Atom Watchdog Broke By September? (Updated)

By Cernig

Yesterday the IAEA's director general, Mohammed El-Baradei, made an extraordinary appeal to the member nations of the nuclear watchdog agency's board - pay up or we'll go bust!

The revelation was given in the context of a speech by El Baradei welcoming North Korea's recent moves to rejoin the mainstream on nuclear proliferation. During that speech, he said:

As explained in my report, the conduct of the verification activities requested by the DPRK was not foreseen in the Agency´s budget. The initial costs of these activities, estimated at €1.7 million for 2007 and €2.2 million for 2008, would cover inter alia the replacement of cameras and installation of containment and surveillance devices, the purchase of other needed equipment, and logistical and staff costs. I am requesting Member States therefore to provide funding for the implementation of these verification activities in 2007 and 2008. I should emphasize that, as with all our verification work under the Statute, verification in the DPRK should not have to rely on donations by individual States. I intend therefore to include the associated costs in the draft regular budget for 2009.

The DPRK case clearly illustrates the need for the Agency to have an adequate reserve that can be drawn upon to enable it to respond promptly and effectively to unexpected crises or extraordinary requests, whether in the areas of verification, nuclear and radiological accidents, or other emergencies.

The Agency´s financial vulnerability is also demonstrated by our current cash situation, which indicates that unless some major donors pay their outstanding contributions by the end of next month, the Agency will have to draw from the Working Capital Fund in order to continue operations. And unless contributions are received by September, that Fund would be depleted.

If I'm reading that last paragraph correctly, he's saying that unless delinquent nations pay up quickly then by September the IAEA might have no money left to fund its operations.

El Baradei went on to explain that the IAEA's budget even under more normal circumstances is inadequate for its needs - it received only a 4.2% increase this year - and that this would "lead to a steady erosion of our ability to perform key functions, including in the verification and safety fields." He has initiated a study to produce budget predictions and requirements, believing that "the Agency´s critical missions in the fields of development, safety and security, and verification deserve no less."

In a press statement, El Baradei continued to set out what he sees as the Agency's requirements in an era of increasing work for the nuclear watchdogs.

"I made it clear that my expectation is that the panel will come with a recommendation for a major increase in the budget, maybe even doubling the budget, because I can see myself that the investment needed in the infrastructure alone is something in the neighbourhood of 150 million dollars... My approach is that the more we invest in preventive measures, the better it is for everyone...

"I should also take note with appreciation of President Bush´s and President Putin´s joint declaration last weekend at Kennebunkport in the US, when they made it very clear that they fully understand the need for additional financial resources for the Agency to meet its increasing responsibilities including the growing interest in nuclear power. This is a good message coming from two leaders and I hope that message, looking at the big picture, will be followed in the future."

The Arms Control Association writes that this situation has been brewing for a while now and that many within the US government, as well as other experts, are worried by it.

Nongovernmental experts interviewed by Arms Control Today in June agreed that the IAEA needs a budget increase immediately. Government officials have made similar claims. For example, Ambassador Abdul Minty, South Africa’s representative to the IAEA Board of Governors, warned in a June 14 statement that the IAEA’s current budget situation could result in the “weakening” of the agency.

The State Department fact sheet also acknowledged that the agency needs additional funding. But in a June 21 interview with Arms Control Today, a knowledgeable U.S. official said that the urgency of ElBaradei’s case is “not proven.”

I've looked in vain for some note of which countries, exactly, El Baradei was referring to as delinquent in their contributions and I've emailed the IAEA to see if they can provide those details.

However, I will say this. Given the way in which the US neoconservative right has been criticizing El Baradei and the Agency for years now - and most recently as being an obstacle to their wished-for war with Iran - I doubt very much if the Cheneyites within the current administration would shed a tear if the IAEA ran out of money to do its incredibly important jobs of verification, inspection and investigation.

Update I've spent several hours pouring over IAEA PDF's for a list of delinquent payers to no avail so hopefully the IAEA will respond to my email with a list. I would note that I've found that the Working capital Fund is only $18 million - less than a month's worth of operating costs for the IAEA. Further, it seems very likely the biggest non-payer is the U.S.

Back in June, the Christian Science Monitor reported on the approaching budget crisis at the agency.

though the major powers voice fears of nuclear terrorism and nuclear accidents, financial support for the IAEA doesn't necessarily follow, says Vitaly Fedchenko, a researcher with the Stockholm International Peace Research Institute in Sweden.

"There's an expression in English: Put your money where your mouth is," says Mr. Fedchenko. "If you're saying the IAEA is important, OK, but do you really mean that by contributing to the agency? Arranging your spending priorities in a certain way is a political statement in itself."

With the IAEA's Eu 283 million ($379 million) annual budget, the United Nations has touted the Vienna-based agency as "an extraordinary bargain." The US Office of Management and Budget has stamped it as "100 percent" worth the US allocation. The IAEA and ElBaradei were jointly awarded the 2005 Nobel Peace Prize.

As the US is the IAEA's main sponsor, contributing 25 percent of the budget – only Japan is No. 2 with 19 percent – some observers accuse Washington of reluctance to expand the budget. A US official rejects the charge.

"All I'm doing is laying out the facts: we are the IAEA's largest supporter," says the State Department official. While new US legislation has "reduced the limit of what we pay to any international organization to 22 percent, the one exception is the IAEA."

But the IAEA reported last September that of the Eu 35 million donors had yet to deliver, Washington owed one-third of it.

Two thirds of 25% is only 16.7% and the shortfall in assessed contributions for the U.S. alone would amount to somewhere in the region of $24 million - or a full months operation for the IAEA under the 2007 budget.