The U.N.'s budget committee meets Friday to consider lifting a spending cap demanded by major contributor countries last year in an attempt to link spending to management reforms. Lifting the budget cap would be a blow to U.S.-led reform efforts.
U.N. controller Warren Sach warned the budget committee this week that, under current spending limits, the world body would spend its last dollar for this year before mid-July. He said cash shortages would force some programs to be cut back even earlier.
The United States, Japan and a group of mostly European countries, which pay more than 80 percent of the U.N. budget, asked for the spending restraints last December as a way of forcing the 191-member body to accept sweeping changes that would give Secretary-General Kofi Annan more authority over budget and staff.
But that authority would come at the expense of the General Assembly. A bloc of mostly developing nations, which holds a majority of the votes in the Assembly, grudgingly accepted the six-month cap last year. But as the spending limit nears, those developing nations have made clear they want the cap removed.
Secretary-General Annan criticized the concept of linking spending to reform. He said developing nations are right to resist other countries' threats to shut down the world body unless it was reformed to their satisfaction, and said he was not concerned about a cash shortage.
"Quite frankly, I think we are all too excited and nervous about this budget issue. I do not see a major budget crisis at the end of the month. The member states ought to be able to work it out," he said.
The United States led last year's call for a spending cap, and Washington's U.N. Ambassador John Bolton has accused developing countries of using tactics that would effectively kill reform efforts. But he denied trying to force a showdown on the budget.
"We're not trying to produce a financial crisis at the U.N., but we are committed to reform. I think the issue for us is how much substantive reform will we have accomplished by June 30. That's what our focus is, that's what our focus has been," he said.
Bolton's push for reform led to a verbal clash this month with senior U.N. officials. In a speech approved by Mr. Annan, Deputy Secretary-General Mark Malloch Brown publicly criticized the Bush administration for failing to defend the U.N. against its critics at home, or to give the world body credit for the good things it has done.
Bolton warned that such talk could backfire, further alienating the American public.
"Even though the target of the speech was the United States, the victim I fear with be the United Nations." he said.
Malloch Brown, obviously stung by Bolton's criticism, fired back.
"This is a time where it is important that truth be spoken, and that everybody understands each other. I don't want to look back in a few months time to have some kind of shipwreck over this budget issue, and to be accused of not having spoken up and warned people that we face a very difficult moment in the organization's life," he said.
Secretary-General Annan last week suggested that what he called the "poisonous" atmosphere between rich and poor nations over reform has cleared up. He predicted that member states would reach agreement on lifting the spending cap by the end of the month.
Other U.N. diplomats point out that the 133-member bloc of mostly developing nations has a majority in the General Assembly, effectively ensuring that the cap will be lifted with or without agreement of the main contributor states.