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Thursday, June 4, 2020
UNITED NATIONS, May 20 2020 (IPS) - As a spiraling financial crisis threatens to undermine the UN’s day-to-day operations worldwide, a proposal being kicked around, outside the empty corridors of the UN, has triggered the question: will senior officials, including the Secretary-General, the Deputy Secretary-General (DSG), Under-Secretaries-Generals (USGs), including 60 heads of UN agencies, Funds and Programs, and Assistant Secretaries-Generals (ASGs), volunteer to take salary cuts— even as a symbolic gesture?
Kul Gautam, a former UN Assistant Secretary-General and Deputy Executive Director of the UN children ‘s agency UNICEF, told IPS: “I think it would be an excellent gesture of solidarity for the UN’s senior most officials, including heads of agencies, to agree to and announce a voluntary pay cut for themselves in response to the financial crisis resulting from COVID-19 that is impacting the UN system itself and the peoples of the world it serves.”
Dr Leila Fourie, Group CEO of the Johannesburg Stock Exchange, and Fani Titi, CEO of Investec, who are members of the UN Secretary-General’s Global Investors for Sustainable Development Alliance, said: “ We are proud of the leadership shown by South Africa’s President in responding to the pandemic. This is why we have both chosen to join the President in donating 30% of our salaries for three months to COVID-19 relief efforts.”
Asked about a gesture by UN staff in Cabo Verde to donate their salaries, UN Spokesperson Stephane Dujarric told reporters May 19: “We have staff in New York who have donated goods and services to the pandemic, whether it’s to deliver food. So, I think it’s not uncommon for UN staff to either volunteer or to give back to the communities where they work”.
He also said that in Cabo Verde, half of the UN country-team members, around 50 staff from UN entities and the Resident Coordinator’s office, made donations to the Government’s COVID-19 efforts.
This totaled slightly less than $5,000 and directly helped 46 families in need. The Prime Minister was very moved by the gesture and thanked the UN publicly, said Dujarric.
In an opinion piece published by IPS in April, Ambassador Anwarul K. Chowdhury, a former Under-Secretary-General and High Representative of the UN (2002-2007) and Permanent Representative of Bangladesh to the UN (1996-2001), underscored the point that “If the liquidity crisis keeps on affecting the work of the UN and its mandate delivery, the UN staff as a privileged part of the humanity, should join in making creative efforts placing interests of the world body ahead of their sacrifice.”
“One such measure could be for UN staff to allow the UN to withhold 20% of their monthly salaries to offset the impact of the current liquidity crisis in the coming months”.
“When the liquidity situation gets better, say in six month’s time, that 20% would be paid back”.
UN Secretary-General (S-G) and his Senior Management Team, he said, should lead by example announcing they would do so voluntarily.
Elaborating further, Ambassador Chowdhury told IPS: “To that I would now add that for the S-G and his Senior Management team, there should be a self-announced 20% pay cut for the next six months.”
“That would be welcomed by the international community wholeheartedly and would show the commitment of UN leadership to the broader mission of the UN for humanity”, he noted.
As a support, staff for day-to-day work and positioned at bottom most levels, this proposal should exclude all the General Services (GS) staff of the UN., said Ambassador Chowdhury, a former Chairman of the UN General Assembly’s Administrative and Budgetary Committee during the 52nd session of the UN General Assembly (1997-1998).
The United Nations, which remains closed till the end of June – and perhaps extended through August or September – due to the coronavirus pandemic is facing a growing cash crisis, due in large measure, to late or non-payment of dues by an overwhelming majority of the 193 member states.
The numbers are staggering: $1.63 billion is owed to the UN’s regular budget and $2.14 billion to the peacekeeping budget.
The United States apparently owes about $486.7 million in unpaid arrears but has promised to deliver by the end of the year—depending largely on the fluctuating political mood swings of a volatile American President.
UN Secretary-General Antonio Guterres says “unpredictable cash inflows” have been exacerbated by the deadly COVID-19 pandemic while seriously threatening the U.N.’s ability to do its work—even as nearly 36,000 staffers worldwide are working from home.
As of January 2019, the gross salary of an Under-Secretary-General, the third high ranking job in the UN hierarchy, was $198,315 and an Assistant Secretary-General pulled in about $179,948, excluding post adjustments, hospitality expenses and travel per diem.
The proposed program budget for 2020 (a/74/6 sect. 1) does not provide a breakdown of the actual salaries of the SG and DSG but the “post costs” for the SGs salary and benefits were increased from $457,500 in 2018 to $585,200 both in 2019 and 2020, excluding hospitality expenses, a residence and a car.
The proposal for voluntary pay cuts come at a time when some of the world’s political leaders, including Prime Minister Jacinda Ardern of New Zealand and three Presidents– Halimah Yacob of Singapore, Cyril Ramphosa of South Africa and Uhuru Kenyatta of Kenya– have all taken voluntary salary cuts, along with some of their deputies and senior staffers.
At a press conference in late March, Ardern announced she, and other lawmakers, will be taking a 20% pay cut for the next six months, in solidarity with those affected by the coronavirus.
Which begs the question: Why aren’t other Western leaders following in her footsteps?
Ian Williams, author of UNtold, President of the New York Foreign Press Association and a former President of the UN Correspondents Association (UNCA), told IPS comparisons are odious, as Shakespeare correctly said.
He pointed out that years of anti-UN propaganda by US conservatives has left the impression that UN staff in general, let alone senior management, are paid massive amounts.
But over the decades, emoluments for public servants have been held down while those for corporate management have ballooned, he noted.
And while the UN staff are paid salaries, the private sector are “compensated” with stock grants and options and bonuses. There is no doubt that by their own self-proclaimed standards, as business tanks, so should the CEO salaries but whether that should apply to international civil servants is moot, he added.
However, said Williams, while UN managers might be poor relatives to their private counterparts, odious comparison still apply.
They are much better paid than junior staff, and immeasurably better off than most of “us, the peoples of the world.”
“So while on one level they should not take a payout to reflect the crisis in the world economy and the effects on the UN budget, they should indeed “volunteer” to take a hefty drop in pay, for the sake of their collective reputation as public servants and for the image of the international organization as whole. Few will starve as a result,” declared Williams.
Martin S. Edwards, Associate Professor and Chair, School of Diplomacy and International Relations at Seton Hall University, told IPS: “I’d say there are two reasons this is not likely to catch on”.
The first is a simple collective action problem. It’s not easy to get people to agree to cut their pay voluntarily.
“These things normally take top-down leadership in firms, so Guterres would have to be the one to lead (and the one to ask his colleagues to also pony up)”.
The second is political. While it’s a nice rhetorical move, it plays into the hands of the penny-pinching Trump White House and confirms their suspicions that UN officials make too much money, he said.
“I don’t think that would be enough of a move to unlock the US contribution. The bigger issue is that this is a drop in the bucket. The fiscal crisis facing the UN is in the billions, and no amount of voluntary staff reductions can make up this difference”, Edwards declared.
Ambassador Chowdhury said UN management mentioned in its April 1 advisory that “although the immediate impact of the move to alternate working conditions in response to the COVID-19 outbreak will lead to reductions in travel, contractual services and general operating expenses across all budgets, we also anticipate new demands upon our operations and services as we respond to the global health crisis.”
It needs to be remembered that in facing the past financial and liquidity crises as the one is being faced now, the regular staff salary has never been cut or affected negatively, he pointed out.
The word “layoff” has no relevance in terms of the service conditions of UN staff and does not appear in any decisions by the United Nations. That is not an option to tackle the current liquidity crisis, he noted.
“I also pointed out earlier that in view of its mission and mandate, unlike the private sector, UN staff has not lost any part of their salary and other benefits, like medical insurance and pension contributions”.
That means whether the program of work and mandate delivery is negatively affected by the current liquidity crisis, the staff salary and other entitlements would continue unaffected, he added.
“Only an internal management decision could make the withholding of 20% of the salary for the six-month-period possible. It is important that the S-G takes the lead in this regard.”
“In my opinion piece, I emphasized that the UN Secretariat should brace itself to perform its global responsibilities in a high-spirited way and in an effective and efficient manner. No more business as usual.”
Meanwhile, in the corporate sector, the voluntary pay cuts have been on the rise.
At Best Buy, CEO Corie Barry has taken s 50 percent cut in her base salary while senior executives in the company have taken a reduction of 20 percent; John Lansing, chief executive of National Public Radio (NPR) has taken a 25 percent cut while other executives will have their salaries reduced by 10 to 15 percent.
The Metropolitan Museum of Art in New York city has announced pay cuts upward of 20 percent system-wide.
According to Business Insider, leaders from some of the companies affected by the pandemic, particularly airlines, “are forfeiting their paychecks as the pandemic worsens”.
These leaders include the co-founders of Lyft, executives at Airbnb, and the CEO of Marriott. And in the media and entertainment sector, Disney’s Executive Chairman Bob Iger is forgoing his salary for 2020, while the top five Comcast executives are donating theirs to charity. At Delta Air Lines CEO Ed Bastian said he would be giving up 100% of his salary for the next six months.
Gautam said more importantly, as many governments are announcing financial relief packages for their citizens who lose their jobs and to rescue private companies and employers whose businesses are suffering, there must be a concerted effort to require a drastic reduction in the grotesquely huge pay and perks packages enjoyed by CEOs and senior executives of large corporations in many countries.
“In fact, legislation offering bailouts for large corporations – e.g. airlines, cruise liners, banks, hedge funds, large hotel chains, etc. must require drastic cuts in their executive salaries and allowances to be eligible to receive any publicly subsidized financial assistance, including loans.”
That would generate real resources, said Gautam, to compensate their workers at the risk of losing jobs and would be a welcome move towards a fairer and more just world economic order.
The writer can be contacted at email@example.com
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