FACING SHORTFALL, ITU COMMITTEE CALLS FOR STAFF CUTS

Revised draft decision on ITU financial plan for 2004- 2007 tracks closely with document on morning plenary agenda, but contains several significant differences. It adds section saying ITU’s reserve account should be maintained at level not less than 3% of budget, and it instructs SG to “elaborate a cost-reduction plan” that included possible staff cuts. Delegates split at first over need to start staff reduction program and whether any such layoffs should begin in 2003 or later, but later agreed costs must be slashed, even if that involved layoffs. Member of Staff Council, which represents ITU employees, said council wouldn’t cooperate with drastic reductions and suggested SG start fundraising campaign. SG, Yoshio Utsumi, said he would make “every effort” to comply with resolution. However, Utsumi said, that will be “extremely difficult to carry out” and would result in greatly lowered quality of services. Committee 6 was beginning its line-item review of ITU’s estimated revenue and expenses for 2004-2007 at our deadline.

By Wed. morning, 15 countries had reduced amount of their voluntary contributory units, including large pullbacks by several European nations. Current upper limit of such contributions is 315,000 Swiss francs per unit, or about $211,000. As announced, countries were Argentina, Australia, Bahamas, Denmark, Djibouti, Finland, Guinea-Bissau, Uzbekistan, Italy, The Netherlands, The Philippines, U.K., Sweden, Tajikistan, Uruguay. However, Uganda increased its contribution, move that won praise from several delegations. Other member states maintained their current funding level, including U.S., which pays 30 units. Cutbacks lowered total contribution from member states by nearly 22 units, or $18.7 million.

Secy.-Gen. Yoshio Utsumi said reduction would mean dramatic changes in ITU. In note circulated Wed. afternoon, he said across-board cuts would affect General Secretariat (GS) and Sectors differently. GS has higher fixed costs and 66% of its staff consists of employees with lower salaries. Therefore, he said, average salary per staff member in GS was lower than average for whole organization. Staff cut in GS to reach needed savings would mean firing more GS employees than others, he said. GS now has 450 employees, Utsumi said. Ultimately, he said, he may lose some 120 people, some through attrition but 53 through layoff. That means money for separation and other payments, he said, but those funds aren’t available and aren’t included in current financial plan. Similar problems will occur in Sectors in 2004-2007, Utsumi said. “Based on the above factual information it should be noted that current level of services to Member States can by no means be maintained,” the Secy.-Gen. said. “It will therefore be impossible to implement the financial plan because the core functions of the Union will be severely affected.”

In his summation, plenary chmn. expressed surprise at number of countries calling for Committee 6 meeting on financial plan. He authorized it, but asked Germany, Morocco and other nations to guide panel on issues to focus on, including: (1) New income and expense estimates. (2) Need to balance income and expenditures. (3) Question of contributions by Sector Members. (4) Need to look at reserve fund issues. Committee 6 also will have to factor in Secy.- Gen.’s concerns, chmn. said.

Shortfall sends “negative signal,” said Indian delegate. Wherever phrase “within available financial resources” is used in resolutions approving various ITU activities, he said, those activities now won’t happen. Some activities are core ITU concerns, he said, such as World Summit on Information Society and bridging digital divide. Asian countries haven’t reduced their contributions, he said, and any nations that have done so should rethink their decision. “Surely this is not the time to cut down our contributions,” the delegate said. Saudi Arabia delegate echoed India’s concerns, saying Arab countries were convinced of ITU’s importance and had expressed that conviction via their contributions, despite economic difficulties. Iranian representative said his country was “disappointed and perhaps shocked” by “sad and bad news.” There’s no way to implement all resolutions group spent hours negotiating, he said, and he urged member states to reconsider their positions.

Telecom sector has changed and it’s inevitable that ITU should as well, New Zealand delegate said. Brunt of financial load perhaps should be borne now by Sector Members, not member states, he said. Ugandan representative said drop in contributions was more statement about ITU than about economic problems. “Maybe the ITU is joining the real world now,” he said. Budget crunch may be “a kick in the sitting facilities so we can wake up.”

In other Plenipot developments, delegates gave final approval to several resolutions, including: (1) Helping Yugoslavia rebuild its public broadcasting and telecom systems. (2) Helping Afghanistan rebuild its telecom system. (3) Setting framework for ITU input on World Summit on Information Society. (4) Making several changes in ITU Constitution and Convention.