The precarious financial state of the United Nations relief agency for Palestinian refugees has been in the spotlight since the United States – the organisation’s largest and traditionally most stable donor – announced it was withdrawing funding last month. But the organisation's difficulties do not begin and end with the US.

For a number of years now, UNRWA has been dealing with shrinking donations while demand for services has increased. Between 2013 and 2017, the total amount given to the agency from donor states fell by more than US$200 million (Dh735m) – at a time when the US contribution was steady.

Saudi Arabia had for years been among the top contributors to UNRWA, regularly giving more than $100m. But in 2017, it faced its own financial strain, sparked by low oil prices. Between 2016 and 2017, it reduced its donation by nearly two thirds, from $148m to $53m. The European Union’s contribution also dropped from $159m to $142m.

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

The gap illustrates that the problem goes deeper than the American withdrawal. Chris Gunness, UNRWA’s chief spokesman, told The National: “Make no mistake, this is not a temporary financial crisis. This is an ongoing, structural crisis and we will begin next year with an even bigger deficit.”

This structural dilemma threatens essential services for nearly six million Palestinian refugees across the Middle East, including healthcare, education, social services and emergency humanitarian assistance.

As a result of the US withdrawal, the agency has already axed 250 jobs in the Palestinian territories and made cutbacks across the board. Schools are threatened with closure.

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