UN agencies and the budget - Richard S. Williamson's statement - transcript

Statement before the Subcommittees on Human Rights and International Organizations and on International Operations of the House Foreign Affairs Committee on February 23, 1988. Ambassador Williamson is Assistant Secretary for International Organization Affairs .

This is my first appearance before a congressional committee since my recent confirmation as Assistant Secretary of State for International Organization Affairs. It is a pleasure and honor to be here.

Since I will be joining Ambassador Walters [U.S. Permanent Representative to the United Nations Vernon A. Walters] 2 days from now in a presentation for you on the United Nations, I will focus today on other parts of the UN system. I would, of course, be pleased to join with my colleagues at the Department of State in addressing all 46 organizations covered by the Contributions to International Organizations (CIO) account, if and when you or your colleagues elsewhere in the Congress are interested. In like manner, I look forward to addressing the significant work undertaken in behalf of economic development through our voluntary contributions to such organizations as UNICEF (UN Children's Fund], the UN Development Program, and the UN Environment Program.

My statement for the record today, therefore, highlights the following three areas:

* My initial impressions of the substantive work undertaken by the major technical and specialized agencies of the United Nations, with particular emphasis on the extent to which they serve important U.S. national interests;

* The results of efforts encouraged by the U.S. Congress and the executive branch to achieve reform in the decisionmaking procedures on budgetary matters in these technical agencies of the United Nations; and

* Finally, the criteria-based interagency process used by the executive branch, in close consultation with the Congress, to allocate the limited funds available for fiscal years (FY) 1988 and 1989. The Productive Work of the UN Agencies

These subcommittees will be discussing the work of the United Nations during the hearing 2 days from now. We can go into more detail on the United Nations at that time. However, suffice it to say here that many believe that, for too long, the debate over the United Nations in New York, and the need for specific changes in its administration, have overshadowed much of the work of the smaller but very important technical agencies in the UN system.

In general, I believe that the technical agencies, such as the World Health Organization and the International Atomic Energy Agency, have received insufficient public attention. Many Americans are not familiar with the important and constructive work being performed by many technical and specialized agencies in the UN system. All of us here today are painfully aware of the global challenges resulting from acquired immune deficiency syndrome (AIDS), the tragic hijacking of the cruise ship Achille Lauro, the recent bombing of Korean Air Lines Flight 858, and the widespread fear and legitimate concerns that followed the accident at the Soviet nuclear power plant at Chernobyl.

We also are familiar with less dramatic but important continuing problems such as food shortages in subSaharan Africa and other places, the high incidence of disease and malnutrition among children of the developing world, the need for effective airport security in the wake of continuing international terrorism, the growing concerns about drug abuse and drug trafficking, and the ever-present threat that more countries will develop nuclear weapons, with all of the attendant insecurity and tension that will bring to the international community.

In dealing with such sobering problems, there is a clear need to work steadily to achieve effective international cooperation. That is precisely what is happening in the majority of the technical and specialized agencies in the UN system today. I would not pretend that those agencies present us with no problems. They do. These organizations, like the U.S. Government, are not perfect. But the work they do in regard to these pressing international problems is impressive. I would like to touch upon the activities of just a few of these agencies to illustrate their importance to U.S. national interests. It was not by accident-nor without good reason-that the most recent economic summit looked to many of these organizations for leadership and critical followup on problems requiring a multilateral solution.

The World Health Organization (WHO), which led the fight that eradicated smallpox, is now leading the international effort to coordinate the attack on the pandemic of AIDS. It has played a major role in development of oral rehydration salts, which are used to combat diarrheal diseases, and it is working to ensure protection of children everywhere against six major childhood diseases. The successful completion of work on a new vaccine against malaria, carried out by WHO in cooperation with U.S. Government agencies and others, will have revolutionary social and economic impact throughout the world.

The International Atomic Energy Agency (IAEA) serves as the cornerstone of international efforts to prevent the further spread of nuclear weapons. IAEA serves as the focal point for efforts to improve nuclear safety practices around the world. Its safeguards constitute a unique international system of verification, providing essential assurance that nuclear material in peaceful nuclear programs is used exclusively for peaceful purposes. The United States is required by law to apply IAEA safeguards to U.S. nuclear exports, which currently total approximately $1 billion a year. It for some reason, IAEA were not able to apply safeguards, the United States would have to either discontinue its nuclear exports or initiate a bilateral system of safeguards, which would be costly and possibly less effective than the current safeguards system. Neither approach would be beneficial to the U.S. taxpayer.

The International Labor Organization (ILO) mirrors to the world the U.S. democratic traditions of Labor, management, and government working together. It is strongly supported by U.S. Labor and employer organizations because it has been highly effective in setting minimum standards of employment for workers all over the world. Its work in the area of human and workers, rights is a role that was endorsed by the Senate just in the past few weeks as it agreed to the ratification of two key ILO conventions.

The World Meteorological Organi zation (WMO) has pioneered new efforts to forecast the weather and to bring these benefits, not only to farmers around the world but also to communities everywhere. Its work is essential to aviation, shipping, and agriculture, as well as to storm detection and warnings.

The Food and Agriculture Organization (FAO) and its related agencies are helping the world come to grips with food shortages and drought and to eradicate pests and animal diseases. Its fisheries and forests programs are of great importance to the U.S. private sector, and the work it does with WHO in setting international food standards is of great value to U.S. food industries.

The International Civil Aviation Organization (ICAO) promotes safety in air navigation by setting up commonly accepted standards for radio transmission, landing systems, and communication. Its pioneer work in combatting international terrorism has led to creation of new procedures for dealing with airplane hijackings, bombings, and attacks on airports. ICAO continues to serve the international community by facilitating discussion of the outrageous bombings by North Korea of Korean Air Lines Flight 858.

Similarly, the International Maritime Organization (IMO) is promoting, through a new convention, safeguards against terrorism at sea, such as the vicious attack on the passengers of the cruise ship Achille Lauro, which resulted in the murder of a U.S. citizen (Leon Klinghoffer).

The UN Industrial Development Organization (UNIDO) encourages private sector emphasis in the developing nations. This approach, in turn, stimulates the local economy and leads to increased markets for U.S. goods and services. UNIDO also promotes other goals pursued by the United States-most notably, focus on small enterprise and rural development in the Third World.

I could go on, because there are many agencies in the UN system which make vital contributions to America's national interests and to U.S. foreign policy. One of my purposes as Assistant Secretary will be to bring increased information about the work of these agencies to the Congress and to the American people. We cannot let their work go uncriticized, and I intend to remain vigilant. But, our policy toward them needs to be constructive and supportive. I hope the Congress will assist in this effort.

Movement for Change

Let me now turn to the efforts undertaken by this Administration, in concert with the Congress, to bring about improvements in decisionmaking procedures on budgetary issues. The relevant legislation-that is, the Kassebaum-Solomon amendment and the modifications included in the State Department authorization bill adopted at the end of 1987-focused on these processes. The recent authorization legislation says that no payment of an assessed contribution can be made to any specialized agency if the payment would cause the U.S. share to exceed 20% of the budget, unless the President determines and reports to the Congress that the agency has made substantial progress toward the adoption and implementation of decisionmaking procedures on budgetary matters in a manner that substantially achieves the goal of greater financial responsibility.

On the surface, the standard voting system in the UN agencies is one nation-one vote. But, in fact, the major donors have substantial influence in the UN's technical organizations. We and the other major contributors are most outspoken on matters of budgetary concern. Indeed, representatives of the U.S. Government often are so outspoken that representatives of some of the agencies accuse us of being able to exert undue influence over their work simply because we are responsible for such a large portionof the budget. On programmatic matters, U.S. expertise on technical issues such as health, the environment, agriculture, Labor law, copyrights, weather research, nuclear energy, aviation or maritime affairs, just to give a few examples, is so pervasive and outstanding that we provide leadership in developing these programs. The United States exerts a major influence in shaping the direction and activities of these organizations, regardless of the one country-one vote situation

In response to the Kassebaum-Solomon amendment, the United States pursued this financial issue first in the United Nations and achieved what appeared to be a promising victory in late 1986-the prospect of major decisions on budgetary questions reached in a relatively small committee, by consensus. President Reagan issued a statement commending the United Nations for this constructive action. Followup implementation of the major reforms in New York will be addressed in more detail at the congressional hearing on February 25.

In the specialized agencies, with the exception of FAO, there has been a positive response to U.S. requests for reform. In fact, some of the agenciessuch as the International Civil Aviation Organization-already had in place con sensus-based decisionmaking procedures that exceeded even the standards of the agreement approved by the UN General Assembly. If we look at them one by one, the results of reform in the technical and specialized agencies of the United Nations are as follows.

* The World Health Organization executive board in January 1987, just 2 months after the UN General Assembly decision, adopted its own resolution on "cooperation in program budgeting." This resolution asked each of the WHO governing body units to work toward consensus in reaching conclusions on budget proposals. This commitment included even the 31-member executive board, which has the most significant impact on budget review.

The revised WHO procedure will help to solidify the longstanding overall satisfaction of the United States with the WHO's administration and management. WHO staff have been open, coop erative, and responsive to U.S. interests. Our delegations have often held up WHO as a model for emulation by other UN-system agencies at the same time we have praised WHO programs that promote primary health care and coordinate the international effort against AIDS. The revised decisionmaking system is now in operation. In June 1987, the WHO Program Committee agreed on a planning ceiling for the 1990-91 program budget. And, during 1988, the regional committees and the program committee will be developing consensus proposals on the next budget and working out other mechanisms to ensure more effective and efficient operations.

* At the International Labor Organization, the conference in 1987 adopted a key reform measure that provides an additional consultative step for the review of main program options and resource parameters in off-budget years. Like the WHO procedures, this approach will facilitate development of consensus at a key point in the budget development process. The new mechanism links ILO's medium-term plan with biennial programs and budgets, and identifies program priorities for 1990-91 and subsequent periods within specific resource levels in real terms. In line with the new procedures, the Program, Finance, and Administrative Committee and the governing body of the ILO are considering the mediumterm plan, including the identification of priorities and a budget ceiling for 1990-91, at their meetings this month (February).

* At the International Civil Aviation Organization, the United States traditionally has been a major player in the review of the proposed budget. We have joined the customary consensus and have praised ICAO for both its good financial management and its important contributions to the safety and security of international civil aviation. Nevertheless, we promoted adoption of a decision at ICAO to ensure continuation of this consensus-based approach to budget and financial issues, and, in 1987, the ICAO council reaffirmed the organization's commitment to the consensus principle.

I would note that, in terms of ICAO's substantive work, both the Tokyo and Venice summits endorsed ICAO's action on air traffic and airport security, which had been pursued despite the budgetary constraints on ICAO. Indeed, these constraints were so severe that ICAO not only sought to be responsive by lowering assessments for 1987 and 1988 but also found it necessary to institute a hiring freeze, still in effect in 1988. The organization also seriously considered giving notice to a number of staff when severe cash flow problems led to uncertainty about ICAO's ability to continue paying salaries.

* The World Meteorological Organization has been responsive to U.S. proposals for UN budget reform, particularly efforts to provide major donors wth more influence in the organization. In response to U.S. efforts to cement into place the normal consensus-based decision procedures, the WMO secretariat in 1986-even before action was taken by the UN General Assembly in the fall of that year-proposed the establishment of a Financial Advisory Committee to advise the Secretary General on budgetary and financial matters. The WMO Congress, meeting in May 1987, approved the proposal and created a committee composed of the eight largest contributors (including the United States), the president of the executive council, and six regional representatives. The committee, which works by consensus, began its work immediately, holding its first meetings during the 1987 session of the WMO Congress.

The new Financial Advisory Committee will consider all WMO budgetary and financial matters when the WMO executive council holds its annual meeting in June 1988. The agenda will include recommendations on program expenditures for 1989, which must be within the overall 4-year budget ceiling established by the 1987 Congress.

* The UN Industrial Development Organization was created in 1966 to accelerate the process of industrialization in developing countries. It became a specialized agency of the UN system only recently, on January 1, 1986. The constitution and rules of procedure for the newest specialized agency, including many of the provisions that we are now discussing, were developed with major input from the U.S. Government. They already permit significant input by major contributors. To supplement that input, the general conference in 1987 adopted by consensus a decision on improvements in the program budget process, following up on a proposal initiated by the U.S. delegation to the Program Budget Committee meeting in March 1987.

Among the results during 1986 and 1987, its first 2 years of operation, UNIDO has reduced staff; cut some programs and increased others, consistent with U.S. priorities and interests; adopted budget reforms urged by the United States; and achieved negative real growth in the budget. We still have problems with the orientation of some UNIDO program activity, but the operation of consensus-based decisionmaking on financial issues is coming along well.

Of the major technical agencies in the system, the Food and Agriculture Organization is the one that has not responded well to longstanding calls for reform from the majority of its largest donors, including the United States. For some time, the United States and other FAO member states have been asking for revisions in budget presentations in order to obtain a clearer view of proposed or actual expenditures. However, the secretariat has refused to comply fully.

Specific reform proposals were made in 1986 and 1987 and rebuffed. For example, the U.S. delegation to the FAO council in June 1987 was ruled out of order because we proposed discussion of needed decisions on reform in the organization. At the FAO conference in November 1987, the United States introduced a budget reform resolution, supported by other major contributors. But the conference voted overwhelmingly against the U.S. resolution. It also rejected overwhelmingly the reform proposals put forward by the Nordic nations, the United Kingdom, Canada, Australia, Japan, New Zealand, the Netherlands, the Federal Republic of Germany, and others. Representatives of 12 major donor member states of FAO (the so-called Camberley Group, named for the group's first meeting place) met in Helsinki in early February and reaffirmed their commitment to pursue reform in the FAO.

The likely result of the situation to date is that the President will not be able to provide for FAO the determination required in the recently revised Kassebaum-Solomon legislation. Nor can the FAO rank high among the 46 organizations in the CIO account, based on the criteria for distribution of scarce funds indicated by the Congress. We have, therefore, proposed that the funds for FAO be set aside in the hope that the FAO will make progress on reform in the near future. We are continuing longstanding efforts to work with other FAO member states and the FAO secretariat to help assure that FAO serves the needs of those who require assistance most, the hungry and malnourished in developing nations. The United States, as demonstrated by the magnitude and range of its contributions in this regard, is strongly committed to reducing the needless tragedy that afflicts countless millions in the developing nations.

In sum, I would argue that, in the majority of the UN technical agencies, we have achieved the goal set by the Congress. That is, we have ensured that the major donors, especially the United States, have significant influence over budgetary and administrative questions. My intention, as I take over the reins as Assistant Secretary, is to maintain the momentum that has been established and to ensure that the new procedures put into place actually work.

Specifically, for this year, I will urge that U.S. delegations to meetings of UN organizations do the following:

* Continue to ensure that key budget decisions are taken by "consensus," at least in the fora subordinate to the chief governing bodies where there is a clear right to a vote;

* Continue to ensure "major donor"(i.e., U.S. Government) representation on the key committees in the budget process;

* Continue to work to ensure establishment of ceiling8 for development of the next budget, possibly with subceilings for subsidiary parts;

*Work to create new committee mechanisms to serve these purposes if the existing ones are not effective or cannot be modified adequately;

* Develop procedures for item-byitem review and decisionmaking on the components of budgets, rather than have delegations foreed to deal with an entire budget package;

* Continue to use mechanisms, or to develop new mechanisms as needed, to require the organizations, which now make their own internal decisions on the creation of new program activities and the elimination or curtailment of old ones, to present decisions on priorities to a representative group of member states for review or revision;

* Reinforce efforts to make secretariat operations more transparent, where this appears necessary, in order to let member states have a clearer understanding of the real components of a budget proposal and on activities actually pursued during the preceding cycle (perhaps encouraging the establishment of new member-state evaluative mechanisms); and

* Ensure that U.S. Government domestic agencies, and others involved in the substantive operations of the UN organizations, join officials at the Department of State in renewed efforts to evaluate the work of the UN organizations, so that we can make more concrete proposals for reducing, eliminating, or expanding specific activities or for starting new ones.

All of these steps are possible, as they always have been. U.S. representatives to the UN's technical and specialized agencies have always advocated improved efficiency and effectiveness. There is no reason not to continue pursuing these goals. Indeed, there are important reasons, given the prospect for the foreseeable future of too few resources to meet seemingly unlimited needs, to press on with vigor in behalf of setting priorities more thoughtfully, employing budgetary discipline, and planning ahead.

I understand that the purpose of the legislation of recent years was to help assure that the United States has major influence on important deisions within the UN system, including those made within the technical agencies. Now, by and large, we have done that. The opportunity before us now is to take advantage of the enhanced influence that we have in order to promote the substantive, technical program activities that we believe are in the best interests of the agencies themselvesand, most fundamentally, in the best interests of U.S. taxpayers.

Allocation of Resources

As you know, from the account for Contributions to International Organizations-we pay the assessed contribution for the United States to 46 different international organizations. Only one of those 46 organizations is the United Nations. The United Nations-obviously the biggest of the agenciesaccounts for about 34% of the requirement for U.S. contributions. The other 66% goes to the UN's technical agencies, as well as to other important organizations such as NATO [North Atlantic Treaty Organization], the OECD [Organization of Economic Cooperation and Development], and GATT [General Agreement of Tariffs and Trade].

But when the overall appropriation falls below the total requirement for U.S. assessments-as it has for the past 3 years-a serious blow falls on the entire account, including the UN% technical and specialized agencies. In FY 1988, the appropriation covered 84% of the request ($480 million out of $571 million), which was a substantial increase over that of the previous year, but it still left many of the specialized organizations hurting.

The question for all of us, Congress and Administration alike, is how we make payments to these organizations when the appropriations are not sufficient to meet the total requirements. As you know, the Appropriations Conference Committee Report (for the FY 1988 continuing resolution-PL 100-202) asked the Department of State to evaluate international organizations objectively, utilizing Eve specific factors, in order to rationalize the decisions made by the Department in making payment of assessed contributions to these 46 organizations.

We have sought to establish a disciplined set of criteria for use in assigning funding priorities. The criteria that were developed included the following:

* The level of direct benefit or substantive importance of the ageney's work to the United States in political, strategic, or economic terms;

* The extent to which the agency has achieved program budget reform or an effective budget process;

* The quality of the agency% resource management, including financial and personnel resources;

* Importance of current political and operational factors, such as key elections, Soviet influence, or placement of Americans in key positions;

* The level of domestic U.S. support for the organization and/or its programs;

*The possible negative impact on U.S. interests and on the organization, should there be shortages in U.S. funding; and

* Organization performance in fulfillment of its chartered mission.

The first decision was to pay in full the U.S. assessments to the 30 smallest organizations in the account. These are highly specialized and generally effective bodies requiring relatively small contributions. Their total requirements were $8.6 million for FY 1988. None was above $1 million, and most were well below it.

The next step was to apply the criteria I have just described to the remaining 16 agencies in the account, which receive 98.5% of the appropriation. These were the UN, OECD, NATO, GATT, WHO, FAO, ILO, WMO, IAEA, UNIDO, ICAO, OAS [Organization of American States], PAHO [Pan American Health Organization], IICA [Inter-American Institute for Cooperation on Agriculture], ITU [International Telecommunications Union], and CCC [Customs Cooperation Council].

As a result of careful study of the criteria, by the Department of State and other interested U.S. Government agencies, these 16 agencies were placed in four clusters, with each agency in each cluster to receive approximately the same percentage of the U.S. assessment, For example, the WHO and the IAEA will receive 100% funding, and the United .Nations will receive 75%.

The results of this clustering exercise form the basis for the reprogramming letter that is being sent forward by the Department. It is, of course, unfortunate that we cannot fund in full all of the organizations that we believe are serving us well, particularly considering the treaty obligations that attend our membership in each of them. But, in the circumstances, we believe the outcome is both reasonable and fain We hope that the Congress will be supportive of our approach, which was in fact stimulated by the criteria suggested by the Congress.

I suspect that the committee might well ask why it is that the Administration has not requested funds for FY 1989 sufficient to meet total requirements. This is a legitimate question, particularly given my generally favorable attitude toward the UN's technical agencies and my concern that they may be damaged by the shortfall in overall appropriations for the CIO account.

The financing question will, of course, be discussed before the appropriations committees in the coming weeks. But it can be noted now that the total of U.S. requirements for funding from the FY 1989 budget is $657 million. The President's budget requests $490 million, creating a shortfall of $167 million. That shortfall will inevitably have a negative impact on the UN's technical agencies.

The reason for the President's budget request, quite simply, is the agreement at the budget summit that occurred at the end of 1987. It was an agreement between the Administration and the Congress that, in order to achieve the Gramm-Rudman-Hollings ceilings, overall FY 1989 requests would be no more than 2% over the FY 1988 levels. Our FY 1989 request of $490 million for CIO account-2% over the level approved for FY 1988-is in fine with this agreement. We are now in the process of applying the same criteria-based approach used to allocate FY 1988 funds for distribution of FY 1989 funds.

Conclusion

I hope that this review has been helpful in placing the UN's technical and specialized agencies in the context of the overall UN system. My experience based primarily upon my work as Ambassador to the United Nations Agencies in Vienna-is that the technical agencies are often misunderstood in the United States, and too often caught up in questions about the New York-based United Nations. This is unfortunate. Their work in health, agriculture, aviation safety, nuclear energy safeguards, and many other areas is vital to this country and to our policy affecting the rest of the world, in particular the developing nations. How the U.S. Government treats those agencies is worthy of the deepest consideration.

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