The United Nations is facing a serious financial crisis due to delays in payments from the United States and China, the two largest donors, which account for about 42% of the organisation’s base budget. This is reported by The Wall Street Journal.
According to the publication, the US owes the UN more than four billion dollars and at the same time reduced participation in a number of programmes, including the World Health Organization. China, despite a recent payment of $850 million, still owes the organisation about $455 million.
UN Secretary-General António Guterres has warned that the organisation is effectively engaged in a “race to bankruptcy” and could face a funding shortfall as early as mid-August.
Because of the funding shortfall, the UN has already begun large-scale cost-cutting: offices are being closed, about three thousand posts in the secretariat have been cancelled, and spending on translation services and peacekeeping operations has been cut. The organisation is also accelerating the withdrawal of contingents from certain regions and delaying payments to countries that provide troops for peacekeeping missions – the Blue Helmets.
The situation is complicated by the UN’s funding structure. The organisation is unable to borrow, and much of its expenditure is spent on personnel. At the same time, member states are more likely to expand UN powers and programmes than to agree to their reduction.
Washington says it is not withdrawing its support for multilateral institutions, but is demanding sweeping reforms and more efficient spending. Additional pressure on the organisation’s budget is created by cuts in contributions from other donors, including the UK, Germany, Sweden and the Netherlands.