Remarks at the Opening Session of the Fifth Committee Main Session of the 68th General Assembly

Ambassador Joseph M Torsella
U.S. Representative for UN Management and Reform 
New York, NY
October 3, 2013




AS DELIVERED

Good morning Mr. Chairman, and congratulations on assuming the chair of this important Committee. The United States is confident that under your leadership we will enjoy a successful and timely conclusion to this session. We also wish to recognize and thank the bureau members, new and old, and the talented Secretariat staff for their service, and to say “welcome back” to all of our colleagues.

Mr. Chairman, this session will be an unusually consequential one for the Fifth Committee. Against the background of global financial pressures and widespread calls for a more efficient UN, in recent years the UN has told taxpayers everywhere that it hears their concerns, and that when it comes to how the UN manages itself and their money, this Committee and the Secretariat have been writing a new – and very different -- story. Our sessions of 2011 and 2012 were the early and middle chapters of that story. But in this session -- when we will approve a final 2012/13 budget, adopt an initial 2014/15 budget, and address common system costs and issues -- we will write the concluding chapters. And we have a choice: we can either consolidate our gains and reinforce the promising new narrative that has developed, or end with a depressing plot twist back to business as usual.

So before we look forward, let’s review the story so far.

In the first decade of this century, the Regular Budget of the UN rose regularly, predictably, and dramatically. From the 2000/01 to the 2010/11 biennium, the average biennium to biennium to biennium increase was 15%.

Date: 10/10/2013 Description: UN Budget Chart © UN Image
 
 
Many factors contributed to that growth, but the fundamental, long-term causes of that trend were not external events beyond our control, or special political missions (SPMs), or some of the other explanations we commonly hear. Yes, SPMs increased, but as we all know they have been a core part of the Organization’s mission since its very first days, and by definition they will ebb and they will flow. Moreover, if we look at the budget without SPMs, it still shows the same steady and upward climb. And yes, the cost of doing business around the world is a perennial challenge to the UN as it is to all of our governments.

 

Date: 10/10/2013 Description: UN Budget Chart © UN Image
 
 
But the real causes of that ascent, the primary drivers of UN budget growth, have been the failure to effectively manage the number and total cost of UN posts, a broken budget process, and a culture that sometimes treats budgets as temporary suggestions rather than binding envelopes.

So when we met two autumns ago, we decided to chart a new, more responsible, course. We recognized that every dollar, yen and euro, every yuan, peso, real and rand sent to the UN represents the hard work of a taxpayer somewhere. And that any dime, cent or sen that’s wasted at the UN is worse a wasted opportunity to buy another malaria net, provide lifesaving food assistance to the malnourished, or to upgrade the sophisticated equipment used by IAEA nuclear safety inspectors. We all recognized that ultimately only an affordable United Nations is a sustainable United Nations. And we recognized that a continuation of our past pattern of unchecked budgetary growth would soon have grave consequences for the organization, which depends on member states to provide resources in a time of stagnant and shrinking national budgets.

And on Christmas Eve morning 2011, we agreed on an historic regular budget assessment of $5.152 billion for the 2012-2013 biennium. Building on the Secretary-General’s initiative to reduce the budget without reducing mandate delivery, the initial budget we agreed to was meaningfully lower than the final level of actual expenses for the previous biennium for only the second time in 50 years.

Now we’ve always recognized that given the unfortunate realities of UN budgeting and the uncertainties of our world, that initial budget level would surely increase over time. But we supported, then as now, any reforms in the UN budget process that keep American families’ money in American families’ pockets for as long as possible, as this budget did with its deferral of the consideration of recosting. And we supported that initial level because, simply put, we knew that even with inevitable increases along the way, any budget that starts at a lower level would end at a lower level than would otherwise have been the case.

And those inevitable increases came, for both good and bad reasons. One year ago, after reviewing the first performance report, we approved a revised 2012-2013 budget level of $5.396 billion.

At the same time, we approved a budget outline for 2014/15 of $5.392 billion. Notably, that budget outline – because it finally began to tackle structural overlap and deal with obsolete, vacant, and redundant posts – contained the promise of what the ACABQ memorably called the “significant and structural savings” that the Advisory Committee found lacking in the Secretary-General’s 2012/13 budget. And we took our first, tentative step towards controlling compensation costs, by agreeing to a modest six-month pay freeze for UN employees at a time when the pay freeze for U.S. government employees was entering its third consecutive year.

Taken together, those actions charted a very different trajectory for the years 2012 through 2015 than for the preceding twenty. Instead of out-of-control growth, we established a very different potential trendline for the UN, one which responds to the current fiscal climate with some appropriate – and long overdue – belt-tightening and restraint.

Date: 10/10/2013 Description: UN Budget Chart © UN Image
 
 

Mr. Chairman, it’s customary in these opening statements to talk about when we hope the session will end. And the United States joins everyone in this room, I would imagine, in the fervent hope that we can conclude our work well before December 24 or even better as of December 13 as you suggest.

But today it’s more important for us to share with you, and with our colleagues, the “what” rather than the “when”: the accomplishments that would enable the United States, as the largest single contributor to the UN system, to consider our work here to have concluded successfully.

First, in our consideration of the final performance report for 2012/13, and our adoption of the actual initial budget for 2014/15, we face a simple, stark, and consequential choice: whether to embrace or reject that new course that we all came together to chart. Quite simply, the United States will not support turning back, or continuing the past pattern of unsustainable growth. We recognize that new tasks have been added to the UN’s agenda, but we reject as always an automatic equation between new goals and new money. The Organization must respond to the financial constraints of our time, by -- at a minimum – holding the line on spending.

Second, in our consideration of the final performance report for 2012/13, we will not accept asking our taxpayers to pay for failures of management.

There are two ways UN budgets can change midstream. One is when member states act to add – or perhaps even subtract – programs at the UN. Of the additional $243 million we added to the 2012/13 budget last December, $175 million represented spending in this category, including funds for purposes such as a new SPM in Yemen and new mandates resulting from Rio+20. Such changes are the clear right of member states, and in many cases clearly understandable to our taxpayers.

But the second way budgets change is when the Secretariat does or does not manage to within the number it has been given. And in the interests of understanding each other clearly, I want to speak plainly today about what we agreed to in 2011. We did not agree to simply defer the payment of recosting; we agreed to defer consideration of recosting. “Consideration” does not mean “agreement.” And we supported the deferral on the clear understanding that the Secretariat would strenuously seek to find offsets during the biennium for the additional expenses that recosting might entail. The Secretary General came here the morning we adopted that budget, to promise “to continue finding new ways to make the most of our precious resources…and one year from now return to you with greater cost savings.”

Now we want to recognize some very real and encouraging progress in how the Secretary General and his team have managed. They operated within the actual budget allocation for Special Political Missions that the General Assembly approved, a laudable break from past practice. This has not been easy nor has it been painless: spending on SPMs excluding new mandates such as Yemen and the Sahel has gone down, year-over-year, by $67 million, a 11% cut. New initiatives in managing vacancies and forward purchasing of currency have also been very encouraging. And we are very pleased, indeed, by the efforts we see represented in the 2014/15 budget proposal to begin tackling important structural issues.

But as the Secretariat prepares the final performance report for 2012/13, we look forward to learning of all the steps they have taken to fill the pledge made here two Decembers ago. After reluctantly agreeing to $91 million in recosting for 2012 – and noting again the $67 million cut to the existing SPM portion of the budget -- we would like to know what cuts have been made in the non-SPM portion of the Regular Budget, which as we know totals $4.2 billion, to offset the potential $168 million in recosting that was forecast for 2013. We note that to avoid asking taxpayers to come up with that extra money would simply require a 4% reduction in spending across the whole of that $4.2 billion. We contrast that with the 11% reduction already sustained by existing SPMs from 2012 to 2013. And we are curious what efforts were made, and when, to retain a cushion in order to avoid an additional bill to taxpayers. In our family lives, Mr. Chairman, if we know that a bill we can’t afford will be coming our way at the end of the month, we start pinching pennies at the beginning of the month to make room for it.

Third, we can not agree to a 2014/15 budget that does not also take steps to fix a fundamentally broken process, especially around so-called “recosting.” “Recosting,” UN style, does not exist in the world outside these walls. It uses an abstruse and technical vocabulary to disguise what are mostly changes in UN staff costs that happen after we’ve approved the budget. Yes, exchange rates change, but governments and multinational firms everywhere find ways to protect against such fluctuations without resorting to changing budget targets every few months, a process that is corrosive to any real budget discipline at the UN. It’s time to stop calling changes in UN compensation “inflation” to suggest that some sort of unavoidable, external event is at work. It’s time to stop pretending that a mysterious “methodology” is beyond the power of sovereign member states to change. It’s time to stop leaning on recosting as an excuse, and either fix it, or forget it.

Fourth, the United States renews our call for new tools to rein in spiraling UN staff costs. As we’ve frequently said, we are deeply, deeply grateful for the work of the vast numbers of UN staff who serve with distinction; many perform heroically, and often in difficult conditions. We are similarly grateful to the men and women in our own government who serve the citizens of the United States; there are no harder-working, more creative, or more dedicated public servants than they. And so, despite our appreciation for UN staff, we simply cannot justify historically high and soaring UN compensation levels that are now significantly out of step with the average US civil servant’s salary – the official comparator -- even before generous and unique UN benefits are considered. We note that several common system organizations are finding that the continued increases in staff costs are unsustainable and adversely impacting program delivery. Some are already considering staff reductions to lower costs. We further note, as we have before, that the failure to control staff costs is our fault, management and member states, not the fault of the UN employee, and that we do a real disservice to the talented members of the international civil service by ignoring a fundamental problem that, if not addressed sooner, will result in more draconian measures later. So if we want to preserve the common system’s continued effectiveness and viability, we cannot leave this session without acting on this urgent challenge.

Fifth, we will not walk along the easy path of bemoaning problems without also identifying solutions. In this, as in much of what I’ve discussed, let’s be clear, there is blame to go around. For us member states, let’s stop supporting efficiency in the abstract but opposing it when it comes to inconvenient specifics. The United States calls for a new commitment – and new mechanisms – to paying-as-we-go, by specifying equal expense reductions or elimination of obsolete programs to fund new spending requirements imposed on the UN.

And to the Secretariat, we say again as we said here last year: if you believe yourselves to be constrained from managing within the actual budget numbers we approve, then present us with specific, actionable proposals for giving you the authority and accountability you believe you lack. And if a thicket of obsolete and overlapping mandates is tying your hands, as the Secretary General suggested in January of this year with his call for reviewing mandates, then we invite you to present us with specific, actionable proposals for changing that.

Finally, and crucially, I want to say a special word to my colleagues in the G77 + China that we should not lose sight of our common interests here. They are often greater than some want each of us to believe. Anyone encouraging a zero-sum dynamic between you and the major contributors, where defining a win for us is defined as a loss for you and vice-versa, is serving parochial and special interests, most likely their own: not yours, not ours, and certainly not the Organization’s. We all know, from our own governments, businesses, and families, that there is not a one-for-one relationship between a new goal – or as we say here at the UN, a new “mandate” – and new money. Which of us would tell our head of state that we can only carry out a new task if we get a new employee to do it? We all know that it’s not only possible to do more with less, it’s often possible to do better with less. And we all know that it’s possible to reduce overall spending, even while sometimes investing more in discrete individual priorities. Many of our families manage to spend less overall while putting aside more, for example, for our kids’ college education fund. So before we retreat to our corners – before we let others encourage us to do so – let’s explore new and creative approaches that meet our mutual needs.

A UN that is both effective and sustainable serves us all. It’s what we owe to the people who sent us here: those who pay for – and those who depend on – the UN. And it’s what we owe future generations.

We will have more to say, Mr. Chairman, on the individual agenda items as they arise throughout the session. But for now, I want to close with the hope and belief that by working constructively and creatively, we will in fact write the final chapter of a new and more responsible fiscal story at the UN in 2012-2015.

I thank you.

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PRN: 2013/174