U.S. eyes sharing of U.N. budget

By Betsy Pisik
April 6, 2006 
Source: The Washington Times
Original Source: http://www.washingtontimes.com/world/20060406-120637-7074r.htm

NEW YORK -- The United States has proposed a new method of apportioning U.N. dues that would mean sharp increases for countries including China, Russia and India. 

Other rapidly developing countries also would be hit by the proposal, which has been making the rounds in the U.N. budget committee and on Capitol Hill. The U.S. contribution would drop only slightly, from 22 percent to 21.5 percent. 

The proposal was promptly rejected as unfair by a representative of China, who complained that its assessment would increase sixfold, making its share second only to that of the United States. 

Currently, each country's share of the $1.9 billion annual U.N. budget is based on its Gross Domestic Product, while the poorest nations pay a flat rate of .001 percent of the budget -- roughly $19,000 a year. 

The United States, whose contribution is capped by U.S. law at 22 percent of the regular budget, has suggested that contributions be calculated instead according to a World Bank scale called purchasing power parity, or PPP. 

While the United States remains a strong supporter of a more effective, streamlined and efficient U.N., we do feel that other member states can and should contribute more, U.N. Ambassador John R. Bolton said in Washington yesterday. 

PPP is the numbers of units of a country's currency needed to buy in the country the same amounts of goods and services in a different country, he told the House Appropriations Committee's subcommittee on science, state, justice and commerce. 

Mr. Bolton said the GDP numbers now in use can be greatly skewed ... by distortions introduced into the marketplace by currencies which are nonconvertible and by other factors, as well. 

China, for example, has a per capita GDP of about $1,500 based on its current exchange rate, which economists think has been kept artificially low. But using the PPP method, the average Chinese has a purchasing power equal to an American with an income of about $6,200, according to one assessment. 

The United States repeatedly has criticized China for holding down its exchange rate, blaming the action in part for America's soaring international trade deficit. 

China, Russia and other developing countries reject the PPP as a way to calculate U.N. dues, saying the World Bank developed the model as a way to assess countries' consumption, not their wealth. 

We do hope that by the end of the day the capacity to pay will be [retained], said China's ambassador to the United Nations, Wang Guangya, whose country currently pays 2.05 percent of the budget, or $38 million. 

To calculate GDP with PPP is ... unfair to a large number of developing countries, said Wang Xinxia, the Chinese delegation's budget specialist. Under the formula, she said, China would pay more than France, Germany or even Japan -- all of which would see their assessments drop. 

She also said the data that Beijing submitted to the World Bank for the calculation of the PPP was taken from just 11 cities and did not accurately represent the whole country. 

Mr. Bolton acknowledged to the committee that many nations do not collect PPP statistics annually. 

The apportionment of U.N. assessments is reviewed every three years, and must be completed by the end of December so the organization can send the bills to governments in early January. 

The U.S. plan is one of nearly a dozen put into circulation by eight countries, say diplomats, who have begun to sift through competing proposals before sending them on for analysis by the U.N. Committee on Contributions. 

The U.N. peacekeeping budget, which fluctuates each year with the number and complexity of the missions under way, is funded separately, although nations pay in similar proportions. The same is true of the U.N. tribunals for Rwanda and the former Yugoslavia. 

The United States is assessed at 27 percent of peacekeeping, but pays only 25 percent of the budget because of a congressional cap imposed in 1998.