UN cash crisis may slow development work

IN a rather disturbing piece of news last week, the United Nations revealed it is experiencing a severe cash crisis, one that is going to force the world body “to implement aggressive cash conservation measures to avert a default in meeting the legal obligations of the organization.” This is according to a statement attributed to Secretary-General Antonio Guterres, who lamented “the unfortunate deteriorating financial situation of our regular budget operations.”

The situation is unfortunate, indeed, and is one that is going to require attention on several fronts to prevent serious interruption to the admirable work done by the UN around the world and harm to its beneficiaries.

As a matter of perspective, a headline announcing that the UN is facing financial stress is not exactly something new; the organization has for decades struggled to collect dues from member-states, with the richest ones generally being the biggest deadbeats. UN contributions are determined according to a complicated scale based on per-capita GDP for each country. In 2023, the UN collected only 82.3 percent of the year’s assessment from member states, the lowest in five years, causing its year-end deficit to balloon to $859 million from $330 million at the end of 2022.

Thus, the UN has moved from its usual state of “financial stress” to a full-blown crisis. A UN spokesman told the media that numerous restrictions are being implemented to cover the most critical needs, beginning with payroll for the regular staff. These restrictions include a near-freeze on hiring for the rest of this year, with only absolutely essential positions being filled. In Geneva, where the bulk of UN offices are located, there are reports that some staff, mostly younger staffers with temporary contracts, are being let go to save money, with those remaining being told that vacations or other non-emergency leave requests will have to be postponed until at least August.

Restrictions have been imposed to limit official travel to only the most essential activities, and measures to reduce facilities management and “non-essential” security expenses are also being implemented. In addition, non-critical purchases of goods and services are being postponed, and most construction and maintenance projects will be suspended, except in cases where doing so would result in higher expenses later.

Even though there is no suggestion in the UN statements about its financial woes that ongoing development and assistance projects would be affected — although, it should be noted, there are no clear reassurances offered that they would not be — it must be assumed that the crisis will have a detrimental effect. Even if a project is already fully funded through other means, fewer UN staff with higher individual workloads, operating under additional stress about their job security, and restricted in what they can spend in order to do their jobs means that ongoing work is inevitably going to slow down, and might at some point be interrupted or stopped entirely.

Those familiar with working with the UN have pointed out that it is not exactly what anyone would describe as an “agile” organization and that much of its current difficulties are aggravated by bureaucratic bloat and inefficiency. While the organizational nature of the UN may be making its problems worse, it is clear that it is not the root cause of those problems. If the UN member-states were meeting their contribution obligations as they should, on time and in full, then perhaps it would be fair to call the UN to account for its own inefficiencies. The fact, however, is that a great many countries — including the UN’s biggest contributor and the world’s biggest economy, the US — are not honoring their pledges and agreed obligations. This is unconscionable, and the world’s governments must step up and put their money where their mouths are.

And, unfortunately, that includes the Philippines as well. Although the Philippines is by no means a major contributor to the UN, it still has an obligation to contribute, and so far this year, it is delinquent. According to records posted for the sake of transparency to the UN website, only 61 out of 193 memberstates have paid their annual assessment in full for 2024 as of February 16, 51 by the February 8 due date, and 10 more in the week following. The Philippines, which has an obligation of slightly under $6.68 million for 2024, is not among these.