbors need to step up, too. I’m not saying isolate Chavez, but

we’re saying go and ask questions about what his intentions are in

terms of supporting these illicit terrorists and criminal groups.

Senator NELSON. Mr. Franco, just briefly in the remaining moments that I have, you mentioned the goals for the region, human

rights, property, prosperity, and security and all of the other

issues, do you feel that the resources you have are sufficient for

you to tackle the agenda that we have with this very vast region,

and such a close neighbor?

108

Mr. FRANCO. Well, Senator Martinez, in a sense the short answer

is resources, whether in our region or any place in the world, for

the monumental tasks that we outlined, and that have been outlined here by the chairman as well, are in a sense, there’s never

enough, I think the same goes for domestic programs or any international program. I think the chairman noted, adequately, that

there are other places in the world that are, right now, critical for

the President and the administration, and that have become the

priority foreign policy concerns, and we’ve got to look at things on

a global standpoint.

I highlighted some of the good things coming from our region. We

have largely democratic governments in our region, fragile, we’re

supporting them, we can work with them, many of the things we

can do because we have friendly governments, we can do without

the types of resources that are sometimes necessary in a country

like Sudan, the Darfur or other places. So I think the levels are

adequate to address the needs of the region. We can always use

more in any place in the world, I think we can use more in Africa,

I know we can use more in Asia. I know I’ve heard that from my

colleagues, but I think the President’s request is the right request,

and I think we can address the summit goals and the other goals

we have for the region.

Senator MARTINEZ. Good answer, not enough, but that’s fine.

Thank you very much.

Senator COLEMAN. I know we’ve got to keep this hearing to an

hour; I’d like to extend it with the indulgence of the witnesses. I’m

going to yield my time, I have a lot of other questions, the FARC

involvement recently, the kidnaping and murder of a former President of Paraguay, and I want to talk about Guatemala, but I’ll

keep the record open until the end of this working week, until the

end of Friday, but with that I’ll yield my time and turn to Senator

Nelson.

Senator NELSON. I’ll just make a couple of comments in passing

in the interest of brevity.

Mr. Franco, you indicated in your last response with regard to

Haiti that you felt like that we had to get the security situation

in order before you can get the economic situation in order, and if

we do that we’ll never get the economic situation in order, and I

would respectfully suggest that what you have to do is you have

to work on both at the same time. And it is not, in my judgment,

an appropriate excuse to say that we are not going to consider

something like the HERO Act until we can get the security situation under control. If there were something other than the HERO

Act, but I’ll tell you, I’ve been there with Senator DeWine, we see

the industriousness of those people, we see the order in the midst

of chaos in those slums such as Cite Soleil, and we have seen the

success of those people in their manufacturing in the past. And you

give them a little incentive and at the and of the day what we want

and what’s in our interest in this Senator’s judgment, is to have

Haiti politically stable and economically stable. And as long as

they’re at the bottom of the economic barrel, that then upsets the

political stability. So I think you have to work both at the same

time, and I’m sure that’s what you meant but not what you said.

109

Senator COLEMAN. I’m going to leave that as a statement. Senator Murkowski I know is waiting for the next question.

Mr. FRANCO. Could I just respond, Mr. Chairman. First of all, we

are doing both and we are doing a great deal on mango exports,

on Haitian Blue, some products that are ongoing. I didn’t suggest,

Senator that there has to be a panacea, that it has to be perfect,

and certainly that’s not the standard to which we are holding, but

we are, and we need to create the climate, both security and I mentioned infrastructure, customs, we need to make those, I think, initial investments ensuring that the climate, when there is an opportunity to attract investment is such that there is some predictable

security situation on the ground, which I think is improving, but

we are doing both.

Senator COLEMAN. Thank you, this hearing is adjourned.

[Recess from 2:10 p.m. to 2:13 p.m.]

STATEMENT OF HON. LISA MURKOWSKI, U.S. SENATOR FROM

ALASKA

Senator MURKOWSKI. Good afternoon, we are here to hear testimony from Mr. Revere and Mr. Kunder regarding the President’s

fiscal year 2006 budget requests for East Asia and the Pacific. I’d

like to thank the panel for accepting the invitation to be with us

this afternoon.

We have just until 3 o’clock to examine the budget request and

its impact before the next budget subcommittee panel is scheduled,

so I do want to get right into this, we’ve got a lot of ground to

cover, literally, from Japan and the Korean Peninsula in the north,

to Australia and New Zealand in the South Pacific, so this subcommittee has a very broad area under its jurisdiction. It’s also a

region that has seen its importance to the United States grow tremendously in the past century, both from an economic and national

security perspective. It’s not uncommon to hear Alaskans comment

that we are geographically closer to our friends in Japan and Korea

than we are to Washington, DC, so it tends to give us a different

perspective on the region than someone from the mid-west or the

east coast may have.

And whether it’s the constant reminder that North Korea might

have the ability to reach out and touch us, so to speak, or the longstanding trade relationships that we have with our Pacific partners, there are common factors that bind us together. We share a

dependence on the ocean for transportation and economic livelihood, and in some cases, subsistence purposes.

When the December tsunamis struck parts of Indonesia and

Thailand, along with other nations in South Asia and Africa, Alaskans recalled the 1964 Good Friday earthquake that caused tremendous damage throughout my State and created a tsunami that

wiped out the town of Valdez. It was a result of that earthquake

that Alaska became home to the Tsunami Alert Center for the west

coast. Almost immediately, Alaskans asked whether a similar center could have reduced the massive loss of life in Indonesia, Thailand, and the other affected nations.

We heard from USAID Administrator Natsios at a full committee

hearing not too long ago that the warning system is more than just

about ringing an alarm, but also about educating the people, so

110

they know what the alarm means and what to do when it sounds.

And I look forward to working with the administration in this education effort.

Trade continues to play an important role in the region. Last

year, Congress passed the Singapore and Australian Free Trade

Agreements. The administration is in the process of negotiating a

trade agreement with Thailand. The implementation of these trade

agreements will help American companies expand into additional

markets, and our bilateral relationships are stronger as a result.

Additionally, these agreements also signal the intent of the United

States to remain a strong player in the Asian market. In recent

years, we’ve seen China expand its sphere of economic influence, as

it’s beginning to negotiate trade agreements with the ASEAN nations and has surpassed the United States as Japan and South Korea’s largest trading partner.

And while it should not be our goal to keep China out of the market or stunt its growth, neither should we be willing to concede the

market. The United States must remain active in this part of the

world in order to keep our companies at the forefront of the global

marketplace.

National security issues must also remain a top priority. The

budget contains funding for a number of bilateral programs to help

combat the spread of terrorism and develop local economies to reduce the appeal of terrorist organizations.

While perhaps more suited for a discussion by the Armed Services Committee, North Korea’s nuclear and missile programs are

cause for concern, as is the European Union’s potential lifting of

their ban on the sale of arms to China. Whatever else the President’s budget seeks to achieve in East Asia and the Pacific, the

overarching concern must be to preserve stability in the region and

promote the security of the United States and our allies.

So I look forward to the testimony by Mr. Revere and Mr.

Kunder on how the administration’s budget priorities seeks this result. And with that, Mr. Revere, if you would like to begin, please.

STATEMENT OF EVANS REVERE, ACTING ASSISTANT SECRETARY, BUREAU OF EAST ASIA AND PACIFIC AFFAIRS, DEPARTMENT OF STATE, WASHINGTON, DC

Mr. REVERE. Thank you very, very much Madame Chairman. I

want to thank you right at the outset for providing me with an opportunity to be here today to speak to precisely the issues that you

have addressed so eloquently in your own statement.

I’m here, of course, to spell out the strategic goals underlying our

foreign affairs budget for East Asia and the Pacific region for fiscal

year 2006. Let me just note at the outset that I have prepared a

more formal statement, which I provided to your staff, possibly sufficient for the record, but if I may, let me just address very briefly,

some of the issues that you have anticipated in your own opening

remarks.

Indeed the East Asian/Pacific region is in the midst of a period

of very dynamic change, and it is a situation, mind you, that presents the United States with both tremendous challenges, but also

tremendous opportunities. Although the circumstances vary, in my

view, from country to country, I think looking at the East Asia/PaVerDate 11-MAY-2000 13:57 Oct 05, 2005 Jkt 000000 PO 00000 Frm 00114 Fmt 6633 Sfmt 6602 963433.SEN SFORELA1 PsN: SFORELA1
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cific region as a whole, I think we can, indeed, discern a number

of very favorable trends. Perhaps the most important and encouraging of these has been the regionwide strengthening of democracy

that we have seen.

In the past year we have had successful elections in Japan,

South Korea, Taiwan, Mongolia, the Philippines, Malaysia, Australia, Indonesia, Thailand, and Hong Kong. The progress in Indonesia, in particular, is quite noteworthy. That country is now the

third largest democracy, and the largest Muslim democracy in the

world, and in Thailand the February 6 election marked the first

time that a democratically elected leader has served a full 4-year

term there.

At the same time, throughout the region, as you’ve noted, prosperity is growing, fueled by China’s rapid development, the resumption of growth in Japan and also broad recovery from the financial crisis of the late nineties throughout the ASEAN region.

Regional economies are moving toward much greater economic

openness, lower trade barriers, and regional cooperation, these are

all good and healthy trends. Income levels in the region have

climbed as extreme poverty levels have declined.

But also East Asia is an area largely at peace. Despite incidents

in Indonesia, the Philippines, and Thailand, there has been widespread rejection of militant Islam, and of the terrorism it has

spawned elsewhere in the world. And we are also, in the region,

witnessing expanding cooperation, expanding regional cooperation,

especially in terms of the willingness to work together on global

issues.

Working bilaterally and through regional organizations, East

Asian countries are beginning to seek ways to eliminate human

misery through programs to combat human trafficking, narcotics

trafficking, international crime, environmental degradation, and

the spread of infectious diseases.

In our view, we attribute these favorable trends in great part to

the leadership and to the assistance the United States has provided over the years. The region would probably not be enjoying

this upturn were it not for the fact that it is experiencing a period

of regional stability, during which it has been able to build political, social, and economic institutions. And for this reason, we have

placed maintenance of regional stability at the top of our list of

strategic goals for fiscal year 2006. Much of what we do in the region is directed precisely at the subjective, though different resource tools are, of course, required in different parts of the region.

In Southeast Asia, combating terrorism remains the principle

means to work toward the goal of regional stability. In Northeast

Asia we will continue, and we are continuing, to focus on the elimination of the threat posed by North Korea’s nuclear programs, and

on our efforts to ensure the positive integration of China into global

and regional regimes and institutions. And regionwide, we plan to

be increasingly active in promoting sustained economic growth and

development. We will seek to maintain the region’s dynamic growth

rates through expanded trade and investment, through significant

financial and corporate restructuring and improved economic and

political governance, as well as including an end to endemic corruption.

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We aim to accomplish these goals through bilateral assistance,

free trade agreements, and multilateral trade and investment and

ruralization, as well as facilitation programs for multilateral trade

and investment liberalization in APEC and ASEAN.

Bilateral and multilateral cooperation to counter the proliferation

of weapons of mass destruction, to foster democracy and human

rights, and to address international crime and transnational issues

are strategic objectives on their own, but clearly our success in pursuing these objectives will affect our overall success in maintaining

regional stability.

We will bolster our relationships with key partners in the region,

especially with our five NATO treaty allies, and we will build an

open and inclusive regional institutional architecture. We will work

to ensure that the region’s major institutions including APEC and

the ASEAN regional forum continue to advance the mutually reinforcing goals of economic prosperity and regional security. And we

are also strengthening our ties to ASEAN to build mutually beneficial cooperation.

An additional goal addresses social and environmental issues,

particularly health issues such as HIV/AIDS. And, of course, strong

public diplomacy can leverage all of these efforts. And recently, as

you pointed out, we experienced a dramatic refocusing of America

and the world’s attention on the region, as a result of the tsunami

disaster of December 26 of last year.

We cannot yet predict the impact that our humanitarian response will have on our relations in the region, but our response

was massive, and the impact will certainly be great. As one senior

Asian leader told us just last week, ‘‘You have created a reservoir

of goodwill throughout the region because of the assistance that

you have provided.’’ As the affected countries move further down

the path toward this very complex and difficult reconstruction

phase that they are in, the United States will work closely with

them and the international community to coordinate long-term assistance, and of course, none of the official U.S. response would

have been possible without the support of Congress.

We look forward to working with you to ensure that further

funds appropriated by Congress in support of the President’s request for supplemental tsunami assistance continue to be spent in

ways that reflect credit on our government and our citizens.

And, in closing, let me just emphasize that we are, as you all

know, an Asian Pacific nation ourselves, and we intend to stay vigorously engaged in the affairs of the region and we look at the period of favorable trends in the region that I’ve described as a tremendous opportunity to extend our political, economic, and social

relations, and we intend to take best advantage of these opportunities, as always, with your support and in cooperation and in consultation with the Congress. Thank you very much.

[The prepared statement of Mr. Revere follows:]

PREPARED STATEMENT OF EVANS REVERE, ACTING ASSISTANT SECRETARY, BUREAU

OF EAST ASIAN AND PACIFIC AFFAIRS, DEPARTMENT OF STATE, WASHINGTON, DC

Mr. Chairman, I am pleased to outline for the committee the strategic goals underlying our foreign affairs budget for the East Asia and Pacific region for fiscal

year 2006.

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OVERVIEW: U.S. INTERESTS

The region is experiencing a period of growth marked by several trends favorable

to our interests. Democracy is on the rise, more and more people are benefiting from

economic prosperity, and the region is generally at peace. Governments throughout

the region are beginning to work multilaterally to address transnational problems,

as well. We attribute these and other favorable trends in part to the leadership and

the assistance the United States has provided over the years.

It is doubtful that East Asia and the Pacific would be enjoying this upturn were

it not for the fact that it is experiencing a period of regional stability upon which

to build political, social, and economic ties. For this reason, the Bureau of East

Asian and Pacific Affairs (EAP) has placed maintenance of regional stability at the

top of its list of strategic goals for fiscal year 2006, complemented by our commitment to enhancing regional prosperity and liberty. Different resources are required

to achieve these objectives in different parts of the region. In Southeast Asia, combating terrorism remains an essential requirement in maintaining regional stability.

Our efforts returned some encouraging results in 2004 that we will want to build

on. In Northeast Asia, we will continue to focus on the transformation of the Korean

Peninsula and on the positive integration of China into global and regional regimes

and institutions. Regionwide, we will promote sustained economic growth and development, bolster our relationships with key partners in the region and especially

with our five major allies, and build an open and inclusive regional institutional architecture. Bilateral and multilateral cooperation to counter the proliferation of

weapons of mass destruction, foster democracy and human rights, and attack international crime and trafficking in drugs and persons are strategic objectives on their

own, but clearly our success in pursuing these objectives will affect our overall success in maintaining regional stability. An additional goal in fiscal year 2006 addresses social and environment issues, particularly health concerns such as HIV/

AIDS. Strong public diplomacy can leverage all of these efforts.

Regional Stability: In an unstable region, U.S. goals become more difficult to

achieve. Success in countering terrorism, enhancing economic prosperity, eliminating weapons of mass destruction, promoting democracy, and addressing

transnational issues strengthens regional stability. The fight against terrorism is essential for the stability of Southeast Asia, and we require adequate funds to wage

this war. We also recognize the need to address corruption, good governance and

transparency in Southeast Asia, and in fiscal year 2006 we intend to add more assistance focus on these issues in key Southeast Asian countries. In Northeast Asia,

we will continue to focus on the transformation of the Korean Peninsula and on the

integration of China. We will continue to do all we can to keep peace and ensure

stability in the Taiwan Strait. While foreign assistance funds factor less in our

Northeast Asia objectives, it is essential that we have adequate diplomatic presence,

public diplomacy funding, and other resources to permit us to pursue active, successful diplomatic strategies.

Our alliances with five key regional states—Australia, Japan, South Korea, Thailand, and the Philippines—leverages our ability to maintain regional stability, stay

forward-deployed, and plan and execute force deployment adjustments. We will continue to strengthen these alliances. In the Philippines, we want to sustain and enhance the ongoing process of building the operational capabilities of the Armed

Forces of the Philippines (AFP). With a 5-year plan for support and repair of operational platforms coming to an end, we will shift our attention to professionalizing

and modernizing AFP through the Philippine Defense Reform (PDR) plan. We believe the results of the PDR will be enhanced now that the Philippine Government

is controlling its own funding to the plan.

Following the devastating Indian Ocean Tsunami, the Thai Government generously allowed United States military forces to use Utapao Air Base as a regional

hub for our humanitarian relief efforts. This successful operation was a direct result

of decades of joint exercises, training, and cooperation between Thailand and the

United States, and underscores the importance of FMF and IMET assistance to our

friends and allies throughout the region.

Counterterrorism: Terrorism in the Asia-Pacific region remains a serious threat to

United States national security interests, including the welfare and security of our

citizens in the region and the security of our regional friends and allies. It threatens

the positive regional trends toward stability, democratization, and prosperity. We

strongly support funding to train and equip counterterrorism units in Indonesia and

the Philippines, to provide CT training for Malaysia, the Philippines, Singapore, and

Thailand, and to support regional CT training, including at the new Southeast Asia

Regional Center for Counter-terrorism in Malaysia. Additionally, EAP has requested

modest amounts for CT assistance to Cambodia and the Pacific islands. To deter the

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movement of terrorists and their goods, EAP supports new border control installations in Thailand and Indonesia, sustained border control progress in the Philippines and Cambodia, and improved export/transshipment control systems in Indonesia, Thailand, Singapore, Taiwan, Malaysia, and Vietnam.

In fiscal year 2004, the bulk of our CT effort was still directed at terrorism Tier

1 countries. But in fiscal year 2006, we can anticipate funding needs for CT operations elsewhere in the region. One of these is maritime security in Southeast Asia,

particularly in the Strait of Malacca, through which 30 percent of total shipping and

50 percent of oil and gas shipments pass. We have exercised strong leadership in

shaping conceptual, legal, and diplomatic improvements. We will seek to build

greater regional capabilities and new forms of cooperation to address the vulnerability of maritime shipping in Southeast Asia, where an attack on the Malacca

Strait or other key sea lanes could have an enormous impact on the regional, and

indeed, the global economy.

In fiscal year 2006, EAP will expand CT-related programs on economic growth

and development, democratization, and such transnational issues as money laundering, counternarcotics, passport fraud, and maritime crime. We will remain committed to addressing the financial, economic, and political conditions in the region

that either foster terrorism or allow its practitioners to establish themselves within

vulnerable populations. Several of our Indonesia and Philippine programs, especially

those in Mindanao, have been highly successful and could serve as models for similar programs in the region.

Economic Prosperity: We will seek to maintain the region’s dynamic growth rates

through expanded trade and investment, significant financial and corporate restructuring, and improved economic and political governance, including an end to endemic corruption. We aim to accomplish these goals through bilateral assistance,

free trade agreements (FTAs), and multilateral trade and investment liberalization

and facilitation programs in APEC and ASEAN.

The Millennium Challenge Account (MCA) funding, which channels assistance to

nations that govern justly, invest in their people, and encourage economic freedom

can be used in several countries in the region to achieve these goals. Mongolia and

Vanuatu are eligible for fiscal years 2004 and 2005 MCA funding. By fiscal year

2006, we are hopeful several additional countries in the region will be eligible for

MCA funding.

On trade and investment, we are working with countries in the region to advance

the World Trade Organization (WTO) Doha Development Agenda. We are pressing

China and Taiwan and Cambodia to fully implement their WTO obligations, and

support Vietnam’s accession to the WTO. We are working to increase regulatory and

administrative transparency in the region, especially China, Indonesia, and Korea,

and also in Japan, as it undertakes major privatization and pension reform programs. We will continue our work to reduce or eliminate tariff and nontariff barriers

throughout the region, such as high agriculture tariffs in Korea and Japan, semiconductor taxes and discriminatory product standards in China, and price and tariff

barriers on rice in Taiwan. We continue negotiations on a Free Trade Agreement

with Thailand. We will support economic reform in areas like intellectual property

rights, ranked by U.S. business as one of the greatest impediments to doing business in the region, biotechnology and competition policy bilaterally and through organizations such as APEC.

To accomplish these objectives, we are working to increase opportunities for economic dialog with the countries of the region both bilaterally and multilaterally.

Weapons of Mass Destruction: We remain deeply concerned about the proliferation

of nuclear, chemical, and biological weapons and their delivery systems. We have

held discussions with China to persuade it to adhere fully to bilateral and multilateral nonproliferation agreements and to cooperate fully in prelicensing and postshipment verification checks related to U.S. dual-use exports. We also have sought

China’s cooperation in encouraging other countries to adhere to arms control and

nonproliferation arrangements, and China has responded positively, in particular by

playing a valuable role in hosting the six-party talks to address the North Korean

nuclear issue. In those talks, we will continue to insist on the complete, verifiable,

and irreversible dismantlement of North Korea’s nuclear program. In fiscal year

2006 we will continue our effort to prevent, contain, and reverse the possibility that

any WMD might become available to rogue nations or nonstate terrorist organizations, building on the success of the Proliferation Security Initiative (PSI).

Democracy and Human Rights: Promoting democracy and human rights remain

high priorities on the President’s agenda, and are mutually reinforcing alongside our

other goals of political stability and economic prosperity. The relative stability of the

East Asia and Pacific region has provided for important advances in democracy in

places as diverse as Taiwan, South Korea, the Philippines, Mongolia, and Thailand.

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Indonesia is continuing its transformation into a democratic state but will continue to need assistance from us and other donors, including better educational opportunities, a government with greater respect for human rights, and good governance. A prosperous, democratic Indonesia will in turn be a stronger partner for the

United States, as we advance our regional strategic, economic, and counterterrorist

goals.

We will continue to work for more democratic governments and open societies,

through individual country programs and regionally through the ASEAN Fund and

other EAP regional funds. In Burma, the further consolidation of power by

hardliners last October dealt a setback to international efforts to affect genuine national reconciliation and the establishment of democracy. We will support programs

to promote democracy and provide humanitarian assistance to Burmese migrants in

the Thai-Burma border region. In Cambodia, our efforts will focus on political party

development and human rights monitoring. Programs that enhance transparency

and good governance while combating corruption are key objectives.

The issue of human rights is an integral part of the United States approach to

North Korea. United States officials work to raise awareness of the severity of

North Korea’s human rights abuses and humanitarian issues with the international

community. In addition, when possible, United States officials raise these concerns

directly with the North Korean regime. We are working to implement the North Korean Human Rights Act of 2004, which was enacted by Congress in response to serious concerns over North Korea’s human rights record and the ongoing humanitarian

crisis faced by the North Korean people. We will also continue to press other nations

such as China and Vietnam for improvements in human rights and rule of law.

International Crime and Transnational Issues: Transnational issues, including

terrorism, narcotics, human trafficking, piracy, transnational crime, and infectious

diseases are a serious threat to regional stability. In fiscal year 2006, EAP will address some of these issues through our ASEAN Fund, Developing Asian Institutions

Fund, and Regional Fund requests. We support funding of humanitarian demining

in Cambodia, Vietnam, and Laos. We also support funding for trade-related environmental capacity building, wetlands restoration, transboundary water management,

and access to clean water.

Social and Environmental Issues: As noted above, the East Asia and Pacific region

faces growing environmental and health challenges. The rapid growth of major cities

has brought on problems in air and water quality, deforestation, and waste management. These are frequently cross-border problems, making a common regional strategy important. Our fiscal year 2006 foreign assistance programs will support continued development of a regional approach toward sustainable management of both cities and natural resources and address the growing danger that unsustainable practices will exhaust forests, fisheries, and coral reefs. Requested funding will also support work under the President’s Initiative against Illegal Logging, which specifically

cites problems in Southeast Asia. In the Pacific Island countries, fisheries, climate

change, and oceanic research are all high priority U.S. interests.

The impact of health issues on the stability and prosperity of East Asia is becoming increasingly clear. Of the 42 million people living with HIV/AIDS worldwide, an

estimated 7.4 million are in Asia and the Pacific—more than in any region outside

of sub-Saharan Africa. One example of our efforts to help stem the growing AIDS

epidemic in Asia was the President’s designation of Vietnam as the 15th focus country in his emergency plan for AIDS relief.

Public Diplomacy and Public Affairs: The Global War on Terrorism has demonstrated the importance of foreign publics’ perceptions of our foreign assistance

programs generally, and more specifically, U.S. efforts to counter terrorism. Public

diplomacy is a critical factor in influencing these perceptions, both in the long and

short terms. Fully 85–90 percent of the world’s Muslims live outside the Middle

East; most of these people are heirs to cultural traditions and values that in vital

ways are distinct from cultures found in the Arab world. In fact, Indonesia is the

country with the largest Muslim population in the world. The recent tsunami tragedy has shown the goodwill that can be generated when foreign publics understand

the good work Americans do for fellow human beings, regardless of race, religion,

or ethnicity. ‘‘American Corner’’ public diplomacy outreach platforms in Korea, as

well as a creative online presence, have helped stem chronic anti-American sentiment there. Over 50 similar platforms throughout the region can provide long-term

traction in helping both Muslims and non-Muslims to view our policies with objectivity.

‘‘Regionalizing’’ Assistance Programs: The Asia-Pacific region is experiencing a

dramatic increase in multilateral cooperation and institution-building to address

economic, security, and transnational issues. This trend presents the United States

with new opportunities to foster cooperation to address the major challenges that

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face the region. It also challenges the United States to stay firmly entrenched in

the region’s developing architecture despite the recent growth of Asia-only groups.

EAP has already taken important steps to enhance its engagement with ASEAN

through the Secretary’s ASEAN Cooperation Plan (ACP). In addition to promoting

cooperation on issues as diverse as HIV/AIDS and competition policy, ACP projects

have generated extensive goodwill in Southeast Asia and helped to counter regional

misperceptions that counterterrorism is the sole United States policy imperative in

the region. ACP projects support American interests, as well as ASEAN’s, in areas

like improved governance, protection of Intellectual Property Rights, and transparent regional integration.

We have a strategic interest in strengthening Asia Pacific regional institutions

where the United States is an active participant. It is difficult, however, to support

this strategic interest from a strictly bilateral funding portfolio. In an effort to address this problem, we are seeking to begin funding programs associated with EAP

regional organizations such as APEC and ARF from a single new ESF budget line

item, the Developing Asian Institutions Fund. The United States has successfully

worked through APEC and ARF to advance U.S strategic goals for trade and investment liberalization and facilitation, regional security, and counterterrorism. The recent strengthening and expanding mandates of these organizations make them increasingly effective venues for achieving progress on U.S. priorities.

Tsunami Recovery: We experienced a dramatic refocusing of American attention

on the region as a result of the tsunami disaster of December 26, 2005. The outpouring of goods, services, and funding, our government and our private citizens

provided to those in need, was huge. We can look back on this as one of the proudest

moments of our history. It reinforced a message to the peoples of Asia of American

willingness to help those in need, generously and unhesitatingly. A transition is now

taking place, as the affected countries move out of the emergency relief phase and

enter the much longer, and more difficult, reconstruction phase. The United States

will work closely with the countries concerned and the international community to

coordinate the long-term assistance that will be needed. As our friends in Asia will

see, we plan to see this effort through to its completion.

We cannot yet predict the exact impact our humanitarian response will have on

our relations with the affected countries and their neighbors, but our response was

massive, and the impact will likely be great. This one event will likely alter the

views of millions of people in the region about U.S. intentions, our capabilities, and

indeed the very nature of our culture.

Of course, none of the U.S. official response would have been possible without the

visible support given to our relief efforts by Congress. We look forward to working

with you to ensure that further funds appropriated by the Congress, in support of

the President’s request for supplemental assistance for our tsunami efforts, continue

to be spent in ways that reflect credit on our government and our citizens.

In Conclusion: Promoting regional stability, and all of the elements that contribute to it, requires a steady, consistent focus on achieving each of our fiscal year

2006 objectives and the funding that allows us to maintain that focus. In every case,

whether countering the terrorist threat in the region, promoting prosperity, combating the proliferation of WMDs, supporting democracy, or addressing

transnational crime, the effective use of resources is the key to success. EAP looks

forward to working with Congress to ensure adequate funding and effective utilization of these funds to promote a more stable, prosperous, and democratic Asia-Pacific region.

Senator MURKOWSKI. Thank you, Mr. Revere, for that report.

And now, Mr. Kunder if you would like to make your presentation

and then I’ll ask my questions.

STATEMENT OF HON. JAMES R. KUNDER, ASSISTANT ADMINISTRATOR FOR ASIA AND THE NEAR EAST, U.S. AGENCY FOR

INTERNATIONAL DEVELOPMENT, WASHINGTON, DC

Mr. KUNDER. Thank you. Because of the shortness in time, and

we’ve provided the numbers to the committee, I’ll just try to hit a

few of the highlights.

The Bureau I manage, the Asian/Near East Bureau of USAID,

runs from the Philippines and Mongolia, all the way to Morocco,

and reviewing the numbers for this hearing, the one data point

that struck me the most was that across the Asia region, there are

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324 million people between the age of 15 and 24, many of those in

East Asia, a number exceeding the population of the United States

of America. So I agree with what Evan said, the timing is the time

of great opportunity but also a time of great concern that we make

sure that those 324 million young people have the jobs, the economic opportunity, and the education to be productive members of

free societies, free markets, and democracies.

We have focused our efforts in the fiscal 2006 budget request in

four broad areas across the region. We operate 10 USAID missions

in the East Asia region of our portfolio, and the four priorities for

those 10 missions are, number one, education, transformational

education, going from rote learning to a more open education system that will prepare people for the workforce and prepare people

to be citizens of vibrant democracies. Number two is economic opportunities, with all those young people coming into the workforce,

we’ve got to make sure we’ve got the 21st century jobs that will encourage them to buy into their futures and not become recruits for

terrorism or instability. The third area is broadly, democracy and

governance. We know we have problems across the region in lack

of participation, including lack of participation by women in political processes, corruption across the region, trafficking in persons

and lack of participation, so we’re broadly focusing in the democracy and governance arena, and the fourth area is, since we are operating in a disaster-prone part of the world, is preparation for,

and response to, natural disasters. We believe the U.S. government

response to the tsunami was a credit to all the civilian, military,

government and nongovernmental individuals who participated in

that response. In order to deliver approximately $342 million of assistance that

we’re asking for in fiscal 2006, we’ve also tried to create some 21st

century management structures and approaches that make sense

in East Asia. We have created a regional hub, what we call the Regional Development Mission for Asia in Bangkok, so we can operate

not only in those countries where we have a full USAID presence,

but in those nonpresence countries where there are opportunities

to promote democracy and free markets.

We’ve also invested a lot of money in what we call Pre-Market

Enterprise Initiative at AID to try to get private sector firms that

are investing in East Asia to be part of the development solution.

Thus far, we’ve invested about $42 million of taxpayers’ funds, and

through that, leveraged more than $240 million of private enterprise funds, and these are American corporations who are willing

to invest in early childhood development or education or health

care for their workers. It’s an enormous asset that can supplement

the taxpayers dollars in having a positive outcome in East Asia.

And the third item we’re trying to do is work better with our

U.S. military colleagues across the region. We’ve had an enormously positive partnership in the wake of the tsunami which is

still going on in terms of the transition from relief to reconstruction

in Indonesia and the other affected countries, and we’re continuing

to work on building that partnership so that all parts of the U.S.

Government are working together to meet our strategic objectives

in East Asia. So far we think we can demonstrate a success across

the region in areas like the reintegration of the former rebels in

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Mindanao, where we’ve already demobilized and reintegrated into

the economy more than 24,000 former fighters. We think the development programs that we’re doing can have enormous strategic

benefit, as you suggested both in providing security and stability

in the region and enhancing the security of the United States.

I have to make one pitch, if I can, for operating expenses. I just

came back from Iraq a week ago, in places like Iraq, like Afghanistan, like Mindanao, we’re putting boots on the ground, as the military likes to say, in the front lines in the war on terrorism. In the

Vietnam era, USAID had about 10,000 people working for it. We’re

down to about 2,200 officers worldwide; one of my military colleagues just referred to this as about a reinforced battalion worldwide. We’ve learned to operate efficiently using private sector partners, NGO’s, leveraging private sector funds, but at some point

there’s sort of an irreducible minimum where we need a certain

number of officers on the ground to do the broad range of programs

that we need to do, and so we’ve asked for a slight increase in our

operating expenses, and in my view that would be money well

spent.

Thank you very much.

Senator MURKOWSKI. Thank you, Mr. Kunder.

I’m trying to get a handle on the demographics here, your 324

million that are between the ages of 15 and 24, am I to assume

that the fastest growing segment of the population is within this

age group? Is this a bubble that we’ve got coming up or is this just

what we’re dealing with?

Mr. KUNDER. I use that number because those are the folks who

are either going to be entering the workforce, or potential recruits

for terror organizations or instability. It’s not necessarily a demographic bubble going through the system.

Senator MURKOWSKI. It’s just a lot of people that we are talking

about.

Mr. KUNDER. A lot of people between age 15 and 24; yes ma’am.

Senator MURKOWSKI. And your challenge as you point out with

providing the education for the numbers, the population that we’re

talking about and even further so, providing that level of economic

opportunity, jobs in a region, many of these regions where it’s difficult to really get any kind of major programs moving forward.

Mr. KUNDER. These are the folks that will be making like decisions in the next couple of years whether they’re going to buy into

their country’s democracies and job opportunities or whether

they’re going to be alienated and disaffected and potential recruits.

Our analysis is there’s not a direct causal relationship between

poverty and recruitment, the people who bombed the World Trade

Center were from middle-class backgrounds, it’s not a direct causal

relationship, but certainly folks who do not have a stake in their

families, in their countries, in their system of governments and in

jobs are certainly the pool from which terrorist organizations site,

so that’s why that figure struck me as such a dramatic number.

Senator MURKOWSKI. Let me ask you because you’ve kind of hinted to what you’re doing, the efforts that you’re engaged in on

Mindanao and the effort to reduce the appeal of terrorism there,

can you give me some more details in terms of what activities the

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dertaking in this effort? You’ve indicated that you feel that it’s

pretty effective. But what, exactly are you doing at this point?

Mr. KUNDER. I can give a quick description of our demobilization

program, and then I think Evans will want to talk more generally

about what we’re doing with the Philippine Government.

What we’ve done there with the MNLF, is after the agreement

with the Philippine Government, between the government and the

rebels, we instituted a program to take fighters, young men under

arms, and go through what is called in the trade, DDR programs,

disarmament, demobilization, and reintegration programs. Certainly in our experience around the world, when you get young

fighters, they are disaffected folks who are likely to have little opportunity, what you don’t want is someone who’s officially demobilized as part of a peace agreement, turns in one rifle, unburies

their second rifle at home and then turns into a criminal or a recruit for another terrorist organization. There has to be a process

of taking that person, giving him or her some opportunities, some

job skills and then taking that person back into the workforce, trying to reintegrate them back into society. And that’s what I think

we’ve done with some pretty striking success in Mindanao, it is a

very extensive program that takes them through each step of disarmament first, then into camps for training and reorientation, and

then gives them some real-world job skills so that they can become

productive citizens in the Philippines.

Mr. REVERE. If I could add to that, we estimate that about 60

percent of the ESF funds that we dedicate to the Philippines, as

well as 60 percent of development assistance of child survival and

health funding is focused on Mindanao, and one of the reasons for

that, obviously, is our concern that this is a major area where there

have been terrorist operations in the Philippines. The programs

that we are engaging in in that area indirectly support our

counterterrorism goals, in a very helpful way, by giving the people

of Mindanao, who have been historically marginalized, and historically the poorest people in the Philippines, a stake in peace in the

provision of livelihoods for these important populations. It also provides better local governance, and, of course, improved health care

and education.

Our estimate is that our system has already helped reintegrate

around 24,000 former combatants, which I think is a pretty significant number. Reintegrate them into the productive economy, and

also it’s helped restrict the ability of terrorists to find safe havens,

and at the same time it has really supported our effort to reduce

the alienation of local populations, and of course, anti-U.S. attitudes among local Muslim populations.

Senator MURKOWSKI. Tell me about the cuts for the Asia Foundation, I understand that this is the second straight year that we’ve

seen a reduction in funding. Can you give me the rationale behind

that?

Mr. REVERE. Looking over our numbers for this year, the request that we are making for fiscal year 2006 is $10 million and that figure is $2.8 million below the fiscal year 2005 appropriation that

Congress enacted. But that $10 million requested for 2006 is actually above what was requested for 2005 in the President’s budget

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rived at in light of our assessment of the constrained budget environment that we’re operating in. It also took into account competing priorities, and we were also attempting to keep in mind, obviously, the President’s priorities. It is in line with our previous

budget requests, and as I said, based on the requests that we’ve

made, it is, in fact, an uptake of the fiscal 2005 request. And in

our estimation it does reflect accurately our assessment, or it is

justified in light of the importance that we attach to this program,

but I believe it is in keeping with our previous requests.

Senator MURKOWSKI. Let’s talk about North Korea just a little

bit. We continue to provide humanitarian food aid although they

continue to limit NGO access and transparency. What is the expected level of food aid for not only this year, but the following

year, and what kind of transparency can we anticipate in ensuring

that those who should be receiving the assistance actually do receive it?

Mr. REVERE. This is something that we watch very, very carefully. I’ve been involved in food aid for North Korea over the better

part of 8 or 9 years, one way or the other. We have not, for this

year, made any decisions on the level of food aid. Our decisions,

just to repeat our criteria that we base our decisions on, are based

on three criteria, obviously demonstrated need in the country concerned, competing needs elsewhere around the world, but also the

degree of access that humanitarian groups have to populations that

are in need, and of course, the ability to monitor the distribution

of food aid. We do not link our food assistance decisions to political

factors, six party talks, et cetera, but they linked very directly to

those criteria that I pointed out.

As I’ve said, we have not made any decisions for the coming year,

but we are concerned about a number of trends and developments

in terms of transparency and in terms of monitoring. The North

Korean Government has, for example, refused permission for an increasing number of requested World Food Program monitoring visits late last year, it has also denied the WFP access to 10 previously accessible counties in the DPRK counties and districts, and

this has resulted in the WFP terminating food distributions in

those areas because, of course, they don’t want to be involved in

distributions where they can’t monitor.

We are also concerned about reports that the North Korean authorities are refusing, on some occasions, to issue visas to NGO

staff members. This, of course, means that some NGO representatives may be unable to remain there if these visas are not extended, and this, of course, imperils their ability to monitor distribution and continue to operate their own programs in North

Korea.

Other NGO staff have been allowed to continue making visits,

and we have been working with the WFP and NGO to get a better

understanding of the level of access, and have been monitoring this

very carefully in conjunction with them.

It is not clear at this point whether there will be a problem that

U.N. agencies international staff may have in the DPRK, but that’s

something that we’re looking very carefully at. Most NGOs who are

in North Korea right now are, at this time, not focused on food aid,

but this is something that contributes to our overall perception and

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assessment of the level of access and transparency there is, so it

is an issue of concern to us and we are continuing to work very

closely with the WFP and get constant feedback from them on their

ability to access key areas in the north.

Senator MURKOWSKI. Let me ask you, in terms of how you balance the three criteria, your first criteria is demonstrated need,

and based on all accounts, we would acknowledge that the people

of North Korea in many, many areas are starving. And yet you’ve

spoken more specifically to the access aspect of the criteria. Is

there, it’s probably not a fair question, but is there an equal balancing? Do you just have to weigh these criteria on a case-by-case

basis? Does it depend on how long things play out, how cooperative

the country is? Can you give me a little more guidance about how

these criteria work?

Mr. REVERE. There is no specific numerical formula, there’s no

specific line that one has to cross in any one of these three categories, but let me just back up for a moment and reflect the DPRK

is now in its ability to feed itself and call on resources of the international community and assistance and its own purchases, compared to where it was several years ago.

I think it would be fair to say that the food situation in the

DPRK is much improved compared to where they were in the midto late-1990s when there was significant starvation. Malnutrition

has been a problem in North Korea for decades now. The period of

significant mass starvation in North Korea is behind us, fortunately. The horrific stories and pictures that we saw, for example,

in the mid-1990s, very heart rendering film of young children, emaciated children, and children who were on the verge of death, that

situation is no more, thanks to the generosity of the United States,

thanks to the generosity of the international community and excellent work by NGOs. There continues to be a problem with food

shortages in the DPRK. This past year’s harvest by most reports,

was better than the previous several years harvests, so there has

been an uptake in domestic food production in the DPRK, which is

not to say that they are flush with food, but the situation is much

improved. The WFP has made another appeal this year, we’re looking at that appeal, but their air of crisis, the sense of crisis that

existed several years ago about the imminent starvation of thousands or even millions of people is fortunately behind us. If that

situation were to return, obviously, we would look at this very, very

carefully, that factor would, of course, be a very significant one. No

one, especially America, wants to see children starving.

Senator MURKOWSKI. Now, you’ve indicated that you’ve not yet

made a decision about what level you might provide for this year

or for next year, and you’ve also indicated that that decision is not

necessarily dependent with the politics, it goes back to the criteria.

You’ve also mentioned that it doesn’t necessarily hinge on what

happens with the six party talks. When would you make that determination as to whether there would be any assistance this year?

Mr. REVERE. Several factors would be looked at, number one, we

continue to stay in touch with NGOs in order to get their best assessment of the best timing for food deliveries to be made, we look

at ongoing assessments of the harvest and distribution within

North Korea, we would be looking at the international response to

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the WFP appeal, that’s always a key factor of ours over the years

that we have looked at, if it looks as if the WFP appeal has not

been positively or generously responded to by others, this is something that we take into account as well.

Last year, for example, we ultimately decided on a 50,000 metric

ton of food donation through the WFP. All of that food is in the

supply chain and has already arrived in North Korea, or is just

reaching North Korean households. I can’t give you a specific timeframe, but those are the factors that we would look at in the coming weeks and months.

Senator MURKOWSKI. You had mentioned spread of infectious diseases when you were speaking earlier, and we all have a growing

concern about the bird flu in Vietnam. I’m not exactly certain but

the number of individuals that they indicate may have died from

it is, I understand, about 14 now. Apparently there are some recommendations by some to change the farming practices to combat

this disease, can you tell me what role the United States is playing

in this?

Mr. REVERE. My colleague may have something else on this, but

this is something we are watching very carefully. We have our embassies in the region as well as science attache ́s in the region who

are attending conferences and participating in a number of studies,

passing back reports to Washington. It is an issue of concern to us

as it is to the international health community, WHO, and others,

something that we’re watching carefully, but let me allow my colleague to expand on that.

Mr. KUNDER. We are, in fact, in the analytical phases, we’ve been

in touch with our colleagues at the Centers for Disease Control and

Prevention as well as local health officials, we have not yet made

any decisions to reprogram any health funds. In other situations

where you have incipient outbreaks of what could be epidemic diseases, either our office of U.S. Foreign Disaster Assistance might

become involved, or we might take some of the funding that’s already programmed in a country and redirect it toward supporting

local health officials and heading off the spread of the epidemic. So

at this point we have the data, we’ve been in touch with CDC and

the local health officials, and this is exactly the stage we’re at,

we’re trying to get a sense for if there is some potential for this

breaking out into the larger population.

Senator MURKOWSKI. Something we’re all sort of anxiously keeping an eye on.

Mr, KUNDER. Yes.

Senator MURKOWSKI. What is the recent trend in the number of

refugees coming into the United States from Asia, and if you can

identify for me what countries now have the highest rates?

Mr. REVERE. Yes, I think if you look at the overall flow into the

United States, the two groups that occupy the largest raw numbers

of refugees coming into the United States are the Hmong and

Bernese. And by the end of last year, according to our statistics,

we had over 6,100 Hmong who were admitted into the United

States from Thailand, and a total of 15,000 of them had been approved to enter the United States, and the remainder of the approved group will be admitted as soon as some new health screening procedures are implemented to reduce the likelihood of transVerDate 11-MAY-2000 13:57 Oct 05, 2005 Jkt 000000 PO 00000 Frm 00126 Fmt 6633 Sfmt 6602 963433.SEN SFORELA1 PsN: SFORELA1
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mitting communicable diseases, such as tuberculosis. We’re also

working with the Royal Thai Government to resettle Burmese refugees who were recently, apparently, residing in Thailand. Some

3,100 Burmese refugees were referred to the United States and

about 1,000 of them were admitted last year, and the rest we anticipate being admitted this year.

Looking at the region overall in terms of intraregional refugee

flows, the greatest number of refugees in East Asia continues to be

Burmese overall. There are about 144,000 refugees, from a variety

of ethnic groups in Burma, who are still residing in camps in Thailand to which they fled to escape attacks by the Burmese military

and to escape prosecution, and the Thai Government is continuing

to cooperated with the UNHCR on the registration and protection

of refugee camp population.

And, of course, North Korea is another area of concern. As a result of bad agricultural policy decisionmaking, natural disasters

since about a decade ago, and the food shortages that we were referring to and other reasons, all of these events and more have

prompted thousand of North Koreans to flee to the PRC and in

many cases onward to other countries.

The latest estimates that we have of the number of North Koreans in China ranges from 30,000 to 50,000, although some organizations put the estimate a lot higher than that.

Senator MURKOWSKI. It’s interesting, even in Alaska you would

think that the Hmong would want to stay somewhere where it’s

warm, but that’s one of our fastest growing populations right now,

it’s interesting.

What is the proposed $50,000 in IMET funding for Vietnam

going to be used for?

Mr. REVERE. We are hoping to use that funding for English language training for military officers and Ministry of Defense officials

from the Republic of Vietnam. The English language training

course would be a prerequisite for any military training that the

United States might provide to Vietnam in the future. We do not

currently have, of course, an IMET program with Vietnam, the government of Vietnam has not signed a bilateral end use and retransfer agreement required by the Foreign Assistance Act, but we

are hopeful that it will do so at some point, because IMET in our

view, offers a tremendous opportunity down the line to develop professionalism among the members of the Vietnamese military.

Senator MURKOWSKI. Violence in southern Thailand. Can you

give me any information as to how the administration’s foreign assistance proposals pertain to the situation in southern Thailand

right now?

Mr. REVERE. We are continuing to look at that situation with

concern, it is one of the few flashpoints, if you will, where we have

seen an uptake in violence, including a fairly horrific incident that

happened last year. It is a constant element of our dialog with our

Thai allies and friends, we know that the Government of Thailand

is making efforts down there, we continue to urge them to deal

with this in a humanitarian and transparent way. Our own Embassy officials have traveled in the region working with Thai and

local community officials to try to enhance the level of transparency

there and I think the ongoing cooperation that we have with the

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Government of Thailand enables us to reach out, both to local communities, but also, importantly, to the Thai Government itself to

urge on them, since it is their primary responsibility, this important goal of dealing with this in a transparent and open way and

bringing these local communities onto the side of being cooperative

citizens and trying to develop a greater understanding between the

two communities that appear to be at odds there. Perhaps my colleague may have something else to say in terms of the——

Mr. KUNDER. Nothing to add to that one.

Senator MURKOWSKI. Let’s talk about Burma, Cambodia. What,

if any, foreign assistance needs or goals in these two countries

might be better addressed if we were to consider lifting foreign aid

restrictions?

Mr. REVERE. Burma is a very troubling country for us, its treatment of its people, its continuing incarceration of Aung San Suu

Kyi and a number of political prisoners, the Burmese military regime has been treating its people in what we regard as a horrific

fashion, the fact that there are so many refugees across the border,

in Thailand, speaks to the severity of this problem. It is our hope

that the nature of the regime will change as a result of the constant emphasis that we have placed on this in our own dialog with

Burma’s neighbors, we have urged Thailand and other countries to

do whatever they can to impress upon the Burmese the need to restore democracy, to free political prisoners. We have an Embassy

there, we have a charge in charge of our mission there, we have

limited dialog with the Burmese regime, we have, at this point, no

contact, unfortunately with Aung San Suu Kyi which is a worrisome factor to us. I think the fact that we have a diplomatic presence there is an important thing, it enables us to monitor developments there, it enables us to report back here to Washington, but

also to report to visiting delegations the real situation on the

ground. There is a lack of transparency in terms of the regime’s decisionmaking, this is worrisome to us. We continue to support, keep

a diplomatic presence in Burma, I think it’s important for us to be

there, it’s important for us to consistently and constantly make the

points that we make about transparency in return to democracy

and the freeing of political prisoners there. This is a critical priority for us.

Senator MURKOWSKI. We’ve got about 5 more minutes here before we finish up, so I’d like to conclude with Indonesia. If you

could speak to Indonesian cooperation with the United States as it

relates to antiterrorism activities and how our relief efforts, particularly those of the military, have impacted United States/Indonesian relations and democratization?

Mr. REVERE. Indonesia is indeed an important partner in

counterterrorism. We have a very active dialog in cooperative relationship with them. They have vigorously pursued investigations

into some of the bombings, as you are aware there is an ongoing

trial of Alou Baka Ba’asyir, we are anticipating a verdict in that

trial tomorrow, but above and beyond that, Indonesia has been a

good partner, especially in pursuing issues of terrorist organizations, finance, et cetera.

On the issue of our cooperation, I think we and the Indonesians

have truly entered into a new phase of our relationship as a result

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of the horrific events of late December, the tsunami. The level of

transparency that we saw, the level of cooperation that we saw

from the Indonesian authorities, the level of access that we were

able to achieve in Aceh in the aftermath of that tsunami, that tsunami was truly unprecedented. From the President of Indonesia,

right on down to the ranks, officials at all levels of the Indonesian

Government worked very carefully and closely and cooperatively

and transparently with our Embassy, with our military, with our

AID mission, and with the NGOs who were there and are there

today. We continue to work with them on the reconstruction efforts,

and I think that the ironic outcome of the tsunami disaster was

that Americans and Indonesians have seen that they can work

togther in this transparent and cooperative fashion, and I think we

have launched ourselves, I believe, into a new era of cooperation

with Indonesia.

At the same time there continue to be some remaining issues

that we’re looking at very seriously. Despite our decision, our finding and determination that enabled us to resume full IMET relations with Indonesia, we are continuing to hold Indonesia’s feet to

the fire, so to speak, on pursuing the details and the case in the

Timika killings. We have an FBI attache ́ in Jakarta now, we are

getting cooperation, that was the basis for the determination that

the secretary made, we’ll continue to work closely with the Indonesians to pursue this case and bring the offenders to justice.

Senator MURKOWSKI. I appreciate that. Mr. Kunder.

Mr. KUNDER. In terms of our, in terms of the 2006 request, our

largest increase that we’re requesting for development assistance is

in Indonesia, and as Evans has said, we’ve generally, across the

board in terms of education reform and democracy and governance

and so forth, had good cooperation, so we think that would be a

useful additional investment.

Senator MURKOWSKI. It’s terrible when we have to deal with a

natural disaster, the consequence that we saw with the tsunami,

but I suppose if there are bright linings that can be found in enhanced cooperation, we look for the bright linings.

I don’t know if either one of you would care to offer any concluding remarks, Mr. Kunder, you haven’t had as much of an opportunity to speak into the mike as Mr. Revere, so if you’d like to

add anything finally, I’ll give you that opportunity.

Mr. KUNDER. No, thank you, we tried to cover most of our main

points in the opening remark, and obviously I’ve got a larger statement which covers additional detail. We work very closely with our

State Department colleagues and obviously we’ve all cleared each

others’ statements here, so I completely concur with everything

that Evans has said. In general, we share the same view, generally

positive throughout the region, we’ve got a lot of work to do, but

that’s one place where I think we’re making enormous progress

both in regional and U.S. stability. Thank you.

Senator MURKOWSKI. Well, as chair of the subcommittee on this

region, I’m pleased to hear the good news report. Mr. Revere, I notice on the schedule you have put your seat time in today, so I appreciate all the information that you have shared with the subcommittee and with that, we will conclude at three o’clock and I

appreciate your attention.

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Mr. REVERE. Thank you very much.

[Recessed 3 p.m. to 3:05 p.m.]

STATEMENT OF HON. GEORGE ALLEN, U.S. SENATOR FROM

VIRGINIA

Senator ALLEN. Good afternoon, to everyone who is here. I understand that if there are any Ambassadors or individuals from any

of the countries which are in the purview of this hearing, this

afternoon, which is to examine President Bush’s budget request for

foreign assistance programs to Eurasia and Europe. If any of you

all are here, if you want to rise you’re welcome to, if not, we’ll proceed. I just wanted to welcome any who might be here and interested in this hearing.

At this hearing we’re going to be hearing from our witnesses who

are with us. Mr. Robert A. Bradtke, who’s the Principal Deputy Assistant Secretary, Bureau of Europe and Eurasian Affairs, Department of State. It’s good to have, once again, the Honorable Kent

Hill with us, the Assistant Administrator for the Bureau of Europe

and Eurasia with the U.S. Agency for International Development.

I’ll make a few opening comments here and then we’ll hear from

our witness or witnesses, however you all want to use your time.

Now then, I’ll say to those watching and listening here, that the

budget the President submitted to Congress, overall I look at it as

a very tight and taut budget. There are some aspects of it which

I would like to see reordering in, like in aeronautics and a few

other areas. However, the President has tried to show proper discipline by reigning in excessive spending on nondefense, non-Homeland Security, discretionary spending. There is one area that he did

propose an increase, and that is foreign aid.

Now, in light of all that, some people may question how the administration propose strict limits on domestic spending, while asking for a 16-percent increase in foreign assistance. I think it’s important for us, at least in this subcommittee hearing and in the

context of the whole foreign relations budget, to understand the

scope and gravity of the United States operations overseas. If we,

as a country, are going to be successful in the war on terrorism as

well as to promoting freedom, it makes sense to provide assistance

and advise in constructing those institutions to make such progress

stable.

We have seen the advancement of freedom since the fall of the

Soviet Union and the Iron Curtain mostly has been progress. Some

cases there hasn’t been progress, you see in some cases elections

that don’t meet international standards of fairness, some cases you

see media outfits consolidated and just benefiting state-owned enterprises. Sometimes you see opposition groups being marginalized

to the point of being ineffective or unable to fairly compete, but the

majority, and I don’t want to focus on the negatives, because there

have been mostly positives. Just recently we’ve seen some great

positives in the Ukraine and in Georgia with their revolutions, so

there’s reason for hope. Both of these countries, Georgia and the

Ukraine rejected corruption, that was the business as usual for

those governments for many years. In its place, the people of Georgia and the Ukraine elected candidates who have pledged sweeping

reforms, transparency, and accountability in their government.

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My view is that the United States ought to seize these opportunities, work with these new governments to help further and foster

the democratic and free market reforms that were started after the

fall of the Soviet Union. Now, continuing to provide funding for the

Freedom Support Act and continued support for Eastern European

Democracy Act funding, offers needed assistance to help make the

transition to democracy smoother and more likely to be permanent.

President Bush has used the phrase, and the goal, a central

theme that we heard in his inaugural address, ‘‘the spread of democracy.’’ The way I would use the words, or my views are we need

to be promoting the concepts of free and just societies. It’s the same

sort of thing, we want people to live in free and just societies where

they have freedom of expression, freedom of religion, private ownership of property, and the rule of law to adjudicate in a fair manner, disputes, as well as protect what I like to call God-given

rights. Through the accession of the Northern European countries,

as well as Romania and Bulgaria, to NATO, we’ve seen how this

advancement of freedom has improved hope and opportunity for

the people living in those countries, but it has also furthered our

security here in the United States.

A number of these countries in Europe and Eurasia have been

extremely helpful in fighting the war on terrorism and in our military actions in Afghanistan and in Iraq. With countries like Bulgaria and Romania and many others making the sacrifice to combat terrorism, the United States should consider how we can provide aid to these partners and true friends and true allies for activities that are beneficial to them, but also beneficial to us as

Americans.

With organized crime and corruption in some of these areas continuing to afflict people, particularly in Southeastern Europe and

Eurasia, it’s certainly in the interest of the United States to help

secure borders that have been historically used to smuggle drugs,

traffic in persons, and as far as actual worrisome matters, the actual transportation, sale, and dealing in dangerous materials and

weapons.

Similarly, the United States will need to continue to help those

nations who have uncovered terrorist cells within their borders. AlQaida groups that have been shut down in Albania and Bosnia,

don’t get much attention, but that’s part of this overall global war

on terrorism, and it’s clearly in our interest as our country to continue in those efforts to assist those who are part of the whole effort.

Let me focus on one thing that I’m glad we’ve seen an improvement in that we will not have to address, and that has to do with

the South Caucasus. I’m pleased that the administration has requested an equal amount of foreign military financing for Armenia

and Azerbaijan. A peaceful settlement of the Nagorno-Karabakh

conflict becomes less likely if one side were to gain a substantial

military advantage over the other. I think reaching a lasting resolution in that conflict is also key to our United States interest in

the region. We should be mindful how we allocate aid and its potential impact in the prospect for peace there.

So, let me close by saying that the United States has a tight

budget; we need to be wise, we need to make sure that the money

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we spend actually improves our security while also advancing freedom for the people in these countries. It can play, foreign aid, a

major role in furthering our foreign policy objectives in securing

troubled regions around the world. There has been great progress

if you just want to look at history, recent history in the last 60

years in Europe, in Western Europe. In Central Europe there’s

been great progress, really for the last 15 years. First in Poland,

and Hungary and Bulgaria and the Czech Republic and Slovakia,

and the last 15 years have been wonderful.

And then in eastern, what I consider Eurasia and Eastern Europe, there have been some rays and areas of hope. They’re behind,

but in the last really few months and years, there’s been progress

there. There remains a number of areas, though, in Eurasia and

Europe that continue to be of concern for our security and for our

interest. I look forward to hearing our witnesses’ testimony this

morning, and if anybody has any cell phones, please turn them off,

unless you have some really good music that we’d all like to hear

in here.

So, with that, which one of you two gentlemen would like to proceed first? Mr. Bradtke.

STATEMENT OF ROBERT A. BRADTKE, PRINCIPAL DEPUTY ASSISTANT SECRETARY, BUREAU OF EUROPE AND EURASIA

AFFAIRS, DEPARTMENT OF STATE, WASHINGTON, DC

Mr. BRADTKE. Thank you very much, Senator, for this invitation

to appear before you and discuss our assistance programs in Europe and Eurasia. I have a written statement that I would like to

submit for the record, and with your permission then proceed with

a summary of my remarks.

Senator ALLEN. Your entire statement will be made part of the

record.

Mr. BRADTKE. Thank you. Let me begin by thanking this committee for your support and leadership on our assistance programs

in Europe and Eurasia. As you mentioned, these programs are

playing a vital role in supporting U.S. interests in the region, and

we are grateful for the dialog we’ve had with this committee, and

your support for our programs.

In addition to Kent Hill from USAID, who’s next to me today, we

have behind me, Tom Adams, who is our coordinator for European

and Eurasian assistance. We are very fortunate in the Europe and

Eurasian bureau to have a statutorily mandated coordinator in the

bureau, who helps us to ensure that our policy objectives and our

resources are closely linked together. It’s also facilitated in our

agency cooperation, not only with AID, but with other U.S. Government agencies which support our programs, and I think in the end,

the result has been that we have been able to use the money that

Congress has provided us more efficiently and more wisely.

Mr. Chairman, you mentioned President Bush’s visit to Brussels

and Bratislava last week, and these visits did provide us the opportunity to put into perspective our foreign policy successes in Europe

and Eurasia, as well as the challenges that we still face there.

Those successes could not have been achieved without the contribution of our foreign assistance, and without the contribution of our

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foreign assistance we will not succeed in addressing the challenges

that we still face.

In Brussels, the President consulted with our partners and

friends in the EU and NATO. These two institutions have acted

like magnets in recent years, very powerful forces, pulling countries toward democracy, free markets, the rule of law, the resolution of ethnic and territorial conflicts. In other words, toward the

values consistent with American values and favorable to our foreign policy interests.

You mentioned the four pillars of freedom that you cited in your

discussion with Dr. Rice at her testimony of her confirmation hearing, and we have seen great progress in these areas of freedom of

religion, freedom of expression, private ownership, and the rule of

law.

But even as we celebrate the progress we’ve made and the accession of countries to NATO and the European Union, there are challenges that we still face, and we need to recognize that the process,

this progress, did not happen all by itself. Our assistance did play

a vitally important role. Our military assistance, through our FMF

program, IMET and our peacekeeping funding was crucial, every

step of the way, first to helping new countries prepare for NATO

membership, and then to help them make meaningful contributions

to NATO operations.

Our political, economic, and social sector reform assistance

through SEED and the Freedom Support Act have also been indispensable every step of the way to help create internal conditions

that resulted in the aspiration to join Euro-Atlantic institutions,

and then to help countries realize these aspirations.

We need, as you mentioned yourself, Mr. Chairman, to look no

further than the recent headlines to see how this process can work.

The Orange Revolution in Ukraine had several motivating factors.

Certainly discussed were the corruption and stagnation from the

previous regime was very important. But clearly, the attraction of

Euro-Atlantic unions was a key element in the process of change

that took place there.

Ukraine’s democratic breakthrough did not come about because

of United States assistance. Many other ingredients were necessary. Chief among them, of course, the courage and resolve of ordinary Ukrainian citizens who refused to allow their democratic

rights to be stolen. But U.S. democracy programs played an important role. In the run-up to the elections, we helped improve the

legal framework and electoral administration. We supported balanced media coverage, we helped educate voters about their rights

and provided legal recourse when rights were denied. We strengthened political entities to participate effectively in elections, and we

helped enable civil society groups and international organizations

to monitor the process.

Perhaps, even more importantly, the response of the Ukranian

political parties, nongovernmental organizations, an independent

media to electoral fraud was a testament to the vibrancy of civil

society. There’s no doubt that the training, grants, and exposure to

new ideas, provided through U.S. assistance and exchange programs over the past 13 years helped create that vibrant civil society. If I have my numbers correct, Mr. Chairman, even just in the

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last 5 years alone, 10,000 Ukrainians participated in exchange programs with the United States.

Our assistance now will play a crucial role in helping advance

the aim of integrating Ukraine with Europe and Euro-Atlantic institutions as quickly as possible. This will require consolidating recent democratic gains, accelerating economic reform, and especially

dealing with corruption in establishing the rule of law.

We have requested, as part of the emergency supplemental re- cently sent by President Bush to Congress, $60 million to help the

new government make rapid progress in these areas. We are also

proposing to increase funding for Ukraine in the fiscal year 2006

budget for the Freedom Support Act to $88 million.

If I can return to the President’s trip. His stop in Bratislava also

highlighted the region’s successes, especially triumph of freedom in

Slovakia and many of its neighbors. The visit also put a spotlight

on the serious challenges we face. The President’s meeting there

with President Putin allowed the two Presidents to identify common United States-Russian approaches to dealing with some of the

most serious transnational problems we face, especially international terrorism, and the proliferation of weapons of mass destruction.

The meeting also allowed the President to discuss our concerns

about Russia’s own democratic development. Here again, you can

see how our foreign aid programs provide the tools we need to

maintain a constructive, and a very complex relationship with a

strategically important country, such as Russia.

Our joint nonproliferation efforts are bolstered by funding from

the NATO and Freedom Support Act accounts. Our common fight

against terrorism is supported by law enforcement and

counterterrorism programs, and our strong interest in seeing Russia get on the right track with democracy is furthered by Freedom

Support Act programs that support the rule of law, independent

media, and nongovernmental organizations.

Mr. Chairman, you’ll see in my written statement a longer discussion of past successes, and the current and future challenges we

face in Europe and Eurasia, and how foreign assistance plays a

critical role. If I can, I would just like to stress three additional key

points. First, we view our foreign assistance as a flexible policy

tool. It can be used for long-term developmental goals, building

civil society, introducing the elements of market economy, dealing

with infectious diseases. But it can also be used for short-term

strategic goals. Supporting free and fair conditions for the conduct

of a specific election, or helping to implement an ambitious reform

program proposed by a new government. And it can be used for

mixed strategic and developmental purposes, what I might call medium-term objectives, such as helping a country for the final push

to get ready for EU or NATO membership.

Preserving this flexibility is very important. Excessive legislative

restrictions, even if they’re well-intentioned, have not helped the

process of providing our foreign assistance. We face an overwhelming number of legislative sanctions, certification requirements and other limitations as well as numerous funding earmarks. I’ll be providing for the record a chart that shows some of

the most important restrictions we’re dealing with.

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Let me move onto the second point I’d like to make here and that

is that many of the challenges we face in our region are relatively

new. The authors of SEED and the Freedom Support Act in the

early 1990s could not have fully foreseen the scope of the

transnational threats that we now face. Vastly increased poppy

production, for example, in Afghanistan, is flowing into Central

Asia, and then on to Russia, the Balkans, and Western Europe,

leaving behind a trail of corruption and ruined lives. Organized

crime, especially in the Balkans, is a major obstacle to establishing

the rule of law there, and HIV/AIDS is poised to ravage several

countries, especially Russia and Ukraine.

So we need to be creative in the way we deploy our resources,

and to think beyond the traditional goals of SEED and the FSA

which were primarily about achieving a transition from Communist

systems to democracy and free markets. The problems go deep and

touch on our important security interests, our involvement therefore, may need to have a longer time horizon.

Third and last, I would draw an important lesson from the experience of the last 15 years, and the fall of the Berlin Wall, namely

long-term investments pay long-term dividends. We saw that in

Georgia a little over a year ago, and in Ukraine 2 months ago, and

we see it every day from the support we get from our European

and Eurasian partners in the global war on terrorism. That support which we receive from the recipients of SEED and FSA funding in the global war on terrorism, is not just based on the policies

of their governments. Rather it is based on shared values that go

deeper into these societies and that have been promoted by our assistance in exchange programs over the past 15 years. Day after

day, year after year, Americans are interacting with nongovernmental organizations, educational institutions, private companies,

students, scientists and many, many others. From this engagement

comes a network of linkages between our society and their societies, a web of linkages strong enough to withstand the ups and

downs of bilateral relations over time. This is an excellent return

on the investment of our foreign assistance dollars, and it is one

that the members of this committee can be proud of having supported.

Thank you very much, Mr. Chairman.

[The prepared statement of Mr. Bradtke follows:]

PREPARED STATEMENT OF ROBERT BRADTKE, ACTING ASSISTANT SECRETARY, BUREAU

OF EUROPEAN AND EURASIAN AFFAIRS, DEPARTMENT OF STATE, WASHINGTON, DC

Mr. Chairman and other distinguished committee members, I am pleased to participate in your examination of U.S. foreign assistance programs. United States assistance is key to achieving our foreign policy goals in Europe and Eurasia, and we

greatly appreciate your current and past support in providing us with this important diplomatic tool. With me today is Dr. Kent Hill, my counterpart from the U.S.

Agency for International Development. Also, sitting behind me is Tom Adams, the

Coordinator of Assistance to Europe and Eurasia. We are fortunate to have in our

Bureau a Coordinator with statutory authority to coordinate all assistance going

into our region; we think this helps ensure that foreign aid reinforces foreign policy

objectives, in a way that maximizes the value of each taxpayer dollar.

Assistance Advances American Interests

Mr. Chairman, in Europe and Eurasia you will find a case study of how foreign

assistance can serve America’s national security interests in the short, medium, and

long term. The past year, however, has provided ample evidence that the U.S. Government’s strategy of the past 15 years—which has involved intensive engagement

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with governments and with the broader society through technical assistance, training, grants, and exchanges—is beginning to bear fruit. First in Georgia, then in

Ukraine, we witnessed the extraordinary expression of democratic spirit by ordinary

citizens who refused to allow the will of the people to be subverted. Many ingredients were necessary for these breakthroughs to occur—the courage and resolve of

the Ukrainian and Georgian people chief among them—but U.S. democracy programs played an important role. In the run up to elections we targeted our assistance to encourage improvement of the legal framework and electoral administration,

to support more balanced media coverage, to educate voters about their rights and

provide legal recourse when rights were violated, to strengthen political entities to

participate effectively in the elections and to enable civil society groups and international organizations to monitor the process. The result of our assistance was increased expectations for democratic elections and a huge spotlight on electoral

fraud, laying the basis for the Georgian and Ukrainian people to challenge manipulated results. The sustained and ultimately effective response of Ukrainian and

Georgian political parties, NGOs, and independent media to electoral fraud, was a

testament to the vibrancy of civil society in these countries. There is no doubt that

the training, civil society grants, and exposure to new ideas provided through U.S.

assistance and exchange programs, helped create the foundations for effective action.

The countries of the former Soviet Union and Communist Eastern Europe, all of

which have received substantial United States assistance since the early 1990s, remain bulwarks of our Coalition operations in both Afghanistan and Iraq. Nineteen

of them were active supporters of Operation Iraqi Freedom, Operation Enduring

Freedom, and/or the International Security Assistance Force in Afghanistan in 2004.

At the same time, many of these transition countries are strongly engaged with

Euro-Atlantic institutions, and it is clearly in our long-term foreign policy interest

to encourage their movement toward NATO and the European Union. We can try

to do this through dialog alone, but it is much more effective when diplomacy is coupled with foreign assistance. The Foreign Military Finance (FMF), International

Military Education and Training (IMET) and Peacekeeping Operations (PKO) accounts are helping countries make the operational and structural changes they need

to integrate with NATO security structures. Political and economic transition assistance through the FREEDOM Support Act (FSA) and Support for East European Democracy (SEED) Act are helping build constituencies for reform, and once countries

are committed to meeting EU or NATO standards, giving them the necessary tools

to gain admission. Since this committee examined our foreign assistance in Europe

and Eurasia 1 year ago, eight more Central and East European countries (Czech

Republic, Hungary, Poland, Slovenia, Slovakia, Estonia, Latvia, and Lithuania) have

joined the European Union and two (Romania and Bulgaria) joined NATO. Albania,

Macedonia, and Croatia are poised as candidates for NATO.

We can clearly see how, in the short and medium term, many countries in this

region are moving from being consumers of assistance to being contributors to our

global security interests. It is sometimes more difficult to recognize the longer term

trends. For many years now, this committee and many others in the Congress and

in the administration have expressed frustration with the slow pace of democratization and economic reform, particularly in the former Soviet States. Some have questioned the efficacy of our assistance, and wondered whether the twin ills of official

corruption and popular apathy might cause these countries to remain indefinitely

in a post-Soviet twilight zone.

Democratic gains in both Ukraine and Georgia must be consolidated, and here,

too, our assistance will play a crucial role. Georgia has made significant progress

in economic and democratic reform in the year following the November 2004 Rose

Revolution. Tax revenues have greatly increased; corrupt officials have been made

to account for past actions; effective law enforcement institutions are being created;

civil service reform has begun; and the government has begun to think strategically

about issues such as energy and education. At the government’s request, the United

States has provided funding for advisors to six government ministries.

Ukrainian President Yushchenko aims to integrate his country with Europe and

Euro-Atlantic institutions as quickly as possible. Our task over the next months and

years will be to work with the Ukrainian Government to consolidate the country’s

recent democratic gains, and advance its economic reform and integration with the

European and global economies. In addition to the fiscal year 2006 budget, we currently have a request before Congress for $60 million in supplemental funds to help

the new government make immediate progress.

The Ukrainian and Georgian democratic ‘‘revolutions’’ have reverberated throughout the region, including in Russia. Last week in Brussels President Bush said

‘‘Russia’s future lies within the family of Europe and the transatlantic community.’’

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It is this future that our assistance programs in Russia aim to help secure. More

than any other country in the Eurasia region, Russia’s future stability—which is

linked to its democratic development—directly affects United States national security interests. We are aligning resources within FSA funding for Russia to focus on

support for democracy. In 2005, over half of the Russia budget will be dedicated toward supporting civil society, rule of law, and independent media in Russia, and we

expect to dedicate an even larger proportion of the budget to these priorities in fiscal

year 2006.

Presidents Bush and Putin announced in Bratislava a desire to dramatically increase bilateral exchanges between our countries. Their meeting reflected a relationship that acknowledges challenges but seeks to maximize opportunities for cooperation. Through our exchanges and assistance programs, we will work to increase

these people-to-people collaborations that have proven so effective in removing the

distrust of a bygone era.

Old and New Challenges

When the FSA and SEED accounts were created, the focus was on economic and

democratic transition. There was a sense that if only the transition countries could

get their political structures and economic policies ‘‘right,’’ stability and prosperity

would follow. And it has, in fact, turned out to be generally true that the level of

commitment to reform has correlated to economic growth and internal stability.

But new factors, not anticipated by the authors of SEED and FSA, have complicated the picture. Familiar transnational threats, such as organized crime and

the illegal narcotics trade, have grown in scope and virulence. Relatively new challenges—extremism, human trafficking, HIV/AIDS—have arisen, threatening to undermine political and social stability. Vastly increased poppy production in Afghanistan is flowing into Central Asia, and on into Russia, the Balkans, and Western Europe, leaving a trail of corruption in its wake. Organized crime is especially entrenched in the Balkans, and is a major obstacle to establishing good governance

and rule of law. HIV/AIDS is poised to ravage these transition countries, most particularly Russia and Ukraine.

Furthermore, the creators of SEED and FSA did not foresee the complete collapse

of the Communist-era social service infrastructure, which has resulted in an alarming decline in health and education indicators in many of these countries. In

Ukraine, for example, the number of deaths surpasses the number of live births by

a ratio of 197 to 100. In Tajikistan, secondary school enrollment is half what it was

at the end of the Soviet Union. These are but a few of the manifestations of declining quality of life that may eventually be reflected in political and social instability.

Countries where political, economic, and justice sector reforms are incomplete (or

completely absent, as in Belarus or Turkmenistan) are the most vulnerable to the

destabilizing effects of transnational threats and deteriorating social conditions.

That is why even as we direct an increasing proportion of our SEED and FSA assistance to address transnational threats and social sector problems, we continue to

focus the largest share of these accounts on fundamental economic and political reform.

In the Balkans, we have energetically pursued the downsizing of the international

military presence in a region recovering from more than a decade of violent ethnic

conflict. In Bosnia and Herzegovina, defense reform took a quantum leap forward

with the creation of a state-level Ministry of Defense and on December 2, 2004, the

NATO-led Stabilization Force (SFOR), that had ensured the peace and stability as

civilian reconstruction progressed, successfully completed its mission and a European entity, the European Union Force (EUFOR) assumed responsibility for stability. But Euro-Atlantic integration cannot be completed until Serbia and Montenegro, Croatia, and the Republika Srpska entity in Bosnia cooperate fully with the

International Criminal Tribunal for the former Yugoslavia (ICTY); nothing would do

more to advance the cause of peace than the arrest and transfer to The Hague of

Radovan Karadzic, Ratko Mladic, and Ante Gotovina. Meanwhile, in Kosovo stability remains fragile, as evidenced by the ethnic conflict that erupted last March,

resulting in death and injury. Our policy objective is to help build a secure, stable,

and multiethnic Kosovo that can be fully integrated into Europe. United States assistance is helping Kosovo achieve that goal through implementation of the Standards for Kosovo. In mid-2005, the Contact Group will review progress on Standards

implementation, and if results are positive the international community will move

toward a process to address Kosovo’s future status.

Looking Forward: Strategic Priorities

The fall of the Berlin Wall and the breakup of the Soviet Union fundamentally

changed our world and challenged us to develop new foreign policy approaches,

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backed up by new foreign assistance programs. Fifteen years later, we are faced

with a new set of complex challenges, forcing us to to reorder priorities. Following

is a list of the key priorities we have set for our assistance programs over the next

few years.

1. Supporting Partners in the Global War on Terrorism: As I have mentioned,

many countries are already contributing to internatonal peacekeeping efforts and to

the Global War on Terrorism. These partnerships are nascent, and it is in our interest to help these countries do more. If not for the participation of these countries

in the Balkans, OIF, OEF, and ISAF, the burdens on American troops would be

greater. We need our partners to be interoperable with the U.S. military and with

NATO. We need them to be trained in modern military practices. Our security assistance through FMF, IMET, and PKO is truly an investment in our own security.

2. Facilitating Euro-Atlantic Integration: For those countries with governments

committed to integration with western institutions and willing to tackle the tough

issues (like corruption) that stand in the way of that goal, we focus assistance on

accelerating reforms and consolidating the institutions of a market-based democracy. Bulgaria, Romania and Croatia are examples of countries that soon will graduate from such United States assistance. Bulgaria and Romania are due to complete

their SEED programs over the next few years, joining their fellow SEED graduates

as EU members in 2007. Croatia’s SEED program will begin to phase out in 2006,

with prospective EU membership contingent on cooperation with the ICTY. Georgia

and Ukraine are now on a similar track, but at the beginning of the process. In addition, security assistance helps with integration with NATO, which furthers transAtlantic relations. SEED and FSA funded programs are key to advancing the broad

USG goal of creating law enforcement agencies, specialized units, legislation and

criminal justice sector systems that are harmonized with European and internationally accepted standards.

3. Promoting Democracy: The experience of the past 15 years has shown us time

and again the value of patient support for democratic transition. Even in places

where democratization at one time seemed to be going in reverse—Slovakia, Serbia

and Montenegro, or Ukraine, for example—slow and persistent support provided to

civil society groups, human rights advocates, democratically oriented political parties and movements, and independent media eventually proved decisive. We have

also learned how effective it can be to reinforce our technical assistance with the

right diplomatic message about the priority we attach to democratic development.

This will be particularly important in the future, as the events of the past year in

Georgia and Ukraine have exacerbated government suspicion in the rest of the Eurasia region, leading to harassment of NGOs and democracy programs. As we look

ahead to important elections this year in Macedonia, Moldova, Albania, the Kyrgyz

Republic, and Azerbaijan, it will be critical to synchronize assistance with diplomacy.

4. Empowering Entrepreneurs: Quite simply, jobs for a middle class are a force

for stability. Property ownership gives citizens a stake in their country. Support for

job creation may seem unexciting. In this region it is radical. The creation of capital

markets, strengthening of property rights, deregulation, rationalization of tax policies, commercial law reform, promotion of regional trade, identifying areas of competitiveness and privatization of land—especally in rural areas—are the keys to

building a vibrant market economy, and we are working on all these issues throughout the region. Increasingly though, we are focusing on support for the emerging

class of entrepreneurs, which we do through training and lending facilities. Small

and medium businessowners can be the catalyst for job creation and economic

growth, even in the most desperately poor areas of our region.

5. Fighting Transnational Threats: Heroin from Afghanistan is flooding into the

former Soviet Union and Southeast Europe, but it is not just transiting these states.

It is contributing to crime, disease, and corruption to such an extent that it threatens to overwhelm recent gains, particularly in Central Asia. Russia, Ukraine, and

the Balkans have also been victims of this scourge, which is the principal cause of

escalating HIV infection rates. Because our resources alone cannot fully address this

problem, we are coordinating closely with the European Union and the United Nations on the drug issue, while also leveraging grant resources from the Global Fund

to Fight AIDS, Tuberculosis, and Malaria to address the HIV/AIDS challenges. At

the same time, we expect to continue devoting significant resources to combat

human trafficking in fiscal year 2006.

FSA and SEED Phase Out

Mr. Chairman, although there have been clear successes in these transition countries we never stop retooling our strategies, adjusting programs to fit changing realities, and trying to ensure that our programs are cost-effective. We are also aware

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that the ultimate goal is to see the need for the SEED and FSA accounts disappear.

These were conceived as transitional accounts, with programs expected to phase out

when stable market democracies emerged to take the place of the former Communist states. Consistent with this original intent, we conducted, in 2004, a comprehensive interagency review of the transition status of all 12 FSA countries and

the 5 SEED countries slated to continue receiving assistance after fiscal year 2006.

The review analyzed progress in the political, economic, social, and security/law enforcement sectors, and ultimately recommended phase-out dates for each sector of

assistance in each country. These phase-out dates have been identified for planning

purposes and do not convey any commitment to funding levels or entitlement to assistance until that time. Comparative analysis conducted in the course of the phaseout review made starkly clear that the post-Soviet transition process in democracy

and the social sector has not been as fast as the founders of the SEED and FSA

accounts had anticipated. In fact, in both of these sectors there has been considerable backsliding in recent years. Notwithstanding the important breakthroughs of

the past year, there is a long way to go before the original intent of SEED and, especially, FSA can be realized. There are sure to be setbacks along the way, and the

coming years will require us to maintain a long-term perspective and to persist in

engaging the peoples and governments of the Eurasian countries through technical

assistance, training, exchanges, and partnership programs.

Conclusion

We have not yet seen the emergence of full-fledged failed states in our region, but

we are ever alert to the warning signs. In this regard, we view our assistance programs as a form of preventive medicine. We are making investments today aimed

at preventing the future growth of extremist and anti-American ideologies, of organized crime and infectious disease and other forces that could ultimately touch our

shores.

As I stated at the beginning of my remarks, we also view our assistance programs

as an indispensable tool of our diplomacy, that helps us garner support for immediate, as well as longer term foreign policy objectives. And, in that context, it is

worth emphasizing that the overwhelming support we have received from the recipients of SEED and FSA assistance in the global war on terrorism is not just based

on the policies of governments currently in power. I truly believe that in most cases

it is based on shared values that go deeper into these societies. These shared values

have been promoted by our foreign assistance—including, very importantly, our public diplomacy and exchange programs—for the past 15 years since the fall of the

Berlin Wall. Through our aid programs, Americans are engaging with nongovernmental organizations, educational institutions, private companies, students, scientists, and many, many others. And this engagement is helping to form a network

of linkages between our society and their societies, a web of linkages strong enough

to withstand the ups and downs of bilateral relations over time. That is an excellent

return on the investment of our foreign assistance dollars, and it one that members

of this committee can be proud to have supported.

Senator ALLEN. Thank you, Secretary Bradtke for that summation but also the spirit of your remarks and the purpose of these

funds. I appreciate your leadership and guidance. Now we’d like to

hear from Administrator Kent Hill.

STATEMENT OF HON. KENT R. HILL, ASSISTANT ADMINISTRATOR, BUREAU FOR EUROPE AND EURASIA, U.S. AGENCY

FOR INTERNATIONAL DEVELOPMENT, WASHINGTON, DC

Mr. HILL. Thank you, Mr. Chairman, for the opportunity to once

again appear before this committee and you, to talk about the work

of Europe and Eurasia and the work that USAID is doing there.

I do want to express my appreciation that I am here with my copanelist, Robert Bradtke, and I also want to acknowledge the presence in the chamber of Tom Adams, who is not only the coordinator

for assistance from the State Department, but a close colleague and

a good friend who models the kind of attitude that makes good collaboration possible. I really appreciate that, Tom.

I also want to suggest at the outset, strongly suggest, in fact,

that I do affirm and strongly support our budget and operating exVerDate 11-MAY-2000 13:57 Oct 05, 2005 Jkt 000000 PO 00000 Frm 00139 Fmt 6633 Sfmt 6602 963433.SEN SFORELA1 PsN: SFORELA1
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pense requests for Europe and Eurasia. Allocations at such levels

would help us to achieve the overriding goal that we share with

you for the region which is, in a phrase, the establishment of market-oriented democracies with responsible social safety nets.

We have much to report that’s positive, the performance of some

of our recipients has been sufficiently impressive that we are ending our bilateral assistance, and, in fact, as you know, between

1996 and 2000, we graduated country programs for the eight states

in the Northern Tier of Central and Eastern Europe, and over the

next several years we will have graduated missions from Bulgaria,

Croatia, and Romania. And we plan to phase out of economic sectors in Kazakhstan, Russia, and Ukraine over the next several

years as well.

Within the Millennium Challenge Account, both Armenia and

Georgia have been declared eligible for resources and Albania has

been designated as a threshold country. Our missions in each of

the three countries are collaborating with host country governments and the Millennium Challenge Corporation to produce programs that will effectively use MCA resources.

The region is growing robustly, a far cry from the 1990s when

there were episodes of negative growth. In fact, in 2004, Southeast

Europe grew 5 percent, and Eurasia 7.4 percent, owing in part, to

United States aid efforts to encourage economic reforms, promote

competitiveness, spur agricultural activity, enhance small and medium enterprises, and to make energy sectors more efficient. And

we are making some progress and headway in the area of freedoms

in the region.

The most tangible expressions of popular empowerment are indeed Georgia’s Rose Revolution, and Ukraine’s Orange Revolution,

but, in fact, these were not revolutions at all. They were, instead,

examples of democracy at work. What was revolutionary is that democracy simply was allowed to work.

Also, more than 70 percent of our recipients are now ranked as

free, or partly free by Freedom House, though sadly we must note

that Russia moved from the ranking of partly free, to not free in

2004, which emphasizes the need to continue our support of democracy activities in that country.

In the area of changes that affect peoples’ lives, what we call the

social transition region, USAID has developed effective HIV prevention programs, worked toward countering the deadly impact of

injecting drug use, controlled a diphtheria epidemic in Eurasia,

demonstrated internationally approved and cost-effective TB control approaches, offered women alternatives to abortion, revolutionized care for orphans and vulnerable children, strengthened pension programs for retirees, improved the targeting of social benefits, and made teaching methods more effective.

Nevertheless, a number of critical challenges persist. First, unemployment continues to plague the region. In Southeastern Europe unemployment rates can be as high as 42 percent in the case

of Bosnia-Herzegovina, and on average they exceed 20 percent.

We’re especially cognizant of the need to support meaningful employment opportunity in Islamic majority countries and regions

such as Albania, Central Asia, and the North Caucasians because,

absent political rights and jobs and hope, segments of those popuVerDate 11-MAY-2000 13:57 Oct 05, 2005 Jkt 000000 PO 00000 Frm 00140 Fmt 6633 Sfmt 6602 963433.SEN SFORELA1 PsN: SFORELA1
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lations are more vulnerable to extremist rhetoric, and may be

drawn toward radical Islamic elements and terrorism. There is a

connection between success in development, and whether these

areas are more or less vulnerable to forces that we know are problematic.

A second challenge that needs to be mentioned, is since the collapse of the Soviet Union, democratic freedoms have generally

stalled or regressed in Eurasia with the exception of Georgia and

Ukraine, and the democracy gap between Southeastern Europe and

Eurasia continues to widen, not narrow.

The committee is undoubtedly aware of the backsliding in Russia. Moldova elected a Communist government in 2001 and more

importantly, shows some signs of moving away from earlier reforms. We weren’t sure that was going to be associated with the

Communist government initially, but that seems to be the direction

they’re headed. We’re very much aware, of course, that Belarus and

Turkmenistan remain extremely repressive states.

A third challenge is the area of social transition. We are contending with a health crisis, illustrated by falling life expectancies

in Eurasia, a fast growing HIV infection rate which is mainly

fueled by injecting drug use. In addition to most disturbing demographic trends in Eurasian countries such as Russia, there is the

problem of multidrug resistant TB rates in the region, which are

among the highest globally, and, in fact, are categorized as epidemic in proportion. These difficulties threaten the progress that

we have made in the economic and democratic transition areas,

and that’s a point to keep seriously in mind.

Fourth, corruption and trafficking in persons are important

crosscutting themes. The corruption index compiled by Freedom

House scores 17 Europe and Eurasia countries at five or higher, on

a scale where seven represents the worst possible level. As for trafficking in persons, as many as 25 percent of trafficking victims

worldwide come from Europe and Eurasia. We need to redouble our

efforts to get our recipients in the region to integrate into regional

and global organizations such as the European Union, NATO, and

the World Trade Organization. In the case of the European Union,

that means having our missions continue to work with host country

governments to meet EU accession requirements.

Now I want to say just a quick word about the foreign policy context for all of this. The Europe and Eurasia region remains extremely important to the United States. America’s most important

foreign policy and security interest in the region is still Russia, the

world’s second largest exporter of oil in 2002. The United States

needs Russia as a strong and reliable long-term partner in addressing issues of mutual and global importance such as nonproliferation, counterterrorism, and HIV/AIDS. Quite apart from development objectives are maintenance of connections with Russia at a

number of levels, including security and military, commercial, and

science just to name a few. This is vital to American foreign policy

understandings and interests.

And in conclusion, the committee’s invitation letter, Senator

Allen, asked us to testify about our strategy to promote freedom

and democracy in the region, and I think it’s imperative that our

work in democracy, as well as in other areas, stay the course deVerDate 11-MAY-2000 13:57 Oct 05, 2005 Jkt 000000 PO 00000 Frm 00141 Fmt 6633 Sfmt 6602 963433.SEN SFORELA1 PsN: SFORELA1
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1The Northern Tier consists of the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Slovakia, and Slovenia; Southeastern Europe, Albania, Bosnia-Herzegovina, Bulgaria, Croatia, Macedonia, Romania, and Serbia and Montenegro, in addition to the province of Kosovo;

and Eurasia, Armenia, Azerbaijan, Belarus, Georgia, Kazakhstan, the Kyrgyz Republic,

Moldova, Russia, Tajikistan, Turkmenistan, the Ukraine, and Uzbekistan.

spite the difficulty of the task and the occasional bumps along the

way. After a decade and a half working in the region, we are more

convinced than ever that premature disengagement can have enormous costs in a negative way long term. Many of our programs

have long gestation periods.

A case in point is indeed Ukraine. We spent a number of years

building up civil society, and a mature civil society together with

timely elections assistance were the key tools that the country’s

populace required to make a contribution to the Orange Revolution.

But in the end, it’s got to be noted that final victory can only be

secured by the will of the people, not by the assistance of international donors. We can, however, be a responsible supporter of the

aspirations of free people, and those who long for freedom.

Thank you, Mr. Chairman, I would ask that my full written testimony be included in the record, and I welcome the opportunity to

respond to questions. Thanks.

Senator ALLEN. Thank you, Administrator Hill, your entire statement will be made a part of the record.

[The prepared statement of Mr. Hill follows:]

PREPARED STATEMENT OF HON. KENT R. HILL, ASSISTANT ADMINISTRATOR FOR EU- ROPE AND EURASIA, U.S. AGENCY FOR INTERNATIONAL DEVELOPMENT, WASH- INGTON, DC

INTRODUCTION

Chairman Allen, distinguished members of the Committee on Foreign Relations,

thank you for the opportunity to testify on United States foreign assistance programs for the countries of Europe and Eurasia.

When the Berlin Wall fell in 1989 and the Soviet Union collapsed in late 1991,

the Europe and Eurasia region became a new frontier for the United States

Goverment. Your committee responded through the authorship of the Support for

East European Democracy (SEED) Act of 1989 and the Freedom for Russia and

Emerging Eurasian Democracies and Open Markets (FREEDOM) Support Act (FSA)

of 1992. From the inception of these acts, USAID has been the main federal agency

managing programs to promote democracy and human rights, to introduce and institutionalize a market economy, and to alleviate the social and humanitarian problems in the former Communist states of Europe and Eurasia. Our underlying objectives in the region have been and continue to be freedom, peace, prosperity, and regional stability.

Since we initiated work over a decade and a half ago, extraordinary progress has

been registered across the region, particularly in the democracy/governance and economic growth areas, though much remains to be done in some countries. Notable

achievements include (a) the reemergence of positive economic growth since 2000

after years of contraction, (b) Freedom House’s ranking of 19 of the former Communist states as free or partly free with a return to communism unlikely in most

countries, (c) Georgia’s ‘‘Rose’’ Revolution and Ukraine’s ‘‘Orange’’ Revolution, and

(d) the significant integration of a number of the region’s states into regional and

global organizations such as the World Trade Organization (WTO), European Union

(EU), and the North Atlantic Treaty Organization (NATO). In fact, performance has

been sufficiently good that we have graduated country programs for the eight Central and East Europe (CEE) Northern Tier countries, enabling the closure of the five

Missions that serviced these countries.1 Three more country programs and their attendant Missions will close over the next several years—Bulgaria, Croatia, and Romania.

Still, a number of challenges persist—in encouraging economic growth, developing

democracies and promoting respect for human rights, improving health, and increasing educational levels.

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2 National Energy Policy, pp. 8–12, Report of the National Energy Policy Development Group,

GPO; May 2001.

• Encouraging Economic Growth. Unemployment and the lack of opportunity

make a society vulnerable to extremism. A vibrant economy provides jobs and

incomes. It allows people to buy houses, farms, and shops, and gives them a

stake in the future. Job growth that benefits all regions and all ages, particularly the young, is vital to the long-term stability of our region. • Developing Democracies and Promoting Human Rights. The seeds of democratic

change are slow growing but can produce strong results over time—patient support for democratic institutions and human rights in Georgia and Ukraine gave

their citizens strong political voices. Support for the persistent voices of freedom

and democratic reform—civil society groups, democracy and human rights advocates and movements, and independent media—will prove decisive. • Improving Health. Collapsing populations, eroding life expectancies, and rising

rates of drug abuse and HIV/AIDS are too common in our region. To be viewed

as viable, post-Soviet States must ensure that basic health services are available to their people. Improving health status, therefore, is critical to political

stability and a significant challenge. • Increasing Educational Levels. Along with health care, educational attainment

was a bellwether of Soviet success. The erosion of educational levels is seen by

many as a symptom of state failure. Lack of educational training also leaves

youth ill-prepared to fill today’s job needs. Increasing educational attainment,

meeting current needs, is a significant challenge to our countries.

THE GEOPOLITICAL AND SECURITY CONTEXT

The E&E region continues to be of considerable foreign policy importance to the

United States. Countering authoritarianism, human rights violations, and economic

stagnation, which together provide fuel for domestic unrest, extremism of various

sorts, and international terrorism, is key to protecting U.S. interests in the region.

Since the September 11, 2001, attacks on the United States, the geopolitical and

security importance of the countries of Central Asia and the Caucasus has increased

dramatically. These states constitute the front line in helping to create stability in

a region vulnerable to extremism, drug trafficking, and terrorism. The Caspian region’s tremendous oil and gas resources add to its importance to the United States.

The proven oil reserves of just two states in the Caspian Sea basin, Kazakhstan and

Azerbaijan, are just slightly less than those of the United States. Also, Kazakhstan’s

Kashgan field is perhaps the largest petroleum find in 30 years.2

In the Southern Caucasus, the region’s significant Caspian energy reserves, unresolved ethnic and nationalist conflicts, and the threat of international terrorism, underscore the states’ geopolitical and security importance to the United States. Both

Azerbaijan and Georgia provide the routes for the planned Baku-Tbilisi-Ceyhan oil

pipeline and a South Caucasus Gas Pipeline, together which will bring the Caspian

region’s vast oil and gas resources to world markets. Also, an uneasy stalemate over

Nagorno-Karabakh exists between Armenia and Azerbaijan. In Georgia, separatist

movements in Abkhazia and South Ossetia threaten the integrity of the state internally, while the conflict in the neighboring Russian Republic of Chechnya places

pressure on regional stability. The simmering conflict in Chechnya also has been

tied to terrorist incidents, including the downing of two civilian airplanes, bombings

in the Moscow metro, and the tragic attack in Beslan, although not all Chechen

fighters are terrorists.

The internecine warfare accompanying the collapse of the former Socialist Federal

Republic of Yugoslavia in the 1990s not only caused humanitarian catastrophes but

also threatened the peaceful democratic and economic transitions in neighboring

post-Communist states. The United States and its NATO allies intervened with

military, diplomatic, humanitarian, and technical assistance to protect human

rights, establish peace, and lay the foundation for sustainable democracies and open

market economies. While marked progress has been made in the Balkans since the

Milosevic era of the 1990s, ethnic and nationalist tensions and human rights

abuses, combined with ongoing economic hardship and soaring unemployment, continue to drive instability, and the area remains an important geopolitical and security concern to the United States.

Trade with, and investment in, the E&E region are certain to benefit the United

States increasingly. From the natural resources sector to the industrial equipment

sector to the service sector and beyond, the United States is broadening its trade

relationships with the region. U.S. exports to the region totaled roughly $7.1 billion

in 2003 with direct investment adding to no less than $4 billion in that same year.

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3 National Energy Policy, pp. 8–12.

USAID’s work to combat corruption, promote enforcement of contract and other

commercial laws, help E&E countries join the WTO, and lay the foundations for the

private sector, have helped pave the way for American trade and investment.

Extremism threatens to destabilize several areas within the E&E region. In particular, we must monitor the role of political and radical Islam and the conditions

that permit Islamic extremism to flourish. USAID will continue to play a vital role

promoting democracy and respect for human rights in the region. Not only is this

the right thing to do, but it avoids adding fuel to the fire for any kind of extremism.

In the National Security Strategy of September 2002, development was officially

recognized for the first time as one of the three pillars of national security (along

with defense and diplomacy). This represents a profound new understanding of how

dangerous failed states are to the security of the United States and the rest of the

world, and how important development assistance is in dealing with failing and

failed states. We cannot ignore those regions in Southeastern Europe and Eurasia

struggling to escape the debilitating legacy of communism. Thus, the work of USAID

to root firmly democratic, economic, and social reforms in formerly communist, corruption-ridden Eastern Europe and the former Soviet Union, is central to United

States security.

Indeed, President Bush’s National Security Strategy already has yielded fruit in

Europe and Eurasia. E&E countries are becoming America’s allies. Bulgaria, Estonia, Latvia, Lithuania, Romania, Slovakia, and Slovenia joined NATO in March

2004; the Czech Republic, Hungary, and Poland had joined the Organization in

1999. The backing of the region’s states in the international war on terrorism and

of U.S. policy also has been strong. Indeed, 19 recipient countries in Europe and

Eurasia have been active supporters of Operation Iraqi Freedom, Operation Enduring Freedom, and/or the International Security Force in Afghanistan in 2004.

Finally, America’s most important foreign policy and security interest in the region is its relationship with Russia. The United States needs Russia as a strong,

reliable, democratic, long-term partner in addressing issues of mutual and global

importance such as nonproliferation, counterterrorism, and HIV/AIDS. Russia also

is an energy powerhouse. In 2000, it was the world’s second largest exporter of oil,

and it holds one-third of the world’s proven natural gas reserves.3 Quite apart from

development objectives, our maintenance of connections with Russia at a number of

levels, including security, military, commercial, and science, to name a few, is vital

to United States foreign policy interests.

RESOURCES

From the inception of the SEED and FSA accounts through fiscal year 2005, Congress has appropriated a total of $17.3 billion in assistance under both accounts to

the region. This excludes this year’s $60 million Ukraine supplemental appropriation. In coordination with the State Department’s Assistance Coordinator for Europe

and Eurasia (EUR/ACE), USAID has played a lead role in planning and implementing assistance programs for the E&E region. In fiscal year 2005—the last year

for which moneys have been appropriated, USAID administered the lion’s share of

both SEED and FSA moneys, 66 percent in the case of SEED and 67 percent for

FSA.

The fiscal year 2006 request, including $382 million for SEED and $482 million

for FSA, will be directed to those remaining gaps defined by the Bureau’s Monitoring Country Progress (MCP) system, taking into consideration the best judgment

of EUR/ACE, Mission, and Bureau staff on the recipient’s commitment, the likelihood of progress, and the need for continued investments.

JOINT STATE DEPARTMENT/USAID STRATEGIC PLAN

In order to make the new focus on development in the U.S. National Security

Strategy operational, the U.S. Department of State and USAID developed a Joint

Strategic Plan (August 2003). It identifies 4 strategic objectives, 12 subject areas,

and 13 priorities. USAID’s E&E Bureau focuses on mainly three subject areas under

the objective ‘‘Advance Sustainable Development and Global Interests.’’ These are:

• Economic prosperity and security;

• Democracy and human rights; and

• Social and environmental issues.

In addition, USAID programs in the E&E region advance the joint strategy’s subject areas of regional stability, international crime and drugs, humanitarian reVerDate 11-MAY-2000 13:57 Oct 05, 2005 Jkt 000000 PO 00000 Frm 00144 Fmt 6633 Sfmt 6621 963433.SEN SFORELA1 PsN: SFORELA1
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4The other joint strategic subject areas are: Counterterrorism, homeland security, weapons of

mass destruction, support of American citizens, and management and organizational excellence.

sponse, and public diplomacy.4 We promote regional stability through our conflict

resolution work—most of which takes place at the grassroots level—in the Balkans,

the Caucasus, and Central Asia, and, with Economic Support Funds, Cyprus and

Northern Ireland. Our work in helping to strengthen laws and judicial systems and

in promoting transparent and accountable public and private institutions together

which combat corruption contributes to minimizing the impact of international

crime and drugs on the United States and its citizens. In the unfortunate cases

when it has been necessary, we have provided humanitarian responses due to crises

in the Balkans, the Caucasus, and elsewhere. Also, through public outreach in Mission-level strategy development as well as training and exchange programs, our

Agency has been involved in public diplomacy and public affairs.

The priorities from the State-USAID strategic plan with high relevance in the

E&E region are:

• Democracy and economic freedom in countries in the region with significant

Muslim populations, • Alliances and partnerships, particularly the strengthening of (a) ties to NATO

and the European Union and (b) United States bilateral relationships with Russia and other E&E countries and allies in Asia and the Middle East, and • HIV/AIDS prevention, treatment, and care.

WHITE PAPER

USAID has produced a document ‘‘U.S. Foreign Aid: Meeting the Challenges of

the Twenty-First Century,’’ the so-called ‘‘White Paper’’ that provides the framework

for all its work. The core goals within the USAID ‘‘White Paper’’ are to (a) promote

transformational development consisting of sustained democratic, economic, and social change, (b) fortify fragile states, (c) support strategic states as determined by

the Department of State and the National Security Council, (d) provide for humanitarian help, and (e) address global and transnational issues and other special concerns, e.g., HIV/AIDS. While a number of E&E countries or entities can be classified

as fragile (Bosnia-Herzegovina, the Kyrgyz Republic, Serbia and Montenegro, and

Tajikistan) or strategic (Cyprus, Kazakhstan, Kosovo, Northern Ireland and the Republic of Ireland, Russia, Turkey, Turkmenistan, Ukraine, and Uzbekistan), the

greatest proportion of activities, even in fragile or strategic countries, are transformational development in nature. The White Paper also disaggregates countries

by income status (low income, middle income) and commitment to reform (weak,

fair, good, top).

RESULTS

USAID is pleased to report to Congress that those programs that we administer

are having a profound impact on the lives of the populaces of our recipient countries.

Economic Prosperity and Security

• In Azerbaijan, our program in agriculture has created over 35,000 jobs, working

with over 150 enterprises that have entered new markets. Also, a 100-member

Agro-lnput Dealers Association that we helped create is providing fertilizer,

seeds, and other agricultural chemicals to some 40,000 farmers through a network of dealerships associates. • While we have a number of credit programs in the region that are providing

for jobs, at the forefront are those for Russia. Under the credit programs that

we support, small and medium enterprises were provided last year over 51,100

loans worth $83 million. These loans created or sustained some 82,700 jobs by

enabling these enterprises to grow their businesses 200 to 300 percent on average. • To spur much-needed investment in Bulgaria that would provide for additional

jobs, we helped the country to promulgate a new Law on the Promotion of Investments, develop a National Investment Strategy, produce an ‘‘Invest Bulgaria 2004 Guidebook,’’ and promote the institutional development of the National Council for Economic Growth—now the leading body for public-private dialog and policy formulation. The end product is a share of foreign direct investment in GDP that is approaching 10 percent, the highest in Eastern Europe. • We have assisted in the establishment of a robust mortgage industry in

Kazakhstan, a development that is providing for much appreciated housing for

the country. Residential and mortgage lending surpassed $564 million last year,

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a $200 million increase from the preceding year, owing to the creation of the

Kazakhstan Mortgage Company that helped make housing more affordable.

• USAID provided business and trade advisory services to 81 companies in the

Kyrgyz Republic, producing portfolio growth in excess of $18 million that provided for sales increases of 76 percent and productivity hikes of 66 percent for

assisted enterprises.

• Major advances in business registration were achieved in Ukraine. Our program, active in more than 130 cities across the country, reached 70,000 enterprises via the hotline that was put in place, decreased the cost of business registration by 55 percent on average, reduced the time to obtain licenses and permits by about 50 percent, and lowered significantly the number of visits to government agencies, in addition to dropping corruption in the process by 84 percent.

• In the energy area, we helped introduce new energy laws in both Bulgaria and

Macedonia, privatize seven electricity distribution companies in Bulgaria, and

hike by $2.2 million collections by the state electricity entity in Georgia, among

other accomplishments.

Democracy & Governance

• Years of USAID democracy support contributed to the peaceful democratic transitions that displaced corrupt, semiauthoritarian regimes in both Georgia and

Ukraine. In both countries, USAID played a critical support role in fostering the

development and maturation of civil society groups that ultimately mobilized to

decry wide-scale electoral fraud. USAID also played an important role in helping civil society organizations to conduct necessary oversight over electoral processes. After fraudulent elections, this led eventually to elections which reflected

the will of the people.

• In Croatia, USAID support has led to the vibrant growth of service delivery and

issues-based advocacy NGOs, which in 2004 enabled the mobilization of 62,000

citizens in advocacy-related campaigns and the delivery of critical social services

to 37,000 of the country’s most vulnerable citizens.

• Through USAID assistance, the Macedonian Parliament increased transparency, conducting its first ever public hearings on key draft legislation that

resulted in positive legislative reforms. In addition, 24 members of Parliament

(MPs) opened new constituent offices, bringing to 60 the number of such members who hold regular meetings with the public.

• Over a dozen indigenous NGOs that have served as electoral process ‘‘watchdogs’’ in their own countries in Europe and Eurasia have begun to work together in observing elections in the region with USAID’s sponsorship. This organization, the European Network of Election Monitoring Organizations, fielded

approximately 1,000 monitors for the second and third rounds of the Ukranian

Presidential election and will send observer missions to the parliamentary and

Presidential elections in the Kyrgyz Republic.

• Throughout the region, independent media assisted by USAID and its partners

are forcing governments and politicians to answer difficult questions, are opening up the airwaves and newspapers to stories that reveal both crime and corruption, and are providing important information to improve the lives of people.

Social & Environmental Issues

• Generally speaking, USAID has helped (a) control the diphtheria epidemic in

Eurasia, (b) demonstrate internationally approved and cost-effective TB control

approaches, (c) offer women alternatives to abortion, (d) revolutionize care for

orphans and vulnerable children, (e) strengthen pension programs for retirees,

(f) improve the targeting of social benefits, and (g) make teaching methods more

effective.

• In Kazakhstan, where USAID has supported tuberculosis control efforts since

1998, TB deaths have decreased 41.6 percent between 1998 and 2003, and the

Centers for Disease Control calculates that the USAID-supported TB control

strategy has saved more than 20,000 lives during that time.

• In Romania, USAID pioneered community-based programs to reduce abandonment and institutionalization of children. The steady decline in the number of

children abandoned in institutions over the past decade—from over 100,000 to

just over 24,000—demonstrates increased effectiveness of community services

provided to vulnerable groups. In the past year alone, 11,300 more children received community services than the year before, bringing the total number in

community care to more than 76,800.

• In Ukraine, USAID’s Maternal and Infant Health Project has introduced evidence-based best practices for the care of mothers and their newborns. These

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practices have resulted in more rapid weight gain for mothers and their

newborns, the near elimination of newborns that become hypothermic after

birth (from 63 percent to near 0 percent), and an increase in ‘‘normal’’ deliveries

from 22 percent to 68 percent. Based on this success, numerous other health

care facilities have requested to be included in the project. In addition, USAID/

Ukraine reports that its family planning interventions have contributed to an

almost 50 percent reduction of the abortion rate over the last 5 years.

• USAID’s Healthy Russia 2020 program recently received endorsement from the

Ministry of Education for a family life and health education curriculum that is

expected to be used throughout the country—the first such curriculum in Russia.

THE USAID PROGRAM

USAID’s principal goal within the E&E region remains the establishment of functioning democracies that have open, market-oriented economic systems and responsive social safety nets. We will work to address the large disparities among E&E

countries that exist in progress toward economic and democratic reforms (see the

following chart). The eight countries of the European Northern Tier are well advanced in their transition to market-oriented democracies. Southeastern European

countries have been plagued by instability from ethnic conflict throughout much of

the 1990s and the disintegration of Yugoslavia. However, in recent years, reform

progress among these countries has been impressive. In contrast, reform progress

has lagged considerably in many Eurasian countries, particularly in democratization.

Assistance Area 1. Economic Prosperity and Security

Across the E&E region, per capita income in 2003 is only one-fourth the average

of advanced European economies, despite 5.2 percent annual economic growth since

year 2000. Among E&E countries, only the CEE Northern Tier has sustained

healthy annual rates of economic gowth over an extended period of time (averaging

4 percent since the mid-1990s). This has been sufficient to raise GDP in that subregion 20 percent above 1989 levels (please see the chart below). On the other hand,

in 2003, GDP in Southeastern Europe averaged about 10 percent below 1989 levels,

and, in Eurasia, it averaged 30 percent below. Still, since 1999, economic growth

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has been the highest in Eurasia, though driven by factors, some of which may not

last, including price increases for primary product exports (energy, metals, and cotton) and devaluations following the 1998 Russian financial crisis. Economic progress

in the western Balkans countries, as well, remains fragile, due to weak global integration (small export sectors and little foreign direct investment).

Several E&E countries view agriculture and related rural enterprise development

as potential sources of growth. However, rural economies in many of these countries

have been held back by relatively poor market infrastructure, excessive State controls, and lack of access to finance. These problems are exacerbated by agriculture

subsidies imposed by the developed world that undermine the international competitiveness of E&E agricultural products.

While the share of the economy controlled by the private sector has increased very

impressively in nearly all E&E countries (excluding Belarus, Bosnia-Herzegovina,

Serbia and Montenegro, Turkmenistan, and Uzbekistan), the international competitiveness of economies has shown little improvement, particularly so in Eurasia

where monopolistic markets often prevail. In general, private enterprise in the region is inadequately prepared to participate in the global economy. Old systems for

supplying inputs and for collecting and distributing products have collapsed, and

new ones have yet to emerge. Institutions that support and regulate markets are

weak.

Unemployment looms large as an issue, especially in Southeastern Europe where

rates on average exceeded 20 percent in 2003, including a whopping 42 percent in

Bosnia-Herzegovina. In Eurasia, while official unemployment rates are generally in

the single digits, the region is characterized by considerable underemployment.

Many workers in the region either have (a) poor-paying jobs in the informal sector

or (b) employment with state enterprises in which there is little actual work or pay.

Generally speaking, youth in both subregions are disproportionately affected.

More generally, E&E will target small- and medium-enterprise (SME) development across most of its recipient countries. Engines of economic growth, competitive

SMEs can increase productivity, create jobs, provide incomes for an emerging middle class, and spearhead integration into regional and global economic systems. To

stimulate SME growth, E&E will focus on (a) policy issues and (b) the development

of clusters providing for enhanced competitiveness through the forging of linkages

between economic agents and institutions. SME growth also depends on the adequacy and availability of appropriate labor skills. Hence, workforce development

programs may be pursued to make SMEs more productive and competitive.

An important aspect of SME development is country performance in agriculture.

As our recipients reform, we will increasingly move within the agricultural sector

from taking on policy issues to the development of markets, both internal and external. Within our market development work, competitiveness will increasingly emerge

as a thrust.

For selected SEED and FSA middle-income countries (Albania, Belarus, BosniaHerzegovina, Bulgaria, Croatia, Kazakhstan, Macedonia, Romania, Russia, and Serbia), a big push will be made to integrate them into global markets. These countries

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are better prepared to enter global markets. Hence, trade and investment promotion

will take precedence in these countries.

Most first stage economic reforms (liberalization of domestic prices, trade, and foreign exchange regimes and small-scale privatization) have been accomplished, except in the three Eurasian weak-performers (Tajikistan, Turkmenistan, and

Uzbekistan). Therefore, most remaining policy assistance will emphasize second

stage reforms that focus on building market-based institutional capacity and better

public governance.

For their part, commercial law and property rights adjudication, important keys

to the promotion of foreign investment, constitute complex issues that will be pursued across all our recipients, especially those recipients that possess a deep commitment to reform.

We also have much unfinished work in the energy sector. Energy is an extremely

important issue for E&E, and E&E Missions must remain engaged. Energy sectors

are large especially in our Eurasian recipients, owing to their significant petroleum

and natural gas sectors. Energy sectors also pose a major drain on government resources.

Until energy sectors are reformed and efficiency gains realized, governments will

not be able to devote the resources needed to address other critical problems, e.g.,

health and education. The deterioration of heating systems and the affordability of

heat to the poor remain major economic and social problems in some countries.

Assistance Area 2. Democracy and Human Rights

Although much of the region has not yet achieved the prosperity, peace, and security expected in the post-Soviet era, the level of personal freedom that exists today

is well beyond what millions in this region knew for decades, and people do not

want to lose these freedoms. For the most part (with the exception of Belarus,

Turkmenistan, and Uzbekistan), the totalitarian impulse to interfere with citizens’

private matters (beliefs, choice of work, travel, etc.) is no longer pervasive, Sadly,

however, among many of the states in Eurasia, a perceptible movement back toward

authoritarian patterns of political authority is being felt in a number of areas, including constraints on freedom of the press, restrictions on political activity and

competition, executive influence over judiciaries, and discrimination against minority religions. Significantly, Russia dropped in Freedom House’s rankings in its global survey of democratic freedoms from ‘‘partly free’’ to ‘‘not free’’ in 2004.

The remaining challenges facing democracy and governance are generally far

greater in Eurasia than in Southeastern Europe. Since the collapse of the Soviet

Union, democratic freedoms have generally stagnated in most of Eurasia, and the

gap between Europe and Eurasia in building democracy continues to widen (please

see the chart below)

Because democratic reforms are stalled or regressing in most countries in Eurasia

except Georgia and the Ukraine, most areas of assistance in democracy and human

rights will be emphasized in that region, including municipal governance, rule of

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5See Strengthening Education in the Muslim World, PPC, June 2003.

law, independent media, civil society including human rights advocacy, and political

party development and elections. Especially important in the coming year will be

assistance to support elections that meet OSCE standards in countries such as Azerbaijan, the Kyrgyz Republic, and Moldova, in addition to Macedonia in Southeastern

Europe. Southeastern Europe is relatively advanced in civil society and electoral

processes, so in that subregion the other forms of democracy and governance assistance will receive greater emphasis. As for states that are considered to be fragile,

an important theme of programs early on was ethnic and religious tolerance.

Ethnic Extremism and Islam

Ethnic and religious extremism is a major source of instability in several subregions within E&E. In particular, we need to encourage Islam to be a source of

stability, rather than instability, within the region. Several of our recipients’ governments actively discriminate against Islamic communities, a development that encourages radicalism. Diminution of the role that Islam plays in serving as a source

of instability can be best accomplished through encouraging economic, democratic,

and social development, since extremist behavior is often linked to socially, economically, and politically disenfranchised populations. We will consider (a) institutional

mechanisms that encourage all groups of citizens to feel that they are part of the

State and (b) specific educational and communication programs that promote the

discussion and advancement of democracy, religious freedom, and economic liberty

within the context of both secular and religious world views.5 USAID already has

active programs to reduce tensions between, or discrimination against, religious

groups in Kosovo, Macedonia, Uzbekistan, and elsewhere. E&E also will fund research to monitor such discrimination.

In addition, we are especially cognizant of the need to provide for meaningful employment opportunities in Islamic-majority countries and regions such as Albania,

Central Asia, and the North Caucasus. Absent political rights, jobs, and hope, segments of the countries’ communities are more vulnerable to extremist rhetoric and

may be drawn to radical Islamic elements and terrorism.

Assistance Area 3. Social and Environmental Issues

Early assumptions that Soviet health and education sectors and social safety nets

for vulnerable groups would survive and sustain the transition have often proven

false. Indeed, the social transition has produced very disappointing indicators, revealing widespread declines in many aspects of health and education, degradation

or elimination of social safety nets, and increased vulnerability of youth and other

social groups. The fact that the majority of people in many E&E countries, today,

are living less well materially than they did before the Soviet bloc crumbled threatens to undermine constituencies for economic and democratic reform in countries

where people fail to perceive benefits from those reforms.

The difference between the Southeastern European and Eurasian subregions in

health indicators demonstrates an especially alarming pattern of decline which is

summarized starkly by divergence in life expectancy (please refer to the chart

below). Life expectancy is rising in Southeastern Europe and falling in Eurasia.

Based on data for 2002—the latest available, the largest gender differences in life

expectancy worldwide also are found in Eurasian countries. Russian females with

a life expectancy of 72, for example, live 13 years longer than Russian males (59

years). In contrast, the spread is 6 years in Western Europe and 7 years in the European Northern Tier countries. In sum, while in 2002 life expectancies averaged

between 72 and 74 years in Southeastern Europe, they stood between 65 and 69

years in Eurasia. The rapid spread of infectious diseases combined with lifestyle behaviors and resultant diseases are contributing greatly to the health crisis in Eurasia.

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Major health risks or demographic pressures that threaten the sustainability of

reform include:

• Fast growing HIV rates, particularly in Russia, the Western NIS states

(Belarus, Moldova, and the Ukraine), and the Baltic countries (Estonia, Latvia,

and Lithuania);

• A tuberculosis (TB) epidemic that continues to soar and is exacerbated by increases in HIV/TB coinfection and Multi-Drug Resistant TB, such problems

being most salient in the Central Asian Republics (CARs), notably Kazakhstan

(the other CARs are the Kyrgyz Republic, Tajikistan, Turkmenistan, and

Uzbekistan);

• High infant and child mortality rates in the CARs and the Caucasus (Armenia,

Azerbaijan, and Georgia);

• Continued high rates of abortion and maternal morbidity in Azerbaijan, the

CARs, Georgia, Moldova, and Romania;

• Aging and shrinking populations combined with declining life expectancy in

Eurasia;

• The decline in the capacity of health finance and delivery systems to address

the evolving epidemiology and demographics;

• Cardiovascular and other noncommunicable diseases that account for threefourths of all deaths (many prematurely); and

• Little attention to disease prevention and continued risky behaviors that reduce

life expectancy.

The stock of human capital varies considerably across countries—highest in Slovenia (and the other European northern tier countries) and lowest in Tajikistan

(and in the remaining CARs and the Caucasus). Some indicators allow optimism

that the worst of the social deterioration already may have occurred. For example,

trends in real wages and, possibly, education expenditures and secondary school enrollment shares (the share of the population aged 15 to 18 that is attending secondary school) are slowly improving in a majority of E&E countries. Secondary

school enrollment shares had declined in Eurasian countries from 60–70 percent in

1989 to 30–40 percent in the early 2000s; declines, albeit not as great, also had

taken place in these same countries at the primary level.

Health will be an increasing concern for all E&E’s Missions, building upon USAID

experience to date. High abortion rates and low contraceptive rates throughout the

region require continued attention to reproductive health in most E&E countries.

E&E will focus on child survival and maternal health interventions in countries of

greatest need. The Caucasus countries and the CARs have the highest under-5 mortality rates in the transition region. Almost all our recipients are encountering difficulties with infectious diseases, including HIV/AIDS and tuberculosis (TB), and

HIV/AIDS and TB funds will be targeted in those countries where infection rates

for these diseases are highest, most notably Russia, Ukraine, and Central Asia.

Also, work in health systems and administration will be entertained principally in

those countries where there is commitment to reform, e.g., Albania and Uzbekistan,

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6The phrase ‘‘social capital’’ has been used in recent times by many scholars (e.g., James Coleman, Francis Fukuyama, Robert Putnam, etc.) and institutions (e.g., the European Bank for Reconstruction and Development, the International Monetary Fund, and the World Bank).

although it also could be pursued in other countries to build commitment and improve system efficiencies.

Especially through further collaboration with the World Bank and other donors,

education assistance to selected countries/entities in Eurasia (Azerbaijan,

Tajikistan, Turkmenistan, and Uzbekistan) and Southeastern Europe (Kosovo, Macedonia) has particularly high long-term potential. E&E will continue its existing

basic and secondary education program in Central Asia, with vocational education

an added emphasis in selected countries. Also, general university education in countries where E&E has already established a role, e.g., selected middle-income Southeastern European countries, will be supported, in addition to university-level business management education.

We will address social protection and labor issues. E&E also will sponsor workforce competitiveness studies that identify skills training and labor market reforms

required to spur economic growth. Finally, social sector reforms to deal with corruption will be an important element of E&E’s programs; we will seek to eliminate

rent-seeking in the delivery of services in both the health and education sectors.

CROSSCUTTING ASSISTANCE AREAS

While some of the most important USAID priorities do not easily fall into the

above three assistance areas, they are indispensable for achieving our basics goals,

including values and social capital, corruption, trafficking in persons, and conflict.

VALUES AND SOCIAL CAPITAL

USAID has always recognized that sustainable development is strongly supported

by widespread acceptance among the beneficiary population of certain values necessary to the fair and efficient functioning of the State and the economy. To provide

for values supportive of economic, democratic, and social development, E&E programs will more consistently seek ways to build social capital. The term ‘‘social capital’’ refers to the prevalent mindset that results in voluntary compliance with established laws, trust, cooperative behavior, and basic codes of conduct.6

Social capital has deteriorated significantly in the E&E region since the transition

began a decade and a half ago. Academic analysts, news media, and donors have

generally underestimated the degree to which weak social capital in the former Soviet Union and the Eastern Bloc has undermined efforts to promote democratic and

economic reform. Differences in the stock of social capital account for the pattern

across the E&E region in which countries that experienced a longer and deeper exposure to communism have shown a slower pace of reform in the post-Soviet era.

Our task is to seek ways to append a values and social capital enhancement dimension to existing programs. Likely involving more attention to youth, possible

program areas include:

• Values education, including the development of curricula in the area of character education. Materials could be gathered and disseminated which rely on indigenous historical, literary, religious, and political figures who embody the values that need to be cultivated such as integrity and honesty;

• Exchange programs and training exercises that promote ethnic and religious

tolerance;

• Media projects, both written and visual, which feature leadership and visionary

characteristics; and

• Activities that strengthen civil society relationships. Positive values will emerge

when citizens participate in civil society structures and see the benefits they

bring.

CORRUPTION

Corruption is endemic to much of the E&E region. The corruption index compiled

by Freedom House scores 17 E&E countries at 5 or higher on a scale where ‘‘7’’ represents the worst level. Recent surveys confirm that citizens view endemic corruption as one of the region’s most serious societal problems, ranking close behind poverty, political instability, and crime. In the presence of corruption, the Bureau’s

transition goals (democracy, economic, and social) have been slowed or blocked. In

sum, while programs directed specifically at reducing corruption may be undertaken, an orientation toward reducing corruption will run through numerous programs in countries where it is a widespread problem.

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7See Trafficking in Persons: The USAID Strategy for Response, February 2003.

The E&E strategic approach to addressing corruption promotes transparency, accountability, prevention, enforcement, and education. We are promoting transparency through our work to create open, participatory governments. We promote

accountability through support of (a) checks and balances amongst government

branches and from outside sources such as independent media, trade associations,

and political parties, (b) inspector general functions, and (c) the decentralization of

power to other layers of government. Our programs support prevention of corruption

through the systemic reform of institutions and laws to decrease opportunities and

incentives for rent-seeking behavior. USAID is working to promote enforcement

through the consistent application of effective standards and prohibitions. Finally,

USAID programs support educational efforts that point out the adverse consequences of corruption, the tangible benefits of reform, and the concrete potential

for positive change. Our approach to corruption also relies on USAID’s new agencywide Anti-corruption Strategy.

TRAFFICKING IN PERSONS (TIP)

TIP is a major issue in the E&E region; as many as 25 percent of trafficking victims worldwide come from the E&E region. The USG considers human trafficking

to be a multidimensional threat. It deprives people of their human rights and freedom; it is a global health risk; and it fuels growth of organized crime. Some of our

field Missions already address TIP through activities which strengthen local government, promote SME development, support advocacy groups, utilize media to sensitize potential victims and populations, emphasize the health-related needs of victims, and fortify the rule of law.

When targeting TIP, efforts on the part of the USG, including those of USAID,

should focus on the three ‘‘Ps,’’ namely Prevention, Protection, and Prosecution:

—Prevention of TIP through economic empowerment; crisis prevention; public education and awareness; capacity building of government, NGOs and the media;

and legal reform and implementation;

—Protection of victims through assistance for government and NGO referral services and protection of witnesses; and

—Prosecution of criminals through improved judicial coordination.7

Increasingly, we are expanding the anti-TIP paradigm to include the three ‘‘Rs,’’

consisting of rescue, removal, and reintegration of victims.

CONFLICT MANAGEMENT AND MITIGATION

In the wake of the collapse of the Soviet bloc, political and ethnic tensions have

risen and fueled bloody conflict in the name of national and ethnic liberation. For

example, between 1991 and 1995, over 300,000 people lost their lives in violence associated with the breakup of Yugoslavia. The E&E Bureau has integrated its conflict mitigation efforts within its work in each of the three transition subject areas.

In order to address conflict vulnerabilities, we encourage programming that implicitly builds social cohesion, communication, and understanding. This type of programming might include regional cooperation, the promotion of economic growth via

SME development, the empowerment of communities through the collective resolution of practical local issues, support for civil society advocacy actions, the engagement of idle youth, the decentralization of government for improved service delivery

at the local level, and the promotion of transparency by strengthening actors and

institutions related to the rule of law. Notable activities include tolerance projects

in both Bosnia-Herzegovina and Russia and the assessments for Kosovo and Serbia

and Montenegro led by the Agency’s Conflict Management and Mitigation Office.

THE MILLENNIUM CHALLENGE ACCOUNT (MCA)

Announced on March 14, 2002, by President Bush, the MCA is designed to provide additional assistance to countries that have met specific indicators related to

ruling justly, investing in their people, and encouraging economic freedom. With

strong bipartisan support, Congress authorized the Millennium Challenge Corporation (MCC) to administer the MCA and provided $1 billion in initial funding for fiscal year 2004. President Bush’s request for the MCA in fiscal year 2005 was $2.5

billion, of which Congress appropriated $1.5 billion. The President has pledged to

increase funding to $5 billion per annum in the future. These funds can be an important tool in helping leverage significant reforms.

The MCC, which administers the MCA and for which USAID Administrator

Natsios is a board member, met in May 2004 and identified 16 countries as eligible

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for MCA assistance, including Armenia and Georgia from the E&E region. The MCC

Board also approved a ‘‘Threshold Country’’ program which will be directed toward

a number of countries that have not met the requirements for MCA eligibility but

demonstrate significant commitment to meeting those requirements. From the E&E

region, the Board selected Albania to be eligible for threshold country status. New

candidacy criteria for fiscal year 2006 may provide MCA-eligibility and threshold

status for more E&E countries.

All USAID Missions in the E&E region will work to encourage our recipient countries to focus on MCA’s criteria of ruling justly, encouraging economic freedom, and

investing in people.

PHASE OUT OF USG ASSISTANCE

The USG Goverment always has planned that assistance to the region would be

temporary, lasting only long enough to ensure successful transition to sustainable,

market-oriented democracies with responsive social safety nets. The performance of

Bulgaria and Romania in fiscal year 2002, the year the two countries were notified

that they would be accepted into NATO, is used as thresholds, representing sufficient transition performance to phase out SEED and FSA assistance. Accession to

NATO demonstrated that the two countries had progressed to the point that they

had reached the irreversible path to becoming market-oriented democracies. USAID/

E&E’s MCP system provided the analytical base for systematic interagency review

led by EUR/ACE to establish timeframes for the phase out of USG assistance in all

our recipients. Through this interagency, analytical process, phase-out dates have

been determined for each of the economic, democratic, social, and law enforcement

sectors for our Southeastern European and Eurasian recipient countries. These

phase-out dates have been identified for planning purposes and do not convey any

commitment to funding levels or entitlement to assistance until the established

dates. USAID/E&E’s Bureau also uses these data to adjust strategies to address remaining gaps and maximize the impact of USG assistance.

Over the next several years, three country programs will graduate and their Missions will close, including Bulgaria, Croatia, and Romania. In addition, we plan to

phase out of the economic sectors in Kazakhstan, Russia, and Ukraine also over the

next several years. These decisions all assume that performance continues as projected. Across all the region’s countries, E&E will monitor closely transition indicators using the Bureau’s MCP system as well as Mission and Bureau staff understanding of problems, progress, and prospects in each sector.

CYPRUS, NORTHERN IRELAND AND THE REPUBLIC OF IRELAND, AND TURKEY

The E&E Bureau also administers Economic Support Fund (ESF) allocations for

Cyprus, Northern Ireland and the Republic of Ireland, and Turkey, and the fiscal

year 2006 request includes $42 million in such allocations. Turkey, as a front-line

state against the war on terrorism, will benefit from $10 million under the fiscal

year 2006 request; Cyprus, $20 million; and Northern Ireland and the Republic of

Ireland, $12 million. For fiscal year 2005, $13.4 million had been appropriated for

Cyprus; $21.8 million for Northern Ireland and the Republic of Ireland; and zero

for Turkey. Turkey, however, had received $10 million in fiscal year 2004, and these

moneys funded activities, including (a) support for a World Bank prenatal care and

education activity under the Bank’s Social Risk Mitigation Project; (b) an International Office of Migration antitrafficking activity; and (c) a business partnering

program implemented through the American Chamber of Commerce. As for Cyprus

and Northern Ireland, past allocations have supported reconciliation and conflict

resolution amongst warring factions. For their part, moneys that Cyprus received

in the past also have been funding partnership activities for economic growth and

a scholarship program. An important intermediary for the Ireland moneys is the

International Fund for Ireland.

CONCLUSIONS

We are proud of our successes in the E&E region, a region that remains of considerable foreign policy importance to the United States. Our programs, which are integrated into the frameworks set by the National Security Strategy, the Joint State/

USAID strategy, and the USAID ‘‘White Paper,’’ have permitted us, since the fall

of the Iron Curtain, to make tremendous strides in furthering democracy, installing

market-based economic systems, and tending to the social and humanitarian needs

of the former Communist states of Europe and Eurasia. We are very aware that

there is much left to be done. In particular, the post-Soviet States of Eurasia appear

to have a long transition path ahead of them. As new priorities emerge in other

parts of the world, I would urge the distinguished members of the Senate Foreign

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Relations Committee to support our Budget and Operating Expense requests that

are focused, for the most part, on countries that demonstrate a commitment to

sound development principles and democracy. Allocations at such levels would help

us to achieve our overriding goal in the region—the establishment of market-oriented democracies with responsible social safety nets. Our very close working relationships with the State Department Coordinator would allow us to program resources in a way that would help us meet that goal.

Finally, it is imperative that our work stay the course, despite the difficulty of

the task and the occasional bumps along the way. After a decade and a half, working in the region, we have learned that premature disengagement can have enormous costs in the long run. Many of our programs have long gestation periods. A

case in point is Ukraine. We spent a number of years building up civil society, and

a mature civil society together with timely elections assistance were the key tools

that the country’s populace required to carry out the largely successful ‘‘Orange’’

Revolution.

In the end, final victory can only be secured by the will of the people, not by the

assistance of international donors. We can, however, be a responsible supporter of

the aspirations of free people and those that long for freedom.

Thank you, Mr. Chairman.

Senator ALLEN. I very much enjoyed looking at this statement

and I recommend its reading to many others. We can talk in theory

and principles, and that’s important, but one needs to be guided by

postulates of life principles and philosophy. Where I’m impressed

by you and your agency is you take from different groups ratings,

metrics, measurement. Maybe that’s from the sports I’ve grown up

with, you don’t just play and think you’re winning, you either are

or you’re not, that’s why you have wins and losses, and play to win.

It is very interesting the various charts that you have in your

testimony that will be made part of the record. You look on a chart

economic reforms on one leg and democratic reforms on the other

leg, and how the European Union, of course, is at the highest; the

European Union, fifteen. Very close to them are Hungary and Poland, Estonia, Latvia, Lithuania, Slovenia, Slovakia, and the Czech

Republic, and so they’re making great progress, you see that. Then

the next group is Bulgaria, Croatia, Romania, Macedonia, Bosnia

and Servia, Montenegro, then Georgia and Ukraine in the third

and furthest down as you went through these various gradations.

That’s a very interesting chart.

Then the next chart is what’s the gross domestic product of certain areas, the ones with greater freedom have greater prosperity.

When they have those economic and democratic reforms, which

means it’s good for the people, greater hope, greater opportunity

and also it charts in with the Northern Tier C.E.E., versus Southeastern versus Eurasia, and interestingly, and that’s on the democratic freedoms front.

Then you look at life expectancy at birth, so it’s not just hope and

opportunities, it’s actually a healthier life that comes with greater

freedoms and greater economic opportunities. In the Northern Tier

life expectancy at birth has increased from it looks like about 71

now to 73 in just a little over 10 years, Southeastern Europe stayed

about the same and picked up just about the time Southeastern

Europe was picking up there. Now Eurasia, not including Russia,

actually life expectancy has gone down from about 70 to 67, Eurasia is also down from where it was in 1989.

So these sort of things, and charts and graphs which are based

on objective facts, give us an idea and a comfort that yes, these

ideas are not just theory and they’re not just platitudes, it’s not

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academia or elected officials espousing those wonderful Jeffersonian principles, they actually work and have a positive impact on

peoples’ lives in the real world. I appreciate the way you work, and

this is something, I think is helpful to those of us who, when we’re

spending the taxpayers money, want to be able to show that there’s

an impact, and it’s not just, ‘‘Gosh, don’t we feel good by spending

money?’’ Go ahead, Secretary Hill.

Mr. HILL. Yes, Mr. Chairman, I’d like to add one point to your

observations, I’m pleased that the charts are helpful to you. We actually developed those at USAID 8 or 9 years ago, and we did it

for two reasons: The first reason was we wanted a rational way to

actually tell when a country was approaching a time when we

could phase out or lower assistance, but we’ve discovered that

there’s been a second use of the charts that’s been very helpful.

Sometimes when Tom and I are traveling in that part of the

world, we meet with a Prime Minister, or Minister of the Economy,

we’ll simply take out one of those charts, if we’re in Central Asia

for example, and put it down on the table, hand it to the Minister

and say, ‘‘This is where your country is in relation to your neighboring countries.’’ And sometimes when they want to argue with us

about what we have to say, when we show them the empirical facts

that come from international agencies like the World Bank, or

Freedom House, or the European Bank for Reconstruction and Development, they have to take seriously that they are lagging. And

if you can also make a connection between the lack of democratic

developments and the lack of economic development, it gets their

attention, so we’ll often leave the chart with them as something to

think about. It sometimes seems to help.

Senator ALLEN. It also gives them a sense of competition that,

while these other countries are doing better, especially if you have

neighboring countries. I know the Heritage Foundation has their

Freedom Index, and a lot of these will, of course, to the extent especially these emerging democracies want to get investment. Romania, for example, is happy that Smithfield has invested in Romania,

but to the extent that they’re trying to get more investment in Poland or any of these other countries, it does help to have some objective way you can say, ‘‘Hey, this is a good place to do business,

here’s someone else saying it. It’s not just the economic development promoters saying, ‘Gosh this is the best country.’ ’’ So, there

are a variety of ways that these and other matrixes or measurements will make things better there.

Let me ask you, Mr. Hill, about Russia. Because you look at this

and you see where Russia is, not where it ought to be. They have

the resources, they have capability, the intelligence of a population

that should not be where they are in every one of these charts. No

matter whether it’s life expectancy, economic reforms, freedom reforms, and so forth, they have been backsliding by most objective

measures on democracy in a variety of forms. I just want to know

if you’re discouraged by it, what’s the future of assistance programs

in Russia, how long will it be appropriate for us to keep helping

Russia while they’re acting the way they are presently. And what

will USAID do to ensure that the key connections stay in place to

prevent even further strained relations?

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Mr. HILL. It’s a very interesting question, I remember 14 years

ago my wife and I and our two children were living in Moscow in

1991 when the hammer and sickle flag came down over the Kremlin, and the Soviet Union ceased to exist, and there was an atmosphere of heady optimism; there was a freedom of conscience law

that was passed that met international standards, everybody was

enthusiastic, and after living there for 7 months and looking back,

it’s clear that in some ways that was the high point with respect

to the freedom index. If you look at the freedom measures from

that time on, they started to go down.

And yet, I would resist being too pessimistic about the future of

Russia. My academic teeth were cut on Russia and the Soviet

Union, and I can’t forget where they were long before Glasnost and

Perestroika and what has happened, and even though they have

moved backward in many indices, they’re certainly not where they

were in the fifties or the sixties or even the 1970s. There are forces

that have been unleashed, not the least of which is an expanding

middle class, and if history teaches us anything, it’s that if the economic middle class grows, then in time it can create political pressures that are difficult to control for those who would otherwise

like to ‘‘manage democracy,’’ as the Russians sometimes say. They

find it difficult to do so.

I think what’s called for in looking at Russia is long view, a patient view, continuing doing things that make sense, continue our

democracy programs, continue our exchanges. I think Mr. Bradtke

was absolutely right. The key to a lot of what happens in these

countries is the extent to which we can have exchanges, et cetera,

and so although I’m disappointed that there hasn’t been progress

and that there’s even been some regression, I still think we’re on

the right course. I think the game is far from over, and I think the

worse thing that we could do is lose hope, because I think there

are many positive signs as well, but we’re going to have to be patient, it’s going to take some time.

Senator ALLEN. Well, we will be patient. I know the President

wants to be, but the reality is when you see a country like Russia,

with all the resources they have, and you see where they are on

every one of these objective measurements, then you compare it to

a country, not even a bigger country like Poland. You compare it

to Estonia or Lithuania. Granted they have a sea port, so does Russia, maybe not as quite a warm water. The reality here is these

very small countries, the Czech Republic, Slovakia, no where near

the capabilities as far as mass and resources and population, and

here they are, pretty well integrated into Western Europe standards, and then some as far as assistance in some of the military

actions, even more assistance in that regard.

It’s a disappointment to me, there’s just no reason why they

should be this way. I do think the Russian people deserve better,

they have the capabilities innately, as well as resourcefully, so to

speak, in their country.

Let me ask you, Secretary Bradtke, one of the things, maybe Mr.

Hill will want to answer it as well. As far as Russia is concerned,

one of the things I have had a great concern with is the theft of

intellectual property. Russia’s one of those, China’s awful on this

and so are some other countries, but Russia is one of the key violaVerDate 11-MAY-2000 13:57 Oct 05, 2005 Jkt 000000 PO 00000 Frm 00157 Fmt 6633 Sfmt 6602 963433.SEN SFORELA1 PsN: SFORELA1
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tors of our intellectual property rights. How much funding do you

know, and this is a larger issue than just Eurasia and Europe. But

how much funding is the administration proposing to combat the

problem of intellectual property violations, so that countries, (A)

understand what it is, and (B) make sure their judges and prosecutors actually enforce such laws? It is taking, literally, billions of

dollars out of our economy from the creativity and ingenuity of

American technology as well as some of our artists, so to speak, in

the motion picture industry, but also in a lot of intellectual property, computer software, and programs and systems.

Mr. BRADTKE. You’re correct, Senator, this is a problem in Russia, but it’s a problem in many other countries as well, and our efforts have focused on both ensuring that countries have modern intellectual property laws, because given the rapid development of

technology and other elements, it does require updating these laws,

and some of this is very complicated, difficult work.

The second path is to make sure these laws are enforced, and

again for many of the countries in transition this is also a major

challenge, to have their legal systems operating effectively, law enforcement systems operate effectively here.

Now, in the case of Russia, we have also made this an element

of our high-level dialog with the Russian Government, to make

sure the Russian Government understands the importance of this

issue and the need to protect American intellectual property. We

have, in addition to the high-level exchanges on this subject, a

working group on intellectual property, that met in October of last

year, that had a video conference in February of this year, and will

probably meet again, soon, to discuss how we can work together on

this issue.

Now, specifically in terms of assistance, I know that in the fiscal

year 2004, we had a program together with the Russians, designed

to train judges, prosecutors, people who are involved in implementing the laws that Russia has to make sure that these laws are

carried out effectively and that they’re trained to carry out these

laws. Similar program in 2005 and we will continue these efforts

in 2006 as well. I would also mention we’re working with Ukraine

on this issue. The Ukrainians need some help in developing their

own intellectual property laws, so some of our assistance to the

Ukraine will be going into this area as well.

Senator ALLEN. As far as Russia’s concerned, are there any objective measurements by which we can determine whether what we’ve

been doing in the last, since 2004, having an impact? Are they

prosecuting, or has there been a diminution in the amount of violations of intellectual property rights or law?

Mr. BRADTKE. I can only give you my impressionistic response

that this remains a serious problem, that we think there’s a greater awareness on the part of the Russian Government of the nature

of the problem, but I couldn’t point to statistics that suggest that

these efforts have had the kind of results that we’ve hoped up to

this point.

Senator ALLEN. So, at this point we’re only getting a sense of

things, do you have a sense that they consider this serious? Or do

they just consider that you all are charging too much for this property?

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Mr. BRADTKE. Well, I think that your point was correct, it’s not

just do they take it seriously, is something being done to stop the

theft of intellectual property, and this is an issue that we’ll be looking at extremely closely in the next couple of months to see what

further measures we might have to take.

Senator ALLEN. Well, I think it’s going to be very important, not

just in Russia, but throughout the world, and you can count on me

riding hard on that one, on that issue, because it’s very important.

Another thing, Mr. Hill brought this up, no, maybe it was you,

Mr. Bradtke, was talking about the student exchanges or the exchanges back and forth, which I think is very important, not just

with Europe and Eurasia, Eastern Europe, but generally speaking,

throughout the world. One thing that I’ve heard from business interests and business leaders in my home, Commonwealth of Virginia, is that it’s very difficult to get visas for skilled workers. I

also hear from colleges and universities the difficulties of getting

student visas. I well understand the importance of security and

background checks to make sure that those wanting to enter this

country are clean, they’re not criminals, they’re not in any way

aligned with any terrorist organization. But the length of time for

some of these visas is harming business, to some extent, tourism,

and it’s also harming having workers come in as well as students.

In my view I’d like these students to stay here if they’re coming

to our engineering schools, because we need more engineers. I’d

like to see more native-born Americans going to engineering

schools, but to the extent that we can do that, I think that’s good

for relations, they understand our country better, what it means to

be an American, what are those principles we believe in actually

at work. If they do go back to their countries they end up being

appreciative of this country. And if they don’t, and they come to

this country, clearly many of them, if not all, especially those who

are getting post-graduate degrees clearly can be contributing members of our economy and our society.

Are there any plans or initiatives to not only reduce these delays

and increase the number of visas for the workers, but also, just get

this visa processing done in a more expeditious way, cognizant of

the need for security. It seems to me that there are programs, and

what the European Union is doing in some of their efforts to make

this visa process much, much faster.

Mr. BRADTKE. We certainly have been working hard to achieve

the right balance between having America be open to all the contributions that students and other visitors make to this country,

both economic and social, and the security requirements that we

saw so dramatically on September 11. I think we’ve made some

progress here. I would be happy to take back your points to my colleague, Assistant Secretary Maura Harty, who’s in charge of consular affairs.

I know from my own conversations with her that we have made

progress in this area, particularly in the case of visas for students

who come here for long-term programs, who were previously required to leave the country and then reapply for visas and come

back. We now have a better system in place, so that that requirement is no longer in many cases, required. So again, we are aware

of this problem, we do want, as Secretary Rice has made clear, for

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the United States to be an open country, it’s one of the great

strengths of our society.

We need to balance that with our security requirements, and as

I say, I think over the past year or so we have made progress in

trying to come up with process and procedures that are less cumbersome that enables students to come to this country for extended

courses of study. I don’t know the current numbers, my sense is

again that these numbers show some improvements in this area.

Senator ALLEN. I hope you recognize we do still need to improve.

You may say it has gotten a little bit better recently, it does need

to improve, and I look forward to working with you all. It is a

major concern and it’s one that I think, when one looks at those

who were involved in 9/11 attacks and one of the most amazing

things to me is what information we were getting in briefing 5 days

afterward and what everyone knew about all 19 of these hijackers

who crashed into the Pentagon, the New York towers, and the field

in Pennsylvania. I was thinking, the key to this is getting a system

where the consulates are talking with defense intelligence, the CIA,

the FBI, and when they get in this country, make sure our folks

in this country know what the consulates and the CIA and defense

intelligence and immigration all know. A lot of that is a question

of technology that shares that information, so (A) they don’t get

into this country, and (B) if somebody gets into this country you

know where in the heck they are. I’m not going to rehash all of

that, but regardless there are ways to improve it and I hope to

work with you on it.

Let me bring up another area, and it has to do with this war on

terror, and looking at the support we’ve gotten from Central European countries, the more recent countries that have gotten into

NATO and the European Union. I realize this is mostly a Department of Defense decision, but I’d be interested to know if the State

Department sees any strategic value in shifting a portion of our

U.S. military assets or capabilities to locations and regions that are

closer to the threats. In other words, to the Black Sea area. We’re

going to have a hearing on the Black Sea area fairly soon, and the

Black Sea, it would seem to me since we are using some of the facilities of the Black Sea for transport into the Middle East, it would

seem to me a great location for our equipment and for our troops

to, at least, be temporarily based or have those capabilities.

Does the State Department have any view on how, while that is

military operational asset management issue, do you see any benefits diplomatically, let’s say, and strategically in addition to militarily, in making such an investment?

Mr. BRADTKE. Mr. Chairman, we have been working with our colleagues at the Pentagon closely on this issue. The approach that

the President has directed us to take is to look for ways to have

forces in Europe that are more suited to the current threats that

we face. We no longer face a threat of Soviet invasion across Central Europe, so that having large numbers of heavy forces in Germany is not a requirement any more.

One of the things we have been looking at is ways of trying to

move some of our forces to other parts of Europe; to parts that are

closer to areas that might be threatened, and one thing I would

say, though, is that the approach here is to look at possibilities not

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for recreating the kind of facilities we have in Germany, necessarily, not with large numbers of permanently stationed forces,

with family members and a huge infrastructure.

What we’re looking at as we go down this road is having potentially rotational forces that might come and train in some of the

countries of Southeastern Europe. There might be prepositioned

equipment in these countries, so the troops could come in, fall on

the equipment and then train on that equipment. So this is the

thinking that we have now. We are consulting with these governments, including the German Government, because this is going to

mean a reduction in the number of our forces in Germany. This is

an ongoing process. We have a dialog, as I say, with countries like

Romania and Bulgaria about our ideas. There are still final decisions that the Pentagon will have to make, there are budgetary

issues that are very important for my colleagues at the Pentagon

that they will have to address, but we are looking closely at ways

we can have a force structure in Europe that is lighter, that is

more mobile, that is potentially located closer to some of the areas

that we perceive threats as coming from.

Senator ALLEN. Thank you, Mr. Secretary, I can tell you’re wellconversed on that opportunity. Let me finish up with one question,

either one of you can answer this. I think it is an example of something positive, some of these other things are going to be outgoing

concerns which I think are achievable, some are just logistical

issues. I just wanted to ask you, going through, again, going

through the charts, here you have United States assistance, we’ve

had helping countries that were newly admitted to NATO in 2004,

countries like Bulgaria, Romania, Lithuania, Estonia, Latvia, Slovenia, and Slovakia, all of them doing very well. We helped them

working to restructure and also modernize their militaries and implement democratic, civilian and military relations, how is our, this

is a great leading question, but it’s a success. I’d like for either of

you, or both of you, if you so desire, to say how has United States

assistance helped these countries. Not just in their democracy, but

in their modernizing their militaries, restructuring them from the

way they were in the past to where they’re moving now? Also,

these countries that I’ve just listed off, they all have been, maybe

not like Australia or Great Britain or Italy, but they don’t have the

economies of the United States, Great Britain, Australia, the Netherlands, and Italy, but they have made a disproportionately strong

effort in assisting us in the war on terror, including of course, in

Iraq, so how has our assistance helped them?

Mr. BRADTKE. If I could start out and then I’ll ask my colleague,

Kent, to add a few words. The last time I appeared before you, Senator, was to testify about the enlargement of NATO, when the Senate was considering providing its advice and consent to the changes

in the NATO treaty that had to be made to bring these seven countries into NATO. So this is an issue that I’ve followed very closely,

and it is a great source of satisfaction to me, and I think it should

be to the Senate as well, that all seven of these countries have provided important assistance, as you say, within their means and capabilities. But that as we look at Afghanistan, for example, all

seven of the new NATO countries are participating on the ground,

with soldiers, either in Operation Enduring Freedom, or in the

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NATO operation ISAF, the International Security Assistance Force.

All seven of them are there with boots on the ground, and some

of them have troops in both operations.

If you look at Iraq, all seven countries are contributing in one

way or another to the NATO training mission, which we set up last

year at the Istanbul summit. So again, all seven countries contributing one way or the other, financially in some cases or with troops

and trainers as part of the NATO training mission.

Senator ALLEN. Or equipment.

Mr. BRADTKE. And some of them are also providing equipment.

I was told by one of my colleagues in the military what important

assistance was provided for the elections, when one the seven countries that I think probably doesn’t want its name mentioned here

in an open session, but provided some AK–47s that were immediately made available to the Iraqi security forces to help secure

polling places. And again, six of the seven countries have actual

troops on the ground, again participating in military operations in

Iraq. So we’ve really seen a very strong support from these countries politically and militarily, and our assistance has helped get

them to the point where they can do this.

There are continuing assistance needs, there needs to continue

the process of full interoperability, it’s so important for us to be

able to have them with us side by side. There’s continuing need for

assistance to help in their defense reforms, and because their operational requirements have drained some of the resources that they

were intending to spend on modernization, they do need help in

this period ahead. And that’s why we have requested in our 2006

budget, but again, I think in terms of the contributions they’re

making, I think we can all take great satisfaction in the support

that was provided for bringing these countries into NATO.

Senator Allen. Thank you, Mr Secretary.

Mr. HILL. Between 1989 and today, we’ve expended about $17

billion in FSA and SEED funding, and if the question were posed

‘‘What has the United States gotten for that $17 billion?’’, the results would really be quite startling. If you look at the numbers of

those countries that have successfully managed to make the transition from Communist, centrally planned nondemocratic states, to

democratic states, it’s really quite amazing. To be sure, the further

south you go in Eastern Europe and the further you go toward the

Russian far east, the more difficult the task. But still the process

is incredible, and if you compare that $17 billion to the size of the

Defense Department, as important as that is, it is a very small percentage of the allocations that we put into the military, and the

truth is, that what the first administration of George W. Bush

demonstrated conclusively, and the 2002 new National Security

Strategy made absolutely clear, that it was going to be fundamental in his thinking, in this administration’s thinking about foreign policy, that no longer would foreign policy be viewed primarily

as just defense and diplomacy. There really was going to be a third

‘‘D,’’ and it was going to be development and the argumentation.

The rationale behind that and the national security strategy stated

that fragile states are as dangerous to the United States as are

powerful military states. Conclusion: If there are fragile states and

they can be helped to become democratic or economically prosVerDate 11-MAY-2000 13:57 Oct 05, 2005 Jkt 000000 PO 00000 Frm 00162 Fmt 6633 Sfmt 6602 963433.SEN SFORELA1 PsN: SFORELA1
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perous, the possibility of them becoming a real threat to the United

States, whether it’s Afghanistan or Sudan or whoever it is, go down

tremendously. And the conclusion, of course, to all of this is that

we know that wars are immeasurably more expensive in terms of

dollars and suffering, than the development required to make wars

more unlikely.

I was trained as a historian, and the one thing that historians

say about the 19th and 20th century development of democracies

is, that if they are democracies, and they’re genuinely democracies,

they almost never go to war with each other. There’s a connection.

And so the investment in development is one of the very best

things we can do to ensure our own national security, and I guess

it’s time for me to stop.

Senator ALLEN. We’ve got to get the energy bill passed.

Mr. HILL. I think it works. Maybe the electricity doesn’t, but the

foreign assistance does.

Senator ALLEN. Has our court reporter been able to transcribe

the words from Administrator Hill, were you able to get those? I

think that we are, we’re past 4 o’clock, we are to adjourn, those are

perfect words to end on. It is important to look at the past, I majored in history as well, and I think one learns from history, and

it doesn’t have to be back to the days of the Magna Carta, we can

look at how the advancement of freedom, that gravity of freedom

and the quest of human beings wanting to control their own destiny, have a say in their public servants, as well as the importance

of prosperity or opportunity or development as you mentioned, Administrator Hill, is very important, and it’s not just in the Central

European or Eastern European countries, it’s going to be important

also in Palestine as hopefully that ray of hope will brighten up like

this room finally has once again. But I want to thank both you, Administrator Hill and Secretary Bradtke for your testimony here

today, thank you for your leadership, and thank you for standing

strong for freedom.

[Whereupon, at 4:05 p.m., the hearing was adjourned.]

ADDITIONAL QUESTIONS AND ANSWERS SUBMITTED FOR THE RECORD

RESPONSES OF DEPUTY ASSISTANT SECRETARY DONALD CAMP TO QUESTIONS

SUBMITTED FOR THE RECORD BY SENATOR JOSEPH BIDEN

Question. The administration states that aid to Nepal is ‘‘under review,’’ yet it has

had more than a month for such review since King Gyanendra’s seizure of full executive power on February 1. During this period, the governments of India and the

United Kingdom have suspended their military aid to Nepal, and the World Bank

has suspended its budgetary support.

(a) How much time will the administration’s review require, and why has it already taken so much longer than the review the two nations with whom our policies

toward Nepal are closely coordinated?

(b) Why do the actions of the King on February 1 not trigger the provision of section 508 of the Foreign Appropriations Act, which prohibits aid to the government

of a country whose ‘‘duly elected head of government is deposed by decree or military coup?’’ I understand that the theory may be that the duly elected head of government had been deposed in 2002, and was serving as an appointed leader in 2005.

If that is the theory, why then, was section 508 not triggered in 2002?

Answer. (a) We continue to work closely with the Government of India and the

United Kingdom. In considering the issue of security assistance, we are very aware

of the trade-off between the military risk in cutting off aid with the political risk

should there be no resolution of the current crisis between the King and the parties.

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We continue to review our assistance on a case-by-case basis, examining the best

ways to encourage a restoration of Nepal’s democratic institutions while avoiding

steps that could lead to a Maoist takeover.

(b) The King’s dismissal of Prime Minister Deuba in September 2002 was the culmination of a series of events that began the preceding May, when the Prime Minister recommended to the King that Parliament be dissolved and new elections

scheduled. The King did so. In late September both ruling and opposition parties

agreed that, due to continuing Maoist attacks, elections could not be held as scheduled. Prime Minister Deuba accordingly asked the King to postpone the elections.

The King did so, and at the same time dismissed the Prime Minister for failing to

ensure that elections could be held within the period specified in the constitution.

The King acted pursuant to Article 127 of the Constitution, which provides that

‘‘[i]f any difficulty arises in connection with the implementation of this Constitution,

His Majesty may issue necessary orders to remove such difficulty and such Orders

shall be laid before Parliament.’’ While there was no Parliament before which the

King’s order could be laid, we were unable to conclude, under the circumstances,

that the King’s actions were sufficiently at variance with the Nepalese constitution

to raise a serious question under section 508.

RESPONSE OF AMBASSADOR MICHAEL RANNEBERGER TO QUESTION SUBMITTED FOR

THE RECORD BY SENATOR LINCOLN CHAFEE

Question. Two years ago I was involved in the effort to secure money for Liberia

as it began its transition from the rule of Charles Taylor. I understand that $75

million has been requested for Liberia for 2006. Is this funding sufficient to address

the needs there?

I also have a few questions about the elections coming up in October. Will everything be ready for these elections to be successful? Beyond these elections, which

will be a positive first step, what is the administration’s vision for the United States

role in assisting Liberia? It seems that while much progress has been made, there

remains much to do to strengthen Liberia’s transition to democracy. Given our historical and current ties to Liberia, I would hope we would continue to play a strong

role in helping this nation.

Answer. Thanks to strong congressional support in fiscal years 2004 and 2005, the

United States has been able to play the leading role in helping Liberia begin recovery from 14 years of civil war, generations of corruption, and a near-total absence

of government services and of respect for human rights and the rule of law. Congressional funding has enabled us to: Support U.N. peacekeeping operations; assist

in the establishment of an effective government; support the upcoming elections;

support programs for community reintegration and rehabilitation of ex-combatants

and war-affected individuals; address the needs of internally displaced people and

refugees; build Liberia’s capacity to provide its own security; and contribute to the

general reconstruction of Liberia.

We are satisfied that the fiscal year 2006 $75,000,000 in Economic Support Funds

(ESF) and the $10,758,000 in combined Development Assistance/Child Survival and

Health funding will adequately address expected needs. These funds would support

local elections; legislative, judicial and rule of law programs; agricultural livelihoods;

customs, tax, auditing, and budgetary reforms; aviation safety; extensive privatization and an acceptable trade and investment framework; microcredit programs; sustainable and transparent natural resource management; education and literacy; and

health programs.

Through fiscal year 2005, we will have directed $60 million toward our goal of

providing $180 million in security sector reform, which is extremely cost-effective.

The sooner we operationalize a professional, fiscally sustainable Liberian security

sector, the sooner the conditions will exist that would lead to the termination of the

peacekeeping mandate for the U.N. Mission in Liberia (UNMIL), which annually

costs the United States about $245 million in contributions.

Holding free and fair elections in October 2005 is a top priority. With $10 million

from the International Disaster and Famine Assistance (IDFA) account, USAID is

providing financial assistance for the preparations and conduct of the October 11,

2005, national elections that will choose Liberia’s President, Vice President, Senate

(30 members), and House of Representatives (64 members).

USAID is providing essential material and technical assistance to Liberia in preparation for the upcoming elections. Specific material contributions include ballots,

ballot boxes, forms, and various other election equipment and supplies. With regard

to technical assistance, USAID is strengthening the capacity of Liberia’s National

Elections Commission (NEC) to administer the national elections, supporting politVerDate 11-MAY-2000 13:57 Oct 05, 2005 Jkt 000000 PO 00000 Frm 00164 Fmt 6633 Sfmt 6621 963433.SEN SFORELA1 PsN: SFORELA1
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ical party development and training, preparing NGOs for election observation, and

training polling place officials. Additionally, the agency is supporting ‘‘get out the

vote’’ initiatives, training civil society organizations to educate voters, and providing

nationwide coverage of the election process. The assistance is being provided

through the Consortium on Elections and Political Process Strengthening, which includes the International Foundation for Election Systems (IFES), the International

Republican Institute (IRI), and the National Democratic Institute (NDI).

The U.N.’s Electoral Division is coordinating the election process and supporting

the NEC. The U.N.’s timely completion of its responsibilities and the filling of its

election advisor positions are essential to the success of the elections. The timeline

and milestones leading up to the elections are ambitious but feasible barring any

further delays. We will also work with the United Nations and others to address

the provision of election security. The European Union is also providing support for

civic and voter education.

The generous supplemental of IDFA funds have played a significant role with

other donor funding to jump start numerous transitional activities that will lead to

sustainable programs for a new government. We plan to follow through on our

progress to date. With the international donor community’s substantive support,

this may be Liberia’s best chance to move to democratically elected government. Reducing instability in the Mano River Union countries (Liberia, Sierra Leone, and

Guinea) remains a high United States policy priority for the subregion, and our assistance supports the goal of restoring stability there.

In one short year since cessation of armed conflict, Liberians have made credible

progress toward reversing the negative impact of 14 years of conflict. However,

much more needs to be done to complete the resettlement tasks, rebuild communities, hold free and fair elections, restructure key ministries in government, educate the youth, and rebuild civil society from the bottom up. These tasks appear arduous, but with continued collaboration through the family of United States agencies, international donors, nongovernment organizations, and the private sector, Liberia can turn around its fortunes and ensure a government that has legitimacy in

the eyes of the people. We intend to provide meaningful support to Liberia’s newly

elected government.

As the peace is consolidated through an elected government, the United States

and other donors must continue commitments and facilitate apolitical and ‘‘good

will’’ interest groups in America and Europe that wish to see Liberia succeed in its

reconstruction efforts. USAID and other USG entities will be working hard to address the enabling environment such that all development resources invested in Liberia can be easily tracked for impact and sustainability.

Our greatest remaining challenges in Liberia are corruption; the lack of adequate

public services, basic infrastructure, and a private sector; security sector reform; illiteracy; the centralization of power in the executive branch; and Liberia’s staggering $3.5 billion debt. However, we are committed to the opportunity to establish

a new Liberia that will be peaceful, productive, and prosperous.

RESPONSES OF AMBASSADOR MICHAEL RANNEBERGER TO QUESTIONS SUBMITTED FOR

THE RECORD BY SENATOR RUSS FEINGOLD

Question. Please explain what kinds of assistance the United States plans to provide to northern and eastern Uganda, both in terms of humanitaiian response and

in terms of addressing urgent development needs. What portion of total United

States assistance to Uganda will be spent in this region in the current fiscal year?

How does this compare to anticipated spending in FY06?

Answer. We are committed to addressing the long-standing conflict in northern

and eastern Uganda and continue of work with limited resources to address the

most urgent needs. Following an NSC request for a post-conflict strategy, USAID

submitted a ‘‘Post-Conflict Reconciliation and Recovery Action Plan for Northern

Uganda (2005/2007).’’ This plan seeks to assist the voluntary return or resettlement

of well over 1 million internally displaced people (IDPs) fleeing conflict areas. The

plan addresses multiple issues in northern Uganda including emergency intervention, health assistance, IDP protection, reconciliation process support, strengthening

of local governance, encouragement of democratic participation and political enfranchisement, food and livelihood security, education and training. Due to the pressing

needs In northern Uganda, additional resources are critical to the effective implementation of this plan. A USAID team visited Uganda in March 2005 to assess the

immediate needs and resource requirements and its findings and recommendations

are expected by the end of April.

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Currently, the USAID Mission in Uganda offers humanitarian and development

assistance to provide relief to the war-affected regions of Uganda. Total USAID assistance in strife-torn regions of Uganda was over $77 million in fiscal year 2004.

USAID’s program activities include:

• Humanitarian Assistance Activities: USAID continues to address the needs of

almost 1.4 million internally displaced persons (IDPs) in Uganda. This group

represents 12 percent of the total number of IDPs in Africa. In fiscal year 2004,

approximately US$72 million was provided to meet humanitarian needs in food

aid, water, sanitation, shelter, and health.

• The Community Resilience and Dialogue Program: USAID works with district

authorities, local and national NGOs to provide psychosocial rehabilitation, conflict resolution and peace building activities, and HIV/AIDS services to victims

of conflict. USAID/Uganda uses Displaced Children and Orphans Funds to assist war-affected children in northern and western Uganda, including formerly

abducted children, former child soldiers, child mothers, and IDPs with counseling and vocational training.

• The Northern Uganda Peace Initiative: This is an American initiative that addresses a peaceful solution to the ongoing civil conflict in northern Uganda and

seeks to engage the Government of Uganda and the Lord’s Resistance Army

(LRA) in talks, with the goal of achieving peace and support for national reconciliation.

Plans for 2006 will depend on available resources and circumstances in Uganda.

Should the Lord’s Resistance Army be defeated, or if a peace agreement is reached,

conditions could change dramatically.

Question. It seems clear to me that one way the United States could provide some

needed assistance to the Ugandan military is in the area of technical assistance to

help improve Ugandan capacities to address complaints or problems with the UPDF

raised by Ugandan civilians in the north. The report submitted on February 2, 2005,

to Congress by the Department of State pursuant to the Northern Uganda Crisis

Response Act states ‘‘The UPDF (Ugandan People’s Defense Force) is feared by

many ordinary civilians in northern Uganda and its record of civil-military relations

is mixed. The relation between the UPDF’s complaint processing system, the civil

judicial process, and the UHCR (Ugandan Human Rights Commission) needs to be

clarified, and links between the various systems need to be strengthened.’’ Do you

plan to provide assistance to help address these needs?

Answer. Under the International Military Education and Training (IMET) program, the United States is providing training for the UPDF in the areas of civil/

military relations, military justice, professional military education, and human

rights at a cost of roughly a quarter of a million dollars in FY05. Using FY05 and

earlier Foreign Military Financing (FMF) we are providing counterinsurgency-oriented command and staff training to UPDF army units at a cost of roughly

$700,000. The United States also provided $5.8 million in nonlethal communications

and ground mobility assistance to the Ugandan Armed Forces with a goal of combating the Lord’s Resistance Army.

Question. I was delighted to see that the Child Survival request for Somalia for

FY06 is $300 million [sic], a very significant increase from the FY05 estimate of

$100 million [sic]. I also noted that the Development Assistance request for Somalia

contains a modest increase from the requested FY05 level, although represents a

significant decrease from the estimated FY05 level—I presume because of tsunami

relief. Would you tell me a bit more about your strategy for increasing United States

engagement in Somalia? What are your plans in the education and health sectors?

What about providing technical assistance to help regulate informal banking networks? Do you plan to engage with the interim government?

Answer. The United States strongly supports the establishment of a functioning

central government in Somalia capable of bringing the Somali people out of this long

period of civil conflict and addressing the international community’s concerns regarding terrorism. United States assistance programs in Somalia are currently alleviating suffering and promoting stability while helping Somalis develop a more selfsufficient population as they address reconciliation, transition, and development

problems. We will continue to work with Somalis themselves, with countries of the

region, and with our international partners to support the reestablishment of stable

and effective governance in Somalia. A complete description of our strategy for engagement in Somalia regarding the activities you mention above is contained in the

March 8, 2005, Report of U.S. Activities in Somalia. I understand your staff has a

copy of this report.

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Question. I was pleased to learn at the hearing that the administration has budg- eted $40 million for public diplomacy programs in Africa in FY06. Would you please

provide a breakout of the country allocations in this budget?

Answer. A further review of FY06 requests for public diplomacy programs in sub- Saharan Africa indicates that the actual figure for FY06 is $33.3 million. This $33.3

million is to meet program, administrative, American salaries, and operating costs

for public diplomacy. Following is a projection of likely allocation of public diplomacy

funds by country.

Budget Request by Country for FY06

[In thousand of dollars]

Djibouti ............................................................................................................. $91

Luanda .............................................................................................................. 600

Maseru .............................................................................................................. 60

Kinshasa ........................................................................................................... 920

Mbabane ........................................................................................................... 387

Yaounde ............................................................................................................ 959

Gaborone .......................................................................................................... 447

Bangui .............................................................................................................. —

Praia ................................................................................................................. —

N’Djamena ........................................................................................................ 452

Cotonou ............................................................................................................. 379

Malabo .............................................................................................................. —

Addis Ababa ..................................................................................................... 918

Brazzaville ........................................................................................................ —

Dakar ................................................................................................................ 1,187

Libreville .......................................................................................................... 60

Accra ................................................................................................................. 1,125

Asmara ............................................................................................................. 368

Bissau ............................................................................................................... —

Conakry ............................................................................................................ 508

Abidjan ............................................................................................................. 1,301

Nairobi .............................................................................................................. 1,373

Bujumbura ....................................................................................................... —

Kigali ................................................................................................................ 459

Monrovia ........................................................................................................... 311

Antananarivo ................................................................................................... 872

Bamako ............................................................................................................. 483

Nouakchott ....................................................................................................... 5

Maputo .............................................................................................................. 687

Niamey ............................................................................................................. 442

Lagos ................................................................................................................. 2,576

Freetown ........................................................................................................... 171

Mogadishu ........................................................................................................ —

Lusaka .............................................................................................................. 1,061

Lilongwe ........................................................................................................... 640

Port Louis ......................................................................................................... 340

Windhoek .......................................................................................................... 472

Harare .............................................................................................................. 862

Khartoum ......................................................................................................... 211

Dar Es Salaam ................................................................................................. 904

Banjul ............................................................................................................... 90

Lome ................................................................................................................. 659

Kampala ........................................................................................................... 798

Pretoria ............................................................................................................. 3,857

Ouagadougou ................................................................................................... 487

ARS Paris ......................................................................................................... 2,533

Office of Public Diplomacy .............................................................................. 3,254

Total .......................................................................................................... 33,309

Question. Many observers are concerned about the glacial pace at which the transitional government in the DRC is moving toward elections. What are the carrots

and sticks that the United States is using to try to create an incentive structure

that will facilitate a genuine transition?

Answer. The Democratic Republic of the Congo is making progress toward the

completion of the transition process agreed by the Congolese belligerents in 2002,

and the United States has been an active and engaged part of that progress. We

164

use our political influence, our assistance programs, and our contacts with Congolese officials and civil society to advance the process toward the eventual goal of a

democratic election to choose the Congo’s leadership. Given Congo’s political history—30 years of President Mobutu’s rule followed by an extremely violent civil war

with substantial outside support to belligerent factions—progress has been slower

than we might have wished. Nonetheless, it has been steady and in a positive direction.

Although preparations for elections are moving more slowly than expected, much

has been accomplished. In 2004 the United States helped get the Independent Electoral Commission established and operational. We were the first donor to provide

material support to the Commission. Management and financial plans were developed and a provisional timeframe for electoral operations has been adopted. Furthermore, our programs are concentrating on support to key transitional institutions

such as political party development, legislation critical to the transition, human

rights advocacy, and anticorruption.

With continued pressure from the United States, and the Kinshasa-based International Committee to Support the Transition in Democratic Republic of Congo

(known by its French acronym CIAT) a voter registration law was passed in December 2004 that defined and streamlined the process by negating calls for a full national census prior to the election. The CIAT, in which the U.S. Ambassador in

Congo actively participates, has been a useful means by which to urge the transitional government to implement the transition process and avoid delays in election

preparations. At this time, CIAT is working to help the Congolese complete a draft

constitution; we expect the transition Parliament to adopt this draft constitution in

early April. In all these interventions we have made it clear that the United States

supports the rapid and successful completion of the election process and that U.S.

support is contingent upon participation by all Congolese leaders in good faith in

a fair, transparent, and nonviolent manner.

We have also supported the expansion and redefinition of the mandate of the U.N.

Mission in Congo (MONUC) as it prepares to support both the security environment

and the conduct of the coming elections in Congo.

Question. I share the President’s enthusiasm for supporting democratization

around the world, though I sometimes disagree with the administration regarding

the most effective ways to go about it. Having served on the Subcommittee on African Affairs for over 12 years now, I am interested in hearing more about how this

applies to Africa. How do you plan to support democracy in Uganda or Chad, where

serving Presidents are in various stages of pursuing constitutional changes that will

enable them to serve for third terms? How do you plan to support democracy in

Rwanda, where the government has grown increasingly intolerant of dissent?

Answer. We will continue to promote democracy in Chad. Specific and ongoing

strategies will focus on assisting the judiciary and National Assembly to develop as

counterweights to the dominant executive branch. Recognizing the essential role of

civil society, we will focus on improving the capacity of Chadian organizations and

associations to defend human rights and perform a watchdog role on government

activities. Specific attention will be paid to improving communication and substantive interaction between the government and human rights organizations and

between civil society organizations and the Chadian public to address key human

rights issues. Key programs that will help support these goals include an ESF-funded project to help Chad bolster the capacity of the judicial system, a capacity building program for the National Assembly that also encourages linkages between members of Chad’s National Assembly and other legislatures, expanded IMET courses

and attendance at Africa Center for Strategic Studies seminars to emphasize the

role of the military in a democracy, and an HDRF-funded nationwide radio program

on civil liberties and civil rights.

With regard to Uganda, we have an active program to promote democracy and

good governance. Our programs train elected officials and staff with a goal of increasing the probity and transparency of local election boards, to supporting

anticorruption efforts in Parliament, and strengthening the oversight capabilities of

parliamentary committees and local governmental institutions. We also train civil

society organizations, and assist political parties and advocacy groups to develop

clear positions on constitutional and electoral issues. We use Democracy and Human

Rights Funds for visitor and educational exchanges, journalism training, and public

information programs.

In Rwanda, our challenge is the weakened state of human rights observance and

respect for the rule of law. In fiscal year 2004, the Government of Rwanda (GOR)

narrowed the boundaries of freedom of expression and further closed the political

space. We will continue to work with key Rwandan institutions, such as Parliament

165

and the judiciary. We will also support civil society organizations that seek to carve

out a constitutionally sanctioned role in influencing GOR policymaking. For example, the Secretary of State is the Chairman of the Board of the Millenium Challenge

Corporation, and Rwanda is not able to receive Millenium Challenge Account financial assistance until it improves its performance in the Governing Justly category.

Question. What steps are you taking to call attention to extremely problematic

preelection conditions in Zimbabwe? What kind of instructions do our southern African Ambassadors have to raise this issue with SADC government both publicly and

privately?

Answer. We have urged all members of the Southern African Development Community (SADC) to use their influence with the Government of Zimbabwe to ensure

that the parliamentary election on March 31 is free and fair. Specifically, we have

asked SADC governments to urge the Government of Zimbabwe to comply with

SADC election guidelines by inviting credible monitors to observe the election, by

granting all parties fair access to official media, by promptly complying with the rulings of electoral bodies, and by ensuring that the campaign is nonviolent and all

parties are able to hold rallies. Our messages to SADC have tracked our public

statements in Congress, the United Nations, on the Voice of America, and elsewhere.

We have also urged SADC governments to apply vigorously the SADC election

guidelines and to make a frank assessment of the election environment.

Question. What is the status of the East African Counter-Terrorism Initiative?

Does this initiative no longer exist? If not, can you explain the rationale for discontinuing it? If you do envision continuing it, how do you intend to fund it? I cannot find it anywhere in your budget request.

Answer. EACTI continues. The $100 million announced by the President should

last through the end of FY05. EACTI was never a line-item in the budget, but drew

on a dozen or more funding streams (e.g., ESF, FMF, PKO, INCLE, NADR, DA) and

existing programs. We are looking to these same sources to fund EACTI-related and

follow-on programs in FY06.

RESPONSE OF HON. LLOYD PIERSON TO QUESTION SUBMITTED FOR THE RECORD BY

SENATOR RUSS FEINGOLD

Question. You indicated at the hearing that the administration’s Anti-Corruption

Initiative in Africa still exists, despite the fact that no separate budget line for this

Initiative is included in the administration’s request this year. As I understand it,

you further indicated that this Initiative is now being pursued at the country level,

with resources provided in the broader foreign assistance accounts. Does this mean

that there has been an addition to the Development Assistance account request in

the amount of the Initiative budget for FY06, or will anticorruption programs now

be competing with other important priorities at the country level without any additional resources to accommodate them?

Answer. Anti-Corruption Initiative (ACI) funds are included as part of the Africa

Bureau’s Development Assistance (DA) budget request for democracy and governance (DG) activities in FY06, as they have been for the last 3 fiscal years. The Bureau’s total DA/DG request for fiscal year 2006 is nearly $6 million higher than the

fiscal year 2005 actual level, reflecting the importance that the Bureau places on

DG and Conflict related activities in Africa. Because anticorruption activities are

common to many of USAID’s good governance programs in Africa, a separate budget

line is no longer provided for the ACI. Instead, the Bureau maintains the Initiative

as a separate fund within the DA account. The ACI fund allows the Bureau to allocate a consistent level of funding for anticorruption activities to bilateral and regional missions over several successive fiscal years. These funds are notified by the

Africa Bureau in the annual Congressional Budget Justification.

The initial selection of mission programs was conducted in FY03, based on an internal competition among missions for multiyear anticorruption programs. The Bureau chose a multiyear approach focused explicitly on corruption because past

USAID experience indicated that successful anticorruption efforts require a longterm commitment. The ACI is designed to foster innovative programs at the country

level through a coordinated and coherent program that facilitates information sharing and learning among USAID missions. ACI prioritizes countries that demonstrate the political will to implement reform; helps consolidate emerging democracies; capitalizes on unique windows of opportunity to fight corruption in each

country; creates linkages with the Millennium Challenge Account (MCA); and tests

a wide range of strategies to establish best practices and create replicable models.

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Since FY03, ACI funds have been transferred directly to nine bilateral missions

(Benin, Kenya, Madagascar, Mozambique, Nigeria, Rwanda, South Africa, Tanzania,

and Zambia) and three regional missions in support of in-country and subregional

anticorruption activities. A small portion of ACI resources are used by the Bureau

in Washington to provide technical assistance to the field, monitor the impacts of

the Initiative, and share information among bilateral and regional programs.

ACI funds complement, rather than compete with, country-level and regionwide

programs. ACI funding allows recipient missions to integrate anticorruption activities into broader development objectives. For example, USAID/Rwanda uses ACI

funds to add an anticorruption focus to the Mission’s existing decentralization and

health programs. ACI funds are used to equip community-based organizations with

the skills they need to participate in planning meetings with local government leaders on how to spend their annual healthcare budgets. This helps to ensure that local

elected officials are accountable to their communities. The program encourages citizens to develop common priorities, practice democratic decisionmaking, and be involved in monitoring the spending of local health resources. USAID/Rwanda

achieves these objectives with an annual ACI allocation of just $250,000—far less

than a stand-alone anticorruption program would cost. As an ACI recipient, USAID/

Rwanda has been able to count on ACI funding since fiscal year 2003, allowing the

mission to take the longer term approach that is generally needed to fight corruption effectively.

RESPONSES OF HON. LLOYD PIERSON TO QUESTIONS SUBMITTED FOR THE RECORD BY

SENATOR BARACK OBAMA

Question. USAID has proposed expanding the ‘‘Transition Initiatives’’ (TI) funding

account in fiscal year 2006. What are the requirements for TI funding and how do

they differ from the ‘‘Development Assistance’’ (DA) funding rules? How will USAID

guarantee to American taxpayers that TI funding is held to the same rules of accountability as the DA funding?

Answer. The Transition Initiatives (TI) account provides support to countries that

are confronting crisis or in transition from crisis to transformational development,

As such, the TI account finances activities that provide a rapid response and are

short term in nature, intended to address immediate causes of crisis while building

the institutional foundation and setting the stage for longer term development activities. On the other hand, Development Assistance funds are intended for longterm transformational development activities. We are proposing expanding the TI

account because we are increasingly finding situations like Afghanistan and the

Sudan where the conditions for an effective long-term development assistance program are not yet in place. The resource responsiveness and flexibility of the TI account improves our ability to program resources for results consistent with conditions on the gound.

Crises or vulnerabilities that lead to crisis take many forms—conflict and insecurity, governance and economic crisis, or famine—and create environments that are

often highly charged and fluid. The local conditions in countries confronting vulnerability and crisis can change quickly. In such countries where USAID works, we

must adapt quickly to both the challenges and opportunities as they emerge.

The use of the TI account enables us to hasten our programming response to crisis, so that we can successfully achieve our goals of enhancing security and stability,

advancing opportunities for reform, and developing capacity of essential institutions

and infrastructure.

As with Development Assistance and all other accounts utilized by USAID, we

will manage TI funds in accordance with Federal Financial Accounting Standards.

USAID will monitor activities and report results in a manner appropriate with conditions on the ground, recognizing the rapidly changing local conditions. As we program TI funds, we will consult with Congress.

Question. USAID has determined that eight sub-Saharan African nations qualify

for Millennium Challenge Account funding. Please provide me with a list of these

eight countries, along with the entire list of eligible nations, and provide me with

the exact standards USAID used to develop this list and an explanation of how

these eight countries meet the standards,

Answer. In January 2004 the U.S. Government created the Millennium Challenge

Corporation (MCC) as an independent agency to administer the Millennium Challenge Account (MCA). Through the MCA, development assistance levels will be substantially increased to a select group of countries that demonstrate a commitment

to ruling justly, investing in people, and encouraging economic freedom.

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The MCA is not administered by USAID, but USAID Administrator Andrew

Natsios is on the MCA Board of Directors. We are pleased at the level of collaboration between USAID and the MCC as the process has moved forward in sub-Saharan Africa. We are especially pleased that the MCA Board of Directors decided that

8 of the first 16 countries to be asked to submit MCA proposals in the first year

of the program (FY 2004) are in sub-Saharan Africa. These countries are: Benin,

Cape Verde, Ghana, Lesotho, Madagascar, Mali, Mozambique, and Senegal. In fiscal

year 2004 all 75 countries eligible to receive concessional assistance through the

International Development Agency (the soft loan window of the World Bank) were

considered for selection by the MCC. Twelve countries were excluded from further

evaluation for foreign policy reasons (e.g., North Korea, Cuba, etc.). The rest were

evaluated on their performance on 16 indicators that measure commitment to ruling

justly, investing in their people, and promoting economic freedom—as assessed by

institutions such as Freedom House and the World Bank. Detailed information on

country selection process and criteria are available on the MCA web site,

www.mca.go.

The MCC has also set aside separate funding for a group of ‘‘threshold countries’’—countries that came close to qualifying for the MCA but did not—to help

them improve their policies in indicator areas where they were weak. For fiscal

years 2004–05, 13 countries have been invited to submit proposals for this program,

including 7 in Africa: Burkina Faso, Kenya, Malawi, Sao Tome and Principe, Tanzania, Uganda, and Zambia. USAID is the lead implementer for this program, under

the direction of the MCC. This program is also described on the MCA web site.

RESPONSES OF AMBASSADOR MICHAEL RANNEBERGER TO QUESTIONS SUBMITTED FOR

THE RECORD BY SENATOR BARACK OBAMA

Question. The Congress has been long awaiting real results from the Millennium

Challenge Account program. You mentioned that the Account will start releasing

compacts for actual projects soon. Please provide me with a detailed listing of the

projects the Account will be proposing, along with the specific name of the participant groups, nongovernmental organizations, or private companies, the expected

funding level, and the term of the grant.

Answer. Congress passed the Millennium Challenge Act at the end of January

last year. By law, the Millennium Challenge Corporation (MCC) could not select

countries until early May 2004, which means that MCC was not able to go to countries to inform them about the MCC until that time. MCC’s Board of Directors approved the first Compact with Madagascar on March 14, 2005—less than 6 months

after Madagascar sent in a proposal. MCC has notified Congress and will wait the

requisite 15 days per our authorizing legislation prior to signing the Compact. The

Compact is a 4-year, $110M agreement to support Land Tenure, Financial Reform,

and an Agricultural Business Investment Projects. In forging the Compact with

Madagascar—and in all of the other Compact negotiations—MCC has applied the

principle of country ownership. Eligible countries, rather than MCC, drive the process, setting the development priorities, designing the programs, and establishing a

budget. MCC is also currently in compact negotiations with three other countries:

Georgia, Honduras, and Nicaragua.

Question. You mentioned that ‘‘anticorruption’’ efforts will be inclined in the soonto-be announced Millennium Challenge Account programs. One area where corruption appears to be a major problem in many African nations is in the handling of

oil and other natural resources. This corruption has made it difficult for both citizens and corporations to work with the governments of certain nations. What will

the Millennium Challenge Account projects do to address the need for transparency

in the handling of oil and other natural resources in African nations?

Answer. One of the lessons from the past five decades of development upon which

MCC is founded is that policies matter. MCC’s selection process and operations are

guided by this philosophy, and a country’s anticorruption efforts factor significantly

into MCC’s decisionmaking. First, in selecting eligible countries, the MCC Board

evaluates a country’s demonstrated commitment to ruling justly, investing in people,

and encouraging economic freedom, including a country’s efforts to control corruption as measured by an index developed by experts at the World Bank. The Board

also considers a country’s economic policies to promote the sustainable management

of natural resources. Then, once a country is named as eligible, MCC assesses Compact proposals for their transparency and accountability, as well as the sustainable

management of natural resources. MCC is working with countries to build up financial accountability mechanisms that provide for transparency, have clear lines of accountability, produce maximum integrity, and wherever possible, build capacity that

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will remain in place at the end of the MCC program—a key issue for Africa (and

elsewhere) in terms of dealing with financial flows from extractive resources.

Question. According to your statement, strengthening Africa’s capacity to fight terrorism is one of the administration’s six priorities in Africa. Please tell me what specific action has been taken to strengthen Africa’s capacity to fight terrorism. What

programs has the United States implemented? How much funding has been expended on these programs? With which governments, nongovernmental organizations, or other outside contractors has the United States worked on these efforts?

What are the administration’s plans for the fiscal year 2006 funding requested for

counterterrorism efforts?

Answer. The United States carries out a wide variety of counterterrorism programs in sub-Saharan Africa. In addition to other funds, we estimate that we will

spend $1.2 million of the requested $11 million in International Military Education

and Training, and $4.1 million of the requested $24 million in Foreign Military Financing, on counterterrorism work in FY06. Major initiatives include the East African Counter-Terrorism Initiative (EACTI), which will have invested $100 million in

counterterrorism efforts in Ethiopia, Uganda, Kenya, Tanzania, and Djibouti between its inception in June 2003 and the end of FY05. Another major initiative is

the $8 million Pan-Sahel Initiative (PSI), which includes Mali, Niger, Chad and

Mauritania. The administration plans follow-ons to both initiatives, and to efforts

in other parts of Africa, in FY06. EACTI, PSI, and efforts in other African countries

draw on a wide variety of worldwide and regional funding streams (e.g., Economic

Support Funds, Foreign Military Finance, Peacekeeping Operations, International

Narcotics Control and Law Enforcement, Development Assistance) and existing programs to work with African militaries, law enforcement, and civilian officials. As an

example, in FY06, State’s Anti-Terrorism Assistance (ATA) program plans to devote

$6 million in the four PSI countries, two EACTI countries, and another African

country.

RESPONSES OF HON. ROGER NORIEGA TO QUESTIONS SUBMITTED FOR THE RECORD BY

SENATOR RICHARD LUGAR

Question. In November 2004 the State Department and the Department of Treasury’s Office of Foreign Assets Control (OFAC) threatened to ‘‘clarify’’ the regulations

governing agriculture export sales to Cuba under the Trade Sanctions Reform and

Export Enhancement Act of 2000 (TSREEA). There have been indications that

TSREEA will subsequently be interpreted in a way that may serve to impede agricultural exports to Cuba, which is contrary to the original intent of the bill. The

Treasury Department states that it engaged in discussions within the administration and received input from industry officials before issuing this clarification in

February 2005. I would appreciate an explanation detailing what caused OFAC and

the State Department to consider issuing such a clarification. What industry officials were consulted in the administration’s conclusions? What input did the State

Department provide in these consultations, and what role did the State Department

play in considering and ultimately concluding that such a clarification was necessary?

Answer. TSREEA provides that agricultural products may be exported to Cuba as

long as they are paid for through a letter of credit from a third country financial

institution or by ‘‘payment of cash in advance.’’ Some United States financial institutions, in late 2004, refused to process payments for the sale of United States agricultural goods sold to Cuba because of concerns the sales (generally made on the

basis of receipt of cash prior to delivery) were not in compliance with the U.S. Department of Treasury’s Office of Foreign Assets Control Regulations (CACR) and requested clarification of the rules. OFAC, therefore, initiated a review of whether

‘‘cash in advance’’ would be interpreted to mean payment prior to the shipment of

the goods to Cuba rather than prior to transfer of title to the goods to the Cuban

authorities.

The administration engaged in interagency discussions and received input from

a wide range of industry officials involved in agricultural exports to Cuba, including

large and small exporters of products such as meat, dairy, fruit, and vegetables, as

well as shipping industry representatives, before issuing the regulation. The Department of State heard directly from U.S. exporters and participated in the interagency

process that led to OFAC issuing the new regulation.

Ultimately, OFAC clarified that under the Cuban Assets Control Regulations the

term ‘‘payment of cash in advance’’ with regard to shipments of agricultural commodities to Cuba means payment of cash prior to shipment of goods. OFAC deterVerDate 11-MAY-2000 13:57 Oct 05, 2005 Jkt 000000 PO 00000 Frm 00172 Fmt 6633 Sfmt 6621 963433.SEN SFORELA1 PsN: SFORELA1
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mined that this meaning conforms to a common practice in international trade finance. We believe this interpretation is consistent with TSREEA.

Question. What is the administration’s policy agenda for Bolivia? And, what has

the administration done to advance it?

Answer. The United States remains fully committed to supporting Bolivian democracy, and in our public and private conversations with Bolivia’s leaders, we have

made clear our commitment to democratic government and our opposition to any efforts to sidetrack Bolivian democracy by unconstitutional means. We have encouraged all members of Bolivian society to resolve the current crisis through open dialog within a democratic framework. We have urged the Bolivia Support Group and

other international partners to express their backing for the constitutional process

and have reiterated our willingness to work with the international community to

ensure Bolivia retains the support it needs.

Our focus will remain on fostering democratic stability as the necessary foundation for economic development and for continued counternarcotics and

counterterrorism success. If this foundation can be strengthened in the coming

months, Bolivia is less likely to fall under the influence of radical, antidemocratic

forces.

Question. Please explain why aid for Ecuador has been reduced from the ACI initiative by 46 percent in FY05 and an additional 22 percent in FY06, in interdiction

operations, when it is clear Ecuador is a major transit path for illegal drugs and

chemicals?

Answer. Our request for the Andean Counterdrug Initiative (ACI) in fiscal year

2006 will fund the Department’s counternarcotics efforts in Bolivia, Brazil, Colombia, Ecuador, Panama, Peru, and Venezuela, as well as fund the Air Bridge Denial

Program and the Critical Flight Safety Program. Our fiscal year 2006 request for

ACI is for $734,500,000, or $9,348,000 more than the appropriation for fiscal year

2005. The increase in our request for ACI funding highlights the Department’s recognition of the key role each of the ACI countries plays in our counternarcotics efforts in this hemisphere.

Our request for fiscal year 2006 also includes a new program to upgrade the aircraft performing critical counternarcotics missions in Bolivia, Peru, and Colombia.

This $40,000,000 program will fund modifications necessary for the continued safe

execution of aviation operations in those countries.

We believe the funding level for the ACI is appropriate to support our key goals

in region and in each country. Not only did we consider the changes occurring in

each country, but also the effects that changes in one country will have on another.

For example, reductions over the past 2 years in Colombia’s coca cultivation will

have an impact on the transit countries, such as Ecuador, that border Colombia.

The request for Ecuador, and for the other ACI countries, does not indicate flagging counternarcotics performance or a failure to recognize the challenges those

countries face. In fact, Ecuador is making increased use of its own resources and

has made significant advances in securing its northern border with Colombia.

United States assistance has contributed to those efforts and will continue to play

a key role in supporting Ecuador’s counternarcotics efforts.

ACI assistance in fiscal year 2006 will sustain and reinforce military surveillance

and interdiction capabilities along the northern seacoast and the land border with

Colombia. Funds will be used to maintain and, if needed, replace or augment land

vehicles, boats, and field equipment provided to Army and Navy forces in 2002–05.

Funds will also support some field operations of the new Quick Reaction Forces

being established by the Ecuadorian Army on the northern border.

Question. Please explain why Military Border and Coastal Control funds for Ecuador have been cut by 50 percent in fiscal year 2005 and will suffer an additional

50-percent reduction in FY06? How will this cut affect interdiction efforts and the

development of a coastal surveillance system on the highly porous 500 km border

with Colombia?

Answer. The United States provided a combination of Foreign Military Financing

(FMF) and Andean Counterdrug Initiative (ACI) funding to help Ecuador enhance

control over its northern border with Colombia and improve its interdiction capabilities. In fiscal year 2004, $6,955,000 in Foreign Military Financing funds were allocated to Ecuador for this purpose, and from 2002–05 ACI funding provided vehicles,

boats, and field equipment to Army and Navy forces involved in border security and

interdiction missions.

Due to the prohibitions on FMF contained in the American Servicemembers’ Protection Act of 2002, we reprogrammed Ecuador’s fiscal year 2004 FMF funds and

had to reassess the level of subsequent FMF assistance to Ecuador, which is a party

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to the International Criminal Court and has not entered into an Article 98 agreement with the United States.

The United States continues to provide Ecuador with counternarcotics assistance,

including $10,912,000 in fiscal year 2005 ACI funds for interdiction and other law

enforcement activities that support counternarcotics interdiction on Ecuador’s coast

and along its border with Colombia. Though the fiscal year 2006 request is a decrease from the fiscal years 2004 and 2005 levels, the assistance is primarily intended to maintain and augment key equipment provided to the Army and Navy

in the 2002–05 period. Fiscal year 2006 funding will also support some field operations of the new Quick Reaction Forces being established by the Ecuadorian Army

on the northern border.

Question. Please explain why the administration has requested a 50-percent cut

in the Economic Support Fund allotment for Ecuador?

Answer. We believe the funding level requested for Economic Support Fund (ESF)

programs in Ecuador is appropriate to support our goals in Ecuador, including promoting prosperity and strengthening democracy.

In fiscal year 2006, we anticipate continuing key activities such as implementing

justice and anticorruption reform, boosting local government capacity to deliver

services and expand democratic participation, strengthening Ecuador’s Internal Revenue Service, preparing Ecuador to participate in a free trade agreement, improving

sustainable management of natural resources, and supporting small business development.

RESPONSES OF HON. ROGER NORIEGA TO QUESTIONS SUBMITTED FOR THE RECORD BY

SENATOR NORM COLEMAN

Question. Plan Colombia expires at the end of 2005. Colombian Foreign Minister

Carolina Barco has talked about reducing Colombia’s dependence on United States

aid in approximately 2 years. I can see from the President’s budget what is planned

for 2006. But what specific plans are in place for future aid to Colombia? What are

we planning for 2007, 2008, and beyond?

Answer. The United States Government has been a strong supporter of Colombia

and of ‘‘Plan Colombia,’’ the Colombian Government’s strategy to defend its democracy from the scourges of narcotics and terrorism. President Bush reaffirmed this

strong support for the Colombian Government’s strategy in his November 2004 visit

to Cartagena, Colombia. In general terms, United States assistance is focused on

supporting Colombian efforts to strengthen its democratic institutions, promote protection of human rights, enhance respect for rule of law, improve regional stability,

foster socio-economic development, address humanitarian needs, reduce the supply

of illicit narcotics being sent to the United States, and end the threats to democracy

posed by narcotics trafficking and terrorism.

Plan Colombia has had exceptional success, particularly during the Uribe administration. President Uribe is one of our strongest allies, and United States support

has enabled his government to make great progress against narcotraffickers and

United States-designated Foreign Terrorist Organizations, strengthen Colombia’s

democracy, improve the day-to-day lives of Colombia’s citizens, and ensure political

pluralism. Our partnership advances our mutual interests and defends our shared

values. To ensure that the narcoterrorists are fully defeated, security is established

permanently throughout the country and economic growth is sustained, further support is essential.

The Colombian Government has not yet announced a continuation of Plan Colombia, at least not in formal terms. Nevertheless, anticipating the conclusion of Plan

Colombia in late 2005, the Colombian Government has begun planning a follow-on

strategy that would build upon and consolidate the progress made to date. Initial

versions of the Colombian Government’s strategy have described four major initiatives. These are: (a) Fighting terrorism, narcotics trafficking, and international organized crime; (b) economic and social reactivation; (c) institutional and justice system

strengthening; and (d) peace negotiations, demobilization, and reintegration of illegal armed groups.

The United States agrees with these priorities and has told the Colombian Government that we will seek continued support from Congress through the Andean

Counterdrug Initiative (ACI) and other funding vehicles on an annual basis as Colombia develops its future programming. Future assistance will seek to solidify the

gains made under ‘‘Plan Colombia.’’ We have had informal discussions with the

Uribe administration on its plans, but we have made no decisions about specific

funding levels in FY07 and beyond.

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Three of the four areas described for after ‘‘Plan Colombia’’ represent a continuation of successful programs we are already undertaking. The fourth, that of ‘‘peace

negotiations, demobilization, and reintegration of illegal armed groups,’’ is the result

of progress made by Plan Colombia. The Uribe administration’s ambitious plan has

already removed nearly 4,800 paramilitaries from combat. The administration’s

FY06 budget request does not include a specific amount of assistance for the demobilization process. This will be the subject of additional consultations with Congress

as that process develops and further information becomes available.

Question. There is no question that the United States has a great deal at stake

in Colombia. American demand for drugs clearly helps to fuel the insurgency there,

and we have a direct stake in stability in this part of the world. We have an interest

in making sure the insurgents don’t compromise security elsewhere. For instance,

there is recent evidence that the FARC was involved in the kidnapping and murder

of the daughter of the former President of Paraguay. Europe is also a consumer of

Colombian cocaine and has an interest in supporting democratic governance. Can

you please discuss the contributions other nations are making to help implement

Plan Colombia?

Answer. Drug consuming countries have recognized a shared responsibility with

drug producing countries to combat the violence and destruction caused by narcotics, including in Colombia. We are disappointed that European donors, with some

exceptions, have not contributed more. Nevertheless, European support and concern

for Colombia seems to be growing, and we have been using every available opportunity to encourage them to become more engaged. According to Colombian Government figures, the EU and its member states invested about $120 million in Colombia in 2003, of which some $84 million was bilateral. Figures for 2004 are not yet

available but we believe will show an increase.

The international community voiced its continued strong support for Colombia at

the 2003 London Conference and a follow-on meeting in February 2005 in

Cartagena. We continue to urge countries that have announced contributions to Colombia to speed the implementation of their programs and to consider additional

projects.

As requested by House Manager’s Report 108–599 accompanying the FY 2005

Foreign Operations Appropriations Act, the Department of State is preparing a report to the Committee on Appropriations that ‘‘details by dollar level and fiscal year,

multilateral and bilateral projects and programs supported by the European Union

and individual countries in Europe’’ to the Andean region, including, of course, Colombia. We expect that report to be provided to Congress in April and will ensure

that you receive a copy.

Question. The budget includes $40 million for a new Critical Flight Safety Program. Can you please describe this program, its objectives, and the way it fits into

the overall Andean Counterdrug Initiative?

Answer. Part of the great success of our eradication and interdiction efforts in the

last few years has come from increasing the operational tempo for already aging air

assets. Many of the Department’s existing aircraft are over 35 years old with more

than 10,000 airframe hours. Major components are obsolete and no longer being

manufactured, presenting serious challenges for mission and flight safety. The Department of State Air Wing aircraft have suffered serious structural in-flight failures, and we have been fortunate not to lose aircrew and aircraft due to them. This

increased operational tempo, combined with the aging condition of the fleet, means

that we now have to spend more money on maintenance and depot overhauls to assure safety for our aircrews.

The administration has requested $40 million in the fiscal year 2006 budget to

address the immediate need for a Critical Flight Safety Program (CFSP) to upgrade

the Department of State Air Wing aircraft fleet. This program will bring our fleet

back to commercial safety standards in order to sustain its counternarcotics and

counterterrorism missions. The CFSP will upgrade, sustain, and replace aircraft for

the Bureau of International Narcotics and Law Enforcement’s (INL) eradication/

interdiction programs in Bolivia, Colombia, Peru, and Pakistan.

Question. One of the concerns shared by the United States and much of Central

America is the presence of gangs. Many gang members have spent much of their

lives in the United States before being deported to their home countries, and they

retain contacts in both countries. Can you please discuss what is being done to work

with the governments of Central America to combat this growing problem? Do you

believe there is scope for increased cooperation?

Answer. Over the last few years, the Department of State and USAID have supported a variety of programs to address different aspects of the gang problem—from

general human development and job promotion, to exchanges of experts, technical

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support for investigations including the formation of antigang units, and tattoo removal for individuals seeking to leave gangs. The Department is currently examining how to bring these different elements together into an overall plan for the region. The governments of Central America are actively seeking international support in this area. There is certainly scope for increased cooperation.

In prior years, in El Salvador, we supported the formation and provided in-service

training for antigang units in the Civilian National Police (PNC). The PNC is now

reaching out to state and local law enforcement agencies in the United States in

order to develop better information on gang activity, and the FBI has formed an

MS–13 Task Force to focus the attention of federal agencies on this problem. The

FBI has requested permission to establish a Legal Attache ́’s Office in San Salvador

to support the Task Force. We welcome this initiative and believe it will open important new avenues of law enforcement cooperation, both within Central America and

between the region and the United States.

The Embassy in El Salvador is supporting the work of the National Public Security Advisory Council (PSAC), which together with the Ministry of Education offers

workshops and instructional materials for public school students on detrimental aspects of gang life. The Embassy has also donated a tattoo removal machine to the

local NGO FundaSalva, for use in programs to assist individuals who have left

gangs. In order to qualify for tattoo removal, individuals must formally renounce

gang life, attend counseling for anger management and substance abuse, and lead

a crime-free life for 6 months. Afterward, the PSAC assists them in finding gainful

employment.

Similar programs are in different stages of development in other countries. In

Guatemala, State and USAID are working together in a community outside the capital (Villa Nueva) to reduce gang violence through better law enforcement and prevention efforts. Separately, USAID is engaged in a delinquency prevention program

with a coalition of NGOs. In Panama, an effort to improve gang intelligence has just

been launched in Colon and a Culture of Lawfulness program, focused on junior and

senior high school students, is in development. In Honduras, an administration of

justice program aims to assist the Ministry of Public Security and the Public Ministry bring successful prosecutions in high priority cases, including instances of gang

violence. We are currently evaluating whether the latter program should be reoriented more toward gang issues.

Question. Nicaragua’s eligibility for MCA assistance is based in large part on the

courageous efforts of President Bolan ̃ os to root out corruption. Yet today it appears

that forces in Nicaragua are beginning to threaten President Bolan ̃ os’ efforts. Can

you speak about the importance of democracy and the rule of law in Nicaragua, in

light of apparent efforts to undermine the man who may be Nicaragua’s best chance

for reform?

Answer. Fifteen years after the democratic transition, Nicaragua has made important strides in the development of democratic institutions. However, the abuse of

power, corruption, and the politicization of many state institutions, especially the

Sandinista-dominated judiciary, continue to impede the consolidation of democracy

and hinder economic growth.

President Enrique Bolan ̃ os’ strong stand against corruption, which resulted in the

2003 conviction and imprisonment of his predecessor, Arnaldo Aleman, on moneylaundering charges, left the Executive isolated with little political capital to move

forward on political and economic reform. The Liberal Party (PLC), controlled by

former President Arnoldo Aleman, and the Sandinista Party (FSLN), controlled by

Daniel Ortega, are allied in their efforts to undermine the Bolan ̃ os government. The

political pact between these two strongmen has thwarted the efforts of Bolan ̃ os to

govern. These two parties maintain control of the National Assembly and recently

passed a series of reforms that further reduced Presidential powers and increased

political instability in the country.

The weakened executive remains in a precarious situation, though an ongoing national dialog brokered in January by the UNDP and Catholic Church has alleviated

some political tensions and includes a commitment to allow Bolan ̃ os to complete his

term as President. Accordingly, we must continue our support to the Bolan ̃ os administration.

Our efforts in Nicaragua are focused on strengthening democratic governance and

fostering economic growth. A key component of sound governance is reducing corruption. The United States Government’s anticorruption assistance, which includes

assisting Nicaragua under the framework of its G–8 anticorruption compact, supports President Bolan ̃ os’ initiatives to dismantle the long-standing foci of corruption

that have hindered progress in Nicaragua. The USG provides technical assistance

to anticorruption activities that focus on transparency, civil society oversight, and

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enforcement. The Embassy suspended aid to the judicial branch throughout 2004 as

a warning that backroom deals and judicial corruption would not be tolerated. Development assistance resources also go toward helping Nicaragua fight corruption

and improving legal and regulatory frameworks, because good governance is the

foundation upon which other goals rest. Without wide-ranging reforms, corrupt and

inefficient institutions could erode Nicaragua’s economic gains.

A credible and transparent election process is also key to Nicaragua’s future as

a stable democracy. In the lead up to the 2006 Presidential elections, we will invest

significant ESF resources to provide civic education and enhance civil society engagement to enable free and fair elections. Given the monopolization of the election

machinery by the PLC and FSLN, it is critical that civil society and minor parties

be strengthened to counterbalance this effective duopoly of power and open the political system to outside voices. We plan to invest heavily in the areas of citizen participation, voter education, and public awareness to empower minor parties and civil

society. We will also fund domestic and international election observation, transparent elections administration and post-election analysis.

For democracy and its institutions to succeed, it is imperative that the Nicaraguan economy be strengthened. The USG encourages the GON and the National

Assembly to maintain the responsible economic policies advocated by President

Bolan ̃ os that led to modest economic growth in 2004. We hope to be able to showcase the fruits of democracy and economic growth by signing an MCA compact with

Nicaragua and ratifying the Central America-Dominican Republic Free Trade

Agreement (CAFTA–DR).

Increased stability in Nicaragua’s democratic institutions and growth of its economy are at the heart of our bilateral relationship with Nicaragua. This two-pronged

approach is our best recourse in the face of those elements that seek to undermine

the good work of President Bolan ̃ os.

Question. Increasingly the nations of the Western Hemisphere, including the

United States, have been willing and able to work together to address common security concerns. This budget requests $1.5 million for a new Western Hemisphere Regional Security Fund. Please describe this new initiative and explain what you see

as its usefulness in the future.

Answer. A widening security gap exists in the Western Hemisphere, and the Regional Security Fund is needed to protect the homeland and generate regional cooperation against threats to the Western Hemisphere.

Specific funding has been lacking within the Western Hemisphere budget to support regional security cooperation and conflict prevention activities, despite the fact

that these are crucial issues for the Hemisphere. Among some future activities we

hope to fund:

• Encourage the transformation and rationalization of the defense and security

forces in Latin America, particularly in Central America, in order to better confront the challenges of the 21st century.

• Provide technical and financial assistance for resolution of several of the 15 remaining maritime and land border disputes that are potential flashpoints, including the mitigation of current irritants in the Belize-Guatemala or GuyanaSuriname relationships, is a priority for the RSF.

• Follow-up efforts for the Summit-mandated Experts Group on Confidence and

Security Building Measures, including workshops and seminars to strengthen

civilian control of the military and foster greater trust among countries.

• Address the lack of capacity of many nations in the region to implement legal

norms related to security by providing assistance and training linked to implementation of the Inter-American Convention Against the Illicit Trafficking in

Firearms (CIFTA) and Inter-American Convention Against Terrorism are essential.

• Provide assistance for stockpile management and conventional arms destruction.

RESPONSE OF HON. ADOLFO FRANCO TO QUESTION SUBMITTED FOR THE RECORD BY

SENATOR NORM COLEMAN

Question. In my travels to Africa and South Asia, I have consistently come away

believing that the impact of clean water on public health is impossible to overstate.

Assistant Administrator Franco, in your testimony you mention the President’s

Water for the Poor Initiative. Can you please go into further detail about the implementation of this initiative in the Western Hemisphere?

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Answer. Over $51 million were dedicated to implementation of the President’s

Water for the Poor Initiative in 2004. The following is a brief description of illustrative activities and achievements that pertain to the Initiatives’ three main focal

areas: Water supply and sanitation, watershed management, and water productivity.

WATER SUPPLY AND SANITATION

Water supply and sanitation are important social and economic development issues in Latin America. In 2004, USAID contributed $28 million to water supply

and sanitation, which also includes wastewater management. For example, under

the Bolivia mission’s Alternative Development Yungas Development Initiative 58

small-grant community-prioritized projects to increase household access to clean

water and sanitation were completed in 2004.

In Peru, nearly 16,850 families were provided with access to new sanitary/health

infrastructure works, using all local materials. Working with its Ministry of Health,

the Colombian mission supported the development of community enterprises to

manage the effective delivery and administration of water services, and, with the

United States Army Corps of Engineers, helped to improve water treatment facilities and an aqueduct in Putumayo. In Central America, the USAID/El Salvador

water program has supported the installation of community-operated water systems,

and increased access to clean water for beneficiaries in rural areas to 65 percent

(the country average is 22 percent), representing more than 165,000 people. The

program also helped to include a line item in the water tariff to help pay for conserving the water source and completed construction of three sewage treatment

plants.

WATERSHED MANAGEMENT

Watershed management is an integral and crosscutting component of USAID as- sistance in LAC. In 2004, USAID contributed $18 million for watershed management in LAC which includes integrated water resources management, coastal zone

management, freshwater ecosystems management and industrial water pollution

control. Under the USAID Central American and Mexico (CAM) Strategy and Plan,

for example, integrated water resource management is one of the underlying foundations for all development activities. In Panama, the mission has helped enhance

long-term watershed protection by encouraging participation of civil society, the private sector, and local governments in the management and protection of the Canal

Watershed. In Ecuador, the mission has established a trust fund to finance watershed conservation activities and is working with the Nature Conservancy under the

USAID Parks in Peril Program to protect the Condor Biorreserve, which is the primary source of drinking water for the city of Quito and the greater metropolitan

area. A similar activity is under way in Bolivia.

In the area of coastal zone management, USAID’s Global Development Alliance

with the United Nations Foundation has supported the work of the International

Coral Reef Action Network (ICRAN) to protect and preserve the Mesoamerican

Coral Reef, a World Heritage ecosystem that provides critical habitat for fisheries

in Mexico, Belize, Guatemala, and Honduras. Assistance to ICRAN has provided important research on pollutant circulation patterns, supported sustainable fisheries

practices, and promoted long-term marine and coastal ecotourism. In Jamaica,

USAID’s environmental program has worked on protecting both upland watersheds

and coastal areas. Improvements in faecal coliform levels for example resulted in

five Jamaican beaches recently being accepted into the International Blue Flag certification program, making them more attractive tourist destinations for environmentally conscience travelers from around the globe. The control of industrial water

pollution has also been a key component of USAID assistance.

USAID’s Central America and Caribbean regional environmental programs, as

well as the program in Bolivia, have provided training is such areas as hotels, dairy

products producers, slaughterhouses and tanneries to reduce water use and pollution through the adoption of cleaner technologies and environmental management

systems.

WATER PRODUCTIVITY

In 2004, USAID contributed $5 million in LAC for water productivity which includes irrigation and agriculture-related best management practices, fisheries and

aquaculture, and small-scale hydropower. Launched this past February, USAID supported the Regional Visualization and Monitoring System (SERVIR) for

Mesoamerica. With the U.S. National Aeronautics and Space Administration

(NASA), the Water Center for the Humid Topics of Latin America and the CaribVerDate 11-MAY-2000 13:57 Oct 05, 2005 Jkt 000000 PO 00000 Frm 00178 Fmt 6633 Sfmt 6621 963433.SEN SFORELA1 PsN: SFORELA1
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bean, the World Bank and others, SERVIR mainstreams earth observation information from NASA and other sources by providing accessible data archiving, dynamic

mapping, and support tools to help improve the management of agricultural lands,

freshwater resources, and coastal zones. Elsewhere in Central America, USAID/El

Salvador has successfully promoted on-farm water storage to expand off-season agriculture and the use of drip irrigation systems powered by solar water pumps. In the

Dominican Republic, USAID assistance has helped increase civic participation in environmental protection by training local partners and community organizations on

avian conservation and nondestructive fishing techniques.

RESPONSE OF HON. ROGER NORIEGA TO QUESTION SUBMITTED FOR THE RECORD BY

SENATOR BILL NELSON

Question. Please provide the administration’s specific objections to Senator

DeWine’s Haitian Economic Recovery Opportunity (HERO) Act passed by the Senate

in the 108th Congress.

Answer. We strongly support the people of Haiti. We continue our efforts to help

the Interim Government to fashion a more prosperous economy that produces quality jobs for its people. Clearly, Haiti’s economic development is in the United States

interest. Creating jobs and economic opportunity in Haiti will make Haitians less

dependent on foreign assistance for survival. It will help deter illegal migration and

provide alternatives to drug smuggling as a source of income. It will increase the

government’s revenue base and the country’s overall stability.

The United States has taken broad steps to assist Haiti, including a pledge of

$230 million at the World Bank Donors’ Conference, which included $22 million to

support economic growth and job creation. The textile sector seems to offer the

greatest opportunity to produce new jobs relatively quickly. We must take care,

however, to ensure that American workers do not suffer negative consequences as

we work to help Haiti. While the Senate passed the HERO legislation in the last

Congress that would have granted new textile benefits to Haiti, the House took no

action. We want to work with the Congress to fashion legislation that will find the

right balance between job growth in Haiti and maintaining jobs here at home.

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