23 Aug, 2013

Total Transparency Reigns as UNWTO Gets Set for 20th General Assembly

Imtiaz Muqbil

In yet another exemplary display of total transparency, the UNWTO has posted on its website the entire set of working papers and financial statements to be discussed at the upcoming General Assembly and Executive Council meetings in Zambia and Zimbabwe between August 24-29.

The public has full access to the material which provide copious detail on everything from the strategic plans and policy objectives to financial outlays and membership dues and the progress being made on restructuring the organisation. Taxpayers worldwide can know exactly how much their governments are paying for membership, which countries are in arrears, how the UNWTO is spending the money on its various activities and projects, and much more.

No other global travel industry organisation does anything comparable, although many pay lip service to the need for transparency and accountability.

Check out all the documentation for the General Assembly here, and for the Executive Council here.

A detailed look at the papers shows that UNWTO Secretary-General Taleb Rifai, a former tourism minister of Jordan and the first Arab to hold this post, has spearheaded a rigorous programme of activities, projects and programmes in spite of a six-year budget freeze. It is this kind of transparency and commitment that has earned Mr Rifai a vote of confidence from the UNWTO Executive Council. At its last meeting in Belgrade, Serbia, on 27-29 May 2013, all 28 Council members present voted unanimously to recommend Mr. Rifai for an extended term as Secretary-General for 2014-2017.

The 20th General Assembly is taking place at a time when the global tourism industry is in generally good shape, barring a few problems in individual countries. One of the reports says that despite the global economic volatility, particularly affecting the Eurozone, international tourist arrivals grew by 4% in 2012 to reach a historic milestone of over one billion (1.035 billion). The April 2013 issue of the UNWTO World Tourism Barometer says that emerging economies (+4.3%) regained the lead over advanced economies (+3.7%), comprising a share of 47% of all international tourist arrivals.

As part of its policy to raise the prominence of the tourism industry in the global development agenda, the UNWTO focussed on travel facilitation, taxation and connectivity as policy issues during 2012-2013. For 2014-15, the General Assembly is being asked to approve a programme structured along two objectives: A) improving competitiveness and quality, while B) ensuring sustainability and ethics in tourism operations. Says one working paper:

“Strategic objective A aims at a continuous improvement of competitiveness of the Members tourism supply, promoting quality and excellence, improving their human resources, enhancing their marketing and image promotion techniques, facilitating the movements of travellers, and providing them with guidance and updated information and data, nationally and internationally, on tourism trends, market forecasting and accurate evaluation of the economic contribution of tourism.

“Strategic objective B aims at increasing the contribution of tourism to all aspects of sustainability, including the question of ethics, in relation with the Millennium Development Goals, especially poverty alleviation and environmental protection, climate change and biodiversity conservation challenges, as well as a full integration of tourism in the local economy of destinations, ensuring fair economic benefits distribution and a high resilience of the sector.”

One key strategy tool will be the UNWTO/WTTC Open Letter on Travel and Tourism, a joint initiative by UNWTO and the World Travel and Tourism Council (WTTC) that is presented to Heads of State and Government worldwide, seeking their acknowledgement of the relevance of tourism in facing today’s global challenges and their support for policies that stimulate the growth of the sector. Between 28 February 2011, when President Felipe Calderón of Mexico first received the Open Letter, and the end of June 2013, it has been presented to 53 leaders.

As the UNWTO looks ahead to 2014-15, one key issue will be funding. Since taking office for his first four-year term in 2010, Dr Rifai has promised members that every effort will be made to do more with less. He has honoured a pledge to maintain a “Zero Nominal Growth” in the UNWTO budget, but now says that is no longer sustainable in view of inflationary pressures and impact on programmes and staff.

The financial statements and reports show the following:

The Budgets for the biennia 2008-2009 and 2010-2011 were 25,110,000 euros and 25,200,000 euros respectively. The budget for the 2012-2013 biennium has also been maintained at 25,200,000 euros. Since 2010, the Secretariat has undertaken significant re-structuring, aiming among other issues to reduce costs and enhance efficiency. In early 2013, Dr Rifai took this further by consolidating the number of programmes and redeploying some staff positions.

This budget freeze has taken its toll. Says one financial report to the GA, “As a direct result of the application of the Zero Nominal Growth policy for the period 2008- 2013, the budget of the Organization underwent a loss of purchasing power of 14% on account of inflation over this 6-year period. If that budget freeze were to continue in 2014-2015, an additional loss of 5.7% of purchasing power would be incurred, raising the total loss for the period to an amount of 20%.

“The impact of such policy being extended over two additional years is seen as significantly detrimental to the capacity of the Organization to manage and implement (its) mandate … more particularly in view of the small size of the Secretariat and the requirements imposed by the United Nations family of organizations to its members.”

Consequently, Members are being asked to allow a budgetary increase that has only been adjusted for inflation, currently estimated at 2.8% per annum, which will yield a budget of 26,616,000 euros for 2014-2015.

Says the report, “While the Secretariat is demonstrating its full commitment to the Members’ mandate of delivering more programme with less resources, and therefore stretching efficiency gains to the maximum, it is also noted that, due to the relatively small size of the Organization’s budget, the mandate to carry out a global programme delivery and the significant impact of having implemented a ZNG policy for two consecutive biennia, the Secretariat’s capacity to absorb additional mandates without corresponding resources or the sunsetting of alternative activities has been eliminated.

“A contributing factor to this restrictive situation is the fact that most of the Secretariat’s cost structure is unavoidably attached either to inflation or to other mandatory changes, such as the updates provided by the International Civil Service Commission, or the cost increases in Headquarters-related contracts for goods and services.

“In fact, while the application of no-growth policies for six consecutive years has undoubtedly imposed efficiencies in the Organization, it has also implied some distortions to an optimal allocation of resources, and has reduced the Organization’s capacity to react and its internal flexibility.”

The Full and Associate Members will pay total membership fees of 11,937,200 euros for 2014, and 12,406,083 euros for 2015, and the balance is expected be covered by the contributions of Affiliate Members and other sources of funding. That will also include support from external parties, both technically and financially.

A major effort is being made to get members which are in arrears to pay up. The UNWTO is cautiously estimating that around EUR1,000,000 could be received during 2013. A total of EUR362,619 already has been collected from affiliate members.

The UNWTO report says those Members with arrears are now mainly countries that have experienced past significant social or economic difficulties and/or natural disasters. Many are simply not yet in a position to make a firm commitment to repay their contribution arrears or to adopt a suitable payment plan. “The Secretariat will persist in its policy of encouraging those Members that are in arrears with their contributions to present proposals for the payment of their arrears at least in instalments,” the report says.

Such proposals have been extended to countries such as Cambodia, Guinea, Lao PDR, Bolivia, Central African Republic, Congo, El Salvador, Gambia, Mauritania, Nicaragua, Togo, Uruguay, Yemen, Burkina Faso, Côte d’Ivoire and Uganda and to Affiliate Members such as Fundaçao Comissao de Turismo Integrado do Nordeste – Fundaçao CTI-NE, United Federation of Travel Agents Association (UFTAA), Asociación Mundial para la Formación Profesional (AMFORT) and Souv Club Cameroon.

In the last year, Myanmar, Liberia and the United Arab Emirates have joined the UNWTO as new Members while Canada and Latvia have withdrawn.

Special measures are also being taken to reduce membership fees for very lowly populated small islands with limited economic potential which have shown an interest in joining UNWTO but are prevented from doing so because of their small capacity to pay.

The contribution fee of the Affiliate Members is being proposed to remain unchanged at 2,400 euros per year. The total budgeted income to be financed by these Members is 543,000 euros for each year of the next period.

The budget freeze has also resulted in an effective decline in the staff strength from over 100 positions filled in 2008-2009 to 95 in 2012-2013 and beyond, out of 106 established posts. Zero Growth Policy calls for the need to keep some 10 per cent of the positions vacant. Consequently, when deciding on the publication of vacancies, the Secretary-General will take into account factors such as the need to optimize structures, to ensure business continuity, and to be ready to meet emerging demands, the financial reports says.

Progress is also being made in the reform of the organisation, which the Secretary-General has to report on annually, in line with an Implementation Plan. One of the documents posted on the website offers a detailed look at the progress so far, and what is still be done.