Statement of UNRWA Commissioner-General Pierre Krähenbühl to the UNRWA Advisory Commission

30 May 2016
UNRWA Commissioner-General Pierre Krähenbühl (second from left) addresses UNRWA Advisory Commission meeting in Amman. © 2016 UNRWA Photo by Isabel de la Cruz

“The challenges we are addressing require extraordinary resolve because field realities are truly dramatic,” UNRWA Commissioner-General Pierre Krähenbühl tells the UNRWA Advisory Commission meeting held in Amman, 30 May 2016

Introduction

Mr. Chairman; Mr. Vice Chairman; Distinguished Delegates; Colleagues: 

I extend a warm welcome to all present, and am honored to participate with you in this meeting of the Advisory Commission. The generosity of Jordan in hosting the meetings of the Commission is greatly appreciated, and I would like to thank Mr. Aqrabawi for representing the Government in today’s meeting.

As this is the concluding session for the current Chair, Mr. Ali Mustafa of Syria, I would like to express my gratitude for his facilitation of the work of the Commission over the past year, and the strong commitment to UNRWA’s work that he has shown in his capacity as Chair. The active support of Ms. Véronique Hulmann of Switzerland as Vice-Chair is highly commended and I note Switzerland assumes the Chair on 1 July.

Ms. Ségolene Adam of Switzerland Chaired the Sub-Committee – we wish her well in her new assignment with UNICEF. The Vice Chair, Mr. Guy Lawson of the United States, is also departing; his active contribution to the Sub-Committee is greatly appreciated.  I also commend Mr. Yassin Abu Awad of Jordan for his productive and engaging work as Vice-Chair of the Sub-Committee.

Also participating in today’s session is Poland as special guest. I am grateful for the engagement and interest in UNRWA’s work, and look forward to further cooperation.

Allow me also to bring to your attention some senior personnel changes in UNRWA. Mr. Brian Gleeson is currently serving as the Director of Human Resources; he brings a strong and creative approach to my senior management team.  And I am pleased to inform you that Mr. Scott Anderson returns to UNRWA, transitioning into the post of Director of UNRWA Affairs in the West Bank, taking over from Mr. Lance Bartholomeusz who has been Acting Director since March 2016. We have just concluded the selection of the next Director of External Relations and Communication as well as the newly created position of Director of Security and Crisis-Management. We will share the details soon.

Ladies and gentlemen,
Since my arrival at UNRWA, I have attached great importance to the meetings of the Advisory Commission, as I do to the bilateral relations we enjoy with your respective countries and institutions. This time again, we will be discussing with you the situation of Palestine refugees, the challenges UNRWA faces, the strategies we are implementing, and the support our efforts require.

Field glimpses

We look forward, as usual, to updates from our field colleagues on the operational front detailing progress they are making in a very challenging environment, one that places relentless demands on our staff.  The situation on the ground in all fields is very difficult and changing, and I find it increasingly important to meet regularly with field leadership, our frontline workers, and unions.

Meetings with Host officials have also been important moments on my agenda and that of Deputy Commissioner-General Sandra Mitchell, especially in recent months to address our activities and reforms, which have benefitted from consultation at high political levels.

To put it simply, the challenges we are addressing require extraordinary resolve because field realities are truly dramatic, the distress of refugees high, and our organization as a whole must commit much energy to address the growing needs. To do so and keep delivering effectively, we must be even more joined up in all we do and internal solidarity must be kept strong.

I have also engaged regularly with members of the refugee communities. They are at the center of our work, and from every encounter I come away with a clearer view of their reality, and deep respect for their perseverance and determination to work their way out of hardship and hopelessness.

Three weeks ago I witnessed an extraordinary moment, one which illustrates why we are assembled here and why I believe UNRWA is an agency that the world needs today more than ever. In Damascus I met 120 children who had emerged the day before from the devastated landscape of Yarmouk. Boys and girls who were there to sit their national exams.

I want us to remember Yarmouk and to imagine what it takes for some form of education, improvised or other, to be preserved which enables these children to take their exams. And even more so, what determination and courage it takes for these children to actually pursue their efforts to learn under such circumstances. One child said: “if education dies in Yarmouk, Yarmouk itself will die”. 

In Ein el-Hilweh in Lebanon, Qalqilya in the West Bank, and Khan Younis in Gaza, refugees speak of the absence of a political horizon, economic pain and isolation from the outside world.  Of conflict and violence as constant threats.  Of the crucial support we provide.  Meanwhile, options open to them are few.

Despite extreme vulnerability, there is a determination to reclaim their lives from conflict, from exclusion.  Even amongst young refugees such as Batoul, a 14 year Palestine refugee from Syria, now displaced into Lebanon. She lost her father and brother in the Syria conflict. I met her in an Ein el-Hilweh school some months ago, where she is one of the best academic performers. During the World Humanitarian Summit, while I was in Istanbul, I wrote an opinion piece which refers to her and her courage.   As I sat in one of the panel discussions of the WHS, her school principal messaged me to say Batoul was just reading my article, and she promised to keep working hard. I replied it was me that would continue working hard so that she could continue studying.

I hope I can convey strongly enough that it is our responsibility to work harder for her and the countless other Palestine refugees she symbolizes, in their dignified struggle to rise above circumstances and help themselves and their communities.

A year ago we had to announce one of UNRWA’s largest shortfalls ever and we spent three months to overcome it with your support. Our entire education program was at risk. In the aftermath we all agreed that this should never happen again. UNRWA set up a strategy combining internal management measures and reforms and an external outreach campaign to avoid a similar crisis this year and to set the Agency on a more stable footing for the future.

I would like to update you on where we are in this regard and ask for your advice on the next steps.

MTS Implementation / Reforms

Let me begin with the internal measures we have taken and first among them, the steps to implement the reforms in line with the Medium Term Strategy for 2016-2021.

Back in 2014, in my first months on the job I reached out to Host and donors delegations about UNRWA’s sustainability, and shared interests in preserving it.  I was struck by the persistent and growing resource gaps for an Agency with a continuing mandate to deliver basic services to a large refugee population. The sharpest threat is the size of the shortfall we face each year in our core operating budget, and being forced to carry that shortfall further and further into the year.

This is probably the most difficult issue for UNRWA and its stakeholders to address. 
So, I indicated to the Commission in June 2014 that not addressing these trends could not be an option for UNRWA or its stakeholders, and by November 2014 I reported on reform commitments by UNRWA’s leadership to address its responsibilities robustly, working with my senior management team to embed them in the MTS.

Details on progress made in implementing a range of MTS reforms will be provided by Field Directors.  What I would like to underline for the Commission is that we have put into action major changes and we did not wait until year 3, 4 or 5 of the MTS implementation to do so. We front-loaded them and have made real progress, while facing unprecedented challenges in our operating environment.

To do this at a time when refugees see no political horizon, when 60 % of them are in zones of armed conflict or occupation and face increasing levels of poverty and despair, is a formidable task.

UNRWA has felt the risks, and colleagues in the fields are coping with extraordinary pressure from beneficiaries, refugee representatives and other actors.  We are forging ahead  and do so out of a sense of deep responsibility to all stakeholders and most certainly to the Palestine refugees, and I cannot emphasize enough how important it is to move the reforms forward if we are to strengthen the Agency.

I wish to pay tribute in this regard to our respective field teams, led and represented by the directors here today, for the determination they have shown in pursuing these important goals. I would also like to acknowledge with deep appreciation the role of the Hosts, with whom we have engaged at all levels, and who have taken key steps to facilitate reforms, to which I will now turn. 

Food to cash

To start with, in the last week our “food to cash” transition was rolled out as intended in three fields - Jordan Lebanon and the West Bank. “E-cards” are being distributed to some 160,000 eligible refugees in our social safety net programme.  By the first quarter of this year, we engaged and communicated actively with the communities – by one count, 400 consultations in recent months with refugees and the Camp Services Committees.  

This transition has been swift and is of huge significance.  For one thing, I wish to recognize that any change in services or delivery triggers intense stress in the refugee community, even changes for the better.  We understand this well since they have had to face so many broken promises since 1948.

There is also an anxiety related to the fact that food aid in particular is overlaid with historic symbolism for the refugees.  However, we have stressed to all interlocutors that this change is ultimately empowering, not only because it is a more dignified means of achieving food security, but because it allows for choice by the refugees themselves.  We hope the new system will enable us to mobilise more resources and cover a larger number of food insecure refugees. 

There is another significant aspect to this transition, which is that eligible refugees broadly supported the E-card, and we have an obligation to hear their voice and respond.  We have pledged to review the reform and refugee perceptions after a year.

Another reform to which we have been committed in the MTS concerns our hospitalization policy. The Director of Operations for Lebanon will update you shortly on the important progress made in the last week in reaching an outline agreement with refugee representatives on amendments to the policy including co-payment arrangements in referrals for secondary medical treatment.  Good practice, consistency across fields, and financial viability of hospitalization in the era of NCDs, have all been at stake, which the major cost overruns in Lebanon – a field accounting for 50 % of our entire hospitalisation budget – have shown clearly.

For almost 6 months, amendments to the old policy have triggered a backlash and resulted in serious disruptions to our operations in various areas of Lebanon, including threats to staff.  Intensive consultations, and our commitment to ensure access to urgent hospital care is preserved for the most vulnerable refugees in Lebanon, have helped put the reform back on track.  I would like to express special appreciation to Palestinian President Abbas for his diplomatic engagement and support in reaching a conclusion to the benefit of the refugees in Lebanon. Recognition also goes to important stakeholders in Lebanon.

These steps are a measure of how serious we are about our commitments. We have also taken important financial management decisions, to which I now turn briefly.

Financial and budgetary management

Since mid-2015 we have begun enforcing a deliberate hedging strategy for donor funds we hold, and this year have realized an income gain of $16 million.  While foreign exchange markets are unpredictable, our hedging represents an important effort by UNRWA headquarters to reassert disciplined risk management, and to create opportunities to create additional income internally.  

Quarterly budget reviews are also reining in expenditure by holding Fields and Departments to budget ceilings and spending patterns. The reviews have raised to new heights our due diligence and control, including over the staffing table Agency-wide. 

Separately, colleagues managing our Area Staff pension fund are tracking market movements with optimal vigilance, gaining $16 million while other funds suffered losses, and saving $300,000 annually through renegotiation of transaction fees.

Already last November I was able to report to the Commission a sizable reduction in costs following roll-out of early voluntary separation, or EVS, and the classroom formation exercise.  I will update you momentarily on the impacts of various measures on our financial picture in 2016.  But before that I would like to update you on our outreach and partnerships.

Donor & host outreach (diplomatic and financial)

I just described the range of actions we took internally but we have always been clear that internal measures alone would not be enough to bridge the resource gap we face.

Only our partners can do that through enhancing engagement and their sense of ownership as they did in 2015.  I appeal to the Members of the UNRWA Advisory Commission to sustain their solidarity at the higher levels of last year. To succeed in this part of our strategy, we have engaged all of you at different levels, including the highest, to ensure that we avoid a repeat of last year’s crisis. Here again, we front-loaded our actions, not waiting until the summer but engaging much earlier in the year.

While UNRWA is reaching out actively, Hosts, donors and the wider international community have key roles to play and in that regard deep gratitude is owed to Jordan and Sweden for convening a special meeting of Member States on 4 May in the UN General Assembly.

The support of the Secretary-General has been extremely valuable, both with Member States and also in pursuit of partnership opportunities. He has opened the door to dialogue with the World Bank, which we are taking forward in the hope it will be of benefit to the Palestine refugees. The first phase has been promising. In addition, we have used platforms like the WHS to engage new stakeholders, like Gordon Brown, in an effort to diversify sources of funding.

Financial Situation

Turning to our financial situation, I want first to underline once again that we presented a zero growth budget between 2015 and 2016. 

That may sound straightforward, but the more I think of it the less straightforward it is. A zero growth budget in a region where there certainly was no zero-growth in terms of needs. To the contrary, all around us needs are exploding and I would respectfully ask that anyone name another agency in the international system that presented a zero growth budget. I ask that this be duly recognized and not taken for granted.

Then, you will recall that last summer we forecast a shortfall of $135 million for 2016, then revised it downward following internal actions to $81 million where it stood from November 2015 until last week.  I am now able to confirm the forecast shortfall of our Programme Budget of $668 M for the year has come down to $74 M. That is therefore a 27% reduction compared to the 2015 shortfall at the same point in time, and a 45% reduction compared to the initial forecast for 2016.

There are two immediate factors lowering the shortfall from $81 million to $74 million.  One is additional income of $36 million, of which $16 million is a generous contribution from Japan, plus $2 million from Dubai Cares, a partner of growing importance for UNRWA. We have also recorded $16 million in realized foreign exchange gains.

The other factor is unbudgeted extra expenditure which regrettably offset some of the increase, mainly hospitalization overruns in Lebanon, which will not recur with new expenditure monitoring in place, combined with the planned implementation of the amended hospitalization policy there.

Credit for the reduced shortfall must also be given to the stringent cost controls that have been put in place and are reinforced by management measures affecting cost drivers such as posts and procurement.    

While the core shortfall is going in the right direction, the same cannot be said for the Syria emergency and the appeal for the occupied Palestinian territory. Despite being one of the most effective humanitarian actors in the region, we continue to receive only half of our requirements in the case of Syria.  I am especially concerned by the situation in the oPt where we estimate that funding this year will be 43% of the amount that we have appealed for.  Needs remain heavy and acute, the occupation and blockade are unabated, settlement growth continues, and some 50,000 persons await reconstruction by UNRWA of their homes in Gaza as a result of the 2014 war.

Mr. Chairman; Mr. Vice Chairman; Distinguished Delegates; Colleagues: 

It has taken all of UNRWA’s collective courage, leadership and drive to achieve the reforms under discussion here, and the remarkable management measures to address our Programme Budget. It is now time that these measures be accompanied and support by additional collective action by our donors and partners. 

The fact is, despite bold and concerted action by us in a short time frame, UNRWA’s Programme Budget shortfall is still at $74 million for the year.  As Commissioner-General, I am not assured that we will have sufficient resources to open our schools after the summer recess.  During the crisis last year refugee families across the region expressed an existential insecurity about a postponement of schooling for their children. Refugees, hosts and donors called for actions to avoid a repeat. 

Action is now urgently needed and I will be frank: it means very little for us to go to the World Humanitarian Summit, speak at length about dealing with protracted refugee crises, about leaving no one behind and the importance of education, if UNRWA has to spend 3-4 months every year to close 7% of its vital expenditure. We have taken every step needed and are paying a high price. Again I will be frank: if this trend continues the appetite in my leadership team for taking the necessary but painful path of reform will diminish rapidly.

We need to urgently close this gap. We have four weeks and I am asking for your advice on how to mobilize this money.

Conclusion

Mr. Chairman; Mr. Vice Chairman; Distinguished Delegates; Colleagues: 

 I am appealing to you because we are a team very serious about our own responsibilities. But also because I am so deeply convinced that UNRWA and its work are such worthwhile investment. There are so many successes, so remarkable:  Eradication of communicable diseases; mass literacy for boys and girls; vocational training for males and females, including the first center for women in the Middle East that every year produces some of the West Bank’s most skilled youth.  We introduced microcredit in some camps in the late 1980s, shortly after Mohammad Yunus launched Grameen in Bangladesh.  

The instinct to pioneer and innovate remains strong in UNRWA, and high on the list of our recent achievements are transformations in the classroom.  We are shifting from rote memorization to critical thinking, and our special curriculum on human rights and tolerance is in every school for every refugee child – including in Gaza and Syria. 

While providing emergency assistance to almost 1.5 million refugees, we sustain core services to well over twice that number and are a resource for communities recovering from conflict.  Take for example our microfinance programme, reforming thanks to the initiative of national staff, and with facilitation from the Governments of Jordan and Palestine for granting exemptions to national financial regulations on microfinance institutions. Our microfinance operation was able to expand into the battle-scarred town of Husseinieh in Syria.  The entrepreneurial spirit of Palestinians helps keep the refugee community alive; it bodes well for local economic recovery and post-conflict reconstruction. 

In closing, I would like to say a few words about our context.  This region is being torn by conflict.  Institutions of all kinds are being undermined and faith in the international community is weak. Violent extremism has spread far and wide.  I am trying to address the situation of refugee youth, educated but unemployed at high rates, lacking hope in the future.     

This situation here is grave. UNRWA is alive and strong but another crisis is staring us in the face.  Two crises in one year will be very difficult for the refugees to bear.  We need your support.

Thank you.

Background Information

UNRWA is confronted with an increased demand for services resulting from a growth in the number of registered Palestine refugees, the extent of their vulnerability and their deepening poverty. UNRWA is funded almost entirely by voluntary contributions and financial support has been outpaced by the growth in needs. As a result, the UNRWA programme budget, which supports the delivery of core essential services, operates with a large shortfall. UNRWA encourages all Member States to work collectively to exert all possible efforts to fully fund the Agency’s programme budget. UNRWA emergency programmes and key projects, also operating with large shortfalls, are funded through separate funding portals.

UNRWA is a United Nations agency established by the General Assembly in 1949 and mandated to provide assistance and protection to some 5.4 million Palestine refugees registered with UNRWA across its five fields of operation. Its mission is to help Palestine refugees in Jordan, Lebanon, Syria, West Bank, including East Jerusalem and the Gaza Strip achieve their full human development potential, pending a just and lasting solution to their plight. UNRWA services encompass education, health care, relief and social services, camp infrastructure and improvement, protection and microfinance. 

For more information, please contact:

Sami Mshasha
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