The United States (US)—the largest donor country contributing funds to the United Nations Relief Works Agency for Palestine Refugees in the Near East (UNRWA)—has announced a suspension of any new contributions to the multilateral agency upon allegations of 12 UNRWA employees being involved in the 7 October Hamas attacks on Israel. Australia, Canada, the United Kingdom (UK), Japan, Germany, Italy, the Netherlands, Switzerland, and Finland have also suspended funding to the body. Although the US has defunded this organisation in the past, it was seen as an exception since the decision was taken in 2018 by the Trump administration. In 2021, under the Biden administration, UNRWA funding was resumed as the US was seen reverting to its pre-Trump multilateral commitments. The current fallback on defunding as the modus operandi by the US administration signals that UNRWA faces an existential threat, irrespective of the administration. The scale of the ongoing defunding announcements from several major donor countries also makes the scenario of UNRWA’s organisational demise appear more real than in the past. The magnitude of this wave of defunding can be estimated by reading the list of the top 25 donors of UNRWA (picture 1).
Picture 1: UNRWA’s Donor Ranking 2022 (Red = Donors states which have announced temporary defunding)
UNRWA remains the most important multilateral organisation working in Gaza, as in times of peace, it performs functions equivalent to those of a host state or a quasi-government ever since Israel occupied the territory in 1967. The agency has been mandated by the UN General Assembly to provide services like healthcare and education to Palestinians in Gaza as there is barely any state machinery to support the population. UNRWA’s importance grew even further after Israel started a blockade around Gaza, since 2007. Therefore, even before the 2023 Israel-Gaza attacks started, the Strip was under UNRWA’s humanitarian care. Unlike any other multilateral organisation, UNRWA is the only agency that is dedicatedly designed to care for a particular isolated group, the Palestinian refugees. These refugees are geographically dispersed throughout Jordan, Lebanon, Syria, the Gaza Strip, and the West Bank, including East Jerusalem. UNRWA runs operations in all these areas but Gaza holds the bulk of its agenda since the agency is seen spending nearly 41 percent of its Programme Budget on the Gaza Strip. Furthermore, the agency has the maximum staff presence in Gaza, higher than any other mandated area of its operation.
The agency has been mandated by the UN General Assembly to provide services like healthcare and education to Palestinians in Gaza as there is barely any state machinery to support the population.
Unlike other international organisations within the UN multilateral web where agencies are staffed by international UN workers and bureaucrats, the staff of UNRWA is largely Palestinian. UNRWA acts as a major employer in the Gaza Strip, wherein 95 percent of its employees are Palestinians. The recent allegations of UNRWA staff being involved in the 7 October terror attack on Israel must be analysed keeping in mind that the multilateral body has a heavy presence of local rather than international staffers. The localisation of UN staffing helps in providing employment to Palestinians in Gaza where the unemployment rate was as high as 40 percent before the conflict broke out. The salaries drawn by UNRWA workers act as a stable income source not only for the individuals but also for their kin in Gaza. Despite UNRWA’s importance to Palestinians in Gaza, this hyper-localised workforce is the epicentre of the ongoing crisis faced by the agency. A hyper-localised workforce weakens the multilateral body’s neutrality as some of these local UN employees hold strong personal views stemming from their Palestinian identity. In the ongoing upheaval around the 12 UN workers, nine were UNRWA teachers. Seven of these employees were accused of crossing into Israel on 7 October. Though these numbers remain a minuscule part of the total number of Palestinians employed by UNRWA, they were enough a reason for the agency’s top Western donors to take the extreme step of pausing funds at a time when Gaza requires the multilateral body.
The spillover from this defunding can have a lasting impact on the future of Palestinians, especially in post-conflict Gaza since there is no other UN agency that has as deep inroads in the Strip as UNRWA. Though the present defunding actions have been officially marked as a temporary halt until the agency makes improvements and addresses its organisational issues, it has set a precedent where the financial castigation of a crucial body like UNRWA has become politically palatable to donor countries. UNRWA has historically been sensitive to funding cuts since the agency is not a permanent UN body, but requires a regular renewal of mandate from the UN General Assembly. A severe funding cut, like the one being witnessed, can mean that the agency has lost the support of major countries that also hold the diplomatic heft to sway General Assembly votes. Though such a manoeuvre seems unlikely, growing financial precarity remains UNRWA’s topmost worry. After Trump’s 2018 funding halt, UNRWA initiated a widely publicised campaign to gather funds whereby it also identified the need to tap countries that can donate, yet do not. China remains one such marginal UNRWA donor that can contribute but remains on the sidelines. Gulf states also feature in this zone as the bulk of UNRWA funding for Palestinian welfare comes from Western nations. The current financial cuts indicate that UNRWA requires a deeper engagement with donors like China as well as the Gulf states.
A severe funding cut, like the one being witnessed, can mean that the agency has lost the support of major countries that also hold the diplomatic heft to sway General Assembly votes.
UNRWA’s organisational built remains a tall hurdle to the organisation’s journey towards absolute neutrality. Politicisation attacks on the agency cannot be fully averted if the agency continues to operate under its existing staffing pattern. An organisational reform of UNRWA is also unlikely while the agency is ceaselessly working at its peak capacity to provide humanitarian aid in Gaza. An independent review of the organisation has been announced but doubts remain on who will conduct that review assessment. The European Commission has put out a statement directly indicating that it expects UNRWA to agree to carry out an audit of the Agency that shall be conducted by ‘EU-appointed independent external experts’. Though such audits are necessary, UNRWA’s organisational imbalances cannot be reconfigured overnight. A misplaced focus on mending UNRWA at this time must not dilute the dire and immediate humanitarian needs of those in Gaza. Financial recalculations by top donors must address the fact that there is no multilateral equivalent to UNRWA in Gaza that has the deep organisational reach in the territory to facilitate a swift post-conflict recovery.
Angad Singh Brar is a Research Assistant at the Observer Research Foundation
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