Is the UN on brink of financial collapse? Guterres issues warning

New York: United Nations Secretary-General Antonio Guterres has warned that the world body is facing an "imminent financial collapse" as unpaid member contributions and structural funding issues pile up.

Guterres circulated a letter to all UN member states, highlighting the severity of the situation and urging countries to either reform budgetary rules or risk "the very real prospect of the financial collapse of our Organisation", according to Al Jazeera. He also called on governments to settle outstanding dues promptly.

The warning was echoed publicly during a Friday briefing, with a UN spokesperson stating, "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 name specific countries, the warning comes amid US President Donald Trump's moves to cut Washington's financial support for multilateral bodies. His administration has also announced plans to withdraw from several UN agencies and promoted what Trump calls a "Board of Peace" initiative.

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 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."

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Under the existing system, UN membership fees are calculated based on factors such as national GDP, debt levels, and economic capacity, with the United States contributing 22 per cent of the core budget and China 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 naming the countries responsible.

He reiterated the urgency of reform, warning, "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."

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Even as the UN attempts to curb spending, it approved a USD 3.45 billion budget for 2026 earlier this month, reflecting a 7 per cent reduction from last year. However, Guterres cautioned that cash reserves could be exhausted by July.

He also criticised an outdated mechanism requiring the organisation to return unused funds to member states annually, saying, "In other words, we are trapped in a Kafkaesque cycle expected to give back cash that does not exist."

As of Thursday, only 36 of the UN's 193 member countries had fully paid their 2026 contributions, underscoring the scale of the funding challenge.