```

[Senate Hearing 108-289]
[From the U.S. Government Publishing Office]

                                                 S. Hrg. 108-289
 
      FOREIGN OPERATIONS, EXPORT FINANCING, AND RELATED PROGRAMS 
                  APPROPRIATIONS FOR FISCAL YEAR 2004
=======================================================================

                                HEARINGS

                                before a

                          SUBCOMMITTEE OF THE

            COMMITTEE ON APPROPRIATIONS UNITED STATES SENATE

                      ONE HUNDRED EIGHTH CONGRESS

                             FIRST SESSION

                                   on

                           H.R. 2800/S. 1426

AN ACT MAKING APPROPRIATIONS FOR FOREIGN OPERATIONS, EXPORT FINANCING, 
AND RELATED PROGRAMS FOR THE FISCAL YEAR ENDING SEPTEMBER 30, 2004, AND 
                           FOR OTHER PURPOSES

                               __________

                  Agency for International Development
                          Department of State
                       Nondepartmental Witnesses
                               __________

         Printed for the use of the Committee on Appropriations

 Available via the World Wide Web: http://www.access.gpo.gov/congress/
                                 senate

                      U.S. GOVERNMENT PRINTING OFFICE

85-923                       WASHINGTON : 2004
_______________________________________________________________________
For sale by the Superintendent of Documents, U.S. Government Printing 
Office Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800, 
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DC 20402-0001

                      COMMITTEE ON APPROPRIATIONS

                     TED STEVENS, Alaska, Chairman
THAD COCHRAN, Mississippi            ROBERT C. BYRD, West Virginia
ARLEN SPECTER, Pennsylvania          DANIEL K. INOUYE, Hawaii
PETE V. DOMENICI, New Mexico         ERNEST F. HOLLINGS, South Carolina
CHRISTOPHER S. BOND, Missouri        PATRICK J. LEAHY, Vermont
MITCH McCONNELL, Kentucky            TOM HARKIN, Iowa
CONRAD BURNS, Montana                BARBARA A. MIKULSKI, Maryland
RICHARD C. SHELBY, Alabama           HARRY REID, Nevada
JUDD GREGG, New Hampshire            HERB KOHL, Wisconsin
ROBERT F. BENNETT, Utah              PATTY MURRAY, Washington
BEN NIGHTHORSE CAMPBELL, Colorado    BYRON L. DORGAN, North Dakota
LARRY CRAIG, Idaho                   DIANNE FEINSTEIN, California
KAY BAILEY HUTCHISON, Texas          RICHARD J. DURBIN, Illinois
MIKE DeWINE, Ohio                    TIM JOHNSON, South Dakota
SAM BROWNBACK, Kansas                MARY L. LANDRIEU, Louisiana
                    James W. Morhard, Staff Director
                 Lisa Sutherland, Deputy Staff Director
              Terrence E. Sauvain, Minority Staff Director
                                 ------                                

   Subcommittee on Foreign Operations, Export Financing, and Related 
                                Programs

                  MITCH McCONNELL, Kentucky, Chairman
ARLEN SPECTER, Pennsylvania          PATRICK J. LEAHY, Vermont,
JUDD GREGG, New Hampshire            DANIEL K. INOUYE, Hawaii
RICHARD C. SHELBY, Alabama           TOM HARKIN, Iowa
ROBERT F. BENNETT, Utah              BARBARA A. MIKULSKI, Maryland
BEN NIGHTHORSE CAMPBELL, Colorado    RICHARD J. DURBIN, Illinois
CHRISTOPHER S. BOND, Missouri        TIM JOHNSON, South Dakota
MIKE DeWINE, Ohio                    MARY L. LANDRIEU, Louisiana
TED STEVENS, Alaska (Ex officio)     ROBERT C. BYRD, West Virginia (Ex 
                                         officio)

                           Professional Staff

                               Paul Grove
                            Brendan Wheeler
                         Tim Rieser (Minority)
                        Mark Lippert (Minority)

                            C O N T E N T S

                              ----------                              

                       Wednesday, April 30, 2003

                                                                   Page

Department of State: Office of the Secretary.....................     1

                         Thursday, June 5, 2003

Agency for International Development.............................    69
Nondepartmental witnesses........................................   145

      FOREIGN OPERATIONS, EXPORT FINANCING, AND RELATED PROGRAMS 
                  APPROPRIATIONS FOR FISCAL YEAR 2004

                              ----------                              

                       WEDNESDAY, APRIL 30, 2003

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.
    The subcommittee met at 1:44 p.m., in room SD-192, Dirksen 
Senate Office Building, Hon. Mitch McConnell (chairman) 
presiding.
    Present: Senators McConnell, Stevens, Specter, Gregg, 
Shelby, Bennett, Campbell, Bond, DeWine, Leahy, Inouye, Harkin, 
Mikulski, Durbin, Johnson, and Landrieu.

                          DEPARTMENT OF STATE

                        Office of the Secretary

STATEMENT OF HON. COLIN L. POWELL, SECRETARY OF STATE

             opening statement of senator mitch mc connell

    Senator McConnell. Good afternoon. The Secretary has to 
leave at 3 p.m., so we will limit our opening statements to 
Senator Leahy and myself and the chairman of the full commitee.
    Welcome, Mr. Secretary. Let me begin by expressing my 
gratitude to the President, his entire cabinet, and our 
soldiers and sailors for the quick and decisive victory in 
Iraq. Once again, we have affirmed that we have the best 
trained, equipped, and disciplined military in the world and 
the best leaders on and off the battlefield.
    The victory in Iraq belongs to the people of Iraq, and the 
challenge now falls upon the coalition to repair damaged 
infrastructure, establish democratic institutions, and vest the 
principles of freedom and justice in the consciousness and 
lives of the Iraqi people. While Congress included $2.5 billion 
for these efforts in the war supplemental, the country's 
natural resources provide an advantage that will hopefully 
sustain and accelerate the reform and recovery process. The 
United Nations should immediately end the sanctions against 
Iraq so that the profits from these resources can go directly 
to the people of that country.
    I might just say, Mr. Secretary, I saw a fascinating op-ed 
in the Wall Street Journal a few weeks ago suggesting that one 
way to convince the Iraqi people that they are going to benefit 
from the oil would be to set up a structure similar to what 
they have in the State of Alaska, where every Alaskan gets a 
check each year off of the oil revenue that the State secures.
    Senator Stevens. Not the oil revenue, but income from a 
fund created by a portion of the revenue.
    Senator McConnell. In any event, Alaskans get checks.
    It is a demonstration of their sharing the wealth, shall I 
say.
    While some believe that political transition in Iraq alone 
will be a harbinger of reform throughout the region, a more 
effective catalyst for change comes in the form of a trinity. 
First, a quick and successful democratic transition. Second, a 
workable road map for security and peace between the 
Palestinians and the Israelis that includes new Palestinian 
leadership, that, first and foremost, actively combats 
terrorism. And third, a bold, new approach to America's support 
of political and legal reforms across the region.
    If this trinity is realized, the impetus for political 
reform throughout the Middle East will be inevitable and 
unstoppable. The Arab street will find a voice in democratic 
institutions and through responsive leaders chosen by ballots, 
not bullets, bullying, or Israel bashing.
    The state of political reform in Egypt, including adherence 
to the rule of law and the functioning of democratic 
institutions, provides a good barometer of democratic change in 
the region. I believe that as goes Egypt, so goes the Middle 
East.
    Shifting to North Korea, the hermit kingdom's ongoing 
bluster and its appalling repression of the North Korean people 
continue to be a grave concern to everyone. Although attention 
to North Korea's nuclear program may have been overshadowed by 
military operations in Iraq, I am hopeful the State Department 
will continue to focus on the myriad challenges posed by this 
nation. From nuclear weapons to narcotics trafficking and a 
potential Northeast Asian nuclear arms race, the Korean regime 
poses a growing and dangerous threat to its neighbors and to 
us. Negotiating with North Korea is no small or easy task. This 
is a country that makes France look trustworthy.
    Let me make a few comments on the fiscal year 2004 request 
for foreign operations. Over $2 billion is requested for four 
new accounts that potentially offer more rapid responses to 
global crises. It would be helpful to the subcommittee if you 
could summarize the objectives of each of these accounts and 
provide greater detail on the management of these funds and 
overlap, if any, with existing foreign assistance programs.
    The funding request has again been reduced for assistance 
for Eastern Europe and the Baltic States and assistance for the 
NIS by $86 million and $179 million, respectfully, below the 
fiscal year 2003 enacted level. While I fully support 
graduating countries that receive U.S. aid, I remain concerned 
that too steep and rapid cuts may have unintended consequences.
    A case in point is Serbia. The recent assassination of the 
Serbian Prime Minister has spurred a massive crackdown on 
organized crime, some of which is linked to cronies of 
Milosevic. It is clear that political, legal, and economic 
reforms are still needed in Serbia, and instead of reducing 
assistance by $15 million, we should be considering additional 
support for programs and activities that actually bolster 
necessary reforms.
    Let me wrap it up with just a few comments on Burma and 
Cambodia. As predicted, we have not seen progress in the 
dialogue between the State Peace and Development Council, SPDC, 
and Aung San Suu Kyi since her release from house arrest. The 
news out of Burma reports no signs of reconciliation, only 
continued repression of the people of Burma by the SPDC, brutal 
rapes of ethnic girls and women, and unwillingness to meet with 
the NLD, the U.N. special envoy, and ethnic nationalities. I 
applaud the State Department's recommendation to the White 
House that the regime in Burma should not be certified as 
making progress or cooperating with the U.S. on narcotics 
matters. It is clear that additional sanctions against the 
junta in Rangoon are warranted, and I intend to introduce 
legislation to this effect in the very near future.

                           prepared statement

    In Cambodia, the attacks earlier this year against Thai 
interests in Phnom Penh, including the destruction of the Thai 
embassy, and the continuing assassination of opposition 
activists, monks, and judges underscores the lawlessness and 
impunity that has become the hallmark of the ruling Cambodian 
People's Party. In such a climate, talk of a Khmer Rouge 
tribunal using Cambodian courts and judges makes no sense. As 
parliamentary elections are scheduled in 3 months' time, I 
would encourage you to seize every opportunity to strengthen 
the hand of the democratic opposition in the run up to the 
polls.
    With that, let me turn to Senator Leahy.
    [The statement follows:]
             Prepared Statement of Senator Mitch McConnell
    Welcome, Mr. Secretary. It is always a pleasure to have you appear 
before this Subcommittee.
    Let me begin by expressing my gratitude to the President, his 
entire Cabinet, and our soldiers and sailors for the quick and decisive 
victory in Iraq. Once again, we have affirmed that we have the best 
trained, equipped and disciplined military in the world, and the best 
leaders on--and off--the battlefield.
    The victory in Iraq belongs to the people of Iraq, and the 
challenge now falls upon the coalition to repair damaged 
infrastructure, establish democratic institutions, and vest the 
principles of freedom and justice in the consciousness and lives of the 
Iraqi people. While Congress included $2.5 billion for these efforts in 
the war supplemental, the country's natural resources provide an 
advantage that will hopefully sustain and accelerate the reform and 
recovery process. The United Nations should immediately end the 
sanctions against Iraq so that profits from these resources can go 
directly to the people of Iraq.
    While some believe that political transition in Iraq alone will be 
a harbinger of reform throughout the region, a more effective catalyst 
for change comes in the form of a trinity: (1) a quick and successful 
democratic transition in Iraq; (2) a workable roadmap for security and 
peace between Palestinians and Israelis that includes new Palestinian 
leadership that, first and foremost, actively combats terrorism; and, 
(3) a bold, new approach to America's support of political and legal 
reforms across that region.
    If this trinity is realized, the impetus for political reforms 
throughout the Middle East will be inevitable and unstoppable. The Arab 
street will find a voice in democratic institutions and through 
responsive leaders chosen by ballots--not bullets, bullying, or Israel 
bashing.
    The state of political reform in Egypt, including adherence to the 
rule of law and the functioning of democratic institutions, provides a 
good barometer of democratic change in the region. I believe that as 
goes Egypt, so goes the Middle East.
    Shifting to North Korea, the Hermit Kingdom's ongoing bluster and 
its appalling repression of the North Korean people continue to be a 
grave concern to many of us. Although attention to North Korea's 
nuclear program may have been overshadowed by military operations in 
Iraq, I am hopeful the State Department will continue to focus on the 
myriad challenges posed by this nation. From nuclear weapons to 
narcotics trafficking and a potential North East Asian nuclear arms 
race, the North Korean regime poses a growing and dangerous threat to 
its neighbors and the United States.
    Negotiating with North Korea is no small or easy task. This is a 
country that makes France look trustworthy.
    Let me make a few comments on the fiscal year 2004 request for 
foreign operations. Over $2 billion is requested for four new accounts 
that potentially offer more rapid responses to global crises. It would 
be helpful to the Subcommittee if you could summarize the objectives of 
each of these new accounts--the Millennium Challenge Account, the U.S. 
Emergency Fund for Complex Foreign Crises, the Famine Fund, and the 
Global AIDS Initiative--and provide greater detail on the management of 
these funds, and overlap, if any, with existing foreign assistance 
programs.
    The funding request has again been reduced for the Assistance for 
Eastern Europe and Baltic States (SEED) and Assistance for Independent 
States (NIS) accounts by $86 million and $179 million, respectively, 
below the fiscal year 2003 enacted levels. While I fully support 
graduating countries that receive U.S. foreign aid, I remain concerned 
that too steep and rapid cuts may have unintended consequences.
    A case in point is Serbia. The recent assassination of Serbian 
Prime Minister Zoran Djindic has spurred a massive crackdown on 
organized crime, some of which is linked to cronies of Slobodan 
Milosevic. It is clear that political, legal and economic reforms are 
still needed in Serbia, and instead of reducing assistance by $15 
million, we should be considering additional support for programs and 
activities that the bolster these necessary reforms.
    Let me close with a few brief comments on Burma and Cambodia. As 
predicted, we have not seen progress in the dialogue between the State 
Peace and Development Council (SPDC) and Daw Aung San Suu Kyi since her 
release from house arrest. The news out of Burma reports no signs of 
reconciliation--only continued repression of the people of Burma by the 
SPDC, brutal rapes of ethnic girls and women, and unwillingness to meet 
with the NLD, the U.N. special envoy, and ethnic nationalities. I 
applaud the State Department's recommendation to the White House that 
the regime in Burma should not be certified as making progress or 
cooperating with the United States on counternarcotics matters. It is 
clear that additional sanctions against the junta in Rangoon are 
warranted, and I intend to introduce legislation to this effect in the 
very near future.
    In Cambodia, the attacks earlier this year against Thai interests 
in Phnom Penh--including the destruction of the Thai Embassy--and the 
continuing assassination of opposition activists, monks, and judges 
underscores the lawlessness and impunity that has become the hallmark 
of the ruling Cambodian People's Party. In such a climate, talk of a 
Khmer Rouge tribunal using Cambodian courts and judges makes no sense. 
As parliamentary elections are scheduled in three months time, I 
encourage the State Department to seize every opportunity to strengthen 
the hand of the democratic opposition in the run up to these polls.
    Thank you again, Mr. Secretary, for appearing before this 
Subcommittee and I look forward to your testimony.

             OPENING STATEMENT OF SENATOR PATRICK J. LEAHY

    Senator Leahy. Thank you, Mr. Chairman, and Mr. Secretary, 
I welcome you to the first hearing of the subcommittee this 
year. Many people here don't know about the exclusive club that 
Secretary Powell and I belong to. We both had the honor of 
speaking at the Mitch McConnell Center for Political Leadership 
in Louisville, Kentucky. We also, the Secretary and his lovely 
wife and my wife and I were married the same year, the same 
day, virtually the same hour.
    I appreciated, Mr. Chairman, the opportunity that you gave 
to both the Secretary and myself. I also appreciate the 
Louisville Slugger they gave me. I am not much of a baseball 
player, but I have been practicing. I was actually thinking of 
changing my career, until realized that was your real motive in 
having me come down.
    But I know the Secretary has a lot of demands on his time, 
and I am one who feels that President Bush made a superb choice 
in selecting the Secretary for this job. I think he has been an 
invaluable voice for our country.
    We have worked hard in this subcommittee to give you the 
funds you need. We have exceeded the administration's budget 
request for foreign assistance every year. Senator McConnell 
and I worked closely to get bipartisan support for that. I hope 
that trend continues, because we face a lot of challenges.
    The President's fiscal year 2004 budget is a step forward, 
but even if we appropriate every dime of it, it is still less 
than 1 percent of the total Federal budget. I don't think we 
can mount a credible challenge to global poverty, international 
terrorism, and all the other threats we face. We need more 
resources.
    I am concerned about the development assistance account, 
which would be cut under this budget. The funding for child 
survival and health programs, including funding to combat 
infectious diseases, would be cut, and that is wrong. Aid to 
Russia would be cut. Aid to our Central American neighbors 
would remain a fraction of what it should be. There are a 
number of areas, from promoting renewable energy to building 
democracy, where we could do much more.
    I know that the State Department's leading role in foreign 
policy goes back more than two centuries, when one of your 
predecessors, Thomas Jefferson, was the first Secretary of 
State. I am concerned that that role is under assault, 
including by some within the administration. Most recently, it 
was challenged by former Speaker of the House Newt Gingrich, 
now a member of the Defense Policy Board. He called the State 
Department a ``broken instrument of diplomacy.'' I reject that 
view. I believe his attacks against people who work for you are 
unfair and misguided.
    Like any government agency or congressional bodies and many 
private companies, there are things that could be done better, 
of course. We all know that. But there are many, many things 
that State Department employees do every single day that are 
not reported in the news, but they advance U.S. interests, they 
help make the world safer, and you and I know that you have 
some of the most talented men and women in the world working 
for you.
    Now, Mr. Gingrich, like some in the administration who 
promote unilateralism and favor military force over diplomacy, 
claimed the war in Iraq involved 6 months of diplomatic failure 
and 1 month of military success. That is a misstatement of 
history. Diplomacy achieved important results, including a 
unanimous vote in the U.N. Security Council. It was senior 
Pentagon officials who engaged in name-calling, such as ``Old 
Europe,'' and exacerbated tensions with key allies, making the 
State Department's job more difficult.
    The war in Iraq has raised serious questions about the 
appropriate roles of the Pentagon and State Department in 
diplomacy and managing foreign aid programs. Over the past 
couple of years, we have seen the steady encroachment by the 
Pentagon into areas where the State Department and USAID have 
far more expertise, in formulating U.S. foreign policy and 
post-conflict reconstruction.
    The Defense Department is second to none at fighting wars. 
I agree with Senator McConnell on that. We have the best men 
and women, the best Navy, the best Army, the best Air Force, 
the best Marine Corps in the world. I also point out that a lot 
of that, though, began during a time when you, Mr. Secretary, 
were Chairman of the Joint Chiefs of Staff. The Pentagon has a 
role to play after conflicts end, but the State Department 
should have the final say when it comes to foreign policy and 
foreign assistance. It is disturbing that key officials in the 
administration seem determined to weaken the State Department.

                           prepared statement

    I have a number of questions, and because of the shortness 
of time, I will pass on the others to your legislative affairs 
people, who I have found to be excellent in getting back to us 
with the information we need. Thank you, Mr. Chairman.
    [The statement follows:]
             Prepared Statement of Senator Patrick J. Leahy
    Mr. Secretary, welcome to the first hearing of this Subcommittee 
this year. I should begin by pointing out for those here who may not 
know, that Secretary Powell and I are both members of a very 
distinguished, selective club. We both had the honor of speaking at the 
Mitch McConnell Center for Political Leadership in Louisville, 
Kentucky.
    I very much appreciated that opportunity. And I especially 
appreciated the gift of the Louisville Slugger baseball bat with my 
name on it. I have never been much of a baseball player, but Senator 
McConnell's gift might inspire me to consider a new career--maybe that 
was his reason for inviting me down there.
    On a serious note, thank you, Mr. Secretary, for testifying today. 
I know you have a lot of other demands on your time. But I also know 
you agree that without the budget this Committee appropriates, you 
would not have the resources to do much of anything.
    As I have said before, President Bush made a superb choice in 
selecting you for this position. You are doing an excellent job. You 
have been an invaluable voice of reason and moderation for the 
Administration's foreign policy.
    This Subcommittee has worked hard to give you the funds you need. 
We have exceeded the Administration's budget request for foreign 
assistance every year. I hope this trend continues, because I do not 
believe we are yet responding adequately to the many global challenges 
we face.
    The President's fiscal year 2004 budget request is a step forward, 
but even if we appropriate every dime he has asked for it will still 
amount to only about 1 percent of the Federal budget. How can we 
possibly mount a credible challenge to global poverty, international 
terrorism, and all the other threats we face, with so few resources? We 
cannot.
    I am concerned about the Development Assistance account, which 
would be cut. Funding for Child Survival and Health Programs, including 
to combat infectious diseases, would be cut. This is foolhardy. Aid to 
Russia would be cut. Aid to our Central American neighbors would remain 
a fraction of what it should be. And there are many areas--from 
promoting renewable energy to building democracy, where we should be 
doing far more. We are missing so many opportunities.
    Mr. Secretary, this Subcommittee knows well that the State 
Department's leading role in foreign policy dates back more than two 
centuries, when Thomas Jefferson became the first Secretary of State. 
But today that role is under assault, including by some within the 
Administration. Most recently, it was challenged by former Speaker of 
the House Newt Gingrich, now a member of the Defense Policy Board, when 
he called the State Department a ``broken instrument of diplomacy.''
    I reject that view, and I believe his attacks against people who 
work for you are unfair and misguided.
    Like any government agency and many private companies, there are 
things that the State Department could do better. I know that you are 
working on that. But there are many, many things that State Department 
employees do every day, that are not reported on CNN, to advance U.S. 
interests and help to make the world safer.
    Mr. Gingrich, like those in the Administration who promote 
unilateralism and favor military force over diplomacy, claimed that the 
war in Iraq involved ``six months of diplomatic failure and one month 
of military success.'' That is a misstatement of history.
    I believe the Administration abandoned the diplomatic track too 
soon. Diplomacy achieved important results, including a unanimous vote 
in the U.N. Security Council. It was senior Pentagon officials who 
engaged in name-calling such as ``Old-Europe'' and exacerbated tensions 
with key allies--making the State Department's job more difficult.
    Like everyone in this room, I am glad that Saddam Hussein is no 
longer in power. However, had we been more patient, I believe we could 
have dealt with Saddam Hussein without damaging relations with 
important allies. These were not mutually exclusive goals.
    The war in Iraq has raised serious questions about the appropriate 
roles of the Pentagon and the State Department in diplomacy and in 
managing foreign aid programs. Over the past couple of years, we have 
seen the steady encroachment by the Pentagon into areas where the State 
Department and USAID have far more expertise--from formulating U.S. 
foreign policy to post-conflict reconstruction.
    The Defense Department is second to none at fighting wars. It also 
has a role to play after conflicts end, but the State Department should 
have the final say when it comes to foreign policy and foreign 
assistance. It is disturbing that key officials in this Administration 
seem determined to weaken the State Department.
    Mr. Secretary, I will only have time to ask a few of the many 
questions I have today. Those that I do not have time for I will pass 
on to your Legislative Affairs staff, who do an excellent job of 
quickly getting us the information we ask for. We appreciate that very 
much.

    Senator McConnell. Thank you, Senator Leahy.
    Mr. Secretary.

               SUMMARY STATEMENT OF HON. COLIN L. POWELL

    Secretary Powell. Thank you very much, Mr. Chairman. Thank 
you for your opening remarks and observations, and thank you 
also, Senator Leahy, for your comments.
    Before beginning my brief oral statement, I would like to 
offer a full statement for the record, Mr. Chairman.
    Senator McConnell. Without objection, it will be included 
in the record.
    Secretary Powell. And let me respond to a few of the points 
that were made in your opening statements, if I may.
    With respect to oil revenue and how to use it in Iraq, the 
interesting concept that has been used in Alaska for so many 
years is under consideration. We are looking at that. Senator 
Stevens has educated me over the years as to the merit of this 
approach to the use of oil, a portion of the revenues going 
into a fund which then can be used to compensate the people in 
a way that they can make a choice as to how the wealth of the 
state is being used. I think that is a concept that applies in 
the case of Iraq, at least for consideration.
    The ultimate judgment, of course, will be up to the Iraqi 
people. We made it clear that this is oil that belongs to them, 
for them, by them. They will figure out how to use it and we 
will help them to get started down the road to responsible 
stewardship of this marvelous treasure that the Iraqi people 
own.
    I am sure, in the course of our questioning I can get into 
specific answers on Iraq, the Middle East, the Middle East 
peace process and what has happened in the last 24 hours with 
respect to the appointment of a Palestinian Prime Minister. 
Earlier today, as a result of that appointment and his 
confirmation by the PLC, the Palestinian legislature, we 
presented the Road Map. Earlier this morning, Ambassador 
Kurtzer, Ambassador to Israel, presented the Road Map to Prime 
Minister Sharon. Representatives of the courts have presented 
the Road Map to the Prime Minister now, first Prime Minister of 
the Palestinian Authority, Mr. Mahmoud Abbas. I had an 
opportunity to call both Prime Ministers early this morning to 
encourage them to do everything in their respective powers to 
make sure we get a good start down this path to peace. A new 
opportunity is being created. It is an opportunity that must 
not be lost, and I was very pleased at the response from both 
Prime Ministers, who are anxious to move forward.
    Senator, I do share your concerns about Burma and Cambodia, 
as well. I will be passing through Cambodia briefly in a few 
weeks' time, in a month and a half or so, attending the ASEAN 
regional forum meetings there. I won't be there for a very long 
period of time, but enough to at least talk to my ASEAN 
colleagues about the situation in the country we will be 
visiting and also have some conversation with the leadership 
there and, once again, express our concerns to them.
    Senator Leahy, let me especially thank you for your 
comments about the Department of State, and let me express my 
thanks to this committee for the confidence that you have 
placed in the men and women of the State Department. Just as we 
have the finest soldiers, sailors, airmen, and marines, I can 
tell you, we have the finest foreign service officers and civil 
servants and foreign service nationals working for the interest 
of the United States of America.
    When I became Secretary, I had about five reports on my 
desk of improvements that people suggested could be made in the 
State Department from different task forces and panels. I had 
been on one of those panels and had made the recommendations 
for that panel, and now I am the Secretary of State to 
implement them. So we are always willing to receive helpful, 
constructive comment as to how to improve our operation. With 
the support of this committee and other committees in the 
Congress and the Congress, we have done a lot with respect to 
recruiting, with respect to security, with respect to putting a 
sense of purpose and morale into our troops, esprit de corps in 
all the members of our State Department family.
    I send young State Department officers out to the most 
difficult places in the world to serve their country, taking 
their families with them where there may not be any hospital 
care, where there may not be any school for their kids, or 
where they are separated from their families for a longer 
period of time than the average soldier gets separated from his 
family. They go willingly and they go with a smile on their 
face because they are happy to serve the American people.
    Now, ever since Thomas Jefferson was sworn in as the first 
Secretary of State, an uninterrupted line of Secretaries of 
State, from number 1 to number 65, have been criticized at one 
time or another for being diplomats: for trying to find 
peaceful solutions, to building friendships around the world, 
to creating alliances. That is what we do. We do it damn well, 
and I am not going to apologize to anybody. I am on the offense 
for the people who work in my Department, doing a great job, 
and if you come after them, come after them with legitimate 
criticism and we will respond to that. We are not above 
criticism.
    But if you come after us just to come after us, you are in 
for a fight. I am going to fight back and I am going to protect 
my Department and my people. I am also going to defend the 
policies of the President, which were attacked even more 
vigorously than any sideways attack on the contributions and 
the loyalty and the dedication and the courage and the 
willingness to serve of the men and women of the State 
Department. Hopefully, we can pursue the issue of how the State 
Department is functioning in a reasonable manner, with 
constructive comments welcomed and open debate taking place.
    With respect to what is going on within the administration, 
it is not the first time I have seen discussions within the 
administration between one Department or another. I have been 
in four straight administrations at a senior level, and thus it 
has been and thus it has always been, and thus it should be. 
There should be tension within the national security team, and 
from that tension arguments are surfaced for the President, and 
the one who decides, the one who makes the foreign policy 
decisions for the United States of America is not the Secretary 
of State or the Secretary of Defense or the National Security 
Advisor. It is the President. It is our job, my job and Don's 
job and Condi's job and the Vice President's job and George 
Tenet's job to give the President our best advice, and the 
President is the one who decides.
    Complicated issues come along. How do you go into a place 
like Iraq, which is a military operation that has to be run by 
the military. The initial reconstruction period has to be under 
the control of the military and there has to be unity of 
command and purpose. We fully appreciate and support that. I 
have, I think it is now five ambassadors working for General 
Franks and for Jay Garner.
    But in due course, as a government is set up, the interim 
authority being the embryonic state of that government, as it 
grows into a fully representative government for the people of 
Iraq, slowly but surely, that will shift over. USAID and non-
governmental organizations and bodies of the United Nations and 
other international institutions will play a much more 
important and significant role during that transition. And so 
will the State Department, as we put in place our diplomatic 
presence, as we put in place an embassy, and as we get back to 
normal sorts of relations.
    Now, in this transition, the gears will grind from time to 
time and it is my job and Don's job and Condi and the Vice 
President to put some oil on those gears to make sure it isn't 
a distraction. All of these things are manageable, and what we 
have is the finest group of young men and women working for the 
security of this nation and our foreign policy interests, 
whether they are wearing a suit similar to mine or wearing a 
suit similar to the one I used to wear. We are all part of one 
team trying to get the job done for the American people.
    Mr. Chairman, if I may, I will briefly summarize my 
statement because I think you have had a chance to examine it. 
It has been before the members of the committee for some time 
now.
    I am pleased to appear, to testify in support of the 
President's International Affairs budget for fiscal year 2004. 
Funding requested for the next fiscal year for the Department, 
USAID, and other foreign affairs agencies is $28.5 billion. The 
funding will allow the United States to target security and 
economic assistance to sustain key countries supporting us in 
the war on terrorism; it will allow us to launch the Millennium 
Challenge Account, a new partnership that I think 
revolutionizes the way in which we help the neediest of nations 
around the world who are committed to democracy and the free 
enterprise system.
    The budget will also allow us to strengthen the United 
States' commitment and global commitment to fighting HIV/AIDS 
and other humanitarian hardships. It will allow us to combat 
illegal drugs in the Andean region, as well as bolster 
democracy in Colombia. I will be meeting later this afternoon 
with President Bush and President Uribe to get a report from 
President Uribe on his strategy for going after narco-
traffickers in Colombia.
    It will also allow us to reinforce America's world class 
diplomatic force. I have often said to this committee that I am 
not only foreign policy advisor, but leader and manager of the 
Department, and I take that charge seriously. We have done a 
great job in starting to hire people again. In the 3 years that 
I have been responsible for the budget and in the 25 months 
that I have been Secretary of State, over that period, we have 
brought in a little over 1,100 new hires over and above 
attrition.
    We are finally putting blood back into the Department, new 
people coming in. Tens upon tens of thousands of young 
Americans are signing up to take the Foreign Service exam. I 
swore in another class last week. Three weeks ago on a 
Saturday, 20,000 Americans assembled to take the Foreign 
Service exam at sites all over the country. They want to be a 
part of this team. They are proud of what this team is doing 
and they want to be a part of it, and as a result of the 
generosity and understanding and support of the Congress, we 
are now able to hire people.
    For those who criticize the Department who were in Congress 
in the 1990s, they ought to take a look at the record as to how 
they spent part of the 1990s cutting the budget of the 
Department of State and prohibiting the Department of State 
from hiring individuals that were needed to keep strength and 
vitality within the Department.
    I hope that you will continue to support me in those 
efforts, not only to bring first class people into a first 
class force, but also to bring state-of-the-art information 
technology to the Department. That was also one of my 
commitments. I wanted to make sure that every member of the 
Department of State anywhere in the world had access to the 
Internet. We are 24/7, instantaneous communications, 
instantaneous decision making. We can't be typing out cables on 
teletypes any longer. Before I leave as Secretary of State, I 
want the entire Department wired so we are talking to each 
other electronically and instantaneously through the power of 
the Internet in a completely secure, classified manner, and 
every member of the Department hooked up.
    I also committed myself and to the President that we would 
wipe the slate clean and straighten out our overseas building 
operation. We have done that, and I think we can all be proud 
of the job that General Williams and his great team have done. 
Our embassies are coming in on time, under cost, and secure, 
and beyond that, they are attractive and we are meeting the 
standards that the Congress set for us. I need your continued 
support and the support of all Members of Congress for embassy 
security and construction and other matters related to the 
infrastructure needs of the Department.
    The number one priority with respect to our Foreign 
Operations budget is to fight and win the global war on 
terrorism. This budget furthers this goal by providing 
economic, military, and democracy assistance to key foreign 
partners and allies, including $4.7 billion to countries that 
have joined us in the war on terrorism. Of this amount, the 
President's budget provides $657 million for Afghanistan, $460 
million for Jordan, $395 million for Pakistan, $255 million for 
Turkey, $136 million for Indonesia, and $87 million for the 
Philippines.
    In Afghanistan, the funding will be used to fulfill our 
commitment to rebuild Afghanistan's road network, especially 
the important ring road that really connects the country. And 
now that warm weather is there, paving will begin very soon and 
I hope we will have most of the work done by the end of the 
year.
    In addition, we are using funding of this kind to establish 
security throughout the country and putting in place an Afghan 
police force, border guards, and working with the Pentagon on 
the creation of an Afghan national army. Our assistance will be 
coordinated with the Afghan government. We want to make sure 
the money is seen as going to the central government to empower 
President Karzai. We are also working with other international 
donors and with the United Nations.
    I want to emphasize our efforts to decrease the threats 
posed by terrorist states, by terrorist groups, rogue states, 
other non-state actors with regard to weapons of mass 
destruction and related technology. We have to strengthen our 
partnerships with countries that share our views in dealing 
with the threat of terrorism and resolving regional conflicts.
    The budget also promotes international peace and prosperity 
by launching the Millennium Challenge Account. This will be an 
independent government corporation. It will have a board that I 
will chair with other cabinet officers supervising the work of 
the corporation. There is a transition team now in the 
Department of State starting to put the corporation together 
and we will be briefing the Congress regularly as this work 
proceeds.
    As President Bush told African leaders earlier this year, 
this aid will go to nations that are committed to economic 
freedom, democracy, rooting out corruption, making sure that 
societies are resting on the rule of law, and which have 
respect for the rights of their people. They just need help to 
get going, to get started, to get a leg up so that they can 
then attract the kind of investment and participate in the kind 
of global trading activity needed to generate wealth within 
their country.
    The President's budget request also offers hope and a 
helping hand to countries facing health catastrophes, poverty, 
and despair. The budget includes more than $1 billion to meet 
the needs of refugees and internally displaced peoples. The 
budget also provides more than $1.3 billion to combat the 
global HIV/AIDS epidemic, the worst weapon of mass destruction 
on the face of the earth today. The President's total budget 
for HIV/AIDS is over $2 billion, which includes the first 
year's funding for the new emergency plan for HIV/AIDS relief.
    The budget also includes almost half-a-billion dollars for 
Colombia. The funding will support Colombian President Uribe's 
unified campaign against terrorists, and the campaign is also 
now directed against terrorists and the drug trade that fuels 
the activities of terrorists. The aim is to secure democracy, 
extend security, and restore economic prosperity to Colombia. 
Our total Andean counter-drug initiative is $731 million, and 
that includes restarting the air bridge denial program and 
stepped up eradication in alternative development efforts and 
technical assistance to strengthen Colombia's police and 
judicial institutions.
    Mr. Chairman, you talked about the Middle East and why we 
have to move forward and bring hope to those people. In our 
budget, we have included $145 million for the Middle East 
Partnership Initiative. This initiative gives us a framework 
and funding for working with the Arab world, to expand 
educational and economic opportunities, empower women, and 
strengthen civil society and the rule of law.
    The peoples and governments of the Middle East face 
daunting challenges. Their economies are stagnant, unable to 
provide the jobs needed for millions of young people who are 
entering the workplace each year. Too many of their governments 
appear closed and unresponsive to the needs of their citizens 
and their schools are not equipping students to succeed in 
today's globalized world.
    In the programs these dollars will fund, we will work with 
our Nation's groups and individuals to bridge the jobs gap with 
economic reform, business investment, and private sector 
development. We will close the freedom gap with projects to 
strengthen civil society, expand political participation, and 
lift the voices of women, and we will bridge the knowledge gap 
with better schools and more opportunity for higher education.
    Finally, Mr. Chairman, I want to address the issue of 
hunger, famine, and food aid. Historically, America has been 
the largest donor of assistance for victims of famine and food 
emergencies. Thanks to the help of the Appropriations 
Committees, Congress provides $1.44 billion in urgently needed 
Public Law 480 Title II food aid for fiscal year 2003. Our 2004 
food aid request of $1.19 billion will be complemented with a 
new famine fund, one of the funds that you touched on, sir, a 
famine fund initiative of $200 million. This initiative will 
provide emergency food grants for support to meet crisis 
situations on a case-by-case basis, giving us that extra 
flexibility to respond where needed. I really need this fund. 
Too often, I find when faced with a sudden problem, I am 
robbing Peter to pay Paul and someone comes up short. This will 
give me and the President the needed flexibility to respond to 
crises.

                           prepared statement

    Mr. Chairman, that ends my opening remarks and I am now 
pleased to take your questions or respond in depth to any of 
the particular issues you raise in your opening statements.
    Senator McConnell. Thank you, Mr. Secretary.
    [The statement follows:]
                 Prepared Statement of Colin L. Powell
    Mr. Chairman, members of the subcommittee, I am pleased to appear 
before you to testify in support of the President's International 
Affairs Budget for fiscal year 2004. Funding requested for fiscal year 
2004 for the Department of State, USAID, and other foreign affairs 
agencies is $28.5 billion.
    The President's Budget will allow the United States to:
  --Target security and economic assistance to sustain key countries 
        supporting us in the war on terrorism and helping us to stem 
        the proliferation of weapons of mass destruction;
  --Launch the Millennium Challenge Account--a new partnership 
        generating support to countries that rule justly, invest in 
        their people, and encourage economic freedom;
  --Strengthen the United States and global commitment to fighting HIV/
        AIDS and alleviating humanitarian hardships;
  --Combat illegal drugs in the Andean Region of South America, as well 
        as bolster democracy in one of that region's most important 
        countries, Colombia; and
  --Reinforce America's world-class diplomatic force, focusing on the 
        people, places, and tools needed to promote our foreign 
        policies around the world.
    I am particularly proud of the last bullet, Mr. Chairman, because 
for the past two years I have concentrated on each of my jobs--primary 
foreign policy advisor to the President and Chief Executive Officer of 
the State Department.
    I know this subcommittee's specific oversight responsibilities lie 
in the area of Foreign Operations, but I also know that you are all 
members of the larger Appropriations Committee. In that capacity, I ask 
for your strong support for funding for my CEO initiatives. And I would 
like to highlight for you three of the most important of those 
initiatives.
          the ceo responsibilities: taking care of operations
    First, we have been reinforcing our diplomatic force for two years 
and we will continue in fiscal year 2004. We will hire 399 more 
professionals to help the President carry out the nation's foreign 
policy. This hiring will bring us to the 1,100-plus new foreign and 
civil service officers we set out to hire over the first three years to 
bring the Department's personnel back in line with its diplomatic 
workload. Moreover, completion of these hires will allow us the 
flexibility to train and educate all of our officers as they should be 
trained and educated. So I am proud of that accomplishment and want to 
thank you for helping me bring it about.
    Second, I promised to bring state-of-the-art communications 
capability to the Department--because people who can't communicate 
rapidly and effectively in today's globalizing world can't carry out 
our foreign policy. We are approaching our goal in that regard as well. 
In both unclassified and classified communications capability, 
including desk-top access to the Internet for every man and woman at 
State, we will be there at the end of 2003. The budget before you will 
sustain these gains and continue our information technology 
modernization effort.
    Finally, with respect to my CEO role, I wanted to sweep the slate 
clean and completely revamp the way we construct our embassies and 
other overseas buildings, as well as improve the way we secure our men 
and women who occupy them. As you well know, that last task is a long-
term, almost never-ending one, particularly in this time of heightened 
terrorist activities. But we are well on the way to implementing both 
the construction and the security tasks in a better way, in a less 
expensive way, and in a way that subsequent CEOs can continue and 
improve on.
    Mr. Chairman, the President's fiscal year 2004 discretionary 
request for the Department of State and Related Agencies is $8.497 
billion. As you review this funding in the larger committee, I ask for 
your support for these dollars.
    Let me turn now to your primary oversight responsibility, Foreign 
Operations.
    the foreign policy advisor responsibilities: funding america's 
                       diplomacy around the world
    The fiscal year 2004 budget proposes several initiatives to advance 
U.S. national security interests and preserve American leadership. The 
fiscal year 2004 Foreign Operations budget that funds programs for the 
Department State, USAID and other foreign affairs agencies is $18.8 
billion. Today, our number one priority is to fight and win the global 
war on terrorism. The budget furthers this goal by providing economic, 
military, and democracy assistance to key foreign partners and allies, 
including $4.7 billion to countries that have joined us in the war on 
terrorism.
    The budget also promotes international peace and prosperity by 
launching the most innovative approach to U.S. foreign assistance in 
more than forty years. The new Millennium Challenge Account (MCA), an 
independent government corporation funded at $1.3 billion will redefine 
``aid''. As President Bush told African leaders meeting in Mauritius 
recently, this aid will go to ``nations that encourage economic 
freedom, root out corruption, and respect the rights of their people.''
    Moreover, this budget offers hope and a helping hand to countries 
facing health catastrophes, poverty and despair, and humanitarian 
disasters. It provides $1.345 billion to combat the global HIV/AIDS 
epidemic, TB, and Malaria; more than $1 billion to meet the needs of 
refugees and internally displaced peoples; and $200 million in 
emergency food assistance to support dire famine needs. In addition, 
the budget includes a new $100 million proposal to enable swift 
responses to complex foreign crises, including support for peace and 
humanitarian intervention operations to prevent or respond to foreign 
territorial disputes, armed ethnic and civil conflicts that pose 
threats to regional and international peace, and acts of ethnic 
cleansing, mass killing, or genocide.
    Mr. Chairman, let me give you some details.
    The United States is successfully prosecuting the global war on 
terrorism on a number of fronts. We are providing extensive assistance 
to states on the front lines of the anti-terror struggle. Working with 
our international partners bilaterally and through multilateral 
organizations, we have frozen more than $110 million in terrorist 
assets, launched new initiatives to secure global networks of commerce 
and communication, and significantly increased the cooperation of our 
law enforcement and intelligence communities. Afghanistan is no longer 
a haven for al-Qaeda. We are now working with the Afghan Authority, 
other governments, international organizations, and NGOs to rebuild 
Afghanistan. Around the world we are combating the unholy alliance of 
drug traffickers and terrorists who threaten the internal stability of 
countries. We are leading the international effort to prevent weapons 
of mass destruction from falling into the hands of those who would do 
harm to us and others. At the same time, we are rejuvenating and 
expanding our public diplomacy efforts worldwide.
                     assistance to frontline states
    The fiscal year 2004 International Affairs budget provides 
approximately $4.7 billion in assistance to the Frontline States, which 
have joined with us in the war on terrorism. This funding will provide 
crucial assistance to enable these countries to strengthen their 
economies, internal counter-terrorism capabilities and border controls.
    Of this amount, the President's Budget provides $657 million for 
Afghanistan, $460 million for Jordan, $395 million for Pakistan, $255 
million for Turkey, $136 million for Indonesia, and $87 million for the 
Philippines. In Afghanistan, the funding will be used to fulfill our 
commitment to rebuild Afghanistan's road network; establish security 
through a national military and national police force, including 
counter-terrorism and counter-narcotics components; establish broad-
based and accountable governance through democratic institutions and an 
active civil society; ensure a peace dividend for the Afghan people 
through economic reconstruction; and provide humanitarian assistance to 
sustain returning refugees and displaced persons. United States 
assistance will continue to be coordinated with the Afghan government, 
the United Nations, and other international donors.
    The State Department's Anti-Terrorism Assistance (ATA) program will 
continue to provide frontline states a full complement of training 
courses, such as a course on how to conduct a post-terrorist attack 
investigation or how to respond to a WMD event. The budget will also 
fund additional equipment grants to sustain the skills and capabilities 
acquired in the ATA courses. It will support as well in-country 
training programs in Afghanistan, Pakistan, and Indonesia.
              central asia and freedom support act nations
    In fiscal year 2004, over $157 million in Freedom Support Act (FSA) 
funding will go to assistance programs in the Central Asian states. The 
fiscal year 2004 budget continues to focus FSA funds to programs in 
Uzbekistan, Kyrgyzstan and Tajikistan, recognizing that Central Asia is 
of strategic importance to United States foreign policy objectives. The 
fiscal year 2004 assistance level for Uzbekistan, Kyrgyzstan and 
Tajikistan is 15 percent above 2003. These funds will support civil 
society development, small business promotion, conflict reduction, and 
economic reform in the region. These efforts are designed to promote 
economic development and strengthen the rule of law in order to reduce 
the appeal of extremist movements and stem the flow of illegal drugs 
that finance terrorist activities.
    Funding levels and country distributions for the FSA nations 
reflect shifting priorities in the region. For example, after more than 
10 years of high levels of assistance, it is time to begin the process 
of graduating countries in this region from economic assistance, as we 
have done with countries in Eastern Europe that have made sufficient 
progress in the transition to market-based democracies. United States 
economic assistance to Russia and Ukraine will begin phasing down in 
fiscal year 2004, a decrease of 32 percent from 2003, moving these 
countries towards graduation.
             combating illegal drugs and stemming terrorism
    The President's request for $731 million for the Andean Counterdrug 
Initiative includes $463 million for Colombia. An additional $110 
million in military assistance to Colombia will support Colombian 
President Uribe's unified campaign against terrorists and the drug 
trade that fuels their activities. The aim is to secure democracy, 
extend security, and restore economic prosperity to Colombia and 
prevent the narco-terrorists from spreading instability to the broader 
Andean region. Critical components of this effort include resumption of 
the Airbridge Denial program to stop internal and cross-border aerial 
trafficking in illicit drugs, stepped up eradication and alternative 
development efforts, and technical assistance to strengthen Colombia's 
police and judicial institutions.
   halting access of rogue states and terrorists to weapons of mass 
                              destruction
    Decreasing the threats posed by terrorist groups, rogue states, and 
other non-state actors requires halting the spread of weapons of mass 
destruction (WMD) and related technology. To achieve this goal, we must 
strengthen partnerships with countries that share our views in dealing 
with the threat of terrorism and resolving regional conflicts.
    The fiscal year 2004 budget requests $35 million for the 
Nonproliferation and Disarmament Fund (NDF), more than double the 
fiscal year 2003 request, increases funding for overseas Export 
Controls and Border Security (EXBS) to $40 million, and supports 
additional funding for Science Centers and Bio-Chem Redirection 
Programs.
    Funding increases requested for the NDF and EXBS programs seek to 
prevent weapons of mass destruction from falling into the hands of 
terrorist groups or states by preventing their movement across borders 
and destroying or safeguarding known quantities of weapons or source 
material. The Science Centers and Bio-Chem Redirection programs support 
the same goals by engaging former Soviet weapons scientists and 
engineers in peaceful scientific activities, providing them an 
alternative to marketing their skills to states or groups of concern.
                      millennium challenge account
    The fiscal year 2004 Budget request of $1.3 billion for the new 
Millennium Challenge Account (MCA) as a government corporation fulfills 
the President's March 2002 pledge to create a new bilateral assistance 
program, markedly different from existing models. This budget is a huge 
step towards the President's commitment of $5 billion in annual funding 
for the MCA by 2006, a 50 percent increase in core development 
assistance.
    The MCA supplements U.S. commitments to humanitarian assistance and 
existing development aid programs funded and implemented by USAID. It 
will assist developing countries that make sound policy decisions and 
demonstrate solid performance on economic growth and reducing poverty.
  --MCA funds will go only to selected developing countries that 
        demonstrate a commitment to sound policies--based on clear, 
        concrete and objective criteria. To become eligible for MCA 
        resources, countries must demonstrate their commitment to 
        economic opportunity, investing in people, and good governance.
  --Resources will be available through agreements with recipient 
        countries that specify a limited number of clear measurable 
        goals, activities, and benchmarks, and financial accountability 
        standards.
    The MCA will be administered by a new government corporation 
designed to support innovative strategies and to ensure accountability 
for measurable results. The corporation will be supervised by a Board 
of Directors composed of Cabinet level officials and chaired by the 
Secretary of State. Personnel will be drawn from a variety of 
government agencies and non-government institutions and serve limited-
term appointments.
    In fiscal year 2004, countries eligible to borrow from the 
International Development Association (IDA), and which have per capita 
incomes below $1,435, (the historical IDA cutoff) will be considered. 
In 2005, all countries with incomes below $1,435 will be considered. In 
2006, all countries with incomes up to $2,975 (the current World Bank 
cutoff for lower middle income countries) will be eligible.
    The selection process will use 16 indicators to assess national 
performance--these indicators being relative to governing justly, 
investing in people, and encouraging economic freedom. These indicators 
were chosen because of the quality and objectivity of their data, 
country coverage, public availability, and correlation with growth and 
poverty reduction. The results of a review of the indicators will be 
used by the MCA Board of Directors to make a final recommendation to 
the President on a list of MCA countries.
              the u.s.-middle east partnership initiative
    The President's Budget includes $145 million for the Middle East 
Partnership Initiative (MEPI). This initiative gives us a framework and 
funding for working with the Arab world to expand educational and 
economic opportunities, empower women, and strengthen civil society and 
the rule of law. The peoples and governments of the Middle East face 
daunting human challenges. Their economies are stagnant and unable to 
provide jobs for millions of young people entering the workplace each 
year. Too many of their governments appear closed and unresponsive to 
the needs of their citizens. And their schools are not equipping 
students to succeed in today's globalizing world. With the programs of 
the MEPI, we will work with Arab governments, groups, and individuals 
to bridge the jobs gap with economic reform, business investment, and 
private sector development; close the freedom gap with projects to 
strengthen civil society, expand political participation, and lift the 
voices of women; and bridge the knowledge gap with better schools and 
more opportunities for higher education. The U.S.-Middle East 
Partnership Initiative is an investment in a more stable, peaceful, 
prosperous, and democratic Arab world.
    The timing now is critical. As we work to establish a peaceful and 
prosperous Iraq, and as we commit our energy and resources to realizing 
President Bush's vision of two states--Israel and Palestine--living 
side by side, we must also work to ensure that the Middle East as a 
region does not fall farther and farther behind with respect to 
economic and political freedom. We need these MEPI dollars to assist us 
in laying the broader foundation for a better tomorrow for all.
                   fighting the global aids pandemic
    The fiscal year 2004 budget continues the Administration's 
commitment to combat HIV/AIDS and to help bring care and treatment to 
infected people overseas. The HIV/AIDS pandemic has killed 23 million 
of the 63 million people it has infected to date, and left 14 million 
orphans worldwide. President Bush has made fighting this pandemic a 
priority of U.S. foreign policy.
    The President believes the global community can--and must--do more 
to halt the advance of the pandemic, and that the United States should 
lead by example. Thus, the President's fiscal year 2004 budget request 
signals a further, massive increase in resources to combat the HIV/AIDs 
pandemic. As described in the State of the Union, the President is 
committing to provide a total of $15 billion over the next five years 
to turn the tide in the war on HIV/AIDs, beginning with over $2 billion 
in the fiscal year 2004 budget request and rising thereafter. These 
funds will be targeted on the hardest hit countries, especially in 
Africa and the Caribbean with the objective of achieving dramatic on-
the-ground results. This new dramatic commitment is reflected in the 
Administration's over $2 billion fiscal year 2004 budget request, which 
includes:
  --State Department--$450 million;
  --USAID--$895 million, including $100 million for the Global Fund, 
        $150 million for the International Mother and Child HIV 
        Prevention; and $105 million for TB and Malaria; and
  --HHS/CDC/NIH--$695 million, including $100 million for the Global 
        Fund, $150 million for the International Mother and Child HIV 
        Prevention, and $15 million for TB and Malaria.
    In order to ensure accountability for results, the President has 
asked me to establish at State a new Special Coordinator for 
International HIV/AIDS Assistance. The Special Coordinator will work 
for me and be responsible for coordinating all international HIV/AIDS 
programs and efforts of the agencies that implement them.
                           hunger and famine
    Historically the United States has been the largest donor of 
assistance for victims of protracted and emergency food crises. 
Congress provided $1.44 billion in USAID-administered food aid for 
fiscal year 2003. Our fiscal year 2004 food aid request of $1.19 
billion will be complemented with a Famine Fund, as I mentioned before, 
which is a $200 million fund with flexible authorities to provide 
emergency food, grants or support to meet dire needs on a case-by-case 
basis.
                          supplemental funding
    As you are aware, Mr. Chairman, on April 16 President Bush signed 
the Supplemental legislation in which the Congress granted the 
President over $79 billion, with almost $8.2 billion of that for 
International Affairs. I want to thank you and our other oversight 
committees as well as the entire Congress for being so responsive. We 
have a huge challenge facing us in Iraq and these dollars will go a 
long way toward helping us meet that challenge successfully.
                                summary
    Mr. Chairman, members of the subcommittee, to advance America's 
interests around the world we need the dollars in the President's 
Budget for fiscal year 2004 and his supplemental request for this 
fiscal year. We need the dollars under both of my hats--CEO and 
principal foreign policy advisor. The times we live in are troubled to 
be sure, but I believe there is every bit as much opportunity in the 
days ahead as there is danger. American leadership is essential to 
dealing with both the danger and the opportunity. With regard to the 
Department of State, the President's fiscal year 2004 budget is crucial 
to the exercise of that leadership.
    Thank you and I will be pleased to answer your questions.

    Senator McConnell. What we will do now is go to the 
chairman of the full committee, Senator Stevens. We will have 
5-minute rounds of questions, which will give us the maximum 
opportunity to give everyone a chance to participate. Senator 
Stevens.
    Senator Stevens. Thank you very much, Mr. Chairman.
    Mr. Secretary, I welcome your statement and the whole 
committee respects this budget that has been presented for you. 
I heard your comments about your involvement in the 
intergovernmental process. If there is a crucible down there, I 
am not worrying about you being the one that is being ground 
down, Mr. Secretary.
    But I obviously support the AIDS/HIV initiative that you 
have and I hope that you will keep us informed as much as you 
can about the process of the cooperation you are talking about.

                              RUSSIAN AID

    I am concerned about one item here, though. I look across 
from several cities in my State and see Eastern Russia. This 
budget cuts the Russian aid by more than 50 percent. When the 
cuts come in a program like that for Russia, or any program 
that affects a country like Russia, it is the rural parts of 
the country that are ignored after the cuts take place. The 
Russian Far East is very much in need of help. It is still 
lagging behind their whole country in terms of coming out of 
the processes that have strangled them during the period of the 
Soviet days. I want to urge you to take a look again at that.
    Alaskans go over to the Russian Far East quite often and we 
see the conditions over there and know that they need help. I 
think that this cut in the budget that is before us for Russia 
is much too deep, Mr. Secretary, and I would like to find some 
way to be assured that we can find a way to allocate more money 
into the areas where there is a great need for assistance from 
us to assure the processes of democracy are working in Russia.
    I do appreciate your being here and I hope you will excuse 
me, Mr. Chairman. I welcome you here, my friend, and look 
forward to working with you.
    Secretary Powell. Thank you, Mr. Chairman, and thank you 
for your continuing support and the support of the full 
committee and I will look at that account again. It is just a 
matter of where the greatest needs are and the ability of 
Russia to generate its own revenues, especially through its oil 
sales, to deal with these problems.
    Senator Stevens. Thank you very much.
    Senator McConnell. Thank you, Senator Stevens.

                                 SYRIA

    Mr. Secretary, with the liberation of Iraq, there is 
renewed attention to its neighbors. We look at Syria with a 
little more focus than some of us did in the past, and observe 
a two-decade-old occupation of Lebanon and ongoing support for 
terrorism. We look at the other neighbor of Iraq--Iran--and we 
see a country that aspires to be a nuclear power and a country 
that clearly supports terrorist organizations.
    On the assumption that you are going to be focusing even 
more on both of these countries, could you discuss the 
prospects for convincing the Syrians that it might be time to 
leave Lebanon and discontinue support for terrorist groups. 
Could you also discuss what prospects, if any, there are for 
discouraging the Iranians from becoming a nuclear power or to 
continue to support terrorism?
    Secretary Powell. Mr. Chairman, I will be leaving this 
evening for Europe, make a couple of stops in Europe, in Spain 
and Albania, and then I will be heading into Syria to have 
conversations with my colleague, Foreign Minister Charaa and 
President Bashar Assad, on all of the issues that you just 
touched on and others, as well.
    I think the last several weeks have given Syria a rather 
sobering experience as to the changing circumstances in the 
region, and there was a great deal of chatter a few weeks back 
about whether or not the U.S. Army was going to take a left at 
Baghdad and go on up to Syria. That was not the case. The 
President did not intend that. But I think that a clear 
indication was given that the world was losing patience with 
those nations that support terrorism, those nations that 
continue to move down a path toward development of weapons of 
mass destruction, those nations that do not mean well by their 
neighbors and for their neighbors.
    We also made it clear to the Syrians that during the course 
of Operation Iraqi Freedom, if they continued to allow 
unhindered access going into Iraq of Fedayeen or weapons or 
equipment that would sustain Baghdad, that was not a wise 
policy choice on their part; and if they allowed people to find 
haven in Damascus or other parts of Syria when it was clear 
that the regime was collapsing, that also was not a wise policy 
choice. The Syrians took note of all this, very careful note of 
it, and then the President asked me to get in touch with the 
Syrians and to go and have a conversation with them.
    What I will say to my Syrian colleagues and to President 
Bashar Assad is that there are two things that are happening 
that have fundamentally changed the circumstances in the 
region. One, Iraq. You are about to have a neighbor that is not 
a dictatorship anymore, not a regime that oppresses its people. 
Quite the contrary, we see people demonstrating. We see people 
performing religious pilgrimages that a Muslim leader kept them 
from performing for 25 years, and now they are doing it and 
they are doing it freely and peacefully.
    You are seeing a regime that is about to be put on a 
democratic footing that will be representative of all of its 
people. You might want to watch how that is happening, because 
it fundamentally changes your economic relationship with this 
country, your political relationship with this country, and 
just your door-to-door relationship with this country. No more 
subsidized oil coming your way. No more free oil coming your 
way. You ought to take a look at that.
    Today, we released the Road Map to both parties, Palestine 
and Israel; the Palestinian authority hoping to become a 
Palestine state in due course committed themselves to trying 
again in the face of enormous difficulty, but trying again to 
move down a path of peace.
    We are also interested in a comprehensive solution. A 
comprehensive solution at the end of the day must include Syria 
and Lebanon. And if Syria wants to be a part of that 
comprehensive solution, and I believe it does--President Bashar 
Assad has said it to me on a couple of occasions--then it has 
to review the policies it has been following with respect to 
the support of terrorist activities and the control they have 
over forces in Lebanon that present a threat to Northern 
Israel.
    So we will have a good discussion of all of these issues 
and I will gauge the willingness of Syria to engage with us. I 
am sure these meetings will be candid, straightforward, 
friendly, and I hope they will lead to at least the beginning 
of a changed point of view. But it is a decision that Syrians 
will have to make as to what kind of future they wish to be a 
part of and to see take place in their own country.

                                  IRAN

    Senator McConnell. We are out of time, but do you want to 
touch quickly on Iran?
    Secretary Powell. If I may, sir. Forgive me for practicing 
my talking points a day before my trip.
    We have a similar situation where Iran continues to support 
terrorist activities. It is on our list of states that do so 
and we have seen even more evidence in recent months of their 
pursuit of nuclear technology and ultimately, obviously, a 
nuclear weapon. A nation with all that oil doesn't have an 
immediately obvious need for nuclear power to generate 
electricity. There should be cheaper alternatives, so we have 
always been suspicious of their efforts. In recent months we 
have evidence to suggest we were correct in our suspicions and 
now the whole world ought to be very suspicious.
    But there is a churning taking place within Iran. There is 
a great deal of foment there. So many of the Iranian young 
people are expressing a view that there should be a better life 
for them. They are expressing dissatisfaction in different 
ways, through demonstrations and through their participation as 
best they can in the political process. They want to have a 
choice in their destiny and their future and there is some 
strain between the political figures and the religious figures 
within the country as they try to accommodate what I believe 
are the desires of the younger population.
    This gives us something to work with. I think we can appeal 
to that young population, give them a message, give them the 
example of Iraq, of what Iran should also be thinking about and 
considering as they see this fundamental change taking place 
just across the border, in a nation that was their sworn enemy 
for the last 20 years.
    So I think we have ways of influencing Iran, as well, not 
quite as directly as we influenced Iraq, I might say, or we 
might be able to influence Syria, but there are ways to 
influence Iran. I think all of them are now taking another look 
at their situation and the reality of these new circumstances 
as we move forward.
    Senator McConnell. Thank you. Senator Leahy.
    Senator Leahy. Thank you, Mr. Chairman. I would say, in 
following up on that a little bit, the Ayatollahs in Iran make 
no secret of the fact that they want very much for a new 
government in Iraq to resemble theirs in Iran.
    Iran may be slowly changing. The irony would be if Iran 
became less of a theocracy, more of a democracy, and the 
opposite happened in Iraq.
    Secretary Powell. We are going to do everything we can to 
make sure that such irony does not occur. I hope that the 
people of Iraq, as they continue the process that has now 
started to create an interim authority, an embryonic 
government, and as it starts to grow into a full government 
with free elections, will realize that they do not want to look 
like Iran. What has it done for Iran? It is not a model to be 
emulated.
    Senator Leahy. I agree with that.
    Secretary Powell. There are much better models about. What 
we have to watch out for is what the Iranians might try to do 
in the southern part of Iraq, and we have some concerns about 
that and we are sharing those concerns with the Iranians, 
suggesting it is not in their interest to try to in any way 
exercise undue influence within the Shi'ia population in the 
southern part of Iraq or try to infiltrate it.
    Senator Leahy. Thank you.
    Mr. Secretary, you know, we talked earlier about this idea 
of unilateralism versus multilateralism and there is a 
temptation--we are the most powerful nation on earth, we are 
the wealthiest nation on earth and we have a worldwide economic 
and military reach--to go it alone. You can do that in 
individual instances, but at some point it wears thin.

                    SEVERE ACUTE RESIRATORY SYNDROME

    I am thinking, isn't the SARS epidemic an example where to 
go it alone just does not work? If we are going to combat SARS, 
or terrorism for that matter, there are a lot of other nations 
we have got to be involved with--China, France, Mexico, Canada, 
countries that disagreed with us on the war in Iraq. No matter 
whether they agree or disagree with us on an issue like Iraq, 
doesn't SARS illustrate why we have to work together?
    Secretary Powell. We do have to stay engaged and I think we 
are staying engaged. We are increasingly interconnected with 
respect to dealing with transnational problems, whether they 
are epidemics, such as HIV/AIDS or SARS, or whether it is 
responding to terrorism, and President Bush and his team 
understands this fully. I spend a great deal of my time working 
with the international community, whether it is regional 
organizations, the United Nations, NATO, whatever it might be, 
and the number of visitors who come here and the number of 
places that I visit.
    When you look at this charge, though, that America is too 
unilateral, I start to lay down exhibits of our unilateralism 
or our multilateralism. I look at Operation Iraqi Freedom, and 
everybody says we went off on our own and we split Europe and 
Europe wasn't with us. Europe was with us. There were some 
nations in Europe who weren't with us, but more NATO nations 
were with us than against us. More EU nations were with us than 
against us.
    Senator Leahy. I understand that. That is not precisely, 
though, what I was getting at. I was thinking, like we read in 
the paper, Chile may be punished because of----
    Secretary Powell. Chile----
    Senator Leahy. My point is that there may be issues where 
they disagree with us. But on other issues, we have got to work 
together, SARS being one.
    Secretary Powell. Oh, sure. Sure.
    Senator Leahy. Terrorism being an example, too.
    Secretary Powell. Chile will not be punished. I met with 
the Foreign Minister of Chile the day before yesterday and we 
assured her that there might be some delay as we put things in 
queue, but the President remains committed to the U.S.-Chile 
Free Trade Agreement.
    But there come occasions, Senator Leahy, where as the 
result of a disagreement or some other disappointment in a 
relationship we have with a particular country, without 
breaking up the friendship or breaking an alliance, you can 
take another look at your policies to see whether those 
policies are still the right policies to follow in light of the 
disagreement that was just passed through.
    Senator Leahy. Let me ask you one other question. We could 
go on for hours.

                        IRAQI NATIONAL CONGRESS

    We have talked about Mr. Chalabi, the head of the Iraqi 
National Congress, INC, who seems to be favored by some in the 
administration, but the Foreign Minister of Jordan warned 
against supporting him, saying he had been convicted of fraud 
in Jordan, among other things.
    Is the INC going to be the dominant party? We have given 
them $5 million recently. We have given them tens of millions 
of dollars before, we airlifted them in there, and yet we know 
from the audits done that some of the money we gave them in the 
past was misspent. Is this a fait accompli or are they just one 
of the parties?
    Secretary Powell. They are just one of the parties. Ahmed 
Chalabi spent many years of his life working hard for the 
liberation of Iraq and he believes that he should participate 
in public life. He has been one of the most effective leaders 
of the external opposition and he is now in Iraq and there is 
no reason he should not be in Iraq participating in public life 
in Iraq.
    This Congress provided a great deal of support and 
direction as to how this support should be used to the INC. 
There were some accounting problems and we controlled the flow 
of money while those accounting and accountability problems 
were dealt with by our staffs.
    But the President has made absolutely clear that the 
leadership of the new government in Iraq would be determined by 
the people of Iraq, all the people, and we would expect that 
the new government would include those who fought so hard in 
the external opposition as well as those inside the country who 
are now free of Saddam Hussein and his regime and his thugs and 
can speak out and present their case to the Iraqi people and 
see if the Iraqi people have confidence and trust in these 
individuals. So it will be a combination, we are not putting 
our bets on any particular individual or any particular group. 
It is up to the Iraqi people. The President has made this very 
clear.
    Senator Leahy. Thank you.
    Senator McConnell. Thank you, Senator Leahy.
    Senator Shelby.

               DEATH OF AMERICAN CITIZENS IN SEOUL, KOREA

    Senator Shelby. Mr. Secretary, you may have been briefed, 
and I am not sure, on the recent unexplained death of American 
citizens in Seoul, Korea.
    Secretary Powell. I don't think so.
    Senator Shelby. Mr. Matthew Sellers was from Alabama, and 
some of his family has contacted me with questions regarding 
the discrepancies in the facts and circumstances surrounding 
his death. The family has had some contact with State 
Department officials at our embassy in Seoul and two letters 
have been received from Ambassador Hubbard, but they continue 
to feel very strongly that not enough information has been 
shared with them about their brother's death and that a full 
investigation of this matter is necessary.
    So since you are not familiar with it, I will get you some 
information on it and ask you to look into it because they are 
really concerned that--there are just a lot of unanswered 
questions about his death. He was a teacher, an American from 
Alabama and had been teaching there for 17 years and he died en 
route from one hospital to the other. It is inexplicable. So I 
will get you the information.
    Secretary Powell. No, it does ring a bell now, Senator. 
When you said the name Matthew----
    Senator Shelby. Matthew----
    Secretary Powell. It didn't click, but Sellers----
    Senator Shelby. Maybe my mike wasn't on.
    Secretary Powell. I know that the family has been in touch 
with Ambassador Hubbard----
    Senator Shelby. Right.
    Secretary Powell [continuing]. And we are trying to get the 
answer and I will look into it again when I get back to the 
Department.
    Senator Shelby. I appreciate it very much and I know his 
family does.
    Secretary Powell. In circumstances like that, one always 
can't find the answer, but we should do everything we can to 
try to find the answer for the family.
    Senator Shelby. We appreciate that.
    Secretary Powell. Thank you.
    Senator Shelby. That was at the request of the family that 
I am pursuing this.

                              NORTH KOREA

    I would like to ask you to comment where you can, 
considering the sensitivities of what is going on the peninsula 
of Korea, what can you tell us about what is going on in Korea, 
Mr. Secretary?
    Secretary Powell. We know the North Koreans have continued 
to pursue nuclear weapons technology. We discovered that last 
summer and it became clear that they were continuing to pursue 
this even though they had agreed not to as a result of the 
agreed framework of 1994 signed with the United States, and 
even though in 1992, they had entered into an agreement with 
South Korea not to have nuclear weapons, but they did anyway.
    We thought we had bottled it up with the agreed framework, 
only to discover that they popped out somewhere else. There was 
another bottle with another genie in it that we discovered with 
no cork.
    So we confronted them. They first denied it, then they 
admitted it. We have been telling them for a number of months, 
since last October when this broke out, that the only way we 
can deal with this in the future is not to deal with it the way 
we did within the past because that didn't work. So we are not 
going to get back into an ``agreed framework'' kind of 
arrangement where you make promises but you don't get rid of 
the capability; and it is ready to pop out again, and 
meanwhile, we are giving you aid and light-water reactors and 
all kinds of other things.
    We also told them that this time, the solution has to 
involve your neighbors, not that we don't have a role to play, 
and we know you are worried about us attacking you, but it is 
your neighbors who are threatened by this capability and their 
interests have to be served and they have to be part of the 
solution. Why shouldn't they be? This is part of our 
multilateral approach to problems, Senator.
    So we pressed and pressed and finally persuaded the Chinese 
to play a more active role in setting up a multilateral 
meeting. It started with trilateral, but even though it was 
just trilateral last week, we had the interest of the South 
Koreans and the Japanese in the room with Assistant Secretary 
Jim Kelly. We briefed them every step of the way, total 
transparency with Tokyo and with Seoul. We had a three-way 
meeting, the Chinese, the United States, and North Korea.
    The Chinese were full participants, not just conveners. 
They made it clear that they wanted a de-nuclearized peninsula 
and they, for the first time, publicly acknowledged the 1992 
agreement between South and North Korea. The Chinese said: ``we 
now acknowledge that and why are you violating that, too,'' was 
the implication.
    The North Koreans, in very typically bellicose fashion, 
accused us of everything imaginable and then said, we have 
reprocessed all the fuel rods that were in storage. We can't 
establish that as a matter of fact with our intelligence 
community, but they said they did it. That is their assertion. 
That is their position.
    Then they told Mr. Kelly that, by the way, we confirmed 
that we have nuclear weapons and we told you 10 years ago, in 
1993, that we had nuclear weapons, although we can't verify 
they told anybody that. With these nuclear weapons, they said, 
we can display them, we can make more, or we can transfer them. 
And then they said, it is up to you. It depends on the American 
reaction. Take your time. Think about it.
    So they have essentially laid their programs out and are 
anxious to see whether anybody will pay them for their bad 
behavior. So we had a good, as we say in the diplomatic world, 
candid, direct exchange of views. We briefed our Japanese and 
South Korean friends on the way out and we are now examining 
the proposal they put on the table which would get rid of all 
of this and the missiles that they have and we will examine it. 
But we will examine it with the greatest care and only with our 
other friends, and then we will see how to deal with it, 
whether further meetings are warranted, whether another 
proposal is appropriate.
    All the options are on the table and available to the 
President. We will not be rushed. We will not be panicked. We 
are not afraid, we will not be scared into doing something, we 
will not be blackmailed, and we will not be intimidated. They 
are the ones who have the problem with people who are starving 
to death, an economy that is not working, and they are 
investing what little wealth they have in fools' gold called a 
nuclear capability that will not scare us and will not feed a 
single child.
    Senator Shelby. Thank you. Thank you, Mr. Chairman.
    Senator McConnell. Thank you, Senator Shelby.
    Senator Landrieu.

             OPENING STATEMENT OF SENATOR MARY L. LANDRIEU

    Senator Landrieu. Thank you, Mr. Chairman, and thank you, 
Mr. Secretary, for your leadership. I agree with your 
assessment that it would be wise for us to be both a military 
superpower and a diplomatic superpower and I really commend you 
and all that you have had to handle to really be aggressive in 
stepping up our State Department and making sure that our 
people have the resources and the tools and the 21st century 
tools they need to complete the mission, because both are 
important.
    Just to note for the record, and, of course, you know I 
have supported a strong defense appropriation and we have seen 
that increased. Of course, you had a great role to play in a 
former role in that regard. But Mr. Chairman, just for the 
record to state that our defense appropriation for 2002 is $331 
billion, but our diplomatic investments are $23.9, less almost 
5 percent. It might be wise for us, whether we can do it this 
year--probably not--but over the next few years to think about 
at least having our diplomatic budgets match at least 10 
percent of our military budgets to keep it in a good 
proportion. That conversation, I probably should have with the 
budget folks, but I just wanted Mr. Secretary's support----
    Secretary Powell. I will mention it to them for you.
    Senator Landrieu. [continuing]. That effort because I just 
think the principle of it is important for America, that we 
intend to be the primary military superpower in the world. We 
intend for that to continue, but we will also match that to be 
a diplomatic superpower, and in order to do that, I think our 
budget has to reflect it.
    But these are my questions. One, what is your view of the 
dangers, if any--you might not think there are, but if you do--
associated with the premature pull-out in Iraq? I think I agree 
with you that this is a very crucial time, that it wasn't just 
the time when the bullets are flying, but now that the bullets, 
or some, most of the bullets have stopped, what do you think, 
or could you describe the dangers associated with a premature 
pull-out?
    Secretary Powell. I don't believe there will be a premature 
pull-out. The President has made it clear that we don't want to 
stay a day longer, but we are not going to leave a day too 
early. So we will stay as long as it takes to do the job.
    But we can share the burden, and as we sit here today, we 
and our British friends and other members of the coalition are 
soliciting other nations to provide peacekeeping forces and 
reconstruction forces and funds so that we are not pulling out 
but changing our presence. They don't have to be American 
soldiers and British soldiers throughout the country for 
whatever time it takes. We can bring in other nations. Other 
nations have volunteered; off the top of my head, Italy, for 
example. Now that the active part of the campaign is over, they 
are prepared to send in up to 3,500 troops, to include the kind 
of troops we need, the kind of presence we need, policemen, not 
tankers or artillery men.
    So we are going to different countries around the world 
now, asking what are you able to contribute to this effort, so 
that we can remove some of our troops. But that would not be 
seen as premature because they are being substituted for with 
the kind of troops that can do the job.
    Senator Landrieu. But I guess my question--maybe I didn't 
ask it as clearly--is I realize that our intention is not to 
pull out prematurely, and I most certainly agree with that 
assessment. But could you describe, just for the record, what 
some of the dangers would be if we did or if we misjudged it? 
What could potentially happen if we left too early?
    Secretary Powell. My greatest concern would be if we were 
to pull out before there was security throughout the country 
and there was a sense of stability and the people were 
comfortable with their new governmental institutions and 
ministries. That the new government has put in place an 
adequate police force and a responsible military answerable to 
the government to protect the nation, keep it one nation, and 
defend it against potential enemies.
    So there is a lot of work to be done, and in the absence of 
those kinds of institutions and a government that the people 
could believe in, trust, and that is functioning to a proper 
standard, the worst case you talk about could be total disorder 
of the kind we have seen in Lebanon in previous times, and the 
last thing we want to see is that kind of collapse of society. 
Then we would have, frankly, failed in our mission.
    Senator Landrieu. Mr. Secretary, as I was coming in, I 
heard--one more question, if I could.
    Senator McConnell. And then Senator DeWine.
    Senator Landrieu. I will be very, very quick. The chairman 
mentioned, and I wanted to support him in this comment about 
the potential establishment of a trust fund for the oil 
reserves. Being an oil-producing State, we have some experience 
with this. I think you referenced Alaska. The Senator from 
Vermont, I think, is somewhat familiar with Texas, Alaska, 
Louisiana having had some experience, and we don't have to go 
into the details of it, the benefits, now, but they are 
extraordinary, the benefits to a community that wisely set 
aside some of the riches of their oil reserves for the benefit 
of the people.
    I think that that practice that we have somewhat developed 
in the United States could actually be quite applicable for 
Iraq, both in a direct benefit as well as the psychological 
benefit to ensure them that we are going to try to promote 
policies that that oil belongs and should be used for the 
development of their people in long-term investments.

                           prepared statement

    Mr. Chairman, I thank you for your patience here, but urge 
us to pursue that in a pretty aggressive way, because over the 
short, medium, and long term, it would be a great advantage to 
the country.
    Secretary Powell. Thank you, Senator. We are looking at the 
various models that we have used to do this so that a portion 
of the revenue doesn't get laundered through the government. 
Serving the people could mean going directly to the people so 
that they can make choices as to where they want the money to 
go. As long as the money stays in the country and circulates 
and generates growth within the country.
    Senator Landrieu. Thank you.
    [The statement follows:]
             Prepared Statement of Senator Mary L. Landrieu
    December 7, 1941 was a date that changed the world. The Japanese 
attacked America, and we were dragged into World War II. After years of 
fighting, the United States succeeded in liberating two continents 
oppressed by Germany and Japan. On September 11, 2001, the United 
States was, once again, attacked because of her virtues as a country 
where we are free to practice multiple faiths, women are free to vote, 
and we are free to live the dreams so many people around the world only 
wish they could experience. Congress and the Administration share a 
vision that the military operations in Iraq and Afghanistan, in 
response to September 11th, will create a world where Americans can 
live in security. Moreover, the citizens of Iraq and Afghanistan and 
people around the world will be able to realize their dreams to speak 
and pray freely, have access to the classroom and the boardroom, vote 
and more. We are already seeing early instances of freedom blossoming 
in Iraq and Afghanistan. But, these aspirations will only thrive and 
become realities if America makes a long-term commitment to the 
promotion of liberty, justice, and civil society. At the end of World 
War II, America did not quickly end its presence in Japan and Germany. 
In fact, we are still engaged in both countries. The Marshall Plan was 
a long-term road-map to re-establish Asian and European economies and 
restore Germany and Japan as responsible members of the international 
community. The U.S. dedicated $13 billion in aid for the reconstruction 
of Europe and Asia or $88 billion in today's dollars. We must make a 
similar, long-term commitment to Iraq, Afghanistan, the Middle East and 
Southern Asia. We cannot sustain the successes of Operations Enduring 
Freedom and Iraqi Freedom if the United States is not dedicated, once 
again, to a long-term commitment in the Middle East and Southern Asia. 
A failure to maintain our presence will permit fanaticism and 
fundamentalism to re-emerge.
                              afghanistan
    The President's budget request dedicates $657 million for the 
reconstruction of Afghanistan. As Secretary Powell's testimony states, 
Afghanistan is no longer a haven for Al Qaeda; a transportation system 
is being established; a military and police force are being trained to 
respect civilian authority and the rights of Afghan citizens; and an 
accountable government to the people of Afghanistan is beginning to 
send anchor roots into the soil. But, we cannot rest here. Regrettably, 
the Administration requested no funding for Afghanistan in fiscal year 
2003. Remnants of the Taliban and Al Qaeda still pose threats to Hamid 
Kharzai and his government. In fact, numerous assassination attempts 
have been made on his life. Moreover, they still pose a danger to our 
troops, and our troops continue to conduct operations in Afghanistan. 
Certainly, America cannot give the all clear sign in Afghanistan that 
the military threat no longer exists.
    Nor, can we give the all clear sign that a civil society and 
personal freedoms are ready to stand on their own. In particular, women 
still face obstacles that prohibit them from full participation in 
Afghani society. Dr. Sima Samar was initially named Deputy Premier and 
Minister of Women's Affairs in the Kharzai government. Her nomination 
was defeated because she was a deemed a threat to the status quo. 
Equality for women does not endanger society. Rather, it is a catalyst 
for economic growth and a check to ensure justice is not denied. As 
Paula Dobriansky, Under Secretary of State for Global Affairs recently 
said on April 11, 2003, ``Ensuring women's rights benefits not only 
individuals and their families, it also strengthens democracy, bolsters 
prosperity, enhances stability, and encourages tolerance. It thereby 
helps every society realize its full potential, which is an overarching 
goal of our own national security strategy.'' Women captained the 
abolition movement to end slavery in the United States. An economic 
boom occurred simultaneously with the granting of the right of suffrage 
for women in the United States. Afghanistan's economic ascension will 
be tied to the increase of rights for its women. Democracy cannot be 
said to have been fully established until women have a say in their 
government and can take leadership roles in their communities.
    Again, we have sewn the seeds of a bright future for Afghanistan. 
But, this future will only be realized if America maintains a strong 
economic and visible physical presence in Afghanistan.
                      long-term commitment to iraq
    The situation in Iraq differs little from that seen in Afghanistan 
last year. An oppressive regime was deposed, but confusion ensued soon 
after. Today, electricity, food, and water are still scarce in parts of 
Iraq. We must improve this situation in order to convince the Iraqi 
people that life without Saddam Hussein is better than life with Saddam 
Hussein. Again, we will only be able to convince the Iraqi people a new 
type of government is better for them if we make a long-term commitment 
to improving their plight. A quick departure will only allow Saddam's 
totalitarianism to be replaced with fundamentalism. Such a solution 
does not benefit the Iraqi people, the region, Israel, or the United 
States.
    America must apply lessons learned from Afghanistan to make the 
transition more seamless in Iraq. Lt. General Jay Garner (retired) 
appears to be a wise choice to head the Pentagon's Office of 
Reconstruction and Humanitarian Assistance. Already, he has convened 
meetings with Iraqis representing a myriad of religious and political 
view-points to discuss the crafting of an Iraqi future based on a 
constitution built on the pillars of freedom and self-rule. As one 
Iraqi political aspirant said of the meetings with General Garner, ``It 
was the first time I entered an open political meeting in Iraq in more 
than 35 years. Under Saddam there was no way to speak like this.'' It 
is hoped that these meetings will produce a solid foundation to allow 
the Iraqis to flourish.
    Nevertheless, I am dismayed by comments from the Administration 
calling for the earliest possible exit from Iraq. Rather, we need to 
ensure our DOD engineers and civil affairs officers are available 
beyond the immediate future to rebuild Iraq's infrastructure and advise 
Iraqi civilians how to restore the fabric of a civil society. Such a 
move should not be feared within Congress, the Administration, or the 
Middle East as a heavy handed attempt to establish an American enclave 
in the Arab world. We should have no designs on an American colony in 
Iraq. But, it is folly to think that the reconstruction effort required 
by the DOD and an eventual transition to the Department of State to 
promote economic development can be done quickly. A long-term 
commitment will prove our sincerity to the fate and well-being of the 
Iraqi people. A quick exit will embolden fundamentalists and send a 
message to despotic leaders that they only need endure a short war and 
presence of American forces before they can return to power and their 
old ways.
    We must also consider the establishment of a ``permanent fund,'' 
like the one found in Alaska, that allows the Iraqi people to share in 
the riches of its petroleum resources. The people of Alaska receive a 
check each year based on the royalties collected from Alaska's oil. 
This revenue in the hands of Alaska's citizens has greatly benefitted 
the Alaskan economy and its citizens. A similar fund would benefit a 
cash starved Iraqi populace and ensure Iraq's oil riches benefit the 
people of Iraq and not outside interests.
                          role of iraqi women
    As in Afghanistan and the United States, Iraq will only truly 
thrive when its women can participate alongside men in government, 
commerce, medicine, and education. Saddam Hussein's regime was brutal 
to women. Such treatment cannot be permitted to occur in the new 
government. Saddam's regime crushed the voices of women through 
violence and intimidation. Under Saddam Hussein, rape was a common form 
of political torture. The wives, mothers, and sisters of Iraqi 
dissidents were often raped and even killed. Death was the proscribed 
punishment for women who ``dishonored'' their families, and 
``dishonor'' was interpreted all too loosely.
    However, Iraqi women have not always been subjected to torture and 
sexual discrimination. Prior to Saddam, Iraq was a country with a long 
history of prominent women in positions of leadership. Currently, women 
in Kurdish sections of Iraq enjoy freedoms not permitted by Saddam. As 
Undersecretary of State for Global Affairs Paula Dobriansky has said, 
``Kurish women travel there freely, hold high-level economic and 
political positions and have been critical to the region's revival. 
Several Kurdish women serve as judges, and two regional government 
ministers are women.'' Arab women regularly frequent Kurdish hotels 
because there is a no-veil requirement in the Kurdish territories. What 
is possible in Northern Iraq is certainly possible throughout Iraq, but 
it will not be achievable if the United States does not provide a long-
term stability that fosters and allows women to take a stake in society 
without fear of reprisal from Iraqi men.
                               conclusion
    The reconstruction of Iraq and Afghanistan can change the paradigm 
of governance in the Middle East and Southern Asia. However, this shift 
will not occur overnight, and it will not form without resources from 
nations, especially the United States, wishing to see democracy and 
liberty prosper in the region. The commitment must be lengthy, and the 
commitment must be made to men and women. While we need not duplicate 
the Marshall Plan in its entirety, there can be no doubt that a quick 
solution is no solution at all.

    Senator Leahy [presiding]. Senator DeWine.
    Senator DeWine. Mr. Secretary, thank you for being with us 
and thank you very much for your good comments about the men 
and women who represent us in the Foreign Service. It has been 
my experience, as I am sure it has been for members of the 
committee and Congress as we have traveled around the world, 
that these are our best and brightest and they are very 
dedicated people, and thank you for commenting about them and 
thank you for leading them.
    I may also say it is always a privilege to deal with 
Secretary Armitage, as well. He is a pleasure to deal with, as 
well.
    Let me say it was good to be at the White House yesterday, 
and thank you for your leadership and thanks to the President 
for his leadership in regard to the AIDS issue. I want to ask 
about that. I want to ask about the new Special Coordinator for 
International AIDS Assistance which we are going to appoint at 
State. Let me ask you how that is going to work, how that 
person is going to coordinate his or her work with HHS, CDC, 
NIH. How is that all going to come together?
    Secretary Powell. The coordinator will be in the Department 
of State, and I am still looking at the best organizational 
arrangement, whether it remains a special office or it actually 
becomes a bureau. There is a lot of money here and I have to 
make sure I have the right kind of organizational structure for 
it.
    But even though the person is lodged in State, the very 
title of ``coordinator,'' or ``special coordinator,'' suggests 
that he has a much broader role and I would expect that I would 
enter into memoranda of understanding and agreement with 
Secretary Thompson and with all of the other agencies of the 
administration that have an equity and an interest in how this 
money is used.
    I don't think there will be any coordination problem, but 
this individual will be the one who would have the authority to 
allocate the funds to USAID, to HHS, and who would also be 
tasked with developing partnerships between government, private 
sector, and international organizations, whether it is UNICEF, 
WHO, UNDP, as to how the money will be spent.
    Senator DeWine. What is the time table on that?
    Secretary Powell. As soon as I can and as soon as we have 
the necessary authorities and appropriations from the Congress, 
we are on it. We are looking through the organizational 
arrangement, trying to establish the organizational 
arrangements now and we are looking at candidates for the job.
    Senator DeWine. Good. Let me turn, if I could, to this 
hemisphere, and I appreciate your efforts and so on in this 
hemisphere. It is vitally important, particularly meeting with 
the President of Colombia. I wish you well in that. I had the 
opportunity to travel to Colombia about a month ago and meet 
with him and the President is a courageous individual. We need 
to hang in there.
    Secretary Powell. I was there a couple months ago myself.
    Senator DeWine. I know you were. I know you were.

                                 HAITI

    Let me ask about Haiti continuing--my impression is, the 
situation continues to deteriorate. Assuming the OAS mission is 
unable to facilitate a political solution, where do you think 
we go from there? Let me just say, I support the 
administration's position. We cannot, with the current 
political situation in Haiti, we cannot channel money through 
the government of Haiti. Let me also add, before you answer the 
question, I believe for humanitarian reasons, as poor as the 
country is and what I have seen in Haiti, and I have traveled 
there many times, I believe we need to consider increasing the 
humanitarian assistance through the NGOs. There are a lot of 
places we can put that money to do a lot of good down there and 
that would be my pitch today----
    Secretary Powell. No, I----
    Senator DeWine [continuing]. But I would ask you, where do 
we go politically, do you think?
    Secretary Powell. You hit the key element there, Senator. 
This is a country and a people who are desperately in need of 
international assistance. We have tried to be as forthcoming as 
we can be, subject to the constraints that are placed on us by 
a government that simply hasn't been responsive to the needs of 
its people. We can't do much more with them until they solve 
the political problem.
    I followed this matter very closely. You know my history 
with Haiti; I am the one that President Clinton sent down there 
with President Carter and Senator Nunn, your former colleague, 
to talk to General Cedras and have President Aristide come back 
in. He did that, and that is going on 9 years ago and there 
hasn't been any improvement basically since then. And so I have 
always found it difficult to predict what is going to happen 
next politically in Haiti. They are just stuck in what I want 
to say is a time warp. This is a country that has had the 
opportunity to create a democracy longer than any other nation 
in the hemisphere or in the world, for that matter, almost 200 
years, or over 200, or whatever the amount has been. It is a 
long period of time and they haven't been able to bring the 
pieces together because of squabbling and quarreling and the 
disparity of wealth between those on the hill and those not on 
the hill. But I would not know what to say to you honestly 
about where it is going next politically, but we have got to 
get past the current political crisis.
    Senator DeWine. Thank you.
    Senator McConnell [presiding]. Thank you, Senator DeWine.
    Senator Harkin.
    Senator Harkin. Thank you, Mr. Chairman, and thank you, Mr. 
Secretary, for being here today, and thank you for your 
tremendous leadership during these very trying times.
    I am going to have a question for you here, or a statement 
and a bit of a question which I guarantee you none of your 
staff ever prepared you for. But I believe it is important and 
it is something that requires U.S. leadership.

                        PEOPLE WITH DISABILITIES

    As you know, Mr. Secretary, I have been a longtime advocate 
for people with disabilities, one of the main authors of the 
Americans with Disabilities Act. I think it is very important 
that any reconstruction supported with U.S. funding be 
accessible to people with disabilities and allow them to 
equally participate in civic and community life.
    As we begin this crucial period in Iraq and Afghanistan, 
where these two peoples are rebuilding their futures, I know a 
lot of voices will be heard, and you are reaching out to 
different sectors of society in both of those countries. It is 
my hope that the administration would give some thought to 
reaching out to the disability community, and there are going 
to be a lot of people, obviously, that already are disabled in 
those countries for natural reasons or because of the effects 
of war, and I am just hopeful that as we begin this 
reconstruction, that we begin to impress upon them our hope and 
our, maybe more than hope, but our strong support for ensuring 
that their institutions are accessible.
    Secretary Powell. Thank you, Senator, and you are right, my 
staff did not prepare me for that question, but I didn't need 
it. It is a very good observation and I will try to find the 
right way to insert it into our thinking. My son, you may 
recall, was retired from the Army with 100 percent disability, 
and so I became very knowledgeable about 15 years ago what it 
is like to be in a wheelchair and on crutches and on a cane, or 
to drive a car with one leg that doesn't really work and what 
the access means. He is now fully functional, although still 
carries some of the consequences of his injuries.
    But if you look at the Financial Times today, you will see 
two pictures of him and one of me, and both of us are being 
criticized.
    So I have more than a passing interest or awareness of this 
subject.
    Senator Harkin. I appreciate that, Mr. Secretary, and in 
following up on that, I had spoken with Mr. Armitage about this 
about a year ago. In June, the United Nations in New York will 
convene a meeting of member nations to draft an international 
convention on the rights of individuals with disabilities. 
This, I think, is the second such meeting. The first meeting 
was last year, and that is why I called Mr. Armitage at that 
time.
    Again, I would like to urge the administration and your 
leadership to take a role in the drafting of this convention, 
just as former President Bush took the lead role in helping us 
get the Americans with Disabilities Act through the Congress 
and signing it into law. So I would hope that we would really 
be forward on this and that you would send instructions down to 
be heavily involved. Since we have had 13 years of experience, 
some ups and downs, but good experience in how to deal with 
this, I think the United States should take a big leadership 
role on this important issue.
    If I could just ask you, as a personal favor or 
professional favor, or whoever is in charge of this in your 
office, if I could be in touch with them or if they could be in 
touch with me, I would sure appreciate that.
    Secretary Powell. I will make sure that happens, Senator. 
Thank you.
    Senator Harkin. I appreciate that very much.

                             HUMAN SHIELDS

    Last, if I have any time left, I have a constituent in Iowa 
who was born in my State, but his parents came from Kuwait. He 
happened to be back there visiting during the time of the first 
Gulf War. He was one of about 100 people that were used as 
human shields. Fortunately, he lived and he came back, a young 
man. He wasn't going to take this sitting down and he sued and 
he got a judgment against the government of Iraq. They had a 
lot of problems in getting the money for the judgment. That 
recently happened with the finding of some money in the Federal 
Reserve Bank in New York, by the way.
    He and his attorneys have told me they have had a difficult 
time with the State Department on this, and now there is about 
50--I could be off a little bit, but there are about 50 
similarly situated people who are suing because they were used 
as human shields and other things like that, but they are U.S. 
citizens and they have gotten judgments, but there doesn't seem 
to be any money or something. They have got money against 
assets held by Iran. I hope that the State Department will look 
at that as a possible source of meeting the judgments rendered 
in favor of these claimants.
    Last, I have another constituent who is one of the Iranian 
hostages and they sued, but because of the Algiers Accord, they 
can't get fulfilled. We have got to work this out. That was 
never a treaty. It was blackmail, pure and simple, by the 
government of Iran at that time in order for us to get our 
hostages back, and because of that Algiers Accord, we can't 
permit our citizens the right that they ought to have--like we 
can sue governments, we can't sue the government of Iran to go 
after them for unlawful, illegal incarceration for all those 
days they were held.
    Secretary Powell. This is a very complex issue, Senator. In 
the Iranian case and the Algiers Accord, because of that 
accord, if we were to start paying claims using frozen Iranian 
assets, because of the nature of that accord, the Iranians 
would have then a recourse in international law and the cost of 
this might come back to the U.S. taxpayer.
    With respect to Kuwaiti issues, there are frozen Iraqi 
assets and there are also compensation claims being paid out of 
the oil for U.N. Oil for Food Program for victims. But the real 
solution to this whole problem is the Victims of Terrorism Fund 
that we would like to see created, and we are still working 
with OMB and other agencies of the administration to get that 
one moving.
    Senator Harkin. One last thing, Mr. Chairman. I don't think 
our taxpayers ought to be paying for it. If they have got 
assets and they have got money, they ought to pay for it.
    Secretary Powell. If it flows through, if there are assets 
that are not protected in some way by other agreements that the 
U.S. Government has entered into and if we break those 
agreements, then there really are significant foreign policy 
implications to such--you know, walking away from agreements 
that have been entered into.
    Senator McConnell. How much time do you have remaining, Mr. 
Secretary?
    Secretary Powell. Mr. Chairman, it is almost 3. I am at 
your pleasure, sir, but I do have to get to the White House in 
due course for President Uribe, but whatever you want.
    Senator McConnell. If you have got a few more minutes, 
Senator Durbin, in an example of exquisite timing----
    Secretary Powell. He does that all the time, I have 
noticed.
    Senator McConnell. Yes, arrived at just the right time to 
get in one quick round.

                              GLOBAL AIDS

    Senator Durbin. If I could, and I will be very brief, I 
only have two questions. One relates to the global AIDS 
situation. Thank you for your leadership and thanks to the 
President. I think it is an extraordinary commitment by this 
administration and I hope that we can read into the statement 
this week by the President that the administration is committed 
to the approach on global AIDS that has been successful and 
proven, to urge abstinence as the first goal; fidelity, to be 
faithful, as the second goal; and the third goal, if necessary, 
to use condoms and other protection to avoid spreading the 
disease. Is that a fair statement of the administration's 
belief in how we should approach this global AIDS crisis?
    Secretary Powell. Yes, sir, and I think the President spoke 
to that yesterday in the White House, and the example he is 
using is how Uganda went after the problem.
    Senator Durbin. Exactly, a success story.
    Secretary Powell. And we have got a very fine booklet that 
USAID has put out that describes the Ugandan experience. I 
would be delighted to send one up to you, Mr. Durbin.

                      WEAPONS OF MASS DESTRUCTION

    Senator Durbin. My last question is unrelated to that. How 
important is it to the credibility of the United States and to 
your personal credibility as Secretary of State for us to 
actually find weapons of mass destruction in Iraq?
    Secretary Powell. Well, I think we will find them and I 
think it will be very, very helpful in not only making the case 
that we went in under, but I am the one who made the case 
before the United Nations on the fifth of February.
    But it is important to remember a couple other aspects to 
this. When Resolution 1441 was passed by a vote of 15 to zero, 
every country that voted for that resolution accepted the fact 
that Iraq had weapons of mass destruction as a result of 12 
years of avoiding answering the questions, as a result of all 
those years of stiffing the inspectors. So they were found 
guilty of possession of weapons of mass destruction on the 
eighth of November when 1441 was passed.
    Also remember that some of the things we are looking for 
were not actual weapons but answers. You had x-number of liters 
of anthrax or botulinum toxin. You have never accounted for it. 
What happened to it? Now, we may never find that botulinum 
toxin. We are still trying to find out what happened to it. And 
the Iraqis said, we are not going to tell you. We are not going 
to show you anything. We are not going to answer the question. 
Any reasonable person should assume at that point that they 
were hiding something.
    Now that our troops are there and we have exploitation 
teams around the country and as more and more individuals are 
being found or turning themselves in to be interviewed, I think 
we will be able to queue our efforts a little more effectively 
and find the infrastructure.
    We are quite sure that they had facilities that might be 
called just-in-time factories for the development of chemical 
weapons. In other words, they might be making another product, 
but with just a few adjustments to its manufacturing process, 
it is making a chemical or biological weapon. Some promising 
leads have turned up, so I am quite confident we will be able 
to make the case and make it in a way that will be convincing 
to the world.
    Senator Durbin. Thank you, and thank you Mr. Chairman.
    Senator McConnell. Mr. Secretary, I am going to exercise 
the chairman's prerogative and ask the final question and then 
we will leave the record open for written questions for you and 
your staff to respond to.

                                 BURMA

    Clearly, one of the most outrageous and repressive regimes 
in the world is Burma. Nobody pays any attention to it. It 
abuses its people. It doesn't honor the results of the election 
that the National League for Democracy and Aung San Suu Kyi won 
in 1990. What, if anything, could we or any of our allies do to 
try to bring about the recognition of the election that was 
fairly won some 13 years ago in Burma?
    Secretary Powell. Mr. Chairman, your characterization of 
Burma is absolutely correct. It is a despotic regime and we 
condemn its policies, we condemn the manner in which they have 
kept Aung San Suu Kyi away from the political process and 
participation in civil society and civil life. But it has been 
difficult to find a solution to crack the rule of this ruling 
regime. We must continue to work within the U.N. framework, 
continuing to work with our ASEAN partners. I am sure that when 
I attend meetings later this spring, in June, in the region 
with our ASEAN partners and----
    Senator McConnell. Do any of the ASEAN partners care about 
this?
    Secretary Powell. They do, but they are at a loss, also, as 
to what to do. They care. Most of them are moving in the right 
direction, the direction we want them to move in, of democracy 
and representative government. But they have not yet generated 
the collective political will to apply the kind of pressures 
that might change the nature of this regime or this regime 
itself.
    Senator McConnell. I know you have a lot on your plate, but 
I would encourage you to pay some attention to this if you have 
any time at all because it truly is an outrageous regime.
    Secretary Powell. I shall, sir.
    Senator McConnell. Thank you so much for being here.
    Secretary Powell. Thank you, Mr. Chairman.

                     ADDITIONAL COMMITTEE QUESTIONS

    Senator McConnell. There will be some additional questions 
which will be submitted for your response in the record.
    [The following questions were not asked at the hearing, but 
were submitted to the Department for response subsequent to the 
hearing:]
             Questions Submitted by Senator Mitch McConnell
    Question. What is the status of the State Department's review of 
U.S. assistance programs to Egypt?
    Answer. We are reviewing all of our assistance programs in the 
Middle East beginning with our program in Egypt. The review is focused 
on ensuring that we are reaching as many Egyptians as possible with our 
aid; that our programs deliver assistance efficiently; that our funds 
promote the reforms targeted by the Middle East Partnership Initiative; 
and that we improve our measurement of results.
    We have completed a review of activities comprising the majority of 
the total U.S. Government economic assistance program for Egypt. The 
areas reviewed so far include economic reform, education reform, 
infrastructure, environment, and democracy and governance. We expect to 
complete the review by late June. We anticipate that, as part of this 
review, we will be spending a larger portion of our assistance 
resources on programs that encourage economic, educational, and 
political reform. The Egyptian government supports these new areas of 
focus.
    Question. How will democracy programs in Egypt be conducted in a 
manner free from the Egyptian government's oversight and interference?
    Answer. The United States emphasizes the importance of a strong 
commitment to the rule of law, transparency, and good governance 
through its U.S. Agency for International Development Mission. A six-
year, $32.5 million grant, for an NGO Service Center, supports 
strengthening the institutional capacity of local Egyptian NGOS in the 
areas of internal governance, sound financial management, and 
advocating for citizens' interests and participation in civic action. 
This NGO Service Center is helping citizens to bring street lighting to 
slum areas, introduce garbage collection, advocate for the rights of 
children and those with special needs, obtain documentation essential 
for voter registration, and help women become important and active 
members of society.
    During its September 2002 conference, Egypt's National Democratic 
Party adopted a policy document that advocated for movement toward a 
more open, democratic society with increased public participation. We 
support the strengthening of democratic institutions in Egypt and are 
working with reformers--both in and outside of the government--to 
ensure that our assistance furthers that objective.
    As part of our on-going review of assistance programs to Egypt, we 
are examining new mechanisms to assist non-governmental organizations, 
to ensure that the most active and effective civil society advocates 
are represented in U.S. programming.
    Question. How will the Middle East Partnership Initiative (MEPI) 
program ensure that U.S. assistance programs in the region will no 
longer be ``business as usual,'' and how will MEPI be coordinated with 
ongoing State and USAID education and health programs?
    Answer. The Department of State and USAID have established a common 
set of Middle East Partnership Initiative (MEPI) goals and objectives 
for Arab education reform: to expand access and enhance quality of 
basic formal education and higher education, especially for girls, so 
that Arab youth are empowered and prepared to participate in the global 
marketplace. The MEPI expands the reach of USG-directed education 
reform programs, especially in making greater resources available in 
countries that lack an AID presence.
    Building on pilot projects and through the development of country 
strategies, the MEPI will achieve increases in critical thinking 
skills, literacy (especially important for girls and women), English 
language skills, parental and community involvement, and early 
childhood education.
    Further, the MEPI will narrow the gap in educational attainment 
between men and women, and expand partnerships between United States 
and Arab universities involving private sector and civil society 
partners.
    These objectives guide MEPI education funding decisions; provide a 
basis for AID mission program reviews; and set the foundation for 
outreach and future competitive proposal processes.
    The MEPI education goals and objectives also help establish common 
ground between the U.S. Government and our Arab partners. Enhanced 
funding for MEPI gives us leverage in forging bilateral and regional 
consensus on Arab education reform efforts. Moreover, the resources we 
bring to partnering relationships both test the commitments made by 
education officials and allow flexibility in supporting educators who 
may have the will, but not the tools, to foster innovation.
    The MEPI builds on existing education development programs in the 
Middle East and North Africa. Health issues, by contrast, are beyond 
the scope of the MEPI, and will continue to be managed bilaterally 
through AID Missions and U.S. Embassy officers as appropriate.
    Question. How can the United States assist Abu Mazen and Minister 
of State for Security Affairs Mohammed Yusuf Dahlan in cracking down on 
Hamas and other extremist organizations operating in the West Bank and 
Gaza?
    Answer. We have made clear to the Palestinians that they must keep 
a clear endpoint in sight as they take security steps: disarmament and 
dismantlement of groups that oppose a two-state solution and employ 
terror or violence to achieve their aims. This will not be easy, and 
will require the assistance of Israel, the United States, regional 
states, and others in the international community.
    As Abu Mazen takes steps to consolidate control over the 
Palestinian security forces, the United States is ready to provide 
specific assistance through security channels.
        saddam hussein's support of terrorism in west bank/gaza
    Question. Has any information been uncovered in Iraq that provides 
new insights on cooperation between Saddam Hussein's repressive regime 
and terrorists on the West Bank and Gaza?
    Answer. On April 14, U.S. military forces in Baghdad arrested 
Muhammad Zaydan (a.k.a. Abu Abbas), the leader of the Palestinian 
Liberation Front and suspected planner of the Achille Lauro hijacking 
in which one American citizen was killed. Abu Abbas' group is known to 
have infiltrated operatives into the West Bank during the current 
intifada. His arrest was a clear example of Iraq's harboring of 
Palestinian terrorists. Abu Abbas' interrogation has just begun and the 
full extent of his terrorist activities will not be evident until it is 
complete.
    More time will be required to fully exploit thousands of documents 
seized during and subsequent to the war before a complete picture 
emerges of possible Iraqi links to Palestinian terrorists.
                                 syria
    Question. Is the Administration considering keeping the oil 
pipeline that runs from Iraq to Syria closed until such time that Syria 
ceases its support of international terrorists, particularly Hizballah?
    Answer. he Administration's policy regarding future Iraqi commerce, 
including oil, is that Iraqis will ultimately hold responsibility for 
making decisions about what they trade and with whom.
    Regarding Syria, the Secretary has publicly conveyed our strong 
concerns about Syria's support for Palestinian rejectionists and 
Hizballah. As the Secretary outlined in his testimony, a new strategic 
dynamic is emerging in the region and Syria stands at a crossroads: it 
can make choices that will lead to improved relations with the United 
States or it can decide to continue current behavior and face further 
isolation. The Administration retains the full range of diplomatic, 
economic, and military options to confront states such as Syria that 
harbor terrorist groups and are developing weapons of mass destruction. 
We will continue to measure Syria's progress by its actions, not its 
words.
    Question. To what extent is Iran hampering reconstruction and 
democratic reform in Iraq?
    Answer. We are concerned about Iranian attempts to influence the 
outcome of the political process in Iraq, and to encourage the Shia to 
not cooperate with Coalition efforts to move this process forward. We 
expect the Iranians to support, or at the very least not obstruct the 
effort to establish a legitimate, stable, and representative government 
in Iraq. A stable Iraq at peace with its neighbors is vital for the 
future stability of the Middle East and is in the interest of all the 
states in the area, including Iran.
    Question. Does Iran today possess the independent capability to 
produce its own nuclear weapons?
    Answer. We do not believe Iran currently possesses the capability 
to produce independently a nuclear weapon. However, we are gravely 
concerned by Iran's ambitious efforts to acquire an indigenous 
capability to produce weapon-grade fissile material that we assess 
would be used to manufacture nuclear weapons. Unless these efforts are 
stopped, Iran might be able to produce its first nuclear weapon by the 
end of this decade. We are using all the diplomatic tools available to 
us to prevent that from occurring.
    The February visit of IAEA Director General ElBaradei to Iran with 
his senior safeguards staff, followed by monthly IAEA inspections since 
then, has helped raise awareness, and growing concern, in the 
international community about Iran's nuclear program. The Iranian 
regime only recently publicly acknowledged an ambitious (and extremely 
costly) pursuit of indigenous nuclear fuel-cycle capabilities, 
including enrichment and ``spent fuel management''--a euphemism for 
reprocessing. The IAEA has noted that Iran's nuclear program appears 
significantly more advanced than they had realized previously. It is 
highly unlikely that Iran could have achieved such an apparent state of 
technical progress in its gas centrifuge enrichment program without 
having conducted experiments with nuclear material, an activity that 
Iran denies. Such experiments would be a serious violation of Iran's 
safeguards obligations. The IAEA is thus examining Iran's nuclear 
activities and seeking answers to the many unresolved questions. We 
look forward to a detailed report on the inspection results to date 
from Dr. ElBaradei to the mid-June IAEA Board.
    Question. The fiscal year 2003 Foreign Operations bill includes a 
provision authorizing funds ``to support the advancement of democracy 
and human rights in Iran.'' What democracy and human rights programs 
does the State Department intend to support?
    Answer. The State Department welcomes this authorization to expand 
our current efforts across the Middle East to foster greater democracy 
and respect for human rights to such a critical country as Iran. We 
believe it is expressly in the interest of the United States to include 
Iran in our current efforts to help get information to people 
throughout the region seeking political reform.
    Iran is unique in the risks the Iranian people have taken to call 
upon their government for change. The Iranian government has ignored 
the call for constructive reform and chosen instead to continue 
pursuing destructive policies, including support for terrorism and 
pursuit of WMD.
    We see a variety of opportunities for outreach programs, but 
because of the repression inside Iran against social activists, we will 
look largely to external non-governmental organizations to implement 
the programs, such as the International Republican Institute and the 
National Democratic Institute, as well as the media, and the Internet.
    The Bureau of Democracy, Human Rights, and Labor (DRL) has begun 
programming fiscal year 2003 Human Rights and Democracy Fund (HRDF) 
money and is considering projects that would include Iran. The Middle 
East Partnership Initiative (MEPI) is seeking ways to work with 
nongovernmental organizations, such as developing a website with 
practical guidance on running election campaigns. Through DRL and MEPI 
democracy and rule of law programs, we will explore pilot projects to 
see what works and then build from there.
    Meanwhile, we have recently launched a State Department website in 
Farsi that will give the Iranian people direct access to information 
about U.S. policy on Iran, including key policy statements, translation 
of the Iran Human Rights report, and excepts from Patterns of Global 
Terrorism.
    We hope for a continuation of this authority in fiscal year 2004. 
We would also encourage expanding this authorization to Syria and 
Libya, other countries sorely in need of help for proponents of 
democratic and human rights reform.
    Question. Do you anticipate additional funds will be needed in the 
fiscal year 2004 foreign operations bill for relief and reconstruction 
in Iraq?
    Answer. The funds requested by the President in his wartime 
supplemental request were arrived at following a comprehensive, seven-
month interagency process. In the process of formulating this request, 
we were forced to make assumptions regarding the post-conflict 
situation, such as the amount of damage Saddam would do to his own 
infrastructure. We were also unsure of the state of the Iraq's civilian 
infrastructure after more than two decades of Saddam Hussein's misrule.
    We tried to capture all the costs in the supplemental, and we are 
grateful for Congress' support for the President's request. However, 
some important factors are still unknown at this time, including the 
state of Iraq's infrastructure, its ability to finance its own 
reconstruction and humanitarian needs, the costs that may be incurred 
related to reprisals and the extent of refugee/IDP returns. The State 
Department, through USAID, as well as the military's Civil Affairs 
teams are working very hard right now to develop assessments of the 
situation on the ground.
    We have begun the process of lifting our own sanctions against Iraq 
since the regime that was the target of these sanctions is no longer in 
power. We are also working in the Security Council for an immediate 
lifting of U.N. economic sanctions. This will allow the United Nations, 
contractors, and the Iraqis to bring in the goods they need to rebuild 
Iraq. It will also allow the Iraqis to start producing and selling oil 
to help fund their relief and reconstruction needs.
    Question. What steps has the State Department taken to secure debt 
forgiveness for Iraq from Russia (estimated at $7.6 billion) and France 
(estimated at $2.25 billion)?
    Answer. We have been working closely with Treasury colleagues on 
ways to address Iraq's debt. In the immediate term, we have told other 
creditors not to expect Iraqi debt payments, in order to not divert 
attention or resources from the immediate priorities of establishing a 
stable Iraqi government, meeting Iraq's urgent humanitarian needs, and 
beginning reconstruction.
    Overall, Iraq's debt is a medium-term, not short-term problem. We 
need first to obtain reliable data on Iraq's debt and evaluate Iraq's 
debt sustainability and capacity to pay.
    We have held informal bilateral discussions with visiting foreign 
government officials. USG officials also discussed the question of how 
to proceed with Iraq's debt at the spring World Bank/IMF meetings and 
in the G-7. In April, the Paris Club, of which both France and Russia 
are members, held its first discussion of Iraq. Creditor countries 
discussed the likelihood of an eventual multilateral debt treatment for 
Iraq, without coming to any strong conclusions.
    We want a multilateral approach, which will maximize the debt 
relief to Iraq and give the country breathing room to proceed with 
rebuilding after the decades of Saddam's misrule while spreading the 
cost of that relief fairly among different creditors. The Paris Club, 
which has already begun data reconciliation and preliminary discussions 
of Iraq debt, is the forum that is best suited to provide maximum 
relief.
    An eventual debt treatment should be based on objective, economic 
criteria and should include appropriate conditionality. Until Iraq is 
ready for a multilateral debt treatment, a process that could take 
about two years, creditors should understand that it is unrealistic for 
them to expect to be paid. A formal ``deferral'' of debt is not 
necessary, as long as countries do not try to coerce payment.
    Question. How does the State Department intend to promote dialogue 
between the SPDC and the NLD in Burma at the upcoming ASEAN meeting in 
June?
    Answer. The United States has long been a supporter of the efforts 
of the National League for Democracy and other members of Burma's 
democracy movement to bring democracy and national reconciliation to 
their country. We also strongly support the efforts of United Nations 
Special Envoy Razali Ismail to foster dialogue between Daw Aung San Suu 
Kyi and the Burmese regime; national reconciliation is key to the 
future security and prosperity of the Burmese people. We have 
encouraged and will continue to encourage Burma's neighbors to support 
and work with Ambassador Razali.
    Burma's political and economic problems threaten not only the 
livelihood of the Burmese people but also regional prosperity and 
stability. Three obvious examples are narcotics, refugees, and 
infectious diseases. In fact, in the international community, it is 
Burma's neighbors who suffer most directly from Burma's misguided 
policies. ASEAN was formed to preserve regional stability, and the 
ASEAN countries invited Burma to join the organization in the hopes 
that Burma would adopt international norms. We will work with ASEAN 
toward this goal.
    Question. In February, Assistant Secretary Lorne Craner forcefully 
articulated the SPDC's lack of interest and political will in 
continuing negotiations with Daw Aung San Suu Kyi and suggested State's 
interest in additional sanctions against the junta. What sanctions are 
you contemplating, and how closely do you coordinate policy toward 
Burma with our allies--in particular the British?
    Answer. The Administration has considered a full range of measures 
both positive and negative to encourage the military regime in Burma to 
take appropriate steps toward dialogue and national reconciliation. We 
already have in place an extensive array of sanctions, including an 
arms embargo, a ban on all new U.S. investment in Burma, the suspension 
of all bilateral aid, the withdrawal of GSP privileges, the denial of 
OPIC and EXIMBANK programs, visa restrictions on Burma's senior 
leaders, and a vote against any loan or other utilization of funds to 
or for Burma by international financial institutions in which the 
United States has a major interest. We have also maintained our 
downgraded diplomatic representation at the Charge d'Affaires level 
since 1990. We are keeping our options open and believe multilateral 
efforts are most effective. U.S. efforts are closely coordinated with 
cial Envoy Razali, our allies and friends through frequent 
communication and meetings.
    Question. A better coordinated approach is needed between those who 
manage Burma policy at the State Department on a day-to-day basis and 
those on Capitol Hill who follow Burma closely. This is an issue where 
there should be no policy differences between the Hill and the State 
Department. Please have those at the State Department involved in Burma 
brief the Hill on developments in Burma, as well as the State 
Department's intent to support the NLD and the U.N. special envoy's 
mission to bring about dialogue between the SPDC and the NLD.
    Answer. We have frequent contact with interested parties in the 
Congress on this issue, including briefings, and will continue to do 
so. We remain strong supporters of the efforts of U.N. Special Envoy 
Razali to foster dialogue between Daw Aung San Suu Kyi and the Burmese 
regime.
    Question. Is additional assistance required in the fiscal year 2004 
foreign operations bill to meet the basic needs of refugees from Burma 
in Thailand?
    Answer. The President has requested $6.5 million for Burma-
earmarked ESF funds in fiscal year 2004. We believe this amount will be 
adequate to provide for the basic needs of refugees from Burma in 
Thailand.
    We anticipate spending $3.0 million of fiscal year 2003 earmark 
funds on humanitarian-related projects coordinated by NGOs that provide 
health and educational services to refugee and exile communities on the 
Thai-Burma border. In addition to the ESF funds for Burma, Migration 
and Refugee Assistance funds provide food and health assistance to the 
136,000 Burmese refugees in ten camps along the Thai-Burma border. In 
fiscal year 2003 the Bureau of Population, Refugees, and Migration has 
made grants of more than $5 million to NGO providers in Thailand as 
well as funding 25 percent percent of UNHCR and 21 percent of ICRC 
appeals worldwide.
                                cambodia
    Question. Where is the Government of Cambodia securing the $50 
million in damages it owes to the Government of Thailand and Thai 
businesses as a result of riots in Phnom Penh in January?
    Answer. Cambodian demonstrators broke into and burned the Thai 
Embassy on January 29, 2003, then moved on to methodically attack other 
Thai businesses, including the Samart and Shinawatra telecommunications 
firms. The demonstrators also burned down the Royal Phnom Penh Hotel 
and vandalized the Juliana Hotel. Damage to the embassy and Thai 
businesses has been estimated at about $50 million, although business 
claims for compensation are subject to negotiation with the Cambodian 
government. In its Aide Memoire of January 30, the Royal Thai 
Government (RTG) set as a condition for restoration of normal relations 
the full compensation for all losses incurred by the RTG, its 
diplomatic personnel and Thai nationals. The Cambodian government paid 
$5.6 million as recompense for the Thai embassy. The funds were 
reportedly derived from Phnom Penh municipality revenue surpluses. 
Private claims are under negotiation; unconfirmed reports indicate 
future tax credits are being offered.
    Question. Given the failure of the Cambodian Government to protect 
the Embassy of Thailand from rioters, has the State Department 
considered suggesting a more secure venue outside of Cambodia for the 
upcoming ASEAN meeting in June?
    Answer. No. As Secretary Powell stated at the April 30 hearing, he 
plans to attend meetings in connection with the ASEAN Regional Forum 
and ASEAN Post Ministerial Conference, which are being held in Phnom 
Penh in mid-June with Cambodia as chair. Responding to direct requests 
from the United States and other missions, the Cambodian government has 
taken steps to improve security. The concrete steps taken to date 
include the provision of more security personnel for some embassies, 
closer coordination on embassy security issues, and stricter 
enforcement of regulations regarding the holding of public 
demonstrations. We continue to press for more action on safety. We note 
that Cambodians held the ASEAN summit last November without security 
problems.
    Question. Does the State Department find any inconsistencies in its 
support for a Khmer Rouge tribunal that relies upon Cambodia's corrupt 
legal system and its repeated condemnation of the lawlessness and 
impunity that reigns in Cambodia today?
    Answer. We remain committed to the establishment of a credible 
Khmer Rouge Tribunal inside Cambodia that relies upon U.N. 
participation, which sends a powerful message to the Cambodian people 
that the international community cares about their suffering and that 
those responsible will be held accountable. Given international 
involvement, we expect that the Tribunal will exercise its jurisdiction 
in accordance with international standards of justice, fairness, and 
due process. We also expect that passage and implementation of this 
agreement will meet the standards set out in U.N. General Assembly 
resolution 57/228 of December 18, 2002, to ensure a credible tribunal.
    With many of the perpetrators very advanced in age and some having 
died without being held accountable, this may be the last opportunity 
for the people of Cambodia to see justice for the egregious crimes of 
the Khmer Rouge regime.
    We continue to speak out strongly against political violence, 
corruption, and the climate of impunity in Cambodia. To help end this 
climate of impunity, we seek to promote the rule of law. The U.N.-
Cambodia agreement presents a unique opportunity to seek justice for 
the people of Cambodia and to advance the rule of law. We recognize, 
however, that achieving a credible process will not be easy given the 
state of the judiciary in Cambodia today. After the July election, we 
will be joining other U.N. member states in seeking strong 
international support to help successfully implement the KR Tribunal. 
According to the U.N.-RGC agreement, should the RGC change the 
structure or organization of the Extraordinary Chambers or otherwise 
cause them to function in a manner that does not conform with the terms 
of the agreement, the United Nations reserves the right to cease to 
provide assistance, financial or otherwise, pursuant to the agreement.
    Question. Does the State Department acknowledge--as former forestry 
monitor Global Witness asserts--that CPP is securing much needed 
funding for elections through illegal logging?
    Answer. The Administration has long made clear its views on the 
responsibility of the Cambodian authorities to prevent illegal logging, 
most recently through an April 25 State Department Spokesman's 
Statement.
    We have reason to believe that officials receive illegal logging 
revenues. However, we have no independent confirmation that the CPP is 
securing such funding for the elections. Corruption is a severe problem 
in Cambodia, as is illegal logging. Moreover, the State Department is 
concerned about the lack of serious election campaign finance 
regulation in Cambodia and other election abuses; the National Election 
Committee must show the world that it can properly regulate the 
elections. Aside from the overall election regulatory framework, our 
chief concerns regarding elections are to work to eliminate politically 
motivated violence, coercion and intimidation, and to seek equal access 
to the media for all political parties.
    Question. Is Indonesia waging an effective war against terrorism, 
and does President Megawati have the political will necessary to clamp 
down on Islamic fundamentalists?
    Answer. Since the terrorist attacks in Bali on October 12, 2002, 
the Indonesian government has waged a very effective campaign against 
terrorist networks on its soil. In the past six months, the Indonesian 
National Police have arrested over 60 suspected members of the Jemaah 
Islamiyah terrorist organization, which is believed to be responsible 
for the Bali atrocity and numerous other attacks. About 20 of those 
arrests have occurred within the past two weeks, which indicates that 
the Indonesian authorities remain committed to tracking and dismantling 
terrorist groups. Although the threat of terrorism in Indonesia still 
exists, the progress of the Indonesian police has disrupted ongoing 
planning of attacks and has eroded--but not completely eliminated--the 
ability of terrorist groups to carry out those attacks.
    In addition, the trial of Jemaah Islamiyah's purported spiritual 
leader, Abu Bakar Ba'asyir, began on April 23. Ba'asyir is charged with 
seeking to overthrow the Indonesian government by violent means, and 
faces severe punishment for treasonable offenses if he is found guilty. 
His indictment also accuses him of approving a series of bombings of 38 
churches in Indonesia in 2000, which resulted in 19 deaths. So far, 
there has been minimal public outcry against Ba'asyir's arrest and 
trial, which demonstrates the Indonesian people's rejection of 
terrorist tactics.
    We continue to emphasize to President Megawati and the Indonesian 
government that the fight against terrorism is an ongoing endeavor, and 
must not be allowed to flag in the wake of these important arrests and 
prosecutions. The vast majority of the Indonesian public opposes 
terrorist violence, and will support the Indonesian government's 
efforts to clamp down on individuals and organizations that attempt to 
use violence to further political goals.
    Question. What has been the response of the State Department to 
Indonesian politician Amien Rais's comments last month that President 
Bush should be tried by the United Nations as a war criminal?
    Answer. The State Department does not make a practice of responding 
to every criticism of U.S. policy voiced by individual Indonesian 
politicians. However, the State Department has complained to the 
Indonesian government on numerous occasions, particularly during the 
recent hostilities with Iraq, about intemperate, inaccurate, and in 
some cases reprehensible remarks made by various political figures 
about President Bush and the United States. Those complaints have been 
registered both with the Indonesian Embassy in Washington, and directly 
with Indonesian government authorities in Jakarta.
    Question. Two students recently received three year jail terms for 
burning photographs of President Megawati and Vice President Hamzah 
Haz. Do these draconian sentences indicate a backsliding of political 
and legal reforms in Indonesia?
    Answer. The two students were sentenced under Article 134 of the 
criminal code. The sentences are inconsistent with internationally 
accepted human rights norms as well as treaties signed by the 
Government of Indonesia. Public opinion in Indonesia is divided, with 
some criticism of the government for prosecuting these cases, along 
with assertions that the students' actions are not appropriate in the 
Indonesian cultural context.
    The open discussion of these cases in the Indonesian media 
indicates that Indonesia's transition to democracy is generally on 
track, although by no means complete. The outcome of Indonesia's 
experiment with democracy has profound implications for our strategic 
interests in preserving regional stability and strengthening respect 
for human rights and the rule of law. The U.S. Government will continue 
to assist Indonesia with its effort to create a just and democratic 
society.
    Question. Two students recently received three year jail terms for 
burning photographs of President Megawati and Vice President Hamzah 
Haz. How will crackdown on freedom of expression impact election 
campaigning in the run up to parliamentary and presidential polls next 
year?
    Answer. With substantial U.S. Government assistance, Indonesia has 
made considerable progress in its political reform efforts, and is on 
track to hold its first direct Presidential election and its next 
Parliamentary elections in 2004. The eve of an election year is 
bringing predictable political struggles to Indonesia, and members of 
the public are exploring avenues to voice their discontent with 
government policies. This is all part of the democratic process, and 
should be seen as evidence of continued growth rather than portents of 
instability.
    To date, we have not seen a pattern of suppression of the public's 
freedom of speech or expression.
    Question. Two students recently received three year jail terms for 
burning photographs of President Megawati and Vice President Hamzah 
Haz. Has President Megawati issued any public statements condemning the 
sentences?
    Answer. President Megawati has not made any public comments on the 
sentences.
    Question. Is the State Department concerned that Thailand has 
exercised extra judicial executions in its campaign to crackdown on 
drugs?
    Answer. We are deeply concerned by the wave of killings that has 
accompanied Thailand's anti-drug campaign, which began on February 1, 
2003. We have had numerous discussions with senior Thai officials in 
both Bangkok and Washington on this topic. In these discussions, we 
have urged that all these cases be thoroughly and credibly 
investigated, and that criminal charges be brought against any 
suspected perpetrators. We welcome the Royal Thai Government's public 
declaration that all violent deaths will be thoroughly investigated, 
and that government officials who break the law will be held 
accountable for their actions.
    Question. Has Thailand been a cooperative partner in the war on 
terrorism, and how concerned are you with terrorist activity in 
southern Thailand?
    Answer. Thailand continues to cooperate closely with the United 
States on all aspects of counterterrorism, including intelligence, law 
enforcement and counterterrorism finance. Thailand was an active 
supporter of Operation Enduring Freedom, and Thai military engineers 
are currently doing reconstruction work in Afghanistan. Thailand has 
hosted several U.S.-Thai military exercises with significant 
counterterrorism components. It has also established an inter-agency 
financial crimes group to coordinate counterrorism finance policy. 
Recently, Thailand indicated its willingness to join a critical border 
security program called the Terrorist Interdiction Program.
    Despite recent advances in the global war on terror against both 
al-Qaida and Jemaah Islamiyah, the terrorism threat remains 
significant, and we must remain vigilant. As a major transportation 
hub, Thailand remains vulnerable to the activities of terrorists and 
their operatives. We are confident of the Royal Thai Government's 
commitment to the counterterrorism effort and continue to encourage 
Thailand and its neighbors in Southeast Asia to strengthen their 
ability to respond to terrorist threats.
    Question. What is our exit strategy for Plan Colombia, and do you 
foresee continued substantial foreign assistance requests for Colombia?
    Answer. United States policy towards Colombia supports the 
Colombian Government's efforts to strengthen democratic institutions, 
promote respect for human rights and the rule of law, intensify 
counter-narcotics efforts, foster socio-economic development, address 
immediate humanitarian needs, and end the threats to democracy posed by 
narcotics trafficking and terrorism. We will measure the success of our 
programs by their effectiveness in reducing illegal drug cultivation 
and terrorism, and fostering improvements in all areas of Colombian 
life.
    It would be misleading to attempt to provide an expected time 
schedule for full achievement of United States objectives in the 
country; Colombia's deep-seated internal conflict dates back almost 40 
years. Realization of U.S. policy goals will require a concerted 
Colombian strategy and effort--backed by sustained U.S. assistance over 
a period of years--to establish control over its national territory, 
eliminate narcotics cultivation and distribution, end terrorism, and 
promote human rights and the rule of law.
    The Uribe administration has demonstrated a serious commitment to 
pursuing these objectives with a variety of counterdrug, humanitarian, 
and security measures. President Uribe has already demonstrated 
impressive progress towards achieving Plan Colombia goals. The GOC 
appears to be largely on track to fulfill its financial obligations 
under Plan Colombia and has taken measures to increase the percentage 
of GDP destined for security expenditures. The most recent CNC figures 
showing a decline in the amount of coca cultivation is encouraging. 
Nevertheless, Colombia will continue to need substantial U.S. help and 
support if it is to succeed in accomplishing its objectives. We are 
only halfway through the Plan Colombia timetable, and we would expect 
to continue significant assistance to Colombia at least through 2006. 
Over the longer term, and with continued progress towards achieving the 
goals that the Colombians and we have set for ourselves, we would 
expect to drastically reduce our financial support to Colombia.
    Question. Does the State Department believe that Colombia is 
capable--politically, monetarily, and technically--of sustaining Plan 
Colombia, absent U.S. funding?
    Answer. Plan Colombia is a six-year program originally instituted 
by then-President Andres Pastrana in October 1999. From the outset, the 
United States government praised and supported this comprehensive 
effort to address Colombia's many, inter-related problems and, with 
Congressional support, has committed itself to help the Government of 
Colombia sustain Plan Colombia with training, equipment and funds. We 
are now about halfway through the Plan. Despite the Government of 
Colombia's remarkable progress in implementing the Plan, Colombia will 
need continuing United States assistance.
    Colombian President Alvaro Uribe took office in August 2002; he 
immediately endorsed and expanded upon Plan Colombia. Politically, 
President Uribe has maintained public support for Plan Colombia and his 
own more stringent fiscal measures. Soon after his inauguration, Uribe 
imposed a one-time tax on the assets of the wealthiest segment of 
Colombians. Colombian authorities expect this tax to yield the 
equivalent of 1.2 percent of gross domestic product (GDP), between $800 
million and $1 billion. The Colombian 2003 budget also calls for 
increased government defense expenditures, which would increase 
military, and police spending. The Uribe Administration convinced the 
Colombian Congress to enact extensive, longer-term tax and pension 
reform packages and is moving ahead with a referendum on reducing 
government operating costs.
    Monetarily, Colombia will continue to need substantial United 
States help and support if it is to succeed in defending its democracy 
and the rule of law from narcotraffickers while improving human rights 
and promoting development--all goals of Plan Colombia. In 2002 
President Uribe promised President Bush that his government would, 
consistent with the 2002 Supplemental Appropriations Act, establish 
comprehensive policies to eliminate narcotrafficking as well as to 
reform the Colombian military and police. Uribe has delivered on his 
promise to furnish significant additional financial and other resources 
to implement those policies and reforms.
    The Colombian government's national security strategy, will set out 
the Uribe Administration's plans to dedicate even more Colombian 
resources to improving security while fighting the drug trade. 
President Uribe has repeatedly stressed that Colombia is undertaking 
these commitments to ensure the effectiveness of joint efforts with the 
United States Government to achieve our common goals in combating 
narcotics trafficking and terrorism.
    We have used U.S. assistance to give technical support, in the form 
of equipment, advisors and training to support Plan Colombia. It will 
take more time to train enough pilots, soldiers, judges, agricultural 
experts, and others that Colombia will need to staff Plan Colombia 
completely with Colombians, but we are well on the way.
    Question. Reports indicate that while aerial spraying may be 
working in Colombia, increased coca growth is appearing in neighboring 
countries, including Bolivia (20 percent above 2001 levels) and Peru (5 
percent above 2001 levels).
    What is the State Department's strategy for curtailing this spill-
over effect, and have Bolivia and Peru requested increased 
counternarcotics assistance?
    Answer. We are very pleased that the recently-released CNC ``Major 
Narcotics Producing Nations'' report shows a 15 percent decrease in 
coca cultivation in Colombia for 2002, including an 80 percent 
reduction in the principal production area of Putumayo. This success in 
Colombia will increase the pressure to cultivate coca elsewhere, 
especially in Peru and Bolivia where there is a past history of coca 
cultivation. As long as coca is a good cash crop, people will farm it 
wherever it provides the most profit for the least risk and effort. 
This is the reason our attack against cocaine is based on a regional 
and global strategy.
    Although our major attention and resource focus during the last 
three years has been Colombia, we have continued major and long-term 
programs in Bolivia and Peru to combat the immediate problem of coca 
cultivation and build permanent, professional capacity in each country 
to combat all facets of drug trafficking from raw resources to final 
product. We have smaller programs to improve the drug fighting 
infrastructure and regional cooperation (especially in controlling 
cross-border smuggling) in other countries neighboring Colombia and 
within the major drug trafficking transit corridors.
    While there were increases in coca cultivation in Peru and Bolivia 
this last year, both countries are still well below their peak 
productions--over 70 percent less than in the mid-1990s. Because of 
past eradication success, the actual coca cultivation increase in 2002, 
while of continuing concern, is not as large as might appear based on 
percentages: a total 7,100 hectares increase for both countries 
combined, compared to a regional total of over 205,000 hectares. We are 
maintaining our fiscal year 2004 funding requests at the fiscal year 
2003 levels for Peru and Bolivia, focusing on firming up the political 
support for counter-drug policies rather than program expansion. We 
will continue serious eradication and counter-drug institution building 
in both countries with the current fiscal year 2003 budget and fiscal 
year 2004 budget request.
    Question. Did Armenia offer support to Operation Iraqi Freedom, and 
have they offered any assistance in the post-Saddam period?
    Answer. Armenia has been and continues to be concerned about the 
situation in Iraq because of the sizeable ethnic Armenian population 
there. There are reportedly 30,000-40,000 ethnic Armenians living in 
Iraq, and between 7 and 12 Armenian churches in Iraq. Ambassador Ordway 
is in close contact with officials of the Armenian government to 
discuss contributions Armenia can make in the reconstruction of Iraq.
    Question. There have been numerous discussions between the 
proponents of the CANDLE project for Armenia and the State Department.
    Given declining funding levels for Armenia and the costs associated 
with this project--between $40 and $70 million--does the State 
Department intend to support this project?
    Answer. The State Department is continuing discussions with the 
sponsors of the proposed CANDLE project. We previously requested a 
number of items from the CANDLE sponsors, including evidence of support 
from the Government of Armenia, commitments of funding from other 
donors and/or investors, and commitments of funding for ongoing 
operating costs. When these items are provided, the State Department 
will be in a position to consider providing additional funding for this 
project. Declining funding levels for Armenia will definitely play a 
part in our decision whether to provide further funding for this 
project.
    Question. How might Aliyev's incapacitation impact negotiations 
over Nagorno-Karabakh?
    Answer. A peaceful, mutually acceptable resolution of the conflict 
over Nagorno-Karabakh will require that both sides make politically 
difficult compromises. This will require strong leadership in both 
Armenia and Azerbaijan capable of selling an agreement to the two 
countries' publics.
    Both President Aliyev in Azerbaijan and President Kocharian in 
Armenia have made clear that they are committed to the peace process. 
We believe that they play key roles in the search for peace.
    Question. Has there been any notable progress in negotiations 
between Armenia, Azerbaijan, and Nagorno-Karabakh over the conflict?
    Answer. Momentum generated at the Key West peace talks in April 
2001 waned in 2002. This February, presidential elections were held in 
Armenia. Parliamentary elections will be held there in late May, 
followed by presidential elections in Azerbaijan in October. The 
political atmosphere surrounding these elections has caused both sides 
to adopt conservative approaches to the peace process, which will 
likely continue through the fall.
    The OSCE Minsk Group Co-Chairs (United States, Russia, and France) 
continue to promote negotiations between the parties. The Co-Chairs 
instituted an additional level of talks in 2002 between Special 
Representatives of the two Presidents. These talks supplement the Co-
Chairs' visits to the region and meetings between the Presidents. The 
Co-Chairs are working to lay the groundwork for serious negotiations as 
soon as the two sides are ready to move forward. We believe the period 
following the elections in Azerbaijan will provide an important new 
opportunity to make progress in the peace process.
    Question. What are the next steps in engaging North Korea on a 
multilateral basis, and given past deceptions, how does the State 
Department determine whether the North Korean regime can be trusted to 
negotiate in good faith?
    Answer. The Administration is actively considering next steps in 
light of our discussions in Beijing and our subsequent, ongoing 
consultations with South Korea, Japan, China, and other key concerned 
states and parties. Precisely whether and/or how we proceed on further 
multilateral talks remains to be determined, but we have not excluded 
the possibility of a further round of talks in Beijing, at which we 
would deem essential the participation of Japan and South Korea.
    As to whether the North would negotiate in good faith, the United 
States seeks the verifiable and irreversible termination of North 
Korea's nuclear weapons program. We will not negotiate rewards or 
inducements to obtain this or North Korea's necessary compliance with 
the NPT, the North-South Denculearization Declaration, or its other 
international obligations. If North Korea acts to terminate its nuclear 
weapons program the United States is prepared to consider a bold 
approach that would create a fundamentally new relationship, to the 
extent North Korea is prepared to address other long-standing American 
concerns in the areas of WMD and missile proliferation, its 
conventional force posture, and human rights and humanitarian matters.
                              north korea
    Question. How can North Korea be compelled to comply with its 
obligations under any agreement, and how can the North's compliance 
with agreements be adequately verified?
    Answer. Any resolution of the nuclear issue must include the views 
of North Korea's neighbors, particularly the ROK and Japan. We are 
working with the international community to apply multilateral pressure 
to change North Korea's behavior and to ensure that North Korea 
responds to the international community's demands that it irreversibly 
and verifiably dismantle its nuclear weapons program and comply with 
its international obligations.
    Verification will be an essential component of the elimination of 
North Korea's nuclear weapons program. The International Atomic Energy 
Agency (IAEA) is a logical partner to verify full dismantlement of 
North Korea's nuclear weapons program and establish an on-going 
monitoring program. If needed, the IAEA can access technical support 
from appropriate states to address any unique challenges that may 
arise.
    Question. What more can the United States do to safeguard the human 
rights and dignity of the people of North Korea, including those 
seeking refuge in China?
    Answer. I share your concern about the repression and suffering of 
the North Korean people and am committed to keeping human rights and 
humanitarian concerns high on our agenda with North Korea. During talks 
in Pyongyang in October 2002, Assistant Secretary for East Asian and 
Pacific Affairs James A. Kelly highlighted United States concerns about 
the deplorable human rights record of the North Korean regime. 
Assistant Secretary Kelly also raised these concerns in the talks on 
North Korea in Beijing April 23-25. Assistant Secretary of State for 
Democracy, Human Rights and Labor Lorne W. Craner has also raised 
concerns about North Korean refugees in the context of our human rights 
dialogue with China held in Beijing in December.
    The involuntary return of some North Koreans in China to the DPRK 
is a matter of deep concern to this Administration. State Department 
officials in Washington and Beijing have expressed on multiple 
occasions our concern to the Chinese, and have pressed them not to 
return any individual to North Korea against his or her will. We 
consistently urge China to adhere to its international obligations 
under the 1967 Protocol on Refugees and allow UNHCR access to this 
vulnerable population in order to assess the status of these 
individuals.
    In April, the United States, in close coordination with the EU, 
South Korea, and Japan, co-sponsored a resolution addressing the human 
rights situation in North Korea at the 59th session of the U.N. 
Commission on Human Rights (CHR). The resolution called on the 
Government of the Democratic People's Republic of North Korea to 
respect and protect the human rights of its citizens. The resolution, 
the first such on North Korea, passed by a vote of 28 to 10, with 14 
abstentions.
    Finally, the United States has been a significant donor of food aid 
to North Korea through the World Food Program's annual appeals. On 
February 25, I announced an initial donation of 40,000 tons of food 
assistance and that we are prepared to contribute as much as 60,000 
additional metric tons of such aid this year. I am concerned about 
monitoring and access to all those in need in North Korea; we have 
conveyed this directly to the North Koreans. Additional food aid 
donations will be based on need in North Korea, competing needs 
elsewhere in the world and improvements in food aid monitoring in North 
Korea. Recognizing the deep and urgent need of the North Korean people, 
President Bush has made clear his determination that our food aid will 
not be used as a political tool.
    Human rights and humanitarian concerns in North Korea will continue 
to have a prominent place in our North Korea policy, including our 
multilateral discussions on North Korea with South Korea, China, Japan, 
and others.
                              afghanistan
    Question. To what extent is Iran hampering reconstruction and 
democratic reform in Afghanistan?
    Answer. We do not believe Iran is hampering reconstruction in 
Afghanistan. However, we see continuing efforts to channel support to 
people inside Afghanistan working against the central authority. We 
have made clear that this is unacceptable.
    To date, Iran has pledged support for the Government of Afghanistan 
and has played an active role at donor meetings. On December 22, 2002, 
Iran signed, with Afghanistan and Afghanistan's other five neighbors, 
the Kabul Declaration on Good Neighborly Relations that commits the 
nations to constructive and supportive bilateral relationships based on 
the principles of territorial integrity, mutual respect, friendly 
relations, cooperation and non-interference in each other's internal 
affairs. At the Tokyo Conference in January 2002, Iran pledged $560 
million (a mixture of grants and loans) over six years towards Afghan 
reconstruction. Since then, Iran has been actively engaged in the 
rehabilitation of the road from Islam Qala on the Iranian border to 
Herat in western Afghanistan and in the repair of electricity 
transmission lines, and has signed an agreement with Afghanistan and 
India to provide greater access to the Iranian port of Charbahar.
    Iran has also worked positively with Afghanistan to support 
regional narcotics interdiction efforts and has provided $3 million to 
support alternative livelihood assistance in provinces where the Afghan 
Government is destroying poppy crops.
    Question. What preparations are taking place to support national 
elections in Afghanistan scheduled for June 2004, and are there any 
discussions taking place to postpone the elections in order to better 
prepare for the polls?
    Answer. The United States supports the Afghan Government's 
commitment to holding the elections in June 2004, as called for in the 
Bonn Accords. We have budgeted $22 million in ESF for fiscal year 2003, 
and requested $30 million for fiscal year 2004, to support the Bonn-
related activities. A modest portion of these funds will support the 
elections process.
    Under the Bonn Accords, the U.N. Assistance Mission in Afghanistan 
(UNAMA) is charged with helping prepare for Afghan elections. UNAMA is 
preparing a budget for registration and elections, and initial 
indications point to costs well in excess of $100 million. This budget 
remains mostly unfunded. Registration is nonetheless expected to begin 
in August 2003, and we are working closely with Afghan and U.N. 
officials to rally other donors to fill the anticipated funding gap. 
UNAMA also is supervising a national public education campaign, and the 
International Foundation for Election Systems (IFES) is completing an 
assessment of logistical requirements for the elections.
    Question. What steps has Pakistan taken to rout Afghan terrorists 
from their soil, and is there any indication that these terrorists are 
in contact with active or retired Pakistani intelligence officers?
    Answer. Pakistan is a key ally in the war against terrorism and 
continues its active measures against extremists and terrorists. 
President Musharraf has given Pakistan's full commitment to the United 
States to track down and apprehend Taliban and al-Qaida leaders.
    Since the fall of 2001, Pakistan has apprehended more than 500 
suspected al-Qaida/Taliban operatives and affiliates, including 
September 11 plotter Ramzi bin-al-Shibh and al Qaida operational 
commander Khalid Sheikh Mohammed. It has moved against terrorists and 
extremists through its own legal system, and has committed its own 
security forces--and taken casualties--to pursue Taliban and al-Qaida 
in its border regions. We are pleased with this excellent and 
continuing cooperation.
    We are aware of reports that some retired ISID intelligence 
officers, who are believed to have been strong Taliban supporters 
continue to speak in support of the Taliban. We are unaware, however, 
of any Government of Pakistan policy to support the Taliban or any 
other terrorists. We continue to discuss Pakistan-Afghan relations with 
President Musharraf and Prime Minister Jamali, and have received their 
assurance that Pakistan supports the Karzai government and is actively 
working to strengthen both the Afghan government and the two nations' 
bilateral relationship.
    Question. What is the long-term economic impact of SARS on the 
China and Hong Kong economies, economic stability in China and Hong 
Kong?
    Answer. The long-term impact of the SARS outbreak on the economies 
of China and Hong Kong will depend to a large extent on the duration of 
the crisis and, in the case of China, the geographic scope of the 
spread of SARS. So far, certain areas of China, such as Beijing and 
Guangdong, have had the highest incidence of SARS; other areas of the 
country have reported relatively low numbers of SARS cases, but China's 
capacity for disease surveillance in rural areas is relatively weak. 
Thus, it may be some time before the full extent of China's outbreak, 
as well as its effectiveness in containing it, is understood.
    SARS has already delivered a strong short-term shock to both 
economies, especially in the tourism and travel sectors. Private 
economic estimates suggest SARS could cut China's GDP growth in 2003 by 
0.5 to 2 percentage points. For Hong Kong, with an economy more 
dependent on travel and tourism, analysts have cut their estimates for 
2003 GDP growth by as much as 1 to 3 percentage points.
    However, most economists continue to assess that this shock will 
not lead to a broader and deeper economic crisis, unless the SARS 
epidemic continues to spread in the coming weeks and months.
    The number of cases continues to grow in Mainland China, including 
in the rural areas, where public health infrastructure is weakest. 
However, China is now taking aggressive steps to contain and control 
SARS, including restricting travel, closing schools and other public 
places, and quarantine of those infected with SARS. The WHO and U.S. 
Department of Health and Human Services through its Centers for Disease 
Control and Prevention (CDC), at China's request, have fielded a small 
number of technical assistance teams throughout the country to provide 
epidemiological investigation and containment guidance. The WHO and CDC 
also has a team in Hong Kong. The United States and a number of other 
countries are now finalizing emergency assistance packages to help 
China control SARS. A number of private U.S. companies also are 
providing financial assistance and donating supplies to assist this 
effort.
    Question. Given the firing of senior Beijing officials and the 
SARS-related rioting that recently took place near Tianjin, what are 
the political implications of SARS on the Chinese government's 
authority?
    Answer. The SARS-related protests and disturbances that are taking 
place in China seem to be symptoms of the Chinese people's 
dissatisfaction with the way the SARS outbreak is being handled at the 
local level. However, President Hu Jintao and Chinese government senior 
leaders may very well feel as though their political legitimacy and 
credibility among the Chinese people are at stake. The April 20 
dismissals of Health Minister Meng Xuenong were designed to demonstrate 
to the public that China's leaders at senior levels will be held 
accountable for any missteps in the fight against SARS.
    Severe restrictions on travel, the forced quarantines of suspected 
and real SARS cases, and the creation of SARS-only clinics will 
continue to test the government's relationship with its citizens, many 
of whom deeply distrust the government. More protests are likely. The 
Chinese government, however, may fear that not implementing draconian 
measures will further the SARS virus' spread and could lead to a 
potentially fatal loss of public confidence in its leadership. 
Consequently, it appears willing to risk relatively small-scale local 
protests against its policies to achieve the larger goal of stamping 
out SARS.
    Question. How might the initial response to SARS impact the new 
leadership of President Hu Jintao?
    Answer. China's initial response to the SARS outbreak seriously 
damaged its international reputation and cast doubt on the willingness 
and ability of Hu Jintao and China's senior leaders to responsibly 
manage and contain the health crisis. Following the dismissals of 
Minister of Health Zhang Wenkang and Beijing Mayor Meng Xuenong from 
their posts on April 20, senior leaders, and President Hu in 
particular, have been much more active and forthcoming about the 
seriousness of the outbreak. They have provided daily updates on new 
cases and are showing a commitment to containing the outbreak. While 
these efforts have offset some of the damage done to the image of 
China's leaders, containing the outbreak is still the greatest 
challenge facing the Hu administration. It remains to be seen whether 
SARS is a challenge they can overcome.
    Question. What leverage does China have over North Korea to 
continue multilateral dialogue, and are you confident that China will 
exert the appropriate amount of pressure on the North Korean government 
to continue this dialogue?
    Answer. As a member of the United Nations Security Council 
Permanent 5 and as the neighbor, donor of aid, longtime ally, and 
largest trading partner of the DPRK, China has considerable influence 
with the North Korean government. We are cooperating well with the PRC 
on this matter, and China has consistently indicated its support for a 
non-nuclear Korean peninsula and has engaged seriously with the DPRK 
regime to emphasize to Pyongyang that its nuclear activities are 
unacceptable to the PRC and the international community. The recent 
multilateral talks in Beijing would not have happened without China's 
efforts to get the DPRK to the table. China's role as a full 
participant in those talks is a demonstration of the seriousness with 
which China now views the North Korean nuclear issue. We are confident 
that China's strong interest in and stated commitment to a non-nuclear 
Korean Peninsula will ensure that Beijing keeps appropriate pressure on 
the DPRK to reverse its present course, comply with its commitments, 
and address the serious concerns of the international community.
    Question. What is the State Department's strategy for promoting 
democracy, human rights, and rule of law in China?
    Answer. While we remain seriously concerned about human rights 
abuses in China and about several recent events such as the execution 
of a Tibetan without due process and the arrest of a number of 
dissidents, we have seen signs of incremental progress in the last year 
overall. Our strategy is to advance democracy, human rights, and rule 
of law through bilateral and multilateral channels, and through 
projects that advance long-term democratic and legal reform.
    When we resumed the bilateral human rights dialogue in October 
2001, we made clear that dialogue alone was not sufficient and tangible 
results would be required. During the December 2002 round of human 
rights discussions, the Chinese agreed to invite without preconditions 
the U.N. Special Rapporteurs on Religious Intolerance and Torture, the 
Working Group on Arbitrary Detention, and the leaders of the 
Congressionally-chartered U.S. Commission on International Religious 
Freedom. Since the October 2001 round of talks, China has released ten 
political prisoners, including China's ``Godfather of Dissent'' Xu 
Wenli and seven prominent Tibetan prisoners. In addition, the Dalai 
Lama's brother and personal representatives traveled to Tibet and 
Beijing for talks in July and September respectively. The President and 
the State Department have spoken out repeatedly against the persecution 
of Uighur Muslims in Xinjiang, reminding the Chinese that the War on 
Terror should not be used as an excuse to crack down on those who 
express their political and religious views peacefully.
    As for projects to promote reform, the Department made 
approximately ten grants for a total of $7 million dollars in fiscal 
year 2002. We support legal reforms to protect citizens' rights at the 
grassroots, strengthen the provision of legal services to women, 
promote worker rights and the rule of law, and help realize judicial 
independence. We are funding programs to expand electoral democracy and 
increase transparency and public participation in politics. We are also 
supporting NGO's that define themselves as advocates for interest 
groups for the disenfranchised. In 2003, we will expand our efforts and 
continue to seek out cutting-edge programs.
    Question. Has any evidence been uncovered in Iraq that indicates 
the transfer of Kolchuga radar system took place?
    Answer. At this time, we have no confirmed evidence that Kolchugas 
are in Iraq. The question of whether Ukraine transferred Kolchugas to 
Iraq remains open.
    Question. What support has Ukraine provided to Operation Iraqi 
Freedom?
    Answer. Ukraine's deployment of a nuclear-biological-chemical (NBC) 
protection battalion to Kuwait was a welcome contribution to coalition 
forces. President Kuchma's personal support for the deployment was 
instrumental in obtaining Rada approval. Ukraine also provided heavy 
transport aviation for the coalition. We are currently discussing with 
senior Ukrainian officials possible Ukrainian participation in a post-
conflict stability force.
    Question. The Ukrainian Government continues to deny United States 
democracy-building NGOs the ability to register in Ukraine.
    What steps has the State Department taken to ensure that the 
Ukrainian Government registers these NGOs, and what difficulties do 
these NGOs encounter working in Ukraine?
    Answer. We are pleased that the Government of Ukraine recently 
registered the Institute for Sustainable Communities, an NGO involved 
in development of civil society. We are disappointed, however, that the 
government has not renewed the registration of International Democratic 
Institute or International Republican Institute projects, despite 
repeated promises over the past year to act on their application. We 
continue to raise our concerns about this issue at every opportunity 
and all levels of the government. While NDI and IRI have continued to 
operate effectively, their unregistered status has led to difficulties 
related to personnel and other administrative issues and renders them 
and their Ukrainian partners vulnerable to various forms of government 
pressure and harassment.
    Question. Has the Ukrainian Government demonstrated a more firm 
commitment to the rule of law through greater respect and protection of 
human rights or transparent and fair resolution of business disputes 
involving foreign companies?
    Answer. The Government of Ukraine has improved its human rights 
record in some areas, but serious problems persist, especially with 
respect to harassment and intimidation of journalists. Over the past 
several years, the Government of Ukraine has taken steps to improve the 
administration of justice, including the enactment in 2001 of the Law 
on the Judicial System and the Law on Enforcement of Foreign Court 
Decisions. Passage early this year of a forward-leaning Civil Code was 
undermined by concurrent passage of a retrograde and contradictory 
Economic (Commercial) Code. The judiciary continues to depend on the 
executive branch for funding, which limits its independence. In late 
January, the Government again expressed a commitment to resolve a 
number of long-standing disputes involving U.S. companies, but concrete 
progress in this area remains slow.
    Question. What role is Russia playing in the reconstruction of 
Afghanistan, and what assistance has Russia provided to the Afghan MOD?
    Answer. The Russian Government has pledged USD 46 million in 
military spare parts, vehicles, aircraft and supplies, but as yet 
nothing has actually been delivered yet. The Russians also were 
prepared to provide a combat search and rescue support during OEF. 
However, no emergencies requiring Russian assistance materialized.
    Question. What is the status of the withdrawal of Russian military 
bases in Georgia?
    Answer. At the Istanbul OSCE Summit in 1999, Russia and Georgia 
agreed that Russia would withdraw forces in excess of agreed levels by 
the end of 2000 (this task was completed by Russia on time); that 
Russia would disband its military bases at Vaziani and Gudauta by July 
1, 2001; and that Russia and Georgia would reach agreement on the 
duration of the Russian presence at two remaining bases, Akhalkalaki 
and Batumi.
    Vaziani was disbanded and transferred to Georgia on time; while the 
Russian regular military unit at Gudauta has been withdrawn, Russian 
``peacekeeping'' forces remain at the base.
    At this point Russia and Georgia need to resolve two key remaining 
issues: the duration of the Russian presence at the Akhalkalaki and 
Batumi bases, and the status of the Russian presence at Gudauta, 
including related transparency steps.
    In the most recent Georgia-Russia Ministerial-level meeting on 
these issues in February, the two sides exchanged ideas on Gudauta, but 
there was no movement on the question the duration of the Russian 
presence at the two other bases. Russia insists that, absent large 
financial support, it will need 11 years to close the two bases. 
Georgia insists Akhalkalaki and Batumi should be closed within three 
years.
    We are encouraging the two parties to intensify their efforts to 
resolve these remaining issues.
    NATO Allies have made clear that we will not submit the Adapted 
Conventional Forces in Europe (CFE) Treaty for ratification by 
parliaments until key Istanbul commitments--on the CFE flank, Georgia, 
and Moldova--are fulfilled. Good progress is currently being made in 
Moldova with regard to withdrawal of Russian military equipment and 
munitions; NATO Allies now regard the flank reduction commitment as 
having been met.
    Question. Given declining foreign assistance to Russia, what are 
the State Department's plans for continuing democracy and rule of law 
programs in that country?
    Answer. Russia has made remarkable progress in economic reforms, 
but still faces challenges it its democratic development. FREEDOM 
Support Act (FSA) funding is slated to decline beginning in fiscal year 
2004, but democracy and human rights programs will continue for several 
years to come. During this time, we will increasingly focus on 
democracy and rule of law to ensure that we consolidate and sustain the 
progress made over the past decade. We will seek to advance structural 
changes that are needed to create a hospital environment for Russian 
civil society.
    FSA technical assistance programs have played a vital role in 
advancing progress toward rule of law in Russia, including supporting 
every aspect of the development of the new criminal procedure code, 
which has drastically changed the roles for Russian judges, prosecutors 
and defense attorneys. Our focus is now on helping the Russian bar 
consolidate the gains it has made, particularly by sponsoring 
professional education events to help the bar hone its advocacy skills.
    In addition to FSA democracy programs, we will continue to support 
civil society development and democracy via National Endowment for 
Democracy, Embassy Democracy Commission, U.S.-Russian citizen contacts, 
and professional and student exchanges.
    Question. What is the State Department doing to end harassment of 
foreign aid workers in Russia by their intelligence services?
    Answer. The U.S. Government is deeply troubled by a pattern of 
harassment by Russian special services of Americans (and others) 
involved in cooperative programs in Russia. This is inconsistent with 
the spirit of the broader U.S.-Russia relationship. We have firmly 
urged senior Russian Government officials, including the Foreign 
Minister and the Director of the Federal Security Service, to put a 
stop to such activity--much of which we believe stems from Soviet-era 
thinking in the security service bureaucracies.
    Official harassment includes but is not limited to: groundless 
allegations against the Peace Corps; harassment of the coordinators for 
U.S. Government assistance in the Russian Far East and for the Library 
of Congress funded Open World exchange program; and the denial of re-
entry to the AFL-CIO Solidarity Center field representative, an OSCE 
Mission to Tajikistan staffer, and several missionaries.
    Recently the Russian Government informed us it has relented on its 
decision to deny transit to the OSCE Mission to Tajikistan staffer, an 
American citizen. We continue to press Moscow to re-think its other 
decisions of this type, emphasizing these are damaging to Russia's 
image abroad and working against President Putin's pledges to build a 
strong, open civil society and robust democratic political system.
    Question. What steps has the State Department taken to ensure that 
Russia more fully complies with international human rights laws in 
Chechnya?
    Answer. We remain concerned by continuing, credible reports of 
violations of human rights and humanitarian law in Chechnya by Russian 
federal forces, forces of the Kadyrov administration, and Chechen 
separatist fighters. The most serious include arbitrary detentions of 
civilians, disappearances, and extrajudicial executions. These 
incidents are continuing--and in some respects reportedly have 
increased--despite President Putin's injunction to stop the large-scale 
security sweeps that used to result in such abuses. We continue to 
press the Russian government, including in our private meetings and 
through our vote for the Chechnya resolution at the UNCHR this spring, 
to put an end to these abuses and to investigate and bring to account 
the persons responsible, as well as to work for a durable political 
settlement.
    Some Chechen separatist fighters have carried out terrorist attacks 
against civilians, including the assassination of local government 
officials. Some Chechen group seized a theater in Moscow last October 
and carried out a suicide truck bombing of the main government building 
in Grozny in December. We have called on the Chechen separatist 
leadership to repudiate, in word and in deed, terrorist acts and 
individuals, be they Chechen or international. The evidence so far 
suggests they have much more to do in this area.
    On the political side, we are encouraging the Russian Government to 
follow through with public commitments it has made in relation to the 
March 23 constitutional referendum in Chechnya. We hope this will 
initiate a political process including democratic elections for 
institutions of self-government acceptable to the people of Chechnya, 
and ultimately lead to a political solution of this long and tragic 
conflict.
                                 ______
                                 
            Questions Submitted by Senator Patrick J. Leahy
    Question. Mr. Secretary, I mentioned Mr. Gingrich's speech in my 
opening statement. There are hundreds of former Congressmen in this 
town. They give speeches every day. You know why this one caught my 
attention? Because I believe that his sentiments are shared by senior 
officials in this Administration.
    These officials favor force over diplomacy. They believe in going 
it alone. They believe that alliances and international institutions 
impede, rather than promote, U.S. interests. They believe that the 
Pentagon, not the State Department, should be handling key aspects of 
foreign policy.
    Mr. Secretary, why are the State Department, and the idea of 
multilateralism, under such attack in this Administration?
    Answer. This Administration is fully engaged multilaterally on a 
host of issues around the world. From HIV/AIDS and SARS to 
transnational terrorism, we are working closely through regional 
organizations, the United Nations, and other international agencies. We 
are actively developing a reconstruction effort in Iraq that will 
include the contributions of many nations, and as the interim authority 
grows into a full representative government for the people of Iraq, 
international institutions will play an important and significant role 
there.
    Question. Only a couple of years ago, Condoleezza Rice was saying, 
and I quote: ``We don't need to have the 82nd Airborne escorting kids 
to kindergarten.''
    We all know that Dr. Rice was exaggerating for effect. But, I agree 
with her basic premise: we don't want the Defense Department, whose 
mission is fighting wars, too deeply involved in nation building.
    Despite that, the White House and the Pentagon wanted all the 
reconstruction funds for Iraq to be controlled by the Pentagon. I and 
others here did not support that, but we gave the discretion to the 
President to apportion the funds. Who's in charge over there? General 
Garner? General Franks? I have a Defense Department chart that shows 
who is responsible for which pieces of the reconstruction program. The 
State Department isn't even mentioned. Do you have any role yet, or is 
the State Department just an observer?
    According to the AP, the President is expected to declare the end 
of major combat in Iraq by the end of this week. Shouldn't the State 
Department then assume responsibility for the relief and reconstruction 
phase?
    How much of the $2.4 billion has been spent, if any, and by which 
agencies? How much of it do you expect to be managed by State and 
USAID? What is--or will be--the U.N.'s role?
    Can anyone compete for U.S. aid contracts, or are you going to 
punish companies from countries that didn't agree with us at the United 
Nations?
    Answer. The situation on the ground in Iraq remains unstable; as 
such, there is no question that General Franks, as the military 
commander, is the governing authority and will remain so until 
stability is established and we are prepared to start handing off to 
civilian authorities. Creating a stable environment means, as a first 
step, ensuring that Saddam's entire ruling infrastructure and security 
apparatus is dismantled and disarmed, including irregulars and 
paramilitary forces, locating and securing WMD, and eliminating any 
residual terrorist infrastructure.
    The establishment of a secure and stable environment still remains 
the key task in meeting Iraqis' immediate humanitarian needs. Therefore 
continued coordination with military forces, including civil affairs 
units and the Army Corps of Engineers, is of vital importance.
    With respect to the Office of Reconstruction and Humanitarian 
Assistance (ORHA), there are currently dozens of State Department 
employees working with General Garner, including five Ambassadors. 
Deputy Assistant Secretary of State Ryan Crocker has supported General 
Garner and Presidential Envoy Zalmay Khalilzad's efforts in the two 
regional political conferences that have started the process of 
establishing an inclusive, representative Iraqi Interim Authority. The 
State Department's Bureaus of Near Eastern Affairs (NEA), International 
Narcotics and Law Enforcement Affairs (INL), Economic and Business 
Affairs (EB) and Democracy, Human Rights and Labor (DRL) have been 
actively involved with ORHA for some time in a wide range of efforts, 
including supporting Iraqi efforts in the reconstruction of the 
criminal justice sector, the development of a prosperous, market-based 
economy and the establishment of democratic processes. Along with 
USAID, the State Department's Bureau of Population, Refugees, and 
Migration (PRM) is heavily involved in assisting United Nations, other 
international organization, and NGO humanitarian efforts on behalf of 
the Iraqi people.
    As we transition from immediate security and humanitarian 
priorities, to institution building and the establishment of an 
economic and political process out of the interim authority, the State 
Department will play a greater role, as will other civilian government 
agencies.
    Most of the $2.4 billion appropriated for Iraq Relief and 
Reconstruction has not yet been allocated to individual agencies as 
assessment missions are still ongoing. We expect that USAID will 
control the largest portion of these funds for reconstruction along 
with State Department for remaining humanitarian needs, once allocated.
    We are also calling upon the United Nations to play a vital role in 
Iraq. We have introduced a Security Council Resolution that establishes 
the position of a U.N. Special Coordinator to coordinate participation 
by the U.N. and other international agencies in humanitarian assistance 
and economic reconstruction, and assist in the development of a 
representative government. The Coordinator will also support 
international efforts to contribute to civil administration, to promote 
legal and judicial reform and human rights, and to help rebuild the 
civilian police force. There is a tremendous amount of work to be done, 
and U.N. expertise will be instrumental. As a practical matter, the 
Coordinator will serve as a principal point of contact for the United 
Nations in working with the Coalition and the Iraqi people.
    Reconstruction contracts funded by U.S. taxpayers will be let in 
accordance with all relevant federal procurement regulations. USAID has 
been allowed to waive a provision of law in order to allow foreign 
firms to compete for reconstruction subcontracts, and we have worked 
hard to ensure that our coalition partners and others are aware of 
these opportunities. All the information needed to compete for these 
projects is posted on the Internet at www.usaid.gov.
    Saddam's regime continually put political favoritism and personal 
enrichment above the needs of the Iraqi people when making its 
procurement and contracting choices. The United States and our 
coalition partners will not do the same. We are confident that a new, 
representative Iraqi authority will not do so either.
    Question. Mr. Secretary, the Administration used the possession of 
weapons of mass destruction (WMD) by Saddam Hussein as the primary 
justification for going to war. We seemed certain that Saddam Hussein 
had large numbers of WMD.
    Yet so far, no such weapons have been found.
    With all of the looting that followed after the fall of Baghdad, I 
am concerned that these weapons may now be outside of Iraq in the hands 
of terrorists.
    Is there any credible information that these weapons have been 
smuggled out of Iraq? If so, could that pose an even greater threat 
than Saddam Hussein? Do we believe that they are still inside Iraq? 
Have they been destroyed?
    Or, did we have bad information to begin with about the existence 
of these weapons?
Follow up
    What happens if we haven't found anything in 6 months? 12 months? 
What conclusions should we reach--that they are in someone else's 
hands? That they never existed? That Osama Bin Laden or other terrorist 
network has them?
    Answer. Iraq is now being disarmed. Coalition forces are engaged in 
searching for and securing WMD assets. What is emerging is that 
capabilities are more dispersed and disguised than we thought. All 
sources of information are being pursued. Even though we have no firm 
evidence that WMD has been smuggled out of Iraq, we will continue to 
watch carefully and act upon any information or indications we receive.
    We are confident that WMD will be found. On-site inspection of 
suspect sites for hidden materiel is a daunting task. We are searching 
an area the size of California. And we are not talking about finding 
something as large and as stationary as an ICBM silo. Chemical and 
biological munitions can be hidden anywhere and production facilities 
could be set up in a building the size of a small house--or a basement. 
Likewise, Iraqi missiles, though larger, are mobile systems that are 
easily concealed. Recall also that the Iraqis had years to prepare 
underground and other facilities for the express purpose of hiding 
their WMD and missiles from U.N. inspectors.
    We are also beginning to get cooperation from Iraqi scientists and 
former officials as well as computer files and documents that provide 
the clues and keys. We are interviewing some of these people and 
continue to seek others. With their help, we will find Iraq's WMD. And 
while some individuals are, indeed, proving helpful, we are talking 
about a cultural change. People have to be certain that the climate of 
fear and intimidation is truly gone for good before they will be 
willing to talk about the past.
    The inspection process will take time to ferret out the Iraqi WMD. 
But be assured that it will do so. We are working closely with our 
Coalition partners, deploying multinational teams of experts to search 
Iraq.
    Rather than set artificial deadlines, we are committed to staying 
the course until the job is done. Coalition forces continue to follow 
up leads, examine suspect sites and interview Iraqi scientists. We are 
confident that WMD will be found and we will ensure that it is 
eliminated.
    Question. The Supplemental contains $10 million for 
``Investigations and research into allegations of war crimes by Saddam 
Hussein and other Iraqis, and for a contribution to an international 
tribunal to bring these individuals to justice.''
    We specified ``international tribunal'' because the Iraqi judicial 
system is corrupt, bankrupt, and lacks credibility. This is the same 
reason why we have supported international tribunals to prosecute 
Serbian, Rwandan, and Sierra Leone war criminals.
    However, we hear that the Administration is proposing an Iraqi 
tribunal to try accused war criminals. Why the different approach? 
Doesn't this risk the kind of ``victors justice'' that has been 
discredited in the past?
    Answer. We believe that members of Saddam Hussein's regime who are 
responsible for crimes committed against Iraqi citizens should be held 
accountable before an Iraqi-led process, that could include tribunals 
and truth and reconciliation commissions. It is our policy to encourage 
and help states to pursue credible justice rather than abdicating their 
responsibility or having it taken away. Based on our consultations with 
Iraqi jurists and lawyers inside and outside Iraq, we believe there are 
qualified Iraqis who are ready and willing to accept the mandate of 
justice. Our goal is to help create the conditions that will allow them 
to make the essential decisions, while at all times providing the 
necessary international support and expertise. We believe this approach 
has the best prospects both to ensure accountability for the crimes of 
the previous regime and to help re-establish the rule of law in Iraq.
    Question. The Defense chapter of the Supplemental contains $25 
million for aid to foreign countries to combat terrorism. This is a 
foreign aid program which should be funded by this Subcommittee and run 
by the State Department, not the Pentagon. I am also told that the 
Pentagon is seeking legislative authority to manage similar programs, 
with even more funding, in fiscal year 2004. Aren't you concerned about 
this? Should the Pentagon make its own foreign policy and manage its 
own foreign aid budget? As a former Chairman of the Joint Chiefs, 
doesn't this divert the Pentagon from its primary war fighting mission?
    Answer. The Global War on Terrorism and combat operations in 
Afghanistan and Iraq require that we be responsive and adapt quickly to 
circumstances in extraordinary ways. It is in our interest to assist 
our foreign partners as they engage in operations against terrorists 
that threaten the United States and our friends and allies. The $25 
million in the Defense chapter of the President's Emergency Wartime 
Supplemental will be used to assist key foreign partners in improving 
capabilities to conduct counter-terrorist combat operations. The State 
Department has and will continue to work closely with the Pentagon as 
we press on in our fight against terrorism. Indeed, the legislation 
requires the concurrence of the State Department before proceeding. I 
want to assure you, however, that I have no plans to relinquish any of 
State's foreign policy prerogatives and authorities.
                         israel loan guarantees
    Question. The roadmap lays out a path to a peaceful settlement of 
the conflict. Are the terms of the roadmap negotiable? When Israeli 
officials say they disagree with various provisions in the roadmap, how 
do you respond?
    Every U.S. Administration, including this one, has said it opposes 
the settlements, but the construction continues, as does the violence. 
What settlement activity is currently going on? Do you expect the 
settlement expansion to continue, despite the language in the 
supplemental?
    Answer. Regarding the roadmap.--The roadmap is a framework for the 
broad steps Israel and the Palestinians must take to achieve President 
Bush's vision of peace, and thus offers a way for both sides to restart 
direct negotiations. There are obligations and difficult choices ahead 
for both sides. We have presented the roadmap to both sides and now 
look forward to their contributions on how best to move ahead on 
implementation.
    Regarding Israeli settlements.--Settlement activity is simply 
inconsistent with President Bush's two-state vision. As President Bush 
stated, ``as progress is made toward peace, settlement activity in the 
Occupied Territories must end.'' This view has been made abundantly 
clear to the Government of Israel. In addition, consistent with the 
legislation that authorized the loan guarantees for Israeli, Israeli 
expenditures on settlements must be deducted from the loan guarantees.
                         complex emergency fund
    Question. Among the increases is $100 million for an emergency fund 
for ``complex foreign crises.'' Isn't this essentially a blank check? 
What limits would there be on the use of this fund? Could it be used 
for weapons? Since you have asked for this authority ``notwithstanding 
any other provision of law,'' what is to prevent the fund from being 
used to supply weapons to an autocratic government that violates human 
rights?
    Answer. The fiscal year 2004 budget requests a new $100 million 
U.S. Emergency Fund for Complex Foreign Crises (``Fund'') to provide 
the President the necessary flexibility to respond quickly and 
effectively to a wide range of unforeseen complex crises. At present, 
no contingency account exists for these types of crises, and we 
frequently are forced to cut ongoing programs to meet urgent needs. 
Such crises may include: peace and humanitarian intervention operations 
to prevent or respond to foreign territorial disputes; armed ethnic and 
civil conflicts that pose threats to regional and international peace; 
and acts of ethnic cleansing, mass killing, or genocide. The Fund may 
not be used for natural disasters, as existing contingency funding is 
already available to meet crises related to those situations.
    As proposed, the ``notwithstanding'' language of the Fund gives the 
President broad flexibility to provide whatever type of assistance 
would be needed to meet the requirements of a particular situation, 
including defense articles and services. In each case, however, it is 
the President who must make the determination that a complex emergency 
exists and that it is in the U.S. national interest to furnish 
assistance in response. Reserving this decision for the President 
ensures that any provision of assistance under the Fund's authority 
will be consistent with longstanding U.S. policies supporting 
responsible arms transfers and respect for human rights.
                         development assistance
    Question. Despite the $2.5 billion increase above the fiscal year 
2003 level, the President's fiscal year 2004 budget request would cut 
funding for the Development Assistance account by $14 million. This 
account funds everything from agricultural research to children's 
education to environmental conservation to democracy building. It funds 
the bulk of our programs to alleviate poverty. How do you justify 
cutting these programs?
    Answer. The $2.5 billion increase represents a commitment by the 
Administration to lay a sound foundation for improving the lives of 
impoverished people. This includes $1.3 billion for the Millennium 
Challenge Account that will increase and better target development 
assistance and programs to alleviate poverty.
    In fiscal year 2003 the Development Assistance account and the 
Child Survival and Health Programs fund were requested as a single 
account, and the combined total of the fiscal year 2004 request level 
for these two accounts remains the same. However, within this straight-
lined level, there is a significant increase in the HIV/AIDS program, 
which in turn requires offsetting reductions in other sectors. The 
reduction of the Development Assistance account therefore reflects a 
nominal shift of funds to the Child Survival and Health Programs Fund 
to reduce the impact of decreases in the Child Survival, Maternal 
Health and Infectious Disease programs. Effective programs in these 
areas are also key elements in our programs to alleviate poverty.
                    development assistance follow up
    Question. The total amount requested for Development Assistance for 
fiscal year 2004 is $1.345 billion. That is less than my tiny State of 
Vermont spends on public education. Do you believe that this is enough 
for the richest, most powerful country in the world to spend on 
combating global poverty?
    Answer. The $1.345 billion requested for Development Assistance is 
only one component of the entire program to address global poverty. The 
total amount requested for USAID and other related economic assistance 
programs is, in fact, nearly $11 billion.
    In addition to Development Assistance, global poverty issues are 
also addressed with funding made available through other accounts. For 
example, the Economic Support Fund focuses additional funds primarily 
in the Middle East, and separate accounts address similar issues in 
Eurasia and Eastern Europe. The Public Law 480 Title II program 
alleviates food security issues throughout the world.
    As part of the fiscal year 2004 request, the Administration is also 
launching a major new initiative, the Millennium Challenge Account. The 
MCA, when fully funded in future years, will be a major component of 
the United States contribution towards global development, and will 
increase its core development assistance by 50 percent.
    The MCA will serve as an incentive to poorer countries to adopt 
sound policies that provide their citizens an escape from poverty. 
Countries that rule justly, invest in their people, and promote 
economic freedom will energize individual initiative, mobilize domestic 
capital, attract foreign invest, and expand markets. These conditions 
in turn will enable these countries to become part of the global 
market, a key to economic growth and poverty reduction.
                      millennium challenge account
    Question. (a) Mr. Secretary, $1.3 billion of the President's fiscal 
year 2004 budget request is for the first installment of the new 
Millennium Challenge Account. I support this, although I do not agree 
with the Administration's plan to create a new corporate bureaucracy to 
manage it. Why not establish a bureau at USAID with flexible 
authorities to manage these funds?
    Answer. The MCA is a truly new approach. First, it is selective, 
targeting those countries that ``rule justly, invest in the health and 
education of their people, and encourage economic freedom.'' Second, 
the MCA establishes a true partnership in which the developing country, 
with full participation of its citizens, proposes its own priorities 
and plans. Finally, the MCA will place a clear focus on results. Funds 
will go only to those countries with well-implemented programs that 
have clear objectives and benchmarks.
    A new institution is the best way to implement and highlight this 
innovative and targeted approach. The existing agencies that might 
administer the MCA--State and USAID--both have many other bureaucratic 
mandates and priorities. The MCA will complement the assistance they 
provide to address key U.S. priorities, such as humanitarian crises, 
failed states, infectious disease, and regional challenges. Unlike the 
MCA, such assistance cannot be based solely on country performance or 
business-like partnerships.
    Because of its unique mandate, the MCA will need flexible personnel 
and program authorities to carry out this targeted and innovative 
concept. If it is to respond to developing country priorities, for 
example, it cannot be earmarked to fund specific areas. The MCA should 
start with a clean slate--an innovative, flexible, narrowly targeted, 
and highly visible Millennium Challenge Corporation (MCC)--that can 
give it the best chance to succeed and show that this approach works.
    Question. (b) This was supposed to be new money, yet both the Child 
Survival and Health account, and the Development Assistance account, 
are being cut in the President's budget. How do you explain this?
    Answer. For fiscal year 2004, the Administration has requested 
$1.495 billion for the Child Survival and Disease Program and $1.345 
billion for the Development Assistance account, for a total of $2.840 
billion for both accounts. This request is identical to the total 
Administration request for the two accounts in fiscal year 2003. In 
addition, the President is making new requests in fiscal year 2004 of 
$450 million for the Emergency Plan for AIDS Relief and $200 million 
for the Famine Fund, which will also contribute to child survival.
    Question. (c) I also have questions about eligibility for the 
Millennium Account. Countries must show that they are taking serious 
steps to combat corruption, support health and education, and good 
governance. That makes sense. But a country like Brazil would not be 
eligible for the MCA because its per capita income is too high. Brazil 
is a country of 100 million people of immense importance to the United 
States, where a small percentage of the population is very rich and the 
vast majority is desperately poor. Shouldn't we look at ways to use the 
MCA to promote better policies in regions of a country with such 
serious needs, and of such importance to the United States, as Brazil?
    Answer. The MCA is a targeted program, designed to spur economic 
growth in the poorest countries. We recognize that some countries with 
per capita GDP above the MCA cutoff still have large pockets of 
poverty. Such countries also have greater wealth and more access to 
international capital and investment. They are better able to address 
challenges on their own. Brazil, for example, attracted $71.9 billion 
in foreign direct investment over the last three years. Investor demand 
for Brazil's April 29 bond issue was more than seven times the $1 
billion actually sold. MCA beneficiaries are not able to attract such 
funds.
    Eligibility for the MCA is not the full measure of our relationship 
with any country. The United States has many initiatives, in the trade 
as well as the aid arena. Brazil is the third largest beneficiary under 
our Generalized System of Preferences for tariffs and would benefit 
from successful conclusion of FTAA negotiations, which it co-chairs 
with the United States. We will continue to make available select USAID 
funding, as well as OPIC and EXIM financing. (EXIM's third highest 
country exposure is with Brazil.) Brazil recently received about $1 
billion in World Bank and Inter-American Development Bank loans for 
human development and social support programs, and other international 
financial institution funds will also remain available.
    Question. We have given hundreds and hundreds of millions of 
dollars in aid to Pakistan since September 11. Yet al Qaida and Taliban 
fighters continue to find sanctuary in Pakistan, and to launch attacks 
against U.S. forces in Afghanistan. Can't this be stopped?
    Answer. Pakistan is a key ally in the war against terror and 
continues to take active measures against extremists and terrorists. 
The Government of Pakistan is fully committed to tracking down and 
apprehending Taliban and al-Qaida leaders. Pakistan's success in 
disrupting imminent attacks against our interests has saved United 
States and Pakistani lives.
    Since the fall of 2001, Pakistan has apprehended over 500 suspected 
al-Qaida and Taliban operatives. Pakistan has committed its own 
security forces--and taken casualties-in pursuit of terrorists in 
Pakistan's major cities and border regions. We are supporting Pakistan 
in these actions, and United States and Pakistani forces work closely 
together in our efforts to eliminate the Taliban and al-Qaida threat.
    President Karzai visited Islamabad on April 23 and held what we 
understand were very productive discussions on these issues. He and 
President Musharraf have reportedly agreed on new measures to enhance 
their cooperation on security issues. We are hopeful this type of 
cooperation will also reduce the number of terrorist attacks and save 
lives.
    Question. The Karzai government is increasingly seen as incapable 
of wielding authority outside of Kabul. Aren't you concerned? Shouldn't 
the U.S. military be showing more muscle against the warlords, to back 
up the central government and keep Afghanistan from sliding backwards?
    Answer. The United States takes seriously the need for the Afghan 
government to extend its central authority throughout Afghanistan. 
Improving the capacity of the Transitional Islamic State of Afghanistan 
(TISA) and enhancing its authority outside of Kabul are fundamental 
aspects of our policy. We are actively seeking ways to increase our 
assistance through TISA ministries and finding ways to better link our 
local programs to and through TISA. Provincial Reconstruction Teams 
have been deployed to Gardez, Bamiyan and Konduz. Other PRTs will 
follow to Mazar e-Sharif by early June (led by the UK), and then 
Jalalabad, Parwan, Kandahar, and Herat. One of the objectives of the 
PRTs is to extend TISA authority by linking TISA to local government 
through reconstruction projects. These teams have State and USAID 
officers as well as potential assignment of USDA and HHS officers. 
Afghan National Army (ANA) units are also deploying to the same areas 
as the PRTs. In addition, we are working with the Germans to extend 
police training from Kabul to all eight PRT areas of operation.
    The United States also remains actively engaged with our Coalition 
partners in rebuilding and training an Afghan National Army and 
National Police Force to increase security throughout the country and 
to build the foundations of a stable Afghanistan under central 
authority. The key to expanding central authority over regional 
commanders and various warlords in the near-term is the Disarmament, 
Demobilization and Reintegration (DDR) program. Japan is the lead 
nation for DDR and is supported by the U.N. Assistance Mission to 
Afghanistan. Significant progress in DDR implementation has been made 
over the last few months. President Karzai has announced a start date 
of 22 June. The United States is currently reviewing ways and methods 
where we can help this essential program move ahead and succeed. The 
best approach to Afghan security is to stay the course of developing 
indigenous security institutions and promoting disarmament under 
international auspices.
    Question. The President's fiscal year 2004 budget request would cut 
funding for the former Soviet Union from $755 million to $576 million. 
Aid to Russia would fall from $148 million to $73 million. I know of 
many programs to promote legal reform, improve health care, combat 
organized crime, improve market-based agriculture, clean up toxic 
pollutants, and other initiatives that will be shut down because of 
this cut. Does that make sense to you?
    Answer. Part of the apparent large cut in the overall fiscal year 
2004 request for FREEDOM Support Act (FSA) assistance reflects a shift 
in funding for educational and professional exchanges from the FSA 
account to the ECE account in the Commerce, State, Justice 
appropriation request.
    The lower request level also recognizes, particularly for Russia, 
progress already achieved on reform, especially economic reform. 
Programs in this area will likely be phased out over the next several 
years.
    We realize that Russia continues to face challenges in democratic 
development. We are developing a strategy to phase out FSA assistance 
to Russia over the next several years that will seek to ensure a legacy 
of sustainable institutions to support civil society and democratic 
institutions. During this time, we will increasingly focus on democracy 
and rule of law to ensure that we consolidate and sustain the progress 
made over the past decade. We will seek to advance structural changes 
that are needed to create a hospitable environment for Russian civil 
society.
    FSA technical assistance programs have played a vital role in 
advancing progress toward rule of law in Russia, including supporting 
every aspect of the development of the new criminal procedure code, 
which has drastically changed the roles for Russian judges, prosecutors 
and defense attorneys. Our focus is now on helping the Russian bar 
consolidate the gains it has made, particularly by sponsoring 
professional education events to help the bar hone its advocacy skills. 
In 2001, an interagency task force identified health as one of the 
three priority areas for FSA assistance in Russia. Russia has one of 
the highest rates of increases in infection of HIV/AIDS. Multi-drug 
resistant TB is another serious problem, particularly in prisons. 
Funding for health programs has increased over the last two years and 
we plan to continue these programs for some years to come.
    Some anti-crime activities that had been funded under FSA, such as 
programs to combat organized crime and money laundering, will likely 
continue, perhaps at different levels, with alternate funding sources.
    Our strategy is not yet complete, so we don't have all the answers. 
But we are determined to help Russia preserve the remarkable gains she 
has made since 1992 and to complete the transition into a market-based 
democracy.
    Question. Mr. Secretary, I have long felt that the United States--
under Republican and Democratic administrations--has failed to devote 
anywhere near enough time and effort to build a strong relationship 
with our southern neighbor, Mexico. I thought that would change with 
the election of President Fox, who is by far the best hope Mexico has 
had in recent memory. President Bush seemed to feel the same way, but 
what we have seen amounts to little more than photo ops. Now we hear 
that since Mexico did not support the United States in the U.N. 
Security Council, President Bush is not taking President Fox's phone 
calls. Why haven't we made more of this opportunity to build closer 
relations with Mexico, and what can we expect in the coming year or 
two?
    Answer. Our bilateral relations with Mexico and the Fox 
administration remain close and cooperative. We have taken advantage of 
the opportunity for closer relations presented by a democratically-
elected government in Mexico which shares our commitment to the rule of 
law, human rights, and free markets.
    The Bush and Fox administrations have, over the past two years, 
worked closely together to combat transnational crime in all its 
aspects, including terrorism, trafficking in illicit drugs and in 
people. Our law enforcement relationship with Mexico has never been 
better. Similarly, our cooperation on border security is excellent, as 
demonstrated by the April 23-24 meetings between Homeland Security 
Secretary Ridge and Mexican Governance Secretary Creel in San Diego. We 
very much hope to see proactive cooperation from Mexico in resolving 
issues currently in dispute, including Mexico's water debt to the 
United States and its use of non-tariff barriers to impede U.S. 
agricultural exports to Mexico.
    We were indeed disappointed that the Fox administration did not, in 
the face of Iraqi intransigence on disarmament, support a successor 
resolution to UNSCR 1441. We certainly hope that Mexico will support us 
when resolutions regarding the lifting of sanctions and other post-
conflict actions to benefit the people of Iraq are put before the 
Council.
    Question. Mr. Secretary, I admire Colombian President Uribe and I 
want to support him. I think his Minister of Foreign Affairs and 
Minister of Defense are superb. Colombia is now the third largest 
recipient of United States aid.
    We are spending over half a billion dollars a year in Colombia. We 
are spraying hundreds of thousands of acres of coca. Over the past 
three years, we have given the Colombian military all kinds of new 
aircraft and equipment. It is now going to cost hundreds of millions of 
dollars a year just to operate and maintain the aircraft. Are we going 
to be paying for this? What's the end game?
    Answer. U.S. assistance pays for much of the operations of the 
rapidly expanding military and national police air programs that 
support counter narcotics activities. However, one of the principal 
central objectives of U.S. counter-drug assistance is to develop the 
capability of both the Colombian Army Aviation Brigade and the 
Colombian National Police Air Wing to operate and maintain their 
programs without the support of USG-funded contract pilots, mechanics 
and technical personnel.
    For the military, after an extensive recruiting and training 
program, we will have sufficient pilots for all three types of 
helicopters by mid-2003. We are providing these pilots the operational 
experience and professional guidance for them to mature into command 
pilots, a process that averages two years. We have trained a total of 
127 military helicopter pilots, 29 of whom have advanced to Pilot in 
Command or Instructor Pilot status. As this pool of aviators matures, 
we will draw down the number of civilian contract pilots.
    Training of mechanics takes years to impart the necessary skills 
and practical experience, but we are making progress and are steadily 
increasing the number and skills of military helicopter mechanics. Many 
observers are not aware of the youth of the Colombian Military Aviation 
Brigade--it had only one helicopter as recently as six years ago. Our 
progress must be measured against the tremendously increasing needs of 
this growing program.
    For the national police, the primary and overriding goal has been 
to bring illicit coca and opium poppy cultivation under control as 
quickly as possible. This last year's 15 percent reduction in coca 
cultivation is a strong indication that we have turned the corner. At 
present, there are no available Colombian police spray pilots, and 
hence the use of civilian contract pilots is required. However, our 
program hires Colombian pilots to the maximum extent possible, and we 
are now identifying potential CNP pilots as candidates for 2003 spray 
plane training.
    The Colombian National Police Narcotics Directorate (DIRAN) Air 
Service has been established for a significant period, is essentially 
self-sufficient in pilots and has an effective maintenance capability 
requiring only some civilian contractor assistance.
    Question. For fiscal year 2003, we modified the human rights 
conditions so the Administration can now provide 75 percent of the 
military aid immediately. Only 25 percent is subject to the conditions. 
I supported this for one reason, and it was not because the human 
rights situation is improving. In fact, according to a February report 
of the United Nations Human Rights Commissioner:

    ``There was `a significant increase in reports of violations 
attributed directly to members of the [Colombian] security forces, as 
compared to the year 2001.' These reports included torture, excessive 
use of force and executions.
    ``The U.N. human rights office `was unable to observe any 
significant progress in terms of trials, whether criminal or 
disciplinary, of public officials responsible for serious human rights 
violations . . .'
    `` `The Colombian armed forces continued to tolerate and in some 
cases collaborate with paramilitary forces. Paramilitaries continued to 
expand operations in areas where the presence of the Colombian armed 
forces was high.' ''

    The reason I agreed to change the conditions was because I know of 
the tremendous pressure you are under to continue military aid. You can 
now disburse 75 percent of the aid immediately. But that means we 
expect the State Department to insist on full compliance with the 
conditions before releasing the remaining 25 percent of the aid. We 
want to see significant progress on human rights, which we have not 
seen in the past. Do you agree?
    Answer. We recognize that Section 564, Division E of the fiscal 
year 2003 Omnibus Appropriations Act (Public Law 108-7) revises 
previous law, allowing obligation of 75 percent of the funds for the 
Colombian Armed Forces prior to certification. We appreciate your 
decision and believe it is fully consistent with U.S. policy to 
strengthen democratic institutions, promote respect for human rights 
and the rule of law, intensify counter-narcotics efforts, and end the 
threats to democracy posed by narcotics trafficking and terrorism in 
Colombia.
    The Administration takes the Colombia human rights certification 
process very seriously and will review all evidence pertaining to the 
human rights conditions when deciding whether conditions found in 
Section 564(a) have been met. As in the past, we will insist on full 
compliance will all human rights conditions prior to making his 
determination and certification.
    In recent years the Colombian Armed Forces has taken a number of 
necessary steps to improve its human rights record and sever military-
paramilitary ties. Nevertheless, both we and the Government of Colombia 
recognize that serious problems remain, and we use every opportunity to 
engage Colombian government and military officials on concrete measures 
they should take to improve their human rights performance.
    Question. The President's fiscal year 2004 budget request contains 
only $100 million in Foreign Operations funds for the Global Fund to 
Fight AIDS, TB and Malaria. That is $150 million less than we 
appropriated in fiscal year 2003. What kind of message does that send?
    Answer. In his State of the Union address in January, the President 
announced an historic five-year, $15 billion Emergency Plan for AIDS 
Relief, including a $1 billion pledge to the Global Fund, bringing the 
total U.S. commitment to the Global Fund since its inception to $1.65 
billion--nearly one-half of all money pledged to the Fund to date. The 
$100 million request for the Global Fund in the fiscal year 2004 
Foreign Operations request contains only half of President Bush's total 
request, $200 million, for the Global Fund in fiscal year 2004. The 
other $100 million is contained in the budget request for the 
Department of Health and Human Services.
    This $200 million, if approved by Congress, will be the first 
installment of the $1 billion that the President has pledged to the 
Global Fund for fiscal year 2004 through fiscal year 2008, as contained 
in his Emergency Plan. The United States has been the most consistent 
financial supporter of the Global Fund and has made the longest-term 
pledge, providing a benchmark for other donors. The election of 
Secretary of Health and Human Services Tommy G. Thompson as the Fund's 
Board Chair is another sign of the U.S. government's support, and its 
commitment to ensuring that the Fund is accountable and sustainable.
    The President's five-year, $15 billion Emergency Plan for AIDS 
Relief is the most aggressive initiative yet proposed to fight HIV/
AIDS, and will include the largest AIDS treatment program to date. The 
Emergency Plan will, if approved by Congress, continue U.S. government 
funding to the Global Fund and to HIV/AIDS programs in more than 50 
countries, and focus about $9 billion in new money on 14 of the 
hardest-hit of these countries in Africa and the Caribbean. The goals 
of the Emergency Plan are to prevent 7 million new infections, provide 
treatment for 2 million people, and provide care and support for 10 
million people, including children orphaned by the disease and HIV-
positive people in the 14 focus countries.
    Question. Mr. Secretary, last August several Americans were killed 
and injured in an ambush near the Freeport gold mine in Papua, 
Indonesia. There is credible evidence that elements of the military 
were responsible, and that the military continues to obstruct efforts 
to investigate that crime. Because of this, the Administration has not 
resumed the IMET program with Indonesia.
    I do not believe we should cut off all relations with the 
Indonesian military. But if we are going to give them aid or training, 
they should show that they want to reform. No one, including former 
U.S. diplomats who know the Indonesian military, says they have any 
interest in reform.
    Can we be confident that the Administration will not resume IMET 
until there is a thorough investigation and we know whether the 
military was involved in the assassination of the Americans, and that 
those responsible will be punished?
    Answer. We are under no illusions about the Indonesian military's 
poor human rights record, and IMET is not a reward for the military's 
past behavior. Whether we proceed with IMET or not, we will be 
relentless in our pursuit of justice for the murder of American 
citizens. Unrestricted IMET does, however, provide exposure for foreign 
civilian and military personnel to alternative value systems in 
settings where they are challenged to think for themselves. It also 
enhances future access for the United States. As we have indicated 
earlier, we will consult with the Congress before proceeding with 
obligation of these funds.
    Due to our concerns about human rights abuses and stalled military 
reforms, U.S. interaction with the military is limited in scope. IMET 
will help provide education to key Indonesian military officers in 
areas directly related to reform and professionalization of the 
military.
    We see IMET as a precursor to reform. Without knowledge and 
training, there is little chance of developing sufficient numbers of 
reform-minded officers to make a difference in the larger institution. 
We must also be realistic; IMET is a long-term program that will 
require many years of continuity to achieve significant results by 
annually sending a handful of officers to U.S. schools. The importance 
of a $400,000 IMET program has been exaggerated both by proponents and 
opponents; we can, at best, expect gradual results. In the past, IMET 
graduates have been the most likely pool of reformers in Indonesia.
    The FBI is continuing its investigation and we continue to assign 
it the highest priority in our policy concerns with the Indonesian 
government. Indonesian Government actions in this case are an important 
factor in our evaluation of future military assistance programs for 
Indonesia, along with other factors such as U.S. national security 
interests, counter terrorism cooperation, respect for human rights, 
civil-military relations, political developments in Indonesia, and the 
regional strategic environment.
    Question. Mr. Secretary, as you know, the Mexico City policy 
requires private non-governmental organizations to agree not to spend 
their private funds to advocate for safer abortions even where abortion 
is legal, if they also receive funds from USAID.
    When President Bush reimposed these restrictions on his first day 
in office, he said the Mexico City policy was necessary to reduce 
abortions. It has now been two years since the President imposed these 
restrictions. What evidence do you have that this policy is reducing 
abortions.
    Answer. In restoring the Mexico City policy, the President said 
that taxpayer funds should not be used to pay for abortions or to 
advocate or actively promote abortion, either here or abroad. He also 
stated that one of the best ways to prevent abortion is by providing 
quality voluntary family planning services.
    The President has demonstrated support for family planning by 
consistently requesting $425 million dollars for international family 
planning and reproductive health activities in fiscal years 2002, 2003, 
and 2004, a level that was higher than funding levels in the previous 
five years before he took office.
    While reliable data on the incidence of abortion is absent in many 
countries, there is evidence that abortions have declined where family 
planning services are made available. For example, in Russia, because 
of limited contraceptive availability, abortion had been used as the 
major method of family planning. However, the recent increased 
availability of modern family planning methods has contributed to a 
greater than one-third drop in the abortion rate. Similar results have 
been seen in Hungary, Chile, Colombia, Mexico, South Korea, Kazakhstan, 
and Ukraine.
                            famine in africa
    Question. Mr. Secretary, there is an ongoing famine in sub-Saharan 
Africa that has placed approximately 40 million people at risk of 
starvation. During consideration of the last 2 appropriations bills, I 
joined with other Senators to add more than $1 billion in food aid to 
deal with the situation--only to see the House, working with OMB, 
significantly reduce these funding levels in conference.
    Humanitarian NGOs, the UN, and even people in the Administration 
say there simply is not enough food aid to deal with the crisis. And, 
if something is not done soon, the situation in Africa will get even 
worse.
    It will be months before fiscal year 2004 food aid is available. In 
the interim, what does the administration plan to do to address this 
crisis?
    Answer. The Administration has allocated over 1.2 million metric 
tons of food aid over the past year to southern Africa, Ethiopia and 
Eritrea, valued at $713 million. Approximately 450,000 metric tons of 
this food is currently en route to Ethiopia and Eritrea, the two 
countries of most concern in the coming months. Additional large 
contributions to sub-Saharan Africa are also in the planning stages, 
for delivery in the region near the end of the fiscal year. These 
commodities have been resourced by USAID through the funding mechanisms 
of Public Law 480 Title II, the Bill Emerson Humanitarian Trust, and 
through the U.S. Department of Agriculture's 416(b) authority.
    USAID's Office of Food for Peace (FFP) will pre-position food 
stocks in the United States and Africa using current resources for use 
in the interim period in question. In addition, FFP maintains an 
unallocated budget reserve, which will be tapped near the end of the 
fiscal year to ensure that the flow of food aid remains constant and 
directed to the areas of most concern.
    USAID has given top priority to the food aid crisis in sub-Saharan 
Africa over the past year, and has provided close to half of all the 
food aid provided to the region. USAID will continue this high level of 
attention to the region over the foreseeable future.
    Question. What is the Administration's position on membership in 
the International Coffee Organization (ICO)? Beyond ICO membership, 
what is the Administration's plan to address the collapse of coffee 
prices around the world that has devastated the economies of developing 
nations?
    Answer. The Administration is currently reviewing the issue of 
whether the United States should rejoin the International Coffee 
Organization (ICO). As part of this review, the Department of State has 
reached out to industry, the NGO community and Members of Congress. 
Formal review under the United States Trade Representative-led Trade 
Policy Review Group process will be initiated in the near future.
    In response to the hardships faced by coffee producers because of 
the on-going coffee crisis, the Administration believes that it is 
essential to promote the development of alternative economic 
opportunities over time, while supporting initiatives to help producers 
improve coffee quality and develop new markets more immediately.
    Over the medium term, economic diversification will be the key to 
resolving this problem. In the case of Central America, one of the 
hardest hit regions, we are negotiating a free trade agreement that 
will provide a host of alternative development opportunities. Progress 
in the WTO on reforming agricultural trade would greatly assist the 
rural areas of developing countries around the world.
    Meanwhile, we are taking steps to alleviate the coffee crisis 
through a range of USAID assistance programs to both small and medium 
producers in coffee-exporting regions around the world. USAID 
activities support coffee and diversification efforts in over 25 
countries in Latin America, Africa and Asia. The main objectives of the 
USAID programs are to assist farmers that cannot effectively compete in 
the coffee sector to diversify their activities and identify other 
sources of income and employment and create sustainable small holder 
coffee systems that provide significant income, employment and social, 
where the potential exists for the production of high quality coffee.
    USAID is also actively coordinating with the World Bank and the 
Inter-American Development Bank. USAID co-wrote a paper with the IDB 
and the World Bank in 2002 that outlined a strategy to address the 
coffee crisis in Central American by increasing the ability of 
efficient producers to compete more effectively while encouraging 
inefficient producers to exit the coffee sector for other activities in 
which they are better able to compete.
    USAID investments in Latin America & the Caribbean will total over 
$63 million to address the coffee crisis through humanitarian relief, 
agricultural diversification and improved competitiveness within the 
coffee sector. In addition, a regional Coffee Quality Program will 
invest $8 million dollars to improve product quality and marketing, and 
to establish business linkages in Central America and the Dominican 
Republic. Over the next five years, USAID/Colombia will invest $7 
million to promote specialty coffee as an alternative to illicit drugs.
    Question. Mr. Secretary, I want to ask you about the free trade 
agreement you are negotiating with Central America. I recently met with 
Nicaraguan President Bolanos, who I have great respect for. I am 
concerned about how this agreement may affect Nicaragua's fragile 
democracy.
    Nicaragua will need substantial assistance to get through a 
difficult transition to free trade. Without help, free trade applied 
too quickly could throw hundreds of thousands of poor subsistence 
farmers out of work. The free trade agreement should include a bold and 
imaginative program of aid to help them adjust to a new economy without 
destroying their democracy. We should also enlist the cooperation of 
the World Bank, the IM and the Inter-American Development Bank. I'm 
prepared to work with you on this. I'd appreciate it if you would keep 
me informed about how you plan to do this.
    Answer. Preparing Nicaragua and the other countries of Central 
America to take fullest advantage of the free trade agreement in 
addition to the transition to free market economies is part of the 
USG's strategy for the actual negotiations. Representatives from State, 
USAID, USTR, Commerce and other departments participate in the 
interagency CAFTA trade capacity building (TCB) working group, which 
identifies country-specific TCB needs and organizes donor coordination 
to respond to those needs. This working group is also reaching out to 
NGOs, international financial institutions (including both the World 
Bank and the Inter-American Development Bank), and the private sector 
as appropriate. The working group also meets with the Central Americans 
during the trade talks to assess progress and identify other needs 
under TCB. The next round of talks will take place May 12-16 in 
Guatemala.
    USAID has several mechanisms, including its Program Supporting 
Central America Participation in the FTAA (PROALCA), that may be 
tailored for CAFTA needs. PROALCA intends to open a new $4 million 
window for technical assistance which may be used by Nicaragua as well 
as other Central American countries. Under the Opportunity Alliance, 
USAID is supporting the re-orientation of agriculture programs toward 
more trade-related activities, such as non-traditional agricultural 
exports.
    Question. In territory controlled by the LTTE, there are innocent 
civilians, including children, who have lost limbs or suffered other 
serious injuries and disabilities as a result of the conflict. This is 
what the Leahy War Victims Fund was designed to address. Can't we 
permit USAID to meet with representatives of the LTTE to discuss ways 
to make this assistance available through reputable NGOs?
    Answer. The United States intends to provide substantial 
reconstruction and humanitarian assistance in Sri Lanka, through 
international and local NGOs of our choice, including to benefit people 
in LTTE controlled areas of the North and East. Assistance will be 
provided consistent with U.S. law and will include funding from the 
Leahy War Victims Fund. The LTTE has been designated as a foreign 
terrorist organization pursuant to section 219 of the Immigration and 
Nationality Act, as amended, and pursuant to Executive Order 13224, but 
such designations would not preclude U.S. government officials from 
meeting with the LTTE.
    The United States does not negotiate with terrorist organizations 
and has never engaged with the LTTE. We are currently considering, 
however, directly informing the LTTE and the government our plans for 
providing assistance to persons residing in LTTE-controlled areas.
                                 ______
                                 
            Questions Submitted by Senator Mary L. Landrieu
    Question. Is the United States committed to a long-term presence in 
Afghanistan to establish peace and security?
    Answer. Yes. President Bush made clear in a Joint Statement with 
President Karzai on January 28, 2002 that a lasting and permanent 
solution for Afghanistan's security needs must be based on 
strengthening Afghanistan's own capabilities. Nothing has changed in 
the intervening months. The United States contributed over $900 million 
in assistance to Afghanistan last year, and with continuing 
Congressional support, we will match that level again this year. This 
money is going to support projects for health, education, refugees, 
agriculture, infrastructure, empowering women, as well as security.
    Provincial Reconstruction Teams (PRTs) led by the United States are 
combining military presence, civil affairs workers, and representatives 
of the Karzai government to extend the benefits of security to all 
regions of Afghanistan. Following our lead, other coalition members 
plan to take the lead on PRTs of their own.
    Meanwhile, our contributions to Disarmament, Demobilization and 
Reintegration (DDR) and the training of the Afghan National Army (ANA) 
are beginning the long-term process of shifting power from regional 
commanders to a well-equipped, professionally trained military. Eight 
battalions already are trained and deployed throughout Afghanistan, and 
the people of the country have welcomed them.
    To underscore our long-term commitment to Afghanistan, a series of 
high-level officials, including the Secretary of Defense, the Secretary 
of Health and Human Services, the President's special envoy to 
Afghanistan, and the Deputy Secretary of State, have visited 
Afghanistan in the last month, and the Secretary of Agriculture is 
scheduled to visit later in 2003.
    These efforts are having a visible impact on Afghanistan and are 
laying the groundwork for a new constitutional government and elections 
next year. With Congress' support, we will continue to build a 
democratic Afghanistan and help the Afghan government bring the 
benefits of peace and security throughout the country.
    Question. Are we dedicating enough funds to the reconstruction of 
Afghanistan? ($896M to date, not including fiscal year 2004 request)? 
After all, the Marshall Plan had a price tag of $88B in today's 
dollars. Can we expect future supplementals and money in the fiscal 
year 2005 request to fund Afghan reconstruction? Do you still support a 
funding goal of $8B for Afghanistan, as you have previously stated?
    Answer. Assistance from the United States and other donors has been 
sufficient to address Afghanistan's key needs in a timely fashion. We 
provided over $900 million in assistance per year in fiscal year 2002 
and fiscal year 2003 (including supplemental packages each year).
    Last year, a key priority was humanitarian assistance, and over 
one-third of our assistance was directed to assist returning refugees 
and help avert famine. This year, the humanitarian crisis has eased, 
permitting us to direct much of our assistance toward rebuilding 
infrastructure and the Afghan government's institutions and security 
capabilities. At the same time we are funding ambitious health, 
education and agricultural projects and supporting preparations for a 
constitutional assembly this fall and elections next June.
    The Administration has requested almost $700 million for 2004 (not 
counting funds to be expended by the Department of Defense), which, 
together with resources from other donors, should be sufficient to 
address anticipated funding needs. We are developing the fiscal year 
2005 request, though final decisions have not been made.
    In late 2001, the World Bank and the Asian Development Bank 
estimated Afghanistan's cumulative five-year funding needs (to be 
funded by all donors) to be in the range of $8 billion to $12 billion. 
This remains a reasonable estimate, and we have worked closely with 
Afghan leaders to help raise funds from international donors.
    Question. What are we doing to ensure Afghan women will have a 
direct role in society to vote, work, go to school, and serve in the 
new government? Would you support a call to require that a set 
percentage of aid be directed toward the advancement of Afghan women, 
or be conducted by women led relief organizations?
    Answer. Life for women under the Karzai government represents a 
dramatic improvement over the serious and systematic abuses of the 
Taliban regime. Some women, primarily in Kabul, have begun discarding 
the burqa, the head-to-toe veil that had been rigidly enforced by the 
Taliban. Women are once again permitted to work outside the home, and 
female civil servants and teachers have returned to work. Girls flocked 
to the schools when they re-opened in March 2002, and it is estimated 
that of the 3 million new students this past year, 35 percent were 
girls. The Ministry of Education is hoping that girls will make up 50 
percent of the students soon, and estimates that numbers were up when 
schools opened again in March 2003. Within the Afghan government, the 
Ministers for Public Health and Women's Affairs, as well as the Chair 
of the Human Rights Commission, are women, and many more women serve as 
Deputy Ministers, Office Directors, and in mid-ranking governmental 
positions. As Afghans write a new constitution and devise a new legal 
system, we are impressing upon them the importance of upholding and 
respecting internationally recognized human rights standards, including 
the rights of women.
    Afghanistan established a Commission to Combat Trafficking in 
Persons and created a Human Rights Commission with well-known human 
rights champion Sima Simar as its chairperson. The United States 
provided start-up funding and technical assistance to the Ministry of 
Women's Affairs to refurbish the building, provide technical advisors 
to the Ministry, and establish a women's resource center with internet 
access, computer training, and print and video materials on human 
rights at the Ministry.
    The United States, through USAID, provided over one million 
textbooks in 2002, many of which benefited Afghan schoolgirls. The 
United States has helped rebuild and rehabilitate more than 230 schools 
to date, and plans to do an additional 1,000 more and provide training 
for teachers, most of whom are women, as part of a package of $61 
million of support for primary education over the next three years.
    The U.S. government is supporting the Ministry of Women's Affairs 
in its efforts to open a network of women's resource centers in each of 
Afghanistan's 32 provinces. Such centers will provide a safe place 
where women will receive training in a range of subjects, including 
human rights, political participation, and job skills training. USAID 
is funding the construction of 14 provincial centers, and grants by the 
U.S.-Afghan Women's Council will fund educational programs in these 
centers. Education is fundamental to progress for women.
    These projects specifically target and benefit women, while others, 
such as school rebuilding efforts, benefit all Afghans, including women 
and girls. For that reason, and because of the need for flexibility in 
a fluid situation, establishing earmarks or set percentages of aid 
would hinder rather than help our efforts to assist Afghan women, as 
would mandating aid delivery to specific organizations.
    Question. What is the proper mix of funds to fight HIV/AIDS on a 
global level--how did State and HHS determine what to contribute to the 
Global Fund versus bilateral assistance from the United States to 
selected countries? The budget only contains $100M for the Global Fund. 
Is the United States still committed to the Global Fund? The G-8 has 
not met its original goals for the Global Fund, either.
    Answer. We believe that the President's Emergency Plan for AIDS 
Relief, as the largest, single commitment in history to an 
international public health initiative involving a single disease, 
contains the proper mix of funds for this Administration to address the 
HIV/AIDS pandemic on a global scale. The President's $15 billion 
Emergency Plan for AIDS Relief (PEPFAR) calls for spending, over 5 
years:
  --Approximately $5 billion for continuation of existing programs in 
        nearly 50 countries;
  --An additional $1 billion for the Global Fund to Fight AIDS, 
        Tuberculosis and Malaria; and
  --About $9 billion for the President's new 14-country initiative.
    The Plan seeks to prevent 7 million new infections, treat 2 million 
HIV-infected people, and care for 10 million HIV-infected individuals 
and AIDS orphans. To accomplish these goals, implementation of the Plan 
will be based on the Ugandan model involving a layered network of 
medical centers and the ABC (Abstinence, Being Faithful, and, when 
necessary, Condom use) approach to stemming the tide of HIV/AIDS.
    PEPFAR increases financial and technical assistance to both 
bilateral and multilateral activities. Bilateral programs and the 
Global Fund complement each other's contributions to the fight against 
HIV/AIDS and should both receive increased support. Bilateral programs 
are vital for technical assistance and capacity building. The projects 
financed by the Global Fund usually build upon the foundations 
established by bilateral programs.
    The United States is firmly committed to the Global Fund. The $100 
million request for the Global Fund in the fiscal year 2004 Foreign 
Operations Appropriations budget request contains only half of 
President Bush's total request, $200 million, for the Global Fund in 
fiscal year 2004. The other $100 million is contained in the fiscal 
year 2004 budget request for the Department of Health and Human 
Services.
    The President's announcement of a $1 billion pledge to the Global 
Fund brings the total U.S. commitment to the Global Fund since its 
inception to $1.65 billion--nearly one-half of all money pledged to the 
Fund to date. The United States has been the most consistent financial 
supporter of the Global Fund and has made the longest-term pledge, 
providing a benchmark for other donors. The election of Secretary of 
Health and Human Services Tommy G. Thompson as the Fund's Board Chair 
is another sign of the U.S. Government's support, and its commitment to 
ensuring that the Fund is accountable and sustainable.
    The President looks forward to the G8 Summit in Evian as an 
opportunity to urge other governments and private donors to join us in 
increasing efforts to combat this disease both domestically and 
internationally.
    Question. Is the Administration committed to realizing its new plan 
for $15B over 5 years? Will cuts be made to other foreign aid programs 
in order to pay for the AIDS initiative, or will the commitment to 
fighting AIDS be in furtherance of our commitment to international 
development?
    Answer. The Administration is fully committed to implementing its 
new plan for $15 billion over 5 years to the global effort against HIV/
AIDS as an additional component of our international development 
activities. Of the $15 billion, roughly $10 billion is new money for 
the President's new fourteen-country initiative and increased support 
of the Global Fund to Fight AIDS, Tuberculosis and Malaria, in 
furtherance of our commitment to international development, with the 
remaining funds allocated for the continuation of existing programs.
    Question. Is the United States committed to a long-term presence in 
Iraq to establish peace and security? Wouldn't a short-term departure 
only allow the forces of fanaticism and fundamentalism to re-emerge?
    Answer. The United States is committed to helping the Iraqi people 
establish a whole, free nation at peace with itself and its neighbors, 
and governed by the rule of law. As President Bush has said, the United 
States will remain in Iraq as long as necessary to achieve these 
objectives, but not a day longer.
    Question. What are we doing to ensure Iraqi women will have a 
direct role in society--to vote, work, go to school, and serve in the 
new government? Would you support a call to require that a set 
percentage of aid be directed toward the advancement of Iraqi women, or 
be conducted by women-led relief organizations?
    Answer. The United States recognizes the vital role Iraqi women 
will play in the creation of a unified, free Iraq. We are committed to 
equal rights for all Iraqi citizens. This includes the full 
participation of women in social, political and economic life, 
including in reconstruction efforts and in Iraq's future government.
    Iraqi women participated in the first two political conferences 
held by the Coalition, and the conference statements affirmed the 
importance of the role of women. Given the difficult circumstances 
under which the first conferences were held, we were unable to reach 
out to sufficient numbers of Iraqi women to secure their participation. 
Serious efforts are currently underway to identify larger numbers of 
Iraqi women to participate in future meetings and to take part in the 
rebuilding of Iraqi institutions and the drafting of new laws.
    Despite a brutal dictatorship, Iraqi women have continued to make 
great strides in education and in professions over the past decades. We 
want to ensure that this progress continues and that Iraqi women will 
make the contributions that their talent, ambition and dedication to 
their country's future will enable.
    United Nations Security Council Resolution 1483, introduced by the 
United States, the UK, and Spain calls for the establishment of ``the 
rule of law that affords equal rights and justice to all Iraqi citizens 
without regard to ethnicity, religion, or gender.''
    We do not support the establishment of a set percentage of aid to 
be directed to any particular issue or group of organizations. We do 
not believe that this is necessary to achieve our goal of equal rights 
and the participation of women in the rebirth of Iraq and its 
institutions. Supporting the educational, political, economic and 
social development of women and girls is a key, identified priority in 
many of the relief and reconstruction programs that the USG supports 
through funding to the United Nations, other IOs, NGOs and independent 
contractors in the areas of education, democratic governance, civil 
society and legal reform. We are also committed to ensuring that as 
Iraq makes the transition to a free market economy that women, as well 
as men, are provided with the training and support necessary to thrive 
in this new business environment.
    Question. Secretary Powell, you have served as both Chairman of the 
Joint Chiefs and now Secretary of State. Is the Administration pursuing 
the proper path with DOD in the lead? How long should DOD be in the 
lead? Is there a transition plan for State and USAID to takeover the 
more traditional roles of foreign assistance and economic development? 
Is there an effective liaison system in place for DOD to call upon 
State's expertise when necessary?
    Answer. The President has determined that the Department of Defense 
has the lead for our activities in post-war Iraq. The State Department 
has supported DOD's lead strongly. First, during the activities of the 
Office of Reconstruction and Humanitarian Assistance (ORHA) and, now, 
within the framework of the Coalition Provisional Authority (CPA).
    Both State and USAID have provided, and will continue to provide 
expertise to this DOD-led effort, detailing of personal on-the-ground 
to ORHA and CPA to fulfill the U.S. objective of assisting the Iraqi 
people to establishing a free and democratic nation that is a 
responsible member of the international community.
    State and USAID will continue to carry out the President's wishes, 
cooperating with and supporting the DOD in every way possible to reach 
a successful conclusion in Iraq.
    Question. How will you judge when the violence has stopped and the 
Palestinian Authority has lived up its end of the bargain? Who will 
determine when safety has been achieved? Russia? The EU? The United 
Nations? How will be power be shared between the United States, United 
Nations, EU, and Russia?
    Answer. We've always said that we are prepared to send in U.S.-led 
monitors if this would prove useful to the parties, to observe and 
coordinate with both sides, to look into claims or charges that one 
side might make against the other. We're not talking about an armed, 
interpositional force, but a coordinating group on the ground, which 
could grow into a larger group over time that could serve a monitoring 
function. We have been in close consultation with Palestinian leaders 
to develop a plan for assisting the Palestinians with security, and the 
United States, working with other interested friends in the region and 
from the Quartet will assist the Palestinians in that regard. We have 
been clear that any monitoring arrangement would be U.S. led and have a 
U.S. face.
    Question. How will you judge when the violence has stopped and the 
Palestinian Authority has lived up its end of the bargain? Who will 
determine when safety has been achieved? Russia? The EU? The United 
Nations? How will be power be shared between the United States, United 
Nations, EU, and Russia?
    Answer. We've always said that we are prepared to send in U.S.-led 
monitors if this would prove useful to the parties, to observe and 
coordinate with both sides, to look into claims or charges that one 
side might make against the other. We're not talking about an armed, 
interpositional force, but a coordinating group on the ground, which 
could grow into a larger group over time that could serve a monitoring 
function. We have been in close consultation with Palestinian leaders 
to develop a plan for assisting the Palestinians with security, and the 
United States, working with other interested friends in the region and 
from the Quartet will assist the Palestinians in that regard. We have 
been clear that any monitoring arrangement would be U.S. led and have a 
U.S. face.
    Question. As we begin to tackle the issues of ``winning the peace'' 
in Iraq and continue our efforts in Afghanistan as well, I hope that 
the U.S. Government's programs will devote attention to improving the 
status of women. Women are so important for caring for children and 
educating them. In addition, women should have equal access to 
participation in politics and in business and the work place, as well. 
If I were to select one area for emphasis, it would be education. What 
are our plans for reconstituting the educational systems in Iraq and 
Afghanistan and for encouraging equal access to schooling for women and 
girls?
    Answer. In Iraq, the U.S. Agency for International Development 
(USAID) has awarded a contract to Creative Associates International to 
address immediate educational needs and promote participation of the 
Iraqi people in a sustainable, effective and decentralized educational 
system. The U.S. Government's goal is to ensure that children will be 
able to start the new school year in September 2003 in a system 
dedicated to education, not propaganda. Equal opportunity for girls is 
an urgent goal of a reformed educational system.
    The rehabilitation of schools is critical, including ensuring 
sufficient electricity, water and sanitation facilities, and sufficient 
equipment and supplies to facilitate learning. We also recognize the 
importance of ensuring proper compensation to teachers for their 
efforts. In support of our efforts to build the foundations of a 
democratic society in Iraq, it is important that we work with Iraqis to 
ensure that such values as pluralism and equality are taught in 
schools.
    We will also support community awareness and social mobilization 
programs which highlight the importance of children returning to, and 
staying in school, with a particular emphasis on ensuring that girls 
offered are full and equal opportunities.
    In Afghanistan, girls' education has improved dramatically under 
the Karzai government, no small achievement after the serious, 
systematic discrimination of the Taliban regime. Girls flocked to the 
schools when they re-opened in March 2002, and it is estimated that of 
the 3 million new students this past year, 35 percent were girls. The 
Ministry of Education is hoping that girls will make up 50 percent of 
the students soon, and estimates that numbers were up when schools 
opened again in March 2003.
    The United States, through USAID, provided over fifteen million 
textbooks in 2002, many of which benefited Afghan schoolgirls. The 
United States has helped rebuild and rehabilitate more than 230 schools 
to date, and plans to do an additional 1,000 as well as provide 
training for teachers, most of whom are women, as part of a package of 
$61 million of support for primary education over the next three years.
    The U.S. government is supporting the Ministry of Women's Affairs 
in its efforts to open a network of women's resource centers in each of 
Afghanistan's 32 provinces. Such centers will provide a safe place 
where women will receive training in a range of subjects, including 
human rights, political participation, and job skills training. USAID 
is funding the construction of 14 provincial centers and will provide 
funding for the centers, including health education programs, daycare, 
etc. ($5 million of the fiscal year 2003 funds to be obligated by 
Summer 2003). Education is fundamental to progress for women and, 
moreover, for Afghanistan as a whole.
    Question. After all the commitment and even heroic actions by our 
troops, first in Afghanistan and now in Iraq, will we have the wisdom 
and steadfastness to follow through on our commitment to promoting 
democracy? How well are we doing with our previous efforts? Why are 
funds for the promotion of democracy in Eastern Europe (``SEED funds'') 
being cut, just when we need examples of U.S. determination and 
perseverance and good models for the democratic development of 
Afghanistan and Iraq?
    Answer. Since 1989, the Support for East European Democracy (SEED) 
Act has promoted important U.S. national interests and strategic goals 
in North Central and South Central Europe. Indeed, many SEED-funded 
programs have provided excellent role models and experienced personnel 
as we set up similar programs in Afghanistan and Iraq.
    With the graduation of the northern tier countries, the SEED 
program has shifted its focus southward. This region could still pull 
in our allies and ultimately the United States to uphold vital 
interests, as the past conflicts in Bosnia-Herzegovina (Bosnia) and 
Kosovo and more recent insurgencies in southern Serbia and Macedonia 
demonstrated. SEED assistance provides a defense. It funds important 
peace implementation programs that have laid the foundation for longer-
term development through the rise of democratic institutions and market 
economies. It also supports the region in its drive for integration in 
Euro-Atlantic institutions, as witness the historic November 2002 
invitation to seven more SEED-recipient countries to join NATO, and the 
December 2002 invitation to eight to join the European Union.
    To facilitate continued reform and transition in Southeastern 
Europe, SEED assistance supports innovative models, technical 
assistance, and training. SEED funding fosters civil security and rule 
of law in these transitional societies, increases adherence to 
democratic practices and respect for human rights, and promotes broad-
based economic growth. Many in the region have made important progress 
toward achieving the objectives of the SEED program: development of 
democratic institutions and political pluralism and of free market 
economic systems. All the recipients are now democracies, and all are 
experiencing economic growth. Extensive SEED investments during recent 
years have successfully helped the region overcome crises, so that in 
fiscal year 2004 we can continue to reduce the overall request while 
maintaining the momentum of the reforms underway. The Department's 
fiscal year 2004 budget request shifts $10 million in funding for 
educational and cultural exchanges to support the above efforts from 
the SEED account to the Educational & Cultural Exchange account under 
the Commerce-Justice-State portion of the budget.
                            against stonings
    Question. Here in the Senate I have sponsored a resolution, Senate 
Concurrent Resolution 26, against executions by stoning. If passed, it 
would simply ask you to work with the international community to 
promote international standards of human rights and to encourage the 
repeal of laws permitting stoning.
    Will the State Department devote attention to this egregious 
violation of human rights, which affects women so disproportionately? 
What can our diplomacy do to encourage the Nigerian government to save 
Amina Lawal and other women who may be sentenced to death by stoning in 
parts of Nigeria where shari'a law is in effect?
    Answer. Thank you for this important question. I can assure you 
that we are devoting attention to this issue, which as you say, affects 
women disproportionately. Stoning is an exceptionally cruel form of 
punishment that violates internationally accepted human rights 
standards and norms.
    We are closely monitoring the case of Ms. Lawal, and those of other 
Nigerian men and women facing similarly harsh sentences. We have 
repeatedly told the Government of Nigeria that it must adhere to its 
commitments under the Universal Declaration of Human Rights and the 
International Covenant on Civil and Political Rights, both of which ban 
cruel and unusual punishments and prohibits death sentences in all but 
the most severe crimes.
    The good news to date is that Nigeria's Minister of State for 
Foreign Affairs has said repeatedly that there is ``no way'' a stoning 
sentence would be carried out in Nigeria. He has given public 
assurances that the Supreme Court would ``supersede'' the Shari'a 
system if necessary to stop the execution of a stoning sentence. Also, 
in his last National Day address on October 1, Nigerian President 
Obasanjo noted that no stoning sentence has ever been carried out in 
Nigeria. He told the Nigerian people that none ever would. And, 
Nigeria's Attorney General has said that harsh Shari'a punishments 
violate Nigeria's Constitution and international commitments.
    That said, DRL is monitoring these cases closely because there has 
not been a final resolution in Nigeria to the Lawal case, and stoning 
has not been banned. The Nigerian constitution does not provide for 
federal intervention in cases active in state courts; only through the 
appeals process will federal issues of the constitutionality of harsh 
Shari'a sentences be aired.
    Please know that we will do what we can to help Amina Lawal and 
others facing this fate, and to encourage an end to this cruel 
practice.
                      wmd threats outside the fsu
    Question. The threat of weapons of mass destruction is perhaps the 
greatest concern in our war against terrorism and was a major reason 
for our incursion into Iraq. However, our nonproliferation efforts to 
date against biological and chemical weapons, as well as nuclear 
devices, have been limited to the countries of the former Soviet Union. 
Last year an effort to expand the authorization of Nunn-Lugar 
legislation was scuttled in the House.
    Is the State Department working with the Departments of Defense and 
Energy to obtain authorization to expand our counter-proliferation 
efforts to include countries beyond the states of the former Soviet 
Union? How successful and sustained have our nonproliferation efforts 
been and what are the obstacles to such expansion and fully effective 
implementation?
    Answer. The Nunn-Lugar ``Cooperative Threat Reduction'' (CTR) 
Program is only one part of U.S. nonproliferation activities. While CTR 
is currently limited by law to the states of the former Soviet Union 
(FSU), the Departments of State and Energy have nonproliferation 
program authorities to operate globally and are doing so. In addition 
to these authorities, the President has requested for fiscal year 2004 
that the Congress give him authority to use up to $50 million in CTR 
funds outside the FSU. Although almost all the countries in the world 
have become parties to the Nuclear Non-Proliferation Treaty, and a 
large majority have adhered to the Chemical Weapons Convention and 
Biological Weapons Convention, we face significant nonproliferation 
problems. But while the news has been grim from South Asia, Iran, North 
Korea and, until recently, Iraq, we have also achieved important 
successes.
    Beyond the FSU, the State Department runs two important global 
programs. One is the Nonproliferation and Disarmament Fund (NDF), which 
tackles tough, urgent problems, such as the removal of highly enriched 
uranium from Vinca, Serbia to safe storage in Russia, and destruction 
of WMD-capable missiles in Eastern Europe. The NDF also has developed 
and deployed an automated system, ``Tracker,'' that already enables 
nine countries and 63 ministries to inventory and account for weapons-
sensitive exports/imports, and its use is expanding. NDF is working 
towards building an international consortium to support Tracker.
    Second, our Export Control and Related Border Security Assistance 
Program (EXBS) runs programs in 35 countries, aiming to help our 
partners control the flow of dangerous technologies and amaterials in 
the most dangerous parts of the world. Our EXBS Program draws on 
expertise from a number of agencies, and coordinates closely with 
efforts by the Departments of Energy and Defense to strengthen other 
countries' controls on transfers of WMD and missile-relevant 
technologies.
    We have important partnerships with key governments to prevent the 
spread of these technologies, through the Missile Technology Control 
Regime (MTCR), the Australia Group (AG) for chemical and biological 
weapons technologies, the Nuclear Suppliers Group and the Zangger 
Committee for nuclear transfers, and the Wassenaar Arrangement for 
sensitive weapons technologies (including shoulder-fired anti-aircraft 
missile systems, MANPADS). We are constantly working to make these 
nonproliferation regimes more effective.
    Another important partnership is with the International Atomic 
Energy Agency (IAEA), whose safeguards program aims to ensure that 
civilian nuclear facilities remain civilian, and provides critical 
assurance that nuclear material in civil nuclear programs is not 
misused for non-peaceful purposes and that covert nuclear activities 
are not being pursued. We are prepared to back tough safeguards with 
increased funding.
    At the same time, we must continue to focus significant effort on 
the still sizable residual stocks of dangerous materials from the 
massive WMD establishment of the former Soviet Union. The 
Administration has accelerated funding for a number of projects. The 
Departments of Energy, Defense and State have collaborated under the 
CTR and other authorities to improve security at Russian storage 
facilities, to consolidate stored fissile materials, to stop new 
production and to purchase or down-blend nuclear material from former 
nuclear weapons to reduce supply. The State Department provides the 
diplomatic lead for several threat reduction programs of the Defense 
and Energy Departments. We are also responsible for the U.S. 
Government's involvement in the International Science Centers in Russia 
and Ukraine, which employ former Soviet weapons scientists in peaceful, 
commercial projects--to reduce the temptation for those scientists to 
hire themselves out to proliferators.
    Question. Student Visas and security.--In the aftermath of 9/11, we 
have significantly tightened security procedures for people visiting 
our country for temporary purposes. At the same time, we must strike a 
balance that will allow free travel and exchange of visits which are so 
characteristic of American society. With regard to the issuance of 
visas for foreign students, I have found the need for better 
coordination between the Department of State and the new Department of 
Homeland Security. Since February of this year, men from certain high-
risk mid-East countries who fail to register their departure will find 
their student visas canceled. However, Homeland Security has not yet 
proposed any method for reviewing or waiving the ineligibility of those 
put into the NSEERS automated system for such violations. I hope you 
will work with Secretary Tom Ridge to remedy this apparent blind spot 
in our visa adjudication process.
    Answer. The DHS NSEERS regulations, 8 CFR 264.1(f)(8), state that 
if an alien fails to fulfill the departure control requirements upon 
leaving the United States, he or she will thereafter be presumed 
ineligible under section 212(a)(3)(a)(ii) of the Immigration and 
Nationality Act for admission to the United States. In an INS [DHS] 
memorandum of December 20, 2002, the agency provided field guidance 
relating to returning NSEERS violators citing factors that can be used 
at the Port of Entry to allow applicants to overcome this regulatory 
presumption of ineligibility. With DHS concurrence, the State 
Department provided subsequent guidance to all Embassies and Consulates 
transmitting these factors to consular officers to use in determining 
whether NSEERS violators can be issued visas. The instructions to posts 
stated that Consular Officers ``can issue visas to aliens entered into 
lookout as NSEERS violators, provided that the applicant can 
demonstrate good cause for the violation and/or reasonable assurances 
that the applicant will comply with these requirements in the future.'' 
The instructions further stated that ``Although Conoff cannot guarantee 
any applicant that this procedure will ensure an applicant with NSEERS 
violations will be admitted to the United States, these procedures are 
consistent with the DHS guidelines and should in most cases be 
sufficient to allow the alien to be admitted to the United States.''
    Question. Do you believe that we are dedicating enough to the 
Foreign Operations budget to effectively carry out our national 
diplomatic goals?
    Answer. Yes. The requested fiscal year 2004 Foreign Operations 
budget that funds programs for the Department of State, USAID, and 
other foreign affairs agencies is $18.8 billion. This represents a 16 
percent increase over the fiscal year 2003 funding level and does not 
include the fiscal year 2003 emergency wartime supplemental of $7.5 
billion.
    Today, our number one priority is to fight and win the global war 
on terrorism. President Bush recently identified the battle of Iraq as 
a part of this larger war. The budget furthers this goal by providing 
economic, military, and democracy assistance to key foreign partners 
and allies, including $4.7 billion to countries that have joined us in 
the war on terrorism.
    The budget also promotes international peace and prosperity by 
launching the most innovative approach to U.S. foreign assistance in 
more than forty years. The new Millennium Challenge Account (MCA), an 
independent government corporation will redefine ``aid.'' As President 
Bush told African leaders meeting in Mauritius recently, this aid will 
go to ``nations that encourage economic freedom, root out corruption, 
and respect the rights of their people.''
    Moreover, this budget offers hope and a helping hand to countries 
facing health catastrophes, poverty and despair, and humanitarian 
disasters. Such funding will combat the global HIV/AIDS epidemic, meet 
the needs of refugees and internally displaced persons, and provide 
emergency food assistance to support dire famine needs. In addition, 
the budget includes a new proposal to enable swift responses to complex 
foreign crises.

                          SUBCOMMITTEE RECESS

    Senator McConnell. Thank you all very much. The 
subcommittee will stand in recess to reconvene at 2 p.m., 
Thursday, June 5, in room SD-192. At that time we will hear 
testimony from the Honorable Andrew S. Natsios, Administrator, 
Agency for International Development.
    [Whereupon, at 3:06 p.m., Wednesday, April 30, the 
subcommittee was recessed, to reconvene at 2 p.m., Thursday, 
June 5.]

      FOREIGN OPERATIONS, EXPORT FINANCING, AND RELATED PROGRAMS 
                  APPROPRIATIONS FOR FISCAL YEAR 2004

                              ----------                              

                         THURSDAY, JUNE 5, 2003

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.
    The subcommittee met at 2:08 p.m., in room SD-192, Dirksen 
Senate Office Building, Hon. Mitch McConnell (chairman) 
presiding.
    Present: Senators McConnell, Bond, DeWine, Burns, Leahy, 
and Landrieu.

                  AGENCY FOR INTERNATIONAL DEVELOPMENT

STATEMENT OF HON. ANDREW S. NATSIOS, ADMINISTRATOR

             OPENING STATEMENT OF SENATOR MITCH MC CONNELL

    Senator McConnell. The hearing of the Foreign Operations 
Subcommittee will come to order. I want to welcome 
Administrator Natsios. It is always a pleasure to have you 
before this subcommittee.
    Let me begin by acknowledging the difficult task you and 
your agency face in the post-September 11 world. With the 
welcomed liberation of Iraq and Afghanistan comes the need for 
immediate and significant relief and reconstruction programs. 
These activities are often conducted in dangerous and dynamic 
environments and your courageous field staff, NGO partners, and 
contractors should be recognized for the risks they are willing 
to assume in coming to the aid of the Afghan and the Iraqi 
people.
    Emerging from decades of repression, these countries 
require the full gamut of U.S. assistance programs from food, 
water, and health care to governance, economic development, and 
rule of law programs. Concurrent with addressing the needs of 
newly liberated countries, USAID must keep an eye on those at-
risk nations--such as Pakistan, the Philippines, and 
Indonesia--where threats from terrorism have yet to subside. 
Again, a broad range of development programs are required to 
deny the breeding grounds--such as poverty, illiteracy, and a 
lack of economic opportunities--for extremist ideologies and 
terrorism.
    Finally, no less pressing or deserving of attention are 
USAID programs and activities conducted in developing countries 
in Africa, Southeast Asia, and elsewhere. There seems to be no 
shortage of global crises, whether human catastrophes caused by 
corrupt governments or health emergencies fueled by expanding 
HIV/AIDS infection rates.
    A business-as-usual approach is no longer adequate in 
meeting new and pressing demands on our foreign assistance. 
While the fiscal year 2004 foreign operations budget request is 
$2.7 billion above the fiscal 2003 level, the majority of this 
increase is targeted toward new presidential initiatives that 
appear at first glance to maximize and make more efficient the 
delivery of U.S. foreign assistance.
    For example, the Millennium Challenge Account proposes 
increased assistance to those countries meeting certain 
eligibility requirements, including a government's commitment 
to ruling justly, meaning a country's leadership has the 
political will to respect and enforce the rule of law, protect 
freedoms and liberties, and crack down on corruption. Many 
nations currently receiving U.S. foreign aid will not qualify 
for MCA funds because of this requirement. To maximize the 
impact of our foreign aid dollars, perhaps we should consider 
expanding the ``ruling justly'' requirement to our more 
traditional bilateral assistance programs.
    Let me just close with a few comments on the reconstruction 
of Iraq. First, the subcommittee would appreciate your 
assessment of how programs are proceeding on the ground and an 
analysis of those obstacles and challenges the coalition will 
face in the weeks and months ahead. Second, many of our 
colleagues and I have been contacted by American companies 
eager to assist in the reconstruction of that country and 
today's hearing affords you an opportunity to clarify how 
contracts are being awarded and where those companies can turn 
for information and assistance.

                           prepared statement

    Finally, it would be useful to articulate what you believe 
the long and short-term expectations of the Iraqi people are in 
terms of reconstruction and democratic governance.
    With that, let me call on my friend and colleague Senator 
Leahy, the ranking member, for his opening statement.
    [The statement follows:]
             Prepared Statement of Senator Mitch McConnell
    Welcome, Administrator Natsios. It is always a pleasure to have 
your appear before this subcommittee.
    Let me begin by acknowledging the difficult task you and your 
Agency face in the post-September 11 world.
    With the welcomed liberation of Iraq and Afghanistan comes the need 
for immediate and significant relief and reconstruction programs. These 
activities are often conducted in dangerous and dynamic environments, 
and your courageous field staff, NGO partners and contractors should be 
recognized for the risks they willingly assume in coming to the aid of 
the Afghan and Iraqi people.
    Emerging from decades of repression, these countries require the 
full gamut of U.S. assistance programs--from food, water, and health 
care to governance, economic development and rule of law programs.
    Concurrent with addressing the needs of newly-liberated countries, 
USAID must keep an eye on those at-risk nations, such as Pakistan, the 
Philippines and Indonesia, where threats from terrorism have yet to 
subside. Again, a broad range of development programs are required to 
deny the breeding grounds--such as poverty, illiteracy, and lack of 
economic opportunities--for extremist ideologies and terrorism.
    Finally, no less pressing or deserving of attention are USAID 
programs and activities conducted in developing countries in Africa, 
Southeast Asia, and elsewhere. There seems to be no shortage of global 
crises, whether human catastrophes caused by corrupt governments or 
health emergencies fueled by expanding HIV/AIDS infection rates.
    A ``business as usual'' approach is no longer adequate in meeting 
new and pressing demands on our foreign aid. While the fiscal year 2004 
foreign operations budget request is $2.7 billion above the fiscal year 
2003 level, the majority of this increase is targeted toward new 
Presidential initiatives that appear at first glance to maximize and 
make more efficient the delivery of U.S. foreign assistance.
    Fox example, the Millennium Challenge Account (MCA) proposes 
increased assistance to those countries meeting certain eligibility 
requirements, including a government's commitment to ``ruling 
justly''--meaning a country's leadership has the political will to 
respect and enforce the rule of law, protect freedoms and liberties, 
and crackdown on corruption.
    Many nations currently receiving U.S. foreign aid will not qualify 
for MCA funds because of this requirement. To maximize the impact of 
our foreign aid dollars, perhaps we should consider extending the 
``ruling justly'' requirement to our more traditional bilateral 
assistance programs.
    Let me close with a few comments on the reconstruction of Iraq. 
First, the subcommittee would appreciate your assessment of how 
programs are proceeding on the ground and an analysis of the obstacles 
and challenges the coalition will face in the weeks and months ahead.
    Second, many of my colleagues and I have been contacted by American 
companies eager to assist in the reconstruction of Iraq, and today's 
hearing affords you an opportunity to clarify how contracts are being 
awarded and where these companies can turn for information and 
assistance.
    Finally, it would be useful to articulate what you believe the 
long- and short-term expectations of the Iraqi people are in terms of 
reconstruction and democratic governance.
    I look forward to your testimony.

             OPENING STATEMENT OF SENATOR PATRICK J. LEAHY

    Senator Leahy. Thank you very much, Mr. Chairman.
    First, Mr. Natsios, we are always pleased to see you and 
glad to have you here. As you know, I have been a strong 
supporter of USAID. I am always impressed by the quality of the 
men and women who work there, both in Washington and overseas. 
I do not always agree with where the funds go, but we need to 
work together.
    I remember the mid-1990s, when some of my colleagues in the 
other party in the other body were trying to shut down USAID. 
It did not happen. I also would point out that the chairman of 
this subcommittee has been one who has strongly supported the 
wise use of foreign aid. He has done it with the care that 
Senators of both parties ought to emulate.
    But now you are under assault from your own administration 
and from some in the House and the Senate. I will give you a 
couple of examples. The President wants to set up another 
bureaucracy outside of USAID to run the Millennium Challenge 
Account. The AIDS bill which the President just signed takes 
all your HIV/AIDS money and the power to decide how it is used 
and gives it to an independent coordinator. The Pentagon, not 
USAID or the State Department, is in charge of the biggest 
international relief and reconstruction effort in recent years, 
in Iraq.
    So I look forward to hearing your perspective on the future 
of USAID. It seems to me the White House sees you as 
increasingly irrelevant.
    I am also interested in hearing your views on nation-
building. I remember the President's National Security Adviser, 
Dr. Rice, criticizing the Clinton Administration for nation-
building in the former Yugoslavia. To quote her, she said: ``We 
do not need the 82nd Airborne escorting kids to kindergarten.'' 
However, nation-building today is a major theme of the 
administration's foreign policy. It is still the same world it 
was just a few years ago, but then nation-building was a bad 
idea, today it is a good idea. We are engaged in nation-
building on a scale unlike anything since the Marshall Plan 
from Iraq to Afghanistan to East Timor to the Balkans.
    I believe we do have a strong interest in helping these 
countries rebuild, but that does not mean that I agree with 
everything that is being done. In Afghanistan, President Bush 
said we need a Marshall Plan. Last year, the administration did 
not request a cent for Afghanistan, and the amount of aid the 
President has requested since September 11 pales in comparison 
to the Marshall Plan.
    In fact, last year, when the administration did not put in 
the money for their so-called Marshall Plan for Afghanistan, 
Congress had to take resources from other, very important 
programs to give to Afghanistan. Even the amount we 
appropriated fell short. Warlords continue to wield power over 
large areas of the country. Afghanistan's future remains far 
from secure.
    In Iraq, it seems as if we are making it up from one day to 
the next. Months after the fall of Saddam Hussein, millions of 
Iraqis are without adequate water, shelter, employment, or any 
idea of what lies ahead. Yet everybody in both parties said 
these issues would have to be addressed after the war in Iraq. 
We all knew we would win the war, whether we supported it or 
not. We were sending the most powerful military the world has 
ever known against a fourth-rate military power; of course we 
are going to win. But nobody really thought much about what to 
do afterward.
    Two months ago we appropriated $2.4 billion for Iraq relief 
and reconstruction. Monday OMB said there is no coherent plan 
or strategy for what to do with that $2.4 billion.
    The President has received a lot of credit for increasing 
funds to combat AIDS. I totally agree with the President, but I 
doubt many people know that to do that his budget cuts just 
about everything else that we are doing in international 
health, all the programs that have been supported by both 
Republicans and Democrats for as long as I can remember. He 
would cut child and maternal health programs, aid for 
vulnerable children, funding to combat other infectious 
diseases, which kill millions of people, mostly children, the 
kind of diseases our people do not have to even worry about 
because it is only a matter of pennies to pay for the 
vaccinations.
    But the money for these programs is being cut to fund the 
AIDS bill. It also cuts family planning.
    Development assistance--the President's budget would cut 
funding for these core programs, agriculture, children's 
education, democracy-building--by $35 million. That makes no 
sense, and I think it goes back on the pledge that the funding 
for the Millennium Challenge Account is in addition to, not in 
place of, funding for existing programs.
    I worry about procurement at USAID. Everything you are 
trying to do is being hampered by bottlenecks in your 
procurement office. I know that is one of the things you want 
to fix and I want to know when it is going to be fixed.
    With that I will stop, Mr. Chairman.
    Senator McConnell. Thank you, Senator Leahy.

              SUMMARY STATEMENT OF HON. ANDREW S. NATSIOS

    Mr. Natsios, we will put your full statement in the record 
and if you could give a brief summary, we will maximize the 
opportunity for questions.
    Mr. Natsios. Thank you very much, Senator. I want to thank 
the committee, both parties, for the strong support that our 
Agency has received from you Senators as well as from your 
staff. Paul Grove and Tim Rieser have been extraordinarily 
helpful and cooperative with us. We do not always agree on 
everything, but we appreciate the cooperative and open spirit 
that we have in dealing with the staff of the committee.
    The last year has seen changes that none of us anticipated 
in many areas of the world, and we have began a number of major 
new activities that I would like to talk about. Last fall we 
issued a set of papers called the ``Foreign Aid and the 
National Interest Report'' that tracks where we expect foreign 
assistance to go, broadly speaking, over the next decade. It is 
on our web site. We have widely distributed it. It is done by 
some of the preeminent scholars in development assistance and 
humanitarian relief in the country. Larry Diamond, for example, 
wrote the first chapter; he is one of the two great democracy 
scholars in the United States. But it is a road map. It is a 
direction for where we need to go, what has worked and what has 
not worked.
    We have begun new initiatives in agriculture, in basic 
education, in trade capacity building. In the budget that you 
have before you, all of these areas will show increases in 
funding. Basic education goes up by over $45 million, 
agriculture goes up by about $10 million.
    In addition, we have funded both in the State budget and 
the AID budget a line item should there be a just and equitable 
peace settlement in Sudan. We are the closest we have been in 
20 years to a peace agreement in Sudan, and in our budget we 
have committed that should peace break out the U.S. Government 
would provide funds for reconstruction in Sudan.
    There is I think great excitement in the agency because of 
the enormous potential for the expansion of the foreign 
assistance program of the U.S. Government. The President has 
proposed essentially a 70 percent increase in the budget for 
foreign assistance over the next three years through the 
Millennium Challenge Account and the HIV/AIDS account. We are 
already spending about a billion dollars, all spigots, on HIV/
AIDS. The President has proposed an additional $2 billion. Of 
course, the Millennium Challenge Account is a $5 billion 
increase, the first installment of which, $1.3 billion, is in 
the fiscal 2004 budget.
    You ask, Mr. Chairman, about the Iraq and Afghanistan 
reconstruction. We would be glad to send you a detailed account 
of what is going on in both those budgets, but in the budget 
for 2004 between State and AID in all spigots for our two 
budgets, the 150 account, we have proposed $657 million in the 
2004 budget for reconstructing Afghanistan.
    This year AID alone is spending, because of your 
appropriation, $350 million in five major initiatives in 
Afghanistan. One is a major new agricultural initiative, $150 
million over three years; a health initiative to extend health 
care across the country, 400 new health clinics of the 1,100 we 
believe need to be put in place to serve the country; a 300-
mile road which is critically important to tieing the Pashtun 
south, Kandahar, with Kabul, which will be completed by 
December of this year--imagine building a road from Boston--I 
come from New England--to Washington in eight months, in an 
area that is the most insecure in the country. We are 
progressing, though, substantially.
    We have democracy and governance programs. We are helping 
the national Government with advice on options they have for 
writing their new constitution, which is a process that is 
ongoing now.
    We also have an economic governance package that went into 
effect in September of last year, October of last year, which 
helps with the selling off of state-run enterprises, all of 
which are bankrupt, a new budgeting system for the national 
Government, a new customs collection system, a new uniform 
commercial code. We helped create the currency for the country 
that was issued last fall, working with the central bank. And a 
new education initiative where we will build 1,200 schools 
across the country and double the number of textbooks. We 
printed 15 million, we are going to print another 15 million, 
for a total of 30 million. We are the source of textbooks for 
public education in Afghanistan.
    In Iraq, we have spent $450 million on the humanitarian 
relief side, mostly on food aid, to make sure there is a bridge 
between now and the time the Oil for Food program goes into 
effect later this summer.
    We have spent $98 million so far of the reconstruction 
money and another $234 million has been released by Congress 
and by the OMB that will shortly be put in the reconstruction 
accounts. We have an elaborate plan for how to spend that 
money. I can only speak for what I do. We have a plan for 
spending $1.1 billion in reconstruction and $600 million for 
humanitarian relief. We started designing that last October 
with 200 staff from AID. There are 100 AID staff now in Iraq or 
in Kuwait City where some of our offices are working.
    Finally, I would like to mention the question that you 
brought up, Senator, on the procurement system. We indeed have 
a new procurement software system which we hope to install, but 
we cannot install it until after the new Phoenix system for our 
financial management has been installed in the field. It has 
been installed in the Washington and beginning actually last 
week we initiated a 25-month plan to install Phoenix in the 
missions, in 79 missions around the world. Actually, it will be 
in a reduced number of missions--we are collapsing the number 
of accounting stations--but it will serve the field.
    Once that is in place, there are two things we can attach 
to it. One is this new procurement system, which will make much 
more efficient the way in which we do our procurements. The 
second thing we will be able to do is an information warehouse 
software package, which will allow information--the questions 
you give us now that we must manually calculate because we do 
not have and have not had for 25 years a unified financial 
management system worldwide. We will have that within 25 months 
if all goes according to plan.
    So the business systems reforms are 50 percent there, but 
they are not finished yet, and until they are I will not be 
satisfied. But we do appreciate very strongly the support of 
the committee in this.
    I want to just end by making a comment about extending the 
MCA standards, which you, Mr. Chairman, very thoughtfully 
brought up, as an option for our regular programs. We have 
proposed in fact to the White House and to the Congress a 
package that seeks to restructure AID, not from a statutory 
standpoint, but we will look at countries and divide them 
specifically into the following categories:
    Countries that just barely missed being eligible for MCA 
status, but want to make it, and they will require heavy 
reforms and focus on the areas where they failed to meet the 
MCA standards. So we will direct our resources in those 
countries in the areas where they were failing.
    The second are countries that are failed and failing 
states. We have a new bureau. It is not new any more, it is two 
years old, but we have reorganized. Roger Winter heads that 
bureau, who is widely known in the NGO community and the human 
rights community. It is a bureau that deals with failed and 
failing states, called Democracy, Conflict, Humanitarian 
Assistance. That bureau has more money in it than ever in AID 
history. It is up to almost $2 billion this year, for failed 
and failing states, for countries that are not even remotely on 
the chart for MCA, but that we do not want to forget.
    The third category are countries that are in our 
geostrategic interest. Egypt, Jordan, Pakistan are three ESF 
countries. They are in a separate category. We must make those 
countries' programs be geared to the geostrategic national 
security interests, narrowly defined, of the United States 
Government. We need to treat them in that category.
    Finally, there are countries that just are not close to 
making it. We need to ascertain in those countries whether 
there is the will to reform, and if there is the will to reform 
we will help them move toward MCA status, but it will take a 
while to get there. And if there is no will and the country is 
really stuck and there is no chance of it getting out because 
of the absence of political leadership, we will work 
exclusively through the NGO community and the university 
community and not deal with the Government.

                           prepared statement

    Senator, I know you have a lot of concerns about several 
countries in Asia in that category, which we would very much 
agree with you on. But we need to think clearly about which 
countries fit in which categories and restructure our program 
along those lines.
    I would like to submit my written testimony, which is much 
more lengthy, for the record.
    [The statement follows:]
              Prepared Statement of Hon. Andrew S. Natsios
    Chairman McConnell, Senator Leahy, members of the subcommittee: 
Thank you for inviting me here today to discuss the President's budget 
for the U.S. Agency for International Development for fiscal year 2004.
     the strategic importance of development assistance in the new 
                               millennium
    We live in an era that has seen dramatic change in recent years--an 
era that is rapidly evolving. Globalization, technology, HIV/AIDS, 
rapid population growth, terrorism, conflict, weapons of mass 
destruction and failing states--these are just some of the issues 
shaping today's world. Most of these issues--both good and bad--do not 
recognize national borders. They affect us directly and are 
dramatically altering the way in which we think and operate.
    The Bush Administration is restructuring and revolutionizing our 
national security apparatus so we can better respond to the challenges 
facing the world today. Under the President's leadership, USAID is also 
changing. Where appropriate, we are applying lessons we have learned 
over the years, whether in Afghanistan or Iraq, or in the fight against 
HIV/AIDS in Africa and around the world. This ability to adapt will 
determine our success as part of the President's resolute campaign to 
attack poverty, ignorance and the lack of freedom in the developing 
world.
    In September 2002, President Bush introduced his National Security 
Strategy. In it, the President discussed development as a vital third 
pillar of U.S. national security, alongside defense and diplomacy. Thus 
for the first time, the Strategy recognizes the importance of both 
national and transnational challenges, such as economic growth, 
democratic and just governance, and HIV/AIDS to our national security.
    The President's National Security Strategy identifies eight 
concrete goals. Two of them speak directly to our development mission. 
The first is to ignite a new era of global economic growth through free 
markets and free trade. The second is to expand the circle of 
development. Trade capacity building lies at the intersection of these 
two goals, and supports both. It promotes USAID's core concern with 
development, while reinforcing the core U.S. trade policy goal of 
further opening up and expanding international trade.
    Foreign assistance will be a key instrument of U.S. foreign policy 
in the coming decades. As a consequence, our foreign assistance budget 
is poised to rise dramatically. The President's recent budget requested 
a dramatic increase in the development and humanitarian assistance 
account, from $7.7 billion in fiscal year 2001 to more than $11.29 
billion in fiscal year 2004. It is clear that this Administration has 
taken development off the back burner and placed it squarely at the 
forefront of our foreign policy. But this is only one piece of an 
unprecedented and concerted commitment by President Bush and the U.S. 
Government make foreign assistance more effective.
              the changing landscape of foreign assistance
    Looking back over several decades, one must recognize that the 
developing world has made significant progress. Of the world's 200 
countries in 2001, for example, 124 were democracies at least in some 
form. This is an unprecedented number. Similarly, most of the world's 
6.2 billion people now live in countries where some form of market 
economics is practiced. This is a dramatic increase since 1980. 
Population growth rates are down, and in some parts of the world health 
and education levels have surpassed U.S. levels of 50 years ago. 
Globalization has integrated the world's markets for goods, services, 
finance, and ideas. Remarkable advances in biotechnology are bringing 
the promise of new cures for the sick and new kinds of seeds and food 
for the hungry.
    But we still face an uncertain future. In many developing 
countries, HIV/AIDS and health issues are having a dramatic impact on 
social cohesiveness and economic strength, blocking the very 
development goals we seek. Virtually all the new democracies in the 
world today are fragile; others are democracies more in name than 
substance. Nearly a quarter of the people living in developing 
countries, or about one billion people, live in absolute poverty. There 
are a host of other threats--ranging from terrorism to infectious 
disease and violent conflict--that challenge us and the developing 
nations we seek to help.
    Events such as the Monterrey Conference on Financing for 
Development and our recent report, Foreign Aid in the National 
Interest, are helping us focus clearly on what has been accomplished so 
far and what needs to be done to meet the challenges that lie ahead. 
The President's Millennium Challenge Account (MCA), announced at 
Monterrey, is a direct outgrowth of what USAID and our development 
partners have learned.
    Simply put, development assistance works best when nations have 
responsible institutions and governments that pursue policies conducive 
to economic growth. Democratic governance, sound policies, and open, 
transparent institutions are the keys to development. Performance, not 
intentions, is what matters most, so we have learned the importance of 
measuring that performance with rigorous and unbiased indicators.
    Many of the grave issues facing the developing world require us to 
take new approaches. We have to revolutionize how we think about aid in 
general and USAID in particular. The issue of how to deal with failed 
and failing states is just one example. As the President's National 
Security Strategy stated, ``America is now threatened less by 
conquering states than we are by failing ones.''
    Under the leadership of President Bush and Secretary of State 
Powell, we now have both the opportunity and the obligation to 
implement a development strategy that clearly defines our challenges 
and identifies the best approaches to address them. We are working more 
closely than ever at the interagency level to clarify the roles and 
linkages of U.S. development institutions. The work done on the MCA is 
an example of this renewed interagency coordination. Working with the 
State Department to develop a joint strategy should greatly improve 
coordination of our foreign assistance programs.
         the millennium challenge account and the role of usaid
    As I stated in earlier testimony on the MCA, I find it helpful to 
think of countries in five broad groupings:
  --MCA countries or the best performers.
  --Countries that just miss qualifying for the MCA and with a little 
        help have a good chance of doing so.
  --Mid-range but performing counties with the commitment to reform. 
        For these countries, our assistance will focus on achieving 
        progress in specific aspects of development, especially 
        economic growth and democratic governance.
  --Selected failed, failing, and post-conflict states that require 
        specialized assistance, post-conflict reconstruction or 
        humanitarian assistance. This is a new element of the Agency's 
        core business. In these countries our objective will be 
        establishing greater security, stability and order. Programs 
        will focus on food security, improving governance, and building 
        the collective sense of nationhood that must precede evolution 
        to more democratic forms of government and lay the groundwork 
        for countries to move toward longer-term development.
  --Countries requiring assistance for strategic national security 
        interests.
    I would like to highlight our belief that focusing on responsible 
governance and good performers must infuse all our development 
efforts--not just the MCA. This should be the case for other bilateral 
and multilateral donors as well. In this way, the MCA will serve as a 
model for all of our assistance programs. Indeed, we are already 
applying an MCA lens to our country programs, informing resource 
decisions. The strategic budgeting system that we will be adopting will 
base the allocation of resources on criteria such as need, performance, 
commitment, and foreign policy priority. The intent is to have a more 
performance-driven and cost-effective foreign aid program that is fully 
responsive to our national security objectives.
               strategic direction and budget priorities
    USAID manages program funds from a number of Foreign Affairs 
accounts directed at addressing a broad array of international issues 
facing the United States. These range from fighting the HIV/AIDS 
pandemic to sustaining key countries supporting us in the war on 
terrorism to bolstering democracy, the rule of law and good governance 
in countries important to our national security. Many of these issues 
were highlighted in Secretary Powell's excellent testimony before this 
subcommittee on April 30.
    For fiscal year 2004, the Administration's request from the 
accounts USAID manages is $8.77 billion in program funds. The account 
breakout is provided below followed by a discussion of program 
priorities.
  --$1.345 billion for Development Assistance, and $1.495 billion for 
        Child Survival and Health; $235.5 million in International 
        Disaster Assistance; $55 million for Transition Initiatives.
  --$2.535 billion in Economic Support Funds; $435 million for 
        assistance for Eastern Europe and the Baltics; and $576 million 
        for assistance for the Independent States of the Former Soviet 
        Union. We co-manage these funds with the State Department.
  --$1.185 billion in Public Law 480 Title II funds are managed by 
        USAID.
    Our readiness to manage these resources and deliver the results 
intended is of particular importance to me. The budget request for 
salaries and support of our staff that manage these programs is $604 
million. In addition we request $146 million for the Capital Investment 
Fund, $8 million to administer credit programs and $35 million to 
support the Office of the Inspector General.
    Economic Growth, Agriculture and Trade.--The Administration's 
request for these programs is $2.316 billion, including $584.2 million 
in Development Assistance.
    Economic growth is an essential element of sustainable development 
and poverty reduction. Trade and investment are the principal 
mechanisms through which global market forces--competition, human 
resource development, technology transfer, and technological 
innovation--generate growth in developing and developed countries. 
During the 1990s, developing countries that successfully integrated 
into the global economy enjoyed per capita income increases averaging 5 
percent annually. However, countries that limited their participation 
in the global economy saw their economies decline.
    In the President's National Security Strategy, he set the goal of 
igniting a new era of global economic growth through free markets and 
free trade. At the March 2002 International Financing for Development 
conference in Monterrey, Mexico, leaders of developed and developing 
counties agreed that trade and investment are critical sources of 
development finance--far outweighing foreign assistance in the broader 
context of international capital flows. President Bush pointed out that 
developing countries receive $50 billion a year in aid, while foreign 
investment inflows total almost $200 billion and annual earnings from 
exports exceed $2.4 trillion.
    I am proud that USAID has just issued a new Trade Capacity Building 
Strategy as a cornerstone of our economic growth efforts. In developing 
this strategy, USAID has worked closely with Ambassador Zoellick, the 
U.S. Trade Representative. USAID will enhance trade capacity building 
programs with new initiatives to support developing countries' 
participation in international trade negotiations and help countries 
develop trade analysis expertise. To support trade agreement 
implementation, USAID will introduce new programs to promote sound 
systems of commercial law and improved customs management. USAID will 
also help developing countries establish open and competitive markets 
in service sectors that are critical to trade and strengthen economic 
responsiveness to opportunities for trade. We will build on the success 
of the Africa Growth and Opportunity Act (AGOA) to provide market-
access for goods produced in sub-Saharan Africa. We are also 
implementing the President's Trade for African Development Initiative 
(TRADE) and preparing Central American countries to adopt a Central 
America Free Trade Agreement (CAFTA), for which we began negotiations 
earlier this year. We are also carrying out a broad range of trade 
capacity building activities throughout the Americas in support of the 
negotiations for a Free Trade Area of the Americas.
    Economic growth and poverty reduction also depend on increased 
productivity at the firm level. Strong micro-enterprise and small 
business sectors will continue to receive emphasis as important 
elements of USAID's approach to growth.
    For many poor countries with largely rural societies, agriculture 
connects poor people to economic growth. A vibrant and competitive 
agricultural and business sector fosters growth. And a supportive 
policy and institutional enabling environment encourages enterprise, 
innovation and competitiveness.
    Agricultural development remains a critical element of USAID's 
approach to economic growth and poverty reduction. Most of the world's 
poorest and most vulnerable populations live in rural areas and depend 
on agriculture. In fiscal year 2004, the budget request includes $268.4 
million in Development Assistance and $470.2 million from all accounts 
for agricultural development.
    The requirements for agricultural development are well known. 
Increasing productivity will lead to higher incomes and more investment 
in the agricultural sector. USAID programs will address these factors 
at the national, regional and local levels and increase attention to 
agriculture in Latin America and Africa. Particular emphasis is being 
given to the President's Initiative to End Hunger in Africa. We will 
also boost agriculture in developing countries by restoring the budgets 
of global agricultural research centers, training scientists, and 
funding science-based applications and biotechnology. Additionally, we 
will work to connect farmers to global supply chains by encouraging 
agricultural trade reform, supporting producer organizations and 
promoting needed market infrastructure.
    Modern biotechnology offers great promise in addressing food 
insecurity in Africa and elsewhere in the developing world. We are 
helping build national and regional biotechnology research programs 
that focus on increasing the productivity and nutritional quality of 
African food crops. A good example is our support for the African 
Agricultural Technology Foundation, a partnership between USAID and 
several private entities.
    Environment.--The Administration's request for environmental 
programs is $449.2 million including $286.4 million in Development 
Assistance.
    Environmental degradation is an increasing threat to long-term 
development with severe effects on health, trade, and poverty reduction 
efforts in general. Effects can be felt directly in the United States, 
as in the case of climate change. It is in our interest to ensure that 
policies and institutions actually support sustainable development. 
USAID's efforts will focus on four initiatives: Water for the Poor; 
Clean Energy; the Congo Basin Forest Partnership; and Global Climate 
Change, as well as ongoing programs in natural resource management, 
forestry, reducing illegal logging, and minimizing pollution.
    Democratic Governance.--The Administration's request for Democratic 
Governance from all accounts is $1.0208 billion including $164.8 
million in Development Assistance.
    Governance based on principles of accountability, participation, 
responsiveness and effectiveness is the foundation of development and 
the key to achieving progress in the three areas named by President 
Bush in the MCA--ruling justly, promoting economic freedom, and 
investing in people. Our democracy and governance programs will give 
new emphasis to strengthening public administration, assisting policy 
implementation, and providing citizen security, all of which are 
integral to democratic governance. We will continue to support 
assistance programs involving human rights, the rule of law, 
strengthening political processes, promoting civil society including 
organized labor, and building local government capacity. Anti-
corruption programs will receive special attention and funding. 
Programs to prevent trafficking of persons and assist victims of war 
and torture will also be continued.
    One of the most significant lessons we have learned is that 
governance--policies, institutions and political leadership--and not 
resources alone, matter most. Thus, USAID will reduce assistance to 
countries where a commitment to democratic governance is lacking. This 
``tough love'' approach is necessary, if we are to provide resources 
where they can be most effective. At the same time, governance is 
critically important in ``fragile'' and failed states. USAID will begin 
to selectively offer support in such countries towards the provision of 
security, stability and reconstruction which will provide the basis for 
future development.
    While we face democratic governance challenges around the globe, 
they are particularly acute at this time in the Mid East and broader 
Muslim world.
    Health and Education.The Administration's request for Health is 
$2,136.2 million from all accounts, with $1.495 billion in Child 
Survival funds. Over half of the Child Survival request, or $750 
million, is for HIV/AIDS programs. The Education and Training request 
is $425 million from all accounts, with $262.4 million of that 
Development Assistance.
    Fundamental to economic growth is improving people's health and 
education. Many developing countries' workforces will grow over the 
next two decades. As a result, some developing countries will have more 
human resources to invest in economic endeavors. But for that to 
happen, investments must be made today so that their economies grow, 
and their workers are healthy and educated.
    As we are witnessing with HIV/AIDS in many developing countries, 
health dramatically affects a country's development prospects and must 
be aggressively addressed if overall development is to take place. 
USAID remains a global leader in HIV/AIDS prevention, care and 
mitigation programs. Under the guidance of the White House Office of 
National AIDS Policy, USAID is working closely with the Department of 
Health and Human Services to implement the President's Mother and Child 
HIV Prevention Initiative and to prepare the foundations necessary for 
delivery of treatment, care, and prevention, as outlined in the 
President's Emergency Plan for AIDS Relief. USAID will continue and 
strengthen support to international partnerships, including key 
alliances with the private sector, and the Global Fund for AIDS, 
Tuberculosis and Malaria.
    USAID's programs in the areas of child survival, maternal health, 
vulnerable children, infectious diseases, family planning and 
reproductive health are cornerstones of U.S. foreign assistance. Our 
health programs save millions of lives through cost effective 
immunization, disease prevention, breastfeeding, nutrition, sanitation 
and voluntary family planning programs.
    While our leadership has brought about important successes, 11 
million children under the age of 5 still die every year, the vast 
majority of them from preventable and treatable diseases such as 
measles, diarrhea and pneumonia. Four out of every 10 people lack 
access to basic sanitation; 42 million people live with HIV/AIDS. Our 
effectiveness in preventing illness and pre-mature death contributes to 
global economic growth, poverty reduction, and both regional and 
domestic security.
    Global markets are changing, as more developing countries shift 
from production based on low-wage labor to higher-end manufacturing. 
Doing so requires workers able to learn new skills and master new 
technologies. In countries where access to primary schooling remains 
incomplete and educational quality remains inadequate, the urgency of 
educational reform is increasingly apparent. Where improvements are 
enabling more students to finish primary school, countries need to 
ensure that new skills can be acquired. Taking full advantage of the 
global economy requires workers with the academic and technical skills 
to adapt technology to local conditions. While continuing to help 
countries make educational improvemenzts, U.S. foreign assistance must 
help more successful countries maintain their upward momentum. The 
President's Education for Africa Initiative, which addresses a range of 
basic education needs, is an important element in this effort. We are 
working closely with the international Education for All program to 
provide resources for those countries who demonstrate performance and 
commitment to educating their children.
    Internal Conflict.--This budget request includes $27.7 million in 
Development Assistance specifically for intra-state conflict, as well 
as $55 million for Transition Initiatives. Additional funding for 
conflict management and mitigation can come from our various sector 
programs, most importantly Democracy and Governance and Humanitarian 
Assistance.
    USAID's goal is to be an agent for peaceful change, wherever and 
whenever possible. We cannot realistically prevent every conflict. We 
are, however, working hard to improve our ability to mitigate and 
manage conflict. Some two-thirds of the countries where we work are 
entering conflict, engaged in conflict, or just recovering from a 
conflict. The causes are complex, and there are no quick and easy 
solutions. Yet at a general level, conflict prevention and management 
entail a continuum of interventions that, done carefully, can 
strengthen the capacity of states to manage sources of tension. A 
crucial part of the solution is encouraging innovative institutions 
that can deal with problems--local, regional, national, and 
international--and resolve them peacefully.
    Our Office of Transition Initiatives provides a fast and flexible 
response capability to address the needs of countries experiencing 
significant political transitions or facing critical threats to basic 
stability and democratic reform. Recent interventions, for example, 
helped Afghanistan, Burundi, East Timor, and Macedonia. New programs 
are being initiated in Angola, Sudan, and Sri Lanka.
    Among the most important things that donors can do is develop a 
deeper, context-specific understanding of what drives conflict. This 
will require a significant investment in research and analysis among 
donors and in countries where conflict programs are being considered. 
Every major focus of our assistance has at least some bearing on 
conflict--from economic growth, to agriculture, to democracy and 
governance. We will apply a cross-sectoral, multi-disciplinary 
perspective when designing programs in environments of conflict. We 
will apply a conflict lens to each area in high-risk countries. 
Recognizing the complexity of conflict prevention, mitigation and 
management, we will coordinate closely with other USG departments and 
agencies, donors, and other partners.
    Humanitarian Aid and Failed States.--The Administration's request 
is $1.69 billion, including $1.185 billion for food, $200 million for 
the new Famine Fund, and $235.5 million for disaster assistance 
programs. USAID is addressing the challenge of forging a comprehensive 
response to failed and failing states: examining the sources of 
failure, working to build institutional capacity, and providing 
critical humanitarian aid to the most vulnerable.
    More than three million people lost their lives in the disasters of 
the 1990s. Conflict-related emergencies were the most deadly, with many 
hundreds of thousands of people killed in direct fighting. Millions 
more have been internally displaced or forced into refugee status. By 
the end of 2000, failed and failing states displaced 25 million people 
within their own countries and 12 million refugees who fled across 
national boarders. While conflict-related disasters have dominated the 
funding and focus of international assistance over the last decade, 
natural disasters still take a tremendous toll worldwide. There were 
three times as many natural disasters in the 1990s as in the 1960s. 
Extreme weather related events are projected to increase. In addition, 
HIV/AIDS and other communicable diseases are on the rise in complex 
humanitarian emergencies, with more than 75 percent of epidemics of the 
1990s occurring in conflict areas.
    The United States is the world's largest humanitarian donor. We 
provide life-saving assistance to people in need of food, water, 
shelter and medicine. Coordinated by our Office of U.S. Foreign 
Disaster Assistance (OFDA), USAID deploys quick response teams that 
include experts from USAID and other USG agencies. Our Public Law 480 
Title II emergency food aid has provided critical food needs in 
Afghanistan, Ethiopia, Southern Africa, and other protracted 
emergencies. USAID is playing a lead role in providing humanitarian aid 
in Iraq. We are prepared, and with the support of other USG agencies 
and our implementing partners, we will do our utmost to avert a 
humanitarian crisis. Along with immediate humanitarian relief, USAID is 
prepared to contribute to political reform and stability.
    We will continue to respond to humanitarian needs to save lives and 
minimize suffering. But we need to do more to reduce vulnerabilities 
that transform natural, socio-economic and political events into 
disasters. For example, the promotion of accountable governance and a 
free press will help defend against famine and conflict. The 
development of local and global capacity to anticipate and respond to 
emergencies will be reinforced by enhancing early warning systems that 
guide policies and public action in countries at risk. We will do more 
to link humanitarian response with longer-term development goals, in 
particular in health. Child immunization programs, for example, have 
sometimes served as a bridge to peace, with cease-fires respected even 
in war zones. Closer coordination with other donors will ensure our 
response is effective and the burden of humanitarian aid is more evenly 
shared.
    We will work to strike a balance among political, military and 
humanitarian strategies. By coordinating closely with the U.S. military 
we can carry out relief operations even in the midst of war. At the 
same time, we strongly affirm the neutrality of humanitarian 
assistance, which should be based on assessed need. More emphasis must 
be placed on protecting those who receive emergency relief from 
violence or human rights abuse, whether refugees or internally 
displaced persons (IDPs). We will encourage our implementing partners 
to improve accountability of humanitarian aid by adopting standardized 
measures of effectiveness.
    In his fiscal year 2004 budget, the President announced a new 
humanitarian Famine Fund. This is a $200 million contingency fund for 
dire, unforeseen circumstances related to famine. Use of the fund will 
be subject to a Presidential decision and will be disbursed by USAID, 
under the same authority as International Disaster Assistance, to 
ensure timely, flexible, and effective utilization. The Famine Fund is 
intended to support activities for which other funding is either 
unavailable or inappropriate and will increase the ability of the 
United States to anticipate and respond to the root causes of famine.
    Mobilizing Private Foreign Aid.--Today private sources of foreign 
aid account for over 50 percent of the total assistance coming from the 
United States. Foundations, corporations, private and voluntary 
organizations, colleges and universities, religious organizations, and 
individuals provide $30 billion a year in aid. Given this new reality, 
we at USAID are expanding our partnerships with a full array of private 
sources and undergone a fundamental reorientation in how we relate to 
our traditional development partners.
    Two important approaches to achieving this are: (1) our Global 
Development Alliance which works to mobilize resources from and foster 
alliances with U.S. public and private sectors in support of USAID 
objectives; and (2) Development Credit Authority which is an Agency 
mechanism to help develop credit markets and to issue partial loan 
guarantees, thereby mobilizing private capital for sound development 
projects. Examples of these partnerships are:
  --In Brazil, USAID is working with private companies and NGOs to 
        encourage low-impact logging.
  --The Digital Freedom Initiative (DFI) is an outstanding example of 
        what can be accomplished when several branches of the U.S. 
        Government and leading American companies like Cisco and 
        Hewlett-Packard join forces to help long-time friends like 
        Senegal build on Senegal's already significant information and 
        communication technology base. The DFI will also facilitate the 
        development of information communications technology 
        applications that enable small and medium-sized businesses to 
        become more profitable, find new markets, and access credit and 
        other inputs more easily. Over the life of the pilot activity, 
        we envision that more than 350,000 small businesses will be 
        involved.
  --In Angola, USAID is cooperating with a U.S. oil company to promote 
        business development in rural communities. The first activity 
        planned will assist 150,000 Angolan families affected by the 
        civil war (former soldiers and internally displaced people) by 
        providing agricultural support and training. We view this as an 
        important step in consolidating the recent peace.
  --In Guatemala, a credit guarantee covers a portfolio of loans to 
        small businesses, small-scale producers and cooperatives 
        operating in the Peace Zone, a rural area of Guatemala that has 
        suffered from political unrest, and normally is without access 
        to commercial credit.
                    operating expenses and staffing
    The President's budget request calls for us to manage a program 
budget of $8.8 billion at a time when foreign aid challenges are 
growing increasingly complex and the environment in which we operate 
more dangerous. We face the triple challenge of addressing: (1) the 
increased strategic importance of funding key countries and programs; 
(2) rising costs of protecting U.S. personnel overseas; and (3) rapid 
retirement of many of our most experienced officers. These call on us 
to:
  --Reform our business systems to enable innovative and streamlined 
        business models for Washington Headquarters and our field 
        missions to strengthen our ability to quickly respond in 
        today's political environment.
  --Strengthen our future readiness by ensuring that our Civil Servants 
        and Foreign Service Officers have the skills and competencies 
        needed in increasingly complex settings.
  --Expand our intellectual/knowledge capital to meet future demands.
  --Ensure accountability in program implementation in increasingly 
        complicated structures.
  --Recruit the right people at the right time, train and deploy them 
        to meet our development mandate.
  --Protect the safety of our staff, overseas and in Washington.
    We request a total of $604 million for our operating expenses. This 
amount, combined with $49.7 million from local currency trust funds and 
other funding sources, will provide a total of $653.8 million to cover 
the Agency's projected operating expenses.
    In addition, we request $146 million for the Capital Investment 
Fund (CIF) to fund Information Technology to support major systems 
improvements that will strengthen the Agency's ability to respond and 
operate effectively; develop enterprise architecture in collaboration 
with the Department of State to enable an integrated accounting system 
worldwide; and, fund new office facilities co-located on embassy 
compounds where the State Department will begin construction by the end 
of fiscal year 2003.
    We also request $35 million to ensure continued operations of the 
Office of the Inspector General associated with USAID's programs and 
personnel and $8 million for managing credit programs.
                         management improvement
    Mr. Chairman, I know that you and this Committee are very 
interested in our management reform efforts. I would like to update 
you, therefore, on our progress in this area. Meeting foreign policy 
and program management challenges requires a modern, flexible and well-
disciplined organization. In close coordination with the President's 
Management Agenda, USAID is aggressively implementing an ambitious 
management reform program including the introduction of new business 
systems, processes and changes to our organizational structures.
  --In conjunction with the State Department's Diplomatic Readiness 
        Initiative, we will ensure that the Agency has adequate numbers 
        of staff to meet present and future national security 
        challenges. In fiscal year 2004, for example, USAID will 
        recruit, train, and assign up to 50 additional direct hire 
        staff overseas to address staffing gaps resulting from 
        retirement of Foreign Service Officers.
  --We are also evaluating, with the Department of State, the 
        feasibility of more closely linking some of our business 
        systems to achieve operating efficiencies.
  --And we are working closely with the Department of State to improve 
        our support for U.S. public diplomacy and public affairs 
        efforts overseas, especially targeting the Muslim and Arab 
        worlds.
    I am pleased to report to the Committee that:
  --We have implemented improvements to the Headquarters core 
        accounting system and improved financial and performance 
        reporting. We have expanded cross-servicing and outsourcing, 
        including grant management (HHS), loan management (Riggs) and 
        payroll (NFC).
  --We have closed the Agency's material weakness on reporting and 
        resource management, and received an unqualified audit opinion 
        on four of five principle financial statements (and an overall 
        qualified audit opinion for the first time.)
  --We have made progress in improving employee morale and employee 
        satisfaction with management services. For example, my second 
        annual Agency-wide survey of all employees' opinions and 
        attitudes, completed in November 2002, showed that 63 percent 
        of those responding rated their morale as ``good'' or 
        ``outstanding.'' Improvements in performance by business 
        function ranged from 20 points for human resources and 
        information services to 37 points for financial management and 
        procurement services. While the results indicate we have made 
        progress, there remains room for improvement and we still have 
        a lot of work ahead of us.
  --We are in the process of developing a comprehensive Human Capital 
        Strategic Plan designed to address both USAID's particular 
        needs and the President's Management Agenda requirements. The 
        plan will address a critical need to rebuild and train our 
        workforce, to put the right kind of people with the right 
        skills in the right place. It will also address our need to 
        have surge capacity to meet crises such as in Afghanistan and 
        Iraq.
  --We have piloted an automated e-procurement system and deployed e-
        procurement capabilities to speed the purchase of frequently 
        used goods and services.
  --We are drafting a knowledge management strategic plan to reposition 
        the Agency as a global leader on development issues and to 
        facilitate knowledge sharing among partners and staff. 
        Completion is expected by mid-2003.
  --We have developed a strategic budgeting model to enable us to link 
        performance and resource allocation more efficiently.
    This year we began implementing the plans for human capital, 
knowledge management, and strategic budgeting. We will procure new 
acquisition and assistance software, begin pilot testing our Phoenix 
financial management system overseas, and reintroduce the International 
Development Intern program for recruitment and training of junior 
Foreign Service officers.
                             in conclusion
    This budget request is founded on three precepts:
  --Foreign aid and the Agency for International Development are 
        essential elements of our country's national security 
        apparatus.
  --Our programs are evolving to meet the challenges of the new 
        millennium.
  --We are pressing ahead with the management reforms begun in 2001 and 
        transforming USAID into an organization of excellence.
    Mr. Chairman, I would like to assure Congress that USAID's budget 
request for fiscal year 2004 rests on a solid foundation of 
professional analysis and a strong commitment to performance and 
management reform. We know it is impossible to satisfy everyone who 
looks to us to address every problem that arises. We have spent many 
hours trying to determine the best use for our resources and have had 
to make many painful choices. I hope my remarks today have been helpful 
in explaining our priorities, and I look forward to working with you 
over the coming year as we move our foreign policy agenda forward.
    Thank you.

    Senator McConnell. As I indicated earlier, that will be 
made part of the record.
    Since we have a number of Senators here, I am not going to 
take my full 5 minutes, but I do want to begin by focusing on 
another part of the world that has been very much in the news 
this past week--Burma. I introduced yesterday along with 
Senator Feinstein and a number of co-sponsors, including my 
friend and colleague Senator Leahy, a bill that would impose 
sanctions on Burma, including a ban on exports and restriction 
on visas and the like.
    I have had an opportunity to speak with Deputy Secretary of 
State Rich Armitage, Deputy Secretary of Defense Paul 
Wolfowitz, and National Security Adviser Condolezza Rice about 
the situation in Burma and I am hopeful that the administration 
will support the bill and that we can get it through Congress 
in short order.
    But I want to focus on Burma and USAID. Last year, we put 
$1 million in our budget for HIV/AIDS programs in Burma with 
the full appreciation that the military regime that runs that 
country has no interest in its people and with the condition 
that this relief would be administered through international 
nongovernmental organizations in consultation with Burmese 
democracy leader Avng San Suu Kyi.
    I am curious, given the fact that Suu Kyi has, for most of 
the last 13 years, been under house arrest, how USAID and its 
contractor have been able to consult with her in coordinating 
the HIV/AIDS programs in Burma.
    Mr. Natsios. Senator, I do not know specifically our 
conversation with her, but I will get back to you on the 
question. I do know that we have initiated the HIV/AIDS program 
through the NGO community. There is also $500,000 I believe the 
Congress has appropriated in the budget for 2003 for democracy 
programs, which we were also supposed to and will consult with 
her as to how that money should be spent.
    We are all appalled by what has happened in the last few 
weeks. It appears that the regime has moved 10 years back in 
time. She is, as you know, under much more constrained 
circumstances. She appears to have been physically harmed in 
the latest attacks and we are extremely disturbed by the course 
of events. So we will work very closely with your staff to see 
to it that we structure our program, however modest it may be, 
along the lines of what you have suggested in your remarks.
    Senator McConnell. Well, we are hoping the U.N. Special 
Envoy Mr. Razali Ismael will be able to see her tomorrow when 
he is in the country. Somebody needs to see her to verify that 
she is still alive and well, given that she has been attacked.
    How do you provide any kind of oversight for the use of 
U.S. foreign assistance in Burma?
    Mr. Natsios. We have opened a regional office in Bangkok, 
Thailand, because we are doing increasing programs in countries 
in which we cannot have an AID presence. So that new office is 
to provide oversight for the programs we run in Laos and the 
programs that we run, limited ones, in Burma.
    Senator McConnell. Given the difficulty of carrying out any 
of these functions--since you have to do it by working around 
and not through the regime--could USAID handle an increase in 
HIV/AID funding?
    Mr. Natsios. Yes, we could.
    Senator McConnell. You could.
    Mr. Natsios. We work in countries in the middle of civil 
wars, with extraordinarily repressive regimes. Sudan, North 
Korea we have worked in before. I can give you a list of 
countries where we----
    Senator McConnell. Does the regime actively interfere with 
the NGO's inside Burma trying to help on this issue?
    Mr. Natsios. I think in the health sector they do not. It 
depends on whether or not the regime believes that the 
activities are threatening them in a direct sense, and health 
is an area where the programs tend to not be as threatening as 
some other kinds of programs.
    Senator McConnell. Well, I would be interested in any 
thoughts you might have before we start drafting this year's 
foreign operations appropriations bill as to how we might 
enhance the opportunity to consult with Suu Kyi and the NGO's 
to improve the situation in Burma.
    Mr. Natsios. We will get back to you, Senator, on that.
    Senator McConnell. Okay. I am going to cut short my round 
and then go to Senator Leahy and Senator DeWine.
    Senator Leahy. Thank you. Thank you, Mr. Chairman.
    Incidentally, Mr. Natsios, I want to call your attention to 
the efforts of Barbara Best. She has been working with my staff 
up in Vermont on the so-called LakeNet Project. It is a good 
project. I would invite you up to see it some time. I invite 
you up, Mr. Chairman, to see it. The Lake Champlain area is 
very pretty.
    Mr. Natsios, let me read you an article from a magazine 
written recently. I quote it:

    The blithe assumptions of the Iraq War's Pentagon 
architects that a grateful Iraqi Nation, with a little help 
from American know-how and Iraqi oil cash, would quickly pick 
itself up, dust itself off, and start all over again are as 
shattered as the buildings that used to house Saddam Hussein's 
favorite restaurants. In Baghdad and many other iraqi cities 
and towns, civic society has degenerated into a Hobbesian state 
of nature. Despite the heroic efforts of a scattered minority 
of mid-level Iraqi civil servants, the services that make urban 
life viable are functioning, at best, erratically. More often, 
they do not function at all. One of the few things that thrives 
now in Baghdad is a deepening distrust and anger toward the 
United States.

    In Iraq, what is USAID's role? And how do you feel about--
this was from the New Yorker magazine, incidentally. How do you 
feel about that criticism? Is it accurate?
    Mr. Natsios. First, I would say that this is a time, an 
event in progress, which is to say events change very rapidly. 
So what was true a week after the war ended is no longer true 
now.
    Senator Leahy. Let us just talk about today.
    Mr. Natsios. Okay.
    Senator Leahy. How many people do you have there today?
    Mr. Natsios. We have 100 people between the DART team, the 
Disaster Assistance Response Team from the Humanitarian Relief 
Bureau, and we have 27 people in the USAID mission, headed by 
Lew Lucke, a career foreign service officer we recalled from 
retirement who was the mission director in Jordan, speaks 
Arabic, knows the Arab world very well.
    Senator Leahy. Is he living in Baghdad?
    Mr. Natsios. He is in Baghdad right now.
    Senator Leahy. He is not living in Kuwait?
    Mr. Natsios. He was in Kuwait before the war started and it 
was difficult the first month because we did not have 
electricity, running water, et cetera, in the place in which we 
worked. I think we just moved this week into a convention 
center facility, which is quite good and has all of the 
conveniences we need to keep our staff functional. So the 
staff, more and more of them are moving up to Baghdad now.
    Senator Leahy. Would it be more--what would you anticipate 
the number of USAID workers be 2 months from now?
    Mr. Natsios. The same number. We are at what we need to do. 
We are transitioning, though, out of the humanitarian relief 
mode because we did not experience a humanitarian disaster. We 
expected three things would happen that did not happen, thank 
heavens. We expected that Saddam would turn, in his fury on the 
Kurds, the Shias in the south, the Turkmen, other ethnic groups 
that he hates and that he has visited terrible things on in the 
past. He did not do that.
    Two, we were afraid--he could consider blowing up the large 
dams and flooding the country, which he did during the Iraq-
Iran War. Third, we were afraid there would be large-scale 
population movements, internally displaced and refugees. There 
were not. There were almost no population movements.
    So there were pockets of need. We answered those and we 
have moved into a transition phase. So the Office of Transition 
Initiatives has taken the leadership now of the DART team and 
we will move into public employment programs, which we have 
begun in Baghdad neighborhoods now. Four city councils have 
been set up in Baghdad--or village councils, I should say, in 
neighborhoods, that have been elected or chosen by the people 
in the village, in the neighborhood, and they are beginning to 
make decisions. We are providing small grants for improvements 
in these neighborhoods.
    In Umm Qasr, the port, we just opened our first Internet 
cafe. They do not have the Internet, they did not until now. I 
thought it was sort of a mundane thing. It was a very emotional 
thing, because we took people from the mosque and the new city 
council and showed them what the Internet was. Several people 
were stunned and broke down during the demonstration because 
they did not know this thing--they heard rumors of it; they did 
not know it really existed. They said: We have been cut off all 
these years to this.
    Senator Leahy. I think that is an extremely positive thing. 
I was a little bit troubled. Maybe I misunderstood what you 
said earlier. I agree with you, I am delighted that he did not 
lash out at the Kurds while we were in there and that all the 
weapons he may or may not have had, that none of them were used 
against our troops.
    But you had to anticipate that there was going to be real 
problems in a number of the cities, just watching CNN at night 
and seeing the buildings being bombed, the electricity being 
cut off, water being cut off. Seeing the news about the 
looting, the destruction at the hospitals--apparently we did 
put tanks around the oil ministry, but the other places--I 
still do not have a very comfortable feeling about what we are 
doing.
    Your director is in Baghdad? He is not in Kuwait?
    Mr. Natsios. No, no, no.
    Senator Leahy. He does not go back there at night?
    Mr. Natsios. No, no, no. He comes--part of our procurement 
staff and our technical staff that does the paperwork is still 
in Kuwait because there is infrastructure----
    Senator Leahy. That does not bother me.
    Mr. Natsios. The director, in fact we talked to him 
yesterday. He is in Baghdad. He has been in Baghdad for the 
last week, I believe.
    Senator Leahy. For a week?
    Mr. Natsios. Well, he was back here to his daughter's 
graduation, I think.
    Senator Leahy. But he is there now?
    Mr. Natsios. Right.
    Senator Leahy. So you have got somebody on the ground. What 
is his security when he goes out? Can he move around in these 
areas?
    Mr. Natsios. AID has a set of armored vehicles that we use 
around the world. We keep them in a warehouse and we move them 
around wherever we need them. We used them in Bosnia and 
Kosovo. We used them in East Timor. We are using them here. So 
we have our own security, which no other, other than the 
military, no other group has, and we do use those, particularly 
the DART team.
    But let me just answer the question you asked, Senator. In 
terms of water and electricity, which are critical functions, 
this is not a poor society. This is potentially a very wealthy 
society, given they have water. It is an educated society or 
was very educated in the 1980s. It has deteriorated since then.
    Basically, the infrastructure is there; it simply has not 
been maintained for 20 years because the money has been put 
elsewhere. Right now in Iraq, other than Baghdad there is more 
electrical power and better water than there has been since the 
mid-1980s. We did this only in two months. When I say ``we'', I 
would like to say we did it all ourselves. We did it with the 
British military, the NGO community, the UN agencies. AID paid 
for a lot of it and so did DFD, the British aid agency. The 
civil affairs units have been very helpful and the rest have 
been very helpful.
    But right now in Basra, for example, the second largest 
city, they have had 24 hours electrical service now for 3 
weeks. They have never had that since before the first Gulf 
war. The water system is in far better shape. Now, is it what 
it should be? No. But it is far better than it has been since 
the Gulf war.
    So things are actually improving. And I have to give credit 
also to some of the Iraqis. We went to some cities in the south 
and the Iraqi engineer said that he would not let us fix the 
water system: We know how to fix it; we're technically 
competent; just give us the parts. We brought the parts and we 
watched them. They fixed the water system within 24 hours.
    In villages that had not had water in 10 years, Shia 
villages, that because they had been in revolt were being 
punished, they said we physically were not allowed to repair 
them. They did it themselves with our parts.
    Our doctors--I thought the doctors would be underskilled, 
but one of our very senior medical doctors said: These guys are 
as skilled as Western European or American doctors. In fact, we 
do not need even to train them. They are highly skilled 
technically. Just they have no equipment, the hospitals are in 
terrible condition for many years except for the Baathist Party 
members' hospitals, and what we need to do is bring the other 
hospitals in the Shia and Kurdish areas up to the same standard 
as Baghdad's hospitals.
    Baghdad still has problems with electrical power, but we 
are now at 70 percent of what we were in terms of electrical 
levels from before the war, and that is a dramatic increase 
over 2 weeks ago.
    Senator Leahy. My time is up and I will submit my other 
questions for the record, but especially a question I want to 
give a lot of attention to. In the supplemental, of the $2.4 
billion we put in for Iraqi relief and reconstruction, we 
included assistance to Iraqi civilians who suffered losses as a 
result of military operations. That is something we can do and 
please have your staff work with mine about it.
    Mr. Chairman, I went way over time. I appreciate your 
courtesy.
    Senator McConnell. Thank you, Senator Leahy.

               OPENING STATEMENT OF SENATOR MIKE DE WINE

    Senator DeWine. Thank you, Mr. Chairman.
    Administrator, thank you very much for being with us. I 
have two questions. They are obviously related, but they are 
separate. One is I want to congratulate you and congratulate 
the administration for putting emphasis once again on 
agriculture development, very, very important. If you look at 
where your numbers are in 2002 and 2003, very positive.
    I congratulate also this subcommittee--I was not on the 
subcommittee then, so I can say that, I guess--in the money 
that was appropriated. Our numbers that you have proposed in 
2004 are down just a little bit, but it is still pretty good 
numbers.
    I would like for you to address your vision for agriculture 
development and where that fits in in our whole overall foreign 
aid program.
    Second, I am concerned about what is the reports and what 
is going on in Africa in regard to the famine. I am pleased to 
see that the administration has requested money for the 
emergency famine fund, but I wonder if this is going to be 
enough and I wonder if you can tell us where you think we are 
going there and what the rest of the international community is 
doing.
    Mr. Natsios. With respect to agriculture, Senator, I do 
appreciate your bringing it up because this is one of my and 
the President's and Secretary Powell's big initiatives. The 
President has announced this. We announced it, one, at the 
World Food Summit in June of last year, and the President has 
made subsequent announcements at the G-8 on agricultural 
development to end hunger.
    We need to understand there is a relationship between 
economic growth in most of these countries and food insecurity 
and poverty. Most of the poorest people in the world live in 
rural areas and they are farmers or herders. If you do not deal 
with agriculture, you cannot deal with poverty.
    Why is it that the Asia giants like Taiwan and South Korea 
and Thailand have much the best distribution of wealth in the 
world? Why does Latin America have the worst distribution of 
wealth in the world? The reason is because of the green 
revolution in Asia, which AID in the mid-1960--with the World 
Bank and the Rockefeller Foundation--orchestrated. This effort 
included improving seed varieties and introducing new 
technologies in agriculture, and investing in the rural areas. 
In Latin America, they did not invest in the rural areas and as 
a result of that there is a gross imbalance between the rural 
areas in Latin America and the cities, like two different 
countries. That is not true in Asia.
    I just want to also point out that since 1980 we have 
calculated in the developing world that 50 percent of the 
improvement in productivity in agriculture is the result of 
improved seed technology. Our research scientists have produced 
improved seed that has dramatically revolutionized agriculture 
in many third world countries.
    We believe that investing heavily in these seed 
technologies can make great progress, not the end to all 
problems, because you have to connect production to markets--
you know, if you grow more food and the prices are wrong, 
farmers are not going to grow more food in the future. One of 
the causes of the complex food emergency that we are 
experiencing in Ethiopia is bad economic policies in the 
region--restrictions on trade, for example. Farmers grew more 
food 2 years ago, prices collapsed, they could not sell their 
food, and as a result many of them were in deep financial 
trouble because they had borrowed money to buy seed and 
fertilizer. They said: We are not doing this again; we are 
going to only grow enough food to survive; we are not growing 
any surpluses.
    That is when we had the crop failures. It was not just 
because of drought. It was also because of economic policies 
and lack of free trade in East Africa.
    So we believe investing in these technologies can make a 
huge difference, and we do appreciate the support of the 
committee between 2002 and 2003. There were constraints on us 
for 2004, but agriculture is very, very important.
    I might also add that there is a perception that it is only 
the large lumber companies that are destroying the rain 
forests, the Congo rain forest for example or the Amazon, the 
big companies. That is not the case. Slash-and-burn agriculture 
is widely used in the developing world by farmers who have 
completely exhausted the nutrients in the soil because they 
have no fertilizer, no improved seeds, and they are so poor 
they simply burn down more forest to grow food.
    It is a direct connection between sustainable agricultural 
development and sustainable environmental programs. They are 
connected to each other, and if you get peasants to be more 
prosperous and their incomes go up and you do the program 
right, you can do a lot for the protection of environmental 
diversity in the developing world.
    With respect to famine in Africa, we are facing a 
catastrophic situation in Zimbabwe. That is entirely manmade. 
It is made by Robert Mugabe, who leads a predatory, tyrannical, 
and corrupt Government that is wreaking havoc on Zimbabwean 
society. That is a manmade event. There was a drought, but in 
fact even with the drought there did not have to be any food 
insecurity in that country at all because half of the 
agricultural system was irrigated. It was large farms, it was 
irrigated, and the irrigation reservoirs were full. But because 
he confiscated the land and did not have anybody competent to 
run the farms, the farms did not produce any food. They would 
have produced food even in a drought because of the irrigation 
systems.
    Now the abuses in Zimbabwe are getting so horrendous that 
society is beginning to break down, and there is hyperinflation 
on top of it developing.
    The other place we face an emergency is in Ethiopia. The 
U.S. Government began last September stepping up to the plate 
to what was a fast onset famine, which normally does not take 
place. Usually we have advance warning. The Ethiopian 
Government did not get it and we did not get it and the 
international agencies did not get it.
    Why is that? Because we did not realize to what degree the 
Ethiopian people were vulnerable from the last drought and 
famine in 1999. They did not recover from it. They were 
impoverished by it and as a result they were right on the edge 
of catastrophe when this latest crop failure took place because 
of the drought in the eastern part of the country.
    We have pledged now 808,000 metric tons of food to 
Ethiopia. Walter Kansteiner was with Prime Minister Melis 
yesterday and he said there would be millions dead now but for 
the intervention of the United States. Fifty-five percent of 
all the food that went in this calendar year came from the U.S. 
Government, 55 percent.
    I do not want to go into the other donors. The British have 
been extremely generous. Between the British and the United 
States, we are leading the response. It is not just food, 
because in a complex food emergency you also have to immunize 
the kids because a lot of kids get malnourished and die of 
measles. Measles epidemics are one of the most severe 
challenges we face in famines, because when the human body 
becomes malnourished the immune system breaks down and you die 
of things like measles that most kids would not die from.
    So we have got to do immunization campaigns. Water has 
deteriorated because of the drought. So there are a set of non-
food interventions that we are now undertaking. There is a 
Disaster Assistance Response Team in the country right now. 
They will return next week and we will continue to step up the 
response.
    I want to add, Senator, if it were not for you and other 
Members of the Senate adding funds for food aid into the 
budget, we would not have the resources we need. I want to 
thank the Senate for at exactly the right time giving us the 
resources we need to increase our pledges to Ethiopia. I 
promised Prime Minister Melis in January when I was there we 
would not abandon the country and we have not done that. We 
have been the leaders, and I think there are comments in Europe 
about this now, about the fact the United States is there and 
continental Europe is not.
    Senator DeWine. Thank you.
    Senator McConnell. Senator Landrieu.

             OPENING STATEMENT OF SENATOR MARY L. LANDRIEU

    Senator Landrieu. Thank you, Mr. Chairman.
    Director Natsios, I appreciate the comments. Could you be a 
little bit more specific about the current status of women both 
in Afghanistan and Iraq? I understand that this is a 
particularly difficult and complex situation, but one that, as 
you can imagine, is crucial to the development of any 
democracy. You touched on it in your statement, but could you 
take a moment to just elaborate further on your focus and goals 
and what progress we are making?
    Mr. Natsios. With respect to Afghanistan, as you know, the 
Taliban treated women in a deplorable way. Our goal has been to 
raise the status of women within Afghan society, though I have 
to tell you it is not us who are raising. They are raising 
themselves. We are simply assisting the process. We have funded 
a series of women-run newspapers in--not Baghdad--in Kabul that 
connect the professional women of the city together, and we are 
hoping to extend this to other areas of the country.
    The second thing is, the first ministry we rebuilt was the 
women's ministry. The roof had been blown off the building and 
we put a new roof on and brought office equipment in so that 
they could have a functioning ministry. There is a new human 
rights commission which is led by one of the great women of the 
country, a doctor, and she asked for our assistance in staffing 
and we have provided technical assistance to her commission on 
the human rights issues in Afghanistan.
    The third point I would make is the way in which the status 
of women can be improved in Afghanistan as well as many other 
countries is through the education system. We made a deliberate 
decision early on to invest heavily in educational development. 
Two-thirds of the teachers in Afghanistan before the Taliban 
were women. So we began a very aggressive campaign to train 
teachers, many of whom only were literate. They were the 
literate people in the village. They were not trained as 
teachers. Many of them do not have college degrees.
    So we trained them in how you organize a lesson plan and 
how you use the books we printed. We printed books, half in 
Dari, half in Pashto, the two major languages, for all the 
major subjects from grades 1 through 12. We have printed 
already 15 million for the back-to-school campaign last year. 
They were so successful, the minister of education asked us to 
make this the permanent curriculum of the country and they have 
become; and to print another 15 million, and they were printed 
recently and they are on a ship now and will arrive shortly for 
school.
    There were very few girls in school prior to the Taliban, 
so what we did was we just allowed kids to go back to school 
and then found out where the rates of girl returns were the 
lowest and we have provided a vegetable oil subsidy for 
families who regularly send their girls to school. We have got 
the rate up to about a third now. In other words, it is not 50-
50, what it should be; it is two-thirds, one-third, but it is 
better than zero, which is what it was before in many years.
    That subsidy of vegetable oil is nutritionally useful. It 
is fat content for the diet. But it is on top of their regular 
ration, and in villages that are agricultural people love it. 
It is very valuable. So we are noticing that this incentive is 
having the effect of making sure the girls stay in school, 
which is very useful.
    Senator Landrieu. I appreciate that. Comment really quickly 
about Iraq, if you would?
    Mr. Natsios. Women had a much higher status in Iraq. Iraq 
is probably the most secularized country in the region. This 
was an urbanized society. Seventy percent of the people live in 
cities. It was one of the most sophisticated and educated Arab 
societies prior to the mid-1980s when the Iraq-Iran War started 
the downward slide of the country.
    It actually had a much higher rate of female literacy. The 
rate of literacy now has dropped dramatically in the last 15 
years for women in high school. There are girls in grammar 
school, there are not in high school. I do not remember the 
exact statistics, but I was shocked at how low the high school 
girl rate of participation was.
    Our intention is to have an aggressive campaign. A lot of 
the money we will be spending will be rebuilding, we expect, 
rebuilding or reconstructing about 6,000 schools. We have given 
grants to UNICEF to do the curriculum. There were some concerns 
we were writing all of the textbooks at AID.
    But there is going to be an effort to make sure that there 
is an equitable distribution of seats in those classrooms for 
girls, because that is an important part of society. There is a 
problem in Baghdad right now because security in some 
neighborhoods, where parents are not sending their girls 
because they have been abducted by some of these criminal 
gangs, and so the rates have gone down in Baghdad. But we are 
getting them up, we are getting them back up, in the areas that 
are now secure.
    Senator Landrieu. Well, I appreciate those comments, 
because there are a number of us, and not just the women 
Senators, although we remain very focused on this, who are 
committed to the idea that one of the great and most 
substantial long-term development improvements we can make is 
providing an excellent education both for boys and for girls. 
We must try to get children and people back into education, and 
particularly focus on the women as students and teachers. So we 
appreciate that.
    Mr. Chairman, if I could make just one comment, not a 
question, because my time is out. But Mr. Natsios, please 
review the work that some of us are doing to establish a 
permanent trust fund for the oil revenues in Iraq. This is 
important if we wish to communicate in a very concrete way that 
Americans, and hopefully our coalition partners, understand 
that this resource belongs to the people of Iraq. We want to be 
part of helping establish a framework under which those 
resources can be used to build this country out of the chaotic 
situation to a very bright future.
    There are many different models, none of which is perfect. 
Alaska has a good model; Louisiana has a smaller, different, 
but effective one; Texas has had a model; Kuwait has yet a 
different model. There are models around the world that could 
be looked at.
    The chairman of this committee has indicated an interest in 
this and we are working on the exact mechanism, but I would 
appreciate your consideration of that idea. Any comments 
briefly you might have?
    Mr. Natsios. If I could just respond to that, Senator. We 
share completely your objective and the objective of other 
Senators on the education front, not just in Afghanistan or 
Iraq but around the world. In fact, we have increased the 
education budget, primary education, by 100 percent in the last 
2 years with your support. We do appreciate that.
    But AID got out of the education business and out of the 
agriculture business in the 1990s and now that money is 
beginning to increase for those two areas. We know, for 
example, that among farmers who are women in Africa that a 
sixth grade education with no additional inputs will 
dramatically increase agricultural productivity. So education 
has a lot of side effects. It also has an effect on child 
mortality rates, has an effect on lots of things.
    So it is very desirable, very desirable that we invest more 
money, particularly in primary, but also in high school 
education.
    With respect to the trust fund, the person in charge of 
reconstructing Iraq for the United States is Ambassador Bremer. 
We are very comfortable having him there because in every 
country in the world in which we have an AID mission we report 
to an ambassador and Jerry Bremer was a career officer and head 
of Kissinger Associates, and he is a very good manager.
    He understands AID. One of his division directors is Lew 
Lucke, our mission director. Another is headed by Peter 
McPherson, who was the AID Administrator from 1981 to 1987. So 
Dr. McPherson knows AID well. He is a former Deputy Secretary 
of Treasury and one of my best friends in this business, and he 
is the head of the economics section.
    So we have people who are advising----
    Senator McConnell. Is he over there now?
    Mr. Natsios. He is there now.
    Senator McConnell. Did he resign as President of Michigan 
State?
    Mr. Natsios. He took a leave of absence from Michigan State 
until September. We are hoping it lasts beyond September 
because we are so pleased he is there.
    But the trust fund is something that we not only endorse, I 
think there is comment on the idea in the resolution that went 
through the United Nations on reconstructing Iraq. The Pentagon 
is in charge of creating that and if they want our help in 
anything we will certainly give it to them.
    But Ambassador Bremer is in charge. We report to him. We 
are very comfortable with that. We are very happy with the way 
things are moving in terms of the structure, organizational 
structure. He is providing a lot of leadership.
    Senator Landrieu. Thank you.
    Senator McConnell. Thank you, Senator Landrieu.
    Senator Bond.

            OPENING STATEMENT OF SENATOR CHRISTOPHER S. BOND

    Senator Bond. Thank you very much, Mr. Chairman.
    Mr. Administrator, I would like to go back to follow the 
line of questions that Senator DeWine asked. I very much 
appreciated your comments on agriculture. We have talked about 
this many times. I believe the old saying that a well-fed 
person has many problems, but a hungry person has only one.
    With all the problems you have got on your plate, hunger is 
still one that we are very much concerned about, and successful 
agriculture development. Just to share with you, a couple weeks 
ago I had in my office a cotton farmer from South Africa, Mr. 
T.J. Butalesi. He said he had spent 40 years growing cotton 
with hard work and poverty. He said 3 years ago, despite Earth 
First and Greenpeace, he planted his new genetically improved 
cotton seed. He has more than doubled his yield. Instead of 
spraying pesticides 10 times, he has sprayed 2 times. He said 
he is now working smart rather than hard. He just built a new 
brick house and his neighbors think he is the best farmer in 
the region.
    I very much appreciated your coming to St. Louis last year 
to visit the Danforth Plant Science Center. As I think we 
discussed, there they are working with Ugandan scientists, the 
International Institute of Tropical Agrobiology and NGO's to 
develop an exciting new approach to block out the Africa 
cassava mosaic virus which is wiping out cassava crops, a 
staple in most African diet.
    I believe that you are working field trials with this. How 
is that project going? What outcome do you expect to have from 
it?
    Mr. Natsios. I agree with everything you said, Senator. I 
want to tell you, one of the highlights of my domestic trips 
was the trip to the Danforth Center. It was quite an 
extraordinary place and we are very pleased it exists and they 
can be partners with us.
    During the Johannesburg Summit, where this whole issue of 
GMO grain came up for the first time, I had dinner with the top 
GMO scientists in the universities of South Africa. These are 
South African scientists now, developing seed for South Africa 
and African farmers. It was extraordinary.
    One of the women scientists was telling me they are 
developing a new seed variety using genetic material that does 
not require almost any water. They grow almost in rock or 
desert conditions. They are going to put that into corn and it 
could deal with one of the recurring problems we have in 
Africa, which is drought.
    I said: I want to know as soon as you have research in from 
the trials on it whether this is going to be the success that 
you think. She was so excited about it. She has been sending me 
some of the material on it. We are helping to support that 
research through the suggestions you have made in the budget, 
which we strongly support continuing.
    So they have extended this GMO material to white corn--
white maize--which we do not grow much of in the United States, 
but which is a staple crop in South Africa. In some areas the 
farmers have gone from $1,000 per capita income to $10,000 
because of these improved varieties. It is not just in cotton; 
it is also in maize that this is developing. It is quite 
extraordinary.
    Senator Bond. I very much appreciate the strong stand you 
have taken in promoting improved food and agriculture through 
the use of modern biotechnology, and I believe that the 
President has stated very forcefully his policy. I thought you 
might--I would like to get an update. I heard you were rather 
clear in your warnings to certain African officials who were 
allowing Eurosclerosis, the European Luddites, to prevent the 
use of the fine genetically improved food that all of us here 
eat every day. They were refusing to feed that to the hungry 
people in their country.
    I think you made--did you make some fairly clear warnings 
to them? What is happening with that? How are we doing with the 
Eurosclerosis?
    Mr. Natsios. I will try to be a diplomat here, Senator. You 
have a little bit more freedom than I do to characterize things 
clearly.
    People were shocked when I said, the President eats and all 
of us eat our cereal in the morning and it is GMO and it has 
been for 7 years, especially if you eat Corn Flakes. And they 
looked at me, and I said: My children eat it, and there has not 
been one lawsuit in the United States, and we are a very 
litigious society, over anything, any health risks from GMO 
corn in the United States.
    It really is outrageous what has happened. I am so 
disturbed after 7 years, 7 years of distributing this food aid 
in countries around the world, that the groups that cause the 
trouble, these groups that you mentioned earlier as well as 
others, did it in the middle of a drought that was turning into 
a famine, in the middle of the Johannesburg Summit. They 
deliberately chose the middle of a food emergency to do it. I 
mean, 7 years we have been distributing it and no one said 
anything. And I mean, it was not exactly a secret that we have 
been using GMO as a central part of our agriculture for years.
    This is a trade issue. It is not a scientific issue. It is 
not an environmental issue. In fact, it is damaging the 
environment not to allow this technology to deal with these 
environmental problems in the developing world. Most countries 
in Africa cannot afford all these expensive inputs. This is one 
way of them dealing with pesticides, herbicides, and 
fertilizers that they cannot afford. This is why they cannot 
get their productivity up, but they can through improved 
varieties and through scientific research of the kind that we 
have been investing in.
    It is the potential. It is not going to solve all the 
problems because, once again, you got to connect farmers to 
markets, you have got to train people. There are other things 
you have to do. But scientific research and technology is the 
answer to part of our problem in agriculture in the developing 
world. I believe genetic research, GMO research, can be one of 
the great boons to agricultural development and to the 
alleviation of poverty in the developing world, particularly in 
Central Asia and in Africa, where the greatest poverty is in 
the rural areas.
    Senator Bond. Thank you very much, Mr. Administrator. That 
is excellent.
    I would just conclude, Mr. Chairman, by saying I thought 
somebody from the U.S. Government warned leaders in the African 
country if they refuse to feed their people the kind of food 
that we eat every day because it is genetically modified that 
they would haul them up before the World Court on genocide 
charges. I do not know who that was.
    Mr. Natsios. Well, I do not repeat some things I say.
    Senator Bond. I do not remember who that was, but I thought 
that was a nice subtle touch.
    Senator McConnell. It was indeed.
    Senator Burns, top that.

               OPENING STATEMENT OF SENATOR CONRAD BURNS

    Senator Burns. That is pretty easy.
    Thank you very much, Mr. Chairman. Director, thank you for 
coming today.
    I want to not follow up on what Senator Bond said because 
in Montana we have some of the foremost plant breeders and 
livestock growers that can increase gene pools around the 
world. I have a young man coming from Georgia, the Republic of 
Georgia, to the United States this spring. In fact, he will be 
in to see me not too long from now. We are talking about 
increased agricultural production in Georgia, which they have 
every right to expect that country to produce. He is the 
minister of agriculture and he is very forward-looking, but he 
is running into some of the same problems that we ran into down 
in Africa.
    But I want to ask you about another subject. In the 
rebuilding of the infrastructure in Iraq, there are a couple of 
things, and you hit upon one: how surprised they were about the 
Internet. We know right now there are only about three phones 
per every 100 citizens in Iraq. There is no wireless system, 
and for all those systems and the infrastructure--there are 
very few computers, of course.
    We know that the infrastructure was formerly mostly 
controlled by the military and the Government in power. The 
Government controlled it and then whenever we took out their 
communications systems we also took out the core of the 
civilian systems also.
    Right now about two-thirds of the 800,000 lines for the 
hard-wired infrastructure are there in working order. They only 
can talk to people in their local exchanges. There are hardly 
any long distance calls at all that are not wireless.
    So I am of the understanding that we cannot be very 
successful in what we want to do over there unless we have got 
a very, very strong communications system. That is part of the 
building blocks, no matter what we do in agriculture. We know 
that Iraqis have the ability to feed themselves. I mean, they 
have some very good land. They have two great rivers that can 
provide irrigation and they also have a soil base that is 
probably as good as any in the Middle East. It is a lot better 
than you'll find in Jordan and would compare to the strongest 
of the Middle East countries. We know something of their 
production.
    I just want to make a point here to you, although I will be 
talking to the people who are in charge. Once we start building 
wireless systems and that need is probably immediate--the 
systems should be interoperable; the systems should be the 
newest of wireless technology that offers broadband access to 
the world Internet. I feel there has not been a priority set on 
the communications system in Iraq. In other words we not only 
want to talk within Baghdad, but we want long distance from the 
green line to Basra.
    I would ask you to remind those that you help when they 
come to you to request aid, that we take a good, strong look at 
what we are building, at how fast we are building it, and at 
the importance of the communications system. That will be the 
overriding infrastructure other than ground transportation, 
which is pretty well taken care of. We were pretty careful 
about that.
    But I really believe, Mr. Director, and this is most 
important, there is no sense starting with an old technology. 
We are trying to get away from them towards something that we 
could apply that would give us high-speed and move a lot of 
information very, very quickly.
    As you have looked at that country, do you have any 
thoughts on what is there and where we should be going?
    Mr. Natsios. Senator, this is a very important question 
because communications is a serious problem in Iraq right now 
for us and for the NGO community, our contractors, U.N. 
agencies, and for the ministries themselves. Many of them 
cannot call the cities from the central ministries in Baghdad. 
We are looking at the issue and we will be putting together a 
set of recommendations very shortly which I think you will be 
pleased with. I do not have anything to announce yet because we 
are still researching the issue.
    There is a provision within the Bechtel contract that was 
written when we wrote it in January--it was not the Bechtel 
contract; it was the work, the RFP that was bid--that calls for 
reconstruction of the existing infrastructure. So there are two 
questions here. One is the land lines, many of which are down 
and need to be repaired. Bechtel will be doing that. That is in 
their contract. There is money aside for doing it and they have 
been ordered to do it. So that is already part of the plan.
    The question is on the wireless part of this and that can 
also be covered in the Bechtel contract. I am not sure that is 
how we are going to do it. We have not looked through that 
entirely at this point. But it is clear there is an issue. It 
has been brought to our attention and we will be acting on it, 
and we will get back to you about the details of that.
    Senator Burns. I would certainly appreciate that. They have 
hardly any fiber at all that carries their long distance wired 
lines or trunks, even in the urban areas. So that is one of my 
things. It applies not only to the way we do agriculture, but 
it also does what you want to do. In addition, it plays a huge 
role in education, for schools in remote areas, especially in 
the use of wireless technologies for distance learning.
    We have the technology to move fairly rapidly in the 
rebuilding of our education infrastructure, which is what we 
are going to do. So I appreciate your answer on that. I 
appreciate your concern. I look forward to visiting with you on 
some of those systems, because I take a very strong interest in 
that. We come from a remote State, so we know how large a role 
that communications plays in the economic development of our 
States.
    I thank the chairman. I do not serve on this particular 
Appropriations subcommittee, but he did tell me that I could 
make this little statement and I appreciate that very much.
    Senator McConnell. Glad to have you here, Senator Burns.
    Let me just mention, this hearing is going to end no later 
than 3:30. It may end sooner, but we will leave the record open 
for whatever questions any members want to add.
    Let me take another round here, Mr. Natsios. Shifting to 
the place the President just left--the Middle East--and the 
road map between the Palestinians and the Israelis, how will 
USAID be utilized to support the road map? What has USAID been 
able to do there in the past, and how you are able to implement 
and monitor programs, particularly on the Palestinian side, to 
ensure that funds do not end up in the hands of those who are 
engaged in homicide bombings?
    Mr. Natsios. Thank you, Senator. We of course have a heavy 
presence in the West Bank and Gaza, but since the second 
intifada began we have altered our program and much of it now 
is humanitarian assistance because we simply cannot continue 
under these circumstances some of the programs, although I have 
to tell you an interesting story. Two days before I was sworn 
in as Administrator, I met the foreign minister of Israel at a 
reception, Mr. Peres, in Washington. The first thing he said 
before I could introduce myself was: I know you are Andrew 
Natsios, you are about to be sworn in as the Administrator; do 
not touch the water programs, please. I said: Yes, sir.
    I met him later at a dinner in the evening. He said exactly 
the same thing. He said: I know I said this to you once before. 
Let me say it to you again: Do not touch the water programs. I 
said: Yes, sir.
    There is common interest in some things that cut across the 
conflict and the acrimony and water is one of them because it 
is so scarce. The water programs AID was running are these huge 
water purification plants that will rationalize the water 
system in the West Bank and Gaza. But, of course, they all get 
their water from the same place Israel does, which is the 
underground aquifers or from desalinization plants, which we 
are also constructing I think one of in Gaza.
    So to the extent that we have been allowed by the violence, 
we have continued these important programs. We do not go 
through the PA for any of the work we do. We do not transfer 
any money. The one thing we are doing now----
    Senator McConnell. It is 100 percent NGO, right?
    Mr. Natsios. That is correct.
    There is one project we are working on now, and this was at 
the request of both the Israeli and the Palestinian Authority, 
and that involves providing the PA finance ministry with modern 
systems of accounting and accountability and auditing to ensure 
in the future that they have the skill set to monitor how money 
is spent by some of the ministries. We have a major 
international accounting firm that is providing this training, 
and it is connected to the whole question of revenues being 
collected by the PA and by the Israeli Government.
    So there was an agreement struck and AID is playing a role 
in making--in implementing one of the few agreements that was 
made prior to this past week. It was at a mundane level, but 
both sides agreed to it, we were asked to do it, we have done 
it, and it is working, I am told, quite well. It is capacity 
building. There is no money changing hands in terms of being 
moved, but there is a training program, a capacity building 
program, which we believe will be very useful over the longer 
term.
    We are looking to the future and we have been asked to 
begin gearing up for changes that will will unfold due to 
advances in the peace process. We believe that the President 
has begun a process that is going to be a success and AID needs 
to be ready as soon as an agreement is reached to give legs to 
the peace accords from our perspective.
    We have a limited role in this, but we do have a role, and 
we have to act quickly because the longer you wait the more 
risk there is in terms of the peace settlement coming undone. 
This happens in conflicts all over the world, where if we do 
not act quickly following a peace settlement things 
deteriorate.
    Senator McConnell. So you are not expected to be asked to 
do anything different; just more of the same and quicker?
    Mr. Natsios. Well, we may be asked. There may be things in 
the peace accord, Senator, that are different than they have 
been in the past. So I do not want to presume what we will be 
doing because it may be that they actually negotiate some of 
these things.
    Senator McConnell. Senator DeWine.
    Mr. Natsios. I just want to say, I work for Colin Powell. I 
go to the morning meeting every morning at 8:30, and this is an 
issue of intense interest to him, Rich Armitage, my good 
friend, and Secretary Grossman. And we do what they ask us to, 
enthusiastically and energetically, and we will continue to do 
that.
    Senator McConnell. Well, I have a number of other questions 
about various parts of the world, but I am going to restrain 
myself. Let me end by telling you I ran into a young friend of 
mine in the airport in Louisville on the way back to Washington 
last Sunday. He was on his way to Bosnia. He works for the 
World Bank, and he was extremely complimentary of your efforts, 
the efforts of your agency in Bosnia. He was extremely 
complimentary of the USAID effort and I thought that I would 
pass that along to you because you probably do not hear as many 
compliments as you do criticisms from Members of Congress.
    Mr. Natsios. Senator, if you could get me his name so I can 
take him out to dinner next time I visit Bosnia, I would 
appreciate it.
    Senator McConnell. I will do that.
    We thank you very much for being here today and we will 
look forward to drafting your budget for next year.
    Mr. Natsios. Thank you, Senator, for your support. We do 
appreciate it.

                     ADDITIONAL COMMITTEE QUESTIONS

    Senator McConnell. There will be some additional questions 
which will be submitted for your response in the record.
    [The following questions were not asked at the hearing, but 
were submitted to the Agency for response subsequent to the 
hearing:]
             Questions Submitted by Senator Mitch McConnell
                      other donors in afghanistan
    Question. Have contributions from other donors kept pace with 
needs? What have Middle Eastern countries provided?
    Answer. Like the United States, a number of donors have disbursed 
more than they pledged, including the United Kingdom, Japan, the 
Netherlands, Denmark and Australia.
    Contributions from the Middle East have been less generous and 
slower in disbursement.
              accountability of assistance in afghanistan
    Question. How is USAID ensuring that assistance to Afghanistan is 
being used for the purposes intended? Are regular audits conducted?
    Answer. Given the security strictures in place for U.S. Government 
employees in Afghanistan, it is challenging for USAID staff to directly 
monitor all of our programming.
    In order to address this constraint, USAID has a Field Program 
Manager, whose job it is to travel around the country with the U.S. 
military for project monitoring and oversight.
    USAID has also placed Field Program Officers in each Provincial 
Reconstruction Team (PRT) to help with this critical function. On the 
Kabul-Kandahar-Herat highway project, USAID has requested a concurrent 
audit by our Inspector General.
    In addition, our Inspector General (IG) is also monitoring USAID's 
economic governance contract.
                        elections in afghanistan
    Question. How can the international community ensure that the 
elections are credible and reflect the will of the people--is more time 
needed to prepare?
    Answer. Successful implementation of the Bonn Agreement, including 
the June 2004 elections, is a high priority for the USG.
    We are working closely with the United Nations and other donors to 
ensure that adequate funding is made available on a timely basis for 
the elections process. Voter education and registration are immediate 
priorities.
    We are encouraging the establishment of an independent Afghan 
electoral management body, the approval of an electoral law (through 
the constitution or interim measures), and either a political party law 
or regulations that permit an enabling environment for political 
parties or movements to form, organize and participate in the election.
    The USG is providing technical support for elections processes, 
aiding the development of democratic political parties and coalitions 
of reform-minded political parties and movements, as well assisting 
civic/voter education.
    Question. What is the international community doing to ensure a 
stable and secure environment for the proposed polls?
    Answer. Security is a serious concern for all activities related to 
the elections process.
    We are working with the Afghans, the United Nations and other 
donors to determine how best to address security concerns leading up to 
and immediately following elections.
             women's political participation in afghanistan
    Question. What programs is USAID supporting to increase political 
participation of women?
    Answer. SAID believes the Afghan Ministry of Women's Affairs (MOWA) 
provides a voice within the government to advocate for increased 
political participation for women in Afghanistan and, accordingly, has 
provided support for MOWA. USAID has also assisted NGOs working to 
increase women's political participation.
    Ministry of Women's Affairs.--This was the first Afghan Ministry to 
receive USAID assistance. USAID assisted in the physical rehabilitation 
of the Ministry of Women's Affairs (the auditorium and 11 offices) and 
provided the Minister with a vehicle, office furniture and supplies, 
two computers and a satellite phone. USAID's Gender Advisor provided 
extensive assistance in helping the Ministry develop its first National 
Development Budget recently. (Total activity funding: $178,718)
    The NGO, Afghan Women's Network, is providing returnees with job 
skills, including managerial training, and training women to 
participate in the political process. (Total activity funding: $27,352)
    The NGO, AINA, provided support to Afghan women filmmakers to make 
a film on the experience of the Afghan woman during the Taliban period 
and their hopes for the future. (Total activity funding: $97,110)
    USAID is supporting the Constitutional, Human Rights and Judicial 
Commissions to ensure that women's concerns are taken into account.
    USAID is supporting a number of programs oriented at civil society 
groups which will work to include women as well as minority groups into 
the political process. In addition, there will be targeted NGO-
implemented programs working out of the women's centers which will 
direct attention to this issue. USAID also supports to the Human Rights 
Commission.
    USAID, through the International Foundation for Election Systems 
(IFES), is advising the Afghan Government and the United Nations on 
needs for women's registration and voting.
    USAID, and its partners, the International Republican Institute 
(IRI) and National Democratic Institute (NDI), are ensuring that women 
are recipients of education in the voter education process and 
encouraging women to join political parties and movements, and for 
parties and movements to include women.
                          iraq reconstruction
    Question. How do the ground realities in Iraq today differ from 
your pre-conflict expectations and how does this impact budgeting--for 
example, do fewer bridges need repair than originally anticipated?
    Answer. War damage was less severe than anticipated, while the 
extent of looting immediately post-conflict and the dilapidation of 
existing infrastructure has been extensive. With respect to 
infrastructure reconstruction, USAID, with guidance from the Coalition 
Provisional Authority, has been prioritizing emergency communications 
repair, power/electricity, and water and sanitation facilities.
    Question. Are press reports on the slow pace of reconstruction 
accurate? In addition to the security situation, what are the major 
obstacles for reconstruction?
    Answer. While the security situation poses challenges for 
reconstruction efforts, the pace of USAID reconstruction activity is 
consistent with and in some cases ahead of the pre-planning estimates 
submitted to Congress in the April supplemental request. A fundamental 
objective of all USAID support is to ensure Iraqi ownership of the 
process and sustainability of efforts, but there is a fear among Iraqis 
that Ba'athist elements could target them in retribution for their 
reconstruction work.
    Question. Are Ba'athist loyalists or Shi'a religious leaders 
actively undermining reconstruction activities?
    Answer. This question is most appropriately addressed to the 
Department of Defense. However, USAID has productively-worked with 
Shi'a religious leaders in delivery of essential services in the 
southern regions and Baghdad.
                                 egypt
    Question. What is your assessment of USAID's democracy and 
governance programs in Egypt?
    Answer. The current democracy/governance (DG) program consists of 
three activities: (1) the NGO service Center, which strengthens civil 
society by providing direct grants, training and technical assistance 
to NGOs aimed at improving their internal governance, financial 
accountability, and advocacy skills; (2) the Administration of Justice 
(AOJ) project, which modernizes commercial court administration and 
expedites case processing through computerization, re-engineering, and 
training of judges; and (3) the Collaboration for Community Services 
project which, through locally or appointed entities in four pilot 
communities, improves the delivery of public services.
    Proposed new components include: (1) Promote the Rule of Law 
through civil and criminal court reform and human rights activities 
such as revitalization of the legal education in Egypt, English as a 
second language training and support for NGOs that provide legal 
services to poor and disadvantaged citizens; (2) Promote Reform of the 
Egyptian Media by sending 50 journalists to the United States for 
training; (3) Support to the Embassy's Public Affairs Section to put on 
study tours to the United States and region to foster an enabling 
environment for economic, education and social reforms; (4) Support the 
Creation of an Independent Egyptian Council on Human Rights to ensure 
the adherence to human rights by receiving and investigating complaints 
and acting as a mediator, commenting on legislation involving human 
rights and ensuring that Egypt adheres to international human rights 
agreements; (5) Support the Egyptian Branch of Transparency 
International to combat government and corporate corruption by 
organizing citizen ``watchdog'' groups and, GOE cooperation permitting, 
assisting the GOE in establishing a government-wide code of ethics; and 
(6) Support Parliamentary 2005 Elections if GOE concurrence can be had.
    Question. Can you point to any specific achievements of these 
programs?
    Answer. AOJ successes include: Case processing time has been 
reduced from years to months; public confidence in the judiciary is 
increased; the Ministry of Justice has demonstrated its commitment to 
judicial reform through its massive investments ($50 million) for 
upgrading courts and providing judicial training; and building 
constituencies among judges, lawyers and court staff to support 
judicial reform.
    NGO Service Center successes include the promotion of political and 
legal rights for women in Qena governorate where a local NGO received a 
grant to assist 2,000 women obtain civil documents, and 1,200 women to 
obtain electoral registration cards and access social insurance 
benefits. More women have since petitioned local party official to 
nominate increased numbers of women for positions on local councils and 
to form a committee to promote women's awareness of their legal rights 
to obtain available services from government agencies. Another example: 
The village of Tablouha had long-suffered from poor environmental 
conditions and disease due to lack of systems for solid waste and 
garbage disposal. With USAID project assistance, a local NGO organized 
a public hearing attended by 700 residents to discuss these needs. The 
hearing resulted in two important decisions for the community: to use 
both the Village Council's and an agricultural cooperative's clean-up 
equipment to collect garbage and solid waste and to collect a monthly 
fee from 550 local inhabitants to ensure sustainability of the service. 
The fees have been used to purchase and plant over 1,000 trees in the 
area.
    CCLS: Two industrial communities that contribute significantly to 
Egypt's exports have improved their community level services. An 
employment services office and websites to promote the communities and 
their industries have been created there. The city of Dumyat is a major 
manufacturer and exporter of furniture. Manufacturers and small 
workshops have expanded their market to the United States and Europe by 
collaborating amongst themselves and with government to gain access to 
services that will help them be more competitive by improving 
marketing, designs, and quality control.
    Question. What action is USAID undertaking to ensure that its 
programs are not unduly influenced by the Egyptian Government?
    Answer. USAID maintains dialogue with the GOE concerning democracy 
and governance emphasizing: (1) USG commitment to significantly expand 
funding in this area; (2) general themes around which we propose to 
focus programming; (3) illustrative examples of the types of programs 
we propose in each area; and (4) the need to rethink funding mechanisms 
to reflect the changing nature of our assistance in this area. The USG 
is also committed to reach more Egyptians at the grassroots level and 
to implementing more activities through NGOs.
    A U.S. inter-agency group agreed that USG projects should parallel 
directly our policy approach to the GOE. For example, we should fund 
projects that are consistent with the need to open political space for 
new parties. The inter-agency group also agreed that the Embassy/USAID 
should lay out the following themes and related indicative projects 
with the GOE as primary areas of emphasis in democracy and governance 
in Egypt: political openness; media and exposure to outside views; 
civil society; and rule of law and governance.
                                 burma
    Question. How closely is USAID--and its contractor--coordinating 
HIV/AIDS programs with Suu Kyi?
    Answer. USAID's HIV/AIDS program was designed in close coordination 
with the U.S. Embassy in Rangoon. When the program was designed USAID 
met with representatives of the National League for Democracy (NLD) and 
other democratic opposition groups. Comments and suggestions from the 
groups were incorporated into the program design. The representative 
visited one of the project sites and liked the work that was being 
implemented. USAID continues to work closely with the U.S. Embassy and 
to seek NLD guidance on the program.
    Question. Given Burma's repressive environment, how does USAID 
ensure oversight of the use of funds inside Burma?
    Answer. USAID-managed programs inside Burma are currently limited 
to: (1) activities that enhance the ability of the American Center in 
Rangoon, within the U.S. Embassy, to reach out and provide some 
training and materials on democracy and human rights issues to members 
of Burmese democratic organizations; and (2) HIV/AIDS prevention and 
treatment. Activities to reach out to democratic opposition groups are 
carried out under the supervision of the U.S. Public Affairs Office in 
the Embassy. HIV/AIDS activities are implemented by organizations with 
whom USAID has worked for many years. These organizations have 
developed, and discussed with USAID, monitoring plans that ensure 
adequate oversight of their programs. In addition, USAID has made 
periodic site visits to monitor program activities. USAID has recently 
opened a Regional Development Mission in Bangkok to better manage and 
oversee activities in the region.
    Question. As the generals in Rangoon do not let foreign NGO workers 
travel unaccompanied throughout the country, how do these NGOs ensure 
oversight of their programs?
    Answer. USAID's experience from site visits to HIV/AIDS programs 
inside Burma has been that in many areas NGO's have relative freedom of 
movement and are not subject to government interference in their 
programs. USAID-funded NGO's have consistently reported that they are 
able to work with relative ease in many areas of Burma. Conditions vary 
greatly within Burma, and NGO's with whom we work choose areas where 
adequate program oversight is possible.
                                cambodia
    Question. With parliamentary elections scheduled for July 2003, how 
confident are you that the elections will be free and fair?
    Answer. We feel that this will be difficult to judge at the present 
moment. While we are confident that the Cambodian people would really 
like to have a free and fair election it is really too early for them 
to tell at this point--and thus it is difficult for us to know as well. 
The elections will be determined to be free and fair IF the Cambodians 
feel that the process was valid and that the results indicate what was 
actually voted. In truth, this will not be determined until several 
days after the polls close--we therefore hope Washington is wary of any 
reports immediately after the election.
    Question. Would USAID support increased assistance to Cambodia if 
the repressive Cambodian People's Party (CPP) was no longer the ruling 
party?
    Answer. We would welcome increased assistance as Cambodia has 
enormous needs and the Cambodian people could benefit greatly from 
increased assistance in areas such as education, health, democratic 
development, economic growth and employment, environment, and anti-
trafficking in persons.
                   security and elections in cambodia
    Question. Cambodia is a case study of the long term development 
challenges that arise when substandard elections are held after years 
of turmoil. How do you assess the current security environment in 
Afghanistan, and how might security impact the 2004 elections?
    Answer. Election security is a serious concern that could impede 
the conduct of free and fair elections.
    If not adequately addressed, regional populations may be inhibited 
from organizing into parties or movements, campaigning, attempting to 
register and voting their conscience. We are working with the Afghans, 
the United Nations and other donors to determine how best to address 
security issues.
                               indonesia
    Question. What specific programs are being supported to counter 
extremist influence throughout the country?
    Answer. USAID's support for moderate groups long predates 9/11; 
USAID programs have provided support to moderate groups responding to 
emerging social issues, voter education including the 1999 election 
process, and women Muslim groups. Since 9/11, USAID programs to counter 
extremism in Indonesia have expanded and include work on promoting 
religious tolerance through the Islam and Civil Society Program, on 
strengthening local government management of education so that public 
schools can become better alternatives to private religious-based 
schools, and on helping Indonesia to establish a legal and policy 
environment that disrupts material support for terrorists. The three 
current programs USAID supports are:
1. Islam and Civil Society Program (ICS)
    Implementer: The Asia Foundation (with 30 Muslim Partner 
Organizations)
    Timeframe: 1997 to 2004
    Funding to date:$4,900,000
  --The ICS supports the efforts of 30 moderate Muslim organizations to 
        directly counter religious extremism and promote 
        democratization through Islamic teachings and texts in four 
        main areas: gender, media, education policy and political 
        parties.
  --Moderate Muslim groups supported by this program have played an 
        increasingly public and vocal role in calling for tolerance and 
        peace during critical periods of time such as the recent 
        military action in Iraq.
  --Education programs are based upon the premise that Islamic 
        militancy thrives on lack of knowledge and understanding of how 
        Islamic principles support democracy, tolerance, gender 
        equality, pluralism, and rule of law. Education on these 
        principles and on tenets of secular democracy and civil society 
        is an effective tool in preventing/countering militancy.
  --ICS education programs work through two main channels--formal 
        institutions of higher education, and informal programs 
        conducted in pesantren (Islamic boarding schools) or campus 
        groups. ICS-supported media programs are directly aimed at 
        countering visibility of militant Islam within the public 
        media.
    Program examples and results include:
  --New civic education curricula focused on the rule of law, citizen 
        rights and gender equality are now being implemented in 47 
        affiliates of the Islamic National University, Jakarta and in 
        six University of Muhammadiya, Yogyakarta universities (to be 
        expanded to all 35 in September 2003). 40,000 students a year 
        take this required course.
  --The Institute for Research and Pesantren Development, Makassar has 
        developed a civic education curriculum and textbook countering 
        rigid Islamic doctrines that marginalize women and restrict 
        religious pluralism, to be piloted in 24 pesantren in South 
        Sulawesi, then integrated into all 2,000 affiliated pesantren 
        in South Sulawesi.
  --Islam Liberal Network, Jakarta explicitly aims to counter militant 
        and radical Islamic movements in Indonesia. They produce a 
        weekly radio talk show on pluralism and tolerance that reaches 
        10 million listeners through a network of 40 radio stations 
        nation-wide, and publish a weekly half-page column in the daily 
        newspaper Jawa Pos and 35 syndicated affiliates, reaching 2 
        million readers with messages of anti-violence, pluralism and 
        religious tolerance. They also maintain a bi-lingual website 
        that actively campaigns against militancy
  --Islamic Education Laboratory, Yogyakarta, a university student 
        group, facilitates routine campus discussions on ``Islam and 
        pluralism'' and civil society building projects among campus 
        groups on six prominent universities in Central and East Java, 
        bringing its message of pluralism and tolerance within Islam 
        directly to target hardline student populations.
  --Study-Action Group on Indonesian Democracy/Institute for Human 
        Resources Development, Jakarta--these two organizations both 
        work directly with khotib (Mosque preachers) and mosque youth 
        groups to promote messages of pluralism and tolerance. One 
        produces a bulletin handed out by mosque youth groups to 
        worshippers after Friday prayers. The other trains Khotib, who 
        preach at the Friday prayers, and provides them with a 
        ``preachers' handbook'' of ``sermons'' on rule of law, civil 
        society, and religious tolerance.
  --Paramadina University, Jakarta, has created a handbook entitled 
        ``Islamic Jurisprudence on Pluralism'' for Muslim leaders that 
        references classical and modern Islamic texts and jurisprudence 
        that support pluralism, religious tolerance, and gender 
        equality.
  --Institute for Advocacy and Education of Citizens, Makassar, a 
        grassroots student group, broadcasts an hour-long interactive 
        talk show on five radio stations with a listenership of 1.2 
        million people in South Sulawesi.
  --Syir'ah, Jakarta is a monthly magazine explicitly designed to 
        counter the top-selling Islamic militant magazine Sabili. 
        Syir'ah has the same size, format, cover design, and 
        distribution pattern as Sabili--but a different content. 
        Instead of promoting violence and radicalism, it preaches 
        tolerance, anti-violence, gender equality, and religious 
        pluralism.
2. Economic Law, Institutional and Professional Strengthening (ELIPS) 
        II Program
    Implementer: Nathan-MSI Group
    Timeframe: 2001 to 2004
    Funding to date: $8,400,000
    The ELIPS II provides institutional-building support to strengthen 
independent regulatory commissions, the Ministry of Justice, law 
schools and professional associations, and to provide technical 
assistance in drafting, promoting, passing, understanding, and 
implementing laws, decrees, administrative orders and decisions related 
to financial crimes. Key results to date:
  --ELIPS II assisted the GOI in drafting and passing the new Anti-
        Money Laundering Law enacted in late 2002. Follow-up work 
        includes drafting of implementing regulations and key 
        amendments related to FATF compliance. Additional work is 
        assisting the newly formed Financial Intelligence Unit and 
        addressing cyber crimes. These activities are complemented 
        technical assistance being provided through the Financial 
        Services Volunteer Corps focusing on exposure to the U.S. anti-
        money laundering system.
  --ELIPS II also provided extensive input to the draft Anti-Terrorism 
        law including co-sponsoring a major conference on the Economic 
        Impact of Terrorism.
  --ELIPS II has completed a study and plan for initiatives in 
        financial crimes and completed needs assessments for financial 
        crime unit at the Attorney General's office.
3. Managing Basic Education
    Implementer: Research Triangle Institute
    Timeframe: 2003-2005
    Budget to date: $3,000,000
    This program aims to improve the efficiency and effectiveness of 
local government on strategic planning, administrative management, 
finance and budgeting to provide better quality basic education 
services in the context of decentralization, and helping to make public 
schools more viable alternatives to religious based private schools. In 
addition, the program strives to increase community involvement in 
local government decision-making on education. The program will work 
with 9 local governments on a pilot basis.
    Question. How can education programs effectively counter the 
influence of Muslim extremist schools in Indonesia, given the country's 
vast geography and USAID's relatively limited resources?
    Answer. A majority of Indonesian public and private schools are 
considered moderate and do not fall in the category of extremist or 
radical extremist schools. Indonesia is a very large country with many 
ethnic and cultural groups. To effectively counter the influence of 
Muslim extremist schools across Indonesia, a multi-faced approach needs 
to be pursued to address extremism, which includes building on our 
decentralized local government program and broadening local 
government's capacity and capability to increase community and local 
government decision-making on education. Also, the number of extremist 
schools which do not offer the national approved curriculum 
incorporating secular subjects should be encouraged to do so. Other 
elements within the multi-faced approach are described below.
  --Better understanding of Indonesia's educational system which 
        includes better monitoring of the education sector by 
        government, community groups, and NGOs concerning curriculum, 
        text books, and quality that builds on the strengths and ideals 
        of indigenous groups; greater involvement of parents and 
        community leaders in local school programs, textbooks, and 
        administration; teacher training and adequate incentives and 
        rewards for teachers; exchange programs which broaden teacher 
        and students views and their understanding of different 
        cultures and value systems which respect universal human values 
        of dignity, compassion, and tolerance; and strengthening civic 
        education in public and religious schools.
  --Promoting Tolerance and Compassion.--Combating terrorism and the 
        extremist ideas that fuel it is especially difficult because of 
        an education system that fails to include liberal democratic 
        values and religious tolerance in public and religious schools. 
        While not a silver bullet, improving the Indonesian education 
        system is a critical tool for advancing the war against 
        terrorism in the long-term and serves as an avenue for helping 
        reduce the potential sway of radical fundamentalism and 
        intolerance.
  --In a tough economic situation, Indonesian families are turning to 
        low-cost, but not necessarily better quality, educational 
        alternatives such as Islamic madrasahs and pesantren. Most 
        teach the national secular curriculum, but some focus only on 
        religious studies, sometimes with fundamentalist and anti-
        American themes sympathetic to terrorists. Expanding economic 
        opportunities for at risk-groups is critical to broadening 
        their access to quality public and moderate religious schools.
  --Expanding students access to alternative views.--The appeal of 
        extremism can be reduced by expanding the access of Muslim 
        students to democratic systems and values, and alternative 
        worldviews. The key mechanisms for assuring access to more 
        diverse and balanced points of view are increased enrollment 
        and retention of students in higher quality government-managed 
        public schools, and support to moderate religious schools, 
        focusing on civic education and promotion of democratic values. 
        By making public schools a more effective, accessible and 
        viable alternative to religious schools, we can reduce the 
        exposure of Indonesian students to extremist views.
  --Strengthening the Quality of Secular Education Provided in Muslim 
        Schools. The quality and relevance of secular education in 
        Muslim schools is often poor. In most cases, the quality 
        problems are even more acute than those found in public schools 
        because Islamic school teachers are usually not academically 
        equipped to teach secular subjects. To help create a more 
        favorable learning environment in classrooms, teachers should 
        be introduced to ``modern'' pedagogical methods that are 
        participatory and student-centered. Also, the curricula should 
        promote activity-based learning, including apprenticeships and 
        on-the-job-training to better facilitate the absorption of 
        Islamic school students into the job market once they compete 
        school.
  --Engaging Islamic School Leaders to Participate in Providing 
        Education to all Learners. Local government and community 
        leaders should be encouraged to take a more proactive and 
        positive approach to becoming more engaged with public and 
        moderate Muslim school leaders to discuss how they can better 
        cooperate and work together to reach all learners and broaden 
        the process for a shared vision of quality and relevant 
        education for all and guard against the proliferation of 
        extremist elements in Muslim schools.
                                pakistan
    Question. The North West Frontier Province in Pakistan recently 
implemented sharia--Islamic--law. The Taliban provided a vivid insight 
into the repression of freedom that occurs under sharia.
    What programs is USAID conducting in this province, and what 
programs can we conduct to protect and enhance the rights of women and 
freedom of speech and thought?
    Answer. USAID's programs are helping improve the quality of life 
for Pakistani girls and women, through greater education, health care 
and economic opportunities. In our Democracy and Governance program we 
have a legislative orientation activity that has provided training to 
new legislators of which 30 percent are women. In the Federally-
Administered Tribal Areas (FATA) bordering Afghanistan, USAID supports 
120 schools where we plan to repair and provide desks, chairs, and 
blackboards. When parents believe girls are receiving quality 
education, they are much more likely to allow girls to remain in 
school. Additionally, in our Education program we are engaged in early 
education teacher training which includes women teachers. This helps to 
reduce the disparity between professional development for women and 
men. The program also helps teachers and administrators build stronger 
and more balanced curricula, addressing the needs of both boy and girl 
students. In our Economic Growth program, we are designing micro credit 
activities that specifically target women-owned and run businesses in 
some of the most impoverished regions of the country. In addition 
economic growth activities include a merit-based scholarship fund for 
needy students, especially women who would not otherwise have access to 
higher education, to attend established business schools. Finally, the 
Mission's Health program is designed to improve the overall quality of 
healthcare and to specifically address the needs of women.
    Question. What steps are we taking to ensure the financial 
integrity of assistance provided to Pakistan?
    Answer. USAID's Controller, a U.S. Foreign Service Officer, arrived 
at post in December 2002. He leads the USAID team to monitor the 
program for financial and programmatic integrity. In addition to these 
regular monitoring plans, USAID sent out a request for proposal from 
seven accredited Pakistani firms to undertake the following: (a) 
Financial pre-award surveys and periodic financial reviews of NGOs and 
other partners; and (b) Performance monitoring of the program in each 
province to measure the progress and maintain a check on the 
implementation of USAID's programs in the field. The Office of 
Inspector General (OIG) of USAID in Manila has determined that each of 
the seven Pakistani firms meets rigid U.S. standards for auditing and 
monitoring programs. In addition, later this year the OIG in Manila is 
planning a training session in USG accounting/auditing standards for 
all accounting firms including cognizant personnel from recipients and 
the Auditor General's Office of Pakistan.
    Question. How many Afghan refugees remain in Pakistan?
    Answer. While the drought has ended and many Afghans have returned 
to Afghanistan, some 235,000 refugees continue to reside in sixteen 
Pakistani camps. The camps are located in remote and harsh frontier 
areas where the refugees have little access to food and sources of 
income. Food assistance is crucial to their survival. The U.S. 
Government, through Public Law 480, Title II, will provide 2,070 MT of 
commodities in fiscal year 2003 to meet the needs of 235,000 refugees. 
U.S. assistance consists of 970 MT of vegetable oil and 1,100 MT of 
lentils. The estimated cost of the U.S. contribution is $2,036,200 
including the cost of commodity, ocean freight, and internal transport, 
storage and handling.
                      environmental health in asia
    Question. While SARS has captured the attention of the world's 
media, there are other serious health issues in southwestern China, and 
Tibet, where millions suffer from environmental health problems related 
to heavy metals in domestically used coal and severe water quality 
problems. These include arsenic and mercury poisoning and fluorosis. 
The region is characterized by a karst topography, which is exceedingly 
vulnerable to groundwater contamination. These environmental health 
problems particularly strike children, condemning them to lives of 
chronic disease. This in turn affects the economic growth and vitality 
of the region.
    There are relatively simple, cost-effective solutions to these 
problems. Western Kentucky University, in concert with other 
institutions, has established a consortium of geoscience, biomedical 
and public health researchers from the United States and China. By 
studying and implementing solutions to these environmental health 
problems, the consortium will serve as an example and as a resource for 
what can be accomplished elsewhere in China and in other developing 
countries. Will your Agency work with this Consortium to implement 
solutions to these environmental health problems and save the rising 
generation of Chinese children from lives of disfigurement and disease 
and also remove the health impediments to economic growth?
    Answer. USAID follows the policy guidance of the Department of 
State on all proposed activities in China. USAID implements a Regional 
HIV/AIDS program with NGO's in southern China, and manages, at the 
direction of the State Department and the Congress, limited activities 
on the Tibetan Plateau and a rule-of-law grant to Temple University. 
Generally, USAID's environmental health activities focus on infectious 
diseases, especially the prevention of diarrhea disease and pneumonia 
in children, as well as malaria. USAID has chosen to focus its limited 
resources in these areas because the public health threat in terms of 
both child mortality and the overall disease burden in these areas are 
greatest and because there are proven and effective interventions. In a 
very few countries USAID has addressed specific problems of chemical 
contamination in the environment, such as lead exposure in children and 
arsenic contamination of drinking water. Within the existing legal and 
policy framework that guides and directs USAID's involvement in China, 
we would, of course, give full and complete consideration to such a 
proposal.
            fiscal year 2004 usaid budget request for russia
    Question. The fiscal year 2004 budget request for Russia is $75 
million below the last year's level. While some of this decrease can be 
attributed to the transfer of exchange programs to the Department of 
State Bureau of Educational and Cultural Affairs, what programs or 
activities will USAID cut in the ``graduation process''?
    Answer. You are correct that $30 million of the $75 million 
decrease is due to the transfer of exchange programs to the Department 
of State Bureau of Education and Cultural Affairs. These important 
exchange programs with Russia will continue to be funded.
    The anticipated reduction in FREEDOM Support Act funding in 2004, 
and its implications for future funding, will force USAID, in 
consultation with the Assistance Coordinator's Office in the State 
Department, to make difficult decisions among important activities.
    During the phase-out period, we will likely continue to focus on 
the sustainability of civil society institutions across all sectors 
that will be instrumental in continuing to push for reforms and for 
building a democratic society in Russia. We will probably also continue 
to emphasize our programmatic emphasis on Russia's critical health 
problems--particularly HIV/AIDS, tuberculosis, and unhealthy 
lifestyles. In addition, given the resources and development potential 
of the Russian Far East, as well as its cultural and historic ties to 
the United States, we anticipate continuing to emphasize programs in 
this region. In view of the economic progress Russia has made, most of 
the proposed budget cuts will likely be borne by our economic growth 
programs; some are slated for early termination and others will likely 
be curtailed entirely. In some cases, those cuts are being made in 2003 
to ensure that we have the resources for other priority areas in 2004.
    Question. How will democracy programs be impacted by the decrease 
in assistance for Russia?
    Answer. We recognize that Russia's transition, particularly toward 
democracy, may well not be complete by 2008, and that as FREEDOM 
Support Act programs end, the U.S. Government must nevertheless remain 
to stay engaged in Russia's transition. It is our understanding that 
other USG agencies plan to continue to support civil society 
development and democracy via National Endowment for Democracy, Embassy 
Democracy Commission, United States-Russian citizen contacts, and 
professional and student exchanges.
    We realize that Russia continues to face challenges in democratic 
development. We are developing a strategy to phase out FSA assistance 
to Russia over the next several years that will seek to ensure a legacy 
of sustainable institutions to support civil society and democratic 
institutions. During this time, we will increasingly focus on democracy 
and rule of law to ensure that we consolidate and sustain the progress 
made over the past decade. We will seek to advance structural changes 
that are needed to create a hospitable environment for Russian civil 
society.
    FSA technical assistance programs have played a vital role in 
advancing progress toward rule of law in Russia, including vital 
support for the professionalization of Russian court administration and 
judicial training; emphasis upon the importance of judicial ethics 
(resulting in more openness by the Russian courts concerning 
disciplining of judges); reform of law school curriculum, including 
introducing and supporting clinical legal education; and supporting 
every aspect of the development of the new criminal procedure code, 
which has drastically changed the roles for Russian judges, prosecutors 
and defense attorneys. As another example, legal volunteers from 
Vermont, including judges, practicing attorneys, and staff of Vermont 
Law School, have worked with the Republic of Karelia on a professional 
development program for Karelian judges, legal educators, and 
practicing lawyers. Our focus is now on helping the Russian bar 
consolidate the gains it has made, particularly by sponsoring 
professional education events to help the bar hone its advocacy skills.
           fiscal year 2004 usaid budget request for armenia
    Question. The fiscal year 2004 budget request for Armenia is $40.5 
million below last year's level. Is this cut too drastic, and what 
programs will you terminate should Congress provide the budget request?
    Answer. While a reduction in FREEDOM Support Act (FSA) funding in 
fiscal year 2004 would reduce the scope of USAID programs, USAID does 
not believe that such a reduction would be detrimental to the progress 
and momentum in reform that it has achieved in its efforts to date. 
USAID/Armenia conducted an initial analysis on what a reduced FSA 
budget would do to its programming. Armenia has made progress in 
certain areas over the past few years, and we are able to wind down 
successful programs. For example, some of our micro-credit programs are 
now self-sustaining, our energy metering program has been successfully 
completed, and the Earthquake Zone Recovery program will end in fall 
2004. While we would not eliminate any of our major program areas, as 
described in more detail below, we would have to phase out and/or scale 
down certain programs.
    USAID/Armenia has an integrated strategy to assist in economic and 
political transition to a law-based market economy and an open, 
pluralistic democracy. The strategy also anticipates support to lessen 
the distress of Armenia's transition. With reduced funding levels, the 
Mission would continue its integrated approach, but would reduce the 
scope of activity in each of its program areas. Anticipated activities 
are grouped into five broad areas: A more competitive private sector 
(economic reform), improved democratic governance (governance), 
improved primary healthcare (healthcare reform), improved social 
protection (social protection), and more efficient and environmentally 
sound management of energy and water resources (energy and water). If 
funding is reduced, USAID/Armenia, in collaboration with partners and 
stakeholders, would focus on a more limited set of key objectives in 
each of these areas.
    Economic reform, with a focus on micro, small and medium enterprise 
development and job creation, remains a primary focus areas of the 
Mission portfolio because it is viewed as a major driving force in 
Armenia's advancement toward economic growth, equity, and political 
stability. The Mission intends to shift its emphasis toward 
strengthening institutions that implement commercial laws and policies 
in order to create a legal and regulatory environment that will 
encourage greater foreign direct investment. At a reduced funding 
level, technical assistance to micro, small, and medium enterprises in 
the sectors would be focused on sectors with the greatest growth and 
employment potential.
    Work in democracy and governance continues to be a high priority 
for the Mission, addressing three interlinked problems: dominance of 
the executive branch, a lack of democratic political culture, and 
corruption. USAID programs support strengthening citizen participation, 
non-governmental organizations, non-state media, local governance, 
anti-corruption, legislative strengthening, and rule of law. Citizens 
have demonstrated greater interest in community issues, and USAID plans 
to continue its efforts fostering this developing sense of community 
ownership and responsibility. Projects that encourage citizens to 
participate in public issues cover a variety of issues ranging from 
condominiums, police, human rights, the Constitution, local government 
and elections. These activities stimulate the ``demand side'' for 
improved democratic process. The ``supply-side'' for improved 
democratic governance is achieved through strengthening governance 
institutions to make them more effective, transparent, and accountable 
to citizens. To promote democratic governance, funding at a reduced 
level would require limiting the focus to three or four of these seven 
areas, with priorities being to strengthen the demand for better 
governance and anti-corruption.
    In healthcare reform, efforts address transition from the Soviet-
legacy system for the provision and administration of healthcare. 
Programs target financial reform, institution building, training, 
enhanced transparency, community mobilization, health education, 
medical outreach, and nutrition. With reduced funding, there would be 
fewer United States-Armenia partnerships; a decreased effort to 
strengthen primary care, reproductive health and system reform; and 
smaller-scale direct assistance programs. Efforts would continue in 
financial reform, which is essential to develop a system in which 
patients are allowed to choose care providers. Financial reform must be 
accompanied by training to shift care provision from highly-
specialized, hospital based system to preventive, primary care. The 
pace of healthcare reform would slow down with reduced funding in this 
area.
    Social protection programs serve a humanitarian purpose and build 
popular support for market and democratic reforms. With the existing 
levels of poverty, unemployment and other forms of vulnerability, 
social protection remains a priority for USG assistance in Armenia. 
USAID/Armenia will support a new vocational training program partnered 
with targeted labor development programs, as well as strengthening core 
assistance programs, including pensions for the elderly and poverty 
family benefits. At a lower funding level, our assistance in the social 
insurance system aimed at the improving pension and disability support 
and payment systems would decrease, as would the proposed skills 
training and labor development programs. Fewer vulnerable populations, 
such as the aging, will be assisted.
    The Mission's energy and water sector activities will promote more 
efficient and environmentally responsible development of these key 
public services. Improving the performance of the institutions that 
manage and regulate water and energy will improve the delivery of heat 
and water services and increase Armenia's energy security. USAID's 
support is aimed at promoting sustainable energy and water management, 
enhanced economic growth and competitiveness, reduced negative 
environmental impacts, energy security, and improvement to the quality 
of life of Armenians by supporting improved delivery of water and heat 
supply. At a reduced funding level, these goals will be harder to 
achieve due to their complexity and the length of time required. 
However, because the Mission's plans to focus on institution building, 
policy development, and pilot projects where other donors will make the 
major infrastructure investments, key objectives can be achieved at the 
reduced funding level, with careful attention to focus, planning and 
implementation.
    Question. Armenia's presidential elections in February 2003 were 
mired in controversy. How is USAID bolstering democracy in that 
country, and should more programming be done?
    Answer. By all accounts, the conduct of the recent presidential 
election in Armenia was controversial. It highlighted the strong 
tendency toward executive branch domination. Consequently, multiple 
efforts in democracy and governance continue to be a high priority for 
the Mission. These efforts address three interlinked problems: 
dominance of the legislative and judicial branches of government by the 
executive branch, a lack of democratic political culture, and 
corruption. USAID programs support greater citizen participation, an 
expanded role for non-governmental organizations, improved news 
coverage by non-state media, stronger local governance, targeted anti-
corruption activities, legislative strengthening of the National 
Assembly, and increased dependence on the rule of law. Armenian 
citizens continue to demonstrate great interest in community issues. As 
such, USAID plans to continue its efforts to foster this nascent sense 
of community ownership and responsibility. Projects that encourage 
citizens to participate in public issues cover a variety of issues 
ranging from condominiums, human rights, the Constitution, local 
government and elections. These activities stimulate the ``demand 
side'' for improved democratic processes. An improved ``supply-side'' 
for improved democratic governance is achieved through strengthening 
governance institutions to make them more effective, transparent, and 
accountable to citizens.
         usaid support for the cooperative development program
    Question. Israel.--Is USAID considering reinstating support for the 
Cooperative Development Program?
    Answer. The Cooperative Development Program (CDP), a centrally-
funded USAID program that has enabled MASHAV, the development 
assistance arm of the Government of Israel's Ministry of Foreign 
Affairs, to develop collaborative relationships with developing 
countries around the world, is receiving its last tranche of central 
funding in fiscal year 2003. This program, which has involved 
commitments of nearly $75 million since the late 1980s, was felt to 
have fully accomplished its goals.
    In fiscal year 2001, MASHAV and USAID initiated a new partnership 
that emphasizes relationships between our two organizations at the 
country level. Individual USAID Missions are encouraged to consider 
collaborating with MASHAV on projects in which Israeli expertise is 
deemed to be appropriate. The USAID Mission in the Central Asian 
Republics has been the first to enter into such a partnership. It will 
continue to utilize Israeli expertise directly through a Mission-funded 
$5 million agreement with MASHAV, which runs until the end of fiscal 
year 2005.
                         rural electrification
    Question. What funding level does USAID anticipate providing for 
international rural electrification in fiscal year 2004, and what is 
USAID's commitment to these programs?
    Answer. Globally, USAID anticipates providing approximately 
$35,500,000 in fiscal year 2004 for rural electrification. This number 
represents a wide range of technical assistance, capacity building, and 
policy and regulatory work that facilitates increasing access to 
electricity in rural areas. This total is at this time provisional as 
actual figures will depend on appropriation numbers and final 
determination of field programs based on field mission strategies and 
current needs. USAID is fully committed to this issue through the 
Global Village Energy Partnership (GVEP), a program under the White 
House Signature Clean Energy Initiative (CEI). The CEI aims to provide 
millions of people in the developing world with access to affordable, 
reliable, clean, healthy, and efficient energy services. USAID is the 
appointed USG Agency to lead up the GVEP which seeks to reduce poverty 
and promote sustainable development through increased access to modern 
and affordable energy services in areas either not served or under-
served by current energy delivery systems. The Partnership brings 
together developing and industrialized country governments, public and 
private organizations, multilateral institutions, consumers and others 
in an effort to ensure access to modern energy services by the poor and 
aims to help reduce poverty and enhance economic and social development 
for millions around the world. It builds on existing experience and 
adds value to the work of its individual partners. It reaches out to 
non-energy organizations in the health, education, agriculture, 
transport and enterprise sectors, and offers a range of technology 
solutions to meet their needs. This covers renewable energy, energy 
efficiency, modern biomass, liquefied petroleum gas (LPG) and cleaner 
fossil fuels. The Partnership will help achieve the internationally 
recognized Millennium Development Goals. The partnership will also 
address gender issues in order to reduce health and environmental 
hazards and increase social and economic welfare; it will build on the 
knowledge and capacity of each member of the community in energy 
delivery and use.
                                 ______
                                 
              Questions Submitted by Senator Arlen Specter
               u.s. companies and usaid prime contractors
    Question. How best can prime contractors utilize U.S. companies as 
suppliers in reconstruction efforts--is this something that can be 
written, or amended, into contracts?
    Answer. USAID policy is to buy American products as often as 
possible. However, where American equipment cannot be maintained or 
repaired, USAID documents the reasons why the purchase of U.S. products 
was not feasible. USAID cannot direct its prime contractors in terms of 
what subcontractors to use. However, in order to facilitate procurement 
opportunities for interested companies, USAID has established an 
extensive website containing detailed information on our Iraq 
reconstruction activities and direct links to our prime contractors.
                         usaid contract process
    Question. Mr. Administrator, I have been recently contacted by Dick 
Corporation of Pittsburgh, Pennsylvania, a company that is interested 
in assisting in the reconstruction of Iraq. Dick Corporation is a major 
contractor that provides quality construction services to the Army 
Corps of Engineers, the Navy, and the General Services Administration. 
In serving all of these clients, the company has been a recipient of 
numerous awards for performance excellence. Currently, Dick Corporation 
is rated by Engineering News Record as 36th in the listing of the Top 
400 Contractors and 22nd of the Top 50 Contractors working abroad. What 
is the process Dick Corporation should go through to work with AID in 
obtaining construction contracts? Has AID issued any similar 
construction contracts in the effort to rebuild Iraq?
    Answer. USAID encourages firms with demonstrated expertise in 
particular sectors to contact USAID's prime contractors. USAID posts 
the names of the prime contractors on the USAID website as contracts 
are awarded. Given that the prime contractor is legally bound to the 
parameters of the contract, the prime must determine the most 
technically appropriate and cost-effective sub-contractor relationships 
to meet the deliverables within the contract. USAID's capital 
construction requirements are being implemented by Bechtel National, 
Inc., with technical oversight provided by the Army Corps of Engineers.
                                 ______
                                 
                Question Submitted by Senator Judd Gregg
                             peregrine fund
    Question. What is the status of USAID's funding for The Peregrine 
Fund's (TPF's) Neotropical Raptor Conservation Program in Panama?
    Answer. USAID has provided funding of $1,000,000 to the Peregrine 
Fund ($500,000 each in 2001 and 2002) and will provide $500,000 in 
2003. Management of the grant is being transferred this year from the 
Washington based Regional Sustainable Development Office to the USAID 
mission in Panama.
                                 ______
                                 
            Questions Submitted by Senator Robert F. Bennett
                     accomplishments in afghanistan
    Question. What are some of the accomplishments we can point to in 
Afghanistan?
    Answer. Below we provide USAID accomplishments organized by sector:
    Humanitarian (following 24 years of conflict and 4 years of 
drought):
  --Averted famine for between 8-10 million Afghans in 2001-2002.
  --Ensured that 5.9 million Afghans were able to survive the winter of 
        2002-2003 by prepositioning food aid and providing emergency 
        shelter kits.
  --Kept the major north-south artery (Salang Tunnel) open
  --Provided opportunities for thousands of Afghans to regain their 
        dignity and a measure of livelihood security through the 
        implementation of dozens of cash-for-work programs
    Revitalizing Agriculture and other Livelihood Options (70 percent 
of Afghans dependent on agriculture for their income):
  --Provided 3,500 MT of seeds and 3,100 MT of fertilizers for the 
        spring 2002 planting season that produced 100,000 MT of wheat 
        benefiting 60,000 farmers. These inputs helped to contribute to 
        an 82 percent increase in production from the previous year and 
        contributed to a decrease in the number of Afghans who will 
        need food aid this year.
  --In fall 2002, 5,000 MT of seed and 9,000 MT of fertilizer were 
        distributed to 113,000 farmers in 13 provinces. Estimated 
        increase in wheat crop production from this contribution is 
        42,000 MT, which translates into an additional $69 net income 
        per farmer. (Note: There is no data on average annual income in 
        Afghanistan. However, other countries with comparable social 
        indicators have annual average incomes between $100-$200 per 
        year.) FAO's crop forecast produced just prior to harvest in 
        summer 2003 indicates that the harvest could be, ``the best 
        harvest in 25 years'' and a 60 percent increase over 2002. The 
        report indicates that good rainfall, additional land in 
        production, and widespread availability of seed and fertilizer 
        account for the increase. If actual harvests are as good as the 
        pre-harvest survey predicts, Afghanistan could realize a 
        national surplus in cereals, particularly wheat, in 2003.
  --In spring 2003, 227 MT of seed and 339 MT of fertilizer were 
        distributed to 4,500 farmers in three provinces. This 
        distribution focused on increasing seed production for improved 
        varieties of a wider range of crops, rather than just cereals 
        as had been the focus in spring 2002 and fall 2002.
  --Repaired over 5,000 km of rural roads through cash-for-work; 
        carried out 250 projects related to road infrastructure 
        (culverts, retaining walls, etc.); reconstructed 31 bridges.
  --Carried out 5,245 small agricultural water infrastructure projects 
        (irrigation canals, small dams, levees, etc.)
  --Repaired and managed the traffic control system for the Salang 
        Pass, the major north-south route for Afghanistan.
  --Provided over 11,000,000 person-days of cash-for-work jobs; the 
        equivalent of 1 month of employment for half a million Afghans.
    Upcoming Accomplishments:
  --$150 million three year Rebuilding Afghanistan's Agricultural 
        Markets Project (RAMP), awarded July 2003, will include major 
        sub-programs in rural agricultural infrastructure, rural 
        financial services, and technology improvement and market 
        development.
    Kabul-Kandahar Highway Reconstruction:
  --Rebuilding 390 km of 482 km Kabul-Kandahar highway; successfully 
        met mobilization and implementation challenges presented by 
        President Bush's direction to accelerate reconstruction for 
        first layer asphalt completion by December 31, 2003. Paving 
        initiated July 1, 2003; five separate construction 
        subcontractors now mobilized and working five road segments.
    Enhancing Educational Opportunities:
  --Provided 15 million textbooks for the start of school in 2002 and 
        10.7 million in 2003.
  --Provided 4,000 basic teacher training kits.
  --Providing, since March 2002, a food salary supplement, equal to 26 
        percent of income, to 50,000 teachers.
  --Rehabilitated 142 schools, daycare centers, vocational schools, and 
        teacher training colleges.
    Upcoming Accomplishments:
  --Start accelerated learning programs for upwards of 60,000 girls who 
        missed education under the Taliban.
  --Provide emergency training for 30,000 community-selected teachers.
  --Rebuild 1,000 schools over 3 years.
    Improving Health, particularly Maternal/Child Health (Second 
highest maternal mortality rate in the world; one in four children die 
by the age of five):
  --Immunized 4.26 million children against measles.
  --Provided one-quarter of the Kabul water supply, focusing on the 
        poorest districts.
  --Carried out 3,114 small potable water supply projects (wells, 
        springs, small distribution systems).
  --Launched a water purification solution product, called Clorin, to 
        combat child mortality due to diarrhea; in partnership with 
        private sector, Clorin is being produced in Afghanistan.
  --Provided access to basic health services to an area covering 3.8 
        million people in 17 provinces; 191,724 persons have been 
        treated at these clinics (75 percent of whom are women and 
        children).
  --Rehabilitated the water systems for Kandahar and Kunduz, benefiting 
        650,000 people by increasing supply, pumping capacity, 
        extending service lines, and eliminating direct discharge of 
        human waste through provision of sanitary latrines.
    Upcoming Accomplishments:
  --Expand basic health services to an area covering 16.5 million 
        Afghans.
  --Build or renovate up to 400 basic health centers in rural areas.
    Strengthen Afghan Institutions to Assure Stability:
  --Provided $58 million total to the Afghan Reconstruction Trust Fund 
        for budget support.
  --Provided a food salary supplement, valued at 26 percent of income, 
        to 270,000 civil servants over 6 months. Recent assessment 
        concluded that a number of qualified civil servants returned to 
        their jobs because of this supplement.
  --Effectively managed the currency conversion process on behalf of 
        the Central Bank through the provision of personnel to staff 
        the 52 exchange points, counters, shredders, and transportation 
        for moving the currency. Currency has maintained value and 
        stabilized against the dollar, since its roll-out in fall 2002.
  --Rehabilitated 13 government ministries, including the provision of 
        daycare centers so that women can return to work.
  --Provided critical assistance to the United Nations for the 
        emergency Loya Jirga, including logisticians who developed the 
        plan for implementation; air operations support; educational 
        films on the Loya Jirga process for communities; international 
        observers to ensure transparency in the selection of delegates; 
        and nationwide expansion of Radio Kabul broadcasts with 
        messages about the Loya Jirga process.
  --Rehabilitated (i.e., electricity, office repairs) and/or provided 
        equipment (communications equipment, computers) to 19 
        Government ministries and offices.
  --Provided daycare centers to Ministries to enable women to return to 
        work.
  --Provided a satellite phone system and pouch mail so that the 
        central government in Kabul can communicate with its regional 
        offices.
  --Established Afghanistan's first private sector FM radio station.
  --Work with the Ministry of Finance and Central Bank to rebuild key 
        economic institutions, such as the banking system, revenue 
        collection, government financial management systems, 
        privatization, utility reform, and trade reform.
  --Establishing 18 Women's Centers nationwide with accelerated 
        learning and health education programs.
  --Supporting the Constitutional, Judicial, and Human Rights 
        Commissions.
  --Establishing community radio stations.
                          clean water in iraq
    Question. It is my understanding that access to potable water is 
one of the more pressing problems facing Iraq today. What has USAID 
done with respect to providing clean water to Iraqis?
    Answer. USAID, through support to UNICEF, is addressing the need 
for improved water supply by establishing a water and sanitation 
coordination team comprising U.N. agencies, ICRC and international 
NGOs, completing extensive water assessments and procuring and 
distributing water treatment chemicals for communities in South and 
Central Iraq.
    USAID's private sector partner for capital construction, Bechtel, 
will be rehabilitating up to 8 water treatment facilities in Basra, 6 
water treatment plants in south central Iraq, and the Sabah Nissan 
water treatment facility in Baghdad to increase treated water in east 
Baghdad by 45 percent and in overall Baghdad by 15 percent.
    Lastly, USAID plans to rehabilitate seven wastewater treatment 
plants in Baghdad, the Central region and Mosul. All require 
significant rehabilitation due to neglect during the sanctions period. 
Some have suffered additional degradation due to looting. Reducing 
sewage flow into the rivers is a key element to providing clean water 
to Iraqis and to reducing Iraq's high infant mortality rate.
           usaid use of american goods in iraq reconstruction
    Question. Home Depot believes that $50 million in sales of supplies 
and equipment to Iraq could result in at least 300 new American jobs. 
How is USAID maximizing the use of American goods and supplies in the 
reconstruction of Iraq?
    Answer. USAID has awarded all of its primary contracts and grants 
to American firms. However, USAID is also maximizing the amount of 
Iraqi goods and services to ensure that Iraqis are fully invested in 
the reconstruction of their own country, which is also consistent with 
Administration policy.
                                 egypt
    Question. How would you assess the effectiveness of AID's very long 
and extensive program in Egypt? What are the prospects for real 
economic and political reform in Egypt, and how could U.S. assistance 
be used more specifically to promote those goals?
    Answer. USAID has provided Egypt with over $25 billion since the 
Camp David Accords. We have helped Egypt move from a socialist 
centrally planned economy towards a more open, market-oriented economy.
    In the 1970s, USG assistance helped restore and reopen the Suez 
Canal, one of Egypt's major foreign exchange earners, along with oil/
gas and tourism.
    Over $6 billion has been invested in physical infrastructure 
programs including electric power, water, wastewater and sanitation, 
telecommunications and transportation. Results: 95 percent of Egyptians 
have access to electricity; 22 million citizens have access to water/
wastewater services; the number of telephones increased over seven-
fold.
    Social and economic development strategies in health care, basic 
education and agriculture have improved the quality of life for 
millions of Egyptians. USAID has provided $134 million since 1990 for 
small and medium enterprise development and micro-lending programs. 
With USAID assistance, six not-for-profit business associations and two 
banks are now implementing efficient and effective Small and Medium 
Enterprise (SME) lending programs that are operating on a self-
sufficient basis. To date, 840,000 loans, valued at over 2.1 billion 
Egyptian pounds, have been extended to 340,000 Egyptian entrepreneurs 
with less than a two percent default rate. These loans have, in turn, 
helped to create more than 240,000 jobs.
    Child survival programs have been successful with infant mortality 
falling by 45 percent and mortality rates for those under age five 
falling by 53 percent.
    USAID's program has helped the Government of Egypt (GOE) take the 
steps to create a globally competitive economy by emphasizing policy 
reforms supportive of increased foreign and domestic investment, export 
oriented growth, workforce and business skills development, and 
privatization and investment in Information Technology (IT). USAID's 
efforts also culminated in the recent inauguration of an Egyptian IT 
center in Chantilly, VA that will strengthen the U.S./Egyptian 
technology partnership. In the 1990s, major reforms strengthened macro-
economic discipline, reined in inflation and privatized many state-
owned enterprises. Real economic growth averaged more than 4.6 percent 
over the decade, and per capita GDP has climbed above $1,400.
    The USG is currently negotiating with the GOE reforms that will be 
necessary to strengthen the financial sector and underpin Egypt's 
recent pound float. The floating of the pound is viewed as a 
preliminary show of commitment from the GOE to financial sector reform. 
It will enhance the competitiveness of Egyptian exports, tourism and 
economy.
    The USG is prepared to provide financial and technical assistance 
towards strengthening the banking sector, including the privatization 
of State Banks, as well as assistance to strengthen/reform insurance 
and pension systems and securities.
    The GOE hopes to negotiate a Free Trade Agreement (FTA) with the 
USG. In order to achieve success in this effort a number of actions 
will be required on the GOE's part.
    While the USG intends to continue to provide some technical 
assistance resources to trade and custom reforms, the GOE will need to 
undertake on its own initiative certain steps towards achieving an FTA.
              american educational institutions in lebanon
    Question. The American educational institutions in Lebanon are 
considered by most Lebanese and Lebanese Americans as a key component 
of the American assistance program. Congress consistently supports the 
American educational institutions. This support is demonstrated yearly 
in bill and report language. Despite strong Congressional direction, 
AID appears to resist funding the schools.
    In fiscal year 2003, Congress provided $35 million in assistance 
for Lebanon. The conference report directed that not less than $3.5 
million should be provided to the American educational institutions. 
Despite this clear statement of congressional intent, Administration 
officials have indicated they plan to provide only $2.5 million for the 
schools. Does the Administration plan to disregard the conference 
report language on the American educational institutions in Lebanon?
    Answer. The Administration continues to support to all of the 
American Educational Institutions (AEI) in Lebanon: the American 
University of Beirut (AUB), the Lebanese American University (LAU), the 
International College (IC), and the American Community School (ACS). 
However, USAID's program objectives and goals have grown, while 
available funding has decreased. The program now includes: promoting 
economic growth, building democracy and good governance, enhancing 
Lebanese government control in southern Lebanon, and protecting the 
environment, in addition to supporting the four AEIs. In order to meet 
these goals, we have turned to funding projects using implementing 
partners, such as NGOs and private-sector organizations, which have the 
capability to execute our projects but lack alternative funding 
resources. In contrast, AEIs do have endowments and the ability to 
fundraise from their alumni. The USG has a commitment to those NGO 
partners that are working on a sound and successful development program 
that has and will continue to benefit millions of people all over 
Lebanon.
    Please note that during the period of 1999-2002, the AEIs received 
$9.852 million in support from the American Schools and Hospitals 
Abroad (ASHA) fund, managed by USAID. That support averages out to be 
$2.463 million a year. For fiscal year 2003, ASHA funding to the AEIs 
will continue.
    In fiscal year 2003, the Administration has made available $24.77 
million in economic support funds (ESF) for the Lebanon program. This 
number reflects the 0.65 percent across the board cut for all ESF 
assistance levels and the $10 million which is restricted, from being 
provided to Lebanon under Section 1224 of the Foreign Relations 
Authorization Act of fiscal year 2003. Given these constraints, and 
consistent with the spirit of the language on AEIs in Lebanon contained 
in the Conference Report on Foreign Operations, Export Financing, and 
Related Programs Appropriations Act, fiscal year 2003 (which states 
that $3.5 million of the original appropriation of $35 million should 
be allocated to the AEIS), we are allocating 10 percent of the fiscal 
year 2003 ESF funding made available for Lebanon, or $2.477 million, to 
the American educational institutions in Lebanon.
                               palestine
    Question. The United States has been providing approximately $75 
million a year since the Oslo process began to the Palestinians to help 
alleviate their economic difficulties. Just last month, Congress 
approved a supplemental bill that included an additional $50 million in 
U.S. assistance to the Palestinians. Since the Palestinians began their 
campaign of violence two and a half years ago, however, it has been 
increasingly difficult to send U.S. personnel into the areas 
administered by the Palestinian Authority to either monitor existing 
programs or create new ones. How would you assess the effectiveness of 
AID's programs in the West Bank and Gaza? How have you been able to 
effectively monitor and initiate new programs, given the security 
situation on the ground? How have you been able to ensure that US money 
does not go directly into the hands of leaders of the Palestinian 
Authority and that no U.S. money, either directly or through 
subcontractors, goes to groups or individuals involved in terror?
    Answer. Effectiveness of USAID's Programs in the West Bank and 
Gaza:
  --Over the past 2\1/2\ years escalating violence, terrorism, closures 
        and curfews have resulted in the virtual collapse of the 
        Palestinian economy and a growing humanitarian crisis. This 
        period has been tumultuous for Palestinian and Israeli 
        societies alike, and a potential disaster for the peace 
        process.
  --The Palestinian Authority's (PA) ability to address the severe 
        problems faced by the population has been negatively impacted 
        by the destruction of PA infrastructure and the lack of 
        internally generated resources. Consequently, much of the 
        burden for addressing the on-going crisis falls to local and 
        international NGOs, and the international donor community. 
        Reform efforts have focused on working with key PA ministries, 
        while at the same time supporting a more dramatic overhaul of 
        PA institutions and operating styles.
  --Despite a difficult political and security situation, program 
        implementation continues, albeit with some delays caused by 
        often limited access to project sites and border closures by 
        the Israeli Defense Force (IDF).
  --USAID/WBG has achieved significant results across the portfolio, 
        through use of innovative implementation approaches and the 
        dedication of the staff, contractors and grantees, and other 
        Palestinian and Israeli counterparts.
  --The Mission has helped to avert a humanitarian catastrophe; 
        initiated efforts to revitalize the Palestinian private sector 
        and to support reform; and maintained infrastructure, 
        institutional and human capacity development programs critical 
        for the formation of an independent Palestinian state.
    Effective Monitoring Given the Security Situation:
  --Because of the security situation, monitoring has been a major 
        concern. As such, the Mission has increased visits to project 
        sites through enhanced reliance on FSN staff and through the 
        expansion of Embassy and Consul General Regional Security 
        Office personnel, which permits our U.S. Direct Hire and 
        Personal Services Contract (PSC) staff to travel to the West 
        Bank and Gaza more frequently.
  --We arranged for an IG Risk Assessment and enhance audit activities 
        during the coming year pursuant to the specific recommendations 
        from the IG.
  --he Mission has exerted considerable effort to improve bilateral 
        relations with relevant Israeli officials, which has resulted 
        in permits for Mission, contractor and grantee staff to travel 
        more freely between Israel and the Palestinian Territories and 
        has facilitated cooperation generally with respect to project 
        planning and implementation.
    Ensuring That U.S. Money Does Not Go To Groups Or Individuals 
Involved In Terror:
  --USAID funds its programs through U.S. contractors, U.S. Private and 
        Voluntary Organizations (PVO), Palestinian Non-Governmental 
        Organizations (NGO), and Public International Organizations 
        (PIO).
  --To minimize the risk of Mission resources being used to support 
        terrorist organizations, USAID introduced a vetting process, 
        which has allowed the Mission to continue funding more than 400 
        Palestinian civil society organizations.
  --All USAID programs are carried out through American contractors, 
        American and international non-government organizations (NGOs) 
        and Palestinian NGOs. Furthermore, working closely with the 
        Embassy's Country Team, USAID carefully checks the references 
        of all Palestinian NGOs who are to be recipients of funds to 
        ensure that there are no links to terrorist organizations or to 
        organizations advocating or practicing violence. These 
        reference checks are periodically updated.
  --USAID and the Country Team preview requests for grants from 
        Palestinian NGOs, purpose of the grant, the NGO's previous 
        experience with managing grants, and the NGO's key personnel--
        including their dates of birth to avoid false positives in the 
        vetting process. Decisions on whether or not to approve grants 
        to certain Palestinian NGOs are based on the totality of the 
        circumstances.
  --USAID uses this information as part of its due diligence process in 
        deciding which NGOs should receive its grant funds.
    Ensuring That U.S. Money Does Not Go Directly To The Palestinian 
Authority:
  --Until now, U.S. law has required that no USG funds are to obligated 
        or expended for direct assistance to: (a) the Palestine 
        Liberation Organization; (b) the Palestinian Authority; (c) a 
        Palestinian state; nor to; (d) the Palestinian Broadcasting 
        Corporation.
  --The USG has now decided, for the first time, to give direct 
        assistance to the Palestinian Authority. A $20 million cash 
        transfer will be used to support municipal services and for 
        repair and rehabilitation of municipal infrastructure, such as 
        roads and water works.
  --The U.S. stands solidly behind Prime Minister Abbas. Under his 
        leadership, a constructive change and empowerment of 
        Palestinian governing institutions is underway. His efforts to 
        end terror and violence present real opportunity to move 
        forward on President Bush's two-state vision. Palestinian 
        reform efforts are in progress. Besides having Prime Minister 
        Abbas to work with, Palestinian Authority finances are under 
        the stewardship of Finance Minister Fayyad, and are now largely 
        transparent and therefore, accountable to the Palestinian 
        people.
  --The United States believes it is important to act now to reinforce 
        this positive progress and to signal support for Prime Minister 
        Abbas, Finance Minister Fayyad, and to help them establish 
        their authority on the ground.
  --USAID will keep close track of how these funds are used via ongoing 
        consultations with Minister Fayyad, our Consulate General in 
        Jerusalem, and our USAID presence in Gaza and the West Bank. 
        All parties are well aware that the prospect of future such 
        direct transfers would depend on the degree of success of this 
        one.
               institutionalizing private property rights
    Question. What efforts has the agency made to instill the 
principals of institutionalizing private property rights and leveraging 
capital in developing countries as propounded by Hernando de Soto and 
Institute for Liberty and Democracy (ILD)?
    Answer. USAID has a long and highly productive relationship with 
the Institute for Liberty and Democracy (ILD) and its director, 
Hernando de Soto. USAID considers ILD a key partner in its long-
standing commitment to improving property rights systems and counts it 
as one of our major success stories. The relationship began in 1982 
when ILD was a fledgling institution and continues up to the present 
day.
    Over these 20 years, USAID has provided approximately $39 million 
of financial assistance to ILD. In fiscal year 2003, USAID will provide 
an additional $6 million to ILD. A main focus of this effort is the 
establishment of an International Training Center.
                          ethiopia food crisis
    Question. The news from Ethiopia about the food situation is not 
encouraging. Could you please describe the U.S. efforts to alleviate 
the suffering in Ethiopia? Are the Europeans and non-traditional donors 
(such as China and Russia) doing their fair share?
    Answer. The U.S. Government has provided over $400 million in 
humanitarian assistance to Ethiopia this fiscal year to address both 
food and other emergency relief needs. The food, health, nutrition, 
water and sanitation, and agricultural recovery programs supported by 
the U.S. Government have already saved and will continue to save people 
from starvation and disease in Ethiopia.
    In response to the Ethiopia 2003 appeal for emergency food 
assistance, the U.S. Government has pledged approximately 878,790 
metric tons (MTs) valued at over $393 million. This represents 57 
percent of Ethiopia's total food aid requirements for 2003. Since the 
onset of the emergency in 2002, U.S. Government food aid pledges to 
Ethiopia now total over 1,000,000 metric tons valued at approximately 
$475 million. The European Community has pledged 283,570 MTs. Other 
donor countries have pledged an additional 338,786 MTs.
    Regarding non-traditional donors, India has provided 10,000 MTs of 
food aid.
                 faith-based health/development efforts
    Question. What is USAID doing to encourage faith-based health/
development efforts?
    Answer. The Bureau for Global Health (BGH) is coordinating its 
efforts with the newly opened Office of Faith-Based and Community 
Initiatives (OFBCI) within USAID. In order to effectively address the 
health needs in the developing world USAID will continue to partner 
with religious organizations and local community initiatives in an 
effort to reach areas in a comprehensive manner. The OFBCI is holding 
regular meetings with the Bureau for Global Health to assess and reach 
out to new partners.
    The BGH is also coordinating with the OFCBI on eight regional 
conferences, to encourage and reach out to new partners interested in 
participating in USAID global health programs. These events will be 
held throughout the United States.
                                 ______
                                 
               Questions Submitted by Senator Ted Stevens
    Question. Please provide a chart of agriculture funding.
    Answer.

                                  CHART OF USAID AGRICULTURE FUNDING 1992-2004
----------------------------------------------------------------------------------------------------------------
                                             Dollars in
               Fiscal year                    thousands             Fund type                    Source
----------------------------------------------------------------------------------------------------------------
1992.....................................         625,277  Obligated.................  Title XII Report
1993.....................................         449,535  Obligated.................  Title XII Report
1994.....................................         415,258  Obligated.................  Title XII Report
1995.....................................         434,530  Obligated.................  Title XII Report
1996.....................................         307,825  Obligated.................  Title XII Report
1997.....................................         244,754  Obligated.................  Title XII Report
1998.....................................         331,231  Obligated.................  Title XII Report
1999.....................................         346,365  Obligated.................  Title XII Report
2000.....................................         338,104  Obligated.................  Title XII Report
2001.....................................         328,985  Obligated.................  Title XII Report
2002.....................................         446,303  Obligated.................  Title XII Report
2003.....................................         473,877  Allocated.................  USAID PPC/SPP
2004.....................................         470,200  Requested.................  2004 CBJ
----------------------------------------------------------------------------------------------------------------

    Question. Please provide a breakdown of food aid funds for fiscal 
year 2003 and fiscal year 2003 Supplemental.
    Answer.

                    FISCAL YEAR 2003 USAID FOOD FOR PEACE (TITLE II) SPENDING PLAN JULY 2003
----------------------------------------------------------------------------------------------------------------
                                                                                                Fiscal year 2003
                                                            Fiscal year 2003  Fiscal year 2003    Bill Emerson
                          Country                             non-emergency       emergency       Humanitarian
                                                                                                      Trust
----------------------------------------------------------------------------------------------------------------
Angola \1\................................................        $3,164,400      $111,012,000  ................
Afghanistan...............................................  ................        59,464,000  ................
Balkans...................................................  ................        15,536,000  ................
Bangladesh................................................        38,566,000  ................  ................
Benin.....................................................         5,749,100  ................  ................
Bolivia...................................................        29,011,614  ................  ................
Burkina Faso..............................................         6,761,300  ................  ................
Cameroon..................................................           141,609  ................  ................
Cape Verde................................................         5,177,900  ................  ................
Central African Republic..................................           300,485  ................  ................
Central America...........................................  ................        10,500,000  ................
Chad......................................................         3,959,194  ................  ................
Congo.....................................................  ................         2,300,000  ................
Djibouti..................................................  ................         3,240,000  ................
North Korea...............................................  ................        50,000,000  ................
Democratic Republic of Congo..............................  ................        35,000,000  ................
Egypt.....................................................         2,028,338  ................  ................
Eritrea...................................................         2,873,400        65,000,000  ................
Ethiopia..................................................        25,891,089       328,000,000      $129,173,200
Gambia....................................................           691,281  ................  ................
Ghana.....................................................        23,214,003  ................  ................
Great Lakes...............................................  ................        45,000,000  ................
Guinea....................................................         6,190,200  ................  ................
Guatemala.................................................        24,930,399  ................  ................
Haiti.....................................................        36,957,200         4,000,000  ................
Honduras..................................................         8,121,245  ................  ................
India.....................................................        44,774,900  ................  ................
Indonesia.................................................        14,379,600        17,000,000  ................
Iraq......................................................  ................       170,000,000        45,785,500
Kenya.....................................................        23,779,600        10,000,000  ................
Laos......................................................           660,810  ................  ................
Lesotho...................................................         1,630,635  ................  ................
Liberia...................................................         1,334,214  ................  ................
Madagascar................................................        10,481,038           726,000  ................
Malawi....................................................         3,287,200  ................  ................
Mali......................................................           203,089  ................  ................
Mauritania................................................         8,652,292  ................  ................
Mozambique................................................        17,756,116  ................  ................
Nicaragua.................................................        13,738,579  ................  ................
Niger.....................................................        10,639,592  ................  ................
Pakistan..................................................         4,289,936  ................  ................
Peru......................................................        24,551,900  ................  ................
Rwanda....................................................        13,369,300  ................  ................
Sahel/Mauritania..........................................  ................        15,000,000  ................
Somalia...................................................  ................        20,000,000  ................
Southern Africa...........................................  ................       150,000,000  ................
Sri Lanka.................................................           682,895  ................  ................
Sudan.....................................................           347,590       100,000,000
Tajikistan................................................  ................        10,000,000  ................
Uganda....................................................        19,281,517        57,122,000  ................
West Africa Regional......................................         1,142,000  ................  ................
West Africa Coastal.......................................  ................        42,000,000  ................
West Bank/Gaza \1\........................................  ................        10,000,000  ................
Yemen.....................................................  ................         2,569,610  ................
Zambia....................................................         1,500,000  ................  ................
Personal Services Contractors.............................         1,000,000         6,000,000  ................
Prepositioned Stock.......................................  ................        30,055,935  ................
Temporary Institutional Support...........................  ................         2,000,000  ................
International Food Relief Partnerships....................  ................         5,000,000  ................
World Food Program \3\....................................         2,218,830        51,000,000  ................
Farmer to Farmer..........................................  ................        10,000,000  ................
                                                           -----------------------------------------------------
      Subtotal............................................       446,000,000     1,434,955,935       174,958,700
                                                           =====================================================
      GRAND TOTAL \3\.....................................                      2,055,914,635
----------------------------------------------------------------------------------------------------------------
\1\ Pending final country allocations.
\2\ Fiscal years 2003-2002 ITSH & Unallocated.
\3\ Includes $140,380,935 prior year funds & $174,958,700 from Bill Emerson Trust Drawdown ($1,880,955,935 in
  new obligation authority).

                             russia budget
    Question. As you are aware, the President cut $75 million from the 
budget for Russia, leaving a base budget of $73 million in total aid. I 
am concerned that such a drastic cut does not take into account the 
needs of the Russian Far East.
    The RFE faces numerous challenges, including limited access to 
these areas, a lack of infrastructure, a lack of basic amenities like 
running water, waste disposal and sewer systems, and high rates of 
fetal alcohol syndrome, alcoholism, and tuberculosis. This is similar 
to the situation faced by many rural villages in my state.
    Given the situation in the Russian Far East, what are USAID's plans 
for allocating scarce resources to this area?
    Answer. The anticipated sharp reduction in FREEDOM Support Act 
funding in 2004, and its implications for future funding, will force 
us, in consultation with the Assistance Coordinator's Office in the 
State Department, to make difficult decisions among important 
activities.
    During the phase-out period of our Russia program, we will likely 
continue to focus on the sustainability of civil society institutions 
across all sectors that will be instrumental in continuing to push for 
reforms and for building a democratic society in Russia. We will 
probably also continue to emphasize our programmatic emphasis on 
Russia's critical health problems--particularly HIV/AIDS, tuberculosis, 
and unhealthy lifestyles. In addition, given the resources and 
development potential of the Russian Far East, as well as its cultural 
and historic ties to the United States, we anticipate continuing to 
emphasize programs in this region.
    In view of the economic progress Russia has made, most of the 
proposed budget cuts will likely be borne by our economic growth 
programs; some are slated for early termination and others will likely 
be curtailed entirely. In some cases, those cuts are being made in 2003 
to ensure that we have the resources for other priority areas in 2004.
                          iraq reconstruction
    Question. How can smaller companies and 8(A) minority businesses 
such as Alaska native corporations participate in the rebuilding 
effort?
    Answer. USAID is indeed focused on the issue of business 
opportunities for the smaller companies and 8(A) businesses during the 
Iraq reconstruction effort.
    Under the special authority which USAID awarded the Iraq prime 
contracts, it was determined in the best interest of the government to 
seek Small Business Subcontracting Plans from five of the eight 
contracts awarded. Of those five, the percentages achieved by the prime 
contractors are extremely promising and evidence that the Agency is 
determined to raise the levels of small business utilization in its 
contract award process. The resulting percentages achieved under the 
Plan reflect both the Agency's determination and the primes' compliance 
to significantly increase their draw on qualified small and 
disadvantaged businesses as reconstruction activities continue in Iraq: 
IRG (Personnel Support) at 14 percent; RTI (Local Governance) at 30 
percent; Abt (Health) at 58.5 percent; Creative Associates (Education) 
at 30 percent; and RMS (Logistics) at 29 percent. The Agency is also 
requiring a similar plan under the agriculture contract currently being 
awarded under full and open competition.
    Since USAID does not have privy of contract with any 
subcontractors, USAID holds the prime contractors responsible for 
meeting the contractual requirements, as they will select the 
subcontractors. Although USAID has provided significant and detailed 
advice on qualifying for a subcontract on the our Agency's own website, 
our Office of Procurement as well as Office of Small and Disadvantaged 
Business have encouraged interested entities as Alaska native 
corporations to contact Bechtel directly through its website where they 
can register as a qualified candidate for subcontracting opportunities 
in Iraq. We have been advised that Bechtel will review all electronic 
applications and determine which will compete on future Iraq projects 
as they arise.
    In USAID's continuing effort to support small and disadvantaged 
businesses in their drive to qualify for, and succeed in achieving 
contracts, we are seeking to improve the Agency's capability to track 
the levels of compliance of the large businesses with their 
subcontracting plans. We are also working on expanding our current data 
base of qualified small and disadvantaged businesses from which the 
large businesses and prime contractors can draw for both Iraq 
reconstruction projects as well as the Agency's universe of contracting 
opportunities.
    Question. In light of the need to create American jobs during this 
economic downturn, what are your plans to utilize American suppliers, 
shippers and contractors to rebuild Iraq?
    Answer. USAID has awarded all of its primary contracts and grants 
to American firms. However, USAID is also maximizing the amount of 
Iraqi goods and services to ensure that Iraqis are fully invested in 
the reconstruction of their own country, which is also consistent with 
Administration policy.
                                 ______
                                 
               Questions Submitted by Senator Larry Craig
                             peregrine fund
    Question. During the fiscal year 2002 and 2003 processes, the 
subcommittee twice provided $500,000 for The Peregrine Fund's 
Neotropical Raptor Program. The project is based in Panama and extends 
throughout the Neotropics.
    Although The Peregrine Fund is not as well known as other 
conservation organizations, it is still one of the most respected. They 
are best known for the successful recovery of the Peregrine Falcon and 
Mauritius Kestrel. Their work, however, extends beyond those species 
and beyond the borders of this country. Domestically, they have 
projects in Idaho, Arizona, Utah, and Texas. Internationally, they have 
projects in Greenland, Panama, Mexico, West Indies, Peru, India, 
Madagascar, Kenya, Papua New Guinea, and other countries. They focus on 
endangered birds of prey to conserve nature.
    Shortly before the Peregrine Falcon was recovered and removed from 
the Endangered Species List, The Peregrine Fund drafted Raptor 2100, 
the organization's strategic plan for the 21st Century. The objective 
of this plan is to conserve the world's 296 species of diurnal birds of 
prey. The importance of the Neotropics is obvious since the Neotropics 
is home to 91 of these species.
    The partnership between USAID and The Peregrine Fund dates back 
several years with projects in Guatemala and Madagascar. The 
Cooperative Agreement with USAID for the Neotropical Raptor Program was 
signed in September 2002. The purpose of this agreement is to establish 
hands-on conservation programs in critical areas of interest to USAID 
and to help ensure the long-term sustainability of biodiversity 
conservation through capacity building in the region.
    The Cooperative Agreement requires The Peregrine Fund match the 
$500,000 provided by the subcommittee and USAID with an additional 
$125,000. I am pleased to say that The Peregrine Fund matched these 
funds with an additional $600,000 in fiscal year 2002 and $600,000 in 
fiscal year 2003.
    Highlights from the first eighteen months of the agreement include:
  --Completed educational needs and methods assessment in the Panama 
        Canal Watershed and Darien Province.
  --Designed and implemented environmental education programs among 
        target communities near release sites in the Panama Canal 
        Watershed, forest frontier communities in Darien, and the 
        general population of Panama.
  --Recruited and trained seven indigenous Ember and Wounaan 
        parabiologists in the Darien Province of Panama.
  --Completed the first-of-its-kind Neotropical Raptor Conference that 
        brought together 150 raptor conservation practitioners and 
        decision makers from 16 countries.
  --Established Harpy Eagle captive propagation program, with 17 eagles 
        hatched and 13 released to date, and staff undergoing training 
        in raptor food production, raptor propagation, and raptor 
        release techniques. Worldwide, only 15 other Harpy Eagles have 
        ever hatched in captivity.
  --Implemented monitoring programs for two highly endangered species 
        of raptors on Grenada and the Dominical Republic.
    I have been told that during briefings before staffs of this 
subcommittee that USAID has not been complimentary about this project. 
``Unproductive'' and ``not providing the agreed upon cost share'' are 
two of the comments that have been reported to me.
    The conclusion I reach when I review the quarterly reports and 
financial status reports provided by The Peregrine Fund to USAID is 
different. The results and cost share significantly exceed the 
contractual obligation.
    Please elaborate on these comments. What was said about the 
projects and the basis from which it was said? Did you discuss these 
views with the project manager at The Peregrine Fund? If not, why not? 
If so, what was their response? Which individuals from USAID in DC have 
visited the project's headquarters? Any other locations? Any plans to 
visit?
    Answer. Latin America and Caribbean Deputy Assistant Administrator 
Karen Harbert has had discussions with Senator Craig's staff on these 
issues. The Assistant Administrator of Latin America and the Caribbean, 
Adolfo Franco, recently visited the Peregrine Fund in Panama. The Latin 
America Bureau recently hosted a meeting with the Vice-President and 
Program Manager of the Peregrine Fund in Washington to discuss this 
year and future year funding.
                                 ______
                                 
            Questions Submitted by Senator Patrick J. Leahy
                          iraq reconstruction
    Question. We were given the impression, before the war, that the 
Administration was prepared to move quickly to address the immediate 
relief and reconstruction needs. In fact, OMB, USAID, the Pentagon and 
State Departments were very upbeat about their plans to avoid some of 
the mistakes we saw, and continue to see, in Afghanistan.
    I don't want to diminish what has been done, but clearly the 
Administration has not met expectations. The humanitarian crisis that 
some predicted did not happen, but there are still many Iraqis without 
electricity, shelter, telephone service, gasoline, or other basic 
necessities that many of them had before the war. Law enforcement seems 
to be virtually non-existent. How do you explain this?
    Answer. Despite challenges associated with security and looting, as 
of July 6 national electrical generation was at 3,100 MW about 75 
percent of the pre-war highest level. A key 400 kv line from Bayji to 
Baghdad West was repaired and re-energized allowing excess power from 
the North to be sent to Baghdad. High tension lines between Baghdad and 
Basra remain down, preventing excess power from the South from reaching 
the capital. Electricity in northern and southern Iraq has been 
restored to pre-conflict levels and connected areas experience 24-hour 
availability. Electricity availability in central Iraq is at 1,350 MW, 
against an estimated current demand of 1,900 MW.
    USAID has received reports that gas station lines in Baghdad are 
much shorter and on June 5, gasoline distribution exceeded pre-war 
levels of 5-5.2 million liters/day, with 5.5 liters delivered. Reports 
from other cities such as Kirkuk indicate that fuel lines are almost 
non-existent.
                         iraqi civilian victims
    Question. Thousands of Iraqi civilians were killed or injured, or 
had their homes damaged or destroyed, in the war, many as a result of 
U.S. bombs. In the Supplemental, Congress included the following 
language:

``[$2.4 billion is appropriated for Iraq relief and reconstruction in 
Iraq] including . . . for assistance for families of innocent Iraqi 
civilians who suffer losses as a result of military operations . . .''

    The Statement of the Conferees reads as follows:

``. . . The managers intend that USAID and the Department of State, in 
coordination with the Department of Defense and nongovernmental 
organizations, will seek to identify families of non-combatant Iraqis 
who were killed or injured or whose homes were damaged during recent 
military operations, and to provide appropriate assistance.''

    This language is modeled on what we did in Afghanistan, where we 
are trying to relieve some of the suffering and the anger and 
resentment resulting from our mistakes. I don't know if you saw the May 
10th NY Times article, ``For Family That Lost 10 to Bomb, Only Memories 
and Grief Remain'', but I would encourage you to read it.
    Would you get back to me or my staff with a strategy to implement 
the law, so we can show that we are not turning our backs on these 
people?
    Answer. USAID is applying lessons learned from its experiences in 
Afghanistan to apply to Iraq, including assistance in the repair of 
damaged infrastructure based on community participation and 
prioritization. USAID has a number of mechanisms that are available to 
assist civilian victims, including its Community Action Program and 
infrastructure reconstruction efforts that address health and education 
facilities. Mission staff is actively assessing an appropriate strategy 
and will be consulting with the Office of Coalition Provisional 
Authority.
                        arab opinion of america
    Question. Last year, this subcommittee held a hearing on democracy 
programs. One of the issues we discussed was the low opinion of the 
United States held by many in the Arab world. We found it both deeply 
troubling and somewhat baffling, given that there is strong support in 
many Muslim countries for American culture and technology.
    I know that we have launched the Middle East Peace Initiative, 
increased our public diplomacy, and reviewed our aid programs to these 
countries to make them more effective.
    In spite of this, the situation seems to be getting worse, not just 
in the Middle East but in Muslim countries everywhere. A new Pew poll 
found that Arab hostility towards the United States is on the rise, 
including in key--and moderate--nations like Turkey, Indonesia, and 
Jordan. For example, when asked who they have more confidence in, 
President Bush or Osama bin Laden, 55 percent of Jordanians favored bin 
Laden and only 1 percent favored President Bush. In Indonesia it was 58 
percent to 8 percent.
    Why do you think we are losing the battle of hearts and minds in 
the Arab world?
    Do you think these programs be effective if there is no resolution 
to the Israeli-Palestinian conflict?
    Answer. We defer this question to the State Department.
                      millennium challenge account
    Question. $1.3 billion of the President's fiscal year 2004 budget 
is for the first installment of the new Millennium Challenge Account. I 
support this, although I do not agree with the White House's plan to 
create a new corporate bureaucracy to manage it. Who would implement 
these programs?
    Answer. The MCA is still a legislative proposal and as such a 
number of the details await definitive legislative treatment. 
Nonetheless, the Administration has given a great deal of thought to 
how the MCC could be best implemented.
    MCA programs would be founded on a partnership and be very focused 
on one or two key strategic objectives that the country has identified 
as its top priority to stimulate growth. In order to develop a 
proposal, the MCA would ask countries to engage in a consultative 
process with all the relevant civil society and private sector groups. 
One of the central principles of the MCA is that it be a transparent 
process from start to finish. This is why it is important that the 
initial phase of developing a country proposal set the tone and 
foundation for the development partnership. While the process may vary 
considerably from country to country, the themes of transparency and 
country leadership and ownership of the proposal are critical.
    In some cases, technical assistance may be required to help a 
country develop a proposal, which the MCC could offer. However, the 
country would be managing the process; it would not be a case of the 
MCC hiring consultants to develop a proposal it wants.
    If a country's proposal is selected, a country contract would be 
negotiated between the MCC and government. This does not imply that 
those funds would only go to the government. To the contrary, it is 
anticipated that MCC funds would go to a variety of national and 
community actors and alliances. However, the government would sign the 
agreement with the MCC and have overall responsibility for managing and 
overseeing the contract. The reason a contract approach was chosen was 
to underscore that both parties have an obligation to meet the terms 
and conditions outlined in the contract.
    The Administration anticipates that MCC funds would mobilize a 
variety of economic actors in each country; to the extent that a 
development result requires a public sector investment (schools or 
roads), funds would be channeled through the government. However since 
economic growth inevitably depends on the activities and investments of 
the private productive sectors, community groups and civil society 
organizations, the Administration expects that these institutions would 
also participate, and even implement the bulk of the investments. In 
all cases, the Administration expects that MCC funds would be disbursed 
directly to the institutions implementing activities under the MCC 
contract through the most flexible, but accountable mechanisms.
    If a country selected for MCC funding has a USAID mission and 
program, USAID would likely undertake a strategic review of the 
program. In many cases, the USAID program would likely transition to 
support the MCC contract. Some programs, such as those fighting HIV/
AIDS or trafficking in persons, might well be continued, while others 
might logically be phased out or incorporated in the MCC program. 
Indeed, one of the ways that USAID would complement the MCC is that 
USAID has the ability to address regional issues, such as disease, 
water resources, transport linkages, etc., that the MCC, by virtue of 
being country-specific, cannot.
    One of the basic premises for implementation of the MCC is that it 
should be demand-driven. The Administration does not want to prescribe 
the mechanics of how activities would be implemented. The 
Administration anticipates that this would vary considerably from 
country to country, knowing there are no ``cookie-cutter'' approaches 
that would work across the board. However, the goal would be to employ 
simple implementation mechanisms that require less oversight and less 
U.S. management than traditional projects. There are a variety of 
mechanisms for spending the funds, such as contracts or grants, but 
these could be managed by the host country, following their policies 
and procedures.
    Because the management approach of the MCC would be to employ local 
institutions for country development, it is appropriate that the MCC, 
too, rely heavily on strong local institutions for the in-country 
expertise it requires. Economic and financial analysis of specific MCC 
investments can be contracted locally. Technical advisory services to 
the MCC can be contracted locally. Monitoring and evaluation can 
largely be contracted locally. Therefore, the Administration 
anticipates that the full-time presence of U.S. Government employees 
needed to manage the MCC could be significantly reduced.
    Even though the Administration envisions a strong reliance on local 
institutions, there would still be a need for limited MCC staff 
presence in the field to facilitate, manage and oversee the 
partnership. Due to the limited staffing, the Administration 
anticipates that the Ambassador and Embassy staff would play a strong 
supportive role of the MCC. We also believe that USAID field staff, 
with its development expertise and knowledge of local culture and 
context, would play a key role in supporting the MCC.
    USAID presence in the field has rightly been repeatedly recognized 
as its strongest suit. Thirty years of development experience has 
taught the Agency that country context matters a great deal. USAID's 
very capable field Missions could provide critical support to the MCC, 
helping to work with local partners, finding creative, local solutions 
to problems, and generally facilitating the work of the MCC. The basic 
USAID activity in many of the likely MCA countries has been knowledge 
transfer and building local capacity and institutions. In some cases, 
continued USAID programs in institution building might be necessary for 
a time to further build country capacity to manage MCC programs and 
resources. USAID anticipates having a key role in supporting MCC 
programs, USAID does not want to adopt a black or white approach to how 
it would relate to the MCC in every country; rather we think each 
country would need to be reviewed on a case-by-case basis.
    Question. This is supposed to be new money, yet both the Child 
Survival and Health Programs account and the Development Assistance 
account, are being cut in the President's budget. How do you explain 
this?
    Answer. The MCA reflects a key part of President Bush's historic 
commitment to increasing foreign assistance. The President's national 
security strategy placed unprecedented emphasis on the role of 
development as a tool of foreign policy. This emphasis is reflected in 
his budget for foreign affairs. In his fiscal year 2004 Budget, 
President Bush requested $28.516 billion for the Function 150 Account, 
an 11 percent increase over $25.652 billion for the fiscal year 2003 
Request. The fiscal year 2004 request for the Child Survival account is 
higher than the request for fiscal year 2003. With respect to 
Development Assistance, it is anticipated that activities in this 
account would be complemented by the MCA and the Famine Fund and would 
improve the overall delivery of effective foreign assistance.
    Question. I also have questions about eligibility for the 
Millennium Account. Countries must show that they are taking serious 
steps to combat corruption, support health and education, and good 
governance. That makes sense. But a country like Brazil would not be 
eligible for the MCA because its per capita income is too high. Brazil 
is a country of 100 million people of immense importance to the United 
States, where a small percentage of the population is very rich and the 
vast majority is desperately poor. Shouldn't we look at ways to use the 
MCA to promote better policies in regions or states of a country with 
such serious needs, and of such importance to the United States, as 
Brazil?
    Answer. MCA is part of an unprecedented and concerted commitment of 
President Bush to increase and improve the effectiveness of foreign 
assistance. It is the President's intention that the MCA, if enacted, 
would focus on the poorest countries. In the first year of the MCA, the 
President proposed that only the world's 74 poorest countries, those 
that have a per capita income of $1,435, and that are eligible for the 
soft window of the World Bank, would be considered for the program. 
That is because the MCA is targeted on spurring growth in the best 
performing poorest countries, providing the level of resources that can 
really make a difference in moving them to a higher growth trajectory. 
It will rely on country institutions--investors, business people, 
political leaders and civil society--to design and lead the economic 
growth of the country. MCA, as proposed, would therefore only assist a 
limited number of countries. That leaves the large majority of the 
developing world to USAID and other agencies and actors. Since the MCA 
has not yet been enacted, countries have not yet been selected so it is 
unclear if Brazil would qualify for MCA assistance. Nonetheless, 
assuming Brazil would not qualify for MCA, the country would still 
receive assistance from USAID.
                         development assistance
    Question. Despite the $2.5 billion increase above the fiscal year 
2003 level, the President's fiscal year 2004 budget request would cut 
funding for the Development Assistance account by $35 million. This 
account funds everything from agricultural research to children's 
education to environmental conservation to democracy building. It funds 
the bulk of USAID's programs to alleviate poverty. How do you justify 
cutting these programs? The total amount requested for Development 
Assistance for fiscal year 2004 is $1.345 billion. That is less than my 
tiny State of Vermont spends on public education. Do you believe that 
this is enough for the richest, most powerful country in the world to 
spend on combating global poverty?
    Answer. In his fiscal year 2004 Budget, President Bush requested 
$28.516 billion for the Function 150 Account, an 11 percent increase 
over $25.652 billion for the fiscal year 2003 Request. This commitment 
reflects President Bush's strong support for programs to assist those 
less fortunate overseas. USAID's Development Assistance funding will be 
complemented by other presidential initiatives such as the Millennium 
Challenge Account ($1.3 billion requested) and the Famine Fund ($200 
million requested) to assist in the effort to combat global poverty and 
its ill effects.
                         complex emergency fund
    Question. Among the increases is $100 million for an emergency fund 
for ``complex foreign crises.'' Are you familiar with this? Isn't it 
essentially a blank check? What limits would there be on the use of 
this fund? Could it be used for weapons?
    Since the President has asked for this authority ``notwithstanding 
any other provision of law,'' what is to prevent the fund from being 
used to supply weapons to an autocratic government that violates human 
rights?
    Between the Peacekeeping Operations, Refugees, and Disaster 
Assistance Accounts, it seems like the Administration already has broad 
authority to respond to the complex foreign emergencies. What would 
this fund allow you to do that you can't already do?
    Answer. As the President's fiscal year 2004 budget states: This is 
a proposal for a new appropriation that is intended to assist the 
President to quickly and effectively respond to or prevent unforeseen 
complex foreign crises by providing resources that can be drawn upon at 
the onset of a crisis. This appropriation will be used to fund a range 
of foreign assistance activities, including support for peace and 
humanitarian intervention operations to prevent or respond to foreign 
territorial disputes, armed ethnic and civil conflicts that pose 
threats to regional and international peace, and acts of ethnic 
cleansing, mass killing or genocide. Use of this appropriation will 
require a determination by the President that a complex emergency 
exists and that it is in the national interest to furnish assistance in 
response. This appropriation will not fund assistance activities in 
response to natural disasters because existing contingency funding is 
available for that purpose. (Source: Budget of the United States 
Government, fiscal year 2004--Appendix: International Security 
Assistance, pp. 906-7).
                          food aid and famine
    Question. During the consideration of the last two appropriations 
bills--the Omnibus and the Iraq Supplemental--I worked with Senators 
Nelson and Kohl to attach two amendments that added over $1 billion 
dollars to help address food shortages, especially Africa.
    Unfortunately, during the conferences on these bills, the House 
majority, working with OMB, knocked out $500 million of this badly 
needed food aid funding. What would USAID do with an extra $500 million 
in food aid? Could it be put to good use, for instance, in Ethiopia?
    Answer. The United States remains far and away the largest donor of 
emergency food aid in the world. USAID targets its emergency food aid 
to the most severely affected populations worldwide. In the past 18 
months, the Administration has provided 500,000 metric tons of 
emergency food aid to Southern Africa. This year, U.S. donations to the 
Horn of Africa will reach about 1 million metric tons. The President's 
budget reflects a careful prioritization among the competing demands 
for international humanitarian assistance. The President's request for 
fiscal year 2004 retains our commitment to addressing the most severe 
and critical emergency food aid needs. In addition to the requested 
Public Law 480 Title II resources, the President has proposed a new 
$200 million Famine Fund specifically designed to provide a new, 
flexible tool to meet dire, unexpected famine needs. The Bill Emerson 
Humanitarian Trust is available to meet unanticipated needs.
    Question. I recognize that the Administration has requested $200 
million for a new Famine Fund. I strongly support this request. 
However, wouldn't the Famine Fund be more effective if the President's 
request did not cut more than $300 million from the Disaster Assistance 
and Title II food aid budget that could be used to augment resources of 
the Famine Fund? Aren't we just moving money around?
    Answer. Regarding your questions on food aid and famine, the 
Administration believes that the $1.185 billion Public Law 480 Title II 
request for food aid will enable the United States to meet its fair 
share of anticipated worldwide emergency, protracted relief and 
recovery, and non-emergency food aid requirements. The President's 
combined request for Public Law 480 Title II and the Famine Fund for 
fiscal year 2004 represents an increase in USAID-managed food aid 
resources of over 16 percent compared to the fiscal year 2003 
President's request. The Bill Emerson Humanitarian Trust is available 
to meet any significant unanticipated emergency food aid needs. The 
additional authority the Administration hopes to receive with the 
Famine Fund will provide it with the necessary additional flexibility 
to respond more effectively to famine threats than is currently 
possible.
    Question. What will the President's budget request mean for U.S. 
contributions to world food needs, compared to historic levels for U.S. 
contributions of 33-50 percent? What percentage of total contributions 
will the President's budget provide?
    Answer. The President's budget request was based on a review of 
projected 2003 emergency needs and emergency trends for the past 
several years. Exclusive of Iraq, if worldwide emergency food needs 
remained static, the fiscal year 2004 Title II budget request would 
provide sufficient food aid resources to meet approximately 28 percent 
of worldwide emergency, protracted relief and recovery needs. Resources 
will benefit drought victims, internally displaced populations, 
refugees, and other food insecure groups. The Administration also 
considers the Bill Emerson Humanitarian Trust as a viable tool for 
unanticipated humanitarian food needs, as has been evidenced in its 
effective use in fiscal year 2002 for the Southern Africa drought 
response and in fiscal year 2003 for Ethiopia drought relief and Iraq 
post-conflict support.
                                 uganda
    Question. Mr. Natsios, what do believe that it will take, in terms 
of diplomatic capital and foreign assistance funding, to obtain a 
peaceful resolution to the conflict in Northern Uganda that involves 
the Lord's Resistance Army and Government of Uganda. Please discuss 
specifics such as staffing needs, types of additional assistance, or 
legislation that may be helpful in resolving this crisis.
    I have been informed that USAID plans to spend $1.4 million in 
emergency relief to the northern areas. Is this correct? Do you believe 
that this is sufficient?
    Answer. The longstanding conflict in northern Uganda has it's 
origins in ethnic and political conflict going back to Uganda's 
earliest years as a nation. The Lord's Resistance Army (LRA) leadership 
is erratic and its objectives obscure. So in spite of the efforts of 
many well-intentioned parties, the situation is as bad as ever. 
Nevertheless, the United States is now committed to redoubling our 
efforts, and we are working to see if we can help bring about a better 
situation for the people in northern Uganda.
    USAID has responded to this humanitarian crisis with both food and 
disaster assistance, as well as development assistance resources to 
support a northern Uganda peace effort. The U.S. Ambassador in Uganda 
and the USAID Mission Director are coordinating their efforts to 
develop confidence-building measures between the Government of Uganda 
and the Lord's Resistance Army to work toward a peaceful settlement to 
the current conflict. USAID staff in Washington and the U.S. Department 
of State are also working closely together to support our diplomatic 
and foreign assistance efforts with personnel and financial resources.
    USAID/Uganda's strategic development assistance interventions in 
the northern and western districts of Uganda aim to mitigate the impact 
of conflict and increase community resilience through humanitarian and 
relief-to-development assistance. USAID's $16 million Community 
Resilience and Dialogue activity, which began in September 2002 and 
will continue through 2007, assists the victims of conflict and torture 
including communities living under threat of attack, families that have 
moved to internally displaced persons (IDP) camps, current and former 
abductees, and ex-combatants taking advantage of amnesty. USAID/Uganda 
and the Government of Uganda have plans to begin a National 
Reconciliation Dialogue to explore the roots of Uganda's various 
conflicts and how to move Uganda beyond its cycle of mistrust among 
certain groups. USAID/Uganda currently has sufficient resources to do 
this under its Community Resilience and Dialogue Program.
    In fiscal year 2003, USAID's Africa Bureau has provided an 
additional $538,000 to fund full-time staff, third-party mediation 
efforts, and conflict resolution activities. In the future, additional 
development assistance resources will be needed to fund a program that 
will provide expertise to the Government of Uganda on negotiating a 
peaceful settlement with the LRA. This technical assistance would 
support the Government of Uganda's Presidential Peace Team to 
effectively engage the LRA.
    In response to the humanitarian crisis in fiscal year 2003 as of 
July 1, USAID Office of Foreign Disaster Assistance has provided over 
$3.7 million in emergency humanitarian assistance to Uganda in the 
sectoral areas of emergency health, nutrition, water and sanitation. 
Working through nongovernmental organizations, OFDA has assisted 
affected populations in Gulu, Kitgum, Pader and Lira districts. In 
addition, USAID/OFDA has provided funds to the American and Ugandan Red 
Cross Societies and the United Nations Office for the Coordination of 
Humanitarian Affairs to support general assistance programs and the 
coordination of activities throughout the region.
    USAID's Office of Food For Peace has also provided 81,660 metric 
tons (MT) of Public Law 480 Title II emergency food assistance, valued 
at $50.1 million, through the World Food Program to meet immediate food 
needs. This amount is more than triple the fiscal year 2002 spending 
level of $15.3 million. As a result of the caseload in the north and 
the southern drought, the caseload has jumped dramatically from 250,000 
to 1.3 million people. The majority, 800,000 beneficiaries, are in the 
north and the remaining 500,000 are in the drought-stricken Karamoja 
region in the Northeast.
    In the event of a peaceful resolution to the conflict, additional 
development and humanitarian resources would be required to meet the 
needs of demobilization and reintegration of populations affected by 
the conflict. Resource levels will be determined by needs assessments 
and conditions on the ground.
                                 sudan
    Question. Additionally, what resources will you need to do quick 
impact programming in Sudan to help facilitate peace there?
    Answer. USAID is currently developing plans, jointly with the 
Sudanese parties and other donors, to address the funding needs of a 
quick-impact program after a peace agreement is signed. Any peace 
agreement must be followed by quick-start activities of rapid visible 
benefits to communities, rehabilitation of basic infrastructure and 
services, assistance to returning internally displaced persons (IDPs) 
and refugees, and support of the new southern entity governing the 
South. We welcome congressional interest in this matter and look 
forward to further communication as plans develop.
                          women in development
    Question. Year after year, the Congress has recommended $15 million 
for USAID's Office of Women in Development, but USAID has consistently 
funded the Office at only about $10 million. This year I am told you 
have cut it to $6 million. What do we have to do to get the funds for 
this office that we believe it needs? Should we earmark it?
    Answer. The budget allocation for WID for fiscal year 2004 reflects 
the realignments necessary to accommodate the overall budget reductions 
for the EGAT bureau. This will not adversely affect WID field 
operations because the new ``Gender Matters'' indefinite quantity 
contract (IQC) insures that field missions will have expanded access to 
gender-related technical assistance.
                   child survival and health programs
    Question. As I mentioned in my statement, the President has 
received justifiable praise for signing the AIDS authorization bill. 
But at the same time his budget would cut key foreign aid programs. As 
I said on the Senate floor 10 days ago, funding for vulnerable children 
is cut by 63 percent, funding to combat other infectious diseases 
besides AIDS is cut by 32 percent, Disaster Assistance is cut by 19 
percent, and Development Assistance is cut by 3 percent. There are also 
cuts in food aid, refugee assistance, and other global health programs.
    In response to my remarks, the White House spokesman said I was 
making an ``apples and oranges'' comparison and that the Administration 
has proposed programs that would accomplish some of the same goals. Can 
you explain what he meant? Wasn't the MCA supposed to be new money?
    Do you support these cuts, at a time when SARS is showing, once 
again, how vulnerable we are to infectious diseases that originate half 
way around the world?
    Answer. The foreign assistance budget request reflects an attempt 
to maintain a balance between health and other important development 
areas. Within our parameters, our fiscal year 2004 request for health 
programs has increased compared to our fiscal year 2003 request.
    At the same time, the Administration has made HIV/AIDS its highest 
health priority. This, unfortunately, has meant a reduction in funding 
for child survival, maternal health and infectious diseases from 
previous years. To minimize the impact of lower funding, we will 
continue to work with partners in the public and private sector to 
leverage efforts, and focus on populations most in need and on the most 
effective interventions. In infectious disease we would protect 
globally important core programs in TB and malaria--given the 
tremendous burden of these diseases.
    SARS, for the time being, is still a new outbreak requiring 
investigation and emergency control, rather than a developmental issue. 
Our priority must remain focused on addressing TB and malaria, which 
kill millions each year and devastate families, communities and local 
economies. Nevertheless, SARS clearly demonstrates that health 
challenges and epidemiology will continue to change, and highlights the 
importance of planning and flexible and sufficient funding to address 
these changes quickly and effectively.
                                hiv/aids
    Question. Mr. Natsios, the HIV/AIDS authorization bill that the 
President signed recently recommends that funding to combat HIV/AIDS be 
allocated as follows--55 percent on treatment; 15 percent on care, and 
20 percent on prevention. In addition, one-third of the amount of the 
money for prevention must be spent on abstinence programs.
    How is [this] different from the way in which the Administration 
currently spends funds on HIV/AIDS programs? Do you support these 
percentage earmarks? Why not 50 percent, 10 percent and 30 percent ? 
Why not earmark all your health programs like this?
    The bill also establishes an AIDS ``Coordinator'' for all the U.S. 
Government's international AIDS activities. But rather than just be a 
coordinator, this person would have the final say over how every dollar 
is spent, including USAID's budget for AIDS, TB, and malaria. Why does 
this make sense?
    Answer. USAID's HIV/AIDS programs have been traditionally 
prevention-focused. However, in recent years, we have begun to 
integrate significantly more care and treatment into our programs. The 
availability of care options is essential in order for people to agree 
to voluntary testing and counseling. With major declines in the price 
of antiretrovirals (ARVs), and with greatly increased worldwide support 
for ARVs, we are now adding ARV treatment to the care programs we have 
been supporting for some time. While this will increase our treatment 
budget, it does not necessarily diminish our focus on prevention.
    As you know, the needs are great in all areas of prevention, care 
and treatment. The scope and ``maturity'' of the epidemic, and the 
available resources from the Global Fund, other donors and host 
governments vary by country. There is, then, variation in the balance 
of need between these categories in different countries. USAID, 
therefore, seeks the greatest possible flexibility in deciding how to 
program its funds, and would prefer not to have to adhere to strict 
percentages in administering these funds on a country-by-country basis, 
but can meet these percentages overall.
    Assisting in the international struggle against HIV/AIDS does have 
foreign policy implications, and needs foreign country expertise. The 
State Department, therefore, is the right place for coordinating and 
overseeing these efforts. Further, a single AIDS coordinator can 
facilitate division of responsibilities among the increasing numbers of 
U.S. agencies involved in the fight against HIV/AIDS. For over a 
decade, USAID was the only U.S. Government agency fighting the pandemic 
internationally. In recent years, however, the Departments of Health 
and Human Services, Defense and Labor have all joined the fight. More 
resources and expertise are what we need in this complex battle. 
Finally, the coordinator model for the SEED and FSA account funds has 
been successful, and we believe such a model for HIV/AIDS would be 
equally successful.
        fiscal year 2004 budget request for former soviet union
    Question. The President's fiscal year 2004 budget request would cut 
funding for the former Soviet Union from $755 million to $576 million. 
Aid to Russia would fall from $148 million to $73 million. I know of 
many USAID programs to promote legal reform, improve health care, 
combat organized crime, improve market-based agriculture, clean up 
toxic pollutants, and other initiatives that will be shut down because 
of this cut. Does that make sense to you?
    Answer. Part of the apparent large cut in the overall fiscal year 
2004 request for Freedom Support Act (FSA) assistance reflects a shift 
in funding for educational and professional exchanges from the FSA 
account in the Foreign Operations appropriations request to the Bureau 
for Educational and Cultural Affairs line item in the Commerce, State, 
Justice appropriations request.
    The lower request level also recognizes, particularly for Russia, 
progress already achieved on reform, especially economic reform. 
Programs in this area will likely be phased out over the next several 
years.
    We realize that Russia continues to face challenges in democratic 
development. We are developing a strategy to phase out FSA assistance 
to Russia over the next several years that will seek to ensure a legacy 
of sustainable institutions to support civil society and democratic 
institutions. During this time, we will increasingly focus on democracy 
and rule of law to ensure that we consolidate and sustain the progress 
made over the past decade. We will seek to advance structural changes 
that are needed to create a hospitable environment for Russian civil 
society.
    FSA technical assistance programs have played a vital role in 
advancing progress toward rule of law in Russia, including vital 
support for the professionalization of Russian court administration and 
judicial training; emphasis upon the importance of judicial ethics 
(resulting in more openness by the Russian courts concerning 
disciplining of judges); reform of law school curriculum, including 
introducing and supporting clinical legal education; and supporting 
every aspect of the development of the new criminal procedure code, 
which has drastically changed the roles for Russian judges, prosecutors 
and defense attorneys. As another example, legal volunteers from 
Vermont, including judges, practicing attorneys, and staff of Vermont 
Law School, have worked with the Republic of Karelia on a professional 
development program for Karelian judges, legal educators, and 
practicing lawyers. Our focus is now on helping the Russian bar 
consolidate the gains it has made, particularly by sponsoring 
professional education events to help the bar hone its advocacy skills.
    In 2001, an interagency task force identified health as one of the 
three priority areas for FSA assistance in Russia. Russia's growth rate 
in HIV/AIDS in 2001 was one of the fastest in the world. Multi-drug 
resistant TB is another serious problem, particularly in prisons. 
Funding for health programs has increased over the last two years and 
we plan to continue these programs for some years to come.
    Some anti-crime activities that had been funded under FSA, such as 
programs to combat organized crime and money laundering, will likely 
continue, perhaps at different levels, with alternate funding sources.
    Our strategy is not yet complete, so we don't have all the answers. 
But we are determined to help Russia preserve the remarkable gains it 
has made since 1992 and to complete the transition into a market-based 
democracy.
                            renewable energy
    Question. There are more than 2 billion people in emerging markets 
without electricity. There is an enormous opportunity for U.S. 
companies that could help develop renewable energy resources to serve 
their needs. Just as an example, I'm told that there is a $700 billion 
global market to supply small hydropower technology and know-how over 
the next few years.
    While USAID seems to give a lot of attention to the oil and gas 
areas within the energy sector, renewable and clean energy technologies 
have not enjoyed the same strong support by USAID even though 
congressional intent has been clear. Last year, we provided $175 
million for energy conservation, energy efficiency, and clean energy 
programs. Are you using any of this money for oil and gas development? 
What steps are you taking to ensure that these funds are used to 
promote a wide range of renewable energy sources?
    Last year we required the President to submit a report on 
greenhouse gas emissions, as we have in past years, ``not later than 45 
days'' after the President's submission of his fiscal year 2004 budget 
request. We should have received that report already. Do you have any 
idea where it is?
    Answer. For fiscal year 2003, Congress directed USAID to spend $175 
million on global climate change mitigation and adaptation, energy 
conservation, energy efficiency, and clean energy programs. The report 
containing information on how USAID is complying with this directive is 
currently at OMB. The energy expenditures for this directive total 
$94.4 million which includes transfers to DOE and NRC. USAID's energy 
assistance programs focus on three critical policy dimensions of the 
energy sector: improved governance of the energy sector; enhanced 
institutional capacity of public, private and non-governmental energy 
sector participants, and increased public understanding of, and 
participation in, the energy sector. Creating the conditions for 
economic growth and poverty reduction requires increasing access of 
people and business to modern energy, and increasing the affordability 
of energy for consumers. This access and affordability, in turn, 
requires a transformation of energy markets for all energy 
technologies. Such market transformation involves changing the 
foundation of the sector from politics to market economics and in 
improving the effectiveness of government, private sector, and consumer 
institutions in terms of management practices, technical operations, 
resource use, and energy consumption. Therefore, our energy governance 
programs benefit all fuel sources, including oil, gas, as well as 
renewable energy and energy efficiency. Our programs in the oil and gas 
sector are modest and include developing legal and regulatory 
frameworks and some pilot scale oil field clean up activities in 
Kazakhstan. With respect to renewable energy sources, USAID funds 
activities that ensure that reformed energy sectors pay particular 
attention to all clean energy technologies and incorporate clean 
technologies and alternative energy into the mix. USAID's programs seek 
to overcome market and institutional barriers to increasing access to 
energy in rural areas and encouraging widespread adoption and use of 
clean and renewable energy systems to meet development needs. Elements 
include: supporting policies, technologies and business models that 
result in increased access to modern energy services in underserved 
areas; fostering implementation of policy or regulatory changes that 
clarify or establish rights and incentives for the cost-effective 
utilization of clean and renewable energy resources and technologies; 
mobilizing business entities to pursue clean energy projects; 
leveraging financial commitments to clean energy sources; and 
catalyzing the establishment or strengthening of host-country 
institutions for the explicit purpose of promoting clean and renewable 
energy to meet rural development needs. This program directly supports 
the White House Signature Clean Energy Initiative's (CEI) and the 
Global Village Energy Partnership (GVEP). Our programs make extensive 
use of Cooperative Agreements with U.S. NGOs that partner with in-
country institutions, Letter Grants with international development 
organizations and multi-lateral development banks, Inter-Agency 
Agreements with other USG agencies (DOE labs, EPA, USDA), and works 
closely with other USG agencies (State and Commerce).
                            energy programs
    Question. I have worked with Senator Byrd and others to open and 
expand international energy markets and export U.S. clean energy 
technologies to developing countries. These efforts help meet our 
national and international energy needs as well as address related 
trade and environmental objectives.
    The Clean Energy Technology Exports Initiative can help meet that 
challenge. This bipartisan initiative had its genesis in the Senate 
Appropriations Committee, and could aid in meeting other nations' 
infrastructure and development needs while also increasing the 
deployment of a range of clean energy technologies, including 
renewable, energy efficiency, clean coal, and hydroelectric 
technologies. The Administration has talked about this, but little has 
been done.
    I assume you agree that it is in the long-term strategic interest 
for the United States to help open and expand international energy 
markets and export a range of U.S. clean energy technologies?
    Are you aware that USAID is a leading agency involved in the 
implementation of the Clean Energy Technology Exports Initiative? How 
you are working to fulfill your agency's mandate under the Initiative's 
strategic plan?
    What actions is USAID taking to work with other federal partners 
and non-governmental organizations, private sector companies, and other 
international partners to implement this plan?
    Answer. USAID, the Department of Energy, and the Department of 
Commerce, working in collaboration with U.S. industry, spearheaded the 
preparation of a five-year strategic plan for a clean energy technology 
exports (CETE) program. A draft of the five-year strategic plan was 
completed and submitted to the U.S. Congress. The strategic plan 
outlines a program to increase U.S. clean energy technology exports to 
international markets through increased coordination among federal 
agency programs and between these programs and the private sector. 
While supplemental legislation to fund the five-year plan has not been 
forthcoming, CETE Agencies have used the strategic plan as a basis for 
reconciling inter-agency relations in a way that emphasizes 
institutional strengths and avoids overreaching for areas not in 
Agencies' missions.
                             coffee crisis
    Question. As you know, the rapid decline in the price of coffee has 
had a devastating impact on economies of developing countries, 
especially in Latin America. The coffee price crisis has also hampered 
our foreign aid and counter-narcotics efforts. The President of 
Colombia wrote a letter to me making the connection between the coffee 
price crisis and our foreign aid programs.
    In November 2002, the House and Senate passed bipartisan 
resolutions urging the Administration to come up with a global, 
coordinated strategy to deal with this crisis. What progress has been 
made in formulating this strategy? Is USAID involved?
    Answer. The Department of State is leading an interagency USG 
effort to prepare a strategy on the coffee crisis. USAID is a member of 
the drafting committee. A discussion draft has been completed and 
circulated through an inter-agency review process. It is scheduled to 
be submitted to the Deputies meeting hosted by the National Economic 
Council the week of July 21.
                          university requests
    Question. We developed a new approach that USAID strongly supported 
and which I believe you are familiar with. Unlike in the past, we no 
longer specify which university requests USAID should fund, nor do we 
specify a recommended dollar amount. We do list the university 
proposals which we believed deserve serious consideration.
    Unfortunately, it has not turned out as we had hoped. Universities 
are still getting the run around. First, assuming they can locate 
someone who can give them an answer, they are told that Washington 
makes the decisions. Then they are told that the missions make the 
decisions. This goes on until the universities eventually give up, 
USAID declares victory, and we get the complaints.
    I think we may have no choice but to earmark a pot of money for 
these programs. We tried to help you, but it has not worked out. Do you 
have anything to say?
    Answer. We believe that the new Agency approach to managing 
university requests is working well. We have processed 68 university 
proposals (from 58 higher education institutions), which are listed on 
the House and Senate Reports. A summary of this approach and a status 
report on the 68 proposals follow below.
    Two years ago USAID established a Higher Education Community (HEC) 
Liaison position in its Office of Education in the Bureau for Economic 
Growth, Agriculture and Trade. Martin Hewitt now serves as the HEC 
liaison and is the key point of contact for universities seeking 
information and advice on the opportunities and programs within USAID.
    For tracking and management of unsolicited concept papers and 
proposals, the HEC Liaison is supported by a working group within the 
Agency. This working group is composed of representatives from the 
regional and technical bureaus. The working group shares the 
responsibility for either reviewing the proposal in the regional or 
technical office (if the proposal is technical or sector specific with 
no country cited) or for distribution to a USAID Mission (if the 
proposal is explicit regarding a country where the planned activity 
will be conducted). The working group shares the responsibility for 
tracking the status of higher education proposals with the HEC Liaison. 
The group communicates frequently to ensure that the improvements in 
procedures and information flow are achieving their desired results.
    In the House Appropriations Committee Report 107-663 and the Senate 
Appropriations Committee Report 107-219, Congress included the 
requirement that USAID report on the status of 68 university proposals 
listed in the House and Senate reports.
    The following actions have been taken concerning university 
proposals:
  --The HEC Liaison sent e-mails to every higher education institution 
        mentioned in the University Programs section of the Senate and 
        House Reports to direct them toward information about Agency 
        solicited competitive processes and opportunities. (Ten of the 
        universities mentioned submitted applications to the University 
        Partnerships competitive grant program).
  --The HEC Liaison made personal telephone calls to thirty higher 
        education institutions listed in the Senate and House Reports 
        to ascertain the status of their proposal submissions and to 
        provide guidance.
  --The HEC Liaison has been contacted by at least thirty higher 
        education institutions to request information about guidelines 
        for developing concept papers, proposals, and for information 
        about how the review process works (if the proposal aims to 
        work in a particular USAID/Mission, then the proposal is shared 
        with the Mission for review, if not, the proposal is reviewed 
        in a technical or regional bureau). Every call or e-mail from 
        higher education institutions to the HEC Liaison is responded 
        to in an informative and timely way.
  --The HEC Liaison has participated in numerous conferences, meetings, 
        site visits, regarding the USAID-University relationship and 
        the specifics for how Universities can address Agency policies, 
        programs, projects and obtain support for doing so.
    Following is the status of university proposals mentioned in the 
House and Senate Reports (June 23, 2003):

  
------------------------------------------------------------------------
Total number of universities cited.........................          58
Total number of proposals cited............................          68
Number of proposals received...............................          37
Number not received........................................          31
Of those received:
    Number of proposals approved...........................          17
    Number rejected........................................          12
    Number under review....................................           8
Total proposal funding (millions of dollars)...............          15
------------------------------------------------------------------------

    Summary:
    (1) 54 percent of proposals mentioned in the House and Senate 
Reports have been received.
    (2) 46 percent of proposals received have been funded.
    (3) 32 percent of proposals received have been rejected.
    (4) 22 percent of proposals received are under review.
    The 17 successful proposals were approved because they met the 
review criteria contained in USAID's brochure and website U.S. Higher 
Education Community: Doing Business with USAID. The criteria include 
two, which bear on the proposed activities' consistency with foreign 
policy and development goals. They are: the extent to which the 
proposal supports USAID's mandate and objectives, and the anticipated 
long-term impact of the project and the nature of the on-going 
relationship between institutions.
    The major reason that the twelve proposals were rejected included:
  --The failure to meet or support USAID's mandate or objectives in the 
        country, region, or sector
  --The duplication of ongoing efforts
  --Budget limitations in targeted bureaus, countries
  --Lack of technical merit
    In each case where proposals were rejected, a letter was sent to 
the applicant informing them of the reasons why the proposal was not 
accepted.
                                 ______
                                 
               Questions Submitted by Senator Tom Harkin
                people with disabilities in afghanistan
    Question. As you may know, I have been a long-time advocate for the 
rights of people with disabilities and was one of the main authors of 
the Americans with Disabilities Act. It is very important to me that 
any reconstruction supported with U.S. funding be accessible to people 
with disabilities and allow them to equally participate in civic and 
community life. As I am sure that you will agree, it is critical that 
at this crucial period in Iraq and Afghanistan where the people in 
these two nations are rebuilding their futures, all voices be heard. It 
is my hope that the Administration has given this some thought and I 
would be eager to learn what the short-term and long-term plans USAID 
has developed to address this important issue? I use the term 
reconstruction to mean both physical structures and civil society. What 
programs does USAID have to assist people with disabilities in 
Afghanistan? Again, I would be interested in the short-term and long-
term programs.
    Answer. In answer to both questions, USAID has taken an active role 
in the development of two programs aimed at war-victims and people with 
disabilities through the Leahy War Victims' Fund. One is a million 
dollar grant to the Comprehensive Disabled Afghans Programme (CDAP) run 
by UNOPS, to address needs of disabled Afghans. The other is a $2 
million program from the Displaced Children and Orphans Fund (DCOF) 
which will address some of these issues as well.
    The Comprehensive Disabled Afghans' Programme (CDAP) has been 
selected as the lead entity to assist the Ministry of Martyrs and 
Disabled in developing national capacity in the field of disability. 
This project provides quick impact interventions that will help to 
address the problems faced by the Government of Afghanistan.
    Consultation with the disabled population of Kabul, particularly 
those involved in recent political activities, has established the need 
for community-based outreach centers for the disabled in Kabul. The 
disabled community would like to see basic rehabilitation services 
provided, along with some ancillary services, such as job assistance.
    Current procurement is open for bids for the running of five 
rehabilitation centers. It is expected that the centers will open no 
later than September 01, 2003 providing jobs, training and 
comprehensive rehabilitation services.
    DCOF has awarded a $2 million grant to three leading child-focused 
agencies-Child Fund Afghanistan (CFA--also known as Christian 
Children's Fund in the United States, International Rescue Committee, 
and Save the Children/U.S.--to assist 50,000 vulnerable children and 
families, including orphans, displaced children, working children, and 
former child soldiers.
    The three agencies, which work together as part of the NGO 
Consortium on the Care and Protection of Children with CFA playing the 
finance management role), will each focus on vulnerable children in a 
particular geographic area. CFA will work in northeastern provinces 
(Kunduz, Takhar, and Badakhshan); IRC will work in the Herat region; 
and Save the Children will work in Kabul. The work will include:
  --Specialized Community-based training
  --Targeted Community Programs like youth-led civic works projects, 
        vocational training, income generation, and infrastructure 
        rehabilitation.
  --Targeted assistance to highly vulnerable children, youth and 
        families through small grants, supplies and referrals.
    In addition, USAID will be constructing handicapped accessible 
schools and clinics throughout Afghanistan, and is facilitating the 
distribution of 10,000 privately donated wheel chairs to the disabled 
of Afghanistan.
                        security in afghanistan
    Question. Last year, President Bush said: ``We will help the new 
Afghan Government provide the security that is the foundation for 
peace.''
    A month ago, the Washington Post reported that a private USAID 
assessment concluded that: security issues have made it ``almost 
impossible'' to manage some programs in much of the country and 
``security risks will remain high for the foreseeable future.''
    The U.N. Peacekeeping Force is limited to operating in Kabul; the 
Afghanistan National Army is years away from being an effective force; 
and there are too few U.S. troops to bring order to many of the 
outlying areas. We are told there is talk of a NATO force, but so far 
it seems to just that--talk.
    In the meantime, the Karzai government is increasingly seen as 
incapable of wielding authority outside of Kabul. I assume you saw last 
Sunday's NY Times Magazine article about the continuing power of Afghan 
warlords. Aren't you concerned that this is undermining USAID's ability 
to rebuild the country? Shouldn't the United States be showing more 
muscle against the warlords, to back up the central government and keep 
reconstruction efforts in Afghanistan moving forward?
    Answer. The security situation continues to be a constraint and has 
hampered the development and reconstruction efforts. For example, 
demining on the highway had to stop for a couple of weeks because of 
attacks against the deminers. Security problems will continue to impact 
reconstruction efforts and are a serious concern for the upcoming 
elections. USAID staff are not able to visit and monitor projects 
without being accompanied by armed security guards, or in some cases, 
the military. This can also impact the monitoring of project 
implementation.
                      afghan ministry of education
    Question. What is USAID doing to support the Afghan Ministry of 
Education? Are you providing training and equipment, so it can begin to 
do its job?
    Answer. USAID has recently awarded an $18.5 million contract to 
Creative Associates International, Inc. (CAII), to implement the 
``Afghanistan Primary Education Program'' (APEP). This program supports 
the Ministry of Education (MOE) by providing textbooks for the current 
academic year, teacher training, radio-based distance education for 
teachers and accelerated learning opportunities for girls and boys who 
were denied educational opportunities under the Taliban. In addition, 
USAID fielded an education advisor to work with the ministry and assist 
with curriculum revision and other activities to support capacity 
development at the ministerial level. CAII is providing assistance to 
the MOE with budgeting, planning, and data collection and analysis. 
USAID, working with the University of Nebraska at Omaha and other 
partners, provided 15 million textbooks for Afghan children for the 
opening of schools last year. The University of Nebraska is also 
continuing with teacher training. USAID has also committed to building 
1,000 schools over the next three years.
                   afghan ministry of women's affairs
    Question. What about the Ministry of Women's Affairs (MOWA)? Are 
you helping to build its capacity, so it can work to address the needs 
of women who have been so repressed?
    Answer. Immediately upon reopening the Kabul Mission in January, 
2002, USAID fielded a Gender Advisor, who works closely with the 
Minister in planning activities, and initiated repairs to the MOWA 
headquarters. USAID is also working with MOWA on its financial 
management systems. USAID is funding the construction of 18 women's 
centers in Afghanistan, one in each province, thereby covering over 
half the country. We are also developing programs for these centers 
whereby women can come together and learn basic technical and 
vocational skills. In addition to supporting the Ministry of Women's 
Affairs, USAID has integrated gender issues into its programming, so 
that it can address the needs of women. USAID believes that the MOWA 
should work to increase the capacity of relevant ministries to 
mainstream issues that are relevant to women. We are concerned that 
strengthening the MOWA alone will not ensure programs effectively 
targeting women and girls are incorporated in the development agenda of 
the TISA.
                    people with disabilities in iraq
    Question. As you may know, I have been a long-time advocate for the 
rights of people with disabilities and was one of the main authors of 
the American with Disabilities Act. It is very important to me that any 
reconstruction supported with U.S. funding be accessible to people with 
disabilities and allow them to equally participate in civic and 
community life. As I am sure that you will agree, it is critical that 
at this crucial period in Iraq and Afghanistan where the people in 
these two nations are rebuilding their futures, all voices be heard. It 
is my hope that the Administration has given this some thought and I 
would be eager to learn what the short-term and long-term plans USAID 
has developed to address this important issue? I use to term 
reconstruction to mean both physical structures and civil society.
    Answer. USAID's policy regarding people with disabilities stresses 
the inclusion of people who have physical and mental disabilities and 
those who advocate and offer services on behalf of people with 
disabilities. This commitment extends from the design and 
implementation of USAID programming to advocacy for and outreach to 
people with disabilities. USAID's short-term plan has been to highlight 
this policy to our private sector partners, especially before starting 
rehabilitation evaluations of public facilities such as schools, 
hospitals and airports.
    USAID is also supporting $40 million in program funding to U.N. 
agencies, including UNICEF, and NGOs including the American Refugee 
Committee, CARE, Goal, IMC, IRC, Mercy Corps, Save the Children/U.S., 
and World Vision. The programs focus largely on Iraq's most vulnerable 
populations, which include people with physical and mental 
disabilities.
        usaid programs engaging israel in development activities
    Question. The United States and Israel are in the last stages of 
terminating a program called CDR/CDP that has been remarkably effective 
in spreading Israeli technology and its unique agricultural advances to 
nations in Africa, Asia and, particularly, in Central Asia. With the 
increased AID focus on decentralization of aid programs, is there 
anything that could be done to encourage our AID missions to utilize 
the special expertise Israel brings to rural development in the 
developing world?
    Answer. First, a clarification will be helpful. CDR (the 
Cooperative Development Research program) and CDP (the Cooperative 
Development Program) are two distinct programs. Only the CDP is in its 
final year of funding. CDR continues to be funded centrally at a level 
of $1.5 million per year.
    The Cooperative Development Research Program (CDR) has been an 
effective way of partnering researchers from developing countries in 
the Middle East, Africa, Asia, and Latin America with Israeli 
scientists. In addition to agriculture, research teams who have 
competed successfully for peer-reviewed grants have focused on projects 
in health and the environment.
    In recent years, the CDR Program has included a special initiative 
that enabled scientists in the Central Asian Republics to partner with 
Israeli and U.S. researchers. Due to a funding decision made by the 
regional mission in the Central Asian Republics, this special CDR 
program will no longer continue.
    The Cooperative Development Program (CDP) received its last 
allocation of central funding in fiscal year 2003. This program was 
designed to enable the Israeli development program, MASHAV, an arm of 
the Ministry of Foreign Affairs, to work with partners in developing 
countries on agricultural issues and to provide training on a variety 
of subjects in Israel. After many years of successful expansion and the 
commitment of about $75 million, it was agreed that central funding 
from USAID for this Program was no longer needed. However, USAID 
missions have been encouraged to continue working with MASHAV, in areas 
where they and their partner institutions have great strength. USAID/
Central Asian Republics has been one of the missions that has done so, 
starting in fiscal year 2001. The program in the region has involved 
agriculture, health, and agribusiness. The Mission-funded agreement 
runs until the end of fiscal year 2005.
                        iowa university requests
    Question. Over the past several years, a few universities and 
colleges in Iowa have submitted proposals to USAID for funding. They 
have been frustrated by the endless bureaucracy and the lack of a 
transparent process wherein all universities and colleges that are 
interested in pursuing possible USAID funding would be fully informed 
in a timely fashion about submitting their proposals and supporting 
rationales to the appropriate USAID office(s) for peer review and 
merit-based decisions on which proposals would be funded. Furthermore, 
the Committee has pointed out this problem to USAID and has urged 
action on this issue in previous reports yet this continues to be a 
problem. What steps, if any, are being taken by USAID to address this 
problem?
    Answer. Two years ago USAID established a Higher Education 
Community (HEC) Liaison position in its Office of Education in the 
Bureau for Economic Growth, Agriculture and Trade. Martin Hewitt now 
serves as the HEC liaison and is the key point of contact for 
universities seeking information and advice on the opportunities and 
programs within USAID.
    For tracking and management of unsolicited concept papers and 
proposals, the HEC Liaison is supported by a working group within the 
Agency. This working group is composed of representatives from the 
regional and technical bureaus. The working group shares the 
responsibility for either reviewing the proposal in the regional or 
technical office (if the proposal is technical or sector specific with 
no country cited) or for distribution to a USAID Mission (if the 
proposal is explicit regarding a country where the planned activity 
will be conducted). The working group shares the responsibility for 
tracking the status of higher education proposals with the HEC Liaison. 
The group communicates frequently to ensure that the improvements in 
procedures and information flow are achieving their desired results.
    In the House Appropriations Committee Report 107-663 and the Senate 
Appropriations Committee Report 107-219, Congress included the 
requirement that USAID report on the status of 68 university proposals 
listed in the House and Senate reports.
    The following actions have been taken concerning university 
proposals:
  --The HEC Liaison sent e-mails to every higher education institution 
        mentioned in the University Programs section of the Senate and 
        House Reports to direct them toward information about Agency 
        solicited competitive processes and opportunities. (Ten of the 
        universities mentioned submitted applications to the University 
        Partnerships competitive grant program).
  --The HEC Liaison made personal telephone calls to thirty higher 
        education institutions listed in the Senate and House Reports 
        to ascertain the status of their proposal submissions and to 
        provide guidance.
  --The HEC Liaison has been contacted by at least thirty higher 
        education institutions to request information about guidelines 
        for developing concept papers, proposals, and for information 
        about how the review process works (if the proposal aims to 
        work in a particular USAID/Mission, then the proposal is shared 
        with the Mission for review, if not, the proposal is reviewed 
        in a technical or regional bureau). Every call or e-mail from 
        higher education institutions to the HEC Liaison is responded 
        to in an informative and timely way.
  --The HEC Liaison has participated in numerous conferences, meetings, 
        site visits, regarding the USAID-University relationship and 
        the specifics for how Universities can address Agency policies, 
        programs, projects and obtain support for doing so.
    Following is the status of university proposals mentioned in the 
House and Senate Reports (June 23, 2003):

  
------------------------------------------------------------------------
Total number of universities cited.........................          58
Total number of proposals cited............................          68
Number of proposals received...............................          37
Number not received........................................          31
Of those received:
    Number of proposals approved...........................          17
    Number rejected........................................          12
    Number under review....................................           8
Total proposal funding (millions of dollars)...............          15
------------------------------------------------------------------------

    Summary:
    (1) 54 percent of proposals mentioned in the House and Senate 
Reports have been received.
    (2) 46 percent of proposals received have been funded.
    (3) 32 percent of proposals received have been rejected.
    (4) 22 percent of proposals received are under review.
    The 17 successful proposals were approved because they met the 
review criteria contained in USAID's brochure and website U.S. Higher 
Education Community: Doing Business with USAID. The criteria include 
two, which bear on the proposed activities' consistency with foreign 
policy and development goals. They are: the extent to which the 
proposal supports USAID's mandate and objectives, and the anticipated 
long-term impact of the project and the nature of the on-going 
relationship between institutions.
    The major reason that the twelve proposals were rejected included:
  --The failure to meet or support USAID's mandate or objectives in the 
        country, region, or sector
  --The duplication of ongoing efforts
  --Budget limitations in targeted bureaus, countries
  --Lack of technical merit
    In each case where proposals were rejected, a letter was sent to 
the applicant informing them of the reasons why the proposal was not 
accepted.
    As for the four proposals from the two Iowa Universities (the 
University of Iowa and Northern Iowa University) cited in the 
University Proposals section of the Senate and House Reports, one 
proposal was accepted (Northern Iowa--$272,000), one was supported by 
the Department of State (Northern Iowa University), and two were 
rejected (the University of Iowa and Northern Iowa University).
                                 ______
                                 
            Questions Submitted by Senator Mary L. Landrieu
                       commitment to afghanistan
    Question. Is the United States committed to a long-term presence in 
Afghanistan? Are we dedicating enough funds to Afghanistan? What areas 
are deserving of greater support and attention? How many years do you 
anticipate USAID's involvement?
    Answer. As President Bush has stated, the United States is 
committed to Afghanistan for the long-term and that includes USAID. 
With Administration and Congressional support, USAID intends to stay in 
Afghanistan as long as we have a role to play in assisting the Afghans 
recover from years of war, drought, and underdevelopment. The needs of 
Afghanistan have far outstripped donor resources. However, the United 
States has been, and will continue to take a lead role in delivering 
reconstruction assistance in many of the most critical areas. Since 
September 11, USAID alone has programmed nearly a billion dollars in 
assistance.
    More needs to be done to rejuvenate Afghan livelihoods to include 
job creation in both traditional (e.g., agriculture) and non-
traditional sectors. Afghans need to feel secure in order to invest in 
their and their children's future. Without a more secure environment, 
free of crime and corruption, reconstruction will be slowed. So the 
other area deserving of attention is security.
    Question. Do you support Secretary Powell's funding goal of $8 
billion for Afghanistan?
    Answer. I do support the Secretary's funding goal for Afghanistan.
                          women in afghanistan
    Question. Would you support a requirement to set a percentage of 
aid to be directed toward the advancement of Afghan women or be 
conducted by women-led relief organizations?
    Answer. This Administration, as well as prior ones, does not seek 
or encourage earmarks, however well-intentioned. USAID's approach to 
assisting Afghan women is to incorporate them into all our programming, 
with a special emphasis on their most critical needs, rather than 
promote specific set-asides. The most critical need of Afghan women is 
improvement in healthcare. Afghanistan has the highest maternal 
mortality rate in the world along, with Sierra Leone. Many of these 
deaths are preventable. USAID's $133 million (over 3 years) health 
program focuses on maternal/child health in the rural areas where 80 
percent of Afghanistan's population live and where there are completely 
inadequate health services for women.
    The second most critical need is education. USAID's $60 million 
education program (over 3 years) emphasizes drawing girls back into 
school including construction of girls-only schools; accelerated 
learning programs for girls who missed out on education under the 
Taliban; and other incentives, such as cooking oil to families that 
send their daughters to school.
    Both the health and education components include job creation 
opportunities (teachers and community health workers) for women. 
USAID's agricultural programs are seeking to expand income generation 
opportunities to women, such as food processing and vegetable gardens. 
We have worked with a number of Afghan women-led groups and we look 
forward to continuing and expanding these relationships.
                enhancing women's role in afghan society
    Question. What are we doing to ensure Afghan women will have a 
direct role in society?
    Answer. USAID is supporting activities in women's education, 
employment, and women's centers which empower them to assume a more 
direct role in society. Below we provide specific activities, with 
funding amounts, in each of these areas:
    Education/Training for Afghan Women and Girls:
  --Assistance in 2002 school year: Trained 1,359 teachers, 907 of whom 
        were women, and printed 15 million textbooks for 2002 school 
        year, contributing to an increase in girls' enrollment from 
        90,000 under Taliban in 2001 to 900,000 in 2002 school year. 
        (Total project funding including teacher training and textbook 
        printing: $7,709,535) Reconstructed 142 schools, daycare 
        centers, teacher training colleges, and vocational schools. 
        (Total activity funding approximately: $5.5 million) In 
        addition, USAID provides a food salary supplement to 50,000 
        teachers equal to 26 percent of pay. (Total USAID food aid 
        funding in fiscal year 2002: $158,600,000; Total USAID food aid 
        funding to date in fiscal year 2003: $42,662,800)
  --Assistance in 2003 school year and going forward: USAID printed and 
        distributed 10.7 million textbooks for 2003 school year. Early 
        indications show about a 30 percent increase in enrollment over 
        2002; many of these new students are expected to be girls, 
        which will be known with greater certainty when the enrollment 
        survey is completed in summer 2003. USAID's new education 
        program will support accelerated learning programs for up to 
        60,000 children, mostly girls that missed education under the 
        Taliban. USAID intends to rebuild between 1,000-1,200 schools, 
        benefiting 402,000 students, over three years. In addition, 
        USAID continues a food salary supplement to 50,000 teachers 
        equal to 26 percent of pay. (Education budget is $60.5 million 
        over three years; $7.41 million has been obligated to date)
  --Food-for-Education Program: Through WFP, USAID is supporting 
        distribution of food to schoolchildren in several districts of 
        Badakhshan Province, in northeastern Afghanistan. Approximately 
        27,000 children and 1,500 teachers and service staff in 50 
        schools have received a four-month ration of wheat flour. Under 
        this program, girls receive five liters of vegetable oil every 
        month as an extra incentive for regular school attendance. The 
        program increases school attendance, reduces dropout rates, and 
        encourages families to send girls to school.
  --Through the Afghan NGO, ACBAR, USAID supports a program to 
        encourage Afghan women and girls to read by hosting reading 
        classes and improving the country's libraries. The staff of 
        nine libraries within eight provinces is receiving training and 
        supplies of books. (Total activity funding: $61,180)
    Employment for Afghan Women:
  --Widow's Bakeries: USAID supports the World Food Program's (WFP) 121 
        Widow's Bakeries in Kabul, Mazar, and Kandahar. In Kabul, the 
        bakeries provided 5,000 children with fresh bread in school. 
        Overall, through employment and provision of subsidized bread, 
        WFP reports that 200,000 urban vulnerable people benefited from 
        this program in CY 2002. USAID support represented over half of 
        WFP's CY 2002 budget in Afghanistan.
  --Daycare Centers: Seventeen centers have been built for Government 
        ministries and offices to enable women to return to work. 
        (Total activity funding: $151,506)
  --Women's Entrepreneurship: Through USAID's work with the Ministry of 
        Finance in trade and investment promotion, USAID has written an 
        action plan, approved by Minister of Finance Ghani, which 
        includes: capacity building for women in all areas of trade, 
        including export promotion, administrative trade barrier 
        issues, licensing, and small and medium business development.
  --Income Generation Opportunities: Some examples include:
    --3,200 women, primarily widows, receive approximately $30 for 15 
            days work, producing clothing and quilts in three women's 
            centers in Charikar, Taloqan, and Maimana ($2/day is also 
            the typical wage for male labor). In addition, the women 
            receive basic health education and some English training 
            while working in the centers.
    --The women of northwestern Afghanistan are receiving tools and 
            materials to generate their own income through activities 
            such as growing kitchen gardens, embroidering, producing 
            cheese and yogurt and crafting shoes. (Total activity 
            funding: $51,072)
    --400 women returnees in the Shomali, an area devastated by the 
            Taliban's ruin of its household poultry stock, have 
            received 10 breeding chickens each to generate family 
            income.
    --100 women, mostly widows, employed in raisin processing in 
            Kandahar.
    --Rehabilitation of the offices of the NGO, ARIANA so they can 
            provide vocational training to 1,800 women. (Total activity 
            funding: $12,470)
  --Women's Employment through USAID's Major Agriculture and Rural 
        Incomes program (RAMP): Agriculture employs 70 percent of 
        Afghanistan's labor force, and Afghan women play a large part 
        in agriculture, especially in raising livestock. RAMP will 
        improve the technical capacity of Afghans for raising 
        livestock. RAMP will also provide women entrepreneurs with 
        innovative opportunities for credit and business training. This 
        activity will be particularly helpful for women-headed 
        households, which are among the most vulnerable in Afghanistan.
    Afghan Women's Centers:
  --USAID built and furnished the first Women's Resource Center. (Total 
        activity funding: $60,000) USAID is currently engaged in 
        building and providing programming for seventeen women's 
        centers throughout Afghanistan. Three of these are currently 
        under design in Jalalabad, Samangan, and Taloqan. (Total 
        activity funding: $2.7 million) The Ministry has recently 
        identified 14 more sites for USAID to build and furnish 
        centers. ($2.5 million obligated in fiscal year 2002 
        Supplemental funds) In addition, USAID will fund programming 
        for the centers, e.g., health education programs, daycare, etc. 
        ($5 million of fiscal year 2003 funds to be obligated early 
        this summer)
    Lastly, improved women's health is strongly linked to the ability 
of Afghan women to assume a more direct role in society. One of the 
central goals of the three year, $100 million REACH program is to 
reduce Afghanistan's high maternal mortality rate. The program will 
accomplish this goal by building 400 new clinics and funding 
performance grants to NGOs to provide a basic package of health 
services, particularly in rural areas, where medical care is most 
scarce. A major component of this program will be to increase women's 
access to skilled birth attendants and essential obstetrical services 
through an extensive training program. The first obligation for REACH 
is expected in the first week of May.
                       iraq reconstruction budget
    Question. What is the total reconstruction budget for Iraq--
including funds seized from Iraqi assets?
    Answer. This question is most appropriately addressed to the 
Department of Defense. USAID is using congressionally appropriated IRRF 
funds to provide rapid improvements to the quality of life in Iraq.
    Question. Congress recently provided $2.5 billion in the emergency 
supplemental for relief and reconstruction in Iraq. While USAID does 
not control the funds, how much has been disbursed and how much do you 
anticipate USAID to receive for reconstruction programs?
    Answer. USAID expects to receive $1.1-$1.3 billion for the 
reconstruction effort and $500 million for relief. As of July 9, $361 
million was obligated for reconstruction and over $107 million has been 
expended.
    Question. Have all USAID accounts that were ``borrowed from'' for 
pre-positioning supplies in Iraq been reimbursed?
    Answer. Yes, all the ``borrowed'' funds have been reimbursed by 
OMB.
                          iraq reconstruction
    Question. In Iraq, what is your role?
    Answer. The USAID Administrator provides day-to-day executive 
direction and leadership on Agency programs and management operations 
to ensure a fast-paced relief and reconstruction effort. As in other 
countries, USAID/Iraq is led in the field by a Mission Director, Lewis 
Lucke, who reports to the Assistant Administrator of the Asia and Near 
East Bureau, Ambassador Wendy Chamberlin. Ambassador Chamberlin reports 
to the Administrator.
    Question. How many USAID staff are in Iraq? How is the security 
environment there affecting their ability to work? Is it true that 
USAID's Iraq Mission Director is actually living in Kuwait, because it 
is to unsafe to work effectively in Baghdad?
    Answer. As of July 8, USAID had 71 staff working in the region in 
support of USAID's Iraq programs. Of the 71 personnel, 35 are 
physically in Iraq. This number is limited by communication links and 
billeting space. There continue to be security incidents which limit 
the effective delivery of services, materials, and supplies. USAID's 
Iraq Mission Director is now working primarily in Baghdad. USAID has 
had full-time staff in Baghdad since April 23.
    Question. What plans do you have for increasing the number of USAID 
staff there?
    Answer. USAID recognizes the importance of providing robust 
oversight of appropriated funds. USAID's Asia and Near East Bureau has 
prepared an initial mission structure that is under review, which 
proposes 16 U.S. Direct Hire and a number of contract and Foreign 
Service National staff.
    Question. Recently, Sec. Rumsfeld said we will stay in Iraq only as 
long as necessary, and not a day longer.
    Is the United States committed to a long-term presence in Iraq to 
establish peace and security? Wouldn't a short-term departure only 
allow the forces of fanaticism and fundamentalism to re-emerge?
    Answer. USAID is focused on addressing immediate reconstruction 
requirements in Iraq and meeting the essential targets established for 
each sector in which it works. USAID expects to fully spend its portion 
of the Iraq Relief and Reconstruction Fund (IRRF) by September 2004 and 
is prepared for a long-term presence should the Administration make 
that decision.
    Question. Are we dedicating enough funds to the reconstruction of 
Iraq? ($2.4B in the Supplemental with no request in fiscal year 2004)? 
After all, the Marshall Plan had a price tag of $88B in today's 
dollars. Can we expect future supplementals and money in the fiscal 
year 2005 request to fund Iraqi reconstruction?
    Answer. USAID is prepared to implement a longer-term program should 
the President request additional resources from Congress.
    Question. What are we doing to ensure Iraqi women will have a 
direct role in society--to vote, work, go to school, and serve in the 
new government? Would you support a call to require that a set 
percentage of aid be directed toward the advancement of Iraqi women, or 
be conducted by women led relief organizations?
    Answer. USAID-supported gender programs include provisions for the 
hiring of female staff to work with vulnerable women, including as 
traditional birth attendants and for assessments; food and potable 
water support for war-affected women of childbearing age; and the 
construction of gender-specific latrines for internally displaced 
persons.
    USAID is planning to put into place in Iraq up to two major micro-
finance lending institutions. USAID's experience elsewhere shows that 
such institutional lending goes predominantly to women to start small 
enterprises. The loans are typically small loans around $50 to $300. 
These women entrepreneurs will be able to borrow privately. USAID is 
also planning to implement a macro economic program to bolster economic 
growth in Iraq.
    Regarding education, USAID will be developing an accelerated 
learning program for youth who have dropped out of school. Of these 
children, a majority are girls, and this program will be designed to 
get them back to school at the appropriate educational level. Second, 
through the water and sanitation program, USAID will ensure there are 
sanitary facilities for girls in schools, which will encourage girls to 
come back to school and increase the rate of girl's enrollment.
    Question. Humanitarian relief organizations still report 
difficulties in delivering aid to the Iraqi people. Only after people 
have food and shelter, will the Iraqis truly see America as wanting to 
liberate Iraq, and not occupy Iraq. What steps are we taking to make 
the delivery of humanitarian supplies as efficiently as possible?
    Answer. The U.S. Government has supported the United Nations World 
Food Program with cash, Public Law Title II food commodities and 
Emerson Trust food commodities in the amount of $480,033,000. With 
these and other resources, the World Food Program (WFP), in partnership 
with Iraq's Ministry of Trade, has reestablished the Public 
Distribution System and successfully completed the June ration 
distribution nationwide. More than 400,000 metric tons of wheat flour, 
rice, oil, pulses, infant formula, sugar, tea, soap and detergents have 
been distributed internally to approximately 26 million Iraqi 
beneficiaries.
    Distributions for the month of July have already begun and the 
Ministry of Trade has publicly announced the July ration through 
television, radio and print media.
    By supporting WFP, the United States has helped assure the delivery 
of more than 758,128 metric tons of food commodities to Iraq from 
neighboring countries for the month of June. This is equal to a food 
pipeline of more than 1,000 metric tons entering Iraq per hour, 24 
hours a day, seven days a week, sustained for a period of 30 days. To 
assure rapid delivery to all points in Iraq, the program is using the 
transportation corridors in Turkey, Jordan, Syria, Iraq (through Umm 
Qasr port), Kuwait and Iran.
    The WFP program is planned to continue through the month of October 
2003.
         usaid/dod relationship in iraq reconstruction efforts
    Question. The reconstruction effort in Iraq is being headed up 
under the DOD's Office of Reconstruction and Humanitarian Assistance 
(ORHA). Congress appropriated $2.48 billion for reconstruction and 
humanitarian aid in the supplemental bill earlier this spring. USAID 
has traditionally been the government agency to manage reconstruction 
and humanitarian assistance.
    What is the relationship between USAID and ORHA? Does USAID have 
sufficient input with ORHA so that reconstruction and humanitarian 
efforts are efficient and expedient? Is ORHA interested in USAID's 
expertise and history in the international development business?
    Answer. USAID maintains a close and productive relationship with 
ORHA and its successor, the Coalition Provisional Authority (CPA). All 
projects are approved by Ambassador Bremer and CPA's Program Review 
Board before being sent to OMB and notified to the Congress. USAID 
closely coordinates in the field with military civil affairs officers, 
CPA civilian staff and Iraqis.
             aids in eastern europe and former soviet union
    Question. This year, the President requests only $1.2 million for 
HIV/AIDS initiatives in Eastern Europe and $15.4 million in the Former 
Soviet Union. I have been to Romania three times. I know the horror 
stories of the mother-to-child transmissions and the HIV orphans. The 
AIDS problem is very real in Eastern Europe and the Former Soviet 
Union.
    The problems in Eastern Europe and the Former Soviet Union may not 
be as serious as those found in Africa, but how can we provide any 
effective treatment in Eastern Europe and the Former Soviet Union with 
such small funding allocations?
    Answer. Your concerns about HIV/AIDS in the Europe and Eurasia 
(E&E) region are well founded. Though overall prevalence in E&E is low, 
the world's steepest rise in new HIV infections is in this region, 
particularly Russia and Ukraine. The epidemic is driven primarily by 
injecting drug use and exacerbated by a host of factors including 
increased rates of sexually transmitted infections, cheap drugs, 
expanded prostitution, and human trafficking.
    The Administration has recently re-emphasized its commitment to 
combating HIV/AIDS in the E&E region, including a report by the 
National Intelligence Council, two Chiefs of Mission meetings in Kiev 
and Moscow, and a strong statement by Secretary Powell in Moscow in 
May.
    USAID's commitment to combating HIV/AIDS in E&E is demonstrated by 
our Agency maintaining levels of HIV/AIDS funding in the face of 
overall decreases in the FREEDOM Support Act and SEED Act accounts. In 
the E&E region, total HIV/AIDS funding for fiscal year 2003 is expected 
to total $19.4 million ($11.6 million from the FREEDOM Support Act 
account, $1.8 million from the SEED Act account, and $6.0 million from 
the Child Survival and Health account.) A slight increase is 
anticipated for fiscal year 2004.
    At the present time, locally funded programs and those supported by 
USAID and other donors are reaching only a fraction of the high risk 
groups that must be reached if the epidemic is to be controlled. Of 
course, more resources for HIV/AIDS could be put to good and immediate 
use in Europe and Eurasia. However, it would be a mistake to 
shortchange other urgent health needs such as tuberculosis in order to 
plus up HIV/AIDS funding. Consequently, USAID continues to strive to 
use our scarce HIV/AIDS resources in the most effective ways possible. 
In the priority countries of Russia and Ukraine, USAID missions are 
finalizing revised HIV/AIDS strategies, and the Agency is taking a 
fresh look at regional E&E programs as well. USAID will continue to 
focus on prevention programs directed at those most at risk--while also 
expanding our programs of treatment, care and support. Programs to 
prevent maternal to child transmission have already demonstrated their 
effectiveness. The U.S. Government also must continue to urge the 
leaders of Europe and Eurasia to engage the HIV/AIDS epidemic with 
increasing vigor.
    Given our budget realities, USAID is working to leverage other non-
U.S. Government resources. With USAID technical assistance, twelve E&E 
countries have been awarded nearly $250 million in grants from the 
Global Fund Against HIV/AIDS, Tuberculosis and Malaria.
    While USAID will continue to focus its global HIV/AIDS resources in 
high prevalence countries outside of Europe and Eurasia, I agree with 
you and want to underscore the need to aggressively address the 
epidemic in Europe and Eurasia now, before the window of opportunity 
slams shut. I echo the theme of the Kiev Chiefs of Missions meeting 
when I say that low prevalence should not mean low priority.
                          funding for romania
    Question. Mr. Natsios, I am pleased to know you recently returned 
from Romania. Romania is a country that has overcome a repressive 
dictatorship to hold four national elections and implement market 
reforms. Additionally, Romania is poised to gain NATO admission this 
year. Furthermore, Romania has been a tremendous ally to the United 
States in Desert Storm, Kosovo, Afghanistan, and Iraq. Romania has 
contributed well over 1,000 troops to the war on terrorism. Moreover, 
Romania has made itself home to 5,000 U.S. Marines in the war on 
terrorism. In good times and in times of need for the United States, 
Romania has been more than a reliable ally.
    Despite the positive steps Romania has taken, Romania still 
requires our assistance to make its economic reforms, child-welfare 
reforms, and democratization efforts fully take hold, not just spread a 
few feeder roots.
    Why are we cutting development funds [from] Romania, a reliable 
ally, at a time when they need our assistance to solidify their 
reforms?
    Answer. We agree that much still needs to be done in Romania, and 
we are making excellent progress, despite very limited resources. 
Although the Administration initially debated setting a graduation date 
for Romania, none has been established. The current plan for U.S. 
assistance to Romania calls for maintaining present funding levels of 
about $28 million annually (or perhaps modestly increasing that level) 
through fiscal year 2008. Despite significant improvements by Romania 
over the past two years in macro-economic performance, economic reform 
and democratization, Romania still has much to do to improve its 
governance, transparency and other development and transition 
objectives. We will continue to monitor Romania's progress toward 
graduating from U.S. assistance to see whether a date can be set to end 
U.S. bilateral assistance funding.
    Question. How do you determine when a country ``graduates'' from 
USAID assistance? Is it common to permit countries to ``graduate'' with 
incompletes? The Millennium Challenge and your testimony state that we 
are committed to those countries headed in the right direction and 
assisting us in the war on terrorism. It seems Romania has taken all 
the right steps, only to be undercut by the United States. We let 
Romania down after WWII and allowed the Soviets to take-over. Let's not 
do so, again.
    Answer. The date for graduation from U.S. assistance is set when 
our analysis finds that a country is expected to be able to sustain 
progress towards democracy and an open market orientation without 
substantial further U.S. Government assistance. The analysis includes a 
review of country-specific program indicators designed to define 
graduation potential, standardized indicators of country progress, and 
a wide range of consultations with various USG agencies and political 
leaders. Even after graduation, a country may receive relatively small 
amounts of assistance from bilateral funding or regional funds to help 
it redress limited areas where deficiencies persist.
    In at least one of the eight countries where bilateral SEED funding 
ended, there was controversy over whether the graduation targets had 
been achieved. In that case and several others, some USG assistance 
continued, albeit at levels significantly below those before 
graduation. All countries where USAID bilateral missions have closed 
are now considered to have progressed beyond the need for further 
substantial SEED assistance.
                usaid disaster assistance response teams
    Question. The USAID has dispatched DARTs to Iraq.
    How many DARTs are there in Iraq? How many people comprise a DART? 
What are the responsibilities of DARTs? Are the DARTs spread 
geographically throughout Iraq, or are they centralized in Baghdad?
    Answer. There is one Disaster Assistance Response Team (DART) in 
the Persian Gulf region, which is divided into four regional teams. All 
members of each team are a part of the same DART.
    The size and responsibilities of a DART vary depending on the type, 
size, and complexity of disasters to which the DART is deployed. 
USAID's Office of U.S. Foreign Disaster Assistance (OFDA) developed the 
DART as a method of providing rapid response assistance to 
international disasters, as mandated by the Foreign Assistance Act. A 
DART provides an operational presence on the ground capable of carrying 
out sustained response activities. This includes coordinating 
assessment of the situation, recommendations and advice on U.S. 
Government response options, and funding and management of on-site 
relief activities.
    As of July 9, 2003, there are a total of 27 DART members in the 
Gulf region. Of these 27 DART members, 19 are in Iraq, including 10 in 
Baghdad, 6 in Arbil (northern Iraq), and 3 in Al Hillah (central Iraq). 
In addition, eight DART members are located in Kuwait City. These 
numbers fluctuate as the DART members travel and respond to needs in 
the region.
                      funding for micro-enterprise
    Question. The fiscal year 2004 budget request seeks $79 million for 
funding of micro-enterprise efforts globally. $79 million was funded in 
fiscal year 2002 and fiscal year 2003, so there has been no increase in 
funding for a program that produces great results.
    How many countries is USAID involved in micro-enterprise efforts? 
How does USAID determine how long it will fund micro-enterprise in a 
country before focusing efforts on a new country? What countries are in 
the pipeline to receive micro-enterprise assistance?
    Answer. In fiscal years 2002 and 2003, USAID funded micro-
enterprise activities in about 50 countries in the Africa, Latin 
America and Caribbean, Asia and Near East and Europe and Eurasia 
regions. USAID obligations over the last 3 years, from all funding 
accounts, have a generally averaged around $150 million. In fiscal year 
2001, our obligations were at $158 million. In fiscal year 2002, the 
funding level exceeds $170 million. Most of USAID's micro-enterprise 
programs range from 3 to 5 years, depending on the nature of the 
activity.
    Institutional development programs tend to take longer; policy 
reform efforts usually are somewhat shorter. In some countries, there 
have been numerous micro-enterprise projects. Countries such as 
Bolivia, Honduras, Mali, Kenya, Bangladesh, Indonesia, for example, 
have had micro-enterprise projects since the 1980's. In the coming 
year, USAID is planning to undertake micro-enterprise activities in 
some new countries, such as Afghanistan, Yemen and Iraq.
                     university funding directives
    Question. Over the past three years, this Committee has included 
several Committee directives on funding requests for Universities 
within the Bilateral Economic Assistance Account. To my knowledge these 
directives have not been followed. In fact, this Committee has included 
strongly worded language directing the Committee to adhere to these 
funding initiatives, but still to no avail.
    Why does USAID continue to ignore this Committee's directives? In 
particular, why has USAID not funded the following Louisiana State 
University programs, which have received commendation from this 
Committee--the Emergency Management Program, the Namibia Mariculture 
Program, and the Latin American Commercial Law Program?
    Answer. USAID has not ignored the Committee's directives. Two years 
ago USAID established a Higher Education Community (HEC) Liaison 
position in its Office of Education in the Bureau for Economic Growth, 
Agriculture and Trade. Martin Hewitt now serves as the HEC liaison and 
is the key point of contact for universities seeking information and 
advice on the opportunities and programs within USAID.
    For tracking and management of unsolicited concept papers and 
proposals, the HEC Liaison is supported by a working group within the 
Agency. This working group is composed of representatives from the 
regional and technical bureaus. The working group shares the 
responsibility for either reviewing the proposal in the regional or 
technical office (if the proposal is technical or sector specific with 
no country cited) or for distribution to a USAID Mission (if the 
proposal is explicit regarding a country where the planned activity 
will be conducted). The working group shares the responsibility for 
tracking the status of higher education proposals with the HEC Liaison. 
The group communicates frequently to ensure that the improvements in 
procedures and information flow are achieving their desired results.
    In the House Appropriations Committee Report 107-663 and the Senate 
Appropriations Committee Report 107-219, Congress included the 
requirement that USAID report on the status of 68 university proposals 
listed in the House and Senate reports.
    The following actions have been taken concerning university 
proposals:
  --The HEC Liaison sent e-mails to every higher education institution 
        mentioned in the University Programs section of the Senate and 
        House Reports to direct them toward information about Agency 
        solicited competitive processes and opportunities. (Ten of the 
        universities mentioned submitted applications to the University 
        Partnerships competitive grant program).
  --The HEC Liaison made personal telephone calls to thirty higher 
        education institutions listed in the Senate and House Reports 
        to ascertain the status of their proposal submissions and to 
        provide guidance.
  --The HEC Liaison has been contacted by at least thirty higher 
        education institutions to request information about guidelines 
        for developing concept papers, proposals, and for information 
        about how the review process works (if the proposal aims to 
        work in a particular USAID/Mission, then the proposal is shared 
        with the Mission for review, if not, the proposal is reviewed 
        in a technical or regional bureau). Every call or e-mail from 
        higher education institutions to the HEC Liaison is responded 
        to in an informative and timely way.
  --The HEC Liaison has participated in numerous conferences, meetings, 
        site visits, regarding the USAID-University relationship and 
        the specifics for how Universities can address Agency policies, 
        programs, projects and obtain support for doing so.
    Following is the status of university proposals mentioned in the 
House and Senate Reports (June 23, 2003):

 ------------------------------------------------------------------------
Total number of universities cited.........................          58
Total number of proposals cited............................          68
Number of proposals received...............................          37
Number not received........................................          31
Of those received:
    Number of proposals approved...........................          17
    Number rejected........................................          12
    Number under review....................................           8
Total proposal funding (millions of dollars)...............          15
------------------------------------------------------------------------

    Summary:
    (1) 54 percent of proposals mentioned in the House and Senate 
Reports have been received.
    (2) 46 percent of proposals received have been funded.
    (3) 32 percent of proposals received have been rejected.
    (4) 22 percent of proposals received are under review.
    The 17 successful proposals were approved because they met the 
review criteria contained in USAID's brochure and website U.S. Higher 
Education Community: Doing Business with USAID. The criteria include 
two, which bear on the proposed activities' consistency with foreign 
policy and development goals. They are: the extent to which the 
proposal supports USAID's mandate and objectives, and the anticipated 
long-term impact of the project and the nature of the on-going 
relationship between institutions.
    The major reasons that the twelve proposals were rejected included:
  --The failure to meet or support USAID's mandate or objectives in the 
        country, region, or sector
  --The duplication of ongoing efforts
  --Budget limitations in targeted bureaus, countries
  --Lack of technical merit
    In each case where proposals were rejected, a letter was sent to 
the applicant informing them of the reasons why the proposal was not 
accepted.
    As regards the three Louisiana State University programs which you 
cite:
    1. The Namibia Mariculture Program. This proposal was rejected 
because the Namibia Mission was at the time scheduled for closing.
    2. The Latin America commercial law program. This proposal has not 
been received. USAID called Louisiana State in January and was informed 
that the University might send a proposal. To date no proposal has been 
received.
    The other Louisiana State University program cited in the Foreign 
Operations Report is: A proposal to provide independent media training 
to local government officials from developing countries. This proposal 
has not been received.
                           hiv/aids in africa
    Question. Within the armies and militias in West and Central Africa 
and particularly in the Democratic Republic of Congo, Angola, and other 
areas of recent and current conflict, HIV/AIDS has a higher prevalence 
within the soldier population than in the general population. This is a 
particular problem with ``child soldiers''. USAID has few programs that 
directly interface with this important sector of African society. How 
can USAID work more effectively to integrate intervention strategies 
with those entities that deal with active and demobilizing military 
groups? Is a policy or legislative change necessary to permit USAID to 
work directly with host country military personnel? Is USAID 
considering working with universities and the West African Health 
Organization (WAHO) to address the HIV/AIDS crisis within the military 
and former military populations in Africa? After all, WAHO is the only 
ECOWAS endorsed organization able to deal with complex regional, 
individual and organizational change. Has USAID contemplated giving 
support to increase the institutional strength of WAHO in order to 
create a coordinated and sustainable long-term solution to the problem?
    Answer. USAID currently supports this newly constituted 
organization through its West Africa regional program. USAID is 
building the capacity of WAHO through technical assistance to develop a 
new agenda for health in West Africa, training in strategic planning 
and program design.
    Question. The United States is committing unprecedented funds, 
along with the United Nations and the Global Fund, to combat HIV/AIDS 
in Africa. That is encouraging news, but we are already seeing a 
shortage of available international public health workers. The 
additions of retro-virals to the existing public health program, which 
require an even higher level of management, create further demands. 
Even where we have cheap effective reliable drugs to deal with the 
disease, as in the case of malaria, the lack of human and physical 
health infrastructure cripples intervention efforts. There needs to be 
a program to create trained American and African intervention 
management specialists of enormous size to manage this problem. What 
plans does USAID have in mind to reinforce and strengthen African 
educational institutions to rapidly respond to this set of challenges?
    Answer. USAID is currently developing a human capacity strategy to 
address the extreme shortage of the trained personnel needed to mount a 
sustained response to the HIV/AIDS pandemic. This plan will include 
expanding the capacity of African educational institutions to provide 
additional training to existing cadres of health workers as well as 
developing pre-service training for new health professionals, and 
manpower planning for national and local governments.
    Question. Given the millions killed during the Congo/Rwanda 
conflict, the many people with HIV/AIDS, and, particularly, the number 
of demobilizing HIV positive ``child soldiers'' in the country, why 
isn't the Democratic Republic of Congo (DRC) on the target list of 
countries for major intervention efforts by the United States? Given 
the leading role of that country from the first days of the pandemic 
and the number of trained, senior research and public health 
specialists working in Kinshasa, which I understand is more specialists 
than the rest of Africa, this seems to be a contradiction. Does USAID 
have any plans for responding to the needs of the Democratic Republic 
of Congo, major strategic country in Central Africa?
    Answer. USAID is committed to addressing the HIV/AIDS pandemic in 
the Democratic Republic of the Congo (DRC). This commitment is 
reflected in the HIV/AIDS fiscal year 2004 control level of $5,000,000, 
which constitutes a 25 percent increase over the fiscal year 2003 HIV/
AIDS funding level of $4,000,000. USAID's response to the HIV/AIDS 
epidemic in DRC takes into account the fact that HIV transmission is 
fueled by war-related factors.

                         CONCLUSION OF HEARINGS

    Senator McConnell. Thank you all very much for being here. 
That concludes our hearings.
    [Whereupon, at 3:24 p.m., Thursday, June 5, the hearings 
were concluded, and the subcommittee was recessed, to reconvene 
subject to the call of the Chair.]

      FOREIGN OPERATIONS, EXPORT FINANCING, AND RELATED PROGRAMS 
                  APPROPRIATIONS FOR FISCAL YEAR 2004

                              ----------                              

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.

                       NONDEPARTMENTAL WITNESSES

    [Clerk's note.--The subcommittee was unable to hold 
hearings on nondepartmental witnesses. The statements of those 
submitting written testimony are as follows:]
           Prepared Statement of the Alliance to Save Energy
                              introduction
    My name is David Nemtzow. I am the president of the Alliance to 
Save Energy, a bi-partisan, non-profit coalition of business, 
government, environmental, and consumer leaders dedicated to improving 
the efficiency with which our economy uses energy. Senators Charles 
Percy and Hubert Humphrey founded the Alliance in 1977. The Alliance is 
chaired by Senator Byron Dorgan (D-ND) and co-chaired by Dean Langford 
the former CEO of Osram Sylvania Inc. Our vice-chairs are Senators 
Susan Collins (R-ME), Jeff Bingaman (D-NM), Jim Jeffords (I-VT) and 
Representative Edward Markey (D-MA). Over 75 companies and 
organizations participate in the Alliance's Associates program and with 
your permission, Mr. Chairman, I would like to include for the record a 
complete list of the Alliance's Board of Directors and Associates. This 
list includes the nation's leading energy efficiency firms, electric 
and gas utilities, and many other companies committed to promoting 
sound energy use.
    The Alliance has a long history of designing and evaluating energy 
efficiency programs in the United States and abroad. We also have a 
history of supporting efforts to promote energy efficiency that rely 
not only on mandatory federal regulations, but on partnerships between 
government and business and between the federal and state governments. 
The Alliance to Save Energy strongly supports the energy efficiency 
programs at the U.S. Agency for International Development (USAID) and 
appreciates the Subcommittee's past support of these valuable 
activities. We believe that USAID plays a vital and unique role in 
supporting efforts to promote the development of sustainable energy 
policies in developing and transitional countries. USAID's funding for 
energy efficiency, renewable energy, and power sector reform not only 
helps to leverage millions of additional dollars in foundation, 
development bankand other federal agency support, but also spurs the 
transfer of energy-efficient technologies and services overseas. By 
working with the private sector to design and implement policies that 
break down barriers to energy efficiency activities, USAID has been 
instrumental in helping the U.S. companies enter new markets and 
further increase sales of their products.
    The Alliance has had a great deal of success developing private-
public partnerships in countries such as Brazil, India, Mexico, 
Ukraine, Serbia, and Ghana, often working with USAID. Our work has 
clearly proven the USAID premise that a strong institutional framework 
for energy efficiency in developing countries creates jobs, reduces 
costs, and protects the environment.
    Unfortunately, despite these successes there is an alarming trend 
in funding for vital energy efficiency program support at USAID. During 
the past few years the clean energy programs, represented first in the 
Office of Energy and now in the Energy Team within the Office of Energy 
and Information Technology, have received a cut in funding--with the 
fiscal year 2004 request ($8 million) cut to 50 percent of the fiscal 
year 2001 ($16 million) funding. Not only are these programs expected 
to continue to provide the technological support and strategic 
leadership to the field, as they have successfully for years. These 
important programs cannot continue their valuable work without 
appropriate funding. We urge Congress to fully fund these programs, in 
fact return these programs to their earlier funding levels so that they 
can do more to improve sustainable energy use around the world.
    In addition, the Global Environment Facility (GEF) plays an 
important role in funding energy efficiency. In addition to increasing 
energy efficiency, GEF resources have helped poor countries and 
countries in transition conserve biological diversity, accelerate the 
adoption of renewable energy technologies, protect international waters 
and eliminate the use of ozone-depleting compounds. Tackling these 
critical global environmental problems is good for America and other 
nations and the Alliance supports its full funding.
   why usaid should promote energy efficiency: u.s. jobs and security
    Energy is absolutely critical to the economic, social and security 
development of nations. Even conservative projections show that--if 
left unchecked--future global energy demand would result in impossibly 
high levels of local and global pollution and far outstrip any 
reasonable amount of investment or supply resources. High global energy 
demand would also mean increased energy prices to American consumers 
and businesses as the U.S. economy competes with others for important 
but limited energy resources, particularly oil. The typical policy 
solution to this problem is to produce more energy, and the world will 
have to produce more. But the option that holds the greatest potential 
for mitigating our long-term global energy problem is energy 
efficiency.
    Without the strong participation of USAID, we will not come close 
to realizing the energy efficiency potential in transitional and 
developing countries. Over the past 30 years, the United States has led 
the world in developing the energy efficiency supply resource--while 
our economy has well more than doubled, our energy use has only 
increased by 27 percent. This is an American success story and USAID is 
critically positioned to work with private companies, NGOs, 
universities and many others to transfer this knowledge to other 
countries so they can use the techniques and technologies we have 
developed to make similar improvements.
    Improving energy efficiency in transitional and developing 
countries benefits the United States in several ways. One, it opens up 
new markets around the world for U.S. energy efficiency products and 
technologies. USAID programs have introduced ten of thousands of 
international decision makers to the energy efficiency market. These 
efforts are creating new businesses and jobs in the United States. Two, 
it improves the lives and economic opportunities of people in 
impoverished countries, lessening the appeal of radicalism and anti-
Western sentiment. Energy efficiency can provide job opportunities not 
only in the United States but in other countries, all the while 
lowering consumer energy costs and enhancing physical comfort. Three, 
energy efficiency mitigates global pollution in a way that actually 
results in more economic benefit than doing nothing at all. Once again, 
energy efficiency's ability to reduce pollution is a business and job 
winner for America.
                 domestic energy security starts abroad
    September 11 and the turmoil in the Middle East remind us of the 
importance of energy reliability and security both domestically and 
among our allies and trading partners. Even as we work to try to ensure 
our economy has adequate, reliable energy supplies, we cannot forget 
that the energy use of other countries directly impacts both the supply 
and price of our energy resources here at home.
    In fact, pondering strategies to guarantee adequate energy supplies 
in the United States reminds us how the energy efficiency programs run 
by USAID help protect and enhance the economies and standard of living 
of developing nations around the world. It also reveals how--due to the 
reality of a single integrated global petroleum market--these 
efficiency programs directly benefit U.S. consumers: by lessening 
demand for oil abroad, we are helping to loosen supply and hold down 
price pressures domestically. Quite simply, lowered oil demand in 
Thailand helps truckers in Tucson. Lowered oil use in Madras helps 
drivers in Michigan.
    Consuming countries such as the United States will only be able to 
protect our energy-related economic future if we can help lessen demand 
for oil both here and worldwide. USAID's energy efficiency programs do 
just that--and in doing so they help Americans as they help developing 
and transitional nations.
    Some of the most destitute countries, lacking many of the basic 
energy related services USAID can help provide, are the breeding 
grounds for terrorists. By enabling legitimate governments to meet the 
needs of their citizenry through basic energy service such as clean 
water, refrigeration, health care, and lighting, the ensuing economic 
develop can go a long way in keeping potential terrorists in real jobs 
with a hopeful future.
                 the role of usaid in the energy sector
    Although USAID's energy programs do not often receive the 
visibility of the USAID's more traditional development programs, they 
are crucial to the goal of sustainable development in the developing 
and transitional world. While it is impossible to ignore the pressing 
physical needs of the communities USAID serves, reasonably priced, 
clean, and reliable energy supplies often play an equally important 
role in the lives of the world's needy citizens by reducing respiratory 
illnesses and improving access to heating, lighting, refrigeration, and 
water. Whether it is clean fuel for cooking in India that helps prevent 
some of the estimated half-million deaths per year of women and 
children from atrocious indoor air, electricity for refrigeration in 
tropical climates that provides the vital link for vaccinations, 
affordable heat for Eastern Europe that keeps people from freezing to 
death, or the energy needed to pump and clean water to satisfy the 
basic subsistence needs of the over 2 billion currently unserved 
people, energy plays a very central role in the lives of all the 
world's inhabitants.
    Unfortunately, energy supplies in most of the world's countries are 
not always reliable or safe. Power plant emissions from the combustion 
of poor-quality coal have fouled not only the skies but the lungs of 
millions of Chinese; radiation from the failed Chernobyl nuclear 
reactor in Ukraine has sickened a generation of children; and drought 
conditions in many parts of Africa have left hydropower turbines quiet 
and cities dark. In addition, explosive economic growth in most of the 
developing world, especially Asia, has precipitated a surge in demand 
for energy supplies. Over two billion of the world's people lack access 
to reliable supplies of fuel for cooking or electricity for rudimentary 
lighting and refrigeration, and face even tougher times with large 
fluctuations in oil prices. Residents in some of the developing world's 
largest cities continue to experience rolling electricity brownouts, 
blackouts, and inadequate access to the power grid. These electricity 
shortages lead to constraints on industry and the commercial sector 
that stifle economic growth, limit the potential of U.S. foreign trade, 
and lead to further hardships from unemployment and foregone export 
revenues. Energy efficiency provides an attractive solution to these 
problems. Not only are energy conservation programs in developing 
countries a relatively low-cost alternative to the construction of new 
hydroelectric or fossil fuel plants, they can also reduce the risk of 
electricity shortages and increase the competitiveness of the 
industrial sector. The following are examples of USAID's successes.
Ukraine
    In Ukraine, USAID empowers municipalities and the private sector to 
save energy and provide basic service to members of society most in 
need. Working with the city of Lviv to develop an energy management 
strategy, USAID worked to promote the efficiency of an orphanage and 
school housing many of the Chernobyl victims. Working with U.S. 
companies and local non-profits, the school and orphanage were 
weatherized and had a high efficiency boiler installed. The immediate 
benefit to orphans no longer needing to wear winter coats in classrooms 
and to the school having enough money to buy books was significant. 
However, the more important outcome of the project was the hundreds of 
other schools that have been upgraded or are going to be upgraded based 
on this model and the new Ukrainian companies that participated in this 
project now weatherize buildings all over Ukraine. Simply put, USAID 
helps develop replicable models and the technical capacity to carry 
them out.
    USAID's competitive advantage over other development vehicles in 
the energy efficiency sphere is two-fold. USAID clearly understands the 
role of capacity building as the basis for any sustainable energy 
efficiency program and USAID also recognizes the overwhelming potential 
of the private sector to drive the energy efficiency development 
agenda.
Ghana
    One of the most successful examples of a national energy 
conservation program has been Ghana's Energy Foundation. With support 
from USAID, that the Energy Foundation has helped reduce the 
inefficient use of energy in most sectors of the economy. The Energy 
Foundation has worked with the industrial sector to perform energy 
audits and implement efficiency projects that have saved Ghanaian 
companies energy and money. In addition, the Energy Foundation helped 
energize the private sector to improve energy efficiency by setting up 
the Ghana Association of Energy Services Companies and Consultants 
(GHAESCO), which has dozens of members actively pursing energy 
efficiency projects. The Energy Foundation has also worked to educate 
consumers through public awareness campaigns and its Green Schools 
program that teaches students how to use energy more efficiently.
    Helping U.S. Companies.--USAID works to help energy efficiency 
companies raise awareness about energy efficiency and encourage 
implementation of cost-effective energy efficiency improvements. USAID 
funded partnership programs with private industry have recorded $35 
worth of sales for every $1 spent. The Alliance has worked with USAID 
on this effort and can report that since 1995, more than 50 energy 
efficiency seminars in countries around the world, including Mexico, 
China, India, Philippines, Portugal, Hungary, and Poland, and Thailand. 
Through these seminars, more than 85 energy efficiency companies have 
passed on their experience and knowledge to more than 4,000 engineers 
and managers from industry, hotels and hospitals, as well as 
representatives from government agencies, and non-profit organizations, 
and trade associations. Energy efficiency companies participating in 
the Alliance's ``Energy Efficiency Industry Partnerships'' seminars 
benefit from the opportunity to develop new project leads and cultivate 
potential distributors and representatives for their products and 
services. As of May 2001, participating companies have reported that, 
as a result of contacts made at the seminars, projects worth $6.2 
million have been completed, with another $9.9 million being considered 
or in the pipeline.
    Mr. Chairman, these are not just small companies, but large 
companies and companies on the verge of expanding and seeing energy 
efficiency as an important market for investment. Armstrong 
International, with facilities in Florida and Michigan, is one of the 
nation's leading manufacturers of energy-efficient industrial steam 
technologies. Historically concentrated in the domestic market, their 
strategic planning indicated that if they wanted to grow product sales 
they needed to expand globally but as a small business, lacked the 
capability. Then, USAID order some steam technologies from Armstrong 
for use in energy efficiency program in Bulgaria. Armstrong contacted 
USAID to find out more and began to take advantage of the market 
introduction opportunities USAID energy efficiency program made 
available to U.S. businesses. Taking advantage of these opportunities 
enabled Armstrong to develop a global presence, greatly expanding the 
scope of their business, creating new jobs.
    There are many companies that have had similar experiences with 
USAID's energy efficiency programs. Honeywell, with key facilities in 
New Jersey, Minnesota and Arizona, is one of the nation's largest 
manufacturers of efficient energy management building controls and 
energy-saving performance contracting services. These two products, 
control systems to reduce energy use and methods to provide financing 
for energy saving upgrades, hold great promise to solve energy waste 
problems in former communist, transitional countries. Honeywell has 
partnered with USAID to provide training and private sector expertise 
to a wide range of USAID sponsored programs and forums. In doing so, 
Honeywell has expanded its business practice throughout the region. For 
instance, by helping USAID provide training in the Kaliningrad Oblast 
on energy efficient district heating control, Honeywell was able to 
meet key officials and was in perfect position to take part in a $5 
million World Bank loan that Kaliningrad secured to upgrade its system.
    In many cases investments in global energy efficiency that the 
United States makes through organizations such as the World Bank would 
be underutilized without the ability of USAID to develop the capacity 
of governments, NGOs and other stakeholders to manage energy use and 
recognize the various benefits of energy efficiency. For example, the 
World Bank gave the first of its kind loan to the Brazilian Energy 
Efficiency Program, PROCEL, solely to promote energy efficiency. For 
approximately two years the money has sat idle in spite of a crippling 
energy and water shortage in Brazil. USAID has been working with PROCEL 
to develop a strategy for utilizing the loan and working with potential 
loan recipients such as municipal water utilities to develop worthy 
energy and water-saving projects. In particular, an energy and water 
management model with the municipal water utility in the city of 
Fortaleza, Brazil was developed with USAID support. In the first year 
of the program, five megawatts of energy were saved in Fortaleza while 
water service was expanded especially in poor areas. The water utility 
still registered a net cost savings, demonstrating that the energy 
savings offset the cost of improving water service to the poor.
    In addition, USAID has developed critical ties with the U.S. energy 
efficiency industry and built the potential of local energy efficiency 
private sector partners. The U.S. Asia Environmental Partnership alone 
has been responsible for transferring over $1 billion worth of goods 
and services to developing countries since 1992. USAID has supported 
the development of Energy Efficiency Business Councils in India, 
Mexico, Ghana and Thailand. These councils combine the resources of 
many smaller companies to jointly promote the benefits of energy 
efficiency to end-users. In many cases energy efficiency companies from 
the United States have lent their expertise to train end users on 
energy efficient technologies, expanding their markets in the process. 
These councils have begun to break down barriers to implementing energy 
efficiency including reducing tariffs on imported energy efficient 
goods.
    These examples clearly demonstrate how USAID's programs serve a 
unique and valuable function in helping policymakers and other 
stakeholders in developing countries adopt sustainable energy practices 
and programs. The Agency's programs have been instrumental not only in 
replicating the broad energy lessons of the United States, such as the 
importance of integrated resource planning, competition, and proper 
pricing, but have also been useful in demonstrating more specific 
policy measures such as energy-efficient appliance standards and model 
building codes. In addition, USAID's activities play a role in 
leveraging the resources of others. USAID's fiscal year 2001 estimates 
show the highly successful private and public leveraging of these 
programs. An internal USAID accounting shows that Clean Energy Programs 
have leveraged over $213.4 million for sustainable energy activities in 
such countries as Brazil, Ghana, Guatemala, India, the Philippines, and 
Southern Africa--leveraging grants from foundations and support from 
the private sector, the World Bank and others.
                            recommendations
    Mr. Chairman, I hope that I have helped to demonstrate that part of 
good governance is found in improving the way in which the world uses 
energy, and USAID's energy efficiency programs assist this endeavor. 
Energy efficiency can enhance international security through global 
governance programs and therefore deserves to garner a significant 
portion of these additional resources.
    The Alliance to Save Energy would like to respectfully recommend 
the Subcommittee take the following actions to best utilize energy 
efficiency at USAID.
    (1) We recommend a significant increase in funding for USAID's 
energy efficiency programs. Key energy efficiency opportunities are 
being missed due to a lack of funds. We recommend an increased funding 
effort in the transportation, industrial, and water sectors. These 
sectors are not only pivotal in any true development model and energy 
efficiency strategy, but they also represent major areas of potential 
U.S. investment and trade.
    (2) We recommend that Congress place a line item in the Foreign 
Operations appropriations bill for the energy efficiency programs 
within the Office of Energy and Information Technology in an effort to 
ensure the survival of these essential programs. Last year, at the 
direction of this Subcommittee, the Senate bill included such a line 
item, however this provision was rejected in Conference committee.
    (3) We recommend targeted support to energy efficiency throughout 
USAID by ensuring that Missions have an energy efficiency goal that 
complements the current goals of the mission. The Bureau for Economic 
Growth, Agriculture and Trade; Europe and Eurasia Bureau; the U.S.-Asia 
Environmental Partnership; and the Asian Bureau all have the capacity 
to do more highly effective energy efficiency activities. In addition, 
more USAID missions have tremendous potential to take on more energy 
efficiency activities. Currently, only about 13 of the more than 70 
USAID missions have energy efficiency strategic objectives even though 
all missions could find clear advantages to incorporating energy 
efficiency into their development strategies.
    (4) USAID programs do not systematically take advantage of energy 
efficiency programs as an element of achieving their strategic 
objectives. For example, efficiency efforts can play a key role in 
promoting economic growth (as described above by trade and investment 
enhancement, business development, and reduced costs); democracy 
(developing energy efficiency NGOs); and social reforms (using 
weatherization targeted to low income households to mitigate opposition 
to energy sector reforms and price increases). This problem is quite 
extreme even in Russia with its extreme weather, where there is a 
complete disconnect between USAID's Russian assistance program and 
energy efficiency.
    (5) Furthermore there is often a failure to incorporate energy 
efficiency into ongoing energy and municipal reform efforts at USAID. 
For example the Europe and Eurasia Bureau has no strategic approach to 
the significant energy and environmental challenges facing municipal 
infrastructure reform in transitional countries. USAID needs to better 
ensure that energy efficiency is an integral component of existing 
efforts (including municipal infrastructure reform; and privatization 
and other reform of heat, water and wastewater companies).
                               conclusion
    Mr. Chairman, USAID's energy programs assist policymakers, non-
governmental organizations, and businesses in developing and transition 
countries use energy efficiently and economically. Just as importantly, 
this work benefits U.S. citizens, energy consumers and businesses by 
enhancing global energy markets. The Alliance respectfully urges the 
Subcommittee to recognize and support the important work USAID is doing 
in the energy sector. In addition, we ask the Subcommittee to provide 
USAID with the funds and other resources to administer and manage their 
energy programs efficiently. Without an effective organization in 
Washington and in the field, programmatic resources will not be used to 
their full advantage.
    In short, vigorous Congressional support for USAID's energy 
programs will help to ensure that countries such as Mexico, India, 
Brazil, and Ghana are not only able to develop their economies in a 
manner that is environmentally sustainable, but to take on additional 
responsibilities to curb greenhouse gas emissions and environmental 
degradation. Also, by reducing waste around the world, the United 
States can more easily guarantee its domestic energy supply.
    Thank you again, Mr. Chairman, for the providing the Alliance to 
Save Energy with the opportunity to testify.
                                 ______
                                 
Prepared Statement of the American Hellenic Institute and the Hellenic 
                       American National Council
    Chairman McConnell, Ranking Member Leahy and Members of the 
Subcommittee, I appreciate very much the opportunity to submit 
testimony to the Subcommittee on behalf of the American Hellenic 
Institute and the Hellenic American National Council.
    In the interest of the United States:
    (1) We urge an amount of $15 million in humanitarian aid for 
Cyprus. This aid is an important symbol of U.S. support for Cyprus and 
of the U.S. commitment to achieving a just, viable and comprehensive 
settlement. Cyprus was helpful to the United States in the war on Iraq.
    (2) We support the amount of $600,000 in IMET funds for Greece. 
Greece was helpful to the United States in the war on Iraq, authorizing 
the use by the United States of the key strategic naval base at Souda 
Bay, Crete, the important air base there and overflight rights.
    (3) We oppose the $255 million in military and economic aid to the 
military-controlled government of Turkey in this bill. This amount was 
proposed by the Administration before Turkey refused to help the United 
States regarding Iraq. It is composed of $200 million economic support 
funds (ESF), $50 million foreign military financing (FMF) and $5 
million international military education and training (IMET). It should 
be fully removed from the bill without hesitation. It is unreasonable 
to give aid to Turkey in view of:
      (a) Turkey's unreliability as an ally. Turkey's actions opposing 
        the use of Turkish bases by U.S. troops to open a northern 
        front against the Saddam Hussein dictatorship demonstrated its 
        unreliability as an ally. The Turkish military were key players 
        in the ``no'' vote. They miscalculated the U.S. reaction. They 
        thought we needed Turkey and that we would give Turkey more 
        dollars, a veto on policy regarding the Iraqi Kurds and access 
        to Iraqi oil;
      (b) the fact that the United States opened a northern front 
        without Turkey demonstrated that we did not need Turkey to 
        defeat Saddam Hussein and that Turkey is of minimal value for 
        U.S. strategic or other interests in the Middle East;
      (c) the fact that Defense Secretary Donald Rumsfeld stated on 
        Monday in Qatar that the Incirlik Air Base in southeast Turkey 
        is no longer needed to patrol the northern Iraq ``no-fly zone'' 
        and that the United States has withdrawn nearly all the 50 
        attack and support planes from Incirlik Air Base (N.Y. Times, 
        Apr. 29, 2003, A11, col. 6);
      (d) Turkey's horrendous human rights violations against its 
        citizens generally and in particular against its 20 million 
        Kurdish minority;
      (e) Turkey's continuing illegal occupation of Cyprus with 35,000 
        Turkish armed forces and over 100,000 illegal colonists from 
        Turkey;
      (f) our huge deficit;
      (g) our substantial domestic needs;
      (h) the fact that the Turkish military has ``tens of billions of 
        dollars'' in a cash fund and owns vast business enterprises 
        including the arms production companies of Turkey;
      (i) the fact that Turkey owes the United States $5 billion; and
      (j) the fact that Turkey's U.S. foreign agents registered with 
        the Department of Justice have contracts totaling $2.4 million. 
        Since money is fungible, if any aid is given to Turkey, the 
        first $2.4 million would, in effect, go to these U.S. foreign 
        agents from U.S. taxpayer dollars.
    Mr. Chairman, we also urge the Subcommittee to revisit and 
reconsider the amount of $1 billion for Turkey in the Supplemental 
Appropriations Bill for the Iraq war which the Congress passed on April 
12, 2003. That amount was part of the $75 plus billion the 
Administration requested and which the Subcommittee passed on April 1, 
2003. The Iraq war was basically over several days later and we did not 
need Turkey. We understand that the $1 billion for Turkey was added at 
the last minute to the bill. It should be withdrawn by the 
administration for the reasons stated above. State Department spokesman 
Richard Boucher stated that the amount for Turkey was ``a request not a 
commitment.'' (Daily Press Briefing, March 25, 2003.) We urge the 
Subcommittee to pass language requesting the administration not to use 
any of that $1 billion and to return it to the U.S. Treasury.
    Mr. Chairman, as a matter of law Turkey is ineligible for foreign 
aid under Sections 116 and 502B of the Foreign Assistance Act of 1961, 
as amended, because of its ``consistent pattern of gross violations of 
internationally recognized human rights'' in Turkey and in Cyprus. I 
refer the Subcommittee members to the State Department's ``Country 
Reports on Human Rights Practices--2002,'' released on March 31, 2003, 
for the 36 page report on Turkey.
    On February 26, 2003 we sent a joint letter to President George W. 
Bush regarding what a senior administration official described as 
Turkey's ``extortion in the name of alliance'' and setting forth the 
reasons why Turkey is not vital nor needed in the event of war with 
Iraq. That letter discusses Turkey's efforts to extract even more 
dollars from the United States and a veto on actions regarding the 
Kurds in northern Iraq and access to Iraqi oil. The letter also 
discusses the moral issues involved including Turkey's decades-long 
ethnic cleansing, crimes against humanity and genocidal campaign 
against its 20 percent Kurdish minority in which the Turkish military 
has killed since 1984 over 30,000 innocent Kurds and through 
paramilitary groups assassinated 18,000 Kurds; and destroyed 3,000 
Kurdish villages creating 2,500,000 Kurdish refugees.
    Mr. Edward Peck, a retired U.S. ambassador who served as U.S. Chief 
of Mission in Baghdad from 1977 to 1980 stated in an article in the 
Mediterranean Quarterly (Fall 2001) that the Kurds in Turkey ``have 
faced far more extensive persecution than they do in Iraq.''
    On December 11, 2002 we sent a joint letter to President Bush on 
``United States Policy Towards Turkey--Need for a Critical Review.'' On 
September 4, 2002 we sent a joint letter to President Bush on the false 
and misleading remarks of Deputy Secretary of Defense Paul Wolfowitz on 
Turkey. Letters were also sent to President Bush on May 9, 2001 
regarding the ``International Monetary Fund and World Bank Loans to 
Turkey'' and on March 12, 2001 regarding ``Turkey's Financial Crisis.''
    Mr. Chairman, whatever foreign aid is given to Turkey (and we 
strongly oppose any aid to Turkey for the many reasons set forth 
above), should have specific conditions. The Supplemental 
Appropriations Bill for the Iraq War contained performance conditions 
for the $1 billion aid request for Turkey relating to Turkey's economic 
policies and its role as an ally. Conditions on aid to Turkey should 
also include:
      (a) removal of Turkish occupation forces and colonists from 
        Cyprus,
      (b) full human rights and autonomy for the Kurdish minority in 
        Turkey,
      (c) removal of the illegal blockade of Armenia,
      (d) full religious freedom and protection for the Ecumenical 
        Patriarchate of the Eastern Orthodox Christian Church, and 
        reopening of the illegally closed Halki School of Theology,
      (e) civilian control of the military with the return of the 
        military to the barracks,
      (f) the divestiture by the military of its ownership of the arms 
        production companies of Turkey and its other businesses,
      (g) repayment by the Turkish military from its ``tens of billions 
        of dollars'' of the $5 billion debt owed to the United States, 
        and
      (h) referral by Turkey to the International Court of Justice at 
        the Hague of any claims it asserts regarding the Aegean.
    The Turkish military and the Turkish Cypriot leader Rauf Denktash 
rejected negotiations on U.N. Secretary-General Annan's proposed 
agreement on Cyprus while the newly elected President of the Republic 
of Cyprus, Tasso Papadopoulos, accepted negotiations. In his April 1, 
2003 report to the U.N. Security Council, Secretary-General Kofi Annan 
specifically blamed Mr. Denktash and the Turkish military for the 
breakdown in the negotiations and stated that Mr. Papadopoulos was 
ready for negotiations.
    Mr. Chairman and members of the Subcommittee, Turkey is the cause 
of problems and tensions in its region, not the solution. And contrary 
to comments by certain administration officials that Turkey has been a 
loyal ally during the Cold War, the truth is that during the Cold War 
Turkey actually aided the Soviet military on several important 
occasions.
    Attached as Exhibit 1 is my letter to President Bush dated April 
29, 2003, which discusses in detail a number of the points raised in 
this testimony.
    For the letters referred to herein and additional relevant letters 
and statements please see the American Hellenic Institute's web site at 
www.ahiworld.org.
    Thank you.
                                 ______
                                 
   Prepared Statement of the Center for Intercultural Education and 
                   Development, Georgetown University
    Mr. Chairman, ranking member Leahy and members of the subcommittee, 
thank you for allowing me this opportunity to share with you the 
success of two programs which have been funded by the Agency for 
International Development over the years with this Subcommittee's 
support: the Cooperative Association of States for Scholarships (CASS) 
and the East Central European Scholarship Program (ECESP). Of course, I 
am also asking your continued support for these two programs--which 
were initiated by the Congress. At this critical juncture, as the 
success of our foreign policy has taken on even greater significance in 
the context of the war on terrorism, these programs have proven 
effective in enhancing stability in developing regions. Their success, 
in fact, argues for their replication in other areas.
    While the two programs, CASS and ECESP, take somewhat different 
approaches and focus on different needs and populations, they share 
common goals: assisting in efforts to strengthen understanding of the 
United States and our society abroad, bolstering fledgling democracies 
and free market economies, and building a well-educated middle class 
capable of providing leadership in civic society critical to sustaining 
the economic and political progress of nations facing tremendous 
challenges.
    Just to remind you, CASS provides training to disadvantaged 
students with demonstrated leadership qualities at U.S. educational 
institutions. Today, we partner with 20 colleges, universities and 
community colleges in 12 states. The program provides technical 
training in agriculture, business, primary education, various 
industrial technologies, environmental sciences, and health care and 
infectious disease control. At the same time, it serves to strengthen 
civic responsibility and leadership skills. CASS has a record of 
serving groups that historically have been overlooked--women, ethnic 
minorities, the rural poor and individuals with disabilities, and of 
providing the right mix of training and placement services to achieve a 
98 percent rate of return to their home countries and a 92 percent 
alumni employment record. Alumni are working in fields that support 
private sector growth, humanitarian assistance and development 
objectives of their home countries. There are currently 405 CASS 
scholars in the United States and nearly 5,000 alumni making real 
differences every day in their home countries.
    Nearly 90 percent of CASS funds are spent in U.S. communities. CASS 
students engage in the communities where they are hosted, and the 
program offers, in many instances, the only international presence on 
their 20 host campuses. You should also know that the host institutions 
provide a 25 percent local match for the AID funds. I would point out 
that providing the match is posing a substantial challenge to some of 
the host institutions as they have seen their state funding reduced as 
a result of the budget pressures facing state governments of which you 
are well aware.
    The ECESP program provides community and government leaders, 
administrators, managers and educators in East Central Europe with the 
knowledge and skill base to facilitate reform and transformation of 
their societies. This is accomplished through a range of U.S.-based, 
in-country and regional training programs leading to certificates and, 
in some instances, degrees. ECESP has identified five goals that 
characterize its approach: (1) more effective, responsive and 
accountable systems of local government, (2) stronger institutions 
fostering democratic decision making and civil society, (3) more 
efficient social service delivery systems, (4) support for sustainable 
economic development, and (5) education approaches responsive to local 
needs in changing environments.
    During the first 8 years of its existence, ECESP provided a unique 
and dynamic educational experience to approximately 700 committed 
participants in the Czech Republic, Hungary, Poland, and Slovakia. 
Since 1998, another 673 participants have been trained from Albania, 
Bulgaria, Macedonia, and Romania with another 50 long-term participants 
prepared to start training next month.
    As is the case with CASS, ECESP funds are overwhelmingly expended 
in the United States, with 86 percent committed domestically, at U.S. 
colleges and universities. The program is having the impact that was 
intended. Its recent evaluation found that ``[M]any [ECESP] returnees 
have taken on important policy roles, high positions in dimensions of 
public life, key positions in the growing private sector, and 
significant roles in advocacy and social improvement.'' It also noted 
``[L]ong term (U.S. based training) appears to have a substantial 
impact on the attitude, vision and career path of participants.''
    I would remind the Subcommittee that the CASS program was conceived 
as an effective means of responding to the challenges facing Central 
American nations that had been torn by civil strife during the 1970's 
and 1980's. ECESP was established in 1990 to assist emerging 
democracies in Eastern Europe as they grappled with the challenges of 
governance and institution building, sustainable private sector 
economic development and development of their human potential with a 
focus on health care and education. The recent evaluation of CASS found 
that the program ``has a major impact on their (participants') skills 
and outlook, enhances their employment prospects, and leads to 
substantially increased income. They become more productive members of 
their respective countries' economies, and often help others to be more 
productive.'' The evaluation of ECESP went so far as to urge that 
``ECESP should consider discussing with USAID the potential of 
expanding the program in the future into the most disadvantaged of the 
former Soviet republics . . . especially the Caucusus, Moldova and the 
five Central Asian Republics (which) have even greater institutional 
obstacles to overcome as they move towards more open political and 
economic systems. The ECES Program, if it were oriented towards 
supporting the key institutional transformations in these countries, 
could provide USAID an additional valuable tool for economic 
development.''
    I am pleased to be able to tell you that Georgetown's Center for 
Intercultural Education and Development is ready to work with you and 
USAID to continue the mission we have effectively met to date and to 
expand our services, of course, with modifications necessary to reflect 
the realities and needs of other nations. We appreciated the support 
for CASS and ECESP the Subcommittee gave in its report last year. At 
the same time, we would be gratified to be able to use these models in 
helping respond to new challenges as we pursue efforts to create 
environments that will not be receptive to terrorist activity. Just as 
these programs have proven effective in helping lay the groundwork for 
stability in Central America, the Caribbean and Eastern Europe, they 
can quickly be put in place--with appropriate adjustments--to help 
achieve other U.S foreign policy objectives at this time.
    We are at this point engaged in discussions with USAID about 
multiyear contract renewals for both programs. While we have had very 
strong working relationships with relevant USAID officials, the clear 
and direct support that this Subcommittee has given us over the years 
has proven very important to our ability to be effective. At this 
critical juncture, both in terms of the nation's foreign policy 
priorities and with regard to defining the future of these two 
programs, we request your continued support in this year's 
appropriations process.
    Thank you.
                                 ______
                                 
              Prepared Statement of the Nature Conservancy
    We thank the Committee for the opportunity to submit this testimony 
for the record, expressing our support for the U.S. Government's 
commitment, within the Foreign Operations appropriation, to 
international conservation.
    The mission of the Nature Conservancy is to preserve the plants, 
animals, and natural communities that represent the diversity of life 
on Earth, by protecting the lands and waters they need to survive. In 
our work outside the United States, we support strong local 
conservation groups that work to raise the effective level of 
protection at parks and nature preserves established by the local 
governments. Our work in the United States and abroad is closely 
related.
    We are a private, non-profit organization. We are in the midst of 
our largest private capital fund-raising campaign--over $1 billion so 
far. One hundred twenty million dollars will be for our work outside 
the United States. Eighty-four percent of our budget in 2002 was raised 
from non-governmental sources. But government grants fill a critical 
need. For example, the assistance we receive through our cooperative 
relationships with the United States Agency for International 
Development (AID) is vital to our international operations. It is very 
difficult to raise private dollars for international operating 
expenses, especially expenses of our foreign partners at the parks. 
Without AID's support, these programs would be severely damaged.
    Our Parks in Peril (PiP) program in Latin America and the Caribbean 
and our similar efforts in the Asia/Pacific region are widely regarded 
as among the most successful and respected in the world. These efforts 
are bringing real protection to more than sixty major ``sites''--parks 
and nature preserves in 27 foreign countries, comprising over 80 
million acres. In a typical recent year, AID has supported PiP with 
about $6 million. The leverage on the U.S. Government's investment in 
PiP is very high--more than $300 million raised by us and by our local 
partners for conservation work at or near the PiP sites. We have signed 
a five-year agreement for the next stage of Parks in Peril, under which 
the program will leverage its proven methodology to many more places. 
Your Committee has praised Parks in Peril in its past reports, and we 
hope you will do so again.
    We are also grateful for AID's support to our other international 
projects, especially through the Global Conservation Program (GCP) and 
through the President's Initiative Against Illegal Logging. The GCP, 
for example, helps pay for our work on the coral reef that surrounds 
Komodo Island in Indonesia: for park rangers, marine patrol boats to 
enforce the ban on destructive fishing, and alternative development 
projects for local people.
    AID's support to biodiversity is by far the largest portion of all 
U.S. Government funding to international conservation: $145 million in 
fiscal year 2003. Your Committee has long supported AID's biodiversity 
work. The Administration's requested level for the foreign affairs 
function in fiscal year 2004 is up, but naturally most of the increase 
is driven by the war on terrorism and the Middle East situation. We 
recognize the need for priorities at this moment of national crisis. In 
view of the new resources being made available to AID, we strongly urge 
the Committee to provide clear guidance to AID that investment in 
conservation of global biodiversity should at the least not decline.
    The Tropical Forest Conservation Act (TFCA), also known as the 
Portman Act, is also funded within Foreign Operations. The 
Administration has requested $20 million for fiscal year 2004, in the 
Treasury account. The TFCA uses debt reduction deals to create long-
term income streams to protect forests. We strongly support this 
request. The Conservancy donated more than $1 million to the TFCA deal 
with Belize, about $400,000 to the deal with Peru, and expects to 
donate $1 million to the deal now under discussion with Panama. These 
debt-for-forest deals leverage the U.S. taxpayers' dollar: typically, 
there is about $2 of conservation benefit for each $1 of appropriated 
funds. If TFCA gets the full $20 million, it will be possible to do 
perhaps four deals beyond Panama, including such countries as Jamaica, 
Ecuador, and Colombia. We stand willing to donate our own private funds 
in each case.
    Finally, I note that the Global Environment Facility (GEF) is the 
largest single source of biodiversity conservation funds in the world, 
leveraging U.S. Government contributions four-to-one. We welcome the 
Administration's decision to seek $184 million for the GEF, enough for 
the current U.S. pledge and a substantial payment toward the arrears. 
We urge the Committee to approve this request in full.
    Thank you, Mr. Chairman.
                                 ______
                                 
                  Prepared Statement of Seeds of Peace
    My name is Aaron David Miller. I am president of Seeds of Peace. In 
that capacity, I want to thank you and the other members of this 
committee for the opportunity to talk briefly about an extraordinary 
organization that works toward coexistence and peace for young people 
caught in conflict.
    For the past 24 years, I served as an advisor on Arab-Israeli 
negotiations to six Secretaries of State. I helped Secretary of State 
James Baker plan for the Madrid Conference in 1991; assisted President 
Clinton and Secretary Albright at Camp David in 2000; and for the past 
2 years, until January 2003, worked for Secretary Powell.
    There are many reasons for the current crisis between Arabs and 
Israelis; and it is not appropriate to review them here. Based on the 
last two decades of my experience in negotiations, one thing is 
fundamentally clear: while only governments can negotiate agreements, 
only people can define the character and quality of real peace. Sadly 
neither Arabs, Israelis, nor Americans have invested sufficiently in 
people to people programs and in efforts to create the private and 
public relationships between individuals so essential to supporting the 
formal diplomacy.
    This is particularly true when it comes to young people. As 
mediators, we did not focus either in the socialization and education 
of young people in conflict. Unless we invest in the next generation 
and try to create options for them other than conflict, we risk losing 
the future. When the peace process resumes--and it will--we as a 
government must take much more seriously the efforts of non-
governmental organizations such as Seeds of Peace in helping to build 
that future.
    Today, I would like to briefly address two issues. What Seeds of 
Peace has accomplished and is continuing to accomplish every day; and 
why congressional support for our efforts is now more critical than 
ever.
    Created in 1993 by the late John Wallach, Seeds of Peace is a non-
political organization that does practical coexistence work for young 
people caught up in four of the world's most difficult conflicts--the 
Middle East, South Asia (India, Pakistan, Afghanistan), Cyprus, and the 
Balkans. In its first decade, more than two thousand young people, the 
vast majority from the Arab-Israeli arena, have been through our 
programs. These programs begin with a three and a half week experience 
at our camp in Maine and continue all year round at our Center for 
Coexistence in Jerusalem and through reunions and conferences. In 
essence, we have created a stream of programming which tracks and 
follows our young people from the time they enter camp at the age of 14 
through their university years.
    Seeds of Peace aims to accomplish three basic objectives.
    First, we provide young people with the environment and skills to 
emerge as leaders of their generation. We draw on teenagers from a wide 
variety of political, social, economic, and religious backgrounds, in 
large part from the mainstreams of their respective societies. It is 
here, in the center, not on the margins of political life, where 
leaders capable of making peace are born. The fact that these young 
people come to our camp in delegations representing their respective 
governments gives them additional standing and credibility as future 
leaders. Our 1993 ``Seeds'' graduates are now 23 years old; many are 
winning awards, pursuing either practical or academic work in 
coexistence, and emerging as young leaders. It is more than likely that 
one or more of these young people will become a president, prime 
minister, foreign minister, or leading parliamentarian in their 
countries.
    Second, Seeds of peace provides these young leaders with the skills 
required for coexistence and peace-making. Seeds of Peace is not about 
kids singing songs and planting flowers in the woods. It is about 
serious and painful coexistence sessions under the guidance of 
professional facilitators, where anger, hatred, and stereotypes are 
aired and overcome. These young ambassadors learn how to listen, how to 
negotiate, how to empathize, and above all, how to respect one another 
as individuals. It is here that friendships and trust are born.
    Third, Seeds of Peace creates hope and possibility amidst fear and 
despair. This is not a question of striving for an unattainable ideal. 
Instead, we offer young people, trapped in bitter and violent conflict, 
a practical alternative--a pathway that is positive and empowering and 
that leads them away from violence into dialogue and understanding. Our 
young people reject violence. In a decade, we have lost only one young 
man to violence, and he, one of our brightest and most extraordinary 
``Seeds,'' was caught in tragic circumstances not of his making.
    Today, Seeds of Peace is more important than ever. Two and a half 
years of non-stop Israeli-Palestinian confrontation have put at risk an 
entire generation of young Israelis, Palestinians, and Arabs. 
Throughout this period, our Center in Jerusalem continues to do 
extraordinary work. Of the one hundred and twelve Israelis and 
Palestinians who participated in our 2002 camp session in Maine, 
ninety-five are still involved in bi-weekly coexistence sessions in 
Jerusalem. In December 2002, one hundred and twenty Israelis and 
Palestinians gathered at Kibbutz Yahel; in February of this year, sixty 
Palestinians gathered in Jericho for a Seeds of Peace seminar. Our camp 
planning for the summer of 2003 is well under way with the selection 
process already working in Israel, the West Bank/Gaza, Egypt, Jordan, 
Yemen, Qatar, Tunisia, Morocco, India, Pakistan, Afghanistan, Cyprus, 
and the Balkans.
    Against the backdrop of war and confrontation, Seeds of Peace 
continues to train leaders, empower them with skills, and maintain 
hope. Moreover, as an American organization, Seeds of Peace is also a 
critical window through which young people can get an accurate and 
objective look at America. The camp experience in Maine, trips to 
Washington, where they meet with the President, Congress, and the 
Secretary of State, expose young people from all over the world to 
America at its best--to its openness, its tolerance, and its diversity. 
We have one hundred Seeds of Peace graduates currently studying at U.S. 
universities and colleges.
    Moreover it is critical to America's image in the world that we be 
perceived as deeply engaged in peace making efforts and in promoting 
dialogue and understanding particularly among young people. We want 
people to see us as proactively involved in pursuing solutions to some 
of the world's most difficult problems. As an American organization 
with internationally recognized credentials, real credibility, and a 
proven track record, Seeds of Peace is uniquely positioned to 
accomplish these objectives. This will be critically important, 
particularly in the wake of war with Iraq.
    The role of Congress is critical to our efforts. In our early 
years, we refrained from seeking U.S. Government support. In the late 
1990's our programming needs expanded to the point where additional 
assistance was required. In fiscal year 2000, Seeds of Peace received 
an award from USAID and the Department of State of almost $700,000 
because of language in the Conference Report attached to the fiscal 
year 2000 Foreign Operations Bill. In fiscal year 2002, we received a 
second award of $547,000 with $203,000 still pending. This funding was 
critical to the success of our programs, particularly in Jerusalem, 
where we do most of our on the ground follow up.
    The need to do this follow up is critical to the success of our 
program. In the end, coexistence will only be sustained if it can 
survive, not in the woods of Maine, but in the neighborhood where Arabs 
and Israelis interact daily. The attached budget in our request for 
fiscal year 2004, reflects this reality and is directed in large part 
to funding our Center in Jerusalem, expanding a regional presence in 
Amman and Cairo, working with our Delegation Leaders (the adult 
educators who accompany the youngsters), to bring additional young 
people to camp, and for non-Middle East programming. Toward that end, 
for fiscal year 2004, we are seeking $1 million in U.S. Government 
funding.
    Seeds of Peace represents something rare and unique: It gives us 
all a glimpse of what the future could be, a future based not on hatred 
and intolerance, but on respect, tolerance, and ultimately on peace. I 
have been given a unique opportunity to nurture this very special gift. 
And with your help Seeds of Peace will continue to grow and to bring us 
one step closer to the better world to which we all aspire.

       LIST OF WITNESSES, COMMUNICATIONS, AND PREPARED STATEMENTS

                              ----------                              
                                                                   Page

Alliance to Save Energy, prepared statement......................   145
American Hellenic Institute, prepared statement..................   150

Bennett, Senator Robert F., U.S. Senator from Utah, questions 
  submitted by...................................................   110
Bond, Senator Christopher S., U.S. Senator from Missouri, opening 
  statement......................................................    93
Burns, Senator Conrad, U.S. Senator from Montana, opening 
  statement......................................................    95

Center for Intercultural Education and Development, Georgetown 
  University, prepared statement.................................   152
Craig, Senator Larry, U.S. Senator from Idaho, questions 
  submitted by...................................................   119

DeWine, Senator Mike, U.S. Senator from Ohio, opening statement..    87

Gregg, Senator Judd, U.S. Senator from New Hampshire, question 
  submitted by...................................................   110

Harkin, Senator Tom, U.S. Senator from Iowa, questions submitted 
  by.............................................................   131
Hellenic American National Council, prepared statement...........   150

Landrieu, Senator Mary L., U.S. Senator from Louisiana:
    Opening statements...........................................24, 90
    Prepared statement...........................................    26
    Questions submitted by......................................60, 135
Leahy, Senator Patrick J., U.S. Senator from Vermont:
    Opening statements........................................... 4, 71
    Prepared statement...........................................     6
    Questions submitted by......................................49, 120

McConnell, Senator Mitch, U.S. Senator from Kentucky:
    Opening statements........................................... 1, 69
    Prepared statement...........................................     3
    Questions submitted by.......................................34, 99

Natsios, Hon. Andrew S., Administrator, Agency for International 
  Development....................................................    69
    Prepared statement...........................................    76
    Summary statement............................................    73
Nature Conservancy, prepared statement...........................   153

Powell, Hon. Colin L., Secretary of State, Office of the 
  Secretary, Department of State.................................     1
    Prepared statement...........................................    13
    Summary statement............................................     7

Seeds of Peace, prepared statement...............................   154
Specter, Senator Arlen, U.S. Senator from Pennsylvania, questions 
  submitted by...................................................   110
Stevens, Senator Ted, U.S. Senator from Alaska, questions 
  submitted by...................................................   116

                             SUBJECT INDEX

                              ----------                              

                  AGENCY FOR INTERNATIONAL DEVELOPMENT

                                                                   Page

Accomplishments in Afghanistan...................................   110
Accountability of Assistance in Afghanistan......................    99
Additional Committee Questions...................................    99
Afghan Ministry of:
    Education....................................................   132
    Women's Affairs..............................................   132
AIDS in Eastern Europe and Former Soviet Union...................   138
American Educational Institutions in Lebanon.....................   113
Arab Opinion of America..........................................   121
Burma............................................................   102
Cambodia.........................................................   102
Child Survival and Health Programs...............................   126
Clean Water in Iraq..............................................   112
Coffee Crisis....................................................   129
Commitment to Afghanistan........................................   135
Complex Emergency Fund...........................................   123
Development Assistance...........................................   123
Egypt..........................................................101, 113
Elections in Afghanistan.........................................    99
Energy Programs..................................................   129
Enhancing Women's Role in Afghan Society.........................   135
Environmental Health in Asia.....................................   106
Ethiopia Food Crisis.............................................   116
Faith-Based Health/Development Efforts...........................   116
Fiscal Year 2004 Budget Request for:
    Armenia......................................................   107
    Former Soviet Union..........................................   127
    Russia.......................................................   106
Food Aid and Famine..............................................   124
Funding for:
    Micro-Enterprise.............................................   140
    Romania......................................................   139
HIV/AIDS.........................................................   126
    In Africa....................................................   142
Indonesia........................................................   103
Institutionalizing private property rights.......................   116
Iowa University Requests.........................................   133
Iraq Reconstruction..................................100, 118, 120, 137
    Budget.......................................................   137
Iraqi Civilian Victims...........................................   120
Management Improvement...........................................    82
Millennium Challenge Account.....................................   121
Operating Expenses and Staffing..................................    82
Other Donors in Afghanistan......................................    99
Pakistan.........................................................   105
Palestine........................................................   114
People With Disabilities in:
    Afghanistan..................................................   131
    Iraq.........................................................   132
Peregrine Fund.................................................110, 119
Renewable Energy.................................................   128
Rural Electrification............................................   109
Russia Budget....................................................   118
Security and Elections in Cambodia...............................   102
Security in Afghanistan..........................................   131
Strategic Direction and Budget Priorities........................    77
Sudan............................................................   125
The Changing Landscape of Foreign Assistance.....................    76
The Millennium Challenge Account and the Role of USAID...........    77
The Strategic Importance of Development Assistance in the New 
  Millen- 
  nium...........................................................    76
U.S. Companies and USAID Prime Contractors.......................   110
Uganda...........................................................   124
University:
    Funding Directives...........................................   141
    Requests.....................................................   129
USAID:
    Contract Process.............................................   110
    Disaster Assistance Response Teams...........................   140
    Programs Engaging Israel in Development Activities...........   133
    Support for the Cooperative Development Program..............   109
    Use of American Goods in Iraq Reconstruction.................   113
USAID/DOD Relationship in Iraq Reconstruction Efforts............   138
Women in:
    Afghanistan..................................................   135
    Development..................................................   126
Women's Political Participation in Afghanistan...................   100

                          DEPARTMENT OF STATE

                        Office of the Secretary

Additional Committee Questions...................................    34
Afghanistan......................................................27, 44
Against Stonings.................................................    65
Assistance to Frontline States...................................    14
Burma............................................................    33
Cambodia.........................................................    38
Central Asia and Freedom Support Act Nations.....................    14
Combating Illegal Drugs and Stemming Terrorism...................    15
Complex Emergency Fund...........................................    52
Death of American citizens in Seoul, Korea.......................    22
Development Assistance...........................................    52
    Follow Up....................................................    52
Famine in Africa.................................................    58
Fighting the Global AIDS Pandemic................................    16
Global AIDS......................................................    32
Haiti............................................................    29
Halting Access of Rogue States and Terrorists to Weapons of Mass 
  Destruction....................................................    15
Human shields....................................................    31
Hunger and Famine................................................    16
Iran.............................................................    19
Iraqi National Congress..........................................    21
Israel Loan Guarantees...........................................    51
Long-Term Commitment to Iraq.....................................    27
Millennium Challenge Account.....................................15, 53
North Korea......................................................23, 43
People with disabilities.........................................    30
Role of Iraqi Women..............................................    28
Russian Aid......................................................    17
Saddam Hussein's Support of Terrorism in West Bank/Gaza..........    35
Severe Acute Resiratory Syndrome.................................    20
Supplemental Funding.............................................    17
Syria............................................................18, 36
The CEO Responsibilities: Taking Care of Operations..............    13
The Foreign Policy Advisor Responsibilities: Funding America's 
  Diplomacy Around the World.....................................    13
The U.S.-Middle East Partnership Initiative......................    16
Weapons of mass destruction......................................    33
WMD Threats Outside the FSU......................................    65

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