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Continuity in Times of Crises: UNIDO at the Vienna Process

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On the historic date of March 08th – International Women’s Day, a large number of international affairs specialists gathered for the second consecutive summit in Vienna, Austria. This leg of the Vienna Process titled: “Europe – Future – Neighborhood at 75: Disruptions Recalibration Continuity”. The conference, jointly organized by the Modern Diplomacy, IFIMES and their partners, with the support of the Diplomatic Academy of Vienna, was aimed at discussing the future of Europe and its neighbourhood in the wake of its old and new challenges.[1]

Along with the two acting State Presidents, the event was endorsed by the keynote of the EU Commissioner for European Neighbourhood and Enlargement, Excellency Olivér Várhelyi. One of the most anticipated talks was that of the representative of the United Nations Industrial Development Organization (UNIDO, Specialized Agency of the OUN). Actualizing the (re)industrialization efforts and business continuity in times of C-19 and beyond: With a focus on Europe and its Neighborhood, Florian Peter Iwinjak, of the UNIDO Strategic Relations & Resource Mobilization division stressed the following:

Mr. Iwinjak first gave a snapshot of the mandate, strategic priorities and core functions of UNIDO as shown by the figure below:

He then alluded to the importance of industry and industrialization for achieving the Sustainable Development Goals (SDGs) and overcoming the COVID-19 crisis. On the social front, industrialization has a proven track record in reducing poverty and one job in manufacturing usually brings between 0.5-2 jobs in other sectors. On the economic front, the there is a high correlation of industrialization with growth rates, GDP, HDI and SDG index. Industrialization is unique due to its economies of scale, linkages and as a source of innovation and allows the possibility for fast-growth and “catching-up”. Moreover, labor productivity in industry is on average higher than in other sectors and it is the basis for trade as the most tradable sector. The transformation of industry is also critical to mitigate climate change and safeguard the environment since two thirds of GHG emissions are industry or energy related. Finally industry also plays a role for peace and stability: With an increase of MVA per capita of 1%, the number of deaths related to armed conflicts falls by 4.5%. At the same time the creation of  a middle class has a stabilizing effect on societies and in terms of income and gender equality.

He invited the audience to also see the current crisis as an opportunity for a (re)assessment of the socio-economic and industrial fiber, for recalibration of industrial policies, for industrial restructuring and repurposing of manufacturing capacities, and for re-skilling and upskilling. Furthermore, the crisis offers possibilities  to decarbonize the economy/industry and move towards circular economy to reap the benefits of the 4th industrial revolution and digitalization (including robotization and e-commerce) or to eventually regionalize or even localize value chains (through “back-shoring”).

In order to guarantee business continuity and industrial recovery, countries can follow the following steps:

  1. Assessment of the impact of COVID-19 on the industrial sector
  2. Consensus building with a broad range of relevant stakeholders taking into account desired future goals for the industrial sector
  3. Development of a national recovery plan
  4. Piloting national recovery in specific industrial sectors
  5. Replication of pilot success interventions

At the same time, the regional dimension needs to be taken into account, since the pandemic does not stop at borders and it is unrealistic to envisage that every nation can produce every product or service deemed as critical for the post- COVID-19 recovery phase.

Looking at the joint priorities between the EU and its Neighborhood we see a strong convergence around the following priorities: COVID-19 recovery (internal & external), Good governance & rule of law, Green Deal / Transition, Job creation & safeguarding, inclusive growth, human development  (esp. youth & women), private sector development (especially for SMEs), trade & Investment, Aid for Trade and last but not least digitalization & innovation.

UNIDO has been supporting many of these joint priorities related to its mandate Inclusive and Sustainable Industrial Development (ISID), which is also reflected in SDG 9 on Build resilient infrastructure, promote inclusive and sustainable industrialization and foster innovation. Over the last years UNIDO’s mandate has been further strengthened through the Lima Declaration (2013) and Abu Dhabi Declaration (2019) adopted by its Member States.

Based on its mandate, UNIDO has supported these joint priorities of the EU and its Neighborhood over the recent years. The figure below provides selected examples of impactful interventions in the EU’s Neighborhood and beyond.

At the same time, there are ways to further scale-up cooperation through multi-stakeholder partnerships. In Mr. Iwinjak’s opinion the assistance provided by donors through grants, classical Official Development Assistance (ODA), is only an impulse and the technical assistance provided by implementing partners such as UNIDO should ideally be catalytic to leverage additional investments from Development Financing Institutions (DFIs). Further downstream these scaled-up solutions should allow for real mainstreaming in the economy and society thereby guaranteeing longer-term sustainability. Please see the figure below as a simplified visualization of ways for scaling up.

Finally, a good example of scaling-up and integration is UNIDO’s Programme for Country Partnership (PCP) which have been institutionalized with partner countries since 2013. The PCP is characterized by strong government ownership at the highest political level, is founded on a multi-stakeholder partnerships from programme design to implementation. It focuses on a select number of priority sectors and areas essential to the national industrial development agenda, and facilitates the mobilization and coordination of three streams of financial resources (development assistance, public finance and business sector investment). Currently there PCPs in Ethiopia, Senegal, Peru, Morocco and Cambodia are being implemented. Seven other PCPs in Kyrgyzstan, Egypt, Zambia, Cote d’Ivoire, Rwanda and Tanzania are in the programming phase.

The overall key messages and ideas for future endeavors of Mr. Iwinjak’s intervention were:

  • Industry and industrialization play a crucial role for sustainable development and recovery from the COVID-19 crisis
  • COVID-19 recovery can be seen as opportunity for positive transformation to build back better: more inclusive, more sustainable, and more digitalized
  • Europe’s history and future is closely linked with its neighborhood, thus the partners should continue strengthening their partnerships and think of co-industrialization
  • Based on joint priorities, we should continue investing in productive capacity/sector
  • Expand industrial cooperation dialogues between various regions (incl. private sector, academia, etc.) and use multi-lateral forums such as UNIDO
  • Multi-stakeholder partnerships and cooperation will play a critical role in overcoming the crisis and scaling-up viable solutions (UNIDO PCP as good example)

Closing his mesmerizing presentation Mr. Iwinjak suggested some further readings on the topic: UNIDO (2020a): Industrialization as the driver of sustained prosperity ; UNIDO (2020b): COVID-19: Industrial Recovery Programme ; UNIDO (2020c): Responding to the CODIV-19 crisis: Pathway to business continuity & recovery – Guidance for Micro, Small and Medium Enterprises (MSMEs) ; UN (2020a): How COVID-19 is changing the world: a statistical perspective. Volume I and Volume II and UN (2020b): A UN framework for the immediate socio-economic response to COVID-19.

Finally, the United Nations Specialized Agency for Industrial Development –   UNIDO expressed it preparedness to further partner IFIMES, Modern Diplomacy and associates in their Vienna Process endeavors, soon planned for Geneva and Barcelona.


[1]This highly anticipated conference gathered over twenty high ranking speakers from three continents, and the viewers from Australia to Canada and from Chile to Far East. The day was filled by three panels focusing on the rethinking and revisiting Europe and its three equally important neighbourhoods: Euro-Med, Eastern and trans-Atlantic (or as the Romano Prodi’s EU Commission coined it back in 2000s – “from Morocco to Russia – everything but the institutions”); the socio-political and economic greening; as well as the legacy of WWII, Nuremberg Trials and Code, the European Human Rights Charter and their relevance in the 21st century.

Uulkan Burkanova, of the AUCA (American University of Central Asia) is a specialist on Central Asia. She is research fellow of the IFIMES Department on Asia (DeSSA).

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Economy

Accelerating COVID-19 Vaccine Uptake to Boost Malawi’s Economic Recovery

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Lunzu market in southern Malawi. WFP/Greg Barrow

Since the onset of the COVID-19 pandemic, many countries including Malawi have struggled to mitigate its impact amid limited fiscal support and fragile health systems. The pandemic has plunged the continent into its first recession in over 25 years, and vulnerable groups such as the poor, informal sector workers, women, and youth, suffer disproportionately from reduced opportunities and unequal access to social safety nets.

Fast-tracking COVID-19 vaccine acquisition—alongside widespread testing, improved treatment, and strong health systems—are critical to protecting lives and stimulating economic recovery. In support of the African Union’s (AU) target to vaccinate 60 percent of the continent’s population by 2022, the World Bank and the AU announced a partnership to assist the Africa Vaccine Acquisition Task Team (AVATT) initiative with resources, allowing countries to purchase and deploy vaccines for up to 400 million Africans. This extraordinary effort complements COVAX and comes at a time of rising cases in the region.

I am convinced that unless every country in the world has fair, broad, and fast access to effective and safe COVID-19 vaccines, we will not stem the spread of the pandemic and set the global economy on track for a steady and inclusive recovery. The World Bank has taken unprecedented steps to ramp up financing for Malawi, and every country in Africa, to empower them with the resources to implement successful vaccination campaigns and compensate for income losses, food price increases, and service delivery disruptions.

In line with Malawi’s COVID-19 National Response and Preparedness Plan which aims to vaccinate 60 percent of the population, the World Bank approved $30 million in additional financing for the acquisition and deployment of safe and effective COVID-19 vaccines. This financing comes as a boost to Malawi’s COVID-19 Emergency Response and Health Systems Preparedness project, bringing World Bank contributions in this sector up to $37 million.

Malawi’s decision to purchase 1.8 million doses of Johnson and Johnson vaccines through the AU/African Vaccine Acquisition Trust (AVAT) with World Bank financing is a welcome development and will enable Malawi to secure additional vaccines to meet its vaccination target.

However, Malawi’s vaccination campaign has encountered challenges driven by concerns regarding safety, efficacy, religious and cultural beliefs. These concerns, combined with abundant misinformation, are fueling widespread vaccine hesitancy despite the pandemic’s impact on the health and welfare of billions of people.  The low uptake of COVID-19 vaccines is of great concern, and it remains an uphill battle to reach the target of 60 percent by the end of 2023 from the current 2.2 percent.

Government leadership remains fundamental as the country continues to address vaccine hesitancy by consistently communicating the benefits of the vaccine, releasing COVID data, and engaging communities to help them understand how this impacts them.

As we deploy targeted resources to address COVID-19, we are also working to ensure that these investments support a robust, sustainable and resilient recovery. Our support emphasizes transparency, social protection, poverty alleviation, and policy-based financing to make sure that COVID assistance gets to the people who have been hit the hardest.

For example, the Financial Inclusion and Entrepreneurship Scaling Project (FInES) in Malawi is supporting micro, small, and medium enterprises by providing them with $47 million in affordable credit through commercial banks and microfinance institutions. Eight months into implementation, approximately $8.4 million (MK6.9 billion) has been made available through three commercial banks on better terms and interest rates. Additionally, nearly 200,000 urban households have received cash transfers and urban poor now have more affordable access to water to promote COVID-19 prevention.

Furthermore, domestic mobilization of resources for the COVID-19 response are vital to ensuring the security of supply of health sector commodities needed to administer vaccinations and sustain ongoing measures. Likewise, regional approaches fostering cross-border collaboration are just as imperative as in-country efforts to prevent the spread of the virus. United Nations (UN) partners in Malawi have been instrumental in convening regional stakeholders and supporting vaccine deployment.

Taking broad, fast action to help countries like Malawi during this unprecedented crisis will save lives and prevent more people falling into poverty. We thank Malawi for their decisive action and will continue to support the country and its people to build a resilient and inclusive recovery.

This op-ed first appeared in The Nation, via World Bank

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An Airplane Dilemma: Convenience Versus Environment

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Mr. President:  There are many consequences of COVID-19 that have changed the existing landscape due to the cumulative effects of personal behavior.  For example, the decline in the use of automobiles has been to the benefit of the environment.  A landmark study published by Nature in May 2020 confirmed a 17 percent drop in daily CO2 emissions but with the expectation that the number will bounce back as human activity returns to normal.

Yet there is hope.  We are all creatures of habit and having tried teleconferences, we are less likely to take the trouble to hop on a plane for a personal meeting, wasting time and effort.  Such is also the belief of aircraft operators.  Add to this the convenience of shopping from home and having the stuff delivered to your door and one can guess what is happening.

In short, the need for passenger planes has diminished while cargo operators face increased demand.  Fewer passenger planes also means a reduction in belly cargo capacity worsening the situation.  All of which has led to a new business with new jobs — converting passenger aircraft for cargo use.  It is not as simple as it might seem, and not just a matter of removing seats, for all unnecessary items must be removed for cargo use. They take up cargo weight and if not removed waste fuel.

After the seats and interior fittings have been removed, the cabin floor has to be strengthened.  The side windows are plugged and smoothed out.  A cargo door is cut out and the existing emergency doors are deactivated and sealed.  Also a new crew entry door has to be cut-out and installed. 

A new in-cabin cargo barrier with a sliding access door is put in, allowing best use of cargo and cockpit space and a merged carrier and crew space.  A new crew lavatory together with replacement water and waste systems replace the old, which supplied the original passenger area and are no longer needed.

The cockpit gets upgrades which include a simplified air distribution system and revised hydraulics.  At the end of it all, we have a cargo jet.  If the airlines are converting their planes, then they must believe not all the travelers will be returning after the covid crisis recedes.

Airline losses have been extraordinary.  Figures sourced from the World Bank and the International Civil Aviation Organization reveal air carriers lost $370 billion in revenues.  This includes $120 billion in the Asia-Pacific region, $100 billion in Europe and $88 billion in North America.

For many of the airlines, it is now a new business model transforming its fleet for cargo demand and launching new cargo routes.  The latter also requires obtaining regulatory approvals.

A promising development for the future is sustainable aviation fuel (SAP).  Developed by the Air France KLM Martinair consortium it reduces CO2 emissions, and cleaner air transport contributes to lessening global warming.

It is a good start since airplanes are major transportation culprits increasing air pollution and radiative forcing.  The latter being the heat reflected back to earth when it is greater than the heat radiated from the earth.  All of which should incline the environmentally conscious to avoid airplane travel — buses and trains pollute less and might be a preferred alternative for domestic travel.

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Economy

There Is No Business, Like Small Business: New Strategy

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Marc Chagall, Circus Horse, 1964

Once upon a time, all big businesses of the world were only small businesses. However, occasionally, when big businesses classified as too big to fail, it is the special status when they start failing their own nations, damaging common good, hurting humankind at large. This is when big business allowed to morph into a Godzilla to trample all over the governments and institutions and line them up as hostages. Study the rise and fall of the world’s largest business empires of last century. 

Now Showtime: There is no business, like small business, because the small business sector is not only a giant business, but also the biggest layer of the economy, largest contributor in kind to its nation, adding jobs, paying taxes and creating real value creation, while taking all the abuse and bureaucratic nonsense.  Hence, post pandemic recovery will take no prisoners and harshly unleash economic challenges as mirror on the economic development competency and question national priorities. Here, no worries, as usual the big business will always take care of itself. Small business will be the only game left in town, something for the political leadership to cling on to and something for local trade groups to try to claim as success. The definitions on what is big and what is small are both on the table for honest evaluation and equally juxtaposed need a declaration on what business serves the economy of the nation and what business destroys the economies of nation.

New math of the post pandemic world clearly shakes down old mindsets. Unless national economic development leaders, trade groups and trade associations acquire proven entrepreneurial experiences, expertise and tactical battlefield capability at the very top and display a warrior mindset to upskill for global competitive excellence, they are just a dance party with water pistols.  Entrepreneurialism is the real value creation driving force behind the economy and not a value manipulation exercise with some certificates. Any misunderstanding on such issues only creates shiny cities, surrounded by tent-cities. Study the global economic chaos and worklessness is creeping across the world.

The illusion of super big technology driving super global growth is another myth of crypto-tyrannies. The worshiping super magnanimous technologies, including Facebook engaged in stealing the future from the next generations, now manipulating data to divide and conquer elections and serving special agenda groups causing tribalism and global socio-economic damage. Study how the future routinely stolen in broad daylight by Social Media. 

Mutation of economic thought:  Why is creation of fake economies much easier; this is where zeros bought, sold and traded as real assets, everything multiplied, subtracted, divided but nothing adds up, there are no bottom-line totals, ever. When columns do not fit anywhere, like an abstract art on canvas, for the eye of the beholder they glow in the dark. Hence, cubism-finances  and impressionist-economies, while on the other hand, real value creation economy is one of the hardest journeys,it isrealentrepreneurialism wrapped in integrity and solid hard day’s work creating common good. The reason is that small medium businesses have lost trust in their government and major institutions, while they paint the economy as abstract art and print invisible unlimited money but SME only thrown in jail if they only photocopy a dollar bill.  Covidians demand a new narrative on economic affairs and overall totals of budgets.

Unless trade groups of nations assembled and thanked profusely for their work done over the last century. Invited to join as new players, as this is now a new page for a new age and a new direction for a new digital future. Let meritocracy chart out the future of trade-groups; let vertical sectors build their own independent global age narratives to ride on entrepreneurial mindsets. When methodical agenda on simultaneous synchronization bring all key components under master plan tabled critical thinking and hardcore business experiences should lead. When vertical groups and all upskilling and reskilling features interact on digital platforms combined, eventually they will all see the light and most importantly learn the future of the global-age of digital commerce. Upskilling of all layers is critical so all grow together. Reskilling to create real value production is essential so it becomes a sustainable model. 

With no room to spend another decade on some academic feasibility studies, organize a warrior team to undertake such mobilization developments. Such national mandates are often not new funding dependent rather execution starved and deployment hungry. Why shut down the electricity of the building and climb the skyscraper via the staircase.  With the majority of nations locked up in an old mindset on digitization, today, they simply cannot zip up to the top floor, exhausted and breathless as they are climbing stairs and badly stuck on lower floors.  Pandemic recovery is harsh. Fire the first person who says they need heavy new funding, fire the second person who says they are too busy to change. Change is a gift for free but for the right mindset.

The New Trends: National mobilization of entrepreneurialism will advance; small and medium businesses will grow, as they have no choice but to upskill innovative excellence and reskill for quality manufacturing of goods and services. Learn from Asia, study Africa, stop reading newspapers but the world maps, acquire new math from ‘population-rich-nations’, and expand collaborative alliances with the knowledge-rich-nations to reach global markets.

New Trends on Small Medium Business Economy:

The new math:  why all over the world it is now attracting new entrepreneurs at rapid speed? Why are Covidians all over the world refusing high-rise, low pay, cubical-slavery and transforming to creative freedom, global-age access and hammocks. Today a USD $1000 investment in technology buys digital solutions, which were million dollars, a decade ago. Today, any micro-small-medium-enterprise capable of remote working models can save 90% of office and bureaucratic costs and suddenly operate like a mini-multi-national with little or no additional costs.

The new uplifts: How struggling economies are now exploring the “National Mobilization of Entrepreneurialism on Digital Platforms of Exportability Protocols” as alternate revolutionary thinking. Study how Africa model under Dr. Ameenah Gurib-Fakim is expanding and why the groups of western developed economies are so fearful of such a mega shift in thinking. Study Expothon on Google.

The new speed: If Agrarian age to industrial age took a millennia, while industrial age to computer age took a century, now from cyber-age to paperless, cash-less, office-less and work-less age it is almost knocking the door, just open and see. Is this the revenge of The Julian Calendar, time like a tsunami drowning us in our own depths of performance, challenging our lifelong learning and exposing our critical thinking forcing us to fathom the pace of change, swim or drown?

Time to study deeply, why forest fires always put out by creating more selected fires;  therefore let government and bureaucracy stay where they are, while creating a far superior brand new meritocracy centric digital firefighting unit to act at the top and bring required results. The cost is a fraction of what routinely wasted 1000 times in lost and missed opportunities.

Time to appreciate, why is the fear of exposure of limited talent the number one fear of adapting digitizationas digital-divide is just a mental-divide.Why without digitization there is no economy and why it has taken decades?

Time to apply entrepreneurial mindset, why incentivizing all frontline management of all midsize business economic development and foreign investment attraction and export promotion bodies is a requirement of time? Observe the power of entrepreneurial mindset in the driver seat, deploy national mobilization of midsize economies, accept upskilling as a national mandate, and digitization as national pride.

Is there any authoritative leadership on entrepreneurialism present in the boardroom?  No need to have chills, as mainly from Asia, there are some 500 million new entrepreneurs already on the march, therefore, no need to ask where are they headed but rather ask where your national entrepreneurialism is going? Study why entrepreneurialism is neither academic-born nor academic centric, why all most successful legendary founders that created earth shattering organizations were only the dropouts?

Is there a new realization or back to water pistol games? Not to be confused with academic courses on fixing Paper-Mache economies and already broken paperwork trails, chambers primarily focused on conflict resolutions, compliance regulations, and trade groups on taxation policy matters.  Mobilization of small medium business economy is a tactical battlefield of advancements of an enterprise, as meritocracy is the nightmarish challenges for over 100 plus nations where majority high potential sectors are at standstill on such affairs. Surprisingly, such advancements are mostly not new funding hungry but mobilization starved. Observe the trail of silence. The empty shelves are not supply chain issues but symptoms of broken down economies. Economies are not cryptopia; they are about real value creation by the local small medium business forces to create local grassroots prosperity. The failure is not having the right mindsets.

Five things to watch for the year 2022: US election will surprise the world as it has the last two times. World economies tested, financially along with leadership competency levels. Big business will remain big and undisturbed.  The Covidian will march for truth. Small medium business mobilization will further grow as a reliable answer to the economy and jobs.This is how humankind will crawl towards critical thinking.

The rest is easy

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