23 February 2009

Re-issued as received

 "A conceptual breakthrough to tackle global poverty"

The Bottom Billion - Launch of New Report from UN Agency offers fresh hope for world's poorest

VIENNA, 23 February (UN Information Service) - The Bottom Billion - the world's poorest people living on less than a dollar a day - are being offered a new path to escape global poverty with the launch today of a Report published by the United Nations Industrial Development Organization (UNIDO), a specialized agency of the United Nations.

The Industrial Development Report 2009 is being launched with the help of the United Kingdom's Department for International Development (DFID) and the Foreign and Commonwealth Office (FCO) at a meeting of over two hundred leaders and opinion makers in politics, development and business at Lancaster House, London, today.

Over a billion people (the "Bottom Billion") from a global population of 6.7 billion are subsisting on less than one US dollar a day. This Report aims to help them.

 Against the background of a severe and deepening global economic crisis, the Report identifies a comprehensive set of policies to help low-income and slow-growing middle-income countries break out of the "poverty trap" and achieve accelerated economic growth and sustainable development through value-creating industrialization.

"Our Report represents a major conceptual breakthrough on how to tackle global poverty through sustainable industrial development," says UNIDO's Director-General, Dr Kandeh Yumkella.

"Bottom Billion nations will be able to arrive at their own, tailor-made solutions to successfully tackle poverty building on the research findings and informative case studies highlighted in this Report."

The main features of the Report include the following:

•    Helping reduce global poverty by assisting the countries of the "Bottom Billion" produce more wealth through economic efficiencies and smart industrialization - choosing the right products to manufacture for the global market.

•    Supporting poor countries' efforts to penetrate international markets by improving export supply capacities and meet international quality and safety standards.

•    Identifying policies that would enable the poorest countries as well as the slow-growing middle-income countries achieve accelerated industrial growth.

•    Proposing a new United Nations category of "least developed manufacturing countries" that could be used by the World Trade Organization with respect to trade preferences for the manufactured exports of low-income countries.

•    Recommending that developed countries help the poorest countries - through "Temporary Trade Preferences" -  in conjunction with a simple set of more liberal rules on what is known as "country of origin", to allow the poorest to get a foot in the door on manufactured exports.

•    Advocating a new "Aid for Trade" framework to help poor countries take advantage of trade openings through a more targeted approach.

The Report shows that the global trend towards manufacturing and trade in tasks offers new opportunities for poorer countries to compete in global markets. It highlights the concept of task-based production, or the production of individual components of marketable products, rather than manufacturing entire items. The Report makes it clear that the extent to which the Bottom Billion can benefit from the new opportunities of task-based production depends on the policy choices they make.

Ten case studies of dynamic industrial locations in developing countries are presented in the Report.  They demonstrate that the right policies have made a significant difference in the economic development of these countries.  Those countries that specialized in making an individual component of a whole product, rather than the entire product, grew more rapidly.  The example of the city of Qiaotou in China that built its industry on the production of buttons and now accounts for sixty-five per cent of the world's production of buttons is a case in point. 

The Report also validates the importance of industrial agglomerations; productivity tends to be higher when manufacturing firms cluster together.

In addition, UNIDO has updated an effective tool within this Report - the Competitive Industrial Performance Index - for countries to benchmark their progress.

Finally, the report provides further evidence that poorer countries should not rely on the export of primary commodities to bankroll their development. Commodity prices are subject to the volatility of international markets. Commodity-based development can also discourage the growth of manufacturing and hinder broad-based development and a more equitable income distribution.

In the short term, relying on natural resources may produce prosperity for a few, but converting the additional income into productive assets for sustainable and broader development is much harder. Hence there is a need for more task-based industrial production to capture niche markets and catalyze more broad-based development. 


UNIDO is a specialized agency of the United Nations system that works towards improving the quality of life of the world's poor by helping countries achieve sustainable industrial development. UNIDO views industrial development as a means of creating employment and income to overcome poverty. It helps developing countries and economies in transition to produce goods they can trade on the global market. It also helps provide the tools - training, technology, and investment - to make them competitive. At the same time, it encourages production processes that will neither harm the environment nor place too heavy a burden on a country's limited energy resources. UNIDO has 172 Member States and has its headquarters in Vienna, Austria. See also www.unido.org

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A full backgrounder on this Report is available at www.unido.org

The full title of the Report is:

Industrial Development Report 2009. Breaking In and Moving Up: New Industrial Challenges for the Bottom Billion and the Middle-Income Countries

For further information or a copy of the Report, please contact:

George Assaf
UNIDO Spokesperson
Telephone: (+ 43-1) 26026-3849
Email: g.assaf@unido.org