Thirteen UN peace-keeping operations were established between the years 1945 and 1987; fourteen others were newly established since 1988. The costs and unpaid arrears of these operations have been increasing rapidly. In 1992, the costs aggregated to about 1.4 billion. The unpaid arrears reached some 662 million as of 31 October 1992. In addition, the unpaid contributions for the regular budget up to now amount to some 576 million.
To respond to this serious financial crisis, former Secretary-General Javier Pérez de Cuéllar made the following proposals to the General Assembly in November 1991:
(a) Charging interest on the amounts of assessed contributions that are not paid on time;
(b) Suspending certain financial regulations of the United Nations to permit the retention of budgetary surpluses;
(c) Increasing the Working Capital Fund to a level of 250 million;
(d) Establishment of a temporary Peace-keeping Reserve Fund, at a level of 50 million, to meet initial expenses of peace-keeping operations pending receipt of assessed contributions;
(e) Authorization to the Secretary-General to borrow commercially, should other sources of cash be inadequate;
(f) Establishment of a United Nations peace endowment fund, with an initial target of 1 billion. The fund would be created by a combination of assessed and voluntary contributions, with the latter being sought from Governments and the private sector, as well as individuals. Once the fund reached its target level, the proceeds from the investments of its principal would be used to finance the initial costs of authorized peace-keeping operations, other conflict-resolution measures and related activities.
In addition to these, Secretary-General Boutros Boutros-Ghali recommended the following in June 1992.
(g) Immediate establishment of a revolving peace-keeping reserve fund of 50 million;
(h) Agreement that one third of the estimated cost of each new peace-keeping operation be appropriated by the General Assembly as soon as the Security Council decides to establish the operation;
(i) Acknowledgement by Member States that, under exceptional circumstances, political and operatioal considerations may make it necessary for the Secretary-General to employ his authority to place contracts without competitive bidding.
To charge interest in accordance with proposal (a) will not have a marked effect on developing countries under heavy external debt burdens. Proposals (b), (d) and (g) have already been implemented. The G. A. established the peace-keeping reserve fund of 150 million in December 1992. Its resources are budgetary surpluses. Proposal (c) has not yet been implemented, but it will be easy to get an agreement. Proposal (e) is not so desirable, because the UN will be burdened with external debts in the long run. Proposal (h) is not desirable as well, because the power of the G. A. to “consider and approve the budget” (UN Charter, Art. 17 (1)) will be violated. To implememt proposal (i) will have little effect, because to place contracts without competitive bidding has already been common in the UN. Proposal (f) is a long-term one. To implement this is essencial for UN to secure its financial resources.
In addition to these, the author recommends as follows:
(a) To permit developing countries to pay contributions in kind in place of in cash.
(b) To secure its financial resources, the UN should seek to make profits by commerce after the example of the UNICEF.
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