UNESCO suspends new programs after U.S. funding cut

Delegates take part in the vote at the UNESCO headquarters where the United Nations' cultural agency decided to give the Palestinians full membership of the body, a vote that will boost their bid for recognition as a state at the United Nations, during the 36th session of UNESCO's General Conference in Paris October 31, 2011.

PARIS (Reuters) - The United Nations' cultural agency has suspended new programs in response to the U.S. decision to cut off funding after UNESCO granted the Palestinians membership, the agency said Thursday.

UNESCO Director General Irina Bokova told the UNESCO General Conference in Paris the U.S. cut had left a $65 million hole in the agency's 2011 budget.

"We have to take radical steps and we have to take them now," Bokova told the conference in Paris Wednesday, according to the text of her speech made public Thursday.

UNESCO, which promotes education and press freedom among other tasks, said it would put new commitments on hold between now and the end of December while it conducted a review of its activities to try and find savings.

A UNESCO spokesperson said priority programs would be maintained, and there were no plans for job losses at the organization for the time being.

The United Nations Educational, Scientific and Cultural Organization was plunged into financial chaos in October when Washington, which provides 22 percent of its funds, froze its contributions following the Palestinian vote.

U.S. legislation prohibits funding for any U.N. agency that grants full membership to any group that is not internationally recognized as a state.

Bokova said that by reviewing its contractual commitments, personnel expenses and travel and communications costs, UNESCO could probably generate savings of up to $35 million for this year's budget.

The agency would then use its $30 million working capital fund to cover the remainder of the $65 million shortfall, but that would leave its finances in a fragile state at the start of 2012.

For the coming year, the absence of U.S. funding meant UNESCO was facing a $143 million shortfall, Bokova said, adding the agency would prioritize its activities and reduce operating expenses further if needed.

U.S. President Barack Obama is talking to members of Congress about funding for UNESCO, but faces fierce opposition in an era of tight budgets, especially from Republican lawmakers.

Bokova appealed for additional voluntary funding from other member states to bolster agency finances, and said she was launching an Emergency Multi-Donor Fund for core priority programs.

The government of Gabon said Thursday it would donate $2 million to the agency to help deal with the immediate shortfall.

UNESCO also launched an online appeal for donations from the general public, which it said would go toward the emergency fund.

"I know this is not a long-term solution, but it will provide the organization with some breathing space to plan rationally within new conditions," Bokova said.

(Reporting By Vicky Buffery; Editing by Matthew Jones)