Select Committee on International Development Minutes of Evidence

Memorandum submitted by the United Nations High Commissioner for Refugees (UNHCR)


  UNHCR is one of the few UN agencies depending almost entirely on voluntary contributions to fund its operations. Only two per cent of UNHCR's annual budget is covered by a subsidy from the UN Regular Budget. Most of UNHCR's programmes are funded by governments. This reliance on voluntary funds, compounded by large and unforeseen refugee crises, has in recent years resulted in serious funding shortages, which have had a severe effect on the organisation's ability to respond to the needs of the people it is mandated to serve.

  About 96 per cent of the funds received by UNHCR in any given year come from 15 donors—14 governments and the European Commission. Despite efforts in recent years to expand this relatively narrow donor base and thus reduce its inherent vulnerability, UNHCR's success in this area has been decidedly modest. This can be attributed to a variety of factors, including the economic downturn experienced by many emerging economies during the 1990s, the strong US dollar, political problems diverting the attention of governments away from refugee matters or the absence of an established culture of multilateral assistance. (See annex—Contribution Chart).


  UNHCR operates on the basis of an annual calendar year budget cycle. The annual budget is the result of a planning exercise that commences in the field in the months of February and March preceding the target year. Field submissions are then consolidated at Headquarters into a budget document that is sent to the members of the Executive Committee of the High Commissioner's Programme in September. The annual budget is considered and approved during the annual session of the Executive Committee which takes place in October in Geneva. It is important to note that approval of the budget is in no way a guarantee that it will be funded. It is merely an endorsement by the Executive Committee that it properly addresses the needs of refugees and that the High Commissioner may on that basis seek to mobilise adequate resources. The annual formal Pledging Conference is held in Geneva in December, to permit donors to announce contributions for the next budget year. This early pledging is crucial to ensure that UNHCR's programmes in the field can be pursued without interruption. UNHCR's policies , planned programmes and the accompanying budgets, are published in a public document, the Global Appeal, issued shortly before the Pledging Conference.

  Unforeseen needs that arise in the course of the budget year, that cannot be covered with existing allocations and that are too large to be covered with transfers from the Operational Reserve become the object of Supplementary Programmes, and are presented to donors on an ad-hoc basis as Special Appeals. Depending on their public visibility, political relevance, and particular appeal to donors, these refugee situations and appeals at times benefit from genuinely new funding, at time from funds which were "diverted" as they were expected to meet the requirements of the initial Annual Programme.

  UNHCR's budget has a "unified" character, i.e. all programmes (whether initially approved by the Executive Committee, or subsequently added as Supplementary programmes) are included into one unified budget, which is adjusted upwards or downwards as the operational or funding situation may require.


  Not only the quantity but also the "quality" of funding—its predictability, promptness, and flexibility is important. Although some government donors have indeed increased the predictability and promptness of contributions, others continue to announce their contributions well into the year, transfer pledges with considerable delays, or earmark their contributions heavily. Earmarking can be done at the regional, sub-regional, country or sectoral level. In average, a rather low 20—25% of UNHCR's budget is covered by unearmarked contributions. Tight earmarking is being discouraged since it limits UNHCR's independence and flexibility to allocate resources according to where the needs are greatest at a particular moment.


  The unpredictable results of the current funding mechanisms has a negative impact on UNHCR's ability to carry out its mandate of protecting and providing durable solutions to refugees. Whilst acute refugee crises in general generate adequate support from the donor community, both in financial and political terms, protracted refugee situations receive less attention and financial support from donors.

  In order to secure a predictable minimum level of funding, the High Commissioner, Mr. Ruud Lubbers, has suggested several "normative" elements which governments could consider when determining the level of their support to UNHCR. These include the wealth of a country (expressed in GDP) or an amount per inhabitant per year ("one dollar or one Euro"). Although this level of funding is purely indicative, it provides a good yardstick against which donor support to UNHCR can be measured.

United Nations High Commissioner for Refugees (UNHCR)

5 December 2001

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