Global Policy Forum

By Thalif Deen

A new North-South divide between rich and poor nations -- over budgetary control and management reforms -- may be heading for a political showdown at the United Nations.

"It's numbers versus pocketbooks," says Deputy Secretary-General Mark Malloch Brown, who is hoping that the North-South deadlock will not continue. Asked if the sharp division between developed and developing nations would result in a possible shutdown of the United Nations in the absence of an agreement on the budget, he told IPS: "I definitely hope not. I hope peace and trust is going to break out. If not, it's a defeat for both sides."

The United States, Japan and the 25-member European Union -- which collectively pay over 82 percent of the U.N.'s proposed 3.8-billion-dollar regular budget for 2006-2007 -- are demanding that unless there is a radical restructuring of the United Nations, they will continue to impose spending caps on the organisation. The political deadlock has already resulted in the U.N.'s two-year budget being truncated to a six-month spending limit, making it difficult for any long-term financial commitments. Prodded by rich nations, the 191-member General Assembly was forced to approve only 950 million dollars for the first six months of this year, leaving the world body at a hand-to-mouth existence.

The spending cap ends Jun. 30, possibly to be followed either by a three-month or another six-month renewal, prompted primarily by the United States, the biggest contributor accounting for 22 percent of the budget. Asked if rich countries were justified in demanding a larger voice because of the power of the purse, Malloch Brown said that he was more inclined to support the position taken by the 132-member Group of 77 developing countries. "I completely agree that the universality of the United Nations is the single greatest comparative advantage -- and universality means that everybody has a say in decision-making," he argued.

Malloch Brown pointed out that consensus voting has been a way of trying to balance numbers versus pocketbooks. "But if it breaks down, you end up with a much more crude confrontation, which is damaging to the institution," he added. But then again, he said, "in a way it is a breakdown of legitimate governance in the organisation: a sense that developing countries have been marginalised in decision-making, which has led us to where we are."

"So for countries to sort of bring the big boot to bear -- 'that we control 82 percent of the budget' -- merely exacerbates a sense of exclusion which is already there," he added. "I am with the G-77 on this one. I think it is a very imprudent tactic by donor countries to threaten that crude financial power," he said. The Group of 77 (G77), the largest coalition of developing nations, says rich nations are using the budget crisis as a weapon for forcing management reforms, including increased powers to the secretary-general, staff buy-outs, sharp cuts in existing political programmes and outsourcing some of the services done in the U.N. premises. All or most of these reforms were proposed by U.N. Secretary-General Kofi Annan in a landmark report released last month.

At a G77 ministerial meeting in Malaysia Monday, the G77's current chair, South Africa, firmly stood its ground. Speaking on behalf of the G77 and China, Aziz Pahad, South Africa's deputy foreign minister, said developing nations were concerned about the spending cap that has been imposed on Annan in carrying out his duties.

"It is unacceptable that this unprecedented measure of restricting the expenditures of the organisation by authorising the secretary-general only to enter into expenditures limited to 50 percent of the approved budget for 2006 is continuing," he added. "To avoid an unnecessary crisis, the G77 and China expects that the spending cap will be automatically lifted at the end of June 2006. The United Nations deserves to receive adequate, predictable and uninterrupted resources to allow the secretary-general to undertake effectively the work of the organisation, " Pahad said.

The developing nations, comprising over two-thirds of the membership in the world body, are brandishing their voting power against the rich. At the same time, rich nations are using their economic clout to threaten a closure of the United Nations if no funds are approved, come Jul. 1.

Malloch Brown warned that if there is no agreement on the budget, it will be a tremendous setback. "It could further polarise the two sides," he added. Asked the reason for the new North-South divide, he said: "We puzzle as to why we got into this position. This was not an issue of just management. This was about power and the future control of the organisation."

According to the deputy secretary-general, "The kernel of it is rooted in the failure of Security Council reform, the Iraq war, and how the organisation was established -- all of these things in the context of a major redistribution of power in the world and political economy." He said the United Nations has not adjusted itself to this in governance terms -- and particularly to rising new powers such as Brazil, South Africa or India -- to be more unrepresentative today than it was two years ago, 10 years ago or 60 years ago.

"And until that problem is addressed, a lot of this debate about management reform gets hooked up in it. Everybody, both north and south alike, will have to find a way of resolving these governance issues -- and it's not just the Security Council but also the new Human Rights Council and the Peacebuilding Commission," he said.

Malloch Brown said it was generally a way of managing the organisation in the governance sense in which everybody feels they have a stake. "And we have lost that. We have to put that on one track. And then, in order to avoid a budget cut in June, we have to be on a second track: management reforms. Because if you separate it from the politics, and just look at it as management reforms per se, there is very little to debate about."

He said the package of reforms proposed by Annan last month is "very pro-developing countries... And its biggest single recommendation is spending more on field staff, so that we can do a better job in peacekeeping and humanitarian operations around the world."