6 February 1996

Press Release


19960206 Suggests Possible 20 Per Cent Ceiling on Assessments; Will Take All Steps Necessary 'To Avoid Financial Collapse'

Following is the text of the statement delivered today by Secretary- General Boutros Boutros-Ghali to the General Assembly's High Level Group on the Financial Situation of the United Nations:

When we last met, in June 1995, I reviewed the financial situation of the United Nations with you in detail. The concerns that I raised with you at that time are of even greater concern today.

The United Nations now faces a grave set of problems. The facts and figures have been made public. By now they should be well-known to all.

Throughout the past four years we have tried again and again to win support for measures to enable the United Nations to overcome these problems. I have taken decisions on matters that fall within my authority. I have repeatedly called attention to the need for decisive action by the Member States. Yet today, four years later, the United Nations is still afflicted by these problems. And time is running out.

As Secretary-General and Chief Administrative Officer of the United Nations, I am duty-bound to do all that is in my power to help ensure not only that the Organization survives, but that it is transformed into a more responsive, efficient and effective instrument in the service of its Member States and all the Peoples of the United Nations.

Today and tomorrow the world faces a time of both peril and promise. If humanity's vast potential is to be fulfilled, it will need the United Nations -- as the world Organization -- to help construct a future of security, progress and justice.

This was the message of the 128 heads of State and government who made

the decision to be present at the United Nations on the occasion of the fiftieth anniversary. One after another, in deeply serious and far-reaching statements to the Special Commemorative Session of the General Assembly, they reflected a conviction that the clock must not be turned back.

The United Nations today confronts five challenges. They are interconnected. We need to analyse each one not only in its own terms, but also in the context of the whole. We need to be clear not only about the changes that are needed, but also about where the fundamental authority lies to bring about such change.

We face: a financial crisis; the issue of the scale of assessments; a budgetary problem; a structural challenge; and an administrative challenge. Each must be approached realistically. Each requires a rational solution. And each must contribute to a compelling vision of the kind of United Nations we seek to build for the future.

Let us begin with the first challenge.

The financial crisis has brought the United Nations to the edge of insolvency. The Organization is totally dependant on cash inflows from Member States' assessments to provide liquidity. Unpaid assessments now exceed $3.3 billion. We cannot continue to shift funds from the peace-keeping budget to meet shortfalls elsewhere. The United Nations owes about $1 billion to countries that have contributed troops and equipment for peace-keeping.

I mention these facts not in order to describe once again the magnitude of the crisis, but to point out that the Organization now finds itself trapped in a downward spiral of events in which one problem creates another, and the combination of problems works against the rational solution of any or all.

Our long-term vision must include the recognition that the United Nations will have to experience substantial change if it is to be regarded by its Member States as providing good value in return for the sums assessed. This cannot be achieved unless the downward spiral is broken. The predictability of financing is, therefore, key in both the short and long term. We have an immediate crisis caused by the failure to pay assessments when due.

In the present conditions, the way ahead requires that we take immediate action while we think about and discuss the long-term solution. The crisis is of such proportions that we must act in the short term and I intend to do my part. We must make the present assessment system work to carry us through the crisis.

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In the short term I will pledge to you my personal effort. I plan to contact the heads of government of those countries in arrears with a direct appeal to make up their arrears now. I will also ask each of those countries which are in arrears now to provide me with their proposed payment plan to make up those arrears. I will present that summation to you. And I will bring to the attention of the General Assembly the cumulative efforts that Member States in arrears are willing to make. I commend to your consideration, by way of illustration, the commitment made by the Russian Federation to make current its arrears in a stated number of years. I welcome that expression of support. I ask all Member States in arrears to emulate it.

I regard the financial crisis as my top priority in the period ahead. I will do all that I can to avoid a financial collapse. Only the Member States, however, can take the major decisions necessary. In view of this I call for a resumed or special session of the General Assembly on the financial situation of the Organization to convene prior to the opening of the next General Assembly.

Two: Now for the long term, at the heart of any approach to addressing the long-term dimensions of the crisis, is the issue of the scale of assessments. The realities of international relations today differ from those which pertained at the time of the United Nations founding. The scale of assessments should reflect current political and economic realities. It should also reflect the global nature of the United Nations, and the fact that the Organization is the instrument of all nations. A ceiling of 20 per cent or even 15 per cent on the assessed contribution of any Member State to the regular budget of the United Nations, would provide for a more even distribution of the assessed contributions, and would better reflect the fact that this Organization is indeed the instrument of all nations.

Three: The current budgetary situation is a distinct, but related problem. Drawing on the benefits of restructuring and through efficiency gains and investments in technology, I was able to propose a programme budget for 1996-1997 which represented a significant reduction compared with the previous budget, while covering all mandates.

The budget ultimately approved by the General Assembly requires me to make significant additional reductions in the amount of $154 million dollars. I have already requested Heads of Departments and Offices to realize these reductions by reviewing their programmes and identifying ways to achieve further savings. The full impact of the reductions will become clear only after the completion of this review. But it is evident that budgetary reductions of such magnitude can be realized only through a combination of staff reductions and reductions in non-staff costs. They will have a consequential impact on activities and services provided to Member States by

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the Secretariat.

It is now my responsibility to reduce expenditures to the level approved by the General Assembly. I am committed to doing so while, at the same time, minimizing the effect on programmes and continuing to improve the efficiency of the Organization. I am also committed to minimizing the impact on the staff. We must not undermine the international civil service.

The decisions required to deal with the budget problem lie in the first instance with the Secretary-General. Most must be approved by the General Assembly. I intend to shape my decisions, as well as my recommendations to the General Assembly, in a manner that will serve a vision of the United Nations that reflects the changing needs of Member States and the new range of international and global problems. But -- and here is the link to the financial situation -- serious efforts on the part of the Secretariat to deal with the reduced budget must be accompanied by equally serious efforts on the part of Member States to finance the activities and programmes they have approved in the budget.

Four: Building on restored financial stability and ongoing efforts at rationalizing and streamlining, certain basic structural issues need to be addressed comprehensively if the Organization is to be responsive to the changing international situation and the views of its membership. These include: the composition and procedures of the Security Council; the relationship between the Security Council and the General Assembly; the future of the Trusteeship Council; and the role of the Economic and Social Council. These issues of inter-governmental restructuring deserve the most serious attention by Member States.

In the aftermath of the Special Commemorative Session, and in the light of the emerging consensus on the role of the Organization, the time is ripe for changes to bring about clearer policy direction, enhanced coherence and more effective policy oversight. This will, in turn, provide a foundation for continuing reform of Secretariat structures.

Five: The consolidation and streamlining of Secretariat structures and, more generally, management change have indeed been my constant preoccupations since taking office. My objective throughout has been a more integrated Organization, with a structure better able to focus on the major tasks of peace-keeping, human rights, humanitarian assistance and development, and their growing linkages.

As part of this effort, I greatly reduced the number of high-level posts in the Secretariat. I cut the number of separate Offices and Departments. I took steps to reduce overlap and duplication. I reduced travel. I took

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initiatives to strengthen managerial skills, and to ensure greater accountability for results. I strengthened training programmes. I called for more competitive entry and started a new performance appraisal system. I made a commitment to bring more women into positions of high responsibility. I mentioned before the measures I have taken in relation to the regular budget.

Throughout the United Nations, structures are being streamlined and staffing tables reduced. The United Nations internal rules are being simplified. There is new flexibility and creativity. To rationalize further the work of the Organization, my new Management Plan will improve performance, ensure greater productivity and increase cost effectiveness. Increased attention is being paid to eliminating fraud and wasteful use of resources. The Office of Internal Oversight Services is playing an important role in this effort, and has been given the means to do the job.

It is clear that the challenges facing the Organization are inter- linked. None stands alone. Success or failure in one has an impact on the others. Reform can strengthen the confidence of Member States in the ability of the Organization to use funds effectively, and thereby positively affect the financial crisis. And structural change could put the entire Organization on a new and stable basis that will permit it to function without interruption.

The key to progress at this point is action on the financial crisis. As long as it remains unresolved, all other efforts to cut back, reform or restructure cannot possibly succeed, and the fate of the Organization itself is in danger. I pledge myself ready to do all that I can do to bring this set of problems to a positive and comprehensive solution. Beyond what is possible for a Secretary-General to accomplish lie major decisions that only Member States can make.

Solutions to the crisis before us require political will and imagination, but are not beyond us, either financially or intellectually. The size of the United Nations budget, when considered in relation to the size, scope and significance of its activities, is remarkably small.

I am counting on you to accelerate your discussions and to arrive at a comprehensive solution. For my part, I will do my utmost to ensure a strong, viable Organization. I am committed to continuing reform. But I appeal to you to provide the financial underpinning to enable this effort to be pursued. You must address the immediate financial emergency, and devise the means to put the Organization on a stable financial footing.

A session of the General Assembly, convened at an appropriate time during the year to adopt a comprehensive plan to restore the financial

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soundness of the Organization, would make it possible to maintain the momentum of the Special Commemorative Session and give a boost to the Assembly's overall reform effort. The solidarity among nations that marked the Special Commemorative Session must be translated into concrete action. Beyond solidarity, the self-interest of each Member State points to the essential need for an Organization with a proven capacity to support peace, development and democratization, codification of international law, problem of the environment.

I appeal to you to rise to the challenge. It is in the interest of every State -- large and small -- and of future generations, that our joint efforts should succeed. With a coordinated, integrated and forward-looking resolve we can succeed. The United Nations will, in this way, be re-created as a truly effective mechanism to construct the better world we all seek.

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For information media. Not an official record.