The precarious financial state of the United Nations relief agency for Palestinian refugees has been in the spotlight since the United States – the organisation’s largest and traditionally most stable donor – announced it was withdrawing funding last month. But the organisation's difficulties do not begin and end with the US.
For a number of years now, UNRWA has been dealing with shrinking donations while demand for services has increased. Between 2013 and 2017, the total amount given to the agency from donor states fell by more than US$200 million (Dh735m) – at a time when the US contribution was steady.
Saudi Arabia had for years been among the top contributors to UNRWA, regularly giving more than $100m. But in 2017, it faced its own financial strain, sparked by low oil prices. Between 2016 and 2017, it reduced its donation by nearly two thirds, from $148m to $53m. The European Union’s contribution also dropped from $159m to $142m.
The latest crisis began in January, when the US announced it would freeze aid to UNRWA, withholding some $305m. This left the organisation with an overall funding shortfall of $446m for the year, or 30 per cent of its budget.
The gap illustrates that the problem goes deeper than the American withdrawal. Chris Gunness, UNRWA's chief spokesman, told The National: "Make no mistake, this is not a temporary financial crisis. This is an ongoing, structural crisis and we will begin next year with an even bigger deficit."
This structural dilemma threatens essential services for nearly six million Palestinian refugees across the Middle East, including healthcare, education, social services and emergency humanitarian assistance.
As a result of the US withdrawal, the agency has already axed 250 jobs in the Palestinian territories and made cutbacks across the board. Schools are threatened with closure.
Beyond the immediate funding crisis is a more fundamental challenge: an ever-growing number of people dependent on UNWRA aid. When the organisation first began operations in 1950, it catered to around 750,000 Palestinian refugees from the 1948 Arab-Israeli conflict. Since then, generations have been born as refugees across the region. Over the last eight years, the number of people registered for UNRWA services has grown by about one million.
Another factor worsening the problem is that foreign aid budgets are stretched more thinly, with crisis responses in Syria and Yemen requiring funding. The US, for example, has spent more than $7.4 billion across the region on humanitarian aid related to the Syrian crisis since 2011.
In the last few months, faced with the prospect of closing schools and halting essential services, UNRWA launched several fundraising drives in an effort to plug the gap left by the US. Between March and June it was able to raise $238m in new funding. Saudi Arabia, the UAE and Qatar each pitched in new donations of $50m.
But the organisation is likely to face an even bigger deficit next year, leading to questions over its long-term stability.
Dr Alaa Tartir, a program director at the Palestinian Policy Network said: “The constant chasing of funders and seeking [of] commitments is not a sustainable option.”
He said humanitarian aid for refugees had been used over the years as cover for the international community’s failure to find a solution to the Palestinian refugee issue.
“Global powers and international governance institutions must stop instrumentalising the UNRWA through its humanitarian intervention to cover up for their political failures. Humanitarianism has its inherent limits, and it risks, despite all the good intentions, sustaining the status quo of refugees,” he said.
Dr Tartir added that Gulf states and the EU may well step up their contributions next year to account for the US withdrawal, but that will not mean stability.
UNRWA also recognises that the solution to its predicament lies in a grand political settlement, which seems more distant now than it has done in years.
“What needs to happen is a political resolution to deal with the refugee issue. That’s the best way to deal with UNRWA’s financial crisis,” said Mr Gunness.