As Fifth Committee Takes up United Nations Financial Situation, Delegations Stress Importance of Meeting All Budget Obligations in Full, on Time

19 May 2011
GA/AB/3991

As Fifth Committee Takes up United Nations Financial Situation, Delegations Stress Importance of Meeting All Budget Obligations in Full, on Time

19 May 2011
General Assembly
GA/AB/3991
Department of Public Information • News and Media Division • New York

Sixty-fifth General Assembly

Fifth Committee

38th Meeting (AM)

As Fifth Committee Takes up United Nations Financial Situation, Delegations

 

Stress Importance of Meeting All Budget Obligations in Full, on Time

 

While noting the Organization’s improved financial situation at year-end 2010, Member States gathered at the Fifth Committee (Administrative and Budgetary) session today reminded each other of their obligation to pay their assessments in full and on time so as to keep the United Nations running smoothly.

Their debate came a week after the Under-Secretary-General for Management, Angela Kane, gave the Committee her semi-annual snapshot of the Organization’s financial picture.  Ms. Kane appeared briefly at today’s meeting to thank delegates for their support and said their input was valuable.  Assistant-Secretary-General and Controller Jun Yamazaki introduced the Secretary-General’s report on the Organization’s finances and provided an update of Member States that had made payments after the report’s cut-off date.  The report reflected the financial situation for year-end 2010 and up to 10 May 2011 that were included in Ms. Kane’s presentation.

Speaking on behalf of the “Group of 77” developing countries and China, Argentina’s delegate said the Group was concerned that outstanding assessments for peacekeeping operations tallied about $1.72 billion.  It was unfortunate that most of the outstanding payments for all budget items were owed by a small group of developed countries, including some which sat as permanent members of the Security Council.  Noting that the Organization’s debt for reimbursing troop- and police-contributing countries had totalled $728 million as at 30 April 2011, he urged the Secretariat to work harder to ensure Member States were fully reimbursed on time.

The budgeting techniques used to keep some cash-strapped peacekeeping operations afloat also drew complaints from some delegates today.  Speaking on behalf of the Association of Southeast Asian Nations (ASEAN), the representative of the Philippines said it was unfortunate that certain peacekeeping missions were experiencing cash-flow shortages that meant the Secretariat had to borrow from the accounts of closed missions.  The European Union’s delegate said it was unacceptable that active peacekeeping operations were sometime financed with funds from the accounts of closed peacekeeping operations.  Those funds should be surrendered and returned to Member States, he added.

Japan’s delegate urged every Member State to fulfil it financial obligations as mandated by the United Nations Charter.  Despite the unprecedented situation resulting from the earthquake that had struck the country in March, Japan remained determined to play an active role in international peace and security.  It would pay its assessed contributions of $466 million by 2 June, in addition to a $728 million payment made earlier in the year.

In a related issue that impacted several Member States’ ability to pay their assessments on time, several delegates criticized measures taken by the host country that complicated their country’s payment methods and disrupted their day-to-day operations.

Iran’s delegate said the increasing restraints imposed unilaterally against his country, and particularly a recent action within the New York banking system, had led to the forced closure of the Permanent Mission’s account and subsequent difficulties in opening another account.  As a result, Iran could not pay its assessment through the Permanent Mission’s account and had ended up on the list of Member States with unpaid assessments.

Representatives of Chile (behalf of Rio Group), Côte d’Ivoire (behalf of African Group), Australia (also on behalf of Canada and New Zealand), Cuba, Singapore, Republic of Korea and Russian Federation also spoke.

The Fifth Committee will reconvene at 10 a.m. Monday, 23 May, to discuss administrative and budgetary aspects of financing peacekeeping operations, including contingent-owned equipment, and the special political missions aspect of the programme budget for the biennium 2010-2011.

Background

The Fifth Committee (Administrative and Budgetary) had before it a report of the Secretary-General on improving the financial situation of the United Nations (document A/65/519/Add.1) that provides a review of the Organization’s financial situation as at 31 December 2010 and updated projections based on information as at 10 May 2011.

The report considers four financial indicators: assessments issued on Member States, unpaid assessed contributions, available cash resources, and the Organization’s debt to Member States.  At 31 December 2010, assessments issued during 2010 were lower than 31 December 2009 for the regular budget and the international tribunals, but higher for peacekeeping operations, while the Capital Master Plan remained the same.  Unpaid assessments as at 31 December 2010 were higher than 31 December 2009 for the regular budget and peacekeeping operations, but lower for the international tribunals, while the Capital Master Plan remained the same.  Overall, although assessments during 2010 were higher by $3.5 billion, unpaid assessments rose by only $0.6 billion.

According to the report, cash balances at the end of 2010 were lower than at the end of 2009 for the regular budget, the international tribunals and the Capital Master Plan.  But these were more than offset by the increase in the cash balance for peacekeeping operations, resulting in a net increase of $772 million at the end of 2010.  Amounts owed to troop and equipment providers had decreased at the end of 2010 to $539 million, from $787 million at the end of 2009, reflecting more payments during 2010.

The 31 December 2010 situation showed improvement compared with the situation at year-end 2009, the report states.  Some indicators reflect continued progress during early 2011.  Although unpaid assessments increased slightly for all categories at 10 May 2011, compared with 10 May 2010, assessments issued increased by $3.5 billion in 2010, and the amount outstanding had risen by only $938 million as at 10 May 2011.  Cash balances are projected to be positive at the end of 2011, although a few peacekeeping missions continue to be affected by cash shortages.  Unpaid assessed contributions continue to be heavily concentrated among a few Member States, despite the overall improvement.  The final outcome for 2011 will depend in large measure on the payments that they make during the remainder of 2011.

Introduction

JUN YAMAZAKI, Assistant-Secretary-General and Controller, provided some updated information regarding the report of the Secretary-General on improving the financial situation of the United Nations (document A/65/519/Add.1) that was issued 17 May.  That report includes the information in the statement delivered by Angela Kane, Under-Secretary-General for Management, on the Organization’s current financial situation at the Committee’s 12 May meeting.  (See Press Release GA/AB/3989)

Mr. Yamazaki said that subsequent to the cut-off date, China, Cuba, Panama, Samoa, Syria and the United Kingdom had fully paid their assessed contributions with respect to the tribunals.  Mongolia and Pakistan had fully paid their assessments in connection with the regular budget, Belgium with respect to the tribunals and the Capital Master Plan, Saint Kitts and Nevis with respect to the Capital Master Plan, and Myanmar with respect to the regular budget, Capital Master Plan and the tribunals.

Statements

SEBASTIÁN DI LUCA (Argentina), speaking on behalf the “Group of 77” developing countries and China, noted the improved financial situation of the United Nations at the end of 2010, but was concerned by the outstanding assessments for peacekeeping operations of $1.72 billion.  While sympathizing with the Member States facing the negative impact of the global financial crisis and natural and human disasters, he said it was unfortunate that most of the outstanding payments for all budget items were owed by a small group of developed countries, and surprisingly, in the case of the peacekeeping budget, by some Member States who were permanent members of the Security Council that had a special responsibility for the maintenance of international peace and security.

He said the Group of 77 had constantly stated that the full, timely and non-conditional payment of assessed contributions by Member States to the various budgets of the United Nations was a Charter obligation.  It believed that Member States, especially those with the capacity to settle their arrears, should honour their financial commitments in a timely fashion.

For that reason, the Group also rejected all unilateral coercive measures contrary to international law, which obstructed and sometimes impeded payments from Member States of the Group to the budgets of the Organization.  The Group was especially concerned with a new alarming phenomenon that had led to the closure of the accounts of many Member States, which had caused them extreme difficulties with daily activities and led to late payments in their contributions.  He said the host Government was responsible for providing the proper environment for Member States to carry out their United Nations-related functions.

The Group also noted that the debt to troop- and police-contributing countries had been $728 million as at 30 April 2011.  It believed more should be done to ensure that Member States were fully reimbursed in full and on time, he said.

ANDRAS KOS, Delegation of the European Union to the United Nations, said each Member State must pay its assessed contributions in full, on time and without conditions.  Effective, efficient use of resources was more important than ever in the context of the world financial crisis.  He noted with satisfaction that the overall United Nations financial situation had improved compared to the last reporting period and that 138 Member States had fully paid their regular budget assessments.  The unpaid assessments of more than $1.7 billion as at 10 May 2011 was of great concern.  He called on Member States to pay their contributions in order to enable the United Nations to perform its challenging tasks and to fully implement its peacekeeping operation mandates.

The balance of funds in closed peacekeeping operations accounts must soon be surrendered and returned to Member States, he said.  It was unacceptable that active peacekeeping operations were financed to some extent from closed peacekeeping operation accounts.  He expressed concern over the $133 million in unpaid assessments, which could hamper the completion strategies of both of the international tribunals.  To ensure timely completion of the Capital Master Plan, all Member States should pay their contributions expeditiously.   A fair and more balanced way to share budgetary responsibilities was essential to the Organization’s effective functioning.  The United Nations current financial architecture might jeopardize the Organization’s sustainability.  The status quo was not an option.

MANAHI PAKARATI (Chile), speaking on behalf of the Rio Group, said payment arrears were due solely to domestic budgetary difficulties and to the urgency of social demands requiring priority attention, such as poverty relief and humanitarian emergencies.  In other cases, Rio Group members had fulfilled their respective obligations in a timely manner, although not without sacrifices.  She was concerned over the $1.31 billion deficit in the regular budget and the $1.72 billion deficit in the budget for peacekeeping operations.  The Organization’s indebtedness undermined its efficiency and effectiveness.  She urged all Member States to pay their assessments on time, in full and without conditions, especially Member States that repeatedly bore the responsibility for the bulk of the debt.  It might be necessary to take into account the fact that, in the past year, several countries had been affected by major natural disasters, and to be supportive and considerate in future analyses of that topic.  She expressed concern that the debt for reimbursing troops, formed police units and contingent-owned equipment still amounted to $728 million as at 30 April 2011.  She hoped that the Secretariat would redouble its efforts to ensure that Member States were fully reimbursed on time.

She hoped to see a positive balance by the end of 2011 in the international tribunals.  Also, she was extremely concerned that five Member States had made no payments for the Capital Master Plan.  She encouraged Member States to continue to support the Plan, noting that several Rio Group members had paid in full so that the project could be completed on schedule.  She rejected any unilateral measure contrary to international law that complicated, and sometimes prevented, payments by Rio Group members of their assessments to the Organization’s budget.  She expressed concern over the closure of bank accounts of some members, for reasons difficult to understand.  She stressed that that type of action did not facilitate payment of assessments, it complicated it.  Recalling the special responsibilities of the host State to ensure that all Member States could perform their diplomatic functions, she appealed for an expeditious solution to the problem.

LIBRAN N. CABACTULAN (Philippines), speaking on behalf of the Association of Southeast Asian Nations (ASEAN), aligned his statement with the Group of 77 and said he was encouraged that the financial situation had improved at the end of 2010 compared to the previous year.  He was also pleased that payments for troop and formed-police unit costs were current up to February 2011 for all 11 missions and that payments for contingent-owned equipment was current up to December 2011 for all missions.  Yet, it was unfortunate that certain peacekeeping missions were experiencing cash shortages that required cross-borrowing from the accounts of closed missions.  ASEAN hoped that problem could be resolved in a satisfactory manner.

He said ASEAN was proud that, though its collective contribution to the United Nations budget was modest at about $25 million annually, it helped fund the Organization’s daily operations and activities.  ASEAN Member States tried to fulfil their financial obligations, even with the economic difficulties that they faced.  Its position remained consistent that the solution to the problem was not necessarily the lack of money, but the lack of political will.  He appealed to all Member States to act urgently to meet their financial obligations.  The success or failure of the United Nations was in the hands of the Member States.

ASEAN urged the Secretariat to keep looking for innovative and cost-effective ways to use the scarce resources available and work towards greater accountability and more effective delivery of services and results, he added.

BROUZ RALPH COFFI (C ôte d’Ivoire), speaking on behalf of the African Group, expressed concern that, with only six weeks remaining in the fiscal year for the peacekeeping operations budget, a substantial amount of contributions had yet to be received.  That impacted implementation of mission mandates, including reimbursement to troop-contributing countries, which faced multiple challenges in the field.  He commended all Member States that had honoured their financial obligations and encouraged those with outstanding contributions to pay them fully, on time and without conditions.  He appreciated the Secretariat’s efforts to simplify the availability of information related to Member States’ contributions, especially through the “status of contribution portal”.

He remained concerned, however, about new challenges emerging recently that affected African Group members, particularly their ability to access financial services in the host country.  He expressed frustration over the closure of bank accounts of many of the African Group’s members, which affected the day-to-day operation of missions and their ability to fulfil their responsibilities to the Organization.  He urged the host Government to find a quick solution to that problem as a matter of priority.

VALERIIA MINIGOULOVA (Australia), speaking also on behalf of Canada and New Zealand, noted that the United Nations continued to benefit from a relatively strong cash position and that there had been a welcome reduction in the requirements for cross-borrowing from closed peacekeeping mission accounts.  That trend offered Member States the opportunity to reach agreement on the contentious issue of closed peacekeeping missions.

She was concerned about the perennial trend of Member States arrears.  Less than half of the membership was now up to date with its regular budget and Capital Master Plan dues, only 30 per cent were on time with contributions to the international tribunals and only 16 per cent had made timely payments to peacekeeping mission budgets.  Even with the current economic and financial situation, Member States had a responsibility to support the mandates by paying their assessments in full and on time, she said.

JORGE CUMBERBATCH MIGUEN (Cuba) said that, despite claims that the Organization’s financial situation had improved somewhat, it was significant that the highest debts to the United Nations budget were concentrated in one Member State, which also benefited from the main distortions in the methodology for calculating the scale of assessments.  He reiterated the call to fulfil financial commitments on time, in full and without conditions.  It would be necessary to eventually take into account the fact that various countries had been affected by large-scale natural disasters and to show solidarity and sensitivity in future analysis on that topic.  Cuba remained firmly committed to multilateralism, including by complying with its financial obligations.

Cuba’s inability to use the United States dollar in international transactions, due to the United States criminal blockade, had negatively affected its capacity to pay, he said.  It was important to take into account Cuba’s difficulties in contributing to the United Nations as its transactions must be paid through a third country.  He pointed to several examples of frozen Cuban bank transfers to international agencies, even in euros.  The Secretary-General’s next report on that matter would expand on those measures.  The blockade policy against Cuba must stop.  He reiterated serious concern over the negative impact of the proposed 3 per cent cut in the regular budget on implementing development mandates.  The Organization’s development pillar must be strengthened in order to maintain global peace and security.

RASHID BAYAT MOKHTARI (Iran), aligning itself with the statement of the Group of 77, said his country was a founding member of many international organizations and had always respected its memberships by paying its dues in full.  In recent years, Iran had faced unprecedented difficulties in honouring its long tradition of being an on-time payer of its assessed contributions.

Today’s report by the Secretary-General listed Iran’s among the top unpaid assessments to the regular budget.  That unfortunate listing occurred in contrast with Iran’s firm commitment to fulfil its obligations with on-time payment of its contributions.  That was not the result of Iran’s shortcomings or a lack of resources.  The amount was ready to be deposited in the United Nations account. The problem was with the increasing restraints imposed unilaterally against Iran and particularly a recent action within the New York banking system, which had led to the forced closure of the Permanent Mission’s account and subsequent difficulties in opening another account.  Consequently, Iran could not follow its usual procedure and deposit its contribution through the Permanent Mission’s account, he said.

Iran was exploring other options and would find a way to honour its dues to the United Nations budget, he said.  A host country had the responsibility to create an environment so Permanent Missions could function smoothly.

CRAIG LIM (Singapore) lauded the fact that at the end of 2010, the United Nations financial situation had improved and that more Member States had paid in full.  He was sympathetic to countries, particularly developing nations, which continued to face difficulties owing to global financial pressures, and nations that had experienced natural catastrophes.  But Member States, especially major contributors, must do much more to ensure they honoured their financial obligations to the Organization without preconditions and in a predictable, timely way.  He was disappointed that unpaid assessments continued to plague the Organization, despite each Member State being fully aware of their commitments.  He hoped Member States would redouble their efforts to fully pay.  The Secretariat could do more to ensure that resources were used effectively and efficiently, he said, calling for greater accountability.

SHIGEKI SUMI (Japan) said it was the responsibility of every Member State to pay its assessments in full and in a timely manner, pursuant to the Charter, and Japan had faithfully fulfilled its obligations.  He thanked the international community for its support since the great earthquake, which had caused untold damages.  Yet, despite that unprecedented situation, Japan’s determination to play an active role in international peace and prosperity remained unchanged and it would faithfully implement its international commitments.  Japan would pay its assessed contributions of $466 million by 2 June, in addition to its payment of $728 million earlier in the year.

Japan reiterated its request to the Secretariat to use the resources contributed by Member States efficiently and effectively when implementing the mandates given by legislative bodies of the Organization.  Japan also asked the Secretariat to seek additional efficiencies, taking into account the domestic efforts of each Member State, he said.  Japan stressed that the General Assembly should scrutinize the Secretary-General’s proposals with a view to setting a realistic level of resources to implement given mandates.

ANGEL KANE, United Nations Under-Secretary-General for Management, appeared briefly before the Committee and said she believed the debate was a very important.  She apologized for not being able to attend the meeting and wanted the speakers to know that their statements would be read very attentively.  Their views were very important and would be taken into account.  She appreciated the feedback of the delegates and thanked them for their support.

PARK CHULL-JOO (Republic of Korea) said his Government had been striving to pay its assessed contributions on time, in full and without conditions, despite fiscal constraints caused by global economic difficulties.  The $7.6 billion peacekeeping budget for the 2011/12 period was a large burden for all Member States.  He stressed the urgency of increasing efficiency gains, improving management and preventing the recurring tendency of underexpenditure in the peacekeeping budget.  The Republic of Korea would pay close attention to the 2011/12 budget proposals, in that respect.  His Government would do its best to ensure payment of outstanding assessed contributions as soon as possible and secure more resources to pay its contributions on time.

ALEXANDER PANKIN (Russian Federation) lauded the fact that, despite the complex financial and economic situation of Member States, there was an increase from last year in the number of countries meeting their obligations fully, to date.  He called on others to follow suit.  He noted that the major share of unpaid obligations still belonged to a small group of Member States.  That debt could negatively impact the Organization’s ability to effectively carry out its work and lower its expected accomplishments.  Now was not the time for complacency.  There was a substantial volume of un-liquidated debt of Member States.  In addition, the fact that several active peacekeeping operations had a cash-flow shortage and had to cross-borrow from closed peacekeeping operations was a clear indication that the Organization’s financial situation was far from ideal.  Member States must discharge their Charter obligations.  He expected they would do their utmost to liquidate outstanding debt and enable the Organization to react to emerging challenges.  As Member States were assuming a financial burden during an unstable financial climate, the Secretariat must maximize its efforts to rationalize resources.  He welcomed the opening of the status of contribution portal. 

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For information media • not an official record
For information media. Not an official record.