2015
Regional Coordination Mechanism (RCM)
Issues Brief for the
Arab Sustainable Development Report
Industrialization and
Innovation in the Arab
Region
Author: Azza Morssy ([email protected])
Chief, Arab Programme, Regional Programmes and Field Representation Branch, Industrial Policy, External
Relations and Field Representation Division
Reviewed by: ESCWA Economic and Social Commission for Western Asia
UNEP United Nations Environment Programme
UNHABITAT United Nations Human Settlements Programme
Disclaimer: This issues brief was prepared as a background document for the forthcoming Arab Sustainable
Development Report. The views expressed are those of the authors and do not necessarily reflect the views of
the United Nations. Document issued as received, without formal editing.
1|P age
1. Progress and Trends
UNIDO is facilitating innovation across the Arab region to improve the climate for innovation in Arab countries
and to enable them to make better use of their innovation potential by addressing their specific needs and
areas of weakness and fostering the areas of strength.
Innovation is a systemic rather than a linear process, involving many different players and often happening
over an extended period of time. Well-functioning innovation systems ensure the free flow of information
across the interfaces between researchers, entrepreneurs, investors, public authorities and many other actors.
Such systems may have technical components but are, above all, networks of individuals. For this reason,
closeness is an important feature of most innovation systems.
In the context of the Arab Bureau, innovation is considered as one of the most important driving forces for
economic wealth. It is not just related to a few high-tech industries but a major factor of any industry or
economic sector. It is more than simply the initial 'big idea' or a product or services that result from the idea.
Innovation is more accurately described as a process through which knowledge is created and translated into
new products, services or processes of the private and the public sector.
UNIDO Arab Bureau continues to consider the private sector as a key enabler and implementer of the new
development agenda. Such structural transformation for moving to poverty eradication and sustainability will
be reinforced by a change in how businesses do business and how government innovative industrial policies
can prove changes to social and environmental key elements.
On a general note, transnational cooperation should not overlook the fact that regional and national Innovative
policies are of a highly competitive nature. For this reason, transnational cooperation in the field of innovation
will have to address existing limitations to the willingness to freely exchange in-sights and knowledge.
The common goal is to overcome thinking in terms of national/regional competitiveness in order to strive for a
more competitive and innovative approaches. In the joint striving for innovation, the driving force should be
learning from the GCC diversity. The common goal should be to complement national/regional policies in those
areas where it proves to be most effective.
In the field of innovation transnational cooperation can be especially fruitful in the following cases:
Issues are affecting a clearly defined transnational geographical area across national and regional borders such
as the coordination/harmonization of innovation policies and actions. The transnational orientation of
innovation systems, the development of transnational innovation clusters, the development of transnational
educational and training networks of polycentric areas Common issues of interest such as innovative
approaches to the promotion of lagging behind sub- regions, capitalization on approaches to technology
transfer and on experiences in supporting SMEs, the establishment of effective links between public
administration, research and the private sector, new approaches to addressing brain-drain and improving
human capital.
For industrial development to target sustainable development goals; UNIDO Arab bureau considers the
following:
•
Investment in sound infrastructure; both engineering and technical skills;
2|P age
•
•
•
•
•
•
Industrial entrepreneurship and enterprise formation;
Capacity building for institutions that support industrial production;
Technological upgrading and value addition; ensuring favorable market access for industrial products
and processed commodities of developing countries;
Re-industrialization as relevant; promoting new industries that supply goods and services for lowincome consumers as well as environmentally sustainable products and services;
sustainable industrial development based on energy- and resource-efficient and environmentally
sound industrial technologies including the phase out of harmful chemicals, waste and pollution, and
minimizing material use and maximizing material recovery in industry with technology cooperation
and transfer to support such development;
Inter-linkages to other focused areas with SDGs include: poverty eradication, education, employment,
economic growth, infrastructure, energy and sustainable consumption and production.
UNIDO’s approach toward post 2015 agenda continues to take into account the specificity and changing
needs of each sub-region.
In the Gulf sub-region, UNIDO responds by increasing diversification through the promotion of investment
environment, new competitive technologies, technology parks and innovations, as well as supporting each
country in achieving the following: creating and enhancing productive employment and sustainable economic,
industrial and social development; development of local entrepreneurship including women (Bahrain ITPO),
various promotion of higher level of services to support manufacturing sectors e.g. Kuwait as well as the
strengthening of regional institutions (GCC, GOIC) sub-regional programme for accreditation, standardization
and quality as a main driving force in facilitating the participation of GCC countries in the global economy.
On the other hand, livelihood and recovery programmes seek to respond to the sustainable goals and
objectives in some Mashreq countries, which are still suffering from wars and conflicts (e.g. Iraq and Palestine),
noting that such political uncertainty is directly and indirectly affecting all countries of the region. With regard
to sustainable development, productivity and investment growth, the key parts of the development process in
this sub-region are the private sector, manufacturing businesses and the small and medium scale industries
(SMEs). These are major sources of income, jobs creation and economic growth. In this context, the main
priorities for this sub-region in line with SGs target stable macro-economic climate, suitable environment for
business development, need to ensure both supply of food, water and sanitation, health care, and
employment, the rehabilitation of industrial enterprises and the capacity building programs in order to fortify
the continuum between the relief, rehabilitation, and sustainable development.
In the Maghreb states, UNIDO continues its efforts toward the sustainable development objectives through
productivity growth and ensuring a performing economic policy at national and sub-regional level in order to
achieve poverty reduction/alleviation and creation of income and jobs. The 2011 Arab uprising shifted UNIDO’s
intervention toward further integration within the work of the United Nations Development Group’s (UNDG)
Regional Strategic Action Plan on Young People.
While the Arab LDCs continues further in light of political instability to face drastic economic stagnation linked
with insufficient development of the industry coupled with infrastructure requirements and, in particular,
manufacturing of agribusinesses to overcome abject poverty as well as to move out of the cycle of low income,
low investment and low growth in particular entrepreneurship development (with emphasis on rural and
3|P age
women entrepreneurship), networking and effective clustering among SMEs, strengthening of agro-based and
agro-related industries, and developing renewable sources of energy for productive use.
The Arab world is at dynamic crossroads and has enormous opportunity and a great responsibility to carry on
the undertaking and momentum of the Millennium Development Goals beyond 2015. A new, inclusive, multistakeholder development agenda is emerging, to be framed by a new set of goals and targets, the Sustainable
Development Goals. Building an inclusive and sustainable knowledge-based society is one of the most
important goals of the global development. To that end, a new development agenda is currently being defined
to guide world leaders in addressing social, economic and environmental priorities beyond 2015. Arab
economies seriously suffer from a growth deficit as a result of poor macro-economic management and the
failure to induce structural change and diversify into-sectors of high employment and value added.
Economic systems cannot be treated as stand-alone structures, without clearly defined national policy goals.
The selected strategy for Arab countries must address not only the mechanisms of growth and the root cause
for economic disparities, but also map out a national master plan with defined budgetary resources.
Political empowerment is itself both a trigger to and an outcome of sound economic policies. Without
citizenship rights and access to good services and opportunities as well as a dignified standard of living, there
can be no development, although there may be growth.
The overwhelming characteristics of Arab countries undertaking reform have been extreme gradualism and
carefulness, which have cost the region significant growth opportunities and contributed to the absence of a
consistent and sustainable development path.
The transformations in the Arab world that began three years ago had their roots not only in demands for more
voice and participation but also in a growing frustration with the economic environment where job
opportunities were few and connections seemed to be more important than merit in accessing the gains from
economic growth. Since then, governments in these countries have been pursuing country-specific agendas of
political and constitutional reform, but they have also had to with macroeconomic vulnerabilities, the effect, in part,
of a worsening international, regional, and domestic environment on private sector confidence and growth. The
near-term economic outlook continues to be challenging and subject to downside risk, and so the focus on
maintaining macroeconomic stability will remain a key priority for the coming year.
However, it is also important for these governments to embark on the bold reform agendas that will make for
more dynamic and inclusive economies, generate more jobs, and provide equal access to economic opportunity
for all segments of society.
Unless strong economic and financial reforms are implemented, a gradual economic recovery is notable
enough to bring a meaningful reduction in the region’s high rates of unemployment in the coming years,
particularly among women and youth The Promotion of Inclusive and Sustainable Industrialization (ISID), by
2030 raise significantly industry’s share of employment and GDP in line with national circumstances, and
doublets share in LDCs
The promotion of ISID is a very clear mandate given by our Member States at the General Conference of
UNIDO in Lima, Peru, last December. Since then, we have been implementing the new mandate in various
ways, including the organization of two forums in 2014.
4|P age
Strategic partnerships are the best response to increasingly complex development challenges. There is no
single development strategy and no single actor that can address all of the social, environmental and economic
challenges we are facing. 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.
UN Secretary-General Ban Ki-moon said at the UNIDO forum's opening 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."
UNIDO will plan for several pilot partnership programmes for inclusive and sustainable industrial development
in the Arab countries: The creation of the partnership approaches that inclusive and sustainable
industrialization would help the country development; The Arab region is looking forward to enhancing its
economic transformation and that such a partnership model will help implement this vision; Increase the
access of small-scale industrial and other enterprises, particularly in developing countries, to financial
services including affordable credit and their integration into value chains and markets; Realizing the
economic potential of the Arab Countries in transition lies first and foremost in the hands of countries’
governments. But the international community, including UNIDO, can help to reflect the benefits of paying
sufficient attention to the importance of the growing of socioeconomic balances and facilitate equal access to
economic opportunities.
Arab transitions have thus prompted us to step back and rethink our approach to economic policy
recommendations for the countries undergoing transition. While we have been actively engaged in all
transitioning countries, with a focus on macroeconomic stabilization and policies in support of in d u s t r i a l
development, we have to date not laid out our comprehensive view on the macroeconomic and structural
policies that we see as essential for safeguarding macroeconomic stability and putting in place the right
conditions.
The complexity and interconnected nature of development challenges making up the post-2015 agenda call for
an approach which leverages multi-stakeholder partnerships and innovative, integrated solutions. As
facilitating, crosscutting technologies, information and communication technology can serve as the backbone
of such solutions. Poverty alleviation, the first of the proposed SDGs, continues to be a primary focus area and
is thus the mandate for all stakeholders working towards sustainable development post-2015.
The Arab region has priorities for the post-2015 agenda from a regional perspective. The four Arab regions
prioritize economic diversification and employment, inclusion and social protection and the building of
resilience to economic and environmental shocks. They all stress the importance of democracy, accountability,
human rights, peace, security and conflict resolution, and the need to re-examine international governance
mechanisms.
5|P age
The four key priorities for all regions are:
•
•
•
•
Productive employment and decent work generation;
Tackling inequality;
Environmental sustainability; and
Democratic governance.
Energy Efficiency
Improving industrial energy efficiency is one of the most cost-effective ways for developing countries to meet
their increasing energy needs with the least impact on the environment. It addresses challenges as diverse as
climate change, energy security, industrial competitiveness, human welfare and economic growth. It is
projected that developing countries will account for over 90 per cent of the growth in global industrial energy
demand from 2010 to 2035. Industry in developing countries shows the greatest potential for economic
efficiency improvements and cost savings, both within the traditional energy-intensive sectors and in light
industry, in particular, SMEs. Increased energy efficiency in SMEs would have a positive impact in terms of
lower final production costs, increased resources for investing in business development, including job creation
and, ultimately, greater competitiveness. Improved energy-efficiency thus reduces greenhouse gas emissions
from energy generation and use, materials extraction and processing, transportation and waste disposal.
Sustainable industrial energy strategies that include the adoption of renewable energy sources, as well as
energy efficiency, are therefore essential to address climate change and move economies onto a lower-carbon
path.
Supporting the development of an International energy Management Standard for
Industry
UNIDO has been supporting the development process of the international Management System Standard for
Energy ISO 50001 by raising awareness and ensuring that the issues and perspectives of industry, government
policy-makers and other concerned stakeholders in developing countries and emerging economies are taken
into consideration during the development of the standard. To that end, UNIDO has organized regional and
international meetings targeted to prospective standard users, policy-making and standards institutions and
experts to obtain inputs. Surveys on energy management practices in industry have also been carried out in
selected countries.
UNIDO’s Business Partnerships Programme
Making inclusive and sustainable industrial development a reality, together UNIDO promotes wealth creation
and global prosperity through inclusive and sustainable industrial development. We want every country to
have the opportunity to grow a flourishing productive sector, to increase its participation in international trade,
to improve its access to modern energy services and to safeguard the environment. As our objectives
increasingly align with those of the business world, we are collaborating with a growing number of private
sector partners and other key stakeholders.
Addressing these complex development challenges collectively has resulted in innovative and practical new
approaches that combine both development gains and business benefit to accelerate the achievement of these
shared goals. Indeed, there is a growing awareness among business leaders of the necessity of breaking with
old practices and embarking on a new path of more sustainable and more socially inclusive business. We are
6|P age
witnessing a strong commitment to action and a willingness to make the necessary adjustments even in the
face of economic constraints.
UNIDO stands ready as a partner to accompany businesses on this new path towards healthier societies,
flourishing markets and sound economic progress for the future well-being of the generations to come. We
understand that business is an instrumental partner to achieving global development goals.
In recent years we have stepped up our dialogue and collaboration with the private sector, financial
institutions and civil society in order to multiply the impact of our technical assistance by combining our
efforts, know-how, and resources. We are building a strong alliance with all relevant actors to reach the critical
mass for transformative change.
At this critical juncture we want to deepen our partnerships with strategic actors from multilateral agencies,
financial institutions and the private sector. Companies aiming at long-term success must ensure that their
operations are sustainable and responsible, creating lasting value – not just financially, but also socially,
environmentally and ethically.
There is growing evidence that principles and profits are not mutually exclusive. They can go hand in hand and
create competitive value additions. All UNIDO partnerships illustrate how social, environmental and economic
progress can foster competitiveness, business value and the long-term sustainability of business operations.
They can help meet the growing consumer demand for green products, make employees take pride in their
work and build markets of the future.
2. Analysis of Proposed SDG and Targets from an Arab Perspective
As part of its contribution to the recommendations for Private Sector engagement in the implementation of
Post-2015 Development Agenda, UNIDO continues to pursue the following:
Integration and Diffusion in Sustainable Development Goals: Learning from the Past, Looking into the Future.
As an outcome of the 2012 United Nations Conference on Sustainable Development (Rio+20), the post-2015
Development Agenda included two agendas: one on human well-being to advance the MDG targets and the
other on planetary well-being, which requires a safe “operating space” within the Earth’s life-support system.
In contrast to the MDGs, the Sustainable Development Goals (SDGs) are meant to apply to both developing and
developed countries and create a possibility for continuous improvement.
Empowered Youth, Sustainable Future, in Tunis, working with young people, particularly those who are in
need, is indispensable if we are to achieve sustainable human development.
In the Post-2015 Arab youth are demanding education, jobs, honest and responsive governments, and
participation in decision-making; they have innovative ideas and are willing to engage, even to take risks for
the causes they believe in. UNIDO is determined to play its part by strengthening its cooperation with young
women and men themselves, their own organizations, governments, civil society organizations, academia and
the private sector. Several projects will be implemented to enhance job creation and private sector
development.
7|P age
Cleaner and resource efficient production
Global industrial production and consumption are outpacing the renewal capacity of natural resources and the
capacity of governments to manage pollution and wastes. While industrial growth has helped raise millions of
people out of poverty in many countries in recent decades, it is evident that economic growth and urbanization
have not come without a price. This phenomenon is accompanied by inadequate or non- existent
environmental and urban services, including recycling systems, wastewater treatment and sewage systems,
drainage, water supply, sanitation, and solid waste management. Such deficiencies inhibit economic growth,
place further stress on natural systems, and damage public health and the investment climate. They also
constrain the potential of urban areas to fully contribute to economic growth. UNIDO has long recognized that
environmental issues must be addressed and cleaner production methodologies must be promoted at a
systemic level in industrial development. The promotion of resource efficiency requires a perspective and a
decision-making process that simultaneously considers both economic value and environmental sustainability.
Localizing the architecture for SMEs engagement
The Arab region believes that the support for SMEs can be enhanced through financing instruments, but also
through technology transfer and capacity building. Training, mentoring and knowledge – sharing platforms for
SMEs and micro-enterprises can be provided, often by larger companies in a supply-chain relationship.
Global Forums held by UNIDO led to highlighting the following
The UNIDO policy, framework and instruments at the national level pursue inclusive and sustainable structural
transformation in economy and industry. The importance of synergies between related fields, such as:
investment and trade policy, skills development and labor policies, science and technology, eco-industrial
policy, energy and resource efficiency and effectiveness, regional development policy, macroeconomic policy,
competition policy, and environmental policy.
Enhancing Partnerships
Dialogue continues to be explored so to reach SDGs via a strengthening and creation of new partnerships
“Inclusive Sustainable Industrial Development (ISID) Forum I and II with two pilot countries in 2014”. Such
relationship between governments and business according to UNIDO would set the rules of engagement and
responsibilities for partnership initiatives. Mostly targeting the Public-Private Partnerships considered as vital
to achieve the objectives of international development frameworks. Neutral and independent bodies may be
required to assist in the implementation of public-private partnerships.
3. Major Success Stories
UNIDO Integration of women and youth in industrial development via productive activities and
entrepreneurship skills toward reducing poverty: UNIDO’s agribusiness and rural entrepreneurship
development programme promotes sustainable and inclusive business opportunities for the rural poor through
agribusiness and entrepreneurship development.
It seeks to add value to agricultural commodities at various points along the value chain, linking input
providers, farmers, traders, processors, providers of logistic services, distributors and retailers (Morocco,
Tunisia, Iraq, Sudan). The empowerment of young entrepreneurs and the creation of employment
opportunities for women is a priority for UNIDO’s Investment Promotion Programme for Egypt, Iraq and
Lebanon. As a result of the programme, youth and employment migration policies and programmes will be
8|P age
better adapted to fit labour market trends and the specific needs of unemployed university graduates and
unemployed low skilled youth.
Solutions for shared prosperity: Suggestive Programme Environment – Relevant
Initiatives
All programmes are expected to take the outcomes of past initiatives into consideration as far as these
initiatives are relevant to the thematic focus of the programmes. Programmes are expected to specifically
consider synergies and complementarities with other Territorial Cooperation Programmes, including other
transnational programmes (e.g. GCC, LDCs, Maghreb, and Mashreq) and interregional cooperation (IVC) for the
exchange of experience and with objective investments.
Potential Partners
Potential partners are all national, regional, local decision-makers and bodies in the fields of education,
research, knowledge-transfer, technology, labour-market, regional development, such as local and regional
public authorities, regional development agencies, chambers of commerce, SMEs; universities, tertiary
education, associations, technology transfer institutions; R&TD facilities, research institutions, regional
international centers of R&T D excellence; regional innovation agencies, incubator houses; education and
training centers, labour market services, social partners employers’ associations, trade unions, as well as all
population groups, which are affected by the Areas of Intervention concerned.
The efficient use of resources, the establishment of cleaner production centers and green industry for job
creation towards a sustainable economic paradigm: from labour to resource productivity, UNIDO’s cleaner
production programme has expanded to more than 50 countries. In 2010, UNIDO and UNEP formed a network
to promote the adaptation and adoption of resource-efficient and cleaner production (RECP) in developing and
transitional economies
Post crisis interventions
UNIDO continues targeting Human Security in conflict and post crisis areas via Rehabilitation and Industrial
Reconstruction programmes: e.g. Sudan vocational training centers income generating opportunities; Iraq
Diary and Palm sectors. UNIDO continues assisting its national partners in the Arab region for mobilizing and
applying the means necessary to meet these challenges. UNIDO’s mandate for post-crisis interventions is “to
secure, restore and develop productive capacities through mitigating risks, threats and vulnerabilities in
livelihoods and productive activities.” E.g. Yemen, Libya, Iraq etc.
GEF: Strategic Programme for West Africa (SPWA)
The energy systems of the Economic Community of West African States (ECOWAS) are facing the interrelated
challenges of energy poverty, energy security and climate change mitigation. The region, with around 300
million inhabitants, equivalent to roughly one- third of Africa’s population, has one of the lowest modern
energy consumption rates in the world, as only around 8 per cent of the rural population has access to
electricity services. The urban electricity systems are in crisis due to the gap between growing demand, low
and inefficient generation capacities, and limited capital for investment. Around 60 per cent of the electric
generation capacity depends on expensive diesel or heavy fuel oil. Apart from significant fossil fuel resources,
the ECOWAS region can rely on a wide range of untapped renewable energy and energy efficiency potentials,
but ECOWAS countries have yet to take advantage of this potential.
9|P age
UNIDO in cooperation with the Global Environment Facility (GEF) and ECOWAS launched the regional
programme to promote access to modern energy services, increase the use of renewable sources of energy
and improve energy efficiency in the industrial and household sectors in West Africa. The regional programme
promotes common energy markets, policies and financial mechanisms for decarbonizing the energy sector in
the subregion. The programme specifically aims at promoting synergies and public-private partnerships in West
Africa while yielding significant local and global environmental benefits.
The programme applies a holistic approach and assists ECOWAS countries in overcoming the existing barriers
to the establishment of renewable energy and energy efficiency markets. With a total budget of USD 57 million
(USD 17 million being implemented by UNIDO), the SPWA provides grant funding and technical assistance for
the promotion of investments, coordination, policy coherence, capacity-building and knowledge management.
The projects under GEF-SPWA will contribute considerably to increased energy security, energy access and the
reduction of greenhouse gas emissions in West Africa; they will also build a sound basis for up- scaling and
replication. Initial results include: a portfolio of 22 national and regional renewable energy and energy
efficiency projects which are under implementation (with a GEF grant of USD 39.86 million and around USD
468 million of co-funding); the 2013 adoption of the ECOWAS Renewable Energy and the Energy Efficiency
Policies; and the establishment of a Renewable Energy Facility for peri-urban and rural areas with 41 rural
projects totaling an overall volume of USD 3.5 million under execution. Based on this success, the Southern
African Development Community (SADC) and the East African Community (EAC) have requested UNIDO to
support the implementation of similar activities in their regions.
Strengthening agro-industries:
UNIDO’s agribusiness activities focus on strengthening the food processing sector in developing countries in
order to increase the availability of wholesome and nutritious food both for the local market by contributing to
national food security, and for international markets, in order to generate income and create wealth. With its
proven expertise and experience in designing and implementing programmes for the development of the agroindustries sector, UNIDO is ideally placed to lead partnerships at the national level and engage with value chain
actors and development partners.
10 | P a g e
Share of Agro-industrial sectors in MVA of developing and EIE
80
2002
2012
70
Sharein%
60
50
40
30
20
10
0
Emerging Industrial
Economies
China
Other developing
countries
LDCs
FIGURE 1 SHARE OF AGRO-INDUSTRIAL SECTORS IN MVA OF DEVELOPING AND EIE, 2002 AND 2012
NOTE: MVA=MANUFACTURING VALUE ADDED / EIE=EMERGING INDUSTRIAL ECONOMIES
UNIDO works with other development agencies to find innovative solutions to challenges facing the food
industries of its client countries. One particular area of focus is the development of value chains and
investment in agribusiness to enhance productive capacities and reduce post-harvest losses.
UNIDO’s agro-industry specialists are responsible for identifying and strengthening food value chains by
conducting gap analyses and designing programmes to facilitate access to technologies, business development
services, financing, markets and trade opportunities.
Accelerated Agribusiness and Agro-industries Development Initiative (3ADI)
As the agricultural sector remains the backbone of economic activity, employment and livelihoods in most
developing countries, strengthening it and adding value to agricultural commodities are instrumental to
enhancing food security, stimulating economic growth and reducing poverty in a sustainable manner.
In support of this goal, UNIDO designs and implements action-oriented technical assistance programmes and
provides integral policy support. Its interventions concentrate on several key pillars of agribusiness
development: upgrading entire value chains, strengthening technology, promoting innovative sources of
financing, stimulating private sector participation, improving infrastructure and facilitating market access.
Constraints are first mapped along the value chain of one or two key agricultural products identified by
national governments as priorities. UNIDO subsequently designs and validates, in close collaboration with all
stakeholders, robust interventions that promote value-addition in agro-processing, post-harvest handling,
supply chain management and trade promotion. UNIDO further assists beneficiaries in mobilizing the necessary
resources (finance, investment, technology, expertise, etc.) so as to contribute to the sustainability of its
interventions.
11 | P a g e
Share of the agro-industrial sectors in MVA of developing and EIE
Emerging Industrial Economies
China
Other Developing Economies
Least Developed Countries
80
Share in %
70
60
50
40
30
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
FIGURE 2 SHARE OF THE AGRO-INDUSTRIAL SECTORS IN MVA OF DEVELOPING AND EIE, 2002-2012
NOTE: MVA=MANUFACTURING VALUE ADDED / EIE=EMERGING INDUSTRIAL ECONOMIES
The initiative builds on the awareness that tackling complex challenges, such as the transformation of
subsistence agriculture into productive agribusiness, requires the engagement of a broader range of actors.
Hence, 3ADI pools together key stakeholders – governments, development partners, business and research
institutions alike – to leverage their core competencies, share knowledge and harmonize efforts. Since the
private sector plays an instrumental role in driving systemic change in agribusiness, 3ADI also provides a
framework for developing cross-sect oral partnerships to help implement large-scale programmes in this area.
By involving various actors and linking their unique resources, UNIDO can enhance the effectiveness and
sustainability of its activities, promoting the expansion of local and international value chains for the benefit of
small producers and entrepreneurs. As a consequence, additional incomes for producers are created, as well as
new jobs. The integration of small holder farmers into commercially viable business linkages also allows UNIDO
to expand the social inclusiveness of agribusiness value chains. The whole economy of target countries benefits
from the higher proportion of value addition that can be retained within their borders. Partnering with the
private sector helps ensure that UNIDO interventions remain relevant to the needs of industry. Private partners
also facilitate the knowledge and technology transfer required for the empowerment of small and medium
enterprises (SMEs) and the industrialization of Least Developed Countries (LDCs).
3ADI currently focuses on Afghanistan, Brazil, Burkina Faso, Comoros, Democratic Republic of the Congo,
Ethiopia, Ghana, Haiti, India, Liberia, Madagascar, Niger, Nigeria, Rwanda, Sierra Leone, Sudan, and United
Republic of Tanzania.
Value chains and supplier development
During the past few years, there has been growing interest in looking at the entire value chain, from primary
production to consumption and disposal, and specifically to those SMEs and agribusinesses supplying raw
materials or semi-processed or consumer goods and services to multinationals. SMEs producing agro-based
12 | P a g e
products in developing countries, especially small production units, often lack the technical and financial
means to produce goods of sufficient quantity and quality in a cost-effective manner. This means that they
miss out on the market opportunities offered by local and global supermarkets and manufacturers.
Annual growth of world MVA
Annual growth in %
15
10
5
0
Industrialized Economies
Developing & EIEs
China
Morocco
North Africa
World
-5
-10
-15
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
FIGURE 3 ANNUAL GROWTH OF WORLD MVA
NOTE: MVA=MANUFACTURING VALUE ADDED / EIE=EMERGING INDUSTRIAL ECONOMIES
This has a negative impact on those less developed businesses and their workers who strive to access formal
and profitable markets with their products in order to grow and generate income and job opportunities.
UNIDO recognizes that aligning business strategies, operations and supply chains with sustainable
development outcomes is not only a social responsibility, but also increasingly a business imperative. Adopting
more socially inclusive and environmentally sustainable business operations will help to mitigate risk, develop
new markets and cultivate sustainable relationships with suppliers, customers and investors.
13 | P a g e
MVA and GDP growth of developing and emerging industrial economies
MVA
GDP
Growth in %(2000=100)
240
220
200
180
160
140
120
100
2000
2002
2004
2006
2008
2010
2012
2014
FIGURE 4 MVA AND GDP GROWTH OF DEVELOPING AND EIE
NOTE: MVA=MANUFACTURING VALUE ADDED / EIE=EMERGING INDUSTRIAL ECONOMIES
PAMPAT: Improving livelihoods of small-scale rural producers of typical food products in
Morocco and Tunisia:
More and more consumers are searching for authenticity and are willing to pay higher prices for typical food
products that are deeply rooted in the culture and tradition of their territories of origin. For small-scale rural
producers, this new trend signifies a major opportunity; it frees them from having to compete on price with
standardized products in commodity markets and rewards them for the maintenance of biodiversity and
cultural heritage in niche markets.
MVA and GDP growth in North Africa
MVA
GDP
Growth in %(2000=100)
170
160
150
140
130
120
110
100
2000
2002
2004
2006
2008
2010
2012
2014
FIGURE 5 MANUFACTURING VALUE ADDED AND GDP GROWTH IN NORTH AFRICA
14 | P a g e
Within this context, UNIDO is implementing a project in Morocco and Tunisia with funding from the State
Secretariat for Economic Affairs (SECO) of the Swiss Government. Launched in 013, the “Projet d’accès aux
marchés des produits agroalimentaires et de terroir” (PAMPAT) aims at improving the performance, market
access and socio-economic conditions of several value chains: in Tunisia, project activities focus on harissa, the
Djebba fig and the prickly pear, while in Morocco the argan oil and prickly pear value chains in the central
Souss-Massa-Drâa region have been selected.
MVA and GDP growth in Africa
MVA
GDP
Growth in %(2000=100)
200
180
160
140
120
100
2000
2002
2004
2006
2008
2010
2012
2014
FIGURE 6 MVA AND GDP GROWTH IN AFRICA
UNIDO is strengthening the organization and governance of the selected value chains, improving the
productivity, quality compliance and product development of small-scale rural producers, and enhancing their
position in both domestic and export markets. UNIDO is also helping to ensure that the products comply with
the requirements of recently introduced geographical indication and other quality labels, in order to position
them in higher niche markets and allow the producers to obtain a premium price and higher revenues. Through
the implementation of new green technologies the project will also improve the environmental sustainability
of the value chains.
Productive work for young people and entrepreneurship development
Providing jobs for young people is one of the most pressing challenges for governments across the globe, a
challenge that affects both developed and developing countries, as well as countries with economies in
transition. The problem is exacerbated in the developing world by a lack of opportunities and financial
resources. The inability to earn an income not only leads to poverty and deprivation, but all too often to
insecurity, civil disturbance and crime. Without a future of their own, young people will find it hard to
contribute to the future of their country. This is a high priority issue for the United Nations and its specialized
agencies and there are few better examples of inter-agency cooperation than its common response to this
challenge. For its part, UNIDO has a dedicated entrepreneurship development programme for young women
and men that provide training in technical skills to empower young people develop the local business
environment and instill an entrepreneurial culture. It targets underprivileged young people in particular.
15 | P a g e
Armenia: Productive work for young people – supporting young entrepreneurs
In 2011, the youth unemployment rate had risen to almost 40 per cent. Given the limited absorptive capacity
of the Armenian public sector and of the formal labour market, UNIDO launched a project to support youth-led
enterprise creation and expansion with Austria’s financial support. The project follows a comprehensive
approach providing non-financial and financial services during and beyond the start-up phase, and also
promotes a more conducive environment for youth-led businesses: aspiring young entrepreneurs receive
direct assistance in creating and/or developing their own businesses including entrepreneurship training,
counseling and coaching, and technical assistance. They also have the possibility to access funding through the
youth business revolving fund, which has been established through the project. Furthermore, institutional
capacity-building has been rendered as and where necessary. Outreach activities are undertaken to reinforce
the positive effects of entrepreneurship on individual, community and socioeconomic development. Particular
emphasis is given to the promotion of successful women entrepreneurs to encourage young women to enter
into business.
Concurrently, issues related to the business environment have been addressed; as a result, a concrete action
plan and recommendations for political decision makers at the national and regional level were developed.
While contributing to a systemic change, where both the public and the private sector render more and better
support to youth-led enterprise creation, the UNIDO project shows that funding schemes targeted towards
youth create win-win situations: the project is on track to reach its targets of beneficiaries, including 300
potential and existing young entrepreneurs (of which 50 per cent are women) and 80 youth-led businesses and
start-ups. It is envisaged to expand the programme across Eastern Europe.
Clusters, export consortia and business linkages
Southern Mediterranean
Every year, 5 million new jobs are needed in the Southern Mediterranean; these could be created by the
region’s micro, small and medium-sized enterprises if they become more competitive in terms of business,
environmental and social performance. Cultural and Creative Industries (CCI) are increasingly contributing to
the Southern Mediterranean’s socio-economic development. CCI enterprises would strongly benefit from
entrepreneurial cooperation to help them realize the potential of their cultural heritage, improve products to
attract consumers, access local and foreign markets, and create mutually beneficial international partnerships.
Based on an initial CCI cluster and value chain mapping as well as a transparent selection process, the project
seeks to provide technical assistance to at least one cluster in each one of the target countries. The project will
also foster information dissemination and knowledge sharing through dedicated CCI centers as well as
workshops and regional meetings that foster the exchange of best practices and success stories. Moreover, the
project supports the implementation of an enhanced CCI policy framework that is conducive to the formation
of clusters, thus promoting the upscaling and replication of its technical cooperation activities for increasing
employment opportunities and inclusive growth throughout the region. In addition, special attention will be
given to the establishment of business linkages between Southern Mediterranean and European Union cluster
support institutions as well as between international buyers (retailers and manufacturers) and local suppliers
towards increasing sustainable sourcing. Funded by the European Union and the Government of Italy, the
project is implemented by UNIDO, and will complement and add value to current and future activities that are
also funded by the European Union and other donors in the Southern Mediterranean. Regional activities will
16 | P a g e
also be undertaken under the auspices of the Union for the Mediterranean, which will further partner with the
project as a forum and platform for information exchange and knowledge sharing.
South-South Centers activities: E-Trace model for trade capacity building
South-South and triangular cooperation is a dynamic and innovative area of development cooperation that
aims at mobilizing and sharing the wealth of knowledge, skills, solutions, resources, capacity and Southern
developmental approaches with other countries of the South. Possible involvement and assistance of the
development partners from the North may also help capitalize on their development experience. South-South
and triangular cooperation is an effective complement to North-South cooperation, and guided by the
following principles: mutual benefit, respect for national sovereignty, national ownership and independence,
equality, and non-conditionality and non-interference in domestic affairs.
The UNIDO South-South Cooperation Programme works at different levels of the international arena of SouthSouth cooperation, playing active roles as a global advocator and promoter, as a partner-builder and
matchmaker of developmental stakeholders and partnerships, as a convener of international platforms for
industrial development policy dialogues, and as an implementer of technical cooperation activities in its
mandated competencies (C.1, C.2, C.3). In addition, the programme will build its capacity as a global monitor of
South-South Industrial Cooperation. Its contribution to the achievement of the MDG’s is highlighted in the
cohesive mainstream of this South-South Cooperation Programme, with C.1, C.2 and C.3 relevant to UNIDO as
a whole.
UNIDO has hosted and co-organized the United Nations Global South-South Development Expo 2012 in Vienna,
together with the United Nations Office for South-South Cooperation. This cooperation will be extended and
enhanced to further areas in the global South-South Cooperation structure. UNIDO has two flagship Centers for
South-South Industrial Cooperation, including in New Delhi and Beijing. Further centers and complementary in
This Programme component focuses on ensuring continued support and assistance to developing countries by
implementing and enhancing the roles of UNIDO in the South-South and triangular cooperation, so that the
sustainable industrial development of these countries can be achieved.
4. References
•
•
•
•
•
•
UNIDO’s Lima Declaration, December 2013
Consolidated
2014
Consultation
Report:
Engaging
with
the
Private
Sector
http://www.worldwewant2015.org/node/459914
UNIDO annual report 2013 & 2014
Report on sessions: UNIDO’s forum on partnerships to scale up investment for inclusive and
sustainable industrial development
Arab High Level Forum on Sustainable Development, Amman, 2-4 April 2014, Sustainable Development
Goals An Arab Regional Perspective
http://intranet.unido.org/intranet/images/c/ca/Focus_areas_document_OWG_SDGs_21_February_20
11
17 | P a g e
5. Annexes
ANNEX 1 COUNTRIES AND REGIONAL PARTICIPATION
Region
GCC
LDCs
Maghreb
Mashreq
Countries
Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates
(UAE)
The Comoros, Djibouti, Mauritania, Somalia, the Sudan and Yemen
Algeria, Libya, Morocco and Tunisia
Egypt, Iraq, Jordan, Lebanon, Palestine and the Syrian Arab Republic
ANNEX 2 CONTRIBUTION TO THE EXPECTED IMPACT OF PROGRAMMES C.1, C.2 AND C.3
Contribution
Performance indicators
Increased numbers of linkages, with engagement and cooperation
activities between developing countries of the South allowing them
to establish productive partnerships for mutual advancement.
Design and implementation of strategies to create awareness to
improve productive capacities, intra trade, efficient energy use and
the successful transfer and deployment of Southern technologies and
solutions, as well as successful developmental approaches.
Increased number of South-South and triangular
partnerships and a subsequently increased
number of implemented technical cooperation
projects.
Improved technology and solution transfer and
diffusion, improved social wealth creation,
reduced pollution and increased efficient use of
resources due to involvement of C.1, C.2, and C.3
in the South-South and triangular cooperation
ANNEX 3 CONTRIBUTION TO THE EXPECTED COUNTRY-LEVEL OUTCOMES OF PROGRAMMES C.1, C.2 AND C.3
Contribution to policy outcome
Performance indicators
South-South and triangular cooperation in the form of technology and
solution transfer and diffusion, investment, innovation and regional
cooperation is key features in the national industrial or sect oral
policies, strategies and international dialogues.
Improved national, industrial or sectoral policy
frameworks and infrastructure for South-South
and triangular dialogue, exchange and
cooperation.
Increased allocation of domestic resources
towards South-South cooperation.
Contribution to institutional outcome
Performance indicators
Public and Private institutional support to foster South-South and
triangular cooperation, particularly in the promoted and mandated
UN & UNIDO South-South and triangular cooperation initiatives.
Completion of the coordination system for institutional capacity
building for UNIDO South-South and triangular cooperation.
Enlarged numbers of national stakeholders and
their enhanced involvement in South-South and
triangular cooperation.
Enhanced
commitment
and
promoted
partnerships and linkages in South-South and
triangular cooperation.
Strengthened relations with relevant SouthSouth and triangular cooperation stakeholders in
the UN system
A fully operationalized UNIDO Operational
Strategy for South-South and Triangular
Cooperation, which enables UNIDO to undertake
its mandated roles.
18 | P a g e