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Speech of Joseph Connor, 24 January 1996 Talking Points for a Speech to the General Assembly Working Group on the Financial Situation
By Joseph Connor
Under Secretary General for Management
January 24, 1996
The following text presents a series of notes or "talking points" that were prepared for Mr. Connor's presentation to the Working Group. The full text of the presentation is not available, but this provides a clear idea of what he said.
Status of contributions at the end of 1995
Overdue amounts continue to rise
At 31 December 1995, assessed contributions unpaid by Member States totaled almost $2.3 billion. (The comparable figure at the end of 1994 was $1.8 billion).
Of this amount: $564 million related to the regular budget (up from $480 million at the end of 1994). $1.7 billion related to peace-keeping operations (compared to $1.3 billion at the end of 1994). Over $1.2 billion was owed by the United States: $414.4 million for the regular budget and $816.4 for peacekeeping operations.
Cash receipts from the United States are very important to the Organization because of the level of assessments the United States bears - 25 per cent for the regular budget and over 31 per cent for peace-keeping operations.
The United Sates shortfall in payments is very severe. But the United States is not alone.
By 31 December 1995, only 94 Member States, or just half of the membership, had paid their regular budget contributions in full. (This is an improvement over end-1994, when only 75 Member States had paid in full.)
During 1995, 22 Member States made no payment at all for the regular budget. (This is also an improvement; the comparable figure was 39 Member States at the end of 1994.)
Thus, while more Member States met their Charter obligations in 1995 than in 1994, the total level of unpaid assessments increased.
For a number of recent years the United Nations - despite slow and late payments of the current year's assessment - could expect to receive cash inflows - consisting of both arrearage payments and current assessment payments that about equaled the current year's level of assessments.
In 1993 we had regular budget receipts - both from Member States paying arrears and current assessments - that about equaled the current year's assessed amounts - 99.7 per cent; 1994 was no different - 100.6 per cent. Payments from the United States followed this pattern. Cash receipts for regular budget purposes from the United States in 1993 and 1994 in total came very close to the amounts assessed for those years.
But not so 1995. The all Member States percentage dropped to 92.7 per cent because the United States rate of payment dropped to 47 per cent. In effect, the United States paid as ifits assessment rate was not 25 per cent but 12 per cent.
The same situation occurred relative to peace-keeping. In contrast to 1993 and 1994 when the United Nations received about 90 per cent of all peacekeeping assessments both from the US and other Member States as a group, 1995 dropped to 86 per cent. The United States portion dropped to 40.6 per cent.
Said another way, the United States paid peace-keeping assessments in 1995 as if its rate of assessment were not 31 per cent but 14 per cent. Additional assessments in 1996
Additional assessments issued to date total: Over $1.1 billion for the regular budget for 1996
In the next week, $286.1 million will be assessed for 8 peace-keeping operations, including assessments for mandate periods in 1995. The total amounts to be assessed for peace-keeping operations in the course of 996 are expected to be significantly lower than in 1995; this will exacerbate the cash flow situation. Current status of unpaid contributions
Total unpaid contributions - $3.3 billion; $1.6 billion for the regular budget; $1.7 billion for peace-keeping operations; $4.9 million for the international tribunals. Cash situation at the end of 1995
Now precarious, heading for the edge
After exhausting the Working Capital Fund and the Special Account, it was necessary to borrow continually from peace- keeping operations to fund the regular budget from early August until the end of the year. At 31 December, the amount so borrowed totaled $176 million.
After borrowing for the regular budget, the cash balance of peace-keeping operations totaled $744 million at 31 December.
The amounts borrowed from peace-keeping operations for the regular budget would have been even higher if the Secretary- General had not instituted cash conservation measures in September 1995. These were not intended to, and could not have, made up for the massive shortfall in the payment of assessments. They were intended to permit the Organization to continue to operate until 1996 regular budget assessments began to be received. Payments by Member States in 1996
As of yesterday, 23 January 1996, 12 Member States had paid their regular budget assessments for 1996 in full and 13 Member States had made a partial payment against their 1996 regular budget assessment.
Between 1 and 23 January 1996, almost $93.6 million of regular budget assessments were paid.
In the same period, some $42.5 million of peace-keeping assessments and $297,680 of assessments for the international tribunals were paid.
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