UNRWA'S June 2009 Advisory Commission Meeting

UNCLAS JERUSALEM 001089

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SUBJECT: UNRWA'S June 2009 Advisory Commission Meeting

Summary
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1. (SBU) At the June 9-10 Advisory Commission (AdCom) meeting of the
United Nations Relief and Works Agency for Palestine Refugees in the
Near East (UNRWA) in Amman, Jordan, Commissioner General Karen
AbuZayd noted that the total deficit of $107 million, including $39
million of essential operating expenses, will have a significant
impact on the provision of health, education, and relief services to
over 4.6 million Palestinian refugees in the region. Progress on
management reform of the Agency continues; UNRWA is developing a
revitalized fundraising strategy to address its chronic funding
shortfall. Host and donor governments agreed that the High Level
Event commemorating UNRWA's 60th anniversary at the United Nations
in September would have limited speakers given time constraints, but
deferred decision on the speakers list to the New York-based
Steering Committee. During the AdCom, Head of Delegation Liana
Brooks-Rubin announced a USG contribution of $55 million to UNRWA's
General Fund; these funds were incorporated into UNRWA's financial
presentation described below. End Summary.

UNRWA's Deficit Hurts Programs
And Regional Stability
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2. (SBU) In her opening address, UNRWA Commissioner General Karen
AbuZayd highlighted the political and socio-economic events that
continue to increase the humanitarian needs of Palestinian refugees
in the region. UNRWA anticipates a $107 million shortfall amid
increasing needs. AbuZayd emphasized full funding of UNRWA is
necessary to safeguard the basic health and education services
provided to 4.6 million refugees and observed a growing apprehension
among refugees and host governments at the prospect of a reduction
in UNRWA services. AbuZayd concluded her remarks by reiterating the
significant role that UNRWA plays in maintaining regional stability
through serving the Palestinian refugees.

UNRWA Developments in West Bank,
Gaza, Lebanon, Jordan and Syria
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3. (SBU) Each of UNRWA's five field directors described the
operational challenges and progress achieved over the last three
months since the Extraordinary AdCom meeting in February:

-- Gaza: UNRWA Field Director John Ging noted the "profoundly unjust
policies" continue to hurt "the innocent people of Gaza while
helping the violent extremists." Ging said that access remains
extremely limited except for medical supplies and basic food
commodities. Ging noted that Operation Cast Lead destroyed or
damaged over 52,000 homes, 200 schools and many key buildings and
infrastructure. Although many pledges were made to enable the early
recovery and reconstruction of Gaza, no construction materials have
been allowed to enter. Access for supplies needed for UNRWA's daily
operations, Ging noted, has actually improved with the exception of
UNRWA's security equipment, such as armored vehicles, limiting the
mobility of international staff.

-- West Bank: UNRWA Field Director Barbara Shenstone noted that
operations are challenged by territorial fragmentation, insecurity,
and "de-development," largely generated by the barrier, settlement
expansion, and associated demolitions of Palestinian homes. With
rising unemployment, dependency on UNRWA's regular and emergency
programs has increased. Over the coming period, UNRWA/West Bank
will focus on promoting the quality of its core programs in health,
education and social services and strengthen its protection programs
and emergency preparedness.

-- Lebanon: UNRWA Field Director Salvatore Lombardo looked forward
to a more politically stable environment in the wake of the
elections. He reported that Nahr al-Bared (NAB) reconstruction will
soon commence after many delays and hindrances. Lombardo hoped that
the first package -- homes for 1,240 refugee families -- would be
completed by mid-2010. Pledges to date will enable UNRWA to
construct two of the needed eight packages. UNRWA continues its
relief operations to the displaced from NAB, mainly providing rental
subsidies and food assistance; an estimated 15,500 of the 27,000
displaced have returned to shelters in the adjacent camp area.

-- Syria: UNRWA's Acting Field Director Lisa Gilliam noted with
appreciation the stable environment for refugees and said UNRWA
would prioritize youth activities in the coming year. Of the
refugee population, only 17% of refugees complete secondary
education; Gilliam noted that educational achievement has declined
in younger generations compared to older ones. Also, there is
growing incidence of drug and alcohol abuse among Palestinian
refugees in Syria. To address this, UNRWA will strengthen its
vocational training program, provide employment counseling and job
placement, and enhance youth-focused activities.

-- Jordan: Richard Cook, UNRWA's Field Director said that, despite
the Government of Jordan's support, the Agency faces difficult
challenges in meeting the needs of vulnerable groups. For example,
he noted that not all refugees enjoy the advantages of Jordanian
citizenship while others live in remote areas and cannot easily
access UNRWA services. Staff protests over the lack of salary
increases continue to be a challenge. Despite interruptions, Cook
noted that UNRWA made significant achievements in education and
health programs. UNRWA/Jordan's focus over the coming year will be
on increasing the self-reliance of Palestinian refugees while
maintaining core services at an acceptable quality. Over the coming
period, UNRWA will intensify advocacy on behalf of ex-Gazans (which,
unlike most Palestinians in the country, lack Jordanian
citizenship),address the implications of rising medical costs, and
improve inadequate school facilities resulting in double shifting
and over-crowdedness.

UNRWA Financial Overview for 2009;
Outlook for 2010
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4. (SBU) In his presentation to the AdCom, UNRWA Deputy Commissioner
General Filippo Grandi stated that maintaining UNWRA's current level
of service throughout 2009 requires contributions of $545.6 million;
currently, UNRWA is facing a deficit of $107 million, of which $39.3
million is essential and equal to one month of salaries for UNRWA's
nearly 30,000 refugee employees. To compensate for this deficit,
UNRWA will be forced to reduce, among other things, hospitalization
reimbursement, provision of medication, staff training, and
maintenance of facilities. Another concern is the deficit in the
Emergency Programs for the West Bank/Gaza and Lebanon. In the West
Bank, only 18% has been received of the $85 million required
(against pledges totaling 29% of needs); in Gaza, only 24% of the
$346 million has been received (of pledges totaling 54% of needs);
and in Lebanon (for Nahr El Bared reconstruction) only 10% of the
$328 million needed is received (against pledges totaling 21% of
needs). In the West Bank, UNRWA may be forced to halt its emergency
programs by early July, dramatically affecting the lives of the most
vulnerable refugees.


5. (SBU) Grandi presented UNRWA's draft 2010 budget of $832 million,
which includes $571 million for regular programs and another $261
million for projects. He noted that, if the current deficit levels
persist into 2010, UNRWA will be forced to cut back on
hospitalization benefits, cancer screening, oral health clinics,
medications, provision of textbooks, and the number of teachers in
UNRWA schools. Meanwhile, other elements traditionally part of the
regular budget will be "projectized," i.e. individual donors would
need to support these costs directly. Such projects include school
building construction and maintenance and the purchase of medicines
for non-communicable diseases.

Host Governments Concerned that
UNRWA May Reduce Services to Refugees
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6. (SBU) The Governments of Syria and Jordan rejected the suggestion
that UNRWA may have to scale back benefits to Palestinian refugees
and called upon donors to cover the anticipated deficit. Both
Syrian and Jordanian representatives also noted the Arab League's
commitment to provide 7.2% of UNRWA's regular budget and the failure
of member states to fulfill that commitment.

UNRWA Organizational Development and Reform
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7. (SBU) Initiated in 2006, UNRWA's management reform process is
nearing completion. The UNRWA 2010-2011 biennium budget will be the
first that is based on a six-year Medium Term Strategy as well as
field-based needs assessments that link the Agency's overarching
objectives, field-specific needs and available resources. UNRWA
Deputy Commissioner General Grandi noted recent achievements in
refining recruitment procedures, empowering leadership in the
fields, and decentralizing authority and accountability. An
Enterprise Resource Planning computer system, partially funded by
the USG, will allow UNRWA to operationalize decentralized
decision-making while maintaining a high standard of accountability.


UNRWA Develops a New Fundraising Strategy
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8. (SBU) UNRWA's Director for External Relations Fabian McKinnon
presented a new resource mobilization strategy to better address the
structural fiscal deficits that plague the Agency. Although
government donors will continue to provide the majority of funding,
the strategy aims to increase focus on non-traditional donors, such
as foundations, communities, and individuals. McKinnon proposes to
do this through developing networks of influential persons and
organizations, and seeking contribution from non-traditional
resources in key countries.

AdCom Members Welcomes High Level Event
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9. (SBU) The Advisory Commission welcomed the High Level Event (HLE)
commemorating UNRWA's 60th anniversary during the High Level Segment
of the UN General Assembly in September. Intensive discussion
ensued about the number of Foreign Ministers who would be invited to
speak at the event, as several donor countries expressed interest.
The AdCom deferred final decision on the speakers' list to the New
York-based Steering Committee organizing the event.

Future AdCom Chair and Vice Chair Arab States
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10. (SBU) For the first time, the Chair and Vice-Chair of the AdCom
starting June 2009 are both Arab states -- Egypt and Saudi Arabia,
respectively. It is hoped that Saudi Arabia's role as vice chair
will increase the country's financial support to UNRWA.