General Assembly budget committee hears 'mixed picture' of UN's financial health

The top budget official for the United Nations has noted some improvements in the world body's finances but said its overall financial health remained "fragile" and that it was essential Member States meet their obligations in full and on time.

Addressing the General Assembly's Administrative and Budgetary Committee yesterday, as it began its twice-yearly consideration of the UN's finances, Controller Warren Sach presented a "mixed picture" through the end of 2004.

Citing both positive and negative developments, he focused on four major indicators of the Organization's financial situation: assessments authorized; unpaid assessments; cash available; and debt to Member States.

Cash balances were higher than at the end of 2003 and unpaid assessments for the regular budget and tribunals were lower, he said. At the same time, however, unpaid assessments for peacekeeping were sharply higher and debt to troop and equipment contributors was also up.

The regular budget presented a mixed picture, Mr. Sach said, with the number of Member States having paid their assessments in full by the end of 2004 falling to 124 from 131 by the end of 2003. On a more positive note, however, the amount unpaid for the regular budget at the end of last year had fallen from $442 million to $357 million. By 31 January 2005, 35 Member States had paid their assessed contributions in full, and that number had grown to 72 by 30 April, compared to 77 the same date last year.

The financial position of the international tribunals for the former Yugoslavia and for Rwanda was much better today than in October when the Committee was last briefed, he said. At that time, 113 Member States had owed some $80 million, and as a result of the financial shortfall, a recruitment freeze had been in effect. By 31 December 2004, the shortfall had been reduced to $30 million, and significant payment by a number of Member States had made possible the end of the recruitment freeze. The number of Member States that had paid their contributions to the two tribunals in full in 2004 had increased to 88 from 81 in 2003.

However, the total amount received by 30 April 2005 was also down, to $175 million from $187 million in April 2004. While he welcomed those positive developments, much remained to be done to ensure the tribunal's financial stability. "After all," he added, "of the 191 Member States, no fewer than 148 still had amounts outstanding for one or both tribunals at the end of April."

Turning to peacekeeping, Mr. Sach said the level of assessments issued for peacekeeping operations in 2004 had more than doubled to over $5 billion. That was due, in part, to new operations in Burundi, Côte d'Ivoire and Haiti, expanded operations in the Democratic Republic of the Congo (DRC), as well as to a technical issue related to peacekeeping assessment rates.

The Organization expected cash available for peacekeeping to total some $1.192 billion at the end of 2005. Of that amount, $60 million was expected to be available in the Peacekeeping Reserve Fund, after taking account of new or expanded operations in the Sudan and the DRC. Of the $337 million in the accounts of closed peacekeeping operations, $219 million had to be held to cover corresponding liabilities, leaving only $118 million for possible cross-borrowing.

In addition to requirements for new and expanded missions, the Organization had to cross-borrow occasionally from the closed operations for a number of other active operations, as well as for the regular budget and tribunals. Given the current fragile financial situation, Secretary-General Kofi Annan had proposed that the Organization retain the $93 million available in the accounts of closed operations. As the Organization would only have $25 million to cover cross-borrowing requirements that were periodically much higher, he stressed the importance of that proposal.