Mr. Chairman, members of the committee, good morning. It is a pleasure to be here today to testify in support of the Administration's security assistance request for fiscal year 1998.

In our request we are asking for substantial increase over the FY 1997 appropriation. The security assistance part of this budget alone represents a $55.775 million increase. We believe that this increase is fully justified. It has become clear that even though the challenges we face today may not be of the same magnitude as those we faced during the Cold War, they nevertheless require American engagement. Many of these challenges are better and more effectively met by the kind of foreign policy instruments contained in this foreign aid request than by direct military action. Old goals such as preserving Middle East peace are no less important today, but we have important new goals as well. Probably the single biggest of these is the challenge of building a new security structure in Europe. As a result, the demands of preparing the new democracies of Central Europe and the former Soviet Union for full participation in the Partnership for Peace (PFP) and in some cases, NATO membership, account for a significant amount of the requested increase. We are also requesting small amounts of money for programs to train and equip foreign troops for peacekeeping and humanitarian assistance duties and thus reduce the need to commit American troops for these kinds of operations in the future.

Sometimes, despite our best efforts, our military power must be employed. In that case, security assistance has the proven benefit of helping to ensure that our friends and allies have the equipment, training and infrastructure to fight along side us if necessary. As commander of the 1st Infantry Division in operation Desert Storm, I saw first hand how our years of active planning and effort in building military-military relations and interoperability through the security assistance program with our coalition partners paid big dividends during the war. As Director of the Defense Security Assistance Agency, I am responsible for both of these major goals of the security assistance program -- preparing our friends and allies worldwide to defend themselves, and preparing them to work better with us, if need be. This budget request, therefore, has the strongest backing of the Department of Defense.

Before I discuss our budget request in detail, I would like to acknowledge the much-needed improvements to the Foreign Assistance Act and the Arms Export Control

Act made by P.L. 104-164. We look forward to working with you on future security assistance authorization bills.

International Military Education and Training (IMET)

IMET is our single most cost-effective security assistance program. IMET fosters military-to-military relations, promotes military professionalism, and, via the Expanded IMET program, addresses issues of military justice, respect for internationally recognized human rights, effective defense resources management, and improved civil-military relations. The Commanders in Chief of the unified commands have consistently identified IMET as a key tool for enhancing political/military relations with the various countries in their regions.

Since 1991, we have broadened the reach of the IMET program to 28 new countries, primarily in Central Europe and the Newly Independent States of the former Soviet Union (NIS). Increasingly, our IMET program in this region has come to focus on preparing these countries for full participation in the Partnership for Peace, and, in some cases, NATO membership. Accordingly, we continue to work towards restoring the level of IMET funding to a level commensurate with the program's global utility and the new requirements for training in these new democracies. This year we are asking for $50 million, an increase of $6.525 million, of which $3.550 million is for countries in Europe and the NIS. Of this, $1.5 million is for three countries, Poland, Hungary and the Czech Republic .

Given that IMET was one of the few programs to be increased last year, you might well ask whether this additional funding is really justifiable in a time of budgetary stringency? The answer is yes. IMET course costs are rising by an average of eight percent per year due to reductions in the DoD student population that increase per-student costs, along with normal inflation. Further, costs increase as country programs mature. Starting an IMET program with a new country is relatively inexpensive. English-language training is often a prerequisite for IMET students before they can take the more costly professional military education courses that bring the real benefits. The early, inexpensive phase for these new countries is largely complete, and follow-on training needs to be funded. At the same time, we are also proposing to bring in 570 more students worldwide, of which the majority will be from Central European and NIS countries. So this proposed expansion in the IMET program is in part a natural consequence of seeds planted several years before, and a component of our larger efforts to improve the professionalism of, and enhance interoperability with, the militaries of Partnership for Peace countries as well.

Foreign Military Financing (FMF)

We are requesting $49.25 million more than last year's allocations for the FY 1998 FMF program, after accounting for the funding of "FMF" demining in the new Non-proliferation, Anti-terrorism, Demining and Related programs account.

Central Europe and the NIS

As with IMET, our interests in Central Europe are an important factor in our request for increased funding. We are requesting $70 million in FMF grant funding for the Partnership for Peace initiative, an increase of $10 million. Support for the Partnership for Peace helps to ensure that Partners invited to join NATO will be ready to accept the military, political and economic burdens of membership. It also helps to keep the door open to countries not initially invited. The necessarily flexible nature of the NATO enlargement process makes it essential that we fund the program at a level sufficient to make the armed forces of the earliest prospective NATO members truly interoperable with NATO, while helping the other Partner countries progress. At the same time, funds are needed to enhance cooperation with eight countries of the NIS that we expect will become eligible for FMF grant funding for the first time in FY 1997.

Loans to Central Europe

We are also requesting $20 million to subsidize an estimated $402 million in loans to Central European (CE) countries. Unlike the grant assistance requested for the Partnership for Peace, these loans are intended to help address major infrastructure deficiencies, such as lack of airlift capability and NATO-compatible air defense, radar and communications equipment. In some cases, loans may be used to support transfers of excess equipment.

One important aspect of assistance to CE countries, especially those that may not be invited to join NATO initially, is peacekeeping. Virtually all of the CE countries already maintain or are forming dedicated peacekeeping units. Unfortunately, lack of compatible transportation and communications equipment is a major limitation on these countries' ability to work alongside U.S. or NATO troops in international peacekeeping missions. Grants and loans to these countries can make their peacekeeping contributions more effective in the near term, while helping to make them better prepared for possible future NATO membership.

Greece and Turkey

We are requesting $46 million to subsidize the same FMF loan values authorized for Greece and Turkey in FY 1997, $122.5 million and $175.0 million, respectively. In both cases, the loans are needed to continue sustainment of existing U.S.-origin assets. Greece also plans to use these funds to refurbish and upgrade existing U.S. equipment as well as articles that will be acquired through the reduction of conventional forces in Europe and the Excess Defense Articles program.

I appreciate that the proposed assistance to Turkey and Greece may be controversial because of Turkey's problematic human rights record and the potentially volatile situation with regard to Cyprus and the Aegean sea. Yet the strategic importance of this region cannot be overstated. We are committed to balancing tensions between Greece and Turkey, and to promoting Turkey's place in the Western security system. Turkey's secular-oriented. Western-leaning military establishment remains a moderating force in the country and needs our continued support.

Middle East Peace

Once again we are requesting $1.8 billion in FMF grants for Israel and $1.3 billion for Egypt to fulfill our commitment under the Camp David accords. Maintaining Israel' s qualitative advantage and modernizing the Egyptian armed forces continue to be major goals of these programs. Regarding Egypt, I would like to point out that in addition to its role in promoting regional peace, our aid there has had the additional benefit of building a strong and reliable coalition partner. Egypt provided over 40,000 troops in the Gulf War, troops whose interoperability with U.S. forces was greatly increased by U.S.-provided training and equipment.

Foremost among Arab countries that have recently taken risks for peace in the region is Jordan. As part of our policy of assisting such countries, we are requesting $45 million this year for Jordan to continue with the F- 16 aircraft lease program for which Congress has already appropriated $100 million in FY 1996 and $30 million in FY 1997. The program is on schedule, with the first six aircraft scheduled to be delivered in December 1997 and the remaining ten by February 1998.

Demining

The demining program is an important initiative this Administration has undertaken. The FY 1998 request of $15 million will help to make a reality President Clinton's pledge in May 1996 to strengthen global efforts to deal with the tragic consequences of landmine contamination of farmland and infrastructure in over seventy countries worldwide, principally in Africa and Asia. This effort is intended to help thirteen of the most severely afflicted countries by providing defense articles and services needed to develop indigenous mine clearing and awareness programs.

Enhanced International Peacekeeping Capabilities (EIPC)

I have already mentioned that providing training and equipment to friends and allies for peacekeeping duties is an increasingly important use of security assistance funds. In an effort to improve the peacekeeping readiness of countries that have demonstrated significant potential for greater contributions to international peacekeeping operations, and at the same time reduce U.S. costs for such missions, we are proposing a new program called EIPC - Enhanced International Peacekeeping Capabilities. We are requesting $7 million to be allocated regionally. The funds will be targeted to help selected countries improve their ability to develop and implement effective peacekeeping training and education programs consistent with internationally approved standards. The effort will focus on the development of peacekeeping training centers rather than on training and equipping standing peacekeeping units. Through the procurement of special education training aids, information technologies, and instruction on the development of national-level peacekeeping training and education programs, we will significantly improve the confidence and capability of developing countries to contribute to international peacekeeping missions. This program is being developed in consultation with selected allies to ensure cooperative efforts at implementing common internationally approved peacekeeping training standards. Standardizing peacekeeping training via EIPC will enhance the cohesion and credibility that often challenge a rapidly assembled multinational peacekeeping force.

You may ask, why do we need a new FMF account separate from the traditional voluntary peacekeeping account (PKO)? The answer is that EIPC's program requirements will rely upon DoD to provide Mobile Training Teams (MTTs) and specialized training and equipment. FMF, which is administered by DoD, is better suited than PKO to procure defense articles and services from the Department of Defense.

African Crisis Response Force (ACRE)

Humanitarian and peacekeeping crisis for Africa and beyond are likely to be a recurrent problem in the near future. To deal with those crises, we are requesting $5M in FMF for the African Crisis Response Force (ACRE) initiative. Through provision or training and some equipment, the ACRE initiative will enhance the capabilities of up to 10,000 African troops designated by African countries, for rapid deployment in international peacekeeping and humanitarian operations. Recently, the concept has evolved away from the concept of a standing force and has moved towards more emphasis on capacity building. In this form, several countries, including France, have evinced support for the initiative and have begun to make tangible commitments to provide training and/or equipment or money.

East Africa Regional Assistance

Sudan, Africa's largest country, remains a destabilizing factor in the Horn of Africa. Both the Organization of African Unity and the UN Security Council have condemned the government of Sudan for its involvement in the attempted assassination of Egyptian President Mubarak in June 1995. Sudan continues to sponsor or assist efforts to destabilize its neighbors, notably in Uganda, Eritrea and Ethiopia. Under the rubric of East Africa Regional Assistance, we are requesting $5 million in FMF to help these three countries resist Sudanese-fostered destabilization.

Cambodia

Our FMF request for Cambodia is $1 million, as it has been for several years. In concert with programs funded in other parts of the President's foreign aid budget, we aim to use this small amount to help preserve hard-won democratic gains in this devastated country, promote continued democratization, and prevent the return to power of the Khmer Rouge. This year's FMF request is intended to help develop the Royal Cambodian Armed Forces engineers' capability to build and improve civil infrastructure, support the Cambodian government's establishment of development centers to provide employment for Khmer Rouge defectors, and aid Cambodian efforts to remove an estimated 5 to 8 million anti-personnel landmines.

Caribbean Regional Fund

Caribbean nations traditionally have been strong allies of the U.S. Our long-term objectives in the Caribbean region include maintenance of regional stability, as the Caribbean constitutes America's ' third border." This entails assistance to cooperative security organizations-principally through regional coast guards-against international crime, including terrorism, narcotrafficking, arms trafficking, money laundering, and illegal migration; plus search and rescue and natural disaster response. We are requesting $3M for the regional fund, a $1M increase, for long-deferred operations and maintenance support to the Eastern Caribbean's Regional Security System (RSS) and the broader Caribbean Community and Common Market (CARICOM) states.

Administrative Expenses

The $23.25 million we are requesting for FMF Administrative Expenses -- the same amount for the past several years -- pays for the expenses of administering the non-Foreign Military Sales aspects of our security assistance program worldwide. This includes financing for the administrative costs for the security assistance activities of the Unified Commands as well as the Security Assistance Offices in our embassies abroad. IMET administration is a particularly important component of these costs. Yet, despite the recent increase in IMET programs, and thus the need for SAOs, in Eastern Europe and the NIS, we intend to hold costs to the same level in FY 1998 as FY 1996 and FY 1997.

Korean Peninsula Energy Development Organization (REDO)

On behalf of the Department of Defense, I would like to mention this critical issue. The State Department has requested $30 million to support KEDO for FY98. This amount is within the range for US contributions anticipated by former Secretary Christopher in Senate testimony in early 1995. KEDO is charged with implementing technical aspects of the Agreed Framework, including delivery of heavy fuel oil and construction of two light water reactors in North Korea, in return for the North freezing activities at its nuclear facilities. From DoD's perspective, this project is critical to safeguarding the security interests of the US and its allies in the region. A failure of KEDO's efforts could lead to a reactivation of North Korea's nuclear program, which would pose a substantial risk to US forces in the region as well as heighten tensions and insecurity among all Northeast Asian countries. US financial backing is extremely important in demonstrating to our partners in KEDO, particularly the ROK and Japan, that the US is willing to assume its share of the burden in this security enterprise. US funding also sets an example for other potential contributors that are trying to assess the importance of this project.

Conclusion

I would like to conclude by reiterating that this budget request is very much in our interest. These programs contribute directly and indirectly to the security of the American people. The request is a reasonable compromise between our worldwide commitments and responsibilities on the one hand, and our budget constraints on the other hand. The Department of Defense supports it completely. Thank you.