US embassy cable - 05AMMAN4593

C O N F I D E N T I A L SECTION 01 OF 04 AMMAN 004593 
 
SIPDIS 
 
DEPT FOR PRM, NEA AND IO 
 
E.O. 12958: DECL: 06/06/2015 
TAGS: PREF, PREL, PGOV, EAID, KPAL, IS, JO, UNRWA 
SUBJECT: UNRWA REFORM: STAKEHOLDER MEETING ADVANCES DONOR 
AGENDA 
 
 
Classified By: Acting DCM Christopher Henzel for Reasons 1.4 (B) and (D 
) 
 
1. (C) SUMMARY: Leadership change at the UN Relief and Works 
Agency for Palestine Refugees in the Near East (UNRWA), 
combined with coordinated donor pressure, turned that 
agency's latest (May 17-20) round of stakeholder 
consultations in Amman into a rare debate on the role UNRWA 
should play in developing the Palestinian state after Gaza 
withdrawal.  UNRWA responded positively to donors' calls to 
start harmonizing its first five-year development plan for 
Palestinian refugees in the region (its primary tool to 
respond to Gaza disengagement) with the PA and 
refugee-hosting nations, but most donors indicated that they 
would be unable to ramp-up financial support in 2005, raising 
questions about the viability of programs UNRWA hopes to 
launch in Gaza this fall to alleviate camp overcrowding and 
increase micro-credit and vocational training programs.  The 
Amman meetings also kick-started a long-awaited UK-funded 
external review of UNRWA management, and built support for a 
governance reform plan that is centered on reviving UNRWA's 
semi-dormant Advisory Commission (AdCom) by December.  Sweden 
announced its intention to table the UNGA resolution called 
for in that plan, which would establish new financial 
criteria for membership.  However, Sweden is coming under 
pressure from Spain to break the consensus built in Amman. 
PRM PDAS Greene also signed the first USG-UNRWA Framework 
Agreement outlining USG policy concerns on the margins of 
this conference.  END SUMMARY. 
 
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GAZA WITHDRAWAL FOCUSES DEBATE ON UNRWA'S DEVELOPMENT ROLE 
--------------------------------------------- ------------- 
 
2. (U) Senior UNRWA officials met with the agency's top 23 
donors, the PLO Department of Refugee Affairs (PLO/DORA) and 
refugee-hosting nations, including Jordan, Syria, Lebanon, 
and Egypt, in Amman May 17-20.  To address major donors' 
long-standing concerns about UNRWA's readiness to respond to 
Israel's plan to withdraw from Gaza and parts of the West 
Bank, Acting Commissioner General Karen Abu Zayd used the 
two-day meeting to showcase how UNRWA hopes to modify its 
emergency programs and to start implementing the agency's 
first five-year development plan (i.e., the UNRWA Medium Term 
Plan) in Gaza this fall.  Using an UNSECOORD briefing on the 
difficulty the UN is facing refining its planning assumptions 
as an opening, UNRWA made a late-breaking appeal for 
donations to maintain its emergency programs through 
September.  (NOTE: UNSECOORD predicted that the IDF will not 
be in a position to uphold its current plan to facilitate 
humanitarian agency movement within the Gaza Strip in the 
evenings and at weekends (the UN's best case access scenario) 
and focused on the UN's "worst case" access scenario -- a 
settler withdrawal "under fire" that would result in extended 
periods where humanitarian agencies would be unable to move 
personnel and supplies.  END NOTE.) 
 
USG BRIDGES GAP IN GAZA EMERGENCY PROGRAM FUNDING 
--------------------------------------------- ---- 
 
3. (SBU) Gaza Field Director Lionel Brisson explained that 
the agency needs to bridge a USD 10 million shortfall to 
maintain its top two interventions in the Gaza Strip (i.e., 
expanding emergency job creation programs by targeting 
unemployed youth, as well as unemployed heads of households, 
and continuing its current emergency food distributions, 
which supports over half of Gaza's population).  In response, 
USDDEL head PRM PDAS Rich Greene confirmed the USG's recent 
decision to provide a USD 20 million contribution to UNRWA,s 
current emergency appeal.  He also urged Brisson to take 
immediate steps to pre-position emergency food stocks in 
central Gaza, the area most vulnerable to closure, as well as 
in UNRWA's warehouses in the north and south.  No other 
donors used the semi-annual meeting to announce new 
contributions to the UNRWA Emergency Appeal, on which the 
majority of the 1.6 million refugees in the West Bank and 
Gaza are currently dependent.  As of May 19, UNRWA had 
received pledges of USD 84.5 million of the USD 185 million 
it has requested.  However, USD 30 million of that is 
earmarked for emergency housing in Rafah. 
 
UNRWA'S WEST BANK FIELD MAY RELOCATE OFFICES 
-------------------------------------------- 
 
4. (U) UNRWA,s West Bank Field Director, Anders Fange, 
cautioned that the humanitarian needs of refugees are likely 
to increase in the West Bank over the next year due to 
continuing construction of the security barrier.  Sharing an 
internal impact study of the barrier construction's impact on 
the mobility of UNRWA's local West Bank staff and the 
accessibility of UNRWA facilities, Fange also informed donors 
and host authorities that he had felt compelled to start 
contingency planning to anticipate the likelihood that his 
field staff will have to start "cross-border"-like operations 
working out of its East Jerusalem Headquarters (which houses 
one of UNRWA's primary warehouse facilities) when the 
"Jerusalem envelope" is completed.  Fange said UNRWA is also 
concerned that it will be unable to consistently access 
refugee communities located in the seam zones between the 
Green Line and the barrier.  (NOTE: UN Office of the 
Coordinator for Humanitarian Affairs OpT Mission told 
PRM/PDAS Greene that OCHA shares UNRWA's assessment May 15. 
END NOTE.)  Fange said that UNRWA may re-locate some of its 
East Jerusalem field and warehouse operations in Ramallah 
later this year.  Although Fange's effort to prevent 
disruptions in UNRWA services was welcomed by donors, the PLO 
Department of Refugee Affairs urged UNRWA not to move ahead 
with the proposed relocation, noting its political 
implications. 
NEW APPROACH TO POVERTY ALLEVIATION AND CAMP DEVELOPMENT 
--------------------------------------------- ----------- 
 
5. (U) UNRWA also outlined its plans to implement new 
approaches to poverty alleviation and camp infrastructure 
development contained in the agency's 2005-2009 Medium Term 
Plan (MTP)- released in February.  It argues that launching 
these new activities would alleviate camp overcrowding and 
promote economic development in Gaza post-disengagement. 
(NOTE: Although UNRWA received a record USD 500 million from 
donors for its regular budget, special projects, and 
emergency appeal for the West Bank and Gaza in 2005, it is 
operating on a shoestring and has insufficient resources to 
maintain its facilities, build new infrastructure, and 
reverse a decade of staff attrition.  To reverse this 
situation, UNRWA released the MTP to fund the new schools, 
teachers, medical clinics, doctors, social workers, housing, 
and other expenses detailed in UNRWA,s with a preliminary 
USD 1.1 billion price tag.  UNRWA,s traditional major donors 
endorsed the objectives UNRWA is attempting to achieve 
through its MTP at the October 2004 UNRWA meeting in Amman, 
but urged UNRWA to refine its planning before revising its 
budget requirements.  END NOTE.) 
 
FINANCIAL IMPLICATIONS: 33 PERCENT BUDGET INCREASE 
--------------------------------------------- ----- 
 
6. (U) The financial implications of UNRWA's decision to 
start integrating MTP activities into its current budget and 
the 2006-2007 biennium budget the agency is in the process of 
finalizing, are significant.  UNRWA projected a 33 percent 
increase in its requirements over 2004-2005 (the agency set 
its 2006 budget at USD 489 million and 2007 budget at USD 506 
million at the Amman meetings).  However, it conceded in its 
briefing to donors that it has not yet incorporated the cost 
of implementing certain critical reforms, including UNRWA's 
decision to hire a poverty economist to modernize its relief 
programs by establishing needs' based eligibility criteria 
and harmonizing the assistance UNRWA provides unemployed 
refugees with that the PA and other refugee-hosting nations 
provide. 
 
LUKEWARM DONOR, HOST NATION RESPONSE 
------------------------------------ 
 
7. (SBU) In a coordinated response, the U.S., Canada, EU, 
Sweden, the Netherlands and Switzerland called on UNRWA to 
recognize that the MTP is a working document that requires 
further elaboration, prioritization, and harmonization with 
host nations/PA planning before it can be fully integrated 
into regular budgets.  Donors also urged UNRWA to develop 
new, joint planning with the PA under the leadership of 
Quartet Special Envoy Wolfensohn.  The U.S. and EU 
underscored the point by noting that they  would not be able 
to provide significant additional resources to UNRWA's 
2006-07 budget. (NOTE: The USG provided USD 127 million in 
2004, and the EU USD 130 million ) together accounting for 
over one-half of all contributions.  END NOTE.) PLO/DORA 
reinforced donor's appeal for joint planning by offering to 
facilitate PA-UNRWA coordination.  Abu Zayd assured donors 
that UNRWA would continue to work with the PA to harmonize 
UNRWA's MTP with the PA's own five-year Medium Term 
Development Plan.  She also informed donors that Wolfensohn 
had agreed to tour UNRWA's facilities in Gaza in June. 
 
8. (C) However, the head of UNRWA's new Camp Development 
Unit, Guy Siri, raised fundamental questions about UNRWA's 
mandate to launch its camp re-development initiative in Gaza 
when he noted that UNRWA hopes to promote "home ownership." 
While quickly clarifying that by "ownership" he meant that 
refugees would have a stake in the process of camp 
development rather than legal title to their dwelling, Siri's 
presentation prompted the Jordanian, Lebanese, and Syrian 
delegates to inform UNRWA that additional land would not be 
forthcoming.  (NOTE: 1.3 of the 4.1 million refugees 
registered with UNRWA live in 59 camps in the region. 
Although overcrowding exists in camps in all five UNRWA 
fields (Jordan, Syria, Lebanon, the West Bank, and Gaza) it 
is worst in Gaza where Burj El Barajneh camp has a density of 
200,000/sq km compared to the Gaza average of 85,000 people 
per square kilometer, already significantly higher than Hong 
Kong, for example, which averages 35,000/sq km.  END NOTE.) 
 
----------------- 
GOVERNANCE REFORM 
----------------- 
 
9. (C)  PDAS Greene used the Amman meetings to re-invigorate 
the UNRWA ComGen search with other major donors active on 
governance reform (Canada, Switzerland, the EU, Sweden, and 
the UK).  Reiterating that the USG is not seeking the ComGen 
position given long-standing practice to reserve UNRWA,s 
Deputy ComGen for an Amcit, he suggested that donors 
collectively underscore the importance of filling the ComGen 
slot with the SYG's office, underscoring the importance of 
identifying a Commissioner General ahead of Gaza withdrawal. 
Conceding that they had produced no viable European or 
Canadian candidates are six months of intensive searching, 
the UK and Switzerland argued that Amcit Acting ComGen Abu 
Zayd's interim leadership should be formally extended to 
ensure that she has the standing to push through internal 
governance reforms and UNRWA-PA coordination during the 
disengagement period in the event a replacement is not 
identified.  Sweden went further, suggesting that donors 
agree to recommend her as the next ComGen.  PDAS Greene 
responded that the USG is pleased with the job Abu Zayd has 
done as Acting ComGen, especially in providing greater 
transparency and in improving UNRWA's poor relations with 
Israel, but has not decided to endorse an American for the 
job.  Canadian Middle East Peace Process representative Jill 
Sinclair suggested that it was time to persuade the SYG to 
undertake innovative new methods, such as employing a 
headhunter or an advertising campaign to identify good 
candidates, or to consider consolidating UNRWA,s split 
Gaza/Amman Headquarters in Jordan. 
 
DFID LAUNCHES LONG-AWAITED MANAGEMENT REFORM STUDY 
--------------------------------------------- ----- 
 
10. (U) The UK also announced that two of its former 
diplomats, Robin Kealy and Geoffrey Haley, both of whom have 
worked extensively in the region, would conduct a 
long-awaited external review of UNRWA,s management on behalf 
of the UK,s Department for International Development (DFID). 
 DFID assured donors that its report would be issued by 
October.  At a pre-meeting coordination session, most major 
donors agreed that this review should form the basis of a 
comprehensive "management reform package," that donors would 
need to back financially over the next two years. 
 
PLAN TO REVITALIZE DORMANT ADCOM BY 2006 LAUNCHED 
--------------------------------------------- ---- 
 
11. (U) The May meeting also advanced a controversial 
proposal to overhaul UNRWA's governance structures by 2006 
that a regionally-based trilateral (i.e., UNRWA, donor, 
refugee hosting nation) negotiation team, the UNRWA Working 
Group on Stakeholder Relations (WGSR), had developed over the 
last six months. (NOTE: Former UNRWA ComGen Peter Hansen 
reluctantly agreed to establish the WGSR at its October 2004 
MDHM meeting to respond to demands for increased transparency 
that were raised at a high-level international conference 
(convened in Geneva to review UNRWA's operations) last June. 
END NOTE.)  Given that the majority of UNRWA donors, the PLO 
and refugee-hosting nations participated in the WGSR, the 
conference participants widely endorsed the two-track plan, 
which is centered on the following activities: 
 
-- Revitalize UNRWA,s UNGA-mandated Advisory Commission, 
which currently meets once a year to review the ComGen's 
annual report to the UNGA, by establishing financial criteria 
for membership and by drafting rules of procedure that will 
create regular budget and programmatic reviews by donors and 
refugee-hosting nations. 
 
-- Transform the semi-annual MDHM conferences into 
substantive annual workshops between UNRWA and other refugee 
services providers (i.e., UN, NGOs and host nations). 
 
To ensure the plan's launch, Sweden offered to table the 
draft UNGA resolution that would be required to expand AdCom 
membership at the conference.  While the Swedish delegation 
indicated that it would use the consensus elements negotiated 
within the WGSR, it is under pressure from Spain, which 
announced its desire to join the AdCom at the May meetings, 
to relax the financial criteria agreed in Amman and 
Jerusalem-based negotiations.  (NOTE: The WGSR focused on 
developing consensus on criteria to add new AdCom members. 
The majority of donors, the PLO and refugee-hosting nations 
agreed that new membership should be based on financial 
support to UNRWA's regular budget (i.e non-emergency program 
support) and proposed an average annual contribution of USD 
five-million over the 2000-20005 period as a formula.  This 
would qualify eight new members states: Sweden, Norway, 
Netherlands, Canada, Italy, Denmark, Germany and Switzerland 
plus the EU, as an observer.  Spain falls USD 4.7 million 
short.  Early opposition by Turkey, Japan and Jordan to any 
proposal to remove current AdCom members, suggests that it 
will be difficult to apply these criteria to current members. 
END NOTE.)  In addition, the PLO made a last-minute appeal to 
raise its AdCom status from observer to full member, citing 
its full-member status in ESCWA.  The PLO found no support 
among donors, given that the AdCom makes no practical 
distinction between observers and full members, but universal 
endorsement from refugee hosting nation delegations, hardened 
the PLO's resolve. 
 
12. (SBU) The conference asked the WGSR to continue to work 
with UNRWA through August to draft the AdCom's first rules of 
procedure, which would have to be adopted by the AdCom 
itself, and to identify the financial requirements needed to 
stand up an AdCom secretariat.  While most major donors agree 
that a secretariat would be essential to establish regular 
budget and program reviews, Japan indicated it would not 
offer funding.  Donors also called on UNRWA to abandon the 
current MDHM conference format by early 2006, and accept the 
WGSR's recommendation that it turn its informal, consultative 
meetings into thematic, information-sharing sessions among UN 
agencies and NGOs providing services to Palestinian refugees. 
 
U.S.-UNRWA SIGN FIRST FRAMEWORK AGREEMENT 
----------------------------------------- 
 
13. (C) PDAS Greene and the Acting UNRWA Comgen also signed 
the first annual USG-UNRWA Framework Agreement, which details 
USG policy concerns and outlines UNRWA actions to address 
them, on the margins of this conference. 
 
14. (SBU) COMMENT: Unlike previous UNRWA Major Donor and Host 
Nation (MDHM) conferences, the absence of former UNRWA 
Commissioner General Peter Hansen, who departed UNRWA in 
March after a nine year term, combined with UNRWA's decision 
to use Gaza disengagement to implement its first five-year 
Medium Term Plan, advanced a reform agenda that donors have 
been pressing for years.  The revitalized AdCom and Framework 
Agreement should be useful new tools to shape UNRWA,s 
priorities and address remaining USG concerns.  END COMMENT. 
 
HALE