Haoliang Xu: Speech on "The Changing Role of UNDP in Asia-Pacific" at Columbia University's School of International and Public Affairs

Ladies and gentlemen,

Dear colleagues,

Thank you all for coming here today. It is great to be back at SIPA, my alma mater. Thank you to Professor Stephen Noerper for organizing this lecture.

I would like to talk about development as part of a solution to the challenges you are discussing, peace and security. While development is not a cure for all ills, it can address some of the root causes of instability and conflict.

In my speech, I will show how my organization, the United Nations Development Programme, contributes to creating more inclusive, just and sustainable societies in Asia-Pacific. And, since you are an advanced group, I will share with you my personal experience and explain how we keep our operations going in an increasingly constrained financial environment.

CHANGING ONE UNDP OFFICE

Imagine you get a senior job at a UNDP office. You arrive there and find out that the administrative, or what we call the core, budget for your office barely covers the costs of rent and salaries. It does not leave you with resources to hire new experts, commission research papers, or pilot innovative ideas.

This is what happened when I arrived in Almaty in 2007 as the UN Resident Coordinator and UNDP Resident Representative to Kazakhstan. The budget had no resources for new policy and project initiatives.

The risk was that UNDP would not be able to continue to support Kazakhstan with new initiatives that would match the highly-valued and successful programs we had already rolled out, such as the long-term development strategy Kazakhstan 2030, the Poverty Reduction Program 2003-2006, the Program for Rural Development 2003-2010, and the National Environment Protection Program.

In order to maintain the same level of strategic engagement, we needed the Government to invest in future activities.

So I set out to explain to partners, including the President, that UNDP can continue to serve as their development partner only if the Government assumes a larger financial responsibility with the Country Office.

In our outreach we emphasized the values we bring:

• strategic policy advice based on development experience in other countries;
• successful implementation solutions tested in other countries; and
• access to the global development system.

At the same time, internally, we were changing our own attitude. We had to stop behaving like a donor and adopt instead a partnering, client-oriented approach. We began to operate as an advisor and development services provider.

Through keeping up high-quality work, timely delivery of results, and changing our mind-frame, we were able to engage the Government. The portfolio of activities co-financed by the Government gradually increased from zero to more than $15 million over the next few years, which enables us to implement a robust development portfolio addressing critical social, economic and environmental issues in Kazakhstan.

CHANGING UNDP IN ASIA-PACIFIC

There is a remarkable development story to be told about Asia-Pacific. The region’s GDP has increased from about 10 percent of the global figure in 1950’s to nearly 40 percent today.

The number of people living in poverty in the region decreased from one billion to 300 million in the past 15 years.

As a result of the progress, traditional donors began to cut the Official Development Assistance, or ODA, to the growing number of middle-income countries in Asia-Pacific.

Yet significant challenges remain. Rising inequality, rapid urbanization, aging population, migration, extremism, and environmental degradation require sophisticated solutions.

Governments and development partners expected UNDP to contribute to the solutions.

However, when I became the director for UNDP in Asia-Pacific in 2013, all 24 Country Offices were in a similar situation as the one UNDP Kazakhstan was in when I arrived in Almaty years before.

The core funding available to Country Offices in Asia-Pacific was decreasing, from $150 million in 2012 to $77 million in 2016.

UNDP had the potential to continue to provide countries with development solutions, but we did not have the required resources.

As with Kazakhstan, engaging governments was the most direct way of ensuring that our expertise and capabilities could continue to serve the countries in the region.

The portfolio of government co-financed projects, which can be seen as an indicator of cooperation with governments, was alarmingly low at two to three percent of the overall budget.

So we set a goal for ourselves to increase government co-financing to 10 percent of our budget in 2016, which gave our offices a clear sense of direction.

In order to succeed, we needed to improve our efficiency, produce quality project proposals, and reposition UNDP from a donor to an advisor and development services provider.

We took the following steps to improve our services to countries in Asia-Pacific:

• Carried out mappings of national development strategies against the SDGs;
• Encouraged innovation across all areas of our work through our Innovation Fund and Innovation Champions;
• Published research on the aging population, SDGs implementation, and development finance;
• Mobilized new investments in development – for example, we drafted a set of projects which attracted more than $200 million from the Green Climate Fund;
• Launched a social impact fund and signed the first large financial contributions to UNDP from individual contributors;
• Improved our efficiency, cut 500 jobs while maintaining $US1 billion annual delivery; and
• Balanced our budget.

Internally, we consistently communicated with our staff the need to transform from a donor to an advisor and development services provider:

• Discussed our strategy during Twitter chats;
• Published articles, interviews and speeches;
• Organized trainings and conferences;
• Held an internal idea contest encouraging personnel to enter proposals on how to engage governments; and
• Issued video and written messages to the staff.

I am proud to say that we more than quadrupled the volume of co-financing to $116 million.

We achieved our goal to increase government co-financing to 10 percent of our 2016 budget!

The number of offices with government co-financing agreements has now increased from four to 18.

These partnerships allow us to create new opportunities ranging from embedding the SDGs to development plans and budgets in Pakistan, through improving the state administration in Palau, to supporting adaptation to climate change in Nepal.

THE FUTURE ROLE OF UNDP

In March, we will hold our Regional Management Meeting in Bangkok, where we will discuss a vision for four SDGs engagement platforms:

1. Regional SDG Forum –for engagement with governments on sustainable development planning and budgeting;
2. Responsible Business Forum –for the engagement of the private sector in achieving the SDGs;
3. Youth Forum for Leadership and Job Creation – focused on employment and self-realization opportunities for the youth; and
4. Civil Society Forum – for civil society engagement in the SDGs.

Let me give you now an example of a concrete activity from Northeast Asia that may be integrated into the platforms: The Belt and Road Initiative of China.

The Belt and Road Initiative is a mechanism for economic growth and regional co-operation, involving more than 4 billion people, many of whom live in developing countries.

UNDP was the first international organization to sign a Memorandum of Understanding on cooperation on the Initiative with the Government of China in September 2016.

At the signing ceremony, UNDP Administrator Helen Clark said: “We look forward to working with China to mobilize and facilitate co-ordination among all stakeholders involved to create an environment which will promote poverty eradication, environmental sustainability and inclusive social development.”

Our role will be to make sure that the development opportunities that will arise as a result of the infrastructure investments will be inclusive and environmentally sustainable – that they will benefit communities beyond the economic zones of major cities.

The financing for these projects will come from blending various financial sources: from private investments through government funding to ODA and innovative finance, such as social impact investing or green bonds.

This mirrors our strategy to continue to diversify sources of finance for development.

To that end, we set for ourselves a goal to increase domestic (government and private sector) co-financing to 15 percent of our 2017 delivery.

CLOSING

In the new development architecture, ODA accounts for less than one percent of financial flows in Asia-Pacific, and domestic resources have become the main source of development finance.

Yet ODA remains indispensable for its catalytic role – it mobilizes additional domestic and international resources and knowledge transfer.

In this environment, UNDP is no longer a donor which finances the work of the government and other development organizations.

Instead, UNDP is evolving into an advisor and development services provider.

The growing demand for our services is encouraging. It is a recognition of our relevance, expertise and trustworthiness.

As the UN Secretary-General Antonio Guterres said, “we will reposition development at the center of our work, and engage in a comprehensive reform of the United Nations development system.”

I believe we have already started this process in Asia-Pacific.

Every one of our actions is designed to help countries become more sustainable, peaceful and prosperous - in line with our mandate and plans approved by the UNDP’s governing bodies.

The process of development must continue as it is part of a solution to the challenges you are discussing, peace and security.