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Last Updated: Saturday, 29 April 2006, 03:08 GMT 04:08 UK
Poor nations block key UN reform
By Laura Trevelyan
BBC News, New York

UN Secretary General Kofi Annan
Mr Annan planned the reforms after the Oil for Food scandal
Developing countries at the United Nations have voted to shelve management reforms drawn up in the wake of the Oil for Food scandal.

Secretary General Kofi Annan had proposed that his office would have more control over staff and resources.

The reforms were planned to restore credibility to an organisation battered by scandals.

The vote, which has left the UN deeply divided, could also provoke a financial crisis at the organisation.

'Bitterly polarised'

By voting to keep control of the UN budget and staffing practices with the General Assembly, rather than giving more power to Kofi Annan, the poorer countries may have provoked a chain reaction that could lead to a financial crisis in June.

The US has insisted on linking payment of the next stage of the UN budget to progress on management reform.

But the developing nations felt this was a power grab by the richer countries which took influence away from them.

After three days of high drama, the UN is now bitterly polarised following this vote.

The EU, the US and Japan - who contribute 82% of the budget - wanted these reforms to go ahead.

But the more numerous poorer countries won the vote, insisting it is not up to the UN's paymasters to call the tune.

One EU diplomat warned the developing nations they were playing with fire by pushing this to a vote - a threat that had no effect.

Now Kofi Annan's management reforms are stalled and a budget crisis looms.

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