UN financial crisis Current Affairs - 2020

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UN increases budget; includes funds for war crime probes

The United Nations has adopted 3.07 billion USD budget on December 27, 2019. The organization for the first time included investigation of war crimes in Myanmar and Syria in its fund allocation

Highlights

The budget proposal for the year 2020 is slightly greater than that of 2019. In 2019, UN budget was 2.9 billion USD. The increase in the budget is mainly due to inflation, additional missions and exchange rate adjustments.

This year the investigation of crimes in Syria, Myanmar has been made as compulsory contributions to the member countries for the first time.

It is to be noted that United Nations faced severe Financial crisis in October 2019. However, it recovered itself after the major contributors like US, China paid their dues.

Expenditure of the UN

The United Nations has categorized its spending in to 5 general groups namely. The top most preference is given to humanitarian assistance (34%). The other categories include development assistance (24%), peacekeeping operations (19%), knowledge-creation operations (16%) and technical cooperation (7%).

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UN Financial Crisis

On October 9, 2019, the United Nations called its member states to pay their outstanding dues. As the organization is facing severe financial crisis, there may not be enough funds to pay staff salaries next month. According to the United Nations, out of 193 members, 129 had paid their regular budget. The regular budget for the UN for a year is 5.4 billion USD. This is separate from the peace keeping budget of 6.3 billion USD.

India paid its regular contributions of 230 million USD on January 30, 2019 and India was one of the few countries to pay on time.

The Scenario

There are around 37,000 employees in the UN secretariat. The member states have so far paid only 70% of total amount needed till September 2019. This has created a cash shortage of 280 million USD. In order tackle the crisis the UN is reducing services, postponing conferences and meetings and restricting official travel.

Role of US in UN funding

The US funding covers 22% of UN regular budget. It is more than any other nation. The US is to obligated to contribute 674 million USD for the budget 2018 – 19. Cumulatively, since the previous year, US owes 1.055 billion USD.

US already has its outstanding dues from previous year as well. A country that fails to pay its contributions for 2 consecutive years loses its right to vote in the General Assembly.

Under Trump administration the US had been withdrawing from number of international commitments lately. Soon US is also planning to exit the “Open Skies treaty”. According to the treaty, it allows 34 member states to conduct unarmed surveillance flights over one another’s territories. It was signed in 1992.

Other Contributors of UN Funding

Next USA, China is the largest contributor paying 12% of UN budget. This is 15 times to what India pays. Japan is the third largest contributor with paying 3% of UN funding. Following Japan there are other European countries that contribute to the UN funding.

The real problem

UN was established to provide security and prevent war situations in the world. Slowly it gained its momentum towards providing social and economic security to the world nations. The security decisions in the UN are controlled by the 5 major permanent members of the UN namely USA, China, UK, France and Russia. They are the major contributors of the funding as well.

The UN wants its member nations to pay their contributions by the end of January every year. None of these contributors paid on time this year. Why? The countries want to push their individual strategic interests. For instance, the US voted for declaring Jerusalem as Israel’s capital while the resolution was opposed by its own allies

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