UNITED NATIONS: THE PRICE OF PEACE AND DEVELOPMENT

 

THE PRICE OF PEACE AND DEVELOPMENT

From all indications the United Nations may soon be incapacitated financially and unable to perform its function of maintaining peace and development in the world.

The UN is tasked with tackling many urgent issues of global importance, from humanitarian crises to peacekeeping operations and the climate crisis. This all comes at a cost, but not as much as you might think. With the 2024 budget recently approved, we crunch the numbers.

The General Assembly had on 24 December 2023 approved a $3.59 billion budget for the United Nations for 2024, including the establishment of a special account to finance the Organization’s peacebuilding fund.

In actions taken late evening on Christmas eve, the 193-member General Assembly also adopted nearly $50 million in additional funding for decisions taken by the Human Rights Council, the UN’s primary forum on human rights matters.

It also decided to establish the multi-year Peacebuilding Account, as a means of financing the Peacebuilding Fund. Additionally, it approved $50 million of assessed contributions per annum to fund the Account, starting 1 January 2025.

That’s a lot of money but, as UN Deputy Spokesperson Farhan Haq explains, there’s plenty of bang for each buck spent.

When you add up the regular UN Secretariat and peacekeeping budgets, the annual average cost of the UN for each person on the planet is about $1.25; that’s about the cost of a bag of chips in New York.

Aside from the U.N. Secretariat, the United Nations also comprises a vast range of agencies, funds, programmes and peacekeeping missions to deal with all kinds of issues, which are funded separately, and which are not included in the $3.59 billion budget.

At the high end you have agencies such as the World Food Programme, the refugee agency (UNHCR) and the children’s fund (UNICEF), which have budgets in the billions of dollars. Smaller agencies deal with, for example, maritime affairs, world tourism or civil aviation, and have budgets set accordingly. Member States join and pay dues for these agencies on a voluntary basis.

The amount paid as due by each member is based on a complex formula that includes the size of each country's economy. Other elements include the country’s external debt, income per capital, and level of development. The amounts range from a high of 22 per cent of the budget, paid by the United States, to 0.001 per cent, paid by the least developed countries.

See:

Contributions by member countries in 2023

Contribution of Member States in 2023

If the amount that a country owes is equal to what they were assessed to pay for the previous two years, they lose their vote in the UN General Assembly. They don’t get that vote back unless the General Assembly makes a special decision, or they pay enough to get below the two-year threshold, so they try to avoid owing that much.

Because of things like inflation, the budget might increase in nominal terms, but in real terms, there are many times when the United Nations cuts on expenses so that there is no overall real growth. On the other hand, dealing with crises such as the COVID-19 epidemic can add to expenses, in which case you can see a real rise in the budget.

The UN has external and internal auditors, such as the UN Office of Internal Oversight Services, that investigates allegations of internal fraud or corruption.

But the main method of oversight is ultimately through the Member States of the United Nations, which approve the annual budget and make sure that the expenses that the UN pays match up with its goals. 

The United Nations tries to use all of its money in ways that are verifiable. There is oversight at all peacekeeping operations, to ensure that all of the countries that contribute troops and equipment are reimbursed for the work that they do, and, when humanitarian aid goes out to countries, the UN tries to put checks in place to make sure that all of the aid goes to where it is needed, and is not diverted.

Humanitarian relief falls into a few basic categories, but the main ones have to do with food, drinkable water, shelter, and different assets that can help people survive. Whether it's mosquito nets in some countries or winter clothing in others, we try to get it to people as efficiently as possible.

Humanitarian aid is not seen as simply an expenditure. It's an investment in people, and a sign that the organization is not giving up on those who have a crucial role to play in building their own country.

The United Nations is tasked with the need to create a better world where people can take care of themselves.

That is what it does with the money it spends. When you invest a dollar in the education of a girl, you're investing in someone who can create a better future for herself and for her community.

Meanwhile a UN financial crisis has been years in the making and is undermining the organization’s mandates and reform efforts. Secretary-General António Guterres told the Fifth Committee, the body responsible for the United Nations budget this.

Mr. Guterres said that the inability to meet payroll and pay supplies would be “catastrophic” for the UN’s reputation and ability to conduct business. “The solution lies not only in ensuring that all Member States pay in full and on time, but also in putting certain tools in place,” he said.

 He urged Member States to put aside political differences and long‑standing objections to certain proposals, recommit to paying their financial obligations on time and in full, and help to find a solution to structural problems that are compounding the Organization’s liquidity problems.

The United Nations is currently at risk of running out of cash, the UN chief has warned, urging Member States to pay their mandatory contributions on time and in full, so that the world body can continue to deliver on its key mandates.  

In a letter to UN staff, Secretary-General António Guterres stated that he had “written to Member States regarding the troubling financial situation facing the United Nations”.

“Caused primarily by the delayed contributions of Member States to the Regular Budget, this new cash shortfall is unlike those we have experienced previously”, he wrote. “Our cash flow has never been this low so early in the calendar year, and the broader trend is also concerning:  we are running out of cash sooner and staying in the red longer”.

From all indications the United Nations may soon be incapacitated financially and unable to perform its function of maintaining peace and development in the world.