Guterres warns of UN's 'imminent financial collapse'

GENEVA — The UN chief has told member states the organisation is at risk of "imminent financial collapse," citing unpaid fees and a budget rule that forces the global body to return unspent money, a letter seen by Reuters on Friday (Jan 30) showed.

UN Secretary-General Antonio Guterres has repeatedly spoken about the organisation's worsening liquidity crisis but this is his starkest warning yet, and it comes as its main contributor the US is retreating from multilateralism on numerous fronts.

"The crisis is deepening, threatening programme delivery and risking financial collapse. And the situation will deteriorate further in the near future," Guterres wrote in a letter to ambassadors dated Jan 28.

The US has slashed voluntary funding to UN agencies and refused to make mandatory payments to its regular and peacekeeping budgets.

US President Donald Trump has described the UN as having "great potential" but said it is not fulfilling that, and he has launched a Board of Peace which some fear could undermine the older international body.

Founded in 1945, the UN has 193 member states and works to maintain international peace and security, promote human rights, foster social and economic development, and coordinate humanitarian aid.

In his letter, Guterres said "decisions not to honour assessed contributions that finance a significant share of the approved regular budget have now been formally announced."

He did not say which state or states he was referring to, and a UN spokesperson was not immediately available for comment.

'Kafkaesque cycle'

Under UN rules, contributions depend on the size of the economy of each member state. The US accounts for 22 per cent of the core budget followed by China with 20 per cent.

But by the end of 2025 there was a record $1.57 billion (S$1.99 billion) in outstanding dues, Guterres said, without naming the nations that owed them.

"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," he said.

UN officials say the US currently owes $2.19 billion to the regular UN budget, another $1.88 billion for active peace-keeping missions and $528 million for past peace-keeping missions.

The US State Department did not immediately respond to a request for comment on the Guterres letter.

Guterres launched a reform task force last year, known as UN80, which seeks to cut costs and improve efficiency. To that end, states agreed to cut the 2026 budget by around seven per cent to $3.45 billion.

Still, Guterres warned in the letter that the organisation could run out of cash by July.

One of the problems is a rule now seen as antiquated whereby the global body has to credit back hundreds of millions of dollars in unspent dues to states each year.

"In other words, we are trapped in a Kafkaesque cycle expected to give back cash that does not exist," said Guterres, referring to author Franz Kafka who wrote about oppressive bureaucratic processes.

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