UNRWA, funding crisis and the way forward
This commissioned report has two main aims: First, providing a description of what UNRWA is, including its history, mandate and services, with particular emphasis on the recent funding deficit and how that has impacted its operations. Second, to explore the future for UNRWA and its services by investigating hypothetical scenarios.
The report traces the roots of UNRWA back to the 1948 Arab–Israeli war when some 750,000 people were uprooted and had to flee, creating the Palestinian refugee problem. In response, UNRWA was established to aid the refugees and continues to exist because no durable solutions to the refugee problem (repatriation, resettlement, integration or compensation) have been found. The report underscores the responsibility of the international community for creating the refugee problem and finding its solution.
The report explains how UNRWA’s mandate has evolved over time and remains anchored in the UN General Assembly. The Agency provides services primarily to registered Palestine refugees in five fields of operation: the West Bank, Gaza, Jordan, Lebanon, and Syria. Its activities cover education; health; relief and social services (RSS); humanitarian assistance through emergency appeals; microfinance; infrastructure and camp improvement; and protection. Education, health, and RSS constitute UNRWA’s main activities, and staff salaries make up the largest share of UNRWA’s budget.
More than 540,00 pupils are enrolled in the 718 UNRWA schools and about 10,000 students attend vocational training centres and teacher training institutes. In total, UNRWA employs about 20,000 teachers, out of close to 30,000 staff in total. The Agency provides basic health services in 143 primary health facilities, with approximately 3,000 staff and conducts a total of 8.5 million consultations annually. UNRWA also provides cash and food assistance to those most in need. This report describes some of the services provided by UNRWA, raising the issue of service eligibility and highlighting that UNRWA is a cost-effective provider of state-like services. However, due to long-lasting funding challenges, the services are not as good as they could otherwise have been. Signs of deteriorating service delivery are described by some reports and observers, and planned reforms are delayed.
A total of 41% of UNRWA’s budget is spent in Gaza, and there is a background of precarity and instability across Gaza, Lebanon, and Syria. This report gives insight into how Palestinian refugees, host countries, and international donors perceive UNRWA, and examines some key dynamics in these relations.
The report finds several explanations for UNRWA’s funding problems:
- Donor fatigue, and aid being channelled elsewhere. One key reason for this is the lack of a political solution to the refugee problem combined with the perpetually growing costs of UNRWA operations;
- Yearly rather than multi-year allocations, as more predictable funding would improve the scope for future planning and would involve less time being spent on fundraising;
- An (often unarticulated) opinion among some donor states that it is time for host governments, particularly Jordan, to assume more responsibility for the Palestinian refugee population;
- Skepticism and outright opposition to UNRWA based on the misunderstanding that its existence helps perpetuate the refugee problem or unfounded claims that the Agency instigates violence, for example, through school curricula with an anti-Israeli edge;
- The interplay between foreign policy and national politics;
- The collapse of the Middle East peace process; and
- Rising global prices, especially for food and energy.
Long-term, stable funding is a precondition for UNRWA’s future functioning at the level it does today. However, despite UNRWA’s fundraising efforts in recent years, the Agency has not succeeded in widening its funding base. New donor countries have been reluctant to join the regular donors, and historic donors are finding it increasingly difficult to raise the required funds. The report discusses the funding challenges and the possible implications of these. The possible scenarios can be grouped according to their focus: a) continued austerity measures; b) a combination of various cuts in services, including structural changes such as applying stricter needs-based criteria; c) models of reorganisation, such as mandating other entities to assume UNRWA responsibilities; d) more positive scenarios such as increased funding or implementing modernisation measures; e) scenarios in which the mandate is altered to become more in line with the international refugee regime; f) changes to the political context in which UNRWA operates; and g) collapse of UNRWA.
In sum, apart from the more optimistic scenarios of increased funding, these options range from bad to worse. Some of the scenarios imply serious political repercussions, while others will not make UNRWA more sustainable nor ensure that they quality of its services is maintained or improved. The most likely way forward appears to be the continuation of current austerity measures, and a consequent deterioration of services. This scenario harms the refugee population in a highly insecure and volatile region. And it raises the question as to when a gradual deterioration of UNRWA’s services will no longer be possible and instead becomes an actual collapse of operations. Above all, this most-likely scenario carries high political risks and uncertainty for the international community in a fragile region and at a time when, globally, there is little capacity to manage major new crises.
UNRWA represents the international dimension of the Palestinian refugee question, it cannot be decoupled from this fundamental fact: In 1948, Israel was established as a state for Jews while a majority of Palestinians became stateless refugees. The displacement of the Palestinians—the Palestinian refugee question—is both a major root cause of the unresolved Palestine-Israel conflict, and one of the most controversial questions today. For seven decades, UNRWA has provided humanitarian assistance and state-like services to the “Palestine refugees”.
Today, UNRWA suffers under the weight of a bleak funding situation and austerity measures due to donor fatigue and less political interest for the Palestine question, and hence for UNRWA as well. UNRWA’s future seems uncertain, but its performance will affect the lives of millions of refugees in a region characterised by political instability and economic decline.
This report was commissioned by the Norwegian Ministry of Foreign Affairs with a two-pronged task. The first was to describe “what international donors should know about UNRWA”. In doing so, we have covered the following themes: UNRWA’s mandate, services and organization; the Agency’s areas of operation; humanitarian aid; the Palestinian refugee question and international law; the political context; UNRWA’s economic situation; and major donor patterns. The second task was to provide a consolidated analysis of relevant scenarios for UNRWA going forward.
In gathering information, we have used different methodological approaches. Firstly, we have used document analysis as the report builds on a close reading of internal UNRWA documents, as well as publicly available UNRWA reports and other information available at UNRWA web pages (Annex A). Secondly, we have undertaken 35 semi-structured interviews with 38 persons between February and September 2022. We have interviewed policy experts, academics, international donor representatives, UNRWA staff, and host representatives. Most of the interviews were conducted digitally via Zoom or Teams, though some have been face-to-face, and a few in writing. Some were interviewed more than once. The interviews were carried out under conditions of confidentiality and anonymity, and hence we mention no names or affiliations in the report. The interviews were not audio-recorded. Finally, we have consulted various evaluation reports as well as literature and academic publications on UNRWA and the Palestinian refugee issue (the literature list).
The UNRWA documents have given us first-hand access to essential numbers and UNRWA’s own assessments. While some themes are well-documented and analysed in existing research and evaluations, others—such as the quality of services—are not. When several interlocutors have responded similarly, it increases the validity of a claim. Other times, a quote from an interlocutor is used to illustrate an argument. We have used a combination of methodologies and sources, which generally strengthen the findings. At the same time each sub-theme is presented/treated relatively briefly, meaning that some nuances are lost, and some themes have been left out. We are responsible for any mistakes.
The report is divided into two parts. Part One provides an overview of UNRWA, focusing on its mandate and current predicament. In Section 1, we give a brief introduction to the Palestinian refugee question. In Section 2, we provide an introduction to UNRWA, the relevant UN resolutions and its mandate. We explain UNRWA’s mandate by discussing its beneficiaries, providing an overview of its services and assistance, the evolution of the mandate and a brief discussion about what kind of organisation UNRWA is. In the third section, we centre UNRWA and the Palestinian refugees, and highlight living conditions, the quality of UNRWA services and assistance and discuss the relationship between the Palestinian refugees and UNRWA. The fourth section provides an overview of UNRWA and the host countries, and we briefly explain the refugee question in political negotiations, host countries and regional politics. Section 6 explains key themes pertaining to UNRWA, the UN and international donors. Here we describe the funding model, the current funding gap, perceptions of UNRWA and UNRWA–donor relations.
In Part Two we discuss 12 hypothetical scenarios and discuss some of their possible ramifications. Some are scenarios suggested by either UNRWA or international donors, others are analyses of UNRWA in light of various trends, realities and regional developments. One is the event of increased funding, and some are options or choices for UNRWA or the UN General Assembly (UNGA).
List of scenarios for UNRWA’s future
- UNRWA continues like today: “muddling through”
- Other UN agencies operate selected UNRWA services
- UNRWA without RSS and Emergency relief
- Tightening the eligibility criteria for RSS
- Cutting selected services in Jordan and the West Bank
- Cutting all services and assistance to refugees in Jordan and/or the West Bank
- Modernization to improve efficiency
- Increased funding to UNRWA
- Closer alignment with the global international refugee regime
- The collapse of PA and/or Hamas
- The collapse of UNRWA
- UNRWA in 2040
 A note on terminology: As is explained in section 2, “Palestine refugees” refers to those fleeing in 1947-1949 and who registered with UNRWA, while “Palestinian refugees” refers also to refugees who are not registered with UNRWA. In this report we use these terms interchangeably. “Palestine” in the label “Palestine refugees” refers to the place they fled from. Note that in the early years UNRWA assisted also 17,000 internally displaced Jews in Israel, Lebanese nationals and Algerians, Jordanians and Syrians (Albanese and Takkenberg 2020: 23ff).
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