UNIDO DG Yumkella: UNIDO and U.S. Share Common Vision

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TAGS: KUNR ETRD EIND EAID UNIDO UNDP UNEP AORC KGHG
SUBJECT: UNIDO DG Yumkella: UNIDO and U.S. Share Common Vision


1. SUMMARY. The U.S. and UN Industrial Development Organization
(UNIDO) share common philosophies and visions when it comes to
"greening" industry, improving the developing world's trade capacity
and access to markets, and environmental sustainability, according
to Director General Yumkella. In a September 17 introductory
meeting with Ambassador Davies, Yumkella sought to link his own
vision for UNIDO with the lessons he learned as a result of U.S.
withdrawal in 1996, and to reassure the U.S. that UNIDO was a leaner
and more effective organization. In addition to underscoring
UNIDO's complementarity with U.S. economic and energy priorities,
Yumkella noted the dominant role European member states play with
regard to the Organization's policy and program initiatives.
Yumkella once again expressed his desire to see the U.S. at the
December General Conference (GC) and also offered to provide UNVIE
with briefing sessions on UNIDO's program pillars. Ambassador
Davies, indicating that the U.S. was interested in learning more
about UNIDO, welcomed the offer for briefings and confirmed
Washington was considering Yumkella's GC invitation. UNVIE
continues to recommend the U.S. attend the GC as a formal observer,
with UNVIE working-level officers representing the U.S. END
SUMMARY.

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DG's Vision for UNIDO Shaped
by U.S. Withdrawal
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2. On September 17, Ambassador Davies met with Director General
Kandeh Yumkella in the DG's office. This was the first time since
the U.S. withdrew from UNIDO in 1996 that an UNVIE ambassador has
met the UNIDO DG in a formal capacity.


3. Yumkella greeted Ambassador Davies enthusiastically, stating
that "it has been my mission for the past three years to get the
United States to say, 'we are curious about what UNIDO is doing, and
want to know more.'"


4. Yumkella provided Ambassador Davies with a background snapshot
of UNIDO since 1996, through the lens of his personal experience
with the organization. He emphasized that his vision for UNIDO was
directly influenced by the lessons he learned after U.S. withdrawal.
Arriving at UNIDO just as the U.S. and other major powers were
leaving due to UNIDO's bloated mandate and ineffective assistance
programs, Yumkella watched as the remaining member states took UNIDO
"into receivership" and forced the organization to cut staff and
projects, reviewing UNIDO's mandate and budget "line by line."
While in Nigeria from 2000-2003 as UNIDO Regional Director, Yumkella
stated he spent much of his time contemplating whether UNIDO was
actually relevant and worth saving. It was in Nigeria - a country
which serves, he says, as "a microcosm of the challenge of
possessing wealth but no management ability" - that Yumkella began
to identify the three areas in which UNIDO could play a significant
role. He pointed to Nigeria's urban water pollution, its lack of
private sector development, and its need for increased private
enterprise access to international markets through adherence to
international quality standards, as fairly universal challenges
throughout the developing world. Yumkella described how he then
transformed these identified needs into a broader framework for
UNIDO. This framework now comprises UNIDO's three current pillars:
Environment and Energy, Trade Capacity Building, and Poverty
Reduction through Productive Activities.


5. Yumkella shifted gears and assessed UNIDO's current management
situation, emphasizing the results of its reforms and his own
accomplishments over the past four years. Since 1993, Yumkella
explained, UNIDO's staff has been reduced from 1400 to less than
700, while increasing its operations on the ground. Further, as one
of the four major implementers of the Montreal Protocol, UNIDO is
also ranked the best in terms of assistance implementation.

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DG: EU Dominates UNIDO
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6. Much of UNIDO's work, Yumkella said, is driven by European Union
(EU) initiatives (EU countries provide a significant portion of
UNIDO's resources). Yumkella predicted that cooperation with the EU
could double in the next four years, and will be focused on the
current European priorities of eco-efficiency (for example,
optimizing industrial water use or cutting industrial emissions) and

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greater adherence to international product quality standards
(whether government or wholesaler imposed). Yumkella also reported
that European countries are increasingly interested in using UNIDO
as a vehicle to improve developing nations' "traceability" standards
- the ability to trace a product's inputs back to original sources.
For example, with Swiss, Italian and Nordic countries' assistance,
UNIDO has started a pilot program in Asia to improve the ability of
that region's exporters to meet international product quality
standards - and thus acquire increased access to the EU market.

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DG: UNIDO's Future Aligns
with U.S. Priorities
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7. Turning to the next four years, Yumkella noted his role in UN
energy and climate change initiatives (such as chairing UN Energy)
and highlighted his desire to see more work in the area of poverty
reduction. What UNIDO needs, Yumkella asserted, is "patient
capital." For example, developing countries need to improve supply
chains in agribusiness (where Yumkella asserts that as much as 20
percent additional wealth could be created via modern systems),as
well as small and medium sized enterprise expansion. In order to do
this, Yumkella opined, UNIDO needs partners like the U.S. who share
such visions.


8. Yumkella reiterated his belief that all three UNIDO pillars are
interrelated. He pointed to past and current UNIDO efforts to
"green" industrial practices, and noted that like the recent U.S.
economic stimulus plan, and its "80 billion dollars for green jobs"
UNIDO was finding ways to simultaneously protect the environment and
widen the job market. Yumkella also hailed the Millennium Challenge
Corporation (MCC) as a great example of how, consistent with UNIDO's
approach, integrated interventions done right can tangibly reduce
poverty. Like UNIDO's poverty reduction pillar, Yumkella said MCC
is "really a wealth creation program," and serves as just one more
example of where U.S. and UNIDO philosophies converge. Finally,
Yumkella pointed to Africa, which, he says, will have a population
of 1.4 billion by 2030 - half of whom will be located in urban
areas. Without jobs, a healthy urban environment and access to
sustainable economic growth, Yumkella warned of a rise in regional
instability. UNIDO, he concluded, can be an important partner for
the U.S. in ensuring political and social stability by providing for
sustainable economic development.

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DG Extends Invite to General Conference,
Offer to Host Informational Briefings
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9. Yumkella presented Ambassador Davies with two invitations.
First, he reiterated his desire to see the U.S. attend the December
GC as a formal observer. Second, he proposed that his staff provide
UNVIE with one hour sessions on each of UNIDO's three program
pillars. Yumkella invited Ambassador Davies to attend these
meetings, and for UNVIE to ask hard questions and "put our feet to
the fire." Ambassador Davies thanked Yumkella for the chance to
meet further, and promised to relay the GC invitation back to
Washington.

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COMMENT
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10. By emphasizing the management and program successes of UNIDO,
and by showing how his own thinking on UNIDO's proper role was
directly and positively affected by the U.S.'s withdrawal in 1996,
Yumkella sought to characterize UNIDO as a force for private
enterprise growth, energy sustainability, and long term social and
political stability - all of which he believes are in line with U.S.
priorities. And by repeatedly highlighting how European countries
are using UNIDO to improve developing world access to the European
economic market, Yumkella pressed the point that the U.S., too,
could benefit from greater involvement in UNIDO activities.


11. We have been careful to temper UNIDO hopes for any near term
shift in U.S. policy on membership. Nevertheless, UNVIE reiterates
its recommendation that the U.S. should participate at the December
GC at the working level. We will report on UNIDO's program pillar
presentations, and expect these will provide the U.S. with a chance

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to deepen our knowledge of the organization's track record and
potential. END COMMENT

DAVIES