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The United Nations' Financial Crisis
The finances of the world organisation flow from
three sources:
 |
Compulsory subscriptions by member states to the
ordinary budget, |
|
Compulsory subscriptions to peace missions and the
two criminal tribunals (Yugoslavia, Rwanda), |
|
Voluntary contributory payments to special organs
and programmes. |
Financing
the Ordinary Budget
The UN Charter
dos not contain a key for distributing subscription
payments. Article 17 merely stipulates that, "The
United Nations expenses are carried by the members according to a
distribution key determined by the General
Assembly".
In practice "the Subscription Committee
determines the size of the subscription to the United Nations' regular
budget for each individual country for a period of three years
respectively.
The gross national product for the last six years
forms the main calculation basis. Countries with a below-average
per-capita income and those with a high debt service rate are granted
rebates on the payments. The United Nations' ordinary budget is covered by
the subscription rates calculated in this manner. However, this only makes
up around 40 percent of all expenses. The ordinary budget for 2000/01
equated to 2.535 billion US Dollars."
[taken from: Auswärtiges Amt, ABC der Vereinten Nationen, Berlin 2000, P. 33]
|
|
Contributions
to Ordinary UN Budget (in percent) |
|
|
1998 |
2000 |
|
USA |
25.00 |
25.00 |
|
Japan |
17.98 |
20.57 |
|
Germany |
9.63 |
9.86 |
France |
6.49 |
6.55 |
Italy |
5.39 |
5.44 |
Great
Britain |
5.08 |
5.09 |
Russia |
2.87 |
1.08 |
|
Canada |
2.83 |
2.73 |
Spain |
2.57 |
2.59 |
Netherlands |
1.62 |
1.63 |
Brazil |
1.51 |
1.47 |
Australia |
1.47 |
1.48 |
|
Sweden |
1.10 |
1.08 |
Belgium |
1.10 |
1.10 |
Other
nations |
15.36 |
14.33 |
|
In essential terms, the ordinary budget comprises
the costs for the infrastructure of the United Nations and its personnel costs.
Operating expenses such as those for activities in development cooperation or
humanitarian aid are financed by voluntary contributions by the member states (see
below).
Financing
the Peace Operation and the International Courts of Justice
"Peace-keeping operations by the United Nations are
financed by a special cost allocation. Compulsory subscriptions by all the
United Nations' member states also form the basis of this, whereby the permanent
Security Council members are assigned surcharges due to their special
responsibility for peace and security (...).
The International Courts of Justice for Rwanda and
former Yugoslavia maintain their own respective budgets and are financed via a
special subscription key. This is oriented towards 50 percent of the regular
budget and 50 percent of the budget for peace-keeping operations. The total
budget for international tribunals ... equated to nearly 176 million US Dollars
in 2000."
[taken from: Auswärtiges Amt, ABC der Vereinten Nationen, Berlin 2000, P. 34]
Financing
Operational Tasks
Subscriptions to the special organs, programmes and
funds of the United Nations, which are considerably higher than the ordinary
budget, and voluntary and made at the discretion of the member states.
Overview of the United Nations Systems' Costs (in
millions of US Dollars)
|
Year |
UN
Budget |
Peace-keeping |
Special
Organs |
Specialist
Institutions |
Voluntary
Contributions |
Total
Spending |
|
1986 |
725 |
242 |
1,142 |
3,075 |
951 |
6,135 |
|
1987 |
725 |
240 |
1,178 |
3,266 |
931 |
6,340 |
|
1988 |
752 |
266 |
1,349 |
3,868 |
1,129 |
7,364 |
|
1989 |
765 |
635 |
1,359 |
4,078 |
1,182 |
8,019 |
|
1990 |
838 |
379 |
1,495 |
4,436 |
1,346 |
8,494 |
|
1991 |
999 |
449 |
1,509 |
5,401 |
1,360 |
9,718 |
|
1992 |
1,008 |
1,697 |
1,731 |
5,888 |
1,271 |
11,595 |
|
1993 |
1,031 |
3,005 |
1,713 |
6,091 |
1,216 |
13,056 |
|
1994 |
1,087 |
3,357 |
1,826 |
5,967 |
1,126 |
13,363 |
|
1995 |
1,181 |
3,281 |
1,847 |
5,778 |
1,159 |
13,246 |
|
1996 |
1,112 |
1,522 |
2,057 |
5,009 |
1,045 |
10,745 |
|
1997 |
1,112 |
1,226 |
2,033 |
4,936 |
1,057 |
10,364 |
|
1998 |
1,265 |
907 |
1,866 |
-- |
-- |
-- |
|
1999 |
1,265 |
1,110 |
1,792 |
-- |
-- |
-- |
|
2000 |
1,267 |
1,800 |
1,766 |
-- |
-- |
-- |
[taken from: Sven
Gareis/Johannes Varwick, Die Vereinten Nationen. Aufgaben, Instrumente und Reformen;
Bundeszentrale für politische Bildung Schriftenreihe Band 403, Bonn 2003, P.
66]
The Causes of the Financial Crisis
Considering the existence of voluntary contributions
and compulsory subscriptions, one could assume that the causes of the United
Nations' financial problems are to be found in the member states failing to pay
enough voluntary contributions. However, this is not the case. The problems
occur with regard to the compulsory subscriptions, both in respect to
subscriptions to the ordinary budget and the peace missions. The interplay
between several factors gave rise to the world organisation's financial crisis.
| "The poor payment records of several United
Nations’ member states including very important debtors such as the USA, |
| the inability to pay of states inappropriately
burdened by the system of subscriptions which has befallen them, in
particular the states of the former Soviet Union, |
|
the unwarranted favouring of states not held to
account in a manner appropriate to their economic efficiency by the system
of subscriptions to-date, |
|
non-satisfactory resource management in the United
Nations Secretariat, |
|
cumbersome administrative processes."
[taken from: Auswärtiges Amt, ABC der Vereinten Nationen, Berlin 2000, P. 34] |
The close relationship between the various problems
of the United Nations, discussed within the framework of this Basic Course,
prove very conspicuous here: the poor efficiency of the work doubles the
intensity of the financial crisis - primarily as a direct result of additional
costs, and secondly, due indirectly to the fact that a cause can be seen in this
for the USA, for instance, not being to prepared to pay its contribution
obligations in full.
"For a practicable and lasting solution to this
crisis, it is necessary to reduce the mountain of debts which has risen to
around 2.6 billion US Dollars in recent times, and model the scale of
contributions against which the United States is assessed for making its
compulsory payments to the United Nations in a more logical and just
manner (...).
However, a long term solution fails due to the
stance of the United States, the largest debtor to the United Nations. The
USA makes settling its bills dependent on its subscription rate being
reduced, which would go against the principle of ... capacity (...).
In contrast to this, most developing countries are
of the opinion that a change in the scale of contributions as a central
element of a fundamental financial reform is not required, since the
reason for the United Nations' financial crisis is due to the poor payment
record of the large subscription payers alone."
[taken from: Auswärtiges Amt, ABC der Vereinten Nationen, Berlin 2000, P. 34-35]
What remains to be stated is that as a permanent
symptom, the financial crisis has hindered the work of the United Nations
since the 1960s. "A fundamental financial reform of the United
Nations is pending. Suggestions made by the Secretary-General within the
framework of his reform programme of 1997 have not been implemented as
yet. With the readjustment of the scale of subscriptions in December 2000
... the year-long dispute with the USA could be pushed to one side,
however this failed to solve the basic problem of the dependency of the
organisation on its powerful subscription payers and their readiness to
pay."
[taken from: Sven
Gareis/Johannes Varwick, Die Vereinten Nationen. Aufgaben, Instrumente und Reformen;
Bundeszentrale für politische Bildung Schriftenreihe Band 403, Bonn 2003, P.
65-66] |
|
Rate
of contribution to the ordinary UN budget since 2002 (in percent) |
|
USA |
22.00 |
|
Japan |
19.67 |
|
Germany |
9.85 |
|
France |
6.52 |
Great
Britain |
5.58 |
Italy |
5.10 |
|
Canada |
2.58 |
Spain |
2.54 |
Brazil |
2.09 |
|
Republic of Korea |
1.87 |
Netherlands |
1.75 |
Australia |
1.64 |
|
China |
1.55 |
Russia |
1.20 |
Argentina |
1.16 |
Belgium |
1.14 |
|
Mexico |
1.10 |
|
Sweden |
1.04 |
Other
nations |
12.66 |
|
More pages on problems facing the
United Nations
| FINANCES:
The United Nations' Financial Crisis
|
| PEACE: The
Crisis of Securing Peace through the United Nations |
|
| EFFICIENCY:
The
Problems with Coordination and Work Efficiency
|
|
REFORMS: Fundamental Reform Plans and the
Difficulties Associated with their Implementation |
|
[Author: Ragnar Müller]
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