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UNDP Annual Business Plan (ABP) 2016FINAL, 2 December 2015

I. The Global Context and Outlook1

The global context in 2015 has been unsettled, with continuing turbulence and uncertainty interspersed with some promising developments . This has adversely affected hopes for progress on issues of growth, development, peace and security even as the level of ambition for the future has risen substantially with the adoption of the Sustainable Development Agenda 2030 (including the SDGs). The situation is unlikely to change markedly in 2016 with many of the same phenomena expected to persist strongly.

For the first time in history, extreme poverty is projected to fall in 2015 to almost a tenth of the global population (12%), compared to 15% in 2012 and 36% in 1990, the equivalent figures for developing regions dropped sharply from 47% in 1990 to 14% in 2015 . This historic gain, however, is vulnerable to the effects of slowing growth in major emerging and other developing economies as unemployment, reduced access to credit and cutbacks in public expenditure contribute to lower incomes as well as declining availability and utilisation of basic services and safety nets. The growing concentration of global poverty in Sub-Saharan Africa is another major concern as is the unchanged status of inequalities. Although projections from the IMF indicate that global economic activity will gather pace in 2016, it will still amount to a weak recovery from the economic crisis that broke out in 2008.

Developed economies will see some strengthening of the modest recovery that started in 2014. The U.S. continued to grow robustly in 2015 to the extent that it may be nearing its ‘natural rate of unemployment’ with any further lowering of the unemployment rate likely to fuel inflationary pressures during 2016. The balance of probabilities is now moving towards an interest rate rise by the Federal Reserve before the end of the year, the first since the onset of the global economic crisis, with further rate rises possible in 2016 depending on economic conditions. The ripple effects on global capital flows will be significant, accelerating outflows from emerging and frontier markets, putting downward pressure on exchange rates and increasing the local currency cost of servicing external debt. Japan’s economy continues to struggle to regain its strength, on the other hand, despite unusually proactive monetary policy measures adopted by the Bank of Japan. This outlook is unlikely to

1 This section uses data and analysis from the AfdB/OECD/UNDP (African Economic Outlook, 2015), Asian Development Bank (Asian Development Outlook, 2015), Economist Intelligence Unit (EIU Global Forecast, October 2015), IMF (World Economic Outlook, October 2015), UN (Global MDGs Report, 2015), as well as analysis from ExO and inputs from Bx.

UNDP Annual Business plan 2016 – FInal 1

change in the absence of major structural reforms that boost investment, labour force participation (especially of women), competitiveness and productivity. While the Eurozone has seen higher growth than anticipated in early 2015, subsequent data has tempered expectations , exacerbated by four key factors: first, the economic and political impact of the region’s migration crisis which is still hard to assess, with a short-term economic boost possible from increased government spending but potentially unsustainable fiscal pressures building-up over the medium-term; second, continuing concerns about Greece’s ability to meet the benchmarks set in the bailout package that brought it back from the brink of Grexit; third, the UK’s renegotiation and possible referendum in 2016 on its EU membership; and, finally, the turmoil, albeit somewhat attenuated, in the Ukraine and its impact on relations with the Russian Federation. One of the major effects of these developments is already evident in multilateral aid budgets, with resources being redirected to refugee integration in some countries. This will be a significant concern in 2016 and beyond.

Growth prospects for major emerging markets and a larger number of other developing economies will be mixed in 2016. The key factor will be continuing ripple effects from the end of the commodities super cycle, triggered primarily by slowing growth in China, combined with a sharp rise in shale oil production in the U.S. This has exposed weaknesses in economic policy and macroeconomic management in a significant number of developing countries. At the same time, however, lower commodity prices, especially of oil, has helped net importers substantially, improving their balance-of-payments and reserves, and creating fiscal space for lowering subsidies and redirecting savings to investment in infrastructure and human development.

Many of the large emerging economies will continue to face significant downside risks . In Asia, the slowdown in growth in China is expected to continue in 2016 and beyond as the transition to a consumption-based and private-sector driven economic model faces challenges. Nevertheless, the government's growth target of ‘around 7%’ for 2015 is likely to be achieved but may be at risk in 2016. India has been a significant beneficiary of lower oil prices, improved efficiency in the Central Government, and higher levels of spending on infrastructure. Forecasts anticipate growth averaging 7.5% a year during 2016-19 although this figure could be vulnerable to corporate and investor confidence about prospects for structural reform. Overall poverty levels in the region, however, may not increase in the current environment assuming conditions do not deteriorate sharply and regional growth remains around 6% in 2015-16, as forecasted at present. Economic performance in Eastern Europe and Central Asia has been uneven in 2015 and will continue to be so in 2016 with the western part of the region likely to continue its fragile recovery and the eastern part suffering from increasing income losses due to deteriorating terms-of-trade.

The outlook for Latin America and the Caribbean has worsened substantially over the course of the year because of significant weaknesses in its biggest economies. Brazil’s GDP is estimated to fall by almost 3% this year and is forecast to drop by a further 0.7% in 2016, posing a danger to the important social gains made by the country over the past decade. Chile is coping relatively well with the end of the commodities super cycle but must still contend with slowing growth, exacerbated by policy uncertainty. Argentina, on the other hand, faces high levels of inflation, pressure on the exchange rate, steadily eroding foreign exchange reserves and an unresolved standoff with a selected group of foreign creditors. Venezuela is dealing with major macroeconomic stress but it is unclear how this will be handled moving into 2016. Complicating matters, the


burden of adjustment will be worsened by significant capital outflows as monetary policy tightens in the U.S. and access to credit markets is reduced markedly. The effects of elections in Argentina and Venezuela and continued political uncertainty in Brazil add an additional dynamic to the picture. It would be fair to assume, therefore, that these conditions will have a negative impact on poverty in the region in the immediate future.Growth in Sub-Saharan Africa is expected to recover to 4.5% in 2015 and rise to 5% in 2016, but with significant vulnerability to changes in internal and external conditions. The primary factor at the moment is the end of the commodities super cycle which has had adverse effects on some of the continent’s largest economies such as Nigeria and Angola. A related source of concern arises from the commercial credit that some commodity-dependent countries accessed prematurely over the past few years. Weakening performance in South Africa, due to a combination of domestic and external factors, will have significant effects on economies in the ‘southern cone’ of Africa due to close linkages. Countries that have attempted to reduce reliance on commodities – such as Ethiopia and Rwanda – are faring relatively better although they remain vulnerable. Overall, although the region is in much better shape to weather the slowdown than in the 1980s or even 1990s, it is dealing with its biggest policy challenge in decades: the lack of structural transformation during the years of rising exports and growth and what this implies for the future, especially finding jobs for the youngest and fastest growing population of any region whilst ensuring sustained gains in productivity to underpin higher incomes. As a result, prospects for avoiding reversals let alone building on the reductions in extreme poverty achieved over the past 15 years have dimmed somewhat and will require adjustments in policies, institutions and investments. Continuing fragility and crises in some parts of the region (see below) complicate the task.

Finally, in the Middle East and North Africa, economic growth is stagnating with a forecast rate below 3% for the third year running in 2015. With the exception of Egypt and Morocco, almost all countries in the region will see low economic growth 2. Indeed, in the case of Egypt, the fallout from the recent crash of a Russian airliner could dent economic performance and employment substantially during 2016. This outlook does not bode well for a region already struggling with the task of generating productive jobs for a rapidly growing and young population whilst managing changes in the structure of several of its economies. Three factors predominate in the region: first, the drop in oil prices that has cut export earnings and put pressure on public expenditure in oil exporting countries, especially in the Gulf region, that sustain a generous regime of subsidies and other benefits for the population; second, the relatively slow pace of economic, political and social reform in many countries; and, third, the impact of violence and civil war that is severely curtailing economic activity in places like Iraq, Libya, Syria and Yemen. The effects, especially of the latter, on lives lost, people injured, mass displacements of population, and severely damaged infrastructure and services – thus, in higher poverty and lowered human development - will persist well into the medium-term. Indeed, even large oil exporting countries will come under some pressure in 2016 and beyond as fiscal deficits grow and borrowing from domestic and international credit markets expands rapidly.

Instability and crises have accompanied uneven growth and development performance across large parts of the world. Some sixty million people have been displaced from their homes because of conflict and violence – the highest figure since the Second World War. Conflicts have become more protracted, meaning that many displaced people will not be able to return home to their communities and livelihoods for many 2 Iran, which falls in the same geographic area but is in UNDP’s Asia and the Pacific region, should also see improved growth prospects.


years. In Sub-Saharan Africa, conditions remain unusually fragile heading into 2016: in West Africa, stabilisation will need to accelerate in Mali and the headway made against Boko Haram consolidated in Nigeria (and across to Chad and Niger); the situation in a belt stretching from Central Africa to South Sudan and the Horn of Africa remains exceptionally complex, volatile and unpredictable; conditions in parts of the Great Lakes region – such as Burundi - are deteriorating sharply; and issues connected to Presidential term limits and political transitions have already contributed to social unrest and are likely to continue to do so in a number of sub-regions. Droughts and floods are also an increasing threat with serious effects already visible in the Horn of Africa and Southern Africa. Major hopeful developments, however, have been the ending of the Ebola crisis in Liberia and Sierra Leone – and potentially soon in Guinea as well - and the peaceful political transition in Nigeria from one elected civilian government to another. In the Arab States, conflict and violence in Iraq, Libya, Syria and Yemen show no signs of abating although there are some hints of potential progress on the crisis in Syria, albeit fraught with difficulties. The worsening humanitarian situation in Syria, in particular, has seen an unprecedented number of people seeking refuge in neighbouring countries and increasingly fleeing onwards to Western Europe. In Europe and the CIS, the key challenges revolve around the conflict in Ukraine and the effects on Turkey and transit countries in Europe of the large number of refugees from Syria and other countries. These developments, especially the intensity and protracted nature of the crisis in Syria, increasingly demands a resilience-building response to address the devastating situation inside the country as well as for refugees and communities in neighbouring countries grappling with the consequences of hosting them. In Asia, the situation in Afghanistan is and will remain exceptionally volatile, testing both its government and the international community. Political instability and violent extremism in other parts of South Asia also pose a continuing problem. In Latin America and the Caribbean, there has been positive movement on at least two fronts that augurs well for 2016: first, the growing likelihood that the Colombian government and the FARC will reach a final agreement in the near future on all outstanding issues; and the second, the powerful evidence of peaceful transitions following democratic elections across the region including active participation of civil society.

This year has also, once again, tested many countries’ resilience in the face of natural disasters. While some countries were able to withstand the shocks with minimum damage, others, such as Nepal, suffered large human losses and physical destruction. The likelihood of natural disasters in 2016 is unfortunately elevated, with one known factor being the phenomenon of El Nino that will reveal itself, as it has already begun to do, in the increasing frequency and intensity of floods, droughts and hurricane and cyclone activity across broad swathes of the globe.

On the policy front in 2015, world leaders adopted a sweeping 15-year global agenda to end poverty, reduce inequalities and protect the environment, the Sustainable Development Agenda 2030, at the opening of a United Nations special summit in September. Along the way, the Third International Conference on Financing for Development signalled an important shift in the international community’s approach to domestic resource mobilisation and taxation of multinationals, with potentially significant repercussions in the future. Attention is now shifting to COP21 in December that will cap an extraordinary year for global agenda-setting and action. More will follow in 2016, with the World Humanitarian Summit (WHS) in May and HABITAT III in October 2016.

Looking ahead, the evidence points unequivocally towards elevated levels of uncertainty and volatility accompanied by heightened risk of fresh crises in 2016 – a year that could prove to be very challenging for individual countries and for the international community.


II. Development and Institutional Performance in 2015

Data on UNDP’s development performance will only be available in early 2016 once COs have completed their IRRF and ROAR reporting for the year. In the interim, the IWP 2015 mid-year assessment offers a preliminary insight into the organisation’s overall ‘fitness for purpose’, updated with the latest available information.

Development

On the upside, UNDP’s programming is increasing in breadth and depth in a number of key areas. On the SDGs, UNDP was actively engaged in the lead-up to the Third International Conference on Financing for Development in July. More recently, the UNDG agreed in October that the MAPS approach would be used to guide UNCT support to countries; the mainstreaming component has been developed already and work is on-going on the other elements. UNDP has also convened or co-convened a number of meetings/workshops with UNDS agencies and entities, the World Bank, OECD, foundations and think tanks to examine tools that are available to assist countries in analysing their options and pathways for achieving the Goals by 2030. In the meantime, the HDR 2015 on Work for Human Development has been finalised and is expected to be launched on 14 December.

Considerable analytic work has been completed on employment and livelihoods at regional and country levels, with an important emphasis on the role and participation of women (Arab States, Asia-Pacific, Europe and CIS and LAC). With regard to climate change, UNDP has been accredited as one of the first seven implementing agencies for the Green Climate Fund (GCF) with two projects with a value of USD 35.9 million (in Malawi and the Maldives) approved in November and more in the pipeline for future funding rounds. Finalisation of the Accreditation Master Agreement (AMA) is still pending although progress is being made in this regard. Analytic and programmatic work on sustainable energy has been moving ahead in Africa, Arab States and Europe and CIS, including promising work on SE4ALL Action Agendas and Investment Prospectuses (Africa) and an Arab Future Energy Index. UNDP’s efforts on democratic governance also appeared to be on-track in 2015. An important focus in this area was on women’s participation and empowerment in constitutional reform, legislative issues and elections in the Arab States, Europe and CIS and LAC.

On DRR and response, UNDP was an active and visible participant at the Third World Conference on DRR that took place in Sendai in March. There was also either completed or substantial on-going work on a wide range of tools and guidelines including Post-Disaster Needs Assessments (PDNAs), Disaster Recovery Frameworks (DRFs), disaster risk governance, conflict-related development analyses (CDAs), and a conflict risk assessment framework together with standardisation of climate and disaster risk assessment methods. Preparation of an integrated


climate change, DRR and energy strategy was completed. In the Middle East, a successful Resilience Development Forum was organised in November drawing attention to the implications of protracted crisis and population displacements as a result of the Syrian crisis, with a high level of participation from the region and donor countries as well as institutions. On the Ebola crisis, in addition to immediate crisis support, such as the payment of response workers, the Recovery Assessment was finalised, leading to a corporate strategy and sustained support to COs on programmatic planning for early recovery. In response to the earthquake in Nepal, UNDP helped train community volunteers in safe demolition of unsafe housing structures and in environmentally sound debris removal, sorting and recycling. Furthermore, UNDP established help desks to support micro enterprises to restart their businesses.

Work has also started on the preparation of UNDP’s first-ever strategy on urbanisation with completion and approval expected in 2016. Another ‘first’ was achieved with the preparation of the draft corporate strategy on South-South and Triangular Cooperation which is currently being discussed informally with Member States prior to a full briefing for the Board and submission to the EG for approval by January 2016, at the latest.

On the downside, there is still quite a lot of work to do in consistently achieving substantive integration across the organisation’s areas of work. This is not only crucial to UNDP’s narrative on how it is advancing transformational change but also gains particular urgency in view of the SDGs. Although the SP was able to capture many of the most important elements of the Sustainable Development Agenda 2030, a particular concern is that UNDP’s ‘pitch’ or offer on the implementation of these Goals is not yet fully fleshed out, creating some uncertainty among staff and key constituencies. Moreover, the organisation continues to lack the speed necessary for effective positioning on emerging issues highlighted in the Strategic Plan (SP) that are becoming increasingly prominent. There is a danger of losing ground, without redoubled effort, on issues – such as urbanisation and a step change in access to renewable energy - that are not only central to sustainable development but ripe for significant new partnerships that can advance advocacy, accelerate action on the ground and potentially mobilise substantial funding. Another concern is the relative imbalance in funding across outcomes in the SP. Outcomes 6 (early recovery) and 4 (gender) are substantially under-funded when compared to targets set in the IRRF: in the former case, total expenditure as of October 2015 was USD 527 million against a target of USD 1.838 billion for 2014-15; in the case of the latter, the figures stood at USD 51 million against a target of USD 291 million. In contrast, Outcomes 1 (inclusive growth) and 5 (risk reduction) have come close to meeting their targets and, in the case of Outcome 3 (basic services) has actually exceeded it.

Institutional

Looking at the organisation’s institutional performance, 2015 saw the completion of the restructuring process with the realignment of the Bureau of Management (BoM), now re-named the Bureau for Management Services (BMS). A business coordination function was established in the new BMS and groundwork was laid for process re-engineering to support a future operations hub in New York. In addition, the organisation’s regional presence was strengthened, with staff relocating from New York to newly established hubs in Addis, Amman and Istanbul; these changes also affected established hubs in Bangkok and Panama City. Progress was reinforced by the definition of critical business


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processes in all regions. Other key initiatives included the launch of a leadership development programme; the preparation of a draft corporate strategy on ‘managed mobility’ that is expected to go to the OPG in December; the adoption of an enterprise risk management policy; and improved support to countries with high risk and complex procurement activities. Considerable support was also provided to inter-agency processes, for example, on ERP inter-operability and a risk management framework for pooled funding in fragile settings.

Despite initial success and a deliberate attempt at institutionalisation, programme alignment still has some way to go in changing attitudes, behaviours, processes, practices and skills. While there is a core group of staff at all levels who have internalised and are actively advancing alignment, there are signs that a majority may still see it as a passing phenomenon as well as compliance- and HQ-driven. The task is made more difficult by what is still substantial under-investment by the organisation in RBM capacity which is hampering COs, in particular, from securing a step change in the use of data and in the overall quality of programme and project design, management and M&E. An encouraging development, however, was progress on innovation where headway was made through the Innovation Facility and the efforts of RBx and COs, including in response to disasters (Nepal), expanding upon path breaking work underway for some time in Europe and the CIS.

The picture in 2015 remained somewhat mixed on other measures of institutional performance. Delivery has continued to be a challenge. Expenditures stood at USD 3.2 billion at the end of October 2015, representing 63% of the IRRF target of USD 5.1 billion. At the same time, funding of the organisation has taken a downward turn. Although overall funding levels look stable at around USD 5 billion per annum, there has been a steady reduction in core contributions which, in the absence of changes in UNDP’s funding and business model, imposes significant costs in terms of the organisation’s ability to make and sustain investments in strategic opportunities, staff and systems. By the end of October 2015, UNDP had received USD 3.351 billion in contributions of which USD 603 million (18%) were for core and USD 2.748 billion (82%) for non-core. To put things in perspective, core and non-core contributions received by this date were lower than in 2014 (as of 27 October 2014), by USD 56 million and USD 252 million, respectively. Total core received to-date has met 86% of the total projected for 2015 while the figure for non-core contributions stands at 64% of the target for the year. Projections for core contributions in 2016 are currently estimated at between USD 524 – 593 million, which is a quarter to a third below the USD 800 million internal planning target. With regard to non-core resources planning, noting the need for early planning as well as high quality inputs from Bureaux, an exercise is presently underway to obtain forecasts from RBx, BPPS and CRU, taking into account overall SP/IRRF targets and looking at organisation-wide non-core income forecasts for 2016 by unit and funding stream and related GMS revenue estimates based on these figures. These forecasts are expected, in turn, to provide the basis for EG discussion and agreement on income, expenditure, and related GMS revenue targets.

In terms of the ‘big picture’ on performance, UNDP has not been standing still. It has made tough choices during 2015 that position it more strongly for the road ahead, whether handling a dynamic and unpredictable operating environment, an ambitious new global development agenda or rising expectations from programme and donor countries. But critical issues still remain to be tackled in 2016 and beyond: positioning for future growth, ‘joining-up’ work across thematic areas and disciplines, increasing agility in response to crisis and opportunity, and securing a sufficient and sustainable resource base and revamped business model.


III. Business Case, Priorities and Enabling Actions for 2016

The business case for ABPs are developed using three key points of reference, with the SP as the foundation: changes in the operating environment or context; data and analysis on UNDP’s development and institutional performance; and the critical pathway to SP results, as reviewed by the Executive Group (EG) in January 2015 (‘Delivering on the SP: A Critical Pathway to 2017,’ 6 January 2015). Section I-II have covered the first two points of reference. This section recaps the critical pathway and sets out the specific business case and priorities for 2016.

Critical Pathway

The emerging pathway to development results is based on a logic that can be summarised as follows – ‘secure the global agenda, move quickly to influence key policies, plans and investments on the ground, and then show what can be done’.

The sequence begins with an emphasis in 2015 on completing the MDGs effort on a strong note and helping to shape the post-2015 agenda and the SDGs. The focus would shift in 2016-17 to turning the ‘architecture’ into reality, driven fundamentally by the need to demonstrate and enable the widespread adoption of growth and development models that are sustainable, from an economic, social, political and environmental standpoint. At the same time, there would be consistent and continuing emphasis during 2015-17 on ‘fundamentals’ that underpin the viability of the sequence outlined above and, indeed, of development prospects generally. These fundamentals can be clustered into two distinct groups: first, the structural foundations of development success, for example, economic transformation that is employment- and livelihoods-intensive and democratic governance that enables rather than undermines progress; and, second, two critical aspects of the ‘where’ and ‘how’ of development success - addressing the catalytic, perhaps even decisive, role of urban areas and urbanisation in altering development trajectories and prospects and realising the full potential of South-South and Triangular Cooperation.

With regard to organisational effectiveness and efficiency, the emerging pathway is based on a logic that can be summarised as ‘consolidate, renew and rebuild’. This logic is consistent with and tied closely to delivering on development results. To elaborate:

The sequence starts in 2015 with improving the working environment for staff, focused on strengthening morale and advancing the cultural shifts needed to achieve the maximum possible gains from the structural change at Headquarters (HQ) and regional level. The focus would then move in 2016-17 to raising efficiency, doing a better job of using evaluations and audits to raise performance and strengthening a talented and diverse workforce. Attention would also need to be directed to translating these changes and associated gains into better


performance at country level. As in the case of development results, consistent and continuing emphasis during 2015-17 would need to be paid to ‘fundamentals’ that underpin the viability of the sequence outlined above such as ensuring higher quality, risk-sensitised and data-driven programmes (and programme management) that are aligned substantively and operationally with the SP, keeping costs under control and rebuilding the resource base of the organisation.

Business Case for 2016

The business case for 2016 rests on key development and institutional factors that have been interpreted with reference to the critical pathway. They are as follows:

A. Development Factors

With the Sustainable Development Agenda 2030 adopted in September, the focus of the development community is now shifting quickly to implementation. Next year will, thus, be the ‘proving ground’ for a wide range of institutions in explaining and, to a lesser extent, demonstrating convincingly what they can do to help achieve the SDGs. This will be happening at a time of large-scale disruption, a decoupling of job creation and earnings from growth in a significant number of countries, growing complexity in policy-making involving difficult trade-offs and uncertain payoffs, commodity price shocks and increased macroeconomic and fiscal stress in many countries. A growing number of countries is also graduating into the MIC category and, despite likely setbacks along the way, many more are likely to do so by 2030. This is an environment that will demand a compelling narrative from UNDP about how countries could navigate successfully through their specific conditions to deliver on a transformation of development models and achievements in less than a generation. It will also require a credible ‘offer’ of services that responds directly to what could be the likely ‘ask’ from key actors, especially at country level, whether Heads of State or Government, Ministers of Finance, Planning or the Economy, or Ministers in key sectors such as energy, justice and local government or, indeed, leaders in the private sector and civil society, among others.

The hugely anticipated COP21 and the build-up to it has been characterised by a substantially reinvigorated international response, with INDCs submitted by a large number of countries pointing to the possibility of a significant reduction in global warming albeit still well above the ceiling of 2C. Assuming a reasonably successful outcome of the meeting, which is not a foregone conclusion, attention will shift rapidly to issues of planning, financing and technology exchange. Interest is also likely to rise in natural resource management (NRM), management of extractives industries, disaster risk management and sustainable energy as these are core issues connected to climate change. The ability to offer policy advice and services that enable countries to connect economic transformation, jobs and livelihoods creation, NRM, risk management and climate change, thus, represents a massive opportunity. It will also be a key test of relevance - as well as a major technical and capacity challenge to meet for UNDP.


As explained in Section I, uncertainty, volatility and fragility arising from both man-made and natural causes remain endemic. Combined with the increasingly protracted nature of some large-scale crises, they are contributing to a risk-pervasive operating environment that calls for increased attention to issues of prevention, preparedness, response and recovery. Crises, even major ones, may occur at any moment in 2016 while it is possible as well that some may be resolved faster than anticipated, even if only temporarily before possible relapse. Despite these circumstances, however, risk governance remains a key unresolved issue and stands in the way of progressing from a risk agnostic to a risk-informed development approach.

One major source of risk continues to be the effects of climate change, disasters and cyclical phenomena such as El Nino that will impact strongly in 2016. Another major source of risk arises from failures in political governance, including persistent lack of accountability, justice and inclusion as well as poor decisions by political leaders that precipitate conflict and crises. This class of risks remains possibly the single greatest threat to sustainable development and a key predictor of instability, violence and crises, especially when combined with economic under-performance, the spread of international terrorism and demographic pressure. Given unfolding developments this year, and likely conditions next year, it is conceivable that an elevated number of countries where UNDP operates are likely to face governance-precipitated crises in 2016. Learning to prevent and respond to threats and raising the quality of risk and political governance will, thus, be key to preventing development reversals and unlocking the pathway to the SDGs. UNDP is where it needs to be on these issues but has to capitalise quickly on its strengths.

Within this context, the World Humanitarian Summit (WHS) process is consolidating joint approaches to protracted crisis situations. There are calls for more joint analysis, planning and programming across the UN system; solutions to protracted displacement; new flexible multi-year financing models and effective leadership across the humanitarian and development communities within the UN system. The WHS remains a corporate priority for UNDP to ensure that the UN development space is secured within the new humanitarian agenda the foundation for which is expected to be laid by the Summit.

There is some ‘catching-up’ to do for UNDP. Two issues stand out in this regard, with particular relevance for 2016. Despite a clear emphasis placed in the underlying analysis for and content of the SP, UNDP has yet to articulate a convincing approach to urbanisation even though the issue is tailor-made to showcase integrated solutions to achieving the SDGs whilst dealing with next generation development concerns. With HABITAT III coming up in 2016 and in view of both its engagement in the preparatory process as well as growing portfolio in certain regions, UNDP has a window of opportunity to lay out its response to a rapidly urbanising developing world. Whether the issue is carbon emissions, jobs and livelihoods creation, environmental management, citizen security, governance innovation or risk management, cities and towns provide the perfect setting for UNDP to assist countries in implementing development solutions to scale.

The other major issue has to do with modalities of cooperation that have grown exponentially over the past decade and are of great interest to many programme as well as some donor countries: South-South and Triangular cooperation (SSC and TrC). These modalities also offer tremendous scope for accelerating progress towards the SDGs with UNDP uniquely positioned to push the envelope due to its longstanding


commitment, hosting of UNOSSC and coordination role in the UNDS. The organisation also has an outstanding commitment, grounded both in the SP and in the management response to an evaluation in 2013, to develop and implement its first-ever corporate strategy on SSC and TrC. A draft is ready, as noted earlier, but requires finalisation and approval as well as rapid implementation in 2016 as UNDP approaches the mid-point of its SP. Key countries will be monitoring the organisation’s progress in this regard as a measure of its intent in embracing news ways of working and new partnerships in the years ahead. Next year may be the litmus test of that.

B. Institutional Factors

The initial gains from structural change need to be capitalised and built upon, especially with regard to two key issues. The first has to do with adjusting UNDP’s business model to the reality of declining core funding and growing reliance on non-core resources together with a client base that is increasingly middle income. This has created a growing mismatch between structures, staffing and functions as they exist today, especially at country level, and what is both needed and can be sustained over the medium-term. Three aspects stand out: UNDP’s funding model; CO presence and typology; and clustering of transactional services that support COs. In taking necessary steps, however, attention will need to be paid to issues such as the impact of changes in physical presence on UNDP’s ability to attract, manage and deliver funds including government cost sharing. Another major issue has to do with improving staff engagement and morale at a time when they are coping with high levels of change and rising demands. Building skills for coping, leadership and collaboration as well as taking concrete measures to deal with issues identified through the GSS will be vital in 2016 to creating a working environment that motivates staff and raises productivity.

As shown in Section II, programme alignment to the SP and related efforts to raise programme and project quality assurance and appraisal standards as well as social and environmental safeguards have made notable progress during 2015. Lessons learnt from the past, however, show very clearly that any flagging of momentum over the short- to medium-term could have hugely deleterious effects in achieving the step change in attitudes, behaviours, skills, practices and processes that are critical to achieving a sustained and substantial improvement in the quality of design, management and M&E as well as in ensuring adherence to safeguards. Three key requirements are particularly relevant for 2016. First, a successful revision of the PPM within the new POPP architecture that codifies and institutionalises programme alignment while dealing with programming issues that are not only pressing at the moment but anticipate the operating environment that COs, in particular, may face over the next 5-10 years. The link with the re-think of UNDP’s business model will be vital in this regard. Second, with programme and project quality assurance standards becoming mandatory in 2016, a push to ensure that they are applied successfully to the crop of 40 CPDs expected next year as well as to a high proportion of projects worldwide. Third, with major lessons learnt from the experience with Teamworks, a relaunch of UNDP’s knowledge networks that helps ensure greater use of knowledge in policy advisory work and programme and project design. It is increasingly evident that knowledge-intensity and the quality of the empirical evidence backing UNDP’s advocacy, advice and programming will play an important part in determining how the organisation is perceived – and engaged – by programme and donor countries in the future.


Next year presents a major opportunity for UNDP, if handled well, to secure a strong institutional position on the implementation of the SDGs and in coordinating the UNDS. Success or failure in this connection will have enduring effects into the current and next SP and possibly further into the future. The stakes are high and require a commensurate response. There are three major ‘moments’, in chronological order, that have to be managed well. The first is the Ministerial Meeting in February where UNDP needs to demonstrate the depth, clarity and originality of its development thinking as well as the relevance, quality and cost-effectiveness of the services it can offer in the face of rising expectations and growing competition from familiar and unfamiliar sources. The question to be answered is whether UNDP will be a key partner for the future or a well-regarded friend from the past.

The second is the MTR where a convincing case needs to be made, based on the best possible evidence and argument, that UNDP is delivering on results and changing in important ways, thus, increasingly, if not yet fully, ready to take on the SDGs.

The third and final is the QCPR which is likely to directly and substantially affect how the UNDS responds to the SDGs and how individual UN agencies and entities fare in the new system-wide dispensation. There is already substantial positioning occurring within and outside the UNDS. Under these circumstances, it will be essential for UNDP to be clear about its objectives, whether for itself or for the system, as well as its room for manoeuvre. At the same time, UNDP must be able to advance its views systematically, through presence and pragmatic coalition-building, in the ECOSOC Dialogues and in the negotiations leading up to the QCPR.

Much of the efforts described above depend crucially on three key factors which demand prioritisation in 2016. First, expanding the funding base of the organisation to raise and stabilise its income, whether in terms of contributing countries, new sources of funding or better access to opportunities from which UNDP may have been excluded in the past. Securing reduced earmarking of non-core resources would help in this regard as well. Second, UNDP must be able to deliver on the resources that it has already received, through active pipeline management and achievement of high rates of delivery. Third, complementary efforts are essential to do better on cost recovery and cost alignment with funding sources, not least the systematic application of DPC. These are all elements of an essential package of measures to manage costs, spend smartly and raise income in the year ahead.

Priorities for 2016

Based on the business case described above, the following final list of prioritised SP outputs and institutional results areas are proposed for inclusion in the ABP 2016:

Development

1.3. Solutions developed at national and sub-national levels for sustainable management of natural resources, ecosystem services, chemicals and waste


1.4 Scaled-up action on climate change adaptation and mitigation across sectors which is funded and implemented3.4 Functions, financing and capacity of rule of law institutions enabled, including to improve access to justice5.2 Effective institutional, legislative and policy frameworks in place to enhance the implementation of disaster and climate risk management measures at national and sub-national levels5.5 Policy frameworks and institutional mechanisms enabled at the national and sub-national levels for the peaceful management of emerging and recurring conflicts and tensions6.3 Innovative partnerships are used to inform national planning and identification of solutions for early recovery7.3 National development plans to address poverty and inequality are sustainable and risk resilient7.5 South-South and Triangular cooperation partnerships established and/or strengthened for development solutions

Institutional

2.1 UNDP is an efficient and cost conscious organisation 4.1 UNDP leaders foster a working environment in which staff are engaged, leading to improved performance and a smooth transition to the new Strategic Plan7.2 UNDP recognised as a development partner of choice by its partners9.1 Greater progress on coordination, leadership and management of RC system ensured


Priority SP Outputs for 2016 Enabling Actions (EA)3 Lead and Support Units

Development

1.3. Solutions developed at national and sub-national levels for sustainable management of natural resources, ecosystem services, chemicals and waste

EA 1.3.1: Align UNDP’s approach to NRM with the SDGs, especially jobs and livelihoods creation targeting and involving the poor, particularly women in poverty, with ‘proof of concept’ underway in at least 12-16 countries by the end of 2016.

EA 1.3.2: Identify policy and investment options and trade-offs relevant to land management and extractives within the context of the SDGs, to guide global advisory work on sectoral and national development planning.

Co-Leads: BPPS, selected RBxSupport: NA

Lead: BPPSSupport: RBx

1.4 Scaled-up action on climate change adaptation and mitigation across sectors which is funded and implemented

EA 1.4.1: Identify key measures to be taken by UNDP in 10 countries to strengthen national capacities to mobilise additional and innovative forms of public and private finance for climate change (aligned with broader development goals).

EA 1.4.2: Target support to at least 9-12 countries to enable completion and implementation of climate change policies

Co-Leads: BPPS, RBAPSupport: BERA, BMS, RBx

Co-Leads: BPPS, RBAPSupport: RBx

3 Please note that references to actual numbers of countries is only preliminary and indicative in nature based on early-stage consultation. In-depth discussions at HQ between CBx and RBx and between RBx and COs during November 2015 - January 2016 will lead to these numbers being finalised with a reasonably high degree of confidence that action can take place as indicated.


Priority SP Outputs for 2016 Enabling Actions (EA) Lead and Support Units

Developmentand action plans that accelerate action in sectors that have the highest potential for jobs and livelihoods creation, benefiting the poor and promoting gender equality and women’s empowerment.

E.A 1.4.3: Launch and systematically monitor the roll-out of the new corporate sustainable energy framework across all of UNDP’s CC energy-based mitigation services to de-risk and boost investment in reliable and sustainable energy, especially renewables.


3.4 Functions, financing and capacity of rule of law institutions enabled, including to improve access to justice

EA 3.4.1: Leverage UNDP’s co-leadership of the Global Focal Point on the Rule of Law to shape the UN’s updated offer and architecture on peaceful and inclusive societies, to embed accountability, inclusion and access to justice as key elements for achieving the SDGs.

EA 3.4.2: Reassess how human rights and peacebuilding are addressed in UNDP’s work on the rule of law and initiate a first phase of adjustment, where needed, in 7 countries with the most acute needs and biggest programming gaps.

Lead: BPPSSupport: NA


5.2 Effective institutional, legislative and policy frameworks in place to enhance the implementation of disaster and climate risk management measures at national and sub-

EA 5.2.1: Implement the recommendations of UNDP’s disaster risk governance review to enable gender responsive disaster and climate risk governance, based on adjustments in corporate policy and programmatic support in 6 countries.




Developmentnational levels.

EA 5.2.2: Operationalise UNDP’s policy on integrated disaster risk reduction, climate change and energy through actions in 3-6 countries and monitor results systematically.

EA 5.2.3: Clarify the interface between disasters and conflict for improved risk governance and incorporate the approach in on-going programmes or upcoming CPDs in existing or potentially fragile contexts.

E.A. 5.2.4: Achieve a significant improvement in UNDP’s preparedness, crisis response and recovery capacities with initial results evident in 6 high priority countries during 2016 (comprises the comprehensive recovery policy, integrated crisis support package and crisis response SOPs).


Co-Leads: BPPS, selected RBxSupport: CRU

Co-Leads: CRU, BPPS, selected RBxSupport: BMS, BERA

5.5 Policy frameworks and institutional mechanisms enabled at the national and sub-national levels for the peaceful management of emerging and recurring conflicts and tensions

EA 5.5.1: Expand UNDP’s offer on the promotion and management of inclusive peace and peacebuilding processes, with a focus on building parties’ capacities for dialogue and conflict resolution and ensuring the engagement of women, youth and excluded groups, with initial results in 12 countries.

EA 5.5.2: Develop and initiate implementation of a corporate policy as well as associated advisory and programming options on preventing violent extremism, to become a credible emerging partner in this area of work.

Lead: BPPS, selected RBxSupport: NA




Development

6.3 Innovative partnerships are used to inform national planning and identification of solutions for early recovery

EA 6.3.1: Lead the establishment of private sector networks for crisis (conflict/disaster) preparedness, response and recovery at global, regional and national levels.

EA 6.3.2: Develop partnerships and operational mechanisms to access a broader range of financing options on crisis preparedness, response and recovery to enable more effective action by UNDP (timely, to scale and sustained).

EA 6.3.3: Assess UNDP’s preparedness to deal with the connected issues of protracted crises, displacement and mass migration and identify and implement targeted adjustments in existing programmes and capacities during 2016-17.

Co-Leads: BPPS, BERASupport: CRU, RBx

Co-Leads: BPPS, CRU (humanitarian), BMSSupport: BERA

Co-Leads: BPPS, RBAS, RBECSupport: CRU, Other RBx

7.3 National development plans to address poverty and inequality are sustainable and risk resilient

EA 7.3.1: Develop, communicate and advocate for UNDP’s corporate offer on SDGs implementation and monitoring, mobilising staff internally and targeting key external constituencies (governments, UNDG, foundations, civil society and the private sector).

EA 7.3.2: Help localise the SDGs at sub-national level in 50 countries by the end of 2016 to enable progress towards

Co-Leads: BPPS, ExO, BERASupport: RBx

Co-Leads: BPPS, All RBxSupport: NA



Developmentuniversal access to basic services.

EA 7.3.3: Define, communicate and advocate for UNDP’s first ever strategy and programmatic offer on sustainable, inclusive and resilient urbanisation, showcasing integrated approaches that respond to the SDGs and deal with next generation development issues.

Co-Leads: BPPS, RBAP, RBLAC (?)Support: RBx

7.5 South-South and Triangular cooperation partnerships established and/or strengthened for development solutions

EA 7.5.1: Achieve a ‘soft launch’ of the Global Development Solutions Exchange.

EA 7.5.2: Develop and rollout revised policy advisory and capacity development services globally (Service Packages 1-3 in the strategy).

EA 7.5.3: Integrate the corporate strategy systematically in CPDs due for Board approval in 2016 (up to 40 countries globally) as well as in Global and Regional Programmes (following the MTR).

Co-Leads: BPPS, ExOSupport: RBx, BERA

Co-Leads: BPPS, ExOSupport: RBx

Co-Leads: BPPS, RBxSupport: ExO


Priority Results Areas for 2016 Enabling Actions (EA) Lead and Support Units

Institutional Effectiveness and Efficiency

2.1 UNDP is an efficient and cost conscious organization

EAM 2.1.1: Reinforce the link between UNDP’s programming architecture, programme alignment and the organisation’s business model:

Revise and adopt the new PPM architecture and content

Apply quality standards at programme and project levels, aiming for at least 80% of projects being quality assured by year-end

Implement the new monitoring policy for programmes and projects as part of the prescriptive content in the POPP

EAM 2.1.2: Launch new corporate knowledge networks and an updated approach to social networking that take into account lessons learnt and support greater use of knowledge in policy advisory work and programme and project design.

EAM 2.1.3: Develop and approve a revamped business model for COs comprising:

A redesigned corporate (CO-global) funding model to improve organisational agility and flexibility, with approaches piloted by RBx ahead of full implementation in 2017

An updated CO presence and typology model

Lead: BPPS, All RBxSupport: BMS

Lead: BPPSSupport: RBx, BMS

Co-Leads: ExO, All RBxSupport: BMS



Institutional Effectiveness and Efficiencydeveloped and approved, addressing funding, staffing, access to functions outside the CO, and programmatic aspects, with a regular CO capacity assessment mechanism instituted

Scope and financing framework for clustering of CO transactional services developed with implementation commenced in 30 COs

E.A.M 2.1.4: Implement measures in the revised POPP and the procurement strategy to secure gains in delivery as well as sustainability and efficiency:

Approve Fast Track 2.0 and integrate into the new POPP

Apply sustainability criteria in tender documents and evaluations in 30 COs by year-end

Ensure 35% of UNDP procurement is performed through Long Term Agreements (overall in 2016)

Adopt the e-tendering system in 40 COs and business units by year-end

Co-Leads BMS, selected RBxSupport: Other RBx, BERA, BPPS

4.1 UNDP leaders foster a working environment in which staff are engaged, leading to improved performance and a smooth transition to the new Strategic Plan

EAM 4.1.1: Train at least 600 staff under the Leadership Development Pathways (LDP) programme, based on eligibility (supervisors), and develop a new programme for emerging leaders (non-supervisors).

EAM 4.1.2: Upgrade and commence implementation of a workforce planning and sourcing strategy to meet the needs of UNDP’s business model and offer on the SDGs.

Lead: BMSSupport: RBx, other CBx

Lead: BMSSupport: ExO, RBx, CBx



Institutional Effectiveness and EfficiencyEAM 4.1.3: Implement measures across UNDP to lift organisational performance:

At least 31 COs4 and HQ business units with identified staff engagement challenges implement concrete action plans to address relevant issues, as identified in the GSS (2014)

At least 85% of staff across UNDP complete their 2016 individual performance plans closely aligned with IWP enabling actions and have performance discussions with their supervisors throughout the year

Leads: Targeted business units (for the GSS), all business units for PMDsSupport: BMS

7.2 UNDP recognized as a development partner of choice by its partners

EAM 7.2.1: Achieve a successful Mid-Term Review of the SP and the Integrated Budget based on an effective preparatory process, strong Board endorsement of analysis and recommendations and systematic follow-up.

EAM 7.2.2: Establish or renew strategic partnerships with government and non-government actors that have the greatest potential to widen and deepen the core and non-core funding base of UNDP, leveraging UNDP’s SDG offer and new financing approaches:

Secure new or increased core resource commitments from DAC and non-DAC countries through ‘100 partners’ campaign’, from 56 contributing countries

Co-Leads: ExO, BPPS, BMSSupport: RBx, BERA, CRU

Co-Leads: BERA, BPPS (private sector), CRU (humanitarian)Support: ExO (structural dialogue), BMS, RBx (non-DAC. GCS, regional banks)

4 RBA: Botswana, Gabon, Lesotho, Chad, Namibia, Malawi, Cabo Verde; RBAP: Iran, Papua New Guinea, Philippines, Nepal, India, Pakistan; RBEC: Turkey, Turkmenistan, Ukraine, Kyrgyzstan, Belarus; RBAS: Iraq, Sudan, Algeria, Tunisia, Kuwait, Saudi Arabia, Lebanon; RBLAC: Bolivia, Brazil, Colombia, El Salvador, Jamaica, Honduras



Institutional Effectiveness and Efficiencyin 2015 to 76 in 2016

Implement an engagement strategy for revamped partnerships with multilateral and national development banks, with at least 6 bank-specific action plans approved by OPG for implementation in 2016

Implement the revised private sector and foundation strategy, and prioritise development and implementation of the resource mobilisation plan targeting private funders

Mobilise domestic finances for sustainable development (GCS) at country level

Advance dialogue with Member States on flexible and predictable funding mechanisms

EAM 7.2.3: Implement measures to effectively and efficiently plan for and utilise financial resources:

Improve the quality and timeliness of income and expenditure projections at Bureau and CO level and by funding stream based on EG-approved corporate targets

Ensure timely support to business units for build-up and maturity of pipeline

Achieve delivery targets, especially in COs, using applicable criteria

Accelerate the implementation of the harmonized cost recovery policy and ensure cost alignment with funding sources:o 75% of cost sharing agreements compliant with

the harmonized cost recovery rates

Co-Leads: BMS, All RBxSupport: BERA, BPPS



Institutional Effectiveness and Efficiencyo 10% increase in multi-funded positions (P5 and

below)o 10% increase in the application of DPC

EAM 7.2.4: Increase the quantity and quality of UNDP’s published information at all levels of the organisation to maintain leadership on transparency with disclosure targets of:

o 50% for resultso 90% for project related documentso 100% for procurement data

EAM 7.2.5: Substantially raise coverage of UNDP’s advocacy messages, offer and actions connected to the SDGs in targeted international as well as regional and national media.

Co-Leads: BPPS, BERA, BMSSupport: RBx

Lead: BERASupport: BPPS, RBx

9.1 Greater progress on coordination, leadership and management of RC system ensured

EAM 9.1.1: Position UNDP strategically within the UNDS in the implementation of the SDGs and secure key institutional objectives related to UN reform:

Define and systematically advocate UNDP’s institutional objectives on UN reform in the Ministerial Meeting, ECOSOC Dialogues and QCPR 2016 (including UNDP’s role as manager of the RCS)

Follow through on the application of MAPS in key upcoming UNDG programme policies, procedures and guidance

Reinforce the role of the RC in UNDS support to the implementation of the Sustainable Development Agenda 2030 at the country level

Co-Leads: ExO, BPPS, BERASupport: BMS, RBx



Institutional Effectiveness and Efficiency

EAM 9.1.2: Position UNDP strategically in the management of resources for sustainable development from existing and new sources:

Management of pooled funds (e.g. the updated SDG-F)

Implementation of the UNDG SOPs (e.g. business operations)

Creation of a coherent and more efficient framework for services provided to UN Agencies at all levels

Lead: BMSSupport: BERA, BPPS, RBx


Documents

popp.undp.org€¦ · Web viewLead the establishment of private sector networks for crisis (conflict/disaster) preparedness, response and recovery at global, regional and national