2006 Annual Report

Foreword: A trusted partner in development

Kemal Derviş meets with high school students during a visit to Albania in April 2006. The students are taking part in a UNDP-supported initiative aimed at increasing cooperation between local communities and the police. They discussed with the Administrator what they had learned, about the dangers of human trafficking, drugs and alcohol abuse.

Since its creation in 1966, UNDP has been at the centre of the United Nations' operational development system, working both at the grassroots level to help build national capacities for sustainable development, and as a leader in development thinking, as demonstrated by its flagship Human Development Reports and its contributions to critical issues such as global public goods and democratic governance. In many ways, it is this important nexus—connecting countries to knowledge and ideas and working with them to strengthen the capacity needed to tackle development challenges—that is UNDP's hallmark.

With the advent of the Millennium Development Goals (MDGs), the last few years have seen UNDP scale up its activities in a major way. UNDP is working at the conceptual level with a wide range of partners to advocate for the policy and institutional changes needed to fight poverty more effectively and achieve the MDGs. From elections support in Liberia and Haiti, to recovery efforts after decades of conflict in the Democratic Republic of Congo (DRC), to helping countries deliver services to their citizens in countries with much stronger economies but huge social challenges such as Brazil and Indonesia, UNDP also works with countries in a very practical way to help build the institutional capacity needed to promote, support and accelerate human development and sustainable growth.

Recent years have seen a significant increase in the volume of resources given to support UNDP's work. The greatest amount has come from a rise in country level non-core co-financing, an important affirmation of the confidence partners have in UNDP's role and performance. But we face the challenge of a ratio of un-earmarked regular resources to earmarked resources that is too low to support the unity of strategic management and the flexibility required to respond to the challenges and opportunities UNDP faces. Public finance theory, as well as lessons learned around the world, are clear on the need to protect public expenditure and the budgetary process from excessive earmarking; indeed, it is something international development organizations and experts always warn developing countries against. I, therefore, hope that UNDP can have the support of donors in our efforts to strengthen the integrity of our resource base.

Despite these constraints, UNDP continues to make an important contribution to achieving the MDGs, working increasingly closely with our sister organizations in the UN system. Such cooperation should not mean a lack of competition in ideas or methods, but it should mean that there is a synergy in our actions which allows each organization to take advantage of its comparative strengths, pool resources when needed, and work in partnerships, which enable developing countries to steer their own development.

2005 was an important year for the development agenda, with the international community reaffirming its commitment to the MDGs. In 2007, we will be mid-way towards the 2015 deadline. UNDP remains committed to doing its part to translate the ambitious new partnership for development launched in 2000 into better policies, stronger institutions and greater resources more effectively deployed, all with the aim of achieving concrete improvements in the lives of those who need and deserve our strong support.

Kemal Derviş
UNDP Administrator