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UNITED
NATIONS
A

        General Assembly
Distr.
GENERAL
A/36/615
22 October 1981

ORIGINAL:ENGLISH

Thirty-sixth session
Agenda item 60


UNITED NATIONS RELIEF AND WORKS AGENCY FOR
PALESTINE REFUGEES IN THE NEAR EAST

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

Rapporteur: Mr. Ole Peter KOLBY (Norway)



I. INTRODUCTION
A. Origin and background' of the Working Group

1. The Working Group on the Financing. of the United Nations Relief and Works Agency for Palestine Refugees in the Near East (UNRWA) was established by the General Assembly under resolution 2656 (XXV) of 7 December 1970 to study all aspects of the financing of the Agency. In the solution the Assembly requested the Working Group to assist the Secretary-General and the Commissioner-General of UNRWA in reaching solutions to the problems posed by the Agency's financial crisis.

2. At the twenty-fifth and succeeding sessions, the General Assembly considered the reports submitted to it by the Working Group, 1/ and adopted resolutions commending the efforts of the Working Group and requesting it to continue them for a further year. 2/

3. The Working Group consists of the representatives of Prance, Ghana, Japan, Lebanon, Norway, Trinidad and Tobago, Turkey, the United Kingdom of Great Britain and Northern Ireland and the United States of America. During 1981, Mr. A. Coskun Kirca of Turkey served as Chairman of the Working Group and Mr. Hilary Kuwele Ziniel of Ghana served as Vice-Chairman.
B. Consideration of the report of the Working Group at the thirty-fifth session of the General Assembly

4. The report of the Working Group on its activities in 1980 3/ was considered by the General Assembly at its thirty-fifth session under agenda item 53 entitled "United Nations Relief and Works Agency for Palestine Refugees in the Near East". At its 3rd plenary meeting, on 19 September 1980, the Assembly had decided to include this item in its agenda and to allocate it to the Special Political committee, which considered it at its 6th to 13th meetings, held between 15 and 22 October.

5. At the 12th meeting of the Committee, on 21 October, the representative of the Netherlands introduced a draft resolution (A/SPC/35/L.6) entitled "Working Group on Financing of the United Nations Relief and works Agency for Palestine Refugees the Near East", sponsored by Austria, Bangladesh, Canada, Denmark, Germany, Federal Republic of, India, Indonesia, the Netherlands, New Zealand, Pakistan, the Philippines, Spain, Sweden, Trinidad and Tobago, Yugoslavia and Zaire.

Under the terms of the draft resolution, the General Assembly would;

(a) Commend the Working Group for its efforts to assist in ensuring the Agency's financial security);

(b) Note with approval the report of the Working Group

(c) Request the Working Group to continue its efforts, in co-operation with the Secretary-General and the Commissioner-General, for the financing of UNRWA for (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.

7. At its 13th meeting, on 22 October, the Committee adopted the draft resolution wiithout a vote.

8. At its 50th plenary meeting, on 3 November, the General Assembly considered the draft resolution regarding the Working Group, which had been recommended by the Special Political Committee together with other draft resolutions under this item, the Assembly adopted the draft resolution unanimously as resolution 35/13 D.
C. Terms of reference of the Working Group

9. In resolution 35/13 D, 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.
II. ACTIVITIES OF THE WORKING GROUP DURING 1981

10. Throughout the year the Working Group followed with concern the financial situation of the Agency, which experienced very serious difficulties. In February and October the Commissioner-General, Mr. Olof Rydbeck, met with the Working Group at Headquarters and brought it up to date with the Agency's problems.

11. At the 67th meeting, on 26 February 1981, the Commissioner-General informed Nocking Group of the financial situation of UNRWA as of that date, pointing out that the estimated deficit of $50.4 million could not be absorbed by reductions in either the relief or the health programmes. Accordingly, as only the education programme was of sufficient magnitude to absorb such a large reduction, he had sought the views of the Advisory Commission for UNRWA as to whether the Agency should either withdraw support of the schools in Jordan and Syria by the end of February or should continue all programmes until the end of the school year in May in anticipation of further contributions. Both alternatives had been rejected by the representatives of the host Governments, while the other members had preferred the second alternative. Accordingly, the Commissioner-General appealed to the Working Group to do whatever lay in its power to assist in raising additional funds, with the goal of meeting the immediate requirement of $34 million to keep the education programme operating.

12. Members of the Working Group made several suggestions for action it might taker and it was agreed that members would consult on ways in which it could assit the Commissioner-General in his efforts and meet again in that connexion in the near future.

13. At its 68th meeting, on 5 March, the Working Group, after reviewing the suggestions put forward at its previous meeting for measures to assist the Commissioner-General, approved the text of a letter which the Chairman would address to the Permanent Representatives of States Members of the United Nations, to the Permanent Observers of States not members of the United Nations which were members of the specialized agencies, and to the Heads of the specialized agencies in which attention was drawn to the necessity explained by the Commissioner-Genera of closing the UNRWA schools by the end of May 1981 and of notifying the teachers of the termination of their employment by the end of March, unless additional contributions amounting to $34 million could be secured. In his letter the Chairman, on behalf of the Working Group, addressed an urgent and pressing appeal to all to make an immediate effort to avert the closing of the UNRWA educational facilities by making generous contributions or by increasing previously-pledged contributions by the end of March. These letters were sent out on 6 March 1981.

14. At the same meeting, the Working Group further decided to request its Chairman, accompanied by its Rapporteur, to meet with the Secretary-General in connexion with further possible measures that might be taken to assist UNRWA and ask them further to meet with the Chairman of the regional groups to draw attentic to the need for additional funds. Finally, the Working Group decided to issue a press statement with regard to the action it had decided upon.

15. Pursuant to the mandate conferred upon them, the Chairman and the Rapporteur of the Working Group met with the Secretary-General on 10 March 1981. Subsequently, the Chairman, accompanied by the Rapporteur of the Working Group, explained the serious developments to the Chairman of the Asian group of States on 16 March, to the Chairman of the Latin American group and the Eastern European group on 17 March, and to the Chairmen of the African group and the Arab group on 18 March, and on 20 March the Chairman, who was simultaneously Chairman of the group of Western European and other States, met with the members of that group.

16. At its 69th meeting, on 7 October, the Working Group again met with the Commissioner-General of UNKWA, who reported to it on developments that had occurred since March and on the Agency's current and prospective deficit. He expressed appreciation for the appeals that had been made by the Secretary-General, by the Chairman on behalf of the Working Group, and by the Director-General of the United Nations Educational, Scientific and Cultural Organization (UNESCO), which had resulted in additional contributions which had increased the estimated income to $193 million. In view of the strong reaction from the Governments concerned and from the refugees themselves, as well as an improved cash-flow situation, he had decided to take the financial risk involved in keeping the schools open in all fields to the end of 1981. However, the Commissioner-General indicated, the outlook for 1982 was a cause for grave concern, as the estimated deficit amounted to $80.3 million. After noting the fact that Governments were well aware of the important role that the Agency played in the Middle East and of the extremely serious consequences of its partial or total collapse, the Commissioner-General reviewed proposals that had been advanced for alternative methods for financing UNRHA and indicated his belief that if a change were desired, it was for Governments to put such proposals forward and to act on them. Section III below provides details of the current financial situation of the Agency as well as the outlook for 1982, and the comments of the Working Group on that situation are set out in section IV below.
III. FINANCIAL SITUATION OF UNRWA

17. In February 1981, the Commissioner-General informed the Working Group that the Agenfcy faced an estimated deficit of $50.4 million. Estimated expenditure had been revised and drastic cuts had been made, but the figure for expenditures still stood at $234.7 million. Estimated income from all sources, however, stood at only $184.3 million.

18. In October 1981, the Commissioner-General reported that, following the appeals made by the Secretary-General, the Chairman of the Working Group, the Director-General of UNESCO and by himself, some additional contributions had been received, though not enough to cover the continuance of the educational programme in all fields. Nevertheless, in April 1981 he had decided to take the financial risk involved in keeping the schools open in all fields until the end of the school year (May/June 1981) rather than run the political risks that would be entailed by closing them; By October 1981, the deficit still stood at some $46 million, with revised estimated expenditure at $239 million and revised estimated income at $193 million. The Commissioner-General had decided again to take a calculated financial risk and keep the schools open in all fields to the end of 1981. He would meet the deficit by eliminating all expenditure on construction, repairs and salary increases due to the staff to compensate them for increases in the cost of living ($24 million) and by eliminating budgeted provision for increases in separation costs due to the staff in the event of their termination ($14 million). The remaining deficit would be met through savings as a result of the appreciation of the dollar ($4 million) and by drawing on cash reserves ($4 million). This would reduce those reserves to an absolute minimum and would place the Agency in a precarious cash flow situation at the beginning of 1982.

19. The Commissioner-General informed the Working Group that the outlook for 1982 was most disturbing. Expenditure was estimated at $265.6 million and income at $185.3 million, leaving an estimated deficit of $80.3 million. Unless substantially increased income was pledged before the end of 1981, he would be obliged to take action to reduce expenditure early in 1982. As was the case in 1981, the only programme that could yield sufficient savings to meet the projected deficit was the one most valued by the refugees, namely the education programme.

20. The Commissioner-General sought the assistance of the Working Group in avoiding the curtailment of this valuable programme and drew attention to the appeal he had made to the General Assembly in his annual report to place the Agency's finances on a sounder footing. 4/
IV. CONCLUDING REMARKS

21. The year 1981 has been an extremely difficult one for UNRWA. The Agency's financial position, which has been precarious for a number of years, deteriorated, even further during 1981. During spring of this year the Agency came very close a total collapse because of insufficient funds. The Commissioner-General, the Secretary-General and the Working Group launched urgent appeals for additional funds. Special contributions in response to these appeals as well as the Commissioner-General's decision to take a considerable financial risk have enable UNRWA to continue its activities to the end of this year. To avoid a closure of part of the Agency's programme in 1981 the Commissioner-General will have to draw, the cash balances to practically nil, and the Agency may enter 1982 without sufficient funds to pay staff wages beyond January. Consequently, unless there a marked improvement in the financial prospects of the Agency for 1982 before the end of 1981, the Commissioner-General will have to take action to reduce expenditures as early as the beginning of 1982.

22. Among UNRWA activities the educational programme has been assigned the highef priority. The health care programme is already at a minimum and the relief assistance programme consists mainly of distribution of food-stuffs donated to UNRWA. Within the context of projected available resources, the ability of UNRWA to respond more favourably to the call for highest priority to be assigned to the educational programme would be facilitated if Governments making contributions in kind would consider the possibility of converting some of these contributions int cash. Any further reduction in the UNRWA programme can only be achieved through reduction of the educational programme and a closure of some of the Agency's schools. Such a step would, in the view of the Working Group, have serious social and political consequences, with implications for the refugees, for the host countries and for the prospects for a just and lasting peace in the Middle East.

23. The working Group believes that there is an urgent need for a more stable basis for the financing of UNRWA. It is regrettable that during 1981 it has not possible to make progress towards this end. An improvement in the financial position of UNRWA can only be brought about if more countries participate in the financing of UNRWA and if countries in a position to do so increase their goQtributions. The Working Group, therefore, reiterates its call upon those governments which have not yet contributed to UNRWA to start contributing. It orges those Governments which have so far made only relatively small contributions to contribute more generously towards the financing of UNRWA. The Working Group expresses the hope that those Governments which in the past have contributed so generously will continue to increase their contributions.

24. In his report to the General Assembly, the Commissioner-General suggests that Informal consultations should take place on an apportioning of UNRWA expenses. The Nocking Group supports the Commissioner-General's efforts to explore this proposal one possible way of consolidating the Agency's financial basis.

25. The Working Group continues to believe 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 education, health care and relief assistance remain indispensable.

26. The Working Group is determined to continue to assist the Commissioner-General in his fund-raising efforts. In the light of the extremely critical financial situation facing UNRWA at the beginning of next year, the Working Group expresses the hope that Governments will make an extra effort to advance the payment of their contributions to UNRWA for 1982.



---
Notes

1/ Official Records of the General Assembly, Twenty-fifth Session, Annexes, agenda item 35, document A/8264* ibid., Twenty-sixth Session, Annexes, agenda item 38, document A/8476j ibid., Twenty-seventh Session, Annexes, agenda item 40, document A/8849? ibid., Twenty-eighth Session, Annexes, agenda item 43, document A/9231j ibid., Twenty-ninth Session, Annexes, agenda item 38, document A/9815) ibid., Thirtieth Session, Annexes, agenda item 54, documents A/10268 and A/10334 ibid., Thirty-first Session, Annexes, agenda item 53, document A/31/279 ibid., Thirty-second Session, Annexes, agenda item 55, document A/32/278 ibid., Thirty-third Session, Annexes, agenda item 50, document A/33/320 and ibid., Thirty-fourth session. Annexes, agenda item 50, document A/34/567.

2/ Resolutions 2791 (XXVI) of 6 December 1971, 2964 (XXVII) of 13 December 1972, 3090 (XXVIII) of 7 December 1973, 3330 (XXIX) of 17 December 1974, 3419 (XXX) of 8 December 1975, 31/15 C of 23 November 1976, 32/90 D of 13 December 1977, 33/112 D of 18 December 1978 and 34/52 D of 23 November 1979.
3/ Official Records of the General Assembly, Thirty-fifth Session, Annexes, agenda item 53, document A/35/576.

4/ Ibid., Thirty-Sixth Session, Supplement No. 13 (A/36/13).



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