GROWING THE WFP DONOR BASE

UNCLAS SECTION 01 OF 02 ROME 001843 SIPDIS FROM U.S. MISSIONIN ROME STATE FOR A/S HOLMES, PRM/P, IO/EDA KOTOK USAID FOR AA/DCHA WINTER, DCHA/FFP LANDIS USDA/FAS FOR CHAMBLISS, TILSWORTH USMISSION GENEVA FOR AMBASSADOR MOLEY AND USAID/KYLOH BRUSSELS FOR AFRICA WATCHERS AND USAID/LERNER NSC FOR JDWORKEN AND AFRICA DIRECTORATE E.O. 12958: N/A TAGS: EAID EAGR PREF EFIN AORC WFP SUBJECT: GROWING THE WFP DONOR BASE -------------- SUMMARY -------------- ¶1. WFP CONVENED AN INFORMAL CONSULTATION AT ITS HEADQUARTERS ON MAY 5, 2004, IN ORDER TO DISCUSS WITH MEMBER COUNTRIES ITS PLANS TO EXPAND ITS DONOR BASE. EMERGING (NON- TRADITIONAL) AND NEW DONORS CONTRIBUTED U.S. DOLLARS (USD) 151 MILLION AND CONTRIBUTIONS FROM THE PRIVATE SECTOR THIS PAST YEAR IN CASH AND SERVICES TOTALED USD 29 MILLION. WFP IS INTENT UPON GROWING ITS RESOURCE BASE EXPONENTIALLY, BASED ON ITS CALCULATION OF ANTICIPATED NEEDS THROUGHOUT THE WORLD, RATHER THAN UPON PAST COMMITMENTS OR ANTICIPATED TRADITIONAL DONOR-FUNDING AVAILABILITIES. WFP ANNOUNCED THAT IT PLANS TO OPEN OFFICES IN BERLIN, PARIS, AND RIYADH, AND STRENGTHEN ITS OUTREACH CAPACITY IN DUBAI. EXECUTIVE DIRECTOR JIM MORRIS SUMMED UP THE EXPANDED FUNDING GOAL AT THE COMMENCEMENT OF THE CONSULTATION: "WE NEED TO PUT REDUCING HUNGER AT THE TOP OF THE INTERNATIONAL AGENDA." END SUMMARY. ¶2. THE ALL-DAY CONFERENCE WAS SCHEDULED BECAUSE OF THE REALIZATION THAT GLOBAL FOOD AID NEEDS CONTINUE TO INCREASE IN RESPONSE TO INCREASING NUMBERS OF CONFLICTS, DROUGHTS, NATURAL DISASTERS, COMPLEX EMERGENCIES AND DEVELOPMENT CHALLENGES. IN VIEW OF THE INCREASED COSTS NECESSARY TO ADDRESS GLOBAL FOOD AID NEEDS, AND IN CONSIDERATION OF WFP'S APPROVED BUDGET FOR THE 2004-2005 BIENNIUM OF USD 4.78 BILLION, THIS CONSULTATION WAS AN OPPORTUNITY FOR WFP TO SHARE ITS THOUGHTS AND SOLICIT FURTHER THINKING FROM MEMBER COUNTRIES ABOUT HOW ITS ROBUST REVENUE GOALS MIGHT BE ACHIEVED. ¶3. IN BRIEF, WFP PLANS TO EXPAND RELATIONS WITH CURRENT DONORS, ENGAGE NEW DONORS AND WORK IN PARTNERSHIP WITH THE PRIVATE SECTOR. ONE RELATIVELY UNTAPPED AREA IS CONTRIBUTIONS FROM THE RECIPIENT COUNTRY ITSELF. RECENTLY, HONDURAS MADE A CONTRIBUTION TO WFP OF USD 3.7 MILLION FOR IN-COUNTRY SCHOOL FEEDING ACTIVITIES AND THE GOVERNMENT OF BANGLADESH REPORTEDLY MAKES AVAILABLE USD 10 MILLION AND 60,000 METRIC TONS OF WHEAT PER ANNUM TO SUPPORT WFP UNDERTAKINGS. WFP EXPECTS THIS TREND TO GROW EVEN FURTHER. TO MAXIMIZE THE VOLUME OF RESOURCES AVAILABLE TO ITS BENEFICIARIES, WFP ALSO WENT ON RECORD IN STATING THAT IT MUST BE ABLE TO ACCEPT ALL REASONABLE OFFERS OF COMMODITIES, GOODS AND SERVICES, AND MUST DO SO IN TRADE-NEUTRAL WAYS THAT MEET THE PRINCIPLE OF FULL-COST RECOVERY. ¶4. WHILE FULL-COST RECOVERY WOULD REMAIN THE RULE FOR ALL DONATED COMMODITIES, WFP PROPOSED THAT COUNTRIES WOULD BE "ELIGIBLE FOR SPECIAL ASSISTANCE" IN MEETING FULL-COST RECOVERY SHOULD THEIR PER CAPITA GROSS NATIONAL INCOME BE USD 2,975 OR LESS, IN CONFORMITY WITH THE OECD DEVELOPMENT ASSISTANCE COMMITTEE'S INCOME DEFINITION FOR LEAST DEVELOPED, LOW-INCOME AND LOWER MIDDLE-INCOME COUNTRIES. ¶5. SPECIFICALLY APPLICABLE TO "TWINNING," (I.E., A MECHANISM TO MATCH NON-TRADITIONAL DONORS OF FOOD AID COMMODITIES WITH TRADITIONAL OR PREFERABLY NON-TRADITIONAL DONORS OF CASH FOR THE DELIVERY OF HUMANITARIAN ASSISTANCE IN FOOD EMERGENCIES),ONLY COUNTRIES THAT MEET THE OECD CRITERIA CLASSIFICATION OF LEAST-DEVELOPED, LOW-INCOME OR LOWER MIDDLE-INCOME COUNTRIES WOULD BE PERMITTED TO DONATE COMMODITIES, FOR WHICH ANOTHER DONOR OR DONORS WOULD BE REQUESTED TO ASSIST IN ENSURING FULL-COST RECOVERY. ¶6. WFP SUGGESTED IT WOULD APPROACH MULTILATERAL CASH DONORS ABOUT A PORTION OF THEIR CONTRIBUTIONS BEING USED TO SUPPORT TWINNING ARRANGEMENTS IN ORDER TO REACH A GREATER NUMBER OF BENEFICIARIES. ¶7. MEMBER COUNTRY RESPONSES TO WFP'S PRESENTATION WERE MIXED. WHILE PAKISTAN FOUND WFP'S PRESENTATION EMINENTLY DOABLE, IT QUESTIONED WHETHER THE OECD LIST WAS THE BEST MEASURE FOR PROVIDING SPECIAL TREATMENT IN ASSISTING TO MEET FULL-COST RECOVERY. MANY EUROPEAN COUNTRIES CRITICIZED THE MOTIVES OF COUNTRIES THAT GIVE IN-KIND DONATIONS, INCLUDING GERMANY, NORWAY, AND THE NETHERLANDS. THERE WERE REPEATED ROME 00001843 001.2 OF 002 Y 5, 2004, IN ORDER TO DISCUSS WITH MEMBER COUNTRIES ITS PLANS TO EXPAND ITS DONOR BASE. EMERGING (NON- TRADITIONAL) AND NEW DONORS CONTRIBUTED U.S. DOLLARS (USD) 151 MILLION AND CONTRIBUTIONS FROM THE PRIVATE SECTOR THIS PAST YEAR IN CASH AND SERVICES TOTALED USD 29 MILLION. WFP IS INTENT UPON GROWING ITS RESOURCE BASE EXPONENTIALLY, BASED ON ITS CALCULATION OF ANTICIPATED NEEDS THROUGHOUT THE WORLD, RATHER THAN UPON PAST COMMITMENTS OR ANTICIPATED TRADITIONAL DONOR-FUNDING AVAILABILITIES. WFP ANNOUNCED THAT IT PLANS TO OPEN OFFICES IN BERLIN, PARIS, AND RIYADH, AND STRENGTHEN ITS OUTREACH CAPACITY IN DUBAI. EXECUTIVE DIRECTOR JIM MORRIS SUMMED UP THE EXPANDED FUNDING GOAL AT THE COMMENCEMENT OF THE CONSULTATION: "WE NEED TO PUT REDUCING HUNGER AT THE TOP OF THE INTERNATIONAL AGENDA." END SUMMARY. ¶2. THE ALL-DAY CONFERENCE WAS SCHEDULED BECAUSE OF THE REALIZATION THAT GLOBAL FOOD AID NEEDS CONTINUE TO INCREASE IN RESPONSE TO INCREASING NUMBERS OF CONFLICTS, DROUGHTS, NATURAL DISASTERS, COMPLEX EMERGENCIES AND DEVELOPMENT CHALLENGES. IN VIEW OF THE INCREASED COSTS NECESSARY TO ADDRESS GLOBAL FOOD AID NEEDS, AND IN CONSIDERATION OF WFP'S APPROVED BUDGET FOR THE 2004-2005 BIENNIUM OF USD 4.78 BILLION, THIS CONSULTATION WAS AN OPPORTUNITY FOR WFP TO SHARE ITS THOUGHTS AND SOLICIT FURTHER THINKING FROM MEMBER COUNTRIES ABOUT HOW ITS ROBUST REVENUE GOALS MIGHT BE ACHIEVED. ¶3. IN BRIEF, WFP PLANS TO EXPAND RELATIONS WITH CURRENT DONORS, ENGAGE NEW DONORS AND WORK IN PARTNERSHIP WITH THE PRIVATE SECTOR. ONE RELATIVELY UNTAPPED AREA IS CONTRIBUTIONS FROM THE RECIPIENT COUNTRY ITSELF. RECENTLY, HONDURAS MADE A CONTRIBUTION TO WFP OF USD 3.7 MILLION FOR IN-COUNTRY SCHOOL FEEDING ACTIVITIES AND THE GOVERNMENT OF BANGLADESH REPORTEDLY MAKES AVAILABLE USD 10 MILLION AND 60,000 METRIC TONS OF WHEAT PER ANNUM TO SUPPORT WFP UNDERTAKINGS. WFP EXPECTS THIS TREND TO GROW EVEN FURTHER. TO MAXIMIZE THE VOLUME OF RESOURCES AVAILABLE TO ITS BENEFICIARIES, WFP ALSO WENT ON RECORD IN STATING THAT IT MUST BE ABLE TO ACCEPT ALL REASONABLE OFFERS OF COMMODITIES, GOODS AND SERVICES, AND MUST DO SO IN TRADE-NEUTRAL WAYS THAT MEET THE PRINCIPLE OF FULL-COST RECOVERY. ¶4. WHILE FULL-COST RECOVERY WOULD REMAIN THE RULE FOR ALL DONATED COMMODITIES, WFP PROPOSED THAT COUNTRIES WOULD BE "ELIGIBLE FOR SPECIAL ASSISTANCE" IN MEETING FULL-COST RECOVERY SHOULD THEIR PER CAPITA GROSS NATIONAL INCOME BE USD 2,975 OR LESS, IN CONFORMITY WITH THE OECD DEVELOPMENT ASSISTANCE COMMITTEE'S INCOME DEFINITION FOR LEAST DEVELOPED, LOW-INCOME AND LOWER MIDDLE-INCOME COUNTRIES. ¶5. SPECIFICALLY APPLICABLE TO "TWINNING," (I.E., A MECHANISM TO MATCH NON-TRADITIONAL DONORS OF FOOD AID COMMODITIES WITH TRADITIONAL OR PREFERABLY NON-TRADITIONAL DONORS OF CASH FOR THE DELIVERY OF HUMANITARIAN ASSISTANCE IN FOOD EMERGENCIES),ONLY COUNTRIES THAT MEET THE OECD CRITERIA CLASSIFICATION OF LEAST-DEVELOPED, LOW-INCOME OR LOWER MIDDLE-INCOME COUNTRIES WOULD BE PERMITTED TO DONATE COMMODITIES, FOR WHICH ANOTHER DONOR OR DONORS WOULD BE REQUESTED TO ASSIST IN ENSURING FULL-COST RECOVERY. ¶6. WFP SUGGESTED IT WOULD APPROACH MULTILATERAL CASH DONORS ABOUT A PORTION OF THEIR CONTRIBUTIONS BEING USED TO SUPPORT TWINNING ARRANGEMENTS IN ORDER TO REACH A GREATER NUMBER OF BENEFICIARIES. ¶7. MEMBER COUNTRY RESPONSES TO WFP'S PRESENTATION WERE MIXED. WHILE PAKISTAN FOUND WFP'S PRESENTATION EMINENTLY DOABLE, IT QUESTIONED WHETHER THE OECD LIST WAS THE BEST MEASURE FOR PROVIDING SPECIAL TREATMENT IN ASSISTING TO MEET FULL-COST RECOVERY. MANY EUROPEAN COUNTRIES CRITICIZED THE MOTIVES OF COUNTRIES THAT GIVE IN-KIND DONATIONS, INCLUDING GERMANY, NORWAY, AND THE NETHERLANDS. THERE WERE REPEATED ROME 00001843 002.1 OF 002 IONARY FLAGS ON POSSIBLE "CONFLICT OF INTEREST" WERE RAISED BY A NUMBER OF OECD DELEGATES. ON THIS LATTER ISSUE, WFP PROVIDED A SAMPLE CODE OF CONDUCT (USED BY UNHCR FOR GOVERNING PRIVATE SECTOR DONATIONS) AND HANDED OUT A SUMMARY OF PRIVATE-SECTOR DONOR SELECTION CRITERIA USED BY THE UN SECRETARY-GENERAL'S OFFICE, UNICEF, UNDP, AND UNHCR; AND CHECK LISTS RELATED TO MAINTAINING THE INTEGRITY OF THE PROCUREMENT PROCESS AND ENSURING NO UNFAIR ADVANTAGE, AS USED BY THE UNSG'S OFFICE, UNICEF, UNDP, UNHCR AND FAO. -------------- WFP - "GEARING UP TO SCALE MT. EVEREST" -------------- ¶8. WFP COMMENTED THAT THE GLOBAL CORPORATE SPONSORING MARKET IS APPROXIMATELY USD 39-52 BILLION, WITH LESS THAN USD 1.12 BILLION SPENT ON HUMANITARIAN ASSISTANCE. WFP'S OBJECTIVE IS TO RAISE 10 PERCENT OF ITS RESOURCES FROM THE PRIVATE SECTOR BY 2007, SOME USD $300 MILLION PER ANNUM. THEY UNDERLINED THAT UNICEF CURRENTLY FUNDS ABOUT ONE-THIRD OF ITS BUDGET FROM NON-GOVERNMENTAL SOURCES. ¶9. THE DRIVER OF THE EXPONENTIAL INCREASE IN THE WFP BUDGET OVER THE PAST TWELVE YEARS (I.E., SINCE THE U.S. ASSUMED THE EXECUTIVE DIRECTORSHIP OF THE ORGANIZATION) HAS BEEN THE U.S. GOVERNMENT. OVERALL, DONOR SUPPORT TO WFP 1992-2003 TOTALED USD 19.94 BILLION, OF WHICH THE UNITED STATES CONTRIBUTED USD 8.77 BILLION (44 PERCENT). THE UNITED STATES ALSO DRIVES THE GLOBAL FOOD AID AGENDA; WE PROVIDED, IN 2003, 57 PERCENT OF ALL GLOBAL FOOD AID AND 51 PERCENT OF ALL EMERGENCY FOOD ASSISTANCE. -------------- COMMENT -------------- ¶10. WITH MASSIVE OPERATIONS IN IRAQ, SOUTHERN AFRICA AND ETHIOPIA, 2003 WAS A "BANNER" FUND RAISING YEAR FOR WFP. USD 2.6 BILLION IN CONTRIBUTIONS WERE GENERATED. EMERGING (NON-TRADITIONAL) AND NEW DONORS CONTRIBUTED USD 151 MILLION AND CONTRIBUTIONS FROM THE PRIVATE SECTOR TOTALED USD 29 MILLION. BASED ON ITS CALCULATION OF ANTICIPATED NEEDS THROUGHOUT THE WORLD, RATHER THAN UPON PAST COMMITMENTS OR ANTICIPATED DONOR-FUNDING AVAILABILITIES, WFP IS FIRMLY COMMITTED TO RAISING ITS REVENUE BASE EVEN HIGHER. AS PART OF ITS IMMEDIATE NEXT STEPS, WFP ANNOUNCED THAT IT PLANS TO OPEN OFFICES IN BERLIN, PARIS, AND RIYADH, AND STRENGTHEN ITS OUTREACH CAPACITY IN DUBAI. EXECUTIVE DIRECTOR JIM MORRIS SUMMED UP THE EXPANDED FUNDING GOAL AT THE COMMENCEMENT OF THE CONSULTATION: "WE NEED TO PUT REDUCING HUNGER AT THE TOP OF THE INTERNATIONAL AGENDA." CLEVERLEY ROME 00001843 002.2 OF 002 IONARY FLAGS ON POSSIBLE "CONFLICT OF INTEREST" WERE RAISED BY A NUMBER OF OECD DELEGATES. ON THIS LATTER ISSUE, WFP PROVIDED A SAMPLE CODE OF CONDUCT (USED BY UNHCR FOR GOVERNING PRIVATE SECTOR DONATIONS) AND HANDED OUT A SUMMARY OF PRIVATE-SECTOR DONOR SELECTION CRITERIA USED BY THE UN SECRETARY-GENERAL'S OFFICE, UNICEF, UNDP, AND UNHCR; AND CHECK LISTS RELATED TO MAINTAINING THE INTEGRITY OF THE PROCUREMENT PROCESS AND ENSURING NO UNFAIR ADVANTAGE, AS USED BY THE UNSG'S OFFICE, UNICEF, UNDP, UNHCR AND FAO. -------------- WFP - "GEARING UP TO SCALE MT. EVEREST" -------------- ¶8. WFP COMMENTED THAT THE GLOBAL CORPORATE SPONSORING MARKET IS APPROXIMATELY USD 39-52 BILLION, WITH LESS THAN USD 1.12 BILLION SPENT ON HUMANITARIAN ASSISTANCE. WFP'S OBJECTIVE IS TO RAISE 10 PERCENT OF ITS RESOURCES FROM THE PRIVATE SECTOR BY 2007, SOME USD $300 MILLION PER ANNUM. THEY UNDERLINED THAT UNICEF CURRENTLY FUNDS ABOUT ONE-THIRD OF ITS BUDGET FROM NON-GOVERNMENTAL SOURCES. ¶9. THE DRIVER OF THE EXPONENTIAL INCREASE IN THE WFP BUDGET OVER THE PAST TWELVE YEARS (I.E., SINCE THE U.S. ASSUMED THE EXECUTIVE DIRECTORSHIP OF THE ORGANIZATION) HAS BEEN THE U.S. GOVERNMENT. OVERALL, DONOR SUPPORT TO WFP 1992-2003 TOTALED USD 19.94 BILLION, OF WHICH THE UNITED STATES CONTRIBUTED USD 8.77 BILLION (44 PERCENT). THE UNITED STATES ALSO DRIVES THE GLOBAL FOOD AID AGENDA; WE PROVIDED, IN 2003, 57 PERCENT OF ALL GLOBAL FOOD AID AND 51 PERCENT OF ALL EMERGENCY FOOD ASSISTANCE. -------------- COMMENT -------------- ¶10. WITH MASSIVE OPERATIONS IN IRAQ, SOUTHERN AFRICA AND ETHIOPIA, 2003 WAS A "BANNER" FUND RAISING YEAR FOR WFP. USD 2.6 BILLION IN CONTRIBUTIONS WERE GENERATED. EMERGING (NON-TRADITIONAL) AND NEW DONORS CONTRIBUTED USD 151 MILLION AND CONTRIBUTIONS FROM THE PRIVATE SECTOR TOTALED USD 29 MILLION. BASED ON ITS CALCULATION OF ANTICIPATED NEEDS THROUGHOUT THE WORLD, RATHER THAN UPON PAST COMMITMENTS OR ANTICIPATED DONOR-FUNDING AVAILABILITIES, WFP IS FIRMLY COMMITTED TO RAISING ITS REVENUE BASE EVEN HIGHER. AS PART OF ITS IMMEDIATE NEXT STEPS, WFP ANNOUNCED THAT IT PLANS TO OPEN OFFICES IN BERLIN, PARIS, AND RIYADH, AND STRENGTHEN ITS OUTREACH CAPACITY IN DUBAI. EXECUTIVE DIRECTOR JIM MORRIS SUMMED UP THE EXPANDED FUNDING GOAL AT THE COMMENCEMENT OF THE CONSULTATION: "WE NEED TO PUT REDUCING HUNGER AT THE TOP OF THE INTERNATIONAL AGENDA." CLEVERLEY NNNN 2004ROME01843 - Classification: UNCLASSIFIED