IMPORTANCE OF TIMELY, FULL PAYMENT OF UN CONTRIBUTIONS,
”CAPACITY TO PAY” PRINCIPLE REAFFIRMED, AS FIFTH COMMITTEE
TAKES UP SCALE OF ASSESSMENTS
NEW YORK, 14 October (UN Headquarters) -- The Fifth Committee (Administrative and Budgetary) this morning took up the scale under which Member States’ contributions to the budget of the United Nations are calculated, with delegations reaffirming the importance of: paying assessed contributions on time, in full and without conditions; and the “capacity to pay” principle.
The United Nations scale of assessments was last reviewed in 2000, when the current scale (2001-2003) was adopted in resolution 55/5 B. One of its main features was a reduction of the maximum rates (the ceiling) from 25 to 22 per cent. The new ceiling was then applied to the Organization’s main contributor -- the United States -- and the points arising as a result of the change were distributed pro rata among other States, except for those affected by the “floor” and the least developed country ceiling.
As in 2000, it was agreed that the methodology for the scale of assessments would remain in place until 2006. This year the Committee on Contributions presented its recommendations for the scale for 2004-2006 on the basis of the elements of the current scale methodology.
In that connection, a number of speakers pointed out that application of the 2000 decision to the 2004-2006 scale would lead to a significant increase in their dues. While committed to paying their contributions to the United Nations, they would face serious difficulties in meeting their obligations. Mexico’s dues, for example, would increase by some 75 per cent, the representative of that country said.
The representative of Syria, speaking on behalf of the Arab Group, said that following the adoption of the scale in 2000, the assessments of certain Arab countries had increased as much as 200 per cent. The economic difficulties, including sanctions against some countries, and major currency fluctuations in recent years had had a serious impact on their capacity to pay. It was important to identify the reasons that had led to the increases and remedy the situation in the future, to take account of the situation.
China’s representative said his country’s assessment for 2004-2006 would increase by 35.18 per cent over the last period. He had no objection to reasonable adjustments derived from the methodology based on the principle of capacity to pay, as approved by the fifty-fifth session of the Assembly. Not only had China fulfilled its financial obligations to the Organization, but as a permanent member of the Security Council it had also assumed additional financial obligations towards peacekeeping. At the same time, although China had made great strides in its economic development, it was still a developing country with unique circumstances, which included a rather weak economic base and a large population.
The representative of Japan said his country had been faithfully paying its assessed contributions, but now doubts were emerging about the present methodology. Why did Japan, out of 191 Member States, have to shoulder nearly 20 per cent of United Nations expenses? he asked. He stressed that appropriate and equitable burden sharing among Member States was a prerequisite for achieving a system that could provide each and every Member State with a sense of legitimacy and fairness. The scale of assessments should become more balanced, in conformity with each Member State’s actual economic performance, as well as with its status and responsibility in the United Nations, he stressed.
Turning to the measures to encourage payment of arrears by Member States, the representative of Italy, on behalf of the European Union, said that it was necessary to establish a practice that would do justice to those -- from all regional groups -- who did pay their contributions in full and promptly, without imposing burdensome provisions on those who had genuine difficulties in meeting their financial obligations, in order to ensure the financial health of the Organization.
Delegates also highlighted the importance of ensuring that the procedure for exemptions operated fairly and effectively and stressed that prompt, full and unconditional payment of contributions, in addition to the reimbursement of arrears, was essential.
The Committee also concluded its consideration of the pattern of conferences, focusing on the ongoing reform of the Department for General Assembly and Conference Management, quantitative measures of efficiency and productivity and development of methods and indicators for assessing the performance of conference services, which had been requested for the current session.
Delegates noted the importance of the provision of conference services for meetings and consultations of regional and other major groupings of Member States, and called upon the Secretary-General to continue providing those services to the regional groups. Stressed in the debate was the need to provide equal resources for the provision of conference services at various duty stations and to fill interpretation vacancies at Nairobi on a priority basis.
Also addressing the Committee today were the representatives of Morocco (on behalf of the “Group of 77” developing countries and China), New Zealand (on behalf of Canada, Australia, New Zealand (CANZ)), Peru (on behalf of the Rio Group), Thailand, Republic of Korea, Turkey, Bosnia and Herzegovina, Canada (on behalf of CANZ), Nigeria and the Russian Federation.
Responding to questions and comments from the floor was Under-Secretary-General for General Assembly and Conference Management, Jian Chen. Documents were introduced by Chairman of the Committee on Contributions, Ugo Sessi, and United Nations Controller, Jean-Pierre Halbwachs.
The Committee will meet again at 10 a.m. Wednesday, 15 October, to continue its consideration of the scale of assessment.
Background
The Fifth Committee (Administrative and Budgetary) this morning was expected to take up several reports related to the scale, under which Member States’ contributions to the budget of the United Nations are calculated, and continue its consideration of the “pattern of conferences” agenda item. (For background on the latter see Press Release GA/AB/3575 of 13 October.)
Scale of Assessments
One of the main documents before the Fifth Committee this session is the report of the Committee on Contributions containing, among other things, the recommended scale of assessment for 2004-2006 (document A/58/11). The report follows the sixty-third session of the Committee on Contributions last June.
The scale was last reviewed in 2000, when the current scale (2001-2003) was adopted in resolution 55/5 B. Member States’ assessments are based on each country’s gross national income, which is converted to United States dollars after adjustments for external debt and low per capita income. There are also minimum and maximum rates -- so-called “floor” and “ceiling” -- of assessment. A maximum rate of 0.01 per cent is applied to the least developed countries (LDCs).
One of the main features of the scale adopted in 2000 was a reduction of the ceiling from 25 to 22 per cent, with the provision (resolution 55/5 C) that, at the end of 2003, the position would be reviewed, depending on the status of contributions and arrears. The new ceiling was then applied to the Organization’s main contributor -- the United States -- and the points arising as a result of the change were distributed pro rata among other States, except for those affected by the floor (0.001 per cent) and the LDC ceiling.
In resolution 55/5 B, the General Assembly also decided that the elements and criteria used in constructing the scale for 2001-2003 would also apply to the scale for 2004-2006, subject to certain provisions. Based on the Assembly’s decision, the Committee decided to conduct its review of the scale for 2004-2006 on the basis of the elements of the current scale methodology. Any changes in the regular budget scale of assessments for 2004-2006, if approved by the General Assembly, would have an impact on the peacekeeping rates of assessment, as well.
Requested by the General Assembly in resolution 57/4 B to elaborate further on the criteria regarding as hoc adjustments of the rates of assessment outside the normal three-year review cycle, the Committee agreed that the circumstances surrounding such requests should be truly exceptional and extraordinary to warrant such a change and should be based on the fullest possible information on the nature of the action being requested, in order that the Committee and the General Assembly have a sound basis on which to base their conclusions.
Resolution 57/4 B also endorsed the Committee’s recommendations on multi-year payment plans, which represent a useful tool for reducing States’ unpaid contributions. The Committee recommends that the Assembly encourage Member States in arrears to consider submitting such plans and recalls its recommendation that submission of a plan and its status of implementation should be taken into account as one factor when considering requests for exemption under Article 19 of the Charter. At the same time, it was recognized that some countries are not in a position to submit plans, and consequently, they remain voluntary and are not linked to other measures.
Another document on today’s agenda was a report of the Secretary-General on multi-year payment plans (document A/58/63), which provides information on payment plans/schedules submitted by Georgia, the Republic of Moldova, Sao Tome and Principe and Tajikistan and on the status of implementation of those plans at 31 December 2002.
Also before the Committee was a note by the Secretary-General on the outstanding assessed contributions of the former Yugoslavia (document A/58/189). Referring to an earlier letter from the Secretary-General to the President of the Assembly (A/56/767), the document draws attention to the question of the treatment of the arrears of the former Yugoslavia following admission of the Federal Republic of Yugoslavia (now Serbia and Montenegro) to the United Nations on 1 November 2000. That decision automatically terminated the membership of the former Yugoslavia in the Organization.
At that point, the country still had outstanding assessed contributions to the United Nations in the amount of some $16.23 million. The note provides updated information on the outstanding assessed contributions of the former Yugoslavia, which reflects the application of credits arising in 2002 and 2003. At 30 June 2003 an amount of some $16.17 million was outstanding.
In making a decision on this matter, the Assembly has an option of approving a write-off of the arrears, consistent with the position of the five successor States -- Croatia, Slovenia, The former Yugoslav Republic of Macedonia, Bosnia and Herzegovina and the Federal Republic of Yugoslavia (now Serbia and Montenegro). Alternatively, it can seek full or partial payment from the successor States. In that case, it also needs to decide on the treatment of the arrears, which arose following the dissolution of the Socialist Federal Republic of Yugoslavia. The Assembly might also call on the successor States to negotiate an agreement regarding the amounts of their debt. If an agreement cannot be reached, the United Nations might claim payment from each of the five States of an amount that it considers an equitable portion of the total.
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