Mr. ENGEL: Thank you, Mr. Chairman. Madam Secretary, it is always a pleasure to see you. Welcome.

I am going to submit for the record, as the chairman of the western Hemisphere Subcommittee, a question on Haiti-I just came back from Haiti-and article 98. And I will submit that to you, and I will get it.

But as Chairman of the Western Hemisphere Subcommittee, I have very serious concerns about overall reductions in development assistance to Latin America and the Caribbean. In the budget that is submitted, over aid to the region is down over $70 million from fiscal year 2006. And at a time when anti-Americanism in the region is on the rise, I think we need to show our commitment to all of our neighbors in Latin America, not just a select few.

Outside of increases to three CAFTA countries, how do you explain the administration's decision to reduce development assistance funding for the region? That is my first question.

I want to also ask you a question about Syria. As you know, we have through the years discussed this. I was the author of the Syria Accountability Act. And Syria continues to play a very negative role in Iraq, a negative role in Lebanon, and it is rearming Hezbollah. Most of the rockets and anti-tank missiles fired at Israeli communities and IDF tanks last summer came directly from Syria in arsenals.

And I might also say that Mr. Abbas made a statement which was very disappointing, where he said that he Palestinians should not turn their guns on each other, but should turn their guns on the Israeli occupiers. I thought that was a very disappointing statement that he made.

But back to Syria. Some of us are now saying that we should be engaging Syria. I want to ask you your opinion. Is now the time to end the diplomatic isolation of Syria, and engage? Do you believe that Bashar al-Asad, who hints at diplomatic offers towards Israel, are his offers real? And if not, when are we going to implement the Syria Accountability Act?

And finally, I want to ask you about Kosovo, the final status of Kosovo. U.N. Special Envoy Martti Ahtisaari delivered his proposals for a Kosovo status settlement. I support that. I am a big supporter of independence for Kosovo. And I just would like to know what the administration is going to do now, since the potential for the Russians to play a negative role is there, the Serbs are being very negative about it. I would like to know what the administration is doing on it.

Thank you

Secretary RICE: Thank you. On Kosovo, we are indeed supporting very closely the efforts of the Special Envoy Ahtisaari, who has now put forward a plan. I think we have helped. Frank Wisner, who is a very well regarded diplomat, has been a kind of ambassador-at-large for the United States, working on this issue.

We believe that the Ahtisaari plan deserves support. And we are working with our European allies, who I think also support the Ahtisaari plan. I have talked very often to the Russians; first of all, that Kosovo is a precedent for nothing, which is a very important point to make. And secondly, that we need to recognize that the longer this drags out, the more likely we are to have a breakdown in order in Kosovo itself.

So over the next several weeks, the next couple of months actually, Ahtisaari will be talking to the parties, negotiating with the parties, working with the parties. Then I think the international community is going to have to support an outcome there. We will work with all parties, including the Russians to try and make that outcome as good an outcome as possible.

The Kosovars have a responsibility too, to protect minority rights, to make certain that Serbs feel that they can really live there. We are having equally difficult and tough, sometimes, discussions with the Kosovar Albanians about their responsibilities.

I think we helped when we included Serbia in the Partnership for Peace for NATO, because we want Serbia to have a democratic and European horizon. We don't want a revanchist and angry Serbia. We are working with our European allies to make sure that Serbia understands that it belongs in Europe.

As to Latin America and our efforts there, let me just note that aid to Latin America has risen dramatically since the start of this administration. It has gone from $862 million in foreign assistance, $862 million in 2001, to $1.4 billion in 2008

We are, frankly, concentrating our resources on certain things. We are supporting , through MCC compacts, a number of countries that we believe have a chance to take off, if you will, particularly in Central America. But we also have increased aid significantly to Uruguay, as another example.

On the other hand, we do have limited resources. We are trying to fit a lot of needs and a lot of concerns into a growing, admittedly, but still relatively small budget. So we have been consolidating our resources in, for instance, efforts to support democratic gains-that is up about 5 percent.

We have been shifting some of our focus from service delivery and health, and basic education, in places where we think that is well advances, and perhaps where host countries have resources of their own to spend. We are focusing on some key anchor states; places like Colombia, and Peru, and Haiti, in which aid is very much up.

I understand that if you look at the specific number just as a total, it looks like the resources have gone down to Latin America. I think if you look at all resources, it has, in fact, gone up fairly dramatically.

Let me just address, too, that I know that people are concerned that there not be a substitution effect for MCC and development assistance. I do think if you look at the dramatic growth in official development assistance in this administration, that you cannot make that case. But in some countries, where we are making huge MCC compacts, w are reallocating our aid to support some of the efforts that we think would make those MCC compacts more effective.