PRESS BRIEFING BY UNDER-SECRETARY-GENERAL FOR MANAGEMENT

Press Briefing

PRESS BRIEFING BY UNDER-SECRETARY-GENERAL FOR MANAGEMENT

It had been a happy holiday season in the Secretariat, Under- Secretary-General for Management Joseph Connor told journalists at a press briefing at Headquarters today. Yesterday, the last of a series of major payments from the United States had been received, he said. United States payments now aggregated to more than the minimum amount required for it to avoid losing its vote in the General Assembly next year under the provision of Article 19 of the Charter.

[Charter Article 19 states that a Member State that owes arrears totalling its two previous years' assessment will lose its vote in the General Assembly, unless the Assembly is satisfied that its failure to pay is a consequence of circumstances beyond its control]

This was not the only good news that he could report, Mr. Connor added. As of this morning, 122 Member States had paid their regular assessment, not only for 1999, but also for every preceding year. This compared with 117 at the end of December 1998, and the end of 1999 had not yet been reached. It was a high point in such receipts, and he was glad to have so many Member States fully on board.

In his October briefing on the Organization’s financial situation, he had stated that the United States must pay $350 million between 1 October and 31 December to avoid an Article 19 problem. He had added that if this minimum payment was made, the United Nations at year-end would, for the first time in many years, have a very small positive cash balance.

The United States had paid more than the minimum required to avoid the sanction, he said, and therefore he now expected that the regular cash balance at year-end would be comfortably over the zero line. In his October financial presentation, he had expected a payment of $250 million from the United States for the regular budget but $352 million for the regular budget had been received -- more than $100 million above his estimate. He had estimated a regular budget cash balance at year-end of $2 million, but he now expected it would be about $100 million. However, he had anticipated a peacekeeping payment of some $100 million, but only about $46 million had been received.

From 1 January to 31 December 1999, the United States had paid approximately $726 million, including some credits, he said. This was a substantial amount no matter how it was counted. Two hundred and sixty- five million dollars had been paid before the end of September, and $461 million had been paid since 1 October.

In October, he had forecast a year-end debt to Member States for troops and equipment of some $729 million, he said. It now looked like it would be close to $749 million. Debt to Member States remained

Connor Press Briefing - 2 - 22 December 1999

intractable. The receipt of the second and third year of the Helms- Biden bill (the recently approved United States legislation on staged partial payment of its debt to the United Nations) would significantly contribute to the paying down of debt to Member States.

Mr. Connor said he was encouraged by receipts from Member States and by the higher number of Member States paying in full. He was also encouraged by the regular budget cash balance and by the fact that some debt to Member States had been paid down, even though there was still a long way to go.

Regarding the negotiations on the United Nations programme budget for 2000-2001, he said they were still going on but were nearing conclusion, and it was expected that the United Nations would have a consensus-approved budget by tonight. To say any more would be inappropriate, as determining the level of the budget was the Member States prerogative.

The United States still owed $1.175 billion after this year's payments, he said in response to a question from a journalist. The Helms-Biden legislation provided for a substantial payment but not the eradication of that arrearage. The difference between the two figures was the subject of political negotiations, he explained, adding that the Secretariat just did the bookkeeping.

Responding to another question, he said that about 60 letters warning about the possibility of their falling under the sanctions of Charter Article 19 had been sent to Member States which looked like they might have problems. Historically, about 40 countries had not paid enough to avoid Article 19 sanctions at the start of the year, and, by the year-end, seven or eight remained in that position. This was not a prediction, he added, just a historical account. He had no prediction as to the number that would be subject to the Article's provisions.

The increase in his estimates of the year-end cash balance from $2 million was due to the additional payment by the United States, he said, in response to another question.

There were some "bells and whistles" attached to the $100 million increase and the balance of $110 million his projections now estimated, he added. A couple of major contributors -- notably Brazil -- had not been heard from, but a significant contribution was expected from them by the end of the year. If these did not come in, the actual cash balance would be about $20 million less than the projected amount. There were still some uncertainties.

The United States had contributed less to its peacekeeping arrears than had been originally expected, he said, but some other contributions that had not been anticipated had been received from Member States for peacekeeping. The two cancelled each other out.

Connor Press Briefing - 3 - 22 December 1999

On peacekeeping arrears, the Secretary-General's policy was very clear, he said. When an arrearage payment was received for peacekeeping, irrespective of which Member States it came from, a cheque was written to reduce the United Nations' debt. That was how the debt had been relatively contained.

However, the United Nations had not been able to liquidate that debt, he said. The $749 million could only be paid if three things occurred. First the United States must continue paying its peacekeeping arrears. The major portion of the money referred to in the Helms-Biden legislation was peacekeeping arrears, he added. Second, the Russian Federation, which had reduced its arrears to about $80 million, must continue its payments. Finally, Ukraine, which was managing to hold its own but not to repay its debt, has started to pay that debt down. These were the three sources from which payment of the $749 million owed to Member States could be paid. Until the major contributor paid the bulk of its peacekeeping, Member States could not be fully paid.

Asked about how the "vast daylight" between what the United Nations said it was owed and what Washington said it would pay was accounted for, Mr. Connor said the Helms-Biden legislation included a requirement that payments of United States arrears must be preceded by political changes in the United Nations. The Secretariat could not get involved in political decision-making about these conditions.

They involved not how much was owed, but how much would be accepted, he added. There was nothing wrong with the Secretariat's bookkeeping. The official debt was $1.175 billion. The Helms-Biden bill provided for adjustments to that amount. He could say that the cash, if and when it was received, would pay Member States for peacekeeping. How it got into the United Nations cash register was up to the Member States, he concluded.

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