As UN cash crisis worsens, Guterres introduces 'extraordinary measures'

UNITED NATIONS — The United Nations’ deteriorating cash crisis is stealing focus from program planning, U.N. Secretary-General António Guterres said on Tuesday.

“Without cash, the budget cannot be properly implemented. For the current biannual, budget implementation is no longer being driven by program planning but by the availability of cash at hand,” Guterres told member states at a briefing on the U.N. budget.

Of 193 members state, 129 have paid their annual contributions to the U.N., totaling $1.99 billion, or 70% of the U.N. Secretariat’s 2019 budget. That leaves an outstanding amount of $1.3 billion for the year.

Now, the Secretariat might not have enough funding by the end of November to compensate staff and make other payments for goods and services, U.N. spokesperson Stéphane Dujarric said in a statement released on Tuesday.

“It will have an impact on the work of the organization throughout, because of instead focusing on our priorities, we are focused on the cash. It is not good for the U.N. and those people it supports,” Dujarric said during a Tuesday afternoon press briefing at the U.N.

Delayed member state contributions are not a new problem for the Secretariat. In 2018, Guterres wrote to member states following what he described as record-low annual contributions. But the trends are worsening, according to Dujarric. Last year at this time, member states had already funded 78% of the U.N.’s budget for the year. But in January, the U.N. was still short more than $528 million for its 2018 budget.

The United States, the largest contributor to the U.N., making up about 22% of its annual budget, has not yet paid any of its required dues.

“We fully realize that some countries work on different budget cycles and traditionally pay later in the year. What we are seeing as the trend this year is more and more countries are paying much later in the year, which has aggravated the cash crisis,” Dujarric said. “The SG’s message to all countries is that they have an obligation under the U.N. charter to pay their dues to the United Nations and all should do it.”

The cash crisis — which Guterres called the U.N.’s “deepest deficit of the decade” — has varied impacts for Secretariat employees, programs, and beneficiaries. Some U.N. agencies receive funding from the Secretariat, but others, such as the U.N. Children’s Fund, are backed entirely by voluntary contributions from governments, corporations, and private donors.

“Last week, I was forced to introduce extraordinary measures to cope with the record-level shortage of cash,” Guterres told member states.

First, official travel for Secretariat staff is now restricted “to the most essential trips only,” U.N. spokesperson Farhan Haq told Devex in an email. All purchases of goods and services — which could extend into areas of humanitarian work covered by the Secretariat — will be reviewed and postponed if possible.

Events scheduled outside official business hours at U.N. headquarters duty stations and regional commissions in New York, Geneva, Vienna, and Nairobi will not be held. And conferences and events in the next few months will be reviewed and postponed if possible, as well, according to Haq.

“As for areas that could be affected in the future if money is not forthcoming, the impact would primarily be felt in salaries and entitlements, by slowing down hiring. Departments have postponed non-post expenses so far but is becoming increasingly untenable to do this,” Haq wrote.

The funding shortfall was not entirely unexpected. Guterres already put in place different cash-saving measures, such as adjusting hiring and other expenses, since the beginning of the year, he said. This prevented a more extensive cash shortfall that could have prevented the opening of the General Assembly debates and other high-level meetings, including the Climate Action Summit, last month, Guterres said during a Tuesday morning budget meeting at the U.N.

U.S. ambassador Cherith Norman Chalet told member states during the budget meeting that the U.S. takes the U.N.’s fiscal situation “seriously.” João Vale de Almeida, European Union ambassador to the U.N., remarked that the “brightest minds of the Secretariat should be focused on reform and mandate delivery, not on liquidity management and daily cash survival.”

Guterres presented the 2020 budget to member states on Tuesday. He said it will require $2.94 billion, which marks no increase compared to this year’s budget, despite some new initiatives and activities.

“Many will find this as a symbolic number if you compare it with the whole amount of the budget. I wanted to give a very clear signal about our priority in development … for technical cooperation with member states’ projects,” Guterres said. “This is the orientation I would like to expand in the work of the Secretariat. More and more concerned with development, and more and more concerned with supporting member states themselves in their projects.”