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The United Nations is grappling with a severe financial crisis that threatens its ability to function effectively.
In 2024, the organization faced a $200 million cash shortfall, and projections indicate that without significant budget cuts, the deficit could balloon to $1.1 billion by the end of 2025. This shortfall jeopardizes the UN’s capacity to pay salaries and suppliers, potentially halting operations by September.
A prominent contributor to this crisis is the accumulation of unpaid dues from member states. The United States, which contributes approximately $2.3 billion annually, has arrears totaling about $3 billion. If these dues remain unpaid, the U.S. risks losing its vote in the General Assembly by 2027, as Article 19 of the UN Charter stipulates. China, another major contributor, has also been delaying its payments, exacerbating the financial strain.
In response to the mounting financial challenges, UN Secretary-General António Guterres has initiated a comprehensive reform plan known as the “UN80 Initiative.” This plan proposes consolidating various UN agencies into four primary departments: peace and security, humanitarian affairs, sustainable development, and human rights. The aim is to streamline operations, reduce redundancies, and cut costs.
The financial crisis has already led to significant cutbacks across various UN agencies. The World Food Program anticipates a 30% reduction in staff, while UNICEF projects a 20% budget decrease for 2025. The UN High Commissioner for Refugees is also downsizing, affecting essential services for millions of displaced individuals. These reductions have sparked protests among UN staff, with nearly 500 employees rallying in Geneva against the budget cuts.
The UN’s financial woes are further compounded by shifting geopolitical dynamics and declining donor support. Traditional donors, including the United States and several European nations, are reevaluating their contributions amid domestic pressures and changing foreign policy priorities. As the UN approaches its 80th anniversary, it faces the daunting task of implementing reforms to maintain its relevance and effectiveness.
This report comes after President Trump removed Mike Waltz as National Security Advisor to be promoted to the role of U.S. Ambassador to the United Nations.
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