STATEMENT BY THE DIRECTOR-GENERAL
Mr Chairman,
Distinguished Delegates and Observers,
Ladies and Gentlemen,
So much has happened since the Council last met less than a year ago. First of all, the major opening in the East: the falling of walls; the soaring of aspirations for freedom and fulfilment; the end - definitive we must hope, of the cold war; the reunification of the great German nation. Admittedly, these upheavals have also triggered considerable anxiety, particularly as far as the economy is concerned. The deficit to be absorbed is enormous; even in Europe, the spectre of food shortages has reappeared here and there, to the point where there is once again talk of emergency food aid in one of the most industrialized regions of the world. But this is only a bit of slag from that vast, volcanic outpouring of hope: hope for peace, for renewed cooperation between East |and West, and for greater freedom.
Unfortunately, no sooner had we drawn breath and begun to make plans and to count the resources we believed the end of the arms race would release for development, when fearsome new blazes flared up in other parts of the world. Once again, our hearts are seized with the fear of war. Are we, once more, to witness this terrible scourge, with its ghastly trail of death, devastation and untold suffering?
What is to become of our combined efforts to help every human being acquire that minimum of well-being and security without which dignity and personal fulfilment cannot exist? Is this task, so difficult and at times so laborious but pursued with the tenacity of hope, to be interrupted?
We may legitimately ask this question as the Organization celebrates its 45th birthday, for FAO's own situation mirrors that of the world at large. Never has there been so much to do and never have the prospects been so broad and stimulating; yet, never have we experienced such serious difficulties and never has FAO's operational potential been so threatened.
Hence the exceptional importance of this session of the Council and the very full agenda before you. At a time when we might well be tempted to let our emotions rule and be swayed by either anxiety or excessive optimism, the Organization needs the full wisdom of its Council to proceed| with a calm and clearheaded review of the situation and to see realistic solutions.
I shall not take up all the issues which are before you; I merely wish to state some facts and to share with you the reflections they inspire.
I must of course speak first of our most serious problem and greatest worry: the Organization's financial position.
As a result of accumulated delays in the payment of contributions, we did finally run out of cash, so for the first time ever I was forced to use the authority conferred on me by the Conference, to borrow. Prospects appeared increasingly bleak. Fortunately the outlook brightened with the arrival of some rather hopeful news. Firstly, one of our major contributors paid its contribution, albeit late; this payment allowed us to clear our debt (although not, of course, to avoid paying interest).
Secondly, as you know, our difficulties are largely, due to the substantial delays in payments by the Member Nation which is our largest contributor. It would now appear that the government of this country will be authorized to effect a major payment to meet at least part of its obligations for 1990 and perhaps its prior arrears as well.
Lastly, other Member Nations, particularly among the middle-income countries, are experiencing difficulties which have prevented them from paying their contributions for 1990 and some of their arrears, which add up to a considerable amount. Here too, recent developments justify a degree of optimism; I have reason to believe that the necessary efforts will be made gradually to reduce these arrears.
The cash flow crisis is far from over, however, and I do not need to point out that its impact on the implementation of our programmes continues. To conserve resources for the essential tasks we had deliberately put FAO on a strict diet and had pared down lower-priority activities. From one biennium to another, our programmes had increasingly more muscle than fat. I can say with a clear conscience that the Programme of Work approved by the Conference in 1989 had not the slightest trace of fat. We are unable to do all that our community of Member Nations expect of us because of the non-payment of contributions and our inability to draw upon the, full resources which the Conference voted for the execution of the approved programme.
You can well imagine the extremely complex task of a ship's captain forced to sail on a long voyage without ever topping up his tanks, lacking the necessary nautical instruments, and never able to count on a full crew: a paptain who has to stock up as best he can and call "dead ahead" rather than "full steam ahead". And yet, this is the very situation in which the Organization and I find ourselves.
This year, the route which the Conference had traced for me called for an inflow of some 279 million dollars. Three-quarters of the way through the voyage, that is to say, at the beginning of October, only half of the amount promised and due had been received despite repeated appeals to the defaulting Member Nations. The outstanding contributions for this year and prior arrears amounted to 272 million dollars, the equivalent of a total annual budget!
To make matters worse, these persistent appeals, combined with the constant need to take our bearings through a cloud of unkept promises and for continual exercise of judgement as to which activity to scale down and which to postpone, have sapped us of yet more energy.
Moreover, we are suffering from the consequences of the fall of the dollar, which for us represents a loss of several million. It would be trite for me to sa,y that it reduces our purchasing power; what worries me more is the fact that it reduces our ability to act. Each devaluated dollar earmarked for Headquarters or field activities has a correspondingly smaller operational impact. The consequences of this erosion of our currency of account are made clear to us every day in the Secretariat. Salaries and pensions are shrinking so fast that a true brain drain is taking place; staff members are leaving the Organisation early, when they are at the peak of their ability and experience and still have much to offer.
At the same time, certain agencies which are financed by member countries of the Organization but which are not subject to the same constraints as FAO, make attractive offers to our senior officers, and some of our best people have been lost as a result.
Under these conditions, it is all the more remarkable that the Organization has been able to head for the open sea rather than to have to hug the coastline. The daily minor miracles and devotion of my colleagues have made this feat possible.
Of course, there has been damage; loss of interest on our various earnings, delays in the distribution of certain documents and, I am sorry to say, the steady demoralization of staff whom the tight financial situation has deprived of support or compensation.
I can therefore only reiterate that FAO cannot accomplish its mission unless its Member Nations fulfil their primary obligation: to pay their contributions, of course, but also to pay them on time.
Alarming uncertainties hover over our field programmes, which are largely financed by UNDP. These uncertainties raise a number of fundamental questions for the Organization.
How could FAO ever have amassed and tested its vast reservoir of know-how, technical skills and experience in development without the constant daily contact with reality and practical action which comes from working in the field?
FAO-has only built up its network of access to the best international expertise in all its areas of competence because its special mission is to place this expertise at the service of over 130 countries.
Is FAO to exist outside the realm of reality, to be deprived of its life-giving operational activities, and to continue merely as an academic institution that nurtures and develops its expertise with no impact on the daily concrete problems of economic and social development which face the world?
This is a matter of serious concern to me. As you know, the ÛNDP is currently re-examining its arrangements for the reimbursement of support costs. The stated objective is to favour project execution by the governments themselves. FAO unconditionally supports the aim that governments themselves be responsible for their projects; this is in fact the ultimate goal of international technical cooperation. The danger, however, is that direct UNDP execution will replace the operational work of the agencies. There are already instances of this. Opting for national execution, whereas governments themselves would sometimes have referred implementation by the agencies is one example. This view, Mr Chairman, is shared by several heads of United Nations agencies, who echoed the concern I expressed during the meeting of the Administrative Committee on Co-ordination in New York. I speak on behalf of FAO, but my concern is shared by UNIDO, the United Nations and even ILO and Unesco. Another is invitations to tender which place the agencies in direct competition with external organizations and enterprises, which is contrary to normal practice within the United Nations system. Invitations to tender have been issued and we have been invited to participate in one of these. For those of you who are interested, we can distribute a copy this afternoon of this invitation which concerned a project in a country which I shall name here. I shall be pleased to circulate this invitation to tender which has just been issued through UNDP to those of you who would like to see it.
The UNDP Governing Council is to make a final decision on future support cost arrangements in June 1991. There are strong indications that this will result in a sharp reduction in support cost payments, particularly for FAO. Thus, for the period 1992-96, we can expect the volume of activities currently funded by UNDP to be halved, with a corresponding reduction in support cost payments to FAO (23 million dollars for 1990).
We cannot forget that these payments are now funding the posts of some 430 people serving UNDP-financed projects. What is to become of these people if the funds are reduced? They will either be kept on, in which case the cost of their salaries will then come under the regular budget, or they will have to be separated, in which case funds must be earmarked to cover separation payments. Since we do.not know exactly how far the UNDP funds are to be scaled back, we have no way of knowing how much to allocate in the regular budget to cover this contingency. This is one problem of concern to me in drawing up the 1992-93 budget.
I am confident that the governments who sit on UNDP's Governing Council will bear in mind the budgetary repercussions which their decisions will have on the programmes of the cooperating agencies, particularly on FAO's programmes, since FAO executes the largest single share of UNDP's projects. The representatives of these governments will be asked to compensate the FAO budget for any UNDP reimbursement shortfalls.
In the wake of the Review of Certain Aspects of FAO's Goals and Operations, the Conference made a number of important decisions. We shall be reporting next year to the Conference through the Council on what we have done to implement these decisions. However, given the priority I attach to this issue and in the interests of keeping the Member Nations informed, I have hastened matters and am now presenting to you a preliminary report on what we have done so far. The report intended for the Conference will be submitted in due time for review by the Council, next June.
One point must be mentioned here: we had explicitly stated that this implementation would entail additional costs to those included in the budget approved by the Conference, costs we had conservatively estimated at some 27 million dollars. Despite this, we did try to satisfy the Conference request that implementation of its conclusions be "gradual" without however jeopardizing the execution of our priority activities.
I have started the ball rolling on the priority items, within the limits of available resources, and proceeding by stages. Progress will have to be slow but I think we are now on the right track. I am fairly satisfied with what we have been able to accomplish, and so, moreover, is the Programme Committee. What counts now is that we have the opportunity to apply ourselves calmly and seriously to the job at hand as outlined by the Conference. The full implementation of the Conference's recommendations will hinge upon the financial position of the Organization, and particularly on how rapidly the arrears are paid.
Our internal difficulties must not distract us from our essential tasks, foremost among which is the review of the world food and agriculture situation. On the whole, the situation is somewhat better, although serious problems persist or have even worsened in some regions. Largely due to favourable weather in North America and the USSR, and a good monsoon in Asia, global output of staple foods increased substantially in 1990. For the first time in four years, cereal production will be sufficient to meet world consumption needs and even to allow a modest replenishment of stocks. But these stocks are really unsold surpluses. The easing of the cereal supply situation has naturally led to a sharp reduction in cereal prices, so that the cost of cereal imports to developing countries with severe balance-of-payment problems will be somewhat reduced.
The overall increase in world food supplies does however conceal some serious regional problems. Cereal production in Latin America has declined for three consecutive years. Consumption levels have been maintained so far by larger imports and stock draw-downs, but reserves have fallen to critically low levels. Given the deteriorating economic outlook for most countries in the region, the food supply situation gives rise to concern. In Africa, the food situation remains serious in a number of countries, particularly Sudan, Ethiopia, Angola, Mozambique and Liberia. The crop outlook is unfavourable in several Sahelian countries. Prospects for main crops in Sudan and parts of Ethiopia are poor for the second consecutive year; with stocks virtually depleted, serious food supply problems are expected to persist in 1991.
Concerning the world situation, we must not be fooled by the current improvement; reserve stocks are very low and food security could soon be threatened should acreage reductions coincide with unfavourable weather. Food supply developments will therefore have to be monitored very closely during the coming season. Furthermore, the economic situation of many developing countries makes access to food supplies a matter of increasing concern both at the national level and within the countries concerned.
The current malaise in world agriculture affairs is a striking portent of the likely implications should the Uruguay Round fail to achieve a full and ambitious package of results in December. World prices for many agricultural products have remained depressed or have tumbled sharply during the past year. Support and protection by the industrialized nations to their agriculture sectors has risen to an astonishingly high level now estimated at some 250 000 million dollars a year. Market access is plagued by restrictions and export markets are fiercely contested. The situation would deteriorate even further if the Uruguay Round were to end in failure.
With only a few weeks left before the close of negotiations, agreement has still not been reached on some of the essential components of a satisfactory package of measures, particularly those concerning agriculture. Notwithstanding the complexity of the issues which need to be resolved, this is surely a matter of regret. In the coming days, explicit and vigorous support will need to be given for the major objectives of these negotiations, namely substantial progressive reductions in agricultural support and protection. It is my hope that firm political will at the highest levels will be brought to bear to this effect.
While I need not reiterate FAO's continuing support to the Uruguay Round up to now I should still like to share with you some thoughts on ways in which FAO's wealth of experience might assist in achieving more orderly conditions of world agricultural trade in the future. First of all, FAO could play a fully supportive role in implementing the agreement on sanitary and plant protection measures which the conclusions of the Uruguay Round are expected to include. The technical work undertaken by FAO tender the International Plant Protection Convention and the Codex Alimentarius Commission would constitute a unique basis for this.
Thus, FAO's long years of experience in the field of agricultural commodities and trade can facilitate understanding of the major policy options and issues and technical problems which will impinge upon international markets.
Lastly, should the final package of results call for a review of the utilization, of food aid and of its attendant disciplines, I believe that FAO's tested experience and mechanisms, such as the Sub-Committee on Surplus Disposal, put the Organization in a position to make a major contribution.
As for forestry, the attention and interest of Member Nations, international organizations and non-governmental organizations are currently focused on the Tropical Forestry Action Plan. The Committee on Forestry has just devoted ample time to the Plan in its discussions, which provided a forum for the expression of a wide range of views. A number of proposals were put forward for the enhancement and reinforcement of activities, and for cooperation and coordination with Member Nations and the other agencies concerned. I attach vital importance to this issue and have taken several decisions since the Committee's last session. As I do not wish to jump ahead of your discussions, I have asked my colleague Mr Murray, the Assistant Director-General of the Forestry Department, to report in detail on these initiatives when you take up this item. I shall simply say that we will need the Council's guidance on this point as on many others. This also applies to the proposed International Convention on the Conservation and Development of Forests.
Concerning the International Undertaking on Plant Genetic Resources, I have only one point to make: I note with considerable interest that the United States has decided to become a member of the International Commission on Plant Genetic Resources. This is bound to strengthen and to enhance activities in this sphere.
The need to conserve plant genetic resources is only one aspect of the broader problem of conservation of the planet Earth. The Conference has attributed top priority to our work on environment and sustainable development. The job of coordinating this action between the various units of the Organization and the other agencies involved is an essential arid complex task. For this reason I decided to entrust it to Mr Mahler, one of FAO's most competent people in this domain; I have appointed him Special-. Adviser/ADG for Environment and Sustainable Development. The Council will have the opportunity to hear him speak during the discussion on Agenda Item 10.
For the first time a major international Conference is to focus on the crucial problem of nutrition. The conference will be organized jointly by FAO and WHO, and held in Rome in December 1992. Active preparations are under way; I have met with my colleague the Director-General of WHO on several occasions, and we are setting up the necessary mechanisms to coordinate our action and ensure cooperation with the other agencies involved. The Council, in examining this item of the agenda, will have the oportunity to hear my colleague Mr Dutia, the Assistant Director-General of the Economic and Social Policy Department, who will report on this question in greater detail.
I have tried to sketch a picture of the situation as it stands, with its shadows and its lights. The picture would be neither complete nor accurate if I were to leave out some of the signs of recovery, both inside and outside the Organization. In response to widespread demand for example, we have been able to fill some of the gaps that had arisen in our information programme, and have resumed the publication of our two reviews, Ceres and Unasylva.
I have also been able to fill a number of high-level vacant posts. The appointment of Mr Mahler was just mentioned, and I have also appointed several other Assistant Directors-General: Mr de Haen (Germany) to the Agriculture Department; Mr N'Daw (Mali) as the Regional Representative for Africa, and Mr Bukhari (Saudi Arabia) as the Regional Representative for the Near East.
The question of the possible adherence of regional economic integration organizations to FAO has already been discussed by the Council and Conference. I received a letter in late October announcing the decision of the Council of the European Communities to make an official request to amend the Constitution of FAO to allow the Community to become a member of the Organization. The Community apparently hopes to achieve member status during the Conference session to be held in November 1991, and is asking that negotiations be opened to this effect. Such a step undoubtedly raises a number of problems, and we will need appropriate guidance from the Council in this respect. In any case, the fact that the largest existing economic integration organization, which accords primary importance to the agriculture sector, is so interested in the work of FAO and so eager to take a more active part is to me a prime indication that our Organization is in good health.
At the beginning of my speech I touched on the matter of German reunification. This will undoubtedly stand in history as one df the major events of the final decade of this millennium. We wish to acclaim this event, which we, see as the harbinger of this great Country's increased participation in FAO's activities.
Gloom would be as out of place as blind optimism in these times of great hope and great peril. The right thing to do how is to look our problems squarely in the eye and confront them calmly and confidently. At this point in time the role and prestige of the United Nations system is visibly growing. As for FAO, although our joy in celebrating our 45th anniversary may be somewhat muted, there is still no reason to give way to discouragement. For my part, I shall hold steady at the helm and steer the Organization on the course which the Member Nations have set for me. To do this, I need the backing, wisdom and advice of the Council; I know I will receive them.
Thank you.
