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        General Assembly
20 October 1977

Original: English

DOCUMENT A/32/278*

Report of the Working Group on the Financing of the United Nations Relief and Works Agency for Palestine Refugees in the Near East

Letter dated 19 October 1977 addressed to the President of the

General Assembly

We have the honour to submit to you the report of the Working Group on the Financing of the United Nations Relief and Works Agency for Palestine Refugees in the Near East, which was adopted unanimously by the Working Group on 19 October 1977.


Ilter Turkmen, Chairman (Turkey)

C. Kobina Sekyi, Vice-Chairman (Ghana)

0le Peter Kolby, Rapporteur (Norway)

Jean-Luc Sibiude (France)

Shin Watanabe (Japan)

Fakhri Saghiyyah (Lebanon)

Christopher Thomas (Trinidad and Tobago)

Christopher Battiscombe (United Kingdom of Great Britain and Northern Ireland)

David Rowe (United States of America)


A. Origin and background of the Working Group [The text of paragraphs 1 to 5 is the same as that of the corresponding paragraphs in the previous report of the Working Group. See Official Records of the General Assembly, Thirty-first Session, Annexes, agenda item 53, document A/31/279, paragraphs 1 to 5.]

6. By resolution 3419 D (XXX) of 8 December 1975, the General Assembly again commended the Working Group, noted its report with appreciation and requested it to continue its efforts, in co-operation with the Secretary-General and the Commissioner-General, for the financing of the United Nations Relief and Works Agency for Palestine Refugees in the Near East (UNRWA) for a further period of one year. On 25 October 1976, the Working Group reported to the Assembly on its activities in 1976."

B. Consideration of the report of the Working Group at the thirty-first session of the General Assembly

7. The report of the Working Group on its activities was considered by the General Assembly at its thirty-first session under agenda item 53, on UNRWA. The Assembly referred the item to the Special Political Committee, which considered it at its 7th to llth and 13th to 15th meetings, between 25 October and 8 November 1976.

8. At the 13th meeting of the Special Political Committee, the representative of Iran introduced a draft resolution, sponsored by Austria, Belgium, Finland, the Federal Republic of Germany, Indonesia, Iran, Malaysia, New Zealand, Pakistan, the Sudan and Yugoslavia, subsequently joined by Uganda,10 in accordance with which the General Assembly would:

(a) Commend the Working Group for its work;

(b) Note with appreciation the report of the Working Group;

(c) Request the Working Group to continue its efforts, in cooperation with the Secretary-General and the Commissioner-General, for the financing of the Agency for a further period of one year;

(d) Request the Secretary-General to provide the necessary services and assistance to the Working Group for the conduct of its work.

9. At its 14th meeting, the Special Political Committee adopted the draft resolution unanimously.

10. At its 76th plenary meeting, on 23 November 1976, the General Assembly considered the draft resolution together with other draft resolutions under the same agenda item. The Assembly adopted the draft resolution unanimously as resolution 31/15 C.

C. Terms of reference of the Working Group

11. In resolution 31/15 C, the General Assembly requested the Working Group to continue its efforts, in co-operation with the Secretary-General and the Commissioner-General, for the financing of UNRWA for a further period of one year.

activities of the working group and developments during 1977

12. The Agency survived its 1976 crisis, although it was forced to suspend some of its services to the refugees and to defer most of its budgetary provisions for capital improvements. On two occasions during the year only last-minute special contributions by major governmental contributors enabled the Agency to avoid suspending all UNRWA operations.

13. During 1977, thanks to the generosity of certain regular and special contributors and the ceaseless fund-raising activities of the retiring Commissioner-General, Sir John Rennie, and his successor, Thomas W. McElhiney, UNRWA has again managed to avoid suspension of its programmes of assistance to the refugees. However, the Agency has been forced to reduce the flour ration by one half for the last four months of the year, and further forced reductions, greater than in 1976, are in prospect. The Agency still faces a deficit of about $12 million in a revised budget of $134 million. Consequently, it will be forced to reduce services further before the end of the year, even if the Commissioner-General's current urgent appeals for additional contributions receive substantial responses. Only if substantial special contributions are received in time will it be possible to restore most of the suspended assistance to the refugees. Moreover, in the absence of such new contributions, UNRWA 10 Ibid., document A/31/333, para. 17, draft resolution C. will not be able to use any of its general funds to assist in financing the first stage of the construction of a desperately needed new camp in Lebanon to provide housing for the refugees and thereby alleviate the conditions brought about by the recent armed conflict in that country.

14. In the face of this critical situation the Working Group decided to attempt to help the Commissioner General's fund-raising efforts by addressing a letter appeal to all Member countries and agencies of the United Nations system, as well as special letters of appeal to certain Governments.

15. The Working Group also held a meeting on 14 October 1977 to hear a final report from the Commissioner-General before preparing its own report to the General Assembly. The Commissioner-General brought the Working Group up to date regarding the current financial situation and problems of UNRWA. He stressed that the current budgetary crisis was eve more critical than last year at the same time. He also, described and explained to the Working Group the new forward planning procedure for solicitation off voluntary contributions, as set out in paragraphs 11 to 22 of his report to the General Assembly (A/32/l3 and Corr.l).


16. At the start of 1977, the Agency's estimated deficit was of the order of $45 million, based ON estimated expenditure of $139.7 million and estimated income of $94.7 million. In the first nine months of 1977, the Agency carefully re-examined its budget, in particular its assumptions regarding unit costs, inflation and exchange rates, and concluded that it would be possible to reduce its budget for 1977 to $134 million without reducing services. By mid-October expected income for 1977 had risen to $122.1 million. Consequently, the deficit for 1977 as of mid-October was estimated at $11.9 million, or the equivalent of the cost of approximately five weeks' operations. Not included in these figures was the extraordinary, one-time cost of a new camp in Lebanon which had been kept separate from the regular budget. The camp will be built in two stages, each costing about $6 million. As at mid-October, $3.3 million had been contributed to meet the first-stage cost, leaving a shortfall of $2.7 million. The Agency is unable to use any of its general funds to help meet the cost of the camp until it has covered the deficit of $11.9 million in its budget for regular programmes.

17. The working capital position of the Agency is such ($17.8 million at the close of 1976) that the Agency, in theory, could cover the currently estimated deficit by drawing down a substantial part of its working capital. However, this would leave the Agency with no working capital to cover operations in the early months of 1978 when, as the experience of the Agency clearly indicates will be the case, very few contributions will be received. More important, perhaps, it would also leave the Agency totally without reserves to deal with the financial crisis that is expected to arise in 1978 because the prospect is for lower total contributions in that year than in 1977.

18. Consequently, if additional contributions are not received for 1977, the Agency will have to reduce the deficit, if not completely then at least substantially by the same means as were employed in 1976, namely, temporary suspension of certain services and further deferment of even essential capital and other improvements. Such action would, of course, bear heavily on the refugees affected by the temporary suspension of certain services, and the further deferment of essential capital and other improvements would mean a con­tinued decline in the quality of the Agency's education and health services, which are already at a minimum.


19. The Working Group wishes to reiterate its conviction that, as long as a just and lasting settlement of the problem of the Palestine refugees has not been achieved, the Agency's humanitarian services in the form of relief assistance, health care and education is, remain indispensable.

20. The Working Group emphasizes once again the gravity of the continuing critical financial situation

j facing UNRWA. The Agency's budgetary position remains precarious, and the longer-term problems of financial security for its operations remain unsolved. Only the repeated generosity of relatively few donors has permitted UNRWA to avoid deep reductions or even suspension of its services to the refugees.

21. The Working Group repeats its concern that any reduction in the services provided by the Agency would have very serious implications for the refugees themselves, for the countries in which they live and for the prospects for a peaceful settlement in the Middle East as a whole. As in the past, the Working Group would view the possibility of any reduction or suspension of services with grave concern. The Group considers the continuation of the Agency's services to be an obligation of the United Nations acting on behalf of the international community, and continues to believe that the financing of UNRWA should be put on a firmer basis.

22. The Working Group has noted with approval the new forward planning procedure on a voluntary basis for solicitation of contributions. The difficulties and problems of providing adequate funding for UNRWA on a voluntary basis suggest that no single approach can provide a complete solution. The Working Group therefore sees no alternative to the Agency, and the Commissioner-General personally, continuing to devote time and effort to fund-raising activities.

23. The Working Group also reiterates and re-emphasizes its previously expressed belief that the situation whereby a small group of countries bears the major burden of financing the Agency's budget no longer corresponds with the requirements of the situation. Moreover, it is inconsistent with the terms of General Assembly resolution 3331 A (XXIX), in which the Assembly renewed the mandate of the Agency for a further three years and called upon non-contributing Governments to contribute and contributing Governments to consider increasing their contributions. This resolution was supported by 122 Member States.

24. At the present time the budgetary situation of UNRWA is even more critical than last year, with a deficit of nearly 10 per cent of its total budget. The financial crisis is chronic and the Agency's financial future is as precarious as ever. The basic financial problems of UNRWA will not be solved before a firmer basis for its financing has been established. In this connexion the Working Group reiterates its urgent request that those Governments which have not contributed in the past and those Governments which have so far made only relatively small contributions should be willing to reconsider their position and contribute more generously towards the financing of UNRWA. The Working Group also expresses the hope that those Governments which in the past have contributed so generously will continue to increase their contributions.


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