ILO financial crisis dominates leadership race

The International Labour Organization’s financial crisis dominated a public leadership event in Geneva on Wednesday, where three candidates for the UN agency’s top post set out their plans.

Current ILO chief Gilbert Houngbo of Togo is seeking another term. He is running against Spanish Labour Minister Yolanda Diaz Perez and Peru’s former foreign minister Javier Gonzalez-Olaechea.

Diaz Perez warned that the ILO faces a $363 million deficit and said continuing on its current path would lead to the institution’s decline. She argued that the crisis was not only the result of one member state failing to pay and accused the agency of flawed financial management.

The Geneva-based agency has faced falling international funding, especially from the United States, traditionally its biggest contributor. The ILO has drafted a reform plan that would cut up to 120 jobs.

Houngbo said his priority was to finish the reform and secure the agency’s medium- to long-term financial viability. He said the plan was expected to generate savings of about 12.5 percent and proposed capping spending at 75 percent of available resources to create a 25 percent buffer.

Gonzalez-Olaechea said the ILO’s financial situation was “not an insoluble puzzle” and pledged to speak with states in arrears to understand why they had not paid and persuade them to settle.

The leadership vote will be held by secret ballot on November 16. The next ILO chief’s term is set to begin in October 2027.