UNRWA SEEKS ADDITIONAL USD 1 BILLION IN

1. (U) Summary: In a May 19 briefing, UNRWA unveiled its
draft medium-term plan (MTP), designed to make up for ten
years of austerity measures and underfunding. The ambitious
plan, valued at USD 1 billion over five years, includes
much-needed improvements in basic education and health
services as well as more politically controversial plans to
rehabilitate refugee camps. Although the draft plan
presented on May 19 included programs to be implemented in
2004, UNRWA's Comptroller later confirmed that the MTP would
not be launched until 2005 and that UNRWA would seek approval
from the UN's ACABQ for MTP-related modifications to the
agency's current budget. UNRWA has not yet decided how to
divide the plan's costs between its General Fund and project
budgets, nor has it made any decisions regarding the issuance
of an additional appeal to cover these costs. While most
donors welcomed UNRWA's strategic planning efforts, they
also cautioned that they would be unable to meet the full
needs outlined in the plan. Donors and host governments
urged UNRWA to prioritize its medium-term needs and consult
closely with key stakeholders on development of the plan's
budget. UNRWA Deputy ComGen AbuZayd pledged to hold further
consultations on the prioritization and budget of MTP needs
and welcomed refcoord's suggestion that MTP discussions be
included on the agenda of the September 2004 meeting of major
donors and host governments. End summary.



2. (U) In a well-attended May 19 meeting in Amman, UNRWA
briefed donors and host governments on its draft medium-term
plan (MTP). Director of Operations Lionel Brisson explained
that UNRWA started thinking about the agency's longer term
needs in the summer of 2003, in hopes that the roadmap would
create progress toward a regional peace settlement and pave
the way toward economic recovery. UNRWA first began work on
five-year plans for the West Bank and Gaza fields that could
be incorporated with Palestinian Authority plans for economic
recovery and presented to the Ad Hoc Liaison Committee in
late 2003. Unfortunately, political conditions deteriorated
so extensively that the economic recovery plan has not yet
been launched. At the same time, however, UNRWA began
planning for a one-time, high-level conference in Geneva that
would debate the agency's medium-term needs (although not the
MTP itself) and decided to expand its medium-term planning
efforts to all five fields of operation.



3. (U) Acknowledging that the MTP's five-year cost of just
over USD 1 billion "may look ambitious," Brisson argued that
the programs included in the MTP constitute the bare minimum
required to compensate for years of austerity measures and
underfunding and bring UNRWA services back up to the level of
services provided by host authorities. In the education
sector, for example, UNRWA needs additional funds to reduce
average classroom occupancy rates to 40 pupils (most
educational norms call for a maximum of 30 pupils per
classroom), reduce double-shifting from 92 percent to 70
percent in Jordan, and modify classrooms and existing
curricula to introduce new information technology and foreign
language courses required under the host authorities'
curricula. According to Brisson, the MTP programs focus on
rehabilitation of services, upgrading of infrastructure and
socio-economic development initiatives for the Palestinian
refugee community. As part of the plan, UNRWA also seeks
funds to create new headquarters-based planning units,
including a research unit, an urban planning unit and new
units in the education department for research and planning
as well as program monitoring and evaluation. Brisson and
UNRWA Deputy Commissioner General Karen AbuZayd emphasized
that the MTP is still very much a draft document and pledged
that the agency would wait for feedback from the Geneva
conference and from individual stakeholders before finalizing
the plan.



4. (U) While welcoming UNRWA's efforts at strategic
planning, most donors were extremely cautious about their
governments' abilities to meet the needs outlined in the MTP.
Norway, the European Commission (EC), the Netherlands,
Sweden, Switzerland, and the U.S. all urged UNRWA to
prioritize its medium-term needs and break the USD 1 billion
budget into more realistic programs. Brisson acknowledged
that some MTP programs, such as the USD 336 million rehousing
and camp rehabilitation schemes, should be deferred until a
regional peace settlement is reached and the political
climate is more conducive to such expensive programs. Donors
and host governments alike urged UNRWA to consult closely
with key stakeholders as it identified MTP priorities and
refined budget plans.



5. (U) At the May 19 briefing, UNRWA could not answer
donors' questions about the agency's preliminary budget plans
for the MTP. Brisson and AbuZayd said the agency had not yet
decided how to divide costs between the agency's General Fund
and program budgets, nor had it decided whether to issue a
special appeal to cover the new medium-term programs.
AbuZayd said the agency would welcome suggestions from donors
as to which programs (e.g., new IT and special needs
education programs) should be incorporated into UNRWA's
regular program costs. Dismissing the agency's chronically
underfunded project budget as "fiction," Brisson said the
agency would prefer not to rely on the project budget to
implement the MTP's top priorities. He added that UNRWA
hoped to have an MTP budget document ready for donor
consideration in September. AbuZayd welcomed refcoord's
suggestion that the MTP be included on the agenda of the
September 2004 meeting of major donors and host governments,
the agency's next regular consultation with key stakeholders.



6. (U) Although the draft MTP documents circulated to donors
before the briefing (posted on
www.un.org/unrwa/genevaconference) include programs to be
implemented in 2004, UNRWA Comptroller Ramadan Al-Omari later
confirmed to refcoord that the agency will not implement MTP
programs until 2005. In a May 25 e-mail, Al-Omari said that
the MTP would not be finalized until late 2004 and that any
necessary changes to the current UNRWA budget would be
presented to the UN's Advisory Commission on Administrative
and Budget Questions (ACABQ) when it conducts its
mid-biennium budget review for UNRWA. The agency therefore
will not launch the MTP until 2005 and the entire USD 1
billion budget cycle will be pushed back to cover the years
2005 to 2009.



7. (SBU) Comment: UNRWA has made a good-faith attempt at
needs-based budgeting, identifying programs that have gone
sorely underfunded in past years or, in the case of
education, reflect expensive new requirements that UNRWA
simply cannot meet without an extra infusion of cash.
However, UNRWA's argument that its services have fallen
behind those of host authorities is, in some cases,
disingenuous as host authorities have implemented key changes
in their services that UNRWA is not prepared to consider. In
the health sector, for example, host authorities provide free
basic medical care only to their poorest citizens, while
UNRWA provides free basic medical care -- and medicines -- to
all registered refugees regardless of income level. Some of
the MTP's other elements, including large-scale refugee camp
rehabilitation and expansion of microcredit lending schemes,
may be better considered in the context of a regional peace
settlement. It was clear from the May 19 meeting that
further, detailed consultations on MTP priorities and budgets
are required before the agency can move forward on the plan.
UNRWA officials seemed to understand this message and
hopefully will follow through on the consultations promised
by AbuZayd.
GNEHM