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The United Nations Special Fund

Published online by Cambridge University Press:  22 May 2009

Ronald A. Manzer
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The United Nations Special Fund was the result of a compromise between two proposals which were debated at nineteen meetings of the Second (Economic and Financial) Committee during the twelfth session of the General Assembly. The first of these proposals was an eleven-power draft resolution, based on the recommendations of the Scheyven Committee, to establish a Special United Nations Fund for Economic Development (SUNFED). The second was a United States proposal to ncrease the financial resources of the Expanded Program of Technical Assistance (EPTA) and to establish within it a Speical projects Fund Which would be used to widen the scope of EPTA7's activities.

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Articles
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International Organization , Volume 18 , Issue 4 , Fall 1964, pp. 766 - 789
Copyright
Copyright © The IO Foundation 1964

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References

1 Reported in “A New Step to Aid Economic Development”, United Nations Review, 01 1958 (Vol. 4, No. 7), pp. 8–10Google Scholar.

2 The eleven countries were Argentina, Ceylon, Chile, Egypt, Greece, India, Indonesia, Mexico, the Netherlands, Venezuela, and Yugoslavia.

3 The Scheyven Committee provided SUNFED with the most complete and concrete statement it ever received. The proposals were: 1) Development requires a common effort. Part of the assistance should differ from that of private investment or the International Bank forReconstruction and Development, concentrating on economic and social infrastructure like roads, power stations, schools, hospitals, housing, and government buildings. 2) Financing of this kind can be undertaken only by public capital. There is no reason why transfers of public capital should stop at political frontiers. 3) Capital subscription is the most desirable method of financing, even if it is not feasible. Annual pledges involve too much uncertainty, but governments could make long-term pledges in convertible currency. 4) Since botdenecks will limit the scope of the fund in its early stages, it might not be desirable to delay launching the fund until the sum of $250 million was collected. 5) Grants-in-aid would be the preponderant methodof disbursing resources. These could be combined with loans from other financial institutions. 6) Loans would be repayable at a full rate of interest as in the case of the World Bank rather dian at the low rate envisaged in earlier discussions. However, they would be repayable in the currency of the borrowing country, and the balances in local currencies might be used to help the assisted government to finance the local costs of some subsequent scheme or to obtain commodities and services useful for assisting some other country. 7) A general council, consisting ofall members of the fund, would elect an executive board and lay down basic directives for general policy. The executive board would give effect to the policies of the fund and make decisionson applications submitted to it. It would be based on the principle of equal representation of the major contributing countries and of other members of the fund, with equal voting rights. A directorgeneral would be appointed by the executive board. A joint committee of the director-general of the fund, die Secretary-General of the United Nations, and the President of die World Bank was also recommended. (United Nations Review, 08 1955 [Vol. 2, No. 2], pp. 73–75)Google Scholar.

4 “A New Step to Aid Economic Development,” United Nations Review, 01 1958 (Vol. 4, No. 7), p. 9Google Scholar.

5 Christian Century, February 13, 1957, p. 188.

6 Ibid., April 3, 1957, p. 427.

7 “A New Step to Aid Economic Development,” United Nations Review, 01 1958 (Vol. 4, No. 7), p. 42Google Scholar.

8 General Assembly Resolution 1240 (XIII) (UN Document A/C.2/L.364as amended). See also Department of State Bulletin, 11 3, 1958 (Vol. 39, No. 1010), pp. 709–713Google Scholar.

9 General Assembly Resolution 1240 (XIII), paragraph 12. See also UN Document SF/I.

10 Originally the Governing Council had eighteen members. In December 1963six more were added. (General Assembly Resolution 1945 [XVIII].) The 24 members in April 1964 were Argentina, Brazil, Canada, Denmark, Federal Republic of Germany, France, Ghana, India, Indonesia, Italy, Japan, Mexico, Nepal, Netherlands, Norway, Philippines, Poland, Senegal, Sweden, Tunisia, Soviet Union, United Kingdom, United States, and Uruguay.

11 Shonfield, Andrew, The Attach on World Poverty (New York: Random House, 1960), pp. 112–113Google Scholar.

12 UN Document SF/I.

13 Kaufman, Johan, “United Nations Special Fund—From Concept to Reality,” United Nations Review, 02 1960 (Vol. 6, No. 8), p. 14Google Scholar.

14 Jha, C. S., “The Special Fund–A Cooperative Endeavour,” United Nations Review, 07 1960 (Vol. 7, No. 1), p. 15Google Scholar.

15 Ibid., p. 16.

16 Department of State Bulletin, 03 11, 1963 (Vol. 48, No. 1237), pp. 358–360Google Scholar.

17 “U.N.'s Cuba Fund Angers Congress,” The New York times (western edition), February 15, 1963, P. 3.

18 Department of State Bulletin, 03 11, 1963 (Vol. 48, No. 1237), p. 359Google Scholar.

19 “Cuba Farm Depot Approved by U.N.,” The New York times (western edition), February 14, 1963, p. 1.

20 General Assembly Resolution 1240 (XIII), paragraph 2 (g), states that Special Fund assistance must not be a means for foreign economic and political interference in acountry and that no political conditions must be attached to aid. Paragraphs 49 and 50 state that contributions must be made without being limited to use by a specific agency and that no contributor shall receive special treatment in the allocation of its contribution.

21 “U.N. Cuba Project Backed by Thant,” The New York times (western edition), February 21, 1963, p. 3.

22 Department of State Bulletin, 03 11, 1963 (Vol. 48, No. 1237), p. 358Google Scholar.

23 Shonfield, , op. cit., p. 108Google Scholar.

24 UN Document SF/L.80, pp. 9–10.

25 Kaufman, , loc. cit., p. 17Google Scholar.

26 UN Document SF/L.59, p. 8.

27 In a Special Fund brochure the Consultative Board is described as follows:

Project proposals which appear to meet the criteria of the Special Fund and to hold sufficient promise are given further consideration in meetings of a Consultative Board. There views concerning proposals are exchanged between the Secretary-General of the United Nations, the President of the International Bank for Reconstruction and Development, the Chairman of the Technical Assistance Board of the U.N. Expanded Programme of Technical Assistance, and the Managing Director of the Special Fund.

(United Nations Special Fund [New York:United Nations, 1960], p. 18.)Google Scholar

28 The agencies and the number of projects approved and assigned to them from May 1959 to June 1963 were as follows: Food and Agriculture Organization, 128; International Atomic Energy Agency, 2; International Bank for Reconstruction and Development, 16; International Civil Aviation Organization, 8; International Labor Organization, 42; International Telecommunications Union, 10; United Nations Educational, Scientific and Cultural Organization, 56; United Nations, 54; World Health Organization, 4; World Meteorological Organization, 7. (UN Document SF/L.92, Annex I.)

29 Sharp, Walter R., Field Administration in the United Nations System (New York: Frederick A. Praeger, 1961), p. 368Google Scholar.

30 UN Document SF/L.94/Add.I. It should be noted that FAO is the only agency whose regular program constitutes less than 50 percent of its total activity.

31 UN Document SF/L.79, paragraph 79.

32 UN Document SF/L.37.

33 UN Document SF/L.73, p. 21.

34 UN Document SF/L.59.

35 UN Document SF/I. See also General Assembly Resolution 1240 (XIII), paragraph 2 (a), (b), (c),(d), (e), (f), and (h) and paragraph 51.

36 Quoted in Shonfield, , op. cit., p. 24Google Scholar.

37 UN Document SF/4.

38 UN Document SF/L.12, paragraph 11.

39 UN Document SF/L.92, paragraph 1.

40 UN Document SF/L.35, p. 3.

41 UN Document SF/L.92, paragraph 82.

42 Ibid., paragraph 82, and Annex I, Table 8.

43 Ibid., paragraph 82.

44 UN Document SF/L.63, p. 9.

45 UN Document SF/L.76, paragraph 49.

46 UN Document SF/L.71, paragraph 14.

47 UN Document SF/L.80, p. 23.

48 UN Document SF7sol;L.29.

49 UN Document SF/L.55.

50 The data submitted with project applications is very often incomplete. In December 1959, the Managing Director got approval from the Council for a Preparatory Allocation Fund to finance the further technical investigations which are often necessary to complete project data. If a project approved by the Council results from assistance financed from the Preparatory Allocation Fund, the cost of this assistance is debited to the project. The granting of such assistance does not guarantee that the project will be ultimately accepted. The size ofthe Fund is $250,000.

51 The members of the working group were Brazil, Ghana, Indonesia, Italy, Pakistan, Sweden, Thailand, the Soviet Union, the United Kingdom, and the United States. Since other members were quite free to express their views in the group, it is not surprising that there should be little or no difference between the discussion and recommendations of the workinggroup and the discussion and decisions of the Council.

52 UN Document SF/L.72, paragraph 7.

53 Other resources include: any excess of resources over earmarkings carried forward from the previous year (starting January 1963) but excluding the overmarking of approximately $40 million at the end of 1962; an estimate of miscellaneous income including interest earned on investments; contributions by recipient governments toward local operating costs for all projects to be approved by the Council during the year; cash counterpart contributions by the recipient governments for all approved projects for which the plans of operation have been signed during the year; any reduction during the year in prior earmarkings due to cancellation or revision of projects by the Council; and any balance of prior earmarkings remaining unallocated for approved projects completed during the year.

54 UN Document SF7/L.72, paragraph 14.

65 UN Document SF/L.80. In January 1964 it was raised to $62.8 million.

56 UN Document SF/L.18.

57 UN Document SF/L.72, paragraph 7.

58 At the eighteenth session of the General Assembly a resolution was passed requesting the Secretary-General to prepare a study of the practical steps necessary to transform the Special Fund into a capital development fund in such a way as to include both preinvestment and investment activities. The study Would be submitted to United Nations Gonference on Trade and Development (UNCTAD) and to ECOSOC, and appropriate recommendations would be preparedfor the nineteenth session of the General Assembly, (see General Assembly Resolution 1936 [XVIII].) it might alos be noted that in February 1964 a meger of the Special Fund and EPTA into a United Nations development program was proposed by the Ad Hoc Committee on the Coordination of Technical Assistance Activities. The funds would be kept Separate, the special Characteristics and operations of cach maintained, and separate pledges could continue to be made. It is hard to disagree with the Ethiopian representative who argued that the status quo would not be effectively chenged by such a “merger.”