Shortage of financial resources within the United Nations system of organization
The UN is faced with a critical financial situation which leads to increasingly adverse effects on its reputation, as well as on the efficiency and effectiveness of its future operations. The situation, which has many intractable aspects of a political nature, is of long standing. In earlier years, the deficit, although steadily accumulating each year, was of manageable proportions. However, accommodations and compromises have increasingly had to be accepted in order that the UN can fulfil, in a meaningful manner, the basic purposes of its Charter. Although recourse to expediencies can be continued for a limited period, it is evident that cash and investment reserves (including balances temporarily available in trust and special accounts), have been virtually exhausted as a means of financing budgetary commitments.
In September 1991, the UN was owed more than $1 billion in unpaid dues and was heading for insolvency. Another $518 million was owed for peacekeeping operations. In August 1993, with a total cash reserves sufficient for less than two months of operations, the organization faced imminent financial crisis jeopardizing its peacekeeping operations in Yugoslavia, Cambodia, Somalia and elsewhere, with the implication that it might be unable to meet its salary commitments.
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