Palestinians and UN workers examine destroyed shelters after an Israeli attack on an UNRWA-run school in Gaza's Nuseirat refugee camp. Reuters
Palestinians and UN workers examine destroyed shelters after an Israeli attack on an UNRWA-run school in Gaza's Nuseirat refugee camp. Reuters
Palestinians and UN workers examine destroyed shelters after an Israeli attack on an UNRWA-run school in Gaza's Nuseirat refugee camp. Reuters
Palestinians and UN workers examine destroyed shelters after an Israeli attack on an UNRWA-run school in Gaza's Nuseirat refugee camp. Reuters

UNRWA review warns Palestinian aid group could collapse


Nada AlTaher
  • English
  • Arabic

A review of the operations of the struggling UN agency for Palestinian refugees (UNRWA) has laid out four possibilities for its future, including closure.

It comes ahead of a vote by UN member states on whether UNRWA should continue its operations.

Commissioned by UN Secretary General Antonio Guterres, the review headed by former senior UN official Ian Martin concluded the discrepancy between UNRWA's mandate and its lack of financial support would mean major changes.

The review was prompted by "political and financial pressures" that are preventing UNRWA from fully carrying out its mandate, its director of external relations and communications Tamara Al Rifai told The National.

Four options were put forward for the agency. The first was to cut back on services, according to Reuters, which saw the document. The second was to create an executive board to advise and support UNRWA’s commissioner general in an effort to enhance accountability and secure more funding. A third option was to transfer some services to governments and the Palestinian Authority. The final scenario was closure.

The UN General Assembly is set to vote on renewing UNRWA's mandate at the end of this year. Only the 193-member assembly can change it. The review of its options has been distributed to all the member states.

Created in 1949, UNRWA provides aid, health care and education for millions of Palestinians in the occupied territories as well as Syria, Jordan and Lebanon. But in recent months it has lost US funding and been banned by Israel. The organisation is dealing with a deficit of about $200 million as a result of the US pausing funding last year.

The deterioration of UNRWA's position has been hastened by an Israeli campaign against the agency in which it accused members of colluding with Hamas in the October 7 attacks. UNRWA launched an investigation into the claim and suspended staff suspected of involvement.

Israel's Knesset then passed a vote to ban the work of the agency altogether.

"While we continue to implement our mandate given to us by the General Assembly, we never do it comfortably – especially since the war in Gaza ... where Israel has made the dismantling of UNRWA one of its objectives," Ms Al Rifai said.

Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

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Updated: July 11, 2025, 7:23 AM