The UN is politically embattled these days. It is also seriously cash-strapped. The Palais des Nations will shut down from December 20 and reopen on January 7 in a cost-saving effort to offset increased electricity costs unaccounted for in its regular budget for 2023. “During that period, staff members will be required to telecommute full-time, unless their presence onsite is required or authorized,” the roughly 1,600-strong Geneva-based UN staff was informed by email, essentially being asked to return to the same arrangements put in place during the COVID-19 pandemic. Provisions have been made for “enhanced teleworking flexibility” so “operations may continue smoothly,” the United Nations Office in Geneva (UNOG) announced.
Temporary closures of additional facilities are not ruled out, should the cost-saving measures not be enough. The internal communication also explains that “an exceptional arrangement has been put in place to help UNOG staff members combine their end-of-year holidays” with the Palais’ closure. “UNOG managers are invited to consider favorably requests for telecommuting from outside the duty station in conjunction with the campus closure and potentially in connection with annual leave requests,” it says.
Energy saving measures have already been in effect since October. “In response to a budget shortfall at UNOG, resulting from high energy prices and worsened by the impact of the ongoing liquidity crisis, we are currently intensifying our energy conservation efforts,” UNOG wrote back then, explaining that the first round of measures was justified by the need “to ensure the continuation of our mandated activities supporting peace, rights, and wellbeing.” By early October, escalators were stopped, and outdoor lighting was dimmed. EV chargers have also been disconnected until further notice. Diplomats were advised to bring extra clothes as the temperature was lowered to 20.5°C, while staff members were also invited to participate in the effort by using natural lighting wherever possible, turning off lights, computers, and other electronics when leaving rooms and using stairs whenever feasible.
None of this comes as a surprise. In early October, the UN’s senior management informed the Member States’ representatives sitting on the organization’s finance body, the Fifth Committee, that the liquidity situation was severe, with consequences possibly extending through next year, as dues by some Members States remained unpaid.
Catherine Pollard, Under Secretary-General for Management Strategy, Policy and Compliance, said the lagging collection rate had already forced the Secretary-General to impose temporary hiring restrictions, while also resorting to borrowing from the Working Capital Fund in August and the Special Account in October, an exceptional measure.
“If collections in the fourth quarter do not pick up significantly, we could end 2023 […] with a cash deficit that would worsen liquidity pressure in 2024,” Pollard said.
A Chronic Problem
UN’s management has been adjusting its operations to account for temporary financial difficulties for years; curtailing or postponing expenditures, juggling with the fact that expected financial resources may not materialize as expected. 2021 was a bad year, but no spending restrictions were needed in 2022. 2023 has been another difficult year: In her report, Catherine Pollard notes that the UN collected $18 million less than anticipated in the first quarter, and collections of dues have continued to trail for the rest of the year. “The gap was $69 million at the end of the second quarter and increased to $216 million at the third quarter’s end,” she said. “We now await the outcome of the fourth quarter. All through the year, we had been hopeful that we would collect 100 per cent of assessments in 2023; that seems improbable now, potentially reversing a healthy trend of the last two years,” she informed the Member States in October.
Unpaid assessments [the financial dues owed by Member States] increased from $1.2 billion at the end of September 2022 to $1.3 billion by the same date this year, “indicating a worrisome trend.” 56 Member States had not paid their assessments to the regular budget in full as of 30 September 2023.
In 2023, the United States was responsible for the largest proportion of unpaid regular budget assessments, owing $930 million as of 30 September. China was second, with unpaid dues of $246 million. The liquidity crisis is also seriously impacting the UN Peacekeeping Operations.
According to the UN, total payments and credits in the last four fiscal years have ranged from $2.6 billion to $3.7 billion, resulting in unpaid contributions, as a percentage of assessments, ranging from 63 per cent to 87 per cent.
“Unless this trend is reversed by Member States making payments in full and on time, the current liquidity problems facing peacekeeping operations will continue and impact the reimbursement of troop and police-contribution countries,” the UN’s Pollard reported.
Back in Geneva, the closing of the Palais should save around CHF 135,000, according to UNOG’s Director of Information Service Alessandra Vellucci. New York won’t be affected.
If you’re curious about what countries have not aid their dues yet, click here.