A Cash Crisis Forces UN to Re-Figure Its Budget and Freeze Staff Hiring

Human Wrongs Watch By Thalif Deen

UNITED NATIONS, Mar 10 2025 (IPS)* –– Faced with an impending cash crisis primarily due to non-payment of dues by the US and over 100 other member states– along with threats of a US withdrawal from the world body– there were widespread rumors the United Nations was re-costing and reducing its approved budget for 2025 while deciding to freeze hiring new staffers.

The United States currently pays about 22% of the United Nations’ regular budget and 27% of the peacekeeping budget. As of now, the United States owes $1.5 billion to the UN’s regular budget.

And, between the regular budget, the peacekeeping budget, and international tribunals, the total amount the US owes is $2.8 billion.

The threat against the UN has been reinforced following a move by several Republican lawmakers who have submitted a bill on the U.S. exit from the U.N., claiming that the organization does not align with the Trump administration’s “America First” agenda.

Ian Richards, a former President of the Coordinating Committee of International Staff Unions and Associations and an economist at the Geneva-based UN Conference on Trade and Development (UNCTAD), told IPS the rumors are true.

As of last Monday, he said, there was a hiring freeze in the UN Secretariat declared by the Controller. Departments such as UNCTAD, which typically take a year or more to fill positions, are particularly affected, he pointed out.

A memo last week to heads of UN Departments/Offices and Special Political Missions, from Chandramouli Ramanathan, Assistant Secretary-General and Controller, refers to “Managing the 2025 regular budget liquidity crisis”

The memo says “due to recent developments, we have reassessed the liquidity situation, especially the inflow forecasts. To mitigate the risk of defaulting on payments of legal obligations to personnel and vendors, the Secretary-General has directed us to manage the cash outflows more conservatively and to suspend hiring till the situation is clearer, and to ensure that we end the year within our liquidity reserves (in other words, no debts other than the borrowing from the liquidity reserves)”.

Accordingly, he said, it has been decided that “the financial spending ceiling for each entity will be reduced to about 80% of the approved budget including re-costing; and your budget for post and other staff costs will be calculated by taking into account the approved vacancy rates for your entity, re-costing for posts and some elements of other staff costs, and the actual expenditures during November and December last year”.

The financial spending ceiling for each special political mission will also be reduced to about 80% of its approved budget. All hiring for regular budget will be suspended with immediate effect for a minimum of 6 months through the end of August, according to the memo.

As of 5 March 2025, only 72 Member States (out of 193) have paid their regular budget assessments in full.

The top 10 contributors to the UN’s regular budget, based on assessed contributions, are the United States, China, Japan, Germany, France, the United Kingdom, Italy, Canada, Brazil, and Russia.

The regular budget for 2025 is $3.72 billion – around $120 million more than the $3.6 billion figure unveiled by UN Secretary-General António Guterres in October 2024 – and $130 million greater than the Organization’s 2024 budget. The total budget appropriation for 2025 amounts to $3,717,379,600.

The United States is the largest contributor, assessed at 22% of the regular budget and China the second-largest contributor, assessed at 18.7% of the regular budget.

The US has withdrawn from the UN Human Rights Council (UNHRC), while it has warned that two other UN organizations “deserve renewed scrutiny”– the UN Educational, Scientific, and Cultural Organization (UNESCO) and the UN Relief and Works Agency for Palestine Refugees in the Near East (UNRWA).

Meanwhile, the United States has cut $377 million worth of funding to the UN reproductive and sexual health agency, UNFPA.

“At 7pm on 26 February, UNFPA was informed that nearly all of our grants (48 as of now) with USAID and the US State Department have been terminated,” the UN agency said.

“This decision will have devastating impacts on women and girls and the health and aid workers who serve them in the world’s worst humanitarian crises.”

The USAID grants were designated to provide critical maternal healthcare, protection from violence, rape treatment and other lifesaving care in humanitarian settings.

This includes UNFPA’s work to end maternal death, safely deliver babies and address horrific violence faced by women and girls in places like Gaza, Sudan and Ukraine.

Meanwhile, the Under-Secretary-General for Management Strategy, Policy and Compliance Catherine Pollard has decided that temporary job openings will be allowed during this period provided “there is no increase in the post costs for your entity”.

To minimize the risk of running out of cash, it has also been decided to issue allotments in tranches, the memo says.

“If the liquidity situation improves or there is greater certainty about the timing and amounts of collections likely to be received, we will endeavour to release additional allotments as soon as possible. However, please do not count on such additional allotments”.

Nevertheless, if possible, please keep additional spending plans (beyond the 80%) for non-post costs handy in case we are able to release additional funds towards the end of the year.

Such spending must be for activities that can be implemented within a reasonable period, in order to mitigate the negative impact on programme delivery caused by the financial ceiling of 80%. 12.

“We will try our best to maximize the funding that can be made available. My Office is standing by to provide briefings and clarifications as necessary. We will also provide periodic briefings on the financial situation”.

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Is the UN Facing its Biggest Single Crisis in 80 Years? *SOURCE: IPS. Go to ORIGINAL: https://www.ipsnews.net/2025/03/cash-crisis-forces-un-re-figure-budget-freeze-staff-hiring/ 2025 Human Wrongs Watch

 

Source: https://human-wrongs-watch.net/2025/03/10/a-cash-crisis-forces-un-to-re-figure-its-budget-and-freeze-staff-hiring/