UN Chief: UN ‘Running Out of Cash'

By Patrick Goodenough | July 30, 2018 | 4:15am EDT
The United Nations headquarters in New York. (Photo: U.S. Mission New York)

(CNSNews.com) – With two of out every five member-states of the United Nations not yet having paid their dues for 2018, the world body says it has never been so far behind in receiving contributions by this time of the year, and officials are looking for belt-tightening options.

Among the 81 countries yet to pay, by far the biggest amount due is the United States’ contribution of $591.3 million, which comprises 22 percent of the total regular budget for 2018.

Next up are Brazil ($102.7 million, or 3.8 percent of the budget), Saudi Arabia ($30.8 million, 1.14 percent) and Argentina ($23.9 million, 0.89 percent).

The U.N. asks member-states by pay by early February of each year, but as of July 25, only 112 of the 193 had done so. Together, the contributions from those 112 countries amounted to $1.67 billion. The total U.N. regular budget for 2018 is $2.69 billion.

U.N. Secretary-General António Guterres told U.N. staff in a letter that he has written to the member-states about “the 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,” he said. “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.”

Guterres wrote that he has “appealed to member-states to pay their assessments on time and in full, and highlighted the risk the current situation poses to the delivery of mandates and to the reputation of our organization.”

At a press briefing in New York, Guterres’ spokesman Stéphane Dujarric said the U.N. secretariat understands that some member-states use different fiscal timetables, but that it would be “ideal” if all paid by the end of January each year.

Given the fact the U.S. taxpayers’ 22 percent contribution dwarfs those of others, the unpaid U.S. dues account for a large proportion of the overall shortfall.

But the U.S. customarily pays late in the year. Asked why the U.N. does not adjust to take that factor into account, Dujarric said it was “not a surprise” to have a shortfall, and likened the situation to a drought.

“The money, to speak bluntly, trickles in, and we've always worked around that because we’ve always planned for that,” he said. “But this year, the drought is coming earlier and harder than it has in previous years.”

Dujarric said the U.N. does not have the type of financial flexibility that governments do, and relies on members to pay in full and on time.

The secretariat would now be looking into ways to reduce “non-staff costs, in order to help with this situation.”

“We're not trying to show alarm,” he said. “We look at anything from travel to office supplies, things that we can – in terms of cost saving, things we can have an immediate, immediate control over.”

‘Inefficiency and overspending’

The U.N. General Assembly late last year approved a regular budget for the 2018-2019 period of $5.396 billion (roughly $2.698 billion for each of the two years), following negotiations that resulted in reductions of more than $285 million.

The Trump administration claimed credit for the cuts, with Ambassador to the U.N. Nikki Haley saying afterwards that the U.S. will “continue to look at ways to increase the U.N.’s efficiency‎ while protecting our interests.”

“The inefficiency and overspending of the United Nations are well known,” she said. “We will no longer let the generosity of the American people be taken advantage of or remain unchecked. This historic reduction in spending – in addition to many other moves toward a more efficient and accountable U.N. – is a big step in the right direction.”

The 193 member-states’ contributions are assessed according to their relative “capacity to pay,” based on population size and gross national income.

The ceiling for the scale of assessments is 22 percent while the bottom level is 0.001 percent, which this year works out at $26,881. Thirty-one countries, the world’s poorest, are expected to pay that in 2018.

After the U.S. contribution of 22 percent, the next biggest comes from Japan (9.6 percent), followed by China (7.9 percent), Germany (6.3 percent), France (4.8 percent) and Britain (4.4 percent).

Japan and Germany, despite being the second- and fourth-largest contributors, are not permanent members of the Security Council. Russia, which is, contributes just 3.08 percent.

Apart from the “assessed contributions” that cover the regular budget, American taxpayers also provide billions of dollars more each year in “voluntary contributions,” which help to fund U.N. agencies and programs like the World Food Program and the International Atomic Energy Agency (IAEA).

In addition, the U.S. contributes almost 28.5 percent of the separate U.N. peacekeeping budget, which is based on its own scale of assessments.

Earlier this month the General Assembly adopted a peacekeeping budget for the 12-month period beginning July 1 of $6.69 billion – down 8.36 percent from the previous year's $7.3 billion.

In the most recent year for which the State Department has provided figures, fiscal year 2016, U.S. taxpayers accounted for a grand total of $10.48 billion in assessed and voluntary contributions to international organizations.

The biggest single contributions that year went to the United Nations High Commissioner for Refugees ($1.508 billion), World Food Program ($1.393 billion), the U.N. regular budget ($659.4 million), NATO ($538.8 million), United Nations Children's Fund ($514.2 million) and International Organization for Migration ($477.2 million).

MRC Store