Fifty-seventh General Assembly

Fifth Committee

24^th Meeting (PM)

DELEGATES DISCUSS PROPOSED CREATION OF ‘SENIOR MANAGEMENT SERVICE’

TO HELP BUILD UN LEADERSHIP CAPACITY

As the Fifth Committee (Administrative and Budgetary) concluded its consideration of the United Nations common and pension systems this afternoon, speakers in the debate emphasized the important role of the International Civil Service Commission (ICSC) as an independent professional body serving the system, and carefully considered its proposals concerning remuneration and conditions of service of international staff.

[At the centre of the Commission’s recommendations is a pay-and-benefits review, which, according to the ICSC’s 2002 report, seeks “to reward contribution and validate competencies”.  The proposals focus on the simplification of the job classification system; introduction of so-called “broad banding” of salaries; and creation of a new job evaluation system.]

With regard to the broad banding and pay-for-performance system, the representative of Japan said that his delegation understood the ICSC’s main direction, which sought to align the pay-and-benefit system more with the performance of staff.  However, before introducing such a system, it was important to establish a reliable performance appraisal system and mechanism to prevent abuse.

Some doubts were expressed about the proposal to introduce a Senior Management Service, which, according to the report, would “play an important role in building the Organization’s leadership and management capacity”.  The representative of the Russian Federation, in particular, said that creation of such a service was unjustified, and it was not quite clear what specific problems it would be able to resolve.  Establishment of “a corporate elite” hardly corresponded to the desire for openness and transparency within the Organization.  He also put forward serious objections to some other proposed reforms, including a “less objective and technically correct” proposed system of post classification.

China’s representative, on the other hand, said that it was very important for the United Nations organizations to have a streamlined contingent of senior managers that was representative, competent, dynamic and of high quality.  China supported the idea of exploring Senior Management Service at pilot organizations.  His delegation believed, however, that only the high managerial posts should be considered for the service.

In his concluding remarks, the Chairman of the ICSC, Bel Hadj Amor, said that in a cautious and deliberate manner, and testing would be conducted before full in

introducing a pay-and-benefits system reform, the Commission was moving forward implementation of the changes was undertaken.  It was clear, however, that it was no longer possible to proceed with the “business as usual” approach.

As some delegations had expressed hesitation regarding the proposed real salary increase, he explained that recommendations in that regard had been made on the basis of the methodology agreed to by all stakeholders.  The Commission sought to realign the common system salary levels to those of the comparator (the United States federal employees) to achieve the desirable mid-point of 115, now that the overall margin was at the level of 109.3.  No action on the salary increase recommendation -- as appeared to be suggested by some delegations -- would drive the margin for 2003 even lower than the current margin.  The financial implications for 2003, if the desirable mid-point of 115 were to be achieved, would, therefore, be greater.

Also this afternoon, as the Committee began its consideration of several items related to the programme budget for 2002-2003, reports on such issues as results-based budgeting and post structure of the Secretariat were introduced by the Director of the Office of Programme Planning and Budget Division, Warren Sach; the Under-Secretary-General for Internal Oversight Services, Dileep Nair; and the Chairman of the Advisory Committee on Administrative and Budgetary Questions (ACABQ), Conrad S.M. Mselle.

The Committee will continue its consideration of the reports introduced today at 9:30 a.m. tomorrow, 12 October.

Background

The Fifth Committee met this afternoon to conclude its consideration of the United Nations common and pension systems and to take up items related to the programme budget for 2002-2003.  (For background information on the first two items, see Press Release GA/AB/3535 of 6 November.  Also contained in that press release is the summary of reports on the administrative and financial implications of International Civil Service Commission (ICSC) recommendations (documents A/57/450 and A/57/7/Add.9).

The first new document before the Committee was the Secretary-General’s report, which discusses conversion into established posts of some temporary assistance posts financed under section 2 of the programme budget (document A/57/453).  According to the document, the Secretary-General intends to evaluate the utilization of the temporary assistance resources before proposals are made for the conversion of such resources to established posts.  Should the evaluation support the conversion of resources, the necessary recommendations could be made in the context of the proposed programme budget for the biennium 2004-2005.

In a related report (document A/57/7/Add.14), the Advisory Committee on Administrative and Budgetary Questions (ACABQ) recommends that the General Assembly take note of the report of the Secretary-General.

The Secretary-General’s report on cases in which incumbents of the posts are being paid at a level other than the one provided for the post (document A/57/466) presents the results of a comprehensive review of post incumbencies, using Integrated Management Integrated Systems (IMIS) data as of 1 September 2002.  According to the report, cases when an incumbent is paid at a level other than that of the post may arise only from a personnel action that places a staff member against a post whose level is different from his or her personal level. 

In September 2002, there were 155 regular budget posts across all budget sections encumbered by staff whose personal grades were lower than the level of the occupied post.  This situation reflects decisions by the heads of departments and offices to place, for a limited period of time, staff having sufficient qualifications and experience against the vacancies, pending completion of recruitment.  During the review, one case of a post encumbered by a staff member whose personal grade was higher than the budgeted level of the post was also identified.

In a related report (document A/57/7/Add.14), the ACABQ recommends that the Assembly take note of the Secretary-General’s report.

The Secretary-General’s report on presentation of estimates of staff assessment (document A/57/464) contains an analysis of the current arrangements in use for staff assessment within the organizations of the United Nations system.  According to the Secretary-General, these arrangements may be grouped into three broad categories, as follows:

-- organizations with budgetary presentation on a net basis, with staff assessment added as an additional line to arrive at a total budget or appropriation on a gross basis, and with offsetting credits under tax equalization fund arrangements;

-- organizations with presentation on a net basis, with reimbursements received under a tax reimbursement agreement; and

-- organizations with a budgetary presentation on a gross basis at the section level (that is, staff costs under each budget section include any applicable taxes to be paid for staff members), with no reimbursement arrangements with Member States in respect of taxes.

The Advisory Committee in a related report (document A/57/7/Add.14) shares the view of the Secretary-General that, given the different arrangements currently in use, a change of presentation format would not enhance overall comparability.  The ACABQ recommends the Assembly take note of the Secretary-General’s report.

There was also a report of the Secretary-General on additional expenditures deriving from inflation and currency fluctuations (document A/57/471).  The report recalls much of the earlier reviews of the issue of additional expenditures deriving from inflation and currency fluctuations.  It provides an updated study, taking into account the fluctuations in exchange rates and inflation experienced in recent years.

In a related report (document A/57/7/Add.14), the Advisory Committee notes that the information in the Secretary-General’s report did not give rise to any new solutions to the problem of additional expenditures deriving from inflation and currency fluctuations, and that many of the earlier reviews and analyses on the subject remained relevant to the issue.  The Advisory Committee recommends that the General Assembly take note of the Secretary-General’s report.

A comprehensive review of the post structure of the United Nations Secretariat is contained in a further Secretary-General's report (document A/57/483).  The main conclusion that could be drawn from the review confirms that the current post structure and post distribution in the Secretariat does not indicate any apparent anomalies that could be characterized as top-heaviness when comparing the post structure and distribution statistics of the Secretariat with similar data of other international organizations.

Another conclusion that was drawn from the review is that the Secretariat’s post-control mechanisms are working, in the sense that new posts and upgrades are limited.  However, it was observed that there is a reliance on high-level restraint, for example, the Fifth Committee, rather than managerial self-discipline and accountability.  The process itself creates tensions and frustrations that may have prompted some of the assumptions and concerns about top-heaviness that led to the present study.

Clearly defined responsibilities, authorities, managerial accountabilities and review mechanisms are necessary in the delegation of authority to programme managers, a process which is at the centre of the Secretary-General’s reform initiatives.  At the same time, the Department of Management has a central role  in ensuring that common organizational principles and policies are observed throughout the Secretariat and that the exercise of delegated authority is discharged within agreed guidelines, procedures and rules.

As regards job classification reform, the International Civil Service Commission (ICSC) has proposed a number of innovations which would shift the emphasis towards more flexible recognition of the changing nature of work, as well as towards competencies and career development.  Concerning possible alternative approaches to post control, the Secretary-General notes that performance reports and the results-based format of the programme budget provide an opportunity to review managerial accountability and budgetary responsibility against the yardstick of availability of human and financial resources.

On this matter, the ACABQ in its report (document A/57/7/Add.14) recommends that the General Assembly take note of the report of the Secretary-General.

Also before the Committee was the Secretary-General’s interim report on results-based budgeting for 2002-2003 (document A/57/478) -– a new methodology, first used in preparation of the current budget.  This concept envisions articulation of objectives, expected accomplishments and indicators of achievement prior to the implementation of a programme, in addition to the listing of outputs and resource requirements.

The Secretary-General indicates that the implementation of results-based budgeting has prompted managers to take a closer look at the raison d’être of their programmes, particularly in terms of the problems to be addressed.  The experience also points to the need to systematically track information on progress made towards solving those problems.  All departments have acknowledged and welcomed the need for a change in the management culture by looking beyond the delivery of outputs and services and focusing more on the results of their work. 

The Advisory Committee in a related report (document A/57/7/Add.14) expresses its readiness to follow up on the matter and present its views in the context of its consideration of the proposed programme budget for 2004-2005.  The ACABQ recommends that the Assembly take note of the Secretary-General’s report.

Also before the Committee was a note by the Secretary-General which transmits a report by the Office of Internal Oversight Services (OIOS) on the implementation of all provisions of General Assembly resolution 55/231 on results-based budgeting (document A/57/474).  From its evaluation, the OIOS confirms that since the introduction of results-based budgeting, improvements have been made to establish logical links between the formulation of objectives and expected accomplishments and indicators, and that links have also been established between the medium-term plan and the programme budget.  The report also confirms that throughout the budget preparation process, the Budget division conducted training and briefings to enhance the skills of the staff involved in the formulation of the results-based budget.

The OIOS also identified particular challenges to the implementation of results-based budgeting.  These challenges had arisen due to a shift in focus from input/output to results orientation, which required a significant culture change, the length and complexity of the planning, budgeting, monitoring and evaluation cycle, and the inherent difficulties in quantifying and measuring many of the expected achievements of the Organization.

The report also identifies important steps that need to be taken to bring the implementation of results-based budgeting to the next level.  These include a clear definition of the roles and responsibilities of programme managers, the Office of Programme Planning, Budgets and Accounts, and the OIOS, and making sure that self-evaluation and self-monitoring become part of management culture and practice.

Statements

VLADIMIR A. IOSSIFOV (Russian Federation) said that his delegation attached great importance to the common system of the United Nations and the activities of the ICSC, which played an important role in regulating conditions of service within the system.  In reviewing the system of pay and benefits, the Commission had avoided the temptation of aiming at quick results without taking into account the serious financial consequences of its decisions.  It had also demonstrated a calm and balanced approach to the reform of pay benefits.  The compensation system review should be viewed primarily as means of developing management tools, which would improve the efficiency and cost-effectiveness of international organizations’ secretariats.  His delegation did not agree with equating compensation, pay and benefits review with an elementary pay raise. 

Russia had serious objections to some of the proposed reforms, in particular, as far as a less objective and technically correct proposed system of classification of posts was concerned.  He believed that such a system would create conditions under which organizations would be able to establish their own salary scales through so-called broad banding.  As for the proposed Senior Management Service, he said that its creation was unjustified, and it was not quite clear what specific problems it would be able to resolve.  Creation of a corporate elite hardly corresponded to the desire for openness and transparency within the Organization.  Such a service would discriminate against any candidates who were not “members of the club” -- and particularly against external candidates.

A compensation system reform should be preceded by the creation of a stricter performance management and appraisal system.  For now, it was quite clear that reform of compensation, which was to take place in parallel with a review of contracts, still did not justify itself.  If a decision was taken to test broad banding, it was necessary to work out all legal aspects of the matter, including those linked with the end of such an experiment, in order to avoid possible complications in connection with so-called acquired rights of personnel.

Regarding the proposals related to the margin between the United Nations and United States federal civil service, he said that they were impressive, but represented a cause of concern for his delegation.  In considering a raise in the base salary scale, he was ready to participate in the search for a way to minimize financial implications of proposed measures.  He believed that a fully acceptable solution might be increasing the salaries to the lower level of the margin. 

HAO BIN (China) expressed his delegation’s view that the new job evaluation system was unique in both form and substance.  Furthermore, his delegation was of the view that the critical part of the new master standard was to ensure soundness and objectivity.  Therefore, care must be taken in deciding which elements were to be selected and how.  In that connection, his delegation wished to know the rationale for reducing the 15 evaluation elements to 7.

The management team played a key role in accomplishing the Organization’s objectives, he continued.  It was very important for United Nations organizations to have a streamlined contingent of senior managers that was representative, competent, dynamic and of high quality.  It was out of that concern that China supported the idea of exploring a Senior Management Service at pilot organizations.  His delegation believed, however, that only the high managerial posts should be considered for such service.  For any given organization under the common system, its Senior Management Service should at least be considerably smaller than the current total of D-1 and above posts.

In principle, he continued, his delegation welcomed the concept of broad banding, but believed further serious study was necessary.  The urgent task was to develop an objective and sound performance system.  His delegation also believed that there should be some increase in the margin, as the salaries of a certain portion fell below 110.  However, any increase in the margin should be based on the Organization’s financial capacity.  Furthermore, across-the-board increases should be avoided, as the situation did not warrant such action.

YOICHI NIIYA (Japan) said that it was necessary to maintain the consistency and coherence of the common system, and recognize the role and function of the ICSC as an independent, technical and professional body serving the system.  With regard to introducing the broad-band system and pay-for-performance, his delegation understood the overall direction in which the ICSC wanted to move to align the pay and benefit system more with the performance staff.  However, before introducing the system, there were things that had to be done, such as establishing a reliable performance appraisal system and a mechanism to prevent abuse of the system.

Furthermore, his delegation had doubts about the wisdom of introducing the Senior Management Service without having it more clearly defined.  The report of the ICSC had presented some of the objectives for the Service.  However, they could be best achieved by defining the competence requirement for senior managers, and then making appointments on the basis of that requirement and the objective of promoting mobility.

In the process of the comprehensive review of the pay and benefit system, his delegation felt there was a need to review the system to compare remuneration between United Nations staff and United States federal employees, and requested that the ICSC present a detailed report on the grade equivalency between United Nations staff and the United States federal service.  Much importance should also be attached to mobility of staff, he continued, and his delegation regretted that the ICSC had failed to report to the General Assembly on mobility at its current session.  He asked that the ICSC submit proposals for effective measures to promote mobility at the fifty-eighth session.

     Remarks by ICSC Chairman

Responding to comments from the floor, the Chairman of the ICSC, BEL HADJ AMOR, said he was gratified by the interest in the pay-and-benefits system reform.  The Commission was moving forward in a cautious and deliberate manner.  While much had been accomplished in the last year to formulate the proposals, much testing would be conducted before full implementation of the changes was undertaken.  It was clear, however, that it was no longer possible to proceed with the “business as usual” approach.  The approach recommended by the Commission had been implemented by both private and public employers all over the world.  As for proposal regarding creation of a Senior Management Service, the Secretary-General and other executive heads had indicated to the Committee that the need for reform was essential.  The Commission’s reform proposals were an important element of the management reforms already under way in the organizations of the common system.

Turning to the salary scale, he said that some delegations had expressed hesitation regarding the proposed real salary increase.  However, the recommendations on both the amount of such an increase and the differentiated adjustments had been made after careful consideration of the matter on the basis of the methodology agreed to by all stakeholders.  Also, some comments made by members of the Committee would require a revision of the approved methodology.  The Commission’s recommendations were aimed at realigning the common system salary levels to those of the comparator to achieve the desirable mid-point of 115, now that the overall margin was at the level of 109.3.

He explained that the 109.3 margin related to the calendar year 2002, which meant that the remuneration of staff had been below the margin floor of 110 throughout the current year.  The actual United States salary increase could be higher or lower than the projected 4.1 per cent used for the sake of calculations, but, in any case, actual margin figure would be reported to the Assembly next year on the basis of actual figures.  What was certain, however, was that no action on the salary increase recommendation, as appeared to be suggested by some delegations, would drive the margin for 2003 even lower than the current margin.  The financial implications for 2003, if the desirable mid-point of 115 were to be achieved, would, therefore, be greater.  The margin had been below 115 over the last five years, averaging 112.5 during that time.

Some comments had suggested that the mid-point of 115 was not necessarily the objective, he continued, but the Assembly had approved a 0.4 per cent increase in 1996 to realign the margin to the desirable mid-point.  As for the recommended salary increase at the lower levels of the scale, he said that minimal increases were recommended on the basis of social justice considerations and not purely on the margin calculations.  In general, from the standpoint of financial implications, there was never a good time for a salary increase.  The current salary increase recommendations, however, were soundly based on a methodology that had been in place for almost two decades and had been agreed to by all stakeholders.

In classifying posts, he added, it was necessary to observe the principle of flexibility.  As for the Senior Management Service, the Commission was not trying to create an elite club, but develop modalities for management.  It would be a pilot programme, and the Commission was not proposing that Member States embark on an adventure.  The ICSC was not trying to destroy the common system, but improve it.  All the necessary safeguards should be in place.

AICHA AFIFI (Morocco) thanked the Chairman of the ICSC for his answers and sought further clarification regarding measures to encourage organizations to implement the Commission’s ideas and the establishment of the Senior Management Service.  In setting up such a service, would there be consultations with staff representatives?

Mr. AMOR said that, as the proposed systems and bodies still did not exist, he could not give detailed responses to those queries.  Regarding the means of encouraging monitoring, he said that two kinds of encouragement were envisioned: verbal and through organizing workshops and seminars.  What the Commission was proposing now, during the drafting stage of considering the matter, was to organize training programmes on such proposals as those concerning classification, broad banding and mobility.  The matter would be considered in coordination with staff organizations and Member States.  The development of modalities for the Service would also be carried out in consultation with all actors involved.  However, the executive heads would be responsible for the proposed body.  Together with staff representatives and organizations, the ICSC intended to set up criteria that managers needed to respect.

JERRY KRAMER (Canada) asked whether he understood correctly that the proposed real salary increase was not really related to the salary increases of the comparator in 2003, but was based on the situation in 2002.  He also wanted to receive explanation regarding the information contained in paragraphs 151 and 152 of the ICSC report, according to which, on the one hand, “most members of the Commission shared the concerns ... regarding the low levels of margin at the senior levels” and, on the other, “some members ... did not consider the imbalance of the margin to be a problem”.

Mr. AMOR replied that what the report said in paragraphs 151 and 152 reflected exactly what had happened and did not require further explanation.  Viewpoints expressed by several members of the ICSC had been included in the report, but it did not mean that the Commission on the whole shared those views.  The midpoint for 2003 was based on the projected salary increase in Washington, D.C.  The actual change could be more or less than the estimate of 4.1 per cent, but actual figures would be presented to the Assembly when an increase actually took place.

United Nations Pension System

ANDREY V. KOVALENKO (Russian Federation) said that, on the whole, his delegation shared the concerns expressed by the Joint Staff Pension Board over a major decrease in the market value of assets in recent times and the continuation of that trend in 2002.  At the same time, he commended the success achieved by the Investment Management Service that was able to somehow minimize losses and attain good results compared to its benchmark.  His delegation was somewhat concerned, he said, about the emerging problems between the United Nations Joint Staff Pension Fund and the OIOS regarding the audit of the Fund’s activities.  He believed there should be no rush on that issue, which should be addressed at the negotiating table, taking into account the existing United Nations internal audit system. 

Referring to activities relating to Joint Staff Pension Fund’s participants from the former Soviet Union, his delegation had taken note of the Board’s decision ruling out the possibility of utilizing the Fund’s resources to supplement the pensions of those former participants.  Russia was also of the view that, following the removal of the issue of the draft agreement on the partial reinstatement of the pension rights of former Soviet employees from the agenda, the problem should be settled internally.  He further underlined the fact that all issues related to the pensions of Russian citizens who had worked in the United Nations system were to be resolved in accordance with the effective Russian legislation and taking into account the specificities of the Russian pension system, the overall size of pensions and the financial condition of the State.

Russia had already informed the leadership of the Fund and the United Nations Secretariat that the Government had introduced supplements to pensions for those Russian citizens who had transferred their pension rights under the agreement concluded between the United Nations Joint Staff Pension Fund and the Government of the former Soviet Union in 1989.  Currently, the Government was exploring the possibility of taking additional measures to enhance the provision of pension for former employees of international organizations.

Programme Budget for Biennium 2002-2003:  Introductions

WARREN SACH, Director of the Office of Programme Planning and Budget Division, presented a statement submitted by the Secretary-General, contained in documents A/57/450 and Corr.1.

CONRAD S.M. MSELLE, Chairman of the Advisory Committee on Administrative and Budgetary Questions (ACABQ), introduced the related report of the Advisory Committee.

SHINICHI YANAMAKA (Japan) said his delegation had noted that the recommendations of the ICSC were diversified, thus, meriting ongoing discussion.  The issue should be considered more carefully, perhaps at a later stage.

Mr. SACH introduced six more reports of the Secretary-General relating to the programme budget for the biennium 2002-2003.  He said that the report on conversion into established posts of some temporary assistance posts (document A/57/453) had been overtaken by subsequent events after the adoption of the mandate of that report.  Measures had been taken with regard to the scheduling of meeting since the beginning of this year; therefore, this report should be looked at within the context of budget proposals for 2004-2005.

With regard to the report on the estimates of staff assessment (document A/57/464), he said the suggestion had been made that the United Nations should consider different formats for presenting staff assessment.  There were three formats, most following a format where the net presentation was used.  Given the diversity of existing arrangements in the agencies, it was believed that there was no compelling case for changing the current format.

Regarding the report on the post structure of the United Nations, (document A/57/483), he said that concerns had been expressed during the review of the budget proposals with regard to “top-heaviness”.  There were too many high-level posts, it was felt, and not enough middle- and low-level posts.  That was not the first time that the topic had been discussed; therefore, comparisons undertaken with organizations in similar positions were in order.  In general, the results indicated that the United Nations Secretariat was not, in fact, top-heavy.

DILEEP NAIR, Under-Secretary-General for Internal Oversight Services, introducing the report of the OIOS on results-based budgeting, said the OIOS concluded that results-based budgeting was being implemented within the Organization in a gradual and incremental manner, in full compliance with the Regulations and Rules Governing Programme Planning, Budgeting, Monitoring and Evaluation and the Financial Regulations and Rules of the United Nations.  The OIOS had further ascertained that logical linkages were being made between the formulation of objectives, and expected accomplishments and indicators, by way of forging links between the relevant medium-term plan and the programme budget.

The OIOS had also identified a number of challenges and important steps to be taken ahead, he said.  Those included the definition of a clear strategy in the next medium-term plan to guide budget formulation over two bienniums, the redesign of the programme performance report, and collective development of clearer guidelines regarding inclusion of external factors in the logical framework.

Introducing a related report of the ACABQ, the Advisory Committee Chairman, Mr. MSELLE, said that one of the reports before the Committee raised an important matter of budget presentation by various organizations of the system.  As there were important mandate differences among various bodies, it was not always wise to force one organization to adopt methodology in use by another one.  Another important aspect of budget presentation was covered in the report on inflation and currency fluctuations.  Being rather unpredictable, that subject generated considerable debate when programme budget proposals were made.  No new solutions had been proposed, and the ACABQ would return to the issue in the context of the proposed budget for 2004-2005.

Statements

THOMAS A. REPASCH (United States) said that the report on results-based budgeting was of particular interest to his delegation.  It provided a clear picture of the status of implementation of the new methodology.  The ACABQ recommended that the General Assembly take note of the Secretary-General’s report, but it did not say if the ACABQ concurred with the recommendations contained in that document.

As for the comprehensive review of the post structure within the Secretariat, he said the Secretary-General’s report on the matter was extremely disappointing.  As far as he knew, a consultant had been hired to produce that document, and a survey had been taken, but all that those efforts had produced were five pages saying that the Secretariat was not top-heavy.  Perhaps that was one case where the conclusion had been reached before a report was even undertaken.  That was not what the General Assembly had expected.  Had the ACABQ come to the conclusion that the report was comprehensive, because, in his view, it was not?

Mr. YAMANAKA (Japan) said he had several questions in connection with the reports before the Committee.  For example, in paragraph 4 of the report on cases in which incumbents were paid at a level other than the one provided for the post (document A/57/466), the Secretary-General referred to one case when a post was encumbered by a staff member whose personal grade was higher than the level of the post.  As the examination had revealed that it was the result of a decision made by the Secretary-General in 1990, he wondered whether the situation could have continued for more than 10 years.  Was a vacant post utilized to accommodate that decision?

Regarding the estimates of staff assessment (document A/57/464), he said the report gave a clear image of arrangements in place at the United Nations.  His

delegation took note of a more simplified format used in some organizations.  While that could provide some advantages in transparency, he shared the views of the Secretary-General and ACABQ on the matter.  Turning to additional expenditures in connection with inflation and currency fluctuations, he noted with appreciation the report of the Secretary-General on the matter, and said that the options raised in the report were narrow.  His delegation would like to see such measures as establishment of a reserve, for example, and intended to further discuss the issue in informals.

Regarding the interim report on results-based budgeting, he said that it was necessary to proceed with the system in an incremental manner.  His delegation commended efforts to produce an informative report and would like to take note of the document.

AYMAN M. ELGAMMAL (Egypt) requested a clarification on the recommendation in document A/57/7/Add.9, which said the Advisory Committee had no technical objection with regard to the estimates of requirements under the regular budget resulting from the recommendations and decisions of the ICSC.  Did that mean that, within the first performance report, the ACABQ would be able to submit further recommendations on the way in which the amounts were to be paid?

Mr. MSELLE, replying to questions from the floor, said he agreed that the report on the post structure of the Secretariat was not comprehensive enough, which was why he had said that subject would be returned to in the context of budget 2004/2005.  Regarding document A/57/7/Add.9, he had said that since 1975 the ACABQ had decided not to pass judgement on the recommendations of the ICSC.  The amount that the General Assembly would appropriate would depend on the number of recommendations of the ICSC that the Fifth Committee decided to accept.

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