The Organisation One Withdraws From

I. A Rare Event

In December 1995, the United States informed the Secretary-General of the United Nations that it would withdraw, at the end of the following year, from one of the UN's specialised agencies. The withdrawal took effect on 31 December 1996. The agency in question was the United Nations Industrial Development Organization, UNIDO for short, headquartered in Vienna. The withdrawal deprived the organisation at a stroke of a quarter of its regular budget.

The remarkable thing about this event was not only the withdrawal itself but who carried it out. It was not a government fundamentally hostile to international cooperation. It was the administration of the Democratic president Bill Clinton, whose party is traditionally well disposed toward the United Nations. The Clinton administration's justification was sober and devastating at once: UNIDO had not been able to define its purpose and function, much less become effective in its programmatic activities. The American government recommended that the other member states consider phasing the organisation out.

The United States was not alone. Canada had already withdrawn in 1993. Australia followed at the end of 1997. Three Western industrial nations arrived independently at the same conclusion: that the organisation was of marginal importance and offered poor value for money. It is a rare event in the history of the United Nations that states do not reform a specialised agency but leave it. With UNIDO it has happened three times.

II. An Organisation in Search of Its Purpose

UNIDO was founded in 1966 by the UN General Assembly to promote the industrialisation of developing countries, which at that time were emerging from decolonisation in great numbers and with little or no industrial base. That was a clear goal in a clear time. In 1975, the Lima Declaration proclaimed the programme that developing countries should reach a share of 25 per cent of world industrial output by the year 2000. In 1985, UNIDO was converted into an independent specialised agency.

The goal of the Lima Declaration was not achieved. It was not remotely achieved. The industrialisation that took place in East Asia came about not through UNIDO but through national industrial policy, foreign direct investment, and integration into global value chains. The countries that industrialised — South Korea, Taiwan, later China — did so by their own strength and their own strategies. The countries most intensively served by UNIDO did not industrialise. The connection between the organisation's activity and the declared goal of that activity could not be established.

With the restructuring of UN activities in the early 1990s, UNIDO began to redefine its development goals. It has been doing so ever since, without pause. Industrialisation of developing countries became sustainable and environmentally sound economic infrastructure. That became inclusive and sustainable industrial development — the title of the 2013 Lima Declaration, with which the organisation once again expanded its mission. Today UNIDO names as its priorities industrial decarbonisation, sustainable value chains with local value addition including the critical-minerals sector, and the strengthening of agro-industry. The movement of these goal definitions follows not an inner logic of the matter but the current fashion in development-policy concepts. Whatever is uppermost in the debate — sustainability, inclusion, decarbonisation, critical minerals — is taken into the organisation's mission.

An organisation that redefines its purpose every few years has no purpose that it has defined. It has an existence to which it assigns shifting purposes. That is the finding the Clinton administration formulated in 1996, and it has not been overtaken since, but confirmed.

III. The Structure of Persistence

Despite the withdrawal of three industrial nations, despite the loss of a quarter of its budget, despite the recommendation of its largest contributor that it be phased out, UNIDO persists. How is that possible?

Ronald Reagan once remarked that the nearest thing to eternal life one will ever see on this earth is a government programme. International bureaucracies are no different. UNIDO today employs around 650 permanent staff and, in addition, more than 1,800 international and national experts each year. It maintains offices in over 60 countries. This structure has a self-interest in its own continuation that is entirely independent of the question of whether the organisation fulfils its purpose. The staff, the consultants, the country offices, the conferences, the reports — all of this forms an apparatus whose continuation is the actual result of its activity.

A former ambassador familiar with the matter posed the obvious question: why does an organisation regarded by the Anglosphere states as marginal and useless employ 1,800 permanent consultants in addition to 650 fixed staff — including some hired without a transparent and competitive process and working from their home countries? The question has never been answered. It is the question of the relationship between apparatus and task, and UNIDO is the case in which this relationship becomes especially clear, because here the apparatus has outlived the task by decades.

IV. The German Director

Since 10 December 2021, UNIDO has been led by a German: Gerd Müller, formerly, from 2013 to 2021, German Federal Minister for Economic Cooperation and Development. The move is instructive. The man who stood for eight years at the head of the German development ministry — that is, of the very apparatus whose effectiveness has been disputed for decades — moved to the head of the international organisation from which three industrial nations have withdrawn on grounds of demonstrated ineffectiveness. It is a career that runs within the helping industry, from its national to its international stage.

Müller's candidacy in 2020 caused surprise in Berlin as in Vienna. In Berlin, as the trade journal welt-sichten noted, Müller was scarcely regarded as a champion of multilateral cooperation. The German government nonetheless put forward his candidacy early and emphatically. After Japan and China, Germany is the third-largest contributor to UNIDO. The constellation is remarkable: a country that is among the organisation's largest financiers places its own former development minister at its head. The contributor supplies the administrator of its own contributions.

In May 2025, before Müller's re-election, the Welt am Sonntag reported on the internal state of the organisation. The mood had been tense for months. An internal report of early May 2025 found that the general morale and motivation of the staff was low. There were allegations of nepotism, alarming audit reports from the internal revision, discontent among employees, and an affair concerning harassment allegations against a close confidant of Müller. UNIDO's lawyers denied the allegations.

These allegations did not harm Müller's re-election. In November 2025, at UNIDO's 21st General Conference in Riyadh, Saudi Arabia, he was unanimously confirmed by the 173 member states for a second term. No opposing candidate was in sight. That is the second instructive fact. An organisation whose internal state is described by internal audit reports as alarming confirms its head unanimously. The unanimity is not a sign of approval of his performance. It is a sign that the member states have no interest in the organisation strong enough to wage a contest over it. Where no one fights, the incumbent wins unanimously.

V. The Lines of Defence

There are arguments for UNIDO's continuation, and they should be named, because they explain the structure of its persistence.

The first argument is universality. The UN Secretary-General responded with regret to the American withdrawal in 1995 and declared that universality was one of the main strengths of the UN agencies. The argument runs: a UN specialised agency should encompass all states, because only then is it legitimate. This argument is formally strong and substantively empty. It says nothing about whether the organisation achieves anything. It says only that, if it already exists, it should encompass as many as possible. It is an argument for the completeness of the membership, not for the existence of the organisation.

The second argument is geopolitical and of more recent date. It runs: China is active in UNIDO; Müller's predecessor was the Chinese Li Yong; whoever withdraws cedes the field to China. This argument played a role in the American debate when the Obama and later the Biden administration considered rejoining. It is the same argument advanced for development aid as a whole, and it has the same weakness: it justifies the organisation not by what it achieves but by what a competitor would gain if one left it. An organisation whose justification for existing consists in the fact that another might otherwise use it has no justification of its own. The Heritage expert who represented the American position put it soberly: countering China was a factor in decisions about participation in UN organisations, but not the only one; the central question had to be whether one's own interests are affected by the organisation — and with UNIDO they are not.

The third argument is the organisation's self-presentation. It points to its projects, to the doubling of technical project implementation since Müller took office, to the 5,000 delegates of the Global Industry Summit 2025 in Riyadh. This is the language of every organisation whose success cannot be measured against an external standard: the enumeration of its own activity as evidence of its own effect. The number of projects, conferences, delegates says nothing about whether the industrialisation of developing countries was promoted. It says only that the apparatus was active. Activity is not effect. The outflow of funds is not the result.

VI. The Case Within the Pattern

UNIDO is not a special case. It is a particularly clear case of a pattern that characterises the entire helping industry. The pattern consists of four elements, all of which are present in UNIDO.

The first element is the unclear, wandering goal. A task that cannot be measured cannot be failed. UNIDO failed its originally measurable goal — the industrial share of the developing countries — and replaced it with unmeasurable goals that can no longer be failed.

The second element is the apparatus whose existence is tied to the disbursement of a budget. 650 staff, 1,800 consultants, 60 country offices form a structure that wants to persist and whose persistence does not depend on the fulfilment of the task.

The third element is the absence of external oversight. A UN specialised agency is subject to no parliamentary oversight by a sovereign. It is financed by its member states, who are individually too weakly interested to oversee it and collectively too divided to reform it. The only effective oversight ever exercised was withdrawal — and three states chose it, because reform from within was hopeless.

The fourth element is the self-reproduction of the leadership. The apparatus recruits its leadership from the personnel that sustains it. A German development minister becomes director of the international development organisation. The re-election is unanimous, because no one has an interest in preventing it. The internal audit reports change nothing, because there is no body to which they would have consequences.

These four elements together yield an organisation that persists not although it is ineffective, but because its ineffectiveness remains without consequence. That is the core. An organisation whose failure had consequences would long since have been reformed or dissolved. An organisation whose failure has no consequences persists as long as someone pays its bills.

VII. Who Pays the Bills

The bills are paid by the states that have not withdrawn. First Japan and China, third Germany. It is no accident that the director comes from the third-largest contributor. Germany has given itself, in international development policy, the role of the reliable payer — the same role it plays in bilateral development aid, where in 2025 it rose to become the world's largest donor, not because it gave more but because others withdrew.

It is the same movement on two levels. In bilateral aid, Germany becomes the largest donor because the United States withdraws. In UNIDO, Germany remains the third-largest payer and supplies the director, while the United States, Canada, and Australia have withdrawn. Where others draw the consequence from ineffectiveness, Germany takes the lead. It interprets the gap left by the others' withdrawal not as a warning but as an opportunity. It becomes first in a field that the others are leaving, because they consider it not worthwhile.

This stance is presented as responsibility. Germany, it is said, remains a reliable partner in the world; it holds fast to its international responsibility. The question this self-presentation does not ask is whether the cause one reliably serves is worth the service. Reliability toward an ineffective organisation is not responsibility. It is the confusion of loyalty with judgement. Whoever keeps faith with an organisation from which the soberest observers have withdrawn, and supplies its director, proves not responsibility but the inability to learn from the experience of others.

VIII. The Finding

UNIDO is the organisation one withdraws from. Canada in 1993, the United States in 1996, Australia in 1997 — three industrial nations drew the same conclusion from their own examination: that the organisation cannot define its purpose and cannot fulfil its task. The American administration that carried out the withdrawal was not a UN-hostile one; it was the Clinton administration. The finding was not ideological but sober. It has not been overtaken in the thirty years since.

The organisation persists, not because the finding was refuted, but because its ineffectiveness remained without consequence. It has redefined its purpose so often that it can no longer be failed. It has built an apparatus whose continuation is the actual result of its activity. It is subject to no oversight that could attach consequences to its failure. And it recruits its leadership from the personnel of the helping industry, whose international apex it forms. At its head today stands a German ex-minister, unanimously re-elected despite internal audit reports describing its state as alarming, financed not least by Germany, which sees in the ineffectiveness of international development policy not the warning that three other states saw in it, but the opportunity to become first.

It is not about the individual persons. It is about a structure in which failure has no consequence and the apparatus sustains itself as long as someone pays. UNIDO is the pure case of this structure, because with it the withdrawal has already taken place and the organisation persists nonetheless. It is the proof that an international bureaucracy does not perish from its ineffectiveness, but only on the day the last payer draws the consequence that the first drew thirty years ago. Until then it persists, redefines its purpose, doubles its project figures, holds its summits, and re-elects its director unanimously.