26 December 2000

Transcript: Ambassador Richard Holbrooke on U.N. Dues Assessment

(Complicated restructuring of UN dues scale successful) (3200)

United Nations -- U.S. Ambassador to the United Nations Richard
Holbrooke said December 22 that after more than a year of
negotiations, U.N. member states were able to agree on a new scale of
assessments for U.N. dues that will reduce the U.S. share of the
regular U.N. budget and more fairly reapportion others' shares to
reflect changes in the world economy in the past 20 years.

The agreement was reportedly approved by the General Assembly later,
over the weekend.

The United States, the largest single contributor to the U.N. since
the organization was founded, had set restructuring the scales of
assessment for both the regular U.N. budget and peacekeeping
operations as a main goal for the year. The so-called Helms-Biden
legislation linked the reduction of the U.S. proportion of the budget
as a key factor in the repayment of about $1 billion in U.S. arrears
to the organization.

The final agreement has the United States paying 22 percent of the
regular budget, down from 25 percent, and 27 percent of peacekeeping,
down from about 31 percent. Easing the transition for nations that
have had their percentage of the budget increased is a one-time
contribution of $34 million from U.S. entrepreneur Ted Turner, the
founder of the CNN television network. The sum is the three percent of
the U.N. 2001 budget resulting from the U.S. reduction.

Turner, who stepped into the mix about six weeks ago, Holbrooke said,
"with his characteristic combination of vision and energy and a
profound understanding of the leveraging effects of a dramatic
request," said if the $34 million difference that this amounts to is
the make or break point, "I will contribute that money on a
one-time-only basis to ease you through the transition."

A final all-night negotiating session finally produced the results
that include Russia's volunteering to take a larger responsibility for
both budgets than economic statistics dictated, an increase for China,
and other countries -- such as Israel, Cyprus, Malta, Hungary, and
Slovenia -- giving up their peacekeeping discounts, Holbrooke told
journalists.

Following is the transcript of Holbrooke's remarks:

(begin transcript)

Question: It looks like you're pretty close to a deal for the U.S. on
22 percent for the regular budget, somewhere around 27 percent on
peacekeeping -- still not exactly Helms-Biden -- and there's also the
issue of legislative demand for a zero growth budget. My understanding
is that early in the next year, you'll be asking for some more money
to go over the zero growth level, you know by $30-$40 million, to
cover Brahimi and some other things. Any sense as to what the
likelihood is that Congress is going to support this, and what are you
going to do precisely in the next couple of days? Are you going to go
to Washington or visit these guys at home?

Ambassador Holbrooke: I think given the specificity of your question
and your reporting this morning, you should give the briefing. First
of all, I am extremely pleased to be able to stand here this morning
on the day set a year ago as the final day of the Fifth Committee
negotiations -- the budget committee negotiations -- to be able to
report to you that the budget has been done. There is a little bit of
clean-up left, but it's been done and we met our deadline. And it was
a very near-run thing. Yesterday at this time, we had no idea if we
were going to make it or not. That was not low-balling for the press,
yesterday. We knew we were in American football terms -- fourth down
and goal to go on the one with no time-outs left. We needed a
touchdown. But we really didn't know if we'd get it or not. And we
did.

It is absolutely true, as Colum Lynch has just said, that we are going
to get 22 percent as our assessment of the regular budget, and on
peacekeeping -- we don't have the exact figure yet because there are a
few things to work out -- but it looks like it will start out in the
27s for 2001 and then move down over the next two years.

This is a tremendous achievement for the United Nations. For the first
time since the original 1973 peacekeeping structure was put into
place, there was a review of it. Changing it was not easy. Everybody
had to make concessions; everybody had to make adjustments. But in the
end, we got a deal. I'm not going to pretend that I think that every
country was equally supportive and equally generous, but that's not at
issue. What we have is reform. For the first time, many of the
so-called developing countries -- I say so-called because some of them
are very poor and aren't developing and others are fully developed but
they like to group themselves into a single group in peacekeeping and
that's where they have grouped themselves for the last 27 years -- for
the first time, those countries in that group which have incomes above
the world average income level -- the world income average level that
we use at the U.N. is $4,797 per year -- and everyone argues about
that, but that's the number the UN gives us -- for the first time
countries above that level will start to give up part of their deep
discounts. Some of those countries will give them all up -- Israel,
Cyprus, Malta, Hungary, Slovenia -- other countries will give it all
up right away. Other countries will give it up in stages -- some
countries will give it all up and some will give part or most of it
up. We had to take into account -- I'm talking now only about
peacekeeping, bear in mind, everyone gets peacekeeping and regular
budget confused -- we had to deal with individual circumstances,
ranging from the fact that some countries felt the data was lagging
behind recent declines in their economy to exchange rate anomalies to
special cases. Some countries were very generous and other countries
were less generous, but it came together in a new system with
progressivity. A periodic review is built in. Remember we spent the
first six months of this year simply trying to get enough countries to
agree to review the thing. It took us six months to get it agreed it
would be on the agenda. And then it took us another six months to
agree to the decision which came at about 5:00 this morning.

On the regular budget, there was of course intense resistance to the
fact that the U.S. wanted to go down three points from 25 to 22. We
knew there would be resistance from the beginning. The resistance came
from the countries that feared they would have to pick up the extra
money. As the year drew to a close, the resistance became more and
more intense. It just kept growing and growing. Countries that said
early on, "We'll support you," didn't anymore when they said, to use
the European Union's mantra, "We don't want to pay more so you can pay
less."

Into the mix stepped Ted Turner six weeks ago. After I had briefed him
and some of his associates on the problem, Ted Turner, with his
characteristic combination of vision and energy and a profound
understanding of the leveraging effects of a dramatic bequest, said if
the $34 million difference that this amounts to is the make or break,
I will contribute that money on a one-time-only basis to ease you
through the transition.

Why was that so important? Well, as the year grew on, country after
country passed its national budget based on the assumption that we'd
still pay 25 percent. And so countries all over the world came to us
and said, "You know, we've already budgeted the money and we can't
pick up the extra." And we'd say, "It's only a million dollars." And
they'd say, "Well we're not going to do it." So, with Ted Turner's
offer in hand, in secret -- we agreed we wouldn't reveal the source of
it -- Colum Lynch figured it out yesterday and I congratulate him on
that -- we would have announced it this morning anyway because we're
not going to pretend about it -- but with Ted Turner's extraordinary
offer in hand, we began to talk to individual countries and then, two
days ago, the group, and said, "Look, if you will take the U.S.
assessment to 22 percent, effective January 1, 2001, we will in turn
defer the consequences for a year." That put $34 million on the table
which hadn't been there. Then came a brutal discussion of how to
distribute the money.

Some countries who were very accommodating said, "We by rights of a
pro-rata distribution, we would get a million or two million dollars,
we'll kick it into the pot to the countries that need it more. Canada,
for example, was very supportive of this process and was very helpful
in doing that. So were several other key countries. Every time I
single out one country I get into trouble from the others who say,
"Why did you ignore me?" I only mention Canada because I had just been
talking to Ambassador Heinbecker.

Other countries moved significantly. China is going to go from 0.995
of one percent in the regular budget to 1.55 percent of the regular
budget and in peacekeeping they'll go up to about 1.94 percent. So
China is going to go up 55 percent in the regular budget and I think
over 60 percent in the peacekeeping budget. So this is a tremendous
achievement.

Now in regard to zero nominal growth. That was part of separate
legislation. We fulfilled that legislation. There is no current
legislation on that issue. If the Brahimi report is implemented and to
the level agreed upon by the Fifth Committee -- 95 additional slots --
if that dictates an increase in the next budget, the Administration, I
hope and assume, will take that into account. But I stress that that
was a separate issue.

Question: Ambassador, have you had any kind of assurance from the
incoming Administration or from the Republicans in Congress that you
can actually get through Congress the additional peacekeeping funding
you're going to need?

Ambassador Holbrooke: What do you mean by peacekeeping funding?

Question: At the moment, U.S. legislation caps the U.S. contribution
to peacekeeping at 25 percent and you've just said it's going to be 27
percent. So how are you going to make up legally that extra two
percent?

Ambassador Holbrooke: Well, first of all, it's easier to deal with a
two percent gap then a six percent gap, which is the current gap and
which has led to the arrears problem. But beyond that I can't speak
for the incoming Administration or for the new Congress. I have
discussed the issue twice with Colin Powell. He is very understanding
of it. He has said that he hoped the issue would be resolved as
quickly as possible. I look forward to briefing him in more detail
next week. He is an old friend of mine and I think he's going to be a
great Secretary of State. He will have my full support. I look forward
to talking to him about it. But I can't make any comments about how
they're going to react.

As for the Congress, we've briefed all the relevant people in
Congress. The Ted Turner offer was known to them in advance. It is
completely consistent with U.S. law and U.N. regulations, provided it
is done in the correct way which it will be. We've worked out all the
details. Ted Turner sent Secretary Albright a letter this morning
formally making the commitment. So we'll see. I'm hopeful and I look
forward to talking to Senator Helms and Senator Biden about it
directly. Neither of them was available this morning but their staffs
were fully briefed and I have talked to both of them last week about
it.

Question: Senator Biden when he was here last week suggested that he
would be willing to try to get some kind of a change in the
legislation if the peacekeeping didn't come down to 25 percent. Did
that help you?

Ambassador Holbrooke: Yes, very much so.

Question: Presumably, then the E.U. is still pressing for some kind of
conditionality to insure that the other arrears come through.

Ambassador Holbrooke: Oh that is a very important point. Of course,
Senator Biden's comments from this microphone last week were helpful
because they indicated to the members of the U.N. that if the U.N.
helped the U.S. he would lead the effort for the U.S. to help the U.N.
more. However, we will not and cannot accept anything in a U.N.
General Assembly resolution that binds the United States on the basis
of what you called "conditionality," and you're using one of the code
words in this building so you obviously know what I'm talking about.
I'll just be very clear on this. That is against the Constitution and
it is against the separation of powers and we cannot and will not
accept it. And I think the membership understands that.

Question: What changed between yesterday and last night for the deal
to be struck?

Ambassador Holbrooke: That's a very tough question because there were
30 or 40 different issues on the table, some of such mind-boggling
technicality or mind-numbing complexity, that it is hard for me to
quite answer. I think that Ted Turner's offer -- although I stress
that the membership didn't know the source of it the way that you now
do -- Ted Turner's offer provided us with the flexibility that he had
intended it to. It was as I said earlier, an extraordinary
demonstration of how to use philanthropic money for leveraging effect.
This was not simply the case of a rich person giving money to build a
building; it was money to change a situation.

The issues were incredibly complex. Do you use a three-year base
period or a six-year base period for the economic data? Within, for
example, the European Union -- which tried to have a unified position
-- that issue cut both ways. Some countries were helped by three and
some were helped by six. The middle point -- 4.5 -- I need to explain
the 4.5. Four point five doesn't mean the economic data for four and a
half years -- it means you take the six-year data and you take the
three-year data and you average those. That again helped some and hurt
others. A tremendous battle about it.

The question of whether newly-rich countries would give up their full
discount divided the membership. Some volunteered; I mentioned them
earlier. Others said no, we still want a little discount to show that
we're not fully developed. There were some issues like the gradient
and debt flows and debt stock that are really too complicated for me
to try to explain even if I understood them.

But in the end what I think drove the process was that we were facing
defeat. This would have been the first time in U.N. history that we
didn't have a budget on time. And everyone had agreed for months
reform was necessary. And everyone in the end cooperated. I need to
note the Russian position here. The Russians voluntarily took a much
higher amount of money as their responsibility in both peacekeeping
and the regular budget than the economic statistics for their country
dictated. So we note that too. And I already noted the Chinese. And I
note Brazil and Argentina's efforts to find compromises that reflected
their effort. And Turkey's decision to voluntarily start increasing.
And Korea -- Korea is the country in the U.N. that faces the largest
increase over time. So they asked to space it out over a number of
years, which we thought was reasonable. There were many countries with
special circumstances. But in the end everyone came together.

It was a very long and very tough week. And I commend everyone. I
especially commend Ambassador Gert Rosenthal who ran the Fifth
Committee. And on my own staff, Ambassador Hays, Ambassador Cunningham
and Suzanne Nossel who have gone without sleep for several weeks. Joe
Connor who came in and spent the whole night with us last night at the
U.N. And a whole host of other people at the so-called experts level
who never stopped working on this until they finally found numbers
that worked so that everyone could accept them even if no one is
entirely satisfied.

Question: Has General Powell been informed of this? Is he going to
help you lobby Congress?

Ambassador Holbrooke: On the first part of the question, as I said
earlier, yes, he has been informed. I talked to him twice this week
and will see him next week. And on the second part of the question, I
did not ask him to do that and he will speak for himself.

Question: Is he satisfied with the deal though?

Ambassador Holbrooke: You'll have to ask him. As I said yesterday, I'm
not going to characterize my private conversations with him except to
say that Secretary Albright and I have kept him informed and he said
that he would like to see this issue resolved and I think that we can
report to him that this mission has been accomplished.

Question: Can you explain the rationale behind the U.S. government
accepting money from a private individual in budget negotiations? Was
there any opposition to this?

Ambassador Holbrooke: It's perfectly legal, let me stress that, I'm
not sure you heard my opening comments. The rationale? To get the deal
to save the U.N. It was Ted Turner's offer which was contingent on
success. He didn't just give the U.N. -- let me be clear on this --
Ted Turner didn't just give the U.N. $34 million. He said, "I will
make available $34 million if those $34 million will make it possible
for us to get the deal and reform the U.N." It was the most
sophisticated use of philanthropic funds for a larger purpose that I
can imagine. And I cannot imagine that anyone would question the value
of it or the extraordinarily thoughtful -- I think visionary -- way
that it happened. And I commend Ted enormously. I talked to him this
morning. I thanked him on behalf of our Administration. I asked him if
he would come to New York and allow us to thank him personally before
we leave office. I am deeply moved by what he did. People give money
all the time and I commend them for it but you have to go a long way
to find a gift that made as much difference as this one. Don't you
think? Really. Any other questions?

Thank you.

(end transcript)

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