2002 ‘financially good year’ for UN, says top management official

An analysis of the United Nations fiscal status at the end of 2002 showed that it could be considered a financially good year – with the largest amount of cash on hand and the smallest shortfall in dues in seven years, but that there were some uncertainties on the horizon for 2003, the world body’s top management official said today.

Summing up the UN’s financial state at a press conference this afternoon, Catherine Bertini, Under-Secretary-General for Management, said the Organization’s aggregate cash balance at the end of 2002 was the highest ever, the level of unpaid contributions had dramatically decreased and significant progress had been made in reducing debt to Member States. Joining Ms. Bertina was Jean-Pierre Halbwachs, Assistant Secretary-General for Programme Planning, Budget and Accounts and UN Controller.

Two unfortunate trends were emerging, however, she cautioned. Cash levels for the International Tribunals were slipping a little more each year, leading to cross-borrowing from closed peacekeeping missions; and fewer Member States (117) had paid their dues in full by the end of the year –- a serious setback in the progress achieved between 1994 and 2000.

Ms Bertini said that cash on hand at the end of 2002 -- some $1.4 billion -- was largely the result of a higher than projected level of payments. Unpaid assessments, although still substantial, were also significantly lower at year’s-end, amounting to $1.68 billion, compared to $2.11 billion in 2001. That figure was the lowest in seven years, as were amounts due to Member States, which had been reduced to $701 million, compared to $748 million at the end of 2001, she added.

She said the amount of actual regular budget cash of $35 million, however, had been achieved despite smaller payments than forecast from the United States, Brazil and Argentina and fewer numbers of Member States paying their yearly assessment in full. It was due to lower net disbursements than initially projected that instead of ending the year with no cash, the Organization had been able to end it with a small amount of regular budget cash.

“In 2002, only 117 Member States paid their regular budget contributions in full,” Ms. Bertini said. That presented a serious setback in the progress achieved between 1994 -- when only 75 Member States paid in full -- and 2000, when 141 Member States had paid in full. She urged all Member States to meet their obligation to pay in full and on time. Of those owing some $305 million in regular budget assessments at the end of 2002, the United States owed $190 million or 62 per cent; Brazil owed $37 million, or 12 per cent; and Argentina owed $30 million or 10 per cent, with 69 other Member States having total outstanding amounts of $48 million, or 16 per cent.

Turning to the financial situation in 2003 in the context of the challenges and reform expectations to be met, Ms. Bertini said much needed to be accomplished this year, but to make further progress, Member States must provide the means. The Organization’s scorecard over the first four months of 2003 showed cash collections for the regular budget that were somewhat better than last year: this year, 76 Member States had paid in full so far this year, compared with 70 at the end of April in 2002. The amount of payments received in the first four months of the year had also increased, totalling $635 million, $218 million ahead the results at the same time last year.

The combined picture at the end of 2003 for peacekeeping, regular budget, tribunals and -- for the first time -- the capital master plan cash showed a significant reduction from a high of some $1.4 billion to $990 million. The year-end cash balance projected for the capital master plan was forecast to be $14 million. The Organization intended to make significant payments to Member States in 2003, keeping up the momentum achieved in 2002 and, in fact, going beyond what had been accomplished last year. It expected to be able to pay some $939 million in certified troop and contingent-owned equipment claims. With projected additional claims of $731 million, the end result, at 31 December 2003, should be a significant lowering of debt to $495 million -- $129 million for troops and only $366 million for COE.

She said her “wish list” for the financial stability of the Organization envisioned 191 Member States paying on time; accelerated payments when Member States paid late in the year; and full payment by year-end in all cases. Overall, though the financial situation was continuing the progress made over the last several years, it was important not to let the present course change. It was up to Member States to reverse some of the negative trends mentioned today.