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Foreign Assistance Priorities for the Western HemisphereRoger F. Noriega, Assistant Secretary of State, Bureau of Western Hemisphere Affairs Statement before the Senate Committee on Foreign Relations Washington, DC March 2, 2004 Mr. Chairman and Members of the Committee:
Thank you for the opportunity to discuss the Administration's foreign assistance priorities for the Western Hemisphere. The Western Hemisphere has a unique place in our foreign policy and assistance programs. Not only is it our home, but we also share with the other countries certain defining events and values that have given form to our political institutions and culture. Our own destiny is uniquely bound to that of our neighbors to the north and south -- through the constant movement of goods and people across our long borders seeking markets, education, jobs, or simply new experiences. Our open societies, however, are vulnerable to both internal and external threats - crime of all kinds and dimensions, internal conflict and, as September 11th made clear, dangerous new forms of terrorism.
The most encouraging development in the hemisphere over the last two decades has been the decisive shift to democratic governance. In 1980, fewer than half the countries in the hemisphere had freely elected leaders. Although some democracies in our hemisphere are troubled - Haiti comes immediately to mind - today 34 of our 35 countries have freely-elected governments. Only one - Cuba - does not. Beginning at the 1994 Summit of the Americas, 34 Heads of State and Government have repeatedly endorsed democracy and free trade as guiding principles. They have also approved ambitious work plans to achieve these and related goals. The Summit action plans - which both orient and reflect major components of our foreign assistance program - describe the broad spectrum of activities still needed to ensure that democracy's promise of freedom and prosperity reaches all who reside in the Western Hemisphere.
We recognize that the path towards true democracy for all nations of the hemisphere has not been smooth. But we must continue to invest in the Hemisphere's future. Democratic, prosperous nations make the best neighbors. They are likely to maintain peaceful relations with others in the region and safeguard the rights of Americans living within their borders. They are likely to foster favorable investment climates for U.S. firms and open their markets to U.S. products. They are likely to work with us to combat trans-national threats and to advance views similar to our own in multilateral fora such as the UN, the OAS, and the international financial institutions. We must continue to strengthen this Inter-American community.
Democracy
To take root, democracy must provide much more than free elections. As we have seen in country after country, the return to democracy - in some cases at the end of long internal conflicts -- has raised expectations that have not been fulfilled. While some gap in performance is unavoidable, in many countries the gap remains dangerously wide or is growing. The institutions of government are simply not organized to be able to respond effectively to the reasonable demands of the people. The avenues for participation that we take for granted in the United States - an active civil society, established political parties, and a free market economy that encourages entrepreneurship, among other things - still are not fully developed in many countries in the region. These structural impediments are compounded by world economic trends and national fiscal problems, as well as crime and other threats to security, all of which have placed further demands on elected leaders.
Our foreign assistance program addresses these interconnected problems. We aim to encourage continued progress throughout the hemisphere toward effective democracy with broad-based economic growth, human development and both personal and national security. Let me give you some examples.
Haiti most dramatically illustrates the perils of democratic government. The country is in the midst of yet another crisis despite the dedicated efforts of the international community, including the OAS and the United States. After years of undemocratic governance, President Aristide became the victim of his own repressive and autocratic rule. President Aristide voluntarily resigned when he realized that he could no longer depend on armed gangs to maintain him in power. And in the end, those were the only elements of possible support left to him. He alienated the democratic opposition in 2000 when he refused to remedy fraudulent legislative elections, despite requests from opposition leaders and the international community. Violent suppression of peaceful protest demonstrations, sometimes with the complicity of the Haitian National Police, further polarized the political landscape, as did intimidation of journalists and the credibly alleged participation of local officials in extra-judicial killings.
While the manifestations of Haiti's ills are poverty and misery, the root causes are political. President Aristide's government failed its people in every way. Now we can make a new beginning in helping Haiti to build a democracy that respects the rule of law and protects the human rights of its citizens. The U.S. and its partners in the international community will work intensively with Haiti's interim government to restore order and democracy. We are participating in the multinational force authorized by UN Security Council Resolution 1529, and will also work with our international partners in efforts to reform the Haitian National police. Restoring democracy and the rule of law in Haiti will require lots of work for us and the international community, but we are committed to the task.
Just a few months ago, Bolivia was in the headlines. When Gonzalo Sanchez de Lozada was elected president of Bolivia in August 2002, we looked forward to working with him to implement, among other things, market-oriented economic reforms he had previously developed. However, he was forced to resign this past December by popular demonstrations against some of those very policies. While there was a constitutional transfer of power to Vice President Mesa, Bolivia's indigenous majority remains underrepresented in the government and deeply suspicious of institutions which provide little of benefit to the poor. A principal objective of our democracy program in Bolivia is to draw the long-marginalized indigenous population into political life. We are also assisting the Government's anti-corruption campaign, continuing to support improvements in the administration of justice, and helping to increase the Government's responsiveness to citizen needs through support for decentralization as well as for the national legislature. The consolidation of democracy in Bolivia is our top performance goal for the country. We believe that a stable democracy is a necessary condition for success in the fight against illegal drugs.
Venezuela remains a cause for considerable concern. The crisis of governance - brought on by President Chavez' increasingly anti-democratic actions and the strong opposition of the traditional elites - is now entering its third year. The National Electoral Council will announce soon whether sufficient signatures have been verified to convoke Presidential and National Assembly recall elections. The United States has a major interest in preserving and regenerating democracy in Venezuela and facilitating a peaceful, constitutional solution to the ongoing political crisis. Foreign assistance resources will be used to improve the functioning of institutions that underpin democracy, in particular stronger, more democratic political parties and democracy-related NGOs. The absence of such dependable actors has greatly increased the distance between Chavez and his detractors and prolonged the crisis, with devastating effects on the national economy as well. We will also be dedicating resources to help Venezuela reverse this long-term economic decline and promote sound growth-oriented macroeconomic policies.
Other examples of assistance to strengthen democratic institutions include a five-year project in Peru focused on the national legislature, judicial reform, and decentralization and activities in the Dominican Republic to support civil society advocacy for political reform and training for the media. In Ecuador, a decade has passed since a president has completed his term of office. Our challenge there is to work at all levels - both within and outside the government - to reinforce the message that politics must stay within constitutional bounds. Assistance will include training on civil-military relations, exchange programs on constitutional democracy, and support for selected civil society groups to demand effective democratic government. In Paraguay, where more orderly constitutional processes are the goal, we will promote consensus between the executive and legislative branches on issues of rule of law, state reform, and protection of human rights. Mexican democracy too is at a critical stage in its transition toward more open and participatory government. Assistance there will strengthen the rule of law through judicial reform and support greater transparency and accountability in government.
In Cuba, the one country in the region that does not have a freely elected government, our policy is to encourage a rapid, peaceful transition to democracy characterized by strong support for human rights and an open market economy. With increased ESF resources, we will augment our support for Cuba's embattled civil society and increase our efforts to break the information blockade Castro has imposed on the island. We will provide a voice to Cuba's independent journalists and human rights activists. In this way, we will help Cuba's strongly motivated civil society to work for freedom in political, economic and other fields. We intend to help create the conditions that will bring to an end the hemisphere's only totalitarian government and reintegrate the Cuban people as members of the community of the Americas.
Prosperity
At the Special Summit of the Americas held in Monterrey, Mexico, this past January, the democratically elected Heads of State and Government declared their commitment to economic growth to reduce poverty. Called in response to problems that have arisen since the Third Summit in April 2001, the Special Summit focused on private sector-led growth to reduce poverty and fighting corruption. There was much discussion in the lead up to the Summit and at the Summit itself around social issues and economic equality for all members of society. Hemispheric leaders agreed on a host of concrete actions to fight corruption and promote transparency, invest in health and education, and promote growth through trade and economic reforms.
Among these specific commitments, leaders agreed to reduce the time and cost of starting a business and to strengthen property rights by the next summit in 2005. Leaders agreed to triple lending by the Inter-American Development Bank through private sector banks to micro, small and medium-sized enterprises by 2007. They also agreed to create conditions for reducing by at least half the average cost of remittance transfers by 2008. All these steps are intended to facilitate entrepreneurship and increase access to capital. The Summit declaration welcomed the progress achieved to date toward the establishment of a Free Trade Area of the Americas (FTAA) and reaffirmed the commitment to complete the FTAA on schedule, that is, by the January 2005 deadline. The declaration contained numerous other statements of support for sound macroeconomic policies, prudent fiscal management, and public policies that stimulate domestic savings, meet the need for creation of productive jobs, and contribute to greater social inclusion.
As with democracy as a form of government, there is broad agreement throughout the hemisphere on objectives, on the principles that determine overall economic success and prosperity. The problem is once again a performance gap, the gap between political declarations and reality. After decades of government control of basic industries and other mercantilistic policies, the structure of the economy in many countries cannot readily be reoriented to a free market system, which also needs regulatory and other support mechanisms to ensure a level playing field. Our assistance programs will help support legal and regulatory reforms to help small- and medium-sized businesses and property owners and to bring informal businesses into the formal sector. We will also help countries develop the capacity to provide business services, including access to credit and markets, to enable them to compete in the global economy. As international standards increasingly require attention to the environment, we will promote the use of the best environmental management practices, including access to financing for their implementation.
An overriding issue in the quest for equitable growth is corruption. Corruption undermines the rule of law and distorts economies and the allocation of resources for development. In Monterrey, the leaders pledged to intensify efforts to combat corruption and other unethical practices in both the public and private sectors. They pledged to strengthen a culture of transparency and deny safe haven to corrupt officials and those that corrupt them. They called for promoting transparency in public financial management. They called for robust implementation of the Inter-American Convention against Corruption, and its follow-up mechanism, and committed to develop specific measures to strengthen international cooperation toward this end. In addition, Leaders pledged to hold consultations if adherence to their transparency and anti-corruption objectives is compromised to a serious degree in any Summit country.
In support of the transparency commitment, U.S. assistance programs will promote transparency and accountability in government institutions. In Bolivia, we will provide technical assistance to support civil service reform and anti-corruption training for police, military, prosecutors and judges. In the Dominican Republic, we will help mobilize a civil society coalition for transparency in government and support the development and implementation of a national anti-corruption plan. In Nicaragua, we will support reform of the law governing the operation of the Office of the Comptroller General and continue to provide assistance to the Attorney General and National Police to support prosecution of public corruption cases. These examples illustrate the different approaches being taken by individual countries toward the same objective of greater transparency in government.
We remain firmly convinced that trade is the most effective means of increasing prosperity in the hemisphere. The United States already imports from Latin America and the Caribbean goods valued at more than 120 times the total amount of its assistance to the region. We will work to expand trade - and the prosperity it brings -- through the FTAA, the Central America Free Trade Area, and bilateral agreements as appropriate. We will call upon the United States Senate to help us make this vision a reality by providing advice and consent to ratification of these agreements at the appropriate time. Trade related assistance, such as that just alluded to, is an integral part of our trade strategy. My colleague Adolfo Franco of USAID will discuss in greater detail our current efforts to build trade capacity throughout the hemisphere.
Investing in People
While I have been talking about political and economic structure and processes, people are the intended beneficiaries of all our programs. We aim to facilitate the development of open political and economic systems that serve the needs of the people and enable them to prosper and pursue their own individual objectives within the framework of a rule of law. At present, too many in the hemisphere are trapped in poverty and suffer from malnutrition. Without attention to their basic human needs - food, basic sanitation and quality education and healthcare, they will never be able to participate in the gains generated by economic growth and expanded trade. Consequently, we are continuing to dedicate significant resources to improve nutrition and healthcare in selected countries and regions.
In the poorest country in the hemisphere, Haiti, two-thirds of the population lives below the absolute poverty line, unable to meet minimum daily caloric requirements. This fact alone is enough to launch thousands of undocumented migrants toward our shores each year in unseaworthy vessels. Haiti is also the country most severely affected by HIV/AIDS, with a prevalence rate of between 4.5 and 6%. U.S. assistance to Haiti, channeled largely through nongovernmental organizations, focuses on the most vulnerable - those suffering from chronic malnutrition, communicable disease and illiteracy. The U.S. is the largest bilateral donor for HIV/AIDS prevention and care in Haiti, using a public/private partnership to provide a comprehensive set of prevention and education activities to reduce the rate of new infections, as well as programs to provide care and support for those already infected or affected by the disease.
In Nicaragua, the second poorest country in our hemisphere, our programs address fundamental obstacles to development, including food aid to ameliorate the impact of rural unemployment. We are also providing assistance to diversify agricultural production and link agricultural products to local, regional and global markets, giving small farmers a stake in the national economy. We are working with the Nicaraguan Government to expand access to primary education and improve the infrastructure and quality of schools, to reform public policy and management of health issues, and increase access to sustainable health care for low- and middle-income families through the private sector health market. All these activities aimed at helping individuals meet immediate needs bring those people into the economic and political life of the country, expanding prosperity and participation in democratic governance.
Examples of other programs we ask you to fund include assistance in Bolivia and Peru, particularly in high poverty coca-growing regions, to improve nutrition and enhance the capacity of public and private sector organizations to meet the population's health, nutrition and education needs. In the Dominican Republic, programs focus on health sector reform, improving reproductive health services, and controlling the spread of HIV/AIDS and tuberculosis. In Honduras, we are supporting President Maduro's Poverty Reduction Strategy, developed as part of the Highly Indebted Poor Countries Initiative and designed to improve access and opportunities for low-income Hondurans via an improved investment climate, better social services and more effective municipal governments. As the center of the HIV/AIDS epidemic in Central America, Honduras will also receive assistance to improve prevention and care for people contracting the disease. A regional program for the Eastern Caribbean works with NGOs, community-based organizations, and governments toward the same ends.
We look forward to the initiation of programs through the Millennium Challenge Account, which represents a major departure from past practices in distributing U.S. economic assistance. The MCA will provide an important new source of financing for lower income countries that establish sound economic policies, invest in their people and demonstrate the political will to establish transparency in government and conform to the rule of law. This month the Millennium Challenge Corporation will propose eligibility criteria for nations to participate, and in May the MCC will select a final list of countries to receive assistance. We hope that several countries in the Western Hemisphere will qualify in the first year, and that additional nations will become eligible in the future. We will be working to ensure that the initial funding provided by Congress delivers the promised results: reducing poverty by significantly increasing economic growth. As the President has stated, the MCA will provide people in developing nations the tools they need to seize the opportunities of the global economy .
Security
For many people in the region, the immediate perceived threat is common crime - theft of property, assaults, kidnapping, and murder - and is a direct reflection of some governments' inability to provide adequate police services. However, this is the tip of the iceberg. Intermingled with these same local criminals - and taking advantage of the same gaps in the criminal justice systems - are those engaged in international organized crime. The drug traffickers, alien smugglers, and traffickers in persons, among others, all thrive in the same fertile ground of inadequate laws, often untrained and inexperienced personnel throughout the justice system, and a long history of not enforcing the laws on the books. While there are certainly variations among countries, in too many countries only the poor are incarcerated, generally for long periods of time without trial and without access to counsel. To reverse this situation and establish criminal justice systems capable of prosecuting high visibility crimes against prominent defendants on a regular basis is a monumental task. The countries of the Americas must meet it to secure the rule of law and sustain democratic governance.
Much of our assistance to the region focuses on strengthening criminal justice institutions and processes. ESF and INCLE are the primary source of funds for such programs. Assistance ranges from training and equipping of counternarcotics and other specialized units to sector-wide efforts aimed at implementation of new criminal procedure codes. The latter reach out at a policy level to all elements of the criminal justice system -- police, prosecutors, judges and public defense services. In many countries, such efforts are proceeding in parallel and are coordinated by the Country Team. We feel that it is critical to look at justice systems as a whole to identify the weak points in coordination between agencies. These are the critical gaps that need to be filled for successful prosecutions. Both the lack of competence in investigative techniques and competition among police, prosecutors and judges over investigative responsibilities are serious obstacles to the effective prosecution of crimes in the region today. Many countries also need to give greater attention to crime prevention and victim assistance.
Notwithstanding Haiti, Colombia continues to present the most urgent case for law enforcement and other assistance in the region. Counternarcotics remains at the center of U.S. relations with Colombia, which supplies 90% of the cocaine consumed in the United States. However, as Colombia's three terrorist organizations - the FARC, ELN, and AUC - fund their activities with the proceeds of drug trafficking, a unified response is necessary. We appreciate the expanded authority that Congress has provided to allow our assistance program to support Colombia's unified campaign against drugtrafficking and terrorism. Our FY 2005 request for funding builds upon the successes of programs begun in FY 2000 with the Plan Colombia Supplemental and sustained by subsequent Andean Counterdrug Initiative (ACI) appropriations. Our ACI request for FY 2005 would provide $150 million for programs to address underlying social and institutional issues and $313 million for narcotics interdiction and eradication. The alternative development and institution building programs include emergency and longer-term assistance to vulnerable groups and displaced persons, as well as programs promoting the rule of law, local governance, and human rights.
The total ACI request for FY 2005 (including Colombia) is $731 million. These funds are needed to support a unified Andean regional campaign against the drug trade and narco-terrorism. In Peru, coca cultivation has already been reduced by 70%. Our FY 2005 request ($112 million) will support the further eradication of illicit coca and opium poppy cultivation, interdiction, maintenance of USG-owned air assets, and the development of rural infrastructure to prevent the spread of illicit economic activities linked to narcotics trafficking. We will pursue similar activities in Bolivia at a somewhat lower level ($91 million). We are seeking $26 million for Ecuador, where programs will aim primarily to stop spillover from Colombia and the transit of drugs destined for the United States, and $9 million for Brazil, to support an interagency operation to fortify the northern border through riverine control. We also request $6 million and $3 million for Panama and Venezuela, respectively, for interdiction and other law enforcement activities. Given Panama's strategic location and its well-developed banking sector, our goal is to help Panama develop its own capabilities to protect itself from criminal exploitation of all kinds. We also propose to increase support for port, canal, and maritime security. In other countries, INCLE funds are used to help governments build strong law enforcement and related institutions that can stop the threats of international drug trafficking and transnational organized crime before they reach U.S. soil. In the wake of September 11, 2001, we have refocused many anti-crime programs to emphasize and sharpen their counter-terrorism impact. For example, we are stepping up cooperation with Argentina, Brazil and Paraguay with a view toward decreasing use of the tri-border area as a hub for terrorist financing. Administration of justice programs throughout the region, including ESF-funded law enforcement development activities, generally address problems in the criminal justice system. Programs in El Salvador, Guatemala, Honduras, and Nicaragua all seek to develop good working relationships between police investigators and prosecutors, to improve the quality of criminal cases presented to judges and the possibility of conviction on the merits. Because of the serious street crime problems in Central America, including violent gangs, we are also looking for ways to enhance crime prevention efforts - through the work of enforcement agencies and community organizations. Projects in Central America, Mexico and the Caribbean address the need for better management systems and training for all participants in the judicial process. A new international organization has been established in Santiago, Chile, with a mandate from the Summit of the Americas to support judicial reform throughout the hemisphere. The ESF account is the source for U.S. financial contributions to the Justice Studies Center of the Americas.
On the military side, our Foreign Military Financing (FMF) request for FY 2005 will provide professional training and equipment to meet three distinct requirements. Most of the requested assistance will support efforts in the Andean region to establish or strengthen national authority over remote areas that shelter terrorists and illegal narcotics activity. Despite impressive improvements, Colombian security forces will still require significant U.S. assistance in the key areas of mobility, intelligence, sustainment and training. Our FMF request for FY 2005 would provide $108 million for such programs, including the provision of interdiction boats, infrastructure improvements and support for Colombia's C-130 transportation fleet. FMF support is also critical to Colombia's neighbors to preclude spillover of narcotics and terrorism into their territories.
A second objective of the FY 2005 FMF request is to reinforce homeland security by controlling approaches to the United States. We will provide countries of the Caribbean and Central America communications equipment, training, spare parts, port security enhancements and logistical support to complement U.S. interdiction efforts. Our intention is to reinforce each country's own sovereign ability to address the continuing terrorist threat, illicit drug trafficking and illegal immigration into the United States.
The third objective for FMF financing is to improve the capability of certain security forces in the region to participate in coalition and peacekeeping operations. Chile, Uruguay and Argentina are committed and well-trained to participate in international peacekeeping operations but lack support in aviation logistics, specialized individual equipment and infrastructure. Providing this support through FMF will enable their continued participation in peacekeeping efforts, reducing the possible requirement for U.S. forces in such operations. Similarly, when El Salvador, Honduras, Nicaragua and the Dominican Republic volunteered troops for stability operations in Iraq, they demonstrated the political will to support U.S. objectives. However, deficiencies in equipment and training remain, which we propose to address through FMF to allow continued participation in peacekeeping operations.
Training provided under the IMET program will expose foreign students to U.S. professional military organizations and procedures and the manner in which military organizations function under civilian control. In the Western Hemisphere, such training focuses on junior and mid-grade officers, who still have a significant military career ahead of them and whose development can be positively influenced by exposure to U.S. practices. The largest programs are in Colombia, El Salvador, Mexico, Argentina, the Dominican Republic and Honduras. Our total FY 2005 request is $14,390,000. Continuation of these programs is intended to enhance regional security by consolidating gains Latin American militaries have made in subordinating themselves to civilian control.
Gaps and Authorities
Your letter of invitation asked specifically whether, in my opinion, there were any critical gaps in the Administration's foreign assistance request for the Western Hemisphere. Needless to say, there are always choices that must be made in putting together a budget of this kind. Our request level is sufficient to address the highest priority needs in our hemisphere. As is the custom, however, we expect to make some adjustments in individual country or program levels to meet actual requirements when FY 2005 appropriations are made available.
You also asked whether we needed any new authorities. Last year on this occasion, Acting Assistant Secretary Struble identified aspects of existing legislation that hampered programming in the region. The areas identified - the need for year-to-year extension of special authorities for Colombia and administration of justice programs, and the confusing array of exceptions to section 660 to authorize police assistance - remain issues of concern to us today. We would like to have permanent authorization language to support the unified campaign in Colombia against narcotics trafficking and activities by organizations designated as terrorist organizations. We would welcome elimination of the sunset and other revisions in FAA section 534 to bring it into line with the annual appropriations language. However, more fundamentally, we continue to believe that police assistance authorities should be reevaluated with a view toward developing new affirmative legislation to replace section 660 and its numerous exceptions. The limitations of our authority to work with law enforcement personnel under section 534 have become particularly apparent in connection with the need for general crime prevention activities in Central America. We are discussing these issues internally and look forward to sharing an Administration position with the Committee in the near future.
Conclusion
In conclusion, our objectives in the Western Hemisphere are clear - to strengthen democratic institutions, to improve conditions for broad-based economic growth, to provide for basic human needs in the most urgent situations, and to protect people from both internal and external threats. Our foreign assistance program and specifically our FY 2005 budget request provide an accurate overview of the many challenges still before us. While there have been many positive developments - and I would call your attention once again to the strong consensus demonstrated through successive Summits of the Americas on diverse issues of longstanding importance to the United States -- there are very real problems that require our ongoing attention. The institutions of government, social services, and the free market economy we enjoy in the United States were not created overnight. We cannot expect that other countries in this hemisphere, most of which have a much shorter or inconsistent experience with democratic governance, will achieve a similar institutionalization of rights and freedoms in a few short years. We are engaged intensely with them across a wide spectrum of issues through bilateral and multilateral mechanisms. We must also offer them concrete assistance as they work toward our common objectives. Their success will not only benefit their own citizens but also redound to our benefit. As they become more stable partners in international endeavors and more open markets for our goods and services, we will become better friends in the broadest sense of the word. That is the overall objective we seek through our assistance program. I ask your support for full funding of the Administration's FY 2005 budget.
Thank you for your attention.
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