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53rd Governing Body Meeting [19-21 April 2011, Kuala Lumpur, Malaysia]

Annual Report of the Secretary-General
by Ryuichiro Yamazaki
APO Secretary-General

Ladies and Gentlemen:

It is my great pleasure to welcome the APO Directors, advisers, and observers to the 53rd session of the APO Governing Body. I would first like to thank all member governments for electing me as the ninth Secretary-General of the APO at last year’s Governing Body Meeting (GBM) in Kuala Lumpur. Given the history of the APO, it is with a deep sense of responsibility that I step into the shoes of the eight preceding Secretaries-General.

When I assumed this post, I set myself three objectives. The first was to understand better the needs of member countries. The Workshop Meeting of Heads of National Productivity Organizations (WSM) in Bangkok last October provided an ideal opportunity for me to meet the Heads of NPOs and learn firsthand of the challenges they and their countries faced. I also have met several APO Directors in connection with APO projects. For the APO to carry out its mission successfully, I humbly ask every member and its NPO to provide innovative ideas together with the necessary support, cooperation, and resources.

My second objective as the new Secretary-General was to gain deeper insights into our operations by attending projects taking place in Japan and several  abroad. These opened up avenues for me to speak to highly qualified experts and, more importantly, to participants from member countries. At the same time, I met several key stakeholders such as government officials, CEOs, economists, academics, and journalists to grasp firsthand the economic situation that our stakeholders operate in. I will continue my endeavors through all these direct interactions so that I can gain new ideas to improve the quality and scope of APO programs.

My third objective was to comprehend the Secretariat’s organizational capabilities. To foster an environment of teamwork and to turn our human resources diversity into a strength, I have emphasized the five Cs of communication, consensus building,confidence, cost-effectiveness, and credibility, both within the Secretariat and among member countries and their stakeholders.

APO has reached a significant milestone in its 50th year of existence. The combined GDP of the APO membership has increased to almost five times its original size in 1961, and due to productivity gains, our people now enjoy a substantially higher standard of living. However, we should not be complacent. The stark reality is that we face a crucial turning point.

At last year’s 52nd session of the Governing Body, the Directors agreed to the same amount of total membership contributions for the 2011/2012 biennium as for the previous biennium. The APO Directors also agreed to undertake a concurrent review of the contribution formula by a task force comprising 10 members. The results of that review were circulated to all Directors on 7 October 2010. A decision on the contributions must be reached later, and I am therefore submitting to the GBM the program plans based on the same biennial budget approved by last year’s GBM.

Even though the budget remained the same as for the previous biennium, this did not translate into the same number of projects due mainly to the decline of the dollar against the yen. The Secretariat would now like to propose that the GBM readjust the exchange rate to 80 yen to the dollar for the 2011 project line-up as compared with 93 yen adopted at the Bangkok WSM. The Secretariat, however, has also taken proactive measures to modify the lineup of planned projects and examined their cost-effectiveness. In doing so, we were able to increase the number of scheduled multicountry projects to 57 for 2011, up from the original 44 presented at last year’s GBM.

However, the number of multicountry projects has decreased from 87 in 2007 to the current 57 in 2011. This is not only due to the unfavorable exchange rate that increases administrative costs in dollar terms but also due to the reduction in the size of the total budget. In this respect, I would like to appeal sincerely for more cash grants to fund effective projects. In this connection, I would like to thank the Republic of China, Japan, the Republic of Korea, and Thailand for their additional cash grants for 2011. Furthermore, while being fully aware of budgetary constraints virtually all member countries face at present, I would also like to appeal for membership contribution payments to be made during the first quarter of each year. Otherwise, the APO’s cash flow will be severely affected and the Secretariat will have no alternative but to tap the working capital fund. Unfortunately, this has been the case this year.

The Secretariat has been taking drastic initiatives to reduce its administrative costs. For example, the rental for the Secretariat office, already lower than the current market rate, was renegotiated twice, amounting to a total reduction of 15% for 2011. Salaries have also been decreased by an average of 18% since last July. The GBM agreed last year to review these salary cuts within two years to ensure that the organization could continue to attract talented, dedicated professional staff. However, to set an example, I have decided to postpone the review of the 33% cut in the Secretary-General’s salary until the financial situation stabilizes.

But salary and rental cuts were not the only measures taken. The Secretariat also put into action other suggestions made by APO Directors during last year’s GBM. By making more effective use of IT and the e-mail system, the Secretariat was able to reduce courier costs by more than 10%. Further steps to increase cost-effectiveness are currently being studied, such as streamlining accounting and project planning systems.

Furthermore, about two-thirds of the professional staff have been appointed to their current positions within the last year. With this new, dynamic team, I will strive to leverage technological and process innovations. But it is not enough for the APO to improve its organizational flexibility and cost-effectiveness alone. We need to look at future strategic directions for the APO to be relevant. We also need to enhance the APO’s visibility in general, in tandem with our member countries and stakeholders, so as to upgrade organizational relevancy. With limited resources, we should not waver from our strategic directions.

In this connection, I would like to address a key point: the review of the APO’s current thrust areas. The Bangkok WSM followed up on the suggestions at the Kuala Lumpur GBM by conducting a strategic planning exercise. The Secretariat conducted a review of the APO strategic plan under the guidance of an advisory panel before forwarding the plan to NPO heads. This new strategic plan will be tabled under agenda item 13 for the GBM’s approval, after which the Secretariat will, along with the NPOs, develop an implementation plan for the 2013 and 2014 biennium to be discussed further at this year’s WSM in Vientiane, Lao PDR.

Let me now briefly highlight some key programs and projects that have taken place. An expert group has developed a framework for the priority area of public-sector productivity improvement, with the Canadian public-sector model serving as a useful benchmark.

The APO Center of Excellence (COE) for Business Excellence (BE) was initiated two years ago with SPRING Singapore. Meaningful improvements in BE capabilities in Pakistan, the Philippines, and Thailand have subsequently been achieved, and we will promote BE initiatives among other member countries.

e-Learning courses have gained a reputation as an effective way to extend the outreach of our programs. In addition to the online web-based and self-learning modes, the Secretariat will develop new, more structured self-learning courses to be available on our dedicated web portal.

The Green Productivity Program has provided the APO with an excellent platform to purse the crucial area of sustainable economic development. At the recent successful Eco-products International Fair (EPIF) in India, I could sense the strong commitment of both the Government of India and its business community, and hope that this will lead to the holding of a national version of the EPIF, as was in the case in the Philippines and Malaysia. The Secretariat looks forward to the next EPIF to be held in Singapore. Eco-products Directories have also been launched by several member countries, modeled on the APO’s annual edition.

A new Special Program for Strengthening the Capacity of Food Supply Chain Management in Asian Least Developed Countries was also launched. This program was initiated with a grant from Japan and covered training activities in Cambodia and Lao PDR. This program complemented multicountry projects that were geared toward the need of member countries to develop more competitive agribusinesses and make agriculture more sustainable.

Finally, the Productivity Databook has made the APO the definitive authority on productivity research in Asia and is often cited by researchers and the media. The 2011 edition focused on widening the scope of productivity indicators and developing quality-adjusted labor input measurement methodology.

In closing, let me underline that the economic emergence of Asia is being watched throughout the world. The APO is in a unique position at the heart of such a dynamic Asia to promote sustainable socioeconomic development not only for our member countries but also other interdependent economies in the region and beyond. For that to become a reality, we must aim to become even more competitive and productive by fulfilling our mission.

Thank you.

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