Permanent Mission of Japan to the United Nations

1997 Statement

H.E. MR. HISASHI OWADA

Permanent Representative of Japan

On Item 120, "Scale of Assessments for the Apportionment of the Expenses of the United Nations"

20 October 1997

Mr. Chairman

First of all, my delegation would like to extend its appreciation to Mr. Etuket, Chairman of the Committee on Contributions (COC) for the COC report, as well as for his introduction. My delegation considers the report to be quite comprehensive and balanced. The report undoubtedly will help us in our discussion on the delicate and important issue of the scale of assessments.

As the Fifth Committee is about to decide the scale of assessments for the United Nations regular budget for the next three years, my delegation wishes to state at the outset that Japan, as the second largest contributor of the 185 members of the Organization, is ready to participate actively in the negotiations on this subject. In consonance with the tradition in this Committee, I believe it is important that a new scale methodology should be realized on the basis of consensus among the Member States. My delegation would like to reiterate the hope that we engage in a thorough discussion of this issue, so that we may arrive at a solution on which all members can agree in order to establish a stable financial base of the United Nations.

Mr. Chairman,

I should like to touch upon a few salient aspects of the financial crisis of the United Nations, which constitutes the background of the issue of the scale of assessments.

Japan has a grave concern about the present financial crisis, which the United Nations has been facing for the last several years. According to the information provided by the Secretariat, unpaid dues, as of the end of September of this year, totals 2.417 billion dollars, including those for the regular budget, peace-keeping, and the International Tribunals. It is also estimated that the Organization will end the year with a 272 million dollar deficit in its regular budget alone.

It is the view of my delegation that the current financial crisis is largely due to the failure of some Member States to pay their contributions, a solemn legal obligation the Members are required to meet under the Charter. My delegation would like to emphasize again that this is a solemn obligation of all the Member States to pay their assessed contributions and that States in arrears must make every effort to eliminate such arrears.

In the view of my delegation, it is high time that we gave serious consideration to the possibility of introducing some concrete measures to compel Member States to pay their contributions. To that end, it is hoped that the High-level Open-ended Working Group on the Financial Situation of the United Nations will resume its work in the near future, with a view to devising effective means to extricate the Organization from its critical financial situation.

Mr. Chairman,

To restore the health of national economy through a balanced budget is an undertaking that many Governments are now engaged in. The Government of Japan is itself currently pursuing a drastic reform of its fiscal structure, with the aim of bringing its budgetary deficit from the current level of 5.4 percent of its GDP to a level below 3 percent by the year 2003. I understand that there are other Member States present here which are making similar efforts. Against this background, it should be easy to understand how essential it is for any Government to see to it that the scale of assessments be fair and equitable in the eyes of its own people, so that the Government may get the support of the people in paying its assessed contributions.

It is common knowledge among us that Japan’s assessment is already almost as great as the total of assessments of the four permanent members combined except the United States, and that it is almost to reach that of the United States. While Japan’s GNP share in the world economy is about 17 percent, there are proposals by which Japan’s assessment would exceed 20 percent. It would seem clear that such a situation would create a problem from the viewpoint of the fairness and equity involved. If the scale of assessment of Japan were to increase further out of proportion, there would be a problem in terms of fairness and equity.

The principle of distributive justice requires us to look at the whole problem in the scale of assessments from the viewpoint of what is fair and equitable in balancing the financial burden to support the activities of this Organization. It is with this consideration of principle in mind that Japan has been advocating, as the basis for calculating the scale, the adoption of a concept of "responsibility to pay", to be incorporated in a complementary manner to the present method, which is broadly based on the principle of "capacity to pay". The concept of "responsibility to pay" will apply, inter alia, typically to the case of permanent members of the Security Council in view of their special responsibilities under the Charter.

Concerning the problem of lowering a ceiling in the scale of assessments, my delegation understands the logic, within the broad context of all the relevant factors to be taken into account, that the Organization should not be excessively dependent on any single country or a limited number of countries for its financial resources. However, it should also be kept in mind that this problem should be carefully weighed in the context of all the relevant factors from the viewpoint of the principle of fairness, to the extent that such lowering of the ceiling should not bring about a situation in which the assessments of other members that already bear substantial financial burden increase to a level which would be out of proportion as compared with the responsibilities they assume.

The concept of "responsibility to pay" means that those countries with special responsibilities within the United Nations should bear a commensurate share of financial burden corresponding to their responsibilities. There can be several ways in which this principle might be reflected in the scale methodology. My delegation will be prepared to submit a concrete proposal on this subject, as necessary, at an appropriate time in the future.

Japan’s basic position on the methodology of the scale of assessments is reflected in proposal E, one of the eight presented in the report of COC. Its main features include an average base period of six years, a reduction of the gradient to 75 percent for the low per capita income adjustment, maintenance of a 25 percent ceiling, and a gradual phasing out of the scheme of limits. My delegation believes that this is a proposal that represents the most equitable way of apportioning expenses for the United Nations.

Let me elaborate the views of my delegation more specifically on the recommendations concerning the scale methodology, COC’s ninth proposal.

In accordance with the principle of "responsibility to pay", no permanent members of the Security Council should be eligible for a low per capita income adjustment. Also a gradient of 85 percent would seem to favour excessively those developing countries with larger economies; a gradient of 75 percent is deemed to be more appropriate.

On the scheme of limits, the COC proposed tentatively that the scheme should be phased out gradually over the scale period, but with an accelerated phase-out in the second year. Japan’s position is that the effect of the scheme of limits should be phased out more equitably in equal installments by the year 2000, so as to avoid any drastic impact upon those states to be affected by the change in the scale of assessments.

It is important that all these elements of the scale methodology be looked at in the form of a package that represents an equitable balance among different elements involved. Without singling out individual elements as deserving of our support, we should proceed to discuss the scale methodology as an integrated whole.

Mr. Chairman,

The scale of assessments is a basic tool in determining the financial responsibilities of each Member State. It has very wide implications going beyond the narrow confines of the United Nations and reaching out to the entire UN system. It is most important that we make every possible effort to arrive at a solution by consensus which every Member State can accept and honour, in our common endeavor to devise a durable system based on the principle of fairness and equity and thus to ensure the stability of the financial base of the United Nations.