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UN Atomic Agency Is Threatened by Financial Crisis - UN Finance - Global Policy Forum UN Atomic Agency Is Threatened
by Financial CrisisBy William Drozdiak
Washington Post
August 8, 2000
The U.N. agency responsible for preventing the proliferation of nuclear weapons is facing a financial crisis and may soon have to cease key operations because the United States and other countries refuse to pay their bills on time, according to senior diplomats here.
The International Atomic Energy Agency, which seeks to ensure that no country secretly diverts nuclear materials for bomb-making purposes, has already curtailed some aid projects and defaulted on $1 million in travel expenses, officials say. By the end of the month, they warn, the agency may not be able to meet its payroll.
"If this perilous situation continues, it could undermine critical safeguard operations that verify the safe uses of nuclear energy," said IAEA Director General Mohammed Baradei. "The U.S. Congress and others will then have to ask themselves hard questions about the damaging impact on important strategic interests." The United States covers about a quarter of the agency's $300 million annual budget.
The IAEA is pleading for faster payment at a time when Congress is considering building a national missile defense system--at a cost of more than $60 billion--that would attempt to shield the country from missile attacks by such countries as North Korea, which the Agency monitors closely.
"It makes no sense to spend that amount of money on a future missile defense while neglecting simple, effective and much cheaper measures available right now to curtail the threat," said John B. Ritch, the U.S. ambassador to the U.N. agencies in Vienna.
Congressional officials said the United States is not stiffing the agency but sticking to a long-established schedule of paying dues in the fourth quarter of the calendar year, after Congress passes the budget for the new fiscal year.
"The U.S. fiscal year is not aligned with the United Nations' fiscal year," said Dan DuBray, spokesman for the House International Relations Committee. "That is hardly a new development. . . . What U.N. agencies are expected to do is coordinate and manage the funding" so that their operations are not disrupted.
A State Department spokesman said that the administration is trying to ease IAEA's cash crunch and is exploring whether the agency could borrow money from separate funds the United States gives it for technical activities and then repay that amount in October, when the regular U.S. payments are made. The spokesman noted that the IAEA was able to meet its payroll last month only by delaying payment on the agency's Diners Club credit cards.
Early this year, the Clinton administration worked out a compromise with the Republican-controlled Congress to pay more than $1 billion in back dues to the United Nations, but the deal left intact the two-decade-old U.S. practice of paying late in the year, rather than early, as provided for under U.N. regulations.
This policy has caused previous disruptions at the IAEA, which devotes about a third of its annual budget to monitoring nuclear facilities around the world. Its inspectors use electronic sensors, laboratory analysis and on-site observation to try to smoke out secret nuclear weapons development.
Many countries have complained about late U.S. payments, saying the tardiness places a heavier responsibility on them to sustain the agency's functions until the U.S. funds arrive. This year, several countries have adopted go-slow tactics of their own. France, for example, has delayed paying its share of nuclear-inspection costs because its U.N. peacekeeping duties have proven greater than expected. Other major donors, irritated by U.S. behavior, also have delayed their payments, officials here said.
The agency already has pared back programs that help countries in such fields as nuclear medicine and agriculture, agency officials said. These programs are often an inducement to allow "invasive" inspection of nuclear facilities; without the programs, officials contended, countries might be less likely to allow such inspections.
All in all, officials said, the agency is now facing the greatest financial crisis in its history. With $1 million in travel bills past due in the last month, the IAEA says it soon may have to depend on inspectors to carry out their work at their own expense.
Aug. 25 is a major deadline for the agency; officials here are concerned it will not be able to meet the payroll for all its 2,100 employees. At that point, it would have to make decisions about whom to send home and whom to keep.
"IAEA nuclear safeguards are arguably the single most cost-effective expenditure for national security made by the United States," said Ritch, the U.S. envoy to the agency. "But when other countries act as undependably as Congress has mandated us to behave, the whole system verges on collapse."
One of the IAEA's missions is to maintain permanent on-site inspections of North Korea's nuclear reactors. The monitoring regime was accepted by the Pyongyang government as part of a 1994 deal with the United States that called for a total freeze on North Korean nuclear facilities. In return, the U.S. offered to provide heating oil to North Korea, while South Korea and Japan agreed to subsidize construction in the North of two modern nuclear reactors of Western design that do not produce materials conducive to making weapons.
The IAEA inspectors have served as the world's "eyes and ears" for the past six years to ensure that North Korea adheres to its pledge not to produce plutonium, a key ingredient in nuclear bombs.
Before being expelled from Iraq in 1998, IAEA inspectors managed to find and destroy a number of nuclear facilities that inspectors said were being secretly used by the government of President Saddam Hussein to build weapons. The discovery of Iraq's clandestine bomb-making project led to a significant expansion of the IAEA's inspection powers.
The stronger mandate has endowed the agency with authority to conduct "intrusive" examinations of nuclear facilities in every country in the world except the five declared nuclear powers--the United States, France, Russia, Britain and China--and three states that possess nuclear arsenals of undetermined capability--Israel, India and Pakistan.
Officials here said that the payment delays began during the first term of the Reagan administration. At the time, budget director David Stockman and Assistant Secretary of State for International Organizations Elliot Abrams viewed the later payments as a way to achieve substantial budget savings.
Since then, the United States has supplied funds to U.N. agencies through a single annual appropriations bill that is supposed to be passed by Congress by Oct. 1. But often there are delays that mean the money reaches the United Nations even later than the final quarter of the year.
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