The origin of this Supplement to the PWB 2006-07 lies in the request, made to me by the Council at its 128th Session in June, 2005, for an additional Programme of Work and Budget scenario at a higher real growth level of 9.25% for the biennium. It contains, however, a proposal for a wide-ranging reform of the Organization which goes well beyond a scenario for the use of additional resources. It thus calls for an explanation of why I am advancing it, and in particular, why now, at this stage of the budget approval process.
The simple answer is that much has happened since my proposals for the Summary Programme of Work and Budget were prepared early this year, indeed so much, and of such import, that I feel compelled to address the membership in this way.
The year so far has seen a remarkable succession of significant developments of high relevance to FAO. Some of them confirm that we are on the right track but must redouble our efforts, while others indicate that we are not doing nearly as well as we should be and must make corrections urgently.
Among the positive developments, I would note the substantive preparations for the UN’s Millennium +5 Summit, which have brought into even sharper focus the actions needed to achieve the internationally agreed goals, in particular, the overarching Millennium Development Goal (MDG) 1, which explicitly recognizes the interrelationship between hunger and poverty and the imperative of reducing both. This message was at the core of the two Summits FAO has held in the past decade and remains a central underpinning of our work: that it is acknowledged in the broader context of these global development goals is indeed a vindication of the Organization’s advocacy on behalf of the food insecure. But we cannot rest there—stating the goal was crucial, but it is far from being attained and the hardest part is still to come. The whole UN system, of which we are part, is called upon to respond.
Another encouraging trend is the recognition by the international community, most recently expressed in the Commission for Africa report and in the G8 Gleneagles Communiqué, of the importance of increasing aid and debt relief, strengthening support for Africa and addressing pressing global issues like climate change. The role of agriculture, forestry and fisheries in contributing to sustainable development has for too long been understated. Promoting increased investment in these sectors has been a major thrust of FAO’s advocacy over the past decade, in Quebec in 1995 on the occasion of the Organization’s 50th anniversary, in Monterrey in 2002, in Maputo in 2003 and at ECOSOC this year. As we approach FAO’s 60th anniversary, the signs are that the downward trend in resources has finally been arrested. But we must now seize the opportunity to target our efforts even more specifically towards helping our developing Members formulate strategies and policies to address their most pressing problems of poverty and food insecurity, and to mobilize resources internally and externally to implement programmes on a suitable scale.
Then there are the areas where we are not doing well. As one of the oldest Specialized Agencies, FAO must reflect seriously on the situation in which the whole UN system finds itself now, facing pressing calls for fundamental reform with a view to eliminating overlap and duplication in mandates and ensuring stronger system-wide coherence and effectiveness. The system is perceived as slow to adapt itself to the changes taking place in the wider development cooperation environment. The Specialized Agencies are often perceived as the slowest, as recent donor studies have indicated.
The urgent need for decisive action on FAO’s part became apparent to me in the context of discussions in the UN Chief Executives Board (CEB) on the Millennium Development Goals and the reform of the system. The initial conclusions of our review of FAO’s own contribution to the MDGs, covered in a discussion paper issued in May, indicated that FAO needed to “critically re-examine its own role within the system and articulate clearly how it will adapt to face the challenges ahead.” The review also noted that the focus of efforts to achieve the goals will be at the country level, and that FAO needs to determine where and how its capacities should be most effectively deployed at this level in the context of the UN system’s overall contribution to the process.
The preparation of this paper coincided with consideration of the outcome of the Independent Evaluation of FAO’s Decentralization. The recommendations of the evaluation did not entirely surprise us, as we were already trying to address some of the problems, but they were sobering in their frankness and far-reaching in their implications. It was clear that the decentralization process--one of the principal aspects of the reorganization in 1994 and further pursued in subsequent biennia--had still not produced the full benefits expected. In practice, the recommendations made by the Independent Evaluation needed to be reinforced in their execution by simultaneous changes in our Headquarters structure and by actions to bring about what the Council described as “a major shift in organizational culture.”
The evaluation had acknowledged that the context of shrinking resources in which decentralization had taken place had had major implications for its effectiveness. After five successive biennia of declining budgets, it was not easy to see how we could address the fundamental challenges through a cautious “business as usual” approach, and indeed the reaction of Members to our initial management response to the evaluation was a clear indication that such an approach was unsatisfactory.
At the time that these discussions were taking place, there was also a clear expression by some Members of concerns about our planning and programming process. In our efforts to meet past requests for greater transparency, we have greatly modernized and systematized our planning, implementation, monitoring and evaluation processes, and increased the amount of reliable data and detailed information which we can provide. Paradoxically, this may have also reinforced an impression of fragmentation in the programme and in resource allocations, and made it more difficult to discern the essence of what we are doing and why. In requesting streamlining and simplification, the Council was calling on us not only to reduce the volume of documentation but to arrive at a programme structure and form of presentation which would allow both Members and the Secretariat to focus their attention on major priorities.
The prospect of formulating a programme which could address these strongly expressed views of the Members, and significantly increase the Organization’s capacity to meet the expectations placed upon it, following the June Council’s request for a higher real growth scenario, was an invitation to “think outside the box”. My senior colleagues, whose input I requested on management challenges and programme priorities for FAO in the future, responded with commitment and sincerity. From my own reflections and theirs, the conclusion was inescapable. Change was essential and what was needed was not to add and subtract on the margins, but rather to re-engineer the Organization, both its programmes and its management structure.
One of the interesting aspects of this process of internal reflection was the conclusion that fundamental improvements in business processes and management systems were already greatly facilitated by the new technologies in which we had invested, but programme and organizational restructuring would both accelerate the streamlining process and allow us to address substantive challenges and opportunities coherently. From there, it was a short step to the conclusion that the proposal for re-engineering should not be postponed.
The General Rules of the Organization require the Director-General to prepare and submit a draft programme of work and budgetary proposals to the Conference in the light of the observations by the Programme and Finance Committees, by other appropriate organs of the Organization and by the Council. The draft PWB for 2006-2007, based on the summary which the Council considered, has been prepared and submitted according to the normal procedures. I have listened to the Members and to the staff, but ultimately I must exercise leadership in arbitrating among often conflicting views to present a vision. I have therefore taken the initiative to place the supplementary proposals in this document, before the governing bodies of the Organization. In doing so, I have gone beyond the request of the Council for a higher real growth budget proposal of 9.25% for the biennium, by demonstrating that my reform proposals are entirely feasible with a moderate budgetary increase of 2.5% real growth.
I do so with the conviction that what I am proposing can only be to the benefit of our Members. I seek neither to anticipate nor to pre-judge the outcome of other processes underway, most notably the Independent External Evaluation of the Organization which the Council is undertaking. In fact, I believe that implementation of my proposals now will create a more favourable context for such an evaluation.
The Organization’s long term strategies and objectives and its Medium Term Plan have been exhaustively discussed and agreed by the Members, and it is not my intent to address this larger framework, changes to which indeed would require much further in-depth examination and discussion. My concern now is with the 2006-2007 biennium, for which the Programme of Work and Budget is the business plan. Members entrust to the Director-General the responsibility of implementing a programme and managing the Organization’s resources. The thrust of my proposals is to achieve greater focus, effectiveness and efficiency in doing so. Implementation of these proposals beginning in 2006 will result in a more unified FAO Secretariat operating through a more coherent and decentralized structure, with a stronger sense of purpose and an enhanced capacity to implement the strategies and achieve the objectives which the Members have set for FAO, or will set in the future.
The rationale for and content of the two programme budget scenarios are set out in this document. In essence, the chapter and programme proposals involve three major interdisciplinary thrusts:
Sustainable Food and Agricultural Systems brings together Agriculture, Biosecurity, Nutrition, and Consumer Protection, Forestry, Fisheries and Aquaculture, and Natural Resources, Technology and Sustainable Development.
Knowledge Exchange, Policy and Advocacy brings together Economic and Social Development, Alliances and Rural Livelihoods and Knowledge Exchange, Communication and Capacity-Building.
Decentralization, UN Cooperation and Programme Delivery brings together Coordination and Decentralization, Outreach Programmes and the Technical Cooperation Programme.
The provisions for Corporate Governance, Management and Supervision Services, Contingencies, Capital Expenditure and Security Expenditure are shown as separate chapters.
Because it is through the organizational structure that we ensure accountability for the implementation of programmes, I am proposing a structure which corresponds closely to the chapters and programmes. This involves rebalancing among the departments and divisions at Headquarters, and extensive re-engineering of the decentralized structure, to achieve greater unity and a clear and mutually reinforcing allocation of functions among headquarters, regional, subregional and country offices. Improvements in efficiency and effectiveness will also be achieved through better use of the human resources of the Organization and increased recourse to the technical capacity present in developing member countries.
My proposed programme and organizational reforms are submitted to the governing bodies of the Organization for their consideration and decision. While more analysis would continue to refine the detailed resource allocations, I am confident that the proposed reforms could be accommodated within the 2.5% real growth resource level. The Higher Real Growth scenario would permit meeting capital needs to a greater extent, as well as increasing the resources for the Technical Cooperation Programme to the level of 17% of the total appropriation sought by Conference Resolution 9/89. Clearly, the pace and effectiveness of organizational transformation cannot be divorced from the 2006-07 budget level eventually to be approved by the Conference. However, it is my firm belief that the proposed reforms are timely, and worthy of Members’ support independently of the budget level to be decided by the Conference.
In proposing the resource levels for the chapters and programmes in the reform scenario, the budgetary increases for the highest priority areas have been maintained, in particular for capacity-building in the application of international regulatory frameworks, for genetic resources, and for the specific priorities identified within the fisheries and forestry programmes. The proportion of the overall resources for the decentralized network remains by and large as presently allocated to the existing network, and I would recall the conclusion of the Decentralization Evaluation that the decentralized action of FAO in direct service to member countries “would be worthy of an absolute budget increase without any reduction in the resources for normative work.”
I believe it will be clear even from this short overview that I am aiming for much more deliberate targeting of effort in our technical programmes to the major areas of concern to Members, for a more specific focus on our functions of knowledge exchange, policy assistance, capacity-building and advocacy, and for an approach that ensures full synergy with our UN partners within the broader context of the multilateral system, especially at country level. I advance these proposals based on my belief in FAO as a membership organization, in which each and every country is a stakeholder. We are obliged to be selective in applying our resources, and I am suggesting recourse to internationally accepted criteria for doing so, but this must not prejudice our broader responsibility for ensuring that all Members can participate in the life of the Organization and draw benefit from this participation according to their possibilities. To target our action to major priorities, and to locate that action at the level at which it can be most effectively implemented, is also to respect the fundamental principle that the Organization must serve all its Members, to the extent possible, according to their needs.
I am well aware of the time constraints, for the Members and the Secretariat. Indeed, we will need time to further refine these proposals on the basis of more in-depth consultations within the Secretariat on the details. We stand ready, however, to provide further clarification for the discussions among Members and further information as necessary between now and when the Conference meets.