January 11, 1996: The Secretary General speaking in London again emphasizes that "the organization is affected by a serious financial crisis" which is "undermining its effectiveness." He goes on to say that the lack of funds "is sapping the morale of [the UN's] most precious asset--its staff." He also says that "the effectiveness of the organization is being corroded from within, because it is being denied the means to do its job properly." "There is a certain dishonesty here," he says. "Those, who, by denying funding, make the United Nations ineffective, then say that they are withholding funding because the United Nations is ineffective. There is a need for greater frankness about the current situation."
January 11, 1996: The US Mission to the UN takes exception to the Secretary General's speech. Speaking to reporters, US representative Madeleine Albright says of the Secretary General: "He should be a little concerned with his choice of words." A US Mission spokesperson later says: "The Secretary General should concentrate on reform rather than casting blame on particular member states." A UN spokesperson replies later: "There is no reason for anyone to be thin-skinned when they are reminded of their treaty obligations."
Mid-January, 1996: UN management approaches its retirees, asking that they volunteer time to help the organization, in the face of impending radical budget and staff cuts.
January 15, 1996: In a speech at Oxford University, the Secretary General refers to his "emergency financial measures" and the great "magnitude of the crisis." He says that "the financial gymnastics that this crisis has required me to undertake cannot long be maintained." He goes on to refer to possible sources of global funding such as a levy on global financial transactions. He also gives an interview on the BBC along similar lines. -- On the same day, General Assembly Working Groups addressing aspects of UN reform begin work in New York. Observers believe that the financial crisis and the reform process are closely linked and that an overall reform "package" will have to emerge as a precondition of new financing (and vice versa).
January 16, 1996: The Washington Times publishes a story highly-critical of the Secretary General's Oxford speech, taking it to be a bid for funding "world government" imposing new taxes on US citizens. Several members of Congress immediately proposed hearings and new legislation that would ban the UN from levying global taxes. -- At a meeting in New York at which General Assembly President Freitas do Amaral is speaking, Global Policy Forum Director James Paul announces an NGO initiative on the financial crisis and presents an NGO statement "A Call for Action on the UN Financial Crisis" to the GA President. World Federalist Movement Director William Pace and Earth Action Representative Johannah Bernstein are working with Paul on this initiative.
January 17, 1996: UNDP distributes an article carrying this date by Administrator James Gustave Speth entitled "Why the UN is Essential to Successful Development and Vice Versa." After discussing the UN's role in economic and social policy areas, Speth writes: "Finally and fundamentally the United Nations is based on the principle that the world body should reflect the widely shared priorities of nations. And the priority of the majority of countries is development. If that priority is not respected in the activities of the United Nations, the political compact that holds the world organization together will likely crumble."
January 19, 1996: At a closed-door meeting of the General Assembly Working Group on Strengthening the UN, US Representative Madeleine Albright reiterates her government's position that the UN must undergo a "major" changes. "Most experts agree that the Secretariat has been poorly-staffed, poorly-managed and poorly-organized," she says, insisting that "like healthy trees or vines, bureaucracies must be pruned."
January 22, 1996: Senator Bob Dole introduces bill S1519 entitled "Prohibition of United Nations Taxation Act," which would require cutting off US funding to the UN unless the President certifies that the UN "is not engaged in any effort to develop, advocate, promote or publicize any proposal concerning taxation or fees on United States persons in order to raise revenue for the United Nations or any such agency." Senator Helms gives a speech on the Senate floor, endorsing the bill and stating that it will receive early consideration in the Senate Foreign Affairs Committee.
January 23, 1996 Under Secretary General Joseph Connor, speaking to reporters at HQ, describes the UN's finances as a "Ponzi scheme." "The financial situation is precarious and heading for the brink," he says. He points out that "the cash situation is increasingly negative." And "the day of reckoning is now closer." Information on the intentions of the 20 largest contributors is being compiled, to be made public on February 5. The UN collected only 92.7% of its regular budget as assessments and 86% of peacekeeping assessments in 1995, Connor says. The US paid as if its assessed rate were 12% not 25% on the regular budget and as if its rate were 14% not 31% for peacekeeping. In response to questions, Connor admits that plans are under study for a staff furlough and that many cost cutting measures are being discussed. "I am sure a shutdown will send a strong message to everyone," he tells reporters. Speaking of the furor over global taxes, Connor minimizes the issue, saying that "the assessment scale is fundamental."
January 24, 1996 In a "strictly confidential" memo sent to program administrators, UN senior management announces layoffs of more than 1,150 staffers by the end of 1996. It also becomes known that the Secretary General will make a major financial policy statement on February 7. -- On the same day, Italy presents a European Union statement and extensive proposal to the GA Working Group on the Financial Situation, suggesting interest for late payments, mandatory loss of voting privileges, and a new scale of assessments. The proposal, though not a major departure, indicates a more active stance by the EU. The Italian representative points out that EU member states pay their dues "promptly, in full and without conditions" and he expresses concern that the Working Group has not yet been able to recommend concrete measures to deal with the financial situation. -- On the same day, Under Secretary General Connor also addresses the Working Group, presenting further data on the unfolding crisis. His prepared "Talking Points" note that the cash situation is "now precarious, heading for the edge. -- On the same day, in the US Congress, the House of Representatives approves a new military appropriations bill that softens or deletes earlier language that would have placed narrow restrictions on the assignment of US troops to UN military commands. President Clinton had threatened to veto the earlier version of the law, as infringing his authority as Commander-in- Chief.
January 28, 1996: The Italian Permanent Representative, Paolo Fulci, holds a press conference to discuss the EU financing proposal. "With American arrears mounting, Italian legislators are asking why they should pay their dues to the United Nations on time, while the leader and its biggest procurements beneficiary was not doing so," he tells reporters. Fulci also urges speedy action to deal with the rapidly-deteriorating situation. "The Working Group [on the Financial Situation] should be encouraged to change its working methods," he says, "to stop talking and start acting. We must get down to real negotiations because the house is beginning to burn." Asked what would happen if the US does not pay, Fulci says "The United Nations will become bankrupt and, therefore, stop operating. This will happen. I don't see any other way."
January 29, 1996: At UN offices in Geneva, Administrative Director Maryan Baquerot announces impending staff cuts of 250 posts, to be part of system-wide cuts of at least 1,000 posts imposed by the new budget. Altogether, the UN budget is to be cut by $100 million from current levels, as mandated by the General Assembly, and 6.4 percent of staff posts will be eliminated. UN's Geneva Director-General Vladimir Petrovsky tells reporters: "We have no choice but to take immediate action, which will include cutting some services in all the agencies." Other UN specialized agencies based in Geneva, facing similar pressure in their own budgets are already cutting staff sharply in recent months: the World Health Organization is cutting 168 posts, while the International Labour Organization is cutting about 50 posts.
January 30, 1996: In response to questions in the House of Commons, British Prime Minister John Major says: "I certainly agree about the need to reform the United Nations. I raised that at the last meeting of the G7, where there was general agreement about it . . . By reform, I mean not just a reform of procedures, but the abolition of many United Nations bodies that no longer serve a useful purpose."
January 31, 1996: By this date, the regular budget assessments are due in full from all members. In practice, 25 member states have paid in full, out of 185 (up from 19 the year before), and others have made large payments towards their total. Among the large payers are the usual group of four - Australia, Canada, Netherlands and Sweden. But in addition, Italy has also paid in full. Among the other payers are a number of smaller countries that are active at the UN. Some have paid on time in the past: Denmark, Malaysia, New Zealand, Norway and Singapore. Others have not regularly been in the timely-payers column: Austria, Egypt, Ireland, and South Africa, among others.
February 1, 1996: Correspondents at the UN receive a copy of a letter from Sen. Jesse Helms, chairman of the Foreign Relations Committee, to a constituent in North Carolina stating: "I disagree with the premises upon which the UN is built and with the illusions that it propagates. It would be one thing if the UN were must an international side show, but it plays a far greater role. It is a vast engine for the promotion of socialism and to promote this purpose the UN provides a quarter of its budget. It strikes me that there are enough organizations in this world willing to promote socialism and anti-American propaganda free of charge, and for that reason I have long called for our country's departure from this organization and vice versa."
February 1, 1996: Assistant Secretary General Benan Sevan meets with the Committee on Conferences and explains sharp cutbacks in conferences services, including reduced numbers of meetings that can be serviced, reduced numbers of available documents, and reduced translations of documents. Pencils and paper will no longer be provided in meeting rooms, he adds. He says: "Any fat we may have had was cut out long ago. There is a fine line between making the Secretariat lean and making it weak, and it has already been crossed." -- In a letter to the editor of the New York Times, William J. vanden Heuvel, former US Deputy Permanent Representative to the UN (1979-81) writes of the effect of US "default" on its UN payments: "It has driven the United Nations, whose founders were the most outstanding Americans of this century, to the point of bankruptcy. Reform, cry the defaulters, but everything the United States has demanded in reform has been acceded to."
February 5, 1996: According to a "reliable source" cited by the current issue of International Documents Review, the United States has seconded ten officials to the UN, at no cost, to plan deep cuts in the UN's social and economic sectors. IDS also reports on rumors that the entire Department of Development Support and Management Services may be cut.
February 5, 1996: USG Joseph Connor speaks to the Open-Ended Working Group on the Financial Situation, presenting a lengthy overview of the crisis. At the end of 1995, he reports, member states that owed more than a full year's assessment to the regular budget numbered 74, while 22 states paid nothing at all. Referring to cuts in the 1996 budget, which would require staff cuts of 10%, he speaks of the "enormous management tasks" imposed by the cuts, which involve "significant downsizing . . . without affecting programme delivery." In a review of projected cash-flow for the year, he announces that timely payments in January to the regular budget had risen significantly from 1995 (from $235 to $277 million), but the budget is still in negative and $32 million still borrowed from peacekeeping accounts. According to the best projections, the budget will be stable until June. Then, with practically no income expected from the United States, the budget will begin to decline--to a deficit of $210 million by September and $400 million by the end of the year. "On 31 December [1996] we will have run out of cash," he says. ["The Financial Situation of the United Nations" WGFS/32] -- On the same day, President Clinton submits a 20-page summary of his proposed FY 1997 budget (with details due March 18) which opposes cuts in international affairs spending and proclaims that his administration does not plan to "retreat into isolationism."
February 6, 1996: The Secretary General gives a speech to the Working Group on the Financial Situation. "The financial crisis has brought the United Nations to the edge of insolvency," he says, continuing: "The organization now finds itself trapped in a downward spiral of events in which one problem creates another, and the combinations of problems works against the rational solution of any or all." He proposes a Special Session of the General Assembly to deal with the crisis and a cap of 15-20% on assessments, which would substantially reduce the dependence of the UN on the United States. "The fate of the organization itself is in danger," he says, calling on delegates to "rise to the challenge." [SG/SM/5982;GA/9050] At the same meeting, Italian Ambassador Paolo Fulci speaks on behalf of the European Union. He says: "Attaching conditions to fulfillment of international obligations is not acceptable. The organization should get serious about imposing penalties on members who are constantly late and in major arrears." -- Many observers are surprised that the SG does not propose layoffs or closing down UN programs, as had been widely rumored. Later, US Mission spokesman James Rubin refuses to comment on the proposal to lower the US assessment, but he says: "governments and multinational corporations are reducing the size of their administrations. Today, it is time for the UN to do the same." -- In a news story on USG Connor's speech of the day before, the New York Times comments that budget cuts would "begin to shrink an organization that has been widely criticized for its bloated bureaucracy and the sinecures provided for underemployed political appointees from around the world." Also, according to the Times, a spokesman for the US Senate Foreign Relations Committee said that the committee would demand a cut of "at least" half in the UN budget.
February 7, 1996: The Secretary General's speech is widely covered in the press, but hardly any report mentions the earlier proposal by Olof Palme of Sweden for a substantially lower assessment cap. In fact, the SG in his speech used exactly Palme's language when he said that "a more even distribution of the assessed contributions would better reflect the fact that this Organization is the instrument of all nations." In Europe, where there is much opposition to lowering the US assessment, some editors speak of the proposal as a "gift" to the US and a subsidy to the rich. But some countries, including Sweden, seem inclined to accept and even to favor the idea of lower US payments, which means also lesser US leverage.
February 13, 1996: A letter in the New York Times argues that it is unfair for the US to withhold payments "as leverage to impose reforms." Concluding: "Let us pay what we owe and negotiate reforms and assessment formulas separately."
Mid-February 1996: The German UN Association mails the "Call for Action" statement to all its members. Also about this time, the Italian Young Federalists translate the "Call for Action" into Italian and circulate it to their members, and to members of the European parliament.
February 15-16, 1996: At a meeting between the UN and thirteen regional organizations at UN headquarters in New York, the Secretary General makes some comments about the current role and problems of the UN. "Globalization," he says, "is bringing to the fore a host of new actors on the international scene," and he goes on to mention "non-governmental organizations, international business,academic institutions and regional organizations of various kinds." Considering the financial crisis and the future of the UN, the SG comments: "I cannot predict how this crisis will be resolved. But it is clear that the UN will be very constrained in undertaking new tasks. Indeed, some activities and missions may have to be phased out because of lack of resources." The SG also spoke about an "imbalance" between the UN and regional organizations, apparently with NATO in mind, referring to the scant resources put at the disposal of UN forces in Bosnia during open conflict compared to the large resources put at the disposal of NATO forces after a peace had been agreed.
February 19, 1996: In its issue of this date, the always well-informed International Documents Review comments: "Very recently, the United States perception of the United Nations, especially its Charter-based primacy among inter-governmental organizations, seems to have changed. Its view, as expressed in the General Assembly working group on strengthening the United Nations, is that the UN is one among many organizations in dealing with global challenges." IDR goes on to say: "There also seems to be a Western effort, under the rubric of UN reform, to strip the Organization of many of its development-related functions." [IDR, 19 Feb, p. 5] IDR also reports on serious shortfalls in fund-raising by the UN High Commissioner for Refugees for its humanitarian relief work in the Great Lakes Region of Africa, apparently part of a general decline in funding for multilateral efforts.
February 21, 1996: Madeleine Albright conveys detailed US proposals for UN reform in a letter to GA President Diogo Freitas do Amaral. The 33-page reform document elaborates on previous US proposals calling for "streamlining" and downsizing the organization. -- On the same day, Psychologists for Social Responsibility, a US-based organization, mails the "Call for Action" statement to all its members; in a covering letter, it asks for their "support in saving the United Nations."
Late February 1996: Jock Forbes (World Federalist Association) and Rod Morris (Center for Global Citizens) found Citizens for Funding the United Nations (CFUN), a cooperative effort of nine US-based organizations, seeking to pressure Congress and the Administration to pay the US dues to the UN. They propose that citizens send $7.00 (a sum calculated to be the total annual cost per capita of US participation in the UN and its agencies) to members of Congress, asking that they forward this sum to the UN. [Further information]
February 29, 1996: As of this date, one month after the assessment due date, nine more countries have paid their yearly dues in full, bringing the total to 34 out of 185 member states. Among the large payers, Spain and Belgium have now paid in full. But none of the top six payers have paid in full. Of the five permanent members of the Security Council, none have paid in full. According to a publication of the Secretariat [A/50/888], 41 states have now lost their voting rights in the General Assembly, because they owe more than two full years of assessments.
Early March 1996: Further progress of budget bills in the U.S. Congress suggests that funding for the UN will be authorized at below the rate of the US assessment for FY1996 (the 1995 UN budget). Peacekeeping will be authorized at a rate which will be less than half the rate of peacekeeping expenditures in recent years and would fall in FY 1997. And funding for UN programs and agencies will be cut and have conditions attached for "reform" measures. The UN Population Fund is under special pressure and has had no funding authorization through July.
March 4, 1996: US Representative Madeleine Albright speaks at a meeting in Raleigh, North Carolina on financing the UN. Senator Jesse Helms, the state's senior senator, is in the hall. She proposes a new administration policy, soon to be offered to the Congress, under which the US will accept a lower (20%) rate of assessment. UN arrears will be paid off over a five-year period, but with conditions that certain reform measures be met. "Fiscal discipline" will be required, she says, for "the UN's bureaucracy has grown to elephantine proportions." She speaks of the UN's accomplishments but emphasizes that the payment of the back dues is a means to "gain support from other countries to make the kind of far-reaching changes we want."
March 6, 1996: Global Policy Forum puts up a new sits on the World Wide Web featuring information on the UN financial crisis. At about the same time, Citizens for Funding the United Nations, launches its nationwide US campaign with a letter to 110 organizations.
March 7, 1996: US Representative Madeleine Albright delivers a speech to the GA Working Group on the Financial Situation, repeating the position she announced on March 4. She emphasizes the "linkage" that will exist between US payments and "reform" of the organization. And she says "We expect our Congress to insist, at a minimum, on specific legislative conditions that would permit the actual payment of arrears to occur only as the U.N. reforms." She urges the UN to "set priorities, focus on core functions" and "drop low priority tasks." The European Union responds that the conditions imposed by the United States and other aspects of the US proposal are "unacceptable." [At this round of meetings of the Working Group, the Bureau circulates the text and initial signatories of the NGO "Call for Action" statement - an unusual step] -- On the same day, the GA Working Group on UN Finance decides that the UN must reveal the sums that are owed to countries for their contribution of troops and equipment for peacekeeping. This decisions overturns a longstanding practice to keep these sums confidential. Of the UN's peacekeeping debts, more than $300 million is owed to India, Pakistan, Bangladesh and Nepal. Many countries argue that when rich countries do not pay their assessments, they are "borrowing" from poor countries such as these. India alone is owed over $90 million, a large multiple of its ordinary assessments. -- On the same day, the United Nations Association-USA organizes a major lobbying effort in Washington DC. Some 200 people, including leadership of the organization across the country had 600 appointments with members of Congres as well as people in the executive branch, including Vice President Gore.
March 8, 1996: Ambassador Hisashi Owada of Japan tells delegates that the UN should not be excessively dependent on a single country for its financial resources. In an obvious reference to the Secretary General's proposal (accepted by the United States) that the cap on regular budget assessments be lowered from 25% to 20% he says: "It would make the organization too vulnerable to unbearable risks due to unstable payment of countries."
10 March, 1996: The Central Committee of the European Federalist Movement, meeting in Rome, unanimously approves a resolution on the UN financial crisis to be sent to Italian political leaders and to the Italian government.
March 11, 1996: The United Nations presents to member states a list of what is owed them for peacekeeping. Such a list had never been made public before. The largest sum is owed to France ($216.2 million), followed by Pakistan ($60.4 million), India ($49.5 million), the US ($47.1 million) and Norway ($40.1 million). Many poor countries are owed several times the value of their annual assessments.
March 12, 1996: Secretary General writes a letter to Prof. Freitas do Amaral, President of the General Assembly, arguing that the costs of special political and human rights missions authorized by the General Assembly, with estimated costs of $100 million over the biennium, should not be borne by the regular budget. Human rights missions in Haiti and Burundi alone may total $54 million, and there are additional special projects in Rwanda, El Salvador and elsewhere. These put an intolerable strain on a program budget which has already been severely cut, the SG argues. [A/50/891]
March 13-15, 1996: The Staff-Management Coordination Committee of the Secretariat, meeting at the Harrison Conference Center in Glen Cove, Long Island, develops a strategy for downsizing the UN staff. Meeting under the chairmanship of Under Secretary Joseph Verner Reed, the group decided on how the cuts would be made and how they would affect various UN offices worldwide. An elaborate staff review would decide on "redeployment" of staff, i.e. those who would stay in their posts, those who would be offered other posts, those who would be asked to leave.
Mid-March 1996: The Danish United Nations Association, releases an "Appeal" statement on the UN financial crisis, in the name of "the popular movements of the United Nations in the Nordic Countries," calling for urgent action by governments to solve the crisis. The statement is circulated to Nordic parliamentarians and other leaders. -- On the same day, the Clinton administration submits its 1997 budget proposals to Congress. The budget includes payments to the 1996 UN budget, as well as a plan to pay off arrears over 5 years "contingent upon the achievent of specificreform measures" to be "defined jointly by the Administration and Congress." The budget cuts UN peacekeeping to $282 million for 1997 and its provisions for regular budget arrears appear to be very small (according to one reading of the budget, only $11million seems to be allocated for this purpose, while there are $9 million in "withholdings" from the assessment, leaving a balance of $2 million).
March 22, 1996: The Secretary General issues a report giving a detailed summary of the financial situation. He says that the UN's financial situation "remains critical" and that unpaid assessments "remain at perilously high levels." "The time for finding a solution is running out," he says ominously in conclusion. The report is accompanied by a graph and tables. It reports that total outstanding assessments as of March 15 stood at $3.14 billion--$1.22 billion for the regular budget and $1.92 billion for peacekeeping. Of this amount, $1.6 billion (more than half) was owed by the US. The organization will exhaust its reserves in July and will suffer from a hemorrhage of cash thereafter, leading to financial disaster later in the year. [A/50/666/Add.4]
March 25, 1996: Susan Mills, Director of the UN's Financial Management Office, speaks to the DPI/NGO Briefing at UN headquarters. "Every time I address this group I think the financial situation can't get worse, but it does," she says. While highlighting the enormous level of arrears of the United States ($1.595 billion), she also points out that many other member states are making special efforts to pay up, even those that are experiencing economic difficulties. She stresses that the obligation to pay UN assessments is binding under international law, superseding any national laws. She also insists that members must provide funds to carry out the programs they decide on-they cannot add new programs while cutting budgets. She stresses the important role of NGOs in getting information to the public and mobilizing support for the UN, so that the crisis can be overcome.
March 25-29, 1996: Fifth (Budget) Committee holds a series of important meetings, which discuss assessments for peacekeeping, penalties for arrears, and funding of special political and human rights missions. During the meetings, the EU complains that monies are still being borrowed from the peacekeeping budget, calling it "unwarranted and inconsistent with established guidelines."
March 26, 1996: The Fifth Committee takes up the Secretary General's proposal that the special political missions be funded by additions to the regular budget. In particular the missions in Haiti and Guatemala are at issue, but including other such missions, the total cost over the biennium is estimated to be $142 million or about 5.5% of the total budget. With existing cuts in the budget, the Secretary General argues that "I have no flexibility to implement additional mandates within existing resources." The Secretary General argues that the General Assembly should chose to cut programs if it is unwilling to vote new monies. The United States insists that the financing be found in the existing budget and that no new assessments be authorized. The EU and many other countries argue that no resources exist and that the missions should be paid for by new budgets. The United States insists on the need for consensus, blocking support for the SG's proposal. The Committee then decides to postpone its decision on where to find the funds until after the review of the regular budget cuts in May. The Committee funds the special missions by a temporary authorization for April and May only.
March 27, 1996: National Public Radio (US) runs a major story on UN finance, with special reference to the Whitehead initiative. Other major media cover the story as well in the days following: on March 28, there is an Associated Press wire story and on March 30 a feature story on CNN Headline News. -- On the same day, in the UN Fifth Committee, the European Union, reiterates its position that, under Article 19 of the Charter, Member States should lose their right to vote in the General Assembly once they accumulate more than two years' arrears, instead of almost three as is current practice.
March 28, 1996: Responding to a requirement of the General Assembly, the Secretary General issues a revised budget, containing proposals for cuts as mandated in the December 23 budget (adopted under intense pressure from the US). Some 800 staff posts will be cut. "One should not underestimate the financial and human costs of this process," says the text. Large cuts will come in administrative services, publications, policy analysis, status of women, poverty, and regional commissions. The Human Rights Centre and the High Commissioner for Refugees will also take cuts. But the report tries to put a good face on the cuts, insisting that greater efficiency is being developed within the secretariat, so that program reductions will be minimal.[A/C.5/50/57] The proposal goes to the Advisory Committee on Administrtive and Budgetary Questions and will be taken up by the Fifth Committee in mid-May. -- On the same day, the SG gives a speech in Seoul, co-hosted by the Federation of Korean Industries. He says: "by June, cash on hand will be insufficient to cover operating expenses. Increasingly, the crisis has begun to limit what the United Nations can do, and what it can hope to achieve." He also argues that significant reforms have already been achieved: "structures are being streamlined. Staff size is being reduced . . . The Organization itself is being deregulated." -- On the same day, Russia pays all its regular budget assessment and announces that it will pay $400 million in total during the year, thus paying off some of its accumulated peacekeeping arrears. Russia is the 44th member to pay its full dues in 1996, announces Mr. Fawzi, of the SG's Spokesman's office, donning a UN blue beret during the daily press briefing, in what has become the symbolic way of celebrating full payment by member states.
March 29, 1996: -- On the same day, the US Congress passes yet another continuing appropriations bill through 24 April, to cover international programs including the UN. This authorization provides considerably less than the full assessment level. Funding for the UN Population Fund continues to be frozen until July. -- In the UN Fifth Committee discussions focus on the question of assessments for peacekeeping, under which some states pay only a small percentage of their regular budget rate. There is widespread feeling that this system is now unworkable and that many states pay too little into the peacekeeping budget. Other states, like Ukraine, pay more than their economies can absorb. During this discussion, Greece agrees to pay its peacekeeping share at the full rate, with a five-year phase-in, following the precedents of Portugal (1995) and Spain (several years earlier). Ukraine asks that it be allowed a phased five year reduction of its peacekeeping rate in a package with the Greek proposal. -- On the same day, The Nation, a leading New York-based magazine of opinion, goes on the newstands with its April 15 issue, which contains an editorial by James Paul entitled "Deadbeat Nation," calling attention to the growing UN financial crisis and criticising US pressure to downsize the organization and cut its social programs.
March 31, 1996: Additional states have paid their assessments during the month, including three large payers -- France, Russia and Spain. With two months past the due date, three of the five permanent members of the Security Council remain unpaid, however (Britain, China and the US). Japan, the second largest payer and an aspirant to a permanent seat in the Security Council has paid only a small part of its assessment; Germany, another aspirant, has paid only half its assessment.
April 1, 1996: Under Secretary Connor holds a press conference at UN headquarters at which he explains the present cuts. He says that about $250 million will be cut from operating expenses by the end of 1997, of which $98 million has already been identified. Some 800 professional posts will be cut, along with many more general service posts. Connor says that there are "too many people in this organization doing the same job for 20 years" and he adds that there is "nothing like a little creative tension" to get the UN moving. -- On the same day, a New York Times editorial appears, warning of the UN's financial peril and calling for an agreement in Washington that could free up funds for the UN budget. "America's debt, which represents a default on a treaty obligation, is an inexcusable embarrassment," writes the Times, concluding: "If Washington fails to come up with money solemly promised by three successive Presidents, not only downsizing but capsizing the U.N., it would be a moral and financial default by the organization's principal founder."
April 2, 1996: The New York Times runs a story by UN correspondent Barbara Crossette. Crossette describes the Connor press conference, referring to the UN as "this bastion of international bureaucracy" and detailing all the cuts envisaged, including a freeze on upgrading telecommunications and interpreting equipment. "The United States mission greeted the news with elation," she writes, quoting James Rubin, mission spokesman as saying: "Reforming the United Nations is no easy task, but this does mark a milestone in our efforts to force it to downsize."
April 3, 1996: The President of Italy, Oscar Luigi Scalfaro, speaks to the General Assembly and in the course of his speech refers to the financial crisis. After noting that Italy is the sixth largest payer and emphasizing that Italy has paid its bills on time he goes on: "I would like to say to those States which belong to the United Nations but do not fulfill their obligations: do you not realise that by neglecting the commitments to which you have freely subscribed - even when such neglect may not be your real intention - you end up not being on the side of peace, human rights, freedom and justice?" [Full Text] -- In the General Assembly, a debate about finances consideres funding of the special missions in Haiti and Guatemala. The Italian delegate, speaking for the European Union, expresses support for additional assessments to cover the costs of the missions, a position adamantly opposed by the United States.
April 8, 1996: The New York Times runs an op-ed piece by Secretary General Boutros-Ghali entitled "The U.S. Must Pay Its Dues." "The United Nations is on the brink of financial disaster," the SG begins, "Americans need to know what's going on . . . " After summing up the extent of the current budget cuts he says: "But no wizardry can achieve cuts of this magnitude without reducing the extent and quality of the work . . ." Turning to the deteriorating financial condition of the UN, he warns that the organization will soon run out of money, concluding: "When the League of Nations collapsed, many members were surprised. They did not understand the depth of the problems. Today, the United Nations, created 51 years ago, is in deep trouble. This time around, there should be no surprises." -- The General Assembly Fifth (Budget) Committee considers a European Union proposal that would limit UN procurement to those states that are current in their dues. The proposal is eventually dropped, due to strong opposition from the United States.
April 9, 1996: Meetings of the Working Group on the Financial Situation get under way and will last through April 12. In another venue, the Administrative and Budgetary Committee, the United States and the European Union clash over a proposal to bar countries that are behind in their arrears from winning UN contracts. The EU has proposed that if states do not pay, they should not get contracts. "The award of contracts should be based on objective commercial criteria," insisted US delegate William grant. "Imposing a penalty on members states would go beyond the Charter." Renata Archini of Italy, speaking on behalf of the EU, said that the Europeans "will continue to pursue the principle whenever the question of procurement is brought up." The US is by far the largest debtor and US-based companies win by far the largest share of UN contracts.
April 13, 1996: In a story filed by UN correspondent Thalif Deen, InterPress Service examines the increasing support among delegations for a reduction in the assessment for the United States, based on recent discussions at the Working Group on the Financial Situation. The story quotes Malaysian Ambassador Razali Ismail, Japanese Ambassador Hisashi Owada and Egyptian Ambassador Nabil Elaraby as favoring a change to lower assessments for the largest contributor.
April 1996: UNA-USA releases a report of a poll of US public opinion on the UN conducted recently that shows strong support for the UN and indicates that the public would oppose candiates hostile to the UN. UNA concludes that opposition to the UN is far stronger in Washington DC than it is in the country at large.
April 21, 1996: The New York Times runs a story on US citizens sending money to the UN as part of a campaign on the financial crisis. The story is very favorable towards the UN and it is given an amusing twist by mentioning people who send in money for pets as well as for family members.
April 22, 1996: Susan Mills, Director of the UN Financial Management Office speaks to an NGO meeting on the financial crisis organized by Global Policy Forum, co-sponsored by the NGO/DPI Executive Committee and World Federalist Movement. She emphasizes the worsening trend of the crisis and thanks NGOs for their initiatives. In response to questions, she says that regular budget funds and reserves will be exhausted by mid-June, if not before. And she indicates that the outcome of the financial crisis is probably contingent on negotiations in other areas, such as a restructuring of the Security Council and the Secretariat. James Paul of Global Policy Forum announces a proposed program of vigils and protests. Monica Willard of the NGO/DPI Executive announces that the Committee has mailed out materials on the crisis to all its US-based NGO members.
April 23, 1996: President Clinton and the leaders of the Republican Party majority in Congress announce that they have reached an agreement on the federal budget for 1996 and that they will move swiftly to enact it into law. The budget agreement includes 1995 funding for the United Nations and its specialized agencies, as well as voluntary funding for UN and other international funds.
April 26, 1996: President Clinton signs into law the new budget bills that had been speedily passed by Congress. They include sums that will fund the United Nations regular budget contributions of the US for 1995 at close to their full level (a substantial increase over earlier proposals by the Republican Congressional majority). This funding is now 15 months past-due. The appropriations deeply cut peacekeeping funds, providing only $359 million for this purpose. Funding for other UN agencies are cut as well. Overall, the new appropriations bill eases the UN financial crisis, but the crisis continues, since US funding for 1996 is already overdue. Large sums are payable for prior years as well. Even if the $148 million remaining to be paid out under the appropriation was paid immediately, the US will still owe the world body $1.424 billion -- or more than the combined debts of all other members. -- The Washington Office on Africa, an important coalition of US church groups, issues an Acton Alert entitled "U.S. Delinquency Undermines International Programs." Among other things the statement points out that according to polls the United Nations enjoys greater confidence in the US than does the Congress. -- InterPress Service runs an article by Thalif Deen, reporting on the question of shutting down the UN. The article quotes Assistant Secretary General Dennis Halliday: "Closing ourselves down is in itself an expensive undertaking. People have to be sent home and repatriated [at UN expense] and all the rest of it. So I think we're not planning on closure at this stage of the game." He is also quoted as ruling out furloughs, which had earlier been proposed as a means of saving money: "No. We have checked that out. The Office of Legal Affairs has looked into that, and it is not an option for the Secretary General." The article says that hopes are fixed on a Special Session of the General Assembly on the financial crisis, as proposed by the Secretary General.
April 30, 1996: Under Secretary Joseph Connor holds a press briefing at headquarters. "Our regular budget balance tomorrow will be zero, he says. Only four months into its regular budget year and will be forced to borrow from peacekeeping funds. Sums expected from Germany and Japan had not materialized, leading the UN to a cash position $79 million below projections. In 1995, the UN reached the zero point in September. Speaking of the U.S. appropriations, Mr. Connor said they would probably not reach the UN for many weeks. "Promises are good, but cash is better," he said. -- On the same day, InterPress service reports that a coalition of 109 poorest countries are protesting changes in UNCTAD, especially the decision to eliminate the department concerned with their needs in the current UNCTAD restructuring and downsizing. -- As of this final day of April, 59 countries out of 185 have paid their regular budget dues. Britain and China paid in April, joining France and Russia, so that only the United States among the Permanent Members of the Security Council remains unpaid.
April 30, 1996: The Cato Institute, a conservative think-tank in Washington DC, publishes a paper in its Policy Analysis series called "A Miasma of Corruption: The United Nations at 50." With virtually no concrete evidence, and plenty of sweeping generalizations, Cato author Stefan Halper concludes that UN "corruption and mismanagement go beyond the routine fraud, waste, and abuse of resources that mark all public-sector enterprises." Cato receives support from a number of U.S.-based multinational companies.
May 1, 1996: The UN borrows $50 million from peacekeeping funds to cover part of the month's regular budget operating expenses.
May 6, 1996: Ghana told the Fifth (Budget) Committee that "It is glaring that a few of the defaulting states are reaping from the Organization far more than they are giving to it. Those who want contracts from the United Nations must ensure that they are not indebted to the Organization, at least as far as assessed dues are concerned."
May 8, 1996: In a lead article in the Financial Times, Edward Mortimer criticises the Secretary General, but states that the UN's main problem is the financial crisis. By withholding its assessments, writes Mortimer, "the US is imposing reforms which would never otherwise be agreed." He goes on to cite Amb. Colin Keating, chairman of the GA Working Group on the Strengthening the UN System, who says that the only question is "whether it [reforms] should be done incrementally or whether there are real advantages in some kind of big bang."
May 10, 1996: An exchange in question period in the British House of Commons raises the issue of the UN financial crisis. Mr. Cyril Townsend, Member from Bexleyheath, says: "Hon. Members know that the world's richest country -- which, in my view, is wrongly and undeservedly the host to the UN headquarters -- is pushing the UN to the brink of disaster." The government spokesman, Mr. Jeremy Hanley, speaks of the government's concern about the arrears, particularly the US arrears and speaks of the need for broad reform of the organization. A similar exchange occurred in the House of Lords on May 16. -- At the UN in New York, the Advisory Committee on Administrative and Budgetary Questions issues a report questioning whether the budget cuts proposed by the Secretary General "can actually be achieved" noting that there must be a clearer sense of priorities as to what programs can still be funded and what must be eliminated.
May 15, 1996: In the Fifth Committee, Under Secretary Connor reports that the current staffing level will allow the UN to be "certified" by the US Secretary of State as functioning within its current budget. Japan comments that member states should refrain from micro-managing the UN and Uganda declares that the UN cannot survive if it is to be ruled by the legislature of one member state.
May 21, 1996: United Nations Association-USA holds a conference on US-UN relations at the elegant Starlight Roof of the St. Regis Hotel. The conference features Vice-President Al Gore, National Security Council Director Richard Clarke, Ambassador Madeleine Albright and many others.
May 22, 1996: The Executive Board of the National Council of Churches-USA passes a strong resolution on the UN financial crisis, calling on the United States government to pay its dues "on time, in full and without conditions."
May 24, 1996: The General Assembly adopts a resolution dealing with the economic and social sectors of the UN. Among other things it asks the Secretary General to report on new and innovative ideas for generating funds for development.
May 31, 1996 As of this last day of May, 71 out of 185 countries have paid their regular dues to the UN. Japan has finally paid, leaving only Germany and the United States unpaid of the major regular budget payers (Japan and Germany have pleaded "technical reasons" for paying late this year). Including arrears from previous years, the UN is owed $963 million on the regular budget (of which the US owes $683 million or 71%), $1.685 billion for peacekeeping (of which the US owes $889 million or 53%) and $2.660 billion overall (of which the US owes $1.576 billion or 59%).
June 3, 1996: The Fifth (Budget) Committee of the GA rejects proposals for budget reductions, submitted by Under Secretary General Connor, saying they are too vague and asks for more specific proposals by 1 September. The Committee also decides to continue to examine the question of the cost of the special missions to Haiti, Guatemala, etc. and whether it is pratical to absorb the $120 million cost of the missions in the regular budget.
June 4, 1996: Lorenzo Ferrarin of Italy, speaking in the name of the European Union to the Working Group on the Financial Situation says that the EU insists that any general solution to the UN's finances must include as an "indispensable element" that member states give "reliable assurance" that "they will meet their future assessments in full, on time and without condition." -- On the same day in Washington, US Senator Frank Lautenberg (Democrat from New Jersey) says at a subcommittee hearing on UN appropriations: "Reneging on our funding responsibilities would be an egregious error and will come back to haunt us one day." At a hearing of the Senate Foreign Relations Committee, there is sharp criticism of the cost of US participation in the UN's international conferences and the administration affirms its policy to oppose any further conferences after Habitat II.
June 5, 1996: US Ambassador Madeleine Albright gives testimony to the Subcommittee on Foreign Operations of the Senate Appropriations Committee, speaking in support of the Clinton administration's "International Organizations and Programs" budget proposal for Fiscal Year 1997, which includes funding for UNDP and UNICEF. She points out that the UNDP appropriation dropped from $113 million in 1995 to $52 million in 1996. She says: "To protect their citizens, countries must act cooperatively. And the United States, as a global power with global interests, is a prime beneficiary of effective multilateral action." [Full Text].
June 19, 1996: The US government leaks information to the New York Times that it opposes a second term for Secretary General Boutros-Ghali. The Secretary-General promptly announces his candidacy and says he "hopes that the United States will change its mind."
June 20, 1996: The New York Times runs a lead story, quoting a "senior official" that the United States government would oppose a second term for Boutros-Ghali and that it would use the veto, if necessary, in the Security Council to block his candidacy. A senior official is said to fault the Secretary General for "resisting" US-led initiatives to "reform the bureaucracy" of the UN.
June 21, 1996: The Times runs a follow-up story quoting White House spokesman Michael McCurry that "it is important to have leadership that is capable of reforming the UN bureaucracy and decreasing the cost of financing the United Nations." Other sources quote State Department spokesman Nicholas Burns that the US was looking for a person who could "get control of the organization, reduce its expenditures, make it efficient. . ." These and other statements from officials suggests that the Administration is expecting substantially deeper budget cuts at the UN in the future -- cuts that the rest of the membership do not support. By linking "reform," financing and the question of a second term for the Secretary General, the Clinton Administration has complicated and deepened the current UN financial crisis.
June 24, 1996: Global Policy Forum releases news that the United States has paid virtually none of the UN regular budget dues authorized by Congress in late April. -- On the same day in Washington, the OECD releases an analysis of overseas development aid which shows that it fell again to 0.27 per cent of the 21 members' GNP, the lowest ratio recorded since the UN adopted a target of 0.7 per cent in 1970. The United States has the lowest percentage. -- On the same day in New York, UNDP Administrator Gus Speth reiterates in a statement that US contributions to UNDP have fallen over 50% between 1995 and 1996.
June 25, 1996: World Federalists of Canada issue a Briefing Paper "How Money Talks: the Financial Crisis at the UN" which provides a history and analysis of the crisis and calls on the Canadian government to support alternative funding for the UN.
June 28, 1996: The G7 summit meeting, held in Lyon, France, issues a final communique which takes up the UN and states that "the reform process is only just beginning but oncrete results are already visible." It goes on to note various reforms and cutbacks system-wide, particularly by "rationalizing" and reducing work in the social and economic area. -- On the same day, the last working day of June, the Clinton Administration has still not paid a penny of the regular budget assessment passed by Congress in late April. Administration spokespeople insist that the delay is due to certifications required by Congress. But many observers believe the administration may be withholding the funds as a means of pressuring the UN. All other major payers have paid as of this date, except Ukraine and Brazil. Germany and Japan were the most delayed among the other big payers.
