In a highly unusual letter sent to thousands of UN staffers, Secretary General Antonio Guterres warned of an impending budget shortfall facing the United Nations.

“To date, Member States have paid only 70 per cent of the total amount needed for our regular budget operations in 2019.” he wrote in an email on Monday evening and viewed by UN Dispatch. “This translates into a cash shortage of $230 million at the end of September.  We run the risk of depleting our backup liquidity reserves by the end of the month,” he added.

Guterres told staff that he was working with management at the UN to implement cost saving measures so the direct impact on staff would be limited.  “Managers will be asked to explore avenues to further limit expenses during the last quarter, including postponing conferences and meetings or seeking ways to reduce related expenses by adjusting services,  I am also directing them to limit all official travel to the most essential activities and to further reduce all other non-post expenses.” he wrote. “This includes postponing purchases of goods and services, implementing energy saving and other measures to reduce utility bills and temporarily curtailing expenses on managing facilities.”

At issue is that key UN member states have not paid their UN dues on time and in full

The United Nations regular budget is funded through membership dues from UN member states. Wealthier countries pay a greater share of these assessed contributions and poorer countries pay less, all based on a formula negotiated by member states every few years.  In all, 129 out of 193 member states have paid their 2019 assessments in full collecting $1.99 billion, the Secretary General’s spokesperson told reporters today. But $1.3 billion is still outstanding. That gap is impacting the UN’s day-to-day work. “We are now driven to prioritize our work on the basis of the availability of cash undermining mandate implementation,” said UN Spokesperson Stephane Dujarric.

The budget gap is largely driven by the United States and Brazil. The United States owes $1.05 billion in total, including $674m of the 2019 assessment. Brazil owes a total of $140 million. (All other major contributors have paid their dues for the year.)

The United States typically pays the bulk of its annual member dues at the end of the year, owing to the budget process in Washington, D.C. The United Nations has historically been able to ride out this end-of-year squeeze, but it is unable to do so this year. This is partly due to Brazil’s non-payment and to the fact that the United States has accumulated deep in arrears to the regular UN budget. Congress has mandated that the US withhold 15% of its payments to the UN until the State Department certifies that the UN has taken certain steps on whistleblower protection. This is in the process of being done, a budget expert tells me, and the UN expects some $90 million of arrears from 2018 to be paid.

But for now, the crunch is being felt by the UN.

In his email to staff, Antonio Guterres suggests the UN can make payroll and staff will not be directly impacted for the moment.  Still, unless member states pay their dues on time and in full, much of the UN’s work around the world may slow down significantly.

This should deeply concern UN member states. The Secretary General and the his staff do not set the UN’s budget; nor do they create their own mandates and missions around the world.  Rather, it is the UN member states that both set the UN’s budget and direct the UN’s work.

By not paying the UN to do the work being asking of it, member states are leaving the UN in an extremely difficult position. UN member states (including a veto-holding member of the Security Council) are asking the United Nations to take on more and more tasks around the world but they are not providing the promised resources to get the job done.

 

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