A.Y. BUKHARI (Chairman, Finance Committee) (original language Arabic) I shall present the two reports of the Finance Committee this morning. Two sessions were held, the first being the 59th Session, the Special Session convened by the Director-General, which met on 15-16 December 1986. The 60th Session, which was the regular one, met from 4 to 14 May.
First and foremost I would like to extend my thanks and appreciation to the Secretariat for theassistance, information and documentation provided to the Finance Committee, and I would like tohighlight their full collaboration, which facilitated the work and deliberations of the FinanceCommittee.
The 59th Session of the Finance Committee concerned itself only with financial matters, and it dealt first with the status of the contributions, and in particular with the status and prospects regarding payments by the largest contributor. This was followed by details of the cash flow forecasts for the remainder of the biennium. The Committee noted with deep concern the further deterioration in the financial outlook, but noted that the outlook should be clearer at the time of the Committee session in May.
The Committee also considered, as mandated by the Council at its 90th Session, alternative approaches to dealing with budgetary and financial uncertainties. Of the several measures presented, the Committee agreed that there should be further indepth studies made on three of the measures, namely, amending present procedures for application of cash surplus; 2, adjusting the treatment of miscellaneous income; 3, increase in the level of the Working Capital Fund.
The Committee decided at that Session, the 59th Session, to return to a further study of the measures it had identified for consideration at its 60th Session in May 1987 and to review the other measures based on further information to be provided to it.
Since both the 59th and 60th Sessions dealt extensively with financial matters, I will initially, if you will allow me, cover the non-financial matters, as is called for in the timetable of the Council under item 17, and then come back to the financial matters that are covered in item 18.
Under Budgetary Matters, I have already reported on the deliberations of the Committee on the Summary Programme of Work and Budget. Also under this item, Budgetary Matters, the Committee reviewed the Director-General's Annual Report on Budgetary Performance, which was submitted for information pending audit of the accounts. The complete report is included as Appendix A to document CL 91/6.
Under Personal Matters, the Committee reviewed a report on the decisions and recommendations of the International Civil Service Commission in 1986 (paragraphs 3.82 to 3.84). In this connection the Committee expressed serious concern over the increasing erosion in the salaries of professional staff, which makes the retention of experienced staff and the recruitment of new staff more difficult. The Committee urged Member Nations to be alert to these facts and to the need to improve conditions of employment within the common system.
Under Organizational Matters, the Committee first dealt with matters relating to relations with the host Government (paragraphs 3.94 to 3.99) and in particular to headquarters accommodation and the application of privileges and immunities specified in the Headquarters Agreement.
The Committee also reviewed several Joint Inspection Unit reports as reported in paragraphs 3.100 to 3.120, and in all cases endorsed the comments of the Director-General on the report.
The Committee then received an information paper on the implementation of Finsys/Persys, which involves the computerization of the financial and personnel activities of the Organization, and acknowledged the progress being made on the project.
Under Other Matters, the Committee reviewed in paragraphs 3.127 to 3.131 a report on programme delivery costs, the preparation of which arose from a discussion at the last session of the Council. In particular the Committee took note of the compression of administrative support expenditures for the Regular Programme between the biennium 1980-81. It felt that a level of 18.8 percent for the overhead costs of delivering the Regular Programme, as shown in the report, appeared to be commendable. The report was considered by the Committee to have contributed to a greater transparency of FAO's activities.
Also under Other Business, the Committee considered the matter of the appointment of the External Auditor for 1988-89 (paragraphs 3.132 to 3.137) in accordance with Regulation XII of the Financial Regulations. It was felt that continuity was critical at this time of difficult financial constraints, and since the Auditor General of the United Kingdom had provided satisfactory auditing service to FAO for many years, the Committee recommended the reappointment of the current External Auditor for 1988-89. The Committee felt that alternatives for future appointments should be considered in the context of this appointment. The Draft Resolution appearing in paragraph 3.136 is placed before the Council for Its approval.
I move now to the Financial Matters under item 18. The Committee again reviewed at its 60th Session the financial position of the Organization and matters related thereto, and these are reflected in paragraphs 3.28 to 3.81 of the report of the Committee. Included therein are the following: (1) A report on the unaudited interim accounts of the Organization for 1986 (paras. 3.28 to 3.33); (2) Contribution Matters (paras. 3.34 to 3.42); (3) Status of Cash Flow and Other Information on the Financial Position and on Programme Adjustments (paras. 3.43 to 3.51); (4) Alternative approaches to dealing with Budgetary and Financial Uncertainties (paras. 3.52 to 3.72); (5) Measures to deal with Delayed Payment of Assessed Contribution (paras. 3.73 to 3.76); (6) Scale of Contributions 1988-89 (paras. 3.77 to 3.81).
With respect to the 1986 accounts, the Committee noted that the excess of expenditure over income resulted in a deficit of over $27 million, which had been caused by non-payment of contributions, a declining dollar and reduction in the level of miscellaneous income from the amount that had been forecast.
As regards Contribution Matters, the Committee noted the status of contributions at 5 May 1987. More current information is available to the Council in CL 91/LIM/1, which reflects the status of contributions through last Thursday, 18 June 1987.
The Committee, as in December 1986, at its 59th Special Session, again reviewed Alternative Approaches to Dealing with Budgetary and Financial Uncertainties, which was in accordance with the recommendations of the Council at its 90th Session and the views of the Finance Committee as expressed at its 59th Session. The Committee reviewed the six alternative measures proposed and concluded that three should be brought before the Council for its consideration as follows: (1) Amending Present Procedures for Application of Cash Surplus (paras 3.56-3.58); (2) Adjusting the Treatment of Miscellaneous Income (paras 3.59-3.64); (3) Increasing the Level of the Working Capital Fund (paras 3.65-3.72).
With regard to Amending the Present Procedures for Application of Cash Surplus, the proposal consists of the Conference delegating authority to the Council to decide on possible deferment of cash surplus until the subsequent Session of the Conference should the Organization be affected by a substantial delay in receipt of contributions during any individual biennium.
With respect to Adjusting the Treatment of Miscellaneous Income, the Committee considered that it would be prudent to discontinue the FAO practice of estimating Miscellaneous Income in arriving at assessed contributions at the beginning of each biennium, since no estimate could be reliable which depended on variables as uncertain as the flow of contributions and the level of interest rates. Also under present procedures a shortfall in actual miscellaneous income placed in jeopardy the full execution of the approved Programme of Work and Budget. While there would be an initial increase in contributions, Member Nations would continue to benefit from actual Miscellaneous Income earned at the time of distribution of the Cash Surplus.
The last of the three proposals involves an Increase in the Level of the Working Capital Fund. The Committee noted that the current level of the Working Capital Fund was only 3% of the current level of the Programme of Work and Budget, and had been steadily declining from the time of its establishment. Following suggestions made by the Council at its 90th Session, for a phased increase, the Committee agreed to the proposal to increase the Working Capital Fund from its present level of US$ 13.25 million to US$ 20 million as from 1 January 1988 and to US$ 26 million as from 1 January 1990.
Dear Brothers, the Council therefore has before it three proposals for consideration to enhance protection against budgetary and financial uncertainties in the long term. If the Council should adopt one, two or all three of the proposals, the Finance Committee will be ready to prepare at its next Session, draft Resolutions for consideration by the CCLM, Council and Conference.
The Committee, at the request of the 90th Session of the Council, again reviewed three specific alternatives to deal with problems of delayed payment of assessed contributions, and decided to propose to the Council one measure which would result in the following changes to Financial Regulation 6.1(b). (a) The interest income element of any future cash surplus should be allocated as follows: (i) only among those Member Nations which were fully paid up at the end of the biennium, and (ii) on a weighted basis, in accordance with the amount and the timing of receipt of their contributions during the biennium. (b) The allocations of all other elements of any future cash surplus, except interest income, should continue to be made in accordance with Financial Regulation 6.1(b), among all Member Nations based on the Scale of Contributions, (c) Distributions of any further cash surplus to Member Nations fully paid up at the end of the biennium should be applied in accordance with Financial Regulation 6.1(b). (d) Distributions of all other elements of any future cash surplus, except interest income, to Member Nations not fully paid up at the end of the biennium, should be applied only after receipt by the Organization of payment in full of assessed contributions due for the biennium.
The Committee felt that these changes would provide a more rational and equitable allocation of Cash Surpluses in the future, which would also serve as an incentive for Member Nations to pay their contributions more promptly.
Should the Council decide to adopt this proposal the Committee will be ready to prepare, at its next Session, a draft resolution for consideration by CCLM, the Council and the Conference.
In conclusion, the Committee also reviewed the Scale of Contributions in accordance with General Rule XXVII. 7(j). The proposed Scale of Contributions for 1988-89 had been derived directly from the United Nations Scale of Assessments in force during 1987. While some Members felt that it might be desirable for FAO to develop its own Scale of Contributions, it was recognized that at this stage it would not be in the best interests of the system as a whole and might involve considerable additional costs. Accordingly the Committee recommends to the Council that the enabling Resolution in para 3.81 be submitted to the Conference.
Mr Chairman, I would like to thank you all for listening and I hope that the Finance Committee which emanated from this Council will enjoy the respect and appreciation of all.
V. J. SHAH (Director, Office of Programme. Budget and Evaluation): May I only offer a brief word of explanation on the first sub-item which is before the Council, sub-item 17.1-Budgetary Performance 1986. This matter is for the information of the Council. In accordance with established practice, we submit each year, first to the Finance Committee and then through the Committee to the Council, the report on budgetary performance for the previous year. In this case you have before you in document CL 91/6, Appendix A, the report which was submitted to the Finance Committee. The report is for information only, pending audit of their accounts. It is in accordance with their usual format and the factual comments of the Finance Committee are given in its own report, CL 91/6, paragraphs 3.22-3.27.
I am, as always, at your disposal to answer any questions but I do not need to add anything further at this stage.
D.K..CROWIHER (Assistant Director-General, Administration and Finance Department) I would like to inform the Council that since the date of preparation of the LIM document which members have before them, which brought the contribution status up through 18 June, we have received three additional payments. I would like to make mention of these.
First, we received from Egypt US$ 130 594 representing payment in full of its balance for 1987 assessment.
Secondly, we received from the Seychelles US$ 11 288 representing payment in full of its balance for 1987 assessment.
Also we were very happy to receive from The Gambia US$ 53 000 representing payment in full of the balance of its contribution for 1985 and 1987; as well as US$ 19 206 against its 1987 assessment.
That brings the cumulative percentages of current assessments received well above 60 percent which we are happy to say is the highest during the last four-year period. At the same time, I think it is important to report to the Council that there remain 89 Member nations who have not sent any cash contribution to the Organization as of this date.
If there are any questions on these matters, we stand ready to answer them.
LE PRESIDENT Nous avons donc à l'ordre du jour les points 17 et 18· Point 17: Rapport du Comité financier. Point 18: Questions financières.
Le point 18 appellera une décision sur chacun des points 18.1, 18.2, 18.3, et 18,4, relatifs aux questions des contributions,-de la trésorerie et des incertitudes budgétaires et financières.
G. C. GARAUSO (Italie) Monsieur le Président, je vous remercie ainsi que le Président du Comité financier, le Directeur général adjoint, M. Crowther, et M. Shah pour la présentation du document, sur une grande partie duquel nous sommes pleinement d'accord, et pour leurs exposés sincères et lucides qui ne cachent pas la situation financière de l'Organisation. Nous croyons, en effet, qu'il vaut mieux ne rien se cacher et adopter une attitude d'extrême responsabilité.
Comme les autres organisations internationales, la FAO doit faire face à des problèmes budgétaires et financiers d'une gravité qui nous paraît sans précédent.
Avec votre permission, M. le Président, j'interviendrai sur l'ensemble des points 17 et 18 de l'ordre du jour.
L'exécution du Programme de travail approuvé pour les deux années 1986-87 a été sérieusement compromise par des difficultés financières graves qui ont obligé le Directeur général à apporter des ajustements pour un montant de 16,4 millions de dollars. La nécessité de réaliser des économies jusqu'à un montant de 25 millions de dollars a été reconnue par le même Directeur général.
Plusieurs facteurs sont responsables des difficultés financières: le grand retard dans le versement des contributions de nombreux Etats Membres, la baisse du taux de change du dollar et des taux d'intérêt et le fait que la réserve spéciale n'est pas suffisante pour équilibrer les pertes. Tous ces facteurs ont abouti à une situation dans laquelle les chiffres sont dramatiquement explicatifs.
Le budget 1986-87 présente un déficit de 21,9 millions de dollars. Les arriérés de contributions s'élèvent à 58 millions de dollars. La réserve spéciale, qui était de 21,9 millions de dollars
- c'est une pure coïncidence si elle correspond au montant du déficit-aura été totalement utilisée pour faire face aux variations du taux de change du dollar. Mais selon le règlement approuvé par la Conférence, il faut la reconstituer. D'une part, il faut faire tout ce qui est possible pour que le nouveau budget 1988-89 ne commence pas avec un déficit de 20,1 millions de dollars et, d'autre part, il faut que les facteurs négatifs mentionnés ne se reproduisent pas dans les deux prochaines années.
En ce qui concerne les arriérés, nous espérons que tous les pays donateurs seront à même de remplir au plus tôt leurs engagements envers l'Organisation.
Nous soulignons combien l'Organisation et tous les pays membres doivent être reconnaissants aux Etats-Unis pour leur générosité, qui vient de loin. Nous sommes certains qu'en ce moment particulier, ce pays-tel que l'a assuré sa déléguée, Mme Vogelgesang, dans son intervention sincère, honnête et constructive de l'autre jour-ne manquera pas de donner suite à son engagement envers les objectifs de la FAO, qui nous sont communs à tous. A cet égard, nous sommes d'ailleurs confortés dans nos voeux par la récente déclaration faite à Venise par les plus grands responsables des pays industrialisés, qui ont rappelé et confirmé leur volonté d'aider le processus de développement dans le tiers monde.
Nous suggérons-et il faut prendre cette suggestion telle qu'elle est, sans prétendre qu'elle représente un facteur résolutif-que certains pays membres, parmi les plus grands donateurs, prennent à leur charge, de façon bilatérale, le financement de quelques projets dans une mesure suffisante-nous pensons, par exemple, à un pourcentage de cinq pour cent des projets prévus-pour libérer le budget des contraintes qui pourront se vérifier à l'avenir.
Pour ce qui a trait au remboursement de surplus, l'Italie a déjà consenti à suspendre, comme on le sait, son droit pour les deux années qui viennent d'échoir. Mais nous sommes prêts, la cas échéant, à différer ces remboursements. Nous exhortons les Etats Membres qui nous ont déjà suivis dans cette voie et les autres à faire de même; et nous suggérons aussi que le Conseil réitère son appel dans ce sens.
En même temps, nous souscrivons à l'idée qu'en règle générale la Conférence puisse déléguer au Conseil le pouvoir de décider de différer éventuellement la distribution de l'excédent de trésorerie jusqu'à la session suivante de la Conférence, au cas où l'Organisation, au cours d'un exercice biennal, subirait des contraintes financières pour des raisons graves et que ce soit le Conseil lui-même qui juge de la gravité de ces raisons et qui évalue, en particulier, si cette gravité est telle qu'elle justifie une pareille mesure.
Pour ce qui a trait à la question évoquée ici par la délégation des Etats-Unis, c'est-à-dire l’opportunité d'une révision, et peut-être d'une réforme-de toute façon, pas une révolution-des méthodes budgétaires et, en particulier, du processus de décision du niveau du budget, j'ai déjà dit lors d'une intervention précédente que l'Italie n'est pas du tout opposée à toute proposition constructive en cette matière, comme en toute autre matière, à l'exclusion de tout empêchement de procédure. Bien que sans instructions de mon gouvernement, je peux d'ores et déjà vous exprimer mon avis qui est favorable à examiner en temps voulu la proposition des Etats-Unis de créer un groupe d'experts Indépendant de haut niveau ou toute autre proposition faite par une délégation ou plusieurs délégations ici présentes visant à créer un mécanisme de ce genre. Evidemment, il faudra étudier ces propositions dans tous leurs détails et avec toute la préparation nécessaire. Nous espérons que le Conseil pourra éclaircir cette question et que la Conférence générale de novembre pourra en discuter. De toute façon, nous souhaitons que l'amélioration des méthodes qui pourra résulter de cet exercice se traduise en une hausse d'efficacité de l'Organisation, comme le Directeur général le recherche depuis longtemps et continuera de le faire à l'avenir, qu'elle se traduise donc en un développement ultérieur et non pas une réduction de l'activité d'un instrument tel que cette institution internationale, qui a déjà maintes fois démontré qu'elle était au service de tous les peuples du monde et en particulier des plus démunis.
B. LEDUN (France) Après un examen attentif des documents CL 91/4 et CL 91/6, notre délégation ne peut que partager les inquiétudes exprimées par les membres du Comité financier. En effet, les ajustements de programmes, aussi justifiés soient-ils, ont une limite au-delà de laquelle toute réduction supplémentaire d'activités risque d'affecter en profondeur les finalités et le fonctionnement de cette organisation.
Ainsi que l'indique le document que nous étudions, deux causes majeures sont à l'origine des difficultés financières de la FAO: premièrement, le défaut de paiement de leurs contributions par nombre d'Etats Membres et, au premier chef, par le principal contributeur; deuxièmement, la
dépréciation du dollar par rapport aux autres devises, et singulièrement la lire italienne qui sert de moyen de paiement pour les dépenses de fonctionnement du siège.
A ces deux motifs d'inquiétude, les soulagements préconisés par le Comité financier nous paraissent avisés et appropriés et nous voulons les reprendre à notre compte. Certes, il est difficile d'utiliser d'autres arguments que la force de conviction à l'égard des contributeurs défaillants. Au principal d'entres eux, nous ne pouvons que redire ici ce que nous avons déjà déclaré à propos de la discussion sur le point 15, à savoir qu'il serait paradoxal de prôner une meilleure gestion de l'Organisation sans se soucier de lui fournir les moyens qui lui sont nécessaires, surtout si l'on veut bien prendre en considération le niveau modeste de progression budgétaire en termes réels.
Aux autres contributeurs défaillants, nous dirons réciproquement qu'on ne peut en toute rigueur rappeler le principal contributeur à ses devoirs qu'à condition de s'être préalablement acquitté des siens.
En ce qui concerne les problèmes liés à la dépréciation du dollar, le document CL 91/4 envisage la possibilité de l'utilisation d'une unité budgétaire fondée sur un panier de monnaies. Nous ne pouvons qu'encourager le Comité financier à poursuivre ses études sur ce point et à faire rapport, dès que possible, sur les possibilités techniques d'une telle mesure qui nous apparaît, en effet, de nature à réduire la marge d'incertitude prévalant actuellement sur les marchés de change. Qu'il nous soit permis ici de recommander au Comité financier l'analyse d'une inclusion de l'ECU dans cette nouvelle donne d'unité de compte budgétaire, l'ECU étant déjà en effet une unité de compte composite dont la lire italienne fait partie au même titre que les autres monnaies de la Communauté économique européenne.
A propos des procédures d'allocation de l'excédent de trésorerie, nous ne sommes pas opposés, en l'état actuel des choses, à un amendement du règlement financier, même si nous sommes plutôt en faveur de la liberté laissée aux pays membres de différer le recouvrement de l'excédent de trésorerie jusqu'à un exercice ultérieur. C'est ce que notre pays a fait, pour sa part, avec son excédent de trésorerie et nous ne pouvons qu'encourager les autres principaux contributeurs à faire de même.
Les difficultés de trésorerie de la FAO sont suffisamment sévères pour que tous les membres de l'Organisation se sentent également interpellés et décident donc d'y pallier chacun dans sa propre mesure. Il est difficile, en effet, sans mesures correctives en profondeur, d'anticiper le cours d'une monnaie. On peut, par contre, agir sur ses intentions. Et ici, c'est à chaque pays qu'il appartient de prendre ses responsabilités, et particulièrement au plus gros contributeur dont le respect de ses engagements doit avoir valeur exemplaire. Sans ce respect des engagements pris, les mesures alternatives n'apparaîtront jamais que comme des palliatifs insuffisants pour permettre un redressement durable sans lequel l'Organisation ne pourra, à son tour, tenir ses propres engagements.
M. LARBI (Algérie) Je voudrais tout d'abord féliciter le Président du Comité financier et le Secrétariat pour l'excellent exposé qu'ils viennent de nous faire sur le rapport des cinquante-neuvième et soixantième sessions du Comité financier et sur les questions financières qui se posent à notre organisation. De même, je les remercie pour la clarté et la qualité des documents CL 91/4 et CL 91/6 qui sont soumis à notre examen aujourd'hui.
Respectant vos consignes, mon intervention sera brève et se limitera à deux remarques essentielles, l'une concernant d'une manière générale la crise que nous traversons et les perspectives sombres qui s'offrent à nous, l'autre de façon plus spécifique portant sur les propositions qui nous sont soumises sur les questions financières.
Ainsi, s'agissant du premier point, les rapports du Comité financier font clairement ressortir une crise financière grave. Les paragraphes 3.27 à 3.41 nous indiquent les facteurs inquiétants et persistants qui ont provoqué une situation déplorable et contraint le Directeur général à procéder à des réajustements importants pour essayer de limiter leurs effets néfastes. Il s'agit, nous le savons, de la baisse du dollar, de la diminution des recettes accessoires et du non-paiement des contributions par les pays membres et surtout par le principal contributeur. Aussi, cette crise s'est-elle traduite par un excédent de dépenses sur les recettes en 1986, par une diminution continue du compte de réserves spéciales et du fonds de roulement.
Par ailleurs, et en ce qui concerne les perspectives, après les coupes sévères opérées dans le budget, les prévisions pour le prochain exercice 1988-89 ne prévoient à peine qu'une augmentation de 0,4 pour cent par rapport à l'exercice précédent, c'est-à-dire une augmentation Insignifiante pour ne pas dire nulle en termes réels. Nous regrettons vivement une telle situation car nous avons affaire à de graves problmes de faim, de malnutrition et développement d'un secteur vital pour les pays en voie de développement qui requièrent pourtant des moyens importants. A ce propos, nous avons
relevé avec satisfaction les efforts méritoires du Directeur général en vue de faire des économies et des ajustements ainsi qu'un souci de privilégier les programmes économiques et techniques pour lesquels une augmentation a été prévue pour le prochain exercice par des transferts opérés au détriment des frais administratifs.
En conclusion de ce point, nous espérons que la note optimiste que nous avons enregistrée avant-hier après-midi constituera une éclaircie qui sera suivie d'un effet concret et qui mettra un terme à cet exercice périlleux de recherche incessante d'économies, tant il est vrai que celle-ci au-delà d'un certain seuil risquent d'être préjudiciables selon la Conférence et comme l'a rappelé hier à juste titre Monsieur le Directeur général.
En second lieu, et au sujet des propositions qui nous sont soumises, les paragraphes 3.77 à 3.81 du document CL 91/6 ne soulèvent pas de commentaires de notre part puisqu'il est question d'une pratique suivie par le système des Nations Unies et conforme aux directives de la Conférence. Par conséquent, nous sommes favorables au projet de résolution à soumettre à la prochaine Conférence.
En ce qui concerne ce point et les deux autres points contenus dans les paragraphes 3.41 à 3.51 et 3.52 à 3.72 du même document, en général et cela ne se traduisant pas par de nouvelles obligations, nous sommes favorables pour soumettre à la Conférence toute mesure visant une plus grande efficacité de la FAO.
Pour terminer, et me tournant vers l'avenir, nous espérons voir cesser progressivement les incertitudes financières et que la situation s'améliorera en vue de permettre à la FAO d'accomplir convenablement la mission qui lui est confiée par nos pays et conformément aux objectifs et priorités que nous avons approuvés au cours de nos débats sur le Sommaire du Programme de travail et budget 1988-89·
G. H. MUSGROVE (Canada) We would like to thank our colleagues the Chairman of the Finance Committee, Mr Bukhari, for his rather full introduction of the work of the Finance Committee, and as always we are grateful for the effort that he has put into it, and to Mr Shah for his few brief remarks as well.
We would like to join the others in expressing our concern about the financial situation of the Organization, and to express our hope that arrears in contributions will be soon forthcoming and that our Organization will be back as soon as possible to a firm financial footing. As it is there is a good deal of concern in our delegation that the deficit that we will be looking at at the end of this biennium-most optimistically I believe put forward at $53 million and perhaps more could be substantial. We are looking perhaps most optimistically at a shortfall at the end of our current biennium of some $53 million, and indeed suggesting that this could, if worst events hit upon us, face something even more substantial than that. This of course would be a mortgage on the next biennium to some extent, and would have severe impact on the finances and subsequently on the Programme for 1988-89. So it is in the light of that concern that we did express our wish that the withholdings, arrears, will come forward and that we will be back on a firm financial footing.
I might just put a couple of very small questions here with respect to the proposed shortfall at the end of the biennium, and wonder if that includes residual obligations such as the obligation to make good on those deferred distributions of cash surplus that several countries have most generously put forward, or whether that is something that might be added to the 53.4 million that we have in front of us. Taken as it is with the savings realized in 1986/87, the economies that the Director-General has undertaken I think amount to 20-25 million-or will do so by the end of the year. That brings us up to about 89 million really in the deficit from the anticipation that we had two years ago. I think that, if we look at residual obligations and other deferrals of expenditures, probably we have suffered, even under optimistic forecasts, 100 million dollars less than anticipated and could, if the worst conditions prevail, of course go substantially above that.
This being so I think it is prudent to consider measures to address the financial uncertainty and most of these of course are put forward, having derived the lesson that we have derived that they are not going to redress the problem we are in now, but will be in hand to assist us should we run into similar problems in the future, and that is the essence of course of good planning.
With respect to the measures that have been suggested and have been put to us by the Finance Committee, the matter of miscellaneous income and the treatment of cash surplus, my country has some concern about these two proposals and would certainly like to see further discussion and consideration given to them before any change in the present circumstances is contemplated. We think, particularly on the principle that I think has been underlined by the Finance Committee, and that is that should there be a shortfall facing us derived from the failure of a member or members
to live up to their contributions, that other members should not be obliged to make up that shortfall. In our view miscellaneous income is a joint resource of the members of the Organization, as is cash surplus, and there is some pro rata right of proprietorship to those sums, and to delay them or to utilize them due to the withholding or arrears of other members, is in fact utilizing member funds to make up for certain member delinquencies.
With respect to miscellaneous income, we agree that this is a dangerous number, and I think Mr Shah has pointed out to us a number of times in the past that it is extremely important to get this number right because of the very sudden and unanticipated movements that have occurred, for example in interest rates, in exchange rates, and that even the very best estimates can sometimes prove to be faulty. So we do agree with the concept that making that estimate and deducting it for purposes of calculating contributions is an uncertain game, but rather than change the system in entirety we would simply say that perhaps a somewhat more conservative approach in estimating miscellaneous income might be one way of reducing that uncertainty.
If we are to change the process and the treatment of miscellaneous income and of cash surplus, it will mean a one time effect on member contributions. We have stressed in our earlier intervention on item 15 the stress and pressure members feel as it is in the fairly substantive increase in member country contributions, and we are not in a position to entertain changes which would quite substantively increase those contributions yet again, even if only on a one time basis.
With respect to the working capital fund proposition, we do agree that the present level of the fund at something over $13 million is extremely modest and too low for the purposes for which it was designed. We could agree that the working capital fund be increased to a level of $20 million, but would hope to link such an increase to some review of the purposes for the working capital fund and the criteria for access to it. I think in the present biennium, while the Director-General has not at this stage entertained utilizing the working capital fund, he may be obliged to do so before the end of the biennium, but in our earlier meetings there was some confusion as to what the working capital fund was there for and how it should be used. Perhaps there is a need to clarify that issue.
Secondly, in increasing the working capital fund we should like to see more consideration given to the methods of financing that increase. Again, we would signal that a direct impact on particular contributions and assessments should be avoided. We are thinking perhaps of the viability of linking the increase in the working capital fund to the realization of arrears and withholdings that are outstanding, and/or isolating the working capital fund into an individual account and using the interest gained on that amount to systematically bring the fund up from its present $13.3 million to $20 million. Perhaps the Finance Committee could take a look at either of those two alternatives as a way of avoiding an increase in Member Countries' contributions.
While speaking on measures to deal with financial uncertainties, we would like to draw attention once again to our intervention made under agenda item 15 at earlier meetings of the Council. This intervention suggested that budgetary preparations could be made in advance to present the budget in two parts, the first and second elements that possibly would contain described activities or programmes which could be deferred in the event of financial uncertainty.
The Director-General in his summing up of the debate the other day indicated quite rightly the difficulties that such a suggestion could cause, and that it would be difficult to present such a budget. But I am not convinced it is impossible. One may point to the experience of this biennium. In fact, some economies were made to the anticipated value of $25 million. Members did not have a chance to purview how these economies will be realized In advance, but subsequently we have seen how that would be done in the deferral, for example, of certain meetings, the deferral of certain publications and the freezing of staff establishments. These are examples of things that could be postponed.
I think that when a meetings schedule is prepared for the next biennium, perhaps the second of two meetings proposed for the next biennium could be a contingency meeting, that is, it would be held if funding permitted. I just use these as small examples of how a two-part budget might work. There could be also included in the second part reports commissioned at a cost of $400 000 to $500 000 and put there as a very desirable activity, but one which will have to be contingent on the availability of funds. The virtue of such a contingency allows members to know in advance what is the unfortunate cost of financial uncertainty and shortfall. It is also a good planning mechanism because it allows us to address financial uncertainty in advance of it happening. So we would like to add that to the list of measures to treat financial uncertainty, and to plead for some recognition of that proposal.
Finally, we noted the comments made with respect to Finance Committee consideration of the issues of programme delivery costs. Of course, not being a member of the Finance Committee we were unable to purview that particular operation. But we would say that the discussion of the item should not be
treated as a criticism of the Organization; indeed, should it be responded to in any defensive manner we would say it was a constructive approach raised in the last Council and one on which in due course a dialogue concerning the subject could be shared with the membership to some greater extent.
J. D. AITKEN (United Kingdom) In this intervention I will specifically refer to agenda item 17.3· With your agreement, Mr Chairman, we would like to make a subsequent intervention in this debate dealing with the items referred to under Item 18·
Mr Chairman, you will recall that the 90th FAO Council meeting in November 1986 agreed that the United Kingdom should have discussions with the Secretariat on a number of financial matters including liquidity, financial managemnt, systems procurement, personnel management and programme delivery costs.
It was our understanding that Council also agreed that the United Kingdom should report on these discussions to the Chairman of the Finance Committee and that our comments would be considered by the Committee. We appreciated that it was the Director General's prerogative to submit his own paper to the Finance Committee and that he was not obliged to submit a paper prepared by a member state. Nevertheless, we felt that the mood of the Council and your own good offices meant that there was a moral obligation by the Committee to consider the results of our discussions with the Secretariat.
The United Kingdom delegation and, Sir, yourself acted in good faith in this. It was therefore with a sense of considerable regret and disappointment that we learnt that the Secretariat had advised the Finance Committee that it should not consider the British papers. While this may be procedurally or legally correct you will appreciate that the United Kingdom authorities consider such behaviour does not generate confidence between Member States and the Secretariat. Nor does it show particular will on the part of the Secretariat to work with Member States who are trying to make a conscious effort to improve the effectiveness of our Organization. Sir, I will also stress that this behaviour undermines your authority.
While the Secretariat may have deflected discussion on these topics on one occasion the issues themselves will not go away. They cannot be deflected because they are central issues for the Organization.
Because of the decision of Council in November we feel that we are under an obligation to report briefly to Council on the results of our discussion with the Secretariat. This is very generic to Item 17.3.
Our discussions on liquidity and cash flow suggest in the long term a need to change the basic Method by which the Organization collects assessed contributions from Member States. In our view it would be more effective if FAO changed to a basket currency and then moved to a system of quarterly or half-yearly requests for funds from Member States made against specific estimates of expenditure. On this it was interesting earlier in the debate to hear the comments from the delegate of France. These arrangements could be accommodated within the existing biennial programme and budget processes. The budget document presented to Conference could, in addition to details of assessed contributions, also contain an estimated schedule for quarterly draw-downs of funds for the biennium. We also believe that the procedure within the Secretariat for estimating expenditure could be improved and made more accurate.
We were interested to hear the comments of the Deputy Director-General at the close of the budget debate when he referred to the introduction of the computerised accounting payroll and personnel management system. It is indeed one of the most advanced in the United Nations family, probably the most advanced. Because of this, we were surprised to learn from our discussions that this development costing over $7 million had not been the subject of any detailed financial evaluation before its introduction. We were also concerned to learn that in a system which will require over 600 programmes, FAO plan to have a systems management team of only four or perhaps six people. In our view this is inadequate and we would like to learn whether the Secretariat has any plans to increase the number of staff on this work.
On procurement, we consider there is an urgent need to improve the guidance given to staff on whether to use the contract system or issue a purchase order. At the time of our visit the administration was working on a set of guidelines to help departments in their choice of method. We should be grateful to learn whether these guidelines have been issued. We also believe that in the interests of efficiency the contracts and purchasing branch should be merged and the responsibility for the decision on the method of procurement given to the head of the new combined branch.
Coming now to personnel matters, I am very pleased to report to the Council that the FAO Secretariat have now introduced a system of staff appraisal for FAO Headquarters staff. We welcome this decision and see it as a first step in a wider process of career planning, development and training for Headquarters staff.
In his opening address the Director-General referred to the staffing problems he was experiencing in the Organization. The personnel division in FAO has made a number of positive advances at a time when personnel management throughout the United Nations system is faced with considerable difficulties. We feel that the Member States may not be fully aware of the valuable work being undertaken by the personnel division and we therefore suggest that a short report on personnel management policy and staff management matters should become a regular item on Council agendas.
Council and Conference, quite rightly, spend considerable time discussing FAO's financial assets. The skilled staff of FAO is an even more important asset and it seems only appropriate that the governing bodies should devote some time to learning how this asset is managed.
Our discussions on the liquidity, financial management, financial information systems and procurement confirm the need for the sort of thorough management review by FAO which was proposed by the Minister at the Conference in 1985. For the present we would like to propose that these issues be considered by the Finance Committee at their next session.
I would now like to speak about the important question of programme delivery costs. There has been widespread interest in this subject since we raised it at Council in November 1986. Perhaps it would be helpful if I explained our concern and why we believe that this subject is of such considerable significance to all Member States.
We all understand the concept of what I will call the "end product" and overhead costs and the overhead costs incurred in producing the end product. This is seen at its most simple in manufacturing. The tractor or the fishing boat is the end product and the costs of production can be clearly identified and quantified.
It is far harder with more complicated organizations and products but it is a worthwhile exercise because if we can identify and quantify overhead costs, we are then in a position to have a discussion about how these may be changed or reduced and the money used more effectively within the Organization.
Thus, the more effective we are in reducing overheads the more money will be available for spending directly on programmes which benefit Member States. I think that while some countries may have felt that the budget should have been reduced, some felt that it should have increased. Those who felt that it should have been reduced certainly wanted to see the substantive programmes remaining the same or even increasing, and I am sure that those who wanted to see the budget increased did not want to see the increase go on overhead costs.
As a result of our discussions the FAO Secretariat have produced a most useful document on programme delivery costs in FAO. It is unfortunate that this document was published in the limited Finance Committee series and is thus not available to Member States. We would hope that this could be remedied and that the document could be available to Member States at this Council.
At this point I must express our thanks to Mr Shah and his department for all their assistance and efforts. It is thanks to Mr Shah that we are able to have this discussion and it is thanks to his work that we were able to understand the level of programme delivery costs not only in the current biennium but in the next biennium.
While we may have some marginal disagreement with the Secretariat on the manner in which they distinguish between categories of expenditure, we are in broad agreement with the methodology they have adopted and we do not question the numerical accuracy of their figures.
It is only in the presentation that we differ. Throughout all of this our objective has been to establish how much it costs FAO to deliver $1 of substantive programme.
We consider that programme delivery costs should be defined fairly broadly. It was because of the conceptual limitations of simply considering administrative costs in the narrow sense that the concept of programme delivery costs was evolved in the public and private sectors. This concept enables an analyst to look at all expenditure which goes into producing "the product". It is recognized that "upstream" costs have to be looked upon as facilitating the final product rather than as part of it.
It is interesting to note that our argument is supported by a recent Joint Inspection Unit (JIU) review of UNICEF. The JIU Review is critical of UNICEF for defining overhead costs solely as the costs associated with administrative offices and excluding, for example, expenditures on programme development, preparation, implementation and evaluation. The JIU report acknowledges that there is no single method of calculating overhead costs and recommends the presentation of a range of figures reflecting different methods of calculation to provide "a clearer idea of total indirect costs".
The JIU comments that in order to avoid useless controversy regarding any single method of calculating overhead costs that should be followed in preference to others, the results that are obtained according to each given method of calculation should be presented using the same expenditure figures grouped according to different criteria. This is very much our approach.
The figures provided by FAO can be presented slightly differently and programme delivery costs can be shown as a ratio of the total programme instead of as a proportion of total costs. We feel that showing programme delivery costs as a ratio of total programmes is a more accurate approach.
When looking at programme delivery costs it is not satisfactory simply to look at administrative support costs in a very narrowly defined sense. While FAO can claim that these are only 18.8 percent for Regular Programme delivery, using FAO's own figures but rearranging them our calculation is that FAO programme delivery costs are in the region of 53-61 percent of the delivered programme in the current biennium.
This means that it is costing FAO currently 53-61 cents to spend a dollar. On the basis of information that we have at present, it appears that these costs will remain within this range in the 1988-89 biennium.
These figures appear to us to be far too high. We recognize that direct comparisons with other international organizations are not strictly possible, but we believe that on a straight comparison between FAO and UNICEF where, using the FAO calculation, administrative overheads for FAO are 18.8 percent, a similar calculation for UNICEF gives a figure of 11.5 percent. On the basis of our calculations the figures for UNICEF seem to run from 29-40 percent.
We appreciate that there is a considerable difference between these two organizations and we would not suggest that FAO overheads should necessarily be as low as those of UNICEF. Nevertheless, we believe the difference is great enough to merit full consideration of the question of programme delivery costs by Council and Conference. Such a discussion would provide an opportunity for Member States to receive detailed information from the Secretariat and, in turn, to help the Secretariat identify areas of potential saving.
It is of considerable concern to us that despite the calls from Member States to reduce overhead costs, the delivery costs show little change between the current biennium and 1988-89. While direct overhead costs have been slightly reduced, the overall delivery costs remain about the same proportional level, i.e., it is still going to cost FAO 52 to 63 cents to spend a dollar. In our view this is just not good enough. When we listen to the Secretariat and read their presentation on ways of making savings in overheads, we are struck with the lack of real vigour in their approach.
If we understood him correctly, when speaking yesterday at the end of the budget debate, the Director-General said that he relied mainly on posts becoming vacant to achieve savings. We are very concerned by this statement because we consider that this apparent absence of flexibility in the management of the Organization highlights a serious management weakness. Again, this is another area which could be looked at by a management review.
I should therefore like to formally propose through you, Mr Chairman, that this Council recommends that the question of programme delivery costs is included in the agenda for discussion at the 92nd Session of Council In November and placed on the agenda for Conference.
Turning to the other issues considered in document CL 91/6 I would like to comment very briefly on the JIU report on field representation of organizations in the United Nations system presented in CL 91/INF/12.
I would like to make it clear that my delegation supports both the tenor of the JIU report and its main conclusions and recommendations. We consider that the Director-General had been a little hasty in the reaction given in CL 91/INF/12.
We would like to ask the Secretariat in relation to the four new FAO representatives' offices proposed in the Programme of Work and Budget whether their establishment was considered in the light of recommendation 2 of the JIU report. And if so, what were the answers to the six tests of cost-effectiveness and efficiency suggested in the report?
The conclusion we draw from our discussion with the Secretariat and from our reading of CL 91/6 is that there is clearly an urgent need for new ideas within the Secretariat and the creation of an atmosphere in which those members of the Secretariat who do have proposals for improvement are able to develop them with the full encouragement of senior management. Too often we have found that it can be said of the Secretariat's formal response to proposals for change that for every solution they have found a problem. It is for this reason that my delegation favours the creation of a high-level group to undertake a strategic review of FAO, and in this respect we were very interested
this mornign to hear the comments of the distinguished delegate of Italy. It is also why we feel that there should be a management review to consider the issues referred to in this intervention and other management topics.
DEPUTY DIRECTOR-GENERAL I have no desire to interrupt the flow of debate, but certain remarks made in the course of the last intervention in the earlier part of the statement cast aspersions or allegations on the relationship between the Secretariat and Member Nations, and I feel that this should not be allowed to cast a cloud over the atmosphere of the present debate, which is of extreme importance for the financial stability and future of the Organization. We shall reply at theen of the debate on the substance of the points raised by the United Kingdom. It is difficult enough to would certainly not wish the serenity of the Council to be disturbed in any way by events that did not take place. We shall have pleasure at the end of the debate in setting the record straight. In the meantime, I would like to reasure the Council that the relations between the Secretariat and all Member Nations without any distinction remain as always a relationship of full dialogue, mutual confidence and trust for the benefit of the FAO as an Organization.
M.M. SIDDIQULLAH (Bangladesh) I congratulate the Chairman of the Finance Committee, Ambassador Bukhari, for his lucid presentation of the subject under discussion.
We have listened to all of the discussion that have taken place on the budget and the financial position of the Organization. On Friday we intervened briefly to indicate our support for the financial proposals in the programme of the Director-General because in our view it reflected the aspirations of the Member Countries in the developing world. We did not make any detailed comment on some of the most significant and important issues arising out of the financial position of the Organization.
We wish to offer our comments on a few of them in this intervention. We have listened to the presentation of Mr Bukhari enumerating the story of the performance of the budget during 1986. It is Organization as a whole, particularly the adverse impact on the working capital and possible serious repercussions on the Reserve Fund are extremely disturbing.
From the trend of discussions that have so far taken place, it is clear that the reasons for the financial crisis, should we say, of the FAO appear to be mainly two: one, the delay in payment of contributions by a large number of Member countries; two, an erosion of the exchange rate on which the original budget was formulated.
In so far as the state of payment of contributions is concerned, we had a closer look at the list attached to this document and we have noticed that there are at least 17 Member States who have an outstanding contribution of US$ 1 million or more to pay to the FAO. A further lood shows that at least ten of those countries can be categorized as more or less the rich nations of the world. It has been explained repeatedly that the largest contributor has delayed payment of contributions. That is true, It is also true that there are another 16 Member States whose outstanding contributions amount to nearly $60 million as against the outstanding contribution of the United States of about $88 million. So this delayed payment by 16 Member States is not an unimportant element in the budget.
It has been explained that because of the present economic situation of whe world-trade, grwoth, industry, and everything else-Member nations are finding it difficult to pay their contributions on time. Perhaps that is an explanation in part in respect of Members other than the largest contributor. That country itself has not claimed that it is because of its financial difficulties that the payment has been delayed. In any case, even in the case of other countries, I doubt if the financial situation of the world would explain the whole of it. It is therefore most important to find out what is the real reason for it. I would not hazard a guess. I would suggest that there should be a dialogue between the leading members of FAO and let us find out what are the problems over payment. In such situations, hot exchanges, emotional criticisms, accusations and counter accusations do not help matters. That is our belief. We believe that an exchange of frank and candid ideas and a better understanding-perhaps a more sympathetic understanding-of each other's problems and difficulties may help us find a solution satisfactory to all of us. We wery strongly urge that this dialogue be held. I cannot suggest who should take the lead in this matter, but it is time that someone took this lead. If as a result of this dialogue it is possible to understand each other's point of view, if we are prepared to accommodate the expectations and ideas of each group, I am sure that we could get over this problem.
Therefore, as a humble member of this Organization we would ask for this kind of dialogue. Hopefully it will lead to a better understanding and perhaps better days for the finances of the Food and Agriculture Organization.
The other point which appears to have upset the budget estimates for 1986 is the exchange rates. WE have seen that budget estimates were based on an exchange rate of 1,760 lire to one dollar. The prevailing rate it just about 1,300. This is quite natural. Even the present formulation for 1988/89 is based on this exchange rate. It has been pointed out by some delegations that this formulation is unrealistic. It has also been promised in the presentation by the Secretariat that in the detailed budget to be placed before the Conference these points would be taken care of That would reflect the real financial position and also the real magnitud of the programme envisaged.
This may solve the problem temporarily for this current period but perhaps the problem of exchange fluctuations would continue to result in fluctuations in our budget and estimated in the Organization. In order to insulate us from the fluctuation in the exchange rate of the host currency or even the United States dollar, Switzerland has made a suggestion, which has not been discussed at length, to formulate our budget in terms of SDRs. As proposed by Switzerland the suggestion sounded attractive to me because it would largely protect us from erratic fluctuations in exchange rates of currencies. This matter needs serious consideration; if not for the immediate programme, at least for the future. I suggest that the Finance Committee give detailed consideration to the implications of this suggestion.
We have seen the scale of contributions suggested for 1988/89. It has been explained that if follows the same principles as the United Nations. Wit regard to the principle I do not thin there can be any dispute at this moment about the suggestion that FAO should have its own scale. It is not possible at least in the immediate future. If it is to be, it has to be formulated, examined at lenth, and then some decision taken. Is that necessarry? All that expenditure of energy, time, effort and everything? If we have been following this principle all these long years, what is the justification for changing? Let us first find it out and then, if we find a justification for change, we can consider it. As it is, it appears that there is little justification for changing the established principle of sharing.
While on this point of sharing, I would like to bring one important factor to the notice of the Council, Mr Shah explained to me that the percentages shown in this list relate to the budget, which means that the assessments for individual countries are based as such and such a percentage of the estimated budget. If some of the Member countries fail to make this contribution in time during the period of implementation of the budget, what happens? I may be wrong, but to my mind it appears that the effective budget is shared, is met out of the contributions already paid. If that is so, then any implementation of the budget means that these calculations will be upset which means that the principle on the basis of which the share of each individual country has been set out would no longer stand. In that situation, a point of equity arises.
I do not know how this problem can be dealt with, or whether this kind of problem is being dealt with in the FAO, to adjust the shares on a long-term basis. However, this is a pointer to the fact that if the Member Nations with larger shares do not pay in time, the share perhaps of the smaller nations with lower proportions would automatically go up in the effective budget. This point needs consideration and I would suggest that the Finance Committee have a detailed look into it. We have seen the alternatives suggested for dealing with delayed payment. They are excellent. Not one of the three alternatives discussed would perhaps be adequate. Perhaps we would have to apply all three of them. What is more, these three alternatives do not exhaust the entire universe of alternative solutions to this problem. One could perhaps subject the delayed payment in contribution to some kind of interest after a specified date. That would perhaps take care of any cost of borrowing that FAO may have to resort to in the course of a budget year due to depletion of, or draw down on, its current cash flow.
This is one alternative. I do not know why the alternative normally adopted in a number of similar financial practices all over the world has not been considered by the Finance Committee, or at least there is no indication that this was considered and rejected for a very good reason. In that situation, I also suggest that this alternative also may be considered and its full implications be examined vis-à-vis the advantages and disadvantages of other alternatives suggested. To my mind, the alternatives suggested, although effective in themselves, will perhaps have little effect in inducing
payments of contributions on time, at least in the immediate future. But if there are no insuperable difficulties in adopting the principle of charging a certain rate of interest on delayed payments for the period of delay, this might have perhaps an immediate impact. This is only my suggestion. I would request the Finance Committee to exame its full implications. I do not say that it sould be adopted, but let it be examined, I think quite a number of delegations have raised a number of cautions related to the cost of delivery of the programme. Some said that according to their calculations it is of the order of 50 to 60 percent. But the Secretariat has different calculations. But one thing is clear, and that is that there is a large segment of opinion in this House who feel that probably there is a scope for reducing the cost of delivery of programmes. Why not have a close look at it and see if there is any scope for economy? I would suggest that the Finance Committee have a fresh look into it. Let us not have a closed mind to any suggestions coming here. At least in future if there is a discussion on this raised, even if the Secretariat is right, it should be equipped with sufficient arguments to defend its position, arguments supported by data and information. I am aware that Mr Shah has sought to explain that the cost shown is in conformity with a few other international organizations, but at the same time this morning a delegation has pointed out that there is another international organization which has achieved a much greater economy in the cost of delivery of a programme.
One or two delegations have raised tha point relating to the mode of presentation of the budget and our programme. The Director-General, I am aware, has given a reply to it. I think there is a great degree of transparency in their presentation. But perhaps one delegation was right when it pointed out that too many details were presented in a not so systematic manner in the sense that certain points in a number of places on a number of occasions had the effect of making the reading of these documents a little difficult. As it has been directly pointed out, most of use are not financial experts, and many of us are not fast at figures. Perhaps it is worthwhile considering that while the detailed presentation is all right, perhaps a simpler version could probably be devised so that the main items of the programme, the expenditures proposed and other financial issues, are brought out in a more intelligible fashion. I think at the moment that is all I have to say.
D.S.M.R. HUSSEIN (Malaysia) My delegation wishes to express its gratitude to Ambassador Bukhari, Chairman of the Finance Committee, for his introduction and comments and the Committee for its excellent and detailed work. As a member of the Committee, we fully stand by the report and endorse the proposals made by the Committee at both the Fifty-ninth and the Sixtieth sessions. We do not wish to elaborate at any length on the contents of these reports since we feel that the proposals made by the Committee are in the genuine interests of the Organization. As far as we are concerned, we regard the financial management of FAO as one of the best within the UN system. In fact, we believe and share the view of Bangladesh that the financial crisis would not have been a crisis at all or would have been less severe had all members fulfilled their obligations to pay their contributions on time.
The Malaysian delegation is appreciative of the genuine efforts made by the Director-General to make further savings. We view this cutting somewhat in line with the reform measures proposed by some delegations in earlier discussions. After all the cuts, we should see FAO as an Organization which is trim, healthy and more highly efficient. However, we hope that the Organization will not be adversely affected by its delivery capacity. The gesture made by the host country. Italy, which was followed by some five other countries, to defer their claim to the cash surplus, is very commendable. We are pleased to announce our own readiness to defer our own share to this cash surplus in the next biennium. Even though this amount may be a small gesture, it represents our commitment to this Organization, especially in this difficult period.
LE PRESIDENT Je remercie l'honorable délégué de la Malaisie pour sa contribution et pour son annonce du report de l'affectation de la part d'excédent de trésorerie de ce pays jusqu'en 1988.
I. OUMAROU (Niger) Je voudrais tout d'abord remercier M. Bukhari pour l'excellent présentation du document qui vient de nous être faite. Ma délégation est préoccupée par la situation financière actuelle de notre Organisation, situation due en grande partie au retard de paiement de contribution des Etats Membres. La trésorerie a un déficit de 53,4 millions de dollars. Cela devrait nous préoccuper avant même que le Directeur général ne recoure aux prêts pour assurer la bonne marche de l'Organisation et nous espérons ne pas arriver à une telle situation. En tout cas, mon pays a honoré l'ensemble de ses contributions et a même recounduit, à l'appel de notre Conseil, l'affectation de sa part de l'excédent de trésorerie jusqu'en 1988, commle souligne le paragraphe 3.38 du document. Nous lançons donc un appel aux 89 Etats Membres qui n'ont pas encore payé leur contribution, nous leur demandons de le faire dans les meilleurs délais en conformité avec les règles générales de l'Organisation. Notre Conseil, comme il l'a fait en novembre dernier, doit lance un nouvel appel aux Etats Membres.
Par ailleurs, cette situation financière risque de faire perdre à 13 Etats Membres leur droit de vote lors de la prochaine Conférence. Le Directeur général doit continuer à faire appel à ces Etats en soulignant la gravité d'une telle situation.
Les mesures prop-esées visan à prémunir l'Organisation contre les aléas budgétaires et financiers nous semblent opportunes; ma délégation les prend en compte, notamment en ce qui concerne la modification des procédures d'allocation de l'excédent de trésorerie, la modification du traitement des recettes accessoires et l'augmentation du fonds de roulement.
En outre, les mesures visant à régler le problème des retards dans le versement des contributions, paragraphes 3.73 à 3.76, rencontrent l'agrément de notre délégation.
Le projet de résolution concernant le barème des contributions doit recueillir l'adhésion de tous puisqu'il est conforme au barème de répartition des Nations Unies.
Enfin, nous exprimons l'espoir que notre appel sera entendu et qu'à notre prochaine session de novembre l'incertitude financière sera écartée du vocabulaire de notre Organisation.
A. D. WEYGANDT (United States of America) I would like to begin by thanking Dr Bukhari for his introduction to this subject, and I would like to emphasize that I shall try and be brief in view of the time and also in view ofthe fact that I believe that if we are brief and stick to the subject we shall avoid getting into areas that might lead to contention. I also can brief because I do believe that in addressing the financial situation of the Organization the statement that my delegation made on Monday should, I believe, clarify at least to the extent possible the situation in which we find ourselves regarding our contribution. I think I will rely on that and deal really more with the items under Item 18, the specific proposals made by the Finance Committee. However, I would like to preface these remaks by saying that my delegation hopes that the serious and unprecedented financial crisis facing the Organization which we believe results from a confluence of factors and not just from the delay in the US contribution, that this crisis will be a brief chapter in FAO's history.
We believe that the Director-General has shown considerable courage in responding to the crisis and that with the cooperation of the members of Council we can arrive at positive outcomes. With these positive results, my delegation is optimistic that our own payments will once again be put on a more regular basis. In other words, my delegation believes that the financial crisis is of a temporary nature and that it is therefore premature to change long-established and well-functioning financial practices in the Organization.
Specifically with regard to the measures to deal with the problem of delayed payment of assessed contributions, as currently formulated the United States cannot support the proposed change in Financial Regulation 6.1(b) dealing with the application of cash surplus. We certainly welcome the voluntary gestures that a number of governments have made with respect to foregoing their share of the cash surplus. However, we frankly are not in a position to do so ourselves. To change this practice would cause very serious difficulties to us at a time when we face severe limits on our ability to pay. We would, however, appreciate receiving some more information about the details of the proposals. Since we are not members of the Finance Committee we did not have a chance to discuss this subject, but we would welcome more information. For example, we are still unclear how in practice interest income will be kept distinct from other sources of miscellaneous income. The United States feels that any differential treatment of miscellaneous income based on the timing of payments must distinguish between income from assessed contributions and that from other sources.
Such a system is followed in the OECD, and the United States considers the OECD model more appropriate to the FAO. Indeed the United States could support a proposal based on the OECD model incentive payment scheme in the FAO.
Let me just add here that the emphasis is on incentives, but in the light of comments made by some delegations about punitive measures for encuraging payment, I have to say that with respect to our own budgetary situation our payments are bases on legislative authority. This legislative authority is unlikely to take into account punitive measures such as interest charges or other schemes designed to encourage payment. It is simply a fact of what our budgetary authority is. We are trying our best to make sure that these payments are made as quickly as possible. We do not believe that a change in the regulations would be a help in our efforts.
We believe that this issue in any event should be studied further and we would welcome an opportunity to discuss the issue with the Secretariat and with other members of the Organization before the fall Council. In this connexion we support the Italian proposal to defer this action, that is a specific rule change, until the end of the coming biennium when we can perhaps have a better idea of what the financial future of the Organization looks like.
Let me now turn to alternative approaches to dealing with budgetary and financial uncertainties. Of the three approaches mentioned in paragraphs 3.52 to 3·72 of document CL 91/6, as the US noted previously we would be prepared to see an increase in the Working Capital Fund up to, but not exceeding the level of $20 million. Such a limited increase would put FAO's Working Capital Fund on a more equal basis with those of other organizations and would represent roughly one month of FAO expenditures. We consider such a level adequate, certainly in normal times, and we are prepared to see this increase. We believe that on the basis of such a limited increase we should gain further experience before raising the level any further, and in this connexion we would not be prepared at this time to see any action with respect to increasing it beyond the $20 million level.
As my delegation has stressed on a number of occasions, our aim is to restore predictability to funding for FAO. With the cooperation of other Council members, and frankly, a little luck, US payments will be forthcoming and the need for a higher Working Capital Fund eliminated in the future.
That having been said, my delegation cannot agree to the other two proposals under consideration: amending the present procedures for the application of the cash surplus, and adjusting the treatment of miscellaneous income.
On the former proposal, the timing of the application of the cash surplus, the present practice is consistent with that of most other international organizations. I do believe there is only one organization which does not follow the practice as it is in FAO, and we feel that FAO should stick to the good company of the majority. To delay the return of the cash surplus based on the payment of contributions, we believe it is inappropriate. The cash surplus should not be used as a hedge against slow payment-that is what the Working Capital Fund is for, and as I have said, my delegation is prepared to see an increase in the Working Capital Fund.
We believe the FAO's management has been put to a severe test in recent months; a test more severe that we would hope it is to be subjected to in the future. The Organization has met this challenge by adjusting outlays to income, at least in part. In the US view, this demonstrates a better response to financial uncertainty than changing established financial procedures which would affect our net contribution, and in this connexion I would support what was said by the delegate of Canada with respect to any one time increases in contributions. Even if it is a one time increase in contributions we still would face severe difficulties in justifying that to our authorities.
Consequently, we do not consider it right that the practice of budgeting for miscellaneous income at the beginning of the biennium, and deducting these estimates from assessment should be discontinued. I believe that perhaps, as was suggested by another delegate, that a more conservative estimate of miscellaneous income might, in fact, address this problem satisfactorily.
To ask Member States to wait an additional two years for the estimate is nothing other than a transfer from members to the Organization. At a time when so many members, ourselves included of course, have serious difficulty meeting their obligations, the US cannot agree to this proposal.
Let me just turn very briefly to the scale of contributions since it is among the Items we are considering here. Should there be a consensus on adopting the scale of contributions, which I would expect to be the case, based on past practice in this Organization, I would just say that the US would be in a position to join a consensus of approval of the UN scale of assessment as the basis for FAO's scale, but we are obliged to draw attention to the fact that the US, along with a number of other nations, voted against the UN scale in the UN General Assembly in December 1985. The reason for this is that we believe there should in fact be a more equitable burden sharing within the Organization. This is not necessarily directed to our own scale of assessment, our own contribution, but we feel that it is a good idea in general for there to be a more equal burden sharing, and in this connexion I have to say it has been very encouraging to me to hear a number of developing countries reaffirm their commitment to the Organization and their commitment to making their payments promptly despite the serious financial difficulties facing them.
I would like to recall in this general connexion a statement made earlier about questions of what sort of things we should be looking at in the future with respect to the financial situation of the Organization, and emphasizing that when my delegation talks about reform what we are talking about is a reform which will result in improved efficiency, and not a reduction in FAO's activities. We have tried to stress throughout that we attach great importance to FAO's activities. What we are aiming for here is simply an increased efficiency and we look forward to working with all the members around the table and with the Secretariat in achieving these kinds of reforms.
It seems to me however that it is also important to proceed in the manner which allows for a full dialogue on these issues, and I would simply support what was said by the distinguished delegate of Bangladesh with respect to such questions as programme delivery costs. Perhaps it would be a wise idea to ask the Finance Committee to look at this question in more detail in view of some of the comments made.
Since we are dealing with the report of the Finance Committee here, Mr Chairman,-and I shall conclude on this note-I would just like to reiterate statements that we have made before, that what the US is talking about is that we believe there should be more effective use made of existing mechanisms, specifically with respect to the joint sessions of the Programme and Finance Committees. We certainly recognize that the Secretariat must retain flexibility in meeting problems as they arise, but we also think that a greater role by all governments in the budget process would be in everyone' s interest·
Z. LI (China) (Original language Chinese) I shall be very brief, sir. The Finance Committee has carefully studied in the course of its 59th and 60th sessions the financial matters of the Organization and has made proposals for the Council to consider. I would like to express our satisfaction at the result.
Now I would like to comment upon some of these points. First of all I would like to begin by dealing with the procedures for the allocation of cash surplus. After having carefully read paragraph 3.56 of CL 91/6, the Chinese delegation feels that the proposal made by the Finance Committee constitutes a flexible solution which, of course, shall only be put into practice in exceptional cases. On the basis of this interpretation we support that proposal in principle.
Secondly, with respect to increasing the Working Capital Fund, since the level of the Working Capital Fund in the FAO is relatively low as compared to other organizations in the United Nations system, and as indicated in the Finance Committee's report the proportion of the Working Capital Fund has decreased steadily and has not increased alongside the Programme of Work and Budget, therefore it might not be adequate for it to fulfill its job satisfactorily. Therefore we support the proposal to increase the Working Capital Fund.
Thirdly, turning now to measures suggested in order to deal with the problem of delayed payment of contributions, we are of the opinion that the proposal made in paragraph 3.74 of this document is very relevant. We support the proposal.
Fourthly, I would like to turn to the question of contributions. We can support the scale of contributions proposed for 1988/89 which is, as in the past, drawn directly from the United Nations scale of assessments in force as of 1987. This is a well established practice in the FAO.
Ms A.-L. PETERSEN (Denmark) May I start by thanking the Chairman of the Finance Committee for the introduction of the reports, and the members of the Finance Committee for the work they have carried out. We have studied with special interest the part of the report from the Finance Committee dealing with alternative approaches to cope with budgetary financial uncertainties, and I will limit my comments to these proposals.
In general my government is opposed to any amendments of the financial regulation entailing a transfer of power from the Conference to the Council in order to decide on possible deferment of the distribution of the cash surplus. Nor are we in favour of amending the present procedure for distribution of the cash surplus.
With respect to adjusting the treatment of miscellaneous income we realize that one way of solving the problem would be to ensure a prudent and conservative forecasting of miscellaneous income in order to avoid any subsequent shortfall. However, my government is prepared to give further consideration in order to support the proposal made by the majority of members in the Finance Committee.
With regard to an increase in the level of the Working Capital Fund we support consistency in the UN system. Since the level of FAO's Working Capital Fund is somewhat lower than in other comparable UN organizations, we would go along with the proposal made by most members of the Finance Committee, namely to increase the Working Capital Fund to US$20 million as from the first of January 1988, and US$ 26 million by the first of January 1990.
M. TAPAVICKI (Yugoslavia) The Yugoslav delegation would like to comment on only some points from the report of the Finance Committee. My delegation fully supports the proposed three alternative measures that aim at providing the Organization with enhanced protection against budgetary and financial uncertainties in the long term. Namely we support the proposal first to amend present procedures for application of cash surplus stated in document CL 91/6 para 3.56 to 3.58. Secondly, to adjust the treatment to miscellaneous income in the paras 3.59 to 3.64, and thirdly, to increase the level of the Working Capital Fund explained in paras. 3.65 to 3.72.
In connexion with the scale of contributions for 1988/89 my delegation agrees with the past practice that the FAO scale of contributions has to be derived from the United Nations scale of assessments. However, we express the observation that some of the changes from the 1986/87 FAO scale to the proposed 1988/89 FAO scale did not correspond to recent changes in the economic positions of the Member Nations concerned. The scale of contributions for more Member Nations had been increased or unchanged, although they have been in serious economic difficulties in recent years. These facts have to be brought to the attention of the UN competent body, that there is the delay of several years before the most recent national economic trends have a significant effect on the UN scale, and subsequently FAO's scales would be kept to a minimum.
Finally, we would like to join other delegations in emphasizing the importance of the Organization being given the resources to permit the implementation of the Programme of Work and Budget as approved. We hope that all Member Nations, especially the largest contributor, will honour their constitutional obligation of making their contributions to the approved regular budget promptly and in full.
Β. E. Μ· SAID (Libya) (Original language Arabic) Before I begin my comments on the agenda, may I say that I have been listening with great interest to the proposals made by certain delegates concerning the setting up of a high-level group of experts. The Council took a decision on this matter and therefore, we reject out of hand any proposal that was not made within the framework of the agenda, because our countries did not have and will not have time to study such proposals adequately. As I have said before, we are always in favour of a dialogue, but that dialogue must always take place in the appropriate forum and not just on the basis of a proposal made by a handful of countries. So we do not accept proposals that do not fit into the agenda.
If I may now come back to the item under discussion, I shall be brief. To begin with, I would like to express my thanks to Mr Bukhari, the Chairman of the Finance Committee, for the clear introduction he gave to this item. Through him I would thank all the members of the Committee for the efforts they have made. I also thank Mr Shah and Mr Crowther for their explanations and helpful comments.
Generally speaking, we agree with the proposals made in the report of the Finance Committee. We think that any delays in payment of contributions are bound to have a direct effect on the implementation of FAO technical programmes. In other words, they will affect negatively the struggle against malnutrition in many countries. That is why we support the measures taken by the Director-General in this regard which will help us out of this financial difficulty. We consider that his measures are wise, and deserve the full support of our delegation.
We feel the alternatives offered by the Finance Committee are balanced and realistic. In particular we support an increase in the Working Capital Fund. We think this Fund is lower than that in any other comparable organization, and we believe that this proposal will be implemented in stages, as the Chairman of the Programme Committee said, in order to lighten the burden on each country.
We are happy that the Finance Committee proposed practical suggestions that take all aspects of the problem into account. We hope the Council will approve them so that the general conference can take a well-founded decision when it next meets.
Turning to the scale of contributions, may I say that we are perfectly aware of the difficulties faced by developing countries, so the scale proposed is really not right bearing in mind present-day circumstances for developing countries. Nevertheless, we hope that all the United Nations bodies will be able to look at the problem and find a solution in a way that will be acceptable to all. Therefore, we agree with the view that we should adopt at this stage the United Nations scale of assessments.
I· MARINCEK (Suisse) J'aimerais remercier le Secrétariat et le Comité financier pour l'élaboration des documents qu'ils nous ont remis.
Permettez-moi d'abord d'éclaircir quelques sujets abordés par ma délégation dans sa dernière intervention, concernant le Programme de travail et budget, ceci en réponse aux commentaires donnés par le Directeur général et M. Shah.
En ce qui concerne le terme de transparence, nous ne sommes pas de l'avis qu'on nous cache quelque chose dans les propositions de Programme de travail et budget, mais nous demandons de trouver dans les documents une vue d'ensemble qui permette également aux non-spécialistes de comprendre clairement l'essentiel des propositions, et son seulement aux spécialistes qui font partie du Comité financier.
Nous remercions donc le Directeur général de son avis pertinent selon lequel la tâche du Comité du Programme et du Comité financier est justement de faire le travail préparatoire nécessaire pour le Conseil.
Pour prendre l'exemple du puzzle, nous ne considérons pas avoir une transparence suffisante si nous sommes assurés de recevoir toutes les pièces du puzzle. Nous aimerions qu'on le compose devant nous.
Concernant le processus de réformes: nous considérons que le sous-développement et la pauvreté sont parmi les plus importantes menaces à long terme pour la paix. Cependant, nous constatons que les efforts, tant bilatéraux que multilatéraux, déployés dans le passé en faveur du développement n'ont pas donné les résultats visés. D'où la nécessité à notre avis d'adapter les moyens et d'engager un processus de réforme, et ceci non seulement à l'intérieur de la FAO. La crise financière n'est pas à l'origine de ces réflexions, mais elle les a rendues encore plus urgentes.
Nos propositions d'engager un processus de réforme ne sont pas dirigées contre le Secrétariat ni contre le multilatéralisme, bien au contraire. Nous voulons renforcer la FAO en concentrant ses activités sur les domaines prioritaires, pour ainsi augmenter l'impact et l'efficacité de son travail.
A notre avis, transparence et réforme sont par ailleurs deux questions liées l'une à l'autre. La structure de la FAO doit à notre avis être mieux adaptée aux priorités, stratégies et activités. Ce processus de réforme doit pouvoir joindre les efforts de tous les pays membres et du Secrétariat. Nous ne voulons pas monopoliser ce processus, bien au contraire.
J'aimerais maintenant faire quelques remarques concernant les propositions du Comité financier.
Premièrement, nous avons déjà avancé l'idée de baser le budget de la FAO sur les droits de tirage spéciaux. Nous aimerions que le Secrétariat et le Comité financier étudient cette possibilité.
Deuxièmement, nous considérons que le barème des contributions est déjà établi en fonction des possibilités financières des pays, comme dans tout le système des Nations Unies. Une fois ce barème accepté, le principe devrait être que tout le monde paye ce qu'il doit. C'est vrai qu'il peut y avoir des situations d'urgence, mais il n'est pas acceptable qu'il y ait des pays qui soient en permanence en retard dans leur contribution. Cela n'est pas excusable à notre avis.
Troisièmement, à propos du Programme de coopération technique, le paragraphe 3.33 nous donne la situation financière de ce programme au 31 décembre 1986. Qu'arrivera-t-il aux montants affectés mais non engagés du biennium précédent? Le règlement financier établit-il une limite en disant jusqu'à quelle période les crédits non engagés peuvent être reportés?
Quatrièmement, en ce qui concerne les "Programme delivery costs", nous serions reconnaissants au Secrétariat d'avancer encore l'analyse de cette question cruciale et d'en présenter les conclusions au Conseil lors de sa prochaine session.
Enfin, nous n'avons pas été entièrement satisfaits des réponses du Secrétariat à nos questions concernant le Sommaire du Programme de travail et budget. Lorsque nous posons des questions devant le Conseil, c'est que nous estimons que le Conseil doit recevoir les informations requises.
F. SUMAYE (Tanzania) On behalf of my delegation I congratulate the Finance Committee and its very able Chairman on the detailed reports contained in documents CL 91/4 and CL 91/6. In order to save time, I will try to be as brief as possible.
We have studied the reports, and realize the seriousness of the financial situation facing the Organization. There are many countries in arrears in their contributions, including Tanzania. We wish to congratulate those who have updated their contributions, including the three mentioned this morning. We appeal to those who have not yet paid their contributions to do so.
We can see from the list in Appendix Β that a lot of countries are already below the danger line, which means they will not be allowed to vote during the coming Conference next November. This is not an attractive situation. Worse still, most of these countries-if not all-are in the third world. Most of them receive FAO assistance possibly in excess of their contributions. They are aware of this.
We must remember that in most cases the fact that these countries have not paid their contributions is not a question of negligence or that they are deliberately not wanting to pay. They know very well they have legal obligations to make their contributions and they are aware that they will benefit from such contributions. Rather, it is a question of the ability of these countries to pay.
If I may give an example from my own country, two years ago it was almost impossible to pay such contributions. We had had very dry years and our people had no food so that by priority, I suggest, any government in that case would direct resources towards buying food, fuels etc. Our situation has now changed this year and we have started processing the payment of our contributions. We are hopeful that the funds will have come over before the November Conference so that we can join the list of those who have paid their contributions. I am sure the FAO office will receive an official communication from Dar-es-Salaam on this matter and a possible surrender of our right to reimbursement to cash surplus so that we are able to offset our forthcoming contributions.
Turning to the report, I would like to comment on para. 3.37. It should be noted that the poorer agricultural developing countries usually do not have foreign reserve funds. They have funds only after the sale of their produce, and the time of sale of their produce depends on their seasons. In this respect the favourable time may not be immediately before the month of February. In Tanzania, for example, February is the peak of the hunger period and the country directs most of its scarce resources into agriculture as it is also the peak of agricultural activities. Therefore, we think that the February timing should not be rigidly adhered to.
We would like to comment on paragraph 3.74 (a). That paragraph reflects a normal financial procedure, Member Countries receive cash surpluses according to the amount of their contributions and the time such contributions were paid. In our opinion sub-paragraphs (i) and (ii) of paragraph 3.73 (a) cannot go together. If the cash surplus is in accordance with the amount and timing of payment of the contribution, then sub-paragraph (i) becomes obsolete or irrelevant in the financial procedures. Entitlement to cash surplus should not require full payment of the contributions because cash surplus payment is made on the basis of amount and time. If.sub-paragraph (i) is eliminated, countries with only a small amount of their contributions unpaid will be able to settle such shortfalls from cash surplus. Otherwise such countries will not receive any cash surplus due to only partial payment of their contributions. This is not In line with financial procedures.
My delegation endorses this report, subject to our comments being taken into account, and we appeal to all Members small and large to update their contributions. We feel that it is morally important for all countries to contribute, especially the recipient developing countries, although economically it is more important for the large contributors to update their contribution.
P. R. BRYDEN (Australia) As a country represented on the Finance Committee we have been closely involved in consideration of the issues raised in the Committee's report. Our views on the Programme of Work and Budget have been aired under other items of our debate and also in the Finance Committee, and are reflected in the report before us. I will confine my remarks largely to alternative approaches to dealing with current financial uncertainties.
We continue to be concerned at the depletion of the Special Reserve Account and the need for replenishment. We understand that the Director-General will be putting forward proposals on how this is to be done to the forthcoming session of the Finance Committee. It does seem to us that unless arrears are paid it is difficult to see any proposal not involving increased contributions from Members.
We urge the Secretariat to look closely at how the account might be replenished through adjustments to the programme. Similarly, we are yet to be persuaded by proposals for increased contributions to the Working Capital Fund. We do not consider that the case has been made for an increase.
My delegation supports the current arrangements applying to the distribution of the cash surplus and would not wish to see changes introduced that would result in fully-paid-up contributors carrying the burden for those countries in arrears.
We also consider that the current practice with regard to the treatment of miscellaneous income should remain.
The issue of consideration by our Organization of information and comments provided by a Member State on programme delivery costs has arisen. For our part, we fully support discussion of that matter in council and in Conference.
We consider programme delivery costs to be an important area of our Organization's financial operations deserving of the widest consideration by us.
R. PRESTIEN (Germany, Federal Republic of) My delegation would like to thank Mr Bukhari, Chairman of the Finance Committee, for his extremely informative introduction to agenda item 17.
The statements in documents CL 91/4 and CL 91/6 are welcomed by us in principle. We have gathered from the documents before us that the Organization showed a debit balance of $27.5 million as at 31 December 1986. That means that expenditure exceeded receipts by that amount. It also became clear that only about 67 percent of the contributions due have been paid so far. The substantial delays in payment of contributions have decisively contributed to this situation. We hope that the government of the largest contributor will soon be in a position to fully meet the financial obligations of its country towards the Organization.
According to the results of the sessions of the Finance Committee, in particular the 60th Session, it seems that the biennium 1986-87 will close with a deficit of $50-89 million. In this connection, we welcome the savings that the Director-General has meanwhile made to the amount of $22 million. We feel, however, that these savings are not sufficient in view of the substantial financial shortfall. Therefore, we encourage the Secretariat to make further economies up to the amount of the shortfall in income that is expected. As we have already stressed under agenda item 15, it is our view that no additional burden should be imposed on Member States such as my country that have fully met their obligations towards the Organization.
According to paragraph 20 of document CL 91/4, working capital problems are not expected in the current programme of Work and Budget. In view of the shortfall in income we would be grateful to the Secretariat for some clarification of what is stated in the paragraph mentioned. We see further possibilities for economies, in particular within the framework of the TCP, as we have already pointed out under agenda item 15. We believe that the TCP funds not yet used should be used in a responsible way to cope with the difficult financial situation facing the Organization as a whole. With a balance of account of more than $70 million, the TCP has now reached a financial volume that can be adjusted in view of the difficult financial situation. Priority activities would not be affected by such an adjustment.
Among the other questions that the Finance Committee discussed at its 60th Session there are the programme delivery costs, which are of special interest to my delegation. We welcome in principle the fact that the Secretariat, following the discussions at the 90th Council Session in November 1986, dealt with the question relating to the level of programme delivery costs and submitted a report to the Finance Committee. Our attitude in this respect is based on the principle of economy to achieve maximum economic success with scarce economic resources. This principle applies to all economies, commercial enterprises and public institutions. In our opinion programme delivery costs must therefore be kept at a very low level. It is our view that the overhead of 18.8 percent mentioned in paragraph 3.130 is quite acceptable in view of the Organization's structure. However, we know that other figures have been mentioned in this regard. This point still has to be clarified. However, we cannot reconstruct the method of calculation on which this figure or other figures under discussion are based. We feel that the Secretariat should give further attention to the question of delivery costs in order that the funds of the Member States will in the future be used in an economic and effective way. This has recently been confirmed by the Joint Inspection Unit of the FAO. We would appreciate it if a common mathematical method could be found in order to precisely calculate these percentages within the framework of the regular budget. This could substantially increase the transparency in budget matters.
We feel that at this point of our deliberations a greater transparency in general must be created for the sponsors of the Organization, namely, the Member States. It is not yet known how the Organization will be able to overcome the financial shortfall if, for example, the largest contributor is not able to fully pay its contributions in the near future. That means that the financing of a substantial budgetary shortfall in the current biennium cannot be considered ensured.
It is the view of my delegation that every effort must be made to avoid damage to the financial soundness of the Organization. We would therefore be grateful to the Secretariat if it could inform us about the ideas that experts in the Administration and Finance Department have developed on how to cover the deficit.
We very much favour and endorse the proposal of the delegation of Switzerland that the Programme of Work and Budget in the future should be prepared in a manner that can be understood not only by financial experts.
The Finance Committee could not reach a consensus on a possible increase in the Working Capital Fund. We could not agree to such a proposal either because it is not yet clear at the moment whether the Working Capital Fund will have to be increased at all.
G. BULA HOYOS (Colombia) Como siempre, la presentación de nuestro colega y amigo el Embajador Bukkari, Presidente del Comité de Finanzas, fue lucida, clara y muy precisa. Igualmente los señores Crowther y Shah explicaron muy bien la posición de la Secretaría.
En términos generales la delegación de Colombia apoya la propuesta del Comité de Finanzas, como lo dijo nuestro vecino de la izquierda, el distinguido señor Li, representante de China, sobre propuestas flexibles que están dirigidas a proteger el funcionamiento en la Organización en este momento de crisis.
Pensamos que los miembros del Consejo estamos agradecidos al Presidente y a los Miembros del Comité de Finanzas por haber hecho esta propuesta, ya que un órgano asesor de tanta importancia como éste, no podía permanecer impasible ante una situación tan delicada como la actual. Nos complace que en el párrafo 3.38, el nombre de nuestro país aparezca asociado al del distinguido país hospedante, Italia, en relación con aquellos 15 países, 13 en desarrollo y dos desarrollados, que han decidido aplazar hasta 1988 la aplicación del superávit que les corresponde. Esto ha significado un alivio de más de 5 millones y medio de dólares para 1987. Como la situación sigue igualmente preocupante, convendría que en nuestro informe hagamos un nuevo llamado a los Estados Miembros para que sigan este buen ejemplo y adopten cuando sea posible esa actitud positiva.
La delegación de Colombia piensa que también otros Miembros del Consejo estamos agradecidos a aquellas delegaciones que han hecho esfuerzos para presentarnos propuestas concretas, propuestas técnicas, enjundiosas y seguramente muy competentes. Naturalmente estamos en favor de cada representante de Gobierno que lo desee, que esté en condiciones de hacerlo, haga llegar al Director General cualquier idea que tenga respecto a todo asunto.
Pensamos, sin embargo, que no se debe adoptar ningún procedimiento particular sobre estas materias. Como ya lo dijo el representante de Bangladesh, en nuestras delegaciones generalmente no tenemos especialistas, personas demasiados familiarizadas con estas materias. Por ello convendrá que respecto a esas propuestas se siga la práctica normal, se decida después de las declaraciones que se han oído y se reflejan en el Informe los aspectos más pertinentes y ya el Informe de por sí será una guía para el Comité de Finanzas. El Director General en base en el Informe del Consejo, y también si lo considera oportuno y necesario, utilizando algunos elementos de las propuestas que aparezcan en las actas, enviaría la documentación necesaria al Comité de Finanzas. El Comité de Finanzas podría ocuparse de este asunto en su sesión de otoño, informar al Consejo de noviembre antes de la Conferencia; luego la palabra final correspondería a la Conferencia.
Pensamos que sin duda los colegas que han hecho esa propuesta están animados de buena fe, tienen ánimo constructivo, pero todo ello merece un análisis muy cuidadoso a través de los procedimientos normales.
En vista de que es muy tarde, vamos a limitar nuestros comentarios de fondo solamente al tema 18.5: Escala de cuotas, que aparecen en los párrafos 3.77 a 3.81. Somos conscientes de que la Escala de cuotas que se nos propone para recomendar a la Conferencia deriva desde 1955 de la Escala patrón de las Naciones Unidas, y que esta última fue adoptada por la Asamblea General en 1985. Esto no nos impide afirmar de manera clara y categórica que el resultado de esa revisión ha sido injusto e infundado y es paradójico e inaceptable. Como podrá observarse en esa Escala, a muchos países desarrollados se les disminuyeron sus contribuciones, y a muchos países en desarrollo se les aumentaron.
Pensamos que esto no se comparece, como lo dice el Comité de Finanzas en el párrafo 3.79 no se comparece, repito, con la realidad de los hechos que han tenido lugar en los últimos años. No se si habrá tiempo hoy, pero yo desearía que se nos explicara esto del "período estadístico básico de 10 años", que parece ser el factor que ha determinado este resultado injusto. De todas maneras proponemos que en nuestro Informe el Consejo respalde plenamente las dos primeras frases del párrafo 3.79, sobre el hecho de que no se comparecen estos cambios con lo que ha sucedido porque de hecho se aumentaron las cuotas de ciertos estados que han tenido serias dificultades económicas.
Por el momento, en atención a estas consideraciones, la delegación de Colombia no está en condiciones de sumarse a la propuesta de que este Consejo recomiende a la Conferencia la adopción de esta Escala de Cuotas. Pedimos al Director General que con base a lo que va a aparecer en nuestro Informe respecto a estas consideraciones, haga llegar a las Naciones Unidas, al Comité de Cuotas, o por el medio indicado, esta opinión de los Miembros del Consejo. Suponemos que no somos sólo nosotros, para que con base a la respuesta que se obtenga en Naciones Unidas, el Comité de Finanzas se ocupe nuevamente de esta cuestión en su reunión de otoño y ya veremos entonces si en la reunión del Consejo de noviembre podremos estar en condiciones de recomendar esta Escala de Cuotas.
Mme S.Y. TAMBWE (Zaïre) Avant de présenter quelques considérations sur les questions financières soumises ce matin au Conseil, la délégation zaïroise voudrait féliciter le Président du Comité financier pour son excellent exposé, ainsi que le Secrétariat pour le document CL 91/6 dont les détails très clairs nous permettent d'évaluer l'ampleur de la crise financière de la FAO.
Après avoir entendu l'exposé du distingué délégué de l'Italie, je ne pensais prendre la parole que pour appuyer tout ce qu'il a dit. En effet, ce qu'il a dit est très important et mérite un examen minutieux car sa proposition sur le financement de certains projets FAO dans le cadre bilatéral pourrait être une solution de remplacement du mécanisme de la FAO en temps de crise; crise qui frappe davantage les bénéficiaires qui ne voudront pas voir s'interrompre les actions entreprises en leur faveur. Toutefois, cette mesure ne peut pas remplacer le mécanisme financier habituel utilisé dans le cadre du multilatéralisme.
Revenant sur les différentes propositions du Comité financier, comme nous l'avons dit, ma délégation pense que tous les pays doivent faire des efforts pour s'acquitter de leurs engagements vis-à-vis de l'Organisation dans les meilleurs délais. Concernant les mesures visant à régler le problème de retard dans les versements des contributions, ma délégation souhaite voir examiner ce problème lors des prochaines sessions du Conseil.
Nous voulons terminer en exprimant notre plein appui au barème de contributions proposé ainsi qu'au renouvellement de l'actuel Commissaire aux comptes.
LE PRESIDENT Nous allons vous proposer d'interrompre la discussion sur ce point-là pour que nous puissions nous réunir à 14 h 30 à huis clos avec les chefs de délégation seulement, pour analyser le point 14.2 relatif à la désignation du Président et des autres membres du Bureau de la Conférence. Ensuite, nous reprendrons le débat.
The meeting rose at 12.45 hours
La séance est levée à 12 h 45
Se levanta la sesión a las 12.45 horas