SECRETARY-GENERAL STRESSES NEED FOR UNITY OF PURPOSE, COHERENT EFFORT, AND GREATER AGILITY, IN ADDRESS TO FIFTH COMMITTEE

Press Release
SG/SM/7160
GA/AB/3311

SECRETARY-GENERAL STRESSES NEED FOR UNITY OF PURPOSE, COHERENT EFFORT, AND GREATER AGILITY, IN ADDRESS TO FIFTH COMMITTEE

Following is the statement by Secretary-General Kofi Annan to the Fifth Committee (Administrative and Budgetary) today, 5 October, as the Committee considered improving the financial situation of the United Nations:

Madame Chairman, I would like to take this opportunity to congratulate you and the Bureau of the Fifth Committee on their election, and to wish you all the best in tackling a complex and controversial slate of issues.

This Committee is central to the administrative, financial and institutional health of this Organization. The Secretariat depends on you to provide the practical basis and the resources that enable our United Nations to carry out its vital work around the world. When there are concerns about our progress, about our priorities, about meeting peoples' expectations, this Committee has a key voice in addressing those concerns and setting the Organization on an effective course. Today, I have some such concerns that I wish to share with you.

In 1997, we embarked together upon a major programme of reorganization and revitalization aimed at transforming the United Nations: its leadership, its structures and its performance. From top to bottom, our aim was nothing less than to bring the Organization greater unity of purpose, greater coherence of efforts, and greater agility and flexibility in responding to an increasingly dynamic and complex world.

We have come a long way together. Nearly three years later, it is fair to say that we have made good and determined progress. Coordination among our far-flung entities has improved. Cabinet-style management is now the norm. Budget and staff have been subjected to new and rigorous discipline. We have a Deputy Secretary-General, a Development Group and a system of Development Assistance Frameworks that we did not have before and which are leaving positive, lasting imprints on our Organization. I remain firmly committed to this course of action. The search for excellence is an ongoing struggle.

- 2 - Press Release SG/SM/7160 GA/AB/3311 5 October 1999

But it is equally fair to say that we have a long way to go before we can pronounce ourselves satisfied. The transformation of our United Nations has yet to attack what I see as an overly burdensome and overly intrusive approach to administration; it has yet to give us the necessary flexibility with which to respond to new and urgent challenges; and it has yet to put us on firm financial footing. These concerns should be the next frontier of fundamental change at the Organization.

Whether we are talking about finance, human resources or delivery of mandated programmes, we are over-administrated. There are too many rules and too many steps. Too many things that should be simple are needlessly complex. Too many things that should happen quickly occur with painful sluggishness. For an Organization that must respond regularly to crisis, this is a sure path to frustration, failure and irrelevance.

Some of this over-administration can be attributed to the Secretariat, which means that at least some of it is within my power to fix. We are trying our best to do so. The recruitment process, for example, still takes too long, but it is getting shorter and simpler.

But some of the over-administration stems from a plethora of resolutions and responsibilities handed down by the Member States over the years, layer upon layer. We need to become a more results-based Organization, measuring our success not by fulfilling endless administrative requirements, but by responding effectively to real problems and the needs of real people.

That is why I have proposed that there be time limits or, if you wish, "sunset provisions" for initiatives involving new organizational structures or major commitments of funds. And it is why I have proposed a shift to results-based budgeting.

Let me stress that the focus on results is not merely a budget exercise. It is one of many tools designed to create a United Nations that can focus on the services we deliver to the Member States. Greater clarity about the results and performance that are expected of us would also make it easier to define the respective responsibilities of the Member States and the Secretariat.

The Secretariat respects the right of the General Assembly and the Fifth Committee to legislate. I ask only that you, in turn, respect the Secretariat's responsibility to administer and manage the Organization. Managers must be able to manage. Make no mistake: the Secretariat will always do everything possible to implement the mandate entrusted to us. We want to be held accountable. But just as important, we are eager to perform at our unencumbered best.

- 3 - Press Release SG/SM/7160 GA/AB/3311 5 October 1999

Along with a surplus of rules, there is a severe deficit in what I would refer to as a "surge capacity" -- the financial and operational flexibility to respond promptly and effectively to new challenges. We had Under-Secretary-General Connor speak eloquently about that a moment ago. Who would have thought that, in the past year alone, the United Nations would undertake new operations in Kosovo and East Timor and be on the verge of new missions in Sierra Leone and the Democratic Republic of the Congo? No one knows what the year ahead holds in store, but we must be prepared. Ad hoc solutions will not do; capacity and flexibility must be built in to the way we operate.

At the moment, however, it is not, as we saw in the case of financing for the Kosovo operation. We asked for an initial appropriation of $200 million for the operation; the Assembly authorized $125 million; to date we have received just $35 million. This has meant an unfortunate slow start in financing a high-profile, high-stakes mission. We must be able to do better, especially since the early days are so critical in establishing the tone of, and confidence in, an operation.

Part of the answer lies in giving the United Nations adequate reserve provisions through the Working Capital Fund and the Peacekeeping Reserve Fund. At the moment, the former is effectively depleted and the latter is underfunded. I would hope that the General Assembly would now consider ways in which the levels and cash resources of these funds could be raised to more fully handle the contingencies for which they were created.

The answer is also linked to the question of gratis personnel. The decision to phase out such personnel was taken for good reasons. I would hope, however, that alternative solutions will give us the very useful hiring flexibility that those arrangements provided.

Mention of the reserve funds brings me, inevitably, to the even larger question of financing the Organization, in general. Even with streamlined structures and mechanisms; even with simpler ways of carrying out our work; even with an improved "surge capacity"; without the necessary funding, the United Nations will be forever handicapped in its ability to fulfil the mandates entrusted to it by the Member States.

I said in 1997 that our success in strengthening the United Nations would depend to no small extent on a change in attitude on the part of the Member States. Today, for all the fine words of affirmation we have heard, and for all the new tasks the Member States have given us, the bottom line has been neglected, and woefully so.

At the end of December 1996, unpaid peacekeeping and regular budget assessments stood at $2.15 billion. It has remained more or

- 4 - Press Release SG/SM/7160 GA/AB/3311 5 October 1999

less at that level since then and will likely be there at the end of this year, too.

Although more Member States have paid their assessments, that good news is overshadowed by the fact that overall arrears -- the funds owed to the Organization -- are greater than the year's assessments for the first time in as long as I can recall.

Under these circumstances, we cannot rationally manage the United Nations. We cannot meet our obligations to Member States that volunteer personnel for peacekeeping operations, which run into the hundreds of millions of dollars. This is an unacceptable burden on countries, often developing nations, that have demonstrated their commitment to the United Nations by committing their personnel to difficult and dangerous operations throughout the world.

The only solution, quite simply, is that all Member States must honour their legal and moral obligations under the Charter and pay their dues in full, on time and without conditions. In the meantime, I would ask the General Assembly to consider temporarily suspending the provisions of the financial regulations requiring the return of surpluses to the Member States. Though by no means answer to our problems, this step would help to improve our chronic cash shortage.

Ladies and Gentlemen,

The international community continues to turn to the United Nations for our unique services. The world public opinion continue to place faith in us as an agent of peace and progress. All of us want a United Nations that works -- for peace, for development, for human rights and more. I believe that such a United Nations is well within our capacity. But to reach the goals we share, there needs to be a better way of doing business in this house.

My millennium wish to you is that we find that better way -- past the serious obstacles in our path, to a more effective Organization, a more responsive Organization, a United Nations that is the best it can be. Thank you.

* *** *