THE NEW ECONOMIC ORDER
1975 - 1984
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| United Nations Industrial Development Organization |
THE NEW ECONOMIC ORDER
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| Last Change: Wednesday, 08-Apr-98 10:14:02 MET DST |
Throughout the 1970s and into the 1980s, the State was the major industrial entity in most countries. No other factor could obtain the financing and muster the resources necessary to undertake the massive infrastructure development required as the underpinning of any industrialization. Not, at least, at a cost that newly independent nations, wary of foreign domination by multinational corporations and financial institutions, were willing to pay. However, fashions began to change in the 1980s. State-owned and state-operated enterprises began to be seen as inefficient and non-competitive in an increasingly interdependent and competitive world. Nations with a long history of moderately successful state-owned enterprises began to privatize - to sell off those resources to private sector investors. The Centrally Planned Economies ceased to be centrally planned as they too moved toward industrial privatization and freer trade. Countries that had early shifted from import substitution to export promotion and reduced state involvement were seen to be the more successful and thus became the models for industrialization during the 1990s and into the next Millennium.
The Second General Conference of UNIDO, which was held at Lima, Peru, in March 1975, was the outstanding event. It was the moment when the dialogue between industrialized countries and industrializing countries genuinely began. The international environment certainly helped for the proclamation of the New International Economic Order at the heart of the Lima Declaration. The third world countries succeeded in securing for UNIDO the principle of complete autonomy through its transformation into a specialized agency of the United Nations. They also secured at the world level a key objective: that the share of the third world countries would increase to 25 per cent in the world industrial production by the year 2000. This share was estimated at only 7 per cent in 1974. The culmination of the Conference was the adoption of the Lima Declaration and Plan of Action on Industrial Development and Cooperation. Representatives of 114 States attending the event set forth a number of principles relating to the process of industrialization and expressed their confidence in UNIDO by assigning new tasks to the Organization.
In 1976, Dr. Abd-El Rahman Khane, Second Executive Director (1975-1985) undertook the reorganization of the Secretariat, intending to make room for new structures needed to implement the Lima Conference's decisions. The traditional technical assistance activities were enriched by the adaptation of
The Third General Conference of UNIDO was held in New Delhi, India in early 1980. Attended by 133 Member States as well as representatives of a large number of international organizations, the Conference reviewed and appraised the world industrial situation, with specific reference to the industrialization of the developing countries. The Conference dealt with the strategy as an essential element of the development process in the 1980s and beyond. The Member States evaluated the coordination system within the United Nations, with respect to development programmes related to industrialization. They also scrutinized the effectiveness of the institutional structure of UNIDO.
The Conference adopted the New Delhi Declaration setting forth a number of principles relating to the process of industrialization. Also, it approved the Plan of Action on Industrialization of Developing Countries and International Cooperation for their industrial development. The Plan of Action was divided into nine major sections dealing with:
UNIDO had moved a long way since its establishment in 1966. The most important achievement since Lima was the adoption of a constitution for UNIDO as a specialized agency with independent finances and administration to enter into force when at least 80 States deposited instruments of ratification, acceptance or approval. It was in line with the Organization's broad mandate of fostering industrial development and cooperation. UNIDO was given a distinct advantage by allowing it to draw on a broad spectrum of industrial cooperation to benefit both developing and developed countries. It meant close interaction with industry, making state-of-the-art expertise more readily available to countries of the South and allowing participating companies to work more closely with them. Because the third world's industrial requirements outstrip traditional development aide, UNIDO acted as a catalyst in promoting North-South investment in the broadest sense.
In 1980 alone, the level of technical assistance delivery already reached US$ 76.1 million covering a total of 1,330 projects, including 93 of more that US$ 1 million in value.Cost of individual projects ranged from a few thousand dollars to more than $24 million for larger projects of several years' duration - from a one-man mission to help China increase its output of TV sets, to establishing a sponge-iron plant in India, which could lead to the saving of billions of dollars in precious foreign exchange. Within the framework of the Organization's experience, techniques have been redefined to deal with new elements of field activities entailing technical assistance over a broad spectrum of industrial development programmes. Among its major activities and challenges were integration of industry and agriculture, expansion of rural industrialization, development of alternative forms of energy, special forms of assistance for least developed and Sahelian countries, and the development acquisition. UNIDO was among the major executing agencies in the implementation of projects financed by the United Nations Development Programme (UNDP). Projects included such diverse areas as developing the leather industry in Mongolia and Fiji and producing flower extract insecticides in Rwanda to setting up a metallurgical centre in Chile. Under the Special Industrial Services (SIS) programme immediate and short-term help to solve urgent problems was provided, among them the establishment of a bread industry in Chad, sugar refining in Cuba and soap making in Iran.
Perhaps the most innovative measure for accelerating the pace of industrialization was the establishment of a System of Consultations. It helped to provide a better understanding of present and future trends in terms of production, raw materials, finance, training and energy requirements. Consultations on the nine industrial sectors showed that the system can lead to a more balanced relationship in industrial matters between the developed and developing countries. Consultations were supported by industrial statistics, global and conceptual studies which were disseminated to provide a ready source of information for decision-makers, industrialists, economists and entrepreneurs. The annual Industry and Development Global Report, published in 1985 was a good witness of this type of contribution.
UNIDO's Investment Programme had the specific task of helping developing countries get foreign cooperation in the form of financing and technical know-how to supplement domestic investment efforts. UNIDO assisted individual developing countries to identify and present commercially attractive projects and locate potential partners from developed countries as well as initiate a dialogue between the two.
UNIDO's Technology Group reached the threshold of a more intensified and substantial effort. The International Forum on Appropriate Industrial Technology held in 1978 resulted in the evolution of a conceptual policy framework for appropriate industrial technology, and in detailed expert assessment of technological options in several industrial sectors. The Industrial and Technological Information Bank (INTIB), established in 1977, assisted developing countries in obtaining selected, analyzed and annotated information on available alternative technologies relating to a number of sectors.
UNIDO's assistance to the Third World contributed significantly to the progress in a number of developing countries. However, progress towards achieving the Lima target was painfully slow, because the mutuality of interests between the North and the South in furthering the case of international cooperation in the field of industry was not sufficiently recognized. Also, achieving the Lima goal required vastly increased financing on appropriate terms. In 1980, UNIDO proposed the establishment of an International Bank for Industrial Development for mobilizing surplus funds. The proposal had been endorsed by international experts, but UNIDO's governing body held only preliminary discussions on the proposal. In this context, UNIDO's work was hampered by inadequacy of resources - resources not commensurate with the tasks assigned to the Organization.