Vienna Chapter
Madame Chair, Ms. Sandra Noriega, Chargé d'Affaires a.i. (PM of
Guatemala)
It gives me great pleasure to congratulate you on behalf of the Group
of 77 and China on your election as the Chairman of the 21st session of
the UNIDO Programme and Budget Committee. We are confident that your
experience will lead to the success of this session.
I also take this opportunity to congratulate other members of the
Bureau on their election. The Group would also like to thank your
predecessor His Excellency Ambassador Horvath, Permanent Representative of
Hungary, for his commendable leadership of the previous PBC meeting.
The Group would like to thank the Director General Mr Carlos Magariños
for his comprehensive presentation on the financial situation of UNIDO and
the programme and budget proposals for the next biennium. The Group is
also grateful to the Secretariat for making necessary arrangements and
consultations for the meeting.
The Group would be making comments on the Agenda items 3, 4, 5, 6, 8,
9, 10 and 11 in the course of discussions on each item. I would restrict
my intervention to comment on items 3, 4 and 9 for this opening statement.
Madame Chair,
1. The Group of G-77 and China has considered the document PBC.21/8
and takes note that the External Auditor has expressed no opinion on the
financial statements of the Organization for the biennium ended 31
December 2004. We hope to receive his opinion in the course of the year.
We are, however, pleased that the External Auditor has alluded in his
conclusion that our Organisation was 'well run, a view that is endorsed by
a number of independent reviews and accolades on the progress made by the
Organisation'.
2. With regard to the financial situation, the Group notes that the
collection rate for 2004 of 90.5% indicated a slight decrease to the 2002
rate but still higher than the 2003 collection rate. It is recommended
that measures are taken to ensure that the rate is maintained with a view
to register increases in 2005.
3. The Group is concerned that outstanding assessed contributions
from prior financial periods of € 114 million including € 111.1
million for 2002 continue to rise. The Group calls on Member States to
honour their financial obligations in full and on time. The Group
encourages members in arrears to take advantage of the payment plan
programmes the Organisation is implementing with other Member States
reported by the Secretariat which are yielding positive results.
4. The Group, however, is concerned that follow-up with former Member
States owing most of the outstanding amounts has yielded negative results
and therefore calls upon the Secretariat to continue to maintain dialogue
with former Member States to have them settle their financial obligations
to UNIDO.
5. The Group has noted that the spending rate of 83.6% for 2004 was
lower than the 88.6% rate for 2003. The Group also notes that unspent
amounts total €11.9 million with €7.8 million for 2002. The
Group calls upon the Secretariat to adhere to prudent budgetary management
systems to ensure the disbursement of funds for UNIDO's programmes and
ensure that funds are obligatorily released and avoid unbudgeted
accumulations as recommended by the External Auditor.
6. The Group is pleased that the Organisation registered an increase
in technical cooperation funding for 2004. In real terms the Group is
pleased that the increase in voluntary contributions rose from the 2003
total of US$ 102.7 million to US$ 137.4 million in 2004. This, we feel, is
evidence of continued faith in our Organisation by Member States and other
development partners thanks to the good effort by the Director General and
the Secretariat. The Group is also pleased that the TC level has risen to
US$ 98.8 million. We call upon the Secretariat to enhance the programme
cycles through the interim Management Control Framework as well as through
the new Guidelines for the Programme/project Cycle based on the principles
of result-based management system. The target should be to raise the
implementation rate of technical cooperation programmes in 2005 and the
next biennium.
Madame Chair,
1. Regarding the implementation of recommendations of the External
Auditor, the Group of 77 and China notes that the operations has continued
to be of vital benefit to the realisation of recommendations of the
External Auditor, thus bring the Organisation in full compliance with UN
sound financial, accounting and human resource management systems. We are
pleased that a result-based management system has been implemented as
recommended by the External Auditor and that the Office of the
Comptroller-General has actively participated in the process.
2. With regards to the lack of fraud detection mechanism referred to
by the External Auditor the Group recommends that action is taken to
create such a mechanism to ensure compliance with the External Auditor's
recommendations.
3. Regarding governance matters, the Group expresses its appreciation
for the steps taken by the Director-General to consolidate and strengthen
the internal oversight and control mechanism of UNIDO through the Internal
Oversight Group. The Group requests the Secretariat to implement the
External Auditor's recommendation on the use of the term internal
oversight which he deems a misnomer.
4. As to the External Auditor's recommendations on improving and
further strengthening procurement processes in the Organisation, the Group
requests the Secretariat adopts a strategic approach to procurement;
improve procurement and contract strategies and improve the overall
procurement system to ensure availability of sufficient information on
procurement activities of UNIDO.
Madame Chair,
1. The Group of 77 and China expresses its appreciation for the
Report of the Director-General in document PBC.21/13 on the Financial
Situation of UNIDO. The Group takes note of the marginal increase of the
collection rate for the first three months of 2005 of 58.6%, compared to
the 2004 and 2003 of 48,8% and 67,6% respectively.
2. The Group is concerned that outstanding arrears amounted to €
145.2 million (including arrears of € 69.2 million by the US, and €
2.1 million by the former Yugoslavia). These outstanding amounts total €
149.2 million and € 132.5 million respectively. The Group is
encouraged by the pronouncements by some former members reiterating their
commitments to their outstanding contributions to the Organisation.
3. However, the Group is pleased to note that 38 Member States
including six least developed countries have made full payments and 42
Member States including 5 least developed countries have paid their
assessed contributions for the year 2005.
4. The Group expresses its concern that 48 Member States had lost
voting rights as of 31 March 2005 in Accordance with the UNIDO
Constitution and Article 5.2 of the Financial Regulations of UNIDO. We
welcome the payment plans that have been concluded by some Member States
and encourage those that have not done so to enter into negotiation with
the Secretariat to pay their dues.
5. As regards incentives and disincentives following precedent in
other UN organisations the Group requests the Secretariat to study and
compare conditions of such sanctions to ensure that any such incentives
and disincentives do not impede programme implementation and technical
cooperation delivery to Member States.
6. The Group therefore urges those Member States and former Member
States that have not yet paid their assessed contributions, including
advances to the Working Capital Fund and prior years' arrears, as well as
towards the security enhancements, to do so without delay.
7. The Group further requests the Director-General to continue to
pursue his efforts and contacts with Member States to effect the
collection of arrears."
8. Regarding the Financial Situation of UNIDO, the G-77 and China
takes positively to Document PBC.21/10 and wishes to emphasize the need
for the utility of the Special Account for the Regular Programme of
Technical Cooperation in 2004 to be continued in order to execute projects
of this Program amounting to € 2,167,263.
9. The Group is pleased to note that technical cooperation delivery
of $ 98.8 million in 2004 has surpassed previous years' levels. Part of
this high level accomplishment was supported through the implementation of
the special account mechanism for Regular Programme of Technical
Cooperation (RPTC). The Group thus takes note of the Secretariat's
observation of the effectiveness of the special account for RPTC in
supporting technical cooperation delivery. The Group encourages the
Organization to sustain this accomplishment in the next biennium through
effective funds mobilization activities.
1. The G-77 and China has takes note that the programmes related to
the provision of substantive technical and global forum services have been
substantially altered as compared with the Programmes of the biennium
2004-2005. We recognize that the new programmes are providing specialized
services to meet developmental needs associated with Major Programme C
(Energy and Environment), D (Trade Capacity Building) and E (Poverty
Reduction through Productive Activities).
2. The Group, however, notes with concern that Major Programmes C, D,
E and F have been reduced by 2% as compared with the biennium 2004-2005.
We hope that the reduction would not negatively impact the performance of
the technical cooperation delivery.
3. Being fully aware of the importance of achieving Millennium
Development Goals, the Group agrees that the programmatic activities of
UNIDO during the next biennium will continue to focus on making an active
contribution towards the achievement of Millennium Development Goals
within the mandate and competence of the Organization.
4. The G-77 and China has given careful consideration to the Long
Term Vision (LTV) which is under preparation by the Secretariat. We would
like to emphasize that the programmatic activities of UNIDO for the
biennium 2006-2007 should be consistent with it, which is able to improve
the effectiveness, efficiency and enhance use of resources allocation of
the Organization.
Madame Chair,
5. The Group of 77 and China notes, with satisfaction, that the
different programme components retained under the Major Programme D,
mainly competitive manufacturing, technology management and technology
diffusion, promotion of domestic and foreign investments, agro-related
capacity-building activities and SME's export capacity and standards are
at the cutting edge of UNIDO's mandate and core business in providing
technical cooperation and global forum activities.
6. The Group further notes, with great appreciation, that these
programme components are in line with major guiding documents i.e. the
Business Plan, the Medium-Term Programme 2004-2007, the Medium-Term
Programme 2006-2009 and the strategic guidelines: "towards improved
UNIDO programme delivery".
7. The Group notes with satisfaction the retaining of all these
various sub-programmes under Major Programme D and believes that they are
a key to UNIDO delivery of technical cooperation activities.
8. While recognising that Trade Capacity Building is a holistic
process, the Group requests UNIDO to implement the proposed objectives
aiming at securing trade capacity building through enhancing and
supporting competitive capacities for developing countries in order to be
able to produce according to market requirements and in line with
quality/quantity standards; the strengthening conformity assessment
systems and services providing markets; and by accelerating the
integration of developing countries into the global production system.
9. The Group believes that such objectives should result in
strengthening and improving technical cooperation programmes, the
expansion and the diversification of productive activities and new
technologies, the reduction of unemployment, and the promotion of domestic
and foreign investments.
10. The Group is pleased to note that UNIDO is continuing its efforts
to provide and ensure that its budget for technical cooperation delivery
is aimed at promoting the establishment of specialized support
institutions for SME's development and the promotion of the agro-industry.
It believes that these are substantive and very relevant areas wherein
UNIDO can greatly assist Member States' efforts on sustainable industrial
development.
Madame Chair,
11. The Group notes, with interest the positive and pro-active
endeavour taken by UNIDO to maintain its course of strengthening a
regional approach in viewing and addressing the crosscutting problems of
development of African countries in line with the African Productive
Capacity Initiative (APCI) and NEPAD.
12. It also commends the commitment of UNIDO to ensure that
programs/projects implemented under APCI will gradually be included in the
national coordination process of the Poverty Reduction Special Paper
(PRSP).
13. The Group would like to encourage UNIDO in putting more emphasis
for the sake of ensuring the relevance, cost effectiveness and
sustainability of UNIDO's services in Africa as well as other regions and
their impact on the development process.
14. In the regard, the Group request the Secretariat to provide
proper means to ensure the implementation of Resolution GC.10/Res.8,
approved by UNIDO on December 5th 2003, entitled "Poverty Reduction
in Developing Countries, particularly in Latin America and the Caribbean
in the context of sustainable development".
1. The Group takes note of the proposal of the Director-General regarding the Working Capital Fund for the biennium 2006 - 2007, which proposes that the Fund should remain at the same level and with the same objectives for the biennium 2004 - 2005.
Madame Chair,
1. The Group positively sees the amendment of paragraph 5 of the
annex the Financial Regulation of the Organization. It is fitting that the
opinions of the External Auditor correspond to a rigorous and systematic
analysis of the accounts of the UNIDO.
Madame Chair,
1. With regard to the efforts to improve the security system in the
VIC, the position of the Group of 77 and China remains unchanged in
extending its full support. However, with regard to the funding options,
the Group wishes to recall the 29th IDB decision contained in Document
IDB.29/Decision 4. In that document, especially paragraph e, the IDB
recommended the next General Conference "to consider and approve the
financing of UNIDO's share of the cost for the initial phase of security
enhancements as an exceptional case through appropriations for the
biennium 2004-2005…..". This sentence clearly suggests that the
approval recommended is for the initial stage and only as an exceptional
case. We have discussed this issue extensively during the last IDB session
before arriving at this decision.
2. For developing countries this increasing amount to be paid has
already burdened their annual national budgets and therefore hopes that
future increases should be avoided. In this regard, the Group suggests to
the Secretariat that supplementary estimate for the cost of security
enhancement as outlined in the Doc. PBC.21/12, be revised and not to
exceed the figure of € 1.8 million for the initial phase only, as
agreed by the last IDB. Furthermore, the Group would like to suggest that
for implementing the second phase of security enhancement, the Secretariat
could find some other options of funding other than what had been
discussed during the last IDB session and continue undertaking
consultation with Member States.
3. The Group takes note the information submitted on the progresses
in the implementation of phase I of the security enhancements, reviewed in
Document PBC.21/11. On the matter, it request further information and
consultations with Member States.
Madame Chair,
1. In order to provide the Organisation with relevant financial
resources that may enable it to be more competent and efficient, the Group
encourages UNIDO to spare no efforts in reinforcing its cooperation with
all relevant stakeholders and potential specialized Agencies.
2. The Group calls upon the Secretariat to continue to be more
proactive in endeavours for funds mobilisation through voluntary
contribution and additional sources and is grateful to those Member States
who have continued to contribute generously in such efforts. We urge more
member states to offer as convenient support for the fund mobilisation
efforts of our Organisation.
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