VZCZCXRO8316
PP RUEHROV
DE RUEHJM #2129/01 3290959
ZNR UUUUU ZZH
P 250959Z NOV 09
FM AMCONSUL JERUSALEM
TO RUEHC/SECSTATE WASHDC PRIORITY 6773
INFO RUEHXK/ARAB ISRAELI COLLECTIVE
RUCNDT/USMISSION USUN NEW YORK 3301
RUEHGV/USMISSION GENEVA 0199
RHEHNSC/NSC WASHDC

UNCLAS SECTION 01 OF 03 JERUSALEM 002129 
 
SENSITIVE 
SIPDIS 
 
DEPT FOR PRM/FO, PRM/ANE, NEA/IPA, NEA/ELA 
 
E.O. 12958: N/A 
TAGS: PREF PREL PGOV EAID KPAL KWBG JO SY LE
 
SUBJECT: UNRWA'S November 2009 Advisory Commission Meeting 
 
Summary 
------- 
 
¶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 
 
JERUSALEM 00002129  002 OF 003 
 
 
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 
budget. 
 
-- 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 
shortfall. 
 
Host Governments Highlight Political 
 
JERUSALEM 00002129  003 OF 003 
 
 
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.