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Joint Evaluation of the UNDP-United Nations Industrial Development Organization cooperation agreement
Commissioning Unit: Independent Evaluation Office
Evaluation Plan: 2009-2013
Evaluation Type: Thematic
Completion Date: 09/2009
Unit Responsible for providing Management Response: Bureau of External Relations and Advocacy
Documents Related to overall Management Response:
 
1. Recommendation:

Recommendation 1. In line with United Nations reform, bilateral agreements among United Nations organizations working on private sector development should be replaced with a system-wide, cluster approach involving all such relevant organizations. UNDP and UNIDO should spearhead an effort to ensure that the United Nations develops a cluster approach to further coordination and coherence as well as to promote synergies among UN organizations working in private sector development. A joint UNDP and UNIDO effort should articulate a United Nations system-wide approach on critical issues to clarify and provide a platform for sustained collaboration. This cluster approach should be based on the experience of the United Nations and other organizations working on private sector development. Specifically, this effort should draw from the lessons from the cluster approaches followed by United Nations in providing emergency response to disaster-affected countries and the United Nations Chief Executive Board Inter-agency Cluster on Trade and Productive Capacity as well as the Donor Committee for Enterprise Development. Such a collaborative effort could eventually become a driving force for more effective support to the partner countries.

Management Response: [Added: 2010/02/03] [Last Updated: 2020/07/09]

The joint UNDP-UNIDO Private Sector Development Programme did not achieve the intended results, and is in large measure rendered less relevant in the context of system-wide efforts to achieve coherence and to deliver increasingly as one. In 2004, when the agreement was signed, it was seen as a model of cooperation in the United Nations system, based on the comparative and complementary strengths of the two organizations. In the five years since the Agreement was signed, however, there was a significant enhancement in the United Nations system approach to country-level cooperation and coherence.

Key Actions:

Key Action Responsible DueDate Status Comments Documents
UNIDO participation in UN MDG F funded joint programmes in DaO countries. Cooperation review in 2011
[Added: 2011/04/13]
No due date No deadline established
2. Recommendation:

Recommendation 2. Until a system-wide approach is developed, the existing partnership agreement between UNIDO and UNDP should be replaced with a memorandum of understanding that defines operational and administrative arrangements at the country level, including provisions for UNIDO desks. 

The memorandum of understanding should address the following issues:

Describe the thematic areas of cooperation and common interest. This should not be limited to private sector development but include other areas of common interest such as energy. The memorandum of understanding should resist the temptation to clarify a division of labour in PSD. Each country is different and the country context should define who does what. - The principle administrative arrangements for hosting the UNIDO desk (e.g., office space, cost recovery, etc.). - The preferred modality or modalities for joint collaboration at the country level to simplify and standardize the collaboration. An annex to the memorandum of understanding could provide templates. This should fully reflect the inherent challenges in bridging the asymmetries in the operational modalities of a decentralized organization like UNDP and a more centralized one like UNIDO. The modalities should be developed In line with the UN Reform and in consultation with DOCO. The modalities of cooperation should be consistent with other memoranda of understanding and practices of the UN system. 

Management Response: [Added: 2010/02/03] [Last Updated: 2020/07/09]

The organizations will formulate a corporate memorandum of understanding describing umbrella provisions for areas of cooperation and a framework for future collaboration. In taking the cooperation forward, the Administrator of UNDP and the Director-General of UNIDO will seek to enhance coherence, cooperation and coordination in the wider context of United Nations reform, at country, regional and global levels

Key Actions:

Key Action Responsible DueDate Status Comments Documents
(1) The fifteen (15) UNIDO Desks Desks, established in Afghanistan, Armenia, Bolivia, Burkina Faso, Cambodia, Ecuador, Eritrea, Jordan, Kyrgyzstan, Lao, Mali, Nicaragua, Rwanda, Sierra Leone, and Zimbabwe, further to the terms of the Cooperation Agreement, shall continue to be hosted in the relevant UNDP Country Offices in accordance with the terms of this letter, as set forth herein; (2) Continuation of cooperation for UNIDO desks shall be limited to the fifteen (15) UNIDO Desk Officers (?Desk Officers?) assigned to the Desks, who shall be recruited and appointed by UNIDO under UNIDO letters of appointment, and be subject to UNIDO Staff Regulations and Rules; UNIDO shall appraise the performance of the Desk Officers in accordance with UNIDO?s performance management system
[Added: 2011/04/13]
UNIDO/UNDP 2010/05 Completed Review planned for 2011
3. Recommendation:

Recommendation 3. The expansion of UNIDO desks should be commensurate to the capacity of UNIDO headquarters to provide adequate technical, human and financial support in response to the increased national demands triggered by the new UNIDO desks.

Management Response: [Added: 2010/02/03] [Last Updated: 2020/07/09]

Increased UNIDO field presence can be achieved using national staff.

Key Actions:

Key Action Responsible DueDate Status Comments Documents
Cooperation review in 2011
[Added: 2011/04/13]
No due date No deadline established
4. Recommendation:

Recommendation 4. UNIDO should establish a transparent selection and review mechanism to guide the expansion of its country presence through the desk modality and to monitor progress towards the intended results.

The following are some of the considerations to bear in mind when expanding the desks:

a. Level of government and private sector interest and demand: Strong stakeholder interest in UNIDO services is essential. National development priorities and strategies should reflect the need for UNIDO services. Evidence shows that country commitment to thematic areas of the agreement (as measured, for example, by articulation in national development plans) in conjunction with strong government interest in UNIDO or United Nations services are critical prerequisites for success. Clear and comprehensive assessment of demand for UNIDO services must be conducted.

b. Alignment with UNDAF: Ideally, the UNIDO mandate is already reflected in the on-going UNDAF even before a desk is established. If UNIDO is absent or only marginally represented in the ongoing UNDAF, the establishment of a new UNIDO desk must be timed with the development of the next UNDAF, specifically, the second half of the ongoing UNDAF programming cycle.

c. Substantial pre-existing volume and trend in the UNIDO portfolio: Having a track record of past UNIDO projects in a country helps to justify the continued presence of UNIDO desks. A good portfolio demonstrates a robust relationship with the government and financial feasibility of UNIDO activities. It also suggests country demand. Clear targets for annual delivery rates must be set when a UNIDO desk is established. If, after four years of operation, the annual delivery is less than the agreed goal, where a typical goal might be an annual delivery equal or exceeding twice the cost of the desk, the continued presence of that desk should be questioned. However, strategic considerations should be allowed to prevail under exceptional circumstances. For instance, UNIDO may position itself to support countries in economic transition or crisis. Under such conditions, clear and measurable outcomes must be specified upfront and verified annually during operations.

d. Funding opportunities for UNIDO projects: A history of funding for UNIDO services by government or donor sources within a country is essential for success of a desk. In addition to clear evidence of government or donor commitment to industrial development within national development priorities, donor funding is essential for related initiatives that lack resources. Funding scenarios should be developed that take into account the general trends in official development assistance in a given country.

Management Response: [Added: 2010/02/03] [Last Updated: 2020/07/09]

The suggested reforms in the evaluation regarding the UNIDO desks are appreciated and will be taken into consideration when planning for expansion of the field representation. Both organizations agree with the evaluation team that the expansion of UNIDO field representation should continue when nationally identified United Nations programming would benefit from a UNIDO field presence provided that it is brought about in a step-by-step fashion, taking into account UNDAFs that are nationally led and supported by the United Nations country team, and other joint programming processes, and the capacity and resources of UNIDO to respond

Key Actions:

Key Action Responsible DueDate Status Comments Documents
Cooperation review in 2011
[Added: 2011/04/13]
No due date No deadline established
5. Recommendation:

Recommendation 5. UNIDO should conduct a feasibility study based on the above-mentioned criteria before a new investment is made to establish UNIDO desk, so as to minimize the risks of failure.

Management Response: [Added: 2010/02/03] [Last Updated: 2020/07/09]

General Assembly resolutions, especially the triennial comprehensive policy review of operational activities for development (TCPR), have mandated: (a) system-wide coherence and harmonized business practices; (b) changes to the inter-agency governance structures, including the integration of the United Nations Development Group (UNDG) as the third pillar of the Chief Executives Board (CEB); (c) the development of the High-Level Committee on Policy, High-Level Committee on Management policies and UNDG procedures, mechanisms, and tools, to strengthen and provide guidance on joint programming, funding modalities, and implementation processes for efficiency, coherence, and cooperation in operational activities; and (d) improvements in cooperation and coherence resulting from strengthening of the resident coordinator system, harmonizing programming cycles, increased involvement of non-resident organizations in the preparation of United Nations Development Assistance Frameworks (UNDAFs) and joint programmes, and lessons learned from the ?delivering as one? initiative.

Key Actions:

Key Action Responsible DueDate Status Comments Documents
UNDG Delivering as One Independent Review planned for 2011
[Added: 2011/04/13]
No due date No deadline established
6. Recommendation:

Recommendation 6. The review of existing UNIDO desks, as outlined above, should be conducted annually by a panel representing the different divisions in UNIDO.

Management Response: [Added: 2010/02/03] [Last Updated: 2020/07/09]

The suggested reforms in the evaluation regarding the UNIDO desks are appreciated and will be taken into consideration when planning for expansion of the field representation. Both organizations agree with the evaluation team that the expansion of UNIDO field representation should continue when nationally identified United Nations programming would benefit from a UNIDO field presence

Key Actions:

Key Action Responsible DueDate Status Comments Documents
Cooperation review in 2011
[Added: 2011/04/13]
2011/06 Overdue-Not Initiated
7. Recommendation:

Recommendation 7. Taking into account the limited capacities of the UNIDO desks, UNIDO should establish priorities with regard to each desk's core function, on a country-by-country basis.

The core functions of the UNIDO desks are: to facilitate government and private sector access to UNIDO expertise to contribute to the development of new  UNIDO projects and programmes; - to contribute to the implementation of UNIDO projects and programmes to enhance UNIDO participation in national, UNDAF and UN delivering as one objectives to advise UNDP and other UN partners regarding sustainable industrial development, including contributing to the work of UNCTs While the implementation of UNIDO projects might be a priority in one country, in other countries the priority might be to develop new projects or to advise the government and private sector. Not only should specific priorities be established, UNIDO should empower the heads of UNIDO operations and clarify their roles internally and externally. This evaluation recommends new staffing modalities for the UNIDO desks depending, for example, on the volume of the UNIDO portfolio. The evaluation team recommends using two different staffing modalities for desks.

Desks in countries with a significant UNIDO portfolio should be managed by national UNIDO Country Directors. UNIDO desks in countries with a small UNIDO portfolio should be managed by Assistant Representatives. This is to avoid a situation of a national Country Director with no or insignificant UNIDO portfolio. The titles of both new staffing modalities are in line with the practice of other UN organizations and clarify roles and status. UNIDO should eliminate the title, head of UNIDO operations. Moreover, UNIDO might wish to consider changing the term UNIDO desk to UNIDO office in order to clarify the difference between the institution (UNIDO office) and the person (national Country Director or Assistant Representative). Until now the terms UNIDO desk and head of UNIDO operations have been used almost synonymously. The staffing of a UNIDO desk can be changed as appropriate, i.e., a desk can be upgraded from being staffed with an Assistant Representative to being staffed with a national UNIDO Country Director. However, the decision should be based on institutional criteria, not on individual performance. The roles and responsibilities of national UNIDO Country Directors could be defined as follows (see Table 11 for more details): National UNIDO Country Directors are heads of agency with the same status and responsibilities as the international UNIDO Country Directors except that they are not accredited with the Government. There is no need for accreditation. National UNIDO Country Directors are, as a head of agency, part of the UNCT. Accreditation, that is, a formal agreement with the host government, should not be a criterion to participate in the UNCT, as the experience of UNCT in Cape Verde demonstrates. However, the UN Resident Coordinator remains the primary interlocutor for the UNCT with the Head of State or Government.

National UNIDO Country Directors are not  nder the supervision of UNIDO regional offices. Unless the regional office in question has significant capacities and resources to ensure efficient supervision and administrative support to the desk, National UNIDO Country Directors should communicate directly with UNIDO headquarters, keeping regional offices duly informed. National UNIDO Country Directors should enjoy financial authority similar to the authority enjoyed by international Country Directors. The roles and responsibilities of Assistant Representatives could be defined as follows (see Table 11 for more details): Assistant Representatives are under the supervision of UNIDO regional offices. Assistant Representatives should have more financial authority than current heads of UNIDO operations. Minimally, they should be empowered to manage the office budget in order to reduce time required for administrative activities. However, as the portfolio within a country grows, either the capacity of the UNIDO office (formerly UNIDO desk) needs to be expanded or the responsibility for implementation support needs to be reduced.

Management Response: [Added: 2010/02/03] [Last Updated: 2020/07/09]

The suggested reforms in the evaluation regarding the UNIDO ?desks? are appreciated and will be taken into consideration when planning for expansion of the field representation. Both organizations agree with the evaluation team that the expansion of UNIDO field representation should continue when nationally identified United Nations programming would benefit from a UNIDO field presence provided that it is brought about in a step-by-step fashion, taking into account UNDAFs that are nationally led and supported by the United Nations country team, and other joint programming processes, and the capacity and resources of UNIDO to respond

Key Actions:

Key Action Responsible DueDate Status Comments Documents
Review in 2011
[Added: 2011/04/13]
No due date No deadline established
8. Recommendation:

Joint private sector development programmes 

Recommendation 8. It is recommended not to renew the joint PSD programmes component of the agreement after expiry of the original five years period.

Evidence shows that other developments provide more effective incentives for the coordination and cooperation envisaged in the Agreement, such as strengthened UN reform processes at the country level and new aid modalities such as the MDGs Achievement Funds. This leaves no justification for extending this component of the Agreement.

Management Response: [Added: 2010/02/03] [Last Updated: 2020/07/09]

The joint UNDP-UNIDO Private Sector Development Programme did not achieve the intended results, and is in large measure rendered less relevant in the context of system-wide efforts to achieve coherence and to deliver increasingly as one. In 2004, when the agreement was signed, it was seen as a model of cooperation in the United Nations system, based on the comparative and complementary strengths of the two organizations. In the five years since the Agreement was signed, however, there was a significant enhancement in the United Nations system approach to country-level cooperation and coherence.

Key Actions:

Key Action Responsible DueDate Status Comments Documents

[Added: 2011/04/13]
No due date No deadline established
9. Recommendation:

Recommndation 9. UNDP and UNIDO should resist the temptation of establishing a too rigid global division of labour within private sector development.

Each country context is different and may require a different division of labour, thereby building on each organization's comparative advantage in a particular country, such as its experience or local network. As demonstrated above, the main challenge is not to define each organization's role, but to meet the huge demand for PSD and access the financial resources necessary.

Management Response: [Added: 2010/02/03] [Last Updated: 2020/07/09]

As a result of those developments, the 2004 bilateral cooperation framework between UNDP and UNIDO has become less relevant to the delivery of country-level technical cooperation. Instead, UNDP and UNIDO are engaged, along with other parts of the United Nations system, in enhancing inter-agency cooperation, and they are promoting policy coherence in such forums as the Donors Committee for Enterprise Development, the CEB Cluster on Trade and Productive Capacity, UN-Energy, and the Industry, Trade and Market Access Cluster led by the Economic Commission for Africa, in which UNDP and UNIDO are active participants.

Key Actions:

Key Action Responsible DueDate Status Comments Documents
UNDG review of mutual accountability framework in 2011
[Added: 2011/04/13]
No due date No deadline established
10. Recommendation:

Recommendation 10. Prior to new, joint projects, UNIDO and UNDP should pay due attention to the issue of implementation modalities and the division of labour.

They should also refer to the United Nations Development Operations Coordination Office modalities. Finally, they should specify the agreed modalities in the project document beforehand. In addition, they should agree upon the modalities of funds mobilization in advance. Such agreements should help avoid the deadlock situations seen in the implementation of the present agreement.

Management Response: [Added: 2010/02/03] [Last Updated: 2020/07/09]

General Assembly resolutions, especially the triennial comprehensive policy review of operational activities for development (TCPR), have mandated: (a) system-wide coherence and harmonized business practices; (b) changes to the inter-agency governance structures, including the integration of the United Nations Development Group (UNDG) as the third pillar of the Chief Executives Board (CEB); (c) the development of the High-Level Committee on Policy, High-Level Committee on Management policies and UNDG procedures, mechanisms, and tools, to strengthen and provide guidance on joint programming, funding modalities, and implementation processes for efficiency, coherence, and cooperation in operational activities; and (d) improvements in cooperation and coherence resulting from strengthening of the resident coordinator system, harmonizing programming cycles, increased involvement of non-resident organizations in the preparation of United Nations Development Assistance Frameworks (UNDAFs) and joint programmes, and lessons learned from the ?delivering as one? initiative.

Key Actions:

Key Action Responsible DueDate Status Comments Documents
Use of new common UNDAF Action Plan in DaO pilots.
[Added: 2011/04/13]
No due date No deadline established

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