Sunday Times 2
When the UN Offered a $80,000 golden hand shake to quit a cash-strapped organisation
UNITED NATIONS (IPS) – When the United Nations was struggling to cope with a cash crisis back in April 1996, one of the many drastic measures it undertook was to cut down on its staff.
So, it took the path of corporate America, and ironically, for a cash-strapped institution, it offered a “golden handshake”—a severance pay of about $80,000 dollars each — to those who would voluntarily leave the near-bankrupt Organization.
And as immortalized in the title of Woody Allen’s 1969 Hollywood comedy hit: about 400 staffers decided to “take the money and run”.
Fast forward to October 2020.
In today’s context, says one Asian diplomat, the UN is not in a position to offer such hefty golden handshakes even to some of the highest-ranking officials –if they do volunteer to quit.
A “liquidity crisis” triggered by late or non-payment of assessed contributions by 61 member states—amounting to a staggering $5.1 billion shortfall — is now threatening to undermine both the mandate and world-wide operations of the Organization.
As of 2 November 2020, only 132 Member States (out of 193), have paid their regular budget assessments in full, according to the latest UN figures.
https://www.un.org/en/ga/contributions/honourroll.shtml
The shortfall is also attributed to the destabilization of the global economy due to the coronavirus pandemic.
The warnings about the current cash crisis have come from three directions: from Secretary-General Antonio Guterres; from the President of the General Assembly Volkan Bozkir; and from the 134-member Group of 77, the largest single coalition of developing countries in the world body.
When he introduced a proposed programme budget for 2021 in mid-October, Guterres warned that “the liquidity crisis has not abated and severely hampers the Organization’s ability to fulfil its obligations to the people we serve”.
“At this crucial time for our work, it bears repeating that the Organization can only deliver on its mandates if Member States meet their financial obligations in full and on time”, he declared.
The responsibility for day-to-day operations, currently under threat, falls squarely on the shoulders of an estimated global staff of about 32,417, according to the latest figures from the Chief Executives Board for Coordination, while the Secretariat staff in New York is estimated at over 3,000.
Prisca Chaoui, Executive Secretary of the 3,500-strong Staff Coordinating Council at the UN Office at Geneva (UNOG), told IPS: “Indeed management informed us they won’t allow extensions of contracts for more than two years, whereas the current rules allow for an extension up to 5 years.”
They have clearly indicated they wanted to reduce the liability of the organization, she said, pointing out there is a current “recruitment freeze which means nobody can be recruited and nobody can be promoted because of the liquidity crisis.”
All this is due to the fact that member states are facing economic turmoil, and it goes without saying that paying the UN won’t be their priority, she argued.
She also complained: “We regret that the budget cycle has moved from two years to one year making the organization negotiate the budget on a yearly basis. Before, we had two-year budget cycles, and this was more secure than the current situation, whereby the budget has to be negotiated every year”.
“Guy Candusso, a former First Vice-President of the New York UN Staff Union, told IPS “with all the uncertainty in the world now, I am not optimistic in the near term.”
In the long term, he said, the financial crisis will most likely work itself out. “In the meantime, I believe all staff will suffer and bear the burden of the cuts when the money runs out,” he noted.
When he introduced the “buy-out” early retirement programme back in 1996, Joseph Connor, Under-Secretary-General for Administration and Management, said “there are too many people in this Organization doing the same job for 20 years.”
Connors told reporters the United Nations had set aside about 15 million dollars for the buyout programme, under which the Secretariat had said goodbye to 400 employees. With more staffers expected to leave, he said, another 15 million dollars would be sought through savings in the budget to allow for “early separation.”
The severance pay, averaging about 80,000 dollars each, was based mostly on the number of years put in by staffers.
Asked whether he was concerned that some of the best staffers might be the ones accepting voluntary severance, Connor said that in such cases, then Secretary-General Boutros Boutros-Ghali would use his discretion and reject requests, as he has done in the past.
Speaking on behalf of the Group of 77 and China, Megayla Austin of Guyana told the UN’s Administrative and Budgetary Committee (also known as the Fifth Committee) last month, “the G-77 notes the efforts of Member States in fulfilling their financial obligations while overcoming the economic and financial difficulties during the COVID-19 pandemic”. However, “the Group also notes that the total amount of outstanding contributions and peacekeeping assessments exceeds 5.1 billion US dollars, as of September 30, with the majority from one single Member State”.
That single member state has been identified as the United States, the biggest single contributor to the UN budget.
Volkan Bozkir, President of the 75th Session of the General Assembly said October 28: “I could not address you today without touching on the important issue of the UN’s financial situation”.
The Secretary-General has, “on several occasions, expressed to me concern about the financial situation of the UN and its ability to meet its ongoing financial obligations. I share these concerns and urge all Member States to pay their dues in full and on time”.
During the high-level sessions in September, he pointed out, the message from world leaders was clear: “International cooperation and effective multilateral action is essential to confront the pandemic. So, the United Nations needs a predictable financial basis to do that.”