Madam Chair,

1. I have the honor to deliver this statement on behalf of the Group of 77 and China on agenda item 141 on improving the financial situation of the UN.

2. The Group wishes to thank Mr. Chandru Ramanathan, Assistant Secretary-General and Controller, and Ms. Juliana Ruas, Chair of the Advisory Committee on Administrative and Budgetary Questions (ACABQ) for introducing their respective reports.

3. The Group of 77 and China attaches significance to the consideration of this agenda item. We wish to emphasise that for the United Nations to fulfil its mandates, it must be funded adequately and in a predictable manner. The Group is concerned that the dire liquidity situation of the UN has seriously impacted mandate delivery.

4. The Group regrets that liquidity measures will continue to be imposed. We are of the view that delegations should be consulted in advance on austerity measures that could have an impact on the work in the main organs of the United Nations as requested by relevant General Assembly resolution. The Group reiterates that mandate delivery must be the driver of budget implementation. We are deeply concerned that cash availability has repeatedly become a dominant factor potentially hindering mandate delivery.

Madam Chair,

5. The Group notes the proposals from the Secretary-General contained in his report. The Group stresses, however, that the most fundamental and effective answer to the recurrent liquidity problems of the Organization depends on Member States fulfilling their obligations to pay their assessed contributions in full, on time and without conditions. We welcome the efforts from those Member States which have been making consistent efforts to reduce their arrears and to provide more predictability to the Secretariat on their payments. However, the Group of 77 and China also notes that there are special hindrances that temporarily prevent some of the developing countries from meeting their financial obligations. We also emphatically recall that one single Member State, which is also the only beneficiary of the maximum ceiling in the scale of assessments, continues to be responsible for more than 90 percent of arrears to the regular budget.

6. The proposals contained in the Secretary-General's report do not form the fundamental way of solving this problem. However, mindful of the impact of the liquidity crisis on mandate delivery, the Group will engage actively to identify the most appropriate responses to the current situation.

7. With regard to the proposal on suspending the return of credits of regular budget, the Group believes that it is the prerogative of the General Assembly to make decisions based on different specific conditions each year. We also continue to believe that regular budget credits to be apportioned among Member States in accordance with the Financial Regulations and Rules shall offset regular budget arrears of Member States before crediting to the assessments, and that the Financial Regulations and Rules should be amended accordingly.

8. On the peacekeeping front, the Group is encouraged that the cross-borrowing mechanism approved in General Assembly resolution 73/307 and extended in 76/272 has in part contributed to the timelier payment of liabilities to troop and police contributing countries. However, such improvements on the reimbursement to TPCCs remain precarious, and the Group is not in a position to support the idea of using peacekeeping liquidity to mitigate the liquidity challenges of the regular budget, which we believe is neither good budgetary practice, nor sustainable.

9. In conclusion, the Group is ready to engage constructively, with a view to achieving a successful outcome on this important agenda item.

**I thank you**.