Last week UN Secretary-General Antonio Guterres warned that UN staff may not be paid in November as a result of member states’ failure to pay their annual contributions.
The UN has three main sources of income: assessed contributions, peacekeeping contributions and voluntary contributions. Assessed contributions fund what is called the ‘regular’ budget, intended to cover the core costs of UN principal organs and main programmes.
62 member states, roughly a third UN members, have not yet fulfilled their regular budget obligations for 2019, including the United States, Brazil, the Republic of Korea, Mexico, and Saudi Arabia. For this reason $1.3 billion is outstanding; this is causing a significant cashflow problem.
In some cases, such as the United States, payments would not normally be made until later in the year in accordance with domestic budgetary cycles. But the number of payments that are being delayed grows greater and greater each year. 141 states had paid by this point in 2018.
Moreover, the UN is more vulnerable to cash flow issues than in previous years. In part this is because, in addition to not having made its 2019 contribution, the United States owes $381 million in backpayments from previous years' assesments. Furthermore, the UN has made singificant efforts to cut spending, and these efforts mean that there is less leeway within the system to tolerate cash flow shortfalls.
The Organisation has therefore had to make yet further unplanned cuts in order to stay afloat. Secretary-General Guterres told the UN General Assembly’s budget committee that without his work since January, UN coffers would have already run dry.
The consequences of these cuts are already being felt. In the same speech Secretary-General Guterres explained:
These consequences are manageable in the short term, but in the long term they eat away at the resilience of the Organisation: the United Nations becomes a less pleasant place to work, with a detrimental impact on the quality of staff they can attract. Moreover, the effect of delaying or cancelling large numbers of in themselves inconsequential events and activities is a hollowing out of processes and systems within the UN. These programmes are therefore less effective and less able to withstand future strains.
We hope that future budget reforms will do much to alieviate this issue. UN assessed contributions were formerly budgeted biennially, but from 2020 the budget will be decided annually, a move Secretary-General Guterres stated is a “step forward for realistic budgeting and a greater focus on results.” However, only member states paying their contributions in full and on time will give the United Nations the firm financial footing it requires to perform its vital functions.
The countries with contributions outstanding:
The UN does not name and shame the states that do not pay their contributions in a timely fasion, however it does name and praise the states that do. By comparing this list against the assessment of contributions published at the beginning of the year, one can determine which states still owe their assesments. The following sums represent the net amount owed (once credits arising from the tax status of UN staff are taken into account).
These are the 20 highest dues owed as of October 2019, you can find the full list here.
- United States of America $674,206,698
- Brazil $82,196,915
- Republic of Korea $63,209,094
- Mexico $36,023,885
- Saudi Arabia $32,678,013
- Argentina $25,512,271
- Venezuela (Bolivarian Republic of) $20,298,288
- Israel $13,662,309
- Iran (Islamic Republic of) $11,097,141
- Nigeria $6,970,566
- Philippines $5,715,863
- Romania $5,520,688
- Peru $4,238,104
- Oman $3,206,460
- Uruguay $2,425,757
- Ecuador $2,230,581
- Costa Rica $1,728,700
- Lebanon $1,310,466
- Panama $1,254,701
- Trinidad and Tobago $1,115,290
Photo: Secretary-General Guterres Speaks to Press After Taking Oath of Office. Credit. UN Photo/Rick Bajornas