The Report provides an account of the continued progress of the United Nations Volunteer programme during 1981, leading to the achievement of a record level of 1,000 serving volunteers by the middle of the year, and highlights the major events affecting UNV development during the year. It also attempts to bring into focus the major constraints within which the programme is functioning, including, in particular, the difficulties encountered in recruiting volunteers from industrialized countries and the increasingly precarious position of the Special Voluntary Fund. In addition, the report briefly discusses targets to be set for the programme during the third cycle, taking into account existing constraints in terms of staff resources and sources of recruitment as well as the over-all financial position of UNDP.