Third World Angered As U.S. Asks To Reduce UN Dues

by Thalif Deen

U.S. 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.

At present the United States is also the largest single defaulter, owing more than $1.7 billion in outstanding dues, primarily because a right-wing Republican-dominated 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 organization'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 month that this tax base has to be broadened in "an equitable and fair manner."

The U.S. 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.

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 recognizes 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 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.

Ambassador Wang Yingfan of China has challenged the U.S. 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 U.S. 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 U.S. economy.

The current ceiling, the Chinese envoy argues, is already favorable 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 organization."

"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 precondition 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 intergovernmental, is a right open to all of us. Only a unilateral decision is excluded," he told the Committee.

Sharma also said 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.