GENERAL ASSEMBLY WOULD NOTE BUDGET PROPOSAL FOR INTERNATIONAL TRADE CENTRE UNDER TERMS OF DECISION APPROVED BY FIFTH COMMITTEE

13 July 1999

Press Release
GA/AB/3302

GENERAL ASSEMBLY WOULD NOTE BUDGET PROPOSAL FOR INTERNATIONAL TRADE CENTRE UNDER TERMS OF DECISION APPROVED BY FIFTH COMMITTEE

19990713 Committee Also Begins Consideration of Article 19 Exemption Requests

The Fifth Committee (Administrative and Budgetary) this morning approved a draft decision by which the General Assembly would take note of the report of the Secretary-General on the outline of the proposed programme budget for the biennium 2000-2001 for the International Trade Centre UNCTAD/WTO, as well as the observations and recommendations of the Advisory Committee on Administrative and Budgetary Questions (ACABQ) on the matter.

The Chairman of the ACABQ, Conrad S.M. Msele (United Republic of Tanzania), introduced his Committee's report, which recommends that the Assembly should approve an outline estimate in the amount SwF 59,204,600.

The representative of Finland, speaking on behalf of the European Union and associated countries, said that while the Union supported the Secretary- General's proposal to establish an International Trade Centre UNCTAD/WTO budget outline estimate of SwF 59,204,600 for the biennium 2000-2001, the late issuance of the outline was a deviation from the procedure agreed on last fall.

The representative of Guyana, speaking on behalf of the Group of 77 developing countries and China, expressed concern over the delay in the issuance of the budget outline. The proposals for the biennium 2000-2001 were not based on the outline and he hoped that in future the outline would be prepared on time.

Also this morning, the Committee, under its agenda item on the scale of assessments for the apportionment of the expenses of the United Nations, began consideration of the cases of Bosnia and Herzegovina, Comoros, Georgia, Republic of Moldova and Tajikistan, who have requested exemptions under Article 19 of the Charter.

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Article 19 calls for a loss of voting privileges for Member States that fall behind by a certain amount in their assessed contributions, although it also provides for an exemption when the failure to pay is due to conditions beyond the Member State's control. A letter from the Chairman of the Committee on Contributions, containing extracts of the Committee's report pertaining to the concerned countries, indicates that the Committee has recommended exemptions for four of the five Member States, but had not been in a position to consider the request of Georgia.

The representative of Georgia told the Committee this morning that the conflict in Abkhazia created difficulties for his Government, which was forced to reallocate the funds from its budget initially intended for the United Nations to the urgent needs of the refugees and displaced persons from Abkhazia. The situation further deteriorated last year due to a drought, which exacerbated the economic crisis. Georgia was, however, adopting measures to enable it to pay off its bill to the Organization.

Statements were also made this morning by the representatives of the United States, Egypt, Azerbaijan, India, Chile, Mexico, Brazil and Australia.

The Committee will meet again at 3 p.m. today to continue its consideration of the scale of assessments for the apportionment of the expenses of the United Nations.

Committee Work Programme

The Fifth Committee (Administrative and Budgetary) met this morning to consider issues concerning the programme budget for the biennium 1998-1999 and the scale of assessments for the apportionment of the expenses of the United Nations.

The Committee had before it the report of the Secretary-General on the outline of the proposed programme budget for the biennium 2000-2001 for the International Trade Centre UNCTAD/WTO (document A/54/127), containing the budget outline of the International Trade Centre (ITC), with the requirements expressed in Swiss francs.

The report states that the proposed outline represents an increase of 1.4 per cent, in real terms, over the current appropriation. This increase will strengthen ITC activities to enhance the capacity of the business sector in developing countries, particularly the least developed countries, and countries with economies in transition, to better understand and take advantage of the evolving multilateral trading system to avoid further marginalization. Emphasis will be placed on capacity-building in least developed countries in the context of the World Bank/ITC/United Nations Conference on Trade and Development (UNCTAD)/International Monetary Fund (IMF)/World Trade Organization (WTO)/United Nations Development Programme (UNDP) Integrated Framework for Trade-Related Technical Assistance to least developed countries.

The ITC requirements are estimated at SwF 29,516,000 for 2000 and SwF 29,688,600 for 2001, expressed at 2000-2001 rates. It is projected that an amount of SwF 405,000 representing income from various sources, would be available to ITC annually. On this basis, the annual contribution of each organization is estimated at SwF 14,555,500 and SwF 14,641,800 for 2000 and 2001 respectively.

Also before the Committee was the related report of the Advisory Committee on Administrative and Budgetary Questions (ACABQ) (document A/53/7/Add.15), whereby the ACABQ recommends Assembly approval of the amount of SwF 59,204,600 for the outline for the biennium 2000-2001.

Concerning the scale of assessments, the Committee had before it a letter from the President of the General Assembly to the Fifth Committee's Chairman (document A/C.5/53/64) transmitting a letter from the Chairman of the Committee on Contributions, in which he refers to the requests for exemptions under Article 19 of the Charter from Bosnia and Herzegovina, Comoros, Georgia, Republic of Moldova and Tajikistan. The appendix to the letter from the Chairman of the Committee on Contributions contains the sections of the Committee's report on its fifty-ninth session that deal with these questions.

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The Committee on Contributions recommends to the Assembly that: Bosnia and Herzegovina and Tajikistan be permitted to vote until 30 June 2000, in the expectation that this would be the final extension of this exemption under Article 19; the Comoros be permitted to vote until 30 June 2000; and the Republic of Moldova be permitted to vote until 31 December 1999, in line with its request. In view of the late receipt of Georgia's communication, the Committee was not in a position to consider its request.

Also before the Committee was a letter dated 12 July from the Acting President of the Assembly addressed to the Chairman of the Fifth Committee (document A/C.5/53/65), transmitting a letter from the Permanent Representative of Georgia containing a request, under Article 19, on the subject of his country's arrears. He request the Fifth Committee to discuss the possibility of granting Georgia the right to vote in the Assembly during the fifty-fourth session.

International Trade Centre

CONRAD S.M. MSELLE (United Republic of Tanzania), Chairman of the ACABQ, introduced the report of the Committee (document A/53/7/Add.15). He said the outline had been submitted according to General Assembly resolution 53/411B of 18 December 1998. That resolution endorsed the recommendation of the ACABQ on the procedure of submission for the outline for the International Trade Centre. The ACABQ recommended that the Assembly should approve an outline estimate in the amount SwF 59,204,600. In paragraph 5 of its report, the ACABQ expected that submission to be fully in conformity with procedure set out in the report.

JARMA SAREVA (Finland), spoke on behalf of the European Union and the associated countries of Bulgaria, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia, Slovenia, Cyprus, Malta, Iceland and Norway.

He said the Union wished to express support for the Secretary-General's proposal to establish an International Trade Centre UNCTAD/WTO budget outline estimate of SwF 59,204,600 for the biennium 2000-2001, as also recommended by the ACABQ. At the same time, the Union shared the observation of the ACABQ that the late issuance of the outline was a deviation from the procedure agreed upon last fall. He trusted that in the future that procedure would be properly followed.

GARFIELD BARNWELL (Guyana), on behalf of the "Group of 77" developing countries and China, noted with concern the delay in the issuance of the budget outline. The proposals for the biennium 2000-2001 were not based on the outline. He hoped that in future the outline would be prepared on time. The WTO Committee had expressed the wish that the programme and budget documents should be presented to reflect an administration section and a

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programmatic section. The budget should be prepared in accordance with the relevant regulations, rules and procedures, since the ITC was part of those regulations.

THOMAS REPASCH (United States) said that overall the outline lacked transparency. He questioned the 1.4 per cent increase in real terms, and noted that the reference to the average rate of growth was formulistic. The detailed submission of the 2000-2001 budget should include the budgets of individual organizational units. The United States shared ACABQ concerns over the late submission of the outline. His country was not in a position to support the outline as proposed.

AHMED DARWISH (Egypt) wanted clarification on paragraph 8 of the Secretary-General's report (document A/54/127). That paragraph referred to a projected amount of SwF 405,000. What was the source of that figure?

Responding to that question, ALI KHAMIS, Secretary of the Budget Division, said the income referred to in paragraph 8 of the report of the Secretary-General was revenue generated from publications sold.

The Committee's Chairman, MOVSES ABELIAN (Armenia), proposed a draft decision before the Committee. By the terms of the draft, the Committee would recommend to the Assembly that it take note of the report of the Secretary- General on the outline of the proposed programme budget for the biennium 2000- 2001 for the ITC UNCTAD/WTO (document A/54/127) and concur with the observations and recommendations of the ACABQ contained thereon (document A/53/7/Add.15).

Mr. REPASCH (United States) said that he wondered what effect "takes note of the report" would actually have. His delegation was not in a position to approve the proposed draft decision or the ACABQ's recommendation.

The CHAIRMAN said that the Committee would be taking note of the recommendation of the ACABQ and concurring with it. It would be finally up to the General Assembly to approve or not approve the amount.

Mr. MSELLE (United Republic of Tanzania), Chairman of the ACABQ, said that it was important for the Assembly to take action on the outline. If it would be of assistance to the representative of the United States, perhaps the phrase "subject to the views expressed by Member States" could be included in the Committee's draft decision.

Mr. REPASCH (United States) said that he appreciated that proposal, but was not sure what effect that would have. He was not prepared to go along with the proposal for the same issues he had with the budget outline for last year.

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The CHAIRMAN of the Committee proposed that rather than adopt the original decision, the draft could recommend to the Assembly that it simply take note of the report of the Secretary-General and the ACABQ. The word "concur" would be deleted.

The Committee then adopted the following draft decision, as amended: The Fifth Committee recommends to the General Assembly that it take note of the report of the Secretary-General on the outline of the proposed programme budget for the biennium 2000-2001 for the ITC UNCTAD/WTO (document A/54/127) and the observations and recommendations of the ACABQ contained thereon in document A/53/7/Add.15.

Scale of Assessments

Mr. SAREVA (Finland), spoke on behalf of the European Union, Bulgaria, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia, Slovenia, Cyprus, Malta, Iceland and Norway. The Union had consistently advocated a most stringent application of Article 19, which provided the sole effective disincentive to prompt Member States to pay their assessed contributions in full, on time and without conditions. The Union commended the efforts of several countries concerned to make payments to reduce their arrears, with a view to eventually bringing them to a point below the minimum necessary to avoid application of Article 19. It also commended other Member States that had been able to reduce their arrears below the said minimum during the first half of this year, many despite severe economic and fiscal hardships.

The Union agreed with the recommendation of the Committee on Contributions regarding granting exemptions under Article 19 to four Member States, he said. At the same time, it agreed with the Committee that exemptions must be regarded as a strictly exceptional measure for circumstances where the failure to pay was due to conditions beyond the control of the Member. The Union remained strongly committed to its position that the Assembly must adhere to the procedure laid down in rule 160 of the rules of procedure concerning advice from the Committee on Contributions.

GUEORGUI Z. VOLSKI (Georgia) said that, unfortunately, his country's letter dated 8 July was issued only today. In the first year of Georgia's independence, despite the difficulties, it was able to cope with its financial obligations to the Organization. However, the conflict in Abkhazia created difficulties for the Government, which was forced to reallocate the funds from its budget initially intended for the United Nations to the urgent needs of the refugees and displaced persons from Abkhazia. The situation further deteriorated last year, due to a drought, which led to a rise in food prices.

The Government was adopting measures to enable it to pay off its bill to the Organization, he said. The letter from the Chairman of the Committee on

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Contributions stated that some members of the Committee on Contributions said that the Committee did not have enough time to consider Georgia's request and, therefore, it had not been considered. Georgia would like a positive solution to the problem.

FIKRET MAMEDALI PASHAYEV (Azerbaijan) said that he supported Georgia's position. Some members of the Committee on Contributions stated that Georgia's application had been submitted on time and, while there had been enough time to consider it, the final decision was not to consider it. It had been necessary for Georgia to reallocate funds to address the needs of refugees. Also, it was a country in transition and faced an economic crisis. Seeing that the Government was going to take the necessary steps to fulfil their financial obligations, he supported Georgia's request.

RAJAT SAHA (India) said that Georgia's letter of 8 July was explicit and showed that the conditions that prevented Georgia from fulfilling its obligations were beyond its control. He could go along with Georgia's request.

ALVARO JARA (Chile) said that he wanted to express his solidarity with the situation described by Georgia.

ERNESTO HERRERA (Mexico) said that the question of contributions to the United Nations was a delicate one. He believed that the participation of all Member States in the expenses of the Organization was very important. He viewed with sympathy the cases dealt with by the Committee on Contributions, including Georgia. His attention was drawn to the fact that Georgia wished to make some contribution in August. That kind of effort was always important, despite the situation in those countries. The implementation of Article 19 was very important to Mexico. Such issues should be resolved with the greatest agreement of all those concerned.

PEDRO PAULO D'ESCRAGNOLLE-TAUNAY (Brazil) said that he joined others in expressing support for the request by Georgia. He saw no reason not to accept the fact that if its payments had not been made in time, that was due to conditions beyond its control.

MILES ARMITAGE (Australia) said that he had taken note of the recommendation of the Committee on Contributions and was happy to go along with their recommendations for the four countries. He continued to believe that requests for exemption to Article 19 should first be considered by that Committee, which had been created for such purposes, without prejudices to the cases presented by the countries. The Assembly had the authority, under the Charter. If Article 19 was to have any meaning, it must insist on timely payment on assessed contributions. In such cases, the Committee on Contributions must first examine the request, before the Fifth Committee could

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make a decision. Australia was ready and willing to approve the recommendations of the Committee on Contributions.

Mr. SAREVA said the European Union held rule 160 of the rules of procedure in very high esteem. That position had nothing to do with making judgements on the capacity of Georgia to pay. As mentioned by the delegate of Australia, earlier, the consensus achieved last fall reflected a delicate balance of opinion and took place after long and arduous negotiations. "The Union feels that we should stick to the consensus of last fall", he added.

Mr. REPASCH said last year the General Assembly reaffirmed the applicability of rule 160 and that rule should be respected. The deadline for payments was well publicized and many other countries had no problems with their payments. The position of the United States was technical -- no country should be exempted. However, his delegation was prepared to go along with whatever consensus would emerge today.

AMJAD HUSSAIN SIAL (Pakistan) said his country supported the request made by Georgia for the simple reason that information given in the letter dated 1 July 1999 from the President of the General Assembly to the Chairman of the Fifth Committee (document A/C.5/53/64) was not accurate. Article 19 of the Charter was still applicable.

The CHAIRMAN of the Fifth Committee, on a point of clarification, said the letter from Georgia was sent on 8 July, but had been held in the Office of the President of the Assembly.

OLEKSH HOLUBOV (Ukraine) said his delegation supported the request made by Georgia. That country was going through a most difficult period. A continuing civil conflict was striking a severe blow to the economy and some areas were not under the control of the central Government. How could a country in such a situation be expected to fully comply with its obligations to the United Nations? Georgia's failure to pay was beyond its control.

DULCE MARIA BUERGO RODRIGUEZ (Cuba) said her delegation wanted to make a general comment with regard to the observations made today. Some of those observations were selective in their interpretation of the resolution adopted last year on the application of Article 19 of the Charter. The consensus on that resolution had been very delicate. However, it had precisely and in a very clear manner defined the role of the General Assembly and the Committee on Contributions. Cuba supported the recommendations of the Committee on Contributions with respect to Bosnia and Herzegovina, Republic of Moldova, Tajikistan and the Comoros. It also supported Georgia's request.

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