The British government has just made its support of United Nations agencies conditional on delivering value for money as part of its review of aid spending. Simon Wilson reports.
What has Britain done?
It is making financial support for United Nations (UN) agencies conditional on their delivering value for money. That may not sound radical. But it has drawn lots of attention in the US, where UN-bashers want America (the UN's biggest funder; Britain is fourth, after Japan and Germany) to slash its contribution. Last month, the Department for International Development published its Multilateral Aid Review, which will form the basis for how Britain's government plans to mould future overseas aid spending. Of 43 international agencies assessed, Britain will stop funding four altogether all of them UN agencies. It has warned a further three that, unless they improve, it will stop funding them too.
What are they?
The biggest to lose funding are the Geneva-based International Labour Organisation, with a $1.1bn budget, and UNIDO, a Vienna-based agency that promotes industrial development in poor countries for $518m a year. The review "could not find any evidence of UNIDO having a significant impact on global poverty". But even some of the agencies Britain will keep funding got damning assessments. UNESCO, the UN agency for culture, was slammed for "long-lasting historic underperformance". The $1bn International Organisation of Migration "fills only a marginal gap in the international humanitarian architecture". UNICEF, the main UN agency for children, got the best report.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
What's the case in favour of the UN?
That its humanitarian agencies go where nobody else will (eg, vaccinating six million children when polio erupted in central Asia last year); that it works (via the International Atomic Energy Agency) to halt nuclear proliferation; and, most fundamentally, that it underwrites the system of peaceful co-operation between nations and helps prevent conflict around the world. According to UN figures, the budget for UN Peacekeeping for the year to June 2011 is $7.83bn (the overall UN budget is around $30bn). That's less than 0.5% of global military spending in 2009. Indeed, the estimated cost of all such operations since 1948 amounts to just $69bn.
What has it done with the money?
The UN has had well-documented failures. Disagreements in the Security Council meant the UN failed to prevent the Rwandan genocide of 1994. It failed to prevent the Srebrenica massacre of 1995, even though UN peacekeepers were stationed nearby. It's failed to prevent countless famines, genocide in Darfur, and consistently failed to implement its resolutions on the Israeli-Palestinian conflict. Peacekeeping forces answerable to the UN have even been accused of atrocities, as recently as last year, in Congo. But overall, a Rand Corporation study in 2005 found the UN to be successful in two out of three peacekeeping efforts. The same study compared UN nation-building efforts with those of the US, and found the UN success rate is seven out of eight, compared with just one in two for America acting alone.
Is peacekeeping a good investment?
A study commissioned by Copenhagen Consensus in 2008 suggests so. The paper by Collier, Chauvet and Hegre analyses the costs of conflicts in developing countries, and looks at the outcomes when rich countries dispatch troops, compared to when they just provide financial aid. The authors put the direct cost including lower economic growth of a conflict in a typical developing country at $60bn. Add in the cost to neighbouring countries and the global economy and that grows to an (admittedly speculative) $250bn. Financial assistance is useful: aid worth 2% of a troubled country's GDP over ten years typically lifts growth by one point, and cuts the risk of further conflict. But providing UN peacekeepers offers better value. The authors reckon an outlay of $8.5bn over ten years cuts the risk of conflict by 30 points, which (given the estimated costs) is "worth" between $18bn and $75bn to the world economy.
Yes
1. The UN underwrites global cooperation between sovereign states. (Only the Vatican is not a member.) Without it, we would have international anarchy; it's priceless.
2. The UN is not perfect. But as the second secretary-general Dag Hammarskjld put it, the UN was forged in the aftermath of global war, "not to bring humanity to heaven but to save it from hell", which it does, for about $30bn a year (about £3 per person).
3. As well as the moral arguments, sending peacekeeping forces to conflict areas makes sound economic sense.
No
1. Last year the UN gave Libya a seat on its Human Rights Council. This year its Security Council authorised foreign intervention to stop the regime killing civilians. At least one of these councils is a waste of money.
2. A Heritage Foundation study in 2010 found that the UN's overall budget has grown by 17% a year since 2002. That's dear.
3. It's not the UN that keeps the peace: it's the self-interest of nations. And peacekeeping is not the same as development work and administration, where most of the UN budget is spent.
-
Going part-time could leave a £58,000 hole in your pension: how to plug the gapThere are many reasons for switching to part-time work, but some savers don’t consider the impact on their pension until it is too late
-
Three bargain investment trusts to add to your portfolioThese three investment trusts are bargains compared to their net asset value (NAV), but one fund analyst thinks the deep discounts are unwarranted.
