DEVELOPMENT: Cash-strapped UNDP plans to cut costs and downsize

By Thalif Deen Reprint | | Print |

Thalif Deen

UNITED NATIONS, Jan 5 2000 (IPS) - The UN’s largest development agency, fearing a potential cash crisis, has announced plans to downsize its staff, cut costs and shift some of its key operations from New York to its country offices.

. The UN Development Programme (UNDP), which has more than 135 field offices worldwide, will reduce its headquarters staff by about 300 – from 1,200 to about 900 through the year 2002. “I do not believe that we cannot be a first class development agency, giving full support to our field operations, and not do it with 900 of us,” said UNDP Administrator Mark Malloch Brown. “We have to make that change, for the health and for the focus and for the effectiveness of this organisation,” he asserted. Malloch Brown, who took over as administrator last July, has projected his vision for “a new UNDP” in a 22-page draft report titled “The Way Forward.” The report, which will be reviewed by the UNDP Executive Board from Jan. 24-28, has been described as the administrator’s business plan for 2000-2003. Currently, the UNDP handles about 7,000 development projects spread over 166 countries. But the organisation has been hamstrung by a sharp decline in contributions from donor nations. UNDP’s core resources have fallen from 1.2 billion dollars in 1992 to about 700 million dollars in 1999. The agency is also heavily dependent on 10 major donors for its survival. The top 10 donors – the U.S., Denmark, Japan, Netherlands, Norway, Sweden, UK, Germany, Switzerland and Canada – provided about 85 percent of last year’s core budget. Of the 10, the big five contributors to the UNDP are the U.S. (100 million dollars), Denmark (85.3 million dollars), Japan (79.9 million dollars), the Netherlands (73 million dollars) and Norway (69.9 million dollars). Addressing the staff last month, Malloch Brown said that while Official Development Assistance (ODA) was on the decline, the UNDP’s share of ODA was only about three percent. On average, ODA has been about 45 billion dollars annually. “We have a pretension, an assumption about our role which bears no relationship to today’s financial realities,” he said. “We are small, small players. We’re a goldfish, not in a goldfish tank, but in a shark tank.” “And we have to look at where we can strategically place ourselves, where three percent doesn’t become a limitation and liability and a constraint, but where we can use it, combining it with our other strengths to make a virtue out of it,” he said. As of January this year, the UNDP has put in place a new cabinet-style leadership approach “designed to strengthen the effectiveness of UNDP’s decision-making and accountability on key corporate functions.” Through this cabinet, which will meet twice weekly, senior managers will collectively shoulder responsibility for key decisions and their implementation. The new cabinet and its subsidiary structures will rely heavily on performance indicators to track results and manage resources. In his report, Malloch Brown said that over the last decade, the UNDP has repeatedly implemented “severe cost-cutting measures,” including 17 million dollars in real costs in the 2000-2001 budget. “Fully aware of the major challenges it will entail, I have nonetheless instructed managers to target an additional 12 million dollars of savings from the biennial budget to be redeployed towards change projects,” he said. The savings identified, and their alternative use, will be reported to the Executive Board at its September 2000 session. “I have come to believe that real transformation at UNDP will be achieved primarily through changes in leadership style, accountability, culture, performance and innovative partnerships rather than through changes in structures,” Malloch Brown said in his report. The new administrator is planning to convert the UNDP into a leaner and more effective organisation geared to meet the needs of developing nations. At a time of rapid and tumultuous global change, the agency says it enjoys something more precious than money – trust. “Alone among development agencies, it is truly multilateral and impartial. Countries throughout the developing world trust it as their own,” the report asserts. Malloch Brown points out that if this “precious asset” can be leveraged into a more effective and positive role in helping countries meet the complex challenges of the future, UNDP’s activities can have a remarkable impact on human development and poverty eradication. He also points out that he intends to finance the proposed changes in UNDP through reduced administrative expenditures and extra-budgetary contributions.