United Nations -- Stressing that the United Nations "must leave behind
the unhealthy practice of placing excessive reliance on a single
contributor," U.S. Ambassador Richard Holbrooke October 2 formally
opened the U.S. effort to have its share of the UN regular budget and
peacekeeping costs reduced.

In a speech to the Fifth Committee (budget and finance), Holbrooke
emphasized that in making the proposal "the United States is not
backing away from our unique responsibility to this organization."

The United States is currently assessed 25 percent of the regular UN
budget and about 30 percent of peacekeeping costs. The U.S. Congress
has directed the U.S. Mission to the United Nations to renegotiate the
assessment to 20 percent of the regular budget. Congress has already
authorized the Clinton Administration to pay only 25 percent of the
peacekeeping costs. The payment of almost $1,000 million in arrears
also depends on the reassessment. The Fifth Committee is expected to
take a decision by the end of the year.

"We are launching today nothing less than an effort to improve and
strengthen the UN by a process of reform and restructuring that take
into account new realities, including realities of an economic nature,
but also enshrines and reinforces the historic criteria of the UN,
including the capacity to pay," said Holbrooke.

Following is the text of Holbrooke's remarks:

(begin text)

Thank you, Mr. Chairman, and congratulations on your election as head
of the Fifth Committee. We wish you the very best of success in the
very important deliberations which have been launched today and which
will continue intensively. And I also want to express my admiration
for your predecessor, Ambassador Wensley, for the way she has
conducted the discussions over the last year. I would also like to
congratulate the members of the Bureau on their election, and to wish
you strength and wisdom as you proceed. We have confidence that this
process will ultimately strengthen the UN, although it's going to be a
very difficult process indeed.

My fellow representatives to the United Nations, I appear before you
again, and I'm so glad that so many other Permanent Representatives
share our view of the importance of this and are here in the hall
today to participate in Fifth Committee because of the great
importance of what is being undertaken here. We are launching today
nothing less than an effort to improve and strengthen the UN by a
process of reform and restructuring that takes into account new
realities, including realities of an economic nature, but also
enshrines and reinforces the historic criteria of the UN, including
capacity to pay.

Less than one month ago, we all participated in the historic
Millennium Summit. The 150 leaders from countries around the world who
came to New York came here to create a new vision for this great and
vital and indispensable organization, and to set forth a dynamic plan
of action. While I think we all came out of that week a bit tired, I
think we also came out of it with a sense of renewed appreciation for
what the UN has achieved, for where its potential lies, and -- I hope
- - for what it will take from all of us to see the promise realized.

Today the United Nations is at a watershed. Let us bear in mind, as we
analyze our current situation, where we have been. In 1946, the United
Nations' creators aimed to invent an institution that could prevent
wars, protect human rights, and bridge divides between the peoples of
the world. In the ensuing decades of the Cold War, that dream proved
elusive. Polarization bred paralysis and the membership grew
disillusioned. Discouraged, many threw up their hands - and this
unfortunately included many Americans -- and allowed the UN's
structures and systems to atrophy. The UN became bloated by a
bureaucracy which was not responsive to the needs of the peoples of
the world. The Security Council and regional groups often became
frozen in time, and ignored clear signs of waste within the
Secretariat.

As the geopolitical climate began to change over the last 11 years,
the UN did its best to forge a new role in areas ranging from
peacekeeping to development to environmental preservation. With a weak
infrastructure and uneven support, the UN took halting steps forward,
steadily reasserting its role and slowly winning back the trust of its
membership. I would say in this regard, that the United States of
America's population and people have shown increasing respect for the
United Nations in the recent months and over the last year or two.

Last June, after extensive consultation and experimentation,
Secretary-General Kofi Annan set out a bold new vision for the UN. His
blueprint inspired the world, prompting leaders around the world to
unite around a set of goals that are ambitious and concrete. The
Secretary-General deserves great credit for what he has done. During
the Millennium Summit, our heads of state, to a considerable and
remarkable degree, succeeded in harmonizing competing priorities,
values, and beliefs to lay out a shared plan. Today, we have the
historic opportunity to back this resolve with action. I implore you
--I beseech you -- let us not squander the opportunity.

No part of the UN System has a more pivotal role than the Fifth
Committee. In the coming months and years, the Fifth Committee will
determine whether the UN can marshal the human resources needed to
implement the Millennium Summit agenda. We will determine whether the
Secretariat will be adapted for the global information age. And most
importantly, the Fifth Committee will set out to create new, more
modem and more equitable financial structures for the UN.

If there is one thing the Millennium Summit's targets have in common,
it is that each will require that the UN have the means to deliver on
its mandates. This will not be easy. As we all know, the UN has for
the past decade been in a financial straight-jacket. This problem has
no single cause. Arrears from member states, including my own, are
undeniably an element, and one that I deeply regret. All of my friends
here in the United Nations will know that no issue has been more
important to us in the year since I took this job, and I have
committed myself-- in public and in private -- to make UN reform,
including the settlement of our arrears problem, my number one
sustained priority. I think many of you are well aware of the effort
that Ambassador Hays, Ambassador Cunningham and my other colleagues
have made in this regard. Almost every Mission in this room has been
contacted by the United States in an effort to build a consensus for
reform which will make it more possible for us to meet our full
financial obligation. I do not shirk from admitting that our failure
to pay our dues on time has contributed to the problem we are here
for. As President Clinton has repeatedly said, we do not feel
comfortable in arrears, and we wish to end that anomaly in our own
participation. As I said when I addressed the Fifth Committee for the
first time a year ago, I commit myself personally through the
remainder of my tour to dealing with this issue in an open and frank
and transparent way. But we need your help. We need your help and your
understanding.

The roots of this issue run deep, and they don't relate solely to the
United States' failure to pay all of its dues on time. We need to stop
the ossification of the UN's financial structures. We need to stop the
concretization, the locking in stone of a system predicated on old
criteria and on old realities and that flouts the fundamental
principle of our sovereign equality as Member States.

At the dawn of this new Millennium, we have the opportunity to turn
the page and put the UN on a sound financial foundation. And this must
begin by updating the United Nations scale of assessments, both the
regular budget and, as we will discuss tomorrow, the peacekeeping
budget.

Over the past months, momentum has built on this issue. More than
seventy-five Member States have joined together to create a new agenda
item to discuss revisions of the UN peacekeeping scale. This is a
giant step forward - the first time in 27 years that the Fifth
Committee will formally discuss a significant revision of this
out-moded, out-dated, and inaccurate scale that covers the most
important functions of the UN and peacekeeping. The breadth of
participation in this request to create this new agenda item is in
itself evidence that the political alignments of the past are giving
way to a pragmatic, forward-looking consensus. As leaders of this
organization, Russia and China - as members of the permanent
membership of the Security Council -- have committed themselves in
statements along with Great Britain, the United States and France, to
fulfill our special responsibilities for peacekeeping financing
through contribution rates commensurate with their countries' role and
status. Nearly twenty other member states from all regions of the
world have already announced their voluntary willingness to pay more
under a more credible system of assessments. The Gulf Cooperation
Council and the Geneva Group have called for revisions to the UN's
regular and peacekeeping scales of assessment by the end of the year.
And I need to underscore the extreme importance to my government of
making some revisions -- even if incomplete, even if not fully
adequate - of making some revisions before the end of the year in both
the regular budget and the peacekeeping budget. The Security Council
as a whole has endorsed the need for stable financing, and the entire
membership - - in our Millennium Summit declaration - - cited the need
for a reliable system for funding peacekeeping.

The Brahimi report gives us the lever and the rationale and a very
impressive set of recommendations which cannot be carried out unless
financial restructuring accompanies them, and I shall address this
problem in more detail in the Fifth Committee tomorrow.

The political will appears to be here for the first time. Now it is up
to us, the Member States and the representatives of them in this room,
to overcome our differences and confront the devil in the details.
There is growing agreement but not yet a full consensus on the
fundamentals of a new system: more up-to-date economic data, and a
broader burden-sharing among Member States based on two criteria -
real ability to pay and real responsibility to contribute.

The base period, in our view, should be shortened in order to better
reflect current realities. In a world where business cycles can happen
overnight, and technological revolutions take hold in months rather
than years, ability to pay can no longer be measured in data that is
10 years old. We need action also to broaden the UN's tax base by
introducing a sliding gradient that better reflects the ability to pay
of the world' powerhouse developing economies. The debt burden
adjustment should be predicated on actual debt flows rather than a
theoretical estimate that is at odds with readily available, concrete
data. Together, these steps will culminate in a scale that should be
more transparent, more in tune with economic realities, and more
fairly distributing the burden and privileges of financial
responsibility here at the UN.

There is one more element. As it moves into the twenty-first century,
the UN must leave behind the unhealthy practice of placing excessive
reliance on a single contributor. The principle of avoiding
over-dependence on any one Member State was embedded in the UN's
methodology from the outset, but has fallen victim to politics,
inertia and actions on all sides. We wish to recommend strongly, and
request strongly, that it be reasserted so that we help promote the
UN's financial and political well-being.

Let me be more specific. Since 1946, the United States has recognized
that the principle of "capacity to pay" -- and the whole UN has
recognized that the principle of capacity to pay --must be modified by
other critical imperatives: a limitation on reliance on any one single
member state, that is, the ceiling; appropriate acknowledgment of the
status of those who have very limited capacity to pay, that is, the
floor; and, a mitigation of commitment to pay for those whose
economies are still developing, that is, a gradient. "Capacity to
pay," as I've said repeatedly, is the cornerstone, but it is not
sufficient in and of itself to provide an adequate and sustainable
foundation for this edifice. If the scale was not political, we would
have turned responsibility over to a technical committee decades ago.
Instead, we are deeply engaged, continually, in these triennial
debates.

In the post-war period, when the U.S. accounted for roughly 50 percent
of world GNP and the UN had only 55 members, the scale ceiling was set
at 39 percent out of recognition that it would be unhealthy for the UN
to over-rely on one Member State. Since then, as the UN has grown, the
ceiling was gradually lowered to maintain political balance. In 1973
the ceiling was reduced to 25 percent. Since then, 56 new Member
States have joined the UN and the world economy has been transformed.
New economic powers have emerged, while others have retreated.
Productivity and trade flows have skyrocketed, energy and industrial
production have grown exponentially, illiteracy and infant mortality
rates have declined in most of the world. These new realities should
be taken into account in any revision of the scale. With these trends,
and in light of our overriding responsibility to ensure that this
organization can move forward on solid financial ground, the time has
come to reestablish the balance that the original framers of the
Charter sought to strike.

Mr. Chairman, I want to make clear that in proposing this adjustment,
the United States is not backing away from our unique responsibility
to this organization. Of the nearly $3 billion that the U.S. will
contribute to the UN in this calendar year, just $830 million is for
assessed contributions for the regular budget and peacekeeping. More
than $2 billion goes toward voluntary contributions to UN development,
health, disarmament, humanitarian aid, human rights, and environmental
activity. The United States has played this role as the largest
contributor to the UN by far for the entire 55 years the UN has been
in existence. We are proud of this role and we are determined to
sustain it for the next 55 years. We seek a reduction in the ceiling
not to shirk our commitments, but to strike a more appropriate
balance.

My fellow Ambassadors, our task is clear. Our work is before us. If we
are to give life to the vision we share for this institution we must
come together and join in partnership to transform the UN. If we
succeed, we will have delivered on the commitments our leaders made
here in September. If we fail, the spirit of the Millennium Summit
will die very rapidly, and undercut the hopes of millions of men and
women throughout the world who look to the UN to make their lives
better.

In conclusion Mr. Chairman, let me end on a personal note. This
administration will remain in office until noon on January 20th and we
will be committed until noon on January 20th to work with you and your
colleagues for reform of the United Nations financial structure - both
regular budget and peacekeeping - as our highest priority. We have
crises in Sierra Leone and East Timor and in the Congo and in the
Middle East - where the situation has gotten more serious over the
weekend in Israel. In all of these areas, the United Nations has had
or will have a role to play. In order to make it succeed, we must
improve and reform the system. Therefore, I consider the debate that
has begun today of historic importance, and again, I commit the United
States government -- the U.S. Mission to the United Nations, the
Administration in Washington including President Clinton and Secretary
Albright, and especially myself-- to this effort for the next four
months.

Thank you and I congratulate you on your assumption of this job --
which you may wonder later whether you were right, whether you were
sane to take or not - but we congratulate you on your willingness to
undertake it and we wish you the best of luck.