Sixty-second General Assembly

Fifth Committee

18^th Meeting (AM)

UNITED NATIONS CAN MEET EVER-INCREASING CHALLENGES ONLY IF MEMBER STATES

PAY CONTRIBUTIONS IN FULL, ON TIME, SAY SPEAKERS IN BUDGET COMMITTEE

As the Fifth Committee (Administrative and Budgetary) took up the financial situation of the United Nations this morning, many speakers insisted that the United Nations could perform its ever-increasing and challenging tasks only if all Member States accepted their responsibility to pay their contributions to the Organization in full, on time and without conditions.

Commenting on the fragility of the Organization’s financial health, the representative of Australia, also speaking on behalf of Canada and New Zealand, said that the only certainty for the United Nations was budgetary shortfall.  If the stream of financial contributions “became a trickle”, it was because the Member States had turned off the tap.  Calling on the Organization’s membership to break the cycle of under- and non-payment of dues, he said obligations must be met and resources must be provided to enable the United Nations to discharge the bestowed mandates.

Member States could do more, both individually and collectively, in that regard, he said.  The Fifth Committee must pursue budget discipline and efficiency.  Other intergovernmental processes, such as the Committee for Programme and Coordination and discussions on mandate review, could eliminate duplicative and unnecessary activities.  A system must be encouraged, whereby the Secretariat was rewarded, not penalized, for finding savings.

Reiterating the importance of the “biannual snapshot” of the United Nations finances that was provided by the Secretariat, the representative of Portugal said, on behalf of the European Union, that this time, the picture was “somewhat more mixed” than usual.  Put together, the regular budget, tribunals, peacekeeping and capital master plan had increased the Organization’s total requirements from roughly $5.6 billion in December of last year to some $9.2 billion now, which was very substantial.  That situation raised the question of the sustainability of such a burden on Member States, including the Union, which considered the need to adequately finance the mandates to be linked to the promotion of fiscal discipline.

Japan’s representative agreed saying, clearly, the larger the assessment, the harder it became for Member States to fulfil their commitments.  While it was the responsibility of Member States to pay assessments, the Secretariat should play a role in addressing the problem.  He stressed the importance of implementing mandates within the existing resources and absorbing additional costs by increasing efficiency.  In submitting the budget proposal for 2008-2009, it was incumbent on the Secretary-General to present Member States with his overall vision of the programme and a full picture of the anticipated needs for the next two years.  A piecemeal approach and submission of additional requests on an ad hoc basis were not conducive to consensus approval of the budget.

Several speakers, including the representative of the Russian Federation, expressed concern that, despite the fact that the number of States paying in full and on time had increased, the bulk of the $836 million in unpaid assessments was still attributable to a small group of Member States, with 94 per cent of that amount owed by the Organization’s major contributor.

In that connection, the representative of Pakistan, speaking on behalf of the “Group of 77” developing countries and China, said that the Organization would have to depend on borrowing from the reserve account and closed peacekeeping mission accounts to continue its business and that was mainly due to the large outstanding payment by one Member State.  That systemic problem needed to be resolved permanently.  The Group understood the procedural difficulties that led to short delays in the payment of dues to peacekeeping budgets.  It should be possible, however, for all Member States to settle their unpaid assessments within a certain time period.  The negative implications of persistent non-payment needed to be taken seriously by concerned Member States.

The representative of India -– one of the largest troop-contributing countries -- was alarmed at the $3.5 billion outstanding for peacekeeping assessments as of 31 October 2007, as well as the projected $731 million debt to Member States providing troops and equipment at the end of 2007.  There was a real possibility of the Secretariat not being able to make the next quarterly payment to troop contributors until the early months of 2008.  While the United Nations Controller had given assurance that he would monitor the peacekeeping operations cash-flow situation and do his utmost to make the next quarterly payment as soon as sufficient cash was available, India was concerned that his optimism was based on “indications” that the major contributor might make a partial payment in the near future.

That concern was shared by several other speakers, including the representative of another large contributor of troops, Bangladesh, who said that countries that responded to the United Nations’ calls for the sake of international peace and security were mostly developing ones. They mobilized their personnel, material and other resources, often under difficult circumstances.  Delays in reimbursements added additional strain on such countries.

Also participating in today’s debate were representatives of the Philippines (on behalf of the Association of South-East Asian Nations (ASEAN)), Dominican Republic (on behalf of the Rio Group), Singapore, Republic of Korea, South Africa, Malaysia, Nicaragua, Cuba, China, Venezuela, Brazil, Mexico, and the United Republic of Tanzania.  Speaking in exercise of the right of reply were representatives of the United States and Cuba.

The United Nations Controller, Warren Sach, also provided an update on the latest status of contributions by Member States, including that the United States had made a partial payment of $100 million to the regular budget and $218 million to the peacekeeping budget.

The Committee will take up the financing of the newly established African Union-United Nations Hybrid Operation in Darfur (UNAMID) at 10 a.m. Monday, 19 November.

Background

The Fifth Committee (Administrative and Budgetary) met this morning to discuss the means to improve the financial situation of the Organization, which was presented to the Committee by the United Nations Controller on 7 November.  For details on the presentation, see Press Release GA/AB/3825.

Statements

United Nations Controller WARREN SACH said that the Committee had before it document A/62/539, which outlined the financial situation of the United Nations that he had presented last Wednesday.  He noted that paragraph 30 of that document noted that Brazil had fully paid its dues and payable assessments as of 31 October and, thus, joined 22 other States in that position.  He apologized for omitting that information during his presentation.  An additional four Member States had also paid in full since then:  Monaco, Mozambique, Turkey and Zambia.  Panama had since paid its dues to the regular budget, and Chad to the Tribunals and capital master plan.  The Republic of the Congo and Mexico had also paid in full to the plan since the presentation.

IMTIAZ HUSSAIN (Pakistan), speaking on behalf of the “Group of 77” developing countries and China, reaffirmed that full and timely payment of assessments to the United Nations budgets was a Charter obligation and was imperative for the predictability of the financial resources of the Organization and effective implementation of all legislative mandates.  The Group regretted that the Organization’s overall financial situation remained weak.  There had been no major improvement in the payment of assessed contributions since last year.  The Organization would have to depend on borrowing from the reserve account and closed peacekeeping mission accounts to continue its business, and that was mainly due to the large outstanding payment by one Member State.  That systemic problem needed to be resolved permanently.  The Group understood the procedural difficulties that led to short delays in the payment of dues to peacekeeping budgets.  It should be possible, however, for all Member States to settle their unpaid assessments within a certain time period.  The negative implications of persistent non-payment needed to be taken seriously by concerned Member States.

Continuing, he reiterated the Group’s opposition to cross-borrowing among peacekeeping operations and said that cash surpluses in any mission should be preferably utilized for outstanding liabilities, such as troops and equipment payments or returned to individual Member States.  The Group was concerned over the outstanding amount of $731 million in debt to Member States for providing troops and equipment to peacekeeping operations.  Despite some improvements in that regard, the overall picture remained grim.  The information about the real possibility of the Secretariat not being able to make the next quarterly payment to troop contributors until the early months of 2008 was a matter of serious concern, particularly since most troop-contributing countries were also developing countries not in position to sustain their troops and maintain equipment on their own for an indefinite period of time.  The Group understood that the principal reason for such a situation was the delays in payments of contributions.  He hoped the expected payment by a major contributor would reach the Organization soon, as that was critical to providing the United Nations with some financial stability.

Noting positive developments with regard to the financial situation of the Tribunals, he also noted that 107 Members had already made payments to the capital master plan budget.  He urged the Secretary-General to ensure full and effective implementation of the past and future resolutions on the project.  He also expressed the Group’s appreciation to all those Member States that had paid their assessments to the Organization.  He hoped that others would follow their example.  The Group also urged the States with unpaid assessments to settle them as soon as possible.  That was especially applicable to those who had the capacity to pay.

EDUARDO RAMOS ( Portugal), speaking on behalf of the European Union, reiterated the importance of the biannual snapshot of the United Nations finances.  It allowed delegations to put in context the consequences of the day-to-day work of the Committee, as well as the Organization’s ability to discharge the tasks that it was requested to perform.  It also provided a clear indication of the ability and/or willingness of the individual Member States to fulfil their responsibility for the financial well-being of the Organization -– or lack thereof.  He noted that the Controller had reiterated the oft-heard, but unfortunately not-always-heeded, appeal for all Member States to pay assessed contributions in full and on time.  The Union agreed with that appeal, adding that payments must be made without conditions.

Continuing, he said that, in past instances, those presentations had shown a picture of moderate improvement.  This time, the picture was somewhat more mixed.  He said that the exponential increase in assessments put an additional burden on Member States’ financial responsibilities towards the Organization.  Regular budget, tribunals, peacekeeping and capital master plan put together had increased from roughly $5.6 billion in December of last year to some $9.2 billion now, which was very substantial.  That situation raised the question of the sustainability of such a burden on all Member States, including the Union, which considered the need to adequately finance the Secretary-General’s mandates to be linked to the promotion of fiscal discipline.  He noted that, thus far, seven more States had fully paid their regular budget assessment, as compared to October of last year, totalling 129, compared to 122 in 2006.  He hoped that, in 2007, that upward trend would be continued.  He emphasized that, as before, outstanding assessments were massively owed by a single Member State.

In peacekeeping, he said, outstanding assessments had increased from almost $1.9 billion by December 2006 to some $3.5 billion now.  He said that, as peacekeeping assessments continued to grow, the trend of growing outstanding assessments was unlikely to be reversed.  He said that the European Union renewed its commitment to the punctual and unconditional payment of its assessed contributions and called on all others to do likewise.  Regarding Tribunals, the picture was rosier.  As Tribunals moved towards the end of their work, he expected their future budgets to diminish correspondingly.  Likewise, for the capital master plan, he said that, due to its unique financial mechanism, the state of play was not fully comparable.

Concluding, he said that the Union believed that the United Nations could perform its ever-increasing and challenging tasks only if all Member States accepted their responsibility to pay their assessed contributions in full, on time and without conditions.  He noted that the Union accounted for about 40 per cent of all assessed contributions to the United Nations, and it would continue to strive to ensure those resources were used in the most accountable, efficient and effective manner.

ROD KEMP (Australia), speaking on behalf of Canada, Australia and New Zealand, said that, although the Committee repeatedly took up the topic of improving the financial situation of the United Nations, things did not seem to improve.  The overall picture was mixed and sometimes dire.  He noted that, while 122 States currently fulfilled their Charter obligations and paid their assessed contributions in full and on time, some did not come close to paying in full or on time.  Therefore, the only certainty for the United Nations was budgetary shortfall.  He said the United Nations Charter was very clear on the matter of finances for the Organization.  Continuing, he called Member States the United Nations’ revenue stream -– if the stream became a trickle, it was because the Member States had turned off the tap.

Calling on the Organization’s membership to break the cycle of under- and non-payment, he said obligations must be met and resources must be provided to enable the United Nations to discharge the bestowed mandates.  While he understood that Governments might find it difficult to fulfil each and every financial obligation, both domestically and internationally, he noted that assessments and unpaid assessments had risen.  The net result was that, this year, the Organization had to do more with less, and that was problematic.  While the United Nations had some mechanisms to stopgap those shortfalls, such measures were limited and temporary, at best.  They also penalized the Member States and resulted in the United Nations late repayment of debt, which affected, in particular, troop-contributing countries and those who paid in full.

He believed Member States could do more, both individually and collectively.  The Fifth Committee must pursue budget discipline and efficiency.  Other intergovernmental processes, such as the Committee for Programme and Coordination and discussions on mandate review, could eliminate duplicative and unnecessary activities.  A system must be encouraged whereby the Secretariat was rewarded, not penalized, for finding savings.

HILARIO G. DAVIDE, JR. (Philippines), speaking on behalf of Association of South-East Asian Nations (ASEAN), said that a fiscally healthy and soundly managed United Nations was sine qua non to the effective pursuit and implementation of programmes and activities designed to promote and accomplish the three main pillars of the United Nations:  peace and security; human rights; and development.  ASEAN had noted the mixed picture of the United Nations’ fiscal health, as described by the Controller.

ASEAN reaffirmed the need for faithful compliance with the legal obligation of Member States to bear the expenses of the Organization, he went on.  At the same time, due consideration needed to be given to Member States that were temporarily unable to meet their financial obligations in a timely manner, due to valid and justifiable reasons, such as genuine economic difficulties.  ASEAN welcomed the information that the number of Member States that had paid regular budget assessments in full by 31 October 2007 was 126, four higher than on the same date last year.  The Association was, however, concerned at the disproportionate increase in unpaid assessments, concentrated among a few Member States.  He hoped that positive action would be taken by those Member States, so that the general membership would be able to see a clear and positive picture of the United Nations’ financial situation by the end of the year.

He reiterated ASEAN’s continuing unease over the unacceptable practice of cross-borrowing from closed peacekeeping missions and noted the larger amount available for cross-borrowing this year, at $190 million as compared to $41 million last year.  While commending the United Nations for its creative cash-flow management, he urged the Organization to undertake other efforts to minimize, if not eradicate, the practice of cross-borrowing.  He also noted with concern the unresolved problem of timely payment by the Organization of its debts to Member States providing troops and equipment for peacekeeping operations.  The information that the amount outstanding by the end of the year was higher than the earlier projection, and that there was a possibility that the Secretariat would not be able to make the next quarterly payment to troop contributors until early next year, was not at all encouraging.  Member States that responded to the call to contribute to the maintenance of international peace and security, often while facing difficult domestic circumstances and economic strain, were mostly developing countries, and delays in reimbursement placed additional burdens on them.

OLIVIO A. FERMIN ( Dominican Republic), speaking on behalf of the Rio Group, said that financial indicators of the United Nations for 2007 reflected an uncertain situation.  The total debt to the United Nations was $836 million at the end of October, 94 per cent of that corresponding to the dues of one Member State.  He regretted that it continued to adversely affect the financial situation of the Organization and its ability to carry out its activities.  He was concerned over the fragility of the financial situation and the situation of available cash, if that trend was maintained.  As mentioned by the Controller, that would necessitate taking money from the contingency fund.

Everything possible must be done to fulfil Member States’ financial obligations to the United Nations on time and in full, he said.  Some delays could be explained by the difficulties experienced by Member States, including their fight against poverty and humanitarian emergencies.  In general, members of the Group had been paying in full, despite the difficulties they experienced.  He also expressed appreciation towards Member States that had paid in full to the Organization this year.

Regarding peacekeeping, he noted with concern that debt by Member States had more than doubled since last year, and unpaid assessments were also concentrated in some Member States.  The Group was also concerned over debt in reimbursement to troop and equipment contributors, in particular in the Democratic Republic of the Congo, Cyprus, Kosovo and Haiti.  The Group had particular interest in dues payment to troop contributors, so that they could continue to provide troops for missions.  He also noted the contributions made to the International Tribunals and expressed hope that the situation would continue to develop in the same spirit.  He was pleased to see an increase in the number of countries that had paid off all their obligations at the end of October.  As for the capital master plan, he encouraged Member States to continue supporting the project, as had been done by the States in his region.  He affirmed the obligation of all Member States to support all the costs of the Organization without exception, in the proportion determined by the Assembly and in conformity with the Charter.

HOE YEEN TECK ( Singapore) aligned with the statement made on behalf of the Group of 77 and China, and said Member States were regularly reminded of the need to build a strong and dependable funding base for the United Nations, so as to enable the Organization to deliver on its mandate; but year after year, that request was ignored.  As a result, the United Nations found itself operating under precarious financial conditions.  That lack of predictability in payments applied not just to the regular budget, but also to the peacekeeping operations, tribunals and the capital master plan.  Continuing, he noted that 126 Member States had paid their regular budget assessments in full by 31 October 2007, but that represented only 76 per cent of the total assessed contributions.  He said $836 million remained outstanding, with almost 94 per cent owed by one contributor.  The contributions situation for the Tribunals and the capital master plan were equally unsatisfactory.

Noting that those financial “difficulties” were entirely avoidable, he stressed that some countries faced genuine difficulties in paying their assessments.  He empathized with them and said they did not constitute a large proportion of the budget.  The real issue was the late and non-payment by major contributors.  It was not about asking them to pay more than they were assessed.  Rather, it was simply about asking them to pay on time and in full.  That approach would go a long way to mitigating some of the Organization’s financial difficulties.  It was also not a difficult solution to implement if Member States –- major contributor countries in particular -– would cooperate.

He was aware that the United Nations financial situation was also dependent on how well resources were managed.  Issues such as efficiency and accountability of the various United Nations entities had come to the fore.  Where there were deficiencies, the Organization must have the wisdom to learn from mistakes and the will to set things right.  Above all, the United Nations had to have a fair and transparent accountability framework to ensure that United Nations staff were able to discharge their responsibilities and measure their achievements, without fear or favour.  The United Nations’ management, therefore, played a critical role.

Concluding, he urged Member States to honour their assessed contribution in full, on time and without conditions.  That simple act would help the United Nations immensely.  The practice of certain Member States to withhold contributions in the name of addressing the inefficiencies of the United Nations was not the right way to go.  Inefficiencies should be addressed in a systematic, objective and consultative way.

MUHAMMAD A. MUHITH ( Bangladesh) expressed concern that unpaid assessed contributions to the regular budget had increased by $175 million and stood as high as $836 million, despite the fact that the number of countries that paid their regular budget contributions had also increased.  The available cash resources, in the vicinity of $460 million, did not appear promising with the reporting that $86 million might have to be borrowed from reserve accounts by the end of the year.  The financial situation was expected to show some improvement by the end of 2007, but that was dependent on the mercy of a handful of countries.  It was evident, as always, that unless significant payment was received from those countries, the financial health of the United Nations would never improve and the Organization would remain crippled.

As a Member State that had been particularly attentive in paying its assessed contributions to regular, peacekeeping, tribunals and capital master plan budgets, that situation made Bangladesh wary.  His country urged that Member States pay what they were supposed to in full, on time and without conditions, in keeping with their obligations under Article 17 of the Charter.  Nevertheless, the cases of those Member States that were temporarily unable to fulfil their financial obligations for reasons beyond their control should be considered sympathetically through established procedures.

On the peacekeeping budget, he noted that $190 million was being made available for cross-borrowing by active peacekeeping operations and other accounts, including the regular budget and International Tribunals.  No matter how thin that margin was, that unhealthy practice of cross-borrowing would not have been required if there had been timely payment of assessed contributions, he stated.

He expressed his country’s concern that the Organization’s debt to Member States on account of troops and contingent-owned equipment d been projected at $731 million at the end of 2007.  Also, as had been reported, due to delays in the receipt of contributions, there was a real possibility of not making any payments to troop-contributing countries in the final quarter of the current year.  Countries that responded to the United Nations’ calls for the sake of international peace and security were mostly developing ones.  They mobilized their personnel, material and other resources, often under difficult circumstances.  Delays in reimbursements added additional strain on such countries.  Bangladesh, as one of the largest contributor of troops, emphasized the need for the Organization to pay dues in a timely manner.

PARK HEE-KWON ( Republic of Korea) said that financial resources were the most visible and practical means of realizing the United Nations’ vision and intentions.  Like other organizations, financial stability and sustainability were fundamental to the United Nations’ global commitments.  Without financial health, the Organization could not take the steps necessary to meet the world’s changing needs.  The primary responsibility for the United Nations’ strong financial base rested in the hands of its stakeholders, the Member States.  Paying assessments was their intrinsic obligation.  Based on that understanding, the Republic of Korea had cleared its accumulated outstanding assessments in the first half of this year and was also taking the required steps to pay its newly assessed contributions.

The obligations of Member States did not, however, exempt the Secretariat from its financial responsibility, he went on.  The Secretariat’s first obligation was to observe the financial rules and regulations, but that was not sufficient.  As leading international civil servants, pursuing maximum efficiency and effectiveness in their activities and expenditures in a way similar to what obtained in the private sector was also one of the United Nations’ unavoidable duties.  The Republic of Korea concurred that the financial situation of the United Nations for 2007 revealed a mixed picture, but found some indicators to be quite disappointing.  It was concerned that unpaid assessments as of 31 October 2007 in all areas -– regular budget, tribunals, peacekeeping, and the capital master plan -– exceeded the level on 31 December 2006.  If a few Member States did not take prompt action, the regular budget’s cash position would turn into red during the current month.

He added that the hidden causes of delayed payments could not be overlooked.  His country believed that unpaid assessments were not the result of lack of fiscal responsibility, but were mainly caused by the rapid increase in budget expenditures -– among others, in peacekeeping operations.  That placed an excessive burden on the Member States vis-à-vis their domestic audiences.  He reiterated the importance of prioritizing budget expenditures and eliminating duplication in spending.

He expressed pleasure that, despite the increase in liabilities compared to 2006, the Organization’s debt to Member States at the end of the year appeared to have decreased by about 30 per cent.  Taking into account the inherent risks in direct participation in peacekeeping operations, timely reimbursement of costs incurred in providing troops and equipment was a precondition that guaranteed the sustainability of those operations.  Active cooperation with United Nations activities deserved to be rewarded expeditiously.

Turning to the capital master plan, he expressed his country’s strong support for the project, in particular the accelerated strategy IV suggested by the Secretary-General.  He said that his Government would make every effort to pay the assessed contribution on time and in full and urged the Secretariat to complete the renovations on schedule and within the financial limits approved by the General Assembly.

JUN YAMADA ( Japan) said it was the responsibility of every Member State to pay its assessments on time and in full.  The Government of Japan had faithfully fulfilled its responsibilities in the past, despite an extremely difficult financial situation in recent years, and it would make every effort to meet those responsibilities in the future.  For the regular budget, the Controller had indicated that unpaid assessments had increased by $175 million in the one-year period ending 31 October.  To understand that figure from a different perspective, one should consider the sharp increase in the assessment itself.  As of October 2007, regular budget assessments had increased by $314 million from a year ago.  Clearly, the larger the assessment, the harder it became for Member States to fulfil their commitments.  As the growing assessments burdened the national budgets, timely and sufficient payment became more difficult.

While it was the responsibility of Member States to pay assessments, the Secretariat should play a role in addressing the problem.  For instance, it was expected to make the utmost effort to implement mandates within the limited existing resources and avoid acting in a way that would have a negative impact on the budget, increasing the baseline for the following biennium.  It should work relentlessly to absorb additional costs by increasing efficiency, in accordance with the rules and regulations governing the Organization’s programme planning and budgeting.  In submitting a budget proposal for 2008-2009, it was incumbent on the Secretary-General to present Member States with his overall vision of the overall programme and a full picture of the anticipated needs for the next two years.  A piecemeal approach and submission of additional requests on an ad hoc basis were not conducive to consensus approval of the budget.  Therefore, he requested additional information on activities to be streamlined and the outcome that was expected to produce.  His delegation was also concerned about the delayed submission of several reports by the Secretary-General that were to be considered by the Committee.

The sharp rise in assessments was evident in the peacekeeping budget, as well, he continued.  While the review of the scale methodology in late 2006 was no doubt part of the reason, there was no denying that the increase in peacekeeping assessments had been a burden on Member States and made timely payment difficult.  He was concerned about the huge expenses the Secretary-General suggested for the new missions in Darfur, and the Central African Republic and Chad.  In the next few weeks, his delegation would be looking carefully at pursuing every means of making them more cost-efficient.  In conclusion, he reiterated that assessed contributions were an obligation every Member State must meet.  However, the rapidly rising level of assessments was a factor that should not be neglected in addressing the current financial situation of the United Nations.

MOTUMISI TAWANA (South Africa), aligning with the statement made on behalf of the Group of 77 and China, said he was convinced that payment of assessed financial contributions in full, on time and without conditions, in accordance with their capacity to pay, was a Charter obligation and a shared responsibility of all Member States.  That was essential to ensure the smooth functioning of the Organization and to enable it to implement all mandates.  Furthermore, he was encouraged by the reported improvement in the financial position of the United Nations as at 31 October 2006.

However, he noted the negative implications that non- and late payment of dues held for the functioning of peacekeeping operations.  He emphasized that, in view of the urgent importance of the implementation of peacekeeping mandates and notwithstanding the inherent unpredictability of those operations, Member States needed to endeavour to pay their assessed contributions in full and on time.  In particular, he was concerned that the United Nations owed $731 million to countries providing troops and equipment to peacekeeping operations.  The United Nations peacekeepers often carried out their mandate in difficult circumstances and deserved profound appreciation.  The Organization should treat the full reimbursement of those payments to the concerned countries as one of its financial priorities.  In that regard, he urged Member States to meet their financial obligation to the United Nations.

He appreciated the impressive work of the Tribunals for Rwanda and the former Yugoslavia.  He was encouraged to note that more Member States had paid their contribution to the Tribunals in 2007.  He hoped that positive trend would continue in 2008.  It was imperative to enable the Tribunals to complete their noble mandate under difficult circumstances.  He also hoped that the current trend of the payment to the capital master plan would continue and that it would be implemented in accordance with the envisaged timelines.  He reiterated a strong commitment to meeting financial obligations on time, in full and without conditions, recognizing that special situations might arise where some Member States were unable to meet their obligations due to genuine economic difficulties.  He extended sympathetic understanding to those States.  He urged all Member States, in particular, the main contributor, to recommit to meeting Charter obligations.

JOHAN ARRIF ( Malaysia) associated himself with the position of the Group of 77 and ASEAN, and said that, with the increase in the demands on the United Nations, the budget of the Organization continued to grow.  The Organization must remain on a sound and solid financial footing, and that could be assured only through timely fulfilment of Member States’ financial obligations to the budget of the United Nations.  With the growing budget, the task of securing a healthy and stable financial position for the United Nations became more challenging.  Much needed to be done, as many priorities, each with its own objectives, competed for attention.  While each priority merited individual consideration, one could not deny that effective action on those priorities would not be possible without adequate resources.  The responsibility then lay squarely on the shoulders of all Member States, if they were sincere and committed to the success of the Organization in fulfilling its role and mandate.  Bearing in mind the principle of capacity to pay, each and every Member State should honour its financial obligations to the United Nations in full, on time and without conditions.  They were also obliged to settle any arrears pending.

The financial outlook of the United Nations remained uncertain, he continued.  As of 31 October, the increase in assessments had been higher than the increase in contributions.  Unpaid assessments were higher by $175 million, at $836 million, compared to $661 million last year.  Of the outstanding amount, 94 per cent was from just one Member State.  Given the constraints and uncertainties of the current financial situation, he hoped that Member States concerned would honour their obligations.

Noting that the outstanding amount for the peacekeeping budget was over $3 billion, he said that it was largely due to the significant expansion and increase in the budgets of several missions, such as the United Nations Interim Force in Lebanon (UNIFIL), the United Nations Stabilization Mission in Haiti (MINUSTAH) and the United Nations Organization Mission in the Democratic Republic of the Congo (MONUC).  The current outstanding amount did not include the assessments for new operations in Darfur and Chad.  The cash available in peacekeeping accounts by the end of the year would not be able to cover the activities of several active missions, including the cost incurred by troop-contributing countries, although the amount was expected to increase slightly, by about $30 million, compared with October 2007.  For peacekeeping operations to carry out their mandates successfully, it was imperative for Member States to meet their obligations towards the peacekeeping budget.

On the Tribunals, he noted that the assessments and outstanding payments this year were higher than in 2006.  On the positive side, the number of Member States that had paid their assessments was seven more than last year.  He hoped that the financial situation would further improve next year.  As for the capital master plan, he was disappointed with the delay in the implementation of the project.  With the coming accelerated strategy IV, he hoped that all important decisions would be finalized.  Further delays would escalate the costs and incur serious consequences for the work of the Organization.  It was necessary to end all reasons for delaying the project and achieve a tangible outcome.  All parties had to work in concert to ensure the success of the project.  While Member States were responsible for putting in place a proper internal control framework and a clear accountability mechanism, the Secretariat and management had the responsibility to seriously act upon and implement the project in a clear and transparent manner.

DANILO ROSALES DIAZ (Nicaragua), aligning with the statements made on behalf of the Group of 77 and China and the Rio Group, noted that now, more than ever, the role of the Organization needed to be strengthened, because of growing challenges that threatened development and peace.  Only through multilateralism would those challenges be addressed.  But, without proper resources, the situation became meaningless.  He recalled that, as reflected in the Charter, all Member States had the legal and shared responsibility to pay their assessed contributions fully, on time and without conditions.  The Organization needed those resources to fulfil its mandates.

Noting that $836 million had not been paid to the regular budget, he said that it was unfortunate that 94 per cent of that amount was owed by one main debtor.  No Member State could point out the Organization’s inefficiencies, if it did not pay.  The precarious financial situation of the Organization could be attributed to one debtor, a country with resources and that used its debt as pressure to pursue its own priorities.  Due to that debtor, the Secretariat had to make up for the debt by taking resources from the contingency fund.  He also emphasized that 59 per cent of the debt to peacekeeping operations, which totalled $3.5 billion, was due to the deficiencies of two countries.  Reimbursements to those States from the developing world that contributed to peacekeeping operations should be made a priority.

Concluding, he said Nicaragua was a poor country, but a proud nation that faced a huge number of economic and social problems.  Yet, it had paid its portion to the budget and the capital master plan.  Nicaragua would continue to fulfil its obligation relentlessly, despite the burdens on the national budget and national emergencies, such as Hurricane Felix and the destructive rain that had wiped out crops.

ILEANA NUÑEZ MORDFOCHE ( Cuba) said that, once again, the situation described by the Controller was extremely disturbing.  In fact, instead of improving, it had worsened.  Depending mainly on the receipt of contributions from a small group of countries, the Organization was facing an uncertain scenario in the predictability of its financial situation.  Therefore, for those who advocated a comprehensive and complete reform of the Organization based on what had been agreed in the 2005 Summit Outcome, she recalled that in paragraph 161 (e) all Member States had pledged to provide the United Nations with the necessary resources, in a timely manner, so that it could fulfil its mandates and meet its objectives, bearing in mind the priorities set by the Assembly and the need to respect budgetary discipline.

At the same time, she added, the Summit had stressed the need for all Member States to fulfil their obligations with regard to the Organization’s expenditures.  The analysis of the data supplied by the Controller showed that the main contributor had failed to comply with the measures requested in that paragraph.  As at 31 October, it had had a 93 per cent arrears of assessed contributions to the regular budget, and 39.8 per cent of arrears to peacekeeping budgets.  That situation had truly worsened as compared to the same period of the previous year.

As an example, she said that, in September 2000, the arrears of the United States had amounted to 81 per cent of all outstanding dues to the regular budget.  Seven years later, the situation was even worse.  It was unacceptable that the United States, with a 22 per cent ceiling in the current scale of assessments, would not honour its financial commitments to the United Nations.  For its part, her country reiterated its real commitment to the Organization, which it had demonstrated through important payments made this year to the infrastructure and regular budget of the capital master plan, which Cuba had paid in full in 2007.  The country had also contributed to the peacekeeping budget, to the extent its availability of resources allowed.

However, she said, Cuba continued to make such payments under adverse economic conditions and in light of the financial limitations imposed by the blockade by the United States against her country.  The current United States Administration had not only failed to do anything to eliminate its inhumane policy against her country, but had further strengthened its regulations, hence, exacerbating Cuba’s difficulties in paying.  “We demand that the voice of the international community be heard, which, represented by 184 United Nations Member States, unequivocally claimed that the United States put an end to the economic, commercial and financial blockade against my country,” she said.

Cuba wanted to reiterate its discontent with the established practice, through which Member States were unable to receive the report of the Secretary-General on the financial situation of the United Nations with enough time in advance, she continued.  A substantive debate of such a report and an adequate follow-up through a draft resolution would be advisable.  Her delegation reiterated its readiness and political will to meet its financial commitments in full, on time and without conditions.  The political support of Member States to the United Nations should also be expressed through the fulfilment of their legal obligations to contribute to the Organization’s financing.  She hoped that, this time, there would not be an attempt to use non-payment of contributions to impose positions during negotiations.  Pressure would not yield results this time.

ANANT GANGARAM GEETE ( India) said that payment of assessed contributions by Member States on time, in full and without conditionality was not just a legal obligation, but a moral one, too.  Exceptions were justified only for those that were unable to do so, due to circumstances beyond their control.  A United Nations that was financially challenged and cash strapped could not command the confidence of the people it served or fulfil its declared objectives of spreading peace, prosperity and development.  In addition to the many of the challenges the Organization already faced, subjecting it to another that was self-created was unwarranted.

He acknowledged that the financial position of the regular budget as of 31 October 2007 was healthier than on the same date last year in terms of the higher assessments and payments by $314 and $151 million, respectively.  The unpaid assessment level of $836 million, higher by $175 million from the end of 2006, was, however, still significant enough to adversely impact the effective functioning of the Organization.  Moreover, the indicated uncertainty in the regular budget position, and the outcome for 2007 depending on action of a few Member States, was disconcerting.

India, being among the largest troop-contributing countries, with substantial contingent-owned equipment deployed in various United Nations peacekeeping missions, was alarmed at the $3.5 billion outstanding for peacekeeping assessments as of 31 October 2007.  The Organization’s debts to Member States providing troops and equipment, projected to be $731 million at the end of 2007, further compounded the problem.  There was a real possibility of the Secretariat not being able to make the next quarterly payment to troop contributors until the early months of 2008.  The Controller had given assurance that he would monitor and review the peacekeeping operations cash-flow situation and do his utmost to make the next quarterly payment as soon as sufficient cash was available.   India was, however, concerned that that optimism was based on “indications” that the major contributor might make a partial payment in the near future.

India’s contribution of troops and contingent-owned equipment to peacekeeping operations was not a commercial enterprise, and its enthusiastic participation in those missions was a manifestation of its commitment to the principles and purposes of the United Nations Charter, he went on.  However, once a written understanding had been arrived at with the United Nations regarding the terms and conditions of the participation, the country was justified in expecting that all sides kept their commitments.  Delayed payments, sometimes non-payment as in a few closed peacekeeping missions, to troop-contributing countries affected the faith of people in the Organization.  For the United Nations to maintain credibility, it was imperative that it also fulfil its obligations in full and on time.

IGOR N. SHCHERBAK ( Russian Federation) said that the information provided by the Controller indicated that the financial situation of the United Nations was still not stable enough.  Despite the fact that the number of States paying in full and on time had increased, his delegation was concerned that the bulk of unpaid assessments was still attributable to a small group of Member States.  He welcomed the lowering of the amount of the Organization’s debt to troop contributors, but the Organization was still a long way from a final solution in that regard.

Member States’ failure to meet their financial obligations to the Organization must be seen against the backdrop of an increase in its expenditures in several areas of its work, he continued.  In particular, that related to the unprecedented increase in peacekeeping expenditures.  Only through strengthening the financial discipline and payment of dues was it possible to avoid the negative repercussions of the situation.  Clearly undertaking a financial burden, Member States were entitled to require rational financial planning and a realistic evaluation of needs from the Secretariat.  He was deeply concerned that, as of 31 October, the total of arrears to the peacekeeping budget had amounted to almost $3.5 billion, and that the Secretariat might be once again obliged to cross-borrow against the budgets of closed missions.  The position of his delegation on that issue remained the same:  Member States must pay their contributions faithfully and without prior conditions or attempts to turn their payment of dues into an instrument of political pressure.  He trusted that Member States would pay off their arrears to the United Nations, allowing the Organization to effectively react to global threats and challenges and implement the mandates provided by Member States.

YU HONG (China), aligning with the statement made on behalf of the Group of 77 and China, noticed with concern that, in 2007, the financial situation of the United Nations had deteriorated, as compared to the same period last year, given that various unpaid contributions had increased.  According to the presentation given by the Controller, he said that, as of 31 October, a total of 126 Member States paid in full their assessed contributions, 92 Member States paid in full their assessments for the two International Tribunals, and 23 Member States paid in full the assessments for peacekeeping operations.  The unpaid assessments for the regular budget and the capital master plan amounted to $836 million, $64 million, $3.49 billion and $150 million, respectively.  Those figures showed that most Member States paid their assessed contributions in time and in full.  However, some Member States had yet to meet in earnest their financial obligations, under the Charter.

He believed that sound finance constituted the foundation for the United Nations to perform its functions, as the most important international organization in today’s world.  There could be no strengthening of the United Nations’ role in various international affairs if it was deprived of that foundation.  All Member States should meet, in earnest, their financial obligations and pay various assessments on time.  Otherwise, the balance sheet of the United Nations would inevitably get distorted, its budget a piece of paper without any binding power, and its various tasks lacking sufficient financial resources to back them up.  He had noticed that some States, in particular some developing countries, in spite of many practical difficulties, had done their best to meet their financial obligations, which was commendable.  All other Member States should follow their example and pay all the assessments on time, in full and without conditions, so as to improve through practical action the financial situation of the United Nations and support its various activities.

He noted that, in recent years, United Nations functions had been continuously strengthened and the mandate of peacekeeping operations had steadily expanded, which had led to the sharp increase of all kinds of expenditures.  The rapid increase of the total expenditures of the United Nations had put a considerable financial burden on its Member States, in particular the developing countries.  He believed that the regular budget should be distributed in a balanced manner to all priority areas, including development.  The United Nations budget should be prepared within the limits of available means.  Due consideration should be given to the ability of its Member States to pay, especially that of developing countries.  At the same time, the Secretariat should strengthen administrative and budgetary management, clarify financial disciplines, and make good and effective use of existing resources.

RODRIGO YAÑEZ PILGRIM ( Venezuela) supported the position of the Group of 77 and the Rio Group and said that, according to the information provided to the Committee, the total amount of assessments in 2006 had been $5.53 billion.  As of 31 October this year, the total of assessments for the regular, peacekeeping, tribunals and other budgets, had amounted to some $9 billion, and the debt of Member States stood at $2.34 billion.  Last month, that total had amounted to some $4.54 billion -- an increase of 95 per cent, compared with last year.  While payments by Member States had increased, that had not offset new obligations, particularly for peacekeeping.  The Organization was in a complex financial situation, and it was quite evident that non-payment of dues had an adverse impact on its functioning.

The current trend seemed to be pointing towards a growth in peacekeeping operations and the complexity of recent reform measures, he continued.  While peacekeeping was one of the Organization’s central areas of work, that did not mean that other objectives were less important.  He was concerned over unequal distribution of resources to various priority areas.  The current debt to the Organization amounted to more than twice the budget level proposed for 2008-2009, and that was an alarming figure.  The arrears for the regular budget amounted to $836 million and, scandalously, 94 per cent of that figure could be attributed to one country alone.  That country, paradoxically, had shown economic strength and received great benefits from the United Nations.  Thus, the debt was not due to economic difficulties; quite the contrary, it was the result of seeking greater influence, contrary to the intergovernmental nature of the Organization.

Regarding his country’s contributions, he said that once all the accounts were added up, Venezuela had a favourable figure.  Among other things, it had fully paid its dues for the capital master plan.  Regarding the repeated difficulties of the United Nations, he said that it was necessary to look for alternatives for “the chronic disease without an apparent cure”.  Among other things, it was important to consider incentives for fulfilling financial obligations to the United Nations.  In conclusion, he reaffirmed his country’s will to meet its obligations on time and without conditions.

FERNANDO DE OLIVEIRA SENA (Brazil), aligning with the statements made on behalf of the Group of 77 and China and the Rio Group, thanked the Controller and the Committee on Contributions for their work on the issue at hand.

CARLOS RUIZ MASSIEU ( Mexico), aligning with the statement made on behalf of the Rio Group, shared concerns regarding the fragile financial situation of the Organization, to a great extent due to the small amount of States that had not paid the contributions.  That meant cash-flow problems and resources borrowed from the contingency fund, a situation that would be avoidable if that small number of countries could pay.  Noting Mexico was tenth among contributing countries, he said that, in spite of the high increase in assessed contributions, Mexico, to date, had paid its contributions in full.  He recognized that reconciliation of peacekeeping operations with national budget cycles made it difficult to be up to date, but Mexico would make sure it was in compliance in contributing to those operations, as well as the Tribunals, the regular budget and the capital master plan.  In conclusion, he congratulated all countries that were up to date in their contributions.

JOHN J. NG’ONGOLO (United Republic of Tanzania) supported the position of the Group of 77 and emphasized the importance of payment of assessments in full, on time and without conditions.  The countries’ ability to fulfil their obligations to the United Nations was determined by the principle of capacity to pay.  However, political will was an important factor in that regard.  To demonstrate its strong political will, Tanzania, one of the least developed countries, had implemented a payment plan for the capital master plan and had paid in full for other various budgets of the United Nations.  In that connection, he noted that the budget cycle for peacekeeping operations ended in June.  He urged all Member States to demonstrate their political will in support of the Organization by paying their contributions in full, on time and without conditions.

Mr. SACH then provided another update on payments that had been “banked as of last night”:  Egypt had made a full payment to the regular budget, and a full payment had also been received from Ireland.  A partial payment had been received from the major contributor in respect of the peacekeeping budget in the amount of $218 million.  An amount of $100 million had been received from the same Member State against the regular budget assessment.

Right of Reply

Speaking in right of reply, the representative of the United States said it was with great reluctance that he asked to speak, although Cuba had criticized the United States by name, with respect to its failure to pay assessed contributions and extraneous issues on United States trade relations.  He stressed that the United States embargo was in place to bring about much-needed change in Cuba.  It was the Untied States’ supreme desire to see a government in Cuba committed to freedom of speech, press and the formation of political parties.

He emphasized that the United States had paid $218 million to peacekeeping operations and $100 million to the regular budget, and was committed to making assessed payments to the United Nations.

In right of reply, the representative of Cuba, responding to the United States, said that, for many years, the United States had implemented an economic, commercial and financial blockade, a blockade that had been qualified in many documents as measures implemented against the Cuban people, not the Cuban Government.  As early as 1960, the United States Government, under President Eisenhower, called for measures aimed at placing the Cuban people in misery and hunger.  Further, as early as 2004 and, more recently, since October 2006 and 2007, President George W. Bush called for the strengthening of its blockade against Cuba.  In particular, the United States Treasury had conducted a war against Cuban transactions, which had an effect on the ability of Cuba to make its payments to the United Nations.  He noted that 20 banks had been threatened.  Noting resolution A/62/92, he said the General Assembly, with the majority of Member States, had responded to the issue with follow-up resolution for over 16 years.

Cuba called for an end to the blockade.  The delegation of the United States was calling for freedom and democratic governance, but if we were going to talk about democracy, then the world community should talk about the United States -- a place where the current president was elected through fraud.  The Government of the United States was, illegally, keeping a military base in Guantanamo, subjecting over 600 people to inhumane treatment and torture.  That was what the United States Government should be worried about.

The United States representative said that, once again, he was reluctant to take the floor to respond to irrelevant, extraneous and, in a great sense, totally incorrect and fallacious comments by the Cuban delegation.  He was not going to repeat the arguments on the long-standing issue of the embargo.  Its purpose was to encourage freedom and democracy in Cuba.  Unfortunately, the human rights record in Cuba remained poor.  The United States had always said that it would work with the international community for a peaceful transition to democracy there.

On another issue, he said that there was no basis in fact for the statement that the election of the United States President had been an electoral fraud.  His country’s electoral system was a totally open and transparent one and, while the process could sometimes become “really messy”, processes and procedures were in place to resolve the differences.  That process had taken place, reaffirming the election of the President in the truest sense of democracy and transparency.

The representative of Cuba said that his delegation had been accused of talking about matters unrelated to the work of the Committee, but the United States had started it.  “If we are going to talk about human rights, what about Guantanamo?” he asked.  Instead of worrying about problems in Cuba, the United States Government should worry about Guantanamo.  While insisting that it had a democratic Government, the United States was calling for assassination of elected leaders.

The current United States Government, in 2000, had been elected with a fraudulent vote in the State of Florida, he continued.  That was what the United States should be examining.  The Cuban people had democratically chosen the socialist system.   Cuba held elections, just like other countries of the world.  The Cuban people had the right to choose the political system and the type of democracy they preferred.  The country’s Constitution clearly said that the people were under a socialist government, and that would be maintained despite the genocidal blockade by the United States.

In conclusion, he said that he wanted to reaffirm the accusation against the Government of the United States, asking it to pay its contribution to the United Nations in full, on time and without conditions.  While some payments had been made, Cuba had not created the spending cap in 2000, nor made threats in 2000, nor passed the laws in the United States Congress to place barriers on the United Nations’ work.  Those were the things the United States Government should be thinking about.

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For information media • not an official record