Good Morning Ladies and Gentlemen:
It is a great pleasure for me to welcome you here in Bangkok for this Asian workshop on enabling environments for agribusiness and agro-industries development. I thank each and all of you for accepting FAO’s invitation to participate in this event. This workshop is initiated and technically led by the Rural Infrastructure and Agro-industries Division of FAO, in cooperation with the Regional Office for Asia and the Pacific.
Providing an enabling environment for enterprises to start and thrive is an essential pre-requisite for economic development. Perhaps in Asia more than anywhere else, diverse country experiences demonstrate that putting proper policies, institutions and support services in place is key to promoting investments, attracting capital and creating economic growth.
In Asia, the numbers largely speak for themselves. The region continues to experience the world’s fastest growth and countries such as China, India and Viet Nam, to name a few, are boasting GDP growth rates that are in or near the double digit figures. As a whole, Asian economies have attracted an astounding 151 billion dollars of foreign direct investment in 2005, up from 21 billion in 1990. Asian countries (defined as the FAO Asia-Pacific region including Australia and New Zealand but excluding the NIS countries in Central Asia) drive 29 percent of the world’s international trade flows (2006) and are increasingly playing a leading role in the world’s capital markets. Asia produces 90 percent of the world’s rice and more than 40 percent of its wheat. It also turns out more than 50 percent of the world’s rubber, spices, vegetables, tobacco, eggs, fibers, nuts and vegetable oils (including palm oil).
But let us not be misled by these impressive economic results: Asia still faces many development challenges. Despite the fact that poverty has diminished in the region and that the Millennium Development Goal to reduce the number of the poor by half by 2015 is on its way to be achieved in most Asian countries, recent estimates presented by the Asian Development Bank indicate that nearly 1.9 billion Asians still live on just $2 a day or less. About one-third of this group subsists on less than $1 a day, for the most part living in rural areas.
The benefits of economic growth and corresponding levels of participation in development in Asia are not distributed equitably, as succinctly expressed in a recent article in the prestigious magazine “The Economist”: The richer are growing richer much faster than the poor. Significantly for all of us, the 2007 Asian Development Bank report on Inequality in Asia indicates that one of the main causes of the growing income gap is the different fortunes of rural and urban households. The latter are faring better, and poverty is basically a rural phenomenon. To illustrate this, ADB data indicate that the Gini index for developing Asia (16 countries) was around 46.8 in 1993 but had climbed to 52.4 by 2003.
The challenge ahead of us is thus the promotion of inclusive and equitable economic growth. Within this context, agro-industries and agribusiness have an important role to play in Asia, as countries in the region are predominantly agricultural based economies. It is also within this context that FAO - despite resource constraints – has accorded high priority to this sector, and taken the lead in organizing this workshop focussing on policies, institutions and support services conducive to fostering agribusiness and agro-industry development.
Your deliberations over the next three days will allow sharing of cross-country experiences with regard to the promotion of agribusiness and agro-industrial development. FAO has already conducted two similar workshops, in Latin America and Eastern Europe. It will hold a fourth one next month, dedicated to the African region. You will learn more about other regions during presentations by FAO colleagues. Many lessons can be learned from cross-country appraisals which will now – with your collaboration – include the Asian region. The Asian lessons, no doubt, will be instrumental in FAO’s global efforts to synthesize and disseminate the “do’s and don’ts” for promoting conducive climates for equitable and inclusive agribusiness and agro-industries.
The discussions you will conduct shall also contribute to filling a gap in the work of international development institutions concerned with the creation of enabling environments for investments and for the achievement of sustainable development. Most of this work has not been specific to any economic sector and FAO has been arguing that the particular characteristics of agribusiness and agro-industries call for a differentiated approach in both the assessment of enabling environments and in the promotion of business climate reforms. Several countries in the Asian region have developed successful modalities, including viable policies for public-private sector partnership, foreign investments for agribusiness, micro-finance and credit, as well as rural cooperative development, just to mention a few. We count on your expertise to strengthen our arguments in this regard.
I wish you all a very productive meeting and look forward to receiving the results of your work.