Global Policy Forum

WISDOM, MORE THAN EXPERTISE OR POLITICS, NEEDED IF NEW CONSENSUS ON DIVIDING UN EXPENSES IS TO BE FOUND, FIFTH COMMITTEE TOLD

A refocused approach to the scale of assessments for the apportionment of the expenses of the United Nations was needed, the Fifth Committee (Administrative and Budgetary) was told this morning as it concluded its general discussion on that issue.

Speaking on behalf of the Caribbean Community (CARICOM), the representative of Suriname said that equity, transparency and responsiveness to the needs of Member States in the new scale could not be achieved by either technical expertise or political decisions alone. More than anything else, the scale demanded Member States' wisdom.

There was no need to reinvent the wheel, however, he added, for the founders of the United Nations had left clear guidelines for the future, and even the most cynical could not deny the spirit of recommitment to the goals of the Charter proclaimed in the Millennium Declaration.

Summing up the debate in his closing statement, the Chairman of the Committee on Contributions, Ugo Sessi, said that with 52 speakers taking the floor on behalf of individual countries and groups of States, almost the entire membership of the United Nations had expressed views on that important matter. As for the methodology for the scale for 2001-2003, it was clear that its general structure was broadly acceptable to States, with some adjustments.

The discussion had highlighted some points of convergence, as well as issues to be resolved, he added. The principle of capacity to pay and the use of relative shares of world gross national product (GNP) were among the issues agreed upon. There was support for both the floor and the ceiling, as well as for the adjustment for per capita income, although there was divergence on how to mitigate discontinuity between scale periods.

As for the issue of currency exchange, there seemed to be general support for earlier recommendations regarding the use of market exchange rates, he said, except where they would lead to significant distortions. In short, the debate in the Fifth Committee had demonstrated many of the same opinions that were reflected in the 12 proposals presented to it by the Committee on Contributions.

Fifth Committee - 1a - Press Release GA/AB/3392 11th Meeting (AM) 6 October 2000

Also reflecting on the results of the discussion, the representative of Bhutan stressed that while all Member States agreed that the United Nations needed a sound and sustainable financial base and that the scale had to be fair, transparent and stable, reaching agreement on how to translate those points into any new scale remained a crucial and difficult exercise.

Also speaking in the debate this morning were the representatives of Kenya, Ecuador, Lithuania, Iran, Kuwait, Honduras, Viet Nam, Nepal, Myanmar and Gabon.

Next week, the Fifth Committee will continue work on the scale of assessments for the regular budget in informal consultations.

At the end of the meeting, the representatives of Australia, Cuba, Syria, Egypt, United Republic of Tanzania, United States, China and Bangladesh addressed some issues concerning the Committee's programme of work.

The Committee will continue its work at 3 p.m. today, when it is scheduled to conclude its general discussion on the apportionment of the expenses of the United Nations peacekeeping operations.

Fifth Committee - 3 - Press Release GA/AB/3392 11th Meeting (AM) 6 October 2000

Committee Work Programme

As the Fifth Committee (Administrative and Budgetary) met this morning, it was to conclude its general discussion on the scale of assessments for the regular budget. (For background on the scale of assessments for the apportionment of United Nations expenses, see Press Release GA/AB/3385 of 29 September 2000.)

Statements

FARES M. KUINDWA (Kenya) said the United Nations had proved over decades its effectiveness in dealing with complex and international issues even in the face of scarce financial resources. The increasing budgetary demands of the United Nations, compounded by new tasks, called for the need to establish a sound financial base and operational base. Kenya recognized the support Member States, in particular the major contributors, provided to the United Nations budget. The review of the scale was timely, and he hoped that a realistic formula would be worked out during the session. The principle of capacity to pay should be the fundamental criterion for any scale. In that regard, countries should be assessed at a rate that would not undermine their critical national policy objectives, such as poverty-reduction strategies. Any new scale should reflect the economic realities of Member States and should recognize the negative impact of the debt burden, particularly that being faced by sub-Saharan Africa. More significantly, the criteria should support the retention of debt-burden adjustment as a critical element.

On the sanctions that apply under Article 19 of the Charter to those States that fall behind in their obligations, Kenya supported the need to consider requests for exemption from developing countries experiencing genuine financial problems.

DENYS TOSCANO (Ecuador) said that the concept of shared responsibility for economic and social development was recognized in the doctrine of international multilateralism. The scarce resources available to developing countries should be supplemented from the huge financial capacity of developed countries. Whatever conclusion the Fifth Committee reached, it should be based on the undeniable reality that 80 per cent of the world's wealth was held by 20 per cent of countries. The crises faced by people living in developing countries were not reflected in economic indicators, but in the reality that they lived. It was ironic that developed countries sought to lower their contributions and increase the burden that developing countries must assume. The problems facing the Organization did not result from the scale, but from the lack of timely payments, in full and without conditions.

While it was necessary to revise the scale, it should not increase the injustice of the current international system, he said. A subject of concern was statistical base period. On the capacity to pay, it was inefficient to establish a scale with data from 1998. Without failing to recognize the difficulty in compiling data, Ecuador reserved the right to return to that subject in due course. Ecuador could not accept any increase in its assessment.

OM PRADHAN (Bhutan) said that his country associated itself with the position of the "Group of 77" developing countries and China. No doubt, all Member States agreed that the United Nations needed a sound and sustainable financial base so it could fulfil the goals of the Charter and the decisions of the membership. There was also agreement that the scale used to apportion the expenditures of the Organization had to be fair, transparent and stable. All speakers had also emphasized that capacity to pay had to remain the fundamental criterion on which to base any scale. Finding agreement on how those points translated into a methodology for any new scale remained a crucial and difficult exercise.

The low per capita income adjustment must be retained in the next scale, he said. With the gap between rich and poor countries continuing to widen, any lowering of the gradient would be anomalous. The current rate of 80 per cent should, therefore, be retained. For the same reason, the debt-burden adjustment and the maximum assessment rate of 0.01 per cent for least developed countries should be maintained. Market exchange rates should be used for converting local currencies. The option of price adjusted rates of exchange should, however, be retained for cases where the use of market exchange rates would result in excessive distortions in the income of Member States.

He said that his delegation also favoured maintaining the six-year base period to temper the effects of excessive fluctuations. Although the floor rate of 0.001 per cent represented a distortion to a number of countries such as his own, it was acceptable to his delegation. The ceiling should not seriously obscure the relation between a country's contribution and its capacity to pay. Any revision of the ceiling should not result in developing countries being saddled with rates higher than they could pay.

GEDIMINAS SERKSNYS (Lithuania) said that the Committee had a complicated task ahead of it. Nevertheless, he hoped that the negotiations on the scale would proceed in an open and constructive spirit, which would allow it to adopt a new scale by consensus. It should be simple, equitable and transparent. It was important that the new scale allow countries to share the financial burden fairly, based on the principle of capacity to pay. Having suffered from the failure to apply that principle during the first years of its membership in the United Nations, Lithuania had been advocating the idea that the capacity to pay must be a core element of the methodology for calculating assessments. In that regard, he supported the position of the European Union.

The scale should reflect current economic performance of a country, he continued. The best way to achieve that was to apply the shortest possible base period. That element was related to other aspects of the scale: fluctuations in assessment rates and collection of reliable statistical data. Concerns about these had been expressed by a number of delegations. The use of a longer base period, which would smooth substantial fluctuations in gross national product (GNP) or would mean the use of more reliable economic data, had been mentioned as one of the possible solutions. He thought that, for a time being, maintenance of the current base period merited careful consideration.

One of the main elements of the scale should remain low per capita income adjustment, he said. He also favoured keeping the current threshold for that adjustment at the level of the world's average per capita GNP and supported the current gradient of 80 per cent, although a further reduction of the gradient could be considered as well. The proposals to distinguish between large economies and small or medium-sized ones in applying a gradient or to introduce a sliding gradient deserved careful consideration.

MOHAMMAD REZA SALAMAT (Iran) said that any modification to the current elements or introduction of new elements to the scale should be carefully developed and transparently negotiated, so as to avoid any deviation from the fundamental principle of capacity to pay. The basic principles which had evolved since the United Nations was created should not be easily discarded. That did not mean that he was not open to further improvement and evolution of the scale that would render it more fair and equitable and make it a more accurate reflection of the ability of countries to contribute. Iran agreed with the view of the Committee on Contributions that, in cases where the market exchange rates caused excessive fluctuation or distortion in the income of a Member State, other appropriate conversion rates should be used. That should not be limited to a single alternative conversion rate. He supported the position of the Group of 77 and China that, in addition to price adjusted rates, weighted average rates could also be usefully employed as they more realistically reflected the GNP of countries that maintained multiple exchange rates.

Concerning the low per capita income adjustment, the gradient should be increased from its current level, he continued. A meaningful increase in the gradient was necessary for accounting for the economic difficulties of developing countries. On the issue of the debt-burden adjustment, the debt-stock approach should continue to be used. Annual recalculation would cause further instability in the scale system. Regarding the scale ceiling, the current ceiling was already a departure from capacity to pay. He was prepared to examine relevant proposals for reviewing the ceiling, provided that they contained provisions to ensure that the burden of payment would be spread among developed countries. All elements of the scale should be reviewed and discussed as a "package" with a view to achieving consensus on the scale that would reflect the concerns of all Member States.

ZIYAD MONAYAIR (Kuwait) said that, from the report of the Committee on Contributions, it was clear that it had not been able to arrive at a consensus regarding the methodology for the scale. Some elements of the current methodology were both complicated and ambiguous. The Committee on Contributions should attempt to simplify the elements and make them more transparent and favourable to the circumstance of all Member States. The financial crisis facing the United Nations could not be blamed on the methodology used in calculating the scale, but resulted from the failure of some Member States to pay their contribution in full and on time. Any amendments to the scale, or any new methodology, would have a limited effect as long as Member States did not pay their arrears. Kuwait was among the first States to pay its contribution in full and on time.

The principle of capacity to pay should be the basic criterion in deciding a scale, which should also take into consideration the different elements that affected capacity to pay, he said. Among the most important principles was that changes should not increase the assessments of developing States to finance a reduction in assessments for developed States. The Committee must talk about real capacity to pay, taking into consideration responsibilities and future requirements. Countries with special economic circumstances must be treated in a special way. The task before the Fifth Committee during the main part of the session would not be easy. It must exert every effort to arrive at a new scale that was transparent, just and fair, and recognized the needs of the new millennium.

MARCO ANTONIO SUAZO (Honduras) expressed full support for the positions of the Group of 77 and China and the Non-Aligned Movement, as well as that of the Rio Group. He said that, when discussing the scale, it was necessary to bear in mind several important points. The Millennium Summit had reaffirmed States' confidence in the United Nations, which needed to demonstrate its world leadership as the only body with sufficient moral stature. Member States were obliged to provide it with required financial resources.

Economic inequality and extreme poverty needed to be taken into consideration when determining the scale of assessments, he continued. Honduras strived to maintain its commitments to the Organization. It also believed that the current payments crisis had to be resolved immediately and without conditions. The Development Summit would be held in Geneva soon, and if Member States wanted social justice, the United Nations must receive full support.

SUBHAS CHANDRA MUNGRA (Suriname), speaking on behalf of the Caribbean Community (CARICOM), affirmed his full support for the positions of the Group of 77 and China and the Non-Aligned Movement. He said that the Fifth Committee had been characterized as a technical one but, in considering a scale of assessments, it had been given a solemn challenge. Equity, transparency and responsiveness to the needs of Member States could not be found by either technical expertise or political decisions alone. The scale required both expertise and political accommodation in the acknowledgement of limits, both minimum and maximum, if capacity to pay were not to be distorted. However, more than anything else, the scale demanded Member States' wisdom.

There was no need to reinvent the wheel, he said. When the United Nations was established, the foundation for resolving the problem had been secured. The Preparatory Commission of the United Nations had pointed out that the structure of the Organization must promote efficient administration and command the confidence of Member States. Financial controls should not hinder the execution of agreed policies. It was necessary to find the courage and the motivation to make the United Nations a success. Even the most cynical could not deny the spirit of recommitment to the goals of the Charter that had been proclaimed by the Millennium Declaration.

The scale needed a refocused approach, he continued. Freedom, solidarity, tolerance, sharing, good governance and transparency had been proclaimed by the Millennium Declaration, as well as increased cooperation and determination. The United Nations initiative on the dialogue among civilizations was also instructive. It was from that broader, more fundamental, perspective that the scale methodology should be addressed. It should also determine the responsiveness of Member States to their legal requirements, as enshrined in Article 19 of the Charter and General Assembly resolution 14 A.

With respect to measures to encourage the timely, full and unconditional payment of dues, he said that application of sanctions under Article 19 should be balanced by measures to address the root causes for the erosion of one of the stated "guideposts" of the Organization: the fact that the scale no longer commanded the confidence of Member States. Recalling the document on the status of payment in 1999 and 2000, he said that during the first part of the resumed fifty-four Assembly session, the Secretariat had received contributions in full from only 43 Member States out of 188. Only two of those were permanent members of the Security Council. The most effective incentives were those which could elicit genuine shame, or a sense of accomplishment.

Article 19 was clear in respect of parameters for granting exemptions to sanctions, he said. However, he believed the best way to minimize differences on that matter was to refocus financing and implementation of United Nations programmes so as to make them more transparent, both in monitoring and in evaluation. Consideration should be given to making programme planning the highest priority item on the Fifth Committee's agenda. It was also necessary to rationalize the budget process. As for lowering the ceiling, he did not oppose a comprehensive discussion which would include that issue, but lowering it would result a redistribution of points to some developing countries, and could lead to greater vulnerability for some States.

It was also necessary to be frank about the magnitude of United Nations scale contributions in relation to national budgets, he said. Assessments normally represented a very small part of Member States' GNP. The CARICOM strongly supported the earliest possible convening of a seminar on scale methodology, for it would promote greater commitment to the submission of national questionnaires and facilitate work on the scale.

NGUYEN THANH CHAU (Viet Nam) said that a wish to reform the Organization was reaffirmed by the heads of State at the recent Millennium Summit. He called on Member States to fulfil their obligations by paying assessed contributions on time, in full and without condition. The task ahead was not easy. Among the 12 options presented by the Committee on Contributions, not a single proposal was readily accepted by all Member States. Still, in the spirit of mutual understanding, the Fifth Committee must join heads and arrive at a commonly agreed formula. The principle of capacity to pay must be maintained as the basic criterion. Since the establishment of the last scale there had been notable changes in the world. The task was how to accommodate those changes, while maintaining the principle. He accentuated the need to have the low per capita income adjustment as an integral part of the new scale, as well as the debt-burden adjustment. He was willing to seriously consider all proposals during the examination.

CORRECTION

On page 8 of Press Release GA/AB/3393 issued 6 October, the statement of Nepal should read as follows:

SURYA PRASAD ADHIKARI (Nepal) aligned his country with the position of the Group of 77 and China. He said that only last month world leaders had stressed the importance of international peace and security during the Millennium Summit. It was time to pursue a more secure and reliable mechanism for financing peacekeeping operations. Over recent years, the number of conflicts had increased at an alarming rate. Internal conflicts were continuing to proliferate, and violence was tearing societies apart. The challenges before the international community were daunting, and it was very important to enable the United Nations to carry out peacekeeping operations more effectively. After analysing the recommendations in the Brahimi report, Nepal believed that they should be considered in a fair and transparent manner.

As an active and committed participant in peacekeeping operations around the world, Nepal believed that the entire membership must work together to determine the new scale for their financing, he said. The principles of justice and fairness should guide the work of the Committee. The 27-year old scale should be made to reflect today's economic realities. The Charter of the United Nations gave special responsibility for maintaining international peace and security to the permanent members of the Security Council. That responsibility should continue to be recognized when considering the peacekeeping scale. The principle of the capacity to pay should be preserved. Special difficulties of weak and vulnerable countries must be taken into consideration. He hoped that the collective efforts of the membership would lead to a constructive discussion on the subject and allow the Fifth Committee to arrive at a consensus.

KO KO (Myanmar) said that, due to the complexity of the issue, the Committee had an arduous job ahead. Capacity to pay was the fundamental criterion on which the apportionment of the expenses of the Organization should be based. Developing countries should not be assessed at a rate higher than their capacity to pay as a result of any adjustment to the scale. The floor should remain at 0.001 per cent and the maximum assessment rate for least developed countries should not exceed the current level of 0.01 per cent. Any change in the ceiling should not result in an increase in the assessments of the developing countries.

The difficult financial situation facing the Organization was not linked to the methodology of the scale, he continued. Those financial difficulties could be resolved if Member States paid their assessed contributions promptly and in full.

JEAN CHRISTIAN OBAME (Gabon) aligned himself with the position of the Non-Aligned Movement and the Group of 77 and China, and said that the burden of United Nations expenses should not fall on just some States. The capacity to pay should be taken into account. The statistical bases of the scale must be improved to obtain verifiable and comparable data. The GNP alone seemed insufficient, and the Human Development Index should also be taken into account. He also underscored the vulnerability of the developing countries, which was exacerbated by the debt burden and the effects of globalization. Natural disasters and the effects of the HIV/AIDS pandemic should also be taken into account. As for the problem of debt, Gabon allocated almost half of its budget to debt repayment.

In his concluding remarks, UGO SESSI, Chairman of the Committee on Contributions, thanked the delegates for their helpful and constructive statements and assured the Committee that he would report fully on the substance of the debate to the Committee on Contributions. Fifty-two delegations had taken the floor, some of them on behalf of groups. Thus, almost the entire membership had expressed views on the scale of assessments. High participation in the debate testified to the fundamental importance of the work on the scale and of the issues at stake.

As for the methodology for the scale for 2001-2003, he continued, it was clear that its general structure was broadly acceptable to States, with some adjustments. The debate had highlighted some points of convergence as well as certain issues to be resolved. Capacity to pay and the use of data on relative shares of the GNP as the first approximation of capacity to pay were among the issues agreed upon. There had been support for both, the floor and the ceiling, as well as the adjustment for per capita income although there was divergence on how to mitigate the discontinuity between scale periods. As for the issue of exchange rates, there seemed to be general support for earlier recommendations regarding the use of market exchange rates, except where they would lead to significant distortions.

In short, the debate had demonstrated many of the same opinions that were reflected in the 12 proposals before the Committee, he said. On the problem of data, which was of crucial importance, he added that a number of delegations had expressed disappointment that the Committee on Contributions had been unable to reach full agreement on a clear set of recommendations. In that respect, it was important to clarify what exactly had been done by the Committee. It had been requested to continue to base the scale on reliable data. The GNP data provided to the Committee was based on national data which was derived from countries' replies to the questionnaire sent to them. Available data was also supplemented from other sources. The Statistics Division then prepared a complete database especially for the Committee on Contributions, as guided by the Committee's mandate. Realistically, though, the reliability of data varied from country to country.

The Committee also reviewed all the elements of the methodology, he said. Now, the Fifth Committee should determine what additional information it needed to decide on a scale, and the Secretariat would do its best to provide the required data. As for conversion rates, a broad measure of agreement on that issue had been reached. It was also agreed that there were a number of cases which needed adjustment in respect of market exchange rates. Some countries believed that the list arrived at was too restrictive and needed further adjustment. Regarding measures to ensure full payment of assessed contributions, the Committee on Contributions would return to that matter at its next session. In conclusion, he took note of the support for the holding of the seminar on scale methodology in the near future. He also advised the Fifth Committee that Dominica had made the necessary payments to avoid sanctions under Article 19 of the Charter.

HENRY FOX (Australia) asked that the concluding remarks of the Chairman of the Committee on Contributions be circulated to Member States in writing. The representatives of Bangladesh and the United States repeated that request.

PARK HAE-YUN (Republic of Korea), Acting Chairman, replied that the Secretariat would circulate the concluding statement by Mr. Sessi to Committee members.

Organization of Work

DULCE MARIA BUERGO RODRIGUEZ (Cuba) said that, in the interest of making progress, it would be good to introduce some additional items formally next week, since there seemed to be quite a few time slots available in the work programme.

ABDOU AL-MOULA NAKKARI (Syria) said that he had also noted many free time slots in the programme of work. Also in the interest of making optimum use of time, he suggested that discussion on the medium-term plan and human resources management commence next week.

AYMAN M. ELGAMMAL (Egypt) expressed concern about the fact that almost half of the time slots for meetings next week remained free. During informal consultations, he had said that he could not agree to have evening meetings. He requested that the Bureau and the Chairman review the programme with a view to filling the free time slots and issue a new work programme by Monday.

MUHAMMAD YUSSUF (United Republic of Tanzania) proposed that the informal consultations on administrative and budgetary aspects of financing peacekeeping operations (agenda item 153) take place in the morning of Tuesday, 10 October, rather than in the afternoon. He also proposed that formal discussion of the peacekeeping scale of assessment (agenda item 169) be held in the morning of Thursday, 12 October, in the interest of expediting the Committee's work.

JOSEPH ACAKPO SATCHIVI, Fifth Committee Secretary, said that he shared concerns expressed by members. However, the Bureau was awaiting quite a few documents from the Advisory Committee on Administrative and Budgetary Questions (ACABQ). Moreover, the Committee had decided to accord priority to the scale of assessments for the regular budget, because a decision on that scale would impact on progress on the peacekeeping scale. When the initial programme of work had been issued, two meetings on the peacekeeping scale had been scheduled for next week, but the Bureau had removed them. If the Committee wished to begin negotiations on the peacekeeping scale, then the Bureau could insert that item into the agenda.

In response to the delegate of Syria, he said that the medium-term plan must pass through the Main Committees before being considered by the Fifth Committee. Human resources management reform was being considered by the ACABQ, which was why the Bureau had scheduled that item for the end of October.

The Acting CHAIRMAN said that the Bureau would take the concerns of the delegations into consideration. Regarding the afternoon meeting on agenda item 153, it had not been possible to schedule a morning meeting because the coordinator for that item was not available.

Mr. NAKKARI (Syria) said that it was correct that negotiation of the peacekeeping scale had been delayed on the request of Committee members. His main concern was that the Committee was leaving too many sessions free, which would result in many afternoon and evening sessions later on in the session. He proposed that items that had been deferred from the fifty-fourth session be raised next week.

Mr. FOX (Australia) recalled that his delegation had expressed a preference for informal consultations on the peacekeeping scale of assessments as soon as possible, and he hoped that the Bureau would take that into account.

Mr. YUSSUF (United Republic of Tanzania) said that he was not satisfied with the Secretariat's explanation that agenda item 153 could not be considered in the morning of Tuesday, 10 October. The Committee should not be held hostage to the schedules of coordinators.

SUZANNE F. NOSSEL (United States) endorsed the request that informal consultations on agenda item 169 begin next week.

ZHOU QIANGWU (China) said that he supported the priorities of the Secretariat in the programme. If there were changes, he would be grateful if the Bureau could inform him by the end of the day.

RIAZ HAMIDULLAH (Bangladesh) said that he also called for a revision of the work programme, issued by this evening if possible, and perhaps including the peacekeeping scale.