The United Nations faces a severe liquidity crisis and could run out of operating funds by the end of August 2025, just weeks before its flagship annual gathering of world leaders, senior UN officials warned on Wednesday, 2 July. The warning comes despite an emergency procedural fix approved by the UN General Assembly that offers only partial relief.

The Finance Chief's Blunt Warning

Assistant Secretary-General Chandramouli Ramanathan, the UN's top finance official, stated plainly: 'We don't have cash beyond August.' He added that by September — when the UN's high-level general debate convenes with heads of state from around the world — 'money is gone.'

Ramanathan said the organisation would resort to accounting manoeuvres to keep the September meeting alive. 'We are going to make the high-level happen by scrounging around and stopping other payments,' he said, acknowledging the extraordinary nature of the measures being considered.

Who Owes What: The US and China Problem

The UN's regular budget — separate from peacekeeping operations — stands at $3.45 billion, already a 7 per cent reduction from the previous year. The two largest contributors, China and the United States, have yet to fully pay their assessed dues.

China, whose share amounts to approximately $635 million or 20 per cent of the budget, still owes about $430 million for the current year. The US, assessed at roughly $767 million or 22 per cent, has accumulated arrears of approximately $2 billion from prior years.

US President Donald Trump has been openly critical of the UN, withdrawing from several of its programmes. His administration is reportedly withholding contributions partly for ideological reasons, even though it has agreed to pay a portion of what is owed. Continued UN operations beyond August will depend largely on whether payments from Washington and Beijing materialise.

The 'Kafkaesque' Rule That Made Things Worse

Compounding the crisis was a longstanding procedural rule that required the UN to return unspent budget allocations to member states — even when those amounts were unspent precisely because member contributions had not arrived in the first place.

Secretary-General António Guterres described it as 'a Kafkaesque cycle' in which the UN was 'expected to give back cash that did not exist.' He elaborated: 'We were often required to return funds that we had not spent because we had not actually received them due to unpaid assessed contributions. This means that we have been hamstrung by a double blow: on one side, unpaid contributions — and on the other side, an obligation to return funds that never arrived in the first place.'

Notably, the United States was the biggest beneficiary of this arrangement — receiving refunds for contributions it had not made. In 2024, the US received a credit of approximately $65 million under this mechanism, even as its arrears mounted.

General Assembly Steps In — But Only Partially

On Tuesday, 1 July, the UN General Assembly voted to temporarily suspend the rule, breaking the cycle Guterres had described. Ramanathan acknowledged the move would help mitigate the UN's financial distress, though it falls short of resolving the underlying shortfall.

Of the 193 UN member states, only 119 have paid their assessed contributions so far. India paid its share of $35 million — representing 1.1 per cent of the budget — in February, placing it among the early payers.

What Happens Next

The UN's ability to function through the remainder of 2025 hinges on whether its two largest debtors make meaningful payments in the coming weeks. If they do not, the organisation may be forced to defer or cancel programmes, freeze hiring, and delay payments to vendors and staff — an outcome that would cast a shadow over the September high-level week even if the meeting itself proceeds.