169. Telegram From the Department of State to the Mission to the United Nations 1

173125. Ref: USUN 2668.2 Subject: Austerity Measures for UN.

Following are possible austerity measures which UN might take to avoid bankruptcy of which SYG has warned (A/8401/ADD.1).3

UN could gear expenditures to its actual cash flow rather than to the level of the approved expenditure budget with the goal of balancing cash inflow and outflow. A cash flow system would negate the effects of the Franco-Soviet withholdings and force the SYG to determine priorities. Admittedly, the system would operate in a jerky fashion initially because of the lax payment habits of the members. It would be up to the SYG to orchestrate payments so as to avoid this. If members want programs they can either pay their bills or do without. (Concept would somewhat resemble US system in that budget level would amount to authorization while actual cash receipt would be like appropriation level.)
The switchover to a cash flow system would entail some immediate retrenchment. Some measures which the Organization might take to achieve this goal within 90 days are:
Postponement of purchases of new equipment except where the item to be replaced is defunct.
A stretch-out on the payments schedule of bills due to suppliers and to governments for participation in UN activities.
A freeze on all but essential staff travel to include postponement of home leave.
A reduction of communications; telegrams and long distance calls would require approval from central control units with the overall expense level tied to some past base period.
A freeze on the hiring of new permanent and provisional staff. All positions now vacant or which become vacant will remain so. Temporary assistance for the 26th GA would be held to the level allowed for the 25th GA.
A temporary lay-off to extent contracts permit of personnel whose activities are not essential to the 26th GA.
An immediate 10% cut-back in documentation by reducing the number of documents which are automatically sent to members, e.g. [Page 314]instead of receiving 175 copies of all series, the U.S. would receive 157. Marginally useful documentation, e.g. staff announcements, would be reduced to the level of actual need.
Postponement of meetings and conferences except those declared absolutely essential by the SYG. Consideration might also be given to shortening the 26th GA through the elimination of some ceremonial appearances and postponement of debate on all but the most urgent items.
Indefinite postponement of all new program initiatives, including those passed by the 26th GA, until there is cash available to fund them. Programs in being should be audited to determine which could be eliminated or cut back to free up cash for new ventures.
The SYG should propose eliminating technical assistance in Part VI from the budget since these amounts can be funded through the UNDP without financial strain to that organization.
In addition to consideration foregoing austerity measures would appreciate Mission’s views on what U.S. initiatives involving budgetary add-ons might be dropped as U.S. positions for 26th GA.
Using measures similar to those suggested above ILO has since August 1970 has been able to effect (real and projected) savings of $6.8 million in approved 1970–71 biennium budget of $62.9 million. If same 10.8% savings rate applied to projected $218 million UN budget result would be saving of $23.5 million.4
  1. Source: National Archives, RG 59, Central Files 1970–73, UN 10. Confidential. Drafted by O’Connor, cleared by Hennes and Edward B. Persons, and approved by Assistant Secretary De Palma.
  2. Document 166.
  3. For text, see Andrew W. Cordier and Max Harrelson (eds.), Public Papers of the Secretaries-General of the United Nations, Volume VIII: U Thant, 1968–1971 (New York: Columbia University Press, 1977), pp. 639–640.
  4. Telegram 177011 to the Missions to ECA, ECAFE, UNCTAD, ECLA, and UNIDO, September 25, requested the Missions to review their budgets to determine specific reductions. (National Archives, RG 59, Central Files 1970–73, UN 10)