UN squeezed as US and China cut off funding···“Bankruptcy risk in August” - 경향신문
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The UN has fallen into severe financial distress and now faces a bankruptcy crisis. As the United States and China use assessed contributions as diplomatic and political ‘leverage’, the operating foundations of the organization are being shaken. Critics also say the episode exposes a structural vulnerability in which a core multilateral body of the international community depends excessively on the finances of particular countries.
UN Secretary General Antonio Guterres speaks at the 2026 Time100 Summit at Jazz at Lincoln Center in New York on April 22, local time. GettyImages/Imaejinseu
Antonio Guterres, the UN secretary general, recently warned in a letter to member states that “the UN is racing toward bankruptcy” and that “the possibility of a financial collapse of the organization is very high.” The UN expects that, if the current trend continues, its cash could be exhausted around mid August.
The core cause of the crunch is the United States and China, which shoulder a large share of the UN budget. The United States currently owes more than $4.2 billion (about 6.3 trillion KRW). China has recently paid part, but still has $455 million (about 680 billion KRW) outstanding. Since the two countries account for about 42% of the UN regular budget, the fiscal strain is intensifying.
UN flags fly at the International Atomic Energy Agency (IAEA) headquarters. GettyImages/Imaejinseu
The United States has effectively halted payment of assessments under the banner of UN reform. The Donald Trump administration is demanding restructuring across the UN system, withdrawing from or reducing support for international bodies including the World Health Organization (WHO).
US arrears now exceed a total of $4.2 billion, including $2.037 billion for the regular budget and $2.247 billion for the peacekeeping (PKO) budget. Recently, US ambassador to the UN Mick Waltz said the United States would pay a substantial portion of its assessments, but set sweeping cost reductions as conditions, including staff cuts, fewer trips, and expanded use of AI translation. Michael Desombre, a senior State Department official, said recently at the UN Security Council that this is “not a rejection of multilateralism but an effort to shift to a performance centered system instead of inefficiency.”
The United States still remains the largest humanitarian donor, providing about $3.8 billion in emergency humanitarian funding separately this year. However, the scale has fallen sharply compared with the past, when it provided more than $10 billion annually.
The United Kingdom and Germany are also reducing support to the UN, citing fiscal tightening, and Sweden and the Netherlands are likewise taking a cautious stance on funding international bodies amid a rightward shift.
Deliberate Chinese ‘late payment’···a strategy to expand influence?
Wang Yi, the Chinese foreign minister (left), poses for a photo with UN Secretary General Antonio Guterres at UN headquarters in New York, United States, on the 26th, local time. AP Yonhap News
China does not refuse to pay assessments, but in recent years has been criticized for delaying payment dates to exert influence over UN operations. According to UN analysis, while China used to pay early in the year, since 2022 it has increasingly delayed payment until near the end of the year.
China is making strategic use of the UN budget structure. The UN executes programs by fiscal year, and when major contributions arrive late in the year there is little time to deploy them. Unused funds must be returned to member states in the form of credits.
As a result, the organization suffers cash shortages throughout the year, repeatedly cutting staff, delaying programs, and postponing payments for peacekeeping costs. Guterres said the organization is “trapped in a Kafkaesque loop of being told to return money that does not exist.” Because the UN depends on member state assessments, it cannot borrow on its own.
China recently paid about $850 million on the occasion of Foreign Minister Wang Yi visiting the UN, but still has $455 million outstanding. Jodi Haenam of the UN Foundation said, “The United States is the most extreme case, but the problem is not limited to the United States,” adding, “China is also using the payment system strategically.”
UN peacekeepers in Cyprus patrol the buffer zone dividing the capital Nicosia on February 17, between the Republic of Cyprus in the south and the Turkish Republic of Northern Cyprus in the north. AFP Yonhap News
As the cash crunch has deepened, the UN has already embarked on sweeping austerity. It has implemented the largest budget cuts on record, reduced 3,000 Secretariat staff, and closed some offices. To secure cash, it is also accelerating withdrawals of peacekeeping missions from African conflict zones such as the Democratic Republic of the Congo. Reimbursements owed to troop contributing countries such as Nepal and Bangladesh have also been delayed.
Experts assess that simultaneous US arrears and Chinese payment delays have pushed the UN financial model itself to its limits. In October last year, Secretary General Guterres warned member states that they must either overhaul the financial rules from top to bottom or accept the reality of financial collapse.
Inside the UN, calls for reform of the financial system are growing. At a General Assembly budgetary meeting earlier this month, the Norwegian representative urged institutional changes, arguing that the current rule on returning unused funds is driving the organization into a vicious cycle of financial ruin. The Mexican representative likewise pointed out that the rule backfires and creates incentives that can lead to arrears and even non payment.
By contrast, speaking for the Group of 77 (G77) and China, a coalition of developing countries, the Uruguayan representative argued that “the biggest cause of the current crisis is the large scale US arrears” and that “all member states must pay their assessments in full without conditions.”
