UNRWA REFORM: STAKEHOLDER MEETING ADVANCES DONOR

C O N F I D E N T I A L SECTION 01 OF 04 AMMAN 004593

SIPDIS

DEPT FOR PRM, NEA AND IO

E.O. 12958: DECL: 06/06/2015
TAGS: PREF PREL PGOV EAID KPAL IS JO UNRWA
SUBJECT: UNRWA REFORM: STAKEHOLDER MEETING ADVANCES DONOR
AGENDA


Classified By: Acting DCM Christopher Henzel for Reasons 1.4 (B) and (D
)


1. (C) SUMMARY: Leadership change at the UN Relief and Works
Agency for Palestine Refugees in the Near East (UNRWA),
combined with coordinated donor pressure, turned that
agency's latest (May 17-20) round of stakeholder
consultations in Amman into a rare debate on the role UNRWA
should play in developing the Palestinian state after Gaza
withdrawal. UNRWA responded positively to donors' calls to
start harmonizing its first five-year development plan for
Palestinian refugees in the region (its primary tool to
respond to Gaza disengagement) with the PA and
refugee-hosting nations, but most donors indicated that they
would be unable to ramp-up financial support in 2005, raising
questions about the viability of programs UNRWA hopes to
launch in Gaza this fall to alleviate camp overcrowding and
increase micro-credit and vocational training programs. The
Amman meetings also kick-started a long-awaited UK-funded
external review of UNRWA management, and built support for a
governance reform plan that is centered on reviving UNRWA's
semi-dormant Advisory Commission (AdCom) by December. Sweden
announced its intention to table the UNGA resolution called
for in that plan, which would establish new financial
criteria for membership. However, Sweden is coming under
pressure from Spain to break the consensus built in Amman.
PRM PDAS Greene also signed the first USG-UNRWA Framework
Agreement outlining USG policy concerns on the margins of
this conference. END SUMMARY.

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GAZA WITHDRAWAL FOCUSES DEBATE ON UNRWA'S DEVELOPMENT ROLE
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2. (U) Senior UNRWA officials met with the agency's top 23
donors, the PLO Department of Refugee Affairs (PLO/DORA) and
refugee-hosting nations, including Jordan, Syria, Lebanon,
and Egypt, in Amman May 17-20. To address major donors'
long-standing concerns about UNRWA's readiness to respond to
Israel's plan to withdraw from Gaza and parts of the West
Bank, Acting Commissioner General Karen Abu Zayd used the
two-day meeting to showcase how UNRWA hopes to modify its
emergency programs and to start implementing the agency's
first five-year development plan (i.e., the UNRWA Medium Term
Plan) in Gaza this fall. Using an UNSECOORD briefing on the
difficulty the UN is facing refining its planning assumptions
as an opening, UNRWA made a late-breaking appeal for
donations to maintain its emergency programs through
September. (NOTE: UNSECOORD predicted that the IDF will not
be in a position to uphold its current plan to facilitate
humanitarian agency movement within the Gaza Strip in the
evenings and at weekends (the UN's best case access scenario)
and focused on the UN's "worst case" access scenario -- a
settler withdrawal "under fire" that would result in extended
periods where humanitarian agencies would be unable to move
personnel and supplies. END NOTE.)

USG BRIDGES GAP IN GAZA EMERGENCY PROGRAM FUNDING
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3. (SBU) Gaza Field Director Lionel Brisson explained that
the agency needs to bridge a USD 10 million shortfall to
maintain its top two interventions in the Gaza Strip (i.e.,
expanding emergency job creation programs by targeting
unemployed youth, as well as unemployed heads of households,
and continuing its current emergency food distributions,
which supports over half of Gaza's population). In response,
USDDEL head PRM PDAS Rich Greene confirmed the USG's recent
decision to provide a USD 20 million contribution to UNRWA,s
current emergency appeal. He also urged Brisson to take
immediate steps to pre-position emergency food stocks in
central Gaza, the area most vulnerable to closure, as well as
in UNRWA's warehouses in the north and south. No other
donors used the semi-annual meeting to announce new
contributions to the UNRWA Emergency Appeal, on which the
majority of the 1.6 million refugees in the West Bank and
Gaza are currently dependent. As of May 19, UNRWA had
received pledges of USD 84.5 million of the USD 185 million
it has requested. However, USD 30 million of that is
earmarked for emergency housing in Rafah.

UNRWA'S WEST BANK FIELD MAY RELOCATE OFFICES
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4. (U) UNRWA,s West Bank Field Director, Anders Fange,
cautioned that the humanitarian needs of refugees are likely
to increase in the West Bank over the next year due to
continuing construction of the security barrier. Sharing an
internal impact study of the barrier construction's impact on
the mobility of UNRWA's local West Bank staff and the
accessibility of UNRWA facilities, Fange also informed donors
and host authorities that he had felt compelled to start
contingency planning to anticipate the likelihood that his
field staff will have to start "cross-border"-like operations
working out of its East Jerusalem Headquarters (which houses
one of UNRWA's primary warehouse facilities) when the
"Jerusalem envelope" is completed. Fange said UNRWA is also
concerned that it will be unable to consistently access
refugee communities located in the seam zones between the
Green Line and the barrier. (NOTE: UN Office of the
Coordinator for Humanitarian Affairs OpT Mission told
PRM/PDAS Greene that OCHA shares UNRWA's assessment May 15.
END NOTE.) Fange said that UNRWA may re-locate some of its
East Jerusalem field and warehouse operations in Ramallah
later this year. Although Fange's effort to prevent
disruptions in UNRWA services was welcomed by donors, the PLO
Department of Refugee Affairs urged UNRWA not to move ahead
with the proposed relocation, noting its political
implications.
NEW APPROACH TO POVERTY ALLEVIATION AND CAMP DEVELOPMENT
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5. (U) UNRWA also outlined its plans to implement new
approaches to poverty alleviation and camp infrastructure
development contained in the agency's 2005-2009 Medium Term
Plan (MTP)- released in February. It argues that launching
these new activities would alleviate camp overcrowding and
promote economic development in Gaza post-disengagement.
(NOTE: Although UNRWA received a record USD 500 million from
donors for its regular budget, special projects, and
emergency appeal for the West Bank and Gaza in 2005, it is
operating on a shoestring and has insufficient resources to
maintain its facilities, build new infrastructure, and
reverse a decade of staff attrition. To reverse this
situation, UNRWA released the MTP to fund the new schools,
teachers, medical clinics, doctors, social workers, housing,
and other expenses detailed in UNRWA,s with a preliminary
USD 1.1 billion price tag. UNRWA,s traditional major donors
endorsed the objectives UNRWA is attempting to achieve
through its MTP at the October 2004 UNRWA meeting in Amman,
but urged UNRWA to refine its planning before revising its
budget requirements. END NOTE.)

FINANCIAL IMPLICATIONS: 33 PERCENT BUDGET INCREASE
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6. (U) The financial implications of UNRWA's decision to
start integrating MTP activities into its current budget and
the 2006-2007 biennium budget the agency is in the process of
finalizing, are significant. UNRWA projected a 33 percent
increase in its requirements over 2004-2005 (the agency set
its 2006 budget at USD 489 million and 2007 budget at USD 506
million at the Amman meetings). However, it conceded in its
briefing to donors that it has not yet incorporated the cost
of implementing certain critical reforms, including UNRWA's
decision to hire a poverty economist to modernize its relief
programs by establishing needs' based eligibility criteria
and harmonizing the assistance UNRWA provides unemployed
refugees with that the PA and other refugee-hosting nations
provide.

LUKEWARM DONOR, HOST NATION RESPONSE
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7. (SBU) In a coordinated response, the U.S., Canada, EU,
Sweden, the Netherlands and Switzerland called on UNRWA to
recognize that the MTP is a working document that requires
further elaboration, prioritization, and harmonization with
host nations/PA planning before it can be fully integrated
into regular budgets. Donors also urged UNRWA to develop
new, joint planning with the PA under the leadership of
Quartet Special Envoy Wolfensohn. The U.S. and EU
underscored the point by noting that they would not be able
to provide significant additional resources to UNRWA's
2006-07 budget. (NOTE: The USG provided USD 127 million in
2004, and the EU USD 130 million ) together accounting for
over one-half of all contributions. END NOTE.) PLO/DORA
reinforced donor's appeal for joint planning by offering to
facilitate PA-UNRWA coordination. Abu Zayd assured donors
that UNRWA would continue to work with the PA to harmonize
UNRWA's MTP with the PA's own five-year Medium Term
Development Plan. She also informed donors that Wolfensohn
had agreed to tour UNRWA's facilities in Gaza in June.


8. (C) However, the head of UNRWA's new Camp Development
Unit, Guy Siri, raised fundamental questions about UNRWA's
mandate to launch its camp re-development initiative in Gaza
when he noted that UNRWA hopes to promote "home ownership."
While quickly clarifying that by "ownership" he meant that
refugees would have a stake in the process of camp
development rather than legal title to their dwelling, Siri's
presentation prompted the Jordanian, Lebanese, and Syrian
delegates to inform UNRWA that additional land would not be
forthcoming. (NOTE: 1.3 of the 4.1 million refugees
registered with UNRWA live in 59 camps in the region.
Although overcrowding exists in camps in all five UNRWA
fields (Jordan, Syria, Lebanon, the West Bank, and Gaza) it
is worst in Gaza where Burj El Barajneh camp has a density of
200,000/sq km compared to the Gaza average of 85,000 people
per square kilometer, already significantly higher than Hong
Kong, for example, which averages 35,000/sq km. END NOTE.)

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GOVERNANCE REFORM
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9. (C) PDAS Greene used the Amman meetings to re-invigorate
the UNRWA ComGen search with other major donors active on
governance reform (Canada, Switzerland, the EU, Sweden, and
the UK). Reiterating that the USG is not seeking the ComGen
position given long-standing practice to reserve UNRWA,s
Deputy ComGen for an Amcit, he suggested that donors
collectively underscore the importance of filling the ComGen
slot with the SYG's office, underscoring the importance of
identifying a Commissioner General ahead of Gaza withdrawal.
Conceding that they had produced no viable European or
Canadian candidates are six months of intensive searching,
the UK and Switzerland argued that Amcit Acting ComGen Abu
Zayd's interim leadership should be formally extended to
ensure that she has the standing to push through internal
governance reforms and UNRWA-PA coordination during the
disengagement period in the event a replacement is not
identified. Sweden went further, suggesting that donors
agree to recommend her as the next ComGen. PDAS Greene
responded that the USG is pleased with the job Abu Zayd has
done as Acting ComGen, especially in providing greater
transparency and in improving UNRWA's poor relations with
Israel, but has not decided to endorse an American for the
job. Canadian Middle East Peace Process representative Jill
Sinclair suggested that it was time to persuade the SYG to
undertake innovative new methods, such as employing a
headhunter or an advertising campaign to identify good
candidates, or to consider consolidating UNRWA,s split
Gaza/Amman Headquarters in Jordan.

DFID LAUNCHES LONG-AWAITED MANAGEMENT REFORM STUDY
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10. (U) The UK also announced that two of its former
diplomats, Robin Kealy and Geoffrey Haley, both of whom have
worked extensively in the region, would conduct a
long-awaited external review of UNRWA,s management on behalf
of the UK,s Department for International Development (DFID).
DFID assured donors that its report would be issued by
October. At a pre-meeting coordination session, most major
donors agreed that this review should form the basis of a
comprehensive "management reform package," that donors would
need to back financially over the next two years.

PLAN TO REVITALIZE DORMANT ADCOM BY 2006 LAUNCHED
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11. (U) The May meeting also advanced a controversial
proposal to overhaul UNRWA's governance structures by 2006
that a regionally-based trilateral (i.e., UNRWA, donor,
refugee hosting nation) negotiation team, the UNRWA Working
Group on Stakeholder Relations (WGSR),had developed over the
last six months. (NOTE: Former UNRWA ComGen Peter Hansen
reluctantly agreed to establish the WGSR at its October 2004
MDHM meeting to respond to demands for increased transparency
that were raised at a high-level international conference
(convened in Geneva to review UNRWA's operations) last June.
END NOTE.) Given that the majority of UNRWA donors, the PLO
and refugee-hosting nations participated in the WGSR, the
conference participants widely endorsed the two-track plan,
which is centered on the following activities:

-- Revitalize UNRWA,s UNGA-mandated Advisory Commission,
which currently meets once a year to review the ComGen's
annual report to the UNGA, by establishing financial criteria
for membership and by drafting rules of procedure that will
create regular budget and programmatic reviews by donors and
refugee-hosting nations.

-- Transform the semi-annual MDHM conferences into
substantive annual workshops between UNRWA and other refugee
services providers (i.e., UN, NGOs and host nations).

To ensure the plan's launch, Sweden offered to table the
draft UNGA resolution that would be required to expand AdCom
membership at the conference. While the Swedish delegation
indicated that it would use the consensus elements negotiated
within the WGSR, it is under pressure from Spain, which
announced its desire to join the AdCom at the May meetings,
to relax the financial criteria agreed in Amman and
Jerusalem-based negotiations. (NOTE: The WGSR focused on
developing consensus on criteria to add new AdCom members.
The majority of donors, the PLO and refugee-hosting nations
agreed that new membership should be based on financial
support to UNRWA's regular budget (i.e non-emergency program
support) and proposed an average annual contribution of USD
five-million over the 2000-20005 period as a formula. This
would qualify eight new members states: Sweden, Norway,
Netherlands, Canada, Italy, Denmark, Germany and Switzerland
plus the EU, as an observer. Spain falls USD 4.7 million
short. Early opposition by Turkey, Japan and Jordan to any
proposal to remove current AdCom members, suggests that it
will be difficult to apply these criteria to current members.
END NOTE.) In addition, the PLO made a last-minute appeal to
raise its AdCom status from observer to full member, citing
its full-member status in ESCWA. The PLO found no support
among donors, given that the AdCom makes no practical
distinction between observers and full members, but universal
endorsement from refugee hosting nation delegations, hardened
the PLO's resolve.


12. (SBU) The conference asked the WGSR to continue to work
with UNRWA through August to draft the AdCom's first rules of
procedure, which would have to be adopted by the AdCom
itself, and to identify the financial requirements needed to
stand up an AdCom secretariat. While most major donors agree
that a secretariat would be essential to establish regular
budget and program reviews, Japan indicated it would not
offer funding. Donors also called on UNRWA to abandon the
current MDHM conference format by early 2006, and accept the
WGSR's recommendation that it turn its informal, consultative
meetings into thematic, information-sharing sessions among UN
agencies and NGOs providing services to Palestinian refugees.

U.S.-UNRWA SIGN FIRST FRAMEWORK AGREEMENT
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13. (C) PDAS Greene and the Acting UNRWA Comgen also signed
the first annual USG-UNRWA Framework Agreement, which details
USG policy concerns and outlines UNRWA actions to address
them, on the margins of this conference.


14. (SBU) COMMENT: Unlike previous UNRWA Major Donor and Host
Nation (MDHM) conferences, the absence of former UNRWA
Commissioner General Peter Hansen, who departed UNRWA in
March after a nine year term, combined with UNRWA's decision
to use Gaza disengagement to implement its first five-year
Medium Term Plan, advanced a reform agenda that donors have
been pressing for years. The revitalized AdCom and Framework
Agreement should be useful new tools to shape UNRWA,s
priorities and address remaining USG concerns. END COMMENT.

HALE