Economy

Covid-19 economic impact: India favours WTO budget cut to ease members’ financial strain

Amiti Sen New Delhi | Updated on October 26, 2020 Published on October 26, 2020

Calls for greater diversity, more representation of developing countries in the WTO Secretariat

To lighten the financial strain on World Trade Organisation (WTO) member-countries facing budgetary constraints due to Covid-19 disruptions, India has suggested that the WTO Secretariat consider a voluntary short-term cut in its annual budget for 2021 or 2022, which is contributed by members.

New Delhi also raised concerns about inadequate staff representation of India and many other developing countries at the WTO and stressed on the need for greater diversity.

“The global economy is battling a significant recession and WTO members across the developed and developing world are experiencing significant budgetary constraints. This is exactly the kind of circumstances where everyone —national governments or international organisations — apply economy measures. Our suggestion stems from our firm belief that austerity begins at home, and for us, WTO is our home,” according to a statement made by India at the recent meeting of the WTO Committee on Budget, Finance and Administration.

The statement pointed out that though it appeared that member contributions had remained the same over the years due to the WTO’s zero-nominal growth budget, currency depreciation had, in fact, increased the nominal contributions of many members.

For instance, in the case of India, while it has been contributing about 4,455,445 Swiss francs annually over the last few years, due to the devaluation of the rupee, the contribution in rupee has been increasing and now amounts to around ₹36 crore.

A major chunk of the budgetary expenditure of the WTO is on staff salaries and establishment charges, and does not constitute any significant programme-related expenditure for welfare or developmental projects. Therefore, the $200-million budget to more or less just run the Secretariat needs considerable justification, especially during the times of economic hardship and austerity, India’s statement said. “We firmly believe that there is scope for rationalisation,” it added.

India reassured developing countries and LDCs that technical assistance programmes benefiting them would not be impacted by the suggested measure and they would continue to receive the funding they deserved.

Staff composition

Commenting on diversity in the WTO Secretariat, India’s statement pointed out that the country’s share in the total WTO staff in 1995 was 2.2 per cent, and is now down to 2.1 per cent. In the professional staff category, it has gone down from 4.1 per cent in 1995 to 3.5 per cent in 2019. “Even smaller countries with significantly smaller populations have more staff in the Secretariat than India, the world’s second most populous country, whose professionals have made a mark across the world with their skills and talent,” the statement said.

Developing countries and LDCs that account for more than three-fourth of the WTO membership constitute only 30 per cent of the staff, while developed countries, constituting less than one-fourth of the membership, account for 70 per cent of the staff, the statement added.

“Therefore, we call upon more measures and active efforts to increase the diversity of the Secretariat. We will work with the secretariat to achieve the diversity,” India’s statement added.

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Published on October 26, 2020
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