ARCHIVES HISTORIQUES 
DE LA COMMISSION 
 
 
 
COLLECTION RELIEE DES 
DOCUMENTS "COM" 
 
 
 
 
COM (84) 205 
 
 
 
Vol. 1984/0102 
  
 
Disclaimer  
Conformém ent au règlement (CEE, Euratom) n° 354/83 du Conseil du 1er février 1983 
concernant l'ouverture au public des archives historiques de la Communauté économique 
européenne et de la Communauté européenne de l'énergie atomique (JO L 43 du 15.2.1983, 
p. 1), tel que modifié par le règlement (CE, Euratom) n° 1700/2003 du 22 septembre 2003 
(JO L 243 du 27.9.2003, p. 1), ce dossier est ouvert au public. Le cas échéant, les documents 
classifiés présents dans ce dossier ont été déclassifiés conformément à l'article 5 dudit 
règlem ent. 
In accordance with Council Regulation (EEC, Euratom) No 354/83 of 1 February 1983 
concerning the opening to the public of the historical archives of the European Econom ic 
Communit y and the European Atom ic Energy Communit y (OJ L 43, 15.2.1983, p. 1), as 
amended by Regulation (EC, Euratom) No 1700/2003 of 22 September 2003 (OJ L 243, 
27.9.2003, p. 1), t his file is open to the public. Where necessary, classified documents in this 
file have been declassified in conformity with Article 5 of the aforementioned regulation.  
In Übereinstimmung mit der Verordnung (EWG, Euratom) Nr. 354/83 des Rates vom  1. 
Februa r 1983 über die Freigabe der historischen Archive der Europäischen  
Wirtschaftsgemeinschaft und der Europäischen Atomgem einschaft (ABI. L 43 vom  15.2.1983,  
S. 1), geändert durch die Verordnung (EG, Euratom) Nr. 1700/2003 vom 22. Septem ber 2003  
(ABI. L 243 v om 27.9.2003, S. 1), ist diese Datei der Öffentlichkeit zugänglich. Soweit  
erforderlich, wurden die Verschlusssachen in dieser Datei in Übereinstimmung mit Artikel 5  
der genannten Verordnung freigegeben.  
COMMISSION OF THE EUROPEAN COMMUNITIES
COM(84) 205 final.  
Brussels, 11 April 1984,
COMMISSION COMMUNICATION TO THE COUNCIL
Preparation of the Fourth General Conference of the  
Unted Nations Industrial Development Organisation (UNIDO IV)
Vienna, 2-18 August 1984
(84) 205 final.

C O M M IS S IO N  C O M M U N IC A T IO N  T O  T H E  C O U N C IL
Subject :  Preparation of the Fourth General Conference of the
United Nations Industrial Development Organisation (UNIDO  IV)
Vienna, 2-18 August 1984
B A C K G R O U N D  A N D  IN T R O D U C T IO N
U N ID O  IV will b e one of the main events in the North-South  
dialogue in 1984 and will be the m ost significant international conference  
of this type sines U N C T A D  VI in .J u n e  1983, U N ID O  IV is being prepared in  
the absence of a  decision to launch global negotiations on international  
economic cooperation for development, North-South discussions are at  
present taking place against a  background of the poor economic and industrial  
progress of m a n y  developing countries, preoccupation with world financial and  
monetary arrangements, and concern over the functioning of the  
world trading system. The preparation of the Conference also co m es at a  
time w h en  signs of econom ic recovery are becoming clearer in a  num ber of  
industrialised countries. Apart from being a  forum for discussions of  
problems and issues in world industrialisation through its General Conference  
and through the U N ID O  System  of sectoral Consultations, U N ID O  has an  
important role as the U.N, body for delivery of technical assistance in the  
field of industrialisation.
The history of U N ID O  General Conferences has not been a  happy one,  
U N ID O  I I I  in N e w  Delhi in 1980 ended in deadlocked negotiations and  
confrontation, with the N e w  Delhi Declaration and Plan of Action being  
adopted by majority vote, and with all the countries of Group B  except  
Turkey voting against the text. A m o n g  the m a n y  stumbling blocks at this  
Conference had been proposals for a  300 billion dollar fund for industrial  
development and for disaggregation of the Lim a Target for the 2 5 %  share of  
developing countries in world industrial production in the year 2000 by  
sectors and regions.
'.P ro v is io n a l address:  R u a  de U  L o i 2 0 0 ,  B - Î 0 4 9  Brusseis -  T e le p h o n e  735 0 0  4 0 / 7 3 5  8 0  4 0 - T e le g r a p h ic  a d d re s s : " C O W E U R  Brussels'· -
T a ie x :  ‘ * r « 8 ? 7 C O W E * J  3 "

-  2 -
Although the Second General Conference of U N ID O  in 1975 ended with  
a  broader m easure of agreement, and only the United States yoted  
against the text as a  whole, other industrialised countries expressed  
their disagreement or reserve on parts of the Lim a Declaration and  
Plan of Action, and a  num ber of them  did not subscribe to the 2 5 %  
target for the year 2000.
U N ID O  IV will probably be the last U.N. conference in this  
format on world industrialisation, since it is likely that U N ID O  will  
b e shortly transformed into a  specialised agency of the U.N., and  
following this, UNIDO, in its n e w  form, will hold General Conferences of  
possibly m ore m odest political dimensions o n  a  biennial basis.
Preparation for U N ID O  IV has been under w ay for s o m e  time,  
since it had originally been anticipated that the Conference would b e  
held at an  earlier date. The U N ID O  Secretariat has organised international  
expert group meetings to consider five of the m ain issue areas of the  
Conference and is at present issuing the secretariat documentation for  
each of the agenda items. (See annex for Agenda). The major outstanding  
events in the preparatory calendar will be the four developing country  
regional ministerial meetings, which will consider the issues before  
the Conference between M arch and April of this year, and the meeting  
of the U N ID O  Industrial Development Board, which will act as the Prep­
aratory Committee for the Conference, from 2-18 May.
N E W  D E LH I A N D  LIM A D E C L A R A T IO N S  A N D  P L A N S  O F  ACTIO N. R ETR O S P E C TIV E  A N D  
P E R S P E C T IV E
Under agenda item 4  - N e w  Delhi and Lim a Declarations and Plans  
of Action: retrospective and perspective - the Conference will review  
developments in world industrialisation. S o m e  attention will concentrate  
o n  the extent to which progress is being m a d e  towards the Lim a target,  
an d  the Com m unity will be bound to recognise that progress in industrial­
isation in developing countries between 1975 and the present time has  
been disappointing. F ro m  the outset it should be said that it is  
very difficult to measure w hat is the share of developing countries in  
world manufacturing value added at any point in time, and there are c o m ­
ponents of industrial value added in developing countries which are very  
difficult to evaluate precisely or at a ll. The U N ID O  Secretariat itself  
has had difficulties with this; for example, at the time of the Lim a

- 3  -
Conference it w a s  thought that the share w as about 7% , whereas  
the Secretariat n o w  believes that the share w as ir, fact 1 0 %  in 1975.
Th e  Secretariat’s  estimate for 1982 is 11% , implying that in the  
seven years following the adoption of the Lim a target the share of  
developing countries in world M V A  nad increased by only one percentage  
point. In fact the years 1975 and 1982 are not entirely representative,  
since 1975 w a s  probably a  relatively favourable year for developing  
countries in that the industrialised countries were at the bottom of  
the 1974-1975 recession, whereas for a  variety of reason^. both o il-  
producing and non oil-producing developing countries were able to  
maintain, or even increase, their levels of economic activity through  
this period. O n  the other hand, in the present recession the developing  
countries have been m ore adversely affected by the dow nw ard m oyem ent  
in the economic cycle than the industrialised countries, s o  that the  
figure for 1982 is relatively low  in relation to the longer fern trend·  
According to the U N ID O  Secretariat an extrapolation of present trends  
in the share of developing countries in world manufacturing value  
added (M V A ) would give them  14.9% in the year 2000. In the Communication  
to the Council prepare^ in 1979 in advance of U N ID O  I I I  the Com m ission  
noted that there w ere s o m e  grounds for thinking that developing  
countries might be able to d o  better than this extrapolation exercise  
would suggest. Although experience in the present recession is dis­
couraging, the Com m ission would not change its view of the likely long­
term development. It m ust however be noted that the 2 5 %  figure oppesring  
in the Lim a Declar ation is well outside the range of likely possibi title s .
It should also b e noted that according to U N ID O  statistics, the  
majpr shifts in snares of world industrial production have not been  
essentially from industrialised to developing countries, but over a  long  
period since the Second World W a r were from the United States to Japan  
and Eastern Bloc countries. M ore recently, the share of the European  
Com m unity in world industrial production has apparently fallen, while
the shares of Japan and the Soviet Union have pursued their tendency to  
increase. A t the 3 a m e  time, certain developing countries have m a d e  
significant gains, while others have seen their shares stagnate or even  
fall back.
A s  the U N ID O  Secretariat notes, there have been striking  
differences in performances between areas of the developing world in  
industrialisation. Progress has been particularly disappointing in

- 4 -
Latin America, where the share of the region in world M V A  stagnated in  
the period 1975-1982. In fact there w a s  s o m e  increase in the late 1970s  
which w a s  cancelled out in the great difficulties experienced by almost  
all countries in this region at the beginning of the 1980s. Nonetheless,  
Latin America s till accounts for just over half of manufacturing value  
added in all developing countries.
In contrast with the poor performance of Latin America has been the  
relatively rapid increase in the share of south and south-east Asian  
countries from 2.7%  in 1975 to 3.4% in 1982. In fact this region accounted  
for the lion's share of the increase in the share of developing countries  
as a  whole. Within this group, a  num ber of countries in east and south-east  
Asia have been particularly dynamic performers.
The share of Africa increased from 0.88% in 1975 to 1.11% in 1982,  
but this continent's share remains modest, and here again, a  large part of  
the progress in industrialisation occurred in a  num ber of countries 
including particularly s o m e  of those with a  Mediterranean coastline,  
which already enjoyed a  significant industrial base, while in Africa south  
of the Sahara performance w a s  variable, and in m a n y  countries progress  
w a s  slow.
It is striking that there w a s  n o  relative improvement of the  
position o f the very poorest countries, the least-developed, w hose share in  
world M V A  has remained below 0.2% since the end of the 1960s, and has  
even tended to fa ll.
Finally it should be noted that the position of China is not taken  
account of at all in all these statistics, so that the shares given are  
the shares in world M V A  less China's M V A . This is because of the paucity  
of information o n  Chinese industrial production. The U N ID O  Secretariat  
provides cn estimate for China's share suggesting an increase from 2.93%  
in 1977 to 3.83% in 1980.
O n e  of the purposes of the Conference should be to see h o w  and  
w h y  all these developments occurred and to see w hat lessons can be drawn  
from this experience. O f course the explanations for differing performances  
are complex and varied and are to be found both in international economic  
developments and in the policies pursued and events occurring in individual
/

- 5 “
countries or groups of countries. O n e  of the major factors explaining  
developments which have occurred has been the social and economic environ­
m ent prevailing in different parts of the developing world. Obviously,  
countries which have enjoyed long periods of stability have had a  better  
chance to improve their position than countries which have know n frequent  
and disruptive internal and external events. However, U N ID O  IV should  
be concerned with economic problems, rather than political developments.
The World Bank's 'World Development Report' of 1983 has  
drawn attention to the value of an effectively working price m echanism  in  
the allocation of resources in promoting economic development in general,  
and this is n o  doubt particularly valid for the industrial sector. This  
might provide s o m e  clue to the background to the strong performance of s o m e  
east Asian developing countries.
There is n o  doubt that world financial developments have played a  
significant rote in the evolution that has occurred, andLatin American  
countries a m o n g  others have certainly suffered because of the world debt  
crisis which built u p  at the beginning of this decade, and then broke in  
the autum n of 1982. Here the very high level of U.S. interest rates w a s  
a  key factor in just the sam e w ay as the very low  level of U.S. interest  
rates prevailing in the early and mid-1970s helped these countries to  
maintain their level of economic activity and pursue their industrial  
development through the 1974-75 recession with the assistance of borrowed  
funds. It should be stressed, however, that whild debt problems are a  very  
major factor in the economic problems of m a n y  developing countries,  
domestic developments have also played a  significant role, and s o m e  
other developing countries have been able to increase exports m ore  
rapidly and in parallel with growing debt service, and so combine a  high  
level of indebtedness with continuing economic and industrial growth.
Another factor in industrial performance is the ability to develop  
technology and then innovate by assimilating this successfully into the  
production process, and differences in the extent of innovation in
different parts of the world have certainly been responsible for so m e of  
the differentials in performance. Over the past few years, it appears to have  
been the case that the United States, Japan and s o m e  parts of developing  
Asia have been able to innovate in industrial production m ore successfully  
than Western Europe or Latin America for example. In m an y parts of the

-  6 -
developing world there is a  preoccupation with failure to  
assimilate n e w  technology in contrast with the development of  
'hi-tech* industries in the United States and Japan. To the extent  
that 'hi-tech' or 'sunrise' industries account for a  growing share of  
manufacturing value added in the world as a  whole, countries in  
which traditional 'smoke-stack' industries maintain their place in  
the industrial structure will see their share in world M V A  tend to  
decline. This indeed has been at the centre of the Commission's  
preoccupations with respect to the Community's o w n  industrial performance.
It has been argued that high technology industries are not necessarily  
appropriate for application in developing countries, but in practice  
it is very difficult to establish any generally applicable rules or  
principles a s  to w hat levels of technology are appropriate in different  
countries and industries, and it can certainly be concluded that one  
form of innovation or another can m a k e  a  substantial improvement to  
the productivity of m a n y  industries in developing countries, and help  
to create n ew  ones.
There are significant links between industry and other  
sectors of the econom y, and a  strong performance in the agricultural  
sector can have a  positive effect o n  industrialisation by improving  
the foreign exchange position of a  country and by stimulating food  
processing and other industries connected with agricultural development.
1
In considering these matters, it is worth reflecting on the fact  
that UNIDO's subject matter m ean s that it is bound to focus s o m e  
attention on the performance of individual countries or groups of  
countries which is not always the case for other U.N. agencies. The  
Secretariat is therefore obliged to deal with questions which contain  
inherent political problems and should o n  the whole be co m m en d ed  for  
its handling of these in its documentation.
In com m enting o n  developments at the Conference, the Com m unity  
should draw attention to the fact that industrialisation is only one  
aspect of economic development and is not necessarily an absolute priority.  
In m a n ' lowincome developing countries for example agricultural develop­
m ent m a y  be m ore important while in advanced industrialised countries,  
the see.'ice sector will normally account for a  growing share of G N P  
at the expense of the manufacturing sector* This m eans that there  
will n-t always be a  close correlation between a  country's share  
in world iVA and its share in world G N P  and global economic well-being.

- 7 -
The discussions on item 4 should not necessarily lead to  
agreement o n  precise measures by U N ID O  or particular countries or  
groups of countries, but should rather attempt to review what is going  
on, so that all countries can draw their o w n  conclusions from present  
developments, and see whether these conclusions will lead them to  
introduce any changes in their industrialisation policies. The  
C om m unity could take account of the above co m m ent in its statements  
in the plenary session under this agenda item.
I.NTfftNAHQNAL. C O O P E R A L L O N * R E L E  V A N T  NATIO N A L  A C TIO N S  IN C LU D IN G  INDUSTRIAL  
EOLI-CIEJL·  A N D .-U N ID O V s C O N TR IB U TIO N  IN CRITICAL A R E A S  O F  INDUSTRIAL  
.EEYELQP.MEMI . 1585-.2ÛQQ.
The main substantive issues in the remainder of the agenda  
appear under item 5  under the overall heading 'International cooperation,  
relevant national actions including industrial policies, and UNIDO's  
contribution in critical areas of industrial development 1986-2000'.
The Com m ission staff will submit detailed working papers on these issues  
as a  basis for Com m unity preparation for the Conference over the next  
few months. The following considerations on these items are therefore
intended only to provide general orientations for the Community.
H u m a n  Resources
t
Under the heading of item 5, the first sub-item is  
'accelerated development of h u m an  resources for industrial development'.  
This should be a  relatively uncontroversial issue, since the need to  
pay additional attention to h u m an  resources' development is almost  
universally recognised. The Com m unity and A C P  states in the second  
L o m é  Convention are paying m u c h  greater attention to this area than  
had hitherto been the case.
A t the multilateral level, it is essential that UNIDO, ILO and  
U N E S C O  w ork closely together so as to establish and operate program m es  
and activities with the m axim u m  effectiveness in this area. At the  
national level in developing countries, resources should be devoted to  
industrial m anpow er training in relation to the industrial needs of the  
country. For this to be done it is of course essential for a  developing

- s -
country to have s o m e  view of future needs in this field so that  
there can be a  m atch between education and training program m es in  
educational establishments and industry, and the actual needs of the  
country. O n  this point the First U N ID O  Consultation cn the Training  
of Industrial M anpow er held in Stuttgart in Novem ber 1982 concluded  
that "Integrated H u m a n  and Resource planning including a  clear national  
policy to develop the training of industrial m anpow er to m eet present  
and foreseeable needs in regard to the complementarity between national  
education and industrial training systems" w a s  a  basic element fa c ilit­
ating the mastering of the industrialisation process by developing  
countries. A s  far as the Com m unity is concerned, a  very large num ber of  
developing country nationals receive education and training· in  
different organisations within the Community, and the M em ber States will  
certainly be ready to keep open and even in s o m e  cases expand the  
opportunities available.
Technology
The strengthening of scientific and technological capacities  
for industrial development in developing countries is likely to be an  
important agenda item. A s  already mentioned above, effective develop­
m ent and use of technology is a  very crucial com ponent in industrial  
progress, and it is certainly essential for developing countries to develop  
and use the m ost appropriate technology for inndvation in industry·
U N ID O  h as an important role to play in this area.
The Conference should not focus too m u c h  on terms and conditions  
of transfer of technology from industrialised to developing countries; these  
matters are under discussion in other fora, and U N ID O  is at present  
probably devoting at least as m u ch  attention as it needs to this area of  
w ork through its work in the field of m odel contracts and licensing  
agreements. In passing, it m a y be noted that increased direct foreign  
investment can in m a n y  cases be a  valuable w ay for developing countries to
acquire the benefits of production techniques developed elsewhere.

- 9  -
U N ID O  seem s Likely to place s o m e  emphasis on the need for joint  
efforts to organise research in different fields between countries  
so  that the indigenous technological capability of the developing countries
can be increased* M ore international cooperative efforts in this direction  
should certainly be welcomed, but they should correspond to a  real  
dem and, and not be creations of an essentially bureaucratic or political  
character. There is n o  reason w h y  such cooperative efforts should be  
confined to developing countries alone or indeed to industrialised  
countries alone; rather they should be organised so as to provide the  
m a xim u m  benefits to the developing countries in particular, at m inim um  
cost to all involved.
Financial Resources
A s  already noted, this area provided one of the major stumbling-  
blocks which prevented a  successful outcom e to the third General  
Conference. Since 1980, discussions have been going on in the ID S  
o n  the question of financial resources for industrial development,  
particularly in relation to the UNIDO · secretariat's proposal for a  
300 billion dollar international bank for industrial development (IBID).  
The Com m unity has argued that discussion of a  proposal of this type  
is really outside the scope of U N ID O  since in reality it m ust be  
considered as a  proposal relating to the m ore general question of  
transfer of resources from industrialised to developing countries,  
and issues of this type are m ore properly discussed in the Bretton  
W o o d s  institutions, or perhaps in U N C T A D . Accordingly, the Com m unity  
should m ake it clear from the outset that U N ID O  IV cannot be in the  
business of negotiating proposals which in fact involve major reform  
of the world monetary and financial institutions. However, the Com m unity  
should be ready to look at issues which relate particularly to  
industrial financing, for example, problems which developing countries
have in funding individual projects.
A t the s a m e  time the Com m unity should be ready to enter  
into a  discussion of the implications of world financial developments  
for industrialisation and see w hat lessons m a y  be drawn from recent or  
present experience. In its documentation the U N ID O  Secretariat com m ents  
o n  the vagaries of the western monetary system, .
I

-  10  -
and recom m ends that developing countries use local currencies m ore  
in trade transactions between themselves. However, in so doing, the  
U N ID O  Secretariat seem s to ignore the reasons w h y  developing countries  
are s o  dependent o n  their limited reserves of currencies of western  
countries. A  major reason is of course that the currencies of m a n y  
developing countries d o  not represent a  sufficiently stable store of  
value or m edium  of exchange, but these are matters which relate to  
financial policy in developing countries themselves and are difficult  
for a  body such as U N ID O  to c o m e  to grips with in a  meaningful way.
With respect to the general criticisms of the world financial  
system which have been m a d e  by developing countries, U N C T A D , and  
the U N ID O  Secretariat, it should be mentioned that the C om m unity  
itself has o n  a  num ber of occasions criticised the degree.of interest and  
exchange rate instability n o w  prevailing, and particularly the present  
level of interest rates, and has called for greater stability in world  
financial arrangements.
The Secretariat is to be congratulated for drawing attention  
in its documentation to the key question of the savings ratio in  
developing countries in relation to the need to mobilise adequate  
resources for industrial development. A t the s a m e  time, m a n y  
developing countries will continue to require access to substantial  
financing from external sources and the Com m unity should give its  
views of the role of aid flows, commercial bank lending and direct  
foreign investment in contributing to the industrialisation process.
Energy
It appears to be in the interest of all countries to promote  
a  wide-ranging discussion of energy issues in relation to industrial­
isation, considering that such problems are not really adequately  
treated elsewhere in multilateral fora. The U N ID O  Secretariat  
has noted that m a n y  developing countries have to import large  
quantities of energy, and the cost of fuel imports for oil-deficient  
developing countries is n o w  running at 50 billion dollars annually.  
Given the financial constraints facing m a n y  developing countries,  
reliance o n  imported energy can be a  restriction on industrial  
development. However, experience in recent years has sh o w n  that

-  11 -
growth and industrial development need not necessarily b e as energy-  
intensive as w as once thought inevitable. In particular, techno­
logical advances can in m an y cases reduce the requirement  
to burn fossilized fuels. The Conference might therefore
usefully focus on further developments in improving industrial energy  
efficiency and in increasing self-sufficiency and strengthening  
and diversification of the energy resources base in developing countries.
World industrial restructuring and redeployment
Apart from being a  particular point on the agenda, this issue is  
the central theme underlying the Conference discussions as a  whole,  
and is closely related to the evolution of world trade. The Com m unity  
and other industrialised countries are often criticised for allegedly  
protectionist policies, and UNIDO's documentation does not fa il to  
recall this theme. The Com m unity should point out that the open multi­
lateral trading system has in substance remained intact. In  
spite of the present recession the volume of world trade has only
declined marginally, and is probably once m ore on the increase. This  
suggests that trade flows have been affected m ore by changes in levels  
of d em an d  than by particular protectionist measures.
The U N ID O  Secretariat in its documentation seem s to have  
acquired a  m ore refined approach to issues of^adjustment and redeploy­
ment, and the idea of simply transplanting industries from industrialised  
to developing countries has largely disappeared from the Secretariat's  
thinking. In its approach to this issue, the Com m unity will need to  
emphasise the fact that adjustment is a  continuous process which has  
been going on in its economies and which will continue into the future.
In this context, the desirability of being able to foresee adjustment  
trends should be stressed, and the Com m unity should explain its view  
of the role of public authorities of stimulating and facilitating the  
adjustment process, whether this b e  in the form of direct intervention  
or through measures such as provision of unemployment benefits, re­
training fa cilities and measures in the context of social and regional  
policies which'can create the conditions in which adjustment can  
take place m ore easily. The Com m unity should be ready to pursue
• • / f t

-  12  -
structural adjustment policies with a  view inter alia to encouraging  
domestic factors of production to m oves from lines of production  
which are less competitive internationally, particularly where the  
developing countries have, or will have, an identifiable long-term  
comparable advantage. The main instrument contributing to structural  
adjustment continues to be the maintenance of a n  open market, which  
in turn will be facilitated by favourable economic conditions.
Econom ic cooperation a m o n g  developing countries (E C D C )
This subject is likely to be one of the main themes of the  
Conference, and in a  general sense is prominent in the preoccupations  
of the developing countries present. N um erous meetings at ministerial  
level a m o n g  the Group of 77 have in recent years looked for w ays to  
strengthen E C D C , but in s o m e  cases these gatherings have produced  
m o re political rhetoric than identifiable action. Nonet he'l ess, it  
can be observed that over the last decade, trade between developing  
countries has increased m ore rapidly than world trade as a  whole.
There have been num erous efforts at regional economic integration and  
in U N C T A D  efforts are being m a d e  to establish a  generalised system of  
ta riff preferences between developing countries. The Com m unity has  
traditionally adopted an open-minded and positive approach to regional  
integration efforts, and indeed has in a  num ber of cases provided  
substantial material support.
In its documentation the U N ID O  Secretariat dwells som ew hat  
o n  the problem of external economic vulnerability of developing countries  
as a  group, relating this to the general phenom enon of world economic  
interdependence. S o m e  readers of this documentation might be tempted  
to conclude that developing countries should strengthen the extent  
of their collective self-reliance to the detriment of further efforts  
in the field of North-South cooperation, but this is not really the  
conclusion of the U N ID O  Secretariat which, like the Community, feels  
that South-South cooperation should be a  complement to intensified
North-South cooperative efforts. The U N ID O  Secretariat seem s to  
confuse the external economic vulnerability of the South as a  whole,  
and the vulnerability of individual countries to external developments.  
These should be considered as separate issues. In general, the  
Com m unity would maintain that with appropriate m anagem ent of financial,
/

- 13 -
industrial and trade policies, it is in the interests of individual  
countries to maintain open economies, and for volumes of international  
trade and investment to increase, and the thrust of policy should b e  
directed towards bringing about an allocation of resources that will,  
generate the greatest industrial wealth and m a ke the greatest con­
tribution to national welfare. The small economic size of m a n y
developing countries constitutes a  major handicap to their industrial­
isation, and further efforts at integration should help to alleviate
this handicap. The U N ID O  Secretariat com m ents tnat South-South joint  
ventures ow n ed  and m anaged by developing countries m a y  be a  superior form  
of industrial integration to the creation of custom s unions and other  
form s of market integration schemes. It would be better for the  
Conference to avoid judgements of this kind and rather encourage  
developing countries to w ork towards efforts at integration which will  
have an  effect both o n  the private and the public sectors. Incidentally,  
it is interesting that the Secretariat shoulu s o  clearly advocate  
joint production ventures between developing countries, since in other  
meetings representatives of the Secretariat often co m m en t o n  the  
practical and political difficulty of getting developing countries  
to cooperate in such ventures.
Finally, it m a y  be noted that U N ID O  has recently c o m e  to devote  
an  increasing part of its resources to meetings related to econom ic  
cooperation between developing countries, and it is striking that  
activities in this field have attracted less co m m en t from industriali-  
•s e d  countries in U N ID O  than is the case w h en  the sam e matters are  
discussed in U N C T A D , The Com m unity continues to support w ork in the  
field o „ f economic cooperation a m o n g  developing countries by the U N ID O  
Secretariat, but should at the s a m e  time insist on the maintenance of  
the principle of universality of the United Nations system.
• · ! , ·

- 14 -
The activities of U N ID O
The Conference will of course be an occasion to review the  
different activities of U N ID O  in providing direct assistance to  
industrialisation in the developing countries,, and the M em b er States  
of the Com m unity will certainly continue efforts to m ake UNIDO's  
technical assistance m ore effective, particularly in the light of the  
recent U.N. evaluation of these activities* U N ID O  should also fe e  
encouraged in its w ork in the field of investment promotion, and a  
reasonable part o f the Secretariat's resources should continue to be  
devoted to monitoring and examining of trends in world industrialisation  
both in general and at sectoral level, since this work can be o f great  
value in identifying and in s o m e  cases overcoming difficulties in  
industrial development, and in formulating industrial policy in  
developing countries. The analysis resulting from this w ork is often of  
high quality and this is certainly true in the case of the Secretariat's  
publication 'Industry in a  Changing World', which is a  special issue  
of the Industrial Development Survey for the Fourth General Conference.
The U N ID O  system of sectoral Consultations is currently under  
review in Vienna, and there are m any, both in the developing and  
industrialised countries, w h o  feel that the System  of Consultations  
could be m a d e  a  m ore effective instrument in further industrialisation.  
The Community's representatives should continue to express the view  
that the consultations sometimes concentrate too m u c h  attention on issues  
which are of rather an abstract nature, and that Consultations should  
in the first place attempt to examine what is really going on in the  
industrial sector covered, and then attempt to draw conclusions and  
recommendations o n  appropriate policy and actions from this analysis of  
actual experience. This relates to a m ore general point that U N ID O  
som etim es attempts to look for generally applicable solutions, where  
problems in fact arise in quite different forms in different countries.  
Obviously, industrialisation issues arise in Least Developed countries  
in a  different w ay to the newly, industrialised countries, but even  
within these groups individually tailored solutions are required for  
different countries in formulating industrial policies.
/

O n e  issue which is not covered extensively in the  
Secretariat’s  documentation is the relationship between industrial”  
isat ion and the environment. The Com m unity might co m m en t on this  
point and-explain that it is better to foresee environmental problems  
in industrialisation before they arise, rather than dealing with them  
afterwards. This would be the w ay to achieve environmentally sound  
industrial development. The Com m unity could indeed offer assistance  
to developing countries and U N ID O  in this field, as well as encourage  
cooperation between U N ID O  and the United Nations Environment Programm e.
C O N C L U S IO N
The matters discussed above will need to be considered in  
m u c h  m ore detail by the Com m unity in the course of the next two or  
three months.
It is likely that the Conference will be an occasion for a  
general review of policy, rather than a  decision-making forum, but the  
Com m unity should consider whether any policy initiatives might oe taken,  
possibly in such fields as h u m a n  resources development, technology development,  
energy for industrialisation and assistance in project identification and  
feasability studies. The Conference should of course be an occasion to  
try to establish between the industrialised and developing countries a  
c o m m o n  view of progress and problems in world industrialisation and -o 
the m a x im u m  extent possible, agreement on the general policy orientations  
which will be required in order to m ake possible further progress in  
developing countries. F ro m  the organisational point of view it would be  
better for the Conference to formulate its conclusions in >h e iorm  of  
resolutions in separate areas, rather than draw u p  a  single docum ent in  
the form of a  declaration and plan of action in which the overall result  
of the Conference would depend o n  agreement being reached o n  certain  
issues yhich might prove particularly controversial. In fact, there  
are s o m e  signs that the G roup of 77 in Vienna at Least m a y  be looking  
for the Conference to achieve as broad an  area of consensus as possible,  
so  as to provide a  better political base for UNIDO's w ork in the future,  
and bring industrialisation issues m ore into the forefront of  
North-South discussions. It is to be hoped that this moderate and  
pragmatic attitude will prevail in the regional ministerial meetings of  
developing countries and that this, com bined with a  positive Lead from  
the Com m unity and other industrialised countries, will m ake possible  
* -or·' r *.arv icsitive out c o m  I -^n wa· the at th·