COVID-19: UNs $5.1 Billion Shortfall Threatens Operations Worldwide
November 9, 2020
Thalif Deen reports on a major cash crunch caused by late or non-payments
amid the Covid-19 pandemic.
UN headquarters. (Flickr/Julien Chatelain)
By Thalif Deen
at UN Headquarters
Inter Press Service
When the United Nations was struggling to cope with a cash crisis back in
April 1996, one of the many drastic measures it undertook was to cut down on
its staff.
So, it took the path of corporate America, and ironically, for a
cash-strapped institution, it offered a golden handshake a severance pay
of about $80,000 each to those who would voluntarily leave the
near-bankrupt organization.
And as immortalized in the title of Woody Allens 1969 Hollywood comedy hit:
about 400 staffers decided to take the money and run.
Fast forward to October 2020.
In todays context, says one Asian diplomat, the UN is not in a position to
offer such hefty golden handshakes even to some of the highest-ranking
officials if they do volunteer to quit.
A liquidity crisis triggered by late or non-payment of assessed
contributions by 61 member states amounting to a staggering $5.1 billion
shortfall is now threatening to undermine both the mandate and world-wide
operations.
As of Nov. 2, only 132 Member States (out of 193), have paid their regular
budget assessments in full, according to the latest UN figures.
The warnings about the current cash crisis have come from three directions:
Secretary-General Antonio Guterres; President of the General Assembly Volkan
Bozkir; and the 134-member Group of 77, the largest single coalition of
developing countries in the world body.
Volkan Bozkir (left), president of 75th UN General Assembly, with
Secretary-General António Guterres, Oct. 26, 2020. (UN Photo, Eskinder
Debebe)
When he introduced a proposed program budget for 2021 in mid-October,
Guterres warned that the liquidity crisis has not abated and severely
hampers the organizations ability to fulfil its obligations to the people
we serve.
At this crucial time for our work, it bears repeating that the organization
can only deliver on its mandates if member states meet their financial
obligations in full and on time, he declared.
The responsibility for day-to-day operations, currently under threat, falls
squarely on the shoulders of an estimated global staff of about 32,417,
according to the latest figures from the Chief Executives Board for
Coordination, while the Secretariat staff in New York is estimated at over
3,000.
Prisca Chaoui, executive secretary of the 3,500-strong Staff Coordinating
Council at the UN Office at Geneva (UNOG), told IPS: Indeed management
informed us they wont allow extensions of contracts for more than two
years, whereas the current rules allow for an extension up to five years.
They have clearly indicated they wanted to reduce the liability of the
organization, she said, pointing out there is a current recruitment freeze
which means nobody can be recruited and nobody can be promoted because of
the liquidity crisis.
What we know is that there is an acute liquidity crisis but nobody has
spoken yet about a financial crisis but we feel it is coming, she added.
Economic Turmoil
All this is due to the fact that member states are facing economic turmoil,
and it goes without saying that paying the UN wont be their priority, she
argued.
She also complained: We regret that the budget cycle has moved from two
years to one year making the organization negotiate the budget on a yearly
basis. Before, we had two-year budget cycles, and this was more secure than
the current situation, whereby the budget has to be negotiated every year.
While we understand the difficulties the organization is facing, we dont
agree on the attempts to make UN staff become like corporate employees. This
goes against the principles of how independent civil servants function,
Chaoui said.
Secretary-General António Guterres holds a virtual press conference to
promote a report on his call for a global cease-fire during the Covid-19
outbreak, April 3, 2020. (Loey Felipe, UN photo)
Guy Candusso, a former first vice-president of the New York UN Staff Union,
told IPS with all the uncertainty in the world now, I am not optimistic in
the near term.
In the long term, he said, the financial crisis will most likely work itself
out. In the meantime, I believe all staff will suffer and bear the burden
of the cuts when the money runs out.
When he introduced the buy-out early retirement program back in 1996,
Joseph Connor, under-secretary-general for administration and management,
said there are too many people in this organization doing the same job for
20 years.
Connors told reporters the United Nations had set aside about $15 million
for the buyout program, under which the Secretariat had said goodbye to 400
employees. With more staffers expected to leave, he said, another $15
million would be sought through savings in the budget to allow for early
separation.
The severance pay, averaging about $80,000 each, was based mostly on the
number of years put in by staffers.
Asked whether he was concerned that some of the best staffers might be the
ones accepting voluntary severance, Connor said that in such cases, then
Secretary-General Boutros Boutros-Ghali would use his discretion and reject
requests, as he has done in the past.
Group of 77
Speaking on behalf of the Group of 77 and China, Megayla Austin of Guyana
told the UNs Administrative and Budgetary Committee (also known as the
Fifth Committee) last month, the G-77 notes the efforts of member states in
fulfilling their financial obligations while overcoming the economic and
financial difficulties during the Covid-19 pandemic.
However, the Group also notes that the total amount of outstanding
contributions and peacekeeping assessments exceeds $5.1 billion, as of Sept.
0, with the majority from one single member state.
That single member state has been identified as the United States, the
biggest single contributor to the UN budget.
Volkan Bozkir, president of the 75th Session of the General Assembly said
Oct 28: I could not address you today without touching on the important
issue of the UNs financial situation.
The secretary-general has, on several occasions, expressed to me concern
about the financial situation of the UN and its ability to meet its ongoing
financial obligations. I share these concerns and urge all member states to
pay their dues in full and on time.
During the high-level fortnight, he pointed out, the message from world
leaders was clear: International cooperation and effective multilateral
action is essential to confront the pandemic. So, the United Nations needs a
predictable financial basis to do that.
Besides day-to-day operations, the UN may also lack funds for the
implementation of its mandates.
When Guterres presented the proposed 2021 budget, he said: to fully
implement the mandates entrusted to us, the UN will require a total of $2.99
billion, which represents a net reduction of 2.8 per cent compared to last
year, despite additional initiatives and mandated activities. This includes
a net decrease of 25 posts.
Richard Ponzio, senior fellow and director of the Stimson Centers Just
Security 2020 Program, told IPS that member states have a legal
responsibility to pay their mutually agreed, assessed dues on time and in
full each year.
The world bodys severe financial crisis of recent years hampers its
urgent, life-saving work, which has only intensified with the onset of the
coronavirus pandemic.
The United States and other countries that fail in their international
treaty responsibilities are also failing to demonstrate leadership beyond
their borders at a time of acute international need, he added.
Barbara Adams, chair of the board of Global Policy Forum, told IPS: As you
know this is not the first time the UN has been held hostage to
over-dependence on one contributor.
She said sustainable funding is essential if the other propositions and
system-wide reform proposals are to have any success. However, the current
patterns of funding are insufficient both in quantity and in quality.
Sustainable funding is crucial for the ability of the UN to do what it was
set up to do, but more pertinently, it is necessary to disconnect and break
the current patterns that are dominated by a few large donors, and the way
in which they are influencing decision-making, agenda setting and shaping
priorities and skewing implementation across the system, said Adams, a
former associate director of the Quaker United Nations Office in New York
(19811988).
Meanwhile, four member states have requested and granted exemptions
under Article 19 of the Charter for the inability to pay their dues because
of financial constraints.
The General Assembly agreed to the exempt Comoros, Sao Tome and Principe and
Somalia from paying the full minimum amount necessary to avoid the
application of Article 19 of the Charter because of conditions beyond their
control. As a result, none of them will be penalized and will be permitted
to vote in the General Assembly, until the end of its 75th session next
year.
Thalif Deen is director & senior editor at the UN bureau of Inter Press
Service (IPS) news agency. He has been covering the United Nations since the
late 1970s. He can be contacted at thalifdeen@xxxxxxx
This article is from Inter Press Service.
The views expressed are solely those of the author and may or may not
reflect those of Consortium News.
