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Amid U.S. Cuts, Palestinian Refugee Agency Left in the Lurch

Nikki Haley bet the rest of the world would cover the costs of American aid cuts to Palestinian refugees. That hasn’t happened.

Nikki Haley, the U.S. ambassador to the United Nations, and Jared Kushner, a White House Senior Advisor, attend a U.N. Security Council meeting on February 20, 2018 in New York City. (Photo by Drew Angerer/Getty Images)
Nikki Haley, the U.S. ambassador to the United Nations, and Jared Kushner, a White House Senior Advisor, attend a U.N. Security Council meeting on February 20, 2018 in New York City. (Photo by Drew Angerer/Getty Images)

Nikki Haley, the U.S. ambassador to the United Nations, bet she could compel others to help America shoulder the financial burden of aiding Palestinian refugees if only the U.S. choked off its own humanitarian aid spigot.

So far, the Palestinians have come up empty-handed.

Two months after the United States withheld $65 million in pledged funding to a U.N. agency that serves more than 5 million Palestinian refugees, no other country has stepped forward to increase its 2018 funding pledge.

In an effort to address the sudden cutback in U.S. aid, ministers from nearly 90 countries will meet in Rome Thursday for a major funding conference on Palestinian aid.

The conference — which is being convened at the request of U.N. Secretary-General António Guterres and co-chaired by foreign ministers from Egypt, Jordan, and Sweden — will test whether Haley’s strategy will shock the rest of the world into meeting the gap created by America’s retreat from Palestinian aid. It will also place the U.S. delegation in the awkward position of defending U.S. cuts to Palestinian refugees, including those in Syria, at a time when the Trump administration been making the case for stepping up humanitarian relief to Eastern Ghouta and other besieged parts of Syria.

For decades, the United States has provided the largest share of funding to the U.N. Relief and Works Agency, which provides schooling, health care, food, and other vital services to Palestinian refugees in Gaza, the West Bank, Jordan, Lebanon, and Syria. In 2017, the U.S. gave more than $360 million to UNRWA.

In January, the United States nearly halved the first installment of its pledged contribution to UNRWA, signing a check for only $60 million rather than the expected $125 million. Washington also mandated that none of that money could be used to support programs for Palestinian refugees in Lebanon and Syria. The United States subsequently blocked the distribution of an additional $45 million in emergency food aid for Gaza and the West Bank.

The cuts in U.S. funding, which makes up about 30 percent of the agency’s annual operating budget, has precipitated the greatest financial crisis in its nearly 70-year history, according to an UNRWA spokesperson.

The decision was taken in retaliation for the Palestinian Authority’s promotion of two U.N. resolutions condemning U.S. President Donald Trump’s Dec. 6, 2017, announcement that the United States would move its embassy in Israel to Jerusalem.

The impact of the budget cuts have been partially mitigated by the fact that at least 15 donors, including the Netherlands, Norway, Sweden, and Switzerland, have agreed to immediately distribute their entire annual contribution for 2018 so UNRWA can better absorb the initial financial shock. The move has injected some badly needed cash into the agency.

Kuwait, meanwhile, has redirected about $900,000 it had committed to a 2017 emergency appeal for Palestinian refugees in Syria to UNRWA’s 2018 operating budget. But there are currently no fresh pledges of money to make up for the American cuts.

“This is not new money, but funds which were already pledged and then fast-tracked,” Chris Gunness, UNRWA’s spokesperson, tells Foreign Policy. Some countries, he says, have informed UNRWA “they are considering additional funding but nothing else is confirmed at this stage. We hope that a number of member states will announce substantial new funding at the meeting in Rome this week.

“UNRWA has received $60 million from the U.S. and currently has no indications that it is going to receive any more,” Gunness says. “So as things stand right now, and for UNRWA’s planning purposes, the agency is assuming that there will be a reduction this year in the U.S. funding stream of over $300 million.”

Gunness says the agency should be able to maintain its core services until early June, but he expresses concern about its ability to keep schools open from August through December.

An official at the U.S. mission to the United Nations, who spoke on condition of anonymity, tells FP the decision by donors to front-load their contributions constituted “a positive step toward burden-sharing. If other countries see value in UNRWA, they should make known through their donations.”

Israel has long had misgivings about UNRWA, which was created after the 1948 Arab-Israeli war, because it provides a lifeline to an ever-growing population of Palestinians it fears will demand the right of return. But Israel’s national security agencies have long tolerated the agency assisting the more than 700,000 Palestinians displaced by the conflict and their descendants as a necessary, if not particularly beloved, institution.

But Israeli Prime Minister Benjamin Netanyahu urged Haley, who was visiting Israel in June 2017, to advocate dismantling UNRWA, citing concern that the aid agency is biased against Israel. Haley initially pushed back and assured UNRWA that the United States would maintain current levels of funding for its operations.

But she reversed course after the Palestinians pressed in December for the adoption of resolutions in the U.N. Security Council and the U.N. General Assembly demanding that the U.S. rescind Trump’s decision to recognize Jerusalem as the capital of Israel.

Infuriated by what she viewed as an insult to the United States, Haley urged Trump to cut all financial assistance to the Palestinians through UNRWA. Haley initially prevailed on Trump’s national security advisor, H.R. McMaster, and John Kelly, the president’s chief of staff, assuring them it would give her leverage at the U.N. to persuade other countries to pick up a larger share of the costs of funding such programs, according to a well-placed diplomatic source. They gave her the green light.

She also received backing from Jared Kushner, Trump’s son-in-law and top Middle East peace advisor. The decision to cut funding was initially opposed by the State Department, the Pentagon, and the intelligence community, which feared a cutoff of aid could threaten stability and drive Palestinians into ever increasing desperation. In the end, U.S. Secretary of State Rex Tillerson persuaded Trump to cut only $60 million, about half of the United States’ first installment payment.

At the time, Tillerson’s spokesperson, Heather Nauert, said the United States was giving “further consideration” to the possibility of releasing more funds down the road.

But during a closed-door meeting on Feb. 20 with the U.N. Security Council, Kushner sought to cut off any discussion of U.S. funding. “We already gave $65 million,” Kushner said, according to a council diplomat.

It is time, Kushner said, for other countries to step in and share the burden.

Colum Lynch is Foreign Policy’s award-winning U.N.-based senior diplomatic reporter. @columlynch

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