The U.N. has had shortfalls in the past. In fact, the organization’s most serious financial crisis erupted in the 1960s, when the Soviet Union and France both withheld dues to protest what they saw as a misguided peacekeeping operation in the Congo. But the current crisis has much more to do with the U.N.’s troubled relationship with the United States.
Who pays, and who doesn’t?
Like most multilateral organizations, the United Nations funds its operations through a system of annual dues. The organization uses factors including a country’s economic size and wealth to assess its “capacity to pay” and determine its annual bill. Very poor countries get a break, but every country pays something — the poorest nations typically owe around $30,000.
For an economic powerhouse like the United States, however, the annual bill is substantial. For 2019, the United States owes more than $600 million, 22 percent of the total U.N. regular budget. There are separate bills for peacekeeping operations, for which the United States pays an even larger percentage.
The U.N. accords its members 30 days from the beginning of the calendar year to pay their dues. Some countries do so immediately — leading the way this year were the Dominican Republic, Estonia and Malawi, all paid up on Jan. 1. They were followed in short order by larger contributors, including Canada and Australia.
But only 34 of the 193 U.N. members settled their tabs within the 30 days allotted. Almost 100 other countries, including heavyweights China, Germany and Japan, paid in full — but late. More than 60 countries still owe their dues, and these include significant contributors such as Brazil. But of the laggards, the United States is by far the most consequential.
In part because of the U.S. government fiscal cycle, Washington typically pays its U.N. bill late. But this year’s tardy check is producing an unusually severe cash crunch. By the middle of the calendar year, the United Nations has typically spent down much of its cash and resorts to several reserve accounts to cover the bills.
In recent years, the organization has dipped into its reserve accounts earlier and more deeply, meaning the fiscal cushion to cover operations is threadbare. The secretary general reported the organization began 2019 with just $30 million in reserves, far less than in previous years.
But is there more to the U.S. story this year?
Friction between the United States and the U.N. over money is nothing new, and U.S. legislators have often been front and center in the financial drama. Since the 1980s, lawmakers have regularly used the purse strings in an attempt to reduce the U.S. share of the U.N. budget and extract other overhauls.
In an environment of sometimes intense congressional skepticism, U.S. administrations have sometimes found themselves mediating between legislators and the United Nations. In the 1990s, Ambassador Richard Holbrooke patched together a compromise with Sen. Jesse Helms (R-N.C.), chairman of the Senate Foreign Relations Committee, to reduce America’s dues in exchange for U.S. payment of almost $900 million in accumulated arrears.
Fast forward to 2019, and President Trump’s core conviction that the United States bears unfair burdens on the international stage — it’s logical to see the current crisis as one more battle in Trump’s war to get the United States a better deal. In a 2017 meeting with the U.N. secretary general, Trump insisted “no member state [should] shoulder a disproportionate share of the burden.” In a tweet last week, Trump suggested that restoring the U.N. to financial health was the rest of the world’s responsibility.
But the president’s tweets do not appear to reflect any coherent policy. The current delay in payment isn’t part of a coordinated U.S. policy of forcing a change in U.N. assessments. The U.N. does not revisit assessments until 2021, in any case.
Brett Schaefer, a Heritage Foundation expert and member of the U.N.’s Committee on Contributions, told me that complications resulting from the long-standing U.S. practice of paying its U.N. dues toward the end of the calendar year have been exacerbated by broader legislative and bureaucratic issues. According to Schaefer, Congress’s failure to pass a full budget resolution and the State Department’s delay in issuing several congressionally mandated certifications have reduced funds available for payment.
The U.N. is carefully navigating choppy financial waters
As it waits for Washington’s check, the U.N. leadership is ginning up support among U.N. members for steps to mitigate future financial stress. One solution might be to more effectively threaten consequences for nonpayment. Article 19 of the U.N. Charter provides that a country can lose its vote in the General Assembly — although not its vote in the more powerful Security Council — if its accumulated debt exceeds two annual payments. The secretary general has asked member states to consider lowering that debt threshold, so that losing the vote is a more credible threat.
Other proposed solutions include replenishing and expanding the U.N.’s reserve accounts and instituting more flexible budgeting procedures that will allow the U.N. to shift money between different accounts. These measures could all help at the margins.
But the multilateral organization’s fraught relationship with its largest contributor all but ensures future financial instability. Whatever the Trump administration’s precise calculation, America’s failure to pay poses an immediate challenge for Kelly Knight Craft, the newly installed U.S. ambassador to the United Nations.