Thank you, Dan. I want to begin by acknowledging Ambassador McKinley, thank you very much for coming. And I want to highlight the presence of my nephew, Andre Bezou, who is sitting here in the front row. Andre and I were in Afghanistan at the same time in 2011. I was in the flesh pots of Kabul, while Andrew was deployed on the front lines in Helmand. Thank you for your service, Sergeant Bezou.

2016 has already been an important year for demonstrating international commitment to the investment that we have made in Afghanistan. In July, President Obama revised plans to drawdown to 5,500 troops, deciding that 8,400 would remain at the end of 2016. In July, NATO and its partners agreed at Warsaw to extend their training mission and to fund the Afghan forces through 2020. Next week at Brussels the European Union and Afghanistan will co-host a conference that will focus international attention on Afghanistan’s development and affirm continued donor support.

I want to touch briefly on three points – first, the state of the political and security situation in Afghanistan; second, the Brussels Conference, and the strong state of our coalition’s commitment; and third, I want to share my thoughts about what to make of these dynamics as we look ahead to transition here in Washington.

POLITICAL / SECURITY SITUATION

Let me start with the security situation. In their second year bearing full security responsibility, and despite facing a formidable foe on the battlefield, the Afghan National Defense and Security Forces (ANDSF) demonstrated greater discipline and capacity than we have seen thus far.

Afghan security forces have incorporated lessons learned from the previous fighting season into their current operations, with improving results. This year, Afghan forces developed a campaign strategy of “fight, hold, disrupt” which involved defending key population centers and infrastructure, holding onto other critical areas and disrupting insurgent activities in places where a persistent Afghan army presence is not required.

The fight has not been easy. Afghan casualty levels are higher this year than last, but the Afghan security forces continue to execute their campaign strategy and have demonstrated resilience in security operations around the country. The Taliban have also suffered significant casualties and have been unable to capture or hold strategically significant locations for an extended period of time. They have so far failed to achieve their strategic goal of overthrowing the government by force, or indeed, seizing and holding provincial capitals.

U.S. forces are also continuing to disrupt and degrade the so-called “Islamic State,” through partnered operations with Afghan forces, as well as unilateral operations. Combatting Daesh and the remnants of al-Qaeda will continue to be a priority for the United States, as we work to ensure that Afghanistan is never again a safe haven for terrorism.

Of course the security situation also depends in part on Afghan political stability, and that means that the political climate in Kabul matters.

Let me start by saying that we remain firmly committed to the unity government established two years ago today through a political agreement between President Ghani and Chief Executive Abdullah brokered by my boss, Secretary Kerry. This national unity government was formed to preserve inclusivity and stability; to pursue and advance a reform agenda aimed at navigating Afghanistan through this period of donor dependency; and to continue, with the help of the international community to harden state institutions including the security forces as they wage a long conflict with insurgents.

In our judgment, the national unity government continues to be the most viable way forward, despite the challenges inherent to coalition governments. We recognize that the National Unity Government evolved through compromises that left parties feeling they gave up too much, but these compromises engendered stability. We continue to urge all parties to resolve their political differences peacefully and in a spirit of inclusivity. Afghanistan is a diverse country, and its citizens need and deserve a government that is effective and able to represent all elements of society. President Ghani and Chief Executive Abdullah have made clear they share these goals. They also remain committed to holding parliamentary elections and the Constitutional Loya Jirga called for in their political agreement, and are working to implement the electoral reforms needed to address the shortcomings that have undermined previous elections.

We continue to stand by this government -- as Secretary Kerry said during his visit in April, the government has a five-year mandate under the Afghan constitution. U.S. officials at all levels continue to emphasize the importance of tangible progress on electoral reforms, a credible election timeline, and a reasonable plan to prepare for a Constitutional Loya Jirga.

While it is clear that the political situation remains challenging, it would be unfortunate for these challenges to overshadow the progress that this government has made in its two years in office.

And it is of direct relevance to the international community’s recommitment to Afghanistan at the Brussels Conference. In this regard I want to highlight that President Ghani, Dr. Abdullah, and their team have been important and constructive partners for the international community not just in combatting terrorism, but also in demonstrating real progress towards major reform and development milestones.

I would offer a few illustrative highlights of the Afghan government’s record of performance:

In July, Afghanistan completed its accession to the World Trade Organization, becoming the 164^th member of the WTO. After years of work, this reflected a renewed commitment to fostering a pro-business and pro-trade environment.

Completion of an IMF staff monitored program earlier in the year has resulted in steps to increase revenue collection and counter corruption. This was a critical step toward rebuilding Afghan credibility with the IMF and donors.

On the anti-corruption front, President Ghani has inaugurated a new Anti-Corruption Justice Center. The Center is designed to be shielded from political influence as it works with the Ministry of Interior and the Attorney General’s Office to investigate and prosecute high level corruption cases. The Afghan government has adopted improved anti-money laundering regulations, prosecuted judges complicit in the release of drug traffickers, introduced customs reforms that have resulted in greater revenue, established a National Procurement Commission, stemmed illegal procurements in the Ministries of Defense and Interior, and registered the assets of over 90% of senior officials.

Without doubt, much remains to be done on the anti-corruption agenda, but the government is making headway. More than 600 judges, 20 percent of prosecutors, and 25 percent of customs officials, who were either unqualified or corrupt, have been removed from their positions over the past year.

On the ever-important effort to improve the mobilization of Afghanistan’s own resources, it is important to note that government revenue collection was up by more than 20 percent in 2015 and went from nearly nothing in 2001 to roughly $1.8 billion today. Revenue collection for the first quarter of the current fiscal year exceeded the IMF target by 7 percent.

Looking ahead, the Afghan government signed on to a new IMF extended credit facility in July on the basis of commitments to deepen and advance this reform agenda.

BRUSSELS CONFERENCE

Turning to Brussels, the Afghan government’s progress on this agenda will form the basis of our agenda and for our broader diplomatic efforts this year to maintain one of the largest international coalitions ever assembled and maintained over a sustained period of time.

The Brussels Conference on Afghanistan that will take place next week is the capstone of a year-long effort to build and maintain international support for Afghanistan’s security and development needs through 2020.

As I mentioned, in July at the Warsaw Summit, following months of outreach, NATO allies and partners agreed to extend the Resolute Support Mission and our Allies and partners pledged approximately $1 billion in support per year for Afghan security forces through 2020. While we expect to continue being the largest provider of security assistance to Afghanistan our allies and partners buttress our security assistance. NATO’s strong recommitment to Afghanistan was a strong endorsement of President Obama’s decision before the conference to extend the U.S. troop presence in Afghanistan at the level of 8,400 troops.

The Brussels Conference is in some ways the development complement to this security agenda. But more fundamentally, this conference is about helping the Afghan government to establish an agenda to navigate the coming period, which will be characterized by gradually declining levels of international support and a need for increased self-reliance. I would emphasize that these are the words of President Ghani, himself.

The antecedent for Brussels was set four years ago, at a conference in Tokyo, which established a mutual accountability framework between the Afghan government and donors and established the conditions for the Afghans to navigate the security transition.

At Brussels, this compact between Afghans and donors will be strengthened. U.S. and international support to Afghanistan is not a blank check. Our support is conditioned and conditional on Afghan progress. And our collective ability to continue providing significant levels of support to Afghanistan is dependent on the Afghan government’s performance and ability to work with us as an effective partner.

This statement may seem bold to some, but it is one that is wholeheartedly endorsed by President Ghani and his team, who have developed, and next week will release, ambitious medium term plans for weaning Afghanistan from donor support.

It is no secret that Afghanistan remains heavily dependent on donors; today, about 70 percent of the Afghan government’s expenditures are funded through external donor financing. The Afghan government’s objective is to define a path to stimulate domestic growth and expand revenue mobilization over time, while steadily bringing down the operating costs of government to more sustainable levels.

The Afghan government is asking donors to support this ambitious reform agenda by adjusting aid delivery modalities. Donors are being asked to consider increasing the proportion of assistance delivered through the Afghan government’s budget. Through USAID, we have already made substantial progress in aligning our assistance to support the Afghan government’s agenda. We also use mechanisms like the World Bank’s Afghan Reconstruction Trust Fund and the U.S.-Afghanistan New Development Partnership created two years ago to provide almost half of our assistance in direct support of the government’s budget. As conditions allow and the Afghan reform and anti-corruption agenda advances, we are committed at Brussels to consider directing further support through the Afghan budget

Donors are also being asked at Brussels to provide clarity about their future development assistance plans through 2020. We expect strong pledges of renewed support to be announced next week, collectively totaling over $3 billion per year in development support through 2020. As part of this broader international commitment, Secretary Kerry will be ready to indicate clearly American intentions to maintain a strong leadership role within the broad coalition of allies and partners engaged in Afghanistan. We are aiming to seek from Congress assistance to Afghanistan at or near current levels, on average over the commitment period, through 2020.

LOOKING AHEAD

I want to conclude by briefly framing how these issues will translate into future decisions in view of the fact that we are facing our own political transition here. The President’s decision in July to extend the presence of 8,400 U.S. troops in Afghanistan into next year formed the basis for renewing the commitment of the coalition to Afghanistan for the coming period.

At the Warsaw Conference in July and in Brussels next week, we have formed a unity of effort with a broad coalition of allies and partners as it relates to Afghanistan’s future. I hope these common commitments and this common purpose will form the basis of the next Administration’s deliberations about policy toward Afghanistan.

To my mind at least, the current policy framework as supported by our NATO allies and partners forms the best means of ensuring our ultimate objective, which continues to be to ensure Afghanistan never again serves as a safe haven for terrorists that threaten the United States and our allies.

Our objective under this framework is to harden Afghan security forces and strengthen Afghan institutions so that they may first disrupt and deter, and then gradually defeat the insurgency. Of course, such an approach will only continue to be possible if we can maintain the broad, bipartisan consensus that this Administration has maintained with regards to Afghanistan.

Such an approach is also relevant to the pursuit of an Afghan peace process. My advice to a new Administration would be to consider, when it begins to assess policy, how its policy choices can shape progress on a peace process. We could, for example, send a clear signal, as has this Administration, that there is no prospect for achieving the withdrawal of U.S. and foreign troops -- which remains a core political objective of the Taliban -- except through a peace settlement with the Afghan government.

We have long established that any political settlement, at the end of the day, requires that the Taliban break ties with international terrorism, including Al Qaeda, cease violence, and accept the Afghan constitution, including its provisions on rights of minorities and women.

In conclusion, let me say that I continue to believe that the Afghan people are tired of war and ready for peace. For the Taliban to have any legitimacy with the Afghan people, they will need to deal with that reality and reduce violence.

For our part, we and the strong coalition that has been built and maintained through years of diplomacy will continue to stand side-by-side with the Afghan people as they chart a path toward a long sought, and long overdue, peace.

Thank you.