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)

Industrial infrastructure in Pakistan's Khyber Pakhtunkhwa province is crumbling, as militancy drives investors and owners away. Credit: Ashfaq Yusufzai/IPS

By Ashfaq Yusufzai
PESHAWAR, Pakistan , May 15 2014 (IPS)

Already saddled with a veritable catalogue of crises, Pakistan’s largest province, the Khyber Pakhtunkhwa (KP) now finds itself on the verge of industrial collapse, as extortion and kidnappings drive away all prospects for production or employment.

Sharing a border with the country’s Federally Administered Tribal Areas, or FATA, the KP has long borne the brunt of terrorism, its mountainous terrain providing a perfect refuge for insurgent groups that residents and officials say are making life impossible for ordinary people.

According to officials from the KP Chamber of Commerce, a third of all factory owners have received threats from militants, who demand huge sums of money in exchange for the freedom to operate a business. Those who have not been bankrupted by the enormous bribes have packed up shop and migrated out of the province altogether, leaving over 100,000 people jobless.

Zahid Shinwari, president of the KP’s Chamber of Commerce and Industries, told IPS that the departure of wealthy industrialists has created “an extremely precarious” situation in the region, with a total of 2,200 industrial units closing down as a direct result of extortion by militants identifying themselves as members of the Taliban.

“People are shifting their industries and investment to safer places like Lahore, Islamabad and Faisalabad,” he said, adding that police have a hard time tracking the culprits who flee to FATA, Pakistan’s semi-autonomous tribal region in the northwest, which offers easy passage into neighbouring Afghanistan.

From Subtle to Shocking

Unable to make the many payments demanded of him, Rasool Shah, a KP resident and industrialist, closed down his marble factory in September 2013.

“We had to pay money to several groups, which was not possible for us,” he told IPS. “One group received 100,000 dollars per month while another was demanding double that amount. We were suffering severe losses.”

The same is true for most of the 300 marble-manufacturing factories in the region, the bulk of which have closed down or transferred elsewhere.

None of the districts in the province have been spared. Of the 300 industrial units in the Gadoon Amazai Industrial Estate in the Swabi District, 200 have been non-operational for the past year, according to Shah.

The climate of terror has also created a dearth of trained workers and technicians, who are finding better opportunities in places like Dubai where they can exchange their skills for large salaries.

Threats range from subtle to shocking, residents say.

Usually, the militants start out by writing letters to factory owners demanding specific sums of money. If the targets refuse, they or their family members are kidnapped and the insurgents then demand a ransom of between 100,000 and one million dollars.

Earlier this year, on Feb. 16, militants threw a hand grenade into a factory located in the Hayatabad Industrial Estate when the owner refused to pay protection money. The very next day he closed down his match factory, following in the steps of the province’s roughly 20 match-manufacturing units, all of which had utilised local raw materials, hired local labourers and brought much-needed foreign exchange into the province.

According to Shinwari’s estimates, these factories had brought in roughly 800 million dollars per year.

Muhammad Anwar, who owns a pharmaceutical-producing plant in Peshawar, says lodging police reports about the threats and kidnappings is futile.

“If we inform the police, the militants kill the person in their charge. So people prefer to settle the ransom and secure the release of their loved ones,” he told IPS.

He added that nearly half of the 100 pharmaceutical factories in the region have ceased all operations.

Textile production has also suffered. Anwar’s friend and textile factory-owner Sharif Gul was making monthly payments to numerous militant groups until he decided two years ago to shift his entire operation to Faisalabad, a major industrial metropolis in the Punjab province. Prior to the influx of militants, some 22 textiles units in KP had earned the province annual revenues of roughly 130 million dollars.

Planning for the Future

While some are lamenting the demise of the region’s industrial infrastructure, others are forging ahead with plans for the future.

Police Chief Nasir Durrani told IPS his province had plans to establish separate police stations in each of the three industrial estates to protect them from terrorists.

“We are also installing devices to trace telephone calls from militants, so we can arrest them.”

Durrani says the police have held meetings with industrialists to put security measures in place, and stem the flow of business to other provinces. “The protection of industrialists is a high priority for the government because they [contribute heavily] to the province’s income,” he added.

Another strategy on the table is to expand the police force by hiring more people and deploying them solely to industrial areas, which will simultaneously increase employment and improve security.

Khyber Pakhtunkhwa Information Minister Shah Farman told IPS the government intends to establish six more industrial zones to boost production of plastic, steel, oil, pharmaceuticals, chipboard and ghee – all of which are plentiful in the resource-rich province.

Alarmed by the wave of migration – over a million workers have left the province since 2009 – Farman also vowed to create a “congenial atmosphere for employment” by refusing to bow to the demands of terrorists.

Despite being the country’s third-largest province, KP boasts a mere seven-percent share of industrial employment. “This has to be improved,” he stressed. In comparison, provinces like Punjab have recorded 60 percent industrial employment.

(END)