December 23, 2005

UN reaches budget deal clearing way for reforms

By Irwin Arieff

UNITED NATIONS (Reuters) - Rich and developing nations
bridged their differences on Friday to reach a last-minute
agreement on a 2006 budget that ended a deadlock over future
U.N. management reforms.

Under the deal, concluded after months of arduous
negotiations, U.N. spending will be capped at $950 million --
enough only for the first six months of the year -- until
Secretary-General Kofi Annan concludes that enough reforms have
been adopted to release funding for the second half of 2006.

The United States and Britain, current president of the
25-member European Union, each claimed credit for the deal.

U.S. Ambassador John Bolton called the pact a victory for
the United States, saying that Washington "obtained something
it had been striving for for the last three months -- clear
linkage between management reform and the budget process at the
United Nations."

Moments later, British Ambassador Emyr Jones Parry told
reporters that for "95 percent of the time, it has been us (the
EU) who have been building a bridge with the G-77," the U.N.
grouping representing 133 developing nations.

"Both parties came to where the EU wanted to be," Jones
Parry said.

But Jamaican Ambassador Stafford Neil, representing the
G-77, said developing nations had fought hard against the
spending cap. But he said in the end they had reluctantly gone
along after receiving assurances that the tactic was a one-time
measure that would not be repeated in future years.

Neil also insisted there was no linkage in the deal between
implementing reforms and U.N. funding for the second half of
2006. The additional funding would depend on Annan's
recommendation, he said.

But Bolton insisted the linkage, though not in writing,
would be clear if reforms were not enacted and U.N. funding ran

Negotiators had been working against a midnight December 31
deadline for the 191-member General Assembly to either approve
a budget plan or trigger a shutdown of the United Nations.

The assembly was standing by for a vote to be taken late on
Friday before the Christmas-New Year holiday.


Rich countries and Annan have been pushing hard for
management reforms following extensive allegations of
corruption and mismanagement at the world body, particularly in
its handling of the oil-for-food program for Iraq.

Included among the management reforms that the General
Assembly must approve are new international accounting
standards, a review of programs older than five years and a
beefed-up internal watchdog office.

But with a two-year budget in the works, the United States,
Japan, the European Union and others wanted to ensure it left
room for reform decisions that would not be made until early
next year.

But poor nations dug in their heels, fearing the changes
would dilute their influence over U.N. programs and priorities
by weakening the role of the General Assembly, where each
member has a vote and no nation has a veto. Several argued that
the dues they paid represented a large sum for their country.

Before the agreement was reached, Bolton said the plan for
a six-month spending cap was supported by nations whose dues
payments covered nearly 85 percent of the regular U.N. budget.

Some U.S. lawmakers have threatened to slash Washington's
U.N. dues payments, which alone make up nearly a quarter of the
regular budget, if the reforms are not done.

The United States and Japan together pay more than 40
percent of the U.N. budget, although both countries pay late.
The 25 European Union nations pay close to 40 percent.