PRESS BRIEFING BY UNDER-SECRETARY-GENERAL FOR ADMINISTRATION AND MANAGEMENT
Press Briefing
PRESS BRIEFING BY UNDER-SECRETARY-GENERAL FOR ADMINISTRATION AND MANAGEMENT
19970528
FOR INFORMATION OF UNITED NATIONS SECRETARIAT ONLY
At a Headquarters press briefing yesterday afternoon, Under-Secretary- General for Administration and Management Joseph E. Connor briefed correspondents on the proposed programme budget for the 1998-1999 biennium (document A/52/6).
Mr. Connor said if he were writing a story about the budget he would stress two points. First, for the first time in a long while, the budget showed negative growth; budget estimates were down in absolute dollar terms for the biennium 1998-1999. Second, the number of posts had been reduced by over 900.
He said he had introduced the preliminary budget estimates to the Advisory Committee on Administrative and Budgetary Question (ACABQ) on Friday, 23 May, and it had been made available as an official document the following day. In addition, a letter from the Secretary-General summarizing the budget was being delivered to permanent representatives. The process for submitting the budget was more unusual this year, as the current document was not the Secretary-General's final budget submission. It would be revised following the introduction of the Secretary-General's reform package in July. At that time, further budgetary changes would be made to reflect the consolidation of departments and the reassessment of programmes and would result in a further proposal to suppress an additional 100 posts.
As of today, 1,100 post were vacant, Mr. Connor said, and it was expected that additional vacancies would be created by the reform exercise. At the end of the presentation of the reform package in July, the United Nations Controller would revise the dollar and posts amounts to take into account the changes. The revised document would then go to the General Assembly's Fifth Committee (Administrative and Budgetary) for legislative action in December.
Mr. Connor said that in dollar terms the preliminary budget, while designed to ensure full delivery of mandated programmes, represented a reduction of $124.0 million in appropriations when compared to the present budget, at the same prices. The proposal initially stood at $2,479 million compared to the current programme budget of $2,603 million. When provisions for increases in inflation for 1998-1999 were added, the proposals amounted to $2,583 million -- some $20 million below the current budget. That result reflected the product of the rationalization of work programmes, and continuous and sustained efforts to improve working methods and to increase effectiveness within the Secretariat. A further recosting of the budget, to
take into account changes in inflation and the rates of exchange, would be necessary to reflect the benefits which had arisen from the strengthening, since late 1996, of the United States dollar on the foreign exchange market. A tentative mid-range estimate could see a further reduction of $50 million, from the proposed requirement of $2,583 million to $2,533 million, based on current realized exchange rate levels.
Regarding staffing, the preliminary budget showed 8,839 posts compared to the 10,021 posts authorized for 1996, Mr. Connor said. That was a reduction of 1,182 posts. The reduction included the abolition of 904 posts, the net transfer of 288 posts out of the budget and the addition of 10 new posts. The Secretary-General was drawing attention to the steps taken to nurture priority programme areas by concentrating post reductions, to the maximum extent possible, in common support areas. Final proposals reflecting the budgetary adjustments of consolidating the three economic and social departments, streamlining of services for intergovernmental processes and reorienting public information would result in further proposals in late July for reduction for posts.
The Secretary-General was convinced, Mr. Connor said, that the proposals before the Member States showed that significant steps had already been taken during that first phase of reform to redirect the way the Organization operated, while at the same time assuring its ability to deliver its work programme. That had been accomplished even though estimated expenditures related to his proposals would be contained within a level of negative nominal growth, with further economies possible based on the additional reform proposals to be submitted in July.
The Secretary-General's proposed 1998-1999 budget was within the outline which was legislated last December and, before recosting, showed a reduction of $124 million to $2,479 million, from $2,603 million in 1996-1997, Mr. Connor said. When the exchange rate effect up to the end of 1996 and inflation estimated to occur throughout 1998-1999 was added, the preliminary recosted budget amount was $2,583, which was down $20 million from $2,603 million for 1996-1997. It was estimated that the effect of exchange rate changes experienced after December 1996 would further reduce the budget by $50 million, for a total reduction of $70 million, to $2,533 million. "That was our last best guess", Mr. Connor said.
"How were these reductions accomplished?" Mr. Connor asked rhetorically. First, the Organization made $84 million in cuts in real activities -- people, travel and meetings. There were also other appropriations reductions of $40 million for a total of $120 million of reductions from 1996-1997 revised appropriations. After factoring in inflation estimated through 1999 and exchange estimated through 1997, which added $54 million, the total amount of reductions was $70 million.
USG Connor Briefing - 3 - 28 May 1997
The budget reduction in real terms was $84 million, and the inflation and exchange effect totalled $54 million, he continued. Therefore, as the budget reduction was bigger than the combined impact of inflation and exchange rates effect, the Organization would operate under negative nominal growth, which had not been seen in a United Nations budget before.
Regarding the shift in resources, compared to 1996-1997, the preliminary budget for 1998-1999 featured an increase of $55.6 million for economic and social areas, while all other areas had been reduced by $75.9 million, Mr. Connor said.
Turning to the area of staffing, Mr. Connor said that while 10,021 posts had been approved for 1996-1997, only 8,839 had been proposed in the preliminary 1998-1999 budget. Therefore, the level of staffing was down 1,182 posts. Of those posts, 904 were proposed for elimination, including nine that had been eliminated at the end of 1996.
Foremost among the significant trends in the preliminary budget for 1998-1999 was the reduction of administrative costs, Mr. Connor said. It also featured a significant increase in resources devoted to the regular programme of technical cooperation, redirecting resources to areas in the economic and social field. The staff training budget had been increased 25 per cent to improve the effectiveness of staff and to support the introduction of managerial change. In addition, resources had been devoted to fixing up the infrastructure and adequate maintenance of the Organization's premises.
Asked if the preliminary budget was expected to change significantly after the reform package was announced in July, Mr. Connor said he expected the suppression of the other 100 posts, which would free up about an additional $20 million in resources. There would be other changes that could not be as precisely determined. It must be stressed, however, that the budget would definitely not grow.
What percentage of the budget was spent at Headquarters and how much was spent in Geneva? a correspondent asked. Mr. Connor said he could not give an exact percentage for each. However, within the budget of $904 million for common support services, $125 million was allocated for Geneva.
A correspondent asked to what degree exchange rates would need to fluctuate in a direction unfavourable to the United Nations before the negative growth projections of the preliminary budget would be in jeopardy. Mr. Connor said he did not know off-hand. His office could provide estimates only on known conditions, therefore, present estimates were the best recosted numbers it could provide.
Asked what figure for inflation was used to calculate the budget for 1998-1999, Mr. Connor said his office used the figure of 5 per cent over two years. It should be remembered that inflation in a biennial budget
USG Connor Briefing - 4 - 28 May 1997
represented twice as much of an effect as estimates comparing a single year to a single year.
How many of the 904 posts being abolished were currently unfunded or had no real people in them? a correspondent asked. Mr. Connor said there were 1,100 posts currently vacant. In the budget, 900 were proposed to be suppressed, and none of them were occupied by staff. That was a serious step for the Organization because those posts would be gone forever once the budget had been approved.
Asked how far the United Nations proposals were from the requests being made by the United States Congress, Mr. Connor said the benchmarks mentioned by the Congress affected the arrears, not the payment of assessments for the current year. He said he had not seen any report describing benchmarks relative to the current year's assessment, either for the regular budget or for peace-keeping. It was in regard to the regular current year's assessments that the United Nations had traditionally been faced with benchmarks characterized by quantitative goals, regarding the number of posts and the amount of the budget. The Organization had met those goals consistently. To suppress one tenth of the workforce and to achieve negative nominal growth were significant achievements, and the Organization looked pretty good by comparison with any government.
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