Delegates Note United Nations Overall Financial Health, Express Concern over Expected Shortfall by December If Countries in Arrears Fail to Pay Up

17 October 2013
GA/AB/4076

Delegates Note United Nations Overall Financial Health, Express Concern over Expected Shortfall by December If Countries in Arrears Fail to Pay Up

17 October 2013
General Assembly
GA/AB/4076
Department of Public Information • News and Media Division • New York

Sixty-eighth General Assembly

Fifth Committee

7th Meeting (AM)

Delegates Note United Nations Overall Financial Health, Express Concern over

Expected Shortfall by December If Countries in Arrears Fail to Pay Up

 

Approving Text on Programme Planning, Budget Committee Also Considers

Reports on Conditions of Service, Remuneration for Non-Secretariat Officials

While acknowledging the overall financial health of the United Nations, delegates in the Fifth Committee (Administrative and Budgetary) voiced their worries today about the unpaid assessments that produce a cash flow shortage in the Organization’s regular budget each December.

Under-Secretary-General for Management Yukio Takasu gave a brief update on the world body’s financial picture after delivering the full set of numbers — on the regular budget, peacekeeping operations, tribunals and the Capital Master Plan — at last week’s Committee meeting.  The Organization’s regular budget would face a shortfall by early December if more Member States did not make their unpaid assessments.  With the addition of Belarus, 135 Member States had now paid their regular budget assessment in full while 35 Member States had fully made their contributions in all four categories.

Even with funds shifted from the working capital budget and special accounts budget, the Organization’s regular budget would now be under pressure with only $371 million for the rest of the year.

Like many other delegates, Fiji’s representative, speaking on behalf of the “Group of 77” developing countries and China, urged all Member States, especially those with the funding capacity, to respect their financial commitments to the United Nations.  Pakistan’s delegate zeroed in on the Organization’s debt to Member States that contributed troops, police and equipment, which stood at $862 million as of 1 October 2013.  This situation created more challenges for the Organization’s peacekeeping structure, he said.  In remarks aimed at soothing delegates’ concerns about this debt, Mr. Takasu said today that since his 9 October presentation, the Organization had made payments of $159 million to Member States for troops and $169 million for contingent-owned equipment.

Delegates also urged the Secretariat to walk a fiscally disciplined line as Member States wrestled with their own financial challenges back home in their capitals.  Canada’s delegate asked the Secretariat to carefully manage its resources and programmes while boosting its oversight functions to ensure the various management reform initiatives turned out results.  As the Committee engaged in negotiations to settle on a 2014-2015 budget by the end of December, the European Union’s delegate repeated its call for a more balanced sharing of budget responsibilities.

In other business at this morning’s meeting, the Committee approved by consensus a draft resolution reaffirming the crucial roles the Committee for Programme Coordination and Member States played in setting the Organization’s budget priorities.

The Committee also discussed the conditions of service for judges and members of the International Civil Service Commission and the Advisory Committee on Administrative and Budgetary Questions (ACABQ) for the upcoming 2014-2015 budget cycle.  Ruth de Miranda, Chief of the Human Resources Policy Service in the Office of Human Resources Management, introduced two Secretariat reports that detailed the remuneration schemes and service conditions for these groups of employees.  No changes were proposed in either the current remunerations schemes or the conditions of service.  Carlos Ruiz Massieu, Chairman of the ACABAQ, then introduced the Advisory Committee’s report on the issue.

Also speaking on the Organization’s financial situation were delegates from Cuba, (on behalf of the Community of Latin American and Caribbean States), Malaysia, Singapore, Japan, Turkey, Cote d’Ivoire, Syria and Senegal.

The Committee will reconvene on at 3 p.m. on Friday, 18 October, to discuss the administration of justice.

Background

The Fifth Committee (Administrative and Budgetary) met this morning to take action on a draft resolution titled programme planning (document A/C.5/68/L.3) and to discuss the Secretary-General’s report on improving the financial situation of the United Nations (document A/68/524).

Under the proposed programme budget for the biennium 2014-2015, the Committee considered the Secretary-General’s report on conditions of service and compensation for officials other than Secretariat officials:  members of the International Court of Justice and the International Residual Mechanism for Criminal Tribunals, judges and ad litem judges of the International Tribunal for the Former Yugoslavia and the International Criminal Tribunal for Rwanda (document A/68/188); the eponymous report of the Advisory Committee on Administrative and Budgetary Questions (ACABQ) (document A/68/515); and the Secretary-General’s report on conditions of service and compensation for officials, other than Secretariat officials, serving the General Assembly:  full-time members of the International Civil Service Commission and the Chair of the Advisory Committee on Administrative and Budgetary Questions (document A/68/187).

Programme Planning

The Committee opened the meeting by approving by consensus the draft resolution on programme planning (document A/C.5/68.L.3).

The resolution would have the General Assembly endorse the Committee for Programme and Coordination’s conclusions and recommendations on evaluation, the annual overview report of the United Nations System Chief Executives Board for Coordination (CEB) for 2012 and United Nations system support for the New Partnership for Africa’s Development (NEPAD), and the reports of the Joint Inspection Unit.

By approving this text, the Committee also would have the Assembly stress the importance of Member States’ full participation in the budget preparation process from start to finish and stress that setting the Organization’s priorities is the prerogative of the Member States.  It also reaffirmed the role of the Committee for Programme and Coordination as the main subsidiary organ for planning, programming and coordination of the Assembly and the Economic and Social Council.

Speaking after action, Cuba’s delegate said her delegation would not insist on the amendments outlined in its general statement, so as to allow for the resolution’s adoption.  Cuba intended to submit those amendments into the discussion around the 2014-2015 budget.

The representative of the European Union delegation said the programme planning process was one which her delegation had long felt could be improved.  There was a need to improve the programme plan to better indicate the expected impact of activities, reflect the actual outcomes to be delivered, and provide better information on the results to be achieved.  She was encouraged during the informal meeting on the item to hear from the Office of Programme Planning, Budget and Accounts that such improvements were continually being sought.  She trusted they would be clearly reflected in the draft strategic framework for 2016-2017, which she understood the Secretariat would soon prepare.

Improving the Financial Situation of the United Nations

YUKIO TAKASU, Under-Secretary-General for Management, updated the Committee on the current financial situation of the Organization.  For the regular budget, Belarus had now paid in full and brought the total number of Member States in this category to 135For the tribunals, Qatar had paid in full, bringing the total in this category to 97 Member States, and for peacekeeping operations, both Georgia and Mexico had paid all assessments currently due for a total of 35 Member States.  The report (document A/68/524) before the Committee highlighted in paragraph 22 that the payment from Georgia meant this country was now part of the 35 Member States that had paid in full for all categories.  Mexico also entered this category when it made its payment after the preparation of the report.  He thanked these Member States for this positive action.

Regarding the regular budget cash position, he said that as of yesterday, there was a shortfall of $38 million that was covered by the Working Capital Fund.  The Secretariat would continue to closely monitor the regular budget situation.

LUKE DAUNIVALU (Fiji), speaking on behalf of the Group of 77 developing countries and China, said he would have preferred to receive the update in a timely manner.  The Group had taken note that the level of unpaid assessed contributions on the regular budget, as of 1 October 2013, was $90 million higher than the level of outstanding contributions on 5 October 2012.  He was pleased to note that contributions for the Capital Master Plan budget were almost complete, and that, as of the beginning of this month, a total of $1.6 million was outstanding out of a total $1.9 billion already assessed.  While encouraged by the cash position projected for peacekeeping operations, tribunals and the Capital Master Plan, he voiced concern that the regular budget’s position was “difficult”, with projected expenditures exceeding current reserves.

On outstanding payments to States that provided uniformed personnel and equipment to peacekeeping, he noted that $423 million was projected at year end, voicing concern at the negative effects attached to a delay in reimbursement to troop- and police-contributing countries, as well as at the negative effect that brought to the maintenance of equipment.  He urged more dedicated efforts to ensure that States were fully reimbursed on time and as a matter of priority, taking into account the challenges they faced in sustaining peacekeeping commitments.

With that, he urged all Member States to respect their commitments, especially those with the capacity to settle their arrears, to accomplish financial obligations in a timely manner.  All States must live up to their financial obligations to enhance United Nations efficiency in the implementation of agreed mandates.  In that context, he strongly rejected all unilateral coercive measures which obstructed payments of Group members to the different budgets of the Organization.  He urged all States in arrears to fully meet their obligations, on time, without conditions.

DAYLENIS MORENO GUERRA (Cuba),speaking on behalf of the Community of Latin American and Caribbean States (CELAC), said the cash restraints of the regular budget at year end was a concern.  Thirty-three Member States had met their obligations in full this year, two more that in 2012.  CELAC reiterated its appeal that all Member States meet their obligations on time, in due form and without conditions, especially those Member States responsible for most of the debt, which unfortunately was borne mainly by one State each year.

“Our community emphasized that the payment of debts is a reflection of the political will of the countries to strengthen the United Nations,” she said.  “We are convinced that arrears owed to the Organization affect the financial stability of the United Nations in implementing the mandates established by the membership.”  CELAC explicitly recognized the efforts of developing countries to meet their financial obligations despite their economic problems.  Regarding reimbursements for troops, formed police units and contingent-owned equipment, CELAC reiterated that such reimbursements largely depended on Member States fulfilling their assumed financial commitments on time and in due form.  While recognizing the value of efficiency, CELAC stressed that any cuts had to be preceded by a case-by-case analysis that prevented any negative implication on mandate delivery.

CARMEL POWER, a representative of the European Union delegation, said she was concerned at the significant level of outstanding assessments.  There was still a need to reduce spending while maintaining delivery.  The regular budget cash position, while healthier than a year ago, would be tight in the final months of 2013 if contributions were not received in a timely manner.  As such, she encouraged States to fully pay their assessed contributions as soon as possible.

She went on to stress that it was “simply unacceptable” that the Secretariat continued to plan and spend in 2013 as if the Assembly had already agreed to a regular budget, with full provisions for re-costing.  It was imperative to take steps at all levels to ensure that the Organization lived within agreed budget levels.  The United Nations also must improve its working practices in order to manage its resources as efficiently as possible.  The European Union, which contributed 35 per cent of the regular budget and 37 per cent of peacekeeping budgets, reiterated the importance of a more balanced sharing of budgetary responsibilities.

ELEANOR BELSHAW-HAUFF (Canada), also speaking on behalf of Australia and New Zealand, noted the positive changes in the Organization’s financial situation with 33 Member States current in all their obligations to the Organization as of 9 October, compared with 31 Member States at the same time last year.  But she was concerned that the total of all unpaid assessed contributions was $90 million higher as of 1 October, compared to a year ago.  Regarding peacekeeping operations, she said it was very important that as their number increased and their complexity expanded, the Organization needed to search for structural improvements in the way the operations were planned, implemented and maintained, while ensuring their mandates were effectively delivered.  In this context, she supported the adoption of the recommendations of the report of the Senior Advisory Group on rates of reimbursement to troop-contributing countries and other related issues.  This would be a step to enhance the efficiency, effectiveness and accountability in the conduct of peacekeeping operations.

She urged all Members States to fulfil their Charter obligations and pay assessed contributions in full, on time and without condition.  She encouraged eligible Member States to submit multi-year payment plans as a possible mechanism for addressing their arrears.  Finally, in the face of fiscal constraints faced by Member States at home, she urged the Secretariat to ensure its resources were well managed and programmes were run more efficiently and delivered more effectively.  She supported Secretariat efforts to improve fiscal discipline, enhance oversight and ensure accountability for results, particularly as the 2014-2015 budget talks began.  She supported management reform initiatives, such as the enterprise resource planning project known as Umoja and the International Public Sector Accounting Standards.

RAJA REZA BIN RAJA ZAIB SHAH ( Malaysia) voiced concern that the Under-Secretary-General’s report showed a lower payment of contribution, as at 1 October, stressing that the unpaid assessed contribution of $945 million could jeopardize the ability of the United Nations to smoothly implement its global mandate.  More startling was that the available cash flow would not cover disbursement to the end of 2013.  Malaysia’s contribution had increased from 0.19 per cent in 2009 to 0.28 per cent in 2013.  It would continue to consistently pay its contribution, calling on all others to also fulfil their financial obligations.

As for peacekeeping operations, he was concerned at the $3.4 billion States owed as of 1 October, stressing that the maintenance of international peace and security was a collective responsibility.  The lack of financial support for those operations also affected global peace and security.  With more than 20,000 Malaysian troops who had served in various United Nations missions, Malaysia would continue to finance such operations, calling on States to do the same.  The Organization’s financial health depended heavily on States’ ability to meet their financial obligations, he said, reiterating that deliberations should be conducted in good faith, in an open, inclusive and transparent manner.

PETER LEE ( Singapore), associating himself with the Group of 77 and China, expressed hope that more Member States would be able to pay their assessed contributions on time.  Some Member States, particularly those in the developing world, faced genuine constraints.  However, they accounted for a very small proportion of the assessments.  It was the delay by several major contributors that had an unnecessary negative impact on the operations of the United Nations.  Turning to the status of unpaid peacekeeping assessments, permanent members of the Security Council, which had special responsibilities for the maintenance of peace and security and prerogatives such as the right of veto, were regrettably also the ones who owed the most.  At the same time, the Secretariat must take proactive and appropriate steps to reduce outstanding payments to Member States for peacekeeping missions.  Acknowledging that the Secretariat was striving to improve its management and operational efficiencies, he said there was certainly room for further improvement.  As the world became more globalized and increasingly volatile, Member States and the Secretariat must work together for the good of the international community.

MASOOD KHAN ( Pakistan), said problems concerning the payment of assessed contributions had not been resolved.  While the indicators for 2013 were generally positive, significant assessments had not been paid, which had given rise to a $3.4 billion gap.  As for the regular budget, unpaid assessed contributions amounted to $945 million, reflecting a $90 million increase over last year.  The financial situation of international tribunals had also consistently suffered from higher unpaid assessments, while re-costing had only increased the challenges for the United Nations’ financial health.  He hoped the Committee could address the negative impacts of partial re-costing during its consideration of the biennium budget.

He said he was especially concerned at the debt owed to States contributing troops, police and equipment, which had grown to $862 million as at 1 October.  That situation only exacerbated challenges for the peacekeeping architecture.  States with the capacity to pay should be able to settle their unpaid dues on time, a systemic problem that must be resolved in a sustained manner.  He hoped the negative impacts of non-payment of assessments would be taken seriously by those with the capacity to pay.  The debt owed to troop- and police-contributors should be reimbursed on time as a matter of priority.  The question of resources could not be sidelined under the pretext of financial constraints.

ERIKO UEMURA ( Japan) said it was the responsibility of every Member State to pay its assessment in full and in a timely manner.  Japan had faithfully fulfilled its obligation in spite of the great financial burdens it faced.  Japan’s determination to play an active role in maintaining international peace and prosperity remained unchanged and it would faithfully implement its international commitments.  Turning to the overview report, she said the Secretariat should utilize resources from Member States even more efficiently and effectively when it implemented mandates from the Organization’s legislative bodies.  The Assembly should scrutinize all potential additional requirements to the current and proposed budgets with a view to setting realistic levels of resources necessary to implement given mandates.

Ms. MORENO GUERRA (Cuba), speaking in her national capacity, and endorsing the statements by the Group of 77 and China and by CELAC, noted the Organization had seen positive signs in its budget, particularly projections for the peacekeeping budget, the courts and tribunals, and the Capital Master Plan.  But that was not the situation for the regular budget.  Cuba was concerned with its low cash value for this year, which meant the Organization would have to make greater efforts to achieve efficiencies.  Cuba repeated its appeal to the Secretariat to minimize the pressure.  It was timely to recall the need for effective development.  All Member States had to pay their obligations on time, in full and without conditions, as spelled out in Assembly resolutions.  The payment of assessments on time was necessary to pay off the debt owed to Member States.  Most Member States had made their payments to the regular budget in full.  Developing countries worked to make these payments despite the many obstacles they faced during the financial crisis.  Cuba would faithfully make its payments.  The hostile commercial blockade had impacted the Cuban people and hampered Cuba’s payments to the United Nations as it could not make direct payments and had to use a third party.  Cuba could not use United States dollars, which had a negative effect on its capacity to pay.  Cuba would not stop calling for an end to the blockade, which violated the United Nations Charter.

ÖZGÜR PEHLIVAN ( Turkey) said he was pleased that financial indicators were generally positive and that an increasing number of States had fully met their general budget obligations.  But he regretted that the unpaid amount was highly concentrated among a few States.  Full and timely payment of assessed contributions was critical for United Nations effective functioning.  Further, the unpaid assessment ratio for the general budget had increased over the previous year, whereas the other three categories of assessed contributions had slightly improved.  On the Capital Master Plan, he was pleased that almost all assessments had been paid by States, but he had serious concerns about cost overruns, which could call for more assessment contribution.  The Secretariat should take every possible action to save costs.  He supported all Secretariat efforts to reduce outstanding payments to States contributing troops, police and equipment to peacekeeping operations.  The driving factor for further improvement was States’ performance on meeting their assessments for peacekeeping operations in full and on time.

YOUSSOUFOU BAMBA ( C ôte d’Ivoire) said the Committee should benefit from all State efforts to provide the Secretariat with full, on-time assessed contributions.  Despite numerous challenges, especially for national reconciliation and good governance, his country was proud that it had paid in full and on time each year its contributions to all United Nations budgets.  He was pleased that an increasing number of African States were also up-to-date on their contributions.  As Chair of the Economic Community of West African States (ECOWAS), Côte d’Ivoire called on States to follow the example of ECOWAS members and pay their contributions.  As a troop-contributing country, Côte d’Ivoire shared the concerns of those States awaiting reimbursement for troops and equipment for more than a year, or even six months.  Priority should be given to that situation.  States expected the Secretariat to efficiently use resources to implement mandates, especially those aimed at human security.

ISMAIL BASSEL AYZOUKI ( Syria) supported the statement by the Group of 77 and China and noted that Syria was a founding member of the United Nations.  Syria was committed to the principles of the Charter, which required all Members to pay on time, in full and without conditions.  Syria had always honoured its financial obligations and had paid on time in spite of the challenges it faced as a developing country.  The country’s payments included payments to the regular budget, the two tribunals and a major portion toward peacekeeping operations.  Now it was negotiating a way to find machinery that would let it pay its obligations since it did not have a bank account in the United States and could not make any financial payments.  This was because of the unjust economic trade sanctions applied unfairly to the country.  These illegal, unilateral sanctions impacted the Syrian people and their ability to meet their basic needs.  These sanctions targeted banks.  They violated United Nation norms and principles.

The sanctions of these countries had impacted the Syrian delegation in New York, which could not receive financial transfers to pay its daily bills and obligations to the Organization, he said.  The host country also was creating obstacles.  For example, in early 2011, it had closed Syria’s bank accounts.  Syria later opened an account at a bank in Washington D.C.  This account was then closed.  For 19 months, Syria did not have a bank account in the host country.  The harassment suffered by the Syria delegation in New York had moved to the personal level and delegates’ personal accounts with Chase Bank had been closed.  The host country had to provide a regular environment for the United Nations delegations.  Syria had attempted to open a bank account with the United Nations Federal Credit Union, but its request had been turned down.  Syria intended to honour all of its obligations to the United Nations.

ABDOU SALAM DIALLO ( Senegal) said the United Nations must show a spirit of innovation by “doing more with less” and improving its resource budgeting.  States were required to wisely use resources and should explore new options for undertaking work with fewer resources.  In addition, budgets for special political missions should be reduced or kept within reasonable limits, while reforms to the Secretariat’s administration would be a great step forward to avoid duplication.  He was pleased that more States were current with their assessed contributions.  While the number of countries that had paid in full had increased from 2012, some $945 million — or 36 per cent — was in arrears in the regular budget.  Delays in contributions for the regular budget, peacekeeping operations, international tribunals or the Capital Master Plan comprised a large share of the United Nations budget.  With $454 million in cash flow, he was worried that those stretched resources might not cover expenditures through December.  Also, developing countries counted on reimbursements to replace equipment and to keep their peacekeepers up to par.  He called for the Secretary-General to make an appropriate response to their concerns.

Mr. TAKASU thanked all the delegations for their helpful comments and said all their points would be considered.  The Organization’s overall financial situation was positive and sound and he was very grateful to Member States for their payments.  Yet with less than three months before the year’s end, the regular budget had already drawn money from the working capital budget.  That left $122 million in the working capital budget and $259 million in the special accounts budget for a total of $371 million.  These funds were sufficient only to last until early December.  He urged Member States to make their payments to the Organization.

Addressing delegates’ concerns about the monies the Organization owed to Member States, he said this issue was a top priority for the Secretary-General.  A payment of $159 million had been madeto Member States for troops since his 9 October presentation to the Committeeand $169 million had been made for contingent-owned equipment.  The Secretariat faced constraints as funds marked for different peacekeeping operations could not be mingled.  He noted that all Member States had stressed the importance of financial discipline.  He assured the delegates that the Secretariat was following tighter fiscal discipline measures.  The Secretariat also was aware of the difficulty that some Member States were facing in making their payments to the United Nations.

Conditions of Service and Compensation for Non-Secretariat Officials

RUTH DE MIRANDA, Chief, Human Resources Policy Service, Office of Human Resources Management, introduced two reports of the Secretary-General on the conditions of service and compensation for officials other than Secretariat officials.

The first report, on conditions of service and compensation for members of the International Court of Justice and the International Residual Mechanism for Criminal Tribunals, and for judges of international criminal tribunals (document A/68/188), gave background information on the remuneration scheme of judges, and an overview of other conditions of service attributed to ad litem judges.  The report proposed no changes to the current remuneration system, and other conditions of service of the International Court of Justice members and judges and ad litem judges of the two tribunals and their residual mechanism.  Should the Assembly approve the recommendations, the standards for the costing of such items in the proposed budget for the biennium 2014-2015 would remain at the level of the revised 2012-2013 appropriation and would not entail additional resource requirements.

The second report, on conditions of service and compensation for full-time members of the International Civil Service Commission and the ACABQ Chair (document A/68/187), proposed no changes in the current remuneration system, and other conditions of service of the full-time members of the Commission and Advisory Committee Chair.

CARLOS RUIZ MASSIEU, Chairman of the ACABQ, introduced that body’s report on the conditions of service and compensation for members of the International Court of Justice, judges and ad litem judges of the international tribunals, and members of their Residual Mechanism (document A/68/515).  Referring to the Secretary-General’s proposal of no changes to the current system of remuneration and other conditions, he said the standards for costing would not entail additional resource requirements.  The Advisory Committee had no objection to the Secretary-General’s proposals.

PETER THOMSON (Fiji), speaking on behalf of the Group of 77 and China, urged improved conditions of service at the International Criminal Tribunals, saying that the Assembly must work to achieve that in an impartial manner.  He supported the key principles, outlined in the statute of the International Court of Justice and tribunals, that judges’ salaries shall be fixed by the Assembly.  Quality among judges was a requirement.  The Group would analyze the conditions of service in the International Residual Mechanism for Criminal Tribunals, as well as the pension benefits for judges at the Criminal Tribunals for Rwanda and the Former Yugoslavia.  On the conditions of service for full-time members of the International Civil Service Commission and the ACABQ Chair, he noted that the Secretary-General had not proposed a change to their compensation.  He requested that more information on the cost-of-living adjustment for those officials be shared during informal discussions.

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