Senate Foreign Relations Committee Holds Hearing on Millennium Challenge Account

BIDEN:
Thank you very much.

Gentlemen, my absence was not a lack of interest. Secretary Ridge, Attorney General Ashcroft and the director of the FBI are before my other committee downstairs. So I apologize, Mr. Chairman, for being late.

I'd like to follow up on the question that Senator Feingold asked about the test runs, which seemed to me to be fairly significant indices of how this is likely to work. My staff informs me that, at my request to them, they have asked about this and what some of these results are.

I'm not particularly looking for the names of countries which cross the threshold. But I want to get the sense from you all of whether or not there is reason to believe, as we move in this direction, in light of the fact we spent an awful lot of time in this committee, in the previous several years under a former chairman, reorganizing this whole account, if you will, under the aegis of 8,000 people administering aid, et cetera, and this massive reorganization, -- which we quote "massive"—this significant reorganization of the State Department.

So can you give us some more insight without telling us which countries cross the threshold? What should we, who are inclined to support what you're talking about here—I mean, I don't think any of us disagree that study after study, for the past 15 to 20 years, shows that our aid, its efficacy is in direct proportion to the fertile ground upon which it falls, whether or not it's used for social purposes, whether there is an infrastructure to distribute it and so on and so forth. We all agree on that.

So we're on the same page. And Mr. Natsios knows a lot about this. He's been one of the people who have talked about this in the past, prior to his present incarnation and his present responsibilities.

But it seems to me that the very committee you're asking for the reauthorization or the authorization to move in this direction should get some sense of what the runs have indicated. What do you anticipate?

This is one—you know, you get a "Get out of jail free" card in this one. I mean, if it doesn't turn out exactly like you think, that's okay. I mean, we understand.

But can you give us a greater sense of what, if you're a betting man, based on the runs, what we would look forward to in terms of countries that would be able to be recipients, that would be able to, once this is up and running, that would have a more efficacious use of our limited resources?

LARSON:
Thank you, senator. I appreciate the way that you phrased your question because we frankly have been concerned that if the administration started publishing lists at this stage, at a point when we don't have what will be the latest data, we're going to start raising expectations, perhaps, on the part of countries that will later find out ...

BIDEN:
Agreed. I would suggest, Mr. Chairman, that maybe you consider—I would propose for your consideration that the study and the list be submitted to us in the classified forum. I mean, it doesn't have to be—you know, in a non-public would be helpful to us.

But in an open forum, if you could give us some sense of—I would actually make that request, if you would consider that, that you give us that. And we would treat it as classified.

And it's not that it's a national security secret. But it is, practically speaking, a little bit like why all the time that we've worked on, for example, expansion of NATO, it is not a good thing to put out the list that we're looking to because it creates expectations. And when expectations aren't met, then there are consequences.

But at any rate, can you describe, in more generic form, the percentage prospects that you think of the nations who we are . .

LARSON:
Yes, sir. And very briefly, what tends to happen, is that you get a group of roughly 10 to a dozen countries—obviously, by definition, all very poor countries with per capita incomes under $1,440 or so—several African countries, some in this hemisphere. And by definition, they are all countries that have shown themselves to be performing relatively well under these indicators in the areas of government, social investment and their own economic policy framework.

BIDEN:
So the bottom line is you think that there are enough potential recipients that our assistance will have some impact that goes beyond—arguably—a single country? In other words, this notion that—I assume one of our objectives here is to promote—again, if I can make an analogy to a military alliance.

One of the greatest things for the expansion of NATO, in my view, was the so-called Perry Principles, which required nations to settle non-military issues in order to qualify. I would respectfully suggest that the Hungarians would have never worked out their differences with the Romania. I suggest that Poland would have never really worked out its border disputes. I suspect that a lot of things would not have occurred were it not for the carrot out there of NATO and the realization you had to meet this requirement in order to be eligible for consideration.

So I assume one our purposes here is not only to identify nations that could qualify now, but that when other nations realize that the need to qualify requires them to have a system that is more consistent with the principles we're laying out here, that this will grow? Our goal is for the number of recipient nations to grow, not to diminish, correct? I mean, I assume we're all on the same page on that, aren't we?

LARSON:
Well, you're correct both in your analysis. You're correct in the assumption we'd like to see this number grow. And you are also correct in suggesting that, even now, each of us are seeing very dramatic evidence that countries are looking at their policies with exactly the same results that you would hope for. "We had better do a better job on governance or some other issue if we hope to qualify for this program."

BIDEN:
Well, I wish you luck. I have a statement—I mean, a statement, I beg your pardon, Mr. Chairman. I have a question I would like to submit in writing, so I don't trespass on Senator Alexander's time, about why integrating within an existing structure does not work.

I mean, we went through this reorganization. And why is the administration suggesting we establish a new aid organization within the existing administration? And as we work through that in your answers, maybe you could talk a little bit about: are you going to have to call on some of the 8,000 folks in AID in order to be accommodate your ability to function?