Todd Bishop
As the world’s largest international organization, the United Nations has faced the problem of lack of money since its establishment in 1945. Even if the economic and financial improvements of some Member States have improved significantly, the financial problems of the United Nations have not been resolved, because they have been mixed with political and diplomatic factors of individual countries and strategic games with other countries.
Due to the rigidity of the budget mechanism, Member States have been in arrears of contributions every year, and the pace of reform has been difficult to follow up. As a result, the financial situation of the United Nations has almost fallen into a “desperate situation”, which seriously threatens the reputation and execution of the United Nations.
2019 is the worst year for the United Nations financial situation. Even the Secretary-General of the United Nations, Antonio Guterres, wanted to sell the Secretary-General’s residence in the Manhattan district of New York City to help the United Nations survive the crisis. This authority had to give up.
At a meeting of the Fifth Committee of the UN General Assembly on June 4, Guterres pointed out that in May 2018, the United Nations had run out of cash and turned to the Working Capital Fund. In May 2019, in order to control and save costs, various United Nations departments also had to suspend recruitment and non-post recruitment. But even so, the United Nations is likely to run out of cash and borrow from the Working Capital Fund in August 2019. At that time, he said that this time the United Nations Secretariat was unable to continue to deal with the crisis, and even if all Member States paid their contributions in full and on time, the United Nations still faced cash problems at the end of 2019. This is a ridiculous situation he has never seen in any organization.
However, after the international community and the United Nations have repeatedly put pressure on the arrears countries such as the United States, countries have gradually paid some funds to barely maintain the operation of the United Nations in the last two months of 2019. Since then, the United Nations has begun action against arrears.
On December 27, the UN General Assembly approved the 2020 budget of the United Nations, with a budget of US $ 3.007383 billion, an increase of approximately US $ 8 million over Guttres’ original request. On January 14, the Group of 77, which includes dozens of developing countries in Asia, Africa, and Latin America, and China submitted a resolution to expand the size of the Fifth Committee’s Advisory Committee on Administrative and Budgetary Questions, and voted 120 votes in favor and 48 votes. The opposition, with 4 abstentions, passed, meaning that the new ACAB membership election method will be implemented on January 1, 2021, with 5 members each in Africa and Asia-Pacific, Latin America and the Caribbean, Western Europe, and Four in the Middle East and three in Eastern Europe. This will weaken Western countries’ control of the UN budget committee and will also play a role in combating countries that have long arrears of UN contributions.
Source and use of funds
According to Article 17 of the UN Charter, all UN funds are shared by 193 Member States, and in principle, they have no right to borrow from commercial institutions (sometimes they buy bonds to get through). Therefore, the United Nations can only rely on countries to fulfill their contracts and pay their fees in full and on time, otherwise they are in financial distress.
Funding sources and consumption mainly consist of three parts. The first part is the assessed contributions of the member states, which constitute the regular budget of the United Nations. The 193 member states are prorated each year and are mainly used for administrative expenses and activities of the United Nations agencies, such as paying staff salaries, purchasing office supplies and maintenance, communications and conference services; the second part is the funding for peacekeeping operations, mainly by the Security Council Wuchang and other major economies; the third part is voluntary contributions. For example, the operations of specific projects such as UNICEF, UNDP, UNHCR, etc., mainly come from donations from governments, businesses and individuals. However, the World Health Organization, UNESCO and other autonomous organizations working with the United Nations, a small part of their funding comes from assessed contributions, and most of them come from voluntary contributions.
All three sources of funding can be used for UN humanitarian and development assistance, supporting the three pillars of the UN system: human rights, development, peace and security.
With regard to human rights, the Office of the United Nations High Commissioner for Human Rights (OHCHR) is mainly responsible. The agency is a subsidiary of the United Nations. Its purpose and purpose is to protect and protect human rights in countries around the world. Its 40% of its funds come from the regular budget of the United Nations, and the remaining funds come from voluntary contributions.
The regular budget appropriation received by the Office from 2018 to 2019 is $ 200 million, which accounts for 3.7% of the total regular budget of the United Nations. Voluntary donations are mainly from the United States and European countries and some Asian countries. In 2017, 88% of national contributions received by the Office. The remaining 12% of voluntary contributions come mainly from the European Commission and United Nations partner agencies (see Figure 2). From 2013 to 2018, the office received voluntary contributions of $ 121 million, $ 124 million, $ 126 million, $ 126 million, $ 143 million and $ 187 million. As of July 1, 2019, the Office had received voluntary contributions of $ 98.1 million.
Economic strength determines assessed contributions
The proportion of the regular budget of the United Nations is approved every two years. The contribution of each country is calculated and distributed by the Committee on Contributions based on the gross domestic product (GDP) of each country, GDP per capita and actual capacity to pay. It is adjusted every three years and is finally reviewed and approved by the UN General Assembly. Countries with high foreign debts or countries with low per capita incomes can significantly reduce their share.
In December 2000, under the pressure of the United States, the General Assembly of the United Nations revised the proportion of the assessment ceiling. The proportion of United States contributions was reduced from 25% to 22%, and has remained so far. Since then, the highest proportion of Member States has been 22% and the lowest is 0.001%. Least developed country contributions do not exceed 0.01%.
From 2000 to 2002, China’s contribution to the United Nations ranked 13th among all Member States and rose to 9th (2.053%) in 2003. In 2012, the UN General Assembly passed a resolution to readjust the country’s assessment ratio for the years 2013 to 2015. China, Brazil, Russia and other countries with sustained economic growth have increased their proportion, while European countries have declined. The proportion of China’s assessed contributions has increased from 3.19% to 5.15%, which is about US $ 278 million, surpassing Italy and Canada as the sixth conference payment nation.
The United Nations General Assembly’s annual scale of assessments for the years 2019 to 2021, adopted at the General Assembly meeting held on December 22, 2018, shows that US contributions still bear 22% of the regular budget and 28.47% of the peacekeeping budget. Chinese contributions surpassed Japan for the first time and became the second contributor of second conference fees. The proportion of regular budget contributions rose from 7.92% to 12.05%, and the proportion of peacekeeping budget contributions rose from 10.24% to 15.22%.
Among the European countries, Germany has the highest proportion of UN contributions, 6.090%, followed by France and Italy, with a difference of 1.1 percentage points. In other words, the proportion of United Nations contributions due to Brexit has increased. In South America, Brazil, as the largest economy, has a per capita GDP of about 10,000 US dollars, and the proportion of UN contributions it bears is the highest in South America, reaching 2.948%. Russia’s contribution rate after Brazil is 2.405%, which exceeds that of South Korea, Australia and Turkey. As the world’s major economy, India, with a per capita GDP of only about $ 2,000, has a low UN contribution ratio of 0.834%, trailing Mexico.
U.S. defaults most
Even if the UN’s dues are formulated in accordance with the national conditions of each country, the situation of “arrears” still cannot be avoided. According to the official website of the United Nations, the total gross United Nations contribution for 2019 is approximately $ 3,065 million, and the net amount is approximately $ 2.849 billion. According to the United Nations News Network, due to the arrears of contributions from multiple Member States, the United Nations peacekeeping budget gap for 2019 is $ 1.5 billion, and the regular budget gap is $ 492 million, for a total of about $ 2 billion. Many Member States have not only paid their contributions in full, they have also cancelled their contributions to the United Nations.
The deadline for payment of contributions is January. According to the official website of the United Nations, as of December 31, 2019, of the 193 members of the United Nations, China, Russia, South Korea, Singapore, India, Canada, Australia, South Africa, France, Germany, Italy, Turkey, Montenegro, Thailand, Luxembourg, etc.106 All Member States paid their 2019 contributions (ie, regular budget assessments) in the first half of 2019. Among them, 34 Member States paid their fees on time, that is, they paid their 2019 contributions in full before January 31, 2019, which is the 30-day deadline. In the second half of 2019, another 40 countries, including Japan, Egypt, and Nepal, paid their dues.
China, as the contributor to the Second Congress, paid in full on May 3, 2019, 12.01% of the United Nations regular budget, which is US $ 334.7 million.
The different budget years of the UN member states are also a factor in the UN’s fiscal instability. For example, Japan, which currently ranks second in the amount of contributions, generally pays in July, while the United States, the largest contributor to more than 20% of the budget, usually pays contributions in October. However, the United States has not paid all its dues on time for many years.
As of December 31, 2019, all 146 Member States had paid their regular budget assessments for 2019. Of all the Member States, the United States has the most outstanding arrears, totaling US $ 1.055 billion, including US $ 674 million in arrears this year and US $ 381 million in arrears in previous years. However, the United States paid approximately $ 563 million at the end of 2019, but only half of its arrears.
On January 10, 2020, the United Nations announced that seven members of the United Nations had lost their right to vote at the United Nations General Assembly because they did not pay the United Nations budget. They are Lebanon, Yemen, Venezuela, the Central African Republic, Gambia, Lesotho and Tonga. Lebanon subsequently reimbursed its contributions and immediately resumed voting rights. In addition, India, Armenia, Portugal and Ukraine have fully paid their assessed contributions to the 2020 UN regular budget.
Political trust deficit
Even if the UN’s dues are formulated in accordance with the national conditions of each country, the situation of “arrears” still cannot be avoided.
According to the official website of the United Nations, the total gross United Nations contribution for 2019 is approximately $ 3,065 million, and the net amount is approximately $ 2.849 billion. According to the United Nations News Network, due to the arrears of contributions from multiple Member States, the United Nations peacekeeping budget gap for 2019 is $ 1.5 billion, and the regular budget gap is $ 492 million, for a total of about $ 2 billion. Many Member States have not only paid their contributions in full, they have also cancelled their contributions to the United Nations.
To alleviate or resolve this financial crisis, the most direct way is for Member States to pay their assessed contributions, peacekeeping and other assessments in a timely and full manner. The problem of protests and late payments has plagued the United Nations for decades and is unlikely to be resolved overnight. In addition, according to the Secretary-General of the United Nations, Antonio Guterres, structural weaknesses in budgeting, including exchange rates, inflation, wage cost standards, etc., are all influencing factors. That is to say, to carry out specific reforms in response to these factors.
For example, the budget rules of the General Assembly stipulate that if all expenditures in the budget are not spent, the unspent funds need to be returned to Member States, including those in arrears, but Guterres believes that no It was spent because there was no disposable cash on the books. Eventually, the delay in spending turned into a budget cut. In this case, the implementation of the budget is no longer driven by programme planning, but rather by the cash supply on hand, which runs counter to the principle of reducing investment and focusing on results.
Therefore, the United Nations can temporarily suspend the return of unencumbered balances to Member States until the cash position is normalized.
In fact, reforms have begun since the end of the last century. Kofi Annan served as Secretary-General of the United Nations. There has been a period of reforms and it is considered to be the most profound reform of the last century, including the establishment of internal supervision, audit and monitoring agencies; the establishment of senior cabinets to form a “cabinet” to speed up Decision-making process and strengthen coordination; start personnel reform, improve management, reduce operating costs, reduce high-level posts, and cancel thousands of positions. Reduce administrative expenses and use the saved funds for development activities.
As Secretary-General, Guterres and his predecessors have vigorously pursued reforms. But in practical terms, it can not avoid various politics. For example, in streamlining institutions and personnel, it will inevitably involve certain countries and certain blocked interests, which will inevitably lead to controversy. Moreover, in terms of increasing human and financial investment in certain United Nations agencies, it will also trigger dissatisfaction in some countries. U.S. Republicans have used Congressional control to refuse to provide funding for left-wing-related agencies in the United Nations.
In other words, resolving the financial problems of the United Nations is not easy. In addition to the rigid budget mechanism and technical factors accumulated year by year, the current international political environment must also be considered. The financial structure of the United Nations is as intricate as it is, but it is also the result of a game among nations.
Especially under the trend of anti-globalization and anti-internationalism, the United States took the lead in arrears in dues, and took the lead in playing politics at the United Nations and kidnapping its finances. In the United States Congress, most of the debate over grants to the United Nations has to do with US geostrategic interests. In addition, the United Nations has been unable to come up with a practical and effective solution, which has led some other member states to follow suit, which has led to the problem of arrears in contributions that has been difficult to completely resolve. Politicians in some countries believe that the United Nations cannot fulfill their required missions, or that the United Nations does not have an effective management and regulatory and planning system to make effective use of contributions.
Therefore, there are also political and trust deficits behind the United Nations fiscal deficit. Now that the Secretary-General has led the strong political will to carry out reforms in the areas under his jurisdiction, reforms in areas beyond his reach require Member States, especially China and the United States, to lead by example and work together to resolve them.
