UN Faces "Imminent Financial Collapse" as Dues Hit Record $1.57 Billion

Detailing the gravity of the situation, Guterres recently circulated a letter to all UN member nations, warning of a severe financial crunch and urging governments to either reform budgetary rules or face "the very real prospect of the financial collapse of our Organization", according to Al Jazeera. He also called on countries to clear their outstanding dues.

The warning was addressed publicly during a Friday afternoon briefing, when a UN spokesperson was asked about the letter and responded that, "when it comes to paying, it's now or never".

Expanding on the organisation's financial vulnerability, spokesperson Farhan Haq told reporters, "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."

While Guterres did not single out any country, the appeal comes at a time when US President Donald Trump has moved to cut Washington's financial support for multilateral bodies. His administration has announced plans to withdraw from several UN agencies and has also promoted what Trump calls a "Board of Peace" initiative.

Against this backdrop, Al Jazeera reported that some experts believe the initiative is aimed at sidelining the United Nations.

Commenting on the proposal, Louis Charbonneau, UN director at Human Rights Watch, said, "Trump's board appears to be a kind of pay-to-play, global club, judging from the USD 1 billion fee for permanent membership."

He further added, "Instead of handing Trump USD 1 billion checks, governments should work together to protect the UN and other institutions established to uphold international human rights and humanitarian law, the global rule of law, and accountability."

Under the existing system, UN membership fees are calculated based on factors such as national gross domestic product, debt levels and economic capacity, with the United States contributing 22 per cent of the core budget, followed by China at 20 per cent.

Despite this framework, Guterres said that by the end of 2025, unpaid dues had reached a record USD 1.57 billion, without identifying the countries responsible.

Reiterating the urgency of reform, he warned, according to Al Jazeera, "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."

Even as financial pressures mount, the UN earlier this month approved a USD 3.45 billion budget for 2026, reflecting a 7 per cent reduction from last year as the organisation attempts to curb spending.

However, despite these cost-cutting steps, Guterres cautioned in his letter that the UN could exhaust its cash reserves by July.

He also pointed to what he described as an outdated rule that requires the organisation to return hundreds of millions of dollars in unused funds to member states each year.

Highlighting the impact of this mechanism, Guterres said, as reported by Al Jazeera, "In other words, we are trapped in a Kafkaesque cycle expected to give back cash that does not exist."

Reflecting the scale of the challenge, figures published on the organisation's website show that as of Thursday, only 36 of the UN's 193 member countries had fully paid their regular 2026 contributions.

- ANI