UN official warns of serious financial “crisis” due to coronavirus in leaked documents

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The United Nations – The United Nations is facing a “serious” liquidity crisis as it faces additional costs linked to the need to “respond to the global health crisis” of the coronavirus, according to an email from Movses Abelian, the undersecretary General of the UN for the General Assembly and conference management. This email was sent to explain a memo from Assistant Secretary General for Management Catherine Pollard, and both documents were obtained by CBS News.

“Although the immediate impact of moving to alternative working conditions in response to the COVID-19 epidemic will lead to reductions in travel, contractual services and general operating costs in all budgets, we also anticipate new demands on our operations and services as we respond to the global health crisis, “wrote Pollard in his April 1 memo.

Pollard said that due to the “deteriorating liquidity situation both in the regular budget and in peacekeeping operations, the Secretary-General has ordered additional measures in all entities of the Secretariat to manage expenditure and cash ”.

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The austerity measures described in the memo, she wrote, “will hamper our ability to carry out the work of the Organization at a time when the world needs the United Nations more than ever.”

She said the UN “will incur unexpected expenses in the aftermath of the COVID-19 pandemic.”

The CEO said that contributions for regular budget contributions fell sharply in the first quarter of 2020 compared to previous years, explaining that the payment of contributions by member states “resulted in a recovery gap of more than 220 millions of dollars “.

The note notes that the United Nations will temporarily suspend all hiring for regular budget vacancies and “postpone all discretionary spending unless it is directly and immediately related to ongoing mandated activities, which are not affected by restrictions caused by the pandemic. “

Peacekeeping operations around the world are also facing “growing pressure on cash,” she said. The current cash flow of about $ 1.4 billion is “barely sufficient” to maintain field operations until the end of June.

“There is no room for payments to troop and police countries for the quarterly cycles of March and June, which will require nearly $ 1.1 billion,” wrote Pollard. “I am counting on your cooperation, collaboration and support to ensure that we can continue our operations despite the serious financial constraints we face. “

Abelian sent an email with further explanation of the Pollard memo, also obtained by CBS News, that the global organization uses most of its reserves: “During the first three months of the year, the Secretariat used the bulk of the carry-over cash balance from 2019, which fell from around $ 200 million to $ 50 million in early 2020. ”

Also on Wednesday, United Nations Secretary-General Antonio Guterres wrote to 193 member states that the United Nations is facing “increased financial constraints” related to the coronavirus, coupled with deficits linked to lower contribution payments set by countries in addition to arrears. by many countries, UN spokesman Stéphane Dujarric told reporters.

“We ended 2019 with arrears of $ 711 million, the highest level in a decade and a 34% increase from the previous year,” said the UN chief in his letter.

The UN chief has already sounded the alarm. In October 2019, he warned of a liquidity shortage in the United States and urged countries to pay to “avoid a default,” which many countries have done.

But spending on the coronavirus and the inability of countries to pay this year presented yet another crisis. As a result, Guterres launched two funds, one for $ 2 billion to help countries affected by the virus, and another dedicated to the pandemic where he called for 10% of global GDP, 8 to 9 trillion of dollars.

The World Health Organization, a specialized UN agency that is funded separately, also sounded the alarm, calling for contributions.

“WHO, the United Nations Foundation and its partners launched a first COVID-19 solidarity response fund to raise funds from a wide range of donors and support the work of WHO and its partners to helping countries respond to COVID-19, “Tarik Jasarevic, spokesperson for the World Health Organization, told CBS News on Saturday.

The COVID-19 Response Fund says it needs total resources of $ 675 million and has received $ 274 million with $ 47 million in contributions, including $ 15 million from the United States.

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