UN Makes First Staff Cut Since 1945 in Budget Agreement

The United Nations authorized a staff cut for the first time since the international body was created in 1945, yielding to pressures from member states to reduce spending as governments suffer from financial strains.

The UN General Assembly yesterday approved a net reduction of 219 positions, or 2 percent of all UN posts. It also approved a one-year freeze in compensation and a two-year freeze on benefits allowance.

Major contributors to the UN budget such as the U.S., the largest donor, in 2010 began pressuring the New York-based UN to reduce its spending as they endured austerity measures to recover from the global financial crisis. Negotiations pitted major developed countries that pay most of the bills against developing nations that seek to increase UN development spending.

The UN’s staff cut is “crucial” and will “eliminate unnecessary, duplicative or outdated posts,” Joe Torsella, the U.S. ambassador to the UN for management and reform, told the General Assembly yesterday. “At a time when the budgets, crucial services of many common system organizations have been squeezed, these measures will hold compensation costs in place, until we can act in the next session,” Torsella said.

The staff cut is part of the 2014-2015 UN budget and a settling of accounts for this year’s extra-budgetary spending. The UN’s 193-member states approved $5.53 billion for the next two years, a 1 percent decrease from the previous two-year period.

‘Recosting’ Study

The U.S. had also sought in vain to reduce the amount retroactively billed by the UN for 2013. The UN Secretariat is allowed to report additional yearly expenditure through a mechanism called “recosting,” to account for fluctuations in exchange rates, changes in yearly budget appropriation and cost of living adjustments for UN staff.

While there were no “recosting” reductions, the General Assembly instead ordered an independent study of possible options to change the recosting system.

The budget approved yesterday doesn’t include peacekeeping, which for the fiscal year ending June 30, 2014, is about $7.54 billion, or the costs to operate several major UN agencies funded by voluntary contributions from member states.

To contact the reporter on this story: Sangwon Yoon in United Nations at syoon32@bloomberg.net

To contact the editor responsible for this story: John Walcott at jwalcott9@bloomberg.net

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