Sixty-fourth General Assembly

Fifth Committee

33^rd Meeting (AM)

Budget Committee Discusses UN Financial Situation; Speakers Highlight Level

of Unpaid Assessments, Amount Owed to Countries Contributing Troops, Police

Also Takes Up 2010/11 Budget for Logistics Base

Encouraged by the decrease in arrears to both the United Nations regular budget and its peacekeeping account compared to last year, speakers in the Fifth Committee (Administrative and Budgetary) this morning urged that States do even more to ensure that outstanding payments were paid on time and in full, and that the Secretariat reciprocate by making administrative processes more transparent and efficient.

As described by the representative of Singapore, unpaid assessments for peacekeeping had fallen from $2.88 billion in 2008 to $1.85 billion in 2009.  Unpaid assessments to the regular budget had fallen from $417 million in 2008 to $335 million in 2009.  The level of overall unpaid assessments had also improved across all categories as of 30 April of this year, with the sum total of 2010 bettering the figure for 2009 by just over $1 billion.

While speakers saw that decrease in unpaid assessments positively, the amount left unpaid was still large by many speakers’ standards, including from the European Union’s view.  “The significant level of outstanding assessments reminds us of the need to take this matter seriously,” said the representative of Spain, who spoke on behalf of that bloc of countries.  Its member states contributed about 40 per cent of all assessed contributions, she added, stressing the importance of efficient and transparent use of resources by the Organization.

The representative of Yemen, speaking on behalf of the “Group of 77” developing countries and China, noted that about $750 million was still owed to troop- and police-contributing countries, most of which were developing countries.  He cautioned that many of them were not in a position to sustain their commitments for extended periods.

“Let us be mindful of the many sacrifices being asked of these committed men and women in the field, many of whom are from members of the Group,” he added, saying it was vital to pay off those debts.

Many speakers also voiced appreciation at the Secretariat’s initiative to create a portal for Member States to follow up on the status of contributions, which, if implemented properly, would facilitate the Committee’s work.

Also today, the Committee heard the introduction of reports relating to the financing of the United Nations Logistics Base by Under-Secretary-General Jun Yamazaki, United Nations Controller, and a corresponding report by the Chair of the Advisory Committee on Administrative and Budgetary Questions (ACABQ), Susan McLurg.

According to the Secretary-General’s reports, the General Assembly appropriated $45.77 million gross ($42.29 million net) for the Logistics Base in 2008/09, which was subsequently assessed on Member States.  The Assembly was asked to approve a budget of $72.02 million for the 2010/11 financial year, to be prorated among individual active peacekeeping operation budgets.

Ms. McLurg said ACABQ remained concerned with the overall management of strategic deployment stocks and again recommended that a review of the management and acquisition process be undertaken.  There must also be adequate safeguards to prevent waste and financial loss to the Organization.  Regardless of the outcome of the discussions on the proposed global field support strategy, ACABQ emphasized that there was a need for change in the overall management of strategic deployment stocks.

Others speaking today were the representatives of Chile (on behalf of the Rio Group), Canada (also on behalf of Australia and New Zealand), Philippines (on behalf of the Association of South-East Asian Nations), Cuba, Japan and the Russian Federation.

The Committee will meet again at 10 a.m. Thursday, 17 May, to continue its discussion on the United Nations Logistics Base.

Background

The Fifth Committee (Administrative and Budgetary) met this morning to discuss improving the financial situation of the United Nations, and had before the latest report of the Secretary-General on the issue (document A/64/497/Add.1).  It provides a review of the Organization’s financial situation at 31 December 2009 and updated projections based on information as of 30 April 2010.  The main points of the report were presented by the Under-Secretary-General for Management, Angela Kane, on 7 May (see Press Release GA/AB/3947).

In addition, the Committee took up several reports on financing of the United Nations Logistics Base, beginning with its performance report for the period from 1 July 2008 to 30 June 2009 (document A/64/575).  The General Assembly appropriated $45.77 million gross ($42.29 million net) for the Logistics Base, which was subsequently assessed on Member States.  The report asks the Assembly to decide on the treatment of an unencumbered balance of $1.43 million, along with $3.41 million in other income derived from interest, other/miscellaneous income and cancellation of prior-period obligations.

According to the budget document for the Logistics Base for the period from 1 July 2010 to 30 June 2011 (document A/64/698), the Assembly is asked to approve a budget of $72.02 million, to be prorated among individual active peacekeeping operation budgets.

The Advisory Committee on Administrative and Budgetary Questions (ACABQ), in its related report (document A/64/660/Add.12) makes recommendations that would entail a reduction of about $3.85 million.  Among the posts not recommended for approval was that of Deputy Director at the D-1 level.  As indicated in the budget document, the Deputy Director would liaise with troop- and police-contributing countries on the specifics of re-profiling the strategic deployment stocks composition, to facilitate the modularization programmes under the global field support strategy, and too support the Director in the implementation of the strategic plan for modularization programmes.

ACABQ was unconvinced of the need for the establishment of that post at this time, as arguments supporting the establishment of the post are linked to the re-profiling of the Logistics Base as a global service centre.  ACABQ recommends that it be further justified in the Secretary-General’s proposal on the Logistics Base as a global service centre in the context of the budget submission for 2011/12.

United Nations Financial Situation

JUN YAMAZAKI, United Nations Under-Secretary-General and Controller, drew attention to paragraph 29 of the document before the Committee, in which it is noted that Croatia, Denmark and Georgia had fully paid their dues since 30 April 2010, joining the 22 other Member States in that position.  Tajikistan had followed soon after, bringing the total to 26 States.  Turkmenistan and the United Kingdom had paid their assessments with respect to the regular budget, the tribunals and the capital master plan; Bahrain with respect to the regular budget and Capital Master Plan; China with respect to the tribunals and Capital Master Plan; Bosnia and Herzegovina with respect to the tribunals; and Iraq and Turkey with respect to the regular budget.

WALEED AL-SHAHARI (Yemen), speaking on behalf of the “Group of 77” developing countries and China, noted the shortfall in assessments paid, of $1.06 billion to the United Nations regular budget and $1.24 billion to the peacekeeping budget.  The Group could sympathize with many States hit hard by the global financial crisis or by natural disasters.  Nevertheless, the Group thought it unfortunate that about half the outstanding payments were owed by a single country, striking at the heart of efforts to enhance the Organization’s effectiveness and efficiency.  Full, timely and non-conditional payment of assessed contributions was a Charter obligation.  The Group also rejected unilateral coercive measures, contrary to international law, that sometimes impeded payments from its member States.

He remarked that about $750 million remain owed to troop- and police-contributing countries, most of which were developing countries that were not in a position to sustain their commitments for extended periods.  “Let us be mindful of the many sacrifices being asked of these committed men and women in the field, many of whom are from members of the Group,” he said, adding that it was vital to pay off those debts.  The Group appreciated the Secretariat’s initiative to create a portal for Member States to follow up on the status of contributions, which, if implemented properly, would facilitate the Committee’s work.  He expressed gratitude to the Secretariat for its assistance.

BEATRIZ GONZALEZ BETANCORT (Spain), speaking on behalf of the European Union, reiterated that it was the responsibility of each Member State to pay its assessed contributions in full, on time and without conditions.  At the same time, the Organization must ensure the effective and efficient use of resources, especially in the context of the world financial crisis.  The European Union was satisfied with the overall picture of the Organization’s finances, and noted that unpaid assessments had decreased and the on-hand cash situation looked healthier.

While the European Union was pleased that, as at the end of 2009, 136 Member States had fully paid their regular budget assessments, she noted that that was 10 fewer than at the end of 2008.  She expressed further concern that, as of 30 April 2010, outstanding assessed contributions totalled some $1.06 billion.  As for the peacekeeping budget, she noted that, while there had been some improvement, the $1.24 billion in unpaid contributions was nevertheless cause for concern.  “We call on Member States to pay their contributions in order to enable the Organization to perform the challenging tasks and to fully implement its peacekeeping operation mandates,” she said, and reiterated at the same time that the balance of funds in the closed peacekeeping operations account should be returned to Member States.

Turning next to the financial state of the international tribunals, she said that, while 59 Member States had paid their assessed contributions to those courts in full as of 30 April 2010 — 12 more than last year in the corresponding time period — unpaid assessments were at some $86 million.  That situation might hamper the completion strategies of both tribunals.  As for the Capital Master Plan, which the European Union strongly supported, the outstanding amount as at 30 April 2010 was $117 million.  In order to ensure the timely implementation of that project, all Member States should pay their contributions.

Concluding, she said the Organization could perform its increasing and challenging tasks only when Member States fulfilled their financial obligations.  “The significant level of outstanding assessments reminds us of the need to take this matter seriously,” and the European Union, which contributed some 40 per cent of all assessed contributions, would also continue to stress the importance of the most effective, efficient and transparent use of resources, and a more balanced way to share the Organization’s budgetary responsibilities.

MANAHI PAKARATI (Chile), speaking on behalf of the Rio Group, stressed the importance of ensuring that the Organization had adequate funding and affirmed the need for all States to meet their obligations on time.  It was important to emphasize the effort being made by developing countries to meet their financial obligations, despite their limitations and difficulties.  Also, the Rio Group rejected any unilateral measure, contrary to international law, that made it difficult, and on occasion impossible, for its members to make their contributions.

She said the Group noted, with satisfaction, that the financial situation in 2009 showed progress compared with 2008, as regards the status of payments.  But, it noted with concern that there was still a deficit in both the regular and peacekeeping budgets, and wished to draw attention to the fact that over 60 per cent of that amount was owed by one country.  The status of reimbursements for troops and contingent-owned equipment was still unsatisfactory, and she reiterated the importance for each State to meet their financial obligations.  The Group was satisfied that the payment shortfall for international tribunals was smaller than last year, and she called on States to continue to support the Capital Master Plan, as several countries in her region had done.

PHILIPPE LAFORTUNE (Canada), speaking also on behalf of Australia and New Zealand, said he was encouraged by the improvement in the Organization’s overall financial situation, as the level of outstanding assessments had decreased in comparison to 2009.  But, he was concerned by the increased number of States failing to fully meet their financial obligations — up to 56 countries, or close to one third.  He reminded States of their Charter obligation to pay assessments on time.  While some Governments might find it difficult to fulfil all their financial obligations given the current global financial environment, unpaid assessments from some States had the effect of penalizing others, including Member States that had paid in full and on time, and troop-contributing countries left waiting for the reimbursement of costs incurred.

He welcomed the Secretariat’s new Internet portal showing the status of contributions.  At a time when States were asking the Organization to do more, and when the regular and peacekeeping budgets continued to reach record levels, the membership was called to continually look for ways to eliminate waste and duplication, to rationalize activities and redeploy resources and to streamline the Organization’s administration.

LIBRAN N. CABACTULAN (Philippines), speaking on behalf of Association of Southeast Asian Nations (ASEAN), said that the Member States of his delegation accounted for only 1.019 per cent of the total United Nations scale of assessment for the regular budget, roughly some $25 million.  That was perhaps only a “drop in the bucket”, but during hard times, that modest contribution went a long way in funding the Organization’s operations and activities.  The ASEAN nations took pride in the fact that they strove to pay their financial obligations in full and on time, notwithstanding the financial crisis that had hit that region and forced its Governments to drastically cut expenses.

He went on to say that lack of funding had been a perennial problem for the United Nations.  From the Organization’s birth, until today, it had been beset by funding gaps.  At the same time, the costs of its regular activities and peacekeeping operations had increased dramatically in recent years, even as payments of assessed contributions failed to keep up.  Resources were now stretched to the breaking point, and the arrears, if not addressed, would eventually undermine the world body’s effectiveness.

“We all share a responsibility for this situation, but at the same time, we also have the capability to provide the solution,” he said, stressing that all Member States must renew and strengthen their commitments to the Organization.  Everyone had a stake in replenishing the United Nations coffers, as it could only be effective if it had the necessary resources to carry out its mandates.  Thus, ASEAN appealed to all Member States to act with urgency and responsibility to meet their financial obligations.  He also urged the Secretariat to continue to search for innovative and cost-effective ways to use the limited resources at its disposal, as well as to strive for greater accountability and better delivery of results.

PEDRO NÚÑEZ MOSQUERA (Cuba) said the fact that a major portion of the debt to the United Nations budget concentrated around one delegation was “significant”.  This month, the Committee was due to debate a proposal to set practical measures to seek more efficiency in the peacekeeping budget.  Against that backdrop, payment of pending debts was important, especially to help dissipate concerns regarding reimbursement to troop- and police-contributing countries, the best way to settle loans between missions, and to arrive at a fair decision on closed missions.  Cuba still stood by its appeals to States to honour their financial commitments in a timely way, in full and without conditions.  As a developing country that existed in an unfair international economic order, Cuba stood for fair multilateralism, as shown through its active participation at United Nations deliberations and also in honouring its financial responsibilities.  Though shackled by an illegal United States policy to enact a commercial and financial blockade on Cuba, as well as suffering through a global crisis created by disorder and irresponsibility on the part of others, it was nevertheless up to date with its payments for peacekeeping and the Capital Master Plan, and had paid half its contributions to the regular budget.  It had made those payments in United States dollars through a third party.

He acknowledged to importance of United Nations mediation for many countries receiving peacekeeping services.  Even so, peace and security efforts were too costly, especially when the cost of special political missions were included in the price tag, and stood to be better managed so that it did not affect the Organization’s other areas of work.  For a fraction of what the world spent on military activities, much could be done to meet economic and social development needs.  For the main guarantee for peace and security was full eradication of poverty, ridding the world of social marginalization and upholding the right to development.  He thanked the Secretariat for the creation of an online portal describing the status of payments.

AKIRA SUGIYAMA (Japan) said that, despite its very difficult fiscal situation at home, his country had faithfully fulfilled its financial obligations to the United Nations.  This year, in particular, Japan had redoubled its efforts to pay its assessed contributions for peacekeeping operations earlier than ever, especially in light of the increased requirements for the United Nations Stabilization Mission in Haiti (MINUSTAH) following the tragic 12 January earthquake in that country.  On the overall financial state of the Organization, he was pleased to note that unpaid assessments were lower across the board this year.

Since Member States were making the effort to improve the financial situation of the Organization, Japan would strongly request the Secretariat to improve accountability and to use the resources available to it more effectively.  “We would like to se what concrete gains we can obtain from our investment in the Organization,” he added.  Turning to closed peacekeeping operations, he said the reports before the Committee had noted that some $194 million remained in the accounts of such missions and would be freely available for possible cross-borrowing for other accounts.  Japan was concerned about that situation and believed that cross-borrowing from those accounts should be considered an exceptional measure to deal with cash shortfalls of active peacekeeping missions only, not for other accounts, especially the regular budget.  Japan would like to seek clarifications on that issue.

VLADIMIR N. PROKHOROV (Russian Federation) said there were promising signs that the Organization’s financial situation had begun to improve by the end of last year.  Nevertheless, the financial state of the United Nations could not be said to be truly stable.  Indeed, the failure of some Member States to pay their assessed contributions could negatively impact implementation of the world body’s respective mandates.  He was particularly concerned that the approved budgets of some peacekeeping missions remained unfulfilled.  Member States must honour their Charter obligations to pay their assessed contributions “scrupulously and without conditions”.  The Russian Federation expected all States to meet their obligations so that the Organization could carry out its important mandates in peacekeeping and in other areas.

CRAIG LIM (Singapore) said his Government was encouraged to know that unpaid assessments had dropped, and it was particularly significant that unpaid assessments for peacekeeping had fallen from $2.88 billion in 2008 to $1.85 billion in 2009.  The fall in unpaid assessments to the regular budget from $417 million in 2008 to $335 million in 2009 was also welcome news.  The level of overall unpaid assessments year-on-year as of 30 April had also improved across all categories, with the sum total of 2010 bettering the figure for 2009 by just over $1 billion.  Applauding those States that had paid their dues, he also acknowledged major contributors for reducing the amount of their unpaid assessments.  But, the situation was far from ideal, and those major contributors must play their part.  In turn, the Secretariat must improve its efficiency and accountability in its use of resources.  With national treasuries under tremendous financial pressure everywhere, it was incumbent on Member States to insist on value for money from the Secretariat.

While there was reason for a little optimism based on the report by Under-Secretary-General for Management, Angela Kane, he said the Organization should be mindful of the need to exercise greater prudence and discipline, given the growth in the budget.  There had often been limited transparency in many of the decision-making processes that led to the establishment of mandates.  That was an issue that Singapore had a deep interest in.

United Nations Logistics Base

Mr. YAMAZAKI introduced the reports relating to the United Nations Logistics Base, including its performance report for 2008/09 and budget document for the 2010/11 period.

SUSAN MCLURG, Chair of ACABQ, introduced that Committee’s relevant report.  She added that the Secretary-General had proposed to re-profile the Logistics Base as the global service centre for the field under the global field support strategy, with the United Nations Support Base at Valencia continuing to serve as a communications hub for field operations and had also been proposed as a secondary active site for disaster recovery.  As indicated in the budget document, plans in that connection would be presented to the Assembly in the context of the Logistics Base budget for 2011/12.

She said ACABQ would defer its consideration on the Secretary-General’s proposal to change the structure and functions of the Tenant Units, to include establishing a justice and corrections standing capacity.

Also, she said ACABQ remained concerned with the overall management of strategic deployment stocks and again recommended that a review of the management and acquisition planning process of such stocks be undertaken to ensure that proper and efficient management was strictly adhered to.  There must also be adequate safeguards to prevent waste and financial loss to the Organization.  Regardless of the outcome of the discussions on the proposed global field support strategy, ACABQ emphasized that there was a need for change in the overall management of strategic deployment stocks.

JUN YAMADA (Japan) said backstopping functions for peacekeeping operations should be viewed comprehensively.  In particular, when the Secretariat was proposing to transfer certain functions from Headquarters to the Logistics Base, it should make greater efforts to explain that such functions maintained their integrity.  Japan shared the concerns expressed by ACABQ that the way resources were represented in the Secretary-General’s report made it difficult for the General Assembly to get the total picture of resources.  He, therefore, requested that the Secretariat make every effort to address that concern during informal consultations.  He went on to reiterate Japan’s view on the support account, and that Member States needed to exercise the utmost prudence in determining the size of the resources of the Logistics Base as an essential part of the backstopping activities for peacekeeping operations.

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For information media • not an official record