UN

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Carlos Magariños was the director general of UNIDO for two consecutive periods. He was chosen for this position in open, independent elections held among over 170 member states. During the 8 years he headed UNIDO, he managed a USD1.3 billion portfolio. The successful implementation of reforms under his leadership led to 150% growth in voluntary contributions

The UN system

The United Nations is led by a secretary general and is headquartered in New York. It’s most important organ is the General Assembly, whose meetings begin every September, attended by many heads of state and government.
The secretary general is appointed by the United Nations Security Council (made up of 15 member countries) and ratified by the General Assembly. He/she is responsible for appointing the heads of programs under his/her area, such as the United Nations Development Programme (UNDP), the United Nations Children’s Fund (UNICEF), the World Food Programme (WFP), and the United Nations Conference for Commerce and Development (UNCCD).
The United Nations System also includes a number of independent agencies; in some cases, such as that of the Food and Agriculture Organization (FAO), they date back further than the United Nations. This group of organizations includes the International Labour Organization (ILO), the International Monetary Fund (IMF), the World Bank (WB), the International Atomic Energy Agency (IAEA) and the United Nations Industrial Development Organization (UNIDO). All of these organizations have their own members and budgets separate from those of the Office of the Secretariat.
The heads of these organizations are chosen in independent international elections open to all member states. The Secretary General plays no role in these elections.

ONUDI

UNIDO’s annual budget is approximately 160 million dollars. The budget is allocated equally between operations (infrastructure, i.e. offices and personnel) and technical cooperation (grants for development assistance).
It is headquartered in Vienna, where approximately 650 functionaries work. UNIDO operates in a territory served by 45 field offices (in developing countries), 20 investment promotion offices (in developed countries that export capital), and around five associated scientific centers (there are a total of about 70 offices outside its headquarters), which employ some 250 additional functionaries assisted by a slightly lower number of local employees.
Every year, UNIDO hires around 3,000 consultants to implement its technical assistance programs.

Critical situation of the United Nations

Almost from the beginning, this complex, costly United Nations system has been subject to intense scrutiny and pressure for reform, in order to increase its efficiency and effectiveness. The fall of the Berlin Wall in the 1990s exacerbated the pressing need to redefine the role of the United Nations within this new historic context.
In 1996 and 1997, UNIDO was facing a critical financial situation and its very existence was in danger. In fact, several independent reports (such as the one issued by the Commission on Global Governance) evaluated or recommended closing it or merging it with another agency within the system.
During those years, the United States, Australia and Canada withdrew from UNIDO, and Denmark, Germany and Great Britain considered the possibility of doing so.

One last chance…

It was in this context that Carlos Magariños assumed the position of Director General (in December 1997), upon winning a complicated election involving several candidates, including the Foreign Minister of Poland (in office at that time) and the man who would later be named Prime Minister of Haiti (2005). During the eight years in which he led the organization (the maximum term allowed by its Constitution), Carlos Magariños managed a portfolio of more than 1.3 billion dollars.
The implementation of his first measure involved a profound reform program in three phases:

  • Financial and administrative reform
  • Programmatic reform
  • Substantive reform

The purpose was to rebuild the organization’s credibility and the Member States’ confidence in its viability.

Financial/Administrative Reform
Financial/Administrative Reform
The first phase involved reducing the budget (as well as personnel, the largest expense) by 20% through a voluntary retirement program that cost approximately 10 million dollars, one-third less than the amount calculated and approved by the UNIDO Governing Bodies. It is important to note that, thanks to this program, no labor complaints were filed with the tribunal of the International Labour Organization. At the same time, the operational structure was reduced by 50%, eliminating three of the six main divisions. Once the economic/financial situation had been resolved during the first three months of Magariños’s administration, the foundations were laid to offer long-term contracts to the agency’s staff (two and three-year contracts) in order to boost employee morale and improve performance.
Programmatic Reform
Programmatic Reform
During the nine remaining months of his first year at the head of the organization, emphasis was placed on completing the second phase of the reform program: reorganizing UNIDO’s technical services. The original program portfolio of around 250 service modules was reduced to just 16. A few years later, the organization’s staff proposed a new reduction to 8 modules. Currently, the organization focuses on just 4 programmatic priorities. At the same time, so-called “integrated programs” were developed at UNIDO. This technical cooperation mechanism involves the integration of different service modules in the initial phase of formulating assistance programs. The integration must contribute to the achievement of a common goal, emphasizing the priorities established by the countries receiving the aid. This task required collaboration and team work among the organization’s departments. The mechanism enabled UNIDO to eliminate the more than 2,500 small projects throughout the world to focus its efforts on some 80 national programs. Over time, integrated programs became the distinctive feature of the UNIDO reform. By the end of Magariños’s first year at the head of UNIDO, the organization had a new team and new procedures (cash flow analysis, computerized systems, etc.) in the financial area. The decision-making process had been enriched by the establishment of a Board of Directors (involving all UNIDO Department Directors and other high-ranking functionaries, approximately 25 people) and an Executive Board (made up of the key directors, the Principal Private Secretary and the Director General, in addition to the Finance and Human Resources directors, approximately 10 people).
Substantive Reform
Substantive Reform
Once the basis for the reform had been established and institutional uncertainty had been eliminated, Carlos Magariños delved deeper into the substantive issue he had placed emphasis on since the beginning of his term: UNIDO’s role and functions in a modern, globalized economy. The organization outsourced its research functions, subcontracting the services of some of the world’s top universities (Oxford, Harvard, Paris, etc.) and resumed publishing its flagship publications, such as its “Industrial Development Report.” This included a new section, the “Industrial Scoreboard,” which enabled readers to compare the performance of approximately one hundred countries in terms of the quality of their exports and their level of industrial development. In addition, UNIDO strengthened its working relationship with the private sector, including multinational firms (FIAT, ERICSSON, SANDOZ, etc.) and non-governmental organizations (NGOs). A new corporate strategy was adopted with the goal of fostering increases in productivity that make growth and development possible. In addition, professional mechanisms to monitor their implementation were put in place. This process was clearly reflected in the preparation of the organization’s budgets.
Results

The UNIDO member countries acknowledged the significance of the reforms and the speed with which they were implemented. As a result, the organization’s management was rewarded with new voluntary contributions that exceeded regular member fees, which the countries began paying regularly.
The successful implementation of the reforms was also acknowledged by external auditors (the German Federal Court of Audit during the first four-year term and the Auditor General of South Africa during the second term). Both auditors affirmed that UNIDO was financially sound and that it had recovered its prestige and efficiency.
Voluntary contributions grew by 150% in five years (this growth could be compared to what is known as “market capitalization” in the financial world), and the provision of technical cooperation programs (that is, the sale of the organization’s “products”) increased by more than 50% during the same period.
A recent independent evaluation made by the United Kingdom’s Department for International Development ranked UNIDO in 6th place out of a group of 23 multilateral organizations (including the World Bank, as well as regional banks such as the IDB and other organizations such as the UNDP). In the category of Standard Setting Agencies, which includes the FAO, the World Health Organization (WHO) and UNESCO, UNIDO placed 1st with 86 points, compared to a category average score of 62 points.
When his constitutional term at the head of the agency came to an end, Carlos Magariños accepted a post as a Senior Associate Member at Saint Antony’s College at the University of Oxford in England.
Debate in the House of Commons of the United Kingdom
http://www.unido.org/fileadmin/import/31142_UK_Parliament_25Nov2004_AdjournmentDebate_on_UNIDO.3.pdf
http://www.carlosmagarinos.com.ar/pdf/Neuausrichtung.pdf
http://www.carlosmagarinos.com.ar/pdf/un_network.pdf
http://www.carlosmagarinos.com.ar/pdf/die_unido.pdf