Mr. Chairman,

I have the honour to speak on behalf of the Group of 77 and China on Agenda Item 117, entitled “programme budget for the biennium 2006-2007".

2. The Group wishes to thank Mrs. Sharon van Buerle, Director of the Programme Planning and Budget Division, for introducing the various reports of the Secretary-General. We also thank the Chairman of the Advisory Committee on Administrative and Budgetary Questions, Mr. Rajat Saha, for presenting the relevant reports of the Committee.

Mr. Chairman,

3. In July 1997, the Secretary-General, in his report entitled “Renewing the United Nations: A Programme for Reform”, A/51/590, proposed a number of measures aimed at promoting sustained and sustainable development as a central policy of the United Nations. Among the actions he proposed, in pursuit of this policy, was the creation of a Development Account to be funded from savings realized through administrative efficiencies and other productivity improvements. The Secretary-General further elaborated on these proposals in subsequent reports, outlining in detail the procedures on which this Account would be operated.

4. It will be recalled that the Secretary-General’s proposals and recommendations were accepted by Member States and the Development Account was established by the General Assembly in Resolution 52/12B in 1997.

5. As members of this Committee are aware, the objectives set for the funding of the Account unfortunately have not been fulfilled. In the eight years since its establishment, there was no addition to the original figure of $13 million, which was earmarked as a “down payment” in order to establish the Account. In addition, no additional source of funding for possible transfer to the Development Account has not been identified, contrary to the basis on which it was established.

6. The Secretary-General, in his report A/61/282, addresses the issue of the identification of additional resources for the Development Account and points to certain constraints in identifying such resources, especially when the Secretariat is being called upon to absorb the costs of new mandates that arise during the course of the biennium. We are also aware of the guidelines set by the General Assembly in Resolution 54/15 for the operation of the Account whereby, inter alia, the transfer of savings should not lead to a process of budgetary reduction.

Mr. Chairman,

7. It is clear, however, from the report that the problem is not essentially one of identifying the resources, but rather ensuring that there is a system in place so that, once a productivity gain is identified, approval is to be sought of the General Assembly for the transfer of the associated resources to the budget section of the Account. However, the situation, as outlined in the Secretary-General’s report, seemingly gives the prerogative to programme managers to determine the use of such savings, as these are being retained by the managers “to meet their own requirements”.

8. A decision by Member States to systemically increase the funding for the Development Account was taken when the Account was established in 1997. In responding to the call for the implementation of this decision, a request was made by the General Assembly in Resolution 60/246 for the Secretary-General to provide recommendations on how additional resources in the region of $5 million could be added to the Account. This of course, was a compromise position, as the proposal for an increase, which was made during the negotiations, was not linked to the element of savings; it was intended to address, albeit in a small way, the lack of growth in the Account since its inception. It is our expectation that Member States will be able to take such a decision at this session.

9. In terms of the difficulty, reported by the Secretary-General in realizing a sustainable increase in the Account, we wish to draw attention to an alternative approach presented in the report, that is, suspending the provisions of financial regulations 5.3 and 5.4 in respect of surpluses, to allow for the transfer of a share of such funds to the Development Account.

10. On the issue of re-costing, we were rather surprised to see the reference to this in the report of the ACABQ as a “one-time exercise”, which is contrary to the provisions of Resolution 60/246. Member States requested that the account be subject to re-costing in accordance with the established methodology applied. There was no discussion or understanding during the negotiations that this would be a one-time exercise.

Mr. Chairman,

11. Member States, over the years, have acknowledged the value of the programmes implemented under the Development Account and have commended the Secretariat for its comprehensive reporting of the activities undertaken. It should be noted that, over the last two biennia, applications were received for projects to the tune of $91.8 million and technical assistance for capacity building is being carried in developing countries with economies in transition mainly through regional and inter-regional projects.

12. Member States have given their commitment to make development a priority. The resources being provided to this programme cannot in any way be considered excessive or even adequate compared to the invaluable service being provided. The Group of 77 and China looks forward to a productive outcome of the discussions on this item during informal consultations.

Mr. Chairman,

13. Turning to the remaining reports before the Committee, the Group of 77 and China appreciates receiving a status report on the construction project at the Economic Commission for Africa (ECA), including on the expansions that were approved by the Assembly in its 60th session, as well as on the project at the United Nations Office in Vienna. We trust that both projects will be completed within the envisaged time-frame. We also trust that every effort will be made to finalise the appointment of a project coordinator for the project at the ECA. The Group is ready to take note of the reports of the Secretary-General on these two projects, as recommended by the ACABQ.

14. The Group, furthermore, wishes to acknowledge the invaluable contributions made by the Governments of Austria and Ethiopia, respectively, as the two host countries, towards ensuring the successful implementation of the construction projects.

15. The Group notes the proposal of the Secretary-General to establish a reserve for contingent liabilities for postal services for previously issued UN Postal Administration stamps, which will gradually be built up by transferring the balance of the net income of postal services until a ceiling level of $3.3 million is reached. The Group will appreciate receiving more information on the modalities of the proposal and the impact on the Financial Regulations and Rules.

16. The Group will also appreciate a clarification of the practical implications of the ACABQ’s view that, in order to reach the target of $3.3 million, it would be prudent to consider further streamlining UNPA operations, if possible, and providing requisite service with even greater efficiency. In this regard, the Group notes that UNPA has managed to achieve a net income in the previous biennium and is expected to show a profit at the end of the current biennium, due to cost-cutting efforts, changes in operations and the introduction of new products. We would appreciate receiving further elaboration on these measures.

I thank you, Mr. Chairman.