THE SECRETARY-GENERAL

4 October 2019

Excellency,

The United Nations is confronting the worst regular budget liquidity crisis
in recent years.

The ongoing financial uncertainty is threatening our ability to fully

implement the mandates placed upon us by Member States.

On 2 August 2019, I wrote to express my profound concerns about the

situation and appealed for concerted action to resolve it. I conveyed my gratitude
for action on some of my proposals to improve the timeliness of our reimbursement
to troop and police-contributing countries, but I also underscored my deep worry
that the underlying regular budget crisis had not been addressed.

In January, we assessed Member States for an amount of $2.849 billion, of

which we have received $1.990 billion. However, our real liquidity needs for 2019
are higher, owing to additional mandates approved and being implemented in 2019
but not yet assessed, as well as delayed expenditures from 2018.

As a result, we now face a liquidity crisis that is worse than any the
Organization has confronted in at least a decade. Contributions by Member States
by the end of the third quarter have fallen to a mere 70 per cent (of the current year’s
assessment) compared to 78 per cent last year. For 2019, this translates to an
additional shortage of over $230 million.

The Secretariat has taken a number of significant measures to align

expenditures with projected cash inflows. Without these steps, our cash shortfall
may have been as high as $600 million in October.

Despite these meaningful efforts, the crisis is perpetuated as inflows trickle

in slower than in the past. This is exacerbating an already difficult situation.
Liquidity mechanisms are failing us.

Had we not contained expenditures globally from the beginning of this year –
by adjusting hiring and postponing non-post expenditures to adapt to the liquidity
flow – we would not have had the liquidity to support the opening of the General
Assembly debate and the mandated high-level meetings last month.

All Permanent Representatives of

Member States of the United Nations
New York
 By July, we had started borrowing from the Working Capital Fund, and by
August we had to borrow from the Special Account as well.

By late September, we had to borrow from the closed peacekeeping

missions, as regular budget cash reserves were so severely depleted that we risked
problems with payroll payments or defaults in vendor payments.

By the end of this month, we risk exhausting the closed peacekeeping cash
reserves, and surpassing the record cash deficit of last October. We therefore risk
starting November with not enough cash to cover payrolls.

I am reaching out to Member States with an urgent plea to pay outstanding

assessments. In order to minimize disruptions to our operations, and to ensure that
we can meet our contractual obligations to staff and vendors, I have been forced
to take additional stop gap measures to manage the situation until the liquidity
improves. Further measures may be introduced if the situation does not improve
drastically.

I have limited all official travel to the most essential activities, and I am
further reducing all other non-post expenses with immediate effect. This includes
postponing purchases of goods and services, implementing energy-saving and other
measures to reduce utility bills and temporarily curtailing expenses on managing
facilities.

Starting 14 October 2019, we will discontinue events before or after official

meeting hours at all headquarters duty stations and during weekends. Events that
have already been booked for after that period will be reviewed as we cannot
guarantee their continuance. I urge you to consider postponing or finding alternative
venues for non-mandated events.

I have directed managers to explore avenues to further limit expenses during

the last quarter, including postponing conferences and meetings, or seeking ways to
reduce related expenses by adjusting services. We will continue to review our
activities to seek better options to manage the liquidity crisis and will keep all such
measures under periodic review.

I once again appeal for you to mobilize the will and wherewithal to solve this
problem that is undermining our ability to serve the people who look to us to support
them.

I am grateful to the 127 Member States that responded to my calls and have
paid their contributions to the regular budget in full. I trust that all others will do so
urgently.
 But, as I have repeatedly stated, even if all Member States pay in full and
on time, we will still face significant shortfalls owing to restrictions imposed on the
management of our budgets that defy common sense. We therefore must increase
our liquidity reserves and address the structural problems that undermine our
management of the budget.

It pains me to convey this message to you yet again, but I trust that you will
appreciate the gravity of the challenges and commit to resolve them without any
further delay.

Please accept, Excellency, the assurances of my highest consideration.

António Guterres