UN faces 'imminent financial collapse'

Guterres warns of record $1.57 billion in outstanding dues by year-end

GENEVA:

The UN chief has told member states that the organisation is at risk of "imminent financial collapse," citing unpaid fees and a budget rule that forces the global body to return unspent money, a letter seen by Reuters on Friday showed.

UN Secretary-General Antonio Guterres has repeatedly spoken about the organisation's worsening liquidity crisis, but this is his starkest warning yet, which comes as its main contributor, the United States, is retreating from multilateralism on numerous fronts.

"The crisis is deepening, threatening programme delivery and risking financial collapse. And the situation will deteriorate further in the near future," Guterres wrote in a letter to ambassadors dated January 28.

The US has slashed voluntary funding to UN agencies and refused to make mandatory payments to its regular and peacekeeping budgets. President Donald Trump has described the UN as having "great potential" but said it is not fulfilling that potential, and he has launched a Board of Peace, which some fear could undermine the older international body.

Founded in 1945, the UN has 193 member states and works to maintain international peace and security, promote human rights, foster social and economic development, and coordinate humanitarian aid.

In his letter, Guterres said: "Decisions not to honour assessed contributions that finance a significant share of the approved regular budget have now been formally announced." He did not specify which state or states he was referring to.

'Kafkaesque cycle'

Under UN rules, contributions depend on the size of each member state's economy. The US accounts for 22% of the core budget, followed by China with 20%. By the end of 2025, there was a record $1.57 billion in outstanding dues, Guterres said, without naming the states.

"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," he said.

Guterres launched a reform task force last year, known as UN80, which seeks to cut costs and improve efficiency. States agreed to cut the 2026 budget by around 7% to $3.45 billion. Still, Guterres warned that the organisation could run out of cash by July.