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NINTH ITEM ON THE AGENDA

Programme and Budget proposals for 2000-01

Introductory statement by the Director-General

This is my first address to an official ILO body, the Programme Financial and Administrative Committee. The fact that it concerns my Programme and Budget proposals for 2000-01 is a testimony to the harmonious and productive transition at the ILO ensured by close cooperation between Director-General Hansenne and myself. I want to thank him again for his support.

These proposals were prepared under my supervision even before I took office. They are the first product of the work of the Transition Team, working with the staff of the Office. To my knowledge this is the first time that the future budget of an international organization has been prepared by the elected head of the institution with the agreement of the sitting Director-General and the Governing Body. I believe it is a clear expression of the institutional strength of the ILO.

My remarks today reflect to some extent, but also elaborate on, my executive introduction to the proposals. Today's statement should be read together with that introduction. They represent my commitment to you and to our constituency for the work of the ILO and for the management of its affairs at the beginning of the new millennium.

This document translates your wish for a strategic budget into reality. It is also the expression of my deep conviction that strategic budgeting will enhance the quality of our work and will constitute a key management tool in the future.

This document is the culmination and integration of two processes.

One is the preparatory work of this Committee over the past two years in analysing the need to move from a traditional programme budget, based on organizational units, to one based on strategic and operational objectives. Budget flexibility enabling the detailed definition of activities and resource allocations to take place closer to the period of implementation was an important part of your deliberations. The obligation of the Office to report regularly, fully and objectively to the Governing Body on the use of funds and on the results of its programmes, was another. You requested, last November, that resources be set down in the form of budgetary envelopes for the strategic objectives. This has been done.

The other arises from my own perception that despite the considerable interest and support for the ILO, the previous budget suffered from a lack of clear focus and a dispersion of activities that made it difficult to identify the ILO's core message. This conclusion stems from my years of observation from the United Nations, the different exchanges I had during the campaign for my present post and my more recent familiarization in more detail with the variety of ILO activities. The danger of overreaching and underachieving is real.

The strategic budget is the outcome of these two processes.

The four strategic objectives -- principles and rights at work, employment, social protection and social dialogue -- define our purposes and clarify our image. I believe that discussions in the Governing Body and informal consultations show that there is a strong tripartite consensus that today these are the Organization's strategic objectives. But the strategic budget implies more than a consensus on strategy. It will be accompanied by internal organizational reform reflecting the new budget structure, the design of a monitoring and evaluation system for implementation in 2000-01 with defined targets against which we can measure progress and results, emphasis on cost-effectiveness and visibility and transparent reporting to the Governing Body and the Conference. The timetable for these changes is from March to November this year. The basic work will be accomplished by November. It will be necessary to fine-tune these changes as we begin to implement them. I do not want basic institutional reform to be prolonged. Setting a reasonable time-frame to proceed with this work permits us to reduce the inevitable uncertainties that come with reform.

This budget also introduces InFocus programmes. They reflect priorities that are not new to the Organization but which I believe require higher visibility, greater resources and a serious commitment to obtain extra-budgetary funding. They are intended to lead to a greater concentration of effort, to be results-oriented and to involve a high level of team work among the staff of the Office.

The 2000-01 programme provides an opportunity for the ILO to position itself as a valuable, competitive Organization. To do this, the ILO needs to concentrate on three dimension of its mandate and role.

First, as a knowledge-based Organization, it needs to constantly renew its capacity to provide research and information of the highest quality. One of my first decisions since becoming Director-General was to ask from our managers a careful stock-taking of our knowledge base to determine our strengths and our weaknesses. We can build programmes where our knowledge base is strong; we cannot where we are weak. We can influence when we have top-level capacities; we are not taken seriously if we do not.

Secondly, the ILO can only be successful if it can provide effective, relevant and competent services that are needed by its constituents and stakeholders, including a more rapid and effective response to the critical and urgent challenges facing them. Efficiently organizing ourselves for that purpose is essential.

Thirdly, the ILO deals with real-life issues. It must be a strong advocate of its own ideals and agreements and the principles found in its Constitution, the Declaration of Philadelphia and the recent Declaration on Fundamental Principles and Rights at Work.

Knowledge, service and advocacy are all emphasized in the proposals.

Two issues are cross-cutting in these proposals: development and gender. Work on these issues is the business of all our technical and regional programmes. To those who heard my remarks earlier today celebrating International Women's Day, you will know my commitment to act more intensively on the improvement of gender equality. Coming from a developing country I naturally have a special sensitivity on development issues.

The strategic objectives, their corresponding operational objectives and the programme priorities found in the proposals are based on the needs and priorities expressed by ILO constituents. Among the more significant let me cite:

• the preliminary consultation on the budget in March and November last year;
• the adoption of the Declaration;
• the first discussion of the new Convention on child labour, and the Recommendation on job creation adopted last year;
• the review of standard-setting policy by the Governing Body;
• the positive evolution of our relations with the Bretton Woods institutions;
• the Governing Body's evaluation of the Active Partnership Policy.

Aside from the innovation of the strategic budget itself, my proposals call for intensified action and innovation on a number of key issues. The first of these is sustained promotional follow-up on the Declaration. This, of course, awaits decisions to be taken later in this session by the Governing Body. There will be reinforced action on child labour. This year's Conference will have its second discussion on a new Convention on child labour. I have commissioned an external management review of the structures and processes by which the IPEC programme is managed. I want to ensure that the ILO can deliver a cost-effective programme. I also intend this programme to receive adequate core funding from the ILO's regular budget.

These proposals call for increased emphasis on employment issues. You will note that three of the eight InFocus programmes deal with employment. Greater resources are proposed for each of the regions in spite of a zero-growth budget. I have highlighted Africa in particular, together with Asia. I foresee a new level of cooperation with the Bretton Woods institutions. Let me quote two passages from the conclusions of the recent G8 Labour Ministers' meeting in Washington:

We note and welcome the increasing cooperation between the ILO and the IFIs in promoting employment, social safety nets, adequate social protection, core labour standards and effective labour market institutions.

We urge the ILO to strengthen its analysis of the labour market consequences of globalization and examine how integrated labour, economic and financial strategies can help address the challenges associated with globalization.

Our internal arrangements for priority setting and managing technical cooperation are undergoing review. In June, the Conference will discuss a report on technical cooperation, and the results of that debate will guide us in our internal deliberations. This issue has for me the highest importance. It is clear that reforms are needed. As a general policy, I intend that we embark on extra-budgetary financed technical cooperation projects where there is a clear relationship to our strategic and operational objectives and we have a strong knowledge base and core funding from the regular budget. We must ensure that our technical cooperation programmes are coherent. There are always dangers of donor-driven specificity based on particular interests and demand-driven dispersion based on the perception that the ILO is an all-service provider.

Last November, the Governing Body approved 12 sectoral meetings. They are included in these proposals. Nevertheless, in keeping with the logic of a strategic budget, I believe there should be a close linkage between sectoral activities and meetings and the strategic objectives. I propose that the Office enter into consultations with the appropriate members of the Governing Body to determine how this might be achieved in the next biennium.

Other innovations or intensified action are proposed to give the ILO a new role in reconstruction and employment-intensive investment. We will act to improve training and employment opportunities for women, young workers, migrants and the disabled. I want our programmes to reach out more effectively to the informal sector and to small enterprises. We will develop a worldwide campaign on workers' safety. There will be an intensified search for economic and social protection in the face of globalization, uncertainty and growing numbers of working poor. We must develop mechanisms to respond more rapidly to crises. We will aid employers' and workers' organizations to become more influential and to improve services for their members as well as strengthen tripartite and bipartite institutions. As is evident, I am not proposing a complete reshaping of our programmes. Focus is the main guiding criterion -- clarity towards the inside and outside; a vision and a sense of priorities and direction.

Internally I intend to organize the Office to provide a more compact, integrated and transparent structure derived from the strategic budget. I will be creating a senior management team to assist me in running the Office. The notion of team is for me essential. I want the Office to be motivated by common objectives and challenges. After appropriate consultation I wish to implement measures that will stimulate cooperative work between programmes and departments and between headquarters and the field.

I wish to pursue a more relaxed style of management, one that is more open, less hierarchical and less tied to traditional ways of working; a style that promotes cooperation, integration and teamwork rather than distance, individualism and bureaucratic power centres.

Human resources development will be a key priority. I am convinced that a new and better climate of staff-management relations is as possible as it is necessary. There are important reforms needed in our personnel policies, but they must occur in a context of trust, goodwill and a professional understanding of the human resources field. Before and after my election I have met with representatives of the Staff Union on these issues and will continue to do so on a regular basis.

Information technologies offer vital support for all of our activities. I intend to expand their use for internal efficiency and as a vital component of the priority I give to our knowledge, service and advocacy functions. Moreover, we who work in a global organization must adopt a standard technology for electronic communication to ensure effective communications between staff dispersed around the globe.

The Office clearly needs to develop a better culture of communication at different levels. In one instance, between the Office and the Governing Body: as you know, I have a style of dialoguing, inquiring and listening in order to facilitate consensus-building which I hope can be helpful. I believe that the Governing Body and the Office are partners with individual but complementary responsibilities to make the ILO a successful institution. Communication is also needed at other levels: between headquarters and the field, between the ILO as a whole and the world outside our meeting-rooms, between the Office and its constituents and stakeholders, between our work and the information coverage of it. But the key one from my point of view is internal communication within the Office, to which I plan to dedicate special attention.

My proposals are at the same dollar level as the 1998-99 budget. As you are aware, they do not make provision for cost increases in the next biennium. In fact, there are net savings of $785,000, which have enabled additional resources to be allocated to substantive programme activities. These cost savings result from actual cost increases during the current biennium being less than had been anticipated when the 1998-99 Programme and Budget was prepared. Most of those savings relate to staff costs, but significant savings also resulted from the sharp devaluation of certain currencies, particularly in Asia. These exceptional conditions, unlikely to recur in the future, have allowed me not to provide for any cost increases in my proposals.

You are now called upon to consider these proposals and formulate an appropriate recommendation to the June Conference. It is for the Conference to approve the budget and fix the rate of exchange between the Swiss franc and the US dollar. I have undertaken to provide at this year's November session of the Governing Body a budget document showing the allocation of resources by programme with the traditional staff and non-staff resource breakdown, based on the strategic budget approved by the Conference.

I have had fruitful informal consultations with members of the Governing Body during the period this budget was being prepared. I am aware that, despite the Governing Body's consensus on the need for a strategic budget and budgetary envelopes, some may feel uncomfortable about the absence of more detailed financial information. It is in the logic of the transition towards a strategic budget that we move step by step from a general level of allocation of resources by objectives to a specific level of allocation to programmes. I intend this work to begin after this session of the Governing Body and to be completed by the end of this summer. It is a major task that cannot be accomplished quickly if we are to do it seriously. It would not be possible to do this in the time remaining before the Conference. Indeed, given the deadlines for Conference documents we would have only a few days available after this Governing Body meeting to prepare such a document.

You have also before you Volume 2 of the programme and budget, which provides descriptions of the work of the current programme structure foreseen for 2000-01. It essentially expands on the activities described in Volume 1, but according to the structure with which you are familiar. It therefore supplements the information found in Volume 1. This corresponds to a request made by the Governing Body in its decision on strategic budgeting.

We have made an effort to improve the design and presentation of the programme and budget. I trust you find this presentation more user-friendly.

Permit me to end this presentation by quoting paragraph 10 of my introduction to the budget proposals:

This budget discussion comes at a time when the ILO is facing tough competition in the real world beyond its offices and meeting-rooms. Other organizations both public and private are offering similar products and services, sometimes with greater visibility and influence. I am firmly convinced that we are in a good position to address this challenge on the basis of traditional ILO values and ideals. But to do so, important changes are necessary. I want the ILO to become a modern, dynamic Organization which combines adaptability with a strategic vision of its mission. It should be capable of redefining priorities and reassigning resources in a normal management process responsive to new demands and emerging needs. It should be certain of its identity and self-assured of its areas of competence -- an attractive institution that combines knowledge, service and advocacy in creative and imaginative ways to the satisfaction of all its constituents, stakeholders and donors.

Geneva, 8 March 1999.