48th Session of the APO Governing Body
13–15 June 2006, Seoul, Republic of Korea

The Governing Body of the APO meets once a year in a member country to receive the annual report of the Secretary-General and the audited financial report for the preceding year, and to make policy decisions. This year’s meeting, jointly organized by the Korea Productivity Center and the APO Secretariat, was held in Seoul, Republic of Korea from June 13 to 15 with more than 50 delegates comprising of APO Directors representing the governments of member countries, their advisers and observers from other organizations.

It is my great pleasure to welcome distinguished APO Directors, advisers and observers to the 48th Session of the APO Governing Body. First of all, on behalf of all APO member countries and the Secretariat, I would like to express my sincere appreciation to the Government of the Republic of Korea for hosting this annual general meeting of the APO in bustling and beautiful Seoul. We are honored to have Mr. Jong Kap Kim, Vice Minister, Ministry of Commerce, Industry and Energy to grace the inaugural session. I would also like to thank Mr. Sung-Ki Bae, APO Director for Korea and Chairman and CEO of the Korea Productivity Center (KPC), for his kind words of welcome and the warm hospitality that he has so generously extended to us. My thanks also go to the able staff of the KPC for the excellent arrangements made for this meeting.

The APO 2005 Annual Report, which has been circulated, provides a detailed account of the activities carried out last year. Therefore, I will not elaborate further on it. Instead, I would like to focus on the three fields that I touched upon in my statement at last year’s Governing Body Meeting in Tokyo. I stated then that our activities must be more focused; our performance must be more cost-effective; and our operations must have more interactions with national and international organizations. Let me describe what has been accomplished last year and what lies ahead in future.

I would like to start with the issue of cost-effectiveness. Since the last GBM, the Secretariat has taken a number of measures to reduce administrative and operational costs. Last year, the Secretariat staff members, wishing to make a contribution in this regard, agreed to return three percent of their gross salaries for one year, effective from May 2005. This has been extended for another year namely from May 2006 to April 2007, with the concurrence of the staff members. During the same period, two departmental directors and two senior GS staff members left the services of the APO Secretariat, either because of retirement or the expiration of contracts. They were replaced by much younger staff members with considerable savings in the organization’s administrative costs.

With regard to operational or project costs, we were able to reduce them by about 10 percent in 2005 in comparison with the previous year, although the total number of projects in these two years was about the same. This reduction was ascertained by comparing the financial report of 2005 with that of 2004.

In addition, one other factor has contributed significantly to improving the financial situation of the APO. This is the substantial reduction of arrears in membership contributions. I would like to take this opportunity to express my deep appreciation to all those countries that made tremendous efforts to honor their financial commitments to the organization in the past year.

Concerning APO Secretariat reform, efforts have been made to increase the transfer of staff members among departments, as stated in the APO Secretariat Reform Plan. Earlier this year, there was an exchange of officers between the Industry Department and Agriculture Department. Recently, the senior officer of the Information and Public Relations Department has been moved to the Environment Department. Transfers of officers between these departments have not been previously undertaken. They marked a first step in our efforts to increase personnel mobility and to overcome the tendency of “silo” thinking within the Secretariat.

With regard to financial management, a review of current financial procedures is being undertaken to improve and streamline them for greater clarity, efficiency, and accountability. Although some progress has been registered, much more needs to be done.

The process of reform which the Secretariat has set in motion will gain momentum from now on. However, there is still a long way to go and we cannot reach our goal without the full support of member countries. It is my hope that the APO Secretariat Reform Plan submitted to this GBM will be strongly endorsed by all member countries. Timely implementation of the reform plan is the best way to bring about a proper balance between administrative and project costs by 2008.

Let me now turn to the need for sharpening the focus of APO activities. Last year, I singled out the issue of increasing private-sector participation in APO projects. As a follow-up, the Secretariat proposed to organize a number of projects aimed at increasing private-sector participation both in this year’s program and the ensuing two-year plan.

At the WSM in February this year, a number of delegates commented that the traveling expenses private-sector participants must bear is a major cause of their absence in APO projects and that the APO should bear their airfares as well. In heeding their advice, the Secretariat has submitted a proposal to this meeting to amend the project regulation governing this matter. In other words, if approved, the APO will be much more flexible in bearing the airfares of private-sector participants. I am hoping that with these measures private-sector participation will increase substantially.

A second way to sharpen the focus of APO activities is to continue to shift the emphasis from Category A projects to Categories B and C projects. One advantage of Category B projects is that participants from countries with common interest or geographic proximity could come together for a common learning experience. Another advantage, often overlooked, is that more than one participant could be invited from each participating country. The benefit of this should not be underestimated if we want to see tangible results from APO projects. One person cannot become a nucleus for starting a new productivity initiative. Three to five people representing diverse interests in the country can if they are able to build a network in their countries. With this in mind, let member countries and the Secretariat join forces to expand and improve on Category B projects.

A third way to sharpen our focus is to pay more attention to results, especially tangible results. This can take various forms. It could be simply an increase in the number of productivity specialists or Green Productivity experts trained. It could be the number of companies participating in best practice networks or eco-products international fairs. It may even be the number of member countries undertaking a one-village one-product (OVOP) movement or quality management award system. In the case of nascent NPOs, an increase in the number of full-time staff members could be a good indication of their organizational growth and development. It is always useful to think in terms of tangible results. If we persist in this result-oriented approach, we are more likely to select projects that could make a difference to member countries.

The Secretariat has proposed amending the project regulations to provide airfares to private-sector participants. It will also make extra efforts to shift the emphasis from Category A projects to Categories B and C projects and to formulate projects that are result-oriented. However, all these efforts will come to naught if the quality of participants is uneven.

During the past year, I attended several projects. I listened to presentations, joined group discussions, and participated in site visits. Most of the participants were well qualified and well motivated, but some did not seem to have the requisite qualifications or work experience to benefit from APO projects. Such participants, as has been frequently commented by other participants and resource persons alike, undermined the learning experience of the whole group. It is my hope that member countries will give their full support and cooperation to help maintain the quality of participants at the levels specified in the project notifications.

With regard to our international collaboration program, I would like to describe briefly this year’s activities under our alliance with the ASEAN Foundation and under our African initiative. The APO’s collaboration with the ASEAN Foundation began in 2005 with a grant of over $355,000.00 from the foundation to organize three projects in the ASEAN region. This collaboration was renewed in 2006 with a fresh grant of almost $500,000.00 for additional four projects. We are very pleased to have this partnership with the foundation as we share the common goal of promoting mutual assistance, equitable economic development, and the alleviation of poverty. It is my hope that this collaboration will prove to be useful and satisfactory for our two organizations.

Under our African initiative, we are planning to sponsor a roundtable conference for the promotion of the productivity movement in Africa in Johannesburg, South Africa in late August. We have invited productivity stakeholders from seven African countries to participate. At the same time, the APO is planning to depute five resource persons from APO member countries other than Japan, including two NPO heads, two former NPO heads, and a senior NPO director, to share their wisdom and experience with Africa. In addition to the event in South Africa, selected African countries will be invited to attend two of our regular projects, one in the Philippines and the other in Thailand.

The Deputy President of South Africa, who visited the Secretariat last April, expressed her appreciation for the APO’s support and cooperation. On my part, I would like to thank the Government of Japan for the special fund for the African initiative and the many member countries and NPOs for their assistance and cooperation through the deputation of resource persons and the acceptance of African participants. I am convinced that the African initiative will be beneficial to both APO members and African countries.

Ladies and gentlemen, this year marks the 45th anniversary of the establishment of the APO. I am not sure whether 45 is young or old. I would like to believe that we have just reached our prime and are full of energy and enthusiasm to press ahead to break new ground and reach new heights for achieving higher productivity. Since its establishment, the APO has made important and lasting contributions to the socioeconomic development of the region. We want to continue to make a difference. I believe we have the resolve and the commitment to do this. I wish you a fruitful and successful meeting and an enjoyable stay in Seoul.

Thank you.

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