Secretary General Antonio Guterres has warned that the United Nations faces “imminent financial collapse” amid unpaid annual dues and other issues that have drawn global reactions and concerns about the future of the global body.

Guterres sent a letter to 193 UN member states on Wednesday and urged them to pay their contributions; otherwise, the global body will run out of cash by July, according to multiple international media outlets.

He wrote in a letter to all the member states that they had to honour their mandatory payments or overhaul the organisation’s financial rules to avoid collapse, the BBC reported.

Experts and diplomats in Kathmandu warned that if the UN faces a financial crisis, as mentioned by the UN Secretary General, Nepal’s engagements with the global body will be affected.

Guterres said the UN ended 2025 with a record $1.568 billion in outstanding dues, more than double the previous year's level.

Al Jazeera on Friday reviewed the letter Guterres sent to the UN member states earlier this week, warning them that the global body faced a grave financial crisis.

The letter urged nations to agree to overhaul the UN’s financial rules or accept “the very real prospect of the financial collapse of our organisation” and called on them to pay their annual dues.

“The UN Secretary-General’s warning of an imminent financial collapse of the United Nations must be taken seriously by all member states,” former National Security Adviser and foreign secretary Shankar Das Bairagi wrote on X on Saturday. “For countries like Nepal, multilateralism—with the UN at its centre—is a vital pillar of global engagement.”

Various media outlets, including the BBC, have stated that the United States is the UN’s largest contributor, but President Donald Trump has said the UN is not fulfilling its “great potential” and has criticised it for failing to support US-led peace efforts.

The US did not pay its contribution to the UN's regular budget in 2025 and offered only 30 percent of its expected funding to UN peacekeeping operations.

Bairagi told the Post that if the UN falls into a financial crisis, several of Nepal’s engagements at the global level will be affected, ranging from participation in forums of the Least Developed Countries and Landlocked Developing Countries to taking part in other UN initiatives, such as peacekeeping.

Nepal is the largest troop-contributing country in the UN peacekeeping operations and has already faced a decline in its participation.

According to Nepali officials, if the UN continues to face financial crises like the current one, various social programmes related to health, education, disaster response, poverty reduction, and governance reforms will be hit badly. They will be delayed, downsized, or even cancelled, affecting rural and vulnerable communities the most.

Likewise, Nepal’s disaster response will be affected, as UN agencies play a major role in rapid emergency response and will be unable to meet that obligation without UN funding. Nepal would have to rely more on its limited domestic resources or on bilateral aid, a foreign ministry official said.

On the political front, according to a former foreign minister, the UN is a key platform for global engagement and helps balance relations among major powers. If the UN is weakened, Nepal would face more pressure from powerful countries directly and multilateral protection for smaller states would decline.

Moreover, the non-governmental sectors that receive UN grants and implement UN-funded projects will also face a job crisis. They will be forced to cut back on social services, in turn slowing down Nepal’s progress in meeting the sustainable development goals (poverty, gender equality, climate action).

“Our participation and engagement in peacekeeping operations and the climate fund will be affected. The most pressing issue is that the UN system is in crisis. It will affect multilateralism too,” said Bairagi.

There are also media reports of Trump’s proposal to create a “Board of Peace” that would oversee the rebuilding and reconstruction of Gaza. Some speculate that the effort aims to replace the UN in the long term.

“Trump’s initiative undermines the United Nations,” said Dinesh Bhattarai, who advised two prime ministers and served as Nepal’s ambassador.

According to the New York Times, the United States is responsible for nearly 95 percent of the money owed to the United Nations, totalling about $2.2 billion. That amount is a combination of the unpaid US annual dues for 2025.

Annual UN dues are mandatorily payable and set according to a country’s gross domestic product. A member state could be stripped of its voting rights at the UN for nonpayment.

As an LDC, Nepal’s annual contribution is relatively low. However, it will increase after Nepal graduates from the LDC, according to a Nepali diplomat based at Nepal’s Permanent Mission to the United Nations in New York. Nepal is set to graduate from the LDC category on November 24 this year.

In early January, the Trump administration announced it would withdraw from 31 United Nations entities, further demonstrating the United States’ negative view of the United Nations and its functions.

“Several UN agencies and programmes have already seen budget cuts. At least 20 percent of the budget of several UN entities and programmes has been slashed, affecting the staff, which would definitely have an impact. The budget for the peacekeeping operations has been trimmed by 27 percent,” said the Nepali diplomat in New York. Along with a reduction in the number of Nepali personnel on peace missions, climate financing also faces a crisis.

Bhattarai agrees. “The UN is regarded as a custodian of the world order, rule of law, and multilateralism. If the UN itself is in trouble, the UN’s principles will themselves face a crisis,” said Bhattarai. “From conflict resolution and promotion of dialogue for world peace to climate funding, every global emergency will be affected if the UN is weakened. We all know how the UN played a pivotal role during the Covid pandemic.”