ASSEMBLY’S BUDGET COMMITTEE, REVIEWING ARREARS IN UN DUES PAYMENTS, GRANTS VOTING RIGHTS TO BURUNDI, COMOROS, GEORGIA, MOLDOVA

Resumed Fifty-fifth General Assembly

Fifth Committee

69^th Meeting* (AM)

ASSEMBLY’S BUDGET COMMITTEE, REVIEWING ARREARS IN UN DUES PAYMENTS,

GRANTS VOTING RIGHTS TO BURUNDI, COMOROS, GEORGIA, MOLDOVA

Preparations in Next Year’s International Conference

On Financing for Development Said to Need Extra $295,000

The Fifth Committee (Administrative and Budgetary) this morning approved two draft decisions on matters requiring attention by the General Assembly:  one concerned the International Conference on Financing for Development (Mexico, March 2002); while the other addressed the Assembly voting rights by countries in arrears in their payments to the Organization.

First, the Committee considered the programme budget implications of draft resolution A/55/L.82 on “preparations for the substantive preparatory process and the International Conference on Financing for Development”.

Following a lively discussion, the Committee decided to inform the Assembly that adoption of that text would lead to additional requirements of $295,100 related to activities of the last months of the preparatory process for the Conference.  That amount would be subject to the procedures for the use and operation of the contingency fund for the biennium 2002-2003 and in the context of the consideration of the proposed programme budget for that biennium.

A statement on the matter by the Secretary-General was presented by the Chairman of the Advisory Committee on Administrative and Budgetary Questions (ACABQ), Conrad S.M. Mselle.  Many questions were raised on the procedure to be followed in the appropriation of the funds and the amount needed to provide adequate services for the event.

The representatives of Syria, United States, Belgium (on behalf of the European Union), India, Canada, Japan, Pakistan, Russian Federation, Iran (on behalf of the “Group of 77” developing countries and China), United Republic of Tanzania and Namibia all made interventions.

Mr. Mselle, Leon Hosang of the Budget Division, and Nichil Seth of the Office of the Under-Secretary-General of the Department of Economic and Social Affairs, responded to numerous questions from the floor.

(page 1a follows

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*     In Press Release GA/AB/3449 dated 25 May, afternoon meeting should have been

numbered 68^th Meeting.

As the Committee turned to the requests for exemptions under Article 19 of the Charter –- relating to voting rights of countries in arrears with their assessed contributions -- Burundi’s representative pleaded for an exception, taking into consideration the special difficulties that his country was currently experiencing.  Despite the fact that Burundi was one of the poorest nations in the world, in the throes of a civil war, it had still managed to make its payments to the regular and peacekeeping budgets.  The transfer of money, however, had taken some time, and, in the final analysis, the amount had depreciated due to the instability of Burundi’s national currency.

[According to Article 19, should a Member State fall behind in the payment of its dues by an amount equal to its assessments for the two most recent years, it will lose its right to vote in the General Assembly, unless the Assembly decides that non-payment is a consequence of factors beyond a State's control.]

Following consideration by the Committee on Contributions, that body made a recommendation to grant exemptions to the Comoros, Georgia and the Republic of Moldova and allow them to vote until 30 June 2002.  As Burundi had not presented its request within the prescribed timeframe, the Committee on Contributions took no action on that country’s request.

The representatives of India, Syria, China, Uganda, Japan, Belgium (on behalf of the European Union), Pakistan, Canada (on behalf of Australia and New Zealand), United Republic of Tanzania, Guyana, Mexico, Cuba, Bulgaria and Kenya all endorsed Burundi’s request for exemption under Article 19 of the Charter, and supported the request for exemption by Comoros, Georgia and the Republic of Moldova.  The Committee decided to permit all four countries to vote in the Assembly until 30 June 2002.

The Committee will meet again at a date and time to be announced in the Journal.

Background

This morning, the Fifth Committee (Administrative and Budgetary) was expected to consider programme budget implications of draft resolution A/55/L.82 on the preparations for the International Conference on Financing for Development, and take up four requests for exemptions from sanctions under Article 19 of the Charter.

By a letter dated 5 July addressed to the Chairman of the Fifth Committee (document A/C.5/55/44), the President of the General Assembly transmits a letter from the Chairman of the Committee on Contributions regarding requests for exemption under Article 19 of the Charter of the United Nations from Burundi, Comoros, Georgia and the Republic of Moldova.

[Article 19 of the United Nations Charter establishes that, should a Member State fall behind in the payment of its dues by an amount equal to its assessments for two most recent years, it will lose its right to vote in the General Assembly, unless the Assembly decides that non-payment is a consequence of factors beyond a State's control.]

According to the document, requests for exemption under Article 19 must be submitted by Member States to the President of the General Assembly at least two weeks before the session of the Committee so as to ensure a complete review of the requests.  This year, three such requests were received by the required date of

25 May (Comoros, Georgia and the Republic of Moldova) -– and one (Burundi) subsequently.  By comparison, in 2000, the Committee considered requests from seven Member States and, in 1999 -- eleven.

The Committee noted that two of the Member States requesting exemption under Article 19 had presented multi-year payment plans for the payment of their arrears and that the representative of a third had indicated that the possibility of presenting such a plan would be considered by his Government.

Speaking about the Comoros, the Committee on Contributions notes the devastating social, political and economic impact of a four-year long separatist crisis in one of the four islands of the Comoros, Anjouan, which destroyed the country’s fragile economy and forced hundreds of Comorian citizens to flee to Grand Comore and Moheli.  On 17 February 2001, with assistance from the Organization of African Unity (OAU) and other interested parties, the Government of the Comoros and the separatist movement signed an agreement to end the crisis.

The parties have agreed on the creation of a new Comorian entity, and a special commission was established to implement the agreement.  The Secretary-General of the United Nations has expressed support for the process, including the possibility of assistance for the forthcoming elections. Despite the difficulties, as a symbol of its commitment to the United Nations, the Government of Comoros had recently made a payment of over $68,000.  The new Government of the Comoros has also indicated that it would consider the possibility of presenting a schedule for the payment of its arrears to the United Nations.

The Committee further noted the serious problems facing Georgia, which include the internal conflict, energy shortages and the effects of drought and the economic crisis in Russia.  It also noted Georgia’s payment of $300,000 in May 2001 and welcomed its commitment to the steady reduction of its arrears to the United Nations.  In this connection, it noted Georgia’s proposed schedule of payments to eliminate its arrears by 2007.  It was informed that Georgia would keep the schedule under review and would increase its payments if this became possible.  The Committee encouraged Georgia to do so.

Regarding the case of the Republic of Moldova, the Committee on Contributions noted the continuing serious problems faced by that country, which had the lowest per capita gross domestic product (GDP) in the region.  About

60 per cent of the population had an income of less than $2 per day.  It also noted the country’s high level of debt (over 120 per cent of GDP), and the recent downgrading of its international credit rating.  The Committee welcomed the Republic of Moldova’s commitment to the elimination of its arrears to the United Nations and noted its proposed schedule of payments.  The Committee noted that payments totalling just over $160,000 had been received by June 2001.

Having considered the requests by those three countries, the Committee on Contributions recommended that the Comoros, Georgia and the Republic of Moldova be permitted to vote until 30 June 2002.   As Burundi had not presented its request within the prescribed timeframe, the Committee decided to take no action on that country's request.

Under the Agenda item on the programme budget for the biennium 2000-2001, the Committee was expected to consider programme budget implications of draft resolution A/55/L.82.  The Secretary-General's statement on the matter is contained in document A/C.5/55/45, according to which the adoption of the draft by the General Assembly would necessitate appropriation of additional resources estimated at $295,100 for the biennium 2002-2003, to be charged to the contingency fund.

By its draft resolution A/55/L.82, the General Assembly would request the Secretary-General to continue to provide the preparatory process and the International Conference on Financing for Development with all needed support, including a secretariat commensurate with the level of the event and adequate staff and other resources.  The draft also provides for the launching of a global public-awareness campaign with support from public/private partnerships. 

The document states that should the Assembly adopt the draft resolution, it is the intention of the Secretary-General to continue implementation of the activities in 2001 to the maximum extent possible, within the resources available under the approved provisions of the regular programme budget for the biennium 2000-2001.  The Secretary-General would report on how requirements have been met in the context of the second programme budget performance report for the biennium 2000-2001.

The General Assembly, by its resolution 54/196, decided to convene in 2001 a high-level intergovernmental event at the ministerial level on financing for development.  Subsequently, in its resolution 55/245, the Assembly decided that the event would take the form of an international conference, under the auspices of the United Nations, at the highest political level, including at the summit level.  It also accepted the offer of Mexico to host the event in March 2002. 

Also according to the Secretary-General's statement, the decisions concerning the extension of the preparatory process of the conference were adopted by the General Assembly only in March 2001.  As a result, the activities to be implemented in 2002 and the related resources have not been provided for in the proposed programme budget for the biennium 2002-2003.  For the most part, the operating costs of the Secretariat are met from existing regular budget resources approved for the Department of Economic and Social Affairs, with the balance drawn from the trust fund established to support the Conference and its Preparatory Committee.  The United Nations Conference on Trade and Development (UNCTAD) has contributed to the preparatory process by holding seminars and undertaking technical work.

Concerning regional arrangements, the five regional commissions, in cooperation with other United Nations bodies, regional development banks and financial institutions, have held a number of high-level regional meetings.  They are also expected to hold consultative meetings in their respective regions from within existing resources in the biennium 2000-2001.  The regional commissions would jointly hold an interregional meeting of eminent experts in January 2002, and UNCTAD would organize a seminar, also in January 2002, on market access.

Preparations for Substantive Preparatory Process and International

Conference on Financing for Development

Presenting an oral report on the Secretary-General’s statement on the matter, CONRAD S.M. MSELLE, Chairman of the Advisory Committee on Administrative and Budgetary Questions (ACABQ), said the statement covered requirements for two biennia:  2000-2001 and 2002-2003.  He went on to summarize the activities to be carried out in 2001 and 2002 and their related costs, as contained in document A/C.5/55/45.  Should there be additional requirements, the figures presented in the document would be examined in the context of the second budget performance report for 2000-2001.  Additional expenditures over and above those required for holding the Conference would be borne by the host Government.  The Advisory Committee agreed with the Secretary-General’s proposals. 

To clarify the procedure, he added that the amount of $295,100 was not an expenditure estimate for this year.  Therefore, it would be charged to the contingency fund for the next biennium, which started 1 January 2002.  The Assembly had already approved the contingency fund for that period in its resolution 55/233, by which it approved an amount of $18.9 million.

ABDOU AL-MOULA NAKKARI (Syria) said he understood the extraordinary nature of today’s meeting, but he hoped the report of the ACABQ would be presented in writing and that in the future the Committee would take into account the need to present reports in writing and translated into all official languages.

As for the report itself, his delegation had a comment on paragraph 12 of the Secretary-General’s statement.  He wondered why it was necessary to adopt the additional amount of $295,100 and charge it to the contingency fund, if the amounts were required for the period 2000-2001.  Why not take up that amount next year, for the exercise was not yet completed?  He also referred to the statement in paragraph 3 of the document before the Committee that, to the maximum extent possible, it was the intention of the Secretary-General to continue implementation of the activities in 2002 within the limit of resources available under the regular budget for 2000-2001.  He wondered if such an approach would have a negative impact of the activities related to the Conference.  Paragraph 4 of the document indicated that the cost of conference services was $1,087,700 and that the activities under that section would be carried out within the existing resources within the budget for 2000-2001.  Would all conference services be covered or not?  Meetings for 10 days were projected in 2002 -– would those expenses be covered?

BERYL BENTLEY-ANDERSON (United States) noted paragraphs 4 and 5 of the document stating that no additional requirements would be needed under the current budget and that the report on how the requirements had been met would be reported in the context of the second performance report for the current biennium.  However, she opposed the section of the document on programme budget implications calling for $295,100 to be charged to the contingency fund for 2002.  That requirement should be withdrawn, and the cost absorbed in the budget request for 2002-2003.  The amount could be spread over eight budget sections, including, for example, those on social and economic affairs and UNCTAD.  Given the proposed allocations, there was no sense to use the contingency fund, when the required amount could be easily absorbed in the regular budget.

DIRK LEWYLLIE (Belgium) said that he understood the explanations provided by Mr. Mselle, but he wondered why no amendments were being proposed to the 2002-2003 budget.

A.V.S. RAMESH CHANDRA (India) said he understood the proposal before the Fifth Committee was completely in line with programme planning and budgetary procedures of the United Nations.  His delegation wanted reassurance that that  was the case and that paragraph 12 should be approved.

JOHN ORR (Canada) said it seemed illogical, even though it followed United Nations procedure, to add to a budget that had not been seen or even approved. Although his delegation supported the Conference on Financing for Development and its aims, how could more money be added to a budget section which had not yet been seen? Surely, that was putting the cart before the horse. Would it be procedurally correct to take note of the programme budget implication (PBI) and instead of referring to a specific amount, saying something like additional requirements would be dealt with when the Assembly reviewed the 2002-2003 budget?

ARATA FUJII (Japan) said his country had always supported the Conference.  He asked for clarification on the specifics of a proposal by UNCTAD to hold a conference in January on market access.  He wanted to know what was the relationship between the PBI and the substance of the preparatory process. He hoped the PBI would not interfere with substance of what would be discussed.

AIZAZ AHMAD CHAUDHRY (Pakistan) said there was a growing tendency to oppose any resort to a contingency fund, even if the contingency was technically and procedurally correct.  That should not be case.  The mere fact that this meeting was not a regular session, but a contingency session said a lot.  Those involved with the preparatory process knew the momentum that had been picked up and also knew that many stages of the preparatory process had not been envisaged before. The Second Committee had also laid down a whole set of requirements.

He said a serious attempt was, therefore, being made to meet additional costs within the existing budget.  Technical procedures and the substantive thrust of the initiative should be followed.  That dictated that the request for contingency funds should be approved.  Since some delegations, however, did not agree, a way of approval should be found at this stage and the issue revisited later.  There should be no opposition to requests to draw on the contingency fund.

VLADIMIR IOSSIFOV (Russian Federation) said that his delegation shared the principles of the preparatory process and supported the Conference.  However, he did have some questions regarding paragraph 11 of the PBI statement, which said that an amount of about $900,000 would be required for conference services in 2002.  The Fifth Committee had already discussed the implications for the programme budget for the next two years, including the submissions for conference services under section 2 of the budget.  Now, there was talk about additional resources.  Had the estimates submitted by the Secretariat been included in the approved amount or would they be added to it?

The Committee’s Chairman, GERT ROSENTHAL (Guatemala), said that the debate on the matter was unexpected.  He was sure delegates did not object to considering the PBIs of the draft resolution on the Conference on Financing for Development, and said that the questions referred mainly to the procedure to be followed in that respect.

Responding to the questions from the floor, Mr. MSELLE said that the amount required for conference services was to be considered under section 2 of the budget.  The Secretary-General had indicated that the amount would be covered by the resources allocated to the calendar for conferences.  At present, there was no request for additional resources under that section. 

He went on to say that the contingency fund had been established by resolution 41/213, and the resolutions that followed set up its operation.  Under the determined procedure, after the Secretary-General had proposed his budget and submitted it for review, decisions of intergovernmental bodies with programme budget implications that were not covered in the submitted proposal, would be subject to the operation of the contingency fund.  By April, the Secretary-General had already prepared his proposals for 2002-2003. It was not possible to determine what exactly would be required to implement draft resolution A/55/L.82.  Therefore, in considering the item at this stage, it was proper to follow the existing rules.

The rules of procedure for the General Assembly required that any resolution with budgetary implications would be adopted only after advice from the Fifth Committee (Administrative and Budgetary), he continued.  That was exactly what was done now.  The Assembly could not wait till September to adopt the draft on the preparatory process and the Conference.  The representative of Belgium had correctly asked why the proposals of the Secretary-General were not being modified for 2002-2003.  Any modifications would be done at the fifty-sixth session.  The proposal considered today would be part of a consolidated statement to be submitted this autumn, which would contain all other PBIs to be charged to the contingency fund.  Then the Assembly would decide what exactly it wanted to do. 

He noted that the adoption of the draft resolution in question would give rise to additional requirements (not expenditure) of $295,100, which would be subject to the procedure of the use and operation of the contingency fund for 2002-2003.  The amount was not to be appropriated now.  Therefore, the language used in the report covered concerns about approving the budget for 2002-2003 when the proposal of the Secretary-General had not been reviewed.  The Committee was being made aware of the amount, which would be handled in accordance with the established procedure for the contingency fund. 

As for the question by the representative of Syria about the submission of an oral report, he said that it was not the first time the issue had been raised.  The practice of submitting some reports orally was well established in the Fifth Committee.  Later, today’s report would be published as an official document, containing other oral reports, as well.

LEON HOSANG, of the Budget Division, addressed the question by the representative of Syria regarding conference services costs for 2001.  The document was saying that for that year the cost of conference services would be absorbed in budgeted resources.  Should an additional amount be required, it would be shown in the second performance report for the current biennium.

Speaking on behalf of the “Group of 77” developing countries and China, SEYED MORTEZA MIRMOHAMMAD (Iran) said that today’s debate was unexpected, since, procedurally, a very correct path had been taken.  The Assembly was to adopt a resolution with PBIs prepared by the Secretary-General.  It had been correctly presented by the ACABQ.  The comments by Mr. Mselle were exactly in line with current procedures, which had been adopted by the Member States themselves.  It was necessary to respect the rules.  The Group of 77 and China fully supported the statement by the Secretary-General and the comments of the ACABQ.

Mr. NAKKARI (Syria) said that some of the answers provided were very convincing, and his technical queries had been responded to.  However, he had also raised a question concerning conference services.  According to the document before the Committee, the Conference would be held away from Headquarters, and any additional costs would be borne by the host Government in accordance with established procedures.  He supported the Conference and greatly admired the Government of Mexico for hosting the event.  To make the Conference a success, it was important to take into account all the necessary services.  He agreed with the statement by the representative of Iran on behalf of the Group of 77. 

Continuing, he drew Mr. Mselle’s attention to the fact that today’s meeting was an extraordinary occurrence.  He understood that the ACABQ had been unable to present its report in writing today, but the rule did not make exceptions for such ACABQ reports.  All documents should be presented in writing.  Previous exceptions to the rule should not be considered to be an established practice.  Oral presentations should not be a rule but an exception, restricted to certain circumstances.  Today, an exception could be made due to the extraordinary nature of the matter.

Mr. FUJII (Japan) reminded the Secretariat of his previous question.

NIKHIL SETH, Office of the Under-Secretary-General, Department of Economic and Social Affairs, said Japan’s question was on the specifics of a proposal by UNCTAD to hold a conference in January on market access.  Resolutions of the Conference on Financing for Development had called for the holding of related round tables and panel discussions as part of the process.  The sessions on market access would help to enrich the Conference in Mexico.

MUHAMMAD YUSSUF (United Republic of Tanzania) said he was a little worried since the use of a contingency fund should not be opposed simply for the purpose of opposing it.  A contingency fund should be used in a contingency situation like this.  If it could not, when and where was it to be used?  The Assembly had approved the fund because there was a time for such mechanisms to be used.  Now was the time.

The CHAIRMAN informed Committee members that a draft decision on the programme budget for the biennium 2000-2001, submitted by the Secretary-General in accordance with rule 153 of the Rules of Procedures of the Assembly, would be circulated to delegations for discussion.

Mr. MSELLE said that, in Assembly resolution 55/233, it had been decided that the contingency fund should be set at a level of 0.75 per cent of the preliminary budget estimate of $18.9 million.  That amount was in addition to the overall level and should be used in accordance with the procedures on the use of contingency funds.

He then proposed an amendment to the decision.  He said the last four lines should now read:  “International Conference on Financing for Development would be subject to the procedures for the use and operation of the Contingency Fund for the biennium 2002-2003”.

GEBHARD KANDANGA (Namibia) proposed adopting the draft decision.

Mr. CHANDRA (India) said his delegation would have preferred explicit approval for the draft decision.  It seemed that the procedures of Assembly resolution 41/213 were being diluted with every passing year.  He suggested a

15-minute suspension before action on the draft.

Mr. FUJII (Japan) supported India’s request for a suspension.

The meeting was suspended at 11:.49 a.m.

When the meeting was resumed after a short suspension, the Committee was informed that the text of the draft decision would be as follows:  “Based on the observations and recommendations of the Advisory Committee on Administrative and Budgetary Questions (ACABQ), the Fifth Committee decides to inform the General Assembly that, should it adopt draft resolution A/55/L.82, the additional requirements of $295,100 related to activities to be carried out in 2002, in the context of the last months of the preparatory process of the International Conference on Financing for Development, would be subject to the procedures for the use and operation of the contingency fund for the biennium 2002-2003, in accordance with General Assembly resolutions 41/213 of 19 December 1986 and 42/211 of 21 December 1987, and in the context of the consideration of the proposed programme budget for the biennium 2002-2003.”

The Committee then adopted the draft decision without a vote.

Scale of Assessments for Apportionment of Expenses of United Nations

The Committee then turned to the requests for exemptions under Article 19 of the Charter by Burundi, Comoros, Georgia and the Republic of Moldova.

MARC NTETURUYE (Burundi) said that last year the Committee on Contributions had been kind enough to grant an exception to his country, taking into consideration the special difficulties that it encountered.  Burundi was one of the poorest nations in the world.  The civil war had been continuing for eight years now, but under extremely difficult circumstances his Government had sent its payment to the regular and peacekeeping budgets of the United Nations in the amount of over $136,000.  The contribution was received on 12 June.  However, the country had been unable to make its payment in full.  The calculations and the transfer of money had taken some time, and in the final analysis the amount had been depreciated as a result of the instability of the national currency. 

Burundi had addressed the Committee on Contributions at a late date, because it had not anticipated such a problem.  Today, he wanted to ask for the understanding of those present.  The country was making enormous efforts with respect to its commitments to the Organization.  His Government was considering how to make up for the difference in payments.  He was asking for an exemption under Article 19, taking into account the difficulties encountered by his country.  He hoped Burundi would not lose its right to vote in the General Assembly.

The Vice-Chairman of the Committee, Mr. CHANDRA (India), expressed sympathy for the situation that Burundi found itself in.  He wondered if there was any more deserving case for exemption under Article 19.  He proposed suspending a meeting to take a decision on the matter.

In the ensuing discussion following the presentation by Burundi, the representatives of Syria, China, Uganda, Japan, Belgium (on behalf of the European Union), Pakistan, Canada (on behalf of Australia and New Zealand), United Republic of Tanzania, Guyana, Mexico, Cuba, Bulgaria and Kenya all endorsed Burundi’s request for exemption under Article 19 of the Charter, while some supported the request for exemption by Comoros, Georgia and the Republic of Moldova.

Regarding the case of Burundi, many speakers said the country’s ambassador had given a clear picture of his national situation and the circumstances which prevented that country from providing information to the Committee on Contributions within the set time limit and from paying its contributions.  Many welcomed Burundi’s recent attempt to pay and acknowledged that depreciation in its currency due to conflict had impeded that effort and placed matters beyond its control.  India’s representative also proposed a brief suspension so that delegations could agree on a related draft resolution.

Mr. NTETURUYE (Burundi) thanked all those who spoke in support of his request.  He said his country would always support the United Nations.  The Government hoped to get out of its difficult situation.  A peace accord had been signed, and progress continued to be made in implementing the accord.  Last year, in Pretoria, an agreement was reached on transitional leadership.  The heads of State of the region were supporting the peace process.

The Committee’s CHAIRMAN then suspended the meeting for consideration of the draft on the matter.

Following the resumption of the meeting, the Committee approved a draft decision endorsing the recommendations of the Committee on Contributions as transmitted in the letter dated 5 July 2001 from the President of the General Assembly to the Chairman of the Fifth Committee.  It decided that the failure of the Comoros, Georgia and the Republic of Moldova to pay the amount necessary under Article 19 of the Charter was due to conditions beyond their control and that they should be permitted to vote in the General Assembly until 30 June 2002.  It also decided, welcoming the undertaking and assurances provided by the Permanent Representative of Burundi, to permit Burundi to vote in the General Assembly until 30 June 2002. 

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