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831 Maya, 1991 AREAS FOR U.S.=SOVIET COOPERATION The United Nations used to be a main Cold War ideological battleground between the United States and the Soviet Union. But now the ideological struggle between Washington and Moscow has abated as the legitimacy of Marxism-Leninism has crumbled.This fundamental change in relations be tween the two nations raises the possibility of selected cooperation by the world's two great powers.

The U.N. may be a place to start.Together the U.S. and the U.S.S.R dominate the U.N paying nearly 37 percent of the regular budget. A first test of American-Soviet cooperation could be the selection of a new U.N.

Secretary General when the current five-year term of Javier Perez de Cuellar expires this December

31. Perez de Cuellar has been a modest improvement Over his predecessor, Austria's Kurt Waldheim, whose activities as a German officer during World War 11 have left a black mark on the U.N Slow Approach. The problem is that Perez de Cuellar has been slow to tackle the'U.N.'s most-pressing problems. Together .the .U.S. and U.S.S.R could recruit a new Secretary General committed to a U.N. housecleaning.

The U.S. and the Soviet Union could push for reform of the U.N.'s policies organizational structure and budgetary procedures. Washington and, Moscow also could call for the repeal of the 1975 General Assembly resolution that proclaims Zionism is a form of racism and racial discrimination This resolution has disc r edited the U.N. and tainted the U.N.'s efforts to assist in mediating negotiations on the Arab-Israeli conflict. Begin an aggressive campaign to root out U.N. waste and duplication The two-year (1992-1993) regular budget for the U.N. will be $1.9 billion, of which the U.S. pays 25 percent. This money supports what even the New York Ernes calls "a torpid bureaucracy of 14,000 civil servants scattered in 26 baroniesT2 Washington and 8Moscow should form a joint task force to iden tify areas of duplication and waste Guarantee that the June 1992 U.N. Conference on the Environment and Development balances environmental needs with an appreciation for economic costs and the need for more scientific knowledge about these at mospheric problems. This potentially impor t ant conference, to be convened in June 1992 in Ftio de Janeiro, ostensibly will focus on the effect of economic development on environmental quality. Washington and Moscow should ensure that the session truly addresses environmental issues and is not used , as many previous U.N. conferences have been, to endorse policies that stymie economic growth and transfer aid to Third World governments Ensure a thorough reform of the Food and Agriculture Organization FAO The Rome-based FA0 is one of the U.N.3 largest s pecialized agen cies. It is the lead international organization on agriculture, fisheries and forestry. There are two major problems with FAO: First, it has moved beyond its task of disseminating technical and scientific information intended to in crease a gricultural output and ktead urges adoption of agricultural programs that ignore market pricing signals; and second, it is badly managed and unaccountable to member states. Though the Soviet Union is not a mem ber of FAO, Moscow publicly should support U. S . efforts to: 1) compel FA0 to put its financial house in order by adopting standard accounting proce dures that will produce honest budgets; and 2) compel FA0 to reform its programs thoroughly to focus its efforts again on becoming an expert collec tor a nd disseminator of technical information relating to food and agricul ture, and to do this within a free market economic framework Repeal the "Zionism is Racism" resolution that was passed by the U.N. General Assembly on November 10,19

75. General Assembly Resolu tion 3379, which equates Zionism with racism, has nor helped the Arabs who sponsored it nor has it been good for the U.N. Among other things, it dis credits the U.N. in dealing with the Arab-Israeli conflict. If the U.N. is to regain credibility w i th Israel and become a player in any future Middle East peace process, this gratuitous attack on Israel must be rescinded by the General Assembly 2 "Start the U.N. Search Now: editorial, The New Yo& 7imes, April 15,1991, Sex. A, p. 16 3 For a number of re a sons, the Soviet Union would benefit from working Soviet assessments at the U.N. could be cut if a dynamic manager be Soviet free market economic reforms at home would be mirrored and with the U.S. at the U.N. Among them came Secretary General reinforced b y new U.N. positions favoring a market strategy for economic development Abolishing U.N. institutions, such as the Centre forTransnationa1 Corporations, that are hostile to multinational corporations would provide a friendlier environment for direct inves t ment in developing countries, includ ing the Soviet Union Keeping the 1992 U.N. Conference on the Environment and Develop ment focused on environmental issues and the need for cost-effective, scien tifically-sound recommendations can spare the Soviet Unio n the potentially enormous costs of poorly-conceived environmental programs Redirecting FA03 policies toward market-based economics would provide intellectual support and legitimacy for similar policies in the U.S.S.R A SUCCESSOR FOR PEREZ DE CUELLAR The m o st pressing reform issue before the U.N. is the selection of a new Secretary General. The U.N. Charter requires that the U.N. Security Council place a nominee for Secretary General before the General Assembly. Of the Security Councils fifteen seats, five a re permanently held by America Britain, China, France and the U.S.S.R each of which can veto the selection of the Secretary General. In addition to the votes of all five permanent mem bers, four other votes are needed for the nomination to pass the Counci l.

Though the Security Councils nominee can be rejected by the General As- sembly, this has never happened.

During the depths of the Cold War, successful candidates for Secretary General had to avoid offending either the U.S. or the U.S.S.R. Candidates thus became champions of the status quo. Perez de Cuellars successor must break this mold and bring aggressive management to the U.N. The new Secretary General should be committed to itself. Decades of cronyism, poor hiring practices and almost non-existent work incentives have left the U.N. with a work force far less productive and more demoralized than that in t h e private sector and even in many govern ments. Poor management practices have become so entrenched that only a dogged effort by the new Secretary General will reverse them 1) Reform as the foremost objective.This must begin within the Secretariat 4 2) Bo o st the efficiency of the U.N. and its specialized agencies. Assistant U.S. Secretary of State Bolton points out that virtually all parts of the U.N system have expanded beyond their original tasks and often duplicate each others work.The new Secretary Gen e ral will need to prune the organization al responsibilities of the U.N.s committees and specialized agencies 3) Turn the U.N. into a tutor for Third World economic development. The U.N. must shed its persistent advocacy of statist, anti-market economic st r ategies -and instead promote.policies that favor entrepreneurial risk taking economic growth, the isolation of economic activity from political inter ference, and the protection of property rights 4) Find an acceptable way to make the Security Council mor e repre sentative of the current distribution of world power. In particular, this means finding a larger role for Germany and Japan ABOLISH THE U.N.S CENTRE ON TRANSNATIONAL CORPORATIONS With the collapse of Marxism in Eastern Europe and the Soviet Union t h ese countries now realize that multinational corporations are not enemies of economic development. On the contrary, these firms effectively and rapid ly transfer technology and capital to developing economies.This newfound recognition is at odds with the U.N.s open hostility to multinationals for at least the past fifteen years.The time has arrived for the U.S. and the U.S.S.R to oppose this harmful anti-business economic doctrine espoused by various organs of the U.N.

Commission onTransnational Corporatio ns, established in 1974 by the Economic and Social Council(ECOS0C in its resolution 1913 (LVII).This resolution was the product of a 1974 report, The Impact of Multinational Corporations on Development and on International Relati~ns The report is hostile to free market economic practices in general and to multinational corporations specifically. The report calls on governments to regulate the mul tinationals.

The secretariat of the Commission is the NewYork-based Centre on Transnational Corporations. It wa s designed, when created in 1974, to be antagonist to international business a fact attested to in 1987 by the Soviet representative to ECOSOC, A. V.Trepelkov. He observed that the Centres main task [was] to identijl the negative consequences of the activ i ties of transnational corporations and submit proposals on ways to eliminate such Most vocal in its opposition to multinational corporations at the U.N. is the 3 E/55OO/Rev. 1, ST/ESA/6,1974 5 consequences.A The Centres preferred method of dealing with th e problems of multinationals always has been to impose state-sponsored regulatory controls Hidden Budget. The 1990-91 bi-annual budget for the Commission on Transnational Corporations does not appear directly but is hidden within figures for the Centre for Transnational Corporations itself. The budget, how ever, does explicitly provide the Commission with airfares of $125,$00 for 16 expert advisers to travel to the annualsessions of the Commission. The Centre and its joint units with regional commissions ha v e a much larger regular budget, some $11.6 million, of which the U.S. pays 25 percent.The Centre is spending $55 million on minimizing the negative effects of transnational corporations and enhancing their contribution to develop ment. Nothing is being sp e nt on identifying the positive effects of transna tional corporations ing capacity of developing countries in their dealings with transnational cor porations. This spending is described as technical assistance for the promotion and regulation of foreign i nvestment, technology transfer and other business arrangements with transnational corporatio ns This means that this U.N. body helps governments impose laws and regulations to prevent foreign investment in theThird World.

Preventing Free Market. The Centre for Transnational Corporations has tried to assist the Soviet Union and Eastern Europe by addressing the ac counting procedures used when centrally-planned economies are involved in joint ventures with the West! Yet a U.N. Secretariat official has told T h e Heritage Foundation, It has yet to provide any guidance on accounting for free-market economies. In its study The Challenge of Free Economic Zones in Central CULd htem Europe, published this year, the Centre, according to the Secretariat official, NO lo n ger considers the concept of free economic zones even as a transitional step in the road to a free market economy, but in fact as an attempt at preventing the development of a free m9rket by making it the island exception in a sea of socialist economic co n trol. With respect to the economic prospects for these zones inside the Soviet Union, while a number of reasons are given for allowing free economic zones, the emphasis is on how to preserve socialist institutions The Centre is spending another 3.9 millio n on strengthening the negotiat 4 Juliana Geran Piton, The Centre OnTransnational Corporatioas: How the U.N. Injures Poor Nations Heritage Foundation Bocwnder No. 608, October 5,1987, p. 2 5 Budget figures for the 1990-1 biennium come from the hpsed Progra mme Budget for the Biennium 1990-1991 (New York United Nations, General Assembly, 1989), Section

9. Some figures have been updated 6 UNCTC, cunicrrkl forAccounting Education for East- West Joint VennueS in Centrally Planned Economies UNmC Advisory Studies , Series B, No. 6 NewYork United Nations, 1990 7 Conversation with a U.N. official who wished not to be identified 6 The Commission forTrausnationd Corporations and its administrative Centre have become obstacles toThird World economic development. They p r omote theories and strategies now vociferously rejected by Moscow. The Soviet Union may want to begin acting at the U.N. in a manner consistent with the best Soviet economic thinking. As such, Moscow should join with Washington in calling for the repeal o f the ECOSOC resolutions establishing the Commission onTransnational Corporations and the Centre onTransna tionalCorporations. Failing that, both countries should work in the U.N.s budget committee to reduce the funding of these organizations ELMINAIE DUPL I CATION AT THE UmNm We have all noted the proliferation of committees, councils, conferences and meetings, all of which cover essentially the same issues. Numerous governing bodies (however denominated) all spend precious time and fiscal resources discussi n g the same issues in different cities, complained Assistant Secretary of State Bolton at a Geneva meeting almost two years ago8 As an example, Bolton cited the United Nations Development Programme which has seen its role as development policy coordinator e roded by the intrusion of other specialized agencies.The result: resources are wasted and the various bodies work at cross-purposes Payment Reduction. The U.S. and the U.S.S.R. have two reasons to cooperate in eliminating activities at the United Nations: to reduce their pay ments to the U.N. and to reduce the time their officials devote to U.N. mat ters.To correct the situation, Bolton proposes what he calls a unitary United Nations. This would assign each organization within the U.N. a specific role.

Cen tral to Boltons plan is a common set of financial reporting rules that would make budgets comprehensible Though these are common sense ideas they have been ingored at the U.N. Senior Soviet officials at the Soviet Mis sion to the U.N however, strongly end orsed Boltons proposal.

The U.S. and U.S.S.R. should form a joint task force to identi

areas in which duplication can be eliminated at the U.N. One hopeful sign that the member states are becoming interested in serious reform is the passage of General As sembly resolution 45/264 on May 13,1991, which enacted a num ber of needed changes of the Economic and Social Councils activities 8 John Bolton, he Concept of the Unitary UN, Current Policy No. 1191 (Washington, D.C US.

Department of State, Bureau of Publ ic Mah, July lW p. 1 7 THE U.N. CONFERENCE ON THE ENVIRONMENT AND DEVELOPMENT U.N. General Assembly Resolution 44/228 of December 22,1989, calls for a U.N. Conference on Environment and Development (UNCED) to convene in Rio de Janeiro, from June 1-12,1992 . The stated purpose of the meeting is to promote "environmentally sustainable" development, an issue first raised at the 1972 U.N. Conference on the Environment in Stockholm Coercing Aid. There are two ways in which Washington and Moscow can work together o n UNCED.The first is to focus the conference's efforts on proven environmental problems and to assist international cooperation on proposing economically effective solutions to them.The second is to prevent theThird World delegates from transforming the c onference into yet another forum for attacking the industrial nations with the aim of coercirig still more aid from them.

The Soviet Union already is concerned about what could come from the Brazil Conference. At the U.N. Intergovernmental Negotiating Comm ittee on Climate Change, which met in Chantilly, Virginia, this February 5, Profes sor Yuri A. Izrael, the head of the Soviet delegation, said that the "viability of any agreement in Brazil "would be greatly determined by the reality and ef fectiveness of its provisions.'yg He added that "we are deeply concerned by the absence at present of reliable and sound methods for predicting regional extreme indications of climate change Then he stressed that the negative impact of climate change must be balanced by the possibility of "enormous and unjustified costs."

Mirror Positions.The American position on the environmental conference mirrors that of the Soviets. Both governments agree on the general approach for solving environmental problems. Both governments ar e aware of the sig nificant regulatory costs that an ill-conceived environmental program would impose on their economies and those of the developing world.

There already is evidence, meanwhile, that theThird World plans to use UNCED to squeeze more financ ial assistance out of the industrial nations. An official U.N. publication notes that "developing countries maintain that their ability to deal with global environmental risks will depend on access to additional' resources necessary to integrate c nsidera t ions about the environ ment into development plans and practices."'8 It is this attitude that will divert the meeting in Brazil away from a discussion of pollution, economic development and scientific research and turn it into an "us-against-them 9 See Un ited Nations General Assembly Resolution 4SL2l2, A/RES/45/2l2, January 17,1991, paragraph 7.

Work on this international convention on global climate change commenced with the intention that it would be completed by the opening of UNCED in June 1!Xl2 10 "United Nations to Hold World Conference on Environment and Development in Brazil in 1- Unifed N orions Focus, UN Department of Public Information, DPUlOn Jdy 1990 3M, p. 1 8 fight for money. In fact, U.S. government officials privately describe the first I preparatory conference, held last August in Nairobi, Kenya, in these tern BUDGET REFORM AT THE U.N.

FOOD AND AGRICULTURE ORGANIZATION The Rome-based Food and Agriculture Organization is seriously in need of reform.Thougb the Soviet Union is not yet a member of FAO, mainly be cause of Moscow's reluctance to contribute to another costly U.N. agency t he Soviets could back the U.S. in its drive to reform this specialized agency. This would reduce FAO's costs and thus the eventual cost of Soviet member ship in it.

Obscure Accounting. FA0 was established in 1945 to rake levels of nutri- tion and standard s of living worldwide. A number of FA0 technical programs merit praise; the Codex Alimentarius Commission, for instance, apparently does a good job setting international standards for processing food products.

The International Plant Protection Commission (IPPC) also functions well.

The annual budgets for .both total $4.2 or approximately 1/65th of FAO's total effective budget of $284 million per year of which the U.S. pays about 25 percent. For most of FA03 other programs the problem is that obscure ac c ounting methods make an assessment of their effectiveness impossible.

The greater problem at FA0 is the general policy that the organization ad vocates. For decades it has championed the centralized and state controlled agriculture which has impoverished most of theThird World. FA0 publica tions, for example, advise governments "to upgrade their planning and ad ministrative machinery to develop and manage their agricultural sectors."11 Not only does FA0 ignore the agriculture successes in the U.S. and els e where in the West, it has been oblivious to the agricultural revolution in main land China by which market forces since 1978 have boosted output dramati cally. Rather, FA0 continues universally to stress state-managed programs.

Absent from FA0 thought is the recognition that prices relay critical informa tion about production costs, supply and demand. Central to FA0 thought is that the state should manipulate food prices and the quantity of production.

Angry U.S. Curiously, the FA0 angered the U.S. more for its accounting ir regularities than for its statist policies. It ran afoul of the U.S. Congress in the 1980s for a number of reasons. First, FA0 refuses to adopt consensus-based budgeting by which donor countries such as the U.S that pay for the lion' s share of FA0 activities -would have a veto over FA0 spending.This budget principle has been approved by the budget committee of the U.N. and by many of its specialized agencies. It is rejected by FA0 and its controversial 11 Juliana Germ Pilon The U.N.ls Food and Agriculture Organization: Becoming Part of the Problem,"

Heritage Foundation Buckypunder No. 626, January 4,1988, p. 5 9 Director General, Edouard Souma of Lebanon, who has held the post since 1976 Second, FA0 exaggerates figures for inflation an d distorts staff rosters to escape the U.N.-wide discipline of holding real budget growth to zero percent Souma Slush. Third, the Congress has been angered by what many call Director General Soumas slush fund.

This is the misnamed Technical Cooperation Program which amounts to nearly 68 million, or 12 percent of the FAOs total effective two-year budget 1990-91) of $569 million.

Sources in the State Department have described theTechnical.

Cooperation Program as a slush fund because it is not allocated in advance in the normal budget, but is dis tributed ad hoc at the discretion of the Director General in response to requests by individual governments Officials in the U.S. government believe that theTCP has become Soumas political tool.

The U.S. must deman d FA0 reform. First, Congress should warn that it will fund FA0 for only two years longer unless the FA0 1 adopts consensus-based budgeting; 2 holds spending growth to zero per cent 3) eliminates SoumasTechnical Cooperation Program slush fund 4 removes So u ma; and 5) adopts clear accounting rules and management practices Private Ownership. The U.S should press the Soviet Union to sup port these FA0 reforms in the General Assembly and in relevant commit tees. After budget and management reforms, the more imp o rtant phase in FA0 reform then can begin.This phase would transform FAOs policies from those supporting agricultural stagnation to those supporting increased food output. A model for this could be the plan proposed by Stanislav Shatalin a 10 former econom i c adviser to Wail Gorbachev who now works with Boris Yeltsin to reform the Soviet economy including agriculture. This now famous Shatalin Plan calls for private ownership of land, the elimination of centralized production quotas, market relations in all e l ements of agricul ture, and an end to the monopolistic position of producers, processors, and trade enterprises.2 If FA0 refuses to reform its policies, the U.S. should quit the organization (saving almost 70 million in annual contributions and theSoviet U nion should not join. FAOs useful.technical programs, like Codex Alimentarius, could be supported through trust funds at FAO I REPEAL OF ZIONISM RESOLUTION The U.S. and Soviet Union should make adetermined effort to repeal the U.N. General Assemblys Resol u tion 3379 which states that Zionism is a form of racism and racial discrimination. It is this resolution, enacted in an anti-U.S. and anti-West frenzy in 1975, that disqualifies the U.N. as a means of ending the Arab-Israeli conflict. It also justly discr edits the U.N. in the eyes of Americans.

Assembly since its passage on November 10,19

75. Repeal would be a sig nificant first step by the U.N. to eliminate its anti-Israel bias.

The Soviet Union could be willing to consider repealing Resolution 3379 In February 1991, Ambassador Yuily Vorontsov, the Soviet Unions per manent representative to the U.N told an interviewer that the idea of the Zionism resolution was false, it should b e repealed. Senator Daniel P.

Moynihan, the New York Democrat who was the U.S. envoy to the U.N when the resolution passed in 1975, introduced Senate Joint Resolution 110 this March

22. It urges that the United States and the Soviet Union should lead an effort to promptly repeal resolution 33

79. The Senator said that for almost a year, Soviet representatives have continued to signal this important change of policy in meetings behind closed doors.13 It would be appropriate for Moscow to support the repea l of this resolu tion, for the U.S.S.R. was the only developed nation to co-sponsor it The Zionism is racism resolution has not been revisited by the General 12 Foreign Broadcast Information Service, Soviet Union, Economic Affak, Transition to a Market Ec o nomy September 28,1990, pp. 66-8 13 Congressional Record, March 22,1991, p. S4l36 11 CONCLUSION With Cold War tensions easing, the U.S.-Soviet conflict at the U.N. too can ease. By working together the two nations, which together contribute nearly 37 perc e nt of the U.N.s regular budget could control many, and probably most, of the U.N.s actions. Together Washington and Moscow should identifL and then push for an aggressive reform-minded manager to replace Javier Perez de Cuellar as Secretary.General.The tw o nations should insist that the U.N. end its hostility to multinational corporations and to direct foreign in vestment inThird World countries.The two nations should push the unitary U.N. concept to eliminate waste and duplication, cooperate on preparatio n for the June 1992 U.N. Conference on the Environment and Development demand reform of the.Food and Agriculture Organization and repeal the 1975 Zionism is Racism resolution i Cooperation between the U.S. and the U.S.S.R. on these issues will have tions. A U.N. that supports market economics will assist developing nations Union. A U.N. that becomes a champion of foreign investment will speed the transfer of high technology, investment capital, knowledge of finance, and in dustrial engineering to less-devel o ped countries. A U.N. that crafts anti-pollu tion programs that are not specifically designed to penalize economic development will contribute to rising living and health standards throughout the world. And a U.N. that repudiates the Zionism as Racism Res o lution will contribute to a peaceful resolution of the Arab-Israeli conflict many benefits. A well-managed U.N. will cost less, saving money for both M not only in theThird World but also in Eastern Europe, including the Soviet Christopher M. Gace-k, Ph.D . Jay Kingham Fellow in International Regulatory Affairs 12