High-Level Expert Group Meeting
7-8 May 1994
The Hague, Netherlands
Chaired by Andries van Agt
MULTILATERALISM IN THE POST-COLD WAR SETTING
1. In the post-cold war era, the international community
finds itelf in the midst of tremendous flux undergoing
unprecedented adjustment in a quest for a new order. The
question is pertinent, whether nations and people are
indeed more secure now than before. The hopes for a
multipolar world have not materialised. For their part,
multilateral organisations have proved themselves neither
ready nor capable of assuming broader responsibilities.
Expectations about the capacity and power of international
organizations have been dashed, especially in the face of
insufficient and shaky levels of finance. With Russia
mired in crisis and groping for a new identity, the United
States continues to shoulder a broad range of global
responsibilities alone. And yet, against the backdrop of a
more confused political framework, the direction in the
economic sphere is much clearer than it has been for a
long time, reflected in the global consensus that the
market economy - no matter what form or mix it may take -
is the only practical way forward.
2. Clearly, opportunities exist to move towards a unified
global system with stronger multilateral organisations in
a way which has not been possible at any time before. But
what can be the future role of global multilateral
organisations while the overall direction of the
international community remains uncertain? In the former
Yugoslavia, Somalia or Rwanda, it has become clear that if
the big powers are not interested in a particular conflict
or problem, there is virtually no chance that multilateral
organisations can tackle it effectively. The recent policy
shift by the United States Government from assertive
multilateralism to a more sober, pragmatic approach
(towards more selectivity and more effectiveness) is
mirrored by the cooling attitudes and expectations of
other Governments - in both industrialised and developing
countries - concerning their willingness to participate in
international organisations and cooperation. Developing
countries, for one, are reexamining their options out of
frustration with the defunct North-South dialogue - there
is a real danger that international cooperation will
founder on the rock of ill feeling between industrialised
and developing counties. Moreover, given the positive
experience of many countries with privatization as a
stimulus to economic development - with at best marginal
involvement by international organizations -, these
countries have begun to assess the financial burden of
their membership in more than 20 organisations of the
United Nations system alone, quite apart from that of
regional and other organisations. The frustration at the
imbalance between the financial obligations and the
tangible benefits from the multilateral system is thus
pervasive throughout the world.
3. Recent years have revealed deepening differences among
the membership as regards priorities for action by
international organisations with many countries wanting to
devote increasing attention and resources to peace-making
and peace-keeping activities, while many others,
especially from the developing world, would rather focus
more on economic development programmes. Moreover,
governments may well state their preference for stronger
and more effective multilateral tools, yet in reality they
are not willing to surrender part of their sovereignty and
they do not want to create institutions with power
vis-a-vis the nation-state. In many instances, sovereign
nation-states even fail to implement decisions they
themselves have taken in multilateral forums.
4. The lingering and intensifying dissatisfaction among
governments with international organisations does not
augur well for the future. Not only is there worldwide no
perceptible change in the attitude of most nation-states
regarding sovereignty, but on the contrary in all
continents the expression of national or individual
interests by states is on the upsurge. In the absence of a
common enemy or ideological opponent, unbridled national
interest is becoming the main driving force for action by
states.
5. And in a further twist, groups within states or
societies are ever more forcefully expressing their
aspirations, leading to a fragmentation which impinges on
state authority, reduces state control over events within
its realm and often triggers internal conflicts and
tensions.
6. The key issue surely remains whether governments are
really poised, in general, to use international
organizations and, specifically, which ones for which
purposes. The decreasing propensity and habit of
governments to resort to international cooperation is
ominous and is the weak link in the cooperation equation.
The adoption of more meaningful and effective
decision-making mechanisms and other organisational
incentives may help to reinstil the commitment of some
countries to multilateral solutions. This overall
sceptical attitude notwithstanding, governments cannot but
recognize that a number of daunting global problems - with
long-term implications - will not wither away. They can
only be resolved through global cooperative efforts.
MULTILATERAL ORGANISATIONS AND THE NEW GLOBAL
AGENDA
7. Multilateral organisations - most of which were
substantially affected by the Cold War conditions - were
designed to serve specific purposes. The multilateral
system as it appears today represents an assortment of
intergovernmental structures and institutions, comprising
the United Nations and its system, financial institutions
- including the Bretton Woods institutions World Bank and
International Monetary Fund (IMF) -, regional
organisations and a host of other international
organisations. While some multilateral organisations are
not universal in terms of membership, they may
nevertheless be global in terms of their interests,
outreach and ramifications of action.
8. The institutional underbrush of international
cooperation is littered with organizations, making it
impossible for governments to deal with them, much less so
in a creative manner. It is not only a matter of overlap
or duplication or efficiency or corruption - all of which
may play a role. The present organizational overload in
the international global system needs to be pruned so as
to enable leaders committed to global cooperation to focus
on the truly important issues and to choose the most
suitable organisation for action. Under no circumstances
should henceforth new organisations be created without
abolishing existing ones. By its very nature, this process
of reform will be incremental.
9. The United Nations and its system of specialized
organisations and agencies - which includes the World Bank
and IMF - represents the core of today's multilateral
arrangements. One of its major shortcomings is that it
really does not operate as a system with common guidance,
supervision or central direction. The main reason for this
state of affairs is the system's polycentric nature, which
by itself is due to a decentralisation of institutional
competence on functional or technical grounds dating back
in some instances more than 50 years. Thus, a plethora of
more or less independent organizations pursues largely
uncoordinated economic and social policies and programmes.
In spite of an abundance of coordination devices, which
remain largely ineffective, the activities of the UN
system lack coherence. While the international problems at
hand are cross-sectoral and cross-organisational, they are
being dealt with more often than not in isolation and
generate hefty competition for mandates and resources. A
proliferation of unheeded and unimplemented resolutions
has undermined the authority, effectiveness and impact of
the various organisations; without supranational powers,
they cannot enforce their decisions. The case can be made
to unify a number of agencies. Non-governmental
organisations and multinational corporations should also
be involved more systematically in the decision-making and
programming processes as well as in financing.
10. The mission of the United Nations was to foster
international cooperation, to prevent new wars and
stimulate economic development and well-being. Peace and
security was meant to be maintained through a small
collegial group of allies. However, during the cold war,
the United Nations, and especially its Security Council,
was unable to function as conceived and its potential only
began to be realised following the end of the Cold War.
The years since then may have been a little deceptive for
the United Nations in the sense that unusually favourable
conditions prevailed where the Soviet Union and the United
States more or less agreed on all issues at hand. The
proposals in the "Agenda for Peace" by the United Nations
Secretary-General may point to new directions with respect
to peace-keeping, peace-making and peace-building. In the
economic area, the United Nations has never been able to
assume a lead role and consequently its Economic and
Social Council (ECOSOC) has languished - and this was not
a consequence of cold war stalemate.
11. The state or performance of the international
organizations in general and the United Nations in
particular has always been a direct reflection of the
political and psychological mood and constellation of the
international community. Overall, the UN seems to have
been able to achieve the almost impossible feat of not
meeting the needs of most of its members. Part of the
reason may be that the Organization was conceived at a
different time for a slightly different purpose and is now
serving the world in a changed situation and environment.
While many governments and politicians pay lipservice to
the central role of the United Nations, decisions and
multilateral action on an increasing number of issues are
shifted to forums outside the United Nations. As a
minimum, the United Nations, and in particular the General
Assembly, should revive one of its important functions,
namely to serve as a forum for deliberative debate among
governments in which all points of view can be ventilated,
but where no effort would be made to reach agreement on
issues which are beyond the genuine scope of a
non-governmental entity.
12. If the United Nations was made impotent through
disagreements among the superpowers during the cold war,
it now seems to have been overburdened and overwhelmed
with an enormous agenda in the face of too weak an
administrative and financial infrastructure. The end of
the East-West conflict, the demise of the Soviet Union as
a sovereign state and strategic superpower, the emergence
of new and competing political units, and the
proliferation of acute global problems which jeopardize
the very survival of the planet, pose new challenges and
give rise to conflicts of new types in a unipolar world.
Long overshadowed by the Cold War or even hardly
imaginable in the mid-1980s they are today more and more
understood as menaces to mankind: environmental
degradation and biospheric depletion, climate change, the
emission of greenhouse gases, the demographic explosion
and transborder population movements, jobless growth,
rampant poverty, AIDS, drug trafficking, international
corruption which compromises development efforts, ethnic
and regional conflicts, the calluous disregard of human
rights, the specter of the proliferation of nuclear and
other weapons of mass destruction, terrorism, and a
destabilising globalisation of financial markets. The
international community is groping for a new vision and
appropriate institutional mechanisms for the 1990s and
beyond to respond to these challenges and threats to
global and human security. Clearly, the United Nations
will not be able to do everything and should not attempt
to do so. As a general guidance, the issues selected for
international cooperation should be vital, global in
nature and implications, urgent and long-term in character
and require impartiality. For any action, proper
sequencing is crucial: decision about a course of action -
choice of most suitable organisation or mechanism -
securing the financing for the implementation of the
decision - implementation and enforcement of political
decision.
TAPPING THE POTENTIAL OF NON-STATE ACTORS
13. While the world should be moving towards
multi-centricism, the general thinking is still very much
state-centric. But the course of events is no longer
determined by governments alone, there are many more and
significant players, especially non-governmental
organisations (NGOs) and multinational organisations.
Worldwide there are today some 18,000 non-governmental
organisations and many more national and local ethnic,
racial, religious, professional and other groups
operating, each with a specific know-how and competence
extending over the entire range of human concerns. The
flow of finance from NGOs in the North to NGOs in the
South alone amounts at present to some US$9 billion.
Whereas official development assistance (ODA) has
stagnated or has been declining in real terms for many
years, the NGO flow is expanding since several years at a
rate of 5-8% per year in real terms. The private sector
and multinational corporations are a major force in the
field of investment flows and they wield considerable
financial and political power.
14. The multilateral system should seek to integrate,
collaborate and make constructive use of this enormous
potential of non-state actors. Recent United Nations
conferences, including the Rio Earth Summit and the World
Conference on Human Rights, demonstrated the benefits for
their creative and active participation.
15. Multilateral organisations should also make more
frequent use of blue ribbon commissions, which - like at
the national level - could help both forge consensus on
contentious issues and jumpstart processes and the
implementation of decisions.
16. Equally, the feasibility of a parliamentary chamber or
assembly complementing the present intergovernmental
structure should be seriously explored, as it might
enhance the political legitimacy of the organisations and
strengthen accountability of organisations and
governments.
******
17. The multilateral system and especially the United
Nations should be oriented towards a holistic approach
whereby peace and security issues are not mechanically
separated from development issues. At the same time, the
new concept of security should not be diluted beyond
recognition by loading it with all types of problems. In
the process, one should arrive at a redefinition of the
interrelationship between national and global interests,
the definition of commonly accepted multilateral
structures, mechanisms and rules of operation. Ultimately,
it will be inevitable that nations yield some of their
sovereignty to multilateral organisations. Yet, we should
be realistic enough to accept that any transfer of
sovereignty and a deepening voluntary cooperation among
states may also harbour the seeds of conflict. Many new
states may take an even narrower view of international
requirements. Confrontation and tensions may be nurtured
by diverging interests, disagreements, and clashes of
ideologies or religions.
18. In the age of global interdependence, the principal
areas for multilateral global action fall into three main
categories:
a) the maintenance of peace and global security;
b) the management of economic interdependence;
c) the management of the new global challenges: coping
with the population explosion and promoting sustainable
human development.
THE MAINTENANCE OF PEACE AND GLOBAL SECURITY
19. Collective military defence is no longer an overriding
priority of national policy. Other risks and instabilities
have emerged which are difficult to quantify in military
terms and which have led to a redefinition of security.
Stability, which is easy to recognize but difficult to
define, does not depend on the military dimension alone.
Although the United States is now dominating the unipolar
world, it is trying to reduce its commitments. Yet, global
security and stability will not be achieved without strong
American participation and all efforts should be made to
persuade the United States to continue playing such a
role.
20. A collective security system would need to be
organised and structured in such a way to enable it to
monitor developments continuously and to preempt, prevent
and contain conflicts, mediate disputes, assure the
protection of small and weak states and deal
authoritatively with aggressors. This will require
mechanisms for peace-keeping, peace-making, peace-building
and conflict resolution. The effectiveness of action by
the Security Council has encountered limitations inasmuch
as certain resolutions remain unimplemented because the
Council has no independent means of implementation and
enforcement. Instead, it needs to rely on the goodwill and
cooperation of important member states and other
international organisations. This discrepancy between
authority and power ought to be reduced, yet there are
doubts that members are really ready to give the Council
full enforcement power and the attendant means.
21. The growing demands and diversified assignments for
the United Nations in conflict and crisis situations (e.g.
preventive deployment of monitoring troops in Macedonia)
require an increasing number of troops hitherto provided
by national governments. Even if an operation is under
United Nations control and command, in reality not a
single important decision can be taken without the
involvement of troop-contributing governments. Articles 43
and 45 of the United Nations Charter envisage that the
Security Council can call on stand-by international
military or police forces and deploy them quickly in order
to break cycles of violence and the destruction of human
societies through firm intervention. Initial discussions
on the possible activation of these provisions have begun,
but have already pointed to reservations and reluctance of
a number of governments to join this scheme.
22. The sobering experience in Somalia holds many lessons
for future operations. In the first stage, the United
States operation in Somalia was nothing but a purely
humanitarian operation undertaken by a country that was
ready to send its troops to a faraway continent without
having any direct interest in doing so, apart from its
general leadership obligations as the only global power.
That was a widely praised and unprecedented act of
generosity. However, once efforts were made to tackle the
underlying causes of the Somali disaster, the whole
operation began to flounder as the mandate and the
resulting orders became confused and blurred. Thus, the
operation was transformed mid-way into a different
mission. Any military operation must always have a priori
a clear objective and mandate. A real dilemma arises when
force will be used to restore stability in strife-torn
areas. How can legitimacy be conferred upon the use of
force outside a nation's own borders or alliances? Does
the use of force conflict with other objectives, such as
humanitarian programmes? Similar questions pertain to
peace-building and the reconstruction of war-torn
societies, when a wide range of humanitarian aid, economic
development, financial assistance, rebuilding and
resettlement of refugees must be coordinated.
23. In general, many governments feel that their public
will not tolerate the loss of lives of their own citizens
on any significant scale in areas that may be perceived of
peripheral interest. Given the reluctance of Governments
to place their own soldiers in harm's way and to
neutralise vagaries of the political process in many
countries, the creation of a modest-size standing force of
volunteers under UN auspices would be a compelling
proposition. The creation of such a standing volunteer
force would endow the Secretary-General and the Security
Council with a rapid means of pre-empting conflicts or
intervening to head off humanitarian tragedies (e.g. in
Rwanda), subject, of course, to a satisfactory resolution
of issues of finance, recruitment, command and control.
Once established, it could conceivably be combined with,
and backed up by, regional or sub-regional peace-keeping
forces.
24. Worldwide ethnic conflicts and conflicts between
ideologies persist. The re-emergence of ideological
conflicts disguised as religious conflicts might be a
prime source of future tensions and conflicts. In
situations where governments lose effective control within
their borders, the non-violability of the borders of
sovereign states may be put aside under certain conditions
which may justify intervention by the international
community (see annex I containing pertinent proposals by
Lord Callaghan contained in his report on the conclusions
and recommendations of a High-level Group by the
InterAction Council on "Bringing Africa Back to the
Mainstream of the International System", Cape Town,
January 1993). Security Council resolution 688 provides a
general legitimation for such interventions, as it
determined that repression by governments of its own
people which results in urgent humanitarian needs
constitutes a threat to international peace and security.
However, the Somalia experience suggests that any such
intervention in a failed state under conditions of
political bankruptcy and ongoing civil strife is
exceedingly complicated and fraught with risks. This
lesson is already being reflected in the widespread
reluctance of Governments to get involved in Rwanda.
Early warning and policy planning
25. For the moment, the United Nations is called upon to
act in the security area somewhat akin to an emergency
team when Governments by themselves cannot cope. Long-term
or medium-term policy planning might thus be useful but
could give rise to misleading expectations since one is
often taken by surprise. Although preventive measures
might be the most economic and effective way to deal with
problems, they often depend on intelligence available to
individual Governments and rarely shared with the
Secretary General. Hence, such measures are rarely put in
motion or, with doubtful effectiveness, only when a
conflict is about to erupt. Governments more often than
not might be wary in setting up an early warning mechanism
as it might trigger a spiral of events leading to a - not
necessarily desired - intervention. The Yugoslav crisis
may serve as an example for a situation where ample
warning existed about what was likely to happen, which
however was not met by a commensurate readiness to take
preventive action. Preventive action will only be credible
if it is genuinely believed that there is a willingness to
take serious action if a conflict does arise.
26. In the context of a broad concept of security, i.e.
including the new global challenges, multilateral policy
planning would make considerable sense. It could draw on
the enormous amount of information collected by, and the
institutional memory available in the agencies of the
United Nations system and would thus give wider access to
this largely unknown wealth of global data.
Globalism versus regionalism: towards a new
burden-sharing?
27. Increasingly, the case is being made for a stronger
involvement and role by regional organizations, in line
with Article 52 of the UN Charter, in situations requiring
peacekeeping and conflict resolution. Recent moves in the
Security Council to delegate responsibilities in
peace-keeping matters to regional organizations are a
reflection of a general mood towards more decentralisation
of the international system. Driven by a motivation to
strike a balance between the abstraction, complexities and
burden of globalism and the shortcomings of unilateral
approaches, the proponents of regionalism point to
advantages of proximity and neigborhood which might permit
more leeway, leaner decision-making and, hence, better
responsiveness and reaction. Such an application of the
principle of subsidiarity in global decision-making must
be carefully weighed against the tasks at hand. While the
subsidiarity concept stipulates that decisions should be
taken as close as possible to a problem, this shall not be
interpreted to mean that internationally decisions should
be taken at the lowest possible level. This would run
counter to the concept and perceived necessity of global
leadership. Rather, decisions should be taken at a level
where all pertinent interests are taken into account and
where they will lead to maximum international effect.
Hence, an appropriate burden-sharing between regional and
global institutions will have to be determined in each
case. But even if a regional organisation will take on a
particular mandate, approval by the Security Council
should be sought as this would confer international
legitimacy.
28. However, the global system will not by necessity
become more effective through a broader involvement of
regional organizations. Paradoxically, such organizations
are frequently weaker in performance and decision-making
capabilities than the United Nations and are on even
shakier grounds as regards their financial basis. Hence,
skepticism may abound as to the real effectiveness and
capacity of regional organisations. If there is however a
widespread feeling favoring increased recourse to regional
organisations in crisis situations, then it is an
imperative that countries take urgent measures to
strengthen the regional organisations concerned so that
they may perform their new missions.
29. In Europe, a well-established structure exists through
NATO (and its recent Partnership for Peace arrangement),
the European Union, the Western European Union and the
Conference on Security and Cooperation in Europe (CSCE).
But seemingly, Europe cannot deal effectively with its own
security challenges. Enlargement in the membership of
these organs is widely viewed as compromising cohesion and
efficiency. In Africa, the Organisation for African Unity
(OAU) is evolving, but it will not be capable of carrying
out any large-scale peace-keeping operation without
assistance from outside. The OAU recently adopted a
conflict management mechanism, but it is not working yet
as it should. Many more tragedies like those in Somalia,
Liberia, Rwanda are looming and to ward them off, some
preventive, low-key and non-military intervention should
be initiated as long as conflicts are still smoldering and
when they can be contained before degenerating into
violence. In Asia and the Pacific, no regional
organization exists which could assume a role in
peace-keeping or conflict resolution. This reflects to
some extent a historically greater reliance on global
multilateral institutions. The Middle East poses a
particular problem with the danger of Islamic
fundamentalism, which is unlikely to be solved by any
regional organisation. In Latin America, the experience of
the last decades was disappointing. The Organisation of
American States (OAS) has been irrelevant with respect to
important issues. As a result, informal and ad hoc
groupings were formed, such as the Contadora Group, the
Group of Eight later transformed into the Rio group, as
well as the countries of the Consensus of Cartagena on
debt restructuring.
30. Regionalism might be useful for specific circumstances
but can never serve as a general recipe for pursuing world
governance and order. It might lead to a fragmentation of
the world into rather inward-looking regions and give rise
to the emergence of spheres of influence, running counter
to the very concept and potential of international
cooperation at the global levels. Instead, all efforts
should be undertaken to enhance cohesion and the
efficiency of global cooperation and to avoid a splitting
up into regional groupings.
Reform of the United Nations Security Council
31. The need for a reform and expansion in membership of
the Security Council is widely acknowledged so that it may
acquire the legitimacy, authority and political and
financial support necessary for the discharge of its
expanding responsibilities. When the present permanent
members were determined in 1945, they accounted for over
60% of total world GNP, while today this share has dropped
to less than 40%. Widespread agreement seems to prevail
that Germany and Japan should become permament members;
other powers will also have claims and demand inclusion.
Any enlargement in the composition of the Council,
however, should not jeopardize its efficiency. Yet, there
is also fear in some quarters that any amendment to the
Charter might open a Pandora's box so that the necessary
Charter revision might also bring other proposals to the
fore.
32. Another practical, yet fundamental adjustment may be
required to improve the crucial relationship between the
Secretary-General and the Security Council. This
relationship has been in essence determined by the cold
war. If during that period the Secretary-General spoke in
the Security Council or in one of its informal meetings,
he was sure to offend either the United States or the
Soviet Union. Therefore he did not speak either in the
Security Council or in informal meetings. As a result, the
incumbent Secretary-General does not attend informal
meetings of the Security Council. It would appear that
such informal meetings would offer a valuable opportunity
for the Secretary-General to discuss openly information
available to him, to outline possibilities for action and
to highlight practical difficulties with respect to
options under consideration. This would make governments
feel involved in the actual running of operations and
would increase the confidence of governments.
Arms control and arms trade
33. Arms control, in particular measures to control the
proliferation of weapons of mass destruction and the arms
trade, should receive priority attention in multilateral
forums. At present, most, if not all of the conventions
and treaties on subjects of military security (including
the Nuclear Non-proliferation Treaty/NPT, the Strategic
Arms Limitation Talks/SALT and the Strategic Arms
Reduction Talks/START) were conceived and negotiated
outside the United Nations. As a consequence, the UN
cannot deal with violations of these treaties nor can it
authoritatively intervene against a country which has not
acceded to a particular treaty. Urgent steps should be
taken to make the world's ever more complex assortment of
arms control and disarmament treaties and conventions more
transparent and manageable. Preferably, it should be
placed under the authority of one single organisation, the
United Nations. Efforts should also be accelerated to
prevent the leakage and proliferation of nuclear weapons,
hardware and technologies. Equally, chemical, biological
weapons and ballistic missiles should be brought under
strict multilateral control to avoid further spread.
34. Adherence to the Nuclear Non-Proliferation Treaty
(NPT) should be broadened towards universality and greater
authority should be conferred upon the International
Atomic Energy Agency (IAEA). In 1995, the NPT will be
reviewed and there is considerable merit in extending it
for a substantial period of time. At that time, the IAEA
should also be empowered to carry out challenge
inspections of all nuclear facilities on the territory of
signatory states.
35. However, the five proclaimed nuclear powers must show
evidence that they are serious about their NPT obligations
to seek a reduction of nuclear arms - that, in short, the
NPT is not a treaty aimed at codifying inequality.
Multilateral negotiations should begin to reach agreement
on the elimination of all nuclear weapons.
36. The arms trade is a particularly costly and
destabilizing feature of international life. It remains
unregulated and beyond effective governmental or
international control. The now defunct Coordinating
Committee for East West Trade (COCOM) should be
restructured and converted into an effective export
control system for weapons of mass destruction, ballistic
missiles and the arms trade (including the setting of
global norms, regulations and limits for both arms
suppliers and purchasers). Information thus gathered
should be matched and integrated with data provided by
Governments to the voluntary arms register opened at the
United Nations. The publication and dissemination of
information about arms sales will be a first step in terms
of making it clear where arms sales are going. The weapons
trade with developing countries should be substantially
reduced and curbed. To that end, international
organisations and bilateral donors should impose
conditionality in the sense that countries where military
expenditures exceed 2% of GNP should no longer be eligible
for development assistance and funds.
MANAGING ECONOMIC INTERDEPENDENCE
37. The collapse of the centrally planned economies, the
global embrace of the market economy and the freedom of
capital flows have brought about a truly global economy.
There seems to be broad agreement as to the future
direction of the world economy. With the whole world
moving away from managed and planned economies, any notion
that the world economy would lend itself to collective
economic leadership is antithetical. There nevertheless
remains scope for an institutional multilateralism to
support the rules-based multilateral framework determined
by the principles of the market economy,
non-discrimination, free trade and payments and optimal
competition. As the market economy does not exist in a
vacuum, it can only have beneficial results if
internationally the rule of law and an open system
prevail. Treaties have designated international
organizations with independent secretariats as custodians
of the multilateral system to ensure observance of the
rules of the game and, thus, to manage the interdependence
of national economies.
38. At the national level, it is the responsibility of the
government to provide the right institutional framework
and environment to enable the market economy to operate.
The countries in East Asia and Latin America have shown
how economic progress and substantial growth can be
attained in a framework that only a few years ago seemed
quite impossible.
39. The disappearance of the cold war also makes itself
felt in the economic arena. One of the prime reasons for
the cooperation pursued by the Western countries was the
existence of a common enemy. This no longer being the
case, the habit of cooperation weakens coinciding with a
period where the interests of states in the economic and
trade fields are becoming more and more egoistic. This
presages new types of conflicts. As a result, both the
economic as well as the institutional sides of the
multilateral system are being eroded. The economic side is
under duress owing to a growing tendency - particularly by
the big countries - towards bilateralism, regionalism and
regional trade blocs. These countries try to escape from
the discipline of the rules-based global cooperation by
seeking to address problems within a more limited
framework, ignoring the external trade-diverting effects
on the world as a whole and thus running counter to the
principle of multilateral non-discrimination.
40. Notwithstanding any positive effects regional trade
blocs might yield, the countries involved leave the
multilateral fold. Protectionist pressures are growing in
different parts of the world. As it has never been
possible to organize international economic cooperation
without the whole-hearted involvement of the United States
- either in a leadership or in a strong supportive role -
much will depend on the attitude of the United States,
where protectionist sentiments are on the rise. It is
troubling also that the European Union is heavily
preoccupied with protecting its frontiers by tariff or
quasi tariff barriers. And Japan always had a strong
protectionist tendency, particularly in the agricultural
field.
41. With the world's open trading system under serious
threat - despite the conclusion of the Uruguay Round-,
international institutions must now redouble their efforts
to reinvigorate and nurture a continuation of the
cooperative habit of past decades.
42. The tremendous development of the international
economy in recent years was due in large measure to the
way in which the multilateral system had been developed
and had performed. The leading institutions in the
economic field include the International Monetary Fund
(IMF), the World Bank, the International Finance
Corporation (IFC), the General Agreement on Tariffs and
Trade (GATT) - which is to be replaced by the new World
Trade Organisation (WTO) -, the Organisation for Economic
Coperation and Development (OECD) and the Group of Seven
(G-7). The G-7, however, is a most confusing term because
it really refers to two different groups: the Summit of
the Heads of State and Government of the G-7 countries
-which has largely lost its economic orientation -and the
G-7 finance ministers (which also includes the central
bank governors).
43. With respect to coordination of financial policies,
the creation at first of a G-4, then a G-5, which later
evolved into the G-7, was a reflection of the
disillusionment with the too institutionalized process of
international macroeconomic policy coordination. Helmut
Schmidt and Valery Giscard d'Estaing were both members of
the original group, which they found extremely useful.
When they became leaders of their countries, they decided
to replicate it at the heads of state or government level.
That was how the G-7 economic summits were born. Today,
these summits have degenerated into a meaningless public
relations routine at which no effective decisions are
taken and no economic coordination accomplished. They
increasingly serve political purposes leading to the
adoption of often meaningless political declarations, but
do not further economic cooperation, recent initiatives on
jobs and the environment notwithstanding. Nevertheless,
these summits may have some value in that the leaders get
to know each other better at the working level than would
otherwise be the case. Of real importance is the fact that
during the preparatory process bureaucracies are forced to
address jointly a variety of issues pertaining to
international cooperation. However, the G-7 summit should
revert from its semi-institutionalisation to the original
concept providing for a private, confidential exchange of
views between a few key leaders of the world. It is only
through such a mechanism that the President of the United
States can be regularly exposed in such detail to the
views of other leaders.
44. The G-7 process, at the level of finance ministers and
central bank governors, enables financial and monetary
authorities to engage in policy coordination without any
permanent institutional underpinning. At the advisory and
informal level, it serves as a useful mechanism, prior to
ministerial meetings, for soliciting understanding of each
other's positions, identifying possible short-term
trade-offs and devising possible long-term policy options.
The record of G-7 action reveals maybe too great an
emphasis on balance of payments adjustment as compared to
measures stabilising the macroeconomic framework.
Sometimes, the G-7 process has led to a situation where
government intervention has become too excessive, e.g. in
the aftermath of the stock market crash of October
1987.
45. Indeed, prior to ministerial meetings, an entire chain
of consultation and cooperation is set in motion, e.g.
within the EC and other informal groups. G-7 (finance
ministers) decisions play a key role in action by the
Group of Ten governors (G-10) at the Bank for
International Settlements (BIS) and the IMF and its
Interim Committee - composed of developed and developing
countries -, which engages in consultations more often
than not of uncertain impact. It is the Interim Committee
which formally ratifies - or rubberstamps - decisions.
This last stage of the process suffers from the absence of
a real dialogue, despite the presence of finance ministers
and central bank governors.
46. In practice, the G-7 has marginalised other
multilateral organisations in the economic field - the
Bretton Woods organisations and the OECD -, relegating
them to the position of "think tanks". Increasingly the
legitimacy, performance and credibility of the G-7 is
being criticised: the Western world's share of population,
wealth and trade is shrinking, while new economic powers
are entering the stage unable to participate in the
world's premier economic decision-making club. Given the
weight of their economies and their political importance,
Russia and China will need to be brought into the G-7
framework. One of the dangers of enlargement, however, may
be that although some key countries may formally
participate, on truly important issues they may resort to
bilateralism or other new, strictly limited groupings.
47. The present challenge is how a more meaningful and
satisfying link can be established between the G-7 and the
multilateral economic institutions. Small groups may be
useful for efficiency purposes, but they are rarely useful
for fostering the rules-based system. As a minimum, G-7
(finance ministers and summit) meetings should allow heads
of the key international economic and financial
institutions to be present as observers.
48. However incomplete the Uruguay Round agreement may be,
it represents a significant achievement with an average
reduction of tariffs by over 30% (although the regimes for
anti-dumping and counterveiling duties are insufficient).
The most remarkable merit of the new World Trade
Organisation (WTO), for all its apparent shortcomings, is
a completely revised dispute settlement system, which will
result in faster proceedings and binding solutions. While
this might be interpreted by some as an encroachment on
sovereignty, its rejection would set the world back to
1947. The paramount challenge is to get the WTO
successfully off the ground and to make it an effective
mechanism which can combat protectionism and
unilateralism.
49. In the wake of the non-establishment of the
International Trade Organisation (ITO) in 1947, the United
Nations Conference on Trade and Development (UNCTAD) was
created to fill the vacuum. With the agreement on WTO,
there is no more justification for UNCTAD and it needs to
be wound up.
50. The development of global financial markets has to
some extent privatized work that used to be done by the
IMF and the World Bank, both as regards the provision of
finance to cover balance of payment deficits and to
provide development finance for countries that can attract
funds from international markets. This has slightly
diminished the roles of the Bretton Woods institutions,
which are called upon to refine their mission,
particularly in the light of mounting criticism about the
record of the World Bank in the environmental field.
51. As regards OECD, it serves a forum for macroeconomic
and other policy dialogue, analysis and research for its
member countries. But its dialogue with non-member
countries has gained importance. As structural and
distributional problems - such as the phenomenon of
jobless economic growth - take center stage in the
international and national policy debates, OECD - with its
analytical capacity and expertise in global structural
issues - will be called to play a prominent role. OECD is
also well-equipped to address the interrelationship
between macroeconomic and structural policies and the
interaction between social policy, education policy, and
labor market policies. OECD, in cooperation with GATT (and
later with the new WTO) will have a crucial role in
securing an open trading system.
52. Given the dissatisfaction and the sense of exclusion,
especially on the part of the smaller countries in both
the developed and the developing world, several options
for global economic cooperation are being floated, aimed
at group decision-making that is more representative of
the diverse global picture and interests, but at the same
time not too unwieldy. One proposal is to create (within
the framework of the Bretton Woods institutions) a forum
consisting of the finance ministers and central bank
governors of the G-5 and a representative group of the
non- G-5 countries of no more than 10 or 7 persons. This
might result in a body of not more than 15 countries.
Another suggestion envisages the establishment of an
economic and development security council within the
United Nations of between 12 and 15 members, with the
proviso that participants should be drawn from among
finance ministers and central bank governors. Overall,
economic policy-making is bound to benefit if finance
ministers - who now only attend the meetings of the
Bretton Woods institutions - could be brought closer to
the discussions in United Nations bodies and if ministers
charged with other aspects of economic policy could become
more involved in the work of the Bretton Woods
institutions.
53. The systemic instability of financial markets as a
result of the globalisation of financial markets and the
absence of any global regulatory or supervisory authority
poses a new, widely underrated danger to the stability of
the world economy. Speculative activities are threatening
widespread global financial collapse and are endangering
the required flow of credit and funds. Instability
resulting from the globalisation of financial markets
needs to be tackled at the international level. Primarily
there is a need for global coordination of macroeconomic
policies to minimize turbulences resulting from
inconsistent policies. This may, however, not be
sufficient in addressing vulnerabilities owing to
speculative capital inflows and outflows triggered by
accidental circumstances in some countries.
54. While the supervision of financial behaviour is at
present inadequate in many countries, international
supervision is entirely absent - notwithstanding
initiatives taken at the level of the G-7, IMF, BIS and
OECD. To guard against financial breakdowns, a set of
rules in the form of prudential guidelines for financial
institutions in markets has been adopted under the
auspices of the Bank for International Settlements (BIS).
Recently, its Committee on Banking Supervision has
proposed a new set of capital requirements to address
market risks. In the absence of a single global regulatory
and supervisory authority for the rapidly expanding
globalised financial markets, an urgent study should be
undertaken regarding the feasibility of establishing sound
regulatory and supervisory arrangements and the practical
steps required towards that end.
55. Neither the United Nations and its Economic and Social
Council (ECOSOC) nor the UN's specialised agencies have
ever played any significant role in economic policy-making
and it seems unlikely that they ever will. Governments
direct their energies only to institutions where
cooperation is likely to be most fruitful. The real
problem is that the United Nations system was never able
to cope with the multidisciplinary character of
interdependence. The organisation of the system along
functional lines led to a situation where international
cooperation was approached only from a sectoral
perspective (which in turn would have the effect of
strengthening sectoral lobbies nationally). Instead, it
should have tried to balance the various sectoral
interests for the sake of global progress and cooperation.
This would require a determined and sustained coordination
exercise at the highest level, which cannot be resolved by
the executive heads of the agencies meeting from time to
time under the chairmanship of the Secretary General. One
of the irritations encountered in the past was that the
various agencies were operating at cross-purposes,
engaging as they did in normative activities and in
issuing policy directives which were at variance.
Sovereign governments had adopted in different -sectoral -
forums contradictory decisions of a global nature.
56. For its part, ECOSOC has ceased to have any meaningful
mission. There is no issue on the agenda of ECOSOC that is
not also being discussed by the General Assembly. ECOSOC
has never coordinated anything, as opposed to simply
rewriting resolutions with very little value added.
57. In future, in the economic field the United Nations
should concentrate primarily on questions of sustainable
development, population and matters related to the
provision of statistical information. Regarding the
latter, there is a need for centralisation and
computerisation of the staggering amount of data collected
within the UN system. However, the question must be asked
what practical purpose many reports and statistics serve
if competing reports by private institutes and companies
take precedence in debates and policy-making.
58. The perennial quest for coordination has by itself
given rise to some inefficiency in the multilateral
system. If coordination and coherence of action are
considered desirable for the UN system, it might be more
effective to create a coordination body akin to a holding
in the corporate world, providing a unified umbrella for
the plethora of United Nations organisms in the economic
and social area. It would be governed by a board that
would guide, issue instructions, exercise control and seek
to realise synergies.
59. As regards a comprehensive reform of the United
Nations system, careful consensus building is unlikely to
yield tangible results, as evidenced by the experience
gained with the Nordic United Nations project. One way out
of the deadlock could be the appointment of a
representative reform commission which would be charged
with producing within a specific time-frame a package that
can only be accepted or rejected, but not amended and
diluted. This group should draw up its package on the
basis of certain parameters, such as a percentage
reduction in the number of organisations, the number of
intergovernmental committees and the volume of paper,
reports and documents.
MANAGING THE NEW GLOBAL CHALLENGES: COPING WITH THE
POPULATION EXPLOSION AND PROMOTING SUSTAINABLE HUMAN
DEVELOPMENT
60. The global population explosion may end up suffocating
one national economy after another, gradually forcing an
ecological burnout on a global scale, accelerating the
greenhouse effect with devastating sea level rise and loss
of agricultural lands, and triggering considerable
population movements intensifying the spiral of ever more
poverty, disease and conflicts. Cities will have living
conditions fostering increased migration and apocalyptic
health epidemics. In 1990, world population stood at 5.7
billion. Over each of the next two decades 1 billion
people will be added. World population is estimated to
reach 10.2 billion by the year 2100.
61. Different scenarios estimate that in the second half
of the next century the world population may reach
anywhere between 8 and 14 billion. To achieve a stable
global population at the end of the next century, the
total fertility rate, i.e. the average number of children
per woman, must decrease to 2.1 as soon as possible. If
this is achieved by 2025, the population might stabilise
below 11 billion. If it is reached 25 years later, another
6 billion might be added. Whether the low or the high
estimates materialize will depend on policies and measures
taken in the next few years. The frightening reality and
prospect of rapid population growth and its implications
must therefore become the prime focus of multilateral
attention. Managing that extraordinary population increase
is the most daunting challenge confronting the world.
62. The overall decrease in the fertility rate can be
achieved through a variety of measures:
a) Enhanced access to and utilisation of contraceptives:
an extraordinary revolution has taken place in terms of
worldwide contraceptive prevalence (to prevent unplanned
and unwanted fertility). In the developing world, access
by fertile couples to contraception has moved from under
10% some 3 decades ago to now well over 55%. As a result,
the family size has shrunk appreciably from a historic
average of 6 children per family (in virtually all
societies) to about 3.8 in the developing world today.
Globally, the total fertility rate is about 3.4 as opposed
to the target of 2.1 children per family. No developing
country has however reached that level yet.
b) Extended education of girls and school attainment,
preferably until the age of 14-16 years: without any
education girls tend to marry at 17; with secondary
education they marry well beyond the age of 21. The
requisite education could be attained over a period of 10
years for a sum equivalent to 0.25% of the collective GDP
of the low income countries.
c) Enhancement of women's rights, their status, employment
opportunities and access to productive resources and
credit.
d) Improvement and expansion of basic health services,
including clinics, especially for women and children.
d) A better definition of men's responsibilities to
children will also contribute to a decrease in the demand
for children.
63. The figure adduced for programmes and policy
initiatives to be carried out under the draft Cairo
Population Action Plan (to be adopted at the September
1994 United Nations Conference on Population and
Development) - providing for an expansion of contraceptive
services up to the year 2000 - is estimated at US$11
billion. Currently, the amount of ODA devoted to
population activities stands at a mere 1% of all ODA. If
the rich nations were to pick up their usual share for the
proposed increased contraceptive services, the cost to
every tax payer would be about 1 penny per day. However,
expansion of health services and educational facilities
for girls will require a much more significant amount of
resources. Developing countries are certainly called upon
to contribute a substantial portion of the needed funds
for these measures themselves by shifting priorities in
their budgets so as to allow an implementation of the
programmes and measures proposed.
64. The challenge for the multilateral system is not how
better to coordinate or how better to execute programmes.
Rather, countries that are ready and anxious for certain
kinds of help should be assisted, with resources,
expertise and technical advice. Each country may require a
different set of calculations and a specific set of policy
prescriptions. At the national level, laws should also be
reviewed to increase the age of first marriage in order to
bolster efforts aimed at spacing of children.
65. More than four decades of foreign aid has done little
to improve the prospects of most developing countries or
to create a global social safety net. Poverty,
unemployment, disease and violence are rampant. In its
present form, development assistance resembles charity,
failing to address the real issues such as trade, foreign
investment, debt and transfer of technology. The
multilateral agencies, mired in the management of narrow
needs for each country, are not devising the necessary
global strategies for key parameters.
66. It is evident that social development must be
accelerated in the next decade, especially if the above
population goals are to be realised and if poverty is to
be eradicated. The Social Summit convened by the United
Nations for 1995 in Copenhagen will need to come up with
coherent policy guidance on how to face up to this
challenge, which is likely to require a significant
increase in resource flows - yet the agreed and often
repeated target of 0.7% of GNP for development assistance
by industrialised countries has been met (and exceeded) by
only a few. If every country were to give 0.7%, this would
raise US$145 billion, a sum adequate, for example, to
implement the entire Agenda 21 adopted by the Rio Earth
summit. What may be required in future is a sizable UN
fund for poverty alleviation. Will such a massive,
Marshall Plan-type programme with a critical mass of
resources be feasible and how best could it be financed,
managed and administered? The chapter on financing below
discusses some approaches in that respect.
67. Efforts to identify ways and means to raise the
necessary levels of finance must be complemented by an
urgent reform of the multilateral structure,
decision-making and management of development assistance
programmes. In its current form, the system may not be
able to carry out what has to be done. It is suggested to
merge all individual United Nations funds and programmes
dealing with sustainable human development into a single
entity, which would result at present in a fund of about
US$5 billion, only about the size of the International
Development Agency (IDA) operating within the Bretton
Woods framework. Such an authority should certainly be
designed to be capable of managing much larger resources.
The creation of a unified United Nations authority for
development would also obviate the need for separate
governing bodies, each administering a small amount of
funds, and for competing bureaucracies.
68. National policies in most countries drive
unsustainable forms of development and encourages global
warming, acid rain, air pollution and related syndromes,
mainly as a result of the use of fossil fuels and
hydrocarbon energy sources. These policies can be reversed
and modified in ways that would not only encourage more
sustainable forms of development but also improve economic
productivity, industrial efficiency and international
competitiveness. The stability of political systems in all
societies will depend on the underpinning of their natural
systems.
69. Each year in the 1990s the world will take on board
another 95 million people of whom 90 will be in the
developing and only 5 in the developed countries. Those 5
million people added each year to the developed nations
during the 1990s will, because of our lifestyles, generate
more greenhouse gases for global warming than all the 90
million additional people in the developing world each
year. Multilateral organizations must begin by raising the
level of international awareness of these problems and
devising approaches to change consumption and
industrialisation patterns.
70. The focus of economic policy at the national and the
international levels has been almost invariably growth.
Yet, the industrialized nations of Western Europe and
North America are losing 4 to 5% of GDP due to
environmental problems. The nations of Eastern Europe are
losing between 6 and 10% and some of the developing
nations are losing as much as 10 to 18%. Those percentages
have been going up slowly but steadily for some years.
There is a need to shift the focus of economic policy to
sustainable growth.
71. 25 million environmental refugees already outnumber
all forms of traditional refugees by at least 50%. These
are people who can no longer gain a basic fundamental
livelihood in their traditional homelands. Within our
lifetime, the total may surpass 100 million. And within
another few decades, the total might exceed several
hundred million. This trend is further driven by a job
famine, especially in the developing world. If the
developing countries are to integrate the already born new
entrants into the workforce, they will have to generate 40
million jobs per year on average for the foreseeable
future against a total workforce of almost 2 billion at
present and 3 billion by the year 2025. Unemployment is
already running at some 25% of the workforce or about 750
million unemployed. This slightly exceeds the entire
workforce in the developed world. Even during the boom
years of the early- and mid-1980s, the United States
economy had difficulty generating 2 million jobs per year.
In 25 years the number of unemployed in the developing
world - 1.1 billion - will equal the population of the
industrialized world. Jobs in this magnitude will simply
not be available. The likelihood is that the number of
environmental refugees will double by the end of this
decade. The world will have to deal with an entirely new
phenomenon in the global arena which is disruptive
politically, socially, ethnically and culturally.
72. Given the enormous number of jobs required in the
developing world alone, new and different types of
technology are called for. As the environmental problems
are closely tied up with unemployment, labour-intensive
technologies must take precedence.
73. In the wake of the Rio summit, a Commission for
Sustainable Development (CSD) was created within the
United Nations and implanted as a subsidiary body to
ECOSOC in the intergovernmental web. The mandate of CSD -
covering virtually everything dealing with sustainable
development - may turn out in practice to be a
considerable bottleneck. Rather than speeding up, it may
retard the adoption and implementation of meaningful
measures. CSD also lacks the involvement of finance
ministers who ultimately will have a significant influence
on national and international policy making, including a
determination of priorities for growth and development.
74. Instead of relying on national reports, CSD should
request the preparation of independent, factual reports on
issues under consideration and thus focus on realities
outside the country context. CSD would then have an
independent basis on which to pass judgement on how
national policies have adjusted, contributed or failed to
contribute to improving the environmental fortunes of the
world.
75. Consideration should also be given to whether there is
really a need for CSD to report to other intergovernmental
bodies, such as ECOSOC or the General Assembly, inducing a
proliferation of meaningless debates. Would it not be
sufficient for CSD to directly report to governments and
to the Secretary-General, suggesting particular areas for
attention or initiatives?
76. Given deficiencies resulting from its genesis,
mandate, composition and operating modalities, doubts have
arisen whether CSD will be able to become the desired,
effective forum to discuss, coordinate and cope with the
cluster of global issues of environmental degradation,
poverty and overpopulation. The suggestion has been made
that it would be desirable to have in this area a body as
powerful and efficient as the Security Council is in its
field. Such a body should be empowered to pass binding
resolutions and to seek enforcement of decisions
(although, to be sure, the Security Council itself is
lacking this very power to impose policies on national
governments).
77. In that context, it may be recalled that in April
1989, an agreement was reached by 24 heads of state from
all continents meeting in The Hague that a High Authority
should be established to set an internationally binding
policy framework for behaviour by governments and the
private sector in the field of environment, which should
be accorded regulatory and enforcement powers, subject to
control by the International Court of Justice. This
agreement, reached in a top-down approach, is yet to be
implemented - and certainly the mandate of CSD falls far
short in that respect.
78. In order to mitigate global warming, measures will be
required on two multilateral fronts. One will be to
strengthen agreements already reached by incorporating
binding and enforcable agreements. The other is a massive
international research programme for the development and
introduction of renewable energy sources - in particular
nuclear fusion, solar energy (photovoltaics) and
geothermal energy -, to develop CO2-reducing technologies
and to promote energy-efficient technologies. The
appropriate multilateral framework for such a
mega-programme, however, would still need to be designed
involving as it will Governments, the scientific
community, the private sector, non-governmental and
intergovernmental organisations.
79. Multilateral efforts should also be intensified,
co-ordinated by the International Atomic Energy Agency
(IAEA), to find solutions for safe and stable nuclear
waste disposal and safe procedures for the decommissioning
of nuclear reactors. Moreover, civilian nuclear programmes
to improve the safety standards of nuclear plants should
be expanded.
THE IMPERATIVE OF LEADERSHIP
80. International organizations neither are nor should be
passive actors waiting to receive instructions or requests
from governments. If the secretary-general of an
organization were to go to the government to ask what he
or she should do, nothing would happen. It is up to the
secretariat to see that the right issues are placed on the
agenda of intergovernmental meetings, that the discussions
take place and that they lead to positive results through
the widest possible participation. Hence, bureaucratic
leadership is indispensable. Organizations must position
themselves in such a way that they can take the lead in
introducing reforms that are needed in order to engage
governments constructively.
81. To ensure constructive bureaucratic leadership, much
more attention must be paid to the selection process for
the leadership positions of the major multilateral
organizations. The profile of an executive head
predetermines in many respects the fortunes and impact of
the organisation concerned.
FINANCING THE UNITED NATIONS AND MULTILATERAL
ACTIVITIES
82. The failure of many international development efforts
over the past 30 years might well be linked to
mismanagement, corruption, lack of capacity and
institutions - and lack of political will. But, most
importantly, it may well have failed for an absence of a
critical mass of finance to jumpstart development and
finance peace-keeping activities. This problem - and its
symptoms - cannot be resolved by organising or
reorganising the United Nations and its economic and
social sectors.
83. Paradoxically, the United Nations and its agencies
struggle with a seemingly permanent financial crisis at a
time when more and increasingly complex tasks are being
thrust on them, entailing substantially growing resource
needs. Ad hoc improvements to the existing funding
mechanisms, such as charging interest on overdue
contributions, may no longer do the trick. The recurrent
financial crisis of the United Nations and of many of its
agencies is in the main caused by the failure of a number
of governments to pay their assessed - and obligatory -
contributions in full and on time. Member governments
should be continuously reminded and urged to pay their
full dues to the regular budget on time.
84. Unfortunately, everybody agrees with the principle,
but in reality the arrears worsen. Under the present
financing structure for the United Nations, it has paid
off not to pay. Paradoxically, if a country does not pay
up its contributions, it finds itself in a better
negotiation situation. Financing cannot be viewed as a
contest, as this fosters a morale which no national system
would tolerate. And no national government would ever run
operations under the conditions which the United Nations
has faced in Somalia or the former Yugoslavia. To overcome
the present predicament, Governments must begin to see
themselves not merely as members with certain rights only,
but rather as clients taking on both rights and
obligations. This might help impart a sense of ownership
and would secure the timely payment of assessed
contributions for the regular budget of the organisation -
which in any case serves to finance only the institutional
backbone of the United Nations. In that context, the
present rules regarding ceilings and floors for maximum
and minimum contributions may also have to be adjusted.
85. The financial fortunes of the organisation are likely
to become even more precarious as governments begin to
look hard at their budget deficits. This will affect the
ability of expenditures for multilateral purposes to
compete with domestic expenditure.
86. Beyond the obligatory costs for maintaining the
institutional infrastructure, activities promoting
sustainable human development - i.e. most of the
developmental and humanitarian work (operational
activities) by the United Nations system (e.g. UNDP,
UNICEF, UNFPA, WFP and programmes by the specialized
agencies) - are at present financed from voluntary
contributions by Governments, pledged on an annual basis
without legal obligations, but driven by the concept of
burden-sharing especially among the major donors. Efforts
over several decades to bring about a system on a broader,
more stable and more predictable basis have yet to be
successful. The Nordic countries have suggested the
adoption of a financing system combining assessed,
negotiated and voluntary contributions. Altogether, there
is a chronic lack of sufficent resources and the present
state of burden-sharing is considered inadequate. Also,
the focus on peace-keeping operations has in many
countries diverted resources from international
development.
87. As a first step towards a new system, criteria should
be agreed upon for involvement and intervention by the
United Nations with regard to sustainable development and
other new global challenges. This will help to determine
whether and how much additional financial resources will
be required. Money may not be the only constraining
factor. One principle must guide future decision-making:
whenever a decision is taken to launch a global programme,
full financing must be ensured. If that is not the case,
the programmes concerned should either be delayed or
alternative mechanisms should be sought.
88. Over the past decades, virtually every United Nations
conference dealing with development or social issues has
produced a separate financing proposal, unrelated to other
schemes. Governments must put a stop to this confusing and
counterproductive proliferation of uncoordinated financial
estimates, proposals and financing mechanisms.
89. Given the global needs, which some estimates place at
some US$ 125 billion annually for activities related to
sustainable development alone, the question arises whether
such volume could be obtained through levies on certain
international activities. Some new and imaginative
financing devices tied directly to services (such as
international air travel/departure fees to be added to
ticket prices; an arms sale tax; international
telecommunications and postal services; certain
transactions in globalized financial markets such as a
levy on speculative capital transactions) could
conceivably generate a steady flow of substantial revenue
to finance such programme activities. But all such
innovations will need full public support and care should
be taken to avoid an erosion of the present level of
general support for the United Nations. Eventually, a
specific facility with appropriate decision-making and
voting procedures might need to be established to
administer and apportion the funds thus raised to the
various programmes - and not financing everything the
United Nations is doing today or intends to do.
90. However, there are drawbacks worth careful
consideration. If these taxes and levies were "painless",
then governments with deficit problems would raise them
for their own purposes. Hence, they may not be nearly as
painless as they seem at first sight. Levying taxes on the
public is unpopular. If the UN were to impose levies, one
other critical argument could be that an undemocratic,
unelected authority imposes taxes instead of a
democratically elected authority.
91. UN peacekeeping operations are currently financed
through separate budgets based on obligatory
contributions. The total peacekeeping budget has grown
from US$ 600 million in 1991 to US$ 2.8 billion in 1992
and in 1993 they reached some US$ 4.3 billion. By now it
substantially exceeds the regular budget, but it suffers
from the same late- and non-payment syndrome as the
regular budget. Entrusting certain responsibilities in
this field to regional organisations might not yield the
necessary effects as most of the organisations concerned
suffer from an even more serious dearth of financial
resources than the United Nations. This may prevent any
action from happening. Thought could therefore be given to
the feasibility of granting the United Nations access to
monetary and currency-related instruments, especially
Special Drawing Rights (SDR), for peace-related activities
only.
92. There is an clear and urgent need that an
international group of independent financial and
administrative experts be set up to examine the
feasibility of various alternative and innovative funding
arrangements proposed and identify tie-ups and governance
arrangements within the multilateral system for
introducing automaticity in future funding arrangements.