US Arrears to the UN
by Sue Lautze June 2003

In late 1999, the US Congress passed legislation to clear nearly US$1bn in arrears owed to the UN. The craftsmen of the deal were an unlikely trio: conservative Republican senator Jessie Helms, moderate Democratic senator Joseph Biden, and the field-tested diplomat Richard Holbrooke, US Ambassador to the UN.

The legislation came hard on the heels of a US General Accounting Office (GAO) report warning that the US faced the possibility of losing its vote in the UN General Assembly (UNGA). By 1 January 2000, estimated US arrears would have stood at around $1.43bn, with prior two-year assessed contributions at an estimated $1.28bn. The shortfall – of $153m – would have resulted in the UN invoking Article 19 of its Charter, under which any country with more than two years’ back dues loses its vote in the UNGA.

In 1998, UN Secretary-General Kofi Annan had warned of the dangers of US intransigence, declaring in The New York Times that the only winners were ‘the aggressors of the world whose designs we seek to foil [and] the violators of human rights abuses we endeavor to curtail’. Annan defended the progress of his reforms, noting that by 1998 1,000 posts had been cut, the UN’s budget had fallen to $2.53bn, and administrative expenditures had been cut from 38 per cent of the budget to 25 per cent – all measures that Helms in particular had been demanding.

Domestic factors

Within Congress, however, concerns about the UN’s potentially compromised ability to respond to destabilising conflicts or to meet pressing humanitarian needs were absent from the debate. Instead, the key issue was the possibility that the US stood to lose influence. Congressional arguments were couched in the language of US interests, and deliberations related to domestic constituencies, or to the concerns of individual legislators.

These concerns included the pro-choice activities of US NGOs abroad; fiscal reform in the UN; the security of US military personnel working in UN-related peacekeeping assignments; Israel’s status within the Security Council; and the impact on the US budget surplus. Funding for peacekeeping operations was sensitive among conservative members of the US Congress, who felt that the UN had not adequately credited the US for military assets that had been extensively used in earlier peacekeeping operations. There was a feeling among some in Congress that the US had already paid its dues.

Congressional concerns were in sharp contrast to US public-opinion polls that, in late 1999, gave the UN its highest approval rating since 1959. By three to one, respondents favoured the US paying its dues, and overwhelmingly rejected linking the issue of UN dues to the national debate about abortion rights.

Nonetheless, the passage of the legislation authorising the payment of arrears was conditional on UN reform, while the Clinton administration was forced to accept language barring family-planning groups from using US funds to lobby for changes in overseas abortion laws. The compromise legislation authorised the payment of arrears over three years, beginning with $100m in 1999. The second and third instalments (of $475m and $244m respectively) are conditional on the UNGA voting to reduce the regular US budget assessment from 25 per cent to 22 per cent (in comparison, the combined regular assessed contributions of the European Union countries is 36 per cent, and 20 per cent for Japan), and on a reduction in contributions to peacekeeping, from 30 per cent to 25 per cent.

Further conditions included calls for increased audit functions for the International Labour Organisation, the World Health Organisation and the Food and Agriculture Organisation; a ban on using US funds for UN global conferences; and detailed oversight and accounting requirements, including reimbursement for the use of US military assets in future peacekeeping operations.

The implications for the UN

The assessed contributions that are at the heart of the controversy differ from voluntary contributions, the mechanism through which most UN agencies’ emergency operations are funded. Nevertheless, the debt repayment, and the conditions imposed on it, have implications for the UN’s humanitarian activities, particularly peacekeeping. The bulk of US arrears have accumulated not from the regular budget assessment, but from the peacekeeping bill. During the early 1990s, these bills mounted rapidly, prompting Congress to pass legislation in 1994 unilaterally capping the US contribution at 25 per cent. The gap between what the UN bills and what the US pays has contributed to mounting arrears ever since.

As a consequence, the UN has been unable to reimburse troop-contributing nations in recent peacekeeping operations, in particular the UN Protection Force in the former Yugoslavia. Despite agreeing to pay these arrears, the US Congress continues to pare down Clinton’s requests for peacekeeping funding. Currently, there is a bid in Congress to rescind up to $212m of the $498m approved for peacekeeping operations in the 2000 financial year (FY). In addition, the Senate and the House of Representatives have cut Clinton’s request for $739m for UN peacekeeping operations in FY 2001 by about $239m, to $500m.

A solution – of sorts

Congress has manufactured a resolution of sorts to the UN’s US-induced fiscal crisis. In doing so, however, it missed an opportunity to focus on important questions of UN reform. The strings attached are provincial in character, and reflect America’s interest in UN accountability to US concerns, at the cost of UN accountability in terms of the world body’s performance globally. Once again, an invaluable chance was lost to address pervasive problems of interagency coordination, to clarify mandates for internally displaced populations and to strengthen the UN specialised agencies’ commitments and obligations for their roles in emergencies.

Sue Lautze, Feinstein International Famine Center, Tufts University, Medford, Massachusetts, US. The website of the Feinstein International Famine Center is at: http://famine.tufts.edu.

 

References

Kofi Annan, ‘The Unpaid Bill That’s Crippling the UN’, New York Times, 9 March 1998.

Cliff Kincaid, The United Nations Debt: Who Owes Whom?, Cato Policy Analysis No. 304, 23 April 1998, <www.cato.org/pubs/pas/pa-304.html>.

Americans Give UN Highest Approval Ratings Since 1959: Say Issue Affects Their Vote, UNA-USA Press Release, 17 September 1999.

Senate Committee Report Details Requirements for the UN, UNA-USA Washington Report, 6 May 1999, <www.unausa.org/dc/info/sreport10643.html>

 

Anthony McDermott, The New Politics of Financing the UN (New York: St Martin’ s Press, 2000), 213pp This is a well-informed study of the labyrinth of UN finances. It shows both the importance of the peacekeeping budget to maintaining the current-account balance, and the slow but persistent deterioration of the UN’s financial position as peacekeeping operations shrink. There is also an in-depth discussion of the question of assessed contributions, arrears in US payments and calls in the US for a lower contribution to the UN

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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