FY 2003 International Affairs Budget

Mr. Chairman, members of the subcommittee, I am pleased to appear before you to testify in support of President Bush’s budget request for FY 2003.  Last May, Mr. Chairman, you may recall that in my opening remarks I told you how important I consider interchanges such as this with the Congress. Our breakfast together at the State Department yesterday reinforced my appreciation for such exchanges.

I believe it is an important part of my responsibilities to work closely with the Congress and with all the various committees. This will be my eighth budget hearing this year, but I consider this kind of interchange with the Congress as important as any other duty that I have.

You may also remember that last year I told you that I believe I have responsibilities as CEO of the State Department as well as those of being principal foreign policy advisor to the President.  Wearing that hat, my CEO hat, I want to tell you that we have made solid advances over the past year – advances in hiring, in bringing state of the art information technology to the Department, and in streamlining our overseas buildings process and in making our buildings more secure for our people.

Morale is high at the Department and we owe this Congress a debt of gratitude for what it has done to help us develop this momentum. We are bringing the organization and conduct of America’s foreign policy into the 21^st century, and I want to thank you, Mr. Chairman, and all the members of this subcommittee, for giving us the support to begin this process.

Since that heart-rending day in September when the terrorists struck in New York, Virginia, and Pennsylvania, we have seen why the conduct of our foreign policy is so important.

We have had remarkable success over the past seven months in the war on terrorism, especially in Afghanistan, and we are beginning to see some success in the Philippines, in Yemen, and elsewhere. And behind the courageous men and women of our armed forces, behind the stepped up law enforcement efforts, and behind the increased scrutiny of and action against terrorist financial networks, has been the quiet, steady course of diplomacy.

As a result, we have reshaped a good part of South Asia – a new U.S.-Pakistan relationship, a reinvigorated U.S.-India relationship, a new Interim Authority in Kabul, and the Taliban and the terrorists dead, in jail, or on the run. We are also forming important new relationships with the nations of Central Asia and helping friends and allies fight the scourge of terrorism from the marble-floored banks of Europe to the forested-gorges of Georgia.

In his second visit to the Department last year, President Bush told us that despite the great tragedy of September 11, we could see opportunities through our tears – and at his direction, the Department of State has been at flank speed ever since, making as much as possible of those opportunities.

Over the past year, Mr. Chairman, I believe the broader tapestry of our foreign policy has become clear: to encourage the spread of democracy and market economies, to lift up countries that want to be part of that expansion, and to bring more governments to the understanding that the power of the individual is the power that counts. And when evil appears to threaten this progress, America will confront that evil and defeat it – as we are doing in the war on terrorism.

In weaving this tapestry, we have achieved several successes:

With regard to Russia, President Bush has defied some of our critics and structured a very strong relationship. The meetings that he had with President Putin and the dialogue that has taken place between Russian Foreign Minister Ivanov and me and between Secretary of Defense Rumsfeld and his counterpart, and at a variety of other levels, have positioned the United States for a strengthened relationship with the land of eleven time zones.

The way that Russia responded to the events of September 11 was reflective of this positive relationship. Russia has been a key member of the antiterrorist coalition. It has played a crucial role in our success in Afghanistan, by providing intelligence, bolstering the Northern Alliance, and assisting our entry into Central Asia. As a result, we have seriously eroded the capabilities of a terrorist network that posed a direct threat to both of our countries. The job is not complete yet – as our continuing operations in Afghanistan and our just-beginning Train and Equip operations in Georgia clearly demonstrate – but we are making headway.

Similarly, the way we and the Russians agreed to disagree on the ABM Treaty reflects the intense dialogue we have had over the last thirteen months, a dialogue in which we told the Russians where we were headed and we made clear to them that we were serious and that nothing would deter us. And we asked them if there was a way that we could do what we had to do together, or a way that they could accept what we had to do in light of the threat to both of our countries from ballistic missiles.

At the end of the day, we agreed to disagree and we notified Russia that we were going to withdraw from the ABM Treaty. I notified FM Ivanov – we talked about our plans for two days. President Bush called President Putin. Then the two presidents arranged the way we would make our different announcements. And the world did not end. An arms race did not break out. There is no crisis in Russia-U.S. relations. In fact, our relations are very good. Both presidents pledged to reduce further the number of their offensive nuclear weapons and we have been hard at work on an agreement to codify these mutual commitments. There is every possibility that we will conclude such an agreement next month in Moscow. This is all part of the new strategic framework with Russia.

We even managed to come to an agreement on how we are going to work through NATO. This new decision-making relationship, which we are referring to as the NATO-Russia Council, or "NATO at 20," will provide a mechanism for consultations, cooperation, joint decisions and joint action. It will offer Russia the opportunity to participate in shaping cooperative projects in areas such as counterterrorism, civil emergency preparedness, and joint training and exercises. Our aim is to have this arrangement in place for the Reykjavik ministerial next month. Moreover, NATO’s Secretary General, Lord Robertson, announced last week that President Putin will be invited to Italy for a NATO-Russia Summit on May 28.

Mr. Chairman, as we head for the NATO Summit in Prague in November, where we will consider a new round of NATO enlargement, I think we will find the environment a great deal calmer than we might have expected.

I believe the way we handled the war on terrorism, the ABM Treaty, nuclear reductions, and NATO is reflective of the way we will be working together with Russia in the future. Building on the progress we have already made will require energy, good will, and creativity on both sides as we seek to resolve some of the tough issues on our agenda.

We have not forgotten about abuses of human rights in Chechnya or Moscow’s WMD- and missile-related cooperation with Iran. Neither have we neglected to consider what the situation in Afghanistan has made plain for all to see; that is, how do we achieve a more stable security situation in Central Asia? We know that this is something we cannot do without the Russians and something that increasingly they realize can’t be done without us, and without the full participation of the countries in the region. We are working these issues as well.

In fact, the way we are approaching Central Asia is symbolic of the way we are approaching the relationship as a whole and of the growing trust between our two countries. We are tackling issues that used to be problems between us and turning them into opportunities for more cooperation. We have found in the last few weeks, for example, that we could even deal with chickens.

And in Madrid, when the "Quartet" met two weeks ago – the EU, Russia, the UN, and the U.S. – my talks with Russian FM Ivanov were especially helpful in framing the message the Quartet crafted with respect to the crisis in the Middle East. In Madrid also, FM Ivanov and I agreed to meet early next month here in Washington to continue our discussions on the new strategic framework. And President Bush will visit Moscow and St. Petersburg later in May.

Such a collegial approach to our relationship does not mean that differences have vanished or that tough negotiations are a thing of the past. What it means is that we believe there are no insurmountable obstacles to building on the improved relationship we have already constructed.

It will take time. But we are on the road to a vastly changed relationship with Russia. That can only be for the good – for America and the world.

With that in mind, Mr. Chairman, and in the spirit of closer U.S.-Russia cooperation, and in light of Russia’s continued compliance with Jackson-Vanik legislation, the President hopes Congress will lift the application of this legislation to Russia before the Moscow-St. Petersburg Summit in late May.

Mr. Chairman, we have also made significant progress in our relationship with China.

A candid, constructive, and cooperative relationship is what we are building with China. Candid where we disagree; constructive where we can see some daylight; and cooperative where we have common regional or global interests.

These are the principles President Bush took with him to Beijing at the end of February this year. After meeting with Prime Minister Koizumi in Tokyo and with President Kim in Seoul, the President spent a day and a half in Beijing and met with President Jiang Zemin, as well as Premier Zhu Rongji. These meetings solidified further what has become a markedly improved relationship – a relationship that will see China’s Vice President, Hu Jintao, visit Washington at the end of this month through the beginning of next month, at the invitation of Vice President Cheney.

In less than a year, we moved from what was a potentially volatile situation in April of last year involving our EP-3 reconnaissance aircraft which was forced to land on China’s Hainan Island after a PLA fighter aircraft collided with it, to a very successful meeting in Shanghai in October between President Jiang Zemin and President Bush and an APEC Conference, hosted by China, that was equally successful.

There are certain shared interests that we have with China and we have emphasized those interests. They are regional and global interests, such as China’s accession to WTO, stability on the Korean Peninsula, and combating the scourge of HIV/AIDS. On such issues we can talk and we can work out ways to cooperate.

There are other interests where we decidedly do not see eye-to-eye, such as arms sales to Taiwan, human rights, religious freedom, and non-proliferation. On such issues we can have a dialogue and try to make measurable progress.

But we do not want the interests where we differ to constrain us from pursuing those where we share common goals. And that is the basis upon which our relations are going rather smoothly at present. That, and counterterrorism.

President Jiang Zemin was one of the first world leaders to call President Bush and offer his sorrow and condolences for the tragic events of September 11. And in the over seven months since that day, China has helped in the war against terrorism. Beijing has also helped in the reconstruction of Afghanistan and we hope will help even more in the future.

Moreover, China has played a constructive role in helping us manage the very dangerous situation in South Asia between India and Pakistan. When I could call China’s Foreign Minster Tang and have a good discussion, making sure our policies were known and understood, it made for a more reasoned approach to what was – and as the snows melt may continue to be -- a volatile situation. As a result, China has supported the approach that the rest of the international community has taken. Beijing has not tried to be a spoiler but instead tried to help us alleviate tensions and convince the two parties to scale down their dangerous confrontation, which, hopefully, is happening. We will continue to work with Beijing as the situation evolves.

All of this cooperation came as a result of our careful efforts to build the relationship over the months since the EP-3 incident. We never walked away from our commitment to human rights, non-proliferation, or religious freedom; and we never walked away from the position that we don’t think the Chinese political system is the right one for the 21^st century. And we continued to tell the Chinese that if their economic development continues apace and the Chinese people see the benefits of being part of a world that rests on the rule of law, we can continue to work together constructively.

As we improved our relationship with China, Mr. Chairman, we also reinvigorated our bilateral alliances with Japan, The Republic of Korea, and Australia. Nowhere has this been more visible than in the war on terrorism – where cooperation has been solid and helpful.

Prime Minister Koizumi immediately offered Japan’s strong support, within the confines of its constitution. And he is working to enhance Japan’s capability to contribute to such global and regional actions in the future. President Bush’s dialogue with the Prime Minister has been warm, engaging, and productive. Always the linchpin of our security strategy in East Asia, the U.S.-Japan Security Alliance is now as strong a bond between our two countries as it has been in the half-century of its existence. Our shared interests, values, and concerns, plus the dictates of regional security, make it imperative that we sustain this renewed vigor in our key Pacific alliance. And we will.

With respect to the Peninsula, our alliance with the Republic of Korea (ROK) has also been strengthened by Korea’s strong response to the war on terrorism and by our careful analysis of and consultations on where we needed to take the dialogue with the North. President Bush has made it very clear that we are dissatisfied with the actions of North Korea; in particular that the North continues to develop and sell missiles that could carry weapons of mass destruction. But we have also made clear that both we and the ROK are ready to resume dialogue with Pyongyang, on this or any other matter, at any time the North Koreans decide to come back to the table.

In that regard, we welcome the results of ROK Special Advisor Lim Dong-won’s recent talks with North Korean leaders in Pyongyang, which included agreements on resuming dialogue and cooperation between the two Koreas. We are also pleased to note that North Korea signaled its willingness to resume dialogue with the United States. We would welcome such a resumption of talks; however, we have not yet received a direct response from the North Koreans.

Further south, the Australians have been exceptional in their efforts to support the war on terrorism. Heavily committed in East Timor already, Australia nonetheless offered its help immediately and we have been grateful for that help, including the great Australian soldiers who have helped us on the ground in Afghanistan. The people of Australia are indeed some of America’s truest friends.

So, Mr. Chairman, as I look across the Pacific to East Asia I see a much-improved security scene and I believe that President Bush deserves the credit for this success.

Another foreign policy success is the improvement we have achieved in our relations with Europe. In waging war together on terrorism, our cooperation has grown stronger. NATO invoked Article 5 for the first time ever on September 12. Since then, the European Union has moved swiftly to round up terrorists, close down terrorist financing networks, and improve law enforcement and aviation security cooperation.

Moreover, President Bush has made clear that even as we fight the war on terrorism, we will not be deterred from achieving the goal we share with Europeans of a Europe whole, free, and at peace. We continue to work toward this goal with our Allies and Partners in Europe.

In the Balkans, we are pursuing this goal by working with our European allies and partners to advance three inter-related objectives: promoting integration into Euro-Atlantic institutions, with the EU and NATO increasingly serving as the prime movers for engagement and reform; hastening the day that peace is self-sustaining and that we and our allies can withdraw our military forces; and ensuring that the region is not a safe haven or way station for global terrorism. The EU member nations are already supplying the majority of financial resources and military forces. Our success in preventing civil war in Macedonia while avoiding another long-term commitment of NATO forces was based on the type of close cooperation among NATO, the EU, and the U.S. that will remain essential to our future success. We need to finish the job in the Balkans – and we will. We went in together with the Europeans, and we will come out together.

I also believe we have been successful in bringing the Europeans to a calmer level of concern with respect to what was being labeled by many in Europe "unbridled U.S. unilateralism". Notwithstanding the recent reaction in parts of Europe to President Bush’s State of the Union Address, to U.S. actions on steel imports, and to undocumented and even at times egregiously wrong press reports about imminent U.S. military action against Iraq, I still believe this to be true.

There was significant concern among the Europeans earlier last year that because we took some unilateral positions of principle for us that somehow the U.S. was going off on its own without a care for the rest of the world. Early in the Administration, this was particularly true with respect to the Kyoto Protocol. So we set out immediately to correct this misperception. Beginning with President Bush’s speech in Warsaw, his participation in the G-8 meetings and the European Union summit, our extensive consultations with respect to the new strategic framework with Russia, and culminating in the brilliant way in which the President pulled together the coalition against terrorism, I believe that we demonstrated to the world that we can be decisively cooperative when it serves our interests and the interests of the world.

But we have also demonstrated that when it is a matter of principle, we will stand on that principle. In his first year in office President Bush has shown the international community who he is and what his Administration is all about. That is an important accomplishment – and one that is appreciated now everywhere I go. People know where America is coming from and do not have to doubt our resolve or our purpose. They may not always agree with us, but they have no doubt about our policy or our position. We want to ensure that this policy clarity and this firmness of purpose continue to characterize our foreign policy.

Let me just note that this sort of principled approach characterizes our determined effort to reduce the threat from weapons of mass destruction – an effort well underway before the tragic events of September 11 added even greater urgency. As President Bush said at VMI last week, "…the civilized world faces a grave threat from weapons of mass destruction." We and the Russians will reduce our own deployed nuclear weapons substantially. In the meantime, we are using a comprehensive approach, along with our friends and allies, to tackle WMD elsewhere, an approach that includes export controls, non-proliferation, arms control, missile defenses, and counter-proliferation.

There are terrorists in the world who would like nothing better than to get their hands on and use nuclear, chemical, biological, or radiological weapons. So there is a definite link between terrorism and WMD. Not to recognize that link would be foolhardy to the extreme.

In fact, terrorism, Mr. Chairman, is another example of this Administration’s principled approach. Anyone who adopts for political purposes the intentional killing of innocent men, women, and children as they try to go about their everyday lives is going to be opposed by America. That is that. There should be no doubt about this commitment or in the understanding of this commitment. All people of every faith and every nation should stand unalterably opposed to such killing.

Such principled approaches, as our positions on the Kyoto Protocol or on missile defense do not equate to no cooperation. Quite the contrary. We know that cooperation is often essential to get things done. On our efforts to lift countries out of poverty, for example, and to create conditions in which trade and investment flourish, we need to cooperate.

Last month, we had a good meeting in Monterrey, Mexico on financing development. This summer in Johannesburg, we will participate in the World Summit on Sustainable Development. There we will have an opportunity to address such issues as good governance; protection of our oceans, fisheries, and forests; and how best to narrow the gap between the rich countries and the poor countries of the world.

And in June, the U.S. will participate in the World Food Summit conference in Rome. At the conference, we intend to renew our commitment to cutting world hunger in half by 2015. Progress toward this goal since the Summit in 1996 has been positive only in China. In much of the rest of the world, hunger has actually increased. We must do better.

And Mr. Chairman, I know that you and the subcommittee members are familiar with President Bush’s new Millennium Challenge Account, which he announced in Washington on March 14.

With this initiative, the President has made combating poverty a foreign policy priority. At the same time, however, he has recognized that economic development assistance can be successful only if it is linked to sound policies in the developing countries. In sound policy environments, aid attracts private investment by two to one; that is, every dollar of aid attracts two dollars of private capital. In countries where poor public policy dominates aid can actually harm the very citizens it was meant to help.

The funds we authorize and appropriate for this account will be distributed to countries that demonstrate a strong commitment toward: (1) good governance; (2) the health and education of their people; and (3) sound economic policies that foster enterprise and entrepreneurship.

We envision that resources will begin to be available in FY 2004, ramping up to $5 billion in FY 2006. Then, $5 billion every year thereafter. These resources will be separate from the current budget trajectory of our other aid dollars, which we expect to continue on their own path.

With these resources applied in this careful way, we expect to fertilize the ultimate success of more and more countries making a determined and transparent effort to join the globalized world.

Mr. Chairman, also among our foreign policy successes over the last year is our new and more effective approach to Africa – the impact of which was most dramatically demonstrated in the WTO deliberations in Doha last November that led to the launching of a new trade round. The United States found its positions in those deliberations being strongly supported by the developing countries, most notably those from Africa. The Congress laid the foundation for our success with the African Growth and Opportunity Act – an historic piece of legislation with respect to the struggling economies in Africa.

In the first year of implementation of this Act, we have seen substantial increases in trade with several countries – South Africa by 6%, Kenya by 17%, and Lesotho by 51% for 2001 over 2000. Likewise, we are very pleased with the excellent success of the first U.S.-SubSaharan Africa Trade and Economic Cooperation Forum, which was held last October.

A large part of our approach to Africa and to other developing regions and countries as well, will be directly in line with what we have prescribed for the Millennium Challenge Account, i.e., a renewed and strengthened concern with progress toward good governance as a prerequisite for economic development assistance. Moreover, where conditions are favorable, our economic development assistance in Africa will emphasize the vigorous promotion of agriculture. Agriculture is the backbone of Africa’s economies and must be revitalized to reduce hunger and to lift the rural majority out of poverty.

In addition, we will emphasize fighting corruption and President Bush’s new initiative on basic education. Moreover, we want to emphasize methods that directly empower individuals – methods such as micro lending, a superb vehicle for increasing the economic participation and security of the working poor. The people of Africa in particular know that in many cases their governments do not deliver the health care, transportation and communication networks, education and training, and financial investment needed to create 21^st century economies. They know that this must change if there is to be hope of economic success -- of job creation, private investment, stable currencies, and economic growth.

We also know and more and more of Africa’s people are coming to know that none of this economic success is possible if we do not meet the challenge of HIV/AIDS. That is why I am pleased to report that pledges to the Global Fund to Fight AIDS, Tuberculosis, and Malaria now exceed $1.7 billion and continue to grow. The Fund is meeting at Columbia University in New York this week and is expected soon to announce grants to partnerships in affected countries.

We want this Global Fund to complement national, bilateral, and other international efforts to fight these dreaded diseases. Strong congressional support will ensure that the United States remains the leader in this global humanitarian and national security effort.

In our own hemisphere, Mr. Chairman, we have met with considerable success. Highlights have been the President’s warm relationship with Mexico’s President Fox, the Summit of the Americas in Quebec, and the signing of the Inter-American Democratic Charter in Lima, Peru. Now our focus is to create a Free Trade Area of the Americas – including, as President Bush has described, not only our current negotiations with Chile but also a new effort to explore the concept of a free trade agreement with Central America.

To be sure, there are some dark clouds moving in over Latin America, and one of the darkest looms over Colombia where a combination of narco-terrorism and festering insurgency threatens to derail the progress the Colombians have made in solidifying their democracy.

Our Andean Regional Initiative is aimed at fighting the illicit drugs problem while promoting economic development, human rights, and democratic institutions in Colombia and its Andean neighbors. Intense U.S. support and engagement has been the critical element in our counterdrug successes in Bolivia and Peru and will continue to be critical as we help our regional partners strengthen their societies to confront and eradicate this threat to their own democracies and to America’s national security interests.

But, Mr. Chairman, our counterdrug and development efforts in Colombia are not enough. It has become increasingly clear that our goal with respect to Colombia must be to help that democratic nation preserve and strengthen its democracy while ensuring greater respect for basic human rights. An end to the present conflict – peace – is essential to our accomplishing that goal. We must work with the Colombians to create the conditions where peace is possible.

To that end, we are seeking the necessary authorities to provide enhanced intelligence sharing, additional training, and more equipment – all geared toward a security mission that is broader than the current counterdrug focus. We are not talking about U.S. troops participating in combat operations; we are talking about helping the Colombians secure their state and their democracy. We are talking about helping the Colombians fight terrorism.

President Bush framed the issue in his meeting with President Pastrana last week. The President made his number one priority very clear: "My biggest job now," he said, "is to defend our security and to help our friends defend their security against terror."

We have made it clear and will continue to make it clear that the Government of Colombia must also fully commit to this task. No amount of additional U.S. assistance will be sufficient to turn the tide unless Colombia dedicates more of its own resources to this task and commits decisively to a policy of establishing state authority and effective security for its people.

I also want to emphasize that we work with the Colombians to ensure respect for human rights. There is no trade off between our work with Colombians on human rights and elimination of the terrorist threat. Nor are we seeking to change the caps on the number of U.S. military and civilian personnel we can have in Colombia at any given time. Both of these concerns are still very much a part of the pattern of our efforts with this struggling democracy.

Mr. Chairman, a dark cloud seemed recently to pass over Venezuela as well – a cloud that had been building for some time as President Chavez became less and less responsive to growing opposition to his policies, leading to increasing polarization of Venezuelan society. We hope that the most recent tumble of events in that country foretell a President much more cognizant of the demands of democracy. As President Bush said last week, "…if there’s lessons to be learned, it’s important that [Chavez] learn them." The President also said that it is "very important for Chavez to embrace those institutions which are fundamental to democracy."

The Organization of American States (OAS) agreed on April 18 to help Venezuela regain its democratic footing. We believe there is also a constructive role for our own Congress – to urge the Venezuelan government to welcome OAS engagement and to encourage the opposition to join the national dialogue.

Elsewhere in Latin America, Mr. Chairman, we have begun new initiatives.

President Bush’s Third Border Initiative (TBI) seeks to broaden our engagement with our Caribbean neighbors based on recommendations by the region’s leaders on the areas most critical to their economic and social development. The TBI is centered on economic capacity building and on leveraging public/private partnerships to help meet the region’s pressing needs.

In addition to its economic provisions, the Third Border Initiative includes 20 million dollars for HIV/AIDS education and prevention efforts. This represents a two-fold increase in U.S. HIV/AIDS assistance to the region in just two years.

As you are aware, Mr. Chairman, our ties to the Caribbean region are as much cultural and human as they are economic and political. The countries of the Caribbean attract millions of American visitors every year and the region is our sixth largest export market. Large numbers of Caribbean immigrants have found their way to America, including, I am proud to say, my Jamaican forebearers. Here people from the region have found freedom and opportunity and have added something wonderful to the great American cultural mix. But our primary goal must be to help ensure that the peoples of the Caribbean find new opportunities for work, prosperity and a better life at home.

At the end of the day, it is difficult to exaggerate what we have at stake in our own hemisphere. Political and economic stability in our own neighborhood reduces the scale of illegal immigration, drug trafficking, terrorism, and economic turmoil. It also promotes the expansion of trade and investment. Today, we sell more to Latin America and the Caribbean than to the European Union. Our trade within NAFTA is greater than that with the EU and Japan combined. We sell more to MERCOSUR than to China. And Latin America and the Caribbean is our fastest growing export market. Clearly, the President is right to focus attention on this hemisphere and we will be working hard in the days ahead to make that focus productive, both economically and politically.

In that regard, we have a very positive vision for a future Cuba – a Cuba that is free, with a strong democratic government that is characterized by support for individual civil, political, and economic rights. A Cuba in which people are free to choose their own leaders and to pursue their own dreams. And a Cuba that is a good neighbor to all in the Caribbean and in the hemisphere at large. That such a Cuba can exist we have never doubted – just look at the contributions Cuban-Americans have made in our own country and you understand immediately what such people are capable of.

Mr. Chairman, set against the past year’s foreign policy successes is not just the conflict in Colombia in our own hemisphere, but several challenges elsewhere. In this regard, there is no question that the situation between Israel and the Palestinians is at the top of our list.

I have just returned from the Middle East. I met with key leaders in Morocco, Egypt, Syria, Jordan and Lebanon, as well as with Crown Prince Abdullah of Saudi Arabia -- and of course I met with Prime Minister Sharon and Chairman Arafat.

I went to the Middle East because the President asked me to travel to a region in turmoil. Recent events have taken an enormous toll in lives lost, families shattered, economic activity frozen and mounting humanitarian distress.

An additional cause of tension is the ongoing threat posed by attacks by Hezbollah and others across the United Nations’ recognized Blue Line. It was for that reason I traveled to Beirut and Damascus to underscore the President’s strong message to all parties to exercise restraint.

In my consultations with our international partners during the ten days of my travel, and with our Arab friends and Israelis and Palestinians, I listened carefully and I probed hard. I found broad support for a comprehensive strategy as a way forward.

The Madrid Quartet meeting, which I mentioned earlier, resulted in a strong declaration endorsing this comprehensive approach. In that declaration the United States, the United Nations, the European Union and the Russian Federation were united in this endorsement.

There are three critical elements in this comprehensive strategy: first, security and freedom from terror and violence for Israelis and Palestinians; second, serious and accelerated negotiations to revive hope and lead to a political settlement; and third, economic humanitarian assistance to address the increasingly desperate conditions faced by the Palestinian people.

Confronting and ending terrorism are indispensable steps on the road to peace. In my meetings with Chairman Arafat I made it clear that he and the Palestinian Authority could no longer equivocate. They must decide as the rest of the world has decided that terrorism must end. Chairman Arafat must take that message to his people. He must follow through with instructions to his security forces. He must act to arrest and prosecute terrorists, disrupt terrorist financing, dismantle terrorist infrastructure and stop incitement.

Prime Minister Sharon stated his intention to complete Israel's withdrawal from the areas that it had occupied. He provided me with a time-line for the withdrawal. I stressed to the Prime Minister the urgency of completing withdrawal and was assured of real results in the specified days. I recognized the particular circumstances at the Church of the Nativity in Bethlehem and the Presidential compound in Ramallah, and I emphasized the importance of their urgent non-violent resolution.

Improvement in the security situation, if it is achieved, must be linked to the second point: determined pursuit of a political solution. There can be no peace without security, but there can also be no security without peace. Only a negotiated settlement can resolve the conflict between Israelis and Palestinians. We must find a way to bring together traditional elements such as United Nations Security Council Resolutions 242 and 338, with new initiatives, such as my Louisville speech last November, UN Resolution 1397, and the Arab League’s endorsement a month ago of the initiative of Saudi Crown Prince Abdullah.

A number of the leaders with whom I spoke during my travel have expressed interest in convening a conference on the Middle East in the near future, a conference with international backing. As they have suggested, its purpose would be to restore hope, reaffirm the urgency of a comprehensive settlement, and resume direct negotiations in order to achieve that comprehensive settlement.

At the same time we explore this initiative and other ideas to address the political issues, the international community must address the dire humanitarian problems as well as the long-term economic needs of the Palestinian people. During my visit to Jerusalem, I was pleased to announce that the United States would contribute an additional 30 million dollars in support of the United Nations Relief and Works Agency and its programs in providing health, education, relief and social services to Palestinian refugees. This is beyond the 80 million dollars we already provide annually. We are augmenting this with emergency assistance to deal with the special conditions in Jenin refuge camp – tents and equipment to purify water and prevent the spread of disease.

International donors will meet in Norway later this month to increase assistance to the Palestinian people at this time of exceptional need. Also, international humanitarian and aid agencies must have the freedom and access that they need to do their jobs.

So this is the comprehensive approach I believe we must pursue. I left Assistant Secretary of State Bill Burns in the region to follow up on my visit. As circumstances warrant, the President is prepared to send DCI Tenet in the near future, to work with the parties to resume security cooperation between the parties. Mr. Tenet has experience in this from last year -- experience in these kinds of organizations and activities -- that I think will once again benefit both parties.

Moreover, I plan to return to the region to move ahead on all aspects of our comprehensive approach.

Mr. Chairman, For the Palestinian people and leaders of the Palestinian Authority, the question is whether violence and terrorism can be renounced forever and whether their sights can be set squarely on peace through negotiations.

For the people and leaders of Israel, the question is whether the time has come for a strong, vibrant State of Israel to look beyond the destructive impact of settlements and occupation, both of which must end, consistent with the clear positions taken by President Bush in his April 4th speech. Israelis should look ahead to the promise held out by the region and the world of a comprehensive, lasting peace.

For the Arab peoples and their leaders, the question is whether the promise and vision of Crown Prince Abdullah’s initiative can be transformed into a living reality. It is important that artificial barriers between states fall away, and distorted and racist images disappear from the media and from public discourse.

For the people and leaders of the international community, the question is how we can help both sides solve the deep problems they face.

These are the challenges that we all face. President Bush has directed his administration to do what is necessary to stop the violence, encourage efforts toward peace, and restore the economic foundations of the region. Our fervent hope is that Israelis, Palestinians, our Arab friends, and the international community will also rise to this challenge.

Mr. Chairman, with regard to other challenges in this region, Iraq comes next on our list. That country remains a significant threat to the region’s stability. We are working at the UN and elsewhere to strengthen international controls on Iraq. In the last year, we successfully stopped the free fall of sanctions and began to rebuild United Nations Security Council consensus on Iraq. The UNSC unanimously adopted resolution 1382 in November, committing itself to implement the central element of "smart sanctions" by the end of next month – and I believe we are going to make it.

This central element, or Goods Review List (GRL), identifies materials UNSC members must approve for export to Iraq and ensures continued supervision and control over dual-use goods. Its implementation will effectively lift economic sanctions on purely civilian trade and focus controls on arms, especially WMD. This will further strengthen support for UN controls by showing the international community that Saddam Hussein, not the UN and not the U.S., is responsible for the humanitarian plight of the Iraqi people. We have achieved agreement with the Russians on the substance of the GRL and are now finalizing processes for implementing the list and working on a UNSC Resolution for adopting it.

At the end of the day, we have not ruled out other options with respect to Iraq. We still believe strongly in regime change in Iraq and we look forward to the day when a democratic, representative government at peace with its neighbors leads Iraq to rejoin the family of nations.

With regard to other challenges, we have a long-standing list of grievances with Iran, from concerns about proliferation, to that country’s continued sponsorship of terrorism, to Iranian meddling in Afghanistan in a way unhelpful to the Interim Authority in Kabul. Of late, we have been very clear in communicating to Teheran that its support for terrorism must stop and that what is needed in Afghanistan is help, not meddling.

If Iran renounced terrorism, if it supported the Interim Authority, I am convinced that we would be able to talk to Iran, that we would be able to have a reasonable conversation with Iranian leaders. With respect to the situation in Afghanistan, for example, I believe we can demonstrate to them that it is not in their interest to destabilize the government that they helped to create in Bonn. The other issues will be more difficult; but I do believe constructive talks with Iran on Afghanistan are possible.

Mr. Chairman, let me now turn to Afghanistan and the war on terrorism.

In January, I was in Tokyo to join the European Union, Saudi Arabia, and Japan in hosting the Afghan Donor Conference. The conference helped to ensure that a wide range of countries will help the Afghans rebuild their country. The United States pledged almost $297 million at the conference and others pitched in accordingly. The total pledged at this point is around $4.5 billion with more than $1.8 billion for the first year.

But the heavy lifting with respect to Afghanistan is only just beginning. We have helped the Afghans remove the oppressive Taliban regime from their country. We have destroyed the al-Qaida network in Afghanistan, with American, British, and other troops fighting the remnants as we speak. We have made possible the delivery of humanitarian aid, including massive amounts of food. We have avoided the wholesale starvation that many predicted. Moreover, we have helped the people of Afghanistan establish a multi-ethnic Interim Authority in Kabul, led by Chairman Karzai. One of its ultimate goals is to oversee an agreed process, now begun with district selections of representatives who will help determine the composition of the Loya Jirgas that will lead to a broad-based Afghan government – one that represents all the people of the country, people of every background and region, women as well as men. In June the Emergency Loya Jirga will complete the process of creating a transitional administration, the next step toward our ultimate goal of a fully democratic Afghanistan.

Many of our key allies and partners are contributing to the International Security Assistance Force in Kabul to help ensure a secure environment for Mr. Karzai to build a new Afghanistan. We want to do everything possible to prevent the rise of any alternative power to the Interim Authority and Transitional Administration, until a permanent government can be established and begin to take care of this challenge on its own.

A budget for the Interim Authority has been established and funded. The Authority is beginning to meet payrolls. Police and other Afghan officials are being paid. Schools are opened. Reconstruction has begun, to include the beginning of a new national police and military. Roads are being opened. The UN, for example, recently declared that the roads from Islamabad to Kabul, Kabul’s main external lifeline, and the road from Kabul to Kandahar, were open to unaccompanied UN-employee traffic. In other words, UN employees were free, and it was considered safe for them, to travel unaccompanied on those roads. Refugees are returning in record numbers. And indeed, the former King of Afghanistan returned for the first time in 30 years last week.

Much remains to be done and admittedly a lot of what remains will be difficult to accomplish. But we believe that at long last Afghanistan is on a positive track.

Mr. Chairman, I know that you are aware of the nature of the challenge we confront in Afghanistan. You understand what is needed to reconstruct this country and that foremost of all what is needed is a long-term commitment by the international community. If we can ensure such a commitment, and if we can achieve proper accountability in the use of the donor funds, then I believe there is a good chance of making significant progress in bringing a new future to Afghanistan – and ending the days of warlordism and political chaos that bred the Taliban and made a fertile ground for terrorists.

And as reconstruction begins in Afghanistan, the war against terrorism continues. As President Bush said in his State of the Union Address, "What we have found in Afghanistan confirms that, far from ending there, our war against terror is only beginning." The administration is working together in new ways never before envisioned. And that’s what this effort is going to require. FBI, CIA, INS, Treasury, State, the Attorney General and Justice Department, and others, are all coming together. This campaign is transnational, cross-border, even global in a way we have never contemplated.

We are operating in several areas right now. For example, in Yemen we are working with President Ali Abdallah Salih to uproot the al-Qaida network there. In the Philippines, we are working with President Arroyo to assist that country in combating its terrorists, the Abu Sayyaf – who as you know hold two American citizens as hostages.

We are also deploying a small force to Georgia to assist President Shevardnadze in getting a handle on a tough area in his country – an area that has spawned and harbored terrorists in the past. These troops will help train and equip Georgian forces in counterterrorism techniques and methods.

With respect to any new major use of military force in the war on terrorism, we have not made any recommendation to the President and the President has made no decision as yet with respect to such use of force. But there are many other actions that are taking place – actions of a law enforcement, political, diplomatic, financial, and intelligence-sharing nature.

Mr. Chairman, as I said earlier a sizable portion of the President’s budget request is dedicated to these counterterrorism efforts, as you will see as I turn to the specific priorities of our budget request for Foreign Operations.

The President’s FY 2003 request for Foreign Operations is a little over $16.1 billion. These dollars will support the continuing war on terrorism, the work we are doing in Colombia and the Andean region at large, our efforts to combat HIV/AIDS and other infectious diseases, essential development programs in Africa, the important work of the Peace Corps and the scaling up of that work, and our plan to clear arrearages at the Multilateral Development Banks, including the Global Environment Facility.

To fight terrorism as well as alleviate the conditions that fuel violent extremism, we are requesting an estimated $5 billion. In addition to the initiatives outlined in our budget request for the State Department and Related Agencies, this funding includes:

• Foreign assistance – $3.6 billion for economic and security assistance, military equipment, and training for front-line states and our other partners in the war on terrorism. This includes --

• $3.4 billion from Foreign Operations accounts such as the Economic Support Fund, International Military Education and Training, Foreign Military Financing, and Freedom Support Act.

• $88 million for programs in Russia and other states of the former Soviet Union to reduce the availability to terrorists of weapons of mass destruction. Ongoing programs engage former weapons scientists in peaceful research and help prevent the spread of the materials expertise required to build such weapons.

• $50 million to support the International Atomic Energy Agency (IAEA) in activities designed to counter nuclear terrorism and implement strengthened safeguards; and $15 million to allow us to respond quickly and effectively to unanticipated or unusually difficult non-proliferation projects or opportunities.

• $69 million for counterterrorism engagement programs, training, and equipment to help other countries fight global terror, thereby strengthening our own national security.

• $4 million for the Treasury Department’s Office of Technical Assistance to provide training and other necessary expertise to foreign finance offices to halt terrorist financing.

And Mr. Chairman, in the FY 2003 budget request there is approximately $140 million available for Afghanistan, including repatriation of refugees, food aid, demining, and transition assistance. I know that President Bush, the Congress, and the American people recognize that re-building that war-torn country will require additional resources and that our support must be and will be a multi-year effort. Moreover, as I said earlier, we do not plan to support reconstruction alone and we will seek to ensure that other international donors continue to do their fair share.

At the Virginia Military Institute last week, President Bush made very clear what he wants to do for Afghanistan. The President told his audience of eager cadets that one of their own, General George C. Marshall, had helped ensure that a war-ravaged Europe and Japan would successfully recover following WWII. Now, today, Europe and Japan are helping America in rebuilding Afghanistan. The President said that "by helping to build an Afghanistan that is free from evil and is a better place in which to live, we are working in the best traditions of George Marshall." And so we are.

It will be a long, hard road. We know it. But like General Marshall we also know that we must do it. And the international community knows that it must help.

We are requesting $731 million in FY 2003 for the multi-year counter-drug initiative in Colombia and other Andean countries that are the source of the cocaine sold on America's streets. ACI assistance to Andean governments will support drug eradication, interdiction, economic development, and development of government institutions. In addition, the Colombians will be able to stand up a second counterdrug brigade. Assisting efforts to destroy local coca crops and processing labs there increases the effectiveness of U.S. law enforcement here.

In addition to this counterdrug effort, Mr. Chairman, we are requesting $98 million in FMF to help the Colombian government protect the vital Cano Limon-Covenas oil pipeline from the same foreign terrorist organizations involved in illicit drugs – the FARC and the ELN. Their attacks on the pipeline shut it down 240 days in 2001, costing Colombia revenue and disrupting its economy, and causing serious environmental damage. This money will help train and equip the Colombian armed forces to protect the pipeline. These funds begin to apply the policy change I referred to earlier; that is, the shift from a strictly counterdrug effort to a more broadly based effort targeted at helping Colombia fight the terrorists in its midst as well as the drugs.

Global Health and HIV/AIDS

In FY 2003, we are requesting $1.4 billion for USAID global health programs. Of this amount, we are requesting $540 million for bilateral HIV/AIDS prevention, care, and treatment activities, and $100 million for the Global Fund to Fight AIDS, Tuberculosis, and Malaria, to which I referred earlier. All of this funding will increase the already significant U.S. contribution to combating the AIDS pandemic and maintain our position as the single largest bilateral donor. I should add that the overall U.S. Government request for international HIV/AIDS programs exceeds one billion dollars, including $200 million for the Global Fund.

All of you heard the President’s remarks in his State of the Union address with respect to the USA Freedom Corps and his objective to renew the promise of the Peace Corps and to double the number of volunteers in the Corps in the next five years. We have put $320 million for the Peace Corps in the FY 2003 budget request. This is an increase of over $42 million over our FY 2002 level. This increase will allow us to begin the scaling up that the President has directed. We intend that the Peace Corps will open programs in eight countries, including the reestablishment of currently suspended posts, and place over 1,200 additional volunteers worldwide. By the end of FY 2003 the Peace Corps will have more than 8,000 volunteers on the ground.

MDB Arrears

The FY 2003 request includes an initiative to pay one third of the amount the United States owes the Multilateral Development Banks (MDBs) for our scheduled annual commitments. With U.S. arrears currently now totaling $533 million, the request would provide $178 million to pay one third of our total arrears during the fiscal year. The banks lend to and invest in developing economies, promoting economic growth and poverty reduction and providing environmental benefits. We need to support them.

Mr. Chairman, in addition to what I have given you with respect to the President’s budget request for FY 2003, I want to give you the main priorities for our supplemental request for FY 2002.

But first let me tell you how grateful we are at the Department for the efforts of this subcommittee and the House subcommittee to get us the $1.5 billion in crucial Emergency Response Fund foreign operations funding to address the immediate post-September 11 needs. That was just the start though.

We are asking for $1.6 billion supplemental funding for FY 2002. This amount includes $322 million for the Department. These dollars will address emergent building and operating requirements that have arisen as a result of the September 11 terrorist attacks, including reopening our mission in Kabul, Afghanistan; reestablishing an official presence in Dushanbe, Tajikistan; and increasing security and personnel protection at home and abroad.

That leaves about $1.3 billion for foreign operations. These funds – added to the request we have made for FY 2003 for the Front Line States (FLS) – are primarily to:

• Deter and prevent acts of international terrorism
• Provide vitally needed military equipment, training and economic assistance to our friends and allies
• Expand respect for human rights and judicial reform in the FLS
• Provide a significant and immediate impact on displaced persons in the FLS
• Support civilian reintegration of former combatants and reestablish law enforcement and criminal justice systems
• Provide economic and democracy assistance, including help with political development, health care, irrigation and water management, media development, community building and infrastructure improvements, and economic and civil society reform.

In addition, we have requested legislative authority in two areas. First, authority that will facilitate the provision of Cooperative Threat Reduction and Title V Freedom Support Act assistance. This assistance has been critically important in the dismantlement and non-proliferation of WMD material and expertise in the New Independent States. Second, as I referred to earlier, we are requesting expanded authorities to allow support for the Government of Colombia’s unified campaign against drugs, terrorism, and other threats to its national security.

In sum, Mr. Chairman, these supplemental dollars for foreign operations in FY 2002 will be directed at draining the swamp in which terrorists thrive and at insuring the long-term success of Operation Enduring Freedom.

Mr. Chairman, as I told this committee last year, the conduct of the nation’s foreign policy suffered significantly from a lack of resources over the past decade. I have set both my CEO hat and my foreign policy hat to correct that situation. But I cannot do it without your help and the help of your colleagues in the Senate and across the capitol in the House.

I ask for your important support in full committee and in the House as a whole, both for the $8.1 billion we are requesting for the Department and related agencies and for the $16.1 billion we are requesting for foreign operations. In addition, I ask for your help with the supplemental request for FY 2002. With your help, and the help of the whole Congress, we will continue the progress we have already begun.