UN feels budget crunch

Guterres called the crunch the worst cash crisis facing the United Nations in nearly a decade.

The UN annonunced a $1.4 billion shortfall on its operating budget this year, blaming the funding gap on around 60 states that had been late paying their dues (AFP Photo).

UNITED NATIONS (AFP) — Stalled escalators, the heating turned down, even the diplomats’ bar closing early at 5pm: already the UN budget crunch, one of the worst in a decade, is making itself felt in a series of measures announced by the world body on Friday.

“We really have no choice,” said Catherine Pollard, a top official in the UN’s management department. The main priority now is ensuring the next paycheck for the UN’s 37,000 employees.

In a letter to staff, a copy of which was seen by AFP, Secretary General Antonio Guterres laid out the looming cutbacks he said would mean fewer flights and receptions, limits on hiring, fewer documents, reports and translations and even an end to water coolers.

Guterres called the crunch the “worst cash crisis facing the United Nations in nearly a decade.”

He warned the organization “runs the risk of depleting its liquidity reserves by the end of the month and defaulting on payments to staff and vendors.”

The UN announced a $1.4 billion shortfall on its operating budget this year, blaming the funding gap on around 60 states that had been late paying their dues.

Of those, just seven countries made up 90 percent of the deficit: the United States, whose outstanding payments top a billion dollars, Brazil, Argentina, Mexico, Iran, Israel and Venezuela.

Contributions to cover peacekeeping operations — which come out of separate pot — have also suffered from tardy payment. In 2019, France for example owes another $103 million.

For the peacekeeping budget, the US owes another $2.3 billion, according to UN documents. As a consequence, the UN is deferring payments to countries that have contributed troops, with some of the outstanding bills, such as Bangladesh, reaching huge sums.

“When the rich refuse to pay, it’s the poor who cop it,” said one UN official, asking not to be named.

The UN has always faced budget struggles, but these days they are getting bigger, surfacing earlier and lasting for longer, the UN said.

The UN budget runs according to the calendar year, while the US fiscal year is from 1 October to 30 September, and the UN hopes Congress will free up the funds by the end of the year.

The UN budgetary rules do not include any penalty or interest on late payments.