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Cablegate: Unrwa's June 2008 Advisory Commission Meeting

VZCZCXRO4157
PP RUEHROV
DE RUEHJM #1050/01 1721147
ZNR UUUUU ZZH
P 201147Z JUN 08
FM AMCONSUL JERUSALEM
TO RUEHC/SECSTATE WASHDC PRIORITY 1858
INFO RUEHXK/ARAB ISRAELI COLLECTIVE
RUCNDT/USMISSION USUN NEW YORK 2489
RUEHGV/USMISSION GENEVA 0153
RHEHNSC/NSC WASHDC

UNCLAS SECTION 01 OF 02 JERUSALEM 001050

SENSITIVE, SIPDIS

DEPT FOR PRM/FO, PRM/ANE, NEA/IPA

E.O. 12958: N/A
TAGS: PREF PREL PGOV PHUM EAID KPAL

SUBJECT: UNRWA'S JUNE 2008 ADVISORY COMMISSION MEETING

REF(S): (A) Jerusalem 742 (B) Beirut 883

1. (SBU) UNRWA's Advisory Commission held its biannual meeting June
10-11 in Damascus to discuss current developments affecting
Palestinian refugees, UNRWA's financial situation, ongoing
management reforms, and the development of UNRWA's 6-year,
Medium-Term Strategic Plan. End Summary.

UNRWA Developments in West Bank,
Gaza, Lebanon, Jordan and Syria
-------------------------------

2. (SBU) UNRWA Commissioner General Karen AbuZayd noted that the
session marked "the sober anniversary of 60 years of Palestinian
displacement." She said Palestinians' situation in the West Bank
and Gaza remains precarious and poverty and unemployment are rife.
In the West Bank, she said, physical and administrative obstacles to
movement seem to be permanent, "destroying Palestinian hopes of a
return to normalcy." Diplomatic efforts, she said, "have yielded
nothing; Israel's response has been inconsequential." She said
these obstacles prevent UNRWA access to refugees and increase the
costs of transporting goods and people. In Gaza, AbuZayd said there
is "Israeli disregard for" and Palestinian violations of
international humanitarian law on protection of civilians. In
Lebanon, she noted opportunities for strong international support
and hope that President Sleiman's election will result in improved
living conditions for Palestinian refugees.

3. (SBU) AbuZayd focused on UNRWA's two principal preoccupations:
the agency's financial situation and management reform. Budget
shortfalls, she said, have constantly compelled UNRWA to forego
important innovations. "Year after year of unmet needs leave us
unsurprised that education and health services suffer." She noted
that Finland will join the UNRWA Advisory Commission as its
contributions place it above the threshold required to join.

4. (SBU) Each of UNRWA's five field directors described the past six
months' operational successes and challenges:

-- UNRWA Director for Gaza Operations John Ging highlighted two
issues impeding UNRWA operations: ongoing violence and lack of
access for people and goods. He said fuel shortages continue to
negatively impact Gaza refugees' quality of life and affected
UNRWA's ability to deliver food assistance in April. He noted that
another 20 trucks of non-food materials are needed by June 20 to
allow 248,000 children to participate in UNRWA's Summer Games.
Because of UNRWA's poor financial situation and the inability to
implement construction projects in Gaza, he said 54,000 refugee
children will be unable to attend UNRWA schools for the academic
year beginning September 2008.

-- UNRWA Director for West Bank Operations Barbara Shenstone
similarly reported that the situation is "getting worse, not
better." Recent psycho-social studies of children in WB/G revealed
that 73 percent of Palestinian youth are clinically depressed, she
said. She said that UNRWA is witnessing changes in refugees' food
consumption patterns, with West Bank households now spending an
average of 57 percent of their income on food. Shenstone also noted
that roadblocks have increased over the past six months to 607
despite diplomatic efforts with Israel to ease movement
restrictions.

-- UNRWA Director for Lebanon Operations Richard Cook previewed the
June 23 conference in Vienna on Nahr al- Barid refugee camp and
appealed to AdCom members to support UNRWA's appeal for the camp's
recovery and reconstruction. He highlighted the need to improve
living standards of Palestinian refugees in Lebanon, which remain
among the lowest in all of UNRWA's five fields.

-- UNRWA Directors for Syria and Jordan, Panos Moumtzis and Roger
Davies respectively, spoke of the increased demand on resources as a
result of consumer price increases, forcing refugees living on the
economic margins to seek UNRWA assistance and requiring staff salary
increases due to higher public sector wages. Both stressed the need
for additional resources in education, particularly in constructing
and/or rehabilitating schools that have stood for 50 years.

UNRWA Facing Bleak Financial Situation in 2008-2009
--------------------------------------------- ------

5. (U) UNRWA Deputy Commissioner General Filippo Grandi noted that
UNRWA anticipates a 2008 budget shortfall of USD 118.1 million and,
in 2009 (based on 2008 income), a shortfall of USD 146.6 million.
UNRWA first detailed its unbudgeted requirements at the April 30
Extraordinary AdCom (Ref A). These requirements, caused by
increased fuel and food costs and rises in public sector wages and
commensurate increases in UNRWA staff salaries, now total USD 44.3

JERUSALEM 00001050 002 OF 002


million. Meanwhile, no donors have pledged new contributions to the
UNRWA 2008 General Fund. (Note: In an aside, Grandi noted that DFID
may contribute an additional $4 million as a performance incentive.
End note). In addition to the unbudgeted expenditures, UNRWA
continues to face USD 98.8 million in unfunded requirements, such as
building maintenance, hospitalization services, school and medical
equipment, and additional staff.

6. (U) The impact of the combined unfunded and unbudgeted shortfalls
(equal to USD 118.1 million) will directly affect the agency's
ability to function, to meet the food and cash needs of vulnerable
refugees, and to maintain the quality of health and education
services. "If we cannot recruit enough staff, we cannot meet the
norms we have set for ourselves to limit class sizes or
doctor/patient ratios."

UNRWA's Progress on Organizational Reform
-----------------------------------------

7. (U) Grandi presented a report on the Organizational Development
Program (ODP) with particular emphasis on program management
reforms. He said he was pleased to report that UNRWA had made
significant achievements in developing new Human Resource policies,
procurement procedures, decentralized decision-making procedures,
and planning for an Enterprise Resource Planning (ERP) system. The
ERP, as UNRWA briefed donors over the past two months, will require
an additional $17.6 million. In 2009, UNWRA will also seek $4.2
million to complete the final year of the ODP.

8. (U) Grandi said 2008-2009 will be particularly challenging
because UNRWA will develop its first biennium budget that is based
on strategic goals underpinned by needs assessments in the field.
Grandi said successful completion of this next budget process will
fully realize UNRWA's organizational development reforms. He
announced that each of UNRWA's five fields conducted needs
assessments, which will be reviewed over the next three months by
Program Department Directors. Each Department director will then
provide strategic technical guidance to the fields. This guidance
will feed into the Medium Term Strategy 2010-2015 and the Field
Implementation Plans, which will form the basis for the 2010-2011
biennium budget. The MTS and FIPs will be in rough draft by
November 2008. A draft biennium budget will be ready in April - May
2009, Grandi said.

9. (U) Grandi expressed concern over the risks associated with the
OD process, namely the inability to deliver improved services if
donors are not forthcoming with increased contributions. He also
worried about the possible lack of buy-in among staff ("reforms not
embedded into the organization's foundations") and that OD-funded
international posts would not be mainstreamed by the end of 2009.
He noted that, of the 20 international posts UNRWA sought to
regularize in the current biennium, only 6 were approved by the UN.
Another 14 are needed, including positions that are currently funded
by the ODP, such as the Spokesperson, Director for HR, Program
Support Officer, and Planning and Evaluation Officers.

UNRWA's First Ever 6-Year Strategy Document
-------------------------------------------

10. (SBU) Discussion between host and donor governments on the
UNRWA's Medium-Term Strategy revealed a wide range of views. The
SARG representative stated that UNRWA should not prioritize among
basic services while the Government of Jordan representative
objected to any decrease in the scope or scale of UNRWA services,
which "are already below acceptable levels." UNRWA should be doing
more, not less, to provide shelter rehabilitation and education,
they averred. The Government of Lebanon representative also took
issue with UNRWA's draft strategy paper and requested further
consultation with UNRWA. The PLO representative noted the political
and humanitarian imperative to provide for Palestinian refugees'
basic needs. He also said "we should not forget UNRWA's moderating
influence in the region."

11. (SBU) Donor government representatives commented that UNRWA must
make difficult choices in light of limited resources. The USG
delegation specifically mentioned the need for the U.S. and others
to be able to articulate the impact of budget shortfalls to our
various appropriators. Canada stressed the importance of basis the
budget on needs assessments in the fields as well as strategic
priorities. AdCom members agreed that further discussion on
UNRWA's strategic choices will be critical in coming months.

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