23 April 2015: Participants discussed how to foster inclusive and sustainable industrial development (ISID) in middle-income countries (MICs) in Europe and Central Asia, during a two-day conference organized by the UN Industrial Development Organization (UNIDO), the UN Development Programme (UNDP) and the Ministry of Foreign Affairs of the Republic of Belarus. Europe and Central Asia have 18 MICs, 11 of which are landlocked, constraining their ability to expand international trade and increasing their vulnerability to external economic shocks, according to the UN.

Participants at the conference in Minsk, Belarus, on 23-24 April 2015, recognized the role of industrial diversification and structural transformation in helping MICs to achieve inclusive and sustainable economic development. They highlighted the importance of strengthening MICs’ institutional and productive capacities, and supporting entrepreneurship and investment in development, innovation and technological learning, noting that innovation, modernization of services and new technologies are particularly critical as countries compete in the global economy. The conference also considered ISID within the context of globalization, climate change and demographic changes.

MICs must adopt long-term industrial development strategies to foster innovation, while also ensuring a balance between rapid economic growth and environmental and social sustainability, said Wu Hongbo, UN Under-Secretary-General for Economic and Social Affairs, in a keynote address. Wu highlighted the role of targeted industrial policies in reducing income inequality, promoting environmental sustainability, stimulating productivity growth and increasing demand for jobs and skills. Wu also identified three factors in a strengthened global partnership to facilitate sustainable industrialization: easier access to and transfer of technology, including for environmental sustainability; higher levels of investment in human capital and physical infrastructure; and enhanced market access and integration of global value chains.

Participants also discussed specific development challenges faced by MICs, including increasing environmental degradation and pollution, rising income inequality, poverty and growth deceleration.

UNIDO Director General Li Yong suggested that donors and international development organizations, including UNIDO, rethink their engagement with MICs, shifting from a paradigm of assistance to a greater focus on cooperation and partnerships. He highlighted the role of the UN in brokering and creating “knowledge-sharing platforms to pool and share resources and…accumulated knowledge.”

The conference is expected to contribute to ongoing negotiations on the Third International Conference on Financing for Development (FfD 3) and the post-2015 development agenda. [UNIDO Press Release] [Under-Secretary-General Statement]