VZCZCXYZ0000
PP RUEHWEB

DE RUEHUNV #0558/01 3480814
ZNR UUUUU ZZH
P 140814Z DEC 09
FM USMISSION UNVIE VIENNA
TO RUEHC/SECSTATE WASHDC PRIORITY 0407
INFO RUCNDT/USMISSION USUN NEW YORK 1801
RUEHVEN/USMISSION USOSCE 0296

UNCLAS UNVIE VIENNA 000558 
 
SIPDIS 
 
 
E.O. 12958:N/A 
TAGS: SNAR KCOR KCRM PGOV UNCND
SUBJECT:  APPROVED BUT AUSTERE UNODC BUDGET PREVENTS UNODC FROM 
HONORING UN COMMITMENTS ON DRUGS, CRIME, CORRUPTION AND TERRORISM, 
COSTA SAYS 
 
REF: UNVIE 386 
 
¶1.  SUMMARY:  In a starkly worded assessment, Executive Director 
Antonio Costa indicated that the UN Office on Drugs and Crime 
(UNODC) cannot honor the UN's commitments to fight drug control, 
crime, corruption and terrorism -- together forming one of the 
Secretary General's eight priorities for 2010-2011 -- under the 
newly approved 2010-2011 budget.  In his address to the December 1-4 
Reconvened Sessions of UNODC's governing bodies, the UN Commissions 
on Narcotic Drugs (CND) and Crime Prevention and Criminal Justice 
(CCPCJ), Costa called Member State attention to the increasing 
financial difficulties faced by the UN entity which serves as the 
primary guardian of the UN's conventions against organized crime, 
corruption, drugs and international terrorism.  The U.S. delegation 
(USDEL), led by UNVIE DCM and INL's John Sullivan, noted UNODC's 
financial situation and its formulation of an austere budget and 
cost-cutting measures, and showcased continued U.S. commitment to 
the provision of voluntary contributions to support the work of 
UNODC, particularly since UNODC's overall budget is slated to 
decrease by seven percent in the coming biennium.  USDEL partnered 
with EU Member States to reestablish the Independent Evaluation Unit 
(IEU), which UNODC had proposed to merge with its Strategic Planning 
Unit (SPU).  Instead, USDEL and other partners requested that UNODC 
house the IEU within the Office of the Executive Director, rather 
than with another entity of UNODC, in order to be consistent with UN 
evaluation practices.  UNODC agreed to reallocate existing UN 
Regular Budget resources to fund the Chief of the IEU.  Voluntary 
resources will be used to finance additional IEU staffing 
requirements and operational activities. END SUMMARY. 
 
------------ 
COMPOSITION 
OF USDEL 
------------ 
¶2.  UNVIE DCM and INL John Sullivan led USDEL to the Reconvened 
Sessions of the CND and CCPCJ.  The following officials also 
comprised USDEL: UNVIE John Brandolino, INL Christine Cline, UNVIE 
Adam Davis and INL Cassandra Stuart. 
 
------------ 
COSTA: MISMATCH BETWEEN HIGH 
PRIORITIES AND LOW FUNDING 
CREATES BUDGET SHORTFALLS 
------------ 
¶3.  UNODC Executive Director Antonio Maria Costa delivered opening 
remarks before the Reconvened Sessions, revisiting the financial 
difficulties of the past two years while foreshadowing the 
burgeoning financial crisis facing UNODC in 2010-2011.   Costa 
lamented that while the world places ever greater priority on 
addressing the destabilizing effects drugs, crime, corruption and 
terrorism has on economies, societies and security, member states, 
are not adequately funding UNODC.  Costa reported that despite the 
fact that the Secretary-General's strategic framework for the period 
2010-2011 identified drug control, crime prevention and combating 
terrorism as one of the eight priorities of the UN, UNODC's budget 
will shrink by seven percent in the biennium 2010-2011. 
 
¶4.  Specifically, voluntary contributions for UNODC core activities 
are anticipated to fall by more than 25 percent, from 30 million USD 
in 2008-2009 to approximately 22 million USD in 2010-2011. 
Highlighting the eight million USD decline in General Purpose funds, 
Costa declared that this 28 percent hit would have a 
disproportionate effect on UNODC's ability to support, backstop and 
otherwise manage the project-money used in the field.  Costa 
estimated that contributions to UNODC for project activities will 
also fall from 408 million USD in 2008-2009 to 376 million USD in 
2010-2011 -- a decline of almost 10 percent.  Due to this decline in 
funding, UNODC anticipates a negative impact on the delivery of its 
program work and has undertaken austerity measures, which include 
limiting staff contracts.  Finally, Costa announced that UNODC will 
continue to receive only 1 percent of overall UN Regular Budget 
resources, despite the political support it receives from a broad 
spectrum of Member States.  The meagerness of UNODC's UN regular 
budget share is illustrated, Costa asserted, by the fact that the 40 
million USD decline in project-fund contributions is almost 
commensurate with the entire regular budget line of the UNODC. 
 
¶5.  As a result of these cuts, staff morale has declined.  To 
demonstrate this impact, Costa introduced Mr. Stefano Berterame, the 
UN Office in Vienna (UNOV) Staff Council President (employee 
association).  Mr. Berterame emphasized that staff retention will be 
difficult with the increasing lack of job security felt by many 
UNODC staff members.  Thus far, UNODC has cut at least 29 positions 
from its headquarters in Vienna and in offices around the world, and 
closed or reduced the size of technical assistance offices in the 
field.  These cost-cutting measures are not final, and more staff 
cuts could occur in the future.  (COMMENT:  This was the first time 
that the UNOV Staff Council President had addressed the UNODC 
governing bodies.  His statement gave a personal face to the 
 
 
declining budget numbers and confirm anecdotal indications of low 
staff morale within UNODC.  END COMMENT.) 
 
¶6.  Costa concluded that UNODC has sought, and implemented, 
cost-cutting measures across the board, as well as efficiency gains 
from more strategic and prioritized programming.  The office 
continues to strengthen partnerships with members of the UN family 
and regional organizations in order to provide more effective 
assistance and more sustainably share costs.  But, Costa concluded, 
UNODC is nevertheless left with an intractable dichotomy: ever 
increasing international attention to the danger of drugs, crime and 
corruption (not to mention terrorism) which translates into more and 
more mandates from Member States, with decreasing voluntary 
contributions and a static share of the UN Regular Budget.  Thus, 
Costa starkly concluded, the UNODC cannot honor the UN's commitments 
to combat drug control, crime and terrorism prevention. 
 
-------------- 
2010-2011 BUDGET 
APPROVED 
--------------- 
¶7.  Member States of the CND and CCPCJ approved the UNODC 
consolidated budget for the biennium 2010-2011.   The budget 
contains resource projections for the Fund of the UN International 
Drug Control Program in the amount of 273 million USD, which 
represents a decline from 312 million USD (12.5 percent) for the 
biennium 2008-2009.  Projections for the UN Crime Prevention and 
Criminal Justice Fund stand at 152 million, which represents a 
decline from 153 million USD for the biennium 2008-2009.  Overall 
staffing for UNODC will also decline from 196 posts to 170 posts for 
the drug program and from 60 posts to 51 posts for the crime program 
(representing an overall shrinkage of 13.6 percent).  USDEL noted 
Costa's stark assessment of the budget, expressed appreciation for 
Costa's efforts at economy and pledged continued U.S. commitment to 
the provision of voluntary funding to support the work of UNODC, 
particularly in the form of unearmarked or soft earmarked 
contributions in order to maintain UNODC's ability to execute its 
core technical assistance programs. 
 
--------------- 
US AND EU PULL 
TRIGGER ON 
CREATING INDEPENDENT 
EVALUATION 
---------------- 
¶8.  USDEL partnered with EU Member States, notably Sweden and the 
Netherlands, in order to re-establish the Independent Evaluation 
Unit (IEU), which since its creation in 2003, has served as the unit 
focused on assessing the impact of UNODC programs.  UNODC, as a 
result of the financial crises of the past two years, had proposed 
to merge the IEU with its Strategic Planning Unit (SPU) (in charge 
of project and program monitoring) as a cost saving measure. 
However, this initiative was bitterly opposed by the EU, Norway and 
Switzerland.  Therefore, USDEL and other partners requested that 
UNODC house the IEU separately from the SPU and within the Office of 
the Executive Director, rather than in UNODC's organizational 
structure, in order to be consistent with UN evaluation practices. 
 
¶9.  UNODC also agreed to reallocate existing UN Regular Budget 
resources to fund the Chief of the IEU.  Voluntary resources will be 
used to finance additional IEU staffing requirements and operational 
activities, which total 1.560 million USD for 2010-2011.  UNODC 
indicates that it currently has 739,000 USD available but will 
require the remaining fund balance in order to ensure an effective 
IEU for the coming biennium.  To this end, the UK made an 
announcement that it would provide 100,000 Pounds Sterling 
(approximately 160,000 USD) toward the work of the IEU.   Additional 
EU and Norwegian contributions are anticipated. 
 
¶10.  The reconvened CND wrapped up with a short pro-forma event 
where Iranian Ambassador Soltaniyeh was acclaimed as the next CND 
Chairman.  As agreed by IO and INL, the USDEL was represented fir 
the session only by a second secretary. 
 
------- 
COMMENT 
------- 
¶11.  While the reconvened sessions of the CND and CCPCJ did not 
delve into substantive counter-drug and anti-crime issues, the 
debate highlighted the detrimental impact that budget declines could 
have on UNODC's ability to continue delivering effective technical 
assistance in these areas.  The re-establishment of the IEU could 
provide a more systematic means to review and assess the 
organization's continued ability to deliver assistance.  At the same 
time, it will be important for the United States to maintain and 
hopefully increase the amount of general purpose and soft earmarked 
contributions provided to UNODC in order to build a stable and 
predictable operating base.  We should also consider whether 
providing the UNODC just one percent of the UN's Regular Budget 
 
 
resources is the best way to advance our anti-drug, terrorism, 
corruption and crime interests. Mission continues to believe that a 
U.S. reevaluation of the UNODC's Regular Budget share is 
appropriate, and we would welcome IO and USUN advice about the 
advisability of such action.  While Mission recognizes that such a 
change in U.S. policy may present opportunity costs elsewhere, and 
defer to our New York colleagues on this issue, Mission believes 
that UNODC's ability to deliver results on important USG priorities 
such as anti-crime and corruption treaty implementation, and 
stemming the flow of Afghan heroin, will be jeopardized if we cannot 
overcome the contradiction Costa highlighted between UNODC's mission 
and resources (reftel).  In order to help UNODC effectively deliver 
the kind of normative and technical assistance that we have come to 
expect, Mission encourages Washington to continue its reevaluation 
of the manner and extent of our political and financial support. 
UNVIE, meanwhile, will continue preaching the gospel of 
streamlining, delayering, and priority setting among UNODC's diverse 
programs. END COMMENT 
 
 
DAVIES