Seventy-seventh Session,
8th Meeting (AM)
GA/AB/4396

Fifth Committee Approves Draft Authorizing $3.52 Million to Mitigate Global Food Insecurity, Welcoming Secretary-General’s Efforts for Comprehensive Response

Also Discussing Organization’s Financial Situation, Speakers Voice Concern over Impact of Late Payments on Mandate Delivery, Reforms

Delegates in the Fifth Committee (Administrative and Budgetary) today sent the General Assembly a draft resolution that would deliver $3.52 million to the Secretary‑General to ease global food insecurity, while also urging each other to make timely payments to ease the Organization’s unpredictable financial outlook.

The Committee approved the resolution ‑ Revised estimates on United Nations activities to mitigate global food insecurity and its humanitarian impact ‑ without a vote.  If adopted by the Assembly, it would authorize the Secretary‑General to commit no more than $3.52 million.  At its 10 October meeting, Fifth Committee delegates discussed their worries with the humanitarian consequences of rising levels of food insecurity around the world and welcomed the Secretary‑General’s efforts to coordinate a comprehensive global response.

Turning to the United Nations financial situation, many delegates were troubled by how some Member States’ tardy payments of assessed contributions are placing the Organization’s financial health in a precarious position.  Pakistan’s representative, speaking on behalf of the “Group of 77” developing countries and China, said financial unpredictability has led to extraordinary measures which negatively impact mandate delivery.  Budget management must be driven by programme delivery and not by available cash on hand, he emphasized, concerned that more than three‑quarters of the current regular budget arrears are attributable to a single Member State.

Singapore’s delegate, speaking on behalf of the Association of Southeast Asian Nations (ASEAN), said the Secretariat’s briefings clearly indicate that the Organization’s financial challenges stem from the late payment of assessed contributions.  She also was disappointed that despite the $100 million increase in the Working Capital Fund that the Committee approved in June, the Secretariat still had to borrow $150 million from the Fund because some payments to the regular budget remained outstanding.  “Failure to fulfil our financial obligations and to do so on time affects mandate delivery and undermines the effectiveness of the organization,” she said.

Echoing that concern, Uganda’s representative, speaking on behalf of the African Group, said that while the Fund’s increase has eased the Organization’s financial situation, the Secretariat has already borrowed the full amount to meet its payroll obligations.  Unpredictability in the pattern of collections and the late payment of assessed contributions hamper full budget implementation, mandate delivery and the Organization’s overall functioning, she stressed.

Adding to that point, the speaker for China said:  “A sound financial situation is not only the material basis for the UN to perform its duties and functions, but also an important guarantee for the implementation of UN reform initiatives”.  Noting that one Member State is responsible for about 80 per cent of the total regular budget arrears of $1.17 billion, he said if Member States, especially the major contributors, fail to pay their assessment in a timely manner, no measure can solve the liquidity problem.

The representative of the United States ‑ the largest contributor to the regular budget ‑ said her country’s significant reduction of its regular budget arrears ‑ from $639 million in 2020 to $323 million in 2022 ‑ was reflected in the Organization’s improved liquidity situation.  The United States anticipates reducing its arrears by an additional $100 million this year, she said, noting that it continues to pay its regular budget assessment in a regular manner in the first quarter of its fiscal year and will do so for this year.

Several delegates urged countries with financial challenges to use Organization mechanisms that let affected Member States submit multi‑year payment plans. The representative of Zambia said this step demonstrates commitment and support to the mandate of the United Nations. “I also humbly appeal for continuation of the current payment methodology and level of assessed contributions, given the slow pace at which the global as well as the domestic economies are growing,” she said.

Catherine Pollard, Under‑Secretary‑General for Management Strategy, Policy and Compliance, updated the Committee on the status of financial indicators and payments since her 13 October briefing on the United Nations financial situation. She also introduced the Secretary‑General’s report on the topic.

In other business, Chandramouli Ramanathan, Assistant Secretary‑General for Programme Planning, Finance and Budget in the Department of Management Strategy, Policy and Compliance, and Controller of the United Nations, introduced the Secretary‑General’s twentieth annual progress report on the capital master plan’s implementation.  He said the project’s estimated final cost remains unchanged at $2.15 billion.  Patrick Chuasoto, Vice‑Chair of the Advisory Committee on Administrative and Budgetary Questions (ACABQ), introduced the Advisory Committee’s eponymous report.

Pakistan’s delegate noted that all construction work and related administrative closeout activities have been completed, except for liabilities related to the remaining arbitration case.  The Group remains concerned that once again, the plan’s financial result will be delayed due to the ongoing arbitration case, he said.

Also speaking today were representatives of Oman, Morocco, United Kingdom, Japan, Guyana, Namibia, Kuwait and Cuba.

The Fifth Committee will reconvene at 3 p.m. on Tuesday, 25 October, to consider a draft resolution regarding revised estimates under the 2022 programme budget for the United Nations Assistance Mission in Afghanistan (UNAMA).

 

 

2022 Revised Estimates:  United Nations Assistance Mission in Afghanistan

PHILIPPE KRIDELKA (Belgium), Chair of the Fifth Committee, said he was concerned that the Committee had not been able to reach an agreement on revised spending estimates for the United Nations Assistance Mission in Afghanistan (UNAMA), which was discussed at their 3 October meeting.  The issue needs to be decided by the end of the month so the Mission can operate through November and December.  He said it was the Committee’s collective responsibility to ensure the issue is completed.  He encouraged the delegates to engage constructively and reach an agreement, if not today, then at least by Monday 24 October so the matter can be processed in a timely manner.  He hoped the delegates would come to the 25 October formal meeting with a consensual outcome as this would build momentum.

United Nations Activities to Mitigate Global Food Insecurity

The Committee took up and approved a draft resolution titled “Revised estimates on United Nations activities to mitigate global food insecurity and its humanitarian impact (document A/C.5/77/L.3).

By the terms of the text, the Assembly would approve additional resources of $3.52 million under the programme budget for 2022, under section 12, Trade and development ($848,600), section 27, Humanitarian assistance ($2.48 million) and section 36, Staff assessment ($194,300 dollars), which would be offset by an increase of $194,300 under income section 1, Income from staff assessment.  The Assembly would also authorize the Secretary-General to make commitments of not more than $3.52 million and note that that amount would be reported in the financial performance report for 2022.

Capital Management Plan

CHANDRAMOULI RAMANATHAN, Assistant Secretary-General for Programme Planning, Finance and Budget in the Department of Management Strategy, Policy and Compliance, and Controller of the United Nations, introduced the Secretary-General’s twentieth annual progress report on the implementation of the capital master plan (document A/77/325), submitted in accordance with General Assembly resolution 57/292.  He said the only remaining action is the finalization of one litigation case as all other administrative tasks to close out the contracts were completed by March 2018.  The first phase of the case concluded in June 2020 and a hearing on the merits of the second phase of the case is currently scheduled to start on 24 October 2022.

The estimated final cost of the project remains unchanged at $2.15 billion, he continued.  Legal expenses for the arbitration of cases are being funded from the liquidation of commitments.  The two remaining Board of Auditors’ recommendations are under implementation pending the outcome of the ongoing arbitration case and completion of the project to bring the United Nations Headquarters facilities to the 2010 Americans with Disabilities Act Standards for Accessible Design by 2023, he noted.

PATRICK CHUASOTO, Vice-Chair of the Advisory Committee on Administrative and Budgetary Questions (ACABQ), introduced the Advisory Committee’s eponymous report (document A/77/526).  Arbitration proceedings, he noted, have been divided into three separate and consecutive phases.  Regarding the first phase, the arbitral tribunal issued a final decision in June 2020 which resulted in a net payment by the United Nations totalling $3.61 million.  For the second phase, a hearing on the merits has been rescheduled for October 2022 and no arbitration decisions have been issued during the current reporting period.  The General Assembly should request more detailed information on the second and third phases of the proceedings at the time of its consideration of the present report and in the next progress report in 2023, he said.  The Assembly should further request the Secretary-General to continue to limit the liabilities on and protect the rights of the United Nations in capital projects.  Lessons learned should be shared and applied to other construction projects.

In noting that accumulated legal expenses for arbitration cases to date total $8.01 million and that the Office of Legal Affairs estimates an additional amount of $750,000 for July to December 2022, he urged the Secretary-General to limit the financial liability of the Organization to the fullest extent possible.  An update to on the cash available and the financial status must be provided to the Assembly at the time of its consideration of the present report.  The next progress report should also include information on the potential financial implications, if any, of the remaining phases of the proceedings, he added.  Turning to the two remaining recommendations of the Board of Auditors, he requested updated information on the progress of the accessibility works in the next progress report.

JIBRAN KHAN DURRANI (Pakistan), speaking on behalf of the “Group of 77” developing countries and China, noted that currently all construction work and related administrative closeout activities have been completed, except for the liabilities related to the remaining arbitration case.  The Group recalls that the approved funding for the capital master plan projects amounted to $2.15 billion and that the final consolidated requirement remained at the same level of funding.  The Group remains concerned that once again, the financial result of the plan will be delayed due to the ongoing arbitration case.  That risks escalating the estimated cumulative expenditure for legal expenses, he added.  The Group commends efforts being made by the Office of Legal Affairs in actively defending the interest of the Organization in arbitration proceedings.  However, the Group concurs with the recommendation by the Advisory Committee that the Secretary‑General should assess how to mitigate the cost of ongoing proceedings and to limit the financial liability of the Organization.

With respect to the status of implementation of the new energy management tool, the Group notes that the project has been delayed to the third quarter due to the liquidity crisis.  In addition, the Secretary‑General has reported that upon further review, it proved to be technically difficult and significantly more costly to install a new energy management tool without first completing the other required upgrades, including the information technology security upgrades to the alert system.  The Group takes note of the status of the implementation of the Board of Auditors’ recommendation provided in the twentieth annual progress report, and observes that seven of the nine pending recommendations have been implemented and closed by the Board.  He noted the remaining two recommendations are pending the outcome of the ongoing arbitration case and the completion of the project to bring United Nations facilities to the standards for accessible design.

Improving the Financial Situation of the United Nations

Catherine Pollard, Under-Secretary-General for Management Strategy, Policy and Compliance, introduced the Secretary-General’s report “Financial situation of the United Nations” (document A/77/530), which was issued on 17 October and provides a review of the financial situation of the United Nations as of 30 September.  The report also updates the information presented in the report issued in May during the seventy-sixth session (document A/76/435/Add.1).

The report is focused primarily on four financial indicators relating to the operations of the regular budget, the peacekeeping operations and the international tribunals.  They include assessments issued, unpaid assessments, available cash resources and the Organization’s outstanding payments to troop‑ and police‑contributing Member States for peacekeeping operations.

Updating the Committee on the status of the financial indicators since her briefing on 13 October on the United Nations financial situation, she said for the regular budget, the total number of Member States having paid in full has increased to 134, with payments from Croatia and the Federated States of Micronesia.  For peacekeeping operations, Bhutan has paid all peacekeeping assessments, bringing the total number of Member States having paid in full for peacekeeping to 48.  For the tribunals, Guyana and Zambia made payments, meaning 110 Member States have paid their assessments in full in this category.

Bhutan and Zambia are now fully paid for all categories with their recent payments, bringing the total in the report to 40 Member States.  In addition, Mali made payments for the regular budget, while Belarus, Brunei Darussalam, Cyprus, Guyana, Mali, the Federated States of Micronesia, Panama, Paraguay, the Philippines and Portugal made payments for peacekeeping operations.  On behalf of the Secretary-General, she thanked all Member States for their positive action since last week’s briefing.

Mr. DURRANI (Pakistan), speaking on behalf of the Group of 77 and China, said that unpredictability has resulted in extraordinary measures which negatively affect mandate delivery.  Budget management must be driven by programme delivery and not by available cash on hand, he emphasized before expressing concern that more than three-quarters of the current regular budget arrears is attributable to a single Member State.  That Member State, he continued, benefits from an artificially imposed ceiling on its contributions which was premised on the unfulfilled clearance of prior arrears.  He urged the Member State to fulfil its financial and legal obligations without delay.  National fiscal cycles should not be used as an excuse for late payments, he stressed.

Turning to peacekeeping, he noted that the cross-borrowing mechanism and inclusion of the full estimated budget for the entire peacekeeping fiscal year has facilitated the timelier payment of liabilities to troop‑ and police‑contributing countries.  As the Organization’s ability to settle its liabilities is contingent on timely payments, he called on Member States to settle their arrears and pay their assessments in full, on time and without conditions.  Member States must honour their legal and financial obligations and should take all necessary actions to facilitate the payment of their assessed contributions, he emphasized.  Even though developing countries continue to face major economic challenges, they take their United Nations contributions seriously, he pointed out.

FELECIA CHUA (Singapore), speaking on behalf of the Association of Southeast Asian Nations (ASEAN) and associating herself with the “Group of 77” developing countries and China, said that the Secretariat’s briefings clearly indicate that the Organization’s financial challenges stem from the late payment of assessed contributions.  All Member States must pay their assessments in full, on time and without conditions, she said, commending those States which, despite facing genuine difficulties, endeavour to meet their obligations.  She expressed disappointment that despite an $100 million increase in the Working Capital Fund, approved by the Committee in June, the Secretariat still had to borrow $150 million from the Fund because some payments to the regular budget remained outstanding.  “Failure to fulfil our financial obligations and to do so on time affects mandate delivery and undermines the effectiveness of the organization,” she said.

Turning to peacekeeping operations, she noted that the quarterly aggregate cash balance of active missions remains on a downward trend.  Once again, the root cause can only be addressed if Member States fulfil their financial obligations on time.  In the last quarter of this year, the number of Member States which have paid in full for the regular budget stands at 131, she continued.  By the end of the quarter, that number will hopefully surpass the 153 countries that did so by the end of 2021.  “At a time when multilateralism is sorely needed to address global challenges, let us redouble efforts to ensure that the United Nations has predictable and adequate resources to carry out the work that we ourselves have charted for the organization,” she said.

MEDARD AINOMUHISHA (Uganda), speaking on behalf of the African Group and aligning herself with the Group of 77 and China, reiterated that the Organization’s financial health relies on Member States meeting their financial obligations in full, on time and without conditions.  Echoing Ms. Pollard, she emphasized that the full and effective implementation of programmes depends on a stable and predictable financial situation throughout the year.  In recognizing the Member States which have paid or reduced their outstanding assessed contributions despite economic challenges, she noted that the large collection towards the end of September exceeded estimates by $62 million.

While the Working Capital Fund’s increase has provided positive relief to the Organization’s financial situation, she expressed concern that the Secretariat has already borrowed the full amount to meet its payroll obligations.  Unpredictability in the pattern of collections and the late payment of assessed contributions hamper full budget implementation, mandate delivery and the Organization’s overall functioning, she stressed.  Turning to the Assembly’s decision to continue cash pooling for active peacekeeping missions for five years, she noted that this enabled the payment of contingent-owned equipment, troops and formed police units for all missions up to 30 June 2022 with the exception of African Union‑United Nations Hybrid Operation in Darfur (UNAMID).  As most developing countries are already facing financial difficulties, the Secretary-General should meet his obligations to Member States on providing equipment, troops and formed personnel units as expeditiously as possible, she urged.

JI HAOJUN (China) said his Government has become the second-largest contributor to the United Nations regular budget and its scale of assessment to the United Nations has been increasing in recent years.  Despite facing the tasks of developing its economy, China has overcome difficulties and paid all its regular budget assessment to support the Organization’s work.  Finance is the foundation of United Nations governance.  “A sound financial situation is not only the material basis for the UN to perform its duties and functions, but also an important guarantee for the implementation of UN reform initiatives,” he said.  The Organization needs all Member States to shoulder responsibilities and fulfil their financial obligations.  The current financial situation remains worrying, he said, noting the total unpaid regular budget assessments are $1.17 billion, with one Member State responsible for about 80 per cent of the total arrears.  He noted the Committee’s approval of temporary measures, during its second resumed session, to improve the Organization’s liquidity situation.  While some Member States and the Secretariat wish to increase the predictability of payments, this is not the root cause of the problem.  If Member States, especially the major contributors, fail to pay their assessment in a timely manner, no measure can solve the liquidity problem.  At the same time, the secretariat should promote a culture of conservation, and avoid waste and expediting budget implementation only at the end of the year.  It needs to strengthen budget performance management, improve internal control and adhere to financial discipline to ensure that every penny of the taxpayers of Member States is put to good use.

ISMAIL MARHOUN MOHAMMED AL ABRI (Oman), associating himself with the Group of 77 and China, commended States that have paid their assessed contributions for the fiscal year and called on other States who had not yet done so to meet their financial obligations as soon as possible.  He spotlighted the “very unfortunate financial situation that many countries are suffering from”, in particular developing countries and the least developed countries.  “This situation requires us to show understanding in order to review the scale of assessment and demonstrate realism,” he added, reiterating Oman’s support for proposals to streamline expenditures in order to allow the United Nations to better implement programmes and mandates.

HIND JERBOUI (Morocco) said that an improved financial situation is essential to achieving the Organization’s strategic goals especially in relation to peace, security, development and human rights.  Effective programme implementation depends on the United Nations fiscal capacity, ability to realistically adopt budgetary estimates and the timely payment of assessed contributions.  Member States must increase the Organization’s liquidity so that it does not resort to alternative solutions such as the use of funds from closed peacekeeping operations, she emphasized.  In noting that her country is always one of the first to pay its assessed contributions, she encouraged all States to fulfil their obligations.  She then spotlighted her country’s initiative with Denmark on predictable payments and invited all Member States to join and ensure financial stability and predictability for the Organization.

JAMES STAPLES (United Kingdom) called once again on all Member States to live up to their financial obligations and pay their assessed contributions in full and on time.  He noted that the United Kingdom has transitioned its payment pattern to align with the Organization’s financial calendar and encouraged other Member States to do likewise.  He encouraged the Secretariat to prioritize and use its resources effectively, and where necessary with agility, including in response to new mandates and emerging priorities and challenges.  “It is crucial that every dollar that the United Nations spends has the greatest impact on the ground,” he added.

ABO AI (Japan) said that in the wake of the measures agreed by the Committee in June, the United Nations will hopefully focus more on programme delivery and achieving concrete results rather than on liquidity management.  Japan has faithfully fulfilled its obligations to the Organization, and will continue to do so, she said, emphasizing however that Member States’ resources are finite.  “It is therefore the shared responsibility of the Member States and the Secretariat to continuously seek to improve the effective and efficient use of resources so that we can maintain a high level of accountability to our taxpayers.”  In this regard, Japan appreciates the Secretariat’s ongoing efforts to provide information on the Organization’s financial situation, she added.

JÉVANAH RAYDON LA ROSE (Guyana), aligning herself with the Group of 77 and China, said her country remains committed to paying its assessed contributions in full and on time.  She urged Member States experiencing difficulties to inform the United Nations of their payment plans as the timely payment of assessed contributions is critical to ensuring the Organization’s effective financial management.  In noting that the financial outlook is brighter than in recent years, she also expressed regret that the unpredictability in collections has resulted in borrowing from the Working Capital Fund in September for the Organization to meet its payroll obligations.

NEVILLE MELVIN GERTZE (Namibia), associating himself with the Group of 77 and the African Group, said that all Member States are feeling the financial pinch as they overcome the challenges posed by the COVID‑19 pandemic.  Those Member States that find it hard to pay in full and on time should make use of provisions which would allow them to submit multi-year payment plans, thus enabling the Organization to improve its budget forecast.  Stressing the need for Member States to pay their contributions in full and on time, he said that with timely payments, the United Nations can focus on programme delivery rather than liquidity control.  Namibia is grateful for the Secretariat’s placing emphasis on transparency, and its commitment to utilize the resources entrusted to it in a cost-effective and efficient manner, he added.

JASSEM AL KANDARI (Kuwait), aligning himself with the Group of 77 and China, said Member States need to ensure the financial stability of the United Nations, so it can fulfil its mandates around the world.  The impact of the pandemic has led to a recession that is significant and the Organization’s multilateral action is more important than ever to help countries recover in a sustainable way.  Noting that the Secretary-General’s report explains the financial difficulties the United Nations faced in 2020 and 2021, he said his delegation appreciates the Secretariat’s constant efforts to improve the Organization’s financial situation, stressing that the timely payments of Member States are essential to fulfil its mandates in peacekeeping, security, development and human rights.  He expressed concern that the unfortunate financial situation could harm the implementation of mandates.  Kuwait has always honoured its obligations and was one of the first countries to be inscribed on the honour roll for those who pay on time and in full, he said, calling on all Member States to do the same and fulfil their financial obligations.

REGINA CHAMA BOMA (Zambia), associating herself with the Group of 77 and China, and the African Group, said the world is emerging from the COVID‑19 pandemic and is facing instability and other challenges that exacerbate socioeconomic problems.  “Zambia has been negatively affected by the COVID‑19 pandemic, which slowed down economic growth,” she added.  But despite these challenges, Zambia attaches great importance to the need for Member States to meet their respective obligations for assessed contributions.  “I also humbly appeal for continuation of the current payment methodology and level of assessed contributions, given the slow pace at which the global as well as the domestic economies are growing,” she said.  She noted with appreciation the mechanisms that allow affected Member States to submit their multi‑year payment plans, as this demonstrates their commitment and support to the mandate of the United Nations.

ELIZABETH STETTER (United States) said her country’s significant reduction of its regular budget arrears ‑ from $639 million in 2020 to $323 million in 2022 ‑ was reflected in the improved liquidity of the situation of the Organization.  The United States anticipates reducing its arrears by an additional $100 million this year, she said, noting that it continues to pay its regular budget assessment in a regular manner in the first quarter of its fiscal year and will do so for this year.  She then referenced her country’s spearheading of an Assembly resolution to increase the Working Capital Fund by $100 million.  While the United States regards its contributions with the utmost seriousness as the largest contributor, she expressed concern over other large contributors who have significantly changed the timing and pattern of their payment.  These Member States should communicate clearly and in advance with the Secretariat on the timing of their planned payment, she urged.

RICHARD TUR DE LA CONCEPCIÓN (Cuba), associating himself with the Group of 77 and China, said his country is encouraged by the fact that the United Nations is progressively overcoming its liquidity crisis.  However, to date, arrears in the regular budget amount to $1.1 billion.  “This is an unacceptable figure,” he stressed, adding that once again the host country of the Organization continues to “owe an exorbitant amount of money”.  The United States owes $900 million just to the regular budget, which represents 78 per cent of arrears.  “This can only be understood as a deliberate withholding of funds to exercise pressure on this Organization,” he said.  To date, Cuba has fully fulfilled its payment obligations, despite the harm caused by the economic, commercial and financial blockade imposed on it by the United States for the past 60 years.  Cuba continues to confront serious challenges to honour its dues to the United Nations.  He also rejected the freezing of Venezuela’s assets by the United States.  As a result of these hostile actions, Venezuela has lost its voting rights, despite its readiness to settle what it owes to the Organization.

Ms. POLLARD thanked delegates for their continued engagement on the Organization’s financial situation, which is important for its effective functioning.  She assured all Member States that the Secretariat understands their financial contributions are public monies.  The Secretariat spends the funds prudently to implement the Organization’s mandates in compliance with all its regulations and rules, including the Financial Regulations and Rules.  The Organization’s spending is predicated on payments being made regularly throughout the year, she stressed.  The Secretariat will take all concerns seriously and looks forward to continued engagement on this issue.

For information media. Not an official record.