Lamenting UN’s Dire Liquidity Crisis, Fifth Committee Urges Concerned States to Pay Arrears in Making up $1.5 Billion Regular Budget Shortfall
Committee also Hears Updates for Ongoing Projects at UN Facilities in Bangkok and Nairobi
Troubled by the ongoing liquidity crisis impeding the United Nations’ ability to deliver on its mandates, delegates at the Fifth Committee (Administrative and Budgetary) today emphasized that Member States’ timely payments of assessed contributions to the regular budget is crucial. Delegates voiced their displeasure that Member States with the highest arrears have aggravated the Organization’s financial situation, noting that there are about $1.5 billion in unpaid regular budget assessments at the end of the third quarter, the highest amount in four years.
Dire Liquidity across UN Is Unsustainable
The representative of Singapore, speaking on behalf of Association of Southeast Asian Nations (ASEAN), said the Organization has had to borrow from the Working Capital Fund, due to lesser collections in 2023 and 2024, and it will even have to dip into the Special Account this month. The peacekeeping budget is also facing liquidity challenges, with the percentage of unpaid assessments on an upward trend despite the overall declining peacekeeping budget. “This unstable capital inflow and the resultant dire liquidity situation across the various budgets of the UN is unsustainable. It has already affected mandate delivery of some activities,” she said, adding this is particularly unfortunate as Member States seek to achieve the Sustainable Development Goals (SDGs) by 2030.
Uganda’s delegate, speaking on behalf of the Group of 77 and China, said that, whenever there is a liquidity crisis, the Secretary-General should make a statement during the high-level week of the General Assembly’s general debate. This statement should lay out financial constraints and the list of largest dues yet to be paid. “We believe this critical matter deserves the attention of all delegations at the highest levels since this situation will only be remedied through higher political commitment towards the United Nations,” he said, adding it is extremely concerning that one Member State currently owes more than a half of all outstanding assessments to the UN regular budget and peacekeeping operations budget respectively, despite having the capacity to pay. “This Member State continues to unilaterally withhold its contributions for political reasons, while still clinging on to its special privileges in the Security Council,” he added.
The representative of Guyana said that the implementation of programmes and mandates will likely be constrained in 2025 unless the regular budget’s liquidity reserves are fully replenished by year’s end. “We appeal to all Member States in a position to do so, to pay their assessed contributions to the regular budget in full and in a predictable manner, so that the liquidity situation improves,” she said.
Two Member States Are Responsible
The representative of Cuba said his delegation is deeply concerned by the Organization’s financial crisis and it is “inconceivable” that the Organization is paralysed by the lack of adequate payments. He regretted that the Headquarters country, which is the richest nation in the world, continues to owe an exorbitant amount of money, contrary to its legal obligations. Despite benefiting from a ceiling on the money owed, due to the scale of assessment, this country owes nearly $1 billion to the UN regular budget. “There is no way this can be justified,” he said.
The representative of China said the root causes of the financial crisis stem from a major contributor refusing to pay its dues in full. The suspension of credits will not fundamentally relieve the liquidity crisis, she said, adding that “returning credits to countries that have not paid their arrears is not fair”. The representative of Australia, speaking also on behalf of Canada and New Zealand, noted that, as of 30 September, unpaid contributions to the regular budget that were due in February totalled $1.5 billion. More than 90 per cent of this amount is the responsibility of two Member States. Her delegation urged the United States and China to pay their outstanding contributions to the 2024 regular budget at the earliest possible date.
Calling the Organization’s financial situation “very worrisome”, Switzerland’s delegate said it cannot deliver on mandates without predictable and adequate funding. “The mandates are being decided by liquidity constraints,” she said, adding that it is troublesome the same Member States are not paying in full and on time.
Review of Financial Rules Needed
The representative of the European Union, in its capacity as observer, reiterated support for a careful and pragmatic review of the United Nations Financial Regulations and Rules, which are the backbone of the United Nations’ budgetary framework. The aim would be to better understand their intent and allow for better cash management. “We see merit in retaining unspent appropriations for those Member States in arrears,” she said, adding that the delegation welcomes continued discussions on how comprehensive cash-pooling could be developed, across regular and peacekeeping operations budgets, to best use the liquidity already available across UN accounts. This would help benefit all mandates.
The representative of the United Kingdom said the deteriorating liquidity situation is “deeply troubling”, urging all Member States to pay in full and on time. Changes in the Organization’s programmatic and financial rules could produce more modern financial regulations that will let the United Nations access resources it needs to deliver on its mandates.
Noting the “record levels” of the liquidity crisis, the representative of Kuwait said the Organization’s financial crisis is complex and needs to adopt innovative rules to improve its financial situation and ensure there is financing for development programmes in developing countries.
Chandramouli Ramanathan, Assistant Secretary-General, Controller, Management Strategy, Policy, opened the meeting by updating the Committee on developments since last week’s financial briefing. He presented the Secretary-General’s report, “Financial situation of the United Nations” (document A/79/521). For peacekeeping operations, he said India has paid in full all due peacekeeping assessments, which brings the total number of Member States having paid in full to 65. For the international tribunals, North Macedonia has paid in full, bringing the total number of Member States who paid in full for this category to 121. The Secretary-General paid special tributeto the 59 Member States that have paid all assessments that were due and payable as at the time of reporting.
After the debates, Mr. Ramanathan said the Secretariat had to borrow in full from the Special Account to meet its obligations for October and will have to borrow from the Closed Tribunals in November if more cash does not come in. The Organization was in a similar situation last fall, but payments arriving on 11 and 12 November prevented the Secretariat from borrowing from the Closed Tribunals.
Secretariat Reports Update Construction, Property Management Issues
Mr. Ramanathan then took the floor again to present the Secretary-General’s eighth report detailing progress in the seismic mitigation retrofit and life-cycle replacements project at the Economic and Social Commission for Asia and the Pacific premises in Bangkok (document A/79/221), and the Secretary-General’s seventh report detailing progress on the replacement of office blocks A–J at the United Nations Office at Nairobi (document A/79/267).
Economic and Social Commission for Asia and the Pacific (ESCAP)
He said this report provides updates on construction, the removal of hazardous materials and business readiness. ESCAP carried out a transition strategy to avoid cost increases and enable the early involvement of operational teams, who will take over the renovated premises. The report details information on the substantial completion of the first phase of construction, with phase two to be substantially completed at year’s end. A revised cost plan, within the approved maximum overall cost of $41.3 million, is also provided.
United Nations Office at Nairobi
The report on the office blocks at the United Nations Office at Nairobi provides updates on three main components — the early works, the flexible workplace strategies and the new building, he said. It details successful completion of existing office blocks as part of the flexible workplace strategies component and progress on construction works under the new building component. The project should be substantially completed in December 2025, within the maximum overall cost of $66.1 million approved by the Assembly.
Sharon Brennen-Haylock, Vice-Chair of the Advisory Committee on Administrative and Budgetary Questions, introduced that body’s related reports (documents A/79/7/Add.10 and A/79/7/Add.11).
Delegates Support Construction Projects in Bangkok, Nairobi
Delegates today threw their support behind ongoing construction projects in Bangkok and Nairobi. The representative of Uganda, speaking on behalf of the Group of 77 and China, said the Group appreciates progress on the office blocks in Nairobi and urges the Secretariat to mitigate future risks. He stressed the importance of effective oversight and coordination.
Acknowledging the unique role ESCAP plays as the largest United Nations regional commission, the representative of Singapore, speaking for Association of Southeast Asian Nations (ASEAN), said the Group supports ESCAP’s efforts in good governance, effective oversight, transparency and accountability, which helped lead to the seismic mitigation project’s timely completion within budget. Her delegation is pleased that ESCAP actively followed recommendations from the eighth audit report of the Office of Internal Oversight Services (OIOS) and there are no outstanding recommendations from previous audits.
The representative of Thailand urged the Secretariat to share lessons learned from the seismic mitigation project as best practices with managers of other UN construction projects. “This includes use of local knowledge and materials, universal design and innovative strategies that promote environmental sustainability and cost-saving while ensuring business continuity,” he said.
The representative of Egypt, speaking for the Africa Group, thanked the Kenyan Government for its unwavering support and underscored the close collaboration between the Organization and host Government. He encouraged the Secretary-General to intensify efforts to incorporate local knowledge, technology and capacity in the project. The representative of Kenya thanked the Fifth Committee for its support.
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