The United Nations Budget
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 1992–93, 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
|AREA OF EXPENDITURE PURPOSE OF EXPENDITURE||AMOUNT(US$)|
|OVERALL POLICY-MAKING, DIRECTION, AND COORDINATION|
|Overall policy-making, direction, and coordination||61,543,200|
|General Assembly affairs and conference services||560,256,500|
|Peaceful uses of outer space||5,903,900|
|INTERNATIONAL JUSTICE AND LAW|
|International Court of Justice||34,936,000|
|INTERNATIONAL COOPERATION FOR DEVELOPMENT|
|Economic and social affairs||143,027,700|
|Office of the High Representative for the Least Developed Countries, Landlocked Developing Countries, and Small Island Developing States||4,358,60|
|Africa: New Agenda for Development||9,575,000|
|Trade and development||114,802,300|
|International Trade Centre UNCTAD/WTO||26,136,300|
|Crime prevention and criminal justice||10,040,200|
|International drug control||21,476,100|
|REGIONAL COOPERATION FOR DEVELOPMENT|
|Economic and social development in Africa||96,242,000|
|Economic and social development in Asia and the Pacific||65,067,100|
|Economic development in Europe||54,761,800|
|Economic and social development in Latin America and the Caribbean||85,371,400|
|Economic and social development in Western Asia||50,995,600|
|Regular programme of technical cooperation||42,871,500|
|HUMAN RIGHTS AND HUMANITARIAN AFFAIRS|
|Protection of and assistance to refugees 66,243,900|
|COMMON SUPPORT SERVICES|
|Management and central support services||477,145,800|
|JOINTLY FINANCED ACTIVITIES AND SPECIAL EXPENSES|
|Jointly financed administrative activities||10,445,200|
|Construction, alteration, improvement, and major maintenance||104,566,600|
|AREA OF EXPENDITURE PURPOSE OF EXPENDITURE||AMOUNT(US$)|
|SAFETY AND SECURITY|
|Safety and Security||140,105,400|
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.
It was estimated that expenditures for 2004–05 would be offset in the amount of us$ 443,851,900, to be derived as follows:
- income from staffassessment : us$ 415,613,700;
- general income : us$ 24,009,500
- 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 1971–73.
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):
PROPOSALS TO EASE THE UN'S
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 arrears—in effect, borrowing from member states—and 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:
- Dividing UN expenditures into three categories: a regular budget financed by assessed contributions; peacekeeping financed by a separate assessment; and humanitarian and development activities financed largely by voluntary contributions.
- Requiring UN member states to pay dues in four quarterly installments, instead of a single lump sum at the beginning of the year; and granting the organization authority to charge interest on late payments.
- Appropriation by some nations of their UN contribution earlier in the year.
- Acceptance by member states of significantly increased peace-keeping costs over the next few years, and financing future cost from national defense budgets.
- Creation by the UN of a $400 million revolving reserve fund for peacekeeping; and consideration of a unified peacekeeping budget, financed by a single annual assessment. The report
MEMBER STATE PERCENT MEMBER STAT PERCENT MEMBER STATE PERCENT MEMBER PERCENT Afghanistan 0.002 Djibout 0.001 Liechtenstein 0.005 São Tomé and Príncipe 0.001 Albania 0.005 Dominic 0.001 Lithuania 0.024 Saudi Arabia 0.713 Algeria 0.076 Dominican Republi 0.035 Luxembourg 0.077 Senegal 0.005 Andorra 0.005 Ecuado 0.019 Madagascar 0.003 Serbia and Montenegro 0.019 Angola 0.001 Egyp 0.12 Malawi 0.001 Seychelles 0.002 Antigua and Barbuda 0.003 El Salvado 0.022 Malaysia 0.203 Sierra Leone 0.001 Argentina 0.956 Equatorial Guine 0.002 Maldives 0.001 Singapore 0.388 Armenia 0.002 Eritre 0.001 Mali 0.002 Slovakia 0.051 Australia 1.592 Estonia 0.012 Malta 0.014 Slovenia 0.082 Austria 0.859 Ethiopia 0.004 Marshall Islands 0.001 Solomon Islands 0.001 Azerbaijan 0.005 Fij 0.004 Mauritania 0.001 Somalia 0.001 Bahamas 0.013 Finland 0.533 Mauritius 0.011 South Africa 0.292 Bahrain 0.03 Franc 6.03 Mexico 1.883 Spain 2.52 Bangladesh 0.010 Gabon 0.009 Micronesia 0.001 Sri Lanka 0.017 Barbados 0.010 Gambi 0.001 Monaco 0.003 Sudan 0.008 Belarus 0.018 Georgi 0.003 Mongolia 0.001 Suriname 0.001 Belgium 1.069 Germany 8.562 Morocco 0.047 Swaziland 0.002 Belize 0.001 Ghan 0.004 Mozambique 0.001 Sweden 0.998 Benin 0.002 Greec 0.530 Myanmar 0.010 Switzerland 1.197 Bhutan 0.001 Grenada 0.001 Namibia 0.006 Syrian Arab Republic 0.038 Bolivia 0.009 Guatemala 0.030 Nauru 0.001 Tajikistan 0.001 Bosnia and Herzegovina 0.003 Guinea 0.003 Nepal 0.004 Thailand 0.209 Botswana 0.012 Guinea-Bissau 0.001 Netherlands 1.690 The Former Yugoslav Brazil 1.523 Guyan 0.001 New Zealand 0.221 Republic of Macedonia 0.006 Brunei Darussalam 0.034 Haiti 0.003 Nicaragua 0.001 Timor-Leste 0.001 Bulgaria 0.017 Honduras 0.005 Niger 0.001 Togo 0.001 Burkina Faso 0.002 Hungar 0.126 Nigeria 0.042 Tonga 0.001 Burundi 0.001 Icelan 0.034 Norway 0.679 Trinidad and Tobago 0.022 Cambodia 0.002 Indi 0.421 Oman 0.070 Tunisia 0.032 Cameroon 0.008 Indonesi 0.142 Pakistan 0.055 Turkey 0.372 Canada 2.813 Iran (Islamic Republic of) 0.157 Palau 0.001 Turkmenistan 0.005 Cape Verde 0.001 Iraq 0.016 Panama 0.019 Tuvalu 0.001 Central African Republic 0.001 Ireland 0.350 Papua New Guinea 0.003 Uganda 0.006 Chad 0.001 Israe 0.467 Paraguay 0.012 Ukraine 0.039 Chile 0.223 Italy 4.885 Peru 0.092 United Arab Emirates 0.235 China 2.053 Jamaica 0.008 Philippines 0.095 United Kingdom of Great Britain Colombia 0.155 Japan 19.468 Poland 0.461 Comoros 0.001 Jordan 0.011 Portugal 0.470 and Northern Ireland 6.127 Congo 0.001 Kazakhstan 0.025 Qatar 0.064 United Rep. of Tanzania 0.006 Costa Rica 0.030 Keny 0.009 Republic of Korea 1.796 United States of America 22.000 Côte d'Ivoire 0.010 Kiribati 0.001 Republic of Moldova 0.001 Uruguay 0.048 Croatia 0.037 Kuwait 0.162 Romania 0.060 Uzbekistan 0.014 Cuba 0.043 Kyrgyzstan 0.001 Russian Federation 1.100 Vanuatu 0.001 Cyprus 0.039 Lao People's Rwanda 0.001 Venezuela 0.171 Czech Republic 0.183 Democratic Republic 0.001 Saint Kitts and Nevis 0.001 Vietnam 0.021 Democratic People's Latvia 0.015 Saint Lucia 0.002 Yemen 0.006 Republic of Korea 0.010 Lebanon 0.024 Saint Vincent and the Zambia 0.002 Democratic Republic Lesotho 0.001 Grenadines 0.001 Zimbabwe 0.007 of the Congo 0.003 Liberi 0.001 Samoa 0.001 Denmark 0.718 Libyan Arab Jamahiriya 0.132 San Marino 0.003 Total 100.00
" 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 1984–95 and 1996–97, 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 states—some us$ 800 million—was also significantly lower than the previous three years.