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.

UN takes the ball on global economic policy

The UN agreement on the financial crisis takes important steps toward a global consensus on response to the crisis, according to CIDSE, an international alliance of 16 Catholic development agencies working together for global justice. Member nations have already agreed the text of a final declaration of the conference, which ends today in New York. The document includes the recognition that the UN should have a role in ensuring in ensuring that the global economic and financial system should work for developing countries.

“Global economic policy should be like the World Cup, with every nation playing – not a tournament for rich countries and their invited guests. With this agreement, the UN took the ball,” said René Grotenhuis, President of CIDSE and Director of Dutch organization Cordaid. “The US ought to be particularly commended for supporting economic justice – anyone at the Bush or Bill Clinton State Department would have been fired for approving this. Agreement for countries to impose capital controls is a total reversal of Clinton and Bush-era policies. And US support for World Bank and IMF hiring according to geographic and gender diversity moves them part of the way from G8-dominated clubs towards accountability to the world,” said Aldo Caliari, Director of the Rethinking Bretton Woods project at Center of Concern, the US member of CIDSE.

Progress includes:
* Trade: Developing countries earn half their GDP from exports, and trade is the main way the financial crisis is hitting them. The document recognizes many countries will need to change trade and investment rules or impose capital account restrictions, to implement crisis recovery measures.
* Debt: Developing countries face more than $3 trillion in debt maturing this year. The agreement includes temporary standstills on debt payments for countries in crisis, and agreement to go beyond existing ad hoc responses to a structured mechanism for sovereign debt settlements.
* Stimulus: The agreement calls on countries with stimulus spending not to impose rules that hurt third countries.
* Continuing mandate: While some countries opposed follow-up to the conference, the UN will have a continuing working group to implement these measures and an expert group to provide “independent technical expertise and analysis” on the subject of the conference.

“This is slow progress for more than 50 million people are expected to lose their jobs, and 100 million newly hungry in the world. But the UN is asserting influence on the global economy, and that’s good news for the majority of people who aren’t represented at the G8 or the World Bank and IMF they control,” said René Grotenhuis.

Voices on the UN financial summit in New York

* Head of South Centre: Most collateral damage in developing world
The United Nations should be the place that “educates the innocent and the victims” on how to deal with the world economic and financial crisis, Martin Khor, Executive Director of South Centre, said at a press conference in the run-up to the UN conference on the impact of the global crisis on developing countries in New York. He said that, having played no role in causing the crisis, the developing countries had suffered the most “collateral damage”, with losses averaging 6% of gross national income as their economic growth was expected to fall from 8.3% in 2007 to 1.6% in 2009.
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* ITUC: Global crisis needs global coordination
As the United Nations kicks off a major three-day Conference in New York, the International Trade Union Confederation (ITUC) is drawing the attention of world leaders to the severe human costs of the deepening slowdown in the global economy. This is most evident in the jobs crisis, with increasing income inequality, rapid increases in unemployment, and growing hunger and poverty in developing countries. Women are bearing a disproportionate share of the hardships brought on by the global crisis.
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* CIDSE: Global crisis requires global reform
According to CIDSE, an international alliance of Catholic development agencies working together for global justice, the worlds’ poor risk being let down once more as no leaders from developed countries are expected to attend. Their constructive engagement in inclusive fora like the UN is needed for structural changes like a Global Economic Council, to address economic issues the way the Security Council addresses security-related ones, and in keeping promises like the development finance agreements made in Doha.
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UN Task Force on reform of global finance stands ready

On the eve of the World Financial Summit in Washington, General Assembly President Miguel D’Escoto announced the full composition of a high-level task force he is setting up to examine possible reform of the global financial system, including the International Monetary Fund (IMF) and the World Bank. Joseph Stiglitz (see photo), who won the Nobel Prize for Economics in 2001 and is a former chief economist at the World Bank, will chair the Commission of Experts on Reforms of the International Monetary and Financial System, which will suggest steps that Member States can take to secure a more stable global economic order. The commission’s other members are:

* Jomo Kwame Sundaram, the current Assistant Secretary-General for Economic Development and the UN Department of Economic and Social Affairs (DESA);
* José Antonio Ocampo of Colombia, who is a former Under-Secretary-General for Economic and Social Affairs;
* Zeti Akhtar Aziz, the Governor and Chairman of Malaysia’s Central Bank;
* Jean-Paul Fitoussi, Professor of Economics at the Institute d’Etudes Politiques de Paris in France;
* Avinash Persaud of Barbados, who is Chairman of Intelligence Capital Limited;
* Yaga Venugopal Reddy, former governor of India’s Reserve Bank;
* Eisuke Sakakibara of Japan, who is currently Professor at Waseda University in Tokyo;
* Chukwuma Soludo, the Governor of Nigeria’s Central Bank;
* Yu Yongding of China, the Director of the Institute of World Economics and Politics.

When D’Escoto announced the formation of the panel last month, he noted that “there is growing recognition that the current turmoil in the financial system cannot be solved through piecemeal responses at the national and regional levels but requires a coordinated effort at the global level.”

Push for Decent Work in development and poverty eradication

The International Trade Union Confederation (ITUC) is using a new United Nations Development Cooperation Forum (DCF), meeting in New York this week, to push for decent work in development and poverty strategies. An ITUC Statement to the first Biennial Development Cooperation Forum of the UN's Economic and Social Council (ECOSOC) sets out a series of steps which need to be taken to make aid and poverty eradication effective. "At the policy level, the UN has made great strides in mainstreaming decent work into its development agenda," said ITUC General Secretary Guy Ryder. "The recent adoption by the International Labour Conference of the ILO Declaration on Social Justice for a Fair Globalisation gives fresh impetus to putting the policy to work in reality".

In keeping with the new ILO Declaration, the ITUC Statement calls for the decent work agenda to be fully incorporated into National Development Strategies (NDSs), based on the four strategic objectives of promoting employment, social protection, social dialogue and rights at work. Special emphasis is placed on gender equality and non-discrimination as drivers of economic and social development. The ITUC further calls on multilateral institutions as well as bilateral and multilateral development actors to harmonise their policies with sustainable development objectives, including decent work objectives, and to ensure that policies support rather than undermine these objectives. The Statement points out that aid programmes should fully respect the principles of national policy space, democratic ownership, removal of tied aid and ending regressive economic policy conditionality.

The ITUC's push for decent work in development will gain further momentum at two important international events later this year, the September meeting in Accra on aid effectiveness, and the conference on financing for development in Doha in November.

Concerning the Development Cooperation Forum itself, the ITUC believes that this new ECOSOC body should become the key global forum for discussing development cooperation, and that the ILO in particular should have a key role in it to ensure that decent work is fully integrated. The DCF should set the agenda on development and aid effectiveness, and operate as a multi-stakeholder policy Forum involving bilateral and multilateral donors and institutions, UN specialized agencies, and civil society organisations including trade unions. It should complement the existing policy dialogues of other relevant for a such as OECD-DAC and the Financing for Development (FfD) process, with development cooperation and development effectiveness as its core mandate, and with a remit to resolve issues of policy coherence with respect to development cooperation.

Development Cooperation Forum: We have reached a critical juncture, Ban says

The United Nations has reached “a critical juncture” in the implementation of its development agenda, Secretary-General Ban Ki-moon said, with soaring oil and food prices, turmoil in the financial markets, inequality and climate change all threatening to strike hardest at the world’s poorest people. In a message to the opening of the annual high-level segment of the Economic and Social Council (ECOSOC), held at UN Headquarters in New York this week, Ban said urgent collective action was needed, particularly to address imbalances in the global economy. Scepticism about globalization is widespread, amid concerns that it is leaving the most vulnerable behind and increasing economic security among the middle classes worldwide, Ban added, in a message delivered by Sha Zukang, Under-Secretary-General for Economic and Social Affairs. “No social or economic order is secure if it fails to benefit the majority of those who live under it,” he said.

“From this perspective, we all should have serious concerns about a system whose wealthiest 400 citizens command, as a group, more resources than its bottom billion. Yet we also need to beware of the risks of a severe backlash against globalization, which could significantly curtail the opportunities and benefits of a more closely integrated world.” The Secretary-General said this session of ECOSOC, especially its Development Cooperation Forum, should give new impetus to achieving economic growth, social development and environmental protection in an integrated fashion.

In a separate message to the Forum, delivered by Thomas Stelzer, Assistant Secretary-General for Policy Coordination and Inter-Agency Affairs, Mr. Ban voiced concern that development assistance is still provided inconsistently. “Some countries enjoy the attention of the international community, while others find it harder to attract funding. As a result, some countries receive less aid than would be expected on the basis of their needs or performance.” Aid is also spreads unevenly between sectors, he said, with agriculture experiencing a marked decline in aid in recent decades, “a particularly worrying trend” given the soaring prices of foods and other basic commodities. He noted that stronger mutual accountability was one way to develop a more balanced relationship between donor and receiver countries, and added that increasing South-South cooperation and private philanthropy were welcome moves. – ECOSOC’s high-level segment, which includes many round-table discussions, policy dialogues and debates, is scheduled to run until Thursday.

Whose partnership for whose development? NGO hearing before Global Compact Leaders Summit

On 5 and 6 July UN Secretary General Ban Ki-moon will chair the second "Global Compact Leaders Summit" at the United Nations in Geneva. According to the UN, it will be "the largest ever gathering convened by the United Nations on the issue of corporate citizenship". The Global Compact claims to bring corporations together with the UN to promote "responsible corporate citizenship" based on ten principles. But without any effective monitoring and enforcement provisions, the Global Compact fails to hold corporations accountable. On the day before the Global Compact Leaders Summit, an international group of NGOs and researchers invites to a hearing on corporate accountability in the UN system beyond the Global Compact. The hearing will assess the partnership approach of the Global Compact and propose alternatives for real corporate accountability. Speakers will include Daniel Mittler of Greenpeace International, Malik Ozden of CETIM, Elisabeth Strohscheidt of Misereor, Vicente Paolo Yu of the South Centre and Ann Zammit, an independent researcher and author of the book Development at Risk: Rethinking UN-Business Partnerships. Further information: Global Policy Forum Europe, Bertha-von-Suttner-Platz 13, D-53111 Bonn, phone +49-228-9650510, fax +49-228-9638206, europe@globalpolicy.org, www.globalpolicy.org