Sixty-third General Assembly

Fifth Committee

9^th Meeting (AM)

SUSTAINED, PREDICTABLE FINANCING NEEDED FOR DEVELOPMENT ACCOUNT,

SAY SPEAKERS IN BUDGET COMMITTEE

 

The time had come to address the issue of ensuring a sustained and predictable source of funding for the Development Account, stressed the representative of Antigua and Barbuda, who addressed the Fifth Committee (Administrative and Budgetary) on behalf of the “Group of 77” developing countries and China this morning.

Created in 1997 to fund technical cooperation projects for the benefit of developing countries, the Development Account forms an important element of the overall development pillar of the United Nations, he stressed.  At the time of its creation, it was envisioned that the Account would have a fund of $200 million from efficiency savings, or the “development dividend”.  However, 10 years later, the Account had hardly one tenth of that amount.  Obviously, the system of funding for the Account did not work as intended.

He further recalled that the General Assembly had requested the Secretary-General to provide a comprehensive proposal with a view to improving effective delivery of development-related mandates of the Secretariat, including the Development Account.  Neither the Secretary-General’s report on strengthening the development pillar nor the report on the Development Account addressed the perennial issue of the funding mechanism for the Account.  The latter merely stated the obvious, that the current system of the Account’s financing had failed.  Yet, the document failed to provide any tangible option for predictable and sustainable funding of the Account.

While the Secretary-General’s report (document A/63/335) stated that the original basis of funding the Development Account from efficiency savings was no longer applicable and that the results of those efficiency measures could not be quantified, the Group of 77 fully concurred with the observation of the Advisory Committee on Administrative and Budgetary Questions (ACABQ) that efficiency gains could be quantified and, in fact, were calculated for peacekeeping budgets.  The same methodology could be used to quantify efficiency savings, as well as resources released from discontinued activities and outputs. Moreover, there was the need for an effective system to ensure transfer of savings thus quantified to the Account.

The Group also requested clarification from the ACABQ on its assertion that “the level of funding for the Development Account has been affected by the 2 per cent across-the-board reduction in non-staff costs, as reflected in General Assembly resolution 62/237 A”, which amounted to $329,600 for the Account.  The Assembly had never approved a 2 per cent reduction across the board that would affect the budget appropriation of $4.17 billion.  Hence, no reduction of the Development Account had been approved.  However, in conformity with the current financing mechanism for the Account, any efficiency gains, including “this imaginary 2 per cent reduction”, should be added to, rather than being subtracted from, the Development Account.

The Officer-in-Charge of Service III of the Programming and Budget Division, Vladimir Belov, explained that, in resolution 62/237 A, there was a provision for a 2 per cent cut across the board in operational non-staff costs.  The resolution made no exception for funding the Development Account, resulting in a reduction of $329,600.  A final appropriation for the Development Account under the 2008-2009 budget amounted to $18.6 million, inclusive of an additional $2.5 million under resolution 62/348.

Responding to that statement, Nicaragua’s representative emphasized that Member States had agreed to a 2 per cent reduction in non-staff costs in order to bring the Organization’s budget to the agreed level of $4.17 billion.  That reduction did not mean an additional 2 per cent cut, but the information provided by the Secretariat implied that there had been, in effect, a 4 per cent reduction of the budget.  At no point, had the Assembly approved an appropriation below $4.17 billion.

Calling the level of the Account and the mechanism for its financing “completely ridiculous”, Nicaragua also stressed that, at less than $20 million, the Account did not even represent 0.47 per cent of the Organization’s budget.  The ACABQ had legitimately underscored in its report that the mechanism for financing the Development Account was not tangible, predictable or sustainable.

His delegation found it incomprehensible why the Secretariat at this stage was unable to identify savings earmarked for the Development Account, he added.  Everybody had heard, in the halls and bilateral meetings, that there was an administrative instruction from the Secretary-General for all departments to reduce operational costs.  If that instruction had been handed down, the savings of internal realignment should be sent to the Development Account.  Conclusions also had to be drawn from the recognition that the Account’s financing mechanism did not work.  It was necessary to decide on how to finance the Account.  That might be done through contributions Member States made to the regular budget.

Speaking on behalf of the European Union, the representative of France reaffirmed his belief in the principle of “the development dividend” from reductions in administrative expenses and other overhead costs.  He also noted with satisfaction that 15 new projects in the areas of sustainable development and climate change had been approved under the Account.  The quality follow-up mechanisms for those projects would permit project managers to evaluate the results achieved when the projects were completed.  In that context, he welcomed the recommendation to implement similar mechanisms for all the Organization’s technical cooperation activities.

Expressing support for the Development Account, which had developed into “a model activity” where money was funnelled into implementation and follow-up of projects, the United States representative supported the recommendations of the Advisory Committee on the Account.  Concerned that the Secretariat had had trouble accounting for efficiency measures, he hoped that, once the new accounting measures were established across the United Nations system, that would no longer present a problem.

He was puzzled by paragraph 10 of the ACABQ report, expressing the Advisory Committee’s disappointment that the Secretary-General had not provided any options for tangible, predictable and sustainable funding for the Account, despite the concerns expressed by the Assembly in resolution 62/238.  He believed that the Account’s funding was one of the most tangible and predictable.  The Account had started with $11 million and was now at $18 million.  Did the ACABQ not believe that $18 million was tangible? he asked.

Collen Kelapile, who introduced the Advisory Committee’s report today, said that paragraph 10 was not intended to address the figure of $18 million, but rather the fact that there was insufficient funding of the Account.

The Committee will take up the Organization’s information and communications technology strategy at 10 a.m. Wednesday, 22 October.

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For information media • not an official record