Global tensions are at a high, with the world experiencing its worst economic crisis since the United Nations’ formation. Secretary-General António Guterres has threatened imminent bankruptcy, with member states calling for a complete restructuring of the organization. It is hostage to decisions made by nations that still withhold life-saving contributions to the global crisis.
Member states withhold contributions, leading to a liquidity crisis
The UN began 2025 with a paralyzing cash deficit of $135million, which placed day-one budgetary restrictions on all units. More than 760 million in 2024 arrears remain largely unpaid, with administrators acknowledging that enormous chunks may never be received. The organization had logged a record-low 66.2 percent of the year’s charges by the close of September, versus 78.1 percent by the same date last year, creating record unreliability on continuity of operations.
Secretary-General Guterres went radical in reducing expenses to save money, establishing the baseline of budget restraint at $600 million for 2025—a little over sixteen percent of expenditures planned. Under no other restrictions, the organisation would have expended its last available funds by August, risking loss of valuable high-level diplomatic connections as well as compromising payment of staff salaries throughout global operations.
Key figures write out organisational distress
- Arrears outstanding past due dates: $760 million carried forward from 2024
- Collection rate: 66.2% of 2025 tests completed by September only
- Spending savings: $600 million reduction to prevent default
- Credit refunds: $300 million to be returned to members in 2026
Structural reforms aim at improving administrative efficiency
UN80 Initiative is the most far-reaching reorganization of an organization ever to have been attempted in the history of the United Nations, which aims at 2,681 job reductions and cutting the 2026 budget by $577 million. These reforms are directed at consolidating the administrative services, consolidating the functions, and investigating lower-cost delivery models other than the larger Secretariat agencies. The reformed budget is balanced between the three pillars of the organization—peace and security, development, and human rights—while protecting the programs of the least developed countries and the small island developing states.
Early reform proposals include building shared administration offices in New York and Bangkok, making worldwide payroll processing, and frequent review of tasks that are able to be done cost-effectively at lower-cost duty stations. Even after drastic cuts, officials say eighty-five percent of funds made available still cannot be avoided to meet the mandates.
“We will again spend less than the 2026 budget because we did not get enough. It will most likely lead to a collapse of our daily work in our Organization” – Secretary-General António Guterres
Developing nations demand equitable representation despite cuts
The Group of 77 and China expressed the most serious fears that anticipated staff reductions would aggravate geographical imbalances in the organization’s personnel. Iraq’s representative emphasized that increases in efficiency should be achieved by way of quicker delivery, rather than cuts eating into planned activities or participation of developing countries.
Members of the African Group warned against hysterical Fifth Committee deliberations and emphasized effective mobilization of resources towards priorities like sustainable development as well as prevention of conflict. ASEAN’s representative, speaking on behalf of Singapore, noted that these actions expose the United Nations to being brought down in periods of increased international coordination and cooperation.
Regional concerns regarding the implications of reform
- Geographic representation: Risk of increased imbalances in staff
- Development programmes: Adequate security for the least developed countries’ support
- Regional commissions: Adequate investment for the objectives of economic development
- Peacebuilding operations: Adequate finance for preventive action
The United Nations is at a crossroads where the limitations of its finances threaten its effectiveness in addressing global challenges. Failure by the members to respond promptly in fulfilling their obligations and making reforms necessary will cause the institution to risk operational failure when global cooperation most urgently needs it to preserve world peace, security, and global sustainable development.