2006 Annual Report

UNDP resources: growing, but fragile and complex

The upward trend in regular (core) resources initiated in 2001 continued in 2005 for the fifth consecutive year. The $921 million gross regular resource income achieved by UNDP in 2005 represents an increase of $79 million over the level achieved in 2004 and has allowed UNDP to meet the annual interim target ($900 million) set by the new Multi-Year Funding Framework (MYFF 2004-2007) for the year 2005. Nevertheless UNDP is still short of its 2007 $1.1 billion MYFF target and while the achievement of the interim target in the second year of the MYFF is encouraging, continued support will be required in order to meet the overall target. Multi-year funding commitments made by several donor governments have helped to increase the predictability of UNDP’s regular funding base, but the regular resource income remains particularly exposed to exchange rate volatility.

The UN under one roof: the Cape Verde experience In 2005, the first joint UN country programme was developed in Cape Verde. For the first time, the UN team in that country agreed on a common programme document and a single action plan reflecting the priorities and objectives of UNDP, the UN Population Fund (UNFPA), the UN Children’s Fund (UNICEF), and the World Food Programme (WFP). More...

The year 2005 saw a very significant increase in other (non-core) contributions to UNDP. Almost all sources of income grew. Virtually all OECD/DAC donors are active in co-financing UNDP programmes in its development practices. Third party co-financing grew to over $2.5 billion in 2005. Local resources, channelled through UNDP by programme country governments in support of their own development programmes amounted to $1.02 billion. As aid mechanisms available at the country level diversify and multiply, UNDP is being called on more and more to support governments to obtain, direct and manage different types of funding in accordance with national priorities.

Donor co-financing and local resources represented an important complement to the regular resource base of UNDP. They have permitted the strengthening of existing programmes and the fostering of partnerships with a range of actors, including the European Commission, regional development banks, the Global Fund for Tuberculosis, AIDs and Malaria, and the World Bank. These ‘non-core’ resources and regular resources, however, are not interchangeable. UNDP’s ability to deliver effective support for capacity development, including with the help of earmarked funding, critically depends on a level of core funding that allows flexible and integrated management systems focused on long-term effectiveness. Development is a long-term challenge that requires a long-term strategic focus, coupled with tactical flexibility and an ability to respond to both crises and opportunities. This is what UNDP is trying to achieve with support from our partners.