WSIS: Financial Considerations
Resolution PLEN/7 (document
207) outlines the expectations for the Working Group of the Council on the
World Summit on the Information Society and the Secretary-General in preparing
for the Summit. It asks that a number of things be taken into account. Amongst
these are:
- The United Nations Millennium Development Goals
- ITU initiatives, in particular the Istanbul Action Plan and other relevant
resolutions adopted at WTDC-02
- The results of other relevant initiatives
It was on the nature of these other initiatives that the Plenary had to deal
with the first set of square brackets. Ten specific initiatives were listed,
ranging from APEC and the Marrakesh Declaration to OECD and the Okinawa
Declaration. The Chairman of the Working Group of the Plenary explained that the
reason for so many was because when the group hadn’t been able to agree on
which to include, she suggested they square bracket all of the initiatives
"they had in their heads". In Plenary, a number of delegations wanted
those brackets eliminated, however; Sweden noted that if they did so, editing
would still have to be done. It questioned if some of the initiatives were
initiatives at all (e.g. OECD). The Chairman asked that an attempt at redrafting
be made and, if a compromise is reached, to remove the brackets.
A second point of square bracket contention arose from the insertion of a
financial proviso by Committee 6. The Secretary-General is instructed to make
every effort in preparing for the Summit to assert the leading managerial role
of ITU and to strengthen cooperation with other UN organizations and projects
‘within available resources’.
The Secretary-General asked that consideration of the financial reality of
the Union be extended to other instructions within the resolution. These ask him
to ensure effective allocation of the financial resources for the preparations
for the Summit and to ensure the necessary support for the WSIS Executive
Secretariat. He said the proviso of ‘within available financial resources’
was needed to facilitate discussions with both the Bureaux and the High-Level
Summit Organizing Committee, as it would help him to clarify misperceptions they
might have on the resources available from ITU. Both Argentina and South Africa
supported this request. Switzerland asked if the phrase ‘available resources’
be related specifically to ITU budget or could it include other contributions
(such as human resources) from Member States.
The Chairman asked the delegations concerned, to meet with the Chairman of
the Working Group on the Plenary to discuss these matters and to propose wording
for the editorial committee.
Gender Mainstreaming — the Unit Debate Continues
Resolution 70 proposes giving priority to the incorporation of gender
policies in the management, staffing, and operation of ITU. It also instructs
Council to consider creating, within the ITU budget, a gender unit in the ITU
General Secretariat with senior full-time professional gender expertise and
full-time administrative support and for it to be fully operational before the
World Summit on the Information Society.
Germany expressed strong support for the principles of gender mainstreaming
and the need to deal with this important issue in all ITU ‘units’. However,
it also noted that close consideration must be given to the state of the Union’s
finances before creating such a unit. Denmark also expressed support for Germany’s
position. The Chairman then proposed that the square brackets around this
proposal remain until after consideration of the financial plan of the Union for
further discussion.
ITU Review and Reform — A Place for Sector Members
A delicate compromise that took weeks for Committee 5 to develop came close to falling apart. There had been agreement
on the need for a group of the Council to review the functions, structures,
working methods and procedures of ITU’s three sectors. It would then submit a
report to Council containing draft texts of related modifications to the
Constitution and Convention that could be used by Member States in preparing
proposals for the PP-06. However, the challenge from the beginning had been on
defining membership in the group (See Highlights
N° 16).
Resolution COM5/11 had arrived in Plenary with five different membership
options in square brackets. However, before discussion began, the Chairman said
he believed a compromise had finally been reached. The United
Kingdom presented the compromise on membership, which instructed Council to
establish a group open to Member States delegations. Member States and Sector
Members would be invited to submit contributions to the Group. However, as the
Chairman noted, Sector Members would only be able to make written contributions
and that they could not address the group directly.
It appeared at first that the compromise would be accepted even though
another United Kingdom delegate was the first to express disappointment with its
contents. He stated that in light of the recognition the resolution gives to the
growing importance of the role of Sector Members in some ITU activities, it didn’t
send the right message to Sector Members. He said however that he would accept
it with his reservations noted. Switzerland agreed, stating that if Sector
Members have only the right to make written contributions it was unlikely they’d
be anxious to make monetary contributions. The Chairman then asked how many
others took a similar position and at least 28 of them did.
The Secretary-General told the Chairman that from his position on the podium
it "seems you haven’t reached a compromise." Spain agreed adding
that it found the scenario rather "Kafkaesque", with one UK delegate
proposing the compromise and another expressing the disappointment that so many
others clearly shared. Uganda made a ringing statement in defense of the
efficiency of decisions taken by private Sector Members and expressed its belief
that any compromise should reflect this. Russia supported both Uganda and the
Secretary-General in calling for improvements to the text.
The Chairman then proposed a further compromise that the Council group be
open to Member States and Sector Members who would be given the opportunity to
make direct contributions; however, when it came to considering conclusions and
recommendations, this would be left to Member States. The United States sought
assurances that Member States would be free to make up their delegations as they
saw fit. The Chairman assured them they had the constitutional right to do so.
He then likened the relationship between Member States and Sector Members to
that of a rider and a horse. They need each other, but in a race the rider must
take charge if they hoped to win.
Strategic Plan for 2004-2007 Passes First Reading
The Strategic Plan, intended to cover the period 2003-2007, has been revised
to cover the period 2004-2007 in order to more closely align with the financial
plan. With only minor amendments, the Strategic Plan was adopted.
ITU in a Financial Dilemma:
Solidarity is Put to the Test
Today the Conference noted the alarming reduction in the
number of units pledged by Member States, which dropped by some 21.5 units as at
15 October (the deadline set by the Conference for countries to announce their
class of contribution). Taken at the value of CHF 315 000, this means a
shortfall of more than CHF 21 million. The draft Financial Plan, which took more
than two weeks to prepare because of the already huge gap between income and
expenditure foreseen for 2004-2007 is back to the drawing board at this eleventh
hour to address this new gap.
Many delegations, mostly from developing countries, expressed shock
and regret at the news. But that may not
be the end of the bad news, as Sector Members are constitutionally required to
make known the choice of the contributory unit three months after the end of
this Conference (meaning after 18 October 2002).
Germany pointed out that the Financial Plan presented to the
Plenary was not what Committee 6 had agreed upon. Agreeing with that view,
Venezuela added that the new plan had factored in Sector Member contributions,
while these would only be known three months from now. Morocco noted that the
agreement reached in Committee 6 to ensure that the Reserve Account should be
maintained at a level not less than 3 % of the budget was not reflected in the
plan. Furthermore, Morocco asked what would be the contingency plans if Sector
Member contributions were lower than what is assumed in the plan. What measures
or guidelines would this Conference give to the ITU Management and to the
Council?
Countries Speak Out On The Crisis
Switzerland stated that it could not accept ITU to have a
budget with a deficit. "We have had great difficulty arriving at a balanced
Financial Plan in Committee 6. We had reached a bottom limit in the exercise.
Now with nearly 22 contributory units less, we have to do this exercise over
again". South Africa expressing regret at the drastic reduction in the
level of contributions noted that with the exception of Djibouti and Guinea
Bissau, all African countries had maintained their contributory units at the
current level, with Uganda increasing its contribution. Argentina agreed with
Switzerland that the Financial Plan had to go back to the drawing board and be
reworked in Committee 6, adding that if contributions are lower than expected,
the Conference has to give guidelines to the Council on what to do. India
expressed great concern and regret that a number of countries had reduced their
contributions. With such a deficit and with the proviso that many activities be
carried out "within the existing financial limits", India noted it was
clear that none of them would take off. On the one hand, we are taking decisions
on new activities, and on the other, Member States are reducing their
contributions. The Indian delegation added that just like Africa, by and large,
countries in Asia did not reduce their contributions. Given this new deficit, it
would now mean that the laudable initiatives of bridging the digital divide, the
World Summit on the Information Society and others would remain on paper only.
"This is not the time to cutting down if we want to portray a credible
image to the world", he said.
Saudi Arabia urged delegations to exercise solidarity, adding
that Arab States had expressed their conviction in action of the importance of
ITU work, despite the difficult times. "We must make this sacrifice for ITU
to continue to exist and function. We hope that all countries, without any
exception, will be guided by the noble principle of solidarity between ITU
Member States", he also said.
Senegal remarked that the 22 odd drop in contributory units
was a threat to the Union’s integrity and suggested that countries that have
reduced their contributions be urged to go back on their decisions in the
interests of the Union. Nigeria also expressed concern in the drastic drop,
stating that what started as a rumour that if the level of the contributory unit
was increased some countries would reduce their contributions was now a reality.
Nigeria also recalled that the Secretary-General had already expressed the
concern that he would not function with further cuts. Nigeria expressed the hope
that countries that had reduced their contributions would give voluntary
contributions to help meet part of the shortfall so that ITU can deliver.
"We know everyone is facing difficulties. We want to reaffirm our support
for ITU activities".
Venezuela stated that while recognizing the deficit in the
financial plan, countries were sovereign and so their decisions should be
respected. "There is no question of making appeals to countries to change
their decisions. They have expressed their wish. They did not do so in a whim,
but because of the reality. We need to send a message to the world that we are
serious, the delegate said. Uganda, agreeing with these remarks said that
"may be ITU is beginning to live in the real world. May be it is a kick so
that people wake up. We should get back to work and change ITU."
The Islamic Republic of Iran expressed disappointment and
shock at the sad and bad news and added that while countries were sovereign,
they had also adopted many resolutions and new activities that were impossible
to implement in view of the current disappointing situation. He appealed to all
delegations to be consistent with what they said in their earlier statements.
Switzerland expressed regret that some European countries had
reduced their contributions and urged that their governments reconsider their
decisions. "ITU lives of this solidarity and a poor ITU cannot live.
Cutting contributions so substantially is not the way to the future. If you are
not happy with the way ITU operates there are other ways of expressing
disappointment. Switzerland always pays its way, and will continue to do so. If
you are not happy with the school of your village you cannot opt for paying only
half of your taxes", he concluded.
The Secretary-General said "We cannot balance the budget.
This Financial Plan cannot work because we are faced with a further cut that
also means more staff cuts. A dramatic restructuring would be needed. Click here
for the Secretary-General’s comments on the consequences of the financial
crisis on staff.
Delegations asked for absolutely clear guidelines from the
Conference for Committee 6 to review the Plan and balance the budget. Germany
and Morocco have been entrusted with the task of preparing a working document
for Committee 6 to consider in a night session today (Wednesday, 16 October from
18h00). This document should provide a new presentation of the tables in document
210, the need to balance income and expenditure, the need to consider
problems of Sector Member contributions and the question of the Reserve Account.
Committee 6 is back in session
Committee 6 met again in a special evening session in a bid to
find a way forward on the financial crisis. One of the compromises reached
during the discussion would require the Secretary-General to elaborate, with the
assistance of the Coordination Committee, a cost-reduction programme, including
a possible staff reduction programme. The staff reduction programme would be
made in consultation with the representatives of the Staff Council. The Council
would, among other things, ensure that in each biennial budget the income and
expenditure are balanced. Some proposed voluntary retirement in the form of a
golden handshake, but were reminded of the financial implications. The views of
the night session will be reflected in a draft decision that will be submitted
to the Plenary on Thursday.
The magic formula
Turning to the Financial Plan itself, a number of delegations
sought to know how the additional CHF 21 million was spread across the General
Secretariat and the three Sectors.
Explaining the formula for distributing the deficit, Germany
(one of the conveners of the small group set up in Plenary) explained that while
some delegations were of the opinion that stronger cuts should be made to the
General Secretariat and less to the Sectors, others felt that heavy cuts had
already been made to the General Secretariat. They may have been other options,
but there was no time, Germany explained.
The Netherlands remarked that had it known that there would be
an additional deficit, the Conference should have pushed for full cost-recovery
of TELECOM activities, which
would have brought in CHF 6 million. That delegation suggested that perhaps the
question of moving to the full use of six languages should be reviewed as it had
increased the budget by CHF 6.1 million. Italy
and Finland supported that view.
New Zealand said that this was the only balanced budget and
appealed to other delegations to consider adopting it as it reflected all the
conclusions that were reached in Committee 6. Supporting this view, Denmark
pointed out that it had proposed full cost-recovery for TELECOM
activities but this was not agreed. "Now we recognize, like New Zealand,
that for the first time we have a balanced budget and recommend that we adopt
it." A number of other countries,
including Norway and Portugal, supported this view, while others (Venezuela,
Mali and Niger in particular) were
still not satisfied with what was on the table. But a compromise was nonetheless
reached.
Tunisia reminded delegates that the
application of Decision 5 on the upper limit of the contributory unit would
produce an additional income from Member States of CHF 10 million, thus reducing
the gap in the Financial Plan to CHF 11 million. “We should be optimistic
about the future, as the situation might be brighter then”, the Tunisian
delegation said. This view was supported by a number of countries. But others
felt that it was better to apply the worst-case scenario given the uncertainty
in the industry. The United Kingdom remarked that at a time when the industry is
laying off much of its workforce, using CHF 330 000 as a basis for calculating
the second biennium would not be prudent and might send out the wrong message.
Summing up the discussion, the Chairman of Committee 6 said:
"Everyone leaves equally unhappy. Nobody is happy with the current
financial crisis. What we have before us is a balanced budget. Let us use the
tables that have been presented to us even though we feel uncomfortable, perhaps
this is the only viable approach at this stage."
Venezuela and Mali reserved their right to revisit the matter
in Plenary.
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