Assembly adopts $1.77 billion budget for 1988-89; may reconvene to discuss money crunch; UN could be 'insolvent' by mid-1988, Secretary-General warns.

Assembly adopts $1.77 billion budget for 1988-89; may reconvene to discuss money crunch

UN could be 'insolvent' by mid-1988, Secretary-General warns

At 3:55 a.m. on 20 December, after a siege-like final session lasting eight hours, a weary Fifth Committee recommended a budget of $1.77 billion for 1988-1989. The next day, the General Assembly adopted it by a vote of 146 in favor to 1 against (Israel) and three abstentions (Australia, Japan, United States). The Assembly also recommended that it consider reconvening sometime in 1988 to address the Organization's continuing financial crisis, which Secretary-General Javier Perez de Cuellar called "unprecedented" in its seriousness.

The UN, he warned, could become insolvent in the third quarter of 1988, the "simple but harsh" message of projections in his financial report. He was considering private borrowing and some other measures to enable the Organization to survive in 1988.

The world body, in expressing concern over the continuing crisis, called on States to pay in full and on time, even early when possible. The short-term deficit was expected to exceed $350 million as at 31 December 1987, it noted. Delays and partial payments of assessed contributions created "serious cash-flow problems." The Assembly reaffirmed its commitment to a "comprehensive and generally acceptable solution", based on the principle of collective financial responsibility of Member States.

The Assembly linked the financial crisis with the process set in motion in 1985 with the creation of an 18-member expert group to streamline the Organization. "In order to carry out successfully the process of reform and restructuring, it is essential that the present financial uncertainties be dispelled", it stipulated.

The immediate cause of the financial crisis was "common to all", the Secretary-General told the Fifth Committee -- the failure of many Governments to pay their assessed contributions in a timely manner, aggravated by serious currency instability.

Never had so many organizations of the system "been afflicted simultaneously by such large deficits in the funding of their mandated programmes".

Already, there had been "damaging cutbacks in ... critical areas" -- health, community water supply and sanitation, disease control, industrial development, civil aviation and telecommunications. Priority areas -- humanitarian and technical assistance, and consultancy services for least developed countries -- were severely affected.

In his closing statement, Fifth Committee Chairman Henrik Amneus said debates "have been thorough and exhausting, but held in a spirit of co-operation and compromise". A greater unity had been evident in the final vote on the appropriations in 1987. The previous budget for 1986-1987 of $1.6 billion had been approved with 10 Member States voting against it, and 11 abstaining.

The United States continued to come under fire in debates for late and incomplete payment of its assessment. Its representative Richard C. Nygard said his Government had not joined in the decision on the budget because the overall level was higher than had been hoped. However, the United States was "encouraged by the restraint demonstrated by the Secretary-General and Member States" and had therefore not opposed the budget.

The Secretary-General called 1988 a time of transition, as the Organization completes implementation of reforms recommended by the 18-member Group of High-Level Intergovernmental Experts to Review the Efficiency of the Administrative and Financial Functioning of the United Nations. The Group was created in 1985 and formulated 71 recommendations, approved at the end of 1986, to help streamline the Organization and its budgetary process.

The Assembly has also stressed the importance of completing an indepth study of the intergovernmental structure in the economic and social fields, with a view to simplifying the system.

Member States must meet their assessments "fully, promptly and predictably," the Secretary-General said. That was a "basic unaltering obligation of membership". UN organizations must enjoy "financial stability and the ability to meet common conditions of service, if they are to serve effectively the social, economic and political needs of the world of today and of the next century."

The Assembly, as in past years, authorized the Secretary-General to enter into commitments in 1988-1989 to meet unforseen and extraordinary expenses with the concurrence of the Advisory Committee on Administrative and Budgetary Questions.

Assembly Almanac 

The Assembly took a number of actions not reported elsewhere in this issue of the Chronicle:

Political and security issues

The Assembly:

Urged all States to co-operate with the International Atomic Energy Agency (IAEA) to promote the use of nuclear energy and enhance the safety of nuclear installations, strengthen technical assistance to developing countries and ensure the effectiveness of the IAEA safeguards system.

Called on all States that had not done so to ratify or accede to the UN Convention on the Law of the Sea to allow the entry into force of the new legal regime for the uses of the sea and its resources, and expressed satisfaction at the registration in 1987 of the first pioneer investors -- India, France, Japan and USSR.

Asked for implementation of the 48 recommendations of the UN Committee on Information, including the call for co-operation in establishing a new world information and communication order, seen as an evolving process and based, among other things, on the free circulation and wider and better balanced dissemination of information.

Economic issues

Asked the Secretary-General to consult with eminent persons from all regions on principles of international economic security. The Assembly recommended a constructive, comprehensive dialogue within the UN system to develop improvements in the international economic system through reform and strengthening of principles and rules governing trade, monetary and financial relations within which countries operate.

Called on developed countries to refrain from using economic measures as a means of political and economic coercion against developing countries, including blockades, embargoes, and other economic sanctions.

Expressed concern at the recent sharp fluctuations in the international financial and stock markets and the possible negative impact of those fluctuations on world economic stability, growth and trade and on the development process in developing countries.

Asked for a comprehensive report on illegal traffic in toxic and dangerous products and wastes in contravention of national and international laws.

Social matters

Asked for completion of a UN convention on illicit drug trafficking.

Approved activities for the remainder of the Second Decade to Combat Racism and Racial Discrimination (1983-1993).

Welcomed the establishment in Malta of the International Institute on Aging. Heard the Dominican Republic propose a declaration on the rights of the aged and the convening in 1992 of a second world assembly on aging.

States were urged to adopt or strengthen protective legislation with regard to their own cultural heritage and that of other peoples.

Asked for continued work on guidelines, declarations, conventions or other documents to safeguard the rights of: children (convention) those detained on grounds of mental ill-health (principles) the right to development (declaration).

Legal matters

Asked the Special Committee on the UN Charter to submit in 1988 a draft document on the prevention and removal of threats to peace and of situations which might lead to international friction.

Called for full and immediate compliance with the judgment of the International Court of Justice of 27 June 1986 concerning military and paramilitary activities in and against Nicaragua.