New York: A severe cash shortfall is forcing the United Nations to slash spending and freeze hiring, jeopardizing its ability to deliver on mandated programmes and exposing the Organization to growing reputational risk, the Fifth Committee (Administrative and Budgetary) heard today, as Member States explored potential solutions to the liquidity crisis.

According to EMM, among the proposed remedies under discussion is a revision to the long-standing rule requiring unspent funds at year-end to be returned to Member States as credits. The UN regular budget operates on a calendar-year basis. When Member States make their assessed payments late in the year-especially in November or December-the Organization has very little time to use those funds. As a result, much of the money remains unspent by year’s end, with opportunities being lost to implement planned activities and deliver results within the budget year.

Switzerland’s representative, speaking also for Liechtenstein, warned that each delay in payment, eac
h hiring freeze, and each canceled interpretation service chips away at the trust in the UN’s ability to uphold its decisions. This is not merely a budgetary issue, but a question of credibility.

The United Kingdom emphasized the importance of harmonizing the practice for credit returns and clarifying the criteria for special commitments to address the impact of late contributions. Member States must have clarity on year-end credit returns and protect mandate implementation, insisting on sustainable solutions that benefit the UN’s mandate delivery.

Kazakhstan’s delegate highlighted that financial discipline is not just an accounting matter but a matter of credibility and collective ability to implement UN mandates. The delegate expressed readiness to explore practical and consensus-based solutions, including those in the Secretary-General’s report on improving the UN’s financial situation.

Norway proposed several measures to give the UN Secretariat the flexibility it needs, acknowledging that these measure
s would not solve the underlying cause of the liquidity crisis-late payments by some Member States. Norway called for bold and ambitious action on the UN80 initiative, emphasizing that Member States must contribute to its success.

The Russian Federation stressed that discussions on budgetary instruments should not replace the principle that all Member States are responsible for paying their contributions in full. The delegate called for more transparency in implementing cash-saving measures and emphasized that Member States with the greatest financial capacity should show leadership.

The European Union’s representative, as an observer, highlighted the alarming $2.4 billion in unpaid regular budget assessments as of April 30, which pose operational risks and delay payments to countries contributing personnel and resources. The EU urged that the burden of addressing late payments should not fall on a few Member States and called for universal, timely, and full payment by all.

Singapore, representing ASEAN, e
xpressed regret over the UN’s chronic liquidity problem, noting that the organization is operating at 83% of its approved budget with an extended hiring freeze. This situation affects mandate delivery, especially across various UN departments.

Iraq, speaking for the Group of 77 and China, noted that one Member State is responsible for over half of all unpaid assessments, which is troubling given the state’s capacity to pay. This withholding is done for political reasons, affecting the organization’s financial stability.

The debate followed a semi-annual financial update on May 9 by the Secretariat, indicating trailing programme budget collections. The UN’s core budget accounts are funded through assessed contributions, obligatory payments made by Member States based on their capacity to pay.

Catherine Pollard, Under Secretary-General, Management Strategy, Policy and Compliance, provided updates on Member States’ payments since May 9. Djibouti and Mali have paid in full for the regular budget, while Djibout
i and Egypt have done so for peacekeeping operations. Denmark, Djibouti, and Mali have paid in full for international tribunals, with Djibouti and Denmark paying in full for all categories.