Organization in Financial Crisis, Could Default on Salaries by Late November, Secretary-General Says, Urging All Member States to Pay Annual Dues in Full

SG/SM/19799-ORG/1699
8 October 2019

Organization in Financial Crisis, Could Default on Salaries by Late November, Secretary-General Says, Urging All Member States to Pay Annual Dues in Full

The following statement was issued today by the Spokesman for UN Secretary-General António Guterres:

The Secretary-General wrote to Member States about the worst cash crisis facing the United Nations in nearly a decade.  The Organization runs the risk of depleting its liquidity reserves by the end of the month and defaulting on payments to staff and vendors.  Stressing the United Nations Charter obligation of Member States, the Secretary-General thanked the Member States who have paid their regular budget assessments, which is now 129, and urged those who have not paid to do so urgently and in full.  This is the only way to avoid a default that could risk disrupting operations globally.  The Secretary-General further asked Governments to address the underlying reasons for the crisis and agree on measures to put the United Nations on a sound financial footing.

By the end of September, Member States had paid only 70 per cent of the total assessment for the regular budget, compared with 78 per cent at the same time last year.  The Secretariat had put in place multiple measures since the beginning of the year to align expenditures with cash inflows.  These included adjusting hiring and other non-post expenses based on expected cash availability.  Had it not contained expenditures globally from the beginning of the year, the cash shortfall in October could have reached $600 million and the Organization would not have had the liquidity to support the opening of the General Assembly debate and the high-level meetings last month.  To date, we have averted major disruptions to operations.

These measures are no longer enough.  The Secretariat could face a default on salaries and payments for goods and services by the end of November unless more Member States pay their budget dues in full.  The Secretary-General has therefore requested additional steps be taken immediately, including further reductions in official travel; postponing spending on goods and services; and discontinuing events scheduled outside official meeting hours at Headquarters duty stations.  In addition, conferences and meetings may have to be postponed or services be adjusted.  He is reviewing further options.

The Secretary-General noted that this is a recurrent problem that severely hampers the Secretariat’s ability to fulfil its obligations to the people we serve.  We are now driven to prioritize our work on the basis of the availability of cash, thus undermining the implementation of mandates decided by intergovernmental bodies.  The Secretary-General therefore looks to Member States to resolve the structural issues that underlie this annual crisis without further delay.

The Secretary-General has also kept the staff informed of these developments.

For information media. Not an official record.