POLITICS: Developing Countries Critical of Cuts in US Dues to UN

By Thalif Deen Reprint | | Print |

Thalif Deen

UNITED NATIONS, Mar 30 2000 (IPS) - The United States, despite strong criticism from Third World countries, is trying to negotiate a reduction in its annual dues to the United Nations.

US Ambassador Richard Holbrooke wants the remaining 187 member states to agree to a cut in Washington’s annual assessed payments: from 25 percent to 20 percent of the UN’s regular budget. The budget for 2000-2001 biennium stands at about 1.3 billion dollars.

At present the United States is also the largest single defaulter owing more than 1.7 billion dollars in outstanding dues primarily because a right-wing Republican-dominated US Congress has been holding back payments for political reasons. This, in turn, has triggered a cash crisis at the UN resulting in staff cuts and austerity measures.

Speaking on behalf of the 133 developing countries of the Group of 77, Ambassador Arthur Mbanefo of Nigeria says the UN’s current financial crisis should not be linked to the scale of assessments. The cash shortage, he points out, was primarily caused by the failure of certain member states to pay their assessments.

“The financial situation had severely impaired the organisation’s ability to function and prevented it from carrying out its major activities,” he said.

The group believes that the only viable solution is for member states to pay their outstanding arrears and meet their legal obligations by paying their dues in full, on time and without conditions.

Currently about 10 countries – the United States, Japan, Germany, France, Italy, UK, Russia, Canada, Spain and the Netherlands – account for more than 75 percent of the UN’s regular budget.

The 25 percent ceiling for the United States is the maximum a country is expected to pay, and the floor, the minimum paid by most developing nations, is about 0.001 percent.

Of the five major contributors, Japan ranks behind the United States with 20 percent of the budget, Germany about 9.8 percent, France 6.5 percent and Italy 5.4 percent.

Holbrooke told the UN’s Administrative and Budgetary Committee last week that this tax base has to be broadened in “an equitable and fair manner.”

The US envoy argued that the current scale of UN assessments was adopted some 26 years ago when there were only 147 member states. Since then, he said, many of the world’s economies have dramatically changed – some for better, others for worse. So he wants the countries that are economically better off to pay more for the upkeep of the world body.

“Many countries in this room have told us privately that they are ready to pay more if an equitable revision of the scale is done,” Holbrooke told delegates, although he did not identify any of the countries by name.

Under the current scale – which is arrived at through a complex process involving a country’s economic status, including gross domestic product (GDP), per capita income and population – the assessment is based on “capacity to pay.”

Holbrooke said that “every other nation here talks about the capacity to pay. We agree with that in principle, but we need to be honest about what capacity means,” he noted.

He said the UN should establish a system that recognises each nation’s capacity to pay and spreads the financial burden equitably among the entire membership.

The United States is also seeking to lower its peacekeeping dues: from 30 percent to 25 percent, although the US Congress has already unilaterally done so in violation of the UN charter. The UN’s peacekeeping budget this year is expected to reach a high of about 2 billion dollars.

Ambassador Wang Yingfan of China has challenged the US move to reduce both ceilings. Although the United States was assessed 25 percent of the total UN budget, he said, recent economic statistics show that the US GDP constitutes about 27 percent of world’s total output, with its economy growing for nine years in a row.

Many Third World delegates feel the United States ceiling should really be raised to 27 percent, not lowered to 20 percent, because of the strong US economy.

The current ceiling, the Chinese envoy argues, is already favourable to the United States. “A further lowering of the ceiling will deviate even more from the principle of ‘capacity to pay’ and render even more unfair the assessment of contributions to our organisation.”

“That would be unreasonable,” he adds, “and cannot be accepted.” Moreover, he says, payment of arrears to resolve the UN’s cash crisis and the proposed adjustment of the scale of assessments are two different issues.

“We find unacceptable the notion of lowering the ceiling as a pre- condition for payments of arrears in order to exert pressure on the UN,” he asserts.

According to Ambassador Kamalesh Sharma of India the United Nations has been told that the withholding of payments will continue unless the ceiling for assessed contributions is lowered.

“On this, we need to be clear. What is sacrosanct is not the ceiling but the UN charter. Negotiating a lower scale, or a lower ceiling, openly and intergovernmentally, is a right open to all of us. Only a unilateral decision is excluded,” he told the Committee.

Sharma also said that that it has been argued that in all countries the rich always try hard to reduce the tax they pay. “True, but a man who refused to pay his taxes because he thought they were too high would rapidly find himself enjoying his government’s uncomprehending and adverse attention,” he declared.