getting assets to the material. here's what the report said. i quote, there remains significant steps and notably the weak implementation of the resolutions by china. china remains vulnerable to smuggling of vital goods for the nuclear program and the front companies to buy from chinese or western high technology located within the borders. there remain concerns about the continued ability to transship goods through countries with weak implementations or trade controls. commonly called countries of transit concern. the basic question and you may have to elaborate on it and anything you can say about the efforts for china to do what it should do with the transfer? >> it is one of the highest priorities and we are working

with the chinese. they made some progress. they have eliminated some of the companies and were engaging in the trade. they have not done everything that we would like to see them do and we will get you more details and some of that will have to come in a classified section, but i will respond to that. >> thanks very much. >> senator rubio. >> thank you. good afternoon, how are you? a few months ago i had the unique opportunity to travel to libya in the aftermath of that transition. i don't have a point of reference having never been there before, but it was startling to watch pro american graffiti and people thanking americans. they knew who was with them and clearly knew who turned their pack on them and i hope it pays in the future. with the u.s. involvement, my

question is two part. how is that going in terms of the role and the money they are spending and how they anticipate with libya. the second is that there will be a transition in syria. what lessons we a or are learning from the inexperience that as far as what role we can play. making sure that the sophisticated weapons don't fall in the wrong hands. and how is the transition going as far as our and what lessons that can be applied to a syrian transition soon. >> thank you for that visit. i remember it well getting briefed about it and you are right. i think the united states has a very important opportunity with libya and tunisia and al gearia to morocco.

if we do what we need to do, we can help them move towards democracy and produce results for people. libya is more challenging because gadhafi destroyed all institutions. they don't have institutions that they can remove people from and fill people with. they are making progress and the prime minister will be coming to visit in a few weeks. i would urge if it's not on the schedule that he meet with members of this committee and explain to you what he and his government are doing. they cooperated with us ongoing after the man pads. we implemented a plan that we worked through with them.

we are also working with them to fulfill the signing. they face problems in combining the militias into a coherent organized military presence. we are supporting them in the efforts to do so. i think that we have got a chance here to respond to their positive attitude and bring dividends in how they develop, but our own standing and leadership and reintegrating into civilian and into the security services is the biggest challenge.

we are working with them on trying to help with the wounded warriors something that is important to several members of the senate. the people in libya seem to be optimistic about how things are going, but it's they are working as part r hard as they can and it's in our interest to support them. with respect to syria, it's a more difficult set of circumstances. i am working for a meeting where about 70 countries and organizations were present. the potential of supporting the

assistance they need and ratc t ratcheting up pressure and the eu had tougher sanctions yesterday. that's what we are all working on. there was a debate about whether there was a feasible way of trying to help the people who are under assault by the regime to refend themselves. this is at an early plan that we can point to. >> thank you. my last question is involving a pep far which has enjoyed by bipartisan support. how does the current projections which i think has a level of reduction allow us and you may know the answer and if you don't, i will be happy to get it from you guys later, but does that put us on track for the

life-sustaining treatments? does it keep us on that trajectory? >> it does and i would welcome with you an opportunity to provide you with specific information. i wanted to say we have brought down the cost of the drugs and leveraged support for the global fund to do the same. i am confident we are on the track to bringing down the infections and bringing up the number of people on treatment. we have a chance to have an aids-free generation. the evidence is compelling that treating people very early helps to prevent aids. the request that we have given to you will give us the maximum

impact in fighting hiv-aids. this had bipartisan support. this was a really historic program started under the push administration and begun by president bush fully supported on a bipartisan basis. you go into subsahara and africa. people have a positive view of the united states. thank you, mr. chairman. >> i have to apologize for the opening remarks and i'm sure you make sure. ex-possessing my agreement with the syrian situation. it's complex geographically and

diplomatically and we are right to assume no matter what we end up doing and one of the more clarifying moments of my life was when i was a journalist in beirut. you remember how complicated that was and in the middle of a firefight, never get involved in a five-sided argument. i would like to ask you a couple of questions with respect to this region. i'm interested in learning more about this middle east fund. 770 mail yon. i think it's about two billion.

the considerable money we give to other countries and the region. i'm kurns to learn what particular ways you see this as working. >> this fund came out of two experiences. one experience about what happened this past year when we were trying to carve out money for the needs of tunisia and libya and egypt and how we could make sure we were demonstrating leadership whether humanitarian or in the case of enterprise funds, the kinds of things that send a clear message to the transformations. the second source of experience is what we did at the fall of the soviet union.

back in 1989 we had support to provide assistant for huh garry and poland and gave us flexibility. we could be agile about it. we are asking here to give us some of that flexibility and look at projects based on rigorous analysis and what could work. helping the democratic transformations. i just got back from tunisia and here's an islamist government saying all the right things on human and women's rights and economic reform. they have a huge budget gap by their standards. it's a billion dollars. a huge gap and a thought out plan about how to reform the economy and open it up. they have to get help about where they are and where they are headed.

they said what can the united states do and what can you do with other countries. that's the kind of request we want to respond to. that's in our interest to do so. they have bilateral and regional countries. that would be as smart as possible. >> we have this budget going to iraq and pakistan. we have 4.8 billion into iraq and 2 preponderance 8 billion for diplomatic funds. 4.6 billion in afghanistan and 2.4 billion to pakistan. that actually reflects an increase in funding for pakistani military. as compared to last year. the first question i would have

goes to correspondents that initiated and express concerns about how pakistan is expanding their program even as our assistance has continued over the years. wanting to know whether we have a clear way to have a fire wall in the monies that are going into pakistan so that they don't assist an expansion of the nuclear program. >> we have constructed one. i think the fair question is even with a fire wall, does that permit the government to divert funds that should be spent for health education, energy, et cetera to that program and remains a serious concern of mine, senator. part of the ongoing to tough

dialogue with pakistan is around the reforms they need to make for their own people. they invested the great bulk of the revenues into the military establishment including the nuclear program to the great cost of providing great education and health care and electricity and the kinds of things that demonstrate to the people they had a government that number one, cared about them and number two, produced them. i can answer the direct question. we have a fire wall and is it at the end of the dialogue and we will keep pressing hard to make sure that the imf and the world bank and we and others are working towards the reforms that will stabilize pakistan for the long-term. >> we may have more dialogue. we have more on the subject.

it's something we should really make the highest priorities. it's on the pakistani side. you can't not look at the way they expanded the nuclear program and not want to try to figure out if we are assisting it. i am running out of time. i am going to say here that i hope we can find the right off-ramps in terms of the amount of money that we are spending on this traditional occupations and in iraq and afghanistan for the good of our own country and budge net a way that doesn't destabili destabilize.

i appreciate everything you have been doing. >> on the last question of the off-ramps, we are very commitmented to that and i would like to have ideas about that. i would welcome them and i want to thank you for the great preliminary ground work you did with respect to burma. it made a big difference. >> thank you very much and i look forward to the meeting with some of your people. thank you. >> thank you, senator webb. senator demint. >> thank you for the way you represented us around the world and for being here today. i certainly agree with you that american power is a stabilizing force around the world and i am sure you will agree that any perception of american weakness is a destabilizing force around the world. in some circles today, because much a perception of financial

trouble here at home and our determination to be a stabilizing forces in question. and the budget throughout the federal government and not so much as i once did with what we want to do or some shdo. what we are financially able to do given the money that we will be spending through the state department is either borrowed or printed money. we have to make that money work for us. certainly facilitating business travel in the trade and the key to american interest. i do question looking in history that our attempts to buy friends and a lot of parts of the world have not appeared as successful. it does seem that countries we

spend decades supporting are willing to turn on us relatively quickly. i am very concerned that how we spend our money, particularly the fkd that we don't have enough to do the things we need to do domestically. we have a number of questions about the budget and i will turn to another one. maybe it will shed light on others. especially in the context of our money meaning something and we mean what we say. last year the u.s. pulled its funds in accordance to u.s. law. when they granted membership to palestine, they have not changed, butted administration is requesting $78 million and a waiver to fund. i would like you you to take a minute to explain.

and asking for a waiver of u.s. laws and instead of insisting that they comply with un agreements about palestine going on for decades. >> senator, thank you. our position is absolutely clear. there cannot be premature recognition of palestinians in any international body and that's not the way to bring about lasting peace with a negotiation over a two-state solution. we believed as we said at the time that palestinian membership was premature and unhelpful in the goal we were seeking. we continue to make that clear and tell everyone that we are against it and we have

legislation that requires us to withdraw. the state department does believe that some benefits accrue to the united states in membership in these organizations. and as was pointed out in my earlier hearing before the senate foreign ops subcommittee, israel remains a member of unesco, despite palestinian membership. and in our conversations with israelis, they basically point out that there are a number of areas where unesco action is helpful to the israelis. so, you know, this is -- this is a -- we have very clear instructions from our legislation, but we also think it is in america's interest to do things like holocaust education programs, which unesco

does, stand up for the freedom of press and expression. so the waiver would give us the opportunity to evaluate specific circumstances and it would also give us the chance to react if by some unforeseen circumstance some of the major u.n. organizations like the world health organization or the international atomic energy agency were to be so wrong headed to extend membership. those are organizations that we really have a big stake in. so the policy is one we agree with. we obviously followed legislation. but as we have done in many situations over the years, providing some national security waiver would allow us to make case by case decisions. >> don't you -- aren't you afraid that this is going to send a signal to the united

nations, to the whole world, that our threats don't mean anything? i mean, we warned unesco not to take this action. you warned them personally. and for us, less than a year later to come back and say, well, never mind, we're going to fund you again, it just seems like we're just telling the world that our words don't mean anything. >> you know, i think senator that, you know, all of these issues that we're confronted with have different, you know, different factors. certainly we made it abundantly clear that we would stand in the way at the security council -- a solution with israel.

we do worry that there are a lot of initiatives that are und undertaken by these organizations that directly help israel, directly contribute to the potential for negotiations and then there are other actions that are very much in the united states' interests. in were some new flu virus that arose out of somewhere in the world that was killing people on the way to the united states, working with the world health organization would be in the interests of, you know, our people. so i agree with you we have taken a stand, it is based in our law. but we can't predict the future and i think some flexibility that would be only exercised very prudently might be worthwhile considering. >> thank you. thanks again for your service. >> thank you, sir. >> senator shaheen. >> thank you, mr. chairman. madam secretary, i want to echo my colleagues' thanks for all of your effective and hard working

service for our country around the world. and i would also like to just echo what you had to say about the role that our embassies play around the world in promoting american trade and business interests. my office had the opportunity to help organize a trade mission to india, and the business people who went on that mission would not have had the same prospects for meetings, for opportunities to do future business without the support from our embassy in india. so thank you very much for that effort. as i look at the top five recipients of u.s. foreign assistance and senator lugar read those earlier, number two on that list is afghanistan, which has been in the headlines in the last several weeks, because of concerns about trust

between the united states and afghanistan, certainly on the military side. there have been concerns raised about whether our strategy of being able to turn over security to the afghan forces has been an effective one. and i wonder if you could talk about what you're seeing on the economic foreign assistance side and whether you see those same kinds of strains and what concerns you have about how our efforts there are working. >> well, senator, thank you for the kind comments about the work of the embassy in india. and i well remember, you know, how difficult it was for you having planned such an excellent trip and then being kept because of senate business unable to go. but, you know that is what we like to do to try to promote

that kind of interaction and we think it pays off. with respect to afghanistan, you know, we do see progress on the civilian side, in terms of what our -- our investment and the investments of our partners has brought. there is still a very long way to go, but if you look at, you know, health indicators, maternal mortality has dropped significantly in afghanistan. and i think that, you know, that could not have been possible without investments on the part of the u.s. and others, but also a real commitment on the part of afghans themselves. you know, education, youenergy,. so, you know, we do see progress, but i hasten to add we see a lot of instability and we see a very difficult road ahead for afghanistan. you know, the transition that is agreed to do have the end of

combat missions and troops one to try to support because like we saw in iraq, when 2014 comes, and troops le nato isaf, the civilia in the united states and other countries will be there and we'll be, you know, interacting with the government, working with businesses, with citizen groups, so we are intent upon doing everything we can to try to strengthen those parts of the equation. it is a difficult environment, but i think if you, as i did recently, talk to hundreds of our civilians who are serving across afghanistan and ask them what they were doing law, on women's empowerment and so much else, they are proud of what they're doing. they feel like they're makin

so we have to protect them and we have to enable them to continue to do what they need to do and to be prepared with whatever the right sized mission is for our relationship after 2014. >> thank you. as you know we have a really serious situation in egypt. it also has been on the headlines, in the headlines as a number of very effective ngos, their employees have been arrested, their records have been taken. i wonder if you could speak both to the situation there and what we think the prospects are for an effective releases those americans who are being held and allows those ngos to continue to d not. but also speak to it in the co we have

spent in egypt over the years in terms of providing for an assistance, and, again, it is in the top five of those countries receiving foreign assistance. and how we explain to the american public about the effectiveness of that foreign assistance and what they're currently seeing being expressed by egyptians in the news today. >> well, first, as you know, senator, the great majority of our foreign assistance over the last three decades has been to the egyptian military. and it did create a very positive working relationship that was certainly to the benefit of the camp david accords enforcement and the peace treaty between egypt and israel and also to the united states. and it help