Whether the UN faces imminent financial collapse is up to the Secretary-General
Stop admiring the problem—do something
On Friday, the Secretary-General sent a letter to all permanent representatives on the dire financial position of the Organization. This letter spawned a whole slew of reporting breathlessly (and uncritically) parroting the Secretary-General’s claim that the UN faces “imminent financial collapse”.
The UN is in a precarious financial situation, and the current crisis is primarily driven by non-payment by the United States. That said, the Secretary-General is not as powerless as he makes himself out to be, and whether the situation results in "imminent financial collapse" is actually up to him. After all, most member states pay their contributions in full1 and the Secretary-General has many tools at his disposal to reduce expenditures. However, the Secretary-General seems more intent on making theatrical gestures and casting blame rather than doing what needs to be done to keep the organization afloat.
The Secretary-General’s letter
It is worth taking a moment to unpack several claims made in the letter.
Claim 1: Unspent money has to be returned to member states
According to our financial rules, if we are unable to fully implement a budget, even if this is due to a lack of payment of assessed contributions, we must return the “unspent” amount to the Member States.
This is true, but the issue is actually that the financial regulations and rules do not account for the possibility of member states not paying in full and on time, in large part because member states do not want to normalize such behavior. As a consequence, the regulations assume that any underspend against appropriations is due to funds not being needed for the year that they were assessed.2
Claim 2: The UN has to return funds it never collected
Just this month, as part of the 2026 assessment, we were compelled to return $227 million—funds we have not collected. The remaining $72 million were offset against the arrears of Member States.
The unused appropriation at the end of one financial period is used to offset member state assessments twelve months later.3
The problem, of course, is that the underspend for 2024 is not cash that was not needed but rather cash that was never received in the first place. But from the perspective of member states who paid in full, $227 million of the underspend is money that they contributed and which they are owed because the organization did not fully implement the budget for which the funds were provided in the first place.
Claim 3: The solution is for member states to let the Secretary-General retain credits
My tools to halt this vicious cycle are limited. Stopping it requires a concerted effort by Member States, such as including limiting return of credits based on actual collections.
Limiting the return of credits will slow the snowball effect of compounding under-expenditure but doesn’t solve the fundamental problem of the massive unfunded portion of the budget.
Moreover, member states who paid in full see the proposal to retain credits as rewarding bad behavior on the part of those who do not pay. Member states who paid in full see the credits as money that they are owed because they effectively over-paid for the actual portion of budgeted work completed by the Secretariat. To them, the proposal to retain credits is effectively a request for them to not only pay their own share of the work done, but to also cover a portion of the share owed by those who didn’t pay.
Claim 4: The Secretary-General has done his part
Over the years, I have proposed many measures to strengthen our financial footing. The General Assembly adopted only two for regular budget operations…these steps helped but are insufficient as the liquidity crisis deepens. Following extensive engagement with Member States, I again proposed measures last January to mitigate the impact of late and non-payments for both regular budget and peacekeeping operations.
The Secretary-General issued reports containing proposals to improve the financial situation three times: in March 2019,4 in October 2021,5 and in January 2025.6 The most recent report was essentially a repackaging of earlier proposals on retaining credits and increasing the level of the liquidity reserves available to the UN, but without addressing the reasons why member states refused to agree to those proposals in earlier iterations. However, the situation today is very different from the situation in 2019, when these proposals were first floated. For the Secretary-General to have done his part, he would have had to propose measures that respond to the actual financial challenges facing the organization today. It is not enough for him to rehash old proposals designed for fundamentally different problems.
The primary driver of the liquidity crisis in 2019 was late payment by the United States. The measures proposed can help address liquidity shortfalls when the main challenge is late payment. But the non-payment by the United States of its 2025 regular budget assessment creates a fundamentally different problem which the proposed measures are inadequate to address. Increasing the level of liquidity reserves is not a sustainable solution to non-payment, as cash borrowed to address the contributions shortfall would not be replenished. Addressing today’s problems requires proposals to fill the hole in the budget or reduce the size of that hole.
What was the point of the letter?
There was nothing in the letter that permanent representatives either were not already aware of or had not already heard before from the Secretary-General. Given how quickly it was picked up by the press over the weekend, it seems that the letter was intended to be leaked as part of a strategy by the Secretary-General to shape the narrative on who bears responsibility for the situation.
But the bottom line is clear: 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.
The Secretary-General effectively blames member states who have not paid for not paying in the first place, while also blaming member states who have paid for not changing the financial regulations. But as I’ve pointed out, member states oppose the proposed changes for reasons rooted in both principle and self-interest, and the Secretary-General knew that they were not likely to accept the same proposals they declined to approve the last two times he presented them.
Moreover, the narrative presented in the letter helps distract from the fact that a much of the challenge of the 2026 budget is of the Secretary-General’s own making. The misguided budget cuts he pushed through in his UN80 revised estimates only served to reduce the amount of cash the Secretariat will be able to receive from member states for 2026, thus significantly worsening the liquidity crisis.
What now?
For the UN to experience financial collapse would mean that has spent more than it received. As chief administrative officer of the UN, it is the responsibility of the Secretary-General to responsibly manage the resources of the organization to avoid such an outcome. The Secretary-General should have been prepared for the possibility that the Trump administration would not pay its assessed contributions; it was an eventuality spelled out in Project 2025 and one I warned of back in November 2024.
But the Secretary-General has avoided—and even suppressed—contingency planning within the Secretariat. In this, he is likely driven both by a fear of reifying the scenarios in question and a desire to avoid being seen as having responsibility for action. Instead, the Secretary-General focuses on performative gestures, such as presenting counterproductive budget cuts and recycling old proposals, which allow him to claim that he is trying his best but is at the mercy of member states.
It is not too late for the Secretary-General to plan for a range of scenarios, including one scenario in which the United States pays the minimum amount to avoid triggering Article 19 for 2027 and another in which the United States fails to pay the bulk of its assessed contributions. The development of plans for expenditure reductions should be done on a Secretariat-wide level rather than at a per-entity level. The possibility of putting a significant number of staff on furlough—essentially special leave without pay—for at least some part of the year must be on the table, but the decision on which staff to furlough and when must be determined by function rather than by contract type or seniority, unlike with the downsizing policy.
Some may argue that it is important for the Secretary-General to champion the principle of member states meeting their financial obligations to the UN, and that his taking too much initiative would dilute that message. But let’s be honest; the exhortations of a lame duck will not be what convinces member states who have decided not to pay to reverse course. Yes, the United States (and the 145 other member states who failed to pay their regular budget contributions for 2026 in full and on time) are in breach of their financial obligations to the UN. But as to whether this translates into the imminent financial collapse of the UN?
We are in the hands of the Secretary-General.
© 2026 Eugene Chen under CC BY-NC-ND 4.0
The views expressed herein are those of the author and do not necessarily reflect the views of the United Nations University.
The Secretary-General indicated in his letter that collections covered 76.7% of assessments for 2025, which means that—other than the 22% owed by the United States—only 1.3% was missing.
Under financial regulation 5.4, the remaining balance of the appropriation (i.e., the amount of the budget approved by the General Assembly, not the amount actually collected, since the regulations assume the appropriation is fully funded) is surrendered 12 months after the end of that financial period. Under financial regulation 3.2, the amount surrendered under regulation 5.4 is deducted from the amount that member states are assessed at the start of the new financial period. The underspent funds from the 2024 budget are therefore used to offset assessments for 2026.
In December, the General Assembly decided that only member states who paid in full receive this offset to assessments. See General Assembly resolution 80/243, section XIV
United Nations. Improving the financial situation of the United Nations: Report of the Secretary-General (A/73/809). https://undocs.org/en/A/73/809
United Nations. Improving the financial situation of the United Nations: Report of the Secretary-General (A/76/429). https://undocs.org/en/A/76/429
United Nations. Improving the financial situation of the United Nations: Report of the Secretary-General (A/79/734). https://undocs.org/en/A/79/734