UN relief agency for Palestinians was in trouble before US quit

The precarious financial state of the UN relief agency for Palestinian refugees has been in the spotlight since the US, the organisation’s largest donor, announced its withdrawal of funding last month.

But the organisation’s difficulties do not begin and end with the US.

For a number of years now, the UN agency has been dealing with shrinking donations while demand for services has increased.

Between 2013 and last year, the total amount given to the agency by donor states fell by more than US$200 million (Dh735.6m) – at a time when the US contribution was steady.

Saudi Arabia had for years been among the top contributors, regularly giving more than $100m. But last year it faced its own financial constraints, largely caused by low oil prices.

Between 2016 and last year it reduced its donation by nearly two thirds, from $148m to $53m. The EU’s contribution also fell from $159m to $142m.

The latest crisis began in January, when the US announced it would freeze aid to the UN agency, withholding about $305m. This left the organisation with an overall shortfall of $446m for the year, or 30 per cent of its budget.

The funding gap illustrates how the problem goes deeper than the American withdrawal.

“Make no mistake, this is not a temporary financial crisis,” Chris Gunness, the agency’s chief spokesman, told The National. “This is an ongoing, structural crisis and we will begin next year with an even bigger deficit.”

The dilemma threatens essential services for nearly six million Palestinian refugees across the Middle East, including health care, education, social services and emergency humanitarian assistance.

As a result of the US withdrawal, the agency has shed 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 the agency’s aid. When it began operations in 1950, it catered to about 750,000 Palestinian refugees from the 1948 Arab-Israeli conflict.

Since then, generations have been born as refugees in the region. In the past eight years, the number of people registered for the agency’s services has grown by one million.

Another factor exacerbating the problem is that foreign aid budgets are stretched more thinly, with crisis responses in Syria and Yemen requiring funding. The US has spent more than $7.4 billion across the region on humanitarian aid related to the Syrian crisis since 2011.

In the past few months, faced with the prospect of closing schools and halting essential services, the agency launched fundraising drives to try to plug the gap.

Between March and June it raised $238m in new funding. Saudi Arabia, the UAE and Qatar each pitched in new donations of $50m. But it is likely to face an even bigger deficit next year, leading to questions over its long-term stability.

“The constant chasing of funders and seeking of commitments is not a sustainable option,” said Dr Alaa Tartir, a programme director at the Palestinian Policy Network.

“Humanitarianism has its inherent limits and it risks, despite all the good intentions, sustaining the status quo of refugees.”

The UN agency also recognises that the solution to its predicament lies in a grand political settlement, which seems more distant now than it has in years.