"The focusing and streamlining of UNIDO achieved by April 1997 had met all the required targets. UNIDO's efforts had gone far beyond what has been done in other U.N. agencies, funds or programmes."


Danish study hails UNIDO reform

Vienna, 23 April 1997 (Special Report) - The Ministry of Foreign Affairs of Denmark recently commissioned an independent study to assess the reforms undertaken by the UNIDO Secretariat since 1993 and to determine whether the continued existence of UNIDO, as a separate specialized agency, can be justified with reference to the needs and demands for its services and considering the resources available to the Organization. The results of the study were made public by the Danish delegation participating in the special session of the Industrial Development Board which took place in Vienna from 21 to 25 April 1997. The overall assessment, contained in the report, states that “...the focusing and streamlining of UNIDO achieved by April 1997 amount to an almost complete implementation of the changes requested by Member States through the General Conference and the Industrial Development Board...” UNIDO has clarified “...its objectives and roles and decided on a set of interrelated and more clearly focused thematic, sectoral and geographical priorities. The Organization’s programmes and services have basically been reoriented and focused in accordance with the revised objectives and priorities...”

The study also concluded that “...based on a critical review of UNIDO’s own analyses of the changing needs and demands for its services, supplemented with an independent assessment, the Review Team has found no justification for abolishing UNIDO on the ground that its services are no longer needed and demanded. It seems more warranted to conclude that there is a definite need for a neutral and independent provider of integrated services in support of industrial development and international industrial cooperation...” The study recommended “...the continuation of UNIDO as a specialized UN agency...” stating that “...there are clearly identifiable needs, and even increasingly so, for the kinds of services provided by the Organization...” It concluded that “...disbanding UNIDO as a separate entity and amalgamating it with another or other organizations would itself be so costly that it could only be justified if this exercise, a priori, would appear to result in increased effectiveness, efficiency and responsiveness to client countries’ needs...” The report continues to state that the Review Team is not confident that any amalgamation of UNIDO with other bodies or programmes would result in such improvements.

Speaking on behalf of the Danish delegation, Ambassador Jorgen Bojer announced the preliminary conclusions of a special review, commissioned from independent firms by his country's foreign ministry, confirmed that the focusing and streamlining of UNIDO achieved by April 1997 had met all the required targets.

''But the severe budget reductions -- which were not foreseen at the time when the reform process was initiated -- may require further focusing and some added efficiency-enhancing administrative rearrangements,'' said Bojer.

A former critic of UNIDO, Bojer now recommends UNIDO's continuation as a specialised agency. And he added that ''in view of the increasing demand for UNIDO's core services overall budget cuts cannot be justified''.

Despite the German and British position Bojer said the countries of the European Union considered that UNIDO's efforts had ''gone far beyond what has been done in other U.N. agencies, Funds or Programmes''.

Bojer found it ''very encouraging that UNIDO, within a very short span of years, has improved its cost-effectiveness considerably so as to become the U.N. agency with the lowest administrative and operational support costs.''

Dutch ambassador J.A.F.M. Forster also observed that ''UNIDO's record is more impressive than that of many other U.N. bodies which are in equal need of reform''.

''Member States had every opportunity to participate in the reform and to contribute to it. Thus the current crisis cannot be blamed on UNIDO,'' Austrian ambassador Ferdinand Mayrhofer-Gronbohel said.

Other highlights of the study are as follows:

• Overall the observations of the study indicate a remarkable capacity for change and general improvement of organizational performance in UNIDO. The two step organizational restructuring in 1994 and 1996, have contributed to other more substantial improvements. They have drastically reduced costs in some areas, while facilitating better coordination between closely linked activities in others.
• Improvements have been introduced in personnel policies and management over the last two years; financial management has improved in several aspects and since 1993 the Internal Audit unit has become heavily involved in reviewing the management control system, and on that basis makes recommendations on the enhancement of transparency and accountability and on establishing procedures for their implementation.
• Even with a decline in total expenditure on service delivery in 1996, UNIDO managed to bring down its administrative and operational support costs in relative terms. According to the most recent cost measurement data, the support costs had been reduced to 14.5% of total costs of delivery, down from 18.8% in 1992-93 and from 22.2% in the following biennium. This gives UNIDO the lowest administrative and operational support cost-to-delivery ratio among the UN agencies using the same measurement methodology.
• From 1993 to 1996 personnel was cut by 36% and the budget was cut by 25%.
• With respect to internal allocation of funds, UNIDO has lately focused its programmable resources more on Africa and LDCs in accordance with decided priorities.
• New guidelines for management of UNIDO services were introduced in April 1996. They aimed at further simplifying and streamlining the procedures that were introduced earlier in the reform process in April 1994.