APPROVED BUT AUSTERE UNODC BUDGET PREVENTS UNODC FROM

UNCLAS UNVIE VIENNA 000558

SIPDIS


E.O. 12958:N/A
TAGS: SNAR KCOR KCRM PGOV UNCND
SUBJECT: APPROVED BUT AUSTERE UNODC BUDGET PREVENTS UNODC FROM
HONORING UN COMMITMENTS ON DRUGS, CRIME, CORRUPTION AND TERRORISM,
COSTA SAYS

REF: UNVIE 386


1. SUMMARY: In a starkly worded assessment, Executive Director
Antonio Costa indicated that the UN Office on Drugs and Crime
(UNODC) cannot honor the UN's commitments to fight drug control,
crime, corruption and terrorism -- together forming one of the
Secretary General's eight priorities for 2010-2011 -- under the
newly approved 2010-2011 budget. In his address to the December 1-4
Reconvened Sessions of UNODC's governing bodies, the UN Commissions
on Narcotic Drugs (CND) and Crime Prevention and Criminal Justice
(CCPCJ),Costa called Member State attention to the increasing
financial difficulties faced by the UN entity which serves as the
primary guardian of the UN's conventions against organized crime,
corruption, drugs and international terrorism. The U.S. delegation
(USDEL),led by UNVIE DCM and INL's John Sullivan, noted UNODC's
financial situation and its formulation of an austere budget and
cost-cutting measures, and showcased continued U.S. commitment to
the provision of voluntary contributions to support the work of
UNODC, particularly since UNODC's overall budget is slated to
decrease by seven percent in the coming biennium. USDEL partnered
with EU Member States to reestablish the Independent Evaluation Unit
(IEU),which UNODC had proposed to merge with its Strategic Planning
Unit (SPU). Instead, USDEL and other partners requested that UNODC
house the IEU within the Office of the Executive Director, rather
than with another entity of UNODC, in order to be consistent with UN
evaluation practices. UNODC agreed to reallocate existing UN
Regular Budget resources to fund the Chief of the IEU. Voluntary
resources will be used to finance additional IEU staffing
requirements and operational activities. END SUMMARY.

--------------
COMPOSITION
OF USDEL
--------------

2. UNVIE DCM and INL John Sullivan led USDEL to the Reconvened
Sessions of the CND and CCPCJ. The following officials also
comprised USDEL: UNVIE John Brandolino, INL Christine Cline, UNVIE
Adam Davis and INL Cassandra Stuart.

--------------
COSTA: MISMATCH BETWEEN HIGH
PRIORITIES AND LOW FUNDING
CREATES BUDGET SHORTFALLS
--------------

3. UNODC Executive Director Antonio Maria Costa delivered opening
remarks before the Reconvened Sessions, revisiting the financial
difficulties of the past two years while foreshadowing the
burgeoning financial crisis facing UNODC in 2010-2011. Costa
lamented that while the world places ever greater priority on
addressing the destabilizing effects drugs, crime, corruption and
terrorism has on economies, societies and security, member states,
are not adequately funding UNODC. Costa reported that despite the
fact that the Secretary-General's strategic framework for the period
2010-2011 identified drug control, crime prevention and combating
terrorism as one of the eight priorities of the UN, UNODC's budget
will shrink by seven percent in the biennium 2010-2011.


4. Specifically, voluntary contributions for UNODC core activities
are anticipated to fall by more than 25 percent, from 30 million USD
in 2008-2009 to approximately 22 million USD in 2010-2011.
Highlighting the eight million USD decline in General Purpose funds,
Costa declared that this 28 percent hit would have a
disproportionate effect on UNODC's ability to support, backstop and
otherwise manage the project-money used in the field. Costa
estimated that contributions to UNODC for project activities will
also fall from 408 million USD in 2008-2009 to 376 million USD in
2010-2011 -- a decline of almost 10 percent. Due to this decline in
funding, UNODC anticipates a negative impact on the delivery of its
program work and has undertaken austerity measures, which include
limiting staff contracts. Finally, Costa announced that UNODC will
continue to receive only 1 percent of overall UN Regular Budget
resources, despite the political support it receives from a broad
spectrum of Member States. The meagerness of UNODC's UN regular
budget share is illustrated, Costa asserted, by the fact that the 40
million USD decline in project-fund contributions is almost
commensurate with the entire regular budget line of the UNODC.


5. As a result of these cuts, staff morale has declined. To
demonstrate this impact, Costa introduced Mr. Stefano Berterame, the
UN Office in Vienna (UNOV) Staff Council President (employee
association). Mr. Berterame emphasized that staff retention will be
difficult with the increasing lack of job security felt by many
UNODC staff members. Thus far, UNODC has cut at least 29 positions
from its headquarters in Vienna and in offices around the world, and
closed or reduced the size of technical assistance offices in the
field. These cost-cutting measures are not final, and more staff
cuts could occur in the future. (COMMENT: This was the first time
that the UNOV Staff Council President had addressed the UNODC
governing bodies. His statement gave a personal face to the


declining budget numbers and confirm anecdotal indications of low
staff morale within UNODC. END COMMENT.)


6. Costa concluded that UNODC has sought, and implemented,
cost-cutting measures across the board, as well as efficiency gains
from more strategic and prioritized programming. The office
continues to strengthen partnerships with members of the UN family
and regional organizations in order to provide more effective
assistance and more sustainably share costs. But, Costa concluded,
UNODC is nevertheless left with an intractable dichotomy: ever
increasing international attention to the danger of drugs, crime and
corruption (not to mention terrorism) which translates into more and
more mandates from Member States, with decreasing voluntary
contributions and a static share of the UN Regular Budget. Thus,
Costa starkly concluded, the UNODC cannot honor the UN's commitments
to combat drug control, crime and terrorism prevention.

--------------
2010-2011 BUDGET
APPROVED
--------------

7. Member States of the CND and CCPCJ approved the UNODC
consolidated budget for the biennium 2010-2011. The budget
contains resource projections for the Fund of the UN International
Drug Control Program in the amount of 273 million USD, which
represents a decline from 312 million USD (12.5 percent) for the
biennium 2008-2009. Projections for the UN Crime Prevention and
Criminal Justice Fund stand at 152 million, which represents a
decline from 153 million USD for the biennium 2008-2009. Overall
staffing for UNODC will also decline from 196 posts to 170 posts for
the drug program and from 60 posts to 51 posts for the crime program
(representing an overall shrinkage of 13.6 percent). USDEL noted
Costa's stark assessment of the budget, expressed appreciation for
Costa's efforts at economy and pledged continued U.S. commitment to
the provision of voluntary funding to support the work of UNODC,
particularly in the form of unearmarked or soft earmarked
contributions in order to maintain UNODC's ability to execute its
core technical assistance programs.

--------------
US AND EU PULL
TRIGGER ON
CREATING INDEPENDENT
EVALUATION
--------------

8. USDEL partnered with EU Member States, notably Sweden and the
Netherlands, in order to re-establish the Independent Evaluation
Unit (IEU),which since its creation in 2003, has served as the unit
focused on assessing the impact of UNODC programs. UNODC, as a
result of the financial crises of the past two years, had proposed
to merge the IEU with its Strategic Planning Unit (SPU) (in charge
of project and program monitoring) as a cost saving measure.
However, this initiative was bitterly opposed by the EU, Norway and
Switzerland. Therefore, USDEL and other partners requested that
UNODC house the IEU separately from the SPU and within the Office of
the Executive Director, rather than in UNODC's organizational
structure, in order to be consistent with UN evaluation practices.


9. UNODC also agreed to reallocate existing UN Regular Budget
resources to fund the Chief of the IEU. Voluntary resources will be
used to finance additional IEU staffing requirements and operational
activities, which total 1.560 million USD for 2010-2011. UNODC
indicates that it currently has 739,000 USD available but will
require the remaining fund balance in order to ensure an effective
IEU for the coming biennium. To this end, the UK made an
announcement that it would provide 100,000 Pounds Sterling
(approximately 160,000 USD) toward the work of the IEU. Additional
EU and Norwegian contributions are anticipated.


10. The reconvened CND wrapped up with a short pro-forma event
where Iranian Ambassador Soltaniyeh was acclaimed as the next CND
Chairman. As agreed by IO and INL, the USDEL was represented fir
the session only by a second secretary.

--------------
COMMENT
--------------

11. While the reconvened sessions of the CND and CCPCJ did not
delve into substantive counter-drug and anti-crime issues, the
debate highlighted the detrimental impact that budget declines could
have on UNODC's ability to continue delivering effective technical
assistance in these areas. The re-establishment of the IEU could
provide a more systematic means to review and assess the
organization's continued ability to deliver assistance. At the same
time, it will be important for the United States to maintain and
hopefully increase the amount of general purpose and soft earmarked
contributions provided to UNODC in order to build a stable and
predictable operating base. We should also consider whether
providing the UNODC just one percent of the UN's Regular Budget


resources is the best way to advance our anti-drug, terrorism,
corruption and crime interests. Mission continues to believe that a
U.S. reevaluation of the UNODC's Regular Budget share is
appropriate, and we would welcome IO and USUN advice about the
advisability of such action. While Mission recognizes that such a
change in U.S. policy may present opportunity costs elsewhere, and
defer to our New York colleagues on this issue, Mission believes
that UNODC's ability to deliver results on important USG priorities
such as anti-crime and corruption treaty implementation, and
stemming the flow of Afghan heroin, will be jeopardized if we cannot
overcome the contradiction Costa highlighted between UNODC's mission
and resources (reftel). In order to help UNODC effectively deliver
the kind of normative and technical assistance that we have come to
expect, Mission encourages Washington to continue its reevaluation
of the manner and extent of our political and financial support.
UNVIE, meanwhile, will continue preaching the gospel of
streamlining, delayering, and priority setting among UNODC's diverse
programs. END COMMENT


DAVIES