CAPITAL MARKETS RESEARCH CENTER
ROBERT EMMETT MCDONOUGH SCHOOL OF BUSINESS
GEORGETOWN UNIVERSITY
OCTOBER 28, 1999

INTRODUCTION - David A. Walker
Director, Capital Markets Research Center

I want to welcome you to the first New York Executive Policy Seminar for the Capital Markets Research Center. This is something that we have planned to do for a while. I would like to thank the New York Yankees for not competing with us tonight!

Twenty years ago, I joined the Georgetown Business School faculty as a full-time finance professor. One of the major reasons for our success at the school is the support that we have had from business executives; one of those is our guest tonight, Joseph Connor.

Joe has been a member of Georgetown’s Board of Trustees and the school’s Board of Visitors. When he was chairman of Price Waterhouse, he arranged for some of the seed money to begin what is now the Capital Markets Research Center.

After he completed his term as chairman at Price Waterhouse, Joe accepted the most pain that Georgetown could inflict. It’s even worse than facing those who are soliciting money. Joe became a distinguished professor. That’s not bad, but he had to teach intermediate accounting!

I had the adjoining office to his and we became friends and I tried to learn from his experience. President Clinton and Secretary of State Warren Christopher convinced Joe to leave Georgetown and to accept his current position at the United Nations where he is undersecretary general for administration and management. Only from the position of teaching intermediate accounting could somebody have convinced Joe to accept this responsibility at the UN.

Joe has also served as chairman of the U.S. Council for International Business and he was president of the International Chamber of Commerce. He graduated from the University of Pittsburgh and then went on and earned an M.S. in business at Columbia.

Joe’s going to talk to us tonight about the global challenges facing the United Nations and we know they are significant. This is going to be a rare opportunity for us to hear about this environment.

Joe, it is an honor to introduce you, to have you join our Executive Policy Seminar program and most of all to call you a friend. Thank you for being with us.

ADDRESS - Joseph E. Connor
Undersecretary-General for Administration and Management
United Nations

The UN has always asked the United States to nominate one of its citizens to be an undersecretary-general. Ralph Bunch was the most distinguished and the longest serving, but the post was different then. When the Secretary of State asked if he could nominate me, who could say no? Secretary Christopher told me he was looking for a businessman and especially an accountant, and he also told me I was the only accountant he knew who was a Democrat. My job is to balance the books, and the Secretary-General warned me not to expect the Nobel Prize for bookkeeping.

Beyond my specific responsibilities in finance and management, I serve as a member of the Secretary General’s cabinet and participate in determining policy for the entire United Nations.

UN ACCOMPLISHMENTS AND CHALLENGES

The UN has accomplishments and challenges. Despite what you hear, the United Nations does many things well, not perfectly, but well. The UN has led efforts to end the system of apartheid in South Africa by mobilizing international public opinion through an arms embargo imposed the Security Council.

Since 1951, the UN has protected and assisted more than 30 million refugees from war, famine, and persecution. There are now millions of refugees, mostly women and children, to whom the UN provides shelter, medical assistance and education, as they await resettlement or repatriation, and many of them have been waiting a long time.

Recently during a hearing in front of one U.S. Congressional committee, the Members were discussing UN reform. One Congressman, who had heretofore been silent, rose and delivered an unforgettable statement. He said: “The UN may have its faults, but I was born in a UN refugee camp, and I owe my life to that organization.”

The United Nations Children’s Fund, UNICEF, and the World Health Organization have immunized 80 percent of the world’s children against the six killer diseases: polio, tetanus, measles, whooping cough, diphtheria and tuberculosis. The lives of three million children are saved each year. Twenty million people would have died of smallpox if the UN program had not eradicated that disease.

One UN program has substantially improved literacy rates among women in the developing world. Since 1970, the literacy rate has increased from 36 percent to approximately 55 percent.

UN conferences for twenty years have increased global awareness of global problems: the environment, population, social issues, and housing conditions. No one should fail to recognize the special needs of women, that were emphasized in the Beijing conference several years ago.

The UN does a good job bringing attention to those individuals and countries that many others would prefer to forget. Moreover, the UN has obviously helped to maintain international peace.

Today the UN has 35 peacekeeping missions in the field. Sometimes they are peacekeeping forces, and sometimes they serve as observer missions. They have often been able to restore a measure of calm while a solution to a conflict is developed. The recent successes include: the withdrawal of Soviet troops from Afghanistan, the end of the Civil War in El Salvador, and the emergence of a very shaky government in Cambodia.

We have also had some spectacular failures. In Somalia we could not create a government when the warring parties did not want one.

The UN outreached its grasp trying to keep peace in the Former Yugoslavia, where there was no peace to keep. NATO had the limited mandate the UN was not given, and NATO had a well-equipped military component with response capability. The UN has defined human rights’ standards, promoted and protected human rights, and aided in the process of democratization in Haiti, Mozambique, Nicaragua, Colombia, the Congo, and Ethiopia. We have helped keep many countries from complete collapse, and who else was ready to do so?

At the turn of the new millennium, the United Nations, like other international institutions, has to address some new challenges. We have to account for the changes in the political landscape of the world, especially since the end of the Cold War, and to address the impact of rapid globalization of world affairs.

In a world of increasing specialization, we also must refocus our attention to what a global organization is best suited to accomplish, versus spreading ourselves too thin. We have to rethink how we respond to the political, human rights and humanitarian crises affecting so much of the world, about the means employed by the international community in situations of need, and on our willingness to act in some areas of conflict. We may need to limit ourselves to humanitarian needs and other crises whose daily death toll and suffering demand action.

We all breathe in our global village and we are confronted with new realities. State sovereignty in its most basic sense is being redefined by the forces of globalization and international cooperation.

The UN has a monopoly; we are the only universal organization in the world and we are focusing on our four business lines: peace and security, humanitarian intervention, human rights, and equitable economic and social development. The Security Council members direct the Secretary General ‘s actions on these four issues and the International War Crimes Tribunal.

PEACE AND PROSPERITY

The Secretary General often says that we must find new ways to defeat the age-old deterrents to peace and prosperity. We are going to succeed if we adapt our organization to a world with new responsibilities and new possibilities for peace and progress.

We are restoring the organization to its leading role in the pursuit of peace and security. There is clearly a need to revitalize and restructure the Security Council to reflect the political realities of the world at the beginning of the new millennium.

A restructured Council is needed to deal effectively with the core challenges in the next century. Most of the new conflicts that have erupted since 1991 have been civil ones. Instead of maintaining a cease fire while waiting for the political solution to be negotiated, we are often deployed to help implement a fledgling political settlement.

While still actively involved in the area of conflict prevention, the United Nations has increasingly been called upon to serve as peacekeepers in conflicts of civil and ethnic origin in situations where there simply is no peace to keep. The UN has repeatedly and successfully been engaged in missions where it provided the organizational backbone in the transformation of societies from autocratic to democratic governments. Namibia and Cambodia serve as examples, and hopefully East Timor can be added to this list where the UN will be instrumental in providing assistance in public administration and good government. The prevention of conflict begins and ends with the protection of human life and the promotion of human development.

HUMANITARIAN INTERVENTION

Experience shows that once crises erupt, the international community can move swiftly to address the suffering of innocent civilian victims. The international community is to be commended for its rapid response to conflicts and large-scale emergencies.

Humanitarian aid does not exist in a vacuum. We are often confronted with a natural disaster that compounds manmade disasters of war and tyranny. In those situations we have to ask ourselves whether we doing enough.

In refocusing our efforts towards more rapid, equitable, all-encompassing humanitarian assistance, the UN has already made substantial progress to deliver comprehensive and coordinated responses to those most in need and we will continue to do so.

Another more active and responsive aspect of humanitarian assistance has to be addressed. The United Nations has to be the champion of the development of an international norm in favor of intervention to protect civilians from wholesale slaughter.

The tragic events in Bosnia, Rwanda and Kosovo illustrate the need to resolve this issue. Those on the Security Council who convinced the Chinese to support the humanitarian intervention in East Timor deserve credit.

HUMAN RIGHTS

The prevention of conflict begins and ends with the protection of human life and the promotion of human development. Human security is, on the broadest sense, a major challenge. We are aggressively safeguarding and guaranteeing the human rights. The United Nations has been adapting its human rights machinery in response to the changing demands of the international community. During the Cold War, the UN created the institutional structures for international human rights protection, while supporting the vast process of decolonization. This led to the birth of more than 80 new independent nations.

Landmark UN action like the Universal Declaration of Human Rights provided the blueprint for universally establishing the collective right to self-determination. There is widespread recognition that the 50-year investment in promoting economic development and human rights requires new impetus to secure broader economic and social rights.

ECONOMIC AND SOCIAL DEVELOPMENT

Extreme poverty and exclusion from economic, political and cultural life continue to be the fate of millions in both developing and developed countries. The UN has increasingly emphasized the right to development, which can provide the basics for a strategy of a more comprehensive human rights program. The UN is intensifying its efforts to refocus its human rights program, shifting its main concern to implementation. The Secretary General has placed human rights at the heart of the work of the organization as part of his wide-ranging program to enhance to the effectiveness of the UN.

On the eve of this new millennium, the needs and aspirations of the great many people can still be expressed simply and starkly: safe water, shelter from violence and nature, enough food for the family, employment, and schooling for the children. Much of the world’s population still wish they lived in a state that does not oppress its citizens but rules with their consent. These things are denied to hundreds of millions of people in our global economy.

Globalization has tended to increase and not diminish differences between the haves and the have-nots. There is a continuing challenge to the United Nations and the assistance it renders towards equitable, sustainable economic and social development.

The UN has been accused of being pro-abortion. The UN does not support abortion. We do have active, successful economic development programs in family planning.

The UN will continue to play its role as it has successfully done in the past to provide a framework to reduce poverty. Eradicating poverty is one of the central goals of the UN and its agencies, but its achievement remains elusive. While declining aid flows are part of the problem, increasing aid is not a panacea. In some cases, aid has made a real difference in reducing poverty. What makes the difference is how the aid is used. Where foreign assistance is misused, it is hardly beneficial. New avenues have to be pursued to accomplish our overall goals in the economic and social arena. We cannot undertake such a massive task just by ourselves. We need to engage in a partnership with all aspects of civil society.

We also face the challenge to secure adequate financing to pursue all of our programs to provide services to the international community. With these challenges facing the organization, the most fundamental are the continued financial commitment and active participation of all member states. One indicator of member states’ commitment is how faithfully they support the organization by providing the necessary resources to implement their collective agenda for one program -- peace keeping.

Assessed contributions are being received increasingly late and at times they are being withheld. In October the membership owes the United Nations a total of $2.5 billion, an amount equal to approximately two years of operating expenses. Most worrisome is the realization that our most prominent member is our largest debtor.

US OBLIGATION

Before the November budget bill was enacted by the Congress, eighty-one percent of the total debt and sixty percent of country debt for peacekeeping were owed by the United States. That erodes the UN’s capabilities, at least in some measure. The UN balance sheet has an asset receivable called amounts due from major countries. There are three – the United States, the Ukraine, and the Russian Federation. The Russian Federation has paid off 80 percent of the amount they owed five years ago.

The UN owes 90 member states $800 million worth of payments for the troops and equipment they provided for peacekeeping missions. We have owed this debt for five or six years.

There is, of course, another problem based on the arrears package currently agreed upon by Congress, that member states will have to accept. That is, a portion of the money owed to the UN will have to write off, an amount somewhere near $600 million that the US will never be able to pay. That is a political problem. The loss of U.S. participation is a major concern. That would be a disastrous message to the rest of the world.

US ASSESSMENT

Another difficult problem is to negotiate a reduction in the U.S. rate of assessment. The U.S. share of Gross National Income is 27 percent. The U.S. share of the regular budget assessment is 25 percent and for peacekeeping operations the share is 31 percent. Japan pays 20 percent of the budget. They are not on the Security Council, and if they were, they would not have the veto. They are the largest contributor to many UN agencies.

On the issue of support for peacekeeping, the U.S. has a reasonable concern. For one country to pay 31 percent of the peacekeeping cost is excessive. But the U.S. put itself in that position in 1973. This percentage was agreed upon for which, in return, they won other consideration.

In the words of the British Foreign Secretary, “The UN does wonders with the money we don’t give it.”

Given all the challenges that I outlined to you, I could only add that if the UN did not exist, then it would have to be invented all over again.