Amended
FINAL
Statement by Mark Malloch Brown
UNDP Administrator
on
Review of Funding Commitments to UNDP
UNDP/UNFPA Executive Board,
Geneva
26 June 2002
Mr President, Excellencies, Ladies and Gentlemen, Friends,
On Monday I outlined to you the very real progress UNDP has made over the
past few years and our overarching vision for the future. And I am very grateful
for the strong statements of support and appreciation from so many of you about
the direction we are taking in particular for your strong statements in support of
the importance of an adequate core resource base for UNDP.
Now, I want to focus on the other part of the formula – namely resources, and in
particular on the core resources that are so essential to UNDP’s ability to
achieving the objectives and results I set out. I’m hoping that we today can
initiate a process taking into account the increased commitments to
development coming out of Monterrey; the opportunities for a serious re-think of
the development architecture emerging from the G-8 Summit; and your own
testaments of UNDP’s improved performance to put UNDP back on a much more
solid funding base. It’s time to put your money were your mouth is, if you’ll
forgive the crude metaphor.
But let me start with the overall resource situation of UNDP. And on that front, I
am happy to report to you that

Total income for UNDP and its associated funds and programmes rose by
$ 220m,or 9%, in 2001 to $2.59 billion, the highest level achieved to date. For
the first time, income from all sources grew.

Regular, or core, resources reversed their 7 year downward trend,
growing by about 3% in 2001: while much more modest a growth than we would
have hoped - and I will revert to that issue in just a moment - nevertheless it is
extremely important that that line is at least pointing in the right direction and
on its way back up.

Third party co-financing – that is to say, funds emanating from the
OECD/DAC countries and other parties, including the European Commission for
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programmes and projects – grew by 10%, bringing the total contributions to
UNDP from donors to $ 1.4 bn.

Programme country cost sharing – resources that programme countries
entrust to UNDP to manage in support of their own development programmes also rose by 14% to $ 1.1 bn.

Finally, the new thematic trust funds yielded some $ 21.3 mn in income
in their first months of operation last year.
Very significantly, the Integrated Resources Framework indicates that in 2001,
UNDP was – overall spending over 41% of programme resources on
governance-related interventions, underlining that is where the bulk of demand
for our services increasingly lies. A further 21% went to interventions directly
related to poverty alleviation, 15% to special development situations, and 12%
went to the environment.
I. REGULAR RESOURCES
But let me now turn to the trickier, but critical, main subject of today’s
discussion: the core resource base of UNDP and its associated funds and
programmes.
It is of course, very encouraging to be able to report that core resources
increased to $652 million 2001, up from $634 million in 2000 and the first such
increase since 1994. And I am also very pleased to be able to say that -- on
current projections and subject to your support and commitments today – that
increase will be retained in 2002.
The amount of growth is modest – an increase of about 3% in 2001 with the
same expected for 2002 - but it is nevertheless a critical first step in revitalizing
the broader commitment to core. And those bare-bones figures also do not do
full justice to the scope and breadth of the turnaround.
Building on the 26 countries who increased their contributions last year, in
2002, at least 24 countries have already raised their pledged commitments to
regular resources. Many have now been making sustained increases now for 2-3
years. I warmly commend those efforts, and the strong political support for the
new UNDP that lies behind them.
As highlighted in the documentation for this meeting and in the short handout
that has been circulated, it is anticipated that at least 11 OECD/DAC donors
will increase their contributions in 2002 in local currency terms although one
donor reduced its contribution this year.
In terms of overall contributions, I would like particularly to recognize the United
States for being UNDP’s top donor, with Japan, Norway, the Netherlands, and
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the United Kingdom rounding out the top five. And I would also like to thank
Ireland for its continued exceptional performance, with an increase of 44.2% in
2002 and a multi-year pledge into next year that retains the same high growth
rate.
A number of other donors, including Canada, Germany, Luxembourg, New
Zealand and Norway have made efforts to increase their pledges – and several
donors have indicated possible additional pledges for 2002 – and it is very
encouraging to be able to welcome Greece back as its resumes its contribution to
UNDP this year.
I would also like to give a special thanks to the 34 programme countries that
have pledged and/or resumed contributions to the regular resource base of the
organization thus far in 2002, and pay tribute to the 7 programme countries who
currently anticipate an increase in their regular resource contributions.
Let me in addition, welcome back the five programme countries that have
indicated their intention to resume contributions this year and give a special
salute to India, China, the Republic of Korea and Saudi Arabia, for their
consistent commitment to regular resource contributions at above US$ 1 million
and encourage those that have traditionally achieved these levels to take the
necessary steps to renew their level of support to the organization.
Finally, I would also like to thank Angola, Bahamas, Czech Republic, Djibouti,
Egypt, Gambia, Uganda, Thailand, Turkmenistan and Yemen, all of which have
either increased their contributions by at least 10 per cent in local currency
terms, or committed to pay in US dollars, thereby directly assuming exchange
rate risks. We are extremely grateful for this support.
II. A WIDER, MORE PREDICTABLE RESOURCE BASE
In terms of the broader goal of reducing over-dependence on key donors, some
headway has been made, with the top 10 donors providing 80% of UNDP
resources.
As requested during the first annual funding meeting and implemented during
2000 and 2001, the documentation before you now also provides the 2002
contributions to regular resources on the OECD/DAC donors in per capita
terms. And I would like to thank the members of our now-famous “Dollar and
above” club, that is those countries that contribute more than US $1 per capita,
with a very warm thank you to Norway’s extremely valued contribution of $
17.29 per capita. The other current members are, in order: Denmark, Sweden,
Switzerland, Netherlands, Finland, Ireland, Luxembourg and Belgium. But let
me reiterate: this club is intended to be as non-exclusive as possible: we warmly
encourage as wide a base of membership as possible!
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In terms of predictability, 11 countries have made indicative pledges for 2003
and four countries for 2004. Countries making multi-year pledges include seven
OECD/DAC donors and four programme countries.
In all cases, the amount pledged for 2003 and 2004 is at least at the same level
as that of 2002 (subject to government or parliamentary approval). Significantly,
since the introduction of the multi-year pledge, at least five countries have set a
clear precedent for using the multi-year commitments previously communicated
as a floor from which to make increases in subsequent years.
I would like to encourage other countries to replicate this model. And for those
who are unable to provide a multi-year pledge formally, because of national
legislative and other restrictions, I would like to encourage emulating your
colleagues in a similar situation who have nevertheless provided UNDP with
indicative amounts for forthcoming years in recognition of the value of this in
terms of financial predictability.
The picture regarding payment performance is also encouraging.
A number of countries responded last year to our request to provide and adhere
to fixed payment schedules and to make early payments. Efforts particularly on
the latter have helped generate significant improvements in income cash flow
management. And I welcome the announcement by 12 OECD/DAC donors of
payment schedules for 2002 for the deposit of regular resource contributions,
and encourage those who have not already done so, to communicate payment
schedules to the secretariat.
Overall, compliance with payment schedules is on track during the first part of
2002. As of 31 May 2002, five donors had paid at least 50% of their total
commitments for this year, and I am particularly appreciative of the four
countries – Canada, Ireland, New Zealand, and US – that had paid their
contributions in full by that time. For those countries that have not already done
so, I would like underline the importance of your assistance in achieving a
greater predictability of income, and ask you to inform us of your intended
payment schedules, including the earliest date for payment. I would also like to
encourage adherence to the payment schedules provided, which is critical to
effective and prudent financial management.
III.
THE TIME IS RIGHT TO TURN GOOD WORDS INTO DEEDS
While all this is good news, if we are to really build on, expand and accelerate
the kind of success stories I cited to you on Monday, quite simply, we need more
money.
As I have pointed out before, while non-core funding is clearly an integral part of
the new UNDP, it cannot be at the expense of core, which is the foundation on
which UNDP relies.
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As we discussed on Monday, in many of your capitals, there is now a much
broader debate underway on how to fulfill the agreements and funding
commitments that emerged around the Monterrey. Some of this has already
materialized itself in a higher replenishment of IDA and even more importantly in
the decision to turn some 20 percent of the IDA resources into grants. This is an
important step.
Is it not, however, also time that we address UNDP’s funding situation at a
similar political level and with the same level of seriousness? Your own
testaments in this room on Monday, more positive than ever before, seem to
answer that question with a resounding, YES. Programme countries gave ample
examples of how UNDP as the most trusted partner is responding to their needs
with sound advice and capacity building support to make real development
change happen. And, donor countries stated that UNDP is indeed the most
reformed, effective development partner, providing real value for money and
tangible results.
Despite this we still seem to be burdened by the imbalance of attention given to
development organizations in donor capitals. Finance Ministries remain focused
on the World Bank, leaving the UN and UNDP to their Foreign Ministry
colleagues. We seem still to be left out of the party when high-level political
discussion on the development architecture takes place. How in fact can UNDP
be left out of the discussion on multilateral grant funding, or when IDA and the
World Bank’s role are addressed. You need to remember UNDP’s true role as the
global development network of the UN system and as the trusted partner of
developing countries in any emerging new framework of global development cooperation.
I hope today will be the beginning of the end for these imbalances. We need to
start a process – which I know will take some time – at the highest political level
to move from Monterrey, through the G-8 Summit to a renewed commitment to
UNDP. There is a strong constellation of factors which seem to make this
possible: The global increase in ODA; changes in the funding base of the World
Bank; and performance improvements of UNDP. Let’s grasp this moment and
find the right forum to tackle this once and for all at a political level to both
increase the volume and predictability of UNDP core resources.
IV.
UNIFEM, UNV and UNCDF
Let me turn now to the funding of UNIFEM, UNV and UNCDF for last year, which
we trust will project into further increases in 2002. And let me say that my call
for a more high-level and serious rethink of the funding levels for UNDP, should
reflect on all the members of the UNDP family.
For UNIFEM, regular resource contributions reached $21.0 million in 2001,
compared with $19.1 million in 2000. This represents an increase of $1.9
million or 10 per cent. Seven donor governments increased their regular
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resource contributions and one government contributed for the first time.
UNIFEM total income rose to $32.0 million, an increase of $2.6 million or 8 per
cent over the previous year, and the organization is aiming to reach its goal of
$40 million from all sources by the end of 2003.
For UNV, the Special Voluntary Fund (SVF), although small, is crucial in
enabling the Programme to initiate, as a partner in development, creative and
pioneering activities in the field that demonstrate the role that volunteerism and
volunteers can play in social and economic development. Thanks to the
resumption of an increase in contributions by some OECD/DAC donors,
voluntary contributions to the SVF increased to nearly $4 million in 2001, an
increase of 25 per cent over that of 2000. UNV aims to reach an optimal total of
$10 million annually. In this regard, it is particularly encouraging that both
increases from current donors as well as contributions from new donors are
anticipated for 2002.
For UNCDF, the decline in contributions to regular resources suffered since
1996 was reversed in 2001, when UNCDF recorded a small increase in regular
resource income, to $24.3 million. Five OECD/DAC donors increased their
contributions in local currency terms and the Fund enlarged its support base
with two new OECD/DAC donors to regular resources. I do however remain
concerned about the low level of resources available for UNCDF. A stronger
funding base is needed for UNCDF to have the necessary critical mass of
resources to support their important work. UNCDF continues to work towards
widening its geographic resource base in the spirit of a greater burden sharing
between the various contributors and I would like to make a strong appeal to all
of you to help ensure that 2002 resource levels increase further.
V.
FOLLOW THROUGH TO AVOID AN UNCERTAIN FUTURE
In conclusion let me restate, without an adequate core to fund the leadership,
innovation and pro-poor focus that forms the basis for raising and keeping the
priorities of non-core funds, we risk undermining UNDP's fundamental anchor of
unconditional trust, presence and programme everywhere. Non-core is great but
without the strategic basis of a strong core we can neither manage it or
programme it in a strategic manner.
So in the immediate term, I am asking all of you whose governments have not
yet announced contributions to UNDP core resources this year, to do everything
possible to assist us at this critical stage by securing increased contributions. I
would also request those who have already announced funding commitments to
consider a supplementary core contribution for this year, to maintain and build
on the positive turnaround.
In that regard, as I hope I made clear today and Monday, UNDP, as the UN’s
global development network has a unique and pivotal contribution to make.
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Indeed, thanks in part to the efforts of many of you around this room, and
through the tough reform and hard work we have carried out, the new UNDP is
already making a difference in these areas. But the turnaround is fragile – so let
us seize the moment and build on the new commitments to translate our new
focus and dynamism into a more sustainable regular resource base.
Thank You
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