2007 Annual Report

UNDP Resources

Contributions to the organization’s regular (core) resources grew for the sixth consecutive year, albeit at slower pace. The $922 million gross regular income received by UNDP in 2006 represents a modest increase over 2005, but clearly falls short of the interim target ($1 billion) set by the Multi-Year Funding Framework (MYFF 2004-2007) for the year. The achievement of the overall MYFF funding target—$1.1 billion in 2007—will require continued and enhanced support during the final year of the current cycle. It is encouraging that a growing number of donor governments have adhered to multi-year funding commitments, thus helping to increase the predictability of UNDP’s regular funding base.

Expressed in current dollar terms, core income has increased by 10 percent between 2004 and 2007. Yet when corrected for both inflation and the performance of the US dollar vis-à-vis other currencies, adjusted core income grew by less than 5 percent during this period. UNDP’s funding base remains particularly exposed to exchange rate volatility.

In 2006, combined earmarked (non-core) contributions to UNDP totaled $3.8 billion, remaining at the same level as in 2005. Between 2005 and 2006, resources channeled through UNDP by programme country governments in support of their own development priorities grew from $1.1 billion to $1.36 billion. During the same period, non-core contributions from members of the Development Assistance Committee of the Organisation for Economic Co-operation and Development decreased slightly from $1.05 billion to $1.03 billion. Contributions from non-bilateral partners declined from $1.43 billion to $1.2 billion. Notwithstanding a combined net decrease in non-core funding, UNDP continues to be called upon to support governments to obtain, direct and manage different types of funding in accordance with national priorities.

Earmarked resources represent an important complement to the regular resource base of UNDP. The ratio of earmarked to non-earmarked regular resources remains imbalanced, however. The ability of UNDP to fulfil its mandate and deliver effective capacity building support for development critically depends upon a level of core funding that enables UNDP to pursue flexible, integrated management approaches focussed on long-term development effectiveness and sustainability