G-77 disappointed with U.N.’s unresolved financial crisis

UNITED NATIONS, April 21 (IPS)— The Group of 77 is disappointed that the High-Level U.N. Working Group on Finances has failed to make any progress in resolving the current financial crisis facing the world body.

Speaking on behalf of the G-77 and China, Muhammad Yusuf of Tanzania told the Working Group that ‘’in spite of commendable efforts made by the two Co-Vice-Chairmen to prepare the draft decision and to lead the Working Group in its search for providing a sound financial basis for the Organization, the absence of political will on part of some Member States has been an impediment to desirable progress,’’ he said.

The draft decision introduced by the Co-Vice-Chairmen addressed the core issue of the payment of all arrears, and payment of assessed contributions in full and on time and without conditions
‘’As always, the Group of 77 and China came prepared to engage in a constructive dialogue. Unfortunately, certain Member States are not taking this opportunity to evolve a process of serious negotiations,’’ Yusuf said.

The draft decision in the first part dealing with the payment of all arrears, represented the area of greatest convergence in the Working Group to date. The draft decision on the payment of arrears was broadly consistent with the position maintained by the G-77 and China that the current financial situation of the UN is a crisis of payment, and is a consequence of the nonpayment of substantial arrears by some Member States, especially by some of the major contributors, as well as delayed payment of assessed contributions.
The second part of the document dealing with the methodology for the scale of assessments for the regular budget and the peacekeeping scales, lacked consensus, and also needed to be examined by other relevant bodies. The G-77 and China reaffirmed its view that there is no linkage between the scale of assessments and the present financial situation of the UN.

Yusuf also spelled out the G-77 position that the peacekeeping scales of assessment are distinct from the regular budget scales of assessment.

The General Assembly has determined that peacekeeping involves a heavy expenditure on member states necessitating a different method of apportioning such expenditures.

‘’We believe that the continued differentiation in apportioning the expenditures between the regular budget and peacekeeping is imperative. The financing of peacekeeping must reflect the special responsibilities of the States permanent members of the Security Council,’’ he added.

Further, the relatively greater capacity of the more developed among the Member States to pay larger amounts for peacekeeping and the limited capacity of the less developed countries to meet such expenditures, is a reasonable premise based on economic realities. This distinction is still valid and must be preserved, Yusuf said.
The current ad hoc scale for peacekeeping which has been effective for over 20 years, has stood the test of time. The existing system which divides expenditure amongst the four Groups on the basis of established percentages should now be institutionalized, he said.
The establishment of objective criteria for placement of countries, including new and recent members, in the four groups could be further examined. Such criteria should take into account not only a country’s national income but also other prevailing circumstances, including its level of development and its overall socio-economic situation.

The G-77 is also of the view that proposals for fixing a premium or surcharge to be borne by members of the Security Council are not acceptable.

The special scale for peacekeeping operations should be retained according to the established principle of collective but differentiated responsibility.

The establishment of a ceiling and a floor for the permanent members of the Security Council is totally unacceptable, because it is not in keeping with the principles and guidelines of the relevant General Assembly resolutions, he added.

The Working Group on the Financial Situation concluded its session without reaching any agreement on the draft decision proposed by the Co-Vice-Chairmen. Another session of the Working Group is scheduled in June 1997.

Following are excerpts of the draft decision:

"The General Assembly

(a) Reaffirms the legal obligation of Member States to pay their assessed contributions in full, on time, and without conditions in accordance with Article 17 of the Charter of the United Nations;
(b) Notes with concern that the non-payment and late payment of assessed contributions by Member States remains at near-record levels despite a significant reduction in the aggregate level of assessments in 1996 and the considerable efforts of a number of Member States to meet their obligations under the Charter;
(c) Reaffirms the legal obligation of those Member States in arrears to pay in full and without conditions all their arrears and outstanding contributions;
(d) Decides, as an exceptional measure and without establishing a precedent, that payment of all arrears and outstanding contributions outstanding at 31 December 1997 shall be made by 31 December 1999;
(e) Decides also that all arrears and outstanding contributions referred to in paragraph (d) above that are not paid by 31 December 1999 shall accrue interest at a rate of 5 per cent per annum from 1 January 2000;
(f) Decides further that, as of 1 January 1998, all future assessed contributions payable by Member States to the Organization with an overdue status of eleven months shall thereafter accrue interest at the rate of 5 per cent per annum;
(g) Decides that the General Assembly may waive the application of the provisions of paragraphs (d), (e) and (f) above to a Member States if it is satisfied that the failure of the Member States to make the payments in question are due to circumstances beyond its control and that the Committee on Contributions shall advise the General Assembly in this regard;
(h) Decides also that, all other factors being equal, special consideration should be given to the extent to which Member States have fulfilled their financial obligations in the award of procurement contracts and the recruitment of staff.
(i) Requests the Secretary-General to submit a report to the General Assembly at its fifty-third session on the implementation of the present decision and on the results of the efforts referred to above to expedite the payment of arrears and outstanding contributions."