Facing budget crunch, UNESCO suspends all spending

UN organization's director-general says "we will have to take radical steps," after US cuts funding in response to Palestinian membership.

By REUTERS
36th session of UNESCO (photo credit: Reuters)
36th session of UNESCO
(photo credit: Reuters)
PARIS - The United Nations' cultural agency has temporarily suspended new program in response to the United States' decision to cut off funding after UNESCO granted the Palestinians membership, the agency said on Thursday.
UNESCO Director-General Irina Bokova told the UNESCO General Conference in Paris the move was because of a $65 million hole in the agency's 2011 budget created by the loss of US funds.
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"We have to take radical steps and we have to take them now," Bokova told the conference in Paris on Wednesday, according to the text of her speech made public on Thursday.
UNESCO, which promotes global education and press freedom, among other tasks, would conduct a review of its activities between now and the end of December, during which new commitments would be put on hold.
A UNESCO spokesperson said priority programs would be maintained, and there were no plans for job losses at the organization for the time being.
The United Nations Educational, Scientific and Cultural Organization was plunged into financial chaos in October when Washington, which provides 22 percent of its funds, froze its contributions following the Palestinian vote.
US legislation prohibits funding for any UN agency that grants full membership to any group that is not internationally recognized as a state.
Bokova said that by reviewing its contractual commitments, staffing levels, travel expenses and communications costs, UNESCO could probably generate savings of up to $35 million for this year's budget.
The agency would then use its $30 million working capital fund to cover the remainder of the $65 million shortfall, but that would leave its finances in a fragile state at the start of 2012.
For the coming year, the absence of US funding meant UNESCO was facing a $143 million shortfall, Bokova said, adding the agency would prioritize its activities and reduce operating expenses further if needed.
US President Barack Obama is talking to members of Congress about funding for UNESCO, but faces fierce opposition in an era of tight budgets, especially from Republican lawmakers.
Bokova appealed for additional voluntary funding from other member states to bolster agency finances, and said she was launching an Emergency Multi-Donor Fund for core priority programs.
"I know this is not a long-term solution, but it will provide the organization with some breathing space to plan rationally within new conditions," she said.
In addition, member states were being urged to make their 2012 contributions as soon as possible.