FIFTH COMMITTEE CONTINUES DEBATE ON SCALE FOR UN BUDGET CONTRIBUTIONS; CEILING, EASING EXCESSIVE INCREASES IN ASSESSMENTS AMONG ISSUES RAISED

Sixtieth General Assembly

Fifth Committee

7^th Meeting (AM)

FIFTH COMMITTEE CONTINUES DEBATE ON SCALE FOR UN BUDGET CONTRIBUTIONS;

CEILING, EASING EXCESSIVE INCREASES IN ASSESSMENTS AMONG ISSUES RAISED

Several Speakers Call for Review of 2000 Maximum Assessment Decision;

Proposal to Lift Hiring Freeze on General Service Staff Also Taken Up

As the Fifth Committee (Administrative and Budgetary) continued its debate on the methodology for the scale of assessments, which will be used for calculating Member States’ contributions to the budget of the United Nations in 2007-2009, several delegations called for a review of the 2000 decision to reduce the maximum rate of assessment, or ceiling, from 25 to 22 per cent.

When it adopted a revised scale in 2000, the Assembly, by the terms of resolution 55/5 B, based individual countries’ assessments on the estimates of their gross national income, which is converted to United States dollars after adjustments for external debt and low per-capita income.  Points arising as a result of the application of the new ceiling to the Organization’s main contributor -– the United States -- were distributed pro rata among other States, except for those affected by the floor (0.001 per cent) and the least developed countries ceiling.

Cuba’s representative said the ceiling should be eliminated and, due to an arbitrarily determined upper limit, the main contributor was paying much less than it should.  The agreement achieved in adopting resolution 55/5 was based on promises to pay by the main contributor, but five years later the situation of those arrears had not substantially improved.  The international community was still looking at similar operations and manoeuvres, with the United States Congress trying to hold back funds if the Organization did not yield to its demands for reform.

The imposition of the new ceiling was among the criteria that distorted the principle of capacity-to-pay, Venezuela’s representative said, and that had a negative impact on the economies of some developing countries.  He stressed the need to avoid abrupt increases in assessments that could have an unpredictable effect on economies, saying that such measures should not be adopted on the basis of political criteria.

At the same time, China’s representative insisted that any adjustments or changes to the scale could only be made through consensus by the General Assembly.  The current methodology was a compromise achieved by the whole membership of the United Nations as a result of hard negotiations on the basis of the principle of capacity-to-pay.  Minimizing uncertainties by maintaining the stability of the scale methodology and the predictability of the scale was vital to ensuring normal operation of the United Nations system.

Although China’s share for 2004-2006 had jumped by 35.18 per cent over the previous period, she said that, as long as the assessments had been worked out according to the current methodology, China would willingly accept the result of the calculation.  Expressing sympathy for the concern voiced by some developing countries, she added that in cases of excessive increases in contributions, some special adjustments might be considered, such as mitigation measures adopted for the 2004-2006 scale.

Many speakers, including the representatives of Jamaica and Argentina, who spoke on behalf of the “Group of 77” developing countries and China and the Rio Group, respectively, urged the Assembly to consider measures that could be applied to address cases of excessive scale-to-scale increases, particularly in developing countries.  Reaffirming that Member States had a legal obligation to bear the financial expenses of the Organization, Jamaica also acknowledged that some States might temporarily not be able to meet their financial obligations as a consequence of genuine economic difficulties.

As for the multi-year payment plans, which were endorsed by the Assembly in 2002, several delegates said they had made a positive contribution in encouraging States to reduce and eventually eliminate their debt.  However, most speakers emphasized that such plans should remain a voluntary mechanism and must not be used in relation to the granting of waivers under Article 19 of the Charter.

[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 its control.]

Also this morning, as the Committee took up the Secretary-General’s proposal to lift the freeze on hiring of General Service staff, the representative of the United Kingdom, who spoke on behalf of the European Union and associated States, expressed disappointment with the report on the matter, which “simply produced a list of problems encountered in finding replacement of staff for existing slots” instead of providing “a re-think” of how best to assign and use the General Service staff in an age of increased automation, new technologies and more flexible skills expectations from all staff.  Furthermore, he did not understand why 1 December had been proposed as the date to lift the suspension, when later that very month, a decision on General Service numbers would be taken in the context of the 2006-2007 budget.

Agreeing that the Secretary-General’s report was neither comprehensive, nor persuasive, Japan’s representative said that the issue needed to be considered in a comprehensive way, contributing to the development of concrete proposals on a time-bound plan for reducing duplication, complexity and bureaucracy in administrative processes and procedures.

Also speaking today were representatives of India, Libya, Costa Rica, Syria, Sao Tome and Principe, Jordan, Zambia, Algeria, Iran, Pakistan, Trinidad and Tobago, Niger, Liberia, Nigeria, Republic of Korea, Iraq and Mexico.  Chairman of the Committee on Contributions, Ugo Sessi, took the floor in response to comments and questions from the floor.  Reports before the Committee were introduced by Lionelito Berridge, Chief of the Policy Coordination Unit, Programme Planning and Budget Division; and Rajat Saha, Acting Chairman of the Advisory Committee on Administrative and Budgetary Questions (ACABQ).

The Committee will meet at 10 a.m. Wednesday, 19 October, to take up a report on the actions by United Nations regional commissions to implement the recommendations of the Office of Internal Oversight Services (OIOS).

Background

The Fifth Committee (Administrative and Budgetary) met this morning to continue its general discussion on the Scale of Assessments (for background see Press Release GA/AB/3689) and to begin discussions on the suspension of the recruitment of General Service posts.

Before the Committee was the report of the Secretary-General on the suspension of recruitment for posts in the General Service and related categories (document A/60/363), which contained the recommendation to lift the suspension of recruitment in the General Service and related categories, effective 1 December 2005.  The suspension was introduced in March 2004 when the General Assembly asked the Secretary-General to suspend recruitment action for new vacancies in General Service posts for the biennium 2004-2005, with the exception of safety and security personnel and editorial assistants in language functions.

The report noted that lifting the suspension in the last quarter of 2005 would not produce any additional costs for the 2004-2005 biennium because of the time required to recruit staff.  And no additional financial implications would emerge in the 2006-2007 biennium, as the normal General Service vacancy rate of 1.5 per cent used in the proposed programme budget for 2006-2007 anticipates the lifting of the suspension.

Responding to a request by the General Assembly in resolution 59/276, the report found that high vacancy rates in the General Service and related categories for the period produced significant difficulties with programme implementation across the Secretariat.  Staff turnover between offices and departments was extremely high and openings in areas that required specialized skills or experience were extremely difficult to fill.  The interim measures -- including increased reliance on individual contracts and overtime for existing staff -- were not sustainable in the long term.

The Advisory Committee on Administrative and Budgetary Questions (ACABQ), in a related report (document A/60/7/Add.2), expressed its opinion that it would be premature to approve the Secretary-General’s proposal to lift the suspension of recruitment on 1 December 2005 while the comprehensive analysis of General Service staff functions is under way.  Whether or not the freeze is continued past the scheduled ending date of 31 December 2005, the Advisory Committee recommends that the Secretary-General prepare a plan of action for the future.

In this regard, the Committee requests that a comprehensive list of specialized functions be created immediately by the Office of Human Resources Management, based on the list of functions provided to the Committee.  The Advisory Committee firmly believes that the Secretary-General should propose ways and means to selectively eliminate General Service posts, whenever possible.

The Advisory Committee is concerned that the Secretary-General’s report describes the problems and the interim measures used during the freeze, with little or no analysis of the important issues under consideration, nor of the lessons learned from the exercise.  The Committee said the General Assembly wanted to stimulate a search for creative and practical solutions that would tap into the available resources, while planning for the long-term modernization and streamlining of administrative processes.  In its previous reports (document A/58/7, para. 143 and document A/60/7, para. 53) the Advisory Committee asked the Secretary-General to be creative in the management of staff.  The Advisory Committee also points out that the Secretary-General’s report emphasizes the disruptions stemming from the recruitment freeze, but doesn’t always have data to support the information.

In another section of their report that concerns the ratio of General Service posts to Professional posts, the Advisory Committee said it is not clear to what extent the proposed cut of 92 General Services posts funded under the regular budget is due to efficiency gains.  The number of these posts in the 2004-2005 biennium was 5,663.  At the same time, General Service staff funded by extrabudgetary resources increased to 6,306 for the proposed 2006-2007 biennium, up from 5,634 in 2004-2005 and 4,568 in 2002-2003.

The Advisory Committee noted that a consultant has been engaged to review the ratio of General Service staff to Professional staff.  This review is responding to the General Assembly’s concerns about the high proportion of General Service posts to Professional posts in the regional commissions, as well as its own recommendation that a comprehensive analysis of the functions of the General Service staff be carried out to accurately determine which posts could be eliminated without harming the Organization.

The Advisory Committee looks forward to reviewing the comprehensive analysis of the General Service functions, which is long overdue.  But it believes that the study should have been completed in-house, in cooperation with the Office of Internal Oversight Services (OIOS).  An in-house analysis would have produced more information on the specific details of departments and processes and help create proposals for workable solutions.  The report should be viewed as an essential step in the ongoing process of streamlining and modernizing administrative processes of the United Nations.  The Advisory Committee recommends that the comprehensive analysis look at the OIOS recommendations (document A/58/211, sect. VI) and be prepared so the analysis could be used as an input for the development of the time-bound plan.

Statements

STAFFORD NEIL (Jamaica), speaking on behalf of the “Group of 77” developing countries and China, agreed with the recommendation of the Committee on Contributions that failure by the Central African Republic, Comoros, Georgia, Guinea-Bissau, Somalia and Tajikistan to pay the minimum amount necessary to avoid the application of Article 19 was due to conditions beyond their control.  Similarly, the request for exemption of Liberia, Niger and Sao Tome and Principe warranted favourable consideration.  Those countries should be permitted to vote until the beginning of the next session of the General Assembly.  Reaffirming that Member States had a legal obligation to bear the financial expenses of the Organization, he acknowledged, however, that some States might temporarily not be able to meet their financial obligations as a consequence of genuine economic difficulties.

As for the multi-year payment plans, he noted the information provided regarding those States that had submitted such plans and encouraged Member States with significant arrears that were in a position to do so, to consider submitting multi-year plans.  However, those plans should remain a voluntary mechanism to be used to help Member States to pay their arrears.  The mechanism must not be used to pressure countries, already in a difficult situation, and definitely not in relation to the granting of waivers under Article 19.

The issues contained in the report of the Committee on Contributions would require comprehensive discussions, he continued.  A fundamental principle in determining the scale of assessments was that of the capacity to pay, and the main element that had affected the application of that principle was the ceiling on assessed contributions.  The rationale for establishing a reduced ceiling of 22 per cent had been to facilitate the payment of arrears, in one particular case, in order to improve the financial situation of the United Nations.  In accordance with resolution 55/5C, the Assembly should have reverted to that matter at the end of 2003 to determine all appropriate measures to remedy the situation, including adjustment of the ceiling.  Taking into account the experiences following the implementation of the decision on the ceiling, such a review should be affected as soon as possible.  In that connection, he requested the Secretariat to provide the Committee with information regarding the application of the current methodology without the element of the 22 per cent ceiling.

A query had been raised by some members as to the rationale for the least developed country ceiling, based on the fact that only two Member States had benefited in the current scale.  Also important was the small scale of the adjustment.  That was rather disturbing, given that no corresponding concern had been expressed regarding the other ceiling, which gave rise to a much higher rate of adjustment.  One of the main concerns of the Group of 77 was an abrupt increase experienced by some developing countries in the rates of their assessments from one scale period to another.  In that context, the Group of 77 urged the Committee on Contributions to pay closer attention to the matter to ensure that in the application of any methodology approved by the Assembly, careful consideration was given to avoid such exorbitant increases.  Efforts should also be made to reduce to the barest possible minimum, anomalies arising from the application of the existing methodology.

He urged the Assembly to review measures that could be applied to address cases of excessive increase, particularly in developing countries.  The Group of 77 also noted that the question of annual recalculation of the scale had been raised, but he doubted that such a discussion would be fruitful at this time.

ELIZABETH GALVEZ ( United Kingdom), who spoke on behalf of the European Union and associated States, said she endorsed the recommendations in the reports of the Committee on Contributions (document A/60/66) and the Secretary-General on multi-year payments (document A/60/11).  She also endorsed the position of the representative of Slovenia to defer consideration of the unpaid assessed contributions of the former Yugoslavia.

On the issue of requests for exemptions under Article 19, the European Union was concerned that the submission of information requesting exemptions has become an automatic exercise and that there was an expectation that, regardless of what information was submitted or at what time, the exemption would be granted.  The Union believed that consideration of the justification for application of exemptions should be taken seriously.  She said full explanations should be given to the Committee on contributions and they should be provided within the time specified to allow for adequate consideration.  She said the Committee’s time to consider the information should be extended from two to four weeks.

She said a Member State’s willingness to consider multi-year plans should be a factor in the Committee’s consideration of requests for future waivers under Article 19.  An annual payment, even if symbolic, showed that all Member States took their Charter obligations seriously.

On the methodology of future scales of assessments, the Union’s long-standing position was that the principal element for the methodology should continue to be capacity to pay and the most accurate reflection of this principle to pay was gross national income.  There could be no basis for exceptions to those principles.

ALEJANDRO TORRES LEPORI ( Argentina), who spoke on behalf of the Rio Group, said he associated himself with the statement of the representative of Jamaica on behalf of the Group of 77 and China.

He said the Group of 77 contributed 5.234 per cent of the Organization’s regular budget and that the scale of assessment was a high-priority issue for the countries, since, in most cases, they had suffered in the past under the system.  In regard to the new scale of assessment, which would be valid through the period 2007-2009, he reaffirmed the governing principal of the real capacity to pay to assess the contributions of Member States.  He said the assessments must be established on the basis of economic data that most accurately reflected the real performance of their economies.  He said the Committee should address urgently the approaches and measures needed to moderate the impact of substantial increases in the assessments of Member States.  The General Assembly should give the Committee a clear mandate on that issue.

On the issue of multi-year payments, he said the multi-year payment plan should be promoted as a voluntary method to help some Member States reduce their arrears.  He considered the mechanisms in place to encourage the payment of arrears as useful and the Committee on Contributions should not continue to look at the issue.  Finally, he urged that a reasonable solution be found to the unpaid assessed contributions of the former Yugoslavia.

JANARDIHAN POOJARI ( India) aligned himself with the position of the Group of 77 and China and supported the conclusions of the Committee on Contributions on the applications for exemptions from application of the provisions of Article 19.  He also supported the cases of Liberia, Niger and Sao Tome and Principle as meriting similar consideration.  Presently, exemptions remained in effect only until 30 June of the following year, but it appeared logical that it should be granted at least until the end of the General Assembly session.  He commended those Member States that had proposed multi-year plans and were making efforts to meet their obligations under those plans.  However, not all Member States in arrears would be in a position to submit such plans, and those cases deserved the Assembly’s sympathy and patience.  The experience with the plans might be mixed.  However, it remained the only tool available to assist Member States that were facing genuine difficulties to reduce their unpaid assessments, and recent experience was cause for some cheer.

He noted the proposal of the Committee on Contributions to fix the deadline for payment from the date of issuance of assessments, rather than from the date of their receipt.  However, he would like to point out the inordinate delay experienced on occasion in receiving the assessment letters, which affected States’ ability to make timely payment.

The Committee on Contributions had sought guidance from the Assembly on elements of scale methodology or potential new elements for the 2007-2009 scale, he continued.  It was important for the Assembly to provide such guidance to the Committee for its work at its sixty-sixth session.  He agreed that the scale should be based on gross national income figures that were as current as possible.  However, comprehensiveness and comparability of gross national income data was of equal importance, and the pursuit of current figures should not, in any way, impact negatively on those considerations.  He agreed that market exchange rates should be used in the conversion of data, except when excessive fluctuations justified the use of price-adjusted rates of exchange or other appropriate rates.  He also favoured a six-year base period.

It was necessary to examine the appropriateness of the current application of the debt burden adjustments to higher income countries, he continued.  The amount of low per-capita income adjustment should continue to be distributed only among Member States above the threshold, which was the average per-capita gross national income of all Member States, and not among all Member States.  His delegation was open to examining the issue of the scale floor, if it still imposed an excessive burden on some of the smaller Member States.  That was especially true for small island developing States, and he urged the Committee on Contributions to consider that issue at its next session.

He was surprised that there had been no discussion of the ceiling in the Committee on Contributions, he said.  Given it was a major source of distortion affecting the application of the ability-to-pay principle, the Committee should have devoted more attention to the issue.  He hoped the issue would be discussed in detail when the Committee on Contributions would be finalizing its report on the 2007-2009 scale.  The Committee should also discuss whether the premise under which the ceiling rate had been imposed, namely commitment to pay dues owed to the Organization in a timely manner, had been fulfilled.

Mr. AL-MUNTASSER ( Libya) associated himself with the position of the Group of 77 and China and said that he appreciated the efforts of the Committee on Contributions to prepare the scale that would take into account the special situation of Member States.  However, he was concerned that, under the current scale, his country’s assessment had risen by 95 per cent in comparison with the previous period.  The current methodology did not take into account his country’s difficulties, which should be viewed in the light of the sanctions imposed against Libya.  Therefore, he called on the Committee on Contributions to reconsider the assessment of Libya, based on its capacity to pay.  The Committee, when it considered the methodology in the future, should take into account the negative effects of the current methodology on developing countries and prepare recommendations to deal with all the imbalances.

ANTONIO ALARCÓN ( Costa Rica) said he appreciated the information and report prepared by the Secretary-General and the Committee on Contributions and he agreed with the opinion expressed by the representative of Jamaica on behalf of the Group of 77 and China, and the Rio Group.  On the issue of the methodology for determining the scale of assessments, he said the system is far from perfect and could be improved in the future.   Costa Rica, for example, suffered in 2003 when the methodology was recalculated and its contributions jumped by 95 per cent.  He said it was important for the Committee to present models and alternatives that would help minimize such drastic increases of more than 50 per cent.

Mr. DIAB ( Syria) said he associated himself with the statement of the representative of Jamaica on behalf of the Group of 77 and China.  He said Syria positively viewed the request for exemptions by several Members States under Article 19 of the Charter.  He also took into account the requests of Liberia, Niger and Sao Tome and Principe and called for the support of their request for exemptions because of their difficult economic situations.

He said that countries’ contributions should be based on the capacity-to-pay and these contributions should be fair and equitable.  He noted the view of the Committee on Contributions on the elements of methodology used in the scale of assessments and said that would be discussed during informal consultations.  He believed that the discussion should focus on the best way to reflect a country’s real capacity to pay and correct a methodology that currently caused a majority of the Member States -- developed and developing -- to make payments that were above their capacity to pay.  All countries should make their payments in full and on time.  He noted that some countries had multi-year payment plans that would help them make their payments.  The measure should remain voluntary and not linked to exemptions under Article 19 of the Charter.

DOMINGOS FERREIRA ( Sao Tome and Principe) said that his country’s economy was based on production of some commodities, including cocoa and coffee, as well as fishing and foreign aid.  The situation remained very fragile following a long period of decline in the world price of cocoa, combined with increased import prices, in particular oil.  That placed severe strains on incomes and living standards in the country.   Sao Tome and Principe also had a high debt per capita and its population was living in deep poverty.  Unemployment had been rising.  Taking into account that situation, the Government was not in position to pay its contribution.  The country would honour its obligation as soon as the present economic situation changed.  He asked for the Committee’s indulgence in taking the decision to accept Sao Tome and Principe’s request for an exemption under Article 19.

WANG XINXIA ( China) said that the current scale methodology was a compromise achieved by the whole membership of the United Nations as a result of long hours of hard negotiations on the basis of the principle of capacity-to-pay.  Minimizing uncertainties by maintaining the stability of the scale methodology and the predictability of the scale was vital to ensuring normal operation of the United Nations system.  The principle of capacity-to-pay had withstood the test of time and conformed to the interest of the large majority of Member States.  Any adjustments or changes to the scale could only be made through consensus by the General Assembly.

Some Member States, particularly those from the developing world, had expressed concern over excessive increases in their shares of assessed contributions, she continued.   China’s share for 2004-2006 had jumped by 35.18 per cent over the previous period.  Her country’s position was that, as long as the assessments had been worked out according to the current methodology, China would willingly accept the result of the calculation.  Meanwhile, she had full understanding of and sympathy for the concern voiced by some developing countries.  If excessive increases in their contributions had entailed an economic burden for those countries, some special adjustments might be considered, such as mitigation measures adopted when the Committee discussed the scale for 2004-2006.

She said that, additionally, paragraph 49 of the Committee on Contributions report mentioned systematic measures to phase in large scale-to-scale increases over the scale period.  She would like to receive detailed information about those measures from the Committee.  Whatever the case, it was her understanding that the adjustment of excessive increases in the scale were based on an ad hoc and exceptional basis, in addition to those measures provided by the current methodology.  As for the annual recalculation of the scale, she believed that the issue should be treated with caution.  That was not a simple question of recalculation.  Rather, it would lead to annual renegotiation of the scale, which would consume a huge amount of energy and time and undermine the stability of the scale.

MOHAMMAD TAL ( Jordan) said he associated himself with the statement of the representative of Jamaica on behalf of the Group of 77 and China.  He reaffirmed that capacity-to-pay should be the guiding principle in calculating the scale of assessment.  As the Member States reviewed the elements of the methodology to be used for the calculation of the future scale for 2007-2009, he said every effort should be used to produce a flexible formula that reflected the economic conditions and special circumstances of Member States, especially those in developing countries.

Jordon carefully considered the elements of methodology of the Committee’s report and said income measurements should give a clear, unbiased indication of overall economic performance.  He said that current realities affecting the economic performance of Member States could not be ignored and many least developed countries and developing countries faced regional conflicts or natural disasters that put an end to their previous economic activities.

He maintained the conviction that Member States should pay their assessments to the Organization on time, in full and without condition.  But, in developing countries, circumstances beyond their control might cause a delay.  He believed that multi-year payment plans remained the most useful, voluntary arrangement for countries with economic hardships to meet their obligations to the Organization. He called on all Member States who committed themselves to such plans to do their utmost to implement them.

TENS C. KAPOMA ( Zambia) said he associated himself with the statement made by the Representative of Jamaica on behalf of the Group of 77 and China.  He said the Organization needed a strong and dependable financial base and he fully supported the principle of capacity-to-pay.  He urged that countries who have the ability to pay their contributions as assessed, do so in time, in full and without conditions.

Zambia supported the retaining of the six-year base period in the methodology because many developing countries and least developed countries have fluctuating gross national income over the short term.  A six-year period would help even out the impact of short-term fluctuations in the gross national income data and promote stability in the methodology.

He said the Zambia, despite its status as a least developed country and faced with a weak economy and a huge debt burden, was current in its assessed contribution to the regular budget and efforts were being made to pay for peacekeeping and tribunal budgets.

Mr. YAÑEZ ( Venezuela) supported the position of the Group of 77 and the Rio Group.  The issue under discussion was of particular importance to his country and other countries of the region, which were experiencing economic instability.  He was concerned about some of the elements of the current methodology, which should reflect the real capacity-to-pay.  Some criteria distorted that principle, including the imposition of the new ceiling, which had a negative impact on the economies of some developing countries.  It was necessary to avoid abrupt changes that could have an unpredictable effect on economies.  Such measures should not be adopted on the basis of political criteria.  It was necessary to reassure Governments that their quota would be stable and predictable.  The Committee should provide Member States with clear information that was easy to understand.  He also agreed that multi–year plans should remain voluntary and should not be linked to requests for exemption under Article 19.

ABDELATIF DEBABECHE ( Algeria) said that his delegation endorsed the position of the Group of 77 and China.  In resolution 55/5 B the Assembly had revised the scale as a result of a difficult compromise.  “We should not disturb this”, he said.

The scale for 2007-2009 would be adopted at the next session, he continued, but it was important for the Committee to address the methodology during the current session.  In that connection, he underscored the importance of the scale’s equity, stability and predictability.  He did not object to using the same data as in the current scale.  It was necessary to ensure payment of appropriate contributions on time, in full and without conditions.  At the same time, it was necessary to express solidarity with countries that had economic challenges.  Debt burden adjustment for the neediest countries was important.  Conversion rates needed to be addressed.

Turning to multi-year payment plans, he commended the efforts by States that had made efforts to submit such plans and make payments under them.  He encouraged others to follow suit.  As for arrears, he said that the Organization should not be held hostage by internal workings of Governments.  It was not tolerable that the stability of the financial situation of the United Nations was constantly affected by Member States’ failure to make timely payments to its budget.  Member States had to fulfil their financial obligations to the United Nations according to the Charter.

Mr. MIRMOHAMMAD ( Iran) said that any revisions in the methodology used to calculate the scale of assessments should not lead to another substantial increase in the rate of assessment of some Member States, including developing countries.  He said he appreciated that the Committee on Contributions recognized the problem of large scale-to-scale increases in the rates of assessment and had considered several measures to diminish it.  While he supported measures to mitigate or smooth large increases in scale rates, he stressed that they should not lead to increases in the rate of assessment of other developing countries.

He agreed with the Committee’s recommendation that the scale of assessments for the period 2007-2009 should be based on the most current, comprehensive and comparable period for gross national income.  He said using more current data, if available, would better approximate Member States’ capacity-to-pay.  He noted that the scale of assessments for the period 2004-2006 had been based on data covering periods through 2001 with a two-year time lag.

AHMED FAROOQ ( Pakistan) said he associated himself with the statement of the representative of Jamaica for the Group of 77 and China.  He said that predictable and full payments by Member States was essential and he placed a high priority on the scale of assessments.  A solid system of payments was vital for the financial stability of the Organization.  Capacity-to-pay was a very important element of assessing Member States’ contributions and the sharing of obligations between Member States must be fair.  The selection of the base period was very important.

He urged the Committee to come up with recommendations that would lead to the least amount of distortion when developing statistical data used in the methodology for the scale of assessments.  He said a country’s debt burden should be considered in the methodology.  The Committee should ensure that the system avoids any sudden large increases in payments by Member States.  He hoped that comprehensive discussions during the Fifth Committee’s informal consultations would help the Committee on Contributions create a solid methodology to develop the scale.

RAJIV RAMLAL ( Trinidad and Tobago) associated himself with the position of the Group of 77 and said that the Committee’s deliberations on the scale were taking place against the backdrop of the outcome of the September Summit, where Member States had pledged, among others, to provide the United Nations with adequate resources to implement its mandate.  The first step in that regard was the apportionment of the expenses of the Organization.  The Fifth Committee needed to provide the Committee on Contributions with the necessary guidance on the elements of the methodology to be used in preparing the scale for 2007-2009.  There could be no effective reform and strengthening of the United Nations without adequate resources.  Payment in full, on time and without conditions was a sine qua non for achieving the goals of the reform.

Notwithstanding the distortions emanating from the political decisions relating to the current methodology, his delegation attached great importance to the principle of the capacity-to-pay as the fundamental basis for determining the scale.  Discussions on the matter should not lose sight of the agreements arrived at in 2000, which had not only fixed the methodology for two successive scale periods, but also resulted in a significant burden shifting.  To lose sight of those developments would ignore the lessons to be learned.  The single most glaring weakness of the current scale related to large scale-to-scale increases in some countries’ assessments, which particularly affected developing countries.  The reconciliation of economic realities with assessments was of the utmost importance.  It was a source of concern that developing countries’ economies were growing at an average of 5 per cent, while their assessments rose as high as 120 per cent from one scale to the next.

As for the proposal regarding annual recalculation of the scale, he said it would lead to protracted renegotiations in the Fifth Committee and would be impractical.  Once fixed, the scale should not be subject to revision, unless there were substantial changes in the capacity-to-pay.  He also cautioned against limiting the debt-burden adjustment to a select group of Member States.  In considering exemptions under Article 19, he emphasized the importance of Member States making payments to the budget in full, on time and without conditions and the need to extend sympathetic consideration to those countries that experienced genuine economic difficulties.  All Member States requesting exemptions should submit the relevant information to support their claims.  Countries should be encouraged to submit multi-year plans to reduce their arrears, but such plans should remain voluntary and not be automatically linked to the granting of exemptions under Article 19.

Capacity-to-pay could not be measured through simplistic mathematical formulae alone, he added.  Gross national product (GNP) per capita did not by itself measure the welfare or economic development of countries.  His country had consistently argued, along with other small island developing States, that national income data tended to give an extremely distorted picture of economic reality.  The Global Conference on Small Island Developing States had recognized the particular vulnerability of those countries and the need for the international community to take it into account.  While the per-capita income of many small island States tended to be higher than that of developing countries as a group, their incomes were generally unstable over time.  Natural and man-made disasters, difficulties in international markets and recession in some developed economies often had a dramatic effect on small island States.  In short, small island developing States, like Trinidad and Tobago, given their high per-capita incomes, paid a relatively high price for the United Nations.  It would be important for the Assembly to take their particular problems and vulnerabilities into account, when developing a new scale methodology.

PABLO BERTI OLIVA ( Cuba) supported the statement by Jamaica on behalf of the Group of 77 and China and highlighted a few matters of particular interest to Cuba.  In considering the methodology for 2007-2009, it was necessary to focus on finding a methodology that would be more adequate when measuring Member States’ capacity-to-pay.  In that connection, he emphasized the full validity of the capacity-to-pay principle, which should serve as a basis for other elements and ideas.  Also important were criteria pertaining to the rates of exchange.  The need to take into consideration some other factors that had an impact on the situation of a given country must be upheld in the future.

While intending to follow up on several recommendations of the Committee on Contributions in informals, he also took note of the fact that the Committee on Contributions had not been able to arrive at recommendations on two topics of essential importance:  adjustments for low per-capita income and debt burden.  Those must also be upheld.  Assessing the contributions was an extremely sensitive topic, which had a direct impact on Governments’ capacity to honour their financial obligations to the Organization in good faith.  The Governments must express their political support to the United Nations by honouring their obligations to pay on time, in full, and without conditions.  A distinction must be made between non-payment by a country experiencing genuine economic difficulties and non-payment for political reasons.

The ceiling distributing the rest of points among other States, including developing countries, constituted a serious distortion of capacity-to-pay and must be eliminated, he continued.  The main contributor was paying much less than it should, thanks to the imposition of an arbitrarily determined upper limit, which had been further reduced during the fifty-fifth session.  The agreement achieved in adopting resolution 55/5 was based on promises to pay by the main contributor after the Congress had set conditions, based on that country’s arrears to the United Nations.  However, five years later, the situation of those arrears had not substantially improved.  The international community was still looking at similar operations and manoeuvres, with the Congress trying to hold back funds if the Organization did not yield to its demands for reform.

He was gratified to see the recommendations of the Committee on Contributions in paragraphs 83 to 124 of its report, he said.  He believed they did justice to the difficulties encountered by a group of developing countries, and he hoped that practice would continue.  Liberia, Niger and Sao Tome and Principe should be granted an exemption under Article 19, just as other members recommended by the Committee on Contributions.  On multi-year plans, he took note of the information provided and reiterated that the plans should remain voluntary and should not be linked to any other measures, including examination of requests for exemption under Article 19.

Mr. ABANI ( Niger) said his delegation endorsed the statement of the representative of Jamaica on behalf of the Group of 77 and China.  He noted that the Niger had submitted a 2 September letter to the Advisory Committee (document A/C.5/60/2), in which it requested an exemption from the General Assembly under Article 19 of the Charter, so it could continue to vote.  The Niger reaffirmed its commitment to pay its assessments in accordance with the multi-year plan and fully pay its arrears.  The difficult economic situation in the Niger is due to many factors, including an April 1991 coup d’état and other unpredictable events, that ranged from drought to locusts.

He thanked all members of the international community that had supported the country during its difficult times.  And he thanked all countries who remained in solidarity with its approach for an exemption, particularly the Group of 77 and China.  He reiterated the Niger’s request for an exemption under Article 19 of the Charter, so the country could be authorized to vote until June 2006.

FAMATTA ROSE OSODE ( Liberia) said she associated herself with the statement of the representative of Jamaica on behalf of the Group of 77 and China.  She said that because of unforeseen circumstance, a May letter from the Liberian Foreign Minister requesting an exemption under Article 19 of the Charter arrived less than two weeks before the deadline for consideration by the Committee.  The Committee then decided not to take action on its request.

She said communication with Liberia was extremely difficult and she was at the Fifth Committee’s session to appeal for a recommendation to the General Assembly for a dispensation, so Liberia could continue to vote in the sixtieth Assembly.  Liberia wanted to contribute to the ongoing deliberations on the far-reaching reforms initiated by the Secretary-General to ensure greater transparency and accountability of the Organization.

She said Liberia was a small country with potential economic resources that must be channelled in the right direction.  She said that, because of conditions beyond the Government’s control, it had not paid its arrears, which stood at $1.15 million as of 15 July 2005.  She said the country had experienced severe political and economic problems that began more than 15 years ago.  She noted the people’s efforts toward good governance and democracy with the recent elections.  She added that Liberia’s new Government would demonstrate its credibility by committing to a multi-year plan in 2006.

NONYE UDO ( Nigeria) associated herself with the position of the Group of 77 and China and advocated reviewing the time frame for exemptions under Article 19, saying that it should last for a year.  That would not prevent the submission of either requests for exemptions, or multi-year plans.  Her delegation sincerely sympathized with those Member States that had been unable to meet their obligations to the United Nations due to severe economic difficulties.  She supported extending exemptions to those States that had requested them, including the Niger, Liberia and Sao Tome and Principe.  She joined the Committee on Contributions in commending those Member States that had made the effort, despite serious difficulties, to commit and sustain payments on multi-year payment plans, with a view to reducing and eventually eliminating their arrears.  It was, however, important to reiterate that those plans remained purely voluntary.

On the measures to encourage payment of arrears, she noted that the Committee on Contributions had not proposed any new measures, except that the deadline for timely payment be set at 35 days from the date of issuance of assessments, instead of 30 days from the date of their receipt.  It remained to be clarified how Member States could ascertain that the assessments would be received by all Missions on the day of their issuance.

In conclusion, she said that with the long-awaited and agreed timeline for the review of the scale fast approaching, all delegations should collaborate to achieve the common objective of sending a clear mandate to the Committee on Contributions.  She trusted that the Committee on Contributions would provide the Fifth Committee with concrete proposals to guide its deliberations on that crucial issue.

SONG YOUNG-WHAN (Republic of Korea) recalled that the Committee on Contributions had reached agreement on such elements of the scale for 2007-2009 as income measure, criteria for deciding when to replace market exchange rates, and appropriate price-adjusted rates of exchange.  As a technical body, it should make recommendations based on accurate statistical data, taking into account countries’ capacity to pay.  Having experienced a dramatic change in its assessment, his country believed that the Committee on Contributions should pay due attention to making the scale predictable and avoiding sharp fluctuations as much as possible.  It was important to reach agreement on the matter in order to promote both the viability of the Organization and financial discipline.

HUSSAIN ALBATTAWI ( Iraq) said Iraq associated itself with the statement of Jamaica made on behalf of the Group of 77 and China.  He believed that the multi-year payment plan was a good option for the payment of arrears and as a vehicle to uphold Member States’ obligations to the Organization.

He said he believed that the Committee on Contributions had taken countries’ economic situation into account when devising the scale of assessments.  He welcomed methodology that would consider the future economic situation of nations that could not pay their assessments in full.  He encouraged Member States with large arrears to consider the multi-year payment plan, as had been proposed.

The Committee had noted that with Iraq’s severe economic situation, the non-payment of Iraq’s financial obligations was beyond its control.  At the same time, Iraq engaged in strong efforts with the Security Council and the Secretariat to uphold its financial obligations from funds that were created for Iraq based on a Council resolution.  That cooperation had led to a successful conclusion and Iraq paid its obligations to the United Nations and the budget of the peacekeeping operations and the Capital Master Plan.  Since Iraq had fulfilled its financial obligations, he would like the information included in the Committee on Contributions’ next report.

TAKESHI MATSUNAGA ( Japan) said he appreciated the statement made yesterday by the representative of Slovenia on the unpaid assessed contributions of the former Yugoslavia.  He said the writing off of arrears should be avoided.  He looked forward to concrete proposals on the issue and to have a conclusion on that important matter as the Committee resumed its operations in March.

DIEGO SIMANCAS ( Mexico) said that, for his country, it was of crucial importance to comply fully with its financial obligations to the Organization.  In that context, he recognized the tremendous efforts of many countries to make their payments in full and on time.  That was part of his country’s unswerving commitment to the United Nations.

He said that the Committee on Contributions must review its methodology to calculate future scales as a priority to better reflect the real capacity-to-pay and avoid abrupt increases that did not even remotely reflect the real rate of growth of Member States’ economies.  As an example of such an abrupt change, he mentioned his country’s increase in assessed contributions that was higher than the entire assessment of several European countries taken together.  In the debate on the issue, it had emerged clearly that the assessed contributions were an unequal burden on some States, since in some cases in did not reflect the genuine capacity-to-pay or special responsibilities of some countries.  Hence, he emphasized the importance of providing the Committee on Contributions with all the required inputs during the current session, so its experts would be able to prepare a scale for the next session, which would be acceptable to all.

The Committee then decided to defer to its first resumed session the consideration of the issue of unpaid assessed contributions of the former Yugoslavia, as contained in document A/60/140.

Responding to comments from the floor, UGO SESSI, Chairman of the Committee on Contributions, thanked the speakers for their appreciation of the work of the Committee.  He took note of several statements regarding the issues of considerable increases in assessments and reassured members of the Committee that those problems were at the very heart of the Committee’s work.  Paragraph 49 of the report before the Committee clearly demonstrated the magnitude of the discussion.  The issue would be considered in more depth in informal consultations, and he hoped to receive indications of the work to be accomplished next year from the Fifth.

Zambia had referred to a position of the Committee in respect of least developed countries ceilings, but the Committee did not have a common position on that matter, he continued.  Some members had even advocated its abolishment, but others were not in agreement.  The consideration of the matter would continue.  Exchange rates were an important problem, as conversion to common currency was the starting point of work on the scale.

The representative of Iraq had referred to the fact that his country had been able to meet its commitments with respect to its arrears and asked for that information to be included in the next report, he said.  In his introduction yesterday, Mr. Sessi had clearly stated that Iraq had made its payments, and that information would be included in the next report.

What the Committee on Contributions anticipated from the Fifth Committee with respect to methodology, he said, were firm indications with respect to the Committee on Contributions’ own recommendations.  The Committee was also looking for guidelines with respect to the part of the methodology on which it had not yet reached common position.  As for the measures to encourage payment of arrears, he called attention of the delegates to some technical suggestions made by the Committee, including the proposal to set deadlines for payment from the date of issuance of assessments, setting it at 35 days.  A draft revision of financial regulation 3.4 was presented in annex II to the Committee’s report.  The Committee also reaffirmed its recommendations that the Assembly should encourage Member States with outstanding assessments and credits to authorize the Secretariat to apply such credits to the amounts outstanding, in order to reduce their debt.  Several speakers had expressed reservations in that regard, and an exchange of views would be useful.

LIONELITO BERRIDGE, Chief, Policy Coordination Unit, Programme Planning and Budget Division, then introduced the Secretary-General’s report (document A/60/363) on the proposal to lift the suspension of recruitment for posts in General Services and related categories.

He said that General Service vacancy rates had trended upward over the course of the biennium.  Realized vacancy rates totalled 3.2 per cent for 2004 and 6.5 per cent for January to July 2005.  The 6.5 vacancy rate for the current year was considerably higher than the normal rate for General Service vacancies, which was usually at a maximum rate of 2 to 3 per cent.

As a result of the suspension, competition among departments for staff was high and too much time was devoted to dealing with vacancies and training of staff.  Meanwhile, vacancies in specialized areas had been extremely difficult to fill.  The departments had used many interim measures that are detailed in the report.  He added that the overtime measures are short-term and could not be maintained.

RAJAT SAHA, Acting Chairman of the ACABQ, introduced the Advisory Committee’s third report on the suspension of recruitment for posts in the General Service (document A/60/7/Add.2).  He said the report was brief and self-explanatory.

Speaking on behalf of the European Union and associated States, WILLIAM LONGHURST ( United Kingdom) said that the Secretary-General’s report came as a disappointment to the Union.  When the Assembly introduced a recruitment freeze for General Service staff in the context of the regular budget negotiations in 2003, the intention had been to address what it saw as a high proportion of General Service to Professional staff in comparison to other organizations.  The Assembly expected to stimulate “a re-think” in the Secretariat of how best to assign and use the General Service staff resource in an age of increased automation, new technologies and more flexible skills expectations from all levels of staff.  In the countries of the European Union, for example many traditional support tasks had been eliminated or subsumed into the job descriptions of professional-level staff.

That did not mean that the requirement for support tasks no longer existed, he said.  On the contrary, a whole new range of demands had emerged, but the Union had hoped that the experience from the freeze would address those points.  However, the report simply produced a list of problems encountered in finding replacement General Service staff for existing slots.

The ACABQ had identified the shortcomings of the report, he continued.  He was concerned that the information requested by the Advisory Committee on specialized functions, numbers of posts involved and their distribution across departments had not been readily available.  Furthermore, he did not understand why 1 December was proposed as the date to lift the suspension, when later that very month, a decision on General Service numbers would be taken in the context of the 2006-2007 budget.  He looked forward to receiving information on the survey carried out by consultants as mentioned in paragraph 12 of the ACABQ report.  Such a document would be extremely useful when considering the Secretary-General’s proposal to lift the recruitment freeze, as well as the issue of General Service staff allocation in the context of the next budget.

HITOSHI KOZAKI (Japan) said that his delegation had supported the freeze, mindful of the large number of retirements forecast, increased investment in information technology and the need to review the working methods of the Secretariat with the aim of streamlining administrative processes, so that resources could be shifted from support functions to substantive activities.  Now, it was necessary to examine whether the Secretary-General’s report met the requirements of resolution 59/276 in terms of its comprehensiveness.  The Advisory Committee’s report had confirmed his impression that the Secretary-General’s report was neither comprehensive, nor persuasive.

At the same time, he was interested to learn about an analysis by an outside consultant now under way.  Although he continued to believe that a freeze on new recruitment on General Service and related categories was a valid idea, he was ready to consider the Secretariat’s analysis and its plan of action, as appropriate.  The issue needed to be considered in a comprehensive way, so that it would contribute to the development of concrete proposals on a time-bound plan for reducing duplication, complexity and bureaucracy in administrative processes and procedures.

TAYLOR ROBERTS ( Jamaica), speaking on behalf of the Group of 77 and China, said she would have comments on the issue of the proposed lifting of the suspension of recruitment of General Services positions.  She agreed with the suggestion of Japan that a more comprehensive review of the issue needed to be undertaken.

* *** *

For information media • not an official record