- ‘This is the biggest crisis for the entire UN system,’ expert on UN financing Ronny Patz tells Anadolu

- ‘It's been a tough year, even a devastating year at UNHCR and for refugees,’ UNHCR spokesperson Matthew Saltmarsh tells Anadolu

- ‘We are having to most importantly reduce the assistance that we give to our refugee programs around the world,’ says Saltmarsh

ISTANBUL

The UN is facing what experts describe as the deepest financial crisis in its 80-year history, triggered by donor cuts, withheld payments, and shifting global priorities.

As the world’s largest multilateral body struggles to sustain operations, experts warn the crisis could soon paralyze everything from peacekeeping to refugee aid, raising doubts about the UN’s ability to function.

“From what I know, this is the biggest crisis for the entire UN system, which makes it so hard to respond to it,” said Ronny Patz, an expert on UN financing. “Because if it's just an individual part of the system affected, you can more easily respond to that while when the whole system is affected, where do you start?”

On Oct. 17, UN Secretary-General Antonio Guterres warned the organization faces a “race to bankruptcy” unless member states pay their dues in full and on time. He proposed a reduced $3.238 billion regular budget for 2026 — down 15% from 2025 — with staffing to drop by nearly 19%, from 13,809 to 11,594 posts.

US freeze at the center

At the heart of the crisis is the US’ decision to withhold its regular contribution to the UN’s core budget, a move experts link to political opposition under the new Trump administration.

The US, historically the UN’s largest donor, contributes about 22% of the regular budget and billions more in voluntary humanitarian aid. In 2023, it accounted for 28% (around $13 billion) of total UN funding, according to the CATO Institute.

This year, the US share of the UN’s $3.5 billion regular budget was $820.4 million, much of which has been delayed or frozen, according to PEW Research.

Earlier US withdrawals from the World Health Organization (WHO) and Human Rights Council had already shaken global trust in the UN, but the latest freeze strikes deeper. “The US was also a very big donor. They have cut not just the obligatory core contributions but also voluntary financing,” said Patz.

Programs heavily reliant on US funds, such as the UN peacekeeping missions, World Food Program, WHO, and the UN refugee agency (UNHCR), are among the hardest hit.

In August, the Trump administration moved to cut $5 billion (€4.3 billion) in foreign aid that was already allocated by Congress earlier this year, using a pocket rescission.

The move aims to cut billions in programs, including the funding of peacekeeping operations abroad.

Domino effect across donor nations

Experts warn that the ripple effect is global. Traditional donors like Germany, the UK, and the Netherlands are cutting aid due to domestic fiscal pressures.

“When the US has withdrawn in the past, other governments would jump in to fill the gaps. But this year, those governments are also cutting down or at least discussing cuts to their aid budgets,” Patz said.

China and Russia are also underpaying or delaying payments.

“China, which contributes around 20% of the UN’s regular budget, and instead of paying their contribution at the beginning of the year as it is legally required, (they) are paying it in multiple installments across the year,” Patz said.

Russia claims sanctions block fund transfers, though it paid last year.

A cycle of underspending

The UN’s budget rules have worsened the crisis. When dues go unpaid, the UN cannot spend its full approved budget and must refund the unspent portion two years later.

"So let’s say they have a budget of 3.7 billion, but because the US doesn’t pay, they can only spend $3 billion of that budget. Two years later, this discrepancy, this underspending has to be paid back to member states by the legal rules of the organization,” Patz explained.

This rule, he said, turns a funding gap into a structural crisis. In 2026, the UN will lose about $300 million due to underspending in 2024. Combined with 15% budget cuts, it could operate on just 60% of its 2024 budget.

Reform or rescue?

To address the crisis, the UN launched UN80, a restructuring initiative aimed at streamlining agencies. Guterres said the organization has faced a liquidity crisis for seven years due to inconsistent payments.

But analysts doubt reforms can offset the scale of losses.

“UN80 is a response to a bigger financial crunch of the wider UN system. It was estimated in June that this crunch was about 30% of overall finances … from $67 billion down to around $50 billion this year,” said Patz.

He estimates reforms could save 5-10% in the long term. “The UN is managing this big financial crisis and is trying to just stay afloat. At the same time, they are asking the same people to reflect on a better future – it’s a very high demand on member states, but also on UN staff.”

Humanitarian toll: ‘Devastating’ year for refugees

The crisis has hit humanitarian agencies hardest. The UNHCR faces a historic shortfall that has forced deep cuts across operations.

“It’s been a tough year, even a devastating year at UNHCR and for refugees,” said spokesperson Matthew Saltmarsh. “The US was our most important donor. Previously they gave us about 40% of our funds, but it's not only the US, other donors, particularly states in Europe and East Asia, have been giving us less money.”

This year, the agency reduced by around 60% the financial and cash assistance and emergency aid that it provides. “I don’t think there’s going to be any one country or region that is the most affected,” Saltmarsh said.

In Sudan, safe spaces for survivors of gender-based violence have closed, leaving 80,000 women and girls without support. In Afghanistan, 450 health centers have shut down. In Ukraine, around 1 million people may lose cash aid, and in Bangladesh, half a million Rohingya children will miss schooling.

“At the moment, we’re looking like we will have a budget of about $3.9 billion for this year. That’s around one quarter less than last year,” said Saltmarsh, adding they face an urgent shortfall of $300 million to continue programs.

That level of funding, he noted, is similar to a decade ago, though the number of forcibly displaced people has doubled since then.

Shifting global priorities

Experts see the UN’s financial woes as part of a wider shift in global spending priorities.

“What we are seeing globally, geopolitically, is that quite a lot of money seems to be being diverted towards the defense and the security sector rather than the humanitarian sector,” said Saltmarsh.

“It may be that there is a sense of donor fatigue,” he said, adding that a number of countries are looking at their economies and trying to focus on relaunching them and providing social support within their own borders.”

Humanitarian funding, however, remains tiny compared with global defense spending. “Yet neglecting risks global instability. When fragile regions collapse, insecurity spreads – it’s in every country’s interest to act before that happens.”

What comes next?

Patz believes the only way forward is to mobilize new donors, particularly emerging economies and BRICS members.

“The organization needs urgent funding to protect its core structures: logistics, peacekeeping, coordination,” he said. “If those collapse, rebuilding them later will be far more expensive.”

He dismissed hopes of a quick turnaround from Washington. “Donald Trump is not going to come back with UN financing this year or next year unless something very surprising happens. So, either they support the UN system or no one will.”

Analysts expect 2026 to be the low point. “2026 will be the year where we actually will be seeing the full scale of the crisis. My estimate is that 2026 may be the low year, the worst year to come,” Patz said.

For now, time is running out.

"Secretary General Guterres said that he will have to close UN buildings around the world, on the 1st of January, until a budget is adopted, which means that either member states until the 31st of December change the rules for the organization or they come together and agree on a functioning financial, budget for the organization," Patz said.

“Either member states change the rules or they come together and agree on a functioning financial budget for the organization.”

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