Annex II. Opening addresses
Inaugural address by
Ms Mitsuko Horiuchi
Regional Director
Asia Pacific Region
Honourable Minister, Distinguished Resource Persons, Ladies and gentlemen,
It is a pleasure for me to welcome you all to this Asia and Pacific Round Table on Roles of Enterprises and Society Partnerships.
I would like first to thank the Honourable Minister of Industry, Mr Suwat Liptapanlob for gracing this meeting with his presence and accepting our invitation to deliver the inaugural address.
I also wish to thank the resource persons who have come to share with us important examples of good practice in our region. Their contributions will set the stage for the high level of discussions and debate ahead.
Ladies and gentlemen,
During its 80 years of existence the ILO has helped to establish a social framework in which to address the broader issues confronting working people everywhere.
Enterprises have always been a core concern of the ILO’s. Its commitment to social justice for all ensures that the evolution of enterprises is as important to us as the growth of social institutions. Within our Organization, enterprise representatives are on a par with those of workers and governments.
As recently as 1998 the International Labour Conference adopted a new Recommendation designed to promote the "fundamental role of small and medium-sized enterprises" in generating "full, productive and freely chosen employment".
Today, countries in every corner of the world have embraced the principles of market economies and democratic process. As a result, the quality of people’s lives and the health of their country’s economy depends more than ever on the dynamism of enterprises, particularly those in the private sector.
Ladies and gentlemen,
The Asian crisis, from which recovery is underway, has shown how far-reaching the effects of globalization are in East and South-East Asia. Those effects – some beneficial, many not – may have been felt more strongly here than in any other part of the world.
The prosperity and inequalities wrought by globalization in our region go to the very principles on which the ILO was founded. As stated in the ILO Constitution, "universal and lasting peace can be established only if it is based upon social justice".
The crisis, which left millions without proper employment and plunged them into poverty, represents a stark challenge for the international community generally and the ILO in particular.
In his aptly titled report to this year’s International Labour Conference, Decent Work, Director-General Juan Somavia observed that the crisis in emerging markets had "made evident the need for a strong social framework to underpin the search for a new financial architecture".
But Mr Somavia’s strategy goes much further. Noting that "the primary goal of the ILO today is to promote opportunities for women and men to obtain decent and productive work, in conditions of freedom, equity, security and human dignity", he has defined four strategic objectives:
1. fundamental principles and rights at work;
2. decent employment and income for women and men;
3. social protection for all; and
4. tripartism and social dialogue.
There is only one way to achieve those goals, and it is by working together.
The topics you have come here to consider are all closely related to the achievement of these goals. As globalization and new technologies step up competition on a scale never seen before, we know that human resources management will make an ever greater difference in the new world economy.
The competitive edge in that economy lies in the knowledge and skills of the workforce. Mr Hiroshi Okuda, the President of Toyota Motors, recently stressed in a popular Japanese magazine, the importance of "long-term vision and people-centred economic activity" for corporate restructuring. In his recent book, The Economics of Compassion, Kenneth Galbraith makes a very similar call for social accountability in the public and private sectors.
The essential elements of their shared vision for reform are well known. During a Symposium on the Asian crisis in Geneva last March Governing Body, our constituents spelled them out:
(a) Democracy as a guarantor of basic human rights, of transparent and hence sound economic and social policies, and of social justice;
(b) Social dialogue for sustaining democracy and open policy debate; and
(c) Strong systems of social protection.
Ladies and gentlemen,
When heads of State and Government met in Copenhagen in 1995 at a historic World Summit for Social Development they made a solemn commitment to the goal of full and productive employment. We believe that this goal can be attained, however threatening the pace of technological change, however high the level of competition worldwide.
To succeed, we need only create an environment in which enterprises have the incentive to put their money into employment creation. In designing those incentives, we must, as the title of Mr Somavia’s report suggests, aim not just for any work, but decent work.
In our region, which, unfortunately, is home to the world’s largest share of poor people, there can be no higher priority than the creation of decent work for all. Hence, the importance of the task that brings us together today.
Ladies and gentlemen,
There may be some here today who feel that corporate citizenship can apply only at more advanced stages of economic development. To reassure them, I shall take a single example: that of child labour. In his June address to the International Labour Conference US President Clinton cited our success in eliminating child labour from the soccer ball industry in Pakistan. Just two years ago, he noted, thousands of children under the age of 14 were stitching soccer balls full time for 50 companies. In collaboration with UNICEF, the ILO has taken those children out of that industry and given them a chance to go to school, while continuing to monitor the results.
Such efforts are a tribute to the ILO’s consensual approach based on the combined efforts of concerned, responsible employers, workers and governments.
Our efforts must also be directed to the creation of an enabling environment for all workers, women and men. In many parts of Asia, women are overworked, underpaid and left to their own devices. In more and more sectors and occupations, however, progress is being made. We shall no doubt learn more at this meeting about the special problems facing women entrepreneurs and how to overcome them.
Ladies and gentlemen,
By helping to forge new partnerships and furthering the development of thriving and responsible enterprises your work will demonstrate, better than any speeches, that we are an organization of workers, governments and employers.
That is our greatest strength. It is a strength that enables us to reach out and promote democratic, open societies based on a new vision of partnerships between government, social partners and civil society.
I wish you very fruitful deliberations.
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Inaugural address by
Mr M. Ishida, Director
ILO Enterprise and Cooperative Development Department
Honourable ministers, excellency, distinguished participants, ladies and gentlemen!
It is my great honour to represent the ILO Enterprise and Cooperative Development Department and address this important meeting to discuss "new paradigms to stimulate recovery from financial crisis in the Asian and Pacific region". On behalf of the Director-General of the ILO as well as the Executive Director of the Employment Sector, I would like to express our sincere thanks for your kind participation in this important meeting.
It is most encouraging to see that Asian countries are now on the way to rapid recovery from the economic crisis. We expect that this meeting will assist our constituents in finding new means of coping with recovery for further economic and social development. Such new ways forward could be significantly different from past practices. We should not take the same road, by which countries in the region have become trapped in the crisis after such spectacular growth over some 20 years since the 1970s.
A great lesson has been learned from the Asian crisis as well as from its contagious effects on the Russian Federation and Latin America. The challenge was how we could manage globalization more sensibly and wisely. Five factors are considered to be critically important for success in the future management of globalization.
Firstly, stabilization is necessary in the macro-economy. Prudent fiscal and monetary policies have to stabilize inflation and the balance of payments. Effective taxation policies should provide working people and investors with good motivation to work hard and save well in order to increase domestic and foreign capital investment. Sufficient credit should be made available to finance working capital in enterprise management. These are essential to promote investment, competitiveness, economic growth and employment.
Secondly, the financial and capital markets must be stabilized to give enterprises and working people enough confidence to make long-term investment efforts for economic and social development. Stability is necessary in the foreign exchange market – even in the stock exchange – as well as in the short-term financial market. Sensible control will have to be exercised over short-term speculative capital flows, particularly hedge funds and other speculative hot money.
In the entirely open market economy, the financial and capital markets tend to be very volatile. Occasionally, they can be terribly violent, and get out of governments’ control. Such volatility undermines the steady investment of enterprises and sacrifices the serious efforts of the hard-working population. The free market economy should not be over-ridden by speculation and gambling. We need to develop a free market economy in which the serious efforts and hard work of governments, employers, workers and enterprises are properly rewarded.
Social safety nets have been widely recognized as being critically important for the income security of the working population. In the face of serious credit crunch at times of crisis, enterprises tend to be on the verge of bankruptcy, and then need to restructure their own business for survival. This often involves redundancy programmes to displace workers.
Being prepared for such eventualities can in the future be effective in improving the income security of displaced workers. Social safety nets can also be effective measures for social and political stabilization, without which little economic and social development can take place in the long term.
Although we cannot stress enough the importance of stability in the macro-economy and financial and capital markets, including social and political stability, the right corporate conduct is also indispensable together with job creation by enterprise development, particularly by SMEs. Corporate behaviour and job creation are the subjects we are going to discuss this week in this meeting.
Business globalization demands that enterprises be increasingly more responsible in the financial, social and environmental aspects of their activities. Good corporate governance must ensure the financial accountability of enterprises for shareholders, investors, suppliers and creditors. More and more transparency and visibility are required along with effective supervisory mechanisms and clean management, doing away with any corruption or bribery.
The major concerns of the ILO with respect to corporate conduct are human and social accountabilities in enterprise management. Strategic human resources management is critical to creating long-term productivity and competitiveness in the global market. The challenge in human resources management for the future recovery and development process is how to develop the right behaviour of employees and managers, i.e. cooperation and team work while increasing their commitment to the long-term success of the enterprise together with competency to create uniqueness and distinctiveness in the market place.
It is not something tangible like innovative technology, but rather intangible. We may call it human capital, which needs to be developed to generate quality products and services for increased customer satisfaction. This is the way to create a competitive edge and overcome global competition. Strategic management and bottom-up participatory management will have to be promoted together with well defined competency-based human resources management.
Business globalization requires that enterprises come up with higher economic performance simultaneously with good social performance and environmental practices, not only in their own home countries but also in host countries. In fact, in everything that enterprises do today fundamental human and workers’ rights need to be protected while at the same time ensuring good environmental practices. No company is expected to prosper by sacrificing employees, suppliers, customers, investors and other stakeholders in the global community, including the natural environment.
Today, business is managed across borders by foreign direct investment, global supply chains, mergers and acquisitions, strategic alliance. These global business strategies will be taking place more and more in the future to enable enterprises to be more efficient and competitive in the global market. Unfortunately, such strategies are often accompanied by restructuring and downsizing for increased cost-competitiveness.
What tends to be sacrificed in the process are employment, human, social and community values, as well as the environment. Corporate citizenship and enterprise social initiatives are more and more expected for enterprise globalization to be economically viable and socially responsive.
Until now globalization has not been very conducive to employment in terms of both quantity and quality. Unemployment has increased everywhere in the world. Job insecurity is widespread while inequality is growing in income distribution together with deterioration in working conditions. Those who have dropped out of global competition can often find new job opportunities in the informal sector.
It is now an urgent task for every country to create new jobs by promoting new business and enterprise development. The governments, employers’ and workers’ organizations are expected to create a more favourable macro-economic environment and legal framework for providing more and better job opportunities for men and women.
Over the next three days we plan to discuss these critical issues at the enterprise level. It is enterprise which can create employment and income for long-term economic and social development. Appropriate measures are badly needed for successful enterprise development. This is the key to success in the management of globalization.
This meeting has been designed to exchange experiences and views about these critically important issues by discussing related conceptual frameworks and practical case studies. We hope that the meeting will be a great learning opportunity for all of us to develop and implement appropriate enterprise development policies by sharing information, knowledge and experiences among resource persons, participants and the ILO.
I wish all of you a very good meeting. Thank you very much.
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Inaugural address by
Mr Suwat Liptapanlop
Minister of Industry
Ms Horiuchi, Assistant Director-General responsible for ILO Activities
in Asia and Pacific,
Representative from ILO Headquarters,
Distinguished Delegates, Ladies and Gentlemen:
It gives me a great pleasure and honour to inaugurate the ILO Asia and Pacific Regional Round Table on the Role of Enterprises and Society Partnerships this morning. Let me, first of all, extend a warm welcome to all of you attending this Round Table meeting.
This meeting meets with the Ministry of Industry’s policy to strengthen the role of enterprises which we believe that have contributed to the economic and social development. I do appreciate the ILO’s efforts in organizing this meeting to provide an opportunity for all participants to discuss and exchange ideas and experience on best practices of partnerships between enterprise and society with regard to job creation, right environment and good working relationships.
We are all well aware that the world of business in the next century is going to be a very different world than at present. It is the challenge that we have to prepare ourselves to make a better society where the enterprises realize their role to mobilize the intelligence, skills and commitments of employees through progressive human resource management and employee involvement approaches. There should be new approaches to tailor organizational structures and working relationships in response to technological change and the global market.
The Minister of Industry has put up many plans, strategies, and measures in order to cope up which such challenges. The development of Small and Medium Enterprises or SMEs, as I would like to mention, is one of our main attention. SMEs are considered the engine of economic growth in most Asian economies by their sheer number and by virtue of their significant contributions to employment generation, value added and foreign exchange earnings and savings, as well as other economic and social contributions. As such, the Ministry of Industry has taken it seriously to revitalize the economy which was heavily hit by the crisis since the middle of 1997 through the SMEs promotion.
Before the crisis, it was noted that employment in the manufacturing and service sector was 7.3 million persons. Out of that, about 4.5 million persons were employed in the manufacturing sector, of which not less than 4 million persons were in SMEs. Unfortunately, due to the economic downturn, it forced the enterprises to have massive lay-offs of their employees. Apart from the unemployment situation, SMEs also face with incompetent workers and unskilled labours which lead to limitations of innovation and creativity of new products.
To solve the above-mentioned problems, short term and long term strategies and massive measures have been formulated to support the sustainable development of SMEs.
Most recently, the Cabinet approved, on the tenth of August 1999, a set of measures to encourage private investment in an attempt to further promote economic recovery. This new set of measures consists of four parts, three of which are in direct relation to the promotion of SMEs. They are tax and tariff measures; equity investment measures; and measures to improve financing for small and medium enterprises.
The Ministry of Industry also unveiled an SME master plan which corporates three strategies and six targets dealing with managerial and technology upgrading; manpower development; expanding market exposure; strengthening financial capabilities; improving the business environment; and cultivating micro enterprises.
The implementation of the SME master plan is expected to coincide with the passage of the SME law which creates a high-level policy making SME promotion committee headed by the Prime Minister and an SME promotion office which is responsible for coordinating the formulation of the SME action plan and for managing the SME promotion fund.
With a view to ensuring sustained development of SMEs and strengthening SMEs’ competitiveness, the Cabinet approved in principle on the fifth of April 1999 the establishment of the Institute for SME Development (ISMED). The Development of Industrial Promotion, Ministry of Industry is a core collaborating agency, jointly with Thammasart University, with support from a number of foreign organizations such as JETRO, JICA, JSBC, and so forth. The man objective of the Institute for SME Development (ISMED) is to disseminate knowledge and provide support services to SMEs nationwide in upgrading SME personnel through highly effective training and advisory methods and tools.
Moreover, in today’s context, with globalization and trade liberalization permeating all aspects of business life, there is a growing need to strengthen SMEs and enhance their competitiveness. These twin factors, which are offshoot of our commitments to the world community such as the World Trade Organization, ASEAN, APEC, to name just a few, pose new challenges and threats to SMEs. The conformity to quality standards at international, regional, and national level has taken on an increasing importance and asserts itself more and more as a determining factor of competitiveness. As such, the Ministry of Industry has initiated a large number of support programs for SMEs seeking for international standards attainment like ISO 9000, ISO 14000, or ISO 18000.
In light of improving Thailand’s industrial competitiveness, the Ministry of Industry prepared a Five-Year Industrial Restructuring Master Plan (IRMP) which outlines basic strategies and guidelines to improve the industrial competitiveness. The Master Plan calls for the restructuring of 13 priority industries by implementing 300 projects and provides clear directions in shaping the future of various industries. For example, moving towards production of higher value-added products, creating production and trading alliances, to name but a few.
Ladies and Gentlemen,
I would like to mention here that we also have designed various sorts of rural industrialization. Our Promotion of Rural Industrial Development Project (PRID) is one of the successful schemes which provides partnerships between the enterprises and rural community. We believe this will be one of the most important instrument in poverty alleviation. We also consider the role of enterprises’ social responsibility to provide training to their workers and pay more attention to their security, quality of life, safety and good environmental condition.
We believe that in an age of globalization, quality of products are essential due to the free trade and fierce competition in the global market. It is therefore necessary that enterprises need to play an important role in training their workers to be able to produce quality products with particular attention to cleaner technology and environmental concerns. It is also expected that there will more and more flow of labour from one country to another country in an age of long term globalization. We have therefore prepared ourselves to face such trend through various promotional schemes especially the provision of credit for SMEs and various forms of consulting services to SMEs as well as the tripartite cooperation assistance schemes giving the opportunity for village-based workers to share the ownership in doing the business in the long run. The Ministry of Industry has enacted various laws dealing with safety in working, health condition, motivation on employer and employee relationships, etc. The activities are undertaken in cooperation with related agencies, such as, the Ministry of Labour, Social and Welfare.
Thailand stands ready to cooperate with other countries in sharing our experience in this area. I do hope that this round table meeting will provide all of us here with more innovative enterprise-level initiatives to solve the economic crisis and bring about more prosperity in the region.
Finally, I wish this meeting every success and hope that you will have a fruitful and pleasant meeting. May I also wish all participants from abroad an enjoyable stay in Thailand
Thank you.
Updated by TN. Approved by BW. Last update: 31 May 2000.