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COM(81)193
Vol.1981/0074

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COMMISSION OFTHEEUROPEANCOMMUNITIES
COM(81)193 final
Brussels,15thApril1981
COMMUNICATION FROMTHECOMMISSION TOTHECOUNCIL
CONCERNING FINANCIALAIDFORUNRWA
f,-: -■'Af<:7 <I'-A&^
V"-M
'ν:_
OMC81)193final.

Û6V)y|33
1.Backqround
AttheendofNovember 1980-theCommissioner-General
(1)ofUNRWA,Mr.Rydbeck,sentLetterstothePresident ofthe
CouncilandtoMr.Cheysson informing themofUNRWA'scritical
financial situation andrequesting theCommunity tomakeacontri­
butiontocoverpartofthecostsoftheAgency'seducation pro­
gramme.
Inreply,Mr.Cheysson explained thatitwasdifficult
toconsider makingachangeinthetypeofcooperation betweenthe .
EECandUNRWA(foodaid)andsaidthat,'inhisopinion,itwas
ratherforthehostcountries toincreasetheirresponsibilities
vis-a-visthe'refugees,andinparticular fortheGulfcountries
tostepuptheirassistance fortheAgency'sprogrammes .
On17MarchthePresident oftheCouncil andMr,Cheysson
received theCommissioner-General ofUNRWA,whoconfirmed thatthe
Agencygavepriority toeducation programmes andrequested that,if
theEECwasnotgoingtomakeaspecialfinancial contribution
towards suchprogrammes ,UNRWAmightbeauthorized tosellcereals
supplied asCommunity foodaidonamarketpreferably intheMiddle
East.
Thematterwasraisedbythe„President onthesidelines
oftheCouncilmeetingthatveryday,andtheMinisters agreedto
reservetheirreplyuntiltheCommission presented acommunication
settingoutpossible waysinwhichtheCommunity couldsupport
UNRWA'sefforts inthefieldofeducation .
(1)UNRWA=UnitedNationsReliefandWofksAgency.

2,UNRWA 1s'financialsituation
AdeficitofUS229million onabudgetofUS2231
millionfor1981hasstilltobemadeup,while,following various
approaches madesincetheautumn (including approaches tothe
Community),thefollowing exceptional contribution havebeenmade
1.USS10million bytheUSA-
ii,US25million bySaudiArabia
(andJapanrecently announced ,thatitwasincreasing itsUS2
10millioncontribution by10%), ^
Inthesecircumstances ,despitethepolitical risks
whichsuchaclosure wouldentail,UNRWAiscompelled toconsider
closing 635schoolsitisrunningintheMiddleEast(thereby
making9,700Palistinian teachers redundant,andinterrupting
theeducation of339,000pupils)attheendoftheschoolyear
(May-June 1981),
•Irvordertoavoidthislastresort,UNRWAisagain
requesting financial aidfromtheCommunity or,failingthat,
authorization tosellpartofthefoodaidallocated toit,if
possible onalocalmarket,inordertofinanceitseducation
programmes .

3.
3.Community 'scontribution to.UNRWA
TheLastConvention ,whichcovered1979and1980,
expiredon31December 1980anditsimplementation isnearing
completion .This-Convention provided forthefollowing :
For1979
(a)foodaid 40.000T.cereals
-(ofavalueof10,250,000 Ecu 3,200T,butteroil
attheworldprice) 700T,skimmedmilkpowder
(b)financial contribution intendedforthepurchase ofpreserved
foodproducts andthecorresponding expenditure onadministration
andpersonnel :US23,266.000 ,
For_1980
(a)foodaid 40,000 T,cereals
(ofavalueof12,190,000 Ecu 3,900T,butteroil
attheworldprice)^ 1,550T.skimmedmilkpowder
6.086T.sugar
(b)financial contribution intended forthepurchase ofpreserved
foodproducts andthecorresponding expenditure onadministration
andpersonnel :US23.600,000 ,
ThenewConvention ,whichwillbethesubjectofa
Commission proposal totheCouncil,shouldcover1981-82and1983,
OntheLinesofaidgrantedundertheoldConvention ,contributions
underthenewonein1981couldbeasfollows :
(a)foodaid - 40,000 T,cereals
(valueestimated at 1.632T.miIk
16,930,000 Ecuatthe 3.900T,butteroil
'worldprice) 6,086T.sugar
(b)financial contribution ofUS23,920,000 ,
ItshouldalsobenotedthattheCommunity andthe
MemberStatesconstitute theAgency'smainsourceoffinancing
(US281millionin1980outofatotalbudgetofUS2184million;
USA:US255million andOPEC:US215million).

4
4.,UNRWA'sproposal forsellingfoodaidtofinancethe
education programmes
Thisproposal comesupagainstmajorobstacles :
i,thesaleofproducts asenvisaged byUNRWAwouldchangethe
"food"aidintoaid"foreducation",therebychanging the •
entirenatureoftheCommunity'sactioninthissphere.
n,itwouldbecontrary totheveryspiritoftheConvention
signedbyUNRWAandtheEECsinceitisstipulated thatthe
EEC'sparticipation inthevariousaidservices organized
byUNRWA <foodaid,health,education )concerns onlyfood
aidprogrammes ,someofwhich,inparticular theoneknown
asthe"supplementary feeding programme",focussed onthe
mostvulnerable groups,arefinanced almostentirely bythe
EEC,_.
iii,Thosesections ofthepopulation atwhichtheConvention is
expressly aimedwouldtherefore nolongerbenefit fromCommunity
foodaidandtheoperation wouldgiverisetodisguised financial
aid,contraty totherulesofproperbudgetadministration ;..'
UNRWAis,furthermore ,unableatpresenttospecify onwhich
marketitintendstomakethesesales,,
.Thiswouldruncountertothepresentrules,whichlaydown
thatproducts delivered asfoodaidhaveaspecific final
destination ineachrecipient developing country (distribution /
freeofchargetothepopulation ofthatcountryorsaleon
thatcountry'slocalmarket),
Sv»Itwouldlead,moreover,toasubstantive changeinpolicyon
theawardoffoodaidtointernational bodiesandnon-govern-
mentalorganizations ,sincetheEEChasnevermafdeanyprovision
forthesaleofproducts asindirect aid,
v,Lastly,asalesoperation wouldbeofnovaluetoUNRWAorthe
/
Community,forsuchfoodaidforanunknownfinaldestination
wouldhavetobedelivered fob(andnotcif)andthefinancial .
contribution ,earmarked forcoveringthedistribution andadmi­
nistrative costsonthespotwouldipsofactohavetobe
cancelled ,Lastly,inrealterms,suchanoperation would ■
meanthatUNRWAwouldreceive averysmalltotalcontrioui .ion.

5.
5*Possible waysinwhichtheCommunity couldmakeacontribution
toUNRWA'seducation programmes x,
Sincethesaleofourfoodaidasenvisaged byUNRWA
isnotcompatible withtherulesonfoodaidorsatisfactory for
theAgencyfromthestrictlyfinancial pointofview,adirect
financial contribution totheeducation programmes seemstobe
thesolutionbestsuitedtoresolving theAgency'sbudgetary
difficulties .
Fromtheoutset,however,themeansavailable tothe
Community assuchhavenotenabledittoactotherthaninthe
_sphereoffoodaidandithasalwaysbeenconsidered thatfinancial
contributions toUNRWAwereamatterfortheMemberStatesalone.
TheMemberStatesshouldtherefore agreeonajoint
„contribution ,oftheamountconsidered necessary byUNRWA,towards
thefinancing ofUNRWA'sschools.
Thiscontribution bytheMemberStatesseemsallthe
morenecessary inthattheCommunity'sbudgetleavesverylittle
roomformanoeuvre , '
If,however,itweretoappearadvisable,despitethe
reservations expressed above,fortheCommunity toparticipate in
thisfinancing,inordertosupplement theMemberStates'contri­
butiontoalimitedextent,theCommission wouldsubsequently put.
appropriate budgetary proposals totheCouncil,itbeingunderstood
/thatthenecessary corresponding fundsshouldbemadeavailable for
theBudget,

6,
Bywayofconclusion ,theCommission ,awareof
UNRWA'sexceptional financial difficulties ,whicharejeopardizing
theAgency'seducation system,andtheseriousconsequences which
thiscouldentail,proposes thattheCouncilrequesttheMember
Statestoagreeonajointcontribution towardstheexceptional
financing oftheUNRWAschools.
If,however,theCouncil sodecided,alimited
supplementary contribution bytheCommunity couldbeconsidered ,
asdescribed above.