Samya Kullab
Matthias Schmale, Lebanon’s new country director of the U.N. Relief and Works Agency, has a tough few months ahead of him. After a few weeks in office, the agency’s director of finance gave Schmale a sobering reality check: as things stand, if the agency does not attract new funding beyond what is already committed by donors it will run out of cash as early as October.
“We are potentially facing a situation where, in October, we might not be able to pay the salaries of 30,000 or so employees – this is a real threat,” Schmale told The Daily Star.
That UNRWA is chronically underfunded is not new – the agency has been coping with a startling $100 million deficit for a while – but this year marks the first time these fiscal challenges will be felt by the broader Palestinian refugee community as country operations will likely scale back, affecting eminent core programs such as education.
It is likely that extra support programs such as those being provided to Palestine refugees from Syria will be scaled back before core services.
Schmale has stressed that core education and health programs will not be cut.
UNRWA announced this month it would suspend its cash-for-rent assistance to Palestinian refugees from Syria. The program was crucial for refugee families, who now must look to alternative sources of income to pay the fees. “For that bit we’ve simply run out of cash,” Schmale explained.
To mitigate the immediate effects of the crisis, a cost-saving strategy was circulated by the agency’s Commissioner-General Pierre Krahenbuhl to field offices and partners. This includes internal financial management measures, including a general hiring freeze and protecting core positions by decreasing reliance on consultants, and, what will surely be a source of grief for refugees, increasing class sizes to 50 children with the intention of hiring fewer teachers over time.
“For our staff, it’s their jobs on the line,” Schmale said. “We don’t want to fire teachers overnight. We will do it the natural way, but of course I can understand that from the point of view of the refugee community, it means regressing.”
But Schmale also hinted it was time to pressure the Lebanese government to ease up on civil and work restrictions imposed on Palestinian refugees, to in turn ease the pressures on UNRWA to act as a de facto government in terms of service provision to them: “We know that keeping UNRWA alive is a Band-Aid, it can never be anything but a temporary solution.”
In Beirut’s Palestinian refugee camp of Shatila, rumors of how the funding crisis will impact the community, which for over 65 years has come to rely on UNRWA for basic social services such as health and education as well as assistance, have instilled a sense of foreboding.
Maha, a kindergarten school teacher, is concerned.
“Since the suspension [of cash-for-rent] there has been a lot of panic,” she said, her students squealing with recess-time mirth in the background.
“I remember a time when we had enough money to rent homes and eat a proper meal a day but now two to three families are sharing one space,” she lamented. “A lot has changed in the past three years.”
With news about the plan to increase classroom sizes already in their midst, Maha is scared of what this might mean for her and the quality of UNRWA operations in Lebanon. “It’s been going down in steps,” she said. “This is the first time the people are starting to think it could end altogether.”
A variety of factors are to blame for UNRWA’s financial quandary. Paradoxically, aid coming in from the agency’s top 20 donors has been steadily increasing, but not fast enough to keep up with dramatically rising costs of operating in Lebanon. Many of UNRWA’s schools and clinics, for example, are properties rented according to commercial agreements.
Schmale also said medical costs were “astronomical,” for the agency, especially in Lebanon, where Palestinians are not covered by social insurance.
But the volatile global economy also played a part in UNRWA’s pecuniary issues. Because most of UNRWA’s contributions are donated in euros, the agency lost, within the space of a few weeks, $25 million purely through currency devaluation. “That is happening across the humanitarian sector. But of course, most of the sector works from a project-to-project basis so there is some flexibility, but we are running 67 schools and 27 health centers, so we were hit hard,” Schmale said.
To bridge the cash-flow gap by November to the end of 2015, UNRWA will need to attract an additional $40-50 million in donor funds.
There does not appear to be disinterest in the Palestinian cause from the perspective of diplomats, the country director added, but with the unprecedented number of crises requiring emergency assistance in the region, donor countries are also facing dilemmas.
As dire as UNRWA’s financial crisis is, its decision to go public about it was also, as Schmale acknowledged, meant to elicit a reaction from the international community.
At the moment, Palestinians appear to be the ones making the most noise.
“UNRWA took this first step to see the reaction of the people,” said Mohamed Hassan, a representative of the Najdeh Association in Shatila camp who has participated in four protests since the decision was taken.
“Therefore our reaction should be powerful. This isn’t the first cut and it won’t be the last.”
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