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Contributions from
the Column
Monitor
How UN missions impact
on local economies
Trade liberalisation has
born little fruit
Conference: “E-Learning
Africa 2006”
Wieczorek-Zeul and
Morales meet
Solidarity and productivity
Debate on debt relief
AIDS medication:
progress with provision
Bird flu: EU increases
export subsidies
A new role for the IMF
05/2006
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[ Peacekeeping ]
How UN missions impact on local economies
Apart from the textile and tourism sectors, international development organisations and their local partners are the most important employers in Cambodia. This is still so more than ten years after the UN peacekeeping mission came to an end. For the authors of a recent study on the economic impact of UN missions, this proves that the mission in Cambodia paid too little attention to what impacts its high wages might have on the local economy and labour market in the long run. On average, the salary of local UN-mission staff amounts to little more than a tenth of the pay external staff get. However, locals still earn up to ten times more than do mid-level government employees. Consequently, skilled personnel move from local to international institutions and are employed in positions for which they are overqualified. Similarly, salaries rise to inappropriate levels, and a “development industry” emerges, as was the case in Cambodia.
The authors of the study, which was commissioned by the UN General Secretariat, identified the inflationary pressure on wages as the UN missions’ most serious harmful impact on the local economy. Overall, however, the economic costs of blue helmet missions are less and the benefits they yield are greater than commonly assumed. According to the study, which is based on the analysis of eight ongoing missions, around ten percent of spending for the missions remains in the countries of assignment. Half of this is attributed to day-to-day spending by UN staff, for example on rent. Aside from wages for local employees and procurement contracts for services such as cleaning and security, the third essential contribution UN missions typically make to an economy is building up infrastructure.
By making a few changes, the economic harms could be decreased and the benefits of UN missions increased, the document states. For example, it suggests outsourcing more tasks to local companies, because that approach would both reduce the number of local experts changing jobs and lessen the upwards pressure on wages. According to the study, those in charge of the missions should survey the local market more closely and write out procurement tenders in the local language. Doing so would help to increase the number of local suppliers.
Investment decisions are said to often remain short-sighted because of the short-term mandate of UN missions. For example, only in the short term is operating an airlift between two places more cost-efficient than repairing a road. The latter approach, however, would benefit an economy after the UN assignment has ended.
Furthermore, the tax advantages that UN missions and their employees enjoy in the countries of assignment need to be reassessed. The rules were drawn up decades ago. According to the study, they are no longer appropriate for today’s missions, which can be very drawn out and extensive. At times these systems prevent efficient tax collection in the countries concerned.
(ell)
On the internet:
www.globalpolicy.org/security/peacekpg/general/2006/03impact.pdf
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