I’d like to have a Ferrari, but since I can’t afford it, I’m probably going to get a cheaper car when I leave this job. So therefore, we have to work hard with the Secretariat, with the other member states, to do what we must, what we can afford, but the whole budget process needs to be looked at to make it more rational, to make the presentation a single comprehensive budget so the members can make a determination.
—Zalmay Khalilzad, former US ambassador to the UN
There is no free lunch, not even at the United Nations. Each month the UN’s financial office sends out millions of dollars’ worth of checks to pay for staff salaries, computer services, electricity, technical consultants, housekeeping for its big New York City headquarters, and a thousand other things. When you add all these costs from all the members of the UN family, including the various agencies and committees, as well as peacekeeping costs, the total runs to many billions each year. Where does the money come from? Not from taxes. The UN is not a government, so it cannot levy taxes. The bulk of the dollars comes from the UN members themselves.
Think of the UN as a condo apartment building—we’ll call it Global Towers—located on prime real estate on the east side of Manhattan in New York City, with a breathtaking view of the cityscape and the East River. Periodically the condo owner-members (nation-states) meet to vote on setting a budget for the coming years, based on regular membership fees, voluntary contributions, and occasional special assessments. Discussion invariably focuses on how big the expense budget should be and how the costs should be allocated among the owners, who vary widely in wealth, outlook, and commitment to keeping the condominium safe, comfortable, and solvent.
As in any condo where the owners are well known to one another, the budget debate inevitably runs along ruts worn during decades of meetings, with occasional sharp exchanges when opinions clash. Something of this sort unfolds in the General Assembly’s Fifth Committee (Administrative and Budgetary) every three years as it deliberates on the size of the assessments that each country must contribute. That is when the General Assembly can really flex its muscles, because its decisions affect all parts of Global Towers, from the airy thirty-eighth-floor office of the secretary-general to the stuffy basement, where the building engineers make their daily rounds. It is estimated that the annual operating budgets of the Secretariat, other UN organs, peacekeeping operations, and the UN agencies, funds, and programs, excluding the World Bank and the International Monetary Fund, come to some $30 billion each year.
Membership in the UN comes with the obligation to help pay for its support—something that has never been questioned. Instead, the focus has been on the size of each member state’s contribution. Financial support takes three basic forms. First is the mandatory assessment for the general UN budget, also referred to as the “regular” or “administrative” budget, which funds the Secretariat and related bodies. There is also the mandatory assessment for the peacekeeping budget. In addition are the assessed contributions that member states make for specific UN agencies and organizations, such as the International Atomic Energy Agency (IAEA) and the World Health Organization (WHO). Second are voluntary donations to such UN programs as the United Nations Children’s Fund (UNICEF) or the World Food Program (WFP). And third are occasional special assessments, like the $2-plus billion that the members had to pay to renovate the New York City headquarters.
Discussions in the media often relate to the “regular budget,” which pays for activities, staff, and basic infrastructure but not peacekeeping. In 2013, the budgeted amount was slightly less than $2.6 billion. (The regular budget is for a two-year period, a biennium, so $2.6 billion is simply half of the $5.2 billion that the General Assembly approved when it voted on the budget.) The formulas for calculating a nation’s assessed contributions for the regular budget and the peacekeeping budget are based largely on the country’s share of the world economy. In other words, the rich pay more than the poor do. Nations with a low per-capita income get a discount, as do those with a high level of foreign debt. The United States, having the world’s largest economy by a wide margin, naturally pays the largest share, about 22 percent, and very poor nations pay a nominal amount. The poorest nations have to pay a minimum of about $25,000 annually for their UN dues.
The regular budget is the product of a complicated process designed to ensure that all interested parties have their say in how funds are obtained and spent. The secretary-general proposes a draft budget and gives it to the Advisory Committee on Administrative and Budgetary Questions (ACABQ) for review. The advisory committee consists of sixteen individuals nominated by their governments, usually including a US national, and elected by the General Assembly. The Committee for Program and Coordination (CPC), consisting of thirty-four experts elected by the General Assembly, reviews the program aspects of the budget. Unlike the advisory committee, in which the experts serve in their personal capacity, the program committee experts represent the views of their governments. The revised draft is sent to the General Assembly’s Fifth Committee for approval. The Fifth Committee makes a final adjustment and votes to approve the budget, which it then sends to the General Assembly for a vote by the full membership of the UN. That vote makes the document the official UN regular budget for the next biennium. Each country has the opportunity to suggest changes in the draft budget, but the changes may not necessarily be adopted.
Peacekeeping is treated separately from other budgets. The scale used to make peacekeeping assessments has ten levels of support, with the least-developed countries paying 10 percent of what they would have owed according to the assessment scale for the regular budget, and the five permanent Security Council members paying a surcharge of about 25 percent. The US share of peacekeeping costs is about 28 percent.
The UN’s agencies, commissions, and programs have their own budgets. Each director draws up a budget and sends it to the secretary-general, who incorporates the information into the overall UN budget, which is sent to the General Assembly’s Fifth Committee. Most agencies, commissions, and programs also raise funds independently from member states and other sources. When Mark Malloch-Brown was head of the United Nations Development Program (UNDP) he answered a query about his organization’s budget this way: “I call it $1.2 billion, and there are two other numbers which others use. One is $750 million, which is core contributions. I call it $1.2 billion because that’s core plus donor contributions to special trust funds for special issues. Some call it $2 billion because that includes what we call cofinancing, where developed countries kick in a huge volume of resources because they like us, in many cases, to spend their money for them. I count that out because for various reasons not dealt with it’s a little misleading. So I say $1.2 billion, pessimists say $750 million, the optimists say $2 billion or $2.1.” Is that perfectly clear?
One of the most surprising fiscal events at the UN was the large and rapid escalation of budgets between 2002 and 2011. For example, annual peacekeeping costs peaked at $3.5 billion in 1994, during the large-scale operations in the former Yugoslavia, dropped to $1.3 billion in 1997, and rose toward the $3 billion level in 2002. After that they climbed steeply as the United States and other Security Council members authorized the creation of more peacekeeping missions. The budget for 2012–13 was just over $7 billion.
The UN’s general, or regular, budget experienced a similar increase, from $2.5 billion for the 2000–2001 biennium, to $3.6 billion in 2004–5, $4.1 billion in 2006–7, and $5.2 billion in 2008–9. It peaked at $5.4 billion in 2010–11 before declining slightly to $5.2 billion in 2012–13. The increase occurred largely during the George W. Bush administration and was alarming to many. Former US ambassador John Bolton calls it “a breakdown of a twenty-year-long effort to rein in UN spending.”
Even these escalating budget figures are pretty small potatoes in today’s world of trillion-dollar economies. The UN once noted that “the budget for UN worldwide human rights activities is smaller than that of the Zürich Opera House.” That may be true, but not every member state can afford the cost of the Zürich Opera House, so questions often arise about how to allocate fiscal obligations.
Most discussions about excessive burdens have focused on some of the richest member states. The top fourteen nations, including the United States and Japan, paid a total of $1.9 billion, or nearly 80 percent of the 2012 general budget of $2.4 billion, leaving the remaining 179 member states to pay the balance of about 20 percent.
The United States and Japan, the largest contributors to the UN budgets, have each asked for downward adjustments in what they pay. As listed in table 9, the United States and Japan together paid $865 million, about 36 percent of the 2012 general budget. In FY 2010, the United States contributed some $7.691 billion to the UN family, including $2.648 billion to peacekeeping, and was a major donor to the World Food Program (36.3 percent of the agency’s budget) and the UN High Commissioner for Refugees (37.0 percent), to name just two agencies.
Table 9. Top fourteen funders of the UN regular budget, 2012
Member State |
Assessed Contribution (US$) |
United States |
$569,000,000 |
Japan |
$296,000,000 |
Germany |
$189,000,000 |
United Kingdom |
$156,000,000 |
France |
$145,000,000 |
Italy |
$118,000,000 |
Canada |
$76,000,000 |
China |
$75,000,000 |
Spain |
$75,000,000 |
Mexico |
$56,000,000 |
Republic of Korea |
$53,000,000 |
Australia |
$46,000,000 |
Netherlands |
$44,000,000 |
Brazil |
$38,000,000 |
Total |
$1,936,000,000 |
Source: Compiled from UN Secretariat, Assessment of Member States’ Contributions to the United Nations Regular Budget for 2012 (December 27, 2011).
Note: Total budget, US$2,412,000,000.
The United States has negotiated several reductions in its share of the general budget. For example, in 1974 the UN agreed to place a cap of 25 percent on the size of a member state’s assessment, effectively lowering the United States’ share in subsequent years. Another change came in 2001, when the General Assembly reduced the US share of the regular budget to a maximum of 22 percent and its share of peacekeeping costs from 31 percent to about 28 percent. Both reductions came at the urging of the US government in response to a law stipulating that the United States would pay nearly $1 billion in assessment arrears if the UN met certain conditions, such as a reduction in the assessment rate.
The Japanese government took another approach to trying to reduce its assessed share of the general budget. In 2006, it unsuccessfully proposed that the UN put a floor of 3 or 5 percent under the regular-budget contributions of the P5. In other words, a permanent member of the Security Council would have to pay an annual assessment of at least 3 or 5 percent of the total general budget. When the Japanese made this proposal, China was paying only 2 percent and Russia 1 percent of the general budget, compared with 19 percent for Japan and 22 percent for the United States. Raising the Chinese and Russian assessments would permit reductions in those of other nations, including Japan’s.
As a concession to some of the wealthier and more highly assessed members states, the assembly and its Fifth Committee began passing UN budgets by consensus in 1988. This was intended to give the wealthier states some leverage in the budget process. Additionally, the Japanese were able to negotiate reductions in their share of the general budget, from more than 19 percent in 2006 to roughly 16 percent in 2007, and then again to about 12 percent in 2010.
The G-77 and the NAM, blocs consisting largely of the less affluent member states, have voting power in the General Assembly beyond what one would expect based on their financial contributions to the UN, and the discrepancy has led to friction in the assembly. Complaints about process and equitable sharing of burdens have led some US foreign-policy experts and some critics in Congress to urge that the United States withhold funds for specific UN bodies that need reform or fail to meet US expectations. Former UN ambassador John Bolton is among those who would like to go even further. He proposes that the leading nations lobby for a fundamental revision in the nature of UN funding. “What we really need is not additional effort for marginal change but a major change in the way the whole UN is funded, to move toward voluntary contributions. That’s the only way to get people interested [in UN reform].” He accepts the need for the United States to take the lead but is sure that other donors, such as Japan, will welcome it. “They will fall in behind us,” he says, “but as usual at the UN we would have to be the ones who really press it.”
Fifth Committee members in informal negotiation during a meeting break, April 28, 2006. UN Photo / Mark Garten.
Ideally, each member state accepts its assessment as being appropriate and immediately sends a check to the UN for the full amount. Reality is more complicated. Even for routine and predictable budgets, like the regular budget, the UN has a hard time getting everyone to pay fully and on time. Some member states delay their payments for various reasons, often unrelated to their ability to pay, while others (like the United States) pay on their own schedule, depending on when their legislature or national assembly votes the funds.
The Charter (Article 19) permits the UN to penalize a member that is two years in arrears by taking away its vote in the General Assembly. This has been done infrequently, as a last resort. The United States has found itself in danger of penalization during years when it was withholding its dues or paying them slowly to express its unhappiness with the UN. In fact, of all member states the United States typically has the largest payments in arrears to the general and peacekeeping budgets. (It also makes the largest contributions to the UN.) For 2007 the United States accounted for about half of all arrears for the combined regular and peacekeeping budgets. By 2010 the US arrears, amounting to some $1.2 billion, constituted only a quarter of payments owed by all member states because the global financial crisis of 2008 had led to late payments by an especially large number of member states. The Obama administration worked with Congress to authorize payment of arrears in late 2010 and pledged to pay the annual assessments “in full and on time.” The United States has done so and as of 2014 was in good standing at the world body.
The discussions about budget assessments and arrears have generated suggestions about possible fixes, including a global tax on currency transactions and even one on international air travel, but they haven’t gone beyond talk. One observer, Shepard Forman of New York University’s Center on International Cooperation, has offered his own solution. “I once suggested rather facetiously,” he says, “that there should be a reverse scale of assessments in which countries that act badly and therefore cost the UN more . . . should have to pay more dues.” Getting those nations to pay, however, might be a true “mission impossible.”