Broke UN risks collapse, says Boutros-Ghali

DAVID USBORNE

New York

The United Nations is "trapped in a downward spiral" of financial crises that threatens its very survival, the Secretary-General, Boutros Boutros- Ghali, said yesterday, promising to pursue a rescue plan that will include deep staff cuts.

But at the same time he urged member-states to acknowledge the seriousness of the predicament and act to avert it. The implied target of his appeal was the United States, which accounts for a large part of unpaid dues.

"Time is running out," he told a General Assembly committee. "I regard the financial crisis as my top priority ... I will do all that I can to avoid financial collapse." Urging an emergency Assembly meeting, he said the UN was owed $3.3bn (pounds 2.2bn) in membership fees; Washington owed $1.2bn. Officials say that without action, the UN will run out of money before the end of the year.

In an attempt to win back US support, Mr Boutros-Ghali unexpectedly proposed setting a ceiling of "20 per cent or 15 per cent" on the amount any single member-state should pay.At present, the US is called on to provide a quarter of the UN's regular budget.

Mr Boutros-Ghali was speaking a day after Joseph Connor, Under-Secretary- General in charge of finances, proposed that 1,000 jobs be cut from the UN bureaucracy over two years, equivalent to 10 per cent of its payroll, as the only means to make ends meet. The reductions would come mainly at the New York headquarters and at five offices abroad. Agencies such as Unicef and the High Commission for Refugees would not be affected.

Last year, the UN's 50th anniversary, it kept the lights burning only by topping up its regular budget with funds from the separate peace-keeping budget. As a result, it owes $1bn to members involved in peace-keeping, including Britain, and cannot repeat the trick.

Mr Boutros-Ghali said he would appeal personally to each head of government for help; he would ask countries in arrears at least to present him with a payment schedule.

While pledging to protect staff morale, the Secretary-General said necessary budget cuts would make job losses inevitable. He recently proposed a 1996-97 budget that will be the first zero-growth budget in the UN's history. From that, however, the General Assembly trimmed another $256m. "It is evident ... budget reductions are of such magnitude they can be realised only through a combination of staff reductions and non-staff reductions," he said.

By moving to prune its bureaucracy, the UN will be hoping to soften some of the criticism in Washington and especially on Capitol Hill. So far, however, critical members of Congress, who are holding up payment of US contributions, appear less than overwhelmed.

"We're not impressed by 1,000 lay-offs. This is a cynical public-relations attempt to shame Congress," said Marc Thiessen, spokesman of Jesse Helms, arch-conservative chairman of the Senate Foreign Relations Committee. Mr Helms has asked for a 50-per-cent cut in the UN bureaucracy.

The UN is, however, pursuing reform from several angles, including a broader restructuring of the administration and an enlargement of membership of the Security Council.

Of special interest to the US are recently unveiled Franco-British proposals for a review of the formula whereby contributions of member states are calculated. Most notably, the new system would dramatically reduce the burden on Washington and require much higher contributions from the "tiger nations" of South-East Asia.