5 million lives are on the line

UNRWA provides both lifesaving aid and critical infrastructure support to Palestinians – the consequences of suspended funds will be dire for those who rely on the organization.

By Arwa Emhemed and Chloe Aboud

If you were asked to describe a refugee camp, what would come to mind? Many would think of makeshift homes, tents, or shelters made from any scrap material that could be found. It would be harder to picture neighbourhoods with concrete buildings, permanent markets, schools and hospitals, as is the case for the many Palestinian refugee camps funded by the United Nations Agency for Palestinian Refugees (UNRWA). 

UNRWA is a humanitarian organization uniquely designed to protect the rights of a specific refugee population, and was established following the Nakba in 1948. Now, the lifeline of over five million Palestinian refugees is jeopardized after a series of funding suspensions for UNRWA. 

Since beginning operations in 1950, UNRWA has become the sole international organization designed to address this specific refugee issue in Gaza and West Bank, as well as in Jordan, Syria, and Lebanon, the main neighbouring countries where Palestinians took refuge after being displaced. Its funding scheme relies on UN contributions as well as international donors. 

U.N. Secretary-General Antonio Guterres characterized UNRWA as "the backbone of all humanitarian response in Gaza" and advocated for international partners to "guarantee the continuity of UNRWA's lifesaving work." Its refugee camps, serving as local neighborhoods, play an important role as part of the social fabric and infrastructure of their host countries, with services provided directly to the refugee population rather than through a host government. UNRWA’s welfare services have now become akin to those offered by a state. 

The importance of this agency cannot be stressed enough. As the UN Secretary General described, “our humanitarian response for the occupied Palestinian territory is dependent, completely dependent, on UNRWA being adequately funded and operational.”  

Recently, the organization has been rocked by a series of funding suspensions initiated by the US and followed by Canada, Australia, Britain, Germany, Italy, the Netherlands, Switzerland, Finland, Estonia, Japan, Austria and Romania. Together, their impact has paused about 60 per cent of the funding provided to UNRWA’s budget. France has no new payments planned, while Ireland, Norway and Spain have continued to fund the organization.

This action was taken in response to allegations of staff members being involved in the October 7 attacks. As Amnesty International emphasized, this decision will have a catastrophic impact on over two million refugees in the Gaza Strip who rely on the organization to meet their basic needs. Activists and nations argue that halting funds will compound the death toll already occurring through extensive bombing in the region.  

The reliance on Western funding creates instability and risk at the core of their financial model. The effectiveness of aid can be compromised if it is driven by the political interests of donor countries rather than the needs of recipients, leading to catastrophic consequences for the lives and well-being of Palestinians. 

This is compounded by the dependency on Western funding, which maintains a hierarchical relationship that leaves long-time recipients vulnerable to aid cuts. For UNRWA, the sudden withdrawal of funds by major donors, just when aid is needed the most, highlights those risks. Aid and support should not be denied without solid evidence; this is especially true for UNRWA, which covers a large territory with few resources, making the abrupt pause of funds deeply detrimental for local people.

This underscores the need for these institutions to remain autonomous, even if it may seem impossible when funding decisions are tied to politically charged environments. Autonomy in this context refers to the ability of institutions to operate independently and make decisions without external influence or control. This is not to say that they should not be held accountable, but rather their daily operative decisions should not be influenced by political pressures that hold funds in a carrot-and-stick manner. 

Such autonomy is necessary for UNRWA to operate effectively and impartially. While financially dependent, these institutions risk being used as tools to exert political pressure. This not only applies to UNRWA but extends to all humanitarian aid organizations. These entities, with their direct involvement and intimate understanding of the situation, are better equipped to tailor their responses to the unique challenges faced by the community.

Acting with autonomy would enable these institutions to maintain operational integrity and respond effectively to evolving needs without being constrained by external agendas. Looking further, beyond bodies such as UNRWA, there is a need for more diversified funding to solve the root causes that bring rise to the existence of these agencies in the first place. In the case of UNRWA, when funding schemes come with strings attached, such as when donor countries often use aid to advance their own geopolitical interests or exert influence over the region, the institution’s ability to make decisions that are in the best interest of Palestinian communities is compromised. 

These funding streams underscore the dependency framework. A shift in philosophy is required to break down the power structures that come with it. Funding cut decisions are made by leaders who are far removed from the realities on the ground and able to ignore the repercussions of their actions, including not only the suffering of affected populations, but the very capacity of the institution working to support them. 

Finding a long-term solution is not just a matter of criticizing where existing funding comes from, but instead requires an assessment of what fundamental issues funding is trying to solve. For a more resilient approach, it is important to use external funds for local capacity building. This means investing in local talent, knowledge, and governance structures in the aid delivery scheme. 

For example, UNRWA has robust local capacity in terms of hiring its field staff. Reports show that more than 99 percent of their personnel have been historically recruited among Palestinian refugees and host country nationals. Indeed, the effectiveness of UNRWA hinges on its commitment to bolster local capacity. This necessitates channeling external resources for local capacity building and empowering local communities and institutions laying the groundwork to ensure lasting progress and self-reliance amidst ongoing challenges.  

 UNRWA’s efficient service delivery can be explained by the close and mutually beneficial relationships between their civil servants and the beneficiary population. In turn, funding cuts create a problem that is two-fold; reduced funding means less support for both the local population and staff within UNRWA, who themselves are by and large direct recipients of the organization’s aid. This symbiotic relationship makes the reduction in funds harmful because it also targets the dedicated staff involved on the ground.

It is clear that financial autonomy stands as a pivotal desired characteristic for institutional frameworks. The bureaucratic independence that it offers would provide them with the flexibility and freedom to make decisions that align with their goals and objectives, without being overly reliant on external influences or pressures. 

Therefore, institutions such as UNRWA must explore and implement various measures to diversify their funding streams. One such measure could be the creation of endowments. Endowments are funds that are invested with the generated income used to support the institution’s activities. This not only provides a steady source of income but also ensures the long-term financial stability of the institution, ultimately allowing organizations like UNRWA to more effectively support the people they were intended to serve.  

However, the crux of the problem may not even be the way funds are calculated and dispensed, but rather the existence and longevity of target institutions. How much of the debate should be centered around provision of aid, compared to why the aid was required in the first place? Because even well-funded initiatives may fail to address the root causes of numerous issues.

Arwa holds a Bachelor's Degree in Political Science from the American University of Beirut. Her final capstone project was dedicated to the development of an app referral system aimed at actively engaging community members in implementing an intervention to combat illegal migration from Lebanon. Alongside her academic pursuits, she gained practical experience in diverse fields, notably during her time at the i4policy Foundation, where she contributed to policy drafts and conducted research to assess policy-related initiatives. Arwa now seeks to leverage her experience and education to formulate policy recommendations to improve women's rights, particularly in Libya and the MENA region.

Chloe joins the Max Bell school with recent experience as a Mergers and Acquisitions consultant. She completed her undergraduate studies in Economics and International Development Studies during which she conducted research in Education and Youth policy at the American University of Beirut, and research on Syrian newcomers’ experiences in Canada at McGill University.
With this background, and having witnessed the economic crisis unfolding in her home country Lebanon, Chloe is interested in tackling economic development issues and addressing policy gaps related to marginalized communities. She hopes to advance the collaboration of public, private and social actors to contribute to holistic policy solutions that support and revitalize communities making them more resilient in post-crisis contexts.