52nd Governing Body Meeting in Malaysia
20−22 April 2010, Kuala Lumpur, Malaysia
Keynote Address
by Y.B. Dato’ Sri Mustapa Mohamed
Minister of International Trade and Industry of Malaysia
APO Governing Body Chairman Kazuo Sunaga,
APO Secretary-General Shigeo Takenaka,
Distinguished Heads of National Productivity Organizations (NPOs),
Observers from Kenya, Mauritius, Nigeria, Turkey, and Zambia,
Board of Directors of the Malaysia Productivity Corporation (MPC),
Director General of the MPC Mohd. Razali Hussain,
Yang Berbahagia Tan Sri-Tan Sri, Dato’-Dato’, and
Ladies and Gentlemen:
Assalamualaikum, Salam Malaysia, and good afternoon. I am indeed honored to be invited to deliver this keynote address. On behalf of Malaysia, I extend a very warm Selamat Datang to all our distinguished guests. It is a privilege for Malaysia to be hosting this high-level 52nd APO Governing Body Meeting.
Last month, our Honorable Prime Minister unveiled the New Economic Model (NEM). To ensure that Malaysia forges ahead in meeting the challenges posed by the dynamic and changing global economy, the Malaysian government has introduced various initiatives. The programs launched over the past year is the “One Malaysia, People First, Performance Now” concept, to unite all Malaysians in facing the challenges ahead; and the Government Transformation Programme (GTP), to strengthen public services in the National Key Result Areas of crime, corruption, education, low-income households, rural basic infrastructure, and urban public transport.
The NEM is expected to propel Malaysia into becoming an advanced nation with inclusiveness and sustainability, in line with the goals set in Vision 2020 to be achieved through the Economic Transformation Programme (ETP). Featured in the NEM is the issue of greater reliance on productivity and innovation to drive growth.
The old approach of growth through capital accumulation and sectoral transformation has now become inadequate. Up to now, growth has come from large-scale physical capital investment, sustained human capital investment, and exports of manufactured goods, natural resource-based goods, and petroleum products. At the same time, total factor productivity growth was achieved by a shift from workers in low-productivity sectors like agriculture to higher-productivity manufacturing and service jobs. Merely increasing investment levels and low-skilled labor will no longer suffice to drive growth to a higher level or to move up the value chain. Future growth must come from higher factor productivity, nurtured by more innovative processes as well as support from strong private investment and talent.
At the international level, Japan and the Republic of Korea, the Asian members of the OECD, recorded productivity levels of US$77,640 and $32,059, respectively, in 2009 while OECD countries the USA registered productivity levels of $77,828, Norway $76,656, the UK $58,733, and Germany $49,517. Among APO member countries, Malaysia’s productivity level was $12,793, Thailand’s $4,596, the Republic of China’s $3,734, the Philippines’ $3,192, Indonesia’s $2,471, and India’s $2,051. This gap in productivity levels between developed countries and APO members indicates that there is potential for growth, and the initiatives of the APO will serve to ensure further development.
Several factors at both the macro and corporate levels helped facilitate Asia’s development. In the case of Malaysia, they included strong national development visions, plans, and policies, accompanied by appropriate economic, business, and investment stimulus packages. These were supported further by improvements in education, training, and quality of manpower; advances in technology and technological skills; and overall improvements in infrastructure. Malaysia will continue to strive to enhance productivity growth through talent development, adoption of sophisticated technology, greater innovation capacity and capabilities, as well as higher value creation through intensified research and development.
In the latest Global Competitiveness Report (GCR) 2009–2010, Malaysia is ranked 24th out of 133 countries. The 23 countries ahead of Malaysia are mainly developed ones, which include Asian countries such as Singapore, ranked third; Japan, ranked eighth, the Republic of China, ranked 12th, and the Republic of Korea, ranked 19th. These countries are characterized by high GDP per capita and are in the innovation stages of their development. Over the last five years, Malaysia has remained among the top 25 most competitive countries globally and it was acknowledged by the World Economic Forum (WEF) that Malaysia benefits from the quality of its infrastructure, goods market efficiency, financial market sophistication, strong business sophistication, and innovative potential.
The majority of Asian economies such as Bangladesh, Cambodia, India, Mongolia, Nepal, Pakistan, the Philippines, Sri Lanka, and Vietnam who had participated in the GCR report were classified as factor-driven economies, offering labor at lower cost and unprocessed natural resources as the dominant basis of competitive advantage. Brunei and Indonesia are in transition from factor-driven to efficiency-driven, while PR China, Malaysia, and Thailand are efficiency-driven economies, producing more advanced products and services smoothly. The innovation-driven Asian economies such as Hong Kong, Japan, Republic of Korea, Singapore, and the Republic of China should be benchmarked by APO member countries for their ability to produce innovative products and services at the global technology frontier using the most advanced methods.
Notwithstanding the short-term urgencies, the WEF mentioned that Malaysia must put emphasis on long-term competitiveness fundamentals to weather business cycle downturns and remain resilient. It was also recommended by the WEF that for the country to maintain its competitive edge, Malaysia now needs to prepare to shift to an innovation-driven economy where companies compete through innovation, producing new value-added and different goods using the most sophisticated production processes. The launch of Malaysia’s Innovation and Creativity Year 2010, is an initiative by the government to instill innovation as part of our culture. This, together with the NEM based on innovation, creativity, and value-added activity, will multiply the people’s per capita income in the next 10 years. This high-income economy that Malaysia envisages will have to be interlinked for further productivity growth.
It is heartening to note that the APO has gone beyond the Asian region to the African continent as part of renewed Asia-Africa ties, following the commemoration of the 50th anniversary of the Bandung Asia-Africa Conference held in 2005. At the conference, the government of Japan pledged to step up Asia-Africa ties, and, among others, cooperation in productivity promotion in Africa utilizing the Asian experience. Against this background, the APO took up the task of providing assistance as an effective body to spearhead the productivity movement in Africa. This collaboration and cooperation are admirable in the spirit of “Together We Will Prosper Through Productivity.” To all observers attending this meeting from Kenya, Mauritius, Nigeria, Turkey, and Zambia, may you enjoy productive exchanges of ideas, views, and experiences.
Finally, I wish all of you fruitful discussions during this three-day Governing Body Meeting, which I understand will be deliberating on the strategic direction for the APO. I believe that with the strong collaboration, spirit of cooperation, connectivity, and linkages established among our 19 member countries, the Asian region will be able to withstand global challenges and become a force to be reckoned with.
Productivity is a marathon without a finish line. It can be assumed that the APO will continue to be relevant and bring about positive impacts on the productivity of NPOs. Productivity will continue to be prominent to ensure that Asia remains productive, competitive, and innovative, which is even more compelling in the context of a highly competitive, globalized world such as today’s.
Thank you.
