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

The United Nations Budget

Scale of Assessments
(for calendar year 2003)
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.

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