Assistant secretary of state for political-military affairs.
Senate subcommittee on International Economic Policy, Export and Trade Promotion
March 12, 1997
Thank you, Mr. Chairman. I am pleased to testify today in support of the administration's FY 1998 security assistance budget request for foreign operations. As America stands at the threshold of a new century, we face a challenge that recalls the opportunities and dangers that confronted our nation at the end of the First and Second World Wars. Then, as now, two distinct choices lay before us: either to claim victory and turn inward, or to continue to provide strong American leadership in international affairs and enhanced U.S. national security. After World War I, our leaders chose the first course and we and the world paid a terrible price. No one can dispute that after the Second World War, our leaders -- and most of all the American people -- wisely made the second choice. By choosing a path of engagement, America made possible the construction of a more secure, democratic and prosperous world. To meet the challenges of the next century and to build an even safer world for our children, we must plot a similar course marked by vision and steadfastness of purpose. The United States has a remarkable opportunity in the years ahead to shape a world conducive to American interests and consistent with American values -- a world of open societies and open markets. But the pathway to a more peaceful, secure and democratic world remains beset with uncertainty. As in the past, the critical test of American leadership will be our willingness to dedicate the resources necessary to protect and enhance American national interests abroad. This task will not be easy, in light of budget constraints and our commitment to balance the federal budget. However, if we fail to exercise our leadership now in meeting the threats to the security of our nation posed by the proliferation of weapons of mass destruction and other dangerous arms, drug trafficking, terrorism, and other activities that undermine regional security, impede democratic reform and stifle economic growth, we will pay an enormous price later. President Clinton's fiscal year 1998 International Affairs budget request of $19.451 billion, a modest increase over the FY 97 appropriated level of $18.227 billion, will provide the minimum essential tools for maintaining America's strong global leadership role. The foreign operations component of this request totals $13.324 billion, up from $12.250 billion in FY 97. We look to Congress for solid, bipartisan support in rebuilding a foreign affairs program base that in recent years has slipped to dangerously low levels. Mr. Chairman, the purpose of American foreign policy is to protect and promote American interests. We can no longer afford to cut our International Affairs budget and risk crippling U.S. prestige, credibility and influence on the international stage. If we do, we threaten to jeopardize important political and economic interests, and potentially compromise our national security. By supporting our FY 98 budget request, you and the members of this committee will enable a dedicated corps of public servants to champion American political and economic interests, further democracy, and maintain American leadership abroad. Although the future may be uncertain, one thing is for sure: we will continue to face crises and challenges. As we move toward the 21st Century, we must remain willing and prepared to protect our nation's vital interests. Secretary Albright has laid out six mutually reinforcing objectives which form the framework of our International Affairs budget request for fiscal year 1998. They include: -- Securing peace; -- Promoting economic prosperity; -- Fostering sustainable development; -- Providing humanitarian assistance; -- Promoting democracy; and -- Promoting diplomatic readiness. Today, I would like to address in greater detail programs which respond to two of those objectives: securing peace and promoting democracy. First, let me discuss key regions where we are pursuing peace. In each, these programs not only build but also leverage support from our friends and allies for our common goals. From there, I will review our security assistance programs that promote democracy, and conclude with an overview of programs that confront global threats to our national security. Securing Peace in Regions of Vital Interest Ensuring the security of our nation remains our principal obligation. Today's uncertain environment still presents a variety of threats to U.S. security including: -- Efforts by rogue regimes to build or acquire weapons of mass destruction, their delivery systems, and other dangerous arms; -- Attempts by regional forces hostile to U.S. interests to dominate their respective regions through aggression, intimidation or terror; and -- Internal conflicts among ethnic, national, religious or tribal groups that undermine regional stability, impede democratic reform, stifle economic growth and create major humanitarian tragedies and refugee flows. While American military power serves as the principal means by which we can protect our interests against these threats, our critical mission is to prevent such threats from requiring military intervention. We do this through intensive diplomacy, multilateral peace operation efforts, and strengthening of our alliances and coalition partners. The foreign operations budget funds these important efforts and, in the end, helps us avoid the costs of armed conflict while preserving international peace and stability. Building a New European Security Structure America has a great stake in preserving and promoting peace, democracy and security throughout the European continent. Deep political, military, economic and cultural ties link Europe's security and prosperity to our own. Twice in this century, Americans have gone to war in Europe to protect our vital interests, and American troops have remained in Europe since World War II. Europe is now in a period of transition and transformation as we attempt to overcome Cold War divisions in building a New Atlantic Community. But regional conflicts persist in the Balkans, the former Soviet Union, Central Europe and the eastern Mediterranean, posing serious threats to regional -- and global -- security and stability. U.S. security policy in Europe rests upon the cornerstones of NATO; the Organization for Security and Cooperation in Europe (OSCE); cooperation with Russia; and an enhanced partnership with the European Union on regional and global issues. The point of departure has been and will remain the preservation of U.S. leadership in a robust Atlantic Alliance. We have led in adapting NATO to meet the challenge of ensuring peace and stability in Europe in light of the changed security environment. In NATO, we face several critical, ongoing tasks: 1) continuing the momentum toward gradual, transparent enlargement of the Alliance; 2) establishing a new, cooperative relationship between NATO and Russia, expressed in a formal charter; 3) promoting a more visible and capable European role; and 4) enhancing the Partnership for Peace program. The potentially volatile situation in Europe's southeastern corner requires particular care. The United States is committed to promoting a settlement on Cyprus, controlling tensions between Turkey and Greece, and strengthening Turkey's place in the Western economic and security system. The United States gives high priority, not only to bilateral relations with these countries, but also to promoting ties between this region and Western Europe. For FY 98, we are requesting $219.3 million in military and economic assistance to support our security objectives in Europe. Together with our requested economic assistance program for Central Europe and the Baltic States ($492 million) and NIS ($900 million) these funds will help to build a stable, free, undivided, integrated and democratic Europe. FY 98 Budget Request - Building a New European Security Structure (dollars in millions) FMF = Foreign Military Financing ESF = Economic Support Fund PFP = Partnership for Peace IMET = International Military Education and Training FMF ESF TOTAL CE Defense Loans/a 20.000 20.000 Cyprus 15.000 15.000 Greece/a 12.850 12.850 PFP/b 70.000 70.000 Turkey/a 33.150 50.000 83.150 IMET 18.300 Total/c 136.000 65.000 219.300 /a Loan amounts: CE - $402.000; Greece - $122.500; Turkey - $175.000. /b Does not include approximately $33.0OO from Function 050 for PFP. /c Does not include $l9.600 in ESF for the International Fund for Ireland. Partnership For Peace In 1994, the president proposed, and allies embraced, a program of NATO adaptation. The goal is to create a new NATO, internally restructured, equipped for new roles and missions, and open to new members and deeper partnerships. NATO's Partnership for Peace (PFP) program is designed to strengthen practical cooperation and establish strong security ties between NATO and participating countries in Central Europe and the New Independent States of the Former Soviet Union (NIS). It can also serve to prepare those partners interested in joining NATO for the obligations of membership. By forging close cooperative ties between NATO and its Central European and NIS Partners, PFP will help erase Cold War lines of confrontation and bring former adversaries into a community of shared values, principles and interests. The transformation of NATO's relations with the rest of Europe will help provide a secure and stable environment conducive to increased trade, development and market-based reforms. NATO enlargement creates a special need to enhance support to those countries seeking NATO membership. Those countries which will be invited to open accession talks need assistance to make their military forces operable with Alliance forces. We must therefore increase the FMF grant assistance available to these countries. For those countries which desire to join NATO but will not be part of the first accession, the need is equally critical. PFP links between Central European, Baltic states, the NIS and the West must be strengthened to reassure these countries of their place in the West, and to prevent any sense of a security vacuum. Partner nations, while generally committed to making their forces capable of cooperating with NATO, currently lack the necessary resources to undertake improvements in logistics, equipment and training. We must be willing to contribute adequate resources to ensure PFP's success. This assistance aims to improve partners' abilities to contribute to peace operations, search and rescue, humanitarian assistance operations, and other joint operations that may be necessary in the future. For example, the participation of 13 partners in the multinational Implementation Force in Bosnia reflected initial returns on the small investments we have made in PFP, and provides an indication of the potential for long-term benefits. In FY 98, the administration is requesting $103 million for PFP: $70 million in FMF and $33 million within the DOD request. In Central Europe, foreign assistance funds will support expansion of the Regional Airspace Initiative, which will provide NATO-compatible air traffic control systems in selected countries, English language training, search and rescue equipment, communication and command and control systems, and transportation and logistical support for participation in PFP exercises. Funds will also provide ongoing support for the Baltic Peacekeeping Battalion. In the NIS, we will build upon the foundations that we expect to lay in FY 97 in the areas of language training and communications equipment, to include emphasis on a Central Asia peacekeeping battalion and a Ukrainian-Polish peacekeeping battalion. The combined State/DOD request will continue support for partner participation by relieving some of the logistical and resource deficiencies, equipment obsolescence, and operational shortcomings which have hampered such participation. Central Europe Defense Loans In the interest of contributing to the stability of Europe, the United States has a clear and compelling rationale for nurturing expanded defense cooperation with the friendly, democratic states of Central Europe and the Baltics. Our FY 98 request for $20 million in FMF loan subsidies will provide approximately $402 million in market-rate loans. The Central Europe Defense Loan (CEDL) program will increase our ability to assist the region, in light of limited grant resources, by encouraging creditworthy countries with growing economies to use national funds to meet their defense sustainment modernization needs, ultimately improving compatibility with NATO forces. Although the CEDL contributes to the overall goal of NATO enlargement, it is separate and distinct from our PFP program in that it addresses deeper infrastructure deficiencies, such as lack of airlift capability or incompatible radar and IFF systems. The CEDL program will enhance the defensive military capabilities of Central Europe and Baltic states by assisting in the acquisition of defense equipment and training such as: NATO-compatible airfield navigation aids; computers for defense ministries, individual soldier equipment for peacekeeping or rapid deployment units; transportation equipment, including vehicles and aircraft; ground-based radar upgrades; search-and-rescue equipment; communications modernization; and airfield radars, navigational aids and airfield landing systems. Moreover, by focusing on qualitative improvements in defense infrastructure, this program will allow some of the oversized, Soviet-equipped militaries to continue downsizing and restructuring their forces while maintaining essential defensive capability. The CEDL program will support the trend in the region towards supporting smaller, more capable, and more professional militaries. Key NATO Allies We are also planning to continue our support for two key NATO allies in recognition of their importance in maintaining stability in a region that is critical to U.S. interests. Our FY 98 request of $46 million for the subsidy cost of a total of $297.5 million in FMF loans for Greece and Turkey will support sustainment of U.S.-origin equipment. We are also requesting $50 million in ESF to assist Turkey to address long-term structural reforms necessary to sustain growth, to ease the transition as Turkey joins the EU Customs Union, and to help offset the significant economic costs to Turkey associated with enforcement of U.N. sanctions against Iraq. It would be hard to overstate the importance of Turkey as a U.S. ally. It sits at the crossroads of Europe, the Middle East, and the Newly Independent States of the Former Soviet Union. It plays a critical role in a wide range of issues vital to U.S. interests. Achievement of key U.S. goals in the region will depend largely on our ability to maximize Turkish-U.S. cooperation on a broad range of issues where we have overlapping interests. Among these are stability in the Caucasus and the northern Gulf region, lowering tensions in the Aegean, and a solution in Cyprus. Cooperation on these issues is dependent on preserving Turkey's position as a democratic, secular nation in a region with weak democratic traditions and where political instability prevails. We seek therefore to strengthen Turkey's ability to carry out its essential security role in the region, to bolster its secular democratic tradition through continued emphasis on human rights, and to help its economy grow and prosper. Voluntary Peacekeeping Operations While the bulk of funding for multilateral peacekeeping operations goes for assessed United Nations operations, it is sometimes in the U.S. interest to support, on a voluntary basis, peacekeeping activities that are not U.N.-mandated and/or are not funded by U.N. assessments. The Peacekeeping Operations (PKO) account has a demonstrated capacity, under appropriate circumstances, to separate adversaries, maintain cease-fires, facilitate delivery of humanitarian relief, allow repatriation of refugees and displaced persons, demobilize combatants and create conditions under which political reconciliation may occur and democratic elections be held. This account provides the flexibility to support pro-actively conflict prevention and resolution, multilateral peace operations, sanctions enforcement, and similar efforts outside assessed U.N. peacekeeping operations. The costs to the United States of such voluntary operations are often much lower than in U.N.-assessed operations. For FY 98, we are requesting $90 million in PKO for voluntary peacekeeping activities. In addition to supporting long-term, non-assessed commitments, such as the Multinational Force of Observers (MFO) in the Sinai and the Organization for Security and Cooperation in Europe (OSCE), these funds will be used to promote regional involvement in the resolution of neighboring conflicts. In Africa, for example, our PKO request, combined with a small amount of FMF, will be used to help sustain and enhance the African Crisis Response Force (ACRF) initiative, which seeks to improve and expand the abilities of African militaries to respond quickly to humanitarian crises on the African continent and elsewhere. The ACRF represents a regional application of our new global initiative, the Enhancing International Peacekeeping Capabilities (EIPC), for which the administration is requesting $7 million in FMF. The EIPC will assist selected "focus" countries in improving their capabilities and readiness for peacekeeping operations, thereby reducing the burden on the United States. Finally, the FY 98 PKO request also addresses potential operations in Europe, Africa, Latin America and the Caribbean. Demining Mr. Chairman, the demining program is one of the most important initiatives this Administration has undertaken. As you know, the United States has a compelling interest to promote national and regional security, political stability, and economic development by reducing civilian landmine casualties and their tragic human, social, and economic costs in war-torn countries. In May 1996, President Clinton pledged to strengthen global efforts to clear minefileds through developing better mine detection and mine-clearing technology, and to expand demining training programs in countries with landmines. The problem is enormous: more than 100 million mines have been placed in the last 55 years in almost 70 countries, mainly in Africa and Asia. Clearly, the clearing of landmines represents a major challenge requiring long-term solutions. Since FY 94, we have worked together with DOD to design programs wherein FMF funds for demining are used primarily to provide equipment to complement comprehensive demining training programs funded by DOD humanitarian assistance funds. Together, these resources have begun to develop indigenous capabilities to remove landmines from mine-afflicted countries. Our FY 98 FMF request for $15 million will support demining programs around the world. We will build upon ongoing progress in Angola, Cambodia, Eritrea, Ethiopia, Jordan, Laos, Mozambique, Namibia, Rwanda, and Central America, as well as the U.N. Office for the Coordination of Humanitarian Assistance to Afghanistan, to assist with their mine clearance/mine awareness program.... Confronting Transnational Security Threats With the dissolution of the Soviet Union, the proliferation of weapons of mass destruction, their delivery systems, and advanced conventional weapons now poses the gravest threat to the security of the United States and our allies. As Secretary Albright emphasized to you last month, arms control and non-proliferation efforts remain a key part of our foreign policy strategy to keep America safe. The objectives of our non-proliferation programs are to reduce the risk of war by limiting and reducing destabilizing forces, inhibiting the spread of weapons of mass destruction and delivery systems, and building confidence through measures which enhance transparency and verification of compliance with national commitments. In addition to enhancing our security directly, these measures also support other important U.S. interests, including economic and political reform in Russia and the oilier newly independent states, our economic interests in Asia and the Pacific, and our broader political efforts to resolve long-standing disputes in the Middle East and South Asia. FY 98 Budget Request - Non-proliferation IO&P = International Organizations and Programs NDF = Non-proliferation and Disarmament Fund IAEA = International Atomic Energy Agency KEDO = Korean Energy Development Organization DEF = Defense Enterprise Fund (dollars in millions) IO&P NDF NIS TOTAL NDF 15.000 15.000 Science Centers 15.000 15.000 IAEA Voluntary Contr. 36.000 36.000 KEDO 30.000 30.000 Defense Enterprise Fund 5.000 5.000 Total 66.000 15.000 20.000 101.000 To help us achieve our overall non-proliferation objectives, we are requesting $101 million in FY 98. Through the Non-proliferation and Disarmament Fund (NDF), we will undertake a variety of bilateral assistance programs, including export control assistance. Under the International Organizations and Programs (IO&P) account, we will contribute to the International Atomic Energy Agency (lAEA) and support the Korean Energy Development Organization (KEDO). Under the FREEDOM Support Act, we are also seeking funding for the International Science Center in Russia, the Science and Technology Center in Ukraine, and the Defense Enterprise Fund (DEF). The Non-proliferation and Disarmament Fund The Non-proliferation and Disarmament Fund (NDF) was established in 1994 to implement specific non-proliferation projects. Since its inception, the NDF has funded numerous projects for dismantling and destroying conventional weapons and weapons of mass destruction and their delivery systems, and for strengthening international safeguards, export control, and nuclear smuggling efforts. Current NDF projects include: -- Elimination of SCUD missiles and their launch systems from Romania and Hungary; -- Dismantlement of South Africa's Category I missile production infrastructure; -- Assistance in the procurement of highly enriched uranium stocks from the former Soviet Union; -- Procurement of verifications and safeguards equipment for the IAEA; -- Procurement of seismic arrays in support of the Comprehensive Test Ban Treaty; -- Completion of the Phase I engineering assessment needed to convert Russian plutonium production reactors to a power only mode of operation; -- Provision of export licensing and enforcement assistance to Central Europe, the Baltics, and the former Soviet Union; and -- Successful deployment of an automated system in Poland for tracking the export of sensitive materials. To date, NDF has considered over 90 project proposals with an estimated cost of $120 million, and has approved projects totaling over $30 million. On March 5, we notified Congress of our intent to provide $12.2 million for new NDF activities, leaving an available balance of $10.6 million in the NDF. The FY 98 request of $15 million will continue to provide funding for proposals to achieve our goals of preventing the proliferation of weapons of mass destruction and combating nuclear smuggling. lAEA Voluntary Contribution For the United States, the most critical function of the IAEA is the implementation of safeguards to nuclear activities to deter, through timely detection, the diversion of material and equipment for nuclear weapons purposes. Safeguards establish the critical arms control precedent of voluntary verification of compliance with non-proliferation obligations, including on-site inspection, by a sovereign state. For FY 98, we are requesting a $36 million voluntary contribution to the lAEA within the lO&P account to support safeguards and non-safeguards-related technical assistance. Safeguards are the principal but not exclusive U.S. concern with the IAEA. Another fundamental premise of U.S. nuclear non-proliferation policy, also embodied in the Treaty on the Non-proliferation of Nuclear Weapons, is the commitment to facilitate the exchange of equipment, materials, and scientific and technological information for the peaceful uses of nuclear energy. A significant portion of the U.S. voluntary contribution to the IAEA is used to fulfill this obligation. Because the vast majority of IAEA member states consider this objective of paramount importance, continued U.S. support for technical cooperation is crucial to maintain support for a strong safeguards system. Korean Peninsula Energy Development Organization (KEDO) KEDO is the international consortium established to implement the Agreed Framework between the United States and the Democratic People's Republic of Korea (DPRK) signed on October 21, 1994. The Agreed Framework will ultimately dismantle North Korea's nuclear weapons capability. KEDO's central task is to manage the financing and construction of the light-water reactor (LWR) project in North Korea, to provide annual shipments of heavy fuel oil to the DPRK, and to implement other aspects of the Agreed Framework. The U.S. role in this consortium is to organize and lead KEDO and, with the help of the Republic of Korea (ROK) and Japan, support the consortium in fulfilling its tasks. Our FY 98 request for $30 million within the IO&P account for KEDO is essential to finance KEDO's administrative expenses and projects, particularly the provision of heavy fuel oil to the DPRK. Support for the LWR project and the majority of KEDO administrative expenses and heavy fuel oil deliveries will come from cash and in-kind contributions from other KEDO members, especially the ROK and Japan. Eleven countries, spread over five continents, have become members of KEDO, reflecting the organization's global character, composition, and significance. The U.S. contribution is necessary to demonstrate U.S. leadership and to supplement and leverage contributions from other countries. Without this funding, KEDO will not be able to operate or carry out its objectives, thereby weakening the credibility of U.S. leadership, jeopardizing the implementation of the Agreed Framework, and contributing to rising security tensions on the Korean Peninsula. Full funding of this request is the best way to promote U.S. objectives for peace, security, and nuclear non-proliferation in Northeast Asia. International Science and Technology Centers The International Science and Technology Center (ISTC) in Moscow, operational since 1994, and the Science and Technology Center in Ukraine (SYCU), which began to fund scientific research in early 1996, help to counter the weapons expertise proliferation threat by putting former Soviet weapons scientists to work on civilian projects. These projects benefit all Science Center members and partners, including -- in many instances -- U.S. universities, national laboratories and corporations, which participate as unfunded partners. This program seeks: 1) to encourage the transition to market-based economies; 2) to help find solutions to nationally- and internationally-recognized problems, such as nuclear safety, energy production and environmental protection; and 3) to integrate NIS scientists and engineers into the international community. In FY 98, we anticipate providing up to $15 million under the Freedom Support Act to continue the important work of these two centers. The European Union and Japan also provide voluntary contributions to the ISTC, and Sweden and Canada contribute to the STCU. Procedures have recently been implemented to allow other governments, inter-governmental organizations and NGOs (including the private sector) to participate in Science Center activities. To date, the ISTC has funded 202 projects in Russia, Kazakstan, Georgia, Belarus and Armenia, with the participation of nearly 17,000 scientists and engineers, the majority of whom have expertise on weapons of mass destruction or their delivery systems. Defense Enterprise Fund Our FY 98 assistance for the NIS includes $5 million for the U.S. contribution to the Defense Enterprise Fund (DEF), which is now expected to reach self-sustainability in 1999. The DEF, initially authorized by Congress and established with a grant from the DOD Cooperative Threat Reduction (Nunn-Lugar) program, was incorporated as a private, non-profit venture capital fund in March 1994. Responsibility for funding the DEF shifted to the State Department in FY 97. Like other enterprise funds, the DEF assists the NIS in the development of successful private sector entities which contribute to a stable market economy. However, the DEF focuses on the privatization of weapons of mass destruction (WMD)-related defense industries and conversion of WMD-related military technologies and capabilities into civilian activities. It provides both equity investments and loans to qualified joint venture initiatives which include personnel and/or facilities currently or formerly involved in research, development, production or operation, and support of the former Soviet Union WMD-related defense sector. The DEF encourages private sector participation in the ownership and management of the entities in which the DEF invests, and only makes investments involving enterprises committed to privatization. U.S. assistance to the DEF significantly leverages private U.S. investment: every $1 we have provided to date has leveraged an average of $5 of private investment. Thus, the DEF supports both the national security objective of non-proliferation -- eliminating WMD production capability -- as well as economic reform objectives by promoting the development of market economies. Mr. Chairman, these non-proliferation programs are both critical for the security of America and extremely cost effective. By making very small investments today to help other countries prevent the spread of sensitive materials and technologies, we obviate the need to spend larger sums in the future to protect ourselves against weapons that have fallen into the wrong hands. Conclusion Let me conclude by returning to the central point of my presentation: the funding that we are requesting directly increases the security of Americans and advances our direct interest in a stable, peaceful and prosperous international system. We undertake these programs to achieve specific objectives, each of which can be measured in terms of their successes, and each of which makes America and the world safer. U.S. security depends on promoting peace in the Middle East, building a new security order in Europe, preventing the spread of dangerous weapons, and helping foster emerging democracies. Foreign assistance is an essential tool to pursue American interests abroad and our security at home. Without adequate funding, strong American leadership in the world and our ability to protect our vital interests will be at risk. Strengthening our diplomatic efforts to address these threats now will help avoid the far greater costs, in lives as well as resources, of military interventions later. The support of this committee is essential to achieving those goals and we are ready to work closely with the committee and staff to fully address any concerns and questions that you and they may have. Mr. Chairman, I wish to thank the members of the committee for the opportunity to provide testimony on the FY 98 budget request, and would be pleased now to answer any questions you may have.