UNDP's Funding of Saakashvili Causes Russian Uproar, For-Ex Stonewalling Continues

Byline: Matthew Russell Lee of Inner City Press at UN
www.innercitypress.com/undp1russia091108.html

UNITED NATIONS, September 11 -- As the UN Executive Board lurched through the fourth of its five day meeting, with UNDP management having stoked its its ostensible overseers into demanding it re-open the flow of money to Kim Jong Il's North Korea, one of UNDP's equally dubious programs on the other side of the political spectrum fell under fire. It involves UNDP having paid salary to Georgian president Saakashvili, with its own funds and those of George Soros' Open Society Institute. Inner City Press first reported on the program in December 2006, then again on August 25, 2008, click here for that story. This was picked up by Russia's Ambassador to the UN Vitaly Churkin and by Russian media. See examples here, here and here.

The question to be answered is, are the members of UNDP's Executive Board really informed by UNDP management what type of programs are going on?

Meanwhile, despite the Executive Board president's gushing on September 10 that no member disagreed with the head-long rush to return to Pyongyang, even in the face of uncertainty if Kim Jong Il is on his death bed or dead, possibly toppled by even harder-line generals who have restarted that country's nuclear program, in front of the Security Council Inner City Press asked U.S. Ambassador Khalilzad for the U.S. Mission position, video here at Minute 6:43:

Inner City Press: UNDP has been meeting this week. The US position seems to be that the UNDP should go back to North Korea. Do you feel--

Ambassador Khalilzad: We have been under the view that there is a need for steps to make sure that some of the problems that have been listed will not take place again. Thank you.

But when Inner City Press asked UNDP's spokesman early on September 11 for a copy of Regional Directly Ajay Chhibber's so-called "roadmap" to return to North Korea, which even the Executive Board president said should be distributed and made transparent, it was not provided.

Also in front of the Security Council on September 11, Inner City Press asked Ban Ki-moon's envoy to Myanmar Ibrahim Gambari to explain the UN system's silence while it was losing 20% of aid funds to the Than Shwe regime. "Matthew, I hope you raise that with [OCHA's] John Holmes and with UNDP." Video here, from Minute 7:19.

Well, Inner City Press has had currency exchange loss questions pending with UNDP for weeks and weeks, and has repeated sent reminded, still with no response. This did not impinge on the self-congratulatory dream world of some Executive Board delegates cooking up rubber stamp resolutions in Conference Room C in the UN's basement on the night of September 11. Nor did it stop once and future UNDP-er Jan Mattsson for patting himself on the back for finally getting an audit of the UN Office for Project Services after seven years, and moving to pay off a blatant cost overrun for Afghan elections in 2005. It all cuminates, he told the Board on September 11, in a new UNOPS web site, in three languages: English, French and Spanish. Maybe that's why Russia didn't know about the funding to Saakashvili...

Meanwhile, UNDP has not provided answers as simple as the volume of fees it collects as a conduit for funding for prisons and military barracks all over the world, and to pay an ex-UN Kosovo Mission staffer to work for Kosovo's government. Not only could this dubious middle-man role raise more Russian questions about UNDP -- more generally, it is for reasons like these that many believe that UNDP is an opaque, unaccountable and even corrupt organization.

And see, www.innercitypress.com/undp1russia091108.html

UN's Engagement with Saakashvili Included $1500 a Month, Soros and Sweden Also Paid

Byline: Matthew Russell Lee of Inner City Press at UN
www.innercitypress.com/undp1georgia082508.html

UNITED NATIONS, August 25 -- Georgian President Mikheil Saakashvili was paid $1500 a month by the UN Development Program earlier this decade, on top of his official presidential salary, UNDP has told Inner City Press. UNDP says the goals of these payments, in which the Swedish government and financier George Soros joined, were to allow the Georgian "government to recruit the staff it needed and also to help remove incentives for corruption."

While receiving these $1500 monthly payment, Saakashvili committed to increase tax collection in Georgia. Deals were signed with , among others, British Petroleum, for the Baku - Tbilisi - Ceyhan oil pipeline. UNDP, and presumably its two co-funders, applauded this development.

Last week at the UN, Russia accused the UN's Office for the Coordination of Humanitarian Affairs of being biased in its mapping of refugee flows created by the Georgia - South Ossetia - Russia conflict. Russia also accused UN political chief Lynn Pascoe, an American, of being biased in his briefing of the Security Council. The US Committee for UNDP lists and offered praise for this paying of Saakashvili's salary.

Inner City Press first reported on UNDP's Governance Reform Program in Georgia in late 2006. Earlier this month, as the Georgian conflict heated up, Inner City Press asked UNDP how much was spent under the program? Where did the funds come from? Who got paid? Has the program continued?

Six days later, UNDP responded to Inner City Press that

On Georgia, the Governance Reform Program initiative you asked about, was two-pronged. To enable the government to recruit the staff it needed and also to help remove incentives for corruption, UNDP created a Salary Supplement Fund, funded initially by $1 million from OSI and $500,000 from UNDP, and later supplemented by another $1 million from the Swedish International Development Cooperation Agency (SIDA). This fund was designed to provide leading public servants with a wage that, though modest by international standards, was sufficient for Georgia. The fund targeted the country's highest officials: the President, Prime Minister, and Speaker of the Parliament each received $1,500 per month, ministers, $1,200, deputy ministers, $700.

In order to make the programme as efficient as possible, a clear "exit strategy" was built into the program, so that the government committed to assuming responsibility for the salary supplements over three years. The government was required to make a credible commitment to increase tax revenues in order to cover this rise in expenditure. Transparency was viewed as essential, and the government agreed to post all details of the salary supplements on an open website (http://www.drf.org.ge/). Finally, and most importantly, the government agreed that the salary supplements would be one piece of a larger effort to streamline the existing bureaucracy and create in its place a well-paid and well-organized civil service.

The second prong of the initiative was a Capacity Building Fund. This was designed to provide the government with short-term specialist expertise in areas of urgent concern and longer-term support in capacity building at a variety of ministries and other state institutions.

The government has been so successful in improving tax collection that the salary supplement program for top officials was fully taken over by the state budget after just a single year (rather than the planned three). Thanks to a drive to curb evasion and improve administration, tax revenue increased by 50%, or 4 percentage points of GDP, just in 2004. Unused UNDP and OSI funds earmarked for salary supplements were at this point transferred to the Capacity Building Fund for use in civil service reform.

Notably, the web site that UNDP says it insisted on was slow to load on Monday. So much for transparency... Why would Soros' Open Society Institute use UNDP to channel money to "top-off" Saakashvili's and a few others' salaries? In how many other countries does UNDP perform this function? This last, we'll be reporting further on. But first, UNDP should answer some questions.

And see, www.innercitypress.com/undp1georgia082508.html