EU Statement Programme and Budget Committee - Vienna

Agenda Items of the provisional agenda,
4. Financial situation of UNIDO, and
9. Financing of UNIDO programmes, including new initiatives for funds mobilisation.


Mr. President,

I have the honour to speak on behalf of the European Union and the acceding countries. The countries associated with the EU - Bulgaria, Romania, and Turkey associate themselves with this statement.

On this issue, I would like to point out that I speak for the last time, at the Programme and Budget Committee, as the Greek Presidency of the European Union, on behalf of fifteen member states of the European Union and acceding countries. In the 20th session of the Programme and Budget Committee, EU member states should number twenty five because as you know, in December 2002 it was agreed that ten more member States would join the EU in 2004 and on April 16, the Accession Agreement was signed in Athens.

At the outset, I would like to congratulate your Excellency on your election as Chairman of the nineteenth session of the Programme and Budget Committee of UNIDO as well as the other members of the Bureau.

The EU is looking forward with particular interest to the work to be carried out during this session and we would like to assure you of our active participation as well as of our full cooperation.

The EU notes with satisfaction that the financial situation of UNIDO is improving as a result of the efforts of the Director General, his staff and the member States.

The EU welcomes the increase in collection rate of contributions to 93.1%, the highest percentage since UNIDO became a specialised Agency and also notes the good progress in the collection rate for 2003. Despite this welcome progress, it notes, however, that there has been a small increase in the overall size of the outstanding contributions compared to 2001.

The EU requests all member states to pay their assessed contributions in full and on time, thus enabling UNIDO to execute its programme. It also calls on those member States that are in arrears to discharge their obligations, within the existing guidelines. Where it is clear that a country is unable to pay its full arrears in a single payment, the EU requests those member States to negotiate a payment plan as a last resort and as an exception to the general rule. The EU is pleased to see that the payment plans agreed with Ukraine and Azerbaijan are proceeding well and can serve as a model for other countries in future agreements.

The EU also requests States that are no longer members of UNIDO, to settle their arrears in full and without conditions, and in accordance with the existing guidelines pertaining to the participation to international organisations. The EU has taken note of the fact that the US Government is committed to fulfilling its financial obligations to UNIDO. The EU reiterates its support for the Director General to continue his discussions with the US Government, in order to find a solution to this problem, and would like to be kept informed on any new developments.

The EU thanks the Director General for the table in his report showing the incentives and disincentives that other international organisations use to encourage prompt payment of assessed contributions. Some of the incentives and disincentives schemes used in some international organisations suggest that there is an impact on the payment of contributions by member countries. The EU notes that the Director General has said on several occasions that the one incentive would be to increase the level of technical cooperation. The EU fully agrees with this view. However, the EU believes that the failure of a significant number of member States to meet their obligations makes it much more difficult for UNIDO to increase the level of voluntary contributions as potential partners may regard this as demonstrating a lack of commitment to the organisation. The EU therefore, requests the Secretariat to continue discussions with other international organisations and member States with the aim of developing an effective mechanism to encourage timely payment of assessed contributions and effectively disencourage non compliance with existing guidelines.

The EU thanks the Secretariat for the timely and successful implementation of the Financial Performance Control System (FPCS). The EU acknowledges in this respect the efforts made by the Secretariat to complete UNIDO's migration to a modern interactive computer system which would add more flexibility to day-to-day operations of UNIDO.

The EU has taken note of the recent decisions by the Director General to pursue the decentralisation process and transfer authority in preparing and executing Projects and Programmes from the Headquarters to the field, in certain regions, as a first step towards rationalising and integrating administrative procedures and making UNIDO's field work more efficient. The EU welcomes this and encourages the Secretariat to present to the upcoming IDB a comprehensive proposal on decentralisation and how to better integrate UNIDO's field structure including, amongst others ITPOs, NCPCs, ICPCs et al. The EU believes that the proposals should take into account existing initiatives and structures, such as, NEPAD, MERCOSUR, as well as the financial and human resources available to UNIDO. Decentralisation should also lead to a better integration of UNIDO programmes into national poverty reduction strategies as well as better co-operation within the UNDAF co-ordination mechanism.

The EU takes note with interest, that more than 50 % of UNIDO's technical cooperation activities are supposed to be financed by the environment Funds (GEF and the Montreal Protocol). Of itself, this should not be a concern for member States of UNIDO as both funds are used for activities closely related to industrial development. However, it does mean that a large part of UNIDO's funding is decided by governing bodies of other organisations. The EU trusts that the Secretariat's assessment of the funds likely to be available from GEF in particular, is realistic, as any significant shortfall will have serious consequences for the budget. The recent useful briefing by the Secretariat on GEF suggested the need for better coordination between members of UNIDO and their counterparts in GEF. The EU assures the Secretariat and other member States that it is following up on this issue and encourages other member States, particularly those on the GEF Council, to do the same.

The EU supports UNIDO's efforts to tap into resources available for industrial development activities from international Organisations as well as through increasing cooperation with private industries, and would like to ask the Secretariat to intensify its efforts for further diversification in this respect.

The EU welcomes the 10 % increase in TC approvals between 2002 and 2001, as highlighted in chapter V of the Annual Report. The increase in funding provided for trust funds and through other sources is also welcome.

The EU would also like to state that several EU countries have already contributed to the recently established trust funds on "enabling developing countries to participate in international trade" and "rural energy for productive use". We look forward to the successful implementation of projects funded under these trust funds and hope that this will encourage further contributions in these important areas of work.

Thank you, Mr. President.

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• EU Statement Programme and Budget Committee - Vienna (23/4/2003)
• EU Statement Programme and Budget Committee - Vienna (23/4/2003)