United Nations A/64/576 Distr.: General 16 December 2009 Original: English General Assembly Sixty-fourth session Agenda item 132 Proposed programme budget for the biennium 2010-2011 Revised estimates: effect of changes in rates of exchange and inflation Report of the Secretary-General Summary In accordance with established practice, the proposed programme budget is recosted prior to its adoption by the General Assembly. A preliminary recosting is reflected in the budget proposals of the Secretary-General issued earlier in 2009 as well as the relevant addenda and revised estimates. The present report provides the latest data on actual inflation experience, the outcome of salary surveys, the movement of post-adjustment indices in 2009 and the effect of the evolution of operational rates of exchange in 2009 on the proposed programme budget for the biennium 2010-2011. After recosting, the resources under the expenditure sections would amount to $5,143.5 million and estimates of income would amount to $563.2 million if the recommendations of the Advisory Committee on Administrative and Budgetary Questions were applied to the proposals of the Secretary-General. 09-65427 (E) 181209 *0965427* A/64/576 1. In accordance with established practice, the proposed programme budget is normally presented at the same price levels and rates of exchange as the current programme budget. At the same time, the proposed programme budget contains provisions for anticipated increases owing to inflation. These are isolated and are presented separately in the column entitled "recosting" in the budget tables. The programme budget is subsequently recosted three times in the biennial cycle, as follows: (a) The first such recosting is contained in the present report, which is submitted to the General Assembly for the purpose of updating the resource requirements in the proposed programme budget before an initial appropriation is approved; (b) The second recosting is reflected in the revised estimates included in the first performance report on the programme budget, submitted by the SecretaryGeneral at the end of the first year of the biennium in connection with approval of a revised appropriation; (c) The third recosting is included in the second performance report, submitted at the end of the second year of the biennium, in connection with approval of the final appropriation. 2. Within that framework, and as foreseen in the introduction to the budget for the biennium 2010-2011 (A/64/6 (Introduction), para. 13), the budget estimates are recosted to take into account changes in operational rates of exchange, actual inflation experience, the outcome of salary surveys and the movement of postadjustment indices. Bearing in mind the view of the Advisory Committee on Administrative and Budgetary Questions that the Administration should use such operational rates of exchange in recosting exercises as would allow for the lowest estimates (A/51/7/Add.1-9, document A/51/7/Add.6, para. 5), the present report provides updated information as at December 2009. The recosting in the present report is based on the initial budget proposals of the Secretary-General as well as the relevant addenda and revised estimates, 1 amended in accordance with the recommendations of the Advisory Committee. 2 3. Those recommendations of the Advisory Committee on Administrative and Budgetary Questions, amounting to additional requirements totalling $3.6 million for expenditure sections, are provided in the Advisory Committee's reports on the proposed programme budget for the biennium 2010-2011 (A/64/7 and Add.4, Add.6, Add.8, Add.9 and Add.10). 4. While the General Assembly has yet to take action on the recommendations of the Advisory Committee, the recommendations have been taken into account to the __________________ 1 2 A/64/6 (Introduction) and Corr.1, (Sect. 1) and Corr.1, (Sects. 2 and 3), (Sect. 4) and Corr.1, (Sect. 5) and Corr.1, (Sect. 6), (Sect. 7) and Corr.1, (Sects. 8-10), (Sect. 11) and Corr.1, (Sect. 12), (Sect. 13) and Add.1, (Sects. 14-16), (Sect. 17) and Corr.1, (Sects. 18-21), (Sect. 22) and Corr.1, (Sects. 23-26), (Sect. 27) and Corr.1, (Sect. 28), (Sects. 28A-28C), (Sect. 28D) and Add.1, (Sects. 28E and F), (Sect. 28G) and Corr.1, (Sect. 29) and Corr.1, (Sects. 30-32), (Sect. 33) and Add.1, (Sect. 34) and Add.1, (Sects. 35-36) and (Income sects. 1-3); A/64/366, A/64/380, A/64/472, A/64/477, A/64/532, A/C.5/64/2, A/C.5/64/11, A/C.5/64/12 and A/C.5/64/13. A/64/7 and Add.4, Add.6, Add.8, Add.9 and Add.10. The reports of the Advisory Committee on the Secretary-General's proposals contained in A/64/6 (Section 34, Add.1, A/64/532, A/C.5/64/11, A/C.5/64/12 and A/C.5/64/13 are pending. 2 09-65427 A/64/576 extent that they can be specifically costed. This allows Member States to have a more comprehensive picture of the overall level of estimates when determining the appropriation for the biennium 2010-2011. Nevertheless, the inclusion of the effect of applying the recommendations of the Advisory Committee is provided without prejudice to decisions yet to be made on those recommendations. 5. Table 1 provides a summary of the results of the recosting based on parameters described below. Table 1 Summary of recosting of the proposed programme budget for the biennium 2010-2011 (expenditure sections) (Thousands of United States dollars) Recosting Proposed Adjustments programme budget Proposed recommended plus the Advisory programme by the Advisory Committee a budget adjustments Committee b (1) (2) (3)=(1+2) Exchange rate (4) Inflation (5) Total (6)=(4+5) Estimated appropriation (7)=(3+6) 5 203 532.0 a b 3 627.6 5 207 159.6 47 214.2 (110 917.0) (63 702.8) 5 143 456.8 See note 1 above. See note 2 and para. 4 above. 6. The proposed revised recosting factors to be applied for this first recosting in the biennial cycle, compared with the assumptions applied in the preliminary recosting included in the proposed programme budget for the biennium 2010-2011, are set out in the following schedules: Schedule 1. Rates of exchange relative to the United States dollar and annual rates of inflation by duty station Schedule 2. Post-adjustment multipliers by duty station Schedule 3. Annual cost-of-living adjustments by duty station (General Service) Schedule 4. Effects of recosting by budget section and main determining factor. 7. As a result of the application of the revised parameters, requirements for the biennium 2010-2011 reflect a net overall decrease of $63.7 million, comprising an increase of $47.2 million for exchange rate fluctuations and a decrease of $110.9 million for inflation. 8. The estimated additional requirement of $47.2 million in respect of exchange rate fluctuations reflects the significant weakening of the United States dollar against a number of currencies. In the present recosting, the average actual rates of exchange from January to December 2009 have been used as the basis for recosting for all duty stations, with the exception of Addis Ababa and Port of Spain, for which using the latest United Nations operational rates of exchange (those in effect as at December 2009) yields the lowest estimates. The net increased requirements of $47.2 million relate to exchange rate fluctuations in respect of the Swiss franc ($46.8 million), the euro ($15.3 million), the Chilean pesos ($13.8 million), the Kenyan shilling ($4.2 million), the Thai baht ($1.6 million) and other currencies 09-65427 3 A/64/576 ($0.7 million), partially offset by decreased requirements in respect of the Ethiopian birr ($32.0 million), the shekel ($2.8 million) and other currencies ($0.4 million). 9. With respect to inflation, consideration is given, as necessary, to a series of factors, including analysis of the movement of the consumer price index at the different duty stations for goods and services and probable increases in the salaries of General Service staff as a result of the movement of consumer price indices and the outcome of comprehensive salary surveys. In the case of the salaries of Professional staff, while base salaries are not affected by exchange rates, as they are denominated in United States dollars, the post-adjustment component moves in response to changes in both cost of living and exchange rates. With regard to Professional staff costs, necessary adjustments are triggered by movements in postadjustment multipliers approved by the International Civil Service Commission. As for General Service salary and non-post requirements, changes are attributable to cost-of-living adjustments and movements in rates of inflation, respectively, relative to those originally estimated. It should be noted in this regard that realized levels of inflation in 2009 directly affect price and salary levels for the forthcoming biennium, so lower-than-anticipated 2009 increases reflect decreased requirements for the biennium 2010-2011. Accordingly, the changes resulting from inflation comprise three elements, namely, post-adjustment movements for Professional staff, salary adjustments for General Service staff and adjustments to non-post estimates. 10. The estimated decrease in requirements of $110.9 million due to inflation reflect lower requirements in respect of Professional salaries ($19.1 million), General Service salaries ($30.9 million), staff assessment ($12.3 million) and non-post objects of expenditure ($48.6 million). Reduced requirements for non-post objects due to inflation are largely the result of a number of adjustments in rates, including downward revisions for New York ($24.9 million), Geneva ($9.3 million), Addis Ababa ($4.8 million), Vienna ($3.3 million), Bangkok ($2.0 million), Santiago ($2.0 million), security field offices ($2.2 million), Beirut ($2.3 million) and other duty stations ($1.4 million), partially offset by upward adjustments for Nairobi ($3.0 million) and other duty stations ($0.7 million). 11. Schedule 4 contains a detailed listing, by budget section and main determining factor, of the revised estimates for the biennium 2010-2011 resulting from the recosting of the resource requirements of the expenditure sections in the proposed programme budget, including the adjustments related to the recommendations of the Advisory Committee, using the parameters contained in the present report. 12. The foregoing budget parameters are also proposed to be applied to the income sections. The revised estimates for the income sections are summarized in table 2. 4 09-65427 A/64/576 Table 2 Revised estimates for income sections 1 to 3 of the proposed programme budget for the biennium 2010-2011 (Thousands of United States dollars) Adjustments recommended by the Advisory Committee a (2) Income section Proposed programme budget (1) Proposed programme budget plus the Advisory Committee adjustments (3)=(1+2) Increase/ (decrease) Revised estimates 1. Income from staff assessment 2. General income 3. Services to the public Total a 537 888.8 31 199.4 382.3 569 470.5 610.4 -- -- 610.4 538 499.2 31 199.4 382.3 570 080.9 (8 036.0) 530 463.2 (22.9) 1 167.2 31 176.5 1 549.5 (6 891.7) 563 189.2 See note 2 and para. 4 above. Schedule 1 Rates of exchange relative to the United States dollar and annual rates of inflation by duty station Rates of inflation applicable to non-post objects of expenditure Rates of exchange, 2010-2011 Proposed programme budget Present report a Proposed programme budget Present report Duty station/office (currency) 2009 b 2010-2011 c 2008 d 2009 d 2010 c 2011 c Vienna (euro) Santiago (Chilean peso) Addis Ababa (Ethiopian birr) United Nations Military Observer Group in India and Pakistan (rupee) Beirut (Lebanese pound) Gaza (shekel)e Nairobi (Kenyan shilling) Mexico City (Mexican peso) The Hague (euro) Bangkok (baht) Port of Spain (Trinidad and Tobago dollar) New York (United States dollar) Geneva (Swiss franc) United Nations information centresf a 0.773 655.000 9.710 49.960 3.820 80.150 13.100 0.773 34.890 6.228 1.000 1.140 1.000 0.718 559.750 12.590 48.240 3.907 77.243 13.458 0.718 34.432 6.300 1.000 1.085 1.000 2.7 6.4 15.0 7.1 6.0 3.3 7.6 6.2 1.7 4.0 11.9 2.4 1.5 2.4 2.7 6.4 15.0 7.1 6.0 3.3 7.6 6.2 1.7 4.0 11.9 2.4 1.5 2.4 3.2 8.7 44.4 8.3 10.0 4.6 26.2 5.1 2.5 5.5 12.0 3.8 2.4 3.8 0.1 1.9 14.0 9.8 1.5 3.3 20.5 5.4 0.7 (1.0) 7.6 (0.8) (0.6) (0.8) 0.8 2.9 12.0 9.0 3.0 2.5 6.5 5.0 0.3 2.2 7.8 1.2 0.4 1.2 1.3 3.1 9.0 5.7 2.9 2.1 5.5 4.1 1.0 1.9 6.7 1.3 0.7 1.3 1 505.500 1 500.667 b c d e f Based on 2009 average actual rates. The December 2009 rate of exchange was used for Addis Ababa and Port of Spain. Revised 2008-2009 appropriations. Projected. Final 2008-2009 estimates. Includes the United Nations Relief and Works Agency for Palestine Refugees in the Near East and the United Nations Truce Supervision Organization. Combined effect of inflation and exchange rate changes. 09-65427 5 A/64/576 Schedule 2 Post-adjustment multipliers by duty station Programme budget Duty station/office 2009 a Present report 2011 2008 b 2010 2009 b 2010 2011 Vienna Santiago Addis Ababa United Nations Military Observer Group in India and Pakistan Beirut Gazac Nairobi Mexico The Hague Bangkok Port of Spain New York Security field offices Geneva United Nations information centres a b c 55.0 32.7 60.3 31.5 52.0 49.3 41.2 37.4 52.1 44.3 56.7 70.6 44.6 74.8 48.4 61.3 33.1 66.6 34.4 54.9 51.1 38.2 40.3 55.7 45.5 65.0 73.8 48.0 79.4 51.9 65.0 38.1 76.3 40.0 60.9 55.0 44.3 45.5 58.5 49.4 76.9 77.3 51.6 82.3 55.6 68.9 45.0 48.4 37.7 47.5 50.2 44.4 44.7 67.6 44.7 48.5 66.2 43.5 83.2 47.3 61.8 45.3 52.9 32.9 49.5 46.5 38.4 45.4 60.4 43.0 51.8 68.5 39.1 78.9 42.8 76.9 47.6 50.5 39.8 50.1 49.6 43.4 46.6 72.5 43.4 55.5 68.5 41.2 93.7 44.9 76.9 47.0 54.4 45.0 52.3 51.0 48.3 46.5 72.5 43.1 61.6 68.9 43.1 93.7 46.8 Revised 2008-2009 appropriations. Final 2008-2009 estimates. Includes the United Nations Relief and Works Agency for Palestine Refugees in the Near East and the United Nations Truce Supervision Organization. Schedule 3 Annual cost-of-living adjustments by duty station (General Service) (Percentage) Proposed programme budget Duty station/office 2009 a 2010-2011 b 2009 c Present report 2010 b 2011 b Vienna Santiago Addis Ababa United Nations Military Observer Group in India and Pakistan Beirut Gazad Nairobi Mexico The Hague Bangkok 2.7 6.4 15.0 7.1 6.0 3.3 7.6 6.2 1.7 4.0 2.7 6.4 15.0 7.1 6.0 3.3 7.6 6.2 1.7 4.0 1.1 4.8 10.4 2.0 3.0 0.6 11.2 -- 3.6 0.7 0.8 2.9 12.0 9.0 3.0 2.5 6.5 5.0 0.3 2.2 1.3 3.1 9.0 5.7 2.9 2.1 5.5 4.1 1.0 1.9 6 09-65427 A/64/576 Proposed programme budget Duty station/office 2009 a Present report b 2010-2011 2009 c 2010 b 2011 b Port of Spain New York Security field offices Geneva United Nations information centres a b c d 11.9 2.4 2.4 1.5 2.4 11.9 2.4 2.4 1.5 2.4 0.5 2.6 2.6 0.1 2.6 7.8 1.2 1.2 0.4 1.2 6.7 1.3 1.3 0.7 1.3 Revised 2008-2009 appropriations. Projected. Actual figures. Includes the United Nations Relief and Works Agency for Palestine Refugees in the Near East and the United Nations Truce Supervision Organization. 09-65427 7 A/64/576 8 09-65427 Schedule 4 Effects of recosting by budget section and main determining factor (Thousands of United States dollars) Recosting Adjustments Proposed programme recommended by the budget plus the Advisory Advisory Committee Committee adjustments (2) (3)=(1+2) Budget section Proposed programme budget (1) Exchange rate (4) Inflation (5) Total (6)=(4+5) Estimated appropriation (7)=(3+6) 1. 2. 3. 4. 5. 6. 7. 8. 9. Overall policymaking direction and coordination General Assembly and Economic and Social Council affairs and conference management Political affairs Disarmament Peacekeeping operations Peaceful uses of outer space International Court of Justice Legal affairs Economic and social affairs 105 286.7 691 851.8 945 632.5 23 687.6 102 121.2 8 174.0 48 710.9 48 326.2 177 283.2 -- (163.8) -- -- 10 481.2 -- (848.8) (230.7) -- 105 286.7 691 688.0 945 632.5 23 687.6 112 602.4 8 174.0 47 862.1 48 095.5 177 283.2 412.1 15 862.6 32.2 161.0 (832.7) 554.6 2 630.1 475.1 -- (3 115.9) (15 440.8) (3 859.4) (851.4) (1 631.7) (32.2) 1 182.4 (1 627.8) (6 576.9) (2 703.8) 421.8 (3 827.2) (690.4) (2 464.4) 522.4 3 812.5 (1 152.7) (6 576.9) 102 582.9 692 109.8 941 805.3 22 997.2 110 138.0 8 696.4 51 674.6 46 942.8 170 706.3 10. Least developed countries, landlocked developing countries and small island developing States 11. United Nations support for the New Partnership for Africa's Development 12. Trade and development 13. International Trade Centre UNCTAD/WTO 14. Environment 15. Human settlements 16. International drug control, crime and terrorism prevention and criminal justice 17. Economic and social development in Africa 18. Economic and social development in Asia and the Pacific 19. Economic development in Europe 20. Economic and social development in Latin America and the Caribbean 7 987.4 13 993.5 138 492.7 31 030.7 14 342.9 21 312.8 40 149.9 157 690.9 99 453.6 66 858.0 109 934.7 -- -- -- (289.5) -- -- -- -- -- -- -- 7 987.4 13 993.5 138 492.7 30 741.2 14 342.9 21 312.8 40 149.9 157 690.9 99 453.6 66 858.0 109 934.7 -- (380.6) 6 574.0 686.5 513.7 665.0 2 669.9 (24 806.7) 1 222.1 3 187.4 10 902.2 (324.7) (363.8) (811.7) (253.1) (24.5) 198.4 (454.8) 4 199.3 (4 063.7) (354.0) (5 767.9) (324.7) (744.4) 5 762.3 433.4 489.2 863.4 2 215.1 (20 607.4) (2 841.6) 2 833.4 5 134.3 7 662.7 13 249.1 144 255.0 31 174.6 14 832.1 22 176.2 42 365.0 137 083.5 96 612.0 69 691.4 115 069.0 09-65427 Budget section Proposed programme budget (1) Recosting Adjustments Proposed programme recommended by the budget plus the Advisory Advisory Committee Committee adjustments (2) (3)=(1+2) Exchange rate (4) Inflation (5) Total (6)=(4+5) Estimated appropriation (7)=(3+6) 21. Economic and social development in Western Asia 22. Regular programme of technical cooperation 23. Human rights 24. Protection of and assistance to refugees 25. Palestine refugees 26. Humanitarian assistance 27. Public information 28A. Office of the Under-Secretary-General for Management 28B. Office of Programme Planning, Budget and Accounts 28C. Office of Human Resources Management 28D. Office of Central Support Services 28E. Administration, Geneva 28F. Administration, Vienna 28G. Administration, Nairobi 29. Office of Information and Communication Technology 30. Internal oversight 31. Jointly financed administrative activities 32. Special expenses 33. Construction, alteration, improvement and major maintenance 34. Safety and security 35. Development Account 36. Staff assessment Total 72 481.3 60 499.4 142 206.4 81 230.0 48 629.9 30 969.8 196 950.9 40 124.1 41 141.8 77 754.3 185 455.0 122 996.2 39 957.7 31 023.7 100 680.3 41 473.4 12 474.9 115 787.0 94 367.7 262 713.1 18 651.3 533 642.6 5 203 532.0 -- -- (169.6) -- -- -- -- -- -- (657.5) (728.7) -- -- (182.7) (3 925.0) (64.0) (30.8) (172.9) -- -- -- 610.4 3 627.6 72 481.3 60 499.4 142 036.8 81 230.0 48 629.9 30 969.8 196 950.9 40 124.1 41 141.8 77 096.8 184 726.3 122 996.2 39 957.7 30 841.0 96 755.3 41 409.4 12 444.1 115 614.1 94 367.7 262 713.1 18 651.3 534 253.0 5 207 159.6 211.5 (1 907.5) 5 684.6 3 994.9 (941.8) 444.3 588.1 -- -- -- -- 5 965.0 2 883.8 1 034.2 -- 439.3 180.3 3.7 1 091.0 2 734.7 -- 4 279.6 (4 067.2) (3 789.4) (928.3) (2 993.2) 3.9 (668.4) (7 367.9) (1 803.9) (1 474.8) (2 888.9) (8 208.9) (5 375.7) (1 950.4) 1 294.1 (4 469.5) (1 275.8) (308.5) (118.2) (3 517.9) (8 764.7) -- (12 269.2) (3 855.7) (5 696.9) 4 756.3 1 001.7 (937.9) (224.1) (6 779.8) (1 803.9) (1 474.8) (2 888.9) (8 208.9) 589.3 933.4 2 328.3 (4 469.5) (836.5) (128.2) (114.5) (2 426.9) (6 030.0) -- (7 989.6) 68 625.6 54 802.5 146 793.1 82 231.7 47 692.0 30 745.7 190 171.1 38 320.2 39 667.0 74 207.9 176 517.4 123 585.5 40 891.1 33 169.3 92 285.8 40 572.9 12 315.9 115 499.6 91 940.8 256 683.1 18 651.3 526 263.4 47 214.2 (110 917.0) (63 702.8) 5 143 456.8 A/64/576 9