Budget and Management Committee Meeting
1. Mr Chairman, Delegates, welcome to Singapore and the first meeting of the Budget and Management Committee (BMC) of 2005. This is my first BMC as Executive Director of the APEC Secretariat. I should like to pay tribute to my predecessor Ambassador Mario Artaza and the former Chair of the BMC, Mr Chutintorn Sam Gongsakdi, for their achievements in guiding the work of the BMC through 2004 so successfully. I would like to offer my congratulations to you, Mario Ignacio Artaza, on your assumption of the Chair of the BMC. Unfortunately the BMC Vice-chair, Mrs Kim Hyo-eun, is unable to be with us for this meeting, but ably filling in for her from the SOM Chair's Office is Mr Kang Jae Kwon, a former PSM from the APEC Secretariat.
2. The Budget and Management Committee is a very important one within APEC. You are charged by SOM with the examination of the budget of APEC and oversight of the management of the APEC process. With APEC reform as a priority for the year the latter is particularly important. The issue of financial sustainability for APEC is one close to the BMC. I am very pleased to welcome to the BMC over the next two days several Senior Officials from Australia, Peru, and Chinese Taipei. Their contributions to the discussions on this issue tomorrow will be particularly significant. I will talk in more detail on this tomorrow.
3. I wish you all a productive deliberation in the next two days. There is a heavy agenda ahead of you. You can be assured of the assistance of the Secretariat's fullest support in your work.
4. The APEC Secretariat is continuing its efforts to improve our finance and budget management. As my predecessors have mentioned we are preparing more realistic budgets for the Administrative Account and the BMC is also approving more realistic budgets for projects, so the scope for large returns of funds to APEC Central Funds is diminishing. Fortunately in 2004, we were able to negotiate some substantial reductions in air fares for travel to Chile. For this and other reasons set out in the paper we were able, at the end of December 2004, to return US$918,097.11 to Central Funds from the Administrative Account. Of this US$237,378 will be rolled over into 2005 for the APEC SOM Tasking Database.
5. The APEC Secretariat is continuing to exercise prudence in our financial control of the Accounts. At SOM I, I announced a series of measures which the APEC Secretariat is taking to reduce costs: ones implemented already include a reduction in the number of staff to attend SOM meetings and a tightening of the rules on business class travel. You will be asked whether this tightening should also be extended to APEC-funded travelers on projects to make the funding go further. With the new level of service to APEC and at the existing contribution level, we now anticipate that we can continue to 2006 to set aside US$2,000,000 for Operational Account projects
6. On the TILF Special Account, we are grateful to Japan for setting aside in their 2005 budget approved by the Diet at the end of March the sum of 224,205,000 yen. This is a reduction of around 30% on their 2004 contribution level to the Account. It will be your responsibility to suggest the affordable level of expenditure for 2006 TILF projects, based on this contribution level, returned funding and income. This will assist Committees and Working Groups to gauge the likely level of funding and to tailor their project proposals accordingly.
7. At the AELM in Santiago in November 2004 Australia announced the donation over three years of AUS$3,000,000 to an APEC Support Fund to complement the capacity building activities for developing economies under the existing project accounts. SOM I has requested BMC to agree the operating modalities of this account, which would also be flexible to receive other donations from economies and organizations.
8. As a means to enhance communication and efficiency the APEC Secretariat is considering an offer from Microsoft to provide APEC with a Solution Sharing Network (SSN) based on Microsoft's SharePoint program. Such an application would provide APEC members and fora with a secure on-line "white board" for policy development, responding to emerging issues; sharing best practices and collaborating on project activities. In these aspects the SSN could enhance the effectiveness of the recently established Cultural Network and the Virtual Disaster Preparedness Network. It could also reduce APEC's reliance on emails and recipient lists for disseminating information and the cost and time of holding physical meetings. Microsoft is offering, at no cost to the Secretariat, the licence fees, software installation, customization and training. The cost of new hardware to host the software has already been included in this year's IT budget.
9 Secondly on the outcomes from SOM I which are of particular relevance to BMC. The APEC 2005 slogan is "Toward One Community: Meet the C Challenge, Make the Change". This is to reassert strongly APEC's collective will to achieve its vision. There are sub-themes of:
- Renew the Commitment to the Bogor Goals - the Mid-term stock take
- Ensure Transparent and Secure Business Environment -fighting corruption and terrorism and reducing transaction costs
- Build bridges over Differences - community building through economic and technical cooperation and the development of cultural interchange.
Within this framework, Korea has identified a number of priorities for 2005:
1. Advancing Freer Trade1.1. Support for the WTO DDA1.2. Mid-term Stock-take and Future Roadmap to the Bogor Goals1.3 Enhancing APEC's Leading Role: Trade Facilitation and Capacity Building2. Fighting Corruption3. Sharing Prosperity of the Knowledge-based Economy: Protecting Innovation and Expanding Digital Opportunity4. Human Security: Counter-terrorism, Energy Security, Health and Disaster Response and Preparedness5. SMEs and Micro-enterprises6. APEC Reform7. Promoting Cross-cultural Communication.
10. There is a major concern to prioritise the issues with which APEC will deal this year. I am pleased that these priorities are placed on the BMC website. The initiative of the BMC Chair to categorise the projects seeking funding according to the extent to which they meet Leaders', Ministers' and Host priorities is a welcome one and will surely assist your deliberations. It is not an easy task though, as there are many matters of judgment involved.
11 Regarding APEC Reform, the SOM Chair suggested and SOM I agreed that there should be a Friends of the Chair group (FOTC) to move the process forward by SOM III. The FOTC comprises four ex officio posts: the SOM Chair, BMC Chair, the Executive Director of the APEC Secretariat and the Deputy Executive Director; and currently the Senior Officials of five economies: Australia, Japan, Mexico, Singapore and the United States of America. It was agreed at SOM I that APEC reform work for 2005 would focus on three key subjects.
- Higher efficiency through better coordination (lead economy: Japan)
- Financial sustainability (lead economy: Australia)
- Continuous reform (lead economy: Singapore).
At present the FOTC members are scoping the work to be done. There will be a meeting of the group on Jeju Island at SOM II on Friday 27 May 2005. We can anticipate that the BMC will be asked to assist inter-sessionally and at BMC II, particularly on matters relating to financial sustainability and the value of projects in the APEC process.
12. Finally on Secretariat staffing, I have been pleased to welcome in January 2005 the new Deputy Executive Director, Ambassador TRAN Trong Toan, from Viet Nam. He joins us with multilateral experience at the Viet Nam Foreign Ministry, including considerable work with our sister organization, PECC. There have been departures and arrivals among the PSMs since the last BMC meeting. Mr NGUYEN Minh Vu (Viet Nam) and Ms Michelle Lowe (Australia) joined us in October 2004 and April 2005, respectively. In January 2005 Mr Julio Cardenas Velarde (Peru) left the Secretariat and was replaced in March 2005 by Mr Luis Quesada. Also leaving us have been the following PSMs whose replacements are awaited: Mr Joseph Doraisamy (Malaysia) (December 2004); Ms Sheryl Lowe (New Zealand) (January 2005); and Mr Charles Jose (Philippines) (February 2005). I also hope soon to be welcoming a second PSM from Viet Nam to the Secretariat.
13 There has been one departure from among the Support Staff Members - from the Clerical Officer post approved at BMC II in 2003. This is the second such departure and we are now considering, with the development of the APEC Support Fund, to upgrade this post to a post in the accounting grade. The Support Staff Members continue to work loyally and effectively behind the scenes.
14. Once again I would like to wish you a successful and productive meeting.