Secretary-General Unveils $2.99 Billion Budget Proposal to Fifth Committee for 2021, Stressing United Nations Functioning Effectively amid COVID-19 Pandemic
Delegates in the Fifth Committee (Administrative and Budgetary) today reacted to the Secretary-General’s proposed programme budget of $2.99 billion for 2021, a net reduction of 2.8 per cent over 2020.
Appearing before the Committee to lay out the Organization’s second annual budget, United Nations Secretary-General António Guterres said that operating in a COVID-affected world has tested the Organization’s reform agenda. “I am pleased to report that our new processes and structures have proven instrumental in enabling us to remain open and function effectively,” he said. “We are open for business. We are running this Organization from thousands of dining tables and home offices.”
He said the management reforms — now in their second year of implementation along with reforms for the peace and security pillar and the development system — helped the Organization sustain its operations during the pandemic. The 2021 proposed budget provides $707 million for special political missions, a net decrease of $5 million compared to the 2020 approved budget.
Stressing that the Organization can only deliver on its mandates if Member States meet their financial obligations in full and on time, Mr. Guterres said the ongoing liquidity crisis has severely hampered the Organization’s ability to fulfil its obligations. “We are being forced to operate not on the basis of strategic direction, but rather on the availability of cash, which undermines mandate implementation,” he added.
Introducing the related report of the Advisory Committee on Administrative and Budgetary Questions (ACABQ), Chairman Abdallah Bachar Bong said it analysed how the COVID-19 pandemic and the liquidity crunch has impacted 2021 resources. The Advisory Committee outlined the measures the Secretariat is using to manage the situation, including suspending hiring under the regular budget and minimizing of non-post expenditures.
On staffing, he noted that 10,012 posts are proposed for 2021, including 200 temporary posts, which means a net reduction of 25 posts, compared with 2020. The Advisory Committee believes the Assembly needs updated and detailed organizational charts to reflect proposed changes in structure and post resources.
In the ensuing discussion, the delegate from Guyana, speaking for the “Group of 77” developing countries and China, called for more guidance during the annual programme plan and budget trial period to reach consensus-building conclusions. For the second year of the annual programme budget’s trial period, there is a lack of adherence to key established budgetary procedures and practices. Moreover, the proposed budget appears to replicate the same text and amounts from previous budgets. “This raises questions as to whether there is a clear link between resources and a results-based management framework,” she said. The Group is very concerned by the Organization’s growing reliance on voluntary contributions, she added, emphasizing that extrabudgetary resources must be used in a manner consistent with the Organization’s policies, aims and activities.
The representative of Singapore, speaking for the Association of Southeast Asian Nations (ASEAN), said the Organization’s mandates must be adequately funded. “We cannot continuously demand that the UN do more, while giving it less resources,” he said.
Cameroon’s representative, speaking for the African Group, reiterated the Group’s long-standing position that the United Nations budget must always be commensurate with given mandates. Especially important are the 2030 Agenda for Sustainable Development and the African Union’s Agenda 2063.
The speaker for the United States said the negative economic impact of COVID‑19 around the world means cost efficiencies are extremely important and taxpayer dollars must be well spent. She was unhappy with the so-called recosting technique that would boost the budget figure to over $3.04 billion, stressing that the issue of budget recosting must be addressed and overspending must be kept in check. The United States, she noted, continues to be the largest donor, contributing 22 per cent of the core budget and 25 per cent to the peacekeeping budget.
Japan’s representative, also observing that the so-called budget “add-ons” mean the 2021 budget will likely exceed the 2020 budget amount, said his delegation will assess the proposal objectively. The pandemic requires the United Nations to be nimble and responsive to external circumstances, and the upcoming budget year will be a good test case to confirm how the annual budget cycle has worked. Japan will seek greater improvement and predictability in the budget process, while monitoring budgetary discipline, accountability and efficiency.
Also speaking today were the representatives of Canada (also on behalf of Australia and New Zealand), Switzerland (also on behalf of Liechtenstein), Cuba, Myanmar, Qatar, United Kingdom, Philippines, Bangladesh, China, Russian Federation, Syria and Mexico, as well as the European Union.
Programme Planning and Proposed Programme Budget for 2021
ANTÓNIO GUTERRES, Secretary-General of the United Nations, introduced the Organization’s proposed programme budget for 2021, (documents A/75/6 (Introduction), and Sections 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16 and Corr. 1, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27 and Corr. 1, 28, 29, 29A, 29B, 29C, 29E, 29F, 29G and Corr. 1, 30, 31, 32, 33, 34, 35, 36 and Income Sections 1, 2, 3).
The Secretary-General said operating in an COVID-affected world has been a test of the Organization’s reform agenda. “I am pleased to report that our new processes and structures have proven instrumental in enabling us to remain open and function effectively,” he said. “We are open for business. We are running this Organization from thousands of dining tables and home offices.”
The reform process – now in the second year of implementation for peace and security pillar, the development system and the management of the Organization – has proved successful, he said. For example, 95 per cent of country teams have reported that a joint approach has strengthened relations with Governments. The management reforms, which brought substantial changes in structures, accountability, delegation and internal operations, have been critical to sustain business continuity during the pandemic. The unified information technology structure let the Organization jointly use corporate tools for communications and remote working arrangements. The proposed budget reflects the new approaches that have been introduced across all three tracks of reform.
To fully implement the Organization’s mandates, the Secretary-General requested a budget of $2.99 billion, a net reduction of 2.8 per cent compared to 2020, despite additional initiatives and mandated activities. In keeping with the budgeting methodology, the proposal includes $49.2 million for preliminary recosting, which means total requirements of $3.04 billion. The budget includes a net decrease of 25 posts. A provision of $707 million is included for special political missions, a net decrease of $5 million compared to the 2020 approved budget. This is primarily driven by lower operational requirements, including the closure of the United Nations Integrated Peacebuilding Office in Guinea-Bissau (UNIOGBIS).
He said the proposals include resources for new and expanded mandates and directives by the General Assembly, particularly for the Office of the High Representative for the Least Developed Countries, Landlocked Developing Countries and Small Island Developing States, the human rights treaty body system and the expansion of the Advisory Committee on Administrative and Budgetary Questions (ACABQ).
Last year, he said, he had proposed an increase in funding of $3.3 million, or about 10 per cent, for technical cooperation projects. The draft proposal maintains the Regular Programme for Technical Cooperation at this higher level to maximize support to achieve the Sustainable Development Goals. The projects will meet Member States’ increased demands in a responsive and agile fashion and complement the reformed Resident Coordinator system.
The budget numbers reflect several initiatives to catalyse mandate delivery in three essential areas, he continued. First, the budget includes $1.9 million to deliver a new global communications strategy for the United Nations. “The COVID-19 crisis shows us more than ever the need for authoritative communications from the United Nations, countering misinformation and promoting solidarity,” he said. “With your support, we can use additional resources to acquire new communications tools and technologies; train staff, particularly in digital storytelling; and expand our reach and impact in multiple languages.”
Secondly, $0.7 million is included to improve risk management through strengthened staff development and training, which is part of the global human resources strategy, he said. This includes organizational learning, organizational development and an online learning platform. Thirdly, $7.0 million is earmarked to strengthen the information technology enterprise network. The ongoing alternative work arrangements show the proceedings of intergovernmental bodies and the global Secretariat’s work rely heavily on the enterprise network. Yet limitations have meant that, since the pandemic erupted, the Organization has not been able to provide interpretation for official meetings held virtually. The Organization also needs more investment in more resilient infrastructure to counter increasingly sophisticated cyberattacks.
The Secretary-General repeated that the United Nations can only deliver on its mandates if Member States meet their financial obligations in full and on time. The ongoing liquidity crisis has severely hampered the Organization’s ability to fulfil its obligations. “We are being forced to operate not on the basis of strategic direction, but rather on the availability of cash, which undermines mandate implementation,” he said, adding that is crucial for the Organization to resolve the structural issues “that create and exacerbate this persistent and unacceptable situation”.
“Even before the COVID-19 pandemic, the world was facing immense challenges that require the United Nations to have adequate resources,” he said. “Together, we must meet this global test with solidarity, determination and a budget that reflects our seriousness in serving the world’s people.”
ABDALLAH BACHAR BONG, Chairman of the Advisory Committee on Administrative and Budgetary Questions (ACABQ), introduced its report on the proposed programme budget for 2021 (document A/75/7 and Corr. 1). The report covers the estimated resource requirements for the Secretariat, except a detailed review of the proposed resources for the special political missions and other related items, which will be introduced separately. Noting that the Secretary-General proposed a 2021 budget of $2.99 million before recosting, including $706.8 million for special political missions, he said that additional elements introduced later in the seventy-fifth session — including requirements for ongoing construction projects and revised estimates relating to new and expanded mandates — will impact the overall level of resources required for 2021.
Having analysed the impact of the COVID-19 pandemic and the liquidity situation on the resources for 2021, he said the Advisory Committee noted the measures the Secretariat is using to manage the situation, including a suspension of hiring under the regular budget and the minimizing of non-post expenditures. Noting that spending for the first five months in 2020 was lower, compared to average expenditures for the same period from 2017 to 2019, he said the General Assembly should ask the Secretary-General to provide more information on the impact of the COVID-19 pandemic in the next proposed programme budget. This would include lessons learned, best practices, efficiency measures, harmonization and cooperation across the United Nations system, as well as its impact on the flexible workplace strategy and expenditures. The Advisory Committee also trusts the Assembly will receive an update on the liquidity situation and expenditures.
Regarding the budget methodology, format and presentation, he noted the improved presentation of the proposed 2021 programme budget and recommended that the proposed budget be recosted only once for clarity and to simplify the budget process, rather than twice. Regarding vacancy rates, he noted that all the budget sections reflect a uniform vacancy rate by staff category of 9.1 per cent for the Professional and higher posts, and 7.4 per cent for the General Service and related posts. Given the difference in actual vacancy rates reflected in individual sections of the programme budget, the ACABQ considers an overall single rate by staff category for all sections is unrealistic and may impact mandate delivery for some sections. It recommends that the Secretary-General propose specific vacancy rates for both Professional and higher and General Service and related categories for individual sections of the programme budget.
On staffing, he noted that 10,012 posts are proposed for 2021, including 200 temporary posts, reflecting a net reduction of 25 posts, compared with 2020. The Advisory Committee trusts that the Secretary-General will provide the Assembly with updated and detailed organizational charts reflecting proposed changes in structure and post resources, reiterates that vacant posts should be filled expeditiously and recommends that the Secretary-General provide the Assembly with a detailed update on the recruitment freeze and vacant posts. The Advisory Committee is also concerned to see a high number and proportion of senior posts at the level of D-1 and above, and that reductions in the junior Professional-level grades could negatively impact efforts to rejuvenate the Secretariat’s workforce. Turning to non-post resources, he supported greater use of virtual meetings and online training tools, and that travel for workshops, conferences or meetings should be kept to a minimum, recommending a reduction of 10 per cent to the proposed resources.
As Member States took the floor, the representative of Guyana, speaking on behalf of the “Group of 77” developing countries and China, called for more guidance during the annual programme plan and budget trial period to reach consensus-building conclusions. Consideration of the programme plan is not exclusively the Fifth Committee’s prerogative and the Assembly Plenary and all Main Committees must retain their role in reviewing and acting on the recommendations of the Committee for Programme and Coordination. The Fifth Committee again faces the undeniable violation of rules and regulations governing programme planning, the budget’s programme aspects, implementation monitoring and the evaluation methods. The Group is also “gravely troubled” by the timeline under which the related programme budget has been prepared by the Secretariat, analysed by the ACABQ and then presented, and looks forward to discussing the appropriate sequence to be followed during the entire programme plan and budget process.
For the second year of the annual programme budget’s trial period, there is a lack of adherence to key established budgetary procedures and practices, particularly the sequential nature of the review processes carried out by the Committee for Programme and Coordination and the ACABQ, she said. The proposed budget appears to replicate the same text and amounts from previous budgets. “This raises questions as to whether there is a clear link between resources and a results-based management framework,” she warned. Noting an increasingly wider gap between the budgeted and the actual vacancy rates, she said vacancy rates should not be used to achieve artificial savings, at the expense of mandate delivery.
The development pillar should be strengthened, she continued, voicing concern about proposed budget cuts to bodies that are integral to that pillar, particularly the Regional Economic Commissions. The Group is also very concerned by the growing reliance on voluntary contributions, she said, emphasizing that extrabudgetary resources must be used in a manner consistent with the Organization’s policies, aims and activities, and all extrabudgetary posts must be administered with the same rigour as regular budget posts. “The Group firmly rejects any manipulation of the Organization's delivery of mandates by skewing priorities towards specific areas that receive more voluntary funding,” she said. “We reiterate our long-standing position that adequate resources must be provided for the Organisation to fulfil its mandates.”
The delegate for Cameroon, speaking on behalf of the African Group, said it will pay keen attention to specific budget issues, including funding for the Economic Commission for Africa (ECA); special political missions; United Nations support for the New Partnership for Africa’s Development (NEPAD); and economic and social development in Africa. The African Group is concerned with the situation regarding the development account and the decreasing percentage of its share of the overall budget. Turning to the programme planning for 2021, the Group commends the Committee for Programme Coordination for its work, including the coordination report of NEPAD. He reiterated the Group’s long-standing position that the United Nations budget must always be commensurate with given mandates. The programme budget is the most important agenda item in this session as it is the resource base upon which the United Nations fulfils its role and given mandates, especially the 2030 Agenda for Sustainable Development and the African Union’s Agenda 2063.
The representative of Singapore, speaking on behalf of the Association of Southeast Asian Nations (ASEAN), said the Organization’s mandates must be adequately funded. “We cannot continuously demand that the UN do more, while giving it less resources,” he said. There should not be arbitrary budget cuts or the deliberate withholding of resources, yet it is “a reality that we have been dealing with for years. If left unchecked, these artificial constraints are only setting up the UN for failure,” he added.
He stressed the importance of efficient, transparent and responsible use of the Organization’s resources and full accountability to Member States. Improvement is still needed in the presentation of the programme budget, following the Assembly’s specific directions. He said initial estimates to finance special political missions total over $706 million, more than 23 per cent of the proposed budget for 2021. The Assembly needs to seriously discuss funding arrangements for special political missions as other development priorities are reviewed, including the ongoing reform of the Organization’s peace and security architecture. “It is also extremely timely, given the recurring liquidity challenges in the regular budget,” he added.
The speaker for the European Union, said the planning and budgetary process should reflect the Organization’s strategic approach, with an overall level of resources that ensures effective delivery at Headquarters and in the field. The Secretariat’s senior team should be given the flexibility to manage for strong results while encouraging efficiencies at all levels. Yet results can only be expected if the Organization has adequate liquidity. Programme managers should be primarily compelled by reform implementation and mandate delivery, which requires sustainable and predictable funding, he said, urging all Member States to pay their contributions in full and on time.
The representative of Cuba, associating herself with the Group of 77, stressed again that the work of the Committee for Programme and Coordination, the Organization’s main body for programme planning, is more important than ever. The body had worked without interpretation and agreed on 20 of the 28 programmes in the plan. Its cross-cutting recommendations should be used to ensure the Assembly keeps providing guidance to programme managers. Cuba is concerned about the eight outstanding programmes for the Assembly’s consideration that have not received appropriate recommendations from the Committee for Programme and Coordination, she said, urging the delegations to work together to achieve the broadest possible consensus on them. Turning to the proposed programme budget, she said the new annual budget enters its second year with many disadvantages and its primary shortcoming is the absence of a programme plan that would allow Secretariat managers to prepare a proposed budget more in line with the intergovernmental process. The current format still “causes worrying difficulties” in comparing the content of a budget to another. Twenty-four percent, or $706.98 million, of the regular budget proposal is earmarked for special political missions. A new financing mechanism is needed for these missions, considering that nearly no mission in recent history was created by the Assembly. Development activities should not be sacrificed. Member States need to comply with their financial obligations to the Organization, in time, and in full and without conditions.
The representative of the United States noted that the World Food Programme (WFP) had won the Noble Peace Prize and the United States has played a central role in managing and financing that agency. Budget expenditures must focus on United Nations agencies that have successful track records. The United Nations is a force for good and it must have transparency and accountability. The negative economic impact of COVID-19 worldwide means cost efficiencies are even more important than ever and taxpayer dollars must be well spent. Each Member State must safeguard its contributions, she said. The issue of recosting in the budget must be addressed and overspending must be kept in check. The budget is $2.99 billion but with all add-ons it will be $3.15 billion, a 2.5 per cent increase over 2020. The United States continues to be the largest donor, contributing 22 per cent of the core budget and 25 per cent to the peacekeeping budget.
The delegate from China, associating himself with the Group of 77, said programme planning should always be owned and led by the Member States. The functions of the Committee for Programme and Coordination in programming planning should be strengthened, not weakened, as an annual budget is prepared on a trial basis. Finance is the foundation underpinning United Nations governance and China upholds the principles of budget reviews based on evidence and mandates and avoiding the "cutting traps”. The programme budget should not be cut without good reason. Development should be a priority with adequate and sustainable financial resources as the Secretariat strictly follows fiscal discipline through budgetary performance and internal controls. He noted the Committee for Programme and Coordination did not issue recommendations on eight programmes: disarmament, legal affairs, economic and social affairs, international drug control, crime and terrorism prevention, and criminal justice, gender equality and the empowerment of women, human rights, humanitarian assistance and management and support services. China supports the Assembly in continuing to review the eight programmes.
The representative of the Russian Federation said while there has been progress in the proposed programme budget’s presentation, he expects the Secretariat to improve its data presentation to link requested resources to existing mandates. He regretted that the regular budget has ceased to be adopted by consensus since 2019. Resources should be approved primarily for those programmes for which the Committee for Programme and Coordination has reached consensus. The Russian Federation assumes that resources for the eight programmes that were not agreed upon, at the end of the Committee for Programme and Coordination’s sixtieth session, will be made only after detailed discussions. He said the Secretary-General’s budget figure of $2.987 billion for the regular budget is inaccurate. The unjustified exclusion of expenditures for construction projects from this amount is concerning.
The representative of Japan said the Assembly can provide the Secretariat with appropriate guidance on the budget, noting that the Secretary-General has refined the format as the annual budget format enters its second year. The pandemic requires the United Nations to be nimble and responsive to external circumstances. The upcoming budget year will be a good test case to confirm how the annual budget cycle has worked. Japan will seek greater improvement and predictability in the budget process, while monitoring budgetary discipline, accountability and efficiency. Japan notes that the so-called budget “add-ons” mean the 2021 budget will likely exceed the 2020 budget amount. Japan will assess the proposal objectively. While praising the Department for General Assembly and Conference Management for streamlining its staff structure, he noted the continued trend of top-heavy staff structure and said he expects the Secretariat to keep reconfiguring and rejuvenating the Organization.
Responding to the delegations, Mr. GUTERRES thanked Member States for their extremely rich contributions and said the budget needs to be properly resourced so mandates can be fully met, and Member States need to pay their contributions in full and on time. He recognized the improvements resulting from the shift to the annual budget and said the Secretariat will take all Member States’ concerns into account as the budget process continues. COVID-19 has had a huge impact on the Organization’s budget. The Secretariat recognizes the central role of the Committee for Programme and Coordination and the importance of proper sequencing as the proposed programme plan and budget for 2021 are developed.
Regarding vacancy rates, the Secretariat is coping with less resources than expected and greater unpredictability as to how, and when, these resources will be received, he said. The Secretariat has minimum influence on this process, he emphasized. The Secretary-General said his attempts to increase reserves for greater budget flexibility were not approved. So the only way to avoid disruptions to the Organization’s operations and minimize the negative impact is through two mechanisms: maintaining an artificially high vacancy rate to reduce costs by having less posts, and cutting expenditures for elements, such as travel, that are less essential to carry out the Organization’s mandates.
Maintaining high vacancy rates and restricting non-essential travel has been done deliberately to avoid extreme measures, he said, adding: “If we don’t have a dog to hunt, we will use a cat”. He said he is trying to resist undermining the development and human rights portion of the budget. The Secretariat is totally committed to a results-based budget framework and an annual budget cycle provides the conditions to do so more effectively. There is now less recosting and the use of a ceiling-based budget, rather than a posts-based budget, increases the Secretariat’s flexibility to avoid recosting.
Mr. BACHAR BONG, Chair of the ACABQ, said he appreciated all the comments made by Member States. He said the Organization has been heavily impacted by COVID-19 and the full impact has not yet been assessed. Regarding the differences in vacancy rates in various divisions, he advised delegates to look more deeply into the reports to see how the United Nations has managed the vacancy rate in an attempt to balance the mandates among the different pillars of the Organization.