UN SECRETARIAT RESTRUCTURING JEOPARDISING ITC.

Apr 9, 1992

UN SECRETARIAT RESTRUCTURING JEOPARDISING ITC.

GENEVA, APRIL 8 (CHAKRAVARTHI RAGHAVAN) – The secretariat restructuring exercise being carried out by UN Secretary-General Boutros Boutros-Ghali appears to have hit one more UN agency in economic field of held and benefit to the Third World - the International Trade Centre (ITC), a UN/GATT subsidiary organ.

Boutros-Ghali would appear to have decided that in line with his secretariat restructuring exercise, the post of the head of the ITC, Executive Director, should be downgraded and the new candidate, selected by the GATT and UNCTAD, should be given only a one-year tenure as for other senior UN posts.

The first stage of the secretariat reorganisation scheme (involving abolition of several posts and departments, some created by decision of the UN General Assembly) was announced by Boutros-Ghali in February, and the G77 have conveyed to him their concerns over its effects on economic and social sector and the impact of the decisions on relationship with specialised agencies and coordination.

In March the General Assembly, while approving the launching of a process of restructuring and streamlining of the secretariat stopped short of endorsing the changes announced and merely "took note of the positive actions". It then went on to lay down "criteria" for the reorganisation and asked the Secretary-General to submit to the Assembly at the earliest opportunity a "report on the programmatic impact as well as financial implications of the organisational changes involved in his initiatives and progress attained" in accordance with the resolution.

The Boutros-Ghali decision on the ITC appears to have aroused considerable concern and criticism among the GATT Contracting Parties who fear that a very successful and useful programme of technical assistance to promote Third World exports could now be in jeopardy.

The views of the GATT Contracting Parties are to be conveyed to Boutros Ghali by a two-member delegation consisting of Amb. Lars Anell of Sweden, Chairman of the CONTRACTING PARTIES and Amb. B. K. Zutshi of India, Chairman of the GATT Council.

The two also represent the views of the donors (Sweden is the largest donor through trust funds and other extra budgetary payments) while India would also be representing the beneficiaries of the ITC and its programmes.

Separately, Bangladesh, on behalf of the group of least developed countries in GATT has also addressed a letter to Boutros-Ghali asking for reconsideration of the decision, as an exception to his new UN secretariat personnel policy, and for continuing the post of Executive Director of the ITC as now at the level of an Assistant Secretary-General and a four-year tenure post.

The ITC was headed till January this year by Goran Engblom of Sweden, who at the end of his four-year tenure has returned to his country's foreign service.

The GATT and UNCTAD jointly selected as his successor Mr. McCarthy President of Ireland’s export promotion board for a four-year term at the same level and status as Engblom, namely an UN Assistant Secretary-General's post. The recommendation went to then Secretary-General Javier Perez de Cuellar who passed on the responsibility to his successor who has now decided to downgrade the post and offer only a one-year tenure.

No replacement has been officially announced nor any official decision about the downgrading of the post has been made either, and the ITC is currently headed as acting executive director by the deputy executive director Mr S. Harb, an Egyptian.

But the Boutros-Ghali's thinking and decision has apparently been conveyed to the GATT Director-General who, at a meeting in New York in March, apparently failed to change his mind. Dunkel subsequently reported this to a green room meeting in the GATT and as a result a decision was taken to depute Anell and Zutshi to seek an appointment with the UN Secretary-General and convey the views of the GATT CPs.

At a meeting of the Group of 77 in Geneva at UNCTAD the issue also figured, and it was felt that the G77 concerns should be raised at the meeting of G77 chapters in Geneva this week, and also taken up at the UNCTAD Board level and support of other groups from the North also sought.

Several of the donor countries would appear to have indicated that they might not be ready to continue funding the ITC's operations on the same basis and level, if its executive head is to be downgraded and given only a one-year tenure.

Unofficially, diplomats of developing and developed countries have been somewhat caustic in their comments about the philosophy behind Boutros-Ghali's personnel and reorganisation policies.

Others point out that the savings in the salaries of an Assistance Secretary-General and D2 are not that much, while the status carries a lot of weight in the dealings of any Executive Director with member-governments, donors and beneficiaries.

The least developed countries in their memorandum to Boutros-Ghali have reportedly said that the institutional experience and skills developed in ITC over a quarter of a century would now fall into disrepute and eventual disruption at a time when developing countries were undergoing extensive structural adjustment with a clear thrust in favour of export promotion. The LDCs could end up as clear loser in this situation.

The leadership and functional capacity of the ITC, the LDC memorandum said, needed to be further strengthened and not weakened if more resources were to be attracted through voluntary contributions. Also the legal and juridical implications of the contractual joint venture between UNCTAD and GATT also needed special attention since "the GATT Council may not feel obliged to share the particular interpretations of the UNGA resolution (of 2 March 1992 on the reorganisation)".

The ITC was created in GATT in 1964 to assist developing countries in their trade promotion efforts. Subsequently, in 1967/68, after UNCTAD was founded, the ITC was made a joint UNCTAD/GATT institution and since 1968, it has been operated jointly and in equal partnership by the GATT and the UNCTAD and has the status of a subsidiary organ of GATT and the UN acting through UNCTAD. ITC's activities are annually examined by a joint advisory group consisting of all member countries of UNCTAD and the GATT CPs.

The regular budget of the ITC is shared equally by the UN and GATT - and scrutinised by the budget mechanisms of both bodies. The ITC is an executive agency of the UNDP and is directly responsible for implementing UNDP financed projects in the developing countries related to trade promotion. The ECOSOC has formally recognised the role of ITC as "the focal point for technical assistance and cooperation activities in the export promotion field within the UN system".

In 1991, the ITC had a budget of $55 million of which $16.6 million was on regular budget, $4.8 million in support costs, $ 17.1 million in trust funds and $16.5 million by UNDP. The ITC has a staff strength of 385 - at the headquarters and in the field and in addition has some 700 short-term consultants on assignments on 300 projects in the developing world.