Gazeta Lodz - ILO financial crisis takes centre stage in leadership race

Alongside current ILO chief Gilbert Houngbo of Togo, two other candidates are seeking the United Nations agency's top post: Spanish Labour Minister Yolanda Diaz Perez and Peru's former foreign minister Javier Gonzalez-Olaechea.

They took part in an hours-long public event in Geneva Wednesday, presenting their platforms and answering questions from government, employer and employee representatives.

The ILO is facing a serious financial crisis, with a $363-million deficit, Diaz Perez warned.

"Continuing on this path is not an option... Continuing this way will lead to the total decline of this institution," she added.

- Jobs cuts planned -

The UN labour agency's mission is to promote workers' rights and improve working conditions.

However, the Geneva-based agency has recently faced turbulence amidst slumping international funding, especially from the United States, traditionally its biggest contributor.

It recently drafted a reform plan involving cutting up to 120 jobs.

The top priority, Houngbo said, was "to finish up the reform", and ensure "the medium- to long-term financial viability of the institution".

He insisted that it was "within reach" to fully implement the reform, which he said was "expected to generate significant efficiency gains, including savings of approximately 12.5 percent".

Houngbo also proposes maintaining current levels of member state contributions and pledges and to cap the agency's spending at 75 percent of available resources, "creating a buffer of 25 percent".

He said he aimed to establish a reserve fund to help the ILO weather future shocks.

- US arrears -

The ILO has traditionally relied on the United States for the bulk of its funding -- 22 percent of the budget -- but according to the agency's website, Washington has accumulated arrears totalling more than 173 million Swiss francs ($214 million) for 2024 and 2025.

It has also yet to pay its 2026 contribution of 84 million francs, the ILO says.

The Spanish candidate however emphasised that the ILO's financial crisis was not solely due to a single member state's failure to pay. US cuts to other parts of the multilateral system had not had the same impact, she noted.

"The financial management of this crisis has been flawed," she charged, proposing that the ILO diversify its funding sources.

Gonzalez-Olaechea also argued for a "financially viable" ILO, saying the situation was "not an insoluble puzzle".

He pledged to engage in dialogue with states in arrears to understand why they had failed to meet their obligations and to persuade them to settle their dues.

The vote, by secret ballot, will take place on November 16, with the next ILO chief's term set to begin in October 2027.

H.Zajac--GL