UN Refugee Agency Faces Existential Crisis as US Funding Collapse and Internal Reforms Clash

Key points

• UNHCR has lost over 8,000 staff since 2024, closed 140 offices, and received less than one-third of its required 2026 funding.
• US contributions to UNHCR have dropped from 40-45% to approximately 20% since the second Trump administration took office in January 2025.
• The US State Department abolished the Bureau for Population, Refugees and Migration, replacing it with an 'Office of Remigration' focused on deporting asylum seekers.
• Salih appointed Tressa Rae Finerty as deputy chief, rejecting a US nominee, leading to a diplomatic standoff where Finerty was placed on administrative leave.
• Salih proposed a '50/35 initiative' to halve the number of refugees in long-term displacement by 2035 through increased self-reliance in host countries.

Background

UNHCR was founded 75 years ago following World War II to protect people fleeing persecution. Historically, the US was its largest donor and diplomatic ally. The agency has continuously expanded its operations, but this trajectory has recently halted due to global funding diversions toward defense and domestic expenditures. Previous efforts to resolve protracted refugee situations have had limited success, leading to the current push for more agile, technology-driven operations.

How outlets are covering it

PassBlue emphasizes the structural fragility of UNHCR, highlighting the 'unprecedented weakness' caused by the US dismantling the 1951 Refugee Convention and the competitive threat from the International Organization for Migration (IOM), which is now involved in US third-country deportations. It notes that Salih’s management style and internal restructuring are straining staff morale. UN News focuses on the human impact of these cuts, with Salih warning that 'efficiency has limits' and that the agency is being asked to do the impossible. UN News details specific service failures in Sudan, Chad, and Ethiopia, where medical care, child protection, and refugee registration are halting. While PassBlue frames the crisis as a result of US political hostility and internal mismanagement, UN News frames it as a humanitarian emergency where reduced resources directly endanger vulnerable populations, including women, children, and persons with disabilities.

Why it matters

The collapse of UNHCR’s funding and operational capacity threatens the global refugee protection system, potentially leaving millions without legal assistance, medical care, or basic survival support. The US withdrawal from the 1951 Refugee Convention and the abolition of its resettlement program undermine international norms of asylum and responsibility-sharing. If the '50/35 initiative' fails to reduce long-term dependency, the burden on host countries in the global South will increase, potentially fueling further migration to the West and exacerbating global political tensions.

What to watch

Salih will present the '50/35 initiative' to the UNHCR Executive Committee on October 12, seeking support for a plan to reduce refugee dependency by 2035. The agency will continue to navigate funding shortages and internal restructuring, including a relocation to a smaller Geneva headquarters. Diplomatic tensions with the US may persist, with the possibility of complete defunding by Washington still looming. The success of the initiative will depend on whether host countries accept increased responsibility for refugees and whether the agency can implement self-reliance programs without compromising protection standards.