Budget crisis hits United Nations; members' payment due

World

12 Oct 2019

UN faces severe cash crisis, shuts ACs, escalators, empties water-coolers

The United Nations is facing a cash crisis, forcing the international body to make severe budget cuts.

Reportedly, the UN is opting to turn down heating/ACs, stall escalators, close the diplomats' bar early at 5 pm and has warned that staff salaries may be at risk the next month.

The financial crisis comes as 65 member nations owe $1.386 billion to the UN.

Details

Money-saving measures at UN effective October 14

Money-saving measures at UN effective October 14

According to Agence France-Presse, United Nations Secretary-General Antonio Guterres detailed the cash crisis in a letter to staff.

Starting Monday, Guterres said, the UN will cut back on flights, hiring, stop running water coolers, etc.

"We really have no choice," said Catherine Pollard, the Under-Secretary-General for Management Strategy, Policy, and Compliance.

Ensuring next month's paychecks to 37,000 employees is the UN's top priority.

Worst cash crisis in nearly a decade: Guterres

Guterres called the situation the "worst cash crisis facing the United Nations in nearly a decade." He also warned staff that the UN "runs the risk of depleting its liquidity reserves by the end of the month and defaulting on payments to staff and vendors."

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Reason

65 nations defaulted payments; US owes $1 billion

Reportedly, 65 nations have defaulted on their funding to the UN, leaving the world body's operating budget short by $1.386 billion this year.

Out of the 65 nations, the biggest seven defaulters- United States, Brazil, Argentina, Mexico, Iran, Israel, and Venezuela- alone are responsible for the 90% deficit.

UN's largest donor, the United States, is also the largest debtor, owing $1.055 billion.

But, US President Donald Trump dismissed UN's concerns

India among 35 UN members to have cleared full dues

Meanwhile, as of October 4, 128 of 193 UN member states paid $1.99 billion in dues for 2019's operating budget. India's Ambassador and Permanent Representative to the UN, Syed Akbaruddin, confirmed that India was among the 35 members to have paid dues in full.

Quote

Each year, situation becomes more dire: Pollard

Each year, situation becomes more dire: Pollard

Notably, Pollard said on Friday, "The regular budget has been facing severe liquidity issues in recent years, with a growing downward trend whereby, each year, the situation becomes more dire."

She added that the UN has only received 70% of the total amount assessed, as opposed to 78% received at the same time last year, "resulting in a gap of $230 million."

Additionally, US owes $2.3 billion for UN's peacekeeping operations

For UN's peacekeeping operations, recorded in a separate ledger, the US owes $2.3 billion, AFP reported citing UN documents. Consequently, the UN is also delaying payments to countries that have contributed troops to its peacekeeping operations, including the second-largest troop-contributing nation Bangladesh.

History

US often delays payments this time of year

The UN has always struggled with finances, considering its budget runs as per the calendar year while in the US, which contributes 22% to UN's operating budget, the fiscal year begins from October 1.

The US often gets late with payments this time of year, however, a US official assured that the country will clear up a "vast majority" of its debt by November-end.

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Antonio Guterres

Budget

United Nations

United States

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AFP

Agence France-Presse

Catherine Pollard

Management Strategy

Permanent Representative

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