Assembly decides economy measures should continue to counter $85 million shortfall.

Acting in response to the demands posed by the current United Nations financial crisis, the General Assembly on 11 December agreed (decision 41/466) that the Secretary-General might proceed with economy measures along the lines he had proposed to counteract an $85 million shortfall projected for 1987.

In implementing those measures, he was asked to take into account the relevant comments of the Assembly's Fifth Committee (Administrative and Budgetary).

The Committee, in its 10 December report (A/41/953), stated that despite the economy measures already in place, the financial situation of the Organization remained critical during 1986, and that prospects for 1987 "appeared equally gloomy, owing to the continuing non-fulfilment of Charter obligations with regard to payment of assessed contributions".

The Committee recognized the need for flexibility by the Secretary-General in handling the financial problem, and said he should endeavour to limit the impact of economy measures on the general level of programme delivery. Programmes, once approved by legislative bodies, it stated, should in principle be implemented.

Economy measures implemented in 1986, which had yielded nearly $67 million in savings, included: a recruitment freeze; non-extension of staff beyond age 60; a six-month delay in implementation of 1987 promotions; reductions in use of funds for travel, consultants, temporary assistance and overtime; deferral of construction and maintenance projects; control and limitation of documentation; and suspending payment of half the representation allowance for staff at D-2 level and above.

The Secretary-General on 18 November reported (A/41/850) that $27.6 million was saved in salaries and common staff costs; $15.5 million in alterations, maintenance and construction; $10.4 million in supplies, materials, furniture and equipment; $5 million in travel costs; $2.7 million in contractual services; $2.5 million in consultants; and $3.2 million in general operating and other expenses.

New measures proposed for 1987 included alterations in the timing, venue and duration of conferences and meetings in order to make optimal use of staff and resources - for example, the 1987 Assembly would be asked to try to limit its session to 10 weeks - and limitations on verbatim and summary records and on travel arrangements for Member States.

The Secretary-General reported on 25 November (A/41/901 and Add. 1) that the revised appropriation for 1987 would be $735 million, based on the assumptions: that with the exception of certain non-payments on political grounds, Member States other than the major contributor (the United States) would pay their 1987 assessments in full; that some Member States would pay more than their 1987 assessments to reduce their arrears; and that, unless there were new developments, payment by the major contributor in 1987 could well be of the same order as in 1986. It was unlikely, he added, that economy measures would be sufficient to cover the entire projected shortfall of $85 million.

While the percentage of Member States that had paid in full their 1986 assessments was higher than usual, he stated, the amount of assessments remaining unpaid was larger than ever before, "largely as a result of payment until now by the largest contributor (the United States) of only 50 per cent of its assessed contribution".

Controller J. Richard Foran on 4 December told the Fifth Committee that the Organization had received on 21 November a payment of $100 million from the United States, but that payment did not change the overall picture of the Organization's current financial standing, Arrears were projected to reach $284 million by 31 December 1986, he said, and the United Nations was expected to begin operations in 1987 with a cash balance of $10 million, less than one week's requirements.

The Secretary-General reported on 25 November that despite economy measures, timely payment by most Member States of assessed contributions, and receipt of more than $35 million in arrears, previous withholdings and voluntary contributions, "the United Nations has operated during the past months on the brink of bankruptcy"

The situation "defeats rational forward planning and carries with it the strong possibility of the sudden interruption of programmes and Secretariat services", he said. In planning for 1987, it was "more than ever clear that continuation of the present financial crisis, characterized as it is by inadequate funds, uncertainty of resource availability and depleted reserves, is damaging to the capacity and potential of the United Nations".

The "first and most important need for the financial soundness and orderly operation of the United Nations in 1987 and in future years", the Secretary-General stressed, was for Member States to pay all assessed contributions to the Organization, past and present, as decided by the General Assembly in accordance with the Charter.

Replenishing reserves was also a high priority, Mr. Perez de Cuellar added, urging that any funds received from payment of arrears in 1987 that exceeded the $735 million budget appropriation for 1987 be allowed to accrue to reserves. He also encouraged Member States to make voluntary contributions to the United Nations Special Account.

Proposal to expand

CPC membership

deferred to 1987

Consideration of a draft resolution by which the membership of the Committee for Programme and Co-ordination (CPC) would be expanded from 21 to 36 Member States to ensure broader geographical representation was postponed to the 1987 General Assembly session at the request of its sponsor, Bolivia.

Mary Carrasco (Bolivia), introducing the text (A/41/L.48/Rev.1), said there was widespread agreement on the need to strengthen the CPC in view of preparation of the medium-term plan for 1990-1995 and the important programming and budgeting responsibilities assigned to the Committee under the revised programme budget process (resolution 41/213).