Burden Sharing in Support of the United Nations
I. Orders of Magnitudes
The United Nations encompasses a wide variety of organizations, some of which have specialized sources of finance. The focus in this paper is on the financing of the Central Secretariat. For expository purposes, and also to allow for some future inflation creep, a "round" sum, convenient to work with, of approximately $1.5 billion is targeted in the paper for the annual UN support. Presently, however, the total sum is less than $1.5 billion; precisely, in 1997 the principles of assessment are being considered for raising a total sum of $1.248 billion. Nonetheless, for our purpose of illustrating various principles of assessment, it is convenient to work with the rounded figure of $1.5 billion.
Additional funds are needed for Peacekeeping Operations (PKO), and these have recently swollen to $3.5 billion annually, but are budgeted at a smaller amount for 1997. These expenses are hardly fixed; they depend on the prevalence of world disorder and conflict. They also depend on costs of items of conventional military support. Technical progress and size or location of areas of conflict are not static, but recent disturbances requiring PKO facilities have reached that level stated above. This includes the cost of some operations that are as old as the UN itself (Kashmir and the Middle East Areas of Israel, the West Bank, Jordan, Lebanon) and very recent operations in areas such as the former Yugoslavia, Rwanda, Somalia, and Haiti. The total for old and new PKO activities can easily reach figures like $3.5 billion. In addition, there are some specialized agencies whose costs are related to those of the UN Secretariat and these might add another $1.5 billion.
These are sums that are very important from an economic point of view for the functioning of the United Nations and for its personnel. The total sum has enormous political leverage and is being used in that way now, but it is not a large sum for the world economy. Any changes of less than $10 billion in the sum are practically inconsequential under present economic conditions for a world of more than 5.5 billion people that generate a total world product of more than 20,000 billion dollars (US). When a particular apportionment of $50 billion was considered by the authors in connection with the conceptual maintenance of a UN standing army of 1 million persons, it was estimated that an incremental annual expenditure of that amount would change gross world product (GWP) by less than 1/2 percent and world inflation or unemployment rates by only a tiny fraction of a percentage point; in other words, small changes of less than $10 billion would hardly be felt in the world economy as a whole, but, of course, in concentrated doses it could be felt in specific locations.
More importantly, the United States, the largest single economy of the United Nations, does not attach strategic economic importance to a total sum of less than $10 billion. When a $50 billion economic stimulus for the US alone was being debated in 1992, critics often dismissed the total as being too small to be significant. It is less than 1.0% of US gross domestic product (GDP). At present, the statistical discrepancy in the national income and product accounts of the US is far in excess of $50 billion (it borders on $100 billion), yet it goes practically unnoticed in contemporary discussion of the macroeconomy.
It may thus be underscored that the operational cost of the United Nations is not, in a global sense, a large sum. In a world of more than 5.5 billion people, the regular budget of $1.5 billion amounts to little more than 27¢ per person per year. Even though this seems like a tiny amount it is difficult to raise. More so, it has strategic political importance as well as economic importance in terms of its allocation among member nations. It is, in a sense, an international tax, to be added, to domestic taxes.
Possible Bases of Assessment: The sum of individual country values of gross national product (GNP) is an obvious assessmet base. This sum is estimated at $23,580 billion for 1993, the latest year for which the figures are available in the Human Development Report, 1996; so total assessment of $1.5 billion amounts to about 0.00636% of world income.
The Working Group of the General Assembly considered some other concepts besides the world total of GNP as possible assessment bases. They considered GDP, NNP (net national product) and national income. They considered purchasing-power-parity monetary conversion rates (PPP) and also market exchange rates (MER). Each concept has its advantage and drawbacks, but they finally settled on GNP at market exchange rates, and this will be one of our central measures in this paper.
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