Financial Crisis and United Nations

Financial Crisis and United Nations

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The world leaders know that UN is the only show in the town, only multilateral platform to address the global and regional concerns. UN is indispensible when it comes to handling multitude of crisis that are interlinked. Interview given by Rajendra Shende, Chairman TERRE Policy Centre to a newspaper in India, 2014.

 Q: How economic meltdown & recession does affect the developmental activities carried out by the UN worldwide?

 United Nations is what 197 Countries- the member states of United Nations- make of it. Countries are the members of United Nations As the countries around the globe face the financial crisis, United Nations by the virtue of its constitution and its dependence on the Governments around the world, cannot be immune to what is happening around.

But UN is now well-experienced and matured organization for dealing with the crisis of any kind, leave alone economic crisis. It may not have autonomy to act as ‘fire department’ when fire breaks out. This is because the member countries have to take collective decision to deal with the crisis, and the collective decisions, as we know, may not be prompt. It may come after assessing the situation, holding challenging consultations, providing political and other diplomatic options, political haggling and then taking well-balanced approach, after possible consensus to deal with the crisis . Such process has been the hallmark of the United Nations. In the past there have been hasty and unilateral actions resulting into enormous damage to the people, property and world’s peace, stability and security. And above all, UN also have a legacy of power in the hands of few to ‘veto’ any seeming consensus.

The global financial crisis would definitely impact the UN operations. For example it could have a “terrible” impact on humanitarian efforts around the world as many countries contributing the finances to UN would focus on their own economic woes.

UN Secretary General Ban Ki-moon has gone on the record that the worsening financial crisis could seriously impact on the UN’s vital goals and programmes particularly meeting Millennium Development Goals –MDGs by 2015 ; as decided by UN General Assembly in year 2000. But again the actions on MDGs are to be taken by the member-countries.

It is important to keep in the mind that it is not only financial crisis that is facing the world today. Mr. Ban Ki Moon n has stated that we are facing multitude of crisis: food crisis, energy crisis, climate change crisis, environmental degradation crisis, terrorism as well as crisis of faith. Financial crisis is just a sub set of this complex tangle of multiple crises. Many believe that in fact it is consequences of other crisis.

It is just media’s s perception of financial crisis that overshadows other crisis. But let us not forget that what melt down the humanity is facing today due to the threat of climate change is far more frightening than the present financial melt down.

Q: Whether these UN activities are largely funded by US? If yes, then what is current situation?

 The funding for the United Nations system is sum of funding for the running of the United Nations offices, for peace keeping forces in more than 25 countries and for the programmes and activities related to development, food-supply , education, culture, children, health, environment , refugees, international court of justice, disarmament, atomic energy and others. The funding is provided by the member countries and is based on two track approach i.e. assessed scale and voluntary contributions. Assessed scale in turn is based on the ratios related to GDP of the contributing country and the voluntary contribution is based on the wish of the member countries. It is true that as per scale of assessment USA pays more than any other country and is about 22% of the total funding. Even in voluntary contributions to UN, USA tops the list. For example, out of total UN annual budget of about US$ 5 billion for the regular and peace keeping efforts budget, which is mix of assessed and voluntary contributions, more than US$ 1.5 billion would be from USA.

To take another example of one of the specialized UN fund for the environment called as Multilateral Fund for the Protection of the Ozone layer. This fund is over and above the the UN’s regular budget and peace keeping expenses. It is managed by group of countries equally divided between developed and developing countries as per the international UN agreement of the Montreal Protocol. Out of total annual budget of this fund of about US$ 160 million, nearly US$ 35 million comes from USA.

Taking yet another example, USA is the largest donor to the UN High Commission for the Refugees. It gave more than $1 billion in 2013 as compared to the European Commission at around $220 million.

The total present budget for all UN operations including the regular budget, peacekeeping, programmes and activities related to development, environment, health, food etc would be around US$ 20 billion. One can say that nearly half of it goes for the development (including health, food etc) related activities, projects and programmes.

Q: Could you please describe the role of UN in crisis situation?  How it affects the work related to Ozone layer and other environmental projects carried out by UNEP? (If possible in figures also)

 As said before the financial crisis is not the only crisis facing the world today. UN was established in the aftermath of a devastating war, to help stabilize international relations and give peace a more secure foundation. Amid the threat of terrorism, and seemingly endless conflicts in the regions peacekeeping have become overriding concerns of UN. But in 21st century, UN has become more than just conflict resolution and peace-keeping agency. Poverty reduction, environmental protection, human rights, health, education, agriculture development, advancement of women, peaceful use of energy, workers’ rights private sector engagement, are some of the activities undertaken by UN globally and regionally. The list of such activities is long.

Thus countries are likely to make sure that UN does not get bogged down by the financial crisis. Though the impacts of the financial crisis would also affect UN operations, it is unlikely that countries would let UN drift due to non-availability of financial resources because the stakes are very high. The world leaders know that UN is the only show in the town, only multilateral platform to address the global and regional concerns. UN is indispensible when it comes to handling multitude of crisis that is interlinked.

The role of UN in situation of financial crisis is to keep sailing the ship on the high sea. The risks to the ship trapped in the storm come from many sides. And it is important that world leaders are constantly reminded of the short term and long term threats. United Nations facilitative diplomacy and coordination is already producing good results. It can do better.

It will be inconceivable if in a world where people are spending hundreds of billions, if not trillions, of dollars to rescue banks, the same determination will not be shown to rescue human lives.

 In United Nations Climate change meeting in Warsaw in 2013, it was agreed to strengthen Adaptation Fund launched in 2008 , when the financial crisis was deepening, for the vulnerable countries. The developed countries have already promised USD 10 billion per year till 2012 and then gradually increasing to USD 100 Billion as new and additional funding for the climate change mitigation and adaptation. The most important recognition seems to be : that climate change cannot wait a resolution of the economic crisis. Surely coming months would see more ‘bail out’ by the developed countries on climate change for the benefit of poorer countries than just financial ‘bail out ‘by the developed countries to auto and financial sector.

On 21st November, another United Nations meeting for the protection of Ozone Layer agreed to next three year budget of nearly half a billion to be paid by the developed countries for the benefit of the developing countries to continue implementation of the Montreal Protocol for eliminating production and consumption of remaining ozone depleting chemicals.

All these developments clearly show that developed countries are not viewing the financial melt down as major barrier to continue their long term efforts to save the planet from environmental crisis. Melt down of the Antarctic continental prima frost is not being forgotten in the milieu of the economic meltdown!

The developed countries have well understood that today’s globalised world is connected by the business and also by the people. Not only the cash rich countries like China and Middle East should be kept on the their growth path but the markets of the poorer developing countries should also be nurtured for the two way trade. Such nurturing can happen only if the UN’s developmental efforts continue and strengthen.

Already, G20 summit in the wake of financial crisis, brought for the first time involvement of India, China and Brazil and other developing countries in talks on financial crisis convened by the European Commission and President Bush This has demonstrated that ‘ multilateralism’ is gaining speed.

In fact global coordinated response to the financial crisis can only put the development process on track as stated by by UN Secretary General Ban Ki Moon.

While short-term impacts of the economic crisis would be visible every where, UN would remain the only agency that would be able to build the bridges among the nations to tide over the crisis. UN reforms may even be the spin offs of financial crisis. The major economies may even be able to find the permanent seat in the Security Council as a result of the financial crisis. Adversity may turn into opportunity for many of the UN operations.

Q: Your opinion about the current Secretary General?

One of the major accomplishments of Mr. Ban Ki Moon has been putting climate change agenda on top of the table of the world leaders. He successfully put forward that climate change is not just an environmental issue; it is issue of peace and security of the world for which United Nations Principles are dedicated to.

One of the first missions that new Secretary General normally undertakes is to political hot-spots. The very first mission that Mr. Ban Ki Moon undertook when he took over as SG was to Antarctica-a no man’s land.

Antarctica is home for 90% of Earth’s ice. What UNSG, doing there, clad in thick clothes, was surveying the melting ice in Antarctica along with his newly- created climate change team? It was the first visit by any Secretary General to this ice-clad continent. Mr. Ban Ki-Moon’s visit to Antarctica highlighted the severity of impending global catastrophe due to global warming. The melting ice and thermal expansion of the sea due to rise in Earth’s temperature is making the sea level rise, potentially inundating costal areas where millions of people live. The result could lead to an out flux of ‘climate change refugees’. Millions of the refugees would start moving away from coastal areas. Remember the scenes of the Bangladesh refugees in the 1970s? Kosovo refugees in the 1990s? Of Afghanistan in 2000s? And recently of Darfur? These influxes were not related to global warming, but surges from vulnerable countries have already begun.

The Secretary General was, in fact, visiting the place that could trigger a future conflict zones resulting in “environmental refugee camps”. His visit to Antarctica signified the far-reaching impacts to global peace and security. He was giving message that if we take action, we could prevent disastrous consequences. Simply put, climate change has the potential to destabilise peace on our planet.

Food crisis no longer makes the head line, that does not mean the problem is solved but the consultative and policy relevant process that UN started , has led many governments to reform the decade old archaic agricultural policies and has started bilateral and regional cooperation to look at the food crisis in integrated way.

UN SG Ban Ki moon has proved that he is not only good in ‘building the bridges’ to create useful interaction among countries, but he can also strengthen UN as a model institution. His ongoing efforts to make UN Building in New York as ‘carbon neutral’ by use of climate friendly and renewable technology is testimony of his approach of ‘ leading by examples’. He has launched ‘Sustainable UN’ programme called ‘SUN” to ensure that UN operations are climate friendly. The ‘paperless’ UN meetings is now becoming norm. Laptop computers are now new tools of diplomacy in UN meetings. United Nation is making difference!



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