Without Faster Collection Rate of Unpaid Assessments, United Nations Liquidity Crisis Risks Worsening in 2024, Management Chief Warns Fifth Committee
Predictable, Timely Payment Crucial to Avert Spending Restrictions, Cash Deficit, Delegates Hear in Briefing on Key 2023 Financial Indicators
The United Nations senior management official told delegates in the Fifth Committee (Administrative and Budgetary) today that the deteriorating liquidity situation of the Organization’s regular budget could persist into 2024 if the collection rates of unpaid assessments from Member States does not pick up.
Catherine Pollard, Under-Secretary-General for Management Strategy, Policy and Compliance, said the lagging collection rate prompted the Secretary-General to impose temporary hiring restrictions this year as Secretariat officials borrowed from the Working Capital Fund in August and the Special Account in October. That leaves only about $130 million of surplus cash in the closed tribunals as a last liquidity buffer.
“If collections in the fourth quarter do not pick up significantly, we could end 2023 even with a cash deficit that would worsen liquidity pressure in 2024,” she said, reiterating that predictability in the timing and amount of collections is critical to manage the Organization’s cash outflows and plan its spending properly and safely without risk of payment default. Presenting the Organization’s key financial indicators for 2023, she provided details on three main categories — the regular budget, peacekeeping operations and the international tribunals.
In his first address to the Fifth Committee of the seventy-eighth session, Dennis Francis (Trinidad and Tobago), General Assembly President, echoed the need for predictable financing and added that the timely conclusion of the Fifth Committee’s main session by mid-December is essential to stabilize the UN’s liquidity situation, and give the Secretariat enough time to better plan for the new year. “This is precisely what allows predictable financing, business continuity and it enables us to live up to our commitments and uphold the credibility of the Organization,” he added. He urged Member States to pay their assessed contributions on time and in full. “Delays in the receipt of payments make it difficult to implement the mandates given by the Member States themselves and — as has been the case before — invariably result in a liquidity crisis, which could even deepen in the next year,” he warned.
On the issue of mandate delivery, Ms. Pollard said that while spending restrictions in the last few years may have averted a cash crisis and the disruption of operations, they hampered budget implementation and mandate delivery. Several activities and outputs were either postponed or cancelled. For example, in 2021, despite relaxing restrictions on hiring and spending in May, the Organization experienced the lowest rate of budget implementation since 2010. In 2022, no spending restrictions were needed and the implementation rate was nearly 99.3 per cent, yet that trend was reversed in 2023. The Organization’s financial health depends on Member States meeting their financial obligations in full and on time. “The more confident we can be about collections, the greater will be our ability to commit funds when we need them for programme delivery,” she added.
In other business, Chandramouli Ramanathan, United Nations Controller and Assistant Secretary-General for Programme Planning, Finance and Budget in the Department of Management Strategy, Policy and Compliance, introduced the Secretary-General’s report on the proposed 2024 programme budget for 11 special political missions under thematic cluster III: regional offices, offices in support of political processes and other missions. The total amount of $427.9 million for overall resources reflects a $4.8 million increase from 2023. Amjad Al-Kumaim, Vice-Chair of the Advisory Committee on Administrative and Budgetary Questions, introduced its corresponding report.
Several delegates expressed their support for the work of these missions, which need adequate resources to function effectively. Colombia’s delegate noted the important role of the United Nations Verification Mission in her country to the Government’s implementation of its Final Peace Agreement. “In this context, the political and financial support of the international community is more relevant than ever,” she stressed. Echoing that view, the representative of Haiti noted the critical role these missions play in resolving conflicts around the globe. It behoves “all of us to provide these missions with the necessary resources”, to enable them to carry out their mandates, he said, noting the $29.97 million proposed for the United Nations Integrated Office in Haiti (BINUH).
Turning to conditions of services and compensation for officials other than Secretariat officials, Osama Mahmoud Abdelkhalek Mahmoud (Egypt), Chair of the Fifth Committee, presented two notes from the Secretary-General regarding the conditions of service and compensation for members of the International Court of Justice and President and judges of the International Residual Mechanism for Criminal Tribunals.
The Committee then considered its final order of business as Annemarie Hou, Executive Director of the United Nations Office for Partnerships, introduced the Secretary-General’s report on the Office, describing it as “the global gateway to the United Nations”.
Statement by President of General Assembly
DENNIS FRANCIS (Trinidad and Tobago), President of the General Assembly, said that the work of the Fifth Committee (Administrative & Budgetary) is the “lifeblood” of the entire UN system. “Our ability to finance and design appropriate support structures to implement all UN mandates determines whether people will eat or go hungry; take shelter or go unprotected; attend school or spend yet another day without access to education,” he stressed. Consensus, “an anchor of our multilateral system”, enforces the principle of sovereign equality of all Member States, wherein the voices of each UN Member State — big and small, developed or developing — are heard. It is especially important that countries in special situations are properly engaged in the decision-making process on resource allocation, he added, underscoring strong commitment to prioritizing the interests of least developed countries, small island developing States and landlocked developing countries.
The timely conclusion of the Fifth Committee’s main session by mid-December will be essential for stabilizing the Organization’s liquidity situation, which will allow the Secretariat enough time to plan better for the new year, he said. “This is precisely what allows predictable financing, business continuity and it enables us to live up to our commitments and uphold the credibility of the Organization,” he added. Just last year, Member States made the annual budget cycle permanent — ushering in a new era of more responsive UN budgeting. He urged Member States to pay their assessed contributions on time and in full. “Delays in the receipt of payments make it difficult to implement the mandates given by the Member States themselves and — as has been the case before — invariably result in a liquidity crisis, which could even deepen in the next year,” he warned.
In addition to the regular budget, the Fifth Committee has much on its agenda — including the orderly drawdown and withdrawal of the United Nations Multidimensional Integrated Stabilization Mission in Mali (MINUSMA), he went on to say. A seamless transition in Mali is important for sustainable peace and security. The Fifth Committee will also be called on to assist the Assembly in making decisions on the provision of financing for peacebuilding; human rights mandates and assured funding for the United Nations Relief and Works Agency for Palestine Refugees in the Near East (UNRWA). On programme planning, the Committee for Programme and Coordination was not able to close 10 programmes, which have been brought to the Main Committees for consideration. At the request of the Fifth Committee, he said that he will continue to remind the Assembly’s Main Committees of their responsibility to review programmes and provide recommendations to the Fifth Committee in order to not delay the consideration of the budget.
Improving Financial Situation of United Nations
CATHERINE POLLARD, Under-Secretary-General for Management Strategy, Policy and Compliance, said the Secretary-General is engaging with Member States on the Organization’s liquidity situation, which unfortunately has deteriorated for regular budget operations since her last briefing. Turning first to the regular budget, she said monthly collections continue to fluctuate significantly each year, making it difficult to plan the budget’s implementation efficiently or effectively. This year, the Organization collected $18 million less than anticipated in the first quarter and collections continue to trail estimates throughout the year so far. The gap was $69 million at the end of the second quarter and increased to $216 million at the third quarter’s end. Though collections were lagging, the Secretariat was not concerned as the year had begun with a healthy cash balance. Yet by July, it was apparent the liquidity situation was declining more than anticipated, due to Member States’ continuing shift in payment patterns, the increase in post adjustments and the increase in hiring.
“Therefore, the Secretary-General decided to impose temporary hiring restrictions as a prudent measure to manage the evolving situation,” she said. The full amount in the Working Capital Fund was borrowed in August to ensure sufficient cash to meet payroll obligations. Collections in September did not materialize to the anticipated level and the Secretariat borrowed the full amount from the Special Account in October, leaving only about $130 million of surplus cash in the closed tribunals as a last liquidity buffer. “We now await the outcome of the fourth quarter. All through the year, we had been hopeful that we would collect 100 per cent of assessments in 2023; that seems improbable now, potentially reversing a healthy trend of the last two years,” she added. She repeated that predictability in the timing and amount of collections is critical to manage the Organization’s cash outflows and plan its spending properly and safely without risk of payment default.
She appealed to Member States who paid earlier this year to commit to their new positive payment patterns and to other Member States to commit to paying earlier and communicate their plans for payment. “The more confident we can be about collections, the greater will be our ability to commit funds when we need them for programme delivery,” she added. Citing her PowerPoint presentation on the UN’s financial situation, she said Chart 2 shows how stringent cash conservation measures over the last few years effectively increased liquidity. This ensured business continuity and reduced the risk of disruptions by exhausting reserves, including the surplus cash of closed peacekeeping missions. The regular budget cash deficit occurred later in the year due to these measures. The first borrowing occurred in May in 2018, July in 2019, September in 2020 and November in 2021. In 2022, the Secretariat borrowed from the Working Capital Fund in September, and this year it borrowed earlier in August.
While the maximum cash deficit had decreased each year since 2019, that trend is expected to reverse this year and all liquidity reserves may be exhausted with borrowing from closed tribunals, she said. Spending restrictions in the last few years may have averted a cash crisis and the disruption of operations, but they hampered budget implementation and mandate delivery, and several activities and outputs were either postponed or cancelled. In 2021, despite relaxing restrictions on hiring and spending in May, the Organization experienced the lowest rate of budget implementation since 2010. In 2022, no spending restrictions were necessary, and the implementation rate was nearly 99.3 per cent. The trend was reversed this year with hiring restrictions imposed in July. Lagging collections required some restrictions on non-post spending in late September and programme managers are working to mitigate the detrimental effect on programme and mandate delivery.
Chart 3 shows the cash resources available on 30 September and 31 December 2022 and on 30 September 2023. This year, only about 65 per cent of the year’s assessments have been collected, the lowest in the last five years, she said. The Organization ended 2022 with a healthy cash surplus after collecting more than 102 per cent of assessments, a positive trend expected to end this year. “If collections in the fourth quarter do not pick up significantly, we could end 2023 even with a cash deficit that would worsen liquidity pressure in 2024,” she said. Chart 4 summarizes the status of regular budget assessments on 30 September 2022 and 2023. In 2023, assessments were $55 million more than the 2022 level, yet by 30 September 2023, the Organization received $227 million less than the same period in 2022. Unpaid assessments increased from $1.2 billion at September’s end in 2022, to $1.3 billion as of 30 September 2023, “indicating a worrisome trend”.
Collections in the final quarter remain critical for the outcome of 2023. “We hope collections will pick up as large arrears deplete liquidity reserves,” she said. As seen in Chart 5, 137 Member States had paid their regular budget assessments in full by 30 September 2023 and Chart 6 lists the countries. Chart 7 lists the 56 Member States who had not paid their assessments to the regular budget in full as of 30 September 2023, six fewer than September last year. These unpaid assessments total nearly $1.35 billion. Chart 8 provides a comparative view of the largest outstanding assessments as of 30 September 2022 and 2023. According to the chart, the United States was responsible for the largest portion of unpaid regular budget assessments, owing $930 million as of 30 September 2023, compared with $915 million on 30 September 2022. China followed, owing $246 million at the end of September, compared to zero in 30 September 2022.
MS. POLLARD then turned to the Organization’s peacekeeping operations, whose financial periods runs from 1 July to 30 June rather than the calendar year. Chart 9 shows the status of peacekeeping assessments and collections by September, for the five most recent fiscal years. By September 2023, assessments issued for the 2023/24 fiscal year were $3.6 billion, with $3.1 billion being assessed in July for mandated periods. The lower assessments for the July to September 2023 period, compared to the same period in fiscal 2022/23, reflect the reduced requirements following MINUSMA’s termination. Total payments and credits in the last four fiscal years have ranged from $2.6 billion to $3.7 billion, resulting in unpaid contributions, as a percentage of assessments, from 63 per cent to 87 per cent. For the current fiscal year, this percentage rises to 92 per cent.
“Unless this trend is reversed by Member States making payments in full and on time, the current liquidity problems facing peacekeeping operations will continue and impact the reimbursement of troop and police-contribution countries,” she said. Chart 12 shows the unpaid peacekeeping assessments, which totalled $3.27 billion at the end of 30 September 2023, compared to $3.71 billion a year earlier. During her presentation, MS. POLLARD also detailed the financial situation of the international tribunals in Chart 18. As of 30 September 2023, the total contributions outstanding for the tribunals totalled $60 million.
In closing, MS. POLLARD said the Organization’s financial health depends on Member States’ meeting their financial obligations in full and on time. “The full and efficient implementation of our programme of work depends on the financial support of Member States, through the adoption of realistic budget levels and the provision of timely contributions to ensure a stable and predictable financial situation throughout the year,” she said, adding the Secretariat is committed to using the resources entrusted to it in a cost-effective and efficient manner. It will provide information to Member States with the utmost transparency.
CHANDRAMOULI RAMANATHAN, United Nations Controller and Assistant Secretary-General for Programme Planning, Finance and Budget in the Department of Management Strategy, Policy and Compliance, introducing the Secretary-General’s report on the proposed 2024 programme budget for 11 special political missions under thematic cluster III: regional offices, offices in support of political processes and other missions (document A/78/6(Section 3)/Addendum 4), said the total amount of $427.9 million for overall resources reflects a $4.8 million increase from 2023. This also reflects a net result on account of a $7.3 million increase on civilian personnel costs, $1.3 million decrease under military and police personnel costs, as well as a reduction of $1.2 million for operational costs. He also noted an increase in proposed staffing from 2,162 approved in 2023 to 2,195 proposed for 2024, which represents 25 posts and eight United Nations Volunteers positions across the United Nations Verification Mission in Colombia, United Nations Integrated Office in Haiti (BINUH), United Nations Mission to support the Hudaydah Agreement (UNMHA), United Nations Support Mission in Libya (UNSMIL) and United Nations Integrated Transition Assistance Mission in Sudan (UNITAMS).
He further pointed out to the Fifth Committee the recently submitted reports to the Advisory Committee on Administrative and Budgetary Questions (ACABQ), to be considered by the main session of the General Assembly, on revised estimates for the special missions in Colombia and Haiti, based on a Security Council-backed expansion of their mandates; and for the United Nations Office for West Africa and the Sahel (UNOWAS) following MINUSMA’s withdrawal and recent developments in the region. “Owing to the timing of these events, these additional resource requirements could not be included in the original proposal for 2024 introduced today,” he stated.
AMJAD AL-KUMAIM, Vice-Chair of the Advisory Committee on Administrative and Budgetary Questions, introduced its corresponding report. Regarding requirements for military and police personnel, he said the ACABQ recommends approval of the proposed resources, and approval of the civilian staffing proposals, with several exceptions. For UNSMIL, it recommends against the establishment of the two local-level positions, one Finance and Budget Assistant and one Human Resources Assistant, as well as the proposed reclassification of a P-4 Coordination Officer post to the P-5 level. For the United Nations Verification Mission in Colombia, it recommends against the establishment of the following positions: P-3 Liaison Officer, Victims’ Rights Officer (international UN Volunteer), Administrative Assistant (Field Service) and Human Resources Assistant (Field Service), and concurs with the proposed commitment authority of $3.7 million to meet that Mission’s requirements during the remainder of 2023 for the implementation of Security Council resolution 2694 (2023).
On UNMHA, he said the Advisory Committee recommends the establishment of a paramedic position as a National Professional Officer, instead of Field Service. Regarding the reassignment of one position of Civil Affairs Officer (P-3), it recommends that the position be reassigned as a National Professional Officer. Turning to BINUH, the Advisory Committee recommends against the establishment of the two international UN Volunteer positions, one Human Resources Officer and one Finance and Budget Officer. On UNITAMS, the Committee recommends against the proposed establishment of the Office of the Deputy Special Representative of the Secretary-General for Political Affairs and the related Assistant Secretary-General position at this stage. Furthermore, and taking UNITAMs’ current mandate extension into consideration, as well as the fluid situation in the Mission area, the Committee recommends that the Assembly authorize the Secretary-General to enter into commitments for a period of 12 months.
Under the operational costs cluster, he said that the Advisory Committee recommends reductions for specific special political missions, under consultants and consulting services, official travel, facilities and infrastructure, ground transportation, air operations, communications and information technology, medical and other supplies, services and equipment. The Advisory Committee also makes observations and recommendations on other matters as well, including equitable geographical representation and gender balance, backstopping, cost recovery, cost-sharing, organizational changes and cooperation with the Resident Coordinator system. Its recommendations would represent a reduction of $3.68 million to the proposed requirements, he said.
LEONOR ZALABATA TORRES (Colombia) said special political missions play a fundamental role in preventing and resolving conflicts and peacebuilding, and they need adequate and sufficient financing to fulfil their mandates. Exercising its sovereignty and will, Colombia asked the Security Council for the Organization’s support to implement the Final Peace Agreement. The Council expressed its support for the Verification Mission in Colombia, unanimously adopting resolution 2655 (2022), resolution 2673 (2023) and resolution 2694 (2023), which extended the time and scope of the mandate, respectively. The Colombian Government has an unwavering commitment to implement the Final Peace Agreement and recognizes the Verification Mission’s important role, as it coordinates with national and local authorities and civil society’s support. The Verification Mission’s support is necessary to meet ongoing challenges. Its effectiveness will depend largely on the allocation of all necessary human and financial resources, at the levels requested by the Secretary-General. “In this context, the political and financial support of the international community is more relevant than ever,” she stressed.
GUENSY BETOR (Haiti) particularly expressing his delegation’s gratitude to “women and mothers who have sacrificed themselves for the causes of peace throughout the world”, noted that, owing to the critical role of special political missions to resolving conflict globally, it behoves “all of us to provide these missions with the necessary resources”, to enable them to carry out their mandates. He said his delegation, while noting the $29.97 million proposed for BINUH, is also mindful of the Secretary-General’s request for $1.5 million for the Panel of Experts on Haiti, which represents a 10.2 per cent increase compared to 2023. Member States must be as concerned that the mandates of these missions are in consonance with the real needs of concerned States and satisfactory evaluation of their populations, as they are about providing the resources. Haiti, therefore, not only emphasizes the explanations of the Secretary-General and the recommendations of ACABQ; it looks forward to BINUH and the Panel “achieving concrete and visible results to the satisfaction of the Haitian people”.
BADRELDEEN BAKHIT MUSA BAKHIT (Sudan) noted the Secretary-General’s report concerning the proposed budget for UNITAMS for 2024. UNITAMS was created following a request from Sudan. Its mandate is renewed annually, with the current one ending in December, “having been exceptionally extended”. Noting developments in declaring Sudan’s President “persona non grata”, he said that the report includes an inaccurate description of the war in Sudan. It states that the evaluation functions of the Mission have not been undertaken. It is therefore critical for the Mission to review its work and achievements in the previous year, “compared with the resources spent on it”, including the proposed budget for 2024. On the Secretary-General’s proposal to appoint a special representative at the level of Assistant Secretary-General and the creation of an integrated office for him, he said Sudan’s delegation supports ACABQ’s recommendation against such an appointment.
Conditions of Service: Judges
OSAMA MAHMOUD ABDELKHALEK MAHMOUD (Egypt), Chair of the Fifth Committee, presented two notes from the Secretary-General regarding the conditions of service and compensation for members of the International Court of Justice and President and judges of the International Residual Mechanism for Criminal Tribunals. The first note is titled “Exchange of letters between the Chair of the Fifth Committee and the Under-Secretary-General for Legal Affairs, the United Nations Legal Counsel”(document A/C.5/78/2) and the second note is titled “Exchange of letters between the Chair of the Fifth Committee and the Chair of the Sixth Committee” (document A/C.5/78/3).
ANNEMARIE HOU, Executive Director of the United Nations Office for Partnerships, introducing the Secretary-General’s report on the Office (document A/78/382) and describing it as “the global gateway to the United Nations”, said in a bid to crystallize partnerships towards delivering the Sustainable Development Goals (SDGs), the UN Partnerships Office maximizes its expertise and networks through the Secretary-General's SDG Advocates, the SDG Strategy Hub and climate action mobilization, as well as the UN Democracy Fund and other Funds. She stated that for the SDG Pavilion and art installation, which was created as a beacon of hope, her Office convened over 20 events, with more than 3,000 people across several sectors. On trust funds managed by the Office, she stated that 33 projects totalling $7.5 million were funded by the UN Democracy Fund in 2022, while the UN Foundation provided grants of approximately $27.3 million to the United Nations Fund for International Partnerships for 23 projects implemented by the UN system. She expressed her Office’s commitment to spearhead high-impact collaboration initiatives that deliver on the Goals and foster inclusive and innovative spaces for all sectors of society.
RICHARD TUR DE LA CONCEPCIÓN (Cuba), speaking on behalf of the Group of 77 and China, commended the Partnerships Office for its work in advancing implementation of the 2030 Agenda. The year 2023 marks the halfway point for the achievement of the SDGs and “it is clear that we are far off track,” he said. “Against this challenging backdrop, we appreciate the initiatives undertaken by UNOP [UN Office for Partnerships] to advance the 2030 Agenda, through addressing many of our global challenges, among them post COVID‑19 pandemic recovery, other health issues and climate change,” he added. The annual meeting of the “Advocates” with the Secretary-General in 2022 raised issues of great importance for developing countries that need to be addressed holistically “if we truly want to achieve the SDGs by 2030”, namely, the reform of the global financial architecture, debt relief and a sophisticated data system to accurately measure global progress.
Noting that the United Nations Foundation has been acting as a fiscal agent for various UN entities, he said that in 2022 the Foundation disbursed $27.3 million through the UN Fund for International Partnerships for various UN initiatives. The Group may want to know more about it in later consultations, he added. Recalling SDG 17, which underlines the need to revitalize global partnerships, he urged the Partnerships Office to continue engaging with partners and explore opportunities for collaboration within the UN system in support of developing countries. The Office must strengthen partnerships with regional and subregional organizations. He further encouraged the Office to enhance transparency and explore innovative approaches that can catalyse resources and accelerate solutions to keep the promises of the SDGs, paying special attention to the needs of developing countries.
Responding to Cuba’s delegate, Ms. HOU thanked him for the Group’s support and said the Partnerships Office will work very carefully with Member States, civil society, academia and youth, particularly at the regional and country level. That is the Office’s next connection, especially now that Partnership officers are in each of the Resident Coordinator’s offices, she said. The aim is to transfer local, national, regional and global issues together.