Cash crunch continues as debt nears $3 billion: UN downsizes and looks for savings.

• Position: Includes excerpts from letters sent by Americans supporting the UN with their small donations - Financial Crisis

Under-Secretary-General for Administration and Management Joseph E. Connor, speaking at a news conference on 29 April, said that a week earlier, the United States--by a significant margin the UN's largest debtor--had approved a national budget that included $256 million ($122 million for the regular budget and $134 million for peace-keeping) more for the UN than the Organization had originally expected. However, Mr. Connor said, the appropriation actually represented late payments for the regular and peace-keeping 1995 budget assessments.

The Russian Federation--the second largest Member State debtor--had earlier announced it would pay $400 million in 1996, of which $46 million would cover its full payment for the 1996 regular budget.

While the cash crunch was expected to ease temporarily as Member States made payments in the coming months, Mr. Connor warned that the UN would be forced to dip into the peace-keeping accounts in August. Even with the projected payments, he forecast a negative cash balance of $200 million in the regular budget by year's end. The UN is precluded by its rules from borrowing from outside financial instrtutions.

While welcoming the latest commitments, Mr. Connor, a former Chairman of the accounting firm of Price Waterhouse, displayed some caution, saying that "promises are good, but cash is better".

Debt and downsizing

The UN debt, which has been accumulating for a number of years, totalled $2.8 billion--$1.7 billion for peace-keeping and $1.1 billion for the regular budget--as of 30 April. The United States alone owes more than half: $1.5 billion in current and past debts for the regular budget and for peace-keeping operations. Russia owes $401 million; Ukraine holds the number three spot, racking up $245 million in debt.

Forced to borrow from its peace-keeping account, the UN is also falling farther behind in its payments to countries that contribute troops and equipment for peace-keeping operations. They are now owed close to $800 million.

Appropriations of $2.61 billion for the regular budget 1996-1997 were adopted on 23 December 1995 by the General Assembly (resolution 50/214). The Assembly, in approving the budget, requested that reductions amounting to $154 million be achieved during the biennium and Secretary-General Boutros Boutros-Ghali was asked to report back with proposals to achieve the necessary additional savings.

On 28 March, the Secretary-General said that an overall reduction of approximately...