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UN Week – 10/3/2011

October 9, 2011

This blog entry is written by members of our blogging community and expresses those experts’ views alone.

by John and Douglas Carey, Editors,  www.unweek.blogspot.com

Contents of this issue: US demands UN budget cuts.

          On September 29th, US Ambassador Joseph M. Torsella addressed the General Assembly’s  5th Committee on the budget proposed for the years 2012 and 2013. His calls for budget cuts seemed at times to echo similar calls inWashington. Here is part of what he told the authors of the draft budget:

“As the General Assembly body in charge of UN management and administration, the Fifth Committee should itself model the management behavior we expect from the rest of the United Nations. We sometimes cloak our discussions here in code words and diplomatic euphemisms, but in keeping with your call this morning for a new approach to our work, I would like to offer today, on behalf of the United States, some very frank and plainspoken observations on the 2012-13 budget proposal.

“We meet at a time of severe – and worldwide – economic challenge. The General Debate that has just concluded made it clear: Member States around the world are under financial strain. This is not a phenomenon of one or even several donor nations, but a global reality, north and south, east and west. From Asia to Europe, from Africa to Latin America and North America, heads of state spoke of the enduring impact of the global financial crisis. That crisis has made financial resources ever more scarce, made efficient outcomes ever more important, and made leaders – including every one of us in this room today – ever more accountable to the citizens we represent for the fiscal decisions we make. * * *

 “That is the simple reality we face, all of us: in a time of scarce resources, the United Nations cannot afford business as usual. But that, unfortunately, is exactly what is represented in too much of the budget submitted to us. * * *

 “First, let’s be clear. A reduction in planned expenses – from budget outline to budget proposal – is not what any family, government or business around the world would recognize as a real belt-tightening ‘cut.’ It is simply loosening our belt a little less than we originally planned. So the relevant measure of our fiscal discipline is whether we will actually spend less in 2012-13 than we did in 2010-11. And this budget fails that test.

“There are some cuts around the edges, for example, in conference services, the abolition of some vacant posts, and providing summary records to Member States. These are historic firsts, and we wholeheartedly support those initiatives. But there are too few economy measures in this budget that are entirely realistic, financially meaningful, and clearly sustainable. Of the 37 budget sections before the Committee, reductions are proposed for 18…but 19 either increase (15) or remain unchanged (4). The key driver of costs for future years, in any organization, is personnel. Yet this budget proposes abolishing just 44 net posts from the organization’s 10,307 person workforce. That represents a 0.4% decrease – less than one percent – from current employee levels.

“And the onslaught of add-ons which will inevitably be presented during the session – potentially $6 million for Information Communication Technology, $9 million for Administration of Justice, $4 million for the Strategic Heritage Plan renovations in Geneva – as well as the program budget implications emanating from the Economic and Social session in July, a preliminary re-costing estimate of $147 million, and 15 reports still to be considered, could result in an alarming total 2012-13 budget of $5.5 billion.

“Considered against the current 2010-11 biennial total of $5.367 billion, that is not a cut. That is in fact a more than 2 percent increase and this does not take into account potential add-ons in the second year of the budget. That does not represent a break from ‘business as usual,’ but rather a continuation of it.

“For a decade now, the United Nations regular budget has grown dramatically, relentlessly, and exponentially: from $2.6 billion in 2001-2002, to $5.4 billion in 2010-2011. This growth has significantly outpaced the growth of the budgets of almost all the Member States that comprise the UN. I am not drawing a comparison between the United Nations and theUnited States, but between the United Nations and the rest of the world.

“It’s true that some of this growth can be justified by new mandates that we all proudly support. But it’s also true that those mandates do not account for the disturbingly persistent ten-year trend of increases in the UN budget. * * *

 “So what is behind this trend? Several budget lines deserve our attention this session: general operating expenses, travel of staff, and grants and contributions have all have played a role, and should be intensely scrutinized. But as I noted earlier, in any organization, it is personnel that is the largest and most important driver of long-term costs, and the UN is no exception: posts accounted for $2.4 billion in costs in 2010-11, a huge increase from ten years ago, when the total costs was a full $1 billion less ($1.4 billion in 2000 – 2001). When we look deeper, we see two troubling facts behind this increase. First, the number of posts themselves has increased, from 8,989 in 2000-2001 to 10,307 in 2010-2011. But second, the cost of UN posts – the total compensation to employees – has grown by 70 percent while the number of posts has grown by only 15 percent.

“Focus for a moment on just one figure: according to the proposed budget, the average total compensation for a UN staff member – simply taking the total proposed cost of posts divided by the total number of posts, not including General Temporary Assistance positions – is $238,000 biannually. * * * How does management intend to bring these numbers and costs back into line? And why do we, as Member States, tolerate a budget process that tells us, how many meetings are scheduled or guidance materials published in a given department, but does not tell us, for example, how much the UN spends on health care benefits for its employees?

“We therefore renew our objection, Mr. Chairman, to receiving the UN budget proposal in a piecemeal fashion, and with too little real financial analysis. And we call for a comprehensive makeover to streamline budgets and the budget process for transparency, flexibility, managerial accounta-bility, and analyzable, actionable information.

“Mr. Chairman, I am well aware that the sort of business-like focus on efficiency and economy that I am suggesting today has sometimes been heard in this Committee as political code in this committee for aUnited Statesperspective. And, yes, my government does have that perspective: we believe it is our obligation to our taxpayers to do more with less in Washing-ton and here at the UN. But doing more with less is not just the American perspective, or just the developed world perspective. The economic challen-ges of our time that I began with have made it a global perspective. You don’t need to take my word for it; listen to voices from capitals around the world:

“In Brasilia,Brazil’s Planning Minister Miriam Belchior says ‘finding ways to do more with fewer resources will be the government’s new mantra.’ FromMaseru, Lesotho’s Finance Minister says ‘the time has come when we must all learn to do more with less for the sake of our country.’ And inPretoria the deputy prime minister declares ‘we must do more with less. The focus has to be on value for money.’

“When we look to our home countries, it’s not just words about efficiency that we find: it’s evidence – clear, convincing, relevant evidence – that public organizations like the UN can achieve more with less. That taking an entrepreneurial approach can save money and improve results at the same time. Consider just these few examples:

“InScotland, a multi-year efficiency program emphasizing greater use of shared services and procurement improvements has so far saved the government $2.3 billion pounds. In 2010, the Mexican Government instituted structural reform of Ministries, salary reductions, hiring freezes, and other measures amounting to $66 billion pesos in savings.Botswanais providing more medical services to more people…while reducing the costs of certain procedures by as much as 50%. And Singapore has embraced eGovernment by creating a single online platform for all public services –improving services, increasing access, and leveraging economies of scale all at the same time.

“If each of us looks to our capitals, our own private sectors, indeed our personal experiences, we find proof that the rhetorical choices we pose in the Fifth Committee are often false ones. Colleagues, we know that money does not equal mandates, and resources do not equal results. It is entirely possible for any organization – including the UN – to achieve its mission with fewer resources. The issue isn’t simply how much money we allocate to each department or program, it is whether each and every dollar, yen or euro, and every yuan, peso, real, and rand is being used in the most effective, efficient, and businesslike way. * * *

“Finally, Mr. Chairman, as we consider the urgent need to find savings in the UN budget, let us not to do so abstractly. Let us remember that every savings we can achieve has real-world implications for the people we were all sent here to represent. $100,000 represents just .000001 percent of the UN’s regular budget; that’s the kind of sum sometimes treated as a rounding error in a $5 billion budget. But there are other, better ways to think about that $100,000. $100,000 also represents the average federal taxes paid by 16 hard-working American families in one year. $100,000 could provide over 130,000 high-energy biscuits for the malnourished children helped by UNICEF. It could test over 66,000 children for malaria, equip hospitals with over 1,300 basic surgical kits, or provide 100,000 waterproof sleeping mats for children who have lost their homes to disaster.

“TheUnited States, therefore, calls for a comprehensive, department-by-department, line-by-line, review of this budget, with the aim of achieving the Secretary General’s original goal: a real, meaningful, and sustainable reduction in expenses from the last biennium, and the first steps in a new course of fiscal restraint and prudence at the UN. The experience of governments, businesses and families in each of our countries proves that it can be done. And the duty that each of us has to our taxpayers demands that we do it.”

          UN budgets are adopted by the General Assembly, where there is no veto. And the Assembly allocates contributions among the Member States. So it’s rather like a local government that can adopt a budget and then simply pass the costs along to taxpayers by setting a tax rate high enough to bring in the necessary revenue to cover expenses.

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