Wednesday, March 17, 2004

Tell 'em to call Ditech!

UN weighs options after US seeks interest on loan
The United Nations should look at other ways to fund the renovation of its New York headquarters after the United States rejected the world body's request for an interest-free loan, Secretary-General Kofi Annan said on Monday.

The U.N. had sought an interest-free $1.2 billion loan from Washington, but the Bush administration, fighting soaring budget deficits, offered to lend the money at 5.54 percent interest.
Considering that the United Nations has no gainful employment, that seems pretty generous.
If the United States lent the money, it would end up paying a quarter of the cost of the interest payments through its annual dues payments.
In fact, way too generous.
The U.N. complex, one of New York's most popular tourist sites, marks the New York skyline along the East River. But inside, water drips through the roof, toxic asbestos lines ceiling tiles, heating and cooling systems are erratic and the building lacks sprinklers in case of fire.
That ought to make most of the ambassadors feel right at home.
Under the latest version of the master plan, New York City would lend the United Nations a nearby park for construction of a new 30-story office tower that would temporarily house U.N. staff while the main U.N. building was gutted and renovated.
Here's a clever plan - sic the ecoweenies on 'em. Save the park! Actually, knowing bureaucracies everywhere, what are the chances they would ever vacate the "temporary" building?

Although the above is from odious Reuters, nothing imparts the dead, bureaucratic UN flavor like a UN press release:
Formally presenting his country’s provisional loan proposal, which is subject to approval of Congress, the United States representative said his Government would pay its 22 per cent regular assessed share of the loan’s principal and interest. That included a waiver of the United States past practice not to pay interest on United Nations loans. The United States Treasury would float a loan to raise the principal. The interest to be paid by Member States would not be paid to the United States Government, but to the investors who put up the principal. The United States Government would make no money on the loan to the United Nations and, in fact, was paying approximately $6 million to guarantee the loan and insure it against default.
You have to be kidding! But listen to the peanut gallery:
Responding to the United States’ proposal, Ireland’s representative, on behalf of the European Union, expressed strong concern that the cost of the project would more than double as a result. During its negotiations prior to the adoption of 57/292, there was an understanding in the Fifth Committee that the United States’ offer would not be in the form of an interest-bearing loan. Accordingly, the Union continued to believe that the United States should provide a substantial portion of the funding for the capital master plan.
Forgive me, St. Patrick, but why don't the Irish representative and the EU shove their "understanding."
A similar concern was expressed by the representative of India who said that a loan with an interest rate of 5.54 per cent would entail a repayment obligation for the Organization of $2.5 billion on a $1.2 billion loan, assuming a 30-year repayment period.
Nice to see that someone at the UN has a grasp of simple financial transactions.
China’s representative said the same kind of interest-free loans as had been used to build the United Nations complex should be used for the reconstruction of the Headquarters.
And he whipped out his checkbook? Not likely.
He hoped the Secretary-General would engage in consultations with the host Government on the loan terms to arrive at an acceptable funding arrangement.
What a surprise! But here's some good news:
Several speakers also encouraged the Secretary-General to continue to explore other financing options for the funding of the capital master plan, including private contributions.
Kewl! Don't let the garage door hit y'all on your ample backsides!