A/49/PV.86 General Assembly

This afternoon, under agenda item 10, “Report of the Secretary- General on the work of the Organization”, the General Assembly will continue its debate on the financial situation of the Organization.

I wish to take this opportunity to express my appreciation to the Secretary- General for his elaborate and detailed report in document A/49/1. May I, at the outset, associate myself with the sentiments expressed by the Chairman of the Group of 77, Ambassador Lamamra of Algeria, on the issue before us. In his statement to the General Assembly on 12 October 1994, on the subject of ensuring a viable financial base for the Organization, the Secretary-General underscored the perennial problem of financial crises facing the Organization and identified the following factors as some of the major causes of the problem: first, late payments by Member States; secondly, the process of approving peace-keeping budgets; and, thirdly, the method of assessment. The Kenya delegation agrees with the essence of the Secretary-General’s analysis of the situation contained in that statement. The Secretary-General went on to observe that the problem He therefore proposed that the matter be given urgent consideration at the highest level and direct consideration by the General Assembly. I had the privilege to participate in the deliberations of the Friends of the Secretary-General — the so-called F-16 — early this year. That informal group spent considerable time studying in depth the whole question of the financial situation of the United Nations and, in particular, possible changes in the present formula of assessment. There was general agreement in the informal group on the need to find a better-structured and equitable way of determining the United Nations scale of assessment, bearing in mind the fundamental principle of the capacity to pay and the obligation of Member States to pay assessed contributions in full and promptly. No organization could be expected to operate efficiently without a sound financial basis and programmes which fall within its financial capacity. In the last couple of years the Member States have expanded the activities of the United Nations at an unprecedented rate, particularly in the area of peace-keeping, to the We agree with the Secretary-General on the urgency of resolving the financial crisis through a detailed review of the current assessment criteria and other related issues. The review may require reform of the current assessment formula for both the regular and the peace-keeping budgets. A detailed and objective technical review of the assessment criteria will of necessity facilitate the political decisions required of the General Assembly. At the same time, political guidelines are required of the General Assembly to ensure that technical work is based on clear terms of reference for timely and substantive review. On the other hand, the review must be undertaken within an environment of political will if it is to achieve its objective. In this connection, we wish to point out that any action which may be taken on this matter must take into account General Assembly resolution 48/223, which reaffirmed that Member States’ capacity to pay is the fundamental criterion for determining the scale of assessments. The Committee on Contributions has also spent considerable time examining this issue. The conclusion which can be drawn at this stage is that this is a complex and technical issue for which there are no easy solutions. While there is a ceiling for the rate of assessed contributions for individual Member States in regard to the regular budget, there is no percentage limit for the peace-keeping budget. There may also be a need to set up a percentage limit for the assessed contributions for the peace-keeping budget, which should include an appropriate surcharge for the permanent members of the Security Council, in accordance with the relevant resolution of the General Assembly. It is logical to assume that the percentage ceiling for the assessed contributions of a permanent member of the Security Council in regard to the peace-keeping budget would be above the 25 per cent limit for the regular budget. In the recent past the peace-keeping budget has experienced serious weaknesses that are clearly highlighted in the Secretary-General’s statement. Currently the budgetary process is undertaken on a piecemeal and ad hoc basis, in disregard of the emergency aspect of peace- keeping activities. The result has been United Nations interventions that are too late and inadequate, even in situations like that in Rwanda, where timely and adequate United Nations intervention would have saved thousands of In addition to the reserve fund, there is a strong case for annual estimates of peace-keeping budgets to facilitate national budgetary approvals, as opposed to the current system, under which many Member States make appropriations in their national budgets for United Nations peace-keeping operations in arrears. The Member States could then be in a position to make such funds available as the assessments are made for individual peace-keeping operations. The problem of reimbursement of expenses to troop-contributing countries would also be eased accordingly. Member States should share the burden of the United Nations budget according to their ability and on an equitable basis. The assessment formula should be simple, easy to apply and objectively reflective of the capacity to pay. The formula should have inbuilt automaticity for regular adjustments of the capacity to pay to take into account the relative changes in the capacities of individual Member States. A technically objective criterion based on verifiable statistics is likely to command consensus more easily. In that regard, the formula of assessment proposed by the F-16, based on a country’s share of world income with a uniform discount rate for the countries with less than the average per capita income and a surcharge for the permanent members of the Security Council in the case of the peace-keeping budget, warrants serious consideration. We believe that a political solution to the problem is not enough; there must be technical and objective justification for such a solution. Whereas political or high- level approaches can be taken, a lasting solution to the problem must, of necessity, be technical and objective. The approaches must take into account that the Fifth Committee is the Main Committee of the General Assembly that is given the competence and responsibility to analyse the administrative and financial matters of the Organization. In this regard, we welcome resolution 49/19, recently adopted by the General Assembly, which established an intergovernmental working group of 25 experts to study and examine all aspects of the implementation of the principle of capacity to pay as the fundamental criterion in determining the scale of assessments for contributions to the regular budget. That group is expected to submit its report to the General Assembly not later than 15 May I wish to emphasize that whatever steps or decisions the Assembly may wish to take must be consistent with the processes that are already ongoing in both the Fifth Committee and the Committee on Contributions. With regard to the peace-keeping budget, we welcome the proposals that have been made by the Secretary-General on agenda item 132, now before the Fifth Committee. We hope that the informal consultations under way in that Committee will be able to come up with workable solutions to this outstanding problem. In conclusion, whereas the question of the scale of assessments needs to be addressed, the cash-flow problems of the Organization will never be solved unless Member States pay their assessed contributions in full and on time. This, indeed, is the most fundamental problem. If Member States do not take their obligations seriously, any formula that may be agreed upon, however equitable it may be, will not be a solution to the cash-flow problem. When all is said and done, this seemingly simple problem remains the most serious bottleneck, one whose elimination is entirely dependent on the will of Member States. In this regard we wish to emphasize that it is a Charter obligation that decisions relating to the United Nations budget should be a collective responsibility of Member States. Thus, any unilateral actions in this regard would compound the problem before us.

The delegation of Egypt wishes to begin its statement by thanking the President for affording Member States the opportunity to consult on the ways and means of achieving financial stability for the United Nations in order for it to be able to shoulder the important tasks entrusted to it in the post-cold-war era. My delegation also commends the Secretary-General’s unremitting efforts to alert the Member States to the United Nations financial difficulties and to urge them to continue to seek an urgent solution that would provide the resources the Organization stands in need of if it is to continue to achieve its objectives and to carry out the programmes approved by Member States. Ambassador Ramtane Lamamra, the Permanent Representative of Algeria, made a statement this morning on behalf of the Group of 77 and China in which he clearly stated the Group’s position and its view of the dimensions of the situation now facing us and how we might deal with We are also in full agreement with the statement by the Chairman of the Group of 77 that the efforts which are being made to improve the performance of the Organization and to modernize its working methods in order for it to be able to rise to the challenges of the twenty-first century will falter and that such faltering will take us back to square one unless all Member States pay their full assessed contributions on time and without any preconditions. The General Assembly’s current discussion of this issue affords all Member States the opportunity of stating that they intend to pay the arrears owed by them in full before the fiftieth anniversary of the founding of the United Nations. Let us all undertake, in a joint declaration to the world, to continue to support the Organization and to enable it to implement our collective will in support of the international solidarity and cooperation upon which international relations in our present-day world are founded. Member States, including Egypt, have spoken, on numerous occasions, of the importance of supporting the United Nations by every means and of strengthening its role, given the fact that successive international developments have demonstrated the clear and abiding link between peace, stability and development. International stability cannot be achieved in the absence of balanced and sustainable development. Structural imbalances in international economic relations will continue to foment social unrest, disturbances and social conflicts that can turn into disputes which threaten international peace and security. The United Nations, in our view, is the only forum that is capable of dealing comprehensively with such vital issues. Therefore, we must support the Organization politically and financially so that it may perform the role we expect it to play, especially that the international community now has a historic opportunity to demonstrate clearly that peace, stability, democracy, human rights and Regardless of some economic difficulties, Egypt pays its financial contributions to the United Nations in full. We take pride in the fact that we are one of the countries that are not in any way in arrears with regard to their contributions to the Organization. We are confident that if all States had the political will, we could solve the cash- flow problem facing the United Nations in a very short time indeed. My delegation welcomes dialogue in the framework of the General Assembly’s Fifth Committee in trying to find a solution to the Organization’s cash-flow problem. In this connection, we find that a well thought-out, agreed and gradual reform will be better, by far, than a hasty decision that could satisfy some but would not necessarily reflect the views of the majority of Member States, which set great hopes on an enhanced role for the United Nations and on its ability to respond positively to new developments. Before concluding, I should like to reiterate Egypt’s readiness to cooperate with the President in his endeavours. I should like also to repeat to him our personal gratification at seeing him presiding over the Working Group that will be formed within the Fifth Committee to examine this problem and voice our confidence in his sagacity which is the source of pride for every African.

The delegation of Venezuela thanks the Secretary- General for his statement on the financial difficulties facing the Organization. We studied with great interest that statement to the Assembly on 12 October and the annexed document distributed then. As new economic and social priorities are set, Venezuela favours strict compliance with the policy of zero growth in the Organization’s regular budget. As we assess more realistically the effectiveness of the policies adopted to date in this phase of peace-keeping operations and as the Security Council is being reformed, Venezuela is in favour of maintaining and institutionalizing the existing special scale of assessments that exists for these purposes. It is premature to conclude that the Organization lacks a viable financial base. On the other hand, what does seem to require careful thought is the question of determining reasonable limits on the Organization’s capacity for action. We believe that this is an ongoing process and that it will not be easy to reach definitive conclusions. However, any Everyone knows that the Organization has had serious difficulties in the onerous and difficult field of peace-keeping operations, whose costs and results give rise to increasingly serious reservations. Everyone knows, too, that the Organization must set itself a clear course in the economic and social field and that the institutional reforms being pursued have yet to address the heart of the problem. We therefore share in the current tendency to review these facets of the Organization’s life in depth and to give them a political dimension, including at the highest level. The fiftieth anniversary will be a unique opportunity to do this. With respect to what the Secretary-General has described as late payment, there are two extreme situations. One is the reasonable position of countries which, because of their economic situation and their increased obligations within the framework of the Organization, experience short-term difficulties in keeping up-to-date with their commitments. The other, more questionable situation is that of countries which, for reasons of their policy towards the Organization, not only withhold payment but also place conditions on it. The latter approach, we believe, has not been duly recognized in the Secretary-General’s diagnosis. The distortions consequent upon that approach are unquestionably serious. No country is happy to find itself becoming a source of funding to make up for the arrears of others; no country is encouraged to remain current in the absence of serious progress by some of the major contributors. The Organization suffers the consequences, and its credibility is undermined. Venezuela favours reviewing the Organization’s administration and making whatever improvements are necessary. Our interest stems not only from our responsibility as a Member State, but also from being one of those contributors which bear a heavier burden than their status as developing countries with serious short- term problems merits. Until we resolve the question of payments arriving late for reasons of political strategy, the discussion of so-called structural impediments and possible solutions is unlikely to produce results. Charging interest on late payment, or granting authority for the Organization to take on debt, should be considered, but for now we have serious questions about either option. We believe that it would not be right to increase income available for spending on the assumption that the In the short term, the problems of the capital base and cash flow are not linked to the issue of the scale of assessments. We have supported, as an initial step, a study in greater depth of the idea of measuring the real capacity to pay, with a view to setting fair parameters consonant with the real situation of every State. We also support an analysis of the effectiveness of decision-making processes and an evaluation of the results of peace-keeping operations, whose costs need to be substantially reduced on the basis of established political requirements, more stringent operational guidelines and a limit on the number of operational fronts. Venezuela agrees with the Secretary-General that the financial crisis has an important political component. The quest for solutions requires an objective debate, political and technical, within the most appropriate bodies of our Organization both on the scope of the obligations which the Organization may assume and on the most appropriate ways of fulfilling them. We need to strike a more reasonable balance. The Organization runs the risk of overextending itself if it continues to attempt to solve everything at once. The problems of the financial base are merely the first symptom that the desirable and the possible are out of step at this stage of the life of our Organization.

First of all, I should like to express my delegation’s appreciation to the President for providing Member States with an opportunity to express their views on the serious financial situation that the Organization is currently facing and to discuss effective ways and means for ensuring a viable financial base for the United Nations. The statement that the Secretary-General made to the General Assembly on 12 October 1994 has already drawn the Assembly’s attention to the seriousness of the situation that we are now faced with. My delegation shares the sense of crisis as expressed by the Secretary- General in his report and earnestly hopes that this opportunity will enable Member States to gain a deeper understanding of the nature of the issues involved and to face squarely the problem of how to arrive at an effective solution to what is probably the single most important problem that the Organization faces today. The problem of the financial difficulties faced by the Organization is extremely serious. Every year in the fall there is a financial crisis in cash flow, forcing the Secretary-General to issue an urgent request to Member States to pay without delay their dues on the regular and peace-keeping budgets. I note with great concern in particular that the Secretary-General in his report points to the fact that the pattern of payments of Member States has recently worsened as a growing number of countries either are late in their payments or are accumulating arrears. Surely these developments will only make the financial condition of the Organization worse. The contributions that are received from Member States provide the financial foundation for all activities of the United Nations. Thus the viability and effectiveness of the Organization are dependent almost entirely on timely and full payment of the assessed contribution of the Member States. While we must guard against an uncontrolled expansion of the budget and strive to utilize resources as effectively and efficiently as possible, it is inevitable as well as undeniable that the Organization, as the nucleus of international cooperation for the maintenance of international peace and security and for the promotion of prosperity and the welfare of the world, will have to be engaged more actively in increasingly wider fields. The peace-keeping operations of the United Nations, as an invaluable means for keeping peace in the precarious conditions of the post-cold-war transition in different regions of the world, is expected to expand its scope of operation and to intensify its efforts to contain conflicts. In this setting, fulfilment by every Member State of its financial obligation is a sine qua non for the effective functioning of the Organization. Our responsibility in this regard is both individual and collective. The Government of Japan takes this responsibility most seriously, and intends to fulfil its financial obligations to the full. I should like to take this opportunity to call upon all other Member States to do likewise. It goes without saying that arriving at a methodology that can be accepted as fair and equitable by all Member States will by no means be easy. My delegation is at least encouraged by the trend in the Assembly, where so many delegations have expressed serious concern over the present financial situation of the Organization. This concern was already manifested in the adoption of resolution 48/223, which instructed the Committee on Contributions to review the current methodology. Under resolution 49/19, an Ad Hoc Intergovernmental Working Group of Experts has been created with a mandate to study and examine all aspects of the implementation of the principle of capacity to pay in determining the scale of assessments. My delegation earnestly hopes that this Ad Hoc Working Group will arrive at a fruitful and constructive conclusion to help expedite our work for overcoming this gigantic task we face. The problem of how to finance the peace-keeping operations of the United Nations is becoming more and more serious to the extent that the operations have been increasing so rapidly, both in number and in complexity, in recent years. While we should accept the fact that such an increase is only to be expected and not to be avoided, all operations should be carefully scrutinized both at the time of their establishment and at the time of their extension. On the other hand, once the decision is taken to engage in an operation, Member States are collectively responsible for the resulting costs. There is a movement on the part of some Member States to review the methodology for the scale of allocation of these costs for peace-keeping operations. My delegation agrees that we should be able to review the whole process to develop a system that will be fairer and more equitable than the present system. In approaching this problem of allocation of the financial cost of peace-keeping operations, all ingredient factors relevant to the calculation of the scale of assessments for peace- These are a few of the comments of a general nature, on the part of my delegation at this stage. Japan supports the establishment of a working group to explore and examine in greater depth those relevant factors, some of which I have touched upon in this preliminary intervention. Given the fact that this issue is going to be of great political importance, requiring eventually a decision at a high political level by each Government, the discussion of this problem should be coordinated at a high level. At the same time, however, in light of the technical nature of the problem, contributions from financial and technical experts will be very much needed. It is important, in particular, that every effort be made to avoid politicization of this debate. As long as these two requirements are met, my delegation is open-minded about the modalities of the working group. My delegation is ready to offer its full cooperation in working with other delegations in our common search for a satisfactory resolution of the financial difficulties of the Organization, including the problem of improvement of the methodology for determining the scale of assessments. It looks forward to contributing to the discussion that will follow this general debate. My delegation has little doubt that, with the able leadership of the President of the Assembly and with our united political will to join forces to overcome the crisis of the Organization, we shall be able to accomplish our mission to resolve this difficult issue afflicting the Organization at this critical and challenging moment.

I wish to thank the President for the opportunity provided to us to discuss the financial crisis of the Organization. The perennial financial crisis of this Organization again compelled the Secretary-General, before the General Assembly, on 12 October 1994, to plead with Member States on the need for a solution. In his address to the forty-ninth session of the General Assembly about two months ago, my Minister for Foreign Affairs, Mr. S. Jayakumar, focused on this very theme. All Member States, I am sure, share the Secretary-General’s grave The Secretary-General has identified one cause of the financial crisis — late payments by Member States of their assessed contributions. We firmly believe that this is the fundamental cause of the crisis. If Member States pay in full and on time, many of the present financial difficulties identified by the Secretary-General could well be resolved quickly. With available funds, the cash-flow problems of the Organization, such as arrears owed to troop and equipment contributors, debts to vendors and suppliers, and the holding back of budgetary surpluses due to Member States, would no longer exist. We would also not have a cash reserve problem. The Working Capital Fund and the Peace-keeping Reserve Fund would be replenished and could therefore serve the purposes originally envisaged. Full and timely contributions of Member States to the United Nations is a Charter obligation binding on all Member States of the United Nations. All Member States must unconditionally pay their contributions to the United Nations. In particular, permanent members of the Security Council should not be in arrears both in regular and peace- keeping contributions. As my Minister noted however, this is, unfortunately, by now a tired mantra. What we really need to do is to consider seriously how to develop a system whereby Member States will be encouraged to pay their contributions in full and on time. One possibility is to charge interest on late payments, with special consideration being given to the least developed countries. The experience of a number of multilateral organizations which have adopted this system of charging interest on late payments has been encouraging. The other issue raised by the Secretary-General is the methods of assessing contributions. We do not think that there is a major problem in the methods of assessment of Member States’ contributions. Certainly, there might be room for improvement, but this should not distract us from the root cause of the financial crisis, namely the failure of Member States to pay in full and on time. In any case, the technical aspects of how to improve the methods of assessment are issues the Committee on Contributions has already been mandated to consider. We also created a high- level group of experts last month to examine how better to measure the capacity of Member States to pay. The discussions of these groups should be sufficient to show up any shortcomings in the present systems of assessment. Nevertheless, Singapore is ready to strive, together with other Member States and the Secretary-General, to work out objective economic and political criteria to improve the In his statement, the Secretary-General appeared to suggest that the principle of capacity to pay should be based on a Member State’s “per capita resources”. This, we believe, is not quite accurate. Since its inception, the United Nations has consistently used gross national income as the primary basis to calculate capacity to pay. Let me refer members to the report of the United Nations Preparatory Commission in San Francisco, 1946. Chapter IX, Section 2, paragraph 13 of the report reads: “The expenses of the United Nations should be apportioned broadly according to capacity to pay. It is, however, difficult to measure such capacity to pay merely by statistical means, and impossible to arrive at any definite formula. Comparative estimates of national income would appear prima facie to be the fairest guide.” In resolution 14 (I) of 1946, Member States adopted this paragraph as the basis for the collection of funds and appointed the Committee on Contributions to prepare a scale of apportionment based on the paragraph I have just quoted. Since then, the General Assembly and the Committee on Contributions have consistently endorsed gross national income as the best and most equitable criterion. It is only after this fundamental criterion has been used that other factors are applied in the methodology of the scale of assessment. However, the paper accompanying the Secretary- General’s statement of 12 October 1994 correctly acknowledges that gross national income is the main element in the current methodology of the regular budget. Based on this fact, my delegation has concluded that the reference to “per capita resources” must have been an inadvertent error on the part of the drafters of the Secretary-General’s statement. The Preparatory Committee wisely did not use per capita national income to determine Member States’ contributions because of the problems associated with this concept. There are many reasons not to do so. I have listed a few of them, but in the interests of time I will not read them out as they are already contained in my written statement. The United Nations and its Member States have consistently and explicitly rejected the use of per capita gross national product as a primary criterion to determine a Member State’s capacity to pay. There are several “There are a number of well-known deficiencies of GNP per capita as an indicator of economic well- being and performance”. (para. 10) Secondly, the Joint Inspection Unit report JIU/REP/93/4, discussed in the annex to document A/49/424/Add.1, confirmed the same view. Singapore, like many small States, needs an efficient and effective United Nations to help maintain a stable, free and harmonious international environment. We therefore strive to conduct ourselves in a responsible and constructive manner in the United Nations. In an effort to do this, Singapore, like other small States, consistently endeavours to pay its United Nations dues in full and on time. This is in spite of the fact that small States, because of their inherent constraints, are often inhibited from playing an active role in the United Nations and are seldom represented in the main and subsidiary bodies of the Organization. To summarize, we are convinced that to resolve the financial crisis we need, first, to implement firmly, once and for all, a system to encourage Member States to pay their contributions in full and on time. Secondly, we must ensure that the permanent Members of the Security Council continue to bear a greater burden of the cost of peace- keeping. Thirdly, all Member States should pay up their arrears to the United Nations by the fiftieth anniversary of the Organization next year. Fourthly, if — and I stress “if” — we are to review the present methods of assessing the contributions of Member States, only a systematic and comprehensive approach based upon objective criteria accepted and agreed to by all will work. My delegation will cooperate fully in resolving this very complicated and important problem facing our Organization.

My delegation is pleased to have this opportunity to address the Assembly on a matter of pressing importance: the critical financial situation of the Organization. We are compelled to agree with the stark assessment presented to the Assembly by the Secretary-General in his statement of 12 October. The problem has assumed such proportions as to undermine the effectiveness of the Organization as a whole. The causes are not difficult to discern. The Secretary-General has clearly identified them As Canada’s Minister of Foreign Affairs, the Honourable André Ouellet, said in his statement during the general debate in September, “the United Nations can fulfil the mandates we give it only to the extent that its Member States meet their financial obligations and contribute generously to its voluntary funds. ... Canada is fully convinced of the urgency and importance of ensuring a viable financial basis for the Organization. We fully support the goals of eliminating the arrears owed by Member States, of strengthening cash flow, and of putting in place equitable arrangements for funding the regular and peace-keeping budgets. Canada fully supports the establishment of an open-ended working group to deal with these matters on an urgent basis. I wish to assure the Assembly that Canada will play a full, active and constructive role in the work of the group. My Government believes that the most serious financial problem facing the Organization is arrears: the failure of Member States to pay their assessed contributions in full, on time, and without conditions. No attempt to address the issues of cash flow or the method of assessment can be successful unless the problem of arrears is solved. The practice of delaying or withholding payment of assessed contributions is unfortunately widespread. Some Member States are genuinely unable to pay; many are unwilling; and some even decide to withhold payments as a matter of policy, an action that has no legitimacy in Charter terms. It is worth reiterating that the Charter is equally binding on every Member State: it does not give Members the option of deciding unilaterally, on a selective basis, whether or not to comply. The magnitude and pervasiveness of the problem of arrears has led us to devote some thought to the question of how Member States might be persuaded to honour their obligation to pay assessed contributions in full and We should also, however, consider means of making the burden of contribution easier for Member States to bear. In many cases, it might be possible for Member States to improve their payment performance if regular budget assessments were divided into periodic instalments. Regarding peace-keeping assessments, which now amount to roughly three times the regular budget, it would undoubtedly alleviate the burden if assessments were put on a more regular and predictable basis. This would be one benefit of the proposals that have been advanced regarding annualized and combined peace-keeping budgets. We should also review current procedures regarding the distribution of budgetary surpluses to Member States. Canada believes that it would be entirely appropriate for such surpluses to be set off against the arrears of Member States or held in suspense until those arrears are paid. Only when a State is current with respect to its financial obligations should it receive a refund or a credit against its next assessment. This would be one way of helping to ensure that all Member States eventually pay their full share. The Organization is disproportionately reliant on those Members who pay in full and on time; it needs to find new ways of shifting some of the burden back to those who pay late. The Secretary-General has also referred to the problem of depleted cash reserves. To a large extent, this problem is caused by arrears. At the risk of stating the obvious, there would be no cash-flow problem if all or most Member States were current with respect to their financial obligations. Increasing the authorized levels of the Working Capital Fund or the peace-keeping reserve fund would not in itself solve the problem. Increased assessments would be needed to replenish the funds at their new levels, and these assessments would still be subject to the problem of arrears. In other words, merely increasing the authorized level of a fund does nothing to increase the amount of money in the fund. One of the most important and sensitive issues before us is that of the scale of assessments and the methodology Only last year, the Assembly reaffirmed the principle of capacity to pay as the fundamental criterion for determining the scale of assessments. Only a few weeks ago, we agreed to establish an ad hoc intergovernmental working group of experts to study the implementation of that principle. The existing scale methodology continues to be based on the principle of capacity to pay. Over the years, however, a number of elements have been added that distort the implementation of that principle. Developments of the last few years, with the appearance of many new countries with economies in transition, have shown how serious some of those distortions have become. I will not seek to analyse all distorting elements which have, over the years, attached themselves to the scale of assessments. There are many, and the issues involved are highly technical. I would, however, briefly note the following. The scheme of limits, until it is completely phased out, will continue to cause a number of countries to be seriously over-assessed. A better way needs to be found of dealing with exchange rates, and especially with large, rapid movements in exchange rates. A better way needs to be found also for taking account of external debt, and for applying the low per capita income allowance. We also wish to draw attention to the serious distortions created by maximum and minimum — ceiling and floor — assessment rates. The floor rate requires some of this Organization’s smallest and least wealthy Members to pay up to 10 times what they otherwise would. The ceiling rate, on the other hand, confers on the largest and wealthiest a benefit which must be subsidized by other Members of the Organization. It also results in the burden of the relief granted to developing countries under the existing scale methodology being borne entirely by developed countries other than those at the maximum. Particular attention should be paid to the problem of contributions to the funding of peace-keeping operations. These costs have risen to a level approximately three times that of the regular budget. Canada fully agrees with the principle that permanent members of the Security We recognize, however, that there are a number of anomalies in the current arrangements. The four-group system should be carefully reviewed with a view to simplifying it. A number of the wealthier developing countries or newly industrialized countries could begin to contribute to peace-keeping at the same rate of assessment as they do for the regular budget. So, indeed, could some of the developed countries which do not already do so. Economic growth results in increasing capacity to pay, and carries with it increasing responsibility. Some countries seek the additional and grave responsibility of permanent membership of the Security Council. Some of these, it must be noted, benefit from the elements which distort the present scale of assessments. An immediate effort on their part to join us in removing the distortions which benefit them would be an earnest of their seriousness in assuming their responsibilities as members of the Council. As a major troop contributor, Canada already bears peace-keeping costs well in excess of its proportionate national income or its rate of assessment. The Organization’s reimbursements to troop contributors cover only a fraction of our costs of providing troops and equipment. We could not therefore support any increase in the rates of assessment of countries that already contribute to peace-keeping at the same rate as they do to the regular budget. The original guidelines regarding the apportionment of the Organization’s expenses warned of the need to guard against two opposing tendencies: the desire of some Members unduly to minimize their contributions, and the desire of others to increase their contributions “for reasons of prestige”. If the latter observation now seems quaint, that is a measure of how much times have changed in the past 50 years. The former tendency, however, is still very much with us, and is the principal cause of our present difficulties. Most Member States, whether by delaying or withholding payments, or by seeking to reduce their rates of assessment, try to minimize their contributions. That is what has caused the problems described to us by the Secretary-General, and it is to deal with those problems that this session of the Assembly will consider establishing an open-ended working group. We believe that It should also be taken into account that other regular and ad hoc bodies are dealing with various aspects of the problem. The new Assembly working group should also take their findings into account.

Allow me at the outset to join previous speakers in expressing our sincere appreciation to the Secretary-General for his insightful and lucid statement delivered earlier, and to associate my delegation with the statement of the Permanent Representative of Algeria, which was delivered on behalf of the Group of 77. The issue now before us has become a perennial one that has continued to defy all attempts to resolve the financial crisis of the United Nations. Since the end of the cold war, the United Nations has regained its mandated role in international relations, and so has also been continually asked to tackle an increasing number of challenges and tasks, creating, in the words of the Secretary-General, overwhelming financial demands. Among these challenges, the maintenance of international peace and security, the promotion of international cooperation for solving economic, social, cultural and humanitarian problems, as well as the advancement of human rights and the attainment of higher standards of living in larger freedom for all, loom particularly large. However, the unprecedented financial crisis not only threatens to destroy the hopes and aspirations invested in the Organization by the Member States but also critically to weaken its ability efficiently to carry out its mandate and greatly to endanger its very survival. My delegation therefore shares the deep concern of the Secretary-General over the difficult financial situation in which the United Nations has found itself. To meet such challenges and purposes effectively, there is an imperative need to put the Organization on a more stable and assured financial basis. I am convinced that much of the current situation is derived from the non- fulfilment by Member States, and in particular by some of the major contributors, of their Charter obligations to According to the Secretary-General, in his report on the work of the Organization, as at 15 August 1994 Member States owed $835 million to the regular budget and $2.6 billion for peace-keeping operations, including amounts unpaid in prior years. We agree with the Secretary-General that, apart from the late payment of assessed contributions, the process of approving peace- keeping budgets and appropriations aggravates the situation. Likewise, limited cash reserves, which are currently virtually depleted, are a fundamental part of the problem. Obviously, this Organization cannot fulfil its broad-ranging mission without correcting these fundamental problems and providing adequate and stable resources. Our challenge is, therefore, to restore a sufficient cash flow to ensure a viable financial base for the United Nations. As we see it, the only means of ensuring a definitive solution to the persistent financial crisis is for Member States fully to abide by their obligation, as set out in the Charter, to pay their assessed contributions on time and in full. Thus, to restore a sufficient cash flow should be our first and immediate objective. I believe that the crux of this matter lies in the application of Article 19 of the Charter of the United Nations. This Article points out that if the amount of a Member State’s arrears equals or exceeds the amount of the contributions due from it for the preceding two full years, then that Member cannot vote unless the General Assembly is satisfied that its failure to pay is beyond its control. It has never been the intention of Article 19 to enable Members to remain two and even three years behind in their payments before being considered in arrears. Some countries, however, take advantage of the two-year leeway — and sometimes their tardiness is deliberate and even politically motivated, which can constitute a form of conditionality. Without seeking to amend Article 19, we should ensure that it is fully understood, discussed and given a clear and common interpretation. It is therefore important that the current application of Article 19 be reviewed and that the term “arrears” be redefined and made specific. It is also recognized that the proper functioning of peace-keeping operations is intimately linked to the availability of financial resources. The financing of peace- keeping operations is the special responsibility of the permanent members of the Security Council. It should be recalled that various General Assembly resolutions, particularly resolution 1974 (S-IV) of 27 June 1963 and Given the increased recognition of the indivisibility of peace and security and development, we believe it important that a balance be struck between the expenditures on peace-keeping operations and those needed to implement the imperatives of development. Furthermore, in this context, it is understood that the economically more developed countries are in a relatively better position to make larger contributions to achieve this important objective. In this regard, the principle of capacity to pay should be adhered to. Regarding the proposal to establish the open-ended working group, Indonesia is of the view that the deliberations of this working group should be aimed at finding an overall solution to the current financial crisis and at contributing toward the restoration of the long-term administrative and financial viability of the Organization. Moreover, the discussions of this working group will be the beginning of a reform process, one that should be carried forward by the Member States and the Secretary- General, comprehensively addressing all the various dimensions and complexities of the crisis currently besetting our Organization. My delegation concurs with the following words used by the Secretary-General in his statement of 12 October 1994: This grave financial crisis can be resolved only when we succeed in dealing with its root causes, particularly in fully carrying out the provisions of Articles 17 and 19. This effort must be accompanied by a renewed commitment of explicit support for the United Nations by all Member States, in accordance with their obligations under the Charter. In conclusion, I should simply like to add that as we come to celebrate the fiftieth anniversary of the United Nations all Member States should show their commitment to the Organization in tangible form by seeking to become current on their dues and to pay them in full. My delegation also stands ready to join with other Member States in supporting the Secretary-General’s efforts to fully solve the financial crisis of our Organization. On 3 October, in his statement before the General Assembly, the Australian Foreign Minister, Senator Evans, in outlining our concerns about the failure of Member States to fulfil their treaty obligations, said: When Member States ratified the Charter of the United Nations, they agreed to share the expenses of the Organization as the General Assembly apportioned them. They agreed, furthermore, to do so without condition. Member States have also agreed, through a financial regulation they approved, to pay their contributions in full within 30 days of receiving their assessments. It is self- evident that if Member States were to pay their share of the expenses of this Organization in full and on time, we would not suffer the financial crisis that emerges every summer and every autumn. The impact of the unacceptably high level of unpaid contributions has fallen mostly on the Organization’s financial reserves and has lengthened delays in payments of troop-contributor costs. The absence of adequate financial reserves, in turn, places considerable strain on the Secretariat’s ability to deal with the uneven cash flow in the Organization. So it is not a matter solely of the legal obligation of Member States to meet their contributions promptly and to It is therefore time for the Assembly to look carefully at the question of strengthening measures to encourage the prompt payment of contributions. We could explore the possibility of charging interest on overdue accounts and payments or of applying Article 19 of the Charter to provide a grace period of only 24 months before the loss of voting rights or the wider publicizing of the lateness of payment by some Member States. But punitive measures for late payment and even incentives for early payment would be effective and credible only if approved by consensus. In this respect, Australia believes that incentives for early payment, including the possibility of discounts, rather than sanctions for late payment, unless it is so late as to trigger Article 19, should be pursued. It is unfortunate that these measures should have to be considered. The problem would not arise if Member States were to meet fully their obligations under the Charter. The second issue that needs to be addressed is the manner in which the General Assembly approves expenditure. The Secretariat, the Advisory Committee on Administrative and Budgetary Questions and the Fifth Committee all need to review their working methods to ensure that the General Assembly is able to take timely and well-considered decisions on financing, especially in the area of peace-keeping. In particular, there must be predictability in the approval of budgets, and we must get away from the vicious cycle of retroactive budget approval and the accompanying habit of authorizing the commitment of funds without providing the Secretary-General with the necessary means. The process of reform has begun with discussion of the Secretary-General’s proposal for a The third issue that needs to be addressed is what constitutes a Member State’s fair share of the expenses of the Organization. Australia has long argued that the General Assembly needs to develop a simple and transparent methodology that produces a regular budget scale reflecting national capacity to pay. The only element that can be considered a transparent, equitable measure of capacity to pay is national income. All other elements tend simply to distort that principle. It is also time to look again at the scale of apportionment of expenses for peace-keeping operations. As the Assembly is reminded each time it adopts a resolution financing a peace-keeping operation, the current scale of apportionment is an ad hoc one developed in 1973. Certain principles of the current ad hoc scale should remain. The scale should bear some relation to the regular budget scale itself. There should be a premium on those permanent members of the Security Council that bear a special responsibility for international peace and security, and the benefits of that premium should be extended to those Member States least able to pay. But in view of world economic growth since 1973 — in particular, the relative decline in the share of that growth of the countries of the Organization for Economic Cooperation and Development — all other elements of the ad hoc scale should be reconsidered. In conclusion, I want to assure the Assembly that Australia stands ready to contribute to the discussion and resolution of these issues at the earliest opportunity. We must act now to ensure that the fiftieth anniversary of this Organization is an occasion of celebration and renewal and not of despair at our inability to find answers to the financial problems that now exist.

I am speaking on behalf of Estonia, Lithuania and my own country, Latvia. I should like to thank the Secretary-General for his comprehensive report on the state of the United Nations and for his stewardship of the Organization during a time of expansion and consolidation of its activities. On 7 November 1994, when the Prime Minister of Latvia addressed the Assembly on behalf of the three Baltic States, he thanked the Secretary-General for his constructive contributions in the area of preventive diplomacy. As we believe that the common interest of Member States in the welfare of the United Nations is best discerned in the long The three delegations for which I speak wish to bring to the attention of the General Assembly certain facts regarding the financial situation of the Organization. At the end of the past month Member States owed slightly more than $2 billion to the United Nations. More than 40 per cent of this amount was owed by a group of 22 Member States — the Baltic States, the countries of the Commonwealth of Independent States and States previously belonging to the former Czechoslovakia and the former Yugoslavia — first identified in the 1993 report of the Committee on Contributions. This group of States is responsible for nearly half of the outstanding contributions for peace-keeping operations, and 16 of the 30 highest-ranking Member States featuring in a list of outstanding contributions to the regular budget belong to it. In paragraph 3 of resolution 48/223 B the General Assembly has recognized that the current assessment of each of the 22 Member States for the regular budget is problematic. The General Assembly has approved the conclusion of the Committee on Contributions that the current rates for the 22 are transitional and will require considerable adjustment. In the case of these 22 States, the General Assembly may at its current session decide, for the years 1995-1997, regular budget assessment rates that, for most of them, would continue to be at least double the capacity-to-pay rates established by the Committee on Contributions. Thus their rates would continue to be of a transitional nature for another three years. We believe that this long-standing situation of these 22 Member States is one of several reasons for the fact, as noted by the Secretary-General, that Member States have doubts about the fairness of the arrangements for sharing the Organization’s expenses. The unfair situation faced by the 22 must be addressed if the financial crisis of the United Nations is to be resolved. With regard to late payments we note, first of all, that the obligation to pay in full and on time and the right to be assessed equitably both follow from the principle of sovereign equality, found in Article 2, paragraph 1, of the Charter. Secondly, we do not believe that the Secretariat or the General Assembly should make it difficult or impossible for Member States to pay in full and on time. A systematic and unbiased study of the reasons for non- payment or late payment could be a good place to start designing an improved system for the collection of contributions. Regarding the cash-flow problem, we believe that the proper exercise of the authority granted to the General Assembly under Article 17, paragraphs 1 and 2, of the Charter requires that the Assembly do its best to follow budget approval and apportionment procedures that do not contribute to cash-flow problems. We hope that the negotiations currently under way in the Fifth Committee will go a long way towards removing this cause of cash- flow problems in the financing of peace-keeping operations through simplification and standardization. Reform of assessment methodology is necessary, first of all, in order to respect the right of Member States to be assessed equitably. In addition, assessment, like a good taxation system, needs to be transparent, efficient and simple to administer. Assessment methodology for the regular and peace-keeping budgets should be designed for maximum possible fairness and equity through the incorporation of only those elements that are based on capacity to pay, observance of full horizontal and vertical equity, verification that data are comparable and reliable The delegations of Estonia, Latvia and Lithuania stand ready to cooperate with other delegations in searching for viable and long-lasting answers to the financial problems of the United Nations.

The Russian delegation listened to and studied with great attention the Secretary-General’s statement on ensuring a viable financial basis for the Organization. In our view, it was a very timely statement prompted by the need to provide the resources necessary to fulfil the new and changing functions of the United Nations. We share the Secretary-General’s concern about the unstable financial situation of the Organization. We, too, think this is an urgent political question, and we agree with his conclusions about the causes of this situation. Primary among these causes is, indeed, the late and incomplete payment by Member States of their assessed contributions. While fully aware that Member States may have their own spending priorities and varying financial circumstances, we are firmly convinced that political will is needed if we are to have a United Nations that is viable and effective in solving the problems facing the international community. Russia, for its part, despite its well-known economic and financial difficulties is doing its utmost to honour in full its financial obligations to the United Nations and to pay its arrears. This year alone we have paid over $320 million into the regular budget and for peace-keeping operations, and the amount of our payments next year is not expected to be any less. It is clear, however, that political will must be placed within proper context. In this regard, the problem of late or incomplete payments should be seen not only as a cause of the difficult financial situation of the United Nations but also as a consequence of the inequitable apportionment of its expenses. We fully concur with the Secretary-General’s opinion that Unfortunately, the present arrangements can by no means be considered fair. Is it fair that the principle of States’ capacity to pay, which is the fundamental criterion of the apportionment of expenses, is undermined and obscured? Is it fair that some well-to-do countries should be underpaying at the expense of those facing serious economic hardships? We are firmly convinced that the unfair methods of assessment, both for the regular budget and for peace- keeping operations, are the root cause of the Organization’s financial difficulties. Full and timely payment of contributions can be expected only when they are assessed on a fair basis. Otherwise, neither penalties nor incentives will be of any help. Fair apportionment of the Organization’s expenses is where we should start tackling the overall problem of United Nations financial difficulties. Under these circumstances, and taking into account the political nature of the question, we feel it would be appropriate to establish a high-level open-ended working group of the plenary, under the chairmanship of the President of the General Assembly, to study this matter in depth and to prepare recommendations before the end of the forty-ninth session of the General Assembly. We believe the proposed working group should make full use of the knowledge and expertise of the Fifth Committee, as well as that of the Advisory Committee on Administrative and Budgetary Questions. It is very important that from the very outset the proposed group be given a clear-cut mandate. In conclusion, I would like to note that the Secretary- General’s statement and the annex to it, although not all the ideas contained therein are acceptable to us, represent a good initial basis for considering the issue of ensuring a viable financial basis for the Organization. If we can agree to create the working group of the whole, we intend to make full use of this excellent basis to achieve further progress.

As we approach the fiftieth anniversary of the founding of the United Nations, we have been taking a look at our Organization’s methods, at its priorities, at its programmes and systems that have evolved over the years in response to the challenges of global development and of international peace and security. We have dwelt on these issues during the general debate. All of us have spoken about a new vision for the United Nations and a new commitment to it by the international community as we move into a new century. In the overall scheme of The Secretary-General, in his annual report on the work of the Organization (A/49/1), and again in his statement to the General Assembly on 12 October, has underlined the serious financial problems that we are confronting. We all share his view that without an adequate and secure source of funds the United Nations will not be able to fulfil the aspirations that we all have for it. It is widely recognized, and this is also acknowledged in the Secretary-General’s report, that the current cash-flow problems of the Organization arise principally out of the continued failure of some Member States to fulfil their Charter obligations to pay their assessed contributions in full and on time. As a consequence, at the end of August 1994 the outstanding amounts owed to the regular budget and various peace- keeping operations stood at a staggering $3.3 billion. Today, despite some improvement in the situation, the figure still stands at $2.1 billion. For an organization that is dependent solely on the contributions of its Member States for the resources to discharge its mandated programmes and activities, late payments are, and will always remain, the major obstacle to ensuring a stable and secure capital base. There are quite a few instances where contributions are delayed because Member States are unable to make payments for genuine economic reasons. We need to show understanding in such situations. As we approach the fiftieth anniversary, let us make a gesture of commitment to the future of our Organization by pledging to clear all our outstanding dues before that historic occasion. In this task we look towards the major contributors to take the lead so that the financial health of the United Nations is speedily restored. Efforts to work out arrangements to ensure that such problems are avoided in the future must necessarily form a part of this exercise. Various proposals have been mooted from time to time on how we can ensure full and timely payment of dues to the United Nations. Proposals that would encourage us to do so, preferably through a system of incentives, need to be explored further. If necessary, carefully crafted proposals for disincentives should also be examined, always bearing in mind the need to balance such disincentives with sufficient flexibility with regard to their application so that injustice is not done to those who may temporarily face difficulties in For several of us there is another dimension to the financial problems of the Organization. Like other troop- contributing countries, we in India have felt the impact of the current cash- flow problems through facing long delays in obtaining troop- reimbursement costs. We know that the large majority of countries recognize and appreciate the forbearance shown by the troop contributors in accepting these delays. During the course of our deliberations, we hope that we can consider ways in which priority could be given to the reimbursement of troop costs, especially to developing countries, which regularly provide troops for United Nations peace-keeping operations. The Secretary-General has made certain proposals to solve the cash-flow problems. Increasing the level of the Working Capital Fund and Peace-keeping Reserve Fund is one of them. There is a need to engage in a frank and constructive dialogue with the Secretariat on all such proposals. But unless a practical solution is found to the larger question of how we can ensure payment of all dues in full and on time, proposals such as the replenishment of the Working Capital Fund and peace-keeping reserves would not constitute a fundamental solution to the financial problems of the United Nations. Such funds would again be rapidly exhausted through borrowings. We would essentially be shifting the consequences of the arrears onto those Member States which have paid in full and on time. We have also taken note of the Secretary-General’s view that reform of the existing budgetary procedures is one possible way of facilitating a viable solution to the cash-flow problems. It is our understanding that the Fifth Committee, which is the General Assembly’s Main Committee on budgetary matters, is fully seized of these broader financial issues and intends to discuss them in the context of agenda item 132. Since a comprehensive review of budgetary procedures will be undertaken in that Committee, we could await the outcome of its deliberations. In his statement to the General Assembly on 12 October the Secretary-General also made a reference to the need for a review of the current method of assessments as one element in a possible review of the financial issues before us. Such an appeal was made on the plea that the current methodology is in some way directly responsible for the present unsatisfactory financial situation in which the Organization finds itself today. However, if all the current and outstanding dues were paid by Member States to the For that reason, we believe that any review of the methodology for the regular-budget activities must be based on the principle of capacity to pay, which has been accepted as the fundamental criterion for assessing Member States over the last half-century. While the national income of a country is the starting point for determining its capacity to pay, such factors as its per capita income, its external-debt burden and its ability to pay in foreign currency are critical in more precisely reflecting this principle. These important elements which determine a country’s ability to pay must not be sacrificed in the course of our seeking greater transparency in the methodology. Similarly, the proposals for annual revisions of the scale of contributions must be balanced against the stability and continuity that are provided by the current three-year scale period. We believe that, with respect to the apportionment of peace-keeping costs, the special responsibilities of the permanent members of the Security Council and the fact that the economically developed countries are in a position to make relatively larger contributions, while economically less-developed countries have a relatively limited capacity to pay, remain valid. We also believe that the generally accepted premise for financing peace- keeping on the basis of procedures different from those used for regular activities, so that the heavy expenditure that is involved will not become a burden on the developing countries, continues to be relevant today, when the costs of peace-keeping are higher than ever before. We further believe that the guidelines and practices established for the apportionment of peace- keeping expenses have stood the test of time, and that the ad hoc scales represent a delicate balance that now needs to be institutionalized. When we consider the financial problems of the United Nations we should not lose sight of the fact that there is an equally serious crisis in the funding of the Organization’s operational activities. Many pledges have been made of new and additional resources for development, but, as the Secretary General has noted, the resources for development have been dwindling. We hope that the current consultations the President has initiated on the funding of operational activities will lead to the My delegation can look at all the issues. Given the urgency of the matter and the desire of the Secretary- General to address them at a high political level, we have engaged today in the debate in the General Assembly. We shall be happy to participate in the high-level Working Group, under the chairmanship of the President of the Assembly, with an open mind and sensitivity to all points of view. Our first objective must be to work on arrangements that will lead to the clearing of the financial backlog and to the smooth flow of funds in the future. Lastly, given the complexity of the issues involved, it is our sincere hope that the final decisions will be arrived at on the basis of the broadest possible agreement and in full consultation with all Member States.

A discussion of the financial situation of the United Nations is in effect a discussion of the Organization’s ability and capacity to perform its work. The Organization’s work, as comprehensively presented in the report of the Secretary- General in document A/49/1, has increased tremendously in the past few years. It has also become extremely expensive, particularly in the area of peace-keeping operations. Regrettably, the contributions of Member States have not been paid in a timely manner, thus placing the financial viability of the Organization in serious jeopardy. The Secretary-General made an earnest and convincing appeal on 12 October 1994 to Member States, urging them to meet their financial obligations to the United Nations. I am pleased to say that my Government heeded this appeal, albeit in a small way, and despite its own severe financial problems made a contribution of $115,000, which substantially reduced its arrears. My Government places a high premium on the work of the United Nations in development and agrees completely with the Secretary-General’s vision that this will be the primary mission of the Organization in the next 50 years. Only if financial resources are available can the United Nations as a whole play its extremely important and expanding role in development. My Government considers any impasse in the resolution of the financial situation of the United Nations to be full of dangers because — and this is recognized — its role in peace-keeping is irreplaceable and its role in development will contribute directly to the maintenance of international peace and security. It is therefore imperative As a least-developed and landlocked Member State of this Organization, my country appreciates the positive and supportive views which have been expressed in this Assembly in this regard, particularly the statement of the representative of the United States that his Government believes that and, among others, the statement of the European Union that the assessment of contributions should take into account Member States’ capacity to pay. Finally, it is the strong belief of my Government that it is incumbent upon all States Member of the United Nations to reverse the situation which unavoidably led to the conclusion by the Secretary-General in his report “that full and responsible participation in the United Nations is not a top priority on the agendas of most Member States.” (A/49/1, para. 793) At this stage of its existence, with the demise of the cold war and faced with some of the most daunting challenges the world has ever witnessed, the United Nations deserves unambiguous political commitment from Member States.

At the outset, I should like on behalf of my delegation to thank the President for having brought us together in this Hall to express our views on our Organization’s current difficult financial situation. We are equally grateful for his efforts to initiate this dialogue, to which my delegation attaches great importance. I should also like through him to thank the Secretary-General for the timely and clear statement he made to the Assembly on 12 October on the financial status of the United Nations. The Argentine Republic supports his initiative and joins in his appeal to us to act in concert, with an urgency commensurate with the Almost 40 years ago, when this Organization was still young, a study group on the United Nations Charter said that: “Financing the United Nations is somewhat like the effort to provide for a large family on very modest resources. Some family plans may be delayed or abandoned, while some of the available resources may end up being wasted, relatively speaking. It is difficult to ensure that every member of the family bears his share of the responsibility and there is a constant concern to make sure that resources and needs are in balance. It is often claimed that the question of the right of veto is the most difficult one facing the United Nations. But, in fact, the question of resources, which are the life blood of any organization, has proved to be, though less spectacular, just as difficult and in some ways even more complex than the discussion on the right of veto itself.” Many years have passed since then, and little — very little — seems to have changed. What is disquieting is that this problem which, unfortunately, appears to have become chronic — if not to say inevitable — is no longer tolerable now that it has grown significantly and reached such a scale that the very efficiency of the Organization and its operations are at stake. For this reason, solving this problem involves the very credibility of the Organization and presents the possibility of demonstrating what is the real degree of Member States’ commitment to it. But there is also the urgent need to restore confidence in its operations — confidence which has been visibly eroded by the manifest lack of the basic vital resources required in order for it to meet its responsibilities, including those relating to international peace and security. As we know, once the cold war ended, the United Nations regained the possibility of making full use of the machinery designed by the founding fathers on the basis of the agreements articulated at San Francisco. The challenge of endowing the United Nations with the resources without which it cannot do its work is therefore tremendous, and there is no room for delays or evasions which would only serve to suggest a lack of belief in the central and basic idea that the world which cherishes the ideals of peace requires the United Nations. Now, more than ever before, Member States are facing the responsibility of making every effort, at the appropriate political level, to reach a consensus solution on the financial crisis plaguing the Organization. This is not the time for delaying tactics or discussions, let alone procedural manoeuvring. In any event it is time to respond to the pressing exigencies of the situation. It is the time for solidarity and, what is more, for careful thought followed by prompt action. There has been so much talk about the financial crisis that it has even been said that it does not really exist. The real state of affairs is quite different. The Organization’s expenditures are now clearly different from what they traditionally used to be, and Member States owe it so much that it can even be said that expenses for two entire regular budgets are outstanding and unpaid and that contributions to peace-keeping operations are also significantly in arrears. The situation is that serious. The magnitude of the crisis needs no further explanation. What has been emphasized by the Secretary- General is sufficient for my delegation. The enormous accumulated debt is eloquent testimony of the crisis and of the resulting imbalances. For example, it seems bizarre to witness over a period of time the rare spectacle of the troop-contributing countries financing many other countries, including some of the largest, but this is in fact what is happening. The crisis is generating all kinds of operational disturbances, including mistrust, disorder, frustration, breaches of financial rules dictated by events and emergencies, failure to fulfil targets, lack of incentives, Reducing arrears is a shared priority, and it must be accomplished without further delay. No one could suggest that arrears are useful levers to maintain in order in one way or another to put pressure on the Organization to adopt a line of conduct favoured by the very Member in default. But neither can it be maintained that the best course in an emergency is to prevent or delay discussion. We need to make the point again, however obvious it may be, that there can be no effective functioning of the Organization without Member States fulfilling their financial responsibilities in accordance with the very clear obligations under the Charter. If these responsibilities are not met, the current situation will continue; hence the financial crises of the United Nations will become cyclical and the shortage of funds will constantly militate against the normal development of the Organization’s operations. At the appropriate political level, it is essential to study the various reasons which apparently cause certain Member States to fall into a pattern of late payments which, from the collective standpoint, has become unacceptable since it is not consonant with the responsibilities these Members undertook vis-à-vis the rest of the membership. As we see it, there are many measures that could be discussed and adopted. Some of them have already been described by the Secretary-General in documents presented to the General Assembly, and my delegation supported them. If adopted, they would help to improve the Organization’s economic situation. All of them should be examined to determine whether or not they should be adopted. For example, we hope that the preparation of annual budgets for each of the various peace-keeping operations will help to reduce the work of production, analysis and documentation control and also permit Member States better to programme the payment of their contributions, thus helping to improve the Organization’s cash flow. We also hope that there will be a more restrictive interpretation of Article 19 of the Charter, one more in accord with its spirit and with the needs of the Organization. My delegation has no difficulty in proceeding with a study of the whole set of mechanisms intended to My delegation takes the view — and here we fully concur with the Secretary-General — that, because of their importance, we need to scrutinize these matters at the highest possible political level without delay, in order to ensure that Member States recognize that the measures to be taken in this area are fair and equitable when decisions are taken to apportion the Organization’s expenses. It is clear that dialogue is enriched when there are differences of opinion — and to be afraid of them is unthinkable. Further, we believe that, generally speaking, there is no single truth, no single option and no single response, but that it is our duty promptly and in a balanced and fair way to seek global solutions that represent the basic common denominator enabling us to provide a prompt solution to the crisis. This must be accomplished without becoming either bogged down in argument or evading dialogue, or pushing issues in the direction of forums that do not operate in the decisive framework the question requires and that, in addition, are notoriously overburdened with their own agendas. It should be done without being excessively wedded, for short-term reasons, to formulae that rely too much on the past, as has been advocated by some delegations. For example, the contribution formula with the adjustments that have been built up over the years must now cope with an expenditure structure which is very different from that of the past, in particular financing of peace-keeping operations. But we must also not be hasty or leap in the dark; and in no way should we generate inequities. My delegation stated in the Group of 77 that it viewed the setting up of an open-ended working group at the highest possible level within the General Assembly itself as the right political response that would contribute to productive dialogue designed to find the serious and lasting political solutions the Organization needs. In our view, the group should have a sufficiently broad mandate to permit all its members to analyse in depth issues of interest to them. Furthermore, their conclusions should be adopted by consensus while taking care to ensure that that mechanism is not a substitute for the veto or a kind of strait-jacket which would impede the taking of decisions which would be consonant with the spirit and letter of the Charter. Once the decisions of a political nature have been taken by that group, as we hope will be the case, they would presumably have to be implemented in detail and on a technical basis within the Fifth Committee. Without prejudice to what I have just said, I would like to indicate that as far as our delegation is concerned the most important point is that the elements of the financial crisis and not just the question of arrears should be given urgent and comprehensive treatment. This should be done with a view to reaching agreement on appropriate solutions, with a view to ensuring their durability. Should the General Assembly decide to follow another course, we would like to state that, notwithstanding our possible disagreement with the procedure, and our uneasiness at what would amount to rejecting, for reasons we cannot share, the open and frank dialogue — and at the appropriate level — called for by the situation, we will go along with the consensus and, of course, continue to work on this matter realistically and without shirking our responsibilities, as we have done thus far.

Allow me at the outset to express my delegation’s support for the statement made by the representative of Algeria on behalf of the Group of 77 and China. The political sensitivity of the issue before us is obvious. However, we are holding this discussion in the midst of confusion over content and procedural issues. At the beginning of this forty-ninth session, the General Assembly adopted its agenda and the allocation of items between the plenary Assembly and the Main Committees. In this exercise, the General Assembly decided to assign item 109 — entitled “Improving the financial situation of the United Nations” — to the Fifth Committee. None the less, an attempt has been made to force Member States to debate and negotiate this entire subject under item 10, entitled “Report of the Secretary-General on the work of the Organization”, which has never been the basis for discussing and adopting decisions on any of its sections that are covered by other agenda items, let alone when the issue in question has been assigned to one of the Main Committees, as in this case. Needless to say, the General Assembly comprises the Assembly itself meeting in plenary meetings and its Main Committees; consequently, the Fifth Committee is also the General Assembly. Why, then, is there such insistence on depriving the Fifth Committee of its functions? The General Assembly’s “Items relating to the same category of subjects shall be referred to the committee or committees dealing with that category of subjects”. Is this an attempt indirectly to amend the rules of procedure of the General Assembly? Accepting to debate and negotiate this important issue under item 10 would create a serious precedent, for, in the future, no item would be exempted from being discussed in the plenary Assembly and the allocation of the work among the committees could be called into question. Should the item in question differ substantially from the content of item 109, the provisions of rules 18, 19 and 20 of the rules of procedure of the General Assembly would be applicable, particularly the submission of an explanatory memorandum. We hope that the President and the Secretary-General will maintain the procedures and practices of the General Assembly. If the intention is to approach this matter from a political angle — a suggestion which, by the way, is shared by my delegation — then it is unacceptable that the debate should be restricted only to financial aspects; and instead, its scope should be broadened. In 1985, the General Assembly created the Group of High-level Intergovernmental Experts to Review the Efficiency of the Administrative and Financial Functioning of the United Nations — the Group of 18. Based on the results of its work, the General Assembly adopted resolution 41/213 by virtue of which, inter alia, a new budgetary process was established. The basic aim of the major contributor was to achieve the introduction of the consensus rule for the adoption of budgetary decisions and, to this end, it resorted to financial blackmail through the infamous Kassebaum Amendment. The political solution reached on that occasion was based on the commitment to make every possible effort to reach a wide-ranging agreement on budgetary questions, while the major contributor committed itself to pay contributions on time and, consequently, to abandon its policy of financial pressure. From that moment on, the other Member States have endeavoured to arrive at consensual decisions. In truth, the major contributor more than just reached its goal, because from that moment on not only the budgetary items but also all items related to administrative and budgetary questions have been adopted In reality, the so-called “financial crisis” of the Organization is nothing more than a euphemism in an endeavour to conceal the persistence of the attempts by the major contributor to control the work of the Organization, in pursuit of which it continues to implement its policy of financial blackmail. My delegation is ready to initiate a serious and thorough political debate on the financial situation of the Organization on the basis of certain principles and understandings, among which, in the view of my delegation, should be included: first, respect for the mandates and procedures of the Fifth Committee and expert bodies in the administrative and budgetary fields, especially the Committee on Contributions; secondly, non-restriction of the item to strictly financial matters and initiation of discussion of the rights and duties of Member States, especially the privileges and extraordinary powers of the permanent members of the Security Council; and thirdly, acceptance of the principle that the developed countries are in better economic conditions to make financial contributions to the Organization. It is unfair and irritating that all Member States should have to contribute, on an equal basis, to the financing of peace-keeping operations that have been conceived by a Security Council that is controlled by a small group of Member States, some of which subsequently abandon the operations and refuse to pay the corresponding contributions. On the contrary, my delegation is convinced that it is high time for the General Assembly to institutionalize the special scale for the financing of peace- keeping operations as a minimal gesture towards alleviating the yoke of the discrimination suffered by the vast majority of Member States which, by virtue of the practices of the Security Council, are deprived of direct or indirect participation in the decision-making process in areas of such importance as those related to peace-keeping and international security. When the Security Council becomes a democratic organ, with transparent procedures and practices for the membership of the United Nations, my country will be in a position to contribute more actively to the financing of peace-keeping operations. We share the view that one of the causes of the precarious financial situation is late payment by some It seems to us improper to state that the restructuring of the scale of assessment should be based on objective criteria, when the decisions adopted by the General Assembly on the basis of recommendations made by such a reputable expert body as the Committee on Contributions are called into question. The majority of the proposals before us are not new, and the General Assembly has already taken a stand on them. When this item is dealt with by the Fifth Committee, as the only appropriate forum for such a discussion, my delegation will formulate specific comments on these proposals or others put forward by Member States.

The delegation of Chile fully shares the concern about the difficult financial situation of the United Nations expressed by the Secretary-General in his statement at the close of the general debate, on 12 October; we also agree with him that there is a need to re-establish a viable financial base for the Organization to continue its work in the service of Member States. We are a member of the Group of 77, and agree with the statement made this morning by the Permanent Representative of Algeria on behalf of the Group and China that it must be admitted that although we have collectively recognized the problems we have not acted accordingly. It is ironic that at a time when Members are assigning greater and more complex responsibilities to the Organization, and expecting them to be fulfilled, the United Nations is not receiving the payments that Member States themselves have approved in the competent bodies; this makes it difficult to carry out the work of an administration that we want to be effective and efficient. Can the United Nations continue in the present international circumstances, which are so auspicious for peace and economic and social development, to expand its activities without the necessary support and in the face of a financial uncertainty that sometimes prevents it from meeting its daily needs? How much longer, and at what cost, can the In my country’s view, timely and unconditional payment by Member States of their assessments is unquestionably the only valid way to resolve this financial situation, which has become endemic and which is clearly growing worse because of the staggering increase in peace- keeping operations. We understand that some countries may be unable to fulfil their commitments on time. But, at the same time, we fail to understand why States with the means are reluctant to pay. In our view, any effort to improve the efficiency of the Organization must involve the Secretariat’s adapting to the prevailing realities and responding rapidly to its growing responsibilities. But it must also involve a clear and concrete expression of the political will of Member States to provide the Secretariat with the resources it needs. In that connection, while my delegation is flexible about the machinery that would best serve the common goal of finding measures to resolve this serious crisis, we agree that the best thing would be to establish an open-ended working group in the context of the Assembly’s technical functions. My delegation thinks that the Assembly must above all be pragmatic; it is in that spirit that we should examine the content and scope of all proposals made in this forum, so that, after we have all reflected on the matter, we can proceed to negotiate and define, by consensus, the universally applicable measures that we must adopt. In that connection, this report the Secretary-General submitted to this General Assembly session on the work of the Organization and other relevant documents contain ideas that the Secretariat could organize in a simple, direct way that could point the way for the work of delegations. By way of example, I shall mention several elements that my delegation considers worthy of study. We believe that charging interest on late payments could be a useful deterrent to future arrears. It would, of course, be necessary to study the causes of the problem, and in certain cases involving socio-economic factors there would have to be exceptions and perhaps payment agreements. The proposal to increase the levels of the Working Capital Fund and the peace-keeping reserves deserves careful study. But we believe it can be considered only on With respect to the financing of peace-keeping, my delegation considers that the special ad hoc scale of assessments established by resolution 3101 (XXVIII) should be institutionalized, in the context of activities involving collective responsibilities, but activities differentiated according to existing privileges and responsibilities within the United Nations system. The annual report of the Secretary-General contains important elements which are heartening with respect to the future functioning of the Organization and which will ultimately help establish a better financial situation. The new structure of the Department of Administration and Management and the creation of the Office of Internal Oversight Services will assist the Secretary-General in this respect by giving United Nations activities greater flexibility while also facilitating better use of resources and increasing the confidence of Member States. As we have said on a number of occasions on this subject, we want to support and facilitate the work of the Secretary-General. We are aware of the diversity of the interests represented here and of the need to find generally acceptable agreements to resolve the current financial crisis. In that context, the ad hoc working group must be given the time it needs to achieve its objectives. It would therefore be appropriate to concentrate on aspects on which consensus could be achieved quickly, while identifying others that would require longer consideration and a dialogue with Foreign Ministries.

First of all, I should like to express my sincere appreciation to the Secretary-General, His Excellency Mr. Boutros Boutros-Ghali, for his 12 October 1994 statement to the General Assembly on ensuring a viable financial base for the United Nations. We view this as the logical result of the intensive work which has been carried out in recent years to overcome the critical financial situation of the Organization. Ukraine, like the overwhelming majority of Member States, views the problem raised by the Secretary-General with great attention and concern. In today’s multipolar world, the United Nations is called upon to play an entirely new role in peacemaking and in the maintenance of peace and security. The tasks of the Organization in We fully share the idea that the question of the financial situation of the United Nations and of the system of its financing is no longer a purely financial one. It is an urgent political question. Obviously, no one doubts that — aside from the rational and efficient application of resources — payment by all Member States of their assessed contributions in full and on time is the only long- term solution to the financial constraints of the United Nations. Only with foresight and a willingness on the part of Member States to face up to their responsibilities and commitments can the United Nations become the organization that our times demand. Hence, in order to encourage inflow of contributions in full and on time, it is now being recommended more and more often that authority be given to the United Nations to charge interest on delayed payments, to apply Article 19 of the Charter more strictly, to determine the size of personnel quotas on the basis of actual payments, and to limit the opportunities for debtor States to participate in the work of United Nations bodies. The set of proposals for such penalty measures is, regrettably, growing rapidly. Given the possible attractiveness of such methods, it should be borne in mind in this case that they involve a certain infringement upon the interests of quite a large group of Member States of the Organization for which, due to their considerable economic difficulties, the payment of contributions poses a serious problem. The implementation of such practices would be nothing less than the enforcement of draconian measures against Member States which are experiencing a difficult economic situation. Regrettably, the idea of eliminating the distortions existing in the basic elements of the United Nations financial system — the scale of assessments of contributions of Member States to the regular budget and the system of the apportionment of expenses for the financing of peace-keeping operations — is being viewed more cautiously in the Organization. As a consequence, the The United Nations will not be able to overcome its difficult financial situation unless a fair apportionment of expenses among all Member States is achieved. As was recently stressed from this rostrum by Mr. Leonid Kuchma, the President of Ukraine, In this respect, Ukraine attaches great value to the statement made by the Secretary-General on the subject of ensuring a viable financial base for the Organization. It offers the opportunity for a wider discussion of this particular problem at the political level. We support the establishment of an open-ended high-level working group under the chairmanship of the President of the General Assembly. It is our hope that the results of its activity will enable the United Nations to reach the fiftieth anniversary of its founding as a renewed and energetically developing Organization adapted to the realities of the contemporary world. Obviously, the system of the apportionment of contributions among Member States for the financing of United Nations activities, including peace-keeping operations, should undergo a certain transformation. Having said this, we have no intention whatever to propose a needless review of the basic principles of the apportionment of United Nations expenses. Ukraine shares the view that the States that are permanent members of the Security Council should not simply enjoy special rights in the Organization: they should also bear special responsibility for implementation of peace-keeping activities. However, confidence in the mechanism by which the expenses of the United Nations are divided among all Member States should be restored through their joint efforts. Over recent years, Ukraine has taken active steps within the framework of the United Nations to obtain a rate of assessments that would be in line with its capacity to pay. To a considerable extent, such steps have been The forced imposition of assessment rates on Ukraine and a number of other Member States that had been subjects of the former USSR undermined the existing spirit of consensus on the apportionment of United Nations expenses. Decision 47/456, adopted by a vote of the General Assembly two years ago, cannot be considered either fair or properly grounded in law. Criticism of its erroneous nature is being increasingly heard. The rate of assessments established pursuant to decision 47/456 is unacceptable to my country. It bears no relation to the capacity to pay of a State whose economy has been experiencing a protracted grave economic crisis, and it will result in rapidly growing indebtedness to the United Nations. At the same time, for no good reason Ukraine remains in group “B” of the scheme of the apportionment of the expenses for the financing of the peace-keeping operations, despite its numerous requests to the General Assembly for relocation into group “C”. For Ukraine, the problem of bringing its financial obligations to the United Nations into line with its real capacity to pay has gone beyond the administrative and budgetary framework. The excessive size of its contribution has now become an obstacle to our State’s full-fledged membership in this Organization. This fact can neither be avoided nor hushed up. We should like all Member States to be aware that the settlement of the problem of the excessive nature of Ukraine’s assessment is an acute political issue to be addressed as a whole by the United Nations. We are often told that Ukraine has become a hostage of the dated system of the apportionment of United Nations expenses. Therefore it is deemed impossible to establish immediately a fair rate of assessment for our country. To a certain extent, this idea is not far from reality. However, we have become more and more convinced that the major reason for retaining the “Ukrainian phenomenon” in the scale of assessments of the United Nations is the absence of political will among the Member States to resolve this By ratifying the Treaty on the Non-Proliferation of Nuclear Weapons Ukraine has confirmed that our country is a responsible member of the international community. Implementation of the provisions of the Treaty will be very expensive for Ukraine. The United Nations should not ignore this fact. Solving the problem of Ukraine’s excessive United Nations assessment, and changing its level of participation in financing peace-keeping operations, cannot be endlessly deferred. We hope that our country’s financial burden resulting from its membership of the United Nations will be adjusted, at the current session, in line with its capacity to pay. This is the basis for Ukraine’s position on recommendations with respect to the scale of assessments for the next three years.

Allow me, Sir, to express my delegation’s appreciation to you for convening this general debate on the financial situation of the United Nations. The fact that we are holding this debate in plenary meeting attests to the paramount importance of the issue. We therefore welcome this opportunity to present our views on this matter. Before I proceed, I should also like to express our appreciation to the Permanent Representative of Algeria for his statement on behalf of the Group of 77 and China, with which my delegation fully agrees. The Secretary-General has on several occasions this year and in the past drawn our attention to the increasing seriousness of the financial situation of the Organization. This is not the first time that our Organization has been faced with a cash-flow problem. It will be recalled that in resolution 41/213 the Assembly reaffirmed the collective responsibility of all Member States to fulfil their financial obligations promptly and in full, in accordance with the “the detrimental effect of the withholding of assessed contributions on the administrative and financial functioning of the United Nations”. And in the next preambular paragraph we recognized the adverse effects of late payments on the short-term financial situation of the Organization. Yet, despite these stated principles and a collective recognition of the problem, the situation remains far from satisfactory. It is regrettable to note that as of 30 November 1994 the unpaid obligatory contributions of Member States amounted to $2 billion, $1.5 billion of which was for peace-keeping operations. It should be noted that the arrears of the major contributors represented a large proportion of this amount. We believe that the current financial situation is further exacerbated by the unprecedented increase in the number, cost, scope and complexity of peace-keeping operations. As the Secretary-General stated in his report contained in document A/48/945, such field missions have increased from eight in mid-1990, with an estimated annual budget of $600 million, to 29, at approximately over $3 billion this year. This is three times more than we Member States spend for the regular budget. We hope to see the same level of resources accorded to development activities and issues. The 17 peace-keeping operations in the last five years have strained the limited resources of the developing countries and have made it difficult for them to effect the timely payment of their dues to the United Nations. The proposals of the Secretary-General, as well as the recommendations of the Advisory Committee on Administrative and Budgetary Questions for the more effective planning, budgeting and administration of peace- keeping operations, are currently under consideration and review by the Fifth Committee, which, hopefully, will lead to an improved process of collection and payment of Member States of their assessed contributions. But, however noble our efforts may be in enhancing the efficiency and cost-effectiveness of the Organization to enable it to respond more adequately to the mandates entrusted to it, they will not meet with great success if the United Nations continuously remains in financial straits. We believe that if Member States, especially the major contributors, paid their outstanding dues this would greatly alleviate the cash-flow problem of the Organization. This Greater understanding should be given to those that consistently meet their financial obligations in full, but are unable to do so on time, not because of lack of political will on their part, but largely due to legitimate economic difficulties and internal budgetary processes. But we find it difficult to understand those that for other reasons fail to honour their Charter obligations. In the interest of sustaining our Organization, we therefore join others in appealing to them to meet their obligatory contributions in full, on time and unconditionally. We share the concerns of those delegations that have expressed serious reservations on the suggestion of a linkage between the current financial difficulties and the method of assessing Member States. The General Assembly has, time and again, recognized that the principle of “capacity to pay” is the fundamental criterion in determining the scale of assessments for the apportionment of the expenses of the United Nations. At the fiftieth session we shall have before us the reports of the intergovernmental working group of experts in the fields of finance, economics, statistics and other related fields on the implementation of this principle, and of the Committee on Contributions on its comprehensive review of all aspects of the scale methodology. In our view, it would be prudent for us to await the results of both studies. We believe, however, that the current method of assessment, based on the principle of “capacity to pay”, is the result of our collective experience and understanding, which has carefully taken into account economic and political considerations. We further believe that the concerns of Member States, particularly the developing countries with low per-capita income and high external debt, as well as limited ability to secure foreign currency, should continue to be important elements of the scale methodology, as these affect one’s capacity to pay. In the case of the peace-keeping special scale, it is our view that the principles underlying resolution 3101 (XXVIII) of 1973, which recognized the special responsibility of the permanent members of the Security Council and the limited capacity of developing countries, remain valid today and should therefore continue to govern the apportionment of peace-keeping expenses.

At a meeting of the General Assembly on 12 October 1994 the Secretary- General made a statement on the long-standing difficult financial situation faced by the United Nations. He put forward a broad range of possible ways to ensure a viable financial basis for the Organization. The message was clear. We believe that there is no time for delay and that Member States must find an appropriate mechanism for discussion of all aspects of the financial situation of the United Nations. My delegation shares the basic assumptions that the Member States have a collective responsibility for the performance and well-being of the United Nations and that each Member State must adhere to treaty obligations assumed with ratification of the Charter. The Governments of the Member States should take measures to improve the performance of the United Nations in general and, in particular, to give it a sound financial base. On the other hand, we have to admit that proper financing will not, by itself, solve all the Organization’s problems. By no means is the enhancement of the effectiveness and cost-efficiency of the Organization of less importance than its financing. We share the view that the precarious state of the Organization’s financial affairs is due basically to the failure of Member States to pay their assessed contributions in full and on time. Apart from occasional severe economic hardship or natural disasters experienced by some Member States in circumstances of force majeure, there can be no good reason for shortfall in payments. The withholding of payments for political reasons is always unacceptable. All ideas and proposals aimed at addressing the financial problems of the Organization deserve thorough consideration, both separately and collectively. A more expeditious procedure for approving peace- keeping budgets — a subject that is now under discussion in the Fifth Committee — could save months between the Security Council’s approval of operations and the sending of assessments to Member States. The way in which the voluntarily funded agencies are financed must also be given due consideration if the sustainability and predictability that are so necessary in operational activities are to be achieved. Bulgaria pays the utmost attention to issues related to the method of assessing Member States for the regular budget. The system must be brought more into line with States’ actual capacity to pay. In this regard, we should consider the establishment of an assessment scale that is more reliable than the current one and reflects Members’ changing national circumstances much more rapidly. My delegation appreciates the establishment, through General Assembly resolution 49/19, of the ad hoc working group on capacity to pay and is ready to contribute to its work. Aware of the complexity of the issues before us, my delegation would like, in conclusion, to welcome your initiative, Mr. President, in the establishment of an open- ended working group, under your chairmanship, to report to the General Assembly. It is right that the working group should be open-ended, as all measures to be discussed concern the United Nations membership as a whole, and universal participation is therefore advisable. We believe that the consideration of measures to achieve a viable financial basis for the Organization is not just something in the interests of all Member States but also their obligation.

I should like, first, to thank you, Mr. President, for your initiative in convening this important debate. The delegation of the Czech Republic is deeply concerned about the difficult financial situation that in our view is undermining the effective functioning of the United Nations. We are fully aware of the seriousness of the crises and of its causes. We are of the view that lateness in payment by Member States and the loss of equity and credibility in My delegation believes that the United Nations should not tolerate discrepancies between the criteria that it establishes and their implementation. The restoration of a viable financial basis requires, first of all, the establishment of verifiable and equitable criteria based on the capacity of Member States to pay. Methods of assessment could thus be improved and the present distortions eradicated. Such measures would restore equity and credibility and would make consensus possible. The equitable sharing of the Organization’s expenses among Member States on the basis of real capacity to pay should help to achieve consensus in respect of measures to deal with another cause of the precarious financial situation of the Organization. I refer to late payments by many Member States. In the case of the Czech Republic, the assessment rate determined by last year’s ad hoc decision was three times greater than it would have been if it had derived from our statistical data. Because of lack of any objective standard criteria, this has not been taken into account in respect of peace-keeping assessments. Here we have an illustration of the deficiencies of the present system. My delegation welcomes and strongly supports the basic objectives of the Secretary-General’s initiative, as set out in his statement of 12 October 1994, to restore a viable financial basis for the Organization. We are convinced that the problem has assumed such proportions that it can no longer be solved by simple administrative means. The necessary far-reaching decisions on this issue will require consideration at the highest political level. My delegation therefore fully supports the establishment of an open-ended, high-level working group to improve methods of assessment, to resolve cash-flow problems and to take measures to achieve full and timely payment by Member States. Let me conclude, Mr. President, by expressing my delegation’s strong belief that under your able guidance and

We have heard the last speaker in the debate on the financial situation of the Organization, and I must now share with the Assembly some comments inspired by that rich debate. First, it should be noted that the Secretary-General’s statement to the General Assembly on 12 October has received a sizeable response, as evidenced by the fact that 32 delegations spoke. In fact, this number represents many more delegations because one person spoke on behalf of each of three large regional groups. This debate also afforded us an opportunity for a serious analysis of the Organization’s present financial difficulties, and we can say, like the Secretary-General, that this is a financial crisis for the Organization. The elements of this crisis have in large part been reviewed, and so a number of parameters have often been mentioned but in no kind of order — namely, the failure of Member States to pay their contributions on time and in full, as is their obligation under Article 17 of the Charter; the effects of such failure on the reserves of the United Nations — and this because of unsuitable budgetary procedures — and, finally, the question of the scale and methodology of assessments. The roles of these various elements of the crisis have been addressed from each delegation’s viewpoint, so I do not think it is appropriate for me to highlight them here. It may however be noted that all delegations recognize that the situation is complex and worrisome and therefore they call for a study commensurate with the gravity of the crisis. In fact, as the Secretary-General said, it is no longer simply a financial question, but also an urgent political question, and I, as President of the Assembly, share that conviction. Any solution envisaged for dealing with this issue should take into account both the technical aspects and the political underpinnings of the crisis. That is why this matter deserves to be studied at the highest political level. The aim we all share in this exercise is to succeed in ensuring a viable financial basis for the Organization. As the Assembly knows, for two months I have been holding intensive consultations with all delegations, both individually and through the groups to which the various delegations belong, in order to put together the broadest possible consensus on how to deal with this problem. In this connection, I can say with certainty that there is a The financial crisis is a real one, time is short, and we have to get down immediately to seeking a solution in order to guarantee a viable financial foundation for our Organization. For this reason, at this crucial stage I appeal to the sense of responsibility of every member of our Assembly so that the necessary efforts can be made to achieve a compromise solution. I would like to inform representatives that I will be continuing my consultations on the issue we have been considering, namely, the financial situation of the United Nations, and I will keep them fully informed of the outcome of those consultations. We have thus concluded this stage of our consideration of agenda item 10.