PERMANENT COUNCIL
OEA/Ser.G
CP/doc.4071/05
14 December 2005
Original: English
MEETING THE POLITICAL PRIORITIES OF THE ORGANIZATION OF AMERICAN STATES
(Presented by the General Secretariat in anticipation of the January 2006
Special General Assembly)
This document is being distributed to the permanent missions and
will be presented to the Permanent Council of the Organization.
MEETING THE POLITICAL PRIORITIES OF THE ORGANIZATION OF AMERICAN STATES
(Presented by the General Secretariat in Anticipation of the January 2006
Special General Assembly)
I. Introduction
The Organization of American States is at the crossroads of change. The principles and
purposes which govern the Organization have broadened significantly in just a handful of years,
providing political dynamism and momentum not seen since the adoption of the original Charter in
1948.
The Summits of the Americas Declarations and Plans of Action, the Inter-American
Democratic Charter, the Declaration on Security in the Americas, and the Social Charter of the
Americas, to be adopted in the not-too-distant future, provide a new compass for orienting the work
of the Organization.
Sadly, however, the energy and creativity used to re-orient the principles and purposes have
been found lacking when it comes to matching the financial resources and administrative capacity
required to bring the new vision of the OAS to fruition. The Secretary General and Assistant
Secretary General, using a results-oriented team approach, are determined to fulfill the vision of
Organization by reorganizing its finances and enacting the reforms necessary to ensure sound and
transparent management.
Strengthening the three fundamental pillars of the OAS, democracy and human rights;
multidimensional security; and integral development, will be the General Secretariat’s primary focus
of reform. These cross-cutting issues affect the ability of governments to govern and for citizens to
enjoy the benefits of democracy. A multi-faceted approach that optimizes the Organization’s
capacity, scope of expertise and rich diversity will best serve the needs of the countries and peoples of
this Hemisphere.
The purpose of this document is to inform the member states of the opportunities and
challenges facing the Organization so that they may make decisions regarding the budget and the
quota scales at the Special General Assembly as mandated by Resolution AG/RES. 2157. The
document begins by summarizing the General Secretariat’s vision for the three pillars of the
Organization, Democracy and Human Rights, Integral Development and Multidimensional Security,
along with a vision for a more engaged OAS with regional and global multilateral organizations. A
section describing some of the financial and management challenges follows and continues with
proposals for remedies.
In addition to exhorting the member states to approve a new quota scale based on the current
ability to pay of each state, the General Secretariat proposes a 9% per annum budget increase,
beginning in 2007, until the Regular Fund reaches $115 million in 2010. This translates into an
increase of about $8 million per year to strengthen the programmatic areas of the Organization and
pay for yearly mandatory increases. Of course, this proposed increase can only be built upon the
current true cost of running the Organization, which will be approximately $81 million in 2005 and
2006.
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II. The OAS at the beginning of the 21st Century
Increasingly, the national, the regional and the global are inextricably linked. Political and
social unrest in one country threatens the stability of neighboring countries. Environmental
degradation in one country harms ecosystem thousands of miles away. Corruption in one state
negatively impacts its own development but also affects economic growth and investment
opportunities in other countries that observe the rule of law. Even as countries pursue their own
national agendas, there is at the same time a convergence of interests, in many areas. Therefore,
changes in perception and strategy are necessary.
The OAS should not be seen merely as a regional or hemispheric body. It is the sole
continent-wide forum for political dialogue and consensus, and should engage similar organizations
worldwide. The OAS has been a pioneer in many areas of multilateral cooperation. The Convention
against Corruption, CIFTA, the Inter-American Commission on Human Rights, and the Multilateral
Evaluation Mechanism are all examples which other regions of the globe or the United Nations have
sought to emulate.
It is imperative that a revitalized OAS pursue a stronger voice and a more visible presence on
the international stage. The Organization’s leadership is prepared to provide policy guidance and
strategic direction at both the hemispheric and international levels. The United Nations and its
specialized organizations, as well as the international financial institutions will be more regularly
engaged. These can provide new opportunities and financial resources to implement the mandates of
the OAS and also provide an avenue for exchanges of information, joint efforts and coordination.
The OAS has much to offer the world beyond the Americas.
Likewise, the OAS is in the process of strengthening relations and expanding collaboration
among the Inter-American institutions; enhancing relations and working closer with various
hemispheric international organizations to share information and collaborate on issues of common
interest.
The Secretariat intends to maximize the convening power of the OAS to define and
implement mandates and advance the collective agenda of the Hemisphere. Through this unique
convening power, the Organization can provide leadership in the inter-American system and drive
political momentum to the critical areas of democracy, development, security and human rights.
Democracy, Governance and Human Rights
Strengthening and deepening democracy remain at the forefront of the OAS agenda.
Countries will not be able to achieve “full” democracy unless the intertwined issues of human rights,
development and security are also addressed. At its core, the Organization will continue to work
with governments in promoting and bolstering good governance, the maintenance of transparency and
accountability, gender equality, respect for human rights and the rule of law, all under the guiding
principles enshrined in the Inter-American Democratic Charter.
In general, governments are well elected in the region; elections are clean, fraud is an
exception, most people vote and the opposition wins frequently. The most urgent challenge today,
therefore, is more than good elections, but for governments to show that they can provide good
governance once they are elected, and that they can deliver to their people the benefits of democracy.
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Where less than two decades ago the continent had mostly dictatorships, there are now democracies.
Where there was war, there is mostly peace (except in Colombia). Respect for human rights has
increased substantially; and a lot of economic changes have allowed us to gain some ground in terms
of macroeconomic stability. But on the other hand, our democracies are still weak, reforms are
incomplete, crime has grown, poverty is very high, there is still a lot of abuse, inequality,
discrimination and racism; the rule of law is not always enforced; and there is a feeling that, if the
hemisphere is to succeed, several structural changes still have to take place in our societies. The
General Secretariat is dedicated to improving these conditions which are intimately linked to
democratic rule.
While democracy must always increase freedom and participation, a second condition of
governance is creating the conditions for a stable government. Many of the problems of good
governance in the hemisphere are not the result of too much government, but rather of lack of
government capabilities and resources to deal with many social problems in which the people expects
them to be involved. This absence is probably the most important cause of people loosing faith and
confidence in government. Strengthening governance has to do with generating political systems
that permit full participation and leave room for the formation of solid coalitions and government
majorities. This, in turn, demands that political parties be able to play a role in the formation of those
majorities and increase their capacity for political representation of the people.
In truth, we have progressed a great deal in these matters, but we still have a long way to go.
The Secretariat will continue to work to ensure the legitimacy of origin of governments (electoral
observation, etc.) but will broaden its work to assist with the legitimacy of exercise of government
(governance).
The OAS has a model human rights system in the Inter-American Commission on Human
Rights and the Court of Human Rights which is becoming a victim of its own success. In recent
years, the inter-American human rights system has achieved gradual and sustained progress. Various
factors have contributed to this success, including increasing familiarity with the system and the way
it works as well as achievements in terms of the protection and promotion of the human rights of the
inhabitants of the Hemisphere and their establishment in jurisprudence. The amendments to the Rules
of Procedure of the IACHR and the Inter-American Court of Human Rights in 2001 led, as was to be
expected, to an increase in the number of cases brought before the Court.
Since 1977, the number of petitions filed with the IACHR has increased 177 percent. There
has been an even higher percentage increase in the number of cases brought before the InterAmerican Court. In the ten years between 1983 and 1993, the IACHR published 247 reports on
individual cases and petitions. In the following decade, there were 533 reports, an increase of 115
percent. The increasing workload of the Commission and Court has coincided with diminishing
resources to those areas. The Secretariat is committee to reversing this trend and ensuring that this
flagship area of the Organization has all the resources it needs to carry out its important work.
Integral Development
High levels of poverty, unemployment and inequity persist in the Hemisphere and poverty
levels continue to rise in both rural and urban areas creating frustration and pockets of social and
political unrest. Vulnerable economies face increasing challenges in the globalized economies and
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changing trade rules. Therefore, working with member states to equip their citizens with the requisite
tools to realize their productivity potential is critical.
The General Secretariat supports an integral and integrated approach to development that
combines good governance, economic, cultural, social and environmental issues. The Secretariat will
seek to enhance its support for Member States in building capacity in these areas; and in
implementing the provisions of the Social Charter of the Americas once it is finalized and approved.
A strategic alignment of the political and development agendas will bring value-added to the process.
The area of integral development operates on two levels: political and technical. It is
essential that correlation exists between what is decided at the political level and the programs that
are implemented at the technical level. Using its convening power at the highest level, the OAS is
able to foster agreements and define hemispheric policies through the different Ministerial Meetings
which take place within the OAS framework. More importantly, these meetings of Ministers of
Education, Labor, Culture, Science and Technology, Social Development, Tourism and Sustainable
Development feed into and inform the Summit Process – from which the Organization, in turn,
receives its highest level mandates.
The OAS is capable of implementing regional and sub-regional programs, and should move
towards the implementation of larger, if fewer, sub-regional development projects, rather than a
multiplicity of very small bilateral projects. These processes are important in assisting member states
in sharing experiences and expertise. OAS Offices in member states will play an enhanced role in
facilitating cooperative action and in mobilizing human, technical and financial resources.
As always, but to an even greater extent, education will be a critical component of all these
initiatives. The Secretariat will give increased prominence to education as a key tool for achieving
equity, social justice and for providing citizens, especially in rural areas, with access to development
opportunities and employment. Education from the primary through the secondary level must be
available to all. It cannot be the exclusive terrain of the well-to-do and the well-connected. We
believe it is a fundamental right of all peoples.
Building human capacity, expanding access to technology, deepening public-private
partnerships and supporting a culture of entrepreneurship will be essential ingredients for increasing
opportunities for all the peoples of the Hemisphere. OAS offices in member states and specialized
agencies will facilitate training for youth - especially youth-at-risk - women, indigenous groups,
entrepreneurs, educators and other members of civil society.
Consequently, the Secretariat will ensure that the Fellowships program remains selfsustaining, transparent, and efficient, and will seek to enlarge the program through new specific fund
contributions. The program should allow and encourage students to pursue studies in any country
within the Hemisphere where the training is available. This is one of the most important tools for
promoting greater understanding, improved communication, and the promotion of shared values
within the Americas.
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Multidimensional Security
The 2002 Declaration of Bridgetown redefined the concept of security to encompass political,
economic, social, health and environmental threats. This concept was further refined at the Special
Conference on Hemispheric Security in Mexico in 2003.
Traditional and non-traditional threats that undermine the stability of member states include
drug trafficking, transnational crime, gang violence, human trafficking, cyber crime, terrorism, illegal
trafficking in arms, HIV/AIDS and other health pandemics, and natural disasters. The task of
managing these conflicts exceeds the capabilities of individual governments. In recent years OAS
member states have increasingly requested assistance in developing preventive approaches to these
threats.
CICAD, and more recently, CICTE, have developed into some of the highest profile program
areas of the Organization. CICAD has earned an excellent reputation, not only because of the quality
of the staff but also due to the commitment of the member states to making it work, especially in
enabling the constructive dialogue that has prevailed in the Multilateral Evaluation Mechanism and
other capacity building programs. The task now is to ensure the continued excellence of CICAD and
CICTE, while at the same time building programs in the new, multidimensional areas of security.
The Organization is only now beginning to address some of the new security challenges. The
Secretariat will open new program areas to address those security concerns which are not addressed
by the other security areas of the Organization, such as CICAD, CICTE or the humanitarian demining program, or by those areas of the General Secretariat or the Inter-American System which
work on the economic, social or health dimensions of multidimensional security. These “public
security” topics include fighting organized crime and gangs; stopping the proliferation and trafficking
of small arms and light weapon; fighting the trafficking of human beings; the special security
concerns of small states and natural disaster mitigation, among other threats and concerns.
The General Secretariat is committed to providing member states with the kind of cooperative
and multilateral assistance that will enable them to combat the problems that affect the stability of
their democracies and the welfare of their people.
III. Reforming the Organization to Meet the Political Objectives
The management challenges confronting the OAS are enormous and reflect years of stagnant
budget resources, staff and service cut-backs, as well as uncoordinated search for alternative sources
of funding. Significant changes to the way the organization is financed, managed and organized
must be put into place in order to begin to realize the ambitious vision of our hemisphere as enshrined
in the Inter-American Democratic Charter, the Summits of the Americas Declarations and the
Declaration on Security in the Americas.
The OAS is facing a serious institutional crisis, with a growing list of mandates for which no
funding has been provided, with multiple objectives that do not always respond to the highest
priorities. These priorities often have been set by individual donors or have been agreed upon by
individual program areas with minimal executive direction. Given this situation, the institutional
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weaknesses that we have observed in recent months, such as the budget overages in the management
and fellowship areas, are hardly surprising.
Consequently, our main management goals, as we seek to strengthen the OAS’s capacity to
meet this Hemisphere’s challenges for the 21st Century, are to:



Achieve a disciplined, transparent, and responsible administration of existing resources;
Invest in rebuilding and rationalizing the human and physical infrastructure of the
Organization; and
Increase Regular Fund financing for the primary program objectives of the Member States
(e.g., democracy, governance, human rights, integral development and multidimensional
security).
To guide us through this complex set of challenges, last September, the Secretary General
laid out an analysis of six issues that must be addressed as priorities: financing, liquidity,
transparency, internal control, administrative support, and adjustment of quota assessments (see
document CP/CAAP 2784). Two of those issues are now critical to the actions the member states
must take at the Special General Assembly to be convened under Resolution AG/RES. 2157:
financing and adjustment of the quota scales.
Financing
Background: The 2004 and 2005 Regular Fund Budget
In 1995, the Organization’s operating budget was $84 million. If at a minimum a zerogrowth budgetary policy had been maintained, meaning that the budget would have been adjusted
annually to reflect only the non-discretionary rising costs of doing business, the budget would have
reached a level of just under $110 million by 2006. But instead, the budget has steadily declined in
real terms, translating into a 44% loss of purchasing power in 2006 (see table below).
As a result, today’s Regular Fund budget of US$76.3 million does not match the operational
requirements of the Secretariat. In 2004, for example, expenditures and commitments totaled $79.9
million; almost $3 million over the approved Regular Fund budget (this included about $2.5 million
in transition costs).
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ORGANIZATION OF AMERICAN STATES
REGULAR FUND BUDGET
APPROVED FROM 1995 TO 2005 AND PROPOSAL FOR 2006
VS. LEVEL ADJUSTED FOR ANNUAL INFLATION SINCE 1995
(in millions)
$115
$109.6*
$110
$106.9*
104.3
$105
101.4
99.1
$100
97.6
94.9
$95
91.8
89.8
88.5
$90
$85
86.5
84.0
84.3
84.3
84.0
80.0
78.0
$80
78.0
76.0
76.0
76.0
76.6
76.3
76.3
2001
2002
2003
2004
2005
2006
$75
1995
1996
1997
* Projected
1998
NOMINAL
1999
2000
LEVEL ADJUSTED FOR ANNUAL INFLATION SINCE 1995
The level of expenditures and commitments projected for 2005 is $81.1 million, some $5
million over the approved budget. This disconnect between budget authority and actual requirements
is another indication of the need to lift the budget cap.
The impact of across the board budget contraction, and a consequent loss of 25% of the
Organization’s staff, has been devastating. Indiscriminate budget cuts in essential functions
traditionally seen as discretionary (e.g., travel, per diem allowances and performance contracts) will
often inflict severe damage on the Secretariat’s ability to achieve its highest priority objectives. For
example, we would not have faced, in late 2005, the urgent need of finding resources to recover the
funds that were eliminated in the budget-setting process from the Human Rights Commission if these
cost items had been seen from the very beginning as essential to the work of that body.
The 2006 Regular Fund Budget
Beyond the temporary jostling due to the 2005 budget deficit, the second immediate task
facing the Organization is how to address the looming 2006 budget deficit.
The Secretariat must start with the assumption that the approved 2006 Regular Fund budget
will have to be enhanced to prevent the 2005 deficits in key categories. Further, the Regular Fund
Budget in 2006 must be sufficient to pay for the structural changes and reorganization of the
Departments and Offices of the Secretariat as they begin the work of implementing the new priorities
and activities described in general terms in the first half of this document. The Secretary General has
met with the subregional groups and presented them with a new organizational chart, with a view to
receiving their comments before a final reorganization is enacted.
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The proposed new organizational structure was based on a comprehensive diagnostic
assessment of three core considerations: 1) the mandates assigned by member states; 2) the
identification of the functions performed in each area of the General Secretariat to comply with those
mandates, especially those for which the Organization lacks sufficient resources; and 3) earlier
reorganization efforts.
The linchpin of the new structure is the need to restore the conditions required for leadership,
coordination, and control in an institution that, over the past few years and for various reasons, has
undergone a process of fragmentation. This led to the consolidation of autonomous centers of
decision making and fostered, not only among staff members but also among the representatives of
donors and beneficiaries, customs that were not necessarily shaped by the institution’s best interests.
The situation was exacerbated, moreover, by the large number of staff reporting directly to the
Secretary General, a situation that, because it reduced his ability to direct, coordinate, and supervise
his numerous immediate subordinates, provided even more opportunities for autonomous behavior on
the part of the major units within the Organization. The new structure includes two new Committees,
a Project Evaluation Committee, and a Fundraising Committee, chaired by the Secretary General and
Assistant Secretary General respectively. These are designed to ensure that proposed projects meet
the political priorities of the Organization and that fundraising is done in a coordinated way.
Another structural reform that is required is to find a proper balance between the Regular
Fund (currently $76 million) and the Specific Funds ($58.0 million collected in 2005, not including
FEMCIDI). Specific Funds do not automatically translate into financing that will support the human
and material infrastructure required by the Organization. While Specific Funds allow the
Organization to carry out a vast array of programs and activities in support of its mandates, they are
not intended to support the institutional and management platform which allows the Secretariat to
function. In fact, all too often Regular Funds end up subsidizing Specific Fund-financed projects,
whether or not these projects respond to the highest priorities and mandates of the Organization.
As new funding sources become available, the Secretariat will work with the CAAP on a
yearly basis to identify areas and activities which could be transferred, in whole or in part from the
Regular Fund to the Specific and Voluntary Funds, thus relieving pressure on the Regular Fund - and
without any cutbacks in any of these important activities.
To begin implementing the three reforms mentioned above (fixing the base, implementing the
reorganization, and begin balancing the regular and specific funds) will necessitate that the member
states increase the budgetary authority to $81 million for the 2006 budget of the Regular Fund, versus
the $76 million approved in Fort Lauderdale for 2006.
The Secretariat proposes to effect this increase without asking for additional resources and
without a quota increase for 2006. Instead, authority from the governing bodies will be sought to use
the Reserve Fund balance of some $5 million expected at the end of 2005. Alternatively, the
Secretariat will seek additional budget authority to be financed with part of the as yet uncollected
quota arrears from prior years, which now total some $15 million, to cover these additional budget
requirements.
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The 2007 Budget and Beyond
Beginning in 2007, the Secretariat proposes to grow the Regular Fund Budget by about 9%
per year (starting from a 2006 base of $81 million), until the Budget reaches about $115 million in
2010 (see table below). This translates into an increase of about $8.5 million per year. Of this
increase, some $4-5 million annually will serve to reinforce the internal structure and absorb
mandatory and non-discretionary increases that in the past have consistently been absorbed through
staff cutbacks and infrastructure neglect.
The remaining part of the increase will allow the Secretariat to reinforce its priority programs
in democratic governance and human rights, multidimensional security and integral development as
discussed in general terms above. The Secretariat will present the Committee on Administrative and
Budgetary Affairs (CAAP) a preliminary summary of the proposed 2007 Budget which will indicate
how this part of the proposed increase will be distributed among the Budget’s sub-programs. The
document will also indicate the amounts, by-subprogram, still required by the various areas of the
General Secretariat, which will be candidates for possible Specific Fund financing.
ORGANIZACION DE LOS ESTADOS AMERICANOS
PRESUPUESTO DEL FONDO REGULAR PROYECTADO A CINCO AÑOS
11
5.
0
$120
$115
10
5.
5
$110
9.0%
$9.5
4.9
4.6
96
.8
$100
$95
9.0%
$8.0
88
.8
U$ Millones
$105
$90
$85
$80
81
.5
9.0%
$7.3
9.0%
$8.7
4.7
4.0
4.4
3.6
105.5
4.0
96.8
3.3
1.9
88.8
3.3
81.5
$75
76.3
$70
2006
2007
Presupuesto base
Regularizar presupuesto
2008
Refuerzo
2009
Aumento mandatorio de COLA*
2010
Prioridad política
Adjustment of Quota Scales
Article 55 of the Charter of the OAS states, “the General Assembly shall establish the bases
for fixing the quota that each Government is to contribute to the maintenance of the Organization,
taking into account the ability to pay of the respective countries and their determination to contribute
in an equitable manner.”
The current quota scale has remained static for the past fifteen years and no longer reflects
each member state’s capacity to pay. Some members have enjoyed prolonged periods of prosperity
and rapid economic growth; others have struggled through economic hardship and recent natural
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disasters. The current scale is distorted, out-of-date, and inconsistent with the “ability-to-pay”
principle of Article 55.
Over the years, the CAAP has engaged in numerous discussions, reviewed countless options,
and has come close to reaching an agreement on a fair and equitable scale, but a final decision has
proved elusive. This may be due to some member states’ reluctance to accept the wide fluctuations
resulting from a corrected re-assessment of the quotas. Such reluctance may not be only the product
of abrupt increases to their own assessments, but also of significant reductions to the quotas of other
member states that, in the past, have been counted on to contribute a larger share of the
Organization’s Regular Fund income. Nevertheless, this is precisely the objective of a review of the
quota scale: some contributors will be called upon to play a larger role, while others will be provided
some relief.
A periodic review and adjustment of the scale is necessary and represents the member states’
commitment to apportion their support for the Organization while respecting the underlying
principles of fairness and equity. The CAAP has been considering a proposal to adopt a methodology
that would set the minimum and maximum quotas at levels that respond to the political will of the
member states, and redistribute the remaining quotas in direct proportion to their corresponding
quotas in the Scale of Assessments for the Apportionment of the Expenses of the United Nations.
The General Secretariat encourages the membership to consider and adopt at the Special General
Assembly in January 2006 a quota setting mechanism that most correctly reflects “ability to pay” and
that is subject to periodic automatic review and implementation, thus preventing in the future the
distortions that have emerged in the Organization’s quota scale after remaining frozen for over a
decade.
A new quota scale is necessary; but equally important is for member states to make every
effort to be timely in their quota payments. The Organization may have a new and equitable quota
scale, and may have increased budgetary authority, but may still confront a liquidity crisis from
delayed quota payments which would cause tremendous harm politically and institutionally.
IV. Conclusion
In late January, 2006, the member states of the OAS have a singular opportunity to place the
Organization on a sound financial footing and the road to recovery. To accomplish this, member
states must approve a new and equitable quota scale based on each member’s ability to pay. They
must also raise the budgetary authority of the Regular Fund to reverse years of decline. The
Secretariat will also do its part by enacting a rational and streamlined organizational structure and
ensuring it administers the resources entrusted to it in a transparent manner through new and effective
internal controls.
Member states will see direct results from a revitalized and strengthened Organization, such
as an Inter-American Commission on Human Rights and a Court of Human Rights which can process
more cases in a more timely manner; timely responses to political crisis in the region; expert technical
assistance on electoral, legislative and governance issues; a concerted policy and programs for
integral development including an improved and enlarged fellowship program; an effective natural
disaster mitigation program; a hemispheric strategy to fight transnational organized crime and gangs;
and a hemisphere free of land-mines, to list only a very few specific results which will directly impact
the quality of life of the citizens of the Americas.
CP15480E03