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Canada & the UN > Newton Bowles Reports
Money and Management No wisecracks this year. "In a few years, the Organization has slid down the slippery edge to a point where the Organization has little if any financial flexibility, is highly illiquid and rests on a precarious financial perch" (USG for Management Joseph Connor). Dead-beat members, mainly the U.S.A., have done this to the UN. At year's end 1997, arrears in assessed contributions (legal obligations) totalled $2,047 million. Contributions Paid and Not Paid - 31 December
1997
The U.S. share of arrears was $1,313 million ($373.2 million regular, $939.7 million peacekeeping) or 65% of unpaid dues. How does the UN keep going? It cannot go out of the house and borrow. The reason is political. Payment of dues means you are committed. If you run up a two-year debt at the UN, you lose your vote. (Occasionally, rarely, a government is debarred for other reasons: e.g. apartheid South Africa.) Obviously the U.S. can afford to pay. Its delinquency is political. So no outside borrowing, but in-house the UN has borrowed from its Peacekeeping budget to cover regular expenses. This is possible because, for peacekeeping, governments advance troops and equipment against later UN reimbursement. Delayed reimbursement (i.e. unpaid debts) is what carries the UN, currently about four months of the year. In December 1997 the UN owed about $190 million to peacekeeping. Because there is a drastic reduction overall in peacekeeping, this can't go on much longer. The "scale of assessments" (how much each country must pay) is based on capacity (GNP/population). The scale is reviewed (by the G.A.-- a technical group among governments) every six years. Last year, 1997, was a review year (coinciding with a biennial budget review). Exceptions to the "capacity" base are the "ceiling" and "floor": hitherto 25% and 0.01% respectively. Although its share on the "capacity" basis would be a bit more than 25%, the U.S. Congress is demanding that it be reduced to 20%. Nothing doing, said the G.A., we won't even talk about it until you pay up the last penny. The door was left open just a crack: the G.A. said that, when it resumed meeting in 1998, it would "consider reviewing the scale for the years 1999 and 2000 . . . in the light of all relevant factors" (i.e. status of contributions). The European Union, which contributes 35%, was not about to be intimidated. At the bottom of the scale are about 95 countries below the floor. The old minimum of 0.01% is about $100,000 (in U.S. dollars), a rate that may be three or four times their GNP capacity. Lowering the floor to 0.001% is much fairer. For the UN, the overall drop in income is not significant. Among other elements in the new scale (1998-2000), France and the U.K. stay about the same, Germany goes up just a little, Russia goes down (from 2.873 in 1998 to 1.077 in 2000) and Canada has a small drop (from 2.825 in 1998 to 2.732 in 2000). Japan takes the big jump (from 17.981 in 1998 to 20.573 in 2000). The U.S. stays flat at 25%. As for the regular UN budget, it goes down from $2.608 billion for the two years 1996-1997 to a level of $2.532 billion for 1998-1999. The budgetary term for this is "negative growth", a paradox whose impact may strike weight-watchers. The number of jobs has been cut by 25% since 1985; and, of these, 1,000 fall out in 1996-1997, leaving 8,695 posts in 1998-1999. Documents will fall 30%, partly by putting them on Internet. Other efficiency measures will reduce administrative overhead and public information (curious lumping) from 38% now to 25% in 2002. Meantime, efficiency savings have already yielded $13 million for the Special Development Fund established in the "Reform package"; and this is expected to reach $100 million a year. This is a good way to make the point that reform is not primarily to save money but to make the UN serve the world better. This is also the rationale for "results-based budgeting", proposed by the Secretary-General but not yet understood by the G.A. What about Management and all the 8,695 people being managed? Hear first top manager Kofi Annan at Davos. He began by saying that his job has been likened to that of a big firm's CEO, with UN member States as the Board of Directors, the world's people as shareholders, and development programmes and peacekeeping operations as the stock in trade. But the comparison stops there. How would you react if your board members -- all 185 of them -- micro-managed your business, gave you conflicting mandates and denied you the resources needed to do your job? What would you do as head of a club whose leading members do not pay their dues? What would you think of corporate governance that does not permit borrowing to offset this funding crisis? So if you think of me as a chief executive officer, remember that I am also equal parts juggler and mendicant. "Micro-management" can be translated as political pressure. Although pay at the UN continues to fall well below comparable civil service in the "North," in the "South" it looks very good. In the past, managers were not trained, they happened. Regulations accumulated. These problems are being tackled as never before, in the reform mode; and Karl Paschke, chief of Internal Oversight, with his sleuths, is ferreting out skulduggery and bad management. He has observed that some waste and mismanagement exist in every large bureaucracy. He works with managers when possible, to help them; but they need to know that his office is active in assuring good conduct and accountability. In a World Chronicle interview for broadcast last November, he also pointed out that the many cultures represented in the Secretariat, coming from over 100 countries, made UN management much more difficult than in a national service. Nevertheless, he said, "in my view the overwhelming majority of the United Nations employees are dedicated, professional people who work diligently and who work very long office hours." There were, he said, some deficiencies in the old staff rules (e.g. concerning "conflict of interest") and these have been taken care of in the new Code of Conduct just approved for UN staff. Coming from a man who stands outside UN management and has no turf to protect, these words are reassuring. Karl Paschke serves a one-time 5-year term, not under the Secretary-General but under the General Assembly. I hope he is still jamming with his saxophone. The new Director of Human Resources (a.k.a. People), Ms. Rafiah Salim,
is just finding her way. Let us be grateful for Kofi Annan's qualities;
his humanity and compassion. In the past two years more than 200 UN
men and women were killed in line of service; and the Convention on
the Safety (Protection) of UN personnel has not got enough ratifications
(government commitments) to bring it into force. |
