UNGA/G-5: SYG BAN INTRODUCES 2008-2009 UN BUDGET

UNCLAS USUN NEW YORK 001102

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E.O. 12958: N/A
TAGS: AORC PREL UNGA
SUBJECT: UNGA/G-5: SYG BAN INTRODUCES 2008-2009 UN BUDGET


1. (U) Summary. UN Secretary-General Ban Ki-moon introduced
the proposed program budget for the biennium 2008-2009 before
the Committee on Administration and Budget on October 25.
SYG Ban stated the proposed budget of $4.2 billion represents
real growth of $23 million, or 0.5%, over the previous
biennium. Chairman Rajat Saha of the Advisory Committee on
Administrative and Budgetary Questions (ACABQ) followed with
introduction of the ACABQ's report, noting that the proposed
budget does not take into account add-on items. He expressed
concern regarding the "piecemeal" approach to the budget
process. Over the course of two days, all of the regional
groups spoke on the issue, followed by 29 individual Member
States. All Member States echoed the ACABQ concerns about
the "piecemeal" budgeting approach, but were generally
divided between North and South positions on major issues
related to the proposed budget. End summary.


2. (U) On October 25, UN Secretary General Ban Ki-moon
introduced the proposed program budget for the biennium
2008-2009 in formal session of the Committee on
Administration and Budget. SYG Ban described the proposed
budget of $4.2 billion, representing real growth of $23
million, or 0.5%, over the previous biennium, as "not much,
considering the demands upon us." He emphasized the
"unbreakable link" between the "three pillars" of peace,
development, and human rights. In an effort to strengthen
the UN's capacity to engage and resolve conflicts, SYG Ban
asked for $18 million in funds to strengthen the Department
of Political Affairs (DPA). On development, he noted the
largely extra-budgetary contributions of $15 billion
annually, but called upon Member States to contribute more.
SYG Ban proposed reorganization of the Secretariat to better
serve the interests of the least developed, land-locked, and
small island nations, calling development a human right.


3. (U) In addressing issues of management and UN reform, SYG
Ban agreed the Secretariat needed to streamline and
rationalize its work, to become "faster, more flexible, and
more modern." He announced establishment of a
change-management task force to consolidate rules in the
areas of human resources, budget and finance, and
procurement. SYG Ban stated the proposed budget provides for
stiffer internal oversight. He acknowledged the Committee
was already considering proposals for a comprehensive
revision of the UN system of administration of justice,
called upon Member States to extend the "vital work" of the
Procurement Task Force for another year, while working
towards more permanent independent auditing and investigative
capabilities.

ACABQ Raises Concerns
--------------


4. (U) ACABQ Chairman Rajat Saha next presented the Advisory
Committee's report on the proposed programme budget (A/62/7).
The ACABQ's recommendations include a reduction of the
budget by $11.5 million. The Advisory Committee expressed
concern regarding the "piecemeal approach to the budget
process," noting that such an approach "undermines the
budgetary system and budget discipline." The ACABQ also
noted that the proposed budget does not include several
important add-on items, including the comprehensive review of
the Administration of Justice, measures to ensure business
continuity in the event of an influenza pandemic, programme
budget implications of General Assembly resolutions, and
Human Rights COUNCIL resolutions. The Advisory Committee
criticized the practice of incremental budgeting, in which
new mandates lead to requests for new resources over a
continuously rising baseline. The ACABQ also recommended
greater cooperation among such entities as the Department of
Political Affairs (DPA),the Depa
rtment of Peacekeeping Operations (DPKO),the Department of
Field Support, and the Department of Safety and Security, or
among the UN Conference on Trade and Development (UNCTAD),
the Department of Economic and Social Affairs (DESA),and
regional commissions to avoid duplication of effort.


5. (U) On human resource issues, the ACABQ pointed out that
efforts should be taken to redeploy posts before new ones are
created. The Advisory Committee noted the "consistent bias"
toward upward reclassification of posts. However, the ACABQ
did support the proposed addition of 12 NATIONAL posts, at
the Office of the UN Special Coordinator for the Middle East
Peace Process (UNSCO),the Economic and Social Commission for
Asia and the Pacific (ESCAP),the Economic Commission for
Latin America and the Caribbean (ECLAC),the Department of
Public Information (DPI),and the UN Office at Nairobi
(UNON).

Member States Divided
--------------


6. (U) Member States in their statements acknowledged that
the budget reflects the "strategic vision" of the United


Nations and outlines its "broad objectives, goals and
policies to achieve them." Though Member States expressed
different priorities in their statements, all shared the
ACABQ's concerns regarding the difficulties in determining
resource requirements when the budget is presented in a
piecemeal manner.


7. (U) Ambassador Mark Wallace intervened on behalf of the
U.S. delegation, calling for a budget that "reflects sound
management and discipline while supporting the UN's priority
activities and fulfillment of its noble purpose." USUN noted
that the proposed budget, including recosting and add-ons,
might in actuality reach $4.7 billion, an unsustainable 15
per cent growth beyond 2006-2007 levels. USUN called upon
Member States to encourage budget discipline and to adhere as
closely to the principle of zero growth in the budget as
possible. USUN expressed disappointment that the ACABQ was
only able to identify $11.5 million in savings out of a
budget of $4.2 billion.


8. (U) Member States' interventions were divided for the most
part between developing and developed states, as shared by
the Group of 77 and China, the Rio Group, and the Africa
Group, in contrast with views expressed by the European
Union, CANZ, Japan, and the U.S. Development was the
priority focus of the developing world, which noted with
concern the "nominal increase of 0.5 per cent" that was
proposed for development and called the current status of the
Development Account "unacceptable." Developing nations
called for the strengthening of development and economic
mechanisms, particularly DESA, UNCTAD, and regional
commissions. They noted that the discontinuation of 2011
outputs in 2008-2009 related predominantly to economic and
social affairs and regional cooperation for development.
Developing nations called for equitable geographic and gender
representation in recruitment to UN posts, and for the
filling of vacant posts. Members of the Africa Group, in
particular, were concerned about the vacancies in the Office
of the Special Advisor for Africa (OSAA) and endorsed the
recommendation by the Committee on Program and Coordination
(CPC) for the head of OSAA to be appointed immediately.


9. (U) Developed nations advocated for sound management and
strict budgetary and fiscal discipline. They called for the
prioritization of budget add-ons and redeployment of existing
resources. Developed nations also called for strengthening
of mechanisms for transparency and accountability. The
Republic of Korea and Switzerland joined developed states in
calling for mandate review as a "powerful instrument" in
eliminating outdated or unnecessary items from the budget.
Many developed countries also supported reform initiatives,
such as strengthening the DPA, the Administration of Justice
comprehensive review, and improvements to the procurement
system.


10. (U) In total, over the course of the two day formal
discussion, 35 Member States addressed the Committee on the
budget issue: Pakistan (on behalf of G-77 and China),
Portugal (for the European Union),the Dominican Republic
(for the Rio Group),Canada (for CANZ),South Africa (on
behalf of the Africa Group),the Republic of Korea,
Bangladesh, Nicaragua, Venezuela, Mexico, Thailand, Japan,
Botswana, the United States, Switzerland, Iceland, Egypt,
China, Ethiopia, Indonesia, Brazil, Gabon, Norway, Cuba,
India, Nigeria, Vietnam, Singapore, Russian Federation,
Sudan, Kuwait, Philippines, and Qatar.


11. (U) U.S. Statement -

The United States joins other members in expressing our
appreciation to the Secretary-General for introducing his
proposed budget for 2008-2009 to the Fifth Committee. We
would also like to express our appreciation to the members of
the Secretariat, including Under Secretary-General Alicia
Barcena and Controller Warren Sach and their STAFF who have
produced the budget estimates for our consideration. Our
delegation appreciates the difficulty encountered by the
Secretary-General in preparing this budget given that the

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budget cycle began before he took office. We welcome his
commitment to be personally involved in budget planning for
the period 2010-2011.

In addition, we thank the chairman of the Advisory Committee
on Administrative and Budgetary Questions (ACABQ),Mr. Rajat
Saha, for the report of the Advisory Committee on the budget.

The Secretary-General's preliminary estimate for the biennium
2008-2009 is $4.19 billion. As the Secretariat has
indicated, this figure does not include recosting tot take
account of inflation and currency fluctuations. Such
recosting is likely to add $270 million to the final figure.
The $4.19 billion preliminary estimate does not include a
significant number of "add-ons" identified by the
Secretariat. The "add-ons" include a number of reform

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related activities that are likely to be considered during
this session. The "add-ons" include such matters as
Administration of Justice, OIOS, Human Rights COUNCIL
activity, Enterprise Resource Planning, additional SPM
activity, including UNAMI, or further PBIs. The Secretariat
indicated that the "add ons" already identified could cost
over $306 million in addition to the estimated $270 million
for recosting. Thus, it appears that the actual budget could
be in the region of $4.7 billion for 2008-2009 - perhaps even
in excess of that number. Such a budget repres
ents an increase of 15 per cent beyond the 2006-2007 budget.
Such unrestrained growth in the budget is not sustainable.
When the Secretariat proposed an increased budget or
additional funding request, we as Member States must insist
that the Secretariat identify cost savings and prioritize
such new initiatives.

We must encourage budget discipline.

Given the demands on Member States to fund ever-increasing
budgets, it is imperative that we manage the UN's resources
wisely. We all recognize that budget discipline is good
management and good management is in everyone's best
interests. Member States reasonably expect the UN to use the
resources that we provide as efficiently as possible in
carrying out mandates. My government has consistently
maintained and others have advocated that we adhere to zero
growth in the budget.

Zero growth does not appear to be an option before us. We
must, nonetheless, seek to control growth in the budget while
ensuring that there are sufficient funds to meet the mandates
authorized by Member States. We have an obligation to do so.
No organization can operate effectively without seeking to
prioritize expenditures and reprogram budgets to cut back on
redundant or less relevant programs and redirect resources to
new challenges and priorities. Meaningful priority setting
is key to the achievement of budget discipline. Too many
priorities suggests there are no priorities. The future of
this institution depends on sound management and governance.
We will never truly achieve a persistent culture of sound
management and governance without real budgetary discipline.

The Advisory Committee on Administrative and Budgetary
Questions has played an important role over the years in
bringing some discipline to the UN budget process. We have
read the ACABQ report carefully and we share the ACABQ's
concern with the "piece-meal approach" taken by the
Secretariat in regard to the presentation of the budget. As

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so clearly stated by the ACABQ, it is the responsibility of
the Secretariat to ensure that the budget presents the
fullest possible picture of UN requirements for the coming
biennium. Key to developing a full picture is the need to
end "budgeting by installment" which the ACABQ notes is a
disservice to Member States and undermines their ability to
fulfill our important oversight responsibilities. The
budgeting process is based on a partnership between the
Secretariat and Member States. As such, the role of Member

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States is undermined if we are confronted with substantial
add-ons outside of the normal budget process, as in the
present case.

We are disappointed that the ACABQ was able to identify only
$11.5 million in savings out of a budget of $4.2 billion. We
believe that we must examine the budget carefully in an
effort to identify even greater savings without undermining
the achievement of the mandates of the Organization.

We also look forward to the views of the ACABQ as they
address the "add-ons" already identified by the Secretariat,
and others that have not yet been identified. We must
carefully scrutinize these proposals to identify whether it
is appropriate to proceed with them and, if so, we must
prioritize their adoption and implementation keeping in mind
not only the Secretariat objectives but also the realities of
the budget.

Effective management and budgeting is key to setting this
organization on a strong foundation. As President Bush
remarked, "This great institution must work for great
purposes - to free people from tyranny and violence, hunger
and disease, illiteracy and ignorance, and poverty and
despair."

We look forward to working with other delegations and the
Secretariat to approve a budget that reflects sound

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management and discipline while supporting the UN's priority
activities and fulfillment of its noble purpose.

Finally, we hope that we can conclude these discussions in a
timely manner so that all of the many hardworking people in
this room can return home on time for the winter holidays.

Khalilzad