The Trump Administration generated headlines with the recent decision to withhold $65 million in funding from the United Nations Relief and Works Agency (UNRWA). While Trump’s tweets and comments to the press would suggest that this is retaliation for Palestinian protests to U.S. recognition of Jerusalem as the capital of Israel, it is important to note that even if Trump releases this funding, total U.S. aid to the UNRWA for 2018 will still be almost $200 million less than previous years. The agency is set to face it’s largest financial crisis in history.
The decision to cut funding for the UNRWA could prove disastrous for U.S. foreign policy in the Middle East, especially in the Occupied Palestinian Territories (OPT). Failure to properly fund the UNRWA will exacerbate an already dire economic situation in the OPT, increasing the likelihood of violent confrontations between Palestinians and the Israelis. Furthermore, a resulting fiscal crisis creates an opportunity for other actors to exercise greater leadership over the peace process and expand their own influence in the Middle East. What happens in the OPT over the coming months may be a preview of U.S. foreign policy under the Trump doctrine, a retreat of U.S. global leadership.
The UNRWA provides protection and services for Palestinian refugees in Syria, Lebanon, Jordan, the West Bank, and Gaza. These services include healthcare, education, food, and cash assistance to over 5.2 million registered refugees. Outside of Jordan, the OPT have the highest concentration of refugees, with most living in the Gaza strip. The highest concentration of UNRWA services is in Gaza where it administers 267 schools that serve 267,000 students and 21 health facilities with an average of 4 million patient visits a year.
UNRWA support is essential in the OPT. A recent World Bank report details a bleak economic situation. Conditions are particularly bad in Gaza where overall unemployment is at 42% and youth unemployment is at 58%. Close to 40% of the population in Gaza lives below the poverty line and 80% of the population is reliant on some form of aid. Historically, service provision in the OPT has relied on a combination of support from Palestinian NGOs, Islamic charities, and the UNRWA to supplement the limited capacity of the Palestinian Authority. Any reductions in UNRWA services will further stretch already thin services and increase reliance on Islamic charitable organizations. This can only strengthen groups like Hamas who have made social service provision the backbone of their organization, using charitable works to form strong connections to Palestinian society.
The situation is likely to be exacerbated by Israel’s recent crackdown on NGO activity in Gaza, which has been seen as an attempt to stifle economic activity. Gaza is unlikely to be able to absorb both limits on humanitarian assistance by NGOs and a significant reduction in aid. As the economic situation deteriorates, Hamas will face increasing pressure to react. There is evidence that pressure is already mounting. Ismail Haniyeh, political chief of Hamas, cited the U.S. recognition of Jerusalem as the capital of Israel and the decision to cut UNRWA funding as evidence that the U.S. did not care about Islamic and Arab interests and preferred Israel over the Palestinians. That same week, thousands of UN employees and Palestinians took to the streets in protest of the decision.
Trump believes that U.S. funding can be used as leverage to force the Palestinians to negotiate with Israel; however, this is based on the assumption that alternative sources of funding can’t be found. To that end, the EU announced it would provide €42.5 million in additional funding. Several EU countries have also fast tracked contributions to make them immediately available and Kuwait announced a donation of $900,000 to the UNRWA. While these contributions are far short of the $200 million funding gap, they signify that the world may be preparing for the absence of U.S. leadership.
Trump’s withdrawal of aid for Palestinian refugees, coupled with the recognition of Jerusalem as the capital of Israel, may have permanently damaged U.S. credibility in the region. Should the UNRWA prove unable to secure alternate sources of funding, the resulting humanitarian crisis could lead to violent conflict between Israel and Hamas. The resulting financial crisis has opened the door for other actors to assume the financial role of the United States. While Europe is assuming some of the burden, it is not difficult to imagine China using the opportunity to expand its influence in the Middle East. What is clear is that the next six months in the OPT will be a preview of U.S. foreign policy and global leadership, or lack thereof, under Trump.