PRESS BRIEFING BY UNDER-SECRETARY-GENERAL JOSEPH CONNOR

Press Briefing

PRESS BRIEFING BY UNDER-SECRETARY-GENERAL JOSEPH CONNOR

A new report by the United States General Accounting Office (GAO) confirmed the country's arrears figures as calculated by the United Nations, and that the country had to pay between $211 and $241 million by the end of the year to avoid losing its voting rights under Article 19 of the Charter. The Under-Secretary-General for Management, Joseph Connor, confirmed this assessment today at a Headquarters press briefing in response to the GAO report on United States Financial Issues and Arrears to the United Nations.

A United States GAO report was prepared because Congress asked the Controller General to carry out a review of the United States arrears issue and its impact on United States policy pursuits, Mr. Connor said. The report on the arrears to the United Nations addressed two issues; first, the Organization's financial status, and second, an assessment of the impact of the United States arrears on the United Nations decision-making process, including United Nations resolutions dealing with Iraq.

Mr. Connor pointed out that the report agreed with United Nations statements that the regular budget deficit was growing, that peacekeeping cash was declining and that the total resources available to the Organization were diminishing. The GAO had subscribed to the data the Office of Management had been presenting to the General Assembly, the press and others. Much of the data previously presented by the United Nations had been accepted. In effect, the Organization did not have the cash to pay the debt owed to peacekeeping contributors.

Mr. Connor highlighted the specific references in the report that merited closer attention: a table on page 16 documenting the regular budget deficit; a table on page 18 showing the downward slope of peacekeeping cash; a table on page 14 depicting the diminishing level of total resources, and a table on page 32 showing the persistent level of nonliquidated debt to Member States.

Thus, the report demonstrated and put on record what the United States owed against assessments. The report was significant also for what it did not mention, that is, that the United Nations owed the United States money.

The assessments owed and not paid were shown in the table on page 20 and in appendix 2, Mr. Connor said. Outstanding contributions by countries were listed on page 22. All of those numbers confirmed the United Nations numbers, and some other interesting numbers that had not been public before, as for example, the identification of the amount of money the United States would have to legislate and pay before the end of the year in order to avoid an issue of Article 19 arising, which was the $211-241 million figure. As the report explained, the range was due to uncertainty about whether an

appropriation already made could be reprogrammed. But the presentation in the report was the first time the number was made public in print.

The report also showed the composition of the difference between what was frequently referred to as the amount of money that the United States acknowledged as owing versus what the United Nations books showed, he said. The difference between the two was about $500 million, and that grew out of legislative withholdings on the part of the United States, issues which they had announced and legislated as those they would not pay for. There were also policy withholdings on the part of the United States, such as a difference of 25 and 31 per cent in the recurring peacekeeping assessments.

In some respects, because it was a report produced by a Member State, Mr. Connor said, there was a frank disclosure about some of the numbers which had been discussed generally but without specificity. Overall, the report substantiated in large measure the trends seen and reported by the Organization. It also put to rest the issue of whose numbers were right.

On the policy issue, he said, the State Department had issued a fairly strong letter characterizing the report as too narrowly focused to permit valid conclusions about whether United States policy objectives had remained unachieved because of the arrearage situation. They had mentioned a difficult negotiating environment, failure to achieve a reduction to a 22 per cent assessment rate for the regular budget and a number of other effects. At the same time they concluded that the major policy objectives had been achieved, such as a series of resolutions on Iraq. However, the State Department had pointed out that this assessment was not the complete picture, which was something Member States could comment upon, not the Secretariat. In any case, the press was urged to do a thorough reading of that section of the report.

A correspondent stated that the office of the United States Chairman of the Committee on Foreign Relations, Jesse Helms, had maintained that the $211- 241 million needed to avoid Article 19 could easily be covered by regularly scheduled payments, most of which would come due in October. Was that correct?

The United States had to legislate new appropriations, and they had not yet done that, Mr. Connor said. Their usual practice was the same as that occurring with the bill going through Congress now. It was one of the 13 regular sections of the United States budget, and in that, $297 million had been provided for the regular budget and about $235 million for peacekeeping. In amount, that certainly exceeded the $241 million, but the United States had never been able to pay that amount between October and December because of adherence to benchmarks. As a matter of fact, all the money legislated last October had not yet been received.

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So there was a double hurdle to cross, Mr. Connor said. First, the United States had to appropriate the funds. And then, in addition to appropriating new money, the United States had to actually pay between $211 and $241 million by the end of the calendar year. "Of course we wish them good luck", he said.

Did those GAO numbers correspond to the United Nations numbers? the journalist asked.

Those numbers were consistent with the numbers used internally, Mr. Connor answered. "We as an organization are not always totally informed on the Member States' appropriation level", he added. "So those numbers were confirmed by the State Department."

With this report, he said, the issue of the numbers was off the table. "It's $211 to $241 million which must be legislated and paid by the United States by the end of the calendar year. By comparison, the United States last year paid $150 million in the comparable period between October and 31 December."

Since he dealt regularly with the United States Congress, a journalist asked, did Mr. Connor expect this report to retire the question about the $4 billion the United Nations owed the United States? the journalist asked.

"I never predict what other people will do", Mr. Connor said. "But the report tells me we can stop discussions about numbers." It was a good report, he added. It confirmed the numbers that the United Nations had been using and stating publicly, and it did not raise the issue of how much, if anything, the United Nations owed to the United States.

The United Nations owed some money to the United States for letters of assist, he said. "We owe a lot more to other countries, but that's a valid debt we've acknowledged all along", he added. The GAO identified the figure as $1.2 billion, which was slightly different from the $850 million figure the Office of Management had been using. Those numbers were not different, but were calculated differently, he said. It was significant that the issue was not raised in the report, as the last GAO report had raised questions about a debt of some $3 or $6 billion contended as owed by the United Nations to the United States. Thus, the numbers debate was pretty well resolved. It added up to what was characterized as a precarious financial situation leading to imprudent business practices of cross-borrowing. The report acknowledged that and the issue of how much was owed to the United States was pretty much off the table.

Had Management ever made the Article 19 target numbers for the United States public? the journalist asked. No, Mr. Connor said. That was not done for any country because it was a matter between Member States and the

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Secretariat. Once a year, occasionally more often, warning letters were sent usually around November to all Member States believed to have the possibility of being under Article 19 in the ensuing month leading up to 31 December. That was followed up by phone calls. It was fairly successful.

The report disclosed that at the end of last year, there were 39 countries under article 19, Mr. Connor said. Two months later, that number had dropped to 27 because payments were made. Of the countries more than two years behind in their payments, three were excused from payment by the General Assembly. Those three were Comoros, Liberia and Tajikistan. Also mentioned in the report were past circumstances in which Article 19 was not invoked against Member States because the General Assembly voted not to invoke it. That largely related to assessments now many years old related to the Congo operation and the Middle East operation, going back to the early days of the Organization.

Overall, the report was a very full description of the situation, he concluded. The important point was that any relief from invoking Article 19 had to be voted on by the General Assembly. It was not something the Secretary-General decided one way or the other. The consequences of falling more than two years behind were specified in the Charter. The report also put into perspective the few times the General Assembly had voted not to invoke the article. But even in the case of the three countries excused from the loss of their vote, a General Assembly vote had been required. So it was not a strange or new procedure, but one that was handled every year.

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