'Unpaid assessments down'. (GA 56 - Fifth Committee (Administrative and Budgetary)).

Three economic indicators determine the financial health of the United Nations: the level of unpaid assessments of Member States; the level of cash balances; and debt owed by the United Nations to Member States that provided peacekeepers. In his presentation to the Fifth Committee, Under-Secretary-General for Management Joseph E. Connor summed it up: "Unpaid assessments are down, cash is up, and debt to Member States has been drastically reduced."

Ambassador Nana Effah-Apenteng of Ghana, Chairman of the Fifth Committee, also said that "the optimism derived from the projected payment of $4.7 billion for 2001, far in excess of any other year, enabled financial flexibility to be restored in the UN budget". He told the Chronicle that the decision of the United States to pay its arrears was significant, and that the challenge was to stretch this picture of optimism into 2002. "It is the hope that for fiscal year 2002 Member States would fulfil their Charter obligations by paying their contributions in full, on time and without conditions", the Ambassador said.

In this session, the Fifth Committee had to finalize a budget for 2002-2003. The United Nations had requested around $2.7 billion, and the Committee, in its decisions that evolved over forty meetings, granted $2.625 billion in the end.

The Committee submitted to the Assembly 28 texts on issues ranging from multilingualism, financing of UN missions and tribunals, to transitional administrations, the services of private management consulting firms and "pattern of conferences" (see p.59). The Assembly adopted 27 without a vote, while the text relating to financing the UN Interim Force in Lebanon was adopted by a vote of 123 to 2 (Israel, United States), with 2 abstentions.

Michel Tilemans of the Belgian Mission, who also spoke on behalf of the European Union in the Committee, said: "The results of the budget 2002-2003, in my view, were very satisfactory, because it's a balanced budget which took two concerns on board: to finance adequately the Organization's agreed objectives, mandates and programmes, while continuing to pursue budgetary discipline, efficiency and the general concept of value for money."

A few consider the shortfall of around $75 million between the Secretariat's proposal and the Committee's final amount as savings, while others saw it as cost cutting. Mr. Tilemans said that this shortfall, in his view, was an across-the-board savings. "In parallel, you had across-the-board cuts in travel of staff, contractual services, general operating expenses, supplies and material, furniture and equipment, consultants and experts, and information technology. It is also important to mention that the regional Economic Commissions and the Department of Economic and Social Affairs were exempted from some of these savings. These exemptions were an important factor of the deliberations in the Fifth Committee", he said. The final budget draft showed the approximate reduction in numbers: staff travel ($2.8 million); contractual services ($6.4 million); general operating expenses ($19.7 million); supplies and materials ($1.4 million); and furniture and equipment ($7.2 million).

Collen Kelapile, Botswana's representative to the Committee and also Coordinator of the African Group, said: "I think they wouldn't qualify as savings but as cuts." He added that the original starting point of the developing nations was to provide what the Secretariat had proposed, taking into account that the Secretariat could better assess the workload involved. "Unfortunately, one way or another, and in the spirit of consensus, a decision had to be made to adopt a budget that takes on board divergent concerns. Instead of targeting specific departments, the most viable option under those circumstances was to make across-the-board cuts, and this was made possible by developing nations", he said. "But under normal circumstances, if any reductions were to come, they necessarily would have been through the recommendations of the Advisory Committee on Administrative and Budgetary Questions (ACABQ). Any reduction that is not an input of a competent expert body like the ACABQ", Mr. Kelapile said, "wouldn't qualify as such a cut. Of course, it might have been true that few of the recommendations did ask for savings. For example, they pointed out duplication of services in departments. So it might have been a composite of both cuts and savings."

Mr. Kelapile also said a simple comparison between resources for the previous and the latest budgets might give the impression that the resources for the current budget were slightly up. "But a part-by-part comparison clearly shows that it was the mathematics of juggling numbers between sections. The reality is that last year, say, if there were ten mandates to be fulfilled and this year there are fifteen, then the resource requirements may be expected to rise in response to mandates."

However, Mr. Tilemans said that the across-the-board savings seemed to be a characteristic of this budget, but which were also applied in the previous budget. "The question of whether this is a sound approach remains open", he said. "To a certain extent, this issue is related to the budgetary and administrative reforms in the Organization, which have progressed significantly, thanks to the Secretary-General and his staff. But some work remains to be done if Member States want the UN to meet the challenges outlined in the Millennium Declaration." He also said that the budget section relating to the Department of Public Information was a complex issue, because some delegations felt that DPI was unduly targeted. "But what was of concern was public information as a whole in the Organization, which could be reviewed under the leadership of DPI."

Mr. Tilemans said that the Department has received $144.7 million, $2.2 million over last year's budget. However, another way of saying this would be that DPI received $3 million less than its previous budget allocation.

"Perceptions of Member States and economic forecasts played an important role in the deliberations", he said. "On the one hand, the dollar was weakening, which is bad for the UN; on the other hand, the financial and economic situation worldwide was not perceived to be a positive one at the time of the deliberations. There is also this issue of having the Member States able to live up to their obligations. If you increase the budget of the Organization, where you satisfy all the requirements of the Secretariat, but do not provide a realistic perspective of quick and effective payment by Member States, then you create expectations in the Organization which will not be met easily."

The Secretariat had also highlighted the need for information technology initiatives. The Secretary-General's report on information technology (IT) in the Secretariat stated that while initial activities would be undertaken within existing resources, a need for additional resources would have to be assessed in the future.

"We know basically that $10 million was cut across the board", said an official familiar with the budget proposed by the Secretariat. 'Ten million dollars of it, in addition to the $2.5 million in the information technology division--it's roughly a cut of $13 million."

Mr. Tilemans said: "We had a comprehensive approach at information technology. We have looked at the resources availability for IT with a bit of severity. But not too much." Ambassador Effah-Apenteng said that, nevertheless, for a "large and complex bureaucracy such as the United Nations, with its own peculiar challenges, the successes achieved by the adoption of new technologies are enviable".

The Committee also discussed the question of the financial obligations of Member States to the United Nations, and as a whole agreed that Member States had a binding, legal obligation to pay up. Yet, differences remained.

The representative of the Group of 77 nations and China, Seyed Morteza Mirmohammad, said "strengthening of Article 19 was no substitute for that binding commitment".

Under Article 19, if the arrears of a Member State equal or exceed the amount of contributions due for the preceding two years, it can lose its vote in the General Assembly. Cristian Maquieira, representing Chile and speaking on behalf of the Rio Group, supported the G-77 position and said he was "against any change in the methodology for calculation for the purposes of Article 19".

Peacekeeping operations was another issue debated in the Fifth Committee. The ACABQ recommended 121 new posts for peacekeeping operations which the Committee and the General Assembly approved.

The Committee also sent to the Assembly the budgets of the UN peacekeeping missions in East Timor, Ethiopia and Eritrea, Sierra Leone, the Democratic Republic of the Congo, and Lebanon. An amount of $1.58 million was also approved for advancement of peacekeeping operations. "It should be noted that this amount is mainly geared towards strengthening the human resources of the United Nations in peacekeeping operations", said Ambassador Effah-Apenteng.

When asked what was special about the Committee's session this year, Mr. Kelapile said: "I can say one good thing. To date, negotiations on the budget in particular continued to be conducted in an improved fashion. Stories of yesteryears say the negotiations were chaotic, but to have a budget adopted by consensus is a sign of progress." And diplomacy in the Fifth Committee is unique for its negotiations, which are also known as the "informals" (see p.59).

UN Budget 2002-2003 (in US$ millions)

Title                                               Proposed   Approved

Overall policy-making, direction and coordination    495.13     499.14

Political affairs                                    251.70     248.09

International justice and law                         59.23      59.10

International cooperation for development            267.81     273.14

Regional cooperation for development                 353.34     335.18

Human rights and humanitarian affairs                128.40     132.46

Public information                                   146.98     144.72

Common support services                              453.78     428.53

Internal oversight                                    20.74      20.30

Jointly financed administrative expenses and          69.19      77.78
special activities

Capital expenditures                                  45.74      45.42

Staff assessment                                     343.59     348.25

Development account                                   13.06      13.06

TOTAL                                              2,648.65   2,625.17

The final proposal by the UN amounts to around $2.7 billion, which
includes recosting of the budget, programme budgetary implications and
revised estimates.

Source: Department of Public Information

RELATED ARTICLE: 55 Years of the Fifth Committee Then and Now

... in 1947

* Budget for the financial year 1948-The Assembly appropriates $34,825,195 for its sessions and those of the Councils, Commissions and Committees, special conferences, investigations and inquiries, the Secretariat, common services, capital expenses and the International Court of Justice.

* Scale of assessments--The Assembly resolves the scale of assessments but excludes Siam. "In view of the fact that Siam became a Member of the United Nations on 16 December 1946 and did not participate in the first session of the General Assembly, and that the United Nations was not called upon to contribute to the travelling expenses of the Siamese delegation, no assessment shall be levied on Siam for the year 1946."

* Telecommunications--The Assembly directs the Secretary-General to obtain the "wavelengths, call signs, rights and privileges necessary for the operation of a UN telecommunications system".

* Organization of a United Nations postal service--The Assembly requests that the Secretary-General "make inquiries into the administrative, technical and financial implications of the organization of a UN postal service".

* Provisional staff regulations and staff rules--The Assembly discusses expatriation allowance, home leave, age of retirement (ACABQ recommends that the retention of staff members beyond the age of 60 will be under the Secretary-General's discretion), and termination of appointments.

... in 2001

* Proposed programme budget for the biennium 2002-2003--The Assembly adopts the recommended budget of some $2.63 billion gross. This reflects priorities set out in the medium-term plan for 2002-2005: maintenance of international peace and security; promotion of sustained economic growth and development; promotion of human rights; coordination of humanitarian assistance; promotion of justice and international law; disarmament; drug control activities; crime prevention; and combating international terrorism.

* Financing for the International Tribunals for the Former Yugoslavia (ICTY) and for Rwanda (ICTR)--The Assembly notes with deep concern the high vacancy rate in both Tribunals and recognizes that these vacancies affect the work of the ICTY and ICTR. The Advisory Committee recommends the creation of 90 and 80 new posts, respectively.

* Peacekeeping missions--The Assembly approves the budgets of the UN Transitional Administration in East Timor, the UN Mission in Ethiopia and Eritrea, the UN Mission in Sierra Leone, and the UN Organization Mission in the Democratic Republic of the Congo. It renews the mandate of the UN Verification Mission in Guatemala and establishes the Commission for Peace, stressing its key role.

* Pattern of conferences--The Assembly encourages to continue to intensify efforts being made by the United Nations Office at Nairobi to attract more meetings at its facilities.

Source: UN Yearbook 1947-1948