47th Session of the APO Governing Body
14–16 June 2005, Tokyo, Japan

It is a great pleasure for me to welcome all distinguished delegates, advisers, and observers to the 47th Session of the Governing Body of the Asian Productivity Organization. On behalf of all APO member countries and the Secretariat, I would like to express my sincere appreciation to the Government of Japan for hosting this important meeting.

I would also like to thank Mr. Kosuke Nakahira, APO Director for Japan, for his support and guidance in the preparation of the GBM. He is particularly concerned that the warmest hospitality is accorded to all distinguished delegates, advisers, and observers. I would also like to acknowledge with gratitude the excellent support for the meeting provided by the Japanese Ministry of Foreign Affairs; Ministry of Economy, Trade and Industry; Ministry of Agriculture, Forestry and Fisheries; and the Japan Productivity Center for Socio-Economic Development (JPC-SED).

Let me take this opportunity to extend my heartiest congratulations to the JPC-SED as it celebrates its 50th anniversary this year. We deeply appreciate the commemorative symposium it held yesterday, which was specially organized to coincide with this GBM. The JPC-SED has been in the forefront of the productivity movement in Asia and the Pacific since the founding of the APO in 1961. Its role as pacesetter and standard bearer will continue to be important in the years ahead.

Every five years, the APO honors individuals in member countries who have made outstanding contributions to improving productivity at the regional and national levels. This year, the Governing Body has unanimously agreed to confer the APO Regional Award on four deserving individuals and the APO National Award on 10 others. To all the distinguished awardees, we extend our sincere congratulations.

This is my first attendance at a GBM and my first annual report to this body as APO Secretary-General. I thank you most sincerely for giving me the honor and privilege of serving in this important organization. I will do my utmost to ensure that this organization remains relevant and useful to you. The 2004 Annual Report has been circulated. I will not endeavor to summarize the work done last year as the details are well documented in the report. Instead, I would like to share with you my thoughts on the future directions in which the APO should move.

A couple of months ago, I saw on television an interview with Mr. Carlos Ghosn, President and CEO of Nissan Motor Company, a leading automotive company. Mr. Ghosn was responsible for the successful turnaround of the company, from one that was losing money to a highly competitive enterprise in the global market. When asked about the most difficult obstacle that stood in the way of achieving this, he answered that it was not a lack of funds or other resources but a lack of realization on the part of the staff that things could be changed. Until they realized that the old, established way was not the only way to do business, it was not possible for him to introduce any reform measures. However, once that mindset was changed, other things gradually fell into place.

I believe that changing mindsets is a prerequisite of the productivity movement. To establish the belief that we can change past practices, do better, and compete with the best in the world is an essential ingredient for achieving sustained economic development. The fact that Asia has achieved the highest economic growth rates in the world in the last half-century is not unrelated to the existence of many vibrant NPOs in the Asia-Pacific region and the activities of the APO, the only intergovernmental regional organization dedicated to the cause of promoting productivity.

Dynamic changes in the region and emerging new realities are constant reminders to us in the APO of the need to adapt ourselves to changing circumstances. Our activities must be more focused; our performance needs to be more cost-effective; and our operations should have more interactions with national and international organizations, both inside and outside the region. Let me briefly describe these three issues.

To start with, there is a growing need to sharpen focus on our activities. In any national productivity program, the main driver is the private sector. If this sector is apathetic toward the productivity cause, one cannot expect meaningful results. And if an NPO cannot provide useful services to the private sector, its relevance in society will be undermined. The APO started its activities by enabling the private sector in member countries to provide the force behind the productivity drive.

Over the past decade, however, we have witnessed a sharp decline in private-sector participation in APO projects. Today, it averages much less than 10 percent, with the remainder of the participants coming from the public sector and nonprofit organizations. We are clearly missing an indispensable sector in our program and we need to bring it back. This phenomenon was noted at the last WSM and it was suggested that we should make our projects more attractive and practical to the private sector.

In my view there are at least three aspects to this issue. The first is the selection of themes and the design of curriculum. If these two are not attractive to the private sector, whatever improvements we may make in other areas will not increase private-sector participation. A good theme that comes to my mind is eco-products, for which we are organizing an international fair in Thailand in October this year. We held a very successful similar event last year in Malaysia.

The second aspect in attracting private-sector participation is the modality of APO projects. Lately, the duration of our projects, and of training courses and seminars in particular, was shortened from a few weeks to only one week. One may argue that such a limited time period does not allow for in-depth treatment of the subject matter and thus discourages private-sector participation.

The third aspect is a tendency of some NPOs to nominate more public-sector personnel for APO projects, regardless of the relevance of the themes to them. Earlier this year, the APO and JPC-SED organized an excellent Top Management Forum on Corporate Social Responsibility, with first-class presentations by prominent Japanese business leaders and others. However, less than half of the participants were from the private sector. The forum would have been more fruitful if we had had a greater private-sector presence.

The problems I have mentioned must be dealt with. Although the Secretariat should take the lead, the full cooperation and support of member countries are clearly essential.

Let me next address the issue of efficiency and cost-effectiveness in relation to Secretariat administration and project management. One important factor to keep in mind is that the combined membership contributions and special cash grants have been declining gradually in recent years, while the administrative costs of the organization have been creeping up during the same period. Recognizing this, and with the cooperation of the APO staff, a voluntary salary reduction of 3 percent was put into effect from 1 May this year. But this is at best a temporary measure. The Governing Body, at its meeting in Yogyakarta, Indonesia, last year, decided to undertake a study of salary adjustment in 2006 or 2007. In light of the above, an earlier review may be necessary.

Various measures in other areas have been undertaken, and several are being considered to achieve further cost reductions. In recent months, although two officers and one general support staff have left the services of the APO and one staff member is on long-term maternity leave, only one officer's post will be filled. Current staff members are assuming the duties of the other positions.

Other measures being considered include downgrading the class of air travel for international staff members and their families now entitled to business class for home leave; reducing office space in the Secretariat; and providing a cash payment of up to a certain percentage of business-class airfare to resource persons, including a flat sum to cover incidental expenses. The latter is to minimize overtime costs as processing all those items is time-consuming. Some measures may necessitate amendments to the Staff Regulations and Rules.

At the recent Workshop Meeting of Heads of the NPOs in New Delhi, India, I mentioned the possibility of restructuring the Secretariat as part of an ongoing effort for greater administrative efficiency. As this is a matter of concern to all Secretariat members, it should be undertaken with great care and sensitivity. On this matter, I would appreciate very much the advice and guidance of the Governing Body in this meeting.

Needs to emphasize international collaboration within and outside the region are my last point. Recognizing the increased interdependence of countries and regional organizations worldwide, the APO must continue to strengthen ties with the latter to create synergies for mutual benefits. In this spirit, we are expanding our cooperative relationship with the ASEAN Foundation, which has provided financial assistance to three APO projects in 2005 and possibly four more in 2006. We are also partnering with the Colombo Plan Secretariat to implement 13 projects jointly this year and, we hope, in the years to come as well.

A number of other organizations are also contributing to upgrading the quality of APO projects as our implementing partners. They include the Organization for Economic Cooperation and Development, Asian Development Bank, US Environmental Protection Agency, United Nations Development Programme, United Nations Environment Programme, UN Food and Agriculture Organization, International Labour Organization, UN Volunteers, State of Hawaii, Henley Management College, UK, and University of Queensland, Australia.

Over the years, we have on occasions received requests from countries in other regions, especially Africa and South America, for assistance in developing their productivity programs and for permission to take part in our activities. Perhaps the time has come for the APO to play a more global and contributive role in enabling other regions to develop their productivity movements. With your approval, the Secretariat will explore the possibility of extending this cooperation.

At last year's GBM, two proposals were submitted and approved in principle, with a request to the WSM to study the operational details. One was to set an annual theme for APO activities and the other was to establish an APO organizational excellence award to recognize business and other organizations in member countries which have made remarkable achievements in productivity.

The WSM was of the view that it would be difficult for the APO as well as member countries to provide sufficient funds to organize special events and activities around annual themes. It recommended that a final decision be made only after careful evaluation of the results of GP-related activities, which was chosen as the special theme for 2004 and 2005.

On the proposed APO Award, there were concerns among NPO Heads that it might overlap with the national quality or productivity awards already in place in a majority of member countries. The WSM recommended that it would be more practical for the APO to continue organizing projects relating to quality and productivity awards so that member countries could refine their own award systems and mechanisms. A study mission to the USA last year to learn from Malcolm Baldrige Award-winning companies and organizations is a good example.

A suggestion was made at the WSM to amend the current five thrust areas by changing one and adding another, bringing the new total to six. The current “Integrated Community Development” was to be changed to “Sustainable Development in Agriculture” and the proposed new area was “Quality Governance in the Public Sector.” The suggestion was interesting. However, I would like to request that the changes proposed at the WSM be kept on hold for the moment until the Secretariat has had the opportunity to study them more carefully.

The 2006 Program was approved by the WSM with the request that a survey be undertaken on member countries' preferences for the projects in the 2006 Program and the results analyzed. However, this was not a condition for adopting the 2006 Program. This same exercise should be undertaken in planning the 2007 Program, which the WSM will review next year after revision.

In compliance with the recommendation of the 2005 WSM, the Secretariat sent a questionnaire to all NPOs immediately after the WSM, to which altogether 15 NPOs responded. Most of the 98 projects in the 2006 Program received majority support from the responding NPOs. However, it appears premature to conclude that the remaining projects are not useful as some NPOs have not yet responded. Therefore the Secretariat would like to request that the 2006 Program be approved for implementation next year. The Secretariat is prepared to take appropriate actions on less prioritized projects in consultation with the NPOs, as was the case in the past. The 2007 Program is being presented to this body as it was submitted to the 2005 WSM for your reference.

In the next few days, we will have ample opportunities to discuss various issues on the agenda and share our collective wisdom and experience in devising future policies and strategies to promote the productivity movement further. I wish you all fruitful discussions and an enjoyable stay in Tokyo. Thank you.

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