Most won’t call it a cut-back, let alone a withdrawal. Instead they use words like ‘restructuring’, ‘rationalising’, or even ‘stabilisation’. But whatever you call it, a spike in the value of the Swiss franc in January has escalated discussions among humanitarian and human rights agencies in Geneva about scaling down operations in one of the world’s most expensive cities.
With an unprecedented number of crises around the world already
stretching the budgets of many aid agencies, and funding struggling to
keep pace with rising needs, some agencies are quietly concluding it may
be time to move some of their operations out of the city known as “the
humanitarian capital of the world”. Geneva has long been seen as the historic home of humanitarianism,
thanks to the creation of the International Committee of the Red Cross
(ICRC) by a group of its residents in 1863. “International cooperation
was born here,” reads a government brochure.
The city hosts 31 UN and international organisations, some 300 NGOs, and
172 diplomatic missions, who are the source of one in 10 jobs provided
in the Canton of Geneva and contribute nine percent of its GDP.
But in recent years, just as the government has been trying to raise the
profile of “International Geneva”, a few agencies have left due to the
high cost of operating here. And the drastic rise in January in the
value of the Swiss franc has only made things worse.
“There are obvious benefits of being in Geneva: the networks, the
connectivity and all of that,” said Lars Peter Nissen, director of
ACAPS, a Geneva-based organisation that researches humanitarian needs.
“But [the currency hike] really pushes an already expensive thing closer
to the [edge].”
After a 15 January decision by the Swiss National Bank to abandon an
exchange rate ceiling with the euro, the value of the Swiss franc rose
by 30 percent against the euro within two days. For organisations funded
in euros or US dollars, but paying salaries and rent in francs, costs skyrocketed suddenly.
Just before the currency swing, the Economist Intelligence Unit had
published its Worldwide Cost of Living Survey, in which Singapore was
listed as the world’s most expensive city. It was forced to publish a
revised version, with Zurich and Geneva now at the top of the list.
According to real estate giant Cushman and Wakefield, office space in
Geneva costs an average of US$785 per square meter but can go as high as
$956 - cheaper than cities like London ($2321) and in some cases Paris
($978), but more than Budapest ($375) and Copenhagen ($377).
Even before the spike, ICRC had been working to reduce the size of its headquarters in Geneva, currently at 800 staff.
"If the delocalisation of the logistics service [out of Geneva] reduces
costs, we will do it, but in such a way as to limit the impact on our
staff," ICRC President Peter Mauer told a press conference last year.
“Following a constant growth over the 10 past years, our aim is to
stabilise the headquarters budget,” said Dorothea Krimstasis, deputy
head of public communication. “This means reducing functioning costs at
headquarters by 1.5 to 2.5 percent a year (3 to 5 million CHF each
year) from 2014 to 2018.’’ Some IT services are being moved to Belgrade
while some finance services have already moved to Manila, she said.
Organisations are wary of saying publicly that they are cutting back in
Geneva. The Swiss government is an influential donor and the city
remains the center of international diplomacy and cooperation. But even
the main UN headquarters is looking to cut costs. UN Secretary-General Ban Ki-moon has said the UN will reduce its budget
in 2016-17 to accommodate the current financial difficulties facing many
contributing member states. According to Corinne Momal-Vanian, former
director of the UN Information Service, Ban has asked heads of different
departments, including those in Geneva, to identify savings.
For its part, the Office of the High Commissioner for Human Rights has been considering moving 50 posts out of Geneva to regional centres. It attributes this shift to growing needs and insufficient funding – a $25 million budget shortfall at the end of 2014 certainly put pressure on identifying ways to reduce costs.
The Swiss government and others argue that public perception –
particularly in the Swiss press – exaggerates the scale of departures
from the city.
“Posts are indeed being moved out of Geneva to locations with lower
costs,” spokesperson Pierre-Alain Eltschinger told IRIN by email, adding
that as a UN member state, Switzerland is in favor of cost efficiency.
But he said the number of international civil servants working in Geneva
has remained stable over recent years. “In general, we do not think
that the relocation of some administrative units to countries with lower
costs threatens International Geneva,” he said, using the government’s
term for the concentration of international organisations, think tanks
and diplomatic missions in the city.
Still, the Swiss government has recently tried to strengthen the
attractiveness and competitiveness of Geneva, he said. Other cities are
similarly vying to lure UN agencies, which can be a boon for local
economies. Copenhagen, for example, has built a “UN City” where it
offers some agencies free rent.
Michael Møller, Director-General of the UN Office in Geneva, is
confident the "incredible value brought by International Geneva to the
world" far outweighs the costs. He has spearheaded a project to change the perception of Geneva as a sleepy bureaucracy to a place where the most important global decisions are made.
He described Geneva’s international impact as "staggering – from
formulating ideas that shape policies to standards that increase safety
in our daily lives; from mobilising resources to achieve development
goals to humanitarian action and emergency relief."
From a socialist perspective all of this information shouts out "waste!"
In the monetary system we are tied to every action, every transaction, every transfer of goods, resources, manpower or assistance requiring the use of money and the article is clearly based on that as taken for granted. This scenario demonstrates the hurdles and barriers at each step of the way of simply providing a service, a service which will cost differing sums if provided from different locations. And the difference in cost is reflected in the level, quality, quantity or effect of the final result. Moving to a cheaper location could improve the outcome, whether the target area is poverty, emergency relief or whatever the particular focus.
In a system of democratic decision making when the natural wealth of the planet belongs to all (not to just a few who abuse it for personal profit), when the very idea of profit has been banished from our minds, then organisation for mobilising resources, necessary emergency relief, transfer of vital equipment, food and other necessities could be dealt with from centres located strategically around the world. No doubt some of the very people working in agencies in Geneva right now would be some of those with the necessary skills to do this work but focussed purely on the outcome and not the budget. Logistics in socialism will be an extremely important factor, particularly in the early days when there will be much to correct and restructure according to popular will rather than to satisfy the economic desires of a tiny minority.