Statement by H.E. Mr. Mitsuru Kitano, Permanent Representative, Ambassador Extraordinary and Plenipotentiary of Japan at the 31st Session of the Programme and Budget Committee for the UNIDO

Agenda item 5.Financial situation of UNIDO, including unutilized balances of appropriations; Agenda item 6. Programme and budget 2016-2017; Agenda item 7. Scale of assessments for apportionment of the regular budget expenses for the biennium 2016-2017; Agenda item 8. Working Capital Fund for the biennium 2016-2017;
 
Madame Chair,

I would like to begin by congratulating you on your election as Chair of the thirty-first session of the Programme and Budget Committee. I am sure that this session will be successful under your able leadership. I would also like to thank the outgoing Chairman, Ambassador Abel Adelakun Ayoko of Nigeria, together with his Bureau, for their devoted work.
 
Madame Chair,

2014 was an important year for UNIDO, marked by the start of the implementation of the Lima Declaration and the Organization’s new mandate on inclusive and sustainable industrial development. We appreciate the efforts made by UNIDO and its staff throughout the past year, and commend the Director-General’s leadership.

 
Japan highly values UNIDO’s strength and expertise in its industrial development assistance. This includes (1) its proximity to the private sector, (2) its role as a platform for donor cooperation enabling targeted partnerships and (3) its strength in recipient countries’ key sectors such as food processing, Agro-industry, renewable energy, and capacity building of SMEs.
 
 
2015 is also a significant year for UNIDO since it is in this year that the international community is to formulate the post-2015 development agenda and we are to enhance our efforts to address global development challenges. In this context, Japan hopes that UNIDO will actively pursue its policy priorities. Particularly:
-  the concept of ISID, incorporated in the outcome document of the Open Working Group for the Sustainable Development Goals,
 - the new Programme for Country Partnerships aiming to enhance the Organization’s developmental impact,  in terms of donor partnership, and
- the management reform led by the Director-General, with the aim to further increase the Organization’s effectiveness and efficiency. 
 

Japan also values the Director-General’s successful visit to Japan this month. We hope to expand our collaboration based on the perspectives elaborated by the Director-General when he visited our country.
 
Madame Chair,

Japan congratulates UNIDO on the positive trend in overall volume of voluntary contributions for services towards Member States. We commend UNIDO’s resource mobilization efforts, and hope that they would bring about tangible results on the ground. This is a positive element I am happy to acknowledge.
 
On the other hand, when discussing the regular budget of the Organization, we must face another reality. In order to keep providing quality technical cooperation services, a sound financial base grounded on the regular budget of the Organization is essential. Japan thus joins the Secretariat in urging Member States and former Member States that have not yet paid their assessed contribution to do so without delay in the interest of all.
 

Furthermore, the withdrawal of Member States is a serious issue and a matter of regret from the viewpoint of both universality and financial management of the Organization. The recent loss of two Member States, and the intention expressed by another, have grave financial implications on the Organization that UNIDO must not fail to consider.
 

Japan reaffirms the importance of adhering to IDB Decision 39/ 7 in the formulation of the next biennium budget. The reduction of portion of departing states’ assessed contributions is not only essential to the avoidance of further withdrawal but also to hinder posing additional burden on those remaining in the Organization.
 
 
Madame Chair,

Allow me to continue with some specific comments.

 
First and foremost, we appeal to UNIDO to identify and intensify its efforts to reverse the trend of withdrawal, recognizing the urgency of the situation and the importance of ensuring that current Member States remain committed to the Organization. Bearing this in mind, we propose that a serious analysis be conducted on the underlying reasons for the withdrawal of those states and on the risk of its potential expansion, and preventive measures be duly considered and put into place.
 

An increase in the regular budget is a contradictory reaction to the situation’s severity from our stand point. We therefore have concern on the level of the proposed biennium budget 2016-2017. Japan reiterates its request to the Director-General to take strong initiative in revising the proposal to zero nominal growth. We regret not having received concrete responses to our comments so far.
 

Turning to the matter of additional costs, Japan is of the view that the issue of funding the three elements UNRC, PCP and ERP should be further elaborated. One option would be to seek extra budget from voluntary contributions for these costs. Another way would be to finance the new elements through further cost saving. Regardless of the method chosen, in our view, the regular budget baseline should remain at 133.3 million euro in total.
 

We suppose the establishment of two special accounts deserves our positive consideration as practical means to absorb the three additional elements, if necessary. UBAs can be a possible source for such special accounts, on the condition that Member States voluntarily renounce their share.
 

Madame Chair,

These are our comments, and we hope that UNIDO proves its intentions for reform and its willingness to take action.
 

In closing, please rest assured that Japan remains a supporter of UNIDO’s role in industrial development, and we continue to offer our constructive partnership to the Organization in identifying and formulating the best way forward.

 
Thank you.