UNITED NATIONS FINANCIAL SITUATION DISCUSSED AT DPI/NGO CONFERENCE
Press Release
PI/970
UNITED NATIONS FINANCIAL SITUATION DISCUSSED AT DPI/NGO CONFERENCE
19960912 Nobody in his right mind should have set up an organization of the size of the United Nations with no capital or resources and solely dependent on prompt payment by Member States, the Under-Secretary-General for Administration and Management this morning told the forty-ninth annual NGO Conference organized by the Department of Public Information (DPI).Participating in a panel discussion on "Financing United Nations activities", Joseph Connor said "we are constantly juggling our cash", adding that the problem of having no source of assured financing was that the United Nations could not do, in many instances, what the Member States wanted it to do.
Other members of the panel stressed that the problems that the United Nations faced had nothing to do with finances. Robert Fowler (Canada) said it was a totally political crisis. "I have never heard the suggestion that the United States cannot afford to make its contribution", he said, adding that there had been an erosion of the political will to adhere to the United Nations Charter.
Ernst Sucharipa (Austria), a Vice-Chairman of the working group of the General Assembly on the United Nations financial situation, told the Conference that there was agreement in the group that a structural change in the scale of assessments was necessary to better reflect the economic performance of Member States. Discussions had also taken place on fringe issues, such as incentives and disincentives for early and late payments of assessed contributions.
Also participating in the panel were: Jose Alvarez, professor of law at the University of Michigan and Annette Des Iles (Trinidad and Tobago), also a Vice-Chairman of the Assembly working group on the financial situation. Barbara Crossette, The New York Times United Nations correspondent was the moderator.
The Conference will meet again at 3 p.m. today to conclude its deliberations with a panel discussion on the theme "Exploring visions for the future".
DPI/NGO Conference Work Programme
The forty-ninth annual Conference for Non-Governmental Organizations organized by the Department of Public Information (DPI) met this morning to discuss the financing of United Nations activities. It was scheduled to hear a panel of speakers on the subject, followed by a discussion.
Statements on Financing UN Activities
BARBARA CROSSETTE, The New York Times United Nations Correspondent, was the moderator for the discussion and introduced the members of the panel.
JOSEPH CONNOR, Under-Secretary-General for Administration and Management, said nobody in his right mind should have set up an organization of the size of the United Nations with no capital or resources, an organization solely dependent on prompt payment by Member States. The Organization's current budget was about $2.5 billion. It was still trying to collect $2.9 billion. As a result "we are one year behind in our payments".
If all of the owed $2.9 billion was available, money owed to newspaper vendors and the Consolidated Edison Company would be paid off, he said. It would also reimburse troop-contributing countries. He stressed that the United Nations functions were made possible by the fact that there were 90 or so States that although impatient, were so far willing to wait for money for their troop contributions to the Organization. Due to the non-payment by a small number of States, a large number awaited payment for their contributions. "It is not an accounting equation that I was taught", he said. The United States owed $1.6 billion of the $2.9 billion that the United Nations was trying to collect.
"We are constantly juggling our cash", he said, adding that the problem of having no source of assured financing was that the United Nations could not do, in many instances, what the Member States wanted it to do. For instance, in the case of Rwanda, the Secretary-General was not able to promise funds to African States who were willing to send troops there at the height of conflict. "We have no capacity to respond to any other emergency which might occur", he said. By the time a six-month mandate period for a peace-keeping operation had passed, the United Nations usually managed to collect only one third of the finances needed for the mission.
"We teeter constantly on the brink of financial bankruptcy", he said, adding that he constantly feared the 90 States awaiting payments would no longer be willing to finance those that did not pay. He emphasized that the budget was reasonably under control and the number of people working for the Organization had declined from 12,000 to 9,000. "We have managed to achieve no growth in our budget", he said.
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ERNST SUCHARIPA (Austria), Vice-Chairman of the General Assembly working group on the United Nations financial situation, said a new scale of assessments was required for the problems of the past not to be repeated. Such a new system should be realistic and must reflect changed economic circumstances of countries. Some countries, such as those in south-east Asia, which had been doing well economically, should pay more.
On the peace-keeping budget, he said efforts should be made to reimburse countries contributing troops, equipment and services. The traditional support of Austria for peace-keeping operations was being eroded because of the delays in reimbursement. Sooner or later a number of those countries might have to reduce their support for peace-keeping. A way had to be found to improve the situation, he stressed.
It had been agreed in the working group that a structural change in the scale of assessments was necessary to better reflect the economic performance of Member States, he said. There had been long negotiations and discussions in the group on fringe issues, such as incentives and disincentives for early and late payments of assessed contributions. A number of proposals on that, including one from the European Union, had been put forward. A clear picture was required on the attitude of the United States towards future payments of its assessed contributions. The financial problems of the United Nations were the tip of the iceberg of a deeper political issue. There was also a need for political rethinking in the United States attitude towards the Organization.
JOSE ALVAREZ, a professor of law at the University of Michigan, said reasons for the United States disillusion with the United Nations included bad press the Organization was getting, a perception in the United States Congress of corruption in the Organization and failures of peace-keeping operations. The idea of multilateralism propounded by the Clinton Administration in its early years led to the perception that United States Armed Forces could be made to serve under United Nations command, thereby eroding United States sovereignty. Another issue was the determination to balance the United States budget. The lack of a strong constituency of support for the United Nations had not helped. There was a notion in Congress that international bodies, such as the International Court of Justice, were promulgating laws which would place certain obligations on the United States, thus infringing the powers of its Congress.
He enumerated efforts in the American Congress to reduce United States support for the United Nations through threats to withhold or cut contributions to the budget and various programmes. The American administration could not longer go to Congress and successfully demand the fulfilment of United States treaty obligations. It was ironic that all those things were happening at a time when the United Nations was undertaking the
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reforms demanded of it. The new exercise of United States financial veto had led to reforms. From the perspective of the American Congress, it was the exercise of the "power of the purse".
ROBERT FOWLER (Canada) said the crisis that the United Nations faced had nothing to do with finances. It was a totally political crisis. "I have never heard the suggestion that the United States cannot afford to make its contribution", he said. It could be believed that the Ukraine found it difficult to meet its assessed contribution since it spent 12 per cent of its budget dealing with the aftermath of the Chernobyl disaster. It could also be believed that the Russian Federation faced considerable constraints in paying its contributions, even so that country was making efforts to pay.
He stressed that the amount of the United States arrears to the United Nations was one tenth of the amount that the Congress had decided recently to give to the Defense Department, even though the Pentagon had not asked for it. Twenty-five countries this year had paid their contribution in full and on time to the United Nations, and it was noteworthy that none of those countries were members of the Security Council. Japan last year had been the Member State to make the largest contribution. The debate on the appropriate assessed contribution that the United States should make was pointless when it was in fact paying only 13 per cent.
"Of course the United Nations is inefficient", he said, adding that it had to be so when it was an amalgam of different cultures, nations and people trying to work together. Also, in every organization there were a few people who did not put in their best. There had been an erosion of the political will to adhere to the United Nations Charter.
Discussion on Financing UN Activities
Conference participants asked questions concerning new and innovative sources of funding. Also: Could confiscated illicit funds be used to finance the Organization? Should there be an issuance of public subscription bonds by the United Nations? Should there be a progressive tax on armaments? Did the panel believe that sanctions should be imposed on countries which did not pay their assessed contributions? How could the United States be educated about the United Nations? Was there a need to rethink the fundamental mission of the United Nations?
Mr. CONNOR said increased funding for the United Nations from the United States had come forward this year once the President and the Congress had decided to take off the election agenda the whole issue of whether or not the United Nations should be closed. He stressed the importance of the cheques mailed directly by American citizens to the Organization. Finance was only a symbol of failure of Member States to identify with the basic mission of the
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Organization. "We have been severely burned whenever we talk of alternative sources of funding", he said, and added that there was a need to improve the assessment system.
ANNETTE DES ILES (Trinidad and Tobago), Vice-Chairman of the working group on the United Nations financial situation, also a panel participant, said the question of making Member States pay interest on late payments had been discussed. The question of inducements to make Member States pay and linking the hiring of nationals and procurement to payment of assessed contributions had also been discussed. Also, there had been discussion by some countries on new and innovative sources of financing. However, that could not be a substitute for Members meeting their financial obligations to the Organization. Innovative sources of funding could not, in the short-term, be a solution for the problems that the United Nations faced.
Mr. FOWLER (Canada) said the whole question of innovative sources of funding was anathema to the United States. However, it had to be recognized that ideas on innovative funding avoided the main issue, which was whether Member States wanted the United Nations to function effectively. Member States could not be absolved of their responsibility to the Organization. The essential undertakings of the United Nations had to be funded by assessed contributions.
Mr. ALVAREZ said any international organization dominated by one single State could no longer be said to be a global body. The threats to withhold United States assessed contributions would no longer work if they were made comparable to those of Japan, for instance. Nevertheless, the United States would likely dominate the Organization because of its veto power and economic strength. He urged consideration of the prospect of the United States being summoned before domestic courts around the world to force it to abide by its international treaty obligations with respect to payment of its assessed dues.
Mr. SUCHARIPA (Austria) said the Organization could not be run without the active support of the United States. Moving Headquarters elsewhere, as suggested by some questioners, was an erroneous idea. Only Americans themselves could change the official United States attitude towards the United Nations. The NGOs should respond and counteract the various misconceptions about the Organization.
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