UNRWA holds pledging conference, with speakers warning financial situation precarious

07 December 2010

7 December 2010

Stressing the international community’s responsibility to address the needs of Palestinian refugees and expressing alarm over the chronic funding shortfall of the United Nations Relief and Works Agency for Palestine Refugees in the Near East (UNRWA) set up to support them, 20 donors this morning pledged approximately US$ 214 million to UNRWA for 2011, and several more indicated their contributions would be forthcoming.

Donors made their pledges during a meeting of the Ad Hoc Committee created by the General Assembly as the main Assembly forum for donors to announce their financial support for the 61-year-old Agency, which provides educational, health, relief and social services for almost 5 million Palestinian refugees in Jordan, Lebanon, Syria, the West Bank and Gaza.

Margot Ellis, Deputy Commissioner-General of UNRWA, said that despite limited improvements in the political context and operational access, this year had been extremely challenging financially and operationally, hampering the Agency’s ability to fully provide the quality services needed. The funding shortage almost forced the Agency to cut services for three months. “In 2010, we faced one of our most challenging financial situations in recent times, with a peak deficit of more than $100 million,” Ms Ellis said.

Thanks to Member States’ response, that crisis was averted, she said. At the end of November, UNRWA’s deficit stood at US$ 9.5 million. But, its financial situation remained precarious. In 2011, the Agency would require US$ 621.2 million to meet refugees’ needs, but due to an anticipated funding shortage, it downsized that budget to US$ 565.5 million to cover the minimum level of services. Still, it expected projected income to fall below that downsized amount and to start 2011 with an operational deficit of US$ 60.5 million.

“Already, we have had to make hard choices,” Ms Ellis said, lamenting the decision to delay improved access to hospitals in Gaza and Lebanon, vocational training reform in the West Bank, and much-needed infrastructure improvements to the Agency’s ailing school buildings and health clinics. If it could not address its projected 2011 deficit, the Agency would have to cut further, crippling its core programme services. Moreover, the global financial crisis hindered donors’ present capacity to support UNRWA, and exchange rate fluctuations negatively affected the value of their contributions. The Agency’s working capital, which reached a high of US$ 60 million in 2006, now was depleted.

She said that last week, during a meeting of its Advisory Commission, UNRWA had presented its “Sustaining Change” package for reforming its education, health, relief and social services programmes, as well as resource mobilisation capacity to attract new donors. Last year, the Agency was encouraged by India’s and Brazil’s interest in becoming donors, and it would continue efforts to bolster funding from Arab States and emerging economies. Moreover, UNRWA had entered into new partnerships with private companies such as Zain Telecommunications, Novo Nordisk, Saatchi & Saatchi, and PriceWaterhouseCoopers, and it aimed to set up a partnerships unit.

Early next year, the Secretary-General’s report on the Strengthening of the Management Capacity of UNRWA would be released, she said. The report would propose ways in which the Assembly’s Fifth Committee (Administrative and Budgetary) could reconsider the nature and level of UNRWA funding.

Ms Ellis also shed light on the difficult scenario in which the Agency operated and Palestinians lived. In the West Bank, construction of Israeli settlements, the separation barrier, and tight access and movement restrictions had denied many Palestinians and Palestine refugees the material benefits of an economic revival. In East Jerusalem, the anticipated introduction of new major restrictions on the main crossing points into the West Bank could drastically increase the United Nations operating costs.

Most of Gaza’s 1.5 million Palestinians, 1.1 million of whom UNRWA served, remained destitute, she said. UNRWA recently received approval for implementation of 25 projects, but they only represented 7 per cent of the Agency’s Gaza rehabilitation and reconstruction plan. In Lebanon, the Nahr el-Bared camp, once fully reconstructed, would allow 27,000 refugees displaced in 2007 to return home. But donor support was urgently needed, since just one third of the requisite funding for construction had been pledged to date. In Jordan and Syria, scant resources seriously hampered UNRWA’s programmes.

General Assembly President Joseph Deiss said the number of people registered with UNRWA had increased more than six-fold since 1950. It was tragic that six decades after the international community sought a just, durable solution to their situation, three generations of Palestinians had become refugees and in need of international aid. Until such a solution was found, the international community must show solidarity with refugees and alleviate their plight.

UNRWA’s funds had not kept pace with the growing numbers of refugees and their increasingly complex needs, a more challenging operational environment, and more rigorous reporting requirements from donors and the Assembly, he said. The Agency’s financial difficulties were now structural, threatening quality refugee services, sound planning and critical reforms. “Your pledges, as well as your statements today, will constitute valuable moral and financial support for UNRWA and the refugees it serves,” Mr Deiss said. “By mobilising this international assistance, we are also affirming our commitment to the Middle East peace process.”

He urged donors to — upon release of the Secretary-General’s report on strengthening UNRWA’s management capacity — consider the best ways to address the structural nature of the Agency’s financial deficits and scrutinize the adequacy of the level and scope of the Assembly’s current funding for UNRWA through its regular budget.

Pledges

  • Italy €2 million
  • India    $1 million     
  • Luxembourg     €2.75 million
  • Belgium     €1 million
  • Egypt    $50,000     
  • Kuwait     $1.5 million     
  • Montenegro     €10,000
  • South Africa     1 million R
  • Czech Republic     $165,000     
  • Thailand    $30,000     
  • Denmark    $12.5 million     
  • Turkey    $1 million     
  • Finland     €3 million
  • Sweden    $41 million     
  • United Arab Emirates    $1 million     
  • Ireland     €4 million
  • Switzerland 10 million SwF
  • Pakistan    $10,000     

The Permanent Observer of the Holy See pledged US$ 20,000.

Future pledges were promised by China, Australia, Norway, United States, Netherlands and Japan.

After the pledges were made, Feda Abdelhady-Nasser, of the Permanent Observer of Palestine, saluted the commitment of UNRWA staff, particularly in the light of continuing difficult circumstances on the ground and the critical funding shortage. UNRWA’s assistance had helped sustain the refugees, especially in times of crisis and turmoil, and alleviate their continued displacement and pervasive poverty, as well as help to preserve their rights and protect them.

It had also given them hope and dignity, such as during the 2010 Summer Games in Gaza, as they continued to appeal for and await justice, she said. UNRWA’s contribution to regional stability was significant; its role was vital and a legal and moral responsibility of the international community until the question of Palestine was fully resolved.

She also thanked donors for their unwavering contributions to UNRWA and Member States for their support for a just, lasting peace based on a two-State solution. She urged UNRWA to continue resource mobilisation efforts, especially partnerships with foundations and the private sector, which could greatly enhance the Agency’s advocacy and outreach efforts.

UNRWA must also receive greater support from the United Nations regular budget, commensurate with its enormous responsibilities and indispensable role in the Middle East, she said. She looked forward to the Secretary-General’s report on strengthening UNRWA’s management capacity and expressed hope that it would spur Member States’ support for greater United Nations funding of the Agency in the coming months.

She pointed to the international consensus, as reflected in successive Assembly resolutions, on the need to continue UNRWA’s mandate until a just solution was found in line with international law and United Nations resolutions.

She urged Member States to reaffirm their support for UNRWA and the rights of Palestine refugees by supporting the draft resolutions to be presented during the Assembly’s meeting on Friday 10 December, as part of the reports of its Fourth Committee (Special Political and Decolonization).

In closing remarks, Ms Ellis thanked Member States for their impressive show of solidarity and asked them to consider contributing early, since the Agency’s first quarter cash flow was critical to ensure unimpeded services to the refugees. She particularly thanked new donors in light of the current financial crisis, and thanked Member States for supporting the Secretary-General’s report on strengthening UNRWA’s management capacity and their efforts to work to put the Agency’s structural financing on more secure footing in the future.

She stressed the importance of a strong UNRWA for peace and security in the Middle East and paid tribute to Andrew Whitley, the outgoing Director of UNRWA’s Liaison Office in New York, for his service.

Background Information

UNRWA is a United Nations agency established by the General Assembly in 1949 and is mandated to provide assistance and protection to a population of some 5 million registered Palestine refugees. Its mission is to help Palestine refugees in Jordan, Lebanon, Syria, West Bank and the Gaza Strip to achieve their full potential in human development, pending a just solution to their plight. UNRWA’s services encompass education, health care, relief and social services, camp infrastructure and improvement, and microfinance.

Financial support to UNRWA has not kept pace with an increased demand for services caused by growing numbers of registered refugees, expanding need, and deepening poverty. As a result, the Agency's General Fund (GF), supporting UNRWA’s core activities and 97 per cent reliant on voluntary contributions, has begun each year with a large projected deficit. Currently the deficit stands at US$ 56 million.

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