Identifier
Created
Classification
Origin
03AMMAN3242
2003-06-03 14:45:00
CONFIDENTIAL
Embassy Amman
Cable title:  

UNRWA MAY 21-22 DONORS MEETING: BUDGET

Tags:  PREF PREL KPAL KWBG EAID IS JO 
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C O N F I D E N T I A L SECTION 01 OF 04 AMMAN 003242 

SIPDIS

DEPT FOR PRM AND NEA; PLEASE PASS TO USAID

E.O. 12958: DECL: 06/02/2013
TAGS: PREF PREL KPAL KWBG EAID IS JO
SUBJECT: UNRWA MAY 21-22 DONORS MEETING: BUDGET
SHORTFALLS, WEST BANK AND GAZA WOES, AND CONTINUING US
EFFORTS ON TEXTBOOKS AND TERRORISM

REF: TEL AVIV 2916

Classified By: PolCouns Doug Silliman, per 1.5 (b) and (d).

C O N F I D E N T I A L SECTION 01 OF 04 AMMAN 003242

SIPDIS

DEPT FOR PRM AND NEA; PLEASE PASS TO USAID

E.O. 12958: DECL: 06/02/2013
TAGS: PREF PREL KPAL KWBG EAID IS JO
SUBJECT: UNRWA MAY 21-22 DONORS MEETING: BUDGET
SHORTFALLS, WEST BANK AND GAZA WOES, AND CONTINUING US
EFFORTS ON TEXTBOOKS AND TERRORISM

REF: TEL AVIV 2916

Classified By: PolCouns Doug Silliman, per 1.5 (b) and (d).


1. (U) Summary: UNRWA's May 21-22 meeting of major donors
and host governments revealed an agency in an atypically
sound cash-flow position but troubled by overall budget
shortfalls and underfunded emergency needs in the West Bank
and Gaza, with only USD 25 million received against its
current USD 94 million emergency appeal. UNRWA reported that
Israeli security restrictions in the West Bank and Gaza
continue to impede the agency's ability to provide basic
services and emergency humanitarian assistance. In response
to donor requests for more technical discussions, UNRWA
updated donors on initiatives in the relief and social
services and education departments (including the US-funded
tolerance project),announcing that it had secured USD 5.6
million in funding for its long-planned Palestine refugee
record project. In meetings and a visit to Fawwar refugee
camp held on the margins of the UNRWA meeting, PRM PDAS
Greene briefed UNRWA and GOI officials on the US Government's
continuing efforts to balance humanitarian assistance,
stability and security needs in the Palestinian refugee
context. End summary.


2. (U) UNRWA held its semiannual meeting of major donors and
host governments May 21-22 in Amman. The US Delegation
included Ambassador Gnehm, PRM PDAS Richard Greene, Regional
Refugee Coordinator and Refugee Assistant. At the meeting,
Ambassador Gnehm announced an initial US contribution of USD
80 million to UNRWA's General Fund and a separate USD 15
million contribution to UNRWA's emergency appeal.

General Fund Finances: Improved Cash-Flow but Funding Gap
Remains
-------------- --------------


3. (U) UNRWA ComGen Hansen reported that the agency is in
its best cash-flow situation in recent years, due largely to
an early General Fund payment from the European Commission,
which previously made its payments at the end of the calendar

year. Unexpected exchange rate gains, savings from
management reforms and a USD 4 million repayment of VAT owed
by the Palestinian Authority have also improved the agency's
financial posture. Nevertheless, UNRWA still expects to face
a USD 55 million funding gap for calendar year 2003. The US
and European Commission delegations asked UNRWA for a
qualitative assessment of the effects of the projected
funding gap and an explanation of how UNRWA prioritizes
programming in such circumstances. Hansen responded that
reductions in maintenance spending and staff salaries (e.g.,
the 1999 staff salary rules) bore the brunt of funding
shortfalls.


4. (U) PRM PDAS Greene asked whether UNRWA would consider
merging the West Bank and Gaza emergency programs into the
General Fund, eliciting a relatively spirited debate among
donors and host governments. Hansen responded that the
agency would continue to need additional funds for emergency
programming in the West Bank and Gaza as long as the current
situation continued. He added that the agency believed it
was easier for donors to respond to these needs if they
continued to be cast as extraordinary, extrabudgetary needs.
Several donors, including AUSTRALIA, Sweden, Germany and
Norway noted that they have an easier time providing
emergency funding than convincing their parliaments to
increase annual General Fund contributions to UNRWA. Syria
and Jordan expressed concern that inclusion of emergency West
Bank and Gaza programming in UNRWA's General Fund budget
could undercut support for Palestinians in UNRWA's other
three fields of operations.

Impact of Chronic Underfunding
--------------


5. (U) Deputy ComGen Karen AbuZayd briefed donors on a study
conducted by UNRWA's Policy Analysis Unit, analyzing the
effects of an estimated USD 570 million in unfunded needs
since 1990. Although UNRWA's annual income has increased by
24 percent since 1990, the Palestinian refugee population has
increased by 62 percent in the same period due largely to
spikes in UNRWA registration rolls following the 1990-1 Gulf
War and the Oslo peace accords. UNRWA reports that due to
chronic underfunding, its spending per refugee has dropped
from USD 99 per refugee in 1990 to USD 73 per refugee in

2002. Cost-cutting measures such as the 1999 area staff
rules (reducing UNRWA Palestinian staff salaries) have
doubled both the number of resignations per year and the
recruitment time required to fill vacant positions. UNRWA
reported that chronic underfunding has had a significant,
negative impact on education programs, requiring
double-shifting in almost all schools in Jordan and Syria and
leaving UNRWA schools unable to keep up with local
educational norms, such as the introduction of computer
science classes. Underfunding has also required UNRWA to
decrease its health expenditures (from USD 20 per refugee per
year in 1990 to a current USD 13 per refugee) and its relief
services, limiting special hardship cases to just six percent
of the refugee population, down from seven percent in 1990.


West Bank and Gaza Emergency Programs -- Needs Remain Great,
Funds Remain Short
-------------- --------------


6. (U) Hansen characterized the current situation in the
West Bank and Gaza as "the most difficult in recent years."
150 Palestinian fatalities occurred in the first four months
of 2003, a 45 percent increase over the same period in the
last two years. Hansen reported that 12,700 Palestinians
have become homeless since September 2000 due to Israeli home
demolitions with an "alarming" increase in demolitions in the
last three months. According to the World Bank, 50 percent
of Palestinians in the West Bank live below the poverty line
while the number in Gaza reaches nearly 75 percent. However,
poor donor response to UNRWA's emergency appeal -- a mere USD
25 million received of the USD 94 million requested -- has
hampered UNRWA's ability to respond to the crisis. Hansen
said that limited funding has required UNRWA to reduce its
emergency food distributions and temporary jobs programs.
Separately, UNRWA West Bank Deputy Director Guy Sirri told
PRM PDAS Greene during a May 20 visit to Fawwar refugee camp
that UNRWA was forced to cancel 300 direct hire temporary
jobs on April 1, due to limited funding.


7. (U) UNRWA West Bank Director Richard Cook reported that
the effects of nearly 32 months of violence and growing
Palestinian poverty are increasingly obvious in UNRWA
schools. (UNRWA began its presentation on West Bank and Gaza
emergency programming with a short film on an UNRWA student
injured at her school desk during clashes in Khan Younis
refugee camp.) UNRWA teachers are reporting increasing signs
of psychological distress such as speech impediments,
bedwetting and psychosomatic problems. Increasing numbers of
UNRWA schoolchildren are arriving at school hungry.
Children's classroom time continues to be cut short by
closures and curfews; Cook reported that UNRWA lost a total
of 82,000 staff days in 2002, an average of 1,000 staff days
per West Bank school. West Bank Education Director Lamis
Alami separately told PDAS Greene during a May 20 camp visit
that only 28 percent of UNRWA's West Bank schools met the
minimum requirement of being open for a full 200 working days
during the 2001-2 school year. Alami added that although
test scores are falling, UNRWA can only hold back five
percent of its students per year due to limited classroom
space. Cook told donors that academic performance is worst
in schools that have been hardest hit by violence. In
UNRWA's Tulkarm schools, for example, only 27 percent of
students achieved a passing score on recent Arabic language
tests, compared to 75 percent of students in nearby NurShams
camp, which has been relatively isolated from the violence.

Access Difficulties Continue in West Bank and Gaza
-------------- --------------


8. (U) Hansen told donors that UNRWA continues to experience
severe access difficulties, with 124 of 151 recent access
problems in the West Bank and Gaza involving UNRWA staff.
New Israeli restrictions on international staff movement in
and out of Gaza (ref) were particularly difficult for the
agency. Hansen told donors that UNRWA had accrued USD 20
million in direct or indirect losses due to closures and
other Israeli security measures implemented since September

2000.


9. (U) West Bank Director Cook reported that the new IDF
liaison system for humanitarian agencies had not resulted in
access improvements on the ground. Cook cited the April 2003
occupation of UNRWA's Tulkarm girls school, the May 2003
shooting of an UNRWA bus driver in Deir Ammar, and several
separate incidents in which IDF soldiers at checkpoints held
guns to the heads of UNRWA international staff members as a
few examples of deteriorating operating conditions for UNRWA
staff. Cook told donors that he believes the IDF's failure
to hold individual soldiers responsible for their actions is
largely responsible for UNRWA's growing access problems.
Cook added that the Israeli government's security wall will
worsen UNRWA's access problems. 21 UNRWA installations,
including the West Bank field's sole hospital at Qalqiliya,
will be completely isolated by the wall.


10. (U) PRM PDAS Greene noted that the US has raised access
issues with the Israeli Government since the onset of the
current difficulties and would continue to do so. However,
it is important for donors and host governments to remember
the context of the current situation; closures and other
Israeli security measures are implemented in response to
terrorist attacks. Five suicide bombings in the 48 hours
preceding the UNRWA meeting cannot be forgotten or ignored.
Hansen agreed, telling donors that Jordanian Foreign Minister
Muasher's opening remarks regarding the need for a political
solution to end the violence, including immediate
implementation of the Quartet's roadmap, set the tone for the
larger context in which UNRWA issues should be considered.

Technical Sessions and Workshops
--------------


11. (U) In response to donor requests for more technical
discussions in the semiannual meetings, UNRWA's Directors of
Relief and Social Services (RSS) and Education presented
separate briefings on new initiatives in their departments.
Replicating last spring's successful workshop model, UNRWA
also held smaller discussions on its Neirab/Ein Al Tal
rehousing project, its emergency programming priorities and
access issues. RSS Director Beth Kuttab announced that UNRWA
had secured USD 5.6 million in funding for its long-planned
Palestine refugee records project, enabling the agency to
simultaneously update its registration system and preserve
the 1948 refugees' original documentation. The United
Kingdom, Switzerland, Canada, Saudi Arabia and the ruler of
Sharja pledged money to the project. Education Director
Kabir Shaikh updated donors on the US- and German-funded
tolerance education projects, announcing that 80 schools in
five fields were participating in the projects on a pilot
basis, involving 587 staff and 42,000 students. Shaikh also
announced that the UK's Quality Assurance Project had been
implemented in 376 schools. The Syrian delegation noted that
all new UNRWA education initiatives must be closely
coordinated with host governments, as UNRWA schools are
obliged to follow host governments' curricula.

Textbooks and Terrorism: Bilateral Meetings with Israeli and
UNRWA Officials on Margins of Meeting
-------------- --------------


12. (C) In separate meetings held on the margins of the
donors meeting and in Israel prior to the meeting, PRM PDAS
Greene briefed UNRWA and GOI officials on the US Government's
continuing efforts to balance humanitarian assistance,
stability and security needs in the Palestinian refugee
context. He assured GOI Legal Adviser Alan Baker on May 20
that the USG was working to ensure that UNRWA was taking
"every possible measure" to ensure its programs and
installations remain free from outside influences and that
its beneficiaries have not engaged in terrorism. Baker
responded that the GOI continues to be troubled by the very
public, political positions taken by UNRWA ComGen Peter
Hansen. Hansen's published articles, "critical of Israel,"
are a negative influence on GOI officials responsible for
dealing with UNRWA. On the more serious charges of UNRWA
complicity in terrorism, Baker said that he "doesn't know"
whether UNRWA is actively preventing armed activity in West
Bank and Gaza refugee camps. He explained that, in the
aftermath of his very public criticism alleging UNRWA
complicity several months ago, he had not been following the
issue very closely.


13. (C) Baker also asserted that UNRWA is not undertaking
activities to reduce incitement in its schools. He told
Greene that incitement is an integral part of terrorism that
must be addressed by all parties providing assistance to the
Palestinians, including UNRWA. (During a May 20 visit to
Fawwar refugee camp, UNRWA West Bank officials told Greene
that the agency works successfully to keep political
materials out of its installations but has a difficult time
keeping them off outside walls. Some exterior walls of UNRWA
installations in Fawwar camp, for example, were spray-painted
with Hamas graffiti.)


14. (SBU) In a May 21 meeting, UNRWA ComGen Hansen and
Deputy ComGen AbuZayd told Greene that UNRWA continues to
take seriously the charges of incitement in Palestinian
textbooks and has begun its own internal review of PA
textbooks. The agency also continues to implement the
US-funded tolerance project, viewing it as an important
supplementary teaching tool. Hansen and AbuZayd assured
Greene that UNRWA "never" resorted to public statements
critical of Israel as a first approach to problem solving;
they asserted that UNRWA issued public statements only in
"grave situations," where UNRWA had been unable to resolve
differences via quiet diplomatic channels. AbuZayd also told
Greene that UNRWA welcomed the imminent US General Accounting
Office (GAO) investigation of UNRWA programs and procedures
and was eager to facilitate the GAO's work.


15. (U) PRM PDAS Greene, ConGen Jerusalem and Embassy Tel
Aviv cleared this message.
GNEHM