UNITED NATIONS PENSION FUND WOULD MAKE PAYMENTS TO DIVORCED SURVIVING SPOUSES, BY TEXT APPROVED IN FIFTH COMMITTEE
Press Release
GA/AB/3278
UNITED NATIONS PENSION FUND WOULD MAKE PAYMENTS TO DIVORCED SURVIVING SPOUSES, BY TEXT APPROVED IN FIFTH COMMITTEE
19981208 Committee Also Discusses 1998-1999 Budget, Proposed 2000-2001 Budget OutlineThe United Nations Pension Fund would make payments to divorced surviving spouses, according to the terms of a nine-part draft resolution approved without a vote this morning by the Fifth Committee (Administrative and Budgetary).
The Fund's regulations would also be amended to eliminate the practice of discontinuing surviving spouse's benefits upon remarriage, by other provisions of the draft, which was introduced by the Committee's Vice- Chairman, Manlan Ahounou (Côte d'Ivoire).
By other terms, the Interim Commission from the International Trade Organization (ITC) would cease to be a member of the Fund as of 31 December 1998. The ITC -- the joint technical assistance arm of the United Nations Conference on Trade and Development (UNCTAD) and the World Trade Organization (WTO) -- had been the first participating organization to ever request such a move.
Also, the Assembly would reclassify the Chief of the Investment Management Service to a higher level (D-2) and the Secretary of the Board would become Chief Executive Officer, with the pay and conditions of service of an Assistant Secretary-General.
Speaking in explanation of position, Canada's representative noted that staff in the Interim Commission could receive a benefit from the Fund and a salary from the WTO. Such "double dipping" was illegal in Canada.
The Committee also decided to recommend the budgetary implications of the draft to the General Assembly. Should the draft be adopted, the programme budget for the biennium 1998-1999 would be reduced by $625,400.
Discussing the programme budget for 1998-1999, the representative of Indonesia, speaking for the "Group of 77" developing countries and China, said
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$25.9 million in reduced requirements resulting from high vacancy rates should not be used to reduce the budget. Such rates negatively affected mandated programmes and made the budget process less transparent. The Secretariat should provide detailed justification for those rates, and their effects.
Cuba's representative, also calling for more information on the unacceptably high vacancy rates, said the $25.9 million arising from vacancies should go to the Development Account.
Many of the Assembly's budgetary decisions were political and represented serious departures from the established budgetary procedure, he continued. The principle of zero growth had not been adopted by the Assembly. It violated the provisions of resolution 41/213, [which established the Organization's budgetary process]. The budget must provide for all mandated activities.
The representative of the United States said that the all mandated activities could and should be carried out within the $2.532 billion approved last December. The United States was not flexible on the issue.
On the budget outline for 2000-2001, that country's representative said constraints on his Government's national budget would make it impossible to finance increased United Nations assessments.
The Secretary-General's proposed $20 million in efficiency gains for the upcoming biennium were modest and he could go further, the representative of New Zealand said, speaking also on behalf of Canada and Australia. The currency crisis was a compelling reason for the United Nations to continue to live within its means.
The representative of Norway, however, said that notional savings could not be planned in the same way as mandated activities. Judging from the way the budget outline had been presented this year, tight budgetary policies had become a goal in themselves.
The representative of Panama, speaking on behalf of the Rio Group, said it would be inappropriate to make the United Nations capacity to act contingent on budget criteria. The budget should be adjusted to comply with the policy priorities set out in the medium-term plan, and not vice versa.
The representatives of Japan, Republic of Korea, Russian Federation, Austria (for the European Union and associated States), Uganda, Pakistan, China and Bangladesh also spoke.
The United Nations Controller, Jean-Pierre Halbwachs and the Assistant Secretary-General for Central Support Services, Toshiyuki Niwa responded to questions.
The Committee will meet again at 10 a.m. on Thursday, 10 December, to continue discussing the 1998-1999 budget and to take up the financing of United Nations operations in Angola.
Fifth Committee Work Programme
The Fifth Committee (Administrative and Budgetary) met this morning with the United Nations pension system aspects of the 1998-1999 budget and the budget outline for 2000-2001 on its agenda.
(For background on the first performance report for the 1998-1999 budget, see Press Release GA/AB/3276 of 4 December. For reports on the Integrated Management Information System (IMIS), see Press Release GA/AB/3274 of 30 November. For the Secretary-General's and the ACABQ's reports on the budget outline for 2000-2001, see Press Release GA/AB/3276 of 4 December.)
United Nations Pension System
The Committee had before it a report, originally introduced on 10 November, on the administrative and financial implications arising from the report of the United Nations Joint Staff Pension Fund (document A/C.5/53/3). The document explains that should the Assembly endorse the Secretary-General's proposal, a reduction of $625,400 would be achieved in the programme budget for the biennium 1998-1999.
The Committee also had before it a nine-part draft resolution on the pension system (document A/C.5/53/L.15), submitted by its Vice-Chairman. By the terms of the first part, on actuarial matters, the Assembly would request that the Pension Board, should there be a positive trend towards actuarial surpluses in future valuations, favourably consider reducing the contribution rate. It would concur with the Advisory Committee on Administrative and Budgetary Questions (ACABQ) that the Pension Board should continue to monitor the evolution of the actuarial valuation closely and that no attempt should be made to reduce contributions or make other changes until a pattern of surpluses has emerged.
The Assembly would note with satisfaction the improved actuarial situation of the Pension Fund, by other terms of the first section. It would also note the opinions provided by the Consulting Actuary and the Committee of Actuaries that no deficiency payments were required and that the current contribution rate could be maintained. Further, it would note the Board's decision to reduce the interest rate used to determine lump-sum commutations to 6 per cent, subject to a favourable actuarial valuation as at 31 December 1999, as well as its intention to review changes made to the pension system since 1983 to redress the past actuarial deficit of the Fund.
By the terms of the draft's second section, on the pension adjustment system, the Assembly would take note of the results of monitoring of costs/savings of recent changes to the two-track feature of the pension adjustment system, and of the Board's intention to regularly monitor those costs/savings. It would also note the Board's decision to recommend that the threshold for implementing cost-of-living adjustments of pensions be reduced from 3 to 2 per cent, with effect from the adjustment due on 1 April 2001, subject to a favourable actuarial valuation at 31 December 1999.
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The draft's third section, on the status of the proposed agreement between the United Nations Joint Staff Pension Board and the Government of the Russian Federation, would have the Assembly take note of information provided by the Russian Federation on problems regarding implementation of the proposed agreement and of its intention to pursue all outstanding issues. It would encourage all parties to continue efforts to resolve the problems addressed in section IV of resolution 51/217, in particular those within the framework of the proposed agreement and its accompanying protocol.
By the terms of the fourth section, on the Pension Fund's financial statements and the report of the Board of Auditors, the General Assembly would note with satisfaction that the financial statements fairly presented the financial position of the Fund and that transactions tested in the audit had been in accordance with financial regulations and legislative authority. It would also note information on measures to improve the Fund's administration and arrangements for continued internal audits by the Office of Internal Oversight Services.
The draft's fifth section concerns administrative arrangements between the Pension Fund, the United Nations and other member organizations. By its terms, the Assembly would approve additional resources of some $4.1 million for 1998-1999, as recommended by the Board, to be charged to the Fund. It would also approve the revised cost-sharing arrangements between the United Nations and the Fund, as set out in the report of the Pension Board, request the Secretary-General to complete consultations with affiliated programmes on a method of apportioning charges, and note the Board's intention to continue considering arrangements for allocating the Fund's operational costs between its assets and its member organizations.
Noting the ACABQ's recommendations on this matter, the Assembly would approve the reclassification of the Chief of the Investment Management Service post to the D-2 level, by other terms. For the Secretary of the Board, it would approve a change in title to Chief Executive Officer and remuneration and conditions of service equivalent to the Assistant Secretary-General level, and it would amend the Fund's Regulations accordingly.
It would also note the issues to be addressed by the Standing Committee of the Board in 1999 and encourage continued efforts by the Fund secretariat to ensure its year 2000 preparedness and that the new accounting system is fully operational in 1999.
By the terms of the sixth section, on entitlement to survivors' benefits for spouses and former spouses, the Assembly would approve amending the Fund's Regulations to provide for a payment facility in respect of former spouses. It would also approve the inclusion of a new article in the Regulations to provide for a divorced surviving spouse's benefit, subject to eligibility conditions and the determination of its amount. It would approve, effective 1 April 1999, the arrangement recommended for the optional purchase of surviving spouses' benefits after separation, and amendments to eliminate the current provision which requires discontinuation of a surviving spouse's benefit on remarriage. The approved changes to the Regulations would be as
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set out in an annex to the resolution.
The Assembly would request that the Board monitor implementation of the payment facility for former spouses and report to it as necessary, by other terms. It would note that the Standing Committee of the Board has been requested to review the situation of divorced spouses who would not be covered by the proposed new article because of its prospective application in 1999, and that the Committee will consider extending the changes to surviving spouses who have remarried prior to the effective date of the amendment.
The draft's seventh section, on the application of the Interim Commission from the International Trade Organization for withdrawal from membership in the United Nations Joint Staff Pension Fund, would have the Assembly decide to terminate that body's membership as of 31 December 1998, upon the Board Secretary receiving an unconditional written notification to that effect no later than 15 January 1999 from the Director-General of the World Trade Organization (WTO). That termination would be subject to receipt of a written undertaking from the WTO that it would hold the Fund harmless from any and all claims by Interim Commission participants, retirees or beneficiaries, arising from or relating to the termination of the membership.
It would decide further that the proportionate share of the assets of the Fund payable to the WTO upon termination shall be in accordance with the procedures set out in the Board's report and that this shall represent a complete and final settlement, by other terms.
The Assembly would note that the data required to determine the share of the Fund assets payable to the WTO at termination, including the relevant actuarial valuations, will not be available at the proposed termination date. It would also draw WTO members' attention to the fact that a staff member of the Interim Commission for the International Trade Organization will possibly be able to choose to receive a benefit from the Fund and, at the same time, accept an offer of employment in the secretariat of the WTO.
Under the eighth section, entitled "other matters", the General Assembly would approve amendments to the Fund's Regulations relating to the time limit for linking periods of contributory service if no benefit has been paid, as set out in an annex to the resolution. It would concur that it would not be desirable to pursue a revision of article 40 (a) of the Fund's Regulations at the present time, leaving it to the member organizations of the Fund to determine their policies. [Article 40 (a) relates to the provisions governing the suspension of pension benefits in the case of re-employment of retirees.]
According to terms of the draft's ninth section, on investments of the United Nations Joint Staff Pension Fund, the Assembly, noting the observations of the Board of Auditors on outstanding tax refunds due to the Fund from some Member States in respect of direct taxes imposed on the Fund's investment income, would urge those States with outstanding balances on foreign tax accounts receivable to provide reimbursement as quickly as possible, and reiterate its request to Member States which do not grant tax exemptions to make all possible efforts to do so as soon as possible.
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It would express appreciation to the Secretary-General and members of the Investments Committee for the investment performance of the Fund, which contributed significantly to the actuarial surplus of the Fund as at 31 December 1997. It would also welcome development of a strategic benchmark for the Fund's investment performance, and support the Secretary-General's efforts to continue consideration of suitable benchmarks and other indicators for assessing the Fund's investment performance.
Draft Resolution on United Nations Pension System
MANLAN AHOUNOU (Côte d'Ivoire), Vice-Chairman of the Fifth Committee, introduced the draft resolution. He said that consensus had been reached on all of its parts. Regarding the administrative and financial implications on the programme budget, the Fifth Committee would present a separate report. The first section, on actuarial matters, noted the first actuarial surplus seen in 20 years. The text stated that, until a pattern of surpluses emerged, no changes should be made, he said. He then summarized the operative paragraphs of the draft.
The draft resolution was approved without a vote.
The representative of Canada, speaking in explanation of position, drew Fifth Committee members' attention to the paragraph of the text that advised members of the WTO that staff of the Interim Commission might receive a benefit from the Fund and a salary from the WTO. In principle, Canada did not subscribe to processes that allowed the receipt of a benefit and a salary from the same employer. That was called "double dipping", and was illegal in Canada. Canada would be looking to the Board to address that problem so it would not occur in future.
MOVSES ABELIAN (Armenia), the Fifth Committee Chairman, proposed the following draft decision to the Committee.
"Should the General Assembly approve draft resolution A/C.5/53/L.15, the programme budget for the biennium 1998-1999, as indicated in paragraph 15 of the report of the Secretary-General (document A/C.5/53/3), would be reduced by $625,400."
The draft decision was approved without a vote.
Statements on Performance Report
PRAYONO ATIYANTO (Indonesia), speaking on behalf of the "Group of 77" developing countries and China, said the Group noted with deep concern the high vacancy rate maintained in 1997-1998, which the General Assembly had previously recognized affected delivery of mandated programmes and made the budget processes less transparent. He requested that the Secretariat provide in writing a detailed justification of the high rate, and a breakdown of vacancies maintained in all sections of the budget for 1998. The Group would also like to be appraised of the impact of the high rate on mandated activities.
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The Group was of the view that the $25.9 million in reduced requirements, as a result of the high vacancy rate, should not be used to reduce the level of the budget, he said. On the basis of additional information provided by the Secretariat, the Group would follow up reduced requirements in informal consultations.
The Group also noted that the ACABQ reported additional requirements of some $47 million which were not factored into the performance report, he said. Those should be dealt with separately by the General Assembly, in accordance with resolution 41/213 (by which the United Nations budgetary process was defined). The Group would also like written detailed information on the allocation of resources under section I B.4 in document A/52/203, with the guidelines for the use of those resources. In particular, it was concerned about the level of support provided to the President of the General Assembly. The resources approved for the General Assembly office should be used in consultation with the President.
KAZUO WATANABE (Japan) said the continued high vacancy rate -- which was greater than 10 per cent for the Professional level and above -- was regrettable. Japan was not satisfied by the explanation provided in the Secretary-General's report. High vacancy rates were now a chronic problem, and instead of excuses, the Secretary-General should provide tangible results. He understood that the Assembly still had to take action on additional requirements of about $47 million.
Those additional requirements should be taken into account when the Committee looked at the revised estimates of $2.484 million in the performance report, he continued. Decreases of $43.6 million would almost offset the aforementioned additional requirements. The variations in the rates of inflation and exchange in 1999 could not be known. Considering the first performance report as being of a preliminary nature, his delegation took note of its conclusion.
SUSAN SHEAROUSE (United States) said the initial performance report indicated that the Secretary-General had been able to implement all priority programmes and activities well within the original budget of $2.532 billion approved last December. Her delegation noted that the revised estimates did not include all potential increases. The combined effect of the "add-ons" which had not been included in the performance report could bring the revised 1998-1999 budget much closer to the currently-approved total of $2.532 billion.
All mandated activities could and should be carried out within the $2.532 billion approved last December, she said. The United States had no flexibility on the issue. It looked forward to receiving the revised estimates which would incorporate all adjustments and expected that all mandated activities would be accommodated within the approved budget level.
The performance report indicated that an additional $6.5 million would be needed for the IMIS, she said. Her delegation would seek clarification when the matter was discussed in the context of the IMIS reports. The
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performance report also included a provision for a special session of the Committee on Contributions. The United States believed that the cost of that special session -- $94,000 -- should be paid for by an equivalent reduction in the Committee's regular session. With that in mind, there was no need for an "add-on".
PARK HAE-YUN (Republic of Korea) noted that the methodology used in recosting was the average operational exchange rate, which allowed for the lowest estimates. He approved the use of that methodology and expected that adjustments resulting from actual experience would be reflected in the second performance report. He was concerned by the high vacancy rates. The explanations provided in the Secretary-General's report were not convincing, given the length of time that the problem had been recurring. High vacancy rates would continue unless procedures were simplified. Vacancy rates must not be used to achieve savings. He noted that additional requirements of $47 million had not been taken into account in the present performance report, but said that his delegation approved the requirements in the first performance report.
VLADIMIR KUZNETSOV (Russian Federation) said his delegation shared the conclusions and comments contained in the report of the ACABQ. Vacancy rates should not be used for achieving budgetary savings. He hoped that in 1999 the situation should gradually be normalized. The Secretary-General's report did not reflect estimated needs for special political missions. The anticipated requirements should be considered by the Committee as a priority, and then be used to adjust the resource base for 1998-1999.
RAFAEL DAUSA (Cuba) said political positions had characterized budgetary decisions. Many of those, while they had been adopted without a vote, had represented serious departures from the Organization's budgetary procedure. Those departures had occurred despite reiterated affirmations of the importance of adhering to the provisions of resolution 41/213. The imposition of a restrictive policy on the use of the contingency fund was one of several examples of such departures. The spirit and the letter of resolution 41/213 were being called into question. A comprehensive analysis should be carried out on the budgetary process, including information on its impact and departures from established procedures, so the necessary steps could be taken. Such departures negatively affected the Organization's ability to carry out mandated activities and were weakening the Organization's credibility.
Preliminary estimates proposed for 2000-2001 were not fully consistent with the Assembly's decisions, and departed from the budgetary process adopted in the forty-first session, he said. It was curious that the proposed reduction of $20 million in the estimates, for reasons to do with compensating economies, appeared to be the same as appropriations of new activities for the biennium. An analysis of the proposal would indicate that the new mandates were to be absorbed, which was a departure from the principle that the budget should accommodate all mandated activities. The principle of zero growth had not been adopted by the General Assembly and was not the position of all Member States.
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The draft resolution to be approved by the Fifth Committee must clearly express Member States' positions on that important issue, he said. The Secretary-General's representatives should provide the basis of the estimates for compensating economies, together with information on the efficiency measures that produced such economies. The $20 million should be added to the amount of the preliminary estimate.
Proposed increases for various budget sections was another departure from the Assembly's previous decisions, he said. The ACABQ had recommended that the projected resources for special political missions should be included in preliminary estimates. There were no technical reasons for that, but rather political concerns regarding difficulties in financing those missions, resulting from position of the main contributor.
The application of zero growth for the budget seriously violated the provisions of resolution 41/213, he said. There was need for greater transparency by programme managers in formulating the budget outline, so the level of resources could be consistent with the Organization's real needs and the Committee should know the extent of participation of programme managers in the formulation of the outline.
On the first performance report, the proposals for the current biennium amounted to $2.484 billion, a decline of about $48.2 million, he said. He noted with concern the decline of $25.9 million due to high vacancy rates -- that was unacceptable and countered decisions of the General Assembly. To have a fuller picture of the effects of vacancies, the Secretariat should distribute a conference room paper on their impact on common staff costs. In subsequent performance reports, that information should be included, with detailed explanations on the way the vacancy rates impacted the Organization's work. The $25.9 million should be transferred to the Development Account. THOMAS SCHLESINGER (Austria), speaking on behalf of the European Union, reiterated the Union's view that vacancy rates could be a tool for budget calculations, but should not be used for savings. Paragraph 24 of the Secretary-General's report made it clear that since there was no restriction on recruitment, the rate was a consequence not a cause. There was a need to avoid such rates in the future.
JEAN-PIERRE HALBWACHS, United Nations Controller and Assistant Secretary-General for Programme Planning, Budget and Accounts, advised that written answers would be provided to questions, as requested. On the matter of vacancy rates, he wished to dispel any misunderstanding. The Secretariat did not use vacancy rates as a tool for savings, and the rate was not deliberately high. No restrictions were put on recruitment. The high rate was a consequence of unfortunate circumstances. The Assistant Secretary- General for Human Resources Management, Rafiah Salim, was working to streamline and simplify the recruitment procedures.
Statements on IMIS
Mr. SCHLESINGER (Austria), speaking on behalf of the European Union, Bulgaria, Estonia, Hungary, Lithuania, Poland, Romania, Slovakia, Slovenia,
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Cyprus and Iceland, said the IMIS was crucial to the overall functioning of the United Nations, and he shared the view of the ACABQ and endorsed its recommendations. He was particularly pleased with the way the expert study had been conducted and with its findings.
The Organization had benefited from a system that had been successfully integrated with commercial packages, with a commensurate reduction in development time and costs, he said. More importantly, unlike many other such systems, the IMIS had not failed. The level of investment appeared reasonable for the outcome produced.
He welcomed the implementation of the Board of Auditors' recommendations, notably the revision of the contract of the main contractor and the takeover of maintenance by United Nations staff. He also noted the calendar for implementation of the next phases. Year 2000 compliance was particularly important. A key performance measure for the IMIS should be that there be effective substantive ownership by users. End-users must be responsible for, and involved in, the system according to their needs. The next progress report should provide details of the involvement of end-users.
He was of the opinion that an internally compatible system for all United Nations entities would be cost-effective for all Member States, he said. The Inter-agency Governance Framework outlined by the independent experts would be the key to identifying eventual ownership of the IMIS and the relevant forum for developing the field applications required by some United Nations agencies and programmes. He noted the progress made in implementing
the system away from Headquarters and endorsed the request for additional resources, as endorsed by the ACABQ.
NESTER ODAGA-JALOMAYO (Uganda) asked to be informed of when the report of the independent experts had been introduced to the Fifth Committee. He recalled that the General Assembly resolution that called for the expert report stipulated that it should be submitted to the General Assembly. The Secretary-General had indicated that he was already implementing some recommendations from the report. He asked whether that was in line with the decisions of the General Assembly.
The CHAIRMAN said that he understood the report had been introduced to the Committee on 30 November 1998 by the Under-Secretary-General for Management, Joseph Connor.
TOSHIYUKI NIWA, Assistant Secretary-General for Central Support Services, said that the expert report was to be submitted to the General Assembly, but that since the experts had worked very closely with the Secretariat, and they had made a number of good recommendations which required timely responses, the Secretariat had responded. The recommendations on ownership of the IMIS and on involvement of end-users in development, as well as on making the IMIS a nucleus for the common-service, were pertinent and required urgent attention. The Secretariat had therefore responded informally to them.
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Mr. ODAGA-JALOMAYO (Uganda) said he was not questioning the report, but was raising a matter that was important to the working methods of the Fifth Committee. The report had been requested by the General Assembly and was to be submitted to the General Assembly. Until that happened, it could not be used as a reference document for discussion. Unless that practice was followed, the Committee would gradually move towards abnormal practices.
DULCE BUERGO RODRIGUEZ (Cuba) said she wanted to thank the representative of Uganda for drawing the Committee's attention to an important concern. Recommendations included in the report but not yet presented to the Fifth Committee were being applied informally by the Secretariat without due approval by the General Assembly. Cuba was concerned about that informal practice. It was not the first time that had happened, and she would like to draw attention to the urgent need for the Committee to consider such situations in the context of the working procedures of the Committee.
The CHAIRMAN asked if the Committee wanted a formal introduction of the report.
Mr. ODAGA-JALOMAYO (Uganda) said his intention was to point out something that had not been properly done. The Committee did not have time to revisit the item, but such anomalies should be avoided in the future. The report was not a report of the Secretary-General, but of independent experts. It should not be introduced by a representative of the Secretary-General, but by those experts.
The CHAIRMAN read the resolution's instructions concerning the experts' report to the Committee.
AMJAD SIAL (Pakistan) said that it was not only that some recommendations were being enacted, but that the General Assembly had requested the Secretary-General to submit his tenth progress report taking into account the two other reports.
Statements on Review of Efficiency
TRYGGVE GJESDAL (Norway) said the budget outline for the biennium 2000-2001 was less than satisfactory in several respects: it implied negative real growth and even negative nominal growth; it left unresolved the question of funding of special political missions; it relied on unspecified savings in order to fund existing mandates for the convening of major conferences and special sessions in 2000-2001; and the preliminary indicative estimates revealed no effort to make up for the persistent under-funding of peacekeeping activities, human rights and humanitarian affairs. The General Assembly itself was responsible for at least two of the shortcomings that Norway perceived in the budget outline. The outline document itself was brief, clear and timely. In future, consideration might have to be given to its format, if and when the practice of results-based budgeting was introduced.
He said budgetary discipline was not in and of itself a bad thing. Any savings resulting from improved efficiency and effectiveness should be used to
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strengthen the Organization's priority activities. The goal of reforms, modernization and change of management was not a reduction of the budget, but improving the Organization's responsiveness and augmenting its programme output. Judging from the way the budget outline had been presented this year, however, tight budgetary policies had become a goal in themselves. To mention just one concern over that approach, undercutting the funding of special missions created an impression of nominal savings that had in fact not been achieved, and which might slip away in the course of subsequent recosting exercises.
Preventive diplomacy and peace-making were highly cost-effective activities for the maintenance of international peace and security and deserved the Organization's special attention, he said. The funding of special political missions of a recurring nature had been a cause for considerable concern over the past three years. It was regrettable that no action had been taken on the Secretary-General's proposal at the last session to include projected requirements for special political missions in the budget outline.
He said his delegation had been surprised to see the way the budget outline proposed funding for General Assembly-mandated United Nations conferences and special sessions for 2000-2001. The budget outline suggested that the funding for those activities be obtained by compensating economies. Norway attached great significance to those conferences and special sessions, and believed that their funding -- some $20 million -- should have been secured in the budget outline without recourse to expected savings. In any event, notional savings could not be planned for in the same way as mandated activities.
Norway had on numerous occasions expressed the view that, to the largest extent possible, resource needs at United Nations Headquarters for peacekeeping should not be funded through the regular budget, he said. The level of resources being contemplated in the present outline, however, implied that considerable numbers of staff performing core functions would continue to be funded from the peacekeeping support account. Human rights and humanitarian affairs was another area that merited a larger proportion and a larger amount of regular budget funding, he added. Staffing for the important activities conducted in that area should, to a lesser extent, rely on extra- budgetary resources.
WEN CHIN POWLES (New Zealand), speaking also on behalf of Canada and Australia, said that, for the Secretary-General's proposed budget outline for the biennium 2000-2001 to be a useful planning figure, it needed to be as realistic a forecast as possible. The Secretary-General was proposing an outline of $2,468.5 million as the preliminary estimate for the biennium. The outline, however, did not make any provision for the costs of known special missions which were expected in the next biennium to amount to around $112 million or approximately 4.5 per cent of expenditures.
She said she did not share the view of the Advisory Committee that
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compensating economies of $20 million should not be used in the outline to offset new mandates. That figure, which represented about .8 per cent of expenditures, was well within the range of normal productivity gains that any budget of that size ought to be able to achieve with effective modern management. She added that $20 million in efficiency gains was a modest amount and the Secretary-General could go further. That belief was based on the Advisory Committee report which stated that the quality of an organization would improve if its officials were under pressure to use resources wisely.
At a time when most national budgets were facing serious internal and external constraints, the Organization must also expect to have to adjust its financial settings, she said. The currency crisis affecting many Member States was a compelling reason for the United Nations to continue to live within its means and avoid any departure from current budget levels.
JUDITH CARDOZE (Panama), speaking on behalf of the Rio Group, said that the Group wished to express its complete support for the statement made by Indonesia on behalf of the Group of 77 and China. The budget outline represented the first step in one of the most important negotiations that took place in the Organization. Through the budget process, the political, economic and social mandates found their means of implementation, taking into account the priorities of the medium-term plan. Given the difficult financial circumstances of the Organization, the Group was concerned at the use of peacekeeping resources to pay for regular budget activities. While they were not being reimbursed, the troop- and equipment-contributing countries were unfairly bearing a disproportionate part of the financial burden.
The Rio Group believed the outline should be consistent with General Assembly resolution 41/213, she said. The budget should be adjusted to comply with the medium-term plan, and not vice versa. It would be inappropriate to make capacity to act contingent on budget criteria.
The outline went beyond the provisions of resolution 41/213 since it included $13 million for the Development Account, she said. At present, the Fifth Committee was considering mechanisms to finance that Account. Therefore the General Assembly had not taken a decision on the Account's sustainability. It also included a proposal to increase resources for oversight, but to reduce resources for public information.
The Rio Group believed the current procedure for the financing of special political missions was unsatisfactory, she said. These activities should be resourced after the outline was adopted. In previous bienniums, retaining resources for them had been the subject of intense negotiations.
The Group sought information on the reported potential economies of some $20 million, she said. The outline proposed that those savings be deducted from the final estimates, and not devoted to the Development Account. She would like to know the source of these savings and the areas from which they would come. She also sought information on the financing of the Millennium
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Summit, which was included in the Secretary-General's reform programme, but not included under the budget outline section on major conferences and special sessions for the biennium 2000-2001. While she understood the Summit would coincide with the General Assembly's regular session, preparatory meetings and sessions would probably be required. She asked if they had been included in the outline.
The Group was also concerned about the international economic context in which the outline had been submitted, she said. Exchange rates had varied by large percentages. In addition, interest rates for currencies used most often for investment had declined considerably, which meant that bank interest paid on United Nations deposits would be lower. Such an international climate would make it more difficult to achieve economies derived from exchange rates, which meant that estimates must be looked at with greater care.
THOMAS REPASCH (United States) expressed his Government's appreciation that the overall budget level of $2.469 billion, proposed by the Secretary- General for 2000-2001, was lower than the present level, while providing modest funding increases for priority activities such as development, human rights, humanitarian affairs, and internal oversight. At a time when many Member States, especially developing countries, were facing severe financial difficulties, the Secretary-General was to be commended for keeping the United Nations budget in check, while ensuring the implementation of mandated activities.
It was disappointing, however, that the budget outline failed to include estimated costs for a variety of renewable political missions related to peace and security, he said. In the next budget period, those missions were estimated to cost $112 million. It was inconceivable that a preliminary budget proposal would not include expenditures for one of the Organization's high priority areas. The United States agreed with the Secretary-General that the current approach to budgeting for those missions was unsatisfactory, and it would pursue ways to have them included in the proposed budget. Before taking a position regarding the contingency fund, his Government would consider relevant information from the Secretariat covering the last five years. It would also consider the Advisory Committee's basis for endorsing the Secretary-General's proposed fund.
The United States believed additional expenses could and should be financed through efficiency savings, offsets in the current budget, and reductions from the elimination of marginal or obsolete programmes. The overall level of the budget outline, after inclusion of expected costs for special missions and recosting adjustments, could not be more than the approved $2.532 billion level of the current budget. Major constraints on his Government's national budget would make it impossible to finance increased assessments in the United Nations and other international organizations.
Mr. KUZNETSOV (Russian Federation) recalled that the United Nations Controller, when introducing the Secretary-General's budget outline for 2000-2001, had noted that it contained tentative indicators on preliminary estimates of resources that might be required for the next biennium. His
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delegation supported that approach. The budget outline was a reference for future discussion, he said, and noted the preliminary estimates of resources for 2000-2001 proposed by the Secretary-General.
The outline did not include resources for special political missions not yet mandated, despite the recommendations of the ACABQ and the Secretary- General to include those, he noted. Experience over the last few years illustrated the validity of their recommendation, which his delegation supported.
Regarding the exclusion from the outline of amounts relating to compensating economies, he said he agreed with the views of the ACABQ. It was most appropriate to reflect efficiency savings in the performance report, indicating the line items under which such savings had been achieved. However, it was permissible that the Secretary-General, in the outline, inform the Assembly of his preliminary estimates of resource requirements and his preliminary forecast of compensating economies. He supported the Secretary- General's proposal to maintain the size of the contingency fund at 0.75 per cent of the proposed budget outline. Also, he supported the ACABQ's emphasis on the need to adhere to the provisions of Assembly resolutions on the use of those resources.
CHEN YUE (China) said the United Nations programme budget should be formulated on the basis of the provision of adequate resources for its mandated programmes and activities, as should the proposed programme budget outline. During that process, the financial requirements of the programmes and activities for the biennium should be taken into full account. That should be especially borne in mind as the Committee discussed the Organization's first programme budget outline for the twenty-first century. The proposed amount in the budget outline for 2000-2001 should not be deemed the final figure for that biennium, but instead, should be adjusted in light of the actual cost.
Regarding the question of whether requirements for special political missions should be reflected in the budgetary outline, she said China agreed to consider the Secretary-General's proposal endorsed by the ACABQ, namely that projected requirements should be included in the outline. That approach could ensure that the missions' requirements would be responded to more promptly, and that the outline could become more integrated and transparent. China agreed that the six areas, including maintenance of international peace and security, and promotion of sustained economic growth and sustainable development, as listed in the medium-term plan for the period 1998-2001 and approved by resolution 51/219, remained priorities for the biennium 2000-2001. Resources should be increased for development activities, she added.
HUMAYUN KABIR (Bangladesh) reaffirmed that the outline was only a tentative indication of the level of resources to be allocated to United Nations programmes and activities. Resources should be allocated to fully implement all mandated programmes and activities and the outline should in no way be used to reduce the budget level. However, no budget outline, or budget, could be meaningful unless adequate resources were provided, and
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therefore Member States must fulfil their obligations in that regard.
While his delegation was satisfied to note increases proposed for sections on cooperation for development, it was not comfortable with proposed increases to resources that fell beyond the priorities stipulated in the medium-term plan, he said.
He said the effort to reform the United Nations must be matched by efforts to improve the Organizations' image in the outside world. The Department of Public Information (DPI) was indispensable in that regard. As the United Nations interface with the world, the DPI should be allocated more resources. He supported the views on that matter expressed by Cameroon's representative. As mandated by the General Assembly, the Secretary-General should strengthen the United Nations field offices, particularly the information centres.
His delegation had concerns regarding the proposed economies of $20 million, he said. He concurred with the recommendations of the ACABQ on that matter. Special political missions should be included in the regular budget in order to avoid adversely affecting other areas of the budget. The ACABQ's recommended preliminary estimates should be considered.
Mr. HALBWACHS, United Nations Controller, said that delegations had asked for further information and more detail on "the two $20 millions". Written information would be provided to Committee members during informal consultations, as would information on the use of the contingency fund.
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