Palestinian children walk outside of the United Nations' school in the Askar refugee camp, near Nablus in the Israeli occupied West Bank, on January 17, 2018 after the White House froze tens of millions of dollars in contributions.
The agency provides Palestinian refugees and their descendants across the Middle East with services including schools and medical care, but Prime Minister Benjamin Netanyahu has long accused it of hostility toward Israel and called for its closure. / AFP PHOTO / JAAFAR ASHTIYEH        (Photo credit should read JAAFAR ASHTIYEH/AFP/Getty Images)
What UNRWA does, and why it matters
00:54 - Source: CNN
CNN  — 

The UN agency tasked with assisting Palestinian refugees says the Trump administration’s decision to cut funds to the organization has sparked its largest-ever financial crisis.

The decision drew condemnation from Palestinians, praise from Israel, and expressions of deep concern from UN officials and refugee groups. It came two weeks after US President Donald Trump raised the prospect of cutting US aid to Palestinians in a series of tweets.

The United Nations Relief and Works Agency (UNRWA) will launch a global fundraising campaign to fill in budget gaps left behind by the US administration’s decision to withhold $65 million, roughly half of the amount it was due to receive from the US this month.

Palestinian children head out of UN-run Ramallah Elementary School in Beirut's Shatila refugee camp.

“It’s the most serious financial crisis in UNRWA’s 70-year history,” said UNRWA spokesman Christopher Gunness.

“It’s a massive, massive task that we face,” Gunness told CNN. “There is a huge deficit that we need to fill.”

The US is UNRWA’s single largest donor – it donated $368 million to the agency in 2016 alone. The US says it is cutting the agency’s funding because it wants to see reforms and for other countries to contribute more.

Alexander De Croo, Belgium’s deputy prime minister, announced Wednesday the country will distribute $23 million to UNRWA to cover a portion of the funding withheld by the United States. The contribution covers about 35% of what the US withheld.

Who is affected?

More than 5 million registered Palestinian refugees benefit from UNRWA’s educational, health and social services. The agency’s operations span the West Bank, Gaza, Jordan, Syria and Lebanon. It educates about 500,000 children in nearly 700 schools and UNRWA doctors see more than 9 million patients in nearly 150 primary health clinics every year.

UN Secretary General Antonio Guterres said he was “very concerned” about the impact of the US decision to cut UNRWA’s funding.

“First of all, UNRWA is not a Palestinian institution, it is a UN institution,” he said at a UN press conference Tuesday.

The services provided by UNRWA “are of extreme importance, not only for the well-being of this population, and there is a serious humanitarian concern here,” he said. “But also in my opinion and the opinion that is shared by most international observers, including some Israeli ones, it is an important factor of stability.”

Palestinian camps around the region typically suffer from rampant poverty, overcrowding, high unemployment, poor housing conditions and lack of infrastructure, according to UNRWA.

Many of the refugees are descendants of those displaced from what was then known as Palestine in the Arab-Israeli war of 1948-49. After the war, the newly created state of Israel prevented them from returning.

In some host nations, such as Lebanon, Palestinian refugees cannot claim the same rights as other foreign workers because they are not formally citizens of another country, UNRWA says.

Jordan and Lebanon are already under extreme strain from having to support refugees fleeing the Syrian conflict. Guterres said that if those countries also suddenly face the burden of having to deal with under-funded or non-funded medical clinics and other services, “this will create a very, very serious problem and we’ll do everything we can to avoid this situation to occur.”

There are also fears that the move could boost extremist groups in the region’s 58 official Palestinian refugee camps.

“(The US) is creating a vacuum that will be exploited by groups who the US and others accuse of being affiliated with terrorism,” said Riad Kahwaji, founder and CEO of the Institute for Near East and Gulf Military Analysis, a Dubai-based think tank.

Kahwaji warned that fundamentalists could step in to fill in gaps left behind if UNRWA’s services are scaled back.

“The door is wide open to extremist groups that use charities to infiltrate the most impoverished societies, to start educating them on their own, implanting radical extremist ideas, and recruiting the unemployed who used to be employed by UNRWA,” Kahwaji said.

Why now?

The move appears to be part of the fallout from Trump’s controversial decision to recognize Jerusalem as the capital of Israel.

Two weeks ago, Trump threatened to cut off aid to Palestinian groups unless Palestinian leaders agree to resume negotiations to broker a peace deal with Israel. The tweets were apparently aimed at the Palestinian Authority, which condemned Trump’s declaration of Jerusalem as the Israeli capital in a speech last month.

Palestinian Authority President Mahmoud Abbas said the US had “disqualified” itself as a broker in the Palestinian-Israeli peace process, and rallied the UN General Assembly to reject the move.

The assembly voted overwhelmingly to declare Trump’s Jerusalem move “null and void” last month.