UNITED NATIONS GENERAL ASSEMBLY 55th SESSION

Fifth Committee - Item 122: Scale of Assessments for the Apportionment of the Expenses of the United Nations

Statement by H.E. Ms Penny Wensley Ambassador and Permanent Representative on Behalf of the Delegations of Canada, New Zealand and Australia (CANZ)

2 October 2000

It is good to see you in Chair, well supported by the efficient Fifth Committee Secretariat and surrounded by your advisers and experts. I wish you every success in steering this Committee’s work over the next twelve months.

Mr Chairman, I have the honour to speak on behalf of the delegations of Canada, New Zealand and Australia.

I want to begin by thanking the Chairman of the Committee on Contributions, Mr Ugo Sessi, for introducing the Committee’s Report. It was an excellent presentation which provides a very helpful starting point for our work.

Our task this session, to agree upon a scale of assessments for the apportionment of the expenses of the United Nations for the period 2001 to 2003, is a very important once. Our three delegations will participate in the negotiations constructively and cooperatively. We will work for consensus adoption of the next scale.

In this spirit and believing that this Committee should get down to serious negotiations as quickly as possible, we wish to set out our views on the next scale in as brief a form as such a technical and complex matter allows. CANZ countries want a scale that is simple, equitable and transparent. We continue to believe in capacity to pay as the fundamental principle underlying the scale. It is also our view that current global economic realities should be reflected accurately in the scale. For example, the rapid economic growth of some developing countries should be reflected in higher rates of assessment. But by the same token, economic decline should be reflected in lower rates of assessment. We do not support methodological adjustments as a way of sidestepping the basic responsibility of member states to pay their fair share of the UN’s costs.

In terms of the elements of the scale, I want to make ten points:

• Firstly we support a somewhat shorter base period using the most recent economic data because this reflects current capacity to pay more accurately.
• Secondly we supoprt a debt flow approach, that is based on actual repayments of external debt principal, as the debt-burden adjustment measure, if such a measure is retained, because quite simply debt can only be a burden if it is actually repai
• Thirdly we continue to believe that any change in the low per capita income adjustment should be for the gradient to move downward - and I think it is important to recall that for the greater part of the UN’s existence, the scales have used gradients which were much lower than 80%
• Fourthly there is, in our view, merit in splitting the gradient into two: one for Least Developed Countries of 80%, and a second which is considerably lower than 80% for other countries below the threshold
• Fifth, we continue to believe that the current method of calculating the threshold should be maintained
• Sixth, we support the reintroduction of the method of distributing the cost of the adjustment which was used before 1979, that is, to distribute the costs to all member states
• Seventh, we do not support the introduction of special provisions to deal with the effects of discontinuity - whether in the form of a second, higher threshold or a moratorium for countries crossing the threshold. We consider that this would be unfair to all those member states which have previously experienced discontinuity without relief
• Eighth, like members of the G77 we continue to support a floor rate of 0.001% and a maximum rate of 0.01% for the Least Developed Countries
• Nineth, we strongly believe the scheme of limits should not be reintroduced as, in our view, it has no technical merit
• Tenth, we continue to support the concept of annual recalculation whereby - consistent with the Rules of Procedure - the methodology remains unchanged but the data going into the scale would be updated every year.

In addition to these ten points there are two further elements which we wish to address: the quality of GNP data, and exchange rates.

Member states are currently in the process of moving from the 1968 system of national accounts to the 1993 system of national accounts, with over half of the membership still using the 1968 system. The current practice of jumbling the two systems creates inequities and inconsistencies in the scale. In the past to make the information comparable the Statistics Division of the Secretariat has adjusted the data to overcome this problem and the CANZ countries favour a continuation of this approach.

The second issue relates to the rates used for converting local currencies into US dollars. In our view because this is an issue of converting currencies and not about making adjustments - market exchange rates should be used in all but the most extraordinary and exceptional cases. In the absence of a systematic methodology for determining when the use of market exchange rates would result in excessive fluctuations and distortions in the income of some member states, market exchange rates should in our view only be replaced by price adjusted rates of exchange in clear and extreme cases.

Mr Chairman although we have tried to make our statement very simple on the whole the elements of the scale methodology are extremely technical. In view of this the Committee should be guided by the technical advice of its expert committee and where there is no agreed view from the experts we believe it would be prudent to retain existing practice rather than to adopt a new method.

I come now to the question of the ceiling. The current ceiling is a distortion of the principle of capacity to pay. We therefore support a review of the ceiling and we’re prepared to listen to the arguments on their merits. There is no doubt that the ceiling is a political rather than a technical element in the scale of assessments. As I made clear at the outset our three delegations continue to believe that the scale should reflect the principle of capacity to pay. Any revisions should not seriously obscure the relationship between contributions and capacity to pay. Should member states reach consensus on the need to change the level of the ceiling then we attach importance to the points being distributed equitably. We reiterate our call to all member states that they should pay their assessed contributions in full, on time and without conditions. As we all know this is a very familiar call but familiarity and repetition should not breed contempt. The fact that we need to reiterate it, only underlines the seriousness of the problem we confront in this regard.

Finally, we wish to refer to the Committee on Contributions’ recommendations on the requests received for the restoration of their voting rights from member states which have not paid their last two years’ assessed contributions. It is the clear intention of the Charter that the granting of exemptions under Article 19 be an extremely rare occurrence. If Article 19 is to remain an effective mechanism to encourage timely payments of assessed contributions, then the test to grant waivers should continue to be a hard one. Mr Chairman, our three delegations support the recommendations of the Committee on Contributions in relation to the six applications and we urge the members of the Fifth Committee to exercise caution in making any decisions that may weaken this important mechanism in the Charter.

Thank you.