RESOLUTION LFC 231

FORUM: LEGAL & FINANCE COMMITTEE

QUESTION OF: Measures to ensure the financing of UN agencies by member states

SUBMITTED BY: Paraguay

CO-SUBMITTERS:Dominican Republic, Hungary, Sudan, Republic of Korea, Uganda, Mauritania, Argentina, Burkina Faso, China.

STATUSApproved

THE LEGAL AND FINANCE COMMITTEE,

 

Affirming that the activities of the UN agencies depends of the contributions of the Member States and many of the future projects of UN agencies are at risk due to lack of funding,

 

Considering that more than 50% of the whole UN budget is financed by only five Member States,

 

Confident in indicating to Member States the resources are needed to implement activities and programmes and ensuring that those resources are used according to legislative intent and in the most effective and economical manner,

 

Having studied the Article 17 and 19 of the United Nations Charter which set guiding principles regarding the financial regulations,

 

Stressing that the United Nations and hereby its affiliate specialized agencies can only deliver their mandates if all Member States meet the UN’s financial obligations in full and on time,

 

Fully alarmed by the record level liquidity crisis the United Nations is facing, which reached a $5.1 billion shortfall as of November 2020,

 

Having examined all Member States’ budgets and expenditures; including GDPs, and GNIs PPP in order to come up with ideas that are fully applicable,

 

Reminding that the United Nations has one of the most crucial roles in delivering humanitarian aid through its affiliated agencies during the times of COVID-19  and it’s merely possible with the cooperation of the international community,

 

Deeply concerned by the worrisome remarks of our Secretary-General Antonio Gutterres upon the current financial crisis in the UN, “We are being forced to operate not on the basis of strategic direction, but rather on the availability of cash, which undermines mandate implementation,”

  1. Calls upon all Member States to pay their assessed contributions and advances in full each and every year within thirty days of the receipt of communication of the Secretary General or on the first day of the calendar year to which they relate, whichever is later, in order to avert the risk of depleting liquidity reserves of the United Nations (UN) and financial uncertainty, whilst recalling the Article 19 of the Charter which explicitly explains the conditions that Member States are expected to obey, and grants privileges to Members in need, regarding their assessments;
  2. Encourages all Member States to reach to a conclusive agreement on increasing the United Nations’ annual Regular Budget by 50% which will be used to issue the needs of the UN agencies regarding and starting with the 2021’s unveiled $2.99 billion budget by expanding all Member States’ assessed contributions and advances fairly according to their capacity to pay which are designated according to the Scales of Assessment in order to ensure that the UN and most importantly its affiliate agencies are strategically averted from the possible incapacity of implementing crucial mandates such as but not limited to supporting countries in their development path, advocating universal healthcare and monitoring public health risks, and promoting and protecting human rights for each and all;
  3. Supports that in the UN Regular Budget’s share for organizations assessed contributions there be a 30 – 70 split between on where the money would be allocated so that member states can have a choice on what agency they want to support while the UN still gets a choice on where the money would go:
    1. 30% of the money would go to an agency of the member state’s choice
    2. 70% of the money would go to the UN and they would choose what agency(s) the money would go to, or would be kept for later usage:
      1. By the UN getting the money and having control over it, since they have more insight on what agency needs the money so they can easily distribute the amount needed
      2. The UN has no political preference over what agency the money is going to;
  4. Strongly encourages the formation of an assessment-based contribution system, resembling the one that has been in use for the UN’s Regular Budget, for all UN agencies’ budgets separately, which will be aimed to:
    1. establish approximately 15% of their estimated budget which would be specified according to the issued agency’s average expenditure regarding past years, without violating the voluntariness-based funding system of these agencies for the specified year in order to
    2. avert the risk of deepening the already existing financial crisis agencies face in case of abrupt defundings from crucial partners, regardless of their cause for incapacity to pay
    3. partly relieve the financial uncertainty that most agencies face because of their over-reliance on voluntary contributions and help the creation of a more stable and trustworthy funding system for all agencies
      1. specifically ensure the financing of the UN humanitarian aid (relief) missions in the conflicted areas which are under constant warfare condition and in need of immediate financial assistance, such as but not limited to Yemen, Libya, and Ethiopia
      2. that will be established and assessed to all Member States according to the Scales of Assessment, prioritizing Member States’ gross domestic products (GDP), gross national incomes (GNI), gross national incomes per capita based on purchasing power parity (PPP)
      3. whether they have a share in the core budget of the UN or not, regarding the fact that the UN Regular Budget’s net contribution to World Health Organization (WHO), which possesses one of the highest amounts and rates of income from the UN’s core budget, covers less than 20% of the WHO’s total budget
      4. while considering and evaluating LEDCs capacity to pay their assessments with utmost importance, and in case of any failure to pay due to conditions beyond the control of the Members, especially LDCs’, requesting the voluntary financial assistance of other Member States referring the details presented in clause 5;
  5. Urges all members of the UN’s affiliated agencies to reach a conclusion on increasing Member State assessments for the UN’s Working Capital Fund from its current level of $150 million to at least $200 million according to the Scales of Assessments and  apportion the amount accordingly while realistically evaluating the funding capacities of all Member States, starting with the LDCs, and paying sheer regard to the fact that rather than being an extra financial burden to the Member States’ economies and the ongoing financial depression mainly due to COVID-19, this total $50 million increase in assessments is a most crucial investment for the safeguarding of all UN agencies and consequently their mandates which are essential for the wellbeing and safety of the humanity as a whole, especially during the coronavirus pandemic that all Member States face,
  6. Confirms that if any country, especially an LEDC, faces failure to satisfy its assessed contributions proposed in clause 2 due to conditions out of their consent and reach, the budget gap will be addressed by the $50 million increase regarding the Working Capital Fund, proposed in clause 4, which, $50 million, is equivalent to approximately 1.6% of the total amount of the UN Regular Budget and based on the budget of 2020, can provide financial assistance for a minimum of 16 LEDCs in full so that;
    1. LEDCs won’t be left in a situation where the proposed 50 %  increase, referring to clause 2, in the core budget assessments create a major burden in their development path
    2. the agencies of the UN will not financially suffer from a possible budget gap due to conditions out of reach in the UN’s Regular Budget in which most of the agencies have a share whether high or low
  7. Recommends the establishment of a joint credit system for IMF and World Bank that will evaluate the financial credibility of Member States out of 100 points according to their continuity and success in fulfilling their assessed contributions to both the UN Regular Budget and the budgets of the UN agencies individually, referring to clause 2 and 3 in which Member States that arbitrarily evade paying their dues to the entities referred in clause 2 and 3 will face systematic deductions to the amount of monetary assistance provided by the mentioned organizations that they are eligible to obtain, by;
    1. setting the deduction rate for each arbitrary non or inadequate payment to 3 points for all Member States
    2. setting the increment rate for each full payment of dues within thirty days of the receipt of communication of the Secretary General or on the first day of the calendar year to which they relate to 1 point for all Member States
    3. reducing a Member State’s access to benefit from the monetary assistance provided by the IMF and WB if its overall credit point are or are lower than 80, and completely abolishing its right to access these services if its overall credit points are or drop under 65;
  8. Suggests the establishment of a new program in which Member States that are declared as under major fiscal burden due to COVID-19 by the independent and factual reports of the related UN officials will be able to receive a special debt reconstruction countenance for their payment of assessed contributions (dues) under the supervision of IMF and the World Bank, reminding the supervision which the host state receives from the IMF and the World Bank under the proposed program will only include advisory assistance on their payments of assessed contribution, and will not include monetary assistance and interference with their internal policies by any means.