Kemal Dervis: First Regular Session of the Executive Board

19 Jan 2009

Mr. President,
Members of the Executive Board,
Dear Colleagues and Friends,

I would like to begin by congratulating His Excellency Mr. Mohammad Khazaee, Permanent Representative of the Islamic Republic of Iran to the United Nations on his election as President of the UNDP/UNFPA Executive Board. I worked with Ambassador Khazaee when he was at the Executive Board of the World Bank and we had common work and friendships.   I also congratulate the following on their election as Vice-Presidents for their respective groups: For the group of Western Europe and other States, Mr. Jeroen Steeghs (the Netherlands); for the Eastern European group, Mr. Dragan Mićić (Serbia); for the group of African States, Mr. Omary Mjenga (United Republic of Tanzania); and for the group of Latin America and Caribbean states, Mr. William Exantus (Haiti).

Let me also take this opportunity to warmly thank the outgoing President of the Executive Board, His Excellency Mr. Jean-Marie Ehouzou, who as you know is now the Foreign Minister of Benin since October 2008.Many thanks also to all the outgoing Vice Presidents for all their hard work over the last year.

Time passes tremendously quickly. The older one gets, the faster it passes. I think that it was almost four years ago, in June of 2005, having been confirmed by the General Assembly, I  first adressed an informal session of the Board of UNDP. I would like to say at the very beginning today how grateful I am for your support to UNDP since 2005. There were some difficult times, but a sense of common commitment to the goals of the institution, to the mandate, and to the values enshrined in the United Nations Charter always prevailed. This Board does represent the 192 nations of the international community. There are of course differences of view between these nations, reflecting different histories, different national circumstances and, of course, one has to say also at times different short term interests. But in the long run it is so absolutely clear that there are common human interests: the preservation of peace and protection from violence; respect for human rights, including women’s rights and the rights of children; respect for the rule of law, including international law; development—our mandate— and the eradication of poverty; the preservation of our environment and climate, and the other global goals which the United Nations stands for. UNDP has done, and will continue to do, its part to further these goals, with your active support. That support and willingness to find common ground makes such a huge difference. You showed it when we finalized the Strategic Plan last summer. You showed it again when you approved the Accountability Framework last September. And these are just some examples. I do hope that in the future, too, the will to find common ground will always prevail and allow us to move forward.

Fındıng Common Ground

I have been an economist all my life. I studied economics starting at age 17. Economists try to maximise efficiency, manage resources, increase the rate of growth. But one realises as an economist how all-important it is to find common ground when there is  a failure to do so.

Nothing is more costly than violence or war. I had periods of my life when I experienced andsaw this with great distress. For example, the wars in the Balkans. I was at the World Bank at the time. We had tried to build roads, hospitals, to promote development - and then a failure to find common  ground destroyed so much of what had been bulit. I am the last person to minimise the importance of economics or economic policy,  but I think the first most important thing for human welfare, for progress is the ability to find common ground. And that is what is hugely  important  at the united Nations and that is what is hugely important for UNDP.

The World Economy

It has become somewhat traditional at these meetings that I spend a few minutes at the very beginning looking at the world economy, because in today’s world the development of all countries takes place in the context of the world economy. Let me share my perspectives on how the world economy is evolving. Throughout the last year already together we expressed our concern. Unfortunately, that concern was justified. We are going through what probably is going to be the most serious world-wide recession since the Great Depression of the 1930s. Certainly there was no period in the last few decades that resembles what we are going through today. And that clearly affects development. It affects developing countries. It affects everybody. And it affects the work UNDP has to do.

What is happening can be explained as follows: There has been a tremendous drop in asset prices—the price of houses, the price of equity, the prices of all kinds of assets people own. Asset ownership has become of course much more wide-spread in the world. That fall in prices, particularly in the rich countries, leads people to cut back on their expenditures. They feel poorer or less rich. The rich feel less rich and the poor feel poorer than two years ago. Even the ones who do not have assets are worried about their jobs, about their incomes, about their pensions. So there is great retrenchment throughout the world economy. At the same time, we all see that there has been a complete disorganization of credit markets and financial systems, and therefore a cutback of financial resources that are available to businesses. So businesses cut back their investments both because demand is falling and at the same time credit access has become much more difficult. These two forces—the disorganization of the credit markets and the fall and cutbacks in demand—are now leading the economies of  the rich countries to an actual contraction of GDP, most likely  beyond one percent of GDP on average  in 2009. And worldwide the contraction is affecting all countries. It is still true that some emerging market economies are doing reasonably well. In China, India and Asia more generally there will be continued growth This is also true for some Latin American and  some African countries, but growth will be much less rapid than it was over the last few years and probably not rapid enough to allow the world economy as a whole to grow.

There are of course responses that are underway in terms of monetary policy, in terms of fiscal policy, in terms of international cooperation. I think what seems very clear given the drop in the demand by the private sector, both investment demand and consumption demand-, is that the government sector-, public spending- has to pick up the slack in private demand.  Compensating demand has to come from the public sector. How much, and in what exact form, is debatable. Of course, people are debating it. But the fact is that the private demand contraction in many economies reaches 4, 5, 6 percentage points. There has to be a countervailing, compensating demand coming from the public sector. The big challenge is how to organize this so that the compensating demand from the public sector, the expenditures from the public sector do not create longer-term problems of fiscal sustainability but rather create the best possible outcomes, including rapid job creation and hopefully, as the Secretary-General has emphasized in quite a few of his speeches, also promoting desirable changes in the energy sector towards a greener and more energy efficient economy.

But it is a huge, huge crisis. And it is going to be affecting all of us. It underlines the importance of avoiding such huge policy mistakes. When we think back, it seems that some of the mistakes made were rather obvious. And yet I think many institutions failed to see that. Let me give you one example: the rating agencies. We often discussed accountability in this Board. Now the rating agencies were paid by the financial institutions that they were rating! If that is not conflict of interest, then what is a conflict of interest? Clearly there was a complete failure. Securities were rated AAA when they were nowhere near AAA. And so many critical decisions were made in the financial sector triggering even greater mistakes until the whole edifice crumbled. I am stressing this to underline how important policy analysis is and how important it will be to avoid similar huge policy mistakes in the future.

Let me also take this opportunity to congratulate some of my UN colleagues who worked on the macroeconomic forecasts in 2006 and 2007. -not in UNDP, because we are not in the business of macroeconomic forecast as such. We do participate in some of these exercises, but it is really the colleagues from UN-DESA who do that work. When we look at their projections and their analyses of the world economy over the last two or three years and compare them to many other projections, the UN projections were more accurate in focusing on the real problems than the projections of many institutions that have many more resources to do these projections. It shows us  that despite resource constraints and weaknesses that we do have in the United Nations, we do have very good analysts and perhaps their objectivity and their global approach, the fact that they are not influenced unduly by one part of the world economy or by one sector, allows them  to come up with good analysis which sometimes is better, more accurate than the analyses of institutions that have more resources, but perhaps are not as objective as sometimes the UN thankfully can be.

Looking at our work, UNDP’s own work, I would like to stress that it is of course first of all country-focused work, country-oriented work. UNDP’s mandate is working at the country-level. And I am going to say a few words on that. But at the same time obviously the events we face these days show us that we cannot analyze the country level on its own. The country level is embedded in the world economy and we have to take that into account when we look ahead to the United Nations system and development. I will come back to that as well.

Delivering as One: making the UN more coherent, effective and efficient

I would like to say a few words on the country-level. Over the last two years, “Delivering as One” demonstrated the potential of a more coherent UN system at the country level. We all I think prefer the phrase “Delivering as One” rather than “One UN.” It is not “One UN” but “Delivering as One” at the country-level has been our common objective.  The pilot mechanisms of truly joining forces on One Programme, on the Budgetary Framework, on Joint Resource Mobilization, on Joint Communications, on Business Practices, and on the Leadership role of the Resident Coordinator, have provided our member countries with a comprehensive view of the scope of assistance available to them by the UN system, enabling them to take the lead in identifying priorities for UN support. The mechanisms help “decrease fragmentation, duplication and competition for resources within the UN system”, a mandate from the TCPR. “National Ownership” of the process and not a “one-size-fits-all” approach have been the guiding principles for “Delivering as One”, and remain so.

I am not going to go into the details but there are initial evaluations and feedback both from the country teams themselves and from the host governments, the programme countries, that show that at the pilot level really a lot of progress has been made. Together with the TCPRs of 2001, 2004 and 2007, the Resolution on System-wide Coherence adopted by the General Assembly this past September including the Co-Chairs very constructive and insightful conclusions and recommendations provides for a renewed support for reforms of the UN system at the operational level. The pilot phase concludes in 2010 when the assessments of the pilot experience will have been completed and reported to the UN system Chief Executives Board. There are currently no plans to have additional pilots but there are plans under way to mainstream some of the constructive and positive lessons from the pilots across the globe within the mandates and within the guidelines of the TCPRs.

It is an excellent development, for example, that a number of self-selecting UNDAF roll out countries of 2007 and 2008 including Malawi, Papua New Guinea, Botswana, the Pacific Island Countries, Suriname and Zambia initiated the process following much of the experiences of the pilot countries in developing a common Country Programme. More countries are reported in the Co-Chairs Report to be adopting more coherent practices. The UNDG is strengthening existing mechanisms to assist countries that are undertaking efforts on their own to make the UN more coherent, effective and efficient - efforts reflecting full government leadership.

Now the process is slow. It is a gradual and continuous process at the country level but it is slow. I do believe that it deserves your continuous support. It remains very much country-driven and it is adjusted to particular circumstances of different countries. I think we have tried to find, and we found, a right balance between two extremes which are not desirable. One extreme is to have the UN agencies, and funds and programmes continue to work as in the past, as 10 years ago, very much in isolation, with some cooperation, but basically as separate organizations. I think the overhead costs of that, the inefficiencies, the duplications, the inability for the countries to have a counterpart UN system that acts as a whole, is very costly and weakened the UN at the country-level. So that is why the whole coherence agenda has been launched and why you have supported it. At the same time I think there is also another extreme, which would be to somehow try to merge all these agencies, funds and programmes in the UN system into one organization. They are not one organization. The World Health Organization (WHO), for example, has its own Board and financing mechanisms. It has a constituency with the health ministries. We cannot merge the WHO and UNDP for example. We cannot even merge the funds and programmes. UNICEF has its own mandate, its own support, its own financing mechanisms, and its own brand— a very useful, valuable brand. So does UNFPA and WFP. And I think it would be a mistake to try to have a vision of merging all these into one organization. It is impossible.  It would imply a complete reorganization of the United Nations system as a whole. And I think one has to see that and not push in a direction which is impossible to achieve, and probably not desirable to achieve.

So we have to find a middle ground here of a system that is more cohesive, of organizations that work together, and of a Resident Coordinator who truly chairs the system; she or he is the leader at the country level but each organization retains its mandate, its specificity, its brand and also the experience and skills that it has accumulated. And that is what the “Delivering as One” is trying to achieve with flexible forms of cooperation built around the country programme so that the countries have an overview of all the assets and skills that exist in the UN system, but also so that each organization can continue to work with its own responsibility, its own accountability and its own capacity to deliver upon its mandate. This is how I think we have proceeded over the last four years. That is the way I see it. The balance can be debated. But I do sincerely want to share with you that today we should avoid the extreme visions which I think are not realistic, not useful and not desirable.

Global Interdependence

Now moving from the country level to global interdependence and global coherence, this crisis has again demonstrated to all of us how interdependent the world economy is. There is no way to have a development policy, particularly in small developing countries that would not be affected by the regional and global factors. Even the biggest economies in the world are tremendously affected by what is going on in the world market as a whole. Many developing countries are still very dependent on commodities. How can you have a national strategy towards commodities if it does not fit into a global strategy for developing countries that are commodity exporters? How can they have an agricultural strategy that does not take into account world market and world price developments? So it is very important that these country strategies on which we work together and where UNDP plays the role of capacity building, networking, support to national policy makers, benefit from the overall world context, from the policy experiences gained across the world, including from the South-South Cooperation mechanisms to development. And the networking takes place in the most effective way bringing these experiences and this knowledge to bear to individual country experiences.

The Human Development Reports of UNDP, I think, do make a very important contribution in this context. And I want to stress that I am not talking just of the global Human Development Report but also of the regional and national Human Development Reports, all the knowledge, all the experiences of the human development network that is available. I do want to go beyond UNDP, and indeed beyond the funds and programmes and specialized agencies here and also mention that the work, the policy and the knowledge of UN-DESA, UNCTAD, and the Regional Commissions should play a very important role. The same is true for the specialized agencies, such as the ILO in terms of the labour market. As you know, we have a very strong cooperation with ILO on decent work and fight against poverty.

So I think we probably need to do quite a bit more linking of the knowledge networks and the normative work of the United Nations family to the country level work. It is not productive to have all that knowledge and not link it up with the country level work. That link has to be there.

And here I believe we have not made enough progress. We have to focus on the country level and we have made progress but there is insufficient linking the country level to global issues. The global analyses benefit from the knowledge, the experience on the ground in the countries; I think on that, we do really need to do much more. In that context we have to do more with the Bretton Woods Institutions—the World Bank and the IMF. The segments we have as part of ECOSOC I think are important, but they need to be deepened, they need to be improved and the organizational issues here need to be addressed. I do not believe in that context, by the way, that we necessarily lack resources. When you think all the resources that are available in the Regional Commissions, at UN-DESA, at the ILO, in UNDP, in UNFPA, in UNICEF, WFP and others- I don’t want to mention them all, but particularly the ones I mention in terms of policy- these are quite significant resources. We have not, however, found the way to deploy them in a way that our member countries across the world get the maximum benefit. And here there are constraints, including organizational constraints, I think that need to be overcome.

Three years ago, under the leadership of the Prime Ministers of Mozambique, Norway and Pakistan, the High-Level Panel on Coherence was convened and these issues were addressed. But there was not much discussion in the General Assembly, in the various boards on the more headquarters related global issues. Discussion was focused almost entirely on the country level, which was a priority and I  accept that. But some of the thoughts and some of the recommendations that have to do with the global policy level I think should also have been addressed. I would say that the recent crisis proved that the challenges we face in the next years, the issues of energy, energy pricing, volatility, food issues, the world trade system, and the whole slow-down in the world economy, require the UN to pull together its policy resources from the various partners, and work together more effectively.

The Security Challenge

Allow me to touch very briefly on some of the other issues we are facing. The security challenge is of course one of the most dramatic problems. The UN, UNDP and other UN agencies have been targeted and have lost colleagues. In October 2008 the local head of the Mogadishu UNDP office in Somalia was deliberately targeted by an assassin. As we speak, a UNDP staff member has been missing in Niger for more than a month. And recent events in Gaza have seen UNDP and UN staff placed in unprecedented danger in carrying out their civilian humanitarian and development duties .

What is UNDP to do in a world like this to ensure it is able to continue to carry out its important mission? We have accelerated efforts to upgrade and reinforce UNDP premises in a number of most vulnerable locations and even to relocate where necessary, but this takes time and money and better premises are not always readily available. We are experiencing greatly increased costs for rent each time we relocate an office, and expect this pattern to continue. This, of course, raises the question of the cost of doing business in areas where security costs are so high; we may need to explore other means of operating.

At the last meeting of the Chief Executives Board in October 2008, the Heads of Agencies endorsed the concept of ‘no programme without security’ which means that security costs must be mainstreamed or covered up-front before a programme is initiated. Of course, and here again, perfection is impossible to achieve; there is no such thing as 100 per cent security. But we do owe it to our staff to support them in the best possible way. And as you know, unfortunately, that support does cost resources.

There will be a progress report on these items in June but I would like to signal now that security needs are growing at an increasing rate and we have no option but to meet them to enable our staff to conduct our projects and programmes without becoming victims themselves.

The CEB directed the High Level Committee on Management (HLCM) to continue to develop a comprehensive plan for an improved system-wide security management system for consideration at the spring session of the CEB in 2009 and that, until then, any immediate needs would be funded within the existing frameworks. By June we will know the outcome of that effort which we will share with you then.

Resource Mobilization and Resource Management

As you know, a detailed report on the funding situation of the organization will be with you for the annual session of this Board in June, in line with the normal reporting calendar. However, given the backdrop of the current financial and economic crisis a brief update on contributions received in 2008 is needed even if all figures have to remain provisional at this early time in the year.

I am pleased to report to you that regular core resource contributions to UNDP in 2008 have reached close to US$ 1.1 billion, thus meeting the annual contributions target set out in the Strategic Plan. This is an increase from a level of $921 million four years ago when I took on my responsibilities.  Exchange rate fluctuations should not be forgotten when considering these figures. As you know the dollar depreciated considerably in the 2005-2007 period – and then appreciated again in the latter half of 2008. But even when expressed in constant exchange rates, core resources increased significantly over the period, including in 2008.  And I do want to thank you all for this, and for your efforts.

Almost all contributing member states fulfilled their commitments for the year, and I am deeply grateful to those donors. Some have increased these commitments quite considerably. Some have also increased commitments to flexible non-core resources. We all know that core is extremely important, but flexible non-core resources for conflict prevention, or for the MDGs, that have been provided by some countries are also very important. There is also greater flexibility at the country level, as some countries are beginning to directly support the country programme budget in a flexible way at the country level as part of the Delivering as One mechanisms.

I am fully aware that in the prevailing global economic situation, ODA and voluntary contributions to multilateral organizations may be especially vulnerable. Extra efforts will be needed to make the case for the necessary support that UNDP and other UN development organizations will need to continue our work in achieving the MDGs.  I would like to stress that, as we all agreed in Doha, the continued investment and honouring of past ODA commitments is a very important action the international community needs to take to avoid a consequence which will hit the poor in the poorest countries the hardest at a time when their needs have increased and they are suffering because of the policy mistakes which others have made. We are in a world economy where -- actually everywhere, in every country – as always, the poorest and most vulnerable are suffering the most from mistakes which they had absolutely nothing to do with. It is, therefore, ethically, morally, but also politically important that at this time that support for the most vulnerable is not cut.

Accountability and Transparency

As the Board is aware from our discussions in September, UNDP recognizes that we have the full responsibility to be as accountable and as transparent as possible. At the last Board session, the Executive Board approved a renewed framework for greater transparency and accountability.

In terms of information provided, since the summer of 2007 we have worked extremely hard with our country offices to make sure their websites offer comprehensive and transparent information on UNDP programmes, finance, procurement, human resources and legal documentation. This transparency-related information is crucial. It helps our partners – donors, civil society, governments – to understand better how the organization works, how it is funded and where it spends its money. We want to have a situation where everybody can see what is happening: what is happening to the resources, how fast the projects are being implemented, what the problems are, and why these problems exist.

Our efforts are still in progress but the achievements so far are quite significant. Today we find on UNDP Country Office sites a greater wealth of information than before and a degree of openness that meets modern standards of accountability. As of 16 January 2009, 90 per cent of our Country Offices have improved substantially in posting transparency-related information. For the first time corporate standards have been formulated for mandatory compliance by all Country Offices, and they are putting in this work. This requires considerable work from our Country Offices. We expect to complete this major change in the “face” of our organization in the months ahead.         

Audits and audit reports were one of the key topics for the last session of the Executive Board so I will not go into too much detail again here. I do, however, want to highlight that our external auditors, the United Nations Board of Auditors (UNBoA) issued an unqualified audit report for UNDP for the biennium ending on 31 December 2007.  UNDP was one of seven UN agencies (out of 16 UN agencies audited by UNBoA) to receive an unqualified audit report.   This is a reflection of a tremendous amount of hard work by the organization as a whole, but also of the increased awareness of accountability and internal controls. And I do want to also thank the Board for helping us in this, encouraging us further, and setting higher standards.

With regard to internal audits, since January 2007 we have been implementing a policy where members of this Board, and other Member States, can also have access to our internal audit information, containing greater detail than what is available in the external audits. We all recognize that in today's world, access to information, and access to figures is extremely important. Transparency is one of the best ways to improve the efficiency of any organization, private or public.

And as we move forward, there should be due diligence in ensuring that this is balanced with a recognition of the nature of multilateral organizations and with the valid concerns that information that is not finalized, or that could be misinterpreted, is not misused.

UNDP’s activities worldwide

I do have a few examples of UNDP’s activities worldwide that reflect the diversity of what we do. And that diversity, of course, sometimes brings with it risks; one does have to take some risks otherwise you don’t achieve much, but getting the balance right between these risks and the controls is very important.

I do believe we have achieved quite a few successes, but let me share with you very quickly some highlights.

In terms of elections support, Bangladesh was one story that was particularly important. Due to insufficient quality in voter registration it had been difficult to organize a truly transparent election in Bangladesh.  UNDP joined the Government, under the Government’s leadership, to get this voter registration organized. 80 million Bangladeshis, including millions of women and first time voters, went to the polls on 29 December 2008 to elect a new democratic government. With a record turnout of 87 per cent of registered voters, the election was rightly hailed as the country's most credible and transparent, and one of the most non-violent elections in its history.  This success marked a historic moment not just for that country, but for all of South Asia.  Elsewhere in the region too, for example in Nepal, Bhutan, the Maldives and other countries, UNDP has been able to support the democratic process, responding to national demands. And in Africa, there have also been quite a few examples of this electoral support.

In the Asia and Pacific region, UNDP has played a key role in recovery efforts four years after the Indian Ocean tsunami. Over the past four years, UNDP, together with other partners, has contributed to the tsunami recovery efforts through housing reconstruction, waste disposal and management, temporary employment for 54,000 people, and livelihood support to almost 100,000 households in reviving fisheries, agriculture, small business and trade activities in the affected areas. 

50 percent of all UNDP core programme spending, as you know, goes to Africa.  UNDP is on the ground in every African country working to support many efforts.  Let me stress here the very important effort UNDP was able to contribute to in Kenya after the violence that erupted after the general elections in December 2007. That crisis revealed serious weaknesses in the institutional, structural, legal and regulatory framework of the country, as well as associated fundamental development issues such as inequality, marginalization, and lack of human and institutional capacity. In the immediate aftermath of the electoral violence, UNDP, together with DPA and the UN system on the ground supported the mediation efforts of the AU-mandated Panel of Eminent African Personalities in their efforts to bring a resolution to the crisis. The Bureau for Crisis Prevention and Recovery worked quickly with the Regional Bureau for Africa to support both humanitarian coordination and the early recovery framework. It was a bad crisis but I think action on the part of the Kenyan people themselves, together with the international community, helped to avert a worse crisis.

In the Latin American and Caribbean region, we are undertaking a particularly interesting approach to human development. Many countries have adopted the human development approach in their policies, both at the national and local level.  In the last two years, thirteen National and Local Human Development Reports have been published on issues such as the role of the State, rural and local development, employment, the economy, migration, equity and public policy. A Virtual School on human development has been established, and over 200 practioners and strategic actors have been trained in how to apply the concept in public policy design and implementation. A Latin-American Journal on this has also been issued every month, and a vigorous and active UNDP Network on human development has been consolidated.

Since the Latin America and Caribbean region has been experiencing an increase in the occurrence of extreme events – natural disasters – with severe human and economic impacts, the regional programme is mobilizing resources to enhance capacities for adaptation and mitigation to climate change, as well as for natural disaster prevention and mitigation. UNDP has led numerous initiatives in disaster risk reduction, emergency response and early recovery.  Our activities in Haiti and Costa Rica are two examples.

In the Arab states region, UNDP is working to help the population in Gaza overcome the enormous socio-economic crisis they are facing as a result of the violence of the last few weeks that has resulted in the loss of many innocent civilians and significantly destroyed civilian infrastructure.   An immense recovery operation now lies ahead. UNDP is engaged with its local counterparts, UN agencies, the World Bank and other partners to work for quick and effective early recovery operations in Gaza. In order to ensure proper coordination of the key actors— which is always so important in these efforts—an Early Recovery Cluster has been initiated by the United Nations Resident and Humanitarian Coordinator. Led and facilitated by UNDP, the cluster brings together UNRWA, the World Bank, and other relevant UN entities to ensure better and well coordinated support to the Palestinian people in providing the necessary assistance that they need.

More broadly in the region, UNDP has been supporting  this week’s League of Arab States first ever Economic, Development and Social Summit which is taking place against the background of continuing conflict and the very serious crisis in the world economy. UNDP was the principal policy adviser and provided technical assistance in preparing for the Summit, notably through a regional paper of two volumes.  The first volume is a Regional report on “Development Challenges in Arab Countries: Growth, Globalization, Employment and Poverty.” We look forward to the work of the Summit.

In Europe and the Commonwealth of Independent States, UNDP provided a prompt and targeted response in Georgia to meet the priority early recovery needs in areas affected by the conflict of August 2008. The “Fostering Sustainable Transition and Early Recovery” project allowed farmers to sow winter wheat, and launched the first small infrastructure projects designed to employ IDPs and vulnerable populations. The project also saw the start of training of trainers for short vocational courses, enhancing employment opportunities for the local population.

In Uzbekistan in 2008, UNDP signed the first Emission Reduction Purchase Agreement between the MDG Carbon Facility and the country’s gas operator that will help reduce around 3 million tons of CO2 equivalent. I think this is a very good example of how we are trying to assist countries that do not have easy access to carbon financing.

            And on the policy side, UNDP has been involved, of course, in the follow-up to the Paris Declaration. We worked very hard with our partners for a good outcome at the Accra High-level Forum on Aid Effectiveness and at the Doha Financing for Development Conference, both last year. The Bureau for Development Policy (BDP) has also contributed a lot on food policy issues and to the task force that the Secretary-General has convened on the increasing food prices and food security diagnostic issues and policy options. In this context, of course, we now face a different situation. We face a situation of collapsing commodity prices rather than the sky-rocketing commodity prices we saw last summer. But the point I want to stress here is that volatility in itself is a huge problem. Prices that move as erratically as they have moved are not good either for the producers or consumers. So dealing with volatility in itself is a big development challenge. And I want to stress again that many countries remain dependent on commodities, as exporters of commodities and build their budgets on that in a major way. And then many others are big importers. For all of them, this excessive volatility creates huge policy problems. BDP is working on addressing this.

I just wanted to give you some examples of what is happening on the ground: A lot of frontline activities, a lot of projects, and a lot of programmes and support of national priorities. We are trying to move increasingly towards a very programmatic approach and not isolated projects. One of the things that we count on the most to do this, which is very necessary from an efficiency point of view, is the multi-year financing commitments that some of you have come forward with. The more we can plan in a multi-year framework, the more effective our programmes will be, and the more possible it will be to implement programmes with countries in a medium to long-term framework. When our financing is extremely short-term, it is very difficult to plan our long term partnerships.

I want to come back again to the policy side. While UNDP is an organization focused on what is going on at the country level, I do believe that the policy content of what we do is crucially important. And working on this policy content, we do have to work with other parts of the UN system that have a primarily policy-orientated mandate. The Bureau for Development Policy, with its headquarters staff and its regional hubs, provide the infrastructure of that policy work, but I think it has to do this work in very close cooperation with the UN system, particularly also with the regional commissions. Here, I must say that the Latin American and Caribbean region provide perhaps the best example of a very productive regional cooperation.  This cooperation in the Africa region is also beginning to yield good results, and we have to do the same in the other regions.

Concluding Words

Let me now conclude because I’m very eager to listen to your comments and I don’t want to take more time, although this speech is my last opportunity before you – at least formally – and I have many things to share.

We are undoubtedly at an incredibly critical time for development and for the world economy. We face an array of challenges, not least the current economic and financial crisis that threatens development efforts worldwide.

However, it has been observed by many- and I’m not the only one  that the Chinese mandarin word for “crisis” – WEI JI – is composed of two characters. One signifies “danger”; the other, “opportunity.” Looking at history, we see that with crisis also comes opportunity. There is no doubt at all that very fundamental changes in the world, and many improvements and reforms have come after a crisis. I wish — we all wish—that this was not the way that human history worked. It would be good to be able to move with the reforms and improvements without needing the push of the crisis. But crisis creates urgency, and urgency generates the momentum needed for reform.

While we face this deep economic crisis we have to remember that thankfully we have not gone through some terrible global conflict. There is conflict at the local level, that’s  terrible enough, but we haven’t had a global war. We have not had a great epidemic either. So the capacity of people is there; productive capacity is there; the infrastructure is there – it needs to be improved, but it’s still there. This crisis is an economic and financial crisis and one should be able to use the existing skills and existing technologies to quickly overcome it. We have to remember that this is not some meteor that has hit the world from outside, but this is a self-made crisis that can hopefully be overcome with the appropriate policies. So I want to repeat: the crisis has created urgency, but I hope that the urgency will generate the momentum needed for reform.

Now, given the timing of my speech today – on Martin Luther King’s Holiday in the United States – and the momentous event that is going to take place in Washington DC tomorrow, where an African-American is going to become President of the United States, I trust you will allow me to congratulate the people of the United States and wish them well on behalf of all of us. This is, indeed, a momentous event which not so long ago would not have been easy to envisage. It shows that barriers can be overcome. People can be brought together.  Tomorrow is definitely going to be one of those historic days when old barriers are broken and new horizons appear with full force.

Let me end my presentation to you today stressing the two things I started with. The need to find and to build common ground and the crucial role the UN family has in doing that. There are differences. There are conflicts. There are many things that hold us apart. But I do believe that beyond these separations, the fact that we work in the same corridors and the same rooms, get to know each other beyond our backgrounds, nationalities and religions, and that we actually become friends as we work together, has such tremendous value. It’s something that I certainly have valued in my international career-  the friendships I could forge, the experiences I could share with people from all over the world. And the second point I want again to stress is the need for good, incisive analysis of the problems we face and their possible solutions.

Without proper diagnostics and feasible designs for action, there can be no effective cure.

I can promise you that I will continue to be active in both domains: the domain of trying to bring people together from across the world, no matter where they come from, and in my efforts, to the best of my ability, to analyze problems and to try to find ways to overcome them.

Finally, let me again thank my colleagues across the world for what they have done and will continue to do with your support and also of course, the women and men in the field and at headquarters, the management team here, Ad Melkert, the Associate Administrator, and the bureau chiefs. I think it is a great team, we work together extremely well and it’s also a team of friends. I’m deeply indebted to them and to all the women and men of UNDP. It has been a true privilege working with them.

At UNDP we have a saying: “once UNDP, always UNDP.” It’s true. People leave, do other things, retire; but the spirit of UNDP remains. I’ve seen that in many of my colleagues and I wholeheartedly subscribe to that.

Thank you for allowing me to share these thoughts with you today.