The UN’s impending ‘financial collapse - a Politico Article shared by Robert Cohen

The United Nations is running out of money — and the United States is a big reason why.That’s according to a U.N. report released earlier this month that says “financial collapse” could hit the international body in August if member states, particularly the U.S., don’t make good on their dues.

The United States owes roughly $2 billion to the organization’s regular budget on top of another $2.2 billion for peacekeeping missions, a portion of which has accrued over decades – far and away more than any other country that is in arrears.

“The short answer is that our financial problems stem from one large contributor, the US, not paying their regular budget dues,” FARHAN HAQ, spokesperson for the U.N., said in an email.

Without new funding, everything from salaries to rent to the personnel carrying out peacekeeping missions in conflict zones are at risk.

Financial troubles are not new for the U.N. but what makes this time different is there are fewer cash reserves to draw from.

The United States — the largest donor country because of its economic size — hasn’t made a full payment on time in several years, said RONNY PATZ, a U.N. finance expert at the German Institute of Development and Sustainability, a Europe-based think tank.

“The rainy day fund is empty,” Patz said.

A separate U.N. report released Friday said the organization would run out of cash for paying general fund obligations by August unless it cuts spending by 13 percent.

President DONALD TRUMP told POLITICO in February that he could solve the funding crisis “very easily,” but so far he has not staved off the financial crunch. In January, Trump issued a presidential memorandumwithdrawing the U.S. from 66 international organizations including several U.N. agencies such as the U.N. Alliance for Civilizations.

U.N. dues are in theory mandatory, though enforcement isn’t exactly easy. The U.S. could lose its vote in the General Assembly as soon as 2027, a penalty that other countries such as Venezuela have faced — however, the country would retain its vote on the Security Council.

MIKE WALTZ, the U.S. ambassador to the United Nations, said this monthduring a press conference that “we will have an additional substantial tranche towards our regular budget coming soon.” Soon after, the U.S. announced roughly $1.8 billion for humanitarian funding. While the U.N. lauded that money, it cannot help with the general fund or peacekeeping missions.

Neither the U.S. mission to the U.N., the State Department or the White House responded to requests for more information about how much money would come or when.

TOMMY PIGOTT, spokesperson for the Department of State, said in an email that “the United States is committed to protecting American taxpayers by reforming the UN and getting it back to basics.”

“Any funding contributions are dependent on real and significant reforms, and to ensure U.S. taxpayer dollars are not used in ways that are contrary to our nation's interests,” he said.

Voluntary contributions from member states, particularly the U.S., are also way down since the pandemic, worsening the budget crunch, said THIBAULT CAMELLI, a research scholar on multilateral reforms and former diplomat to the U.N.

The U.N. is being forced to pare back as a result. Late last year, the organization approved a $3.45 billion budget — a 7 percent decrease from the previous year. And the report released on Friday warned unpaid assessments are “making peacekeeping increasingly unsustainable financially.”

Of course, one agency’s liquidity crisis is another administration’s efficiency program. Waltz, who has called out “bloat” at the U.N., celebrated its budget cuts as necessary reform.

“We have already achieved just this year the first regular budget cut in the history of the United Nations, reducing overhead, even drawing down some peacekeeping missions, many of which have been around 20, 30, 40 years,” he said during a press conference. “They’ve gone on too long or have been unable to actually achieve their mandate, or in many cases, what the peacekeeping commanders told us was to address poorly performing units.”

JEAN-PIERRE LACROIX, undersecretary general for peace operations, was less sanguine about the pullbacks. In April, he told the Security Council that the closure of the United Nations Mission in South Sudan is “creating blind spots, limiting proactive interventions and timely deployment to hotspots.”

Camelli said that while every organization can be more efficient, the reforms the U.S. is seeking are just austerity by another name.

“You still expect it to do more but you don’t give it the money to do so, and when it doesn’t, you say it’s inefficient and bloated,” he said.

Compounding the problem is a nearly 80-year-old rule that requires the organization to repay members when it fails to fully spend its budget. That rule applies even if the U.N. is unable to spend the budget it adopted because it never received member dues in the first place. Essentially, the organization gets hit twice, Patz said.

He added that unless there is a substantial change of heart, the U.N. will need to become 20 to 25 percent smaller, leading to “massive cuts” in peacekeeping and work in human rights and development.

“The whole system has to redefine itself,” he said. “Major powers will be forced to realign the system to meet those expectations.”