ASTANA – It may be argued that industrialization is one of the most important events in the history of humanity. Due to this process, relatively more goods were produced in relatively less time. Average real incomes rose dramatically. Thus, more time was left for education, innovation and recreation.
The United Nations Industrial Development Organization (UNIDO) meets the industrial development needs of its member states through a variety of highly specialized and differentiated services that promote social inclusion, economic competitiveness and environmental sustainability, as well as the promotion of knowledge networks and institutional partnership.
In an exclusive interview, UNIDO Director General Li Yong speaks of his priorities at the helm of the organization, efforts to ensure sustainable industrialization globally and cooperation with Kazakhstan as part of EXPO 2017 and beyond.
Mr. Li, you give great importance to fiscal and financial measures. As Vice-Minister of Finance of the People’s Republic of China you prompted major financial institutions to establish corporate governance, deal with toxic assets and strengthen risk management. So, what has changed in your personal agenda since you started to serve as the Director General at the UN specialized agency, UNIDO?
My experience of growing up, and of living and working in China taught me a lot. In Asia we saw countries like Japan and the Republic of Korea develop very fast after World War II, and become members of the Organization for Economic Cooperation and Development. What created the ‘miracle’ of the South-East Asian countries? Industrial development. Thanks to industrialization, these so-called ‘tigers’ and ‘dragons’ quickly reached the status of middle- and high-income level countries.
China learnt from them in the 1980s. We opened up a very poor country with a big population to the world. You can’t imagine that in 1978 GDP per capita at current prices was US$228, and now, more than 30 years after the reforms to open up the economy, GDP per capita is over US$6,000. What was the driving force? Agriculture? No. Over the past 30 years China transformed from an agricultural-based to a more industrialized country.
I have a finance background. I think everyone agrees that the global financial crisis beginning in 2008 taught us many lessons. One of them is that we should re-focus on the development of the “real sector”. This does not just apply to developing countries or middle-income countries, but is agreed on by countries at all income levels. I am very happy to see that many advanced countries are re-focusing on industrialization.
In many ways my personal agenda has not changed. As Vice-Minister of Finance of the People’s Republic of China and member of the Monetary Policy Committee of the Central Bank for a decade, I was involved in setting and harmonizing fiscal, monetary and industrial policies, and in supporting long-term economic growth in China. I accorded great importance to fiscal and financial measures in favour of small and medium-sized enterprises, the cornerstones for creating economic opportunities, reducing poverty and promoting gender equality.
As Director General of UNIDO, I am heading an organization that forges partnerships, in which governments, the private sector and other stakeholders work together to create an enabling environment for inclusive and sustainable industrial development.
UNIDO pursues noble goals such as promotion of industrial development for poverty reduction, inclusive globalization and environmental sustainability. However, one may argue that there are not only benefits but also negative effects of industrialization such as deforestation, extinction of species, widespread pollution and excessive waste. So, how does your organization work with these problems? Is it possible to advance the country’s economy without causing harm to the environment?
As we all know, no developing country has ever become a developed country without a concerted policy focus on industrial development. UNIDO estimates that manufacturing alone provides more than half a billion jobs globally per year. Thanks to the multiplier effect of industry, every job in manufacturing creates 2.2 additional jobs in other sectors.
Nevertheless, industry is also one of the largest contributors to climate change and environmental degradation and, therefore, has a particular responsibility in ensuring the highest environmental standards and safeguards.
UNIDO strongly believes that sustainability must be the foremost consideration of any industrial development process. Our mandate makes explicit reference to this aspect. We work to harness industry’s full potential to create economic growth and shared prosperity, while safeguarding the environment.
In order to achieve sustainable industrialization, we work closely with our member states, the private sector and various development partners to scale up green industry solutions and technologies. We advise on resource-efficient cleaner production techniques. We provide expertise on the implementation of multilateral environmental agreements. And we bolster energy efficiency standards.
For example, UNIDO has helped to phase out 340 million tons of CO2 per year, which corresponds to the exhaust emitted by more than 71 million passenger vehicles in one year.
Furthermore, UNIDO has contributed to the phase-out of over one third of ozone-depleting substances in the developing world since 1992. UNIDO is promoting inclusive and sustainable industrial development to mitigate the potential negative impacts of industrialization. When we manufacture products to use and to trade, we need to consume raw materials. We need to use energy, water, electricity, oil, etc. This creates pollution. UNIDO and the international community are working very hard to avoid, or at least reduce, such negative effects. This is, and will remain, a learning process.
This summer’s EXPO 2017 in Astana on Future Energy will give a powerful boost to Kazakhstan’s scientific and technological fields. A plentiful and sustainable energy supply to all parts of the world will help create conditions for peaceful co-existence. Despite the fact that Kazakhstan has an abundance of oil and gas reserves, the country hosts this exhibition in order to create a clean and sustainable future for us all. Are there any common points that Kazakhstan and UNIDO have? Could you please share with us if there are any joint programmes?
The theme of the Astana EXPO 2017, ‘Future Energy’, could not be timelier. Nearly two years have passed since the adoption of the 2030 Agenda for Sustainable Development and the Paris Agreement on climate change. The realization that we need sustainable energy solutions to guarantee our planet’s integrity and achieve sustainable development has reached all corners of the world.
We at UNIDO recognize the importance of sustainable energy when we support our member states in achieving industrial development, in a way that is both socially inclusive and environmentally sustainable. We are convinced that sustainable energy provides the foundation for shared prosperity around the world.
That is why UNIDO was very pleased to accept the invitation to participate in the Astana EXPO 2017. Over three months, we have the chance to demonstrate in the International Organizations Pavilion, how our work will help secure sustainable energy, for example, by promoting green finance and green technologies, and by facilitating the flow of expertise and best practices across countries.
To move the sustainable energy agenda forward, we need to accelerate clean energy innovation. We also need holistic technology solutions, entrepreneurship and policy innovation. For these reasons, in my recent meeting with Zhenis Kassymbek, Minister for Investment and Development of Kazakhstan, I commended the initiative of the Government of Kazakhstan to establish the International Centre for Green Technology and Investment Projects, the Astana International Financial Centre, and the techno-park for IT start-ups in the EXPO City, as legacies of the Astana EXPO 2017. We are looking into ways to support these initiatives. I can also add that the minister expressed an interest in establishing a UNIDO Investment and Technology Promotion Office in Astana, and this is something we will discuss further.
We are already working with the Government of Kazakhstan and signed a joint declaration of cooperation in May 2014. UNIDO is delivering on its commitments to develop three projects that are financially supported by the Government of Kazakhstan. One is for industrial modernization and enterprise competitiveness in Kazakhstan. A second is for trade capacity building through strengthening standards, metrology, testing and quality infrastructure. And a third is the development of Kazakhstan’s industrial statistics.
Furthermore, UNIDO will continue to work closely with the Government of Kazakhstan to support the adoption of clean and sustainable energy standards and best practices in order to achieve the 2030 Agenda and thereby a sustainable future for all.