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PART V.

BUDGET AND ADMINISTRATION

UN FINANCIAL MATTERS

UN FINANCIAL SITUATION

In the introduction to his annual report on the United Nations and in a statement to the 30th General Assembly's Fifth Committee (Administrative and Budgetary) on September 25, the Secretary General commented on the general financial situation of the organization which, he said, "continues to cause me great concern." He stated that the United Nations continued to find itself in a position where it had no reserves on which to fall back. Noting that this problem grew larger each year, he urged, but did not formally propose, that the size of the working capital fund be doubled (to $80 million) and that member states be encouraged to pay their assessments more promptly.

The working capital fund was established in 1946 to provide a cash reserve to tide the United Nations over until assessed contributions were received from members and to provide a source from which funds could be drawn to meet emergency and unforeseen requirements. Through the years, it has been entirely depleted in order to meet recurring deficits arising from (1) shortfalls in the receipt of assessed contributions, mainly the deliberate withholdings by Eastern European and some other states of assessments for peacekeeping operations and payments on UN bond indebtedness, and (2) payments in nonconvertible and nonutilizable currencies.

On November 5 the Fifth Committee, on the initiative of a group of 27 states from all geographic areas except Eastern Europe, requested the Secretary General to provide specific information on aspects of the financial problems of the United Nations, including the extent and nature of the UN deficit; the cash flow; extent of withholding by member states, as a matter of principle or announced policy, of payment of assessed contributions; payment of assessed contributions in nonconvertible currencies; and attempts previously made to resolve the deteriorating UN financial situation and to restore UN financial solvency. The Secretary General provided the requested information on December 1.

The Fifth Committee considered the report at three meetings between December 8 and 15. During these discussions the United States continued to oppose any increase in the level of the working capital fund, because, in its view, the enlarged fund would be dissipated in a relatively short time by the continuing deliberate withholdings of a few member states. On December 15, by a recorded vote of 65 (U.S.) to 0, with

11 abstentions, the Committee approved a resolution which (1) called on member states to make their best efforts to overcome constraints to the prompt payment early in each year of full assessed contributions and of advances to the working capital fund; (2) established a 54-state Negotiating Committee on the Financial Emergency of the United Nations, the members of which were to be designated by the President of the Assembly, and the (3) decided that the mandate of the Committee should be to bring about a comprehensive settlement of the critical financial situation of the United Nations. The resolution also directed the Committee to examine the question of the appropriate level of the working capital fund and requested it to report to the 31st General Assembly on progress achieved with recommendations on further steps that should be undertaken to solve the financial problems of the United Nations.

The General Assembly in plenary session adopted the resolution on December 17 by a recorded vote of 119 (U.S.) to 0, with 12 abstentions.

UN REGULAR BUDGET

The General Assembly on December 17, 1975, by a recorded vote of 113 to 9, with 5 abstentions (U.S.) approved an expenditure budget recommended by its Fifth Committee of $ 745,813,800 for the 2-year period January 1, 1976, through December 31, 1977. The Assembly also approved by a vote of 100 (U.S.) to 10, with i abstention, a supplemental appropriation of $6,517,000 for the 1974-75 biennium, which raised the total budget to $612,550,000 for those 2 years. Accordingly, the amount appropriated for 1976-77 exceeded the final budget for 1974-75 by $133,263,800, a 21.8% increase.

The increase for 1976-77 over 1974 - 75 was attributable to $ 46 million added costs of maintaining the prior level of operations at 1975 prices, some $60 million for anticipated inflation in 1976, and $27 million for expanded programs and for costs formerly financed from other sources. Major components of the $27 million addition included the cost of 646 new positions; $3.6 million for Arabic language services, which previously had been financed by voluntary contributions of the Arab states; $2.7 million for the Law of the Sea Conference; $2 million for increased salaries for members of the International Court of Justice and death and disability benefits for members of the Joint Inspection Unit; $2 million for other special conferences

1/The United States is a member of the Committee.

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