PERSPECTIVES N o . 6 June 2007

Multilateral Development Cooperation in Perspective

Jonna Carlsson Center for African Studies • Göteborgs Universitet www.africastudies.gu.se Preface

The Centre for African Studies (CAS), which is part of the School of Global Studies at Göteborg University, has in recent years added international development cooperation to its sphere of teaching as well as research. A masters programme (“bredd-magister”) on African Studies with special emphasis on international development cooperation was launched in 2005/2006 and is now running for the second time in 2006/07. A guest professor has been recruited. As part of the Bologna Process the programme will be integrated in the joint masters programme of global studies from 2007/08.

The second year of the programme has now successfully been completed and the second batch of students graduated in June 2007. During the period up to date it has been established that teaching materials with special relevance to Swedish and European development policies are not readily available to the extent that is required. At the same time the students have produced a number of good essays and reports within different fields. To fill the gap we at CAS have decided to produce a series of smaller publications called “Perspectives on….”. Some of them, will after an introduction to the subject by some of the teachers of CAS, include relevant articles on the subject and comments made by masters students at the Centre for African Studies at Göteborg University. Others will include more in depth original material. We plan to publish most of the material in English but might also publish some material which we have readily accessible in Swedish. The idea is to publish these Perspectives on the CAS Website and if necessary to up-date them yearly. If there is a demand we might also publish a small number of hard copies.

For preparing this Perspective support has been given by the Multilateral Department of the Swedish Ministry of Foreign Affairs and the Swedish Agency for Development Evaluation (SADEV) for which we are very grateful.

Lennart Wohlgemuth Guest Professor Centre for African Studies Göteborg University Multilateral development cooperation in perspective Jonna Carlsson

CONTENTS

PREFACE ...... 1 LIST OF ABBREVIATIONS...... 4 1 INTRODUCTION...... 5 1.2 DEVELOPMENT OF MULTILATERAL DEVELOPMENT COOPERATION – A BACKGROUND ...... 6 1.2.1 The (UN)...... 6 1.2.2 The Bretton Woods institutions – The International Monetary Fund (IMF) and the International Bank for Reconstruction and Development (IBRD)...... 7 1.2.3 The Regional Development Banks (RDBs) ...... 9 1.3.1 Arguments for multilateral development cooperation ...... 10 1.4 ALTERNATIVE MULTILATERAL FUNDING...... 11 1.5 OUTLINE OF THE PAPER ...... 12 2. THE ...... 13 2.1 GENERAL ASSEMBLY ...... 15 2.2 THE SECURITY COUNCIL ...... 17 2.3 ...... 19 2.4 THE ECONOMIC AND SOCIAL COUNCIL (ECOSOC) ...... 20 2.5 REGIONAL COMMISSIONS...... 21 2.6 SECRETARIAT...... 21 2.7 SECRETARY GENERAL...... 24 2.8 THE INTERNATIONAL COURT OF JUSTICE (ICJ) ...... 24 2.9 THE TRUSTEESHIP COUNCIL...... 25 3. UNITED NATIONS WITHIN THE FIELD OF INTERNATIONAL DEVELOPMENT COOPERATION - FUNDS, PROGRAMMES, SPECIALISED AGENCIES AND OTHER RELATED UN ORGANISATIONS...... 26 3.1 UN SPECIALISED AGENCIES...... 26 3.2 FUNDS AND PROGRAMMES...... 27 3.3 RESEARCH AND TRAINING INSTITUTES ...... 28 4. UN ORGANS WITHIN THE FIELD OF DEVELOPMENT COOPERATION – SOME EXAMPLES 30 4.1 COORDINATION WITHIN THE FIELD OF DEVELOPMENT COOPERATION ...... 30 4.2 EXAMPLE OF A PROGRAMME – UNITED NATIONS DEVELOPMENT PROGRAMME (UNDP) ...... 31 4.3 UNITED NATIONS HIGH COMMISSIONER FOR REFUGEES (UNHCR) – A HUMANITARIAN ORGANISATION ... 34 4.4 EXAMPLE OF A SPECIALISED AGENCY – WORLD HEALTH ORGANISATION (WHO) ...... 36 4.4.1 WHO as a norm setter ...... 38 4.5 EXAMPLE OF AN OFFICE UNDER THE SECRETARIAT – OFFICE FOR THE COORDINATION OF HUMANITARIAN AFFAIRS (OCHA) ...... 38 5. MULTILATERAL DEVELOPMENT BANKS...... 40 5.1 THE GROUP...... 40 5.1.1 Governance...... 42 5.1.2 Financing and replenishment ...... 42 5.2 REGIONAL DEVELOPMENT BANKS ...... 45 5.3 AFRICAN DEVELOPMENT BANK (AFDB) – AN EXAMPLE...... 46 6. INTERNATIONAL MONETARY FUND (IMF)...... 47 6.1 THE STRUCTURE OF THE IMF ...... 47 6.2 FINANCING ...... 48 6.3 COOPERATION BETWEEN THE BRETTON WOODS INSTITUTIONS ...... 49 7. SWEDEN AND MULTILATERAL DEVELOPMENT COOPERATION...... 51 7.1 ORGANISATION AND MANAGEMENT OF SWEDISH DEVELOPMENT COOPERATION ...... 53 7.2 THE UNITED NATIONS SYSTEM AND SWEDEN...... 54 7.2.1 Sweden and multi- bilateral development cooperation ...... 56 7.3 THE AND SWEDEN ...... 57 2

Multilateral development cooperation in perspective Jonna Carlsson

7.4 THE REGIONAL DEVELOPMENT BANKS AND SWEDEN ...... 58 8. THE WAY FORWARD ...... 59 8.1 UN REFORM PROPOSALS – A BACKGROUND ...... 59 8.2 GOVERNANCE OF THE UN SYSTEM...... 60 8.3 NORMATIVE VERSUS OPERATIVE...... 61 8.4 EARMARKED FUNDING TO UN SYSTEM ...... 61 8.5 THE INTERNATIONAL FINANCIAL INSTITUTIONS (IFIS) ...... 62 8.6 GOVERNANCE OF THE IFIS ...... 63 8.7 EFFICIENCY VERSUS LEGITIMACY...... 63 REFERENCES...... 65

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List of Abbreviations

AfDB African Development bank AsDB Asian Development Bank BWI Bretton Woods Institutions CCA Common Country Assessment DDA Department for Disarmament Affairs DESA Department of Economic and Social Affairs DM Department of Management DPA Department of Political Affairs DPI Department of Public Information DPKO Department of Peacekeeping Operations ECOSOC Economic and Social Council EPTA Program of Technical Assistance GATT General Agreement on Tariffs and IASC Inter-Agency Standing Committee IBRD International Bank for Reconstruction and Development ICJ International Court of Justice IDA International Development Association IDB Inter-American Development Bank IDP Internally Displaced Persons IFC the International Finance Corporation IFIs International Financial Institutions IMF International Monetary Fund ITO International Trade Organisation MDGs Millennium Development Goals MIGA Multilateral Investment Guarantee Agency MYFF Multi-Year Funding Framework OCHA Office for the Coordination of Humanitarian Affairs OIOS Office of Internal Oversight Services OLA Office of Legal Affairs OPEC Organisation for Petroleum Export Countries RDB Regional Development Bank SAP Programmes SIDA Swedish International Development Agency UNDAF United Nations Development Assistance Framework UNDG United Nations Development Group UNDP United Nations Development Programme UNHCR United Nations High Commissioner for Refugees WB World Bank WHO World Health Organisation

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1 Introduction

The growth in the number of multilateral development institutions over the past three decades provides some evidence of the continued demand for what the multilateral organisations offer, as does the fact that donors continue to see merit in directing a substantial proportion of Official Development Assistance (ODA) budgets to support the work of multilateral organisations. As table one below shows, the DAC countries’ contributions to multilateral organisations have increased six-fold from the early 1970s to 2005.

Table 1. DAC countries’ contributions to multilateral organisations in US million

24000

19000

total contribution in US million 14000 dollars by DAC countries to multi-organisations

9000

4000 1971 1980 1989 2005

Source DAC

According to the Development Assistance Committee (DAC)—the principal body through which the OECD deals with issues related to development cooperation—aid contributions qualify as multilateral assistance only if:

• They are made to an international institution whose members are governments and who conduct all or a significant part of their activities in favour of developing (or transition) countries. • Those contributions are pooled with other amounts received so that they lose their identity and become an integral part of the institution’s financial assets. • The pooled contributions are disbursed at the institution’s discretion.1

1 DAC, http://www.oecd.org/glossary/0,2586,en_2649_33721_1965693_1_1_1_1,00.html#1965565

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Any ODA that does not fulfil these criteria is classified as bilateral assistance. This includes multi-bilateral (multi-bi) assistance which implies, voluntary contributions from bilateral donors to a multilateral agency, supplementary to their core contributions

Multilateral aid is channelled through a large number of institutions. The principal categories are:

• United Nations agencies including the United Nations Development Programme (UNDP), the United Nations Children’s Fund (UNICEF), (WFP), and United Nations High Commissioner for Refugees (UNHCR). • Multilateral development banks: the World Bank Group and the four regional development banks • European Union, which includes the European Development Fund (EDF) as well as development activities financed from the European Commission’s own budget. In DAC statistics, these are notionally reallocated back to each member state on a pro rata basis.

This paper will include an overview of the United Nations system and the multilateral development banks but not the EU. Although the IMF is not a development institution, it will be considered in this paper because its activities are of great importance for developing countries, it cooperates closely with the World Bank and, in addition to its ordinary activities, it supplies some concessional loans that are partly financed with development assistance.

1.2 Development of multilateral development cooperation – a background

The institutional framework of multilateral development cooperation has their roots in the planning for a new economic, social and peaceful order, which took place during the last phase of II.

1.2.1 The United Nations (UN)

The United Nations was founded as a successor to the , which was widely considered to have been ineffective in its role as an international governing body, primarily in that it had been unable to prevent World War II. Thus the UN was founded by the victorious allied powers in the hope that it would act to intervene in conflicts between nations and thereby avoid war. The organisation’s structure still reflects in many ways the circumstances of its founding.

On 25 April 1945 delegates from fifty countries in San Francisco gathered to sign the UN Charter and the UN came into formal existence on 24 October 1945, after the Charter had been ratified by the five permanent members of the Security Council—the Republic of China, France, the , the United Kingdom, and the —and by a majority of the 46 other signatories.2

2 The UN Charter, http://www.un.org/aboutun/charter/ 6

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The UN’s significant influence on international politics cannot be ignored. The main goal of the UN’s founders was to avoid a third world war and, in that respect, the organisation has succeeded. The UN has also achieved considerable prominence in the social arena, fostering , economic development, decolonisation, health and education.

The UN has been involved, in one way or another, in most major war and international crisis since its creation. It authorised the international coalitions that fought the Korean War (1950- 1953) and the Persian Gulf War of 1991. A UN resolution created the state of Israel in 1948, and the UN has been both a forum for debate and an active mediator in the Arab-Israeli conflict.3

In some cases, the UN has failed to muster support for a force to intervene in a violent conflict. For example, lacking support for intervention from UN member nations, the UN failed to stop the 1994 genocide in Rwanda that killed hundreds of thousands of civilians. In other cases, great powers such as the United States have taken action on their own when they could not get the UN to grant the authority they wished. For instance, in 2003 the United States sought but did not receive explicit Security Council approval for military action against Iraq. The United States nevertheless led an invasion of Iraq, inviting the UN to play a role in post-war humanitarian assistance and in running elections for a new government.

Although constantly challenged, the UN remains the only forum where all the nations of the world can gather to discuss pressing issues of peace and security. Arguably, the UN’s greatest asset remains its ability to speak as the world’s voice, offering legitimacy and guidance on the paths nations follow to solve their problems. Despite the challenges it faces, the UN is likely to play an increasingly central role in international politics in the coming decades.

1.2.2 The Bretton Woods institutions – The International Monetary Fund (IMF) and the International Bank for Reconstruction and Development (IBRD)

In 1944, policy makers gathered at Bretton Woods in the United States to consider how to resolve two very serious problems. Firstly, they needed to ensure the financial disaster that was the of the 1930s would not recur. In other words, they had to find ways to ensure a stable global and an open world trading system. Secondly, they needed to rebuild the war-torn economies of Europe. The stormy economic conditions during the time between the two world wars were seen as one of the key reasons for the outbreak of the Second World War. The fact that leading nations had protected their own trade from international competitors worsened the during the 1930s and also led to other serious conflicts. The powers of the West wanted to avoid another world war in the future. It was therefore seen as an urgent task to create rules and procedures for international economic cooperation and organisations that would oversee these rules.

At Bretton Woods, the International Monetary Fund (IMF) was created as one of the new pillars to oversee the new economic cooperation. It was given the task of overseeing the mechanism and the international payment system, of acting as the main source of liquidity to facilitate trade and to monitor national economic policies with a view to avoiding policies in one country that would unduly prejudice others. The International Bank

3 About the UN History, http://www.un.org/aboutun/achieve.htm 7

Multilateral development cooperation in perspective Jonna Carlsson for Reconstruction and Development (IBRD) as created to facilitate private investment and reconstruction in Europe and . IBRD was also charged with assisting development in other countries, a mandate that later became the main reason for its existence. At the same time, the work on the negotiation of an International Trade Organisation (ITO) was taken up. However, the ITO agreement was never ratified by the US. Nevertheless, the General Agreement on Tariffs and Trade (GATT) was signed in 1947 and became a new forum for negotiations on trade liberalisation.

It was also agreed at the conference that the value of all countries’ currencies would be fixed at a certain value. They became fixed to the US , and the US government promised to convert all dollars to at $35 per ounce.4 In other words, exchange rates were anchored to a dollar-. This was called the “”. The system required that any country wanting to change the value of its currency had to apply to the IMF for permission. The result was very stable relative international exchange rates.

The 1944 plans for the world economy were, however, soon postponed when in 1945 the US made its first priority the containment of the Soviet Union. Fearing the rise of communism in war-ravaged Europe, the US took a far more direct role than planned in reconstructing Europe and managing the world economy. The US announced the in 1947 which directed massive financial aid to Europe and permitted the US to set conditions upon this aid.

By the time the IMF, the IBRD and the GATT began to function in the 1950s, they were distinctively Western bloc organisations which were heavily dependent on US funding. However, US support for the Bretton Woods system began to change when weaknesses emerged in the US economy. After 1965 the US expanded its costly military involvement in Vietnam and also began spending more money on public education and urban redevelopment programmes in the US (President Johnson’s “” programmes). The US embarked on this spending spree without raising taxes.5 The damage was dramatic. As prices rose within the US economy, the competitiveness of US goods and services in the world economy dropped. Likewise, confidence in the US dollar dropped. Firms and countries turned away from the dollar, and the capacity of the US to back its currency with gold was questioned.

Meanwhile, other countries in the world economy were enhancing their positions. European allies were benefiting from the deepening economic integration in Europe. By the late 1960s, the development of the European Economic Community provided a springboard for European policymakers to diverge from US positions, such as over NATO military exercises and support for the gold standard.6 In Asia, the phenomenal success of export-led growth in Japan and in newly industrialising countries such as South Korea and Taiwan created new challenges to US trade competitiveness and led to a new agenda for trade negotiations.

In the face of these pressures, in 1971 the US changed the rules of the international monetary system. The government announced that it would no longer convert dollars to gold at US$35 per ounce and that it was imposing a ten per cent surcharge on import duties. Thus the Bretton Woods System officially came to an end with the “Jamaica” amendments to the IMF Articles

4 Woods, Ngaire, ‘International ’ in Baylis, John and Smith Steve (eds) of World Politics: an introduction to international relations, Oxford and New York, Oxford University Press, 2001 second edition, p. 280. 5 Ibid., p. 281. 6 Ibid. 8

Multilateral development cooperation in perspective Jonna Carlsson of Agreement in 1976, which instituted a non-system of floating exchange rates.7 Thus the role of the IMF was left unclear.

In the 1970s, the global period of high growth after the Second World War came to an abrupt end, leaving in its wake very high . Further compounding the problem, in 1973 a group of oil exporting countries raised the price of crude oil. The price of oil rose about 300 per cent almost overnight.8 OPEC nations experienced a huge increase in capital inflow due entirely to earnings from high oil exports, while non-oil producing nations experienced an increase in capital outflow as the cost of a crucial import quadrupled.

The widespread recessions in developed nations, caused in part by the oil shocks, made investing in developing nations very attractive for international banks awash with petrodollars. Furthermore, oil-importing nations increasingly needed capital, in part to finance the external deficits associated with oil-inflation. This so called program allowed less developed nations to purchase oil even as its price skyrocketed.9

In August 1982, Mexico stunned the financial world by declaring that it could no longer continue to repay its foreign debt. Not long after Mexico’s declaration came similar announcements from other parts of the developing world. The IMF, together with the World Bank, was given a leading role to coordinate attempts to combat the debt crisis. The IMF and the World Bank required debtor countries to implement so called Structural Adjustment Programmes which were intended to stimulate the supply side of the economy and overcome difficulties by liberalisation and reduced state intervention.10

1.2.3 The Regional Development Banks (RDBs)

The Regional Development Banks (RDBs) were created during the 1950s and 1960s with an understanding that whilst there were development challenges that needed to be tackled globally, there were issues that were more effectively dealt with at the regional level.

The RDBs have a unique character – a combination of development and finance institution. The oldest regional bank is the Inter-American development Bank (IDB), formed in 1959. In 1963 the African Development Bank was formed (AfDB), and in 1966 the Asian Development Bank (AsDB). The youngest of these banks is the European Bank for Reconstruction and Development, founded in 1991.

These institutions operate along similar lines as the World Bank, with special development funds financing projects and programmes in their respective regional borrowing member countries. The RDBs and the World Bank complement each other in the system of international financial institutions. In this framework the RDBs have advantages, such as the following:

• The majority of the shares in the RDBs are held by the regional members. This “leadership” gives rise to other forms of dialogue. A well performing regional bank

7 Ibid 8 Ibid., p. 282. 9 Ibid 10 Ibid 9

Multilateral development cooperation in perspective Jonna Carlsson

with which the member states can identify has quite different possibilities in terms of policies, projects and programmes than a less regionally integrated bank in which the “external” partners are more dominant. • Regional institutions may be better able to take on the role of a catalyst in the achievement of development objectives. The lending conditions set by the RDBs may be perceived differently from the conditions imposed by the classic donor countries, particularly as most staff members usually come from the region concerned. • By taking on the conceptual leadership in the formulation of regional responses to global structural change in the productive sector and to regional crises the RDBs are able to play a developmentally sustainable role.

1.3.1 Arguments for multilateral development cooperation

Some of the major arguments for channelling aid through multilateral organisations are as follows11:

• The developing countries can influence the use and modalities of multilateral aid through their participation in the decision-making bodies of the international organisations. • The UN System has a universal mandate which means all member states in need are entitled to assistance. • Multilateral agencies, particularly the development banks, have massive resources to spend on development. • The developing countries can avoid, to a greater extent than in the case of bilateral aid, political and dependencies often associated with foreign aid. It may also be easier for them to accept policy advice and guidance that they receive from international organisations in which they are members than from a bilateral donor. • The multilateral organisations possess world-class expertise and experience in many fields that bilateral donors do not have access to. For instance, technical assistance provided by the multilateral organisations is critical in building up the institutions and knowledge that are needed as a basis for capital investments. • Some development problems are best solved through the coordination of multilateral organisations. This particularly applies to humanitarian emergencies, eradication of infectious diseases, environmental problems, the protection and promotion of human rights and so called Global Public Goods. • The multilateral organisations have a critical role in assisting countries in their efforts to reach the Millennium Development Goals and also for the implementation of the Paris-agenda. • The United Nations is in a position to convene international conferences on priority issues, such as the environment, human rights and HIV and AIDS. • The UN has a democratic structure and governance, which gives the organisation global legitimacy and a unique role in combining normative and operative work.

Common arguments raised against channelling development assistance through multilateral development organisations are outlined below12:

11 Regeringen, Strategi för multilateralt utvecklingssamarbete, Stockholm, 2007, http://www.sweden.gov.se/content/1/c6/07/99/38/07dd96c9.pdf and SOU1991: 48, Bistånd Genom Internationella Organisationer, Stockholm, Nordstedts tryckeri AB, 1991, p. 30. 10

Multilateral development cooperation in perspective Jonna Carlsson

• Donor countries have limited influence over the allocation of funding due to the principle underlying . • Multilateral reports are often more descriptive than not results-oriented which makes it difficult to determine what outputs, outcomes and impact have been achieved. • Some of the multilateral organisations have been ineffective due to their large and complex structures. In many policy areas there is duplication of work and unclear boundaries between the mandates of different organisations. However ineffectiveness can also be attributable to the lack of funding.

1.4 Alternative multilateral funding

Multilateral development assistance is defined above. However, it should be noted that multi- bilateral assistance has become a major feature of the funding profile of some of the UN Specialised Agencies and funds and programmes.

Multi-bilateral aid is a finance instrument through which funds are committed by a bilateral donor to a multilateral organisation (UN organisations as well as multilateral financial institutions) for the implementation of a particular programme. Agreements can vary significantly. In some cases they involve detailed specifications requiring that the funds be used for a particular project. In other cases there is more flexibility allowing the funds to be used for a particular country or region or for a specific thematic area.13

The key concept underlying multi-bilateral development assistance is that it is cost effective for the donor country saving administrative resources. Programmes and projects are administered by a multilateral organisation which reports back to the bilateral donor on results. In this way multi-bilateral activities are to some extent both a basis for and a supplement to the political work in the institutions’ governing bodies.

Concerns have been raised over time about the increasing volume of multi-bilateral aid earmarked for specific sectors or countries as compared to the volume of regular resources. Voluntary contributions can become a mechanism for donors to gain influence over multilateral institutions which endangers the multilateral character of the institution.

Moreover, funding becomes unpredictable as a consequence of the increase in multi-bilateral assistance. This has led to the situation where the control that some of the boards of UN organisations have over their own budgets is becoming diluted, with donor priorities rather than multilateral mandates determining some of their actions.

Similarly, global funds are emerging as an additional mechanism for the financing of development. They are distinguishable from multilateral organisations, being a financial instrument whose primary purpose is to attract, manage and distribute resources for global purposes. The missions of these global funds are often linked to one single issue or policy

12 Ibid.

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Multilateral development cooperation in perspective Jonna Carlsson area. The private sector is often a financial contributor or co-financing partner, and governance arrangements may include the private sector, civil society and other stakeholders.

Some of the reasons why these funds have emerged as additional financing sources include the following14:

• They may operate as significant vehicles for the financing of global public goods. • They can generate additional resources from public sources (where there is lack of interest in expanding bilateral programmes or for providing additional financial support to established international organisations). • They leverage the participation of the private sector, civil society and other stakeholders. • They are more likely to be innovative and flexible in their operations. • No single donor or agency controls the funds and there is a greater focus on meeting the needs of partner countries.

However, among the weaknesses of these global funds most commonly cited are the following:

• The single issue focus may neglect synergies across policy making and contradicts support for country led development partnerships behind national priorities and strategies. • They may duplicate existing structures and increase transaction costs. • They are less democratically accountable than multilateral organisations and governments.

These strengths and weaknesses may influence the funding decisions of the global funds. For example, the board representation of global funds varies significantly; in some cases donors are automatically granted a seat on the executive board whereas in other cases a donor may lack influence.

1.5 Outline of the paper

This paper entails two primary sections in addition to this introduction. The following section provides an overview of the organisational structure and the main activities of the United Nations system, the multilateral development banks and the International Monetary Fund. Closer attention will be given to some of the funds and programmes within the UN system that ultimately deal to a greater extent with development cooperation. The African development Bank is given as an example of a Regional Development Bank.

The final section consists of an overview of some of the reform proposals canvassed for these organisations and an analysis of the major challenges these organisations are facing.

14 Andréen, Rolf, ’Swedish participation in multilateral development cooperation’ in Frühling, Pierre, Swedish Development Aid in Perspective, Värnamo, Fälths Tryckeri, 1986, p. 132. 12

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2. The United Nations System

The United Nations (UN) consists of six principal organs: the General Assembly, which governs the UN; the Security Council; the Economic and Social Council (ECOSOC); the Secretariat, headed by the Secretary General; the International Court of Justice; and the Trusteeship Council. The goals and activities of these bodies, created by the UN Charter, are deeply intertwined with a number of organisations that together form the UN System. This system is portrayed in the organisational chart below.

The UN headquarters are in New York, but there are also major offices located in Geneva, The Hague, Vienna, Montreal, Copenhagen, Bonn and Nairobi. The UN has six official languages (Arabic, Chinese, English, French, Russian, and Spanish) but only two working languages (English and French).15

The principal organs have a number of funds, programmes and specialised agencies linked to them and these are all part of the UN System. When the term “UN System” is used in this paper it is inclusive of the principal organs and of all the organisations related to them. As a result of this diversity, there is considerable debate regarding the extent to which the bodies operating in the UN System can be considered a single system. Some view the UN System as simply a collection of autonomous bodies, each one pursuing its own goals on its own timetable; others see the UN as a strong and effective coordinating mechanism whose component parts function as a complete and coherent system.

The purpose of this chapter is to provide the reader with a basic understanding of the UN System and its functions. An overview of the six principal organs of the UN will firstly be presented, in order to foster an understanding of the entire UN System and to explain which organs relate to the other UN entities. A subsequent section provides information about some of the functions and areas of expertise of the funds, programmes and specialised agencies. Since the focus on this paper is on international development cooperation, this chapter concludes with some examples of the funds, programmes and specialised agencies that predominantly deal with international development cooperation.

15 Languages of the World, http://www.nvtc.gov/lotw/months/november/internationalLanguages.htm 13

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2.1 General Assembly

The central position of the General Assembly is firmly established in a series of charter provisions encompassing a wide range of functions and powers. Firstly there are the provisions setting out its powers as the major deliberative body of the UN. The General Assembly has the right to discuss and make recommendations on any subject that falls within the scope of the charter itself, including the functions and powers of the other organs. There are two exceptions to this general right; recommendations with regard to a dispute and matters which are essentially within the domestic jurisdiction of any state,16 Hence, it is in the General Assembly that all of the UN’s important projects (except for the Security Council’s peacekeeping operations) originate—those dealing with political questions, disarmament, economic and social development, human rights, decolonisation of dependent territories, and development of international law.

The General Assembly is responsible for admitting new member states and for electing the non-permanent members of the Security Council. It is also responsible for initiating studies and plans of action that enhance political cooperation, human rights and international cooperation on economic, social, cultural, educational and health issues. In addition to its formal meetings and Committees, the General Assembly, in conjunction with ECOSOC is responsible for a number of UN programmes and subsidiary organisations. The following bodies are directly related to or report to the General Assembly17:

• Main committees • Human rights council • Other sessional committees • Standing committees and ad hoc committees • Other subsidiary organs • UN Peace building commission (both under the General Assembly and the Security Council) • Programmes and funds

The General Assembly meets once a year, from September to December in New York. Special sessions on a particular topic may be held at the request of the Security Council, or of a majority of UN members, or of one member if the majority of members concur.

Early in each session of the General Assembly, its members participate in a general debate during which representatives discuss their opinions on a wide range of issues. Most of the issues raised in the debate are handed over to one of the General Assembly’s main committees. The committees are referred to both by a descriptive title and a number.18 The committees are:

• First, the Disarmament and International Security Committee • Second, the Economic and Financial Committee • Third, the Social, Humanitarian and Cultural Committee • Fourth, the Special Political and Decolonisation Committee

16 The UN General Assembly, http://www.un.org/ga/61/background/background.shtml 17 Ibid. 18 Ibid 15

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• Fifth, the Administrative and Budgetary Committee • Sixth, the Legal Committee

The main committees prepare recommendations and draft resolutions for submission to the General Assembly plenary. Although it is the practice to refer most items to a committee, the General Assembly may decide to deal with certain items without prior reference to a committee. All UN members have a right to be represented on each of these committees. Each committee elects its officers. Decisions are made by a majority of the members present and voting.19

Resolutions passed by the General Assembly are recommendations and do not have the force of law. On the other hand, they do have impact through the legitimacy created by their passage. One example is the UN Declaration on Human Rights, which is treated as common law by courts in many countries. To give its provisions the explicit force of law, the Assembly drafted two conventions, one on civil and political rights and the other on economic, social and cultural rights. Individual states are not legally required to meet the standards defined in these conventions until they are ratified by their governments. However, General Assembly resolutions on the budgets and activities of UN agencies under General Assembly authority do have the force of law.

The General Assembly is the only UN body provided by the Charter in which all member states are represented, numbering 192 in 2006.20 In the General Assembly, all members have one equal vote. Article 18 of the Charter decrees that decisions on “important” questions shall be made by a two-thirds majority of the members present and voting and on other questions by a simple majority.21 Among the important questions specified are recommendations with regard to maintenance of peace and security; election of the non-permanent members of the Security Council and of the members of the Economic and Social Council and the Trusteeship Council; admission of new UN members, suspension of rights and privileges of membership and expulsion of members; questions relating to the operations of the trusteeship system; and budgetary questions. This article also provides that decisions on other questions—including the determination of additional categories of questions to be decided by a two-thirds majority—are made by a simple majority.22

The elections of the president of the Assembly, and the 21 vice presidents and the chairpersons of the main committees, take place at least three months before the start of the regular session. To ensure equitable geographical representation, the presidency of the Assembly rotates each year among five groups of states: African, Asian, Eastern European, Latin American and Caribbean and Western European and other states.23 However, no representative of a permanent member of the Security Council is ever elected as a president of the General Assembly or chairman of a committee.

The UN is financed from assessed and voluntary contributions from member states. The regular two-year budgets of the UN are funded by assessments. The General Assembly

19 Ibid 20 op cit, the UN Charter. 21 Ibid 22 Ibid 23 Encyclopaedia of United Nations, http://www.nationsencyclopedia.com/United-Nations/The-General- Assembly-ORGANIZATION.html 16

Multilateral development cooperation in perspective Jonna Carlsson approves the regular budget and determines the assessment for each member. This is broadly based on the relative capacity of each country to pay, as measured by national income statistics, along with other factors.

From an administrative standpoint, the expenditures of the UN may be said to fall into two categories: expenditures that are included in what is termed the “regular budget,” to which all members are obliged to contribute; and expenditures for certain high-cost items or programmes, for which are established separate, or “extra-budgetary”, accounts or funds financed by special arrangements that do not necessarily involve obligatory payments by UN members. One example of this is peacekeeping, which will be discussed below.

Included in the regular budget are the costs of services and programs carried out at UN headquarters and at all overseas UN offices; the expenses of the International Court of Justice; and debt services charges, which are also listed as “special expenses.”

The Assembly has established the principle that the UN should not be overly dependent on any one member to finance its operations. Thus, there is a “ceiling” rate, which sets the maximum amount for which any member is assessed for the regular budget. The US is the only member that meets that ceiling, but it is in arrears for hundreds of millions of dollars.24

2.2 The Security Council

The following functions and powers are assigned to the Security Council under the charter25:

• to maintain international peace and security in accordance with the principles and purposes of the UN; • to investigate any dispute or situation that might lead to international friction and to recommend methods of adjusting such disputes or the terms of settlement; • to determine the existence of a threat to the peace or an act of aggression and to recommend what action should be taken; • to call on members to apply economic sanctions and other measures not involving the use of force in order to prevent or stop aggression; • to take military action against an aggressor; and • to formulate plans for the establishment of a system to regulate armaments.

The Council recommends to the General Assembly the admission of new members and the appointment of the Secretary General and, together with the General Assembly, elects the judges of the International Court of Justice.

The Security Council has a number of subsidiary bodies26:

• • Standing committee and ad hoc bodies • International criminal tribunal for the former Yugoslavia (ICTY) • International criminal tribunal for Rwanda (ICTR)

24 Ibid 25 The UN Security Council, http://www.un.org/Docs/sc/unsc_functions.html 26 op cit, Encyclopaedia of United Nations 17

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• UN monitoring, verification and inspection commission (Iraq UNMOVIC) • UN compensation commission • Peacekeeping operations and missions • UN peace building commission (both under the Security Council and the General Assembly)

The Security Council has three basic mechanisms for expressing its opinions. The first is a press release that only has the effect of transmitting the work of the Council to the media. The second is a Presidential Statement, issued at the discretion of the current president, which expresses the President’s opinion on a matter before the Council. The third and most powerful option is a Security Council resolution. If states are generally non-compliant with Security Council resolutions, the Council can ask the International Court of Justice for an advisory opinion on it, and can recommend the suspension of a nation’s privileges.

When a complaint concerning a threat to peace is brought before the Security Council, the Council’s first action is usually to recommend that the parties try to reach agreement by peaceful means. However, in cases where this proves ineffective or insufficient, the Council, with the permission of host countries, can authorise the deployment of troops from member nations to help enforce or maintain a brokered peace.27 The UN has no standing international police or military force equipment to enforce the decisions of the Security Council. As a result, the success of authorised missions is contingent upon troop contributions from member states.

The Security Council oversees the International Tribunal for the Former Yugoslavia and the Criminal Tribunal for Rwanda. These two international tribunals are distinct from the International Court of Justice and are designed to bring the instigators and perpetrators of violations of international human rights laws to justice. They were independently convened and are not part of a permanent International Criminal Court.

The Security Council is composed of representatives from 15 member nations. There are five permanent member nations of the Security Council—China, France, the Russian Federation, UK and USA—and ten elected member nations that serve two-year terms. The elected members are elected according to the following pattern: five from African and Asian states, one from Eastern European states, two from Latin American and Caribbean States, and two from Western European and Other states. The presidency of the Security Council rotates every month according to the English alphabetical listing of the 15 member nations. Each year the general Assembly elects five members to replace the five nations whose terms expire every December 31.28

Procedural votes in the Security Council require the approval of a simple majority of the members. Substantive decisions require the approval of nine members, including the concurring votes of all five permanent members. This permanent member unanimity requirement is often referred to as the “veto power”, although no such term appears in the UN Charter. It should be noted that this unanimity requirement can still be met if a permanent member voluntarily abstains from a vote; not all permanent members must vote yes, but no

27 Ibid 28 Ibid 18

Multilateral development cooperation in perspective Jonna Carlsson motion may pass if any permanent members votes no. Each permanent member of the Council has used this so-called veto power at least once.

2.3 Peacekeeping

Peacekeeping operations are not mentioned in the Charter, yet they, as opposed to enforcement measures, are the means that the Security Council has most frequently used to maintain the peace. It has dispatched observer missions and troops in several crises. Although the arrangements for the provision of armed forces foreseen in the Charter have not been realised, the UN has nevertheless been able to establish peacekeeping forces on the basis of voluntary contributions of troops by member states.

Until the end of the , the formula had always been that the disputants themselves must expressly invite the council to take peacekeeping measures (the special situation of Korea was the one exception). With the eruption of ethnic and nationalistic conflicts in Eastern Europe and Africa after the end of the cold war, the Security Council recognised that the increasing number and complexity of peacekeeping operations warranted review. In May 1993 it requested the Secretary General to submit a report containing specific new proposals to improve the capacity of the UN in peacekeeping.29 The Secretary General submitted his report on “Improving the capacity of the United Nations for peacekeeping” in March 1994. In response to this analysis, on 3 May 1994, the Security Council issued a statement setting out factors to be considered in establishing UN peacekeeping operations. These included30:

• Whether a situation exists that presents a threat to international peace and security; • Whether regional or sub-regional organisations already exist and can assist in resolving the situation; • Whether a cease-fire exists and whether the parties have committed themselves to a peace process intended to reach a political settlement; • Whether a clear political goal exists and whether it can be reflected in the mandate; • Whether a precise mandate for a United Nations operation can be formulated; and • Whether the safety and security of UN personnel can be reasonably assured; in particular, whether the parties to a dispute offer reasonable guarantees of safety to UN personnel.

The Council also required an estimate of projected costs for the initial 90 days of a new peacekeeping operation, and for its first six months, and an estimate of the total annual cost, before authorising any new missions.31 In the case of mission extensions, it also required estimates of the financial implications.

In both “An Agenda for Peace” (1992) and his March 1994 report, the former Secretary General proposed that a new mechanism had to be developed to enable a quick response to international crises. Under normal circumstances, the process of designing a mission, obtaining commitments for troops and equipment, establishing a budget, and obtaining approval for new peacekeeping missions could take as long as three months. The Security Council welcomed the Secretary General's proposal to devise stand-by arrangements

29 Encyclopaedia of United Nations, The Security Council, http://www.nationsencyclopedia.com/United- Nations/The-Security-Council-MAINTAINING-INTERNATIONAL-PEACE-AND-SECURITY.html 30 Ibid 31 Ibid 19

Multilateral development cooperation in perspective Jonna Carlsson under which member states would maintain an agreed number of troops and equipment ready for quick deployment. A Stand-by Arrangements Management Unit was established to keep track of units and resources available for this purpose.32

All Member States share the costs of UN peacekeeping operations. The General Assembly apportions these expenses based on a special scale of assessments applicable to peacekeeping, which takes into account the relative economic wealth of Member States. The permanent members of the Security Council are, however, required to pay a larger share because of their special responsibility for the maintenance of international peace and security.

As of 1 January 2006, the top 10 providers of assessed contributions to United Nations peacekeeping operations were: the United States, Japan, Germany, the United Kingdom, France, Italy, , Spain, China and the Netherlands.

Many countries have made additional voluntarily contributions to support UN peacekeeping efforts on a non-reimbursable basis in the form of transportation, supplies, personnel and financial contributions above and beyond their assessed share of peacekeeping costs.

2.4 The Economic and Social Council (ECOSOC)

Under the UN Charter, the Economic and Social Council (ECOSOC) is responsible for33:

1. Promoting higher standards of living, full employment, and economic and social progress; 2. Identifying solutions to international economic, social and health problems; 3. Facilitating international cultural and educational cooperation; and 4. Encouraging universal respect for human rights and fundamental freedoms.

ECOSOC’s activities incorporate over 70 per cent of the human and financial resources of the entire UN System. ECOSOC coordinates the work of the fourteen UN specialised agencies, nine functional commissions, and five regional commissions. It receives reports from eleven UN funds and programmes and issues recommendations to the UN System and to member states. The members of the coordinating bodies established by ECOSOC are representatives of member states.

ECOSOC consists of fifty-four representatives of member states that are elected by the General Assembly for three-year terms. The seats are distributed geographically —14 from Africa, 11 from Asia, six from Eastern Europe, 10 from Latin America and the Caribbean and 13 from and other states.34 Retiring members are eligible for immediate re- election and member states that are not currently serving on ECOSOC are able “to participate, without vote, in its deliberations on any matter of particular concern to that member” (Articles 61 and 69).35

32 Ibid 33 op cit, The UN Charter 34 New Zealand Ministry of Foreign Affairs, The United Nations Handbook, 2006 35 Ibid 20

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Elections for ECOSOC’s leadership positions (a president and four vice presidents, one from each geographic region) and for membership of its subsidiary bodies are held at a resumed organisational session in late April or early May. The annual substantive sessions operate in much the same way as the General Assembly and its main committees: each member can send whatever individuals it desires to represent its interests, each member has one vote, and decisions are taken by simple majority.

ECOSOC has a number of subsidiary bodies36:

• Functional commissions; • Regional Commissions; and • Other Bodies – Permanent Forum on Indigenous Issues (PFII), United Nations Forum on Forests, sessional and standing committees, Expert, ad hoc and related bodies.

2.5 Regional Commissions

The five regional commissions—serving Europe, Asia and the Pacific, Latin America and the Caribbean, Africa, and Western Asia—have been established by ECOSOC in recognition of the fact that many economic and social problems are best approached at the regional level.37 The commissions work to raise the level of economic and social development activity in their respective regions, as well as to maintain and strengthen relations among countries within and outside regions. All actions taken by the commissions are intended to fit within the framework of overall UN economic and social policies. The commissions also are empowered, with the agreement of the governments concerned, to make recommendations directly to member governments and to the specialised agencies.

The commissions are subsidiary organs of the Economic and Social Council, to which they report annually. The secretariats of the commissions—each headed by an executive secretary with the rank of undersecretary general—are integral parts of the UN staff, and their budgets form part of the regular UN budget.38

An important part of the work of all of the regional commissions is the preparation of regional studies and surveys, particularly annual economic and social surveys that are published at the headquarters of each commission. Supplementing these are bulletins and periodicals covering a wide range of subjects (such as agriculture, population, transportation and communications, energy, industry, and housing and construction) that are widely used as sources of information by governments, business and industry, educational institutions, other UN organs, and the press.39

2.6 Secretariat

The Secretariat services the other organs of the UN and administers the programmes and policies laid down by them. As the scope and range of UN activities have widened, the staff

36 The ECOSOC, http://www.un.org/docs/ecosoc/subsidiary.html

37op cit, The UN Handbook 38 Ibid 39 The UN Secretariat, http://www.un.org/documents/st.htm 21

Multilateral development cooperation in perspective Jonna Carlsson of the Secretariat has increased in number and its organisational structure has increased in complexity. The major elements of the Secretariat—variously designated as offices, departments, programmes, conferences, and the like—are headed by officials of the rank. The activities within the Secretariat are organised in the following departments:

The Department of Political Affairs (DPA). This department oversees the organisation’s efforts in preventive diplomacy and peacemaking, collects and analyses information to alert the General Assembly and Security Council of impending crises, and carries out mandates handed down by the General Assembly and Security Council. The DPA provides secretariat services to both bodies. It also provides electoral assistance to countries requesting help in strengthening the democratic process.40

The Department of Peacekeeping Operations (DPKO). This department supervises the operations of the United Nations peacekeeping missions around the world. The work of the United Nations in this area has grown exponentially in size and complexity since the end of the cold war. In December 1991 peacekeeping missions involved approximately 11,000 troops and 4,000 civilian personnel with a combined budget of US$500 million. At its peak in 1995 (when UN peacekeeping personnel were heavily deployed in the former Yugoslavia), the Department of Peacekeeping Operations was supervising approximately 70,000 military and civilian personnel, whose combined annualised budgets approached US$3 billion. Under the UN’s 1992 reorganisation, the Field Operations Division, which had been part of the Department for Administration and Management, was transferred to its main client, the Department of Peacekeeping Operations.41

The Department for Disarmament Affairs (DDA). This department was established in 1982, and continued until 1992. It was re-established in January 1998. The DDA furthers the goal of nuclear disarmament and non-proliferation and disarmament of chemical and biological weapons. It promotes disarmament efforts for conventional weapons, especially land mines and small arms. It has five branches: the Conference on Disarmament Secretariat and Conference Support Branch; the Weapons of Mass Destruction Branch; the Conventional Arms Branch; the Regional Disarmament Branch; and the Monitoring, Database and Information Branch.42

The Office for the Coordination of Humanitarian Affairs (OCHA). The OCHA works to improve the delivery of humanitarian assistance to victims of disasters and other emergencies. It also acts as an advocate for humanitarian activities being considered by inter-governmental bodies. It was designed to provide quick needs assessments, field situation analyses, and early negotiations on access to emergency situations. A major feature of this department is inter- agency coordination that allows all of the organisations within the UN system to make consolidated appeals for humanitarian assistance and to better track contributions from donor governments, UN agencies, and nongovernmental organisations.43

The Department of Economic and Social Affairs (DESA). The DESA aims to promote broad- based and sustainable development through an integrated approach to economic, social,

40 Ibid 41 The UN department of peacekeeping operations, http://www.un.org/Depts/dpko/dpko/info/page3.htm 42 The UN department for disarmament affairs, http://disarmament.un.org/ 43 The UN office of the coordination of humanitarian affairs, http://ochaonline.un.org/webpage.asp?Nav=_about_en&Site=_about 22

Multilateral development cooperation in perspective Jonna Carlsson environmental, population, and gender-related aspects of development. It has the following divisions: Advancement of Women; Africa and the Least Developed Countries; Development Policy Analysis; Economic and Social Council Support and Coordination; Population; Public and Public Administration; Social Policy and Development; Statistics; Sustainable Development; and Financing for Development.44

The Department of General Assembly Affairs and Conference Services. This department consists of three divisions and one service. The Central Planning and Coordination Service provides central planning services for meetings and documentation, and coordinates conference services worldwide. The General Assembly and ECOSOC Affairs Division provide secretariat services and assistance to the General Assembly, the Economic and Social Council (ECOSOC), and the Trusteeship Council. The Interpretation, Meetings and Publishing Division provides interpretation services for all of the six official languages of the UN. It also prepares verbatim records of meetings of the General Assembly, Security Council, and other bodies, and prepares and prints documents and other publications. The Translation and Editorial Division is responsible for translating all official United Nations documents, meeting records, publications and correspondence, into each of the six official languages. It also provides reference services and terminology services for authors, editors, interpreters, translators, and verbatim reporters.45

The Department of Public Information (DPI). This department creates press releases, publications, and radio and video programmes, publicising the work of the organisation.

The Department of Management (DM). This department has a number of offices and divisions, including: the Treasury; the Office of Human Resources Management; the Integrated Management Information System Project; the Procurement Division; and the Archives and Records Management Section.46

The Office of Internal Oversight Services (OIOS). In August 1993, the Secretary General announced the creation of a new Office of Inspections and Investigations, headed by an assistant secretary general, which would incorporate various former units of the DAM dealing with audit, management advisory services, evaluation, and monitoring. In July 1994, the General Assembly strengthened the office, and changed its name to the Office of Internal Oversight Services (resolution A/218B [29 July 1994]). The General Assembly stipulated that the head of the new office, at the level of undersecretary general, should be an expert in the fields of accounting, auditing, financial analysis and investigations, management, law, or public administration. It further stipulated that the individual should serve only one five-year term, and that the post would not be subject to geographical distribution limits. The watchdog office was given wider independence to investigate possible fraud and abuse within the organisation. It is assisted in its task by the Integrated Management Information System (IMIS), a major hardware and software upgrade that allows greater monitoring and audit capabilities through electronic audit trails. The creation of this office had long been sought by industrialised countries concerned that their contributions to the United Nations were being wasted by fraud and abuse.47

44 The UN department for economic and social affairs, http://www.un.org/esa/about_esa.html 45 The UN department for General Assembly and conference management, http://www.un.org/Depts/DGACM/ 46 Op cit, Encyclopaedia of Nations. 47 Ibid 23

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The Office of Legal Affairs (OLA). This office advises the organisation and the Secretary General on legal matters. For example, the OLA has provided advice on numerous activities related to the International Criminal Tribunals for the former Yugoslavia and for Rwanda. Under the UN’s 1992 reorganisation, it also assumed responsibility for the Office for Ocean Affairs and Law of the Sea. The OLA also provides a range of advice and assistance on issues relating to treaty law and technical aspects of treaties.48

2.7 Secretary General

The Secretary General of the UN is the head of the Secretariat. The current Secretary General is Ban Ki-moon of South Korea. He became Secretary General on 1 January 2007, and his first term will expire on 31 December 2011.

Under the Charter, the Secretary General has the right to bring to the attention of the Security Council any matter that, in his opinion, might threaten international peace and security. This right goes beyond any power granted the head of an international organisation before the founding of the UN. The Charter requires that the Secretary General submit to the General Assembly an annual report on the work of the organisation. In this report, he can state his views and convey his voice to the world’s governments. The Secretary General’s role has also been considerably enhanced by exploiting the Charter provision that he shall perform “such other functions” as are entrusted to him by the main organisational units of the UN.49

One of the most vital roles played by the Secretary General is the use of his “good offices”— steps taken publicly and in private, drawing upon his independence, impartiality and integrity, to prevent international disputes from arising, escalating or spreading.

Each Secretary General also defines his or her role within the context of his or her particular time in office. The previous Secretary General Mr Annan’s efforts have focused on reform, Africa, peace operations, global compact and the UN millennium report.

Previous Secretary Generals

Trygve Lie () 1946 -1952 Dag Hammarskjöld (Sweden) 1953 – 1961 (Burma, now Myanmar) 1962 – 1971 (Austria) 1972 – 1981 Javier Pérez de Cuéllar (Peru) 1982 – 1991 Boutros Boutros-Ghali (Egypt) 1992 – 1996 Kofi Annan (Ghana) 1997 – 2006 Ban Ki-moon (South Korea) 2007-

2.8 The International Court of Justice (ICJ)

Established in 1945 by the Charter of the United Nations, the Court began work in 1946 as the successor to the Permanent Court of International Justice. The Statute of the International Court of Justice, similar to that of its predecessor, is the main constitutional document constituting and regulating the Court. The ICJ should not be confused with the International

48 Ibid 49 Chadwick, Alger, The United Nations System: a reference handbook, ABC-Clio, 2006. 24

Multilateral development cooperation in perspective Jonna Carlsson

Criminal Court or a court exercising jurisdiction under Belgium’s War Crimes Law, both of which also potentially have “global” jurisdiction.50

The Court’s workload is characterised by a wide range of judicial activity. Its main functions are to settle legal disputes submitted to it by states and to give advisory opinions on legal questions submitted to it by duly authorised international organs and agencies. The number of decisions made by the ICJ has been relatively small, but there has clearly been an increased willingness to use the Court since the 1980s, especially among developing countries, although the USA withdrew from compulsory jurisdiction in 1986, meaning that it accepts the court’s jurisdiction only on a case by case basis.51

English and French are the two official languages of the ICJ. It sits in the Peace Palace at The Hague in the Netherlands. The Court is composed of fifteen judges each elected to nine-year terms of office by the UN General Assembly and Security Council sitting independently of each other. It may not include more than one judge of any particular nationality. Elections are held every three years for one-third of the seats, and retiring judges may be re-elected. The members of the Court do not represent their governments but are rather independent magistrates.52

2.9 The Trusteeship Council

In setting up an international trusteeship system, the Charter established the Trusteeship Council as one of the main organs of the United Nations and assigned to it the task of supervising the administration of trust territories placed under the trusteeship system. The major goals of the system were to promote the advancement of the inhabitants of trust territories and their progressive development towards self-government or independence. The aims of the trusteeship system have been fulfilled to such an extent that all trust territories have attained self-government or independence, either as separate states or by joining neighbouring independent states. The Trusteeship Council suspended operations on 1 November 1994, with the independence of Palau, the last remaining UN trust territory, achieved on 1 October 1994. By a resolution adopted on 25 May 1994, the Council amended its rules to meet as occasion required, by decision of its president, or at the request of a majority of the members of the General Assembly or the Security Council.53

50 Ibid 51 Ibid 52 Ibid 53 The UN Trusteeship Council, http://www.un.org/documents/tc.htm 25

Multilateral development cooperation in perspective Jonna Carlsson

3. United Nations within the field of International Development cooperation - Funds, Programmes, Specialised Agencies and other related UN organisations

Most of the various organisations within the UN system deal with development cooperation in one way or another. This section provides a general overview of what the UN specialised agencies, funds and programmes and research and training institutes do, followed by some detailed examples of a number of these organisations that deal extensively with development cooperation.

3.1 UN Specialised Agencies

There are 14 specialised agencies within the UN, whose activities are coordinated through ECOSOC. Each of these was separately established by governments and has its own statutes and governing boards. Some of these agencies are even older than the UN itself.

The first specialised agencies that were created were organisations of a highly technical nature, which included the International Telecommunication Union (ITU), established in 1865, the World Meteorological Organization (WMO), established in 1873, and the (UPU), established in 1874. They were created to oversee and coordinate the needs of international cooperation within these areas. After the United Nations was formed, these independent agencies entered into agreements with the UN and became specialised agencies operating in association with the UN. Since then other specialised agencies have been created to extend international cooperation to new fields as the times have demanded, such as the World Health Organisation (WHO), the Food and Agricultural organisation of the UN (FAO) and the United Nations Educational, Scientific and Cultural Organisation (UNESCO).

The specialised agencies have promoted policies and programmes based on international laws, rules, and norms according to their respective mandates and have played a leading role in the normative function of establishing standards that allow international cooperation to proceed smoothly. However, the activities relating to this traditional normative role—study, analysis and the formulation of rules and regulations—have been declining, while activities devoted to practical operations have increased dramatically. For instance organisations such as FAO, UNESCO and WHO have been heavily criticised for being too occupied with operational work that other organisations are more suited to, such as many of the funds and programmes, and have thus lost some of their important functions as norm setters. This will be further discussed in the final chapter.

Article 57 of the UN Charter provides for specialised agencies: “the various specialised agencies established by inter-governmental agreement and having wide international responsibilities as defined in their basic instruments, in economic, social cultural, educational, health and related fields, shall be brought into relationship with the United Nations”.54

Each specialised agency has its own membership of states, its own governing bodies, its own secretariat with an executive head and its own policies and programmes adopted by its governing body. They report annually or biennially to ECOSOC. The General Assembly can

54 op cit, The UN Charter 26

Multilateral development cooperation in perspective Jonna Carlsson examine their budgets and make recommendations. However, each specialised agency exercises final control over its operations.55

Specialised agencies

ILO – International Labour Organisation IMF – International Monetary Fund FAO – Food and Agriculture Organisation UNESCO – United Nations Educational, Scientific and Cultural Organisation WHO – World Health Organisation World Bank Group: IBRD, IFC, IDA and MIGA ICAO – International Civil Aviation Organisation IBRD – International Bank for Reconstruction and Development. IMO – International Maritime Organisation IDA – International Development Association ITU – International Telecommunication Union IFC – International Finance Corporation UPU – Universal Postal Union MIGA – Multilateral Investment Guarantee Agency WIPO – World Intellectual Property Organisation ICSID – International Centre for Settlement of Investment Dispute IFAD – International Fund for Agricultural Development UNIDO – United Nations Industrial Development Organisation UNWTO – United Nations World Tourism Forum

The specialised agencies are funded through assessed member contributions and through voluntary funding.

3.2 Funds and Programmes

There are 14 funds and programmes in total and each has responsibility for particular issues, which include development, women, children and the environment. They were created, and still function, as purely operational organisations. The following is a list of the funds and programmes.

55 op cit, The UN Handbook. 27

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Founded Fund/Programme

1946 UN Children’s Fund (UNICEF), New York. Founded as Un Children’s Emergency Fund 1953 name changed to United Nations children’s Fund with same acronym

1949 Office of the UN High Commissioner fro Human Rights (OHCHR), Geneva (HC for HR created in 1993, combined with the Centre for HR in 1997) (under other UN entities in UN organisational chart)

1949 UN Relief and Works Agency for Palestine Refugees in the near east (UNRWA, Gaza/Amman

1950 UN High Commissioner for Refugees (UNHCR), Geneva

1963 World Food Programme (WFP), Rome

1964 IN Conference on Trade and Development (UNCTAD), Geneva

1964 International Trade Centre (ITC) (Joint activity of UNCTAD & WTO), Geneva

1965 UN Development Programme (UNDP), New York

1967 UN Population Fund (UNFPA), New York

1970 UN Volunteers (UNV), New York

1972 UN Environment Programme (UNEP), Nairobi

1978 UN Settlements Programme (UNHSP) (also called UN-Habitat, Nairobi)

1985 UN Development Fund for Women (UNIFEM), New York. Emerged from Voluntary Fund for the UN Decade for Women (VFDW) 1976

1995 Joint UN programme on HIV/AIDS (UNAIDS), Geneva (under other UN entities in UN organisational chart)

Each of these funds or programmes has its own governing body of member states, elected by rotation. Most of them have an executive board that may be permanent or elected by ECOSOC. The membership of the boards usually reflects the regions of the world.

The funds and programmes may sometimes appear to operate autonomously, but they report to ECOSOC on an annual basis and they are fully responsible to the Secretary General and come under the ultimate authority of the General Assembly.

The financial resources of the funds and programmes are derived primarily from voluntary contributions by governments of participating states. Some of them also receive a budget contribution from the General Assembly, which varies among the funds and programmes and covers only a small part of the total operations of these organisations.

There are many proposals for reform of the funds and programmes in order for them to work more effectively. Some of these will be discussed in the final chapter.

3.3 Research and Training Institutes

The emergence of eight organisations involved in research and training reflects the need for the UN system to support its programmes with expertise on approaching policy issues with a global perspective. The specific topics these organisations are focused on reflect the range of issues that fall under the ambit if the UN system, including social development, crime and justice, advancement of women, disarmament, and drugs and crime. Three of these research organisations are focused, in turn, on social development (UN Research Institute for Social Development, UNRISD), crime and justice (UN Interregional Crime and Justice Research Institute, UNICRI), and disarmament (UN Institute for Disarmament Research, UNIDIR). A

28

Multilateral development cooperation in perspective Jonna Carlsson fourth, the UN University (UNU), has a research agenda that reaches across the UN System. Two organisations range across training and research. One is focused on women, the International Research and Training Institute for the Advancement of Women (INSTRAW). The other is the UN Institute for Training and Research (UNITAR), with a broad issue agenda. One organisation emphasises only training, the UN System Staff College (UNSSC).

Two types of training that are offered deserve special attention here. The UN Institute for Training and Research (UNITAR) conducts “training programmes in multilateral diplomacy and international cooperation for diplomats accredited to the United Nations and national officials involved in work related to United Nations activities”.56 The UN System Staff College (UNSSC) focuses on the following five tasks: (1) providing training and learning services to UN staff members, (2) delivering management solutions to UN organisations, (3) supporting interagency collaboration within the UN System, (4) encouraging cooperation with the private sector and civil society, and (5) promoting good management practices throughout the UN System.57

56 www.unitar.org 57 The United Nations Staff College, http://www.unssc.org/web/about/index.asp?p=/web/about/who.asp

29

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4. UN organs within the field of development cooperation – some examples

There are both specialised agencies and funds and programmes that operate in the field of development. This section provides examples of the operative and normative work of these organisations. Some of the organs have been assigned a particular responsibility for the coordination of the UN System.

The UNDP is represented as the main example of such a programme. This is because, firstly, the UNDP is the largest provider of development assistance in the UN System. Secondly, it is also responsible for the coordination of the Resident Coordination System, which coordinates all UN organisations in the field. Finally, the UNDP is the main coordinator of the global and national efforts to reach the Millennium Development Goals.

The United Nations High Commissioner for Refugees (UNHCR) and World Food Programme (WFP) are primarily humanitarian organisations. They have both operational partnerships with other organisations. The humanitarian work of the UNHCR will be exemplified here, as it has a broader mandate and is present in more countries than is the WFP.

The World Health Organisation will be given as an example of a specialised agency because of its important role as a norm and standard setter in the field of health. The WHO is also a good example of an organisation that has difficulties in maintaining the balance between normative functions on the one hand, and technical cooperation on the other.

The Office for the Coordination of Humanitarian Affairs (OCHA) is provided as an example of one of the offices within the Secretariat that deals with developing countries in terms of humanitarian assistance.

4.1 Coordination within the field of development cooperation

The United Nations Development Group (UNDG) was established as part of the Secretary General’s reform program in 1997. It was established to lead the process of reform in UN development organisations. Ultimately, the UNDG works as an umbrella organisation that brings together the operational agencies working with development and is therefore an important actor within the field.

The UNDG develops policies and procedures that allow member agencies to work together and analyse country issues, plan support strategies, implement support programmes, monitor results and advocate for change. These initiatives increase UN impact in helping countries achieve the Millennium Development Goals (MDGs), including poverty reduction.

There are 28 members and five observers in the UNDG. The group meets at least three times annually to decide on issues related to country level coordination to achieve the MDGs. The Administrator of the UNDP, on behalf of the Secretary General, chairs the UNDG.58

58 Sida, Working in partnership with UNDP; UNFPA and UNICEF: a Swedish strategy framework for 2002- 2005, Stockholm, Regeringskansliet, 2002. 30

Multilateral development cooperation in perspective Jonna Carlsson

The UNDG Executive Committee consists of representatives of four funds and programmes: UNICEF, UNFPA, WFP and UNDP (The High Commissioner for Human Rights is an Ex- Officio member of the Committee). The Executive Committee focuses on reforming the work methods of the funds and programmes and manages the mechanisms of the UNDG. It meets every other month and is chaired by the UNDP Administrator.

The UNDG is administered and funded by the United Nations Development Programme, with senior staff also seconded from the Executive Committee agencies.

4.2 Example of a programme – United Nations Development Programme (UNDP)

In 1949, the General Assembly adopted the Expanded Program of Technical Assistance (EPTA). Nine years later of 1958, the General Assembly established the Special Fund. This fund established the base of support for encouraging economic assistance to developing states. In 1965 the General Assembly decided to consolidate the EPTA and the Special Fund into the United Nations Development Programme (UNDP).59

Until the 1980s the UNDP was mainly a funding agency for a wide range of technical assistance projects intended to build capacity in national institutions. The majority of the international development assistance was conducted by the specialised agencies of the UN. In the 1990s, UNDP underwent a gradual shift towards becoming a development organisation for governance issues with national execution of projects as the preferred modality. As a consequence, the UNDP underwent an adjustment, from being the main coordinator for technical assistance, to becoming an implementing body for international development cooperation.

The UNDP’s overriding goal is to promote sustainable human development and in its efforts to achieve this it has identified the following five priority areas60:

• Democratic Governance • Poverty reduction • Crisis prevention and recovery • Energy and environment • HIV/AIDS

The protection of human rights and the promotion of women’s empowerment are not separate practice areas but are integrated into most programmes. Information and communication technology is treated similarly, as an important tool to be incorporated into programmes. Thus these aspects are mainstreamed into the development programmes.

UNDP’s mandate also embraces the coordination of the UN system at country level. The UNDP has taken the lead role in monitoring the progress towards the achievement of the goals contained in the Millennium Declaration.

59 Ibid 60 Ibid 31

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The head of UNDP is called the Administrator. A Resident Representative (RR) is the Administrator’s representative at the country level and is head of the country office. The Resident Representative normally also serves as the Resident Coordinator (RC) for all of the UN organisations present in a country.61 The coordination of the UN system is effectuated through the UN Development Group (UNDG) at the central level and the resident coordinator system at the country level.

At the country level, the UNDP administers and supports representatives of associated UN coordinates the UN funds and programmes such as UN Volunteers, UNCDF, UNIFEM, other UN organisations and coordinating entities such as UNAIDS. When these entities are not represented at the country level, they are represented by the UNDP.

The main corporate planning tool is the UNDP’s business plan, called the UNDP Multi-Year Funding Framework (MYFF). The business plan describes the UNDP’s role in UN efforts over a period of four years. It outlines the details of the organisational strategies, the usage of the funds available, and how it integrates with overall UN efforts to reduce poverty and to achieve the Millennium Development Goals. The framework is the key instrument for management, monitoring and accountability for the UNDP, both internally and for external partners. The current Multi-Year Funding Framework is the second of its kind and covers the time period from 2004 to 2007.62

When the UNDP prepares a new country programme the first step is for the UN system as a whole, together with the relevant country government, to assess the key causes of poverty, and therefore to analyse the country’s progress towards the Millennium Development Goals. This analysis is called the Common Country Assessment (CCA), and forms the basis of the work of the UN system in the country. Based on the analysis of the country situation, the UN agencies present in the country called the UN country team subsequently establish the collective priorities of the UN system in that country and outline the expected results and the contributions to be made by each one of the UN agencies, including the UNDP. This is called the United Nations Development Assistance Framework (UNDAF). The UNDAF links these priorities to outputs and outcomes for individual UN agency country programmes. It also contains a UNDAF result matrix with measurable indicators and a monitoring and evaluation plan.63

The UNDP has a wide range of implementing partners. They include government institutions, civil society organisations, the private sector and foundations, but also other UN organisations such as the specialised agencies, the World Bank and the United Nations High Commissioner for Refugees.

Normally there is one single implementing partner responsible and accountable for managing a project, delivering the planned outputs and using UNDP resources effectively. The implementing partner is chosen on the basis of the technical, financial, managerial and administrative capacities needed for the project. The implementing partner may cooperate with other entities that will assist in the delivery of outputs but it remains solely accountable for the project delivery.

61 Ibid 62 Ibid 63 Ibid 32

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The UNDP publishes the Human Development Report annually. Each year the report has a different focus drawn from the contemporary development debate. It is a product of a selected team of leading scholars, development practitioners and members of the Human Development Report Office of the UNDP. It is translated into numerous languages and launched in over 100 countries. The report was first launched in 1990. Its goal was to place people at the centre of the development process in terms of economic debate, policy and advocacy. Development was characterised by the provision of choices and freedoms resulting in widespread outcomes. Four new indices have since been developed—the Human Development Index, the Gender- related Development Index, the Gender Empowerment Measure, and the Human Poverty Index.

The UNDP Secretariat is in New York. UNDP maintains 135 country offices and has a total of about 7,000 international and national staff members working at the Secretariat and at the country offices. The United Nations General Assembly and the Economic and Social Council establish the overall policies for the UNDP. The Executive Board provides inter- governmental support and supervises the activities of the UNDP ensuring that the UNDP is responsive to the needs of programme countries. The UNDP Executive Board is made up of representatives of 36 countries, who serve on a rotating basis.

The Administrator manages the UNDP’s day-to-day work, and is directly accountable to the Executive Board. The Administrator is the third highest-ranking official in the United Nations system after the Secretary General and the Deputy Secretary General. He or she is appointed by the Secretary General for a term of four years, and the appointment is confirmed by the General Assembly. The current Administrator is Kemal Dervis of .

Five regional bureaus look after the country offices: Asia and the Pacific, Africa, the Arab States, Europe and the Commonwealth of Independent States (the former Soviet Union), and Latin America and the Caribbean. The regional bureaus work out of the UNDP’s headquarters in New York. Each one is headed by a Regional Director.

In addition to its regular programmes, the UNDP also administers the United Nations Volunteers programme (UNV), the Women's Fund at the United Nations (UNIFEM) and the United Nations Capital Development Fund (UNCDF).

In spite of the centrality and comprehensiveness of the UNDP’s mandate, only about 3 per cent of Official Development Assistance (ODA) funds are channelled through the UNDP. UNDP is entirely dependent on voluntary contributions. It receives three kinds of financing for programming purposes64:

• Regular resources, which are untied and used in accordance with the UNDP’s priorities as determined by the Executive Board; • Third party co-financing and cost sharing by OECD countries, representing earmarked contributions for specific themes, programmes or countries; and • Programme country cost sharing, which consists of funds from development banks or programme country governments in support of projects in their own countries. In such cases, the UNDP has an implementing role but does not contribute financial resources. This type of cost sharing applies mainly to middle income countries.

64 United Nations Development Programme, http://www.undp.org/about/ 33

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These combined income sources mask the UNDP’s difficult financial situation. Regular resources now make up less than 30 per cent of total resources. They are the bedrock of UNDP funding and are used for its core programmes and for programme support by headquarters and country offices.65

4.3 United Nations High Commissioner for Refugees (UNHCR) – a humanitarian organisation

The Office of the United Nations High Commissioner for Refugees was established by the UN General Assembly on 14 December 1950. The UNHCR’s initial responsibility was to protect the refugees from war torn Europe after the Second World War. However, towards the end of the 1950s and throughout the 1960s, the focus of the UNHCR’s activities turned from Europe towards less developed countries.

The UNHCR’s founding statue entrusts it with two primary and closely related functions: to protect refugees and to promote durable solutions to their problems. When the UNHCR was established, material aspects of refugee relief were seen to be the responsibility of the governments that had granted them asylum. However, as more recent major refugee flows have often been directed towards less developed countries, the UNHCR has acquired the additional role of coordinating material assistance for refugees.

According to the 1951 Convention Relating to the Status of Refugees, the term “refugee” applies to any person who:

… owing to well-founded fear of being persecuted for reasons of race, religion, nationality, membership of a particular social or political opinion, is outside the country of his nationality and is unable or, owing to such fear, is unwilling to avail himself of the protection of that country; or who, not having a nationality and being outside the country of his former habitual residence as a result of such events, is unable or, owing to such fear, is unwilling to return to it.66

1951 Convention relating to the Status of Refugees • Contains a general definition of the term “refugee” that no longer ties it to specific national groups, but to the reasons (or causes) for flight. • Establishes the principle of non-refoulement; that is, not removing a person to a territory where he/she would be at risk of being persecuted, or of being moved to another territory where he/she would face persecution. • Sets standards for the treatment of the refugees, including their legal status, employment and . • Its scope is limited to people who became refugees as a result of events that took place before 1 January 1951, with signatory states given the option to limit its geographical application to Europe.

1967 Protocol • Abolished the geographical limitation and the 1951 deadline, making the Convention universal.

The agency is mandated to lead and coordinate international action to protect refugees and resolve refugee problems worldwide. Its primary purpose is to safeguard the rights and well-

65 Ibid 66 the United Nations High Commissioner for Human Rights, http://www.ohchr.org/english/law/refugees.htm 34

Multilateral development cooperation in perspective Jonna Carlsson being of refugees. It strives to ensure that everyone can exercise the right to seek asylum and find safe refuge in another state, with the option to return home voluntarily, to integrate locally or to resettle in a third country. The UNHCR’s mandate is unique in that the organisation has a responsibility to promote the protection and welfare of refugees wherever they are. Whilst other UN organisations can choose which operation they want to assist, the UNHCR High Commissioner is expected to act as an ambassador for refugees wherever they are.

The basic unit for organising activities (embracing both international protection and material assistance) within the UNHCR is through projects. A project may cover a sector, such as legal assistance/protection, water or education or may be multi-sectoral covering a range of assistance activities including food, transport, shelter, sanitation, health, education, water and many others. In these cases the UNHCR regularly requests a partner to implement the project on the UNHCR’s behalf. UNHCR partners include the World Food Programme, UNESCO, UNDP, ILO, WHO and a number of individual NGOs.

The other side of the overall assistance programmes is the activities that the UNHCR carries out directly on its own. This type of protection or assistance can be summarised in five different categories67:

1. Emergency: This covers activities following an influx of refugees or persons of concern to the High Commissioner and is aimed at meeting basic or survival needs quickly. This type of assistance will normally not last more than one year and will essentially focus on life saving or life sustaining measures. 2. Care and Maintenance: This covers activities for refugees in relatively stable situations, where survival is no longer threatened, but where a durable solution has not yet been found. This may include the provision of food, transportation, household utensils, clothing, water sanitation, health services, shelter and basic education. In theory, this assistance should not exceed a period of two years; however, in many countries these projects have lasted much longer. 3. Voluntary Repatriation: This covers activities linked to the return home of a refugee group. Assistance is designed to help refugees overcome practical difficulties in repatriating to their home country. In the country of asylum, it includes preparations for departure and measures to help organise the journey home. Often, tripartite commissions are formed, involving the countries of origin and asylum together with the UNHCR. 4. Local Settlement: This is where voluntary repatriation is not yet possible and refugees have the opportunity to legally reside in the host country and to enjoy civil and economic rights comparable to the local population. Activities in this category help refugees become self-supporting in the country of first asylum and to integrate into the economic and social life of the new community. 5. Resettlement: This is when no other durable solution is feasible. Activities in this category enable refugees to resettle in a new country. This is usually applied when refugees are admitted only temporarily to a country of asylum, on condition of permanent resettlement elsewhere. It may also be the only answer if local integration is impossible for ethnic, political or economic reasons. Family reunion is another major reason for resettlement.

67 UNHCR, An operations Management Handbook for UNHCR’s partners, 2003 35

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Over the years there has been an enormous increase in so-called “Internally Displaced Persons” (IDPs). IDPs not only far outnumber refugees, but they also raise some of the most urgent human rights and humanitarian problems of our time and present a serious challenge to prevailing conceptions of sovereignty and intervention. They can be found on all continents, but particularly in Sub-Saharan Africa, the Middle East, former Yugoslavia and in the republics of the former Soviet Union.

Until the beginning of the 1990s, IDPs were defined negatively: they were people who had fled their homes, but who were not refugees (having remained within their country). It is only recently that efforts have been made to devise a comprehensive definition of IDPs. An important step was taken in 1992 when the UN Secretary General proposed a working definition. This definition was revised in 1998. The Guiding Principles on Internal Displacement now define IDPs as:

… persons or groups of persons who have been forced or obliged to flee or leave their homes or places of habitual residence, in particular as a result of or in order to avoid the effects of armed conflicts, situations of generalized violence, violations of human rights or natural or human-made disasters, and who have not crossed an internationally recognized state border.68

Although not defined as refugees, IDPs are given some protection and assistance by the UNHCR, when they are found in the same areas as refugees, and when it is considered that they form an integral part of a comprehensive solution to the refugee problem.

The High Commissioner is responsible to the General Assembly for the discharge of the Office’s Mandate; he or she is responsible to the Secretary General for the administration of the Office. The UNHCR’s statue specifies that the High Commissioner should be elected by the General Assembly, on the nomination of the Secretary General.

The UNHCR has its headquarters in Geneva, Switzerland, and maintains approximately 70 field offices around the world. It has 6,700 staff working in more than 116 countries.

In terms of financial resources, the UNHCR is almost entirely dependant on voluntarily contributions. Only part of the UNHCR’s administrative expenditure is met from assessed contribution (from the UN regular budget).

4.4 Example of a specialised agency – World Health Organisation (WHO)

The World Health Organisation (WHO) was established in 1948. Over the past 60 years, the WHO has played a prominent role as a norm-setter of the international health system and in launching, coordinating and implementing public health programmes and initiatives. It has its headquarters in Geneva, Switzerland.

According to its constitution the ultimate objective of WHO is “the attainment by all people

68 Ibid 36

Multilateral development cooperation in perspective Jonna Carlsson of the highest possible level of health”.69 The constitution also specifies that the WHO’s role is to act as the directing and coordination authority in international health. WHO tasks range from eradication of diseases, improving aspects of environmental health, the establishment of international norms and standards of biological vaccines and pharmaceutical products, and the provision of support in health emergencies. The WHO has identified six core functions: • Providing leadership on matters critical to health and engaging in partnership where joint action is needed; • Shaping the research agenda and stimulating the generation, translation and dissemination of valuable knowledge; • Setting norms and standards and promoting and monitoring their implementation; • Articulating ethical and evidence-based policy options; • Providing technical support, catalysing change and building sustainable institutional capacity; and • Monitoring the health situation and assessing health trends.

In some countries, the WHO functions as the implementing organisation for development programmes. This is especially marked in Latin America, where the WHO’s Regional Office—the Pan American Health Organisation (PAHO)—plays a major operative role. In addition, the WHO often plays an active role in disaster aid.

The WHO began its humanitarian activities as late as 1993, and has not yet clearly defined its role. A humanitarian identity is now taking shape, whereby the WHO is assuming the role of coordinator and technical advisor rather than that of operative organ..70

The WHO had, as at October 2006, 193 members. The World Health Assembly is the supreme decision-making body for the WHO. It generally meets in Geneva in May each year, and is attended by delegations from all 193 member states. Its main function is to determine the policies of the Organisation. The Health Assembly appoints the Director General of the WHO supervises the financial policies of the organisation, and reviews and approves the programme budget. It considers reports of the Executive Board, which it instructs in regard to matters which require further action, study, investigation or reporting.

The Executive Board is composed of 34 members technically qualified in the field of health elected for three-year terms. The main functions of the Board are to ensure that the decisions and policies of the Health Assembly are effectuated, to advise the Secretariat and to facilitate its work in general.

The WHO is financed from two principal sources: assessed contributions from member countries and voluntary contributions. Together they finance the regular budget. The relationship between these sources has changed significantly over the past biennium.71 The level of the regular budget has increased minimally, whereas the amount of voluntary contributions has risen substantially. Voluntary contributions now represent some 70 per cent of the total financial resources of the organisation.

69 Sida, Sweden’s Development Co-operation with WHO: a strategy for the period 2002-2005 70 Minelli, Elisabetta, World health Organization: the mandate of a specialized agency of the United Nations, 2006, http://www.gfmer.ch/TMCAM/WHO_Minelli/Index.htm 71 Ibid 37

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The day-to-day work of the WHO is carried out by its Secretariat, which is staffed by some 8,500 health and other experts and support staff, working at headquarters, in the six regional offices, and in 147 country offices.

4.4.1 WHO as a norm setter

The eradication of smallpox is among the finest achievements of the WHO, which coordinated the international effort to combat this disease. It is the first time in history that a human disease has been totally eliminated. This became feasible because the virus causing the disease was transmitted only by direct human contagion; there were no animal reservoirs or human “carriers”. Victims of the disease were immune to further attacks, while successful vaccination at three-year intervals gave essentially complete protection.

Eradication was based on a strategy of surveillance containment and vaccination. Although a global programme of eradication was initiated in 1959, it was not until 1967—when a special WHO budget with increased bilateral and multilateral support was prepared—that a definitive target date of 10 years was set for global eradication.72 By the end of 1977 this goal was achieved. The global eradication of the disease was declared by the World Health Assembly in 1980. By 1985 all WHO member states had discontinued routine smallpox vaccination, and no country required smallpox vaccination certificates from international travellers.

The response to the smallpox crisis demonstrated the role of the WHO as the leader in human crisis response. It is only possible for the WHO to take on the role of leader and standard setter because the world community supports it in this role. The WHO must remain constantly informed about the entire world health situation and be able to obtain and disseminate relevant data, technology and other resources needed to prevent, monitor and respond to “epidemic, endemic and other diseases” as stated in its constitution.

4.5 Example of an office under the Secretariat – Office for the Coordination of Humanitarian Affairs (OCHA)

In December 1991 the General Assembly adopted Resolution 46/182, designed to strengthen the United Nation’s response to both complex emergencies and natural disasters.73 In addition it aimed at improving the overall effectiveness of the UN's humanitarian operations in the field. The Office for the Coordination of Humanitarian Affairs (OCHA) was established as a consequence of this.

The OCHA has headquarters in both New York and Geneva. It is present in 44 countries, including 23 field offices, two Regional Disaster Response Advisers (RDRA) and six Regional Offices (RO). The New York office focuses on policy and advocacy, and interfaces with the Security Council, the Economic and Social Council, the General Assembly and other political organs of the UN, while Geneva concentrates on support to the field and resource mobilisation. At country level, the OCHA operates through its field offices which support UN Humanitarian Coordinators and country teams. The OCHA maintains regional support offices in Abidjan, Johannesburg and Nairobi, as well as Regional Disaster Response Advisers in

72 Ibid 73 op cit, OCHA 38

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South Asia, the Pacific and the Caribbean and Latin America. OCHA has 137 core staff working at Headquarters, and another 170 working in the field.

In today’s complex emergencies, civilians are often direct targets of violence. The OCHA works with key stakeholders to develop policies and advocacy strategies designed to ensure the protection of civilians in armed conflict and respect for international humanitarian law. It also seeks to draw attention to “forgotten emergencies” that are not in the media spotlight. The OCHA also works with the operational agencies to aid an estimated 24 million internally displaced people in the world.

The OCHA maintains an in-house emergency response capacity supported by a 24-hour monitoring and alert system to be able to deploy staff at short notice to rapidly evolving catastrophic events. In addition, the OCHA supports several networks that enable the humanitarian community, as a whole, to respond quickly to emergencies and disasters.

The OCHA cooperates with other humanitarian actors in the field. The head of the OCHA, as Emergency Relief Coordinator, chairs the Inter-Agency Standing Committee (IASC), which comprises all major humanitarian actors, including the Red Cross Movement.74 By developing common policies, guidelines and standards, the IASC assures a coherent inter- agency response to complex emergencies and natural and environmental disasters.

The OCHA receives its funding from two sources. Approximately ten per cent is derived from the regular UN budget while the remainder from extra-budgetary resources donated by member states and donor organisations.

74 Ibid 39

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5. Multilateral Development Banks

Multilateral Development Banks are international financial institutions whose shareholders include both (borrowing) developing countries and (donor) developed countries. The development banks mobilise resources from private capital markets as well as from official sources to be able to give loans to developing countries on better than terms. They provide technical assistance and advice for economic and social development and also provide a range of complementary services to developing countries and to the international development community.

The term Multilateral Development Banks (MDBs) typically refers to the World Bank Group and the four Regional Development Banks:

• The African Development Bank (AfDB) • The Asian Development Bank (AsDB) • The Inter-American Development bank Group (IDB) • The European Bank for Reconstruction and Development (EBRD)

5.1 The World Bank Group

The World Bank Group consists of five international organisations responsible for providing finance and advice to countries for the purposes of economic development and eliminating poverty. Before gaining membership in the World Bank Group’s affiliates a country must be a member of the IBRD. Its five agencies are:

• International Bank for Reconstruction and Development (IBRD), established in 1945 • International Finance Corporation (IFC), established in 1956 • International Development Association (IDA), established in 1960 • International Centre for Settlement of Investment Disputes (ICSID), established in 1966 • Multilateral Investment Guarantee Agency (MIGA), established in 1988

The term “World Bank” generally refers to the IBRD and IDA, whereas the World Bank Group is used to refer to the five institutions collectively. For the purpose of this paper IBRD, IDA and IFC are of most interest.

The IBRD offers assistance to middle income and to poor but credit worthy countries. It also works as an umbrella for more specialised bodies under the Bank. As explained in the first section of this paper, the IBRD was the original arm of the Bank, which was responsible for the reconstruction of post-war Europe. It is now involved in developing countries.

The International Finance Corporation (IFC) works to promote private sector investments by both foreign and local investors. It provides advice to investors and businesses, and it offers normalised financial market information through its publications, which can be used to

40

Multilateral development cooperation in perspective Jonna Carlsson compare across markets.75 The IFC also acts as an investor in capital markets and assists governments in the privatisation of inefficient public enterprises.

The International Development Association offers grants and loans to the world’s poorest countries on exceptionally favourable terms.76

The International Centre for Settlement of Investment Disputes facilitates and works towards a settlement in the event of a dispute between a foreign investor and a local country.77

Finally, the Multilateral Investment Guarantee Agency (MIGA) supports foreign direct investment in a country by offering security against the investment in the event of political turmoil. The guarantees come in the form of political risk insurances, meaning that MIGA offers insurance against the political risk that an investment in a developing country may involve.78

184 member countries are shareholders of the IBRD. To become a member a country must first join the International Monetary Fund (IMF). The size of the share of each of the shareholders, like that of the IMF’s shareholders, depends on the size of a country’s economy. Thus, the cost of a subscription to the Bank is a factor of the quota paid to the IMF. There is an obligatory subscription fee, which is equivalent to 88.29 per cent of the quota that a country must pay to the IMF. In addition, a country is obliged to buy 195 Bank shares. Of these 195 shares, 0.60 per cent must be paid in cash in US dollars, while 5.40 per cent can be paid in a country’s local currency, in US dollars, or in non-negotiable non-interest bearing notes. The balance of the 195 shares is left as “callable capital”, meaning the Bank reserves the right to ask for the monetary value of these shares if and when necessary. A country can subscribe for a further 250 shares, which do not require payment at the time of membership but are left as “callable capital”.79

The IDA was created in September 1960 as it became clear that the poorest developing countries needed softer terms on their loans than those offered by the IBRD. On the initiative of the USA, a group of the IBRD’s member countries decided to set up an agency that could lend to the poorest countries on the most favourable terms possible. Its founders saw the IDA as a way for the “haves” of the world to help the “have-nots”. But they also wanted the IDA to be run with the discipline of a bank. For this reason, US President Dwight Eisenhower proposed, and other countries agreed, that the IDA should be part of the IBRD and thus of the World Bank.

The IDA provides soft loans to countries that lack creditworthiness and have no access to the financial market. This means that credits can be extended to countries whose balance of payments cannot sustain the burden of repayment required for IBRD loans. Terms are more favourable than those provided by the IBRD. These loans are essentially interest-free, have a grace period of 10 years and a maturity of 35-40 years.80

75 Swedish Ministry for Foreign Affairs and Institute of Development Studies, A foresight and Study of the Multilateral Development Banks, Stockholm, Fritzes, 2000. 76 Ibid 77 Ibid 78 Ibid 79 Ibid 80 op cit, Bistånd Genom Internationella Organisationer 41

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165 countries are members of the IDA and, as mentioned above, a country must be a member of the IBRD to be accepted as a member of the IDA. Officers and staff of the IBRD serve concurrently as officers and staff in IDA. The World Bank has its headquarters in Washington D.C. and offices in New York, Brussels, Paris, Frankfurt, London, Geneva and Tokyo, as well as in more than 100 countries of operation.

5.1.1 Governance

The World Bank Group is presided over by a president. The World Bank’s member countries are represented by a Board of Governors, which is the highest decision making body. Each member country appoints one Governor and one Alternate Governor in accordance with the Bank's Articles of Agreement.81 The Governor and Alternate each serve a five-year term and may be reappointed. If a member of the Bank is also a member of the IDA, that member’s appointed Governor of the Bank and the Alternate also serve ex-officio as Governor and Alternate on the IDA Boards of Governors. Generally, these Governors are government officials, primarily ministers of finance or ministers of development.

Previous WB Presidents

Eugene Meyer June – December 1946 John J. McCloy 1947 - 1949 Eugene R. Black 1949 - 1963 George D. Woods 1963- 1968 Robert McNamara 1968 – 1981 Alden W. Clausen 1981 – 1986 Barber Conable 1986 – 1991 Lewis T. Preston 1991 – 1995 James Wolfensohn 1995 – 2005 Paul Wolfowitz 2005 - 2007

The Executive Board is responsible for the conduct of the general operations of the Bank and exercise all the powers delegated to them by the Board of Governors under the Articles of Agreement. Five Executive Directors are appointed by the five members holding the largest numbers of shares (currently the United States, Japan, Germany, France and the United Kingdom).82 The remaining Executive Directors are elected by groups of other members. Executive Directors and Alternates of the Bank serve ex-officio as Executive Directors and Alternates of the IFC and the IDA (as long as the country that appoints them, or any one of the countries that have elected them, is also a member of the IFC and the IDA). Members of the MlGA Board of Directors are elected separately.

5.1.2 Financing and replenishment

The IBRD provides grants and loans to governments and public enterprises, always with a government guarantee of repayment. The funds for the grants and loans come primarily from the issuing of World Bank bonds on the global capital markets. These bonds are rated AAA

81 Ibid 82 op cit, Encyclopaedia of nations, http://www.nationsencyclopedia.com/United-Nations-Related-Agencies/The- World-Bank-Group-THE-INTERNATIONAL-DEVELOPMENT-ASSOCIATION-IDA.html 42

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(the highest possible) because they are backed by member states’ share capital, as well as by borrowers’ sovereign guarantees.83 Because of the IBRD’s AAA credit rating, it is able to borrow at relatively low interest rates. As most developing countries have considerably lower credit ratings the IBRD can lend to countries at interest rates that are usually quite attractive to them, even after adding a small margin (about one per cent) to cover administrative overheads.84

While the IBRD raises most of its funds on the world’s financial markets, the IDA is funded largely by contributions from the governments of the richer member countries. Thus the IDA is a “soft” lending institution, for which about 60 per cent of the loan is a gift element.85 As the IDA’s loans are deeply concessional, the IDA’s resources must be replenished periodically, usually every three years.

Donors come together every three years to replenish IDA funds. Deliberations from donor countries are included in a Deputies report that sets out the agreed arrangements, amounts and its relative burden sharing. When the discussion is completed, management presents the Deputies report to the Board of Executive Directors for approval.

Thus far, there have been 14 replenishments. Donor contributions account for more than half of the US$33 billion in the IDA’s 14th replenishment, which finances projects over the three- year period ending 30 June 2008.86 The largest pledges to IDA14 were made by the United States, the United Kingdom, Japan, Germany, France, Italy and Canada, but less wealthy nations also contribute to the IDA.87 Turkey and Korea, for example, once IDA borrowers, are now donors. Countries currently eligible to borrow from the IBRD (but not from the IDA)— Brazil, Czech Republic, Hungary, Mexico, Poland, Russia, the Slovak Republic, and South Africa—are also IDA14 donors. Discussions are currently taking place about the next replenishment, IDA 15.88

To increase openness and to ensure that the IDA’s policies are responsive to country needs and circumstances, representatives from each IDA region were invited to take part in the IDA13 and IDA14 replenishment negotiations. In both instances, background policy papers were publicly released, as well as drafts of the replenishment reports prior to their finalisation.89

IDA funds are allocated to the borrowing countries in relation to their income levels and records of success in managing their economies and their ongoing IDA projects. As mentioned, there is no interest charge, but credits do carry a small service charge, currently 0.75 percent on funds paid out.

Since 1960, the IDA has lent US$170 billion to 108 countries. Most loans address basic needs, such as primary education, basic health services, and clean water and sanitation. The

83 Ibid 84 Ibid 85 Ibid 86 Ibid 87 Ibid 88 Regeringen, Redovisning av verksamheten i Internationella valutafonden, Världsbanken och de regionala utvecklingsbankerna under 2003/04.

89 Ibid 43

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IDA also funds projects that safeguard the environment, improve conditions for private business, build infrastructure, and support reforms to liberalise countries’ economies and strengthen their institutions. All of these projects have the primary aim of paving the way for , job creation, higher incomes and better living conditions.

Three factors determine whether countries are eligible for IDA assistance90:

• Relative poverty, defined as Gross National Product (income) per person below an established threshold, currently US$1.025 per year. • Lack of creditworthiness to borrow on market terms and therefore a need for concessional resources to finance a country's development programme. • Good policy performance, defined as the implementation of economic and social policies that promote growth and poverty reduction.

Some “blend borrowers”—countries like Indonesia and India—are eligible for IDA loans because of their low per person incomes, but are also eligible for IBRD loans because they are financially creditworthy.

Each borrower’s project proposal is assessed to ensure that the project is economically, financially, socially and environmentally sound. During loan negotiations, the IDA and the borrower agree on the development objective, outputs, performance indicators and implementation plan, as well as a loan disbursement schedule.91 This agreement is juxtaposed with a Poverty Reduction Strategy Paper. Before the IDA grants the loan it must be accepted by the Executive Board.

As a consequence of the findings of an internal evaluation of the World Bank’s performance in the 1980s, James Wolfensohn in 1995 introduced a reform package. The work of the Bank is presently characterised by these reforms. The established overall objective of the Bank is to fight poverty. The reform package consisted of several initiatives92:

• In 1996 the World Bank and IMF endorsed a joint initiative to assist the poorest countries to reduce their debt burden to a sustainable level, in order to make more resources available for poverty reduction and economic growth, the so called Highly Indebted Poor Country Initiative (see further details below). A new Trust fund was established by the World Bank to finance the initiative and it was administered by the IDA. • Poverty Reduction Strategy Papers are prepared by member countries through a participatory process involving domestic stakeholders, as well as external development partners, including the World Bank and IMF. Updated every three years with annual progress reports, PRSPs describe a country's macroeconomic, structural and social policies and programmes over a three-year or longer period to promote broad-based growth and reduce poverty, as well as associated external financing needs and major sources of financing.

90 Ibid 91 Ibid 92 Ibid 44

Multilateral development cooperation in perspective Jonna Carlsson

The World Bank has at present a dual role, both as a knowledge centre and a financial institution. It has a long and substantial experience in development and an extensive analytical capacity. This positions the Bank as world leader in several policy areas. It is active in many areas, such as HIV/AIDS, health, education, environment, financial reforms, energy and the private sector. It also takes on an advocacy role through its work with, for instance, subsidies in the agriculture sector. Moreover the Bank, through the IDA, is currently the largest donor for basic social services in the poorest countries. For the last twenty years, the World Bank has, through its dual roles, dominated the international agenda within the development field.

It is important to point out that there is an inherent tension between the financing and development missions of the World Bank. It must raise capital in world financial markets and obtain concessional resources from donor countries to make loans to its borrowing countries, and at the same time provide technical assistance, grants and concessional financing to its poorest members. This delicate balancing act between acting as a bank and financial intermediary on the one hand, and meeting the needs of the world’s poorest countries and peoples on the other, has become increasingly difficult. These predicaments will be further discussed in the last section of this paper.

5.2 Regional Development Banks

The regional development banks (RDBs) are modelled similarly to the World Bank. Their strength lies in the fact that they are majority owned and staffed by the regional countries themselves. This means that the Banks are well placed to provide a uniquely regional voice and perspective to the development debate. Furthermore, all four Regional Development Banks endorse the Millennium Development Goals as strategic benchmarks for their funding activities. Their main goal is to fight poverty by promoting sustainable economic and social development in member countries. To this end, they provide grants and loans for investments in the public sector and for private-sector promotion.

Regional development banks also meet foreign exchange needs arising in the wake of structural reforms of the economic and social sectors. In addition to various loans, they provide member states with technical assistance to help them implement reforms and programs.

RDBs raise funds on the capital market by issuing bonds that are guaranteed by the capital of the share holders. Funds also come from reserves built from earlier surpluses and from the equity capital of the banks. Thanks to the liability accepted by member states, the banks can obtain low-interest loans on the market and can pass these on to members at only slightly higher rates.

In 2005 The Asian, African and Inter-American Development Banks each experienced senior management changes. Haruhiko Kuroda took over as President of the AsDB in February 2005. Donald Kaberuka became ADB President on 1 September and a month later Luis Alberto Moreno took the helm at the IDB. The African Development Bank will be analysed as an example of a regional bank.

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5.3 African Development Bank (AfDB) – an example

The AfDB was established in 1964 with the intention of promoting economic and social development in Africa. Its headquarters was located in Abidjan, Côte d’Ivoire, and officially began operations in 1967. However, due to political instability in Côte d’Ivoire, the Governors’ Consultative Committee (GCC) decided to move the Bank to its current temporary location in Tunis, Tunisia. The Bank has been operating from this temporary relocation agency since February 2003.

As with other international development banks, the AfDB consist of different entities—the African Development Bank (ADB), the African Development Fund (AfDF) and the Nigeria Trust Fund. The AfDF was established in 1973 and is the equivalent to the IDA in the World Bank, whilst the African Development Bank is the equivalent to the IBRD in the World Bank.

The main objective of the AfDF is to reduce poverty in regional member countries by providing them with concessional loans with repayment over 50 years, including a 10-year grace period, with a service charge of 0.75 per cent per annum and grants for projects and programmes, as well as technical assistance for studies and capacity-building activities.93 The Nigeria Trust Fund is a special AfDB fund created in 1976 with the objective of assisting low- income regional member countries. It provides non-concessional financing for economic and social development.

The AfDB has four principal functions94:

• To provide grants, loans and equity investments for the economic and social advancement of regional member countries. • To provide technical assistance for the preparation and execution of development projects and programmes. • To promote investment of public and private capital for development purposes. • To assist in coordinating development policies and plans of regional member countries. • To give special attention to national and multinational projects and programmes which promote regional integration.

The AfDB currently has 77 members: 53 African countries and 24 American, European and Asian countries.

93 op cit, A foresight and Study of the Multilateral Development Banks 94 African development Bank, http://www.afdb.org/portal/page?_pageid=473,968663&_dad=portal&_schema=PORTAL 46

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6. International Monetary Fund (IMF)

As discussed in the introductory chapter, the IMF was created to oversee the Bretton Woods system. However, since this system was amended in 1976 its main functions have focused on the following95:

• Surveillance: On a regular basis—usually each year—IMF visit member country to gather information and hold discussions with government and officials, and often with business executives, labour representatives, members of parliament, and civil society organisations. The mission then submits a report to the IMF's Executive Board for discussion. The Board's views are subsequently summarised and transmitted to the country's authorities. In recent years, surveillance has become increasingly transparent. Nine out of ten member countries now agree to the publication of a public information notice, which summarises the views of the IMF’s staff and the Board. Four out of five countries publish the staff report itself.

• Technical assistance: Technical assistance is normally provided free of charge to any requesting member country, within IMF resource constraints. About three-quarters of IMF technical assistance goes to low and lower-middle income countries, particularly in sub-Saharan Africa and Asia. Post-conflict countries are also major beneficiaries, with Timor-Leste, the Democratic Republic of Congo, Iraq, and Afghanistan among the top recipients in recent years. The IMF gives technical assistance in areas such as macroeconomic policy, tax policy and revenue administration, expenditure management, , the exchange rate system, financial sector sustainability, and macroeconomic and financial statistics. Since demand for technical assistance far exceeds supply, the IMF gives priority to providing assistance where it complements and enhances the IMF’s other key forms of assistance—surveillance and lending.

• Lending: A member country may request IMF financial assistance if it has a balance of payments need—that is, if it cannot find sufficient financing on affordable terms to meet its net international payments obligations. An IMF loan is intended to ease the adjustment policies and reforms that a country must undertake to resolve its balance of payments problems and to restore conditions for economic growth. An IMF loan is usually provided under an “arrangement”, which stipulates the specific policies and measures a country has agreed to implement to resolve its balance of payments problems. The economic programme underlying such an arrangement is formulated by the country in consultation with the IMF, and is presented to the Fund's Executive Board in a “letter of intent”. Once an arrangement is approved by the Board, the loan is released in phased instalments as the programme is implemented.

6.1 The structure of the IMF

The IMF is controlled by its 184 member countries, each of which appoints a representative to the IMF's Board of Governors. The Board of Governors, most of whom are finance ministers or heads of the central bank of member countries, meet once per year to seek consensus on

95 IMF, What the IMF does, http://www.imf.org/external/work.htm 47

Multilateral development cooperation in perspective Jonna Carlsson major issues. In the interim, day-to-day operations are managed by a 24-person Executive Board. The world’s major economic and political powers—the United States (the IMF’s largest shareholder), Great Britain, Japan, Germany, France, China, Russia, and Saudi Arabia—each have a permanent seat on the Executive Board, while the 16 other directors are elected for two-year terms by groups of countries composed on a regional basis, for example, the Caribbean, Africa, and Southeast Asia. The Executive Board, in turn, is presided over by the Managing Director, who is elected for renewable five-year terms.96

In all IMF operations voting power is weighted based on the size of a member’s economy and therefore the quota allocation of each country. Decisions are usually taken by consensus, but the United States, as the IMF’s major shareholder, has major influence in the institution’s policy-making.

The Fund’s current Managing Director is Rodrigo de Rato of Spain, who took office in early 2004. Each member of the Executive Board runs a particular department of the IMF. These offices are concerned with:

• particular regions of the world, such as Europe, Africa, Middle East, Western Hemisphere, and Asia/Pacific; • functions such as finance, technical assistance, fiscal planning, capital markets, research, and statistics; and • administrative functions of the IMF itself.

The IMF has a total of 2,800 employees, mostly based in its Washington D.C. headquarters.

6.2 Financing

Countries deposit 25 per cent of their quota subscriptions in or major currencies, such as US dollars or .97 The IMF can call on the remainder, payable in the member’s own currency, to be made available for lending as needed. Quotas, together with the equal number of basic votes each member has, determine each country’s voting power. Quotas also help to determine the amount countries can borrow from the IMF. Most IMF loans are financed out of members’ quotas. The exception is loans under the Poverty Reduction and Growth Facility, which are paid out of trust funds administered by the IMF and financed by contributions from the IMF itself and a broad spectrum of its member countries.98

If necessary, the IMF may borrow from a number of its financially strongest member countries to supplement the resources available from its quotas. It has done so on several occasions when borrowing countries have needed large amounts of financing and where a failure to help them might have put the international monetary system at risk.

Like other financial institutions, the IMF earns income from the interest charges and fees levied on its loans. It uses this income to meet funding costs, pay for administrative expenses, and to maintain precautionary balances. In the early 2000s, there was a decline in the demand for the IMF's non-concessional loans, reflecting benign global economic and financial

96 IMF, http://www.imf.org/external/np/sec/memdir/eds.htm 97 IMF, http://www.imf.org/external/fin.htm 98 Ibid 48

Multilateral development cooperation in perspective Jonna Carlsson conditions, as well as policies in many emerging market countries that had reduced their vulnerability to crises.

6.3 Cooperation between the Bretton Woods Institutions

Although the Bank and the IMF are distinct entities, they work together. There has always been cooperation between these institutions, but it has become more pronounced since the 1970s. Twice a year the IMF and the World Bank meet to discuss and make decisions about development issues. This forum is called the Development Committee.

The Committee’s mandate is to advise the Boards of Governors of the Bank and the Fund on critical development issues and on the financial resources required to promote economic development in developing countries. Over the years, the Committee has interpreted this mandate to include trade and global environmental issues in addition to traditional development matters. The Committee has 24 members, usually Ministers of Finance or Development, who represent the full membership of the Bank and the Fund. They are appointed by each of the countries, or groups of countries, represented on the Boards of Executive Directors of the Bank and the Fund.

Due to the fact that the Bretton Woods institutions were given the leading roles in sustaining third world debt through the Structural Adjustment Programme (SAP), they have greatly expanded the remit of their responsibilities, extending their reach into areas which were traditionally outside their jurisdiction, while downgrading or abandoning other aspects of their work. The World Bank has expanded its work from the implementation of projects to broader aspects of economic reform. Simultaneously the IMF has gone beyond the concern with balance of payment adjustments to focus on the structural reforms. Some overlapping by both institutions has inevitably occurred, making cooperation between the Bank and the IMF crucial. Devising programmes that will integrate members’ economies more fully into the international monetary and financial system while at the same time encourage economic expansion, continues to challenge both Bretton Woods Institutions.

Until the 1990s the implementation of SAPs was a condition for heavily indebted countries to receive financial assistance. In order to continue receiving funds, countries already devastated by debt obligations had little choice but to adhere to conditions mandated by the IMF and the World Bank. In addition, most donor countries did not contribute bilateral assistance to any developing nation unless that country had accepted these conditions and was implementing a SAP.

The implementation of the SAPs has since become a hotly debated issue because of the adverse impact these have had on social development and in particular on people’s living standards. Upon their formation, the IMF and the World Bank hoped that most developing countries experiencing problems related to economic growth, incomes and employment would have these problems resolved quickly through IMF and World Bank assistance. The World Bank provided about half of its financial support in the form of SAPs and the other half as project investments, whereas all of the IMF’s support was in the form of SAPs.

It became clear by the end of the that the intended objectives of SAPs had achieved, at best, mixed results. Both internal and external factors played a part in generating this situation. It is extremely difficult to distil and assess the special effects of structural

49

Multilateral development cooperation in perspective Jonna Carlsson adjustment from those of other processes and pressures. However, it is clear that the reforms recommended by the Bretton Woods institutions overlooked the likely impact of exogenous factors such as drought, ; HIV/AIDS and civil strife in the region on one hand, and the economic legacy characterised by a combination of frictional and structural vulnerability and skewed resources on the other. In addition, political rhetoric resulted, not only in less commitment to the programme, but also adversely affected the resource utilisation, the performance of certain sectors of the economy and the general living conditions of the population.

As a response to the severe criticism of the SAPs, the IMF and the World Bank in 1996 launched the Highly Indebted Poor Country (HIPC) initiative. This was a form of debt relief for the poorest and most indebted countries.

To be considered for HIPC initiative assistance, a country must: 1. be IDA eligible, 2. face an unsustainable debt burden, beyond traditionally available debt-relief mechanism, 3. establish a track record of reform and sound policies through IMF and IDA supported programmes and 4. have developed a Poverty Reduction Strategy Paper (PRSP)99

Once a country has met or made sufficient progress in meeting these criteria, the Executive Boards o the IMF and IDA formally decide on its eligibility for debt relief, and the international community commits to reducing debt to the agreed sustainability threshold. This is called the decision point. Once a country reaches its decision point, it may immediately begin receiving interim relief on its debt service falling due. In order to receive the full and irrevocable reduction in debt available under the HIPC initiative, however, the country must: 1. establish a further track record of good performance under the IMF and IDA supported programmes, 2. implement satisfactorily key reforms agreed at the decision point and 3. adopt and implement the PRSP for at least one year.100

Once a country has met these criteria, it can reach completion point, at which time lenders are expected to provide the full debt relief committed at decision point.

The programme has been criticised for having excessively strict criteria for inclusion, for providing inadequate debt relief, for money being invested in projects that provide no long term good in the development of the country, and for requiring countries to adopt measures which are likely to increase poverty. For example, inadequate debt relief for such countries means that they will need to spend more on servicing debts, rather than on actively investing in programmes which can reduce poverty.

99 IMF, http://imf.org/external/np/exr/facts/hipc/htm 100 Ibid. 50

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7. Sweden and multilateral development cooperation

Multilateralism has always been of extreme importance for a relatively small country like Sweden. This is the case in many policy areas but not least in development cooperation. Thus since the creation of the United Nations, Sweden has emphasised the importance of multilateral development assistance. Although continuity is a central characteristic of Sweden’s participation in multilateral affairs, there have been certain changes in emphasis over time in response to changes in the world economy and to the problems in developing countries. While poverty reduction has always remained an important objective, considerations and priorities have changed over time. For example, the role of the international organisations as financial intermediaries in crisis situations, as vehicles for the coordination of aid and other financial resources and as instruments for dialogue.

The justifications for Sweden’s participation in multilateral development cooperation are generally in line with the justifications discussed in the introductory section of this paper. However, it can be emphasised that all the policy documents which deal with multilateral development cooperation have pointed to Sweden’s foreign policy interest in supporting and strengthening the UN as the central body for promoting peace and security in the world as the most prominent argument in favour of multilateral development cooperation. It is vital to Sweden’s interest, as a relatively small state, that international interchange and cooperation be conducted in orderly forms. The UN system forms the basis of an international social system founded on peace, law and justice. Although the realisation of such a goal is still far away, the UN system is regarded as a framework for consultations and cooperation among the nations of the world.

The Millennium Development Goals (MDGs) of 2000 established for the first time in history a common international agenda for development cooperation. The MDGs not only involve an international view of what needs to be done to eradicate extreme poverty in the world, but also how it should be done. Arising from the international conferences in Monterrey in 2002 and in Johannesburg the same year, and from the high level meeting in Paris in 2005, there are now specific tasks and areas of responsibility for recipient countries and donors alike. Similarly, the Swedish Policy for Global Development, which was endorsed by parliament in December 2003, emphasises the importance of the support for multilateral development cooperation.101 It also stresses that the UN plays a leading political role in the global efforts to achieve the MDGs. This means that there is a national Swedish agenda as well as an international agenda for development cooperation.

The table below shows that total Swedish multilateral contributions have increased steadily over the years, at current prices in Swedish kronor, but the multilateral share of total Swedish aid has declined significantly since the 1960s. One explanation of this trend is that the very high level of multilateral assistance in early years not only reflected recognition of the merits of multilateral aid and of the experience and administrative capacity of the international organisations, but also the fact that Sweden’s bilateral aid administration at that time was new, small and inexperienced. As the Swedish bilateral aid administration was built up and became increasingly efficient, it was able to shoulder a larger share of Sweden’s total aid effort. On average, the multilateral share has remained at that the same level since. In spite of

101 Swedish Ministry for Foreign Affairs, Shared Responsibility Sweden’s policy for global development, 2002, http://www.regeringen.se/content/1/c6/02/45/20/c4527821.pdf 51

Multilateral development cooperation in perspective Jonna Carlsson the marked inversion of the relative shares of bilateral and multilateral aid, the Swedish multilateral share is still somewhat above the average of member countries of the OECD Development Assistance Committee (DAC).

Table 2. Total Swedish multilateral contributions in US million dollars.

1200 1100 1000 900 800 700 600 total in US million dollar 500 400 300 200 100 0 1960 1970 1980 1990 2005

Source DAC

The DAC conducts periodic reviews of the development cooperation efforts of DAC members. The policies and programs of each member are critically examined approximately every four years. The Peer Review is prepared by a team consisting of representatives of the Secretariat working with officials from two DAC members who are designated as “examiners”.102 Sweden went through a Peer Review in 2000 and again in 2005. Both reviews pointed out that Sweden has not yet formulated a strategy as a basis for its engagement with multilateral institutions, in spite of increasing support to the multilateral system. Nor does Sweden undertake systematic tracking of the performance of the multilateral institutions.103

In response to this recommendation Sweden has now developed a strategy for multilateral cooperation which will work as normative guidance for government departments and public authorities that collaborate with the UN system or the international financial institutions, or participate in the development work of the EU. The strategy is general and comprehensive and does not relate to any one individual organisation.

The strategy suggests that Sweden should base the size of its contributions on the effectiveness and relevance of each institution. Some of the suggestions follow104:

• Sweden should be restrictive with earmarked contributions. • Contributions to vertical funds should be given only in particular cases.

102 DAC, Sweden Peer Review: Main finding and recommendations, 2005, http://www.oecd.org/document/15/0,2340,en_2649_34603_34950223_1_1_1_1,00.html 103 Ibid 104 Regeringen, Strategi för multilateralt utvecklingssamarbete, Stockholm, 2007, http://www.sweden.gov.se/content/1/c6/07/99/38/07dd96c9.pdf 52

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• A review should be made of the roles, relations and procedures of the Ministry for Foreign Affairs and the Swedish International Development Cooperation Agency (Sida). • Sweden should strive for an enhanced influence in the most important organisations at board level, and particularly in terms of their reform agendas.

7.1 Organisation and management of Swedish development cooperation

The Swedish Parliament ultimately makes the decisions on the aims, principles and budget for Swedish international development cooperation. Within the Parliament, the foreign affairs standing committee is responsible for issues regarding development cooperation, including the budget. The finance standing committee is involved in certain questions that deal with international financial institutions.105

The Ministry for Foreign Affairs (MFA) is broadly responsible for national policies for development cooperation, coordination among Swedish official actors and policies (together with the Ministry of Finance and/or Sida) related to the UN, the EC, the international financial institutions and humanitarian action, which together represent about 37 per cent of Sweden’s ODA.106 The MFA is a large and complex ministry, led by the three ministers responsible for foreign affairs, development cooperation and migration. The development cooperation element of the ministry is composed of three departments—one for multilateral development cooperation, one for development cooperation policy and one for development cooperation budget and management.107 An important feature of the MFA is its responsibility for the embassies, delegations and consulates around the world, many of which deal with development cooperation programmes.

The Swedish International Development Cooperation Agency (Sida) has functioned as Sweden’s primary bilateral implementation since 1995, when Sida became home for five different aid-related agencies. Sida is headed by a director-general, who also chairs the Sida Board. It is organised as matrix structure composed of four regional departments, five sector departments and seven intra-agency functional departments that have strategic and coordinating functions, including support for multilateral actions. With the recent emphasis on decentralisation of authority to Sida’s 40 field locations, the departments are primarily responsible for supporting work in the embassies.108

Almost half of Sida’s professional staff in Stockholm is located in the sector departments. A sector department of a different kind is the Department for Research Cooperation (SAREC), which administers support to research organisations in developing countries, regional networks, and international and Swedish development research centres, with guidance from a government-appointed Research Council. Sida receives operational instructions from the government in the form of formal instructions, an annual letter of appropriation and MFA- approved field strategies.

105 Op cit, DAC Swedish peer review 106 Ibid 107 Utrikesutskottet, Utrikesutskottets uppföljning av det multilaterala utvecklingssamarbetet, 2005 Sveriges Riksdag. 108 Ibid 53

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The Ministry of Finance (MOF) maintains Sweden’s primary contact with the international financial institutions. There is a special division for International Financial Institutions that works with the World Bank and IMF, in close collaboration with the MFA and Sweden’s Central Bank.109 In addition, the MOF deals with the European Bank for Reconstruction and Development, and is responsible for debt issues and budget support activities (in cooperation with Sida and the MFA).

The MFA usually represents Sweden in the multilateral development organisations, particularly the funds and programmes (UNDP, UNFPA, UNICEF etc). In the case of the specialised agencies of the UN, however, it is the sectoral ministry that has the main responsibility. For example the Ministry for Social Affairs is responsible for the WHO. However, also in these cases, the MFA has the overall responsibility for development policies, including the coordination of the Swedish views in the different organisations. However, there are instances where other ministries are responsible for coordinating the Swedish views. This is, for instance, the case in relation to Sweden’s involvement with the United Nations Environment Programme (UNEP), where the environment and public ministries coordinate Swedish positions. In the IMF and the World Bank the MOF and the Central Bank represent Sweden. Although the MFA is usually also engaged.

7.2 The United Nations System and Sweden

Sweden has traditionally been a very strong supporter of the UN. Sweden has recognised the importance of the world organisation, particularly for the benefit of smaller nations whose wellbeing and security are considerably dependent on their relations with the rest of the world. This support has manifested itself in both active support for peacekeeping operations and in support for the operational activities of the organisation.

Sweden has high expectations of the role of the UN in the area of economic and social development. In Sweden’s view, the UN is essential for the establishment and implementation of global norms, goals and objectives for the livelihoods of people and the behaviour of their institutions.110

Sweden participates actively in the meetings of the executive boards of the funds and programmes and engages in an ongoing dialogue with the UN headquarters and at the country level. The Ministry for Foreign Affairs appoints delegations that represent Sweden in the executive boards of the different multilateral organisations.111 The main task of these delegations is to make sure that Swedish views on important matters are presented to the boards in order to influence the policies and priorities of the various UN organisations. They must also report back to the MFA on policy developments in the UN so that they can be considered in developing Swedish positions. Sida also participates in the Swedish delegations to executive board meetings. Sida is responsible for commenting on operational and substantive issues, for example sector policies, country programmes, methodological issues and evaluation reports.112

109 Ibid 110 Ibid 111 Ibid 112 op cit, working in partnership with UNDP 54

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A number of Swedish citizens have worked or are working, for the UN funds, programmes and the specialised agencies. They contribute expertise at the same time as they learn and get insight into how the UN institutions function. When they return to Sweden this knowledge may be rather useful.

As a consequence of the critical financial situation of the UN in the 1980s, the Nordic countries initiated a Nordic-UN project in the early 1990s which resulted in various recommendations about how to strengthen the UN organisation. The 1990-1991 project was followed by another Nordic initiative in 1996 that had the purpose of further exploring ways of enabling the UN system to better fulfil its economic and social mandate.

Among the conclusions of the 1996 Nordic-UN project was the recommendation that all parts of the UN system should be merged in a phased manner to enhance the coordination of UN activities. The first step would involve bringing the funds and programmes under one umbrella through their agreement to support field unification of all development services at country level.113 The recommendation included changes in the coordination at headquarters level in support of this goal. In retrospect, this recommendation has proven somewhat ambitious. Nevertheless, progress is being made. For instance, the establishment of the UNDG, as well as the practice of drawing up CCAs and UNDAFs reflects some of the ideas that came out of the Nordic reform project.

In line with the Nordic-UN project, Sweden has worked in close collaboration with other members of the executive boards of the respective funds and programmes to support the use of Multi Year Funding Frameworks (MYFF) with the aim of making funding of the organisations more predictable on a multi-year basis. The MYFF identifies goals and objectives of the UN organisations and outlines how the work programmes will contribute to achieving the goals.

From a Swedish perspective, the role of the UN system at a global level—considering its primary position in international development cooperation and in relation to other development actors—should be to114:

• Take the lead in bringing together governments and people of the world to achieve the commitments made at the major international conferences and the development targets made at the Millennium Declaration, and in particular to reduce poverty, monitor the protection of human rights, and conduct a dialogue on issues that are politically and culturally sensitive. • Have a global and regional overview of development issues and to disseminate information and lessons learned among regions, countries and institutions in order to fully play its catalytic role. • Play an active role in situations of conflict and post-conflict where neutrality and impartiality and the ability to coordinate various actors are of significant value. • Promote sustainable human development by providing development, advice, advocacy and financial grants to developing countries.

113 Nordic UN Project. The United Nations in development : reform issues in the economic and social fields : a Nordic perspective : final report., Stockholm, Distributed by Almqvist & Wiksell International, 1991. 114 Ibid 55

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The following conclusions from the Nordic-UN project form the basis of the Swedish position115:

• The major strength of the UN lies in its legitimacy, which derives from a universal and democratic structure. • Greater coherence is needed between the UN’s normative and operational activities. • To maximise the impact of UN development activities, it is necessary for the UN development system to concentrate its resources through unification of its presence at country level into one UN office; with common premises and administration; and with harmonised programming, budgeting and priority setting. • The funds and programmes should implement relevant ECOSOC decisions calling for joint meetings of executive boards.

Sweden has adopted the official view that the UN funds, programmes and agencies must strengthen their coordination at all levels in order to make optimal use of available resources. All UN bodies must actively promote and participate in the coordination mechanisms, subscribing instruments such as the CCA and UNDAF as a means to develop one coordinated UN country programme.

7.2.1 Sweden and multi- bilateral development cooperation

Sida has a long history with multi-bilateral development assistance. Previously, the individual country allocations were entirely channelled through the UN system. In 2007 it is estimated that, together with the multilateral assistance through the MFA, contributions to multilateral organisations will be 50% of the total Swedish Official Development Assistance (ODA).

Sida generally uses multi-bilateral assistance to implement the bilateral country strategies. The country strategies are the Swedish government’s most important policy instrument for development cooperation with individual countries. They are jointly prepared by the MFA and Sida. Once the government has adopted a country strategy, this is given specific form through Sida issuing its own mandates for the preparation of new initiatives. Sida specifies how Sweden views cooperation with the country in question and it also specifies the goals and focus of Swedish development cooperation with that country.

Sida views multi-bilateral development assistance as an effective and practical means of implementing country strategies. For instance, the country strategy may say that Sweden should work with children’s rights. Sweden may choose to use UNICEF as an implementing partner because this strategy involves children’s rights. The reasons for adopting a multi- bilateral implementing instrument in this case may include the following:

1. Sweden does not have a sufficient presence or administrative capacity in the recipient country, but a UN fund, programme or specialised agency’s capacity and work modalities may be considered adequate. 2. A UN fund, programme or specialised agency has comparative advantage in that field.

115 Ibid 56

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3. A UN fund, programme or specialised agency may have a special expertise, which is superior to Swedish expertise in that case.

The table below shows the steady increase over the past years in multi-bilateral development assistance.

7000 6000 5000 4000 Multi-bilateral aid in 3000 milj SEK 2000 1000 0 2002 2003 2004 2005 2006

Source: Sida’s statistical reports 2002-2006

7.3 The World Bank Group and Sweden

The World Bank group, particularly the IDA, has played a prominent role in Sweden’s multilateral development cooperation since the 1970s. Sweden provides more funding to IDA, than to any other multilateral organisation. The priority given to the IDA is based on the fact that the IDA is the institution within the World Bank group that focuses on the poorest countries. Sweden regards the IDA as one of the most effective multilateral channels, because of the results achieved within its area of expertise—finance and infrastructure.

Swedish contributions to the IDA have remained at a high level since the 1960s and have increased significantly over recent years. Sweden’s support for the IDA will reach 6.4 billion Swedish kronor (SEK) during the period 2005-2014. Most of the contributions will go towards the IDA’s regular activities. In addition, Sweden has provided extra contributions of 1.8 billion SEK in total.

The daily work of the World Bank group is led by the Executive Board of Directors, whose representatives are organised in constituencies. Sweden is included in a Nordic-Baltic constituency which is represented by one director on the Executive Board. The Nordic countries hold responsibility for the coordination within the Nordic and Baltic countries on a rotating basis. The Director is nominated by the country that at the time has the responsibility for the coordination and is appointed jointly by all of the countries of the constituency.

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7.4 The regional development banks and Sweden

Sweden was a founding member of the Asian Development Bank (AsDB) in 1966. It did not join the Inter-American Development Bank (IDB) until 1976. Sweden’s greatest commitment has been to the African Development Bank (ADB)—joining its fund in 1972—because Swedish bilateral aid has been concentrated on Africa.

Swedish membership in the regional development banks gives Sweden potential influence in important regional economic and financial issues of importance not only for developing countries but also for Sweden. The development banks are considered to be instruments within the framework of Sweden’s general relationship with developing countries.116 They have a complementary role in Sweden’s cooperation with countries in the region.

Sweden holds a seat as Executive Director of the African Bank (jointly with the other Nordic countries and Switzerland) for three of every 15 years, while in the Asian Bank it is Alternate Executive Director for two years of every 12 years.117 Canada holds the AsDB Executive Director post in Sweden’s constituency or voting group, which includes Canada, the Netherlands and the Nordic countries.118

Sweden’s attempts to exert an influence on the policies and programs of the regional development banks mainly through engagement in the executive boards of the banks, and in negotiations on the replenishment of the funds for lending to poorer countries. Poverty reduction has been the central goal for Sweden in all development banks and funds. Sweden has also proposed increasing the focus on issues such as aid effectiveness and the alignment and harmonisation of donors’ procedures.119

Through Sweden’s membership in the development banks Swedish companies are entitled to participate in the procurement of supplies of goods and services financed by the banks.120

116 Ibid 117 Ibid 118 Ibid

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8. The way forward

The background and the development of the multilateral system have been discussed above. The reason why the various multilateral development organisations were created and how they have evolved over time has been explained briefly. An overview of the various organisations and their functions within the field of development cooperation has been provided.

This chapter aims to highlight some of the major challenges facing the multilateral development system. The intention is not to recommend solutions, but rather to provide a basis for further analysis and discussion about some key issues.

8.1 UN reform proposals – a background

The structure of the United Nations is a legacy of the environment created after the Second World War. To take into account the contextual changes that have taken place over the intervening years several reform programmes have been initiated over the years. In fact, since the late 1960s more than fifty proposals for UN reform have been put forward, originating either from within and outside the UN system. Some of these have brought about changes in the system, while others have stimulated dialogue and influenced international public opinion without being formally adopted and implemented. Member states, renowned experts and diplomats generated most of the early reform proposals. Only two sets of proposals in the 1990s came from the UN itself: the Secretary General Boutros-Ghali’s agenda of 1992 and the reform proposals of Secretary General Kofi Annan of 1997 and 2002.

Most of the reforms have targeted the developmental role of the UN System—the proliferation of bodies, inadequate coordination between the UN organisation and the specialised agencies, its lack of focus and doubt about its impact. Remedies proposed to overcome these shortcomings have mainly taken the form of improvements in institutional arrangements and management issues rather than of programmatic reforms.

Discussions on UN reform have been significantly influenced by the political, economic and social priorities of member states. The reform agenda of the UN has evolved through different phases, but common elements emerge in the proposals. In particular:

• The governance of the UN system; • The balance between the normative and the operational role of the UN; • The perceived proliferation of UN bodies and their lack of coordination; and • The cost-efficiency and effectiveness of the UN’s development functions.

The current reform process, entitled “”, also deals with some of these issues. As a consequence of the Secretary General’s report “In Larger Freedom”, launched in March 2005, the General Assembly appointed a High Level Panel to explore how the UN system could work more coherently and effectively in the areas of development, humanitarian assistance and the environment.121 The panel submitted its report with recommendations for change to the General Assembly on 9 November 2006. The report includes 47 recommendations, which focus on how to strengthen the UN system at country level,

121 UN high level panel, http://www.un.org/events/panel/ 59

Multilateral development cooperation in perspective Jonna Carlsson recommending a common country programme, one director, one budget and a single administrative function.122 Other recommendations aim to improve the administrative structure and governance at the country level and to consolidate the UN’s work on gender.

Common Country Programmes have been established in seven countries as pilot cases for the implementation of the “Delivering as One” recommendations. These countries are Rwanda, Mozambique, Tanzania, Cape Verde, Vietnam, Pakistan, Uruguay, and Albania. The aim is to expand the number of pilot countries to 20 by 2009, 40 by 2010 and to all other appropriate countries by 2012.123 Each pilot country will work collaboratively with the UN to determine how to apply the model in each country.

8.2 Governance of the UN system

As discussed in the introductory section, the present UN system, and particularly the Security Council, reflects the global power structure of the post World War II era, when most nations were either colonial rulers or under colonial rule. In 1965, as a consequence of pressure from a growing membership, the UN added four new seats for elected members to the Security Council (for two-year periods). However, the five permanent members having the power of veto have remained unchanged. It can be argued that this arrangement renders the Security Council both undemocratic and to some extent ineffective. Despite the presence of 10 elected members, it has been argued that the Security Council remains geographically unbalanced and seriously unrepresentative.

For more than a decade, the UN General Assembly has debated the need for a Security Council reform but has been unable to reach agreement. At the heart of this debate lies a conflict over claims to new permanent Security Council seats. Germany, Japan, Brazil, India, South Africa, Nigeria and others have demanded this special status and there has been some international support for their respective claims. However the permanent members of the Security Council prefer to maintain the status quo, and many other states firmly oppose the creation of new permanent seats, insisting that the Council should only be enlarged with elected members. Other critics are concerned that enlargement would make the Council unwieldy and ineffective. Some have proposed regionally based seats as a future-oriented and more democratic reform.124

Beyond the problematical issue of membership, reform proposals include changes in the Security Council’s procedures and working methods, such as the rules of procedure, more public meetings, and other steps to make the work of the Security Council more transparent and accountable.125 These reforms are arguably more attainable, although not unproblematic. Unlike membership changes, they do not require changes in the UN Charter; they can be implemented by a decision of the Security Council itself.

122 Ibid 123 Ibid 124 Op cit, The United Nations in development: reform issues in the economic and social fields: a Nordic perspective: final report. 125 Magarinos, Carlos A., Economic Development and UN Reform: towards a common agenda for action, Vienna, UNIDO, 2005.

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Similarly, attempts to either reform the Economic and Social Council (ECOSOC) or create an entirely new global decision-making body for economic and social matters have been ongoing for the past 50 years. The Commission on Global Governance proposed in its 1995 report a “Global Council”. Similar ideas were raised in subsequent years, under various names (for example, World Economic Council, Council for Sustainable Development, Global Governance Group, Economic Security Council).126 The goal of all these initiatives was to create a global decision-making body that was more competent and more authoritative than ECOSOC, while at the same time more representative and open than the Security Council or the G8.

The obvious question remains as to how effective the Security Council can become without being more representative and more reflective of today’s world, for example by including major economic powers like India, Japan and Germany. Related to this dilemma is the fact that the major function and responsibility of the Security Council is the maintenance of international peace and security. However, over time the Security Council’s performance of this role has been dysfunctional and, has attracted severe criticism. Questions persist about how the UN can work more effectively as a mediator in conflict situations and how the UN can participate more effectively in peace keeping missions.

8.3 Normative versus operative

As we have seen in previous sections, the UN specialised agencies were created to act as norm-setters in their respective fields. However, many of these organisations have evolved into operational organisations overlapping in some areas with the funds and programmes. The structure of the funding of the system is partly responsible for this overlap. On the one hand, UN member governments are pushing for the UN to act as the norm-setter it was established to be, but on the other hand, a lack of sufficient funding has driven some of the specialised agencies to mobilise voluntary contributions for operations in the field, thus becoming more of operational agencies (see below).

We have also seen that the UN and the Bretton Woods institutions were established with the intention that they would work complement each other. Over time both the World Bank and the UN institutions have gradually expanded their roles so that there is increasing overlap and duplication in their work. A balance needs to be struck between healthy competition and inefficient overlap and unfilled gaps. It can be argued that the BWIs and the UN need to work more closely together to coordinate their efforts, remove unnecessary duplication building on their respective strengths.

8.4 Earmarked funding to UN system

In recent years budget support has become an increasingly important instrument in bilateral development cooperation. The departure from the project-based approaches of the past has served to boost ownership of the partner government and improve effectiveness and efficiency. At the 2005 DAC High Level Meeting in Paris the donor governments agreed to move towards the increased use of budget support in order to harmonise aid modalities and increase the effectiveness of aid.

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On the other hand, at the same time there has been a significant increase in earmarked contributions to the UN system. This has encouraged individual UN agencies to carry out their own programmes rather than working in coordination with the UN system and entering into joint programmes. This has sometimes resulted in duplication and inefficiency in the UN system and has made it more difficult for the UN and the programme country to adhere to strategic decisions. Donors have made earmarked contributions for particular countries, programmes or projects as a way of promoting programmes that are commensurate with their particular priorities and ensuring there is a visible link between their funding and particular outcomes. This has produced the perverse outcome that the funds and programmes are more likely to use their core un-earmarked funding for activities that are of lower priority for donors, and perhaps also for developing countries.

Funding for the major UN funds and programmes has risen over the past few years, after a decline in the 1990s. However, the increase in non-core funding has been more dramatic. A decline in the share of core funding and a growth in non-core funding has led to a UN system that is difficult to manage, has an unclear division of labour, has multiple and confused lines of accountability and makes the governance of individual agencies as well as of the entire UN system very complicated. The availability of non-core contributions encourages sometimes unhealthy competition between agencies.

As discussed in previous chapters, the contributions to the multilateral development agencies have increased significantly over the years. Many countries are presently advocating for multilateralism as a form of development cooperation as well as for a stronger UN within the field of development. However, it can be argued that the existing funding arrangements undermine the overall governance and accountability of the UN. The UN clearly cannot be more effective than the members allow it to be.

8.5 The International Financial Institutions (IFIs)

As discussed in relation to the UN, the original division of tasks between the UN and the World Bank—with the UN providing technical cooperation, pre-investment and feasibility studies and the Bank credits for investments—has become blurred. The technical assistance provided by the World Bank Group and the regional development banks now exceeds that channelled through the UN organisations.

In the past decade the Bank has deepened its social and economic policy work, revised its lending instruments, expanded its lending in social sectors and has given poverty reduction a more prominent role. The Bank has also promoted various financing instruments for capacity building and technical assistance in a plethora of areas and through its non-financing activities, such as the dissemination of research and policy papers and consultancies..

Today the IMF, for a number of reasons, plays a much weaker role in the area for which it was originally created, that of ensuring international financial and monetary stability, although the need for such a function has never been greater given the globalisation of finance capital and the volatility of financial flows today. The institution is also weaker in exercising discipline over exchange rate policies of its member states and has very little authority over the important players in the .

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On the other hand, the IMF has increased the extension of short-term current account financing to countries experiencing long-term and structural (rather than short-term) financial crises. In this role the IMF has been seriously circumscribed by its introduction of conditionality, as well as by the policy prescriptions of the adjustment programmes accompanying such financing. As a result the IMF’s financing operations for crisis countries tend to focus on servicing external debt to private creditors and maintaining , rather than on assisting countries to manage the social and economic repercussions of financial crises.

It should be emphasised that this change has not happened in a vacuum; the acquiescence of the IMF’s member states has been significant. However, key concerns are the consequences of the fact that these organisations are operating in fields that they were neither created for, nor are specialised in.

8.6 Governance of the IFIs

Two catchwords in the field of development today are ownership and partnership. Genuine ownership by the cooperation partner is recognised as one of the key conditions for sustainable development. The paradigm of development cooperation has shifted to a partnership model, where donors’ programmes and activities operate within locally owned development strategies.

At the same time it can be seen that the governance structures of the Bretton Woods institutions inherently favour the rich industrialised countries. This has been exacerbated over the years both by the development of the global economy and the shift in the work programmes of the IMF and the World Bank. The result is that those countries least affected by decisions of the World Bank and the IMF have the most influence and the most capacity to hold the institutions accountable. Meanwhile those countries that are most affected by IMF and World Bank policies and programmes have the least influence on the boards. This issue is referred to as the “voice question”. Sweden and some other countries have argued for developing countries to be given stronger representation in the board of the World Bank. It can be argued that there exists only a very restricted sense of ownership and partnership within the governance of the Bretton Woods institutions.

8.7 Efficiency versus legitimacy

The UN can be seen as a democratic institution with its “one country, one vote system”. However, this also implies inefficient and time-consuming decision-making. Power politics are regularly played between the permanent members of the Security Council, and in the General Assembly between countries representing the developed and the less developed world, and across other divisions, thereby exacerbating systemic inefficiencies.

Conversely, the World Bank is regarded as somewhat undemocratic with its “one dollar, one vote” system. On the other hand, it is arguably a more effective and responsive system because of its small governing boards. The World Bank Group has taken a leadership position in many areas of the development field. This is due partly to the fact that the Bank has substantial resources, enjoys more freedom, and can recruit world-class expertise thanks to its prestige and high salary levels.

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Some questions for consideration:

• Does it matter that an organisation is operating in fields that it was not created for? • Can efficiency and legitimacy exist together? • What roles do the member states want these institutions to play, and can member states agree on these roles? • The World Bank has evolved to become a major actor in development. How does this affect the potential for the World Bank to fulfil its basic objectives? What role does it leave the UN system?

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