IMMINENT WFP FOOD PIPELINE BREAK IN THE CAUCASUS

UNCLAS SECTION 01 OF 03 ROME 001069 SIPDIS AIDAC FROM U.S. MISSION IN ROME USAID FOR AA/DCHA WINTER, AA/ANE CHAMBERLAIN, DCHA/FFP LANDIS, PPC/DP, PPC/DC STATE FOR IO A/S HOLMES, A/S PRM DEWEY, A/S EUR JONES, UNCLASSIFIED PAGE 02 ROME 01069 01 OF 03 141556Z EUR/CACEN, IO/EDA USDA/FAS FOR U/S PENN AND MCHAMBLISS E.O. 12958: N/A TAGS: EAID EAGR AORC PREF EAGR AORC PREF EAGR AORC PREF KUNR WFP UN KUNR EAID WFP UN KUNR EAID WFP UN SUBJECT: IMMINENT WFP FOOD PIPELINE BREAK IN THE CAUCASUS -------------- SUMMARY -------------- > > 1. US MISSION ROME PROGRAM SPECIALIST TRAVELED TO ARMENIA, GEORGIA AND AZERBAIJAN FROM FEBRUARY 23 THROUGH MARCH 8, 2003. WFP'S PROTRACTED RELIEF AND RECOVERY OPERATIONS (PRROS) IN EACH OF THOSE COUNTRIES WERE ASSESSED AND DETERMINED TO BE IN NEED OF EXPEDITED SUPPORT. END SUMMARY. -------------- ARMENIA BACKGROUND -------------- ¶2. PRRO 10053.0 BEGAN IN JULY OF 2001 AND IS SCHEDULED TO END IN JUNE OF 2004. APPROXIMATELY U.S. DOLLARS 32.8 MILLION FOR 60,794 METRIC TONS OF COMMODITIES IS REQUIRED TO ASSIST 140,000 BENEFICIARIES A YEAR CONSISTING OF REFUGEES OR INTERNALLY DISPLACED PERSONS, HOMELESS EARTHQUAKE VICTIMS, DISABLED PERSONS, SINGLE ELDERLY PENSIONERS, DESTITUTE WOMEN AND SCHOOLCHILDREN. ¶3. AS A SOVIET REPUBLIC, ARMENIA WAS A HEAVY INDUSTRIALIZED UNCLASSIFIED PAGE 03 ROME 01069 01 OF 03 141556Z COUNTRY. IN 1985, ARMENIA ATTRIBUTED ALMOST 75 PERCENT OF ITS GDP TO INDUSTRY. THE BREAK-UP OF THE SOVIET UNION AND THE CONFLICT WITH AZERBAIJAN OVER NAGORNO-KARABAGH RESULTED IN AN ENERGY CRISIS AND ECONOMIC BLOCKADE. THESE FACTORS, TOGETHER WITH THE 1998 RUSSIAN FINANCIAL COLLAPSE, CAUSED A FURTHER DECLINE IN AND REARRANGEMENT OF THE ECONOMY. ¶4. TODAY, AGRICULTURE PRODUCES ABOUT 30 PERCENT COMPARED WITH INDUSTRY'S 20 PERCENT OF THE COUNTRY'S GDP. UNEMPLOYMENT, WHICH HAS FORCED A LARGE PERCENTAGE OF THE POPULATION TO RELY ON SUBSISTENCE FARMING, HOVERS AT 25 PERCENT. THE GINI COEFFICIENT, A MEASURE OF INCOME INEQUITY, WAS RATED AT 0.690 IN 1999 AND CONTINUES TO REMAIN STUBBORNLY HIGH. ¶5. THE PRRO HAS RECEIVED ABOUT U.S. 10.6 MILLION SINCE ITS INCEPTION, AND NOW STOCKS OF COMMODITIES ARE ALMOST EXHAUSTED. THE APPROVED FOOD BASKET CONSISTS OF WHEAT FLOUR, PULSES, VEGETABLE OIL, AND SUGAR, A REQUIREMENT OF ABOUT 1,700 METRIC TONS PER MONTH. SHORTFALLS IN VEGETABLE �00A;OIL BEGIN TO APPEAR THIS MONTH AND IN WHEAT FLOUR NEXT MONTH. -------------- ARMENIA COMMENT -------------- ¶6. IF CONTRIBUTIONS DO NOT MATERIALIZE IMMEDIATELY, WFP IN ARMENIA WILL BE FACED WITH A HOBSON'S CHOICE OF REDUCING THE AMOUNT OF FOOD DISTRIBUTED OR BENEFICIARIES RECEIVING IT. A SMALL INVESTMENT NOW WILL PROVIDE AN IMMENSE BENEFIT TO UNCLASSIFIED PAGE 04 ROME 01069 01 OF 03 141556Z DESERVING PEOPLE DURING THEIR TRANSITION TO A MARKET ECONOMY. END COMMENT. -------------- GEORGIA BACKGROUND -------------- ¶7. PRRO 10211.0 IS A THREE-YEAR PROGRAM RUNNING FROM APRIL 2003 TO THE END OF MARCH 2006. A TOTAL OF U.S. DOLLARS 23.4 MILLION FOR ABOUT 50,493 METRIC TONS OF COMMODITIES IS REQUIRED TO ASSIST 209,500 REFUGEES, IDPS AND VULNERABLE GROUPS IN BOTH URBAN AND RURAL AREAS. ¶8. SINCE ITS INDEPENDENCE FROM THE SOVIET UNION IN 1991, GEORGIA HAS CONTINUED TO FACE ECONOMIC AND POLITICAL CRISES INCLUDING ECONOMIC COLLAPSE, INTERNAL ARMED CONFLICT, AND CIVIL STRIFE. GOVERNMENT FIGURES REPORT THAT GEORGIA'S GROSS DOMESTIC PRODUCT FELL BY 78 PERCENT BETWEEN 1990 AND ¶2000. PUBLIC EXPENDITURE HAS BEEN INSUFFICIENT TO MAINTAIN BASIC INFRASTRUCTURE AND SOCIAL PROGRAMS FOR THE MOST VULNERABLE. THE NON-PAYMENT OF GOVERNMENT WAGES AND UNCLASSIFIED UNCLASSIFIED PTQ6727 PAGE 01 ROME 01069 02 OF 03 141556Z ACTION AID-00 INFO LOG-00 NP-00 CIAE-00 INL-00 SRPP-00 EB-00 EUR-00 OIGO-00 UTED-00 VC-00 TEDE-00 INR-00 IO-00 LAB-01 VCE-00 NSAE-00 OES-00 OIC-02 PC-01 TEST-00 TRSE-00 EPAE-00 PRM-00 DRL-01 SAS-00 /005W -------------- 447D26 141556Z /38 P 141452Z MAR 03 FM AMEMBASSY ROME TO SECSTATE WASHDC PRIORITY 8737 INFO AMEMBASSY YEREVAN AMEMBASSY TBILISI AMEMBASSY BAKU EU MEMBER STATES COLLECTIVE USDA FAS WASHDC 2593 SECDEF WASHDC USEU BRUSSELS 3162 USMISSION GENEVA USMISSION USUN NEW YORK UNCLAS SECTION 02 OF 03 ROME 001069 SIPDIS AIDAC FROM U.S. MISSION IN ROME USAID FOR AA/DCHA WINTER, AA/ANE CHAMBERLAIN, DCHA/FFP LANDIS, PPC/DP, PPC/DC STATE FOR IO A/S HOLMES, A/S PRM DEWEY, A/S EUR JONES, UNCLASSIFIED PAGE 02 ROME 01069 02 OF 03 141556Z EUR/CACEN, IO/EDA USDA/FAS FOR U/S PENN AND MCHAMBLISS E.O. 12958: N/A TAGS: EAID EAGR AORC PREF EAGR AORC PREF EAGR AORC PREF KUNR WFP UN KUNR EAID WFP UN KUNR EAID WFP UN SUBJECT: IMMINENT WFP FOOD PIPELINE BREAK IN THE CAUCASUS PENSIONS AND THE DECLINE IN PRIVATE INCOME HAVE COMPOUNDED AN ALREADY DESPERATE SITUATION WHERE MANY ARE FORCED TO SELL THEIR BELONGINGS TO BUY FOOD. ¶9. THE ECONOMIC DEVASTATION HAS BEEN COMPOUNDED BY A SERIES OF TERRITORIAL DISPUTES, ARMED CONFLICT AND POLITICAL CRISES. UNRESOLVED ETHNIC CONFLICTS IN THE BREAKAWAY REGIONS OF SOUTH OSSETIA AND ABKHAZIA HAVE RESULTED IN THE INTERNAL DISPLACEMENT OF MORE THAN 250,000 PEOPLE. IN ADDITION, WFP FEEDS REFUGEES FROM CHECHNYA. -------------- GEORGIA COMMENT -------------- ¶10. TO DATE, OF THE U.S. DOLLARS 23.4 MILLION REQUIRED, ONLY 2 PERCENT (U.S. 500,000 DOLLARS) HAS BEEN PLEDGED BY DONORS. WITHOUT IMMEDIATE SUPPORT, GEORGIA WILL HAVE TO CUT BACK ON DISTRIBUTIONS AS EARLY AS APRIL WHEN THEY WILL FACE A SHORTFALL IN CEREALS. A COMPLETE PIPELINE BREAK IN ALL COMMODITIES IS FORESEEN IN MAY UNLESS NEW CONTRIBUTIONS ARE RECEIVED IN THE NEAR FUTURE. END COMMENT. -------------- UNCLASSIFIED PAGE 03 ROME 01069 02 OF 03 141556Z AZERBAIJAN BACKGROUND -------------- ¶11. PRRO 10168.0 FOR AZERBAIJAN, ONLY RECENTLY APPROVED IN MAY OF 2002 WITH EARLY AND STRONG USG ENDORSEMENT, BEGAN IN JANUARY 2003 AND IS SCHEDULED TO END IN DECEMBER OF 2005. ¶12. WAR WITH ARMENIA IN 1992 AND 1993 RESULTED IN THE LOSS OF 20 PERCENT OF AZERBAIJAN'S TOTAL TERRITORY, 70 PERCENT OF ITS FERTILE LAND, AND THE DISPLACEMENT OF 600,000 PEOPLE PLUS ANOTHER 200,000 REFUGEES. ¶13. THESE 800,000 INDEPENDENT DISPLACED PEOPLE AND REFUGEES CONSTITUTE 10 PERCENT OF THE TOTAL POPULATION, REPRESENTING ONE OF THE HIGHEST PROPORTIONS OF DISPLACED POPULATIONS IN THE WORLD. WITHOUT SIGNIFICANT RESETTLEMENT, LAND ALLOCATION AND EMPLOYMENT OPPORTUNITIES, THE TARGETED 430,500 BENEFICIARIES, REQUIRING AN ESTIMATED U.S. DOLLARS 20 MILLION FOR 43,087 METRIC TONS OF COMMODITIES WILL NECESSARILY RELY ON FOOD AID IN THE INTERMEDIATE TERM. MEANWHILE, THE LONG ANTICIPATED ECONOMIC BOOM BORNE BY OIL REVENUES HAS YET TO MATERIALIZE. ¶14. IN ADDITION, IN DESCRIBING CHRONIC MALNUTRITION, THE UNITED NATIONS DEVELOPMENT PROGRAM'S AZERBAIJAN HUMAN DEVELOPMENT REPORT 2002 STATES THAT ABOUT 30.5 PERCENT OF THE YOUNG CHILDREN OF REFUGEES AND INDEPENDENT DISPLACED PEOPLE (IDPS) ARE STUNTED. ¶15. LESS THAN 5 PERCENT OF PLANNED CONTRIBUTIONS HAVE BEEN PLEDGED. THESE FUNDS ARE DESPERATELY NEEDED TO MAINTAIN THE UNCLASSIFIED PAGE 04 ROME 01069 02 OF 03 141556Z MINIMUM DIETARY STANDARDS OF FOOD-INSECURE IDPS AND OTHER VULNERABLE GROUPS THROUGH TARGETED INTERVENTIONS AND TAKE- HOME RATIONS. WFP AND ITS PARTNERS SUCH AS WORLD VISION ARE ALSO PROMOTING TARGETED INTERVENTIONS AND ACTIVITIES LEADING TO SELF-RELIANCE AND THE CREATION OF ASSETS THROUGH TRAINING AND INCOME GENERATION. SCHOOL FEEDING WILL PROVIDE INCENTIVES FOR SCHOOL ATTENDANCE, ESPECIALLY AMONG GIRLS, WHILE ADDRESSING IODINE AND OTHER MICRONUTRIENT DEFICIENCIES OF ALL CHILDREN. ¶16. IN APRIL WFP WILL EXPERIENCE A SHORTFALL OF ABOUT 940 TONS. BY THE END OF JULY, THE ESTIMATED SHORTFALL WILL BE ALMOST 3,900 METRIC TONS IN WHEAT FLOUR ALONE. -------------- AZERBAIJAN COMMENT -------------- ¶17. ON MARCH 4, 2003 THE US MISSION PROGRAM SPECIALIST MET WITH MR. ALI HASANOV, THE AZERBAIJANI DEPUTY PRIME MINISTER CONCERNING FOOD AID. MR. HASANOV CONVEYED HIS DEEPEST UNCLASSIFIED UNCLASSIFIED PTQ6726 PAGE 01 ROME 01069 03 OF 03 141556Z ACTION AID-00 INFO LOG-00 NP-00 CIAE-00 INL-00 SRPP-00 EB-00 EUR-00 UTED-00 VC-00 TEDE-00 INR-00 IO-00 LAB-01 L-00 VCE-00 NSAE-00 OES-00 OIC-02 PC-01 IRM-00 TEST-00 TRSE-00 EPAE-00 PRM-00 DRL-01 SAS-00 /005W -------------- 447D3E 141556Z /38 P 141452Z MAR 03 FM AMEMBASSY ROME TO SECSTATE WASHDC PRIORITY 8738 INFO AMEMBASSY YEREVAN AMEMBASSY TBILISI AMEMBASSY BAKU EU MEMBER STATES COLLECTIVE USDA FAS WASHDC 2594 SECDEF WASHDC USEU BRUSSELS 3163 USMISSION GENEVA USMISSION USUN NEW YORK UNCLAS SECTION 03 OF 03 ROME 001069 SIPDIS AIDAC FROM U.S. MISSION IN ROME USAID FOR AA/DCHA WINTER, AA/ANE CHAMBERLAIN, DCHA/FFP LANDIS, PPC/DP, PPC/DC STATE FOR IO A/S HOLMES, A/S PRM DEWEY, A/S EUR JONES, UNCLASSIFIED PAGE 02 ROME 01069 03 OF 03 141556Z EUR/CACEN, IO/EDA USDA/FAS FOR U/S PENN AND MCHAMBLISS E.O. 12958: N/A TAGS: EAID EAGR AORC PREF EAGR AORC PREF EAGR AORC PREF KUNR WFP UN KUNR EAID WFP UN KUNR EAID WFP UN SUBJECT: IMMINENT WFP FOOD PIPELINE BREAK IN THE CAUCASUS GRATITUDE AND APPRECIATION FOR THE STRONG SUPPORT GIVEN BY THE USG TO THE PRRO FOR AZERBAIJAN DURING WFP'S EXECUTIVE BOARD MEETING IN MAY 2002, AN INTERVENTION THAT LED TO THE APPROVAL OF THE PROJECT. A SIGNIFICANT CONTRIBUTION FOR THE PRRO WOULD FOLLOW THROUGH ON THE USG'S EARLIER VERBAL SUPPORT. END COMMENT. -------------- -------------- CONCLUSIONS AND RECOMMENDATIONS FOR THE WFP PRROS IN ARMENIA, GEORGIA AND AZERBAIJAN -------------- -------------- ¶18. INTENDED BENEFICIARIES OF ALL THREE OF THE WFP PRROS IN THE CAUCASUS INCLUDE A LARGE POPULATION OF REFUGEES AND IDPS AS WELL AS OTHER FOOD INSECURE POPULATIONS INCLUDING THE ELDERLY AND CHILDREN. ¶19. IN EACH COUNTRY THE US MISSION PROGRAM SPECIALIST OBSERVED AND ASSESSED WFP'S LOGISTICS CAPABILITY AND CONTROLS, SELECTED FIELD PROJECTS, INTERNAL SYSTEMS AND STAFF EFFECTIVENESS, AND BENEFICIARY SELECTION AND MONITORING. ¶20. DESPITE THE OCCASIONAL TENDENCY FOR HUMANITARIAN UNCLASSIFIED PAGE 03 ROME 01069 03 OF 03 141556Z ASSISTANCE TO CREATE DEPENDENT POPULATIONS, THIS PHENOMENON IS NOT SUPPORTED BY GROWTH IN THE RECIPIENT POPULATIONS. ON THE CONTRARY, WFP ASSISTANCE, OCCASIONALLY IN PARTNERSHIP WITH OTHER WELL-RUN ORGANIZATIONS SUCH AS WORLD VISION, IS WELL TARGETED AND PROVIDED EFFECTIVELY AND EFFICIENTLY. ¶21. HUMANITARIAN ASSISTANCE IN THE CAUCASUS CONTINUES TO BE REQUIRED, IF ONLY ON A SMALL SCALE IN COMPARISON TO MANY OTHER AREAS OF THE WORLD. IRONICALLY, THE MODEST SCALE OF ASSISTANCE MAY EXPLAIN WHY DONOR COUNTRIES HAVE NEGLECTED TO CONTRIBUTE TO WFP'S PRROS. CONTRIBUTIONS OF 154,000 METRIC TONS, WHICH REPRESENT TOTAL REQUIREMENTS, WOULD ENABLE WFP TO CARRY OUT ITS ASSISTANCE TO 881,000 INTENDED RECIPIENTS IN ALL THREE COUNTRIES AS PLANNED. DELAYS WILL ENTAIL REDUCTIONS IN PROGRAM SCOPE. ¶22. THE USAID MISSION DIRECTORS IN THE SOUTH CAUCASUS SUPPORT THE WFP PROGRAMS IN THEIR COUNTRIES AND ENCOURAGE A POSITIVE RESPONSE TO THEIR APPEALS ON THE PART OF USAID/FOOD FOR PEACE. ¶23. IN VIEW OF THE FAVORABLE ASSESSMENT OF WFP ACTIVITIES IN THE SOUTH CAUCASUS, THE US MISSION URGES USG FUNDING ORGANIZATIONS, PRINCIPALLY THE FOOD FOR PEACE OFFICE WITHIN USAID, TO TAKE EARLY ACTION TO SUPPORT ALL 3 PRROS. ¶23. MINIMIZE CONSIDERED. HALL UNCLASSIFIED > 2003ROME01069 - Classification: UNCLASSIFIED