United Nations Industrial Development Organization

United Nations Industrial Development Organization
Abbreviation	UNIDO / ONUDI
Formation	1966 (converted to a specialized agency in 1985)
Type	UN specialized agency
Legal status	active
Headquarters	Vienna, Austria
Head	Li Yong
Website	www.unido.org

The United Nations Industrial Development Organization (UNIDO), French/Spanish acronym ONUDI, is a specialized agency in the United Nations system, headquartered in Vienna, Austria. The Organization's primary objective is the promotion and acceleration of industrial development in developing countries and countries with economies in transition and the promotion of international industrial cooperation. It is also a member of the United Nations Development Group.^[1]

Overview[edit]

UNIDO believes that competitive and environmentally sustainable industry has a crucial role to play in accelerating economic growth, reducing poverty and achieving the Millennium Development Goals. The Organization therefore works towards improving the quality of life of the world's poor by drawing on its combined global resources and expertise in the following three interrelated thematic areas:

Poverty reduction through productive activities;
Trade capacity-building; and
Energy and environment.

Activities in these fields are strictly aligned with the priorities of the current United Nations Development Decade and related multilateral declarations, and reflected in the long-term vision statement, business plan and mid-term programme frameworks of UNIDO.

In order to fulfill these objectives, UNIDO

assists developing countries in the formulation of development, institutional, scientific and technological policies and programmes in the field of industrial development;
analyzes trends, disseminates information and coordinates activities in their industrial development;
acts as a forum for consultations and negotiations directed towards the industrialization of developing countries; and
provides technical cooperation to developing countries for implementing their development plans for sustainable industrialization in their public, cooperative and private sectors.

UNIDO thus works largely in developing countries, with governments, business associations and individual companies. The Organization's "service modules" are Industrial Governance and Statistics, Investment and Technology Promotion, Industrial Competitiveness and Trade, Private sector Development, Agro-Industries, Sustainable energy and Climate Change, Montreal Protocol, and Environmental management.

UNIDO was established as a UN programme in 1966 with headquarters in Vienna, Austria, and became a specialized agency of the United Nations in 1985.

In 2004, UNIDO established the UNIDO Goodwill Ambassador programme.

In 2009, UNIDO created a new flagship publication, Making It: Industry for Development.

Executive heads[edit]

UNIDO Executive Directors^[2]
1967–1974	Ibrahim Helmi Abd-elRahman ( Egypt)
1975–1985	Abd-El Rahman Khane ( Algeria)
UNIDO Director-Generals^[2]
1985–1992	Domingo L. Siazon Jr. ( Philippines)
1993–1997	Mauricio de Maria y Campos ( Mexico)
1998–2005	Carlos Alfredo Magariños ( Argentina)
2006 – June 2013	Kandeh Yumkella ( Sierra Leone)
July 2013 –	LI Yong (李勇) ( China)

Facts and figures[edit]

As of January 2017, 168 States are Members of UNIDO.^[3] The organization employs some 670 staff at Headquarters and in field representations in about 80 countries, and draws on the services of some 2,800 international and national experts (approx. 50% from developing countries) annually, who work in project assignments throughout the world.

The estimated total volume of UNIDO operations for the biennium 2012–2013 is €460 million, the value of technical cooperation delivery in 2012 amounted to $189.2 million.^[4]

UNIDO's headquarters are located at the Vienna International Centre, the UN campus that also hosts the International Atomic Energy Agency, the United Nations Office on Drugs and Crime and the Preparatory Commission for the Comprehensive Test Ban Treaty Organization.

Thematic focus[edit]

UNIDO explains its thematic focus areas as follows:^[5]

Poverty reduction through productive activities[edit]

As a primary driver of economic growth and employment creation, the private sector has a central role in poverty reduction and the achievement of the Millennium Development Goals. Private sector-led industrial development makes a significant contribution to bringing about the much needed structural changes that can set the economies of poor countries on a path of sustained economic growth. UNIDO's services therefore focus on encouraging the creation of decent employment and income to overcome poverty. Now, these services are customized for developing countries and range from industrial policy advice to entrepreneurship and SME development, and from investment and technology promotion to the provision of rural energy for productive uses.

Trade capacity-building[edit]

The technical ability of developing countries to produce competitive exportable products that comply with international standards is key to their successful participation in international trade. UNIDO is one of the largest providers of trade-related development services, offering focused and neutral advice and technical cooperation in the areas of competitiveness, industrial modernization and upgrading, compliance with international trade standards, testing methods and metrology.

Energy and environment[edit]

UNIDO-ISEC (International Solar Energy Center) headquarters in Lanzhou, China

Fundamental changes in the way societies produce and consume are indispensable for achieving global sustainable development and fighting climate change. UNIDO therefore promotes sustainable patterns of industrial consumption and production to de-link the processes of economic growth and environmental degradation. UNIDO is a leading provider of services for improved industrial energy efficiency and the promotion of renewable sources of energy. It also assists developing countries in implementing multilateral environmental agreements and in simultaneously reaching their economic and environmental goals.

UNIDO organizes the Global Renewable Energy Forum in October 2009.^[6]

Historical background[edit]

Origins[edit]

ONUDI in French and Spanish

The origins of the United Nations Industrial Development Organization (UNIDO) can be traced to a series of studies on a programme of rapid industrialization of developing countries that the United Nations Secretariat carried out during the early 1950s at the request of the United Nations Economic and Social Council (ECOSOC). These studies culminated in a programme of work on industrialization and productivity prepared by the United Nations Secretary-General in 1956 and endorsed the next year by ECOSOC and the General Assembly. At that time, it was first suggested that a special body to deal with the problems of industrialization be established, whose political organs could relieve ECOSOC and the General Assembly of the detailed consideration of those questions and whose secretariat could carry out more substantive work than the existing Industry Section of the Bureau of Economic Affairs within the Secretariat. The Industry Section of the Secretariat became a branch in 1959, and in 1962 it became the Industrial Development Centre, headed by a Commissioner for Industrial Development.

Special organ of the United Nations[edit]

In the aftermath, proposals for further institutionalizing industrial development-related issues within the UN were considered by various advisory groups and inter-organizational organs. Subsequently, the United Nations General Assembly created the UNIDO in November 1966 as a special organ of the United Nations.^[7] In January 1967, the Organization was formally established with Headquarters in Vienna, Austria. Compared to the Industrial Development Centre, UNIDO's creation was intended to broaden the work of its predecessor. Besides normative activities, such as acting as a forum for discussions, analytical functions and information dissemination, UNIDO became involved in operational activities, i.e. in technical co-operation activities.

Conversion into a specialized agency[edit]

The setting up of UNIDO as a special organ had nonetheless been a compromise solution. The developing countries (the Group of 77) had in the first instance promoted the idea of a specialized agency with its own political decision-making governing bodies and autonomy in budgetary matters. The same position was advocated by several high-level expert groups and intergovernmental committees during the following years. In the context of the General Assembly's adoption of the Declaration and Programme of Action on the Establishment of a New International Economic Order and of the Charter of Economic Rights and Duties of States, UNIDO's second General Conference, held in 1975 in Lima, Peru, adopted the Lima Declaration on Industrial Development and Cooperation.^[8] For the first time, industrial development objectives were quantified internationally — the Lima Target anticipated the developing countries to attain a twenty-five per cent share of world industrial production by the year of 2000. As part of the institutional arrangements of the Lima Plan of Action, and with a view to assisting in the establishment of a New International Economic Order, it was recommended to the General Assembly that UNIDO be converted into a specialized agency.

An intergovernmental committee prepared a draft constitution, which was adopted in Vienna in 1979. However, the objections and doubts of industrialized countries as to the necessity of a specialized agency contributed to delaying the ratification process. In order to ensure that the new organization would start up with a membership including substantially all significant States, the General Assembly, by resolutions adopted in 1982 and 1984, called for a series of formal consultations among prospective Member States, which eventually led to a general agreement that the new UNIDO Constitution should enter into force. All necessary formal requirements were fulfilled in 1985, and in December of the same year, UNIDO finally became the sixteenth Specialized Agency of the United Nations with Headquarters in Vienna.

Crisis and reform during the 1990s[edit]

During the subsequent years, UNIDO continuously expanded particularly its operational activities. However, several developments outside and inside the Organization led to a crisis, which reached a breaking point in 1997 when UNIDO faced the risk of closure: After the end of the Cold War and the triumph of the market economic system over the command economic system, and in view of the Washington Consensus that limited the role of industrial policy in economic development processes, some Member States felt that industrial development could be supported more effectively and efficiently by the private sector. As a result, Canada, the United States (UNIDO's then largest donor), and Australia subsequently withdrew from the Organization between 1993 and 1997. Simultaneously, the continued slowdown in the economies of some major industrialized countries as well as the financial turmoil of the 1997 Asian financial crisis caused multilateral development assistance to decline. In addition, a weak management structure and lack of focus and integration of UNIDO's activities contributed to aggravate the crisis.

UNIDO's Member States responded by adopting a stringent Business Plan on the Future Role and Functions of the Organization in June 1997. Activities laid out in the Business Plan are based on the clear comparative advantages of UNIDO, while avoiding overlap and duplication with other multilateral institutions. A key point was that activities should be integrated into packages of services, rather than being provided on a stand-alone basis. The Organization radically reformed itself on the basis of this business plan and streamlined its services, human and financial resources as well as internal processes during the following years.

Post-reform role[edit]

On the basis of sound finances and in a second wave of programmatic reforms in 2004, UNIDO further focused its activities and technical services directly responding to international development priorities. In an independent assessment of 23 international organizations against a large numbers of criteria, UNIDO was assessed 6th best overall and as best in the group of specialized agencies.^[9] In regard of the current UN Reform debate, it can be observed that UNIDO is actively contributing to UN system-wide coherence and cost efficiency.

Governance[edit]

Membership[edit]

Members, List A

Members, List B

Members, List C

Members, List D

former parties

Members of the UN, or of UN specialized agencies, or of the IAEA, are eligible for membership with UNIDO.^[10] The process of becoming a Member of the Organization is achieved by becoming a party to the Constitution. Observer status is open, upon request, to those enjoying such status in the General Assembly of the United Nations, unless the UNIDO General Conference decides otherwise. The Conference has the authority to invite other observers to participate in the work of the Organization in accordance with the relevant rules of procedure and the provisions of the Constitution.

As of May 17th, 2018, 168 States are Members± of UNIDO,^[3]^[11] all of them being UN members. UNIDO Members are divided into four lists.^[12] List A consists of all UNIDO countries in the African + Asian Groups of UN (along with Israel, while excluding Cyprus and Japan). List B consists of all UNIDO countries in WEOG group of UN (along with Cyprus and Japan, and excluding Israel). List C consists of all UNIDO countries in GRULAC group of UN. List D consists of all UNIDO countries in the Eastern European group of UN.

The lists, originally defined in General Assembly resolution 2152 and the UNIDO Constitution serve to balance geographical distribution of member states' representation on the Industrial Development Board^[13] and the Programme and Budget Committee.^[14]

UNIDO is the one of the two UN specialized agencies where members are separated into groups while the other is IFAD. UNIDO List B, is similar to IFAD List A – which comprises primarily developed countries,^[15] while the set of the rest of UNIDO members is similar to the set of the rest of IFAD members – which comprise primarily developing countries.^[15]

The full lists are as follows:

List A (100 members): Afghanistan, Algeria, Angola, Bahrain, Bangladesh, Benin, Bhutan, Botswana, Burkina Faso, Burundi, Cambodia, Cameroon, Cape Verde, Central African Republic, Chad, China, Comoros, Congo, Ivory Coast, DR Congo, Djibouti, Egypt, Equatorial Guinea, Eritrea, Ethiopia, Fiji, Gabon, Gambia, Ghana, Guinea, Guinea-Bissau, India, Indonesia, Iran, Iraq, Israel, Jordan, Kazakhstan, Kenya, Kiribati, North Korea, South Korea, Kuwait, Kyrgyzstan, Laos, Lebanon, Lesotho, Liberia, Libya, Madagascar, Malawi, Malaysia, Maldives, Mali, Marshall Islands, Mauritania, Mauritius, Mongolia, Morocco, Mozambique, Myanmar, Namibia, Nepal, Niger, Nigeria, Oman, Pakistan, State of Palestine, Papua New Guinea, Philippines, Qatar, Rwanda, Samoa, Sao Tome and Principe, Saudi Arabia, Senegal, Seychelles, Sierra Leone, Somalia, South Africa, Sri Lanka, Sudan, Swaziland, Syria, Tajikistan, Thailand, Timor-Leste, Togo, Tonga, Tunisia, Tuvalu, Uganda, United Arab Emirates, Tanzania, Turkmenistan, Uzbekistan, Vanuatu, Vietnam, Yemen, Zambia, Zimbabwe.

List B (21 members): Austria, Cyprus, Finland, Germany, Ireland, Italy, Japan, Luxembourg, Malta, Monaco, Netherlands ^[16], Norway, Spain, Sweden, Switzerland, Turkey.

List C (32 members): Argentina, Bahamas, Barbados, Belize, Bolivia, Brazil, Chile, Colombia, Costa Rica, Cuba, Dominica, Dominican Republic, Ecuador, El Salvador, Grenada, Guatemala, Guyana, Haiti, Honduras, Jamaica, Mexico, Nicaragua, Panama, Paraguay, Peru, Saint Kitts and Nevis, Saint Lucia, Saint Vincent and the Grenadines, Suriname, Trinidad and Tobago, Uruguay, Venezuela.

List D (20 members): Albania, Armenia, Azerbaijan, Belarus, Bosnia and Herzegovina, Bulgaria, Croatia, Czech Republic, Georgia, Hungary, Montenegro, Poland, Republic of Moldova, Romania, Russian Federation, Serbia, Slovakia (denounced, effective 31 December 2017), Slovenia, Macedonia, Ukraine.

Signatory states that have not finished their ratification procedures are: Antigua and Barbuda (1982).^[11]

Former UNIDO members are^[17] Australia (1985–97, List B),^[18] Belgium, (1985-2015, List B), Canada (1985–93, List B),^[18] France (1982–2014, List B), Lithuania (1991–2012, List D),^[12] New Zealand (1984–2013, List B), Portugal (1984–2014, List B), United Kingdom (1985–2012, List B),^[12] the United States (1985–96, List B),^[18] Belgium (1981–2015), Denmark (1985-2016, List B) and Greece (1985-2016, List B). Slovakia denounced the convention in December 2016 and will cease to be a UNIDO member on 31 December 2017.

The Holy See and the Sovereign Military Order of Malta have observer status^[19] with UNIDO.

Other UN member states that have not signed, ratified, or denounced the constitution are Andorra, Brunei, Estonia, Iceland, Latvia, Liechtenstein, Micronesia, Nauru, Palau, San Marino, Singapore, Solomon Islands, and South Sudan.

Policy-making organs[edit]

The policy-making organs (or governing bodies) of UNIDO are based on their predecessors that were effective prior to UNIDO becoming a specialized agency. Thus, the General Conference, the Industrial Development Board (IDB) and the Programme and Budget Committee (PBC) are anchored in the Constitution.

Substantive decisions of the policy-making organs are generally taken by consensus. A vote takes place when no consensus can be reached or on specific request of a member of the policy-making organ^[20]

General Conference[edit]

The Conference is the highest policy-making organ of the Organization and consists of all Member States of UNIDO. It meets every two years and approves the programme and budgets, establishes the scale assessments for regular budget expenditures for the forthcoming biennium and, every second time, appoints the Director-General for a period of four years.

Industrial Development Board (IDB)[edit]

The Board meets once in Conference years and twice in other years, and consists of 53 Member States^[21] of the Organization that are elected for a four-year term. It acts as a preparatory body for the Conference and reviews the implementation of the approved programme of work and of the corresponding regular and operational budgets for the forthcoming biennium. Among its other main functions, the Board recommends to the Conference a scale of assessments, as well as a candidate for the post of Director-General.

Programme and Budget Committee (PBC)[edit]

The Committee consists of 27 Member States^[22] of the Organization that are elected for a two-year term and meets at least once a year to consider, inter alia, the proposals of the Director-General for the programme of work and corresponding estimates for the regular and operational budgets.

Secretariat[edit]

The Secretariat of UNIDO is based in Vienna (Austria) and maintains representative offices in Brussels (Belgium), Geneva (Switzerland) and New York City (USA). As of 2013, UNIDO's organizational structure comprises^[23] The Office of the Director-General (ODG), the Programme Development and Technical Cooperation Division (PTC), the Office of the Deputy to the Director General (DDG), the Programme Support and General Management Division (PSM) as well as offices of Internal Oversight and Legal Services.

The current (2013) Director-General of UNIDO, Mr. Li Yong (China), was elected by Member States in June 2013.

Country level representation[edit]

Field representation[edit]

UNIDO's system of field representation includes four categories of offices:

Regional offices, which cover the country of their location as well as a number of countries in the same region, in which the Organization assumes the status of a non-resident agency
Country Offices, which cover their host country
Focal point offices maintained within national governments
UNIDO Desks in UNDP offices.

Technical offices at country level[edit]

In order to provide additional support to UNIDO's technical activities, different types of technical offices have been established. These include:

Investment and Technology Promotion Offices (ITPOs), which promote investment and technology flows to developing countries and countries with economies in transition, being financed by their host countries
International Technology Centres, which act as catalysts for technology upgrading and assist in managing technology change
In collaboration with the United Nations Environment Programme (UNEP), UNIDO set up a global network of National Cleaner Production Centres (NCPCs), aiming at building national capacities in clean production technologies, fostering dialogue between industry and government and enhancing investments for transfer and development of environmentally sound technologies.
UNIDO's Industrial Subcontracting and Partnership Exchanges (SPX) facilitate production linkages between small, medium and large manufacturing firms and link up with global markets and supply chain networks.
UNIDO Centres for South-South Cooperation as part of a major UNIDO South-South cooperation initiative in several of the more advanced developing countries.