PROGRAMME, BUDGETARY, FINANCIAL, AND ADMINISTRATIVE MATTERS
179. The Council began its consideration of the proposals in the Summary Programme of Work and Budget for 1992-93 with an introductory statement on behalf of the Director-General and with statements by the Chairmen of the Programme and Finance Committees, presenting the conclusions reached on the Outline by the latter committees at their Joint Session in January and, subsequently, on the Summary which was considered at their May sessions.
180. Several members reiterated their positive appreciation for the additional procedure of the submission of an Outline Programme of Work and Budget at an early Joint Session of the Programme and Finance Committees. They considered that this procedure contributed to an enhanced dialogue among Member Nations and between Member Nations and the Secretariat and, thereby, facilitated the achievement of consensus on budgetary proposals. They stressed their expectation that the submission of an Outline Programme of Work and Budget would become a permanent feature of FAO's
181. Other members recalled their perception that the introduction of the supplementary step of an Outline was of a transitory nature, as it was linked to the financial difficulties experienced by the Organization. They reiterated their doubts about the usefulness of the procedure which had not led to consensus approval of the present Programme of Work and Budget, nor to an improvement in the arrears of Member Nations. Further, there was no certainty, as yet, of consensus on the proposals for 1992-93. They also recalled their concern about the costs involved. Therefore, they expressed reservations as to the continuation of this procedure.
182. The Council noted that a document on the programme-budget process would be submitted to the Programme and Finance Committees at their September sessions and that it would, therefore, receive the views of these Committees as a basis for its own recommendations to the Conference on the issue. The Council recalled that the Conference would decide on the eventual continuation of the Outline in the programme budget process.
183. The Council expressed satisfaction with the format of the document. It agreed that it provided the information necessary for its examination by the concerned bodies, in line with its purpose.
184. The Council took note that the initial proposals of the Director- General, as embodied in the Outline, had involved a net programme increase of USS 2.2 million, i.e. 0.34 percent over the recosted budget base. It noted that, in order to facilitate consensus at the January Joint Session of the Programme and Finance Committees, the Director-General had offered to formulate his proposals in the Summary with no real programme increase. The Committees had, therefore, been able to recommend, by consensus, that the Director-General proceed with the formulation of the Summary Programme of Work and Budget, maintaining the current level of the budget in real terms, respecting the programme priorities endorsed by the Committees and containing cost increases to the maximum extent possible, while providing for the requirements for the implementation of the Programme of Work approved by the Conference.
185. The Council observed with concern that the absence of a real programme increase had entailed a trade-off between global priorities and programme areas specifically targeted for increased resources in the 1992-93 biennium, and selected areas which had undergone cuts, including the Regional Offices and a number of technical and economic sub-programmes.
186. A majority of members expressed concern with the lack of additional resources for FAO programmes at a time of ever greater challenges affecting the world food and agriculture situation. They stressed that FAO should be given the means to assist Member Nations in facing up to these challenges. They underlined the fact that the lack of a real programme increase would make it difficult for FAO to respond positively, especially in view of the debilitating effect of protracted financial difficulties on the Organization. They recalled, in this connection, their opposition to the policy of "zero growth" which had been pursued by some governments vis-ŕ-vis organizations of the UN system, but which had never been accepted by the FAO Conference.
187. Several members recalled the "zero real growth" principle as an important way of achieving budgetary restraint in the UN system. Others, although opposed in principle, to "zero real growth", supported it as a means of achieving consensus. It was felt that the Director-General could have proposed more vigorous shifts in order to strengthen high-priority areas and that other measures could have been taken to reduce the overall request for resources.
188. Various members underlined the importance of not increasing assessed contributions excessively, in the light of difficulties experienced by their countries in meeting foreign exchange obligations. due, inter alia, to the burden of external debt.
-Global priorities and areas of increased resources
189. The Council endorsed the global priorities and areas specifically targeted for increased resources; environment and sustainable development, biological diversity including plant genetic resources, agricultural data development, women in development, policy advice, the Technical Cooperation Programme, the International Conference on Nutrition, forestry, strengthening of the FAO country representations and cooperation with other international organizations and NGOs.
190. Diverse views were expressed on the above priorities, as well as on specific activities to which individual members attached importance. Detailed views on the proposals available in the reports of the Committee on Agriculture, the Committee on Fisheries and the Programme Committee were also recalled. The Council was assured that these comments and recommendations would be taken into consideration in the formulation of the full Programme of Work and Budget.
191. In connection with policy advice, the Council expressed sympathy for the particular requirements of centrally-planned economies, especially in the countries of Central and Eastern Europe which were undertaking reform of their agricultural and rural development policies. It expressed the hope that FAO would be in a position to assist them in this process.
192. The Council also underlined that the priority on agricultural data development, especially through the full implementation of the World Agricultural Information Centre (WAICENT) project foreseen by the end of 1992, underpinned FAO's work on policy advice.
193. Many members underlined the modesty of the net increase provided to Major Programme 2.3, Forestry, in the present context of heightened expectations of active FAO involvement in the struggle against tropical deforestation and in the world-wide protection of forests. They noted that the net increase for the Forestry Department at Headquarters would, in fact, be somewhat higher, but not of the magnitude they would have wished.
194. The Council noted that a number of selected FAO technical and economic activities had been affected by net reductions in resources. Many members expressed regret at seeing specific areas to which they attached importance, being subjected to reductions in resource levels. In particular, the net decrease under Major Programme 2.2, Fisheries, was noted with concern and it was hoped that it could be reversed.
195. Several members regretted the proposed substantial cuts in the provisions for FAO Regional Offices. They stressed the valuable contributions of these offices to fostering inter-country cooperation in their respective regions and the need to maintain an effective FAO presence at the regional level as an essential complement to the country offices, thereby giving full meaning to the policy of decentralization.
196. Some members made suggestions of specific areas where, in their view, further reductions or possible economies could be made, such as in the use of consultants or by streamlining publications and meetings and economies in general operating expenses.
197. The catalytic role of the TCP and its valuable contribution in meeting urgent needs of assistance to Member Nations was reiterated.
198. The majority of members, while welcoming the proposed increase for TCP, regretted that it had not been possible to meet the target of 17 percent embodied in Conference Resolution 9/89. They also expressed their disappointment that the percentage share of TCP would decline despite this increase. However, in the interest of consensus they expressed their support for the proposed increase and hoped that the level of 17 percent would be possible in successive biennia.
199. The Member Nations from the Asia and Pacific region pointed out that the trend of TCP allocations of 23 to 24 percent for their region was not in consonance with the actual needs of the region based on the size of its population and prevailing poverty levels. They asked for an increase in TCP allocations for the Asia and Pacific Region in conformity with the needs and the due share of that Region.
200. Some members did not consider that there was a need to provide a net increase for TCP at this juncture, and were concerned that this increase had entailed cuts in other valuable programme areas. Some of them recalled their wish for more information on the TCP to be provided and a clearer role for Member Nations in the decision-making process.
201. The Council gave its broad endorsement to the proposed International Cooperative Programme Framework for Sustainable Agriculture and Rural Development (ICPF/SARD), as outlined in a supplement to the Summary Programme of Work and Budget document, which was linked to the overall priority on environment and sustainable development. It looked forward to more detailed proposals to be submitted to the Conference.
202. The Council stressed the considerable requirements for resources to give concrete expression to Member Nations' own efforts towards environmental protection and sustainable development. It expressed the hope that the proposed framework would lead to increased extra-budgetary support to FAO programmes. Some members were of the view that FAO should not channel resources away from the scarce means available to the Regular Programme toward environmental conservation activities, unless they were in line with the highest priorities of the beneficiary countries.
203. The Council noted that the estimate of coat increases given in the Summary Programme of Work and Budget had been made on the basis of the established methodology and, as usual, had been subjected to a detailed review by the Finance Committee. It further noted that a substantial part of these estimated cost increases was linked to decisions and facts already taken or known. It was informed that additional provisions needed for some cost: increases had not been included deliberately by the Director-General in order to contain the overall level. The Council looked forward to an updated analysis in the full Programme of Work and Budget.
204. Some members recalled their government's policy to seek maximum absorption-of non-discretionary cost increases by organizations of the UN system. These members considered the present estimate, amounting to 15.3 percent of the budget base, as too high and stressed their expectation for a reduced provision in the full Programme of Work and Budget., and some stressed the effect on members assessments.
205. The majority of members underlined that the enforced absorption of cost increases was tantamount to accepting a net reduction in real terms of FAO programmes. If pursued over successive biennia, they felt that this would rapidly lead to paralysis and, ultimately, an irreversible decline of the Organization. They stressed that it was essential to provide for a realistic provision for cost increases to maintain the integrity of the programme eventually approved by the Conference, particularly in view of the evidence of the damaging impact of systematically under-estimated provisions in recent biennia.
206. In connection with the lapse factor, some members suggested that the lapse factor deduction was too low and should be brought back to its previous level of 5.5 percent, or another factor more reflective of the current vacancy rate.
207. The majority of members, however, underlined that the present level of the lapse factor was set by the last Conference as a prerequisite for the full implementation of the Programme of Work and Budget and, therefore, did not see any justification for a change at a time when it was essential to guarantee such full implementation.
208. With regard to the impact of the Lira/US dollar exchange rate, the Council noted that current rates were close to the budget rate of Lire 1335 to the US dollar, adopted by the FAO Conference in November 1989. If such rates were to continue, the exchange rate would have no impact on the budget level. Were the US dollar to strengthen further by the time of the next Conference, this could even lead to a lower budget level. However, exchange rates were unpredictable and could go in either direction.
209. The Council expressed unanimous satisfaction that, on the basis of the suggestions made by the Director-General, the Programme and Finance Committees, at their Joint Meeting in January 1991, had reached a consensus on the preparation of the Summary Programme of Work and Budget for 1992-93.
210. Building on this propitious start, the Council stressed the importance of a consensus at all subsequent stages up to and including the approval of the full Programme of Work and Budget for 1992-93 by the Conference at its Twenty-sixth Session in November.
211. The Council was satisfied that the Summary Programme of Work and Budget 1992-93 submitted by the Director-General responded to the recommendation of the Programme and Finance Committees, to maintain the current level of the budget in real terms, to respect the programme priorities endorsed by the Committees and to contain cost increases to the maximum extent possible while providing for the requirements for the implementation of the Programme of Work approved by the Conference.
212. The Council agreed that the Summary Programme of Work and Budget represented a genuine effort to compromise between the need to meet well-recognized priorities affecting pressing requirements for FAO action and the need to contain assessments. It expressed the hope that a renewed consensus on the budget would lead, through the timely payment of contributions, to an end to the protracted financial difficulties experienced by FAO.
213. The Council endorsed the selection of substantive areas specifically targeted for net increases in resources, and generally supported the approach to the shifts in resources. It agreed that the full Programme of Work and Budget should maintain momentum of action in high-priority areas.
214. The Council generally accepted the estimates of the cost increases provided in the Summary, and recognized that these would be further reviewed during the formulation of the Programme of Work and Budget and by the Finance Committee, as well as the Council, prior to submission to the Conference. While recognizing that a realistic provision for cost increases was necessary to permit implementation of the Programme of Work and Budget as approved, in the interest of reducing the burden on all Member Nations, the Council expressed the hope that the Director-General would seek to contain the total level of the cost increases as much as possible, while providing for the implementation of the Programme of Work approved by the Conference. One member expressed reservation that the need to reduce cost increases was not highlighted sufficiently.
215. The Council accordingly reached a consensus in inviting the Director-General to proceed to finalize his proposals for the full Programme of Work and Budget on the basis of the Summary and the Council's reactions to it. The Council expressed the unanimous hope that the Conference would see its way to adopt the Programme of Work and Budget 1992-93, by consensus.
Report of the Sixty-second Session of the Programme Committee
2
216. The Council considered with appreciation, the views of the Programme Committee on the Summary Programme of Work and Budget 1992-93 and on UNDP Support Cost Successor Arrangements under the respective items of its agenda.
217. The Council reviewed the reports on the two sessions of the Finance Committee. It noted with concern that, in spite of appeals for the timely payment of assessed contributions, the financial position of the Organization had continued to deteriorate. (See paragraphs 218 - 223 below).
218. The Council took note of the Director-General's Annual Report of Budgetary Performance to Member Nations for 1990. It noted that expenditure and commitments for 1990, at 44 percent of the biennial budget, were in line with the forecast. It was further informed that, due to increases in General Service salaries, rates of contributions to the Pension Fund, social security and education grants, which had developed or been decided after the finalization of the Programme of Work and Budget, staff costs were expected to exceed the budgetary provision by some US$16.6 million by the end of the biennium.
219. The Council noted that, in accordance with the decision of the Eighth Session of the Conference (1955), the FAO Scale of Contributions for the years 1992-93 (Appendix E) had been derived directly from the United Nations Scale of Assessments, in this case the one in force during the year 1991 as established by General Assembly Resolution 43/223 of 21 December 1988.
220. The Council accordingly recommended the following draft resolution for adoption by the Conference:
SCALE OF CONTRIBUTIONS 1992-93
THE CONFERENCE
Having noted the recommendations of the Ninety-ninth Session of the Council;
Confirming that as in the past FAO should follow the United Nations Scale of Assessments subject to adaptation for the different membership of FAO;
221. The Council recalled the measures already taken by the Conference and the Director-General to protect the Programme of Work and Budget from exchange rate fluctuations, in particular Resolutions 27/77, which had established the Special Reserve Account and 17/89, which determined that gains and losses arising from the purchase of currencies at rates different from the UN Operational Rates of Exchange and revaluation of the Organization's currency holdings should also be charged or credited to the Special 'Reserve Account. The Council also noted the actions taken and intended by the Director-General to enter into forward contracts for the purchase of Lire to seek further protection against the uncertainties of currency fluctuations. The Council was informed that although the provisions in the original Conference Resolution were general, the Director-General had so far only charged additional costs arising in respect of staff costs. However, the Organization incurred substantial expenditure in Lire for non-staff costs, such as rent, maintenance, utilities, which were charged to Chapter 6 of the budget. To date, additional costs for these services due to adverse movements in the exchange rates had had to be absorbed within the budget.
222. The Council endorsed the Finance Committee's approval of the Director-General's proposal to apply to the Special Reserve Account any additional costs arising in respect of these expenditures for non-staff costs due to adverse movements in exchange rates.
223. The Council noted the comments of the Finance Committee regarding its examination of the alternative courses of action which had been submitted to encourage more timely payments of contributions to permit the Director-General to implement the approved Programme of Work and Budget. It agreed that penalty schemes would not achieve the desired objectives and could have a discriminatory effect on Member Nations. It noted that the Secretariat would further develop proposals for incentive schemes and present details of how procedure could operate by applying discounts for early payments. It also noted that at the same time, the Secretariat would propose plans which would be designed to encourage Member Nations to make more timely payments of their contributions as called for in the Basic Texts.
224. The Council was informed of the major decisions tken by the UN General Assembly at its 45th Session (1990) pursuant to the Annual Report of the ICSC, in particular, the revised scale of salaries for staff in the- Professional and higher categories, which took effect on 1 March 1991; the revision on a provisional basis of the rental subsidy scheme for Headquarters location with effect from 1 January 1991; and the adjustment of the maximum level of the education grant in selected currency areas as from the school year in course on 1 January 1991. It noted that as the revised salary scale would be used in conjunction with the separation payments and the mobility and hardship allowance, there would be additional cost implications for the Regular Programme.
225. With regard to pension matters the Council noted the decisions of the 45th Session of the UN General Assembly (1990) for dealing with staff in the Professional or higher categories concerning the elimination of the "interim currency floor" measures; the approval of a transitional arrangement for the establishment of a "personal floor" to determine initial retirement or early retirement benefits in local currencies; and the procedure for automatic adjustments of pensionable remuneration.
226. The Council took note of the concerns of the Director-General regarding the serious problems affecting the pensions of staff in the Professional and higher categories and supported his initiatives which were being pursued through the ACC, in seeking appropriate modifications to preserve the stability and strengthen the pension system.
227. The Council took note of the movements in the Rome post adjustment classification for the staff in the Professional and higher categories. It further noted that, following the implementation of the Comprehensive Review for the Professional and higher categories in July 1990, the effects of inflation were calculated separately and were measured by the cost-of-living index. A new class of post adjustment would be granted on a full five percent increase unless a freeze had to be put into effect as a result of margin considerations.
228. With regard to the General Service staff at Headquarters, the Council noted that, in accordance with the decision10 taken at its Ninety- eighth Session, a new salary scale with all biennial steps had been implemented effective 1 January 1991. A further interim adjustment amounting to a net increase of 4.19 percent had been implemented in March 1991 with retroactive effect to 1 January 1991.
229. The Council was informed that Mr A. Garrido Acuna (Chile), Member of the FAO Staff Pension Committee, appointed by the Conference to the FAO Staff Pension Committee at its Twenty-fifth Session in 1989 for the two- year term 1 January 1990 to 31 December 1991, had departed from Rome on reassignment.
230. Under authority delegated by the Eighth Session of the Conference, the Council decided that the unexpired term of this Member of the Committee should be completed by Mr Fernández Illanes (Chile).
231. The Council noted the status of contributions at 10 June 1991, compared to the same date in 1990, as follows, as well as the details of amounts received from each Member Nation during 1991 and of outstanding contributions, as shown in Appendix F to this Report.
|
(for comparison) | |||||
|
1991 |
1990 |
||||
|
US$ |
us$ |
||||
|
Amounts outstanding at 1 January |
|||||
|
Current assessments |
278 750 000.00 c |
278 750 000.00 c |
|||
|
Contributions in arrears |
162 518 104.25 |
150 863 173.02 |
|||
|
Total |
441 268 104.25 |
429 613 173.02 |
|||
|
Receipts 1 January to 10 June |
|||||
|
Current assessments |
121 778 200.83 |
128 365 006.19 |
|||
|
Contributions in arrears |
6 983 061.89 |
6 728 325.44 |
|||
|
Total |
128 761 262.72 |
135 093 331.63 |
|||
|
Amounts outstanding at 10 June |
|||||
|
Current assessments |
156 971 799.17 |
150 384 993.81 |
|||
|
Contributions in arrears |
155 535 042.36 |
144 134 847.58 |
|||
|
Total |
312 506 841.53 |
294 519 841.39 |
|||
a Appendix F sets out full details of receipts during 1991, (US$128 761 262.72) and outstanding contributions of all Member Nations.
b Contributions in arrears include arrears payable under Conference authorizations by instalments due in 1991 (in 1990 in comparative figures) and in future years (on 1 January 1991, US$37 139.54 due in 1991 and US$136 664.32 due in future years).
c Of which US$350 000.00 relates to the Tax Equalization Fund.
232. The month-end cumulative percentages of 1991 assessments received during more than five months of 1991, as compared to receipts during the preceding four years, were shown in the following statistics.
Percentages of Current Assessments Received
|
Cumulative - year to date |
|||||
|
1991 |
1990 |
1989 |
1988 |
1987 a |
|
|
% |
% |
% |
% |
% |
|
|
January |
6.29 |
13.33 |
9.81 |
7.01 |
10.41 |
|
February |
30.57 |
27.33 |
24.28 |
20.62 |
24.25 |
|
March |
35.41 |
35.55 |
31.25 |
31.10 |
32.40 |
|
April |
36.88 |
39.16 |
34.60 |
33.92 |
44.75 |
|
May |
43.66 |
45.98 |
41.31 |
43.51 |
50.38 |
|
June |
43.69 b |
46.27 |
45.82 |
53.03 |
61.00 |
|
July |
48.51 |
48.24 |
54.38 |
63.25 |
|
|
August |
49.29 |
48.38 |
60.96 |
63.78 |
|
|
September |
52.70 |
62.73 |
61.92 |
64.47 |
|
|
October |
66.31 |
65.75 |
65.20 |
65.77 |
|
|
November |
79.77 |
67.30 |
76.00 |
66.15 |
|
|
December |
88.10 |
74.83 |
76.65 |
66.17 |
|
a Includes US$17 354 871.34 (8.73 percent of 1987 assessments) as distribution of the cash surplus of the 1984-85 biennium applied as of 1 January 1987.
b Receipts at 10 June; preceding years at month-end as well as at 31 December.
233. At 10 June 1991, the position of Member Nations (and the number of Member Nations with arrears) with comparative figures at the same date during the preceding four years was as follows:
|
Number of Member Nations |
||||||
|
Current Assessments |
Arrears |
|||||
|
% Received |
Paid in Full |
Part Paid |
No Payment |
Total |
||
|
1991 |
43.69 |
34 |
17 |
106 |
157 |
82 |
|
1990 |
46.05 |
42 |
19 |
96 |
157 |
60 |
|
1989 |
43.58 |
36 |
23 |
99 |
158 |
61 |
|
1988 |
47.05 |
35 |
42 |
81 |
158 |
53 |
|
1987 a |
57.40 |
52 |
20 |
86 |
158 |
55 |
a To facilitate comparisons, applications of the cash surplus (9.20 percent) to the current assessments of 80 Member Nations areexcluded from the number of Member Nations.
Percentages of Current Assessments
(Cumulative Receipts — Year to Date)
234. The Council was informed that, at 10 June 1991, receipts of the 1991 assessments were lower than those of three of the four previous years.
235. Only 34 Member Nations had paid their assessments in full, while 17 Member Nations had made only a partial payment, leaving 106 Member Nations who had made no cash payment at all in 1991.
236. The Council noted with concern that, at 10 June 1991, a total amount of US$155 535 042.36 of arrears of contributions remained outstanding, including US$129 759 879.04 overdue from the largest contributor. As at 10 June 1991, 36 Member Nations had made cash payments, of which 12 had paid their arrears in full. Amounts of more than US$1 million were due from 9 Member Nations, totalling US$148 304 793.82 and representing 94.34 percent of arrears outstanding.
237. Of the total amounts due at 1 January 1991 amounting to US$3 325 493 and US$1 865 444 respectively, 3 Member Nations had made cash payments as at 10 June 1991, leaving balances of US$3 275 026 and US$1 832 470 respectively outstanding on that date.
238. Notwithstanding the Director-General's special appeals to Member Nations for payment of their arrears and outstanding contributions, 123 Member Nations had made no payment, or only partial payment of 1991 assessed contributions, and 82 Member Nations owed arrears for 1990 and prior years.
239. All Member Nations were therefore urged once again to pay their outstanding arrears and current assessed contributions in full as soon as possible, in order that the Organization might execute its approved programme of work. Furthermore, in view of the critical financial position of the Organization, the Council requested Member Nations to advise the Director-General, as soon as possible, as to the amounts and timing of the expected payment of their contributions and outstanding arrears. Such Member Nations should endeavour to indicate the approximate dates on which they would make their payments.
240. The Council noted that the amount of US$18 million which had been advanced to the General Fund at 31 December 1989, to finance budgetary expenditures pending receipt of contributions, was reimbursed at 28 March 1991 from receipts of contributions. In the 16 months to April 1991, US$0.2 million had been received from Member Nations in respect of the authorized increases in the level of the Fund, bringing the cash balance on the Fund at 30 April 1991 to US$18.2 million.
241. The Council noted that due to the continued unfavourable movement in the Lire/US Dollar exchange rate, additional staff costs amounting to US$15.5 million had been incurred and charged against the Special Reserve Account. An amount of US$0.2 million had been received from Member Nations for the 16 months to April 1991 in respect of the special assessment of 1988. In addition, over the same period net profits on exchange of US$3.3 million had been credited to the Account, bringing the balance at 30 April 1991 to US$5.4 million.
242. The Council was informed of the Director-General's forecast of the cash flow position of the Organization to the end of the biennium. This consisted of various scenarios based on certain assumptions regarding the receipt of contributions of major contributors, who had not so far made any payments in 1991. According to the Director-General's assessment of the best case scenario in which payments were assured in the order of US$38 million during July, internal borrowing could be deferred until September and external borrowing deferred until October. According to the Director-General's worst case scenario in which it was assumed that no substantial payments were to be made for the rest of the year, internal borrowing would need to begin in July, external borrowing would begin in August and total borrowing would progressively increase to an unprecedented US$125 million by year end.
243. The Director-General informed the Council that he had and would continue to appeal for payment of outstanding arrears and contributions. However, if substantial receipts were not forthcoming in July, he intended to exercise the Authority to Borrow as provided for in Council Resolution 2/80 and confirmed in Conference Resolution 14/83. The Director-General also informed the Council that as the Working Capital Fund and Special Reserve Account were not adequate, he would also consider submitting proposals to the Finance Committee to increase the Working Capital Fund and Special Reserve Account to minimize the need for future external borrowing.
244. The Council expressed concern with the deterioration in the cash flow position. The Council in general was dismayed at the critical financial position and the adverse effects this was having on the implementation of the approved Programme and stressed the importance of timely payment of contributions. The majority of the members recognized that the Director-General had no other solution than to resort to borrowing in the absence of such payments. Other 'members, indicated that they were in principle opposed to external borrowing by UN organizations because it did not foster budgetary discipline. They considered that expenditure reductions in amounts sufficient to remain within available cash resources would be preferable to borrowing. Some of them indicated that they had legislative or procedural prohibition against paying associated interest costs.
245. The Council was informed that it was impossible for the Director General to make reductions of this magnitude to the Programme because it had been approved by the Conference. Furthermore these reductions were difficult for the following reasons: (a) many Member Nations had yet to provide information concerning the amount and timing of their outstanding payments, (b) Programme reductions of the amount potentially involved could not be made without seriously undermining the viability of the Programme and its priorities, and (c) a major portion of expenditures involved contractual obligations in that approximately 70 percent of expenditure consisted of personnel-related costs, and the termination of staff and cancellation of contracts would result in far greater costs being incurred than the cost for borrowings in the amounts as described above.
246. While noting the serious reservation of some members on external borrowing, the Council generally supported the Director-General's proposed actions, which it considered to be the most appropriate course of action to be taken under the circumstances so long as large amounts of contributions remained unpaid.
247. The Council approved the revised Calendar of Sessions for 1990-91 of the Council and of those Bodies which report to it, as given in Appendix G to this report.
1CL 99/3; CL 99/3-Corr.l; CL 99/3-Sup.l; CL 99/3-Sup.1-Rev.1
(E only); CL 99/3-Sup.1-Corr.1 (A/F/S only); CL 99/4; CL 99/8; CL 99/PV/9; CL 99/PV/10; CL/99/PV/19.
2CL 99/8; CL 99/PV/15; CL 99/PV/19.
3CL 99/4; CL 99/8; CL 99/PV/15; CL 99/PV/19.
4CL 99/8 paras. 3.18 - 3.22; CL 99/8 Appendix A
5CL 99/8 paras. 3.44 - 3.47
6CL 99/8 paras. 3.48 - 5.53.
7CL 99/8 paras. 3.58 - 3.65.
8CL 99/8 paras. 3.66 - 3.71.
9CL 99/8 paras. 3.72 - 3.75.
10CL 98/REP para. 196.
11CL 99/24; CL 99/PV/18; CL 99/PV/19.
12CL 99/LIM/1; CL 99/PV/1; CL 99/PV/2; CL 99/PV/19.
13 CL 99/8; CL 99/LIM/2; CL 99/PV/1; CL 99/PV/2; CL 99/PV/19.
14 CL 99/14; CL 99/PV/18; CL 99/PV/19.
