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COMMISSION OFTHEEUROPEAN COMMUNITIES
COM(79)576final
Brussels.22ndOctober1979
COMMUNICATION FROMTHECOMMISSION TOTHECOUNCIL
ONTHEPREPARATIONS FORUNIDOIII:
POLICYORIENTATIONS
'I
■/
COM(79)576final

PREPARATIONS FORUNIDOIII:POLICYORIENTATIONS
Introduction
1.TheThirdGeneralConference 1oftheUnitedNationsIndustrial
Development Organization (UNIDO)tobeheldinNewDelhifrom21January
to8February1980willbeanimportantstageintheprogressof.the
North-South DialoguecomingafterUNCTADVheldinManilainMayof
t
thisyearandbeforethe1980SpecialSessionoftheGeneralAssembly
oftheUnitedNations.TheUNIDOIndustrial Development Boardwill
meetinViennafrom12-16Novemberinordertofinalizepreparations -
fortheThirdConference .TheGroupof77developing countriesareat
presentmeetingwithinthreeregional ;,groupstoconsidertheissueswhich
willariseattheConference andtherewillprobablybeameetingofthe
{
wholegroupinDecember.ThepurposeofthisCommunication istopropose
thepoliticalorientations thatshouldshapetotheCommunityattitude
beforeandduringtheThirdConference . '
'' ■I• Î
»
2.TheConferencewilltakeplaceagainst ,abackgroundafotiter
I
meetingsinthecorltinuirig North-South Dialoguewhichhave'hadorwill
haveabearingontheindustrialization ofdevelopingcountries.These®
includethe"meeting oftheTradeand.Development BoardinOctoberand
thecontinuing workoftheCommitteeoftheWhole.Attirelatter's
sessionheldinSeptembertherewerelongdiscussions onindustrialisation
whichendedwithoutagreementbeingreachedonadrafttextwhichwas
■·
submittedbytheGroupof77.Dependingor?theoutcomeofdiscussions
inthe3AtfvSessionoftheGeneralAssembly,theCommitteeoftheW4iol«
maybecalledupontoprepareanewr^bundofglobalnegotiations on
Worth-South Issues.Thispreparation wouldprobablytakeplace\ntfo«
firsthalfof1980. I ..V-
4
3.
2 ./
Î
«rieurnuiminoi

3.TheworkoftheConference shouldtakeaccountofprogressbeing
madeinrelatedareasinotherforaand<commitments madebytheCommunity
andothercountriesshouldbeseeninthelightofcommitments -theymay
havemadeelsewhere.Itmayalsobeappropriate tobearinmindthe
needwhichcouldarisefortheCommunitytobeabletotakeconcrete
initiatives attheglobalnegotiations onNorth-Sputh problemswhich
maybeheldin1980.
4.Becauseoftheimportance andcomplexityofthequestionsto
betackled,UNIDOIIIwillneeddetailedandcarefullyprogrammed
preparation inthecontextofpoliticalorientations 'decidedbythe
Council,followingthisCommunication theCommissionserviceswill
submitworkingdocumentsintendingproposalsrelatingtothevarious
agendaitemsoftheConference .Theseproposalsshouldenablethe
Communitytomaintainitsunityandtakeinitiatives whereappropriate
onthedifferentsubjectsunderconsideration .Moreover,asandif
necessarytheCommissionwillcommentonthesituationwhichemerges
followingtheNovembermeetingoftheIndustrial Development Boardand
theoutcomeofthedevelopingcountries'preparatory conferences .
5.Workonthepreparation oftheConferenceisinprogressatthe
UNIDOSecretariat inVienna.Amongotherdocuments UNIDOhasproduced
asurveyentitled"WorldIndustrysince1960–ProgressandProspects"
inJulyofthisyear,whichwillprovideaninformation backgroundfor
theConference .UNIDOhasalsopublished adocument
entitled"Industry2000-NewPerspectives",whichamongother
thingscontainseightmajorproposalsforactiontostimulateindustrial
development inthedevelopingcountries.Theseproposals mayforman
importantpartofthebasisfortheNewDelhidiscussions andtheCom­
missionserviceswillcommentonthemindetailintheworkingdocuments*
6.WhileUNIDOIIIhastobeseenaspartofawiderprocessof
dialogue^itisnecessarytobearinmindthespecificvocationofUNIDO
onmattersrelatingtoindustrialization .Agreementhasrecentlybeen
reachedonthetransformation oftheorganization intoaspecialized
\
'.':>'.' ' ■*
■."i .;..*/*.

■'L-3-J l..
f
i
i
agency®ftheUnitedNationsandaccordingtothepreambleofitsconsti­
tutionUNIBO"...shallplaythecentralroleinarwlberesponsible for
reviewing andpromotingthecoordinating ofallactivitiesoftheUnited
Mati®nssysteminthefieldofindustrial development".Inconcentrating
onthesetasksUNIDOwillavoidinterfering undulywithnegotiations
whicharepresentlyinprogressinotherfora,particularly .thosebeing
heldintireUnitedNationsontransnational corporations ,infetWCTADon
acodeforthetransferoftechnology andinWIPOonintellectual
property.ItshouldalsobeclearthatUNIOOiswotaforumfornego-
i • ■ ■■■tiationoftradeproblems,whichshouldcontinuetobetreatedin6ATT
andUNCTAD. '
i
7.Thereisageneralneedtoimprovecoordination betweendiffe­
rentagenciesandorganizations withintheUnitedNationssystemand
especially betweenUWIDOandUWCTABwhoseworkisgerverallycarriedon
infieldswhicharemoreorlesscloselyrelated.Thisapproachshould
Iwlpavoidunnecessary overlapping andduplication ofeffortandmake
1
>tpsssitoleforUwitedNationsagenciestoimprovetheirowneffective-
rwss.TheCommunityshouldgenerally ;adoptaverycautiousapproachonthe
crestienofnewinstitutions andratherstresstheneedf©rmakingthe
bettpossibleuseoftheexistinginstitutional framework.
I -
8. ■Inconsidering thefinancial'implications ofawydecisions
takenattheConference «itwillbenecessa-rytobearinmiad'theexisting
arrangef&ents forfundingofprojectsandactivities whichexistwithin
WWIWem4theUnitedMstioassystemihgeneral,soth&tanoverallview
®ffundingarran§e<m«nts andpriorities canfeematntsirred.
•••
f.IntheCommunity'sgeneralapproachtowwkdstrialiiation issues
itwillbeextremelyimportanttoavoidthetemptationtoclassify
countriesintotwogroups,industrialized anddeveloping,andbearin
mindthegreatdifferences intypesofindustrialstructures whichmay
befoundwithinthegroup-knownastheindustrialized countries and
amongthedevelopingcountries wfoerewidelydifferinglevelsofindus­
trialatevelopwent recjuiredifferentapproach©®toforexamplethefast
growingnewlyindustrialized countriesontfce©neha«slandtheleast
^evelapedcountries ontheother.<*•
*»
p _. i ■_
bordsupérieurdup.ipici

.r LrÅ-.J 'Vi...".. ■:1.
' I
" " * ' '
10.Industnalization ispartofawiderprocessofdevelopment and
cannotbeseeninisolation.ItisessentialthattheworkofUNIDOIII
takesintoaccountoveralldevelopment priorities andseesindustriali­
zationgoalsintheirproperperspective amongthesepriorities .Itis
alsonecessary'tokeepinmindlinkagesbetweenindustrialization and
developments inothersectors.-Forexampleruraldevelopment andthe
development oftheagricultural sectorcanhaveanimportantimpacton
thetypeofindustrial development whichmaybe'appropriate forany
' i
particular country.Thelinkagesbetweenagriculture andthedevelopment
■ofagro-andfoodprocessingindustries andthefertilizer andagri­
culturalmachinerysectorsareclear..•
TheLimaTarget
11.ItisexpectedthatoneofthemajorissuesarisingatNewDelhi
willrelatetothefulfilment oftheLimatargetadoptedattheSecond
! •
GeneralConferenceofUNIDO/whichstipulatesinteraliathattheshare
ofdevelopingcountriesinworldindustrialproduction"shouldbein­
creasedtothemaximumpossibleextentandasfaraspossibletoatleast
25%oftotalworldindustrial production bytheyear2000whilemaking
everyendeavourtoensurethattheindustrial growthsoachievedis
distributed amongthedeveloping countries asevenlyaspossible".As
becameevidentattheSeptembersessionoftheCommitteeoftheWhole,
thedevelopingcountries ^wouldnodoubtliketoseetheinternational
communityacceptanabsolutecommitment torealization ofthe25%figure
AlthoughtheCommunitywouldcertainl^wishtoseethedeveloping
countriesachievesuchatarget,itisdifficulttoseehowtheCommunity
couldapceptanabsolutecommitmentofthiskind.Variouspredictions
havebeenmadeaboutthelikelyshare!ofdevelopingcountriesin-world
industrialproduction attheendofthiscenturyandanextrapolation
'ofthetendencies observedintheperiod1960-1975wouldgivedeveloping
countries ashareofapproximately 14%bytheyear2000comparedto
theirshareofabout9%in1977.However,trendsobservedsince1974
wouldtendtosuggestthatthe14Xfigureistoopessimistic,particu­
larlyinthelightoftheslowingoftherateof.growthofindustrial
productionindevelopedcountries.Nonetheless the25%targetfigure
remainsveryambitious andwhetheritisattainedornotdependsona
widerangeoffactorswhoseevolution'isdifficulttoforeseeatthe'
bordsupérieurau

£5ir--..~~r~
.■i'
■ ' !presenttime/nottheLeastofwhichWillbetheeffortsmadeandpolicies ,
pursuedbythedevelopingcountriesthemselvesintheirindustrialization ,j
TheCommunityshouldthereforecontinuetoviewthe25%figureasa j
desirabletargetasacceptedinLimawithoutinanyway-suggestingthat•;
; 1.•' rthisisafirmcommitment onitspart. .i
i--, . . •'f
IndustrialCooperation betweenDevelopingCountries -
12.-Recentdiscussions inmeetingsheldamongtheGroupof77 !
developingcountrieshaveplacedgreatemphasisontheideas.ofcooper- 1
ationandcollectiveself-reliance amongdevelopingcountries.These
ideashavefoundanechofromtheinternational communityasawholein i
theBuenosAiresProgrammeforTechnicalCooperation amongDeveloping j
Countriesadoptedin1978andintheUNCTADVResolutiononeconomic -j
cooperation betweendevelopingcountries.Itmaybeanticipatedthat
thistheme,undertheheadingofIndustrialcooperation betweendeveloping .
countries,willbeimportantatUNIDOIII.TheCommunityhasgenerally «
adoptedapositiveapproachtodevelopingcountries'effortsinthis
fieldandhasforexamplegivenassistancetotheASEANcountriesandJ
themembersoftheAndeanPactintheirefforts-atregionalintegration.
Moreover,thesubstantialcontribution iftadebytheCommunityinsupporting
;theACPcountries *owneffortsshouldbeborneinmind.TheCommunity
shouldbewillingtosupportappropriateinitiativesinthisfieldwhich
maybeputforwardinNewDelhi.Thereisnodoubtthattherearecomple-
mentaritiesintheindustrialstructuresofdevelopingcountrieswhichare
Waitingtobeexploitedandthepossibilities ofassistancefromonegroup
ofdevelopingcountriestoanotherintheindustrial,trade,technological
andfinancialfieldsareconsiderable .Theideaofcollectiveself-reliance
!shouldnotbeseenasapanaceawhichwillonitsownmaketherealization
i-ofalldevelopingcountries'industrialization aimspossible,butrather
;asacomplementtotheexistingindispensible activitiesinthefield
ofNorth-Southcooperation .Intheinstitutional fielditwillbeneces*-
isaryfortheCommunitytoensurethatarrangements madetostimulate--
effortsatcooperationbetweendevelopingcountriesarecompatiblewith
theuniversalvocationofUNIDOandotherUnitedNationsagencies.

SocialAspects
13.TheCommission believesitwouldbedesirableforthethemeof
socialaspects xofindustrialization toemergeclearlyfromtheworkof
UNIDOIII.Inparticularitshouldbestressedthatindustrialization
isnotonlyadesirablegoalinitself/butmustmakepossibleanoverall
improvement inlivingstandardsindevelopingcountries,includingespe­
ciallytheworkersdirectlyconcerned.RisingLivingstandardsindevel­
opingcountries,desirable.inthemselves,alsoprovideeconomicbenefits
byincreasing thedomesticmarketsavailabletomanufacturers indeveloping
countries.Inthisrespect,theCommission shouldunderlinetheproposals
putforwardinitscommunication totheCouncil(DocumentC0M(78)492final)
Theseexaminetheproblemsofensuringthatcertaininternational norms
inworkingconditions arerespectedwhenaidpoliciesandtradingadvan­
tagesfordevelopingcountriesarebeingputintoeffect.
Redeployment
14.Thequestionofredeployment ofindustries fromdevelopedto
developing countriesislikelytooccupyaprominentplaceintheNew
Delhiagenda.Itwillbenecessarytodefinewhatismeantbytheconcept
ofredeployment andhere'theUNIDOSecretariat hasputforwardtheuseful
ideathatredeployment maybedefinedasthetransferofcapital,tech­
nology,know-how,plantsandotherresourcesbyanoperatingindustrial
enterpriseinadevelopedcountrytoadevelopingcountryinorderto
establish amanufacturing capacityinthatcountry.Theprocessofre­
deploymentiscloselylinkedtotheissueofstructuraladjustmentwithin
individual economies.InitsapproachtothisquestiontheCommunitywill
t
needtoemphasizethefactthatadjustmentisacontinuousprocesswmch
hasbeengoingoninitseconomyandwillcontinueintothefuture.In
thiscontext,theopportunityofbeingabletoforesee,asfaraspossible,
suchadjustments shouldbeunderlined.TheCommunityshouldalsoexplain
itsviewoftheroleofpublicauthoritiesinstimulating andfacilitating
theadjustmentprocess,whetherthisbeintheformofdirectintervention
orthroughmeasuressuchastheprovisionofunemployment benefits,re­
trainingfacilitiesandmeasuresinthecontextofsocialandregionalpol­
icieswhichcancreate'theconditionsinwhichadjustment cantakeplace
moreeasily^.TheCommunity 'shouldbereadytopursuestructuraladjustment./.
1_/Inthiscontextitwouldbeusefultobeableto.provideappropriate
documentation inNewDelhionadjustmentpoliciespursuedbythe
Community andmemberstates.

policieswithaviewinteraliatoencouraging domesticfactorsof.
productiontomovefromthelinesofproduction whicharelesscompeti­
tiveinternationally /particularly wherethedevelopingcountries have
orwillhaveanidentifiable long-termcomparative advantage.
ProcessingofRawMaterials N ■"
15.Intherelatedfieldofreprocessing ,-ofdevelopingcountries'
rawmaterialsproduction theCommunityshouldstresstheneedtobase
decisions onthelocationoftheprocessingplant,onconsiderations
ofcomparative advantage andexpressreadinessthroughitspolicies
withrespecttoprocessed andsemi-processed formsofrawmaterialsto
contributetotheestablishment orexpansionoftheindustrialcapacities
ofdeveloping countriesforprocessing raw.materialswhichtheyexport.
Itisclearthatthegrowthofindustrialproductionindeveloping
countries ,whichisimpliedintheLimaDeclaration andPlanofAction\ •x
meansagreatincreaseintheprocessing capacityofdevelopingcountries
bothforexportsofprocessedrawmaterials andfordomesticuseinthe
manufacturing sectors. .*'*•
-* •FinancingofIndustrialization '
16.Amorerapidindustrialization ofdevelopingcountrieswilt
requirefinancingbothfromdomesticandexternalsourcesonamassive
scale.Theexternalfinancingneedsshouldbeprovidedfrombothprivate
andpublicsourcesinthedevelopedcountries andfromdevelopingoil
producingcountrieswhichenjoybalanceofpaymentsurplusses .Itis
clearthatnoonetypeoffinancingwillbeappropriate forallthe
variedneedsintheindustrialization fieldandabalancedoverall
approach .totheproblemwillbeneeded.AsfarastheCommunityis
concerned,thegreaterpartofthefinancialsupportforindustrial
projectsindevelopingcountriesyrillprobablycomefromprivatesources,
whetherthisisthroughforeigndirectinvestmentorloansforindustrial
projectsprpvidedthroughthebankingsector.Therewillalspbean
importantrolefornon-concessional fundsprovidedthroughpublic
agenciesandforofficialdevelopment assistance,particularly forthe
leastdevelopedandotherlow-incomedevelopingcountries.Official .

aidwillalsoprovideanimportantcontribution tothecreationofthe
*
infrastructural baseinlow-income countries andwillbeusedin^cases
whereitcancontribute tosetinmotionanindustrialization process
orinsupportofregionalindustrial cooperation betweendeveloping
countries. ' .
v ■». •
TheRoleofForeignDirectInvestment
17.TheCommunityshouldstresstheroleofforeigndirectinvestment
intheindustrial development ofthedevelopingcountries/particularly
throughthetransferofresources,managerial andadministrative expertise
andtechnologytodevelopingcountries,theexpansionofproductivecapacity
andemployment andtheestablishment ofexportmarkets.Theimportanceof
thisroleisalreadyclearfromthefactthatabout25?foftheforeign-
basedproductionoftransnational corporations Isnowfoundindeveloping
countries.Inthepasttoolittlestresshasbeenplacedonthecontri­
butionwhichsmallandmedium-sized investments canmakeindeveloping
countries,forexamplethroughtheircontribution toruraldevelopment .
ThisaspectshouldbestressedbytheCommunityinNewDelhi.Itwill
alsobeimportanttostressthatthebestwaytopromoteprivatedirect ;
investmentindevelopingcountriesistocreateandmaintainmutually
acceptedinvestmentconditions .Inthisrespect,theimportanceofsuffi­
cientlyclearandcertainconditionsfavouringtheinflowofforeignin­
vestmenttoaideconomicdevelopment shouldbeunderlined.Atthesame
timetheCommunityshouldmakeitclearthatitdoesnotwishtoimpose
anyparticular modelforindustrial development ondevelopingcountries
andthatdeveloping countriesshouldbefreetodeterminetherolethat
foreigninvestment mayplayintheirdevelopment process.
Technology
18.InthefieldoftechnologytheConferenceshouldavoidinter-,
feringwiththeworkgoingoninotherUnitedNationsfora.Theneed
forefficientcoordination betweenUNIDOandotherorgansoftheUN
familydealingwithscienceandtechnology (UNCTAD,Intergovernmental
CommitteeonScienceandTechnologyforDevelopment,etc.)shouldbe
stressed.TheCommunityshouldbereadytoadoptaconstructive position
towardsproposalsaimingatconcreteactionofUNIDOinthefieldsof

industrialtechnological information andoftechnicalassistanceto
developingcountriesfortheadequateapplicationof^industrialtech­
nologiesandforthestrengthening of'thejrindigenousscientific and
technological capacities...
« -
Energy \'>,''■ ' ;s
19.Oneofthemajorproblemsinworldindustrialization untilthe
endofthecenturywillcertainly beinfindingadequatesourcesof
energy.ThisquestionisnotformallyontheNewDelhiagenda,but
couldwellappearinoneformoranotherinthediscussions .Itisclear
that,shouldthisarise,energyconstraintswillhavetobetakeninto
account,especiallyinthe.contextofattainingtheobjectivessetatthe,
LimaConference.,ThequestionofUNIDO'sroleinthisfieLdwillalso .
havetobeconsidered . ",
TheSystemofConsultations
20.,UNIDOIIIwillhavetotakeconcretedecisions onthecontinu-\
ationofthesystemofsectoralconsultations which,wasinitiatedinthe'
LimaDeclaration andPlanofAction.Sectoralconsultations involving
representatives *ofgovernments,business-,industry,tradeunions,consumers
andinternational organizations havebeenorganizedforsixsectorssince ■
1977andtheConference wi11becalledupontoadoptappropriate rulesofproce­
durefortheconsultations tocontinueasanongoingactivityoftheUNIDO.The
Community *shouldtakethteviewthattheconsultations shouldbecon-
•V
tinuedbutthattheyshouldnotbecomeaforumfornegotiations between
governments butratherbeseenasaforumfordiscussions whichwill
helptogiveaclearerpictureofthefuturedevelopment ofthevarious ,
sectors*concernedandtherebyassistgovernments andindustriesinpolicy
formulation .However,theCommunityshouldnowconsideracceptingtheprin­
ciplethatgovernments berepresented as.suchateachconsultation .
meetingwherethememberstateshavedelegations andshouldbewillingto
examinewhetherthesystemofconsultations couldbeestablished onapermanent
basisprovidingthatagreementisreachedatNewDelhionsatisfactory rules
ofprocedurewhichtakeaccountoftheCommunity'sviewofthenature
oftheconsultations .

-10-
CommunityCoordination
21.Throughout theConference theCommunitywillexpressitspoints
ofviewinconformitywiththedispositions alreadyagreedforinter­
nationaldiscussions .Theparticipation oftheCommunity assuchwill
beassuredinthoseareaswhichfallwithinitscompetence andthe
Communityshouldactincommononthosequestionswhichhave"aparticular
v
.interestforit.IntheopinionoftheCommission theCommunitywill
onlybeabletoplayarolecommensurate withitsstatureifitsucceeds
inputtingforwardanddefending commonpositions onallofthepoints
ontheConference agenda.Experience atanumberofrecentmajorinter­
nationalgatherings hasshownthegreatadvantages tobegainedbythe
maintenance ofcommonpositions anddemonstrated theinfluencewhich
suchpositions canhaveonthistypeofforum.