UN nears budget crisis if reform plans unresolved

Developing nations and rich countries face a showdown on Friday over UN management reform proposals that could lead to a drastic cut off in funds to the United Nations.
An angry meeting of a powerful UN General Assembly committee, which controls the budget, on Thursday ended without agreement on a resolution from developing nations that rich countries fear would sink UN Secretary-General Kofi Annan's proposals to overhaul the bureaucracy.
At issue is how much control Annan should have over reallocating jobs and money without approval from the budget committee where developing nations have a majority but the United States, the European Union and Japan pay 80 percent of the dues.
A vote on the resolution, drafted by the Group of 77 of developing nations, is expected on Friday after another round of late night negotiations. The measure, on behalf of 132 developing countries and China would reject or delay some key proposals, fearing the West would control the bureaucracy.
"The report of the secretary-general had an unfortunate underlying theme - that is to change the role of oversight by the member states of the General Assembly," said South African Ambassador Dumisani Kumalo, chairman of the Group of 77.
The United States and others have tied progress on management reforms to their approval of refinancing the UN budget on June 30, following a bitter fight in December that led to a new polarisation between rich and poor countries. They could well withhold $950 million needed to pay UN salaries in after June 30.
"If we have a vote, this will have consequences which no one would like," said Austrian Ambassador Gerhard Pfanzelter on behalf of the 25-nation European Union, which collectively pays 38 percent of the budget. Annan last month introduced a 33-page blueprint on overhauling the UN bureaucracy, in part an outcome of scandals in the now-defunct Iraq oil-for-food program.
He sought more financial oversight, simplified hiring and firing procedures, career planning, staff buyouts, a modern information system as well as flexibility in assigning staff and resources. The changes are estimated to cost $500 million.
The wealthy nations do not want any final decision now on Annan's plans but prefer to wait for detailed reports he promised in May and June and then again in September. However, they back Annan's proposal to give him more authority on where to spend funds and that a small, representative group of nations approve some of his choices and report back to the larger membership. But Kumalo said, "In South Africa we fought against small groups deciding for others.