international conference on cluster economic development - Asian ...

Dear Friends,
Annex E: Opening Address by Managing Director General
International Conference on Cluster Economic Development:
Promoting Local Economies through SME Cluster Approach
26 February 2010, ADB Headquarters, Manila, Philippines
OPENING ADDRESS
by Mr. Rajat M. Nag
Managing Director General
Asian Development Bank
On behalf of the Asian Development Bank, it is my great pleasure to join my colleagues in
welcoming you to our International Conference on Cluster Economic Development.
I am pleased to see so many representatives from government agencies across South and
South East Asia, who are directly involved in trade and SME development in their countries.
It is also very encouraging to see many experts representing a wide range of academia,
<strong>international</strong> organizations and institutions in this Auditorium today.
The purpose of today's <strong>conference</strong> is to enrich our knowledge of Cluster Economic
Development and its linkages to the SME-Cluster Approach.
The Asia and Pacific region, as you all know, has developed rapidly in recent decades. The
region has made significant strides in reducing poverty in the midst of a very fast economic
growth. It is a source of that pride that while in 1970, the level of poverty measured at under
a $1 /day was one in two persons, in 2003, it was 1 in 5. However, an immense task still lies
ahead of us to achieve the Millennium Development Goals (MDGs), for which in Asia we are
sadly offtrack.
In line with its development achievements, Asia is also in a period of rapid urbanization.
According to the latest UN projection, more than 54% of Asians will live in urban areas by
2030. This current urbanization pattern indicates that towns and cities are also sprawling out
to surrounding areas, forming “agglomerated (or clustered) urban-regions” and absorbing
patches of rural towns and villages in between.
This rapid urbanization does bring some benefits but also presents complex challenges. The
uncontrolled growth of cities has come with significant costs. Income gaps are widening
within and among urban and rural regions and developing countries. The region is suffering
under the weight of environmental degradation and increased risks of natural disasters due
to climate change. The recent energy and fuel crises, and of course the global financial crisis
which has tightened access to capital, have further added to the pressures.
On top of all this, we are only now beginning to emerge from the global downturn, which has
put significant budgetary and financial pressures on virtually all developed and developing
countries. With resources for development stretched tightly, it is clear—now more than
ever—that we need to target development funds to areas that can achieve the best impact. I
believe that the development story, while obviously a success, is highlighting the
environmental challenges, inequities and the rural urban divide. We, therefore, have to take
a new look -- a new approach – to address these issues.
One of these areas is the small and medium enterprise sector—SMEs. The last decade has
seen a huge emergence of SME clusters in the region. It is estimated that SMEs now
account for over 90% of all businesses, and employ as much as 60% of Asia's work force.
SMEs are increasingly recognized as a major driver of economic growth in developing Asia.