July 16, 1997: Secretary General Annan announces major new reform package that includes budget and staff reductions as well as restructuring. He also proposes a $1 billion reserve fund, to be subscribed by member states on a voluntary basis. Conservatives in the US Congress complain that the plan does not go far enough, but most member states react favorably. See a more detailed GPF report.
July 18, 1997: The UN releases a brief report by the Secretary General on alternative sources of financing. The report, requested as the basis of an ECOSOC debate scheduled for 23 July, is dated 23 June. The report was expected to be a test of US Congressional pressures on the Secretariat and the UN as a whole to avoid discussions of global taxes. The report, in fact, states flatly that "ideas or schemes for charges or taxes on international transactions do not appear viable" and it goes on to emphasize private initiatives and national-level taxes. In light of the broad international interest in global public finance, including support from the EU, the report reflects a big setback.
July 23-24, 1997: ECOSOC holds its debate on alternative finance. Speakers chide the Secretariat for the lateness of the report, but they seem to have little enthusiasm for challenging the United States. In fact, not a single government speaker mentions taxes or fees, though a group of NGOs joins an ISMUN statement that criticizes the Secretariat for self-censorship in the face of US pressure and pushes for global taxes.
July 29, 1997: Rep. Lee Hamilton makes a three-part proposal in US Congress Conference Committee to increase funding for US arrears to international organizations, but the initiative fails. Hamilton's proposal would allow the UN to credit US$ 107 million that it owes the US for peacekeeping operations to its funds. Secondly, an additional $95 million would have been payable toward ongoing assessed contributions. Finally, Hamilton's proposal would have limited a proposed contested arrears account to $390 million, the difference between the UN's calculation on amounts owed and the Administration's arrears request. Sen. Joseph Biden's attempt to allow $107 million to be credited toward US arrears failed, too.
August 1, 1997: A call for a Second Worldwide Vigil for the UN on October 23 is issued by Global Policy Forum Executive Director James Paul, World Federalist Movement Executive Director William Pace and World Federation of United Nations Associations Acting Secretary General Horace Perera. The vigil will protest the UN's financial crisis and demand a stronger and more effective UN. The vigil in 1996 took place in 32 cities. This time, the organizers hope to reach 50 cities or more with the event.
September 4, 1997: During debate on the House version of the foreign aid appropriations bill, Rep. Benjamin Gilman accepted that no funds would be available to the UN Population Fund (UNFPA) unless the President makes several certifications on its program activities in China. Currently, UNFPA has no program in China. If a program is restarted, all funds to the UNFPA could be cut off. This action, typical in recent years, is one of the many conditions the Congress places on UN funding.
September 15, 1997: The UN's Committee on Contributions reports that it has been unable to decide on a revised scale of assessments. The Committee's report to the GA's 5th Committee reviews some eight different proposals for revising the scale of assessments. An agreement on a ninth proposal, reflecting a consensus on all the major elements, was not reached. The US proposal to establish an eventual 20% ceiling on the US contribution to the UN's regular budget has received almost no support. The US has proposed raising China's and Japan's assessments to cover its own reduction. On the same day General Assembly President Razali raps the US for its non-payment in his final news conference. UN members, he says, should consider "very seriously" whether to accept the "half loaf" Washington is offering. "There is no reason why a special arrangement has to be made for the most powerful country in the world, in terms of what it has to pay, which is actually part of its legal obligations. And I don't think, given the present state of flux, that any country will come to the rescue to try to pick up the tab as a result of the United States inability or unwillingness to pay its arrears in full." President Razali also says in his farewell speech to the GA that "The financial crippling of the United Nations continues to obstruct the momentum for reform, preventing constructive negotiations for genuine reform of the Organization. " And he warns that "Blind unilateralism will be the undoing of the United Nations."
September 19, 1997: CNN founder Ted Turner, whose net worth has grown from $2.2 billion on Jan. 1 to $3.2 billion today, announces that he is making a donation of US$ 1 billion to benefit United Nations agencies, the largest charitable donation ever. The money is to be used to set up a not-for-profit foundation to support United Nations programs aiding refugees and children, clearing mines and fighting diseases. In a speech, Mr. Turner urges the US Government to pay its $1.5 billion arrears to the United Nations. See a more detailed GPF report.
On the same day, Under-Secretary-General Joseph Connor meets with Mr. Turner's aides for a preliminary discussion of how the gift could be structured.
September 22, 1997: In his speech to the 52nd General Assembly, U.S. President Bill Clinton says: "for the first time in my presidency, the US government has the opportunity to end the question of debts and dues once and for all". He states that he has made it a priority to work with Congress on comprehensive legislation to pay off the arrears and assure full financing of America's assessment in the coming years. He also calls on other member states to adopt a "more equitable" scale of assessments for the United States. Other speakers that follow are sharply critical of the U.S. non-payment and skeptical about the President's promises. The Prime Minister of Pakistan warns that "The UN today stands at the brink of bankruptcy."
On the same day, Secretary-General Kofi Annan reminds the Member States in a speech to the General Assembly of their legal obligations: "Some of you I ask to do what your legal obligations require, to liquidate your arrears and to pay your future assessments in full, on time and without conditions."
On the same day NGO's issue a press release titled "Clinton's Empty Rhetoric: citizens respond with a worldwide vigil." The release points out that in spite of the President's positive statements in his speech to the GA, US debts to the UN have reached unprecedented heights under his administration.
September 23, 1997: In a CNN interview, Britain's foreign secretary Robin Cook says that it is time for Congress to authorize the money to pay off the US debts to the United Nations. "We would very much like Congress to recognize ... that countries like Britain, which pays full and pays on time, does not feel it's fair when other countries - whether it's the U.S. or anybody else - does not pay in full and does not pay on time," Cook states.
As the General Debate at the GA continues, Norwegian Foreign Minister Bjoern Godal, says he is willing to discuss lowering the U.S. scale of assessments, but insists that Washington pay its debts first.
September 24, 1997: In the GA General Debate, criticism of US arrears is a common theme. France's Foreign Minister Hubert Vedrine says "it is a shocking situation that the U.N. should be living precariously and therefore under a system of financial and budgetary dependence with respect to its debtors."
September 25, 1997: As the GA General Debate continues, there are many strong statements about the financial crisis. Erik Derycke, Foreign Minister of Belgium says: "It is and remains unacceptable that Member States do not pay their dues in full and attach conditions to payment of dues." And Italian Foreign Minister Lamberto Dini says, "the Organization has to be able to rely on adequate resources. Assessed contributions must be paid in full, on time and without conditions by Member States." Mexico's Foreign Minister Angel Gurria says: "We do not believe . . . that the objective of cutting costs should guide the reform process. . . The road to dealing with [the financial crisis] is full, timely and unconditional payment of the assessments the General Assembly assigns to Member States."
September 26, 1997: The US House of Representative defeats an amendment, 242 to 165, by Rep. Roscoe Bartlett to strike the $100 million for U.S. payment of UN arrears in the FY98 appropriations. Rep. Barlett and his supporters argue that the UN owes money to the US, not the other way around. In late-night debate, Rep. Chistopher Smith of New Jersey states that spending for UN agencies and programs is "out of control." The $100 million is part of a larger package to pay part of US arrears to the UN. But both the arrears package and the regular funding appropriation remain stalled as the new fiscal year looms. Even when passed, it's likely that funding for regular assessments will be $25 million below the actual assessment level, so the arrears payment will be partly offset by further current deficits.
September 29, 1997: Members of Congress visit UN headquarters in New York to test sentiment about a reduction of the U.S. assessment rate. In meetings with ambassadors of Japan, the UK and Norway (among others), they are told bluntly that the international community is angry over US non-payment and over conditions imposed on the UN under present legislation. Under these circumstances, say the ambassadors, the chances for an assessment reduction is nil. The clear message to Congress: pay up and then we can move towards new financial agreements.
September 30, 1997: In a strongly-worded report, the UN's powerful budget oversight committee -- the Advisory Committee on Administrative and Budgetary Questions (ACABQ) -- criticizes the UN administration for its claim that financial cuts have gone hand-in-hand with efficiency gains, making for no overall program loss. The administration, say the report, "has not been able to demonstrate that the effect of financial savings (principally reductions in staff) on the quality of program delivery can be mitigated through commensurate efficiency gains." The report faults the Secretary General for not proposing ending programs or modifying them in order to meet the cuts in spending and it raises the question as to whether program quality has suffered as budgets have been reduced.
October 1, 1997: The new US fiscal year begins without Congressional agreement on spending authorizations for UN regular assessments or arrears. Though the Clinton administration paid $96.3 million to the UN in September, the last month of the previous fiscal year, its arrears remain above $1.4 billion. According to reports from Washington, the State Department plans to disburse a further $45 million in FY1997 funds in early October and will disburse the remaining $33 million later still. Questions arise as to why these funds, appropriated many months ago, have not been disbursed. As for the new fiscal year budget, agreement on the bills is expected to come at the earliest by late October.
October 3, 1997: Under Secretary General for Management Joseph E. Connor tells the Fifth Committee that the UN's finances are "bleak" and that it is "on the financial brink, lacking both stability and liquidity." He also warns that the UN will probably end the year with a negative cash balance of $272 million because of large arrears. He says that the UN expects to pay Member States a long-deferred $65 million for peacekeeping in the next few weeks, but since no state will pay significant peacekeeping arrears, he says the Organization will not make year-end payments for troops, leaving a year-end $907-million debt to states that have contributed troops and equipment. Connor added that the UN would have to dip into the expected $670-million peacekeeping cash balance to fund the regular budget during at least five months of 1998. Connor also gives a press briefing on the same day. In one small bit of good news, Brazil announces that it will pay $10.4 million to the UN by year-end, in addition to the $2 million it payed in September. This payment will still leave Brazil with about $10 million in arrears, the third largest after Ukraine and the United States.
October 4, 1997: More than 300 vigil organizers join a nationwide telephone conference call in the United States, organized by the World Federalist Association. Members of UNA-USA participate as well. GPF Executive Director James Paul tells participants that the vigil is "on a roll" and that it promises to have a major impact. Twenty-four cities have already announced plans for vigils, including New York, Washington, Philadelphia, Denver, Milwaukee, Salt Lake City and Whitewater, Wisconsin. Among the cities outside the US where vigils will be held are: Tokyo, Madras, Nairobi, Rome, The Hague, and Oslo. Click for current vigil information
Also on the 4th, the New York Times runs an editorial which points out the effects of the UN's financial crisis on the international criminal tribunals: "While in 1995 the Bosnia tribunal in The Hague was carrying out 25 criminal investigations," say the editors, "now there are only 3, in part because of Washington's arrears."
October 8, 1997: The US House of Representatives passes the "American Land Sovereignty Protection Act that would terminate US participation in the UNESCO "Man and the Biosphere Program, would prohibit any future designations of US land as "biosphere reserves" unless designated by Congress and would require congressional consent for new designations of US lands as "World Heritage Sites." The bill is part of the conservative attack on the UN and UN-related programs, which are seen to threaten US sovereignty and undermine the authority of Congress.
October 10, 1997: At a special briefing for NGOs at the US Mission to the UN in New York, Amb. Richard Sklar and other high-ranking staff ask for NGO support for the Helms-Biden agreement for funding of US arrears, arguing that it is the "only available" solution to the UN's financial woes. When NGOs express opposition to Helms-Biden, mission staff warn that without the controversial Congressional agreement, the US might withdraw from the UN and the UN might collapse. NGOs are skeptical about this no-choice-but-to-support-us scenario. Mission briefers also urged NGOs to give their full support to Secretary General Annan's reform package and asked for help persuading other countries that this is not just an "American package."
October 20, 1997: NGOs issue a press release announcing the upcoming Worldwide Vigil on the UN Financial Crisis. As of this date, there are 38 confirmed vigils in 16 countries. It is announced that Assistant Secretary General Gillian Sorensen will deliver a statement from Secretary General Kofi Annan at the New York Vigil.
On the same day, US Ambassador Bill Richardson makes a statement to the Fifth Committee of the General Assembly indirectly threatening that the US might leave the United Nations if the US demand to reduce its regular budget assessment to 20% by the year 2000 is not fulfilled. "I would be remiss", he said, "if I didn't point out that the failure to revise the scales of assessments for UN member states could seriously damage the U.S. relationship with the United Nations".
October 21, 1997: Continuing its tradition of harsh criticism of the UN, the Wall Street Journal runs a scathing editorial comment piece called "UNreform," that refers to "the black hole of U.N. administration" and speaks of the General Assembly as "a do-nothing debating society." After congratulating Sen. Helms ("his prodding has been effective"), it concludes on a harsh note of real politic: "If the Security Council were to be truly representative of the contemporary balance of power there would by only one permanent member."
October 27, 1997: As the Fifth (Budget) Committee takes up the issue of the new scale of assessment, feelings run strong. A speech by China's Permanent Representative Qin Huasun forcefully rebuts the idea that China will be willing to pay substantially more than its share. "Attributing the crisis to the scale of assessments . . . is just an excuse tor not fulfilling financial obligations to the organization, " he says, adding: "We call on the Member State with the largest arrears to clear its arrears unconditionally and without delay." After insisting that "capacity to pay" should remain the key to determining assessments, he returns to the issue of arrears. "No country has the right to lower its scale of assessments by itself," he urges, "let alone willfully demand a raise in other countries' scale of assessments. Any unilateral move on the question of assessments by placing one's domestic legislation above the international family will get nowhere."
October 31, 1997: US UN-delegate Bill Richardson speaks to an audience of international development professionals in Washington, noting that "the majority of the UN's resources and personnel are dedicated to helping the poor, displaced and hungry across the globe" and argues that "it will save US taxpayers money if we apply our resources jointly with other countries" to address these international challenges. He goes on to talk about the US debt to the UN and expresses the hope that Congress will vote on the bill containing the Helms-Biden funding plan, since time for negotiations on the US assessment are fast running out at the UN. On the same day, the UN Office of Internal Oversight Services, the watchdog agency, issued a report noting new efficiency savings and steps taken to identify potential mismanagement of funds. The head of the agency, Under Secretary General Karl Theodor Paschke, noted that UN administrative reform "is moving forward, not so much because of the financial constraints imposed on the Organization, but to a large extent in spite of them."
November 6, 1997: Amb. Richard Sklar, US Representative to the UN for Management and Reform, speaks to the Senate Foreign Relations Committee, urging passage of legislation to fund the UN budget and arrears. "Failure to reach agreement with the other members on reform and changes in the financial arrangements," he said, "will . . . result in damage to the UN as well as to the interests of the US which are served by the UN." "The other members universally deeply resent the US position and attitude," Sklar told the Senators, continuing: "They see us as a debtor to the UN laying out conditions for repayment for monies owed under treaty obligations . . . They see us putting down managerial conditions for an independent organization in a micro-managing mode as further condition for payment of past dues or future assessments. They see the richest nation in the world demanding a discount from an assessment rate that they believe should be predicated on 'capacity to pay, i.e. Gross National Income.'" Under Secretary General Joseph Connor and Special Advisor to the Secretary General John Ruggie also spoke to the committee.
November 9, 1997: The US Senate passes an appropriations bill including regular funding for the UN and the condition-laden agreement for arrears payment. But observers in Washington have doubts whether the House of Representatives will pass the legislation as well before the date for the year-end recess. Disputes over funding for international family planning are at the heart of the House resistance to the bill, not opposition to funding the UN.
November 12, 1997: The UN General Assembly adopts by consensus a resolution endorsing reforms undertaken by Secretary General Kofi Annan on his own authority. The Secretary General had stated that the reforms would create a "leaner, more cost-effective structure, a budget more committed to solvency and development priorities . . ." The reforms included a new cabinet-style decision-making structure and new organizational arrangements for development and human rights. While the GA Resolution commended the SG for his reform initiative, it also asked him to take into account member states' views as expressed in recent GA debates. During the debates, many members have spoken of their concern that the reforms should strengthen the organization and not just be a cost-cutting exercise, under pressure from the United States.
November 13, 1997: Congress adjourns for the year without acting on the UN arrears package. [See more information under Latest News bulletin] At the last minute, however, Congress passes finance authorization bills, funding the current UN regular budget and the UN peacekeeping budget. The peacekeeping sum is only $210 million, a sum so small that the Security Council will be constrained for financial reasons from any major new peacekeeping missions. White House spokesman Michael D. McCurry says: "It is utterly boneheaded for Congress to fail to meet the commitments that the United States has had at the U.N. in terms of our arrears." And Senator Patrick Leahy of Vermont calls the action "outrageous ...shortsighted ...vindictive ...inexplicable."
November 19, 1997: The Presidency of the European Union releases an unusually blunt statement in Brussels that "strongly deplores the fact that the US Congress has suspended its autumn session proceedings without adopting any legislation concerning the payment of the arrears due to the UN" and it goes on to say that "it is very worrying that one of the major Member States continues not to fulfill its responsibilities under the UN Charter, which falls within its commitments under international law." On the same day, the New York TImes publishes an article concluding that the United States will not be able to gain the dues assessment reduction it had been seeking. The article quotes a European diplomat as saying: "The position of the European Union is that if the Congress is willing to recognize the damage that is being done to the United States' position at the United Nations -- and indeed the weakening of the U.N. -- and elects then to pay its arrears, then we are prepared to reopen discussion on the scales of assessments."
December 9, 1997: In a speech to the National Press Club in Washington, US Ambassador Bill Richardson expressed disappointment over the Congress' failure to pass legislation on the payment of US arrears to the UN. "The continued non-payment of our arrears is making America fair game for our most vocal international critics at the UN," said Richardson. He went on to say that he had been talking to members of Congress and hoped at an arrears package would be "the first issue that they address" when they return for business in 1998.
December 19, 1997: As the General Assembly winds up its work for the year, it is clear that it will not act to reduce the assessment rate for the United States -- a major goal in Washington's UN policy. Most member states feel strongly that there should be no consideration of an assessment change until the US has paid up its arrears. Confirming this, the New York Times runs an article in today's edition by its chief UN correspondent entitled "U.S. effort to Cut Its Dues Dies at an Angry U.N." The article quotes a European diplomat as saying that "if the Congress is willing to recognize the damage that is being done to the United States' position at the United Nations -- and indeed weakening the U.N. -- and elects then to pay its arrears, then we are prepared to reopen discussion on the scales of assessment." On the same day, the UN General Assembly adopts a second ten-part resolution on reform, covering a wide range of measures recommended by Secretary General Annan. The most important item in the resolution was creation of a new post of Deputy Secretary General, a post that is widely seen as a key to better UN management and a means of reducing the day-to-day administrative burden from the Secretary General. The post of Deputy is an appointment of the SG, not elected by the GA as some proposed. Though many of the SG's proposals were adopted in this resolution, others were postponed for further action in 1998. As debates continued to make clear, the UN membership is quite critical of the reform process and many member states fear that it is a diminishment of the organization, imposed by the United States.
December 22, 1997: The UN General Assembly adopts a new two-year budget and a new scale of dues assessments in the final hours of its 1997 session. The new budget at $2.532 billion ($1.266 per year) is $51 million less than the previous two-year budget or about a 2% reduction. The new assessment scale lowers the sums due from the smallest and poorest countries by dropping the minimum or "floor" rate of dues and it also maintains the assessment rate to be paid by the United States at 25%. Only hours before the GA acts, the Fifth (Budget) Committee completes its work and makes its recommendations in the form of a draft resolution.
December 24, 1997: Under Secretary General Joseph Connor gives a press briefing on the UN financial situation. He cited a lower budget and lower staffing levels as accomplishments for the year. He also pointed out that some new concepts like a revolving credit fund and results-based budgeting had been put on the table by UN management. He also spoke about the new scale of assessments. He said he hoped that some countries would come forward with funds for the revolving fund. And he said that the UN would end the year with approximately $190 million in borrowings from peacekeeping.
December 28, 1997: The New York Times publishes an article by its UN correspondent Barbara Crossette that discusses the difference between the US public support for the UN and for multilateralism and the weak support for these causes in Washington. She cites both poll results and results of the Times's own inquiries, concluding that "the general public seems to support the United Nations and United States cooperation with other countries in times of crisis -- rather than solitary action by Washington playing the role of the world's police force." On the same day, however, the conservative New York Post publishes a "commentary" by columnist Partrick Buchanan titled: "Should we evict the U.N.: it has treated America and New York City like doormats long enough."
December 31, 1997: The UN ends the year with very serious debts, only very marginally reduced from the crisis levels of year-end 1996. During the year, United States total debts actually increased by $10 million, from $1.303 billion to $1.313 billion, while the debts of other member states declined by $99 million, making an overall decline of $89 million -- from $2.151 billion to $2.062 billion.
