44th SESSION of the APO GOVERNING BODY MEETING
18-20 June 2002, Kuala Lumpur, Malaysia
Inaugural Address
by Dato' Seri Rafidah Aziz
Minister of International Trade and Industry,
Malaysia
Welcome to members to Malaysia and hope they will
be able to see as much of the country beyond the conference
premises.
This 44th Session
is being held during a period of global uncertainties
and sluggish economic growth, which has affected member
countries of the APO. Also increasingly, competition
in the marketplace dictates that priority be placed
upon productivity and quality, to provide the necessary
competitive edge.
The need to ensure the optimization, also demands
that economies focus on total factor productivity
to drive growth, and ensure resilient over the long
term. There is the need to unsure that all sectors
of society and economy in each country, understands
the role of productivity and quality, and that striving
for excellence must necessarily be part and parcel
of the national culture.
The member countries of the Asian Productivity Organization
(APO) constitute a diverse range of economies, at
differing levels of development, and efficiency. Clearly
there also exist differences in levels of productivity
amongst the APO members, which suggest that there
is a productivity divide amongst them.
Perhaps in this meeting, in Kuala Lumpur, the APO
Governing Body can address this issue of a productivity
divide, and draw up a long-term strategy to narrow
that divide, and more specifically to assist the lesser
developed economies to move up the productivity ladder.
Benchmarking programmes can be drawn up to identify
shortcomings and deficiencies, and to provide the
necessary assistance to those requiring help in moving
productivity levels upwards.
It is important that the outreach of the various
APO programmes, are wide enough to encompass sectors
of society and economy which matter, such as the small
and medium enterprises in industry and business, potential
entrances into the workforce in key economic sectors
and those within the education system.
Such outreach would ensure that, there would be a
gradual absorption of the culture of high productivity
and striving for excellence, into everyday life of
a country's citizens, and in particular, amongst those
who drive the growth of economies.
It cannot be denied that the degree of ability to
access new knowledge, and information would determine
the capacity to achieve higher levels of productivity
and performance, particularly the ability to access
the rapidly evolving Information and Communication
Technology. ICT has become an important contributory
exacerbate factor towards Productivity, and the existence
of any digital divide, can existing differences in
levels of productivity and efficiency.
In this context, the APO can undertake programmes
to identify such correlations, and subsequently, put
into place strategies to enhance capacity to access
ICT, for productivity growth.
For countries like Malaysia, which has the objective
to rapidly industrialize and achieve developed country
status by 2020, every effort it accelerate productivity
growth is important. As a very open economy competing
in the global marketplace, in the area of trade, and
vying for foreign direct investments, efficiency brought
about by high levels of productivity is critical.
Thus, benchmarking against the best globally, is important,
in order to be competitive.
APO programmes, especially those in the area of technical
support and assistance have benefited Malaysia, and
have also enhanced the capacity to understand productivity,
and to implement programmes on Productivity and Quality
in the country.
Over the period 1996-2001, Malaysia registered productivity
growth of 3.3%, which surpassed that of several countries
in the OECD, including the United States, United Kingdom,
Canada, France, Germany, Japan and Italy.
In 2001 itself, many OECD countries experienced a
slowdown in productivity growth, due to the sluggish
world economy, which resulted in lower capacity utilization.
Malaysia, too, witnessed a decline in productivity
growth to only 0.3%b for 2001, although it surpassed
the performance of several OECD and the region's economies,
which suffered negative productivity performance.
Malaysia is now back on track of economic growth,
and a multi-pronged approach has been taken, to improve
productivity, at both sectoral and firm levels. These
measures include, amongst others :
- nurturing the culture of innovation and creativity;
- enhancing utilization of ICT;
- strengthening the nation's competitive edge in
its core competencies and niches;
- moving towards higher-end industrial production
and enhancing workforce skills to effectively interface
with new processes and technology;
- inculcating the culture of excellence, and a productive
mindset in society.
Increasingly, Total Factor Productivity is becoming
an important contributor towards economic growth and
development of Malaysia.
While during the 7th Malaysia Plan period, Total
Factor Productivity contributed 24.8% to GDP, as compared
to 25% by labour and 50% by capital, during the 8th
Malaysia Plan, Total Factor Productivity is expected
to contribute 37.2% to GDP growth, while labour and
capital are expected to contribute 21.5% and 41.3%
respectively.
For the decade of the Outlined Perspective Plan 3,
spanning 2001-2010, it is expected that Total Factor
Productivity will contribute 42.5% of GDP growth,
while labour will account for 20.9% and capital 36.6%.
Ladies and Gentlemen,
Increasingly, countries will find that growth and
development will be productivity driven, gradually
shifting from being input-driven, particularly by
investment and capital accumulation. In this context,
the sharing of information, knowledge and expertise
in promoting productivity awareness and implementing
programme, to enhance productivity, will continue
to be important for all member countries of the APO.
In fact, the APO itself can function as the prime
mover of productivity growth in the region, within
which the APO operates, if the strategies and activities
are market-driven.
It is important that the APO chart out a road map
towards bridging the Productivity Divide in the region,
and systematically monitor the progress or otherwise
of productivity performance amongst members. Of importance,
too, is for the APO to bring on board to its various
programmes, entities from the business and industrial
community, so that the APO initiatives can directly
benefit those which contribute to a country's economic
growth and development.
Certainly with rapid development in many areas of
technology, and with radical restructuring in the
global industrial profile, new factors have evolved
to influence the nature and degree of competition,
and therefore new approaches need to be looked into,
when determining benchmarks, and when assessing competitive
efficiency. In this context, the expertise within
the APO countries be harnessed to draw up new and
more relevant benchmarking methodologies and approaches
and enhancement tools, which can serve to guide enterprises
in the developing and lesser developed economies in
being competitive in the new global economic and business
environment.
I hope the meeting in Kuala Lumpur this time will
initiate new policy directions and work programmes
relevant to the rapidly changing times and situations.
