Major Programme H Indirect Costs

2005 12 Recovery of indirect costs for co financing

2005 12 Recovery of indirect costs for co financing

Programme H.1 Contribution to shared services and other indirect costs

Programme I.1 Contribution to Shared Services and other Indirect Costs 108

Total expenditures amounted to 5 million, including 4.7 million for programme costs and 0.3 million for indirect support costs.

General description The Programme collects the indirect costs and provides a transparent way of identifying these costs and monitoring their development over time.

Owing to the separate major programme for indirect costs, the resource requirements of the various programmes do not show a large component under operating costs .

Major Programme I identifies and shows separately all indirect costs and common services in which UNIDO participates.

Adopted decision 2005 12 of 28 January 2005 on the recovery of indirect costs for co financing

Persistently weak labor productivity growth has created a situation in which unit labor costs do not fall, even if real wages remain stagnant or decline. Indeed, despite a 1.3 drop in real wages in 2011, unit labor costs remained unchanged.

Major Programme I, finally, includes only one programme related to UNIDO's contribution to shared services and other indirect costs.

The second most significant increase in the indirect costs is under UNIDO's contribution to ASHI applicable to retired staff.

9 WFP has a relatively simple and transparent system in place that ensures that recovery from supplementary contributions covers all incremental costs plus an appropriate share of administrative costs (called indirect support costs in WFP terminology).

Iran seeks compensation for expenses incurred in treating these additional cases indirect costs such as transportation costs costs incurred by caregivers opportunity costs and costs of future medical care. Iran also seeks monetary compensation for the reduced well being of its citizens who suffered from respiratory diseases.

Further, the issue of investigating ways to ensure a common methodology for calculating indirect costs is on the work plan for the UNDG.

Declining competitiveness is best captured in a single indicator unit labor costs, which measure the average cost of labor per unit of output. In a monetary union, discrepancies in wage growth relative to productivity gains that is, unit labor costs will result in a chronic accumulation of trade surpluses or deficits.

Indirect costs are those cost items of the budget that cannot be directly linked to any substantive or administrative service or programme of the Organization.

The exceptions are Major Programme B (General Management), which shows a modest increase by some 84,510 caused by the strengthening of Programme B.2 (Comptroller General, Internal Audit and Evaluation Services) and Major Programme I (Indirect Costs), which incorporates the total increase of 1,550,100 under security related expenses, partly compensated by reductions in other indirect costs and hence growing by 1,208,611.

The two phases of the security enhancements programme represent additional financing requirements for UNIDO under Programme H.1 Contribution to shared services and other indirect costs.

The result is that free markets don t generate enough final demand. In the US, for example, slashing labor costs has sharply reduced the share of labor income in GDP.

As labor costs continue to climb, is China set to lose its coveted spot as the world s workshop?

(f) The direct and indirect costs of producing, translating and disseminating the materials are identified and to report thereon to the General Assembly at its fifty seventh session

That said, Europe s disparities in production costs and competitiveness, reflected in the problem countries substantial current account deficits, may prove to be an even more difficult problem to resolve. Unit labor costs in Greece, Portugal, Spain, and Italy grew 20 30 faster than in Germany in the euro s first decade, and somewhat faster than unit labor costs in northern Europe as a whole.

These are economies that, even a decade ago, were losing market share to China and Asia, owing to their labor intensive and low value added exports. After a decade that saw wages grow faster than productivity, unit labor costs (and the real exchange rate based on those costs) appreciated sharply.

Was there indirect discrimination?

Another factor behind the upturn is the meaningful progress that a number of European countries, such as Spain, have made on structural reform. Labor market regulation has been loosened, and unit labor costs have come down.

Optimal trade intensity depends on many factors such as relative labor costs, transport costs, productivity levels, and economy of scale effects. Trends in these factors might make reduced trade intensity not only inevitable but desirable.

The indirect results have been

Discrimination may be direct or indirect.

Second, the early success of China infrastructure was built on cheap land, capital, and labor. But, despite modern infrastructure, logistical costs within China are 18 of production costs, compared with 10 in the US, owing to various internal inefficiencies.

From 1992 to 2011, labor productivity grew at an average annual rate of 0.9 , the lowest in the OECD. Since 2001, unit labor costs have been growing faster than real GDP and employment, undermining the economy s competitiveness vis à vis developing countries.

The first baby boomers have reached retirement age, and the labor force will soon be shrinking in most parts of Europe. To cover the costs of aging and maintain its position as an economic power, Europe must increase overall labor participation considerably.

In order to increase the clarity of the budget presentation in respect of separating costs that are not directly linked to the delivery of any given programme, this charge has now been established as an individual item under indirect costs and both the budget base and the resource requirements have been adjusted accordingly.

But it's a kind of indirect argument.

When medical expenses constituted only a small percentage of income, as was typically the case 50 years ago, an egalitarian approach to healthcare was a small extravagance. The direct and indirect costs were relatively minor and affordable.

It can raise Ethiopian workers productivity to half or more of Chinese levels through in house training. The savings in labor costs more than offset other incremental costs of doing business in an African environment, such as poor infrastructure and bureaucratic red tape.

To realize that potential, the tradable sector has to re expand at the margin as a weakening currency causes imports to fall and real unit labor costs decline as nominal wages flatten out, unemployed labor and capital flow toward external markets for goods, services, and resources.

The problem is that, until now, the major cause of inflation has been rapidly rising manufacturing costs, and there is no sign of a slowdown in energy and raw material prices. Moreover, a new labor law and income policies will further increase workforce costs.

This kind of indirect speech is rampant in language.

Since the euro s introduction, unit labor costs have risen dramatically faster in France than they have in Germany. According to Eurostat data published in April 2011, the hourly labor cost in France was 34.2, compared to 30.1 in Germany and nearly 20 higher than the eurozone average of 27.6.

High unit labor costs and unemployment rates are responsible, in turn, for reducing the trend rate of economic growth, mainly owing to under utilized labor, while the combination of lackluster growth and an ever mounting welfare burden has resulted in chronic budget deficits. The last surplus was in 1974.

These countries had already lost export market shares to China and other low value added and labor intensive Asian economies. Then a decade of nominal wage growth that out paced productivity gains led to a rise in unit labor costs, real exchange rate appreciation, and large current account deficits.

There is a vast difference between unit labor costs real wages adjusted for productivity in Germany and in the heavily indebted southern countries. When the crisis began, production costs in Greece were about 30 higher than in Germany, so Greece exported very little and imported very much.

These adverse conditions have inadvertently propelled a long delayed restructuring of China s labor intensive industries. As costs surge, Chinese producers are seeking higher value, new niches, and more influence over policymaking.