UN Warns It May Default on Salaries by November in a Cash Crisis

(Bloomberg) -- United Nations Secretary-General Antonio Guterres warned that the global body is facing its worst cash crisis in about a decade and runs the risk of defaulting on payments to staff and vendors.

Many members are behind on their payments, forcing the UN to cut back on travel, purchases of goods and services and conferences, Guterres said. The cash crunch is “undermining the implementation of mandates decided by inter-governmental bodies,” he added in a statement on Tuesday.

This year, 129 of the UN’s member states have paid $2 billion toward the organization’s 2019 regular budget, the UN said. But about $1.4 billion remains outstanding. Among the 64 nations that have yet to pay their 2019 dues in full are Argentina, South Korea, Israel, Saudi Arabia, Senegal and the U.S.

Earlier this year, Guterres warned the UN was struggling with a worsening funding shortfall for peacekeeping operations as well as its regular budget due to member states failing to pay what they owe and byzantine budget rules that constrain the UN’s ability to move its money between accounts.

The UN already has been cutting back since the beginning of the year, holding off on hiring and containing expenditures globally to keep the cash shortfall from growing. Without those measures, Guterres said, the shortage in October could have reached $600 million and the organization wouldn’t have had the liquidity to support the opening of the General Assembly debate and high-level meetings last month.

To contact the reporter on this story: David Wainer in New York at dwainer3@bloomberg.net

To contact the editors responsible for this story: Bill Faries at wfaries@bloomberg.net, Larry Liebert

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