UN Chronicle: Issue 4, 2000: Fifth Committee: Revising the Scale of Assessment

After extended and grueling negotiations, in the eleventh hour the Committee was able to formalize a new scale of assessments for the regular budget of the United Nations for 2001-2003. Subsequently, the maximum percentage that any one Member State would be obliged to pay was reduced from 25 to 22 per cent. It would review this in 2003 and, depending on the status of contributions and arrears, may make further changes.

The resolution on the new scale of assessments was one of the most important questions on the Fifth Committee's agenda. The new scale, adopted without a vote, would be based on a State's gross national product (GNP) over statistical base periods of three and six years, with a low per capita income adjustment of 80 per cent. The Assembly also established a minimum assessment of 0.00 1 per cent and a maximum for least developed countries of 0.01 per cent. The maximum assessment rate would be 22 per cent, reducing the assessment of the largest contributor by 3 per cent. Market conversion rates for currency would be used except in exceptional circumstances. Ambassador Paul Heinbecker of Canada, speaking in explanation of vote, said that "while the new scale is not perfect, it is a reasonable compromise that does not unduly distort the methodology."

In 1999, the United States Congress adopted legislation authorizing the payment of $926 million in arrears to international organizations over a three-year period, subject to the fulfillment of specific conditions. The payment for 2000 was conditional, among other things, on action by the Assembly to reduce the regular budget ceiling assessment for Member States, which the United States had been assessed, to 22 per cent, and the country's assessed share of peacekeeping operations to 25 per cent.

Ambassador Richard Holbrooke of the United States said during a debate on the item that his country did not shirk from admitting that its failure to pay dues on time had contributed to the problem of what he termed the Organization's state of "financial straightjacket". However, he also emphasized that the United Nations must leave behind the practice of placing excessive reliance on one Member State. "Capacity to pay was the cornerstone, but it was not sufficient to provide an adequate foundation for the edifice", he said.

In formulating the new scale of assessment, delegates weighed 12 proposals which were based on views expressed in the Committee debate during the fifty-fourth General Assembly. Discussions focused on issues such as the principle of the capacity to pay, adjustments for low per capita income and debt burden. Most speakers agreed that capacity to pay should remain the main principle for the calculation of the scale and should reflect the new economies of the world. Nigeria, speaking on behalf of the "Group of 77" developing countries, and China stressed that consideration be given to those developing countries that had crossed, or were in the process of crossing, the threshold of the low per capita income adjustment, and which might be assigned a disproportionate burden that would affect their capacity to pay.

The Assembly noted that the new method would lead to substantial increases in the assessments of some Members, and decided to apply transitional measures to address those increases. The financial burden resulting from the changes to the scale for 2001 would be borne in part by a voluntary donation from the United States, equivalent to 3 per cent of the total amount assessed on Member States.

Another important development in the Fifth Committee's work this session were the scale of assessments for financing peacekeeping operations and providing resources for the implementation of the first phase of the Brahimi Report's recommendations.

It was decided that the assessment rates for peacekeeping would be based on the scale of assessments for the United Nations regular budget, but a different procedure is required to determine the actual level of assessment. Starting from 1 July 2001, some Member States would receive a discount or premium for peacekeeping assessments compared to the proportion of the regular budget that they are required to pay. The application and level of discounts and premiums would be determined by their categorization into 1 of 10 groups. Least developed countries would be placed in Category J for peace-keeping, and would receive a 90 per cent discount on what the regular assessment formula would otherwise determine should be their level of assessment. States in Category D through I would receive discounts ranging from 20 per cent to 80 per cent. Allocation to those categories would depend on a State's level of per capita income, with the maximum level for each category specified in the draft. Certain listed Member States would be assessed as Category C States, with a discount of 7.5 per cent. All other States with per capita incomes above the upper limit of $9,594 would fall into Category B, whereby no discount would apply. Permanent members of the Security Council would be assessed as Category A States and pay a premium over their regular assessment obligations sufficient to make up for the discounts.

The Assembly also reaffirmed the general principles underlying the financing of United Nations peacekeeping operations, including those of collective responsibility, the greater ability of more developed countries to pay, and the special consideration for Member States which are victims of events or actions leading to peacekeeping operations.

The Assembly also welcomed the commitment of certain States-Bulgaria, the Czech Republic, Estonia, Hungary, Israel, Latvia, Lithuania, Malta, Romania, Slovakia, Slovenia and Turkey-to voluntarily contribute to peacekeeping at a higher rate than required by their per capita income. Other States can make such a commitment by informing the General Assembly through the Secretary-General.

On the implementation of the initial phase of the Brahimi Report, starting in January 2001 the Assembly approved $400,000 in new funds under the regular budget and $9.19 million under the peacekeeping support account for the period 1 July 2000 to 30 June 2001.

The Committee also recommended appropriations for specific peacekeeping missions, including the United Nations Interim Force in Lebanon (UNIFIL); the United Nations Transitional Administration in East Timor (UNTAET); the United Nations Interim Administration in Kosovo (UNMIK); and the United Nations Mission in Ethiopia and Eritrea (UNMEE).

In light of the critical financial situation of the International Research and Training Institute for the Advancement of Women (INSTRAW), the Assembly will advance up to $800,000 to the Institute for the year 2001 on an exceptional and emergency basis. That amount, less voluntary contributions received, would be considered a one-time-only subvention. The Assembly emphasized the need for the Institute, as a voluntarily financed programme of the United Nations, to actively pursue the expansion of its donor base.

After a plea from Benon Sevan, United Nations Security Coordinator, who said the existing safety system was a failure and the Organization's personnel had become "soft targets, free to be mistreated, abused, taken hostage and murdered with impunity, the Assembly appropriated $2.21 million for the Secretary-General to take immediate measures to strengthen the security management system.

Overall, the Fifth Committee's recommendations during the current session on revised estimates submitted by the Secretary-General, as well as on the programme budget implications of resolutions adopted by the Assembly under items considered by other Main Committees or in respect of items considered in plenary meetings, resulted in a net decrease in the approved level of appropriations in the amount of $2,563,800 and a net increase in the approved income estimates in the amount of $19,523,800. In its resolutions 54/250 A and B of 23 December 1999, the General Assembly approved budget appropriations for the biennium 2000-2001 in the amount of $2,535,689,200 and income estimates in the amount of $361,298,900.

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