DRAFT PROGRAMME OF WORK AND BUDGET OF THE ORGANIZATION FOR THE PERIOD Addendum 1. Nota del Secretario

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1 WORLD TOURISM GENERAL ASSEMBLY ORGANIZATION A/17f7 Add.1 Madrid, July 2007 Original: Spanish Seventeenth session Cartagena de Indias, Colombia, November 2007 Provisional agenda item 7 DRAFT PROGRAMME OF WORK AND BUDGET OF THE ORGANIZATION FOR THE PERIOD Addendum 1 Nota del Secretario General In accordance with statutory provisions, the Secretary-General submits to the General Assembly in the main document (A/17f7) the draft general programme of work and budget for the financial period , approved by the Council at its eightieth session held at Hammamet, Tunisia, in June The recommendations of the Programme Committee, the Committee on Budget and Finance and the Executive Council are reflected in this document It should be noted, nevertheless, that the Executive Council wishes to have suggestions as to a possible revision of budgetary assumptions submitted to it by the Secretary-General at its eighty-first session, immediately prior to the Assembly, particularly with respect to such economic parameters as the rates of exchange and inflation, as well as areas in which economies could be realized. The present document sets forth the proposals of the Secretary-General in this regard.

2 A/17r7 Add.1 2 ADMINISTRATIVE, FINANCIAL AND STATUTORY MATTERS Revision of the final amount of the Organization's budget for the financial period [CEIDEC/16(LXXX)] Addendum 1 1. Following the recommendation of the 80th Executive Council, indicated in point 7 of decision CE/DEC/16(LXXX), whereby it entrusted the Committee on Budget and Finance at its forty-eighth meeting with reviewing the budget and studying the possibility, depending upon the economic situation at the Headquarters of cost-savings that could be achieved, the Secretary-General has decided to present to the Executive Council, for its approval, a proposal for the revision of the budget based on the latest inflation projections in Spain and on the evolution of the exchange rate between the euro and the United States dollar. 2. The consumer price index in Spain posted a year-on-year increase of 2.7 per cent in the month of September of this year. The 50-basis-point rise with respect to the annualized rate registered in the month of August (2.2 per cent) is due in large part to the impact of higher oil prices and the rise in the prices of basic food products. 3. The general opinion among analysts, as well as on the part of the Spanish Government, is that, if the price of oil remains at current levels, inflation in Spain could run at a rate of around 2.9 per cent at the end of the year. 4. Taking into account that the inflation estimates used for the preparation of the budget for , approved by the Executive Council at its 80th session [CE/DEC/16(LXXX)], were 3.0 per cent for financial year 2008 and 2.9 per cent for 2009, the Secretary-General has considered it reasonable and possible to lower the inflation estimates used to calculate the budget for each year by ten basis points, establishing them at 2.9 per cent (2008) and 2.8 per cent (2009), thus following the recommendation of the Executive Council to make an effort to lower the budget estimates based on more up-to-date projections of the inflation rate. 5. It should be pointed out that it may be risky and contrary to sound budgetary management to further reduce the estimated increases of 2.9 and 2.8 per cent for the financial period , taking into account the inflationary threats already highlighted by the European Central Bank, among which are the upward trend in oil prices, and the current policy of Central Banks of increasing the liquidity of the financial system to respond to the crisis in the financial markets.

3 3 A/17f7 Add.1 6. The Secretary-General has likewise analysed the evolution of the euro with respect to the United States dollar, with a view to revising lower the budgetary estimates for items affected by the exchange rate between these two currencies. 7. The exchange rate used for the previous budget estimate for was 1.30 United States dollars per euro. However, since last June, the United States dollar has suffered a depreciation of over 5.0 per cent against the euro, and in October the euro was worth around 1.43 United States dollars, which represents an unprecedented high. 8. The Secretary-General, as do other financial experts, believes that the value of the United States dollar could stabilize at around 1.40 dollars per euro in the latter part of this year and throughout the next year. 9. Based on this new exchange rate forecast (1EUR = 1.40 USD) and the new inflation rate projections (2008: 2.9 %; 2009: 2.8 %), the budgetary expenditure estimate for the financial period was recalculated resulting in the new amount of 25,266,000 euros, which represents a reduction of 250,000 euros with respect to the previous budget of 25,516,000 euros, approved by the 80th Executive Council session (see Annex I of the document). 10. Annex II shows that the nominal increase of the revised budget, as compared to the initial budget, is reduced from 5.6 per cent to 4.6 per cent with respect to the budget, thus representing a reduction in real terms of 1.9 per cent. 11. Furthermore, as can be seen in Annex I of this document, the total amount' of contributions to be paid by the Full and Associate Members is reduced by the same amount as the budget, that is, 250,000 euros, from 22,557,000 euros to 22,307,000 euros. 12. The nominal increase in the contributions, as shown in Annex II of the document, is also reduced from 7.3 per cent to 6.1 per cent. 13. Taking into account the joining of Brunei Darussalam, Montenegro and Tajikistan as new Full Members of the Organization, the new contribution scale will show a nominal increase of 2 per cent per annum in the period This means that the contributions of the Full and Associate Members, in real terms, will rise at a much lower rate than the price-increase estimates used in the budget.

4 ANNEX I IN EUROS The revision of the budget was carried out following the recommendation of the Executive Countil at its 80th session CEIDEC/16 Item 7 APPROVED BUDGET REVISED BUDGET VARIACION PART I - Programme of work , , , , , , ,00 PART 11-Executive Organs and Meetings , , , , , , ,00 PART 111-Programme Support Services and Other Budgetary Provisions , , , , , , ,00 TOTAL 12,335,000, , ,000,00 12, ,00 13, , ,000,00 250,000,00, Difference between gross and net salaries , , , , , , _ TOTAL WITH STAFF ASSESSMENT , , , , , , ,00 BUDGETARY RECEIPTS. Staff assessment , , , , , , ,00. Sundry income... " , , ,48 207,000, , ,48 0,00. Income from the sale of publications , , , , , ,00 0,00. Affiliate Members , , , , , ,00 0,00. Income from surplus , , , , , ,52 0,00 Balance to be paid by Full and Associate Members , ,000,00 22, ,00 11, ,00 11, , ,000, ,00

5 J C">./,. I' r>... I ANNEX II... BUri~tTbF ;Ntb~~AND. J~ENbllt;Rii A;';'R6~~~ the80;;....:..< :: ):..:.:.«.. ~XE2utiv~t60~tIL ic~;be2;.<.2008,2009.:.; :. :: '.'-:.:-:.:.:.:. '.....:. IN EUROS (w<~."..... "," VAR% PART I. Programme of work , , , ,00 B.B PART 11- Executive Organs i1nd Meetings , , , , , ,000, PART 111 Programme Support Services and other Budgetary Provisions , , , , ,00 1.S TOTAL , , , , , ,00 5,6. Difference between Q'ross and net salaries , ,00 BUDGETARY TOTAL WITH STAFF ASSESSMENT RECEIPTS , , Staff assessment, ,.., ,00. Sundry income... ", , , , , ,48 (28.9). Income from the sale of publications ,000,00 350, , AffWate Members ,00 435,000, ,00 457, (1) ,00 (1) , Income from Surplus , (1.0) Balance to be paid by Full and Associate Members _......_... _ , , , , ,3 (21 (1) 326 Affiliate Members (2) Increase resulting from the application 01 the annual inflation rate of 295 per cent and 10the assessed contfibutions for 2007, and adjustments due to the joining 01new Members IN EUROS VAR% PART 1- Progrilmme of work , , PART II Executive Orgilns i1nd Meetings......, ,000, , PART HI. Pro9ramme Support Services and Other Budgetary Provisions , , , TOTAL , , ,00 12, , , Difference between gross and net salaries , BUDGETARY TOTAL WITH STAFF ASSESSMENT INCOME , Staff assessmenu , , , Sundry income , , , , (28.9). Income from the sale 01 publications , , , Affiliate Members , (1) ,00 (1) ,00 5.1, Income from the / Surplus , , (1.0) Balance to be paid by Full i1nd Associate Members _ , , , ,00 11, , ,00 6,1 I21 (1l 326 Affiliate Members (2) Increase resulting from the appbcation 01the annual innation rate per cent and to the assessed contributions for and adjustments due to the joining of new Members

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