Deputy Secretary-General's Remarks at the Third Plenary on the Funding Model for the RC System

UN Deputy Secretary-General's remarks at the Third Plenary on the Funding Model for the Resident Coordinator System

Excellencies, Ladies and Gentlemen,  

First, I want to acknowledge your constructive and substantive engagement over the last few months. This is a testament to the integral function of the Resident Coordinator.  

We have reached a new level of granularity in the discussion which has better enabled us to understand your concerns.  Your detailed and pragmatic engagement has ensured that the conversation has progressed from 2021.  

We took away the points you raised and analysed them with key internal stakeholders including the Chef de Cabinet, the Comptroller and USG Pollard.  

The Secretary-General has also followed this closely and asked me to convey his appreciation for your constructive engagement throughout this process. 

Excellencies, Ladies and Gentlemen,  

Today, we reconvene to discuss the funding model for the Resident Coordinator system. This is the third plenary consultation since October and a final opportunity for you to provide reflections.   

Let there be no mistake, a discussion about the funding is a conversation about whether we can ensure the long-term viability of the Resident Coordinator system.  

The Resident Coordinator system is the lynchpin of your development system. We have handcrafted it to ensure that the system best supports member states in delivering upon their development plans and priorities.  

But member states are expecting the system to provide the full complement of supports with a modicum of the resources needed, even in crisis and emergency contexts.  

As we conclude the consultations, I want to set out what we have heard and our next steps.  

We heard support for the hybrid 2.0 model, with a greater portion of funding from the regular budget. There is a near universal willingness to take this conversation forward.  

We asked you to present any funding models that you believe could present a viable alternative.  We are grateful for the models proposed.  

Unfortunately, to date, no model has given us confidence that it can address the concerns that we have presented and that provide predictable and sustainable funding for the RC system.  

We heard a proposal to create a development scales of assessment.  

 We are acutely aware that several member states have raised concerns about fairness and the relationship between developing and developed countries. And questions about where the responsibility to pay for development lies.  

This is a legitimate concern given the decline in ODA. And yet - in this context - we are not talking about traditional ODA. The Resident Coordinator system is a core development function – grounded in impartiality, integrity and ownership by all. And not a programmatic expenditure that is seen in the UNCT.   

The regular budget scales reflect a series of considerations including debt burden, share of the global economy, proportional reduction for countries with income per capita below the world average, and a minimum share for countries considered least developed countries. In the hybrid 2.0 model, 142 countries would pay less than $250,000.  

Therefore, we believe a model based on the regular budget scales accounts for a country’s capacity to pay.  

Some have proposed increasing the cost-sharing. The cost-sharing was already doubled in 2019 and is delivering. The entities are paying and investing in reform.  

UNSDG entities provide this funding from their core resources – which is in a precipitous decline.  

Some have asked for information on how the entity’s shares are calculated. They are calculated through a three step formula, comprised of an annual base fee, the entities’ size and the system load based on the number of Cooperation Frameworks signed.  

Some have proposed increasing the levy. Only three contributors administer the levy at source, amounting to approximately $10 million. Therefore, the remaining $40 million is coming from agency programming.  

The administration of this levy places a heavy burden on agencies and increasing it would be tantamount to taking resources away from programming. Increasing the levy would create a disincentive for agencies and countries to administer it. It would also be a disservice to the objectives of member states and the funding compact to reduce earmarking.  

A small group of member states have asked about maintaining a model with voluntary and assessed funding. In 2023, only 13 Member States provided more than what they would pay under the hybrid 2.0 model. 4 of these countries are developing countries (Morocco, Timor-Leste, Kenya and Uzbekistan). This would not be sufficient or reliable.  

Only yesterday, I heard the alarming news that a key donor - who has consistently provided voluntary funding since 2018 – will not be contributing this year. This was due to a reprioritization to climate financing. The loss is the roughly equivalent of the expenditures of 2 RC offices per year.  

Despite better demonstrating results and enhancing information flows – the system is too vulnerable to exogenous shocks. This has renewed our certainty that a funding model with an increased portion of assessed funding is the only way forward.   

Some member states have continued to ask about the repurposing of efficiency gains. Assistant Secretary-General Fernandez-Taranco held a briefing to address this point. Simply put, redirecting efficiency gains has financial and legal impediments as the efficiencies are realized by agencies and funded from programming.  

Moreover, it would be an unsustainable source as efficiency gains will decline as the system becomes more efficient.  

We have noted the different models presented and requests for analysis.  

I would like to address other main point of discussion – the governance and oversight of the Resident Coordinator system.  

We heard the request for more regular engagement with the Development Coordination Office. I firmly believe that we – the UN and Member States alike - will both benefit from transparent and frequent dialogues. In the report, I will propose a way of regularizing strengthened and inclusive dialogues with DCO. I have heard the ideas presented. These include quarterly briefings to discuss topics such as the evaluation of the Resident Coordinator system and management response. I look to be guided by you on these topics further.  

We also heard requests for a strengthening of ECOSOC’s Operational Activities for Development Segment. The Secretary-General has reiterated his support for this numerous times. We stand ready to support member states in carrying forward action on the proposals made.  

Finally, we have noted the points on fifth committee oversight. If we explore a greater portion of funding coming from the regular budget, the governance role of the Fifth Committee over the financing of the Resident Coordinator system will increase.  With the provision of assessed funding, resource requirements will be subject to review and decision by the Fifth Committee, based on the advice of the ACABQ. 

We heard your questions about whether the $281 million budget is necessary as the system has never spent $281 million. This is because the system has never been fully funded and has been established in a staggered manner since 2019. 

As I set out in the previous discussions, we implemented cost curtailment mechanism. These mechanisms are not enduring efficiencies – but rather a blight upon the system’s capacity and our support to countries.  

We have heard from many member states who have felt the impact firsthand.  

When the system was created in 2019, we undertook an assessment of the budget and found initial saving of $9 million to bring the budget down to $281 million. Since that time, the RC system has strived to remain lean and efficient. We have kept a small headquarters presence, with only 7 per cent of our workforce in New York. 

Let us not lose sight of the bigger picture. We are discussing $154 million in regular budget funding – for support covering 162 countries and territories. Less than $1 million for every country supported. This is a fraction compared to the peacekeeping budgets. Member states approved $6.1 billion for 9 peacekeeping operations in 2023.  

In conclusion, I have set out what we have heard and the trajectory of the report. Your guidance on how we can best evidence the value proposition of the system and the impact of it being adequately resourced has been invaluable.  

We close what has been a challenging year, no doubt. But also, a year that reinforced the importance of investing in sustainable development as the only viable pathway for a future of peace, prosperity and dignity for all. Beyond the mechanics or price tags of the reform, it is our ability to deliver on the SDGs and change the trajectory of humanity that is at stake. We cannot lose sight of this.  

In January, we will move to the next chapter of this dialogue. Different opinions remain so we know there is still a journey before us. The road will not be easy but we will walk the road together as we work towards delivering the SDGs.