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UNHCR faces liquidity crisis as U.S. policy, $6.1 billion gap strain budget

The U.N. refugee agency expects $3.9 billion in 2025 funding, contrasting sharply with its $10 billion 2024 approved budget.

Filippo Grandi says UNHCR faces not "simply a financial crisis" but more of a challenge that involves "political choices with disastrous financial implications."
Filippo Grandi says UNHCR faces not "simply a financial crisis" but more of a challenge that involves "political choices with disastrous financial implications." (AN/UNHCR)

GENEVA (AN) — The head of the U.N. refugee agency says it needs an immediate injection of at least $300 million to avoid a deficit this year.

Filippo Grandi told UNHCR's Executive Committee on Monday the agency faces a severe financial deficit and operational constraints: the $3.9 billion in available funds it expects to receive this year falls $6.1 billion short of its $10 billion 2024 approved budget.

"The last time we had less than $4 billion was in 2015, when the number of forcibly displaced people was half of what it is today," he said at a meeting inside the U.N.'s European headquarters at the Palais des Nations.

The severity of the funding shortfall due to cuts by the U.S. and other donor nations directly impacts the agency's ability to operate, Grandi stressed, particularly for refugees with the "greatest need for assistance" in low- and middle-income countries. "It is very difficult to help them right now with all the cuts that we have made to assistance," he said.

At its meeting this week, the committee is reviewing a projected 2026 budget that would be almost 20% less than in 2025 despite the soaring needs to help an estimated 123.2 million people worldwide who have been forcibly displaced due to persecution, conflict, violence, human rights violations and events seriously disturbing the public order.

"Clearly most of these humanitarian crises are man-made," Amir Muqam, a Pakistani federal minister responsible for frontier regions, including Kashmir, told the committee. "On the other hand, resources needed to respond to the growing needs of forcibly displaced worldwide are shrinking rapidly. The international community must support UNHCR."

Pakistan's Amir Muqam urged more support of UNHCR at its Executive Committee meeting.
Pakistan's Amir Muqam urged more support of UNHCR at its Executive Committee meeting. (AN/Pakistan Muslim League)

Challenge to international asylum principles

The financial crisis is unfolding alongside a direct policy challenge to UNHCR's core mandate on asylum, fueled by what Grandi described as a growing backlash against refugees, migrants, and foreigners.

On the sidelines of the U.N. General Assembly last month, U.S. Deputy Secretary of State Christopher Landau told a panel discussion the global asylum system no longer made sense.

"In our system at least, when these claims get adjudicated, 90-plus percent of people are found not to be eligible for asylum," said Landau, the second-ranked U.S. diplomat. "The asylum system has become a huge loophole in our migration laws. And we just have to be realistic about this, right?"

Landau proposed five key principles for a new international approach, including the assertion there is "no right to immigrate or to receive asylum or refugee status in the country of an individual's choice." He warned that if the system is not reformed "you're going to see countries saying, okay, we're not going to have an asylum system at all."

In response to the policy challenge, Grandi warned against changing asylum principles.

"In an environment where everything is highly politicized, putting the Refugee Convention and the principle of asylum on the table would be a catastrophic error," he said. "It would lead us down blind alleys and, ultimately, it would make the problem more difficult to address." 

UNHCR's core mandate on asylum is to provide international protection to refugees and seek permanent solutions for them, which includes ensuring all people can seek safety in another country and enjoy the fundamental human right of non-refoulement, or not being forcibly returned to a place where they would face serious threats.

"To understand the state of asylum today, and I include the recent cuts in foreign aid budgets, it is important to place it within a significant dynamic of the last decade: the general disillusionment of people with the institutions that are meant to represent them," Grandi said.

"There is a growing sense that new, simpler narratives are required to help explain our difficult and unstable world," he said. "This has implied setting aside approaches seen as no longer able to address the complex issues facing states and societies – approaches such as cooperation and compromise."

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