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UN Groups Can't Afford Swanky Geneva Address

IF the recent decision to base a new UN secretariat in Montreal is a harbinger, Geneva's days as the city of choice for the United Nations may be ending.

On Nov. 13, 148 countries gathered in Jakarta to decide where to base the new Secretariat for Biodiversity. Geneva lost to Montreal by 14 votes.

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Many countries are finding the Swiss city on the lake just too expensive. But some diplomats here suggest the vote was symbolic, too, showing that Geneva's lures - an attractive location and historic neutrality - no longer carry as much weight in a world increasingly more concerned with the balance sheet than the balance of power.

''For developing countries like us, all cities are expensive. But maybe it will be a little less expensive in Montreal,'' says M. Kuffi Kouame, a member of the Ivory Coast's delegation to the UN. ''Maybe it's not Switzerland, but that doesn't matter so much now.''

Switzerland's neutral status doesn't mean as much as it did during the cold war. The country's self-imposed isolationism has become more of a liability than an asset.

Not a member of the UN or the European Union, Switzerland will have a hard time convincing the world that Geneva is the best place for hosting international organizations, says Jean-Phillipe Tissieres, spokesman for the Swiss Federal Department for Foreign Affairs.

Geneva has a long history of hosting international organizations. The League of Nations was founded here in 1916. Some of the best-known UN organizations make their home here, including the World Health Organization, the UN High Commissioner for Refugees, the World Trade Organization, the World Intellectual Property Organization, and the International Labor Organization.

Nearby Germany is one among many countries eager to host UN activities. Germany contributes 8.9 percent of the UN budget, third highest behind the United States (25 percent) and Japan (12.5 percent). Two new UN organizations, UN Volunteers and the UN Secretariat for Climate, will be located in Bonn. ''We would like to have some UN organizations here because until now we were the only major UN donor not to have an organization,'' says an official from the German mission to the UN.

In fact, Bonn had tried hard last year to lure the World Trade Organization, says Hans-Peter Werner, spokesman for the WTO. ''Bonn made a good offer, but the Swiss kept topping it,'' Mr. Werner recalls. ''So the delegations decided to stay.'' To keep the nearly year-old WTO here, Switzerland offered it exemption from the valued-added tax, access to Swiss employees, and help in covering the cost of relocating families. As a result, many other UN organizations are pressuring Switzerland to give them tax breaks and other financial incentives to stay.

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The UN's poor financial situation, together with a strong Swiss franc, are making it harder for many countries to stay in Switzerland. Last week nearly 2,000 international UN employees poured onto the streets in front of the United Nations Palace here demanding better pay. The demonstration prompted rethinking about new ways to save money, including privatizing mailing and printing operations and relocating some of the UN organizations.

The US recently proposed to move part of the World Intellectual Property Organization to California. And France has floated the idea of moving some of the UN offices to its territory just six miles from Geneva.

Official UN organizations aren't the only ones feeling pinched. The roughly 150 nongovernmental organizations in Geneva are in danger of having to pull out too, says Cyril Ritchie, president of the Geneva-based Federation of Semi-Official and Private International Institutions.

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