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HRG. 107–283 FOREIGN OPERATIONS, EXPORT FINANCING, AND RELATED PROGRAMS APPROPRIATIONS FOR FISCAL YEAR 2002 HEARINGS BEFORE A SUBCOMMITTEE OF THE COMMITTEE ON APPROPRIATIONS UNITED STATES SENATE ONE HUNDRED SEVENTH CONGRESS FIRST SESSION ON H.R. 2506 AN ACT MAKING APPROPRIATIONS FOR FOREIGN OPERATIONS, EXPORT FINANCING, AND RELATED PROGRAMS FOR THE FISCAL YEAR END- ING SEPTEMBER 30, 2002, AND FOR OTHER PURPOSES Agency for International Development Department of State Nondepartmental Witnesses Printed for the use of the Committee on Appropriations ( Available via the World Wide Web: http://www.access.gpo.gov/congress/senate U.S. GOVERNMENT PRINTING OFFICE 70–754 PDF WASHINGTON : 2002 For sale by the Superintendent of Documents, U.S. Government Printing Office Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800 Fax: (202) 512–2250 Mail: Stop SSOP, Washington, DC 20402–0001 COMMITTEE ON APPROPRIATIONS 1 TED STEVENS, Alaska, Chairman THAD COCHRAN, Mississippi ROBERT C. BYRD, West Virginia ARLEN SPECTER, Pennsylvania DANIEL K. INOUYE, Hawaii PETE V. DOMENICI, New Mexico ERNEST F. HOLLINGS, South Carolina CHRISTOPHER S. BOND, Missouri PATRICK J. LEAHY, Vermont MITCH MCCONNELL, Kentucky TOM HARKIN, Iowa CONRAD BURNS, Montana BARBARA A. MIKULSKI, Maryland RICHARD C. SHELBY, Alabama HARRY REID, Nevada JUDD GREGG, New Hampshire HERB KOHL, Wisconsin ROBERT F. BENNETT, Utah PATTY MURRAY, Washington BEN NIGHTHORSE CAMPBELL, Colorado BYRON L. DORGAN, North Dakota LARRY CRAIG, Idaho DIANNE FEINSTEIN, California KAY BAILEY HUTCHISON, Texas RICHARD J. DURBIN, Illinois MIKE DEWINE, Ohio TIM JOHNSON, South Dakota MARY L. LANDRIEU, Louisiana STEVEN J. CORTESE, Staff Director LISA SUTHERLAND, Deputy Staff Director TERRY SAUVAIN, Minority Staff Director SUBCOMMITTEE ON FOREIGN OPERATIONS, EXPORT FINANCING, AND RELATED PROGRAMS MITCH McCONNELL, Kentucky, Chairman ARLEN SPECTER, Pennsylvania PATRICK J. LEAHY, Vermont JUDD GREGG, New Hampshire DANIEL K. INOUYE, Hawaii RICHARD C. SHELBY, Alabama TOM HARKIN, Iowa ROBERT F. BENNETT, Utah BARBARA A. MIKULSKI, Maryland BEN NIGHTHORSE CAMPBELL, Colorado RICHARD J. DURBIN, Illinois CHRISTOPHER S. BOND, Missouri TIM JOHNSON, South Dakota TED STEVENS, Alaska MARY L. LANDRIEU, Louisiana (Ex officio) ROBERT C. BYRD, West Virginia (Ex officio) Professional Staff PAUL GROVE JENNIFER CHARTRAND TIM RIESER (Minority) MARK LIPPERT (Minority) Administrative Support CANDICE ROGERS ANGELA LEE (Minority) 1 Committee and subcommittee memberships—January 25, 2001 to June 6, 2001. NOTE.—From January 3 to January 20, 2001 the Democrats held the majority, thanks to the deciding vote of outgoing Democratic Vice President Al Gore. Senator Thomas A. Daschle be- came majority leader at that time. Starting January 20, 2001, the incoming Republican Vice President Richard Cheney held the deciding vote, giving the majority to the Republicans. Sen- ator Trent Lott resumed his position as majority leader. On May 24, 2001, Senator James Jef- fords of Vermont announced his switch from Republican to Independent status, effective June 6, 2001. Jeffords announced that he would caucus with the Democrats, changing control of the evenly divided Senate from the Republicans to the Democrats. Senator Thomas A. Daschle be- came majority leader once again on June 6, 2001. (II) COMMITTEE ON APPROPRIATIONS 2 ROBERT C. BYRD, West Virginia, Chairman DANIEL K. INOUYE, Hawaii TED STEVENS, Alaska ERNEST F. HOLLINGS, South Carolina THAD COCHRAN, Mississippi PATRICK J. LEAHY, Vermont ARLEN SPECTER, Pennsylvania TOM HARKIN, Iowa PETE V. DOMENICI, New Mexico BARBARA A. MIKULSKI, Maryland CHRISTOPHER S. BOND, Missouri HARRY REID, Nevada MITCH MCCONNELL, Kentucky HERB KOHL, Wisconsin CONRAD BURNS, Montana PATTY MURRAY, Washington RICHARD C. SHELBY, Alabama BYRON L. DORGAN, North Dakota JUDD GREGG, New Hampshire DIANNE FEINSTEIN, California ROBERT F. BENNETT, Utah RICHARD J. DURBIN, Illinois BEN NIGHTHORSE CAMPBELL, Colorado TIM JOHNSON, South Dakota LARRY CRAIG, Idaho MARY L. LANDRIEU, Louisiana KAY BAILEY HUTCHISON, Texas JACK REED, Rhode Island MIKE DEWINE, Ohio TERRY SAUVAIN, Staff Director CHARLES KIEFFER, Deputy Staff Director STEVEN J. CORTESE, Minority Staff Director SUBCOMMITTEE ON FOREIGN OPERATIONS, EXPORT FINANCING, AND RELATED PROGRAMS SUBCOMMITTEE ON FOREIGN OPERATIONS, EXPORT FINANCING, AND RELATED PROGRAMS PATRICK J. LEAHY, Vermont, Chairman DANIEL K. INOUYE, Hawaii MITCH McCONNELL, Kentucky TOM HARKIN, Iowa ARLEN SPECTER, Pennsylvania BARBARA A. MIKULSKI, Maryland JUDD GREGG, New Hampshire RICHARD J. DURBIN, Illinois RICHARD C. SHELBY, Alabama TIM JOHNSON, South Dakota ROBERT F. BENNETT, Utah MARY L. LANDRIEU, Louisiana BEN NIGHTHORSE CAMPBELL, Colorado JACK REED, Rhode Island CHRISTOPHER S. BOND, Missouri ROBERT C. BYRD, West Virginia TED STEVENS, Alaska (Ex officio) (Ex officio) Professional Staff TIM RIESER MARK LIPPERT PAUL GROVE (Minority) JENNIFER CHARTRAND (Minority) Administrative Support CANDICE ROGERS (Minority) 1 Committee and subcommittee memberships—July 10, 2001. NOTE.—From January 3 to January 20, 2001 the Democrats held the majority, thanks to the deciding vote of outgoing Democratic Vice President Al Gore. Senator Thomas A. Daschle be- came majority leader at that time. Starting January 20, 2001, the incoming Republican Vice President Richard Cheney held the deciding vote, giving the majority to the Republicans. Sen- ator Trent Lott resumed his position as majority leader. On May 24, 2001, Senator James Jef- fords of Vermont announced his switch from Republican to Independent status, effective June 6, 2001. Jeffords announced that he would caucus with the Democrats, changing control of the evenly divided Senate from the Republicans to the Democrats. Senator Thomas A. Daschle be- came majority leader once again on June 6, 2001. (III) CONTENTS TUESDAY, MAY 8, 2001 Page Agency for International Development .................................................................. 1 TUESDAY, MAY 15, 2001 Department of State: Office of the Secretary ........................................................ 47 WEDNESDAY JULY 11, 2001 Department of State ................................................................................................ 117 Agency for International Development .................................................................. 130 Nondepartmental witness ....................................................................................... 157 Nondepartmental witnesses .................................................................................... 167 (V) FOREIGN OPERATIONS, EXPORT FINANCING, AND RELATED PROGRAMS APPROPRIA- TIONS FOR FISCAL YEAR 2002 TUESDAY, MAY 8, 2001 U.S. SENATE, SUBCOMMITTEE OF THE COMMITTEE ON APPROPRIATIONS, Washington, DC. The subcommittee met at 10:04 a.m., in room SD–192, Dirksen Senate Office Building, Hon. Mitch McConnell (chairman) pre- siding. Present: Senators McConnell, Leahy, and Bennett. AGENCY FOR INTERNATIONAL DEVELOPMENT STATEMENT OF ANDREW NATSIOS, ADMINISTRATOR OPENING STATEMENT OF SENATOR MITCH MC CONNELL Senator MCCONNELL. Mr. Natsios, let me apologize in advance for what I expect is going to be the most disjointed hearing you have ever participated in, because the Senate at 10:15, is going to go into a series of three votes. We are going to try to tag team this in a way that does not take up your whole day. It is a pleasure to welcome you to the Foreign Operations Sub- committee. Your background makes you uniquely qualified to take charge of the U.S. Agency for International Development, and I have no doubt that your time on the ‘‘Big Dig’’ in Boston will serve you well in your many tasks ahead. In the past, I have been extremely critical of the Agency for lack- ing a strategic vision, failing to establish concrete goals, and failing to deliver assistance in a timely and effective manner. I have re- peatedly and publicly taken issue with poor management and inef- fective leadership in Washington and the field. Although recently confirmed, you seem to have wasted no time in trying to address these shortfalls. You are off to a good start. Identifying management and per- sonnel reform as your first priority gives me hope that real change at USAID is in the offing. I note that the fiscal 2002 budget re- quest for your Agency’s operating expenses has increased $30 mil- lion over last year’s request and I look forward to hearing more about how you envision those funds being spent. Your testimony that foreign assistance programs should serve U.S. policy objectives is on the mark. As I have often said, U.S. for- eign assistance is not an entitlement and our aid must support U.S. economic, political and security goals. The strategic reorienta- (1) 2 tion of USAID to address the trends of globalization and conflict give definable purpose to the Agency. While time will allow more informed judgment on the effectiveness of the four program pillars you have proposed, the changes you are initiating at USAID are welcomed. I want to comment briefly on the four pillars. As I understand the Global Development Alliance, the GDA pillar, USAID will seek partnerships with corporations, NGOs, and the academic commu- nity, and ask that they contribute funding, personnel and informa- tion to support development programs. I am concerned that unless the Agency addresses its management shortfalls, the GDA will be short lived. The strength of corporations, NGOs and academic insti- tutions is that they often initiate and respond to program needs faster and
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