UNRWA looks to Gulf countries for support in the long term

The UN aid agency for Palestinian refugees will look to sustain the relationship with four Gulf Arab countries that helped reduce a $446 million (Dh1.64bn) deficit in its budget to just $21m despite the US withholding its contribution.

Saudi Arabia, the UAE, Kuwait and Qatar each contributed about $50m to the UN Relief and Works Agency after US President Donald Trump announced he would withhold $300m from the organisation, ending years of support and intensifying the rift between his administration and the Palestinians. The bulk of the remaining shortfall was met by donations from the European Union.

"This year has been an unprecedented success, we have essentially seen off a massive budget deficit which was thrust on us by our largest donor taking away all our funding. It's extraordinary to see the political and financial support we've received from other donors," Chris Gunness, chief spokesperson for UNRWA, told The National.

“As far as the US is concerned, we have factored in zero dollars expected from them for next year," said Mr Gunness. "The Gulf countries aren’t filling in until America comes back; we want to maintain regular relations with them."

UNRWA Commissioner General Pierre Krahenbuhl has lauded the resolve and creativity with which the agency and the international community addressed its “greatest financial predicament ever” and credited the agency’s partners who “rose to the occasion”.

“Today, I am very pleased to announce that, overall since January, donors contributed or pledged an additional $425 million, bringing our shortfall down to $21 million,” he said at a meeting in Jordan on Monday.

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The bulk of the Kuwaiti contribution,$42.1m, was announced this week.

“The Middle East region is going through very severe and complicated circumstances,” said Kuwait's Assistant Foreign Minister for International Organisations, Ambassador Nasser Al Hain.

Mr Trump also cut $200m in aid to the Palestinians for projects in the West Bank and Gaza Strip.

The withdrawal of US funds meant UNRWA was faced with the prospect of halting its medical aid and closing schools in Palestine. However, with the recent pledges it was able to maintain its services and plans to continue its core services of education, healthcare and social welfare throughout next year.

Mr Krahenbuhl said “the collective mobilisation is deeper and broader than we’ve seen in decades, accompanied by diplomatic engagement at the highest level”.

The agency now suffers from questions over its long-term stability which it says it will remedy through new funding streams under development with the World Bank. The new fundraising methods include a multi-donor trust fund and the establishment of an Islamic Waqf, or Islamic trust.

A UN source told The National that it was working through the World Bank to "unlock" sources of revenue, allowing UNRWA access to a convoluted financial funding system the World Bank manages.

The source said the Islamic Waqf could be a source of incredible value for the organisation.