Overcoming obstacles to reform

UNITED NATIONS

- NILIMA GULRAJANI JOHN HENDRA

At the 80th United Nations General Assembly this September, participants will have to confront the escalating development finance crisis that is engulfing the UN system. So far, responses to financial pressures have focused on cutting costs, such as by reducing overhead and improving efficiency. But a lasting solution will require deeper changes, which begins with a fundamental question: What kind of UN does the world need today, and are current funding models fit for purpose?

This year, a liquidity crisis created by nonpaying or late-paying governments means that the UN faces a shortfall of $2.4 billion (77.6 billion baht) in regular UN budget dues, and $2.7 billion in peacekeeping contributions. Moreover, if the UN fails to spend any funds before year’s end — say, because they were delivered late — it is required to return them to member states as credits, rather than rolling them over to the following year.

Despite plans to cut spending by 30% this year from its 2023 peak, the entire UN system is at risk of insolvency. Compounding the strain, aid cuts are undermining UN programmes, with the consequences being borne disproportionately by the world’s most vulnerable people. Shrinking budgets among some of the world’s largest donors — the OECD expects a 9-17% year-on-year decline in foreign aid in 2025 — exacerbate these problems.