REPORT TO THE CONSULTATIVE COMMITTEE OF THE ITC TRUST FUND

Transcription

1 REPORT TO THE CONSULTATIVE COMMITTEE OF THE ITC TRUST FUND (1 JANUARY 31 DECEMBER 2014) TRADE IMPACT FOR GOOD

2 ITC mission: ITC enables small business export success in developing and transition countries by providing, with partners, sustainable and inclusive trade development solutions to the private sector, trade support institutions and policymakers. The designations employed and the presentation of material in this publication do not imply the expression of any opinion whatsoever on the part of the International Trade Centre concerning the legal status of any country, territory, city or area or of its authorities, or concerning the delimitation of its frontiers or boundaries. This document has not been formally edited by the International Trade Centre. October 2014 Original: English International Trade Centre 2014

3 REPORT TO THE CONSULTATIVE COMMITTEE OF THE ITC TRUST FUND (1 January 31 December 2014)

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5 CONTENTS 1. Introduction Source of ITC Funds Voluntary contributions received for TRTA projects as at 31 December Share of donor contributions for Use and status of ITF funds ITC expenditure against budget (US$ million) ITC s Expenditure pattern (US$ million) W1 and W2 status of funds available as at 31 December 2014 (US$ 000) W1 and W2 expenditure by technical cooperation activities (US$ 000 gross) Window I: unearmarked and soft-earmarked budget and delivery in Criteria for the allocation of Window I funds Unearmarked and soft-earmarked budgets and expenditure in Window I Operational Plan budget by Focus Area Programme Support account expenditure as at 31 December Regular Budget ITC project delivery and performance Expenditure performance against budget in Extrabudgetary project expenditure by region ITC s performance against corporate objectives Project Quality Assurance Human Resources Programme Support Services Annex 1 List of projects per Focus Area and Programme Annex 2 Programme Support Services: 2014 Annual Report Annex 3 Understanding ITC s financial resources iii

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7 1. Introduction ITC is pleased to submit to the CCITF the following report of its activities covering the period 1 January to 31 December This report provides information, principally in the form of self-explanatory tables which give an overview of the organization s activities. It focuses on the analysis of ITC s extrabudgetary resources providing a detailed description of the source of funds, their status and use. It also provides an update on programme support and regular budget resources and performance against development results targets for the year. 2. Source of ITC Funds ITC s work is enabled by two sources of funding: the regular budget (RB) and extrabudgetary funding (XB), which includes programme support costs (PSC). The RB is approved on a biennial basis by the United Nations General Assembly and the World Trade Organization (WTO) General Council. Extrabudgetary funds are activated through the ITC Trust Fund (ITF). This includes two categories of funds known as windows. Window I consists of unearmarked and soft-earmarked contributions from donors, while Window II is composed of bilateral contributions for specific projects and programmes, as well as income earned through the sales of products and services. PSC is earned via a charge to all extrabudgetary expenditures. 1 Earmarked funding is used for bilaterally funded projects whose technical cooperation goals and outcomes fall within the scope of a specific Window 2 agreement and specific reporting requirements. Window I allows for more flexibility in the allocation of funds and more standardised reporting, which facilitates more systematic capturing of results. Soft-earmarking funds allows donors to reflect their priorities in particular areas of focus for ITC but are not subject to the same level of detail in oversight and reporting as Window 2. 1 For a more detailed presentation of ITC s funding modalities please refer to Annex 3 Understanding ITC s Financial Resources. 5

8 2.1 Voluntary contributions received for TRTA projects as at 31 December 2014 The table below provides a detailed account of contributions received for both windows as at 31 December The table does not take into account contributions received under interorganizational arrangements and revolving funds. (Values are US$ 000) 2013(US$ 000) 2014(US$ 000) Contributors W1 W2 Total W1 W2 Total Associate experts - Finland Associate experts - France Associate experts - Germany Associate experts - Mo Ibrahim Foundation Associate experts - Republic of Korea Australia - 1,970 1, Canada 1,035 1,477 2, ,122 1,972 Caribbean Export Development Agency Centre for the Development of Enterprise China Confederation on Indian Industry Denmark 2,335-2,335 2,340-2,340 European Union - 6,444 6,444-9,561 9,561 Finland 3,259-3,259 3,294-3,294 France Germany (GIZ) Germany 2,608-2,608 2,541-2,541 Hivos ILO India Inter-American Development Bank Ireland 1,192-1,192 1,144-1,144 Islamic Development Bank Japan Kuwait CORPEI de Ecuador Namibia Netherlands - 2,868 2,868-1,542 1,542 Norway 2,515-2,515 2,680-2,680 OPSR/TEPA Saint Lucia Organisation Int. de la Francophonie Qatar Development Bank Palestine Trade Center South Africa Stichting IDH Sustainable Trade Initiative Sweden 4,498-4,498 4,441-4,441 Switzerland - 6,055 6, ,990 3,046 Switzerland/EIF Trade Promotion Organisations (TPO) Trademark East Africa UNDP UNIDO United Kingdom ,530 3,540 USAID World Bank WTO Grand Total 17,442 21,742 39,184 17,682 23,752 41,434 1) Excludes contributions received under inter-organizational arrangements and revolving funds. 6

9 2.2 Share of donor contributions for 2014 Figure 1: 2014 Donor Contributions to the ITF (Window I), as at 31 December 2014 Figure 2: 2014 Donor Contributions to the ITF (Window II), as at 31 December

10 3. Use and status of ITF funds 3.1 ITC expenditure against budget (US$ million) ITC s overall 2014 budget amounted to $95.5 million. At 31 December 2014, ITC delivered 99% of this budget. Expenditures for RB were 4% under the forecasted budget. ITC s 2014 Operational Plan established a XB budget (including PSC) of $51.7 million. At 31 December 2014 delivered technical assistance worth $52.7 million, 2% more than its initial budget and 25% more than in budget Expenditure Expenditure / Budget RB % W % W % XB % Total % 3.2 ITC s Expenditure pattern (US$ million) ITC reached its highest ever expenditure in 2014, 14% higher than 2013 expenditure. 8

11 3.3 W1 and W2 status of funds available as at 31 December 2014 (US$ 000) W1 W2 Total Balance as at 1 January ,757 24,299 35,056 Add: Contributions received 17,682 23,752 41,434 Funds from inter-organization * 0 2,009 2,009 Income from services rendered Interest income Sub-total Income 17,737 26,490 44,227 Less: Expenditures 21,693 25,563 47,255 Programme Support Costs (PSC) 2,820 2,586 5,406 Expenditure + PSC 24,513 28,149 52,661 Refund to donors Transfers to/(from) other funds 0 (3) (3) Transfer to Operating reserve Other adjustments Sub-total Expenditure 24,558 28,343 52,901 Balance available as at 31 December ,936 22,446 26,382 Add Operating reserves 5,495 Total available balance as of 31 December ,877 * EIF, UNDP 3.4 W1 and W2 expenditure by technical cooperation activities (US$ 000 gross) Categories W1 W2 Total % Technical assistance personnel cost 19,976 19,733 39,710 75% Travel ,289 2% Contractual services: subcontracting / grants 1,536 1,629 3,165 6% Operating expenses % Acquisitions 347 1,208 1,554 3% Other including group training 1,954 4,017 5,971 11% Total 24,513 28,147 52, % 9

12 4. Window I: unearmarked and soft-earmarked budget and delivery in Criteria for the allocation of Window I funds Window I funding decisions are taken by the Senior Management Committee (SMC) and are intrinsic to the annual planning process. Decisions are taken during the preparation of the annual Operational Plan. The Operational Plan for 2014 was approved by SMC in December 2013 and shared with the CCITF in January Analysis presented in this section focuses on Window I budget decisions as reflected in the Operational Plan. Budgets are adjusted in the course of the year to reflect changes in the operating environment as new projects commence and mature projects end. The factors taken into account in carrying out revisions include: - Client needs; - Performance in the execution of the work programme; - Actual and forecasted data on donor contributions; - Donor earmarking preferences; and, - Synergies with Window II and PSC-funded components of the overall work programme. 4.2 Unearmarked and soft-earmarked budgets and expenditure in 2014 Window I consists of unearmarked and soft-earmarked contributions from donors while Window II consists of bilateral contributions for specific projects or programmes as well as income earned through sales of products and services. US$ 26.5 million (gross) of Window I funds were budgeted for projects and programmes through the operational planning process for At 31 December 2014, total expenditure reached $24.6 million (gross), or 93% of the Window I budget Window I delivery - soft-earmarked and unearmarked funds (US$m) Soft earmarked, 9.6, 39% Unearmarked Soft earmarked Unearmarked, 15.0, 61% 10

13 Window I Operational Plan budget by Focus Area ITC Focus Areas W1 Initial Budget $ 000 Expenditure $ 000 % Spend 2 1. Trade and market intelligence for SME competitiveness 3,304 2,960 90% 2. Supporting regional economic integration and South-South links 3. Connecting to value chains: SME competitiveness, diversification and links to export markets 2,219 2,166 98% 1,161 1, % 4. Strengthening trade and investment support institutions 2,670 2, % 5. Promoting and mainstreaming inclusive and green trade 5,379 5, % 6. Building a conducive business environment 2,876 3, % 7. Project development 3 2, Corporate efficiency (e-learning, CRM, ITC regional office for Latin America and Caribbean (in Mexico), modernisation of IT systems and services, modernisation of HR policies and services, evaluation and impact assessment (including independent evaluation of ITC), results-based management) 6,785 6,512 97% Total W1 Operational Plan Budget 26,816 24,513 92% Window I delivery and soft-earmarking by Focus Area in 2014 (US$m, gross) US$m Soft-earmarked Unearmarked Trade and market intelligence for SME competitiveness 2. Supporting regional economic integration and South-South links 3. Connecting to value chains: SME competitiveness, diversification and links to export markets 4. Strengthening trade and investment support institutions 5. Promoting and mainstreaming inclusive and green trade 6. Building a conducive business environment 2 % spend above 100% is due to in-year budget adjustments and use project development and innovation funds. 3 Expenditure attributed to relevant focus areas 11

14 5. Programme Support account expenditure as at 31 December 2014 Description Budget Expenditure % spent against budget Staff and other personnel costs 4,090 3,630 89% Contractual services % Operating expenses % Fellowships, grants, other % Total 4,665 4,088 88% 6. Regular Budget Regular budget expenditure between the biennia (US$ 000) Categories Biennium 2008/2009 Biennium 2010/2011 Biennium 2012/ (12 months) Staff and other personnel costs 49,462 57,792 61,398 31,267 Travel Contractual services 2,465 2,876 2, Operating expenses 5,474 6,303 6,341 3,338 Acquisitions 1,888 1,615 2, Other 2,134 2,814 3,021 1,308 Total 62,024 72,103 76,291 37,359 Appropriations for a biennium 62,186 72,996 79,890 80,218 % spend against biennium budget 100% 99% 96% 48% Categories Biennium Budget Expenditure (as at 31 December 2014) % Spend Staff and other personnel costs 63,953 31,267 49% Travel % Contractual services 2, % Operating expenses 5,915 3,338 56% Acquisitions 2, % Other 2,865 1,308 46% Grand Total 78,191 37,359 48% Expenditure under contractual services and acquisitions are lower than budgeted due to the revised scheduling to 2015 of the procurement equipment and services. In addition publications are produced over the biennium and the cost related to translation and printing is usually heavier in the second year of the biennium, after the English language versions have been created. Notes on Regular budget Operating expenses General operating expenses include the cost of rental and maintenance of ITC Headquarters premises, rental of internal reproduction equipment, communications, including charges for telephone, mobile technology, insurance etc. 12

15 Acquisitions This covers the acquisition of furniture and equipment and the continued maintenance and support of business critical information systems, the upgrade of EDP equipment, and the replacement of software and EDP equipment to support administration systems at the corporate level. Other This covers audit services and investigative services provided by the Office of Internal Oversight Services (OIOS), ITC s share of joint medical services, ITC s share of joint services provided by the United Nations Office at Geneva (UNOG) mainly in the areas of payroll, treasury, finance and budget through the use of the Integrated Management Information System (IMIS), Services provided by the International Computing Centre (ICC) and the United Nations Office at Geneva (UNOG) concerning e- mail and hosting of servers, including ICC for services relating to gateway, anti-spam and anti-virus, and UNOG for services such as hosting ITC s disaster site, internet connectivity and firewall; Security services. 7. ITC project delivery and performance 7.1 Expenditure performance against budget in 2014 ITC set a budget of US$51.7 million (gross) in the 2014 Operational Plan for extra-budgetary resources. At the end of December expenditure totaled US$52.7 million gross. Summary of XB budget and expenditure by Focus Area as at 31 December 2014 ($m gross) Focus Areas 1. Trade and market intelligence for SME competitiveness 2. Supporting regional economic integration and South- South links 3. Connecting to value chains: SME competitiveness, diversification and links to export markets 4. Strengthening trade and investment support institutions 5. Promoting and mainstreaming inclusive and green trade 2014 Operational Plan Budget Expenditure as at 31 December 2014 % spent against budget % % % % % 6. Building a conducive business environment % 7. Project Development Corporate efficiency % Grand Total % 4 Project development expenditure is accounted for under the relevant Focus Area. Of the initial $2.4 million budgeted for project development, $1.4 million was allocated to specific activities and just over $1 million was spent by the end of Covers XB funding related to e-learning, CRM, ITC regional office for Latin America and Caribbean (in Mexico), modernisation of IT systems and services, modernisation of HR policies and services, evaluation and impact assessment (including independent evaluation of ITC), and results-based management. 13

16 XB Expenditure by Focus Area as at 31 December 2014 ($ m gross) US$m W2 W Trade and market intelligence for SME competitiveness 2. Supporting regional economic integration and South-South links 3. Connecting to value chains: SME competitiveness, diversification and links to export markets 4. Strengthening trade and investment support institutions 5. Promoting and mainstreaming inclusive and green trade 6. Building a conducive business environment 7. Corporate 7.2 Extrabudgetary project expenditure by region Summary of 2014 extrabudgetary project expenditure by region (US$m gross) 6 Window I Window II Total Sub-Saharan Africa Arab States Asia-Pacific Eastern Europe and Central Asia Latin America and the Caribbean Global Public Goods Corporate efficiency Total A thorough listing of projects per region and focus area with details on budget, expenditure and donor is provided in Annex 2. 14

17 Regional share of total 2014 XB expenditure 6% 7% Focus on priority countries: Sub-Saharan Africa Arab States 21% Asia-Pacific 56% Eastern Europe and Central Asia Latin America and the Caribbean 10% 15

18 7.3 ITC s performance against corporate objectives ITC s targets for outcomes and outputs are submitted as part of the long fascicle for the biennium Those targets are then evenly distributed to each year of the biennium. ITC s results performance in against the 2014 targets has been strong. Outcomes exceeded targets for all but one outcome indicator. The number of outputs (advisory services, workshops and publications) has also been higher than the targets for all output categories except publications. As a result of this strong performance, ITC has increased the targets for This should lead to ITC exceeding its targets for the biennium for all indicators. Outcome results ITC s online databases of trade and company data (Trade Map, Market Access Map, Investment Map, and Standards Map) continue to be an important source of trade and market intelligence as evidenced by a 10% higher number of users, 154,863 in ITC achieved much higher than anticipated results in the area of strengthening the integration of the business sector into the global economy due to the significant success of its business guide for developing countries to understand the WTO Trade Facilitation Agreement, published in 5 languages. ITC s guide spelling out how Pakistani companies in the country s key export sectors can boost sales and employment by taking advantage of the EU s Generalized System of Preferences-Plus (GSP+) scheme, published in 2014, was a key contributor to higher than expected results. Significant achievements were made in enhancing trade support institutions and policies for the benefit of exporting enterprises including during the largest TPO Network conference ever, organized by ITC in Dubai in November. Over 400 participants from 68 countries representing TPOs, business associations, and governments discussed the challenges to trade promotion work in a fast-evolving economic landscape involving new opportunities and competitive threats as well as heightened expectations from business communities. ITC exceeded its targets to strengthen the export capacity of enterprises to respond to market opportunities through a wide range of projects. The Centre was very successful in making SME s export ready and in linking SME s with potential buyer to facilitate business transactions. ITC will strengthen its efforts in enabling SME s to formulate sound international business strategies to ensure it will meet its targets for the biennium was the first year in which ITC reported on a gender disaggregated indicator in its strategic framework. The organization helped 362 women-owned enterprises to improve their competency in export-related operations and link them to new markets or market contacts. Output results ITC delivered a higher number of outputs than planned for The higher number of participants in group training is particularly outstanding. The use of technology, for example with the SME Academy, ITC s online e-learning tool, launched in 2014, helped delivery of ITC services be more cost effective, and reach a wider audience. The Centre did not achieve its target number of publications for The Centre will pay close attention in 2015 to the implementation of the Publications Plan for the remainder of the biennium and is preparing a publication strategy to be finalized in 2015 with the aim of increasing the contribution of the ITC s publications to meeting its strategic goals. 16

19 Performance against corporate outcome targets 2014 Targets 2014 Actual Actual/ Operational Plan target % A. Strengthened integration of the business sector into the global economy through trade intelligence and enhanced support to policymakers Increased number of male and female users of trade-related intelligence, A.1 including cases in which a gender perspective in trade is integrated into national development strategies, as a result of ITC support to enable decision 76, , % makers to prepare and/or design A.2 Increased number of male and female clients expressing awareness of trading system-related activities through the support of ITC to enable decision makers to understand business needs and create an environment conducive to 1,000 4, % business. A.3 Increased number of cases in which country negotiating positions have been enriched through analytical input and business sector participation, with the support of ITC, to enable decision makers to integrate business dimensions into trade negotiations % B. Enhanced trade support institutions and policies for the benefit of exporting enterprises Number of institutions reporting improvements in their managerial performance B.1 and/or services to small and medium-sized enterprises as a result of ITC assistance. 7 B.2 Number of institutions reporting improvements as a result of their membership in networks supported by ITC % B.3 Number of institutions reporting improvements in their country s trade promotion and export development policies as a result of ITC assistance. C. Strengthened export capacity of enterprises to respond to market opportunities Increased number of enterprises enabled to formulate sound international C.1 business strategies through ITC training on export management issues, delivered directly or indirectly C.2 Increased number of enterprises enabled to become export-ready through ITC training activities focusing on export readiness, delivered directly or indirectly % % 950 1, % C.3 C.4 Increased number of enterprises having met potential buyers and, as a result, having transacted business through ITC support. Increased share of women-owned enterprises that report improved competency in export-related operations and that are exposed to new markets or market contacts as a result of ITC assistance % % Performance against corporate output targets Operational Plan 2014 Targets 2014 Actual Actual/ Operational Plan target Advisory services % Group training % Number of participants 10,500 23, % Publications % Other substantive activities % 7 Performance against this indicator may include duplicates. These duplicates are removed at the end of the biennium. 17

20 8. Project Quality Assurance ITC has continued its commitment to improving the quality of projects throughout the project life cycle, from the design phase. In 2014 the quality assurance process for the design phase was further streamlined and templates and development markers were improved to facilitate more effective project design, review and approval. ITC introduced a rating system for project design to track the initial quality of submissions. Projects documents of unsatisfactory quality are sent back to the project development team with advice on further improvements. All projects eventually meet the stringent ITC quality standards. There have been notable improvements in the initial quality of projects in 2014 with the exception of slightly weaker performance in quarter four, where pressure to finalize project documents and funding agreements before the end of the year can take its toll. The chart below illustrates project design ratings per quarter in 2014 where 1 is the highest quality rating and 4 represents lowest quality, for initial submissions. Ratings are given by the Project Appraisal Committee (PAC), made up of Section Chiefs, before projects are submitted to the Senior Management Committee for approval. Directors have been made accountable to track the quality of the project proposals of the Division and the ratings for the division and project quality ratings are discussed during the annual performance review of Project Managers, Section Chiefs and Directors Project document ratings by quarter Number of projects Q1 Q2 Q3 Q4 Rating 1 Rating 2 Rating 3 Rating 4 Project quality assurance to implementation Our analysis shows that the vast majority of project plan successfully evolve into fully funded operational projects. Project Plans and Small Project Plans reviewed by PAC in 2014 No. of approved project documents No. of operational projects Implementation ratio (%) Project Plans % Small Project Plans % Total for ITC % 9. Human Resources As a knowledge-based organization, ITC s people are at the heart of its success. ITC keeps track of its performance against a series of goals that form part of its people strategy. ITC hired more people in 2014 and used the recruiting process to improve diversity by awarding more contracts to female candidates. The organization was also to give more growth opportunities to internal staff members. 18

21 The Centre also improved its performance management practices. 94% of staff completed the performance appraisal cycle in 2014 (compared to 58% in 2013) and discussed performance with their managers. Goal: To source, attract and recruit world-class talent to ITC Indicators % Improvement Number of fixed-term recruitments completed % % Competitions won by internal candidates 19% 34% 79% % of competitions won by female candidates 14% 42% 300% Time to recruit (no. of days) % RB / PSC vacancy rate 10% 5.6% 4.4% 10. Programme Support Services Increase in productivity The increase in ITC s delivery of technical assistance activities has been supported by increased productivity in the provision of central support services. Significantly more services have been provided while the resource level has remained constant. % increase compared to 2012 % increase compared to 2013 Legal services +72% +34% Procurement +28% +16% Travel services +62% +52% Substantial savings Significant savings have been realized by ITC through modifying travel policies: Voluntary downgrade from business to economy class air travel: CHF 123,000 Cost avoidance through implementing travel policy and corporate fares: CHF 664,000 Efficiency gains The introduction of new or upgraded systems has contributed to more efficient support services. Electronic leave processing (eleave) (Completed) Replacing paper based leave application and tracking system Efficient, transparent process Complete integration with other HR-related systems Automated approval/rejections with notifications. Electronic workflow for MOUs (Work in progress) Better quality for content and better efficiency and transparency in the processing of the legal instruments Enhanced reporting on substantive, administrative, legal and financial aspects and monitoring for auditing and quality control and follow ups Optimization of the process between Project manager, Section chief, Financial Management, Legal Team, Technical Directors and DPS Director for the preparation and issuance of legal instruments. 19

22 Enhanced project manager's satisfaction as well as DPS staff New Projects Portal (Work in progress) Single system for the full project cycle from design to implementation and closure Integrated with other ITC systems like IMIS/Umoja, system, Customer Relationship Management (CRM) system. Better planning, implementation and monitoring of ITC projects. 20

23 Corporate Global Latin America and the Eastern Caribbean Europe and Central Asia Arab States Asia-Pacific Sub-Saharan Africa Annex 1 (US$ 000 gross) List of projects per Focus Area and Programme OP budget $'000 Expenditure $'000 Focus Area / Programme / Project Donor % Spend 1. Trade and market intelligence for SME competitiveness Competitive Intelligence Programme Competitive Intelligence % Development of a national trade portal in Bangladesh % Innovation Fund: Next Generation trade intelligence portal % Market Insider % Trade information services revolving fund Revolving Fund % Upgrading of Trade Information services for exporters in Saint Lucia St. Lucia % Non-Tariff Measures in Goods and Services Programme Non-tariff measures (NTMs) phase II United Kingdom 1,550 1,201 77% Transparency in Trade Programme 2014 Flagship Report % Euro-Med Trade and Investment Facilitation Mechanism - An online tool and problem solving network European Union European Union, Global Public Good: Market Access Map Russian Federation % 50 Publication % Malawi: Improved Trade Statistics and Information System European Union Revolving fund for market analysis and research Revolving Fund %, Switzerland, European Union, HIVOS, IDH Trade for Sustainable Development Programme Sustainable Trade Initiative 1,927 1,747 91% 2. Supporting regional economic integration and South- South links Boosting Intra-African Trade Programme Project Development: Boosting Intra-African Trade - A Pan- African Programme 0 48 Trade promotion and value addition for African cotton European Union % Coordination of African Regional Cotton Sector Strategies Implementation European Union % Programme for Building African Capacity for Trade (PACT) II % Kenya: Promoting Intra-regional trade in Eastern Africa % Tanzania: Promoting Intra-regional trade in Eastern Africa % Zambia: Promoting Intra-regional trade in Eastern Africa % Promoting South-South Links Programme Project development: Supporting intra and interregional trade by linking Central American SMEs to Multilatinas Value Chains 0 57 Enhancing Export Capacities of Asian LDCs for Intraregional Trade China % Expansion du commerce intra et inter-regional entre les Etats Members de la CEMAC, de l'uemoa et les Trois Francophones Mekong OIF % United Kingdom, Supporting Indian Trade and Investment for Africa (SITA) 0 1,234 Regional Integration and Economic Partnership Agreements (EPAs) Programme Connecting to value chains: SME competitiveness, diversification and links to export markets e-solutions Programme: linking businesses to markets Development of SMEs exports through Virtual Market Places Value Added to Trade Programme Project Development: Programme d appui au développement des exportations malgaches Project development: Myanmar Country Programme: Accelerating inclusive and sustainable export-led growth Project Development: Strengthening Omani SMEs Export Competitiveness in Priority Sub-Sectors Project development: Georgia - Enhancing SME competiveness through capacity building and assistance to the herbs sector to facilitate integration into the EU market Project Development: Ukraine: Enhancing SME competitiveness in the fresh fruits and vegetables sector of the Kherson region Project development: Caribbean Region Development of value added products and intra-regional trade to enhance livelihoods from coconuts, World Bank ECS Revolving Fund Revolving Fund % 21

24 Corporate Global Latin America and the Eastern Caribbean Europe and Central Asia Arab States Asia-Pacific Sub-Saharan Africa OP budget Expenditure Focus Area / Programme / Project Donor $'000 $'000 % Spend Fiji: Improvement of Key Services to develop livestock European Union 1,125 1, % Fiji: Strengthening of capacities and services in the agri-food sector European Union 1, % Gambia: Sector Competitiveness and Export Diversification EIF % Sri Lanka: Improving the Safety and Quality of Fruits and, Vegetables STDF % Inception Phase of ITC's 3E Programme % Kuwait: Improving the international competitiveness of food and beverage producers Kuwait % Kyrgyzstan: Strengthening export competitiveness of SMEs in the textile and clothing sector and enhancing trade support institutional capacity Switzerland % Lesotho - Horticulture productivity and trade development EIF 1, %, Supply chain management training and professional Switzerland, certification (MLS-SCM) Revolving Fund % Morocco: Export Development for Employment Creation Canada 1,200 1, % Nepal Pashmina Enhancement and Trade Support EIF % NTF III Management and Technical Leadership Netherlands 1, % NTF III Bangladesh - IT & ITES Export Competitiveness Netherlands NTF III Kenya - Enhancing Export Competitiveness of the Avocado sector in Kenya Netherlands 0 83 NTF III Kenya Enhancing Export Competitiveness of the IT & ITES Sector in Kenya Netherlands NTF III Myanmar Inclusive Tourism Focusing on Kayah State Netherlands 0 90 NTF III Uganda - Enhancing Export Competitiveness of the Coffee sector in Uganda Netherlands 0 17 NTF III Uganda Enhancing Export Competitiveness of the IT & ITES in Uganda Netherlands Tunisia: Improving the competitiveness of the T&C Value Chain Switzerland 0 14 Chad: Strengthening the trade capacity of the gum arabic sector EIF 0 23 Rwanda: Boosting the International Competitiveness of SME, One Clusters- BICS UN SME's Promotion and Development - Nampula (Mozambique) One UN 0 9 Standards and trade development facility, Nigeria - SPS capacity building for sesame seeds and sheanut butter exports STDF 0 6 Strategic Partnerships for enhancing Export Quality in Developing countries % Comoros: Strengthening the sanitary and phytosanitary system STDF 0 26 Tajikistan: Strengthening export competitiveness of SMEs in the textile and clothing sector and enhancing trade support institutional capacities Switzerland % Tanzania: Integration of Horticulture Supply/Value Chains One UN, into Tourism Switzerland % WIPO/ITC: Brand Strategy Activation % Zimbabwe: Trade and private sector development programme European Union Strengthening trade and investment support institutions 3,263 3, % Assess Improve Measure (AIM) for Results 3,076 3,024 98% Project development: Strengthening commercial mediation services for exporting SMEs in Africa 0 32 AIM for results: Improving TSIs Performance and, Measurement-Phase I Revolving Fund % ITC Trade Finance Online Flagship Course 0 37 Peru: Enabling TSIs in Peru's northern corridor to respond to the needs of exporters Switzerland % South Africa: Building Capacity in Export Management and Export Market Analysis South Africa % State of Palestine: Strengthening capacities in trade promotion for export development UNDP % Support for LDCs under EIF % TPO Networking - Sharing and adoption of winning practices % World trade promotion organisations conference and awards % Building Coalitions of Services Industries % Ecuador: Desarrollo del comercio de servicios Ecuador 0 42 LDC SERVICES EXPORTS: Business Success Stories and Challenges Australia 0 23 Trade in services: Trade intelligence, partnership development and technical assistance % Zambia: Improving Access to Finance Services for SMEs One UN Promoting and mainstreaming inclusive and green trade 9,978 9,196 92% Empowering Poor Communities to Trade Programme 3,170 4, % 22

25 Corporate Global Latin America and the Eastern Caribbean Europe and Central Asia Arab States Asia-Pacific Sub-Saharan Africa Focus Area / Programme / Project Poor Communities and Trade Programme / Ethical Fashion Initiative Cambodia: Export diversification and expansion program (CEDEP) I: High value silk Lao PDR: Enhancing sustainable tourism, clean production and export capacity Empowering Women to Trade Programme ACCESS! Namibia - Export Development Services for Businesswomen Trade facilitation for women informal cross-border traders and MSMEs in the East African Community - phase II W&T II: Programme Management W&T II: Ethiopia and Mongolia: Supporting Women Business Enterprises in the Textiles and Garments Sector W&T II: Economic Empowerment of Women in the Pacific Region W&T II: Palestine: Enhancing Women SMEs Development W&T II: Ghana: Improving competitiveness of women in the yam value chain W&T II: Improving economic benefits for women in the coffee sector W&T II: Nicaragua: Enhancing the capacities of women business enterprises to participate in international trade W&T II: People First: Working towards gender balance across ITC W&T II: The Global Platform for Action on Sourcing from Women Vendors Donor, Japan, Switzerland EIF Switzerland Namibia United Kingdom United Kingdom, Australia Australia, United Kingdom United Kingdom, United Kingdom OP budget $'000 Expenditure $'000 % Spend 2,717 3, % % % % 1,444 1,197 83% % % % % % % 0 47, United Kingdom, W&T II: Zambia: Empowering Women in the Cotton Sector United Kingdom Supporting Youth Entrepreneurship and Trade Programme Innovation Fund: ITC Youth and Trade Initiative 0 34 Project Development: Integration of Tanzania s Youth into 1,097 1,080 98% % global value chains of bee-products 0 57 Trade and Environment Programme Trade and Environment programme - Phase 2 1,650 1,432 87% 6. Building a conducive business environment National and Sector Export Strategies Burkina Faso: Elaboration d'une strategie sectorielle d'exportation et de developpement de la filiere amendes de karite EIF Export Strategy Design and Management Programme 1,500 1, % Supporting trade negotiations Business and trade policy % LDCs: Fostering business support to the WTO Accession project % Tajikistan: Implementation of WTO provisions and business awareness of WTO Accession (Component Two) Switzerland % Tajikistan: WTO Negotiations of Accession - Policy Advice and Capacity Building (Component One) Switzerland % Trade Facilitation Programme Côte d'ivoire: Institutional strengthening of economic policy and facilitation of regional and global integration. European Union 1,300 3, % Improving the Business Enviroment for exporting SMEs through Trade Facilitation: Supporting country compliance with the TF agreement obligations Pakistan: Assistance to the design and implementation of trade policy and regulatory reform to improve export possibilities 7. Corporate Business Development Needs assessment and project design: Piloting the methodology and boosting the project pipeline Corporate efficiency E-learning, CRM, ITC regional office for Latin America and Caribbean (in Mexico), modernisation of IT systems and services, modernisation of HR policies and services, evaluation and impact assessment (including independent evaluation of ITC), results-based management, Switzerland European Union % % 6,785 6,308 93% 23

26 Annex 2 Programme Support Services: 2014 Annual Report Annex 3 Understanding ITC s financial resources 1. Introduction This annex outlines the source, nature and governance of the financial resources available to the International Trade Centre (ITC). The work of ITC is enabled by the regular budget (RB) and extrabudgetary funding (XB), which includes programme support costs (PSC). The RB is approved on a biennial basis by the United Nations General Assembly and the World Trade Organization (WTO) General Council. Extrabudgetary funds are activated through the ITC Trust Fund (ITF). This includes two categories of funds known as windows. Window I consists of un-earmarked and soft-earmarked contributions from donors, while Window II is composed of bilateral contributions for specific projects and programmes, as well as income earned through revolving funds. PSC is earned via a charge to extrabudgetary expenditures and the budget is approved on a yearly basis. Funding ITC receives funds from different sources and holds them in accounts known as pockets. The rules applied to the accounting, management and use of these funds vary depending on their source, nature and agreements concluded. As agreed in the administrative arrangements for the regular ITC budget, the RB is assessed, approved and paid in Swiss francs (SwF) while its accounts are kept in United States dollars (US$). Payments are received monthly and at present represent approximately 40% of annual I T C financial resources (see table 1). Table 1 Funding types Type Currency Source Payment frequency % of resources Regular budget SwF United Nations, WTO Monthly 40 Extrabudgetary funds US$ Donors Varies 60 The remaining 60% of ITC resources, referred to as extrabudgetary funds (XB), are provided principally by donor countries in support of technical assistance in trade. A smaller component is comprised of income earned by ITC from support costs and from selling its services and products. These funds are accounted for separately in US$ and are subject to different conditions depending on their nature and the agreements governing their use when the funds were accepted by the organization. 8 Results-based management of ITC financial resources ITC is progressively improving its outcome measurement and aggregation of results, risk management, automating reporting and harmonizing indicators. To achieve these goals ITC works with the support of the Office of Internal Oversight Services (OIOS) and the United Nations Board of Auditors (BoA) in designing and implementing risk management procedures. Results-based management (RBM) is a core recommendation in the ITC evaluation report of 2006 and an essential requirement of the United Nations and many donor governments. Recommendation 15, the relevant clause in the evaluation report, reads as follows: ITC s initial preparations for, and experience with RBM should be carried forward as a priority, and should include as the next step the development of an appropriate performance 8 For the purposes of this report all figures are listed in US dollars (US$) unless otherwise indicated. 24

27 management framework at the corporate level based on logical framework analysis, with a structured set of indicators for monitoring and assessing results 9 ITC has made significant efforts to embed RBM in the organization by creating clear and transparent connections between corporate objectives and the intervention logic at the project level. Audience familiarity with ITC financial information ITC programmes and budgets are reviewed by member state representatives at the Joint Advisory Group (JAG), the WTO Committee of Budget, Finance and Administration (CBFA) and the United Nations General Assembly (GA): The JAG brings together representatives of its member countries to review ITC activities and to consider its future plans. The member state representatives on the JAG are sometimes the same delegates attending United Nations Conference on Trade and Development (UNCTAD) meetings. In some cases the same individuals attend meetings of the WTO, but in other cases it is not the same individuals as some member states have sufficient staff to allocate separate representatives to WTO and UNCTAD. The ITC budget is reviewed by CBFA. The WTO General Council approves the budget. The ITC budget is reviewed by the Advisory Committee on Administrative and Budgetary Questions (ACABQ) and by the Fifth Committee of the GA. The GA approves the budget. While some delegates who review the ITC programme and budget in the WTO General Council may also attend the JAG, the GA delegates who review the ITC programme and budget in New York are not likely to be the same delegates that participate in the JAG in Geneva. 2. Regular Budget The regular budget (RB) is funded equally by the United Nations and WTO and is intended to cover the organization s running costs, including salaries and common staff costs, over a two-year period. These resources are spent on the development and implementation of core ITC competencies, or business lines, as well as programme implementation at all levels. As ITC is a purely technical cooperation agency, probity and good management have dictated the allocation of a share of RB resources to the oversight, administration and backstopping of technical cooperation activities largely funded by extrabudgetary contributions. The RB requires approval by the GA and the WTO General Council; this dual approval mechanism has resulted in some challenges and inefficiencies in the past. The budgetary process has been improved by streamlining the number of budget documents produced as well as through simplifying the budgetary approval process. RB resources available for the biennium amount to approximately US$ 80.2 million. Figure 1 ITC regular budget funding structure and delivery 9 DMI Associates, Evaluation of the International Trade Centre UNCTAD/WTO, Synthesis Report, April

28 Sources of funding Budget Examples of ITC delivery United Nations and WTO Regular budget funding Administrative, infrastructure and overheads Staff posts (not attributed to projects) Intergovernmental meetings Project design and development Oversight and backstopping of XB programmes (not charged to projects) 3. Extrabudgetary Resources Extrabudgetary funds (XB) are activated through the ITF. The funds and activities financed from XB are administered by ITC in accordance with applicable United Nations regulations and ITC procedures. The amount of XB funds depends on agreements reached with donors on an ongoing basis, with project budgets often covering several years. The ITF consists of two categories of funds: Window I consists of un-earmarked and soft-earmarked contributions from donors, while Window II consists of bilateral contributions for specific projects or programmes as well as income earned through revolving funds. Window I Unearmarked and soft-earmarked funding The purpose of Window I funds is to support expenditures contributing to preparing the future of ITC and to finance initiatives critical to ITC corporate interests and performance. This includes activities that do not fit the Window II portfolio of traditional trade-related technical assistance (TRTA) activities. Window I funds can be broken down into the following main categories: CATEGORY A: Unearmarked funds - Corporate innovation, research and development This category is used to finance initiatives focused on raising the overall efficiency of ITC in delivering TRTA and ensuring that ITC remains at the cutting edge of TRTA. It is subdivided into: A 1: Global public goods Global public goods are products and services ITC has identified as tools to reduce information asymmetries which limit the scope of developing countries to take advantage of export opportunities. A 2: Innovation for corporate efficiency Investments in innovation for corporate efficiency may include: Improving information and communication systems and services; Innovation in the efficiency of processes to reduce transaction costs; and Continual learning. A 3: Innovation for the development or maintenance of products and services Research and development (R&D) are essential to remain relevant to beneficiary country clients. CATEGORY B: Soft-earmarked funds for innovative services and projects Decisions pertaining to category B of Window I are pre-constrained by donor indications of preference in particular targets and areas of focus. This category is therefore primarily used to support initiatives that include an innovation element in the ITC approach to TRTA. A non-exhaustive list of examples includes: 26

29 Mainstreaming a new policy angle within TRTA (examples are gender, climate, and poor communities); Developing a pilot project helping to achieve a demonstrative and duplicable effect (this could develop the product of an R&D initiative into full implementation); Developing a new partnership; Ensuring private sector participation in developing countries accession to the WTO; and Leveraging donor funds. 27

30 Window II Earmarked funding Earmarked XB funding is used for bilaterally or multilaterally funded projects whose technical cooperation goals and outcomes fall within the scope of the ITC Strategic Framework. Some examples of earmarked funding follow. Bilaterals A major portion of XB is generated in the form of bilateral agreements, where funding is received from a donor for the completion of specific project proposals. These funds frequently support customized country and regional projects. In such instances, funds may only be used for the defined project(s) and unique financial and results reporting are prepared on behalf of each donor for both contributions and expenditures. These funds may not be redeployed without a donor s specific consent. European Commission The EC is the largest single donor to ITC. The financial and administrative modalities of ITC-EC technical cooperation partnerships are governed by the Financial and Administrative Framework Agreement signed between the EU and the United Nations. Enhanced Integrated Framework ITC continues to foster its cooperation with the least developed countries (LDCs) through its active participation in the EIF, a multi-stakeholder initiative and the most relevant Aid for Trade framework for LDCs. In close collaboration with EIF partners, ITC supports LDCs participating in the programme in areas related to the internationalization of SMEs. United Nations Development Programme ITC works in close partnership with UNDP to implement projects in country. Associate experts This pocket comprises funding by donors for associate expert staff working for ITC. While associate experts work on a variety of tasks and functions, this fund, composed of the monies to pay their salaries, cannot be deployed for any other purpose. Revolving funds Revolving funds are established to carry out specific activities in attaining certain objectives resulting in repayment to the fund. Revolving fund activities are financially self-supporting and of a recurring nature. The income they generate is credited back to the funds and is used for the activities of the funds. There are nine revolving funds within ITC that receive money through the sale of products and services. The use of resources within each fund is governed by the fund s terms of reference. Programme support costs The charge collected on trust funds or extrabudgetary expenditures is called Programme Support Costs (PSC) and is expressed as a percentage of direct costs (expenditure). The recovery and uses of PSC resources are of central importance to the financing and organization of efficient and effective programme support services. In its decision 80/44 of 27 June 1980, the UNDP Governing Council approved a PSC rate of 13% of annual project expenditures. In its report on the PSC arrangements embodied in UNDP Governing Council decision 80/44, the ACABQ recommended that the UNDP formula be approved by the GA for use by the United Nations Secretariat. This recommendation was accepted in resolution 35/217 of 17 December 1980, remains in force and is applicable to the ITC. The standard rate is set at 13% for extrabudgetary expenditures with the following exceptions: UNDP 10% Associate experts 12% EC and EIF 7% 28