Annan alerts General Assembly of July crisis if spending cap not lifted

Presenting the General Assembly’s budgetary committee with a request from Secretary-General Kofi Annan to lift the spending cap on the remainder of the United Nations’ two-year fiscal period, the Organization’s comptroller has warned that under the current restraints the “last dollar available” will be spent before mid-July.

UN Controller Warren Sach told the Assembly’s Fifth Committee yesterday that some UN programmes might have to be cut back even earlier due to the situation, which stems from a December decision of Member States to adopt a budget for the 2006-2007 biennium but to limit spending authorization to six months, pending significant progress on UN reform.

Mr. Annan has recently expressed optimism that the cap, backed by the United States and other major donors, will be lifted since progress in UN reform is ongoing and the Organization is involved in too many crucial operations at the current time for the world to allow them to stall.

At yesterday’s meeting, the 132-Member bloc of developing countries known as the “Group of 77” and China, said it was ready immediately lift the spending cap without restriction, while most donor nations, including the US, Austria (speaking on behalf of the European Union) and Japan, stressed that more time was needed to come to a consensus agreement.

The Committee will continue its consideration of the spending cap on Friday.