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Fifth Committee, Concluding Session, Recommends 2010-2011 Budget of $5.16 Billion, Current Assessment Scales for Regular Budget, Peacekeeping Contributions

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GA/AB/3939

Sixty-fourth General Assembly
Fifth Committee
22nd Meeting (Night)

Also Recommends Review of All Elements of Scale Methodology, Aiming at Decision on Any Changes before End of Sixty-sixth Session

The Fifth Committee (Administrative and Budgetary) emerged from lengthy negotiations in the very early morning today to recommend a $5.16 billion budget for the Organization for 2010-2011, also suggesting that Member States retain the formula currently used to determine States' contributions to the regular budget. Similarly, it recommended that the formula for assessing contributions to peacekeeping operations stay the same.

The framework for that formula, reached in the final hours of negotiation, had been a major subject of discussion within the Committee near the end of the session, with the current policy due to expire at the end of 2009. Approved without a vote, the scale of assessments for the regular budget reflects a country's capacity to pay, measured by such factors as a country's national income and size of population. Assessments would be based on estimates of gross national income that were converted into United States dollars using market exchange rates, except where that would cause excessive fluctuations and distortions in the income of some Member States.

Further by the draft, there was to be a maximum assessment rate for the least developed countries of 0.01 per cent, and a maximum assessment rate of 22 per cent. It also recommends a review of all the scale methodology, with a view to a decision before the end of the sixty-sixth session to take effect for the 2013-2015 scale period.

The representative of the Russian Federation proposed an amendment to the text, which would have allowed the rates of assessment to be determined using price adjusted rates of exchange. His suggestion was defeated by a vote of 85 against to 22 in favour, with 27 abstentions (see Annex II).

Explaining why he had voted against the amendment, the representative of Japan said that, after difficult negotiations, the Committee had reached an agreement that reflected a balanced approach. By the text, the current methodology was to be applied to the scale of assessments for next three years, with a stipulation that a review of the scale would take place "with a sense of urgency". It marked a successful compromise that he felt obliged to preserve. He also believed that the Committee should not override the majority view of the Committee on Contributions, on whose work the scale was based.

The representative of Sweden, speaking on behalf of the European Union, added that a more balanced way to share the United Nations budgetary responsibilities was essential, and that the current scale did not sufficiently reflect the actual capacity to pay. The European Union's contribution to the United Nations regular budget, which stood at 40 per cent of total contributions, exceeded its collective income, which was 30 per cent of the world total.

With regard to peacekeeping assessments -- where each Member State is assigned to one of 10 levels, with corresponding discount rates -- the Committee recommended that the Assembly take note of updates to those levels, as suggested by the Secretary-General. It would then endorse those updates subject to certain provisions. Those updates would be used to establish Member States' rates of assessment for peacekeeping operations for the period 2010 to 2012

Peacekeeping budget assessments are based on the regular budget rates, but with discounts for least developed countries. The five permanent members of the Security Council, who approve all peacekeeping operations, pay extra fees to compensate for those discounts. Prior to the review, some developing countries had feared that a rise in assessments would have been unmanageable, given the state of their economies amid the global downturn. The Assembly was recommended to recognize such concerns, including those raised by Bahrain and the Bahamas, and decide to review the structure of the levels of the scale of assessments with a view of making a decision, if agreed, no later than its sixty-seventh session.

Mindful of difficulties facing States because of the world financial crisis, the Committee recommended, in another draft, that the Assembly assess only half the amount that would eventually go towards recosting, pending review of the first performance report. It would request that the Secretary-General report on options for protecting the United Nations against fluctuations in exchange rates and inflation, drawing on the experience of other United Nations organizations.

By that same draft, which passed without a vote, the Assembly would note with concern that resource allocation in the proposed budget did not precisely track the Organization's priorities. Stressing the need to correct those imbalances, it would request that the Secretary-General, for all future budgets, take the necessary steps to ensure the fullest possible picture of the Organization's requirements for the biennium. In future budget submissions, the Secretary-General was requested to include clear, specific information to distinguish between voluntary and assessed contributions.

The Committee went on to address various "special subjects" relating to the budget, approving a draft that touched, among other things, on issues relating to the United Nations Joint Staff Pension Fund. By that text, the Secretary-General was requested to ensure that, under the current volatile market conditions, decisions concerning the investments of the Fund were implemented very cautiously, fully taking account the four main criteria for investment: safety, profitability, liquidity and convertibility.

Other special subjects addressed by the Committee included the issue of $83.1 million from the medical and dental reserve funds, which the Secretary-General had proposed to be used to fund the Organization's after-service health insurance liabilities. It recommended requesting the Secretary-General to provide information on the composition of those reserve funds at its sixty-fifth session. In addition, the Assembly was recommended to request the Secretary-General to submit a report on managing those liabilities at its sixty-seventh session.

By two other drafts approved today, the Committee recommended setting the 2010-2011 budgets for the International Criminal Tribunal for Rwanda and the International Tribunal for the Former Yugoslavia at $244.62 million and $290.92 million, respectively.

In other action, the Committee recommended that the Assembly:

-- Decrease the final regular budget appropriation for 2008-2009 by $85.24 million for expenditure sections and $7.48 million for the income sections;

-- Establish the Working Capital Fund for the biennium 2010-2011 in the amount of $150 million;

-- Provide $29.75 million for the International Trade Centre UNCTAD/WTO;

-- Decide to appropriate an additional $5 million for the Development Account;

-- Approve the jointly financed budget of the Department of Safety and Security in the amount of $242.04 million;

-- Approve $569.53 million for 27 political missions authorized by the General Assembly and/or the Security Council;

-- Note that a balance of $31.33 million remained in the contingency fund.

The Committee also pronounced itself on the programme budget implications of a series of drafts before the Assembly and recommended that it defer until the resumed session the review of the efficiency of the administrative and financial functioning of the United Nations, and human resources management.

Also today, the representative of Israel requested a recorded vote regarding Part V of the text on special subjects relating to the budget, by which the Assembly would take note of the Secretary-General's reports on financial estimates resulting from resolution S-9/1 adopted by the Human Rights Council at its ninth special session.

She said Israel could not support any expenditure or allocation of funds that endorsed and permitted the work of any fact-finding mission that was established with predetermined conclusions.

As a result, the Committee held a vote on that part of the resolution, deciding to approve it by a vote of 136 in favour to 2 against ( Guatemala, Israel), with 3 abstentions ( Benin, Cameroon, Côte d'Ivoire) (see Annex I).

Background

The Fifth Committee (Administrative and Budgetary) met today to conclude its deliberation in the main part of its sixty-fourth session, taking up several outstanding draft texts.