1 programming arrangements for undp regular resources informal consultations with the executive...

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Programming ArrangementsProgramming Arrangementsfor UNDP Regular Resourcesfor UNDP Regular Resources

Informal Consultations with the Executive BoardInformal Consultations with the Executive Board02 June 200502 June 2005

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For DiscussionFor Discussion

Overview of Programming ArrangementsOverview of Programming Arrangements

TRAC-1 Calculation MethodologyTRAC-1 Calculation Methodology

Midterm RecalculationMidterm Recalculation

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Programming ArrangementsProgramming Arrangements

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

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Principles and Legal FrameworkPrinciples and Legal Framework

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

Reaffirms principles of eligibility of all recipient countriesReaffirms principles of eligibility of all recipient countries Recognizes principles of progressivity, impartiality, Recognizes principles of progressivity, impartiality,

transparency, and predictability of flow of resourcestransparency, and predictability of flow of resources Reconfirms importance of annual funding target of $1.1 billionReconfirms importance of annual funding target of $1.1 billion Reconfirms TRAC distribution methodologyReconfirms TRAC distribution methodology

Confirms that the amount of regular resources available for Confirms that the amount of regular resources available for programming for any given year is equal to:programming for any given year is equal to:

Amount of regular income minus:Amount of regular income minus:

• Amount allocated for the biennial support budgetAmount allocated for the biennial support budget

• Other amount set aside by the EB for other purposesOther amount set aside by the EB for other purposes

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Programme resource allocation framework 2004-2007Programme resource allocation framework 2004-2007

Programme - Fixed LinesProgramme - Fixed Lines• Human Development Report (HDR)Human Development Report (HDR) $5.3$5.3• Office of Development Studies (ODS)Office of Development Studies (ODS) 1.1 1.1• Economist ProgrammeEconomist Programme 4.5 4.5• Development Support Services (DSS)Development Support Services (DSS) 6.0 6.0• Support to Resident CoordinatorSupport to Resident Coordinator 13.5 13.5• EvaluationEvaluation

2.52.5• South-South Cooperation (formerly TCDC)South-South Cooperation (formerly TCDC) 3.5 3.5

Subtotal – fixed linesSubtotal – fixed lines $36.4$36.4

Programme - Variable LinesProgramme - Variable Lines• TRAC 1.1.1TRAC 1.1.1 47.3%47.3% • TRAC 1.1.2TRAC 1.1.2 31.531.5• TRAC 1.1.3TRAC 1.1.3 7.2 7.2• Regional programmesRegional programmes 9.0 9.0• Global programmesGlobal programmes 5.0 5.0

Subtotal – variable linesSubtotal – variable lines 100.0% 100.0%

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Target resource assignment from the core (TRAC)Target resource assignment from the core (TRAC)

TRAC 1.1.1TRAC 1.1.1• Assigned immediately to programme countriesAssigned immediately to programme countries• Regional share determined by total TRAC 1.1.1 earmarkings for Regional share determined by total TRAC 1.1.1 earmarkings for

countries in the regioncountries in the region

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

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

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TRAC-1 MethodologyTRAC-1 Methodology

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

• Focus on low-income and least developed countries;Focus on low-income and least developed countries;

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

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

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TRAC-1 MethodologyTRAC-1 MethodologyParametersParameters

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

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

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

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

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

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

• Minimum TRAC – $350,000 per year country minimum and Minimum TRAC – $350,000 per year country minimum and “cluster” minimum for multi-country offices“cluster” minimum for multi-country offices

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TRAC-1 MethodologyTRAC-1 Methodology

CalculationCalculation

Step 1: Calculate GNI per capita and population weights.Step 1: Calculate GNI per capita and population weights.

Add an extra weight for LDCs and LICsAdd an extra weight for LDCs and LICs

Step 2: Determine the country’s basic share in the total Step 2: Determine the country’s basic share in the total

resource poolresource pool

Step 3: Make certain basic TRAC 1.1.1 does not go belowStep 3: Make certain basic TRAC 1.1.1 does not go below

floor mandated by EBfloor mandated by EB

Step 4: Make sure that calculated TRAC-1 above does not goStep 4: Make sure that calculated TRAC-1 above does not go

below minimum TRAC-1below minimum TRAC-1

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RationaleRationale

• Executive Board 2002/18 calls for a midterm recalculations of Executive Board 2002/18 calls for a midterm recalculations of TRAC-1TRAC-1

• Initial calculation for the period 2004-2007 based on agreed Initial calculation for the period 2004-2007 based on agreed distribution methodology using 2001 World Bank Atlas gross distribution methodology using 2001 World Bank Atlas gross national income (GNI) per capita and population.national income (GNI) per capita and population.

• The present recalculation is based on the 2003 World Bank The present recalculation is based on the 2003 World Bank Atlas gross national income (GNI) per capita and population.Atlas gross national income (GNI) per capita and population.

• The recalculated TRAC-1 earmarkings will replace the initial The recalculated TRAC-1 earmarkings will replace the initial TRAC-1 earmarkings for the remaining two years of the TRAC-1 earmarkings for the remaining two years of the programming period (i.e., 2006/2007).programming period (i.e., 2006/2007).

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ApproachApproach• First time a full comprehensive recalculation is done within a First time a full comprehensive recalculation is done within a

programming period.programming period.

• Based on the same methodology approved in decision 2002/18.Based on the same methodology approved in decision 2002/18.

• Based on 2003 GNI per capita and population.Based on 2003 GNI per capita and population.

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

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ResultsResults

• A large number of countries reflect potential increases or decreases A large number of countries reflect potential increases or decreases mainly because of a change in the GNI base from 2001 to 2003.mainly because of a change in the GNI base from 2001 to 2003.

• In the past, In the past, intraintra-period adjustments were made based on the same -period adjustments were made based on the same GNI base year (i.e., 2001 GNI).GNI base year (i.e., 2001 GNI).

• New calculations were only done New calculations were only done interinter-period, where countries were -period, where countries were allowed to get a lower TRAC-1 from one period to another.allowed to get a lower TRAC-1 from one period to another.

• Countries moved between income categories:Countries moved between income categories:

6 countries moved from LIC to MIC (Armenia, China, Djibouti, 6 countries moved from LIC to MIC (Armenia, China, Djibouti, Honduras, Sri Lanka and Ukraine)Honduras, Sri Lanka and Ukraine)

1 country moved from MIC to LIC (Bolivia)1 country moved from MIC to LIC (Bolivia)

1 country moved from NCC to MIC (Venezuela)1 country moved from NCC to MIC (Venezuela)

3 countries became new NCCs (Croatia, Poland and Slovak 3 countries became new NCCs (Croatia, Poland and Slovak Republic)Republic)

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OptionsOptions

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

Total of 101 changes.Total of 101 changes.

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

62 countries getting decreases (mostly MICs).62 countries getting decreases (mostly MICs).

$9.6 million TRAC-1 shifted to countries eligible for TRAC-1 $9.6 million TRAC-1 shifted to countries eligible for TRAC-1 increases.increases.

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

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

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Recommendation – Option 2Recommendation – Option 2

Basis:Basis:

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

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