Minister of International Development Hilde F. Johnson

How can the UN deliver better at country level?

CEB retreat, Greentree,
30 October 2004

Secretary-General,
Heads of agencies,
Friends,
Ladies and gentlemen,

Thank you for inviting me to be a part of this retreat. It is an honour for me to speak to such a distinguished audience - an audience that has the power to set the course for the UN for many years to come.

As we look around our world at the start of the 21 ^st> century, we see that peace, security and development are more closely linked than ever before. We see that the UN is uniquely positioned to respond to these challenges, and we know that this body has no substitute.

My focus today will be on the long-term development challenges facing the UN and, in particular, the UN’s ability to assist in reaching the Millennium Development Goals. The very existence of these goals as a global framework for all actors, including the World Bank, the IMF, the WTO and bilateral donors, is in itself a victory for the UN. Their realisation primarily depends on the efforts of the developing countries. But it also depends on the international community’s ability to do two things: make sure ODA resources are sufficiently increased and spent wisely, and retain the UN as a key player in development.

There are indications that neither of the two is the reality right now.

• The World Bank is moving into traditional UN areas. IDA 14, the current replenishment, could give the World Bank more money for grants than the entire UN possesses. A US proposal is on the table to make IDA a 100 percent grant institution;
• New global financial mechanisms and funds are being set up in competition with UN agencies;
• OECD/DAC projections for ODA distribution in 2006 show that the bilaterals and the development banks will be the winners; the UN agencies are likely to be the losers.

My fear is that the organisation that gave us the MDGs could end up being marginalised.

The UN gave us the MDGs. The UN must spearhead their delivery.

The American writer Elbert Hubbard once said that

“Your friend is the (one) who knows all about you, and still likes you.”
(Elbert Hubbard, am.forfatter 1856-1915)

On behalf of my country, I am speaking to you today as someone “who likes you”. We are one of the United Nations’ best friends, as the fifth largest contributor to UN development activities in absolute terms, and by far the largest contributor per capita. We remain committed to the UN.

But we also worry that the UN’s role in development is being eroded.

Earlier this year, Norway and six other like-minded donors presented common proposals for a strengthened UN development system. This particular “group of seven” provides roughly half of the UN’s voluntary resources for development.

Preparations for today’s meeting were made in consultation with this group, and although I am speaking on behalf of my own country, I would like to emphasise that much of what I will say is shared by all seven.

What are the challenges?

What is the reality? In Tanzania, prior to the major donor reform there, the Minister of Finance had to supply almost 10 000 reports to donors every year and receive 2000 delegations, all of whom expected to meet top officials. In Zambia the finance minister had to handle around 1200 different donor accounts. In Uganda, only about 30 percent of all stand-alone donor projects in the health sector have been aligned with the country’s own health priorities. This is what I have frequently called the “donor circus”. Here, bilateral donors and IFIs are part of the same problem: too much focus on flags and visibility, and too little concern for the end result. The UN is no exception.

Far from it. These are the complaints we hear: Inflexible procedures. Cumbersome and fragmented decision-making. Competition. Overlap and duplication. Fragmentation.

This is why we – as donors - have decided to reform the way we work. We agreed on a set of principles in Rome (Rome Declaration on Harmonisation). Development policy has changed. Reality in the field is changing.

Most developing countries are now taking their rightful place in the driver’s seat, determining the course of their own development efforts. Donors are moving away from projects and service provision, to broader, sector-wide programs and budget support. Technical assistance is changing, and the bilateral expert in a line ministry is mostly a thing of the past. The quest to get more development for every dollar has led us to a reality where basket funding, joint operations and delegated partnerships are becoming the norm.

This is a reality everyone has to adapt to. The problem is that others adapt faster than the UN seems to be doing.

The UN risks being left on the sidelines, losing its relevance for much of the donor community. Even more troubling, where budget support becomes the dominant form of assistance, and rightly so, such as in Tanzania and Mozambique, the most important decisions are taken in a forum where the World Bank, the IMF, and bilateral donors are the primary dialogue partners. There the UN is barely present. This should be a major concern to us all.

How have you responded to this situation?

As we all know, reforms have started, but progress is slow.

In 2002, the Secretary-General’s “Agenda for further change” announced that by 2003, the UN agencies, funds and programs working in each country will be able to pool their resources, undertake joint programming, and establish common databases and knowledge networks. Now, in October 2004, this does not correspond to the picture conveyed by our field staff.

Let me give you some examples. One UN agency with a mere USD 35 million in development resources supports well over 100 countries, with an average of one and a half projects per country. Other agencies have projects down to a few thousand dollars in each country. Some keep a fully staffed country office to run one single project.

This indicates that the reforms are not on track.

In my view, it boils down to this:

• Too little of the UN resources reach the poor - too much is spent on administration. For example, the average cost of an agency country office may be around one million dollars a year. This could possibly mean than in some countries more money is spent on presence than on poverty reduction itself.
• UN resources are spread too thinly. For example, in Ethiopia UN support is divided between 200 different projects, most of them small.
• Resources are wasted - by duplication, by competition, by unwillingness to adjust. Is it rational that 11 UN agencies are involved in the same sector, basic social services, in Kenya?

So far, UN response to the Secretary-General’s reform proposals have been too little, too late. If we are to reach the MDGs, we need more, much more, and quickly. This is reflected in the background paper for this meeting. The reform proposals put forward for this and other meetings also indicate convergence with the views of lead UN-donors. We will follow closely how these proposals translate into concrete measures, and stand ready to channel our resources to those agencies where we see the greatest progress.

What can be done to improve your delivery at country level?

In the paper on UN reform by Norway and the other six like-minded donor countries, we focus on policy coherence, governance and funding, in addition to the issue we are debating today: country level reform. We hope that some of these thoughts will be reflected in the third UN reform package next year. The challenges must be met in several ways:

First and foremost, the reform measures that are already agreed must be implemented, fully and swiftly. These reforms are not up for re-negotiation at any step of the management ladder. This message must be brought home to everyone involved, from headquarters to country level.

Second, doing better what you are doing today will not suffice. What is needed is for the UN to participate in the new aid practices. This means more than internal streamlining, more than simplification of internal UN procedures. It means supporting and adjusting to the changes taking place in the field, harmonising UN efforts with those of other donors, sacrificing some immediate visibility for longer-term success.

Third, we need more commitment to country ownership - from all donors. Your representation must be flexible, adjusted to the country situation, decided in accordance with government priorities. The countries are in charge, we assist.

All UN staff should be represented through a joint UN office headed by a Resident Co-ordinator. Major program organisations should retain a strong field presence, but within an integrated structure – including experts in the areas of most interest to the government. Agencies with more limited operations should be represented by others. The resources, authority and accountability of the Resident Co-ordinator need to be strengthened. The RC must ensure cohesion and assist all agencies, including non-resident ones. We must make sure that there are sufficient resources and better clarification of roles to maximise the use of the Resident Co-ordinator.

Positive steps have been taken. Recently UNIDO and UNDP agreed that UNIDO will forgo new country offices and be represented by UNDP. WFP proposes field office closings in Latin America.

This is what we need more of - from you, and from all other donors.

And fourth, in doing this you must overcome the co-ordination problems inherent in the UN’s structure. Heads of specialised agencies must work actively to get the necessary approval from your own governing bodies to implement CEB decisions. This is imperative.

What should reforms lead to?

How can the UN reposition itself most effectively? The UN will probably remain a limited contributor in terms of filling the resource gap, but it could assume a much more central role in closing the capacity gap. This will be among the major constraints to reaching the MDGs. And there is much to gain from the new aid environment – also for the UN, whether through sector-wide approaches or pooling of resources.

The UN’s traditional position as a trusted, neutral partner to governments and the underprivileged is in itself an added value. But the UN must in turn trust the developing countries to be in charge, to set priorities, to make decisions, and assist them in implementation. How? In four ways:

• by advocacy and safeguarding the normative basis: The UN has a key role in advocating the MDGs and ensuring their inclusion in national plans. The UN must be the guardian of universal rights, linking development efforts to key human rights conventions. A rights-based approach to development can be implemented through policy dialogue, ensuring that countries stand by the commitments they have made.
• by building capacity: The UN must strengthen national partners’ own institutional capacity. This is often neglected, as attention has been focused primarily on UN implementation through stand-alone projects and project units. Technical assistance is essential to enable the poorest countries to reach the MDGs. And the UN is well positioned to provide technical support to sector-wide programs. Through better, more system-wide knowledge management, the UN should strengthen its ability to provide essential advice on best policies and practices, helping to build capacity for the countries’ own implementation of the MDGs. The UN should also stand ready to provide technical assistance in cases where it is not providing any financial assistance.
• by monitoring and reporting: Norway, like many other donors, is in the process of easing the reporting burden on partner countries by relying more on plurilateral and multilateral reporting on development results. With its mandate to assist with national reporting on the MDGs, the UN has an opportunity to play a major role in monitoring and reporting at country level.
• by assisting in implementation: Under certain circumstances, there may still be a need for assistance in service delivery. This will apply to countries with a weak institutional capacity, in particular post-conflict countries – where the UN has a key role to play - and to least developed countries. Today’s small, individual projects will not be sufficient. This assistance must take new forms through contractual arrangements with governments, where UN agencies take on an implementing role related to local-capacity building needs.

In each country, the UN presence must be tailored to local priorities and specific needs, offering added value to help the country reach its development goals. Here, all UN agencies must be willing to adjust accordingly. We hope that the new aid environment will enable national governments to define the desired UN presence in terms of normative capacity, technical assistance and monitoring and reporting. Here, a “package” of contractual agreements based solely on local needs could be the way forward. Focus should be on countries where the UN fills a void, not on countries where it does not provide added value. Again, concentrate your efforts where you are most needed.

The overarching challenge is to improve the UN’s competence and relevance. Performance is about people. Reform plans and promises will never amount to much unless the people behind them are truly committed. The UN’s ability to be a key player will depend on commitment and competence, not on mandates. Here the importance of leadership at all levels must not be underestimated.

This is also key to the implementation of further UN reforms. We strongly support the proposal in your background paper to develop an “Action Plan” at country level, with implementation plans and milestones towards 2010. This fits well with the commitment of the Development Committee of the World Bank recently to develop clear and specific commitments and timetables for the implementation of the Rome Declaration and the harmonisation agenda. We have also committed ourselves to develop indicators and benchmarks to monitor the participation of all partners at country level. This includes the UN.

What’s in it for you?

We understand that some agencies are afraid that less visibility will mean less funding. I don’t think so. It is the total output that counts - not the individual pieces. If we can manage to provide better aid that has greater impact, we will all enjoy the kind of visibility that matters in the long run. Reform will also bring increased relevance - and increased relevance will bring more resources.

We, the donors, with our short-sighted funding decisions and continued flag-waving, are part of the problem. But we are changing, and our message is this: We, the countries behind half of your resources, urge you to be in the forefront of UN reform. What we need to see is visible reforms. This is what will determine the future of many agencies - not the flags in the field.

Norway for its part will provide more predictable and adequate funding. We will consider multi-year commitments to those committed to reform, as will other like-minded donors. The agencies that are most effective and active in harmonisation will be the winners in future resource allocations.

Agreement on the MDGs was an outstanding achievement on the part of the UN. But it will be a true victory only when the goals are reached. When deadlines are kept, when targets are met, when the poor see progress in their own lives - that is when we - you! - have truly succeeded. We cannot afford to lose the UN as a key player in that effort. You gave us the MDGs. We need you to spearhead their delivery.

Thank you.