Relevance: GS II (International Institutions) | Source: The Indian Express
1. The Context: “Imminent Collapse”
The United Nations is facing its worst cash crunch in history. Secretary-General António Guterres has warned that the organization’s operating cash could run out by July 2026.
The Cause: The crisis is not due to overspending, but due to non-payment of mandatory dues by member nations.
The Scale: Unpaid dues reached a record $1.568 billion by the end of 2025. Without cash, the UN cannot pay staff or fund its peacekeeping missions.
2. Who Owes the Money?
The United States: Traditionally the largest donor, the U.S. is currently the biggest debtor. It owes over $2 billion to the regular budget and another $1.8 billion for peacekeeping. Reports note that the U.S. administration made zero payments in 2025, drying up the UN’s reserves.
Venezuela: The second-largest debtor. Due to its chronic non-payment (exceeding two years of dues), it has already lost its Voting Rights in the UN General Assembly.
3. The “Refund Rule” Trap
A strange financial rule is making the crisis worse.
The Rule: If the UN does not spend its entire budget for the year, it is required to “refund” the unspent balance to member states (usually by reducing their future fees).
The Flaw: The UN is forced to return these “savings” even if the money was never actually received in the first place (because nations didn’t pay). This forces the UN to deplete its liquidity reserves to credit members for money it never had.
UPSC Value Box
| Concept / Article | Relevance for Prelims |
|---|---|
| Article 19 (UN Charter) | The “Penalty Clause.” If a member nation is in arrears (debt) for an amount equal to or exceeding the contributions due for the preceding two years, it loses its vote in the General Assembly. (Exception: If non-payment is due to conditions beyond control). |
| UN Budgeting | The UN has two main budgets: 1. Regular Budget: For core functions (Secretariat, etc.). Contributions are mandatory, based on a country’s “Capacity to Pay” (GNI, population, debt burden). |
Question
Q. With reference to the funding and voting rights in the United Nations, consider the following statements:
- Contributions to the UN budget are voluntary for member states and not legally binding.
- Under Article 19 of the UN Charter, a member state can lose its vote in the General Assembly if its financial arrears equal or exceed the amount of the contributions due from it for the preceding two full years.
- The United States is the largest contributor to the UN’s regular budget by assessment rate.
Which of the statements given above is/are correct?
- (a) 1 only
- (b) 2 and 3 only
- (c) 2 only
- (d) 1, 2 and 3
Correct Answer: (b)
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