by
Alexander Walden
International Business
Dr. Sparks
November 25, 1999
The United Nations
Most people have heard about the UN as a peacekeeping force in many conflicts, but the UN does many other things as well in order to prevent conflicts from arising. It is the purpose of the UN to promote the overall wellbeing of the world (UN Homepage). By doing so the UN prevents conflicts that arise out of economic jealousy of poorer nations. The UN also helps the wealthier nations, through international trade agreements such as GATT; it is an international symbiosis of all the nations on earth. Many programs have been established in order to promote the overall wellbeing of the world. The United Nations established an Economic and Social Council that directs the work of the UN in political and economic matters. The New International Economic Order promotes the creation of international trade agreements and sets the requirements for all nations to meet. But even though the developing nations get a lot of help from the developed nations many of them are very jealous of each other and feel that they do not get treated equally. Many different branches of the United Nation were established to take care of the needs of the developing countries. One of the achievements of the United Nations is WTO, which greatly contributed to the international trade.
The United Nation is an organization that promotes the peace and overall wellbeing of the world. Today it has 185 member states. The UN was founded on October 24, 1945, by 51 nations as a direct result of the second World War (UN Homepage). The United Nations were first intended to be similar to the league of Nations which a few years earlier had failed to prevent the second World War. The United Nations has a Charter, which every nation that wishes to join must sign in order to be accepted. The Charter is an international contract between the nations that sets the basic rules for a peaceful living on earth.(UN Homepage) The Charter of the United Nations can be found in the back of this paper. Even though it may seem to be that way, the United Nations is not an international government that takes the sovereignty of individual states away. Each state keeps its sovereignty, but the United Nations will advise individual Countries about certain issues.(The UN in the 1990’s) The UN also seeks to settle international disputes peacefully. Each state also has a vote on issues concerning all states as a whole. This is not, however, true for some branches of the UN.
The General Assembly is the main organ of the United Nations. It is located in the UN Headquarter in New York City. All the nations meet there to discuss international issues and UN policies. The General Assembly is like the parliament of the UN (UN Homepage). Each state has one vote, and decisions will be based on a two-thirds majority. Last year the UN decided on a total of 166 issues concerning peace and other interests, such as the Y2K problem (UN Homepage). Another main organ of the United Nation is The Economic and Security Council. The council coordinates the work of the UN. It is under the direct authority of the General Assembly and therefore not a separate branch. The council discusses international issues and makes suggestions to the member states to employ those ideas. The purpose of the Council is to promote the general welfare of all the nations (UN Homepage). The suggestions of the council may also involve political recommendations. It has therefore a key role in the international development of the member states because it coordinates the international effort to promote welfare and peace at the same time. There are 54 members elected to the council and they serve for 3 years. Those members split up and work separately in different issues. Once a month however, they will meet and discuss what they have come up with and make a decision. Through this and various other bodies the UN tries to promote a higher standard of living, full employment, and conditions of economic and social development (UN Homepage). The United Nation devotes as much as 70 % of its resources and effort to reach this goal. This is done because the UN believes that the absence of poverty will increase the world peace. The strength of the UN is its worldwide presence and its ability to act on behalf of social, economic, and emergency needs (UN Homepage).
The New International Economic Order (NIEO) was established by the United Nations to increase the international cooperation and trade among each other.(UN Homepage) The United Nations assumes that the world could be changed through coordinated government action. All actions of the UN, and even the idea of the UN itself, are based on this assumption. One of the major causes of World War II was the isolationism and imperialism of the nations prior to the war. To prevent this from happening again, the UN was formed. But the NIEO goes one step beyond this. The UN believes not only that war can be prevented, but also that economic wellbeing can be promoted.(The UN in the 1990’s) Examples of the successful implementation of this belief are GATT and the IMF. The oil crisis in the 1970’s brought them into existence. In addition to setting the rules for international trade and promoting international trade, the UN also set requirements to be met by the member states. For example, one goal that the UN set is an economic growth of at least .7% for all countries in the world (The UN in the 1990’s). In order to achieve this goal, the participation of all members is necessary. The UN tries to coordinate the work so that the stronger economies help the weaker ones. By doing so, in the past the UN has created a very strong free international market. Outcomes of the NIEO are, for example: broader activities of the World Bank and International Monetary Fund, creation of a general system of tariffs to benefit the developing countries, increased capitalization of the World Bank and the IMF, and increased participation of developing countries in the world trade (The UN in the 1990’s).
As I mentioned earlier, the cause for many international conflicts are economic and social grievance. This has become a very important issue for the UN. Mainly non-whit underdeveloped countries feel that they are mistreated or not treated equally (The Future of the UN). This has created an enormous tension between the richer industrial countries and the poor third world countries. An example would be the conflict in Somalia in the early 1990’s. It is revolution versus evolution, and the third world countries have to decide which road to take. Many blame the lack of evolution on the UN. This causes a lot social and political disruption in the country, which will eventually lead to a revolution. The danger of a revolution is that nobody can anticipate ahead of time who will take over the government. Most of the time the military overthrows the government, which easily leads to war with neighboring countries. The UN believes that if they provide equal support to all nations that are in need of help, they can prevent this chain reaction form happening (The Future of the UN). However, the past has shown that this is not always done successfully. One common interest that all nations share is investment in their countries. But in order to get investments, a country must have a stable government and economy. It is a dead end circle for many countries. On the one hand they wish to get more investments, but on the other they have frequent revolutions due to the lack of investments. Many other countries have managed to escape this circle. The UN attempts to help those countries by changing the terms of trade in their favor and give them more access to the world market (The Future of the UN). But the country has to undergo the internal development itself. The UN can integrate them in the decision process in order to have more input from the underdeveloped countries, and to help them in a more efficient way from the outside. The integration in the decision making process of the UN was requested by the underdeveloped nations several decades ago (The Future of the UN).
Welfare can only be achieved through economic development. As mentioned earlier the UN tries to achieve that welfare through international cooperation not only in economic matters but also in social matters (UN Homepage). The United Nations has created the World Bank Group, which consists of several branches to help accomplish this purpose, such as The International Bank for Reconstruction and Development, The International Monetary Fund, The International Development Association, and The Internal Finance Corporation. The International Bank for Reconstruction and Development is a specialized agency, which makes loans for projects that the borrowing country can repay within a reasonable time (Worldbank Homepage). These are projects that make that country some money, which it will use to first repay the loan and then to finance other projects itself. In other words it is the first step for a country to gain economic independence. Here you can see where the money goes. This graph shows the lending by sector in the 1998 fiscal year. It is obvious that the money is spend very diverse. The graph shows the spending by region. It seems to be clear which regions need more economic aid. Those regions that get financed the most are the ones that are usually referred to as underdeveloped countries. (IFC Homepage) A president who reports to the UN directly heads the Bank. The countries vote on the issues; for example which project to invest in or which policy to follow. But each country gets a voting weight according to its financial contribution. Needless to say, the poorer countries have no influence even though the program was established to help them (UN Homepage). The U.S., for example, contributed 40% of the Banks capital and thereby more or less bought the majority vote at the Bank (Worldbank Homepage). The purpose of the Bank is to match the need for a loan of certain countries with a loan (International Organizations). But since the underdeveloped countries do not have much pull that purpose is hardly ever achieved. Therefor one could question the existence of the Bank.
The International Monetary Fund was established to progress the economic development. Since all countries are interrelated in the worldwide economy, the UN has to operate on a global basis. The IMF promotes the balanced expansion of all nations. Balanced Expansion means that all nations expand more less equally (International Organizations). If one nation would expand faster than all the other nations this nation would have a large advantage and too much power. This goal is reached through international discussion. In theory all countries vote on the issues, but in reality only the richer ones actually get to vote because the IMF has a voting system very similar to the one that the International Bank for Reconstruction and Development uses. The same problems are caused at the IMF that the Bank has. But the IMF does not only grant loans to other nations; it also makes consultants available for those nations (International Organizations). Some of the underdeveloped counties do not have much economic experience and tend to spend the money on projects that neither pay off nor have a social utility. In order to prevent this the IMF sends consultants to those countries. Needless to say those consultants are in some way biased and will work in favor for the IMF, which does not necessarily match the good of the country (International Organization). For example, some of those consultants could possibly invest the money in something that will bring a high short term rate of return when the country really needs the money in a long-term project that has a low rate of return. But in general this helps the IMF as well as the third world country. The IMF gains from those consultants because in the long run they have to spend less money on the countries because the money is used more efficiently in the first place.
The International Development Association provides soft loans. Soft loans are loans that have a very low or no interest rate and they do not have to be repaid for a very long time (International Organizations). Those soft loans were established for countries that are not able to repay the loans for a very long time. The loans can be used on projects that do not necessarily pay off but that have a very great social utility. For example, elementary schools. It is very hard to measure how they pay off, but it is certain that they pay off in the long run. Universities, on the other hand, may pay off immediately and can be measured very easily. The International Development Association operates much like the other Banks and Funds of the UN (Worldbank Homepage). This means that the poor nations have no influence on the policies.
The International Finance Corporation is part of the World Bank (IFC Homepage). It provides private loans. Those are loans that go toward private projects in underdeveloped countries. These loans have to be paid back within a certain amount of time and they have an interest rate that is close to the market interest rate (IFC Homepage). Through the International Finance Corporation the underdeveloped countries are able to pull private corporations into their countries. The loan just serves as an incentive to invest. There is, however, one major difference to the other Banks and Funds. The International Finance Corporation gives every country one vote when deciding on major issues (International Organizations). It does not matter whether a country is rich or poor or whether it has loans outstanding or not. This makes it much fairer and the purpose of the Corporation can be served in a much more efficient way. The IFC is the largest source of loans worldwide. It has loaned out more than $21.2 Billion since it was found in 1956 (IFC Homepage).
The Following issue was found in the United Nations Chronicle. It is about the use of the tools that are available to the United Nations against drugs. One major issue that the United Nations are concerned with is the production and usage of illegal drugs. Not only do these drugs hurt the individual but also the society as a whole. The society has to bear the cost of the usage of the drugs. These cost are social as well as economical. The use of drugs effects everybody in many ways. Our lives in the western world have changed a lot due to the increase in drug usage and the crime that came with it. Ever since drugs were introduced to our lives the crime rate in many urban cities increased. This increased the cost of the law enforcement, which is paid by the taxpayer. Not only did the cost of crime increase but also the health care cost. The spread of blood-born and sexually transmitted diseases are examples of this recent increase. This put a higher cost on healthcare in the developed nations. The higher health care cost is equally distributed among the citizen of the countries through health care insurance. If the people did not have to pay that much on health care, they would have a larger discretionary income. That means they could spend more on other consumer goods, which would increase the total domestic output. Due to the interrelation of the domestic markets, this would also increase the international trade. But there are other economic costs as well. People who use drugs have in general a higher job turnover, which means a higher cost of job training for the companies. The companies also lose money because employees who use drugs are less productive. This is an indirect cost to society. It is very hard to measure how much it cost the society as a whole. On the other hand increased insurance on the other hand is a direct cost, which can easily be measured. In some countries the cost of the drug usage, trade, and production is as much as 1.3% of the gross domestic output. But especially the trade of the drug contributes to the underworld economy. Many people live very well of the illegal activities related to drugs. This economic output, however, cannot be measured. Another major burden on society is that many young women use drugs before they bear their children. The use of the drugs can have devastating effects on the children and on the grandchildren. In economic terms children are an investment in the future. By using drugs this investment is destroyed. Therefore today’s usage of drugs will have a negative impact on future generations. This is a major concern for the UN, especially since the overall well being of the people is their major objective. Also, the use of drugs leads to related crimes such as theft. In order to pay for the drugs many addicts have to engage in criminal acts to finance their habit. But those people who use drugs also engage in other criminal activity. The UN stated in their report on drug usage that many doctors, military personnel, business executives, etc. use drugs. This does not only endanger the national security, as in the case of military personnel, but it also cost the society as a whole since most of those people have key positions in our society. It seems that it is a national problem, which every country would have to solve on its own. So why would the United Nation get involved into this? The answer is very simple: many of the underdeveloped countries, especially in South America and Asia, live off the production of the drugs. Since this is an international issue, the United Nations deal with it. They represent the combined effort of all nations to fight this crime. The UN tries to give other opportunities for the farmers who grow the drugs to make their living. They implement programs through the above agencies to do so. If the farmers realize that there are other opportunities out there, they will stop growing plants that can be used to produce drugs and produce other plants that will provide food for the people in the country. By doing so, all the agencies of the United Nations work together to achieve the greater goal of crime reduction in the western world and economic growth in the underdeveloped countries.
PREAMBLE
WE THE PEOPLES OF THE UNITED NATIONS DETERMINED
AND FOR THESE ENDS
HAVE RESOLVED TO COMBINE OUR EFFORTS TO ACCOMPLISH THESE AIMS
Accordingly, our respective Governments, through representatives assembled in the city of San Francisco, who have
exhibited their full powers found to be in good and due form, have agreed to the present Charter of the United Nations
and do hereby establish an international organization to be known as the United Nations.
Works Cited