The United Nations Budget - Proposals to ease the un's financial difficulties

By and large, the regular budget has never created major disputes among the member states, and most governments have usually paid their dues relatively punctually. However, beginning in 1963, the USSR refused as a matter of principle to contribute to certain items in the regular budget, such as the UN Commission for the Unification and Rehabilitation of Korea until its dissolution by a consensus vote of the 1973 Assembly, or to those parts of the regular budget devoted to the redemption of UN bonds (a method of raising funds for certain UN peacekeeping operations). France has taken a similar stand in connection with the redemption of the bonds. In addition, a number of countries have refused to contribute to the special accounts for peacekeeping operations. It was chiefly these controversial expenditures which precipitated the UN's financial emergency in the mid-1960s.

In July 1962, the International Court of Justice, at the request of the General Assembly, issued an advisory opinion in which it declared that the expenses of the first UN Emergency Force in the Middle East and the UN Force in the Congo constituted expenses of the organization within the meaning of Article 17, paragraph 2, of the Charter and should thus be borne by member states as apportioned by the General Assembly. The Assembly accepted the court's opinion in December 1962, but debate over peacekeeping operations and the financial difficulties continued. A number of other factors, moreover, contributed to the precariousness of the financial position of the organization, notably the lateness of many member states in paying their assessed contributions, the currency fluctuations of the 1970s (marked by two devaluations of the US dollar, on which the UN budget is based), and inflation.

A Group of High-Level Intergovernmental Experts to Review the Efficiency of the Administrative and Financial Functioning of the UN, appointed by the General Assembly in 1985, submitted to the General Assembly in the following year its recommendations for enhancing the efficiency and reducing the expenditures of the organization. Implementation of the group's recommendations was the condition which a number of states, including the US, placed on further payment of their assessments.

Among the solutions proposed in 1985 were an increase in the Working Capital Fund to US$ 200 million, the issue of certificates of indebtedness in the amount of the arrears—in effect, borrowing from member states—and borrowing on the open market.

In 1992, Secretary-General Boutros Boutros-Ghali requested that the Ford Foundation assemble an independent advisory group to recommend ways to create a secure, long-term financial base for the organization. The group, co-chaired by Shijuro Ogata, former Deputy Governer of the Japan Development Bank, and Paul Volcker, former Board of Governors' Chairman of the United States Federal Reserve Bank, issued its report in February 1993. Entitled "Financing an Effective United Nations," it suggested the following measures:

• Dividing UN expenditures into three categories: a regular budget financed by assessed contributions; peacekeeping financed by a separate assessment; and humanitarian and development activities financed largely by voluntary contributions.
• Requiring UN member states to pay dues in four quarterly installments, instead of a single lump sum at the beginning of the year; and granting the organization authority to charge interest on late payments.
• Appropriation by some nations of their UN contribution earlier in the year.
• Acceptance by member states of significantly increased peace-keeping costs over the next few years, and financing future cost from national defense budgets.
• Creation by the UN of a $400 million revolving reserve fund for peacekeeping; and consideration of a unified peacekeeping budget, financed by a single annual assessment. The report concluded that proposals for additional, nongovernmental sources of financing the UN were "neither practical nor desirable."

Also in 1993, the Joint Inspection Unit (JIU) of the Secretariat issued a report declaring: "The old financial malaise is emerging with renewed evidence. What was a chronic illness is becoming a critical one." Among JIU proposals:

• Governments should adjust their national legislations to avoid obstacles to paying their UN contributions in full and on time.
• Replenishment of the proposed UN Peace Endowment Fund could take advantage of initiatives, such as the issuance of special stamps by member states, with revenues turned over to the organization.
• Countries could turn over to peacekeeping operations funds earmarked for aid to developing countries in which the existing critical situation is an impediment to using those funds.
• In parallel with financing, cost saving is indispensable to solving the financial crisis. Fighting waste and reducing expenses must take place in all areas of the organization.

The fundamental requirement for the essential financial stability of the UN, however, remained the full and timely payment by all member states of their assessments, in accordance with Article 17, paragraph 2, of the Charter, which states that: "The expenses of the Organization shall be borne by the Members as apportioned by the General Assembly."

In 1994, the UN General Assembly created the Office of Internal Oversight Service (OIOS) as a department within the Secretariat to independently monitor reports of waste, fraud, and mismanagement within the UN. OIOS focuses on high-risk activities, such as peace-keeping operations, humanitarian activities, and procurement while simultaneously providing oversight to all activities of the UN. OIOS provides oversight through internal auditing, management consulting, investigations, monitoring, inspection, and evaluation.

In 1996, efforts at managerial reform targeted five areas of management: cost structure, human resources, information, tech nology, and work programs. This approach has required reductions and redeployment of staff. Between 1984–95 and 1996–97, the UN eliminated 2,046 positions, and about 1,000 of the budgeted posts that exist now are kept vacant. Travel was reduced by 26% in 1996, and printing costs were reduced by 27% in early 1996, as more than 270,000 UN documents have become available electronically.

On 23 March 2000, Under-Secretary-General for Management Joseph E. Connor told the General Assembly's Fifth Committee (Administrative and Budgetary) that in 1999 the United Nations "took a step back from the financial brink." While regular budget and tribunals assessments were as expected, there was an increase in peacekeeping assessments in 1999, he added. Even with that increase, the obligatory cost to member states for all UN activities in 1999 was the lowest in six years: the actual assessment for 1999 came to just over US $2 billion. The UN had

			Scale of Assessments
			(for calendar year 2003)
MEMBER STATE	PERCENT	MEMBER STATE	PERCENT	MEMBER STATE	PERCENT	MEMBER STATE	PERCENT
Afghanistan	0.001	Djibouti	0.001	Liechtenstein	0.006	São Tomé and Príncipe	0.001
Albania	0.003	Dominica	0.001	Lithuania	0.017	Saudi Arabia	0.554
Algeria	0.070	Dominican Republic	0.023	Luxembourg	0.080	Senegal	0.005
Andorra	0.004	Ecuador	0.025	Madagascar	0.003	Seychelles	0.002
Angola	0.002	Egypt	0.081	Malawi	0.002	Sierra Leone	0.001
Antigua and Barbuda	0.002	El Salvador	0.018	Malaysia	0.235	Singapore	0.393
Argentina	0.969	Equatorial Guinea	0.001	Maldives	0.001	Slovakia	0.043
Armenia	0.002	Eritrea	0.001	Mali	0.002	Slovenia	0.081
Australia	1.627	Estonia	0.010	Malta	0.015	Solomon Islands	0.001
Austria	0.947	Ethiopia	0.004	Marshall Islands	0.001	Somalia	0.001
Azerbaijan	0.004	Fiji	0.004	Mauritania	0.001	South Africa	0.408
Bahamas	0.012	Finland	0.522	Mauritius	0.011	Spain	2.518
Bahrain	0.018	France	6.466	Mexico	1.086	Sri Lanka	0.016
Bangladesh	0.010	Gabon	0.014	Micronesia 0.001		Sudan	0.006
Barbados	0.009	Gambia	0.001	Monaco	0.004	Suriname	0.002
Belarus	0.019	Georgia	0.005	Mongolia	0.001	Swaziland	0.002
Belgium	1.129	Germany	9.769	Morocco	0.044	Sweden	1.026
Belize	0.001	Ghana	0.005	Mozambique	0.001	Switzerland 1.274
Benin	0.002	Greece	0.539	Myanmar	0.010	Syrian Arab Republic	0.008
Bhutan	0.001	Grenada	0.001	Namibia	0.007	Tajikistan	0.001
Bolivia	0.008	Guatemala	0.027	Naura 0.001
						Thailand	0.294
Bosnia and Herzegovina	0.004	Guinea	0.003	Nepal	0.004
						The former Yugoslav
Botswana	0.010	Guinea-Bissau	0.001	Netherlands	1.738
						Republic of Macedonia	0.006
Brazil	2.390	Guyana	0.001	New Zealand	0.241
						Timor-Leste	0.001
Brunei Darussalam	0.033	Haiti	0.002	Nicaragua	0.001
						Togo	0.001
Bulgaria	0.013	Honduras	0.005	Niger	0.001
						Tongo 0.001
Burkina Faso	0.002	Hungary	0.120	Nigeria	0.068
Burundi	0.001	Iceland	0.033	Norway	0.646	Trinidad and Tobago	0.016
Cambodia	0.002	India	0.341	Oman	0.061	Tunisia	0.030
Cameroon	0.009	Indonesia	0.200	Pakistan	0.061	Turkey	0.440
Canada	2.558	Iran (Islamic Republic of)	0.272	Palau	0.001	Turkmenistan	0.003
Cape Verde	0.001	Iraq	0.136	Panama	0.018	Tuvalu 0.001
Central African Republic	0.001	Ireland	0.294	Papua New Guinea	0.006	Uganda	0.053
Chad	0.001	Israel	0.415	Paraguay	0.016	Ukraine	0.190
Chile	0.212	Italy	5.064	Peru	0.118	United Arab Emirates	0.202
China	1.532	Jamaica	0.004	Philippines	0.100	United Kingdom
Colombia	0.201	Japan	19.515	Poland	0.196	of Great Britain
Comoros	0.001	Jordan	0.008	Portugal	0.462	and Northern Ireland	5.536
Congo	0.001	Kazakhstan	0.028	Qatar	0.034	United Republic of Tanzania	0.004
Costa Rica	0.020	Kenya	0.008	Republic of Korea	1.851	United States of America	22.000
Côte d'Ivoire	0.009	Kiribati 0.001		Republic of Moldova	0.002	Uruguay	0.080
Croatia	0.039	Kuwait	0.147	Romania	0.058	Uzbekistan	0.011
Cuba	0.030	Kyrgyzstan	0.001	Russian Federation	1.200	Vanuatu	0.001
Cyprus	0.038	Lao People's		Rwanda	0.001	Venezuela	0.208
Czech Republic	0.203	Democratic Republic	0.001	Saint Kitts and Nevis	0.001	Vietnam	0.016
Democratic People's		Latvia	0.010	Saint Lucia	0.002	Yemen	0.006
Republic of Korea	0.009	Lebanon	0.012	Saint Vincent and the		Yugoslavia	0.020
Democratic Republic		Lesotho	0.001	Grenadines	0.001	Zambia	0.002
of the Congo	0.004	Liberia	0.001	Samoa	0.001	Zimbabwe	0.008
Denmark	0.749	Libyan Arab Jamahiriya	0.067	San Marino	0.002	Total	101.087

more cash than the previous year largely because of payments made by the United States to avoid losing its vote in the General Assembly. Total available cash at the end of 1999 jumped to some US $1.093 billion, from US $736 million in 1998. Amounts owed to the United Nations were also lower, at US $1.758 billion, down from US $2.031 billion a year earlier. And the level of the United Nations debt to its member states—some US $800 million—was also significantly lower than the previous three years.