UNRWA has been in crisis since its inception

Dependency on donors has made UNRWA vulnerable to political pressure and interference.
Sunday 04/02/2018
Palestinian children hold bread patties during a protest against US aid cuts outside the United Nations’ offices in Gaza Strip, on January 28. (AFP)
Extremely vulnerable. Palestinian children hold bread patties during a protest against US aid cuts outside the United Nations’ offices in Gaza Strip, on January 28. (AFP)

The US Department of State announced it would withhold $65 million from a $125 million aid package for the UN Relief and Works Agency for Palestine Refugees in the Near East (UNRWA). Although the announcement created alarm over the future of the agency, the truth is UNRWA has been in a state of crisis since its establishment.

In 1948, during the Nakba, the United Nations was deeply involved in the conflict over Mandate Palestine after the failed partition plan. In recognition of its role in the creation of the Palestinian refugee problem and in the absence of a UN agency responsible for refugees, the United Nations decided to establish several ad hoc bodies to provide relief to the hundreds of thousands of refugees and to facilitate durable solutions.

From those institutions, only UNRWA exists today, remaining as the sole functioning body responsible for Palestinian refugees.

Since its establishment in 1949, UNRWA has been mainly dependent on donor contributions by countries rather than general UN dues levy and budget. This funding system has made the provision of services and project implementation dependent on the willingness of donors to fund them. Such dependency has made UNRWA vulnerable to political pressure and interference.

The chronic lack of funding has significantly affected the ability of the agency to assist Palestinian refugees, as the resources available per refugee diminish as the number of refugees grows. Over the years the Palestinian refugee population has gone from 914,221 in 1950 to 5,094,886 in 2014. While donor support has increased, it has not kept pace with the growth rate of Palestinian refugees.

Another significant development that affected UNRWA’s funding was the Oslo Accords. The peace agreement brought with it a dramatic increase in bilateral funding for the newly established Palestinian Authority institutions. A lot of emphasis was put on the West Bank and Gaza, as there was hope that the Oslo process could end the refugee issue.

As a result, additional resources were transferred to those two areas rather than the other regions of UNRWA operations. In the years between the signing of the accords and the beginning of the second intifada in 2000, the occupied Palestinian territories became one of the largest recipients of donor aid in the world.

However, while donor countries, whether intentionally or not, tried to support the peace process and the new Palestinian Authority (PA) institutions, UNRWA did not receive as many funds and the budgetary crisis deepened.

Many countries have attempted to dissolve UNRWA over the years and this is reflected in the financial problems of the agency.

On top of contributions to its general fund, UNRWA receives project funds and emergency funds, which can only be used for those specific purposes. Thus, it is the general fund that has the most effect on the ability of UNRWA to fulfil its mandate long term.

This is why the main strategy over the last two decades to put political pressure on UNRWA has been to cut the funding of the general regular budget of UNRWA while increasing the funding for projects or emergency programmes. This redirection of funds forced the gradual transfer of the essential services — education, health care, etc. — to host countries, creating an attractive scenario for Israel to push for the integration of refugees within those host countries and moving away from its responsibilities vis-a-vis Palestinian refugees under international law.

Despite the media attention received by UNRWA over the financial crisis, the agency was already suffering severe deficits. In 2015, it could only begin the school year after an emergency appeal for funds. This year, before the US cut in funding, the agency was facing a deficit of $150 million.

Why is UNRWA receiving funding from the United States and some support from Israel if both want to dissolve the agency?

A former US State Department official explained this well: “The only thing worse than supporting UNRWA is not supporting UNRWA and having total chaos in the West Bank or Gaza.”

The fact that UNRWA and its services are important factors in avoiding large-scale uprisings seems to be the main reason behind continued support for the agency, even by its detractors. UN Secretary-General Antonio Guterres said in response to the US announcement of funding cuts: “In my opinion, and an opinion that is shared by most international observers, including some Israeli ones, it [UNRWA] is an important factor of stability.”

With the collapse of the peace process and little hope for a return to the negotiation table, it seems clear that no durable solutions will be reached soon for Palestinian refugees, meaning that the agency will probably exist for the coming years although with an uncertain financial future.

As the Palestinian refugee population grows, funds will remain insufficient, which is why it is crucial for the structural and political factors behind the chronic lack of funding to be addressed if UNRWA is to continue acting not only as a service provider but as a stabilising actor in the region.