The UNRWA Commissioner-General has warned that the "worst financial crisis" in the history of the United Nations Relief and Works Agency for Palestine Refugees in the Near East (UNRWA) may lead to a "disaster" in the Gaza Strip and increase "instability" in Lebanon.

Founded in 1949, UNRWA runs schools and provides health services and financial aid to 5.7 million Palestine refugees.

The agency’s commissioner-general, Philip Lazzarini, announced last week a funding shortfall of $70 million, which puts its ability to pay employees' salaries in full in November and December in jeopordy. 

The funding shortfall affects 28,000 employees, most of them refugees, in the occupied West Bank and East Jerusalem, the Gaza Strip, Lebanon and Jordan.

However, several factors make the situation more dangerous in the Gaza Strip, which is home to more than two million people. Unemployment rates in Gaza have reached more than 50 percent, and the authorities have reduced the salaries of employees in the public sector due to coronavirus.

Lazzarini confirmed to Agence France-Presse Sunday that "it is not in anyone's interest to suspend schools (...) and disrupt health services (in Gaza), at a time when people are afflicted with the epidemic."

"It would be a complete disaster," he added.

- 'Lack of stability' -

UNRWA is the second employer in the Gaza Strip, which is run by the Hamas movement, after the local authorities, with about 13,000 people working with it. "These residents depend completely on international aid," Lazarini said, warning that suspending the agency's programs could have a "devastating" economic and security impact.

The UNRWA Commissioner-General expressed his fear that "the same thing will easily be repeated with the Palestinian refugees in Lebanon."

More than 200,000 Palestinian refugees reside in Lebanon, and according to the Commissioner-General, their right to work and own property is restricted.

Lebanon is facing the worst economic crisis since the civil war (1975-1990), and high rates of poverty and unemployment.

Lazzarini said that the situation is "terrifying" across the country, but it is worse among Palestinian refugees, especially as 80 to 90 percent of them depend on the agency for aid.

Lazzarini warned that the suspension of the Agency's aid programs in Lebanon could be "a new source of instability."

"We are at a time when people are expecting UNRWA to do more," Lazzarini said, "but at this time it is facing the worst financial crisis in its history."

Lazzarini was appointed to the post in March, after his predecessor was forced to resign late last year over mismanagement accusations that prompted major donors to cut support.

The agency's financial problems were exacerbated after US President Donald Trump cut off the United States' contribution to UNRWA entirely in 2018.

Before that, Washington provided more than $ 300 million annually, roughly a third of the agency's core annual budget.

Last year, about 40 countries managed to bridge the gap, before contributions dwindled later, especially after the spread of the coronavirus, which caused financial losses to donor countries.

Some Palestinians and humanitarian workers are pinning their hopes on US President-elect Joe Biden to re-inject the money into UNRWA's coffers.

The Commissioner-General of UNRWA affirmed that "all messages indicate that there will be a desire to restore the long-term partnership between the US administration and UNRWA."

But there is a need to discuss how and when this might translate into concrete actions, once the next US administration takes over.

Until January, the agency will try to persuade exhausted donors to cover the shortfall until the end of this year.