Annan prepares for privatisation of UN
By Joe Lauria in New York and Fraser Nelson
12 February 2006
Pressure from US forces Secretary General to put reforms in
place
THE United Nations has drawn up plans to privatise the bulk of its
staff at its New York headquarters or have their work done more
cheaply overseas. The move is in response to mounting demands for
reform from the United States, its biggest paymaster.
The Business has learned that Kofi Annan, the UN secretary general,
has commissioned a study into the outsourcing of the department for
General Assembly and Conference Management, the main UN
decision-making body whose officials issue about 200 documents a
day in six languages.
The move comes as the UN grapples with the oil-for-food scandal in
which officials have been accused of taking bribes from Saddam
Husseins regime.
Annan will report by the end of February on management reforms to
the General Assembly. According to an internal UN document
previewing Annans report obtained by The Business, he will include
proposals to outsource or off-shore select administrative
processes suggesting its New York headquarters may shed
staff.
Annan is reviewing the study conducted for the UN by US consulting
firms Epstein & Fass Associates and Faulkner & Associates.
Their preliminary study, which The Business has seen, makes no firm
recommendations. But it examines three privatisation possibilities,
from the most conservative to the most radical:
* Maintain the status quo of in-house operations, but save money
and create efficiency through greater use of technology and
eliminating more than 200 jobs through attrition by 2009;
* Retain a core of in-house functions while outsourcing some
operations, along the lines of a similar exercise by the World Bank
and IMF;
* Spin off the General Assembly department entirely as a
for-profit, private company or an independent unit with some
control by the secretariat.
The study gives frank assessments of the risks with privatisation,
especially guarding privileged information and interrupting
projects if new contractors are hired. It concedes privatisation
may not save money. Outsourcing does not guarantee reduced cost,
which depends on market factors, and also
on how outsourcing is
managed, it says.
The Bush administration has made an overhaul of management a
centrepiece of its UN reform programme. John Bolton, US ambassador
to the UN, once said that if the New York headquarters lost 10 of
its 38 floors, it wouldnt make a bit of difference. He is
leading an effort to move the UN towards the efficiency of a
private company, including transforming the deputy secretary
general into a chief operating officer and demanding that tasks are
done by merit, not geography.
Christopher Burnham, a former Bush State Department chief financial
officer, was named UN undersecretary general in charge of
management last June and declared the UN needed to refocus on
those areas where we have a competitive advantage.
Rick Grenell, spokesman for the US mission, told The Business the
Bush administration had no position on outsourcing. Our position
is that the UN needs to function better, Grenell said. We need to
look at all ways to make that better. No one is talking about
cutting jobs or turning out lights. Talking about outsourcing is
way ahead of the game.
But there has been growing pressure from Washington on the UN to
cut costs. The US pays 22% of the UNs general budget. France pays
6.4%, the UK 5.5%, China 1.53% and Russia 1.2%. All five can wield
a veto on war-making decisions.
Congressman Henry Hydes proposed UN Reform Act of 2005 would
withhold 50% of US dues unless at least 32 of 39 proposed reforms
are adopted a clear indication of pressure intended to break the
deadlock.
Some staff fear privatisation would cause a cultural shift at the
organisation where international civil servants have been chosen
through competitive exams for more than 60 years.