Spanish minister enters race to lead UN labor agency, amid US funding concerns

GENEVA: Spain has nominated Labour Minister Yolanda Diaz to head the United Nations labor agency, potentially making her the first woman to lead the organization, as it faces a financial crisis over US non-payments.

The Spanish government said Diaz’s candidacy for the top job at the International Labour Organization reflected her record of labor reforms, including measures that have helped reduce temporary employment and contributed to record levels of employment in Spain.

“Yolanda Díaz has driven some of the most significant labor and social reforms of recent years, all of them achieved through social dialogue and resulting in 30 agreements,” ‌it said ‌in a statement. Diaz, who founded the multi-party left-wing coalition Sumar in 2023, is ‌credited ⁠with substantially raising ⁠the minimum wage, although her relations with Spain’s business lobby have progressively soured. She has also yet to deliver on a promise to shorten the working week.

Diaz is expected to challenge incumbent Director-General Gilbert Houngbo of Togo for the top job at the Geneva-based agency, which sets international labor standards and promotes workers’ rights across its 187 member states.

Houngbo’s term ends in 2027, and an election is scheduled for November this year.

The ILO told Reuters that it, like the wider UN system, is facing a challenging financial and ⁠liquidity situation due to delayed assessed contributions. As of 17 July, the ‌amount of unpaid assessed contributions by all member states stood ‌at 368 million Swiss francs, it said. “These arrears have impacted the ILO’s cash flow, and we are actively engaging ‌with the concerned countries to encourage the earliest possible settlement,” the ILO said in a ‌statement.

The US has outlined plans to not pay its ILO contributions for the next fiscal year. Long the largest contributor, the US owes 257 million Swiss francs ($315 million) in assessed contributions and arrears as of July 17.

Houngbo has faced criticism from staff and member states over plans to reform the organization and respond to its cash-flow ‌shortfall.

A senior diplomat told Reuters that Diaz’s candidature would get support from many European states. However, another diplomat said some countries may not want ⁠to upset the African ⁠group by supporting a rival to Houngbo. “It will be a difficult decision but many will say: Why risk upsetting them?“

Earlier this month, the White House backed a House spending bill for the next fiscal year, which ends in September 2027, that eliminates US funding for several international organizations including the ILO, as part of broader cuts affecting bodies such as UNESCO, the World Health Organization and the Organization for Economic Co-operation and Development.

The US Mission in Geneva did not immediately respond to a Reuters request for comment. Reuters reported in June that the agency has rescinded the appointment of a US official to a senior leadership role because of delays in US payments, highlighting the cash-flow problems that have forced it to cut 120 jobs, freeze hiring and implement other cost-cutting measures.

Founded in 1919, the ILO is unique within the UN system in bringing together governments, employers and workers through a tripartite structure to develop global labor standards.