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  • In the U.N. Budget, Personnel Costs Rule

    Earlier this year, the Obama Administration trumpeted the recently passed United Nations regular budget as a triumph of fiscal discipline. To some degree, it is justified in that claim. The initial appropriations for the 2012–2013 budget (at $5.15 billion) are $263 million lower than the final expenditures for the 2010–2011 budget, and nearly $44 million lower than the 2012–2013 budget originally proposed by Secretary-General Ban Ki-moon. This is only the third time since 1960 that the initial U.N. regular budget appropriation was lower than the final appropriation for the previous budget.

    Instilling some budgetary constraint at the U.N. is no small feat, especially considering that the six two-year budgets between 2000 and 2011 saw the U.N. regular budget grow by an astounding 114 percent over that period!

    As I have explained, however, there are numerous reasons to doubt that these hard-fought cuts to the U.N. regular budget will remain in place. Specifically, the budget “cut” was not, for the most part, reached through decisions to reduce the budget in a manner that would have a lasting impact—that is, permanently eliminating mandates, programs, or other activities that would lead to a lower baseline in future U.N. budget negotiations.

    Critically, the budget also did not adopt any reductions in permanent staff or implement a reduction or freeze in salaries or benefits for U.N. staff. On the contrary, the 3 percent raise approved for U.N. staff last summer—over the objections of the U.S.—has not been rescinded. Moreover, despite the fact that the Secretary-General proposed eliminating 44 permanent posts in his budget proposal, the 2012–2013 budget actually increased the total number of permanent posts by more than a score as compared to the previous budget. There was a net reduction in “General Temporary Assistance” or GTA positions, but these positions are specifically intended to be short-term and do not have the long-term budgetary implications of permanent positions.

    In short, the latest U.N. regular budget, while on the surface smaller than the previous budget, avoided entirely the types of programmatic and structural adjustments that would help constrain future growth in the budget. The critical failure to arrest growth in U.N. employment, salaries, and benefits is especially problematic, because the U.N.’s Advisory Committee on Administrative and Budgetary Questions (ACABQ) has calculated that 74 cents out of every dollar the United Nations spends is related to personnel costs.

    The bottom line is that until and unless there is a significant reduction in permanent U.N. posts (which could also be achieved by eliminating the many outdated, duplicative, or ineffective U.N. mandates that require staff to fulfill their pointless purposes) or there is a significant reduction in staff compensation and related costs, real and lasting reductions in the U.N. regular budget will remain out of reach.

    Posted in Economics [slideshow_deploy]

    One Response to In the U.N. Budget, Personnel Costs Rule

    1. Randy says:

      Why the helldo we still belong to the UN. It doesn’t share our values. Most of the nations are either a bunch of pansies, or the are trying to push their self serving agendas on us, at our expense.

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