Global Policy Forum

Bolton Presses for New Method


By Warren Hoge

New York Times
March 29, 2006

John R. Bolton, the American ambassador, will outline a proposal for fundamental changes in calculating United Nations dues on Wednesday that he said would address Congressional concerns that "the United States doesn't get value for money." Secretary General Kofi Annan with the French ambassador, Jean-Marc de la Sablií¨re, left, and the American ambassador, John R. Bolton.

The plan, which Mr. Bolton is to present before the House International Relations Committee, has circulated privately and infuriated China and Russia, whose dues would rise, while the obligations of the United States, Japan and major European countries would decline.

"Obviously, when any country's contribution goes up, that is not going to be popular," Mr. Bolton said in an interview on Tuesday. "But the real question is, will the U.N. step out of an antiquated system that it is using now and use something that in the best judgment of most contemporary economists in the international field is a better method," he said. That method, known by economists as purchasing power parity, or P.P.P., would determine a nation's ability to pay under a system that measures comparative standards of living, rather than using the existing method of basing contributions on gross national products.

"The real issue in calculating the scale of assessments is how you evaluate the strength, the size of economies that are in very different circumstances, with currencies which are often not directly convertible, and that have official exchange rates which are not reflective of the actual size and strength of the economy," Mr. Bolton said.

Mark Groombridge, an economic counselor at the United States mission, said he ran into fierce opposition from China, Russia, India and some developing countries when he discussed the proposal before the General Assembly's budget committee on Monday. "It is fair to say that the U.S. was subject to intense questioning and scrutiny on the matter," he said. Mr. Bolton said the opponents argued that the collection of data was incomplete and imperfect, but he said that the same was true of the current system.

According to International Monetary Fund figures, the P.P.P. calculation would result in China's gross domestic product rising from its current position of 7th in the world to 2nd, and Russia's from 16th to 10th. India would go from 12th to 4th. Japan has suggested its own reform plan, which has also drawn opposition from Beijing and Moscow because it would call for a minimum rate of 3 to 5 percent of the United Nations budget for the five permanent members of the Security Council.

The United States, which pays 22 percent, would be unaffected. So would Britain at 6.1 percent and France at 6 percent. But China's current rate is 2.1 and Russia's is 1.1 percent. Japan, which is the second highest contributor at 19.5 percent, has seen its ambitions to become a permanent member thwarted this year, at least in part because of opposition by China.

New calculations of assessments are made every three years, and the current one is to be decided this summer by a panel of experts and sent to the General Assembly for adoption. Mr. Bolton said the United States was prepared to "cushion" the effect on countries whose dues would rise the most by phasing them in over a three-to-five-year period. "That certainly eases the burden," he said. "We're prepared to take mitigating factors into account."

The United States estimates that its portion of the $1.9 billion budget would decline from 22 percent to 21.5 percent under its plan, a change that Mr. Bolton argued was so slight that it undermined claims that the American plan was devised to benefit Washington.

"That's why nobody can say we have an ulterior motive with respect to the United States in this," he said. "We think we have a reform that is consistent with the idea of advancing the ideals of all member governments. Member governments should really be assessed in accordance with their real world economic capacity." He added: "The point about purchasing power parity is that it's not an effort to put the U.S. in a better position or to put somebody else in a worse position. It's an effort to say, 'How do we really capture the strength of economies in the real world, how do we find a better way to reflect that reality in setting the U.N. assessment rate?"

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