UNITED NATIONS: US Payments Offset by Earnings, says EU

By Thalif Deen Reprint | | Print |

Thalif Deen

UNITED NATIONS, Jan 28 1996 (IPS) - The European Union (EU) has bluntly accused the United States of making money from the United Nations while falling further behind in its financial obligations to the financially-crippled organisation.

Speaking on behalf of 15 European countries, Ambassador Paolo Fulci of Italy said U.S. payments to the world body were more than offset by the earnings from goods and services supplied to U.N. agencies by U.S. companies.

“With American arrears mounting, Italian legislators are asking why they should pay their dues to the United Nations on time, while the leader and its biggest procurements beneficiary was not doing so,” he told reporters.

Urging a system of incentives and penalties to resolve its financial crisis, the EU wants the United Nations to bar suppliers from countries in arrears to the world body.

The EU also wants to limit the recruitment of nationals from countries not paying their dues in full and on time.

The U.N.’s current financial crisis has been caused by the non- payment of dues which, last week. amounted to a 3.3 billion dollars. Of this, 1.6 billion dollars was for the regular budget, 1.7 billion dollars for peacekeeping and 4.9 million dollars for the International War Crimes Tribunals for the former Yugoslavia and Rwanda.

The biggest single defaulter is the United States which owes the world body about 1.2 billion dollars. It is also the single biggest contributor to the world body paying about 25 percent both to the regular budget and the peacekeeping budget.

Even as it defaulted on payments, U.S. firms has won at least 33 percent of all peacekeeping contracts and 20 percent of other contracts for the supply of goods and services to the United Nations, according to statistics released last year.

The New York-based U.N. Association of USA (UNA-USA) said that in 1994 the entire U.N. system spent about 3.8 billion dollars buying food rations, vaccines, relief supplies, office equipment and military vehicles for U.N. operations worldwide.

At a minimum, the U.S. share was valued at 737 million dollars: 20 percent of the U.N. market and a 43-percent increase over 1993.

To put the U.S. figure in perspective, the country with the second largest share of 1994 U.N. procurement contracts was Italy with 230 million dollars, or 6.1 percent of the total. In 1994 alone, the U.S. supplied goods and services worth more than three times the value of the next largest supplier.

In a fact sheet released last October, the U.N.’s Department of Public Information said the U.S. share of the U.N.’s regular budget is about 315 million dollars per year — the equivalent of about 1.30 dollars per U.S. national.

The six major contributors are: the U.S. (25 percent), Japan (13.9 percent), Germany (8.9 percent), France (6.3 percent), Russia (5.7 percent) and Britain (5.3 percent). Collectively, they account for 65 percent of the U.N.’s regular budget.

Until recently, Washington has also been paying 31 percent of the yearly total for peacekeeping, or about one billion dollars a year — less than one-half of one percent of the annual U.S. military budget.

For every dollar the U.S. contributes to the New York-based U.N. Development Programme (UNDP), U.S. companies get back about four dollars in UNDP procurement contracts, according to the U.N. fact sheet.

New York City Mayor Rudolph Giuliani said last year that the United Nations, its agencies and diplomatic corps contribute 3.2 billion dollars a year to the economy of the city alone. This, in turn, has generated 30,600 jobs, yielding about 1.2 billion in annual earnings, the mayor said.

Meanwhile, Fulci was critical of a U.N. High-Level Working Group currently discussing the financial problems facing the world body.

“The Working Group should be encouraged to change its working methods to stop talking and start acting,” he said. “We must get down to real negotiations because the house is beginning to burn,” Fulci said.

The Italian envoy said the set of proposals submitted to the Working Group should be considered as a package. They included reforming the current scale of assessments, a commitment to the payment of arrears, and a system of penalties and incentives.

“Any proposal on the non-granting of procurement contracts to member states would have to be decided (by the Working Group) by consensus,” he added.

Asked what would happen if, despite EU proposals, the United States refused pay, Fulci said: “The United Nations will become bankrupt and, therefore, stop operating. This will happen. I don’t see any other way.”