Fiddling while the UN runs out of cash

The need to avoid business as usual in the Fifth Committee

On 25 June, the Fifth Committee of the General Assembly concluded the second part of its resumed 79th session without agreement on proposals to address the liquidity crisis. Despite the worsening cash shortfall, the Secretariat and Member States have been acting as if the current situation is business as usual despite all evidence to the contrary. Addressing the worsening financial situation requires going beyond platitudes and posturing to take bold measures and decisive action. It also requires that Member States stop allowing those countries that are the primary drivers of the liquidity crisis from weaponizing the working methods of the Fifth Committee to block the decisions required to ameliorate the situation.

The Secretariat

When asked what needs to be done to address the liquidity crisis, the Secretary-General has stated that the only solution to the liquidity crisis is for Member States to pay in full and on time. This is true—but it is also beside the point. The UN has had to contend with financial challenges for nearly its entire existence. Today, the United States and China—the two Member States responsible for the largest shares of the regular and peacekeeping budgets¹—are the ones primarily responsible for the ongoing liquidity crisis, and there is no indication that they intend to change course.² The U.S. administration has already signaled that it may not honour its financial obligations to the UN and China continues to portray itself as a committed defender of multilateralism despite failing to meet its financial obligations to the UN in a timely manner.³

However, the recommendations in the Secretary-General’s most recent report on improving the financial situation, issued in January 2025, were drafted before the current U.S. administration took office. They will provide some relief, but do not adequately address the likelihood of a new normal in which the UN has to function without nearly half of its budget. What is bewildering, however, is the fact that the Secretary-General intends to further cut his proposed programme budget for 2026 by up to 20% as part of his UN80 initiative. If the Secretary-General simply wanted to reduce expenditure to better manage liquidity, he could use his own authority to restrict the amount of the approved budget that heads of entity within the Secretariat are allowed to spend. But actual cuts to the budget—which will be presented in the context of revised estimates in early September—will do nothing to shrink the 42% owed by the United States and China, and may exacerbate the liquidity crisis by constraining the room for maneuver in managing cash flow.

In proposing such cuts, the Secretary-General appears to be operating under the misguided expectation that preemptive cuts to budgets will head off further reductions imposed by the United States and may possibly prompt the release of funds. This is naïve. Not only has the Trump administration already submitted a request to cancel funding already appropriated by Congress, including for UN contributions to the regular and peacekeeping budgets, but the the Trump administration is unlikely to articulate its demands until after the completion of the 180-day review of international organizations requested in Executive Order 14199 and the confirmation of a permanent representative (i.e., a UN ambassador) in New York.

Member States

Counterproductive action on liquidity, however, has not been limited to the Secretariat. It is absurd that Member States who are the primary drivers of the current liquidity crisis were permitted to block decisions in the Fifth Committee on measures to mitigate the impact of their failure to meet their financial obligations to the UN. It is even more absurd when one recalls the fact that the general practice of taking decisions by consensus in the Fifth Committee—which followed the adoption of General Assembly resolution 41/213—was a compromise reached to avert withholding by the United States in 1986.⁴

Two slides from the presentation by Chandramouli Ramanathan, Assistant Secretary-General, Controller, to the Fifth Committee, 9 May 2025 (click to enlarge)

Despite the fact that consensus-based decision-making is the general practice of the Fifth Committee, it is not a requirement.⁵ While the Fifth Committee generally operates on the basis of consensus, voting is not unusual, even if only a handful of resolutions or amendments are voted on each year. Examples include the annual vote on the financing of the UN Interim Force in Lebanon and routine votes on aspects of the proposed programme budget. Votes have also been forced though the introduction of non-consensus draft resolutions or amendments related to the implementation of reforms (including in 2006, 2012, and 2019) and on the scale of assessments (including in 2009 and 2024, along with the threat of votes on both scales in 2018).

Why then hasn’t the Fifth Committee voted on measures to address the liquidity crisis? The challenge is the fact that most voted outcomes in the Fifth Committee have been forced by the unilateral introduction of proposals by either the Group of 77 (G77) and China or by the Russian Federation. China, however, has an interest in maintaining the status quo, as the persistence of the liquidity crisis this allows China to both maximize its leverage over the Secretariat and cast the United States as the main culprit of the financial difficulties facing the UN. It is therefore likely to block the G77 from introducing a draft resolution on the financial situation. Western countries, on the other hand, are traditionally reluctant to force a voted outcome, arguing that doing so will normalize voting—despite votes already happening on a regular basis—and will politicize the technical work of the Fifth Committee—despite the fact that deliberations in the Fifth Committee are fundamentally political in nature. But there are other options; one that has been used on several occasions to break deadlock is for the Chair of the Fifth Committee to demonstrate leadership and present a Chair’s text as a possible way forward when the usual process has failed.

Final thoughts

Despite a last-minute push by certain interested delegations for no action on the Secretary-General’s report—which would have effectively rejected the proposed liquidity measures—the General Assembly agreed to defer consideration of the report of the Secretary-General on improving the financial situation of the United Nations to the main part of the 80th session (October-December 2025), therefore keeping the issue on the agenda. But achieving a different outcome during the main session will be difficult unless something changes. Member States need to acknowledge that the general practice of consensus-based decision making in the Fifth Committee, which was originally introduced to avert a liquidity crisis, is now being weaponized to exacerbate a liquidity crisis.

Member States must not allow themselves to be held hostage by substantive and procedural inertia when considering measures to alleviate the liquidity crisis. They must be willing to consider old ideas such as charging interest on late payment as well as new ideas that better meet the needs of the current moment. Although budget cuts alone are counterproductive for resolving the liquidity situation, carefully calibrated cuts accompanied by a supplementary assessment may be worth considering, as such an approach would address chronic underpayment by certain Member States in a manner that does not disadvantage Member States that have met their financial obligations to the UN.

Moreover, Member States who claim to be champions of multilateralism must not be afraid of the possibility of voting to adopt measures to ameliorate the financial situation. To do so would be in line with both the letter and the spirit of resolution 41/213. And given the historical record, it would be disingenuous to shy away from a vote by claiming that a voted outcome would create a precedent or increase the politicization of the work of the Fifth Committee. The UN cannot afford to continue operating as if this is business as usual, and the upcoming 80th session will be a real test of whether Member States are able to meet the needs of the moment.

1. For 2025, the United States is responsible for 22% of the regular budget and 26.1584% of peacekeeping budgets, while China is responsible for 20.004% of the regular budget and 23.7851% of peacekeeping budgets.

2. If you’re interested in more background, I wrote a policy brief on the origins of the liquidity crisis last year: Chen, E. (2024). The Liquidity Crisis at the United Nations: How We Got Here and Possible Ways Out. New York University Center on International Cooperation. https://cic.nyu.edu/resources/the-liquidity-crisis-at-the-united-nations-how-we-got-here-and-possible-ways-out/

3. To meet their financial obligations, Member States are required to pay their assessed contributions in full and on time. UN financial regulation 3.5 specifies a 30-day window in which contributions are due and payable. Although China pays its financial contributions in full, it does not pay on time. In 2024, it paid is regular budget contributions at the end of the financial period—on 27 December—at which point much of the funds were unable to be spent and therefore had to be credited back.

4. In 1985, the U.S. Congress passed what is known as the Kassebaum-Solomon amendment, which would have reduced U.S. payments to the UN regular budget unless weighted voting were adopted at the UN on budgetary matters. After the adoption of resolution 41/213, Congress adjusted the provision to require the implementation of consensus-based decision making on budgetary matters instead of weighted voting.

5. General Assembly resolution 41/213 drew a distinction between the standard in the Committee on Programme and Coordination, which “should continue its existing practice of reaching decisions by consensus” and the standard in the Fifth Committee, which “should continue to make all possible efforts with a view to establishing the broadest possible agreement”.