A SPECIAL ECONOMY emerges around any large UN office in the developing world. Other international bodies are regrouping around it. Expats are settling in the safe and pleasant neighborhood in which it is located. Local suppliers compete for contracts to sell fresh produce, stationery and other commodities to all of these organizations. Unskilled workers get jobs as cleaners, gardeners and security guards. And small businesses, such as posh cafes and dry cleaners, thrive serving expats and well-paid local staff.

The reason there is so much economic activity around UN hubs is simple: the UN has a lot of staff with a lot of money to spend. The UN The Secretariat has a budget of $ 3.2 billion this year, with additional pots for peacekeeping and other agencies. A lot of that goes into wages. So-called “professional staff”, who travel around the world, earn a base salary ranging from $ 46,000 per year for a young politician to $ 205,000 for an Under-Secretary-General (usually the head of a UN organization such as the World Food Program).

That would be more than enough to live comfortably in any African capital. But there are additional allowances for expats with a family in tow. And jobs in cities like Nairobi and Addis Ababa come with extra pay because they count as “difficult” positions. (This is debatable. Street crime may be common in Nairobi, but the weather, bars, sports clubs, and grilled beef are extremely pleasant.)

An influx of well-paid workers gives an economic boost to any city. When the UN was established in 1945, American cities clashed to host its headquarters. Since then places like Copenhagen and Geneva have courted UN agencies with shiny new buildings and tax incentives. The calculations of the New York mayor’s office, which hosts the UNcity ​​headquarters, suggest it adds nearly $ 3.7 billion to the city’s annual output. The UN, its agencies and subsidiaries are together its 22nd employer, with 10,900 employees.

The advantages of hosting the UN are much larger in places that aren’t already teeming with Wall Street bankers, fashion stars and other big spenders. Member States have chosen Nairobi, Dakar and Addis Ababa as hubs in Africa. There are only a handful of cities on the continent that are safe and well-connected enough to accommodate legions of foreign workers and their families. But it is crucial, believes Stéphane Dujarric, the spokesperson for the Secretary General, to have teams on the ground. “If you’re working on development policy, doing it from New York or from Nairobi and Dakar gives you a different perspective,” he says.

The economic impact is evident in Gigiri, a leafy corner of Nairobi where the organization’s African headquarters are located. Road signs indicate the importance of the 5,000 UN the staff who work there are in the local economy: the United Nations Crescent leads to United Nations Avenue. The area is full of fancy restaurants, cafes and hotels unaffordable for most Kenyans. At Village Auto Bazaar, a car wash and service center, Joshua Muhanji estimates that around 70% of his business comes from UN workers.

Yet being a UN hub, too. New York spends around $ 54 million on things like staff safety and public schools for their children. It waives nearly $ 100 million in taxes thanks to tax exemptions UN buildings and diplomats. “The city is making a considerable investment to accommodate the UN, but it’s worth it, ”says Penny Abeywardena, New York City’s commissioner for international affairs.

Emerging markets have other drawbacks. Cities can become dependent UN expenses. Gigiri’s businesses struggled during covid 19 shutdowns, as offices emptied and expatriate staff fled. In Dakar, it is planned to relocate various UN offices in the seaside district of Almadies in a new town 30 km from the capital. This worries Almadie businesses, from high-end cafes to informal car washes and the American Food Store.

A big UN presence can also distort the local labor market. The organization’s Flemming principle dictates that the wages of local employees, who are employed on different terms and paid in national currency, should be “among the best in the area, not the absolute best.” The UN conducts regular surveys of what private companies, governments and nonprofits pay in a given location. And he uses that information to set his Alphabet Soup pay scales. In Nairobi, for example, a driver can earn the equivalent of $ 9,000 to $ 14,000 per year, while a more skilled assistant can earn between $ 32,000 and $ 50,000. It is much less than the expatriate staff. But in a country with a year GDP per person of only $ 1,800 is a princely sum. Joe Muturi, director of Slum Dwellers International, a network of NGOs, put it bluntly: “everyone wants to work for the UN. “

Martyn Davies, managing director for emerging markets and Africa at Deloitte, a consultancy firm, says large international organizations are strengthening a two-tier economy. UN employees mingle in fancy bars and restaurants most locals can’t afford, and bring middle-class families out of nice neighborhoods. “It’s monetary apartheid,” Davies says.

This kind of inequality might spark resentment, but many locals are pragmatic. At Alkimia, an Almadies restaurant serving $ 88 steaks and $ 45 seafood platters, Chef Dimitri Vasnier sees the irony in anti-poverty and environmental advisers who arrive in 4x4s and leave behind intact plates stacked at the buffets. Corn UN neighborhood staff are a major clientele for the restaurant. “There is so much garbage,” he says. “But that’s what keeps the economy going.” â– 

This article appeared in the Middle East and Africa section of the print edition under the title “Expatonomics”