DEVELOPMENT: U.S. Aid Cuts Prompt UNDP Restructuring

By Thalif Deen Reprint | | Print |

Thalif Deen

UNITED NATIONS, Sep 9 1996 (IPS) - The United Nations’ largest development assistance agency is restructuring its operations to cope with falling incomes and rising demands.

“We are building a leaner and a more accountable organisation,” says Gus Speth, Administrator of the New York- based U.N. Development Programme (UNDP).

The decline in UNDP’s “core” resources is attributed mostly to cuts by the United States, while growing demands for assistance are coming mostly from the 47 least developed countries (LDCs), described as the poorest of the world’s poor.

This year “will not be a good year for UNDP’s voluntary contributions,” the UNDP head predicts. “They are likely to be down about 9.0 percent below 1995.”

Speth says half this decline is due to the plunge in U.S. contributions, and the other half to the strong U.S. dollar.

“The U.S. is the only country to cut its contributions to UNDP,” Speth told IPS, “Every other country has either sustained or increased its contribution.”

The U.S. cut has had a disproportionate impact because traditionally, Washington has been the largest contributor to UNDP. U.S. funds have continued to decline over the years: from 160 million dollars in 1985 to 113 million dollars in 1995 and 52 million dollars in 1996.

“The U.S. Congress is still in the middle of the process of deciding what to do next year,” Speth notes.

U.S. Ambassador Madeleine Albright is demanding that Congress reverse the cuts.

“The reduction undermines the leadership of UNDP Administrator Gus Speth, an American who has been highly responsive to our concerns about improving the quality, value, and accountability of U.N. programmes,” Albright told the U.S. Senate Committee on Appropriations recently.

As a result of the 50 percent reduction in funding in 1996, the United States has descended from first to seventh place on the list of donors to UNDP programmes. Japan, which provided 101 million dollars, is expected to jump into first place, followed closely by Denmark, Norway, Sweden, Germany, and the Netherlands.

Albright told the Senate committee that UNDP programmes focus on assistance to emerging nations, countries recovering from crisis, and nations working to avoid social, political and economic disintegration.

“These programmes promote free-market reform, privatisation, job creation, democracy, the environment, the advancement of women and peace — all of which contribute to American interests and reflect our values,” she said.

As it struggles to cope with declining revenues, Speth has set in motion a reform process which is aimed at eliminating waste, streamlining UNDP’s overseas operations, reducing staff, and focusing on high-priority development objectives.

Over the 1992-97 period, UNDP expects to reduce its administrative budget in real terms by 12 percent, its regular staff at headquarters by 31 percent, and its total regular staff by 15 percent.

“We have tried to reduce the staff so that we are not basically spending the money on ourselves but on development assistance,” Speth said.

The professional staff at UNDP headquarters currently number 1,331, with an additional 577 based at the agency’s 134 field offices abroad. Some 195 ‘Junior Professional Officers’, financed directly by donors, are assigned to specific countries. A third category of employees, ‘general staff’, includes 4,344 workers.

UNDP resources fall into two categories: core and non-core resources — all of it voluntary contributions. Core resources are not earmarked for specific projects, giving UNDP leeway in how to spend the monies. But non-core resources bind the UNDP to earmarked projects.

Speth says that 90 percent of all unrestricted core funds go to the very poor countries, which account for 90 percent of absolute poverty. Any cuts in core funds, he says, threatens UNDP’s ability to allocate funds to areas of the greatest need.

But while they have reduced core resources, donors have been increasing their non-core funding. Resources of the UNDP and UNDP- administered funds therefore continue to climb overall, moving from 1.36 billion dollars in 1991 to 1.92 billion dollars in 1995.

“In short, our core resource situation is anything but rosy,” says Speth. “But tucked away in the statistics is some reassuring information as well.”

Meanwhile, as part of the reform process, UNDP country offices in Asia and Africa are being independently audited by leading international accounting firms, a practice which, Speth says, will soon be applied everywhere.

The UNDP has also instituted transparent, peer-review procedures for staff evaluations, as well as for hiring, promotion, and assignment decisions. And special policies have been adopted to promote gender equality within the organisation.

Addressing a public seminar recently, Speth described the United Nations’ record in development cooperation as second-to- none. “It’s an unsuccessful business a lot of the time, but the United Nations I believe has historically had more success in development cooperation than any other institution.”