New York: A severe cash shortfall is forcing the United Nations to slash spending and freeze hiring, jeopardizing its ability to deliver on mandated programs and exposing the organization to growing reputational risk, the Fifth Committee (Administrative and Budgetary) heard today, as Member States explored potential solutions to the liquidity crisis.
According to EMM, among the proposed remedies under discussion is a revision to the long-standing rule requiring unspent funds at year-end to be returned to Member States as credits. The UN regular budget operates on a calendar-year basis. When Member States make their assessed payments late in the year-especially in November or December-the organization has very little time to use those funds. As a result, much of the money remains unspent by year’s end, with opportunities being lost to implement planned activities and deliver results within the budget year.
Each delay in payment, each hiring freeze, each canceled interpretation service chips away at the trust
in the UN’s ability to uphold decisions, Switzerland’s representative warned, speaking also for Liechtenstein. The issue extends beyond budgetary concerns to questions of credibility.
The United Kingdom emphasized the importance of harmonizing practices for credit returns and clarifying criteria for special commitments to address the impact of late contributions. The need for constructive engagement and a focus on sustainable solutions was highlighted to ensure the UN’s mandate delivery.
Kazakhstan’s delegate underscored that financial discipline transcends accounting, impacting the UN’s credibility and mandate implementation. Norway proposed several measures to provide the UN Secretariat with the flexibility it needs but noted that the underlying cause of the liquidity crisis would remain if Member States do not pay in full and on time.
The Russian Federation stressed that any discussion of additional budgetary instruments cannot replace the fundamental responsibility of all Member States to pay their con
tributions in full. Transparency in cash-saving measures was called for, with a particular emphasis on consultation with Member States.
The European Union, as an observer, highlighted the serious implications of the $2.4 billion in unpaid regular budget assessments and a $2.7 billion cash shortfall in peacekeeping operations. The Union called for measures to minimize the impact of late or non-payments without overburdening those that consistently fulfill their financial obligations.
Singapore, representing ASEAN, expressed regret over the UN’s chronic liquidity problem, pointing out that the organization is forced to operate at 83% of its approved budget. The Economic and Social Commission for Asia and the Pacific has had to implement strict liquidity mitigation measures, including building closures and travel restrictions.
Iraq, speaking for the Group of 77 and China, highlighted that one Member State is responsible for over half of all unpaid assessments, raising concerns about political motivations behi
nd the withholding of funds.
Catherine Pollard, UN Management Chief, reported updates on Member States’ payments since the 9 May briefing. Djibouti and Mali have paid in full for the regular budget, with a total of 106 Member States having done so. For peacekeeping operations, Djibouti and Egypt have completed their payments, bringing the total to 67. Payments have also been received from several other countries for different categories.