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View all search resultsILO wracked by 'unprecedented' crisis: director-general
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International Labour Organization (ILO) Director-General Gilbert Houngbo speaks during a press conference after a meeting of the heads of international financial and economic organizations in Berlin on Nov. 29, 2022. (AFP/Tobias Schwarz)
T
he International Labour Organization is facing a "serious" and "unprecedented" financial crisis as it grapples with dramatic cuts in international funding, its chief warned Monday.
ILO, which plays a crucial role in protecting workers worldwide, is among a slew of organizations that have been left reeling as the United States has slashed foreign funding under President Donald Trump.
The United States has long been ILO's largest contributor, providing 22 percent of its funding.
But Washington is now lagging behind on its 2024 and 2025 ILO membership dues, with over US$173 million unpaid.
"The financial crisis we are facing is serious, it is unprecedented in recent decades," ILO Director-General Gilbert Houngbo told the opening of the 355th meeting of the organization’s governing body.
"It is already affecting our ability to meet the expectations of our constituents."
The United State is not the only country failing to pay up, with ILO saying the total amount of unpaid dues now amounts to around 250 million Swiss francs ($314 million).
That is "nearly a third" of the budget, Houngbo pointed out.
The agency published a document last month outlining reform proposals based on two financial scenarios.
The first scenario anticipates "a limited but sustained reduction of the real value of the regular budget".
The second scenario meanwhile "assumes a more significant shortfall of up to 20 percent in 2026-27, resulting from the non-receipt of a significant portion of the assessed contributions to the regular budget".
Houngbo told Monday's meeting that the latter was the most likely.
"Frankly, and in the interest of intellectual honesty: only scenario two reflects the reality we must prepare for," the former prime minister of Togo said, stressing that ILO was on a "trajectory dictated by the facts".
The organization, which was founded in 1919, anticipates some improvement in its cash flow early next year thanks to advance payments from several member states.
"But this will not change the fundamental fact: We must adjust our budget allocations and reduce our spending base by at least 20 percent," Houngbo said.
Several options are being considered, including a hiring freeze, staffing cuts and the relocation of some activities from pricy Geneva, including to Turin in Italy.
The document indicates that in the case where a $93-million budget cut is required, nearly 300 positions would be shed.
The organization has already had to shut down some 50 projects in the United States that depended on US funding, forcing it to lay off around 200 staff members out of a total of around 3,500, Houngbo said in May.
