[EXCLUSIVE] WHO Member States Clash Over Proposals to Slash Budget in Light of Financing Crunch
Newsletter Edition #250 [The Files In-Depth]
Hi,
The World Health Organization is at the cusp of a pivotal moment. Could the current financing crunch irrevocably alter its mandate? Is it just about the numbers? As always, there is politics and opportunism in every crisis that unfolds.
That is the story in today’s edition, as we examine the closed door discussions on financing matters that unfolded in Geneva last week.
Today as countries gather for WHO’s Executive Board meeting, the financing question will be front and centre at this meeting.
As always, we make every effort to bring our readers exclusive analyses in the midst of the turmoil that has gripped global health set off by the Trump administration’s decision on not only withdrawing the U.S. from WHO, but also setting in motion a funding freeze affecting implementing organizations globally, and potentially costing lives.
We are watching how stakeholders will shape the ongoing, somewhat forced transition at WHO.
Watch out for our updates from WHO’s EB this week.
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I. EXCLUSIVE: EB156-PBAC41
WHO Member States Clash Over Proposals to Slash Budget in Light of Financing Crunch
Countries are sharply divided over a proposed plan to slash the budget of the World Health Organization in light of the financing crisis sparked off President Donald Trump’s decision to withdraw the U.S. from the organization. Though the U.S. is the largest funder of WHO in the current biennium period, not all WHO member states see the situation as dire.
At the deliberations that unfolded this past week during the meeting of the Programme Budget and Administration Committee of the WHO Executive Board (PBAC) [January 29-January 31], diplomatic sources spoke about difficult and intense discussions on financing.
We reported last week that WHO has worked on a budgetary proposal for the next biennium of 2026-2027 pegged at US$ 7.4 billion, an increase of 9% over the previous period.
That proposed budget is now being hotly debated with mostly donor countries suggesting a lower budget to factor in the loss in funding from the U.S. On the other hand, many developing countries appear to be of the view that any shortfall from the funding on account of the Trump Executive Order, can be met by other funding sources. To be sure, at this point there is no clarity yet on how the hole in the budget can be filled.
While there is an overall acknowledgement by many countries both developed and developing ones, that WHO can be more efficient with its resources, there are also concerns on the implications of a shrinking budget on the mandate of the organization.
Some believe that the financing question masks an emerging power struggle among member states at WHO that could eventually have an impact on the future direction of the organization.
In a report to the Executive Board released just a few hours ago, the PBAC recommends a proposal for a reduced base budget for WHO’s operational activities to US$4.9 billion from US$ 5.3 billion. (See more below.)
The budgeting matters will be taken up at the WHO Executive Board meeting beginning today. WHO has time until April-May to raise additional funds, and to get countries to adopt the new budget for the next biennium at the World Health Assembly.
For this story, we spoke with several diplomats on site at the sidelines of the PBAC meeting this past week.
THE PBAC MEETING [JAN 29-JAN 31]
At the meeting last week, countries discussed the proposed Programme Budget for the next two-year period 2026-2027. (The financial period for WHO’s programme budget is two consecutive calendar years.)
WHO has estimated that it would require US$ 7.4 billion as the total proposed budget for 2026-2027, a 9% increase from the previous biennium. This proposal is based on its strategy – the Fourteenth General Programme of Work (GPW 14).
The following are the components of the Programme Budget for the next biennium as per documents that will be considered at the EB this week:
Base Programmes: the core mandate of WHO and the largest part of the budget pegged at US$ 5.3 billion. This reflects an increase of US$ 355.9 million from 2024–2025, and will go towards strengthening technical capacities at the country level, enhancing accountability, and supporting global technical centres.
Emergency Operations and Appeals: includes WHO’s operations in emergency and humanitarian settings, as well as its response to acute events. The reference budget is US$ 1 billion.
Polio Eradication: represents WHO’s share (US$ 976.3 million) of the implementation of the Global Polio Eradication Initiative strategy budget.
Special Programmes: includes special programmes that have additional governance mechanisms and budget cycles that inform their annual and biennial budgets (US$ 172.8 million).
Typically, for the purposes of understanding WHO’s strategic and operational needs, the base budget is what is considered (US $5.3 billion).
BUDGETARY OPTIONS DISCUSSED AT PBAC41
Diplomats told us that a number of options were presented to countries indicating different scenarios of the base budget including keeping the same target as being proposed to the EB US$ 5.3 billion; a second option of reducing it to US $5.04 billion; a third option of US$ 4.77 billion; and a fourth option of US$ 4.9 billion. (See figure below discussed last week). [The PBAC eventually recommended the fourth option]
It is understood that some countries were in favour of a fourth option of restricting the base budget to around US$ 4.9 billion. This option appears to factor in costs for country strengthening and accountability, overheads that are understood to be met with membership fees (assessed contributions) from countries.
Last week many countries were of the view that WHO’s proposed base segment of the budget needs to be preserved at the proposed level of US$ 5.3 billion.
“The loss in financing as a result of the U.S. is not insurmountable. We can address that gap,” a developing country diplomat told us.
According to WHO, the US contribution for the 2024-2025 biennium is a total of US$ 706 million: US$ 264 million in assessed contributions and US$ 442 million in voluntary contributions (16% of total Voluntary Contributions).
“It is absurd that some countries do not see the situation in front of them. If we are facing a 20% reduction in financing we have to take measures to cut costs based on the facts we have,” a developed country diplomat told us after intense discussions at the PBAC last week. “There cannot be a business-as-usual approach,” the diplomat added.
Apart from the voluntary contributions that are earmarked, WHO is staring at a loss of assessed contributions from the U.S. at an estimated US$ 135 million per year. This is substantial, because ACs are unearmarked resources that can be used flexibly as per the needs of the organization, and come with no conditionalities.
Sources said that significant positions and work streams are funded by the resources from the U.S. There is little chance that such a big gap can be filled quickly, diplomats fear.
WHO is now in the midst of its first investment round to raise more flexible and predictable funds. And has time till May 2025, when the Programme Budget will be adopted at the World Health Assembly.
Diplomats also asked why WHO secretariat was so under-prepared for this situation. “Did they not know that Trump was going to withdraw financing. Everyone was expecting it. Why are they so unprepared for this eventuality,” a rich country diplomat asked. This was a view that has been echoed across the board among many countries.
WHAT DID PBAC RECOMMEND?
In its report to the EB just published earlier today, the PBAC has recommended US$ 4.9 billion as base budget for the next biennium.
See excerpts from the PBAC report:
“17. The Committee underscored the importance of continuing to strengthen the financial sustainability of the Organization and stressed support for the scheduled 20% increase in assessed contributions.
18. In response to the expected decrease in financing in the biennium 2026–2027 as a result of the notification by the United States of America of their withdrawal from the Organization, the Secretariat outlined three options for the Proposed programme budget 2026–2027: to proceed as currently proposed (option 1); to reduce the budget to the level of the Programme budget 2024–2025, but add the increase for the global technical centres (option 2); or to reduce the budget in the light of the current economic and financing situation (option 3). The Secretariat explained that the global technical centres are included as a separate budget line.
19. Some Committee members noted that the choice of option 1 would send a clear message on preserving the strategic direction and ambitions of the Organization. At the same time, the Committee acknowledged that with the departure of the biggest financial contributor, the budget could not be “business as usual”, and that the principle of realistic budgeting was paramount in order to ensure alignment with economic and financial realities. The Committee discussed and agreed to propose to decrease the base segment of the Proposed programme budget 2026–2027 to US$ 4.9 billion (option 4). The Committee raised the concern that a US$ 4.9 billion budget reflected a negative nominal growth compared with the prior biennium, and that this should be taken into account in future budget discussions. It requested the Secretariat to present detailed figures for assessed contributions by Member State, with calculation methods, as early as possible.”
WHAT DOES A SMALLER BUDGET MEAN?
A smaller budget would mean hard choices and reprioritization of WHO’s mandate as determined by countries. This is in theory.
Considering that nearly 80% of the overall resources are determined by voluntary contributions from donors, it is not clear to what extent countries can determine such reprioritisation.
“We worry that developing countries may not be consulted adequately when they decide to reprioritize activities”, a diplomat from a small developing country told us.
In principle, any decision on the size of the budget and reprioritization will be based on consensus as is the nature of policy-making at WHO.
Some diplomats however, do not rule a vote on the matter. Increasingly voting has become a preferred choice when countries are unable to agree even on text in resolutions. (See EB composition here).
Irrespective of the recommendation from PBAC, the EB with a wider membership, would have to take a decision on the budget, and recommend a future plan of action in order to adopt a budget at the WHA in May 2025, diplomats said.
Diplomats expect China to play a crucial role at the EB this week. (China is not a PBAC member)
In its report, the PBAC asks the EB to “note the report”. It will remain to be seen if the EB will accept this recommendation for a reduced base budget.
The PBAC and the 34-member EB, serve to decide on the agenda for the World Health Assembly and the resolutions to be considered by the Health Assembly in May every year.
The following countries make up the current Board: Cameroon (2023-2026)L; Comoros (2023-2026); Ethiopia (2022-2025) ; Lesotho (2023-2026) ; Senegal (2022-2025) ; Togo (2023-2026) ; Zimbabwe (2024-2027); Barbados (2023-2026); Brazil (2022-2025); Canada (2022-2025); Chile (2024-2027); Costa Rica (2024-2027); United States Of America (2022-2025); Democratic People’s Republic Of Korea (2023-2026); Maldives (2022-2025); Thailand (2024-2027); Bulgaria (2024-2027); Israel (2024-2027); Norway (2024-2027); Poland (2024-2027); Republic Of Moldova (2022-2025); Slovakia (2022-2025); Switzerland (2023-2026); Ukraine (2023-2026); Lebanon (2024-2027); Morocco (2022-2025); Qatar (2023-2026) ; Somalia (2024-2027); Yemen (2022-2025); Australia (2023-2026); Brunei Darussalam (2024-2027); China (2022-2025); Micronesia (2022-2025); Republic Of Korea (2024-2027).
(The composition of the 13-member PBAC is here.)
IS THE FINANCING CRISIS AN OPPORTUNITY OR A RISK?
This is a particular time in geopolitics, that coincides with profound changes at the political level, alongside financial frailties facing many countries big and small.
If filling the financing hole left after the U.S. departure from WHO, would have been possible earlier, it is far from assured now. During the COVID-19 pandemic, European actors, among others, Germany and the European Commission, swiftly stepped up with financing and other initiatives at WHO.
Now, the field not only at WHO, but also in the wider sphere of global health will be shaped by a cast of actors who would come in to assume leadership and wield influence, at the table and behind-the-scenes.
However, global health is far too important and commercially lucrative to be left to organic transitions. Giving in to “unmanageable” changes is fraught with risks. Diplomats say that for many donors, preserving status quo is a better option than making space for new actors.
“We do not understand why there is pressure to cut down the budget. One reason could be that traditional donors do not want new donors to come in,” a developing country diplomat told us alluding to middle powers with deep pockets such as the oil producers.
To be sure, underfunded WHO budgets have been de facto at the chronically financially-starved organization. “There has always been a mismatch between the size of the mandate and the actual money in the pot. This time is no different,” the developing country diplomat said adding that WHO could raise resources in the coming months ahead of the Assembly.
By December 2024, WHO had managed to secure funds of up to US$ 3.8 billion for the next four years on the back of pledges from some of its member states, the private sector, foundations and multilateral organizations. This amount also reflects signed funding agreements and expected funding from partnerships. While this amount is half of the goal it set for itself, WHO had said, by securing 53% of the US$ 7.1 billion funding needed to implement its strategy for 2025-2028, it has successfully increased predictability as compared to 2020, when WHO had visibility for only 17% of funding required for its previous strategy.
Not everyone agrees that WHO will be able to raise funds quickly enough to keep the proposed budget target. “We will have to decide on the budget based on the information and facts we have today. Unless there are firm commitments, we cannot base our decisions on intentions and talk,” a developed country diplomat emphasized.
“How can we assume that we can raise an additional US $ 500 million a year suddenly”, the diplomat asked. (The US contributions on both voluntary and assessed are over US $ 700 million in the current biennium.)
Questions are also being raised why some countries, particularly in Latin America, did not pledge at all in the investment round.
Speculations are rife over whether China, India, or the BRICS group would step up with funding. Bilateral considerations outside of health will shape the decision to support multilateralism in global health, experts say.
“BRICS is now expanded to include other countries. They have few things in common and do not have the same goals,” a seasoned diplomat who has worked in these regions said.
Trade considerations may also play into investments at WHO. Privately countries are asking if it was worth inviting President Trump’s wrath and be dragged into tariff wars. Expanding influence at WHO, would be seen as challenging the U.S., few countries would want to go there, a diplomat said last week.
The tariff threat that has turned real, has set off concerns even in global health. (See CNN: Trump announces significant new tariffs on Mexico, Canada and China, sparking retaliatory actions)
TAIL PIECE: THE OPTICS
Some diplomats also worry that by moving quickly to slash the WHO budget, it would be playing into the narrative of the indispensability of American funding that many countries have questioned.
“What is the signal we are trying to send, that WHO will not survive without funding from the U.S.?”, a developing country diplomat asked.
Reportedly, in his remarks at the closed-door PBAC meeting, Director-General Tedros Adhanom Ghebreyesus “expressed regret at the decision, reiterated the hope that the United States would reconsider, emphasized that WHO remained open to engaging in a constructive dialogue, and noted the contributions of the United States to global health.”
While WHO is no stranger to a perpetual financial crunch, the latest crisis could be an opportunity to push member states to pay more to support the institution, some experts are of the view. While that will be an uphill task, it may not be such a remote possibility.
On February 2, 2025, members of the EB also discussed financing and other matters at a retreat outside Geneva.
See other relevant stories:
Health Programs Shutter Around the World After Trump Pauses Foreign Aid: New York Times
The latest on the US foreign aid crisis: Devex
From us in recent days:
![WHO Member States Propose Multiple Resolutions, On The Back Of Unfunded Mandates & Unambitious Text [EB156 PRIMER]](https://substackcdn.com/image/fetch/w_1300,h_650,c_fill,f_webp,q_auto:good,fl_progressive:steep,g_auto/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fe8cddb9a-1b19-41ff-bb96-3642f8df2938_6780x4525.jpeg)
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