The United Nation’s Financial Crisis – October 1999.
November 17, 2008

RADIO 2CBA FOCAL POINT COMMENTARY BROADCAST ON FRIDAY OCTOBER 22 1999 ON RADIO 2CBA FM.

The United Nations turns 54 on Sunday October 24. But it will not be having a happy birthday.

The UN is on the brink of financial ruin, largely because the United States Congress has refused to pay over a billion dollars in back arrears.

The UN is not an expensive organization. By the standards of government expenditure, the UN runs on minute sums of money. The UN’s central budget is less than that of the Council of the City of New York. The UN Secretary-General has fewer employees than the state government of NSW.

The Australian Government could easily afford to run the UN Secretariat from its own budget. It would be the equivalent of about three months of expenditure by the Australian Defence Force.

One and a half days of the cost of “Desert Storm”, the 1991 operation which finally retook Kuwait from Iraq, would have paid for all UN peacekeeping world-wide for that year. The total cost of operation “Desert Storm” probably cost the same as all the peacekeeping operations the UN has ever conducted since they began in 1948.

However, despite the small size of the UN budget, most governments are slow in making payments. If governments regard something as particularly important, they will find the money for it (as we have seen with the funding of the Sydney Olympics). On this reckoning, the UN is obviously a low priority item.

The UN’s current financial crisis is due its being caught up in domestic American politics. First, there is a renewed sense of isolationism in the United States politics, with the US Congress this week agreeing on a foreign operations bill 14 per cent less than President Clinton requested. President Clinton has rejected that bill on the grounds that “If we under-fund our diplomacy, we will end up over-using our military”.

Second, next year is the presidential election and so the US government grinds to a halt. Republican senators, still angry over Clinton’s escape from the Lewinsky scandal and wanting to forestall Democratic campaigns, have sought to deny Clinton any foreign policy victories. They have stopped the US’s ratification of the nuclear weapon comprehensive test ban treaty, thus adding to nuclear tensions around the world. They are also embarrassing the United States at the UN by refusing to pay the arrears.

But they do not care about the damage to the US’s overseas image. Foreigners don’t vote in US elections. There are no votes lost in this strategy. All politics is local.

The US’s poor record on UN payments has made it politically easier and more respectable for other countries to reduce their own contributions to the UN. For example, Germany, Denmark and Japan have recently reduced their contributions to the UN Development Programme.

Therefore, at a time when the world is worried about the problems of the next millennium, the UN itself is worried about what financial state it will be in when the world reaches the new millennium.