Managing Money at the United Nations
You hear about what the UN does. Peacekeeping. Humanitarian aid. Climate conferences. But you almost never hear about how the UN pays for all of it. Who manages the money? Who sets the salaries? Who makes sure that when 2.7 million compensation claims come in, the right people get paid the right amounts?
This is part of my retelling of “50 Years of Singapore and the United Nations” (Tommy Koh, Li Lin Chang, Joanna Koh, 2015, ISBN: 978-9814713030).
Chapter 39 is written by Cecil K.Y. Ee, a Singaporean who spent 33 years working on the financial side of the UN. From 1972 to 2005, he saw the inside of the machine. His story is not glamorous. No speeches at the General Assembly. No peace treaties. Just budgets, salaries, investments, and claims payments. But without people like Cecil, the entire UN would grind to a halt.
Starting With Drugs (Not What You Think)
Cecil started at the UN in September 1972. His first job was at the International Narcotics Control Board (INCB) in Geneva. He reviewed confidential reports from governments about drug trafficking in Asia. With a small team covering other parts of the world, they built a global picture of drug abuse and trafficking. The INCB annual report is still considered one of the most reliable sources on this topic.
But Cecil’s real career turn came a year later. The UN switched from a simple “line-item budget” to a new system called Planning, Programming and Budgeting System, or PPBS. Cecil had studied PPBS at university, so he volunteered to draft the budget proposals for INCB under the new system. That decision changed his career. He would spend the rest of his time at the UN working on finance.
How Much Does a UN Meeting Cost?
In 1977, Cecil moved to the Budget Division of the UN Office in Geneva. His job was conference services budgeting. Basically, figuring out how much UN meetings cost and making sure the money was tracked properly.
Here’s something most people don’t realize. UN meetings are expensive. Really expensive. The main reason is languages. Meetings are usually conducted in at least four official languages, sometimes six. Each language booth needs two or three interpreters providing simultaneous translation. Then there’s the document side. Millions of pages of documents get produced every year. The UN employs hundreds of typists, translators, senior revisers who check the translators’ work, and editors. All working to turn documents from one language into four or five others.
Cecil had to prepare cost estimates for these meetings and make sure actual spending was properly billed to the right programs or the right governments.
Budget Crises and Late Night Negotiations
In 1980, Cecil moved to UN Headquarters in New York. For the next four years, he handled budgets for some big operations: UNCTAD (trade and development), UNIDO (industrial development), the Economic Commission for Africa, the International Trade Centre, and the Office of the UN Disaster Relief Coordinator.
The General Assembly sessions were intense. Three months each year. Member States would submit draft decisions. These often involved activities not covered by the approved budget, and Cecil had to prepare statements on what they would cost. Informal meetings to negotiate these decisions would happen after normal work hours. They frequently ran late into the night and through weekends.
During his eight years working on budgets in Geneva and New York, Cecil watched the UN go through several financial crises. Rich nations pushed back against growing budgets. Some even withheld their contributions because they disagreed with how the majority voted to spend the money. The regular UN budget had reached about US$2 billion per biennium. A lot of the increase was not from new programs but from the declining value of the US dollar and inflation from the oil crisis in the 1970s.
Setting Salaries for 150 Duty Stations
In 1985, Cecil became Chief of the Salaries and Allowances Section at Headquarters. This was a big job. The UN has over 150 duty stations around the world, each with locally-recruited staff. Cecil’s section set the salary scales for all of them.
The idea was that UN salaries should match the best local salaries for comparable work. Most scales got updated yearly for inflation. Every three or four years, there were full salary surveys. These surveys were often contentious. Staff representatives sometimes threatened to take action if they didn’t like the results.
Cecil also represented the UN Secretariat at meetings of the International Civil Service Commission, which handled salaries for professional and senior staff across the entire UN system.
Managing Billions in Pension Investments
In 1988, Cecil made what sounds like the most interesting career shift. He joined the Investment Management Service of the UN Joint Staff Pension Fund as Senior Investment Officer. His responsibility was the Fund’s cash and fixed-income portfolios.
Think about it. The UN Pension Fund pays retirees either in US dollars or in whatever local currency they live in. That means the Fund has to hold investments in many currencies and constantly adjust its exposure. Cecil managed cash reserves in more than a dozen currencies and invested the equivalent of several billion US dollars in high-quality bonds across those currencies.
The Fund’s performance was strong. Regularly in the top ten percentile among institutional investors in the US. The average annual return since the Fund started in 1949 was about 3 percent above inflation. Cecil credits this to tight collaboration between the investment staff, an advisory bank, and an Investments Committee of international experts who made asset allocation and currency decisions every quarter.
Cecil says this experience changed his personal life too. It made him much more aware of financial markets and investment opportunities.
The Iraq Compensation Commission
Cecil’s final career move came in early 1992. He went back to Geneva to become Chief of Claims Payments at the UN Compensation Commission (UNCC).
The UNCC was set up in 1991 after Iraq invaded Kuwait. When Iraq was forced out, the UN Security Council decided Iraq should compensate everyone who suffered losses. Individuals, companies, and governments. A Compensation Fund was created, financed by a percentage of Iraqi oil sales.
The scale of this operation is hard to wrap your head around. The Commission received 2.7 million claims. The total amount claimed was over US$350 billion. After review, just over US$52.4 billion was awarded to more than 1.5 million successful claims.
Most of the individual claims were relatively small, under US$10,000 each. But some corporate and government claims ran into the billions. Cecil’s office built a payments management system from scratch to handle all of this. It had to be accurate. It had to be transparent. It had to be accountable.
For the first few years, Iraq refused to accept the terms for selling its oil. People in Iraq suffered badly. In 1995, the “oil-for-food” program was finally agreed. Thirty percent of the proceeds from Iraqi oil sales went to the Compensation Fund, and the processing of claims sped up.
Awards over US$2,500 were paid in installments. Claims above US$100,000 got paid in multiple installments. By the end of 2005, all claims had been reviewed, over $20 billion in payments had been made to nearly 100 governments for distribution, and most individual claims were settled.
One interesting thing about the UNCC’s Governing Council: it was made up of the same countries that sit on the UN Security Council. But unlike the Security Council, no country had veto power. All 270-plus decisions were adopted by consensus. Cecil says keeping that consensus record intact was not easy. There were meetings where it looked like things would break down. But the members and the secretariat always found a compromise.
Seeing the Real Impact
Cecil says his time at the UNCC gave him something he rarely got in other UN finance jobs: seeing the direct impact of his work on real people.
He visited several countries and met claimants who came to receive their compensation. Many were from poor countries. They had been working abroad, sending money home to support their families, and their lives were completely disrupted when Iraq invaded Kuwait in 1990. Meeting them confirmed that the Commission’s work made a real difference, even if the compensation could only cover part of what they lost.
When the UNCC started downsizing in 2005 after completing its main work, Cecil took early retirement. He went on to do financial management consulting for organizations like the World Intellectual Property Organization, the Ramsar Convention on Wetlands, and the International Renewable Energy Agency.
About the Author
Cecil K.Y. Ee retired from the UN in December 2005. He started his career at the Port of Singapore Authority in 1971, then joined the UN in 1972. Over 33 years, he worked at the International Narcotics Control Board, the Budget Division in both Geneva and New York, the Salaries and Allowances Section, the UN Pension Fund, and finally the UN Compensation Commission. He holds a Bachelor of Economics (Honours) from the University of Malaysia, Kuala Lumpur.