Abu Dhabi, UAETuesday 12 November 2019

More than $1-billion short, UN cuts start at the bar

With the US and others not paying their dues, big cuts begin

The iconic water fountain at the UN's New York headquarters, constructed with funds donated by school children from across the United States in 1952, is currently off because of the cash crisis. AP
The iconic water fountain at the UN's New York headquarters, constructed with funds donated by school children from across the United States in 1952, is currently off because of the cash crisis. AP

When word of budget cuts first emerged at the United Nations early last week the jokes revolved around cocktail parties being declared verboten. Faced with a near $1.4 billion budget shortfall however, the humour is about to become fact.

For the foreseeable future, diplomats and permanent staff at UN headquarters, resident journalists and high-level officials will not be mingling and exchanging gossip over drinks on the premises after work.

From Monday, the UN delegates' lounge is to close at 5pm. The delegates' dining room, with its silver service and views of New York's East River, will also suffer and opening hours will be cut at the world body's more humdrum staff canteens.

The decisions are among dozens of service cuts ordered by UN Secretary General Antonio Guterres in response to the UN's financial troubles.

In a letter obtained by The National, Mr Guterres wrote to all heads of departments and UN offices on Thursday, telling them of new measures to curb expenditure because of a liquidity crisis he raised days earlier.

From next week official travel will be limited to “the most essential activities”, purchases of goods and services are to be postponed, meetings cannot begin until 9am and must not continue past 6pm.

Events already scheduled are to be reviewed to determine if they remain necessary.

“The organisation does not have sufficient financial resources to maintain services for conferences, facilities management, IT services, and security and safety services at existing levels,” Mr Guterres said in the letter.

“Accordingly, staff, delegates and visitors will inevitably experience a reduction or degradation of some services.”

The problem is simple. UN documents show that only 129 of the organisation's 193 member states have paid into the general budget for 2019, compared to 141 this time last year. The shortfall currently stands at $1.387-billion, compared to $1.088-billion 12 months ago.

The problem is partly because of inconsistencies in the UN's own rules.

The amount a country is levied to pay the UN – the regular budget assessment – is announced in January and due within 30 days. However, a member is only judged to be in arrears if it is late by 12 months. The 11 months of leeway leads to funding gaps.

In addition, the only consequence for not paying is that a country which is two years in arrears can lose its vote in the UN General Assembly.

“As long as a country avoids this there is no penalty for paying late,” Wasim Mir, senior fellow at the United Nations Foundation, told The National.

“The secretary-general asked member states in May to look at how this could be improved, but they refused.”

The biggest budget delinquent is the United States. According to UN data, it currently owes $1.055-billion, more than a third of the general operations total ($2.849-billion).

But although the Trump administration has often appeared ambivalent toward the UN, it is not the case that the US is deliberately delaying payment. At the end of September last year it had not yet delivered its dues, but ultimately did so.

“It takes the US a long time to complete all the domestic processes necessary to disperse money to international subscriptions as Congress requires the administration (the presidency) to carry out various certifications,” said Mr Mir, a former British diplomat with almost 20 years’ experience.

“This was made worse this year as the government was shut down in January,” he said of the Trump administration.

Officials play down the significance of non-payment by saying the US normally pays its dues in October and November.

“They usually pay 90 per cent of their contributions at that time,” a senior diplomat said, noting that other nations not signing cheques has made the financial situation egregious.

On Friday, Catherine Pollard, UN under-secretary-general for management strategy, policy and compliance, said the deficit was deepening and emergency funds running out.

With a $386-million shortfall as of October 9, $150-million has already been taken from the UN's working capital fund since July and $203-million from a special funds account in August. The rest of the deficit was covered by borrowing $33-million from funds left over from closed peacekeeping missions in late September.

“Each year the situation becomes more dire than the year before,” she said.

“The cash deficits occur earlier in the year, linger longer and run deeper.

“By the end of October we are poised to surpass last year's record cash deficit of $488-million and risk exhausting the closed peacekeeping cash,” she added.

Some of the most basic infrastructure of the UN has been targeted for savings.

According to Mr Guterres' letter, interpreters will be limited to meetings in the official UN calendar, meaning that regional and other major groupings of member states will not be serviced.

Reduced staff allocations mean that verbatim records of the UN Security Council, the General Assembly and some UN committees will be significantly delayed, as will statements from member countries. All treaties and publications are to be placed on hold and not issued, according to the letter.

With New York's changeable weather starting to take hold, UN facilities will also be affected. Air conditioning and heating will be reduced outside the hours of 8am and 6pm on weekdays and throughout weekends and official holidays. The thermostat will be set at 70 degrees Fahrenheit for heating during hours of occupancy.

Escalators described as in only “light usage” will be closed.

Even the Secretariat fountain, the first thing seen by high-level delegates entering UN headquarters in official vehicles, is to be shut down to save money.

Such parsimony has won Mr Guterres both admirers and critics.

“He is an efficient administrator,” one European ambassador said. “He genuinely takes a proper interest in how things are run. But we have a list of things they could do before they have to turn out the lights.

“If you look at how many UN officials are in the chamber when someone is doing a briefing, many of them don't have to be there,” he said.

“There are ways they can be monetarily scored better within a budget, to add value.”

With Mr Guterres' past appeal for payment in August going largely unheeded, he said on Tuesday that staff salaries would be in jeopardy next month if the deficit is not narrowed.

The absence of payment from Washington is thus likely to attract attention in coming weeks, said Richard Gowan, the New York-based UN director at the International Crisis Group.

“The obvious goal is to put pressure on the US,” he said, adding that “Mr Guterres's past warnings struggled to get diplomats' attention but he may hope that by flagging the problem loudly now he can push new US ambassador Kelly Craft into fixing the deficit.

“If she can get the money moving from Washington, it will win her a lot of political capital in New York. But if she cannot or will not find a way to break the budget impasse, it will get her off on a poor footing with many countries that have paid up dutifully this year.”

Updated: October 13, 2019 12:19 PM

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