INTERVIEW with UNIDO Director-General, Kandeh K. Yumkella

1. First of all could you tell us a little bit about yourself and your background ?
I joined UNIDO in 1996, as Special Advisor to the then Director-General, Mauricio de Maria y Campos, and in the same year became Director of the Regional Bureau for Africa and the Least Developed Countries. Four years later, I went to Nigeria as UNIDO Representative and Director of the UNIDO Regional Industrial Development Centre, a position I held until 2003. From then until my appointment as Director-General in December 2005, I was a Senior Advisor to the previous Director-General, Carlos Magariños.

Between 1994 and 1995 I was Minister for Trade, Industry and State Enterprises of Sierra Leone. In my earlier career I occupied several academic and research positions in the United States.

2. You are currently the DG of UNIDO. Could you tell us some more about it ?
UNIDO was established in 1966 and became a specialized agency of the United Nations in 1985. It holds a special place in the United Nations system, as it is the only organization addressing poverty reduction and the creation of wealth through the promotion of productive activities in the manufacturing sector. The Organization focuses on three thematic priorities : Poverty Reduction through Productive Activities ; Trade Capacity-Building and Energy and Environment.

To improve standards of living through industries that are both internationally competitive and environmentally sustainable, UNIDO has created the largest portfolio of projects related to trade capacity building in the United Nations system. The main focus is on promoting growth in the small and medium enterprise sector – the key generator of wealth in most developing countries. UNIDO also plays a leading role in a number of other important areas : the implementation of the Montreal Protocol for the elimination of ozone depleting substances, and the Stockholm Convention for the elimination of persistent organic pollutants.

3. UNIDO has just created the largest portfolio of projects related to trade capacity building. Why is trade so important ?
Trade is a key factor in development. Going back to the Silk Road, trade has facilitated the exchange of goods around the world, created employment, generated incomes and wealth, and brought the world closer together. In recent times, there has been a strong positive correlation between trade, economic development, and poverty reduction. Some studies have shown that every one percent growth in trade leads to a one-half percent increase in income. We have all welcomed the new global reality of a rules-based trading system, which has encouraged the growth of trade.

The recent development experience of China and Viet Nam demonstrates the link between trade and development very well. In the process, China has brought 400 million people out of poverty. Recent economic growth in Viet Nam has also had a major impact on poverty reduction.

We have seen a significant increase in funding for our Trade Capacity Building programme. The European Union, Norway and Switzerland have been the major donors supporting this programme, along with Austria, Italy and Sweden.

4. You have developed an Aid for Trade initiative. Why and what exactly would you like to achieve ?
Aid for Trade (AFT) was given a boost at the WTO Hong Kong Ministerial Meeting in 2005. In 2006, the WTO AFT Task Force recommendations enabled the WTO to launch a special initiative on Aid For Trade. Last year WTO held three regional consultations to develop awareness and ownership. UNIDO participated actively in this process.

UNIDO’s Aid For Trade interventions are built upon the core objectives of the AFT. We would like to address developing country concerns about trade marginalization. World trade has seen a significant increase over the last two decades. However, the gains from trade have not been equitably shared. There are two key areas where UNIDO can help countries to expand their trade :

• First, over 90% of global trade is in manufactures. At present, many developing countries do not have sufficient tradable goods. They need to be assisted to develop supply capacity – in other words manufacturing capacity. Supporting industrial development in developing countries is our key mandate. We can thus make a unique contribution to the success of Aid For Trade.

• Second, when products are exported, they need to meet the quality and safety standards of importing countries. With recent health scares generated by mad-cow disease, avian flu, and high antibiotic and pesticide residues in food products, global standards are getting stricter. Developing countries need to be able to comply with these standards through strong national institutional capacities for testing, certification, and calibration. UNIDO is the key agency providing technical support for the development of these capacities.

5. We have a feeling that there is a return to more protectionist attitudes. Do you share this point of view and what can be done to avoid this ?
Countries have taken measures against import surges, dumping, or on health and other grounds. It is important that these measures adhere to WTO rules and are not used unfairly to restrict trade.

Many countries have followed policies, such as providing large-scale subsidies in agriculture, which distort world trade in agricultural products.

It is vital that developed countries and countries that have gained from the multilateral trading system provide a meaningful opportunity to others to benefit as well. We need to create win-win situations for all in order to make the multilateral trading system sustainable and more equitable.

6. Many of the developing countries have little or non-existing industry. Don’t you think that one of the ways to reduce poverty is to focus more on industrialization ?Industrial development is clearly a sustainable path to poverty reduction and development. The success of the "tiger economies" and the newly industrialized countries, including China and India, in reducing poverty underlines the importance of industrialization-led economic growth. One way to demonstrate the importance of industrialization for a developing country is to look at the value chain. As a country adds value to its products, it derives a higher level of income. For example, a country producing cotton gets $1 per kilo for the fibre. But the same fibre processed into yarn fetches $2.50 per kilo, the grey fabric made from the yarn yields $3.50 per kilo and the finished fabric is worth $4.50 per kilo. The garment that is made out of that fabric costs $10 per kilo. Clearly, a country that simply produces the raw cotton and does no industrial processing derives much less value from the same product. The higher the level of industrial processing, the higher the earnings from the same product. It is thus crucial for developing countries to continually move up the value chain and build competitive industries if they are to reduce poverty.

7. You have just attended an inter-agency meeting with SG Ban Ki-moon and other heads of agencies. What did you discuss, and what was the outcome ?There were many things discussed in the meeting of the UN Chief Executives Board (CEB), so let me focus on the most important ones and on the key outcomes. Of course, the pressing issues of the day – the global food crisis, climate change, and UN integration and coherence – took centre stage in our discussions.

We are entering a highly volatile period in world agriculture. Last year the price of wheat rose by over 77 % and of rice by 16%. These unprecedented increases in food prices, which have affected poor people most severely, have triggered food riots in many countries. It is therefore not surprising that this pressing issue was high on our agenda. I am pleased to say that the UN lived up to the challenge and developed a unified response covering both immediate and long-term actions, which has been issued in the form of a press communiqué entitled : “A Unified United Nations Response to the Global Food Price Crisis”. I believe the communiqué is a good document, which can offer powerful guidance for coherent and effective action by the UN system.

By now, most people would agree that climate change has become the single most significant challenge for sustainable development in the 21st century. Not a day goes by when we do not hear alarming stories of rising global temperatures and sea levels causing or being connected to various severe climate disorders and related catastrophes. The recent award of the Nobel Peace Prize to the former US Vice President Al Gore and to the International Panel on Climate Change, whose Chairman, Dr. Rajendra Pachauri has recently agreed to serve as a Goodwill Ambassador for UNIDO, is testimony to the heightened concern about climate change. At the CEB meeting we therefore discussed the challenge of climate change in depth and endorsed a UN system-wide decision on this topic to catalyze action. There is still much for the system to do in the lead-up to the next UN Climate Change Conference in Copenhagen in 2009, however, both in terms of responding to the mandates already given to the various UN agencies in this field, and in terms of supporting adaptation and mitigation activities at the country level in a coherent manner.

As many Member States and the Secretary General have said on many occasions, enhancing system-wide integration and coherence within the UN is a critical prerequisite for its ability to address such challenges as the global food crisis and climate change effectively. We have to show the world that the various UN agencies are working together with demonstrable impact in a coherent way and making the best use of our limited resources. The UN response to this challenge has been the development of the so-called One-UN approach, under which UN development agencies are called upon to “deliver as one” at the country level through the adoption of the “four ones” approach : One leader, one programme, one budgetary framework, and one office where appropriate. This approach has been tested in eight pilot countries over the past eighteen months or so, and I am pleased to say that the progress has been positive and encouraging so far. Needless to say, I personally feel very strongly about this issue as well, and UNIDO has given its full support to the conceptualization and implementation of this approach. As recently as 4-5 March UNIDO hosted a high-level dialogue on this subject in Vienna attended by more than 300 senior officials of the UN and its Member States, about which I also briefed the CEB.

Finally, I had the privilege of presenting a “Trade Capacity Building Inter-Agency Resource Guide”, in the production of which UNIDO has played a lead role. This important Resource Guide provides valuable information about which agency is providing which services in the area of trade capacity building. As Chair of UN Energy, I also had the honour of briefing the CEB on the work our group has done this year, focusing on energy access, energy efficiency, and renewable energy.

8. You are active in promoting trade as a tool of development. What other UN agencies do you work closely with ?
UNIDO signed a memorandum of understanding with WTO in 2003 to apply the UNIDO trade capacity building approach in a number of pilot countries. We participate in the WTO TBT/SPS Committees and the Standards and Trade Development Facility (STDF). (Diva International)