Explainer: Why is UN warning of ‘imminent financial collapse’?
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UN Secretary-General Antonio Guterres recently issued his starkest warning yet on the organisation's finances, in a Jan 28 letter to UN ambassadors seen by Reuters.
PHOTO: REUTERS
- The UN faces "imminent financial collapse" due to US$1.57 billion in unpaid dues, largely owed by the US (US$2.19 billion to regular budget, US$2.4 billion to peacekeeping).
- The US has cut UN funding under President Trump, refusing mandatory payments and exiting agencies. A US official cited "waste, fraud and abuse" as reasons.
- UN Secretary-General Guterres seeks reform amid a “Kafkaesque” rule requiring money to be credited back to states even when unpaid, calling it "a race to bankruptcy."
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GENEVA/WASHINGTON - UN Secretary-General Antonio Guterres is sounding the alarm on UN finances, warning that the world body is at risk of “imminent financial collapse”
Mr Guterres has repeatedly spoken about the UN’s worsening liquidity crisis but this was his starkest warning yet, and it came as the United States, its main contributor - and debtor - is retreating from multilateralism on numerous fronts.
Here are some questions and answers about UN finances:
How much is owed to the UN and by whom?
In a letter to member states last week, Mr Guterres said there was a record US$1.57 billion (S$2 billion) in outstanding dues for the UN’s regular budget, without naming the nations that owed them.
UN officials say more than 95 per cent of what is owed to the regular UN budget is owed by the US - US$2.19 billion by the start of February. The US also owes another US$2.4 billion for current and past peace-keeping missions and US$43.6 million for UN tribunals.
On Dec 30, the UN General Assembly approved US$3.45 billion for the regular UN budget for 2026, following weeks of negotiations. This covers costs of running UN offices around the world, including the headquarters in New York, staff salaries, meetings and development and human rights work.
UN officials say the US did not pay into the regular budget in 2025 and owes US$827 million for that, as well as US$767 million for 2026. Next in line were Venezuela and Mexico, owing US$38 million and US$20 million respectively.
Contributions depend on economy size. The US accounts for 22 per cent of the regular budget, followed by China with 20 per cent. Fees are officially due by Feb 8 and so far 41 states have paid for 2026, a UN document showed.
What is the UN chief asking member states to do?
Without naming the US, UN spokesperson Stephane Dujarric said this week the UN’s “cash-flow problem” could be solved “if member states, who have an obligation to pay, pay.”
The crunch comes at a time when US President Donald Trump has launched a Board of Peace
Under Mr Trump, as well as refusing to make mandatory payments to the UN’s regular and peacekeeping budgets, the US has slashed voluntary funding to UN agencies with their own budgets, and moved to exit UN organisations including the World Health Organisation. In December, the UN appealed for a 2026 aid budget only half the size of what it had hoped for in 2025, acknowledging a plunge in donor funding at a time when humanitarian needs have never been greater.
Mr Guterres launched a reform task force in 2025 - UN80 - seeking to cut costs and improve efficiency. The approved 2026 regular budget is roughly US$200 million higher than he proposed, but about 7 per cent lower than the approved 2025 budget.
Mr Guterres warned in his letter that the UN could run out of cash by July and cited a “Kafkaesque” requirement for it to credit back hundreds of millions of dollars in unspent dues to states each year even if it never received the money. UN officials hope to overhaul this “bizarre” rule, which Mr Guterres has called “a race to bankruptcy.”
What has the Trump administration said?
Speaking to Politico on Feb 1, Mr Trump cast himself as the savior of the UN but declined to say if the US would pay up.
According to Politico, Mr Trump said he was unaware the US was behind in its commitments but was sure he could “solve the problem very easily” and get other countries to pay - if only the UN would ask.
The White House and State Department did not respond when asked if the US will pay, or if Mr Trump meant that other countries should put up the money instead.
A senior State Department official did though say that “the UN needs to get back to basics” and accused it of wasting money.
“We have no interest in continuing to spend American tax dollars on such waste, fraud and abuse,” the official said.
“The UN continues to pay its staff far more than for comparable US government positions, provide unacceptable benefits and pensions, and increase the number of high-level bureaucrats in New York - up over 30 per cent - in the last two years alone. The UN also spent US$340 million just on meetings and conferences last year.”
According to a draft UN budget document seen by Reuters in September, UN cost-savings plans for 2027 envisaged far smaller cuts to senior staff than to lower ranks.
It showed just two of 58 department head posts in the layer of under-secretaries-general beneath Mr Guterres, or 3 per cent, would go, compared to around 19 per cent across the board and up to 28 per cent for one lower-ranking category, according to Reuters calculations.
A UN official said Mr Guterres aimed to deliver on reform while limiting the impact of cutbacks. If the US did not pay, “at the end of the day, meetings can’t be organised, work’s not done, staff is not being paid,” the official said.
“Unlike a government, we can’t borrow money and we can’t print money.” REUTERS
