17/10/2001
Press Release
GA/AB/3464



Fifty-sixth General Assembly

Fifth Committee

12th Meeting (PM)


ZERO-GROWTH BUDGET GOAL UNREALISTIC IN VIEW OF FLUCTUATING EXCHANGE RATES,

FUTURE PEACEKEEPING REFORMS, SAY FIFTH COMMITTEE SPEAKERS


Concern Expressed over Proposed Posts, Reclassifications at Senior Levels


As consideration of the United Nations proposed programme budget for the next biennium continued in the Fifth Committee (Administrative and Budgetary) this afternoon, speakers welcomed the new results-based format of the budget and the clarity of its introduction.  Most speakers also agreed that resources provided should be commensurate with all mandated activities, and expressed concern over the number of proposed posts and reclassifications at the senior level.


In particular, the representative of the Philippines, speaking also on behalf of the Association of South-East Asian Nations (ASEAN), expressed concern that the proposed level of budget resources ($2.52 billion) represented a very modest increase over the previous biennium.  He sought assurances that sufficient resources would be provided to fully implement all mandated activities and programmes for 2002-2003, as agreed in the medium-term plan.  Any imposition of an artificial ceiling on the proposed programme budget would hamper the Organization’s ability to respond quickly and effectively to the new demands.


Echoing that concern, the representative of India said that, while zero nominal growth/zero real growth had been proposed and approved in the past six years, the next biennium budget would need to provide for an amount anywhere between $50 million and $155 million towards recosting.  [Recosting involves adjusting the budget figure to account for such changes as inflation and exchange rate fluctuations.]


He went on to express serious doubts regarding the possibility of arriving “at a budget similar to the previous one”, because it had been the relative strength of the United States dollar that had contributed to past savings.  Now, its position against other currencies could present a challenge.  He also wondered how additional expenditures for newly mandated activities, including the implementation of the Brahimi recommendations on peace operations and enhanced safety and security measures, would be met.  He, therefore, believed that a zero nominal growth budget was impracticable.  However, additional resources for those activities could easily be built into the budget, given the relatively small figures associated with them.


The representative of the Russian Federation supported maintaining the existing level of budgetary expenditures by improving the management culture and imposing strict financial discipline.  Changes taking place within the Organization made it possible to carry out more work with fewer resources.  The important task in budget preparation was to identify obsolete and ineffective activities and programmes, which would allow the Organization to release resources for priority projects.  In that connection, he noted that the new format of the budget should facilitate the effective redistribution of resources, for it placed greater emphasis on the evaluation of practical results.


Also speaking this afternoon were the representatives of Guyana, Egypt, Myanmar and Ghana.


The Committee will continue its work at 10 a.m. tomorrow, 18 October, when it is scheduled to conclude its general discussion of issues related to the scale of assessments.


Background


The Fifth Committee (Administrative and Budgetary) met this afternoon to continue its consideration of the proposed budget for the biennium 2002-2003.  [For background information, see Press Releases GA/AB/3458 of 12 October and GA/AB/3460 of 15 October.]


Statements


VADIM VOLKOV, Deputy Minister of Finance of the Russian Federation, said the international community was facing the urgent task of adequately and collectively responding to current challenges, including terrorism, and of strengthening international security in all its dimensions.  It was necessary to strengthen the role of the United Nations as an indispensable instrument for maintaining international peace.  The United Nations must strengthen its operational capabilities and improve its executive mechanisms.  Given that the proposed budget for the next biennium had been prepared within the framework of the 2002-2005 medium-term plan, he supported the submitted budget document.  He also supported the Secretary-General’s measures to realign limited resources with new priorities, to rationalize expenditures and to achieve higher efficiency.  By improving the management culture and imposing strict financial discipline, it would be possible to maintain the existing level of budgetary expenditures.


The recosting of the budget might significantly impact the general parameters of the proposed budget, he continued.  Several questions would need to be addressed, including how urgently requested resources would be taken into account in negotiating the final budget and where the necessary funds would come from.  In that regard, possible savings might come from administration, General Services, travel, expenditures on consultants and additional savings from investments in information technology.  He shared the concern of the Advisory Committee on Administrative and Budgetary Questions (ACABQ) on the “swelling” of the upper portion of the Secretariat staffing table and the need to fight the “grade creep”.  That problem should be solved through increasing staff mobility, through the redeployment of human resources and through a radical reform of the contracts system, opening the door for young professionals.


In preparing the budget, it was important to identify the obsolete and ineffective activities and programmes, lowering expenditures and releasing resources for priority projects, he said.  The budget’s new format, which emphasized the practical results of the Organization’s work, could and should facilitate the effective redistribution of resources and the search for savings without detriment to approved priorities.  The Russian Federation had welcomed the natural evolution of United Nations budgeting, from a line-item to a programme budget and from a programme to a results-based budget.  Although the practical implementation of the new approach in a number of sections left much to be desired, he noted with satisfaction the overall improvements in the budget’s format.  The goal of the new format was to ensure the maximum output from resources, to provide more effective fulfilment of mandates and to ensure stricter control of the Organization’s limited resources.  The proposals of his delegation for the 2002-2003 budget were based on the Russian Federation’s budget policy for 2002, which sought to enhance the role of the budget as a tool of economic policy and to improve the quality of managing assets and liabilities.

DONNETTE CRITCHLOW (Guyana) endorsed the statements made on behalf of the “Group of 77” developing countries and the Rio Group, and added that, to build on the positive momentum reported last week by the Under-Secretary-General for Management, all Member States should honour their financial obligations under the Charter.  In the absence of their commitment, the Organization would not be able to implement its mandated programmes and activities and would risk losing relevance in the international community.


Resources of the Organization should be commensurate with its mandates and activities, she continued.  There should be no “ceiling” on the budget of the United Nations.  Mandates approved by Member States should be financed in accordance with Article 17 of the Charter.  There should not be heavy reliance on extrabudgetary resources to finance mandated activities.  It was the responsibility of all Member States to provide the necessary resources as apportioned by the Assembly.


As it had been observed that some of the programme sections for 2002-2005 were not in keeping with the medium-term plan, she reaffirmed that the medium-term plan was the principal policy directive of the Organization, and as such should form the basis for the development of the proposed budget.  She called for careful scrutiny by the Secretary-General and oversight bodies to detect reasons for non-compliance with legislative mandates. 


She went on to say that the use of the phrase “within existing resources” in resolutions adopted by subsidiary bodies, the Economic and Social Council, and the Main Committees was clearly in contravention of resolution 41/213, for it was the Fifth Committee that was mandated to address all budgetary and administrative matters.  Adequate resources should be made available for all the sectors related to social and economic development, particularly to ensure full participation of small island developing States in the global economy and the international trading system.


KAMALESH SHARMA (India) aligned his delegation with the position of the Group of 77 and China and joined those who had welcomed the new presentation of the budget and the clarity of its introduction.  He expressed concern over the number and type of proposed post reclassifications, and stressed the importance of the medium-term plan as the principal policy directive.  He also agreed with others that resources provided should be commensurate with all mandated programmes and activities without an artificial ceiling.


Regarding the financial situation of the Organization, he was happy that the Secretariat expected the years of “doom and gloom” to be replaced with good news.  As a country that was owed the second largest amount in peacekeeping arrears, India expected to fairly soon be reimbursed at least a third of the more than

$90 million that was owed to it.  What continued to be disconcerting, though, was the United States’ $1.8 billion in projected debt to the Organization, with large amounts owed by other large contributors.  The continuing negative cash balance of the Organization was also worrisome. 


While zero nominal growth/zero real growth had been proposed and approved in the past six years, the next biennium budget would need to provide for an amount anywhere between $50 million and $155 million towards recosting, including approximately $30 million to 35 million between December last year and now, he continued.  That was where the key role of the Controller and his team came in.  He expected the Secretary-General to forewarn Member States that the relative value of the United States dollar as opposed to other currencies, which had contributed to past savings, was in all probability going to present an insurmountable challenge in arriving at a budget similar to the previous one.


The Fifth Committee would also have to be told how additional expenditures for implementing the Brahimi recommendations and enhanced safety and security measures would be met, he said.  Therefore, he believed that a zero nominal growth budget was impracticable.  Additional resources for those activities could easily be built into the budget, given the relatively small figures associated with them.  As for recosting estimates, they did not constitute an actual increase in the budget.


Continuing, he stressed that, while peacekeeping was being strengthened, the Assembly should equally focus on efforts to strengthen departments servicing economic and social sectors.  Noting the Secretary-General’s appeal for help in facilitating a strategic redeployment of resources through implementation of “sunset provisions”, he suggested that the Assembly should continuously assess the cost-effectiveness of its programmes and activities.  Those activities that were believed to be a drain on United Nations resources deserved ruthless scrutiny before being approved for the next biennium.  Charged with detecting fraud and abuse of authority, the Office of Internal Oversight Services (OIOS) should undertake a preliminary study in that respect.


AYMAN M. ELGAMMAL (Egypt) supported the Secretary-General’s efforts for the administrative and financial reform of the United Nations and welcomed the budget’s new results-based format.  He stressed the importance of the medium-term plan as the principal policy directive of the United Nations, which translated legislative mandates into programmes and activities.  He agreed with the position of the Group of 77 and China on the importance of increasing resources for economic and social development, so that the Organization could better face the challenges of globalization.  The Secretary-General’s budget did not include budgetary requirements for the security of personnel, the comprehensive review of peacekeeping operations and the report of the Committee on Information on the international radio broadcasting capacity of the United Nations.  He urged the Secretariat to expedite the preparation of those reports and their budgetary implications, so that a decision could be taken on them in the framework of consultations on the 2002-2003 proposed programme budget.


He stressed the important role of the Department of Public Information (DPI) in the current difficult time, which necessitated the provision of necessary resources for the Department to deliver its message to all.  It was important to enhance both the traditional means available to the Department -- such as radio broadcasting -- as well as the use of technology and other more advanced means.  He supported the recommendation of the ACABQ for accepting proposed resources of section 10, Africa, the New Initiative for Development, which would replace all current initiatives in that area.  He also expressed full support for the work of the United Nations Relief and Works Agency for Palestine Refugees in the Near East (UNRWA), which faced difficulties in implementing its programme due to the current situation in the region.  He stressed his refusal to accept the imposition of any artificial ceiling on the level of the budget. 


Information and communication technology could enhance the efficiency of the Organization in implementing its legislative mandates, he continued.  Such technology could also contribute to savings in several fields, including travel.  Egypt valued the efforts of the OIOS in uncovering fraud and mismanagement in the financial and administrative reform of the Organization.  Information technology was an indispensable managerial tool for that Office, and should be financed from the regular budget. The recent events in New York put a spotlight on international terrorism.  It was, therefore, important to review section 14, on the prevention of crime and criminal justice, in order to enhance the ability of the Organization to combat terrorism.


ENRIQUE A. MANALO (Philippines), speaking on behalf of the Association of South-East Asian Nations (ASEAN), associated himself with the statement by the representative of Iran on behalf of the Group of 77 and China.  He said that ASEAN had always been supportive of the measures proposed by the Secretary-General to improve the efficiency and cost-effectiveness of the Organization.  He shared the Secretary-General’s concern that, for a number of years now, the Organization had been expected to do more with less. 


He said that the proposed level of budget resources represented a very modest increase over the previous biennium.  In that regard, he sought assurances that the proposed level of resources would be sufficient to fully implement all mandated activities and programmes for 2002-2003, as agreed in the medium-term plan.  Any imposition of an artificial ceiling on the proposed programme budget would hamper the Organization’s ability to respond quickly and effectively to the new demands. 


Noting the increase in the number of reclassifications and new posts at the senior level, he said that ASEAN shared the concern of the ACABQ that any reclassification would have to be justified by changes in the nature or scope of the work and workload.  Processes governing recruitment and promotion should not be circumvented through reclassification of posts.


U ZEYAR OO (Myanmar) appreciated that the proposed programme budget had assumed a new format using results-based budgeting.  The medium-term plan must be the principal policy directive for the programme budget.  Myanmar fully subscribed to the need for budgetary discipline.  That should, however, be achieved through greater efficiency and should not constrain the smooth running of the Organization.  Adequate resources should be provided for areas such as the environment, economic development, humanitarian assistance and development of Africa –- areas of vital importance to developing countries. 


The success of the Organization would depend in large measure on prompt and unconditional payment of assessed contributions, he said.  All Member States must honour their Charter obligations.  As more was being demanded of the Organization, it should be provided with adequate resources to carry out its mandates.


HAROLD ADLAI AGYEMAN (Ghana) said the budgetary estimate of some

$2.52 billion represented a useful basis for consideration of the regular budget for 2002-2003.  The proposals were a fine reflection of best practices of the Organization in operating a static budget through prudent management of available resources.  The strains on the budget were, however, obvious.  Despite a 4.6 per cent nominal growth, the real growth for the budget was negative, about 0.5 per

cent.  The struggle for budgetary stringency must not be at the expense of effectiveness, but should be realistically aligned with the collective demands on the Organization.  Ghana’s support for modest and realistic increases should not be seen as a wanton desire to bloat the budget.  He expected that all additional increases would need to be justified in a manner which ensured prudent allocation of resources.


On the question of staff costs, which constituted around 80 per cent of the regular budget estimates, he shared concerns relating to the number of upward reclassifications and new posts at senior levels.  He looked forward to receiving ample justification for those proposals, and also urged the further rationalization of staff deployment.  He was concerned with raising estimates for extrabudgetary funding of core mandates.  He also called for adequate resources for international cooperation for development, particularly relating to section 10 of the budget.  The new format of the budget could provide objectivity and focus to policy directions and achievement of objectives.


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