Global Policy Forum

Money Fights Are Brewing at the United Nations



By Neil MacFarquhar

November 8, 2009

The fact that it costs the United Nations an average of $2,473 per page to create every single document in its six official languages, while outside contractors complete the same work for around $450, prompts diplomats to accuse the organization of running amok during a global financial crisis.

It is budget season at the United Nations, and that is just one of several fights brewing. The two-month period of intense haggling is expected to be especially heated this year within the innocuous-sounding "Fifth Committee" that handles the crucial money decisions.

First, some major donors are demanding that Brazil, Russia, India and China absorb a larger share of the organization's costs to reflect their new economic weight. Those countries, however, are having none of it.

Then comes the widespread frustration that Secretary General Ban Ki-moon presented a two-year regular budget of about $4.89 billion. At first glance, that seems to be a mere 0.5 percent increase over current spending - except an annex of nebulous "add-ons" is likely to push the number to at least $5.4 billion, a leap of more than 12 percent, which many members argue is unsustainable.

Perhaps the largest hurdle of all comes down to the split between the developing versus the developed world. The richer nations see poorer members pushing for ever-increasing sums for development and other mandates for which they do not pay. The developing nations think that the policy pushed by richer nations of "zero growth" in the budget, except for political stabilization missions or peacekeeping, undermines the body's noble aims.

Negotiations basically divide into two stages: first the member states battle the Secretariat over its spending proposals, then they horse-trade among themselves to divide the agreed costs. Usually the body's different budgeting stages are staggered across different years, but 2009 is a rare year when all three main financial calendars - the regular budget, the division among member states and the separate scale for the cost of peacekeeping operations - fall due simultaneously.

Members widely accuse the Secretariat of trying to disguise added costs by essentially presenting two budgets: a Potemkin village version and a real one that arrives piecemeal and too late for them to dilute.

"What this comes down to is how do you control budget growth," said one senior United States official. Diplomats from 10 countries were interviewed for this article, but all refused to be quoted by name, citing the tense negotiations and the undiplomatic need to publicly analyze the spending practices of other nations. "The better picture you have of the overall budget, the easier it is to prioritize and make trade-offs."

The bulk of the so-called annex items are for about 27 "special political missions," whose costs have risen to a projected figure of more than $1 billion in the next two years from $100 million in 2000. Every bloc of nations has favorites, so the political missions are practically impossible to shave.

The largest increase for next year goes to huge missions in Afghanistan ($242 million for 2010, with 818 new staff members for a total 2,841) and Iraq ($159 million, with two fewer staff members for a total of 1,051).

The need to beef up security at United Nations outposts across the globe was estimated at $50 million, with the final figure still forthcoming, but that predated the October attack on a Kabul guesthouse that left five United Nations workers dead.

There are all sorts of random add-ons. They range from nearly $12 million for a slice of the multiyear project to standardize hundreds of random, antiquated computer systems, to $100 million for new furniture for building renovations. Exchange rate costs forced by a weak dollar will also drive up expenditures.

Angela Kane, the under secretary general for management, rejected the characterization of her budget as deliberately "piecemeal." Although the budget is negotiated every two years, the United Nations is not a static organization, and branches like the Security Council repeatedly demand new missions, she said, so not all the figures are available in neat two-year chunks.

Because salaries for nearly 40,000 employees eat up 65 percent of the budget, much of the Fifth Committee bartering revolves around new posts. Negotiators will debate, for example, whether each of the 15 judges at the International Court of Justice deserves a clerk, which would add six positions because they now share nine.

But establishing the new sliding scale for the budget assessment will also spawn a tug of war. Some states argue that the BRICs - shorthand for Brazil, Russia, India and China - pay far below their ability.

"The budget system was set up 60 years ago, and no longer takes into account the changes in the global economy," one European negotiator said.

The payments from Brazil and Russia are anticipated to rise to about 1.6 percent of the budget next year, a little less than the Netherlands, a much smaller economy. India, with 0.53 percent, pays slightly more than Ireland but has a G.D.P. that dwarfs it. China, at not quite 2.7 percent, pays slightly less than Canada, which has an economy one-sixth the size of China's.

China, groused one negotiator, has enough money to send rockets into space, yet pleads poverty when it comes to supporting the United Nations.

The basic number used to calculate payments is national income, but under an extremely complicated formula, deductions take into account population size, debt burden and a few other factors. Most countries pay just $25,000, while the ceiling for the United States, the largest contributor, is 22 percent of the budget. (Members complain that this warps the entire scale since it is below the United States' roughly 30 percent share of the global economy.) Any deduction from one country comes out of the pockets of the rest, because members are obliged to finance 100 percent of the agreed budget.

All the BRICs argue that in percentage terms their contributions will jump significantly, while countries whose economies have done poorly, like Japan, France, Britain and Germany, will see their assessments drop. Brazil's contribution will grow by 80 percent, Russia's by 138 percent, India's by 16 percent and China's by 20 percent. They call that evidence that the longtime formula is working.

But in dollar terms, these are relatively modest increases, the larger contributors say. Brazil's contribution to the regular budget will rise to $40 million from $22 million, for example, while China's will go to about $78 million from $65 million.

Ultimately, any change in the formula requires consensus among all 192 members. Since the Non-Aligned Movement plus China, which represent around 120 members, oppose any change, chances are slim.

That ultimately leaves the operating budget as the place to cut, hence the questions raised about costs like the $2,473 per page. "They are not printed on gold leaf," one diplomat dryly noted.

That price tag, said Ms. Kane, the budget czar, reflects the fact that the body keeps a staff of translators on call 24 hours a day to make sure any document can be translated instantly into English, Russian, French, Arabic, Spanish and Chinese. Outside contractors, while cheaper, cannot work as quickly, she said.

Negotiators note that the Fifth Committee alone produces some 10,000 pages of documents per year, and that hard copies of every single page do not need to be distributed to all 192 missions. The proposal to limit distribution to the Web prompts some grumbling, however.

"You have the small missions and small countries saying, 'What is this Internet?' " one Latin American negotiator said.



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