UN Faces "Imminent Financial Collapse," Guterres Warns Over Unpaid Dues

The warning comes as the world body ended 2025 with record levels of unpaid dues and dwindling cash reserves.

In a letter dated January 28 to ambassadors from all 193 member states, Guterres highlighted that the UN could run out of regular budget funds by July 2026 if current trends continue.

"Either all Member States honour their obligations to pay in full and on time, or Member States must fundamentally overhaul our financial rules to prevent an imminent financial collapse," he wrote, underscoring the urgency of the situation.

The UN chief's letter noted that by the end of last year, unpaid mandatory contributions had climbed to about $1.57 billion, more than double the amount at the end of 2024, despite efforts by more than 150 states to meet their obligations. The United States, historically the largest contributor, has significantly reduced both voluntary and mandatory payments, leaving it owing billions across the regular and peacekeeping budgets.

Guterres did not single out specific countries in his letter, but diplomatic messaging and reporting point to major shortfalls from several key members.

Compounding the liquidity crisis is a financial rule critics say is "antiquated": the UN is required to reimburse member states for unspent funds at the end of each budget cycle, even if those contributions were never received. Guterres described this predicament as a "Kafkaesque cycle" in which the organisation is "expected to give back cash that does not exist."

The UN General Assembly approved a $3.45 billion budget for 2026 in December, reflecting a roughly 7 per cent cut from the previous year as part of cost-saving measures. But without significant improvements in the collection of dues or changes in financial procedures, Guterres warned that the body risks being unable to meet its programme commitments.

A UN spokesperson highlighted during a briefing that the organisation now lacks the liquidity reserves it has relied on in past shortfalls. "We do not have the sort of cash reserves and the sort of liquidity to keep functioning as we've done in previous years, and this is something that the secretary-general has warned with increasing strength each year," Farhan Haq said.

Guterres, who will step down at the end of 2026, has repeatedly called for reform not only of financial mechanisms but also of how the organisation functions in a rapidly changing global landscape.

- ANI