VZCZCXYZ0011
RR RUEHWEB

DE RUCNDT #0010/01 0042019
ZNR UUUUU ZZH
R 042019Z JAN 08
FM USMISSION USUN NEW YORK
TO SECSTATE WASHDC 3490

UNCLAS USUN NEW YORK 000010 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ABUD ACABQ AFIN AORC PGOV UNGA
SUBJECT: UN BUDGET AND MANAGEMENT:  GENERAL ASSEMBLY ADOPTS 
BUDGET ON VOTE CALLED BY USG; USG VOTES AGAINST BUDGET 
 
REF: A. USUN NEW YORK 00818 OCT 2007 
 
     ¶B. USUN NEW YORK 01102 NOV 2007 
     ¶C. USUN NEW YORK 01172 DEC 2007 
     ¶D. USUN NEW YORK 01180 DEC 2007 
     ¶E. USUN NEW YORK 01223 DEC 2007 
     ¶F. USUN NEW YORK 00002 JAN 2008 
     ¶G. USUN NEW YORK 00003 JAN 2008 
     ¶H. USUN NEW YORK 00005 JAN 2008 
     ¶I. USUN NEW YORK 00009 JAN 2008 
 
¶1.  Summary:  In the early morning hours of December 22, 
2007, the General Assembly passed the 2008-2009 biennium 
budget, along with resolutions on the financing of two newly 
established peacekeeping missions.  After intense 
negotiations, the General Assembly adopted a final 
appropriation of $4,171,359,700 (A/C.5/62/L.18 and 
A/C.5/62/L.19) for the 2008-2009 biennium budget.  See also 
A/C.5/62/L.20.  The approved budget represents a substantial 
reduction from the budget that was before the General 
Assembly, including numerous "add ons" informally identified 
by the SYG on which the General Assembly deferred action. 
See paras 3 and 4.  The budget adopted by the General 
Assembly included controversial aspects dealing with the OIOS 
Procurement Task Force (PTF), the UN Joint Staff Pension Fund 
(UNJSPF), the Special Political Mission in Lebanon, and 
certain program budget implication resolutions (PBIs), 
including funding for the Durban Review Conference and the 
"SPIDER" program proposed in connection with the peaceful 
uses of outer space.  While successful in dealing with the 
PTF and the SPM for Lebanon, USUN was unable to obtain 
satisfactory outcomes in relation to the other controversial 
matters, and declined to endorse General Assembly action in 
regard to them.  See para 2.  Because of USG concerns on the 
piecemeal nature of the budget and its potential growth 
during the 2008-09 biennium, and the decision of the G-77 to 
support the PBI on the Durban Review Conference, USUN called 
for a vote on the budget.  The USG cast the only vote against 
the budget.  See para. 5.  After intensive discussions, the 
General Assembly also approved peacekeeping funding for 
UNAMID (Ref. G) and MINURCAT.  End Summary. 
 
¶2.  USUN was successful in dealing with the PTF (Ref. H) and 
the SPM for Lebanon (Ref. F).  The G-77 refused to compromise 
on three additional controversial matters:  the UNJSPF, a PBI 
on the peaceful uses of outer space, and the proposed Durban 
Review Conference.  On instructions, USUN called for a vote 
on the UNJSPF and disassociated from consensus on the outer 
space PBI.  While isolated on the vote on UNJSPF, virtually 
the entire WEOG abstained in respect to the principled 
objection identified by USUN (Ref. I).  The G-77 refused to 
compromise on funding for the Durban Review Conference. 
Consequently, USUN, after consulting with the Department, 
called for a vote on the paragraph of the draft resolution on 
PBIs approving such funding, and voted against this measure. 
The paragraph was approved by a vote of 94 to 40 against with 
6 abstentions.  Virtually all of the EU joined the USG in 
voting against the paragraph.  In an explanation of vote, 
Ambassador Wallace said that the USG concerns had been stated 
in the Third Committee and stressed that the role of the 
Fifth Committee was to provide a fully informed view on the 
PBI.  He noted that the PBI statement in this case was unlike 
any in the history of the UN, with one exception.  He 
emphasized that this PBI was missing key information and that 
the Committee needed to rely on detailed and precise 
information in order to make an informed decision.  The 
Committee then adopted the entire draft decision without a 
vote.  Subsequently, in the General Assembly, the Third 
Committee resolution authorizing the review conference was 
put to a vote.  Once again, virtually the entire EU joined 
the USG in voting against the resolution (105-46-6). 
 
¶3.  The approved budget of $4.171 reflects a substantial 
reduction from the budget proposed by the SYG of $4.397 
billion, which included over $200 million for recosting. Ref 
¶A.  The $4.171 billion is less than the final budget for the 
2006/2007 biennium, which was $4.188 billion.  A/C.5/62/L.10 
(orally amended upwards to $4.193 billion).  The reduction 
achieved by the GA is substantially greater when taking into 
account that the SYG in introducing his budget separately 
identified a number of "add ons" for possible action by the 
General Assembly.  Refs. A, B, C.  In addition, the budget 
includes a number of increases due to the implementation of 
reforms to the internal justice system (Ref. E) as well as 
approval of a number of Program Budget Implications (PBIs), 
Revised Estimates, and other proposals relating to specific 
budget fascicles to increase staff.  Taken together, the "add 
ons" and the proposals on these other matters, if acted upon 
by the General Assembly during this Main session, could have 
increased the budget to as much as $4.8 billion. Ref D. In 
the end, these "add-ons" were not included in the initial 
budget and the General Assembly identified a range of savings 
or reductions that amount to some $320 million. Most of the 
savings result from the deferral of action on the proposed 
 
 
UNHQ for the UNAMI SPM ($180 million) (Ref. F) and action on 
cross cutting issues such as the rate of inflation, vacancy 
rates and non-post costs. 
 
¶4.  The SYG voluntarily reduced the inflation rate from 3.2 
percent to 2 percent in the face of an EU proposal, supported 
by the CANZ and USUN, despite original misgivings from the 
GOJ.  USUN worked with the EU, the CANZ and G-77 to agree to 
a vacancy rate higher than that proposed by the SYG, despite 
initial GOJ misgivings, agreeing on a 6.5 percent rate for 
professional posts and 3.5 percent for general service posts. 
 The increased rates notionally result in savings of some $35 
million.  USUN also worked with the CANZ and the G-77 to 
achieve a 2 percent across the board reduction in non-post 
costs, despite some initial opposition from the EU.  This cut 
results in savings of some $13.8 million.  In addition, the 
G-77 identified $10 million savings in the Department of 
Safety and Security (DSS) and $40 million from SPMs, based on 
unexpended 2006/2007 funds, as well as $18 million from the 
Office of Central Support Services (OCSS).  While USUN in 
principle supported cuts proposed for DSS and SPMs on the 
basis of the Final Performance Report, the EU and the CANZ 
initially opposed such cuts. USUN sought to bridge the 
differences between the G-77 and the EU/CANZ in the ensuing 
negotiations, where agreement was reached on reducing the 
savings for DSS to $5 million and the savings for SPMs to $20 
million. 
 
¶5. While working with other Member States to substantially 
reduce budget, the USG repeatedly stressed its concerns on 
the piecemeal nature of the budget.  At the same time, the 
USG warned Member States that the Organization will be faced 
with demands to increase the budget during the course of the 
biennium that could bring the final budget for the biennium 
up to a total of some $5.2 billion, or more.  Such a budget 
would represent a 25 percent increase from the 2006/2007 
budget, the largest in the history of the organization. Refs. 
B, C, D.  USUN was unsuccessful in its efforts to address 
these concerns in connection with the adoption of this 
initial 2008/2009 budget.  In the end, because of those 
concerns and the refusal of the G-77 to compromise on the PBI 
on the Durban Review Conference, USUN called for a vote on 
the budget, both in the Fifth Committee and the General 
Assembly. The USG cast the only no vote in both the Fifth 
Committee (141-1-0) and later the General Assembly (142-1-0). 
See Ambassador Wallace's statement, para 6. 
 
¶6. Statement of Ambassador Wallace in the Fifth Committee on 
the vote on the 2008/2009 biennium budget.  Begin Text: 
 
Thank You Mr. Chairman, 
 
Thank you all for the incredible work during session.  My 
country also expresses sincere thanks to the extraordinary 
work of the fifth committee coordinator for this item Mr. 
Alejandro Torres of Argentina.  Finally I thank all of the 
delegates who worked hard and who did a fine job in 
identifying real cuts to this initial 2008-2009 UN budget. 
Although this statement is ostensibly on the UN budget, we 
believe the most accurate characterization of the resolution 
before us is an "initial" budget.  Why is that?  From the 
outset of our consideration of this matter my country joined 
with the broader UN membership to express our concern over 
the "piece meal" and "ad hoc" approach presented by the 
2008-2009 UN budget.  Moreover, we joined in proposals by the 
broader UN membership that emphasized that some 75% of the UN 
budget is comprised of staff costs. 
 
Today we adopt in essence an initial appropriation of $4.2 
billion.  We applaud all those delegations that worked hard 
to get this initial appropriation down to a manageable level. 
 However, we know that there are significant and many budget 
items deferred and we know that other budget add-ons are in 
the pipe-line.  Accordingly, we are concerned that the final 
2008-2009 budget for the biennium will be significantly 
higher than this initial budget.  We appreciate the 
commitments expressed by the PGA, the Secretary-General and 
many Member States to vigorously adhere to the principle of 
real and credible fiscal discipline in the adoption of the 
final budget.  We will work constructively to that end. 
 
Finally Mr. Chairman, we could not support this budget 
resolution because this budget today contains funding to what 
we refer colloquially to as the "Durban 2 conference."  Our 
political sentiments have been clearly expressed on this 
revisiting of an event that was noxious to my country and a 
disgrace in the International Community.  Unfortunately, the 
objectionable political agenda that seeks to revisit Durban 
has seeped into the fifth committee.  This committee is a 
body of technical experts.  We do not pursue policy agenda's 
here.  Unfortunately the budgetary matter on Durban 2 - the 
purported PBI - is fundamentally and fatally flawed.  These 
technical flaws - unprecedented in the history of this 
 
 
committee - did not dissuade the political advocates from 
pursuing the misguided agenda of Durban 2 without regard to 
the rules, policies, procedures and practices of the 
committee.  We are disappointed in this abuse of the work of 
the fifth committee for these reasons. 
 
With our dear and well founded concerns on the piecemeal 
nature of the budget, concerns on the potential growth in the 
final 2008-2009 biennium budget and the straw that broke the 
camel's back - the PBI on Durban 2 - we cannot support this 
budget.  Again I truly thank the many delegates and members 
of the Secretariat that worked constructively but in vain to 
an acceptable outcome. 
 
Thank you Mr. Chairman. 
 
End Text. 
 
Wolcott