UN responsibilities far outstrip funding

The United Nations' core budget in 2011 was $2.2bn, down from a peak of $2.5bn in 2009 and miniscule compared to the $66bn budget of the UN's host city, New York. The funds available to the key international organization have not kept pace with the expansion of the UN's duties since its founding in 1945, according to a new report published by the Worldwatch Institute for its “Vital Signs Online” publication. The report reveals a disconcerting shift in the sources of UN funding. The level of voluntary contributions from the organization's wealthier member nations, including the United States, Germany, and Japan, is growing, helping to fund the core budget and various UN agencies and programs. Yet mandatory payments from all member nations are lagging: they account for just 14-18% of UN funds, down from 20-25% during the 1970s through 1990s. In effect, wealthier nations use their financial leverage to sidestep the regular UN decision making process, the report notes.

"The shift away from mandatory payments and toward voluntary contributions reflects the rich member nations' preference for agenda-setting through bilateral pressure, rather than democratic voting," write report authors Michael Renner and James Paul. "In this way, UN finance is increasingly a reflection of a world divided between countries of vastly different resources, priorities, and global aspirations." The report finds that private sources, including foundations and businesses, are increasingly funding UN operations. Many governments and experts are critical of this trend because they claim that private funding introduces external influences over the organization's regular governance process.

The UN's core or "regular" budget, which covers ongoing costs like staff salaries, meeting expenses, travel, security, conflict mediation, and human rights activities, among other tasks, is funded entirely by mandatory national payments. In 1971, this budget was $157m, and it has grown almost 14-fold since then in nominal terms. But in real terms (i.e., when adjusted for inflation), the budget has grown only threefold – not nearly enough to keep up with multiplying program mandates and the complexities that accompany a much-expanded membership, according to the report. Beyond the "regular" UN budget are the much larger peacekeeping budget and specialized agency budgets. In the 2011-12 budget year the UN peacekeeping budget was $7.8bn. Funding for specialized UN programs and agencies like the World Health Organization, the Children's Fund (UNICEF), and the UN Development Programme totalled about $20bn in 2011. In total, the UN system's in 2011 amounted to about $30bn.

Further highlights from the report:

* UN member states' individual military spending in 2010 totalled $1.6trillion, more than 200 times the UN's current annual peacekeeping spending of $7.8bn.
* The poorer UN states, voting in the G77 bloc, favour more UN activity in the social and economic field, while the rich countries generally prefer an emphasis on peacekeeping.
* In part because of budgetary shortcomings, the UN Environment Programme (UNEP) has failed to establish a strong international presence since its 1972 founding: in 2010, UNEP received just over $205 million, less than 1 percent of total UN funding.
* At the end of May 2011, the United States owed the UN regular and peacekeeping budgets a total of $1.3bn in arrears, or 42% of the total for all member states.

The alternative view from Washington: Greece

The agreement between the European authorities and Greece won’t resolve Greece’s economic crisis and is likely to make it worse, said Mark Weisbrot (see photo), economist and Co-Director of the Centre for Economic and Policy Research (CEPR).“The European authorities seem more intent on punishing Greece than helping the economy recover,” said Weisbrot. “For two years now they have been pushing the Greek economy into recession, and there’s still no light at the end of the tunnel.” Weisbrot noted that the IMF has had to lower its projections for Greek GDP shrinkage by an enormous 7% of GDP in less than two years. Most of this downward revision has been in just the last five months.

A leaked document reported this week by Reuters and the Financial Times contains a “sustainability analysis” prepared for the European Finance Ministers. It portrays a grim scenario with explosive debt and Greece needing “about €245bn in bail-out aid, far more than the €170bn under the ‘baseline’ projections eurozone ministers were using.” “Given the underestimation of Greek losses so far, and the recessionary impact of budget tightening, mass layoffs, a 20% reduction of the minimum wage, and other austerity measures – I think the pessimistic scenario outlined in the leaked document is a very plausible scenario,” said Weisbrot.

Weisbrot also pointed out that the European authorities’ strategy of “internal devaluation” is not working even on its own terms. The ostensible purpose of Greece’s prolonged recession is to lower labour costs in order to lower the country’s real exchange rate and increase Greece’s international competitiveness. But Weisbrot noted that “after four years of recession, with unemployment rising from 6.6% to a record 20%, Greece’s Real Effective Exchange Rate (REER), according to the IMF, is higher than it was in 2006.”
The IMF is projecting that Greece will still have 17% unemployment in 2016.

“The bottom line is that you can’t shrink your way out of a recession – you have to grow your way out. What they are doing to Greece really makes no economic sense. At this point, it looks like the economy would do better if Greece were to exit from the euro, as opposed to enduring indefinite recession and stagnation, extremely high and persistent unemployment, and increasing poverty. The European authorities are certainly pushing Greece toward the exit and default option.” – A more detailed paper on the Greek economy and crisis by CEPR is available >>> here.

Trade unions back Guy Ryder as candidate for ILO Director-General

The International Trade Union Confederation (ITUC) has announced its backing for ILO Deputy Director-General Guy Ryder to succeed Juan Somavia as Director-General of the tripartite UN body in the election for the post in May. “The world is facing its greatest employment crisis since the 1930s, and the ILO’s role in the international arena is absolutely crucial. Guy Ryder has all the qualities and experience needed to lead the ILO in ensuring decent jobs and social justice are at the heart of the global response,” said ITUC Secretary-General Sharan Burrow. “His experience of the ILO, commitment to its values, knowledge of the role and content of labour standards, the supervisory system, labour market institutions, social dialogue and employment policies make him the candidate of merit.”

Prior to his current position, Ryder’s ILO experience included serving as Head of the organisation’s Workers’ Activities Bureau, and as chief of the Director-General’s office. In 2002 he was elected Secretary-General of the International Confederation of Free Trade Unions (ICFTU), and led the process of unification of the international trade movement culminating in the creation of the ITUC in 2006. He served as ITUC Secretary-General until returning to the ILO in 2010.

ITUC affiliates around the world are lobbying to support his candidacy in the election, which will take place at the ILO Governing Body meeting in late May. Twenty-eight government delegates and 14 delegates, each from employer organisations and trade unions, will vote in the election. The ITUC represents 175 million workers in 153 countries and territories and has 308 national affiliates.