unido partner for prosperity

ProsperityPartner forUNIDO

2 UNIDO Partner forProsperity

6 Introduction

Contents

10Made to measure – adjusting to changingdevelopment needs14Growth in challenging times16Showcasing the success of UNIDO18UNIDO and Gender. Not just a women’s issue20Building a leaner, more efficient UNIDO

24Agribusiness: building the chain to cut poverty27Human security and youth unemployment –Promoting livelihoods30Trade Capacity Building – helping developingcountries to make the grade33Corporate social responsibility: doing well bydoing good34Pharmaceuticals in Africa: necessary medicine36Energy: powering progress40Environmental action on a global scale

Introduction

Growth with quality

How UNIDOmakesa difference

46 Interview with the Director General

Interview with theDirector General

22

44

8

4

The publication has been prepared under the overall guidance ofSarwar Hobohm, Director of the Strategic Planning, DonorPartnerships and Quality Assurance Branch of the United NationsIndustrial Development Organization (UNIDO). It was written by JennyLarsen, UNIDO consultant, with coordination provided by HeddaOehlberger-Femundsenden, Industrial Development Officer, UNIDO.The publication would not have been possible without substantiveinputs from across the entire Organization. Special thanks are due toCharles Arthur, Lau Choy Fun, Carmen Khoury, Christoph Klose andLeah Laahne for their valuable support to the drafting, design andprinting process.Designed by Smith+Bell, UK.Printed by Imprimerie Centrale, Luxembourg, on PEFC certified paper.

3UNIDOPartner forProsperity

52UNIDO and the private sector56Green Industry Initiative and Platform – doing more with less59Delivering as one UN61Energy partnerships for a brighter future63UNIDO’s networks connecting people

68UNIDO – trusted advisor

Analytical and policyadvisory services

74Looking to the future

Looking ahead:Priorities for the future

Partnerships forincreased effectiveness

50

66

72

www.smithplusbell.com


Phot

o: U

NID

O


INTRODUCTION


The past decade at UNIDO has been one ofimmense change and renewal. Followingthe crisis years of the late 1990s when itsvery survival seemed to be in question, inthe early 2000s UNIDO set about putting itsown house in order with a cut in budgetsand staff, and a sharpening of priorities. A new, slimmer, more effective UNIDOemerged.

On taking up office in 2005, DirectorGeneral Kandeh K. Yumkella took charge ofan organization still adjusting to thesestructural changes. At the same time, heinherited a new long-term strategic visionwhich focused UNIDO on three newthematic areas: poverty reduction throughproductive activities; trade capacitybuilding; and energy and the environment.This vision also gave importance to anumber of cross-cutting areas includingprivate-sector involvement and the sharingand dissemination of knowledge.

Yumkella promised to remain faithful tothese priorities, and build on them to createa culture and a structure that would allowUNIDO to respond more flexibly andefficiently to changing needs from itsMember States, carving out a role for theOrganization as a trusted and effectivepartner for development.

The Director General set out to do this byputting sustainable industrial developmentat the heart of efforts to reduce poverty. He called for a holistic approach thatrecognised the links between energy andproduction, production and trade and theenergy-production-environment nexus.

Yumkella also called for a broaderdevelopment agenda to help reach theMillennium Developments Goals (MDGs).At the start of his tenure, progress was beingmade but often not where it was mostneeded. Some economies were forgingahead while the poorest were still strugglingto keep up. Income inequalities were on therise, along with global unemployment.

The Director General argued that whileincreased investment in health, educationand infrastructure was important, moreneeded to be done to include productivecapacities on the agenda in order to achievea lasting reduction in poverty throughwealth creation, and so enable people indeveloping countries to fund their owninvestment in future.

To make this happen, encouragement forlocal entrepreneurship would be crucial,along with private-sector involvement andthe right kind of policy environment to

support it. UNIDO would build everstronger links between investmentprogrammes and entrepreneurship. It would also support institution-building,small and medium-sized enterprises(SMEs), especially in agro-processing, andtrade capacity building, all areas where theOrganization was already active.

It was only through such measures, whichfocused on encouraging industrialdevelopment, that poor countries would beable to combat the many economic, socialand environmental challenges thatthreatened them. To achieve growth,

Phot

o: U

NID

O

UNIDO headquartersat the United NationsOffice in Vienna.


employment and poverty reduction,countries needed to invest in capacitybuilding to improve their productivity,boost competitiveness and gain access tointernational markets. Putting money intoindustry would also be crucial for tacklingenvironmental degradation through thedevelopment of clean technology solutions.

Therefore, UNIDO, under Yumkella,sought to make pro-poor industrializationand private-sector development strategiescentral to efforts to reduce poverty and putdeveloping countries on a path toprosperity.

New industrial realitiesIn planning how to turn these ideas intopractical programmes, UNIDO needed totake account of new trends in industry andbusiness itself.

It was clear that globalization ofproduction, trade, technology and financehad made manufacturing moreinternational, making it harder fordeveloping countries to compete. The unprecedented rate of technologicalprogress in information andcommunications was also having an evergreater impact on market access andcompetitiveness. This made buildingindustrial capacities and institutions all themore important for countries struggling tocatch up. At the same time, tradeliberalization, deregulation and private-sector dynamism were becomingincreasingly important forindustrialization. The distinction betweenindustry and services had become moreblurred, with the growing tradeability ofhighly skilled professional servicesredefining the international division oflabour. Finally, a move toward greateraccountability and transparency in bothpublic and corporate governance, andstricter norms on quality standards andenvironmental compliance, put newpressures on industry.

Not all of these trends were new, but thespeed at which they emerged posed a threatand a challenge to developing countries,especially those marginalized byglobalization. They required clear actionfrom international organizations such asUNIDO to build the capabilities that wouldallow all countries to benefit from theserapid changes.

Turning ideas into actionYumkella took steps to turn his vision intoreality by maximizing the provision oftechnical cooperation and advisory servicesat the country level. He intended tostrengthen UNIDO’s core programme areasby making sure that they were betterintegrated. As such, agribusinessdevelopment would go beyond promotingagro-industries to highlight the linkbetween SME development, ruraldevelopment and the need to connect ruraleconomies to global trade. UNIDO wouldalso pursue a broader role in energy bypromoting access to reliable energy suppliesand access to knowledge to developenvironmentally friendly technologies.

Yumkella envisioned that UNIDO wouldbe able to punch above its weight by goingbeyond practical programmeimplementation to expand its role as aknowledge provider. This would meantaking a more active position in three areas:as an adviser on industrial policy andstrategy with a stronger analytical focus; as aconvenor, providing a platform for theaccumulation and dissemination ofindustry-related knowledge; and through astronger ‘normative’ role in setting commonglobal standards, whether on sustainability,green energy or energy efficiency.

In support of these goals, UNIDO aimedto pursue stronger and deeper partnershipswith Member States, seeking dialogue andguidance. Enhancing partnerships betweenMember States, in particular by reinforcingSouth-South cooperation, would also be apriority. At the same time, the Organizationintended to strengthen its relations withfellow UN agencies, the private sector, NGOs and financial institutions.

Last but not least, Yumkella promised tostrengthen the commitment and responseof UNIDO’s staff. Poorly staffed fieldoperations would be improved, opennessand transparency would be championedand excellence rewarded.

Taking stockOver the past eight years an enormousamount of work has been done to realizethese ambitions. Looking back, many of thethemes and priorities chosen appearprescient. Today, partnerships areincreasingly important to solving theenormous global challenges facing us.UNIDO’s decision to grow throughpartnership has raised its profile and itsrelevance. Energy has become ever moreimportant to efforts to combat climatechange and reduce poverty, while productivecapacity, having been left out of the MDGs,is back on the agenda in discussions to formthe post-2015 development goals.

UNIDO’s greatest successes, such as theGreen Industry Platform, work on tradecapacity building, development of agro-industry in LDCs, organizationalrestructuring, and efforts to put energy atthe centre of the global developmentagenda, have come largely as a result of acareful balancing of its functions: technicalcooperation, research and analysis, standardsetting and compliance, and partnerships.

The following pages provide a closer lookat these achievements.

UNIDO Partner forProsperity8

Phot

o: ©

iSto

ckph

oto.

com


GROWTHWITHQUALITY


The world’s economic centre of gravity hasshifted south over the past decade with thedynamic growth of countries such as Brazil,China and India. Their economies gallopedforward at a pace that has left OECDcountries in the starting blocks. During thefirst decade of the new millennium, GDP percapita trebled in all three of these countries,bringing millions out of poverty. For the firsttime in 150 years their combined GDP isequal to that of Canada, France, Germany,Italy, the UK and the US put together. Andthey are not alone: Egypt, Malaysia, Mexico,Nigeria, Turkey and Tunisia among othershave also grown rapidly to achieve what theWorld Bank terms middle-income status.

This dazzling rise of the South isprofoundly altering the North-South axis andhas changed relations across developingcountries. States that were once recipients ofaid are now donors themselves. Increasingly,these emerging economies are playing abigger role in the development of poor ones,becoming a source of ideas, information,resources and technology. This is reflected inthe explosion in trade and investment seenacross the South over the last years. In total,over half the exports produced in developingcountries now go to other developingcountries, and South-South exportsaccounted for 23% of overall world trade in2010 compared to 13% a decade earlier.

This increased economic weight is givingthe rapidly growing economies of the Southgreater political clout too. Brazil, China,

Over the past eight years, the number and scope of UNIDO programmes has risensignificantly, extending the Organization’s reach into new regions and countries. UNIDOnow applies a more streamlined, flexible approach to its services that allows it to offer ahighly targeted response to individual countries’ needs. This has helped to raise UNIDO’sprofile and considerably strengthened the overall quality of its programmes. The newdirection reflects broader changes within the UN system, and the development communityas a whole, as it adapts to major shifts in the global economic and political landscape.

India, Russia, and South Africa, collectivelyknown as the BRICS, are home to threebillion people and play an increasinglyimportant role in global affairs. At theirlatest summit in Durban in March 2013, theyagreed to set up a development bank tosupport other developing countries. Theyalso plan to establish other institutions asthey position themselves as an alternativeeconomic development model to the West.The result is a new multi-polar world that isrequiring donors and internationalorganizations to think differently about aidand development.

As part of the UN system, UNIDO hasresponded to this new dynamic, adapting itsapproach to the evolving needs ofdeveloping and transition countries. Thegrowing interconnectedness of economies,the impact of the economic crisis and theincreasingly important role of South-Southrelations have all influenced UNIDO’sresponse to Least Developed Country (LDC)needs, and its engagement with establishedand nascent Middle-Income Countries(MICs), which offer new opportunities forpartnership.

South facingAt the start of his first term in 2005, theDirector General called for greater action onSouth-South cooperation, viewing it as anarea of untapped potential. It was clear thatadvanced developing countries were in aunique position to pass on the benefits of

their experience to others who hadembarked on a similar development path.New mechanisms and partnershipssupported by UNIDO’s expertise andnetworks could help to share this positiveexperience with those still struggling to geta foot on the economic development ladder.Development would no longer be deliveredwholesale from North to South. Rather,North-South cooperation needed tocompliment South-South cooperation in anew triangular arrangement that tookaccount of the specific needs of individualcountries at varying stages of development.This view also reflected growing support forSouth-South cooperation within the UNsystem as a whole, as evidenced by the High-Level Conference on South-SouthCooperation in Nairobi in 2009 and thestrong endorsement given by the 2011 UNConference on Least Developed Countries(LDC-IV) in Istanbul.

UNIDO is working to reduce poverty andpromote industrial development indeveloping countries and LDCs throughpromoting greater investment, technicalcooperation, technology transfer and tradeamong the countries of the South. As aresult of these activities, the Organizationhas become an important partner in South-South and triangular cooperation, incollaboration with key players such asUNDP and UN-OHRLLS. One example ofUNIDO’s success in this area is theestablishment of South-South centres,which make use of developing countryknowledge and technology to promotesustainable development.

Knowledge centresIn 2006, the Director General set up aSpecial Programme Group focusing onSouth-South cooperation. It played a

Made tomeasure adjusting to

‰


changing development needs

Phot

o: ©

iSto

ckph

oto.

com


‘South-South exports accounted for 23% of overall world trade in 2010 compared to 13% a decade earlier’

defining role in setting up South-SouthIndustrial Centres in India (2006) and inChina (2007). These centres are providing apractical way of harnessing the experienceof more advanced developing countries andsharing it with others, in particular theLDCs. They promote trade and investmentand industrial development throughpartnerships that strengthen informationand technology transfer. The India centrelaunched 13 projects between 2007 and 2012on a total budget of $4.8 million, rangingfrom agro-industries to renewable energyand capacity building. The centre alsosupports business-to-business links andalliances at home and abroad. It has helpedcapacity building and the spread ofnetworks with 12 developing countries andLDCs: 10 in Africa and 2 in Asia.

In China, operations began in 2008. Oneof the centre’s greatest successes has beenthe development of the EnterpriseDevelopment and Investment Promotion(EDIP) Programme for China, which ranfrom 2010-11. It introduced a new businessmodel which combined entrepreneurshipdevelopment, training, consultative andfinancial services in an innovative way to

help business start-ups. In 2011, it won theHewlett Packard LIFE Award for thisinnovative approach to developinggrassroots business in China.

Through these centres UNIDO has foundan effective way to realize a number ofSouth-South development goals, which cutacross various parts of the Organization.Such centres are likely to play anincreasingly strategic role in developmentcooperation in the future, reflecting thechange in the structure of the globaleconomy. UNIDO plans to open up to fournew centres in MICs in 2013.

Least but not lastUNIDO has long supported thedevelopment of LDCs, helping many toboost their productive capacity through itswork on trade, sustainable energy and agro-industry in particular. But hard won, ifuneven, economic gains recorded between2000 and 2007 faded fast with the shock ofthe global downturn. The crisis broughtrenewed calls for policies to boostproductive capacities in LDCs and so helpthem become less vulnerable to volatilecommodity and energy prices.

Agro-industry was seen as especiallyimportant in helping these countries moveforward, becoming a main focus of the high-level LDC Conference held in Vienna in2009. UNIDO responded by stepping up itsactivities in this area with the creation of theAccelerated Agribusiness and Agro-industries Development Initiative (3ADI),which aims to develop highly profitableagricultural value chains in LDCs by 2020(see Page 24).

The Organization has also worked closelywith the WTO through its Aid for Tradeinitiative to reduce supply-side constraintson LDCs, especially relating to standardsand metrology, and is engaged in a numberof sustainable energy projects from mini-grids to cleaner energy for cooking.UNIDO’s activities on LDCs, guided by thePlan of Action agreed at the 2009 Viennaconference and the outcome of LDC-IV, willcontinue to cut across the wholeOrganization, with a focus on trade capacitybuilding, private-sector development, policyadvice, industrial infrastructure and South-South cooperation.

Lastly, UNIDO has enhanced its role as afacilitator in mobilizing resources for LDCs.

‰

2000 13% 2010 23%

South-South Exports


‘The Organization has become an important partner in South-South and triangular cooperation’

Through growing partnerships betweentraditional donors, private-sector companiesand South-South and triangular cooperation,it is able to leverage funds to stimulateinvestment and increase technicalcooperation.

Supporting the middleAs stated above, the growing number of MICshas created both challenges andopportunities for aid and developmentorganizations. They are increasingly acting asdevelopment partners to help stimulategrowth in poorer countries, and so fosteringa huge expansion in South-Southcooperation. But high levels of poverty inMICs mean that many continue to needmore traditional kinds of developmentsupport, which will require ever closertriangular collaboration.

Responding to the wide-ranging needs ofMICs in Asia and the Pacific, Africa, LatinAmerica and the Arab region, UNIDO hasdrawn on its various programmes,integrating them into coherent and demand-driven packages on industrial developmentand technical cooperation appropriate foreach region. These packages have been

further refined to meet specific countryneeds according to their varying levels ofeconomic development. For example, thediversity of Asia and the Pacific has led tomultifaceted approaches and policyresponses. For lower middle-incomecountries UNIDO is focusing onimprovements in standards and conformity,institutional capacities, informationnetworks and technology development. Inmore highly developed MICs such as Chinaand India more emphasis is being put onenvironmental management, includingcleaner production and resource efficiency,while in Latin America UNIDO activitiesrelating to the mainly middle-incomecountries of the Andean region and theSouthern Cone centre on strategic advice onindustrial policy, the promotion of SMEs andregional trade integration.

Looking ahead, investing in education andknowledge will be necessary in most MICsfar beyond the initial transition from low- tomiddle-income status. Knowledge transferwill be particularly important given theMICs’ role as a driver of future development,as without it, progress towards inclusivegrowth, employment creation and new

technologies will be limited. A majorchallenge in the coming years will be toprovide policy advice and access toknowledge in sustainable economicdevelopment, and to support and developnetworks for policymaking and capacitybuilding across countries, including themore affluent MICs.

In the fieldFinally, the significant strengthening ofUNIDO’s field operations over the past eightyears has enhanced UNIDO’s efforts todeliver development solutions that aretailor-made to individual countryrequirements. In 2006, changes inorganizational structure brought in a newfield mobility policy, which has led to mostexisting field posts being filled and newones being created. Operational capacity hasalso been strengthened, with a total of 51 professional staff located in field offices.More UNIDO staff on the ground hasenabled the Organization to respond morequickly to country needs and to forge acloser partnership with local counterparts,allowing them to have a greater say in theirown future.


In 2012, the Organisation for Economic Co-operation and Development (OECD)announced a drop in the real value of officialdevelopment assistance (ODA) for the firsttime in 15 years, making clear that aidbudgets have not been immune from thewidespread fiscal belt-tightening of recentyears. The global financial crisis of 2007/08and subsequent economic downturn haveled governments to look more closely atwhere they direct increasingly scarcefinancial resources, creating a morechallenging climate for developmentorganizations.

UNIDO has faced its own challenges overthis period, including the withdrawal ofimportant Member States. But, despite suchsetbacks, since 2005 technical delivery hasrisen to record levels and the Organization’soverall donor base has broadened.

New relationships have beenestablished with the Republic ofKorea, Nigeria, the RussianFederation, South Africaand Slovenia, whilerelations with countriessuch as China, Indiaand Finland have beensignificantlystrengthened. On topof this, the Organizationhas received substantialvoluntary contributionsfrom non-Member States,including Canada and the US. In 2012, USAID made directcontributions to UNIDO for the first time.Such bilateral contributions are importantnot only for the direct funding they bring,but also for leveraging co-financing fortechnical cooperation from other sources.Of UNIDO’s current project portfolio of $2 billion, half comes from co-financing.

The funding received from multilateraldonors is higher than ever. Relations with

the European Union (EU) have grownparticularly close, to the extent that UNIDObecame a major partner for theimplementation of the joint Africa-EUAction Plan 2011-13 and played a key role inthe EU’s prestigious EuropeanDevelopment Days conference. In total, netapprovals of EU-funded technicalcooperation exceeded $110 million between2004 and 2012.

At the same time, UNIDO has deepenedits relationships with its existing donorbase, including its host country Austria, andwith Bahrain, France, Germany, Italy,Norway, Spain, in particular through theMDG Achievement Fund, Sweden,Switzerland and Turkey. Engagement withJapan has increased significantly too. In thepast two years alone, Japan donated the

largest amount from its supplementarybudget funds in UNIDO history.Collaboration through the UN HumanSecurity Trust Fund has also increased.

Over the past eight years, the GlobalEnvironment Facility (GEF) and theMultilateral Fund for the

Implementation of the Montreal

Growth in challenging times

UNIDO’s Global EnvironmentFacility portfolio

UNIDO TechnicalCooperation Delivery

2006-2010$200m

2010-2014$280m

2005 $112.9m


Protocol have become major contributorstoo. UNIDO has received GEF funding since2000 to support its work to help eradicatePersistent Organic Pollutants (POPs).Following the success of this programme,UNIDO became a full member of the GEFpartnership in 2006 with direct access tofunds in a broader range of activities. Sincethen, the Organization’s relationship withthe GEF has expanded considerably toinclude projects on energy efficiency,renewable energy, use of internationalwaters and biodiversity. Over this period,more than 90 countries have benefitted orare benefitting from GEF-funded UNIDOprojects. Between 2006 and 2010, underGEF-4, UNIDO’s GEF portfolio stood at$200 million, while under the current 2010-14 cycle, it stands at $280 million.

In 2012, UNIDO technical cooperationdelivery reached a record $189.2 million, upfrom $166.7 million in the previous year andfrom $112.9 million in 2005. Net approvalshave also reached record levels, amountingto $247.5 million in 2011, a rise of 36% on theprevious year. All of this has been achievedwith almost static staff numbers and zerobudget growth.

This success is thanks in no small part tothe wide-ranging reforms of the pastdecade, which have supported technicalcooperation growth and improved overallproject management.

The introduction of results-basedmanagement in 2006, as part of UN system-wide reforms, has led to better monitoringand reporting of projects. Now almost allprojects are developed using a logicalframework approach, a methodology thatcreates a systematic structure foridentifying, planning and managing

projects. It means that there is a clear logicconnecting policy interventions, expectedresults, verification of results and risks.

Although there is still room to improvethe framework indicators, their systematicapplication is a good step towards betterresults management in the Organization.

The new Enterprise Resource Planningsystem, which aims to improve informationflows and efficiency, is also expected to helpimprove overall project management.

More and more project managers haveincluded economic and financialassessments when developing technicalcooperation projects. Social, institutional,gender and procurement issues have beenbetter addressed and have become morespecific in many project documents.Results-based budgeting (based onoutcomes or outputs) has been appliedmore and is likely to be used moresystematically in 2013 with theimplementation of the new planningsystem.

The results-based approach is carried outwithin a programme results framework thatconnects UNIDO’s long-term vision, itsrevolving four-year medium-termprogramme and its biennial programmeand budgets. This framework has broughttogether the Organization’s strategic visionwith detailed programming at the country,regional and global levels, so improvingpolicy coherence and helping UNIDO tobetter manage its results.

This improved connection betweenUNIDO’s thematic priorities and itsprogrammatic goals to better reflect globaldevelopment priorities has also raised theOrganization’s ability to contribute tointernational development goals, including

the MDGs, which has helped attract newdonors and to maintain existing ones. Thishas been underpinned by UNIDO’scomprehensive approach to its support forindustrial development, comprising theprovision of analytical, statistical and policyadvisory services, the promotion of normsand standards, the convening of globalconferences and facilitating of knowledgesharing and partnerships, and its well-recognized technical cooperation services.

Finally, the recent strengthening ofUNIDO’s advocacy work and theOrganization’s continued focus on buildingpartnerships with other developmentorganizations, financial institutions and theprivate sector are further enhancing effortsto boost resources. In the expectation thatdonors will continue to support UNIDO’sthree main thematic areas, overall financialresources are likely to rise steadily, pointingto an anticipated programme funding in therange of $220 million in 2013.

UNIDO’s AnticipatedProgramme Funding

UNIDO Net Approvals

$220m

2010 $181.99m 2011 $247.5m

2011 $166.7m


Opinion pieces written by the DirectorGeneral were placed in leadinginternational newspapers, including TheNew York Times, The International HeraldTribune and The Guardian, and published inover 30 countries. Interviews were arrangedwith correspondents of Time Magazine, The Times, The New York Times, Time Asia,Newsweek, Die Presse, Kurier, and theFrankfurter Allgemeine Zeitung as well as withinternational wire services: AFP, AssociatedPress, EFE, ITAR-TASS, Reuters, and Xinhua.

One of the broadcast achievements in 2012was a special 30-minute feature aboutDirector General Yumkella that aired onCNN’s African Voices programme. Anotherpopular show – BBC World TV’s Rendezvouswith Zeinab Badawi, also featured theDirector General. A special one-hourprogramme on the topic of poweringdevelopment in the 21st century, as part ofthe BBC World Debate, was filmed on thesidelines of the 2011 Vienna Energy Forum.

During big international events, specialemphasis was placed on committing “big

Soon after taking office, the DirectorGeneral began planning the expansion ofthe Organization’s advocacy andcommunications unit. This involvedrecruiting new professionals in the field anddeveloping a communication strategy.

Starting in 2009, a new strategy was inplace. It set key priorities that included,among others, a proactive and continuousengagement with international media, withsubsequent media monitoring and analysis;a significant expansion of social mediapresence to further disseminate keymessages and build up a network of devotedfollowers; the modernization of the website;the production of multimedia with a focuson telling the human story behind projectsin the field; and the preparation ofinnovative print products.

The engagement with journalists led tothe Director General being interviewed by anumber of key international broadcasters,including with Al Jazeera, BBC World,Bloomberg, CNN, CNBC, Reuters TV, andRussia Today.

Showcasingthe successof UNIDO

UNIDO DirectorGeneral at BBCWorld Debate,Vienna 2010.

Phot

o: U

NID

O


ticket” names, such as Ban Ki-moon, ArnoldSchwarzenegger, Gisele Bündchen, ZeinabBadawi, Chad Holliday, Jeremy Rifkin andJustin Lin, bringing greater media attention.

Worldwide visibility also increasedthrough video reports from keyinternational conferences via APTN, Reuters,and the European Broadcasting Union.UNIDO success stories on smallhydropower in Rwanda and post-conflictrehabilitation in Iraq have been broadcast bynumerous TV stations around the world andfeatured on APTN, CNN, and Reuters AfricaJournal, as well as on UN TV.

Work has begun on updating andmodernizing the UNIDO website. Thisincludes improving its security as well as itscontent – delivery of information will focuson presenting One UNIDO rather thandifferent branches and divisions.Preparations are being made to have basicinformation on the website in French,Spanish and Chinese. Having analyzedmodern-day trends, which suggest that by2016 the number of smartphone users willreach 1 billion, UNIDO communicationprofessionals are focusing on re-launchingthe public website to promote accessibilityfrom mobile technologies for knowledgesharing.

Two new publications have beenintroduced – a quarterly newsletter, UNIDOTimes, which was a consolidation of allexisting in-house branch and divisionalpublications and allowed UNIDO to “speakwith one voice”, and the magazine Making It:Industry for Development.

Twelve issues of Making It magazine havebeen published so far with a print run inEnglish of 10,000 copies. Some issues havealso been published in French, Spanish, andChinese.

A book about UNIDO, published byRoutledge, was officially launched in 2012 inVienna and disseminated to all MemberStates and key counterparts.

Another innovation relates to thepreparation of UNIDO fact sheets on projectachievements. To date, over 80 fact sheetsillustrate what UNIDO has accomplished,with many more to come. Brochures havebeen prepared on cooperation with: theAfrican Union (AU), the EU, the GEF, Japan,Italy, France, Norway, Spain, andSwitzerland.

Advocacy efforts to promote theOrganization and its Green IndustryInitiative culminated in the production of apublic service announcement, which

featured prominently on CNN Internationalin 2010 and again in 2011.

In addition, UNIDO offered advocacy andcommunication support to the UN Secretary-General’s Sustainable Energy for All Initiativeat launches in Abu Dhabi, Accra, Brussels,Nairobi, New Delhi, and New York, to name afew. Videos were produced featuring UNIDOGoodwill ambassadors, Rajendra Pachauriand Marcos Pontes, speaking in support ofthe cause. A public service announcement insupport of the initiative was produced andaired on CNN International for a month withthe participation of Gisele Bündchen andformer US Vice-President Al Gore.

Applying a yardstick to measure advocacy andcommunications results“The single biggest problem withcommunication is the illusion that it hasbeen achieved,” said George Bernard Shaw.This is why UNIDO’s communicationsstrategy foresees using concrete tools tomeasure the impact made by eachintervention.

The number of UNIDO followers on socialmedia networks has increased dramaticallyover the last few years due to dedicatedcampaigns on disseminating results andinteractions. The weekly visitor’s rate onFacebook numbered around 2,000 people;there are currently close to 15,000 peoplefollowing UNIDO’s Twitter account; views ofthe UNIDO YouTube pages have exceeded720,000; and there has been a steady increaseof new visitors to the UNIDO website, with atotal figure of almost 900,000 beingregistered in 2012 alone.

The broadcasting of another public serviceannouncement in support of the UNSecretary-General’s Sustainable Energy for AllInitiative on CNN International meant thatUNIDO’s message was repeatedly viewed byover 169 million viewers in Europe, theMiddle East and Africa. CNN’s African Voicesprogramme was viewed by over 200 millionpeople worldwide.

Working with TV production companiesallowed for the preparation and broadcastingof a range of video news releases thathighlighted UNIDO’s achievements on theground through “human stories” on differentcontinents.

And last but not least, UNIDO’s advocacyand communication staff lecture to over1,000 visitors a year at its Viennaheadquarters, allowing them to gain moreinsight into the operations of theOrganization.

From top:UNIDO’swebsite,Facebookand Twitterpages.


Despite progress in the position of women,today they are still more likely to sufferdiscrimination, to be excluded fromeducation, and to be poor, especially indeveloping countries. In many parts of theworld, women remain marginalized andvulnerable; they are affecteddisproportionately by conflict, violence anddisease; most of the world’s 775 millionilliterate people are women; and whilewomen produce over half of the world’sfood, they own only 1% of the world’sfarmland.

Improving the status of women, whomake up half the world’s population, is amatter of human rights. It is also crucial fordevelopment. When men and women aremore equal, economies tend to grow faster,fewer people remain in poverty and overallwell-being is increased. Ironing out genderinequalities matters not just for women butfor society as a whole.

As the UN agency specializing inindustrial development for povertyreduction, inclusive globalization andenvironmental sustainability, UNIDObelieves that expanding economicopportunities for women should be centralto all development responses and polices.Specifically, UNIDO focuses on gender-sensitive employment creation and theprovision of productive resources, such asfinance, market information, technology,skills and sustainable energy services thatalso reduce the burden of women’s unpaiddomestic and care work.

Over 30 years, UNIDO has used a variety ofmeans to support women’s economicparticipation through its technicalcooperation and policy advisory services. Inrecent years, with the strong support of theDirector General, UNIDO has given evergreater importance to gender issues andwomen’s economic empowerment.

A process began in 2007 to integrategender into all aspects of the Organization’sactivities. It culminated in an expertmeeting in July 2008 on ‘WomenEmpowerment and Entrepreneurship’,which recommended that UNIDO adopt acomprehensive policy that reflected theinternal, operational and institutionalaspects of gender equality according to thepriorities of UN system-wide reforms.

As a result, a new policy on gender andwomen's empowerment was adopted in2009, which laid out a plan to ensure that agender perspective was included in allprogrammes, policies and practices of the

Organization. Under the policy, UNIDOwould also make use of expertise andexperience within the UN system to worktowards internationally agreed developmentgoals on gender equality, while the overallgoal of empowerment of women would begiven renewed support. UNIDO alsoplanned to improve the gender balancewithin the Organization, in particular at thedecision-making level.

A Gender Mainstreaming SteeringCommittee (GMSC) was created to overseethe policy and to devise an action plan toimplement it. The resultingImplementation Strategy and Action Plan2011-13 set out timeframes andresponsibilities aimed at including genderpolicies at all levels of the Organization.UNIDO’s latest Programme and Budgets2012-13 included a gender focus throughout,while the forthcoming 2014-15 Programmeand Budgets requires all branches toincorporate a gender perspective into their planning.

At the same time, UNIDO has taken stepsto raise staff awareness of gender issues. The ITC-ILO Training Centre carried out a gender awareness programme in 2010,which trained 242 people. Following this, in 2012, a new project was set up to help each of the Organization’s thematic areas to incorporate gender into theirprogrammes and to train project managerson how to include gender perspectives intheir projects.

UNIDOand gender. Not justa

women’s issue

Phot

o: U

N W

omen


UNIDO has also appointed a GenderAdviser to UNIDO’s Appraisal Group, whichassesses the quality of newly developedprojects and programmes before they arepresented for funding.

At the inter-agency level, UNIDO has beenactively involved in developing the UNSystem-wide Coordination Framework forWomen’s Economic Empowerment, and theUN System-wide Action Plan on GenderEquality and Women’s Empowerment(SWAP), which, for the first time, will give theUN a set of common measures with which to

gauge its gender-related work. Under thenew framework, UNIDO will report annuallyon its mainstreaming of gender across all itsoperations. In recent months, theOrganization has been working hard to placegender equality and women’s empowermentin productive sectors at the centre of thepost-2015 agenda, and will continue to do soas the discussions intensify.

In January 2013, UNIDO’s Executive Boardmade a number of ground-breakingdecisions in support of this. A staff memberwas appointed to work on gender full-time,

with an additional post made available from2014-15. All project managers will nowinclude gender analysis in their projectdevelopment, while directors must includegender responsive goals in their work plans.These innovations demonstrate theOrganization’s commitment to makinggender issues an integral part of its strategicand programmatic work. Looking ahead,gender will become an increasinglyimportant part of UNIDO’s developmentstrategy in the coming years as its neworganization-wide programme takes root.


From a structural point of view, UNIDO is avery different organization in 2013 to what itwas in 2005. It is now more transparent, moreaccountable and more efficient than at anytime in its history. It has come through thecrisis years of the late 1990s when a number ofdonors, including the US, withdrew from theOrganization. The result was a severe cut infunding, which prompted an overhaul of itsoperations, new budgets and a reduction instaff numbers.

Then, in 2003, UNIDO set out to answerquestions over its relevance by redefining itspriorities and putting in place a number ofstrategic reforms which brought in newprogrammatic themes. Since taking up hispost in 2005, Director General Yumkella hasbuilt on these reforms and introduced manynew initiatives which have made UNIDO morecost-effective and more results focused thanever – one of his first actions in office was toadopt an Evaluation Policy to look at theimpact of UNIDO activities on the ground.This policy was a fundamental step inimproving knowledge sharing and resultsmonitoring within the Organization.

The ongoing reform process has taken placeat a time of rising demand for UNIDO’sservices, with the number of technicalcooperation projects increasing steadily overthe past decade. The growing support forUNIDO from major donors such as the GlobalEnvironment Facility (GEF), the MontrealProtocol and the EU brought with it extra

demands on the Organization, including thecall for results-based management andcompliance with GEF Fiduciary Standards,which require the application of minimumproject risk assessment standards, monitoringand evaluation.

At the same time, Yumkella’s appointmentcoincided with the start of a new UN initiativecalled One UN, which is aimed at achievinggreater coordination of effort across the UNsystem as a whole. Added to this, UNIDO wasworking to improve its field operations anddecentralize its operations. In light of thesedevelopments, it became increasingly clearthat ad hoc solutions to reorganization wouldno longer do; what was needed was a root andbranch change which would alter the cultureof the Organization and make it more effectivein evaluating new projects, assessing resultsand making this information more accessibleand transparent to all interested parties.

In 2008, UNIDO started a consultationperiod which culminated in the establishmentof a new change management programme in2010. It was successfully completed on time inthe first part of 2013, in great part thanks to thetremendous efforts of UNIDO’s staff.

The programme is based on the LeadingChange and Organizational Renewal (LCOR)model developed by Harvard and Stanfordbusiness schools. Its aims are encapsulated inUNIDO’s new mission statement (2010) –Growth with Quality and Delivering as OneUNIDO. Since they were set in motion in 2010,

the structural changes of the past three yearshave brought all strands of the Organizationtogether in a holistic way, with a view tocreating a more dynamic workingenvironment, better knowledge sharing andbetter results-based management.

To make sure all the varying aspects of theprogramme work together, the DirectorGeneral set up a new governance structure.The main decision body is the Committee forChange and Organizational Renewal, whichgives overall direction to the programme, andthe Office for Change and OrganizationalRenewal, which coordinates and manages it.

UNIDO expects the new system to deliverthe following benefits:l Increased delivery capacityl Increased global presencel Better development impact through results-based managementl Better communication with stakeholders onperformance and resultsl Improved risk managementl Better accountability, greaterdecentralization and greater transparencyl Improved knowledge sharing and teamworkl Staff freed to concentrate on value-addingactivitiesl Reduced bureaucracy to speed upeffectiveness

To implement the aims of the programme,UNIDO has put in place an enterpriseresource planning (ERP) system, whichgathers and distributes information on one

Building a leaner, more efficient UNIDO

Phot

o:U

NID

O


integrated platform across the Organization.It has also reorganized staff training andmade changes to working culture.

The system was rolled out in four releasephases, starting in early 2012 with theportfolio and project management module,which puts all the different stages of projectdevelopment, design, approval, assessment,and monitoring into a single system. It isuniversally accessible, it improvesinformation flows within the Organizationand gives better feedback to Member Statesand external stakeholders.

The second release integrated all of UNIDO’shuman resources processes, including payroll,e-recruitment and performance management.In early 2013 all major finance, procurementand logistics processes were added and finally,the fourth release, knowledge management,was implemented in parallel with the threeother phases.

Throughout the implementation processstaff have been involved at every stage andreceived intensive training on how to get thebest use out of the new system, in step withthe requirements of the LCOR model, whichputs people and working culture at the heartof change.

In all, new streamlined electronic processesare freeing staff at headquarters and in thefield from bureaucratic tasks, reducingduplication and encouraging greaterteamwork.

Putting people first On taking office in 2005, the Director Generalpromised to encourage a working culture thatwould allow staff to work with pride anddignity. “My management style is one ofparticipation, empowerment and teamwork.Only motivated and committed staff canachieve excellence,” he said.

He pledged to develop new avenues forcareer development, championingtransparency and integrity. He also promisedto give more weight to experience in the field,to encourage a more predictable rotationscheme and to establish incentive schemes tomotivate staff.

Over the past seven years much has beendone to bring this vision to fruition. Underthe umbrella of the new programme,recruitment and assessment are moretransparent, while staff enjoy moreconcentrated development and trainingprogrammes.

Reform of staff management andrecruitment started early in Yumkella’s firstterm with a revamp of assessment processes

for professional staff, instigating morerigorous testing procedures. In 2006,Yumkella also set up a new field mobilitypolicy, setting out a clearer career path andproviding more attractive conditions. At thestart of 2006 barely half of the Organization’sfield positions were filled, but by the end of2012 there were hardly any vacant.

UNIDO has also worked hard to replenishprofessional staff, bringing new blood to theOrganization. Between 2006 and 2012, 186new staff were appointed, rejuvenating itsprofessional staff pool by 79%. The number of women also rose from 26% of totalprofessional staff to 31%. In 2008, a YoungProfessional Programme was introduced andhas been highly successful in recruiting morewomen, more highly qualified staff andprofessionals from a wider geographicalbackground.

In addition to this, new staff are takenthrough a more rigorous induction period,which gives them greater levels ofinformation about UNIDO and its ethos. The Director General also makes a point ofmeeting new staff personally to explain hisvision for the Organization.

Since 2006, UNIDO has stepped up levels oftraining for all staff, including a managementdevelopment programme for professionalstaff. Training intensified from 2010 to ensurethat staff members were equipped to deal withthe demands of the new ERP system. Onecrucial development in this regard was theestablishment in 2011 of a CompetencyFramework providing training for staff onthree core values, six core competencies andfour managerial competencies. It will be areference point for recruitment, training,development and performance managementand is part of UNIDO’s ongoing efforts tofoster a shared culture across the Organization.

Reinforcing the idea of shared principles,staff must also take part in an ethics e-learning programme to make sure they arefully aware of the UN Code of Conduct.

As the Director General highlighted at thestart of his first term in office, staff motivationis essential for an organization to achieve itsgoals. Marking the 40th anniversary ofUNIDO in 2006, Yumkella gave awards forindividual excellence, teamwork andinnovation. Since then the opportunities forrecognition have expanded. In 2010, as part ofthe new change management process, a newhuman resources management frameworkwas introduced to widen the possibilities forrecognition of staff through merit awards,competitive placement and promotion.

An assessment of UNIDO working culturewas carried out in 2010, followed by theintroduction of a new culture changeframework that laid out the direction theOrganization wanted to take with regard to itsvalues and norms. This formed the basis of anew 360-degree performance managementsystem, where staff members are assessedanonymously on competencies and results,allowing for a fairer, more objective process. It also looks at performance in relation toparticular branch or unit goals. Overall, thenew system enables staff to see how they fitmore broadly into the goals of theorganization. At the same time, staff membersare being kept abreast of developmentsthrough meetings, briefings andcommunications, reinforcing the improvedclimate of knowledge sharing andtransparency within the Organization.

Under the new human resourcesmanagement framework UNIDO hasintroduced greater flexibility into itsrecruitment policy, in particular forconsultants and experts, or non-staffpersonnel. They can now be employed forperiods of one to four years without a breakand will enjoy some of the benefits given tostaff members such as health care andmaternity leave.

Finally, in the past few years underYumkella’s direction UNIDO has opened upcommunication levels between staff andmanagement. There are now greater levels ofdialogue, consultation and discussion thanever before. Leading from the front, theDirector General has encouraged managersto meet regularly with staff and has alsoincreased the opportunities for debate amongsenior managers. There are more randominteractions between staff and managers too,which has created a more open and positiveworking environment. Relations are alsocloser between Staff Union representativesand management, and Staff Unionrepresentatives have regularly been invited toparticipate in the annual Board of Directorsretreats held to map out the direction ofUNIDO’s progress. In a report in 2012 by theJoint Inspection Unit on Staff ManagementRelations both parties rated communicationlevels at four out of five.

It is clear that UNIDO has come a long wayin terms of organization and in how itmanages its staff. It has put people at thecentre of its ambitions, fulfilling the DirectorGeneral’s pledge to empower staff andincrease participation to work as OneUNIDO.


HOW UNIDOMAKES ADIFFERENCE

Phot

o: U

NID

O


UNIDO’s unique contribution to MDG1Almost 70% of the world’s poorest people livein rural areas and depend on the agriculturalsector for their livelihoods. Yet the overallvalue of their economic contribution is wellbelow one-third of GDP. They are particularlyexposed to the vagaries of climate change,which poses a threat to food security in bothrural and urban areas. Rejecting a life ofhardship on the land, a growing number ofthe rural poor are turning to an urban life foropportunities, breeding discontent and socialunrest as the labour market is unable toabsorb the influx of migrants from thehinterland.

It is clear that without a completetransformation of the rural sector there willbe no sustainable solution to entrenchedpoverty in developing countries. Agriculturalproductivity needs to rise, but that will not beenough. Countries need to develop localprocessing so that they can reap the benefitsall the way along the production chain fromcommodities to finished goods.

UNIDO is working to aid thistransformation by providing links totechnology and capital and through a range

of capacity building services to boostexisting resources to stimulate wealthcreation. It helps governments to put inplace the right institutional framework tobring about change, doing this throughcollaborative projects that cut across threeprogrammatic areas of the Organization:Trade Capacity Building, Business,Technology and Investment andAgribusiness Development.

Meeting standards and protectingconsumersIncreasingly strict regulations on food safetymake it more important than ever fordeveloping countries to have the rightpolicies in place, both in terms of protectingconsumers from unsafe imports and toensure the quality of their own exports.UNIDO has assisted numerous countries todevelop national food safety laws, and legaland regulatory frameworks for compliancewith sanitary and phyto-sanitary (SPS)

The 3ADI was set upafter countriesparticipating in the2010 High-levelConference on theDevelopment ofAgribusiness andAgro-Industry inAfrica in Abuja,Nigeria, called on UNIDO to worktogether with IFAD, FAO and theAfDB to promote thedevelopment of agricultural valuechains and enhance food security.Its goal is to have an agriculturesector in Least DevelopedCountries (LDCs) which, by theyear 2020, is made up of highlyproductive and profitableagricultural value chains.

The idea behind the initiative isto: support knowledge sharingand harmonize programmes;enhance developmental impacts;and support investment in a waythat increases the proportion ofthe agricultural produce ofdeveloping countries that istransformed into high-valueproducts. In each country, one ortwo key agricultural products are

selected by the local authorities.Each product forms the basis of adetailed value chain analysis thatmaps out the creation ofeconomic value at all steps ofeconomic activity, from resourceto market.

The Abuja Declarationrecommended four key areas ofassistance:l enabling policies and publicgoodsl value chain skills andtechnologiesl post-production institutionsand servicesl reinforced financing and riskmitigation mechanisms

As of early 2013, the followingcountries had joined the

programme: Afghanistan (wheat),Burkina Faso (meat, sesame),Burundi (soybeans), Comoros(horticulture), Côte d’Ivoire(cotton, cassava), DR Congo(cassava, palm oil, timber), Ghana(cotton), Haiti (tubers, bananas),Liberia (fruit and vegetables, rice),Madagascar (sugar, organic honey,dairy products), Niger (red meat,cowpeas), Nigeria (cassava, rice,leather), Rwanda (livestock-basedsectors: dairy, meat, leather), Sierra Leone (ginger; cashew nuts),South Sudan (cereals), Sudan(leather), United Republic ofTanzania (meat, cashew nuts),Uganda (bananas), and Zambia(cotton, cassava, fruit andvegetables).

Agribusiness:building the chain

cut povertytostandards. It has also provided support forthe strengthening of a local, modern, risk-based management system of food safety.

Providing the right equipment to be ableto test safety is crucial and UNIDO has usedits expertise in this area to help set uplaboratories across a number of countries.In West Africa, the Organization hassupported 16 countries in the developmentof various quality infrastructure servicessuch as upgrading laboratories formicrobiological, chemical and pesticide-residue testing to meet internationalstandards in priority export products suchas cocoa and coffee. On the other side of thecontinent, UNIDO is working with the EastAfrican Community (EAC) to build up andharmonize legal and regulatory frameworks(standards and technical regulations), andrelated infrastructure and services.

In addition, UNIDO aids countries todevelop their consumer protection laws andhelps to train journalists in consumer


rights. It has also helped to standardizeweights and measures used in local markets,which bring particular benefit to low-income groups.

Building valueUNIDO has joined forces with the Food andAgriculture Organization (FAO), theInternational Fund for AgriculturalDevelopment (IFAD) and the AfricanDevelopment Bank (AfDB) to “enhancecapacity, profitability and competitiveness ofagribusiness and agro-industries and ensurethat the development of agribusiness andagro-industries contributes to smallholderlivelihoods, food security and nutrition, jobcreation and poverty alleviation.”

The resulting programme, known as theAfrican Agribusiness and Agro-industriesDevelopment Initiative (3ADI—seewww.3adi.org) was launched in August 2010in a first batch of 12 target countries. Due toexpansion beyond the original 12 countriesinto other regions, the programme is nowknown as the Accelerated Agribusiness andAgro-industries Initiative outside Africa.

Original features of the approach takenwith this programme include the closecooperation with FAO, IFAD and the AfDB,the pragmatic emphasis on results, and an

integrated approach recognizing the needfor cooperation between public, private andtechnical assistance partners. It is largelydriven by national and regional aspirations.

Within this inclusive concept, UNIDOconcentrates on supplier development andenterprise upgrading. Small-scaleproducers are trained and encouraged withvarious incentives to assess and realizemarket opportunities through individualand collective action, and the deployment ofskills and resources. This makes it especiallysuited to agribusiness industries, whichtypically offer higher potential for domesticsuppliers to enter new markets andintegrate local, regional and internationalvalue chains, while also strengthening thelocal employment base.

Building bridgesUNIDO programmes to encourage agro-industry in developing countries targetbusinesses mostly in rural areas, to boosttheir competitiveness and createopportunities to diversify the economy thatcan lead to stable manufacturing jobs. In2010-11, for example, UNIDO built capacityin about 200 enterprises and relatedservices, which helped to maintain around10,000 direct, high-quality manufacturing

jobs in the difficult aftermath of the globaleconomic crisis. UNIDO programmes alsoinvolved the transfer of new managementand technological skills to the relevantcountries and had a positive, if indirect,impact on the industrial and servicesectors that provide products and servicesfor the upgraded enterprises.

Building on the successful cooperationin Africa and the Arab Region, the UNIDO-Hewlett Packard (HP) partnershipprogramme reached global coverage in2010 through HP’s Learning Initiative forEntrepreneurs (HP LIFE). The programmeteaches aspiring and establishedentrepreneurs hands-on business andinformation technology solutions relevantfor business management.

Partnerships are becoming more andmore central to how UNIDO doesbusiness. In the agribusiness sphere, itcollaborates with major business playerswho bring their know-how, resources andcompetitive experience to SMEs involvedin UNIDO’s various projects. Thesepartners work in broader collaborationswith governments, industry associations,research institutions and civil societyorganizations on the basis of guidingprinciples, which include acceptance of ‰

g j

Phot

o: E

van

Schn

eide

r


Horticultureproject inEgypt.

substantial indirect emissions through theconversion of forests into farmland. It is alsoa major cause of land degradation andbiodiversity loss.

At the same time, the rural poor are at thefrontline of climate change, with floods,desertification and other brutal fluctuationsof the ecosystem endangering theirlivelihoods. They are also the main victims of pesticide and agrochemical poisoning thatclaims 220,000 lives every year. And, morethan ever, the question of food security isintimately linked to energy and watersecurity, meaning that the challengesthreatening agriculture and the environmentmust be dealt with together.

Mitigating the impact of climate changewill help combat the plight of the rural poor,

but they also need the means toadapt to changing realities withthe aid of science andtechnology. Many projects run by UNIDO

in the past years have broughtrenewable energy sources such as mini-hydroelectric power plants and biogas

to rural agribusinesses. Steps have alsobeen taken by UNIDO to promote

alternatives to methyl bromide inpost-harvest preservation andcrop storage facilities, and to

replace traditional refrigerants

with non-ozone depleting substances andgases with a low global warming potentialfor cold storage, ice-making and on-boardfreezing in fishing vessels.

In addition, UNIDO is focusing ongreening agro-based value chains andmapping the carbon or water footprint ofagribusiness activities through the GreenIndustry Platform, launched at Rio+20 inJune 2012.

Through connecting all these differentprogrammatic activities to tackle the scourgeof poverty and malnutrition, theOrganization has carved out a distinctiveplace within the UN system. Thiscomprehensive but coherent approach,which takes in capacity building,agribusiness development and technologyinvestment, reflects UNIDO’s firm belief thatone of the most effective ways to eradicatepoverty and hunger is through job andwealth creation in rural areas, in other words,by adding value to primary agriculturalcommodities.

UNIDO does this through a uniquecombination of skills in science, technology,economics and business management todeliver cost-effective and sustainablesolutions to pressing social andenvironmental challenges of humansecurity, youth employment, resourceefficiency, and inclusive development.

United Nations values of fairness,transparency and openness.

UNIDO is also pursuing innovativeapproaches to financing. In mid-2011, itresponded positively to a request bydevelopment finance institutions to extendadvisory services to a technical assistancefacility established to support twoinvestment funds that between themcontribute $800 million of private equity tosmall and medium-sized agribusinessesacross Africa. Both initiatives represent anovel approach that integrates technicalassistance, public investment, and privateequity, supporting much larger flows ofresources to agribusiness in Africa thattrigger a stronger impact on the ground.

In terms of market access for SMEs in theagribusiness sector, the development ofexport consortia, or voluntaryalliances, to promote exports hasled to a rise in sales andemployment and has helped toupgrade member SMEs.

Linking poverty and theenvironmentAgriculture accountsglobally for 70% of the totalconsumption of water; itproduces over 10% of greenhousegas emissions, and causes

‰

Phot

o: U

NID

OPh

oto:

©ist

ockp

hoto

.com


Natural and man-made crises strikedeveloping countries with disturbingregularity, with often catastrophic effects ontheir vulnerable economies and fragilestructures: economic activity stalls,populations are displaced and foodinsecurities increase. Youth, women and therural poor are especially under threat as theyare more likely to be marginalizedeconomically and socially. Youth inparticular are excluded because of a lack ofjob opportunities, which itself poses apotential threat to future security.

UNIDO, as the UN’s specializedorganization for industrial development, isworking to restore devastated livelihoods inpost-crisis countries through programmesto create jobs, support entrepreneurship,build infrastructure and institutionalcapacity, improve access to technology, andincrease productivity. By helpingcommunities most at risk to helpthemselves, they will become more resilientagainst chronic threats such asunemployment and the sudden shocksbrought about by natural disaster, economiccrisis or war.

Reconstruction and renewalIn its 10-year strategic vision laid out in 2005,UNIDO made improving human securitythrough the industrial rehabilitation andreconstruction of post-crisis and post-conflict countries a priority. It hasundertaken a number of projects over recentyears in Africa and the Middle East to helprebuild the lives of many people in affectedcommunities. Given the scale and scope ofthe problems, UNIDO has coordinated andliaised with a range of other UN agencies,NGOs and other development partners tocarry these projects forward.

UNIDO focuses its efforts on buildingproductive capacity, with particular attentiongiven to small enterprises, which have beenidentified as the main engine of growth inpost-crisis economies. They face significant

constraints in the areas of technology,business management, vocational andtechnical skills, business developmentservices (BDS) and entrepreneurialknowledge. To overcome these barriers,UNIDO is implementing programmes toprovide training on how to tap marketpotential, attract small investments andfinancing, and improve the technical,business and management skills ofentrepreneurs. It is also helpingentrepreneurs to find ways to increaseproductivity and improve product qualitystandards to meet market demand. Morespecifically, UNIDO works withentrepreneurs to build up a pool of innovativeprofessional skills in technical sectors and toestablish competitive thinking.

Some examples of the Organization’sactivities in these areas include: projects to

increase labour productivity in poor ruralcommunities in Malawi stricken byHIV/AIDS; initiatives to improveproductivity in rural communities inAfghanistan in farming and non-farmingactivities; and the rebuilding of facilities inIraq to produce safe and wholesome milkproducts. Cottage industries in rural andurban areas of southern Iraq’s Thi-QarGovernorate were also supported, as was thecreation of viable small-scale businesses infood processing, metalworking,woodworking, textiles and agro-mechanics.

In Lebanon, UNIDO carried out a projectto help get war-damaged enterprises fromfive agro-industrial sectors in the mostaffected regions of the country up andrunning again. Meanwhile, in Kenya UNIDOsupported the development of thebamboo value chain, engaging displaced

Humansecurity and youth unemployment –

promoting livelihoods

‰

Phot

o: U

NID

O

High school studentsstudying entrepreneurshipdevelopment inMozambique.


people in the primary processing ofbamboo, thereby generating income formany expelled forest dwellers who wouldhave had no other employmentopportunities.

UNIDO has also given particular attentionto strengthening resilience among highlyvulnerable groups in crisis situations. In Sudan, it helped women’s groups toobtain technology for food processingactivities and trained them in managementand business plan preparation, enablingthem to identify and start viable farming andnon-farming activities, while in ArmeniaUNIDO is addressing worsening incomeinequalities, especially among refugees andwomen, by fostering local entrepreneurship.

Dealing with the scourge ofunemployment in post-conflict regions isanother area where UNIDO is activelyinvolved. In the Mano River Union in WestAfrica (Côte d’Ivoire, Guinea, Liberia andSierra Leone), UNIDO joined with theInternational Labour Organization (ILO),the United Nations DevelopmentProgramme (UNDP) and the YouthEmployment Network to promoteproductive and decent work forunemployed and under-employed youththrough supporting entrepreneurshipdevelopment, developing access to financeprogrammes to facilitate business starts-upand expansion, and improving theemployment-generating capacity ofenterprises.

Building on this, UNIDO launched a $3.5 million Japan-backed project in 2010 inCôte d’Ivoire, a country still suffering fromthe ravages of a recent civil war that left itdivided and impoverished. Under theproject, UNIDO is rebuilding a centre thatwill offer training in construction,manufacturing and service skills, specificallyin areas such as welding, woodwork,plumbing, electrics and nutrition. These newskills will help improve the lives of 3,000young people in the Bouaké region,including ex-combatants and women.

Youth unemployment – gaining skills fora secure future Speaking at an International Conference onYouth in 2003 former UN Secretary-GeneralKofi Annan said: “Rising unemploymenttakes a heavy toll among young people whoare particularly vulnerable to shocks in thelabour market. Lay-offs, restructuring andinsufficient opportunities to enter the worldof work condemn many to a life of economichardship and despair. We have seen, all toooften, the tragedy of young lives misspent incrime, drug abuse, civil conflict and eventerrorism.”

A decade later, the crisis shows no sign ofabating. According to the ILO, youthunemployment hit a record high of 12.8% in2009 at the peak of the global financial crisis.In 2012 it was barely lower at 12.6%, puttingthe number of unemployed 15-24 year olds at74 million. In North Africa and the Arabregion over 25% of under-25s are out of work;in sub-Saharan Africa the ratio is over 20%.

Forecasts suggest that the number outsidethe labour force will keep rising as the worldeconomy struggles to recover from thedownturn and populations continue togrow. Although affecting both the developedand developing world, the situation isespecially acute in post-conflict developingcountries where opportunities for jobcreation are often lacking. To see therepercussions of this in social and economicterms, we need look no further than theuprisings of the Arab Spring and theirsubsequent impact on the performance ofArab economies.

Given the overwhelming crisis of youthunemployment, UNIDO is increasinglyfocusing its attention on inclusive growthstrategies, along with the creation anddevelopment of youth-led enterprises thatcan give young people an active role insociety. This approach aims to boosteconomic growth, social prosperity andparticipation, as well as regional stability.

One of the ways of doing this is through thepromotion of dynamic entrepreneurship and

‰

Phot

o: Th

omas

LeeSpeaking on a visit to West Africa in 2012, Yumkella said:

“With almost three-quarters of the population under the ageof 30, Côte d’Ivoire, Guinea, Liberia and Sierra Leone have oneof the youngest populations in the world. We have aresponsibility to help them find employment. This is a majorchallenge but also an opportunity, and this is where UNIDOcomes in to help reduce poverty through productive activities”.


investment from venture capital orcommercial banks to start up businesses.

Experience has also shown thatentrepreneurial and technical training alonedoes not get results unless combined withadequate financial services. ThereforeUNIDO has developed a comprehensiveapproach that helps young entrepreneurs tocreate and set up or expand their ownbusinesses while contributing toemployment creation, economicdevelopment and growth. Provided withaccess to funding through innovativemechanisms, such as grant and loan schemesor angel funding, as well as the necessary non-financial support, youth are able tosuccessfully set up and run profitablebusinesses.

One example is the Youth Business Fund.Supported by the Government of Austria, it isa revolving fund that gives out loans to youngentrepreneurs in an effort to overcome start-up financing difficulties. Provided with accessto funding, entrepreneurs can prove that theyare credit-worthy and capable of turningloans into profitable enterprises. Bystrengthening the capacities of local businessservice providers UNIDO provides thenecessary non-financial services to theselected entrepreneurs, thus mitigating risksand contributing to the successfulimplementation of the created businesses.

Following the same logic of combiningfinancial and non-financial support to youngaspiring entrepreneurs, UNIDO is alsoinvolved in several projects across the Arabregion. With a high number of universitygraduates battling to get into the workforce,several projects focus on how to promotedomestic investment throughentrepreneurship. One of the latest is a $3.3 million project to promote sustainableemployment opportunities for young peoplein Tunisia. Working together with USAID, theGovernment of Italy and Hewlett-Packard,UNIDO will use its broad experience andexpertise in the region to help SMEs buildbusinesses in four vulnerable parts of thecountry through better access to services anddirect capacity building.

From well-educated urban graduates toilliterate rural workers across the developingworld, UNIDO and its partners are helping allkinds of young people to get the chance theydeserve to participate actively andproductively in society through programmesthat carry forward the Organization’s coremission to reduce poverty throughproductive activities.

the provision of associated training so thatpeople can create employment for themselvesand others. UNIDO has undertakennumerous projects in recent years that buildthe entrepreneurial and vocational skills ofyoung people in developing countries. Actingin partnership with local governments, theprivate sector and internationalorganizations, it has set up or rehabilitatedtraining centres in a number of countries tohelp young people get the necessary skills thatmeet the demands of the private sector andensure that the huge untapped potential ofyouth has a chance to flourish. Using state-of-the-art methodologies and facilities, andhighly qualified training staff, young peopleare given the opportunity to acquire theseskills. Centres to boost life skills among theyoung have been set up in poverty andconflict-affected areas in countries, such asArmenia, Bolivia, Ethiopia, Ghana, Guinea,Kenya, Lebanon, Liberia, Malawi, Sierra Leoneand Sri Lanka.

Another programme aimed at fosteringentrepreneurship is the highly successfulEntrepreneurship Curriculum Programme.Many young people in developing countrieshave little or no access to businessdevelopment education or informationtechnologies, making it hard for them to jointhe job market. This programme targetspeople in secondary and technical schoolsand universities, and develops theircreativity, innovation, planning andleadership skills, showing them how toidentify business opportunities. Since 2006,thousands of schools and hundreds ofthousands of students have participated inthe programme, which has been expanded toover a dozen countries including Angola,Mozambique, Namibia, Rwanda, Timor-Leste and the United Republic of Tanzania.

Providing people with skills that allowthem to work in their home villages andtowns is also an important part of UNIDO’swork to address the employment crisis indeveloping countries. A rapid move to thecities has put increasing pressure on the jobmarket, which cannot absorb such aburgeoning population. If the young aregiven the chance to create their ownenterprises in areas such as agribusiness, thispressure could be alleviated.

But for this to be possible the rightbusiness environment is crucial.Entrepreneurial initiatives won’t get off theground unless they are supported byappropriate public services, a gender-neutralbusiness environment and the right


Trade Capacity BuildingFrom the time of the Silk Road, trade hasbrought wealth and spurred development.No poor country has prospered without it.It has a direct impact on economic growthand on poverty reduction. In the pastdecade, countries such as Brazil, China andIndia have all achieved economic successthanks in great part to trade, with millionslifted out of poverty as a result. But, it is alsoclear that the benefits of trade are notevenly spread.

Despite a fall in tariffs and a rise in overalltrade volume, developing and leastdeveloped countries (LDCs) are challengedby the ongoing rise in non-tariff barriers totrade. Health scares such as mad cow diseaseand avian flu, along with fears over pesticideresidues and a growing concern about theenvironment and social issues are drivinggovernments, industries and consumers todemand ever tighter rules on quality, healthand safety, environmental impact and socialissues. This leaves many developingcountries and LDCs on the sidelinesbecause they don’t have the capacity to becompetitive or the ability to meet theseincreasingly stringent international marketstandards. And it is here, in the area ofsupply capacity and quality-relatedinfrastructure, where UNIDO has beenmaking a difference.

Since the founding of the WTO in 1995,UNIDO has steadily expanded its work onincreasing the productive supply-sidecapacities of developing countries, so givingthem a better chance of entering worldmarkets. Between the completion of theUruguay Round of world trade talks in 1993and the start of the Doha Round in 2001 itwas evident that developing countries stillremained marginalized from global trade, a

view which was expressed loudly at theThird UN Conference on Least DevelopedCountries in Brussels in 2001.

In response, in 2002, UNIDO developed athree-pillar approach to trade capacity-building which focused on boostingcompetitive productive capacities,strengthening internationally recognizedconformity infrastructure and improvinglinks to the market, ensuring rapid andreliable trade transactions. This approach issummed up in the three C’s – compete,conform and connect.

In 2006, under the new Director General,UNIDO decided to create a separate tradecapacity-building (TCB) branch, reflectingthe importance of this work within theorganization. UNIDO’s activities in thisarea, in particular in enhancing supply-sidecapacity and compliance infrastructure,were a major contribution to the WTO-ledinitiative, Aid for Trade, launched at the endof 2005. A taskforce was set up in 2006 whichrecommended active participation fromdevelopment partners in carrying out theAid for Trade agenda to increase trade flowsfrom developing and least developedcountries and improve their infrastructureand capacities. UNIDO was actively involvedin this process. Since then its response totrade-related issues has remained tightlylinked to Aid for Trade, prompting WTODirector General Pascal Lamy to callUNIDO and the WTO “two sides of thesame coin’’.

Involvement with the Aid for Tradetaskforce gave particular weight to the firsttwo pillars of UNIDO’s three-pillarapproach, the development of supply-sidecapacities and compliance infrastructure.UNIDO has many years of experience in

promoting export-led growth throughstrengthening productive capacities andwith over 90% of world trade inmanufactured goods, is in a unique positionto help countries build up their productivecapacity.

One way the Organization is doing this isthrough export consortia, with a particularemphasis on agribusiness. These voluntaryalliances give support to small andmedium-sized enterprises (SMEs) whichhave few resources to ‘go it alone’ in aglobalized world. UNIDO has come up witha special programme to develop SME exportclusters and networks, allowing firms topool knowledge and mitigate risk. A‘strength in numbers’ approach also helps toimprove product quality and ensure moreefficient production methods.

The right measuresHelping developing countries and LDCs tomeet WTO rules on technical barriers totrade (TBT) and on sanitary andphytosanitary (SPS) measures is another areawhere UNIDO employs its capacity-buildingexpertise. It has done this through workingclosely with specialist organizations such asthe International Organization forStandardization (ISO) and the InternationalLaboratory Accreditation Cooperation(ILAC) to bring local testing standards andmeasures up to scratch. In 2012 alone, 50 laboratories were awarded ISO 17025accreditation, making their servicesinternationally recognized, which will helpto raise exports of local goods.

UNIDO increasingly focuses on thedevelopment of quality policies to providethe framework for an effective qualityinfrastructure and has already supported ‰

helping developing countries


to make the grade

Phot

o: ©

istoc

kpho

to.co

m


countries such as Bangladesh, Ghana,Malawi, Myanmar, Sierra Leone and Zambiain this endeavour. Another UNIDO-ledsuccess story in this area is the West AfricaQuality Programme on metrology,standardization, testing and quality (MSTQ).Among its achievements are theestablishment of modern nationalstandardization institutes in each of the 16 countries involved, the training of 500 executives/scientists, 200 privateconsultants and 50 auditors, and theadoption of standards for 500 key products.Thanks to the programme’saccomplishments, a similar programme hasbeen developed and implemented in EastAfrica, covering Burundi, Rwanda, Ugandaand the United Republic Tanzania. UNIDOis also carrying out food safety projects inother regions, including a ‘farm to fork’traceability project in Egypt, a programmeto help Pakistan meet EU standards infisheries and a joint project in partnershipwith the WTO in Sri Lanka to improve theglobal market position of its cinnamon.

Strength in numbersIndeed, partnership is a key aspect of thesuccess of UNIDO’s TCB programme, witha growing number of donors willing toback the Organization’s activities in thisarea. This has meant a considerableexpansion in UNIDO’s TCB portfolio overthe past decade in terms of volume andquality, a trend which looks set to continueas the Organization turns to newchallenges to meet sustainability standardsand standards and certification on energy.As of 2012, UNIDO’s cumulative TCBportfolio stood at $150 million, making itthe largest implementing agency of trade-related technical assistance within the Aidfor Trade initiative.

This success was recognized in 2011 in areport published by one of UNIDO’s maindonors, the Norwegian Agency forDevelopment Cooperation (NORAD), whichstated that UNIDO was “delivering goodvalue for money in the field of standards andquality, an area where the organization has

unique competence internationally”, andranked it as the most effective of themultilateral agencies with which it wascooperating in the field of TCB.

Partnerships have also been crucial toefforts to deliver as One UN, reflected ingreater levels of cooperation with other UNagencies such as the United NationsConference on Trade and Development(UNCTAD), the International Trade Centre(ITC), the Standards and TradeDevelopment Facility (STDF) and theEnhanced Integrated Framework (EIF). The development of the UN ChiefExecutive Board (CEB) Inter-Agency Clusteron Trade and Productive Capacity is a goodillustration of this. Conceived at an inter-agency meeting hosted by UNIDO in 2007,it has since then designed andimplemented inter-agency trade-relatedprogrammes which support the ‘Deliveringas One’ approach.

In all, UNIDO’s trade capacity servicesreach a wide range of people across aplethora of regional and nationalprogrammes. In Africa assistance is given ata continental level through support of theAfrican Accreditation Cooperation(AFRAC), the African Organization forStandardization (ARSO) and the Intra-Africa Metorology System (AFRIMETS).

Added to this, global forum activities, suchas the development of the online platform,www.labnetwork.org giving developingcountries information on standards andconformity assessment, have raisedUNIDO’s profile as a leader in this area.

The publication of a Trade CapacityBuilding Resource Guide has also extendedUNIDO’s reach. Set up under the auspices ofthe UN CEB Cluster on trade andProductive Capacity, it is designed to helppilot not only developing countries but awide range of readers through the complexrange of technical assistance services onoffer from UNIDO and other organizations.It focuses on the Aid for Trade initiative andmaps the trade-related services of 25 UNagencies, five development banks, sevencross-agency programmes and 24 bilateraldonors, giving countries a comprehensiveguide to what kind of assistance is on offer.On top of that, it is proving to be a highlyuseful tool for UN agencies themselves byhelping to highlight potential areas ofcoordination and cooperation and,conversely, identifying where any shortfallsmay lie. This supports in a clear way effortsto coordinate Aid for Trade programmesand once again reflects the strong desire ofUNIDO to reinforce the One UNphilosophy.

‰

Phot

o: U

NID

O


In the Director General’s second term, theconcept of inclusive globalization hasbecome increasingly central to UNIDO’sdevelopment objectives – whetherthrough technical assistance toovercome trade barriers oractivities to improve energyaccess for all. Another areawhere the Organization isengaged in levelling the playingfield is corporate socialresponsibility (CSR).

In recent years, pressure has beenrising to bring environmental,social and ethical considerationsinto corporate strategies. No longerare businesses measured purely onprofit or efficiency. A brand’sreputation can live or die onhow it treats its workers, how itsgoods are produced and the potentialenvironmental impact of its productionprocesses. Multinational corporations nowsink millions into corporate socialresponsibility policies and campaigns.

These trends have put increasingpressure on smaller companies in bothindustrialized and developing countrieswho supply large corporations, or who arestruggling to make their own way on theinternational market. Many SMEs lack theexpertise or finance to adopt sociallyresponsible and sustainable businesspractices. Without help, they risk being leftbehind as big market players look tosuppliers who can meet these criteria.

Working with large private-sectorcompanies and other internationalorganizations, UNIDO is adapting itstechnical assistance programmes to includethe corporate social responsibility needs ofSMEs. They receive support to improvemanagement and productivity and buildsustainable production practices. This alsobenefits large buyers, who can demonstratetheir commitment to society by helping tobring smaller suppliers further into thevalue chain. From the SME point of view,closer ties with the local area make thesupply chain more efficient, help create newbusiness opportunities and raiseinvestment.

UNIDO bases its approach to CSR on theTriple Bottom Line, alternatively referred toas ‘people, planet, profit’. If companies

achieve lower absenteeism, fewer accidentsand better working conditions, along withreduced energy and waste, thencompetitiveness and social andenvironmental responsibility can go handin hand. UNIDO puts this into practicethrough its Responsible EntrepreneursAchievement Programme (REAP), whichemphasizes the business case for socialresponsibility: doing well by doing good.

The programme identifies specificpriorities appropriate for each SME, andalso encourages self-assessment. At themicro level much of the activity so far hasbeen through pilot projects, initially in fourcountries in South East Asia and thenexpanding to central, southern and easternEurope. These projects showed that thebusiness case for CSR for smallercompanies is no different from that forlarge corporations: higher productivity,morale and competitiveness.

Other projects have focused more directlyon the supply chain with a specific buyer. InTurkey, UNIDO is working with key marketplayers in the textiles industry such asMarks and Spencer, H&M and Li&Fung todevelop a support programme for SMEsuppliers to incorporate sustainabledevelopment, social and environmentalprinciples and gender equality into theirbusiness processes.

In a new departure for REAP, UNIDO haslaunched a sustainable supplierdevelopment programme, which builds on

Corporate social responsibility: the Organization’s successful alliance withthe METRO Group, one of the world largestretailers. The original collaborationbrought METRO and UNIDO together in a

joint capacity-building programmedeveloped and carried out through

the Global Markets Protocol ofthe Global Food Safety Initiative(GFSI), which gradually

qualifies suppliers to reachcertification on food safety. Theprogramme will now include non-food suppliers and broaden itsoverall scope.

UNIDO is currently working withtop Japanese retailer AEON toemploy this approach with itssuppliers in Malaysia, ensuring thatthe specific needs and limitations

of less developed suppliers are takeninto account. This enables them to facesupply chain pressures, promoteresponsible business behaviour, increaseboth productivity and quality, and improvetheir bargaining power. This will also leadto an upgraded version of REAP inpartnership with the Global SocialCompliance Programme (GSCP), aplatform set up by leading globalmanufacturers and retailers to promotebest practice and share knowledge on socialand environmental compliance systems.

In another partnership project, UNIDOsupported the development of sustainabletourism by linking the Resource Efficientand Clean Production (RECP) programmewith the concept of CSR, both of whichcreate a win-win outcome throughimproving efficiency while respectingenvironmental and social needs. Theprogramme helped to train consultants andcarry out assessments in the hotel sectorand is being implemented in countries asdiverse as Mozambique, Romania and SriLanka. RECP has been run jointly byUNIDO and UNEP since early 2009 and, asof 2012, is operating in 50 countries.

Through UNIDO’s various projects onCSR, hundreds of suppliers have beenupgraded and contracts signed with majorbuyers. The potential for growth givesUNIDO a unique opportunity to buildcapacity in a sustainably inclusive way,strengthening SMEs in developingcountries.

doing wellby doing

good

Phot

o: ©

istoc

kpho

to.co

m


Since 2000, there has been a significantimprovement in access to medicines indeveloping countries, especially for thetreatment of HIV, tuberculosis and malariain sub-Saharan Africa. But there is still along way to go to open up access tomedicines for these and the otherinfectious and non-infectious diseaseswhich continue to blight the lives of manyin African countries.

Meeting this challenge requiresaddressing a complex range of issuesincluding affordability, availability,acceptability and quality. But it isincreasingly understood that developingthe production of high-quality affordableessential medicines in Africa wouldcontribute to improving access andprovide a valuable way of sustaining thetreatment response to the pandemics inthe coming decades. The development of apharmaceutical industry would alsocontribute to economic growth for thosecountries that choose to invest in thesector.

With funding from the Government ofGermany, UNIDO has been working over

the past seven years on a project to helpdeveloping countries build up their ownpharmaceutical sector as a way to ensure areliable, affordable and sustainable supplyof basic generic medicines. This workdirectly targets the MDGs on childmortality, maternal health and oncombating HIV/AIDS and malaria.

Yumkella was instrumental in developingUNIDO’s activities in this area, havingworked with German Governmentrepresentatives to establish the projectbefore becoming Director General. Duringhis tenure, the work has progressed and in2010 he received a clear mandate fromMember States to expand the activities ofUNIDO for enhancing local capacities forthe manufacture of pharmaceuticals andother health products in cooperation withother UN agencies.

In 2011, UNIDO formed a partnershipwith the African Union Commission (AUC)to help accelerate progress under theAfrican Union’s PharmaceuticalManufacturing Plan for Africa (PMPA),which had been endorsed by the Heads ofState and Government at their summit in

Pharmaceuticals in Africa:necessary


Accra in 2007. UNIDO’s initial role was todevelop a Business Plan to implement thePMPA, which was approved in May 2012 bya special session of the Conference ofAfrican Ministers of Health, and endorsedby the African Union Summit held in AddisAbaba in July 2012.

The Business Plan lays out a flexibleapproach where a consortium of partnerscan work together to assist Africancountries to define their ambitions for thepharmaceutical sector and provide thetechnical assistance required to achievethem. The key idea behind the plan is todevelop high-quality, affordable productioncapacity in Africa, providing a reliable,secure source of effective medicines, whichcan be properly overseen by regulatoryauthorities. This in turn should help toaddress the scourge of sub-standard andcounterfeit products currently entering themarket, thereby contributing to improvedpublic health outcomes. The developmentof a local pharmaceutical industry shouldalso bring much-needed high-value jobs,the growth of associated input industries,and ultimately export opportunities to

medicineother regions (some African countries suchas Tunisia already export to developedmarkets).

The development of the Business Plan wasthe first step in addressing the substantialchallenges involved in creating a localpharmaceutical industry. Now UNIDO isworking with the AUC to build theconsortium of partners that can cover anarray of different issues (includingindustrial policy, manufacturing andregulatory capacity building and themobilization of investment capital) todeliver on the plan. African andinternational organizations will be part ofthe consortium and discussions areongoing with partners such as the WorldHealth Organization (WHO), the AfricanDevelopment Bank (AfDB), the NewPartnership for Africa’s Development(NEPAD), and the Joint United NationsProgramme on HIV/AIDS (UNAIDS)amongst others. Bringing these partnerstogether will be essential for the success ofthe plan and realizing the ambitions ofAfrica’s leaders for developing thepharmaceutical sector.

Phot

o: ©

istoc

kpho

to.co

m


Phot

o: ©

istoc

kpho

to.co

m/K

iese

lUnd

Stei

n


As governments and the internationalcommunity strive to find solutions to themajor challenges of our age, the decisionswe make on one key issue will be crucial:energy – how we get it and how we use it –will define the shape of the coming centuryin geopolitical, economic andenvironmental terms.

In a world of depleting resources, soaringraw material prices, rapid population growth,poverty and climate change, the energypolicies we choose now will affect our stability,security and prosperity. In the face of thesethreats, it is clearer than ever that backing awholesale shift to green, efficient energysystems is the only way to ensure a sustainablefuture. Making this happen will requirenothing short of a clean energy revolution.

In many parts of the developed world thisrevolution is already under way but theimmense financial and technical resourcesneeded to switch to clean energy solutionsremain a major challenge for manydeveloping and emerging countries.

UNIDO, through its activities on energyaccess for productive uses, efficiency and

reducing emissions, has long supported theneed for such a switch and remainscommitted to working with developingcountries to help them build the energysystems needed to sustain growth andimprove well-being.

The Organization’s involvement in energyissues has deepened considerably underDirector General Yumkella. In recognition ofenergy’s central role in sustainabledevelopment and low-carbon growth, theDirector General set up UNIDO’s Energyand Climate Change Branch in 2006 toprovide integrated programmes forsustainable industrial development, whilereducing the impact of industrial energy useon the planet.

To achieve this goal, UNIDO is focusing onthree areas: promoting renewable energy forproductive uses to improve access for therural poor; increasing productivity andcompetitiveness through greater energyefficiency; and promoting low-carbon, low-emission technologies.

On renewable energy, UNIDO’s activitiesinclude solutions for off-grid energy and for

mini grids, applications to turn waste intoenergy and supporting the establishment ofrenewable energy enterprises and businessmodels. Improving industrial energyefficiency means helping companies andgovernments to comply with internationalenergy management systems and standards,maximizing system efficiency and gradingtechnologies. In the area of low-carbontechnologies, UNIDO is carrying outinnovative projects designed to improvecarbon capture and storage technology inselected industrial sectors and looking athydrogen technology applications forindustry and transport. In all, the spread oftechnical cooperation projects in these areascovers more than 50 countries.

The scope and scale of energy projects hasgrown considerably in line with increasedGlobal Environment Facility (GEF) funding.In the three years to 2006, GEF fundingtotaled $8 million for two projects, whileunder subsequent funding arrangements,running up to the end of 2012, the GEF hasapproved $122 million for 46 projects with aglobal reach. ‰

poweringprogress

ENERGY:


“A world of seven billion musttake into account industrialenergy efficiency if it wants toaddress such challenges asgreen growth, employmentgeneration, security, climatechange, food production andpoverty reduction. Industrialenergy efficiency is essentialfor strengthening economies,protecting ecosystems andachieving social benefits,” said Yumkella.

UNIDO’s involvement in energymatters has also broadened well beyondspecific programmes into a strategicleadership role spearheaded by Yumkella.Specifically, UNIDO has had a central role inthe development of the UN-wideSustainable Energy for All initiative and theestablishment of its three goals – universalaccess to modern energy services; doublingthe global rate of improvement in energyefficiency; and doubling the share ofrenewable energy in the global energy mixby 2030. The Organization has also launchedits own Green Industry Initiative andPlatform. In addition, the Energy andClimate Change Branch acts as the focalpoint within UNIDO for UN-Energy and theUnited Nations Framework Convention onClimate Change (UNFCCC).

Making energy more efficientIndustry is responsible for more than a thirdof global primary energy consumption andenergy-related carbon dioxide emissions.Demand for industrial energy, especially indeveloping and emerging countries, isexpected to continue to rise rapidly in thecoming decades, creating a tension betweeneconomic development goals andconstrained supply. Making industry’s use ofenergy more efficient is the best way to keepdown costs and separate economic growthfrom environmental degradation.

UNIDO’s energy efficiency programmebuilds on its vast experience of industrialdevelopment and technology transfer, andrepresents one of the key pillars of the greenindustry paradigm promoted by theOrganization. Its approach iscomprehensive, yet focused. It offers policy

support on programmes and frameworks toraise efficiency and to meet internationalstandards with a view to transforming themarket. It helps develop institutions andmonitoring systems, creates tailor-madetraining programmes and providestechnical assistance to industrial enterprisesfor demonstration and transfer of state-of-the-art energy systems and energymanagement technologies. In total,UNIDO’s ongoing energy efficiency projectsare worth around $90 million and havedemonstrated, in a wide range of countries,that energy efficiency is not only essential totackle climate change but indispensable forindustrial competitiveness and prosperity.

One way to ensure that industry achievesand maintains efficiency gains is throughenergy management standards. Applyingsuch standards establishes closer linksbetween business practices for themanagement of energy and core industryvalues of cost reduction, increasedproductivity, environmental complianceand global competitiveness. This is whyUNIDO called on the InternationalStandards Organization to set up an energymanagement standard that would enableenterprises to take a systematic approach toenergy saving and so reduce their energyuse. The result was the establishment in2011 of ISO 50001, which enablesorganizations to take a structured,systematic approach to improving theirenergy performance. UNIDO has sincefocused its energy efficiency work ontechnical assistance projects andprogrammes which provide support for theadoption of this standard in industry and onthe related capacity building for industrial

users and national certification agencies. UNIDO’s achievements in promoting and

improving industrial energy efficiencywould not be possible without support fromthe Organization’s broad range of partners.UNIDO is working closely with the GlobalGreen Growth Institute (GGGI) and theGlobal Green Growth Forum (3GF), theInternational Partnership for EnergyEfficiency Cooperation (IPEEC), and theInternational Energy Agency (IEA), as well asprivate-sector partners, on building apublic-private partnership (PPP) to developand promote best-available and best-practice energy efficiency indicators formotor-driven systems across industrysectors and processes. The partnership willsupport industrial energy efficiencypolicymaking and an integrated approach tothe implementation of energy managementstandards.

UNIDO is preparing a ‘Practical Guide for Implementing an Energy ManagementSystem’ to further support theimplementation of ISO 50001. Specifically,the guide will help organizations andindustry of all sizes, and SMEs in particular,to improve their energy management andperformance in a logical, controlled andsystematic way, thereby saving energy andreducing costs.

Renewable energy Renewable energy options have becomeincreasingly viable in recent years and nowoffer a real opportunity for developingcountries to improve supply, create jobs andreduce poverty. UNIDO is collaboratingwith both private- and public-sectorpartners to deliver renewables projects that

‰


can make a real difference to people’s lives. These projects currently span 30 countries

and employ technologies such as wind,solar, small hydro and biomass. Oneexample is a GEF-funded project to provideelectricity to rural communities in Zambiathrough mini grids based on solar, biomassand hydro power. The installation of a 1MWsmall-hydro power plant and a 60kW solarphotovoltaic plant was completed in 2012 incollaboration with the International Centrefor Small-Hydro Power, the Government ofZambia, the Rural Electrification Authorityand ZESCO (the Zambia Electricity SupplyCorporation Ltd). Another good example ofGEF-funded renewable energy projects isthe grid-connected wind energy project(900kW) implemented in the Gambia.

UNIDO focuses on renewable energy forproductive uses by promoting low-carbonindustrial applications in SMEs throughrenewable energy and by strengthening theability of local small firms to produceenergy from renewable sources and todevelop new businesses, which encourageinvestment in renewable energy.

To help develop and enhance itsrenewables projects in developingcountries, UNIDO set up a RenewableEnergy Trust Fund in 2010, which aims toencourage private-sector investment in thesector. In 2012, five projects amounting to$18 million were approved by GEF,increasing the total ongoing projectportfolio for renewable energy to more than$60 million.

Low-carbon technologiesUNIDO has a long involvement in thepromotion of low-carbon technologies.

One clear example of this is the InternationalCentre for Hydrogen Energy Technology(ICHET) in Turkey, which was set up a decadeago to promote hydrogen technologyapplications. The Centre strengthened thedissemination of hydrogen technology withthe inauguration of a hydrogen facility usingrenewable energies on the island of Bozcaada,Turkey and also supported the first hydrogenproduction and refuelling facility in Turkeyin 2012.

Another technology that will be critical inglobal efforts to combat climate change iscarbon capture and storage. Recent studiessuggest that it could contribute 19% of thetotal global mitigation needed to halvegreenhouse gas emissions by 2050. Untilrecently, much of the attention focused oncarbon capture was in the power sectorrather than on industry. UNIDO has steppedup to fill the gap by developing a technologyroad map for its application in industry in ajoint venture with the IEA and the EnergyResearch Centre of the Netherlands.

A bright futureUNIDO’s energy and climate changeactivities are likely to grow and develop inthe coming years. A GEF portfolio of $950 million, including potentialcofinancing, is already in place and theOrganization expects a further rise infunding in 2014 when the new GEF fundingcycle begins. At the same time, UNIDO willcontinue to diversify its funding sources byseeking support from multilateral andbilateral donors and partners, including theEuropean Union, Japan, and the Republic ofSouth Korea.

Building on partnerships, forums and

regional networks will also be a key featureof UNIDO’s future activities in this area.There are plans to seek further cooperationwith the BRICS countries to enhance South-South cooperation, which is already takingplace thanks to the establishment of solarand small-hydro centres in India and inChina that promote the transfer oftechnology.

At the same time, UNIDO has seen greatsuccess with its regional centres. Forexample, the Regional Centre for RenewableEnergy and Energy Efficiency of theEconomic Community of West AfricanStates, set up in 2009 and supported byUNIDO, and the Governments of Austria,Cape Verde and Spain, has attracted furtherfunding from both international and localpartners in the past two years, leading to atripling of its budget. It aims to overcomesome of the hurdles that currently preventthe adoption of renewable energy andenergy efficiency solutions in West Africathrough policy and capacity development,new financing mechanisms andimplementing demonstration projects. As aresult of the success of the project, two newcentres on renewable energy and energyefficiency are being established in the EastAfrican and South African regions.

UNIDO will continue to work to get itsmessage out on green energy solutions,through broader and more extensivepartnerships, through global forums such asthe Vienna Energy Forum, which haveplayed an important role in the recent timesin raising the profile of energy issues, andthrough the strengthening of UNIDO’s ownfield offices and its collaboration with otherUN agencies.

Phot

o: U

NID

O

Enthusiastic workersat the inauguration ofa mini-hydropowerstation in Rwanda.


Environmental

on a global action

Growing disquiet over the impact of climate change haspushed environmental protection to the forefront of manypolicymakers’ minds in recent times. But at UNIDO theissue is not so new. The Organization has long been engagedin activities that help to limit the impact of industrialprocesses and so protect the environment. Two of the mostimportant are its work to implement the Montreal Protocolon the protection of the ozone layer and its programmes toeradicate persistent organic pollutants, or POPs.

scale

Phot

o: M

orgu

efile


Montreal Protocol – plugging the ozone holeUNIDO is justifiably proud of its long andproductive involvement with the MontrealProtocol, the international treaty designedto safeguard the ozone layer. The accord hasso far overseen the removal of over 98% ofthe world’s ozone-depleting chemicals. As amajor implementing agency of theMultilateral Fund set up to help developingcountries meet their Protocol targets,UNIDO has helped to eradicate over one-third of these dangerous chemicals from thedeveloping world.

The Montreal Protocol, which marked its25th anniversary in 2012, is widely regardedas the most successful environmentalprotection treaty in history and is the onlyone that has been universally ratified. Itswork to eliminate ozone-damagingsubstances will prevent millions of cases ofskin cancer, cataracts and other healthproblems, while millions will be saved inglobal health care costs. But that is only partof the story. As some gases which harm theozone layer are also greenhouse gases, theProtocol has had a significant impact onmitigating climate change, delaying globalwarming by up to 12 years, according tosome scientists.

Under the treaty, over 100 substanceshave been done away with, chief amongthem CFCs, or chlorofluorocarbons, onceused in a swathe of everyday objects fromfridges to aerosol cans. They have beenbanned in developed countries since themid-1990s and were finally phased outcompletely in 2010. Work is now currentlyfocused on hydrochlorofluorocarbons(HCFCs), which were frozen on 1 January2013 at 2009/10 consumption levels.Following an amendment to the Protocolin 2007, they will be phased out by 2020 indeveloped countries and 2030 indeveloping countries, a decade earlierthan originally planned. Methyl bromide,a gas used to control pests, is scheduled tobe eradicated worldwide by 2015.

UNIDO’s involvement has continuallyevolved with a growth in the number ofprojects undertaken and in fundingreceived. Starting in 1992 with a 6% share ofthe Multilateral Fund portfolio it now holdsmore than 43%. Over the past seven years,the Organization’s Montreal ProtocolBranch has expanded to serve a total of 105 countries. Approved funding grew from$21m in 2006 to almost $77m in 2012. Thebig jump in 2011 came as a result of newprojects in China and other countries worth$60m. This growth is greater than any otherimplementing agency of the MontrealProtocol. Since 2006, 414 projects wereentrusted to UNIDO, making it the topimplementing agency of the Protocol interms of volume. It has also ranked firstamong implementing agencies inperformance, in nine out of 11 evaluationsbetween 2001 and 2011.

UNIDO has achieved this in the mainthrough investment projects which offergovernments and industries greentechnology solutions. The Organization’sphilosophy is simple: to provide propertraining and alternative technologieswhich not only help to protect the ozonelayer but which also raise efficiency andmaintain or improve productivity levels.The diversity of UNIDO’s projects reflectsthe fact that ozone-depleting substancesare everywhere, in our offices, in industry,farms and households.

Once the governments of developingcountries identify companies that requireassistance in eliminating ozone-depletingsubstances from their production cycle, theycontact UNIDO. Together they find thesolutions, and introduce advancedtechniques and technological processes inline with international standards.

In total, all of UNIDO’s projects between2006 and 2012 have phased out 70,000ozone-depleting potential tons.

The Organization has taken care to ensurethat its projects focus on long-lastingsustainable solutions. This holisticapproach means that both MontrealProtocol targets and measures to tacklegreenhouse gas emissions under the KyotoProtocol are taken into account.

For example, in 2011, UNIDO chose threecountries for projects to minimize chemicaluse and greenhouse gas emissions to bepresented for GEF funding. The threecountries are the Gambia, Morocco and Viet Nam. The projects will examinealternative solutions to refrigeration,specifically in the fish-processing sector, asit is a significant source of GHG emissionsand uses ozone-depleting substances. Eachproject will be looked at to see how it can bereplicated and scaled up.

In a similar project, UNIDO has helpedcompanies such as Zhejiang Huari IndustryInvestment Co. in China’s Hangzhen regionto switch from traditional refrigerationmethods to hydrocarbon technology – anorganic compound consisting entirely ofhydrogen and carbon, which is a naturalrefrigerant. Innovations have also beenmade to the CFC-containing traditionalplastic foam used for thermal insulation inrefrigerators. Today, the company insteaduses CFC-free cyclopentane, a hydrocarbon.At the same time, UNIDO has assistedcompanies like Jiaxipera Company in Jiaxinin redesigning compressors used forrefrigeration as part of the phase-out of ‰


CFCs. The company now meets allinternational standards and increased itsproduction from 600,000 compressors in1996 to over 4 million units in 2010.

Looking ahead to the next phase of theProtocol, it will be extremely important totake account of the full environmentalimpact when choosing alternatives toHCFCs. UNIDO is closely watchingdevelopments taking place withhydrofluorocarbons (HFCs), which havebeen used worldwide as substitutes forozone-depleting substances. But they havealso been shown to contribute to climatechange as they have a very high globalwarming potential. UNIDO is investigatingnew technologies that will bring a climatebenefit both directly in terms of CO2emissions reductions and indirectlythrough energy savings.

To date, the developing countries thatrequested UNIDO's assistance are now infull compliance with their MontrealProtocol obligations. UNIDO staff havehelped companies in these countries, wherebasic equipment is often very poor, toacquire new technologies and to look atsafety and maintenance issues. In doing so,UNIDO has helped to support theirbusinesses and to protect the environment.

UNIDO supporting apollutant-free world – the fight against POPsUS soldiers doused liberally with a newchemical spray used to halt the rapid spreadof lice-borne typhus in Europe and theSouth Pacific during World War II, may havebeen shocked half a century later to find itnamed as one of the “dirty dozen” chemicalsbanned under the Stockholm Conventionon Persistent Organic Pollutants (POPs).

But, worrying discoveries about the toxiceffects of DDT and 11 other chemicalseventually brought 90 governmentstogether in Stockholm in 2001 to sign atreaty agreeing to eradicate them or severelylimit their use. Since then, nine morechemicals have been added to the list andover 150 countries have now signed up to theStockholm Convention.

Employed heavily in the post-World War IIperiod in pesticides, industrial processesand pharmaceuticals, POPs have had a widerange of unexpected side effects. Theyremain in the environment for years, cantravel large distances borne by wind andwater, and are extremely toxic to humansand wildlife. Accumulating in the fatty tissueof living organisms, they are passed along

the food chain causing serious illnesses andbirth defects.

Under the Stockholm treaty the chemicalsare divided into two categories: 1)intentionally produced POPs such aspolychlorinated biphenyls (PCBs) andpesticides and 2) those produced accidentallyas a by-product of an industrial process. Thetreaty is committed to stopping or reducingthe production of intentional POPs andadopting responsible practices to dispose ofunintentional POPs. It also supports thetransition to safer alternatives, targetsadditional chemicals for action, and works toclean up old stockpiles and equipment.

UNIDO has had a central role in helpingdeveloping and transition countries deal withthese pollutants since before the Conventionopened for signing in 2001. In 2000, theGlobal Environment Facility (GEF), theorganization responsible for the funding ofprojects to implement the StockholmConvention, granted UNIDO the opportunityto access its funds directly for POPs-relatedactivities in recognition of UNIDO’s soundchemical management programmes and itscomparative advantage in this area.

As a result, UNIDO’s POPs portfolio grewfrom strength to strength and it developedinto one of the leading agencies

‰

Phot

o: U

NID

O


implementing the Stockholm Convention.A specialized POPs unit was set up in 2002,which continued to work on a wide range ofactivities in assisting countries to phase outindustrial POPs and to help them makeimprovements to industrial sectors toreduce emissions from unintentionalpollutants.

UNIDO got a further boost in 2006 whenit became an executing agency of the GEF,giving it direct access to its funds in abroader range of areas including climatechange and biodiversity. Since then, thenumber of UNIDO projects in thechemicals and waste management spherehas continued to rise, reflecting theOrganization’s ability to bring industrialdevelopment together with goals onsustainable development.

Countries are obliged under the treaty tocome up with a National ImplementationPlan (NIP) within two years of ratifying.UNIDO has so far assisted 50 developingand transition countries in developing and

“More than any other multilateral organization, UNIDO has been at the forefront ofthe industry and environment nexus for many years now. Our assistance to countriesin tackling poverty through productive activities, or implementing the MontrealProtocol on Substances that Deplete the Ozone Layer, and the StockholmConvention on Persistent Organic Pollutants, is clear evidence of that.”

enacting their NIPs. Following the additionof nine new chemicals in 2009, UNIDO ishelping 44 developing countries to updatetheir plans. As of the end of 2012, 15 updateshave been approved and 18 are pendingfunding agreement with the GEF.

UNIDO activities after theimplementation of NIPs focus mainly onthe environmentally sound managementand disposal of PCBs, and projects related tocontaminated sites, pesticides and bestavailable techniques (BAT) and bestenvironmental practice (BEP).

Highly toxic PCBs, although no longerproduced, remain present in a largeamount of electrical equipment still in use,while tons of PCB waste are held intemporary storage, mainly in developingcountries. Over the years, huge quantitieshave found their way into soil, rivers andseas, making their disposal extremelydifficult. In 11 countries across Asia, Europeand Latin America, UNIDO projects focuson building capacities at local laboratories

to test PCB samples, and providetechnological expertise on how to treat anddispose of them locally.

UNIDO has also received GEF funding fora global programme on using sustainablenon-combustion technologies fordestroying POPs. In the Philippines, it hassuccessfully deployed non-combustiontechnology and has built capacity allowingthe country to clean stockpiles of 1,500 tonsof PCB-containing transformers andcontaminated equipment. This will serve asa catalyst for technology transfer to otherparts of South and East Asia and has helpedenforce a Code of Practice for theManagement of PCBs, which will eventuallyprevent stockpiling of these toxins.

UNIDO, which has been at the forefront ofdeveloping this nascent technology, believesthat it could ultimately be more cost-effective and technically effective thancombustion solutions but more researchand funding is needed to make thispossible.

Mounir Miku is a tomato farmer inAgadir, Morocco. He and othergrowers have traditionally usedmethyl bromide as a pesticide fortheir tomato crops. Recently, theywere informed that methylbromide is known to deplete theozone layer and that the MontrealProtocol demands the phase outand ban of methyl bromide by2015.

At the same time, Mounir wastold that the EU – traditionally oneof the largest export markets forfood products from Morocco –banned the use of methyl bromideas of March 2010. The farmerstherefore urgently needed analternative to methyl bromide that

Moroccan farmers get non-chemical alternatives to methyl bromidewould allow them to continuegrowing and exporting theirtomatoes.

As an implementing agency ofthe Montreal Protocol agreement,UNIDO stepped in to provide thesupport needed to make thenecessary changes and findalternatives.

With UNIDO’s help, Mounir wasable to change to a pesticide thatdoesn’t damage the ozone layer.

“The fact that we managed toswiftly find alternatives was veryimportant for the farmers. Ourexports are now safe,” saidMounir.

To date, more than 20developing countries have

benefited from the Organization’sexpertise in developing andimplementing methyl bromidedemonstration and phase-outprojects.

UNIDO has also trained morethan 150,000 farmers in differentcountries in the use of non-chemical alternatives to methyl-bromide. It has establishedtraining centres to assist farmersto adhere to new ozone friendlytechnologies. Alternativespresented are solar treatments,bio fumigation and steam.

In Morocco, UNIDO helped thegovernment set up a TechnologyTransfer Centre in Agadir, wherefarmers can learn about alternative

technologies and how to usethem. The centre is one of manyset up by UNIDO in different partsof the world in partnership withnational governments. They allpursue one main goal – thesuccessful implementation of theMontreal Protocol.

The results of UNIDO’s workunder the Montreal Protocol areindisputable for people likeMounir Miku, who proudly showsthe “ECO” pesticide he was able tochange to with UNIDO’s help. Theproduct enables Moroccanfarmers to export their productionto Europe without any fear that itwould be rejected for containingmethyl bromide residues.


INTERVIEWWITH THEDIRECTORGENERALThe Director General Kandeh K. Yumkellagives his personal opinion on some of theachievements and challenges of the pasteight years, and talks about UNIDO’sunique contribution to development.


What do you personally feel is your greatestachievement in the last eight years? What are youproudest of?There are four key things. First is the level of growth we haveexperienced in UNIDO’s programmes. In my first year, I set atarget for my staff to increase service delivery by 50%, and wehave exceeded that. My staff have formulated programmes tothe tune of almost $400-$500 million. In order to be able to dothat, we had to work to build partnerships with countries andwith major funding institutions, defining better what we do andhow we do it. For example, we significantly increased ourmobilization of financing from the Global EnvironmentFacility (GEF), so our environmental programmes grew rapidly,both the Montreal Protocol, and programmes under the GEF.

Second, I am particularly proud that I invested in therelationship with the European Union (EU). I opened an officein Brussels within four months of taking over, and today ourportfolio with the EU has grown from $15 million to $100million. Now we are establishing new partnerships with the EUthat could double that sum over the next eight years.

Third is the positioning of UNIDO. Two months after Ibecame Director General, the UN launched its system-widecoherence initiative, and there were proposals at that timequestioning UNIDO’s relevance. We had to face that upfrontwith my staff, to show that you cannot have decent jobs createdwithout investment in the manufacturing or real sector. We demonstrated that you cannot solve climate changeproblems without dealing with emissions from industry – hencethe need for industrial energy efficiency. We demonstrated thatyou cannot have good urban living environments if industrialpollution continues. So, we had to fight for our relevance, andyou can see the results: growth in our programmes, growth inpartnerships, bilateral relationships, with Norway, with Germanyand other donors. In fact, the Norwegians rated UNIDO as thebest agency in terms of technical cooperation delivery in thetrade capacity building area.

Fourth, I took the big risk to invest in improving UNIDO’sadministrative services, investments that had not been made for

20 years. In fact, I was advised by many not to do it. So, I am very happy that I leave UNIDO revamping its administrativestructures and introducing a new enterprise resourceplanning system. And in that process, we did not slow downour activities one bit.

There have been many challenges to overcome since youbecame Director General in 2005, both externallybecause of the economic climate, and internally in termsof restructuring. What has been the most difficultchallenge?The most difficult challenge was marketing UNIDO and itsrelevance, because one had to deal with an old orthodoxy thathad an opinion of UNIDO that went back to the 1970s. So, wehad to rebrand the institution to show that in fact we were

Phot

o: U

NID

O


‰

talking about private sector-led industrialization, that we weretalking about innovation systems that would promote bettercompetitiveness in industry, that we were talking aboutinnovations that would ensure green growth, greendevelopment and green industrialization. Doing thatrebranding for me was very difficult because there were a lot ofnaysayers. There were doubters that this could be done.

I also had to deal with the global financial crisis, butfortunately, by the time it came, we had made progress inrebranding ourselves and building good partnerships. At theheart of the crisis in 2011, over $280 million was mobilized infunding in one year. So, it did not affect our ability tomobilize resources for programmes. However, the crisis hasposed new challenges for my successors because theMember States are going through a hard time with financingtheir obligations to the Organization, just as they are facinghard times to finance operations within their owneconomies, and to other multilateral organizations.

UNIDO has gone through a number of structuralchanges which have made the organization moreefficient and more cost-effective but, despite this,members such as the UK have pulled out. What is yourreaction to this?The explanation for the UK and others is that the financialcrisis imposed challenges on them domestically, and thereforethey had to reorder their priorities and also look foralignments of the objectives of multilateral institutions withtheir own shrinking budgets. I found it interesting that it wasnot the old argument that they had back in the 1990s aboutrelevance. It was in fact whether the mandate was aligned withtheir own aid priorities.

We now live in a world where there are many more viewsabout what development cooperation means. We live in aworld where we have countries, like the BRICS, which aremajor players, and other emerging economies which havedemonstrated a different way of doing business and growingtheir economies. Coming in as Director General, I knew that,

over the years, there had been some sceptical countries, so as adeliberate strategy I expanded UNIDO’s partnerships with theBRICS countries.

During my mandate, the Argentineans reconnected, theMexicans reconnected and, more importantly, I got fundingfrom the BRICS countries directly into the IndustrialDevelopment Fund. We also received funding for BRICSprogrammes, so that in those countries UNIDO’s programmesexpanded.

It was a time during which the world had restructured. If one country had a different view of how developmentcooperation should evolve, I was very happy to see that therewere many more emerging economies that said: ‘We know thatindustrialization is core to our growth, our wealth creation andthe well-being of our people. We back UNIDO.’ And theydemonstrated that generously by paying their contributions,and by supporting programmes. To give examples: Russiaintroduced a voluntary funding pipeline for the first time, andthey have been funding programmes in Eurasia and Africa.The Indians and the Chinese gave me funding immediately forSouth-South cooperation. The Brazilians and the Argentinianscleared arrears that were accumulated over 20 years. For me,this was a demonstration not only to the rest of the MemberStates, but to the world, that the world had changed. We live ina multi-polar world, and there are many views. For me, that iswhat UNIDO is today.

Do we need to be thinking differently about aid? What isthe role of the private sector?UNIDO has to engage more with the private sector. One of the things that I am proud of is that my staff establishedpartnerships with a number of major multinationalcorporations. We did more in my period than we had everdone before. Before my time, we were very sceptical aboutpartnering with major multinationals. Now we have several,and even before I leave now, I am going to sign two more. The partnership with private sector is crucial, and I have tried toinstitutionalize that within the organization. So yes, UNIDO


must be looking at multi-stakeholder constituencies, andmust look at South-South cooperation more seriously goingforward. It must face the reality that aid money is shrinking.And it must diversify sources of funds, which means that theknowledge base and technical skills within the organizationmust increase over time.

The UN as a whole has come under criticism in recentyears for duplication of effort, and has responded withits own wide-ranging reform. Some people would stillsay that there are too many organizations trying to dothe same thing. What do you think is UNIDO’s uniquerole, its niche?UNIDO’s niche is defined by its mandate: sustainableindustrial development.

Before 2005, we went through a major downsizing,reducing our staff by 50% and eliminating programmes thatwere not relevant. I think the question should be asked theopposite way now: what are others doing that they are notsupposed to do? We should ask what other agencies are doingthat overlaps with UNIDO’s mandate? For me that is thefundamental question, and I believe there should be an honestdebate about this.

I know some Member States have their own priorities andfavourite agencies based on how they see the world. The UN isnot only a humanitarian institution; the UN must look at long-term, transformative development for sustainable growth andprosperity. You can’t do that without modernization of thoseeconomies to move into manufacturing or services. In fact,when the financial crisis hit, what was the slogan? ‘Go back tothe real sector.’ What is the real sector? Manufacturing andproduction. If the mature economies are rediscovering theimportance of manufacturing, if China has proven it can take200 million people out of poverty within 30 years throughstructural change into manufacturing, how can you argue thatother nations shouldn’t to go into industry andmanufacturing? So, let them ask other agencies not toencroach on our mandate.

You yourself come from one of the world’s mostimpoverished countries. What does development meanto you? Development to me means my people have decent jobs, thatour economies in poor countries are modernized away fromdepending only on commodities. You can’t do thatdiversification without going into manufacturing because mostof us, the poor countries, are commodity-based. We may havean opportunity to go into services, but our economies are toosmall to make that leap right now, so therefore we believe invalue addition.

Development to us means food security and water security.For food security, we know already you need value addition andsupply chain management, and good storage systems tocapture part of the food that goes into post-harvest losses.Currently over 50% of our production in Sierra Leone, andother African countries, just rots in the field or in the marketingchain, and this is why in UNIDO I pushed for agribusinessdevelopment. And I am very pleased that the EU decided tohost the first conference they have ever done in Agribusiness inAfrica as a direct result of this push.

So, as I leave UNIDO, I see that many of the seeds that weplanted over the past seven years are beginning to open up as anew harvest. The question is whether my successors can putmore fertilizer on those plants so they can grow properly. The question is whether they will harvest it properly to benefitmankind.

During your time as Director General, the Organization’senergy-related activities have increased considerably.Why do you think energy is so important for industrialdevelopment?UNIDO as a small agency supported, and in fact led, theintroduction of energy as a major pillar of development in theglobal development system over five years. Why was that done?As a small, specialized agency we could see clearly that access toaffordable, reliable energy was core to having industrialcompetitiveness. We could see clearly that industrial energy

‰


efficiency was crucial for dealing with greenhouse gasemissions produced by the industrial sector. And because wewere small, we could take the risk to take up an issue and lead itfor five years. These efforts resulted in the Secretary-Generalsaying at Rio+20 that “energy is the golden thread that runsthrough all the pillars of sustainable development; withoutsustainable energy you cannot have sustainable development”.That would not have happened without UNIDO’s leadership. I am very proud that this agency led that drive for the world.

Over 50% of the demand for energy in developing countriesis in the industrial sector, whether in China, India, Brazil or incountries in Africa. Given this, if you don’t have industrialenergy efficiency, you will not be able to deal properly withgreenhouse gas emissions. So, it is core business for UNIDO;what we did in the last five years is to make it a real issue.

The other good news is that this is where the innovationwill be. You need companies to have new systems ofsustainable production and consumption; this is why welaunched the Green Industry Initiative. You cannot havegreen growth without green industrialization. You need newmaterials for buildings. You need new efficiency standardsfor all kinds of manufactured products, whether it is lights,televisions or refrigerators; that is industrialization. For us,the energy link was obvious, but what we did was to rebrand,to give evidence, real evidence from the emergingeconomies on what was really happening on the ground inthose countries, and why without dealing withindustrialization, and hence its use of energy and materials,you cannot have green growth. We are very pleased also thatthe EU Commission has asked UNIDO to serve on theirresource efficiency platform – again, recognition that wewere right all along.

If you had more time, what would your priority forUNIDO be?To inspire my staff even more to believe in what they aredoing, as I don’t see what else I could have changed radically.Because remember, the reforms I did didn’t start with me,they started with my predecessor. What I did was to build onthem and to inspire my staff. In my mandate, we broke anumber of thresholds in funds mobilization, in delivery andso on. It could not have happened without an inspired staff.So, if I were staying I would see how I could motivate them,incentivize them, inspire them even more in what they aredoing for humanity.

I think that is important, and that is one thing I will tell my successors: take care of your people. You can see it in mymanifesto; I said I would take a people-centred managementapproach. I walked the corridors for the first three years; I talked with junior staff and administrative staff; I had twoTown Hall meetings a year. I met with branches, and I promoted over 300 people. I raised morale in thisorganization.

Phot

o: U

NID

O


Phot

o: ©

istoc

kpho

to.co

m.


PARTNERSHIPSFOR INCREASEDEFFECTIVENESS


The Millennium Development Goals (MDGs)have formed, since 2000, the globalbenchmarks for development milestones. Asthe expiry date for the MDGs approaches in2015, the UN, governments and civil societyare already discussing what shape a post-2015development framework will take. Onerecurring theme in this debate is how tobetter involve the private sector in the designand implementation of the new set of goals.

From the fight against HIV/AIDS to theresponse to natural disasters such as the2004 Indian Ocean tsunami, UN leaders havein recent years spoken with increasingenthusiasm about the role the private sectorcan play in supporting development. Onceregarded with some scepticism, the UN nowsees private-sector involvement as crucial toglobal efforts to fight poverty, combatenvironmental degradation and promotesustainable growth – a fact clearlydemonstrated by the numbers of privatebusinesses in evidence at the Rio+20Summit, in stark contrast to the Rio Summit20 years ago.

The scale and nature of the problemsfacing the planet, coupled with the risk of

donor fatigue at a time of economicslowdown, mean that private-sectorinvolvement will be critical.

The private sector too, has become moreopen to the idea of working withmultilateral organizations, in part as a resultof the growing importance of the corporateresponsibility agenda and the realizationthat core business objectives can be teamedup with development goals.

UNIDO regards business as an engine foreconomic development, and believes thatinclusive economic growth is key to povertyreduction efforts. Holding firmly to thisbelief, the Organization made a priority overthe past few years to establish effectivepartnerships with the private sector andmobilize its support for sustainableindustrial development. Since 2006,UNIDO has multiplied its collaborationswith the private sector, concluding severalnew business partnerships in strategic areaswith the objectives of building localproductive capacity, enhancing socialinclusion and promoting environmentalsustainability. UNIDO moved away frommore traditional philanthropic

UNIDOand the

private sector

partnerships towards new models of socialinvestment, and core business and valuechain collaborations. The Organization alsofollowed another salient trend in the field bycreating multi-stakeholder platforms thatgalvanize business action around largersystemic issues.

Taking partnerships to new levelsIn 2006, UNIDO signed a strategicpartnership with Microsoft, one of the fewcompanies to include the MDGs early on intheir corporate social responsibility (CSR)reporting. The collaboration aimed topromote innovative uses of information andcommunications technology (ICT) that fosterentrepreneurship, help create new businessopportunities and improve thecompetitiveness of SMEs in Africa. In 2007,UNIDO and Microsoft won the AfricaInvestor Award 2007 in the category “BestInitiative in Support of SME Development”for the Uganda Business Information Centreproject. The partnership continues to evolveand has resulted in several collaborativeinitiatives including Business InformationCentres and Computer Refurbishment andE-waste Initiatives.

Another longstanding UNIDO businesspartnership is with leading technologyprovider, Hewlett-Packard (HP). Since 2008,UNIDO has worked with HP to extend thereach and impact of HP’s flagshipentrepreneurship education programme, HP Learning Initiative for Entrepreneurs(HP LIFE), across Africa, Latin America andthe Middle East. So far, the partnership hascreated over 20,000 jobs, trained more than50,000 students, set up 122 LIFE centres in 15 countries and certified more than 270 trainers.

With CSR initiatives becoming moreprevalent in recent years and businesspractices being increasingly scrutinized forproof of corporate citizenship, social

FIAT

UNIDO joins theGlobal Compact

Guidelines on UNIDO cooperation with the private sector

BASF

1999 2000 2002 2003 2004

UNIDOorganizes EGM onBusiness

Partnerships

Chemical Leasing

Evolution of UNIDO–Private Sector Collaboration


investment partnerships are expanding. In2010 Chevron, a leading energy company,contributed funding of $1 million to UNIDOto introduce entrepreneurship as a subject insecondary schools in Angola. Through thepartnership, UNIDO and Chevron areworking closely with the Government ofAngola and other partners to develop a futuregeneration of competent professionalscommitted to the country’s economic andsocial development. Supporting theGovernment’s reform endeavours, theEntrepreneurship Curriculum Programmeaims to develop entrepreneurship skillsamong young people, building thefoundation of a sustainable and dynamicprivate sector. To date, 139 educators havebeen trained to teach entrepreneurship, 70education officials qualified to implementthe entrepreneurship curriculum and morethan 10,000 students have receivedentrepreneurship education in secondarypilot schools. The programme should berolled out nationwide in 2013, potentiallyreaching 500,000 Angolan youths.

Another predominant trend that hasshaped business partnerships over the lastdecade is the increase of CSR codes in globalsupply chains. These codes of conduct offerthe potential to promote inclusivesustainable development by transferringknowledge to host countries and byproviding opportunities for domesticsuppliers to comply with these standards.However, this compliance can provechallenging for most suppliers, especially forSMEs, in developing countries. In 2009,UNIDO and METRO Group, one of theworld’s largest retailers, joined forces in astrategic alliance for safe and sustainablefood supplies. Through the first full-scaleapplication of the Global Markets Protocolestablished by the Global Food SafetyInitiative (GFSI), the joint capacity buildingprogramme was developed and successfully

implemented enabling clusters of suppliersto meet METRO and GFSI marketrequirements in terms of food safety andquality. The partnership served as a basis fora global Sustainable Supplier DevelopmentProgramme (SSDP), which UNIDO isfurther developing in partnership withother private-sector companies and theirsuppliers throughout the world. In 2013UNIDO and the leading Japanese retailerAEON, launched an SSDP for SME suppliersin Malaysia combining food safety with CSRobjectives. Financed by the Government ofJapan and following a cost-sharing schemewith the AEON Group, the programme willinitially benefit 25 SMEs in Malaysia. Theproject will be rolled-out to 100 suppliers byearly 2014 with the aim of making Malaysia aregional hub for sustainable supplierdevelopment.

In an effort to address the challenge ofcompliance at a global level, UNIDO and theGlobal Social Compliance Programmejoined hands in late 2012 to developcapacities within clusters of SMEs suppliersto reach compliance with buyers’requirements on social, ethical andenvironmental aspects. The ultimate goal isto tackle the root causes of non-compliance,and ensure suppliers’ ownership andimplementation of solutions.

Investing in human capital and workforcedevelopment is another important aspect ofcore business partnerships. UNIDO andScania, a leading manufacturer of heavytrucks, buses and engines, have beenstrategic partners since 2011. Together withthe Swedish International DevelopmentCooperation Agency (Sida), they establishedthe Swedish Academy for Training, whichwas officially opened in Erbil, Iraq, in April2012. The academy targets unemployedIraqis under the age of 30, offering them achance to develop relevant skills and to findprofessional employment. ‰

HP Partnership Chevron Partnership GreenIndustryPlatformlaunched

Due Diligence Service provider “Sustainalytics” contracted

3ADIlaunched

Strategy Framework for Partnerships

approved by Executive Board

Microsoft Metro Statoil Samsung

Carlsberg

Louise DreyfusCommodities

2006 2008 2009 2010 2011 2012

Scania

2013

Aeon

Phot

o: U

NID

O

organization-wide strategy for enhancingUNIDO’s engagement with business. “TheStrategic framework for UNIDO partnershipswith multinational companies and private-sector foundations” (Strategic Framework) wasdeveloped based on a stock-taking ofUNIDO’s partnerships since 1999, and amapping of best practices within the UNsystem. Among other changes implementedunder the framework, UNIDO set up aprivate-sector focal point to deal with private-sector inquiries and the reinforcement ofemployees’ partnering skills. In cooperationwith the International Business LeadersForum, the Organization delivered its firstever Business Partnerships Workshop inVienna in October 2012. The capacity-buildingworkshop aimed at building the knowledge oftechnical staff to work towards a moreconsistent and coherent approach topartnering with the private sector, and helpedthem explore innovative models ofcollaboration and examine differenttypologies of partnerships across the UNsystem.

Future outlook for business partnerships in UNIDOThis is just the beginning. UNIDO islearning by doing and has become morepragmatic in its approach to potentialprivate-sector partners. Collaborations areincreasingly directed to areas where theimpact of partnerships can be measurable. At the same time, the proliferation of multi-stakeholder platforms provides apromising landscape to scale up industrialdevelopment activities, while aligning global and local efforts. With an increasingportfolio of business partnerships, UNIDOis working towards institutionalizing afunction that implements theorganization’s private-sector outreachstrategy, and acts as a catalyst for suchpartnerships at headquarters and in the field.

Simultaneously, the training facility aimsto bolster Iraq’s wider economicdevelopment by addressing the seriousshortage of skilled labour required bymodern enterprises operating andexpanding in the country today.

Another value chain partnership wheredevelopment and commercial gainscongregate is UNIDO’s 2012 project withSamsung Electronics to design andimplement a programme that aims atensuring effective e-waste management andcreating employment opportunities in theelectronics industry in Cambodia. Theprogramme focuses on two interrelatedcomponents. On the one hand, theprovision of capacity-building measuresimproves the skills of youth in handlingelectronic products, upgrading repairservices and e-waste management. On theother hand, the programme supports thelocal economy by promoting e-wastemanagement practices and providingrelevant market information on e-productsrepair services and e-waste managementbusinesses to SMEs. For Samsung, a majorplayer in the Cambodian electronicsindustry, the development of strong localsupply chains is of strategic importance.Hence, investing in capacity buildingsupports the customer services and salesgrowth of the businesses concerned. At the same time, it further strengthensSamsung’s image as a responsible corporateplayer in the region.

Supporting greater development ofbusiness partnerships at UNIDOThis rapid growth in UNIDO‘s collaborationswith the private sector between 2006 and2010 led to a need for the Organization todevelop a more strategic and structuredapproach to partnering. In2011, the ExecutiveBoard approved an

‰


Phot

o: ©

istoc

kpho

to.co

m


Framework for UNIDO-private sector collaboration,in “UNIDO BusinessPartnerships, 2012”.


UN Secretary-General Ban Ki-Moon told theWorld Economic Forum in 2011 that ourcurrent economic model amounted to a“global suicide pact” and needed urgentreform in the face of climate change. In amore recent speech at the end of 2012 hewent further to say that ”the climate changephenomenon has been caused by theindustrialization of the developed world.”

The Secretary-General’s comments reflecta growing consensus that the extractiveindustrial model pursued over the past 200years, bringing wealth and higher livingstandards, is no longer sustainable. Volatileraw material and food prices, thedeterioration of ecosystems and rapidlychanging weather patterns are threateningthe livelihoods of millions around theglobe. As population levels rise, the demandfor resources such as water and energy willclimb too, putting increasing pressure onour ecosystems and creating potential forconflict in the scramble for depletingresources.

But for many developing and emergingeconomies, industrial growth is still the keyto creating jobs and reducing poverty. As aresult, the pursuit of unrestrained industrialgrowth strategies continues unabated; a factreflected in rapidly increasing globalextraction rates.

On current projections, global industrialproduction has the potential to rise fourfoldby 2050. Industry as a whole remains thebiggest user of energy in our economies,guzzling one-third of total delivered energyworldwide. Manufacturing industries areresponsible for nearly one-third of all CO2emissions, one-fifth of global water use, and

most of the raw materials used. They alsoemit harmful greenhouse gases such asmethane, nitrous oxide and CFCs. And ofthe 4 million tons of waste whichmanufacturing produces annually, less thana quarter is recovered or recycled.

Many of these environmental impactscome from industries using outdated orobsolete technology that is both wasteful and expensive. It is clear that sustainabledevelopment will not be achieved unless the social and ecological footprint left byindustry is significantly reduced. This meanscranking up the level of environmentallysustainable production and making sureresources are used efficiently, which will inturn raise productivity. Adopting thesepolicies would give the developing world achance to avoid some of the worst effects of industrialization by growing theireconomies in a way that takes account of the Earth’s limited resources. It is in thiscontext that UNIDO developed the GreenIndustry Initiative.

UNIDO as an organization has promotedthe use of cleaner, greener productionmethods since the 1990s, when the need toincorporate green policies into industrialdevelopment, effectively decoupling growthfrom environmental degradation, was not aswidely accepted as it is today. On assumingoffice in 2005, the Director General set out toput energy supply and the access toenvironmentally friendly technologies forindustry at the centre of the Organization’sefforts to reduce poverty and promotesustainable growth. The Green IndustryInitiative, launched at the 2009 ManilaInternational Conference on Green

GreenIndustry Initiative and Platform

doingmore with less

‰

Phot

o: ©

istoc

kpho

to.co

m


Industry in Asia, grew out ofthis commitment.

The initiative sets out to helpgovernments of transition anddeveloping countries put in placegreen industrial processes byraising awareness, increasingtechnology transfer, enhancingSouth-South cooperation and bybuilding capacity to develop policieswhich set up the right regulatoryenvironment to foster green industry.

Specifically, the greening of industrymeans cleaner production and moreefficient use of resources like water andenergy, a reduction in waste and emissions,safe management of chemicals, the phasingout of toxic substances, replacing fossilfuels with renewable energy and the designof new green technologies. To achieve this,UNIDO has established a clear set ofstrategies that can be used to helpdeveloping countries get on the roadtowards a low-carbon, safe and resource-efficient economy by using business-drivensolutions. Getting the right results relies oncooperation with governments, businessand other UN agencies.

The initiative has received wide supportfrom Member States and UNIDO’s sisterorganizations, which encouraged UNIDOto extend its leadership in this area bydeveloping an agenda for Green Industrywith specific policy goals. This idea waspushed forward at the 2011 Tokyo GreenIndustry Conference, culminating in callsfor a forum on Green Industry to bring allinterested parties together. The result wasthe launch, in partnership with UNEP atRio+20, of the Green Industry Platform(greenindustryplatform.org).

The aim of this unique forum is toimplement the goals of the Green IndustryInitiative by bringing togethergovernments, business, and civil societyleaders to secure concrete commitments ongreening the manufacturing process. It

hopes to help create new green industriesand improve the performance of existingones by providing guidance on howbusinesses can integrate green goals intotheir policies and practices; it will promotebest practice in a bid to move beyond‘business as usual`, driving forwardtechnological innovation and development.It will also seek to set green industry targets,support research and development andmake finance available.

The Platform, which held its first AdvisoryBoard meeting in April 2013, currently has142 members, among them 25 governments,48 international and civil societyorganizations and 69 businesses. TheDirector General has described this kind ofcollaboration as exactly the kind ofpartnership required to make green

industry the norm and put the world on apath to low carbon manufacturing.

Through its Green Industry Initiative andPlatform, UNIDO is taking concrete actionto include the need for environmentalprotection in any future growth model.Promoting policies to support GreenIndustry will help to create a world in whichindustry dramatically reduces waste levels,makes use of renewable resources formaterials and fuel and takes care to avoidharming workers, communities or theenvironment through its practices. It issupporting new ways to create jobs andgrowth, thereby reducing poverty. Throughpromoting sustainable industry, theinitiative will help the shift to a global greeneconomy and frame future thinking aboutnew sustainable development goals.

‰

142 25

4869

members

Green Industry Platform

governments

international and civil societyorganisations

as of April 2013

businesses


In 2005, the then Secretary-General KofiAnnan ushered in sweeping reforms designedto make the UN more able to respondeffectively to the scale of challenges facing theinternational community. As part of thereform process, a high-level panel was set upto look at system-wide coherence ondevelopment, humanitarian assistance andenvironment. Following the panel’s report in2006 a new initiative – Delivering as One –was launched, with the aim of creating a morecoherent, united UN system.

The idea was to reorganize how the UNoperated at country level to make sure itsexpertise was put to best use, while at thesame time unifying governance, funding andmanagement to increase efficiency and cutwaste. In each country there would be oneleader coordinating all agencies in the field,

one budgetary framework, one programmeand, where possible, one office.

Eight countries – Albania, Cape Verde,Mozambique, Pakistan, Rwanda, the UnitedRepublic of Tanzania, Uruguay and Viet Nam -volunteered to pioneer this reform. Since thisinitial pilot project in 2007, 40 additionalcountries have come on board. Along the way,much progress has been made in addressingnational development plans and the prioritiesof programme countries, but there is stillmore to do. There needs to be more focus onthe comparative advantages of the respectiveagencies, a greater effort to reduce transactioncosts, and a clearer division of functionsbetween Resident Coordinators, who overseeall programmes implemented jointly by theUN organizations in a given country, and theUN country teams representing the

individual agencies on the ground. Lessonslearned from the initial pilots show that aone-size-fits-all approach does not work.

UNIDO’s roleUNIDO has been closely involved in thisprocess from the outset. Having undergoneits own restructuring in the preceding years,UNIDO was well placed to contribute to theprocess of renewal and reform across the UNas a whole. Such changes also give theOrganization an opportunity to revitalize itsown position within the UN system and soenhance its operational effectiveness. Sincehosting a meeting of the original high-levelpanel in 2006 that led to the development ofthe Delivering as One initiative, UNIDO hasbeen actively involved in its implementationat country level. In the run-up to the high- ‰

Phot

o: U

NID

O

UN Secretary-Generaland heads of UNorganizations at ChiefExecutives Boardmeeting hosted byUNIDO in 2010.

Deliveringas oneUN


level Intergovernmental Conference onsystem-wide coherence in Maputo,Mozambique, in May 2008, UNIDO hostedthe first high-level dialogue on thedevelopment aspects of system-widecoherence with a particular focus on country-level coherence.

Specifically, UNIDO has been contributing tothe implementation of the new programmaticand management arrangements developed inthe eight pilot countries and over 20 furtherself-starter countries.

UNIDO’s contribution to One UN has beenbroadly positive for the Organization,resulting in increased recognition ofproductive activities, wealth creation andtrade capacity building in One UNprogrammes. An independent evaluation oflessons learned from Delivering as Oneshowed that UNIDO’s technical cooperationportfolio has expanded and broadened as aresult of increased joint programmingbetween participating UN organizations, suchas FAO, ILO, ITC, UNCTAD, UNDP, UNESCOand WHO. It also pointed to a greaterunderstanding of UNIDO’s comparativeadvantage and competitive capacity to deliveron its mandate at country level and within theUN system. Coordination requirements toachieve this meant considerably heavierworkloads for UNIDO staff, but the benefitswere tangible, including the fact that UNIDOwas able to mobilize significant resourcesfrom the One UN Funds for projects in thepilot countries. Between 2008 and 2011,UNIDO collected almost 5.5% of the $500million available at country level from OneFund mechanisms. In 2012, the Organizationsigned several new agreements on fundingarrangements with a number of Delivering asOne countries, reflecting its growingengagement in this area. The level ofresources mobilized from the One UN Fundsis expected to rise further from 2013.

Looking more broadly, it is clear that theongoing changes to global developmentcooperation have an impact on how UNIDOdoes business. For example, the Delivering asOne initiative could be seen as the UNresponse to the 2005 Paris Declaration, whichbrought countries around the world togetherto agree a new way of delivering aid andincreasing donor effectiveness throughgreater partnership. It is likely that the resultsof the Fourth High-Level Forum on AidEffectiveness, held in Busan, Republic ofKorea, in 2011, will influence the next stage ofdevelopment of this UN initiative. Thismeans there will be more focus on results,

and a reaffirmation of using andstrengthening countries’ own systems. It isclear that the joint programme approach willalso remain central to how technicalcooperation is delivered. From over 50countries now, the UN expects a further 100 tobe added by 2014, which will mean the needfor a more integrated, coordinated andcoherent approach to programme delivery.

UNIDO also makes importantcontributions to the UN’s system-widecoherence efforts through its involvement inthe United Nations System Chief ExecutivesBoard for Coordination (CEB) and its role inUN Energy.

The CEB meets twice a year and bringstogether the heads of 27 UN systemorganizations under the chairmanship ofSecretary-General Ban Ki-moon. UNIDOplays an active role in advancing greatercoherence and coordination through thework of the CEB’s three main mechanisms, itstwo high-level committees (High-levelCommittee on Programmes and High-levelCommittee on Management) and the UnitedNations Development Group (UNDG).UNIDO also has an important role workingwith its CEB partners on Trade andProductive Capacity, to provide joint tradedevelopment assistance at the regional andnational levels, notably in the Delivering asOne UN pilot countries.

In his role as Chairman of UN Energy, theDirector General has placed UNIDO at thecentre of UN-wide efforts to coordinate itswork on energy in the three key areas ofaccess, renewables and efficiency. UN Energywas set up in 2004 in response to the 2002World Summit on Sustainable Developmentin Johannesburg, which made a forceful casefor the link between poverty reduction, energyaccess and climate change mitigation. It aimsto promote system-wide collaboration that iscoherent and consistent, ensuring that theUN speaks with one voice on energy mattersthrough sharing information, andencouraging joint programming.

Efforts to create a more coherent,streamlined UN show the importance ofpartnership in solving the developmentchallenges we face as a global community. By bringing together the collective strengthof the various members of the UN family toraise awareness, to campaign, analyze andadvise, the UN is playing a pivotal role intackling the big issues. UNIDO, in itscollaborations with UN and non-UN bodies,especially in energy, intends to remain at thecentre of these efforts.

‰

Phot

o: ©

istoc

kpho

to.co

m


Energy partnerships for a brighter

future

For most of us it is hard to imagine life withoutelectricity. We don’t think twice about turning alight on, cooking meals on an electric stove orheating our homes with clean, safe energy. Butfor millions in the developing world the benefitsof reliable, clean energy remain out of reach.Over a billion people on the planet continue tolive without electricity, another billion strugglewith an unreliable supply of energy and almostthree billion still rely on traditional biomass forheating and cooking, which is both unsafe andharmful to the environment. ‰


Energy poverty means poor healthcareand education services, with no electricity tokeep schools open or medicines safe. Itmeans a loss of productivity in hours spentcollecting fuel, and condemns millions tolive isolated lives far from the moderncommunications most of us take forgranted. Development is not possiblewithout energy and sustainabledevelopment is not possible withoutsustainable energy. For UN Secretary-General Ban Ki-moon sustainable energy is“the golden thread that connects economicgrowth, increased social equity and anenvironment that allows the world tothrive”.

It is against this background that the UNhas taken leadership of the global energyand climate change agenda. And UNIDO,under Director General Yumkella, has beenat the centre of efforts to take this agendaforward. In recognition of this commitmentto energy and the environment, in 2007 theSecretary-General appointed Yumkella aschair of UN Energy.

This coordination mechanism, which hasbeen strengthened under Yumkella’sleadership, promotes coherence within theUN itself and encourages closer collectiveaction in the public and private sector onthe three keys areas of energy access,renewable energy and energy efficiency. It has evolved into a fully functioningknowledge-sharing platform, teamed upwith the high-level global forum CleanEnergy Ministerial (CEM) Clean EnergySolutions Centre to share policy bestpractice, data and analysis tools acrosscountries. In 2011, it launched the UNEnergy Knowledge Network to act as agateway for information exchange withinthe UN system. This enhanced its role as anopen forum where ideas and policies can bedeveloped and shared, ensuring that the UNspeaks with one voice on energy.

UNIDO’s involvement in the energyagenda deepened further in 2009 whenYumkella was appointed chair of a newhigh-level Advisory Group on Energy andClimate Change (AGECC). The group’s taskwas to provide recommendations on energyissues relating to climate change andsustainable development. Composed ofrepresentatives from the UN system,including the World Bank, and the privatesector, it reflected a strong desire within theUN to strengthen links with business as apartner for achieving development goals.

The group issued its final report – Energyfor a Sustainable Future – in 2010. Ithighlighted energy’s importance inachieving the MDGs and in tackling climatechange, paving the way for discussions atRio+20 by linking sustainable energy topoverty reduction and green growth.

The report’s conclusions andrecommendations formed the basis of a newUN initiative, led by UNIDO, UN Energy andUNDP, designed to meet the problem ofenergy poverty head on. Sustainable EnergyFor All (SE4All), launched in 2011 and co-chaired by Mr Yumkella and the Chairmanof Bank of America, Charles O. Holliday, is anovel collaboration between the UN,governments, private-sector companies andcivil society to change to world’s energysystems by 2030. It is a truly broad-basedpartnership which includes the UNFoundation, the World Bank, theInternational Institute for Applied SystemsAnalysis (IIASA), UNEP and many privatecompanies, such as the Norwegian energycompany, Statoil, and the Swedish powercompany, Vattenfall.

Its three specific goals are to ensureuniversal access to modern energy services;double the global rate of improvement inenergy efficiency; and double the share ofrenewable energy in the global energy mixby 2030.

Following months of intense negotiationsled by Yumkella, a high-level Group wasestablished in the run-up to Rio+20 with aremit to push forward the initiative’s ActionAgenda. This agenda was given greatervisibility following the UN GeneralAssembly decision to make 2012 the Year ofSustainable Energy for All.

Today, the Sustainable Energy for Allinitiative is driving real action on theground to help poor communities. In themonths running up to the Rio+20 Summit,the momentum increased in support ofsustainable energy for all as a global issue.By the end of the summit, $500 million hadbeen pledged, with over 700 commitmentsmade, and a global network of stakeholderson board.

In less than a year, dozens of countrieshave engaged with the sustainable energyagenda. From Ghana to Nepal, Barbados toLebanon, new public-private partnershipsare being established on transport, energyefficiency, solar cooking and finance. Andcivil society groups are expandinggrassroots training and advocacy.

The United States has pledged $2 billionin grants, loans and loan guarantees forpolicy and regulatory development, public-private energy technology partnerships, andloans and guarantees to leverage privateinvestment in clean energy technology. At the same time, the EU has put up $65 million for clean energy projects indeveloping countries in support of SE4All.

Over 65 governments from Africa, Asia,Latin America, and the Small Island Stateshave engaged with the initiative and aredeveloping energy plans and programmes.The majority are from developing countriesthat have initiated or completed energysector assessments and gap analyses, layingthe groundwork for further action inpriority areas, to undertake strategicreforms where needed, and attract new

“Hundreds of millions of beneficiaries in developing countries willgain improved access to energy through grid extension and off-gridsolutions, as well as scaled-up renewable energy sources, increasedinvestment, and improved energy policies.” Kandeh K. Yumkella

‰


investments and financial support.The Government of Brazil, just to give

one example, has committed to invest$4.3 million to achieve universal energyaccess in Brazil by 2014. As a global leaderin sustainable energy, Brazil will invest anadditional $235 billion over ten years inrenewable energy and produce totalenergy savings of 9% by 2030.

Businesses and investors havecommitted over $50 billion to theinitiative, while tens of billions have comefrom multilateral banks, internationalorganizations and civil society.

By combining the expertise of a broadrange of participants, SE4All can bedescribed as a mega public-privatepartnership that acts as a catalyst forchange by helping to create the rightenabling environment for private-sectorengagement. It does not focus onimplementing technology projects orbuilding infrastructure but makes itpossible for governments and companiesto develop projects by helping to createthe right market conditions, by engagingdirectly with countries to improveplanning, and helping to find the financeto get projects off the ground.

The initiative is a perfect example ofhow the UN system can bring the publicand private spheres together in apioneering way that encourages private-sector innovation, in this case in energysolutions, while addressing thechallenges of climate change andensuring sustainable development. By capitalizing on the complementarystrengths of the public and private sector,the UN system can give impetus toencourage the kind of innovation thatwill help developed countries to reducetheir energy footprint, while enablingdeveloping countries to get the cleanenergy they need to prosper.

UNIDO’s networksconnecting people

global knowledge management, theinitiative aims to overcome barriers tobetter knowledge sharing in the privatesector. It will also help to improve the waythe UN delivers its policy advice, builds itsinstitutions and develops capacity. Workingat country level, it will endeavour to makeaccess to private-sector developmentknowledge easier for developing countries.Sometimes rapidly changing circumstanceson the ground can make knowledge sharingchallenging, as can staff turnover and failureto learn from past mistakes. Putting in placea well thought out knowledge managementand sharing strategy can help to addresssome of these problems.

The first Networks for Prosperity report,published in 2011 with the Centre for Global Governance Studies in Leuven,Belgium, laid the basis for policyrecommendations that will help developingcountries to acquire private-sectorknowhow. A key outcome of the report wasthe establishment of a Connectedness Indexthat measures countries’ knowledgenetworks and links their level ofconnectedness with economic developmentindicators. The results showed that when itcomes to development, networks matter,with higher degrees of connectednessmeaning higher government effectivenessand greater economic development.

A second report was issued in 2012,updating results and expanding the numberof countries in the index to from 75 to 132. It focused on connecting developmentknowledge beyond 2015, and urges the ‰

In an increasingly globalized andinterconnected world, developing countriesneed to devise new ways to grow anddevelop their economies. The technologicalrevolution of the last two decades hasaltered hugely how we communicate and ischanging how business operates. As wemove further into the 21st century top-downsolutions imposed by hierarchicalinstitutions are giving way to more flexiblemulti-stakeholder networks, makingknowledge flows more democratic. But inmany developing countries acquiring theknowledge required to make the right policydecisions and create the right developmentenvironment can be difficult both forcompanies and governments. There may becultural barriers to overcome, institutionalweaknesses, poor research skills andfacilities, and a lack of trust, which is ofcrucial importance in the sharing andexchange of knowledge.

Putting the right knowledge into thehands of those who need it and can use it,can make an enormous difference todevelopment outcomes. In recognition ofthis, over the past few years manymultilateral development institutions havebeen involved in setting up numerousknowledge networks to improve how theydeliver knowledge and facilitate how it isshared.

One such example is the Networks forProsperity initiative set up by UNIDO in2010 with support from the Government ofSpain’s MDG Achievement Fund. Throughhelping to establish a framework to support

Phot

o: C

reat

ive Im

ages

, Slo

vaki

a


Resource Efficient and Cleaner Production(RECPnet) began operations with an initialmembership of 41 NCPCs and othernational, subnational and regional RECPservice providers.

RECP is now working to expand andstrengthen UNIDO’s network of 47 NCPCs,which advise governments and businesseson finance and technology, set updemonstration projects and training, andact as advocates for cleaner production. How well they do this depends largely oneffective networking and knowledgemanagement among the centres.

Further enhancing the Organization’sclean production networks, a new UNEP-ledinitiative on climate technology waslaunched in February 2013 with UNIDO and11 other international research anddevelopment bodies. The ClimateTechnology Centre and Network (CTCN)aims to speed up the transfer of climate-related technology and expertise todeveloping countries in order to reducegreenhouse gas emissions, and improveresilience to the impacts of climate change.It will also help reduce the costs and risks of technology transfer and aid developingcountries in making informed choices onwhich technologies to adopt. The networkwill at the same time provide aninformation platform to share knowledgeon climate technologies tailored todeveloping country needs and follows thesuccessful establishment of UNIDO’s Green Industry Platform, also incollaboration with UNEP (see page 56).

UNIDO is also using networks to promoteinvestment and support entrepreneurshipby linking up its Investment andTechnology Promotion Office (ITPO)

international community to adoptnetwork governance and knowledgenetwork approaches in its globaldevelopment strategies and the post-MDGagenda. It also argues that any newdevelopment agenda that emerges from thecurrent debate must be more inclusive, witha strengthened role for middle-incomecountries in global developmentcooperation through intensified knowledgenetworking and a continued intensificationof South-South cooperation.

Another UNIDO initiative thatdemonstrates the power of knowledgesharing and networks is the programme onResource Efficient and Cleaner Production(RECP). Working with UNEP, UNIDO set upa programme in 1994 to establish NationalCleaner Production Centres (NCPCs) to helpgovernments of developing and transitioneconomies build up capacity in cleanproduction methods. But as the effects ofclimate change and rapidly dwindlingresources put a new emphasis on resourceefficient production, it became clear thatsustainable clean production would onlybecome achievable by decoupling growthfrom use of natural resources.

The development of RECP in 2007/08 is areflection of this shift and broadened thescope of the original NCPC programme,linking the new programme more closely tocurrent environmental concerns which takeaccount of efficiency, conservation andhuman development. It provides a strategicand coherent framework for incorporatingthese ideas into national policies.

An initial meeting was held in 2009 inSwitzerland to establish a global network ofresource-efficient and cleaner productionservices. In 2011, the Global Network for for

services. ITPOs bring togetherentrepreneurs and institutionslooking for internationalalliances in industrialinvestment in and fromdeveloping countries andeconomies in transition. Locatedin both hemispheres, the specialisednetwork of ITPOs creates opportunities forinvestors and technology suppliers to findpotential partners.

One example is UNIDO’s Centre forInternational Industrial Cooperation(CIIC) in the Russian Federation,which is an integral part of the ITPOnetwork. This centre has fosteredcooperation between Russian enterprisesfor over 20 years and is now extending theseconnections to neighbouring countries. In a $2.2 million Russian Federation-backed project, UNIDO has joined forceswith the Eurasian Economic Community(EurAsEC) to promote regional industrialintegration. It is expected that three newCIICs will come into operation in Armenia,Belarus and Kazakhstan as a result of theEurAsEC project, further expanding theITPO network.

At the same time through itsSubcontracting and Partnership Exchanges(SPXs), UNIDO helps local enterprises tosuccessfully meet the challenges ofglobalization and to take advantage of theemerging opportunities that evolve fromindustrial subcontracting, outsourcing andsupply chain opportunities.

ITPOs are strengthened by their links toother UNIDO services includingInternational Technology Centres (ITCs),the SPXs, the numerous Export Consortiaand the NCPCs; therefore providing value-

‰


added services to clients andpartners. And through theUNIDO Investment andTechnology PromotionProgramme for Africa, the ITPOsenjoy strong partnerships withnumerous national InvestmentPromotion Agencies (IPAs) inAfrican countries. This isfurther enhanced by theAfriPANet programme, whichprovides African investment promotionagencies (IPAs) with a common platform todiscuss and design investment promotionstrategies, especially regarding ForeignDirect Investment. The network aims toimprove the culture of IPAs by buildingtheir capacity to provide accurate up-to-dateinvestor information through anInvestment Monitoring Platform.

It seems clear that although not a newconcept, the use of knowledge networks has

taken on a new relevanceas the march ofglobalization goes

forward. Economic success,social cohesion and environmentalsustainability in a country depend morethan ever on the performance andbehaviour of its neighbours, regionalleaders, and global economic powers.Knowledge has therefore become of crucialimportance, with knowledge managementand networking now becoming critical toolsto bring about the changes required to drivesustainable economic development.


strategiccapacity-buildievidence-based

global

loca

lpolicy

state

learning

sharing knowledge

advice

impa

ct

traininggrow

th

mod

erni

zatio

n

researchobjectives

public-private diversification stakehol

statistics

prio

ritie

sdata

evalu

atio

n

economic development

innovations


ANALYTICALAND POLICYADVISORYSERVICES

ngeducating

indu

stria

l dev

elop

men

t

ders

analy

sis

growth re

sear

globalpublic-private

learning

impa

ct


evidence-based

statistics


For most of the past three decades,economists have championed the supremacyof the market, with those daring to challengethe benefits of unfettered free trade orprivatization seen as ill-informed or evendeluded. The neoliberal ideas embodied bythe so-called Washington Consensus heldsway to such an extent that the words‘industrial policy’ were, as Nobel laureateeconomist Joseph Stiglitz put it, “not to bespoken either in public or in private byrespectable people”. But, over the past decadethese seemingly unshakable beliefs havegradually faded away as economic crises,policy failures and unexpected success fromalternative models have broken down anysense of consensus. And while few wouldadvocate a return to state planning, theconcept that the state should have a role inguiding the development process is nolonger seen as outlandish. In short,industrial policy is back.

One factor contributing to this is theglobal rise of companies in emergingeconomies such as China and India, whichhave often received a significant degree ofstate backing. Their success has made theidea of public support and industrialpolicies more acceptable. At the same time,the unprecedented level of interventioncarried out by OECD countries in responseto the 2007/08 global financial meltdownhas also changed perceptions, while thecrash itself laid bare a crisis at the heart of

capitalism that makes exclusive reliance onthe free market increasingly hard to defend.Not only that, but the collective effortrequired to deal with the looming threat ofclimate change has, in no small part, changedthe tenor of the debate as governments lookto supranational solutions to limit its impact.

These momentous changes resonate with a particular strength at UNIDO, given itsmandate to promote inclusive andsustainable industrial development. It isperhaps not surprising, then, that the period2006-2012 has seen significant changes toUNIDO’s policy advisory services, whichreflect the renewed acceptance of industrialpolicy as a valid tool for growth anddevelopment.

Most notably, in early 2011, the DirectorGeneral set in motion a wide-ranging reviewof the Organization’s research and policyadvisory services. The result was a significantstrengthening of these services to better meetthe needs of Member States for solid,evidence-based policy advice. A newprogramme emerged based on two elements:strategic industrial policy advice in thedesign, development, implementation andevaluation of industrial policies; andfacilitation and capacity-building activitiesfocusing on preparing public and privateinstitutions to take over full control ofpolicymaking.

From an operational perspective, thedeliberations of the UNIDO Member States

led to a sharper focus in UNIDO on strategicpolicy advice and the related facilitation andcapacity-building activities. This approachmarked a departure from an earlier strategy toclosely associate policymaking expertise withthe delivery of technical cooperation activities.

A renewed emphasis on strategic policyadvice also signalled UNIDO’s determinationto get fully behind the 2005 Paris Declarationon Aid Effectiveness, especially in itsreference to “concrete and effective action toaddress weaknesses in partner countries’institutional capacities to develop andimplement results-driven nationaldevelopment strategies” and the related 2008Accra Agenda for Action, which noted that“without robust capacity – stronginstitutions, systems, and local expertise –developing countries cannot fully own andmanage their development processes”.

UNIDO presents its advice to MemberStates in a number of different ways,depending on specific requirements. One ofthe simplest requests it responds to is toreview draft industrial policies, ensuring theyare in line with international good practice interms of content and that they adhere to theprinciples of evidence-based policymakingand private-public dialogue. Examples of thisover the past few years include theAfghanistan Strategic Plan (2011-2015), theGrowth and Transformation Plan ofEthiopia, and the Sierra Leone NationalIndustrial Policy.

UNIDOtrusted adviser

evalu

a

One of UNIDO’s main roles is to give advice to governments on how to develop and improve their industrial sector. Over almost 50 yearsof experience, UNIDO has evolved increasingly sophisticated ways of ensuring that this policy advice is sound and tailored to specificcountry needs through solid statistics, research and analysis. This has made UNIDO a valued and trusted partner which regularly reviewsand develops its practices to ensure that its Member States get the best policy advice possible.


In other cases, UNIDO is called in at theproduction stage to assess the policymakingprocess along the principles highlightedabove. One significant example of thisapproach is the report, ‘The Republic of IvoryCoast’s New Industrial Policy – IndustrialSector and Institutional Context Diagnosis’,which provides a detailed roadmap to theMinistry of Industry to support its aspirationto bring about equitable industrialdevelopment in the country. In otherinstances, UNIDO’s input is more focused onfacilitating the identification of a consensusamong stakeholders with partiallyoverlapping objectives. Two relevantexamples of this type of engagement are thecooperation with the East AfricanCommunity for the finalization of EastAfrican Community Industrialization Policy2012 – 2032 and with the Southern AfricanDevelopment Community (SADC) for thefinalization of the SADC Regional IndustryPolicy Framework.

Finally, UNIDO also guides countries toidentify strategic priorities to help them

choose priority sectors, as wasthe case with the report,“Strategic Directions onIndustrial Policy in Mongolia”.

This policy advice strategyremains closely linked toUNIDO’s role in helpingdeveloping countries to buildcapacity, and so progressivelyreduce the need for them to relyon external expertise.

One relatively new initiativewhich encapsulates thisphilosophy is the UNIDO ‰

Above: Participants of theExecutive Training for PolicyMakers from Viet Nam inVienna 2012.

Phot

o: U

NID

O

growt

resear70 UNIDO Partner forProsperity

Institute for Capacity Development(http://institute.unido.org). UNIDO has longbeen a champion of human capacitytraining and most of its projects involvesome kind of skills building. But there hasbeen a growing realization within theOrganization that training of governmentofficials and policymakers did not go farenough: a more systematic approach wasneeded that broadened the scope ofknowledge sharing and reached out toyoung professionals and students whowould one day take up roles in governmentand policymaking.

The answer was an institute that woulddisseminate knowledge on industrial policydevelopment through learningprogrammes and capacity building. Since itsfounding in 2011, it has done this byproviding learning opportunities forpolicymakers, researchers, executives andstudents through e-learning activities,summer courses, and executive trainingcourses. These activities serve to shareUNIDO thinking and experience inindustrial development, promote newsolutions and best practice and developresearch and policy analysis capabilities.

The Institute has also established linkswith several academic institutions,universities, think tanks and researchcentres. In tandem with this it has set up aPhD programme in partnership withrecognized universities and/or researchinstitutions, stimulating rigoroustheoretical and empirical research studiesthat meet the requirements for PhDdissertations in the field of industrialdevelopment. The overall objective is toensure the development of researchcapacities in priority areas for UNIDO,educating individuals who will go on tobecome leading experts in industrialdevelopment in their countries.

In an attempt to ensure the widestpossible access to UNIDO publications, the

Institute has brought together a wide rangeof learning materials on its website. Theseinclude the Industrial Development Report(IDR) series, periodic publications, andresearch and statistical resources. As itevolves, the Institute aims to establish itselfas the main instrument for sharingknowledge resources and building MemberStates’ capacities through training activitiesand courses.

Also on the theme of capacity building,UNIDO has set up a Strategic IndustrialIntelligence and Governance Programmefor Member States which builds on theOrganization’s earlier work on the industrialcompetitiveness of nations. Under thisprogramme, UNIDO trains national expertson how to assess and project theperformance of the country’s industry, aswell as to identify the opportunities andthreats it faces in the internationalenvironment.

Closely related to this is UNIDO’s work instrengthening policy monitoring andevaluation capacities in its Member States.This is a relatively innovative service thatbuilds not only upon UNIDO’s expertisewith industrial strategies but also in the fieldof assessing the impact of enterprisemodernization programmes. A noticeableexample of this line of business is thepartnership with the Government of SouthAfrica under the framework of its ongoingManufacturing CompetitivenessEnhancement Programme (2012-2018).

The broad wealth of advice given throughthese different programmes would not bepossible without the rigorous nature ofUNIDO’s research and analysis and thequality of its statistics.

ResearchResearch is at the heart of UNIDO’s mandateto promote industrialization in developingcountries. UNIDO’s Constitution describesthe Organization as a kind of clearing house

for industrial information. It collects,monitors and disseminates. Over thedecades, it has built up an extensive databaseon the manufacturing value added of 120 countries. This comprehensive body ofknowledge puts the Organization in aunique position to contribute to theevolution of development economics andthe debate on industrial development.

The exact focus and scope of this researchhas evolved over the years, in response to thechanging development debate and to theresources available.

For example, at the turn of the century, theMillennium Development Goals putemphasis on poverty reduction and theprovision of basic needs rather than onindustrial development or economicdiversification. In the last few years, thisemphasis has shifted with a renewed call foreconomic growth and the expansion ofproductive capacities to be brought back tothe centre of the development agenda.

Across this rapidly changing developmentnarrative, UNIDO’s biennial IndustrialDevelopment Report has, since itsresurrection in 2000, consistently called forstructural change and economicdiversification towards the growth of theindustrial sector as a solution to the manychallenges facing the global community.Under the title of ‘Industrial DevelopmentReport 2009 – Breaking In and Moving Up:New Industrial Challenges for the BottomBillion and the Middle-Income Countries’,it made a forceful case for industrializationas a way for LDCs and middle-incomescountries to eradicate poverty sustainably inthe context of expanding globalization.Given the economic fallout that came faston the heels of the sub-prime crisis in theUS, it also served as a salient reminder of theimportance of the real economy.

UNIDO’s latest IDR reflects theascendency of another theme in the globaldevelopment debate: global warming. With

‰

globalpublic-private lo

cal

learning evalu

atio

n

impa

ct


evidence-based

statistics

train

ing

objectives

strateg

developm

innovations 71UNIDOPartner forProsperity

In response to greater demand forindustrial growth statistics following the2008 global economic recession and its directimpact on job rates and consumer behaviour,UNIDO now produces quarterly productiondata for 23 different branches of themanufacturing sector. Using data from over60 countries, it covers more than 90% ofworld manufacturing output, making it morecomplete than many other reports. Thebreakdown of the report into individualbranch, geographic region and countrygroupings helps to compare growth ratesacross the world.

Users of UNIDO’s Competitive IndustrialPerformance (CIP) index can look at eightdifferent indicators on production capability,competitiveness and technological intensitybased on production and trade data puttogether using objective quantitativemeasures. They can then make their ownjudgment on the position of a country andmake any policy change they deem necessary.In 2013, the CIP will be published separately,rather than as part of UNIDO’s IndustrialDevelopment Report. The Organization isalso setting up a web-based data warehouse,which will simplify the access to data for thehundreds of institutions that use UNIDOresources.

These ongoing innovations andimprovements to UNIDO’s statistics,research and policy advisory services havehelped to strengthen the overall quality of itspolicy advice. In particular, the DirectorGeneral’s decision in 2011 to bring togetherthe analytical, statistical and policy functionsof the Organization under the samemanagement structure ensures that policyadvice is grounded in solid research andindustrial statistics. This closer integrationmeans that UNIDO will be able to developbetter insights and provide more relevantindustrial development frameworks andpolicy recommendations, so improving theimpact of its policies on the ground.

growing agreement that a business-as-usualapproach is no longer tenable, the 2011report, ‘Industrial Energy Efficiency forSustainable Wealth Creation: CapturingEnvironmental, Economic and SocialDividends’, argued that far from being partof the problem, industrial development thatfocused on energy efficiency was a solutionto improving living standards in a world ofrapidly diminishing, finite resources. Moreefficient use of energy is not only advisableto protect future generations but necessaryto sustain the current one.

The global economic recovery is takinglonger than many anticipated, especially inindustrialized economies. At the same time,the rise of the emerging economies such asthe BRICS countries has thrown freshfodder into an old debate surroundingindustrial development, namely the shift ofmanufacturing jobs away fromindustrialized countries, which hasprompted a huge amount of political debatein the developed world. UNIDO is joiningthe fray with its next IDR, which tackles thetheme of the international division oflabour and the impact of manufacturinggrowth on employment. Ahead of thereport, UNIDO has published a comparativeassessment of the BRICS, entitled,‘Structural Change, Poverty Reduction andIndustrial Policy in the BRICS’, whichfocuses on industrial development as anengine of growth.

In an effort to increase the impact of itsstrategic research, UNIDO is also reachingout to like-minded partners. In the periodsince 2006, two partnerships within the UNsystem stand out: the first is UNIDO’scollaboration with UNCTAD on the‘Economic Development in Africa Report2011 – Fostering Industrial Development inAfrica in the new Global Environment’. Thereport relies heavily on UNIDO’s in-houseresearch built up from its uniquemanufacturing database, and provides new

and evidence-based insights on howcountries can diversify their economies. Inthe second partnership, UNIDO publishedthe book, ‘Pathways to Industrialization inthe Twenty-First Century’ with the UnitedNations University’s Maastricht Economicand Social Research Institute on Innovationand Technology (UNU-MERIT).

These publications represent just some ofthe strategic research work UNIDO is doingthat underpins its policy advice. In the pastseven years, UNIDO has commissionedvarious studies that provide policyrecommendations, in particular to resource-rich countries that want to widen theirexport base. One important example of thisis the publication ‘Promoting IndustrialDiversification in Resource IntensiveEconomies’. The Organization has alsopublished a number of working papersdescribing structural changes in themanufacturing sector, in terms of output,productivity and employment, as incomeper capita rises.

Looking ahead, UNIDO will continue inits role of policy adviser to Member Statesand act as a knowledge broker betweenacademic research and practitioners.

StatisticsStatistics has been described as the scienceof producing unreliable facts from reliablefigures. But in truth good statistics are thecornerstone of good policymaking.UNIDO’s vast body of statistics measuringindustrial growth shows the pace ofindustrialisation and how far technologyand innovation have spurred development.It also includes measures of productivityand competitiveness.

Looking at these growth statistics helpscountries to make plans and policies forlong-term industrial development – butonly if the statistics come from a trustedsource and are put together in acomprehensive way.

policystate

data

modernization

advic

e

sharing knowledge


LOOKING AHEAD:PRIORITIES FORTHE FUTURE


Over the past decade, UNIDO hasundergone significant change. It is leanerand more flexible. It has honed its prioritiesand is more focused than ever on deliveringits core services of industrial capacitybuilding and technical cooperation. TheOrganization has taken a leading role inpromoting green industry as part of a newsustainable development agenda and hasbuilt a reputation for forging active,meaningful partnerships both inside the UNsystem and beyond, through its ever closerlinks to the private sector. In the comingyears, UNIDO will build on these strengthsin its efforts to place sustainable industrialdevelopment at the heart of a new post-MDG development discussion.

The MDGs have framed the developmentagenda since 2000, and while significantprogress has been made, many targets willbe missed when they expire in 2015. Theinternational community, governments andNGOs are all in the process of debating whata post-MDG agenda should look like.

Following calls for action at the Rio+20summit, an intergovernmental OpenWorking Group comprising 30 UN memberstates was set up to develop new SustainableDevelopment Goals (SDGs). These new goalswill be debated along with broaderdiscussions on the formation of a new globaldevelopment framework. Over the past year,UNIDO has been an active player in the UN system’s preparation for this newframework. As a member of the UN TaskTeam on the post-2015 DevelopmentAgenda, UNIDO co-authored a major report,entitled ‘Realizing the future we want for all’,which examines the strengths and

weaknesses of the MDGs and provides initialsuggestions for global action in a changingworld. The Organization has also beeninvolved in UN global thematicconsultations on subjects including growthand employment, environmentalsustainability, energy, inequalities,population dynamics, and food security andnutrition. As the date for MDG expiry drawsnearer, UNIDO will increase its engagementin the ongoing debate and continue to pushfor inclusive and sustainable industrialdevelopment to form a central part of thenew development agenda.

The outcome of the Rio+20 summit hasalready laid the groundwork for a change infocus from a socially based developmentagenda towards one that brings togethersocial, economic and environmentaldimensions to create an inclusive andsustainable development path. Although the MDGs sought to unify these threeaspects, it is clear that the economic elementwas missing. Now, as the world considerswhat new development goals to set beyond2015, there is an opportunity to put economicgrowth and structural change back onto theagenda. UNIDO believes that sustainabledevelopment will not be attained withoutinclusive economic growth driven by theeconomic diversification and structuraltransformation that flows from sustainableindustrial development. History has shownthat no country has prospered withoutindustrialization. It has also shown that anyprogress made can be undone wheneconomies falter. A recent OverseasDevelopment Institute report found, forexample, that during economic recession,

gender equality decreases and primaryschool completion rates fall by 50%.

This is why attention must be given to themeans rather than just the ends when itcomes to developing new goals and a newdevelopment framework. So, to complimentthe goal of food security we must also supportagribusiness development, which will createwealth and stem the tide of migration to thecities. We must focus on skills and training foryouth and women, and encourageentrepreneurship. We must also invest inproductive capacity, and support job creation,structural transformation and economicdiversification. Only in this way will we securea long-term reduction in poverty.

Priorities for prosperityIf, as seems likely following Rio+20, productivecapacity does form part of the new SDGs,UNIDO will have a real opportunity toenhance its development role in the yearsahead. UNIDO’s priorities are likely to centreon areas where it is already making adifference, such as agribusiness combined withindustrial upgrading and trade capacitybuilding for job creation, along with strategiesfor low-carbon industrial development. Inpursuing industrialization policies,inclusiveness will be just as important asgrowth. This means extending policies thatbring the marginalized into the productivesector. Currently, over two-thirds of thoseliving in extreme poverty are women and girls.Increasing their involvement in the productivesector is a clear way to reduce poverty andimprove social integration. This is whyUNIDO plans to expand its work on genderequality and the empowerment of women.

Looking to the future


reflecting the economic and politicalemergence of the South and the rise inprivate-sector involvement. As the UN’sspecialized agency for industrialdevelopment, UNIDO is well-placed to actas a bridge between the public and privatesectors, helping to facilitate the transfer ofknowledge and technology to developingcountries. In this way UNIDO brings inprivate sector expertise to add value to itsown core programmes to help small-scaleenterprises become more competitive andmore productive. UNIDO will continue tosupport South-South cooperation and todeepen its involvement with the privatesector. But in future the nature of thesepartnerships is likely to change.

The complexity of the developmentproblems facing us means that more broad-based collaborations will be necessary tobring about a sustainable future for all.UNIDO has already played a key part in theformation of multi-stakeholderpartnerships, such as the Green IndustryPlatform or Sustainable Energy for All(SE4All), which bring together a number ofplayers from the UN, civil society andbusiness to act on key topics. Thesepartnerships will become more common atthe national and international level as theglobal community strives to find solutionsthat can deliver sustainable prosperity.

UNIDO, as a trusted, effective partner fordevelopment, will play a clear, defined rolein this endeavour: promoting inclusive,equitable and sustainable industrialdevelopment. No other internationalinstitution is better placed – and betterequipped – to do so.

At the same time, the urgent need foraction on the environment has givenUNIDO’s activities on energy and climatechange greater importance than ever. TheGreen Industry Initiative and Platform, andwork on resource efficiency, ecosystems,biodiversity, and industrial energy efficiencyfor climate change mitigation, will allremain priorities for the Organization.

As part of an overall strategy to move tolow carbon industrial development, UNIDOwants to see the greening of industries forma central part of the post-2015 agenda, alongwith access to energy. Making industrymore sustainable by raising efficiency will in turn improve competitiveness and helpto maintain growth. Greening of industriesalso plays a role in poverty reduction,through promoting energy security, healthand safety, and jobs. As the need for moreefficient processes and better qualitystandards grows, UNIDO’s expertise incapacity building is likely to be in greaterdemand. This will give UNIDO the chanceto make a greater impact through itsactivities to help enterprises in developingcountries to become less polluting andmore efficient.

Productive partnershipsThere are many challenges ahead inbuilding a truly global partnership forprosperity beyond 2015, but there are alsoopportunities. UNIDO has shown itselfable to adapt to changing times andchanging demands. The past decade hasseen a move away from a North-Southdriven development model to a moremulti-dimensional partnership model,

“Improving industrial energyefficiency is key to sustainableindustrial developmentworldwide but especially in therapidly developing countries ofthe Global South. It will helprealize the global greeneconomy and green industries.Investing in energy-efficienttechnologies, systems,processes, training andupgrading of skills mustunderpin low-carbon greengrowth.” Kandeh K. Yumkella

Phot

o: U

NID

O

UNIDO Partner for Prosperity© UNIDO 2013. All rights reserved.

This document has been produced without formal United Nations editing. The designationsemployed and the presentation of the material in this document do not imply the expression of anyopinion whatsoever on the part of the Secretariat of the United Nations Industrial DevelopmentOrganization (UNIDO) concerning the legal status of any country, territory, city or area or of itsauthorities, or concerning the delimitation of its frontiers or boundaries, or its economic system ordegree of development. Designations such as “developed”, “industrialized” or “developing” areintended for statistical convenience and do not necessarily express a judgement about the stagereached by a particular country or area in the development process. Mention of firm names orcommercial products does not constitute an endorsement by UNIDO.

ProsperityPartner forUNIDO

UNITED NATIONS INDUSTRIAL DEVELOPMENT ORGANIZATIONVienna International Centre, P.O. Box 300, 1400 Vienna, AustriaTelephone: (+43-1) 26026-0, Fax: (+43-1) 26926-69E-mail: [email protected], Internet: www.unido.org

unido partner for prosperity

Documents