United Nations- Fiscal Problems Essay, Research Paper
If the United Nations is to remain an effective force in the world?s political
spectrum it must reform, and make itself more financially sound and become
a more consolidated unit with each country being given equal representation
and opportunity to have their opinions voiced and respected. When the UN
was formed in the post war 40?s its goal was to keep another war from
occurring as well as make the world a better place to live. Problems and
controversies have recently plagued the UN and the veto power held by
certain countries are creating a situation where the smaller countries such as
Canada, have little if any chance to voice their opinions against powers such
as the USA and Russia. Only after all of the financial and representational
barriers are taken down will the UN once again be able to function and work
towards its goals.
The UN must also make the Americans, whom are its biggest
contributor, live up to it?s responsibilities. Only with the participation of the
Americans can the UN ever hope to survive through the next millenium.
The issues of Financial Reform within the UN, dealing with the
Americans, Peace-Keeping, and the Veto power are all inter-related. Veto
countries abuse the powers they are given by refusing to pay, or contributing
little to the UN and allowing the weaker countries to do the dirty work.
Peace Keeping is, perhaps, The most important of the UN?s duties.
But without the funds and equipment of the veto countries Peace Keeping
forces will become only a memory.
The main problem facing the UN, despite the issues with Veto powers,
Peace Keeping, and the Americans, is the organizations financial situation. It
has been forced to begin a lengthy restructuring to make it more cost effective
due to the lack of funds it is encountering.
I. Making The UN More Cost Effective
In a recent UN report entitled, ?Renewing the United Nations: A
Programme for Reform? the UN officials began to address this problem. The
report outlined the course which will be taken in order to balance the budget.
The current budget of the UN is 2.6 billion dollars.1 This total may
seem high, but it is very small when compared to the costs of other programs
instituted around the world. The UN?s budget is currently 1 billion dollars
less than the budget of the Tokyo Fire Department, and $3.7 billion less than
the cost of New York State?s University Program.2 When compared to these
you can really see just how little money the UN operates on. In fact the only
reason that the UN is in financial trouble at all, is because several member
states in the organization have not, as of yet, paid their compulsory dues.
These bills are left unpaid for different reasons, ranging from simple poverty,
as in the case of Somalia, or as a form of putting political pressure upon the
UN, as in the case of the United States.
Since the organization itself is completely reliant upon the money it
receives from it?s members it is almost helpless in its hopes to move forward.
The only way of punishing members who do not pay is to kick them out of
the organization and cut off the benefits they receive.
The current financial reform of the UN is very complex. It will
involve, for the most part, cuts in employee?s and an increased efficiency
from it?s four departments. These departments being Peace and Security;
Economic and Social Affairs; Development Co-operation; and Humanitarian
The 1998-1999 budget shows the introduction of many of the cuts and
changes that are going to be made. During this time 1000 positions are going
to be cut3 with most of these jobs coming out of the Secretariat department.4
The cuts in jobs have, in fact, been occurring since 1986 and have amounted
in a reduction of staff from 12,000 to 90005, which translates into a 20%
reduction in office and general staff, and 40% in upper management.6
In addition to the cutting of jobs many pre-existing departments are
also being consolidated to promote efficiency.
The 3 currently existing Departments in Economical and Social Affairs
are being integrated to form a new united Department.7 This will allow the
old departments to work more closely with each other and improve efficiency.
The programs currently in place that work towards fighting crime, drug
trafficking, money laundering, and terrorism will combine to form a new,
unified, department centered in Vienna, Austria, under the leadership of
Senator Arlacchi, of Italy.8
The Centre for Human Resources and the Office of the High
Commissioner for Human Rights are also being consolidated and are being
placed under the control of Mary Robinson who is currently the President of
As well as these consolidations, the Secretariat arm of the UN will go
from having twelve entities or sections to only having 5.10
When all of these different consolidations are completed significant
savings are expected, and the efficiency of the Organization is also expected
to rise, from the sharing of facilities and resources.
In combination with the previous changes, the UN is also changing its
personnel and administration rules to make the transitions as simple as
possible. The complex system of rules which had often times hindered the
UN Secretariat from completing its work are now being simplified so that the
reforms being instituted will not be stopped from doing their jobs. This
simplification of paperwork will also save the UN money in other ways.
Namely in the cost of paper itself. The amount of paper being used by the
UN will decrease by 30% in 1997/98 as compared to the amount used in
The leadership structure of the UN will also be overhauled as well, in
order to provide accountability and help with the reforms that are occurring.
It is hard to imagine that the leadership of the UN, as is, would have had the
power to carry on with the necessary changes that they are undergoing. The
Secretary-General simply does not have the power to institute them as it is
right now. With the change in structure the Secretary-General will be given
the necessary amount of power within the organization to continue on.
A Deputy Secretary-General is being created whom will assist the
Secretary-General. The Deputy will fill in for the Secretary-General in his
absence, share his representational duties, and help him enforce changes that
cut across administrative and sectoral boundaries. This will allow the
Secretary-General to handle emergency situations with ease.12
A Senior Management Group is being formed in order to promote
greater co-operation between the various departments of the UN while these
reforms are taking place13. Executive committees of the sectoral groups,
which were formed in January of 1997 will be strengthened to help. They
will also include all the departments, programmes, and funds of the United
Other, less drastic reforms are also being instituted to increase
productivity and reduce costs inside the UN.
Currently, the UN has 400 efficiency projects in place which are
expected to be completed as of December 31, 1997.15 Many of these are not
major ones, but this does show that the UN is serious about cutting costs.
In order to assure that the necessary funds are available to run the
programs many people rely on for simple survival, a revolving Credit Fund,
which could reach up to $1 billion U.S., is being created consisting, solely of
donations made to it by member states.16 This will allow funds to be
available whenever an emergency arises.
The staff currently employed by the UN will undergo extensive
retraining to increase their own personal productivity and efficiency, and
prepare them for the changes which will occur in their jobs once the reforms
take place. A new Code of Conduct has been added to the Staff rules and
regulations which are currently in place.17
In addition to this, a review of the International Civil Service
Commission is being taken in order to allow this organization to function
more independently. The International Civil Service Commission is made up
of a group of experts on salaries, allowances, compensation, and conditions
of service, representing all the regions inside the UN.18
As well as decreasing costs and increasing efficiency the cuts and
consolidations will also allow the Secretariat to react to international
emergencies quicker due mainly to the removal of the red tape which
previously hindered reaction time.
Repositioning food stocks, creating stand bye service packages, and
creating a Global Supply Chain will also allow the UN to speed up its
response time to emergency situations allowing for greater efficiency in the
With all of the above changes, the United Nations has shown that it is
serious about financial reform within the programs that it runs and, in the
process, has given itself a new lease on life. But while these changes were
necessary, other key changes will have to be made to areas such as peace
keeping in order to remain financially stable. Peace keeping itself is currently
feeling the proverbial ?pinch? as it tries to carry out it?s daunting mandates
with little, if any, financial help from the UN itself.
II. Effects of Financial Problems on Peace Keeping
The most noted function of the United Nations is, without a doubt, the
peace keeping missions that help to promote, and create, world peace in
countries that are currently at war. United Nations peacekeepers have seen
extensive action in places such as Korea, Bosnia-Herzegovina, and Somalia.
Despite the proud history of this renowned institution, it is currently suffering
because of the lack of finances, not due to overspending or high costs but,
like its counterparts in the Secretariat, because of the shortfall of funds
created when member states fail to pay their UN dues.
When you look at the statistics the Peace keeping is actually very
cheap. The $1.4 billion in costs last year20, may seem relatively high, but
once you consider that this total would have amounted to only 1% of the
American military budget and .2% of world military spending21 you can really
see just how efficient these forces are.
The United Nations itself does not have an actual army. It relies solely
on troop and equipment contributions from member countries to make peace
keeping a reality. In return for the donations the UN makes a promise to the
donating country, to fully reimburse them, in fiscal figures. This is where the
peace keeping debt exists.
The total amount currently owed is $1.6 billion, which is indebted to
78 different countries.22 To make the problem worse, most of the countries
that are still owed money are developing ones, who could use the money to
help out their current financial problems.
As of July 31 there were 23,861 UN troops in deployment23 in areas
such as Bosnia and Iraq. In total there are 16 missions underway, with the
costs for these being only $1.3 billion.24
I have included a map of all UN operations, both completed and
uncompleted, so that you can see just exactly where the peace keepers are, or
have been, deployed.
Once again, the amount spent on world peace keeping is not a large
amount. The cost for the average American to finance these missions, after
you take into account the USA?s 31% or $400 million assessed share in peace
keeping, amounts to only the cost of six cans of soda.25 World Military
spending adds up to $778 billion or $134 for every human being on earth.26
When you consider the amounts of money put into war and destruction, how
much money is really too much in stopping all of the destruction from
To make matters worse for the peace keepers, due to the impoverished
fiscal situation of the UN, money has been taken out of the peace keeping
budget just to cover the UN?s regular expenses.27 This further hinders the
UN?s ability to pay back the countries who have donated men and equipment
to this noble cause. Without the funds that are required this important
program will remain in jeopardy.
III. Veto Powers
To truly understand the UN?s financial crisis, you have to understand
the way in which money is collected for the organization. Member states are
accessed a share of the budget based on their national incomes, and their
overall ability to pay this bill. Pay rates for UN members range from the
minimum of a .01% or $106, 508 donation, which is currently being
contributed by 98 countries, to a 25% donation.28
For this reason, most of the money comes out of industrialized
countries such as the United States, Germany, and Japan. If you look at per
capita donations you would see that the 4 Scandinavian countries as well as
many developing countries rank near the top. The average American paid
just $1.11 for the UN, while the average San Marinian paid over $4 for the
In the graph on page 13 you will notice that 7 countries alone handle
much of the UN?s budget. The fact of the matter is that these 7 countries,
who contribute 71% of the UN?s working budget29, are not truly contributing
?too much? to the organization since they also receive the most financial
benefits of the UN itself. The UN invests 64% of its money into these
countries and their businesses, adding $2.4 billion to their economies.30
The financial state of the UN has a great deal to do with another issue
plaguing the organization. This is the issue of veto powers. Currently 5
countries have veto powers; The United States, Great Britain, France, China,
and Russia.31 The veto power gives these countries the right to over rule any
decision made by the other members of the general assembly, after a
democratic vote. One has to wonder how and organization can ever succeed
which allows 5 of its 185 members to have supreme power over the others,
and ever expect to accomplish anything.
The veto countries do provide much of the funding available to the UN,
but in some cases, they don?t even pay this. Countries such as the US refuse
to pay their UN debts causing financial short comings like the one the UN is
The veto countries do not contribute all that many troops to the UN
peace keeping missions either. In the graph which I have included on page
15, you will see just how small a proportion of the UN peace keeping force is
from the veto countries.
In fact, of the 5 veto countries, only Russia ranked in the top ten in
troop contributions. China ranked only 47th on the chart with a total troop
contribution of only 43 men.32
The veto countries can also derail decisions that have been made by the
general council. At the last election for Secretary-General, then
Secretary-General, Boutros Boutros-Ghali was victorious over Kafi Annan,
but could not remain on as Secretary-General because of the fact that the
Americans had been the lone country to vote against him, and being that they
had the veto power, Boutros-Ghali was gone.
This, I believe goes against everything that the UN stands for. The UN
is supposed to be a forum by which every country is allowed to voice their
opinions about world matters. By allowing for veto powers they are giving
the balance of power to 5 countries. This is not what the organization meant
During the cold war there was a need for the veto. At that time it
allowed Russia the United States and their key allies to have equal say in the
running of the UN. If one side of the conflict were allowed more power it
may have led to a conflict between the two. Now that the cold war is over,
the veto is being used as only as a mean by which to force the veto countries
political views upon the smaller countries in the alliance, such as Canada.
There is also a financial need to get rid of the veto powers. The United
States, as stands, has no practical reason to pay its debt. They cannot be
kicked out of the UN since, if there was a motion to do this, they could just
veto it anyway. With no reason to pay, the US has shown little interest in
As long as there are veto powers in the UN, it will never be able to
serve the purpose it was created for. Small countries will continue to be lost
in the political shuffle as they are now.
IV. American Objections
The United States is currently the country which owes the most money
to the United Nations. It is also the one which receives the most benefits.
Currently the United States owes $1.4 billion dollars, which translates
into over half of the UN?s $2.3 billion debt.33
The total Contribution per year that the American government is asked
to pay is $312,000,000 or about 25% of the UN?s total budget.34 This is a
relatively small investment for the Americans once you take into account all
of the benefits the Americans receive from the organization.
Of the $426 million in investments and spending the United Nations
done last year, American companies received 49% or 229 million of it.35 If
you take that figure off of their total payment you will see that the Americans
only paid $83 million in which they weren?t given back in direct business.
The UN creates roughly 30, 607 jobs in the New York area alone as
well as yielding an estimated $1.2 billion in earnings and generating $3.2
billion in spending for the region.36 This is a very significant total. When
you see it from that angle it becomes apparent that the Americans receive
much more from the UN than they put into it.
While they refuse to pay their fair share of the costs of the UN the
Americans still make sure that they hold a strong presence. The American
diplomats actually lobbied for the cutting of 3000 jobs in order to save
costs,37 which wouldn?t even of been a problem had their country lived up to
As is, the Americans are receiving most of the fiscal benefits of the UN
without putting anything into it.
The American government refuses to pay their debt for other varying
reasons. Bob Dole, who recently ran for President of the United States, said
that he would never allow American troops to come under UN control again
and he blamed then Secretary-General, Boutros Boutros-Ghali, for almost
every problem that has ever occurred in the history of the UN.38
Unfortunately he is not the only member of the US government who
shares this view.
American fears towards the UN are based mainly on myths and lies.
Many Americans hold the UN responsible for the killing of 18 American
soldiers in Somalia in 1994.39 The interesting thing about that statement is
that the soldiers themselves were under the leadership of American officials
based in Florida at the time. If those men had of been under UN control they
would never of been sent out on that particular mission.40
There is also a controversy on whether American troops should be
allowed to be sent into action under the UN at all. Michael New, an army
specialist, is in the center of this controversy. He underwent a court martial
because of his refusal to wear the UN logo on his uniform.41 Under
international law he is required to do so.
The biggest opponents in the US to the United Nations however are the
members of the many vigilante militias. Many of these groups are convinced
that the United Nations is out to take over the United States, or make the US
a communist country. They do not understand the workings of the UN and
thus fear it. As a result they often print propaganda such as the article which
I have included along with this project, which is an exert entitled ?The New
The United States plays an integral role in the workings of the United
Nations. Admittedly, they provide the back bone for the entire organization.
Because of the importance of the role it plays in world politics, the US
has to take responsibility, and pay its debts. The UN cannot function without
the Americans, which, in a manner of speaking, they are now. The lack of
American funds has created a desperate state for an organization, which in the
past, has bent over backwards to keep them happy. It is time for the
Americans to step up and except their responsibilities as world leaders, and
show the maturity that must come with responsibility.
V. In Conclusion…
The United Nations is making great strides towards making itself
stronger and more unified as it prepare to enter the next millenium. The UN?s
future is not completely certain though, as one cannot predict what will occur
over the next few years in lieu of the reforms being made and the ever
changing face of the world?s politics.
By creating a new and more efficient structure from which to work, the
United Nations has proven that it is serious about fixing its current fiscal
dilemma. Measures are being taken to make sure that the transitions are
smooth, both in the present, as well as in the future. The UN needs to make
its transition to the leaner organization it hopes to be in the upcoming years as
painless as possible in order to avoid a state of chaos which could potentially
bring the organization to its knees.
Only by becoming more fiscally sound can the United Nations ever
hope to continue on into the next millenium as a strong, united group. The
planned consolidations will make the United Nations much more efficient and
save costs, and the new leadership structure will allow for a more diverse
opinion to be heard and more concise and effective decisions to be made.
Veto powers must be eliminated, however, because they are outdated
and have no place in our post cold war society. Equal representation of all
countries, big or small, must become a priority of the Leaders of the United
Nations. Only after everyone has the right to have their own unique views on
the issues effecting our world today heard and respected will the harmony
necessary to keep the United Nations alive exist. The removal of veto
powers would also force the countries who are abusing their power, such as
the United States, to pay the overwhelming amounts of money they owe the
The United Nations does a lot of good for the world. The peace
keepers have helped many countries end the armed conflicts which once
threatened their very existence, and UN organizations such as UNICEF have
done wonders in helping to feed and medicate the people in Third World
I believe strongly that the United Nations will play an important role in
the world as we head into the next millenium. By undergoing these painful,
yet necessary consolidations and reforms, they have allowed the organization
to strengthen itself.
All of the worlds countries, including the ones currently with veto
powers must work together to make sure that we do not lose this important
commodity, for if we do, we will surely suffer the consequences down the
www.un.org; ?Secretary-General Outlines Extensive,
Far-Reaching United Nations Reform?; July 16, 1997
www.un.org; ?Prepared For A Changing World?
www.un.org; ?Facts About Peace-Keeping?; July 31, 1997
www.un.org; ?The UN Financial Crisis?
www.un.org; ?Setting The Record Straight: Some Facts
About the UN?; July, 1997
www.washingtonu.edu; ?UN Bashers Spreading Lies and
Myths?; Victor T. Le Vine; October, 1996
www.jbs.org/voll26.htm; ?UN Pawns?; ?The New
American?; Volume 11; Number 26; December 15, 1995
United Nations; Microsoft Encarta 97; CD edition; Microsoft
United Nations; Microsoft Bookshelf 1996-97 Edition;
Microsoft Corporation 1996