Distr.
GENERAL

DP/2000/1

1 October 1999

ORIGINAL: ENGLISH

First regular session 2000
24-28 January 2000
Item 1 of the provisional agenda

REPORT ON THE THIRD REGULAR SESSION

NEW YORK, 13-17 SEPTEMBER 1999

CONTENTS

DECISIONS ADOPTED

I. ORGANIZATIONAL MATTERS

1. The Vice President, H. E. Mr. John Ashe (Antigua and Barbuda), opened the meeting, noting that the President, H. E. Mr. Asda Jayanama (Thailand), had expressed regrets for his absence, which was due to his participation in a meeting in Bangkok.

3. The Executive Director of UNFPA welcomed the new Administrator and wished him every success in his important and challenging job. She noted that for many years UNFPA had a close and fruitful working relationship with him, for example, in the integrated and coordinated follow-up to United Nations global conferences, in the course of which both she and he had each chaired an inter-agency task force within the Administrative Committee on Coordination.

4. Reaffirming the close cooperation that existed between UNFPA and UNDP, the Executive Director observed that the two organizations had worked hand in hand, not only in the Executive Board sessions, but also in a number of areas of mutual interest. Population and development were two areas which complemented each other and, undoubtedly, in the new millennium, those two areas would continue to require the collective cooperation of both organizations in meeting the challenges that lay ahead. She underscored that as a member of the Executive Committee of the United Nations Development Group (UNDG), together with the other organizations in UNDG, UNFPA looked forward to working with the Administrator, in continuing the excellent work already begun by his predecessor.

5. The Executive Director applauded the Administrator for the immediate steps he had taken to speak up eloquently and strongly for the cause of development, multilateralism and the United Nations, and especially the need for resources. She concluded by stating that UNFPA looked forward to excellent collaboration with the Administrator and his team in the months and years to come.

6. The Secretary of the Executive Board elaborated on the elements contained in document DP/1999/L.4, the provisional agenda, annotations, list of documents and work plan for the session. She noted that the following documents had been issued in addition to those listed in DP/1999/L.4: DP/1999/29/Corr.1, amending Executive Board decision 99/11; DP/1999/CRP.12, on the strategic results framework; DP/1999/42, on the United Nations Revolving Fund for Natural Resources Exploration (UNRFNRE); and DP/1999/CRP.13, on the responsibility of the United Nations Office for Project Services in personnel matters. She noted that DP/1999/CRP.10, on the special audits of UNDP information systems and change management expenditures, would not be issued, as the report of the Advisory Committee on Administrative and Budgetary Questions (ACABQ) contained in document DP/1999/33 included the relevant information on those audits. She noted that some documentation had become available in the other language versions only that morning. The delay was due to the very high workload of Conference Services during the summer months while documentation for the General Assembly session was being prepared.

7. The Secretary noted that an informal meeting of the Executive Board would be held on the afternoon of 14 September, owing to the opening of the General Assembly on that afternoon. The Administrator would also meet with the Board informally on that afternoon with his Transition Team. Other informal meetings included briefings on the twentieth anniversary of UNDP/China cooperation, the Semipalatinsk programme in Kazakhstan, and the evaluation report on the United Nations Capital Development Fund by the team leader.

8. The Executive Board approved the agenda and work plan for its third regular session 1999 (DP/1999/L.4), as orally amended.

9. The Executive Board approved the report on the second regular session 1999 (DP/1999/13).

10. Approval of the report on the annual session (DP/1998/28) was postponed to the first regular session 2000, pending its issuance in the other language versions.

11. The Executive Board agreed to the following schedule of sessions of the Executive Board in 2000, subject to the approval of the Committee on Conferences:

12. The Executive Board agreed to the preliminary list of items to be discussed at its first regular session 2000, as contained in the annex to decision 99/25.

13. The Executive Board agreed to the list of items for 2000 (DP/1999/CRP.11) to be included in the draft work plan for 2000.

14. The Secretary of the Board noted that under item 4, on financial, budgetary and administrative matters at the first regular session 2000, the Board would be invited to take up the revised UNDP financial regulations and rules. An explanatory note and two annexes, including the draft revised financial regulations and rules, had been distributed at the current session. The note would be the basis of the official document to be issued for consideration at the first regular session 2000. Distribution of the draft revised financial regulations and rules at the current session would allow the Board to engage in informal consultations on the matter if needed.

15. The Administrator introduced the item. He underlined the need to put back in place the foundations of trust between programme countries and donors, between Governments and management and between management and staff, elements that would be required if UNDP was to be rebuilt. He gave an overview of the financial situation, in which core resources had been declining steadily for some five years, with contributions for 1999 at about $718 million, down from about $1.2 billion in 1992. A zero-growth biennial support budget was being submitted to the Board, incorporating a further reduction of $27.1 million as compared with the previous budget. The continuing decline in donor contributions meant that UNDP country offices had been instructed to cut their TRAC (target for resource assignment from the core) funds by 20 per cent for the year 2000. He noted that the programme had been slipping since 1996 when resources initially covering three years had been stretched to include a fourth year. The multi-year funding framework (MYFF) had not provided the more stable and predictable payment of contributions that had been promised. All those factors meant a good deal less for actual poverty work.

16. As he had noted, the drop in donor contributions to UNDP would mean that actual income projections were down to $718 million in 1999. Budget cuts, he emphasized, had undermined UNDP because, although healthy reform had taken place, the organization had been hollowed out, without recruitment, training or investment in staff. A strong UNDP needed a high level of political commitment in both donor and programme countries alike, to development, the role of the United Nations in development cooperation and UNDP itself.

18. In addition, the Administrator underlined the importance of the MYFF and the strategic results frameworks (SRFs) as management tools. He also cited the damage that had been done owing to many budget cuts and emphasized that there must be a broad political re-commitment to the organization. In that regard, UNDP needed to reach out to heads of Government and to the public to build political support for development cooperation. He cited the support for UNDP he had witnessed during recent trips to Japan and China, and at the Summit of the Organization of African Unity held in Algiers, as well as in Washington among members of Congress. NETAID was an important new initiative aimed at building a global constituency of development activists that included partnership between UNDP, international and non-governmental organizations (NGOs), the corporate sector through Cisco Systems, and the entertainment community.

21. The Board had before it the following documents submitted by UNDP under item 2: multi-year funding framework, 2000-2003: report of the Administrator (DP/1999/30) and the strategic results framework (DP/1999/CRP.12); budget estimates for the biennium 2000-2001: report of the Administrator (DP/1999/31); report of the Advisory Committee on Administrative and Budgetary Questions on the UNDP budget estimates for the biennium 2000-2001 (DP/1999/33); annual review of the financial situation 1998 as well as detailed statistical information (DP/1999/32 and Add.1); annual statistical report 1998, including procurement of goods and services (DP/1999/34); information on United Nations system technical cooperation expenditure 1998 and explanatory notes (DP/1999/35 and Add.1) and United Nations Revolving Fund for Natural Resources Exploration: report of the Administrator (DP/1999/42).

22. Delegations thanked the Administrator for his opening statement and UNDP for the documentation submitted.

23. Many delegations welcomed and expressed their support for the report on the multi-year funding framework (MYFF) for 2000-2003 (DP/1999/30) and the strategic results frameworks (SRFs) (DP/1999/CRP.12). Many speakers congratulated UNDP on the work accomplished on the MYFF and SRFs within a short time-frame and underlined the positive collaboration between headquarters and the country offices. Several speakers described UNDP as part of the vanguard of reform. The process of informal consultations with the Executive Board was praised.

24. Many speakers noted that the MYFF, with its introduction of results-based management, would be an excellent mechanism for organizational change, including through more targeted and focused development interventions. In that regard, it was essential that UNDP work in areas where it had a comparative advantage. UNDP was clearly emerging as a catalyst and facilitator in the field of development cooperation. Some delegations noted that the work of UNDP would dovetail with that of the World Bank, NGOs and private foundations in programme countries. In particular, work with the World Bank was welcomed in the areas of globalization, investments, and long-term development strategies. The SRFs were seen as building blocks that provided an opportunity for programme countries.

25. One delegation underlined the key role of UNDP in countries with economies in transition and hoped that the role of the organization would not be undermined by the continued decline in its financial situation. UNDP had a role to play not only in market development, but also in the creation of legal structures and regulatory frameworks as well as building a positive environment for sustainable human development.

28. On specific elements of the framework, one delegation suggested that there be further articulation of the areas of good governance and coordination of United Nations development efforts. Some delegations stated that a better analysis of the approach to and the role of partnerships was needed, in particular to capture the impact of interventions in areas such as advocacy and capacity-building. The coordination role of UNDP must also be made more effective and output-driven.

29. Many speakers said that meaningful indicators needed to be established so that the contributions of UNDP could be effectively measured. Some delegations emphasized that the use of indicators should be conducted closely with

country-level partners, given the lack of agreed standards for indicators. Internationally agreed standards, such as those adopted at global conferences, could be utilized. Some speakers suggested that a more detailed dialogue on indicators was needed.

31. Several delegations underlined that UNDP must achieve the annual funding target of $1.1 billion in core resources as agreed in Executive Board decision 98/23. UNDP could clearly not deliver to programme countries if it was not supported with adequate funding. The fact that resources were going downward while demands on UNDP were increasing was of particular concern. The 20 per cent reduction in the TRAC allocation was very troubling. One speaker stated that the Administrator should work with the Secretary-General to mobilize international public opinion, NGOs and civil society to reverse the negative funding trends to development assistance. Several speakers emphasized that annual increases in core contributions must be achieved until the target was reached.

32. One delegation stated that it would increase its 1999 contribution to UNDP by more than 10 per cent, based on the outcome of internal studies it had conducted on UNDP country-level operations and on UNDP/World Bank relations. That delegation also emphasized that the ownership of the MYFF by UNDP headquarters and country offices should be complemented by donor Governments. Several speakers drew particular attention to the need to broaden the donor base and called for more equitable budget sharing among donors. Two delegations announced that they planned to maintain their 1999 contributions to the UNDP core budget for 2000 and 2001. One delegation emphasized that the only way to reverse the downward trend in voluntary core funding was for UNDP to demonstrate its impact in poverty eradication and progress towards the achievement of international development targets in programme countries.

33. Several delegations inquired as to how non-core activities would be included in the MYFF classifications. One delegation stated that the

results-oriented annual report (ROAR) should link programme and non-programme categories within an overall country allocation covering core and non-core resources to provide information on the use of all UNDP resources.

34. With regard to non-core funding, one speaker underlined that cost-sharing programmes were a prime example of how UNDP could serve as a catalyst, facilitator and adviser. It was thus inconsistent to attack government cost-sharing as a development modality while supporting a MYFF that sought to make UNDP programmes function in the way UNDP was already functioning in countries with strong cost-sharing activities. Another speaker stressed its strong concern with the cost-sharing modality as UNDP seemed to be operating as an executing agency and thus outside its mandate.

35. Several speakers underlined the need to share experiences among UNDP and its bilateral partners in results-based management, including the development of indicators.

37. Another delegation underscored the importance of strategic alliances between UNDP and other organizations, suggesting that the ROAR be used as an instrument capable of capturing such alliance building and showing results achieved in that respect. In that way, the ROAR should serve as a means for resource mobilization. The ROAR should also be able eventually to reflect the vision of UNDP and provide hard evidence of UNDP contributions to development cooperation.

38. Delegations expressed their support for the budget estimates submitted in document DP/1999/31. The zero nominal growth budget was welcomed.

39. Several delegations noted observations of the Advisory Committee on Administrative and Budgetary Questions (ACABQ) expressed in its report on the UNDP budget estimates for the biennium 2000-2001 (DP/1999/33). In particular, several speakers cited the caveat contained in paragraph 8 of DP/1999/33, in which ACABQ noted that the income scenario upon which the budget proposal for 2000-2001 was based might be somewhat unrealistic owing to announced reductions by major donors and the strengthening of the dollar.

40. Some speakers suggested that the support budget might have to be reconsidered in 2000, on the basis of available resources and the recommendations of the Transition Team. One delegation suggested that the budget could be reconsidered in order to release funds for further quality improvement and to redirect funds to essential programme activities.

41. The same delegation suggested that UNDP could find additional savings, in particular at headquarters, by offering separation packages and subsequent release of funds to strengthen programme implementation in key areas. Several speakers stressed the importance of further decentralization, full cost recovery for extrabudgetary activities, or, as called for by one delegation, full cost recovery with an additional contribution of extrabudgetary activities to UNDP general resources, and full and timely payment of government local office costs (GLOC). One delegation underlined the need to halt the upward trend in operating costs for programme countries, in particular in the light of the TRAC reduction.

42. Two delegations requested that the key strategic role of the regional bureaux be preserved and one delegation also noted the critical role of the Bureau for Resources and External Affairs. One speaker expressed concern about any further staff reductions in the Arab States region. Another speaker noted that, based on the staffing formula of the United Nations Volunteers programme, its budget should not have been decreased. Another speaker offered to host the representatives of all United Nations procurement officials and supply divisions during a five-day conference in Saudi Arabia.

43. The Administrator noted with great pleasure the support from all quarters for the budget estimates for 2000-2001 and the MYFF. He had taken careful note of comments regarding the need for financial prudence and statements that the budget could begin but must be matched with the necessary pledges. As many had noted, the budget would have to be reviewed in the light of the findings of the Transition Team and funding levels. He had heard the common frustration in programme and donor countries regarding the fall in official development assistance. He had also noted the concerns about indicators used in the MYFF process and with regard to avoiding micro-management. The MYFF needed to be an effective tool and means for reporting back to the Executive Board on outputs and meeting strategic goals. It should not impose a form of conditionality or method of control that did not reflect the priorities of programme countries. UNDP would report to the Executive Board on the total management of the organization, not on the micro-details. On the issue of core versus non-core funding, he noted that the views of delegations had varied greatly. All comments had demonstrated a tremendous overall extension of support to the UNDP administration, in particular the team led by the Assistant Administrator, Bureau for Planning and Resource Management, who had worked on the MYFF. The Transition Team report would be completed in the coming months, followed by agreement on management goals in different sectors, including both internal goals and external output goals on development effectiveness. The work needed to be tied to the MYFF in a single exercise. If UNDP came back with some different views on strategic priorities, that would be included in the evolving targets of the MYFF. He noted that the review of UNDP 2001 would also take place in late-1999. Another input was the staff survey, which had received a 50 per cent response rate. It was hoped that by the end of 1999 there would be a clear idea of what organizational changes would take place, including with regard to staff, location of staff, training, voluntary departures, and the need to resume new recruitment. Whatever the size of the organization, management norms with regard to training, retraining and new recruitment could no longer be ignored. The Administrator stated that he believed UNDP could return to the Board with a provocative business plan that built on the discussion held at the current session and consistent with the goals and mission of the organization. It was a watershed moment, as UNDP was on the edge of its very existence and it was impossible to proceed with business as usual. The organization had to regain the trust of donors and its effectiveness at the country level to build financial and political support.

44. The Assistant Administrator and Director, Bureau for Planning and Resource Management, thanked the Board for its comments and questions. The support and encouragement the Board had provided made a large difference in implementing such a large and complex exercise as the first MYFF. He noted that many delegations had stated that it was still a work in progress, that UNDP was on the right track and that there was a need for continued learning, refinements and quality improvements. UNDP would incorporate comments made at the current meeting and at the informal sessions on indicators and terminology to ensure full consistency with texts of international agreements. The invitations to continue working together in partnerships in the Board and at the country level were welcomed, especially with regard to difficult topics such as indicators for soft interventions and expressions of value for partnerships. In response to the query raised regarding alignment of organizational and staff competencies with regard to UNDP advisory, facilitation and partnership roles, he noted that UNDP had a set of competencies defined as combinations of technical skills, working methods, behaviours and attitudes which would continuously have to be developed. The MYFF provided a strategic tool in that regard for a careful review of evolving competency requirements. He looked forward to further discussion of the MYFF in the informal meetings, including on the ROAR and its timing in 2000. He noted that the issue of administrative ratios had been raised. UNDP agreed with the value of such measures to benchmark organizational performance from year to year, as well as comparing UNDP, with all the necessary caveats, with similar organizations. That issue would be taken up in the informals along with comments and questions on cost recovery and staffing issues. On one issue with regard to staffing, he reassured the Executive Board that low income and least developed countries would be protected to the maximum extent from staff cuts at the country level. The Assistant Administrator thanked all members for their efforts to ensure timely payments for voluntary contributions and GLOC, especially the seven OECD/DAC donors which had paid in full and the donors which had submitted partial payments, and expressed the hope that the five remaining donors would soon send in their contributions. UNDP was pleased that some 40 programme countries had increased their pledges in 1999 and he thanked them for their efforts to ensure GLOC payments. Timely payments were very important, as the UNDP liquidity situation was of concern, with the expectation of cash flow problems in January 2000 and the likely need to dip into the reserve for the first time in many years. He expressed appreciation to the Government of Saudi Arabia for their offer to host a meeting of procurement officials from the United Nations, which would be coordinated though the Inter-Agency Procurement Services Office.

45. The Executive Board took note of the report of the Advisory Committee on Administrative and Budgetary Questions on the UNDP budget estimates for the biennium 2000-2001 (DP/1999/33), the annual review of the financial situation 1998, as well as detailed statistical information (DP/1999/32 and Add.1), the annual statistical report 1998, including procurement of goods and services (DP/1999/34) and the report on information on the United Nations system technical cooperation expenditure 1998 and statistical annex(DP/1999/35 and Add.1) and adopted the following decision:

99/23. UNDP: multi-year funding framework and support budget estimates for the biennium 2000-2001

The Executive Board

1. Reaffirms its decisions 98/23 and 99/1;

2. Takes note of the report of the Administrator on the multi-year funding framework 2000-2003 (DP/1999/30) and the strategic results framework

(DP/1999/CRP 12);

3. Welcomes the significant achievement of UNDP both at headquarters and in the field in developing the multi-year funding framework;

4. Recognizes that the multi-year funding framework integrates programme objectives, resources, budget and outcomes with the objective of increasing core resources and enhancing their predictability;

5. Expresses its deep concern about the continuing overall decline in the level of core resources and the continuing overdependence on a limited number of donors;

6. Notes with appreciation the efforts of those Governments that have maintained, maintained at a high level or increased their core contributions to UNDP, and encourages all countries, in particular the donors, and other countries in a position to do so, to increase their contributions and to pay their contributions on schedule to help to put UNDP funding on a predictable, continuous and assured basis and to reach the annual funding target of $1.1 billion;

7. Requests the Administrator, in consultation with the Executive Board, to continue to develop and refine the multi-year funding framework as a strategic management tool, keeping in view decisions 94/14, 98/1, 98/3 and 98/23, to enhance the visibility and focus of UNDP at the corporate and country levels, taking into account the views expressed by the members of the Executive Board at the third regular session 1999;

8. Also requests the Administrator to continue to conduct informal consultations with the Executive Board on the further implementation of the multi-year funding framework cycle, including the development of suitable indicators for measuring outcomes and results, the scope and content of the reporting system, which will start with the submission to the Executive Board of the first results-oriented annual report, for reporting on results and priority areas of the mandate of UNDP such as the eradication of poverty, to define clearly the outcomes and results of UNDP programmes;

9. Further requests the Administrator to enable full participation of programme countries in the elaboration, monitoring and reporting of the strategic results framework;

10. Requests the Administrator to submit to the Executive Board at its annual session 2000 proposals for revising and updating the multi-year funding framework, as required, indications of how lessons learned from one multi-year funding framework cycle will be taken into account in the subsequent cycle and proposals for the structure and timing of the multi-year funding framework report;

11. Also requests the Administrator to submit every year, at the third regular session, an updated resources allocation framework on the basis of

table 4, included in the integrated resources framework (see DP/1999/30, chap. V);

12. Also requests the Administrator to submit strategic results and integrated resources frameworks, as appropriate, for the funds administered by UNDP and to incorporate them into the multi-year funding framework;

13. Takes note of the report of the Administrator on the biennial support budget estimates for the biennium 2000-2001, which is an integral part of the integrated resources framework of the multi-year funding framework, as contained in document DP/1999/31, as well as the concerns expressed by delegations during the formal session;

14. Approves the proposals by the Administrator, as contained in paragraphs 38 to 47 of document DP/1999/31, on post resources allocated to country offices by region;

15. Approves the proposal by the Administrator, as contained in paragraphs 48 to 55 of document DP/1999/31, on contributions towards local office costs and, prior to any decision being taken relating to the aforementioned paragraphs, takes into account the following provisions:

(a) UNDP must fully consult with Governments on costs associated with the UNDP local office structure;

(b) Contributions towards local office costs could be met through the mechanisms outlined in paragraphs 52 and 53 of document DP/1999/31;

16. Requests the Administrator to consult with programme countries as to other modalities of meeting government local office costs obligations and report to the Board thereon;

17. Approves the proposal by the Administrator, as contained in paragraphs 112 and 113 of document DP/1999/31, on the United Nations House programme, where appropriate, ensuring that there will be no additional burden on the host countries;

18. Takes note of the report of the Administrator on the current status of cost-recovery practices, as contained in paragraphs 114 to 120 of document DP/1999/31, and requests the Administrator to consult with the Executive Board on cost-recovery practices in the light of the current review by UNDP and any comments provided by the Advisory Committee on Administrative and Budgetary Questions;

19. Requests the Administrator, if the situation requires and taking into account the resource situation, to consult with the Executive Board as to whether a revised 2000-2001 budget is required and requests him to continue to make every effort to contain both the administrative and programme support costs at headquarters and in the field;

20. Approves the proposals by the Administrator contained in paragraphs 105 to 111 of document DP/1999/31 concerning the separation reserve amounting to

$7 million and, taking into account the comments of the Advisory Committee on Administrative and Budgetary Questions contained in paragraph 17 of document DP/1999/33, approves $1.5 million for the transitional measures reserve;

21. Approves gross appropriations in the amount of $585,371,600 for the purposes indicated below and resolves that the income estimates of $67,127,000 shall be used to offset the gross appropriations, resulting in estimated net appropriations of $518,244,600;

22. Authorizes the Administrator to redeploy resources between appropriation lines up to a maximum of 5 per cent of the appropriation line to which the resources are redeployed;

23. Takes note of the report of the Administrator on the biennial support budget estimates for the biennium 2000-2001 for the United Nations Capital Development Fund, the United Nations Revolving Fund for Natural Resources Exploration, and the United Nations Development Fund for Women, as contained in document DP/1999/31;

2000-2001 biennial support budgets
(in thousands of United States dollars)

17 September 1999

46. The Executive Board adopted the following decision:

99/24. Funding situation of UNDP and UNFPA

The Executive Board

1. Notes with concern the continuing and significant decline in core contributions to the United Nations Development Programme and to the United Nations Population Fund and in particular the resulting decline in resources available for programme activities;

2. Also notes with concern the impact that such resource shortfalls have on the capacity of the United Nations Development Programme and that of the United Nations Population Fund to meet the increasing needs of programme countries for their assistance;

3. Requests the Administrator and the Executive Director to bring this critical resource situation to the attention of the Secretary-General with a view to mobilizing the support of world political leaders in order to reverse the trend of declining contributions to the United Nations Development Programme and to the United Nations Population Fund.

17 September 1999

47. One delegation, also on behalf of another, stated that it understood the serious situation faced by UNDP and UNFPA owing to the decline in core resources. That situation was exacerbated by the dependence on a limited number of donors. The Secretary-General should emphasize this and encourage underperforming donors to contribute.

48. The Assistant Administrator and Director, Bureau for Development Policy, introduced the report of the Administrator (DP/1999/42) on the United Nations Revolving Fund for Natural Resources Exploration (UNRFNRE). The report had been prepared in response to the discussion at the first regular session 1999, at which time several delegations had questioned the rationale for the continuation of the Fund. The report of the Administrator provided background information on the Fund and its financial status, and outlined the plans of UNDP to phase out its activities by the end of 2000.

49. During the past 25 years, the Fund had received a total of $91 million in voluntary contributions and other income from 26 countries. In recent years, however, the voluntary contributions had declined from a level of $3 million in 1991 to $1.6 million in 1998. The current financial status of the Fund was summarized in document DP/1999/42.

50. As indicated in the report, UNDP was in the process of phasing out the activities of the Fund, a process that was expected to be completed by the end of 2000. Beyond that year, UNDP support for country-level activities in that sector that was in accordance with the sustainable human development frameworks would be mainstreamed, on a case-by-case basis, into country cooperation frameworks. In phasing out the Fund, careful consideration had been given to three key issues: (a) ensuring that all existing project and contractual commitments were responsibly fulfilled; (b) ensuring that all usable information compiled by the Fund was archived and made available to all programme countries; and (c) ensuring that the balance of funds as of the end of 2000 would be used for capacity-building activities for natural resources management, mainstreamed as part of the UNDP country cooperation framework.

51. The Executive Board adopted the following decision:

99/20. United Nations Revolving Fund for Natural Resources Exploration

The Executive Board

Endorses the plans to phase out the activities of the United Nations Revolving Fund for Natural Resources Exploration by the end of 2000, as outlined in document DP/1999/42.

17 September 1999

III. COUNTRY COOPERATION FRAMEWORKS AND RELATED MATTERS

52. The Associate Administrator introduced the item, noting that the first country cooperation frameworks (CCFs) for the Central African Republic (DP/CCF/CAF/1 and Corr.1), Antigua and Barbuda (DP/CCF/ANT/1), Ecuador (DP/CCF/ECU/1) and Haiti (DP/CCF/HAI/1 and Corr.1) and the first extension of the first country cooperation framework for Eritrea (DP/CCF/ERI/1/EXT.I) were among the last to be submitted to the Executive Board under the successor programming arrangements, introduced in 1995. To date, 156 programme countries had submitted CCFs, the Administrator had approved assistance on a project-by-project basis to a further 6 countries and a valid country programme remained in 2 other countries.

53. He also introduced the note of the Administrator on assistance to the Democratic Republic of the Congo (DP/1999/36), which would authorize the Administrator to continue to approve assistance to that country on a project-by-project basis. It was hoped that the CCF for the Democratic Republic of the Congo would be submitted to the Board in 2000.

54. As the Board had been informed by the Administrator in his statement, resources initially meant for three years (1997-1999) had been extended to cover a fourth year. As a result, a number of CCFs would have to be extended through the year 2000.

55. The Associate Administrator underlined the growing number of UNDP programme countries that were experiencing or only beginning to emerge from crises that threatened the very functioning of their Governments. UNDP decentralized management arrangements had allowed a rapid and flexible response. The organization was increasingly convinced that the continuation of minimum development activities during the period of crisis was vital to the speed of rehabilitation, recovery and longer-term development.

56. The focus in UNDP activities was undoubtedly enhanced by the country-level exercises to develop strategic results frameworks (SRFs) that were proceeding concurrently with the finalization of the CCFs. The institution of the SRFs as a management tool would enhance the focus on results in CCFs. The next generation of CCFs, beginning in January 2000, would contain more concrete articulation of results expected. Efforts to improve performance were being reinforced by many other measures designed not only to increase focus but also to improve impact, effectiveness and greater efficiency in achieving the results planned. Those included: (a) an in-depth review of each CCF towards the end of its third year; (b) an internal review process for examining individual programmes and projects at the country, regional and global levels, after approval; (c) drawing up CCFs in the framework of the United Nations system-wide processes, namely the common country assessment and the United Nations Development Assistance Framework (UNDAF); (d) regular meetings between the heads of regional bureaux and the Associate Administrator; and (e) the issuance of the new UNDP programming manual early in 1999, which included emphasis on results and guiding principles for programming endorsed by the Executive Board in decision 98/1.

57. All senior management was committed to the pursuit of efficiency and effectiveness in responding to the development needs outlined in the frameworks agreed upon with programme countries and within the parameters of the Executive Board policy. The Administrator had made it very clear that operations at the country level would reflect focus, efficiency, cost-effectiveness, speed and impact.

58. The Executive Board approved the first CCFs for the Central African Republic (DP/CCF/CAF/1 and Corr.1), Antigua and Barbuda (DP/CCF/ANT/1), Ecuador (DP/CCF/ECU/1) and Haiti (DP/CCF/HAI/1 and Corr.1) and took note of the first extension of the first CCF for Eritrea (DP/CCF/ERI/1/EXT.I).

59. The Permanent Representative of the Democratic Republic of the Congo expressed his gratitude to the Executive Board for document DP/1999/36. The Board had taken a key decision in allowing project-by-project assistance to his country until normal programming could be set up. For the past decade, the Democratic Republic of the Congo had received almost solely humanitarian or emergency assistance. The programme in his country had been regularly reviewed in past years. He thanked the Assistant Administrator of the Regional Bureau for Africa for the sustained attention to his country and urged its continuation. Given the size of the Democratic Republic of the Congo and its potential in natural resources, it should not have to continue to rely on emergency aid. In spite of the war, he hoped the formulation of the country programme covering 2000-2001 would begin, taking into account the new strategic goals of the Democratic Republic of the Congo, including in the areas of poverty eradication, social services, environment and good governance. Post-crisis development activities and a strategy to mobilize support for that programme could also be very useful. His delegation wished to add the CCF for the Democratic Republic of the Congo to the agenda of the Executive Board in 2000. The war in his country had been devastating in many ways, particularly with regard to the number of fighters having HIV/AIDS, the number of displaced persons, and refugees, including vulnerable women and children. More than emergency relief would be needed to assist his country.

60. One delegation commended the efforts of UNDP in Haiti, the Central African Republic and Ecuador. The programme in Haiti had really made a difference. At a time when bilateral and multilateral aid had been suspended, UNDP had contributed greatly to reforms in the governance area and in regard to promotion of civil society organizations. In sustainable livelihoods, UNDP had enabled access to drinking water, food production and support for cooperatives. The delegation requested information on how the transfer of microfinance activities to the United Nations Capital Development Fund (UNCDF) would affect activities in Haiti. UNDP should focus its interventions as adviser, facilitator and catalyst. The programme in Ecuador was very effective owing to the good work of the Resident Representative. Issues remained, however, regarding the results of United Nations activities in Ecuador. It could be more effective to streamline operations under one programme, led by the UNDP Resident Representative. In the Central African Republic, the Resident Representative had played a key role in electoral assistance.

61. Another delegation cited a difficulty in terms of principle with regard to the CCF for Antigua and Barbuda, given its relatively favourable economic indicators. The delegation had questions regarding the anti-poverty aspects of the programme, which focused on data collection. Secondly, there were questions on the studies and strategic analyses on good governance mentioned in the document. UNDP activities should be of direct benefit to the people in a country. Therefore, the delegation had a very reserved view of the CCF for Antigua and Barbuda.

62. One delegation expressed support for the CCF for Haiti and stated that further international support was required. The speaker's Government had contributed $200,000 in 1997 to the Trust Fund for Haiti National Police and had recently transferred the balance of the contribution to the UNDP trust fund.

63. Another delegation recalled Executive Board decision 98/1 and in the view of the speaker's Government, the CCFs submitted at the current session did not clearly reflect the guiding principles endorsed in that decision. The speaker urged that the guiding principles be made operational, and in particular, that their application to all CCFs be made evident in the future. The speaker also requested information on how the $3.3 million in core resources allocated to the programme in Ecuador would be utilized.

64. The Permanent Representative of Antigua and Barbuda noted that his country still had a long way to go despite a high ranking in the human development index (HDI). He cited structural adjustment in the economy that had created economic problems for people in his country and the overall need to focus on human resource development. The graduation of his country from development assistance based on narrow criteria ignored the serious and persistent problems faced by most small Caribbean island States. The traditional measures of economic growth did not take into account the effects of such natural disasters as hurricanes that necessitated government assistance to both public and private sectors. Moreover, 5 per cent of the Antigua and Barbuda population was currently comprised of refugees from Montserrat. In addition, UNDP played an important role in governmental reform in Antigua and Barbuda. A number of regional institutions were assisting in institution building and setting up regulatory frameworks and a small multi-disciplinary team would monitor the reform. Antigua and Barbuda was grateful for the support of UNDP and UNFPA.

65. Another delegation thanked the Executive Board for adopting the CCF for Antigua and Barbuda. Work in public sector management, governance and poverty eradication was very important. The presence of UNDP in the Caribbean was vital, as small island countries there benefited from its assistance at a time of diminishing funding from other donors. Despite the high ranking in the HDI, other factors such as hurricanes threatened the stability of economies of countries such as Antigua and Barbuda, which also had the additional burden of caring for refugees from Montserrat.

66. The representative of Ecuador thanked the Executive Board for approving his country's CCF, the focus of which was very realistic, taking into account obstacles, and his Government was optimistic that it could achieve future economic success. The aims of UNDP could be fulfilled only if its target for resources could be achieved.

67. The Associate Administrator responded to the questions and comments made. With regard to UNDP operations in Antigua and Barbuda, he stated that although that country could seem to be prosperous based on its per capita income figure, there were many social and economic problems that necessitated UNDP assistance. Urgent improvements were needed in many areas, in particular in public sector management and poverty eradication. He encouraged the continuation of the discussion of the subject with the country who had raised the queries regarding the CCF for Antigua and Barbuda. In response to the query raised, he reconfirmed that all guiding principles were being systematically applied in the CCFs.

68. The representative of the Regional Bureau for Latin America and the Caribbean noted that the CCF for Antigua and Barbuda needed to be seen as part of its highly vulnerable situation as a small island developing State. Proper management and public sector reform was a vital element in the change process initiated by the Government. With regard to poverty eradication, the Prime Minister had expressed his requirements that the intervention of UNDP would result in concrete bankable projects that could be launched in the fight towards poverty eradication. He thanked the representative who had expressed positive comments on the CCF for Haiti.

69. The Assistant Administrator and Director, Regional Bureau for Africa, was encouraged by the move to peace in the Democratic Republic of the Congo and hoped that in 2000 the CCF for that country would be completed, following discussion with the Government, and together with other United Nations partners.

70. The Executive Board took note of the note of the Administrator on assistance to the Democratic Republic of the Congo (DP/1999/36) and authorized the Administrator to continue to approve assistance to that country on a project-by-project basis.

IV. SPECIAL FUNDS AND PROGRAMMES

72. Four years later, the Administrator noted, the donor-led evaluation report was positive, indicating that within tight time constraints, UNCDF had enhanced its distinctive identity by developing competence in the fields of decentralization and local governance, as well as in microfinance. The evaluation recommended that donors should continue to support the Fund. By concentrating on local governance, fewer projects and a smaller number of countries, the Fund had revitalized its operations. The Administrator addressed the issue of collaboration between UNDP and UNCDF, citing positive examples of pilot projects in Uganda, Malawi and Cambodia. Those projects had also demonstrated the close collaboration of UNCDF with other partners, including the World Bank, and with national Governments. He noted that UNDP and UNCDF had signed memoranda of understanding with UNDP Resident Representatives in 15 countries and that a special joint unit on microfinance had been created. At headquarters there was close cooperation between the two entities in the area of governance and with regard to monitoring and evaluation. A focused policy on microfinance had been drawn up following a peer review carried out by the Consultative Group to Assist the Poorest (CGAP).

73. The lessons learned from the evaluation had been quite clear: change could be managed and take place in a short period of time. In that regard, UNCDF should be considered an example of best practice. The Fund had already begun to incorporate many of the recommendations contained in the evaluation report. It would continue to be a risk-taking and learning organization, with participation as a key element of the project cycle and teamwork for change as its centerpiece.

75. The Executive Secretary noted that the evaluation process was a tool and presented a challenge for the future. An action plan for follow-up would be ready by late 1999. There would be integration of the findings into a strategic results framework and then into the multi-year funding framework. There would be more decentralization to the country level and the Fund would be less headquarters-oriented. He was confident that the Fund would deliver over the next few years with regard to impact as well as process.

79. Most delegations underlined the importance of the relationship between UNCDF and UNDP. One delegation suggested that the Transition Team could examine the relationship in the light of the changing role of UNCDF over the past few years, especially regarding its interventions in local governance, as UNDP also worked in that area. Another delegation stated that the two organizations should take advantage of their differences in size, assets and approach, and encouraged UNCDF to formulate a strategic results framework to be included in the UNDP multi-year funding framework.

81. The Executive Secretary of UNCDF, responding to the questions and issues raised in the statements by delegations, said that he agreed that the future impact evaluation was essential. The Fund would slowly increase the number of concentration countries if possible and contingent on an increase in resources, and noted that UNCDF worked not only with local governments, but also with civil society, non-governmental organizations and the private sector. He noted that natural resource management in local development programmes remained a priority and cited examples. With regard to infrastructure, a policy paper would soon be issued addressing the role of UNCDF in that area. He noted that although UNCDF came to the Executive Board only every two years, it reported to donors on a regular basis through the Friends of UNCDF. He hoped for the continued support of the Board for UNCDF.

82. The Assistant Administrator and Director, Bureau for Resources and External Affairs, on behalf of the Administrator, expressed appreciation to UNCDF for its accomplishments, and noted that the Executive Secretary would join the UNDP Nordic Office in Copenhagen as Director.

83. The Executive Board adopted the following decision:

99/22. United Nations Capital Development Fund

The Executive Board

1. Takes note with appreciation of the report of the Administrator on the United Nations Capital Development Fund (DP/1999/37);

2. Welcomes the work undertaken by the Fund since 1995 in policy review and development as well as in strengthening the focus of its programme activities and strongly endorses its efforts to establish innovative and effective microfinance and local development programmes, including in local governance;

3. Also welcomes the positive assessment of the Fund's work in the recently completed evaluation of its activities since 1995, summarized in document DP/1999/37;

4. Notes that the evaluation contains a number of recommendations on the further strengthening of the United Nations Capital Development Fund activities, directed to the Fund itself, to the United Nations Development Programme and to donors to the Fund;

5. Encourages the United Nations Capital Development Fund to take the necessary action to implement the recommendations in cooperation with all other relevant actors and to report to the Executive Board on its performance within the context of the results-oriented annual report in 2000;

6. Encourages the United Nations Capital Development Fund and the United Nations Development Programme to intensify their collaboration in all relevant areas, most particularly in the fields of local governance and microfinance, and requests the Executive Secretary of the United Nations Capital Development Fund, in consultation with the Administrator and in the context of the results-oriented annual report in 2000, to report on the Fund's partnership with the United Nations Development Programme in these fields, with particular emphasis on evolving roles and responsibilities;

7. Urges the United Nations Capital Development Fund to strengthen strategic alliances with partners, including Governments, civil society, bilateral donors and multilateral agencies, inter alia, the World Bank, to enhance the impact of its policies and programmes;

8. Recognizes that overdependence on a limited number of donors carries risks for the long-term financial sustainability of the United Nations Capital Development Fund and invites all countries in a position to do so to make voluntary contributions to the Fund in order to secure adequate funding for its programmes;

9. Requests the Administrator of the United Nations Development Programme to carry out an independent evaluation of the impact of United Nations Capital Development Fund programmes and projects and to report to the Board thereon in 2003.

17 September 1999

V. UNOPS: FINANCIAL, BUDGETARY AND ADMINISTRATIVE MATTERS

84. The Executive Director of UNOPS introduced the three reports before the Executive Board pertaining to financial, budgetary and administrative matters: the report of the Executive Director on the revised budget estimates for the biennium 1998-1999 and budget estimates for the biennium 2000-2001 (DP/1999/39); the report of the Executive Director on the level of the operational reserve (DP/1999/40); and the report of the Advisory Committee on Administrative and Budgetary Questions (ACABQ) on the revised budget estimates for the biennium 1998-1999 and the budget estimates for the biennium 2000-2001 (DP/1999/41).

85. The Executive Director noted that UNOPS had continued to demonstrate its ability to operate under the self-financing principle and to evolve the level of financial expertise needed to adjust to changing circumstances. He also stated that he had suggested that the review of the adequacy of the level of the operational reserve be postponed to the next biennium, by which time increased UNOPS experience with financial risk management and more reliable data would reinforce the ability to make sound recommendations.

87. With respect to the operational reserve, two delegations expressed concern at the low level that had been set for it; however, another mentioned the noteworthiness of the capacity of UNOPS and the reserve to absorb non-recurring charges. Four representatives looked forward to the report on the analysis of the appropriateness of the reserve level that would be submitted to the Board at its third regular session 2001.

88. The Executive Director responded to several issues raised, including, inter alia, the diversification, the projected growth in income, the increase in activities with non-traditional clients and the establishment of the business development coordinator function. He described the operational nature of the new Division for Special Programmes Development and elaborated on the new Business Development Unit, established to carry out marketing functions for the operations divisions, noting the significant strengthening of the substantive mandate of many agencies as a result of their cooperation with UNOPS. He also provided details on the impact of the self-financing principle on the nature of employment in UNOPS, the participation of Junior Professional Officers in UNOPS, and the ongoing evaluation of the UNOPS/UNDP relationship. With regard to the latter, the Assistant Administrator and Director, Bureau of Planning and Resource Management, confirmed that it would be an independent evaluation commissioned by the UNDP Evaluation Office based on terms of reference discussed with senior management of UNDP and UNOPS. He recalled no formal requirement for an interim report and expressed interest in presenting the evaluation findings jointly with UNOPS at the first annual session 2000.

89. The Executive Board took note of the report of the Advisory Committee on Administrative and Budgetary Questions (ACABQ) on UNOPS budget estimates for the biennium 2000-2001 (DP/1999/41) and adopted the following decisions:

99/15. United Nations Office for Project Services: revised budget estimates for the biennium 1998-1999 and budget estimates for the biennium 2000-2001

The Executive Board

1. Takes note of the report of the Executive Director on revised budget estimates for the biennium 1998-1999 and budget estimates for the biennium 2000-2001 (DP/1999/39);

2. Approves the revised budget estimates for the 1998-1999 biennium in the amount of $102.6 million;

3. Approves the budget estimates for the 2000-2001 biennium in the amount of $113.8 million;

4. Approves the staffing level as proposed for the biennium 1998-1999, including the relocation of four posts from New York to Rome and of one post from New York to Geneva, and the establishment of the post of Chief of the Division for Special Programme Development at the D-1 level.

15 September 1999

99/16. United Nations Office for Project Services: level of the operational reserve

The Executive Board

1. Takes note of the report of the Executive Director on the level of the operational reserve (DP/1999/40);

2. Decides that the level and rate of replenishment of the operational reserve established in paragraph 2 of decision 97/21 of 18 September 1997 remain in effect through the current and next bienniums;

3. Requests the Executive Director to submit a detailed report on the appropriateness of the level of the operational reserve at the third regular session 2001.

15 September 1999

90. The Executive Director then introduced the report on the responsibility of UNOPS in personnel matters (DP/1999/38) as well as supplementary information thereon (DP/1999/CRP.13).

91. He recalled: (a) the recognition by the Executive Board (decision 99/12) of the need for an improved personnel regime for UNOPS; (b) the request by the Board for information on the substance and implications of the proposed changes in authority and accountability; and (c) its request for assurance that proposals would represent the shared views of the parties that would be affected by the changes. He assured the Board that document DP/1999/38, the product of a consultative process, contained the requisite information and that the new approach developed in response to concerns of the secretariat was reflected in the revised draft decision contained in document DP/1999/CRP.13, which had also been reviewed and approved by the Under-Secretary-General for Management and the Administrator of UNDP.

93. The Executive Director thanked delegations for their expressions of support and contributions to the discussion on the delegation issue during the third regular session 1999 and at the annual session 1999. In response to an inquiry on personnel policies and procedures, he indicated that current recruitment practices were identical to those of UNDP and that additional information on their evolution could be provided subsequent to the delegation of authority under consideration.

94. The Executive Board adopted the following decision:

99/17. Responsibility of the United Nations Office for Project Services in personnel matters

The Executive Board

1. Takes note of the report of the Executive Director on the responsibility of the United Nations Office for Project Services in personnel matters (DP/1999/38);

2. Reaffirms that appropriate authority and corresponding accountability for personnel matters should be vested in the Executive Director, in accordance with the proposals contained in document DP/1994/62, of which the Executive Board took note in its decision 94/32, and with Executive Board decision 99/12, including the authority to issue United Nations Office for Project Services letters of appointment;

3. Requests, as a first step, that the Administrator of the United Nations Development Programme delegate to the Executive Director authority to issue United Nations Office for Project Services letters of appointment and to administer the staff of the United Nations Office for Project Services in accordance with the United Nations Staff Regulations and Rules;

4. Requests the Executive Director to submit a detailed report on the steps taken to implement the present decision at the annual session 2000.

15 September 1999

95. In her introductory remarks the Executive Director focused on a few highlights of the work of UNFPA and the challenges that lay ahead. She recalled with satisfaction the successful completion of the twenty-first special session of the General Assembly on the five-year review and appraisal of the implementation of the Programme of Action of the International Conference on Population and Development (ICPD). She thanked the members of the Executive Board, who had worked hard to bring about a successful result, not only at the special session, but throughout the ICPD+5 process. The adoption by consensus of Key Actions for the Further Implementation of the Programme of Action of the ICPD (document A/S-21/5/Add.1) was testimony to the seriousness and importance placed on those issues by all countries. She noted that the ICPD+5 review showed that in five years progress had been made in advancing the Cairo goals. Many countries had embraced, and strengthened, the recognition of reproductive and sexual rights through policy changes; had taken steps to integrate population concerns into their development strategies; and had added new components to reproductive health services while also improving access to them. At the same time, the review revealed that much greater and urgent action was needed in such areas as the prevention of HIV/AIDS; addressing the sexual and reproductive health needs of adolescents; reduction of maternal morbidity and mortality; and the provision of reproductive health-care to women and adolescents in emergency situations.

96. The ICPD+5 review had also revealed that perhaps the greatest constraint faced by countries in achieving the full implementation of the Programme of Action was, simply, a lack of the political will to provide resources, particularly the international assistance part as was agreed at the ICPD in 1994. While the document adopted at the special session provided useful guidelines and specific actions to meet agreed priorities, commensurate commitments had to be made and kept to halt, and reverse, the decline in resources for social development in general, and population programmes in particular.

100. In late-August, she had visited China and Mongolia and was pleased to see that notable progress was being made in both countries with the implementation of the country programmes approved by the Executive Board. In China, she had visited one of the counties of the reproductive health subprogramme which was implementing the ICPD approach of informed choice and quality of care. She had been able to observe, at the county, township and household levels, the great changes that had taken place in the manner in which services were provided, with a major emphasis on counselling, and with no targets or quotas. Those efforts were being widely publicized through pamphlets, billboards and individual counselling. The Chinese leadership was pleased with the programme, and the attention given to the life cycle and quality of care approach. The Executive Director had also been impressed with adolescent reproductive health education and services, including the popularity of social marketing and vending machines. In Mongolia, the changes that had taken place over the years in the population programme were impressive. There was an openness to a number of issues that used to be sensitive, but were now being addressed, including adolescent reproductive health issues, HIV/AIDS, and maternal mortality. Indeed, remarkable progress had been made in Mongolia in adopting and implementing the reproductive health approach.

101. The Executive Director emphasized that in the case of all UNFPA country programmes, the current resource situation was seriously and critically constraining planned activities. For its part, UNFPA was doing all it could to mobilize additional resources. She reported that following up on Executive Board decision 99/5 on the multi-year funding framework (MYFF), substantial progress was being made in further developing that approach. The MYFF would be submitted at the second regular session of the Executive Board next year. She added that fund-raising with foundations was proceeding well. However, there was a major shortfall in programme resources across the board, amounting to approximately $72 million for the current year in comparison to what had been approved by the Executive Board and what countries had prepared for and were ready to implement. The situation was not only extremely difficult for UNFPA but more importantly it was a real tragedy for all programme countries. The impact of programme slow-down and cut-backs now would be felt for years to come and would curtail the opportunities of future generations for a peaceful and prosperous life on a sustainable planet.

102. She appealed to the members of the Executive Board to bring that reality to the urgent attention of the decision-makers in their countries. Given the recognition that globalization was here to stay, she underscored that it was impossible not to acknowledge that population issues affected everyone, even in the more prosperous donor countries. In conclusion, noting that the resources existed as was shown by the billions being spent elsewhere, the Executive Director asked where was the commitment and shared responsibility to implement what had been internationally agreed.

104. The Executive Director thanked the Executive Board members for their comments. She noted that UNFPA would welcome a decision by the Board on follow-up to ICPD+5 as that would help to concretize the process. She underscored that in the decision the proposal for further follow-up should be linked to the issue of resources. She added that the annual session in June 2000 would be the appropriate time for UNFPA to report to the Board on follow-up to ICPD+5.

105. The Executive Board adopted the following decision:

99/18. ICPD+5

The Executive Board

1. Takes note of the report of the Ad Hoc Committee of the Whole of the Twenty-first Special Session of the General Assembly and, in particular, of the key actions for further implementation of the Programme of Action of the International Conference on Population and Development (A/S-21/3/Add.1);

2. Warmly acknowledges the role played by the United Nations Population Fund in preparatory and related activities that ensured that the special session was a success;

3. Recognizes that:

(a) Implementation of the key actions agreed at ICPD+5 calls for more concerted effort from the international community;

(b) The United Nations system, including all United Nations funds, agencies and programmes, have a key role in supporting effective action in relation to ICPD;

(c) UNFPA in particular must play an effective leadership role to ensure that the goal of universal access to reproductive health is achieved by 2015;

4. Requests the Executive Director, therefore, to present to the Executive Board at its annual session 2000 a report for approval on the strategic role of UNFPA in supporting countries' implementation of relevant key actions contained in the report of the Ad Hoc Committee of the Whole of the Twenty-first Special Session of the General Assembly. The report should be prepared in parallel with the multi-year funding framework paper being presented to the Board at the second regular session 2000. In particular, the report should:

(a) Describe how the Fund will fulfil its leadership role within the United Nations system in assisting countries to take the action necessary to ensure availability of reproductive health services and products;

(b) Outline working arrangements and mechanisms for coordination with programme country Governments, other agencies of the United Nations system and with donors, including within the framework of the United Nations Development Assistance Framework and resident coordinator system and sector-wide approaches, to ensure coherence at international, regional and country levels;

17 September 1999

VI. FINANCIAL, BUDGETARY AND ADMINISTRATIVE MATTERS

106. The Executive Board had before it the following reports: estimates for the biennial support budget for 2000-2001 (DP/FPA/1999/11); annual financial review, 1998 (DP/FPA/1999/13); and report of the Advisory Committee on Administrative and Budgetary Questions (DP/FPA/1999/14).

110. During the discussion that followed several delegations appreciated the fiscally responsible manner in which UNFPA had developed the proposed biennial support budget for 2000-2001 and noted that it was prudent, transparent and realistic. Several delegations welcomed the cost-cutting measures undertaken by the Fund, including reduction of travel expenses, consultancies and publications, and the temporary freezing of 11 posts and indicated that they were ready to approve the proposed budget. A number of delegations commended the Fund for its efforts and success in obtaining funding from private donors and foundations. A number of delegations made announcements concerning their voluntary contributions to UNFPA. The delegation of the Czech Republic announced that its 1999 contribution to UNFPA would amount to over $70,000 and would be paid shortly. The delegation of Denmark confirmed that its country intended to continue to contribute to UNFPA at a very high level. The delegation of Ghana noted that it had paid its contribution to UNFPA in full and expected to increase its contribution next year and beyond. The delegation of Ireland stated that its country had increased its contribution to UNFPA by 10 per cent and hoped to continue doing so in the future. In addition, a multi-year pledge had been made and the contribution for the current year had been paid in full by April. The delegation of Italy stated that its country had increased its 1999 contribution to UNFPA by 150 per cent and intended further to increase its cooperation with the Fund. The delegation of Japan announced that its Government had disbursed a contribution of $48.28 million in full as pledged for the Japanese fiscal year 1999. The delegation of Switzerland stated that its country had increased its contribution to UNFPA by 10 per cent and hoped to make a further increase next year. Many delegations hoped that the momentum generated by the ICPD+5 review and appraisal and the adoption of the MYFF would result in increased funding for UNFPA. One delegation noted that the data in the proposed budget provided a good starting point for the MYFF. The speaker recognized the difficulty of developing indicators for the MYFF, in particular with regard to advocacy. Another delegation asked to be updated on the progress made in developing the MYFF.

112. Another delegation, expressing concern about the decrease in programme resources for countries in the A and B categories, stated that over the years his country had argued in favour of increasing the share of resources for countries in sub-Saharan Africa and was therefore concerned about the decrease in resources for those countries. He asked if the decrease had to do with difficulties in absorptive capacity in those countries. One delegation, while welcoming the increase in NGO and national execution, expressed concern about the 10.7 per cent decrease in programme resources for countries in the Asia and the Pacific region, in comparison to the 1998-1999 budget. The speaker urged the Fund to make further efforts to achieve a more balanced distribution of resources. One delegation stressed that the discussion concerning the decline of resources should focus on how to increase resources and not on how to divide the shrinking pie among the different regions. He recalled that during the twenty-first special session of the General Assembly it had become clear that the programme countries had performed quite well in mobilizing their share of the estimated resource requirements outlined in the ICPD Programme of Action. However, the donor partners had fallen short in providing the resources necessary for implementing the Programme of Action. He urged donors to meet their commitments.

114. One delegation stated that its Government had been very surprised when informed last July that there had to be an interruption in the projects due to a lack of resources. The disruption had had an adverse impact on population activities in the country. The speaker urged that such episodes should not occur again without warning. Another delegation stated that if the donors did not increase their contributions to UNFPA, the Fund would be plunged into a deep financial crisis and the impact would be felt not only in programme countries but also in donor countries.

116. Another delegation stated that the issue of new posts should be looked at in the context of the trend during the last three years and in relation to the high vacancy rate. Furthermore, the issue should not be seen in isolation from the staffing of the Technical Advisory Programme (TAP). The speaker observed that a high vacancy rate could cause disruption and discontinuity in already established programmes and the value of new posts should be looked at in relation to those consequences. She suggested that an analysis be undertaken of where it might be possible to cut posts. She asked to what extent the proposed budget reflected the long-term implications of filling the proposed 46 posts for two years. She expressed concern that the support budget was absorbing a larger proportion of overall resources and suggested that the three-year trend should be looked at. One delegation asked if the addition of 46 new posts at the country level was in keeping with an established plan and wondered if UNFPA had rationalized its resources to the optimum mix.

119. One delegation, while drawing attention to the unbalanced population structure and unfavourable public health situation in its country, noted that demographic factors were aggravated by the disastrous ecological consequences of the Chernobyl nuclear catastrophe. The speaker emphasized the need to explore ways to make the best use of resources and increase programme expenditure.

121. One delegation encouraged UNFPA to submit to the Executive Board, at the earliest opportunity, a detailed budget of the additional resources required for UNFPA to implement the actions called for in ICPD+5 review and appraisal. In that regard, the speaker applauded the Executive Director for the attention paid in the report on the biennial support budget to strengthening human resource capabilities, both in the short- and long-term. The speaker added that UNFPA should develop a strategic plan to deal with resource shortfalls and noted that a well-developed resource contingency plan was the best strategy for waiting out lean financial times.

123. One delegation expressed concern regarding the $6.5 million drawdown from the operational reserve that had been repaid with 1999 income. While noting that he understood the rhythms of income and outlays and the necessity of addressing unforeseen situations, he observed that other measures might be necessary to address deficit situations. He asked for information regarding the drawdown from the operational reserve in 1999. He also requested an explanation of why UNFPA had not implemented the harmonized presentation of the reimbursement of national income tax paid on behalf of staff. While noting that a 16 per cent increase in total income was ambitious, he agreed with the Executive Board that the momentum from ICPD+5 might produce that result.