The World of International Organizations Explained

United Nations faces severe cash shortage

U.N. headquarters in New York (ARÊTE/Julien Chatelain)

The United Nations could run out of money by the end of this month in the worst budget crisis that the world body has faced in at least a decade, U.N. Secretary-General António Guterres warned member nations on Tuesday.

Introducing the U.N.’s proposed programmatic $2.87 billion budget for 2020, Guterres said the United Nations runs the risk of depleting its liquidity reserves by the end of the month and defaulting on payments to staff and vendors.

Just 129 of the U.N.’s 193 member nations have paid their currently owed dues, he told the U.N.’s budget-writing Fifth Committee, and receiving dues from the remaining 64 member nations is the only way to avoid a default that could risk disrupting operations globally.

“The organization is facing a severe financial crisis. To be more specific, a severe liquidity crisis. The equation is simple: Without cash, the budget cannot be properly implemented,” he told the committee. “In the current biennium, budget implementation is no longer being driven by program planning but by the availability of cash at hand.”

The cash crisis affects hiring decisions, he said, undercutting the world body’s effectiveness. “This month we will reach the deepest deficit of the decade,” he said. “Our work and our reforms are at risk.”

In a separate letter to the diplomatic community, Guterres said the financial uncertainty represents “a liquidity crisis that is worse than any the organization has confronted in at least a decade” and threatens the U.N.’s ability to fully implement the mandates placed upon it by member nations.

Guterres said the United Nations has received just $1.99 billion of the $2.849 billion it was owed by member nations in January, but its real needs for 2019 are higher because of additional demands and delayed expenses from the previous year.

The United States contributes the largest share, 22 percent, towards the budget. But the U.S. government owes $674 million for the 2019 regular budget and $381 million for previous regular budgets, according to U.N. figures.

The U.S. government, refusing to put American troops under U.N. command, also contributes none of the more than 100,000 U.N. peacekeeping troops and police deployed in 14 operations around the world.

The top 10 contributors of troops and police are Ethiopia (7,051), Bangladesh (6,049), Rwanda (6,348), India (6,173), Nepal (5,668) and Pakistan (5,062), Egypt (3,023), Indonesia (2,905), Ghana (2,786) and Senegal (2,643), according to U.N. figures as of the end of August.

Recurring budget problems

The U.N.’s member nations are 70 percent paid up this year, compared with 78 percent at the same time last year. The U.N.’s operating budget, not including peacekeeping operations, is about $5.4 billion.

The U.N.’s secretariat has been grappling with how to deal with these all-too-common budget shortfalls, such as aligning expenditures with cash inflows and adjusting hiring and other non-post expenses based on expected cash availability.

Such measures are no longer enough, however, according to a statement from Guterres’ spokesman, Stéphane Dujarric.

“The secretariat could face a default on salaries and payments for goods and services by the end of November unless more member states pay their budget dues in full,” Dujarric said in the statement, which noted that this is “a recurrent problem that severely hampers the secretariat’s ability to fulfill its obligations to the people we serve.”

Republican President Donald Trump’s administration has made no secret of its enmity for the United Nations and other international organizations, severing ties to various U.N. bodies and treaties and announcing plans to reduce its U.N. contributions by hundreds of millions of dollars.

But to remain a U.N. member in good standing, member nations must pay the assessments set by the U.N. General Assembly, based on advice from its Committee on Contributions. The top 20 contributors pay 84 percent of the U.N.’s budget, while the other 173 countries contribute the other 16 percent.

Much of the second half of the late former U.N. secretary-general Kofi Annan’s tenure at the helm of the world body from January 1997 to December 2006 was consumed trying to press the United States, then under Republican President George W. Bush’s administration, into paying almost $2 billion in arrears.

The world of international organizations explained.

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