SPEAKERS CONTENTS INSERTS
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41—651 CC
1997
THE ADMINISTRATION'S FISCAL YEAR 1998 FOREIGN ASSISTANCE BUDGET REQUEST
HEARING
BEFORE THE
COMMITTEE ON
INTERNATIONAL RELATIONS
HOUSE OF REPRESENTATIVES
ONE HUNDRED FIFTH CONGRESS
FIRST SESSION
FEBRUARY 25, 1997
Printed for the use of the Committee on International Relations
COMMITTEE ON INTERNATIONAL RELATIONS
BENJAMIN A. GILMAN, New York, Chairman
WILLIAM GOODLING, Pennsylvania
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JAMES A. LEACH, Iowa
HENRY J. HYDE, Illinois
DOUG BEREUTER, Nebraska
CHRISTOPHER SMITH, New Jersey
DAN BURTON, Indiana
ELTON GALLEGLY, California
ILEANA ROS-LEHTINEN, Florida
CASS BALLENGER, North Carolina
DANA ROHRABACHER, California
DONALD A. MANZULLO, Illinois
EDWARD R. ROYCE, California
PETER T. KING, New York
JAY KIM, California
STEVEN J. CHABOT, Ohio
MARSHALL ''MARK'' SANFORD, South Carolina
MATT SALMON, Arizona
AMO HOUGHTON, New York
TOM CAMPBELL, California
JON FOX, Pennsylvania
JOHN McHUGH, New York
LINDSEY GRAHAM, South Carolina
ROY BLUNT, Missouri
JERRY MORAN, Kansas
LEE HAMILTON, Indiana
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SAM GEJDENSON, Connecticut
TOM LANTOS, California
HOWARD BERMAN, California
GARY ACKERMAN, New York
ENI F.H. FALEOMAVAEGA, American Samoa
MATTHEW G. MARTINEZ, California
DONALD M. PAYNE, New Jersey
ROBERT ANDREWS, New Jersey
ROBERT MENENDEZ, New Jersey
SHERROD BROWN, Ohio
CYNTHIA A. McKINNEY, Georgia
ALCEE L. HASTINGS, Florida
PAT DANNER, Missouri
EARL HILLIARD, Alabama
WALTER CAPPS, California
BRAD SHERMAN, California
ROBERT WEXLER, Florida
DENNIS KUCINICH, Florida
STEVE ROTHMAN, New Jersey
RICHARD J. GARON, Chief of Staff
MICHAEL H. VAN DUSEN, Democratic Chief of Staff
MARK S. KIRK, Counsel
CAROLINE G. COOPER, Staff Associate
C O N T E N T S
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WITNESSES
The Honorable J. Brian Atwood, Administrator, United States Agency for International Development
APPENDIX
Opening statement of Chairman Benjamin A. Gilman
Prepared statement of Honorable J. Brian Atwood
Responses to questions submitted for the record to the Agency for International Development by:
Chairman Gilman
Representative Hamilton
Representative Capps
Representative Smith
Representative Brown
THE ADMINISTRATION'S FISCAL YEAR 1998 FOREIGN ASSISTANCE BUDGET REQUEST
TUESDAY, FEBRUARY 25, 1997
House of Representatives,
Committee on International Relations,
Washington, DC.
The committee met, pursuant to notice, at 10:05 a.m., in room 2172, Rayburn House Office Building, Hon. Benjamin A. Gilman (chairman of the committee) presiding.
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Chairman GILMAN. The committee will come to order.
I would like to welcome our administrator of the U.S. Agency for International Development, J. Brian Atwood, on his first appearance before a committee in this 105th Congress, but he is by no means any newcomer to our committee. He has certainly been with us many years and has many hats.
Welcome, Brian. I think it is safe to say your time with us in the Congress seems to be starting considerably smoother than the last Congress.
Permit me to congratulate him on the birth of his daughter, Michele, and hope she will not keep you up as many nights as responding to our many inquiries.
Following the 1992 elections, a member of the Clinton administration's transition team suggested that the Agency be closed and rebuilt from scratch. The Agency that Brian Atwood took over was in trouble and in search of a mission following the end of the cold war.
Secretary Christopher and a number of us in Congress recommended that USAID be consolidated into the State Department with other international affairs agencies. So while many of us in the Congress wanted USAID reformed faster and to a greater degree, I think we can all agree that in your years, Brian, you have revised an agency that was in critical condition. Today, USAID is stronger, leaner, and on the brink of real reform in the way it does business.
Over 20 agencies have been closed, the Agency's staffing level has been reduced by some 2,000, and the results, that is what the taxpayers get for their money, are becoming central to the USAID management.
Speaking of a leaner USAID, permit me to note that you also look fit and trim. We understand you have achieved your leaner look on a strict diet of cabbage. You can snack on that cabbage that we have provided.
Seriously, Brian, problems remain at the Agency and the Inspector General has continued to report that the new $100 million computerized management system is flawed and needs some repairs.
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USAID is moving to a new expensive building that will isolate its staff from the State Department where policy must be coordinated. Sole-source grants continue to fuel criticism of the whole foreign assistance programs, and that practice must be curtailed, if not eliminated. I very much want to support a bipartisan reform policy, as do many of our members. In that regard, the President's budget request for national spending, I think, is a serious proposal that deserves serious consideration.
He also proposed authorizing legislation including new crediting authorities and a partnership for a freedom initiative to provide an additional $2.5 billion in aid over 5 years in Russia and the former Soviet states. Our committee intends to continue working with you in that regard.
Last week, most of the foreign assistance authorization legislation drafted by this committee was delivered to USAID and to the State Department. It is my understanding that the proposed legislation was well received at USAID.
Working with the administration and the minority members of our committee, hopefully we can agree on a final measure to take to the House floor that will also address the important issue of U.N. arrearages and U.N. reforms. Because of the short timetable for authorizing committees, it is our intention to schedule a markup for our bill in early April, immediately after the Easter recess, so that it can be scheduled for full House consideration in early May.
My understanding, too, is that the Senate Foreign Relations Committee may be on an even faster track. In sum, we have our work cut out for us.
I now ask our ranking senior minority member, Mr. Gejdenson, if he has some comments.
Mr. GEJDENSON. Thank you.
I would just like to commend Mr. Atwood for the work he has done in the Agency and say while all of us need to be ever vigilant in making our organization more efficient and more effective in achieving their goal, through my time in government I have often found the large-scale organizations of titles and functions to actually create more layers of bureaucracy between elected officials and its people responsible for carrying out the jobs. And while I would like to work with the chairman and others in this Congress to make sure that every cent of our assistance is used as efficiently and effectively as possible, I am less enamored with simply moving around the players into new organizational charts. That, in my opinion, is historically done more to create confusion than efficiency and more effective service.
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So, Mr. Chairman, we look forward to working with you as much as we possibly can to make our agencies more efficient. I am less enamored, as I said, with simply creating new structures. I think Mr. Atwood has done a spectacular job in making the Agency ever more effective in carrying out the national interests of this country. We have many competitive flows or markets, and not only with his work do we increase the standard of living for people around the globe, but we increase the opportunity and the effectiveness for American competitive economic activities globally, and I would like to thank him for that as well.
Chairman GILMAN. Thank you.
Do any of our other members seek recognition?
Mr. Bereuter.
Mr. BEREUTER. Thank you, Mr. Chairman.
I would like to welcome you, Administrator Atwood, as you make your presentation today. If you have an opportunity, there is one issue I wish you would try to address, and that is the housing guarantee in the urban development programs of USAID. We are receiving comments from my district that people were quite supportive, but GAO has been critical about some aspects of programs. Perhaps you could tell us if the USAID has responded to that critique and how you might want to modify the program if we choose to authorize it.
Thank you.
Chairman GILMAN. Thank you, Mr. Bereuter.
Any other members seeking recognition?
If not, Mr. Atwood, please proceed. You may summarize your statement and put the full statement in, or regular, whichever you deem appropriate.
STATEMENT OF HON. J. BRIAN ATWOOD, ADMINISTRATOR, AGENCY FOR INTERNATIONAL DEVELOPMENT
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Mr. ATWOOD. Thank you, Mr. Chairman, I will summarize it.
I also want to thank you for the cabbage. One of the things you think about before these appearances is if perhaps you will lay an egg. I am glad you didn't give me an egg this morning.
I do thank you for all of your kind comments and those of Mr. Gejdenson, and I certainly will try to address the question Mr. Bereuter raised.
The first thing I would like to say is I very much want to work with the committee, and I believe I speak for the entire administration in saying we want this committee to pass a foreign aid authorization bill, a State Department authorization bill, and one that the President can sign.
We, I think, have lost something in our foreign policy process over the years when this committee isn't able to do that and when the Senate Foreign Relations Committee is not able to do that. I think that the people who want to serve on this committee have a more natural interest in our foreign policy, and want to contribute to it. And I think it is very, very important for the administration to do everything it can to help you do your job. I think the feeling is mutual on your part; you want to help us do our job.
So I want to work with you very, very closely. I want to thank you particularly, Mr. Chairman, for setting up a session this afternoon for new freshmen Members of Congress to talk about our foreign aid programs. I am going to be there with General Nash, who has been our Chief Commanding Officer in Bosnia; and former USAID Administrator, Peter McPherson, who worked in this position for 6 years; as well as Julia Taft, who once worked for USAID.
You have provided us with a very important opportunity to talk to Members of Congress who have not had an opportunity to get into these issues in depth. I believe that symbolizes that we are getting off on the right foot in the new Congress.
The budget request we have submitted, Mr. Chairman, I believe will help us achieve equilibrium at USAID. We have gone through very severe budget cuts in fiscal 1996; we have had to have a reduction in force; and you have mentioned that we have, overall, reduced our presence around the world. I think we have gone too far in that direction, and now it is important for us to build back our program so we can indeed serve America's interests. The increase we have requested for USAID programs totals $476 million. This includes $293 million for the eastern European and NIS countries; $135 million for important transitional countries under the Economic Support Fund; and $65.5 million for development assistance, the bulk of which is for a new food security mission.
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And I want, on that point, to stop and emphasize the word agriculture. Agriculture is an important part of development assistance. It is an important part of America's interests as well.
Because of various pressures on our budget over the years, we have had to reduce our contribution to agricultural development. The consequence has been that emergency food assistance has gone up and increased tensions have existed in countries as diverse as Rwanda and South Africa in recent years.
And so it is extremely important, especially in Africa, that we contribute to the food security of these nations. These nations suffer from urbanization and the tactics of agricultural policies that have been pursued by certain governments, slash-and-burn techniques that have forced people away from farms and into the cities. I believe it is extremely important for us to serve our agricultural interests. Our farmers plant one out of four acres for export abroad. Forty-three of the top importers of American agricultural products are former USAID recipients. So we can tie our own interests to development overseas.
The final point I would make is that in many of these developing countries, 80 percent of the GNP is in the agricultural sector, so if we can't help there, we can't be leaders in the development community. It seems to me that our budgets in the past few years have been out of balance and we need to build back our capacity to do work in the agricultural sector.
Mr. Chairman, over the last few years, obviously one of the great worries that I have had is that we were losing our leadership capacity in the development field. Now, our Nation leads because we have ideas, because we have new approaches, because we are optimistic as a people, and because the world needs our input. We are, as the President has said, an indispensable Nation because of that optimism and because of our rich vein of intellectual accomplishment. But it is more difficult to lead when we are not contributing resources to comport with the size of our own economy.
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We traditionally have been close to last place in terms of the percentage of our GNP that we contribute to official development assistance. We are in dead last place now with only 1 percent of our GNP going to development assistance.
More importantly, though, we fall into fourth place behind nations that have economies half the size of ours in terms of our overall contribution to development assistance. We are now behind Japan, France, and Germany. It seems to me that those countries are not more altruistic than we are; however, they are pursuing their interests through development assistance programs. We need to also pursue our interests in that way.
I am very proud in the last year that the Development Assistance Committee of the OECD has adopted a report that was largely written by our country. It is entitled, Shaping the 21st Century, the Contribution of Development Cooperation. This report sets various goals for the entire donor community, including the World Bank, UNDP and all of the other donors.
The goals are such important items as reducing by one-half the number of people living in extreme poverty; today 1.3 billion people are living under $365 per year. That is about $1 a day. The report also urges us to make sure that everyone has access to universal education. There are many girls, in particular, in developing countries that don't have access to that.
It calls for every nation to have a national environment policy, and goes on to list several other goals that I think are reachable in the next 20 years. This is the U.S. approach. We don't believe in simply counting what we do in foreign assistance by establishing an arbitrary goal for resource contributions. The goal that had been set previously was .7 percent of our GNP. What we want is to see results achieved no matter what the cost, and the world has now adopted our approach.
I am also very pleased that I can come to this committee and the Congress and ask for less operating expense money than we spent last year. We are asking for $15 million less than you appropriated last year. That is a direct result of what you suggested, that we overhaul the Agency from top to bottom. We didn't close it, but we did rebuild it.
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We have adopted a strategic approach; we have reorganized and we have changed the management; we have demanded that our programs produce demonstrable results. And since 1993, we have reduced our staff by 2,700 people; we have cut senior management by 38 percent and reduced project development time by 75 percent. We have reduced our regulations by 55 percent. We have closed 26 overseas missions and will close 6 more by the end of fiscal year 1999.
And USAID is one of the pioneering agencies in implementing the Government Performance and Results Act. All of these actions are designed to assure that every dollar appropriated to our Agency can bring taxpayers the best possible return on their investment.
We also feel very proud of where we are in deploying the most modern integrated management system in government. Now, Mr. Chairman, you have indicated that there are flaws, that there are problems, and that you are undoubtedly hearing from some of our employees about the difficulties of changing the way they do business and operating with this brand new management system, that has modules covering many aspects of the way we manage our business.
Let me tell you, Mr. Chairman, that you are not hearing complaints from other government agencies about their computer systems because they are not at the same stage yet of actually deploying modernized systems. When you try to introduce a new system of this type, yes, you are going to get complaints, and we are very well aware of them. We are trying to deal with them. But we feel, as my written statement gives you in detail, that we have made great progress, more progress than any other government agency, and I feel very good about where we are.
We are not going to be isolated from the State Department. With my friend, Secretary of State Madeleine Albright, in that office, we are going to be working closer with that Department than ever before. But let me tell you, moving into a new building doesn't even physically separate us. We now have 11 buildings. The Department has 20 scattered all over Rosslyn and Washington, DC. We are trying to consolidate our operations. We will be able to collapse our 11 different buildings all operating under the agreements we have reached for commercial rates into one government building, the Ronald Reagan Federal Building.
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Now, it is Congress and the executive branch that built that building; it is an important building in the sense that it is going to be focusing on international trade; and I think it underscores the fact that our agencies make a major contribution to international trade.
In the long run we are going to be able to save money by doing this, Mr. Chairman, and I don't at all apologize for the fact that we are moving into the Ronald Reagan Federal Building.
Most importantly, Mr. Chairman, I am very proud that I can assert that our Agency today serves our people's interests. We serve our foreign policy interests by helping to prevent, to mitigate and to transit from crisis situations. Our long-term development aid clearly has an impact on preventing crisis. Our humanitarian relief aid certainly helps mitigate the many crises that we are finding all over the world. And we have really developed a capacity to help our government and to help other governments transit from crisis situations, as is the case in Haiti and Bosnia and South Africa, Cambodia and the West Bank in Gaza, et cetera.
We also serve America's interests, as Mr. Gejdenson indicated, by creating a demand for American exports in the developing world. The development successes that we have had over the last 30 years are the reason we have been able to double the amount of exports in the last 10 years; it is why the fastest-growing export market for American goods is the developing world where we have worked.
We also serve America's interests in providing our citizens protection from global health and environmental threats. We watched with great fear as we saw the outbreak of the Ebola virus. This is only one of many diseases that threatens the American people.
Just the other day I met with the head of the Rotary International to talk about our efforts to eradicate polio around the world. We are making a major contribution there. And when we achieve that goal, somewhere around the year 2000, Mr. Chairman, we will be able to stop spending about $230 million a year to immunize our children against polio. We have done that in the case of smallpox and I think it should be a major goal of our country to help in the effort to eradicate polio.
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Mr. Chairman, my written testimony offers many examples of specific programs that serve America's interests. Let me sum up here by saying USAID is not, if it ever was, a cold war relic. We are dealing with today's threats to America. We are dealing with today's opportunity to increase exports in a global economy. We are dealing with today's foreign policy challenges.
The end of the cold war gives us a unique opportunity to attack development challenges with good partners overseas. We don't want to work with partners that have frittered away the resources that they have had available to them. We don't want to work with governments that abuse human rights. We don't want to work with governments that don't accept the need to reform their economic systems and political systems to achieve market democracies. We want to achieve tangible results with the taxpayer's dollars. Never again do we want to spend taxpayers dollars in a country where the government's conduct undermines development.
So I think there have been changes. We have achieved equilibrium, we are at the stage where we must be more creative than ever before to make the dollars go further. We must begin to use modern information technology, such as the Internet, to do the development job. And I think we can succeed in doing that.
But the most important thing we must do, and the President's budget this year reflects it, is to maintain American leadership in the development field, because without that leadership, we will not see the goals set by the DAC report achieved. We will see a world that will have 2 billion people in the next decade, no matter what we do really, suffering with food security problems, refugee problems, and an increasing threat of disease and environmental deterioration.
Mr. Chairman, I believe this program serves America's interests; I believe the President's budget request warrants our attention.
I would be happy to later address Mr. Bereuter's question about the housing situation.
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[The prepared statement of Mr. Atwood appears in the appendix.]
Chairman GILMAN. Thank you, Mr. Atwood.
I want to commend you for the progress you have made in the Agency in trying to prepare the Agency and your support of the proposed budget. We now have several weeks to review the draft State Department foreign assistance bill that has been prepared by the committee's staff.
Reports are that you approve of that work and urge the State Department work with the committee on the basis of that draft.
Can you tell us is this a good start to finalizing a bipartisan foreign policy bill here in the Congress?
Mr. ATWOOD. Mr. Chairman, it is a superb start. We have reviewed it, obviously from the perspective of USAID alone. There are other government agencies as well as State Department that have to review this, and OMB will have to review it as far as our taking an administration position. But we think that this bill is a very strong bill as it relates to our development assistance and humanitarian programs.
Chairman GILMAN. Thank you for your comments, and I hope you are going to able to urge the State Department to move expeditiously so we can get the bill out on the floor at an early date.
Mr. Atwood, in 1994, the administration unveiled the microenterprise initiative, but in that initiative, USAID promised to provide $140 million in fiscal year 1996 for microenterprise development. However, due to budget cuts, USAID was only able to provide $120 million. USAID also promised that half of the credit assistance would go to the poorest of the poor, loans of $300 or less.
As I understand it, USAID can account for only about $30 million going into poverty lending. I understand that USAID wants to measure results like increasing incomes rather than the low loan amount. Nevertheless, despite all that, how can we make sure USAID's microenterprise program directs the majority of its assistance to the poorest of the poor?
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Mr. ATWOOD. Thank you for the question, Mr. Chairman. And also I want to thank you for your leadership and that of Mr. Gejdenson. We had a wonderful session with several people who undertake microenterprise programs around the world, including Mohammad Yunus, the creator of this idea from Bangladesh, and I thought that session was an excellent half-day session, where we talked about the progress we have made. I think you heard that USAID has become the world leader in pushing many microenterprise solutions. We did that because we believe it is the right thing to do, but we were prodded by you to do this as well.
I think these programs are extremely important. A microcredit summit was called later in Washington after several Members of Congress, including yourself, participated in this summit. I think we were widely praised for what we have been able to accomplish in this field.
In 1994 when this program began, we found that 80 percent of all clients with loans from our USAID-supported institutions were receiving very small loans, less than $300, and that 34 percent of all of the loan portfolios of institutions receiving support were devoted to poverty lending.
We are going to have to take a survey of our 1996 programs to see if we have indeed reached the 50 percent goal of poverty lending by institutions to which we provide support.
We believe, when you are talking about trying to eliminate extreme poverty in the world--these are people making less than $365 per year--that a $300 loan to start a microenterprise is certainly adequate, and we ought to be focusing on those people at that end of the spectrum in order to achieve the goal of reducing extreme poverty by one half by the year 2015.
Chairman GILMAN. Mr. Atwood, in December you received a memo from USAID's own New Management System transition coordinator calling for ''a more reasoned approach to new management system implementation.'' The memo was written by mid-level managers who were trying to make the $100 million New Management System work, and they reported the following: I am reading from a memo:
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''For the record, we do want the system to work. We are not suggesting that an alternative system would be anything other than a stopgap measure, until we take some work down. Nonetheless, we are falling further behind each day, with no hope of catching up, at least for the foreseeable future. Our mission fully supports the basic concept of NMS, but finds the current process of systemic bugs to be too slow, too resource-intensive and very difficult to implement.''
''On our day-to-day operation, our mission can be jeopardized if mission resources continue to be tied up in a painfully slow process existing at this point. We are painted into a corner and encourage leadership from above to extract ourselves.''
Can you comment on that report for us, Mr. Atwood?
Mr. ATWOOD. Yes, Mr. Chairman.
I had a meeting with those individuals. They are systems coordinators in the various USAID bureaus, and there is indeed a good deal of frustration.
I am not trying to cover that frustration up. There is frustration any time you introduce new systems. It took up to, I believe, 18 months to introduce the old systems, and it took us 8 years to fully utilize those systems in the way USAID did business. We are trying to do this one a lot faster.
We are trying to use what one corporate leader, the head of Quantum Corporation, called the ''Big Bang Approach.'' It is indeed an effort to try to activate this system and use it throughout our Agency all at once. That has its problems, but we believe that there are even more risks in trying to introduce this one module at a time.
We are deploying this system using state-of-the-art techniques and we have gone out to the private sector and to the rest of government, OMB and GAO, to seek their counsel on these matters, and they have encouraged us to proceed. That doesn't mean that we don't run into problems.
And the two problems that we are facing right now are the need to integrate the old data and to increase our satellite communication capabilities. When we have 11 different accounting systems in a worldwide operation, the old data is a source of real problems for us.
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Our new system, which is a single-entry system, will not allow us to conduct transactions without having clean data. It has to be consistent. We can't have one piece of information in a mission in South Africa, and another piece of information in our contract office, and another piece of information in our regional bureau office. We have to reconcile the differences. It is forcing us to do that. That is why we activated the system on October 1st, believing the first quarter of a fiscal year we would have fewer transactions and would be able to migrate--to move--the old data into the system.
We have been amazed at how bad the old data is, and have undertaken, as I have indicated to you in my statement, to clean up thousands of records in the old systems.
We have also had some communications problems. The bandwidth we were given on the satellites for use by the 42 missions now using the NMS was too narrow. We had to go to the Navy and the DCSPO system to try to get them to give us more time on those systems. We have made major progress in terms of narrowing the timeframe necessary to communicate with our people overseas. But the reason that I am hearing these complaints is because we have a system that is active--that is being used now.
There is no other government agency that has made this progress. It will take us another year to get this all straightened out, and we still have some modules we want to introduce next year, a personnel and training module. But we are going to be the most modern government agency around for a long time to come. We have got to stick to this system. We have problems, we know what they are, we are making changes on a daily basis to accommodate the problems we are facing.
Chairman GILMAN. We wish you well in your endeavors. We wish you success in trying to make the system a more modernized system.
Mr. Gejdenson.
Mr. GEJDENSON. Thank you, Mr. Chairman.
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I was getting the sense for a while that you were trying use the name of your new building to curry favor with the chairman.
Mr. ATWOOD. Not at all. It was the entire Congress that voted to call it the Ronald Reagan Federal Building.
Mr. GEJDENSON. Clearly we are at a stage where we all knew that there were humane, economic and security reasons for USAID's activities. We spent very little time educating the public about those.
We used the Soviet Union kind of for the reason for the right and the left to engage in these programs to keep our spheres of influence. So I guess we have to take some blame that the public may not be exactly where some of the Members of Congress who have worked with you on these programs are, although there is more support than sometimes my colleagues recognize.
The economic advantages and the human advantages and the strategic advantages may be most easily discerned close to home. If you look at the situation in Haiti, my estimates, about 40,000 refugees came to this country in a short period of time from Haiti. If each of them spent an average of just 1 year on any kind of government assistance, some people more, some people not at all, you know, you would have an expenditure in the change of $300 billion--$300 million, to take care of one person for 1 year, on the average assistance program of about $7,000 a year. And so when you look at USAID's programs and America's role there, it makes a lot more sense, in that it is not just humanitarian, not just economic opportunity, if Haiti strived it would be a market for America's goods, but it took the pressure off other places to provide services to refugees, not to mention the plight of those who drowned on the way over.
Let me just for a moment, you know, looking at the $300 million spent, you know, for 1 year of any kind of government assistance on average, looking at what we are doing in Haiti today, and the fact that we don't see boatloads of people risking their lives to come over here, I don't necessarily want you to go through all those details at the moment, but your sense, what other kinds of things would you do in a country like Haiti; are you happy with where we are?
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I notice, the court system, we are working on the court system, that is obviously critical, trying to develop a broader public sector. I don't necessarily need numbers, but I am wondering, as we try to explain to the public, whether it is Haiti or anywhere else, what are the best examples of what we do in the world? I think the average citizen, while he wants to see the economic turn, is recognizing humanitarian issues.
Mr. ATWOOD. Thank you, Mr. Gedjenson.
I want to congratulate you on your landslide victory this year. Everything is relative. I agree with your point. Clearly we were focused, and I know this well, because I was involved in the transition from the Bush to the Clinton administration, and we focused on the fact that there were 100,000 boats being built in Haiti, ready to come over, as we thought, on Inauguration Day. Clearly it is better for people to have economic opportunity in their own country.
The progress we have made in Haiti is real, it has been slow, and clearly there are many other things that we would like to see done. I am sorry that they have moved so slowly on privatization in Haiti, but they have at least now passed in their parliament a bill that would enable that to happen. We believe that that will trigger a lot of resources coming in from the IMF Agreement and the World Bank, and they will be able to get their economy off its back.
We still see fewer human rights abuses in Haiti than ever before. We see human rights abuses, however, and we certainly take that to the government of Haiti when we see those abuses. But I think the point you make is the point that needs to be underscored here, that despite the problems, and we need to be candid about them, we have a major foreign policy achievement in Haiti in at least stabilizing the situation to some extent, seeing the election, seeing President Aristide step aside and a president come in as a result of a free and fair election.
There are other things that can be attributed to having the institutional capacity that USAID represents to help bring countries through a transition. South Africa is a perfect example. I just came back last week from South Africa with the Vice President. There is a country that is now a model for the rest of world in terms of transitions, but it was not a foregone conclusion that it would happen that way.
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A lot of USAID investments helped them with their electoral process, with the engineering of what has now become a stable part of society in that country, and I can go on with other examples.
Mr. GEJDENSON. If the chairman would indulge, I am not going to ask a question. But if staff would get--I remember a group called the Futures Group showed some graphs on the effect of population growth on the housing demand, healthcare facility demand, virtually no economy in the world can have that much population growth, I am not thinking of Haiti now, but I would like to see those general figures, if you have them back in the vault somewhere?
[The information referred to appears in the appendix on page 50.]
Mr. BEREUTER. Mr. Atwood, I have two areas of questions. One you heard me discuss before, which is the housing guarantee programs and urban development programs of which GAO has been particularly critical. I tried to work that in on your time instead of my own, but that didn't work.
Mr. ATWOOD. I am sorry.
Mr. BEREUTER. Second----
Mr. ATWOOD. You are the Chair, you can suspend the time for a moment.
Mr. BEREUTER. Second, I noted with interest and a lot of support, your comments about the export jurisdiction, the agricultural exports that have flowed as a result of our food aid program, where so many countries that have formerly received food aid are now recipients of American exports, and approved of what you had to say.
I thought you might be interested in the headlines of Congress Daily's edition today says: Farmers call for $2 billion increase in foreign aid, half of it should be spent on broad-based economic efforts. But that ought to be good news to you. And the other billion should be used for additional foreign aid, foreign affairs functions.
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There is no mention about arrearages eating up those funds.
The more amazing part is the Farm Bureau and the National Farmers Union are on the same side of an issue, that rarely happens. So, you have the makings of a good coalition that you will have to work at to support.
I notice with some interest that the changes being proposed for the PL—480 program, Title I funding, is largely being shifted over to a 350—300 account, which is an agricultural authorization appropriation account. I guess that is in some ways good news to you.
I hope that it doesn't change our interest and jurisdiction from this committee.
I would like to know what you can explain to me about the arrangements or deal that has been made by USAID and USDA, what kind of commitment Secretary Glickman has made and OAD has made for Title I?
I notice you have $10 million left in PL—480 Title I for administrative costs, which largely is the cost for cargo preference. My impression is we ought to take the $10 million you kept there and move it over to another one of your functions and zero out your cargo preference.
If we are going to keep this anachronism and waste of taxpayers' funds, it ought to be funded out of the Department of the Defense budget or the DOD budget. I think we can find a better place for those $10 million and permit you to do some things you are responsible for.
I would welcome some comments, but I would guess it might be best if you didn't comment.
Mr. ATWOOD. Actually, Mr. Chairman, the truth is I don't know all the reasons why the Title I program was shifted from the 150 account, but we all know the pressures that are on the 150 account, so I guess in a sense, I welcome that.
I had my own personal views about cargo preference, but that whole issue is very controversial and since Secretary Glickman is being paid to answer those questions, I will let him do that.
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I did want to comment on what you said about our creating export markets. I think that has become very obvious. It has become obvious, first, to our farmers, who were the first involved in such a large way in exporting from our country. The rest of the sectors of our economy are beginning to realize how important the global economy is to them. Only 60 percent of our economy is in the export/import sector, and less than half of that is in exports. But that is the reason our economy is so strong vis-a-vis the economies of Japan and Europe. So we are beginning to realize how important that is to our economy.
We haven't acted on that realization, and part of that is having a foreign assistance program that serves that interest. I will just give you a couple of figures to illustrate that point.
Between the years of 1953 and 1961, we donated programs to Korea that totaled $2.6 billion. In 1993, the total exports to Korea were $14.8 billion, had risen in 1994 to $18 billion, and it is now closer to $20 billion per year every year--every billion dollars accounting for about 20,000 U.S. jobs. So the contributions have been many and the investments we have made over the years in developing markets overseas has really been the biggest reason for our increased exports.
And I would say this as well: Four out of five people who are going to be living on the face of this earth in the year 2000, are going to be living in the developing world. We can't afford to ignore the developing world in the future.
Mr. Chairman, I will take the liberty now, even though the red light is on, to address your questions about the Housing Guaranty program.
I consider this program to be an extremely important program, and I believe that our own reforms of our administration of this program have followed the Congress' adoption of the Credit Reform Act. That act has forced every agency in government to look more seriously at how they manage these programs, to assure that we are working only in countries that are creditworthy, that are still developing, but are creditworthy in their banking systems and the like, that enable us to leverage the money.
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I have seen with my own eyes the kinds of programs that these leveraging dollars can provide; housing programs in South Africa and total conversion of very poor neighborhoods in the city of Chicago, for example, that have really benefited from these programs.
Now, we are changing the name of our Housing Guaranty program, not just to change the name but because we are changing the program itself. This year we are calling it the Urban and Environmental program, and we are asking for only $3 million. I wish we would have asked for more, but we are also asking for authority for an enhanced credit program through a transfer of up to $10 million of development assistance into these kinds of programs.
If we are going to reduce the overall amount of grant assistance that we provide; if we are working in countries like Indonesia or South Africa where there is a banking system that works; and we can leverage up to 10 times for each dollar invested and get a real benefit in terms of development results, I think we should do it.
Urbanization continues to be one of the biggest problems we face in the developing world. If we can't deal with cities that have doubled in size in the last decade in terms of the infrastructure, we can't deal with development issues, we can't create jobs, we can't create housing for the people that live in these cities.
Mr. BEREUTER. Thank you. I will have followup questions later.
Chairman GILMAN. The established ranking member, Mr. Hamilton, has deferred his question, and we will go to the other members in order of appearance.
Mr. Menendez is recognized for 5 minutes.
Mr. MENENDEZ. Thank you, Mr. Chairman.
As you know, since I came 4 years ago to the committee, I have been supportive of USAID in its functions. I have a concern that has been continuing for 4 years without getting any better in this budget, and I would like to address that.
We continuously look at some of the major issues that we are concerned about in this country in narcotics interdiction; in dealing with the questions of cementing the foundations for peace in many countries in Central and Latin America that have moved from civil conflicts; questions of immigration, and we are spending untold numbers of dollars to stop, detain, and deport people. It would be, I think, a lot better to be able to enhance the opportunities for them never to come here, because people leave their native countries for primarily two reasons: One is civil unrest; the other is, in fact, economic opportunity.
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We talk about developing markets, and certainly we have seen that trade with Latin America equals trade to the entire Pacific Rim, minus Japan. That is an enormous statement.
And finally, we look at the unrest that is taking place, the poverty and popular discontentment in Haiti, Colombia, Honduras and Ecuador. I am looking at the committee language in the Foreign Operations bill, specifically noting concern about inadequate funding for this region. And I don't see the concern reflected or responded to in the presentation that is in the documents you have given to the committee for the next fiscal year. So I would like you to address that.
I am just going to lay out the questions, if I may, and have you respond to them. I would like you to address them.
Second, I am concerned as the ranking member on Africa--the World Bank released a report yesterday that said that the food needs of developing countries could double in the next 30 years. Given that prediction and our concerns about population growth, do you think that our current level of assistance to regions most heavily impacted by these problems like sub-Saharan Africa are sufficient? And would you talk about initiatives that were started in 1994 by the President on what are the effects of the Great Horn of Africa Initiative?
And finally, last year the State Department budget included a specific amount for Cuba, $2 million under the auspices of the Latin American Regional Account. I understand that at least $1 million of that fiscal 1997 money has been reprogrammed and in 1998 the intention is to limit the budget to $1.5 million. This past week we celebrated a milestone in the context of the legislation signed by the President last year. The question is, given the President's and Congress' strong interest in seeking transitions to democracy in Cuba, how do the provisions that you are providing for the reprogramming of the limitation fall in line with the congressional mandates in the Cuban Democracy Act and the Libertad Act?
Mr. ATWOOD. Yes. Thank you, Mr. Menendez. And let me say that it has been a pleasure working with you on these matters.
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In particular, on the question of Cuba, I don't think there is anyone who can see the situation in our own hemisphere and all of the progress and be satisfied with the continuing totalitarian regime in Cuba. Our Agency has developed, consulting with you and other Members of Congress, a plan for a transition in Cuba. We hope we can implement that plan soon.
As we look at opportunities in Cuba for effecting the situation, we clearly want to do what we can to influence the situation inside that closed state. I can tell you that we are making progress in implementing the Freedom House grant. I have been in constant touch with the Freedom House people including Frank Calson who is working with that program.
The situation has grown a little more tense in the last few months in Cuba, and it is even more difficult to operate. That obviously is why we have to be very careful in what we say publicly about the situation.
As you know, as you cited, we put $1.5 million in this program, in this budget, for that type of project in Cuba. I don't think that if we were able to come up with programs and plans that we had great confidence would have an impact on the situation, that we would feel constrained. We would have to come back to Congress and reprogram our resources. But we obviously need to develop proposals that will work, and as you know quite well, it is extraordinarily difficult operating in a closed society.
So, I can just assure you that we are examining right now four or five proposals and we want to work with Members of Congress as we examine those proposals, to where we make sure that we will make progress and not feel constrained if we need to reprogram money if we think we can influence the situation.
I agree with you about Latin America, but I agree with you about Africa as well. The question is whether we are providing enough resources. We are trying to do our bit. We have one of the few budgetary accounts of government that are discretionary. And when you are trying to balance the budget, it is extremely difficult coming up here and suggesting that foreign aid ought to receive a dramatic increase isn't necessarily going to find a lot of receptive ears. In fact, we have to find a balanced approach that the President and Congress can agree upon.
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But I also want to say with respect to Latin America, we have asked for an increase. If you look at all accounts for Latin America this year, there is an increase of about $15 million for Latin America. Should we be doing more?
I believe that the programs we have in place in Latin America to deal with drugs are some of the most effective programs we have in place. I have visited the Chiapas area of Bolivia and believe that the alternative crops that we are producing there now are succeeding in their purpose. But it is not just alternative crops. It is an entire system, including encouraging democratic governance, including building roads with self-help programs, including building schools and healthcare facilities and the like. There have really, along with law enforcement, made a major impact in that area, in terms of coca production.
I believe that the alternating programs in Peru, which have experienced for the first time in many years a downsizing of coca production this year, have made a major impact. And I am pleased that we have been able to convince the Japanese to invest in this area.
Do we need more for Latin America? When you have these kinds of budget constraints and see the kinds of changes taking place in Latin America, people can easily rationalize less assistance. I am not so sure. There are still vulnerable societies down there. If we had the money, we should spend it.
The same is true of the food needs in Africa. That is why we have in this budget a food security initiative for Africa. It is not so much what we can do ourselves, but how we influence other governments. In the case of the Greater Horn of Africa Initiative, we have influenced other donors to stop compartmentalizing emergency food aid and to see it in terms of its effect on long-term development.
We equally are going to be putting effort into agricultural development and convincing countries in that region to trade more liberally. So the intended overall impact over a 15-year period is to reduce the amount of emergency food aid those countries need.
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I feel very good that that Presidential initiative has had an impact on thinking in the region. It is the influence, the leadership, as much as the resources, that is brought to bear on these particular problems.
Chairman GILMAN. Mr. Smith.
Mr. SMITH. Thank you very much.
I know you are sincere in suggesting we work for a bipartisan foreign policy. But I know you know there is at least one major obstacle that will lead to impasse again and argument on both sides, and that is the linkage of the population control issue with abortion.
There are some in the administration who have decided that human beings are a sort of cancer on the planet. They see numbers and the reduction of numbers as something that needs to be done at all costs, including abortion overseas. They put it ahead of human rights, ahead of feeding people, ahead of child survival efforts, because bottom line, a lower number seems to be what it is all about.
I happen to believe the child survival efforts in this country are very seriously undermined, compromised, when we support organizations that are aggressively supporting abortion overseas. UNICEF is fond of saying diarrheal disease is the leading killer of children. No, it is No. 2. The leading killer of children here and overseas is abortion. Whether legal or illegal, these precious unborn children are being slaughtered in countries all over the world and unfortunately we are playing a part by supporting organizations that see it as their mission and mandate to support abortion where it is illegal.
I asked Madeleine Albright if she had seen, she had not--I am sure you have seen the Vision 2000 statement of the IPPF based in London, issued back in 1992? And it said, and I quote: ''To bring pressure on government and campaign for policy and legislative changes to remove restrictions against abortion.''
Fred Sai, who was the former chairman or president of IPCS, the IPPS Strategic Plan, Vision 2000, outlines activities in both secretariat and family planning association levels to further IPPF's explicit goal in increasing the right and access to abortion.
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Mr. Atwood, I would ask you, you know, you won the victory, you won the vote the other day that was somewhat mixed, and Members also voted for legislation that I offered, we all know that the prospects for this legislation is seriously dimmed as a result of that House vote. Let me advise you, though, that it was won at a cost. There were a number of Members intending to vote against the President who were pressured, as I have never seen pressured before, and I have had this thrown in my face, so I am not naming names.
You can check this out; you probably know who they are. It was an apparent victory. Yes, you won the first round and that money will go out to these organizations and they will spend it as they see fit. But there is money in the next cycle that will not be loosed to these organizations to promote abortion.
The level of interest and the level of education among the members will increase, I believe, among the members. This Vision 2000, and all the country action plans that IPPF envisions for these countries to bring down their right-to-life laws will be made known to people. And I hope that somehow if the interest really is in promoting family planning, that you will see that my language is offered and now pending in the Senate, was very simply to get to abortion neutrality. Contribute money to family planning, remove the lid, have no ceiling. I think you will agree that if our legislation, the oversight legislation had passed, there would be more money, not less available on March 1st; isn't that true?
Mr. ATWOOD. Mr. Smith, may I answer your question a little more elliptically?
Mr. SMITH. Yes, please.
Mr. ATWOOD. First, I want so say from a personal point of view, I abhor abortion. I am a Catholic. I have just had my daughter baptized as a Catholic. I have my own personal beliefs about these matters, and I can say to you from that perspective that it is not our goal to try to overturn laws in various other countries against abortion.
It is not our goal to have any influence whatsoever over what other countries do on this very, very sensitive, serious matter. As a matter of fact--and I think this is why the statement you read relating to IPPF's 1992 statement is mitigated considerably. All nations that adopted the plan for action in Cairo agreed that this was a sovereign matter and that there would be no effort to try to overturn abortion laws of one sort or the other.
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And our Vice President, and you were there, Mr. Smith, made that statement very clearly. That was not our goal and not the goal of our family planning program in particular, which has nothing to do with abortion, unless, of course, you look at the plan objectively and say that fewer abortions occur as a result of our family planning program.
We operate in countries like Russia and Romania, which do not have a population program, in the sense that they can't sustain the population growth, but they have abortion problems. The women in those countries were having upwards of 8 pregnancies in their lifetime, and most of those were aborted. And our program has dropped that down from 8 to 2. I believe we have had a major impact in stopping abortions in those countries. And we have that impact all over the world where people are voluntarily practicing family planning programs. The purpose of our program is not to try to end the life of human beings.
I have my personal views about what abortion does, and I want to tell you that when a family is able to space its children adequately in very poor environments, that they are, in doing that, able to feed those children and to assure that they survive, which is why, of course, I appreciate very much your support for our child survival programs. That is an important aspect of what we do.
So, I believe that our family planning programs reduce abortions. If we continue to see cuts in those programs, we are going to see more unintended pregnancies, more abortions and more maternal deaths as a result.
I understand your position with respect to IPPF. IPPF has never, ever, even during the days of the Mexico City policy, spent more than 1 percent of its budget on abortion-related things. And when I say abortion-related, a lot of what they do is to help people who have had botched abortions.
We have had such a situation during the Mexico City policies, where women would come into the clinics who had experienced botched abortions and the doctors weren't even able to save them.
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Now, that, it seems to me is an overreaction to the issue. We need to understand that an international organization like IPPF operates in many countries, that they abide by the laws of all of those countries. We do not use a single dime of American Government money to perform abortions or to do anything related to abortions. And that is our position.
I realize that we are going to continue to have a disagreement on those issues. I hope it will continue to be a civil one as it also has been because I very much appreciate your support for other aspects of our program.
Mr. SMITH. Thank you.
Mr. Chairman, I have a followup question.
Chairman GILMAN. Your time has expired. So please be brief.
Mr. SMITH. As you know, the botched abortions have always been completely permissible, and I think it is our duty to provide women help with that. Under the Mexico City thing, that is also included and my language explicitly excluded that under what we would allow someone else to do, but to use our own U.S. funds because we do have an obligation to help those women. That isn't an issue. We would help those women in those situations.
In terms of what IPPF does overseas, as you know, they are the chief lobby force in most of those countries in trying to bring down these pro-life laws. And they have successes if they are made effective by huge nations, by the United States and perhaps our other allies in doing this.
Now, you are not for abortion, I am not for abortion. We need to be talking about consequences; how we make the world abortion free, rather than have free abortion.
What has happened is that in Planned Parenthood groups, in every country where abortion is liberalized and made permissible, the numbers skyrocket and level off. Ours went to 1.5 million and now it is 1.3 or 1.4 million. That is the expectation in every country. So if we contribute to those organizations that have an abortion manifest, like Vision 2000, to bring down those pro-life laws, you can bring it to the bank that in every country where they succeed, ultimately there will be skyrocketing abortions. We need to make the world abortion free.
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Chairman GILMAN. The gentleman's time has expired.
Mr. Hastings.
Mr. HASTINGS. Thank you, very much, Mr. Chairman.
Mr. Atwood, as you well know, I support the submission of USAID, and I pledge to you that I will continue on those efforts. I apologize to you and to my colleagues for being tardy and arriving here, and I don't know the story of the cabbage that is over there, and I hesitate to ask.
Chairman GILMAN. Generally nutritional.
Mr. HASTINGS. In this era of cloning, I thought maybe you had some new technology. But if you ever need cabbage, I represent the Glades area. And I was told that you indicated in your earlier queries and responses that there were 26 missions that are being closed; am I correct?
Mr. ATWOOD. That is right.
Mr. HASTINGS. How many of them are in Africa?
Mr. ATWOOD. I would have to get that for the record.
Mr. HASTINGS. Would you please?
Mr. ATWOOD. Yes.
[This information was provided following the hearing.]
The Agency announced 21 mission close-outs in FY 1993. Since then the decision was made to close additional missions. As a result 26 posts have been closed, including 11 in sub-Saharan Africa: Botswana, Burkina Faso, Cameroon, Cape Verde, Chad, Cote d'Ivoire, The Gambia, Lesotho, Swaziland, Togo, and Zaire.
Mr. HASTINGS. Brian, none about you or other members of your staff or other colleagues, but I believe that it is in the national interest of the United States to continue to provide some support to the American institutions of excellence in Israel and Lebanon, Greece, and elsewhere, and it has come to my attention that USAID may have a different view and be about the business of trying to terminate these programs. I want to know will there be a full $14 and $16 million out of USAID program aid in fiscal year 1997?
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Mr. ATWOOD. Mr. Hastings, let me just say a word about the American Schools and Hospitals Abroad program, which you have referred to. We consider this to be important work. In the past we know a lot of good has been done through this program.
What we are under now is a lot of pressure in terms of balancing the budget, and we must put things in priority order. Our mission principally is development assistance and humanitarian aid. In light of the other pressures that are on us to provide aid to Africa and Latin America and the like, we have reduced our request for fiscal 1998 to the ASHA program to $5 million.
We had hopes that we could phase this program out despite all of the good that it has done over the years. We keep getting signals from people like yourself and others that this isn't going to fly.
What we are going to try to do in fiscal 1997, and with the $5 million, we have $9.6 million that hasn't yet been programmed for ASHA, we are going to have another competitive bid so we can begin to award those kinds of grants to those institutions.
Mr. HASTINGS. I just want you to know that I will be vigorous in my support of the efforts as I enunciate.
Chairman Gilman has frozen our funding of the Palestinian Authority, and I would like to know, I don't know if you are in a position, if you are, please tell me, what impact had the freeze had on the ground, and have any programs been halted, has it impacted our leadership role in trying to bring a resolution in the Middle East peace process?
Mr. ATWOOD. Well, Mr. Hastings, we would like to see the money come forward. What I believe the freeze is on is the contributions we make to the Holst Fund. This fund was created because in the beginning days of the Palestinian Authority, they didn't have the resources.
They had to set up tax schemes to collect revenues from their own people, so therefore we had to pay salaries for the police and other officials of the government, based on an international agreement that we made.
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It is less important now because they have begun to raise revenues, but we still, in order to fulfill our commitment, would like to have the money available in case it is needed. So we would continue to ask the Chairman if he would release the hold on those.
Mr. HASTINGS. My final question is why has the administration included in the request a line item for the Development Fund of Africa, or more specifically, how committed is the administration to allowing Item 4, the Development Fund item?
That is my final question, Mr. Chairman.
Mr. ATWOOD. The Development Fund for Africa was created by Congress to underscore the need for working in the neediest region in the world, to suggest a different way of doing business, to measure results. We have used that congressional initiative to pattern our overall reform in all areas. We consider it to be important, symbolically, that we underscore our commitment to Africa by submitting a request for the Development Fund to Africa.
The last 2 years, Congress has seen fit to eliminate that account, but we have been able to maintain, at least as a proportion of our overall budget, our spending in sub-Saharan Africa. We consider it to be extremely important, because this is where the great opportunities are in terms of an export market for American goods in the future.
There are about a dozen countries really ready to take off in Africa. There are more countries that are possibly going to fail than in any other region in the world because of food security problems, tension, all sorts of poverty-related issues, disease, AIDS, and the like. We feel we must contribute to crisis prevention in Africa because there are opportunities for us to see real development.
Mr. HASTINGS. Thank you.
Chairman GILMAN. Thank you, Mr. Hastings.
And just by way of comment, we have had a hold on the funds until we get assurance from the PLO that they are going to meet a number of conditions they have agreed to in the YASO Agreement. We also have until September that we have to use or lose funds, and we are keeping a close eye on them.
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Mr. HASTINGS. I appreciate that, Mr. Chairman, I am sure you understand my concern.
Chairman GILMAN. Mr. Ballenger.
Mr. BALLENGER. Thank you.
You did go to the swearing in of the President in Nicaragua?
Mr. ATWOOD. Yes, I actually led the Presidential delegation to the elections.
Mr. BALLENGER. Yes, you invited me, and I am glad I didn't accept, because you all had to sit in the sun for an hour and a half.
In reference to microenterprises, I have watched people in El Salvador begin a fabulous job with $200 and $300 loans. I was fortunate enough this time to visit in Nicaragua, a development there. I wish somebody could take pictures of what is going on there.
I met a young lady whose first loan was $100 and she paid it back and then got $300. She showed me her shop. I asked her what her inventory was. She thought it was about $7,000 or $8,000. They had done all this, and it continued to grow.
But I would like to commend you and say I would enjoy working with the State Department and USAID in this area because it is the best money we have ever invested. Just to watch it operate there in Nicaragua, which was at one time a disaster, I think it has gone beautifully.
Let me ask you a question. In the budget here for Haiti there was an international peacekeeping force, in 1996 it was $39 million, then it dropped to $2.8 million in 1997, and it disappears in 1998. In another section it is $15 million for peacekeeping in Haiti, and it looks like it is a continuous $15 million. It says peacekeeping, and 15, 15, 15. It sounds to me like we are going to have a permanent peacekeeping force in Haiti. Does that make sense to you?
Mr. ATWOOD. I am really not sure. I would probably have to submit that for the record. I know we do not have any peacekeepers in Haiti any longer. We have a small, primarily Canadian force there trying to maintain security while we work on the police force, to try to get them to do their job the way they should. But I am sorry, Mr. Ballenger, I don't know that.
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Mr. BALLENGER. You probably don't have the same piece of paper we do.
Mr. ATWOOD. If you give me a minute, I may be able to provide that answer before we conclude here. But I don't have it.
Mr. BALLENGER. I thought it should be shrinking and going away.
[The information referred to was supplied following the hearing.]
As indicated in the Department's FY 1998 request for the Contributions to International Peacekeeping Activities (CIPA) account, there has been a marked decline in the amounts paid (in FY 1996) or requested (in FY 1997 and FY 1998) for U.N. peacekeeping assessments in Haiti. The USG paid $39.9 million in U.N. assessments for the U.N. Mission in Haiti (UNMIH) in FY 1996. The Administration requested $2.8 million for this purpose in FY 1997 and none in FY 1998. Both requests were based on our best information as to likely U.N. peacekeeping requirements at the time they were submitted.
The creation of the U.N. Support Mission in Haiti (UNSMIH) in June 1996 has resulted in assessments of $12.9 million for July 1996 through May 1997. We will need to submit a reprogramming that would allow us to pay these assessments with FY 1997 funds. As to the future, the U.N. Security Council is due to receive a report on UNSMIH from the Secretary General no later than March 31. He is likely to recommend the extension of UNSMIH through the end of July, as contemplated when the mission was renewed in December, in order to consolidate the gains that have been made and allow for further professionalization of the Haitian National Police. We will continue consulting closely with Congress on the situation in Haiti as UNSMIH's mandate draws to a close.
In addition to its share of U.N. assessments for UNSMIH, the USG has incurrred since July 1996 certain additional peacekeeping expenses related to supporting a force of 500 voluntary Pakistani troops (which supplements U.N. troops), providing medium-lift helicopter capability, and recruiting a cadre of up to 50 U.S. civilian police (CIVPOL) to serve as part of a 300-man U.N. CIVPOL contingent. These additional expenses, paid from the Department's voluntary PKO, ESF, and INL accounts, totaled $12.07 million in PKO funds in FY 1996, and are estimated at $15.2 million in voluntary PKO, $6.84 million in ESF, and $500,000 in INL funds for FY 1997. We have requested $15 million in voluntary PKO funds for this purpose in FY 1998.
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Let me ask, mainly because I have been involved in it 30 years, how will Central America rate as a priority?
I know the President is planning on going to Costa Rica for the gathering there. Is there an effort, as far as you know, to examine the trade disparities that NAFTA has created for Central America?
Mr. ATWOOD. Yes, Mr. Ballenger. You know, we consider Central America a growing market for American goods now that peace has come to that region. I went down a year ago and closed our mission after 50 years in Costa Rica, and there was an awful lot of gratitude for what the United States has done. Basically through our development programs and the good partnership with that democracy, we have accomplished a sustainable economy and sustainable democracy.
In addition, we fronted a lot of money to try to help the transition in El Salvador. That economy which recently is experiencing trouble, but had been seeing growth rates of 6 to 8 percent a year, is doing quite well. I am not sure we understand all the reasons it is starting to falter, but we are still concerned about that.
The most important country in Central America today is Guatemala, which is going through a new transition. We are providing additional resources in this budget for the transition in Guatemala, and we have great expectation that Guatemala, now that it has begun to reach into the global community, global economy, will also see a real increase in growth rates.
They, themselves, are investing a lot of money in their own transition. But the international community has pledged something like $900 million to help them in the transition. So Central America continues to be our backyard. We continue to see an increasing amount of investment and trade going into Central America, which compensates some for the reduction in aid dollars going there.
There are still vulnerable countries, still countries that experience tension, where we still need to be involved. It seems to me, until we strengthen the institutions, as we did in Costa Rica to a point where we can walk away and say this is a sustainable democracy and free market economy.
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Mr. BALLENGER. Thank you, Mr. Chairman.
Chairman GILMAN. Thank you.
Mr. Hamilton.
Mr. HAMILTON. Good morning, Mr. Atwood.
We are very pleased to have you here. And let me say that I have admired the way you have handled your responsibilities at USAID. I think it is one of the tougher jobs in that town, and you have done very well indeed.
The Chairman advises me that you and your wife just became parents, and I want to extend my best wishes to you and your family on that very significant and happy event.
I don't know if anybody has asked about total resources, but I would like to get you on record on that. The President has come in asking for an increase for the 150 account of about 6.7 percent, if I recall correctly, and I think your USAID budget request is up 6 percent or so. You know the budget climate we are in here.
How do you support an increase in foreign aid? Why is that important to the country today?
Mr. ATWOOD. Mr. Hamilton, first, thank you for your kind words. I have enjoyed working with you over the years. As you know, I called you in a state of shock a few weeks ago when I heard that you had announced your retirement, and I don't think any Member of Congress has done more in the foreign affairs area than you have.
How do we justify this? I just had a meeting the other day with General Nash, and I am going to be talking about the role we play. Diplomacy and development are really the first line of defense. If we can prevent crises through our development and diplomacy efforts, we are not going to have to commit American forces.
It seems to me that $19.4 billion as compared--I don't know what the request for defense is here--is rather small. It is rather small given that it is the first line of defense. We cannot continue to close missions and embassies around the world and not have people present so that we don't know about a problem until it is too late to handle.
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We can't, it seems to me, afford to allow the tensions in a society to go without being tended to in places like Rwanda, until all of a sudden it explodes into genocide. We have to be there when those crises occur. It is going to be a cost to this country no matter what, humanitarian, emergency food, refugee assistance, all the manifestations of that kind of crises are going to be borne principally by the United States.
Mr. HAMILTON. We have been asking for some accounting for some years. You have been on a downward slope for some time.
Mr. ATWOOD. That is correct. There has been some controversy about what the cut is, but without that cut in the mid-1980's, we still have experienced about a 40 percent reduction in real terms in the 150 account.
Mr. HAMILTON. The other thing is this whole question of reorganization. I don't think we have yet the administration's view on that, although as I recall, Secretary Albright said, I think in her confirmation hearings, that she had an open mind on it. I would like to get your bottom line on all of this from the standpoint of USAID. What is it that is important for you in any reorganization proposal, what are you looking at from your standpoint, what do you want to preserve?
Mr. ATWOOD. First, Mr. Hamilton, it is clear that we in the administration are examining these questions. We must examine these questions. Foreign affairs machinery always needs to be examined from this perspective; can we coordinate more, be more efficient, and the like. So I certainly do not feel that is in any way a negative. We should be doing that kind of work.
From the perspective of development assistance and humanitarian assistance, I think there are three important factors, and I have said this to the Secretary and others and I have said it publicly. The first is that long-term development assistance is a strategic investment, and requires statutory protection against the day-to-day shorter-term foreign policy events.
Also, USAID is a specialized agency. It needs the management tools to get the job done. It seems to me wherever it is, it has to have its own procurement systems, personnel systems and the like, because we have a unique job to do. It is not diplomatic, even though it supports our diplomacy.
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The third is we must maintain our leadership internally and we shouldn't downgrade the development mission; we should be looking to upgrade that position.
Mr. HAMILTON. The essence of this is that although the 150 account takes into account certain things, including diplomacy--diplomats are especially trained to do their function with regard to foreign policy--but they do not have the management skills and the special skills that you must have to implement foreign aid programs.
Mr. ATWOOD. Mr. Hamilton, having been a diplomat and not only a Foreign Service officer but the dean of professional studies at the Foreign Service Institute, I can tell you that Foreign Service officers are trained to be diplomats, good reporting officers, and the like. They are generalists, basically. USAID hires economists and environmentalists and whatever, and we need to have that capacity. That is a different type of profession and it is a different culture altogether.
Mr. HAMILTON. Now, in looking at your budget, the biggest increase is a request for a $275 million increase for NIS. That is far more than for any other region. Why such a big increase for NIS here, and not for Africa, not for Latin America, not for other things?
Mr. ATWOOD. We are fully intending to begin to move away from NIS soon when we see these achievements economically and domestically. There have often been areas we have neglected. We haven't worked as much as we should in central Asia, for example.
We have had to cut our Russia program back considerably. So what we are asking for now is additional resources for a partnership for additional freedom in this area so we can begin to establish linkages between institutions in our country and institutions in the other parts of the world.
Mr. HAMILTON. We now provide less for Russia than we do for Armenia, do we not.
Mr. ATWOOD. Not now, as of now, the total for Russia in 1997 is $95.4 million and the total for Armenia is $95 million.
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Mr. HAMILTON. And Armenia has about 3 percent of the population of Russia. But just to give a perspective, I can remember cutting Russian aid over $1 billion just a couple years ago.
Mr. ATWOOD. It was over $2 billion, if all accounts were taken into account. Obviously, the job isn't done.
We continue to want to see democracy and the rule of law become a part of Russian life. There is still a lot to do before we can see trade investment taking over. A large part of our program is to encourage trade, and when that is done, we can walk away from Russia feeling they have achieved a democratic market economy.
Mr. HAMILTON. That relates to SEED and the Bosnia program. SEED, of course, was established for Central European countries and now, if I read the figures correctly, you are putting a very large portion of the SEED program into Bosnia. And accordingly, of course, Central European countries are being cut back sharply.
I want you to give us a rationale for that, if you would. Among other things, how do those Central European countries feel about that, Poland and the Baltic states and so forth? What was accomplished as a program very specially designed for Central Europe, is now being shifted in major part to the horrendous reconstruction problems in Bosnia?
Mr. ATWOOD. Yes, I think it is obvious why Bosnia is an important objective of the administration. We would like to see peace secured there and we want that peace secured not just because we have military forces present. We would like to see the people of Bosnia have a stake in this. And the only way that can happen is if they feel they can have a job, they have to trade with people of other ethnic groups and the like. We have begun to shift our SEED budget from north to south, because we feel that in Central Europe we have achieved sustainable transformation. Those countries have stabilized, there is more investment coming in, they are actively talking to the European Union about joining the European Union, and of course NATO.
We believe the countries in the South are more in trouble, Bulgaria and Albania, Bosnia and Romania. We are making progress in some of those countries, but we feel we need to shift the resources to the South where the problems are greater.
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Mr. HAMILTON. Thank you, Mr. Chairman.
Mr. SMITH. [Presiding.] Thank you, Mr. Chairman.
Mr. Kucinich.
Mr. KUCINICH. Thank you very much, Mr. Chairman.
Mr. Atwood, I guess Mr. Hastings called attention to that cabbage there, and thought it would be appropriate to use that as our next stage of discussion. I think the word in Russian for cabbage is ''kapuska,'' and it is actually a staple of the diet in Russia, along with bread.
In looking at the interaction policy paper of February 1977, and I quote: ''The primary goal of development assistance must be poverty reduction.'' Now, in looking at the nearly $4 billion that has been put into Russia since 1992, I am questioning how much of the kapuska gets to the people of Russia and how much is actually going to the contractors and consultants and accounting firms and lawyers who have constituted an array of groups that have descended upon Russia in the past 4 years.
And I ask that with the qualification that I do have a high degree of respect for President Clinton's policies which have attempted to continue salvation with Russia, and I appreciate that. But in reading the General Accounting Office's report on USAID activities in Russia, it is a little bit like reading episodes of the Keystone Cops. There are some things that are kind of hilarious and other things that are kind of scary and others that make you wonder if maybe there is a waste of resources.
So I ask for your accounting as to how all this money we put into Russia is benefiting the Russian people, particularly when we read things like a small group of Russian businessmen now have control of perhaps as much as 50 percent of the country's wealth.
You know, I am just wondering about this whole program we have set up and how it is really benefiting the Russian people as opposed to private interests and the old Communists who have now become capitalists with the help of a few fixed deals. So I would just like your response to that.
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Mr. ATWOOD. Thank you, Mr. Kucinich.
Knowing where you are from, I am not surprised that you know the Russian word for cabbage. But a lot has been written about our program in Russia over the years. The program was started in about 1992, I guess it was, and there was a real effort under that program to get a lot of money out fast, and where that happens, you are going to have a lot of problems. We fought very hard from USAID's perspective. This is big interagency program, not just USAID. We probably handled about 60 percent of it and fought very hard to get a strategic plan for what we were doing in Russia.
The problem we have in Russia is not the same as we have in other developing countries. We have an educated population; they just need to be educated to think about how to develop a market economy and the like. We had to put contractors in, in a sense. We didn't want to give a Russian organization the money because that would have gotten us more criticism than asking people to go over and provide technical assistance and advice to the Russians.
Choices were made, some of them before I came into this job, about hiring the Big 8, now Big 6, accounting firms to do work and create securities and exchange commissions and the like. I think in the end that kind of enterprise was needed.
We needed people who could gain access to the top Russian leaders who were leading the market effort. One of them was the chief advisor to Yeltsin. And all of the work we did through him achieved a great amount of success.
After companies were privatized, they needed advice as to how to restructure their firms to become competitive in a market economy, and so a lot of businesspeople, including some retired executives from the International Executive Service Corps, went over to help with that.
When you build a program, when you don't even have a mission on the ground, not everything we did, frankly, paid off. Not every partner we had in Russia was a good partner. But we managed, I think, to move away from bad programs quickly enough; so I can say today that the overall impact we have had has been a successful one. We have got a lot to do.
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The rule of law is not well established in Russia. The judicial system is not yet functioning properly. Customs, taxes, you can go through all of those items that businessmen think about before they invest in a foreign country.
All of that change needs to take place in Russia. We are trying to work on that in a variety of ways. I think if you would look at our program today versus the whole scope of the program that GAO analyzed, you would see a well-functioning type of program. I certainly invite you to go over and visit and see some of our projects.
Mr. KUCINICH. If I may, Mr. Chairman, I would say this is the first time I have had an opportunity to hear Mr. Atwood testify, and I am very impressed, because to hear you say that the rule of law is not a well-established institution in Russia, I am in the presence of a statesman, and I am really grateful to have the chance to hear you speak.
Thank you.
Mr. SMITH. Thank you, Mr. Kucinich.
Mr. Payne.
Mr. PAYNE. Thank you very much, Mr. Chairman.
Mr. Atwood, I understand that a number of the questions that I would have asked have already been asked about, the DFA concentration and what is going on with diminishing funds and the underfunding of what is happening in Africa.
I might just ask a couple of questions with regard to what are being talked about being pending. No. 1, how involved is USAID in the elections in Liberia, and whether you feel that it is ready for elections at this time? And second, the talk of elections in Zaire.
As you probably know, about a month ago I visited the Great Lakes region, and Mr. Campbell and I had the opportunity to meet with Mr. Mobutu, who expressed a lot of concern about what is happening in Zaire. And with Mr. Mobutu, we met with President Bizimungu and Vice President Kagame in Rwanda, President Museveni in Uganda, and talked to Mr. Buyoya of Burundi by phone, then talked to the liberation SPCA people in southern Sudan. And so there is a lot happening in that region.
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My question is, it was suggested that I should not meet with Mr. Kabila in eastern Zaire because--as you know, he is the rebel leader--but we did go into the rebel territory and did meet with Mr. Kabila because this is a serious movement he has going on with his alignment.
Although the State Department indicated we should not meet with them, I see now that Mr. Kabila has been invited by African leaders, and our U.S. State Department is there, so I think that it made a lot of sense to meet with him there. And I am glad the U.S. State Department officials decided to meet with him because he does have a strong movement going.
But my question is what planning, if any--have we talked about trying to coordinate with elections in Zaire, and whether this occurring government is legitimate enough? It definitely is an illegitimate government. But how could elections move forward with the trust of the population, I guess?
And finally, I mention Garang in southern Sudan; if we are looking at food distribution in the conflict territories, but that rebel leaders have taken over from al-Bashir, and if we have been able to get food into that region?
Mr. ATWOOD. Thank you, Mr. Payne. And let me say that as usual, your visit to Africa was very useful to the United States.
I have to say, Mr. Chairman, if I could, that one thing that disturbs me is that more Members of Congress aren't traveling. I believe that if these trips are undertaken in a serious way, they really can be helpful to our country.
Yes, we counseled Mr. Payne not to meet with Mr. Kabila, because we can't meet with Mr. Kabila, but the separation of powers has certain advantages. And it is an advantage to have Mr. Payne meet with Mr. Kabila. I probably shouldn't say that on the record, but it is useful to get that kind of information.
I am worried about the situation in Zaire. We have made a major initiative to try to get the parties together under the auspices of the South African Government. I was there last week with the Vice President, George Moose and Ms. Rice, and tried to get something started there. It doesn't sound good. We need a cease-fire. It seems to me that a cease-fire is an important aspect of holding an election in the country, if it is countrywide.
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Our feeling is that we need to have an electoral process that does produce a legitimate leader in Zaire. Just this morning I approved reprogramming some money so there would be funds available to support the election process in Zaire--something like $907,000--but I have asked that we look at this on a step-by-step basis, so that we can move away if necessary.
I don't want to see us wasting money on an election process that doesn't have any hope of producing the result we want. I think it is clear that that election process and our diplomacy need to work hand in glove, and I agree that a cease-fire is an essential ingredient.
With respect to Liberia, the same. We have been putting millions of dollars of humanitarian assistance into Liberia a year. It is a classic failed state. But failed states don't mean we walk away. We have millions of people starving, so we have been spending money on food assistance every year. So if we can get an election and stop the war there, then we should invest in that. We have money available for the process in Liberia, and would hope at this time the process would produce the result we want, which is peace.
You also have had discussions with people in Sudan, and I have acted on those discussions by asking our people to look very closely at the amount of risks that the women and children and others in that society have experienced. I will give you a private briefing on where we are on that, Mr. Payne. Right now it is obviously very difficult from the security point of view to get food into that country.
The situation is even more tenuous there in terms of the longevity of the Sudanese Government. There is an effort under way and you may see a change in the coming weeks. So we are looking at it from a humanitarian aspect and would like to hope that people aren't going to suffer more than they normally suffer in a civil war situation. We know as new territory is captured by the rebels and government forces are leaving, they are basically adopting a slash-and-burn approach and destroying everything in their wake, so that the rebels don't acquire anything of use to them. That puts people at risk, and we have got to respond if we can. So I will be happy to talk to you about that privately.
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Mr. PAYNE. Thank you, very much.
I just might mention that while we were there we did have the good fortune of being able to tie into a cell or some system to talk with John Garang on the battlefield 20 minutes after they had just bombed his area. But he told me personally that there was this slash-and-burn, and that people are really very fragile when the Sudanese military leaves. There is absolutely nothing there, and that the people are in bad shape anyway. And as they continue to move toward the hydroelectric area, once that area falls, then Khartoum is going to lack electricity and energy, and that is going to really shift things. And it is in the near future. So I hope that we are, in fact, as you indicated, planning for that possibility.
Chairman GILMAN. Mr. Hamilton.
Mr. HAMILTON. Thank you very much.
Two comments: First, I would like to support what was just brought up with regard to the ASHA's program. I understand you get a lot of pressure from a lot of members wanting you to support various institutions and that creates considerable problems for you.
I do want to say, however, that I think the concept of ASHA, which has institutions of education and medical institutions largely, in these countries, is a sound concept, and it has done a lot to advance American interests in these areas. I am impressed over and over again by the number of leaders from these areas that have attended our institutions of excellence and how important those leaders have become in the life of those countries.
The ASHA concept that the United States should support institutions of excellence in regions around the world is a very sound concept, in my judgment. The political pressures here often try to dilute that, and I am aware of that, so it creates problems for you, but I hope you don't throw out the whole program. I think it is a good concept.
Second, I want to just clarify my view with respect to this $10 million for the Palestinian Authority. I know that Chairman Gilman has had a hold on that. He has some legitimate interests in his hold that I think are worthy of pursuit, and I don't want my comments to be construed as critical of the chairman in any way here. But I do believe that this $10 million is a very important figure, psychologically, symbolically, much more than the $10 million. Because what it conveys to the Palestinians is the support of America or the lack of support of America for the peace process. And I think it also has a very profound impact on other donors to the Palestinians. So I just want to say, I think that $10 million is important.
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I think the Chairman is right in pointing out some problems that are connected with it. I hope those problems can be worked out, but I think the amount of money is much less important than the symbolic and psychological significance of American support for the Palestinian Authority at this point.
I believe my views here are totally consistent with the views of our negotiator here, Mr. Ross, and I would urge you to speak with him about that. You probably already have. I think he considers it likewise to be a very important part of our program.
I thank the Chairman for letting me make those comments. The Administrator need not respond to them at all.
Mr. SMITH. Thank you, Mr. Hamilton.
Moving to a second round, which we will try to make pretty brief, and I thank you for staying.
In looking at the budget, I notice that the Child Survival, this comes to a $30 million cut. And if you look at the fine print, it seems or suggests that some $25 million will be cut from Child Survival and $5 million in health in the final version.
And part of my argument has been when that one pool is cut, kids who need oral rehydration or vaccinations are less likely to get it if that money is in competition for family planning. And we know there are countries where ORT is desperately needed. You said in response to Mr. Hamilton's comments earlier, this is our first line of defense against diseases and the like, and DOD has concluded that the rash of diseases and the growing number of diseases represents a national security threat to the United States.
I would like to ask you, you know, why is the $25 million coming out of Child Survival when we want and need that money so desperately? These kids are dying every day from preventable diseases, and it seems to me we can be doing more, when you get down to prioritizing, to make sure they have the money.
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And there is also, of course, shifting that we have seen by what was formally done by the account to Child Survival program. And you can tell us, if you would, how much has been shifted to those kinds of accounts.
In 1995, money for a Population Council study in Guatemala all came from the population account. In 1996, $1 million came from Child Survival, $300,000 from the population account, all still being done by the Population Council. And again, this is that much less money that is available for vaccinations and the like.
Mr. ATWOOD. Well, Mr. Chairman, I can simply say to you that what we are seeking in our budget is overall balance in considering these issues. We care, obviously, deeply about children, but children aren't just helped by the Child Survival account. That is an extremely important account, wherein we primarily undertake immunization programs to make sure that children survive the childhood illnesses that they face in the developing world, and we have really succeeded beyond expectations in Child Survival. Infant mortality rates have gone down dramatically, which is one way of proving that foreign aid works.
But it is also true that family planning programs have contributed to child survival. To the extent that population growth rates are sustainable, that families can space their children; both mothers and children are healthier. And there is empirical evidence to demonstrate this.
I made a pitch earlier in my testimony for agricultural programs. We have cut those agricultural programs considerably. You can say we did it all for whatever reason we have to do it, but it doesn't help children to be in countries that are food insecure. So it seems to me both from the point of our agriculture security and the security of poor developing countries, that if we are going to deal with poverty and deal with children's problems, we must invest more in the agricultural segment.
It is difficult. I could, on one day, agree with you. We are trying to take the very best development professionals, trying to influence where the other people put their money, the Japanese, Europeans, et cetera, and try to come up with a balanced program that would enable us to be leaders in all these programs.
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Mr. SMITH. One doctor from Kenya, Dr. Ogala, testified and said she runs a rural clinic in Kenya, a black woman indigenous to Kenya, and said she has all the IUDs and condoms she could want, but she doesn't have penicillin. And it suggests to me that the balance is out of whack when we hear these kinds of stories. And I have heard them frequently, that is not the only time I have heard it. Again, the priority, when you are cutting into Child Survival funding to pay these other things, it seems to me that the population account should be funded to pay for that.
Let me ask one final question and then yield to Mr. Kucinich.
Can you describe briefly the type of contact and cooperation between USAID and employees and population organizations, including USAID recipients, in the days leading up to the vote on the population issue?
Mr. ATWOOD. I am not sure I know what you are alluding to. We certainly do understand all of the laws prohibiting lobbying, I can assure you, Mr. Chairman. We did provide a good deal of information to the Congress on these issues. All of it was requested by people on all sides of the issue.
A good many of the groups that receive our funding, no doubt, are operating as American citizens, using their own constitutional rights. If they did participate in the effort to influence the Congress, it was not instigated by us.
Mr. SMITH. Could you provide us an accounting for that, all those groups with whom USAID had contact with?
Mr. ATWOOD. I guess so. I will attempt, if you will, to answer that question. It is rather broad. Maybe we could talk and get more specifics as to what you want.
Mr. SMITH. I will be glad to further delineate that.
[This information was supplied following the hearing.]
I meet frequently with outside groups on a wide range of matters related to the Agency's development mission. On December 5, 1996, a number of USAID staff and I met with representatives of 20 private organizations involved in population-related activities. We expressed our concerns about the impact of the FY 1996 and FY 1997 restrictions on population funding and described how the Agency was coping with these. I pointed to the possibility of making available unallocated prior year funds, but indicated that this option was unlikely.
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During the meeting, representatives of several agencies that implement USAID population assistance described how their programs were being damaged by the restrictions. I committed myself to helping to make the case with Congress and the public concerning the issues at stake.
With regard to your request for a list of meetings and contacts at which the February vote was discussed, it is not feasible to provide a complete list. A dozen or so representatives of outside population and environmental groups were represented at a meeting at the invitation of USAID on November 1, 1996. The purpose of the meeting was for USAID to brief the groups on the implications for USAID programs of the FY 1997 population funding restrictions and the February vote. Participants at the meeting, which was prior to the election, did not strategize concerning how best to win the February vote.
In addition, literally thousands of contacts took place between USAID officials from both Washington and overseas missions and USAID contractors and grantees in which the February vote was a topic of discussion although not the primary purpose of the communication. Given the major operational importance of the vote for the programs of USAID contractors and grantees, and the need to make contingency plans, it is to be expected that the vote would be a constant source of discussion. The situation was no different than what occurs when any government agency faces a continuing resolution or a gap in appropriations. None of these contacts can be characterized as ''strategizing how best to win the upcoming February vote.''
During the months leading up to the February vote, USAID officials also participated in various meetings called by the White House and by congressional staff that also involved other agencies. The White House provided overall coordination for the efforts of USAID, the State Department, OMB, and other parts of the government to communicate the justification for the President's finding to Congress, the media, and all other concerned groups on both sides of the issue.
Mr. SMITH. Mr. Kucinich.
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Mr. KUCINICH. That is all right.
Mr. SMITH. Mr. Payne.
Mr. PAYNE. Just one or two more.
If elections in Liberia are held and if a civil government returns to Liberia, I would suggest that there be some special attention given to the toy soldiers that have been called, these young children anywhere from 15, 16, down to 8 or 9 or 10, 11 years old, who have weapons and who are given alcohol and drugs and actually have fought and killed people and so forth. There is going to be a tremendous psychological--it is going to take some time, you just can't reintegrate these children into a local school system. And I would hope that USAID and some of the other donors might give special consideration to that rehabilitation situation.
Second, and you can respond to that if you like.
[At time of printing, information had not been submitted.]
Mr. PAYNE. The other quick question is that in regard to the trade and investment legislation that Representatives McDermott, Crane, and Randall introduced, I think it is great and everyone feels that this whole question of investment is necessary, and if Africa is going to move forward, it has to be trained in investment and so forth. I still feel there does need to be the creation of two equity funds of a couple hundred million dollars, and it may not necessarily come from DFA. Now, if several hundred million dollars is to come from DFA, which is already underfunded, I think it is a move in the wrong direction.
I don't know how we could move along, at any rate, of attempting to do a little in a continent if, in fact, several hundred million dollars are going to come out of DFA, that just assists a few of the poorest among us, to be put into some trade and investment portfolio. And I would like to know that that could move along without a separate track and not taking from an already underfunded account. Could you respond to that?
Mr. ATWOOD. Yes, Mr. Payne. As the administration examined the McDermott bill and as we entered into discussions with him and you and others who are interested in this, we have seen some major changes in the approach. We understand that the bill no longer proposes offsetting the costs of one-time appropriations from the USAID's budget.
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As people have looked more closely at these countries and how we can help them with the trade initiative, there is a recognition that economic reform in those countries is crucial, and that we have to provide that kind of assistance through our USAID programs before anyone will make use of an equity fund.
A lot of elites in these African countries don't even invest their own money in their country because the banking system, the institutions for economic interaction, are not adequate, and they put the money elsewhere. So we can't expect that those equity funds are going to compensate for aid until we have done our job.
My line, a line that a lot of the African leaders want to use, is trade, not aid. That is where they want to be, that is where we want to be. But the reality on the ground today is aid, then trade, and we have got to do that aid especially through USAID directly, to help develop a market economy that would encourage trade and investment.
Mr. SMITH. Thank you, Mr. Payne.
Mr. Atwood, thank you for your testimony.
Without objection, all members will have 5 days to post further questions.
Mr. SMITH. The hearing is adjourned.
[Whereupon, at 12:03 p.m., the committee was adjourned.]