Global Policy Forum

By Edith M. Lederer

The U.N. General Assembly has approved a two-year budget with a $950 million spending cap for next year, turning up the pressure for quick U.N. reforms that the United States and the European Union insisted on.

The spending cap approved late Friday means the United Nations will run out of money in about June _ which gives members six months to adopt major reforms. Otherwise, the United States has indicated it will oppose the release of additional money to fund U.N. operations for the rest of 2006, which would create a financial crisis. Several key figures in Congress have threatened to withhold U.S. dues to the United Nations if reforms are not enacted.

Facing a Dec. 31 deadline, U.N. members agreed on a new budget after weeks of intense negotiations and a final round of meetings in the private office of General Assembly President Jan Eliasson. Ambassadors from wealthy and developing nations who had been at odds over the budget emerged together and announced that a deal had been reached. The General Assembly's budget committee met soon after to approve the agreement. The 191-members General Assembly then adopted the budget by consensus, with Eliasson banging the gavel. U.N. Secretary-General Kofi Annan said the new budget will enable the United Nations to continue its work while members pursue reforms adopted by world leaders at a September summit.

"Reform is well under way and will continue with increased momentum," he said. U.S. Ambassador John Bolton called the budget deal a victory for the United States. Britain's U.N. Ambassador Emyr Jones Parry, whose country holds the EU presidency, said he wouldn't claim victory for its 25 members but for the United Nations. Jamaica's U.N. Ambassador Stafford Neil said the main bloc of developing nations had "the gravest reservations" about the spending limit but decided to go along with it.

The United States, Japan, Europe and other wealthy nations who pay about 85 percent of the U.N.'s budget joined forces early Friday to back the spending cap for next year. Their aim is to spur agreement on management reforms by June including reviews of old U.N. programs and U.N. rules and regulations, with one goal being to give Annan greater flexibility in running the world body. If U.N. members decide that there is sufficient progress on the reforms, the General Assembly would then approve another $950 million to cover U.N. operations for the rest of 2006. But if progress is deemed to be too slow, the U.N. could find itself in a financial crunch.

The powerful Group of 77, which represents 132 mainly developing countries and China, had said it would only agree to a $1.35 billion cap on U.N. spending. Several key members including Egypt and India objected to any link between the new budget and management reform.

But the United States had insisted on the linkage.

Jones Parry said the EU played a crucial role in bringing developing nations and the United States and Japan "to where the European Union wanted to be _ that is a budget which is sufficient for the U.N., which recognizes the compelling need to maintain the pressure for reform of the U.N., especially its management." Neil said the Group of 77 achieved some positive results. It wanted a two-year budget and got it: the 2006-2007 budget will total $3.798 billion, or $1.899 billion each year.

Developing countries opposed the six-month spending cap, but he said the United States and Japan _ the two major contributors _ refused to budge. The Group of 77 then insisted that language in the budget state that the spending cap would be "an exceptional measure, not to be repeated or used for the future," he said. "We find unpalatable the fact that there is this ax hanging over our heads in terms of the spending limitation, but we will still go forward," Neil said.

Neil said the Group of 77 and China "are supportive of management reform" and want an efficient U.N. Secretariat _ but won't necessarily agree with all reform proposals. South Africa's U.N. Ambassador Dumisani Kumalo, the incoming chairman of the Group of 77, criticized supporters of the spending cap for trying to "force others to accept their vision of the reform by resorting to coercive measures." Some U.N. reforms have been approved.

On Tuesday, a new U.N. Peacebuilding Commission was established to help countries emerging from conflict manage the difficult transition to stability and development. Annan also signed a directive to protect whistle-blowers. The new budget includes a new ethics office, a review of U.N. oversight operations, and an independent audit advisory committee. But the General Assembly has put off talks on a new Human Rights Council to replace the discredited Human Rights Commission until Jan. 11, and no action is expected until February on key management reforms.