VZCZCXYZ0014
RR RUEHWEB

DE RUCNDT #1102/01 3341939
ZNR UUUUU ZZH
R 301939Z NOV 07
FM USMISSION USUN NEW YORK
TO SECSTATE WASHDC 3235

UNCLAS USUN NEW YORK 001102 
 
SIPDIS 
 
SIPDIS 
 
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