STATEMENT ON BEHALF OF THE GROUP OF 77 AND CHINA
BY MS. KAREN LOCK PERMANENT MISSION OF SOUTH AFRICA TO THE UNITED NATIONS, ON AGENDA ITEM 126: IMPROVING THE FINAI\CIAL SITUATION OF THE UNITED NATIONS New York. I June 2006

Mr. Chairman, I have the honour to speakon behalf of the Group of 77 ar:,d China on agendaitem "Improving the financial situation of 126, entitled: the United Nations". The Group wishes to thank the Controller, Mr. Warren Sach, for presenting the report of the Secretary-General the financial situation of the United Nations. Member on Statestraditionally use this opportunity to reflect on our collective efforts to ensurethe financial health of the Organisation, as well as reaffirm our commitment to meeting our legal obligation to bear the expenses the Organisation. The Group of 77 and China of believesthat this reflection hasbecomeevenmore imperativethan usual.

Mr. Chairman, The UN is discussingthe financial situation of the Organization at a difficult time. On 29 May 2006, the Group of 77 and China held a Special Ministerial Meeting in Putrajaya, Malaysia, and noted with concern that the IIN is operating under a spending cap that limits the manner in which the Secretary-General to implement his mandates. has The Group of 77 and China remains concernedover the policy of withholding financial obligations due to the United Nations and thereby creating a linkage with the reform of the UN. This deliberate withholding of funds budgeted for the year 2006 creates an principles of governance the UN artifrcial political leveragethat altersthe established of on the basis of sovereign equality of Member States. The Group of 77 and China is deeply apprehensiveabout the grave implication of the spending cap on the financial healthof the Organisation. The spending cap was regrettably imposed on the Organisation during the budget negotiationsin 2005. At the time, the Group of 77 and China made it clear that we believed that the spending cap would be automatically lifted when the Secretary-General makes a request for the funds already approved to implement his mandate. We did not recognise any link between the unprecedented and one-time decision to introduce a spendingcap and our collective efforts to reform the Organisationin various areas.We were also assuredduring the negotiationsthat the spending cap was not intended to harm the Orsanisation.

The Special Meeting of the Ministers of the Group of 77 and China in Malaysia reaffirmed that efforts to use the size of financial contributions to push for the adoption of certain proposals are counter-productive and violate the obligations of Member Statesto provide resources for the Organisation, as enshrined in its Charter. The Ministers also reaffirmed that, in order to avoid a crisis within the United Nations, the limit on the expenditureof the Organisation shall be automatically lifted and urged all Member States to act accordingly. Mr. Chairman, The statement made by the Controller that the financial situation of the United "generally quite positive" is encouraging. This is Nations at the end of 2005 had been basedon information showing that there was an improvement in the cash position of the regular budget, as well as in the accountsof the International Tribunals and peacekeeping operations,as compared to the positions at the end of 2004. However, the improvements are overshadowed by indications that significant amounts are still owed to the "a Organisation and that the United Nations has a long way to go before it could receive cleanbill of financial health". The minor improvements achievedlast year are also overshadowedby indications that the financial position of the regular budget at 30 April 2006 was weaker than it was being up by more than $200 million and at the samedate in 2005,with unpaid assessment actualpaymentsreceivedbeing down by $300 million. This is despitethe fact that more in Member Stateshave paid their assessments full by 30 April2006 than the total number of Member States that paid in full at the same juncture a year ago. The presentation indicates that those who have imposed the spending cap are placing an additional burden in on the financing of the Organisationby not payrng their assessments full and on time. The Group would appreciate receiving more information on the expenditure pattem of the past five months, as well as the amount that has been expended so far. from the Secretariatthat the implementation Furthermore, the Group seeksreassurances of the prograrnmes and activities of the United Nations that are funded from the regular budgethave not been delayedor scaleddown in 2006. that funds are not being diverted from so-called nonWe also seek assurances essential activities to finance other activities, in order to make ends meet until the General Assembly receives the request of the Secretary-Generalfor the release of the remaining funds approved for 2006. Such actions would lead to a reprioritization of the programmes and activities approved by the General Assembly in the programme budget for the biennium 2006-2007, as well as the Biennial ProgrammePlan. In this context, we wish to stressthat the setting of the priorities of the Organisationis the prerogativeof Member States.as reflectedin leeislativemandates.

Mr. Chairman, With respect to the two Intemational Tribunals, we welcome the indication that their financial situation has continued to improve with outstanding assessments 2005 for down significantly as comparedto previous years. However, it is concerning to note that more than half of the Membership has not paid their dues to either one or both Tribunals in full at the end of 2005. The Tribunals consequentlyremain in a difficult financial position and may continue with the unhealthy practice of cross-borrowing from closed peacekeepingoperationsto provide supplementaryfinancing in 2006. On the amounts owed to troop and equipment contributors, the Group welcomes indications that payments made by the Secretariat exceeded the projections made in October2005 and therebyreducedthe debt owed to Member Statesto $695 million. This amount, however, remains high. We urge that every effort be made to further reduce the amounts owed to Member States,whilst recognizing that there are exigent factors that may impact on the ability of the Secretariat to reimburse Member States in a timely manner. Mr. Chairman, ln conclusion, the Group of 77 and China wishes to reaffirm our commitment to meetingour legal obligationsto bear the expenses the Organizationin accordance of with the Charter of the United Nations. We urge other Member Statesto join us in placing their commitment to the Organisation on record. Furthermore, while recognizing the need to extend sympathetic understanding to those temporarily unable to meet their financial obligationsas a consequence genuineeconomicdifficulties, the Group urges of contributions in full, on time and without all Member States to pay their assessed conditions. It is for this reasonthat we believe that Member Statesshould usethis opportunity to go beyond mere expressions of commitment to meeting our Charter obligation and supportingthe Organisation. The success the Organisationdependsnot only on our of political support but also on the extent to which we ensurethat it receives adequate resourcesand reliable financing for the execution of its mandatesand activities. The future of the Organisation is important to all of us and we cannot afford to allow a cloud of uncertaintyto remain hangingover it. I thank you.