Cablegate: Unrwa's November 2009 Advisory Commission Meeting

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E.O. 12958: N/A

SUBJECT: UNRWA'S November 2009 Advisory Commission Meeting


1. (SBU) At the November 17-19 Advisory Commission (AdCom) meeting
of the United Nations Relief and Works Agency (UNRWA), Commissioner
General Karen AbuZayd highlighted chronic funding shortfalls and
looked to host and donor governments to consider innovative ways to
finance UNRWA operations. UNRWA officials described continued
operational challenges created by access restrictions in Gaza and
the West Bank, deplorable camp conditions in Lebanon, and poverty
and youth unemployment in Jordan and Syria. Deputy Commissioner
General Filippo Grandi presented a bleak budget outlook for 2010,
predicting a USD 140 million shortfall in the USD 571 million
budget. PRM Assistant Secretary Eric P. Schwartz highlighted the
USG commitment to sustaining Palestinian refugees, noting that the
USG contributed USD 268 million to UNRWA in 2009, and urged donors
to respond to the agency's financial crisis. End Summary.

UNRWA Commissioner General Karen AbuZayd
Urges Hosts and Donors to Persevere

2. (SBU) In her remarks, UNRWA Commissioner General AbuZayd urged
AdCom members to sustain the climate of trust between host
governments, donor governments, and UNRWA despite mounting
challenges, and to enable the agency to continue to meet its mandate
to serve Palestinian refugees. She stressed the gravity of UNRWA's
financial situation, noting that UNRWA faces a shortfall of USD 90
million in 2009, of which USD 7.3 million represents basic running
costs. She projected a 2010 budget deficit of USD 140 million.
AbuZayd warned that chronic shortfalls are affecting the quantity
and quality of UNRWA's health and education services, generating
anxiety among refugees and host governments. She called upon AdCom
members to support the proposals of the Working Group on the
Financing of UNRWA and request that the UN review the nature and
level of funding provided to UNRWA from the UN regular budget.

3. (SBU) AbuZayd also highlighted the difficulties UNRWA faces on
the ground in the West Bank and Gaza. She said that access and
movement restrictions on Gaza have tripled the number of residents
categorized as "abject poorQto 300,000. AbuZayd also warned that
the psychological damage caused by the conflict to Gaza's children
creates riper conditions for radicalization and extremism. She
noted that in the West Bank, accelerated settler violence and
increased demolition and displacement created a greater need for
protection. She urged AdCom members to advocate and work for a just
and lasting solution to the refugee issue, arguing that this is as
important as financial support to UNRWA.

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

4. (SBU) Each of UNRWA's five field directors described the
operational challenges they faced and the progress they achieved
over the last six months since the June AdCom meeting:

-- Gaza: UNRWA Field Director John Ging stated that since the
"massive Israeli assault" eleven months ago, there has been "no
recovery, no reconstruction, and no economy." Current conditions
undermine the hope of even the most stalwart, he said. Ging noted
that supplies to Gaza over the past seven months have averaged 20
percent of the pre-June 2007 volume, and that despite the
U.S.-negotiated Agreement on Movement and Access, Israeli
authorities have unilaterally declared Sufa and (soon) Nahal Oz
crossings closed. Only 65 percent of Gazans have regular access to
water, while 94 percent of the private sector workforce is
unemployed, he added. Within this restrictive framework, Ging said,
there is positive cooperation between UNRWA and the Israeli Ministry
of Defense. Ging noted that 90 percent of the UNRWA/Gaza budget is
for staff salaries. Citing shortfalls in UNRWA's regular budget,
Ging expressed concern that his local staff may face additional
financial hardships despite their "heroic performance" in 2009.
Meanwhile, he noted, Palestinian Authority teachers, who are being
paid despite not working, received a 7 percent salary increase.

-- West Bank: UNRWA Field Director Barbara Shenstone noted that
refugees in the West Bank continue to live in a protracted
humanitarian crisis, at the core of which, she said, is the
"military occupation." She assessed that West Bank poverty rates
stand at roughly 40 percent, and unemployment in the most vulnerable
communities is as high as 50 percent. She added that an uncertain
political and security environment exacerbates these social
conditions, increasing Palestinian anxiety -- as demonstrated, for
example, through a rise in domestic violence. Shenstone highlighted
UNRWA/West Bank's focus on safeguarding and advancing the rights of

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refugees with a range of UNRWA programs. She noted that UNRWA seeks
to reduce violence and enhance social studies and the human rights
curriculum in the schools, while improving psycho-social care and
mobile health services to vulnerable groups.

-- Lebanon: UNRWA Field Director Salvatore Lombardo said that
substandard living conditions in the camps in Lebanon have a very
real and severe impact on the minds of Palestinian refugees.
Lombardo said that he hoped that in 2010, a new Lebanese Council of
Ministers would tackle questions regarding Palestinian rights, and
that new partnerships with community-based organizations would begin
to realize improvements in the camps. He highlighted
UNRWA/Lebanon's achievements in starting the reconstruction of Nahr
al Bared camp despite legal and other obstacles, and in ending (with
only a few exceptions) double-shift schooling. Lombardo also noted
a new partnership with the Palestinian Red Crescent Society in
providing hospitalization services to the refugees.

-- Syria: UNRWA's new Field Director Roger Hearn said that in 2010,
UNRWA/Syria would focus on camp improvement initiatives, the
continued rehabilitation of Neirab camp in northern Syria, and
engaging refugee youth. Hearn worried, however, that UNRWA's budget
crisis may result in further operational cutbacks beyond suspension
of all travel, training, and hiring recently implemented in the
Syria field. In 2010, he said, UNRWA/Syria will have to cut back on
pharmaceutical purchases, discontinue breast cancer screening,
provision of prosthetics, physical therapy for disabled, and
maintenance of vehicles. Even with these cutbacks, Hearn predicted
that UNRWA/Syria will still fall $1.5 million short of its allocated

-- Jordan: UNRWA Field Director Richard Cook said that the global
economic crisis has impacted UNRWA's daily operations. At the same
time, he said, more refugees are seeking UNRWA assistance due to
economic hardship. Cook noted that UNRWA's 2009 field budget was
USD 122 million, against which only USD 104 million was received.
As a result, UNRWA/Jordan has frozen capital equipment expenditures
(such as school desks, medical equipment, and computers) and
facilities maintenance and repair. Cook said that 80 percent of the
field budget is allocated for staffing and cited difficulties in
retaining qualified medical staff, resulting in additional pressures
on existing staff. UNRWA/Jordan's education program represents 73
percent of the budget, but 92 percent of schools in Jordan operate
on double shifts. Cook has so far during 2009 cut back UNRWA
vocational training courses, hospitalization benefits, purchase of
medicines, and support to high risk maternal deliveries. He expects
in 2010 to further cut back spending on school textbooks and cash
assistance to the poorest refugees.

UNRWA Financial Overview for 2009;
Outlook for 2010

5. (SBU) In his presentation to the AdCom, UNRWA Deputy Commissioner
General Filippo Grandi stated that UNRWA is facing a 2009 budget
deficit of USD 90 million, down from the USD 107 million presented
in June 2009. Of that USD 90 million, USD 7.3 million represents
essential running costs. To compensate for this deficit, UNRWA has
reduced hospitalization reimbursement, provision of medication,
staff training, staff hiring, and maintenance of facilities. UNRWA
has also instituted a freeze in pay raises, leading the UNRWA staff
unions to declare a strike for all UNRWA area staff for the same day
as the AdCom. Grandi noted that the 2009 Emergency Appeals for West
Bank and Gaza are 71 percent funded while the Lebanon Emergency
Appeal for the Reconstruction of Nahr El Bared is 28 percent funded.

6. (SBU) Grandi predicted that UNRWA's 2010 program budget of USD
571 million would fall short by USD 140 million. Of the USD 140
million projected deficit, USD 54.4 million represents essential
running costs, including staff salaries and building operations. As
a result, UNRWA will be forced to continue its salary freeze and may
have to implement further cuts to hospitalization benefits, cancer
screening, physical rehabilitation for disabled, oral health
clinics, medications, and provision of textbooks. Meanwhile, other
elements traditionally part of the regular budget will be
"projectized," i.e. individual donors will be asked to support these
costs directly on a bilateral basis. Examples include school
building construction and maintenance projects, and the purchase of
medicines for non-communicable diseases. Grandi made clear that
while it has and will continue to find efficiencies through its
management reform process, these cost savings will not compensate
for the increased demand for UNRWA services and its chronic funding

Host Governments Highlight Political

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Context of Refugee Issue

7. (SBU) Jordanian Foreign Minister Judeh highlighted his
government's efforts to achieve regional peace with "a Palestinian
state on the 1967 borders with Jerusalem as its capital" and an
Israeli withdrawal from "all Arab land, including that belonging to
Syria." He called on Israel to halt settlement construction and on
the international community to "prevent and condemn unilateral
Israeli actions in East Jerusalem, which is Palestinian and part of
the West Bank." He stated that refugee issues should not be
discussed separately from the broader peace issues and that the
refugees are "at the heart of a comprehensive peace."
Representatives of the Governments of Syria, Lebanon and Jordan made
statements rejecting the proposal that UNRWA scale back benefits to
Palestinian refugees, and called upon donors to cover the
anticipated deficit.

Donor Governments Agree More is Needed

8. (SBU) PRM Assistant Secretary Schwartz stressed the USG's
commitment to support Palestinian refugees, noting that U.S.
contributions to UNRWA reached USD 268 million in 2009. He
expressed deep concern about the humanitarian conditions facing
refugees as well as the agency's financial outlook for 2010.
Several donor government representatives agreed that UNRWA's chronic
budget shortfalls are unsustainable, but none offered a clear path
forward. Norway specifically pointed to the Arab League's
unfulfilled commitment to provide 7.8 percent of UNRWA's regular
budget. Meanwhile, UNRWA External Relations Director Fabian
McKinnon said that through the Resource Mobilization Strategy, UNRWA
would intensify its efforts to strengthen fundraising programs and
find new fundraising markets, including private corporations and
foundations. He invited AdCom members to consider the concept of a
"compact" with UNRWA, entering into new partnerships to place UNRWA
on sound financial footing.

9. (U) PRM/ANE has cleared this message.

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