U.N. warns of collapse from unpaid fees and budget rules

This warning, revealed by Reuters on Friday (January 28), marks his most urgent statement yet regarding the organisation's escalating liquidity crisis.

Guterres has been vocal about the worsening situation but emphasised that the crisis is now threatening the delivery of essential programs and could lead to a complete financial collapse in the near future.

His letter, sent to ambassadors on Friday, follows ongoing challenges with the US reducing its contributions to the U.N., particularly its voluntary funding to U.N. agencies, and withholding mandatory payments to both the regular and peacekeeping budgets.

The US, which historically contributes 22% of the core budget, has consistently slashed funding, with President Donald Trump stating that while the U.N. has "great potential," it is not fulfilling its mission.

The US has also created a Board of Peace, which some worry could weaken the established international body.

Founded in 1945, the U.N. consists of 193 member states and plays a key role in maintaining international peace and security, promoting human rights, and providing humanitarian assistance.

In his letter, Guterres addressed the critical issue of unpaid contributions, highlighting that "decisions not to honour assessed contributions" have now been officially announced, though he did not specify which countries were responsible.

The US currently owes US$2.19 billion to the U.N.'s regular budget, US$1.88 billion for active peacekeeping missions, and US$528 million for past missions.

Guterres noted that, by the end of 2025, a record US$1.57 billion in dues remained unpaid, further exacerbating the U.N.'s financial struggles.

He called for full payment of obligations by all member states or a fundamental overhaul of the financial rules to avert the looming collapse.

Despite efforts to address the issue through the UN80 reform task force, which aims to cut costs and improve efficiency, the U.N. has yet to resolve the crisis. States agreed to reduce the 2026 budget by 7%, bringing it down to US$3.45 billion, but Guterres warned that without immediate action, the organisation could run out of cash by July.

A major issue, according to Guterres, is an outdated rule requiring the U.N. to return unused funds to member states each year.

This, he described as a "Kafkaesque cycle," referencing Franz Kafka's works on oppressive bureaucracy, pointing out that the U.N. is trapped in a system that forces it to return money it no longer has.

Reuters