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U.S. Assistance to South Asia: Is There a Strategy To Go With All That Money?

Richard Boucher, Assistant Secretary for South and Central Asian Affairs
Statement before the Middle East and South Asia Subcommittee of the House Foreign Affairs Committee
Washington, DC
May 14, 2008

[Remarks As Prepared]

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Chairman Ackerman, thank you for the opportunity to address you and the Subcommittee today on the President’s Fiscal Year 2009 request for assistance to the countries of South Asia.

I’m pleased to be testifying today with Mark Ward, the Senior Deputy Assistant Administrator for Asia at the U.S. Agency for International Development. Our two Bureaus are absolute partners in the planning and delivery of foreign assistance in the region, so I suspect we’ll be repeating each other a bit today.

As you know, Mr. Chairman, September 11, 2001 cast a spotlight on South and Central Asia for the United States and many other countries around the world. Our engagement there suddenly became more critical to our national security than perhaps anywhere else. In my opinion, that remains true today.

South Asia is a part of the world where we see extremely difficult challenges: poverty, disease, terrorism, drugs, weak governance, corruption and natural disasters to name some of them. We also have great opportunities, with a population of over a billion people, most of them young and increasingly connected to each other and the rest of the world. The capabilities, resources and ideals of the United States uniquely position us to help transform the region into one rooted in democratic stability and committed to fighting extremism.

While the needs are near infinite, fiscal realities dictate that we, as policy makers, think strategically, allocate strategically and work with other countries to ensure that we pursue those things that contribute most to the safety, stability and prosperity of the people of the region.

The Strategic Vision

The United States has a consistent policy basis throughout the region: promoting democratic stability as the base from which to counter extremism and terrorism. We do this by supporting efforts to build democratic institutions. We do this by supporting the foundations of democracy: education, rule of law, access to information, technology. We do this by supporting the opportunities all people want, in education, health care and the economy. And, we do this by supporting those institutions that provide security, fight terror and fight drugs.

While these efforts manifest themselves in different ways through different programs in different countries, what we pursue is not haphazard and it is not coincidence. It’s considered strategic policy. And, in South Asia, we’re pursuing it with the most important things we have: democratic ideals, money and manpower.

Supporting Efforts to Build Democratic Institutions

All of the countries in South Asia are working towards becoming stable democracies, but the great majority of them have not yet arrived. Across the region, our assistance is geared towards increasing the capacity of governments to deliver basic services, security, rule of law, and economic opportunity in a manner that respects human rights and reflects the principles of democratic, good governance. When governments deliver in a transparent and effective manner, the space for extremists and insurgents to operate with impunity closes.

Promoting good governance and institutions figures prominently in our budgets in Afghanistan, where we are working with a particular focus at the local and district level. Our efforts are closely coordinated with the Afghan Government, who took the initiative this past summer to actively improve its ability to provide for its people with the establishment of the Independent Directorate for Local Governance. Money requested in the 2009 base budget will bolster this Afghan initiative by supporting this office’s ability to empower local officials and enhance their ability to serve their people.

In addition to tying people to their government through the provision of vital services, citizens must also be able to choose their government in free and fair elections. In Afghanistan, we attach great importance to the upcoming presidential and parliamentary elections as an essential part of the transition to a full democracy. Our Fiscal Year 2008 supplemental and 2009 budget requests include $193 million for upcoming presidential, parliamentary, and provincial elections with an additional $113 million in 2009 supplemental bridge funding for municipal and district-level elections.

We’ve also worked very closely with Pakistan and are focusing our assistance on helping the country make a smooth transition to elected government. The recent election outcome in Pakistan illustrated the Pakistani people’s commitment to democracy. Their choosing of a government comprised of moderate political parties also demonstrates a desire to reject violent extremists. The United States must help the Pakistani people seize the opportunities that these successful elections now present. Requests in the 2009 base and the 2009 bridge supplemental will fund democracy and governance programs, including programs that seek to strengthen the judiciary.

In anticipation of a transition to a democratic government in Bangladesh following elections scheduled for December, our 2009 budget requests $21 million in support of democracy and governance programs, more than double the 2008 enacted level. U.S. assistance will promote comprehensive anti-corruption reforms; strengthen the government institutions, particularly at the local level; and support democratic political party development.

Supporting Opportunities and the Foundations of Democracy

While democratic institutions are extremely important, stability can really only be achieved when the basic needs of the region’s most vulnerable citizens are met. Poverty is a breeding ground for political instability and the margins of society are frequently the most susceptible to extremist ideology. Our health, education and economic programs seek to improve the quality of life for the most vulnerable people. Our 2009 base request includes $283 million for health and $222 million for education in South Asia.

In India, we continue to strengthen our partnership by helping the Indians address the health needs of their most vulnerable people, including $21 million for HIV/AIDS projects in 2009. I would note that our assistance request for India has decreased slightly in Fiscal Year 2009 in recognition of the continuing growth of the Indian economy and the ability of the government to fund more of these important programs.

Education is another key component to improving quality of life and one of the most important building blocks for a vibrant economy. In Pakistan, we are requesting $117 million for basic education and $47 million for higher education in the 2009 base budget. Improving Pakistan’s educational system is key to its long-term prosperity, stability and democracy and provides an alternative to extremism. Our assistance will support Pakistan’s education reform in such critical areas as teacher training and improving access for girls and women. It will build schools in the Tribal Areas, provide scholarships and foster science and technology cooperation between the U.S. and Pakistan.

In addition to health and education, alleviating poverty through economic opportunity and growth is equally as important in encouraging a stable region. Our request for economic growth funding is as robust as that for health and education. Across the region we are promoting improvements to infrastructure, including roads, communications and energy solutions crucial to economic development. We are also working with governments to implement key macroeconomic reforms and adopt growth promoting trade and investment policies.

The Reconstruction Opportunity Zone legislation recently introduced to Congress would authorize President Bush to establish Reconstruction Opportunity Zones in Afghanistan and the border regions of Pakistan and would enable non-trade sensitive exports such as rugs, gemstones and handicrafts to enter the U.S. duty-free. If passed by Congress, these Zones would compel private sector investment and provide a source of employment for the Pakistan border and Afghan populations who might otherwise be targeted for terrorist recruitment.

To augment individual country assistance, we are requesting a substantial funding increase to our regional account. Our regional assistance programs seek to take advantage of synergies amongst countries to broadly promote the development of fully sovereign, stable, democratic states in South and Central Asia that are integrated into the world economy and cooperating with one another, the United States and its partners. We find that some of the most difficult issues facing our countries are indeed found across the region and can be better tackled through cooperation with neighbors.

Improving Security and Counterterrorism Capability

Insurgents in Afghanistan and in Pakistan’s frontier region continue to pose a serious threat to regional stability and to the safety of the United States and the rest of the world. Ensuring that Afghanistan and Pakistan have the capability to maintain their own security continues to be a primary objective. Thus, our 2009 base budget requests increased funding for programs aimed at helping governments build and sustain their own capacity for providing security to their people.

In Afghanistan, the increase will fund training for local forces in counterterrorism methods and best practices and deepen our support of Provincial Reconstruction Teams.

In Pakistan, our 2009 base request of $300 million and an additional $100 million requested in the 2009 bridge supplemental will continue to support Pakistan’s security force modernization, enhance the country’s counterinsurgency and counterterrorism capabilities, and provide equipment and training in support of the Security Development Plan for the Federally Administered Tribal Areas and surrounding agencies. Equipment upgrades and acquisitions will increase the capacity of Pakistan to secure its borders and fight the insurgency. This funding will also support expanding and upgrading the capabilities of the Frontier Corps to become a viable local force for securing the western border region in conjunction with the Pakistani military. Equipping and training the Pakistani military is an important part of building a strong and lasting relationship with Pakistan and recognizing their role as a regional ally.

Our counter-narcotics efforts continue to play a significant role in countering insurgency and creating stability in the region, particularly in Afghanistan where poppy cultivation fuels corruption and narcotics addiction, and is a source of financing for criminal and insurgent groups. This year we expect that about 24 provinces of 34 will be poppy free or have “low” poppy cultivation. This is a significant achievement; although overall poppy cultivation will likely remain the same or decrease slightly. Where we can properly implement our strategy, it is working. We need to redouble our efforts in southern and western Afghanistan which suffer from poor security conditions and poor governance. Our request for $313 million in the 2009 base and another $185 million in the 2009 bridge supplemental will fund our comprehensive five-pillar strategy involving public information, alternative development, law enforcement, interdiction, and eradication.

Budget Request Overview

We have made progress on a broad range of fronts in South Asia. Particular achievements include economic growth, strengthened local and national institutions, and successes in countering insurgents. But that’s not enough and important challenges remain, most prominently in the fields of counter terrorism, improving governments’ capacity to provide basic services, and strengthening democratic practices and institutions.

The President’s Fiscal Year 2009 base budget request for South Asian states – Afghanistan, Pakistan, Bangladesh, India, Nepal, Sri Lanka, and Maldives – is just over $2 billion dollars. Much of our request remains concentrated in Afghanistan and Pakistan, which are key to regional stability.

Ensuring the success of our security and reconstruction efforts in Afghanistan continues to be our highest priority. Accordingly, just under half of our total assistance to South Asia supports our assistance priorities in Afghanistan. Afghanistan is not just a battle theater to fight enemies, but a place of opportunity to have a close, democratic ally in the heart of a continent with considerable political and economic potential. For decades, Afghanistan has acted as a barrier between the countries of South and Central Asia. As stability in Afghanistan increases, so do the possibilities for the movement of goods, people and ideas between the countries of the region.

Our assistance and engagement in Pakistan are designed to help it develop into a stable, moderate, democratic country. Consistent with our assistance priorities, portions of our aid to Pakistan will continue to be dedicated to its western frontier, including the Federally Administered Tribal Areas. The goal is to spur development, enhance Pakistan’s counter-insurgency capability, and improve coordination overall. Specifically, we aim to address the heath, education and economic programs in the Tribal Areas through the continuation of our five-year, $750 million funding commitment that began in Fiscal Year 2007. We’ve requested $60 million in the Fiscal Year 2008 supplemental and $150 million in the Fiscal Year 2009 base to fulfill this commitment. Building a strong, lasting partnership with Pakistan plays a pivotal role in broader counter terrorism efforts and is an important factor in our overall success in supporting a stable and prosperous Afghanistan.

Donor Coordination

The United States is one of the largest donors in South Asia, if not the largest. But, we can’t do it all. As assistance resources grow scarce in meeting rising needs, donor coordination is increasingly important. Since 2001, the international community has made multi-year financial pledges (through 2013) of assistance to Afghanistan totaling over $43 billion. This continuing commitment defies conventional wisdom about donor fatigue in Afghanistan. In fact, with few exceptions, most countries have proven to be reliable international partners committed to preventing Afghanistan from slipping back to its past as a sanctuary for terrorism.

The chief problem with international assistance in Afghanistan is not a shortage of funding, but the effectiveness of donor coordination. We are hopeful that the recent appointment of Special Representative of the UN Secretary-General Kai Eide and the enhanced mandate of the UN Assistance Mission in Afghanistan will improve donor coordination this year. At the Paris Support Conference in June, the international community will reaffirm our long-term commitment to Afghanistan, and raise new financial pledges to support the Afghanistan National Development Strategy and upcoming elections.

The Foreign Assistance Process

As with any new process, we continue to work through the new procedures and relationships, including a new foreign assistance Framework based on five assistance objectives. Now into the third year of the foreign assistance reforms, there is a much greater emphasis on the integration of foreign assistance into the strategic planning process and the alignment of budget requests with policy objectives. Accordingly, the Bureau of South and Central Asian Affairs has increased our coordination and consultation with counterparts at the U.S. Agency for International Development and other key providers of foreign assistance in the region.

Another change is the creation of the Coordinator for Reconstruction and Stabilization. The office of the Coordinator focuses on early warning, conflict prevention and conflict response in fragile and post-conflict states, as well as with the human causes and consequences of conflict. We continue to collaborate with the Coordinator’s office to identify opportunities and develop effective programs within the region. Their assessment and programming skill-sets inform and bolster our efforts to provide the most effective and innovative assistance for countries at risk of conflict or destabilization.


In conclusion, Mr. Chairman, I would like to thank you for this opportunity to appear before this Committee. We continue to make every effort to be good stewards of our assistance resources, focusing them on the critical priorities that make up a considered strategy to realize our vision of a stable, prosperous and democratic South Asia.

I am happy to respond to your questions at this point. Thank you.

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