Cash-strapped UN

The global godfather of nations - The United Nations Organization is bankrupt and counting its pennies

By Nalaka Gunawardene
Published: Thursday 30 November 1995

The United Nations building we (Credit: UN)AS THE 50th anniversary of the United Nations (UN) culminated in late October, the organization struggled to overcome its worst ever financial crisis. If the situation does not improve soon, the world body and its programmes can suffer serious setbacks, senior UN Officials warn.

The VN has weathered financial difficulties in the past, but this year multiplc demands of increased operations and programmes have hiked the expenses, while income has nosedived over the years.

By end August, only 64 member states - out of a total of 185 - had paid their total regular budget contributions. The total outstanding contributions is over us $3.7 billion. This includes us $850 million earmarked for the organization's regular budget. The rest, about us $2.9 billion slotted for the UN'S peacekeeping budget, skyrocketted dramatically in recent years, especially in its operation in former Yugoslavia - costing a mindblowing us $5 million a day.

On September 27, the New York Times quoted the organization's highest ranking financial officer as sa 'ying that World bank loan was one of many ideas being explored "to lift from our shoulders the burden of debt".

Although the I JN has no capital base, and its rules do not allow borrowing commercially or from external sources, the actually autonomous World Bank (wE) - technically a UN body - may be interpreted as an acceptable source of loans. "The crisis cannot be solved unless we can borrow money," the New York Times quoted the uN Secretary General, Bonitos Boutros-Ghali. But the us opposes the idea, reiterating that the UN has no authority to borrow externally, and only sovereign governments borrowed from the we.

Whether the wB's own Board of Governors, where the its wields substantiai influence would take the same positions, remains to be seen. Ironically, the us currently owes the UN at least us $1.2 billion in unpaid dues. It is the biggest debtor partly because it is the biggest contributor, representing 25 per cent of the LIN'S regular budget.

NGOS too have raised questions whether the uN's independence and integrity could be compromised if it becomes indebted to the WB like the rest of the developing world.

The UN Secretariat has recently imposed a series of restrictions for cost slashes, including a freeze in recruitment at all levels, a ban on all new CODtracts, and cancellation of all official tours. However, unless it receives financial resources in the immec! future, more drastic steps would ha, be taken.

A high level working group on UN'S financial situation, appointe the General Assembly last year, to nised - in its recently published re - the need to review the assessn scales to apportion the organizati. expenses more fairly among merT states as imminent.

Richard von Weizacker, for President of West Germany who chaired a group that studied the i future for two years, says that reforn the UN's bureaucracy would not clu the organization's effectiveness as m as reforming the "will of the mem - the more important members".

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