UN may run out of funds by month-end, warns Guterres

UN Secretary General Antonio Guterres has warned that the world organisation is facing its “worst financial crisis in a decade” and could run out of funds to pay salaries and payments to others by next month, his Spokesperson Stephane Dujarric said on Tuesday.

With only 129 of the 193 members paying their dues as of Tuesday, the UN faces the risk of becoming a defaulter, he told reporters.

Money has been slower trickling in.

This year, 70 per cent of the member nations had paid their dues so far compared to 78 per cent for the comparable period last year, Dujarric said.

India paid up its $23.25 million dues for the regular budget on January 30 itself, one of the few countries to pay up on time, according to UN data.

According to the UN, the outstanding amount of contributions for 2019 for regular budget is $1.386 billion.

Guterres said the only way the UN to avoid disruption in its work is for member states in arrears to immediately send their assessments, according to Dujarric.

The UN”s regular budget for the year is $5.4 billion and it is separate from the peace-keeping budget of $6.5 billion. The contributions from each country is set by the General Assembly based on a complex formula that takes into account the wealth of nations.

Under the formula, the US is the top contributor, followed by China.

If the UN had not already taken steps to curtail expenses, the deficit would have been $600 million and it could have been left with no money to hold the General Assembly”s high-level meeting last month, he said.

If the funds don”t flow in this month from more of the nations in arrears, the UN will likely continue its operations by dipping into its working capital fund temporarily, but from Guterres”s warning, it seems a stretch.

One of the reasons for the shortfall is the United States, which funds 22 per cent of the UN”s regular budget amounting $674 million, not having paid up in full.

According to the UN, it is one of 64 countries that are in arrears.

The US has a different budget period that ends in September, which influences when it pays its dues, and it usually pays up later in the year.

Dujarric refused to answer questions specifically about the US, telling reporters to see the information publicly available.

Because members do not send in their dues at the beginning of the year and the funds trickle in, the UN faces periodic budget crises.

Guterres has asked the member countries to take action to avoid the recurring problems with financial deficits, Dijarric said.

In May as warning signs emerged, Guterres had warned the General Assembly”s budget committee: “We are at a tipping point and what we do next will matter for years to come.”

“Despite numerous efforts to contain expenditures this year, we are likely to run out of cash in August and, therefore, borrow from the Working Capital Fund,” he had warned, but the UN managed to coast along till now.

The financial crunch hit the UN last year also. Guterres wrote to member countries in July last year, that “an organization such as ours should not have to suffer repeated brushes with bankruptcy.”

The UN has a separate budget for peace-keeping operations, which also operates consistently in a deficit mode.

As India”s Permanent Representative Syed Akbaruddin has repeatedly pointed out, this affects the countries contributing troops to UN peacekeeping operations that are owed millions.

While India can absorb the delays, it can badly hurt smaller countries like Nepal and Rwanda.

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