US embassy cable - 03ROME3981

UNCLAS  ROME 003981 
 
SIPDIS 
 
 
AIDAC 
 
FROM U.S. MISSION IN ROME 
 
STATE FOR PRM/P, EUR/WE, EUR/NE AND IO/EDA 
USAID FOR A/AID, AA/DCHA WINTER, DCHA/FFP/D LANDIS, 
DCHA/OFDA/D MCCONNELL AND AMENGHETTI 
USDA/FAS FOR CHAMBLISS/TILSWORTH/GAINOR 
GENEVA FOR RMA AND NKYLOH/USAID 
BRUSSELS FOR USAID PLERNER AND PRM REP 
USUN FOR MLUTZ 
 
E.O.  12958:  N/A 
TAGS: EAID, EAGR, PREF, WFP, UN 
SUBJECT:  USG-WFP BILATERAL CONSULTATIONS IN WASHINGTON, DC, 
APRIL 23-25, 2003 
 
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Summary 
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1. Representatives of the United States Government (USG) and 
the United Nation's World Food Program (WFP) met in 
Washington for bilateral consultations April 23-25, 2003. 
Important issues discussed included the Iraq and southern 
Africa emergency responses; the level of cash balances 
presently maintained by WFP; emerging food aid donors; and 
WFP reporting to donors. End summary. 
 
----------------------- 
Background/participants 
----------------------- 
 
2. Welcome remarks were delivered (April 23) by U.S. Agency 
for International Development's (USAID) Deputy Assistant 
Administrator (DAA) for Democracy, Conflict and Humanitarian 
Assistance (DCHA), Bill Garvelink, and the Director of the 
Office of Food for Peace (DCHA/FFP), Lauren Landis. 
 
3. Other USG representatives included: USAID's Jeanne 
Markunas, Jeffrey Drummond, Tim Lavelle (USMission/Rome), 
John Brooks (USMission/Rome), Jim Thompson, Angelique 
Crumbly, Carolyn Mutumba, Anne Ralte, Anita Menghetti, Don 
Gressett (GC), Dennis Weller, Melissa Ward, Susan Ouelette, 
Laurence Williams and Lauren Barbour. U.S. Department of 
Agriculture's (USDA) Mary Chambliss, Robin Tilsworth Rude, 
Babette Gainor and Vickie Hunter, also participated. State 
Department was represented by Sharon Kotok (IO/EDA), Jane 
Zimmerman and Mary Margaret Knutson (PRM). 
 
4. WFP representation included Deputy Executive Director 
Sheila Sisulu, John Powell, Judith Lewis, Eric Whiting, Joe 
Scalise, Mike Usnick, Khaled Adly, Rebecca Doyle, Wendy 
Bingham, and Robin Jackson. 
 
--------------------------------------------- ------------ 
Review of WFP's Iraq and southern Africa emergency (EMOP) 
operations 
--------------------------------------------- ------------ 
 
5. The Iraq EMOP is an unprecedented endeavor, the largest 
single emergency food aid program ever undertaken by WFP. 
Many challenges still lie ahead, including: 
 
-Re-commencement and continuing operation of the Iraqi 
Public Distribution (PDS) System through the Iraqi Ministry 
of Trade (MOT); 
-Streamlining of regional logistics to move a minimum of 
500,000 metric tons of foodstuffs into Iraq for monthly in- 
country distribution through MOT; 
-Eventual transitioning from the PDS system to a free market 
system where food imports will be handled by the Iraqi 
private sector; and 
-Gearing up for purchase of the local wheat harvest and 
assessment of all food stocks presently in country. 
 
6. There was general USG appreciation as to what WFP had 
been able to accomplish to date. WFP proceeded to update on 
the actualization/renegotiation of some 191 contracts 
covering 1.4 million tons of cereals (valued at USD 691 
million (excluding associated costs) contracted for by the 
previous government under the Oil-for-Food (OIP) Program 
(reference UN Security Council Resolutions 1472/1476). Note: 
The UN Security Council (SCR 1483) subsequently extended the 
timeline on renegotiation of the OIP contracts to November 
21, 2003. End note. 
 
7. On WFP's response to the 2002 southern Africa 
humanitarian crisis (with a combined donor response through 
WFP July 2002-March 2003 equaling 892,000 mts), the 
following lessons learned were highlighted: 
 
-Overall, the reports on diversions or under coverage 
problems were minimal and when reports of starvation did 
come in, the response was immediate (next day); 
 
 
-WFP established partnerships with 54 NGOs operating in 
southern Africa as part of its implementation strategy.  The 
WFP-USAID-NGO consortium in Malawi worked extremely well; 
 
-HIV/AIDS is the next big issue to tackle in southern Africa 
and WFP would like to intensify its dialogue with FFP to 
further probe the linkages between nutrition and HIV.  WFP 
is also in discussions with Family Health International 
(FHI) to direct more resources to HIV-affected people in 
southern Africa; 
 
-WFP was strongly encouraged to strengthen its linkages on 
early warning and household food insecurity with the 
Southern Africa Development Community (SADC); 
 
-When Ambassador Hall visited southern Africa (October 
2002), he noticed that there are no national nutritional 
surveillance systems in place. This needs to be a high UN 
priority. 
 
------------------------ 
WFP Strategic Priorities 
------------------------ 
 
8. John Powell discussed WFP's draft Strategic Programming 
Strategy which will be formally presented to the October 
2003 Executive Board. Draft WFP Strategic priorities were 
listed as follows: 
 
-Saving lives in crises through better targeted 
interventions. This means more comprehensive early warning 
vulnerability assessments, including household food 
insecurity analysis; 
-Protecting livelihoods and increasing resilience through 
pre-designed programs and planning for post-shock 
rehabilitation in disaster situations; 
-Helping the most vulnerable to manage risk better; 
-Focusing on improving the nutritional status of children 
and vulnerable groups in critical times; and 
-Supporting access to primary education and gender equity. 
 
9. Finally, John Powell commented on WFP's need to rethink 
its concept of "partnership" particularly with the non- 
governmental organizations (NGOs) and improve its overall 
knowledge base. Powell concluded by stating that this new 
approach involved no fundamental change in WFP's mandate, 
but rather a sharpening of focus. 
 
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"Emerging donors" 
----------------- 
 
10. In 2001 WFP had its largest year ever in terms of 
fundraising (USD 1.8 billion), yet this year's needs dwarfs 
that number (needs have effectively doubled).  How to cover 
this?  Either every one of the traditional donors gives 
double, or WFP find new donors. The private sector provides 
possibilities, and WFP is proceeding to explore this avenue. 
But WFP believes that the best potential source at present 
is "emerging donors," i.e. countries that have food, but no 
cash to meet the associated costs. At present, the top 20 
donors provide 99 percent of WFP's funds, and the US gives 
60 percent of that total.  If WFP had had the cash to move 
and distribute India's offer (October 2001) of one million 
tons of wheat for Afghanistan, India would have become WFP's 
second largest donor in one hit.  How can WFP put these 
types of deals (cash/food) together?  The private sector can 
provide cash, including international companies.  Other 
possibilities include: a proposal that the G8 endorses a 
"twinning fund" of USD 500 million - that would leverage USD 
1 billion of food.  Also, if other countries, who normally 
give cash, were to allow more flexibility to WFP, then WFP 
could do more; however both present bilateral and Executive 
Board conventions and regulations prevent it. Note: WFP 
plans to engage with its membership in sorting out the 
modalities of a "twinning fund." End note. 
 
11. With the private sector, TPG (the Dutch FEDEX- 
equivalent with an annual income of USD 12 billion) is 
 
 
working  (pro bono) to improve WFP logistics capacity in 
Sierra Leone and elsewhere, while encouraging TPG's 140,000 
employees to sponsor children in WFP school feeding programs 
and to actually visit the benefited schools in developing 
countries.  The Italian clothing firm United Colors of 
Benetton, funded an advertising campaign (featuring WFP) 
worth over USD 15 million. These ads introduced hunger and 
food aid issues to an entire class of folk (age group/social 
status) who were beyond the horizon of WFP's traditional 
audience. The German computer software giant SAP, is 
developing further advertising for WFP under the cachet "WFP 
Runs SAP." 
 
--------------------------------------------- ---------- 
Issue:  Level of actual cash balances maintained by WFP 
--------------------------------------------- ---------- 
 
12. WFP's cash balance is USD 968 million (as of the end of 
December 2002), of which USD 328 million is readily 
available for programming. The remaining USD 640 million 
constitutes Executive Board authorized reserves (Immediate 
Response Account, Operational Reserve, staff benefits, long- 
term loan with one member state, etc.) - or obligated 
commitments.  The question was asked at the February 2003 
Executive Board, "What's the appropriate level for a WFP 
working capital reserve?" WFP is working to provide that 
answer. It is clear that WFP needs to speed up its cash 
disbursement, i.e., faster implementation and less 
"conservative budgeting." WFP is intensively reviewing its 
budgeting process. "WFP is allowed by its rules to spend a 
confirmed donation without cash in hand.that's what we're 
going to do. We expect cash levels to decrease throughout 
this year. But one must understand that the size of the 
organization requires that we have sizable cash reserves to 
maintain a sound financial state." (Eric Whiting, WFP 
finance officer). 
 
13. USG representatives showed concern for the large cash 
balance, echoing comments made by USDELS at previous WFP 
Executive Board sessions. USG noted that such large fund 
balances had a political dimension that could be problematic 
for the USG as the major donor to WFP.  USG officials 
strongly encouraged WFP to reduce the overall level of its 
cash balance, and promptly return or renegotiate unutilized 
cash resources with/to the appropriate donors. 
 
-------------------- 
WFP Reporting Issues 
-------------------- 
 
14. DCHA/FFP commented that it has had difficulty in getting 
a response from WFP when requesting reports on some programs 
(i.e., information on beneficiaries, pipelines, etc). 
 
15. It was recommended that DCHA/FFP Country Backstop 
Officers be able to consult with WFP about what is needed in 
the pipeline and when.  It was noted that the WFP Southern 
Africa team in particular had been very responsive and 
cooperative, but that this was not always the case with 
other WFP offices.  There is a felt need for more open 
communication in order to know where things stand in order 
to get call forwards approved on time.  WFP field offices 
have intimate knowledge of the pipeline.  DCHA/FFP noted 
that in the WFP regional offices, there seems to be some 
confusion as to what information should be shared with FFP, 
and hence the need to standardize these communications in 
order to get food to where it is needed as soon as possible. 
If necessary, WFP should share a written communication 
policy with their field offices.  The shipment and 
procurement process takes several months and communication 
delays only result in further delays in the pipeline. 
 
16. Moreover, both WFP and FFP are partners with many of the 
same NGOs. It is important that all implementing partners 
agree on 2 or 3 standard indicators to achieve greater 
results and come to agreement on a standardized system of 
results reporting. 
 
17. USAID's Bureau for Policy and Program Coordination (PPC) 
AIDAC 
 
FROM U.S. MISSION IN ROME 
 
STATE FOR PRM/P, EUR/WE, EUR/NE AND IO/EDA 
USAID FOR A/AID, AA/DCHA WINTER, DCHA/FFP/D LANDIS, 
DCHA/OFDA/D MCCONNELL AND AMENGHETTI 
USDA/FAS FOR CHAMBLISS/TILSWORTH/GAINOR 
GENEVA FOR RMA AND NKYLOH/ 
 
 
reported on a workshop with UNICEF and various other 
partners, which agreed upon benchmarks for crude mortality 
rates and nutritional standards. The completion of a 
software package to standardize surveys and other ways of 
collecting data to make operational these implementing 
partner goals is pending. A database is also being created 
to help measure these benchmarks, particularly for tracking 
crude mortality rates.  This database will enable 
implementing partners to identify trends.  The database is a 
joint venture with the Center for Research on the 
Epidemiology of Disasters (CRED) and it will reflect data on 
internally displaced persons (IDPs), refugees, etc. 
 
18. WFP agreed that it is in everyone's best interests to 
work together to standardize indicators and reporting 
mechanisms, in order to be able to accurately measure 
results.  The expanded WFP office in Washington will be able 
to more actively take part in these performance-based 
exercises. 
 
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WFP and NGOs 
------------ 
 
19. The USG has received various complaints from NGOs (who 
have partnered with WFP) about receiving insufficient funds 
for end-distribution of food resources. There have been 
cases of 30-50 percent funding shortfalls, which at times 
have had to be covered by P.L. 480 section 202(e) funding 
grants by DCHA/FFP to the respective NGOs. Specifically, WFP 
seems to encounter cash-flow problems when dealing with 
NGOs. It is of extreme importance that payments be made on a 
timely basis or in advance. Smaller NGOs have great 
difficulty in making interim arrangements to compensate for 
WFP funding lapses. 
 
20. WFP acknowledges that some country directors view NGOs 
as subcontractors and agrees that this view needs to be 
changed.  An issue of contention for WFP is NGO pressure to 
make a firm commitment on tonnages, which isn't always 
possible for WFP until they receive all of the resources 
that they need to fully fund a program. Moreover, NGOs often 
do not get paperwork and contracts submitted to WFP on time. 
WFP needs to identify model partnerships with NGOs that do 
work and try to implement similar programs worldwide.  WFP 
may also need to consult with NGOs and perhaps even hand-out 
surveys to get their feedback and suggestions on this issue. 
 
21. Note: Five USAID missions complained to DCHA/FFP about 
this issue. It was pointed out that the U.S. Government 
might also be part of the problem since DCHA/OFDA and P.L. 
480 Title II 202(e) funds have in the past been tapped to 
bridge the "gap."  This may have inadvertently undermined 
NGO "leverage" in negotiating with WFP directly on this 
issue. End note. 
 
22. There is a perception that WFP's definition of 
"partnership" with NGOs may be too narrow i.e., focuses 
principally on funding. Lauren Landis commented that WFP 
needs to reexamine its partnerships with NGOs on the 
operational side, in addition to the policy side. She 
recommended that WFP and DCHA/FFP take the initiative to 
form a technical working group with an array of partners 
that includes people who have a solid understanding of the 
cost structure/finances to address this issue on a global 
level. Tim Lavelle agreed that this has been a very 
contentious issue that continually resurfaces and it must be 
addressed.  DCHA/FFP observed that there doesn't seem to be 
a centralization of authority with WFP for handling these 
matters, as most often NGO issues are typically left for the 
WFP Program Country Directors to address.  It is in WFP's 
interest to enhance these partnerships, as they are a key to 
achieving better results and more accurate reporting. 
 
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Other issues 
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23. HIV/AIDS: WFP is putting together guidelines forUR/NE AND IO/EDA 
USAID FOR A/AID, AA/DCHA WINTER, DCHA/FFP/D LANDIS, 
DCHA/OFDA/D MCCONNELL AND AMENGHETTI 
USDA/FAS FOR CHAMBLISS/TILSWORTH/GAINOR 
GENEVA FOR RMA AND NKYLOH/USAID 
BRUSSELS FOR USAID PLERNER AND PRM REP 
USUN FOR MLUTZ 
 
HIV/AIDS, food aid and emergencies. Southern Africa reminded 
us that HIV/AIDS is present in natural disasters (drought, 
etc.) as well as conflict. Note: Of all AIDS deaths in the 
world in 2001, one in six occurred in southern Africa. End 
note. 
 
24. Staffing levels: The USG expects that the number of U.S. 
staff at UN agencies should be comparable to the level of 
contribution.  While the U.S. contributes a large portion of 
the WFP budget, Americans comprise a small percentage of the 
staff (10.3 percent as of April 2003).  WFP pointed out that 
the U.S. has about 25 percent of the senior management 
positions in the organization and asked that the USG provide 
greater numbers of junior professional officers (JPOs), as 
this was a proven method of enhancing individual country 
staff levels in UN agencies at its junior levels. 
 
25. McGovern-Dole/Food for Education: WFP provided an update 
on its participation in the USDA-managed International Food 
for Education and Child Nutrition Program. USD 100 million 
in proposals have been submitted for 2003 funding (ten 
countries). 
 
26. Biotechnology: USAID encouraged WFP to continue its 
current policy of complying with the laws of individual 
countries, but not to go beyond that. 
 
27. September 2003 WTO discussions in Cancun: WFP reported 
hearing the increasing "drumbeat" that all food aid must be 
in cash.  WFP's response: "It's where it goes to, not where 
it comes from.that's our message to WTO." Hall 
 
 
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	2003ROME03981 - Classification: UNCLASSIFIED