Tough Times Ahead for UNIDO Sans Transparency

Analysis by Ramesh Jaura

BERLIN | VIENNA (IDN) – As the UN Industrial Development Organization (UNIDO) celebrates its fiftieth anniversary, Director-General LI Yong finds himself confronted with a fresh exodus of western member states.

Nine – UK, France, Portugal, Belgium, Lithuania, Canada, Australia, New Zealand and the United States – have pulled out over the last 10 years. Denmark and Greece are scheduled to quit in January 2017 and with the Netherlands expected to follow suit, the number of UNDIO members would be reduced to 167.

UNIDO membership might in fact shrink to between 157 and 159 by 2019, if 8-10 developing countries, in addition to Brazil, decide to pull out apparently “because the cost of membership outweighs any benefit against the backdrop of actual or potential withdrawal of many donor countries”, according to diplomatic sources in Vienna.

Whereas UNIDO’s mission, as described in the Lima Declaration adopted at the fifteenth session of its General Conference in 2013, is to promote and accelerate inclusive and sustainable industrial development (ISID) in “developing countries and economies in transition”, its maxim for the fiftieth anniversary is: Together for a Sustainable Future within the framework of the 2030 Agenda for Sustainable Development.

The focus of Goal 9 is to ‘Build Resilient Infrastructure, Promote Inclusive and Sustainable Industrialization and Foster Innovation’.

While the planned and projected withdrawals might appear to call into question UNIDO’s “sustainable future”, it is not the first time that the Organization finds itself in a critical situation.

In 1997, when Mauricio de Maria y Campos of Mexico (1993-1997) was UNIDO chief – followed by Carlos Alfredo Magariños of Argentina (1998-2005) – the Organization was in fact faced with the risk of closure: Not only because some member states felt that industrial development could be supported more effectively and efficiently by the private sector. But also because, according to a report, “there were question marks over how some of UNIDO projects were run”.

Question marks

Diplomatic sources told IDN on condition not to be identified that such “question marks” are real reasons behind the forthcoming withdrawals by western nations that have indicated cash crunch. “The fact is that when they refer to budgetary reasons they steer clear of being accused of imposing conditionalities,” those sources said.

“Why should these countries leave UNIDO but stay put in several other organisations which they could very well leave,” remarked another diplomat who did not want to be named.

“There is something within UNIDO that needs be tackled. In fact, some of the developed countries are incensed that we from developing world do not pay attention to those reasons – for example China perceivably using UNIDO as strategic tool in the current global context,” the diplomat added.

Director-General LI held important government positions in Beijing before he assumed office at the UNIDO in July 2013. “The China factor and the way UNIDO is controlled and manipulated by a few are too difficult to counter openly,” said the diplomat.

“In fact, when a country mentions reasons other than financial, UNIDO Secretariat comes back, offering certain proposals to that country. In the recent past before direct external recruitment was almost frozen except in the case of Chinese candidates, this extended even to offering director level job to one of the candidates from that country, whose application had been long pending there.”

A talking point

At most diplomatic receptions in New York and Vienna, a talking point among Ambassadors is that UNIDO is packed with the Chinese staff. This has been done in two ways: appointing new officers from China to key positions in the Director-General’s bureau; and promoting the Chinese who are already serving in the UNIDO to other positions.

Most of such issues were tabled by the Chair of G 77 Vienna Chapter, Ambassador A.L.A. Azeez, in 2014. The G77 Vienna chapter Chair had insisted a number of times at the meetings of Programme and Budget Committee and Industrial Development Board, that for UNIDO to be credible and to inspire confidence among its members and donors, it needs to undertake serious reforms – reforms, first and foremost, at the senior management level.

G77 comprises 134 developing countries, including China.

Summing up the views of members of G 77 on certain concerns, which had led to many developed country members beginning the process of withdrawal from UNIDO, he had stated: “Within UNIDO there cannot be a dual track process of recruitment where candidates from most countries have to follow the normal process whereas certain others are taken in through a preferential route.”

In the same manner, he added: “Country offices or regional offices cannot be established, closed, or merged at whim and fancy citing financial reasons. There is no reason why UNIDO should intuitively react to financial crunch by cutting down staff at field level and closing country or regional offices.”

Evaluation system

The then chair of G 77 in Vienna had also argued in favour of “a strengthened evaluation system headed by a director with independent capacity, not one at a junior level subject to the control of the office of DG or any other director”. Evaluation was an independent function which was carried out professionally by a dedicated division and a director. This helped to point out the inefficiencies in programme implementation and lack of goal orientation.

The person to hold the post of Director of Evaluation was a woman of Swedish nationality. An active female diplomat based in Vienna commended her for “doing a great job”.

After her retirement, the post was attached to DG’s office, with a lower ranking person appointed to carry it out under the control of DG and a Managing Director. “That office now can only rubber stamp what DG LI does. It was sad that Sweden was among strong advocates for evaluation in UNIDO, but seems to have compromised their stand of late.”

Also the external relations directorate, an Ambassador from a South American country suggested, should have officials who have experience in diplomacy and public relations. “Donors should be actively engaged, and not as and when needed as they currently are.”

Another Ambassador told IDN on condition that he not be identified: UNIDO has been projecting itself as the guardian of SDG 9. “Since it is reform-resistant and is subject to increasing Chinese influence, many countries, including developing countries, appear to think it would be more prudent to promote SDG 9 at national level with direct assistance from countries that are in a position to extend assistance than having UNIDO coordinate such assistance at a higher cost.”

Doing the opposite: UNIDO often does totally irrelevant things to prove that it delivers effectively on its mandate. For instance, under its programme of ensuring water efficiency, UNIDO entered into partnership with HEINEKEN in 2014 under its current Director-General Li, whereby it agreed to work towards helping reduce water use in HEINEKEN breweries. This incensed some of the Islamic countries and others, which argued that UNIDO promotes sale of alcohol.

It was not co-incidental that Saudi Industry Ministry decided to withdraw from UNIDO, but was persuaded by the then Chair of G 77 Vienna Chapter, through the then Ambassador of Saudi Arabia, that Saudi withdrawal would unnecessarily spark a spate of withdrawals from developing countries.

Further, influence paddling was not uncommon by states other than Western. For example, Israel wanted to have a significant presence within the secretariat. There was widespread fear that Palestine may target UNIDO for membership next. The country was given a professional post in an important directorate, which was responsible for “external relations”.

There is also concern in UNIDO about pitting developing countries against the developed: “Senior UNIDO officials stoke, and play on, emotions that the Organization belongs to developing countries and therefore the developing countries should fight for it. What is called for is accountability from UNIDO when its senior officials and vested interests advance their agenda in a non-transparent manner,” said another diplomat.

All this does not bode well for the Organisation. An unconfirmed report making the rounds in Vienna for some time now is that around 8-10 developing countries are likely to leave UNIDO in the coming years, despite all efforts made within G 77 to take a common position against future withdrawal of western countries. [IDN-InDepthNews – 27 June 2016]

IDN is flagship agency of the International Press Syndicate.

Photo: UNIDO DG LI Yong. Credit: UNIDO.

2016 IDN-InDepthNews | Analysis That Matters

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