The United Nations High Commissioner for Refugees is facing the largest refugee crisis since its inception. The agency, which was created to respond to the overwhelming number of refugees after World War II, has seen its mandate expand while its resources have stayed flat. A funding reform that gives the agency the autonomy and ability it needs to deal with intense difficulties could not come at a more important moment.
We propose reform that would feature the creation of a crisis fund, limiting earmarking by donors and a no-refund policy on donated funds.
When the UNHCR, as it is abbreviated, was created in 1950, its mandate assumed provision of international protection to refugees and securing lasting solutions to their settlement. Global instability and international crises have forced the expansion of the agency’s mandate and the spectrum of services it provides to refugees. Displaced persons, stateless persons and asylum-seekers were added as new categories of populations in distress, geography expanded and legal restrictions for resettlement have become more rigid.
Historically, the agency’s budget has been almost entirely dependent on voluntary contributions. The UN general budget provides only 2 percent to UNHCR’s budget, covering administrative costs. The other 98 percent of its annual budget, which exceeds $1 billion, comes from donor countries. That figure must be raised annually through a global appeal. To become more effective, UNHCR needs a funding scheme that provides leeway to deal with crises without worrying about financing stipulations. The three-pronged approach we recommend that UNHCR take can alleviate these pressures.
Because of the very nature of the agency’s work, establishing a fund to be used specifically to respond to a new crisis or rising developments from a current crisis could make its operations more autonomous. Currently, 80 percent of all the agency’s funds are earmarked for certain programs, causes or countries. As a result, the agency lacks the flexibility to actually deal with crises or emerging situations. While donor countries should be allowed to contribute funding where they like, 25 percent of any donated amount could go to the newly created crisis fund.
When making contributions, donors often pursue their own agendas and use their contributions to flex their political will. Germany, for example, earmarked 75 million euros, or about $89 million, in 2015 for “refugee camps operated by the UN in and near Syria.”
Earmarking challenges UNHCR’s efficiency, since it must stay on good terms with the donor states to maintain funding for the next year. Earmarking can also be wasteful because designated funds can cost more to manage than the contribution itself.
According to the UNHCR’s Use of Unearmarked Funding in 2015 Report, only 15 percent of voluntary contributions received that year as well as 46 percent of contributions from the private sector were not earmarked. The report says that earmarked money is used for emergency responses, underfinanced operations and as additional funding to allow for unexpected project expansion.
Donors have been allowed to recall their donations when their contributions are not used by a certain deadline. This creates more headaches for the agency and goes against the nature of its work. The agency is mandated to provide assistance to refugees; therefore, any funds that it receives should be distributed among the projects that support refugees, regardless of preferences or an arbitrary timeline set by the donor.
Carrying out our recommendations for creating a crisis fund should be done through the agency’s annual global appeal, which occurs every December. In the appeal, the UNHCR could specify that a crisis budget will serve as an emergency response fund to address refugee needs that were not accounted for because of unforeseen circumstances.
With the global refugee crisis growing by the day, the UN refugee agency operates in a precarious position. But António Guterres, a former UNHCR commissioner and now the UN secretary-general, can help revitalize the refugee agency, which is now led by an Italian, Filippo Grandi.
Guterres is often described as a refugee champion who worked tirelessly to advocate for the needs of people fleeing their homes amid conflicts. His new position, combined with his experience with this population, gives him the advantage of identifying priorities in the refugee crisis and guiding the agency to address them adequately. At the Solidarity Summit on Refugees, held in Uganda in June, both Grandi and Guterres discussed how to reform the UNHCR so it can better meet the growing demand in supporting uprooted populations and the countries that are taking them in.
The refugee agency has changed its scope to better cope with the changes in refugee needs. The funding issue has been an unfortunate issue for UNHCR, but through reform, it can achieve the autonomy and stability it must require to stay on top of the refugee problem.