Sixty-fourth General Assembly GA/AB/3923

Fifth Committee

8^th Meeting (AM)

Budget Committee Approves Text on Board of Auditor’s Report concerning Refugee

Office, Continues Debate on United Nations Financial Situation

The Fifth Committee (Administrative and Budgetary) this morning recommended that the General Assembly endorse the recommendations of the Board of Auditors on the financial report of the Office of the United Nations High Commissioner for Refugees for the year ended 31 December 2008, for which the Board had issued a qualified audit opinion this year, with three emphases of matter.

By the terms of the draft resolution, which was approved without a vote, the Assembly would also note the measures taken by the Office to address the seriousness of its financial problems, and encourage the United Nations High Commissioner for Refugees to implement all the recommendations of the Board.

Also this morning, as the Committee discussed the financial situation of the United Nations, Singapore’s representative said that a presentation by the Under-Secretary-General for Management, Angela Kane, last Friday had provided a sobering and timely insight into the matter, demonstrating a mixed picture of the Organization’s financial health.  Among other things, the amounts outstanding for the regular budget totalled some $830 million, and the number of Member States meeting their obligations across all categories of payments was lower than a year ago.

All too often, Member States readily affirmed the importance of ensuring a strong and dependable funding base for the United Nations, and yet, the Organization still operated under financial conditions that were less than stellar, he said, emphasizing that the financial difficulties of the Organization were entirely avoidable.  The real reason behind that situation was well known: late and non-payment by the major contributors.

Cuba’s representative said the truth was that the major contributor owed the Organization $1.3 billion, and it was not known yet whether it had met its obligations to the Capital Master Plan.  That country, which benefited the most from the distortion in the calculation of the scale of assessments, was responsible for 93 per cent of the unpaid contributions to the regular budget.  It was also liable for important debt to peacekeeping operations and the International Tribunals.  Meanwhile, a group of other countries had made enormous efforts to meet their financial obligations to the United Nations, despite multiple simultaneous crises facing the world.

For his part, the United States representative outlined his country’s recent actions to pay its debt to the United Nations, stressing the commitment of the Obama Administration to strengthening its financial relationship with the Organization.  The United States had recently paid over $1.2 billion to the United Nations, essentially eliminating its arrears for the past decade to the regular and peacekeeping budgets.  It was now current in its peacekeeping payments and would be paying the 2009 regular budget assessment by the year’s end, as well as its dues for the Capital Master Plan, in the amount of some $675 million.

The representative of Australia, also speaking on behalf of Canada and New Zealand, acknowledged progress in some areas, including an improvement in the liquidity of the Organization, stemming in part from the reduction in arrears by the United States.  She also noted strong support for projects, such as the Capital Master Plan, with 93 per cent of assessments paid for 2003-2009 and a solid cash position of some $800 million.  The delegations she represented regretted, however, that there had been an overall decline of 30 per cent in the number of Member States that had made all payments on time and in full, compared with last year.  Only 11 per cent of the membership had paid their dues.  In addition, some Member States engaged in selective payment of dues.  For example, the Tribunals were poorly served by a number of countries.

The representative of the Sudan, speaking on behalf of the “Group of 77” developing countries and China, was among the speakers who expressed concern over “the unprecedented amount of almost $1.4 billion owed to troop-contributors”.  That was particularly troubling, since most troop-contributors were developing countries, which were not in position to sustain their troop commitments and maintain their equipment on their own for extended periods of time.

United Nations Controller, Jun Yamazaki, provided updated information in that regard, saying that significant quarterly payments processed in October had reduced the amounts owed to Member States from $1.4 billion as at 30 September to $741 million as at 19 October.

Japan’s representative expressed concern over significant increases in the peacekeeping budget, which seemed to have reached an unsustainable level for Member States.  That being the case, Japan welcomed recent initiatives by the Secretary-General to deal with the increasing size and diversity of missions, which were expressed in the New Partnership Agenda, Charting a new Horizon for UN Peacekeeping and the new support strategy.  His delegation was ready to engage in following up on those initiatives, so that they had concrete results; namely, that they would help to ensure budgetary discipline and streamlining of management, which, in turn, would lead to effective implementation of peacekeeping mandates. 

Also participating in the debate were representatives of Sweden (on behalf of the European Union), Mexico (on behalf of the Rio Group), the Philippines (on behalf of the Association of Southeast Asian Nations), Nicaragua, India, Bangladesh, Pakistan, China, Uruguay, Argentina, Turkey, Russian Federation and Venezuela.

The Committee will meet at 10 a.m. Wednesday, 28 October, to consider procurement within the United Nations.

Background

The Fifth Committee (Administrative and Budgetary) met today to continue its discussion on the financial situation of the United Nations (for background, see press release GA/AB/3921).  In addition, the Committee was expected to take action on a draft resolution on financial reports and audited financial statements, and reports of the Board of Auditors.

Statements

At the opening of the meeting, United Nations Controller JUN YAMAZAKI recalled paragraph 27 of document A/64/497 (the report on the financial situation of the United Nations), in which it was noted that Croatia, the Czech Republic, Iceland, the Philippines and Switzerland had fully paid all their dues.  In addition, since the preparation of the document, Denmark and Norway had also paid in full.  Consequently, a total of 25 Member States had paid in full all their assessed contributions that were currently due and payable.  Also, subsequent to the cut-off date, Guinea, Jordan and Serbia had fully paid their assessments with the respect of the regular budget, and the United Arab Emirates with respect to the International Tribunals.

On debt to Member States, he added that, at the time of the briefing, it had been indicated that significant quarterly payments had been processed in October.  Those payments had been fully taken into account in the projections presented to the Committee, and did not change 2009 year-end estimates.  However, in order to provide the Committee with more current information, an update had been prepared as at 19 October.  Recent payments had reduced the amounts owed to Member States from $1.4 billion as at 30 September to $741 million as at 19 October.

MAGID YOUSIF (Sudan), speaking on behalf of the “Group of 77” developing countries and China, noted with deep regret that the current deficit with regard to the regular budget did not show any improvement.  On the contrary, the situation had worsened compared to 2008.  The breakdown of unpaid dues showed a high degree of concentration in one particular Member State, accounting for over 93 per cent of the total.  That was a grim and disappointing situation that left the Organization with no choice, but to resort to exceptional measures, in order to maintain its regular business until the end of the year.  In any case, any substantial improvement was acutely dependent on the actions to be taken by one Member State.

The modest improvement in payments for peacekeeping should be considered together with the fact that some $1.2 billion remained unpaid for those operations, he continued.  He recognized the procedural difficulties that resulted in short delays in the payment of peacekeeping assessments.  That said, it was imperative for all Member States to settle unpaid assessments the soonest.  The negative implications of persistent non-payment should be taken seriously by concerned Member States.  The Group of 77 reiterated its opposition to cross-borrowing, as set forth routinely in many resolutions.  The cash surpluses in any active mission should preferably be utilized for outstanding liabilities, such as troop and equipment payments, or returned to individual Member States, in accordance with relevant resolutions.

In that regard, he noted with concern the unprecedented amount of almost $1.4 billion owed to troop contributors.  That was of particular concern, since most troop-contributing countries were also developing countries and were not in a position to sustain their troop commitments and maintain their equipment on their own for extended periods of time.  He understood that the main reason for that was the delay in payments, and he hoped that payments of outstanding bills by the major contributors were made in full, on time and without conditions.  He also noted the developments with regard to the financial situation of the Tribunals, saying that, as in the case of the regular budget, any substantial improvement was dependent on the actions to be taken by one Member State.  Noting that 119 Member states had fully paid their assessments for the Capital Master Plan, he encouraged all Member States, including the host country, to pay their assessments on time and help to avoid costly delays.  He also urged the Secretary-General to ensure full and effective implementation of that project.

He also sought clarification with regard to the announced intention by the major contributor to pay its arrears.  While noting that some effort had been made in that regard, the Group of 77 had deduced from the presentation last Friday that barely half of that country’s dues had been paid, and wanted to have a clear breakdown of the payment.  As a matter of principle, the Group of 77 would also express its surprise at the Secretary-General’s hasty press statement last August congratulating the payment of the contribution of that Member State, while the latter had not presented the payment.

He added that the Group of 77 had made a significant concession in the compromise solution with regard to the scale of assessments in 2000, which included accepting additional financial burdens for developing countries.  That had been done to provide an opportunity for a fresh start that would remedy the long-standing dismal state of affairs with respect to the financial situation of the Organization.  Today, nine years after that compromise, he deeply regretted that the major contributor had not fulfilled its part of the arrangement.  That systemic and persistent problem needed to be resolved permanently.

The Group of 77 remained committed to efforts to strengthen the United Nations and enable it to implement its mandates more effectively and to use its resources more efficiently, he said.  He expressed appreciation to all Member States that had paid all their assessments in full and hoped that others could follow their example.  Members of the Group of 77 remained committed to meeting their financial obligations to the United Nations on time, in full and without conditions.  He also urged Member States with unpaid dues to settle them, as soon as possible.  That was especially applicable to those countries that had the capacity to settle their arrears, in order to ensure the financial stability of the United Nations.  All actions should be taken to facilitate payments of Member States.  The Group of 77 rejected all unilateral coercive measures contrary to international law, which obstructed and sometimes impeded payments from members of the Group.  At the same time, the Group extended its sympathetic understanding to those countries that were unable to meet their obligations, due to special and genuine difficulties beyond their control.

HENRIC RÅSBRANT ( Sweden), speaking on behalf of the European Union and associated States, said it was the responsibility of each Member State to pay its assessed contributions in full, on time and without conditions.  In addition, he stressed that the United Nations must make effective and efficient use of its resources.  He noted that, when preparing the Union’s statement, the updated information presented by Mr. Yamazaki had not been available.

While, as at 16 October 2009, 123 Member States had fully paid their regular budget assessments on time, that number was 10 fewer than in the corresponding time frame for 2008, he said, and expressed concern that $830 million in assessed contributions were still outstanding as at 13 October 2009.

On peacekeeping budgets, the European Union noted some improvement over last year with regard to outstanding contributions, but that the amount outstanding of $2.1 billion was still of great concern.  He called on all Member States to pay their contributions to enable the Organization to perform its challenging tasks and to implement its peacekeeping operation mandates.  Further, the balances of funds in the accounts of closed peacekeeping operations should be returned to Member States.  The continued retention of contributions was not acceptable.  It was not sustainable to finance active peacekeeping operations, to some extent, from the accounts of those that had been closed.

He further noted that, with unpaid assessments of $63 million for the International Tribunals, both could face difficulties in the final phase of their work.  The Union did not want to repeat the situation of a few years ago, when cross-borrowing had been needed from peacekeeping accounts due to the financial difficulties of the Tribunals.  With regard to the Capital Master Plan, he said all Member States should pay their contributions, to make up the outstanding amount, as at 13 October 2009, of $86 million.

INGRID BERLANGA VASILE ( Mexico), speaking on behalf of the Rio Group, noted that the financial situation of the United Nations had experienced a slight improvement in certain areas.  Several Member States of the Rio Group had faced difficulties in making full and timely payments to the United Nations, given the severe impact of the financial crisis.  Nonetheless, they continued to underscore the importance of the financial health of the United Nations for the implementation of its mandates.  The Rio Group further reaffirmed its obligations towards the Organization and recognized the importance of each State fulfilling its obligations on time.  She assured the Committee that members of the Group would do their best to accomplish that.

On peacekeeping, she welcomed that the liabilities of $2.1 billion had been downsized by $796 million compared to last year.  As the Under-Secretary-General for Management, Angela Kane, had stated, the unpredictable nature of peacekeeping made it difficult for Member States to pay their contributions in full.  That had been the case of the Rio Group.  Regarding reimbursement for troops and contingent-owned equipment, the 2009 data reflected an increase in the debt to Member States.  She understood that the payments for 2009 took into account cash projections, which were reflected by the reduced level of contributions, whose approval relied on the new scale of assessments for 2010.  Regarding the Tribunals and Capital Master Plan, it was necessary to underline that some of the members of the Rio Group were among those who had paid their contributions in full.

She reaffirmed that facilities should be provided to Member States in order to allow them to make their full and timely payments, she said.  For that reason, the Rio Group rejected any unilateral measure contrary to international law that hindered and had even prevented members of the Group from making payments to the Organization.  She also reiterated the obligations of all Member States to cover all the expenses of the United Nations, without exception, in the proportion determined by the General Assembly and in accordance with the Charter.

PATRICK A. CHUASOTO (Philippines), speaking on behalf of the Association of Southeast Asian Nations (ASEAN), aligned himself with the statement of the Group of 77 and China, and said that a solid fiscal position was a major prerequisite for any successful operation.  Without a stable funding source, the mandates to accomplish the three pillars of peace and security, human rights and development could not be effectively and efficiently pursued.  Figures in the briefings presented were “not impersonal numbers churned up by the Controller’s office for the sake of a routine presentation to Member States”, but were statistics that reflected the way the United Nations functioned or was “forced to malfunction”, he said.

ASEAN was concerned with the increase in unpaid assessments for the regular budget, the Tribunals and the Capital Master Plan, he said.  Although the amount of unpaid assessments for peacekeeping had decreased, that could not offset the increase in arrears to the aforementioned three categories, as evidenced by the lower number of Member States meeting their obligations, in full, across all categories.  Nonetheless, due consideration must be given to Member States that were temporarily unable to meet their financial obligations in a timely manner for valid reasons.  He expressed the hope that States would ensure full and timely payment of assessed contributions in the next few months.

On unpaid peacekeeping assessments, he noted the 27 per cent decrease from last year, which, he said, was partly attributable to a lower level of peacekeeping assessments for the current fiscal year, pending approval of a new scale of assessments for 2010, but also to payments by the major contributors.  He expressed the hope that those contributors would continue to pay on time, as their contributions would also aid in reducing the obligations to troop-contributing countries.

He said it was good news that cash positions were projected to be positive at yearend for all funds and that they were expected to be much higher compared to last year.  ASEAN encouraged United Nations programme managers to handle resources more transparently, effectively and efficiently.

ANNETTE ELLIS ( Australia), also speaking on behalf of Canada and New Zealand, said everybody was keenly aware of the global challenges today.  In order to find solutions to those challenges, a properly functioning United Nations was needed.  She acknowledged that there had been progress on some fronts with regard to the financial situation of the United Nations.  There had been an improvement in the liquidity of the Organization, stemming in part from the reduction in arrears by the United States -- a positive development, which she welcomed.  She also saw strong support for projects such as the Capital Master Plan, with 93 per cent of assessments paid for 2003-2009 and a solid cash position of some $800 million.

Each of the countries on whose behalf she spoke continued to pay assessments in full, on time and without conditions, she said.  The delegations she represented regretted, however, that there had been an overall decline of 30 per cent in the number of Member States that had made all payments on time and in full, compared with last year.  Only 11 per cent of the membership had paid their dues.  In addition, she continued to observe some Member States engaged in selective payment of dues.  For example, the Tribunals were poorly served by a number of countries.  Unpaid assessments for the Tribunals were higher than they had been in a number of years.  She was also disturbed by the Organization’s liabilities to troop- and police-contributing countries for many peacekeeping missions.  Many of those countries could ill afford to bear the burden of what was effectively the subsidization of those Member States that chose not to uphold their financial obligations to the Organization.

Some Governments found it more difficult to fulfil their financial obligations to the United Nations, given current economic circumstances, and she understood those real financial difficulties, she continued.  While those circumstances should make all Member States more mindful of the need for budget discipline, they were not a reason to shrink from their shared obligation to finance the work of the United Nations.  She remained concerned that the majority of Member States had failed to pay their assessments in full, on time and without conditions.  She commended those countries that had made an effort to adhere to their Charter obligations and urged others to do the same.

DANILO ROSALES DÍAZ(Nicaragua) expressed support for the statements of the Group of 77 and China and of the Rio Group and said that Nicaragua was surprised that certain Member States were unwilling to meet the legal obligations of paying their assessed contributions, but made large voluntary contributions to projects that supported their interests.  Those contributions frequently had conditions attached that sometimes distorted legislative mandates.  Using the financial and economic crisis as an excuse not to provide the Organization with the resources it required, while spending enormous amounts, $18 trillion according to the Secretary-General, to salvage an unfair financial system, was unacceptable.  All Members were responsible for paying assessed contributions in full, on time and without conditions, so that the Organization could fulfil its mandates.

It was unfortunate that $830 million was still owed, of which 93 per cent was owed by the major contributor, he said.  No Member State could point a finger at the Organization’s inefficiency if it continued to refuse to pay in a timely way, particularly the country that benefited from the change in the calculation of the scale of assessments that required the least developed countries to pay more.  He expressed the hope that the time in which the major contributor used non-payment of its assessed contributions to get its way was a thing of the past.  He further stressed the need to put an end to the blockade of Cuba, which made it difficult for that country to pay its assessed contributions.  It was time to turn away from that sad chapter in history.

He proposed the creation of a separate account for the special political missions, whose budgets had grown from $100 million to $829 million over just nine years.  He further noted that 21 per cent of the $2.1 billion remaining to be paid for the peacekeeping budget was owed by the two main contributors.  It was undeniable that that affected reimbursements to the countries, particularly developing ones, that provided equipment and troops.  Further, priorities must be set for the order in which countries were reimbursed, noting that 87 per cent of troops were contributed by developing countries.  Without troops, there would be no peacekeeping operations, he said.

Despite the huge economic problems that Nicaragua faced due to the food, financial, economic and climate crises, it continued to pay in full its contributions to the regular budget, the International Tribunals and the Capital Master Plan.

LOY HUI CHIEN ( Singapore) said that Ms. Kane’s presentation had provided a sobering and timely insight into the financial situation of the United Nations.  All too often, Member States readily affirmed the importance of ensuring a strong and dependable funding base for the United Nations, and yet, the Organization still operated under financial conditions that were less than stellar.  Today, the United Nations financial picture remained mixed.  Among other things, the amounts outstanding for the regular budget totalled some $830 million, and the number of Member States meeting their obligations across all categories of payments was lower than a year ago.  His delegation once again emphasized that the financial difficulties of the Organization were entirely avoidable.

Continuing, he acknowledged that some Member States faced genuine difficulties in meeting their financial obligations, in part due to the current financial and economic crisis.  But those countries did not account for a large proportion of the budget.  The real reason behind that situation was well known: late and non-payment by the major contributors.  The international community could go a long way in putting the United Nations on a sound financial footing if the major contributors exercised responsible leadership by paying in full, on time and without conditions.  He recalled recent commitments by one of the major contributors to settle its outstanding bills, and looked forward to concrete action to fully honour those commitments.

The Organization’s financial situation was also dependent on how well it managed its resources, he said.  Member States had every right to demand efficient and effective use of those limited resources.  The Secretariat must be accountable and deliver results.  His delegation continued to support concrete and serious efforts to strengthen oversight and accountability in the Organization.

In conclusion, he urged Member States to honour their assessed contributions in full, on time and without conditions.  “We must ask ourselves: do we want a strong and effective United Nations, or one that remains hobbled by chronic, self-inflicted financial weakness?” he asked.

SYED SHAHNAWAZ HUSSAIN ( India) aligned himself with the statement of the Group of 77 and China, and said that the payment of assessed contributions in full, on time and without conditions was not just a Charter obligation, but a moral one.  If Member States sought full accountability from the Secretariat for efficient and effective implementation of their mandates, they were duty-bound to provide the Secretariat with timely and adequate resources to ensure the attainment of that goal.  It was unfortunate that, as at 13 October 2009, the unpaid assessed contributions amounted to $830 million, $74 million higher than in October 2008.  Ninety-three per cent of that amount was owed by a single Member.  He hoped that situation would be urgently addressed.

He further noted that India had paid its assessed contributions in full on 31 March 2009, although that was not reflected in the list of Member States that had done so.  He asked for that situation to be rectified.  Further, as a troop-contributing country that also had significant contingent-owned equipment deployed with peacekeeping operations, he was encouraged by the decrease in the total amount outstanding for peacekeeping, although that decrease, in part, was due to a lower level of assessments issued for the current fiscal year, pending approval of a new scale of assessments for 2010.  Also, a major portion of unpaid assessments was due to non-payment by a few Member States, with only two contributors owing 53 per cent.

The delay in receipt of contributions adversely impacted payments to countries that contributed troops and equipment to peacekeeping, he continued.  Such delays made it difficult for those countries to justify their contributions to their national legislatures.  The situation must be rectified, in order to avoid a negative impact on Member States’ commitment towards future peacekeeping operations.  The projection of $944 million as the amount of United Nations debt owed to Member States at the end of 2009 was higher than had been envisaged in May 2009, he said.   India was owed $152 million as at 30 September 2009.  While India was patient, those who sought greater financial contributions from that country should factor in that debt while measuring India’s contributions, he said.

In closing, he said that “an indebted United Nations should not be expected to evoke confidence from the peoples it aspires to serve.  It is, therefore, essential that Member States assist the Organization in achieving zero indebtedness, as an integral part of our common quest for prudent budgetary and financial management.”  He called upon Member States to meet their financial obligations in full and on time.

AKIHIRO OKOCHI ( Japan) said that, looking at the unpaid assessments, one had to admit that the situation was far from favourable, with a growing volume of unpaid assessments to the regular budget, International Tribunals and the Capital Master Plan.  While it was important to examine what had caused those developments, the deterioration of the budgetary situations of Member States was the most likely cause.  It was vital for Member States to meet their responsibility to pay in full and on time.  It was also very important, particularly under the current severe economic circumstances, for the Secretary-General to be accountable to Member States through using the resources efficiently and effectively.  With that in mind, Japan intended to participate actively in the discussions on the 2010-2011 budget and other matters before the Committee.

Turning to the improvements noted in the financial presentation, he welcomed the prospects of a positive cash balance in the regular budget.  For years now, the Secretary-General had had to suggest that consideration be given to borrowing millions from reserve accounts, due to shortages in the regular budget.  He was pleased to note the anticipated positive cash balance at the end of the year and commended the Secretary-General’s efforts in that regard.  At the same time, he expected to see him continue to improve the management of cash resources.

On the peacekeeping budget, he expressed concern over its significant increase in recent years, which seemed to have reached an unsustainable level for Member States.  That being the case, Japan welcomed recent initiatives by the Secretary-General to deal with the increasing size and diversity of missions, which were expressed in the New Partnership Agenda, Charting a new Horizon for UN Peacekeeping and the new support strategy.  His delegation was ready to engage itself in following up on those initiatives, so that they had concrete results; namely, that they would help to ensure budgetary discipline and streamlining of management, which, in turn, would lead to effective implementation of peacekeeping mandates.

JORGE CUMBERBATCH ( Cuba) said that, even though the financial situation of the Organization had been presented to the Committee as “mixed”, it did not differ significantly from previous years.  The main contributor, which benefited the most from the distortion in the calculation of the scale of assessments, was responsible for 93 per cent of the unpaid contributions to the regular budget.  It was also liable for important debt to peacekeeping operations and international tribunals.  The information presented to the Committee contradicted the announcement, with great fanfare, that the main contributor’s bills had been paid.  The truth was that the major contributor owed the Organization $1.3 billion, and it was not known yet whether it had met its obligations to the Capital Master Plan.  In the meantime, a group of countries had made enormous efforts to meet their financial obligations to the United Nations, amidst an unjust international order afflicted by multiple simultaneous crises, as a result of disastrous neo-liberal policies imposed by a few amassing most of the wealth generated in today’s world.

Cuba’s commitment to multilateralism manifested itself not only in its active participation in the deliberations at different United Nations forums, but also in the fulfilment of its financial obligations, he said.  Despite the application of the cruel and illegal blockade against Cuba by the United States, the enormous losses caused by the last hurricane season and the terrible consequences of the current financial crisis, his country had made updated contributions to the regular budget, the Capital Master Plan and the Tribunals, and had partially settled its obligations to the peacekeeping budget for the current segment.

The tightening of the blockade against the Cuban bank and financial system continued to affect Cuba’s payments to the United Nations, he said.  Its money transfers were subject to market currency fluctuations, due to the impossibility of using United States dollars in its international transactions.  For instance, recently, the Cuban Industrial Property Office had been prevented from paying for international patent applications to the office of the World Intellectual Property Organization (WIPO) in Geneva, as Swiss banks had refused to carry out the operations, as a result of the extraterritorial implementation of the blockade.  In February this year, a British bank with a branch in a Latin American country had refused to accept a transfer of $2,000 from Cuba aimed at making a contribution to an international organization.  He wondered what was being pursued by trying to silence Cuba’s voice in the multilateral institutions.  It seemed that, after 50 years of revolution, some still had not got used to the idea of an independent and sovereign Cuba.

He also expressed concern over the existing imbalance in the use of the resources available at the United Nations, insisting on the need to reorient the works of the Organization in favour of the activities related to the economic and social development of the world’s peoples.  That would be the best guarantee of peace and security in the twenty-first century.  And, finally, he reaffirmed his country’s readiness and political will to meet its financial obligations on time, in full and without conditions.

MUHAMMAD A. MUHITH (Bangladesh), aligning himself with the Group of 77 developing countries and China, said the Under-Secretary-General’s presentation last week clearly showed how the unpaid assessed contributions of a few were weakening the entire Organization’s financial health.  While he urged Member States to pay assessments in full, on time and without conditions, he was empathetic to those States that were unable to fulfil their obligations for reasons beyond their control.  Such issues should be considered through the established procedures.   Bangladesh noted with deep concern that unpaid assessed contributions had increased from $756 million on 24 October 2008, to $830 million on 13 October 2009.  That increase was coupled with a rise in the number of States that had not fully paid their assessed contributions.  Such a situation was unacceptable and the rate of non-payment must be stopped.

Further, the volume of outstanding payments of $2.1 billion could not be ignored, and he urged that States not defer their assessed financial obligation.  Also, the unhealthy practice of cross-borrowing should stop.  He reiterated the Group’s call that “cash surpluses in any active peacekeeping missions should preferably be utilized for the outstanding liabilities, such as troops and equipment payments”.  While noting with appreciation the Secretariat’s assurance to monitor peacekeeping operations’ cash flow for making quarterly payments, he stressed that funds must be made available to make such payments.   Bangladesh was concerned at the increasing debt to Member States providing troops and equipment, which was projected to jump by some 119 per cent, to an estimated $944 million at end-2009, versus an actual $431 million at end-2008.

In addition, countries that responded to the United Nations call to contribute to peace and security were mostly developing nations, which mobilized their resources under difficult circumstances.  He called on all States to ensure timely reimbursement of payment in that regard.  In closing, he reiterated Bangladesh’s commitment to the Charter obligations and appealed to all to recommit themselves in the same manner.  Erratic inputs of essential provisions could only cripple the United Nations.  That was certainly not what Bangladesh wished for the Organization.

ABDUL HAMEED ( Pakistan) affirmed the full and timely payment of assessed contributions in accordance with the principle of “capacity to pay”, which was enshrined in the Charter.  Its importance for the smooth functioning of the United Nations could not be overemphasized, especially in light of the financial situation within the Organization, which was worsening.  Since last October, unpaid assessments to the United Nations had increased from $756 million to $830 million. However, the unpaid assessment to peacekeeping had been reduced, from $2.9 billion to $2.1 billion at the end of this October.  At the same time, the increase in debt owed to Member States was growing rapidly.  The amount owed for troops and formed police units was projected to increase from $431 million last December to an estimated $944 million at the end of December 2009.  He opposed any cross-borrowing among the peacekeeping operations.

He said the issue of cash surpluses could be handled by utilizing them more fully for outstanding liabilities in respect to Member States.  Lastly, the poor financial situation of International Tribunals continued; unpaid assessments had risen from $53 million to $63 million this year.  He noted that 119 Member States had not paid their contribution for the Capital Master Plan, with $86 million outstanding.

YU HONG (China), aligning herself with the Group of 77, noted with concern that, apart from peacekeeping assessments, there had been an increase in various unpaid assessments in 2009, compared with the prior year.  As of 13 October, there was $830 million in unpaid assessments for the regular budget, $63 million for the two Tribunals, $2.12 billion for the peacekeeping budget and $86 million for the Capital Master Plan.  Moreover, the number of Member States that had paid their assessments in full had dropped, while outstanding payments to Member States were on the rise and had reached $1.38 billion at the end of September.

She said a sound financial foundation was an important guarantee for the United Nations to better fulfil its Charter responsibilities, as it was playing an increasingly important role in international affairs.  Also, Member States should fulfil their financial obligations by paying various assessments on time, as the relationship between the United Nations revenue and expenditure would otherwise be distorted.  While the financial crisis had brought great financial pressure on Governments, many States had still managed to pay their assessments in full, and China commended that.  Further, it was necessary to increase efficiency and enhance transparency in the formulation and disbursement of the United Nations budget.  In those efforts, consideration should be given to the capacity of Member States, notably developing countries.  It was also necessary to reinforce budget management, strictly follow rules of financial discipline and make every cent count.

As a low-income developing country, China had taken concrete actions to contribute, within its ability, to the United Nations sound financial foundation, she said.  China had fully paid its assessed contributions to the regular budget, the two Tribunals and the Capital Master Plan, as well as part of its peacekeeping assessments.  It would pay the remainder before year’s end.  In closing, she said China was willing to work with other parties with a view to ensuring a sound and healthy financial foundation for the Organization.

JOSÉ LUIS CANCELA ( Uruguay) expressed support for the statements by the Group of 77 and China, and of the Rio Group.  He expressed appreciation for the efforts by Member States to keep up with payments of assessed contributions in the face of the world financial crisis.  Uruguay was almost up to date on its payments, owing no more than $250,000.  It had been very difficult to make those payments, but they reflected the country’s commitment to the United Nations.

He expressed deep concern over the peacekeeping situation, due to late payments to peacekeeping operations, and over the ensuing delay in reimbursement for troops and equipment to contributing countries.  That caused problems for those countries in pursuing development.  There had been no substantial improvement over last year for troop-contributing countries.  Uruguay received payments, on average, 12 months late.  Total debt to the country, at present, was approximately $35 million.  That figure might not seem like a great deal, but was significant to Uruguay, which was the largest troop-contributing country per capita, and ranked fifteenth overall.  The efforts made by troop-contributing countries should be repaid promptly, in respect of reimbursements.

This year, various peacekeeping operations had been in the red and cross-borrowing had occurred, he said.  That involved using the funds of all Member States, including those that were up to date, due to delays in payments by major contributors.  Deficit and emergency operations would be avoided if prompt action was taken.  Major contributors must live up to their commitments.  In closing, he recalled that the peacekeeping system was still the most effective way of dealing with conflict situations, both in financial terms and in terms of loss of life.  While the peacekeeping budget was larger than the regular budget, it represented only 0.55 per cent of the global defence budget.

CLAUDIA CORTI ( Argentina) said the financial health of the United Nations was crucial for the implementation of its mandates, and all countries must meet their financial obligations to the Organization without preconditions.  Sometimes, however, financial difficulties prevented countries, including her own, from making payments, despite their political will to do so.

The financial situation of the United Nations was mixed, she continued.  Despite the trend towards improvement in some areas, her delegation was still concerned about the outstanding dues, which made it difficult for the Secretariat to implement mandated activities, including the mandates given by the Security Council.  She was also concerned about the delays of payments to troop-contributing countries.  The Committee had been told of the estimates in terms of payments to the contributors of troops and equipment, which amounted to some $950 million, doubled from 2008.  She recognized the Secretariat’s efforts to make payments when funds were available, but there were problems due to delays in the payment of assessed contributions.  Payments to troop-contributing countries were sometimes over a year late, as in the case of her country.  That jeopardized the success of missions.

In conclusion, she drew attention to the fact that, during the last session, Argentina had paid $63 million to the regular and peacekeeping budgets, demonstrating its commitment to the United Nations and multilateralism.

MEHMET YENER ( Turkey) endorsed the statement made on behalf of the European Union and said that the United Nations could not effectively implement its mission without sufficient resources.  To that end, all Member States must meet their obligations in full and on time.  Nonetheless, the vulnerabilities of less developed countries must also be considered.  Shares for both the regular and peacekeeping budgets should reflect a fair and balanced distribution of financial responsibilities among Member States.  Turkey remained committed to providing adequate and efficient financial support to the United Nations.

VLADIMIR PROKHOROV ( Russian Federation) said the financial situation of the Organization was still mixed.  Despite the fact that, at the end of the year, a positive cash situation was projected under all sections, he was concerned that, as of 13 October, the amount of unpaid dues had been higher than at the end of 2008 in all areas except for the peacekeeping budget.  The major amount of unpaid assessments still fell to a small group of Member States.  He was also concerned over an increase in United Nations debt to Member States that provided contingents to peacekeeping operations.

The fact that Member States did not discharge their financial obligations to the United Nations occurred against the backdrop of an increase in expenditures in many areas, particularly peacekeeping, he continued.  That could undermine the Organization’s ability to preserve international peace and security.  The only way to avoid such a negative scenario was through strengthened financial discipline and urgent payment of dues.  Of course, the Member States that shouldered the financial burden of the United Nations had the right to require rational financial planning and realistic assessment of requirements that were needed to discharge mandates.

In conclusion, he reiterated his delegation’s position that Member States must meet their obligations under the Charter to pay their dues in full and without conditions.  He expected Member States to make every effort to pay off their debt, which would enable the United Nations to respond more effectively to the global challenges and threats.  That would also allow the Organization to implement the programmes and projects approved by Member States.

LORENA GIMÉNEZ-JIMÉNEZ ( Venezuela) joined the statements of the Group of 77 and China and of the Rio Group.  She further said that some countries faced severe financial constraints, due to circumstances beyond their control, and were unable to meet their obligations on time.  Others, also facing great financial burdens, still met their obligations to the Organization.  The United States alone owed 93 per cent of unpaid assessed contributions for the regular budget, an amount of $772 million.  She expressed the hope that that country’s past practice of withholding payment to pressure Member States was at an end.  Further, she said, the United States had also benefited from changes to the scale of assessments.  States’ capacity to pay must be a consideration in determining the scale.

JOSEPH MELROSE (United States) outlined recent actions by the United States to pay its debt to the United Nations, stressing the commitment of the Obama Administration to strengthening its financial relationship with the Organization.  His country had recently paid over $1.2 billion to the United Nations, essentially eliminating its arrears for the past decade to the Organization and its peacekeeping operations.  The United States was now current in its peacekeeping payments and would be paying its 2009 regular budget assessment by the year’s end, as well as its dues for the Capital Master Plan in the amount of some $675 million.  His Government continued to work to further strengthen its financial performance in meeting its commitments to the United Nations.

The representative of Sudan said he expected a response from the Controller to his question.

Responding to a number of questions posed by delegations, Mr. YAMAZAKI said that he hoped to see progress in payments of assessed contributions by year’s end and noted that the next report on the Organization’s financial situation would come in May 2010.

On payments still due from the United States, he noted, among other amounts, $75.5 million owed towards the Capital Master Plan budget, as part of total arrears of $1.389 billion.

The amounts owed to Member States for peacekeeping would be reduced as resources came in, he said.

Action on Draft

The Committee then approved, without a vote, a draft resolution on financial reports and audited financial statements, and reports of the Board of Auditors (document A/C.5/64/L.3), by the terms of which the General Assembly would accept the financial report of the United Nations High Commissioner for Refugees for the year ended 31 December 2008, as well as related a related audit opinion of the Board of Auditors and recommendations of the Advisory Committee on Administrative and Budgetary Questions (ACABQ).

Endorsing the recommendations of the Board, the Assembly would note its concerns as contained in the qualified audit opinion on the financial statements of the voluntary funds administered by the United Nations High Commissioner for Refugees, which followed a Board of Auditors modified audit report in 2008.  It would further note the measures taken by the Office to address the seriousness of its financial problems, and encourage the United Nations High Commissioner for Refugees to implement all the recommendations of the Board and to report to the relevant governing bodies on progress made in that regard.  The Assembly would further commend the Board of Auditors for its identification of common reasons for the lack of full implementation, as well as good practices in relation to the implementation and follow-up of its reports.

The Assembly would request the Secretary-General and executive heads of funds and programmes to ensure full and prompt implementation of the recommendations and to hold programme managers accountable for it.  In the future, an explanation for delays would be requested, as well as information on the time frame and priorities for the implementation and office holders to be held accountable.

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For information media • not an official record