PRESS BRIEFING BY UNDER-SECRETARY-GENERAL FOR MANAGEMENT

Press Briefing

PRESS BRIEFING BY UNDER-SECRETARY-GENERAL FOR MANAGEMENT

At a Headquarters press briefing this afternoon, Joseph Connor, Under- Secretary-General for Management, told correspondents that the United States had today paid $197 million to the United Nations in assessment payments.

Mr. Connor said that those payments would bring the total aggregated payments made by the United States in 1998 -- for both regular budget and peacekeeping assessments -- to $586 million. As a result of those payments, the Organization's need to cross-borrow from peacekeeping cash to fund the regular budget shortfall during the last quarter of 1998 would be greatly reduced. Accordingly, the previous year-end projection of cash available for regular budget purposes was being revised from the original forecast of negative $247 million to a new forecast of negative $50 million.

Continuing in a different vein, the Under-Secretary-General went on to say that 107 Member States were fully paid up with regard to the regular budget for 1998 and for all prior years. He encouraged the remaining States to make every effort to pay their regular budget assessment and to help eliminate the small regular budget cash deficit that was still forecasted for year end.

The payment by the United States, continued Mr. Connor, also removed any likelihood that it would be subject to the provisions of Article 19 of the Organization's Charter on 1 January 1999. That was despite the fact that the total amount of that country's arrears, even after the current payment, stood at $1.28 billion. "It is hoped that this regular budget payment by the United States is followed by the removal of all impediments that have precluded the legislation and payment by that Member State of its arrears", he noted.

A correspondent wanted to know if the $50 million regular budget deficit was a projection of what would have to be cross-borrowed from peacekeeping to finish out calendar year 1998. Mr. Connor, said that was correct. He warned however, that "these are projections". They were good within ranges. "When you get down as low as $50 million, don't expect the number to be exactly the same at year end. It could be somewhat up -- somewhat down." What he was really trying to say, however, was "we have really dropped down as to the big negative cash that we foresaw in the absence of the United States payment".

Asked to compare that $50 million to past years, Mr. Connor cited deficits of $122 million last year, $195 million the year before and $196 million the year prior to that. "The first year we started building it up it was only minus $26 million -- that was 1994." The reason it had gone from negative $26 million in one year to a negative $196 million in the next was largely due to the United States only paying about half of what it had been assessed for that year. It had, in fact, been appropriating in its national legislation, substantial full payment of the regular budget assessment. The

payment cycle, however, had been getting later and later. The current payment was a little late in coming in, but was very welcome.

A correspondent wanted to know if it would be possible to resolve the problem with the United States' assessment. The Under-Secretary-General said that it had been hoped that country was going to resolve it, because it was their internal problem. As correspondents were aware, there was an extraneous item that had been attached to the legislation.

The legislation had been passed and had gone to the President of the United States, William J. Clinton, Mr. Connor continued. He of course had vetoed it because of the non-related activity of abortion. Hopefully, that issue would be resolved. Mr. Connor said that was why he had said in his statement that "we hoped that the regular budget payment issue is solved by the removal of all impediments that had precluded the legislation and payment by the United States of its arrears". Included in that arrears package, among a number of other conditions, was roughly $800 million of arrears payments.

Asked to give an evaluation about a story in the Washington Post about United States Senator Joseph Biden, Mr. Connor said "that was an encouraging article for all of us here to read". He believed the Senator was right -- the Organization was substantially crippled. In times like this, clearly, owing $850-$900 million for contingent owned equipment to Member States for past missions did not make those States very excited to get into new missions.

Mr. Connor said the other point made by Senator Biden regarded the arrears owed by the United States. As stated earlier, the figure owed by the United States was $1.28 billion. The Senator had mentioned a figure that was roughly $400 million less than that. That discrepancy was not "due to bad bookkeeping on our part". That was due to a specific list of items which, either by United States Government policy or legislation, that country did not recognize as assessments. One item was the difference from 1 October 1995 between a peacekeeping assessment of 31 per cent and what the United States national legislation had said they would pay, which was 25 per cent. That difference amounted to $128 million.

The Under-Secretary-General went on to say that another item was the United States decision not to increase its share of the peacekeeping assessment, following succession by the Russian Federation to the permanent Security Council seat of the former Soviet Union. That was exactly the same issue, but on a different scale. That accounted for another $123 million in the discrepancy.

Continuing, Mr. Connor said that another item was statutory withholdings. That amounted to $62 million and related to a very long list of United Nations activities that the United States had announced its intention not to pay. That included, principally, withholdings for the construction of

Connor Briefing - 3 - 4 November 1998

the Conference Centre in Addis Ababa, Ethiopia, for the Economic Commission for Africa; work of the Preparatory Commission for the International Seabed Authority and the International Tribunal for the Law of the Sea; and United Nations activities of earlier years associated with the Palestine Liberation Organization.

The Under-Secretary-General said the point he was trying to make was that there was no arithmetic argument. The arithmetic was known and agreed on by the Secretariat, the United States Mission to the United Nations and the State Department. The number was roughly $400 million and remained, to coin a phrase, an item in dispute.

In light of the fact that the peacekeeping account had been dipped into a lot for regular expenses, a correspondent wanted to know whether there was any connection between that and the United Nations not being eager to take on any new peacekeeping assignments. Mr. Connor said the account had been dipped into repeatedly and in some depth. As a result, the amount that remained today, which was about $700 million, had in effect been raided by some $800 million.

Continuing, the Under-Secretary-General said the Organization had been able to do that by not paying its obligations to Member States for troops and equipment they had provided over the last years. That had affected the willingness of those States to participate in future peacekeeping operations. In fact, several countries had advised the Secretary-General that they simply would not do it, because they were currently not being paid for the resources they brought to the fulfilment of the mandates that Member States had voted on.

Mr. Connor said the United States payment had absolutely nothing to do with peacekeeping. There was still a debt on the books in that regard for $850 to $900 million. That debt could only be satisfied when those who owed peacekeeping amounts for unpaid assessments, paid those assessments. While that amount was very large in the case of the United States, there were similarly important numbers relative to several other Member States. About 91 per cent of all the monies owed in that regard were owed by three or four countries.

A correspondent wanted to know what the United Nations would do with the current United States payment. Mr. Connor said it would be kept in the Organization's bank account and would be used to pay payrolls and operating expenses in November and December. Historically, as the end of the calendar year approached, expenses other than personnel rose. The United States payment would be used to pay those expenses for November and December. Hopefully, at the end of December there would be a need to cross-borrow a relatively smaller amount from the peacekeeping funds. In that sense, it was good news, but he really wanted to see all the minus signs out of the accounts.

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