the face of the Earth that are not tyrants or wars, but are disse and pestilence, poverty, ignorance.

The Millennium Challenge Account, our HIV-AIDS work, the onderful work done by USAID, all of these efforts are so impornt in creating the kind of world we want to live in, and they often unsung. People do not often write headline stories about food ing delivered or inoculations being administered or great people t in USAID-land or in our embassies that, day to day, go and get is work done for the American people.

On their behalf, I thank you for your support, and I am prepared · your questions.

[The prepared statement of Secretary Powell follows:]

PREPARED STATEMENT OF HON. COLIN L. POWELL, SECRETARY OF STATE

Mr. Chairman, members of the committee, thank you for the opportunity to testify the State Department's portion of the President's Budget Request for Fiscal Year )5.

The President's FY2005 International Affairs Budget for the Department of State, AID, and other foreign affairs agencies totals $31.5 billion, broken down as fol

7S:

› Foreign Operations-$21.3 billion

› State Operations-$8.4 billion

› P.L. 480 Food Aid-$1.2 billion

› International Broadcasting-$569 million

› U.S. Institute of Peace-$22 million

Mr. Chairman, the President's top foreign policy priority is winning the war on rorism. Forty-eight percent of the President's budget for foreign affairs directly pports that priority by assisting our allies and strengthening the United States' lomatic posture. For example: $1.2 billion supports Afghanistan reconstruction, curity and democracy building, and more than $5.7 billion is provided for assistce to countries around the world that have joined us in the war on terrorism, and 5 billion indirectly supports the war on terrorism by strengthening our ability to spond to emergencies and conflict situations. Moreover, $190 million is aimed at panding democracy in the Greater Middle East, in part to help alleviate the condins that spawn terrorists.

In addition, $5.3 billion is targeted for the President's bold initiatives to fight V/AIDS and create the Millennium Challenge Corporation, both of which will suprt stability and improve the quality of life for the world's poor-and, again, help relieve conditions that cause resentment and despair.

Mr. Chairman, let me elaborate a bit on how some of these dollars will be spent.

WINNING THE WAR ON TERRORISM

Winning on the battlefield with our superb military forces is just one step in deting terrorism. To eradicate terrorism, the United States must help create stable vernments in nations that once supported terrorism, go after terrorist support echanisms as well as the terrorists themselves, and help alleviate conditions in e world that enable terrorists to bring in new recruits. To this end, in FY2005 e State Department and USAID will continue to focus on the reconstruction of q and Afghanistan, support our coalition partners to further our unterterrorism, law enforcement and intelligence cooperation, and expand democcy and help generate prosperity, especially in the Middle East.

ilding a Free and Prosperous Iraq

The United States faces one of its greatest challenges in developing a secure, free d prosperous Iraq. The USG is contributing almost $21 billion in reconstruction nds and humanitarian assistance to this effort. The World Bank and the Intertional Monetary Fund are expected to provide another $4 to $8 billion in loans d grants over the next three years. These resources, coupled with the growing astance of international donors, will ease the transition from dictatorship to democ

The Coalition Provisional Authority (CPA) and the Iraqi Governing Council (IGC) have made great strides in the areas of security, economic stability and growth, and democratization. Iraqi security forces now comprise more than half of the total security forces in the country. In addition, the CPA has established a New Iraqi Army, issued a new currency and refurbished and equipped schools and hospitals. And, as you know, the CPA is taking steps to return sovereignty to the Iraqi people this

summer.

Much work remains to be done. Working with our coalition partners, we will continue to train Iraqi police, border guards, the Civil Defense Corps and the Army in order to ensure the country's security as we effect a timely transition to democratic self-governance and a stable future.

At the same time, we are helping provide critical infrastructure, including clean water, electricity and reliable telecommunications systems which are essential for meeting basic human needs as well as for economic and democratic development. Thousands of brave Americans, in uniform and in mufti, are in Iraq now working tirelessly to help Iraqis succeed in this historic effort. Alongside their military colleagues, USAID, State Department and the Departments of the Treasury and Commerce are working to implement infrastructure, democracy building, education, health and economic development programs. These efforts are producing real progress in Iraq.

Winning the Peace in Afghanistan

Mr. Chairman, Afghanistan is another high priority for this Administration. The U.S. is committed to helping build a stable and democratic Afghanistan that is free from terror and no longer harbors threats to our security. After we and our coalition partners defeated the Taliban government, we faced the daunting task of helping the Afghan people rebuild their country. We have demonstrated our commitment to this effort by providing over $3.7 billion in economic and security assistance to Afghanistan since 2001.

Through our assistance and the assistance of the international community, the government of Afghanistan is successfully navigating the transition that began in October 2001. Afghanistan adopted a constitution last month and is preparing for democratic national elections in June. With technical assistance from the U.S., Afghanistan successfully introduced a new stable currency in October 2002 and is working to improve revenue collection in the provinces.

The lives of women and girls are improving as women pursue economic and political opportunities and girls return to school. Since 2001, the United States has rehabilitated 205 schools and 140 health clinics and trained thirteen battalions of the Afghan National Army (ANA). Also, President Bush's commitment to de-mine and repave the entire stretch of the Kabul-Kandahar highway was fulfilled. The road had not been functional for over 20 years. What was once a 30-hour journey can now be accomplished in 5 or 6 hours.

While the Afghanistan of today is very different from the Afghanistan of September 2001, there is still much left to accomplish. In the near-term, the United States will assist the government of Afghanistan in its preparations for elections in June to ensure that they are free and fair. To demonstrate tangible benefits to the Afghan people, we will continue to implement assistance on an accelerated basis. The FY2005 Budget contains $1.2 billion in assistance for Afghanistan that will be focused on education, health, infrastructure, and assistance to the ANA, including drawdown authority and Department of Defense "train and equip." For example, U.S. assistance efforts will concentrate on rehabilitation and construction of an additional 275 schools and 150 health clinics by June 2004, and complete training and equipping of fifteen army battalions. The U.S. will also extend the Kabul-Kandahar road to Herat so that people and commerce will be linked East and West across Afghanistan with a ground transportation link between three of the largest cities. Support for Our Coalition Partners

As part of the war on terrorism, President Bush established a clear policy to work with other nations to meet the challenges of defeating terror networks with global reach. This commitment extends to the front-line states that have joined us in the war on terrorism and to those nations that are key to successful transitions to democracy in Iraq and Afghanistan.

Our assistance enables countries cooperating closely with the United States to prevent future attacks, improve counter-terrorism capabilities and tighten border controls. As I indicated earlier, the FY2005 Budget for International Affairs provides more than $5.7 billion for assistance to countries around the world that have

J.S. assistance has also resulted in unparalleled law enforcement and intelligence peration that has destroyed terrorist cells, disrupted terrorist operations and preited attacks. There are many counterterrorism successes in cooperating countries 1 international organizations. For example:

Pakistan has apprehended more than 500 al Qaeda terrorists and members of the Taliban through the leadership of President Musharraf, stronger border security measures and law enforcement cooperation throughout the country. Jordan continues its strong counterterrorism efforts, including arresting two individuals with links to al Qaeda who admitted responsibility for the October 2002 murder of USAID Foreign Service officer Lawrence Foley in Amman. The North Atlantic Treaty Organization has endorsed an ambitious transformation agenda designed to enhance its capabilities by increasing deployment speed and agility to address new threats of terrorism.

Colombia has developed a democratic security strategy as a blueprint for waging a unified, aggressive counterterror-counternarcotics campaign against designated foreign terrorist organizations and other illegal, armed groups.

The U.S. and its Southeast Asian allies and friends have made significant adices against the regional terrorist organization Jemaah Islamiyah which was rensible for the Bali attack in 2002 that killed more than 200 people. In early Aust 2003, an Indonesian court convicted and sentenced to death a key figure in it bombing.

Since September 11, 2001, 173 countries have issued orders to freeze the assets terrorists. As a result, terror networks have lost access to nearly $200 million in re than 1,400 terrorist-related accounts around the world. The World Bank, ernational Monetary Fund and other multilateral development banks have also yed an important role in this fight by strengthening international defenses ainst terrorist finance.

While progress has been made attacking terrorist organizations both globally and ionally, much work remains to be done. The FY2005 President's Budget strengthour financial commitment to our coalition partners to wage the global war on ror. Highlights of the President's request include $700 million for Pakistan to p advance security and economic opportunity for Pakistan's citizens, including a lti-year educational support program; $461 million for Jordan to increase econic opportunities for Jordanian communities and strengthen Jordan's ability to ure its borders; and $577 million for Colombia to support President Uribe's unid campaign against drugs and terrorism.

In September 2003, at the United Nations, President Bush said: "All governments at support terror are complicit in a war against civilization. No government ould ignore the threat of terror, because to look the other way gives terrorists the ance to regroup and recruit and prepare. And all nations that fight terror, as if e lives of their own people depend on it, will earn the favorable judgment of hisy." We are helping countries to that judgment.

Mr. Chairman, one of the aspects of the War on Terrorism that gives us a parular sense of urgency is proliferation of weapons of mass destruction. These terle weapons are becoming easier to acquire, build, hide, and transport.

Yesterday, President Bush spoke at the National Defense University (NDU) and clined the Administration's approach to this growing danger. The President deibed how we have worked for years to uncover one particular nefarious network— at of A.Q. Khan.

Men and women of our own and other intelligence services have done superb and en very dangerous work to disclose these operations to the light of day. Now, we d our friends and allies are working around the clock to get all the details of this Ework and to shut it down, permanently.

We know that this network fed nuclear technology to Libya, Iran, and North

rea.

At NDU yesterday, President Bush proposed five measures to strengthen the rld's efforts to prevent the spread of WMD:

• Expand the PSI to address more than shipments and transfers; even to take direct action against proliferation networks.

· Call on all nations to strengthen the laws and international controls that govern proliferation.

Expand our efforts to keep Cold War weapons and other dangerous materials out of the hands of terrorists.

the cover of civilian nuclear programs.

• And, finally, disallow countries under investigation for violating nuclear nonproliferation treaties from serving on the IAEA Board of Governors.

As the President said yesterday, the nexus of terrorists and WMD is a new and unique threat. It comes not with ships and fighters and tanks and divisions, but clandestinely, in the dark of the night. But the consequences are devastating. No President can afford to ignore such a threat.

Expansion of Democracy in the Middle East

We believe that expanding democracy in the Middle East is critical to eradicating international terrorism. But in many nations of the Middle East, democracy is at best an unwelcome guest and at worst a total stranger. The U.S. continues to increase its diplomatic and assistance activities in the Middle East to promote democratic voices-focusing particularly on women-in the political process, support increased accountability in government, assist local efforts to strengthen respect for the rule of law, assist independent media, and invest in the next generation of lead

ers.

As the President emphasized in his speech last November at the National Endowment for Democracy (NED), reform in the Middle East is of vital importance to the future of peace and stability in that region as well as to the national security of the United States. As long as freedom and democracy do not flourish in the Middle East, resentment and despair will continue to grow—and the region will serve as an exporter of violence and terror to free nations. For the United States, promoting democracy and freedom in the Middle East is a difficult, yet essential calling.

There are promising developments upon which to build. The government of Jordan, for example, is committed to accelerating reform. Results include free and fair elections, three women holding Cabinet Minister positions for the first time in Jordan's history, and major investments in education. Positive developments also can be found in Morocco, which held parliamentary elections last year that were acclaimed as free, fair and transparent.

In April 2003, the Administration launched the Middle East Partnership Initiative (MEPI), an intensive inter-agency effort to support political and education reform and economic development in the region. The President continues his commitment by providing $150 million in FY2005 for these efforts.

To enhance this USG effort with a key NGO, the President has doubled the NED budget to $80 million specifically to create a Greater Middle East Leadership and Democracy Initiative. NED is a leader in efforts to strengthen democracy and tolerance around the world through its work with civil society. We want that work to flourish.

As President Bush said in his November speech at NED: "The United States has adopted a new policy, a forward strategy of freedom in the Middle East. This strategy requires the same persistence and energy and idealism we have shown before. And it will yield the same results. As in Europe, as in Asia, as in every region of the world, the advance of freedom leads to peace.'

Public Diplomacy in the Middle East

And the advance of freedom is aided decisively by the words of freedom. Democracy flourishes with freedom of information and exposure to diverse ideas. The President's FY2005 Budget promotes expansion of democracy in the Middle East by providing public access to information through exchange programs and the Middle East Television Network.

New public diplomacy efforts including the Partnerships for Learning (P4L) and Youth Exchange and Study (YES) initiatives have been created to reach a younger and more diverse audience through academic and professional exchange programs. In FY2005, the P4L and the YES programs, funded at $61 million, will focus more on youth of the Muslim world, specifically targeting non-traditional, non-elite, often female and non-English speaking youth.

U.S. broadcasting initiatives in the Middle East encourage the development of a free press in the American tradition and provide Middle Eastern viewers and listeners access to a variety of ideas. The U.S. revamped its Arabic radio broadcasts in 2002 with the introduction of Radio Sawa, which broadcasts to the region twentyfour hours a day. As a result, audience size for our Arabic broadcasting increased from under 2 percent in 2001 to over 30 percent in 2003. Based on this successful model, the U.S. introduced Radio Farda to broadcast to Iran around the clock. Building on this success, the FY2005 President's Budget Request provides over $70 million for Arabic and Persian radio and television broadcasts to the Middle East.

s of viewers and will provide a means for Middle Easterners to better undernd democracy and free market policies, as well as the U.S. and its people.

OUR NEW APPROACH TO GLOBAL PROSPERITY

resident Bush's approach to global economic growth emphasizes proven Amer1 values: governing justly, investing in people, and encouraging economic free1. President Bush has pledged to increase economic engagement with and supt for countries that commit to these goals through an ambitious trade agenda I new approaches to development assistance focusing on country performance and asurable results.

· Millennium Challenge Account (MCA)

n February of 2003, we sent the Congress a budget request for the MCA and legtion to authorize the creation of the Millennium Challenge Corporation (MCC), agency designed to support innovative development strategies and to ensure acntability for results.

'he MCC will fund only proposals for grants that have clear, measurable objeces, a sound financial plan and indicators for assessing progress.

The Congress appropriated $1 billion for MCA for FY2004. The FY2005 Budget uest of $2.5 billion makes a significant second year increase to the MCA and es the way to reaching the President's commitment of $5 billion in FY2006.

de Promotion Authority (TPA)

'resident Bush recognizes that the fastest, surest way to move from poverty to sperity is through expanded and freer trade. America and the world benefit from e trade. For this reason, one of his first actions upon taking office in 2001 was seek TPA, allowing him to negotiate market-opening agreements with other counes. The President aims to continue vigorously to pursue his free trade agenda in er to lift developing countries out of poverty, while creating high-paying job optunities for America's workers, businesses, farmers and ranchers and benefiting Americans through lower prices and wider choices. As the President said in ril, 2001 at the Organization of American States: "Open trade fuels the engines economic growth that creates new jobs and new income. It applies the power of rkets to the needs of the poor. It spurs the process of economic and legal reform. helps dismantle protectionist bureaucracies that stifle incentive and invite corrupn. And open trade reinforces the habits of liberty that sustain democracy over the g term.'

Since receiving TPA in 2002, the President has made good on his promise, comting free trade agreements with Chile and Singapore, which were quickly apved by Congress and went into effect on January 1. We have recently completed gotiations with five Central American countries on the Central America Free ade Agreement (CAFTA) and are working to bring the Dominican Republic into t agreement. Earlier this week, we announced the conclusion of an agreement h Australia. Negotiations are ongoing with Morocco, the Southern African Cuss Union (SACU), Bahrain, and on the Free Trade Agreement of the Americas CAA). We are concluding comprehensive agreements that include market access goods and services, strong intellectual property and investment provisions, and lude commitments for strong environmental and labor protections by our parts. These arrangements benefit Americans and our trading partners. Building on this significant progress, the President intends to launch free trade gotiations with Thailand, Panama, and the Andean countries of Colombia, Ecua, Bolivia and Peru. The President has also stated his vision for a Middle East ee Trade Area by 2013, to ignite economic growth and expand opportunity in this cical region. Finally, the President is committed to wrapping up successfully the rld Trade Organization's Doha agenda. The United States has taken the lead in energizing these negotiations following the Cancun Ministerial.

CARING FOR THE WORLD'S MOST VULNERABLE CITIZENS

ergency Plan for AIDS Relief

When President Bush took office in January 2001, the HIV/AIDS pandemic was an all time high, with the estimated number of adults and children living with V/AIDS globally at 37 million, with 68 percent of those individuals living in subnaran Africa. From fiscal years 1993 to 2001 the total U.S. Government global OS budget was about $1.9 billion. As part of the Emergency Plan for AIDS Relief, · President proposed $2 billion in fiscal year 2004 as the first installment of a