[Senate Hearing 106-645]
[From the U.S. Government Publishing Office]
S. Hrg. 106-645
AN OVERVIEW OF USAID PROGRAMS AND PRIORITIES ON EAST ASIA
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HEARING
BEFORE THE
SUBCOMMITTEE ON EAST ASIAN AND PACIFIC AFFAIRS
OF THE
COMMITTEE ON FOREIGN RELATIONS
UNITED STATES SENATE
ONE HUNDRED SIXTH CONGRESS
SECOND SESSION
__________
APRIL 25, 2000
__________
Printed for the use of the Committee on Foreign Relations
Available via the World Wide Web: http://www.access.gpo.gov/congress/
senate
U.S. GOVERNMENT PRINTING OFFICE
66-577 CC WASHINGTON : 2000
COMMITTEE ON FOREIGN RELATIONS
JESSE HELMS, North Carolina, Chairman
RICHARD G. LUGAR, Indiana JOSEPH R. BIDEN, Jr., Delaware
CHUCK HAGEL, Nebraska PAUL S. SARBANES, Maryland
GORDON H. SMITH, Oregon CHRISTOPHER J. DODD, Connecticut
ROD GRAMS, Minnesota JOHN F. KERRY, Massachusetts
SAM BROWNBACK, Kansas RUSSELL D. FEINGOLD, Wisconsin
CRAIG THOMAS, Wyoming PAUL D. WELLSTONE, Minnesota
JOHN ASHCROFT, Missouri BARBARA BOXER, California
BILL FRIST, Tennessee ROBERT G. TORRICELLI, New Jersey
LINCOLN D. CHAFEE, Rhode Island
Stephen E. Biegun, Staff Director
Edwin K. Hall, Minority Staff Director
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SUBCOMMITTEE ON EAST ASIAN AND PACIFIC AFFAIRS
CRAIG THOMAS, Wyoming, Chairman
JESSE HELMS, North Carolina JOHN F. KERRY, Massachusetts
CHUCK HAGEL, Nebraska RUSSELL D. FEINGOLD, Wisconsin
GORDON H. SMITH, Oregon PAUL D. WELLSTONE, Minnesota
LINCOLN D. CHAFEE, Rhode Island ROBERT G. TORRICELLI, New Jersey
(ii)
C O N T E N T S
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Page
Randolph, Hon. Robert C., Assistant Administrator, Bureau for
Asia and the Near East, U.S. Agency for International
Development, Washington, DC.................................... 2
Prepared statement........................................... 6
Thomas, Hon. Craig, U.S. Senator from Wyoming, prepared statement 2
(iii)
AN OVERVIEW OF USAID PROGRAMS AND PRIORITIES ON EAST ASIA
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TUESDAY, APRIL 25, 2000
U.S. Senate,
Subcommittee on East Asian and Pacific Affairs,
Committee on Foreign Relations,
Washington, DC.
The subcommittee met, pursuant to notice, at 2:30 p.m. in
room SD-419, Dirksen Senate Office Building, Hon. Craig Thomas
(chairman of the subcommittee) presiding.
Present: Senators Thomas and Feingold.
Senator Thomas. I call the hearing to order. Thank you very
much, Mr. Randolph, for being here. Sorry we are a little late.
We were voting. It is kind of a surprise for us to have to do
that, you know.
In any event, this is the Subcommittee on East Asian and
Pacific Affairs. We wanted to meet together today to have an
overview hearing on the U.S. Agency for International
Development, its programs and priorities, particularly for East
Asia, in the coming year.
As far as I can discover, this is probably the first time
this subcommittee has had a hearing on USAID, at least over the
last 5 years, which is a little unusual, I suppose, because
after all in the totality of foreign relations USAID plays, of
course, a vital and sometimes controversial role, so I am very
pleased, and I hope that you can help talk a little bit about
the basic mission of USAID, as to what it is designed to do;
talk a little bit perhaps about the relationship in terms of
this program and its activities relative to the totality of
foreign policy; maybe a bit about when we have trade sanctions
or restrictions with a country; whether or not you go ahead and
participate in this Agency. I would be interested in knowing
about the total dollars spent annually, perhaps some comment
about the increase over the last few years.
I suppose it is difficult to talk about the progress or the
changes that have been brought about as a result of these
activities, and I think one of the questions that we often ask
ourselves and those of us out in the country when we go home
is: how do you measure, and what constitutes the completion of
your activity? Does it go on forever? Is there some sort of a
measurement in terms of having completed? So I know those are
broad topics, but I know those are the topics that people
wonder about, people should have an opportunity to hear about,
and I think it is our responsibility in the Congress to have
some oversight in terms of those kinds of things.
So in any event, thank you very much for being here, sir,
and if you would care to go ahead, then perhaps we can have
some questions and some dialog afterwards.
[The prepared statement of Senator Thomas follows:]
Prepared Statement of Senator Craig Thomas
Today, the Subcommittee on East Asian and Pacific Affairs meets to
conduct an overview hearing of U.S. Agency for International
Development programs and priorities in East Asia for the coming year.
I'll keep my comments brief so that we can get to our witness this
afternoon.
This is, as far as I can discover, the first Foreign Relations
Committee regional area subcommittee hearing USAID in the past 5 years.
That fact strikes me as somewhat unusual. After all, USAID plays a
vital, if sometimes controversial, role in the projection of U.S.
foreign policy objectives abroad; it is, in effect, the financial aid
arm of the State Department. As such, it is the face of the United
States seen most often by foreign individuals in recipient countries;
and it is the arm of Government most often singled out when American
citizens complain about spending too much of the taxpayers' money on
aid to foreign countries.
Yet I believe that USAID's role, its mission, is not well
understood by many Americans, including many Members of Congress. I
have to admit that I, personally, am not overly familiar with how USAID
operates in General and in East Asia specifically. It is my intent that
hearings such as this one begin to remedy that.
While I believe that USAID programs abroad can and do play an
important role in forwarding our policy interests abroad, I also
believe that we in Congress need to focus a critical eye on the
Agency--as we should with any government agency--to ensure that the
funds it requests are funds it actually needs, and that once
appropriated those funds are spent or utilized in the most cost-
effective way.
With that, I would like to welcome to the committee Mr. Robert
Randolph, Assistant Administrator of the Bureau for Asia and the Near
East, U.S. Agency for International Development.
STATEMENT OF HON. ROBERT C. RANDOLPH, ASSISTANT ADMINISTRATOR
FOR ASIA AND THE NEAR EAST, U.S. AGENCY FOR INTERNATIONAL
DEVELOPMENT, WASHINGTON, DC
Mr. Randolph. Thank you very much, Mr. Chairman. I would
like to begin by thanking you and your staff and the other
members of the committee who are able to make this hearing for
the opportunity to testify before you today. I first met you
about a year and a half ago, a little bit more than that, when
I was coming around to meet Senators in preparation for my
confirmation hearing, and I remember then that you really--you
told me two things.
You told me first you had never seen anybody from USAID
before, and I feel very remiss that I waited a year and a half
before seeing you again, so I hope to have some tolerance from
you on that score. And second you reminded me that USAID
follows the foreign policy directives of the Congress and the
State Department, and you wanted to ensure that we were working
very closely with the State Department.
I worked with the Assistant Secretaries, the Near East
Bureau, NEA, South Asia, Rick Inderfurth and East Asia Pacific,
Stanley Roth, and I feel, and I hope that they would agree with
me, that I have a very good working relationship with them,
particularly Assistant Secretary Roth, who I will be going to
see tomorrow afternoon to talk about issues relating to
Indonesia and Vietnam, so I do feel that at the very least we
have followed your lead in ensuring that we are working closely
and adhering to the foreign policy directives of the State
Department.
I want to talk about our goals as a Bureau, the Bureau for
Asia and Near East, and your part of the world, Asia Pacific,
and those goals are threefold: first, to create prosperity both
for the peoples of the region and for Americans, Americans who
export and do business in the region, second to create security
for America. We have a number of states, and I can mention
China as one, who do not have democratic systems, who sometimes
seem to be out of step with our notion of what constitute
democratic norms, and we think that it is very, very important.
We have worked with countries in the region, around China's
periphery, to ensure that we are promoting transition to stable
democracies, because we believe that stable democracies and
countries in East Asia, such as Korea and Taiwan, countries
that have graduated to the status of stable democracies are
important for American security.
Third, we are very concerned about disease in this era of
globalization. Disease has no boundaries. Disease is
transnational. Disease and infections, which have their start
in other countries, such as HIV/AIDS, can very quickly migrate
to the United States, so this health security is important both
for the countries of your region and for the people of the
United States.
You asked me about our budget and the amount of money we
spend in countries where we are doing business, or where we are
working. On the first page of the testimony which I submitted,
I set forth a sheet \1\--usually this is an attachment, but we
thought that it would be important for you to be able to see
exactly how much money we are spending in East Asia Pacific.
This year it is $247 million. I think that is about 10 percent
more than we spent in 1999. I am very pleased with that,
actually, because one of my goals upon becoming Assistant
Administrator of this Bureau was to increase the amount of
attention and spending available to USAID to combat problems in
Asia.
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\1\ See table entitled ``Program Resources for East Asia,'' on page
11.
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Next year we have requested more than $300 million for the
region, primarily to fund the amount of work we are doing in
Indonesia, and we can talk about that later.
I want to turn next to the first goal, which is increasing
prosperity. As you know, in 1997 Asia was reeling from the
effects of the Asia financial crisis, and this had a tremendous
reverberating effect on this country. Fully 30 percent of our
exports go to Asia. That is more exporting than we do to
Europe, and for an agricultural state--and I am from Washington
State, and I know you are from Wyoming--40 percent of our
agricultural exports go to Asia, so Asia is very important to
the United States economically, and the financial health of
Asia is very important to us all.
After the financial crisis we have reprogrammed our
bilateral programs, particularly in Indonesia and the
Philippines, and we created an initiative called Accelerated
Economic Recovery in Asia [AERA] to work with Asian countries
to get their financial houses in order, and I am glad to see
that Asia is recovering, but my message here today is that we
need to stay involved. We need to stay the course in Asia.
In Thailand, as you know, the Asian financial crisis
started with the failure of a bank in Thailand. Our AERA
initiative in Thailand focuses on assisting Thai banks and
banking associations raise their management capabilities to
international standards.
In Indonesia, where fully 70 percent of the economy is
nonperforming, basically Indonesia is in bankruptcy, and
billions of dollars are now held by the Indonesian Bank
Restructuring Agency [IBRA], which is the equivalent of our
Resolution Trust Corporation. We are assisting this entity,
called IBRA, to sell off its assets, and it has got to sell off
the assets to get the economy started again, and I am happy to
say that with the assistance of our USAID mission and the able
prodding of our Ambassador, Bob Gelbard, IBRA has now sold the
largest State-owned asset, the Astra Company, to a single
holding company, and we are seeing progress in Indonesia.
In the Philippines, I am glad to state that the Philippines
was just able to weather the Asian financial storm because of
the work we had done there previously on economic reform, and
we have concentrated on continued anticorruption and economic
reform efforts.
This year, we would like to add Vietnam to our reform
program. With 80 million people, Vietnam is a potentially high
value growth market for U.S. exports and it is a country that,
once it sheds its totalitarian Communist system, will play a
major role in the East Asia Pacific. Our goal is to identify
reforms, particularly reforms relating to trade and financial
sector management, which will help Vietnam make the transition
to a free market economy, ultimately producing goods, and a
free society.
Let me go to the next goal of USAID programs, which is
promoting democracy and freedom in East Asia. I think we have
now realized that you cannot have economic freedom, you cannot
have a free market, you cannot have an economy and a culture
and a government that works without a governmental culture of
openness, transparency, and accountability, and our programs in
Asia on the democracy side are focused on promoting civil
society, accountability, transparency, and open government.
I want to talk very briefly about Indonesia, Cambodia, and
Mongolia. Of these countries, Indonesia is by far the most
important to the United States and to the security of the
United States. It commands the major sea lanes between Europe
and Asia, including the energy lifeline of Japan and Korea. It
is a major supplier of Asia's natural resources, and an
important emerging market for the United States.
It is the world's fourth most populous country, the world's
largest Muslim country and, after the recent elections it has
become the world's third largest democracy. It is a key goal of
United States foreign policy to ensure that Indonesia continue
on a stable democratic course. The challenges are immense. The
new President, President Wahid, governs a nation which
stretches across 1,750 islands over a distance that covers the
distance from Wyoming to the Bahamas. He has to deal with 350
ethnic groups.
He has inherited a country that was left in economic and
political tatters by the Suharto regime. He has immense
problems, even though he has got reformers in his cabinet,
these reformers sit on top of a bureaucracy who are really
products of the old regime, and are very much resistant to
reform, and are waiting for the day when the reformers give up
and leave.
We think that it is very, very important that the United
States stay the course in this important country, that we do
everything that we can to support Indonesia's transition to
democracy, that we in particular work on building up capability
in the instruments of democratic Government, the parliaments,
both national and local, the judiciary, and civil society.
I think it is going to be a close-run thing. We may not
succeed in building democracy in Indonesia, but if we do not
make the effort, Indonesia will surely fail, and if Indonesia
fails, it will have dramatic consequences for U.S. national
security and for the security of the region.
Let me move next to East Timor, where our goal is to
promote a peaceful, stable government, both because it is
important for humanitarian reasons and because it is important
in the larger context of a stable Indonesia. I visited East
Timor in February. I was shocked to find scores, hundreds of
Timorese milling around the street corners with no work.
They were getting very upset by the image that they had of
people from the international community driving around in Range
Rovers, commandeering the only available housing stock on the
island, eating in good restaurants, in turn driving up the
price of food and creating inflation, because the restaurants
were competing with the locals for the only available food
stocks.
The international community--and I do not put USAID in this
group--had begun paying locals hired as local staff five times
the prevailing wage rate during Indonesian times, so it was a
tremendously disruptive situation. People had high
expectations, and those expectations were unfulfilled.
Immediately after my visit I came back and I met with our
Office of Transition Initiatives [OTI]. We have initiated a
quick-starting employment program, the goal of which is to put
East Timorese to work rebuilding their shattered communities,
cleaning up the damage, rebuilding the housing stock, doing
basic infrastructure projects such as roads, ditches, and
sewers.
First, we have allocated $10 million to OTI, the bulk of
which will go into these quick employment projects.
Second, we have had a coffee-growing project in East Timor
for years. This has been really the major generator of
employment in East Timor, the only generator of foreign
currency. We are increasing the amount of money we put into
this coffee project from $3 million to $8 million, which over
the next 4 years will increase the number of families employed
in the coffee industry from 17,000 to 40,000, so we fully
expect that the coffee industry in 5 years will support 160,000
East Timorese, about 25 percent of the population of East
Timor.
Cambodia is one of the poorest countries in the world. It
has certainly disappointed us in terms of its peaceful
transition to democracy. We primarily work there with NGO's to
promote democracy, expose human rights abuses, and promote
humanitarian activities. Human rights violations are now being
reported and investigated. We think that we have begun creating
a nascent civil society which will ultimately provide a
foundation for democracy in Cambodia once the government
becomes a bit more flexible in its views. We will look for
signs of reform, and we hope to do more in Cambodia when we see
more reform.
The major issue that we have there is HIV/AIDS. Cambodia
has the highest rate of HIV positive population in Asia, and
the rate of growth is the highest in the world--it is about 70
percent. We are working hand-in-glove with health authorities,
NGO's, to contain the AIDS epidemic.
Finally, I would like to just talk very briefly about our
third major goal, which is containing transnational diseases.
Globalization means jobs, it means migration of peoples and
capital, but the dark side of globalization is the migration of
diseases.
We have 5 million people who travel between Asia and the
U.S. every year. There is a lot of travel back and forth, and
we are very concerned about three epidemics in Southeast Asia.
The first is HIV/AIDS, which I mentioned. The second is TB. Of
the 8 million TB sufferers in the world, 3 million are in
Southeast Asia. And finally we are concerned about the
emergence of a drug-resistant strain of malaria on the Thai-
Burma border.
These transnational diseases know no boundaries. They
require a regional solution, and we are accomplishing our goals
to combat these diseases in Southeast Asia in the Mekong region
with regional programs.
I have given you an overview, Senator Thomas and Senator
Feingold. It is my pleasure to be here. I look forward to
having a conversation with you and hearing your views of what
we should be doing at USAID.
Thank you very much.
[The prepared statement of Mr. Randolph follows:]
Prepared Statement of Hon. Robert C. Randolph
Mr. Chairman, I would like to begin by thanking the Committee for
inviting me to discuss our programs in the East Asia region. I would
like to emphasize that all of us at USAID look forward to working
closely with you and the entire Committee.
The challenges we face today in East Asia are daunting and hit the
very core of key U.S. national and foreign policy interests. One is
prosperity for both the American and East Asian peoples. The region is
the largest developing market in the world for U.S. goods and services.
Thirty percent of total U.S. exports go to East Asia--more than the
value of our exports to Europe. Forty percent of these are
agricultural, representing our largest overseas market. Together they
support millions of U.S. jobs. Second and intimately linked to
prosperity, is security, which depends in no small measure on East
Asian economic health and political stability. A prosperous, healthy
population able to participate in democratic processes reduces the risk
of regional conflict, refugee flows, and the spread of infectious
diseases that even now threaten the United States.
My focus today is to show how USAID--by helping East Asia to grow
economically, building democratic institutions, and to address social
problems--is promoting these critical U.S. national and foreign policy
interests.
Less than three years ago, East Asia was overwhelmed by the
financial crisis that started in Thailand. While the immediate effects
were devastating, the crisis created opportunities for true economic
and democratic reforms, underlining that sound and sustainable growth
cannot occur without good governance and the rule of law. The outlook
for the region is now cautiously optimistic, with many countries
experiencing economic recovery and democratic transitions. But positive
growth and low inflation in Thailand and Korea cannot overshadow the
fact that unemployment is still higher than before the crisis, with
many people earning far less and subject to precarious living
standards. The United States and East Asia must ensure that the reform
process proceeds to fruition--with an economic infrastructure that
promotes growth and good governance, where investment can flourish in
an environment of openness, transparency, and accountability.
This is no time for complacency. To achieve lasting and broad-based
economic growth, these countries need to press forward with reforms.
This is particularly critical in Indonesia, where economic recovery is
inextricably linked to democratic reform; and in East Timor, where
devastation, upheaval, violence, poverty and independence are
coalescing simultaneously. At the same time, burgeoning public health
threats, such as the spread of HIV/AIDS and other infectious diseases,
underscore the need for strong, stable governments that can control
diseases at the source and provide adequate healthcare to their
citizens. We all have a stake in the success of these transitions;
their success is critical to our own security.
In analyzing East Asia's challenges and opportunities, we will
focus on three main priorities: promoting economic reform and growth,
supporting and stabilizing democracies, and addressing public health
and social safety net challenges.
promoting economic reform and growth
Nearly three years after the onset of the financial crisis,
countries in East Asia are experiencing macroeconomic stability (in
terms of stable exchange rates and relatively low inflation), economic
growth, and increased trade. These are all good signs, but the job is
not done. Amidst this budding recovery, it is all too easy to forget
the havoc wrought by the financial crisis, which drove millions of
people out of work, put them and countless others in poverty, and
increased pressures on an already fragile natural resource base. We
must continue helping these countries push forward with reforms that in
the end will provide the real underpinnings for sustainable growth. We
must avoid declaring victory today, mistaking the immediate and
relatively easy reforms for the more difficult and critical ones that
still remain. Staying the course, and finishing the race, is what we
must do if we are to avoid future financial crises.
USAID has responded to the economic and social challenges of the
financial crisis by reshaping its bilateral programs in Indonesia and
the Philippines and launching a regional initiative, ``Accelerated
Economic Recovery in Asia (AERA),'' to address the cross-border effects
of the crisis. Working closely with other donors, USAID is helping
countries in the region undertake difficult reforms, especially those
that target the financial and business sectors, the banking and
procurement systems, and small and medium enterprises.
In Thailand, for example, where a bank failure triggered the
crisis, we are providing training and technical assistance to Thai-
owned banks and banking associations to raise their management
capabilities to international standards. In Indonesia, USAID is
coordinating with the U.S. Treasury, the IMF, the World Bank, and the
Asian Development Bank to help the Indonesian Bank Restructuring Agency
(IBRA) restructure Indonesia's banking system. The significance of this
operation is enormous, given that IBRA holds some seventy percent of
Indonesia's corporate assets. While the going is still rough, the
political will to revive bank lending and reinvigorate Indonesia's
corporate sector is increasing. USAID is giving similar assistance in
banking and financial sector reform to the Philippines which, while it
withstood the crisis better than many of its neighbors (due to USAID-
assisted reform efforts), still needs to focus on anti-corruption
programs and the government's procurement systems. All of these
efforts, done in partnership with other donors, governments and the
private sector, are designed to promote new standards of corporate and
public behavior--standards which will hopefully create an environment
where trade, investment, and growth will flourish under a rule of law.
This year we will add Vietnam to our reform efforts, building on
our previous efforts in facilitating Vietnam's understanding of the
commitments and undertakings that would be required when it signs the
Bilateral Trade Agreement (BTA). Vietnam, with 80 million people, is a
potential growth market for U.S. exports and a country that can play a
major role in the East Asian economy. Our goal is to identify reforms,
particularly in the financial sector, that could accelerate greater
openness in government institutions and procedures--critical building
blocks for Vietnam's proposed entry into the WTO and the global
economy.
In East Asia, USAID has helped build the foundation not only for
long-term and widespread economic growth, but for growth that is
environmentally sustainable as well. In Indonesia and the Philippines,
for example, our focus on partnering local authorities with local
communities has lead to community-based management of natural resources
that are far more efficient and sustainable than traditional ``top-
down'' public management approaches, or corrupt ``concessionary''
approaches. Empowering those closest to the resources, and giving them
a real stake in managing them, has proven to be the strongest incentive
in preventing the depletion of the resource base and protecting the
region's rich biodiversity. Equally important, it has given people a
livelihood and lifted many out of poverty. These approaches have had a
national impact. For example, the government of the Philippines, with
USAID assistance, has signed 80 agreements that transfer management
control of approximately 535,000 hectares of land to 90 different
upland communities. The government has also replicated this program in
numerous other locations, so that overall some 2.9 million hectares, or
50% of the Philippines' remaining forest, are under improved community
management.
Finally, through our US-Asia Environmental Partnership (US-AEP), we
are promoting U.S. environmental technology and expertise in ways that
improve industrial environmental management and public policy. To date
48 states have participated in US-AEP programs, which collectively have
contributed more than $1.1 billion worth of export sales of U.S.
environmental technology services and products. We are particularly
proud of US-AEP's partnership with the Commerce Department, and their
active business counseling in Korea, Thailand, the Philippines and
Vietnam--much of which had lead to contracts for U.S. firms and
technology upgrades for their Asian counterparts. Developing these
lasting business relationships, while promoting the use of clean
technologies, puts US-AEP at the forefront of our efforts to foster
U.S.-driven trade and investment, and to meld economic growth with
environmentally sustainable technologies.
supporting and stabilizing democracies
USAID recognizes that economic reform and recovery will not occur
without addressing the development of responsive and accountable
government in the region.
USAID has been a leader among donors in advancing democratic reform
throughout East Asia, especially in areas such as the rule of law, good
governance, free and fair elections, and the development of civil
society. The challenges facing the region's nascent democracies are
very diverse, as illustrated in Indonesia, Cambodia and Mongolia.
Indonesia, the world's fourth most populous country, has taken the
first steps towards becoming the world's third largest democracy. The
challenges to consolidating democracy and restoring economic growth in
Indonesia are great. Indonesia encompasses 350 ethnic groups and 17,500
islands extending over an area equivalent to the distance between
Oregon and the Bahamas. The new Wahid government, elected in October
1999, is engaged in an arduous political transformation, from military
autocracy to democracy. His coalition cabinet includes a number of
leading reformers who seek to curb corruption, increase competition,
promote civilian control of the military, encourage reconciliation, and
reformulate the balance between central power and local governments.
However, some autocratic elements of the old system remain deeply
rooted and will try to frustrate a complete transition to democracy.
Separatist unrest, and religious and ethnic fighting, have the
potential to destabilize the country. Targeted assistance from the
international community, the United States, and USAID, can make a
critical difference. Indeed, too much is at stake for us to fail.
In the past, and as a lead-up to last year's elections, we focused
our efforts on helping to build a vigorous civil society capable of
advocating for change. We believe we were successful. Now the challenge
that we and other donors face is how to best support critical
institutional reform and ensure that these nascent democratic
institutions can deliver the kinds of reforms that Indonesian society
demands. While USAID will continue supporting civil society and broaden
its capacity to advocate for human rights, judicial reform, free speech
and religious tolerance, we will now concentrate our efforts in the
coming year on working with national and local parliaments to build the
legal framework for a new society; and helping the judiciary support a
democratic environment built on the rule of law, transparency, and
accountability.
We will also intensify our conflict resolution and prevention
programs that address the escalating conflicts in Aceh, Ambon, Papua
(formerly Irian Jaya), and the Moluccas. By all accounts there has been
no decrease--in fact, the opposite--in Aceh. We will continue these
institutional-strengthening and awareness-building activities,
particularly those that promote open dialogue on regional ethnic and
religious conflicts that threaten the stability of Indonesia and the
very fiber of its society.
Promoting a peaceful transition in East Timor, and ensuring that
recovery and reconstruction proceed smoothly, is critical to stability
in the region. To this end there is no more pressing need or higher
priority for USAID in Asia than revitalizing East Timor's economy and
restoring employment both in rural communities and in the capitol of
Dili. I visited East Timor in February and saw first-hand the
conditions and challenges facing East Timorese as they seek to rebuild
their communities. I am aware of the frustration that many face
regarding the slow pace of rebuilding their lives. Jobs are desperately
needed to stabilize urban and rural areas, and bring the purchasing
power to jump-start the economy.
Our foremost priority is to revive and expand our previously
successful coffee project, which since 1994 has provided livelihood to
some 17,000 families. Coffee is one of the few cash crops and foreign
exchange earners in East Timor; it represents the primary source of
income for many small farmers. We plan to expand the number of
producers to 40,000 over the next four years, a critical step in
reviving the economy and stabilizing East Timorese society and culture.
Assuming an additional 20,000 people are employed seasonally in the
coffee trade, we estimate that one-fourth of all East Timorese--170,000
people--will benefit from this program.
We will also work through our Office of Transition Initiatives
(OTI) to provide support for community-led empowerment and development
projects. OTI's on-the-ground presence and ability to ``jump-start''
various activities serve as both a catalyst for and a critical relay
with other donor programs that are just getting underway. It is this
fusion of sustained economic activity, job creation, and grassroots
empowerment that will provide a strong foundation for East Timor's
eventual transition to a nation state. What we must realize, as this
program unfolds, is that the Timorese have high expectations for a
better life, and that making good on these expectations is essential if
East Timor is to achieve and maintain stability.
Turning to Cambodia, we see one of the poorest countries in the
world emerging from several decades of warfare and atrocity which have
taken the lives of almost two million people. Infrastructure, trust in
government, and civil society have all been destroyed. Given the
complicated and troubled legacy of the past thirty years, we cannot
expect either a seamless or linear transition to democracy--only small,
deliberate steps. While there are signs of reform, some of which are
nurtured by NGOs that USAID has supported, there are continued concerns
within the international community about the overall pace of democratic
reform and accountability for senior Khmer Rouge leaders for the crimes
committed during their regime.
As we look for positive signs of reform, we will continue helping
NGOs provide humanitarian services and advocate for further reform.
USAID assistance has been invaluable in supporting programs and
organizations that protect human rights and strengthen civil society.
In Cambodia, an NGO, for example, recently held a nationwide forum
where Cambodians explored reconciliation and addressed the legacy of
the genocide. Human rights violations are being reported and
investigated. For the first time, USAID-supported NGOs are offering
abused and trafficked women a place of safety and the possibility of
redress. These are all major steps forward. Our hope for the future,
however, rests with the young people of Cambodia. It is they who are
the linchpin of transition and the ones who can ensure the prosperous
and stable future of this country. We await the necessary reforms on
the part of the Cambodian government, which will meet the preconditions
for restarting our basic education program on a bilateral basis. This
program is the key to progress, democracy, and nation-building in the
truest sense of the word.
Mongolia is also on the path to democratic reform and a market-
based economy. With five free and fair elections held since Mongolia's
independence from Soviet rule in 1991, and a sixth expected in June,
the key challenge today is building strong political parties and a
legislature that can agree on much-needed reform. Success will depend
on gaining experience with the fundamental tools of democracy. We want
to help Mongolian society do this, focusing on strengthening rural
civil society and improving the effectiveness of parliament and the
judiciary.
A final challenge that is taking on increasing importance for USAID
is the humanitarian and democracy programs in Burma. Our challenge is
how to support and influence an eventual peaceful transition to the
growing number of refugees and displaced people living inside Burma and
along Burma's borders. Over the past year, USAID and State Department
colleagues have developed a coordinated approach focusing on (1)
developing the capacity of the Burmese to manage the eventual
transition to a democratic society; (2) increasing pressure on the
ruling Burmese regime to improve its human rights record and engage in
meaningful dialogue with the democratic opposition and ethnic
minorities; and (3) providing humanitarian assistance to refugee
populations in camps along the Thai-Burma border, and where possible to
displaced Burmese outside the refugee camps.
addressing public health and social safety net challenges
Globalization has brought about potentially de-stabilizing forces.
The increased flow of people and commerce has led to a burgeoning of
health epidemics in East Asia, such as HIV, TB, and malaria. Between
1988 and 1998, international air travel from the U.S. increased by
almost sixty percent. Millions of people travel between the U.S. and
Asia each year. We know that infectious diseases do not respect
national boundaries, and that there is the potential for a real crisis
and a genuine threat to the health of our own citizens. HIV infections
in Asia increased by seventy percent between 1996 and 1998--the fastest
rate of increase in the world. HIV/AIDS is not just a health crisis--it
is a development crisis that threatens the social fabric of nations and
communities. Unless we act quickly, countries in this region may soon
be facing a situation comparable to what we see in Africa today, where
HIV/AIDS is a root cause of social, economic and political crisis; and
where more than 5,000 people die from AIDS each day.
USAID recognizes the need to prevent the spread of the AIDS
epidemic in Asia, which is driven by the sex trade, including the
trafficking of women and young girls and intravenous drug use. High
rates of migration within and across national boundaries are increasing
the geographic scope and scale of the epidemic.
Cambodia has the highest rate of HIV infection among adults in the
region at 2.4 percent. While the epidemic is still concentrated in
high-risk populations, such as commercial sex workers (43 percent HIV
positive in 1998) and their clients, it is beginning to spread to the
general population. This is a potential powder keg, especially when
considering the region's porous borders and high incidence of
trafficking. Our program focuses on changing behavior and on improving
the quality of and access to sexually transmitted disease (STD) care.
Police officers and military are especially important targets of our
program because they serve as bridges between the high-risk groups and
the general population.
In addition to Cambodia, we are working in Laos, Vietnam,
Indonesia, along the Burma border, and in the Philippines to increase
disease surveillance capabilities and developing innovative approaches
for changing behavior and stopping incipient HIV/AIDS epidemics in
their tracks. Preventive and educational HIV/AIDS programs in
individual countries in the region cannot easily reach highly mobile
individuals who travel across borders on a regular basis. This
transboundary problem requires a transboundary response. USAID
developed an innovative cross-border HIV/AIDS program to promote
awareness and reduce the infection rate of vulnerable refugee
populations on the Thai-Vietnam, Thai-Burma, and Vietnam-Laos borders.
The re-emergence of drug-resistant malaria and TB in the region
also represents serious threats to these nations and to the United
States. Of the seven to eight million people around the world who
contract TB each year, nearly three million cases occurred in Southeast
Asia. TB represents the number one cause of death among economically
active Indonesians, and forty percent of the AIDS-related deaths across
East Asia. In response, we are developing an aggressive regional
program to diagnose, treat, and prevent the spread of TB across the
region.
Along Thailand's borders with Cambodia and Burma, a strain of
malaria has emerged which is resistant to all known drugs except one.
Displacement of people by war, increasing gem mining and logging
activities in Cambodia are bringing more and more people into this
area; increasing numbers of men and women are at risk of contracting
this debilitating disease. Experts are very concerned that this strain
of malaria is spreading throughout the region. USAID is working with
local NGOs and the World Health Organization on surveillance in order
to find out where the strain is and how it is spreading. We are
training health workers on how to diagnose and treat the disease, and
educating the public on how to prevent it.
conclusion
Mr. Chairman, the East Asia that you and I are looking at today
presents challenges that we would have found inconceivable only a few
short years ago. While there was never any question about the
importance of the region for key U.S. national interests, there was
never so much widespread concern about security and stability beyond
the borders of China and North Korea. And while the focus of this
concern was once isolated to basic economic and politics, we now find
that there are equally potent threats in diseases that we cannot easily
control.
The countries of this region are facing a number of complex
challenges. Success in reviving economic growth, in building
democracies to cement stable societies, and addressing social ills in
East Asia is critical for America's continued prosperity and security.
USAID is meeting this challenge--being responsive to congressional
interests in the region, looking at ways we can enhance impact and
achieve coherence with U.S. foreign policy interests. Without effective
and adequately funded USAID programs, economic growth, democracy, and
improved human welfare are much less likely to occur in East Asia.
Program Resources for East Asia--FY's 2000 and 2001
[In millions of dollars]
----------------------------------------------------------------------------------------------------------------
Fiscal Year 2000 Fiscal Year 2001
Program -----------------------------------------------------------
DA & CS ESF ALL DA & CS ESF ALL
----------------------------------------------------------------------------------------------------------------
Bilateral:
Burma............................................. 3.0 3.5 6.5 3.0 3.5 6.5
Cambodia.......................................... 5.8 10.0 \1\ 20.5 0.0 20.0 20.0
China............................................. 0.0 1.0 1.0 0.0 28.0 28.0
East Timor........................................ 0.0 24.0 \1\ 29.3 0.0 10.0 10.0
Indonesia \2\..................................... 72.0 23.0 \1\ 108. 80.0 50.0 \1\ 135.
6 0
Mongolia \3\...................................... 0.0 6.0 12.0 0.0 12.0 12.0
Philippines....................................... 29.7 0.0 29.7 40.0 5.0 45.0
Vietnam........................................... 2.7 0.0 2.7 2.0 0.0 2.0
Regional:
AERA \4\.......................................... 12.7 5.0 17.7 11.0 8.0 19.0
Infectious Diseases & HIV/AIDS.................... 5.0 0.0 5.0 8.6 0.0 8.6
USAEP \5\......................................... 6.0 0.0 6.0 7.6 0.0 7.6
E. Asia........................................... 0 3.5 3.5 0.0 6.0 6.0
Environmental Initiative
Regional Democracy................................ 0.0 2.3 2.3 0.0 5.3 5.3
Regional Women's Issues........................... 0.0 2.5 2.5 0.0 4.0 4.0
-----------------------------------------------------------
TOTAL........................................... 136.9 86.8 247.3 152.2 151.8 309.0
----------------------------------------------------------------------------------------------------------------
\1\ Funding totals include PL 480 Title II in the amount of $6.9 million for Cambodia, $4.3 million for East
Timor, and $13.6 million for Indonesia in FY 2000. Funding totals for FY 2001 include PL 480 Title II in the
amount of $5 million for Indonesia.
\2\ Total amount of all program resources (including Office of Transition Initiatives and Global Bureau
activities) is $125 million.
\3\ Funding for Mongolia includes $6 million for Freedom Support Act.
\4\ Accelerating Economic Recovery in Asia.
\5\ US Asia Environmental Partnership.
Senator Thomas. Thank you. Senator, thank you for joining
us. Do you have any opening comment?
Senator Feingold. Really just questions, whenever you are
ready, Mr. Chairman.
Senator Thomas. All right. Let me have a couple, then we
will scoot around here.
What is the total budget for USAID?
Mr. Randolph. The total budget, Senator, is about--I think
it is $7 to $7.5 billion.
Senator Thomas. That is roughly half the State Department?
Mr. Randolph. I could not tell you what percentage of the
State Department budget it is. Our budget for the Bureau of
Asia and Near East is about $2.5 billion, so we are roughly a
third of the USAID budget. We should probably take out the $900
million Israeli cash transfer that goes to the Israelis in the
form of a check, so I would say we are at $1.6 billion, which
is probably 20, 25 percent of the USAID budget.
Senator Thomas. As you enter into these activities, like
Cambodia and other places, are you there at the request of the
country? How do you choose which country to go to? What is the
relationship? Did they ask you to come?
Mr. Randolph. Normally a country would ask us to come and
work in the country. We find that we can best accomplish our
activities if the country has a government that desires to
reform, desires to promote democracy, and desires to take the
necessary steps to combat diseases which afflict its
population.
We do not work in Burma, but we are working in the border
regions of Thailand, where we are doing humanitarian work,
because we think it is important to work with Burmese groups
who ultimately want to go back and create a civil society in
Burma, and there are humanitarian reasons for taking care of
the refugees who are congregating on the Thai border.
Senator Thomas. Well, of course, you and I want that to
happen, but it does not happen unless that country wants it to
happen.
In Cambodia, for example, you indicate that the United
States and other countries imposed restrictions on direct aid,
and your officials have urged Congress to lift those
restrictions, stating that if they are not, then the Agency
will be forced to cut back on its activities. Now, if we have
restrictions on direct aid, why is USAID giving aid?
Mr. Randolph. We have restrictions on direct aid to the
Government of Cambodia. We do not have restrictions on actually
doing work in Cambodia with NGO's on humanitarian and democracy
issues, and we are giving aid because the State Department has
determined that it is important for U.S. national interests to
ensure that Cambodians, who were so traumatized during the Pol
Pot years, have access to appropriate medical care and begin
working with other countries who want to see the creation of a
civil society in Cambodia.
Senator Thomas. Is it not a little bit of a contradiction
to restrict aid on the one hand and then say we are going to
help you on the other?
Mr. Randolph. No. It would not be a contradiction because
we are working with the people. We are working with NGO's who
want to promote democracy, in reaction to or in opposition to a
government which wants to suppress democracy.
Senator Thomas. You are working in opposition to the
government?
Mr. Randolph. Yes.
Senator Thomas. They allow you to be there?
Mr. Randolph. They allow us to be there.
Senator Thomas. That is a little hard to understand. I
think they must acknowledge that you are there and be willing
to be there or you would not be there. Is that true?
Mr. Randolph. I think that is the case. I do not think for
that reason that we would be able to work successfully in
Burma.
Senator Thomas. Indonesia; how long has USAID been in
Indonesia?
Mr. Randolph. I am sure we have been there since the
1970's, and we have had a very successful program which, in the
early years of the Suharto regime was responsible for helping
Indonesia achieve economic growth in the range of 6 percent,
and helping Indonesia make tremendous strides in the fields of
maternity and child health, family planning, and kind of
economic development.
When the Suharto regime went to rot in the 1990's we began
curtailing our aid, and it is only then, during the last 2
years, that our program in Indonesia has begun to increase
again, primarily in response to the changed conditions.
Senator Thomas. I guess if you measured your being there in
terms of success, it would be hard to measure that you were
successful during the Suharto days, would it not?
Mr. Randolph. I think that is a true statement, and I think
we understood from our failure in Indonesia, probably on the
political and economic side, that working with authoritarian
governments, hand-in-glove supporting authoritarian
governments, does not ultimately produce freedom and
prosperity. I think we have learned our lesson there, and it
has caused us to reconfigure our program so that democracy and
the promotion of free markets and free people are a paramount
goal of USAID's programs around the world.
Senator Thomas. I have used my time. Senator.
Senator Feingold. Thank you, Mr. Chairman, for holding this
hearing, and I want to thank Mr. Randolph for being here to
testify.
A stable and healthy East Asia in which prosperity is
firmly grounded in freedom and respect for the rule of law is
unquestionably in the United States interest, and I was pleased
to hear your remarks. From addressing infectious diseases,
including AIDS, to bolstering anticorruption efforts,
responsible, well-monitored foreign assistance can be an
important instrument helping to attain these goals, and I would
like to ask just a couple of questions about East Timor at
first.
I appreciate your remarks about that situation. The
administration's ESF request for East Timor is $15 million less
than the year 2000 estimate of $25 million. To what extent are
you able--if you could, to explain the rationale for this
reduction at a time when East Timor's needs are obviously vast.
Does it have something to do with the absorptive capacity of
East Timor?
Mr. Randolph. East Timor's needs are vast, and the amount
of money pledged by the international community is even more
vast, $522 million. The ultimate interim authority for running
East Timor will be the United Nations, with the assistance of
the World Bank. We see our role in East Timor as providing a
temporary bridge to provide employment of the East Timorese, to
begin undertaking the development of a civil society until the
U.N. and World Bank get their programs going.
We believe that $10 million ought to be sufficient for East
Timor next year, provided that the $520 million that will be
administered by the World Bank and the U.N. is efficiently and
competently administered, and that the U.N. gets going quickly
with its job creation and civil society programs. If that is
not the case, Senator, then we would certainly have to
reevaluate our program in East Timor, but we just do not see
the necessity of throwing money in a country where there is
plenty of money to go around for the time being, if it is
wisely spent.
Senator Feingold. Well, that relates to a second question.
Could you describe a little more USAID's priorities in East
Timor, and how it relates to plans for donor coordination? In
other words, has the U.S. agreed to take the lead on certain
sectors, with the understanding that the Europeans, for
example, will be contributing, or others will be contributing
more to other sectors? Could you describe the sort of division
of labor effort there?
Mr. Randolph. Yes. Our major priority, since we view our
strategy as a transition strategy, is the creation of
employment. Long-term employment by way of developing the
coffee industry which USAID started, and which has been a huge
success, and which we hope in 5 years will either employ or
feed 25 percent of the population.
Second, the short-term goal of putting the East Timorese
that I described as milling around on the street corners,
getting very, very angry about the wealth that they see driving
by, and the good food that they see being consumed by the
international sector. I am pleased that we have been able to go
in almost immediately and begin generating these employment
projects through our Office of Transition Initiatives.
Sometimes we are criticized for being slow moving and
bureaucratic and encumbered, but by contrast to any other
national agency we are really fast as the wind, and I think we
can be proud of what we are doing in East Timor, but since
ultimately it is going to be the U.N. and the World Bank who
have responsibility for leading the transition, we would want
to view our activities as essentially transitional activities.
Senator Feingold. As we focus on the jobs and the industry
in particular, what are some of the other major donors going to
focus on, if you could say a little bit more about that.
Mr. Randolph. Well, the other donors would focus on
building institutional capacity, creating a legislature,
creating an executive. Part of the problem there, as you know,
is that there are very few people have more than a fourth grade
education.
All of the civil servants were supplied by the Indonesians,
and the Indonesians are gone, so you have basically got a
country which has very few lawyers, very few college graduates,
very few people who can read and write, and it is frankly going
to take a very long time to create the institutions of
governance which we normally associate with a fully functioning
country, and that is why we have decided to concentrate on
economic growth in East Timor as the best way to minimize the
risk of conflict and disappointment.
Senator Feingold. Thank you, Mr. Randolph. Thank you, Mr.
Chairman.
Senator Thomas. On the subject of East Timor, what is your
analysis of their ability over a reasonable time to be self-
sustaining economically?
Mr. Randolph. I would be very pessimistic about the ability
of East Timor to be self-sustaining economically over any
reasonable time. I am concerned that it will remain a ward of
the international donor community for a long time, which is
another reason why we are concentrating on employment and
economic growth, particularly expanding the coffee project.
Ultimately, from the point of view of national interest,
East Timor is probably less important to our national interest
than it would be for the Australians and the Indonesians and
the Asians, which is another reason why we would look to the
countries of Asia to take the long-term lead in helping East
Timor make the transition to a viable, sustainable society.
Senator Thomas. The State Department's 1999 human rights
report suggested that Cambodia's human rights situation had
improved. There continues to be serious problems with the human
rights record. If that is the case, why is USAID requesting
lifting of the restrictions and sanctions?
Mr. Randolph. I am not aware that we are requesting lifting
of the sanctions, Senator.
[Pause.]
Mr. Randolph. I would have to get back to you on that.
Senator Thomas. It is my understanding that they are
recommending a lifting of the sanctions.
Mr. Randolph. I know we would like to do some work with the
local governments in the basic education sector. We believe
that working with the younger people of Cambodia is the best
way to create a population who are imbued with concepts of
democracy and who have the education to make a democracy work.
I mean, to the extent that we are asking for any help, it
would be in the basic education sector.
Senator Thomas. Well, I just want you to know that I agree
with the notion that democracy and market functions are best
instituted and developed when people see what sort of a country
that they can have, and they see what is going on around them.
However, there has to be some willingness on the part of the
country that you are dealing with to move in that direction.
For instance, you mentioned the great success in Korea and
Taiwan. I would think you would have to say that those people
pretty much pushed themselves into their successful position,
and particularly Taiwan.
Mr. Randolph. We know they have, Mr. Chairman. It is
admirable what they have done, both in their countries and what
they have done here in the United States. The Taiwanese-
Americans and the Korean-Americans have made such a tremendous
contribution to this country.
Senator Thomas. Well, it is very difficult, I am sure, to
make a policy judgment as to where our resources are spent and,
assuming they are limited, where we can do the best job. One of
the interesting things I do not quite understand is the $28
million payment for the bombing of the Chinese Embassy in
Belgrade.
Mr. Randolph. Yes.
Senator Thomas. It is my understanding those funds come out
of ESF funds, as opposed, for instance, to the gondola in
Europe that came out of DOD funds. Why is that?
Mr. Randolph. Mr. Chairman, that amazes me as much as it
does you. I am going to see Mr. Roth tomorrow and I will ask
him why, but I think it probably has something to do with the
way OMB and the State Department and the administration budget.
Senator Thomas. Yes. This is a little off the edge of the--
when the President goes here and there, he leaves generally
millions of dollars in these countries. Where does that come
from?
Mr. Randolph. It comes from our USAID budget, and it comes
from money that Congress and the American people appropriate
for USAID to work abroad. For example, I was just with the
President in India, and he announced a regional energy program
called the SARI initiative, South Asia Regional Initiative,
which has at its core promoting the export of clean energy
among the nations of South Asia, and reducing greenhouse gas
emissions, two very important goals of USAID.
Senator Thomas. Thank you for telling me that. I have been
wondering for some time where that sort of loose money, or
unattached money seems to come from.
Mr. Randolph. Well, we have been working on this
initiative, Mr. Chairman, and it was really coincidental that
the President was able to announce it while he was in India.
Senator Thomas. Is it coincidental that he announces one
everywhere he goes?
Mr. Randolph. Well, that is not coincidental, because I
think he likes to be able to announce things wherever he goes,
and if you have got something that you are working on and it is
ready to go, it will normally be announced by the President.
Senator Thomas. It is a good deal. It is a good deal.
Mr. Randolph. But we make a point of not announcing
projects that are funded by money that we do not have, and I
can assure you that will never happen in my Bureau.
Senator Thomas. Well, my greatest concern is that the
allocations of the effort, the allocations of dollars, go--and
I do not say this critically, because I am sure you would
agree--they go where they can have the greatest impact, go
where we can have some success, go where they are consistent
with what we are trying to do and the rest, whether it is
security, whether it is trade, whether it is relationships, and
so on.
Sometimes you get the sense that this USAID operation is
just sort of out here by itself. Tell me the difference between
now--if you are familiar, now and before the two agencies were
combined.
Mr. Randolph. I really do not, at least in my Bureau, in
the way that my Bureau does business with the State Department,
I do not think there is a whole lot of difference.
For example, the Secretary has said that Indonesia is one
of four priority countries, along with Colombia, Ukraine, and
Nigeria, and we work hand-in-glove with Stanley Roth and the
East Asia Pacific Bureau to find money for the Secretary's most
important priority, Mr. Roth's most important priority, and our
Bureau's important priority, Indonesia, and in order to do
that, we have to--we rob some of the other countries where we
work.
Philippines normally has a program of $40 million a year,
and you will see that we are only doing $29 million this year.
Money came out of South Asia, which I know is not in your
bailiwick, but money came out of South Asia for Indonesia.
So I think we try to stay very focused on putting the most
resources into the countries that have the most strategic
importance to the United States.
Senator Thomas. The Philippines would be one of the more
prosperous countries in this arena, would they not?
Mr. Randolph. The Philippines has done a good job
developing the kinds of democratic institutions and strong
financial institutions that helped it survive the Asian
financial crisis. There are a number of things that we are
still doing in the Philippines. We are working on
anticorruption activities.
The Philippines does have an insurrection of sorts in
Mindanao. We are working in Mindanao on economic growth to
ensure that there are jobs for people who might otherwise join
the Muslim militia, and that there are jobs for people who
leave Muslim rebel groups and want to come back to civil
society.
Senator Thomas. Mongolia also seems to me relative to
others--is a member of WTO. We have MFN status, permanent
trading status with Mongolia. How would they fall into the
category of being on your list as much as some others?
Mr. Randolph. Mr. Chairman, I must say that I have really
changed my mind about Mongolia. When I first came to this job,
not knowing as much as I should--I hope I know more now than I
did then----
Senator Thomas. I am sure you do.
Mr. Randolph. I did not quite understand the importance of
a country that actually is situated between two very big
countries with nuclear weapons, China and the Soviet Union.
It is a country that was for years, as you know, a
satellite of the Soviet Union, but it is a country that in the
Europe of the nineties made clear that it wanted to be
democratic. It held an election in 1991. We are looking forward
to another election in the spring of this year, in June.
We spend $12 million a year there, and given the results in
Mongolia, which you have just pointed to as a former Communist
country that has a democratic government, it wants to be in the
WTO, it is trying to do everything right, given the results,
that has been money very well spent in a country which has some
strategic importance to the United States, and it is a country
very close to China and Russia, and they can kind of look over
the border and see what happens.
It is like Korea and Taiwan. When the people in a country
put their mind on working hard to create a democratic free
market society, it is a beacon in that part of the world, Mr.
Chairman.
Senator Thomas. Yes. What is your relationship, working and
otherwise, with the World Bank and the International Monetary
Fund?
Mr. Randolph. We work very closely with the World Bank,
because the World Bank normally performs the role of donor
coordination. You have asked how we coordinate our activities
so that we do not duplicate them. World Bank will hold a
conference once a year. There was a conference on East Timor
held in Tokyo several months back. My deputy, Karen Turner,
attended it, and this was the conference where $520 million
plus was pledged, and then the donors all decided how they were
going to work and in what sectors.
I just attended a World Bank consultative group meeting on
Indonesia in Jakarta in February, and the donors, under the
leadership of the World Bank, came together and said, we think
some people should work in the local government on the
decentralization issue, others should work on environmental
issues, others would work on judicial reform, so that the
donors were not duplicating their efforts and the taxpayers in
the donor countries could be assured that they were getting
their money's worth.
I know that there has been some criticism of the World
Bank. It is, I think, excessively bureaucratic. I am concerned
that the World Bank and the U.N. have been so slow to get off
the mark in East Timor, but you know, I think it is like
Churchill said about democracy. It may not be a good system,
but it is the best system we have got. And at this point, in
terms of donor coordination, it is the best system we have got.
I think it is very important from a foreign policy point of
view, and I know Stanley Roth feels this way, too, that we
move, that we keep prodding the World Bank and the U.N. to get
going in a country like East Timor so that we do not have a
conflict created by disappointed expectations.
Senator Thomas. Well, I think you would have to say that
Australia and some others took a pretty heavy load in East
Timor.
Mr. Randolph. Yes. We very much appreciate what the
Australians did in East Timor. When I was there, I saw the
Australian Army in action, and they had few skirmishes with the
so-called militias.
Senator Thomas. Do they still have refugees in West Timor?
Mr. Randolph. There are still refugees there, Mr. Chairman.
There are several hundred thousand refugees. Maybe that is--I
do not know the exact number, but there are at least 100,000.
Many of them were pro-Jakarta civil servants, business people,
farmers, people who wanted a relationship with Jakarta and who
really cannot go back. They are very much like the Serbs who
left Kosovo because of the conditions there. There is still a
lot of ethnic tension and violence between the East Timorese--
the indigenous East Timorese and the Javanese.
Senator Thomas. Do you, or have you had involvement in
North Korea?
Mr. Randolph. We do not have any direct involvement in
North Korea. When I say we, my Bureau, the Bureau of Asia and
the Near East. USAID is involved on the humanitarian side with
food shipments. I think that we are shipping about 200,000
metric tons of food to North Korea this year, with a value of
$53 million. My Bureau is not involved in that at all. That is
the so-called Bureau of Humanitarian Affairs.
But I do know that we are very careful to make sure that
the food goes to North Koreans who are starving, as careful as
we can be, and that it is not diverted to the military or to
the government or to officials.
Senator Thomas. How do you do that?
Mr. Randolph. We work with NGO's who are on the ground in
North Korea, and who understand----
Senator Thomas. Many of whom have withdrawn?
Mr. Randolph. Pardon?
Senator Thomas. Some of whom have withdrawn?
Mr. Randolph. I just do not know enough about that
situation, Mr. Chairman.
Senator Thomas. Well, I appreciated this. As I said, I
think it is very important that we make our position clear on
foreign policy, and then the things we do are consistent with
that, and that they are coordinated so that we can have the
most impact possible.
I think often we talk about many things in terms of our
relationships, but seldom do we talk about USAID and its
activities. I think all of us know it is there. So I think this
has been useful, and I hope you come back again, or at least
let us know when you think there are things that we ought to be
doing or are not doing and, as you might suspect, we will be
free to also share that with you.
So thank you, Mr. Randolph. I appreciate it very much, and
we look forward to working with you.
Mr. Randolph. Thank you, Mr. Chairman.
Senator Thomas. Thank you, sir. The committee is adjourned.
[Whereupon, at 3:45 p.m., the subcommittee adjourned.]
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