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Latest News on the UN Financial Crisis (4 Oct 1996) [Global Policy Forum] Latest News: 4 October 1996
U.S. Says It Will Pay $661 Million;
Critics Sceptical, Say Huge Debt Remains
On Thursday, 3 October, President Clinton signed an omnibus spending bill to provide funding for the United Nations and many UN agencies and funds. In press briefings, Administration spokespeople claimed that the new funds will ease the UN financial crisis. NGOs and concerned governments responded critically -- pointing out that even if the US pays the sum promptly, it will still owe over $1 billion in arrears, a sum that will rise again in coming months."The US appropriation is welcome but long overdue," said William Pace, Executive Director of the World Federalist Movement. "US arrears still remain mountainous, in clear violation of the country's international legal obligations. NGOs around the world will press forward with our campaign of protest until the U.S. agrees to pay in full, on time and without condition."
The bill signed by the President provides funds for the 1996 UN regular budget and for the international tribunals budget in the amount of $329 million, as well as $282 million for peacekeeping and $50 million for peacekeeping arrears. On Friday, 4 October, the US government announced that these sums, amounting to a total of $661 million, would be paid to the UN by the end of January, 1997. Officials making the announcement emphasized the positive effect on the UN financial crisis. The New York Times and many other media carried a dispatch by Reuters press service covering the story.
Amb. Donald Gelber of the US Mission made a special presentation on UN finance at an NGO briefing on 4 October, saying that approximately two-thirds of the regular budget appropriation by the US would be disbursed by the end of the year and the remainder before the end of January. "We won't be in the red any more," he said. "I guess you would say we will now be in the green."
"The US announcements are highly misleading," countered James Paul, Executive Director of Global Policy Forum. "Amb. Gelber's statement distorted the actual financial posture of the United States at the UN. The US is playing a financial shell-game. By the time the appropriated sum has been paid, the US will still owe the UN more than $1 billion in arrears."
"Judging from past performance," Paul continued, "it may be many months before the UN sees the money."
At the time of the announcement, the United States owed over $1.5 billion to the UN. The UN adds new peacekeeping assessments nearly every month to the US account and it will send out bills for 1997 regular budget assessments on January 1st. Furthermore, according to sources in the Secretariat, the US has actually cut back on prior promises of peacekeeping payouts in 1996. Though the newly-announced US payments include $100 million in unanticipated funds for the Regular Budget in 1996, the US has informed the Secretariat that $71 million in previously promised funds will not be paid before the end of the year. So the net difference is only $29 million.
"Unless the Clinton administration acts to pass supplementary budget legislation in the new year,"said Paul, "United States arrears will again drag the UN budgets into deep cash-flow difficulties in 1997, pushing the organization for the third year in a row to the brink of bankruptcy. "
The UN is also struggling with a sharply reduced budget. US pressure has forced other member states to agree to deep cuts in the regular and peacekeeping budgets, imposing major personnel downsizing and cutbacks in many important programs. The Clinton Administration apparently intends to press for further budget reductions, using its arrears to block new program mandates and to force further program cuts -- a process euphemistically called "streamlining." NGOs and many delegations believe that the budget cutting has dangerously weakened the organization, at a time when its work on global issues like poverty and the environment are more needed than ever.
Questions remain as to whether the Clinton administration will pay the sums by January, as promised. The US has often promised to pay funds to the UN and then subsequently delayed payments. The Clinton administration made one 1995 payment nearly a year after the authorizing bill had been passed. Administrations blame Congress for restrictive language in authorization bills. In the case of the present appropriation legislation, Congress requires the Secretary of State to certify that the UN has kept to its zero-growth budget and that the Inspector General's office is functioning effectively. It remains to be seen when these certifications will be made and how soon the sums will actually be disbursed.
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