President's FY 2007 Budget Request

SECRETARY RICE: Thank you very much, Mr. Chairman, and indeed I will submit a full statement for the record rather than read the entire thing so that we can have maximum time for discussion.

I little over a year ago, I was sworn in as Secretary after confirmation and a lot has happened in that period of time. I want to just note that the President's budget, the '07 budget, is in support of a foreign policy that is devoted to the spread of liberty and democracy as the best antidote to the ideologies of hatred that feed the kind of terrorism that we have experienced and that many others around the world have experienced as well.

Democratic processes must be supported. This is a period in which people are gaining their voice and in which we need to support them as they move toward the construction of stable democracies. Therefore you will see in this budget request continuing support for the new democracies of Iraq and Afghanistan.

We have had, of course, in the Palestinian territories a situation in which free and fair elections --elections that we do believe were free and fair -- Hamas, which is a terrorist group by U.S. definition, was elected. And I want to assure members of the Committee that we are assessing our programs of support to the Palestinian people. I think we will want to continue humanitarian support to the Palestinian people but I want to assure you that we are doing everything possible to make certain that none of our funding would of course be able to go to Hamas, which is a terrorist organization.

We have criteria that the Quartet has put forward in terms of the recognition of Israel, in terms of renouncing terrorism, disarmament, that gives Hamas a strategic choice that it must make. But I just want to assure you that we are reviewing our programs so that no money of the United States taxpayer would fall into the hands of Hamas.

We have had not only major changes in the Middle East but of course in both Liberia and Haiti. Free and fair elections have been held. There is still a round to go in Haiti. But in Liberia the United States, I think, has much to be proud of in that a few years ago we were looking at young men -- very young men, 13, 14-year-olds -- on the front pages of the newspapers with AK-47s and we now have in Liberia the first woman elected president on the continent of Africa. And we will want to support Liberia and Haiti in their transitions to democracy and stability.

We have had other major challenges this year and other major opportunities. The challenge of Iran has become more acute as it has become clear that while the international community is becoming ever more unified around the proposition that Iran must not be allowed to get a nuclear weapon, the Iranians have become ever more defiant. I think that that has to spotlight not just on Iraq's nuclear program, but also on Iran's support for terrorism, the kind of central banker of terrorism in the Middle East, Iran's activities in southern Iraq, Iran's activities in Lebanon. It is a destabilizing presence throughout the region and, as a result, the United States must be resolved to challenge Iran in these policies that are harmful to our interests.

As a part of that effort, we of course are working with the international community to bring Iran's case to the Security Council in terms of its nuclear policy but also to reach out to the Iranian people because we want to be very clear that our problem is with the Iranian regime, not the with Iranian people. And we have, therefore, as I testified earlier today, in supplemental appropriations put forward a request for money to reach out to the Iranian people with broadcasting, with educational and cultural activities, and with support for non-governmental organizations.

We have had other challenges. The challenge of Sudan remains one that we are focused on. Bob Zoellick, the Deputy Secretary, is this week in Europe rallying support to bring an AU decision to blue-hat the current mission in Sudan so that we can better control the situation in Darfur with a more robust security presence. And the President has made clear that he would hope, too, that NATO would play a role in terms of logistics and support to that operation.

Opportunities have arisen also in this period of time and I would just draw attention to the President's most recent trip to South Asia. South Asia is one of those regions that a few years ago seemed like it was doomed to be a region of conflict. It was of course Afghanistan, which was under the Taliban regime, the dictatorship of the Taliban; Pakistan, which had a relationship with the Taliban, one of the few countries to actually recognize Taliban, and where I think the Pakistanis themselves would agree that extremism had the upper hand. I can remember, too, on Christmas Day sitting on the telephone as my relatives waited to have dinner with Secretary Powell and with Secretary Straw in Great Britain and my counterpart at that time, David Manning, trying to prevent a war between India and Pakistan, and that next June while we were in Europe trying to prevent a war between India and Pakistan.

Today, that relationship is unrecognizable, with Pakistan and India engaged in what they call a comprehensive dialogue. And so if you look at the area that is Central Asia -- Afghanistan, Pakistan, India -- this is a region that was once called by a famous American academic an "arc of crisis" now has the possibility to be an arc of opportunity. And it is in that context that the President went to South Asia, where we enjoy excellent relations with both India and Pakistan, where we have signed or we have agreed with the Indians to a landmark nuclear deal that I will, of course, be talking more and more to members of Congress about, because in order to engage in civil nuclear cooperation with India we will require some changes to American legislation, to U.S. legislation.

But I just want to say that the civil nuclear agreement which would allow us to bring India into the nonproliferation mainstream by having an India-specific agreement with the IAEA, something that Dr. ElBaradei of the IAEA very much supports, would also give India access to civil nuclear technology and perhaps most importantly to civil nuclear energy, because with the growing economy in this great multiethnic democracy which can be a force for stability in the region, we want to make sure that they are not, like everyone else, just in search of hydrocarbons and the instabilities that that brings.

Finally, if I might just mention that we have been making a lot of changes also in the Department of State and the budget supports many of those changes. I've talked about transformational diplomacy, the notion that American diplomacy must be in partnership not in paternalism with the countries that we are trying to help, but that it is our global responsibility to help the development of well-governed democratic states around the world, because if there are well-governed democratic states we will be safer.

In order to do that, we have identified global repositioning efforts that are repositioning our diplomatic personnel out of -- frankly, out of places like Europe into places that need the help. India will be a big recipient. China will be a big recipient. It is most likely that we will do -- we will indeed commit to a second round of repositioning. I have asked in the budget for 100 new positions to deal with very high-value, high-importance areas for us, areas that are changing very rapidly, but I felt that coming forward with the request for new positions, I also needed to make a commitment to repositioning. And I want you to know that we will continue to do that.

Finally, we have made some changes, as many changes as I can within my authorities, concerning foreign assistance to better align USAID and State in terms of our priorities for development assistance. We want to alleviate poverty. We want also to create stable and capable governments that are able to deliver for their people. We believe that the better alignment through a new Director for Foreign Assistance who is concurrently, if he is confirmed, the USAID Administrator, will allow us to exercise better stewardship over the considerable investment that the American people are making through their foreign assistance dollars to be more effective, to diminish redundancy and to help the most vulnerable people and the most vulnerable states to reach a goal of stability and democratic development.