Geneva, March 1997
|Programme, Financial and Administrative Committee||PFA|
SIXTH ITEM ON THE AGENDA
Programme and Budget proposals for 1998-99
Presentation by the Director-General of the proposals
1. The Programme and Budget proposals for 1998-99 are intended to accurately reflect the strategy established by the Organization in the last few years and, in particular, the suggestions made in the Governing Body in the course of the budgetary process launched in March last year.
2. The permanent objectives of the ILO have been confirmed and refined since 1994. The Organization must be:
3. The Governing Body has also confirmed that it will pursue the strategic approach developed since 1992, in order to respond to the major challenges raised by political upheavals and the globalization of the world economy.
4. The first of these is to promote the advance of democracy in all member States, in particular those which have also embarked on the transition towards a market economy. The second is to provide support and assistance to member States and constituents in the fight against poverty, which constitutes a real affront to human dignity in many countries. The third concerns the protection of workers, including vulnerable categories such as women, children and migrant workers, in line with the ILO's primordial objective of improving conditions of work and life.
5. In order to achieve these objectives, the Organization will have to meet four major challenges during the 1998-99 biennium. These are:
6. The renewal of the ILO's standard-setting work will be a major focus of attention in the biennium 1998-99. This renewal process will be inspired by the conclusions to be reached by the Governing Body and the discussions that will take place in the Conference in 1997. The promotion of the ratification of the fundamental Conventions, the strengthening of the supervisory machinery and the adoption of a new instrument in the fight against child labour will be the key components of an overall strategy to improve the credibility and visibility of the Organization's standard-setting activity.
7. The second major challenge concerns child labour. The work being done by the Office in terms of research and development and the action taken by the IPEC Programme, backed by the will of decision-makers in government and employers' and workers' organizations, will be continued and expanded. Due account will be taken of the conclusions of the Amsterdam, Cartagena and Oslo meetings. (See figure 1.)
8. The third major challenge facing our Organization today, as it certainly will throughout the coming biennium, concerns the follow-up to the World Summit for Social Development in Copenhagen. This Summit revealed a high level of confidence in the Organization. The Office is already following up on the Copenhagen Summit through concrete action at the national level. In the coming biennium it will continue to provide assistance to its constituents in member States in the field of employment policy. Closer coordination will be called for between the different international organizations. In addition, a new International Small Enterprise Programme will be launched. (See figure 2.)
9. The fourth challenge of the coming biennium will be the follow-up to the World Conference in Beijing. An International Programme on More and Better Jobs for Women has been developed and will be launched during the next biennium. The ILO will also step up its activities in this area in response to requests from its constituents in various member States. (See figure 3.)
10. The increase in resources that are proposed to be allocated under the ordinary budget in the coming biennium to headquarters departments for child labour represents over 170 per cent; for employment strategies, over 46 per cent; and for activities for women, over 45 per cent. The work being done in these areas by regional departments and with extra-budgetary resources also accounts for a considerable increase in the resources available.
11. Lastly, several innovations are proposed for the biennium 1998-99. A total of 16 new action programmes are envisaged, taking account of the preferences expressed by the Governing Body in November. In addition, a Global Programme on Occupational Safety, Health and Environment will be implemented. A particular effort is also envisaged in the area of industrial relations.
12. Another innovation is the proposal to convene an ILO Social Forum as part of the strategy of promoting respect for fundamental workers' rights, as well as tripartism and dialogue among the social partners. The International Consultative Meeting concerning Follow-up to the World Social Summit is another new initiative that should be one of the highlights of the coming biennium, since it will provide an opportunity to review the results achieved at the national policy level.
13. Taking into account the views expressed by the Governing Body and the Conference in recent years, the distribution of resources by major sector of activity is proposed as follows:
Distribution of resources by sector of activity for the biennium 1998-99
|% of total budget||Proposals||% of total budget||US dollars||%|
|Policy-making bodies||92 493 834||15.96||81 101 988||14.54||-11 391 846||-12.32|
|General management||9 488 450||1.64||9 488 450||1.70||0||0.00|
|Technical programmes at headquarters||177 588 612||30.65||173 760 477||31.15||-3 828 135||-2.16|
|Regional services||145 623 827||25.13||147 368 292||26.42||1 744 465||1.20|
|Substantive and operational programmes||323 212 439||55.77||321 128 769||57.57||-2 083 670||-0.64|
|Service and support activities||132 145 378||22.80||125 959 801||22.58||-6 185 577||-4.68|
|Various||22 159 899||3.82||20 116 042||3.61||-2 043 857||-9.22|
|Total||579 500 000||557 795 050||-21 704 950||-3.75|
14. Over several biennia the budget share for the regions has been consistently increasing and the next biennium will be no exception. Their share in the ordinary budget rose by 1.78 per cent in real terms in 1996-97 in comparison to 1994-95 and the proposals for 1998-99 imply an increase of 1.20 per cent in real terms, in comparison to the biennium 1996-97. In contrast to the regional services which will enjoy increased resources, the other major sectors will see their resources reduced, some of them considerably, including policy-making bodies and service and support activities. The substantive and operational programmes will also have an increased share of the budget in comparison to 1996-97. It should be borne in mind that the Programme and Budget proposals for 1998-99 are 21,700,000 dollars lower than the budget approved for 1996-97. (See figure 9.)
15. Many of you have requested information on the way the programme and budget proposals are structured in relation to the Organization's major objectives as outlined above. The allocation of the resources proposed for the main technical programmes at headquarters and for those in the regions, based on these major objectives, means a choice must be made as to which programme corresponds to which major objective. While these choices were made with objectivity, they cannot be regarded as scientific. The aim of promoting employment and combating poverty represents 41 per cent of the ordinary budget resources allocated to the substantive and operational programmes. Almost 32 per cent of resources are allocated to the support of democracy and workers' rights. Lastly, proposals earmarked for the protection of workers represent almost 27 per cent of the total. (See figure 4.)
16. Examining the proposals for the regular budget and the expected extra-budgetary resources together allows a comparison to be made of the total resources for the pursuit of each of these major objectives. The principal portion of the extra-budgetary resources -- 63.5 per cent -- is allocated to activities in support of the major objective of employment and combating poverty. Support to democracy receives just under 9.5 per cent of extra-budgetary resources, while the major objective of worker protection receives a comparable percentage of extra-budgetary and ordinary budget resources. This comparison gives rise to a variety of interpretations. I will simply recall that extra-budgetary resources are used primarily for problems which the constituents in member States consider to be priority issues, and that they also reflect the preferences of donors in allocating resources. I will refrain from commenting on these comparisons which, I repeat, serve essentially as a broad indication, except to say that it appears legitimate for the Office to allocate almost 32 per cent of its ordinary budget resources from the sector of substantive and operational programmes to the objective of support to democracy and the respect of fundamental workers' rights, since these issues are truly at the heart of its mandate and a considerably lower proportion of extra-budgetary resources are allocated to this objective. (See figure 5.)
17. Movements in the dollar exchange rate led me to propose reductions in expenditure for 1996-97, some of which were taken up by the Governing Body in November 1995. I also committed myself at that time to ensure that an equivalent level of reductions would be found in my Programme and Budget proposals for 1998-99. (See figure 6.)
18. My proposals constitute a reduction of 3.75 per cent in programme terms in comparison to the 1996-97 Programme and Budget. Even allowing for adjustments to take inflation into account, the level of these proposals is even lower than in 1996-97. In other words, we are not only in a situation of negative real growth, but also in one of negative nominal growth at a constant rate of exchange. The Organization has always believed that it should protect itself against the hazards of exchange rate movements so as to avoid negative repercussions on the Organization's programmes. Today it must be said that the situation we find ourselves in is radically different to that of 1995 given that at last week's exchange rate my programme and budget proposals represent a reduction of over 16 per cent in United States dollars. The Office has never sought to benefit from exchange rate movements, nevertheless, the current favourable situation should now be mentioned as the Organization found itself to be negatively affected when the situation was so unfavourable two years ago.
19. These proposals, which constitute a reduction of 3.75 per cent, could not have been made if a whole series of reforms had not been undertaken and implemented in recent years. These reforms will be consolidated, and new reforms are now being proposed, some of which will be discussed during this session of the Governing Body. They are all aimed at making our Organization more relevant, more effective in the services it provides and also more efficient, by constantly improving productivity and through better cost control.
20. As regards the relevance of the ILO, two major reforms have been introduced. The first, an integral part of the active partnership policy, consisted of developing, with all the constituents at the national level, studies to establish country objectives. This reform not only served to bring the Organization closer to its constituents, but also to ensure that its activities correspond more exactly to their needs and priorities. The second reform is a much more recent one. It concerns the strategic planning process in the Office which has just been improved by the introduction of two new stages. The first was introduced in November, and gives the Governing Body the possibility to indicate its preferences regarding the programme and budget proposals, which are now under discussion. The other new stage will begin next November in the form of a discussion in the Governing Body to evaluate the implementation of the 1996-97 Programme and Budget during the first three terms of the biennium to draw conclusions useful for the preparation of the Preliminary consultation discussion to be held in March 1998. These two reforms will not only make our activities more relevant but will also improve the coherence between the priorities identified at the national level and those decided by the Governing Body at the international level.
21. It is perhaps in relation to the quality of services provided to constituents that the most progress will be seen in the next biennium, progress which will be particularly tangible. We propose using the potential of the Internet to the maximum to make the information we have at our disposal and the products we produce, directly and fully accessible to all constituents, in their countries and at their institutions. By the end of the next biennium the quality of the services the constituents will be receiving from the Office will be greatly increased and the dialogue with them greatly enriched.
22. Just as important are the reforms aimed at making the Organization more efficient, which are being pursued with considerable determination. I have just decided to apply throughout the Office a monitoring, evaluation and reporting system (MERS) to be integrated in the Office's strategic planning and programming process. Work is now under way on the methods of applying this system of management by objectives, which will be fully implemented as from the biennium 1998-99. This will certainly help to make ILO activities more transparent. In order to achieve productivity gains and cost reductions, the Office will continue to decentralize administrative and financial tasks and to make use of new technologies. The reforms (See figure 7.) introduced have already achieved tangible savings, as can be seen from the graph showing savings in various major programmes. The International Labour Conference, which in my programme and budget proposals accounts for $13 million, would have cost over $20 million today if reforms had not been made since 1990-91. If the same comparison is applied to internal administration costs, savings amounting to approximately $7.8 million have been achieved today in comparison with the biennium 1990-91. (See figure 8.)
23. The application of reforms and the overall improvement of the quality of services provided call for an active personnel policy. Numerous changes have been introduced here, in particular with regard to training. The Governing Body now has before it a set of proposed improvements concerning selection and recruitment procedures. Others currently being prepared cover:
24. These reforms were implemented thanks to the encouragement provided by the Governing Body and the decisions it has taken. They are also due in no small measure to the efforts made by the Office staff, without whom none of this would have been possible. They are the fruit of their labour, their imagination, their availability, and their willingness to adapt and be trained in the new tasks required of them in the light of the Organization's updated objectives.
Geneva, 10 March 1997.