Development account to be created - UN

UN Chronicle, Summer, 1998

The Organization's cash position is "weak, and getting weaker, with unpaid assessments decreasing slowly", Secretary-General Kofi Annan stated on 12 March. Debt to Member States had become "resistant to change" and, as a result, the "need to cross-borrow from peacekeeping funds to cover regular budget deficits persists, as the level of funds decline".

By 31 January 1997, regular budget assessments had been paid in full by 29 Member States, "while only 24 Member States had paid in flail by January 1998", the Secretary-General reported. He noted with disappointment that some Member States that had been on the "payments received" list in 1997 were not there in 1998. As a consequence, the normal surge of cash inflows traditionally expected at the beginning of each year had not materialized for 1998, and total receipts for the two months were down from $556 million in 1997 to $317 million - a 43 per cent drop, the report said.

While the Secretary-General was "most appreciative" of the efforts made by Member States that had paid in flail and on time, he asked all others to make "prompt payments of amounts now past due".

On 22 April, Fred Eckhard, Spokesman for the Secretary-General, announced that the regular budget outstanding assessments, together with assessments for peacekeeping and the International Criminal Tribunals, totalled about $2.64 billion. At the same time last year, the total was $2.7 billion, so there had been a "marginal improvement", he added.

On 2 April, the Secretary-General reported that the underlying assumption in the creation of a Development Account - which the General Assembly, by resolution 52/12 B of 19 December 1997, decided to establish in the programme budget for the biennium 19981999 - is that any gains achieved as a result of productivity improvements, such as streamlining and simplification of processes and procedures, would become a permanent component of the Account.

"Accordingly, once a productivity gain has been identified and achieved, approval by the General Assembly will be sought for the transfer of the associated resources in that Account under section 34, Development Account, of the programme budget. It would thus reflect a redeployment of productivity gains in the administrative areas to the Development Account. Over time, additional funds will be transferred from productivity gains until the Account reaches a level of $200 million. Reductions in administrative costs will be sought without reducing the ability of the Organization to deliver its mandated programmes. ... Once the target level of transfer is attained, the Account will become sustainable through the existing budget appropriation process."

The resources in the Account would be utilized to assist in:

* the promotion of development of developing countries in the context of globalization and increasing interdependence;

* the understanding by the international community of emerging challenges and persistent problems in global development by better analysis and networking of experts so as to promote an enhanced appreciation of global economic and social issues;

* the implementation by developing countries of the global programmes and platforms of action, especially the follow-up to United Nations conferences.

As for the overall principles governing the Account utilization, the proposals to be submitted would conform to the following guidelines:

* the scope should be limited, confined to proposals that would show results within two bienniums;

* the focus should be well-defined and success should not depend on additional funds from other resources;

* in the absence of support from the Development Account, the proposal would not be implemented;

* the proposal should offer low-cost solutions and once implemented should be able to generate other sources of finance or tie in with country-level operations undertaken by the United Nations system;

* the proposals should include a strong South-South cooperation content.

"For the programme budget for the biennium 1998-1999, an amount of $12.7 million has already been appropriated under section 34. Proposals for the utilization of this amount will be submitted subsequently to the General Assembly", the Secretary-General added.