• The United Nations is facing a worsening cash crisis that threatens its ability to carry out vital work, Member States warned as the General Assembly’s Fifth Committee met to discuss the world body’s financial health.

• With a growing shortfall in contributions — $2.4 billion in unpaid regular budget dues and $2.7 billion in peacekeeping — the UN has been forced to cut spending, freeze hiring, and scale back some services.

• Officials warned that this risks eroding the UN’s credibility and its capacity to fulfil mandates entrusted to it by Member States.

• One proposed solution is to allow the UN to temporarily keep unspent funds at year’s end, instead of returning them to Member States as credits. Currently, this return is mandatory — even if the funds arrive late in the year, giving the UN little time to spend them.

• The UN regular budget operates on a calendar-year basis.  When Member States make their assessed payments late in the year — especially in November or December — the organisation has very little time to use those funds. As a result, much of the money remains unspent by year’s end, with opportunities being lost to implement planned activities and deliver results within the budget year.

• The suggested change would act as a buffer to keep operations running, particularly in January when payments tend to lag.

• While these fixes may help, several speakers emphasized that the root cause is the continued late or non-payment of dues. They noted such temporary measures won’t solve the underlying problem and urged Member States to support bold financial reforms.

What is the Fifth Committee?

The Fifth Committee is the General Assembly’s main Administrative and Budgetary Committee, where all financial and programme matters concerning the UN system are discussed.

Every year, it considers and approves the organisation’s budget.

Main committees of General Assembly are: 

• First Committee (Disarmament & International Security)

• Second Committee (Economic & Financial)

• Third Committee (Social, Humanitarian & Cultural)

• Fourth Committee (Special Political & Decolonisation)

• Fifth Committee (Administrative & Budgetary)

• Sixth Committee (Legal).

Where does the UN get its money from?

• The UN gets its money basically from all the countries. There are 193 Member States. 

• The UN regular budget funds the core administrative costs of the organisation, including the UN General Assembly, Security Council, Secretariat, International Court of Justice, special political missions, and human rights entities. 

• The regular budget is adopted by the Assembly and covers one calendar year (January 1 to December 31). 

• In addition, the UN maintains a distinct budget for peacekeeping operations, with the fiscal cycle July 1 to June 30.

• Most Assembly decisions related to the budget are adopted by consensus. 

• When budget votes occur (which is rare) decisions are made by a two-thirds majority of members present and voting, with each country having one vote. 

• The General Assembly determines a regular budget scale of assessments every three years based on a country’s capacity to pay. 

• The amount paid by Member States is based on a complex formula that includes the size of each country’s economy. Other elements include the country’s external debt, income per capita, and level of development. 

• The amounts range from a high of 22 per cent of the budget to 0.001 per cent, paid by the least developed countries.

• The United States is currently assessed 22 per cent, the highest of any UN member, followed by China (15.25 per cent) and Japan (8.03 per cent).

• For the fiscal year 2024, India’s assessed contribution of $32,895,257 was fully paid.

What happens if a country doesn’t pay its UN dues?

If the amount that a country owes is equal to what they were assessed to pay for the previous two years, they lose their vote in the UN General Assembly. They don’t get that vote back unless the General Assembly makes a special decision, or they pay enough to get below the two-year threshold, so they try to avoid owing that much.

Manorama Yearbook app is now available on Google Play Store and iOS App Store