The inclusive and sustainable industrial development (ISID) initiative of the U.N. Industrial Development Organisation to promote industrial development for poverty reduction, inclusive globalisation and environmental sustainability is gaining momentum in the countries of the African, Caribbean and Pacific (ACP) group. 

A concrete sign of this trend came on the occasion of last week’s ACP Council of Ministers meeting in the Belgian capital where UNIDO Director-General Li Yong met with ACP representatives to explore how to further promote inclusive and sustainable industrialisation in their countries and possible ways of scaling up investment in developing countries.

UNIDO Director-General Li Yong at the !00th ACP Council of Ministers meeting in Brussels, where he explored how to further promote inclusive and sustainable industrialisation in ACP countries. Credit: Courtesy of ACP

During the opening session of the ministers’ meeting, outgoing ACP Secretary-General Alhaji Muhammad Mumuni had already highlighted the key role of the ISID programme in promoting investment and stimulating competitive industries in African, Caribbean and Pacific countries.

In December last year in Lima, Peru, the 172 countries belonging to UNIDO – including ACP countries – unanimously approved the Lima Declaration calling for “inclusive and sustainable industrial development”.

The Lima Declaration clearly acknowledged that industrialisation is an important landmark on the global agenda and, for the first time, the spectacular industrial successes of several countries in the last 40 years, particularly in Asia, was globally recognised.

According to UNIDO statistics, industrialised countries add 70% of value to their products and recent research by the organisation shows how industrial development is intrinsically correlated with improvements in sectors such as poverty reduction, health, education and food security.“We need to move away from traditional models of industrialisation, which have had serious effects on the environment and the health of people” – UNIDO Director-General Li Yong

One major issue that the concept of ISID addresses is the environmental sustainability of industrial development. “We need to move away from traditional models of industrialisation, which have had serious effects on the environment and the health of people,” said Li.

Economic growth objectives should be pursued while protecting the environment and health, and by making business more environmentally sustainable, they become more profitable and societies more resilient.

ISID in the Post-2015 Agenda

“For ISID to be achieved,” said Li, “appropriate policies are essential as well as partnerships among all stakeholders involved.” This highlights the importance of including ISID in major development frameworks, particularly in the post-2015 development agenda that will guide international development in the coming decades.

With strong and solid support from the ACP countries, ISID has already been recognised as one of the 17 Sustainable Development Goals (SDGs) proposed by the U.N. Open Working Group on SDGs – to take the place of the Millennium Development Goals (MDGs) whose deadline is December 2015 – and confirmed last week by U.N. Secretary-General Ban Ki-moon in ‘The Road to Dignity By 2030’, his synthesis report on the post-2015 agenda.

In fact, goal 9 is specifically devoted to “building resilient infrastructure, promoting inclusive and sustainable industrialisation and fostering innovation.”

In this context, Mumuni told the Brussels meeting of ACP ministers that “in building the competitiveness of our industries and facilitating the access of ACP brands to regional and international markets, UNIDO is regarded by ACP Secretariat as a strategic ally.”

ACP-UNIDO – A Strategic Partnership

A Memorandum of Understanding approved in March 2011 and a Relationship Agreement signed in November 2011 represent the solid strategic framework underlying the strategic partnership between ACP and UNIDO, and highlight how the two partners can work together to support the implementation of ISID in ACP countries.

Key is the establishment and reinforcement of the capacity of the public and private sectors in ACP countries and regions for the development of inclusive, competitive, transparent and environmentally-friendly industries in line with national and regional development strategies.

On the basis of these agreements, ACP and UNIDO have intensified their policy dialogue and concrete cooperation. One example reported during the ministers’ meeting was the development of a pilot programme entitled “Investment Monitoring Platform” (IMP), funded under the intra-ACP envelope of the 9th European Development Fund (EDF) with the support of other donors.

This programme is aimed at managing the impact of foreign direct investments (FDI) on development, combining investment promotion with private sector development, designing and reforming policies that attract quality investment, and enhancing coordination between the public and private sector, among others.

This programme has already reinforced the capacity of investment promotion agencies and statistical offices in more than 20 African countries, which have been trained on methodologies to assess the private sector at country level.

Implementing ISID in ACP Countries

In Africa, the strategy for the Accelerated Industrial Development of Africa (AIDA) prepared with UNIDO expertise, is a key priority of Agenda 2063  – a “global strategy to optimise use of Africa’s resources for the benefit of all Africans” – and of the Joint Africa-European Union Strategy.

In the Caribbean, high priority is being given to private sector development, climate change, renewable energy and energy efficiency, and value addition in agri-business value chains, trade and tourism.

The CARIFORUM-EU Business Forum in London in 2013 clearly articulated the need for more innovation, reliable markets and private sector information, access to markets through quality and the improvement of agro-processing and creative industries.

In the Pacific, the 2nd Pacific-EU Business Forum held in Vanuatu in June this year called for stronger engagement in supporting the private sector and ensuring that innovation would produce tangible socio-economic benefits.

Finally, in all three ACP regions, interventions related to quality and value chain development are being backed in view of supporting the private sector and commodity strategies.

(Edited by Phil Harris)

UNIDO Director General LI Yong at the Second ISID Forum, Nov. 4-5, 2014. Credit: Courtesy of UNIDO

By Ramesh Jaura
VIENNA, Nov 6 2014 (IPS)

The United Nations Industrial Development Organisation (UNIDO) has come a long way since 1997, when it faced the risk of closure in the aftermath of the end of the Cold War.

At that time, it was threatened with the withdrawal of Canada, the United States – its largest donor – as well as Australia on the grounds that the private sector was better suited to foster industrial development than an inter-governmental organisation.

Nearly one-and-a-half year after UNIDO’s 53-member Industrial Development Board appointed LI Jong – who had served as China’s Vice-Minister of Finance since 2003 – as Director General, the organisation is set to respond to post-2015 global development priorities by treading the path to inclusive and sustainable industrial development (ISID).

“We have a vision of a just world where resources are optimised for the good of people. Inclusive and sustainable industrial development can drive success" – U.N. Secretary-General Ban Ki-moon
It was not surprising therefore that some 450 participants from 92 countries, including Heads of State and government, ministers, representatives of bilateral and multilateral development partners, agencies of the United Nations system, the private sector, non-governmental organisations and academia, joined hands to interact at UNIDO’s Second ISID Forum on Nov. 4 and 5 at the United Nations headquarters in Vienna.

The first Forum was convened in June 2014, at which government officials and key policy-makers exchanged views on policies and ISID instruments and examined what had worked in one country and could inspire another.

“The promotion of inclusive and sustainable industrial development is a very clear mandate given by our Member States at the General Conference of UNIDO in Lima, Peru, last December,” LI told the Forum on Nov, 4.

“Since then, we have been implementing the new mandate in various ways … Today we send a strong statement: technical assistance cannot remain isolated from the main forces that shape the course of progress in your countries. We have to combine our efforts to enhance the developmental impact of our endeavours. Together we will grow; the partnership will make us stronger.”

The rationale behind the UNIDO Director General’s thinking is obvious. Strategic partnerships are the best response to increasingly complex development challenges because there is no single development strategy and no single actor that can address all the social, environmental and economic challenges the world faces today.

“Integrated and multi-actor responses are required to tackle problems like climate change, economic recovery, rising youth unemployment, conflict, and emerging problems such as global health pandemics,” argues Ll.

U.N. Secretary-General Ban Ki-moon also believes that “the overarching imperative for our planet’s future is sustainable development.” In opening remarks to the Second Forum, Ban said:  “We have a vision of a just world where resources are optimised for the good of people. Inclusive and sustainable industrial development can drive success.”

Amid applause, Ban added that among the main area of action – climate change – presents an opening for inclusive and sustainable industrial development.

“Smart governments and investors are exploring innovative green technologies that can protect the environment and achieve economic growth. For industrial development to be sustainable it must abandon old models that pollute. Instead, we need sustainable approaches that help communities preserve their resources,” he said.

The UNIDO forum closely examined and endorsed new pilot programmes for country partnerships to promote inclusive and sustainable industrial development in Ethiopia and Senegal.

The programmes are based on close analysis and insights gained by UNIDO experts during visits to the two countries in the course of the previous months. They have identified a number of strong partners, both local and international, and accordingly designed the two partnership programmes.

From left to right: Ethiopia’s Prime Minister, U.N. Secretary-General Ban Ki-Moon, UNIDO Director General LI Yong and Senegal’s Prime Minister at UNIDO’s Second ISID Forum, Nov. 4-5, 2014. Credit: Courtesy of UNIDO

UNIDO’s work in the field of inclusive and sustainable industrialisation in Africa was lauded by Ethiopian Prime Minister Hailemariam Desalegn and Senegalese Prime Minister Mahammed Dionne.

Commending the creation of the new partnership approach, Prime Minister Desalegn said that inclusive and sustainable industrialisation would help his country develop. He said Ethiopia was looking forward to enhancing its economic transformation and that such a partnership model will help implement this vision.

Prime Minister Dionne said economic growth must lead to the eradication of poverty and address the problem of unemployment, adding that inclusive and sustainable industrialisation would help implement Senegal’s development plan by providing the collective action needed to make it happen.

Director General Ll assured the two prime ministers that “UNIDO is fully committed to supporting the governments of Ethiopia and Senegal in implementing the two programmes.”

“These pilot programmes,” he said, “mark the beginning of a larger, more comprehensive and ambitious approach to how UNIDO undertakes technical cooperation with and for Member States to support their industrialisation agenda.”

“If we want to achieve the scale of development needed, we have to explore the full potential of inclusive and sustainable industrial development,” Ll added.

“We have to strengthen productive capacities. We must build enterprises. We must reach out to farmers and entrepreneurs, and promote economic diversification and structural transformation based on adding value to the natural resources of these countries.”

The need for moving away from activities that are low value-added and low-productivity to activities that add more value and boost productivity was explained by the U.N. Secretary-General at the high-level thematic roundtable of the United Nations Conference on Landlocked Developing Countries (LLDCs) on Nov. 3 in Vienna.

There, Ban said: “Think of a coffee bean, just a simple coffee bean. All LLDCs can sell just a coffee bean as it is. But more developed creative countries … grind this coffee bean and sell as a manufactured product at a much higher price.

“The same with unprocessed minerals. Lots of developing countries … sell minerals just as they are. Many foreign companies come and bring all these minerals, and then they sell back with processed manufactures, [at a] much higher [price]. Then with their own mineral resources they have to buy, they have to pay a lot of money.”

ISID takes into account factors such as the structural and knowhow bottlenecks faced by developing countries by “the mobilisation of partners and their resources to synergise with UNIDO’s technical cooperation”, LI told the ISID Forum.

Commenting on the agreed cooperation with Ethiopia and Senegal, he said: “I would say that these two pilot programmes for country partnership mark the beginning of a larger, more comprehensive and more ambitious approach of how UNIDO undertakes technical cooperation with and for Member States to support their industrialisation agendas.”

“Together with our partners, we will finalise the planning of the partnership country programmes, based on the inputs we receive in this Forum.”

Those inputs included recognition that the concerns and development objectives of countries seeking international support must be taken into account and that there is no alternative to public-private partnerships.

These partnerships, participants agreed, must aim at eradication of poverty and not maximisation of the profits of the private corporations involved in such partnerships.

(Edited by Phil Harris)

With annual economic growth rates of over 10 percent and attractive investment conditions due to low infrastructural and labour costs, Ethiopia is eagerly trying to rise from the status of low-income to middle-income country in the next 10 years.

Ethiopia, with some 94 million inhabitants, is the second most populous country in Africa after Nigeria, but it remains a predominantly rural country. Only 17.5 percent of the population lives in urban areas, mainly Addis Ababa.

It is also one of the continent’s fastest growing economies. Between 2015 and 2018 growth is expected to average 7.3 percent, according to a recent study by the United Nations Industrial Development Organisation (UNIDO).

While economic growth since 2006/2007 doubled per capita income to 550 dollars in 2012/13, and the percentage of people living below the national poverty line dropped from 38.9 in 2004 to 29.6 in 2011, government sources admit that eradication of poverty remains a compelling issue.“There is not a single country in the world which has reached a high state of economic and social development without having developed an advanced industrialised sector” – UNIDO Director General Li Yong

The official target of rising to a middle-income country is considered to be realistic, but an East Asian diplomat accredited to the African Union in Addis Ababa says there is reason to be sceptical, partly because although the amount of foreign direct investment (FDI) rose from 0.5 percent in 2008 to 2 percent in 2013, investors continue to face trade constraints.

According to UNIDO, these are mainly related to border-logistics. Djibouti, the main import-export seaport used by Ethiopia, is situated 781 km from Addis Ababa, which makes the cost of land transportation a critical factor.

It is against this backdrop that UNIDO has chosen Ethiopia, along with Senegal, as a pilot country for its ambitious inclusive and sustainable industrial development (ISID) programme, which aims to achieve industrialisation in developing countries in order to eradicate poverty and create prosperity.

According to UNIDO Director General Li Yong, “there is not a single country in the world which has reached a high state of economic and social development without having developed an advanced industrialised sector”.

What distinguishes the ISID programme is that “current modes of industrialisation are neither fully inclusive nor properly sustainable”, he added. UNIDO is therefore not merely promoting industrialisation but trying to approach the needs and challenges of the globalised world that demand future-oriented concepts.

Promoting the sustainability that should be inherent to industrialisation, UNIDO says that the ISID programme takes into account environmental factors together with its partner countries and organisations.

It also fosters an industrialisation that is inclusive in sharing the benefits of the generated prosperity for all parties involved, thereby promoting social equality within populations as well as an equal distribution between men and women to ensure that nobody is excluded from the benefits of growth.

To show how these objectives can be met and to promote ISID, UNIDO organised the Second Forum on ISID from Nov. 4 to 5 in Vienna. In an opening statement, U.N. Secretary-General Ban Ki-moon said: “We have a vision of a just world where resources are optimised for the good of people. Inclusive and sustainable industrial development can drive success.”

The Secretary-General, who is a strong advocate of the sustainable development agenda, also said that in order to achieve this objective, “industrial development must abandon old models that pollute. Instead, we need sustainable approaches that help communities preserve their resources.”

Prime Minister Hailemariam Desalegn of Ethiopia and Prime Minister Mahammed Dionne of Senegal – representing the two pilot countries chosen for ISID – commended UNIDO for implementing a partnership programme, and Ethiopia’s State Minister of Industry, Mebrahtu Meles, emphasised that building industrial zones will accelerate industrialisation, as has been done by Asian countries such as China.

Forum participants expressed optimism about Ethiopia achieving economic growth through inclusive and industrial sustainable development provided that leadership and vision focused on the country’s comparative advantages while improving infrastructure.

They said that regional integration could be key for the development of the country, and called for further exploration of UNIDO’s role as a catalyst of transformational change.

In particular additional efforts were required to enhance the productivity in existing light industries such as agro-food processing, textiles and garments, leather and leather products. There was also a need to diversify by launching new industries such as heavy metal and chemicals and building up high-tech industries like packing, biotechnology, electronics, information and communications.

The ambassadors of China, Japan and Italy to Ethiopia – Xie Xiaoyan, Kazuhiro Suzuki and Giuseppe Mistretta respectively – as well as business stakeholders and development banks assured their continued support in helping Ethiopia take the path towards inclusive and sustainable industrial development, mainly through UNIDO.

(Edited by Phil Harris)

Ethiopia and Senegal have lauded the United Nations Industrial Development Organization (UNIDO) for its “crucial assistance” in enhancing development and progress in Africa.

Prime Minister Hailemariam Desalegn of Ethiopia said that inclusive and sustainable industrialization, aided by the UNIDO, would help his country develop. He said Ethiopia was looking forward to boosting its economic transformation and that such a partnership model would help implement this vision.

Prime Minister Mahammed Dionne of Senegal also lauded UNIDO’s work in the field of inclusive and sustainable industrialization in Africa. He said economic growth must lead to the eradication of poverty and address the problem of unemployment, adding that inclusive and sustainable industrialization would help implement Senegal’s development plan by providing the collective action needed to make it happen.

The two African leaders were addressing the ‘Second UNIDO forum on partnerships to scale up investment for inclusive and sustainable industrial development’ (ISID) on Nov 4, which brought together about 440 participants from 93 countries.

They included heads of State and government, ministers, representatives of bilateral and multilateral development partners, the United Nations system, the private sector, non-governmental organizations and academia. (To watch video of the opening, click here.)

“UNIDO is fully committed to supporting the Governments of Ethiopia and Senegal in implementing the two programmes. These pilot Programmes for Country Partnership mark the beginning of a larger, more comprehensive and ambitious approach to how UNIDO undertakes technical cooperation with and for Member States to support their industrialization agenda,” said Director General LI Jong.

“If we want to achieve the scale of development needed, we have to explore the full potential of inclusive and sustainable industrial development. We have to strengthen productive capacities. We must build enterprises. We must reach out to farmers and entrepreneurs, and promote economic diversification and structural transformation based on adding value to the natural resources of these countries.”

Opening the ISID forum, UN Secretary-General Ban Ki-moon said that “the overarching imperative for our planet’s future is sustainable development. We have a vision of a just world where resources are optimized for the good of people. Inclusive and sustainable industrial development can drive success.”

Ban added that among the main areas of action, climate change presents an opening for inclusive and sustainable industrial development. “Smart governments and investors are exploring innovative green technologies that can protect the environment and achieve economic growth. For industrial development to be sustainable it must abandon old models that pollute. Instead, we need sustainable approaches that help communities preserve their resources,” he said.

Smelter at the El Teniente mine, which produces 37 percent of Chile’s copper. Credit: Marianela Jarroud/IPS

By Li Yong and A.L. Abdul Azeez
VIENNA, Oct 30 2014 (IPS)

As representatives of the United Nations Industrial Development Organization (UNIDO), we are sometimes asked whether industrial development is still relevant to a world which many observers have claimed over the past decades to have entered the “post-industrial age”. Our answer is always an emphatic “yes”, shaped both by the evidence of history and current events.

In the wake of recession and sluggish growth, policymakers globally are increasingly recognising the merits of industrialisation, both in developing and in richer countries.

The European Union, Japan, the United States and a few other countries have given greater prominence to reindustrialisation in their respective economic policies in recent years, while both middle-income countries and least developed countries have cited industrialisation as vital for their future prosperity.An integrated approach to society’s most urgent challenges must address all three dimensions of sustainable development - economic, social and environmental.

UNIDO promotes industrial development as the primary vector through which poverty can be eradicated, by enhancing productivity, stimulating economic growth and generating associated increases in incomes and employment. We cooperate with governments and private sector actors to harness the investments necessary to strengthen the productive and trade capacities of our member states.

History has shown that industrialisation has an immense potential to propel upward social mobility; as a result of the Industrial Revolutions in England and the United States in the 19^th and 20^th centuries, millions of people were lifted out of poverty. Latterly, industrialisation has been central to the booming growth enjoyed by East Asian economies, and especially China, where GDP per capita has risen over 30-fold since 1978.

However, UNIDO recognises that while industrialisation has often been the motor for positive economic change, this has sometimes been achieved at the expense of social inequality and environmental degradation. Industrialisation must therefore be embedded in a socially equitable and environmentally sustainable policy framework if it is to achieve the desired developmental impact.

An integrated approach to society’s most urgent challenges must address all three dimensions of sustainable development – economic, social and environmental. At UNIDO’s 15^th General Conference in Lima, Peru, in December 2013, the organisation’s 172 member states unanimously adopted the Lima Declaration, giving UNIDO a mandate to promote Inclusive and Sustainable Industrial Development (ISID) as the principal means of realising their industrial development policy objectives.

The achievement of ISID represents UNIDO’s vision for an approach that balances the imperatives of economic growth, social cohesion and environmental sustainability.

The world is united in regarding poverty eradication as the overarching objective of development, and UNIDO’s member states have placed it at the core of ISID. Industrial development has been shown to be a key driver of processes which make a difference to the world’s poorest citizens.

Research from UNIDO demonstrates that countries with a larger share of industry in their economies perform better with regard to a wide range of indicators corresponding to social well-being, such as income inequality, educational opportunities, gender equality, health and nutrition. The contribution that ISID could make to youth empowerment through skills development and youth entrepreneurship is now widely recognised.

Similarly, environmental sustainability is also central to ISID. UNIDO promotes Green Industry and the use of clean technologies in industrial production; greater resource and energy efficiency; and improved water and waste management. Not only do these measures reduce harmful emissions and waste, but they also offer a significant potential for increased competitiveness and employment opportunities.

ISID also prioritises creating shared prosperity. This means that the benefits of growth must be inclusive if they are to improve the living standards of all women and men, young and old alike. Employment opportunities, particularly in the industrial and agro-industrial sectors, must be available to all members of the workforce, thus building greater prosperity and social cohesion.

As we approach the end of the Millennium Development Goals (MDG) framework in 2015, the international community has been reflecting on how best to address outstanding challenges. Although the MDGs achieved some remarkable successes, for example in terms of halving extreme poverty and increasing access to education and sanitation, much still remains to be done in order to achieve “the world we want”.

The post-2015 development agenda currently being discussed by the international community aims to address the many development issues that still need to be resolved. The Open Working Group, which was tasked with formulating the Sustainable Development Goals (SDGs) that will be at the core of the post-2015 development agenda, has recognised the importance of inclusive and sustainable industrialisation by including it as one of the 17 Goals it has proposed, clustering it in Goal 9 with resilient infrastructure and innovation.

Given the ambitious scope of the post-2015 development agenda and experience gained over MDGs, the focus of international deliberations has now shifted from the determination of the SDGs to addressing the means of implementation.

Recognising the budgetary constraints imposed by the prolonged period of stagnant growth and recession experienced in many countries, the recent report of the International Committee of Experts on Sustainable Development Financing acknowledged the necessity of mobilising alternative resources for the implementation of the SDGs, including those of the private sector.

UNIDO has already worked extensively on securing greater engagement from private industry in international development, and over the past year was honoured to have been selected to co-lead the United Nations System’s consultations on engaging with the private sector. As the organisation mandated to promote industrial development, which is quintessentially a private-sector activity, we are well-placed to partner with and promote private enterprise, and look forward to achieving increased progress in this field in the future.

Industrialisation has consistently transformed living standards throughout modern history. ISID is the next phase in its evolution. The overarching goal of the post-2015 development agenda is to eradicate poverty and improve the quality of life of the world’s poorest citizens.

This is a challenge which UNIDO is well-placed to meet in partnership with governments, the global development community, business and civil society.

Edited by Kitty Stapp

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