UNITED NATIONS — U.N. Secretary-General António Guterres has written to member states following what he described as record-low annual contributions, marking a “troubling financial situation facing the United Nations.”
“Caused primarily by the delayed contributions of member states to the regular budget, this new cash shortfall is unlike those we have experienced previously,” Guterres wrote in the letter dated July 25, seen by Devex. “Our cash flow has never been this low so early in the calendar year, and the broader trend is also concerning: We are running out of cash sooner and staying in the red longer.”
A new system of in-country, independent U.N. resident coordinators is set to launch in January, but funding to support the system still needs to be worked out, experts say.
The delay in payment is already resulting in a rethinking of how work can be conducted with less funding, Guterres wrote.
“For our part, we will need to take measures to reduce expenses, with a focus on non-staff costs. I will ask the Department of Management to work with the various departments and offices on ways to reduce our expenditure without affecting the delivery of the mandates,” he wrote. “I will also be proposing to member states various steps to fortify the Working Capital Fund and the Special Account, which are the key mechanisms for financial stability.”
Just 112 member states out of 193 have paid their regular budgets to the U.N. in full as of last week, Guterres’ office said in a memo to journalists.
In June 2017, member states had paid more than $1.7 billion toward the U.N.’s regular budget to support work in justice, humanitarian affairs, and other areas of work in 2018. Peacekeeping is funded separately.
The budget for 2018-2019 was approved at $5.397 billion — $286 million, or 5 percent, greater than the approved budget for 2016-2017. The budget that member states agreed to was $193 million less than the secretary-general’s initial ask, reflecting in part, the greater humanitarian needs emanating from places such as Yemen.
The U.N. is now more than $809 million short of where it expected to be by this time in the 2018-2019 budget period.
“The United Nations fully understands that some Member States have different fiscal years. However, unlike those that we have had in previous years, the cash flow has never been this low so early in the calendar year,” the secretary-general’s spokesperson wrote in a separate note sent to journalists.
The United States — traditionally the largest single donor to the U.N., contributing 22 percent — is among the 81 states that have yet to pay their regular budget dues. While it typically pays dues later in the calendar year, the Trump administration has also called for cuts to and a reform of the U.N.
Argentina, Brazil, Iran, Israel, Jordan, Kenya, Pakistan, Japan, and Saudi Arabia are also on the list of 81 states that have yet to deliver on their funding, based on an agreed upon percentage of a country’s wealth.
China, Sweden, Canada, Denmark, Rwanda, and Australia are among the nations that have contributed their pledged amount in full, ranging from about $48,000 to $192 million.