United Nations Industrial Development Organization

The United Nations Industrial Development Organization (UNIDO) was established in 1966, with headquarters in Vienna, Austria. UNIDO became a specialized agency of the United Nations (UN) in 1985. As a result, UNIDO has its own constitution and member states, and a regular budget. UNIDO works toward helping the developing countries in alleviating poverty and creating wealth through the development of the manufacturing sector.

The origin of UNIDO can be traced back to 1959, when the Industrial Section of the UN was separated out as a branch. Subsequently, the Industrial Section became a separate center as Industrial Development Center in 1962. The focus of the Industrial Development Center was on discussions and information dissemination. However, it was felt that this role needed to be broadened to include operational activities that could directly affect the industrial development of developing countries. As a result, UNIDO was created by Resolution 2152 (XXI) of the UN General Assembly in 1966. In the following years, several developing countries as well as intragovernmental committees suggested setting up a specialized agency. During the second general conference of UNIDO held in 1975 in Lima, Peru, the Lima Declaration on Industrial Development and Cooperation was adopted. The Lima Declaration expected developing countries to have a 25 percent share of global industrial output by 2000. To achieve this target, it was recommended to the UN General Assembly that UNIDO be converted into a specialized agency. However, industrialized countries had some concerns in making UNIDO a specialized agency, which led to considerable delay. It was only in 1985 that the formalities of converting UNIDO into a specialized agency were completed.

During the latter half of the 1990s, UNIDO faced challenges to its survival as many developed countries, which were also donors, quit the organization on the grounds that the organization was not run efficiently. It was also felt that with the end of the Cold War, there was no need for such an organization as industrial activities could be better carried out by the private sector. Between 1995 and 1997, several countries including the United States, Canada, Germany, the United Kingdom, and Australia withdrew from UNIDO. With a shrinking budget, UNIDO had to reform itself and find niche areas to create a place for itself. UNIDO streamlined its activities to make sure that there was no overlap with other multilateral agencies and started offering them as a package. The reforms did pay off, as UNIDO was ranked as the best specialized agency of the UN in a study by the UK Department of International Development in 2005. Some of the countries such as the United Kingdom and Germany have since rejoined UNIDO; however, the United States is still out of the organization.

UNIDO Activities

As of 2007, UNIDO had a membership of 172 states. Every two years, UNIDO holds a General Conference, which is its supreme governing body. The General Conference decides on policies and budget issues and appoints a director general every four years. UNIDO has two important organs—the Industrial Development Board with 53 members and the Program and Budget Committee with 27 members. These members are elected during the General Conference. UNIDO also has an Evaluation Group, which works as an independent evaluator of UNIDO projects. The Evaluation Group is under the Bureau for Organizational Strategy and Learning, which is the strategic think tank of UNIDO. Different UNIDO organs work [Page 1649]based on the philosophy of result-based management and result-based budgeting.

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