Print
SG/SM/20765
7 June 2021

Financing Model of Resident Coordinator System No Longer Fit for Purpose, Secretary-General Tells Member States, Urging Regular-Budget Funding

Following is UN Secretary-General António Guterres’ briefing to Member States on the resident coordinator (RC) system review report, today:

Over the past four years, we have worked together to reposition sustainable development at the heart of the United Nations.  We have made concrete, far-reaching and lasting changes, not least the establishment of a reinvigorated resident coordinator system.  Today, in line with General Assembly resolution 72/279, I will present the findings of my review of that system, including its funding arrangements.

In short, we have made enormous progress.  Resident coordinators and their teams are delivering improved leadership, coordination and convening.  And those improvements are already translating into a stronger contribution from the UN development system in response to country priorities and needs.  But it is also clear that there is more to be done.

We are not yet seeing the lasting improvements we need in every country where we operate.  Progress is uneven.  And the funding model of the RC system itself is no longer fit for purpose.  If we are to keep the promise of the reforms and the 2030 Agenda, then we simply must go further.  To that end, I have set out a number of proposals for further strengthening the RC system.  I will count on your support in the forthcoming intergovernmental consultations.

In presenting proposals to you in 2017, I was motivated by the ambition captured in the historic agreements of 2015 — the 2030 Agenda, the Addis Ababa Action Agenda and the Paris Agreement.  Those agreements seek nothing less than to transform our world by 2030.  They seek to eradicate poverty, reduce inequalities, and deliver opportunities for all while making peace with nature.

It was clear that such ambition would require nothing less than a parallel transformation of the UN development system.  The system we had in 2016 was deeply fragmented.  It was characterized by the provision of project-based support in areas mostly covered by the Millennium Development Goals.  It was not designed for the challenge of the 17 comprehensive and integrated Sustainable Development Goals agreed in 2015.

The proposals I put forward focused on getting the very best out of what we had — at all levels — and channelling those capacities coherently and efficiently at country level.  I called for the establishment of an independent, empowered and impartial RC system that would coherently mobilize the capacities of all UN entities — whether in-country or not.  The changes we sought called for adequate back-stopping capacities for RCs, new relationships within the UN system, a fresh commitment to transparency and accountability and a significant shift in sustainable funding practices.

In June 2018, the General Assembly responded.  Through resolution 72/279, Member States adopted the most far-reaching development reforms in the history of the Organization.  Since then, every possible effort has been made to fully operationalize the new mandates to reposition the development system.  This includes:  delinking the RC system from UNDP [United Nations Development Programme]; establishing the Development Coordination Office in the UN Secretariat; developing new tools and platforms for integrated planning and programming; operationalizing the RC system and establishing the hybrid funding model.

These achievements should not be underestimated, and I wish to express my sincere appreciation to Member States, the UN development system and, in particular, to UNDP for facilitating a rapid and smooth transition.

It is appropriate that we now ask ourselves if the reinvigorated RC system is functioning as it should.  After analysing all available evidence and data — from independent, internal and external sources — and after hearing directly from you during our consultations, my report draws six overarching conclusions.

First, the RC system is already meeting its immediate objectives.  The pool of resident coordinators we need is taking shape — with sustainable development in their DNA, with strong leadership coordination and convening capacities and significant improvements in both gender balance and geographical diversity.  These RCs are opening the door of UN country teams like never before, through which a wider set of UN entities are entering, including specialized agencies, regional economic commissions and the UN Secretariat.  And they will soon be able to benefit from the new multi-country office arrangements and regional collaborative platforms.

Resident coordinators are also using their improved leadership and authority to engage more consistently and openly with Governments and partners on the ground.  We also see significant improvements in transparency and accountability from country to global levels.  And we see progress in securing a more tailored response to countries in special situations and complex contexts, including in the challenging area of collaboration across our development, humanitarian, and peace operations.

Eighty-eight per cent of programme country Governments indicate that RCs effectively lead country teams, up from 79 per cent only a year before.  Ninety-one per cent indicate that the UN is more relevant to their country’s development needs than compared to three years ago.  National ownership.

Underpinning each of these early achievements is a solid set of back-stopping capacities.  My analysis finds that the five core capacities in the RC offices are functioning perhaps even better than expected.  There are many examples of the important differences they are making in tandem with UN entities and other partners.  In turn, the Development Coordination Office (DCOs), as the engine room of the RC system at global and regional levels, is performing well and benefitting from its position within the Secretariat.

Second, the RC system is leveraging the wider UN reforms.  These reforms were advanced in tandem with a new management paradigm for the UN Secretariat, a recalibration of the UN’s peace and security pillar and wider efforts to secure gender parity and geographical diversity at all levels of the Organization — all of which are mutually reinforcing.

A more coordinated UN development system at the regional level also holds significant potential.  The creation of regional collaborative platforms in each region and the work conducted through issue-based coalitions that address regional and subregional priorities have reinforced the capacities of RCs and UNCTs [United Nations country teams] to respond to country-level and cross-border challenges.  Through field-based DCO regional teams, a dedicated capacity is primed to provide focused support for RCs and UN country teams in their respective regions.  This is a work in progress and will require determined action from the UN development system and oversight from Member States to ensure it bears fruit.

My third finding is that there is clear evidence that these early achievements are translating into a strengthened contribution from the UN development system on supporting Governments to implement the Sustainable Development Goals.  When the COVID-19 crisis hit, the coordination, leadership and convening value of the RC system kicked in to secure a rapid, coherent and effective development response from UN country teams.

Together, the UN development system is delivering concrete, measurable results for the people we serve — in the provision of essential health services; in distance learning support; in expanded social protection; and in tackling the pandemic of gender-based violence.  More than 90 per cent of your colleagues in capitals agree that resident coordinators helped ensure a coherent United Nations response to the pandemic, and also with national ownership.

The challenge now is to emulate this success in the form of integrated support for the transition to inclusive and sustainable development.  In this report, I document some promising signs.

We can already see, for instance, how the Sustainable Development Cooperation Framework process is facilitating more integrated planning and alignment with national priorities and agency mandates.  We can see how RC leadership is enabling more integrated policy advice and joint programmatic support from UN entities on key thematic SDG [Sustainable Development Goals] areas.  And we can see how the RC’s convening role is supporting better partnerships and enabling UN entities to leverage greater financing for countries’ sustainable development priorities.

This more effective support is also being provided in a more efficient manner.  We are well on the way to generating efficiencies, in line with projections made in 2018, thanks to a significant push by individual entities and a 300 per cent increase in gains from UN country team business operation strategies, which have been ploughed back into programmes by the respective entities.  This ensures that the maximum amount of your investment supports concrete action for sustainable development on the ground.

While progress so far is impressive, we are not yet there.  Some important recalibrations are still required.  This is the focus of my fourth finding.  I see scope for improvement in four key areas.

First, the profile, skillsets, and diversity of resident coordinators can be further improved, as can the contribution from DCOs and RCOs.  There is a need, in particular, to ensure that RC performance is effectively monitored and managed.  We also need to secure the right RC profile, tailored for each setting.  Though only 10 of our 129 RCs are double- or triple-hatted, we must do more to ensure we have the right people in place in these most challenging of circumstances.  The new resident coordinator/humanitarian coordinator talent pool will support us in this regard, as will the pre-positioning of surge capacities to be drawn down when needed.

Second, there has been little progress in ensuring that the country team configuration reflects what is called for by the UN Cooperation Framework.  I urge all entities, governing bodies and programme country Governments to tackle this matter with greater determination; and I have called on the UN Sustainable Development Group to develop a more consistent pathway in this regard.

Third, the shift towards the UN response we need for the SDGs is still a work in progress.  There is much we can learn from the COVID-19 response, but we also need to ensure we have the right skillsets within UN entities, the right tools to make a transformative contribution and better partnerships, especially with international financial institutions.

Fourth, the incentives put in place to accompany the reforms need revitalizing.  I am convinced that the UN development system continues to provide a unique value proposition for advancing sustainable development progress at scale.  Yet that value cannot be realized if key targets of the Funding Compact on unearmarked voluntary funding and the capitalization of joint funds, such as the Joint SDG Fund, are not met.

If we do not follow through on the funding changes, the reforms risk running out of momentum.  I urge all countries in a position to do so to support better quality funding for the UN development system to enable the implementation of the 2030 Agenda.  And I call on the General Assembly to reimagine and reinvent the traditional Pledging Conference for Development Activities to help us do this.

The fifth finding in my report relates to the dual accountability function.  There have been widespread changes in the formal sense by UN entities, by boards, by the UN Sustainable Development Group, in response to the arrangements set out in resolution 72/279.  But the deeper shift in behaviour and business models is still a work in progress.  I understand the concerns of all involved.  I, too, have been a principal of a UN agency, faced with all the accompanying pressures.  But we cannot afford to be half in and half out on such a central component of the reforms.  I am therefore calling on the General Assembly to reinforce the dual accountability function set out in resolution 72/279.

I am requesting the Chair of the UN Sustainable Development Group to ensure that governing bodies, which have made considerable efforts to ensure that entities are facilitated to work with coherence across the system, are provided with additional support and tools to monitor adherence to the new arrangements.  I am calling on the UN Sustainable Development Group to address all concerns raised regarding the distinct roles of RCs and UN entities.  This includes clarity as to the specific integrator function of UNDP, building on its successful role as lead of the socioeconomic pillar of the UN’s COVID-19 response and fast-tracking the decade to achieve the SDGs.

Finally, I urge all RCs and every UN entity to abide by the letter and the spirit of the new arrangements.  On this, let me make one point clear.  It is time to move away from outlooks, behaviours and business models that pit one UN entity against the other; the RC against the UN country team and vice-versa.  We live in a world of networked multilateralism.  The UN is one player — a potentially important player.

We must be confident, but we must also be humble.  Our strength no longer lies in just being who we are.  In the era of sustainable development, our strength is contingent on our ability to mobilize the collective integrated capacities of our diverse UN family.

If we are to meet the expectations of Member States, we must embrace the resident coordinators as the clear but collaborative leader of our country teams, while recognizing the symbiotic relationship between effective UN country team members and effective RCs.  This is the essence of the reforms.  Let us embrace it.  And let us move forward, together.

With these changes, I believe we will go a long way to realizing the promise of a revitalized resident coordinator system and a repositioned UN development system.  But all of this will be in jeopardy if we do not secure a sustainable funding model for the RC system.  This is my sixth and final point.

Over the past three years, we have worked to operationalize the compromise hybrid funding model.  I commend all of you for ensuring that it performed so well during this inception period.  But this model is still not generating adequate or predictable levels of resources to ensure the quality and level of response required by countries.

There was a 27 per cent funding gap in 2020.  There is a projected 20 per cent funding gap in 2021.  This places considerable operational constraints on the RC system and it undermines confidence in the reforms overall.  So far, prudent financial management, a staggering of recruitment and redeployment of savings due to operational restrictions related to the COVID-19 pandemic has allowed us to build up the RC system without disruption.

But the current situation creates significant uncertainty.  As we move to full capacity, it will inevitably lead to posts going unfilled on the ground.  It is time to address this issue decisively.  Some have asked if the RC system budget could perhaps be reduced.  But when I look at the performance and make-up of the RC system, I cannot see how we can do this without undermining performance on the ground.

I continue to believe that every country in which the RC system operates is entitled to the minimum of five core capacities in each RC office.  I continue to believe that if RCs are to perform their functions adequately, they need professional and focused support from DCO — which remains a lean operation.  And I continue to believe that a coordination investment that amounts to less than 1.5 per cent of the overall funding of the United Nations for development activities is money well spent.

In short, I believe the budget of the RC system should be maintained as is.  The question, therefore, is how best to fund it.  Having examined what we have, I remain convinced that the most logical and effective way to fund the RC system — a core development function — is through the regular budget of the United Nations.  If this is not acceptable to Member States, then I encourage the consideration of a new hybrid model that builds on the best of what works.

The new model should maintain the current cost-sharing mechanism, which has successfully mobilized up to $77 million from the UN Sustainable Development Group for the last three years.  I also propose the maintenance of the 1 per cent levy on tightly earmarked funding, which has gradually stabilized and, while not perfect, can generate a projected threshold of $50 million each year.  To reduce transaction costs, however, I strongly urge participating Member States to apply the levy at source.

Lastly, I propose we replace voluntary contributions with assessed contributions from the regular budget.  The voluntary contributions so far have been significant and from a growing set of contributors.  But it is clear that voluntary funding will not be enough to cover the bulk of the RC system budget.  The shift to assessed funding — approximately $154 million, or 1.5 per cent of the overall UN budget — is central to securing sustainable, adequate, predictable funding for the RC system, with the widest possible ownership.

This will also place the funding of a core function of the United Nations even more squarely where it should be — at the heart of the Organization.  I believe the case for partial assessed funding is clear.  And the time to address this issue, in my opinion, is now.

Sustainable and inclusive development, grounded in human rights, is our best chance to end poverty in all its forms and secure peaceful and just societies on a healthy planet.  The reform of the UN development system is about ensuring the UN makes the maximum contribution to this founding objective.  It is about ensuring that multilateralism delivers where it matters most — on the ground and in people’s lives.

The progress made in the past three years in creating an empowered, independent and impartial RC system has been rapid, significant and impressive.  It is something that we should all be proud of because it has been a joint effort.  I am immensely grateful to Member States and UN entities for their support and commitment.

Now, we must take the next step.  Our world is at a pivotal juncture.  As countries emerge from the COVID-19 crisis, the UN development system must be ready to support inclusive and sustainable recoveries that can accelerate the implementation of the 2030 Agenda.

I call on the UN development system to further embrace the RC system because it is the best vehicle we have for achieving greater impact.  I encourage all Member States to take the necessary steps to reinforce the role of resident coordinators as leaders, coordinators and convenors and invest in a collaborative UN development system.  And I urge the General Assembly to take decisive action now to secure the sustainability of the RC system and to continue to support this journey to a repositioned UN development system that can rise to the challenge and keep the promise of the 2030 Agenda.

For information media. Not an official record.