The United Nations financial crisis continues to deepen because of the delays with which Member States have paid their assessed contributions, both for the regular budget and for peace-keeping operations. As at 10 August 1995, unpaid assessed contributions totalled $3.9 billion: $858.2 million for the regular budget (of which $456.1 million relates to the current year (1995) and $402.1 million relates to prior years) and $3 billion for peace-keeping operations, current and prior shortfalls taken together (see fig. 6).
The United Nations is able to continue its peace-keeping operations only because the payment of bills and reimbursements to troop-contributors are being delayed. By the end of the year, unpaid reimbursements to troop-contributors and payments owed for contingent-owned equipment are estimated to reach the $1 billion mark. This situation cannot continue. Troop-contributors have expressed their difficulty with continuing participation in peace-keeping operations if they are not paid on time.
Many Member States have made serious efforts to expedite payment of their assessments but, without substantial additional major contributions before the end of the year, the cash balance of the United Nations will be dangerously low. This difficult financial situation, in particular when compounded by the continued unpredictability of the receipt of contributions, has a direct impact on the efficiency of the Organization and makes it more and more difficult to manage it effectively.
Along with these cash difficulties, the Organization has also been facing another serious problem as a result of the growing practice on the part of the General Assembly of authorizing spending on additional or new activities without providing corresponding resources through assessments on Member States. This has further exacerbated the already difficult financial situation, since the only way to provide funding for those activities is to borrow from accounts with cash resources, without any assurance that those accounts will be replenished in order to implement activities for which Member States had initially provided resources.
Unless the receipt of unpaid assessments dramatically improves, there will be no choice but to reduce spending further, focusing on those activities for which no assessments have been approved. Activities for which assessments have been approved, but have chronically not been paid by Member States, may have to be curtailed.
Notwithstanding these financial problems, efforts are continuing to make the Organization more efficient and more effective in carrying out the many tasks entrusted to it. In formulating the proposed programme budget for the biennium 1996-1997, particular emphasis has been placed on management improvements, which have resulted in savings without affecting the delivery of mandated activities. On that basis, a budget has been proposed for the next biennium in the amount of $2,510 million (at current rates before re-costing) for approval by the General Assembly this year. This represents a reduction of $109 million, or 4.2 per cent less than was appropriated for 1994-1995 (see fig. 7). The implementation of the 1996-1997 programme budget, once approved by the General Assembly, should not suffer from the same financial uncertainties that the Organization has been experiencing.
The objective of the High-level Open-ended Working Group on the Financial Situation of the Organization, which was established by the General Assembly and began meeting in January 1995, is to bring about constructive and positive changes to provide the Organization with a long-sought-after solid financial base.
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