21 October 2010
General Assembly
GA/AB/3963

Department of Public Information • News and Media Division • New York

Sixty-fifth General Assembly

Fifth Committee

9th Meeting (AM)


Budget Committee Takes Up Report on Improving United Nations Financial Situation


Noting the Organization’s “mixed” financial situation, delegates at the Fifth Committee (Administrative and Budgetary) today reminded each other of the need to make timely contributions in full, so the United Nations could carry out its role as a global peacekeeper.


Assistant Secretary-General and Controller Jun Yamazaki gave delegates a brief update of the financial picture described by Under-Secretary-General for Management Angela Kane when she briefed the Committee last week.  He referred to the Secretary-General’s Report on “Improving the Financial Situation of the United Nations” that had been issued 18 October.  Since Ms. Kane’s presentation, three other Member States — Monaco, Kazakhstan and Sweden — had joined the dozen other countries that had already paid their assessments in full as of 11 October.  At that time, Ms. Kane noted the contributions of Australia, Azerbaijan, Canada, Democratic Republic of Congo, Denmark, Germany, Liechtenstein, Netherlands, Singapore, Switzerland, South Africa and the United Republic of Tanzania.


While noting that Member States’ unpaid contributions to the regular budget were lower than unpaid contributions at the same time in 2009, delegates noted that outstanding assessments for peacekeeping operations had grown dramatically to about $3.2 billion, up from about $1.85 billion last December.  Ms. Kane had said that, for the regular budget, unpaid assessments had totalled $787 million as of 5 October 2010, $43 million less than the $830 million outstanding on 13 October 2009.


Several delegates expressed their discontent over the fact that a small number of developed countries were behind most of the arrears.  Speaking on behalf of the Group of 77 developing countries and China, the representative of Yemen said it was unfortunate that the bulk of outstanding payments, for the regular and peacekeeping budgets, as well as for the international tribunals, were owed by a small group of developed countries, one in particular “…and surprisingly, in the case of the peacekeeping budget, several Member States who were Permanent Members of the Security Council and who had a special responsibility for the maintenance of international peace and security”.


Several delegates also urged the Organization to make greater efforts to ensure that troop-contributing countries were reimbursed fully and on time for their commitments to the Organization’s peacekeeping work.  India’s representative was encouraged that the peacekeeping debt owed to Member States was expected to drop to $430 million by year’s end, down from $775 million in 2009.  Yet, that amount was too high, he said, adding that India was among the Member States owed significant amounts of money.  India’s contribution to United Nations peacekeeping was not a mercantilist venture.  “It was born of our faith and conviction in the principle and purposes of the [United Nations] Charter,” he said, adding that India’s national legislature was asking why the United Nations was remiss in making payments.


Acknowledging the severe financial situation that nearly all countries had faced, Japan’s delegate stressed the responsibility each Member State had to pay its assessments on time and in full.  The Government of Japan had faithfully fulfilled its obligation; even when it had faced a tough financial situation and its own Government expenditures had been reviewed.  He noted the $82 million in outstanding contributions to the Capital Master Plan, and said he strongly hoped the figure would not be used to justify delays or ask for more resources.


In her presentation, Ms. Kane had said that as of 5 October 2010, payments totalling $1.4 billion had been made toward the Capital Master Plan against assessments due and payable.  In 2006, the General Assembly had approved a $1.9 billion budget for the multi-year renovation of Headquarters.


Cuba’s representative noted that even though the Organization’s financial situation was improved over previous occasions, the highest debt was still owed by one Member State.  That same State had benefited from a major distortion in the methodology of assessments.  He called for a timely and full compliance with financial obligations, adding that Cuba had met its budget obligations despite the financial crisis and 50 years of an unjust blockade by the United States Government.


Also speaking today were the representatives of Belgium (on behalf of the European Union), Chile (on behalf of the Rio Group), Australia (on behalf of Canada and New Zealand), Russia, Nicaragua, Viet Nam, China and Argentina.


The Committee will reconvene at 10 a.m. Monday, 25 October, to resume its discussion of overseas property management, as part of the programme budget biennium 2010-2011.


Background


When the Fifth Committee (Administrative and Budgetary) met today it had before it a report of the Secretary-General on improving the financial situation of the United Nations (document A/65/519), in which he updated the information on the financial situation of the United Nations contained in the previous report (document A/64/497/Add.1), issued in May 2010.  Issued on 18 October 2010, this latest report provides a review of the Organization’s financial situation as of 5 October 2010 and updated projections up to 31 December 2010.


The report considers four main financial indicators:  assessments issued; unpaid assessed contributions; available cash resources; and the Organization’s outstanding debt to Member States.  As of 5 October 2010, assessments issued during 2010 were lower than at 31 December 2009 for the regular budget and the international tribunals, but higher for peacekeeping funds.  Assessments for the Capital Master Plan were maintained at the same annual level.  Unpaid assessments as at 5 October 2010 were higher than as at 31 December 2009 for all categories.


The payments of troop and equipment obligations were mostly current for all active missions and the amounts owed to troop and equipment providers at 31 December 2010 are expected to be lower than the projection made in May and about $345 million below the amount owed as at 31 December 2009.


Cash positions are projected to be positive at year-end for all funds, although the final outcome will be dependant on last-quarter contributions.  Unpaid assessments remain highly concentrated among a few Member States, particularly for the regular budget, the international tribunals and the Capital Master Plan.  Consequently, the final outcome for 2010 will depend in large measure on the payments that those Member States make in the final months of 2010.  The only way to overcome this problem and to ensure a more stable financial base for the work of the United Nations is for Member States to meet their financial obligations to the Organization in a fuller and more timely fashion, the report states.


The report also states that a review of the financial situation shows decreases in the level of assessments for the regular budget, from $2.5 million at 31 December 2009 to $2.2 million at 5 October 2010; and for the international tribunals from $348 million at 31 December 2009 to $256 million at 5 October 2010.  The level of assessments for peacekeeping increased to $9.5 billion, up from $5.77 billion, while it remained fixed for the Capital Master Plan at $341 million, based on the multi-year payments system.  As at 5 October 2010, unpaid assessments were higher than at the end of 2009 in all categories.


The Secretary-General paid special tribute to the 13 Member States — Australia, Azerbaijan, Canada, Democratic Republic of Congo, Denmark, Germany, Liechtenstein, Monaco, Netherlands, Singapore, Switzerland, South Africa and the United Republic of Tanzania — that had paid in full all assessments that were due and payable as of 11 October.


Introduction


JUN YAMAZAKI, Assistant Secretary-General and Controller, provided the Committee with some additional information since Angela Kane, Under-Secretary-General for Management, made her presentation concerning the Organization’s financial situation to delegates on 12 October.


Mr. Yamazaki said the Secretary-General’s report on “Improving the Financial Situation of the United Nations” (document A/65/519) had been issued on 18 October.  He referred the Committee to paragraph 26 and noted that Monaco had paid its dues in full since the cut off date for the report of 11 October.  Since the report’s issuance on 18 October, Kazakhstan and Sweden had also made payments, meaning those two Member States were added to the list of countries paying in full all their assessments.


Statements


WALEED M. A. AL-SHAHARI (Yemen), speaking on behalf of the Group of 77 developing countries and China, noted that the Organization’s financial situation had been mixed this year, while some positive trends had reduced the level of debt owed to Member States.  The Group was concerned that the outstanding assessment of peacekeeping operations had grown dramatically from about $1.85 billion in December 2009 to $3.2 billion today.  It was unfortunate that the bulk of outstanding payments, for the regular and peacekeeping budgets, as well as for the international tribunals, were owed by a small group of developed countries, one in particular, and surprisingly in the case of the peacekeeping budget, several Member States who were Permanent Members of the Security Council and who had a special responsibility for the maintenance of international peace and security.


The Group had constantly stated that the full, timely and non-conditional payment of assessed contributions by Member States to the various budgets of the Organization was a Charter obligation and it remained the Group’s strong position that all Members States, especially those that had the capacity to settle their arrears, had to honour their financial commitments in a timely fashion, he said.  The Group of rejected all unilateral coercive measures contrary to international law, which obstructed and sometimes impeded payment from members of the Group to the budgets of the Organization.


While the Group was encouraged by the news that the amount owed to troop and police-contributing countries looked set to fall to about $430 million by the end of this year, down from $775 million last year, more had to be done to ensure that Member States were reimbursed in full, on time and as a matter of priority.  That was of particularly concern, since most troop-contributing countries were also developing countries and were not in a position to sustain their troop commitments and maintain their equipment on their own for extended periods of time.  The Group supported efforts to strengthen the ability of the United Nations to fully implement its mandates.  “To this end, we would urge all Member States to meet their financial obligations to the Organization in full, on time and without any precondition,” he said.


JAN DE PRETER (Belgium), speaking on behalf of the European Union, reiterated that “it is the responsibility of each Member State to pay its assessed contributions in full, on time and without conditions.”  He added that the effective and efficient use of resources was more important today than ever before.  “The European Union notes with regret that assessments and payments were both lower in 2010 than in 2009,” he stated.  He noted with concern that the total amount outstanding for peacekeeping operations at 5 October 2010 was $3.2 billion, which was $1.1 billion above the level at 13 October 2009.


The Union reiterated “that the balance of funds in the closed peacekeeping operations account should be returned to Member States”.  He added that the correct and on-time reimbursements to troop and police-contributing countries must be a priority for the Organization, as those countries were “the backbone” of peacekeeping operations.  The Union recognized that the current architecture of peacekeeping finance had shortcomings and was ready for discussions on how to improve it, so as to avoid cash problems for specific missions.  Concluding, he noted that the Union contributed nearly 40 per cent of all assessed contributions and would continue to stress the importance of “the most effective, efficient and transparent use of resources” and a more balanced way of sharing budgetary responsibilities.


OCTAVIO ERRÁZURIZ (Chile), speaking on behalf of the Rio Group, noted the Group’s concern regarding the shortfall of $3.2 billion in the budget for peacekeeping operations, a considerable increase compared to the prior period.  He further noted a total of $787 million outstanding in unpaid assessments.  As those debts could compromise the efficiency and effectiveness of the United Nations and its ability to properly perform its mandates, the Group reiterated its appeal to all Member States to meet their obligations on time and in due form, “especially the Member States responsible for the bulk of the debt — which unfortunately falls on one State year after year”.


With regard to payments for troops and contingent-owned equipment, the Group congratulated the Secretariat on progress made and hoped that efforts would be redoubled to ensure that Member States receive their reimbursements in full and on time.  The Group further congratulated all Members on their efforts to meet their payment obligations, resulting in a decrease in overall debt with the exception of peacekeeping operations.  Finally, the Group reaffirmed the necessity of payments being made on time and in due form, stating “We therefore reject any unilateral measure contrary to international law that obstructs and on occasion prevents payment by members of our Group of their dues to the Organization’s budgets.”


KERRY O’BRIEN (Australia), speaking on behalf of Canada, Australia and New Zealand, noted that the Organization continued to have a relatively solid cash position.  That said, he stated “…liquidity should not be seen as an excuse to relax fiscal discipline or to ignore the need to ensure that available resources are used effectively and efficiently.  Nor should it be seen as an excuse for Member State complacency with regard to their Charter obligations to pay their bills on time”.  He added that he remained concerned about Member State arrears, particularly concerning peacekeeping.


The countries that he spoke for had long been strong supporters of the Organization and had always made every effort to pay their dues in full and on time, he said.  Global challenges required global solutions and it was through the United Nations that those solutions had to be pursued.  “We cannot do this unless the Organization is properly funded,” he stated.


VLADIMIR PROKHOROV ( Russian Federation) welcomed the opening of the internet portal for up to date information on the status of contributions to the Organization.  He noted that the information in document A/65/519 demonstrated that the financial situation of the Organization remained uneven and unstable.  That said, he noted that the volume of unpaid assessment contributions had fallen in all categories, with the exception of peacekeeping.  In that area, he noted a decrease of $250 million in comparison with the previous year in the Organization’s debt to Member States.


“It is a small group of Member States who continue to account for the bulk of unpaid assessments,” he continued.  Member States who take on the financial burden of fulfilling their obligations to the Organization, particularly in view of the financial uncertainty in their own economies, he stated, should demand that the Secretariat assure assessments are paid in full and on time and that realistic needs assessments are executed to carry out mandates.  Furthermore, Member States had to meet their Charter obligations without conditions, so that the Organization could respond to the unpredictable challenges and threats of today.


MASATOSHI SUGIURA (Japan) said Japan’s basic position was that it was the responsibility of every Member State to pay its assessments on time and in full.  The Government of Japan had faithfully fulfilled its obligation, even when its financial situation had been difficult and when overall Government expenditures had to undergo fundamental review.  Japan was pleased to hear that the cash position for all funds was projected to be positive at year’s end.  He noted that outstanding contributions to the regular budget, international tribunals and the Capital Master Plan were lower than last year, while outstanding contributions for peacekeeping had increased, due to the change in the scale of assessments.


These improvements could be attributed to Member States’ increasing efforts to meet their obligations under the Charter and to make payments on time and in full, despite the severe financial circumstances that nearly all countries had faced.  Japan noted that the $82 million outstanding in contributions to the Capital Master Plan remained high.  He strongly hoped that the figure would not be used to justify delays in the implementation of the Capital Master Plan, or requests for additional resources.


MEHBOOB BEG, Member of Parliament of India, aligned his country with the Group of 77 and China and said India had consistently upheld that the full, timely and unconditional payment of assessed contributions was a fundamental duty of every Member State, enshrined in the Charter of the United Nations.  India was sensitive to the situation of Member States that were not in a position to pay their assessed contributions, due to circumstances beyond their control.  India had noted the marginal drop in unpaid assessments as of October 2010 for regular budgets and the tribunals, yet the reality was that unpaid assessments continued to remain at unacceptably high levels.  India was particularly concerned about the ballooning of outstanding assessments for peacekeeping operations to $3.2 billion this year, up from $1.85 billion at the end of last year.


As a major troop-contributing country, which also had significant contingent-owned equipment deployed with Untied Nations peacekeeping operations, India had witnessed the exacerbation of this problem over the years.  While realizing that several variables impacted on the peacekeeping financial situation, the fact remained that 34 per cent of the unpaid assessments were concentrated to just two Member States and another 41 per cent to seven Member States, which included permanent members of the Security Council.


The delay in receipt of contributions from Member States had an adverse impact on the Secretariat’s ability to regularly reimburse payments to troop and equipment contributors to peacekeeping operations.  The situation stemming from delayed payments — and sometimes even non-payments in a few closed missions — for troop costs and contingent-owned equipment reimbursements was untenable in the long run and had to be addressed as a matter of priority.  India was encouraged that the debt owed to Member States in peacekeeping was projected to decline to $430 million at the end of this year, drown from $775 million last year.  Yet, it was still too high, he said.


India was among those who were owed significant sums towards troop and contingent-owned equipment reimbursements.  Yet, India had continued to support the United Nations and was one of the largest troop and equipment contributors.   India’s contribution to United Nations peacekeeping was not a mercantilist venture.  “It was born of our faith and conviction in the principle and purposes of the [United Nations] Charter,” he said.  Yet, India was accountable to its democratic processes at home and to its people and Parliament.  India had to explain to its national legislature why the Untied Nations was remiss in making payments and how long it would continue.


India was concerned about the concentration of outstanding assessments in a few Member States that had become a recurring issue in all budget categories.  Nearly 88 per cent of the unpaid assessments in the regular budget were concentrated in one Member State.  About 68 per cent of the outstanding assessments for the Tribunal were concentrated in one Member State.  India hoped that situation would be addressed urgently.


DANILO ROSALES DÍAZ (Nicaragua) endorsed what had been said by Yemen and Chile on behalf of the Group of 77 and China and the Rio Group, respectively, stating that only by strengthening multilateralism and providing it with the necessary resources could the Organization meet current global challenges.  In that respect, he stated “my delegation never ceases to be surprised by the incongruence of some Member States that on one side accumulate considerable debts in terms of the regular budget and on the other side generously pay out copious voluntary contributions”.  Those voluntary contributions, he said, were often accompanied by a series of conditionalities that distorted legislative mandates.  As was clearly reflected in the Charter of the United Nations, he recalled, all Member States had the shared and legal responsibility to pay all their assessments on time and without conditions.


Despite a slight improvement in contributions to the regular budget, he noted that $787 million had still not been paid, of which 88 per cent corresponded to a main contributor and, therefore, the main debtor to the organization.  In that context, what was even more concerning was that, out of the $3.2 billion owed to the peacekeeping operations budget, a significant percentage was concentrated amongst Member States having permanence in the Security Council, a status that imparted a special responsibility to maintain international peace and security.  “No Member State should point the finger”, he said, at supposed managerial shortcomings, if those States did not meet their obligation to pay and, thereby, ensure the Organization had the necessary resources.


BUI THE GIANG ( Viet Nam) associated his delegation with the statement made by the representative of Yemen on behalf of the Group of 77 and China.  His delegation shared the common mixed feelings about the financial situation of the Organization, as compared with last year.  He was encouraged by the positive projection of year end cash positions for all funds for this year and hoped the projections would prove realistic.  He took note of a $43 million decrease in this year’s unpaid regular budget assessments from last year’s level.  He commended the 119 States that had paid in full and on time dues to the United Nations regular budget.  That was laudable for those developing countries that still suffered heavily from the global economic and financial crisis.  That said, Viet Nam was deeply preoccupied by the lingering destructive consequences of the said crisis, as well as the uneven and slow recovery, which combined were to blame for the unpaid regular budget and international tribunal assessments, in the case of some countries.  That was also responsible for the drop from last year in States that fully paid for Capital Master Plan, peacekeeping and all-category assessments.


He reiterated his consistent view that it was essential for the United Nations to have its budget available, to ensure implementation of all its mandates.  At the same time, understanding, cooperation and financial assistance mechanisms were needed for some Member States, especially those in developing countries and least developed countries that were hit hard by the global financial crisis.  In that connection, Viet Nam believed in the importance of effective use of increasingly scarce resources.  He called on the Secretariat to improve accountability and efficiency, and in conclusion expressed his belief that the United Nations could deliver on its mandates only when it was charged with sufficient finances.


PEDRO NÚÑEZ MOSQUERA (Cuba) said, although it had been explained that the financial situation of the Organization was somehow better than in previous occasions and kept its “mixed” character, the highest debts to the United Nations budget continued to be owed by one Member State.  It was, by the way, the same State that benefited from the major distortion in the methodology of assessments.  He called for a timely and full compliance with financial obligations.  Cuba kept its commitment to multilateralism, meeting its budget obligations despite the financial crisis and 50 years of an unjust blockade by the United States Government.  The unilateral blockade policy against Cuba must cease — it was the main obstacle to sustainable development of the country, and violated international law and the Charter of the United Nations.  The General Assembly had called for it to end 18 times, “but still the voice of the people goes unheard”.


It was also “nothing less than amazing” that 76.4 per cent of the amount to be added to the United Nations’ regular budget was concentrated in requests for Special Political Missions, an imbalance to the detriment of activities for economic and social development.  The major guarantee for peace and security was eradication of poverty and social marginalization, as well as establishment of the right of all nations to development, he said.  He added that Cuba’s delegation was grateful for the Secretariat’s decision to create a working website for all Member States to follow up on the status of their contributions to the Organization’s budget, which would facilitate work if properly applied.


WANG MIN (China) endorsed the statement delivered by the representative of Yemen on behalf of the Group of 77 and China, and wanted to make the following points on the financial situation of the United Nations.  As the most important intergovernmental organization in the world, the United Nations had an irreplaceable role to play in international affairs.  With the evolving international situation, the tasks of the United Nations had increased and there should be a corresponding increase in its resources.  A sound and stable foundation was a basic condition for the Organization to implement its Charter responsibilities.  Member States should honour their due financial obligations to the Organization.  Failing that, the United Nations would not be able to receive the assessed contributions in a timely manner.  Its financial revenue and expenditure would be distorted, and the budget of the United Nations would become “a mere piece of paper”, without any binding power.


According to the briefing of the Secretariat, by 5 October, 119 Member States had paid their assessments to the United Nations regular budget in full; 113 Member States had paid their assessments for the Capital Master Plan; 88 Member States had paid their full share in the assessment for the two international tribunals; and 12 Member States had made full payments for their assessments under the peacekeeping budget.  Compared with last year, there was a decrease in the amount of arrears for all assessments, except for peacekeeping.  By 5 October, the arrears for the regular budget were $787 million.  He took note of the fact that a small number of developed countries were responsible for the bulk of arrears, especially in peacekeeping.  However, many Member States, developing countries in particular, exerted themselves to honour their financial obligations despite constraints.  He said the United Nations should improve the efficiency of resource utilization through management reform.  As a developing country with low per capita income, China was also facing financial difficulties as a result of the global financial crisis.  However, China paid its full contribution to the regular budget, its assessment for the two international tribunals and its assessment for the Capital Master Plan, for a total of $303 million.  It would also strive to pay the balance of its peacekeeping assessment by year’s end.


CLAUDIA CORTI (Argentina) associated her country with the statements made by Chile on behalf of the Rio Group and Yemen on behalf of the Group of 77, and said the financial health of the Organization was necessary so it could carry out all of its mandates.  For that reason, it was necessary for all Member States to meet their obligations without preconditions.  Yet, sometimes circumstances beyond the political will of a Member State, including her country, had prevented it.


The tendencies in contributions in 2010 were mixed, with lower payments to peacekeeping missions, but greater payments to the regular budget and tribunals.  She noted that the Assembly had approved new scales of assessment at the end of December, and they had become effective earlier this year.  She noted that one member country was responsible for 88 per cent of the outstanding debt, and was pleased that there had been an increase in payments to troop-contributing countries.


As a troop-contributing country, Argentina had recognized what Ms. Kane had said regarding the patterns of payments, and hoped that the payments could be continued.  She called on all countries to redouble their efforts to pay their contributions.  Recently, Argentina had made great efforts in that area.  As for the current year, Argentina was current with payments to the Capital Master Plan and the Tribunals.  It still had outstanding payments for peacekeeping, but expected to make that by the end of the year.  Also, she was grateful for the information on the website regarding contributions.  She noted Argentina’s presence in peacekeeping efforts and said it was proof of Argentina’s commitment to the Organization and to multilateralism.


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