Programming Arrangements for UNDP Regular Resources

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					 Programming Arrangements
for UNDP Regular Resources

Informal Consultations with the Executive Board
                  02 June 2005

               For Discussion
   Overview of Programming Arrangements

   TRAC-1 Calculation Methodology

   Midterm Recalculation

        Programming Arrangements

Sets the legal framework, as well as the principles
and parameters, for the distributions of UNDP core
programme resources.

Principles and Legal Framework

                     Decision 2002/18
    (Programming Arrangements for the period 2004-2007)

    Reaffirms principles of eligibility of all recipient countries
    Recognizes principles of progressivity, impartiality,
     transparency, and predictability of flow of resources
    Reconfirms importance of annual funding target of $1.1 billion
    Reconfirms TRAC distribution methodology
    Confirms that the amount of regular resources available for
     programming for any given year is equal to:
           Amount of regular income minus:
            •   Amount allocated for the biennial support budget
            •   Other amount set aside by the EB for other purposes

Programme resource allocation framework 2004-2007
Programme - Fixed Lines
   • Human Development Report (HDR)            $5.3
   • Office of Development Studies (ODS)         1.1
   • Economist Programme                         4.5
   • Development Support Services (DSS)          6.0
   • Support to Resident Coordinator            13.5
   • Evaluation                                   2.5
   • South-South Cooperation (formerly TCDC)      3.5
Subtotal – fixed lines                         $36.4

Programme - Variable Lines
   • TRAC 1.1.1                        47.3%
   • TRAC 1.1.2                        31.5
   • TRAC 1.1.3                         7.2
   • Regional programmes                9.0
   • Global programmes                  5.0
Subtotal – variable lines             100.0%

Target resource assignment from the core (TRAC)
TRAC 1.1.1
   • Assigned immediately to programme countries
   • Regional share determined by total TRAC 1.1.1 earmarkings for
     countries in the region

TRAC 1.1.2
   • Assigned to programme countries based on performance
   • Regional share is the same as TRAC 1.1.1
   • TRAC 1.1.2 assigned as a percentage of TRAC 1.1.1 (0 to 100%)

TRAC 1.1.3
  Facility was established with the view to provide the Administrator
  with a capacity to respond quickly and flexibly to the development
  needs of countries in special circumstances

                  TRAC-1 Methodology
Principles underlying the TRAC-1 distribution methodology

   •   Focus on low-income and least developed countries;

   •   Progressivity in favour of lower-income countries within the
       categories of, respectively, low-income and middle-income

   •   A gradual move to net contributor country (NCC) status for
       countries that achieve higher GNI levels.

                 TRAC-1 Methodology

  • Low Income Country (LIC) GNI per capita threshold: $900
    (67 countries)

  • Middle Income Country (MIC) GNI per capita range between
    $900 and $4700 (73 countries)

  • Net Contributor Country (NCC) GNI per capita threshold
    greater than $4700 (26 countries)

  • Least Developed Country (LDC) floor 60% of total resources

  • LIC resources range – between 85% to 91% of total resources

  • Floor Principle – protects country TRAC-1 from a drastic drop
    from increased GNI

  • Minimum TRAC – $350,000 per year country minimum and
    “cluster” minimum for multi-country offices
                  TRAC-1 Methodology
  Step 1: Calculate GNI per capita and population weights.
          Add an extra weight for LDCs and LICs
  Step 2: Determine the country’s basic share in the total
          resource pool
  Step 3: Make certain basic TRAC 1.1.1 does not go below
         floor mandated by EB
  Step 4: Make sure that calculated TRAC-1 above does not go
          below minimum TRAC-1

                  Midterm Recalculation

   •   Executive Board 2002/18 calls for a midterm recalculations of
   •   Initial calculation for the period 2004-2007 based on agreed
       distribution methodology using 2001 World Bank Atlas gross
       national income (GNI) per capita and population.
   •   The present recalculation is based on the 2003 World Bank
       Atlas gross national income (GNI) per capita and population.
   •   The recalculated TRAC-1 earmarkings will replace the initial
       TRAC-1 earmarkings for the remaining two years of the
       programming period (i.e., 2006/2007).

                  Midterm Recalculation
  •   First time a full comprehensive recalculation is done within a
      programming period.

  •   Based on the same methodology approved in decision

  •   Based on 2003 GNI per capita and population.

  •   Similar to the initial calculation, recalculation is based on $450
      million regular programme resources.

                   Midterm Recalculation

  •   A large number of countries reflect potential increases or decreases
      mainly because of a change in the GNI base from 2001 to 2003.
  •   In the past, intra-period adjustments were made based on the same
      GNI base year (i.e., 2001 GNI).
  •   New calculations were only done inter-period, where countries were
      allowed to get a lower TRAC-1 from one period to another.
  •   Countries moved between income categories:
         6 countries moved from LIC to MIC (Armenia, China, Djibouti,
          Honduras, Sri Lanka and Ukraine)
         1 country moved from MIC to LIC (Bolivia)
         1 country moved from NCC to MIC (Venezuela)
         3 countries became new NCCs (Croatia, Poland and Slovak

                       Midterm Recalculation

   Option 1 – based on full recalculation, considered both increases and

             Total of 101 changes.

             39 countries getting TRAC-1 increases (all LICs except 1 MIC).

             62 countries getting decreases (mostly MICs).

             $9.6 million TRAC-1 shifted to countries eligible for TRAC-1

             TRAC-1 increases went to countries with absolute GNI increases,
              decreases, or no GNI changes.

   Option 2 – derived directly from option 1, but only considers TRAC-1
    increases (net resources required is $8.2 million). All countries either
    maintained their initial TRAC-1 earmarkings or received TRAC-1

               Midterm Recalculation
Recommendation – Option 2

  Need to maintain principle of progressivity and
  predictability of programme resource flows, especially to
  low income countries.

United Nations Development Programme