The Future of UNRWA

Minster Lovell (UK), 19-20 February 2000


Workshop Report




For half a century, UNRWA has provided health, educational and other services to Palestinian refugees in the West Bank, Gaza, Jordan, Syria, and Lebanon. Its operations have become essential to many of the 3.6 million or so refugees registered with the Agency: almost half a million students attend its 650 schools each year; more than seven million visits are made to its primary health care facilities; more than 200,000 persons received special relief assistance. UNRWA employs over 21,000 employees--most of them refugees.

Since its establishment, donors have provided substantial support to UNRWA. Since the signing of the Oslo Agreement in 1993 the Agency has received approximately $250 million each year in support of its general budget, in addition to funds received for special projects. Over recent years, the total amount of global official development assistance (ODA) has been flat or declining, while the refugee population has grown at a rapid rate. On the one hand, this has meant that per capita levels of support for refugees have declined sharply. UNRWA has been forced to introduce a number of austerity measures, and the quality of its services has been threatened by inadequate levels of funding. At the same time, UNRWA continues to receive more per capita assistance than UNHCR, and has actually received a growing proportion of global ODA.

In the context of a permanent status agreement on the Palestinian refugee issue, the operations and perhaps even the mandate of the Agency can be expected to change in many ways. UNRWA, and other UN agencies, might be called upon to play an important role in the implementation of permanent status arrangements. In the long run, resolution of the refugee issue will bring eventual termination of the Agency.

Anticipating future implications, challenges, opportunities, and constraints, however, requires outlining the possible contours of a future agreement on the refugee issue. Accordingly, it was to this task that the workshop first turned.


Transitions to Permanent Status

Participants discussed a range of possible outcomes of permanent status negotiations on the refugee issue. These included:

  1. A fully rights-based solution, based on the full provisions of UN General Assembly 194. This would include a full right of return of refugees to their original homes, the restitution of former refugee properties and/or payment of compensation for these.

  2. A fully-agreed compromise solution, consisting of a limited return of refugees to 1948 areas, a full right of refugees to Palestinian citizenship and repatriation to a Palestinian state in the West Bank and Gaza, the provision of compensation for refugees, and development programs in refugee communities. Clearly there is much scope for variation within this compromise as to the levels of return permitted, the scope of compensation provided, and the range of options from which refugees might make an informed choice.

  3. A phased variant of model #2, in which the parties agree to to certain basic principles and interim measures regarding the refugee issue, but also leave the modalities of implementation subject to further negotiation.

  4. Forced resettlement or transfer. This option would be marked by the absence of any refugee return to 1948 areas, limits on the scope of repatriation to a Palestinian state, and the resettlement of refugees in their present host countries and/or third countries. Compensation might also be provided to refugees, as well as aid and development programs offered to host countries.

In general, most participants thought some version of scenario 2 or 3 to be the most likely--although not necessarily the most desirable--outcome of permanent status negotiations. Several participants also expressed the view that such an agreement would emerge almost entirely from bilateral negotiations between Israel and the PLO, with little prior coordination with either regional parties or donors. Operationally, this may mean that UNRWA, donors and hosts may have little advance notice of the specific challenges that they will face prior to such an agreement being unveiled.

Participants agreed that it was unlikely that a settlement of the refugee issue would take place by September 2000. A unilateral declaration of independence by the Palestinians at that date could have some implications for both the legal status of refugees and the availability and nature of donor support for the West Bank and Gaza. However, there seemed to be no sense among participants that independence posed a serious challenge to UNRWA in and of itself (although political developments accompanying it might do so).

Israel has traditionally favoured a rapid termination of the agency as a way of marking the symbolic termination of the refugee issue. However, there was some evidence that UNRWA's importance in servicing refugee needs--and the possible political consequence of a sudden disappearance of the Agency--might lead Israel to favour a longer transitional period. In any event, several participants noted that Israel would be seeking to maximize the "conclusiveness" of any resolution of the refugee issue.

Participants were generally agreed on the danger of a precipitous termination of UNRWA. A rapid termination of UNRWA would put at risk the $250-300 million per year currently provided for refugees through UNRWA by the international donor community. A rapid termination would also imperil the smooth transfer of services to host countries. Finally, a sudden termination of the agency would likely raise the level of concern among refugees themselves, who--whatever their views about specific Agency policies and services--tend to see UNRWA as expressing international concern and responsibility for the refugee issue. In other words, a precipitous early termination might spark refugee discontent and social unrest, potentially delegitimizing a nascent permanent status agreement. It might also mean, depending on other aspects of the agreement, that refugees lose more from a settlement (through the termination of UNRWA) than they gain (through repatriation assistance, development initiatives, and compensation).

By the same token, however, it is inconceivable that UNRWA would continue to operate indefinitely after a refugee agreement, acting (in the words of one participant) as a "permanent internationally-sustained welfare system." Donors, faced with many demands on limited ODA budgets, will be anxious to move beyond financing UNRWA's recurrent service expenditures to support other priorities, including development initiatives intended to lay the foundations for sustainable future economic growth in the region.

Thus, in thinking about the future of UNRWA, three key principles emerge. First, the refugees must be better off at the end of a refugee agreement than they are under the status quo. Second, a "soft" landing is preferable than a "hard" one--the transition to an eventual post-UNRWA period ought to be planned and gradual. Finally, UNRWA is not forever--assuming that the parties can reach political agreement on a just and lasting resolution of the refugee issue.

What then can be said about the time-frame over which these issues must be considered and dealt with? Here much depends on the nature of any future permanent status agreement.

  • Under the second scenario presented above, UNRWA might be gradually wound down over a 2-5 year period. During this period, its previous functions would be gradually assumed by host governments. UNRWA might also take on new tasks, whether to assist host governments in upgrading the quality of their own service delivery, or in assisting in the implementation of various aspects of a permanent status agreement.
  • Under the third scenario presented above, UNRWA would face an indeterminate transitional period between initial agreement on a framework for resolving the refugee issue and agreement on specific modalities. This would then be followed by a subsequent wind-down period of perhaps 2-5 years, as above. From the Agency's perspective, this scenario (which could well drag over 5-10 years) would pose particularly serious challenges, given the likelihood that the refugee population would continue to grow while donor funding might well remain relatively flat. While the final resolution of the refugee issue was pending, there would be little possibility that the UN General Assembly would revise the Agency's mandate in the face of probable opposition from both the Palestinians and host governments.


Available Resources and the Transition

As is evident from the preceding discussion, many of the most important pressures and constraints on UNRWA (and the refugee populations that it cares for) arise from limits on available resources. Consequently, any discussion of the future of the Agency and its role in permanent status arrangements must devote particular attention to possible trends in future donor assistance.

The importance of this issue is highlighted when one looks at the relative size of current (donor-financed) UNRWA expenditures in each of its areas of operation relative to the economies of host countries (see below).

While the government of Syria could absorb current UNRWA expenditures in Syria relatively easily, the task is more difficult for Lebanon (due to low levels of government spending and weak public provision of public services). Jordan faces substantially greater relative costs than do either Syria or Lebanon. In the Palestinian territories, there is absolutely no prospect at all that the Palestinian budget could suddenly absorb the costs of providing former UNRWA health, education, and other social services in the immediate future. Indeed, if one presumes to repatriation of a significant number of Palestinians to the West Bank and Gaza, one estimate presented at the workshop suggested that service costs could rise to 4.4% of GDP before stabilizing. Sustained economic growth, at higher than present levels, would be needed before this level of expenditure would become fiscally sustainable.

Given this, the dangers of a "hard landing" and rapid wind-down become apparent: donor support may evaporate while host countries find themselves unable to maintain services to (former) refugees. Some form of transitional support by donors to host governments, linked to the transfer of UNRWA responsibilities, will be essential. There were significant differences of opinion among workshop participants, however, about the level of resources that would likely be available to support any future transformation of UNRWA, including support to host governments for former UNRWA services:

  • Many regional participants felt that the importance of the refugee issue assured that adequate donor support would be available for such future needs, and that as a result a very gradual transfer of responsibilities could be envisaged during which time donors would maintain (or increase) their traditional levels of support for refugee services and compensate host governments for absorbing these.
  • Most external participants, however, pointed to UNRWA's existing funding problems, as well as signs of donor fatigue in the West Bank and Gaza, as warning signs regarding future trends in donor assistance. In this view, while a short-term increase in donor support for refugees might immediately follow a refugee agreement, this would soon be followed by a period of decline. Some participants noted that UNRWA's (less needy) clients already received more per capita than (more needy) refugees elsewhere in the world, that aid budgets were generally stagnant, and that donors would be unenthusiastic about funding social service costs well past a permanent status agreement.
  • Finally, several participants noted that the total resources available to refugees may depend more on Israel's willingness to provide refugee compensation than on funding for UNRWA. If compensation amounts are relatively small, refugees will suffer from a net loss of resources even if donors maintain transitional support for UNRWA services for a lengthy period. Conversely, if compensation amounts are large, refugees will gain net resources irregardless of how rapidly donors wind down support for former UNRWA-provided services.

In discussing future donor support for (former) UNRWA services, it was noted that attention must be paid to the institutional dynamics of donor agencies. Donor budget envelopes are not always fungible or flexible--that is, it may be difficult to reallocate monies currently provided for humanitarian relief by a UN agency (namely UNRWA) to other purposes (such as budget support for host governments). Moreover, in general, donors were more likely to look much more favourably upon development initiatives than recurrent expenditures.

One possible way of easing the transition would be to create a flexible transitional funding mechanism, which would allow donors to transfer resources for a variety of purposes with some assurance of accountability and transparency. The World Bank's Holst Fund for the Palestinian Authority was a model of one such facility, and the Bank is presently developing a "Peace Facility" which would work as a flexible, multi-country, multi-purpose mechanism for channeling donor assistance. Some felt that UNRWA itself could manage such a transitional trust fund, but others thought that donors would be concerned whether the Agency could maintain the appropriate degree of objectivity if it were asked to manage the financial aspects of the transfer of services.

In the absence of a refugee agreement, most participants agreed that the level of donor support per refugee would continue to decline due both to limited donor resources and continued expansion of the refugee population.

Delivery of Service Issues

The workshop examined a number of issues around the current and future delivery of UNRWA services. In doing so, two key questions were asked: what could UNRWA do to alleviate its current financial problems, and what sorts of innovations in service delivery would facilitate the future transformations that the Agency will inevitably face following a refugee agreement.

A number of suggestions were advanced by different participants:

  • Eligibility for UNRWA services should increasingly become needs-based, rather than status-based.
  • UNRWA should increasingly shift its role from one of "service provider" to that of "service manager" and center of excellence. Increasing numbers of UNRWA services should be outsourced, whether to NGOs or host governments, where this is feasible.
  • Further effort should be made to harmonize services and salary scales, so as to reduce current costs and facilitate any future hand-over of programs.
  • Palestinian Authority teachers could be seconded to UNRWA schools. UNRWA should lease-back schools that would be built for the PA, rather than constructing its own facilities.
  • More effort could be made to create synergy and integration between camp-based or refugee-oriented (UNRWA) services, and those (non-camp or non-refugee) services provided by host governments. Scope for this is greatest in the West Bank and Gaza. Duplication of services and facilities should be minimized.
  • UNRWA should focus on its core responsibilities in the health and education sectors. A number of current UNRWA activities--youth centers, microfinance, and so forth--should be transferred to NGOs or other actors. While some thought was given immediately after the Oslo Agreement to shifting some of its service activities to a community base, this impetus since slowed.

In all of these areas, there is a need to be fully aware of the specificities of each refugee-host country relationship. In Lebanon, for example, many refugees are heavily dependant on the social safety net provided by UNRWA, whereas Lebanon itself does not provide a large, well-developed public system of social service supports for its own population. It is also important to recognize the Lebanese government opposition to the integration and local resettlement of Palestinian refugees. This will complicate any future transition.

All participants highlighted the political sensitivity of most of these sorts of initiatives. A smooth transition after a refugee agreement would be facilitated by greater harmonization, transfer of responsibility, and similar measures before an agreement. However, these same measures might be (incorrectly) seen by refugees as signs of impending abandonment by UNRWA and the international community.

In the absence of planned change, however, incremental change was inevitable. Declining levels of per capita support will inevitably mean continued cuts in the extent and quality of UNRWA services. This may lead growing numbers of refugees to avail themselves of services provided by host governments, as has already increasingly occurred in some areas of operation. This muddling-through, transfer-by-attrition strategy may result in a suboptimal allocation of resources and delivery of services. However, it may also be much more politically convenient for donors, host governments, and UNRWA alike.


Role of UN Agencies in Implementing Permanent Status
Substantial discussion during the workshop focused on the role of UNRWA and other UN agencies in supporting the implementation of the various aspects of a future permanent status agreement on the refugee issue. These aspects might include, among others, the repatriation of refugees; the improvement of infrastructure in refugee areas, whether existing camps or in new residential areas; and the administration of a system of refugee compensation or restitution.

Many participants agreed on the great importance of local parties asserting ownership of both coordination structures and implementation processes. This would likely require an enhanced degree of regional cooperation, however, in light of the regional character of the issue. To the extent that local parties proved unwilling or unable to assert ownership of these tasks, however, the international community would likely end up filling the vacuum.

A number of participants felt that UNRWA ought to play a leading role in many of these areas. It was noted that UNRWA has shown itself able to flexibly adapt its mandate to changing circumstances; has a substantial capacity for project implementation; has a large skilled staff with vast experience with the refugee issue, who could be quickly reassigned to address new tasks; has a supply of vehicles, offices, and other important institutional infrastructures; and is structured in such a way as to make it profoundly sensitive to refugee concerns. The organizational structure of UNRWA also permits decisive action to be taken from the top. It was emphasized, however, that it would need to be clear to both the Agency and donors what needed to be done if misunderstandings were to be avoided.

Other participants were more doubtful about UNRWA's ability to take on tasks outside its present mandate and areas of expertise (health, education, small-scale infrastructure). Some argued that past experience suggested that the Agency's ability to flexibly interpret its mandate had been overstated, and that most changes had been incremental. Some suggested that organizational/managerial weaknesses remained within the Agency. It was also noted that UNRWA's freedom of action was potentially limited by its intimate relationship with a highly politicized refugee constituency as well as its status as a UN agency reporting to the General Assembly. Donors might be wary about seeing UNRWA--an agency slated to eventually end with the resolution of the refugee issue--effectively placed in managerial control of its own demise in this way. Moreover, excessive reliance on UNRWA might come at the cost of building institutional capacity within host governments.

Many participants suggested that the tasks required were likely to be beyond the capacities of UNRWA or any other agency. Moreover, NGOs, donors, host governments, and others needed to be brought into the picture.

One possible response to this would be to designate lead agencies in different areas--UNRWA, for example, in some areas, and perhaps UNHCR or UNDP in others--which would then provide direction to broader UN or international task forces. The danger inherant in multiple "leads", however, is that it might serve to accentuate bureaucratic rivals.

Alternatively, an overall coordinator might be designated, such as UNSCO or the World Bank. While UNSCO has the advantage of operating from within the UN family, the World Bank has greater experience with multi-donor coordinator and multilateral program design.

Because neither the parameters of an agreement nor the level of resources available to support implementation will not be fully evident until the last minute, advanced planning is difficult. Such planning is important nonetheless to reduce the risk of a "hard landing" and jarring transition. In addition, it was generally agreed that a number of measures could be undertaken now to facilitate future transitions and the emergence of new roles. These would include:

  • Reinitiating internal discussions within UNRWA, and possibly within the broader UN system, on what tasks might be needed to be undertaken in the wake of a future permanent status agreement on the refugee issue.
  • Staff exchanges between UNRWA and UNHCR, so as to facilitate an exchange between the former agency's expertise with Palestinian refugees and the latter agency's expertise with post-conflict refugee repatriation. A review of UNHCR "lessons learned" could also be useful for UNRWA.
  • Strengthening UNRWA's ability to analyze existing statistical data as well as its ability to engage in other sorts of policy research. More work could be done to cross-check and integrate data from UNRWA, host governments, and other sources (such as FAFO).
  • Researchers outside UNRWA could produce various demographic scenarios which might emerge from a permanent status agreement. These projections could prove useful to UNRWA in its own future contingency planning.
  • There is value in efforts to promote greater dialogue on these issues among refugees, and between refugees and the Agency and donors. This should be done in a way that minimizes the political costs of frankness and promotes an open exchange of innovative ideas.
  • There is a similar need for dialogue among official parties. Existing mechanisms--UNRWA donor meetings, Arab League meetings of host countries--tend to discourage frank discussion. Informal settings which allow for freer thinking might be preferable for such discussions.
  • Overall, there needs to be more forward-looking policy planning by all parties regarding the social and economic implications of a refugee agreement. To date, most such work is rudimentary. The Palestinian Authority in particular should strengthen collaborative work, across ministries and other agencies, planning for future demographic change in the West bank and Gaza Strip. In cases such policy planning is thought to be to be undertaken by official agencies, low-key NGO initiatives, unofficial groups and second track initiatives may be of use.

Workshop Papers

The following short papers were prepared for the workshop:

BADIL, "What Role for UNRWA? Opportunities and Constraints."

Bob Bowker, "The Political Management of Change in UNRWA."

Rex Brynen, "The Future of UNRWA: An Agenda for Policy Research."

Ben Schiff, "UNRWA in Transition."