General Assembly Session 49 meeting 85

The President

Members will recall that in an address to the General Assembly on 12 October 1994, at the conclusion of the general debate, the Secretary-General painted a disturbing picture of the financial situation of the Organization. He suggested it was up to the States Members of the United Nations to address this problem. Aside from the obvious fact that, in fulfilment of obligations under the Charter, all Members should pay their contributions in a timely manner, the Secretary-General indicated certain other points for consideration. Given the gravity of this matter affecting the very functioning of the Organization, I felt obliged to hold consultations with Member States as to the appropriate response and follow-up to the Secretary-General's statement. These consultations will facilitate a wide-ranging exchange of views on this important issue.

I would like to propose that the list of speakers in the debate on this item be closed this morning at 11 a.m.

Mr. Lamamra (Algeria)

I have the honour and privilege to speak on behalf of the Group of 77 and China on the important issue of the financial situation of the United Nations, which has been a matter of growing concern to us all. From time to time the Secretary-General has brought the current unsatisfactory situation to Members' attention. We therefore welcome the opportunity offered us in the General Assembly to express at the highest political level of the Organization the views shared by the Group of 77 and China on this matter.

The Group of 77 and China would like to recall that this is not the first time that such a situation has arisen. On an earlier occasion, we the Member States, in resolution 41/213, which the General Assembly adopted by consensus at its forty-first session, reaffirmed the requirement to fulfil our financial obligations promptly and in full. We also collectively recognized the detrimental effect of the withholding of assessed contributions on the functioning of the United Nations, and we recognized further that late payments adversely affect the Organization's financial stability. It is a sobering thought that despite our collective recognition of the problems we have failed to act upon them. Is it therefore any surprise that, despite the important financial reforms that were mandated in resolution 41/213, there has been no satisfactory solution to the problems. Nor is there likely to be one, so long as we do not collectively address the issues that we have fully recognized or implement the principles that we reaffirmed in resolution 41/213.

The Group of 77 and China are aware that in the post-cold-war period there are high expectations of the United Nations. Without a viable financial basis, however, none of those expectations will be realized, since the only source of the Organization's funds is we, the Member States. We have taken due note of the current status of contributions outstanding to the Organization, as well as its obligations. We find it self-evident that the financial problems of our Organization can be substantially addressed only when all Member States pay their contributions in full and on time. The Group of 77 and China recognize the need to extend sympathetic and particular understanding to those among us who are temporarily unable to meet their financial obligations as a consequence of genuine economic problems. In all other cases, we appeal to the membership to make every effort to pay all their dues unconditionally, in full and on time, so that the perennial problems of cash availability do not continue to circumscribe the United Nations abilities to act whenever we call upon it to do so.

The Group of 77 and China reiterate that our first and immediate objective should be to ensure a smooth flow of funds in the future. We would underline the fact that these are funds which have already been mandated by us after due consideration in the Main Committees. All of us have been afforded the opportunity to examine the Secretary-General's proposals. The Group of 77 and China believe that after the membership has approved the funding proposals there can be no other reasons for delaying payments. The Group of 77 and China believe that all our efforts to modernize and streamline the Organization in preparation for the next century will not meet with success so long as it continues to operate under a virtually permanent state of financial stress.

The Group of 77 and China note with concern the suggestion that there is somehow a link between the current cash-flow problems and the existing systems of assessment. We are unable to share this approach. There are no objective indicators that suggest this linkage. We wish to recall that the scales of assessment are the incremental result of our shared experience and common understanding. They have been arrived at collectively by the membership. They are based on guiding principles that we have all agreed with. How then can we claim that they are do not fully reflect consensus? So long as there is no mutual agreement to review or revise the consensus, it is our understanding that the existing scales have our collective sanction. We are therefore required, under the Charter, to meet our obligations.

The Group of 77 and China are ready to undertake a review of all aspects of the financial situation should this be the collective desire of all Member States, but we also wish to reiterate that any review that takes place must be on the basis of furthering our common understanding. We must build on what we have. The validity of this approach is even more relevant today. It will be our commitment to democratic action that alone will facilitate the process of reaching an agreement within an equitable, democratic and consensual framework. We believe, therefore, that any unilateral actions that could lead to undesirable results would not only deepen the current difficulties but would also serve to create reservations about the genuine commitment of all Member States to the fundamental principle of the democratization of international relations.

The Group of 77 and China would also like to reiterate that the principle of capacity to pay must remain at the very basis of determining the contributions that we are required to make to our Organization. We further reiterate that the principles for the apportioning of peace-keeping expenses, as set out in General Assembly resolution 3101 (XXVIII) and reaffirmed by consensus in subsequent resolutions dealing with financing of peace-keeping operations, remain valid today. We also recall that the need for separate procedures for apportioning peace-keeping expenses arose precisely out of an acknowledgment of the fact that such expenses constituted a very heavy burden on developing countries and should, therefore, be apportioned on the basis of procedures different from those used for the regular expenditures of the United Nations. This approach remains equally valid today; expenditure on peace-keeping is currently three times that of the regular expenditures.

The Group of 77 and China therefore hold that our discussions must be based on due recognition of agreed principles and present practices. Further, we must consider the pressing problems of alleviating the cash-flow crisis as our immediate task in our overall objective of addressing the financial situation. As Chairman of the Group of 77, I believe that to this end the proposal to establish an open-ended working group of the Fifth Committee with appropriate arrangements to ensure a high level of participation and leadership together with the sustained interest of all Member States to consider measures for restoring a viable financial basis for the Organization, with a view to arriving at the broadest possible agreement, could be considered by the Group of 77 and China in a positive and constructive manner.

Finally, the Group of 77 and China would like to highlight the fact at this late stage of the work of our regular session that, on an exceptional basis and at this very high level, we are responding to the appeal launched by the Secretary-General on this very important issue to deliver our message of full support to the Organization.

Mr. Graf zu Rantzau (Germany)

I have the honour to speak on behalf of the European Union, Austria and Hungary.

Only Member States can provide a sound financial basis for the Organization. Their assessed contributions form that financial basis. Under the United Nations Charter, Member States have a legally binding obligation to bear the expenses of the Organization as apportioned by the General Assembly; all Member States must pay their contributions promptly, in full and unconditionally. A historic review shows that the issue of the Organization's liabilities' exceeding its available cash is not a new phenomenon. It also shows that, in nearly 20 years, the Member States have not been able to resolve this issue.

On 12 October 1994, the Secretary-General took the initiative of addressing the General Assembly in plenary meeting on the longstanding difficult situation and put forward a broad range of possible ways of ensuring a viable financial basis for the Organization. The situation today is much worse, both for peace-keeping budgets and for the regular budget, than in previous years. In July 1994, the Secretary-General felt compelled to warn the members of the Security Council of the precarious state of peace-keeping finances.

The overall financial situation will deteriorate further in the coming year unless decisive and concrete measures are taken to address the situation. The member States of the European Union, Austria and Hungary meet their obligations for the regular budget and for peace-keeping operations promptly, in full and without conditions. Our contributions to the regular budget, taken together, already amount to 32.65 per cent and, for peace-keeping operations, to 34.5 per cent. Our Governments currently contribute 23 per cent of all military personnel involved in peace-keeping operations of the United Nations.

The main financial problem remains the question of arrears, which has detrimental consequences for the reserves of the Organization. As the Secretary-General has stated, the Organization has only extremely limited cash reserves; the working capital fund is virtually depleted. There is only a little petty cash left in the peace-keeping reserve fund. If all Member States paid their assessments in full and on time, the Secretary-General could replenish the reserves and pay the money the Organization owes to Member States for their troop and equipment contributions to peace-keeping missions. The arrears in contributions to peace-keeping operations and the resulting cash-flow problem have created a situation in which the Organization owes more than $1 billion to Member States for reimbursement for troops and equipment.

This situation puts an unfair burden on troop-contributing countries, particularly those that have a record of prompt, full and unconditional payment. In effect, as the Secretary-General pointed out, the Member States that wait for payment from the United Nations are financing the late payment of other Member States. As a consequence of this development, the readiness of Member States to provide troops is decreasing. We wish to emphasize that without troops or money there can be no peace-keeping operations.

This shows that the issue raised by the Secretary-General is not only a financial problem but has serious political dimensions. The capability of the Organization to fulfil its mandates is at stake. We all have high expectations for the United Nations, but the Organization can work efficiently only if its Members are willing to provide the necessary support. On the eve of its fiftieth anniversary, the United Nations is faced with the major challenge of an unprecedented increase in its tasks while at the same time it is experiencing the most difficult financial situation since its founding.

For the time being, Article 19 of the Charter is the only sanction for compelling Member States to pay. We believe that the time has come to apply it more rigorously. Furthermore, we have to consider other instruments that might induce Member States to fulfil their obligations under the Charter to pay in time, in full and without conditions. This must include discussions on incentives for timely payment as well as sanctions on arrears, inter alia the possibility of charging interest on arrears. In the context of incentives, we note the Secretary-General's proposal to issue peace-keeping redeemable certificates. This, however, will not be a solution in itself.

We fully agree with the Secretary-General that the slow process for approving peace-keeping budgets and appropriations must be changed. Months pass between the date on which the Security Council approves a peace-keeping operation and the date when assessments are sent out. Proposals of the Secretary-General to speed up the process and enhance its credibility are now being discussed in the Fifth Committee. These proposals touch at the very core of peace-keeping budgeting and financing. The European Union, Austria and Hungary pledge to work constructively with a view to reaching solutions both acceptable to Member States and workable for the Secretary-General. We trust that all Member States will join in these efforts to reach solutions.

I should like to turn to the method of assessment. This is closely linked to the issues of arrears and the improvement of the budgetary process. A scale of assessment which is simple, transparent and fair and is perceived to be so by all Member States could contribute to an improvement of payment patterns and thus alleviate the severe cash-flow problems of the Organization.

We recall the statement of the European Union in the general debate:

"Members' contributions must be brought more in line with their actual capacity to pay. The aim of a comprehensive financial reform must be to establish a scale that is transparent and reliable, reflects Members' financial situations, is automatically adapted to changed national circumstances, and gives consideration to the needs of countries with low per capita incomes. But it is crucial that all Members be willing to meet their membership obligations. We cannot have a situation in which the United Nations has difficulty carrying out its responsibilities because individual Members feel exempted from their duties." (Official Records of the General Assembly, Forty-ninth Session, Plenary Meetings, 6th meeting, p. 17)

During this session, the General Assembly will be deciding on recommendations of the Fifth Committee on the scale of assessments for the coming three years. For the future, however, we will have to find a more up-to-date and fair basis for regular and peace-keeping assessments alike. We are looking forward to the outcome of the work of the ad hoc working group on capacity to pay, which was established by General Assembly resolution 49/19.

For peace-keeping assessments, the special responsibility of the permanent members of the Security Council must be taken into account. The financial obligations arising from this special responsibility must be applied on an equitable basis.

All the issues addressed by the Secretary-General have to be taken up without delay by the General Assembly. We stand ready to consider these issues at the highest political level, as befits the political importance of the question under discussion. For the European Union, Austria and Hungary it is imperative that this process involve the membership as a whole. Because of the political and financial nature of these issues both ambassadors and experts of the Fifth Committee should be enabled to play a full and active part in this process. Its result should be based on the broadest possible agreement in accordance with the constant practice of the General Assembly in budgetary matters. Therefore, the European Union, Austria and Hungary welcome the consensus which has emerged that the General Assembly shall pursue these issues in a high level open-ended working group under your chairmanship, Mr. President. In our view, the working group should consider measures, including those contained in the Secretary-General's report on the work of the Organization and his statement before the General Assembly of 12 October 1994, to achieve the full and timely payment of assessed contributions and to improve the existing budgetary process and method of assessment with a view to ensuring a viable financial basis for the Organization. The working group should report on the result of its work to the plenary through the Fifth Committee before the end of the forty-ninth session.

Only by working together will we be able to provide the Organization on the occasion of its fiftieth anniversary with a sound and viable basis for its activities into the next century.

Mr. Thanarajasingam (Malaysia)

A problem occurred in a Python script. Here is the sequence of function calls leading up to the error, in the order they occurred.

<type 'exceptions.UnicodeEncodeError'>: 'ascii' codec can't encode character u'\xe0' in position 6253: ordinal not in range(128)
      args = ('ascii', u'\n\t<p id="pg004-bk01-pa01">Mr. President, may I b...n the Charter for the benefit of all mankind.</p>', 6253, 6254, 'ordinal not in range(128)')
      encoding = 'ascii'
      end = 6254
      message = ''
      object = u'\n\t<p id="pg004-bk01-pa01">Mr. President, may I b...n the Charter for the benefit of all mankind.</p>'
      reason = 'ordinal not in range(128)'
      start = 6253