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UN’s Finances ‘Fragile’ With 31 States Paying Dues

UN’s Finances ‘Fragile’ With Only 31 States Having Paid Their 2008 Dues In Full – Ban

New York, Nov 6 2008 3:10PM

Secretary-General Ban Ki-moon has urged Member States to meet their financial obligations to the United Nations for 2008 in full and on time, warning of possible cash shortfalls if assessed contributions are not paid up in the remaining two months of this year.

“The financial position of the UN remains fragile,” Mr. Ban writes in his latest report to the General Assembly, which reviews the world body’s financial situation as at 24 October.

Funding for the UN budget, which is approved on a biennium basis, is derived from contributions from Member States. Their assessments are assessed based on a number of factors, including per capita incomes. The UN’s regular budget for the biennium 2008-2009 is nearly $4.2 billion.

In addition to the regular budget, Member States are assessed for the costs of the UN international tribunals, peacekeeping, and the five-year, $1.9 billion renovation of the Organization’s New York Headquarters, known as the Capital Master Plan (CMP).

“The financial indicators for 2008 are mixed,” says the Secretary-General, referring to the four main factors that determine the UN’s financial strength – assessments issued; unpaid assessed contributions; available cash resources; and the UN’s outstanding debt to Member States.

“The position of the regular budget is uncertain given the current and projected cash situation, and the final outcome for 2008 will depend on action to be taken in the next few months by a few Member States.”

As of 24 October, 133 Member States had paid their assessments to the UN regular budget in full, seven more than on 31 October last year.

Of the $756 million that remained outstanding at 24 October for the regular budget, 94 per cent was owed by a single Member State and 6 per cent by the remaining Member States. “Clearly, the final picture for 2008 will largely depend on the action taken by those countries in the coming few weeks,” Mr. Ban says.

The total amount outstanding for peacekeeping operations at 24 October is over $2.9 billion, approximately $198 million higher than at the end of 2007, but $575 million below the level at 31 October last year.

As with the regular budget, the $2.9 billion in unpaid assessments is “highly concentrated,” according to the report, with over half of the total, 62 per cent, from just two Member States, and another 21 per cent from four others.

Cash balances at the end of 2008 are projected to be higher than at the end of 2007 for the tribunals and the CMP, but lower for the regular budget and peacekeeping operations. “Further borrowing may be required from reserve accounts for the regular budget,” says Mr. Ban.

The report adds that amounts owed to troop and equipment providers at 31 December are expected to be significantly lower than earlier projections, and some $134 million below the amount owed at 31 December last year.

“While payments of troop and equipment obligations were broadly current for a number of missions, cash shortfalls mean that reimbursements have fallen behind the normal quarterly reimbursement process for four missions,” Mr. Ban notes.

These are the UN Mission for the Referendum in Western Sahara (MINURSO), the UN Interim Administration Mission in Kosovo (UNMIK), the UN Observer Mission in Georgia (UNOMIG) and the UN Peacekeeping Force in Cyprus (UNFICYP).

The Secretary-General states that while the financial situation is expected to show some improvement by the end of 2008, “this is very much dependent on receipt of significant payments by the end of the year from a few Member States.”

Mr. Ban also pays tribute to the 31 Member States that had paid in full all assessments for the regular budget, the international tribunals, the peacekeeping operations and the CMP that were due and payable as at 24 October.

They are Australia, Austria, Azerbaijan, Brazil, Bulgaria, Burundi, Canada, the Czech Republic, Denmark, Finland, Georgia, Germany, Guatemala, Ireland, Italy, Liechtenstein, Mexico, Monaco, New Zealand, Niger, Norway, the Philippines, Moldova, Russia, Samoa, Singapore, Slovenia, South Africa, Sweden, Thailand and the United Kingdom.

The Secretary-General encouraged other States to follow their example. “In order to maintain the financial health of the Organization, it remains as critical as ever for Member States to meet their financial obligations to the United Nations in full and on time,” he stressed.


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