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The United Nations Budget

THE UNITED NATIONS BUDGET

Under the Charter, it is the task of the General Assembly to "consider and approve the budget of the Organization" and to apportion the expenses of the UN among the member nations. From an administrative standpoint, the expenditures of the UN may be said to fall into two categories: expenditures that are included in what is termed the "regular budget," to which all members are obliged to contribute; and expenditures for certain high-cost items or programs, for which are established separate, or "extrabudgetary," accounts or funds financed by special arrangements that do not necessarily involve obligatory payments by UN members.

Included in the regular budget are the costs of services and programs carried out at UN headquarters and all overseas UN offices; the expenses of the International Court of Justice; and debt services charges, which are also listed as "special expenses."

Outside the regular budget, member states also are assessed, in accordance with a modified version of the basic scale, for the costs of peacekeeping operations. The number and cost of these operations has been aggravated in recent years, in large part due to political instability in Eastern Europe, Western Asia, and Africa. In the period 199293, the Secretary-General estimated the cost for these operations increased sixfold. In a report to the Economic and Social Council, he stated, "It would be mistaken to try to attach an order of importance or priority between peace and security on the one hand, and economic and social development on the other. The two are so closely interlinked as to be indivisible." This underlying philosophy provides the rationale for the growth in the number of peacekeeping operations and the expansion of their mandates beyond the previously traditional observer status, to activities such as disarming and demobilization of forces, humanitarian assistance, human rights monitoring, electoral verification, and civilian police support. Each peace-keeping operation is approved and budgeted separately.

Following is a list of 15 UN observation or peacekeeping operations under way as of May 2006, along with the original starting date: United Nations Truce Supervision Organization (UNTSO), June 1948; United Nations Military Observer Group in India and Pakistan (UNMOGIP), January 1949; United Nations Peacekeeping Force in Cyprus (UNFICYP), March 1964; United Nations Disengagement Observer Force (UNDOF) in Golan Heights, June 1974; United Nations Interim Force in Lebanon (UNIFIL), March 1978; United Nations Mission for the Referendum in Western Sahara (MINURSO), April 1991; United Nations Observer Mission in Georgia (UNOMIG), August 1993; United Nations Interim Administration Mission in Kosovo (UNMIK), June 1999; United Nations Organization Mission in the Democratic Republic of the Congo (MONUC), November 1999; United Nations Mission in Ethiopia and Eritrea (UNMEE), July 2000; United Nations Mission in Liberia (UNMIL), September 2003; United Nations Operation in Côte d'Ivoire (UNOCI), April 2004; United Nations Stabilization Mission in Haiti (MINUSTAH), June 2004; United nations Operation in Burundi (ONUB), June 2004; and United Nations Mission in the Sudan (UNMIS), March 2005.

As of 31 December 2005, unpaid contributions for the peace-keeping operations with separate assessed budgets amounted to us$ 2.92 billion. Shortfalls in the receipt of assessed contributions were met by delaying reimbursements to states that contributed troops, thus placing an unfair burden on them.

United Nations activities that are financed mainly by voluntary contributions outside the regular budget include: the United Nations Development Programme (UNDP), the World Food Program (WFP), the Office of the United Nations High Commissioner for Refugees (UNHCR), the United Nations Children's Fund (UNICEF), the United Nations Relief and Works Agency for Palestine Refugees in the Near East (UNRWA), and the United Nations Population Fund (UNFPA).

The member states of the specialized agencies decide on each agency's budget and scale of assessments separately from the United Nations itself.

COMMITTEES ASSISTING THE GENERAL ASSEMBLY IN FINANCIAL MATTERS

In 1946, the General Assembly established two permanent subsidiary organs concerned with administrative and budgetary affairs. The Advisory Committee on Administrative and Budgetary Questions is responsible for expert examination of the UN budget

YEAR APPROPRIATION YEAR APPROPRIATION
1946 $19,390,000 1968 141,787,750
1947 28,616,568 1969 156,967,300
1948 39,285,736 1970 168,956,950
1949 43,204,080 1971 194,627,800
1950 44,520,773 1972 208,650,200
1951 48,925,500 1973 233,820,374
1952 50,547,660 197475 606,033,000
1953 49,869,450 197677 745,813,800
1954 48,528,980 197879 996,372,900
1955 50,228,000 198081 1,339,151,200
1956 50,683,350 198283 1,472,961,700
1957 53,174,700 198485 1,611,551,200
1958 61,121,900 198687 1,711,801,200
1959 61,657,100 198889 1,748,681,800
1960 65,734,900 199091 2,134,072,100
1961 71,649,300 199293 2,362,977,700
1962 85,818,220 199495 2,580,200,200
1963 92,876,550 199697 2,608,274,000
1964 101,327,600 199899 2,488,302,000
1965 108,472,800 200001 2,535,689,200
1966 121,080,530 200203 2,625,178,700
1967 133,084,000 200405 3,608,173,900
AREA OF EXPENDITURE PURPOSE OF EXPENDITURE AMOUNT(US$)
OVERALL POLICY-MAKING, DIRECTION, AND COORDINATION
Overall policy-making, direction, and coordination 61,543,200
General Assembly affairs and conference services 560,256,500
TOTAL 621,799,700
POLITICAL AFFAIRS
Political affairs 427,627,200
Disarmament 18,739,900
Peacekeeping operations 92,859,800
Peaceful uses of outer space 5,903,900
TOTAL 545,130,80
INTERNATIONAL JUSTICE AND LAW
International Court of Justice 34,936,000
Legal affairs 40,634,000
TOTAL 75,570,000
INTERNATIONAL COOPERATION FOR DEVELOPMENT
Economic and social affairs 143,027,700
Office of the High Representative for the Least Developed Countries, Landlocked Developing Countries, and Small Island Developing States 4,358,60
Africa: New Agenda for Development 9,575,000
Trade and development 114,802,300
International Trade Centre UNCTAD/WTO 26,136,300
Environment 10,915,800
Human settlements 16,012,800
Crime prevention and criminal justice 10,040,200
International drug control 21,476,100
TOTAL 356,344,800
REGIONAL COOPERATION FOR DEVELOPMENT
Economic and social development in Africa 96,242,000
Economic and social development in Asia and the Pacific 65,067,100
Economic development in Europe 54,761,800
Economic and social development in Latin America and the Caribbean 85,371,400
Economic and social development in Western Asia 50,995,600
Regular programme of technical cooperation 42,871,500
TOTAL 395,309,400
HUMAN RIGHTS AND HUMANITARIAN AFFAIRS
Human rights 64,571,300
Protection of and assistance to refugees 66,243,900
Palestine refugees 34,641,000
Humanitarian assistance 24,275,300
TOTAL 189,731,500
PUBLIC INFORMATION
Public information 162,322,600
TOTAL 162,322,600
COMMON SUPPORT SERVICES
Management and central support services 477,145,800
TOTAL 477,145,800
INTERNAL OVERSIGHT
Internal oversight 24,187,000
TOTAL 24,187,000
JOINTLY FINANCED ACTIVITIES AND SPECIAL EXPENSES
Jointly financed administrative activities 10,445,200
Special expenses 81,255,900
TOTAL 91,701,100
CAPITAL EXPENDITURES
Construction, alteration, improvement, and major maintenance 104,566,600
TOTAL 104,566,600
AREA OF EXPENDITURE PURPOSE OF EXPENDITURE AMOUNT(US$)
STAFF ASSESSMENT
Staff assessment 411,194,200
TOTAL 411,194,200
DEVELOPMENT ACCOUNT
Development Account 13,065,000
TOTAL 13,065,000
SAFETY AND SECURITY
Safety and Security 140,105,400
TOTAL 140,105,400
TOTAL EXPENDITURES 3,608,173,900

and the administrative budgets of the specialized agencies. The committee's 16 members, elected by the General Assembly for staggered three-year terms, serve as individuals, not as government representatives. The Committee on Contributions advises the General Assembly on the apportionment of the expenses of the UN among the member nations. Its 18 members are elected for three-year terms and also serve as individuals.

PROCEDURE FOR DETERMINING THE REGULAR BUDGET

Every other year, the Secretary-General presents detailed budget and appropriations estimates for the following biennium. (Until 1974 there were annual budgets.) These estimates are reviewed and sometimes revised by the Advisory Committee. The programmatic aspects are reviewed by the 34-member Committee for Program and Coordination.

Aside from the regular budget, the General Assembly also allots a certain amount of money for unforeseen and extraordinary expenses and determines the level of the UN's Working Capital Fund, to which member nations advance sums in proportion to their assessed contributions to the regular budget. The fund is used to finance appropriations pending receipt of contributions and may also be drawn upon by the Secretary-General for other purposes determined by the General Assembly.

Since the expenses of the organization can never be precisely predicted, the Secretary-General reviews actual expenditures for the current year at each regular session of the General Assembly and proposes adjustments in the original appropriations. Usually, a supplemental budget is voted, but occasionally the General Assembly votes reductions.

INCOME ESTIMATES

It was estimated that expenditures for 200405 would be offset in the amount of us$ 443,851,900, to be derived as follows:

  1. income from staffassessment : us$ 415,613,700;
  2. general income : us$ 24,009,500
  3. services to public : us$ 4,228,700.

Under UN regulations, a percentage of the earnings of the entire UN staffis deducted in lieu of taxes and credited to "income." In order to avoid double taxation of staff members of US nationality, they are reimbursed by the UN for the taxes (federal, state, and city) levied on their UN earnings. The withholdings from the salaries of UN personnel of all other nationalities are credited to the member states' accounts against their assessed contributions. After taking into account staffassessments and other items of income, the net estimated amount remaining must be raised through assessed contributions from member states.

ASSESSED CONTRIBUTIONS OF MEMBER STATES TO THE REGULAR BUDGET

The scale of contributions of member states is established by the General Assembly on the recommendation of its Committee on Contributions. The basic original criterion for the apportionment of UN expenses was the ability to pay, with comparative estimates of national income taken as the fairest guide. Other factors, such as the comparative income per capita, the ability of contributors to obtain foreign exchange, and, until 1974, the dislocation of national economies arising out of World War II, also were taken into account. In this way, the US share was at first 39.89 percent, gradually declining to 31.52 percent for 197173.

In 1972, the General Assembly established a ceiling on the rate of assessment of the highest contributor, set at 25 percent. At the same time, it lowered the minimum rate of assessment to 0.02 percent (later lowered to 0.01 percent and in 1997 lowered again, to 0.001 percent) and requested the Committee on Contributions to give attention to the special economic and financial problems of developing countries. In 2000, the General Assembly adopted a new scale of assessments, lowering the ceiling of the amount to be paid by any single country from 25 to 22 percent.

In an effort to introduce what it termed greater fairness and equity in the scale of assessments, the General Assembly, in 1981, requested the Committee on Contributions to prepare a set of guidelines for the collection of more uniform and comparable data and statistics from member states and to study alternative methods of assessing "the real capacity of member states to pay."

The top ten contributors for 2005 were assessed at the following rates (percentages):

United States: 22.0%
Japan: 19.468%
Germany: 8.662%
United Kingdom: 6.127%
France: 6.03%
Italy: 4.885%
Canada: 2.813%
Spain: 2.52%
China: 2.053%
Mexico: 1.883%

PROPOSALS TO EASE THE UN'S
FINANCIAL DIFFICULTIES

By and large, the regular budget has never created major disputes among the member states, and most governments have usually paid their dues relatively punctually. However, beginning in 1963, the USSR refused as a matter of principle to contribute to certain items in the regular budget, such as the UN Commission for the Unification and Rehabilitation of Korea until its dissolution by a consensus vote of the 1973 Assembly, or to those parts of the regular budget devoted to the redemption of UN bonds (a method of raising funds for certain UN peacekeeping operations). France has taken a similar stand in connection with the redemption of the bonds. In addition, a number of countries have refused to contribute to the special accounts for peacekeeping operations. It was chiefly these controversial expenditures which precipitated the UN's financial emergency in the mid-1960s.

In July 1962, the International Court of Justice, at the request of the General Assembly, issued an advisory opinion in which it declared that the expenses of the first UN Emergency Force in the Middle East and the UN Force in the Congo constituted expenses of the organization within the meaning of Article 17, paragraph 2, of the Charter and should thus be borne by member states as apportioned by the General Assembly. The Assembly accepted the court's opinion in December 1962, but debate over peacekeeping operations and the financial difficulties continued. A number of other factors, moreover, contributed to the precariousness of the financial position of the organization, notably the lateness of many member states in paying their assessed contributions, the currency fluctuations of the 1970s (marked by two devaluations of the US dollar, on which the UN budget is based), and inflation.

A Group of High-Level Intergovernmental Experts to Review the Efficiency of the Administrative and Financial Functioning of the UN, appointed by the General Assembly in 1985, submitted to the General Assembly in the following year its recommendations for enhancing the efficiency and reducing the expenditures of the organization. Implementation of the group's recommendations was the condition which a number of states, including the United States, placed on further payment of their assessments.

Among the solutions proposed in 1985 were an increase in the Working Capital Fund to us$ 200 million, the issue of certificates of indebtedness in the amount of the arrearsin effect, borrowing from member statesand borrowing on the open market.

In 1992, Secretary-General Boutros Boutros-Ghali requested that the Ford Foundation assemble an independent advisory group to recommend ways to create a secure, long-term financial base for the organization. The group, co-chaired by Shijuro Ogata, former Deputy Governor of the Japan Development Bank, and Paul Volcker, former Board of Governors' Chairman of the United States Federal Reserve Bank, issued its report in February 1993. Entitled "Financing an Effective United Nations," it suggested the following measures:

" Also in 1993, the Joint Inspection Unit (JIU) of the Secretariat issued a report declaring: "The old financial malaise is emerging with renewed evidence. What was a chronic illness is becoming a critical one." Among JIU proposals:

  • Governments should adjust their national legislations to avoid obstacles to paying their UN contributions in full and on time.
  • Replenishment of the proposed UN Peace Endowment Fund could take advantage of initiatives, such as the issuance of special stamps by member states, with revenues turned over to the organization.
  • Countries could turn over to peacekeeping operations funds earmarked for aid to developing countries in which the existing critical situation is an impediment to using those funds.
  • In parallel with financing, cost saving is indispensable to solving the financial crisis. Fighting waste and reducing expenses must take place in all areas of the organization.

The fundamental requirement for the essential financial stability of the UN, however, remained the full and timely payment by all member states of their assessments, in accordance with Article 17, paragraph 2, of the Charter, which states that: "The expenses of the Organization shall be borne by the Members as apportioned by the General Assembly."

In 1994, the UN General Assembly created the Office of Internal Oversight Service (OIOS) as a department within the Secretariat to independently monitor reports of waste, fraud, and mismanagement within the UN. OIOS focuses on high-risk activities, such as peace-keeping operations, humanitarian activities, and procurement while simultaneously providing oversight to all activities of the UN. OIOS provides oversight through internal auditing, management consulting, investigations, monitoring, inspection, and evaluation.

In 1996, efforts at managerial reform targeted five areas of management: cost structure, human resources, information, technology, and work programs. This approach has required reductions and redeployment of staff. Between 198495 and 199697, the UN eliminated 2,046 positions, and about 1,000 of the budgeted posts that exist now are kept vacant. Travel was reduced by 26% in 1996, and printing costs were reduced by 27% in early 1996, as more than 270,000 UN documents have become available electronically.

On 23 March 2000, Under-Secretary-General for Management Joseph E. Connor told the General Assembly's Fifth Committee (Administrative and Budgetary) that in 1999 the United Nations "took a step back from the financial brink." While regular budget and tribunals assessments were as expected, there was an increase in peacekeeping assessments in 1999, he added. Even with that increase, the obligatory cost to member states for all UN activities in 1999 was the lowest in six years: the actual assessment for 1999 came to just over us$ 2 billion. The UN had more cash than the previous year largely because of payments made by the United States to avoid losing its vote in the General Assembly. Total available cash at the end of 1999 jumped to some us$ 1.093 billion, from us$ 736 million in 1998. Amounts owed to the United Nations were also lower, at us$ 1.758 billion, down from us$ 2.031 billion a year earlier. And the level of the United Nations debt to its member statessome us$ 800 millionwas also significantly lower than the previous three years.

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