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Info Service on WTO and Trade Issues (Oct22/04) Geneva, 6 Oct (D. Ravi Kanth) -- The World Trade Organization's Director-General, Ms Ngozi Okonjo-Iweala, apparently faced "rough weather" on 5 October in justifying her proposal to increase the WTO's budget by 7.7% from CHF 197.2 million to CHF 212.45 million in 2023, amidst spiraling global inflation and enveloping economic crises. Several countries such as the Netherlands, Germany, Sweden, the United States, India, South Africa, Sri Lanka, and Djibouti among others appear to have seriously challenged the underlying rationale of the DG's proposal in seeking CHF 15.25 million in additional funds for 2023, said people, who asked not to be quoted. During a meeting of the WTO's Committee on Budget, Finance, and Administration (CBFA) on 5 October, the DG apparently offered a detailed explanation as to why the extra funds amounting to CHF 15.25 million are needed next year. Prior to the meeting, the DG held meetings with many members and regional coalitions within the WTO to try to persuade them to accept the 7.7% increase in the WTO's budget for 2023, which translates into more than a 15% increase, if the sudden depreciation of currencies against the US dollar is taken into consideration, people said, preferring not to be quoted. At the CBFA meeting, Ms Okonjo-Iweala apparently said that she is aware of the difficult conditions being encountered by countries in the current maelstrom of serious economic crises, including rising inflation. Yet, she maintained that things are also not going well in the Secretariat and they need to be improved for which new monies are required. She appears to have said that while it is true that countries are being exposed to serious inflationary shocks, the WTO Secretariat is also facing inflationary pressures because of the increase in energy costs in Switzerland and several other areas of services, said people familiar with the discussions, who asked not to be quoted. The DG apparently sought to "cajole" members by suggesting that while it is important to have an increase in the WTO's budget to carry out the new activities, including improving the skills of the WTO staff as well as inducting new staff, a refusal by members to increase the budget by CHF 15.25 million will adversely affect the quality of services being provided by the Secretariat, including likely sharp cuts in several services like the costs for the interpreters, said people, who asked not to be quoted. It appears that the DG has allegedly concealed the fact that the WTO, under her leadership, has overspent funds during the past 18 months, which has necessitated the increase in the budget for 2023, said people, who asked not to be quoted. In an apparent attempt to cover up the crunch in funding that has been created due to unwarranted expenditures, including costly air travel and the implementation of reforms of the Secretariat by McKinsey and Company, the DG is forced to seek a hike in the budget for 2023, said members, who preferred not to be quoted. Even though the actual expenditures relating to McKinsey and Company, ostensibly for transforming the Secretariat, have not been made public so far, it appears that the whole exercise seems to have cost more than $1 million, said staffers, who asked not to be quoted. The colossal sum of money spent on these apparently "useless" projects could have been used wisely to solve the problem of the promotion of the staff at the WTO Secretariat and address the real concerns of the staff, said a member on a background basis. SUPPORT FOR THE DG'S PROPOSALS In response to the DG's statement at the CBFA meeting, Singapore apparently said it concurs with the DG about the need to increase the budgetary funds, and especially the need to bring about transformation in the overall functioning of the Secretariat, said people, who were present at the meeting. Nigeria and Cameroon also acknowledged their support for the DG's budgetary proposal, while admitting that they are also facing a serious economic crunch. INTENSE "QUIZZING" The DG's proposals for increasing the WTO's budget by 7.7% next year to CHF 212.45 million came under intense questioning from the Netherlands, Germany, Sweden, the United States, India, and several other countries. The Netherlands seems to have conveyed in unmistakable terms that it remains unclear why the DG wants an increase in the funds. It expressed doubts as to where the WTO is heading, without an advance plan, said people familiar with the discussions. Germany, another major contributor to the WTO's budget, apparently made some rather harsh comments, saying that it does not understand why the DGO (the Director-General's Office) needs more staff. It questioned the need for incurring costly expenditures on travel, especially business class travel and other excessive expenditures, said people, who were present at the meeting. The DG's report has previously mentioned "the need for increased budgetary resources for 18 additional staff posts so that the Secretariat can create more value and deliver desired output to members." (See SUNS #9654 dated 27 September 2022). The underlying rationale for additional staff was challenged at the meeting, at a time when the Secretariat has absorbed around 30 staff members from the defunct Appellate Body who are under-utilized in the divisions they were allocated to, said people familiar with the discussions. NOT ENOUGH WORK A common refrain expressed by WTO staff members is that there is not enough work for them to do and this applies to all divisions, including the DG's Office where there are five senior advisors who apparently do not have enough to do, suggested a member, who asked not to be quoted. At the CBFA meeting, Sweden apparently suggested that its government remains frugal in its expenditures and that accountability to its taxpayers is an important consideration. It raised sharp questions about the cost of travel and other unwarranted expenditures, said people familiar with the discussions. The combined European Union's 27 members pay more than 30% to the WTO's budget, said an EU member country official, who asked not to be quoted. The US is understood to have said that it concurs with the comments made by the Netherlands, Germany, and Sweden. The US apparently said that it does not think that Washington will agree to an increase in the WTO's budget at this current juncture, suggesting that it is quite harsh to increase the budget, said people, who asked not to be identified. Apparently, the US also suggested that the Secretariat is being non-transparent, saying that the information about the need to have additional staff was not being shared. It also asked where the monies allocated for the Appellate Body, to the tune of $2.5 million, have gone, said people, who preferred not to be identified. India apparently asked for a thorough audit of the existing personnel and their work allocation while South Africa suggested that the current economic situation would not justify an increase in the budget. Sri Lanka mentioned the McKinsey report and sought to know the need for additional staff, said people, who preferred not to be identified. Djibouti also raised questions about the need to increase the WTO's budget. According to estimates by the Geneva-based South Centre, an intergovernmental organization, "three LDCs in West Africa have the highest proposed relative increase to their WTO contribution, of up to 46.9%. For 11 Members, the increase in their 2023 contribution will be more than 20% compared to their 2022 contribution (including the adjustment). Eight of these Members are G77 members and 5 are from Africa. Four LDCs located in West Africa and one LDC in East Africa are proposed to be faced with the highest relative increases in their contribution, of up to 46.9% (for Guinea)." At the end of the CBFA meeting, the DG merely thanked the members, without suggesting how she plans to take the issue forward, said people who took part in the meeting. Perhaps, the DG took it for granted that her budget proposal would easily go through because of her repeated claims of success at the 12th ministerial conference (MC12), held in Geneva in June, even though the real value of the MC12 outcome is seen as "half-baked", said a person, who asked not to be quoted. +
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