Enough reform at UN to avert funding crisis?

The US and other major bankrollers weigh whether to follow through with a funding cutoff at the end of June.

It's an active time at the United Nations: The United States is counting on it to take over peacekeeping operations in Sudan's Darfur region by fall. African countries are looking to the UN to redouble efforts to combat AIDS, in the wake of a recent policy review. And the UN's new Human Rights Council and the Peacebuilding Commission – both outgrowths of reforms following the oil-for-food scandal – convene this week for the first time.

It might seem like a curious time for a funding cutoff that would, in effect, shut down the UN. But that's what could happen by the end of June – the result of a tug of war over UN reform between developing countries and the organization's largest bankrollers, chief among them the US.

Impatient with the pace of reform in the areas of management, accountability, and transparency, the US and other large funders such as Britain and Japan managed last year to impose a little arm-twisting. The UN's 2006 budget was approved, but with a cap to take effect after six months if real reforms had not been implemented.

At the other end of the rope stand many of the world's developing countries, led by the Group of 77, who view the rich countries' demands with suspicion. To them, the reforms are really a power grab designed to wrest from the General Assembly – where majority rule still holds sway – what power it still holds.

The question now is whether the US in particular sees enough improvement in how the UN operates – from accessibility to internal documents (a key beef in the oil-for-food investigation) to how it keeps track of its finances – to lift the funding cap.

The US may threaten a funding cutoff until the final hour, some analysts say, in an effort to extract as much reform as possible. Others say that approach could backfire.

"It doesn't really bolster the case for reform to inject all these ultimatums. It just leaves everybody less open to compromise," says one UN official who asked not to be named because the reform discussions are at a crucial moment. "It's a hard sell to say, 'If we don't get exactly what we want, we'll pull the plug on you.' "

The spending issue is contentious enough on its own, but flames were fanned recently by a verbal skirmish between John Bolton, US ambassador to the UN, and the UN's Mark Malloch Brown, No. 2 to Secretary General Kofi Annan. In a recent New York speech, Mr. Brown complained that the US government calls upon the UN to do more all the time, yet does little to defend it publicly against attacks by influential detractors such as conservative radio personality Rush Limbaugh and FOX News.

Mr. Bolton, in turn, called the comments "the biggest mistake" he had heard a UN bureaucrat make in a long time and an attack on middle America. He urged Mr. Annan to repudiate the speech, warning of dire consequences – presumably by a pursestring-holding US Congress – if it was not. Annan demurred. The speech was "not a criticism of the United States, it is a call for greater US involvement in the UN," he said through a spokesman.

After expressing alarm early last week that UN operations were on the verge of coming to a halt, Annan now expresses mild confidence that imposition of the budget cap will be avoided. "He now sees the atmosphere for reform improving," says the UN official. "The feeling is that everyone stood at the precipice and decided we are all better off with the UN working, and working better."

Bolton, too, was sounding less categoric by the end of last week. After a meeting with the G-77 countries, he said the US, Japan, and the European Union were looking for "substantial progress" in the three areas of management reform, transparency and accountability, and oversight ability. Bolton's more cooperative tone reflects a distaste in the Bush administration for provoking international controversy at a time when it is trying to mend fences and call more often on institutions like the UN, say some observers.